This 2014 promo for “Achieve Community” asked members to purchase “one EXTRA position” on Christmas Day.
UPDATED 4:36 A.M. ET FEB. 16 U.S.A. “Achieve Community” members this evening are circulating on Facebook a screen shot from a forum post attributed to Michigan-based co-founder Troy Barnes that claims “Achieve’s assets have been frozen.”
Members say the post appeared earlier today in Achieve’s recently installed private forum.
“I am facing criminal charges,” the post reads in part. It is dated today (Feb. 14), includes the Achieve logo and is headlined, “Weekend Update.”
The post did not identify the agency that purportedly launched a criminal investigation into Barnes. Nor did it say how long Barnes had been under investigation, when he found out about it and what person or agency informed him he was facing criminal charges.
Nor did the post identify the agency that requested the freeze and the judge who imposed it.
Whether an action by a specific law-enforcement agency led to the asserted freeze also was not addressed in the post. The post claims “Kristi has fled from USA” after she “had been talking to the Attorney general in Colorado for many weeks.”
The post did not substantiate the claim “Kristi” had fled. Nor did it substantiate the claim “Kristi” had been talking to Colorado’s Attorney General for weeks or say why they’d been talking. It is unclear if Achieve still was gathering money while these purported talks occurred. Achieve appears to have been trying to create and implement a new payment conduit as recently as Friday.
Kristi Johnson of the Denver region is Achieve’s other co-founder, according to Achieve’s websites at ReadyToAchieve.com and TheAchieveCommunity.com. The sites remains online. For at least two days, this message has appeared when the “Join Now!” button is accessed through the “Sign Up” page: “We are temporarily under maintenance – sorry for the inconvenience.”
The office of Colorado Attorney General Cynthia Coffman did not immediately return a call from the PP Blog Saturday night requesting comment. The Blog confirmed in January that Achieve was under investigation by the Colorado Division of Securities, which is not part of the Attorney General’s office.
The two Colorado agencies, however, have a history of working together on cases involving allegations of securities fraud. From time to time, such cases have led to criminal charges of theft and racketeering.
Andrea Bitely, the communications director and press secretary for Michigan Attorney General Bill Schuette, said yesterday that the Attorney General’s office does not comment on investigations. BehindMLM.com reported yesterday that Achieve was under investigation by Schuette’s Consumer Protection Division.
In 2013, a now-former Michigan state Legislator pleaded no contest to criminal charge of Neglect of Duty by a Public Official. Schuette’s office said the onetime lawmaker carried a cell phone provided by a scammer running a $9 million Ponzi scheme and “answered calls from potential investors even while on the House floor.”
At least one Achieve member has claimed on Facebook that Johnson has not fled and that Barnes is telling vicious lies, according to a post on the RealScam.com antiscam forum.
A Twitter account linked to Johnson disappeared today. So did at least one Facebook site.
EDITOR’S NOTE: This is one to think about if you’re an “Achieve Community” fan who’s moved over to the “Rockfeller” Ponzi-board scam while asserting its professional-looking website puts you at ease — even though you don’t know who’s running the purported company and apparently have formed the irrational belief that engaging a “chat” attendant through the website somehow means you’ve conducted due diligence.
You’re about to read a tale about a man, his attractive websites and the artifices he allegedly employed to make sure he had a ready supply of cash at his disposal during his long con. The take home: Eye-pleasing websites and stories of fantastic success routinely are used to conduct and fuel securities fraud.
**______________________**
UPDATED 6:51 P.M. ET U.S.A. Moazzam Ifzal Malik, also known as Mark Malik, has been indicted, arrested and jailed in New York “on $1 million bond over $1 million cash bail,” state Attorney General Eric T. Schneiderman announced yesterday.
Separately, the SEC announced civil charges against Malik, whom Schneiderman described as a Pakistani who’d defrauded investors in New York, Florida, Texas, Canada and Switzerland after setting up a constantly evolving flim-flam operation.
Malik, the SEC charged, solicited investors with promises of consistently high returns. In the end, though, investors were left holding the bag.
“By pretending to be a successful hedge fund manager, Malik conned investors into bankrolling his lavish lifestyle,” said Andrew M. Calamari, director of the SEC’s New York Regional Office.
For a while, according to investigators, Malik was able to outsmart his investors, in part by creating “opportunity” after “opportunity” to keep the scam going. He even outsmarted financial journalists. But it eventually all came crashing down as redemptions stalled or disappeared and investors grew more skeptical.
The five-year wave of fraud ended yesterday, authorities said, alleging that Malik still was trying to pick pockets as recently as January of this year.
Precisely when Malik, 33, came to America and began his alleged long con is unclear. The SEC said he attended high school in Pakistan and later “became registered with FINRA as a stock broker trainee at a New York-based investment advisory firm from where he was terminated in November 2009.”
Since 2009, the attorney general said, Malik was associated with entities identified as Wall Street Creative Partners L.P., Seven Sages Capital, L.P., American Bridge Investments L.P., and, most recently, Wolf Hedge LLC.
