PatrickPretty.com

Author: PatrickPretty.com

  • EDITORIAL: Creeping Up On MLM Perdition

    EDITOR’S NOTE: The MLM “program” known as Wings Network is alleged to have operated through two business entities that used the name “Tropikgadget.” The SEC’s case, announced Friday, is filed in U.S. District Court for the District of Massachusetts. That’s the same venue in which the agency’s epic TelexFree case was filed last year.

    There can be no doubt — zero, none — that vulnerable immigrant populations in Massachusetts are being targeted in one MLM scheme after another. Speakers of Spanish or Portuguese may be particularly at risk. It’s also apparent that Asian, Haitian and African population groups are being targeted and that the risk is not unique to Massachusetts residents. The WCM777 “program,” for example, brushed through Massachusetts, where it was aimed at speakers of Portuguese and was stopped by the Massachusetts Securities Division in late 2013.

    When the SEC took down WCM777 in March 2014, the agency described the California-based “program” with possible conduits in the British Virgin Islands and Hong Kong as a “worldwide” pyramid scheme that targeted Asian and Latino communities. The circuitousness of the money flow and the bizarre narrative surrounding WCM777 were, in two words, deeply troubling.

    MSD also has squared off against a “program” known as EmGoldEx. In this scam, investors were promised returns of up to 1,105% and photos of children “getting paid” were used as lures to drive dollars.

    One of the Tropikgadget entities — Tropikgadget Unipessoal LDA — allegedly was set up in the Madeira Free Trade Zone in November 2013 and later abandoned. Madeira, whose largest city is Funchal, is a North Atlantic Portuguese archipelago slightly closer to continental Africa than continental Europe. It is worth pointing out that the SEC publicly thanked both Portugal’s securities regulator (Comissão do Mercado de Valores Mobiliários) and the office of Portugal’s Attorney General (Procuradoria-Geral da República of Portugal)  for assistance in the American probe.

    The other Tropikgadget entity — Tropikgadget FZE — appears to have been set up in Sharjah, United Arab Emirates, also in November 2013. Sharjah, on the Persian Gulf, is the UAE’s third most populous city, behind Dubai and Abu Dhabi, according to WikiPedia. The paper presence of these companies at geographic points on the North Atlantic and the Persian Gulf more than 4,300 miles away from each other and how they enlisted Massachusetts residents to do their bidding probably is a story unto itself, but it is a story for another day. What’s news today is that Wings Network was operating in Massachusetts at Ground Zero for TelexFree after the TelexFree action and, like TelexFree, is accused of  fleecing vulnerable immigrant populations.

    At least seven of the 12 charged Wings Network promoters had addresses in Marlborough, Mass. This is potentially important because TelexFree’s U.S. operations were based in Marlborough. TelexFree operated through various U.S. entities and a Brazilian entity known as Ympactus. Brazil-based TelexFree/Ympactus figure Carlos Costa has TelexFree business partners in Massachusetts, waved the flags of Madeira and Portugal in a 2013 TelexFree promo and invoked God in appeals to support TelexFree. Sann Rodrigues, a charged TelexFree promoter associated with an MLM entity known as iFreeX that also operated in Massachusetts and has come under scrutiny, has claimed “God” invented MLM and “binary.” Rodrigues, according to the SEC, is a recidivist pyramid-schemer.

    In one way or another, all of these “programs” have created a PR problem for MLM — this while Herbalife is squaring off against an FTC investigation and allegations by Bill Ackman that it is a pyramid scheme that targets vulnerable population groups.

    There’s also evidence that the Zeek Rewards “program” taken down by the SEC in 2012 targeted vulnerable people.

    **____________________**

    Funchal, Madeira, to Sharjah, UAE. Source: Google Maps.
    Funchal, Madeira, to Sharjah, UAE. Source: Google Maps.

    UPDATED 11:32 A.M. ET U.S.A. The SEC’s “Wings Network” case announced Friday is the latest example of the MLM world’s intolerable capacity to deceive. Though the facts alleged by the SEC are alarming, the action against two companies, three officers and 12 promoters is not an indictment of the trade. Indeed, the agency worked with the Direct Selling Association to expose one of the most mind-numbing lies.

    But you still have to wonder if MLM and network marketing in general are on the road to perdition. This is because the horrifying abuses and thematic lies that propped up Wings Network are so common across the larger MLM trade that one can be forgiven for wondering if targeting vulnerable population groups and institutionalizing prevarication is Rule No. 1.

    How DSA Got Involved In The Wings Network Case

    Adolfo Franco, the trade association’s executive vice president and chief operating officer, sits at the intersection of commerce and government affairs. He’s an old political hand and has worked as a Republican strategist and assistant administrator for Latin America and the Caribbean for the U.S. Agency for International Development (USAID). Franco wants the MLM industry to prosper, and he wants to make sure he has a wholesome story to tell in government corridors.

    Wings Network didn’t give him one, to be sure.

    You see, Wings Network is accused by the SEC of using the DSA’s name to sugarcoat a creeping, cross-border fraud scheme that ultimately gathered at least $23.5 million. What actually happened, according to the SEC and an affidavit prepared by Franco, is that DSA received an “e-mailed request”  for a DSA membership “application.” It then sent out the application, which was never returned. Not only was the application not returned, according to the affidavit, DSA never even heard back from Wings Network.

    What allegedly happened next will surprise no one who follows the bizarre dramas MLM has been serving up for the past several years. This simple request for a membership application was conflated by Wings Network and affiliates as an endorsement by DSA of Wings Network.

    By April 2014, according to the SEC, DSA became aware of this ribald deception. The association reacted by sending Wings Network a cease-and-desist letter, directing Wings Network and affiliates to stop claiming membership in DSA and stating point-blank that “any indication that Wings Network is a member of the DSA is fraudulent.”

    Multiple Layers Of Deception

    Could it get worse? Sure. Wings Network hucksters also are accused of duping participants into believing the “program,” which advertised guaranteed income, had the additional benefit of insuring them against loss.

    Anyone who’s been following the unbelievably noxious example of TelexFree can tell you that the same thing allegedly happened there. The same thing currently is happening in a “program” known as “MooreFund,” and it previously happened in the AdSurfDaily Ponzi scheme in 2008 broken up by the U.S. Secret Service.

    The MLM scammers look for a tiny kernel of truth and then wrap a lie around it: A “program” may have a bank account, for example. Money in the account may be insured by the FDIC in the event of a bank collapse.

    From this, the “programs” themselves and affiliates conflate a fantastically malignant construction by which no one can lose money because of the “insurance.” It is just a contemptible lie. It’s also one that has been bettered by new versions of the lie. These versions — as is the case with Wings Network,  TelexFree and MooreFund — hold that private insurers or even software companies such as Symantec have the companies’ backs and that these private insurers never would do business with a fraud scheme.

    Supplementing this lie are companion lies — advanced by Wings Network, TelexFree and others — that a business registration with a Secretary of State or equivalent agency domestically or overseas is proof that there is no underlying scam. (One need only to look at Bernard L. Madoff Investment Securities LLC to understand just how preposterous this type of lie is.)

    Here’s the thing: The type of lies advanced by Wings Network  are not unusual for “opportunities” using an MLM or network-marketing business model. DSA happened to be the victim of brand-leeching and runaway disingenuousness in this case, but other cases show it’s hardly alone. Even the names of the U.S. government and various U.S. agencies have been dropped in this fashion.

    Not even the “brands” of God and Jesus Christ are off-limits in the MLM sphere. Sometimes an asserted endorsement by a deity is supplemented by suggestions that living legends of entertainment and business have piled aboard a “program” train.

