Category: Ad Surf Daily

BULLETIN: Receiver Seeks Default Judgments Against Key Zeek Rewards’ Clawback Defendants

BULLETIN: (6th Update 8:34 p.m. EDT U.S.A.) Zeek Rewards’ receiver Kenneth D. Bell has gone to federal court in the Western District of North Carolina, seeking default judgments against key clawback defendants and alleged “winners” Trudy Gilmond and Jerry Napier, a figure in the AdSurfDaily Ponzi-scheme story.

Bell is seeking more than $2.129 million from Gilmond. He is seeking more than $2.041 million from Napier.

Both Gilmond and Napier failed to defend the actions against them — with Gilmond missing an April 3 deposition in Vermont and Napier missing an April 2 deposition in Detroit, Bell wrote in a court filing.

In the alternative, Bell is asking Senior U.S. District Judge Graham C. Mullen to force Gilmond and Napier to appear in Mullen’s North Carolina courtroom no later than May 15 to “show cause as to why default judgment should not be entered against” them.

This is from Bell’s assertions against Gilmond (italics added/light editing performed):

In granting the Receiver’s Motion for Class Certification, the Court held that all Named Defendants, including Ms. Gilmond and her company, would need to “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.” . . .

Pursuant to this Order, the Receiver noticed Defendants’ deposition for April 3, 2015 in Vermont, Ms. Gilmond’s state of residence, in compliance with the Federal Rules of Civil Procedure. See Ex. 1, Notice of Deposition of Trudy Gilmond and Trudy Gilmond, LLC. The Notice was served on Defendants’ counsel via U.S. mail, hand delivery and email on February 27, 2015. Id. And, after Defendants’ counsel withdrew from the case, the Notice was also sent directly to Ms. Gilmond via email at an email address provided by her now former counsel.

In spite of the Court’s Order and repeated notice, Ms. Gilmond has refused to appear for her noticed deposition.

Largely the same assertion was made against Napier.

Zeek Rewards is believed to be one of the largest MLM/network-marketing Ponzi- and pyramid schemes in U.S. history. The “program” allegedly gathered $897 million.

The SEC shut down Zeek Rewards in August 2012.

Even being “flexible on the logistics” of the Gilmond and Napier depositions was not enough to get them to appear, Bell contended.

From the receiver’s assertions against Napier (italics added):

In sum, it seems clear that Mr. Napier does not intend to appear for a deposition or produce the related requested documents. He has offered no explanation for his refusal to appear or otherwise defend the action. Accordingly, it is appropriate for the Receiver to move the Court for judgment against Mr. Napier and the alternative relief requested.

Largely the same assertion was made against Gilmond.

In the earliest days of the SEC’s action, Gilmond litigated aggressively. She continued to do so as Bell pursued clawbacks from more than 9,000 alleged Zeek winners.

Why she apparently isn’t doing so now is unclear.

Bell has expressed concerns that some MLMers/network marketers are moving from one fraud scheme to another.

NOTE: Our thanks to the ASD Updates Blog.

Apr 24, 2015
RECOMMENDED READING: ‘Bank Of The Underworld’

UPDATED 12:12 P.M. EDT U.S.A. A thoughtful reader sent this along this morning. It’s a story by Jake Halpern in The Atlantic titled, “Bank of the Underworld[:] Liberty Reserve was like PayPal for the unbanked. Was it also a global money-laundering operation?”

Here’s a snippet (italics added):

Costa Rica was also increasingly known as a place where dirty money could be cleaned. The country’s geography—with drug producers to the south and their customers to the north—was ideal for money launderers. According to Global Financial Integrity, a nonprofit that monitors international money laundering, Costa Rica exported $5.4 billion in laundered money in 2006, equivalent to 24 percent of its GDP. By 2012, that number was up to $21.6 billion—a whopping 48 percent of GDP. Ólger Bogantes Calvo, the deputy director of the country’s anti-narcotics enforcement agency, told me that the government simply never has the funds, manpower, or materiel to fight the criminal elements it faces. “Realistically, [the criminals] will always be a step ahead,” he said.

Liberty Reserve, the choice of HYIP Ponzi schemers and other criminals, is DOA, of course. Post-Liberty Reserve, however, it might be a good time for investors and prospects of SVM Global Initiative to question why a purported arm of the New York City-based enterprise extends into Costa Rica.

Such a question might help educate the MLM/network-marketing masses who continue to push one bizarre scheme after another. After all, the highly publicized Liberty Reserve case was brought in the Southern District of New York, the same venue in which SVM appears to be operating with a purported “professional intuitive” at the helm.

