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  • Missouri Man Banned From Investment Trade After Secretary Of State’s Office Discovers He Sold Unregistered Securities Of ‘Time-Share’ Resort To Senior Citizens In Their Eighties

    Missouri Sectetary of State Robin Carnahan

    A Missouri man who worked for a legitimate investment business near St. Louis sold unregistered securities in a Wisconsin-based, time-share “resort” business to elderly clients, Missouri officials said.

    The securities came in the form of “unregistered real estate investments,” the officials said.

    James McClellan Jr., of Chesterfield, never told 18 Missouri investors — at least six of whom were in their eighties — that the time-share business was experiencing financial difficulties and that the investments were not offered through his employer.

    McClellan was a managing member of the out-of-state time-share business, the state charged. Officials identified the business as Meadow Ridge of Door County LLC, of Egg Harbor, Wisc.

    McClellan now has been banned from the securities business by the state and assessed a penalty of $120,000. His former employer, Huntleigh Securities Corp., also was assessed a penalty of $120,000 for failure to supervise McClellan, who conducted “off the books” securities transactions, the state said.

    “It is unacceptable for financial professionals to misuse their clients’ trust,” Missouri Secretary of State Robin Carnahan said. “My office made sure that this broker won’t be able to work in the industry in Missouri again and that his employer knows how to better supervise its employees.

    Carnahan’s office called McClellan’s deal a “shady real estate scheme” into which investors had plowed more than $4.4 million.

  • BULLETIN: National Institutes Of Health Says OWOW Multilevel-Marketing Firm Using Agency Press Release On Cancer Research Inappropriately; Separately, Piccolo Says ‘Magnetic’ Product Prevented Amputation — And Also Helps Tomatoes Grow

    Phil Piccolo, also known as "Mr. P.," strides the stage to hawk OWOW products. Piccolo claims the company's magnetic line assists in hair retention and even prevents the surgical amputation of limbs. The products also improve dairy production and help home gardeners grow tomatoes double the size of ordinary tomatoes, according to Piccolo.

    BULLETIN: The National Institutes of Health (NIH), a division of the U.S. Department of Health and Human Services, said this morning that the OWOW multilevel-marketing program was using agency materials on cancer research inappropriately.

    OWOW is associated with Internet Marketer Phil Piccolo. The company has positioned at least two products sold MLM-style as cancer cures or treatments, including a bottled water.

    On Dec. 26, the bottled-water product was touted on an OWOW affiliate’s website. The site included a link to a Dec. 21 news release by NIH about cancer research, specifically research pertaining to “a rare cancer of the digestive tract . . . linked to a shutdown in an enzyme that helps supply oxygen to cells.”

    The affiliate claimed that “OWOW Water Is THE ONLY WATER that brings Oxygen to the cell from within the cell.

    “Now check out this Article written almost on the day that OWOW received the exclusive marketing rights to our Oxyengenated Water,” the affiliate instructed, pointing prospects to the NIH website.

    “NIH does not endorse products and this promo is an inappropriate use of a press release that has a tenuous connection to this product at best,” NIH spokesman and senior science writer Michael J. Miller told the PP Blog this morning.

    How the agency would proceed was not immediately clear.

    See earlier story on bizarre events that ensued after OWOW made a cancer claim about a nonwater product.

    A “Non-Affiliated Support” link on the OWOW website includes no contact information for the company and no form through which prospects or members of the media can submit questions.

    OWOW appears to be the successor company to Data Network Affiliates (DNA), which purported to be in the business of creating a database to help the government and the AMBER Alert program rescue abducted children.

    No evidence has emerged that DNA had the capacity to help the government do anything.

    Separately — and on the same OWOW-connected website — a series of videos appears. Piccolo, also known as “Mr. P.,” is featured in a video that hawks purported magnetic products positioned as treatments for everything from bruising and hair retention to preventing the surgical amputation of limbs.

    Meanwhile, video viewers also are told that the magnetic products can be used to help tomatoes, vegetables and fruits grow “twice the size.”

    At the same time, the products also are positioned as helpful to dairy farmers.

    “Dairy farmers who feed their cows through this here unit right here produce more milk per cow,” Piccolo claims in the video.

