PatrickPretty.com

Author: PatrickPretty.com

  • On National Drink Beer Day, SEC Announces Action Against Anheuser-Busch InBev

    Anheuser-Busch InBev will pay $6 million to settle SEC charges “it violated the Foreign Corrupt Practices Act (FCPA) and chilled a whistleblower who reported the misconduct,” the SEC said.

    The SEC’s announcement came on National Drink Beer Day. Whether the timing of the announcement was a coincidence was not immediately clear.

    At issue, according to the SEC order dated Sept. 28 was improper payments made government officials in India to expand the market share of Crown beer.

    “Anheuser-Busch InBev recorded improper payments by its sales promoters in India as legitimate expenses in its financial accounting, and then exacerbated the problem by including language in a separation agreement that chilled an employee from communicating with the SEC,” said Kara Brockmeyer, chief of the SEC Enforcement Division’s FCPA Unit.

    “Threat of financial punishment for whistleblowing is unacceptable,” said Jane Norberg, acting chief of the SEC’s Office of the Whistleblower.  “We will continue to take a hard look at these types of provisions and fact patterns.”

    The whistleblower stopped talking to the agency after entering into the separation agreement, which could have imposed a $250,000 penalty for continuing to talk, according to the SEC.

    “After signing the Separation Agreement, the Crown Employee, who was previously voluntarily communicating directly with the Commission staff, stopped doing so,” the SEC said. “The Crown Employee stopped doing so because he believed that he was prohibited by the recently executed Separation Agreement and any violation of the Separation Agreement would risk triggering the Separation Agreement’s liquidated damages provision. Only after the Commission issued an administrative subpoena for testimony and documents did the Crown Employee resume communicating directly with the Commission staff.”

    At the time of this PP Blog post, #NationalDrinkBeerDay was a trending Twitter hashtag.

    Anheuser-Busch InBev of Belgium owns Budweiser and other major brands. The company acknowledged no wrongdoing, but is making compliance changes, according to the SEC.




  • Traffic Monsoon Apologist Declares ‘Revenue Shares Matter’ Campaign With ‘RIOT’ As Slogan

    revsharesmattersmallA former pitchman for the Traffic Monsoon “program” declared a Ponzi scheme by the SEC is using Facebook to promote a “Revenue Shares Matter Campaign.”

    This is occurring against the backdrop of three nights of civil unrest in Charlotte, N.C., after a police shooting of an African American man.

    The purported Revenue Shares Matter campaign, which appears to be trading on a theme popularized by the Black Lives Matter movement after a series of police shootings of African Americans, apparently began today. The purported campaign was announced through a Facebook account in the name of Jose Nunes.

    Black Lives Matter did not respond immediately to a request for comment on whether it was concerned its message could be diluted by the Revenue Shares Matter campaign.

    As part of the Revenue Shares Matter campaign, a flame-filled graphic appears to urge members of similar revshare schemes to “RIOT.”

    It is not unusual for HYIP defenders to come up with harebrained PR campaigns or sales pitches. A particularly memorable one occurred in 2013, when recruiters associated with the alleged TelexFree Ponzi scheme spammed a funeral notice.

    At least one poster on Facebook already has raised concerns about the Revenue Shares Matter campaign.

    “Jose, I think you may well that some people will find this post and caption is in bad taste and may be deemed highly offensive to many people who support and believe in the BLM movement,” the poster wrote.




  • BULLETIN: Judge Extends TelexFree Claims Deadline

    newtelexfreelogoBULLETIN: At the request of Trustee Stephen B. Darr, U.S. Bankruptcy Judge Melvin S. Hoffman has extended the deadline to file TelexFree claims until Dec. 31, 2016, at 4:30 p.m. Prevailing Eastern Time.

    The deadline had been Sept. 26.

    Darr asked for the extension on Sept. 21.

    Why was the extension needed?

    “The Trustee has determined that, given the unique circumstances of these cases, an extension of the bar date is appropriate.,” Darr advised Hoffman. “These circumstances include the number of participants involved in the Debtors’ program, the geographical dispersion of participants throughout the world, language barriers, and the time that participants may need to complete the assembly of records and to seek assistance in completing the ePOC.”