    This is a short summary of these tactics as employed by recent MLM or network-marketing schemes that either cratered on their own or collapsed after regulatory intervention. (Note: Some background information also appears in the summary):

    • WCM777. Operated by Ming Xu. Targeted people who spoke Spanish, Portuguese, English and Asian languages. Dropped names of God, “Yahweh,” Jesus Christ, Al Gore, Steve Wozniak, Sylvester Stallone, “Rocky,” Eric Garcetti, Siemens, Goldman Sachs, the Denny’s restaurant chain and many, many more famous companies.  (As many as 700.) Basic sales message: Send us money. Get rich. Estimated haul: $80 million in less than a year. Estimated number of victims: tens to hundreds of thousands.
    • TelexFree. Operated by James Merrill, Carlos Wanzeler and Carlos Costa. Largely targeted people in the United States and internationally who spoke Spanish, Portuguese and English. Global penetration at an almost unfathomable level. Appears to have created black market and back-alley economy in Massachusetts. Became subject of undercover investigation by the U.S. Department of Homeland Security. Dropped names of God, Jesus Christ, MLM Attorney Gerald Nehra, President Obama, Massachusetts Commonwealth Secretary William Galvin, the SEC, the U.S. Attorney General. Basic sales message: Send us money. Get rich. Estimated haul: $1.82 billion in about two years. Estimated number of victims: hundreds of thousands to more than 1.8 million.
    • Zeek Rewards. Operated by Paul R. Burks. Targeted people who spoke Spanish, Portuguese,  English and Asian languages. Global penetration at an almost unfathomable level. Affiliates targeted Christians. Dropped names of the Association of Network Marketing Professionals, MLM attorneys Gerald Nehra and Kevin Grimes, plus MLM consultants Keith Laggos and Troy Dooly. Basic sales message: Send us money. Get rich. Estimated haul: $897 million in less than two years. Estimated number of victims: hundreds of thousands. “Clawback” cases to return alleged ill-gotten gains may affect 10,000 or more affiliates.
    • eAdGear. Operated by Charles Wang and Francis Yuen. “Primarily” targeted “investors in the U.S., China, and Taiwan,” according to the SEC. Dropped names of Google, Yahoo, Target Corp., Lbrands (Victoria’s Secret), Avon, Sears, Nordstrom, eBay, QVC, HSN, J.C. Penney, Banana Republic, Dillard’s, Kohl’s, Macy’s, Amazon.com, Men’s Wearhouse, Kmart, New York magazine and many, many more. (As many as 253 brands were abused.) Basic sales message: Send us money. Get rich. Estimated haul: $129 million. Estimated number of victims: tens of thousands.)

    Wings Network now stands accused of targeting “many members of the Brazilian and Dominican immigrant communities in Massachusetts” in a combined pyramid- and Ponzi scheme that raised at least $23.5 million.

    If that sounds familiar, perhaps it is because the TelexFree “program” was accused last year by the SEC of doing the same thing in the same place. Like Wings Network, TelexFree reached across national borders to plunder investors. Recent filings by the court-appointed trustee in the TelexFree bankruptcy case — and these filings are subject to amendment in part because there are more than 1 trillion disparate data points involved in the reverse-engineering of TelexFree — list the “nature” of the company’s business as “pyramid scheme.”

    Other filings by Stephen B. Darr, the trustee, suggest that TelexFree gathered more than $1.8 billion in about two years of operation through a series of entities in the United States and an affiliate in Brazil known as Ympactus. The dollar volume alone is simply mind-boggling, more so when one considers the records so far denote “1,894,940 Participant names, spanning 35,110 pages.”

    Some readers who sift through the TelexFree material will need a name-pronunciation guide and a world atlas. TelexFree didn’t just mow down Americans. The records suggest, for example, that the “Embassy Of Nigeria P O Box 1019 Addis Ababa Ethiopia” has contacted Darr. One document lists “Baker Island,” which WikiPedia says is an uninhabited Pacific atoll tended to by the U.S. Fish and Wildlife Service, as the “country” of an investor.

    It is clear that TelexFree had investors (at least) in Argentina, Australia, Belarus, Belgium, Bolivia, Cambodia, Canada, Chile, China, Colombia, Croatia, Cyprus, Dominican Republic, Ecuador, Egypt, El Salvador, France, French Polynesia, Germany, Ghana, Guatemala, Honduras, Hong Kong, Hungary, India, Indonesia, Ireland, Italy, Japan, Jordan, Kenya, Lebanon, Luxembourg, Malaysia, Mexico, Moldova, Netherlands, New Zealand, Nigeria, Norway, Paraguay, Peru, Philippines, Poland, Portugal, Puerto Rico, Qatar, Romania, Russia, Rwanda, San Marino, Serbia, Singapore, South Africa, Spain, Sweden, Switzerland, Taiwan, Tanzania, Thailand, Togo, Turks and Caicos, U.S. Virgin Islands, Uganda, Ukraine, United Arab Emirates, United Kingdom, United States, “Unknown” country, Uruguay, Uzbekistan and Venezuela.

    MLM in this form is “fraud creep” running wild. It is posing dangers to individual participants, including those who can ill afford to take a financial hit. Beyond that, it is posing a danger to the U.S. financial infrastructure.

    Economic security is national security, friends. These MLM HYIP “programs” pose an untenable security threat. Many of them are shrouded in multiple layers of mystery.

    DSA Needs To Do More

    It is good to see that the DSA worked with the SEC on the Wings Network case. It would be better yet if the organization studied why so many MLM HYIPers appear to move from fraud scheme to fraud scheme to fraud scheme.

    Where did these people start their “MLM journeys?” Did they start at, say, Herbalife or Amway after buying into the dream and the attendant hype? And did they get churned by those “traditional” MLMs, only to become shark bait for the HYIPs?

    With so many of the scams selling the message that it’s nearly impossible to make money in “traditional” MLMs and that 97 percent of people who latch onto the MLM dream of riches emerge as losers or highly vulnerable treaders of water in rough seas, isn’t it time for those traditional MLMs to question whether they are creating the refugees and providing the training for the targeting?

    Herbalife is not an HYIP. But it sells a dream and has a high burn rate. The most recent scheme to sell against traditional MLM is “Achieve Community,” taken down by the SEC last month.

    Achieve promoters even cited “the 97 percent” as part of an overall theme that was well beyond bizarre, up to and including the recording of a commercial that used nearly six minutes of footage from the SEC’s website and practically dared the agency to investigate Achieve and other HYIPs.

    Whether or not “the 97 percent” claim is precisely true is immaterial. What’s material is the ready availability of vulnerable population groups and refugees from “traditional” MLMs.

    TelexFree even may have channeled Herbalife, calling its cheerleading sessions “extravaganzas” and latching onto the sport of soccer.

    Stemming this hurtful tide should be a top priority at DSA. The wave of scams is not docile. It very well might be eroding protective shores in violent fashion and creeping up on the road to perdition.

  • URGENT >> BULLETIN >> MOVING: SEC Calls ‘Wings Network’ A ‘Ponzi And Pyramid Scheme’; Firms, Executives And A Dozen Promoters Charged

    wingsnetworkURGENT >> BULLETIN >> MOVING: (14th update 3:19 p.m. ET U.S.A.) The U.S. Securities and Exchange Commission has gone to federal court in Massachusetts, alleging the “Wings Network” MLM “program” is a Ponzi and pyramid scheme that gathered at least $23.5 million.

    Wings Network purported to offer “digital and mobile solutions to customers, including apps and cloud storage.”

    “However, Wings Network’s revenues actually came solely from selling memberships to investors, not from the sale of any products,” the SEC said.

    Company operators and at least 12 promoters have been charged, the SEC said. A federal judge has ordered an asset freeze. Some of the SEC employees involved in the prosecution of the Wings Network action also are involved in the TelexFree Ponzi- and pyramid case filed last year in Massachusetts federal court.