SolidTrustPay, an offshore processor that had been friendly to the AdSurfDaily and Zeek Rewards Ponzi schemes, reportedly is in the SVM fold. (In a complaint announced April 14, the SEC said a Ponzi scheme known as CashFlowBot and perhaps better known as DollarMonster was using STP.)

While they’re at it, MLMers/network marketers might want to question why SVM appears to be contemplating a “advertising” module of some sort.

And they also might want to question why AdSurfDaily “advertising” Ponzi schemer Andy Bowdoin allegedly once hopped on a plane and ventured to Costa Rica.

Meanwhile, they might want to question why cross-border schemes such as TelexFree ($1.8 billion) and Zeek Rewards ($897 million) had “advertising” components.

Speaking of “advertising”: The emerging MAPS cross-border scheme has the word in its name — along with promoters’ ties to Zeek and TelexFree. Like Zeek and ASD, MAPS, short for My Advertising Pays, says it takes SolidTrustPay.

Apr 23, 2015
In Conference Call For ‘SVM Global Initiative,’ Speaker Makes Veiled Reference To UFunClub Cross-Border Scheme Under Investigation In Thailand: Are North American ‘Sovereign Citizens’ At Work?

Are “sovereign citizens” immersed in the “SVM Global Initiative” and “UFunClub” cross-border, network-marketing schemes?

“Sovereign citizens” may have an irrational belief that laws do not apply to them. It is not unusual for them to be involved in financial fraud, and some “sovereigns” have been linked to MLM HYIP frauds and securities offering frauds.

Individuals who join such schemes may not understand they have signed on to enterprises engaging in international fraud and that a political agenda or even political extremism may be driving events.

In a conference call Tuesday night for SVM, a man who identified himself as “Nelson” calling from “Saskatchewan, Canada” came on the line. He explained that he’d been with SVM “from the very beginning” and was involved in “world-shaking affairs, including the global currency reset.”

Precisely what constituted the purported “reset” wasn’t explained, but the term has been associated with banking conspiracy theorists and “sovereign citizens.” AdSurfDaily Ponzi story figure Kenneth Wayne Leaming, for instance, allegedly claimed “the Rothschilds” were hiding in a “bunker in India” while controlling the central bank of Iraq, according to a 2011 complaint against Leaming that accused him of filing bogus liens against public officials and other crimes.

The complaint was filed by a member of an FBI Terrorism Task Force operating in Washington state. Leaming, who’d been under federal surveillance, later was convicted on charges of filing false liens, harboring two federal fugitives wanted in a separate home-business caper in Arkansas and being a felon in possession of firearms.

Banking conditions in Iraq were causing the Rothschilds to lose money, and the “inner circle” is “jumping ship,” Leaming allegedly told a colleague, “just like body odor’s inner circle in the White House.”

“Body odor” was a veiled reference to President Obama. ASD was a “program” that claimed a daily payout rate of 1 percent. The $119 million scheme spread over the Internet, creating thousands of victims. ASD was broken up by the U.S. Secret Service in 2008.

A Troubling Narrative: Was A Rallying Cry Of ‘Sovereign Citizens’ Part Of It?

On the call hosted by SVM’s Sheila V. Tabarsi, “Nelson” further ventured that he had “many connections in the international banking arena.

“I have many connections in law; I have many connections in military — on and on and on,” he said.

During his fawning over SVM, “Nelson” went on to make a veiled reference to UFunClub, now the subject of a major investigation in Thailand. This leads to questions about whether he is involved in two separate cross-border schemes and whether other SVM members also are pushing multiple schemes.

“Nelson” said this before he got off the line (italics added):

“And God Bless the Republic of the United States of America.”

It is a term often associated with “sovereign citizens” and, in written form, may be abbreviated and stylized RuSA. The term is closely associated with James Timothy “Tim” Turner, who was sentenced to federal prison in 2013 for his role in a bizarre tax scam. (Also see Quatloos thread on RuSA.)

BehindMLM.com’s Review Of SVM

Here we’ll point you to BehindMLM.com’s April 13 review of SVM. We’ll note that the Tuesday SVM call more or less was an effort to slime the online publication, which reports on emerging MLM schemes.

SVM appears to operate out of Greater New York City, perhaps from the Bronx and Manhattan — with an arm in Costa Rica.

Prior to “Nelson” coming on the line, Tabarsi asserted BehindMLM.com was a “pawn” and a “coward” that works with an unidentified third party to “bring network-marketing companies down.”

“To me, this is real Illuminati kind of stuff,” Tabarsi said. “Granted, the success of Sheila V and Associates and the SVM Global Initiative could do some devastating things to the network-marketing industry.”

