PatrickPretty.com

Author: PatrickPretty.com

  • Scott Rothstein Property To Be Auctioned Saturday; Big Crowd Expected; Politicians Likely To Stay Home

    Disbarred attorney and Ponzi scheme suspect Scott Rothstein’s name is radioactive among politicians of both major parties in the United States. The embarrassment began to build when Rothstein, a celebrated schmoozer and source of campaign funds, fled to Morocco after the alleged $1.2 billion scheme began to unravel last fall.

    Things got worse yet when federal prosecutors began to seize Rothstein’s assets, including an 87-foot yacht registered in the Marshall Islands, two $1.6 million Bugati Veyrons, a $495,000 Mercedes, two $484,000 Rolls-Royces and lots of Ferraris, Lamborghinis and other extremely expensive cars.

    Rothstein’s vanity purchases knew no limits — and neither did his appetite for chumming up to politicians. The next round of embarrassment for politicians will occur Saturday in Tamarac, Fla.

    Property linked to Scott Rothstein and his collapsed Fort Lauderdale law firm, Rothstein Rosenfeldt Adler, will be sold at auction.

    Fisher Auction Co., appointed by the bankruptcy trustee, will conduct the event.  The auction will take place at AMC Liquidators Showroom, 3705 West Commercial Blvd., in Tamarac. Registration opens at 8 a.m. Items go up for bid at 10 a.m.

    “Prospective bidders must have a $500 refundable cash deposit in order to be a qualified bidder,” said Lamar Fisher, president and chief executive officer of Fisher Auction Co. “All purchases on auction day are payable in cash only. No checks, no credit cards.”

    Why the need for a cash deposit?

    “We have a tremendous volume of items to move on auction day and must make sure those who are serious bidders have the opportunity to bid,” Fisher said. “We have security in place and have used a higher than typical deposit to help insure that.”

    Among the items: computers, telephones, conference room furniture, oriental carpets “from all locations” and “the contents of Scott Rothstein’s personal suite of offices.” Sports items, too.

    “Mr. Rothstein was an obvious avid memorabilia collector,” Fisher said.

    Sports items include (but are not limited to): a University of Florida – NCAA 2007 Final Four, Atlanta, GA. framed authentic cut from the original floor of this game #1/1900;  an official art poster by Charles Fazzino; three dimensional artwork of Yankee Stadium; imitation player cards with original signatures of players Nos. 11, 24, 20, 35, 2, 13, 42, 51, 55 ; Manager Joe Torre – #187/500; an NFL football in a plastic display case; “1972 Perfect Season” (Miami Dolphins) signed by all players; and other signed memorabilia.

    These items also are listed in the preliminary auction inventory:

    • Mens pair of cuff links in shape of gold star, signed by Sen. John McCain.
    • Mens pair of cuff links, Maverick, signed John McCain. With framed recognition letter.
    • President & Vice President of United States, Inauguration 2009, pair of cuff links with matching tie tack.
    • Mens pair of cuff links – United States Senate – goldtone.
    • China bowl signed – “Charlie Crist.” (Florida governor and Senate candidate.)
    • Jeweled figurine of elephant depicting Republicans.
    • Framed photograph of Scott Rothstein, Kim Rothstein & Sen. Joe Lieberman. Signed by Lieberman.
    • Framed photograph of Gov. Arnold Schwarzenegger with a signed personal note to Scott Rothstein..
    • Framed photograph of Scott Rothstein with Charlie Crist. Signed by Crist.
    • Framed photograph of Scott Rothstein with John McCain. Signed by McCain.
    • Framed photograph of Scott Rothstein with Alan Spector. Signed by Spector.
    • Framed certificate from the State of Florida Executive Department signed by Charlie Crist.
    • Framed photograph of Scott Rothstein, Cindi McCain, John McCain and Charlie Crist. Signed by McCain and Crist.
    • Framed photograph of Scott Rothstein and Gov. Jebb Bush. Signed by Bush.
    • Framed photograph of Scott Rothstein and Gov. Bill Richardson. Signed by Richardson.
    • Framed photograph of John McCain, Cindy McCain, Scott Rothstein and Kim Rothstein. Signed by McCain.
    • Framed photograph of Mel Martinez and Scott Rothstien. Signed by Martinez.
    • Framed photograph of Attorney General Bill McCollum and Scott Rothstein. Signed by McCollum.
    • Framed photograph of George W. Bush and Scott Rothstein. Signed by Bush.
    • Framed photograph of John McCain, Cindy McCain, Charlie Crist and Scott Rothstein. Signed byMcCain.
    • Framed photograph of Gov. Sarah Palin, Kim Rothstein and Scott Rothstein. Signed byPalin.
    • Framed letters to Scott Rothstein signed by Gov. Charlie Crist.
    • Framed invitation to dinner reception in honor of Gov. Charlie Crist at the Casa Casuarina.
    • Framed letter to Scott Rothstein from Gov. Arnold Schwarzenegger with photos.
    • Framed letter signed by Sen. Jeff Atwater.
    • Framed letters signed by Sen. John Ensign of the National Republican Senatorial Committee.
    • Framed letters signed by Sen. Mel Martinez.
    • Framed letter signed by Sheriff Al Lamberti.

  • MAGNIFYING GLASS: Local Cops Alerted Receiver In Cook/Kiley Ponzi Case That Credit Card Was Being Used After Asset Freeze

    Player in a Ponzi scheme? If alleged Minnesota schemer Trevor Cook’s experience is any indication, you should expect to be placed under a microscope by local merchants and police if you’re named in a complaint by regulators.

    Cub Foods, a Minnesota-based grocery chain, placed Cook under video surveillance when he entered a local store. A loss-prevention specialist cited fears Cook might use the store to purchase gift cards in a scheme to hide assets from investigators.

    Meanwhile, the 71-member police department in Eagan, Minn., alerted the court-appointed receiver in the alleged Cook/Pat Kiley scheme that Cook was using a credit card after a federal judge froze his assets, according to court filings.

    Cook now is the subject of a contempt hearing. Receiver R.J. Zayed said Cook initially failed to disclose the existence of four credit cards and is not cooperating, and the SEC said U.S. Chief District Judge Michael Davis may have to jail Cook to enable investigators to prevent assets from being dissipated.

    Cook had at least one other undisclosed credit card, Zayed said.

    “The only reason the fifth card was known to the Receiver was because the Eagan Police Department informed the Receiver of this account after Cook used it to purchase” gift cards, Zayed said.

