PatrickPretty.com

Author: PatrickPretty.com

  • RECOMMENDED READING: Anti-Defamation League Outlines Activities Of ‘Sovereign Citizen Groups’; Report Notes Instances Of ‘Bogus Liens’ Filed Against Public Officials, Including Former President Bill Clinton

    EDITOR’S NOTE: If you’ve been following the odd developments and conspiracy theories associated with the AdSurfDaily and Gold Quest International cases, we recommend you read this August 2010 report (see link below) by the Anti-Defamation League. The report notes various threats made against law enforcement, along with frauds and scams linked to the so called “Sovereign Citizen Movement.”

    Both ASD and GQI are known to have so-called “sovereigns” among their membership ranks. Bizarre court pleadings have surfaced in both cases.

    The ADL report specifically references Michael Howard Reed, shown in records to have been a harassing presence in the GQI Ponzi case brought by the SEC in May 2008. On Friday, federal prosecutors filed a forfeiture complaint that alleged ASD had a tie to E-Bullion, a shuttered digital-currency business. Other records show E-Bullion also had a tie to GQI.

    Friday’s filing marked the first time that E-Bullion’s name had surfaced in the ASD case. The reference is important because E-Bullion now has been linked to multiple alleged fraud schemes. E-Bullion founder James Fayed was charged in California in 2008 with operating an unlicensed money-transmitting business. He also was charged with murdering his estranged wife, who sought to cooperate with prosecutors in the E-Bullion investigation.

    Among the calling cards of the sovereign movement are bizarre court pleadings and vexatious litigation described as “paper terrorism.” The so-called sovereigns have sought to derail investigations and hamstring investigators and public officials by making them parties to lawsuits or subjecting them to threats of litigation or the filing of bogus liens against personal property, ADL reports.

    Bogus liens filed against public servants in the performance of their duties is a “major problem,” ADL says.

    One such lien even was filed against former President Bill Clinton, ADL reports.

    “Many sovereign citizens have engaged in a variety of scams and frauds, some of them raking in millions of dollars, while countless more sovereign citizens have engaged in acts of harassment, retaliation, and intimidation against public officials, law enforcement officers, and private citizens,” ADL says.

    “As it evolved, the sovereign citizen movement developed an ideology centered on a massive conspiracy theory,” ADL says. “Though different sovereign theorists all have their own varying versions of this conspiracy, including exactly when it started and how it manifested itself, the theories all share the belief that many years ago an insidious conspiracy infiltrated the U.S. government and subverted it, slowly replacing parts of the original, legitimate government (often referred to by sovereigns as the ‘de jure’ government) with an illegitimate, tyrannical government (the ‘de facto’ government).

    “As a result, sovereign citizens believe that today there are really two governments: the ‘illegitimate’ government that everyone else thinks is genuine and the original government that existed before the conspiracy allegedly infiltrated it.”

    Read the ADL report.

  • PROSECUTION: ASD Member Funded Account With Transfer From E-Bullion And Used Ad Rotator To Pitch ‘StreamlineGold,’ Apparent Pyramid Scheme; Records Show E-Bullion Founder Charged In Wife’s Murder In California

    An AdSurfDaily promoter whose cash was seized in February 2009 and now has been targeted for forfeiture funded one of her three ASD accounts in part with a transfer from E-Bullion, a shuttered payment processor whose founder was charged in 2008 with operating an unlicensed money-transmitting business and hiring a hit man to kill his estranged wife, according to records.

    The E-Bullion allegation raises troubling new questions about the sinister worlds of autosurfs and HYIPs, how ASD and its members were exchanging money and whether ASD and top promoters were employing secret conduits. In 2008, prosecutors asserted ASD had a relationship with E-Gold, a payment processor accused in 2007 of money-laundering. Yesterday’s assertion that ASD also had a relationship with E-Bullion marked the first time that prosecutors have raised E-Bullion’s name in the ASD case.

    Erma Seabaugh, known among ASD members as the “Web Room Lady,” used E-Bullion in November 2007 to transfer $10,510 to ASD, according to a forfeiture complaint filed yesterday.

