Brian Alexik, 33, is wanted by Los Angeles police, and the police department and the U.S. Secret Service have opened a probe after an AK47 assault rifle, ammunition, a camera tripod, narcotics, counterfeit currency and other contraband was found inside Alexik’s apartment.
The apartment overlooks a branch of the U.S. Federal Reserve in Los Angeles, and Alexik fled the apartment carrying duffel bags, escaping through a rear window. Officers had come to the apartment to investigate a report of “noxious fumes,” police said.
Police did not say whether they believed Alexik was plotting a bigger crime involving the Federal Reserve, but have told local media they regard the location of the apartment as an element of their investigation.
Alexik is known to use at least two aliases: Briane Alexia and Ken Shurin. He is listed as “armed and dangerous.”
Police described him as a “white man of Russian descent, brown hair, hazel eyes, 5 feet 10 inches tall, and 180 lbs.”
Alexik is believed to be in the business of manufacturing both weapons parts and narcotics, police said. A known associate of Alexik has been arrested and booked on charges of possession of crystal methamphetamine.
The associate’s name is Gregory Charles Koller, 32. Police say he faces additional charges of weapons violations and possession of marijuana.
Police who executed a search warrant at Alexik’s apartment found “several loaded weapons, misc live ammunitions, US currency, fraudulent ID cards, counterfeit US currency, misc narcotics,” authorities said.
Alexik is a convicted felon.
“Based on the evidence recovered at the location it was apparent that . . . Alexik . . . was illegally manufacturing weapon parts for illegal weapons, and printing counterfeit currency,” police said. “He had escaped through a rear window of the apartment complex prior to officers’ arrival.
“Alexik is wanted on three felony counts stemming from this investigation; possession of assault weapons, possession of a short barrel shotgun, and convicted felon with a gun,” police said.
Anyone with information about Alexik is asked to contact LAPD Major Crimes Division, Det. Daniel Logan at 213-486-7386. During nonbusiness hours or on weekends, calls should be directed to 1-877-LAPD-24-7. Anyone wishing to remain anonymous should call Crimestoppers at 1-800-222-TIPS (800-222-8477).
At least four people died in Sudan today after gunfire erupted at a rally at which an estimated 1,000 people had gathered to protest against a Ponzi scheme that devastated investors, Reuters is reporting.
Sudanese security forces fired on the crowd, and members of the crowd also had weapons and exchanged gunfire with the forces, witnesses told Reuters.
Early reports are sketchy. Witnesses told Reuters that as many as 10 people had been killed and up to 40 people injured. Fighting was described as intense. The clash broke out in Sudan’s strife-ridden Darfur region.
Early reports described the financial scheme as a regional one that resembled the Tom Petters’ Ponzi scheme in Minnesota and other schemes in which investors are told their money is being used to purchase goods but instead is being used to pay other investors.
“They said they were taking the money, going to Khartoum and other places outside Sudan to buy goods to sell in the markets,” a person told Reuter’s last week, after police used tear gas to break up the crowd. “That is how they said they made their money.”
Petters was sentenced to 50 years in prison for his scheme. Last week, the SEC charged Miami Beach businessman Nevin K. Shapiro in a scheme in which investors allegedly were told their money was being used to purchase groceries at a lower price in one market and sell them at a higher price in another.
EDITOR’S NOTE: We encourage readers of the PP Blog to view these new reports on Fox 5 in Atlanta, which hit a stone wall when investigative reporter Dana Fowle tried to get answers from Narc That Car members and company management.
One of the striking things about the reports below is that not a single Narc member Fowle interviewed could name a single client of the company. Some members got testy with Fowle, despite the fact her questions were reasonable. She asked for minimal information. No one provided it.
Some people Fowle attempted to interview seemed offended that she dared even to ask questions. Despite the fact that Narc promoters routinely claim that lots of money can be made, there is an information vacuum on the company’s business practices. Some Narc members answered Fowle’s questions with questions, not providing a single, verifiable shred of information.
A woman who sponsored a well-attended Narc meeting said Fowle would have to get answers from Narc management — even though the woman was promoting the opportunity. No answers were forthcoming from the company, meaning no one with executive authority has come forward to answer even a single question.
Meanwhile, Narc reps are in the field promoting the company while both promoters and management remain mum. People literally appear to be promoting an opportunity they know absolutely nothing about — except that there is a way to make money with Narc. NOTE: Some readers may be interested in what Georgia Attorney General Thurbert E. Baker says in Part 2 of the Fox 5 package below.