    Zayed said Cook used credit cards after the asset freeze was imposed in November to purchase more than $30,000 in gift cards at Target, Holiday, SuperAmerica, Home Depo, AMC Theater, Regal Cinema, Nordstroms, Cheesecake Factory, Olive Garden, Old Chicago, Ruby Tuesday, Chilis, Applebees, PetSmart and Bath&Body Works.

    Cook also purchased “numerous phone cards,” Zayed said.

    Although Cook now has turned over the gift cards and the credit cards, he has taken the 5th Amendment in the case. Zayed, though, argued that Cook was using the 5th Amendment in a bid to pick and choose when and how he would cooperate in locating and preserving receivership assets.

    “Cook now tells the Court that he will not turn over any additional assets because it would violate his privilege against self-incrimination,” Zayed argued in a brief to Davis. “Cook cannot have it both ways, turning over assets when it benefits him while continuing to hide other assets from the Receiver. Approving Cook’s strategy would make a mockery of the Court’s Orders and runs afoul of basic Fifth Amendment jurisprudence.”

    By turning over some assets and testifying to the existence of others, Zayed argued, Cook has waived his 5th Amendment protections.

    “Cook voluntarily testified about assets in his possession when he turned over a portion of those assets to the Receiver,” Zayed said. “He did not do this accidentally or out of the goodness of his heart.

    “He did it to present himself in the most positive light he could to the Court when he was caught violating the Court’s Orders,” Zayed continued. “Cook also testified with respect to his assets when he provided the Receiver with a laundry list of expenses and asked the Receiver to provide him and his wife with thousands of dollars in monthly living expenses from the Receivership estate to maintain his lifestyle. Having ‘testified about certain assets for his benefit, Cook cannot now shield all other relevant facts on these topics.”

    Counting holiday delays and time scheduled for attorneys to file briefs, the Cook contempt proceedings have been under way for more than a month. The SEC and the CFTC sued Cook and Kiley in November, alleging an international Ponzi scheme involving more than $190 million.

    In 2006, the National Futures Association (NFA) fined Cook $25,000, saying he had committed a “very serious violation” in the manner in which he treated funds entrusted to him by an 80-year-old woman who was the guardian over her elderly sister. The case featured assertions of side-dealing and fabricated signatures on account documents.

    A footnote in NFA’s summary of the case concluded that Cook was operating an unregulated gold and bullion business. The name he chose for the business closely resembled the name of a futures-trading firm, but Cook told NFA that the name was a coincidence.

    Read NFA’s summary of the evidence in the Cook case and its decision. Pat Kiley, a former Christian radio host, was among the witnesses called.

    Davis may rule on the contempt issues next week.

  • Citing ‘Walks Like A Duck,’ Federal Judge Orders Florida Securities Fraudster Jailed For Hiding Assets From SEC

    A federal judge has ordered a Florida man to surrender to U.S. Marshals Jan. 25 after finding him in contempt of court for hiding assets from the SEC overseas.

    Should Jamie L. Solow fail to surrender by 2 p.m., U.S. District Judge Donald M. Middlebrooks said, marshals will be dispatched to arrest him. Middlebrooks already has issued an order authorizing marshals to enter his Fort Lauderdale luxury condominium to take him into custody and transport him to a federal detention facility.

    Middlebrooks also banned Solow from traveling outside the jurisdiction of U.S. District Court for the Southern District of Florida between now and the surrender date and ordered marshals to notify the court immediately if Solow does not surrender.

    “The Eleventh Circuit adheres to the ‘time-tested adage: if it walks like a duck, quacks
    like a duck, and looks like a duck, then it’s a duck,’” Middlebrooks said in his contempt ruling.

    “Mr. Solow still lives a luxurious lifestyle, enjoying the benefits of the money he has made over the years, yet he refuses to repay the victims of his fraud. Such a situation cannot stand,” Middlebrooks said.

    The “duck,” according to Middlebrooks, was an attempt to insulate Solow against a judgment of more than $3.4 million in a securities-fraud case by transferring assets to his wife in a Cook Islands Trust. The Cook Islands are a group of small islands totaling 92.7 square miles in the South Pacific Ocean, northeast of New Zealand.

    Possible air route between Miami and Rarotonga, Cook Islands.
    Possible air route between Miami and Rarotonga, Cook Islands. Source: TimeAndDate.com, using map based on NASA image.

    For its part, the SEC said that, between January 2008 (the month in which Solow’s jury trial commenced) and April 2008 (several months after the jury’s verdict against him), “Solow and his wife liquidated securities accounts totaling over $1.5 million.

    “Some of those funds were used to pay ‘asset protection attorneys’ retained by Mrs. Solow a mere four days after the jury verdict was entered against her husband,” the SEC said.

    In March 2008, “Solow signed a $5.2 million mortgage on his residence in Hillsboro Beach,” the SEC said. “The proceeds of the mortgage were used to fund a CD now held by a Cook Islands trust for the benefit of Mrs. Solow. Notwithstanding these transfers, Solow claims to be a ‘ward of his wife.’”

    Middlebrooks said the asset-protection scheme clearly was designed to permit Solow to live in the lap of luxury while leaving victims holding the bag.

    “Mr. Solow would like the Court to believe that his best efforts to pay the disgorgement
    obligation ended with the liquidation of an old truck, a desk set and a small income tax refund totaling $2,639.24,” Middlebrooks said.

    “Mr. Solow lives in a beachfront condominium in Fort Lauderdale; owns a beachfront house on Hillsboro Mile; spends extended winter vacations at his family home in Park City, Utah; and enjoys the representation of sophisticated defense counsel in these proceedings,” Middlebrooks said. “According to Mr. Solow, all of these expenses are paid through the largesse of his wife. However, the record shows that this largesse is derived entirely from assets acquired with Mr. Solow’s earnings. The Court finds that Mr. Solow has purposefully sought to insulate these assets from the Court’s reach.”

    Gina Solow, Solow’s wife, brought no assets into the marriage, had no inheritance and last had a job in 1989, Middlebrooks said.

    “Notwithstanding the fact that Mrs. Solow has brought no income or assets into the marriage, she now pays for all of Mr. Solow’s living expenses,” Middlebrooks wrote. “At the hearing, Mr. Solow testified that he had ‘no clue’ as to the extent of the assets held by his wife. I find Mr. Solow’s claim of complete lack of knowledge of his wife’s financial dealings incredible.”