    “Although Wings Network purported to use a multi-level distribution network to sell products and services, it had little or no revenue from the sale of those products or services,” the SEC charged. “Instead, to the extent that it and its members obtained revenue, that revenue was derived from the recruitment of new members. In fact, its own procedures made it clear that members were not required to sell products to receive promised profits – simply recruiting other members to purchase membership packs was enough.”

    The SEC also charged that Wings Network last year falsely implied that it had a “relationship” with the Direct Selling Association, a trade association for MLM firms. But when the DSA “compliance monitoring team became aware that Wings Network was claiming membership, the DSA sent Wings Network a cease and desist letter to stop representing that DSA had any connection with Wings Network.”

    Charged Wings Network entities include Tropikgadget Unipessoal LDA and Tropikgadget FZE. The LDA entity was incorporated in the Madeira Free Trade Zone in November 2013 with its principal place of business in Lisbon, Portugal, the SEC said.

    “It withdrew its license from the Madeira Free Trade Zone in April 2014,” the SEC said.

    The FZE entity “incorporated in the United Arab Emirates in November 2013 with its principal place of business in Lisbon, Portugal,” the SEC said. “Tropikgadget FZE holds the rights to Wings Network marketing and brand services, which includes but is not limited to, the names Wings Network, Wingsnetwork, and WingsNetwork.Com.”

    Charged executives and/or operators include Sergio Henrique Tanaka, 40, of Sao Paulo, Brazil, and Davie, Fla.; Carlos Luis da Silveira Barbosa of Lisbon, Portugal; and Claudio de Oliveira Pereira Campos, also of Lisbon. No ages were given for Barbosa and Campos.

    Meanwhile, the charged promoters include Yinicius Romulo Aguiar, 42, of Marlborough, Mass.; Thais Aguiar, 34, the wife of Yinicius and also of Marlborough; Andrew Elliot Arrambide, 47, of Sandy, Utah; Julio G. Cruz, 34, of Duluth, Ga.; Wesley Brandao Rodrigues, 28, of Marlborough; Dennis Arthur Somaio, 35, of Marlborough; Elaine Amaral Somaio, 35, of Marlborough; Pablo Andres Garcia, 38, of Waco, Texas; Viviane Amaral Rodrigues, 37, of Clinton, Mass.; Simonia De Cassia Silva, 43, who sometimes operated from Massachusetts and Florida; Geovani Nascimento Bento, 41, of Marlborough; and Priscila Bento, 36, of Marlborough.

    Named relief defendants as the alleged recipients of ill-gotten gains from the scam were Uninvest Financial Services Corp. of Deerfield Beach, Fla.; Compasswinner LDA of Setubal, Portugal; and Happy SGPS SA of Santa Cruz, Madeira, Portugal.

    “After establishing a network of lead promoters, recruitment of new members surged through the use of social media such as Facebook and YouTube,” the SEC said. “The promoters used Facebook to publicize ‘business meetings’ that took place at hotels and other locations in Connecticut, California, Florida, Massachusetts, Pennsylvania, Texas, Georgia, and Utah. The promoters also set up storefronts or ‘training centers’ to lure investors into attending Wings Network presentations. For example, one promoter used a storefront in downtown Philadelphia to make presentations to prospective investors, and another promoter rented office space in Pompano Beach, Fla., and spread the word in the local Latino community to attract prospective investors to come in and hear presentations.”

    The scheme raised at least $23.5 million and targeted “many members of the Brazilian and Dominican immigrant communities in Massachusetts,” the SEC said.

    Massachusetts Commonwealth Secretary William Galvin, head of the Massachusetts Securities Division, charged Wings Network and some individuals last year. Both Galvin and the SEC have squared off against TelexFree, a massive scheme targeting immigrant communities.

    In a statment today, the SEC thanked MSD and Comissão do Mercado de Valores Mobiliários of Portugal and the Procuradoria-Geral da República of Portugal.

    Here are the alleged hauls or alleged qualifying criteria in the pay plan for some of the charged promoters, according to the SEC:

    • Yinicius Romulo Aguiar, “at least $1 ,302,880.”
    • Andrew Elliot Arrambide allegedly reached the “Director” rank, “indicating that he had accumulated at least $6 million from investors.”
    • Julio G. Cruz also achieved the Director rank, “indicating that he had accumulated at least $6 million from investors.”
    • Wesley Brandao Rodrigues allegedly achieved the “Senior Manager rank, “indicating that he had accumulated at least $1.5 million from investors. According to Tropikgadget records, Wesley Rodrigues generated commissions of $791,745 from the sale of Wings Network membership packages.”
    • Elaine Amaral Somaio. “According to Tropikgadget records, Elaine Somaio generated commissions of $557,240 from the sale of Wings Network membership packs.”
    • Pablo Andres Garcia. “According to Tropikgadget records, Garcia generated commissions of
      $550,135 from the sale of Wings Network membership packs.”
    • Viviane Amaral Rodrigues. Allegedly reached the Director rank, “indicating that she had accumulated at least $6 million from investors. According to Tropikgadget records, Viviane Rodrigues generated commissions of at least $434,150 from the sale of Wings Network membership packs.”
    • Simonia De Cassia Silva. “According to Tropikgadget records, Silva generated commissions of $419,900
      from the sale of Wings Network membership packs. She temporarily moved and used an office space in Pompano Beach, Florida where she and Vinicius Aguiar promoted Wings Network locally.”
    • Geovani Nascimento Bento. “According to Tropikgadget records, Geovani Bento generated commissions of $163,845 from the sale of Wings Network membership packs.”

    False Claims Of Insurance Coverage

    Perhaps mirroring a TelexFree trick in Brazil, Wings Network hucksters also are accused of duping members into believing their payments were insured. From the SEC complaint (italics/carriage returns added):

    Campos, Viviane Rodrigues, Vinicius Aguiar, and other promoters represented to prospective investors that their initial investments in the Member Packs would be 100% guaranteed through insurance issued by Porto Seguro, the fourth-largest insurance company in Brazil.

    In making these claims, Campos, Viviane Rodrigues and Vinicius Aguiar pointed to the existence of Porto Seguro S.A. insurance associated with the Wings Card, a debit card issued to Wings Network members for payment processing.

    In a You Tube video that solicited investors to purchase Wings Network memberships, Campos guaranteed that everything purchased by the investors would be insured for a year by Porto Seguro. In their presentations to investors, Rodrigues and Aguiar emphasized that the investments were guaranteed while juxtaposing the Porto Seguro logo. Viviane Rodrigues and Vinicius Aguiar also included a slide purportedly of a Porto Seguro insurance policy.

    False claims of insurance coverage are somewhat common in the fraud sphere and may be occurring now in an emerging “program” known as “MooreFund.”

    Read the SEC statement on Wings Network and the complaint.

    On Feb. 12, the SEC charged a “program” known as the “Achieve Community” with operating a combined pyramid- and Ponzi scheme. Some Achieve promoters appear now to be promoting MooreFund.

  • Woman Listed As ‘Winner’ In Zeek Rewards Scheme Asks Court For Help In Getting Back ‘Achieve Community’ Money, Raises Questions Over 1099 Form

    achieveinvestor
    From U.S. court files. Redactions by PP Blog.

    EDITOR’S NOTE: This story was updated at 6:35 a.m. on Feb. 27.

    **______________________**

    It happened in the Zeek Rewards pyramid- and Ponzi case in 2012 — and now it has happened in the “Achieve Community” case filed earlier this month.

    A woman has contacted the court presiding over the Achieve case to solicit help in getting back her money. The six-page filing by Arla Mendenhall, who identified herself as an Achieve investor, further questions how Achieve treated her for tax purposes.

    A similar situation at Zeek, according to court filings, led to a 2014 criminal charge of tax-fraud conspiracy against Zeek operator Paul R. Burks. Prosecutors alleged that Burks failed to file corporate tax returns and accused him of issuing “fraudulent IRS Forms 1099s, causing victim-investors to file inaccurate tax returns for phantom income they never actually received.”