His business? “Purported” hedge funds that “promised his victims a partnership interest,” Schneiderman said.
It’s pretty clear that both the attorney general and the SEC want to use the cases against Malik to create a teachable moment. Schneiderman pointedly published a link to one of Malik’s webpages. The SEC published links to two Malik sites. (See one. See two.)
It is from these attractive sites and corresponding links to social media such as Twitter that Malik created a myth around himself and engineered his alleged scheme to defraud.
The SEC’s complaint is a real keeper for persons able to experience a teachable moment. It relates a tale of the impossible fictions Malik used to fleece his marks. If more money were involved — indeed, as this point we’re talking “only” about an $840,774 swindle — Hollywood perhaps would come calling.
There are so many interesting allegations it’s hard to know where to begin. Let’s start with the allegation Malik used the web to deceive, something many scams (including the Ponzi-board program “Rockfeller” and “Achieve Community”) have in common.
“In addition to communicating with investors using his own name, Malik created a fictitious identity named ‘Amanda Ebert’ to communicate with several investors. Malik sent emails from Amanda Ebert to several investors, with each email including a photograph of Ms. Ebert,” the SEC charged.
“The emails identified Ms. Ebert as ‘Investor Relations, Wolf Hedge LLC’ and attached customer account statements, which contained inflated valuations,” the agency said. “However, there was never any such person named Amanda Ebert associated with [American Bridge Investment Group], Wolf Hedge, or Malik.”
Malik simply plucked a photo of a woman off the web and worked it into his scam, the SEC alleged.
And what of redemption delays? Although Malik was not running a Ponzi-board swindle, his purported hedge fund sure acted like one. The SEC identified one of his victims as “Investor A.” After this investor repeatedly asked Malik for a redemption, the delay in granting one initially was blamed on a busy travel and work schedule.
“Okay working literally 24.7 just came back from Vermont (client meetings),” Malik allegedly advised the investor in an email. “I will call you on Monday and solve the issue. I promise.”
That call allegedly never came. Another month passed. Here’s what happened next, according to the complaint (italics added):
“Investor A did not hear from Malik again until September 2013 when a purported Malik employee named ‘Courtney,’ another fictitious identity used by Malik, emailed the investor as follows: ‘Mr. Malik has been [sic] passed away with the heart attack after accident. We will dissolve the fund shortly.’”
How about name-dropping of the sort that regularly occurs among hucksters pushing HYIP “programs?”
Well, Malik allegedly did that, too — perhaps with particularly notable success. You see, the SEC alleged that Malik duped Bloomberg and BarclayHedge into giving him positive press, and then used the inaccurate coverage he created to dupe his marks.
“In 2012, Barclay Hedge awarded American Bridge Investments L.P. the ‘yearly performance award’ and ranked the fund as the year’s top performing equity long-short fund with over $100 million in assets,” Schneiderman’s office alleged.
In its complaint, the SEC alleged that American Bridge’s trading account “never held more than $90,177 in assets.”
It gets worse. During the same year American Bridge and its Seven Sages spinoff were winning awards as purported rising stars, “Seven Sages’ brokerage account held only $269.52,” the SEC said.
How did Malik pull it off? By creating false financials and presenting them to reporters, the SEC charged.
From the SEC complaint (italics added/light editing performed):
Malik submitted to BarclayHedge a purported financial statement and auditor’s report of Seven Sages, dated December 31, 2012, which listed Berkowitz & Associates, a purported accounting firm with an Iselin, New Jersey address. The report claimed that Berkowitz & Associates had audited the Seven Sages’ financial statement.
This information was false. There is no accounting firm named Berkowitz & Associates in Iselin, New Jersey, and no auditor ever served as ABIG’s or Seven Sages’ auditor.
In the purported financial statement sent to Barclay Hedge, as of December 31, 2012, Seven Sages reported funds under management of$100.26 million. In fact, at that time Seven Sages’ brokerage account held only $269.52.
Malik eventually used another trick from the scammer’s playbook: The SEC alleged he married his namedropping to a purported IPO. Among the names dropped in the never-to-materialize IPO were the New York Stock Exchange, KPMG, Credit Suisse, JP Morgan, Barclays, Guggenheim and Merrill Lynch.
What to do when skeptical investors start turning up the heat? Here, Malik again engaged in the sort of conduct seen in HYIP scheme after HYIP scheme on the Ponzi boards.
This, friends, is stuff made for Hollywood:
“[O]n February 22, 2014, after Investor C had repeatedly asked Malik to redeem his investment (and Malik refused), Malik sent the investor a threatening email,” the SEC alleged. “The email contained a video of a werewolf movie with Malik’s comment ‘that’s what I think I am.’ Malik sent this email as a threat, indicating that Malik was as dangerous and threatening as a werewolf, and the email was intended to deter Investor C from efforts to redeem or to contact the authorities.”
As is the case in many Ponzi-board scams, the threats allegedly didn’t end there.