    Family pets hearing a call from the grim reaper can extend their lives if their owners use the products, Piccolo instructs viewers.

    “Your pets? If you have a pet and your pet’s on its last leg[s], bring them a Magnetic Shower,” Piccolo coaches. “You won’t believe what it will do for your pet.”

    See Video

    “If it wasn’t for magnets, I really believe I’d be in a wheelchair right now,” Piccolo says in the video. Piccolo asserted he’d been bucked off a horse and suffered the worst bruise his doctors had ever seen — but used magnetic products to save the day quickly, heal bruising and maintain his ability to walk.

    One man who suffered a heart attack was able to avoid a leg amputation by using the magnetic shower head, according to the video.

    It perhaps was a good idea to purchase the product before “Monday,” because the price was going to increase, Piccolo tells the audience. The date upon which the OWOW video was recorded was not immediately clear.

  • BULLETIN: Salt Lake City Man Arraigned In Atlanta On Charges Of Running Ponzi And Fraud Scheme In Which Tens Of Millions Of Dollars Mysteriously Vanished Offshore; Canadian Also Charged In Alleged Caper

    BULLETIN: Two men — one from Salt Lake City, the other from Belleville, Ontario — have been charged by federal prosecutors in Atlanta with operating a Ponzi and fraud scheme in which tens of millions of dollars mysteriously disappeared overseas.

    Thomas Repke, 57, was arraigned today in Atlanta. Prosecutors said he worked with the Canadian man, James Jeffery, 58, to fleece more than $30 million from investors.

    “This indictment alleges a major international investment fraud scheme that defrauded over 100 victims around the country out of tens of millions of dollars, most of which has been transferred to overseas accounts,” said U.S. Attorney Sally Quillian Yates.

    The scheme began in 2006 and centered around a company known as Coadum Capital in which investors were told that they were purchasing shares in hedge funds and that their investment capital was kept in “escrow” accounts and thus not at risk. Participants expected to earn up to 5 percent a month.

    “[A]lthough investors were instructed to and did transmit much of their funds to one or more supposed ‘escrow’ accounts, including one in Atlanta, the money did not stay in any such account,” prosecutors said. “Rather, unbeknownst to investors, Repke and Jeffery transferred over $20 million overseas to accounts in Switzerland and the Mediterranean island of Malta.

    “This money was supposedly invested in a series of hedge funds or other investments operated by a supposed Malta-based trader,” prosecutors said.

    But the investments “produced no earnings at all,” prosecutors said. “[B]y the end of 2007 only a fraction of the transferred funds remained deposited in these European accounts.”

    Regardless, Repke and Jeffery “continued to send account statements every month to investors continuing to represent that their funds remained intact, preserved in escrow accounts, and that monthly earnings of 3-5% continued to accrue,” prosecutors said.

    Both Repke and Jeffery had “no control” over the overseas accounts — accounts “about which they received little or no information,” prosecutors said.

    Investigators obtained correspondence that showed Repke and Jeffery both “were frustrated in their repeated requests to obtain information about where the funds were being held, how they were being used by the trader, and whether and to what extent earnings were being generated,” prosecutors said.

    The SEC referred the case for criminal investigation after bringing an administrative action and lawsuit against Repke and Jeffery in 2008, according to records.

    “Those who prey on the investing public in this way will continue to find themselves facing federal felony charges,” Yates said.

    The investigation was coordinated by the Financial Fraud Enforcement Task Force. prosecutors said Jeffery had not yet made his initial court appearance in the case.

    Repke potentially faces decades in prison, if convicted. He was charged with multiple counts of mail fraud, wire fraud and conspiracy.

    (NOTE: The SEC complaint references a Malta company known as “Exodus Equities Inc,”  which apparently was tied to an entity known as “Exodus Platinum Genesis Fund Ltd.” Also of note for additional case information/filings is the website of Pat Huddleston, the court-appointed receiver in the SEC case.)

  • UPDATE: MPB Today Now Says Gary Calhoun Was Selected As 2003 ‘Businessman Of The Year’ By National Republican Congressional Committee

    Members of the purported MPB Today “grocery” program now are touting company President Gary Calhoun as 2003’s “Businessman of the Year” in promotional news releases and articles online.