    Mendenhall claimed in a communication to the court presiding over the Achieve case that she received a 1099 that asserted she was paid $6,000 by Achieve, even though “I only withdrew $800.00.”

    The remaining $5,200 was “reinvested in the business,” she advised the court.

    All in all, Mendenhall contended she plowed $8,450 into Achieve.

    Records in the Zeek case list her as a “winner” of a Zeek sum in excess of $1,000, meaning she’s a defendant in a class-action clawback case filed by Zeek receiver Kenneth D. Bell in 2014. Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina granted class certification earlier this month.

    Bell previously has raised concerns about “serial” promoters in MLM/network-marketing schemes.

    Separately, posters at the RealScam.com antiscam forum have linked Mendenhall to cash-gifting schemes such as The People’s Program and Blessing Gold Club.

    In 2013, the PP Blog reported that certain Blessing Gold Club promoters were promoting Better-Living Global Marketing and its Zeek-like Bidders Paradise arm. BLGM purportedly operated offshore, giving rise to questions about whether U.S. members involved in Zeek later had moved to a new venue in an effort to continue to pick fruit from a poisonous tree.

    BLGM reportedly now is under criminal investigation in Hong Kong.

    On Feb. 12, U.S. District Judge Robert E. Blackburn of the District of Colorado froze Achieve Community assets after the SEC contended Achieve was a pyramid- and Ponzi scheme that had gathered more than $3.8 million.

    “I had no knowledge of anything illegal when I joined this Business,” Mendenhall said in her filing today.

    Much of the information submitted by Mendenhall appears to have originated in her Achieve Community back office.

    Alleged Achieve operators Troy Barnes and Kristi Johnson have invoked their Fifth Amendment right not to incriminate themselves in the SEC’s civil case. Barnes has claimed he faces a criminal investigation.

    NOTE: Our thanks to the ASD Updates Blog.

  • BULLETIN: ‘MooreFund,’ A Ponzi-Board HYIP ‘Program’ Pushed By Achieve Community Huckster, Is Using Unauthorized Security Seal From Norton

    moorefundBULLETIN:  (Updated 8:17 a.m. ET Feb. 25 U.S.A.) An HYIP “program” that operates at MooreFund.com is using a “Norton Secured” seal that is not authorized, Symantec told the PP Blog late this afternoon.

    Symantec, owner of the famous Norton brand, is a software and computer-security company. Its name is misspelled as “Symentec” on the FAQ page of MooreFund in an awkwardly worded passage that plants the seed Symantec and other security firms are providing deposit insurance.

    Under a subhead that reads “How can I be sure that Moore Fund is licensed and safe,” the MooreFund site claims (italics added/verbatim):

    Moore Property Investment Co Limited is registered in United Kingdom and verified by Worlds most popular security insurance company like Symentec-Norton (veriSign), Comodo and TRUSTe. MOORE PROPERTY INVESTMENT CO LIMITED holds a website identity assurance warranty of $1,750,000. This means that you are insured for up to $1,750,000 when relying on the information provided by IdAuthority on this site. US Patent Number 7,603,699.”

    The PP Blog contacted Symantec after observing a YouTube promo today for MooreFund by Achieve Community huckster Rodney Blackburn. The Blog also contacted the U.K.’s Financial Conduct Authority because MooreFund purports to operate from the United Kingdom through Moore Property Investment Co Ltd. FCA, closed for the evening, did not immediately respond to a request for comment.

    Update 8:17 a.m. ET Feb. 25 U.S.A. Chris Hamilton, a spokesperson for FCA, declined this morning to comment specifically on MooreFund. Hamilton added, however, that “the FCA is one of a number of organisation that does investigate, and prosecute, Ponzi schemes. The other UK authorities include the Police and the Serious Fraud Office.” (Original story continues below . . .)

    “They have insurance to cover . . . so, it helps you to feel, you know, more peace of mind in getting into an investment like this,” Blackburn says in his video for MooreFund. The 13:11 production is dated today and titled, “Moore Fund- Rodney’s Review on this HYIP.”

    Blackburn also advised MooreFund registrants to place banner ads for the “program” on other HYIP sites. In what might be a troubling trend, HYIP schemes recently have been publishing ads for other HYIP schemes, a development that suggests tainted proceeds are circulating among any number of scams.

    Achieve Community, which was charged by the U.S. Securities and Exchange Commission on Feb. 12 with operating a Ponzi- and pyramid scheme that had gathered more than $3.8 million, permitted members to place banner ads for other “programs.”

    Like Achieve, MooreFund has a presence on well-known Ponzi-scheme forums such as MoneyMakerGroup and TalkGold. The “program” purports to offer four investment plans. These promise absurd daily interest rates of between 1.5 percent and 3 percent, with “compounding” available on three of the four plans and tiered recruitment commissions offered on all four.

    Investors, according to the website, may send in sums from $15 to $99,999, a circumstance that suggests MooreFund is operating both a micro and macro scam.

    MooreFund claims its accepts Bitcoin. It also claims prospects can send money via Western Union, bank wire and a range of processors, including well-known fraud enablers such as SolidTrustPay, Perfect Money and EgoPay.

    The site includes a number of awkward passages in English such as “Fill up the form to make a new deposit,” “Sometime website is down due to ongoing maintenance work,” “You just have to contact the support department and ask for cancelling your investment” and “MooreFund minimizes risk level by offering deposit insurance system.”

    This is the supposed insurance (italics added/verbatim):

    Plan Beginner – 99.99% of the funds are insured
    Plan Pro – 75% of the funds are insured
    Furthermore, You can cancel and refund your money anytime between first 7 days of your deposit.

    Using a calculator on the MooreFund site, Blackburn asserts that by compounding his $500 deposit over the course of a year, he’ll emerge with $53,721.54.

    “Guys, that is a nice little nest egg right there,” he says.

  • BULLETIN: Troy Barnes, Kristi Johnson Invoke 5th Amendment In SEC’s Pyramid/Ponzi Case; Barnes Tells Agency He Is ‘Target’ Of Criminal Investigation; SEC Says Barnes ‘Discussed’ Moving ‘Victim Funds’ Outside Of United States

    achievelogoBULLETIN: “Achieve Community” Ponzi/pyramid defendants Troy Barnes and Kristi Johnson have informed the U.S. Securities and Exchange Commission that they have invoked their Fifth Amendment right not to incriminate themselves in the agency’s civil case.

    A deposition scheduled for Barnes Feb. 20 in Detroit was canceled. So was a deposition set for Johnson today in Denver.

    Barnes, according to the SEC, advised the agency in an email that he consulted with an attorney and understands he is the “target of a criminal Investigation involving many of the same issues” before the SEC.

    “If Deposed, I intend to take the Fifth Amendment in any and al[l] ongoing investigations Including Kristine Johnson, Work With Troy Barnes Inc. And The Achieve International LLC,” Barnes wrote.

    Achieve allegedly operated through Work With Troy Barnes. Achieve International allegedly received ill-gotten gains from the fraud.

    Precisely who is representing Barnes is unclear. Johnson is represented by David A. Zisser, a veteran securities attorney.

    In court filings today, the SEC said it had learned Barnes “has discussed moving victim funds in this matter outside of the United States in a manner that would make recovery for the benefit of investors particularly difficult or impossible.”

    When and with whom Barnes allegedly discussed moving the money are unclear. The SEC said today that, as a result of the asset freeze imposed Feb. 12 in the Achieve case, it has frozen more than $2.5 million.

    Johnson, the agency alleged, “withdrew approximately $80,000 in TAC investor funds in cash from a TAC-related account or accounts” on Feb. 6, six days before the agency brought its fraud complaint and a judge imposed an asset freeze.