“Malik sent Investor D, who had repeatedly requested a redemption (which Malik refused), irate and profane emails apparently because Malik believed that the investor had contacted the [SEC] staff,” the agency alleged.
As Malik allegedly dialed up his egregious conduct, he did something else commonly seen in the HYIP sphere: tried to rip off one or more of his victims for a second time.
After his menacing conduct to Investor C, the SEC said, “Malik solicited Investor C to invest an additional $100,000.”
This solicitation came in January 2015, about 11 months after Malik threatened Investor C with the werewolf imagery, according to the complaint.
Along the way, the SEC charged, Malik sent emails that repeatedly used exclamation marks.
It’s something that happens every hour in HYIP Ponzi Land.
This, the SEC said, was one of the Malik emails: “Increase everyone! We are going to go in the biggest trade with full hedge and stop loss. You may redeem next month if you wish. INCREASE!!!”
A false screen shot that showed a a fund value of $56 million was part of the scam, the SEC alleged.
So was the use of “uncompensated individuals to conduct marketing and perform other work for him,” the SEC said.
And when things started caving in, Malik “sent emails to investors accusing them of trying to ruin him by communicating with the Commission staff, while simultaneously soliciting them to invest additional funds.”
At one point, though, he finally remained silent, according to the complaint.
“Malik asserted his Fifth Amendment privilege against self-incrimination in response to the Commission’s staffs subpoenas compelling him to testify and produce documents,” the SEC said.
BULLETIN: (9th update 9:57 p.m. ET U.S.A.) Zeek Rewards receiver Kenneth D. Bell has sued alleged “winners” with residencies in New Zealand and the British Virgin Islands.
One BVI winner is alleged to have gained more than $2 million from Zeek’s combined Ponzi- and pyramid scheme. Bell identified her as Agnita Solomon of Road Town, Tortola.
Susan Forbes, of Tortola, the largest island, is alleged by Bell to have won more than $603,000. No specific town is listed for her.
Hamish Brownie appears to be Zeek’s largest alleged winner in New Zealand. Bell listed a sum of more than $507,000 for Brownie, who resides in Christchurch.
Road Town, the capital of the BVI, possibly was a Zeek stronghold. Of the five BVI residents sued, three listed Road Town addresses, according to Bell’s lawsuit. Besides Solomon, the other two were identified by Bell as Marcus Drigo and Patrice Harewood.
Drigo allegedly won more than $70,000; Harewood allegedly received nearly $60,000.
Marguerite D. Hodge, another BVI resident, was alleged to have won more than $115,000. No specific city or island was listed for her.
The other alleged New Zealand winners sued by Bell were identified as Praveen Kumar of Auckland and David Ian MacGregor Fraser, also of Auckland. Kumar is alleged to have won more than $115,000; MacGregor Fraser received more than $89,000, Bell alleged.
The lawsuits against the BVI and New Zealand defendants are filed in U.S. District Court for the Western District of North Carolina. The actions mark at least the third time Bell has sued international alleged winners.
Bell previously sued winners with addresses in Canada and Australia. He has sued about 9,400 individuals or entities with U.S. addresses, most of them via a class action.
The actions against U.S. domestic alleged winners and their international Zeek colleagues likely represent the largest undertaking by a receiver in an HYIP case in U.S. history.
Cross-border MLM HYIP schemes operating over the Internet have emerged as a considerable problem. Zeek may have involved on the order of 800,000 participants, the vast majority of them alleged losers of a combined sum in the hundreds of millions of dollars.
Court filings in the TelexFree bankruptcy case alleged that $1.8 billion was driven to that cross-border scheme, which potentially involved more than 1 million participants globally.
The SEC shut down Zeek in August 2012, with three key figures later charged criminally. TelexFree declared bankruptcy on a Sunday night in April 2014, just as regulators were preparing to file actions.
Two TelexFree figures later were charged criminally. There also are TelexFree-related civil and criminal investigations in Brazil, perhaps TelexFree’s main stronghold. The U.S. Department of Homeland Security and the FBI are involved in the TelexFree probe.
In the actions against the BVI and New Zealand alleged Zeek winners, Bell said this: “Because Zeek’s net winners ‘won’ (the victims’) money in an unlawful combined Ponzi and pyramid scheme, the net winners are not permitted to keep their winnings and must return the fraudulently transferred winnings back to the Receiver for distribution to Zeek’s victims.”
3RD UPDATE 4:02 P.M. ET U.S.A. The “Achieve Community,” an 800-percent ROI Ponzi-board “program” apparently hamstrung by problems with payment processors, now is serving up a spectacle in which confusion and delay are the only consistent themes.
BehindMLM.com reported late last night (or early today, depending on your time zone) that the office of Michigan Attorney General Bill Schuette had confirmed an “open investigation” into Achieve involving the Attorney General’s Consumer Protection Division.
The PP Blog this morning sought comment from Schuette’s office.
“We don’t comment on investigations,” said Andrea Bitely, the Attorney General’s communications director and press secretary.
The response appears to confirm the report on BehindMLM.com that Achieve is under investigation in Michigan.