The litigation against INetGlobal amid Ponzi scheme allegations is turning into a legal slugfest in multiple venues. On one side, federal prosecutors are seeking to disqualify INetGlobal attorney Mark Kallenbach, claiming that he is attempting to be both a lawyer and a witness in the same case.
Now, employees of INetGlobal are seeking a protective order that effectively would block the U.S. Secret Service and other law-enforcement agencies “from contacting these represented individuals and requesting interviews.”
Attorney Paul Engh filed the motion in federal court on behalf of INetGlobal’s 70 employees, arguing that he is the gatekeeper for the employees’ legal interests and that the government has approached an unspecified number of employees without going through him.
“These approaches have been made on a cold-call basis, at [employees’] homes, at night or in the early morning hours, and all without notice to counsel,” Engh said in a brief.
His request that the practice stop was “refused,” Engh argued, asserting that the government claims “that since the employees are on laid off status. . . they are no longer employees.”
“Having been an employee is a status that doesn’t disappear because the Government wants it to,” Engh asserted. “None were fired.”
At least one employee — Donald Allen, a former vice president of a company related to INetGlobal and its operator Steve Renner — said earlier this week that he had his own attorney and was cooperating with the Secret Service and federal prosecutors.
Allen said he was approached by the Secret Service, which appeared at his home unannounced a week ago today, and was asked by the agency if he wanted an attorney. Allen said that he answered yes, and described his first meeting with the agency as “excellent.”
Allen said he was advised he had “exposure” in the case. He denied he had done anything wrong, saying he was not privy to INetGlobal’s internal financial workings.
On Tuesday, Allen said he had a second meeting with the Secret Service April 26, adding that he is cooperating in the investigation “100 percent.”
Also on Tuesday, Steve Renner went to Hennepin County Court in Minneapolis and obtained a restraining order against Allen, claiming that Allen was harassing and threatening him and trying to extort $100,000 from the company.
Allen said that what Renner claimed to be extortion was actually an attempt to work out a severance package.
The extortion claim was the second against a former INetGlobal employee. Former CEO Steven Keough was accused in court filings by Renner last month of trying to extort $500,000 from the company. Keough may be the government’s star witness in the case. The Secret Service said Keough had come to believe that Renner had hired him to be a “good face” for the company and that Renner had fired him for asking too many questions.
Engh argued in his brief yesterday that the government appeared to be ignoring his duty as counsel to INetGlobal employees “on some federalist notion of superiority or entitled sense of un-accountability.”
Separately, some members of INetGlobal have asserted the government is not playing fair. Similar claims were made in the prosecution of the assets of the AdSurfDaily autosurf. The government ultimately won three separate orders of forfeiture totaling more than $80 million in the ASD case.
ASD President Andy Bowdoin, whose company has been linked to international fugitive Robert Hodgins, who allegedly laundered money for a Colombian drug cartel, has filed an appeal. The ASD case has been in litigation since the Secret Service raided the company’s Florida headquarters in August 2008. The ASD case is referenced in filings by the prosecution in the INetGlobal case that allege an undercover agent was introduced to INetGlobal by an ASD member who promoted the program despite describing it as a wink-nod enterprise.
Renner, who was convicted in December of four felony counts of income-tax evasion and is awaiting sentencing, has not been charged in the INetGlobal case. The government seized about $26 million in its investigation into Renner’s business practices, and prosecutors have argued that Renner is attempting to get the government to expose its case before a formal action is brought.
Renner has denied wrongdoing, and the companies have said they are legitimate enterprises.
Narc That Car promoter “Jah,” who previously declared that repping for the company was like working for the “Census Bureau” and that his downline group would cap earnings claims in check-waving videos on YouTube at three figures because “we’re not going to be out here flashing, you know, five-figure checks†now suggests at Scam.com (see link below) that the firm’s critics merit a promotion.
If you criticize Narc That Car, which also is known as Crowd Sourcing International, you’re no longer a simple “naysayer.” According to Jah, you’re a “naysayer scammer.”
It was not immediately clear if other Narc That Car promoters or promoters of other questionable business opportunities would follow Jah’s lead and add the word “scammer” after the word “naysayer” in their efforts to cloud issues and discredit critics.
Also unclear is whether Jah had come to believe that the word “naysayer” alone had run out of steam and needed a boost from a word that packed an extra wallop.
At one time, Jah incorporated a strategy of actually calling Narc That Car a scam to refute claims that the company might be using a questionable business model associated with pyramid schemes. That approach apparently fizzled. His NarcThatCarIsAScam.info website has not been updated since it bashed the Better Business Bureau March 27, and Jah apparently has turned to an approach that labels NarcThatCar critics as scammers, as opposed to calling the company itself a scam to prove his point that it is not.
