PatrickPretty.com

Author: PatrickPretty.com

  • BULLETIN: Ponzi Suspect Kills Self, New York Newspaper Reports; Ashvin Zaveri Was Implicated In $35 Million Swindle

    A New York man implicated by the FBI and the IRS in a Ponzi scheme has killed himself, the Democrat and Chronicle of Rochester is reporting.

    It is at least the second Ponzi-related suicide in the United States in recent weeks. Florida Ponzi suspect Wayne McLeod, suspected of bilking federal employees, killed himself in Florida in June.

    In the New York case, Ashvin Zaveri, 71, of Honeoye Falls, N.Y., was indicted in December 2009 for mail fraud, wire fraud and money-laundering.

    Prosecutors said Zaveri defrauded investors in an oil-and-gas scam that gathered $35 million.

    Read the story in the Democrat and Chronicle.

  • Dennis Bolze, Tennessee Ponzi Schemer Who Fled After Fraud Was Exposed, Sentenced To 27 Years In Federal Prison

    Dennis Bolze, a fraudster who silently bolted from Tennessee during the same month Bernard Madoff provided a glimpse of how a shocked nation would come to view Ponzi schemers, has been sentenced to 327 months in federal prison.

    Bolze, 61, was arrested in Pennsylvania on March 12, 2009, about three months after news of Madoff’s Ponzi scheme broke and Bolze’s own scheme collapsed. Even as Bolze was fleeing his Ponzi after it was exposed in a bankruptcy proceeding, Florida Ponzi schemer Arthur Nadel also went missing. For days, America’s attention was riveted on the sudden reality of massive Ponzi schemes — and much of the world wondered how many other shoes would drop as crimes that had been hidden for years or even decades were exposed.

    Nadel and Bolze were among the earliest of the so-called “mini-Madoffs,” Ponzi schemers who orchestrated spectacular frauds that would dominate headlines for weeks were in not for the staggering size of Madoff’s $65 billion fraud. Nadel went missing from Sarasota Jan. 14, 2009, a little more than a month after Madoff’s scheme was exposed. He surrendered to the FBI in Tampa on Jan. 27, 2009.

    After his arrest in Pennsylvania, Bolze — once the toast of Gatlinburg, Tenn. — became reviled. His 16,000-sq.-ft.  mansion in the mountains and three-story tall Christmas tree became the symbols of wretched excess.

    Bolze positioned himself as a successful day trader, but he was really just a scam artist who took $21.5 million from clients and paid back $9.6 million in bogus “returns” to keep the scheme operating, prosecutors said.

    In reality, Bolze invested only $1.6 million and operated the scheme between April 2002 and December 2008. His dash from Tennessee coincided with the Madoff headlines.

    While jailed,  Bolze asked for an opportunity to recoup the money he had fleeced from victims. All he needed, he argued, was the Internet, a computerized program — and a little time.

    Senior citizens and people of faith were among Bolze’s victims, prosecutors said.

  • WRETCHED, TAWDRY AND CHEAP: AdSurfDaily Members Now Targeted In Pitches For An MLM 2X2 Cycler — One That Trades On Walmart’s Name While Affiliate Offers ‘Blessings’

    UPDATED 7:11 P.M. EDT (U.S.A.) When U.S. District Judge James Rosenbaum sentenced Ponzi schemer Trevor Cook to a quarter of a century in federal prison earlier this week, the judge used some powerful words to describe Cook’s colossal fraud.

    Rosenbaum described the scheme that bilked investors out of at least $158 million as “wretched, tawdry and cheap.” Some of the victims were rendered destitute.

    It’s easy to see why a federal judge would use such words. Not only did Cook steal by the tens of millions of dollars, he stole even after the SEC and the CFTC went to court last November to bring the scheme to a halt. Cook spent money that had been frozen by court order, thus thumbing his nose at both victims and the judicial system. He later failed to disclose the whereabouts of assets — this until he failed a lie-detector test.

    All of those acts — and the $190 million scheme itself — easily qualify as “wretched, tawdry and cheap.” One could argue rationally that even stronger adjectives could be applied to Cook’s behavior and still fall within the bounds of decorum.

    And this brings us to the subject of AdSurfDaily — specifically, what at least one member appears to be doing to recruit former ASD members and people interested in ASD into yet-another scheme.

    That’s been done before, of course. AdViewGlobal, itself a scheme that could be described fairly as “wretched, tawdry and cheap,” rose from ASD’s ashes to bilk anew.

    Along those lines, who could forget MegaLido? It was yet another autosurf that became popular in the aftermath of the domestic seizure of tens of millions of dollars in the ASD Ponzi case. One former ASD member described MegaLido as “fool proof.”

    It’s “OFFSHORE!!!” he exclaimed.

    Some ASD members also saddled up and starting promoting the Noobing autosurf, which targeted people with hearing impairments. There were plenty of HYIPs, too. These included Genius Funds, believed to have gathered up more than $400 million; Gold Nugget Invest, which promoted itself as a betting arbitrage and later implied in was in Forex; and CashTanker, which used an image of Jesus in its sales pitch.