Because the Colorado Division of Securities has confirmed a probe into Achieve, the PP Blog sought comment yesterday from Michigan’s Corporations, Securities & Commercial Licensing bureau on whether Achieve was under investigation in that state. The bureau referred the Blog to the communications division of its parent agency, the Michigan Department of Licensing and Regulatory Affairs (LARA).
A LARA spokeswoman said only that the bureau neither confirms nor denies investigations.
But if the bureau is working with the Attorney General’s office, it would mean that Achieve might have two types of trouble in Michigan: consumer fraud and securities fraud — and at the same time it faces the Colorado investigation.
Given information on two websites linked to Achieve, the “program” appears to operate through a Delaware corporation known as Work With Troy Barnes Inc. Barnes is a Michigan resident, and the two websites linked to Achieve list a Riverview, Mich., address for the “program.” Although Work With Troy Barnes Inc. appears in Delaware records as a company domiciled in that state, there appears to be no corresponding registration as a foreign corporation in Michigan.
Precisely how Achieve is operating through Work With Troy Barnes is unclear. The two Achieve websites — ReadyToAchieve.com and The Achieve Community.com — have Korean lettering near the bottom. IP addresses for the web properties resolve to Iceland.
Any number of Achieve members have shown blind faith in Achieve. Some “defenders” of the “program” have spoken of faith in God and Jesus Christ. Achieve, though, appears repeatedly to have encountered struggles with payment processors after reportedly losing its ability to do business through Payoneer in late October or early November.
And this brings us to today . . .
Instructional Video Goes Missing
Barnes — along with Kristi Johnson of the Denver area — are the purported operators of Achieve.
At some point yesterday (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.
This video now mysteriously has gone missing, amid concerns expressed by some Achievers that even registering for the processor might open the door to identity theft. What’s more, the identity of the processor itself, how it is operating and where it is operating from are murky.
The now-missing Troy Barnes’ video for Achieve showed fields soliciting notarized passport and driver’s license photo identification and other sensitive information, raising the specter of identity theft.
The narration by Barnes was disjointed, at once advising members they had to submit all information requested in the information fields but backtracking to insist certain information was optional.
In the video, fields requesting standard identification such as name and address were shown. But there also was a field that requested the submission of notarized color copies of a passport or driver’s license with a signature, “OR an un-notarized copy of one of the previous AND a copy front and back of a valid credit card OR another type of government issued picture identification which shows a signature and birth date.”
There also were fields that solicited information on income and a letter from the employer of an Achieve member addressed “To Whom it May Concern” to verify employment.
With respect to the field soliciting an employment-verification letter, Barnes said this: “Don’t even worry about this. You don’t need it, all right. This is going to disappear off of here. For now, it’s there. Don’t worry about it.”
Despite those words, Barnes also said, “Remember: When you submit, everything’s gotta be filled out. Everything.”
He also said, “If you have a PO Box and you’re in the United States, so, you’re [going to] need to go to the bank. Take your driver’s license. Any bank will do this. Tell them you [want to] get your driver’s license notarized. They’ll take it and make a copy of your driver’s license. I understand your mail may go to a PO Box, but your address should have your driver’s license on it [sic]. And that’s it. Just upload it here, and you’re all set.”
About a field soliciting address verification, Barnes said this: Address verification is “very important. A utility bill. Anything that has your address on it that you’re billed for. You need to upload that here.”
Barnes described a field soliciting information on estimated annual total deposits in this fashion: “You know: What do you think you’re gonna make [through Achieve?] Put whatever you want. It doesn’t matter. You know, for me, I put a hundred thousand. So, put whatever.”
At a minimum, the video suggested Achievers who successfully submitted information would receive some sort of debit card to offload profits — perhaps in a couple of weeks. Achieve appears not have have made a payout for more than three months while at once engaging in payment-processor roulette.
The FBI has warned for years that certain types of debit cards and shell companies can be used for the purposes of money-laundering, handing economic strength to criminals or worse.
Some Achievers have joined other Ponzi-board schemes and published YouTube promos for the schemes.
2ND UPDATE 9:18 A.M. ET FEB. 13 U.S.A. On Oct. 16, 2014, Google was served a search warrant in the TelexFree criminal case against accused operators James Merrill and Carlos Wanzeler, according to joint court filings by federal prosecutors in the office of U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Robert M. Goldstein, a defense attorney for Merrill.
Merrill and Wanzeler are charged with wire fraud and wire-fraud conspiracy. U.S. prosecutors have called Wanzeler a fugitive now likely living in Brazil. With discovery involving incredible amounts of data and an avalanche of documents under way that both sides must sift though, no trial date has been set.
The search warrant sought “a substantial amount of video content held by [Google’s] subsidiary, YouTube,” according to the joint interim status report by prosecutors and Goldstein docketed on Dec. 17. The lawyers noted that “Google reports that compliance will take several more weeks.”