    Although both Barnes and Johnson have stipulated to the entry of a preliminary injunction in the SEC case, Work With Troy Barnes Inc. and Achieve International LLC have not.  A hearing is set for tomorrow in Colorado.

    If the corporate entities do not appear, the SEC said in court filings, the agency intended to ask a judge to extend the injunctions to the companies. And if the judge wanted to hear testimony, the agency said it has “two witnesses who are not local to Colorado, but rather reside in Washington, D.C. and North Carolina, respectively.”

    These unidentified individuals could testify by telephone, the agency said.

    NOTE: Our thanks to the ASD Updates Blog.

  • SPECIAL REPORT: How The SEC Silently Squared Off Against ‘Achieve Community’ In The Days Leading Up To The Asset Freeze

    EDITOR’S NOTE: The personnel information in the first section below is gleaned from public records in the SEC’s pyramid- and Ponzi case against the “Achieve Community” and alleged principals Kristi Johnson and Troy Barnes. Some of the numbered points include additional notes by the PP Blog. These notes are based on public records or information in the public domain, including a Feb. 18 statement by the SEC.

    **___________________**

    achieveexhibitdThe U.S. Securities and Exchange Commission announced on Feb. 18 it had filed a pyramid- and Ponzi complaint that alleged securities fraud against “Achieve Community” and that a federal judge had granted an emergency asset freeze.

    Supporting documents filed by the SEC paint a picture of significant legwork that took place at the agency as it studied how Achieve had evolved from its alleged start in April 2014 through the days immediately prior to the freeze. This column focuses on human assets, the public servants who played a role in stopping the harm caused by Achieve by applying their individual specialties.

    The SEC assigned (at least) the following individuals to the case prior to filing a complaint under seal against Achieve and requesting an emergency asset freeze on Feb. 12:

    1.) An IT specialist assigned to the Division of Enforcement in Washington, D.C. This person performed website/video-capture duties involving public sections of two Achieve sites (TheAchieveCommunity.com and ReadyToAchieve.com) and at least one YouTube video. (Longtime readers will recall the 2012 Zeek Rewards probe that led to spectacular allegations of pyramid-and Ponzi fraud also involved website capture.)

    2.) A senior paralegal employed by the Division of Enforcement and assigned to the SEC’s Denver Regional Office. This person reviewed and transcribed 11 Achieve-related public video files and one public audio file. Some of the video files were on the Achieve sites. Others were on YouTube. The audio file was on the Achieve site.  (A segment of a transcript shown a federal judge from the audio file shows “Rodney” serving up softball questions to Kristi Johnson and Troy Barnes, Achieve’s accused operators. The segment was on the topic of Achieve’s purported “triple algorithm.” It is referenced in “Exhibit D.” The screen shot that introduces this column is from a pdf of Exhibit D. More from Exhibit D appears in the form of a screen shot below.)

    3.) An attorney/investigator employed by the Division of Enforcement at the SEC’s Denver Regional Office. This attorney reviewed web sources of information on Achieve, bank statements and source material provided by Achieve vendors, including FirstBank and Payoneer. He filed a 28-page declaration in advance of the asset freeze. This document distilled key pieces of evidence from Achieve sales pitches and financial records, calculating that investors had directed at least $3.829 million to Achieve and that Johnson and Barnes had taken “a minimum” of $336,975 “of investor funds.” (That’s roughly 9 percent, a circumstance that suggests Achieve’s Ponzi was digging a deeper and deeper hole.)

    4. Two other SEC attorneys assigned to the Denver office. These attorneys brought the 17-page complaint against Achieve that alleged Achieve had “no legitimate business operations” and that “the sole source of repayments to earlier investors is funds contributed by newer investors.” (Though not referenced on the court docket of the Achieve case, the SEC, in a Feb. 18 public statement, confirmed a fourth agency attorney is involved in the probe.)

    5. An SEC staff accountant employed by the Division of Enforcement and assigned to the Denver office. This person has been with the SEC for 20 years and examined and summarized records from at least five Achieve-related bank accounts, including “underlying detail” such as account-opening forms, statements, checks, wire transfers and deposit slips. (No criminal wrongdoing has been alleged and it is unclear if a criminal investigation is under way, but this information shows that the SEC, in part, halted Achieve the same way Internal Revenue halted Al Capone: with an accountant’s skill and experience in understanding numbers and tracking money flow. The same SEC accountant was involved in the memorable prosecution of recidivist con man Larry Michael Parrish, accused in 2011 of going to a Colorado hospital room to swindle a man dying of cancer.)

    6. An SEC financial economist who holds a Ph.D in economics from the Massachusetts Institute of Technology. (This individual also studied in Chile and the Dominican Republic. She is a native speaker of Spanish, is fluent in English and also understands French. Based on her CV, I wouldn’t describe her as a secret weapon. But I do note that her international experience in areas that know poverty is a bonus, given that so many HYIP/Ponzi-board scams are targeted at people of limited means or people desperate for a positive economic result. Her MIT dissertation was titled, “Essays on Entrepreneurship” and was based in part on “survey data on the portfolios of U.S. families to study the tightness of borrowing constraints for entrepreneurs.” This may be important in context, because some Achievers already are making the absurd claim the SEC stands in opposition to entrepreneurship. One Achiever has claimed the agency’s Achieve action was a “systemic destroy tactic.” The same person has suggested the 9/11 terrorist attacks were a “false flag set up,” repeating a conspiracy theory that bizarrely accompanies just about any action that U.S. government takes against an HYIP scheme.)

    Friends, Ponzi schemes are fraud per se — that is, they exist for no other reason than to commit fraud by theft. In the Internet Age in the network-marketing sphere, they have become organized schemes to defraud that are capable of involving thousands, hundreds of thousands or even millions of people. There is no such thing as a benevolent Ponzi scheme or a Ponzi scheme with “good intentions.”

    Creating legions of victim-investors is only part of the problem.

    The SEC’s supporting documentation suggests Achieve itself polluted the commerce stream at at least nine points of contact: three banks, one credit union, four payment processors and one brokerage firm. This number does not take into account the fact that some Achieve participants were issued debit cards onto which their “earnings” were loaded, thus putting any number of financial institutions in the position of becoming either dispensaries or warehouses for fraud proceeds.

    At least one Achieve promoter recorded a video of himself offloading Achieve money at an ATM in Hawaii. The SEC says bank records indicate Johnson gave $10,000 to a church, a circumstance that suggests the church came into possession of tainted funds.

    Prior to filing the Achieve action, the SEC says in supporting filings, the agency did not contact “any” Achieve investors. Nor did it subpoena Achieve for information or personally view information in the private areas of Achieve’s websites.

    Why not?

    Because there was a “need to not alert Defendants of the investigation,” the SEC said in supporting materials. Beyond that, the agency said, “if investors were alerted to the SEC’s investigation, they would quickly disseminate that information to other TAC investors, as well as Defendants, which could risk additional dissipation or misappropriation of investor funds.”

    An Outtake From The Paralegal’s Transcription

    Image source: U.S. court filings.
    Image source: pdf from U.S. court filings by the SEC.

    The next section of the PP Blog’s Special Report seeks to anticipate and then answer questions Achieve members may have. The answers are gleaned from supporting documents the SEC provided a federal judge as part of the process of bringing the Achieve complaint and seeking an emergency asset freeze. This section includes some commentary/analysis by the PP Blog.

    Q: When did the SEC open its investigation into Achieve?

    A: At least by January 2015. The specific date is unclear.

    Q: Did the SEC receive tips about the operations of Achieve?

    A: Yes. The number of tips and the identities of persons who provided them are not disclosed.

    Q: Prior to the Feb. 12 asset freeze, did Achieve know it was under investigation by the SEC?

