In Face Of Clawback Action And Warnings On Bitcoin Scams, Zeek Figure And Florida ‘ExPat’ T. LeMont Silver Offers ‘BitClubNetwork’ Mark Bonus Of More Than 3 Times What He Pays His Dominican Maid — And Uses Address In Money-Laundering Haven

“The Florida Office of Financial Regulation (OFR) warns consumers of the potential risks associated with purchasing, investing in, and exchanging virtual currencies, such as bitcoin. Members of the U.S. Congress, federal and state regulatory authorities, are continuing to question a way forward with respect to these diverse and decentralized payment mechanisms. Mt. Gox, an international Bitcoin exchange, filed for bankruptcy that resulted in losses in excess of $400 million and put a spotlight on risks surrounding virtual currencies.” — Florida Office of Financial Regulation, March 18, 2014.

“The Court may wish to take judicial notice of the many online videos in which one Defendant, T. Le Mont Silver, has appeared regarding his moving his family to the Dominican Republic . . . and promoting several ‘revenue sharing’ schemes in addition to Zeek.” — Kenneth D. Bell, Zeek Rewards receiver, July 30, 2014.

“Today the Consumer Financial Protection Bureau (CFPB) issued a consumer advisory warning consumers about the risks of virtual currencies such as Bitcoin. The CFPB advises consumers to be aware of potential issues with virtual currencies such as unclear costs, volatile exchange rates, the threat of hacking and scams, and that companies may not offer help or refunds for lost or stolen funds. The CFPB also announced that consumers who encounter a problem with a virtual currency product or service can now submit a complaint with the Bureau.” — Consumer Financial Protection Bureau, Aug. 11, 2014.

4th UPDATE 3:27 P.M. EDT U.S.A. Florida “ExPat” T. LeMont Silver, a target of a huge clawback lawsuit flowing from the 2012 Zeek Rewards Ponzi- and pyramid case and a veteran HYIP “revenue-sharing” huckster, may be a bit slow on the uptake.

Florida — his own state — issued a caution in March 2014, warning that there are risks associated with bitcoin and that virtual currencies have been known to have “[l]inks to criminal activity.”

In July, the court-appointed receiver suing Silver for the return of his alleged winnings in the Zeek scam alleged that Silver was in a group of “serial” pitchmen of “revenue sharing” schemes — in this context, Zeek-like schemes to defraud.

Receiver Kenneth D. Bell asked a federal judge to take “judicial notice” of certain Silver promotional videos.

Silver’s Zeek gains tipped the scale toward $2 million and came from Zeek victims, Bell has alleged.

On Aug. 11, the Consumer Financial Protection Bureau (CFPB) issued a warning on bitcoin-themed scams.

“You may also have heard that some people buy them as speculative investments or that you can ‘mine’ them with your computer,” CFPB said in its warning.

Sometime after 6 p.m. yesterday, Silver sent out an email promising recipients an “enormous opportunity in Bitcoin Mining” through a “program” known as “BitClub Network,” the PP Blog has learned.

“BitClub Network” prospects are asked to invest in “mining pools,” BehindMLM.com is reporting. (Link below.)

“There are already hundreds of companies that do a share of revenue with their traders in this space,” the Silver email read in part.

So, another “revenue-sharing” scheme from Silver — this in the face of highly public warnings about bitcoin-themed scams, HYIP scams and even a de facto warning from the Zeek receiver that something untoward was occurring.

“Even if you have no list or never have a recruit, you can leverage this system to earn EVERY DAY for a period of 1,000 days!” the Silver email bleats. “As you grow your units … each subsequent unit also earns for 1,000 days.”

No part of the email touches on any of the warnings issued by regulators about the volatility of bitcoin values and scams that crop up that seek to attach themselves to bitcoin.

Here is how the Florida OFR spelled out the risks just five months ago (italics added):

• No insurance guarantee. Virtual currency is not guaranteed with protection, while funds held by U.S. banks and credit unions are insured.
• Unpredictability. The value of virtual currencies can rise and fall in a short time, and these values are driven by the marketplace. Those who deal in virtual currencies should realize the risks, which can result in substantial losses.
• Security. Some virtual currency exchanges that offer to store the consumers’ funds in virtual wallets have failed to protect them, resulting in consumer losses due to hacking of these virtual wallets.
• Links to criminal activity. Criminals have taken advantage of the anonymity provided by virtual currencies, and have used them for money laundering and other crimes. If an exchange is shut down, consumers may not be able to access their funds.
• Regulation. Oversight of virtual currencies has not been thoroughly developed, and thus, consumers lack many of the protections they have come to expect within the financial services industry.
• Tax obligations. To view the Internal Revenue Service (IRS) guidance on the tax implications concerning virtual currencies, visit http://www.irs.gov/pub/irs-drop/n-14-21.pdf.

Silver has been featured in videos bragging about how good his life has been in the Dominican Republic, which recently has been rocked by the alleged TelexFree Ponzi- and pyramid scheme that has affected hundreds of thousands of people across the globe.

The veteran HYIP huckster appears to have relocated to the Dominican Republic from Florida after the collapse of the Zeek scheme and after at least two other “revenue-sharing programs” he promoted after the collapse of Zeek also cratered.

One way to view these outrageous “programs” is as a war against people of limited means or people already living in poverty, dressed up as in invitation to escape their own misery. Like the rockets of war rain down on their human targets, HYIP offers fairly rain down from the skies of the Internet, putting vast numbers of people at risk.

Whether Silver remains in the Dominican Republic is unclear. His email for the “BitClub Network” appears to have used an address in Seychelles, an Indian Ocean archipelago nation associated with money-laundering. Why a Florida man who apparently did at least a pass-through in the Dominican Republic would be using a Seychelles address was unclear.

Agnes Jouaneau, a purported “director” of Inter Reef Ltd., a purported U.K. business associated with the Profitable Sunrise HYIP swindle last year, purportedly operated out of Seychelles. (Also see this disturbing 2010 story at Stuff.co.nz that references the name of Jouaneau before Profitable Sunrise emerged and raises questions about the laundering of money, perhaps even for terrorism.)

Incredibly and disgustingly, Silver’s pitch for “BitClub Network” promises “[$]600 to one person that goes through this entire email” and puts into action “everything” he shares in a video pitch.

Silver did not say whether he intended to pay his mark with proceeds from Zeek or any of his other scams.

The $600 sum apparently earmarked for his “BitClub Network” mark is more than three times the monthly wage Silver said in a January video he paid his Dominican maid.

Also see “BitClub Network” review at BehindMLM.com.

A snippet from BehindMLM.com (italics added):

At the very least, it’s a certainty that BitClub Network are accepting investments from affiliates on the expectation of a >100% ROI. Whether or not the scheme has registered itself with the SEC is unclear. Given the offshore domain registration with a Panama-based provider, I’d say it’s unlikely.

BitClub Network is an offshore scheme seeking to fleece investors under the guise of “let us explain Bitcoin mining to you”, with the mining itself (if any actually exists) having little to nothing to do with the flow of funds within the scheme.

Whilst the owner(s) of BitClub Network are for now are sticking to the shadows, there’s evidence that factions of the Zeek Rewards Ponzi scheme might be behind it.

“Bitclub Network” and its companion rocket apparently are set to launch for “Founders” on Sept. 1.

If it does, it will launch on the 75th anniversary of the beginning of World War II and all the hellfire that followed. On Sept. 1, 1939, Hitler invaded Poland.

NOTE: Our thanks to the ASD Updates Blog for providing the July 30 filing by the Zeek receiver.