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Category: Ad Surf Daily

MODERN MLM PR: TelexFree Rep’s Blog On Loss Of Payment-Processing Firm: ‘We Killed Them’

The FaithSloan Blog bizarrely announces that TelexFree has “killed” GPG, a payment processor.

If continuing to recruit during multiple pyramid-scheme probes even as a judge and prosecutor reportedly had been threatened in Brazil with death were not enough, another MLM PR disaster is unfolding: The Blog of Faith Sloan, late of Zeek Rewards and Noobing, an HYIP Ponzi scheme that ripped off people with hearing impairments, wants TelexFree members to know why the alleged pyramid scheme no longer is using Global Payroll Gateway (GPG).

“We killed them,” FaithSloan.com reports flatly on the fate of GPG.

Meanwhile, there are competing reports that GPG had given the boot to TelexFree, not the other way around.

No so, according to FaithSloan.com, which is claiming TelexFree “killed” GPG because it “Could not handle the 50,000 accounts that came into their system.”

TelexFree now has turned to “ipayout’s globalewallet,” according to FaithSloan.com.

Whether TelexFree planned to “kill” IPayout if any hiccups developed in its purported processing of money for TelexFree was not disclosed in the undated post announcing that TelexFree had “killed” GPG. The apparent message in the TelexFree branch of MLM La-La Land, however, is that affiliates will ignore or downplay unsettling events in Brazil such as the pyramid probes and reported death threats and will blame any company that fails to find favor with TelexFree and its international army of cross-border pitchmen.

TelexFree appears to have sought to transition to GPG in mid-August, with affiliates trumpeting the firm on the web as the answer to TelexFree’s troubles. But problems developed within weeks (if not days), and TelexFree affiliates then announced the firm was switching to IPayout. In about a month, GPG went from the penthouse to the doghouse in the minds of certain TelexFree promoters. Now, IPayout apparently has been given the chance to occupy the penthouse in the incongruous world of TelexFree. Will it slip into the TelexFree doghouse and perhaps be “killed” by the firm, like rival GPG before it?

Within days of the announcement that TelexFree had brought IPayout aboard after the purported failure of GPG, TelexFree executive Carlos Costa announced that TelexFree was seeking bankruptcy protection in Brazil. While making the announcement, Costa curiously waved the flags of Portugal and Mediera. Like former AdSurfDaily President Andy Bowdoin, Costa also suggested God was on the company’s side.

Bowdoin is serving a 78-month prison sentence in the United States. His ASD “program” was a $119 million Ponzi scheme. Among other things, Bowdoin claimed a 2008 raid on his “program” that promised a precompounding payout of 1 percent a day was the work of “Satan.”

Some TelexFree affiliates claim that $15,125 sent to the company fetches a profit of at least $42,075 in a year. Images of Jesus Christ have been used in TelexFree promos.

Noobing was an autosurf HYIP scheme pushed by former ASD pitchmen that tanked in 2009 after its parent company was implicated by the FTC in a government-grants scheme that led to combined judgments totaling more than $54 million. The scam even was discussed at a Senate hearing.

A court-appointed receiver determined that Noobing was impossibly upside-down. Affiliate Strategies Inc., the U.S.-based parent company, registered several corporations offshore, including Noobing, formed in the Caribbean island of Nevis; ASI Management Inc., formed in Belize on March 24, 2009; Landmark Publishing Group LLC, formed in Nevis on March 25, 2009; Landmark Publishing LLC, formed in Nevis on March 25, 2009; International Research and Writing Group LLC, formed in Nevis on July 1, 2009; and International Publishing Group LLC, formed in Nevis on July 1, 2009.

All in all, the receiver said in 2009, “the ASI defendants have formed and operated eighteen additional Kansas LLCs as subsidiaries of Defendant Apex Holdings International LLC.” The receiver proposed a plan by which all assets tied to Noobing’s parent would be sold — right down to a stainless-steel wastebasket in the women’s restroom.

In 2010, the PP Blog interviewed a 64-year-old woman with a profound hearing loss. The interview was conducted through the woman’s interpreter. The woman told the PP Blog she has lost $5,300 in Noobing and could not sleep at night. Noobing later was added as a receivership defendant. The receiver said that Noobing and 14 other companies under the ASI umbrella had become the subjects of “numerous inquiries” from “tax authorities,” creditors and “former independent contractors.”

TelexFree has U.S. footprints in Massachusetts and Nevada. The firm also now purports to be operating in England. TelexFree is the subject of multiple pyramid-scheme probes in Brazil, where it operates through an entity known as Ympactus Comercial Ltd.

There have been reports that at least one judge and one prosecutor involved in the Brazil probe have been threatened with death.

HYIP fraud schemes spread in part because promoters engage in serial disingenuousness and ignore red flags such as unusually consistent returns, claims of guaranteed payouts and the circuitous flow of money. Some TelexFree affiliates have provided ASD-like coaching tips to prospects on how to speed the flow of money to the firm.

Sep 22, 2013
Legisi HYIP Ponzi Pitchman Matthew John Gagnon Is In Federal Custody

Matthew John Gagnon

Will it be the shot heard ’round the HYIP world — or will serial Ponzi-board and social-media fraudsters continue to pretend it is meaningless?

