BULLETIN: SEC Hits Another Ponzi-Board Scam; Action Against CashFlowBot (DollarMonster) May Cause Restlessness Among ‘Small’ Operators

BULLETIN: The SEC has gone to federal court in Atlanta, charging the alleged operator of CashFlowBot (DollarMonster) with operating a Ponzi scheme. The “program” had a presence on Ponzi-scheme forums such as TalkGold and MoneyMakerGroup.

James A. Evans, 33, of Villa Rica, Ga., has been charged with selling unregistered securities and securities fraud. The SEC accused him of making misrepresentations to investors and operating CashFlowBot as a Ponzi scheme dating back at least to 2012.

CashFlowBot, according to the SEC complaint, used the SolidTrustPay payment processor.

From the SEC complaint (italics added):

The underlying mechanics of the DollarMonster scheme were simple: investors deposited funds into their Solid Trust accounts and then transferred those funds to a Solid Trust account controlled by Defendant Evans. Defendant Evans then transferred a portion of the funds to his personal bank account, and also redistributed funds to investors’ Solid Trust accounts as purported investment returns.

Investors were able to log into their DollarMonster accounts, which included the purported dollar value of their accounts (without identifying any underlying securities or ownership interests), including purported earnings.

The DollarMonster website did not contain language limiting investors to accredited or sophisticated investors, nor did the process of registration or creating an account require information indicating whether investors were sophisticated or accredited.

The scam gathered about $1.15 million, the SEC alleged. The agency’s action is the second this year against a Ponzi-board scheme that, relatively speaking, appears not to have collected a tremendous sum of money. (Not that $1.15 million is anything to sneeze at.)

In February, the SEC sued Achieve Community, alleged to have gathered about $3.8 million. The actions against Achieve and CashFlowBot may demonstrate that the agency is tracking schemes large and small, something that could cause fitful sleep in the HYIP sphere.

Some schemes such as TelexFree (2014/$1.8 billion) and ZeekRewards (2012/$897 million) gathered tremendous sums of money before interventions by law enforcement.

After he was subpoenaed in July 2014, Evans appeared to be hatching a new scheme at TheInvestorsExchange.com, the SEC said.

“Theinvestorsexchange.com purports to match investors looking for an investment return with individuals and companies that need capital,” the SEC alleged. “Theinvestorsexchange.com website also lists various advertisements for purported investment opportunities, with links to email addresses that potential investors can contact for further information.”

Read the SEC’s statement on CashFlowBot.