Other MLM schemes have trotted out the theme that dark forces — usually cast as competitors unhappy that downlines are leaving one “program” because another has found the Holy Grail — are controlling things behind the scenes or secretly. It is not unusual for political rhetoric, conspiracy theories or antigovernment sentiment to become part of the narrative, and this may be happening with SVM.

Tabarsi, for example, said during Tuesday’s call that the “Bush administration” was involved in an “effort to dismantle this world economy” and that the effort has been “so concentrated” and “so diligent.”

The aim, she contended, was to concentrate 99 percent of the world’s wealth in the hands of 1 percent of the people.

“We are a threat to that,” she said. “The success of Sheila V and Associates and the SVM Global Initiative is a threat to this establishment that is trying so long and so hard to take everybody down.”

Any number of MLM schemes have advanced forms of this narrative. The $1.8 billion TelexFree scheme broken up by the SEC last year was positioned as a “revolution” that would put wealth in the hands of ordinary people. Though much smaller in scale, the Achieve Community scheme broken up by the SEC earlier this year advanced a similar narrative.

TelexFree and Achieve — like the Zeek Rewards scheme in 2012 — were operating combined Ponzi- and pyramid schemes, the SEC has alleged.

SVM, through Tabarsi, has positioned itself a network-marketing enterprise with three arms. Working together, these three arms — Sheila V. and Associates LLC (New York), The Marketplace at SV&A LLC (Costa Rica) and SVM Redesign Your Life America with an organ called “The Freedom Fund” — purportedly will elevate people out of poverty.

On her website, Tabarsi says she is a “4th Generation Native Cherokee/African American Spiritual Life Coach, Universal Life Church Minister, Business and Medical Intuitive with 17 active years of practice performing Clair-empathic healings and various forms of intuitive readings.”

She also notes she is a “corporate administrative manager, former U.S. Air Force Staff Sergeant and Veteran of the ’91 Gulf War” who established “SVM ReDesign Your Life America, a non-profit organization to convert abandoned military bases into places to end poverty and homelessness.”

In a March conference call, she claimed she was under investigation by a U.S. Attorney’s office and the FBI, among others. She denies she has done anything wrong.

“The FBI is involved only because I have international clients, but not that there’s too much they can really act on,” she said during the call last month.

Because SVM says it has a presence in the Bronx and Manhattan, the PP Blog on Wednesday contacted the office of U.S. Attorney Preet Bharara of the Southern District of New York for comment on SVM, UFunClub and “Nelson’s” line about the “Republic of the United States of America” during the Tuesday SVM call.

The office has not responded to the request.

NOTE: Also see the MLM Skeptic Blog: “Is a Scam Targeting Veterans ‘to end poverty’ citing a FAKE JAG lawyer?”

Apr 19, 2015
COURTING TROUBLE: In Bogus Promo, Obama Shown As Pitchman For ‘MyAdvertisingPays’

On April 2, a video depicting President Obama as a fan of the MyAdvertisingPays “program” appeared on YouTube. An “Obama voice” was dubbed into the video, which also shows the Presidential Seal. Text below the video reads, “Mr. President speaks about the new advertising revolution.”

Depicting then-President George W. Bush as a fan of the AdSurfDaily MLM HYIP “program” backfired in spectacular fashion in 2008, drawing the attention of the U.S. Secret Service. Federal agents eventually seized more than $80 million in an asset-forfeiture case. ASD President Andy Bowdoin, accused of operating a cross-border Ponzi scheme, was indicted. He later pleaded guilty to wire fraud.

Bush left the White House in January 2009, after Barack Obama was elected President. By August 2010, according to the FTC, “medical discount” hucksters were trading on Obama’s image.

By September 2010, contrived images of Obama appeared in sales promos for the MPB Today MLM “program.”

MPB Today operator Gary Calhoun later was charged with racketeering. Assets were seized. A conviction followed.

In 2013, with Obama now in his second term, he was depicted in a promo as a pitchman for a scheme known as Ultimate Power Profits. That “program” had promoters in common with Zeek Rewards, which the SEC described in 2012 as a combined Ponzi- and pyramid scheme that had gathered hundreds of millions of dollars.

Against this backdrop, a YouTube video that appeared online today positioned Obama as a pitchman for MyAdvertisingPays, a Ponzi-board scheme like ASD, MPB Today, Ultimate Power Profits, Zeek and many others.

News about the 0:33 MAPS’ video titled “My Advertising Pays, Obama” first appeared on the RealScam.com antiscam forum.

MAPS already may be on borrowed time. That’s because MAPS has links to both the Zeek and TelexFree schemes. TelexFree, alleged to have gathered more than $1.8 billion, also traded on the illusion the U.S. government backed the “program.”

The video for MAPS puts MAPS-friendly words into the President’s mouth.