It is too soon to tell whether “naysayer scammer” will gain traction and emerge as a sort of perfect insult that will cause critics to acknowledge they’d lost both the PR war and the intellectual confrontation before retreating and scattering to the winds to nurse their wounds in private.
Jah also is persistently attacking the Better Business Bureau, which gave Narc That Car an “F” rating. And he has attacked the PP Blog, repeatedly asserting that the Blog lied about Narc That not being affiliated with Code Amber in a bid to discredit the company.
The PP Blog never asserted NTC had no relationship with Code Amber, which means Jah is arguing against a claim the Blog never made. The Blog reported that the U.S. Department of Justice denied that the federally managed AMBER Alert program, which NTC referenced in a promotional video, had any affiliation with NTC.
Jah previously has dismissed critics as simple “naysayers” and “haters.” He has never explained how such terms were consistent with a professional approach to public relations. Oddly, Jah persistently attacks critics for producing what he describes as hearsay — all the while attempting to bolster his hearsay case against critics by passing along third-party assertions purportedly from his upline.
Narc That Car says it is in the business of paying people to record license-plate numbers for entry in a database purportedly used by companies in the business of repossessing automobiles. Tactics employed by some repo companies are controversial, and the National Consumer Law Center has linked the repo trade to six deaths since 2006.
Meanwhile, the repo business has ties to to so-called “buy here, pay here” business in which used-car lots finance purchases for high-risk borrowers, often in areas of high poverty and unemployment.
Like members of the AdSurfDaily, AdViewGlobal and AdGateWorld autosurfs, Jah has seized on the name of the PP Blog to discredit it, describing it on the WorkAtHomeForum as authored by “Patrick the pretty guy.”
Other critics of the Blog have referred to it as “Pretty Patrick.” Some have suggested it should be dismissed because its author either is gay or confused about his gender. Among other things, the author had been called a “fag,” an “it” and just plain “ugly.” One critic of the Blog suggested the world might have been a better place had the author’s mother aborted him.
Virtually all of the Blog’s critics have purported to be professional business people. Regardless, many of them have raced from one scam to the next, dragging their downlines with them and subjecting themselves and their downline members to both civil and criminal prosecution.
Visit Scam.com to observe Jah toiling with the critics.
Sign of the apocalypse? The headquarters of the “3 Hebrew Boys” Ponzi scheme in Columbia, S.C., was gutted in a fire Monday and Tuesday. Firefighters spent 19 hours over two days battling the blaze, but the “building and all contents . . . were completely destroyed,” according to Beattie B. Ashmore.
Ashmore is the court-appointed receiver in the case. Proof-of-claim forms for victims of the $80 million Ponzi swindle became available April 15, only 11 days before the fire broke out. The cause of the fire is under investigation, and the building was an asset of the receivership estate.
“All computers and documents have been stored off-site since the Receiver took possession of the building in October 2007,” Ashmore said. “The building was being managed by a reputable property management company, fully insured and continuously monitored by a security company. The Receiver will make a claim immediately with the Hartford Insurance Company for the full value of the building with the insurance proceeds going to the benefit of the victims.”
The 3 Hebrew Boys case is one of the strangest in the United States, drawing comparisons to the alleged AdSurfDaily Ponzi scheme owing to elements of affinity fraud and antigovernment rhetoric.
Joseph Brunson, Tim McQueen and Tony Pough were convicted in November of swindling tens of millions of dollars in a bogus debt-relief “ministry.” The purported aim of the program was to free people from government “bondage,†and the investigation was referred to as “Satan’s handiwork.â€
In the earliest days of the 3 Hebrew Boys case, more than 100 people protested on behalf of the scheme at a rally in Columbia, saying the government did not understand the program, had overreached in its prosecutorial efforts, refused to deny it was wrong and had chosen to move forward with the case in a bid to save face.
In an approach similar to one used by the AdViewGlobal (AVG) autosurf, members were forced to agree to a confidentially clause that purportedly prohibited them from discussing the company outside the confines of meeting places. Participants were threatened with a $1 million penalty for sharing information.
AVG, which has close ties to ASD, morphed into a “private association†in February 2009. Members were scolded for sharing information and calling the autosurf an “investment†program. As the company appeared to be collapsing in May and June, members were threatened with copyright-infringement lawsuits for sharing information published by the firm.
