The lawsuit against the U.S. government filed by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer now appears on the court docket in the District of Columbia, meaning the case formally has been transferred from U.S. District Court for the Southern District of Florida.
U.S. District Judge Rosemary Collyer has been assigned the case, which was ordered transferred July 23 by U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida. It will be at least the fifth ASD-related case Collyer has overseen. The judge has presided over at least three forfeiture cases, a racketeering lawsuit filed by some ASD members against ASD President Andy Bowdoin — and the criminal case against Bowdoin.
Disner and Schweitzer — who went on to become affiliates of the Zeek Rewards MLM “program” that now is the subject of an examination by the office of North Carolina Attorney General Roy Cooper — sued the United States in November 2011. The ASD duo alleged their Constitutional rights were violated when the government seized ASD’s database in 2008. The pair also alleged that undercover agents who joined ASD had a duty to inform ASD management and that the government had gone shopping for a friendly forum in the District of Columbia when bringing the civil forfeiture case against tens of millions of dollars in the personal bank accounts of Bowdoin.
Meanwhile, Disner and Schweitzer — relying in part on a purported expert opinion by purported MLM expert Keith Laggos that ASD was not a Ponzi scheme — accused the government of presenting a “tissue of lies” when bringing the ASD Ponzi case. Disner and Schweitzer contended that ASD was not a Ponzi scheme and had been conducting business lawfully before the federal seizure.
Only months after Disner and Schweitzer presented the Laggos’ opinion to Judge Altonaga in Florida, Bowdoin pleaded guilty in the District of Columbia before Collyer to a Ponzi-related charge of wire fraud.
In a statement of offense, Bowdoin acknowledged ASD was a Ponzi scheme and had never operated lawfully from its 2006 inception.
Laggos was hired as a “consultant” by Zeek, but the firm appears to have dumped him last month. Details surrounding Laggos’ departure from Zeek remain unclear.
Litigation surrounding the ASD case has been marked by bizarre events. ASD is known to have ties to the so-called “sovereign citizens” movement. ASD figure Curtis Richmond, a purported “sovereign” being, once accused Collyer of “TREASON.” Meanwhile, ASD figure Kenneth Wayne Leaming is jailed near Seattle on charges of filing bogus liens against at least five public officials involved in the ASD case, including a federal judge, three federal prosecutors and the lead U.S. Secret Service agent on the ASD case.
Leaming also is accused of being a felon in possession of firearms, harboring two federal fugitives from Arkansas involved in a massive mail-fraud scam centered around a home-based business and uttering a false “Bonded Promissory” note. Leaming now is seeking to sue President Obama and U.S. Attorney General Eric Holder. Earlier, Leaming and ASD figure Christian Oesch sought unsuccessfully to sue the United States, apparently for the staggering sum of more than $29 trillion.
Edgar Rodgers And Diane Rowe: Source: Booking photos at Fulton County Jail.
Bond has been set at a combined $130,000 for a Georgia couple arrested Thursday by Atlanta police on charges they tried to sell homes that did not belong to them in an alleged paperwork scam involving bogus courthouse filings.
In recent years, Georgia has been near the top of the list in both bank failures and foreclosures. A number of scams have evolved, including “squatters” divining themselves a right to sell or move into homes that do not belong to them and foreclosure-rescue schemes in which foreclosure subjects are told they can remain in their homes by paying “rent” to purported third-party deed-holders who somehow whisked ownership rights away from banks.
Bond for Edgar Lee Rodgers was set at $85,000, according to the Fulton County Sheriff’s Office. Meanwhile, bond for Diane Rowe was set at $45,000. Both Rodgers and Rowe — purported “sovereign citizens” — are detained at the Fulton County Jail.
Rodgers has been charged with a single count of racketeering and five counts of theft by deception. His wife was charged with one count of racketeering and one count of theft by deception.
Here is how the Atlanta Journal Constitution put it in a story yesterday:
“Edgar Lee Rodgers and Diane Rowe are accused of filing false adverse possession documents — essentially claiming squatters’ rights — to homes that were vacant, likely due to foreclosure.”
Also see coverage at CBS Atlanta, which quoted Atlanta Police Sgt. Paul Cooper on the arrest of the couple.
Fort Lauderdale lawyer Steven N. Lippman conspired with now-disbarred attorney, convicted racketeer and Ponzi schemer Scott Rothstein to prop up the Rothstein, Rosenfeldt and Adler (RRA) law firm through electioneering, check-kiting and tax scams, federal prosecutors charged yesterday.
A 70-attorney firm that employed about 150 staff members, RRA collapsed in the wake of Rothstein’s epic Ponzi caper, which operated from the disgraced firm and was exposed in 2009. The Miami region’s top federal prosecutor yesterday described the scheme as “mind-boggling.”
“The breadth, scope, and sheer complexity of Rothstein’s $1.2 billion Ponzi scheme is mind-boggling,” said U.S. Attorney Wifredo A. Ferrer. “Its success depended, in no small part, on the complicity of his colleagues and associates, like Steven Lippman. Lippman, an attorney, is now the ninth person to face criminal charges in connection with this scheme. As this investigation continues, I am sure that more will follow.”
Lippman, 49, of Plantation, now has been charged criminally with conspiracy to violate the Federal Election Campaign Act, to defraud a financial institution and to defraud the United States.
The Alleged Electioneering Scam
It was the desire of Rothstein and others to “dramatically increase the stature and political power of RRA on the federal, state, and local level by making substantial political contributions to political candidates,” prosecutors said.
In line with that, Rothstein enlisted Lippman and others to donate to the 2008 U.S. Presidential campaign of Sen. John McCain “by agreeing that RRA unlawfully would provide them with the funds to make the political contributions,” prosecutors said.
In one instance, prosecutors said, Lippman made a $67,800 contribution to McCain-Palin Victory 2008 — and received $77,500 back from RRA.
Then- Alaska Gov. Sarah Palin was McCain’s Vice Presidential running mate on the Republican ticket in 2008. Neither she nor McCain has been accused of wrongdoing.