    The company itself is doing the same thing on its website, explaining that Calhoun “was chosen as ‘Outstanding Young Men (sic) in America 1982’ . . . and in 2003 was selected as ‘Businessman of the Year’ by the National Republican Congressional Committee’s [NRCC] Business Advisory Council.”

    None of the promos explains how one obtains either award. Regardless, the promos plant the seed that the awards are important.

    Various references to the NRCC “Businessman of the Year” award appear online. The award is linked to Republican fund-raising, although it is unclear if all people who’ve claimed the award actually have contributed funds. It was not immediately clear if Calhoun donated money to NRCC in either his name or the name of a company to receive the award in 2003.

    AdSurfDaily President Andy Bowdoin, accused of operating a Ponzi scheme that gathered at least $110 million and making NRCC donations with Ponzi proceeds, claimed a similar award known as the “Medal of Distinction.” Like the “Businessman of the Year” award, the “Medal of Distinction” is doled out by NRCC.

    The award can be obtained for writing a check for what amounts to the purchase of banquet tickets.

    MPB Today claims that members who pay $200 to the MLM company one time can receive free groceries for life. Promoters have claimed that liars and thieves exist within MPB Today, but that prospects nevertheless should join the company.

    At least one bank whose name has appeared in MPB Today promotions is operating under an FDIC consent agreement, according to federal records. MPB Today purports to have tens of thousands of members while enjoying an “unprecedented expansion.” Other promos show that MPB Today also has a relationship with a second bank.

    Calhoun was the subject of a 2006 inquiry by the Food and Drug Administration, amid allegations he was selling a product that purported to treat multiple diseases, including “Alzheimer’s, Parkinson’s, amyotrophic lateral sclerosis, axonal and other neuropathies, Down’s and other syndromes.”

    The MPB Today program has been hawked on Internet boards associated with Ponzi schemes. The program has been targeted at senior citizens, foreclosure subjects, Food Stamp recipients, people of faith, college students and victims of the ASD Ponzi scheme.

    Promoters of MPB Today have been linked to bizarre sales presentations, including one in which President Obama, First Lady Michelle Obama and Secretary of State Hillary Clinton were depicted as Nazis. One script for an MPB Today promo suggested the Obamas aspired to eat dog food and table scraps left by the family pet and emerge from the ranks of welfare recipients.

    “Hmm, I should prolly call my Food Stamp worker now that I’ve joined MPB,” the script read in part, depicting the First Family as welfare recipients. It also used the words “monkeys” and “Brown-noser” in the context of the Obama presidency.

    Despite the claim that Calhoun was a top businessman, MPB Today has not issued a news release to distance itself from the bizarre promotion that pilloried the Obamas and Clinton, who was depicted as a drunken Nazi-In-Chief who received a left-handed salute from Obama and a greeting of “Heil Hitlary.”

    Michelle Obama was depicted in the ad as having been knocked out by Clinton a short time after the First Lady experienced an embarrassing gas attack in the Oval Office after sampling beans at a Sam’s Club store.

    MPB Today has not publicly disclaimed and disassociated itself from the ad, even though some members have insisted the firm is associated with Walmart and routinely have used Walmart’s intellectual property in sales promos. Hillary Clinton was the first woman to serve on Walmart’s board of directors.

    The company removed an image of a Walmart store from its website in September. It also removed images of business tycoons Donald Trump and Warren Buffet. Regardless, MPB today promoters continue to use the images in sales promotions, giving rise to questions about whether the company has come into possession of money tainted by serial deceptions.

    Agencies such as the Federal Trade Commission say it is not uncommon for fraudsters to use the names of famous people and entities when promoting scams. In September, the U.S. Department of Agriculture said it was investigating certain claims about the MPB Today program.

    MPB Today now appears to refer to Walmart as a “national grocery retailer.”

    Other promos from MPB Today have asked members to lay down their “pipe bombs” when contemplating doing business with Walmart. Still other promos have insisted that MPB Today is associated with the federal Food Stamp program.

    MPB Today now references the Food Stamp program on its website — in the context of Calhoun emerging from the ranks of Food Stamp recipients after lean times passed.