    SCREEN SHOT: Federal prosecutors asserted yesterday that ASD member Erma Seabaugh funded one of her ASD accounts by transferring $10,510 from E-Bullion.

    E-Bullion founder James Fayed was jailed in California in August 2008, the same month as the seizure of tens of millions of dollars from ASD and nine months after the firm was used to transfer money to ASD, according to records. He initially was charged in an indictment unsealed in August 2008 by federal prosecutors with operating an unlicensed money-transmitting business that had processed more than $20 million in Ponzi scheme payments. The scope of E-Bullion’s alleged Ponzi business is unclear, but the company now has been linked to at least three alleged Ponzi schemes.

    In September 2008, Fayed was charged by the Los Angeles District Attorney’s office with the July 2008 murder of his wife, Pamela Fayed.

    In June 2008, a month before she was killed in a California parking garage by a man who allegedly had accepted $25,000 from James Fayed to carry out the plot, Pamela Fayed had informed federal prosecutors in California that she wished to cooperate in the investigation of E-Bullion, according to records. E-Bullion is referenced in court files as a payment processor used by Gold Quest International (GQI), an alleged Ponzi scheme operating in Las Vegas that was charged by the SEC in May 2008 and also was charged by Canadian regulators.

    A total of four people, including James Fayed, now have been charged in the murder plot. As with many things in the miserable worlds of HYIPs and autosurfs, the prosecution of GQI by the SEC turned into Theatre of the Absurd.

    GQI, accused in May 2008 by the SEC in a $29 million Ponzi case, sought to derail the case by filing a lawsuit for $1.7 trillion against the agency. Company officials absurdly asserted that GQI was immune to U.S. law because its Las Vegas operations enjoyed purported sovereignty that was portable from an “Indian” tribe in North Dakota and that GQI also was off-limits to prosecution in the United States because it was registered in Panama.

    Chillingly, E-Bullion also is referenced in documents filed by the Ontario Securities Commission in a case against Ponzi swindler Brian David Anderson, a former Christian clergyman from Vancouver, British Columbia. Anderson was sentenced to prison in the United States earlier this year for his role in a Ponzi scheme known as Frontier Assets.

    Anderson also was linked to a mysterious scheme known as the “Alpha Project.” U.S. and Canadian investigators also identified Anderson as a pitchman for an international HYIP known as Flat Electronic Data Interchange (FEDI). FEDI’s operator, Abdul Tawala Ibn Ali Alishtari, also known as Michael Mixon, was convicted in September 2009 of financing terror and fleecing investors in the FEDI scheme.

    In addition to the ASD account funded by the E-Bullion transfer, Seabaugh had at least two other ASD accounts, prosecutors charged in the forfeiture complaint. She used one of her accounts to advertise a mysterious business known as StreamlineGold, which was described by investigators as a probable “pyramid scheme dealing with the sale of memberships that are sold to customers.”

    The account through which Seabaugh promoted StreamlineGold was funded by a transfer from La Fuente Dinero, yet-another Ponzi scheme associated with ASD, prosecutors said.

    StreamlineGold’s website now throws an error message, but web records show it was promoted on the MoneyMakerGroup and TalkGold forums, two websites that are associated with Ponzi schemes and referenced in federal court records as a place from which the alleged Pathway To Prosperity Ponzi scheme was promoted.

    “StreamLine Gold is literally what it says,” a poster crowed on the MoneyMakerGroup Ponzi site in November 2007, the same month Seabaugh allegedly was promoting the same scheme through ASD. “[I]t can provide you with an unlimited income through the combination of Precious Metals and Cash with a business model whose time has come PLUS the most advanced and lucrative pay plan ever devised.”

    Records suggest StreamlineGold had failed in an earlier iteration — and then failed again after rebirthing itself.