    Look here to see a list of some of the “programs” promoted by ASD members. (Most of the programs, by the way, were promoted after the ASD seizure.)

    How To Irritate A Sleeping Dog

    At 9:05 p.m. yesterday, Maddy the Wonder Puppy — always and forever a wonder puppy in my mind, even though she’s two now — was going through her endearing presleep maneuvers under my desk. This is one of those things that make me feel good about the world.

    As Maddy was going through her positioning dance and stretching and yawning routine, an email popped into my box. It proved to be one of those things that make me feel bad about the world.

    “input on opportunity” — all lowercase — was the subject line of the email. So, I knew right away that I was about to get a sales pitch — and I suspected before opening it that was going to a disingenuous pitch at that.

    “I used to belong to ASD,” the email began. “Need your input on UniqueBuyingClub.”

    OK. Here’s what’s important so far: The pitch was completely unsolicited and came through the Blog’s support address; it used ASD’s name (sixth word) to catch my attention; the subject line suggested I was being asked for “input,” as though the sender saw something fishy on the Internet and wanted to get my take on it; and the pitch proved to be for MPB Today, not an entity called “UniqueBuyingClub.”

    Let’s proceed. It gets worse.

    The first affiliate link appeared 12 words into the pitch, meaning I wasn’t really being solicited for input — unless it was input after the fact — because the sender already had registered for MPB Today. (Note: I checked the email address of the sender against the affiliate email addresses on the MPBToday page. They matched, meaning it is highly likely that the sender was an affiliate who was spamming me.)

    There was no way to unsubscribe from the “list” I now found myself on. (BTW, I’m wondering if the sender knows if Warren Buffet and Donald Trump really have endorsed MPB Today, a business that bizarrely mixes the home delivery of groceries with a 2×2 cycler.  Their pictures are right at the top of the sales page, which implies an endorsement. Perhaps MPB Today missed the news about the FTC action last week in a case that alleges an Internet Marketing company that hawks Acai berry products tried to make people believe Oprah and Rachel Ray were on board.)

    But it got worse from there. Not only was the “UniqueBuyingClub” angle confusing, the link asked me to visit a site called WeCreateRiches. Then, a second link asked me to visit the MPB Today site. We are only 14 words into the pitch at this point.

    Let’s take another brief pause. The import of what’s happening here is that a former ASD member who perhaps got bilked in a $100 million MLM and securities scheme that promised riches now is urging me to visit a website called WeCreateRiches to sign up for a company that uses a home-delivered groceries business to promote an MLM scheme that uses a 2×2 matrix cycler. The U.S. Secret Service, which is investigating ASD, also has experience investigating cyclers.

    Prior to receiving the email, I knew about MPB Today, which Rod Cook had written about. I just haven’t gotten around to writing about it yet, mostly because there is only so much time in the day. In some ways, I almost hate to write about it because writing about it potentially means that the MLM Stepfords will come of the woodwork to “defend” the company. It also potentially means the Blog will start getting spam from people angry that I dared mention the MPB Today name on a blog about scams. (Spam, in this context, means people who “defend” the company not by leaving a comment that actually defends the company, but by submitting their affiliate link on the theory that they might be able to cherry-pick a new downline member from the Blog’s readership ranks.)

    In any event, the email went on to inform me that “Walmart is loving the results!!” generated by MPB Today.

    Oh, really? I do hope the sender leaves a comment in this thread to substantiate the Walmart claim. It will spare me some work.

    The email also wished me “Blessings and hope through your connections,” while urging me to “Please get back to me and let us help many ASD members who lost money and hope.”

    Well, email sender, consider this post “getting back” to you.

    It is my view that your email — and I haven’t gotten into the most revolting part yet — is “wretched, tawdry and cheap.” Like Judge Rosenbaum, I feel that way about Trevor Cook’s actions — as I do the actions of ASD’s Andy Bowdoin, who also traded on religion.

    Take your “blessings” and “hope” elsewhere. I think the idea of using religion and identifying yourself as an ASD member to pitch other ASD members on MPB Today is “wretched, tawdry and cheap.”

    Meanwhile, I think that sending a reporter who covers fraud schemes an email titled “input on opportunity” also is “wretched, tawdry and cheap.”

    It makes me believe you’d sell anything for a commission and say anything to gain a commission. My thoughts on this subject were further reinforced this morning when I learned you sent a largely identical email to another forum.

    “Blessings,” the email to the other forum concluded.

    It made me want to retch. Is this what you believe Internet Marketing to be?

    OK. Here’s the part of the pitch that irked me most (emphasis added):

    “Just go online and order. BUT if you introduce club to just TWO and help those two introduce to two that completes ONE cycle for you. YOU – plus those six, Only qualification to be part of this is to introduce to TWO , but you may choose to get crazy and promote to many to inc. cycling. When you finish cycle one – go to backoffice and order grocery.goods BUT now company pays all shipping OR replace that voucher for a $200 WalmartGiftCard to go into the store and PLUS company sends you a $300 check to spend whereever. You NEVER add another dime. You may cycle as often as you please. People here in Orlando are cycling two to seven times in a week. There is so much excitment because people are hurting and now they can go get FREE groceries/goods and FREE gas at SamClub.”