    “Gary has experienced his share of failures as well,” the site notes. “There’s a 2-picture frame on the wall in his office. In one of the picture openings, it states, ‘Remember Where God Brought You From” and in the other opening . . . his old Food Stamp card.

    “And as many successful business people have stated, it was adversity and failure that caused them to rise,” the site notes. “Gary firmly believes this. ‘Losing it all then getting up and going again brings a resolve like nothing else.

    “I really believe the success we are experiencing today is a direct result of the adversity I’ve been through[,]” Gary says.

    The NRCC “Businessman of the Year” award and the “Medal of Distinction” have been linked to scandals and bids to create legitimacy by establishing purported ties to prominent politicians.

    ASD members, for example, claimed that Bowdoin had received an important award for business achievement from the President of the United States. Meanwhile, Abdul Tawala Ibn Ali Alishtari, convicted of financing terror and fleecing participants in an investment scheme, also appears to have claimed to be a person whose counsel the Republican party valued.

    Earlier this month, the CFTC charged Ryan A. Nassbridges with operating a precious-metals scheme. A website registered in the name of Nassbridge’s wife purports that he was the recipient of both the “Medal of Distinction” and the “Businessman of the Year” award.

  • A ‘MONEY MAGNET’ AT WORK: Andy Bowdoin Wows Crowd With Photo Of Building Later Seized; Indicted Autosurf Operator Gives Gordon Gekko-Like Speech In Which Greed Is Recast As A ‘Positive’

    ASD President Andy Bowdoin wowed a "rally" crowd by showing a photo of this building in Quincy, Fla. The U.S. Secret Service later seized the building, saying it was purchased from the proceeds of a massive Ponzi scheme. Federal prosecutors said the scheme traded on religion and that Bowdoin emerged with "followers."

    EDITOR’S NOTE: Two videos of sales pitches by AdSurfDaily President Andy Bowdoin are linked below. Both are available at publicly accessible websites.

    The first video shows Bowdoin, in the summer of 2008, wowing a crowd by showing ASD rally attendees a photo of ASD’s new headquarters building in Quincy, Fla. The building later was seized by the U.S. Secret Service as the proceeds of a criminal enterprise. Also of note in the video is a claim by Bowdoin that George Harris is the head of ASD’s purported real-estate division. The video also references Judy Harris.

    George Harris is the son of Andy Bowdoin’s wife, Edna Faye Bowdoin. The Harris home in Tallahassee was seized in December 2008. Federal prosecutors said the mortgage on the home was retired with Ponzi proceeds. Neither George nor Judy Harris ever filed a claim to the home.

    The AdViewGlobal (AVG) autosurf, which launched after the seizure of Bowdoin’s assets, the Harris home and the filing of a racketeering lawsuit against Bowdoin, later identified George and Judy Harris as its operators. AVG purported to be a “private association” headquartered in Uruguay. The surf made the claim it was a private association in February 2009. The claim coincided with a decision by Bowdoin to reenter the ASD forfeiture case as a pro-se litigant.

    Weeks earlier, in January 2009, Bowdoin had submitted to the forfeiture of tens of millions of dollars seized from his bank accounts. Despite the fact that Bowdoin had advised a federal judge that he was withdrawing his claims to the seized money “with prejudice” — meaning he intended never again to reinstitute his claims — he nevertheless sought to reenter the case, acting as his own attorney.

    By April 2009, federal prosecutors said that, not only had Bowdoin submitted to the forfeiture and formally advised a federal judge of his decision to do so, but that Bowdoin also had signed a proffer letter and acknowledged the government’s material allegations in the case were all true.

    Bowdoin met with federal prosecutors in Florida in late 2008 and early 2009 for a period of at least four days, according to court filings.

    Of particular note in the second video is the timing: It was shot (presumably by a rally attendee) in Las Vegas on May 31, 2008. Bowdoin is shown in the video defining himself as a “money magnet” and encouraging ASD members to become the same. The federal grand jury that indicted Bowdoin began to meet in May 2009. Its indictment of Bowdoin was unsealed earlier this month and makes repeated references to the “money-magnet” line.