Matthew John Gagnon, a 45-year-old pitchmen for the $72 million Legisi HYIP Ponzi scheme and other online fraud schemes, is listed as an inmate at Federal Correctional Institution (FCI) in Sheridan, Ore.

In July, Gagnon was sentenced to 60 months in prison, ordered to pay $4.4 million in restitution and further ordered to serve three years’ supervised probation after his prison release. He was permitted to self-report to prison. That appears to have occurred yesterday.

Gagnon colleague and Legisi operator Gregory N. McKnight was sentenced to a prison term of more than 15 years. McKnight’s age is listed as 53. He was sentenced last month and was ordered taken into custody immediately. He is listed as an inmate at the FCI in Milan, Mich. McKnight was ordered to pay more than $48.9 million in restitution and further ordered to serve three years’ supervised probation after his prison release.

Legisi was promoted on Ponzi-scheme forums such as TalkGold and MoneyMakerGroup. In 2007, Legisi became the subject of an undercover investigation by state regulators in Michigan and the U.S. Secret Service. Both criminal and civil charges followed.

In court filings on June 6, Legisi receiver Robert D. Gordon said more than 85 percent of the $72.6 million directed at Legisi had flowed through e-Bullion.

e-Bullion is a now-defunct processor. One-time e-Bullion operator James Fayed is on California’s death row after being convicted of ordering the brutal contract slaying of Pamela Fayed, his wife and a potential witness against him.

AdSurfDaily, a $119 million Ponzi scheme also promoted on the Ponzi forums, also accepted money from e-Bullion, according to court filings.

Legisi’s Terms of Service read like an invitation to join an international financial conspiracy. Members had to affirm they were not associated with the SEC, the IRS, the FBI and the CIA — along with “Her Majesty’s Police,” the Intelligence Services of Great Britain and the Serious Fraud Office.

Sep 17, 2013
SPECIAL REPORT: Like AdSurfDaily And OneX Before It, Alleged TelexFree Pyramid Scheme May Be Engaging In Game Of Payment-Processor Roulette

“While reviewing the ASD website in the District of Columbia, [an undercover agent] found a posting within ASD’s News section, apparently posted by ASD on July 2, 2008. The title of the posting was, “Alert Pay & Direct Deposit are being phased out July 31, 2008.” According to ASD’s posting, “We have notified BOA not to accept cash or personal checks for deposit account – English or Spanish.” ASD further stated, “Please remember that the preferred method of purchasing Ad Packages is by mailing a Check or by Solid Trust Pay . . . Solid Trust Pay is a Canada based money transmitting and payment company that, like the e-Gold system, operates over the Internet. It appears that beginning August 1, 2008, Solid Trust Pay will be ASD’s preferred method for receiving funds from members, and for paying rebates and commissions to members . . . Within the past two weeks, ASD has wired several million dollars to Solid Trust Pay from its BOA Accounts. A TFA also learned that earlier in July 2008, a bank other than BOA closed the last account that was controlled by Bowdoin or family members after that bank determined, and explained to them, that an investigation by the bank determined that Bowdoin appeared to be operating a Ponzi scheme.” — AdSurfDaily Ponzi scheme forfeiture complaint, August 2008

TelexFree affiliate promos encouraging participants to register for International Payout Systems (I-Payout) began to appear online in recent hours. Just last month, TelexFree affiliates were encouraged to register for Global Payroll Gateway, another e-Wallet vendor that supposedly would solve TelexFree’s payment problems as a pyramid-scheme probe moved forward in Brazil. There now are reports online that GPG has dumped TelexFree, leading to questions about whether TelexFree is trying to port its alleged fraud scheme to yet another vendor — I-Payout. Source: Google search results.

In 2008, the U.S. Secret Service effectively accused the AdSurfDaily MLM “program” of playing a game of payment-processor roulette as U.S. law enforcement put the squeeze on certain money-movers, the willfully blind enablers of online fraud schemes.

ASD, a $119 million HYIP Ponzi scheme that led to a 78-month prison sentence for operator Andy Bowdoin, started out by accepting “e-Gold and Virtual Money,” according to a Ponzi-scheme forfeiture complaint filed in federal court in August 2008.

But ASD, according to the complaint, realized e-Gold had come under investigation for enabling the laundering of money, something that could put the heat on ASD.

“Shortly after publicity surrounding the government’s investigation into e-Gold appeared, ASD discontinued using the e-Gold system as a means for receiving member funds,” the complaint alleged.

And even as these events were occurring, according to court filings in the ASD case and in other cases, Robert Hodgins, a supplier of debit cards and the operator of Virtual Money Inc. — now listed by INTERPOL as an international fugitive — came under investigation in Connecticut amid allegations he was assisting in the laundering of narcotics proceeds in Medellin, Colombia, and prepping himself to assist in the laundering of funds in the Dominican Republic.

Virtual Money, whom some ASD members said was supplying debit cards to ASD, also was linked to the PhoenixSurf Ponzi scheme, according to court filings.

In December 2010, federal prosecutors alleged that ASD also had accepted money from e-Bullion, a California firm that processed payments for Ponzi schemes, including the $72 million Legisi HYIP scheme in Michigan that led to prison sentences for operator Gregory McKnight and pitchman Matthew John Gagnon. E-Bullion operator James Fayed has been sentenced to death for ordering the brutal contract slaying of his wife, a potential witness against him. Pamela Fayed’s throat was slashed repeatedly in the shadows of a Greater Los Angeles parking garage, her husband seated on a nearby park bench “like he doesn’t have a care in the world.”

