‘WINGS NETWORK’: Court Orders Disgorgement Of Tens Of Millions Of Dollars In Pyramid/Ponzi Case — Plus, Prison Sentences Ordered In eAdGear Case
Back in February 2015, the SEC brought a Ponzi- and pyramid action against the alleged operators of “Wings Network,” alleging a cross-border MLM fraud that had gathered tens of millions of dollars.
Massachusetts Commonwealth Secretary William Galvin, head of the Massachusetts Securities Division, charged Wings Network and some individuals in 2014.
The SEC announced today that it had obtained final judgments by default against alleged operators Tropikgadget FZE and Tropikgadget Unipessoal LDA, collectively Tropikgadget, both of Portugal. A federal judge “ordered Tropikgadget to pay disgorgement of $25,213,990, representing profits gained as a result of the conduct alleged by the Commission, plus prejudgment interest of $961,742, and a third-tier civil penalty of $725,000,” the SEC said.
At the same time, the agency said, relief defendants who’d received ill-gotten gains from the fraud were assessed liability of more than $9 million. These include Portugal-based entities known as “Compasswinner” ($8,125,235) and Happy SGPS SA ($1,102,711).
Litigation against individual operators and promoters continues, the agency said.
Like many securities-fraud schemes, Wings Network used social media to lure in the masses, the agency said.
“After establishing a network of lead promoters, recruitment of new members surged through the use of social media such as Facebook and YouTube,” the SEC said earlier this year. “The promoters used Facebook to publicize ‘business meetings’ that took place at hotels and other locations in Connecticut, California, Florida, Massachusetts, Pennsylvania, Texas, Georgia, and Utah. The promoters also set up storefronts or ‘training centers’ to lure investors into attending Wings Network presentations. For example, one promoter used a storefront in downtown Philadelphia to make presentations to prospective investors, and another promoter rented office space in Pompano Beach, Fla., and spread the word in the local Latino community to attract prospective investors to come in and hear presentations.”
Read the SEC’s statement today.
Boston SEC obtains $26.9m judgment against “Wings Network” pyramid scheme targeting Latinos: https://t.co/NxeGzOzMWF
— SEC Boston (@Boston_SEC) November 13, 2015
Separately, BehindMLM.com reported today that two individuals who operated the eAdGear MLM fraud each were sentenced to 46 months in federal prison.
The SEC charged eAdGear civilly in September 2014, alleging it had gathered $129 million. Among the named defendants were Charles S. Wang of Warren, N.J., and Francis Y. Yuen of Dublin, Calif. In December 2014, news broke that Wang and Yuen had been indicted criminally.
They pleaded guilty earlier this year to conspiracy and structuring transactions to evade bank-reporting requirements.
NOTE: Thanks to the ASD Updates Blog.