    The video shows Bowdoin making references to God in his Las Vegas sales pitch. It begins with a Gordon Gekko-like suggestion by Bowdoin that greed is a net positive. Gekko, of course, is the fictional character played by Michael Douglas in the 1987 movie “Wall Street.” Douglas won an Oscar for the role.

    “The point is, ladies and gentleman, that greed, for lack of a better word, is good,” the Gekko character memorably advised the movie audience. “Greed is right, greed works.”

    Here is what Bowdoin said from the stage 21 years later in Las Vegas:

    “Just like, you know, [the belief that] rich people are greedy. Turn that into a positive: Rich people are generous. All right. And you turn it into a positive like that, you repeat that — at least seven times, every time you think about it: Rich people are generous. Because you’ve got to reprogram that subconscious mind.”

    Bowdoin went on to inform Las Vegas rally attendees that he had a plan to create 100,000 millionaires in three years and that it was important for ASD members “to have an attitude of gratitude with God.”

    “And I always say, ‘Thank you, God, for developing me into a money magnet.’ And I see myself as a money magnet in attracting money and, I say, attracting large sums of money,” Bowdoin said.

    He exhorted ASD members to internalize his message and imagine riches “flowing” in from ASD, the PP Blog reported on May 7, 2009.

    About three weeks after the Las Vegas rally — a rally at which Bowdoin encouraged attendees to spend unlimited sums on ASD “ad packs” because a $50,000 ceiling on purchases would be enforced two days later — the $157,000 mortgage was retired on the Harris home.

    ASD’s spending binge actually began about 11 days after Bowdoin exited the Las Vegas stage and ultimately consumed more than $1 million, federal prosecutors said. Other post-rally purchases included jet skis, marine equipment, a Cabana boat, haul trailers, real estate and at least three automobiles, including a Lincoln. One of the automobiles was purchased for George and Judy Harris, according to prosecutors.

    The retired Harris mortgage and the car — a Honda — cost ASD members nearly $186,000, prosecutors said.

    Video One

    Video Two

  • UPDATE: E-Bullion, Firm Alleged To Have Provided Payment Services To ASD, Linked To Alleged Legisi Ponzi Scheme; Like ASD, FEDI Fraud Scheme Called Payments ‘Rebates’

    Andy Bowdoin

    UPDATED 2:25 P.M. ET (U.S.A.) Still pushing autosurf and HYIP frauds?

    Last week, the PP Blog reported that the U.S. Secret Service and federal prosecutors had established a link between California-based E-Bullion and Florida-based AdSurfDaily. E-Bullion is a shuttered payment processor whose owner, James Fayed, is awaiting trial on charges of murdering his wife, Pamela Fayed, whom prosecutors said wished to cooperate in the E-Bullion probe.

    It was the first public assertion by the government that ASD had a tie to E-Bullion.

    The Blog further reported that E-Bullion had been linked to at least three alleged Ponzi or fraud schemes: ASD, Gold Quest International (GQI) and Flat Electronic Data Interchange (FEDI), whose convicted operator, Abdul Tawala Ibn Ali Alishtari, was associated with convicted Ponzi schemer Brian David Anderson.

    Alishtari, also known as Michael Mixon, was convicted in 2009 of financing terrorism. Anderson, a FEDI pitchman, was sentenced to federal prison for his role in yet-another Ponzi scheme known as Frontier Assets. He also has been linked to a mysterious scheme known as the “Alpha Project.”

    Like ASD’s Andy Bowdoin, Alishtari donated money to the National Republican Congressional Committee, according to the Federal Election Commission database. Documents reviewed by the PP Blog show that payments from the FEDI scheme were referred to as “rebates.” ASD also called its payments to participants “rebates.”

    Today the PP Blog is reporting that federal investigators also have established a link between E-Bullion and Legisi, a company whose operator, Gregory N. McKnight, was accused by the SEC in May 2008 of operating a massive Ponzi and fraud scheme based in Michigan. During the same month, the SEC also accused GQI of operating a massive Ponzi and fraud scheme from Las Vegas. Investigators likewise established a GQI link to E-Bullion.