    Yep. Florida. Again.

    Florida was ASD’s home. Florida means retirees — and ASD members again are being targeted in pitches to send money to MPB Today, whose headquarters also happens to be in Florida.

    Here is who runs MPB Today.

    And here’s hoping that no ASD member will submit to the email pitch of the affiliate who contacted the PP Blog and another forum that covers ASD-related issues.

    “Blessings,” the emailer wrote — in pitches to both places — while also claiming her “girlfriend did [a] background check” and that “all is good” in the land of 2×2 cyclers targeted at victims of previous fraud schemes and prospects from a state favored by retirees who saved to get there.

    Florida has one of the highest foreclosure rates in the United States. Just three seconds — three seconds — into the video pitch for MPB Today, the word “Foreclosure” appears on the screen. It appears again at the 11-second mark.

    In MPB Today’s world, the apparent remedy for the foreclosure problem is to get Florida seniors and other struggling residents to join a 2×2 cycler.

    “Wretched, tawdry and cheap” — for sure.

  • Now, A ‘B-Movie’ Ponzi Scheme: Producer Mahmoud Karkehabadi Charged With 89 Felonies, Faces $11 Million Bail, California AG Says

    EDITOR’S NOTE: If you’re keeping a Bubba Blue notebook on how to have a Ponzi scheme — as opposed to shrimp — here’s one for your list.

    UPDATED AT 12:33 P.M. June 6, 2013. See Comments thread below. Mahmoud Karkehabadi has been sentenced to 27 years in state prison . . .

    A producer of “B-movies” such as “Confessions of a Pit Fighter” scammed investors in a $9 million Ponzi scheme by accepting “movie production loans” and promising returns of up to 35 percent no matter how the films performed, California Attorney General Jerry Brown said.

    Mahmoud Karkehabadi, also known as Mike Karkeh, was charged with 89 felonies, including grand theft and securities fraud. Two alleged accomplices who helped bring money to Karkehabadi’s film company by selling unregistered securities also were charged.

    Karkehabadi, 53, listed an address in the Orange County, Calif., community of Laguna Niguel.

    Before producing a series of four movie flops, Karkehabadi was charged with ripping off customers in a credit-card venture known as First National Credit, according to records. In the 2001 credit-card scheme, customers were told they’d receive a “gold card” with a $15,000 limit and encouraged to pay up to $43 for “rush processing and delivery.”

    The card proved to be a card that could be used only with a “catalog” business. Authorities secured a $5 million judgment in the case, and Karkehabadi declared bankruptcy, according to records.

    By 2005, he was making B-movies, and never told investors about the huge judgment from the credit-card case or the bankruptcy, Brown’s office said.

    “This con artist sold securities under the guise of a loan to fool investors and try to avoid following the rules,” Brown said. “He ran a cold and calculated scam, making promises he never intended to keep and using the funds of new victims to pay off the earlier ones.”

    Karkehabadi’s bail was set at $11 million.

    His alleged accomplices in the movie scheme were identified as Timothy Cho, also known as Hin-Kong Cho, 54, of Newport Beach, Calif., and Deanna Salazar, 53, of Yucca Valley, Calif. Salazar has agreed to surrender, but Cho “remains at large,” Brown’s office said.

    At least 150 investors were affected by the scheme. Records show that Karkehabadi’s movie company — Alliance Group Entertainment — gathered more than $11 million. The movies generated only $535,000 in revenue, Brown’s office said.

    “Karkehabadi and his agents told investors they would get their money back within a year, regardless of a project’s success, with returns of 18 to 35 percent ,” Brown’s office said. “When the year was up, Karkehabadi convinced investors to roll their ‘loans’ over into the latest movie project or agree to extensions on the date for repayment.”

    Among the movie flops was a film titled “Hotel California,” Brown’s office said.

  • BULLETIN: Trevor Cook Sentenced To 25 Years In Federal Prison; Victims Lost At Least $158 Million In International Forex Ponzi Scheme That Traded On Religion

    Trevor Cook

    BULLETIN: Ponzi schemer Trevor Cook has been sentenced to 25 years in federal prison for his role in an international Forex Ponzi scheme that gathered more than $190 million and fleeced victims out of more than $158 million.

    In ordering the prison term, U.S. District Judge James Rosenbaum sided with the prosecution’s recommendation of a quarter of a century. It is believed to be the longest prison term ever imposed in a Minnesota financial-fraud case in which the defendant pleaded guilty.

    “Such a sentence fairly, adequately, and justly punishes the defendant for his offense, reflecting the seriousness of the offense, his willingness to plead guilty and provide information to law enforcement, and the need to protect the public,” prosecutors said last week in a sentencing recommendation to Rosenbaum.