Brunson, McQueen and Pough are jailed awaiting sentencing. After they were found guilty of 174 counts mail fraud, money-laundering and transporting stolen goods, the men filed documents accusing former U.S. Attorney Walt Wilkins of treason and committing acts of war by prosecuting them.
The men became known as “3 Hebrew Boys†after operating a website with the same name, which is based on a biblical story of believers who escaped a furnace by relying on their faith. The Ponzi scheme operated under the name Capital Consortium Group LLC.
Minnesota Ponzi Sentencing
A Ponzi scheme operator in Rosemount, Minn., has been sentenced to 117 months in prison and ordered to pay $21.8 million in restitution to victims.
Charles “Chuck†E. Hays, 56, has been detained since his arrest in February 2009. He pleaded guilty last year to one count of mail fraud, one count of wire fraud and one count of structuring transactions to avoid financial reporting requirements.
Among the items seized in the case was a $3 million yacht acquired with investors’ money. Hays operated a firm known as Crossfire Trading LLC and bilked investors out of more than $20 million by operating a Ponzi scheme.
“Hays told potential investors he was a day trader in stock index futures and other futures contracts,” federal prosecutors said.
Investors plowed money into the scheme based on lies told by Hays, and he “admitted he diverted and converted those funds for his personal use and other unauthorized purposes,” prosecutors said.
The sentencing judge in the case was U.S. District Judge Donovan Frank.
California Ponzi Sentencing
Milton Retana, 46, of Huntington Park, was sentenced to 25 years in prison for a $62 million Ponzi scheme that bilked mostly Spanish-speaking investors out of at least $33 million.
The case became known as the “Best Diamond case.” Retana operated a purported real-estate investment company known as Best Diamond Funding. It was yet another instance another in which the name of a precious metal or mineral was used in a Ponzi scheme.
Evidence of the fraud was hidden in the back of a religious bookstore operated by Retana’s wife, prosecutors said. When investigators searched the bookstore, they found millions of dollars in cash. Best Diamond was located next door to the bookstore.
The scheme — like many other Ponzi schemes — featured an appeal to religion, prosecutors said.
“Best Diamond Funding solicited money through advertisements in Spanish-language magazines, on the Internet, and during weekly investment seminars at locations across Los Angeles. The raucous investment seminars often had as many as 300 potential investors and incorporated religious messages,” prosecutors said.
“Retana guaranteed returns as high as 84 percent each year, claiming that he would purchase properties in bulk at below-market prices and immediately sell them for a profit,” prosecutors said. “However, records obtained by federal investigators showed that Retana used only a tiny fraction of the victims’ money to purchase real estate and that his company was actually losing money.”
The sentencing judge in the case was U.S. District Judge R. Gary Klausner.
Former INetGlobal CEO Steven Keough now has some company on the list of people alleged to have tried to extort money from the Steve Renner family of companies.
Renner went to court yesterday in Minnesota to seek a restraining order prohibiting Donald Allen from harassing him. The order was granted after Renner asserted Allen tried to extort $100,000 and had engaged in a pattern of abusive behavior, including raising “havoc” with employees, threatening “to destroy him and his family,” posting libelous and defamatory material on the Internet and engaging in verbal harassment.
Allen also was accused to taking pictures of Renner’s offices and employees without their consent.
“[Allen] has attempted to extort $100,000 from Petitioner’s businesses [and] if not paid will go to the FBI and Secret Service,” Renner asserted.
A judge ordered Allen not to harass Renner, not to have any contact with Renner and to stay away from Renner’s home. The judge also ordered Allen to stay one “city block” away “in all directions” from Renner’s businesses in Minneapolis.
Should Allen violate the order, he could be arrested, jailed for up to 90 days and fined up to $1,000, according to the order. Subsequent violations of the order could result in stiffer measures, including the filing of felony charges that could land Allen in jail for for up to 10 years and force him to pay a fine of up to $20,000.
Allen is referred to in court papers as a previous employee of a Renner company.
In a story published yesterday on the PP Blog, Allen said he was cooperating with the U.S. Secret Service “100 percent” in a probe of Renner’s business practices. The Secret Service said in February that it believed Renner was operating a Ponzi scheme and engaging in wire fraud and money laundering.
Renner has not been charged with a crime and denies wrongdoing. Allen was vice president at V-Newswire, one of the “V” entities in the Renner family of companies. The Secret Service said in February that Allen had given confusing information to a customer of INetGlobal, another Renner entity.