  • URGENT >> BULLETIN >> MOVING: Secret Service Has Seized More ASD Cash; Forfeiture Complaint Filed Today Against Bank Accounts Controlled By Erma ‘Web Room Lady’ Seabaugh And Robyn Lynn Stevenson

    Andy Bowdoin

    BULLETIN: UPDATED 6:27 A.M. ET (U.S.A., DEC. 18) The U.S. Secret Service and federal prosecutors have seized nearly $250,000  from two alleged ASD promoters and filed a new forfeiture complaint dated today.

    More than $153,000 has been seized from a bank account controlled by ASD promoter Erma Seabaugh, known as the “Web Room Lady.” Seabaugh was a purported ASD “trainer,” prosecutors said.

    She was accused in the complaint of accepting checks made out to ASD, depositing them into her bank account and transferring “ad packs” to her downline by using ASD’s internal system.

    Meanwhile, more than $96,000 has been seized from bank accounts controlled by ASD member Robyn Lynn Stevenson, who operated a company known as Robyn Lynn LLC and worked briefly for ASD itself, prosecutors said.

    At the same time, investigators seized nearly $500,000 from a bank account once controlled by ASD President Andy Bowdoin and nearly $50,000 from an account controlled by Golden Panda Ad Builder President Clarence Busby.

    Busby, prosecutors said, already has ceded the money to the government. The money was ceded in September 2008, about two months after an undercover agent had been invited by an ASD member to listen to Busby talk in July 2008, as Golden Panda was ramping up for its formal launch.

    The additional sum of nearly $500,000 ($496,505) seized from Bowdoin was a balance left in an account that once contained more than $31.6 million, prosecutors said. The lion’s share of the money in the account already has been declared forfeited, but agents worked out an agreement with Bank of America to permit about $500,000 to remain in the account on the date of the Aug. 1, 2008, seizure of Bowdoin’s assets.

    The buffer was necessary to permit checks already drawn on the account prior to the effective date of the seizure warrant to clear, prosecutors said.

    All in all, the forfeiture complaint filed today targeted $794,718 in illegal ASD proceeds, prosecutors said.

    The seizure of cash tied to Seabaugh and Stevenson traced its roots to the opening days of 2009, months after the seizure of the lion’s share of money from Bowdoin’s bank accounts, according to the complaint.

    On Feb. 26, 2009, U.S. District Judge Rosemary Collyer authorized the seizure of “up to” $213,693 in the name of “Carpe Diem or Erma Seabaugh,” prosecutors said. The seizure occurred one day after Bowdoin had signed a document in which he sought to reverse an earlier decision he made to submit to the forfeiture of tens of millions of dollars in his bank accounts, records show.

    When the Secret Service executed the warrant to seize the money from Seabaugh, only $153,097 was found in the account, according to the complaint.

    Between July 15 and July 30, 2008 — effectively the two week period leading up to the ASD seizure — Seabaugh received nine ASD checks totaling $203,993, prosecutors said.

    On July 25, 2008, just days before the seizure of Bowdoin’s bank accounts, Seabaugh deposited into her bank account seven checks made out to ASD totaling $9,700 prosecutors said.

    The checks came from “third parties,” and Seabaugh transferred a corresponding number of “ad packs” to the buyers by using ASD’s internal system, prosecutors said.

    “Based on these facts, it appears Ms. Seabaugh was selling her own investment ‘ad packs’ to clients and representing herself as ASD,” prosecutors said.

    Seabaugh had at least three ASD accounts and appeared to be using ASD’s “advertising” rotator  to sell other pyramid schemes, prosecutors said. All three of the accounts used a form of the “Carpe Diem” name, according to the complaint.

    One of Seabaugh’s ASD accounts was opened with a transfer of “ad packs” from La Fuente Dinero, yet-another autosurf scheme tied to ASD, prosecutors said.

    Noting that Seabaugh deposited no “new money” into the account, prosecutors said she withdrew $83,994 from the account via checks from ASD.

    Seabaugh recruited 48 ASD members, according to the complaint. She withdrew an additional $107,997 from another ASD account.