“My AdvertisingPays pays its members every 20 minutes,” a mimicked voice of Obama’s says. “I highly recommend you to join MyAdvertisingPays.”

The video concludes with, “God bless MyAdvertisingPays.”

Apr 2, 2015
BULLETIN: Receiver Sues USHBB Inc., Maker Of Zeek Videos — And Ties Firm To AdSurfDaily Ponzi Scheme
9th UPDATE 9:01 P.M. EDT U.S.A. Indianapolis-based USHBB Inc. and three of its principals — James A. Moore, Robert Mecham and Oscar H. Brown — have been sued by the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case.

Receiver Kenneth D. Bell alleges USHBB, a producer of videos, also did work for the AdSurfDaily Ponzi scheme “and one or more other failed MLM operations.”

Though not referenced specifically in the complaint, one of those operations was “NarcThatCar,” a bizarre pyramid scheme that collapsed in 2010.

Bell raised concerns months ago that some MLMers or network marketers simply were proceeding from scheme to scheme to scheme. The receiver previously tied alleged Zeek winner Todd Disner to the ASD Ponzi scheme.

Not only did USHBB and its principals mine $676,848 from Zeek for producing videos and marketing materials that duped vast numbers of Zeek participants, Moore, Mecham and Brown piled up hundreds of thousands of dollars in illicit profits as Zeek affiliates, Bell charged.

Brown, better known as O.H. Brown, used “ushbb” as his Zeek affiliate name and amassed $168,642.70, Bell alleged.

Moore scored $109,130.64 under multiple usernames, including “geniweb” and “ttm,” Bell alleged.

Mecham piled up “at least $868,542.17 through his shell companies Five Star Marketing, LLC and The End Media, LLC, under multiple usernames, including ‘napier2’ and ‘theend,’” Bell alleged.

Moore resides in Indianapolis, according to the complaint. Mecham is a resident of Bountiful, Utah, and Brown lives in Mount Pleasant, S.C.

Mecham and Brown received transfers of $25,000 each from a Zeek “insider” in August 2012, the same month Zeek collapsed, according to the complaint.

Brown, according to the complaint, potentially knew that the SEC was looking at Zeek in June 2012 and dashed off a panicked email to Zeek executive Dawn Wright-Olivares.

What appears to have happened, according to the complaint, was that a technology company with which USHBB did business was contacted by the SEC, prompting Brown to tell Olivares:

“Heads up!!!! Our IT partners, RMR development received a telephone call from the SEC today regarding yougetpaidtoadvertise and what organizations were associated. This was a very short call I am told. Not sure what will come of this but this is an alarm at least that the government is looking. We need to get squeaky clean and quick!”

Olivares, charged civilly by the SEC and criminally by federal prosecutors in the Western District of North Carolina in 2013, allegedly shared inside information with USHBB and Brown.

From the receiver’s complaint (italics added):

Further, the Defendants were involved in the Zeek scheme’s operation and the Insiders’ decisionmaking. For example, in August 2011, ZeekRewards adjusted some of the terminology it used publicly in an attempt to disguise the “Compounder” as a legitimate retail profit sharing mechanism. The Compounder’s name was changed to the “Retail Profit Pool,” but the substance of this investment vehicle did not change. USHBB was or should have been fully aware of this deceitfulness in which it participated.

In a June 24, 2011 email, Dawn Wright-Olivares wrote to O.H. Brown regarding a webinar that USHBB had created for Zeek: “I started to do minor edits . . . ([Y]ou’ll see them where I started to say Retail Profit Pool) lol instead of Compounder . . . . ” She further wrote to Brown: “the silent cap [for bid expiration] reality will be 125% but we can’t SAY it as you know.”

Wright-Olivares pleaded guilty to investment-fraud conspiracy and tax-fraud conspiracy in February 2014.

Consistent with USHBB’s “dubious track record” in ASD and other schemes, the company and its principals “assisted the ZeekRewards scheme by creating multiple videos that served as promotional tools for ZeekRewards,” Bell alleged.

Titles included:
- “One Penny Billionaire.”
- “You Get Paid to Advertise.”
- “Got 20 Seconds.”
- “The Dog Gone Truth.”
- “Spin the Wheel.”
“The videos were carefully produced to mislead and deceive victims into participating in the scheme, convincing victims that with minimal effort they could earn significant financial returns from the Zeek scheme,” Bell alleged.

And, he alleged, “These videos assisted the Insiders in promoting the alleged ease with which affiliates could earn passive profits by investing in the scheme and selling membership in the scheme to others. Affiliates were told to mention the ZeekRewards program to a prospective affiliate or advertise it on a web page, and then email or otherwise provide them a link to the USHBB videos, which upon information and belief convinced other unwary victims to sign on . . .