    “Over the course of a few years, the defendant executed an investment fraud, victimizing approximately 923 victims and defrauding them of over $158 million,” prosecutors said. “As is all too common, the defendant often used victims’ religious beliefs as a means of enticing them to give him their money.”

    Cook, 38, is not out of legal harm’s way — even with the sentence of 25 years. Prosecutors disclosed last week that he has signed a waiver that would subject him to further punishment if the ongoing investigation shows he has “somehow secreted undisclosed assets.”

    Victims have expressed concerns that Cook could have stashed money from the scheme anywhere on earth. Cook failed a lie-detector last month about the whereabouts of assets.

    FBI and IRS agents later found more than $400,000 in undisclosed assets under the control of Graham Cook, Trevor Cook’s brother.

    Despite Cook’s lack of disclosure, prosecutors contended that it made no sense to delay Cook’s sentencing any longer as the asset search by the government and R.J. Zayed, the court-appointed receiver in a civil case filed against Cook and former Christian radio host Pat Kiley last year by the SEC and the CFTC, continued.

    Cook had been scheduled to be sentenced last month. Kiley, who called his radio listeners “truth seekers,” has not been charged criminally in the case.

    “The government has worked closely with the court-appointed receiver to assist its efforts in finding and identifying assets,” prosecutors said of Cook. “The government and the receiver now agree that any additional time prior to sentencing will not result in any additional information or assistance to the receiver’s efforts.”

    It is possible that Cook could prove to be a valuable source of information for the government — in the same sense that disbarred attorney, convicted racketeer and Ponzi schemer Scott Rothstein has become an information source.

    Rothstein, who presided over a $1.2 billion Ponzi scheme in Florida, was sentenced to 50 years in federal prison earlier this year. It is known that Rothstein has provided information helpful to the government.

    Cook “has been repeatedly debriefed by law enforcement in an effort to identify assets and to provide information regarding other individuals,” prosecutors said. “He has done so. The information has been of assistance to law enforcement in its ongoing investigation.”

    Ponzi schemes are toxic — and frequently are incredibly elaborate. Court documents in case after case show that the schemes frequently feature schemes within schemes and elaborate money-laundering networks. Criminals often go to fantastic lengths to disguise the conduits of the schemes, using shell companies and multiple bank accounts to funnel money and make the schemes difficult to reverse-engineer.

    FBI Director Robert Mueller has warned Congress at least twice this year about a “shadow” banking system criminals employ and an increasing reliance on “shell corporations” to commit crimes and hide from investigators.

    Cook’s scheme featured companies with confusingly similar names.

    Records show that Cook had a tie to a company the AdViewGlobal (AVG) autosurf claimed to be its facilitator of offshore wires.

    KINGZ Capital Management, AVG’s purported facilitator, denied any affiliation with AVG, which has close ties to the AdSurfDaily autosurf. ASD is implicated in a Ponzi scheme alleged to involve tens of millions of dollars.

    AVG collapsed in June 2009, after running a virtually nonstop promotion that advertised matching bonuses of 200 percent for both recruits and their sponsors.

    The National Futures Association said last year that Cook was managing money for KINGZ. AVG made the claim KINGZ was its wire facilitator on May 4, 2008 — the same day the Obama administration announced a crackdown on offshore fraud.

  • UNACCEPTABLE: ‘Hopefully One Day He Will Pick The Wrong Target And . . . Someone Will Take A Shotgun To Him,’ Internet Marketer Says About ‘Salty Droid’ Author

    DISCLOSURE: I was a volunteer Moderator at the Warrior Forum (WF) between December 2007 and July 2008. I learned what is best — and worst — about Internet Marketing at the WF. Just as my Mod days were coming to an end, the AdSurfDaily Ponzi scheme case was coming to the fore — and Internet Marketers raced to the forum to “defend” the business.

    UPDATED 11:13 P.M. EDT (U.S.A.) The author of The Salty Droid, a Blog that unapologetically skewers highly questionable Internet Marketing practices and some of the trade’s most visible figures, was made the subject of a death wish Aug. 17 by a poster at the Warrior Forum (WF).

    “Hopefully one day he will pick the wrong target and that someone will take a shotgun to him,” wrote Robert Puddy, a well-known marketer. The post was in response to a poster who apparently committed the high crime of making a favorable comment about The Salty Droid.

    The PP Blog, which itself has been the subject of threats by Internet Marketers, strongly condemns the event at the WF, the actions of Puddy and attempts to chill by force of threat reporters and Bloggers who write about IM-related issues.

    Suggesting a human being should be executed by shotgun for his critical point of view about Internet Marketing is thuggery. That Puddy, who provides Internet Marketing training and is regarded an expert, even could suggest that death was an appropriate penalty for a Blogger who opines that some Internet Marketers engage in anticompetitive and racketeering-like marketing practices is a matter for great introspection.

    So much for having a sense of the moment — or any PR savvy at all.