Precisely why the government sought the material is unclear, but promoters of MLM or network-marketing HYIP schemes frequently pitch their offerings on YouTube. Filings last week by Stephen B. Darr, the court-appointed trustee in the TelexFree bankruptcy case, assert that TelexFree had gathered as much as $1.8 billion in about two years and that the cross-border “program” may have involved 1 million or more people.
Darr flat out called TelexFree a pyramid scheme.
In another joint interim report docketed Monday, prosecutors said they recently received 45GB of material from Google under the search warrant. The corresponding number of hours of video contained within the production wasn’t specified.
Prosecutors also said in the report that they’d received an unspecified amount of data from Hotmail and Apple that had been sought in a search warrant.
This data involved email accounts, prosecutors said in the interim report. The names of the account-holders and the content of the emails were not revealed in the report.
HYIP schemes often get pitched in emails from promoters. The government did not say why it had sought the material.
Prosecutors did note that “[p]roduction of this material has been delayed by errors in the data as produced by the email providers.”
Darr, the trustee, has turned over 75GB of data, according to the Feb. 9 report.
Getting to the heart of an HYIP scheme that operated over the Internet is an exceptionally time-consuming task. Delays are almost inevitable and even can be caused by external events that affect resources. In the Feb. 9 filing, prosecutors noted that “paralegals and litigation technical support staff” in Ortiz’s office also are participating in the prosecution of the Boston Marathon bombing case, a mammoth undertaking.
Absences or delays, however, are not unique to the prosecution side of the argument. A TelexFree defense attorney who has to sift through discovery material is involved in a trial in another state and could not attend a status conference that had been scheduled for today, according to the joint interim report.
U.S. Magistrate Judge David H. Hennessy canceled today’s conference, setting April 13 as the next date the parties would meet. In his own report, Hennessy noted that discovery was proceeding in the case despite the enormous volume of material.
And that volume only will grow, he wrote, pointing to a TelexFree criminal investigation in Brazil and assertions by U.S. prosecutors that they expect to receive “a large amount of material, both hardcopy and electronic, from the Brazilian government” in March.
News of the conference delay was received on the same day publications in Brazil reported that an accounting firm (Ernst & Young) in that country had reported to the judiciary in Acre state that TelexFree (as Ympactus) had the characteristic of a pyramid scheme.
TelexFree is the subject of both state and federal probes in Brazil.
The Feb. 9 joint interim report in the United States notes that “the government anticipates receiving [data] in response to a search warrant submitted to the Court this week.”
What was targeted in that search warrant was not revealed. Nor was the identity of the person or entity served with the warrant.
The interim report also notes that the U.S. government is in possession of “[v]arious recordings made by undercover [Homeland Security Investigations] agents at TelexFree conference and in conversations with a TelexFree promoter.”
Brazil-based TelexFree figure Carlos Costa appears to be the subject of a veiled reference in the Feb. 9 report, which describes an unnamed person in Brazil as “the third owner of TelexFree.”
Authorities in Brazil have served “about nine” TelexFree-related search warrants in that country and have seized on the order of $450 million, according to the Feb. 9 report.
Bob Simon. Source: CBS News Special Report on Feb. 11, 2015.
American journalism has lost a legend. Bob Simon, the veteran CBS News correspondent, was killed early last evening when the cab in which he was riding was involved in a horrific crash on West Side Avenue, the New York Daily News reported.
Simon was 73. CBS broke into programming to report the news. Tributes poured in. So did expressions of the irony of it all. Simon, who was captured and held for 40 days by the Iraqi army during the Persian Gulf War in 1991, did much of his best work as a correspondent reporting on war or turmoil from the world’s hot spots.
He also was a correspondent for “60 Minutes,” recently (Feb. 8) airing an interview with Ava DuVernay, director of the movie “Selma,” a story about Dr. Martin Luther King Jr. and the pursuit of freedom within America’s borders.
“The Ku Klux Klan” once reigned in the “backwoods around Selma,” Simon said in introducing the segment, and people in the area “have long memories of painful times past.”
An “Achieve Community” promoter recorded a commercial for the purported opportunity at an FDIC-insured bank last year. Photo source: YouTube screen shot.
UPDATED 11:41 A.M. ET U.S.A. On Nov. 12, 2013, an entity known as “The Universal Church of Charitable Life Inc.” filed articles of incorporation in Florida. It listed its base of operations at a street address in Saint Petersburg, a city in the Tampa region.
Its nonprofit mission, according to the Florida filing, was to “act with charity providing relief to homeless and distressed people locally and internationally while providing spiritually educational resources.”
How much relief the firm provided is unclear: Florida dissolved the purported church in September 2014 for failure to file an annual report.
Certain managers or agents of the church also are listed in Florida filings by a company known as Binary Wallet LLC. Binary filed articles of organization on July 15, 2013, listing an address in Palmetto Bay, a Miami suburb.
Binary appears also not to have filed an annual report, because the word “reinstatement” appears in 2014 Florida records for the firm. Binary subsequently filed a report for 2015, listing an address in St. Petersburg and the names of at least three people whose names also appear in the church filing.