ASD, according to court filings, also used AlertPay and SolidTrustPay, money-movers based in Canada that have been linked to multiple Ponzi schemes, including the alleged $600 million Zeek Rewards Ponzi scheme broken up by the SEC last year.

Not even Bowdoin’s arrest in 2010 stopped him from pitching fraud schemes, according to court filings. Facing serious criminal charges for his actions in ASD, Bowdoin (in 2011) became a pitchmen for the OneX “program,” which federal prosecutors later alleged to be a pyramid scheme recycling money in ASD-like fashion. Among Bowdoin’s fellow OneX pitchmen was T. LeMont Silver, later of Zeek and later of JubiMax and GoFunPlaces, two MLM “programs” that are suing each other amid allegations of financial fraud.

At one time, OneX claimed to have a relationship with SolidTrustPay. It then claimed to have ended that relationship and to have started a relationship with I-Payout. Earlier, I-Payout had listed the uber-bizarre TextCashNetwork MLM “program” with ties to the Phil Piccolo organization as a “selected client.” TextCashNetwork now appears to have disappeared, but still is operating with the acronym “TCN” — this time as TrueCashNetwork. How the “new” TCN is processing payments is unknown. What is known is that someone associated with the “new” TCN has sent emails to “winners” in the Zeek scheme in an apparent bid to get them to flog for the new iteration, an apparent investment arm of which is being promoted as an opportunity to earn an interest rate of 50 percent.

Now — as incredible as it seems — promoters of the alleged TelexFree pyramid scheme operating in Brazil and the United States now are claiming that TelexFree is using I-Payout, known formally as International Payout Systems Inc. Equally incredibly, this is happening less than a month after TelexFree promoters advised TelexFree participants to register with Global Payroll Gateway (GPG), another eWallet company and supplier of debit cards, as a means of getting paid after payouts to Brazilian members of TelexFree were blocked in Brazil.

Just last month, TelexFree affiliates were encouraging prospects to register with Global Payroll Gateway (GPG). In recent hours — and amid reports GPG has given TelexFree the boot — TelexFree affiliates have been urged to register with I-Payout. Source: Google search results.

There are reports online, including on Facebook from self-identified members of TelexFree, that GPG gave TelexFree the boot in recent days. No sooner did those reports surface than videos went up on YouTube encouraging TelexFree members to register for I-Payout.

One of the reports that TelexFree suddenly had shifted from GPG to I-Payout is published on the MoneyMakerGroup forum. MoneyMakerGroup’s name appears in U.S. court files as a place from which Ponzi and fraud schemes are promoted. Both FINRA and the SEC have warned that HYIP schemes spread in part through social-media sites such as forums, YouTube and Facebook.

Because international MLM HYIP fraud schemes often have promoters in common — and because the schemes are promoted on Ponzi cesspits such as MoneyMakerGroup and TalkGold — proceeds from the schemes can flow into banks at the local level, putting them in the position of becoming warehouses for the ill-gotten gains of participants, including winners and insiders. The use of stored-value debit cards such as those in play in HYIP schemes can lead to the quick dissipation of assets, meaning that victims of an HYIP scheme may have limited hope (or even no hope) that a recovery can be made for their benefit.

The most recent incongruous events involving TelexFree are occurring even as at least one judge and one prosecutor involved in the TelexFree pyramid probe in Brazil reportedly have been threatened with death. And, as was the case with ASD, some promoters of TelexFree have claimed an ability to expedite the flow of money to the scheme — perhaps through back-office transactions within the TelexFree system.

Also see report on BehindMLM.com.

Sep 14, 2013
TELEXFREE: Promoters Tell Brazilian Prospects To Create Registration Address In England — And To Appear At Door Of Brazilian Supreme Court Judge

EDITOR’S NOTE: At the time of the publication of this story, the PP Blog was experiencing trouble loading graphics. The probable cause of this is a conflict between certain plugins used by the Blog. We are working to correct this problem . . .

** _____________________________ **

UPDATED 12:25 P.M. EDT (U.S.A.) TelexFree, an alleged pyramid scheme operating as an MLM that has U.S. arms in Massachusetts and Nevada and effectively was shut down in June in Brazil (by court order in Brazil) but continues to operate elsewhere, seems on the cusp of cementing itself as a marquee example of cross-border fraud.

Several days ago, the company inexplicably began to publish the address of a purported office in the United Kingdom in Watford — near London. Today an apparent TelexFree promoter writing on a media site in Brazil appears to be instructing Brazilian affiliates to enroll with the firm by using any address in London, thousands of miles away. This coaching appears to originate from a hotmail address. (See story/comments thread in Portuguese; see translation of story/comments thread via Google Translate.)

The center of London is approximately 5,700 miles away from the center of Rio de Janeiro, the Brazilian city that will play host to the 2016 Olympics. London hosted the 2012 Olympics. There are dozens of pyramid-scheme probes under way in Brazil, in the run-up to the 2016 Summer Games.