    A number of Internet Marketers have been implicated in racketeering schemes or found themselves squaring off against racketeering indictments or lawsuits in recent months. Andy Bowdoin of Florida-based AdSurfDaily, for instance, was sued by his own customers for racketeering. One of Bowdoin’s attorneys also was sued for racketeering in the same case, which was placed on hold until the federal Ponzi case against ASD plays out. At least one ASD member was successfully sued for racketeering in Utah for participating in a scheme to place bogus judgments for astronomical amounts against  public officials.

    The ASD member — Curtis Richmond — sat as an “arbitrator” on a bogus panel set up by a bogus “Indian” tribe and signed a bogus “award” for more than $300,000 against a Family Services worker. Not to be outdone, Richmond claimed the federal judge hearing the Utah case owed him $30 million.

    Richmond later claimed the federal judge overseeing the ASD case was guilty of “TREASON.” Dozens of Internet Marketers attempted to intervene in the case, filing pleadings from a kit. The pleadings, including one that claimed the government was guilty of interference with commerce for seizing the proceeds of an alleged crime, were downright bizarre.

    Now, Puddy, an Internet Marketer, opines that death is the answer for what he apparently believes should be the entire industry’s problem with The Salty Droid — as though monolithic thinking is the only option and that any person who believed the author could be right about anything should be shouted down and ridiculed.

    Adopting an ad hominem approach, Puddy, the marketing trainer and expert, called The Salty Droid fan an “idiot” — apparently for suggesting the author even could frame a point worth pondering over.  He then called the Salty Droid author a “disgusting little worm,” opining that the author uses “innuendo and false info to slag off other people.” He did not provide any example or any support material to back up his claim The Salty Droid dispensed innuendo and false info. Puddy concluded his comment with the shotgun remark, later denying he was angry when posting it.

    In a later comment, Puddy claimed he knew of two “people who [received] physical threats of violence [because] of the lies on that blog.

    “In one case,” Puddy claimed, “the [person’s] family was also included in the threat.”

    The Salty Droid (SD) author, who was made aware of Puddy’s remarks when contacted by the PP Blog for comment, said he was not surprised that violence had become part of the discussion.

    “I don’t doubt that the scammers also receive threats from the same type of persons that are threatening me,” SD said. “People can react in scary ways when they find out they’ve been the victim of the long con.”

    Puddy’s incendiary comment was posted Aug. 17 and escaped deletion on the WF for days. The comment finally disappeared either late Saturday or early Sunday. How and why it disappeared were not explained. Comments left by the PP Blog and other posters who challenged Puddy also disappeared.

    The PP Blog, which retained its Warrior Forum membership after giving up a volunteer moderator’s job in July 2008, challenged Puddy on his shotgun comment Saturday. The Blog was not alone in challenging the inflammatory remarks. Indeed, other WF members — including long-standing members — also challenged Puddy. Three WF members thanked the PP Blog in the forum for challenging Puddy’s assertion that The Salty Droid author should have a date with death by shotgun blast.

    At least three WF posters asked Puddy to retract his remarks.

    “I stand by my comments,” Puddy said, suggesting that WF members and others who disagreed with him are “brain dead.”

    By coincidence, “brain dead” was the exact same phrase members of ASD used to describe the federal judge presiding over the Ponzi litigation brought by the U.S. Secret Service in August 2008. The word choice did not go over well in the ASD case, either. Nor did Internet Marketers’ explanation that the case against ASD by the Secret Service and federal prosecutors was the work of “Satan” and the equivalent of the 9/11 terrorist attacks on the United States.

    Saturday,  indeed, was another a dark day for Internet Marketing, which already has a miserable reputation for scamming, turning a blind eye to scammers, advocating on behalf of scammers and closing ranks when one of its own is challenged by prosecutors or web critics.

    Although some Internet Marketers — including members of the Warrior Forum — speak out routinely against scams and shady or illegal marketing practices, they often are derided as jealous “haters,” whiners, malcontents and people who cannot stand “success.”

    SD told the PP Blog that he routinely has been subjected to threats.

    “That happens to me all the time,” SD said.  “They threaten with me with all sorts of horrible atrocities . . . in public and in private. They also talk amongst themselves about the possibility of my death with fondness . . . and regularly . . . this in rooms that contain crazily loyal sycophants/cult followers.”

    That the “conversation” at the WF “so quickly deteriorated to that level says pretty much everything you need to know about this ‘industry,’” the SD said.

    Read a recent post titled “The Internet Marketing Syndicate” on The Salty Droid

  • COMING SOON: Author Of The ‘Salty Droid’ Blog Responds To Menacing Comment Made By Internet Marketer; ‘Shotgun’ Remark On Warrior Forum Seen As ‘Dangerous And Violent’

    Many of our readers know that the PP Blog has been subjected to threats, menacing behavior and cyberstalking. Later tonight, we’ll publish an editorial on a highly disturbing incident that occurred last week at the Warrior Forum (WF).

    The Salty Droid, a Blog that unapologetically skewers highly questionable Internet Marketing practices and some of the trade’s most visible figures, was made the subject of a death wish Aug. 17 at the WF.  The PP Blog strongly condemns the event at the WF, the actions of the Internet Marketer who made the incendiary comment and attempts to chill by force of threat reporters and Bloggers who cover IM-related issues.