    Stevenson, meanwhile, made only one deposit with ASD — for $500 — and yet received $96,525, prosecutors said. The withdrawals came in the form of 17 checks issued by ASD between July 10 and July 25, 2008, just days before the seizure of ASD’s assets, according to records.

    The checks were deposited into two bank accounts that Stevenson opened July 31, 2008, one day before the seizure of Bowdoin’s bank accounts, according to records.

    Separately, Bowdoin pleaded not guilty today to criminal charges filed against him in U.S. District Court for the District of Columbia. Prosecutors said he was at the helm of a massive Ponzi scheme that gathered at least $110 million.

  • BULLETIN: Another ‘False Liens’ Case; Andrew Isaac Chance Charged With Filing $1.3 Billion Bogus Claim Against Federal Prosecutor In Maryland

    BULLETIN: A Maryland man has been indicted and arrested on charges of filing a false lien for more than $1.3 billion against a federal prosecutor who had successfully prosecuted him for filing a bogus income-tax return in 2007.

    Andrew Isaac Chance also has been charged with filing false tax returns for an entity known as “Andrew I. Chance Trust” in 2007, 2008 and 2009. He faces up to 25 years in prison and a fine of up to $1 million if convicted on the new charges.

    In 2007, Chance was sentenced to 27 months in federal prison for filing a false tax claim for an entity known as “ANDREW CHANCE TRUST.” Chance sought a refund of $306,753 in that case, and refunds of $300,000 for each of the three years cited in the new case, prosecutors said.

    He is currently on federal probation — and now faces the new charges.

    Prosecutors said he placed a false lien of “$1.313 billion against the property” of the federal prosecutor in the earlier case. The prosecutor was an assistant U.S. Attorney, according to the U.S. Department of Justice and the IRS.

    A federal grand jury in Greenbelt, Md., returned the new indictments, the Justice Department and the IRS said.

    Bizarre paperwork attacks against prosecutors and other federal employees have occurred elsewhere in the United States. In July, a California man was indicted in Nevada on charges of filing 22 false liens ranging from $25 million to $300 million against the officials, prosecutors said.

    Thanh Viet Jeremy Cao also sought $20 billion in fraudulent tax refunds, prosecutors charged.

    In June, Ronald James Davenport of Deer Park, Wash., was charged with filing false liens against federal officials in Washington state.

    Davenport, who described himself as a “sovereign” being, sought the spectacular sum of nearly $5.2 billion from each of the officials, including U.S. Attorney James McDevitt of the Eastern District of Washington, an assistant U.S. attorney, a court clerk and an IRS agent, according to court records.

    Prosecutors in the Chance case in Maryland described him as a “tax defier.”

    Members of the AdSurfDaily autosurf — an alleged Ponzi scheme — have been associated with schemes to file liens or threats to file liens against judges, prosecutors and members of law enforcement.

    Some ASD members have described themselves as “sovereign” beings. Elsewhere, the three principal figures in the “3 Hebrew Boys” Ponzi case in South Carolina also described themselves as sovereign.

    The sentences handed out to the “3 Hebrew Boys” defendants were the longest in any federal Ponzi scheme case in South Carolina history, prosecutors said earlier this week. The sentences totaled 84 years — 27 years each for two defendants, and 30 years for a third.

  • BULLETIN: 7 Michigan Women Charged With Felonies In Cash-Gifting Scheme; State Police Issue Alert On Pyramid Schemes Targeting Women; Ask Public To Report Gifting Offers

    So, you want to involve your family, friends and business associates in a cash-gifting scheme and tell them it it perfectly legal?

    Seven women have been charged with felonies in Michigan and the Michigan State Police (MSP) are warning that schemes targeting women are sweeping across the state.

    MSP is asking members of the public to contact the department if they receive an offer for a gifting pyramid scheme. The schemes spread by plucking heartstrings and making people believe they are becoming a part of a legal enterprise.

    One of the schemes is known as “Women Integrity Group.” It suggests a $5,000 gift can lead to a return of $40,000.

    The office of Michigan Attorney General Mike Cox has been warning about gifting scams for years.