    Middlebrooks’ 40-page ruling was blistering, citing one example after another of attempts to hide assets. The judge, however, did allow that “Mr. Solow may purge his contempt by making good faith reasonable efforts to retrieve his assets and apply them toward the Final Judgment.”

    The SEC has sued Gina Solow separately to claw back the alleged fraudulent transfers.

  • UPDATE: Prosecutor Lauds FBI Terrorism Task Force In Case That Linked Serial HYIP Promoter To Scheme Operated By Man Convicted Of Financing Terrorism

    EDITOR’S NOTE: In an earlier post, we briefly touched on Ponzi peddler Brian David Anderson and his tie to an HYIP operated by a man convicted of financing terror. Federal prosecutors now have released a formal statement on Anderson’s guilty plea in a related Ponzi scheme — and the statement thanked the FBI’s Joint Terrorism Task Force for its work in the case.

    Here, now, the story . . .

    Critics long have fretted about the often-murky world of brick-and-mortar and electronic HYIPs and autosurfs, pointing out that no one really knows the motivations of the operators and their pitchman and that vast sums of money easily could fall into the hands of terrorists.

    Now federal prosecutors have lauded the FBI’s Joint Terrorism Task Force for its work in the successful prosecution of Canadian citizen Brian David Anderson, whom investigators linked to an international HYIP known as Flat Electronic Data Interchange (FEDI).

    Anderson was identified in legal filings as a FEDI pitchman, claiming FEDI was a commodities exchange and that he was selling “seats.”

    FEDI actually was a fraudulent loan-investment scheme operated as an HYIP by Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon.” Alishtari, 46, of Ardsley, N.Y., pleaded guilty in September 2009 to fleecing investors out of millions of dollars.

    In the same case — a case in which Anderson’s name was referenced as a FEDI pitchman in a grand-jury indictment — Alishtari pleaded guilty to financing terrorism.

    “Alishtari . . . admitted that he stole millions from investors and knowingly financed what he believed to be tools of terror,” U.S. Attorney Preet Bharara said in September, after the guilty plea. “In enriching himself, Alishtari displayed a deliberate disregard for the financial and personal security of others.”

    Investigators said Alishtari “facilitated the transfer of $152,000, with the understanding that the money would be used to fund training for terrorists.

    “In the latter half of 2006,” according to investigators, “Alishtari agreed to discreetly transfer these funds for an undercover officer, believing that the money was going to be used to purchase night vision goggles and other equipment for a terrorist training camp in Afghanistan. During his guilty plea, Alishtari admitted that he sent the money from the United States knowing that the funds were to be used to help finance alleged terrorist activity in Pakistan and Afghanistan.”

    Anderson, the former pastor of a church in Canada who was arrested in Spain in 2007, was not linked to terrorism. But Canadian authorities said he pushed FEDI and another investment scheme known as Frontier Assets.

    He pleaded guilty in the United States to criminal charges stemming from the Frontier Assets scheme, and was sentenced last week to 90 months in federal prison. Prosecutors described it as a $4 million Ponzi scheme.

    U.S. District Judge Alvin K. Hellerstein said Anderson “ripped out” investors’ hearts.

    Prosecutors said Anderson told lie after lie to separate people from their money.

    “Anderson touted Frontier Assets as an exclusive ‘private loan program’ that promised high rates of return in the form of interest payments on the invested principal,” prosecutors said.

    The use of vague descriptions was part of the scheme, prosecutors said.

    “[I]n a document titled ‘How Does Frontier Assets Make Their Income,’ Frontier Assets boasted that it had been appointed a ‘Program Manager’ to a ‘major International Business Corporation’ that participates at the ‘private banking level of several significant European and Asian banks,’” prosecutors said.

    Investment jargon also was used to pique investors’ interest, prosecutors said.

    “Frontier Assets claimed the ability to place investors with offshore entities, including ‘Private Placement Investment Programs,’ ‘Real Estate development in Asia and the United States,’ ‘Manufacturing plants,’ ‘Commodities worldwide,’ ‘Forex Exchange,’ and ‘Buying and Selling of specialized bank paper, i.e. CD’s and Bank guarantees,’” prosecutors said.

    Investors’ funds were said to be insured by an “International Foundation,” prosecutors said.

    But Frontier Assets was blowing smoke, prosecutors said.

    “[T]he only funds paid into the Frontier Assets accounts were monies that had been provided by investors in the program, and the only payments out were payments of interest to investors, and transfers to Anderson and other co-conspirators. Like many other Ponzi schemes, more recent investors in Frontier Assets ultimately lost a substantial portion, if not all, of their invested principal. In total, at least 50 investors were defrauded of at least $4 million in funds.”

    Bharara praised the FBI’s Joint Terrorism Task Force for its work in this case.

  • WHO IS THE MYSTERY SCHEMER? Cheerleaders, Lawyer, PR Flak Could Not Help Accused Fraudster Defeat The Math

    EDITOR’S NOTE: It’s often said that the script of Ponzi schemes does not vary much from case to case. The “story” below could be told by any number of Ponzi scheme figures. Although the words below are made up, the “story” is based on a Ponzi figure currently in the news. After you read the tale, click on the link at the bottom to see whose tale it is.

    Here, now, the story of a schemer . . .

    The records of my two arrests were hard to find — and I didn’t tell anybody. I was afraid that, if word got out, people might think I was a criminal and not do business with me.

    I learned how to pull off my scheme by paying attention to earlier schemes I’d heard about. The banks? They didn’t have a prayer against me; I paid people commissions to bring me business and advertised a higher interest rate. People naturally reinvested their profits to earn more money. It truly was as simple as that. (And don’t let anybody tell you differently.)

    People always want to believe. My clients were only too happy to help spread the good word about me. They called me a genius and got their friends and family involved. I didn’t even have to pay for the ads! The word spread like wildfire. I became the toast of the town.

    It was odd, really: I hadn’t been the toast of my own household prior to getting my idea for the scheme. No one previously had associated me with money because I had none to speak of. Then — all of a sudden — everybody associated me with huge amounts of money. I had the magic touch. It happened practically overnight.

    A reporter started digging around. I filed a lawsuit against him. You always can get the reporters to back off when you file a lawsuit.

    Or so I thought.

    Early on, I got one reporter off my trail. Hit him where it hurt. Made him spend money. I pretty much put him on the shelf.

    But it turned out there was another reporter, one who didn’t care how much money I had or how many lawyers I could hire with my money. This reporter didn’t back off. He came up with a number while he was reporting: 160 million. It’s the number that contributed greatly to my demise.