Even more troubling than the suggestion that Brazilians should fabricate a London address to enroll in TelexFree is a suggestion from another apparent TelexFree affiliate on the same site in Brazil that affiliates should appear at the door of a judge of the Supreme Court of Brazil. It is unclear from the English translation of the post whether any protest aimed at the judge would occur at the Supreme Court or at his personal residence. Plenty of peaceful protests occur in Brazil. But a protest at the residence of a judge potentially would introduce the specter of menacing — something that was present in the AdSurfDaily Ponzi case in the United States.

Purported American “sovereign citizen” Kenneth Wayne Leaming — a figure in the ASD story — was convicted earlier this year of multiple charges, including filing bogus liens against public officials involved in the ASD case. The evidence in the case strongly suggested that Leaming intended to stalk the children of the Chief Justice of the United States at the school they attended — as part of a plot to serve paperwork on the Chief Justice.

TheTelexFree story is similar in certain key ways to the ASD story. For starters, some ASD members refused to believe that a crime had been committed against them and taunted prosecutors and the U.S. Secret Service with threats. There have been reports in Brazil of death threats against a judge and a prosecutor. Both the ASD and TelexFree schemes were targeted at Christians. Meanwhile, members of both “programs” were promised preposterous, unusually consistent returns. In the ASD case, the precoumpounding returns computed to an annual return in excess of 300 percent. Some TelexFree promoters have claimed that sending $15,125 to TelexFree results in a tripling or quadrupling of the money in a year.

Beyond that, it almost certainly is the case that some TelexFree affiliates also were pitchmen for ASD and for Zeek Rewards, an MLM “program” described by the SEC last year as a $600 million Ponzi- and pyramid scheme. This leads to questions about whether criminal MLM combines are driving business to purported “opportunities” despite the legal, financial and social consequences. In April 2013, the SEC said a “program” known as Profitable Sunrise was using a mail drop in England as part of a massive scam that used a series of offshore bank accounts potentially to fleece people of faith of millions and millions of dollars.

Now, TelexFree purports to be operating from England. The mere listing of a business address is not proof that no scam is occurring, despite repeated bids by HYIP schemes to create an air of legitimacy by publishing an address or registering it with a government. Profitable Sunrise, for instance, had a registered address. So did Zeek. So did AdSurfDaily. Both of the TelexFree addresses in the United States appear to be virtual offices or mail drops.

And TelexFree affiliates have been sending confusing messages for months on how to send money to the firm. This sometimes signals that money-laundering, wire fraud or another crime is occurring. Some of the TelexFree affiliate bids strongly resemble events at ASD — events that led to the criminal indictment and subsequent sentencing of ASD President Andy Bowdoin to a 78-month prison term. (Also see Aug. 21 PP Blog story on a TelexFree shift to yet another payment processor.)

BehindMLM.com is reporting that “rampant fraud” may be affecting TelexFree’s operations.

Sep 9, 2013
United Kingdom’s Financial Conduct Authority Issues Warning On SolidTrustPay, An HYIP Darling On The Ponzi Boards

UPDATED 3:33 P.M. EDT (U.S.A.) Thanks to PP Blog reader “Tony,” who first posted a link to the FCA warning in this story thread on how a Profitable Sunrise Facebook site was being used to promote TelexFree, an alleged pyramid scheme.

In April 2013, the SEC described Profitable Sunrise as a murky offering fraud that may have gathered tens of millions of dollars. SolidTrustPay, a Ponzi-forum darling used by a stunning number of schemes, reportedly was one of the processors used by Profitable Sunrise. Zeek Rewards, alleged last year by the SEC to have been a combined Ponzi- and pyramid scheme that had gathered at least $600 million, also used SolidTrustPay, according to court filings. So did AdSurfDaily, a $119 million Ponzi scheme broken up by the U.S. Secret Service in 2008. And so did JSSTripler/JustBeenPaid, a “program” purportedly operated by Frederick Mann that has spawned at least three reload scams and, like ASD, may have ties to the “sovereign citizens” movement. “Sovereign citizens” may be gaining a toehold in Canada, one of the bases of SolidTrustPay. (Please note that the “opportunities” referenced above constitute only a small sampling of the HYIP schemes enabled by SolidTrustPay.)

Also see this 2012 Consent Order between the Securities Department of the U.S. state of Arkansas and SolidTrustPay in which SolidTrustPay agreed to pay a $60,000 civil penalty and did not contest findings that it had been operating illegally in the state for years, had processed about $12 million in Arkansas through about 43,600 transactions and had illegally mined more than $331,000 in fees and commissions in the state.

What follows below is the warning on SolidTrustPay issued on Aug. 30, 2013, by the Financial Conduct Authority (FCA) of the United Kingdom. From the FCA:

SolidTrust Pay Ltd

_{Published: 30/08/2013}

We believe this firm has been providing financial services or products in the UK without our authorisation. Find out why to be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers.

Almost all firms and individuals offering, promoting or selling financial services or products in the UK have to be authorised by us.

However, some firms act without our authorisation and some knowingly run scams like share fraud.

This firm is not authorised by us but has been targeting people in the UK:

SolidTrust Pay Ltd

Website: www.solidtrustpay.com

How to protect yourself

We strongly advise you to only deal with financial firms that are authorised by us, and check the Financial Services Register to ensure they are. It has information on firms and individuals that are, or have been, regulated by us.