    A: The agency said it did not advise Achieve of the probe. However, Kristi Johnson knew at least by Jan. 13 that the Colorado Division of Securities, the state-level regulator, was asking questions about Achieve, according to the SEC. On that date, the Division learned in an “interview” with Johnson that Achieve did its banking at FirstBank. The Division shared this information with the SEC. By Feb. 2, the SEC had obtained Achieve’s banking records. The SEC accountant then began to examine the records, sharing information with the SEC attorney/investigator.

    Moreover, the SEC has alleged Johnson is a former “registered representative.” With experience in the securities industry and with Achieve already under investigation by a state regulator, Johnson must have contemplated that the SEC was hot on the Achieve trail. The SEC alleges she lives in Aurora, Colo. That’s only about 25 minutes away from the agency’s regional headquarters in Denver. It goes without saying that the SEC is particularly unfriendly to Ponzi schemes, perhaps particularly ones operating in its own back yard.

    Q: Why the asset freeze?

    A: Direct quote from SEC filings: “In light of the egregiousness of Defendants’ conduct, the ongoing and active Ponzi scheme, Defendants’ increasingly desperate attempts to make Ponzi payments and misappropriate investor funds, and the concern that Defendants will dissipate or misappropriate the remaining investor funds if they become aware of this action prior to the entry of the requested order, the Commission respectfully requests that the Court grant ex parte relief freezing the assets of Defendants and Relief Defendant, prohibiting them from soliciting additional investors or otherwise continuing their fraudulent scheme, and ordering other relief to ensure a prompt, fulsome, and fair hearing on Plaintiff’s motion for a preliminary injunction.

    “Absent an order granting such emergency ex parte relief, there is no reason to think Defendants’ fraudulent scheme, and their misappropriation and dissipation of the remaining investor funds, will cease, or that there will be any funds available to compensate investor victims at the conclusion of this litigation.”

    Q: What did the SEC accountant discover?

    A: Plenty, including banking records pertaining to this Achieve International LLC check for $90,000 made achievecjcheckpayable to “Cash” on Jan. 8, 2015. (Note: The check is dated Jan. 8, 2014, but that’s a new-year mistake. The banking records themselves note the correct date. The black redactions appear in a pdf of an SEC evidence exhibit. The PP Blog added the red redaction in this screen shot from the pdf. The $90,000 allegedly ended up in Kristi Johnson’s personal account at the Credit Union of Colorado.)

    An SEC attorney/investigator who reviewed the accountant’s work across multiple Achieve-related bank accounts alleged in a declaration to the court that the “bank records indicate that on at least thirteen occasions, Johnson went to a FirstBank branch and withdrew cash in the form of currency, or cash in the form of a check written to ‘cash.’  Virtually all of thee funds ended up in an account at the Credit Union of Colorado . . . that is Johnson’s personal account.” Such transactions involved $153,300.

    Q: Will I get my money back or a percentage of it from Achieve?

    A: Possibly. How that would occur is unclear. No receiver has been appointed. The SEC investigation is ongoing.

    Q: Will Achieve “winners” be treated like Zeek Rewards “winners” — i.e., sued for return of the funds?

    A: Too soon to tell. The SEC investigation is ongoing. An ongoing investigation sometimes means an amended complaint or additional complaints will be filed that names additional defendants or “relief defendants” — those in alleged possession of ill-gotten gains.

    Q: I’ve read online that the best practice with these programs is to throw in my stake with affiliates promoting them on YouTube and Facebook. These purported experts also say not to risk more than I can afford to lose and to quickly remove my “seed money” to create a situation that I’m only playing with “house money” — “profits” from the scheme. What am I to believe?

    A: Believe the SEC and FINRA. They have been warning about fraud schemes that use social media for years. The receiver in the Zeek Rewards case has raised concerns that “serial” promoters are moving from one fraud scheme to another. At least four promoters of the TelexFree scheme have been charged with securities fraud by the SEC.

    NOTE: Our thanks to “NikSam” at RealScam.com and to the ASD Updates Blog.

     

     

     

  • BULLETIN: ‘Trinity Lines,’ A ‘Program’ Pushed By ‘Achieve Community’ Huckster Rodney Blackburn, Goes Missing After Targeting People Of Faith

    From a Jan. 4 promo for Achieve Community by Rodney Blackburn that included a pitch for "Trinity Lines."
    From a Jan. 4 promo for Achieve Community by Rodney Blackburn that included a pitch for “Trinity Lines.”

    BULLETIN: (2nd Update 2:35 p.m. ET U.S.A.) A Ponzi-board “program” known as “Trinity Lines” that was targeted at people of faith and was pushed by “Achieve Community” huckster Rodney Blackburn has gone missing.

    The domain name now resolves to a GoDaddy page, despite claims from Trinity Lines just two days ago that “[e]xciting times are coming for us” and that a “PURCHASE PARTY” would be held today.

    A post dated today and attributed to Trinity Lines on the MoneyMakerGroup Ponzi forum claims the “program” folded because of “the current circumstances that are surrounding Trinity Lines and the attacks, abuse and threats that is being aimed at both the admin and the owner.”

    Precisely who is operating Trinity Lines never has been clear.

    The news appears first to have been reported on the RealScam.com antiscam forum.

    Achieve Community and alleged operators Kristi Johnson and Troy Barnes were charged last week with securities fraud in a complaint filed under seal. The SEC said Achieve was a combined pyramid- and Ponzi scheme. The complaint was made public this week.

    Among other things, Trinity Lines claimed to be the purveyor of “high quality scriptural vignettes.” It also claimed:

    • “Although this opportunity is geared for those who appreciate the Scriptures, we welcome anybody to join our community.”
    • “We at Trinity Lines do believe in God and believe in the power of ‘His Word.’”

    Trinity Lines was mentioned by Blackburn in a January video in which he used about six minutes of footage from the SEC website in a curious bid to sanitize schemes he was promoting. The SEC last month declined to comment on the Blackburn production.

    “We’re leaving the markets of these crazy MLM companies, and there are people like the Achieve Community, Trinity Lines, Unison Wealth, many of these other companies are coming out,” Blackburn said in the promo. “And they are making programs that are very simplistic, they’re passive, they’re residual incomes. They’re just so simple you just kind of put your money down.”

  • BULLETIN: Zeek Receiver Sues Alleged ‘Winners’ In Norway

    breakingnews72BULLETIN: (5th update 8:31 p.m.) Zeek Rewards receiver Kenneth D. Bell has sued more than a dozen alleged “winners” with residencies in Norway. These are believed to be the first cases against defendants in Europe. Bell previously has sued U.S. residents and residents of Australia, New Zealand, Canada and the British Virgin Islands.

    As is the case against other clawback targets, Bell contends Norwegian defendants must return their Zeek hauls because they “won” money from victims “in an unlawful combined Ponzi and pyramid scheme.”

    The alleged Norwegian defendants were identified as:

    • Geir Vidar Pleym, Oslo, $256,917.29.
    • Roger Guldahl, Halden, $200,271.51.
    • Anne Liv Dale, Kristiansand, $158,896.14.
    • Fredrik Skjoldt, Oslo, $97,694.27.
    • Robert Ulvberget, Elverum, $72,569.11.
    • Stian Alexander Karlsen, Oslo, $65,000.94.
    • Pia Cecilie Fore, Heggedal, $62,115.13.
    • Knut Fore, Asker, $60,436.49.
    • Fredrik Harald Skjoldt, Oslo, through CMS Huset AS, an alleged shell company, $57,586.54. (Note: “individually or collectively with Morten Skaar.”)
    • Morten Skaar, Oslo, through CMS Huset AS, $57,586.54.
    • Odd Steinar Nordlien, Faaberg, Lillehammer, $55,019.09.
    • Anne-Mette Helland, Mandal, through Vita-min AS, an alleged shell company, $53,428.51.