    Not right away, mind you. I hired a PR flak to spin my story. Beyond that, I spun my own story. I was a salesman. My job was to snow the snowman. I bobbed and weaved. I snowed. I put the investigators off for a while by pretending to be forthright and cooperative. I knew that my clients did not want to believe I was a thief. Some of them stuck with me even after the news broke.

    My PR flak eventually turned on me. So did the government — federal and state. I didn’t quit, though — not even after I got caught. I got caught again in Florida. Moved offshore for a while. Got caught there, too.

    For a while, I served as my own attorney. Part of me wishes I hadn’t done that — but, what the hell: I always enjoyed a good show.

    Click here to learn who I am.

  • PARTIAL LIST: Gold Nugget Invest (GNI) Just Latest Failed Scheme Promoted By AdSurfDaily Members; One Program After Another Pushed By Promoters Has Collapsed

    EDITOR’S NOTE: This list summarizes several programs pushed by members of AdSurfDaily, a Florida company implicated in an alleged $100 million Ponzi scheme. In some cases, the programs were pushed prior to the seizure by the U.S. Secret Service in August 2008 of 15 bank accounts linked to ASD or Golden Panda Ad Builder, one of the companies implicated in the ASD scheme. Each of the programs listed below came to a dubious end or continue to exist in an unclear, shadowy form. This list is presented in no particular order and does not include every HYIP/autosurf pitched by ASD members.

    UPDATED 3:16 P.M. ET (U.S.A.)

    Gold Nugget Invest (GNI): Collapsed Friday. HYIP. Government of Belize issued warning in November. Ownership hidden behind proxy. Business model unclear. Presented as betting arbitrage, but perhaps was involved in forex. Advertised payout of 7.5 percent per week. Possibly linked to European banking investigation. Changed rules on the fly. Still collecting money after “Re-organization.” Purportedly launched in October 2006, the same month ASD was preparing for launch.

    Genius Funds/Cash Tanker/Saza Investments: Pushed by ASD member “joe” in a post on the ProASD Surf’s Up forum just prior to collapse of GNI. CashTanker, which used a graphic depicting Jesus, now has tanked after advertising payouts of 2 percent a day. “joe” pitched GNI, Genius Funds, Cash Tanker and Saza Investments in an egg-themed promotion in which the word “egg” was used in domain names that redirected to the HYIPs. “joe’s” egg-themed domain that redirected to Cash Tanker now redirects to a program called PTV Partner, an HYIP that bills itself “The Ultimate High Yield Asset for your Financial Portfolio!” “joe’s” egg-themed pitch was based on the screaming notion that “ALL MY EGGS ARE NOT IN ONE BASKET. I MAKE $2000.00 A WEEK.” A street address for the egg-themed domains corresponds to an address in a federal lawsuit involving cell-phone trafficking.

    Regenesis 2×2: Matrix in Seattle area. Records seized by U.S. Secret Service in July 2009. Operators kept under surveillance for five weeks. Multiple search warrants issued. Discarded records found in Dumpster. Sold “commission centers” for $325. Touted itself the “THE ECONOMIC STIMULUS PLAN FOR YOU.” Site appears to have been registered behind a proxy in Europe. Jeffrey William Snyder, one of the individuals kept under surveillance, was a convicted felon on probation for a previous securities scheme.

    GoldenPandaAdBuilder: So-called “Chinese” version of ASD. Assets seized in two forfeiture complaints in ASD case. Operated by Clarence Busby of Georgia. Records in now-dismissed RICO lawsuit against Busby identified him as “Rev.” at least 120 times. Busby was implicated by SEC in 1990s in three prime-bank schemes that promised enormous payouts. Purportedly became Golden Panda president after going fishing with ASD President Andy Bowdoin in April 2008. Federal judge ordered forfeiture of more than $14 million from Golden Panda in July 2009. Busby now purported “chief consultant” of BizAdSplash (BAS). Ceased payouts in July 2009, after declaring “crisis” and claiming members were overpaid. Went offline. Returned online. Went offline again for about two weeks during 2009 Holiday season. Now back online.

    BizAdSplash (BAS): (Also see GoldenPanda entry above.) BAS launched in aftermath of seizure of assets in ASD/GoldenPanda case. Assets seized in civil complaints in ASD/GoldenPanda case total about $80.52 million. Clarence Busby purported to be chief consultant of BAS. BAS touted purported offshore registration in Panama. Georgia corporation records show version of surf’s name used address of UPS Store No. 2644 in Kennesaw, Ga.

    Noobing: Pitched as alternative to ASD after seizure. Noobing targeted deaf people. Deaf member says she reported Noobing to FBI and sheriff’s department in California. There are recent suggestions that deaf members also reported Noobing to SEC. FTC and attorneys general of Minnesota, Kansas and North Carolina joined in suing Affiliate Strategies Inc. (ASI), Noobing’s parent company, in alleged scheme offering guaranteed government grants from economic stimulus funds. Illinois now has joined the FTC action. Original lawsuit filed in July 2009. Like ASD, ASI owned a jet ski. Court-appointed receiver sold it at auction. Receiver performed a preliminary exam of Noobing’s records and determined surf was upside down by approximately $550,000. Noobing gathered money in aftermath of seizure of ASD’s bank accounts. Surf slashed payouts in early 2009, citing unclear ruling in ASD case. Site offline since FTC lawsuit, which did not name Noobing.

    DailyProSurf (DPS): DPS is a largely unknown and mysterious surf site registered by ASD President Andy Bowdoin in August 2006, about two months prior to the formal birth of ASD. Records suggest DPS operated prior to registration, although its ownership was unclear. (NOTE: The story in the DPS link in this paragraph also contains information on 12DailyPro and PhoenixSurf, two surfs sued successfully by the SEC.)

    AdVentures4U (ADV4U): Surf tanked in August 2009. Reportedly had more than 60,000 members. Members identified Steve R. Smith as owner. Smith also purported owner of venture called TradingGold4Cash. In confusing note to ADV4U members, Smith purportedly said his family received threats. Used ASD-like “rebates aren’t guaranteed” excuse upon payout suspension. Urged members not to contact payment processors. Site reportedly conducted business with hotmail address.

    CEP: Judicially declared Ponzi scheme. Smashed by SEC. ASD once advertised it accepted funds through CEP Trust, the payment processor associated with the CEP Ponzi scheme.