    “No matter how these schemes are presented, the bottom line is the same for all — cash gifting schemes are illegal in Michigan,” prosecutors warned in October 2008.

    “Cash gifting schemes are the quintessential example of a pyramid scheme,” prosecutors warned. “Instead of selling products, cash gifting schemes forgo the sale of products and just give people cash, but the premise is the same — like other pyramids, cash gifting schemes are based on the amount of people recruited.”

    The Muskegon Chronicle reported that seven women from Newaygo County had been charged in the alleged scheme.

    Local TV stations also have devoted coverage to the gifting scheme.

    Here, according to prosecutors, is the Michigan law that applies:

    Section 28 of the Michigan Franchise Investment Law (MCL 445.1501 et seq.) makes pyramids illegal in Michigan.  The statute reads in part:

    [a] person may not offer or sell any form of participation in a pyramid or chain promotion.  A pyramid or chain promotion is any plan or scheme or device by which (a) a participant gives a valuable consideration for the opportunity to receive compensation or things of value in return for inducing other persons to become participants in the program or (b) a participant is to receive compensation when a person introduced by the participant introduces one or more additional persons into participation in the plan, each of whom receives the same or similar right, privilege, license, chance, or opportunity.

    Essentially, a pyramid is a scheme in which participants receive compensation for recruiting other participants.

    Violations of Section 28 of the Michigan Franchise Investment Law are a felony, punishable by a fine of up to $10,000 or seven years in prison.

  • CAPTURED: FBI Nabs Perry And Rachelle Griggs In Arizona; Fugitive Ponzi Couple Will Be Transported To Hawaii To Face Charges They Bilked Investors While Perry Griggs Was In Prison

    CAPTURED: Perry and Rachelle Griggs

    The FBI has captured Perry and Rachelle Griggs, the fugitive Ponzi couple accused of running a scam while Perry Griggs was a federal prisoner in Nevada. The arrest was made in Kingman, Ariz., yesterday.

    Perry and Rachelle Griggs were indicted in October for wire fraud and mail fraud. They had been missing since January 2010. Perry Griggs had been released from prison in 2008. An investigation later revealed that the scam had begun while he was in custody and was directed largely at Hawaii residents.

    They operated a company known as Aloha Trading.  The couple also has been charged by the CFTC. Rachelle Griggs was accused of soliciting money from families of her husband’s fellow prisoners.

    The FBI said the manhunt for the fugitive couple was “intense,” and used websites, national news coverage and “electronic highway billboards” to dial up the heat on the alleged Ponzi schemers.

  • Now, Highly Confusing, Competing Claims About The AdSurfDaily Remissions Program Appear On RipoffReport.com; Post Fractures Facts; DON’T BE CONFUSED

    Andy Bowdoin

    First, don’t be confused. Rust Consulting Inc. is the official claims administrator under contract with the U.S. government to handle claims from victims of the alleged AdSurfDaily Ponzi scheme. ASD also is known as ASD Cash Generator.

    See this document at Justia.com. It is signed by Ronald C. Machen Jr., the U.S. Attorney for the District of Columbia, and appears on the court docket of U.S. District Judge Rosemary Collyer. The document lists the URL for the official claims site: http://www.adsurfdailyremission.com

    Today a highly confusing report appeared on RipoffReport.com suggesting that, not only was ASD a ripoff,  but so is the claims program. The PP Blog became aware of the report after receiving a message from Google Alerts, which the Blog uses to track mentions of ASD Cash Generator across the web.

    The PP Blog sought to contact Rust about the Ripoff Report, but it was past business hours. The Blog left a detailed message for the firm.

    Here is the headline of the Ripoff Report: “Asd cash generator ad Surf daily remission administrator Beware…scam, Internet . . .”

    Meanwhile, the report says this, “do not reply to remission forms that says from secret services asking for your bank account and social security number informations. secret services do not send out such forms asking specific account numbers. and secret services do not use post office box numbers address.”

    At the same time, the report urges readers to “report your forms to your better business bureau.”