One person listed in the church’s articles of incorporation — but not in the articles of organization for Binary — is James T. Lovern. This perhaps is because Lovern had been implicated in a telemarketing/government-grants swindle. The case was prosecuted by multiple states, including Florida and North Carolina.
A website styled BinaryWallet.com appears online and features photos of credit cards, debit cards and gift cards emblazoned with or surrounded by “BW” branding. The site is listed in the name of Sagar Kotak at an address in Palmetto Bay. The name Sagar Kotak also appears in Florida filings for the defunct church. Those filings list an address in India for Kotak and include a curious geographic detail: “near Bytco Hosp.”
Binary’s Florida filings list Sagar Kotak at an address in South Carolina.
Multiple links at BinaryWallet.com generate “404 Not Found” errors.
These things may take on increasing importance, because reports surfaced yesterday that suggest Binary Wallet somehow now is involved in payment processing for “Achieve Community,” a Ponzi-board “program” currently under investigation by the Colorado Division of Securities.
It appears that these reports first surfaced on a Facebook site known as “the Sheepdog,” which produced a screen shot showing the BinaryWallet domain loading a page that included graphics from a payment processor known as AeraPay.
Achieve Community has attracted many members of the faith community. Since at least early November — when reports first surfaced that Achieve had lost its ability to do business through Payoneer — the “program” appears to have been playing a game of payment-processor roulette. This has been a signature of other HYIP fraud schemes, including Zeek Rewards and TelexFree.
Those two Ponzi-board “programs” alone appear to have gathered a combined sum on the order of $2.7 billion — yes, BILLION. Achieve purports to turn $50 into $400 repeatedly through a process of rollovers.
People of faith also were targeted in the Zeek and TelexFree scams. Multiple payment vendors have been subpoenaed or sued.
The FBI has been warning since at least 2010 that certain types of debit cards can be used to launder money and to put undeserved wealth in the hands of criminals who may be using shell corporations.
What’s going on at Achieve right now isn’t clear. What can be said, at a minimum, is that individuals associated with a defunct Florida church appear also to be involved in a payment-processing business.
“GlimDropper,” a RealScam.com moderator posting at BehindMLM.com, observes that “Jim Lovern” has a LinkedIn page that asserts he is an “[Executive Vice President] in Binary Wallet.”
BULLETIN: (Updated 11:11 p.m. ET U.S.A.) Senior U.S. District Judge Graham C. Mullen has certified a class of more than 9,000 alleged “winners” of more than $1,000 in the Zeek Rewards scheme.
Receiver Kenneth D. Bell sued more than 10 named “winners” in February 2014 in a case styled “Kenneth D. Bell v. Todd Disner, et al.” The suit included class claims against about 9,400 winners of smaller sums.
The ruling by Mullen effectively means the winners of the smaller sums are now defendants who will be represented by the same lawyers representing the larger winners. Bell “proposed that one or more of the following named Defendants serve as Class Representatives: Trudy Gilmond and Trudy Gilmond, LLC; Jerry Napier; Darren Miller; Rhonda Gates; Innovation Marketing, LLC; Aaron Andrews; Shara Andrews; Global Internet Formula, Inc.; T. LeMont Silver; Karen Silver; and Durant Brockett,” Mullen wrote.
Disner is facing a default judgment of more than $2 million, but is trying to get it reversed.
Bell asked for the class certification in July 2014, explaining that he “asked that the Court appoint one or more of the largest net winners sued by name as class representatives because they will, by virtue of their own defense to the same claims, be adequate and appropriate representatives for the rest of the Net Winner Class.”
Mullen agreed today with that logic.
“If the Receiver herein was forced to file separate actions against the 9,400 Defendants, he would certainly be risking inconsistent and varying adjudications,” Mullen wrote. “If one court found that a fraudulent transfer occurred, but another court did not, then those inconsistent decisions would place the Receiver in a stalemated or conflicted position. If the Receiver attempted to enforce a valid judgment against a particular Defendant, that Defendant might refuse to pay because other Defendants similarly situated were not held to be liable for the same underlying conduct related to ZeekRewards. An additional layer of inconsistency would arise if the Receiver attempts to settle a lawsuit, but the Net Winner Defendant is not willing to compromise since that Defendant is already aware of the inconsistent adjudication based on the same set of facts. These anomalous results would leave the Receiver in an untenable position and circumstances such as these are precisely why class actions exist.”
Mullen specifically found that, with 9,400 defendants, Bell had satisfied the “numerosity requirement” to make a class-action reasonable and efficient. He also found that Bell had established a “commonality factor” in that the smaller winners had things in common with the larger ones.
These included questions about “whether ZeeksRewards’ operation was a Ponzi and/or pyramid scheme,” Mullen wrote.
And, he noted, “[a]ll class members had or controlled usernames and accounts with ZeekRewards through which they received funds from [Zeek operator Rex Venture Group]. Further, each class member received more money from RVG than they paid into RVG (their ‘net winnings’) during the course of their participation as affiliates in the ZeekRewards program. There is also a common question of law, that is: whether the payments from ZeekRewards to class members are fraudulent transfers that must be disgorged and repaid.”