    About 80,000 claims had been filed through Sept. 20, Darr noted.

    With a scheme such as TelexFree that affected hundreds and hundreds of thousands of people, it seems likely that many, many more claims could be filed.

    Claims must be filed through TelexFreeClaims.com.




  • Alleged ‘Key Figure’ In TelexFree Declares Bankruptcy

    newtelexfreelogoUPDATED 1:05 P.M. EDT U.S.A. SEPT. 23 In April 2014, TelexFree declared corporate bankruptcy. Now, an alleged “key figure” in TelexFree being pursued by the court-appointed trustee has declared personal bankruptcy.

    Jay Borromei of Opt 3 Solutions Inc. filed his petition Sept. 13 in U.S. Bankruptcy Court for the Central District of California, according to a new filing in the TelexFree bankruptcy case. Borromei, who resides in California, is requesting an automatic stay of TelexFree Trustee Stephen B. Darr’s April 2016 lawsuit against him and Opt. 3 in Massachusetts Bankruptcy Court for the return of more than $1.8 million.

    Both Borromei’s bankruptcy filing and Darr’s adversary action against him demonstrate one of the often-ignored dangers of becoming involved in an MLM scheme that promises or suggests a return on investment: financial ruin and the emotional consequences of one court appearance after another in multiple jurisdictions.

    Darr accused Borromei of aiding and abetting the TelexFree Ponzi- and pyramid scheme that affected hundreds and hundreds of thousands of people worldwide.

    Specifically, Darr accused Borromei of helping shape TelexFree’s compensation plan and continuing to assist the company even after TelexFree’s Ympactus branch in Brazil was accused of operating a pyramid scheme in that country.

    Whether this was the first personal bankruptcy filing by a defendant in one of Darr’s adversary actions was not immediately clear. The trustee effectively has sued tens of thousands of alleged TelexFree winners in the United States and other countries.

    On July 13, Borromei notified the Massachusetts Bankruptcy Court that he and Opt3 “have been and continue to be in discussions with counsel to the Trustee regarding the claims in this action, and expect to continue those discussions over the next several weeks.”

    No defense has been entered to Darr’s claims, and Borromei declared bankruptcy in California two months later.

    Sept. 26 [Edit on Sept. 23: Dec. 31 is the new claims deadline] is the deadline for TelexFree victims to file claims in the Massachusetts bankruptcy case through TelexFreeClaims.com.



  • 2 New Lawsuits Filed Against Traffic Monsoon

    Charles Scoville
    Charles Scoville

    3RD UPDATE 4:21 P.M. EDT U.S.A. Two new lawsuits were filed yesterday in Utah federal court against Traffic Monsoon and Charles Scoville. The separate complaints allege breach of contract, with Rizwan Naseer Puri and Pokhunduth Vickash Thoree listed as the plaintiffs.

    The development appears to mark the first instances of private individuals suing Scoville and his company in a U.S. court.

    A listing for a U.K. solicitor named Pokhunduth Vickash Thoree exists at the Law Society, and the London address on the complaint against Traffic Monsoon and Scoville is the same as the address of the lawyer.

    Thoree contends in the complaint that he paid the defendants $138,350 for 2,777 “Ad Packs” between May 10 and July 25, 2016, expecting to be paid $1 a day per ad pack. The SEC sued Traffic Monsoon and Scoville on July 26, alleging securities fraud and a Ponzi scheme.

    In addition to seeking the return of his $138,350 outlay, Thoree wants $149,958 for lost ad-pack earnings and an additional $120,000 for “emotional distress, anxiety, depression, insomnia, Guilt and frustration caused to him by the Defendants,” according to the complaint.

    Meanwhile, the complaint seeks prejudgment interest of 8 percent a day on $408,808 allegedly owed to Thoree by Traffic Monsoon and Scoville. Contrary to Scoville’s view that Traffic Monsoon was not offering an investment, Thoree identifies himself as an individual who “invested into their business.”