If a firm does not appear on the Register but claims it does, contact our Consumer Helpline on 0800 111 6768.

There are more steps you should take to protect yourself from unauthorised firms.

You should also be aware that if you give money to an unauthorised firm, you will not be covered by the Financial Ombudsman Service or Financial Services Compensation Scheme (FSCS) if things go wrong.

Report an unauthorised firm

If you think you have been approached by an unauthorised firm or contacted about a scam, you should contact our Consumer Helpline on 0800 111 6768. If you were offered, bought or sold shares, you can use our share fraud reporting form.

You can see more ways to report an unauthorised firm and find out what to do if you have been scammed.

Sep 4, 2013
BULLETIN: George Theodule, HYIP Ponzi Huckster Identified In 2008 By SEC, Arrested On Criminal Charges

George Louis Theodule, identified by the SEC in a 2008 civil case as a multimillion-dollar Ponzi huckster and affinity fraudster largely targeting the Haitian community through so-called “investment clubs,” now has been arrested on criminal charges, federal prosecutors in the Southern District of Florida said.

Investors were duped into believing Theodule’s HYIP “program” through entities known as Creative Capital Consortium LLC and A Creative Capital Concept$ LLC had been endorsed by a regulatory agency, the SEC said in December 2008

The FBI and the Florida Office of Financial Regulation joined in the probe, prosecutors said.

“This case provides an egregious example of someone exploiting the trust of members of their own community,” said OFR Commissioner Drew J. Breakspear.

“Ponzi schemes, affinity fraud schemes, and high-yield investment fraud scams such as this pose a serious threat to people,” said U.S. Attorney Wifredo A. Ferrer.

Theodule, formerly of Wellington, Fla., is 52. He has been charged with with multiple counts of wire fraud, securities fraud and money-laundering, prosecutors said.

“This is a stark reminder that promises of large returns with little risk should immediately send up red flags and make investors run the other way,” said Michael B. Steinbach, special agent in charge of FBI’s Miami office..

Aug 26, 2013
REPORTS: Ice Cream Flavor Named After TelexFree, An Alleged Pyramid Scheme; Separately, TelexFree Affiliates May Be Crossing National Borders To Keep The Money Flowing — Even As Purported Opportunity Turns To New Payment Method

The HYIP world is known for promoters’ bids to change the storyline, but this one may take the cake — or at least be a sweet complement.

There are reports in Brazilian media that a promoter of the TelexFree MLM scheme — alleged to be a massive pyramid — has named an ice cream after TelexFree to show support for the embattled firm.

“The ice cream is not a pyramid,” a person was quoted as saying in DiarioDigital, according to a translation — and neither is its namesake.

Here is a link to the story in Portuguese; here is a link to the English translation by Google Translate.

Recruitment by TelexFree is banned in Brazil while investigations by at least seven Brazilian states proceed. Payments to Brazilian participants by TelexFree likewise are blocked. The purported “opportunity,” however, still is operating in other countries and apparently gathering money and issuing payments.

Separately, Veja.com is reporting that undercover investigators in Brazil have noticed that some Brazilian promoters of TelexFree have crossed national borders into Bolivia and Paraguay to keep TelexFree investment money flowing. Here is a link to the story in Portuguese; here is the link to the English translation by Google Translate.

The United States long has warned about cross-border fraud such as was present in PathwayToProsperity, an alleged $70 million Ponzi scheme whose operator is listed by INTERPOL as an international fugitive. P2P, as the “program” was known, made its way across multiple continents and 120 countries, according to court filings.

Meanwhile, U.S. promoters of TelexFree have been busy watching a promoter’s Aug. 16 YouTube video titled, “How to register your GPG account with TelexFree.”

GPG, according to the video, stands for Global Payroll Gateway.

The company, according to its website, provides services such as loading payrolls onto debit cards. TelexFree, according to the affiliate’s video, is now a GPG client and TelexFree affiliates must “connect” their account to GPG to get paid.

A screen shown in the TelexFree affiliate’s video shows an apparent executive of TelexFree announcing that the changeover to GPG’s services “is causing a delay in our payment process for the first run.”

The FBI long has warned that certain types of debit cards can be abused and that a “shadow banking system” is playing a role in fraud schemes that affect national security.

If TelexFree is adjudicated a scam, it may be difficult for the governments of the world or the receivers/trustees they may appoint to gather proceeds for victims. HYIP money may dissipate quickly, perhaps particularly quickly if it is offloaded with debit cards. In a money-laundering case brought in 2008, federal prosecutors in Connecticut said that millions of dollars in narcotics proceeds were offloaded at ATMs in Colombia.

Robert Hodgins, a Canadian currently listed by INTERPOL as an international fugitive in the Connecticut money-laundering case, reportedly supplied the debit cards through a firm known as Virtual Money Inc. and had ties to the HYIP world and schemes such as PhoenixSurf and AdSurfDaily.

Another screen in the TelexFree affiliate’s video shows folders with titles such as “telexfree,” “Banner[s] Broker, “hyip monitors,” “forex”and “Passive peeps.”

The context of the folders shown in the video is unclear. Banners Broker, however, is a bizarre HYIP scheme. HYIP monitors are websites that monitor whether a particular HYIP site is “paying.” Meanwhile, the word “passive” often is used in HYIP scams that promote tremendous returns for investors inclined to sit back and wait for the payments to flow in, instead of recruiting other investors to earn downline commissions from a “program.”