    MegaLido: Pushed by ASD members in aftermath of seizure of ASD’s assets and positioned as a safe, “offshore” alternative, MegaLido tanked late in 2008, during the Christmas season, a few months after the ASD seizure. MegaLido purportedly had 27,000 members. MegaLido might have had a tie to Instant2U, another surf that tanked during the 2008 Holiday season. “MegaLido Rocks!” one ASD promoter blared, noting excitedly that it paid 12 percent a day and “It’s Offshore!” Instant2U advertised 14 percent a day.

    Frogress: Pitched by ASD members in aftermath of seizure. Frogress tanked in January 2009, just after the Christmas holiday in 2008.

    DailyProfitPond: Another surf pitched by ASD members in aftermath of seizure. DailyProfitPond tanked in December 2008, in the days leading up to Christmas. One DailyProfitPond promoter said it was possible to start with $12 and turn it into $12,000. The “return” was listed as 150 percent over 30 days.

    AdViewGlobal (AVG or AVGA): Surf with ASD/Bowdoin ties. Formally debuted in February 2009, with a push from the now-defunct Pro-ASD Surf’s Up forum and ASD members. Tanked in June 2009 after collecting untold millions of dollars.

    Perhaps one of the most bizarre autosurfs ever to enter the “industry.” Switched to “private association” structure after reportedly meeting with felon convicted in a 1990s securities scheme. Cited U.S. Constitutional protection despite purported headquarters in Uruguay.

    AVG disclaimed any ties to ASD, despite fact its CEO was a former ASD executive who submitted a sworn affidavit in the ASD case. Issued news release disclaiming ASD ties; release was signed by an ASD employee who had testified in federal court for ASD in 2008. Said the fact AVG’s graphics appeared on ASD-controlled website was “operational coincidence.”

    Announced bank account “suspension” in March 2009, blaming it on members who wired too many transactions in excess of $9,500. Announced CEO resignation, saying CEO would remain in “accounting” department. Announced new wire facility as done deal in May 2009. Company it identified as wire facilitator issued public denial, suggesting AVG was trying to funnel money to itself through a shell company.

    Shell company operated by man with two large bankruptcy filings, including one in which an address listed as an apartment was the address of a mail drop. Purported AVG “compliance” department head was sued twice in 2008 for noncompliance with federal law. AVG claimed to own eWalletPlus payment processor. Actual eWalletPlus ownership far from clear. At least two people close to AVG money had spectacular bankruptcy filings. Andy Bowdoin, whom members later said was AVG’s silent head, was arrested for felony securities violations in the 1990s and entered guilty pleas.

    AdGateWorld (AGW): Now-defunct surf launched after ASD seizure. Later purportedly sold to interests in the “Middle East.” Claims cannot be verified. AGW linked to ASD member Jack Schrold, a Florida attorney once suspended from the Florida bar for misconduct. Schrold was sued successfully by the FTC for the actions of his credit-repair firm, and also was convicted separately of knowledge of the commission of conspiracy and wire-fraud. AGW announced its death as “End of Dream.” Blamed members in announcement: “This honest and legitimate approach using the advertising rebate model apparently did not meet the expectations of the herd mentality.”

    PaperlessAccess: Mysterious upstart surf. ASD President Andy Bowdoin appeared in a video for Paperless Access in 2009, after the ASD seizure. Video appeared online in March 2009 — during time frame in which AVG was announcing bank-account suspension and the departure of its CEO. PaperlessAccess positioned as way for ASD members to regain money seized by the government. Bowdoin did not identify the owners of Paperless Access, describing them only as a small group of people. Nor did Bowdoin mention that the government was establishing an ASD refund program.

    PremiumAdsClub (PAC): Tanked in February 2009. Members said it collected money right up to the end.

    AggeroInvestment: Had PAC ties. Advertised 60 percent a month, plus bonuses. Collected money to the bitter end.

    QBusinessSolution: Surf with purported ties to former ASD executive Juan Fernandez, who took the 5th Amendment in the ASD forfeiture case. # # #

  • EDITORIAL: Gold Nugget Invest ‘Players’ Create Smokescreen For Failed HYIP; Defend Company On Ponzi Boards, Claiming United States Has No Jurisdiction

    EDITOR’S NOTE: Claims often are made that it’s “safe” for U.S. residents to invest in “offshore” opportunities and that offshore enterprises are outside the reach of U.S. regulators and law-enforcement agencies. This column refutes those assertions — and also includes information on Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon.” Alishtari operated an investment scheme known as FEDI and was convicted in September of stealing millions of dollars from participants and of financing terrorism.

    UPDATED 3:58 P.M. ET (U.S.A.) Lots of people say that HYIPs are harmless. They continue to promote the programs even though they’d never encourage their children to hop into a car driven by a  stranger or tell their parents or friends it was OK to hire a roofing contractor who was not registered at City Hall.

    Why purported operators of online High Yield Investment Programs (HYIPs) get a pass when strangers driving cars and fly-by-night home-improvement contractors do not is a matter for great introspection. It’s a pretty safe bet, though, that it comes down to reckless — and even criminal — greed.

    The Gold Nugget Invest (GNI) HYIP tanked Friday, after collecting untold sums. GNI’s website disappeared for a while after an announcement by the company that it was embarking on a “Re-organization.” The site now is back online. The “Re-organization” appears to be just another way to collect money by changing the distribution scheme.

    “Earn up to . . . 20% monthly,” the site says. “No Risk Wager.” There is no corresponding announcement on the site’s landing page that it changed the rules, withheld payouts to members under a previous scheme and, apparently, lost access to a hefty sum of its cash when assets linked to Yesilada Bank through a purported “Correspondent Bank” purportedly were frozen by “German Authorities” on an unspecified date.

    GNI’s announcement about the purported actions by “German Authorities” was vague and ambiguous.

    “This particular frozen account contains all of Yesilada’s client’s foreign exchange funds,” GNI said Friday. “There are dozens of legitimate clients, along with GNI, whose lives have been put on hold pending the resolution of an investigation which has NOTHING to do with GNI. It’s a matter of being at the wrong place at the wrong [] time.”

    GNI’s claims could not be independently verified. The company does not publish financial information that could help investors make an informed decision. Its announcement was so overwrought with florid language that members still don’t know what it means.

    Even if the claims are true, however, the only thing they demonstrate is that the company is responding to a purported crisis caused by unspecified third parties by advertising a “No Risk Wager” that implies a payout of 20 percent a week.

    Good grief. (Look in the Comments section below for GNI’s entire announcement about its problem and its “Re-organization” plan. It is one for the ages.)