But Rothstein, through RRA, was interested in elevating his profile and improving his influence with politicians and political campaigns, prosecutors said.
The RRA check Lippman received “was fraudulently backdated to reflect that it was issued six days prior to the date of the actual contribution and the memo section of the check stated ‘bonus,” prosecutors said.
Various donations to GOP causes were “bundled” through the RRA firm — and Rothstein emerged a delegate to the 2008 Republican National Convention. Rothstein, in the midst of operating a colossal Ponzi caper, also was appointed to Florida’s 4th District Judicial Nominating Committee, which has sway “as to which persons should be nominated to be state appellate judges,” prosecutors charged.
The Alleged Check-Kiting Scam
With the RRA facing financial pressures in 2006, prosecutors said, Rothstein enlisted Lippman into a check-kiting scheme that involved an account at Lippman’s former law firm. The account at the former firm remained opened because the firm was still winding down its business when Lippman joined RRA in 2005.
Over time, prosecutors charged, Lippman issued checks from the former firm totaling more than $10.3 million. Those checks — “many” of which were written with insufficient funds in the account — were deposited into RRA accounts.
Rothstein and Lippman played the “float” on the checks to prop up the RRA firm and to “unlawfully obtain beneficial financing for RRA” by making it appear as though RRA had higher bank balances.
As was the case with the political donations, Lippman came out ahead by playing ball with Rothstein in the check-kiting scheme, according to the charging document. Although checks from the former Lippman firm routed through RRA totaled more then $10.3 million, Lippman deposited checks from RRA accounts totaling more than $10.6 million into the account of the former firm.
The Alleged Tax Scam
Lippman, prosecutors said, “defrauded the IRS by failing to report as income certain expense reimbursements and other reportable income he received from RRA.
The tax scam, prosecutors said, featured an agreement between Rothstein and Lippman that “Lippman would be paid a base salary and be given an expense account for which he would be fraudulently reimbursed for personal expenditures disguised as deductible business expenses”
Through the conspiracy, prosecutors charged, Lippman and RRA sought to “avoid paying additional federal income and employment taxes.”
“In addition,” prosecutors charged, “Lippman was paid from both the operating account and the payroll account of RRA, but would only receive an IRS Form W-2 reflecting the moneys paid to him through the payroll account. Lippman would not report to the Internal Revenue Service the moneys paid to him by RRA for expenses.”
“The charges against Steven Lippman show our resolve to unravel all the schemes in this complex financial fraud perpetrated by convicted Ponzi schemer Scott Rothstein and his co-conspirators,” said John V. Gillies, special agent in charge of the FBI’s Miami Office.
The probe in ongoing, Gillies said.
“It is disappointing that the number of people who chose wrong over right and participated with Rothstein in this massive fraud is at nine and rising,” he said.
The investigative efforts of the IRS are being led by José A. Gonzalez, special agent in charge of the IRS-Criminal Investigation Unit in Miami.
Jeffrey Ripley: Source: Ottawa County Sheriff's Office.
BULLETIN: A joint investigation by offices of Michigan Attorney General Bill Schuette and Commissioner Kevin Clinton of the Office of Financial and Insurance Regulation has led to criminal charges of racketeering against two men accused of targeting the elderly in a $9 million Ponzi scheme.
Charged in the alleged caper were Jeffrey Ripley, 59, of Sparta, and Danny Lee VanLiere, 60, of Grand Rapids, authorities said. The alleged scheme operated through an entity known as API Worldwide Holdings LLC.
At least 140 victims were fleeced out of about $9 million in the scam, which operated between July 2006 and January 2012, authorities said.
Ripley and VanLiere tracked the maturation dates of Certificates of Deposit held by victims “so they could make contact and persuade the victims to transfer the funds to API Worldwide immediately after the CD matured,” authorities said.
Danny Lee VanLiere: Source: Ottawa County Sheriff's Office.
Some of the elderly victims lost their life savings to the scheme, authorities said, characterizing the product offered to them as “fake securities” that promised “high returns.”
“Financial scams devastate the lives of citizens who worked so hard to provide for their families,” said Schuette. “Crimes against the elderly are on the rise, and those who target Michigan seniors will face the toughest penalties under the law.”
Ripley and VanLiere are charged with one felony count each of racketeering, six counts felony counts each of false pretenses and 25 felony counts each of violating the state’s Securities Act. The company is charged with the same crimes.
Ripley was arrested by the Michigan State Police Fugitive Team. VanLiere surrendered to authorities after Ripley’s arrest. Both men are listed a prisoners at the Ottawa County Jail.
Losses among victims ranged between $3,000 and $600,000, authorities said.
“Michigan consumers should give us a call before entering into an investment and we will run a check on any broker, advisor or product,” said OFIR’s Clinton.
All in all, the alleged caper led to the filing of 96 felony counts.
“There is a line between First Amendment Rights vs. Libel here. So, when does your right to form an opinion begins (sic) and when does it constitute a defamation of character? The answer is, law enforcement agencies don’t pay attention to what’s being said on forums and blogs, so get your head straight and feet firm on the ground.” — “MoneyMakingBrain,” in March 4, 2012, post on RealScam.com
As previously reported on the PP Blog, a JSS Tripler/JustBeenPaid “defender” known as “MoneyMakingBrain” (MMB) has emailed threats to the PP Blog, hatched bizarre conspiracy theories here and at RealScam.com and planted the seed that he was someone to fear.
The email threats were received after MMB claimed Feb. 18 on RealScam he had performed “due diligence” on JSS Tripler/JustBeenPaid. On a website known as “ReviewOPedia,” a poster with the same handle offered this on Feb. 14, in the context of JSS Tripler/JustBeenPaid:
“They are for real! ”
Within the same Feb. 14 ReviewOPedia post, MoneyMakingBrain ventured this (italics added):
“BTW, everybody should check out the JBP live support chatroom which has over 160 people at any given time and is live 24/7. You can ask all the questions you can come up with and there is always moderator. Who does that? I’m sold already. So, if someone here claims that they ‘didn’t get paid’, either they still don’t understand how the matrix works or they’re just internet trolls.”