Allen denies wrongdoing, and now says he has met with the Secret Service twice and is cooperating fully in the Ponzi probe. The first meeting with the Secret Service occurred Friday, after agents showed up unannounced at his home, Allen said yesterday.
In March, Renner accused Steven Keough, the former CEO of INetGlobal, of trying to extort $500,000 from the company. Keough may be the government’s star witness if charges are filed.
“This is the same move they tried on Steve Keough,” Allen said this morning. “I never tried to extort anything.”
EDITOR’S NOTE: The story below includes an assertion by Donald Allen that his IBNN.org website was knocked offline Sunday by a company with ties to INetGlobal. Moments before the story was set for publication, the IBNN website returned. The story does not reflect this later event, and it is possible that the site is not viewable in all parts of the world owing to an apparent change in nameservers. Events surrounding the apparent change in nameservers are unclear.
Acknowledging he had been advised that he potentially has “exposure” in the INetGlobal Ponzi scheme investigation, Donald Allen II said this morning that he had nothing to hide and would cooperate with the U.S. Secret Service and federal prosecutors “100 percent.”
That cooperation already has begun, Allen said. He added that his thinking about INetGlobal has evolved since the Feb. 23 raid of company headquarters in Minneapolis, and he insisted he was out of the loop on INetGlobal’s financial affairs and that his efforts to promote the firm were legitimate.
“Let me make it perfectly clear,” Allen said this morning. “I did the Global News Distribution and was never let in to the ‘workings’ of iNetGlobal. I met with the US Secret Service and [its] position is that I ‘shielded’ [Steve Renner] to operate a Ponzi, which is untrue.”
Allen, a vice president with V-Newswire, an entity in the INetGlobal family controlled by Renner, claimed this morning that the company had blocked his access and the access of readers to a public-affairs Blog he operates. The Blog is known as the Independent Business News Network (IBNN).
The company, Allen asserted, was penalizing him “for coming forward to answer ANY questions the Government has regarding iNetGlobal.”
Renner has not been charged with a crime and has denied wrongdoing. The Secret Service said in court documents filed in February that “there is probable cause to believe that Renner is operating a large, Internet-based, Ponzi scheme through his umbrella corporation, InterMark, and some of its subsidiaries, particularly Virtual Payment Systems [LLC of Wisconsin/Brackets Denoting the LLC Designation added Jan. 20, 2011], V-Media, Cash Cards International, and V-Local.”
NOTE IN BOLD ADDED JAN. 20, 2011: An Indianapolis-based company known as Virtual Payment Systems Inc. has contacted the PP Blog to let it know it is not affiliated with the Renner company Virtual Payment Systems LLC of Wisconsin, which is referenced in the paragraph above.
The Secret Service alleged INetGlobal was the “primary vehicle for the perpetration of this fraud.”
INetGlobal, which features an advertising rotator, is the so-called “autosurfing” platform of the Renner companies. The government has prosecuted several autosurf companies in recent years, saying they were selling investment programs disguised as advertising programs and engaging in wire fraud and money-laundering.
Renner’s company has a high concentration of Chinese members who may have limited or no facility in English, the agency said. At least one INetGlobal member has said Americans flocked away from Renner’s autosurfing enterprise after the Secret Service, in August 2008, raided a similar company in Florida known as AdSurfDaily (ASD).
The ASD litigation is referenced in court papers in the INetGlobal case.
Allen said this morning that he also had performed work for V-Media and V-Local — both of which the Secret Service said had ties to the alleged INetGlobal fraud — but he insisted that he had done nothing wrong.
“I wasn’t privileged to know anything about the compensation program” of InetGlobal, Allen said. “I could not explain it to this day.”
An error message that reads “This Account Has Been Suspended: Please contact the V-Webs.com billing/support department as soon as possible” now appears on the IBNN site. In the early hours after Allen lost control of the Blog, the site would not return a ping and produced a “bad destination” error message, according to records.
Even though Allen moved the content of the site from a hosting company controlled by Renner weeks ago, Renner controlled the domain registration and thus has the ability to block access, Allen asserted this morning.
Allen’s access to the site was blocked sometime after “noon on Sunday,” two days after he met with the Secret Service, Allen said.
Agents appeared at his home Friday unannounced, Allen said.
He described his initial meeting with agents as “excellent.” Allen added that he is consulting with an attorney.
“[The Secret Service] asked me if I would like legal representation,” Allen said. “I said yes.”
A second meeting with the Secret Service occurred yesterday. Allen said he was consulting with his attorney again today, saying a characterization that described him as cooperating with the agency was “totally accurate.”