TelexFree has been promoted on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. The names of both forums appear in U.S. court filings as places from which fraud schemes are advanced.

From a promo for the alleged $600 million Zeek Rewards Ponzi- and pyramid scheme.

Zeek Rewards, an alleged $600 million Ponzi- and pyramid scheme that had a Ponzi-forum presence and became the target of an SEC action last year, was promoted as a “passive” program. Like Zeek, TelexFree purportedly has a requirement that participants post ads for the “program” online.

There have been reports in Brazil that a judge and prosecutor involved in the TelexFree case have been threatened with death.

But not even those disturbing reports were enough to cause TelexFree to cancel a rah-rah event in California last month. The company says it also plans an “at sea” event in December. Earlier, some TelexFree pitchmen provided AdSurfDaily-like coaching tips to enrollees, especially on matters of how to speed the flow of money to the company.

ASD was a $119 million MLM Ponzi scheme broken up by the U.S. Secret Service in 2008. Like Zeek and TelexFree, the ASD “program” also had a Ponzi-forum presence and was promoted as an opportunity for “passive” participants.

Some TelexFree promoters in Brazil appear to believe that TelexFree has been deemed legal in the United States by the U.S. government. This errant belief may in part have been instilled by promoters of TelexFree who worded MLM HYIP pitches to suggest that the U.S. government had authorized the “program.”

Some TelexFree promoters have claimed a payment of $15,125 to the firm will fetch a return of more than $42,000 in a year. Even the cautious “Aunt Ethels” of the world will grow to become keen on TelexFree, according to a promo.

Aug 21, 2013
EDITORIAL: Death Of An MLM Salesman — Brought To You Via Empower Network’s ‘Badass’ Button

This “Badass Content” on Empower Network was about the tragic death of a key Herbalife salesman.

If you’re an MLM company facing a PR problem or a crisis involving the firm and its distributors, don’t expect fellow MLM firm Empower Network to solve it for you. In fact, it’s probably prudent to expect that Empower Network will only magnify your bad press or virally blab the things you’re trying to keep in-house.

To the uber-bizarre Empower Network, the sudden death of a top Herbalife distributor is “badass content” that plays well alongside other Empower Network “badass content” such as a story posted by “Team America” and titled, “Ingredients for Success: An Interview with Nu Skin President and CEO Truman Hunt.”

Background

Herbalife, according to BehindMLM.com, notified distributors last week about the death of John Peterson, saying in an email that Peterson had died as a result of “a tragic accident at his home in Steamboat Springs, Colorado.”

“Tragic” was an apt descriptor, to be sure, especially since the New York Post reported that authorities were looking at the death as a suicide carried out with a gun while the MLM trade tries to come to grips with assertions by Bill Ackman that Herbalife is a pyramid scheme. Peterson was 58, married and the father of three children. He reportedly had earned millions of dollars through Herbalife, in part by driving business to the firm through a purported “leads” program.

Herbalife denies it is a pyramid scheme and has sought to distance itself from such “leads” programs.

But returning to the subject of all this purported “Badass Content”: The “Team America” post about Nu Skin on Empower Network appears to have been lifted in its entirety from the trade publication Direct Selling News by an Empower Network affiliate interested in getting more sign-ups for Empower Network by using DSN’s Nu Skin story as a lure.

Meanwhile, Herbalife’s in-house announcement about the death of Peterson appears also to have been cherry-picked by Empower Network affiliates, reposted on Empower Network’s Blogging platform, repurposed as “Badass Content” and used to lure sign-ups for Empower Network.

When one clicks the incongruous “Badass” button above the Empower Network postings about Peterson’s death, one is taken to a page that in part reads, “Share this Badass Content Now! Click the social network buttons above so all your friends can see this badass content.”

Yes, really. The death of an Herbalife pitchman in the prime of his life while his family grieves qualifies as “Badass Content” on Empower Network.

Another part of the message points visitors to a domain styled “BadassContent.com,” which is registered in the name of David Sharpe of Empower Network LLC. Sharpe is one of EmpowerNetwork’s purported founders, and the LLC is listed as a Florida company with Sharpe as one of its two managers. When the PP Blog tried to visit the “badass” URL about Peterson’s death, the McAfee SiteAdvisor security software used by the Blog issued a “Suspicious Site” warning and a message that in part read, “When we visited this site, we found it exhibited one or more risky behaviors.”

McAfee SiteAdvisor warning about “badasscontent” domain. Red highlights by PP Blog.

Empower Network also appears to control a domain styled BadassButton.com.

On Aug. 12, the PP Blog reported that a video playing on YouTube sought to drive traffic to Empower Network by depicting U.S. Vice President Joe Biden as a recent enrollee in the bizarrely named CashCropCycler HYIP “program” who confesses to President Obama that he’s “[j]ust out bumbling around and sticking my foot in my mouth.”

But if you complain to YouTube about Empower Network, according to David Wood, another of the purported founders, there may be hell to pay, so you should “Back the fuck down.”

“Be warned: BIG, SCARY WARNING,” Wood wrote. “I’m in the process of having lawyers research into whether or not we can sue the shit out of you.”