“The videos were a key component in proliferating the RVG Ponzi scheme, causing significantly more victims and financial loss than otherwise would have occurred absent Defendants’ actions.”

RVG stands for Rex Venture Group, the alleged operator of Zeek. It was controlled by Paul R. Burks of Lexington, N.C. Burks also has been charged criminally.

ASD was a $119 million Ponzi scheme broken up by the U.S. Secret Service in 2008. NarcThatCar was a “program” that purported to pay MLM “program” members to recruit other members and to record the license-plate numbers of vehicles parked at restaurant chains, big-box retailers, universities, doctors’ offices and throughout neighborhoods from coast to coast.

The information purportedly would be entered into a database that could assist the U.S. Department of Homeland Security locate terrorists and lenders repossess automobiles. The bizarre scheme disappeared after it caught the attention of the Better Business Bureau and investigative journalists.

Bell is seeking treble damages and the return of ill-gotten gains from the USHBB defendants.

NOTE: Our thanks to the ASD Updates Blog.
Mar 27, 2015
PARTINGS: Ronald C. Machen Jr., Whose Office Led AdSurfDaily Criminal Prosecution, Is Leaving Post As U.S. Attorney For District Of Columbia

“Serving as the U.S. Attorney for the District of Columbia has been the highest honor of my professional career. I am tremendously grateful to the President, Attorney General Holder, and Congresswoman Eleanor Holmes Norton for placing their trust in me. The men and women of this office are among the most dedicated and talented public servants in the country. I am proud of the work we have done together to achieve justice in the courthouse and to build bonds of trust with the community that we serve. I leave this position confident that my extraordinary colleagues will continue to pursue justice and protect the residents of the District and this great nation.” — U.S. Attorney Ronald C. Machen Jr., District of Columbia, March 16, 2015

Ronald C. Machen Jr. is leaving his post as U.S. Attorney for the District of Columbia after five years.

Ronald C. Machen Jr. led many important prosecutions during his five-year tenure as U.S. Attorney for the District of Columbia. The one PP Blog readers are most apt to remember is the criminal prosecution of AdSurfDaily Ponzi-scheme figure Andy Bowdoin.

Machen, 45, is leaving his post and intends to reenter private practice, the Justice Department said today.

“During more than five years as United States Attorney for the District of Columbia, Ron Machen has distinguished himself as a skilled leader, a devoted public servant, and a forceful champion of justice on behalf of the American people,” said Attorney General Eric Holder.

Upon the sentencing of Bowdoin in August 2012, Machen called the huckster “a master of fraud and deception” who cheated “victims out of their hard-earned money and savings with his get-rich scheme.”

AdSurfDaily gathered $119 million through its Internet-based fraud, a 1-percent-a-day “program” that purported to be in the “advertising” business, not the business of selling securities.

Machen will leave his post on April 1. Principal Assistant U.S. Attorney Vincent H. Cohen Jr., 44, will become Acting U.S. Attorney on that date.

Two assistant U.S. Attorneys and a special agent of the U.S. Secret Service involved in the ASD case were targeted with false liens by Kenneth Wayne Leaming, a purported “sovereign citizen” from Washington state. Leaming was arrested by an FBI Terrorism Task Force and was successfully prosecuted by the office of then-U.S. Attorney Jenny A. Durkan of the Western District of Washington.

We wish Ronald Machen the best, and we thank him for his service to his country.

Mar 16, 2015
Court Filings Show Self-Identified Church Sent $10,000 To Zeek Rewards 9 Days Before Collapse; 2 Other Checks From An Individual Were Marked ‘Blessing’

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.”

In 2014, Bell asked a court to take “judicial notice” of certain videos on YouTube.

MLM may have a problem with “serial participants” in Zeek-like schemes to defraud, Bell suggested.

NOTE: Our thanks to the ASD Updates Blog.

Feb 6, 2015
TelexFree/iFreeX Figure Sann Rodrigues Appears In Car With Emerson Fittipaldi; Is Brazilian Racing Legend Being Duped By MLM Huckster?

Racing legend Emerson Fittipaldi somehow ended up in a car with TelexFree figure Sann Rodrigues. Source: Video on DailyMotion.

UPDATED 2:14 P.M. ET U.S.A. It is not unusual for financial fraudsters to seek to rub elbows with famous people or to imply ties to them as a means of sanitizing purported “opportunities” or accenting their own bona fides. Recent examples of this include Florida-based Ponzi-schemer/racketeer Scott Rothstein, who mixed with the elite as his epic fraud scheme spiraled out of control.