    As we reported yesterday, the conspiracy theorists already have surfaced in an apparent bid to help GNI deflect attention from the fact it collected money under one set of rules, changed the rules — and now intends to continue to collect money (while holding onto earlier money it collected), thus further distancing its original investors from their money and not informing new investors in plain sight about the previous problems.

    Incredibly, some existing members of GNI are applauding GNI’s actions, saying they are consistent with a company that is “honest.” Some of the same cheerleaders are saying the United States does not have jurisdiction in matters pertaining to GNI or its purveyors. Why the apologists would tout the company’s “honesty” while also saying the SEC can’t touch it is just another one of the many incongruities of the HYIP world.

    If you are on the fence about GNI — if you find yourself desperately wanting to believe the cheerleaders and apologists — perhaps you’ll find this story at Canada.com informative. It’s a brief on Brian David Anderson, a Canadian citizen who was just sentenced to federal prison in the United States for targeting U.S. citizens in a financial-fraud scheme.

    Anderson, by the way, originally was arrested by Spanish authorities in Madrid. He was jailed in the United States and pleaded guilty in August 2008 . It is not even remotely unusual for governments to cooperate when investigating fraud and Ponzi schemes. The British Columbia Securities Commission noted Anderson was in a U.S. jail when it issued this news release on his penalty for targeting Canadians in a securities scheme.

    “Anderson told the panel in a letter that he was ‘unable to appear in response’ to the findings because he is incarcerated in a New York prison,” BCSC said. “He also said he is not in a position to pay the [$250,000] fine.”

    He was not in position to pay the restitution, either. Many HYIP promoters know that, if the operator goes to jail, no one gets paid.  Investors are told not to raise a ruckus, the suggestion being that raising a ruckus might capture the attention of authorities — and if the authorities swoop in, well, game over.

    Under this reasoning, it is best to stay quiet, even if it means a schemer has to steal from others to make payments to his or her original investors. Many of the promoters suspect a theft has occurred. They ignore it or talk around it because no gun was used. They’d call the police if a roofing contractor ever scammed their widowed mother. They’d join a posse if — heaven forbid — their missing child last was seen getting into the car of a stranger. The HYIP schemer get a pass because personal investment cash or commission cash is on the line.

    Know Who Your HYIP Neighbors Are?

    Anderson helped pitch a scheme known as Flat Electronic Data Interchange (FEDI). The FBI identitied Abdul Tawala Ibn Ali Alishtari as the operator of FEDI. Alishtari pleaded guilty in September 2009 to fleecing investors in the scheme — and also to charges of financing terrorism and conspiracy to commit wire fraud.

    Alishtari, who used the name “Michael Mixon,”  facilitated the “transfer of $152,000, with the understanding that the money would be used to fund training for terrorists,” the FBI said. “In the latter half of 2006, Alishtari agreed to discreetly transfer these funds for an undercover officer, believing that the money was going to be used to purchase night vision goggles and other equipment for a terrorist training camp in Afghanistan. During his guilty plea, Alishtari admitted that he sent the money from the United States knowing that the funds were to be used to help finance alleged terrorist activity in Pakistan and Afghanistan.”

    Anderson was not linked to terrorism, but his ties to FEDI are documented in one filing after another in Canada. Here is a mention of FEDI from the Alberta Securities Commission.

    International law enforcement regularly shares information and works cooperatively. Here are some more examples:

    Colombia recently handed over to the United States Colombian citizen David Murcia, whose pyramid scheme caused rioting in South America and later was linked to international narcotics trafficking. Authorities in Panama recently arrested U.S. citizen Jeffrey Lane Mowen, who is now in a U.S. jail awaiting trial on Ponzi charges and charges he plotted to have four witnesses against him murdered.

    John and Marian Morgan  were arrested in Sri Lanka and brought to the United States. Their alleged financial scheme purportedly operated out of Europe, although the Morgans are U.S. citizens who allegedly targeted U.S. customers.

    Web records suggest that GNI’s servers are in the United Kingdom and that almost 57 percent of GNI’s website traffic originates in the United States. Other countries driving measurable traffic are Canada, Australia, the U.K., Italy and Japan. The records, however, strongly suggest that traffic from the United States dwarfs traffic from other countries.

    This almost certainly means that GNI was reliant on U.S. dollars to sustain itself. Much of the cheerleading for the company appears to come from U.S.-based investors. The most probable reason for their continued support of the company is the fear that they’ll lose their current stakes and perhaps even get sued by people they enrolled in the program if they don’t spin the recent GNI events as a positive.

    The Gag Reflex

    The behavior of cheerleaders in murky HYIP circles is enough to make a person want to hurl. The most offensive cheerleaders are the ones who position themselves as “experts.” They are experts only in the same sense that Charles Ponzi and Bernard Madoff were experts. They are people who prey on ignorance to line their pockets with commissions. The arguments are an embarrassment to any person with a functioning brain, so utterly pretentious — and often so utterly passive-aggressive — that they trigger the gag reflex.

    A common tactic is to position people concerned about their funds as troublemakers or whiners. The worried parties are told that they are immature, that responsible adults don’t whine — and that responsible adults never put in more money than they can afford to lose. Such insults, which often are encased in smiles and expressed with great confidence, often include the claim that the SEC has no jurisdiction or that the “opportunity” is a “game” and therefore cannot be regulated by government.

    Professional HYIP pushers are at risk of being charged under U.S. law with selling unregistered securities as investment contracts — at a minimum. The Ponzi board “experts” argue that no contract exists and that it therefore follows that no charges can be brought. The argument does not pass the giggle test. Among the reasons it’s made is because the purveyors don’t want investors to call the SEC — or the FBI or state attorneys general or state securities regulators or provincial securities regulators or international law-enforcement agencies.

    The purveyors also are at risk of being criminally charged under U.S. law with wire fraud. GNI operated over the Internet — just like AdSurfDaily, an alleged autosurf Ponzi scheme based in Florida. It is known that some ASD members also promoted GNI. They announced their participation even after the U.S. Secret Service seized tens of millions of dollars from ASD in August 2008 amid allegations of selling unregistered securities and operating a wire-fraud and money-laundering scheme.

    A racketeering statute also is cited in two forfeiture complaints against ASD-connected assets. When the Secret Service filed the ASD allegations, federal prosecutors included copies of successful complaints filed against 12DailyPro and PhoenixSurf, two autosurf firms prosecuted under securities statutes.