Whether the “MoneyMakingBrain” on the PP Blog and the “MoneyMakingBrain” on ReviewOPedia are one and the same is unknown to the PP Blog.
Precisely why the MMB known to the PP Blog and RealScam.com has been trying to chill specific individuals and antiscam forums is unclear. What is known is that what he’s doing is hardly unique.
Lessons Of HYIP History Ignored
While asserting that he knows the PP Blog’s IP address and posting location, MMB now is making a claim on RealScam, a forum that concerns itself with international mass-marketing fraud, that “law enforcement agencies don’t pay attention to what’s being said on forums and blogs.”
That claim is contrary to the public record, which shows that any number of agencies, self-regulatory bodies and private attorneys have been noting for years that HYIP schemes are proliferating on the Internet and being spread by posters on forums and social-networking sites. It also ignores the reality — also a matter of public record — that law-enforcement has a history of filing court documents that reproduce HYIP forum posts and of infiltrating HYIP schemes.
Prominent FINRA Warning On HYIPs
In July 2010, the Financial Industry Regulatory Authority issued this highly public alert. FINRA noted that “HYIPs use an array of websites and social media — including YouTube, Twitter and Facebook — to lure investors.”
HYIPs fabricate a “buzz” and create “the illusion of social consensus,” FINRA said, describing the sinister approach as a “common persuasion tactic fraudsters use to suggest that “everyone is investing in HYIPs, so they must be legitimate.”
Forum Posts Become Evidence In HYIP Cases
In the SEC’s May 2008 prosecution of the Legisi HYIP scheme, the agency included page after page of forum posts as part of a 267-page evidence exhibit in support of an asset freeze. A federal judge approved the freeze. (The screenshot below is from one of the forum pages.)
Legisi operator Gregory McKnight pleaded guilty to criminal charges of wire fraud last month. He also faces millions of dollars in civil judgments. The SEC Legisi filings also include a reference to the MoneyMakerGroup forum, which is listed in other federal court filings as a place from which HYIP Ponzi schemes are promoted.
This section of the Legisi Terms of Service purports that members must avow they are not an "informant, nor associated with any informant" of the IRS, FBI, CIA and the SEC, among others. The others included "Her Majesty's Police," the Intelligence Services of Great Britain, the Serious Fraud Office, Interpol and others.
Included within the SEC filings is a reproduction of Legisi’s bizarre Terms. (See graphic at right. It is taken from court filings.) Among other things, the Terms made members avow they were not an “informant” for various government entities.
JSS Tripler/JustBeenPaid has similar Terms. The Terms read like an invitation to join an international financial conspiracy. (The next two paragraphs are verbatim from the JSS Tripler/Just BeenPaid member agreement. Italics added.)
6. I affirm that I am not an employee or official of any government agency, nor am I acting on behalf of or collecting information for or on behalf of any government agency.
7. I affirm that I am not an employee, by contract or otherwise, of any media or research company, and I am not reading any of the JBP pages in order to collect information for someone else.”
When the U.S. Postal Inspection Service filed criminal charges against Nicholas Smirnow in May 2010 for his alleged operation of the Pathway To Prosperity HYIP Ponzi scheme, MoneyMakerGroup, TalkGold and ASAMonitor were specifically referenced in the service’s case filings. Smirnow now has his face on an INTERPOL “Wanted” poster.
MMB took great exception to the PP Blog’s Smirnow post, apparently believing it had no relevance in the context of JSS Tripler/JustBeenPaid. MMB also apparently believes the PP Blog and RealScam are treating Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, unfairly.
Among other things, MMB asserted on the PP Blog that “no one is invisible to the MoneyMakingBrain and you need to stop doing what you’re doing against this man immediately. Because if you don’t, I am going to make a formal complain (sic) to the very authorities you purport are coming after scam sites and send all the evidence I’ve gathered so far from posting on your site and the realscam site. I don’t like witch hunts and I am sure Fred Mann can whip your ass in court for your highly suggestive, provocative, highly contentious and flat-out defamatory commentaries against his character on your sites.”
MMB further suggested that JSS Tripler/JustBeenPaid critics may be “needing to look for another ISP because you won’t have internet access at home or your office, wherever.”
About three months after the SEC brought the $72 million Legisi/McKnight HYIP Ponzi case, the U.S. Secret Service — in August 2008 — filed evidence exhibits in support of an order to freeze tens of millions of dollars in AdSurfDaily-related bank accounts. The complaint in support of the seizure specifically references an ASD-related “Breaking News” Blog, and an evidence exhibit labeled “Government Exhibit 5” consists entirely of an ASD-related post on a different Blog that took up 15 printed pages.
The 15-page post featured alleged comments from ASD President Andy Bowdoin in which he threatened to sue critics.
“These people that are making these slanderous remarks, they are going to continue these slanderous remarks in a court of law defending about a 30 to 40 million dollar slander lawsuit,” the post quoted Bowdoin as saying. (The screen shot below is from Government Exhibit 5. It has been a matter of public record approaching four years.)
Both the ASD and Legisi investigations used government agents in undercover capacities, according to court filings.
Meanwhile, in June 2009, attorneys suing Bowdoin on behalf of ASD members in a civil RICO (racketeering) case referred to the PP Blog’s reporting on the ASD Ponzi case, specifically its reporting on a spinoff surf known as AdViewGlobal (AVG). (See court document. See June 30, 2009, related story. See PP Blog story the attorneys referenced in their filings.)
During its short run, AVG bizarrely asserted that it operated as a “private association” that enjoyed U.S. Constitutional protections in Uruguay. AVG used U.S.-based Gmail addresses to conduct business, something JSS Tripler/JustBeenPaid is doing. The defunct surf further claimed that it had appointed a person who held the title of “Protector.”
Such claims have been linked to the so-called “sovereign citizen” movement. On Feb. 27, 2012, the PP Blog reported that a site linked to Mann published videos of Francis Schaeffer Cox, a purported “sovereign citizen” indicted in Alaska in an alleged murder plot against public officials. The site features a drop-in ad for JSS Tripler/JustBeenPaid that encourages prospects to register with a Gmail address.