    Suggesting a critic should be killed with a shotgun to silence his voice  is thuggery — plain and simple. It should not be tolerated. Period.

    Our editorial will include comments from The Salty Droid author.

    “They threaten with me with all sorts of horrible atrocities,” he said about some Internet marketers, observing that the trade has “crazily loyal sycophants/cult followers.”

  • KABOOM! Feds Release Info On ‘Alpha Trade Group’ Forex Scheme With Ties To Mexico, Panama; Records Suggest Scheme Was Collapsing Even Prior To Promos On TalkGold, MoneyMakerGroup Forums

    Yet another HYIP scheme pushed on the TalkGold and MoneyMakerGroup forums has been outlined by federal prosecutors — this time in Florida.

    The name of the scheme was Alpha Trade Group (ATG), and web records show that the scheme was pitched on TalkGold and MoneyMakerGroup beginning on Oct. 7, 2009. Court records, meanwhile, show that ATG already was under investigation by the U.S. Department of Homeland Security when the first posts to promote the scheme appeared on the forums.

    Just days earlier, on Sept. 25, 2009, a U.S. bank closed an account prosecutors later linked to the scheme, according to court records. Taken together, the court and web records strongly suggest that the ATG investment “opportunity” first was advertised on MoneyMakerGroup and TalkGold when the scheme already was in a state of collapse because one of its key money conduits had been blocked.

    This screen shot shows the first post about Alpha Trade Group appeared at the MoneyMakerGroup Ponzi forum on Oct. 7, 2009 — days after a U.S. bank already had closed an account linked to the scheme amid fears it was being used to launder money.
    This screen shot, taken from Paragraph 23 of a federal affidavit in the ATG Ponzi case, shows that a U.S. bank closed an account later linked to the scheme at least 12 days prior to the ATG promo on the MoneyMakerGroup forum. Court records show the scheme already was under investigation by federal authorities before the sales posts were made on the MoneyMakerGroup and TalkGold forums.

    It is possible that the scheme was in a state of collapse even earlier than September 2009. Court records show that at least one bank account tied to the business was closed on June 18, 2009 — nearly four months prior to the first posts promoting the scheme on MoneyMakerGroup and TalkGold.

    One MoneyMakerGroup poster — apparently angry that the program was being advertised in public — scolded the poster who started the thread.

    “Please take down your posts,” the scolder wrote. “ATG asked all of the members not to advertise. Otherwise your account with the company will be closed. Go to recent e-mails from the company. This is serious. Please comply.”

    The post scolding the advertiser appeared on Oct. 29, more than three weeks after the original sales pitch appeared on the forum and more than a month after federal agents began their probe into ATG.

    By Feb. 22, 2010, federal prosecutors and Immigration and Customs Enforcement (ICE), a division of the U.S. Department of Homeland Security, were in federal court in Orlando filing a forfeiture complaint.

    The Feds sought the seizure of $316,418.50 in a bank account linked to the scheme, according to court records. The forfeiture complaint alleged a Forex Ponzi scheme, and prosecutors linked the fraud to ATG, a Florida company known as Online Market Solutions and at least four individuals: Jose Cecilio Martinez Beltran, Francisco Amaury Suero Matos, Yehodiz Padua Valentin and Welinton Bautista Castillo.

    Unnamed “others” also were referenced in the complaint.

    “Investment opportunities offered by Alpha Trade Group promised participants unusually high monetary returns on investments and for referring other persons to the programs,” prosecutors said, in a statement to victims. “In reality, the investment opportunity was little more than ‘Ponzi’ or ‘Pyramid’ scheme, in which if participants actually received funds, those funds were generated by investments made by other Alpha Trade Group investors.”

    A federal judge ordered the money forfeited on July 26, according to court records.

    The case was brought by the office of U.S. Attorney A. Brian Albritton of the Middle District of Florida. Albritton’s office is handing a number of highly complex financial-fraud schemes.

    Websites such as TalkGold, MoneyMakerGroup, ASAMonitor and MyCashForums have promoted one fraud scheme after another. TalkGold, MoneyMakerGroup and ASAMonitor are specifically referenced in court documents filed in the Pathway To Prosperity (P2P) fraud scheme.

    P2P’s Nicholas Smirnow was charged in May by the U.S. Postal Inspection Service and federal prosecutors in Southern District of Illinois with operating a massive HYIP Ponzi scheme that affected investors across the world.

    MoneyMakerGroup also is referenced in court filings by the SEC in the alleged Legisi Ponzi scheme.

    Earlier this month, the U.S. Department of Justice announced that the U.S. Secret Service had helped bring about the arrest in France of an alleged international thief in part by monitoring criminal forums.

    Vladislav Anatolievich Horohorin, 27, was arrested by French authorities in Nice. Court filings show that the Secret Service used undercover agents and “undercover communications” to develop the case.

    Federal records show that ATG purported to be registered in Panama and was using “various corporations and fictitious names registered in Florida” to pull off the scheme.