    Documents reviewed by the PP Blog show that records maintained by E-Bullion were the subject of a subpoena issued on Aug. 6, 2008 — five days after tens of millions of dollars were seized by the U.S. Secret Service from bank accounts controlled by ASD’s  Bowdoin. The subpoena was issued in the Legisi case.

    As the PP Blog previously reported, the Secret Service, which used undercover operatives in the ASD case, also used an undercover operative in the Legisi case. In fact, the Blog reported, the Secret Service undercover operative and an undercover operative from the state of Michigan, had a face-to-face meeting with Legisi’s McKnight in his office.

    Legisi later began to act in a fashion that only can be described as bizarre, allegedly morphing into a sort of super-secret enterprise that was exhibiting clear signs of paranoia. Investors, for example, were asked to submit to a loyalty oath and pledge that they weren’t government investigators or informants.

    The AdViewGlobal autosurf, which has close ties to ASD, later began to operate in a similar fashion, morphing into a so-called “private association,” scolding members for asking questions in public and exhibiting paranoia.

    “This Association of members hereby declares that our main objective is to protect our rights to freedom of choice regarding our advertising and marketing information and conduct, through maintaining our Constitutional rights,” AVG announced on its website in February 2009.

    Court records show that the Secret Service also employed undercover operatives in the investigation of the INetGlobal autosurf. An affidavit in the case notes that at least two operatives were present at an INetGlobal function in New York earlier this year and that one undercover agent had been introduced to INetGlobal by an ASD member.

    ASD President Andy Bowdoin was indicted earlier this month on federal charges of wire fraud, securities fraud and selling unregistered securities. Prosecutors alleged he was operating a Ponzi scheme that had gathered at least $110 million. The indictment accused Bowdoin of making campaign donations to the National Republican Congressional Committee with proceeds from the ASD Ponzi scheme.

    Six days ago, prosecutors alleged in a forfeiture complaint that ASD member Erma Seabaugh used E-Bullion in November 2007 to transfer $10,510 to ASD. The alleged transfer occurred about six months before E-Bullion’s name surfaced in the GQI and Legisi cases brought by the SEC.

    When investigators later searched the home of James Fayed in the murder investigation, they found “approximately $60,000 in cash wrapped in plastic material; approximately $3,000,000 in gold; and approximately 31 firearms, including one with a long-range night vision scope, along with thousands of rounds of matching ammunition,” prosecutors alleged.

    Pamela Fayed was stabbed to death in a California parking garage on July 28, 2008. The Secret Service, which had begun its investigation of Bowdoin less than a month earlier, seized his assets three days later, on Aug. 1, 2008.

    The agents said Bowdoin was moving large sums of money outside the United States and had talked about buying a home in another country. In September 2008, the month after ASD’s assets were seized, an indictment was unsealed in Connecticut that accused Robert Hodgins of Virtual Money Inc. of helping a Colombia narcotics operation launder money at ATMs in Medellin.

    Virtual Money Inc. once provided debit cards to ASD, according to an ASD downline group.

    CLOSING NOTE: Read this chilling document from the case against Fayed in California.  Also see this 2007 report from CBS News. CBS reported FEDI operator Alishtari claimed to be “[National Republican Congressional Committee] New York State Businessman of the Year. ASD members later would make similar claims about Bowdoin.)

  • BULLETIN: Now, An Investment-Fraud Scheme Targeted At Indian-Americans And Members Of The Hindu Faith; SEC Says Amit V. Patel Of Minnesota Poses ‘Danger To The Investing Public’

    BULLETIN: The SEC has obtained an asset freeze against a Minnesota man in an alleged investment- and affinity-fraud scheme targeted at Indian-Americans and followers of the Hindu faith.

    Amit V. Patel of Shoreview raised “at least $2.5 million from at least five individuals that he met in the Indian-American community and Hindu temples in Minnesota,” the SEC charged.

    He also “received millions of dollars more from dozens of other individuals.,” the SEC said, alleging that “Patel took advantage of his cultural affinity and shared religious heritage with his victims, and exploited their trust in his standing in the community.”

    Patel was deemed “a danger to the investing public” by the SEC.