Florida-based AdSurfDaily Ponzi schemer Andy Bowdoin (and any number of his promoters) falsely implied that then-President George W. Bush was on ASD’s train. The Mantria Corp. Ponzi scheme in Colorado traded on images of former President Bill Clinton and famous politicians or business executives.

The WCM777 scam traded on purported ties to Siemens and scores of famous companies. Siemens publicy refuted the WCM777 claims.

TelexFree, alleged to have gathered hundreds of millions of dollars in a combined Ponzi- and pyramid scheme targeted in no small measure at Brazilians and people who speak Portuguese or Spanish, aligned itself with the Botafogo soccer club in Brazil. The PR results were disastrous.

Now comes word that Sann Rodrigues, a figure in both the TelexFree and iFreeX schemes, is seen in a video in which he is driving a car. That in itself wouldn’t be unusual, in that Rodrigues previously has recorded one or more videos that put him behind the wheel of a flashy ride.

But in this case the passenger in the car is Emerson Fittipaldi, the Brazilian racing legend who won the Formula One World Championship twice and also is a two-time winner of the Indianapolis 500.

The PP Blog has sought comment from Fittipaldi through multiple channels and hopes to hear back from the legend. If Fittipaldi or his organization responds, we’ll make sure you see that response.

Rodrigues was charged by the SEC in April 2014 with securities fraud for his alleged role in the massive TelexFree swindle. This marked the second time the SEC had implicated him in a fraud scheme. The first was a 2006 scam known as Universo Foneclub Corporation. Like TelexFree, Universo Foneclub allegedly was targeted at the Brazilian community.

TelexFree also is under investigation by the U.S. Department of Homeland Security and Federal Police in Brazil. At the same time, the Securities Division of Massachusetts Commonwealth Secretary William Galvin also is investigating TelexFree.

In September 2014, Galvin issued a warning about iFreeX, another “program” associated with Rodrigues. T-Mobile, the famous phone company, later said it was checking to see if its branding material was being misused by iFreeX.

Precisely how Fittipaldi ended up in a car with Rodrigues is unclear. Early research suggests Fittipaldi made an appearance at a hotel in the area of Orlando, Fla., on or around Jan. 6 of this year. Rodrigues may reside in the Orlando area.

The Orlando event appears to have been arranged by a venture known as DFRF. The asserted operator of that venture is Daniel Fernandez Rojo Filho. (The Ferdandez name also has been spelled with a trailing “s,” as opposed to a “z.”) His name surfaced as part of the Evolution Market Group/Finanzas Forex case in 2010.

(Also see PP Blog article. Also see Palm Beach Post article.)

It is clear that some Brazilians interested in the TelexFree case are closely following the appearance of Fittipaldi alongside Rodrigues, wondering if the racing legend is being duped by an alleged recidivist swindler.

Jan 19, 2015
AdClickXpress, Successor Scam To 2 Earlier Scams, Stirring Again — And Gets Bad Press In South African Media

“6. I affirm that I am not an employee or official of any government agency, nor am I acting on behalf of or collecting information for or on behalf of any government agency. I affirm that I am not an employee, by contract or otherwise, of any media or research company, and I am not reading any of the Ad Click Xpress pages in order to collect information for someone else.” — From the AdClickXpress Terms of Service, Nov. 29, 2014

The carcass of AdClickXpress (ACX) is stirring — just in time to cast a spell on suckers hoping to find some extra money for the holidays. Like predecessor scams JSSTripler/JustBeenPaid and ProfitClicking in the same criminal family, ACX fancies itself the Bank of Credit and Commerce International (BCCI) of online schemes.

In short, ACX ropes “customers” into an international financial conspiracy theoretically designed to be offshore everywhere. But deliberately taunting government investigators in its Terms of Service (see breakout quote above from the Terms) appears only to have been a first act. The “program” now appears to be taunting its own members and prospects.

From a Sept. 10, 2014, post on the MoneyMakerGroup Ponzi forum, quoting from the taunt (italics/bolding added):

Note: if members are found to have posted negative information about ACX, even if it is absolutely true, their account could be penalized significantly. ACX Management will be the sole determinant as to how much damage the member has caused other ACX Members.

Like the bizarre and incongruous AdViewGlobal scam before it, ACX fancies itself a “private association.” But even if it were one of those — and even if in theory it could hamstring government investigators and reporters with a vomitous word salad — it is a “private association” that threatens its own members in ways the Mafia wouldn’t consider.

So, at least by Sept. 10, ACX began serving up BannersBroker-like word-sewage. It’s all designed to confuse and to obfuscate, of course.

By the Terms alone, ACX makes co-conspirators of its members. And after this artifice is carried out, it divines a construction by which it will penalize “significantly” and unilaterally calculate damages purportedly caused by those same members who’d dare post “negative information . . . even if it’s absolutely true.”