The move to block IBNN also followed on the heels of a letter Allen gave to Renner April 22, Allen said. The letter claimed that Allen had “clear and documented” evidence of violations of the Federal Equal Employment Opportunity laws in a hiring decision it made.
In the letter, Allen suggested he was not given an opportunity to interview for a job that went to an INetGlobal member with a large downline. The letter also questioned the operations of the company’s board of directors and claimed an INetGlobal “receptionist” was performing “confidential” work that should have been handled by the firm’s Human Resources department.
Moreover, Allen said this morning that nothing in his employment contract with the Renner entity permitted the company to block access to the IBNN site. He claimed that the company now wants him to sign an agreement not to write about INetGlobal and also to inspect his computer.
Allen Questions INetGlobal’s Operations
Allen said this morning that he questioned how the company was paying its bills in the aftermath of the federal seizure of its assets. He claimed a member of INetGlobal with a Chinese name had received a promotion to a position that purportedly paid $120,000 a year after the seizure. This member, Allen said, also may have a seat on the board of directors and also purportedly had a downline organization in the company that purportedly paid $10,000 a day.
His first question for Renner, Allen said, is “how is that possible with the current funds frozen by the US Government?”
Allen said his position with the company was supposed to pay $75,000, but that he had not seen “a penny.”
“I’m a little upset, a little traumatized by this attempt to shut me down, because I had one hell of a story,” Allen said. “I’m kind of devastated; I have a civil-rights Blog. A lot of people read it.”
No Stranger To Controversy
Allen and his IBNN Blog have been the subjects of controversy. He used an offshoot of the Blog to claim in March that “federal officials” were leaking information about the INetGlobal case to the PP Blog. After the PP Blog began to report on INetGlobal, Allen began to post comments on the PP Blog without initially identifying himself as a Renner employee, claiming that the PP Blog was “minor league” and engaging in a “witch hunt.”
Separately, Allen used the IBNN Blog to attack the Star Tribune newspaper of Minneapolis St. Paul for its coverage of the INetGlobal raid. Meanwhile, Allen’s name is listed in the Secret Service affidavit filed in February to obtain search warrants at the firm’s headquarters. In the affidavit, the agency painted Allen as a person who provided confusing information to an INetGlobal prospect at a January event in Flushing, N.Y.
Undercover agents attended the Flushing event, and one agent’s observations of Allen are noted in the affidavit.
An INetGlobal prospect “stated she was struggling to understand how the business worked and explained that the person who brought her to the conference was not able to explain it either,” the agency said in the affidavit. “She asked what would happen if she sold iNetGlobal products to someone who had a website and they did not see an increase in their profits.
“Donald Allen asked her what type of products the person was selling and the woman gave the example of beauty products,” the agency continued in the affidavit. “Donald Allen replied that if she was advertising beauty products and not selling any, then maybe she should be in a different business. The woman further challenged Donald Allen on people not truly viewing the websites, just simply opening them. Patricio Diez, iNetGlobal’s marketing director for Spanish-speaking countries, then stated that ‘that doesn’t matter for you.’
“When the woman pressed further, stating that it does matter to whomever she sold the package to, Donald Allen simply stated ‘we have solutions for that’ but failed to expand upon those solutions,” the agency said.
After the raid at INetGlobal’s offices in Minneapolis, Allen used the IBNN Blog to criticize both the media and the government for what he described as unfair treatment of the company — without disclosing his tie to the firm. Allen later told the PP Blog he should have disclosed the tie.
Allen said this morning that his thinking about INetGlobal has evolved. He added that he also had revisited certain events at INetGlobal and had come to believe that things were not quite right.
At an event in Las Vegas last year, for example, Allen was not given time to talk to attendees about V-Local, he said. In recent days he has publicly questioned why few if any members were interested in purchasing the company’s editorial products.
“I can’t recall ever selling a press release to a Chinese member of iNetGlobal,” Allen said in a comment on the PP Blog April 23. “My yearly budget was in-part based on iNetGlobal members buying a press release from V-Newswire — hasn’t happened yet.”
Meanwhile, Allen said this morning that he was sympathetic to Steven Keough, INetGlobal’s former chief executive officer and potentially the government’s star witness in the case. The company has claimed Keough tried to hatch an extortion plot after he was dismissed for incompetence.
“Keough understood that INetGlobal members needed to buy the products,” Allen said this morning. “Steven Keough was the best thing that ever happened to that company,” adding that he believed Keough saw “noncompliance” with laws and was dismissed for pointing them out.