Yes, really. Welcome to the MLM La-La Land of Empower Network. It’s like the La-La Lands of Zeek Rewards and AdSurfDaily and MPB Today needed a replacement and that some of MLM’s purported greatest thinkers have decided that what the MLM world really needs is even more madness.

Read the Salty Droid swearing back at the purported Empower Network “badasses.” (Salty can curse with the best of them, even when they’re planting the seed he should be executed with a shotgun.)

Can there be any doubt that MLM is just asking for it?

One self-described Christian pastor and Empower Network promoter on YouTube tells his audience that there’s money to be made in Empower Network, despite all the swearing. Just tune it out and recognize that swearing is a personal choice and hardly is limited to the MLM sphere, he instructs.

“This is just an open environment where we accept everybody of all types of beliefs, whether you’re a Christian or an Atheist or a Jew or a Muslim — or, you know, you . . . believe in Scientology and all that good stuff,” the pastor explains.

He added that he looked at network marketing in general as an “opportunity to be able to advance the kingdom of God” and at Empower Network in specific as a “vehicle to help you to get the money that God wants you to have so that you can advance the kingdom of God.”

Had the pitch for Empower Network appeared on Empower Network instead of YouTube, the pastor could have given his God talk its very own “Badass” button (with a representation of a human skull included) to drive traffic.

The only remaining mysteries, we suppose, is whether God, being God, would have cared enough to solve the little problem McAfee has with the “badass” domain — and whether He’d be offended that His name, once again, was being used to promote an MLM “program.”

Did we tell you that the PP Blog received information today that strongly suggested that some “sovereign citizens” were pitching a scheme by which winners in the Zeek Rewards MLM scheme, which the SEC has described a year ago as a $600 million fraud, could short-circuit “clawback” litigation from the court-appointed receiver?

We’ll keep you up to date as that MLM La-La Land story develops.

Aug 19, 2013
TelexFree, MLM Firm That Is Subject Of Pyramid Probe, Says It Will Offer ‘At Sea’ Event

Source: TelexFree website, Aug. 16, 2013.

TelexFree, an MLM “opportunity” under investigation in Brazil amid allegations it is orchestrating a massive pyramid scheme, says on its website that it is conducting an “at sea” event Dec. 15-18.

Perhaps accidentally providing an awkward hint of dire portent, the promo shows the TelexFree logo superimposed on the side of a luxury ocean liner that is nearly beached in the tropics. Even more incongruously, it is being published not only against the backdrop of the pyramid probe, but also against reports that a judge and prosecutor in Brazil have received death threats related to the investigation.

Promoters of MLM HYIP scams such as JSSTripler/JustBeenPaid (2 percent a day) and AdViewGlobal (1 percent a day) previously have advertised sea cruises. It is unclear if the JSS/JBP cruise ever came off.

AVG’s 2009 cruise coincided with a bid (apparently unsuccessful) by the “program” to line up another bank and wire facilitator to assist in the swindling of investors who’d previously been swindled in AdSurfDaily’s $119 million Ponzi scheme that advertised a 1-percent-a-day payout.

AdViewGlobal, which purported to operate from Uruguay, bizarrely announced its new scam on the same day the President of the United States announced a crackdown on offshore fraud. Federal prosecutors later said they’d tied AVG to ASD President Andy Bowdoin.

Some TelexFree promoters say a payment of $15,125 to the program results in a profit of at least $1,100 a week for a year. Other promoters claim they’re “100% telexfree,” which apparently means they’ll stand by their “program” no matter what.

Aug 16, 2013
REPORT: TelexFree Has No License To Offer VOIP Services In Brazil; Claim Reminiscent Of U.S. Government Assertion Against AdSurfDaily Ponzi Schemer Last Year

UPDATED 12:29 P.M. EDT (U.S.A.) TelexFree, which operates through Ympactus Comercial Ltd. and is under investigation amid allegations in Brazil it is running a massive pyramid scheme, has no license with Brazil’s telecommunications regulator to offer VOIP services, according to this report in Brazilian media. The regulatory agency is known as Anatel.

Here is a translation from Portuguese to English by Google Translate.

Although the degree to which Anatel regulates VOIP providers in Brazil was not immediately clear, the assertion was reminiscent of one the U.S. government made against AdSurfDaily Ponzi schemer Andy Bowdoin last year: that Bowdoin, now in federal prison for ASD’s $119 million fraud, earlier had sold contracts for a telecommunications company that wasn’t licensed by the U.S. Federal Communications Commission.

TelexFree denies it falls under Anatel’s regulatory framework.

Bowdoin, 78, pleaded guilty to wire fraud in the ASD case in May 2012, less than a month after the U.S. government made the assertions that he’d ignored FCC regulations in a pre-ASD securities scam in Alabama in the 1990s. Prosecutors also linked Bowdoin to the AdViewGlobal HYIP scam and a purported venture known as OneX that allegedly recycled money in ASD-like fashion.

ASD, an MLM company, promised to pay members 1 percent a day. A grand jury charged Bowdoin with selling unregistered securities as investment contracts, securities fraud and wire fraud. He was arrested in December 2010.

Like ASD, TelexFree is an MLM company. Some TelexFree promoters claim a payment of $15,125 to the firm for the purchase of a “contract” fetches a profit of more than $42,000 in a year.