    Other mistakes dot the Ripoff Report — for example, the Minnesota address of the claims administrator is listed as the address for ASD and the URL for the official claims site is incorrect.

    The U.S. Secret Service conducted the ASD investigation. Rust, the government-approved claims administrator, is using a Post Office Box to receive completed claims forms. The company specifically informs ASD members on the remissions site that it is asking victims to provide bank-account information so they can receive restitution by electronic deposit.

    “Payment will be disbursed by electronic funds transfer after all Remission Forms are decided,” the company notes on the website. “Therefore it is necessary to ensure that the section requiring your banking information is completed in full on the Remission Form in order to receive a remission payment.”

    The official remissions form also asks for a Social Security number or Employer Identification Number (EIN).

    Why a poster on RipoffReport.com appeared to imply that the “secret services” did not authorize the information to be gathered was unclear. The U.S. Secret Service has the duty of assisting the U.S. Department of Justice in reviewing the claims.

    The ASD case has been marked by one bizarre event after another. In recent weeks, some ASD members have tried to confuse others about the remissions process.

    ASD President Andy Bowdoin, who was indicted on felony charges earlier this month, is scheduled to make his first court appearance in the District of Columbia tomorrow.

  • BULLETIN: Attorney Jonathan Star Bristol Now Under Arrest In New York; Lawyer Sued By SEC Earlier Today For Helping Kenneth Ira Starr Steal From Celebrity Clients

    BULLETIN: Attorney Jonathan Star Bristol has been arrested by federal agents and is scheduled to make an appearance in Manhattan federal court this afternoon to face criminal charges of money-laundering amid allegations he helped convicted fraudster Kenneth Ira Starr siphon money from clients though an escrow fund.

    “Today’s indictment should serve as a reminder to attorneys and others that you should always know the source, nature, and ownership of funds transferred through our financial systems,” said Charles R. Pine, IRS special agent in charge. “IRS Criminal Investigation is at the forefront of this type of investigation and will continue to hold professionals accountable in any field where they are entrusted with other people’s money and engage in money laundering transactions.”

    Bristol was sued only hours ago by the SEC. Now comes word that there also was a sealed criminal indictment in the case.

    “Jonathan Bristol, a lawyer and an officer of the court, allegedly helped his client Kenneth Starr hide the proceeds of his massive Ponzi scheme,” said U.S. Attorney Preet Bharara. “Along with our law enforcement partners, we will continue to pursue corrupt professionals in both the public and private sectors who betray their duties of trust.”

    Pine said attorneys who turn a blind eye to sources of funds risk prosecution.

    “A professional, such as an attorney, cannot knowingly use an escrow account funded with illegally obtained monies, or look the other way without questioning where the monies came from,” Pine said.

    Among the specific criminal allegations against Bristol was that his former law firm was concerned that Starr had not paid $750,000 in legal fees he had racked up.

    “In March 2010, Bristol reported to senior management that STARR would be paying $100,000 of the at least$750,000 that Starr owed,” prosecutors said. “Bristol’s law firm did receive a $100,000 payment that month, but it did not come from Starr — it came from Starr’s clients, laundered by Bristol through Bristol’s escrow accounts.”

    Bristol also was accused of using the escrow accounts to help Starr steal $7 million to acquire a luxury New York condo with five bedrooms and 6.5 bathrooms, prosecutors said.

    He also was accused of hoodwinking Starrs’ clients about how their money was being used.

    “In 2009 and 2010, Bristol  regularly used his escrow accounts to receive funds belonging to Starr clients and then transferred the monies directly to Starr & Co. to pay the company’s operating expenses,” prosecutors charged.

  • INCREDIBLE: Now, A ‘Nuclear Power’ Fraud Scheme; SEC Suspends Trading Of Alternate Energy Holdings Inc. (AEHI) Stock And Seeks Emergency Asset Freeze

    The SEC has suspended trading of Alternate Energy Holdings Inc. (AEHI) stock and gone to federal court in Idaho to seek an emergency asset freeze, the agency said.