Separately, there are unconfirmed reports on MoneyMakerGroup that Frederick Mann, the purported operator of JSS/JPB and the de facto inspiration behind the follow-up scams, has died. Mann, a former pitchmen for the AdSurfDaily Ponzi scheme, once directed traffic to videos featuring Francis Schaeffer Cox, the now-convicted Alaska “sovereign citizen” and militia man implicated in a plot to murder public officials.

In 2012, Mann described government workers as “part of a criminal gang of robbers, thieves, murderers, liars, imposters.”

On Nov. 22, IOL, a South African group of independent newspapers, published a story titled “Massive losses in scams only a click away.”

Among other things, the paper reported people in that Strand/Somerset West area of the Western Cape appear to have become ACX victims.

Nov 29, 2014

MILESTONE: The PP Blog’s 2,500th Post: Pennies For Our Thoughts

EDITOR’S NOTE: This post originally was published at 12:40 a.m. ET on Nov. 3. It will continue to appear at the top of the PP Blog for a while, but new stories will appear below it . . .

Dear Readers,

What a long, strange, occasionally exhilarating and sometimes frightening ride it has been. This letter celebrates the PP Blog’s 2,500^th post with WordPress. Our first was 2,152 days ago, excluding today’s date. Some of you have been with us every step of the way since December 2008.

Many of you have shared your knowledge in our Comments sections and helped shape our thinking. This has helped us create a better publication, one that frames issues in context and provides analysis. Readers get breaking news, situational news and opinion.

One thing became evident early on: the serial scammers and willfully blind hucksters hate the coverage and hold the analysis in particular contempt. As our story total increased from dozens to hundreds and, now, to 2,500, we’ve been able to point readers to more and more content that helps them see patterns and understand things in a fuller context, a context that is more meaningful to them.

We often use both the current story and the Comments thread below the story to point readers to internal and external sources of information that create “lightbulb” moments. For example, lots of readers probably didn’t understand how similar Zeek Rewards was to AdSurfDaily until we helped them understand.

There have been days in which so much news was breaking that we couldn’t get to it all or had to present capsules. On days we do not publish, we’re typically researching and reporting on a story that will be published later. Our deep editorial well remains available 24/7/365, even on days we do not add new content.

The PP Blog started by covering the AdSurfDaily Ponzi scheme. It seemed for a while that it could never get stranger than ASD, but of course it has. The strangeness alone is worrisome. It is one of the reasons we’ve kept our nose to the grindstone. This amount of disconnect and the serial nature of the schemes speak to a growing menace.

These schemes rob people of freedom, shatter dreams, create friction between nations and lead to situations in which the dark forces of criminality gain economic power.

Because “sovereign citizens” made their presence known in in ASD and other unqualified debacles, we worked coverage of national-security issues into our coverage of securities fraud.

Affinity fraud often accompanies Ponzi schemes and pyramid schemes. People of faith are constant targets. So are people whose first language may be one other than English. People frequently are targeted by race or ethnicity, often by magnetic personalities within the specific groups. It has become clear to us that people also are being targeted based on their political views.

If you’re inclined to believe that being a traditional Republican or Democrat very well might be a sign of mental illness or that the antichrist or closeted Nazis and Communists are running things in the corridors of power, rest assured that a Ponzi schemer or securities fraudster has fashioned an offer designed to appeal to your prejudices.

The PP Blog always has been free. It helps educate, inform and enlighten readers, including victims of Ponzi and pyramid schemes who’ve been reduced to ruin and spend their lives consumed by worry.

It should not be that way in America – or any nation.

We received a note the other day from a person who lives in an African nation that knows poverty. Some individuals in this country thankfully see themselves as up-and-coming entrepreneurs who not only will improve their own lives, but the lives of their family members and fellow citizens.

This individual thanked us for our coverage of TelexFree, but reminded us that the fallout went way beyond the Latino and Portuguese communities. We’ve known for some time that we’re building a small audience in Africa. Our audiences in South America also are building. The first time we noticed this was when we became the first publication in the world to confirm through a government official that TelexFree, which had a presence in Brazil, was under investigation in its home state of Massachusetts.

These hideous schemes are affecting people globally. The security situation they create is untenable. The local danger is that they turn family and friends against each other while at once harming local economies. Because murky forces are at work and marriages between organized crime and political extremists can occur, the schemes pose a threat to international security.

Today, to mark our 2,500^th post, we’re asking readers who believe in what this Blog is doing to take out a one-year subscription for either $25, $50, $75 or $100.

At the same time, we’re trying to have a little fun with this. You see, the $25 fee constitutes a penny a post for our current editorial well of 2,500 articles. There’s a pull-down menu in case you decide you’d like personally to value the editorial well at 2 cents a post ($50), 3 cents a post ($75) or 4 cents a post ($100).