    U.S. District Judge Joan N. Ericksen of the District of Minnesota has issued a temporary restraining order against Patel and an order freezing all assets under his control.

    Patel, whom the SEC described as an unemployed engineer, employed a strategy known as Iron Condor that led to a loss of almost all of investors’ money.

    Shoreview is in Ramsey County, in the Minneapolis/St. Paul region.

    Read the SEC complaint.

  • SARASOTA HERALD-TRIBUNE: Convicted Ponzi Swindler Beau Diamond Sentenced To More Than 15 Years In Federal Prison

    The Sarasota Herald-Tribune is reporting that Ponzi swinder Beau Diamond has been sentenced to 186 months in federal prison.

    Sentencing court was conducted this morning.

    The Diamond case is among a number of complex Ponzi or fraud-scheme investigations undertaken by federal prosecutors and investigators in the Middle District of Florida.

    Others include  Traders International Returns Network (TIRN), Evolution Marketing Group/FinanzasForex, the Alpha Trade Group case and the David A. Smith/OLINT case. Prosecutors and investigators in the region also have had a role in the AdSurfDaily case.

  • New Jersey AG Says Firm Was Running $40 Million Ponzi Scheme; Carr Miller Capital LLC’s Advisory Registration Revoked; Investigators Charge That Firm Used Millions To Buy Cars And Luxury ‘Sky Box’ For Hockey Games

    KABOOM! Carr Miller Capital LLC, its associated advisory busineses and its principals have been stripped of their advisory registrations and charged in New Jersey with operating a Ponzi scheme that sold unregistered securities and gathered at least $40 million, state prosecutors said.

    At least $36 million of the $40 million came from individuals or IRAs of the investors, meaning their individual retirement savings were directed into a rathole, investigators said. Investors’ futures were compromised when their money was used to purchase what was described in court filings as “decorative concrete flooring” and “satellite television equipment.”

    Other dream-killing “indulgences” were even more dramatic, prosecutors said.

    Included in the indulgences, new Jersey Attorney General Paula Dow said, was $13.5 million for a New Jersey Devils sky box at the Prudential Center in Newark, personal automobile purchases, travel and luxury vacations, retail purchases and meals.

    “Instead of investing funds to produce high rates of return as promised, we allege that the defendants spent investors’ hard-earned money on personal luxuries and indulgences,” Dow said.

    It was a “classic” Ponzi scheme, according to a state official.

    “These defendants operated a classic Ponzi scheme, using funds from new investors to pay money to earlier investors, all in an attempt to perpetuate the deception,” said Thomas R. Calcagni, acting director of the Division of Consumer Affairs.

    “The promised rates of return sounded too good to be true and, sadly, that turned out to be the case,” Calcagni said.

    Investors in the unregistered offering were told they were purchasing nine-month notes that would yield an annual return of between 10 percent and 15 percent, investigators said.

    Dow sued the company and principals — Everett Charles Ford Miller, 41, Ryan Jude Carr, 34, and Brian Patrick Carr, 39 — in a nine-count complaint.

    Although $16 million was put into various hedge funds, real estate, film-production companies and an oil-and-gas venture, the expenses were not authorized by or disclosed to investors, Dow said.

    About $8 million was doled out to investors in the form of Ponzi scheme payments, investigators said.

    The securities “were not registered for sale in New Jersey and Ryan Miller was not registered to act as an agent,” authorities said.

    “Unregistered investments and unregistered individuals should be an immediate red flag to potential investors,” said Marc B. Minor, chief of the N.J. Bureau of Securities. “The Bureau is a resource that investors can use to perform due diligence as they decide how and with whom to invest.”

  • ‘In God We Trust’ Scammer Who Fleeced Investors Sentenced To 15 Years In Prison; Byron Keith Brown Traded On God’s Name And U.S. Motto To Steal Millions From Clients Of Unlicensed Investment Business

    An affinity fraudster and financial scammer has received a 15-year prison sentence in the “In God We Trust” caper, an online Ponzi scheme that traded on religion and patriotic sentiments while gathering more than $17 million.

    Byron Keith Brown, 34, of Vienna, Va., also was ordered by U.S. District Judge William M. Nickerson of the District of Maryland to make restitution of more than $9.8 million to investors.