    GNI’s apologists would rather you not know about these things.

    Bottom line: The cheerleaders don’t want to give up their commissions or profits. At the same time, they don’t want to be sued or named a defendant in a civil-enforcement action or a criminal complaint. They know the programs are illegal and that they have vast exposure, so they make excuses for the company and just plain lie — or pass along deceptions such as the SEC has no jurisdiction over the enterprises.

    Let us say it plainly: You do not have an idea of who your HYIP neighbors are. You do not have a clue about what happens to the money after it leaves your bank account or your payment processor. If you claim otherwise, you are deluding yourself. If you race to announce to forums to exclaim you “got paid,” you are setting the stage for others to get fleeced.

    This applies to virtually all the online HYIPs.

    If you are a U.S.-based GNI investor, you likely bought an unregistered security from a person who was not licensed to sell securities or are the victim of some sort of commodities or forex fraud. As noted above, web records suggest that nearly 57 percent of GNI’s traffic originated in the United States. It is likely that more than 57 percent of GNI’s money pool was comprised of U.S. dollars because of the ready supply of U.S.-based promoters, sometimes called referral “whores.”

    It’s an offensive description, to be sure. The “industry” itself is offensive. It leads to one ugly result after another. Eventually it’s going to lead to a result that is so unquestionably ugly that it cannot be pooh-poohed or explained away by greedsters and scammers posing as “experts” on Internet forums.

    Did we mention that Brian David Anderson, who pushed FEDI and whose name now is linked with the name of a man convicted of financing terrorism, was a Christian minister — and that he is in his 60s, and that he pitched FEDI in a hotel room and that he claimed repeatedly that it was “backed by gold?”

    Make sure you get a copy of our PDF compilation of President Obama’s Executive Order establishing the Interagency Financial Fraud Enforcement Task Force and remarks on the Task Force by U.S. Attorney General Eric Holder. Read this story, and get the PDF near the bottom.

  • Bush, Clinton Join Forces For Earthquake Relief; Urgent Appeal Issued In Aftermath Of Devastating Temblor In Haiti

    President Obama has asked his predecessors to spearhead a fundraising effort for Haiti earthquake relief. The president appeared yesterday with former President George W. Bush and former President Clinton at the White House to make the announcement.

    “[W]e’re moving forward with one of the largest relief efforts in our histoy — to  save lives and to deliver relief that averts an even larger catastrophe,” Obama said. “The two leaders with me today will ensure that this is matched by a historic effort that extends beyond our government, because America has no greater resource than the strength and the compassion of the American people.”

    Cash is desperately needed, Bush said.

    “Like most Americans, Laura and I have been following the television coverage from Haiti,” Bush said. “Our hearts are broken when we see the scenes of little children struggling without a mom or a dad, or the bodies in the streets or the physical damage of the earthquake.”

    Clinton said he knew some of the victims.

    “I was in those hotels that collapsed,” Clinton said, speaking of his previous trips to Haiti.  “I had meals with people who are dead. The cathedral church that Hillary and I sat in 34 years ago is a total rubble.”

    The two former Presidents have established the Clinton Bush Haiti Fund (CBHF).

    Here is a joint statement by Clinton and Bush:

    On January 12, a magnitude 7.0 earthquake struck Haiti just outside the capital city of Port-au-Prince. The devastation – in lives lost, property destroyed, and families displaced – is immense.

    At the request of President Obama, we are partnering to help the Haitian people reclaim their country and rebuild their lives.

    AFP/Getty Images

    Our immediate priority is to save lives. The critical needs in Haiti are great, but they are also simple: food, water, shelter, and first-aid supplies. The best way concerned citizens can help is to donate funds that will go directly to supplying these material needs.

    Through the Clinton Bush Haiti Fund, we will work to provide immediate relief and long-term support to earthquake survivors. We will channel the collective goodwill around the globe to help the people of Haiti rebuild their cities, their neighborhoods, and their families.

    We ask each of you to give what you can to help ensure the people of Haiti can build back stronger and better than ever.

    Both of us have personally witnessed the tremendous generosity and goodwill of the American people and of our friends around the world to help in times of great need. There is no greater rallying cry for our common humanity than witnessing our neighbors in distress. And, like any good neighbor, we have an obligation and desire to come to their aid.

    Thank you for taking the time to visit, and we hope you will donate to this worthwhile cause. The people of Haiti now need our assistance more than ever.

    President William J. Clinton
    President George W. Bush

  • ASD ALL OVER AGAIN? Gold Nugget Invest (GNI) Collapse Brings Out The Conspiracy Theorists, Apologists; Theorists Claim Interpol Investigating SEC

    EDITOR’S NOTE: Conspiracy theories quickly became part of the AdSurfDaily story after federal agents seized tens of millions of dollars from the company in August 2008 amid Ponzi scheme allegations.

    Yesterday reports surfaced that Gold Nugget Invest (GNI), a High Yield Income Program (HYIP) positioned as a betting arbitrage, had collapsed. GNI reportedly announced that it had engaged in forex trading, an announcement that surprised some members who apparently believed they had invested in a sports-betting enterprise.

    As was the case with ASD, conspiracy theories surfaced quickly after GNI’s purported collapse. The post below summarizes some of the early, tortured claims.

    Here, now, the post . . .

    UPDATED 10:26 A.M. ET (U.S.A.) Did you know any of the following things:

    That Interpol had unearthed a complex plot by Former President George W. Bush to undermine the world economy and install banking puppets?

    That Bush had started “drug trafficking operations,” funding them with Ponzi proceeds and profits from manufacturing weapons?

    That Interpol was investigating the SEC for financial crimes and that others were suing the SEC for $3.87 trillion because the agency and President Bush somehow had established a secret trading platform and were operating their own Ponzi scheme on Wall Street?

    That at least one member of President Obama’s cabinet recently had been secretly arrested for a crime related to “sabotage” and then, apparently, secretly released and permitted to continue in his old job?

    That Obama himself had been warned that he faced arrest for the manner in which he was running the country?

    That U.S. Attorney General Eric Holder and the attorneys general of the U.S. states have been warned secretly that they face arrest?

    That the U.S. government and its clandestine operatives somehow had staged the attempt to blow up a Northwest Airlines flight bound for Detroit on Christmas Day?

    That it was OK for GNI to collect large sums of money from new members — even if it knew it did not have the resources to pay its current members — because members’ first duty was to the company and not to themselves?