    Zeek is alleged to have gathered on the order of $897 million in less than two years of operation. It was shut down by the SEC in August 2012.

    The case against the Norwegian defendants is filed in U.S. District Court for the Western District of North Carolina.

    Just yesterday the SEC announced it had charged a “program” known as “Achieve Community” with operating a combined pyramid- and Ponzi fraud that had gathered more than $3.8 million in less than a year of operation. No receiver has been appointed in that case, which remains under investigation.

    NOTE: Our thanks to the ASD Updates Blog.

  • URGENT >> BULLETIN >> MOVING: SEC Charges ‘Achieve Community,’ Troy Barnes, Kristi Johnson; Federal Judge Approves Asset Freeze

    achievecomplaintURGENT >> BULLETIN >> MOVING: (17th update 3:07 p.m. ET U.S.A.) The U.S. Securities and Exchange Commission has charged “Achieve Community” (as Work With Troy Barnes Inc.) and alleged operators Troy A. Barnes and Kristine L. Johnson with operating a combined pyramid- and Ponzi scheme that raised more than $3.8 million. A federal judge in Colorado has ordered an asset freeze and granted a temporary restraining order.

    “Johnson and Barnes allegedly claim to be operating a successful investment program when in fact they are taking funds from new investors to pay phony profits to earlier investors,” said Julie Lutz, director of the SEC’s Denver Regional Office.

    Achieve’s internal structure is part of the probe.

    “Johnson is one of the two founders of TAC, and handles the majority of TAC’s finances,” the SEC charged. “Johnson is an authorized agent of WWTB and has acted as the sole signatory on at least three bank accounts that she opened in the name of WWTB.”

    Meanwhile, the Colorado Division of Securities confirmed minutes ago that it was working with the SEC on the Achieve probe.

    “We continue to have our own open investigation regarding possible violations of the Colorado Securities Act,” said Lillian Alves, Colorado’s Deputy Securities Commissioner. “The factual basis of our investigation parallels that of the SEC case.”

    In a 17-page complaint that was filed under seal on Feb. 12, the SEC described the Achieve Community as a “pure Ponzi and pyramid scheme” whose revenue “has consisted entirely of investor-contributed funds.”

    “Johnson and Barnes have made no effort to generate profits from any legitimate business operations from which they could repay earlier investors,” the SEC charged. “Instead, the sole source of repayments to earlier investors is funds contributed by newer investors.”

    The Feb. 12 filing date likely means that Achieve still was trying to raise money even as the SEC was in court to request an emergency asset freeze. On Feb. 12, a Barnes-narrated video appeared on YouTube. The 11:06 video was titled “Thursday Update 2 12.” The video provided Achieve members instructions on how to register for a purported new payment processor.

    By Feb. 14, Achieve members were quoting a forum post attributed to Barnes that Achieve’s assets had been frozen. Whether a criminal probe is under way is unclear.

    Barnes is 52. He resides in Riverview, Mich., according to the complaint. Johnson, known as “Kristi,” is 60. She resides in Aurora, Colo.

    Johnson also is associated with an entity known as “Achieve International LLC,” which has been named a relief defendant as an alleged recipient of funds from the fraud.

    “Johnson formed Achieve International as a Colorado entity, is an authorized agent of Achieve International, and, on information and belief, is the sole member, and managing member, of Achieve International,” the SEC said. “Johnson has acted as the sole signatory on at least one bank account that she opened in the name of Achieve International. Johnson is a former registered representative, and was last associated with a registered entity in 1996.”

    Some Achieve members have described Johnson as a “former stockbroker.” The SEC’s allegation that she is a former registered representative may be particularly problematic for her, leading to troubling questions about whether she simply ignored the very real possibility that the SEC would do exactly what it did: charge her with securities fraud and allege she and Barnes made “material misrepresentations and omissions” about the nature of Achieve.

    The SEC accuses both Johnson and Barnes of misappropriating funds sent in by Achieve investors.

    From the complaint (italics added/light editing performed):

    In addition to making Ponzi payments to investors, Defendants have misappropriated investor funds for Johnson and Barnes’ own personal use.

    On more than a dozen occasions, Johnson made significant cash withdrawals or wrote checks to “Cash” from the WWTB and Achieve International accounts, and made corresponding cash payments to her personal accounts.

    Johnson used these investor funds to pay her personal expenses, including paying nearly $35,000 in cash for a new car, and making personal credit card payments.

    To date, Johnson has misappropriated at least $150,000 in investor funds.

    Similarly, Barnes has misappropriated investor funds. Using thirteen separate transfers reflected on WWTB bank statements as “Visa Paypal *Troy Barnes,” Johnson transferred approximately $40,000 to Barnes.

    The seal on the complaint was lifted yesterday afternoon in Colorado federal court. Achieve’s websites went offline yesterday. Whether the outage was related to the TRO was not immediately clear.

    What is clear is that the SEC wasn’t impressed by Achieve’s claims that a “triple algorithm” somehow made a 700-percent ROI possible. It’s also clear that the SEC spent plenty of time listening to and transcribing recordings used to sell the scheme.

    Johnson said this in a conference-call pitch, the SEC alleged: “I thought, what can I do, what can I make, what can I design, that has only what works and none of what doesn’t, and one day, honestly this is what happened, I just saw it. I just saw it in my head. This matrix is 3D, which is why we can’t put it on paper. It’s a triple algorithm. And I can’t for the life of me tell you why I could figure that out in my head. But I could.”

    Barnes claimed he hired a programmer “who spent three months perfecting the ‘triple algorithm’ investment formula,” the SEC said.

    The trouble, the agency said, was that Achieve had “no legitimate business operations; the only available funds to pay the promised investment returns come from new investors lured into the scheme.”

    With their “triple algorithm” cover story, Johnson and Barnes went on to fleece Achieve members, the SEC said.

    “In a short video on TAC’s website, again narrated by Johnson, Johnson encourages investors to repurchase new ‘positions’ with their investment returns rather than taking money out of TAC,” the SEC alleged. “Johnson explains that by purchasing one $50 ‘position,’ and then using the $400 investment return to repurchase 8 positions, the investor would earn $3,200. Johnson goes on to explain that, if the investor used the repurchase strategy again, she would then have 64 positions worth more than $25,000. Johnson states that this strategy will ‘give you the same income over and over again, forever.’”

    She was hardly alone, the SEC charged.

    “Barnes makes similar statements about TAC’s ‘Re-Purchase’ strategy,” the agency alleged. “For example, in a video posted online touting TAC, Barnes states that investors can repurchase more ‘positions’ to make more money. In another online video, Barnes claims that, with the ‘Re-Purchase’ strategy, it is ‘very easy to make six figures.’”

    The SEC said its investigation was ongoing. Johnson is the only person alleged in the Feb. 12 complaint to have hauled $100,000 or more out of Achieve.

    Johnson and Barnes are charged with securities fraud. And despite claims online that Achieve wasn’t selling an investment or a security and therefore the SEC would have little or nothing to say on the matter, the filing of the complaint shows those claims were a crock.

    Achieve’s “positions” are “securities under federal law,” the agency charged.

    U.S. District Judge Robert E. Blackburn granted the TRO and asset freeze.

    The SEC is seeking an order “that each of the Defendants and the Relief Defendant disgorge any and all ill-gotten gains, together with pre-judgment and post-judgment interest, derived from the activities set forth in this Complaint.”

    At the same time, the agency is seeking “civil money penalties.”

    Achieve had a presence on well-known Ponzi-scheme forums such as MoneyMakerGroup and TalkGold. Some Achieve promoters created YouTube videos and have moved to other Ponzi-board scams.

    Here is a link to the SEC’s statement on Achieve and complaint. The agency also posted a Twitter link (below).