BULLETIN: The vice president of marketing and public relations for V-Newswire — an entity in the Steve Renner family of companies — said he will cooperate “100 percent” with federal prosecutors in the INetGlobal Ponzi scheme investigation.
Donald W.R. Allen II said this morning that he has met with the U.S. Secret Service twice in recent days. Allen added that he believed INetGlobal had maligned former company CEO Steven Keough in the days following a Feb. 23 raid at the company’s offices in Minneapolis.
“I respect [Keough] highly,” Allen said. “Keough had the corporate skill . . . to make sure everything was in compliance,” but the company saw him as a “threat,” Allen said.
Allen said this morning that he had an “excellent” meeting Friday with the Secret Service after agents showed up unannounced at his home.
“I have nothing to hide,” Allen said. “I will cooperate 100 percent.”
A full story will appear in a separate post later this morning . . .
EDITOR’S NOTE: Some of the investors in the Trevor Cook/Pat Kiley Ponzi scheme in Minnesota say they believe Cook is lying to investigators about the whereabouts of assets and perhaps other elements of the probe.
“We do not believe this much money could be totally lost in such a short period of time,” an investor told the PP Blog this evening.
The comment followed on the heels of a grim statement issued today by R.J. Zayed, the court-appointed receiver in lawsuits brought against Cook by the SEC and CFTC in November. Cook, 37, pleaded guilty to criminal charges earlier this month and is required to cooperate in unraveling the money mystery as part of his plea agreement.
Zayed said he met with Cook April 23 — and Cook shed little new light on the probe.
Here is the verbatim statement of the receiver (coloring added to distinguish Zayed’s statement from the PP Blog’s Editor’s Note):
The Receiver met with Trevor Cook on April 23, 2010 at the United States Attorney’s office in Minneapolis, Minnesota for about 4½ hours for the purposes of identifying, locating, and retrieving assets belonging to the Receivership Estates. Also present at the meeting were representatives of the SEC, the CFTC, the FBI, the IRS, and the United States Attorney’s Office.
Cook informed the Receiver that he had no submarines, houseboats, or hidden cash. He also identified no real estate, personal property, cash, bank accounts, safe-deposit boxes, jewelry collections, art collections, bonds, stocks, precious metals, buried treasures, or assets of any kind that were not already known to the Receiver. Cook further informed the Receiver that he has not given any assets to others to hold or hide for him. In sum, Cook identified little more than what the Receiver had previously identified, through the Receiver’s investigation, as assets belonging to the Receivership Estates.
Cook identified three gambling accounts that were not included in the public Receiver reports; however, the Receiver already was aware of them. Those accounts contain over $100,000, but the Receiver has not been able to retrieve the money because the accounts are located in places outside of the Receiver and the Court’s authority (Costa Rica, Cyprus, and Jamaica). With Cook’s cooperation, these funds may be recoverable.
According to Cook’s plea agreement, “his currency trading during the period from July 1, 2006 through August 31, 2009 at PFG in Chicago generated trading losses in excess of $35 million.†Cook also filed a claim against Crown Forex, S.A. for $67 million in investor funds that he claims were being held by Crown Forex, S.A. Crown Forex, S.A., however, is insolvent. Therefore, the timing and the amount of any potential recovery is speculative, uncertain, and unknown.
R. J. Zayed
Court-Appointed Receiver for Trevor Gilson Cook et al.
The PP Blog attempts to write serious stories about serious subjects. In recent weeks, we have reported very little on events at Data Network Affiliates (DNA). Perhaps the biggest reason we have published fewer updates on events at DNA was because things had gotten so strange that sharing news with readers almost seemed like a disservice.
In our view, nothing that DNA says should be taken seriously. The company plays into every negative stereotype about multilevel marketing (MLM), seems neither to notice nor to care, and has reinvented itself more times than Elizabeth Taylor has been married — and this in a compressed time frame of only weeks.
DNA, which started its MLM journey earlier this year by telling members it was the business of paying them to record the license-plate numbers of cars for entry in a database because 100 million plate numbers could equate to $1 billion in revenue, sold itself as a sort of “free” Narc That Car.
DNA, though, oversold the “free” part. It then tried to inspire members to buy a $127 upgrade by telling them its free module to enter plate data was a clunker. Its affiliates have done other strange things, such as attempting to persuade prospects that Oprah Winfrey and Donald Trump endorsed the company.
Narc That Car (referenced above) is another MLM company that collects plate data. Like Narc That Car, DNA said it saw itself as an excellent tool for law enforcement and the AMBER Alert program for missing children. At first, DNA suggested AMBER Alert, which is administered by the Department of Justice and the National Center for Missing & Exploited Children, was doing a poor job.