Bell also satisfied a “typicality” requirement that examines whether “the claims or defenses of the representative parties are typical of the claims or defenses of the class,” Mullen ruled.
At the same time, the judge ruled, Bell had shown that the class of 9,400 would receive “fair and adequate representation.”
“Here, the proposed Class Representatives’ interests are not antagonistic to, but rather aligned with, the interests of the unnamed class members because they share the common objective to defend against having to return funds received from ZeekRewards as demanded by the Receiver. Thus, there is no conflict which would defeat adequacy of representation.”
Mullen rejected contentions that the defendants did not have enough in common for the matter to proceed as a class action.
He also rejected contentions that the largest winners “simply cannot afford to represent the Net Winner Class, noting that “their protestations of poverty ring hollow in light of the fact that together they won over $11 million in profits from ZeekRewards.”
Regardless, Mullen observed, the “Court has repeatedly made it clear that the Receiver will be required to help fund the defense of the class.”
A footnote in the ruling reads (italics added):
That Court is mindful that despite the large winnings of the Named Defendants, it is possible that much of the net winnings has been dissipated. As stated at the last status conference in this matter, the Court fully expects that the Named Defendants will provide the Receiver with any and all evidence of their financial status and the location of all net winnings received from ZeekRewards, including deposition testimony as to the same. Such financial transparency will not only aid the Court in its determination as to what extent the Receiver shall be required to fund the defense of the class, but will also undoubtedly aid in any settlement discussions.
Disner, who pitched both the AdSurfDaily Ponzi scheme and Zeek, is now listed as a “Black Diamond” member on the website of an MLM program known as Lumaxa.
Lumaxa sells Nyloxin, a pain-relief product made from cobra-venom. Longtime MLM huckster Phil Piccolo has been linked to the Nyloxin program once sold through MyNyloxin.com and may be a Zeek winner. Another business with a Piccolo tie was known as Text Cash Network or TCN. It operated from the area of Boca Raton, Fla.
An entity known as “TCN CUSTOMER SERVICE INC” of Boca Raton is listed as a Zeek winner.
Lumaxa, the company to which the MyNyloxin domain now rotates, may be facing some challenges, a source with knowledge of the “program” told the PP Blog.
“The company is sounding desperate to have people keep their money invested, and in fact giving more, higher rates of interest to cancel their withdrawals and earn more,” the source said.
“Achieve Community” figure Rodney Blackburn now is promoting Rockfeller.biz, a “program” that purports to pay up to 5 percent a day. The pitch implies a tie to the Rockefeller family. The PP Blog this evening sought comment from former U.S. Sen. Jay Rockefeller through the Council on Foreign Relations. The Blog is waiting to hear back.
UPDATED 9:54 P.M. ET U.S.A. It’s called “Rockfeller.” Like the massive TelexFree scam in Massachusetts, it is using the address of a Regus office center — only this time the facility is in London.
A Ponzi-board scheme similar to Rockfeller — Profitable Sunrise — may have swindled tens of millions of dollars before disappearing two years ago. While Profitable Sunrise claimed a daily payout of up to 2.7 percent. Rockfeller says it pays up to 5 percent daily.
Note that the scheme’s name is very similar to the name of Rockefeller, the famous American family of financiers and politicians. Scams routinely trade on the names of famous entities or people, sometimes using slight variations of the names.
Speaking in hushed tones in a 9:33 YouTube pitch for Rockfeller today, Rodney Blackburn suggests the “program” is operated by the Rockefeller family.
“Guys, this is a very top-notch, high-quality company,” Blackburn says in a video titled “Rockfeller Asset Management Limited – Review Earn Daily!!!”
“No, I have not talked to the owners of this company. I’m assuming that they’re not going to let me talk to the Rockefellers,” Blackburn says.
The PP Blog this evening sought comment from Sen. Jay Rockefeller through the Council on Foreign Relations. Rockefeller, a West Virginia Democrat, is the former chairman of the U.S. Senate Select Committee on Intelligence. He retired last month from the Senate and joined the Council on Foreign Relations as a distinguished fellow.
One of his interests is cybersecurity.
The PP Blog is waiting to hear back on its request for comment on the Rockfeller “program.”
Blackburn is promoting multiple schemes with a presence on well-known Ponzi-scheme forums such as MoneyMakerGroup. These include “Achieve Community,” currently the subject of an investigation by the Colorado Division of Securities.
Other “programs” promoted by Blackburn include “BRING THE BACON HOME,” purportedly operating through “Sherilyn” of “Singapore,” and “Trinity Lines,” which is trading on the name of God.
Blackburn also is promoting “Unison Wealth” and other schemes.
“MyCoin’s” bitcoin exchange might have operated as a “pyramid-style Ponzi scheme packaged as bitcoin trading,” potential victims plan to tell Hong Kong authorities Wednesday, the South China Morning Post is reporting.
