Government Refuses To Say Whether Return Of INetGlobal Funds Means The Firm Has Been Cleared And The Probe Into Its Business Practices Has Concluded

UPDATED 9:24 P.M. EDT (U.S.A.) A spokeswoman for U.S. Attorney B. Todd Jones of the District of Minnesota refused to say today whether the government’s probe into the business practices of Inter-Mark Corp. and INetGlobal is over.

“[W]e never confirm or deny the existence of investigations,” said Jeanne Cooney.

The firms announced yesterday that prosecutors had agreed to return more than $20 million seized by the U.S. Secret Service in a Ponzi scheme probe in February 2010. Some INetGlobal members instantly seized on the news, claiming the government’s release of the funds validated the company’s business practices as they existed at the time of the seizure.

Separately, INetGlobal members circulated a statement from Inter-Mark Board Chairman Bob Kinsella. The PP Blog was sent a copy of the statement by an INetGlobal member, under a subject line of “Gov. Releases funds Lets Rock!”

“Today’s outcome is validation of the Inter-Mark Corporation business model,” the statement quoted Kinsella as saying. “I wonder if any business has been more researched and analyzed as Inter-Mark in the last year. Sales Associates all over the world should have complete confidence in the future of Inter-Mark Corporation.”

Kinsella was quoted in the Star Tribune newspaper as saying the same thing.

Cooney had no immediate comment today on Kinsella’s statement that the firm’s business model had been validated.

But Cooney did say that she believed a claim on the INetGlobal Blog that the firm had been validated had been made in “error” by the company — and that the firm “removed” the claim from its Blog.

Agreement

The money is not being released to INetGlobal directly, under the terms of an agreement approved by U.S. District Judge Donovan Frank. Instead, it is being released to attorney R.J. Zayed, who was appointed Temporary Administrator of Seized Funds.

Zayed, who also is the court-appointed receiver in the Trevor Cook Ponzi scheme, will distribute the funds under judicial supervision to INetGlobal affiliates owed money at the time of the February 2010 seizure.

Frank gave the government up to 45 days to turn over the money to Zayed. Prosecutors can petition for an extension of time beyond 45 days for “good cause,” according to the order.

“The Administrator shall conserve, hold, and manage the Seized Funds transferred by the United States as part of the Court’s Order, and shall perform all acts reasonably necessary or advisable to preserve the value of the Seized Funds until they are validly distributed to the members of Inter-Mark,” according to the order.

“If the Administrator is satisfied, in his sole discretion, that the identity of the Inter-Mark member is correct, that the amount due and owing to the member is correct, and that the name, address, government identification documents, and IRS tax forms of that member are proper, the Administrator shall wire transfer from the Seized Funds to that member’s ‘e-wallet’ account with International Payout Systems the amount due and owing to that member,” according to the order.

Funds that remain after Zayed pays INetGlobal affiliates will be returned to the company, according to the agreement.

No one has been charged criminally in the INetGlobal probe. Former executive Steve Renner, who denied wrongdoing, was sentenced in 2010 to 18 months in federal prison in an unrelated tax case. He is scheduled to be released in October.

The firm says it will have an exciting future.

“InetGlobal will use the remaining funds to launch a new and exciting array of products, many of which have been delayed due to the seizure of the funds,” the company announced on its Blog.  “What working capital was available was used to service the existing business and to pay for the expensive process required to convince the United States government that iNetGlobal’s business is legal.”

An INetGlobal supporter who emailed the PP Blog this afternoon included a link to the Star Tribune story, which included Kinsella’s comment that the firm had been validated.

“Wow, it looks like you have some explaining to do,” the sender opined, referring to the Blog’s coverage of the allegations against the firm.

The sender then imagined a fantasy conversation in which the Blog would say “oh uh uh well uh” — and which he would say in return, “THAT’S WHAT I THOUGHT!!”