UPDATE: Prosecutor Lauds FBI Terrorism Task Force In Case That Linked Serial HYIP Promoter To Scheme Operated By Man Convicted Of Financing Terrorism
EDITOR’S NOTE: In an earlier post, we briefly touched on Ponzi peddler Brian David Anderson and his tie to an HYIP operated by a man convicted of financing terror. Federal prosecutors now have released a formal statement on Anderson’s guilty plea in a related Ponzi scheme — and the statement thanked the FBI’s Joint Terrorism Task Force for its work in the case.
Here, now, the story . . .
Critics long have fretted about the often-murky world of brick-and-mortar and electronic HYIPs and autosurfs, pointing out that no one really knows the motivations of the operators and their pitchman and that vast sums of money easily could fall into the hands of terrorists.
Now federal prosecutors have lauded the FBI’s Joint Terrorism Task Force for its work in the successful prosecution of Canadian citizen Brian David Anderson, whom investigators linked to an international HYIP known as Flat Electronic Data Interchange (FEDI).
Anderson was identified in legal filings as a FEDI pitchman, claiming FEDI was a commodities exchange and that he was selling “seats.”
FEDI actually was a fraudulent loan-investment scheme operated as an HYIP by Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon.†Alishtari, 46, of Ardsley, N.Y., pleaded guilty in September 2009 to fleecing investors out of millions of dollars.
In the same case — a case in which Anderson’s name was referenced as a FEDI pitchman in a grand-jury indictment — Alishtari pleaded guilty to financing terrorism.
“Alishtari . . . admitted that he stole millions from investors and knowingly financed what he believed to be tools of terror,” U.S. Attorney Preet Bharara said in September, after the guilty plea. “In enriching himself, Alishtari displayed a deliberate disregard for the financial and personal security of others.”
Investigators said Alishtari “facilitated the transfer of $152,000, with the understanding that the money would be used to fund training for terrorists.
“In the latter half of 2006,” according to investigators, “Alishtari agreed to discreetly transfer these funds for an undercover officer, believing that the money was going to be used to purchase night vision goggles and other equipment for a terrorist training camp in Afghanistan. During his guilty plea, Alishtari admitted that he sent the money from the United States knowing that the funds were to be used to help finance alleged terrorist activity in Pakistan and Afghanistan.”
Anderson, the former pastor of a church in Canada who was arrested in Spain in 2007, was not linked to terrorism. But Canadian authorities said he pushed FEDI and another investment scheme known as Frontier Assets.
He pleaded guilty in the United States to criminal charges stemming from the Frontier Assets scheme, and was sentenced last week to 90 months in federal prison. Prosecutors described it as a $4 million Ponzi scheme.
U.S. District Judge Alvin K. Hellerstein said Anderson “ripped out” investors’ hearts.
Prosecutors said Anderson told lie after lie to separate people from their money.
“Anderson touted Frontier Assets as an exclusive ‘private loan program’ that promised high rates of return in the form of interest payments on the invested principal,” prosecutors said.
The use of vague descriptions was part of the scheme, prosecutors said.
“[I]n a document titled ‘How Does Frontier Assets Make Their Income,’ Frontier Assets boasted that it had been appointed a ‘Program Manager’ to a ‘major International Business Corporation’ that participates at the ‘private banking level of several significant European and Asian banks,'” prosecutors said.
Investment jargon also was used to pique investors’ interest, prosecutors said.
“Frontier Assets claimed the ability to place investors with offshore entities, including ‘Private Placement Investment Programs,’ ‘Real Estate development in Asia and the United States,’ ‘Manufacturing plants,’ ‘Commodities worldwide,’ ‘Forex Exchange,’ and ‘Buying and Selling of specialized bank paper, i.e. CD’s and Bank guarantees,'” prosecutors said.
Investors’ funds were said to be insured by an “International Foundation,” prosecutors said.
But Frontier Assets was blowing smoke, prosecutors said.
“[T]he only funds paid into the Frontier Assets accounts were monies that had been provided by investors in the program, and the only payments out were payments of interest to investors, and transfers to Anderson and other co-conspirators. Like many other Ponzi schemes, more recent investors in Frontier Assets ultimately lost a substantial portion, if not all, of their invested principal. In total, at least 50 investors were defrauded of at least $4 million in funds.”