The news comes as bitcoin-themed schemes or “programs” that claim to accept bitcoin appear on Ponzi boards such as MoneyMakerGroup, raising continuing questions about whether MLM HYIP scammers worldwide will erode marketplace confidence in bitcoin itself.
MyCoin appears to have planted the seed that investors could plow money into the MyCoin venture itself. The PP Blog was able to view the MyCoin website. Purported businesses such as a “Trading Center,” an “Electonic Mall,” a “Cloud Mining Machine,” a “Bitcoin Game Center and “Market Monitoring” are referenced on the still-active site.
Various buzzwords appear on the English version of the site. Examples include “value-added services,” “strategic objective,” “mobile e-commerce” and “integrated multifunctional Bitcoin platform.”
Fraud schemes often mix in well-known words and phrases from the worlds of investing and business to disarm members of the public. Other examples include “algorithm,” “trading floor,” “insured,” “green” (denoting “programs” said to be environmentally friendly”), “approved” and “contract.”
Victims often are hoodwinked and dazzled into believing they’re exercising great personal and public responsibility while helping freedom and free markets expand.
From the South China Morning post (link above/italics added):
An 81-year-old woman surnamed Chan said she recovered only HK$1.2 million on her HK$3 million investment on seven bitcoin contracts. “I shouldn’t have been greedy. I was told by my real estate agent that the profit would be over HK$2 million after one year,” she said. The biggest loss by a single client was said to be HK$50 million, while some mortgaged their properties to invest.
According to reports, Hong Kong exchange MyCoin has closed, taking with it as much as $386.9m in investor funds http://t.co/hsjf4i7lxu
This exhibit in the Zeek Rewards Ponzi- and pyramid case shows that an “E.C. Church” sent $10,000 to Zeek just days before the “program” collapsed in August 2012. (Masking by PP Blog.)
UPDATED 8:42 P.M. ET U.S.A. Members of the faith community joining MLM HYIP schemes is a problem. It happened with the $119 million AdSurfDaily Ponzi scheme and the $72 million Legisi scam in 2008, for example.
It’s happening currently with the “Achieve Community” scheme. Earlier, members of TelexFree — an alleged $1.8 billion pyramid scheme — traded on the words and images of faith, including the Christ the Redeemer statue in Brazil.
The WCM777 and Profitable Sunrise schemes also traded on images of the statue. Promoters of the schemes targeted people of faith. Those schemes likely generated more than $100 million.
There’s also evidence that people of faith were targeted in the $897 million Zeek Rewards scheme brought down by the SEC in 2012.
New filings by the court-appointed receiver in the Zeek case show that an entity that identified itself as an “E.C.” (Evangelical Congregational) church sent $10,000 to Zeek operator Rex Venture Group LLC on Aug. 8, 2012. The payment was in the form of a cashier’s check.
The PP Blog is declining to identify the church because details of its precise geographic whereabouts could not be learned immediately. But the check was drawn on an Alabama bank that allegedly later stopped payment.
Zeek receiver Kenneth D. Bell is seeking a court order for the bank — BBVA Compass Bank — to turn the $10,000 over to the receivership. BBVA Compass also allegedly unlawfully halted payment on 23 other cashier’s checks sent to Zeek. These totaled $73,800, meaning Bell is seeking $83,800 from the bank.
Those checks were receivership assets, and the bank’s decision to stop-payment after the receiver presented them to be paid violated the asset freeze in the Zeek case, Bell alleged.
From the receiver’s filings yesterday (italics added/light editing performed):
At the commencement of the SEC Action on August 17, 2012, RVG possessed thousands of cashier’s checks and teller’s checks received from RVG Affiliates that had not been deposited or presented for payment. Upon entry of the Agreed Order, the Receiver collected cashier’s checks from RVG’s offices and deposited them in accounts opened for the Receivership Estate.
Twenty-four (24) of the items collected from the RVG offices and deposited into the Receiver’s accounts were cashier’s checks payable to RVG issued by Compass. . . . On information and belief, between August 21 and August 29, 2012, Compass’s customers requested that Compass stop payment on the twenty-four Compass cashier’s checks previously delivered to RVG.”
These halts by the bank were unlawful under the Uniform Commercial Code, Bell alleged.
“Compass wrongfully accommodated its customers by stopping payment on all twenty-four cashier’s checks when it was not legally permitted to do so under the Uniform Commercial Code,” Bell contended.
Although the filing is not on the subject of affinity fraud, documents within the filing suggest that the E.C. entity had company at Zeek among the faithful. Two checks among the 24 were drafted on behalf of an individual whose Zeek username included the word “blessing.” These checks totaled $2,300.
Religious entities and people of faith getting recruited into HYIP schemes may not be the only problem. In the AdSurfDaily case, for instance, evidence surfaced that individuals had created purported nonprofits and religious entities into which to deposit their Ponzi winnings.
Bell alleged in late 2012 that he “has obtained information indicating that large sums of Receivership Assets may have been transferred by net winners to other entities in order to hide or shelter those assets.”