Whether MMB is aware of all of these these historical incidents while issuing threats and planting the seed he has the power to divorce JSS Tripler/JustBeenPaid critics from their Internet connections is not known. MMB’s posting privileges were revoked by the PP Blog last week after he emailed threats and menacing communications. RealScam has continued to permit MMB to post on its forum.
The PP Blog believes it is unwise to click on any link MMB has posted on RealScam. He appears to be attempting to bait members of the antiscam community into clicking on links as part of a bid to gather IP addresses and other data from posters — all while asserting he has the power to use the information to harm individuals and entities such as Eagle Research Associates, a California based nonprofit that seeks to educate the public about scams.
Piling On The HYIP Absurdity
In what would become one of the most visited threads in the history of the PP Blog, a poster known as “CORRECTION” repeatedly demanded that the Blog retract this June 3, 2009, headline about the AdViewGlobal (AVG) autosurf and a strategy advanced by a promoter by which AVG upline sponsors could gather money from individual prospects and funnel it through the sponsors’ local banks before passing it to offshore payment processors — instead of letting AVG gather the money.
“Get it right before you lead with this inaccurate, bias (sic) and unfair reporting!!!!!!!!!!!” CORRECTION demanded.
The PP Blog did not submit to the demand to retract the headline.
It was revealed later in court filings that the grand jury that indicted Bowdoin on charges of wire fraud, securities fraud and selling unregistered securities began to meet in May 2009, about a month prior to ASD- and AVG-related threats and demands made against the PP Blog.
“The focus of this sweep was fraud committed against individual investors, including Ponzi schemes, high-yield investment fraud, and market manipulation cases,” said Shawn Henry, the FBI’s executive assistant director. “Operation Broken Trust highlights the pervasiveness of the threat we face, and its impact on individuals from all walks of life.
“The perpetrators of these crimes are those who YOU might trust . . . friends and colleagues — people from your workplace, your child’s soccer team, even your church,” Henry said.
Read this March 1, 2012, story that reports a top U.S. Justice Department official speaking in Mexico referenced bogus libel lawsuits filed to protect criminal enterprises. Read this Justice Department news release last week on a meeting in Ottawa between top U.S. officials and top Canadian officials to discuss cross-border fraud.
More HYIP Nonsense: No ‘Unfriendly Political Jurisdictions’
JSS Tripler/JustBeenPaid purports to pay a daily return of twice that offered by Bowdoin and ASD — and eight times that of Legisi. The JSS Tripler/JustBeenPaid returns are somewhat on par with the returns offered by Pathway To Prosperity.
At the same time, JSS Tripler/JustBeenPaid says this on its website (italics added):
“Our business operations are geographically decentralized. We don’t have any central office. We’re not located in any ‘unfriendly political jurisdictions.’”
It is difficult to conceive how JSS Tripler/JustBeenPaid could send any brighter signals of a scam in progress, given its absurd advertised rate of return and a public proclamation that it is not located in any “unfriendly political jurisdictions.”
In 2008, Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, identified himself as an ASD pitchman. On Jan. 23, 2012 — six weeks ago today — the Italian securities regulator CONSOB announced it had opened a JSS Tripler-related probe and issued a 90-day suspension order.
During a March 1 conference call for JSS Tripler/JustBeenPaid, a caller informed Mann that a member of his second-level downline had informed him that the member’s bid to advertise the “opportunity” had been blocked in Holland amid concerns of legality.
“Tell him not to advertise in any particular country,” Mann replied.
EDITOR’S NOTE: A top U.S. official — speaking today in Mexico City at the High-Level Hemispheric Meeting Against Transnational Organized Crime hosted by the Mexican government under the framework of the Organization of American States (OAS) — addressed the challenges the world law-enforcement community is confronting in the Internet Age.
In remarks apt to cause unease within the HYIP and organized-crime spheres, Deputy U.S. Attorney General James Cole noted that the government was wise to efforts by criminals to chill efforts to expose crimes by filing libel lawsuits. (A link to Cole’s full prepared remarks appears at the bottom of this story.)
Some recent Ponzi cases in the United States involving incredible sums of money — and the corresponding behavior of some of the participants — help prove the point . . .
AdSurfDaily President Andy Bowdoin, named a defendant in a 2009 civil case that alleged racketeering, issued “slander” lawsuit threats prior to the August 2008 intervention by the U.S. Secret Service in the ASD scheme. The threats were issued not long after Bowdoin had returned from a trip arranged by a lawyer in which the ASD patriarch had ventured to Panama and Costa Rica, according to court filings.
Bowdoin later was indicted, amid allegations he was presiding over an international Ponzi scheme that had gathered at least $110 million. Robert Hodgins, who was referenced in 2007 ads for ASD, is an international fugitive wanted by INTERPOL. The United States accused Hodgins of laundering proceeds for narcotics traffickers in Colombia.
In advance of today’s High-Level Hemispheric Meeting Against Transnational Organized Crime, OAS Secretary General José Miguel Insulza noted that such crime “is the principal continental source of activities such as drug trafficking, the illicit trafficking of firearms and immigrants, human trafficking, money laundering, corruption, kidnapping, and cybercrimes.”
Befitting its importance, the hemispheric meeting was hosted by Felipe Calderón, the president of Mexico.
Among others things, Deputy U.S. Attorney General James Cole said this at the meeting:
“The advance of globalization and the internet, while hugely beneficial to people everywhere, has also created unparalleled opportunities for criminals to expand their operations and use the facilities of global communication and commerce to carry out their criminal activities across national borders.”
Although Cole did not use the term “HYIP” in his remarks, it is clear that the U.S. government is well aware of the dangers online fraud schemes pose as they reach across borders to accumulate tens and even hundreds of millions of dollars — sometimes through a single fraud scheme.