The subscription will renew in a year.

Friends, it hasn’t been easy. You’ll be helping me personally. And you’ll be helping a Blog that publishes an average of 416 stories a year and keeps matters important to readers a bookmark away remain free for other readers.

My best to my longtime readers of goodwill, whether you become a yearly subscriber in any category or not. No one who is experiencing financial pain should sign up for a year’s subscription, even if you have the money right now.

Some readers have inquired about subscriptions. I have thought about it for a long time, but always have been concerned that subscriptions could lead to lower readership. Lower readership is not a good thing, especially when scams are spreading virally on the Internet.

This “penny-a-post” idea to commemorate our 2,500^th post has helped me scotch the very real concern about affecting readership. There will be no paywall. The readers who subscribe will be helping keep the Blog free for those who cannot afford to subscribe and for those who simply choose not to.

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

Patrick

Nov 13, 2014

Quebec Moves To Shut Down Site That Purportedly Monitors HYIP Programs, Saying Operator Is Aiding Scammers

If the Autorité des marchés financiers (AMF) gets its way, a website styled maxhyip.com will be shut down and its operator blocked from promoting “products and services relating to various high-yield investment programs (HYIP[s]) to Quebeckers.”

The alleged operator of the site is Steeve Beaudin, against whom AMF is seeking a cease-trade order and “administrative penalties.”

Beaudin is “aiding HYIPs with illegal activities as securities advisers in Québec,” AMF alleges.

Ads that promise preposterous payouts such as 135 percent in a day and 5,000 percent in 90 days appear on the site. There’s also a section that purports to monitor which sites are paying, which sites are not and which sites are experiencing “problems.”

Many such purported monitoring sites follow largely the same blueprint MaxHYIP appears to be following, a situation that has contributed to HYIPs expanding across the globe and sucking in millions and millions of people. That a scheme is “paying” is not evidence that no fraud is occurring, although disingenuous HYIP promoters often position it as so to keep the Ponzi wheels greased.

Such sites also may encourage so-called “test spends” as a means of enabling an HYIP scam to gain a head of steam. If a successful payout results from the “test spend,” the recipient can be duped into believing a “program” is real and join the scammers-in-chief in helping the scam gather even more money.

Payment processors named on the MaxHYIP site have been associated with a sea of scams, including “programs” such as AdSurfDaily, Zeek Rewards and Imperia Invest IBC. ASD was a $119 million Ponzi scheme. Zeek is alleged to have gathered nearly $900 million in a combined Ponzi- and pyramid scheme. Imperia is alleged to have gathered millions of dollars and to have targeted people with hearing impairments.

Processors referenced on the site include PerfectMoney, EgoPay, Payeer, SolidTrustPay, HD-Money and others. Bitcoin also is referenced, as is an apparent virtual-currency wallet known as ASMoney.

“Steeve Beaudin is not registered with the AMF and is therefore not authorized to solicit or advise Québec consumers for investment purposes,” AMF alleges.

From the AMF statement (italics added):

Caution when dealing with HYIPs

HYIPs are investment programs in which money is invested for a given period (hour, day, week or month) at a high interest rate. It is a fraudulent scheme where investors are generally asked to entrust the management of their investments to so-called experienced managers and they receive interest according to the period chosen, which they can withdraw as they wish. In addition to being fraudulent, HYIPs are administered by companies which are generally off-shore, making it difficult for consumers to take legal action against them.

HYIPs, which also often commissions to recruiters, tend to be straight-line Ponzi schemes with no “product” other than the purported investment “opportunity.” In recent years, however, more and more HYIPs may be using purported “products” such as VOIP software, cloud-computing software, “advertising” modules or auction “bids” to disguise the underlying investment elements and the underlying scam.

If an HYIP scheme advertises a “product,” it typically promotes a lower daily return, perhaps between 1 percent a 3 percent. Even those purported returns are outrageous, however. On an annualized basis, Zeek Rewards, for instance, was touting returns that would have made Bernard Madoff look like a piker.

HYIPs, whether they feature product claims or not, also offer returns that are unusually consistent. In the ASD and Zeek cases, it was alleged the operators simply manufactured the numbers because they knew that players who did hear a certain number would not play.

The ASD and Zeek cases alleged the presence of co-conspirators. In such instances, the co-conspirators may be individuals who helped advance cover stories and fraudulent narratives. HYIP schemes also have been known to have silent partners and to launch reload schemes when the original scheme craters — AdSurfDaily to AdViewGlobal, for instance.

Nov 6, 2014

Category: Ad Surf Daily

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