    He further contends that Traffic Monsoon was openly promoted as an investment opportunity.

    Scoville may be facing court action on a third front. At least two class-action firms in the United States are investigating Traffic Monsoon. No complaints have been docketed to date.




  • Dawn Wright-Olivares Of Zeek Rewards Sentenced To 7.5 Years In Federal Prison

    Dawn Wright-Olivares.
    Dawn Wright-Olivares.

    BULLETIN: Dawn Wright-Olivares, the former COO of Zeek Rewards, has been sentenced to seven and one-half years in federal prison. The sentence was imposed by U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina. The office of U.S. Attorney Jill Westmoreland Rose prosecuted Wright-Olivares for investment- and tax-fraud conspiracy.

    Daniel Olivares, the stepson of Wright-Olivares and Zeek’s key programmer, also was sentenced today. Cogburn imposed a two-year prison term against Olivares, who was charged with investment-fraud conspiracy.

    Both defendants had agreements with prosecutors and pleaded guilty in February 2014, more than two years in advance of the trial of Zeek operator Paul Burks. Burks, 69, was convicted by a jury in July 2016 on charges of mail fraud, wire fraud, conspiracy to commit both and tax-fraud conspiracy. No sentence date has been set.

    Prosecutors said Zeek was a cross-border fraud that had gathered hundreds of millions of dollars operating over the Internet. Hundreds of thousands of victims were defrauded. Only TelexFree, another cross-border MLM “program,” may be larger when measured by the number of persons fleeced.

    In addition to the criminal charges, Wright-Olivares, 48, and Olivares, 34, both of Clarksville, Ark., faced serious civil litigation from the SEC and from the court-appointed receiver in the Zeek case. The SEC accused them of keeping Zeek participants in the dark about a federal investigation and Zeek’s “imminent collapse” while accepting “substantial sums of money from the scheme.”

    In the end, Wright-Olivares and Olivares ended up with nothing.

    Before its August 2012 collapse in a pile of Ponzi rubble, Zeek tried to dupe people into believing they were not making an investment. Any number of current schemes are doing the same thing.

    Among other things, the Zeek case shows that key executives aren’t the only people who risk prosecution for pushing online fraud schemes. In December 2015, the SEC charged alleged Zeek promoter Trudy Gilmond with fraud.

    Separately, Kenneth D. Bell, the Zeek receiver, has been pursuing hundreds of millions of dollars in clawback claims against alleged net winners globally. Bell said he’d be in court today to present the sentencing judge letters from Zeek victims.

    Jaymes Meyer, a Zeek payment vendor, last month was sentenced to 15 months in prison for obstruction of justice.

  • URGENT >> BULLETIN >> MOVING: Superseding Indictment Against TelexFree’s Merrill and Wanzeler

    Carlos Wanzeler.
    Carlos Wanzeler.

    UPDATED 4:21 P.M. EDT U.S.A. With trial set to begin on Oct. 24, an eye-popping superseding indictment has been returned in Massachusetts federal court against TelexFree figures James Merrill and Carlos Wanzeler.

    The indictment adds eight counts of engaging in monetary transactions in property derived from specified unlawful activity and includes a money-laundering forfeiture allegation.

    Merrill and Wanzeler originally were indicted in July 2014, with the charging documents alleging eight criminal counts of wire fraud and one criminal count of wire-fraud conspiracy.

    The original charges remain intact in the superseding indictment. With the new charges, Merrill and Wanzeler potentially face decades more in prison if convicted.

    Wanzeler allegedly fled the United States in 2014 and is described by U.S. prosecutors as an international fugitive.

    Merrill recently failed in efforts to suppress certain evidence gathered by the U.S. Department of Homeland Security.

    TelexFree, alleged to be a cross-border pyramid and Ponzi scheme, may have generated more than $3 billion in illicit transactions.

    NOTE: Our thanks to the ASD Updates Blog.




  • Zeek Receiver Has $104K Judgment Against TrafficMonsoon Pitchman Now Pushing TrafficPowerline

    Screen shot from federal court files. Masking by PP Blog.
    Screen shot from federal court files. Masking by PP Blog.