As the PP Blog read the text of Cole’s remarks, another thing leaped off the page. Indeed, Cole said this (emphasis added):
“Because of the sophistication of the world economy, organized crime groups have developed an ability to exploit legitimate actors and their skills in order to further the criminal enterprises. For example, transnational organized criminal groups often rely on lawyers to facilitate illicit transactions. These lawyers create shell companies, open offshore bank accounts in the names of those shell companies, and launder criminal proceeds through trust accounts. Other lawyers working for organized crime figures bring frivolous libel cases against individuals who expose their criminal activities.“
Cole, of course, wasn’t talking specifically about the AdSurfDaily Ponzi case and ASD’s preposterous claims that Bowdoin had found a legitimate way to pay interest of 1 percent a day on the tens of millions of dollars sent in by participants and that ASD would create 100,000 millionaires in three years.
Even so, the words Cole uttered in Mexico City today have deep relevance to the HYIP sphere. Indeed, ASD reached across international borders and relied on an international sales force.
Here is how ASD worked: It relied on “legitimate actors” of the sort Cole described — in ASD’s case, a lawyer who allegedly scrubbed the “opportunity” to ensure compliance, and Moms and Pops and entrepreneurs (and people down on their luck) who signed up and became the friendly faces to their prospect bases. The salespeople were paid 10 percent for recruiting a friend with money and 5 percent more if the friend could recruit a friend with money — on top of “surfing” earnings of 1 percent a day and even more through the purported miracle of “compounding.”
The current HYIP scheme of JSS Tripler/JustBeenPaid has the same type of payout schemes that ASD foisted on the marketplace. One big difference is the JSS/JBP says it can provide twice the daily payout of ASD.
JSS/JBP’s purported operator is Frederick Mann, a former ASD pitchman.
In September 2011, the U.S. Secret Service described ASD as a “criminal enterprise.”
You’ll note above that Cole today used the same phrase to describe one of the inherent threats of transnational organized crime. And, as noted above, he also spoke about bids to chill critics through the filing of libel lawsuits.
Those same types of threats were made in the ASD case, beginning in the summer of 2008. In fact, federal prosecutors even included an evidence exhibit in case filings that alluded to one such alleged threat. Unmentioned in the initial ASD case filings were the bids to chill reporters in at least two states and a newspaper in Georgia.
If you’ve been following the HYIP sphere for any length of time, you know that threats to sue members of the antiscam community are part of the landscape — so much so, that it has become an HYIP cliche. The bids to chill are not limited to threats to sue for libel and “slander,” however.
It also is becoming an HYIP cliche that the operators and apologists for brazen HYIPs threaten to file complaints with the ISPs of members of the antiscam community — i.e., if you report about us we’ll take down your Internet connection and/or sue you for copyright/trademark infringement.
These things are transparent bids to chill speech. They also are designed to have a secondary “benefit”: to make the marks — who may consist in part of people who are otherwise “legitimate actors” — believe that harm will come to them if they ever complain, that there are severe consequences to those who complain.
These nefarious methods have surfaced in scheme after scheme after scheme, as have various assertions about “offshore” venues and the purported “safety” the “offshore” venues provide. Longtime observers know the claims are part and parcel to the HYIP sphere — and that claims that someone is a successful businessman who has presided over multiple companies almost certainly will be incorporated into the sales pitch for an “opportunity.”
The FBI, for just one example, has been warning for years about securities fraud, the “shadow banking system” and the use of shell companies to disguise fraud proceeds. The director has testified repeatedly on Capitol Hill about the subject, while simultaneously warning about debit cards that are being used in nefarious ways and the dangers posed by lone wolves and “home-grown, violent extremists.”
All of these things are or may be in play in the HYIP sphere. Here are some things you should know:
It is likely that the scheme’s operator is trading on the credibility you have with loved ones and friends within your immediate sphere of influence to drive dollars to the scam. It is equally likely that you are being denied the sort of information that would empower you to make an informed purchasing decision and highly likely you are being asked to participate in a venture that could result in prosecutions under both civil and criminal law, possibly even the RICO statute.
The rate of return will be preposterous in any real-world context and the math will be fuzzy and confusing, if not downright impossible.
Your sponsor will lie to you or pass on GIGO that is part of the company line because the company line is more convenient than the uncomfortable truth. It will be garbage coming in, and garbage going out.
You will be subjected to a direct or indirect threat or a bid to chill, especially if you ask uncomfortable questions or raise any doubts.
There is a chance you’ll be working for a racketeer or an international criminal, perhaps even a “sovereign citizen” who has hatched a construction by which nothing is a crime, that all conduct is lawful in the name of freedom and free markets. If your sentiment is against the government or “big business” because of your personal financial situation or your political or philosophical views, an extremist may try to exploit your sentiment for personal profit.
Just some things to think about in the age of the HYIP, the age of terrorism and the age of transnational organized crime as practiced on the Internet . . .
Read the full remarks of Deputy U.S. Attorney General James Cole here.
“Foreclosure-rescue scams prey on distressed homeowners’ desire to save their homes and to find any means to help fix their dire financial situations. As is the case with most loan-modification and foreclosure-rescue operations, consumers who dealt with Bella Homes lost not only the thousands of dollars they paid for ‘help,’ but also their homes.” — John Suthers, Attorney General of Colorado, Feb. 23, 2012
From a YouTube pitch for the Bella Homes' MLM compensation scheme.
BULLETIN: Colorado’s U.S. Attorney and the state’s Attorney General have gone to federal court in Denver to halt what they described as a foreclosure-rescue scam operated through an entity known as Bella Homes LLC.
Bella, which operated as an MLM and allegedly recruited more than 200 salespeople who paid the firm a combined total of more than $138,000 to pitch the “opportunity” and earn a shot at commissions from desperate homeowners, has been sued.
Also named defendants were Mark Stephen Diamond, Michael Terrell, David Delpiano and Daniel David Delpiano.
In court filings in the civil case, Daniel Delpiano was described by state and federal prosecutors as the Georgia-based “mastermind” of the Bella Homes fraud, which allegedly gathered more than $3 million.
Daniel Delpiano is a convicted felon currently on supervised federal probation, prosecutors said. Terrell is a Georgia attorney, and Diamond is an Arizona businessman, according to the complaint.