  • In Wake Of Asset-Seizure Claim, Videos By ‘Achieve Community’ Huckster Rodney Blackburn Go Missing From You Tube

    With “Achieve Community” members posting on Facebook over the long President’s Day weekend claims attributed to co-founder Troy Barnes that he was under criminal investigation and assets had been seized, something seemed a bit odd on YouTube: Search results appeared to demote Rodney Blackburn in listings when the term “Achieve Community” was entered into the form.

    Mass deletions by Blackburn (see below) of Achieve-related content almost certainly explain the apparent SEO erosion. Blackburn, though, hasn’t completely run away from Achieve. A couple of the huckster’s productions remain, including one dated Saturday in which he throws Achieve’s Kristi Johnson under the bus.

    It is titled, “Achieve Is Done But We are Not!” The length is 6:24. In the video, Blackburn claims to be “really in shock right now on how everything has played out.”

    He further claims he had a falling out with Johnson in the recent past. “I didn’t want to bring that information out because I wanted Achieve to work just as much as each and every one of you,” he said.

    This falling out, Blackburn suggests, happened within four days of a Dec. 10 conference call Blackburn co-hosted with Mike Chitty. Johnson, the purported business partner of Barnes in Achieve, was a guest on the call. (Someone who goes by “washable jones” and appears not to be keen on HYIP hucksters posted a recording of the call on YouTube.)

    Blackburn and Chitty are Achieve members associated with a sponsor’s group known as the Legendary Income Solutions Team (LIST). On the Dec. 10 call, Blackburn claimed LIST had “over 2,000 people within our marketing team that is supporting Achieve. So, that’s just our little part of the 13,000 people who are in Achieve.”

    If “supporting” means “joining,” this means that LIST members alone had plowed at least $100,000 into Achieve and that they constituted 15 percent of Achieve’s membership, something that would have provided Blackburn and Chitty plenty of incentive to keep insisting prosperity for the masses was right around the corner if members would simply not abandon ship when payouts stopped in early November.

    It’s not that they stood to gain commissions through Achieve, which claims everybody was on the same team for the common good and promoted a common affiliate link. In Blackburn’s case, what he stood to gain was a payout on the claimed 221 Achieve positions he held. These positions weren’t going to pay if new people did not register and if both existing and new members didn’t keep reinvesting “earnings.”

    Blackburn’s expected payout, according to one of his videos, was ballparked at $90,000. And he’d already cashed out $16,000, he said. Registrations for LIST were a second benefit. From there, the LIST “leaders” could plow the marks into other Ponzi-board scams, some of which do pay commissions on top of preposterous interest payments.

    The minimum buy-in at Achieve was $50. Much higher buy-ins were possible, with some Achieve members likely spending hundreds or even thousands of dollars and expecting a minimum return of 800 percent, more through the Achieve-endorsed  process of plowing “earnings” back into the scheme.

    Johnson was a guest on the Dec. 10 call co-hosted by Achieve/LIST members Blackburn and Chitty.

    Johnson ostensibly went on the show to lead cheers for Achieve in the aftermath of the payout suspension in November. In that strange network-marketing way, Johnson’s guest spot also gave Blackburn a chance to shine. Rodney, unlike other Achievers, could summon the master and, in some ways, use her to dial down the pressure he might have felt if LIST was responsible for bringing 2,000 people into the “program.”

    Most disturbing about the call was the revelation that an elderly woman with an 86-year-old husband who was ill had joined Achieve. She was described by Chitty as “exactly the type of person that the Achieve Community is built around and for . . .”

    Blackburn also implied during the call that he was an Achieve insider, telling listeners that Johnson told him things they didn’t get to hear. He also suggested that LIST sponsorship group could do a better job performing customer service than Achieve itself.

    These things could not have been music to the ears of Johnson.

    It’s now clear that several Achieve promos by Blackburn have gone missing from YouTube, including one in which he recorded six minutes of footage from the website of the U.S. Securities and Exchange Commission while planting the seed the agency had no jurisdiction over “programs” such as Achieve

    On this President’s Day it is unclear if the SEC is investigating Achieve. The agency last month declined to comment on Blackburn’s video. Achieve is reported to be under investigation by state authorities in Colorado and Michigan.

    Blackburn’s now-missing SEC challenge was titled, “Network Marketing & MLM Programs Are Getting Better!!!” It returns the message shown below.

    blackburnachievecommunity

    Also missing is a video posted in mid-December in which Blackburn appeared to apologize to Achieve Community members for not being supportive enough of Johnson and Achieve “admins” on a Facebook site who were clashing with or deleting individuals who raised concerns about Achieve. It was titled, “Rodney Apology Achieve Community.”

    All of these Achieve-themed videos by Blackburn appear to have been removed.

    • Achieve Community Update 1 10 2015 By The LIST Marketing Team
    • Network Marketing & MLM Programs Are Getting Better!!!
    • Achieve Community Update 1/ 4 /2015
    • LIST – Achieve Community Update and More!!!
    • Rodney Apology Achieve Community
    • Achieve Community Update 12-5-14 2014
    • Achieve Community Update 12-2-14 Part 2
    • Achieve Community Update 12-2-2014 Relaunch is Here! No be patient…
    • Achieve Community Update 12 1 14 2014
    • Achieve Community Update 11 21 2014
    • Achieve Community Relaunch is Coming
    • Achieve Update 11-12-2014
    • Achieve Community – Believe…
    • Achieve Community Are You Ready?
    • Achieve Community Update 10 22 2014
    • Achieve Community What’s Possible? Paid out $138,000 this week!
    • Achieve Community Update- $102,000 Paid Out This Week!!!
    • Achieve Community~ Chuck made Money! $8,000!!!
    • Achieve Community Come Experience Achieve
    • Achieve Community- How to Repurchase Positions and Why…
    • The Achieve Community- How Does It Work?

    Meanwhile, there have been deletions of certain LIST content and content from other “programs” pushed by Blackburn, including Unison Wealth. Blackburn pitches for Ponzi-board programs such as “Rockfeller,” “Automatic Mobile Cash,” “Bring The Bacon Home” and “Trinity Lines” remain.

  • PP Blog Subscription Post

    NOTE: This subscription post originally was published at 11:34 p.m. ET U.S.A. on Feb. 7.

    As was the case with our 2,500th-post commemoration in November, there are four subscription options. In the spirit of that post and the 6th anniversary post last month, I’m returning to the “penny a post” theme. We’re asking readers who believe in what this Blog is doing to take out a one-year subscription for either $25, $50, $75 or $100.

    The $25 fee constitutes a penny a post for our current editorial well of 2,500+ articles. There’s a pull-down menu in case you decide you’d like personally to value the editorial well at 2 cents a post ($50), 3 cents a post ($75) or 4 cents a post ($100).

    It is my hope that newer readers who can afford to subscribe will do so at either the $25 or $50 levels. The higher options may be best suited for readers and researchers who’ve been with us a long time and perhaps have read hundreds or even thousands of stories.

    Because the Blog’s well is so deep, we’re able to provide readers additional context. You’ll often find this reflected in “quick notes” in the Comments threads below stories. The notes point readers to stories on the same topic or to stories that have a similar theme.

    The Blog, of course, also points readers to other sources of information.

    There is no paywall at the PP Blog. By purchasing a subscription that automatically renews in one year, you’ll be helping me personally. And, as I noted in November, you’ll be helping a Blog that publishes hundreds of stories a year and keeps matters important to readers a bookmark away remain free for other readers.

    This “penny-a-post” idea has helped me scotch the very real concern about affecting readership by offering subscriptions. The readers who subscribe will be helping keep the Blog free for those who cannot afford to subscribe and for those who simply choose not to.

    Our readers of goodwill recognize the PP Blog as a persistent effort to contain harm and to educate the public about matters that destroy pocketbooks and families and, in some cases, affect national security.

    My sincere thank you for your continued interest in the PP Blog.

    Patrick


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