    AEHI was manipulating its stock price with a blitz of press releases while CEO Donald L. Gillispie and Senior Vice President Jennifer Ransom were reaping secret profits, the SEC charged.

    The agency said the firm was a “self-described Idaho nuclear power company” that “has essentially no revenue and minimal operations.”

    Despite this, the agency said, Gillispie, 67, channeled money from secret stock sales to fund “lavish personal expenses such as his Maserati sports car.”

    Among the bogus claims to suck in millions of dollars from investors in the United States and Asia was a claim that no company officer had sold any stock.

    In reality, the SEC charged, Ransom, 36, had “sold at least one million shares. She hid her stock sales from AEHI investors and the public, failing to file forms notifying the Commission of her sales. In addition, Gillispie himself directed sales of more than one million shares of AEHI stock through nominees, thereby hiding from the public his conduct.”

    Some of the money funded the Maserati purchase, the SEC charged.

    “In light of AEHI’s ongoing efforts to raise funding while promoting itself through a daily deluge of press releases, we needed to take immediate action to get to the bottom of the company’s misleading statements,” said Marc Fagel, director of the SEC’s San Francisco Regional Office. “Documents we have obtained to date indicate a scheme to personally enrich the CEO at the expense of investors.”

    Court documents allege that AEHI positioned itself as an upstart in 2006 that sought to raise $10 billion for the construction of a nuclear-power plant in Payette County, Idaho.  The company also pitched ventures that included the purported harvesting of lightning from thunder storms, the development of fuel additives and the use of “nuclear-powered desalination reactors to provide the third world with clean water,” the SEC charged.

    Efforts to pump the stock began four years ago, but the firm “has no realistic possibility of building a multi-billion dollar nuclear reactor,” the SEC charged. “AEHI has never had any revenue or product.”

    Read the SEC complaint.

  • BULLETIN: SEC Says Attorney Jonathan Star Bristol Helped Convicted Ponzi Swindler Kenneth Ira Starr Steal Millions Of Dollars From Celebrity Clients

    BULLETIN: The SEC has charged attorney Jonathan Star Bristol with aiding and abetting the Ponzi and fraud scheme of convicted swindler Kenneth Ira Starr, the so-called “financial adviser to the stars.”

    Starr pleaded guilty to securities fraud, wire fraud and money-laundering in September. Among his former clients were former U.S. Secretary of State Henry Kissinger, actress Uma Thurman, actor/producer Ron Howard, singer/songwriter Carly Simon and celebrity outfitter Jacob Arabo, known as “Jacob The Jewler.”

    Bristol, according to the SEC, permitted Starr to use “attorney trust accounts” hidden from the management of a law firm for which Bristol worked “as conduits when Starr stole money from advisory clients.”

    “Bristol had a legal and professional responsibility not to assist Ken Starr in conduct that he knew was unlawful,” said George S. Canellos, director of the SEC’s New York Regional Office. “Bristol crossed the line from lawyer to conspirator when he failed to safeguard funds entrusted to him, helped Starr steal client money, and lied to the victims to perpetuate the scheme.”

    When one of Starr’s victims “confronted” Bristol about an unauthorized transfer of $1 million,  “Bristol lied to the victim that the funds were being bundled with other clients’ funds for an investment with UBS Financial Services,” the SEC said. “In fact, Bristol had already used the misappropriated funds to pay a multi-million dollar legal settlement with one of Starr’s former clients.”

    Taking the deception one step farther, the SEC said, “Bristol subsequently sought to represent that same victim after the victim was contacted by SEC staff in its investigation. In addition to the fact that such representations violated the ethical obligations of lawyers, Bristol’s clear intent was to obstruct and undermine the SEC’s investigation in order to conceal the wrongdoing.”

    Read the SEC complaint.

    Kenneth Ira Starr also is known as Kenneth Starr, but he is not the same Kenneth Starr whose famous “Starr Report” led to impeachment proceedings against President Bill Clinton in 1998 and 1989 in the aftermath of the Monica Lewinsky scandal.

    That Kenneth Starr was Kenneth Winston Starr.