In February 2005, Daniel Delpiano was convicted of conspiracy to commit wire fraud in the District of Massachusetts. After that — in November 2006 — he was convicted of conspiracy to commit mail fraud, wire fraud and money laundering in the Middle District of Florida, prosecutors said.
And in May 2007, prosecutors noted, he was convicted of mortgage fraud and racketeering in Georgia Superior Court. Daniel Delpiano is the father of David Delpiano, who also resides in Georgia, prosecutors said.
RealScam.com, a forum that concerns itself with mass-marketing fraud, was among the first outlets today to report the news of the Colorado lawsuit. RealScam has been tracking Bella Homes’ developments at least since Nov. 27, 2011.
“To become a representative, the representative must pay Bella Homes an initial enrollment fee of $99.00 and a $195.00 fee to complete mandatory online training,” prosecutors said. “Each representative also has an option to pay a $49.00 monthly fee to create his own replicate of the Bella Homes website in order to recruit homeowners for the program.”
But the program, which has ceased to operate in the wake of the state and federal action, was a scam, prosecutors said.
“Bella Homes gave false hope to desperate homeowners, taking advantage of their desire to do anything to save their homes,” said U.S. Attorney John Walsh. “Bella Homes’s actions not only hurt those vulnerable homeowners, but the housing market generally. The company will now face the consequences of its misconduct.”
At least 450 people sent Bella money to save their homes, but no evidence has surfaced that Bella saved any homes, prosecutors said.
The 52-page complaint includes a number of examples in which financially strapped homeowners allegedly paid Bella thousands of dollars in illegal, upfront fees.
“The homeowner is fraudulently induced to pay ‘rent’ to Bella Homes in lieu of making the mortgage payments,” prosecutors charged. “Some of the mortgage lenders and mortgage servicers detrimentally affected by Bella Homes’ fraudulent scheme are federally insured financial institutions.”
Most of the money paid by victims “has been diverted to the individual Defendants for their own personal use,” prosecutors said.
Diamond, for instance, allegedly received “at least” $321,000 in fraud proceeds, “including more than $277,000 for his American Express bills,” prosecutors said.
Meanwhile, Daniel Delpiano received “at least” $184,000 in fraud proceeds that were applied to personal expenses. Of that sum, as much as $86,180 appears to have come in the form of ATM cash withdrawals, prosecutors said.
“The ATM cash withdrawals were frequently in the amount of $700,” prosecutors said.
Although YouTube videos touting the Bella Homes’ MLM compensation scheme continue to appear, the company’s website is offline and a federal judge has issued orders to preserve assets.
Here is a snippet from the complaint. (Italics added):
Rather than helping homeowners remain in their homes long term, as promised, Bella Homes preys upon distressed homeowners, duping them into paying thousands of dollars based on false promises and false representations, yet provides no meaningful assistance to prevent foreclosure or to allow homeowners to remain in their home for the time period promised by Bella Homes.
Bella Homes has fraudulently obtained approximately $3,000,000 from over 450 homeowners across the nation, and is rapidly expanding its fraudulent operations. In the last two months of 2011 alone, it has fraudulently obtained approximately $1,000,000 from homeowners.
As part of the scheme, Defendants solicit distressed homeowners to convey title to their home to Bella Homes for no consideration and to enter into purported three-, five-, or seven-year lease agreements under which the homeowner pays Bella Homes monthly “rent.” Bella Homes also collects an advance fee from the homeowner of three-months? “rent” upon transferring title and signing the lease. Despite Bella Homes taking title to and collecting “rent” for the property, it does not pay the homeowner for the property and it does not pay off or assume the existing mortgage. Nor does Bella Homes make any of the mortgage payments or pay any of the taxes or insurance for the property.
Here is a snippet from the preliminary injunction. (Italics added):
Except as noted below, Defendants and those involved in active concert with them who are served with a copy of this Order are ENJOINED from:
1. Conducting or continuing to conduct business activities by or on behalf of Bella Homes, LLC, including but not limited to: (a) engaging in any action affecting real title to any property; (b) entering into any agreements relating to real property; (c) collecting, negotiating, or depositing any rental payments made by purported lessees of Bella Homes, LLC; (d) distributing or receiving disbursement of any funds from Bella Homes, LLC; and (e) advertising, promoting, or soliciting customers on behalf of Bella Homes, LLC.
2. Transferring, withdrawing, pledging, dissipating, or otherwise using or concealing funds of Bella Homes, LLC or funds received by any Defendant from Bella Homes, LLC in any accounts with any financial institution . . .
The defendants have agreed to the preliminary injunction, which calls for “ceasing further operations and transferring approximately $500,000 to the government for homeowner restitution, pending final resolution of the case,” prosecutors said.
BULLETIN: A six-time felon who hatched a real-estate Ponzi scheme and swindled a dozen investors out of $660,000 has been sentenced to 12 years in a Georgia state prison, the office of DeKalb County District Attorney Robert James said.
Anthony Ray ripped off his own flesh and blood and met some of his victims at Pine Grove Baptist Church, prosecutors said.
“He had a total disregard for others to the degree he even stole from his own father,” said James. “I hope this case serves as a warning for residents to do a thorough background check on any investments that may sound too good to be true. They often are just that.”
Judge Gregory Adams also ordered Ray placed on probation for eight years after his prison release, prosecutors said, noting that Ray “will be required to serve every day of his twelve-year sentence.”
Ray was prosecuted on racketeering charges and pleaded guilty.
Screen shot from Dec. 14 evidence exhibit filed as part of an emergency motion in the Jeremy Johnson/IWorks fraud cause brought by the FTC. The site shown in the exhibit and described in the emergency motion by an attorney for the court-appointed receiver in the case is not the actual site of the receiver. Rather, it is an imposter site that uses the receiver’s name and is designed to intercept traffic and undermine the receivership estate, according to the emergency motion. The bogus site later was altered further and the words “Thieves,” “Lairs” (sic) and “Crooks” were placed near the top of the page, according to a separate evidence exhibit.