    On Oct. 14, 2015, the federal court clerk for the Western District of North Carolina signed a judgment of $104,743.55 against Adrian John Hibbert of Sully, United Kingdom. The judgment was in favor of Zeek Rewards’ receiver Kenneth D. Bell, records show.

    Bell had sued Hibbert and other U.K. residents in March 2015 for return of their alleged Ponzi scheme winnings, plus interest. The SEC shut down Zeek in August 2012, alleging a massive cross-border fraud that had gathered hundreds of millions of dollars.

    Hibbert appears not to have entered a defense to Bell’s claims that he had received more than $82,000 from Zeek and that those winnings constituted Ponzi proceeds that must be returned to victims.

    Instead, he pushed other cross-border, online schemes such as Traffic Monsoon, shut down by the SEC in July after allegedly gathering more than $207 million. With Traffic Monsoon facing a Sept. 23 hearing in Utah, Hibbert has turned his attention to Traffic Powerline, according to promos on YouTube.

    The development shows that money tainted by fraud may be flowing between and among schemes.

    Bell has raised the issue of MLMers moving from one fraud scheme to another.

    BehindMLM.com has reported TrafficPowerline is related to a recently collapsed Ponzi scheme known as MoBrabus.

    Pearse Donnelly of both TrafficPowerline and MoBrabus has been threatening BehindMLM.

    NOTE: Thanks to the ASD Updates Blog.




  • SINISTER: TrafficPowerline, A Ponzi-Board ‘Program,’ Threatens BehindMLM

    “The threat did not explain now a negative review on BehindMLM could be any worse than a fawning sales pitch on MoneyMakerGroup. ‘Programs’ that have appeared on that forum have caused billions of dollars in losses globally.” — PP Blog, Sept. 5, 2016

    trafficpowerlinelogoTrafficPowerline, a “program” whose thread-starter at the MoneyMakerGroup Ponzi forum has more than 4,700 posts, reportedly is threatening BehindMLM.com because of a negative review. (More on the bizarre and sinister threat to artificially link BehindMLM to malware and porn below.)

    The mere presence of TrafficPowerline on MoneyMakerGroup suggests tainted proceeds from any number of scams could be flowing to the emerging program. “proReflex” is the starter in a thread dated July 23. The post begins with the classic line of “I am not the Admin.”

    MoneyMakerGroup is listed in U.S. federal court files as a place from which Ponzi schemes are promoted. Infamous schemes such as Zeek Rewards, AdSurfDaily, TelexFree and many others were listed there, contributing to a condition under which polluted money flows from scheme to scheme to scheme.

    A “program” similar to TrafficPowerline — Traffic Monsoon — was shut down by the SEC on July 26, just three days after TrafficPowerline made its MoneyMakerGroup debut. Like TrafficPowerline, TrafficMonsoon was a Ponzi-board scheme.

    In a post dated Sept. 5, BehindMLM reported that Pearse Donnelly of TrafficPowerline and an earlier scheme known as “MoBrabus” was the source of the threat. MoBrabus also was listed on the Ponzi boards. One of its payment processors was Payza, which the court-appointed receiver in the Zeek case has accused of facilitating that mammoth, cross-border scheme.

    Donnelly, according to BehindMLM, demanded the review be taken down within 72 hours or else a “negative SEO” campaign against BehindMLM would begin.

    Tools used against the well-known review site would include “SGA, Xrummer, Scrape BoX, SeNuke and other SEO tools at our disposal or from service providers to create thousands of low PR, PBN, PN, Porn, Link Farms and Malware site backlinks to your site along with teen-girl 10% free sex online 9% harmful for your computer 8% do not open this link 8% porn 8% adult content harmful 8% computer virus 8% dangerous 8%.”

    The apparent TrafficPowerline aim is to artificially damage BehindMLM’s worth with Google and other search engines through fraudulently placed links.

    Despite bizarrely claiming he was “nicely” requesting BehindMLM to kill the review and not issuing a threat. Donnelly reportedly went on to write that “I am fucking serious OZ do not fuck with me take down the fucking pages or I will make it my little project to fuck your site up.”