    Prosecutors said Brown bought at least 16 high-end cars with investors’ money. Nameplates included Bentley, Rolls-Royce and Lamborghini, among others. Brown was not licensed as a broker, dealer or investment adviser in Maryland, Virginia or the District of Columbia, the areas in which his scheme was concentrated.

    “Byron Brown used the internet to make it appear as if he were running an investment management business for wealthy investors, when in fact he was stealing millions of dollars from investors and using it to buy a fleet of luxury cars,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland.

    The IRS brought the case.

    Brown, prosecutors said, filed bankruptcy in 1999 — but soon emerged with a tale of fabulous success that painted him as the head of an international firm that specialized in catering to wealthy investors from offices in Washington, D.C., Wilmington, Del., New York, and London, England.

    It was all an illusion, prosecutors said.

    The words “IN GOD WE TRUST” became the official U.S. motto by an Act of Congress in 1956, when Dwight Eisenhower was President. The words officially were added to U.S. paper currency, beginning in 1957.

    Brown operated at least three companies that used the “In God We Trust” theme, prosecutors said. Experts say scammers frequently use appeals to faith and patriotism to steal from investors or line them up to be fleeced in fraud schemes.

    See earlier story.

  • Is An AdViewGlobal Member Unhappy With AdSurfDaily Members Who Choose To File Remission Forms? Rant Accuses Filers Of Selling Their Souls And Destroying Lives

    EDITOR’S NOTE: Content from an email referenced in the story below has not been edited by the PP Blog for spelling, punctuation, grammar or clarity.

    Some AdSurfDaily members have received a disturbing email that accuses them of selling their souls and destroying lives by participating in the government-approved remissions program designed to mitigate their losses, the PP Blog has learned.

    The author of the email is unclear.

    It is possible, however, that the email rant originated with a member of the AdViewGlobal (AVG) autosurf, which had members and promoters in common with ASD and crashed and burned in June 2009. An email address under which the rant against ASD members appeared included the apparent abbreviations “fms” and “avg” as part of the address in this format: fms.avg@

    Even so, it was unclear if the person who used the address was the author of the rant, which was unsigned and appears to have been forwarded to multiple ASD members. The rant makes the claim that ASD never sold an “investment” product and that the company was an “online advertising system.”

    ASD President Andy Bowdoin was indicted earlier this month. Federal prosecutors described ASD as a wink-nod investment business through which Bowdoin sold unregistered securities as investment contracts by calling member payouts “rebates” to avoid regulatory scrutiny.

    AVG, which launched in the aftermath of the seizure of tens of millions of dollars from Bowdoin in 2008, advertised 200 percent “bonuses” for months. The surf announced it was suspending payouts in June 2009. Just days later, AVG’s name was cited in a racketeering lawsuit filed against Bowdoin by ASD members.

    The rant surfaced yesterday, in advance of a purported phone conference to be held by Sheldon Drobny of AnShell Financial Services at 9 p.m. (ET) today. Drobny, whose company is not the official ASD claims administrator, says he can assist in helping ASD members file claims forms with Rust Consulting Inc., the official administrator, and help them recover money.

    Apparently unhappy that ASD members even would think about filing claims, the author of the email rant wrote that participants who filed a claim would be signing their “morals and soul away” and supporting “innocent peoples lives being destroyed.”

    The email claimed that a “back lash” would occur against any ASD member who participated in the claims program. The author did not say who would carry out the purported backlash and what it would entail.

    “Again, if you continue to pass on and support meaningless calls like this and help people build their belief the actions done to ASD were right and the claim form is asking you the appropriate questions and truly believe it was an invstment you made and your friends and family referred you to a securities investment then by all means fill out the scandalist claim form,” the author wrote. “Just be prepared for the back lash and consequences to come.”

    Persons who agreed with the government’s contention that ASD scammed investors “should hide under a rock and stay their,” according to the rant.

    Some ASD victims are believed to have lost tens of thousands of dollars in the alleged, $110 million Ponzi scheme. Regardless, the rant implied that there are no victims and that ASD members who filed claims did so at the cost of the “sacrafice of other decent human beings such as your family and friends.”