There have been reports of death threats against a judge and prosecutor involved in the TelexFree case in Brazil.

AdViewGlobal and OneX also were MLM companies. In 2011, Bowdoin claimed he was pushing OneX to pay for his criminal defense in the ASD Ponzi case. Prosecutors described OneX as a pyramid scheme.

A judge banned Bowdoin from MLM in 2012. The same judge earlier had been targeted with false liens by Kenneth Wayne Leaming, a purported “sovereign citizen” who allegedly was performing legal work for certain ASD members while harboring two federal fugitives from Arkansas wanted in a separate home-business caper.

Leaming, 57, was arrested by an FBI terrorism Task Force in 2011. He was convicted of the charges in March 2013 and was sentenced to eight years in federal prison.

Aug 14, 2013
**[UNCONFIRMED]** Report In Brazil Says Prosecutors Have Asked U.S. Court To Block TelexFree Accounts, New Signups **[UNCONFIRMED]**

**[UNCONFIRMED]** A report in Brazilian media translated by Google Translate from Portuguese to English says that prosecutors in Brazil have asked a U.S. court to prevent new members from joining TelexFree and to block the accounts of TelexFree figures Carlos Wanzeler, James Merrill, Carlos Costa and Lyvia Wanzeler.

The PP Blog could not immediately confirm the report. If it is true, it could mean that law-enforcement agencies in Brazil have contacted their U.S. counterparts and asked them to begin the process of investigating a potential seizure of TelexFree-related funds that may be in the United States and perhaps to disable or otherwise block the functionality of the TelexFree web domains. The United States has said on various occasions that it is interested in fostering partnerships with law-enforcement agencies across the globe to combat commercial fraud online.

As of 1:03 p.m. EDT today in the United States, the TelexFree websites remained online and appeared still to be capable of enrolling recruits.

TelexFree has said it has U.S. arms in the states of Massachusetts and Nevada. Some U.S. afffiliates of TelexFree also appear to have formed business entities in California and Florida. Some TelexFree affiliates have claimed the “opportunity” did business through Bank of America, TD Bank and ProPay. (See July 8, 2013, PP Blog report on some of the claims.)

Despite allegations in Brazil that TelexFree was conducting a massive pyramid scheme and that a Brazilian judge and prosecutor had been threatened with death, TelexFree nevertheless held a rah-rah session in California late last month in which an MLM pitchman appears to have tried to sustain the scheme by telling a joke about “Carlos Danger,” an online identity purportedly used by U.S. Democratic politician Anthony Weiner. A companion TelexFree promo playing in the United States on YouTube claims that people who send $15,125 to TelexFree can expect to profit to the tune of more than $42,000 in a year.

TelexFree has a presence on well-known Ponzi-scheme forums such as TalkGold, MoneyMakerGroup and DreamTeamMoney. The forums previously were used as staging grounds for the Legisi Ponzi scheme, the AdSurfDaily Ponzi scheme, the PathwayToProsperity scheme, the Zeek Rewards scheme and the Profitable Sunrise scheme, among others. The SEC has described Zeek as a $600 million Ponzi- and pyramid fraud. The agency has described Profitable Sunrise as a fraud that may have gathered tens of millions of dollars through a series of accounts. Federal prosecutors in Illinois have described PathwayToProsperity as a fraud that made its way into at least 120 countries.

In May, the United States indicted the Liberty Reserve payment processor and forced it offline, amid allegations that Liberty Reserve and some of its operators had engaged in a $6 billion money-laundering conspiracy. In June 2011, U.S. Attorney General Eric Holder described the amount of money being stolen online as “staggering.”

“In recent years, we’ve seen clear, and alarming, advances in the sophistication and commercialization of crimes involving electronic networks,” Holder said. “And the staggering volume of money being stolen online today has the potential to threaten not only the security of our nation — but the integrity of our government, the stability of our economy, and the safety of our people.”

Nearly a year later — in May 2012 — INTERPOL said that “[Eighty] per cent of crime committed online is now connected to organized gangs operating across borders.”

In October 2012, Lisa Monaco, then-Assistant Attorney General for National Security, said that cyber intrusions may have resulted in “the greatest transfer of wealth in history.”

Monaco is now President Obama’s chief counterterrorism adviser.

Some TelexFree members have claimed that the purported “opportunity” has gathered in excess of $300 million. Among other things, TelexFree has purported to be in the hotel-development business in the run-up to the 2014 World Cup and the 2016 Summer Olympics in Brazil. TelexFree, an MLM business, also purports to be in the VOIP telephone business.

Many HYIP “opportunities” that use an MLM sales model have members and promoters in common and promise absurd rates of return. The practice has led to questions about whether groups of MLMers — however loosely associated — may be engaging in willful blindness and causing banks and payment processors to become warehouses for fraud proceeds.

The ASD, Zeek, Legisi, PathwayToProsperity and Profitable Sunrise HYIP schemes may have gathered on the order of $1 billion, court filings suggest. Alleged PathwayToProsperity operator Nicholas Smirnow is listed as wanted by INTERPOL. So is Robert Hodgins, who reportedly once provided payment services to ASD and is listed as an INTERPOL fugitive in a money-laundering case allegedly involving the offloading of narcotics profits in Colombia.

See Aug. 12 TelexFree report on BehindMLM.com.

Aug 12, 2013