    Among the names used was “Orsa Investment Group LLC,” according to an affidavit filed in the case. The scheme began in April 2009, according to court filings.

    An ICE agent said in an affidavit that the Internet and “business opportunity meetings” in Central Florida were used to promote the scheme.

    Read the ATG forfeiture complaint, which paints a picture of a commission-based, multilevel-marketing (MLM)  scheme within a Forex fraud scheme — and other schemes within schemes.

  • BREAKING NEWS: Another Spectacular Ponzi Scheme Alleged In Florida; OLINT Operator David A. Smith Charged In Caribbean Forex Caper; Extradition To United States Expected

    BULLETIN: A citizen of Jamaica has been charged by U.S. prosecutors in Orlando with operating a Forex Ponzi scheme alleged to have gathered more than $200 million from more than 6,000 investors.

    David A. Smith had help from unindicted co-conspirators in Florida, prosecutors charged. The office of U.S. Attorney A. Brian Albritton of the Middle District of Florida is handling the prosecution, which seeks the forfeiture of $128 million, a sum of $40,103.90 from a wire transaction that occurred in 2006,  a home in Windermere, Fla., precious gemstones, precious metals and jewelry.

    The conspiracy was carried out in Seminole County, Fla., and was designed to channel money from the scheme into U.S. banks, prosecutors said.

    Residents of Orange County were affected by the scheme, prosecutors said. They noted that the unindicted co-conspirators were affiliated with a Florida company known as JIJ Investments. Prosecutors did not name the unindicted co-conspirators, describing them as “Directors” of JIJ.

    In 2005, Smith formed a Jamaican firm known as Overseas Locket International Corp. (OLINT), prosecutors said. In 2006, he started another firm known as OLINT TCI Corp. Ltd. in the Turks and Caicos Islands.

    Both firms were described as “private investment clubs,” prosecutors said.

    Smith also was the majority owner in a Lake Mary, Fla., firm known as I-Trade FX LLC, prosecutors said.

    Although investors were told their money would be used for Forex trading, Smith was accused of “failing to invest their funds in Forex trading as he had promised.” He also caused fraudulent account statements to be sent to investors over the Internet, prosecutors said.

    Meanwhile, prosecutors accused Smith, who also is in deep trouble in the Caribbean, of transferring “millions of dollars” from investors to his personal accounts “to finance a lavish and expensive life-style” for himself and others.

    Smith, prosecutors said, created a “broad infrastructure” to create the appearance OLINT was engaged in legitimate Forex trading when it was not.

    He has been charged with wire fraud, money-laundering and conspiracy, and is not expected to fight extradition to the United States.

    Albritton’s office is involved in the investigation of a number of highly complex Ponzi and fraud schemes, including the Beau Diamond Forex Ponzi scheme, the Traders International Returns Network (TIRN) case and the alleged Evolution Marketing Group/FinanzasForex fraud case.

    TIRN operator David Merrick pleaded guilty in May to money laundering and conspiracy to commit wire fraud and securities fraud in the TIRN Ponzi scheme.

    In the Evolution Marketing Group/FinanzasForex case, prosecutors said investigators had tied some of the money collected in the alleged scheme to the international narcotics trade. Court filings in the case paint a picture of an incredibly elaborate maze of companies and bank accounts set up to confuse both investors and law enforcement. At least 59 bank accounts, 294 bars of gold and nine luxury vehicles have been seized in the case. One of the cars was a 2008 Lamborghini Murcielago valued at more than $430,000.

  • BULLETIN: Church Pastor Was Running Forex Ponzi Scheme, CFTC Says; Agency Gets Emergency Asset Freeze Against Jeremiah C. Yancy

    A church pastor targeted congregants in a Forex Ponzi scheme in which he misappropriated at least $462,000, the CFTC said.

    The pastor, Jeremiah C. Yancy, previously had been implicated by Idaho regulators in a real-estate swindle and scheme to sell unregistered securities that resulted in ruinous losses for investors, according to records.

    Yancy also is known as Jeremiah Christian Yancy, Jeremiah C. Yancey, Jeremiah C. Glaub, Jeremy Christian Glaub and Jeremiah Christian Glaub, regulators said. The Idaho real-estate scheme was centered around the city of Nampa in the Boise and Meridian region, according to records.

    When the real-estate fraud scheme was collapsing, Yancy turned to a Forex fraud scheme, according to the Idaho Securities Bureau.

    In the CFTC case, Yancy and a company known as Longbranch Group International LLC were charged with operating a Forex Ponzi scheme that targeted at least 64 people, including church members.

    “Yancy and Longbranch told prospective customers that they managed forex trading for non-profit organizations, including churches and orphanages,” CFTC said.

    Clients were recruited through “fund-raising entities,” telephone conference calls set up by the entities and email pitches, the CFTC said.

    Customers were promised “monthly returns of 20 to 40 percent from forex trading” and given false account statements, the CFTC said. Some customers allegedly were told their principal would be guaranteed.