EDITOR’S NOTE: This story originally was published Dec. 22, 2011, 10:41 a.m. It was updated at 8:11 a.m. on Dec. 23, 2011. The PP Blog temporarily “unpublished” the story on March 23, 2012. Explanation of why it was taken offline temporarily is here. On March 23, 2012, the PP Blog’s security software recorded a “mass injection attack” as the Blog visited a domain styled CollotGuerard.com while researching matters pertaining to Jeremy Johnson. Collot Guerard is an attorney for the FTC and an alleged subject of harassment by Johnson or people close to Johnson because of the FTC actions against Johnson. The PPBlog is not revisiting the CollotGuerard.com domain and believes it is imprudent for readers to visit the domain.
Our Dec, 22, 2011, story is republished below. The republication date is Jan. 15, 2013 . . .
UPDATED 8:11 A.M. ET (DEC. 23, U.S.A.) Robb Evans, the court-appointed receiver in the Jeremy Johnson/IWorks Internet Marketing fraud case filed by the FTC a year ago, first came to national prominence as a liquidator in the Bank of Credit and Commerce International case in the 1990s. If the bank’s name alone doesn’t spark your memory, think of the acronym by which it was known: BCCI.
If you’re, say, over 40, images of BCCI and the spectacle it created perhaps are seared in your memory. The bank’s criminality and 1991 collapse created a scandal royale on both sides of the Atlantic and all over the world, including the Middle East. BCCI, the Wall Street Journal (Europe) wrote on Aug. 3, 2001 — a little more than a month before the 9/11 terrorist attacks — was a “renegade bank” that had relied on secrecy and had been designed to be “offshore everywhere” to evade regulatory scrutiny. The stunning collapse amid allegations of international money-laundering and a disguised takeover of U.S. banks initially put customers on the hook for $9 billion in losses.
BCCI, which allegedly conducted business with the terrorist Abu Nidal (died 2002) and the now-dead or imprisoned dictators of Iraq and Panama (Saddam Hussein [died 2006] and Manuel Noriega) — and also could not say no to the Medellin Cartel and Colombian narcotics traffickers — went on to become perhaps the most infamous acronym in the history of banking. Evans has testified before Congress on the subject of offshore banking, corruption and the war on terrorism. His bona fides and expertise in unraveling the affairs of companies implicated in complex fraud schemes are firmly established in the courts.
U.S. District Judge Joyce Hens Green of the District of Columbia once described Evans’ efforts as “remarkable.” In 1998, noting that she had presided over elements of the multibillion-dollar BCCI case for eight years and calling it the “longest-running forfeiture proceeding in the history of federal racketeering law,” the judge thanked Evans and others publicly for helping preserve $1.2 billion in U.S. assets for distribution to defrauded BCCI customers.
Evans is the namesake of Robb Evans & Associates LLC. What does the company do?
“What we do in my organization is we trace money, and we try and recover it for the victims of fraud, and we do it mostly on behalf of the United States Government,” Evans told the House Subcommittee on Oversight and Investigations in 2006.
Despite his bona fides — despite his record as a court-appointed receiver in numerous cases and his testimony before the U.S. Congress on critical matters of U.S. and international financial security — someone with a Google AdWords account and perhaps some knowledge about SEO planted the seed earlier this month that Evans was presiding over a fraudulent company, according to new federal court filings in the Johnson/IWorks case.
For a yet-to-be-determined period of time, the names of Evans and his company were pushed down in Google search results and replaced at the top of the rankings by a domain styled RobbEvansFraud.com — with a paid AdWords ad to the right of the No. 1 search result driving traffic to the faux Evans site, according to an evidence exhibit filed in federal court on Dec. 14.
The faux site planted the seed that Robb Evans & Associates consisted of “Thieves,” “Lairs” (sic) and “Crooks,” according to to an emergency motion filed by an attorney for Evans.
“Warning,” the first sentence on the faux site blared, “this website is dedicated to collecting information from victims of Robb Evans and Associates.”
In June, Johnson, 35, was arrested at the Phoenix airport at which federal agents allegedly found him in possession of $26,400 in cash and a one-way ticket to Costa Rica. He asserts his innocence to both the criminal and civil charges brought in the case. Johnson now is free on bond.
Stop The Madness
The FTC moved against Johnson, IWorks and other companies in December 2010, alleging an Internet-fueled fraud involving hundreds of millions of dollars. Evans was appointed receiver by a federal judge in Nevada, the venue from which the action was brought. The agency alleged that at least 51 shell companies were set up to dupe banks and to carry out the fraud, which resulted in “hundreds of thousands” of chargebacks and threats to consumers who filed chargebacks.
FBI Director Robert Mueller III warned Congress in March 2010 and again a month later about the dangers of shadowy banking practices, noting that that shell companies often play a role in disguising fraudulent proceeds.
“Money laundering allows criminals to infuse illegal money into the stream of commerce, thus manipulating financial institutions to facilitate the concealing of criminal proceeds; this provides the criminals with unwarranted economic power,” Mueller said.
IWorks operated out of an office at 249 E. Tabernacle St. in St. George, Utah. The street intersects with nearby South Main, home of the historic St. George Tabernacle. The Tabernacle opened in 1876. The city of St. George is famous for its geology, its climate and for its historic ties to Brigham Young and The Church of Jesus Christ of Latter-day Saints.
The city, unfortunately, also is becoming increasingly known as the town from which Johnson allegedly carried out a fraud involving hundreds of millions of dollars, in part by manipulating the banking system through dozens of shell companies in Nevada and other states.
In the emergency motion, an attorney for Evans now says that Johnson and perhaps others are seeking to interfere with the courts and the receivership estate by using the Internet to slime Evans, the FTC and Collot Guerard, an attorney for the FTC. The FTC has filed its own emergency motion.
Despite Hunt’s order, Johnson sued Evans in Utah state court. On Dec. 7, Hunt ordered the Utah state action brought by Johnson dismissed.
Johnson also asked Hunt to order the FTC to pay the legal fees of corporate defendants. The judge refused.
Of all the troubling developments, perhaps the most troubling is the allegation that Johnson and perhaps others have weaponized the Internet to interfere with the administration of justice. The site that attacks Guerard — a career civil servant — clams she has been “accused of fraud and corruption.” The site was created on Oct. 7, 2011, months after Hunt issued the preliminary injunction and order not to interfere. The site appears to operate from servers in Utah, with the registration hidden behind a proxy.