    The threat did not explain now a negative review on BehindMLM could be any worse than a fawning sales pitch on MoneyMakerGroup. “Programs” that have appeared on that forum have caused billions of dollars in losses globally.

    Sites sometimes have been known to overplay their hands when trying to bludgeon critics. KlearGear.com allegedly once threatened negative reviewers with a fine of $3,500. The site ended up getting sued by a public advocacy group.

    Because the PP Blog today was able to access the TrafficPowerline website, it means the site is accessible in the United States — after the TrafficMonsoon case and the allegations of securities fraud and after California passed a law that backs consumers if companies try to strongarm consumers by limiting speech through nondisparagement clauses.




  • DEVELOPING STORY: Possible Traffic Monsoon Data Breach

    trafficmonsoonlogoDEVELOPING STORY: During its routine reporting today, the PP Blog observed information that strongly suggests a data breach occurred at Traffic Monsoon or within a sponsor’s organization — possibly in the summer of 2015.

    The SEC, which charged Traffic Monsoon and alleged operator Charles David Scoville of Utah last month with running a massive, cross-border Ponzi scheme, did not immediately respond to a request for comment. Traffic Monsoon allegedly gathered at least $207 million.

    If a breach can be substantiated, it would mean that certain personally sensitive information of at least hundreds of Traffic Monsoon participants has been compromised. The information appears initially to have been published on a website with an Arabic audience. The site also includes certain information in English, including what we’d describe as purported PayPal payment “proofs” for various amounts.

    What’s clear at the moment is that the website uses the term Traffic Monsoon as two of the words that form its name. Information on the site suggests certain Traffic Monsoon participants in the United States, the Netherlands, Latvia, South Africa, India, Sweden, Malaysia, Germany, Canada, Serbia, Romania, Israel, Indonesia, the United Kingdom, Australia, the Philippines, Belgium, Argentina and other nations may have been affected.

    This would not be the first time a “program’s” database has leaked onto the web. It previously has happened with cash-gifting schemes, perhaps particularly if sponsors were maintaining their own databases of recruits and did not secure them properly.




  • Zeek Receiver Establishes Victims’ Email Address In Advance Of Sentencing Next Month For Dawn Wright-Olivares and Daniel Olivares

    Dawn Wright-Olivares, former Zeek COO.
    Dawn Wright-Olivares, former Zeek COO.

    2ND UPDATE 12:53 P.M. EDT U.S.A. With sentence court set next month for Zeek Rewards’ figures Dawn Wright-Olivares and Daniel Olivares, Zeek receiver Kenneth D. Bell has established an email address for victims who wish to tell their story to the court.

    “Victims of these offenses are entitled to be heard at sentencing,” Bell wrote in an Aug. 29 announcement on the receivership website. “If a victim would like to have a letter describing the impact that ZeekRewards had on them submitted to the Court please send an email to HearingLetter@zeekrewardsreceivership.com. I will be attending the hearings on behalf of all ZeekRewards victims and will present your letters to the Court.”

    Sentencing is set for 9:30 a.m. on Sept. 13, Bell wrote.

    Wright-Olivares and Olivares pleaded guilty in February 2014 to the criminal charges against them. Zeek operator Paul Burks was found guilty on criminal charges last month. No sentencing date has been announced for him.

    Under the terms of her plea agreement, Wright-Olivares faces a maximum of 10 years for investment-fraud conspiracy and tax-fraud conspiracy. Olivares face a maximum of five years for investment-fraud conspiracy.

    Bell wrote that “the Court would like to hear about any of the below circumstances”:

    • Becoming insolvent;
    • Filing for bankruptcy under the Bankruptcy Code;
    • Suffering substantial loss of a retirement, education, or other savings or investment fund;
    • Making substantial changes to his or her employment, such as postponing his or her retirement plans;
    • Making substantial changes to his or her living arrangements, such as relocating to a less expensive home; and
    • Suffering substantial harm to his or her ability to obtain credit.

    Burks potentially faces 65 years in federal prison.