    “Yancy and Longbranch allegedly sent prospective customers account statements from demonstration forex trading accounts showing high returns from accounts purportedly containing up to $10 million traded by the defendants,” the CFTC said. “Defendants, however, did not inform customers that these forex accounts were demonstration and/or test accounts and did not represent actual customer account trading.”

    The CFTC case was filed in federal court in Houston. Yancy’s last-known address was in Atoka, Okla., the CFTC said.

    Read the CFTC complaint, which also alleges that Yancy was unlicensed and that his clients were not qualified investors.

    Read the Idaho complaint from 2009, which was decided against Yancy earlier this year by default. Idaho regulators alleged that Yancy often spoke to church-connected groups and told attendees that he had risen above a difficult childhood to become a successful family man and businessman.

    Yancy was ordered to pay $600,000 in restitution and more than $450,000 in penalties in the Idaho case.

    “When the real estate investments failed, Yancy solicited friends, fellow church members and previous investors to invest with him in a foreign currency program,” Idaho investigators said in February. “Yancy was not properly registered to engage in foreign currency trading as required by the Idaho Commodity Code. Idaho investors who participated in Yancy’s foreign currency trading program have not received a return of their investment or any profit.

  • ‘In God We Trust’ Securities Huckster Found Guilty In $17 Million Swindle; Byron Keith Brown Had ‘Fleet’ Of Luxury Cars; Feds Call Business ‘Tangled Financial Web Of Lies’

    A Virginia man who traded on religious sentiments and the motto printed on U.S. currency to fleece investors in a $17 million Ponzi and securities swindle potentially faces decades in prison after being found guilty in Maryland of wire-fraud and money-laundering charges.

    Byron Keith Brown bought at least 16 luxury or high-performance cars with investors’ money, including brands such as Lamborghini and Rolls-Royce, prosecutors said.

    Brown, 32, of Vienna, operated In God We Trust Financial Services (IGT) and used his websites to ask prospects to turn over $1 million at a time, prosecutors said. He formerly lived in Ellicott City, Md.

    A veteran IRS investigator said the case demonstrated that a huckster could create the appearance of success to mask “a tangled financial web of lies.”

    “Ponzi schemes can thrive for a time on false claims about how the money is being invested and where the returns are coming from,” said Rebecca Sparkman, special agent in charge of the IRS Criminal Investigations Unit in the District of Columbia field office

    “[B]ut that time is gone and as this verdict shows it is time for those responsible to face judgment,” Sparkman said.

    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.

    “[H]e had rented a mailbox or services at a virtual office that provided telephone answering services and mail forwarding services to clients,” prosecutors said.

    And Brown “used computer software to create an illusion that the investor was logging into a banking website and viewing account information when in fact, the account numbers were made up,” prosecutors said.

    U.S. Attorney Rod J. Rosenstein said the government, to date, has seized 16 high-end cars linked to Brown.

    “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,” Rosenstein said.

    Included in Brown’s investor-funded haul were a 2004 Bentley, a 2005 Rolls-Royce Phantom, a 1936 Auburn Speedster, a 2007 BMW, a 1997 Jaguar, a 2006 Aston Martin, a 2007 Lamborghini, a 2008 Maserati, two Mercedes and a 2002 Ferrari, prosecutors said.

    “In addition to sentencing criminals to prison, our goal is to seize any assets purchased with criminal proceeds,” Rosenstein said.

    Brown was not licensed as a broker, dealer or investment adviser in Maryland, Virginia or the District of Columbia. The scheme operated between 2003 and 2009.

    America was dependent on the horse and buggy when the motto “IN GOD WE TRUST” became part of the national consciousness.

    The motto first appeared on the 1864 two-cent coin, the U.S. Department of the Treasury notes on its website. Abraham Lincoln was President at the time, and the United States was engaged in the Civil War against the breakaway South.

    On Nov 13, 1861, the Rev. M. R. Watkinson, Minister of the Gospel from Ridleyville, Pa., wrote to Treasury Secretary Salmon P. Chase, observing that “the Almighty God” should be recognized in some form on U.S. coins.

    Chase acted almost instantly to make it happen, according to the Treasury Department, which had received many similar “appeals from devout persons throughout the country,” the Treasury Department notes.

    Watkinson reasoned a nation that did not acknowledge God one day might be regarded a nation of heathens, according to his letter to Chase.

    “From my hearth I have felt our national shame in disowning God as not the least of our present national disasters,” Watkinson wrote to Chase nearly 150 years ago.

    In a letter dated Nov. 20, 1861 — a week after the date on Watkinson’s letter — Chase instructed James Pollock, director of the Mint at Philadelphia, to prepare a motto for U.S. coinage.

    Here is how the letter read, according to the Treasury Department.

    Dear Sir: No nation can be strong except in the strength of God, or safe except in His defense. The trust of our people in God should be declared on our national coins.

    You will cause a device to be prepared without unnecessary delay with a motto expressing in the fewest and tersest words possible this national recognition.

    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 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.

    Visit the Treasury Department website to read about the history of “IN GOD WE TRUST” on U.S. coins and currency.