  • BIZARRE: California Man Charged In Precious Metals And Commodities Swindle Claimed Same Award As Andy Bowdoin; Ryan A. Nassbridges Charged By CFTC In $5.5 Million, Ponzi-Like Scheme In California

    The Commodity Futures Trading Commission has gone to federal court in California to halt a precious-metals and options scheme operated by a man who claimed to have the same award for business achievement as AdSurfDaily President Andy Bowdoin, according to web listings.

    Like Bowdoin, the head of Florida-based AdSurfDaily, Ryan A. Nassbridges of Laguna Niguel, Calif., claimed to possess an important award known as the Congressional Medal of Distinction, according to a website that bears his name and is registered in his wife’s name.

    Also like Bowdoin, Nassbridges now has been charged in a massive fraud scheme. The CFTC said today that Nassbridges, who once was known as Ryan Nasserabadi, was operating a “precious metals futures and options fraud” that gathered $5.5 million from at least 80 customers.

    He also was accused of lying to investigators about the scheme.

    Also charged were Nassbridges-affiliated companies known as American Bullion Exchange (ABEX Corp.) and American Bullion Exchange LLC (ABEX LLC).

    Other web listings suggest Nassbridges was referred to by multiple names online. While one site refers to him as Ryan A. Nassbridges, another refers to him as both Ryan A. Bridges and Ryan N. Bridges. The site that uses the  Ryan A. Bridges and Ryan N. Bridges names is registered behind a proxy, meaning the owner of the domain is unclear. Curiously, documents on the domain list the name of Ryan A. Nassbridges.

    Equally curiously, the entire left sidebar of both websites stream images of the awards purportedly received by Ryan A. Nassbridges.

    It was not immediately clear if Nassbridges operates the sites and why the sites used different names.

    Both sites tout the Congressional Medal of Distinction and include photographs of Nassbridges posing with prominent Republican politicians, including former President George W. Bush. Whether the photos were authentic was not immediately clear.

    One thing that is clear is that the medal now has been linked to at least two alleged Ponzi schemes and that both alleged schemes have traded on the name of the President of the United States.

    In the ASD case, the medal was described as a marketing memento for making campaign contributions to the National Republican Congressional Committee. Bowdoin was accused earlier this month of using Ponzi proceeds to make the donations and not correcting the record when affiliates told prospects he had received an important award from the President of the United States.

    The websites that use the one or more forms of the Nassbridges’ name claim that he received the medal for his “contribution toward the passage of the tax cut.”

    CFTC did not reference the medal in its allegations against Nassbridges, saying only that he used participants’ funds to make “political contributions” of an unspecified amount.

    He also used about $586,100 to make mortgage payments, $305,000 to make credit-card payments, $90,100 to make car payments and $157,700 for cash withdrawals, CFTC charged.

    Some investors received Ponzi-like payments, CFTC charged. It added that investors did not know that Nassbridges and the companies were trading commodity futures and options while “sustaining significant trading losses.”

    Investors believed they were trading in precious metals, including gold, palladium, platinum, silver bullion and gold and silver coins, CFTC said, noting that the alleged scheme was advertised on Fox, MSNBC and Home and Garden Television.

    The complaint described an operation by which “account representatives” were required to make a minimum of 350 “prospecting calls” per day.

    The websites tout Nassbridges as the “2005 Businessman of Year” and the recipient of the “Presidential Certificate of Merit Signed by the President of United States of America.”

    “[H]e is among those few who are Awarded with the ‘Eisenhower Commission’ Signed and presented by 3 former President’s (sic) of United States of America for helping the USA Small Business Organization and talented entrepreneurs create jobs for the American working class,” according to the websites.

    His wife, Bita Nassbridges, who was named a relief defendant by CFTC for allegedly receiving ill-gotten gains from the scheme, is referred to as “Mrs. Bridges” on one of the sites and “Mrs. Nassbridges” on the other. The couple is pictured in poses with Republicans Bush, former New York Mayor Rudy Guiliani and Sen. John Thune.