“[W]e are collecting information related to any wrongdoing on her part,” the site informs visitors.
The attack on Guerard is just the latest in a string of attacks or veiled threats against law enforcement. AdSurfDaily figure Kenneth Wayne Leaming, for example, is jailed near Seattle on federal charges he filed bogus liens against public officials in the ASD Ponzi case, including a federal judge, three federal prosecutors and a special agent of the U.S. Secret Service.
Vincent McCrudden, meanwhile, was arrested and jailed in January 2011 amid allegations he threatened to kill 47 regulators and government officials while using a website and emails to terrorize public servants. Just last week, federal prosecutors in Virginia said that Roger Charles Day Jr., who endangered the U.S. military and others in an offshore scam and was sentenced to 105 years in federal prison, had “filed hundreds of billions of dollars of fraudulent default judgments against more than 100 people who Day claimed had prosecuted him unfairly.”
The Day procurement scheme involved at least 18 companies, prosecutors said. When the scheme was exposed, Day simply “directed his conspirators to discontinue bidding through those companies and instead form and use new companies,” the Justice Department said.
In the new filings by the attorney for Evans in the FTC’s case against Johnson and IWorks, is is alleged that Johnson had a role in the posting of “false and scurrilous” material on the Internet in a bid to hamstring the administration of the receivership estate.
Among other things, one of the websites tied to Johnson “makes false allegations concerning ‘mass fraud and corruption by Robb Evans and Associates,’” according to the attorney’s emergency motion to disable the site.
Gmail addresses using the names of Evans and Guerard were created and were designed to “impersonate and/or interfere” with the receiver and others associated with the case, according to the emergency motion.
Johnson and others created other websites — including EvilFTC, FTCTactics and a site in Guerard’s name — to further undermine the legal process, according to the receiver’s emergency filing. Two other sites in the names of other FTC attorneys also were created, according to the receiver’s emergency motion.
Those sites, according to records, both were created on Dec. 1. Like the site in Guerard’s name, the servers appear to be based in Utah.
When the receiver’s attorney contacted Johnson to demand the site targeted at Evans be taken offline, Johnson claimed he did not own, host or control the site while insisting that “the domain has not been used for anything deceptive.”
“It is a constitutional right to be able to speak freely even if your client does not like it,” Johnson informed the receiver’s attorney in an email, according to an exhibit attached to the receiver’s emergency motion.
Roger Green: Source: Broward County Sheriff's Office.
Saying that money-laundering and securities fraud were part of a $7 million Ponzi scheme involving aircraft parts, the Florida Department of Law Enforcement (FDLE) has arrested two men, charging them with racketeering.
Roger Green, 78, remains in custody at the Broward County Jail. Alleged accomplice Victor Brown, 55, of Hollywood, was freed after posting bail. The men were arrested Wednesday.
Green and Brown were accused of obtaining funds fraudulently from investors and using proceeds from the scheme “to gamble and for the purchase of expensive cars and other items.”
The arrests, FDLE said, came as a result of “Operation Usual Suspects,” which began in 2009 and focused on a company known as Military Air Parts International.
Web records tie the men to a now-defunct site known as C130Spares. Among other things, the site featured a photo of a U.S. Air Force C130 transport plane with the words “Welcome Aboard” appearing in the image.
“You will soon find how committed we are to the aviation industry,” the site promised. “We serve the C130 Military and L100 Commercial aircrafts exclusively! As founders, we look forward to supporting your parts and flight requirements world wide.”
But “Green and Brown did not acquire, nor were they in possession of, the aircraft parts they were offering to sell,” FDLE said. “The few aircraft parts they did obtain were used to acquire funds from additional victims.”
All in all, the swindle ensnared 24 “victim investors in Florida and elsewhere,” operating between 2004 and 2007, FDLE said.
Investors were told Green and Brown could generate returns of up to 18 percent within three to six months, FDLE said.
EDITOR’S NOTE: This story concludes with a link to an April 27, 2010, story by CourthouseNews.com. At the bottom-left of the CourthouseNews story, readers will find a link to the RICO lawsuit filed by public officials last year against Richard Enrique Ulloa. The document is worth the time to read because it shows how public servants can become targets of spectacularly vexatious litigation that forces them or their employers to hire attorneys, thus burdening judicial resources and potentially driving up costs for taxpayers.
At least part of the bizarre saga of Richard Enrique Ulloa has come to a close: Ulloa, a 52-year-old purported “sovereign citizen” who resided in Stone Ridge, N.Y., was sentenced yesterday to five years in federal prison for mailing “fraudulent liens and judgments to a variety of individuals and financial institutions who had displeased” him, the office of U.S. Attorney Richard S. Hartunian of the Northren District of New York said.
The FBI joined Hartunian’s office in announcing the sentence, which was ordered by U.S. District Judge Thomas J. McAvoy after Ulloa asserted various individuals and entities owed him billions of dollars. McAvoy also ordered Ulloa placed on supervised probation for three years after his prison release and to pay $63,401 in restitution.
Ulloa’s bizarre tale touched on multiple courtrooms in multiple jurisdictions. It also involved public officials fighting back against Ulloa by suing him under the federal racketeering statute.
In April 2010, the County of Ulster, N.Y., and the towns of Lloyd, Rosendale and Ulster asserted that Ulloa and others “sent or caused to be sent mailings and/or wires consisting of ‘criminal complaints,’ ‘invoices,’ ‘demands for payment,’ and ‘judgments’ that contained materially false statements,” according to federal records.
Owing to sovereign-inspired hectoring, public officials began to fear for their safety and the town of Rosendale ordered body armor for court officials, according to the Times Herald-Record.
Read an April 2010 story (and see the accompanying court document) on CourthouseNews.com.
The lawsuit against the U.S. government filed by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer now appears on the court docket in the District of Columbia, meaning the case formally has been transferred from U.S. District Court for the Southern District of Florida.