Bharara praised the FBI’s Joint Terrorism Task Force for its work in this case.
This is from 2004:
http://www.osc.gov.on.ca/en/10591.htm
David Sloan? Surely no relation?
Could there be a link to ponzi payment processor e-bullion? Mark Herpal thought so in 2008:
http://www.americanchronicle.com/articles/view/71986
Tony,
You’ll probably recall that e-bullion’s money is tied up in a California homicide investigation, as we reported here:
https://patrickpretty.com/2009/12/21/receiver-in-gold-quest-international-case-settles-with-charles-capps-ministries-for-100000-other-gqi-money-is-part-of-california-homicide-investigation/
Here is what Larry Cook, the receiver in the Gold Quest International (GQI) Ponzi case in Las Vegas, said in a court filing last month:
“Additional funds were located in accounts at E-Bullion, but the E-Bullion bank accounts and business records have been frozen by an action filed by the U.S. Attorney’s office in Los Angeles, California involving money transfer and money laundering violations. In a related state prosecution, the owner of E-Bullion was arrested in August 2008 for arranging the murder of his wife, a co-owner of E-Bullion. The Receiver and the Commission have made numerous inquiries regarding future access to the E-Bullion business records and funds, and we have been advised the U.S. Attorney’s office has not made a decision on when or how these records and funds will be administered.”
Here is the Los Angeles District Attorney’s September 2008 news release on the arrest of e-Bullion founder James Fayed for the alleged murder of his wife — a potential witness:
http://da.lacounty.gov/mr/archive/2008/091508a.htm?zoom_highlight=Fayed
It’s hard to quantify all the oddities associated with the GQI case. It was brought by the SEC in May 2008. In essence, GQI asserted it was a “sovereign” Indian tribe. The purported “attorney general” of the tribe tried to sue the SEC for $1.7 trillion.
GQI operated out of Las Vegas, purportedly was registered in Panama — and claimed immunity to U.S. law because of a claimed tie to a North Dakota Indian tribe.
Here’s one of our stories that mentions GQI:
https://patrickpretty.com/2009/09/04/silent-coup-regulators-confront-false-nation-states-in-burgeoning-battle-against-large-scale-ponzi-schemes/
Patrick
Quick note:
Here is the SEC complaint against GQI:
http://www.sec.gov/litigation/complaints/2008/comp20557.pdf
Patrick
Internet scams ‘may be money laundering’
January 20, 2010 – 3:39PM
AAP
Emails boasting of work-from-home opportunities could be a front for money laundering by gangs, Queensland’s crime watchdog has warned.
The warning was included in a new Crime and Misconduct Commission (CMC) report into money laundering and organised crime in Queensland, released on Wednesday.
The report said as much as $6 billion a year was being laundered across Australia by organised criminals using a range of scams, many of which use the internet.
http://news.smh.com.au/breaking-news-national/internet-scams-may-be-money-laundering-20100120-ml21.html
Hi Tony,
Sorry it’s Herpel with an ‘e’.
Regarding the Alpha Frontier, Inc. scam. ‘ponziboy’ Brian David Anderson directed his “investors”(victims) to send their funds to the Goldfinger Coin & Bullion Inc. Bank Account.#041-917008 City National Bank Account in Camarillo, CA better known as the day to day operating account for e-bullion. I’d say that is a pretty good link. Reference:
https://www.osc.gov.on.ca/documents/en/Proceedings-RAD/rad_20030918_anderson-et-al.pdf pg.5
The point of the American Chronicle article and many which followed was that the California FBI, at the time of the e-bullion arrests had called e-bullion a ponzi. My POV at the time: e-bullion was only a payment company and did NOT operate a ponzi. However, as we now know, the payment company receiving the ponzi funds can be, and sometimes is, complicit in the third party criminal operation and can be charged as so if they did not use some measure of due diligence in determining the source of funds for multimillion dollar deposits.
Once again, another great eye-opening story by Pretty Patrick. Great work Mr. P.
Mark Herpel
http://www.twitter.com/dgcmagazine
[…] more on the FEDI scheme. FEDI operator Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon,” pleaded […]
[…] been tied to mysterious scams such as Gold Quest International, the “Alpha Project” and Flat Electronic Data Interchange, known as FEDI. FEDI’s operator, Abdul Tawala Ibn Ali Alishtari, also known as “Michael […]