    That an apparent decision by GNI to lock up members’ funds for 14 months was entirely appropriate because its first duty was to save itself  so it later could redistribute the funds through a scheme with different rules?

    That members who placed money with the company and pulled it out with interest after 30 days were in no small part responsible for GNI’s problems?

    That criticizing GNI management in any way demonstrates that the critics are immature and not responsible adults?

    We knew none of these things until reports of GNI’s collapse and its hard-too-decipher “Re-organization” program surfaced yesterday. The reference to Interpol’s purported SEC probe  seems to be tied to SEC-initiated litigation against CMKM Diamonds and other individuals and companies.

    CMKM Diamonds was a Pinksheet stock.

    How all of the other conspiracy theories evolved is unclear.

  • REPORTS: Gold Nugget Invest (GNI) Has Collapsed; Belize Issued Warning In November, But Program Pitched On Surf’s Up In December

    There are multiple reports that the Gold Nugget Invest (GNI) HYIP has collapsed — although the early spin is that the program is embarking on a “Re-organization.”

    The government of Belize put out a warning on GNI in November.  Some members said the warning was meaningless, and continued to tout the program. GNI’s website now says it is offline for maintenance.

    “We are busy updating our site for you and will be back soon,” the site says.

    A purported announcement by the company of multiple problems — everything from “catastrophic script failure(s) to potentially catastrophic hackers” to an apparent banking investigation in Europe that led to assets being frozen — was circulating among members today.

    The purported announcement is filled with baffling prose, and members are trying to figure out what it all means.

    Here are a few paragraphs:

    As we welcomed Year 2010, we (Principals, Staff and Associates) felt the need to reflect on the challenges GNI faced and were able to overcome; and what if anything, we could learn from having faced these challenges.

    These challenges were broad in scope – which included catastrophic script failure(s) to potentially catastrophic hackers; from being flush with cash when we shouldn’t have been and devoid of funds when we should have (had ample amounts). Despite these hardships, and in contravention to those who wish nothing but our demise, never did we consider abandoning our friends and associates without whom we never would have experienced, learned and grew with the project uniquely known as GNI.

    The last quarter of 2009, however, placed significant obstacles in our pursuit of success, each having the capability of wiping out any well-managed program, anywhere!

    During the Christmas / New Year Holiday, needing a crystal clear vision of our financial vortex, I met with Jurgen and others to obtain their trading reports and declare our Profit / Loss position to the Principals of GNI. With Arthur leading the way, we were able to evaluate with no uncertainty, our financial, technical and situational oversight in preparation for year 2010.

    Specifically, we looked at:

    1. Yesilada Bank. That entity having the most significant impact is / was the freezing of assets by the German Authorities, of Yesilada’s Correspondent Bank. This particular frozen account contains all of Yesilada’s client’s foreign exchange funds. There are dozens of legitimate clients, along with GNI, whose lives have been put on hold pending the resolution of an investigation which has NOTHING to do with GNI. It’s a matter of being at the wrong place at the wrong. time.

    Twenty-three weeks without the availability of OUR (and some of our best clients) funds, while continuing to honor our obligation of paying interest on those funds becomes a loss ranging from 10% – 12.5% a week. We arrive at those numbers simply by adding the percentage we could have received (which fluctuates based on the traders success) had they not been frozen, with that percentage we would have otherwise not had to pay out; over a twenty-three (23) week period. If we released the actual dollar amount that is involved, the numbers become staggering if not overwhelming.

    As significant as this amount became, it was a manageable scenario using reserves and our favorable Forex positions. In defiance of all economic logic, the dollar began and continues to this day to gather strength against the Euro; weakening our positions considerably.

    2. New Competition. About the same time (late September, early October) several well-managed, aggressive and unique Sports Arbitrage programs came on-line decreasing our market share, not in terms of investment dollars, more so for viable arbs.

    The bottom line seems to be that GNI, which almost certainly operated as a Ponzi scheme, doesn’t have the cash required to sustain itself — and doesn’t have the cash to pay members.

    We reported weeks ago about the Belize warning about GNI. (Also see our Dec. 4 report about an “egg-themed” pitch for GNI and three other HYIPs.)

    The pitch appeared on the Pro-AdSurfDaily Surf’s Up forum, saying in all-caps, “ALL MY EGGS ARE NOT IN ONE BASKET.

    “I MAKE $2000.00 A WEEK.”

    The promo later was deleted at Surf’s Up.

  • Court Gives Receiver Go-Ahead To Start Selling Property Tied To Alleged Trevor Cook/Pat Kiley Ponzi; Large-Screen TVs, Slot Machines To Be Auctioned

    UPDATED 4:06 P.M. ET (U.S.A.) A federal judge in the SEC and CFTC Ponzi scheme cases against Trevor Cook and Pat Kiley has paved the way for the receiver to begin selling property linked to the alleged $190 million scheme.

    Among the first items up for bid will be 12 large-screen televisions, two slot machines and a Craps table, according to court filings. The items were discovered at the Van Dusen mansion in Minneapolis and at a property in Burnsville, Minn.

    Receiver R.J. Zayed also wants to sell the mansion and the Burnsville property, and has begun the process of finding qualified professionals to assist. If court approval is gained for the sale of the real estate, it, too, will be auctioned, according to Zayed’s proposed plan.

    Cook, who had previous run-ins with CFTC over his business practices, is not cooperating with Zayed, according to court filings. Kiley is a former host on Christian radio. He is accused of pitching the scheme, which collapsed last year. The scheme’s alleged tentacles extended from the United States to Europe, and also to Panama.

    Zayed sought court approval earlier this week to sell the TVs and other items found at the Van Dusen mansion and the Burnsville property. Chief U.S. Chief District Judge Michael Davis now has issued an order, approving the sale.

    In addition to the large-screen TVs and gambling equipment, Zayed found 39 computer monitors with 22-inch screens; 19 monitors with smaller screens; 23 computers; a “keg cooler/tap”; a “Beertender dispenser”; a Karaoke machine; three shredders; and miscellaneous other equipment.

    Screen shot: Slice from receiver's filing on Cook/Kiley items up for sale.

    The alleged Cook/Kiley scheme has featured an assertion that Cook also bought a private island in Canada with proceeds from the scheme, and a submarine to access the island.

    One investor told the SEC that he’d heard Cook had purchased the two-person submarine on eBay for $40,000, but discovered the waters in Canada were too dark for the craft. Allegedly undeterred, Cook said he simply would move the sub to Panama on the belief its waters were clearer than Canada’s.