DNA then backed away from that claim, went through a phase it which it positioned itself as an anti-Narc That Car, and finally got around to saying that its database would have limited utility when it came either to helping law enforcement or abducted children and their families.
All of this was done in the name of MLM profits. It also went through a phase in which it threatened reporters with lawsuits. After Dean Blechman, its original CEO, resigned and later said the company was sending out “bizarre” communications authored by a “back door guy,” DNA sought to regroup. Before long, it announced it was in the cell-phone business.
All of this came on the heels of claims by the company that church parking lots and the parking lots of doctors’ offices were wonderful places to record license-plate numbers if for some reason you couldn’t get to Walmart to get your supply. Coupled with the cheerleading on conference calls, it was enough to make a person wonder whether MLM had reached a new low.
DNA Cell-Phone Plan Now DOA
DNA now says it was snookered into believing it could offer an unlimited cell-phone talk and text plan for $10 a month and, for $19.95 a month, could offer unlimited talk, unlimited text and 20 MB of data.
Yes, unlimited for $10 a month.
By comparison, Walmart offers an unlimited talk and text program with unlimited mobile web access called Straight Talk for $45 a month. Straight Talk is part of the Tracfone Wireless Inc. companies. The system runs on the Verizon network, and the pricing has electrified U.S. customers accustomed to paying much higher rates. Walmart has reported that more than 1 million people have joined the Straight Talk program.
If you are a DNA member, did you really believe that DNA, which changes its message like children consume jellybeans at Easter, was going to sell an unlimited plan for $35 a month less than Walmart does through its Straight Talk affiliation and Tracfone’s buying clout with Verizon? Tracfone itself does not undercut the pricing. It has Walmart’s huge economies of scale, its own Straight Talk marketing arm and ample access to the Verizon network behind it now. The program, which started regionally, now has gone national.
An email sent by DNA today — weeks after members were lured by all the talk about cell-phone plans priced four and a half times under Straight Talk and other low-price leaders — confirms that the DNA pricing is impossible. DNA blamed an exuberant reseller for making it believe the pricing was possible.
The pricing was obviously impossible — weeks ago. We try not to be rude on this Blog, but there is just no way to be gentle with this one: If you believed DNA, you are a fool. The crap it sends to your inbox is exactly that: crap. DNA’s crap from the very beginning has been uniquely ripe.
The DNA email was a thing of wretched beauty. The company furiously tried to spin its announcement as good news, but the announcement was just another in a long line of strikingly pungent missives from the firm.
Oh, by the way, the company also announced that Phil Piccolo was involved in DNA. The note announcing both the death of the cell-phone plan and the presence of Piccolo was signed by DNA’s CEO George Madiou. DNA said it was happy to have Piccolo on board.
Here are some highlights (italics added):
We had a call came in from one of our PRO Leaders and asked if we would consider the cellular industry for one of our divisions. She had information that a BIG “MVNO” VENDOR (a reseller of cell service) was not happy where he was and that he not only could bring in the best and lowest prices but that he could bring in thousands of affiliates into our program. We agreed to meet with him.
After meeting [the reseller,] everything seemed to be too good to be true. The names he was tossing around and the prices he said he could deliver were just unbelievable. Let’s face it a $10 a month unlimited talk and text plan, a $19.95 a month unlimited talk & text with 20 MB of DATA plan, were two unbelievable products that got us very excited, and we knew it would get our affiliates thrilled also. The excitement was contagious and we immediately put our full I.T. Division along with our entire Web team on the DNA Cellular Project.
Well the dream turned into a nightmare. After selling hundreds, or should we say thousands of cellular agreements, [the reseller] said he could not deliver either product. He stated that Sprint had terminated his reseller agreement. In fact further investigation on our part, of [the reseller] and his so called $10 and $19.95 monthly service agreements, we found that there are no such service plans to be found by any carrier, anywhere on the planet, by any company in the industry. He also said his good friend of 20 years [name deleted] of Sprint found out that “DNA Affiliates” were raiding the Liberty International, WOW Mobile downline groups. He also stated that [name deleted] found out that “Phil Piccolo” is the lead consultant to the corporate team.
[The reseller] even provided what seemed to be personal e-mails directly from [name deleted], [title deleted] of Sprint to DNA. D.N.A. even received an e-mail supposedly from [name deleted] of Sprint. This entire series of correspondence immediately seemed fraudulent. We plan on contacting [name deleted] because we at D.N.A. feel that there may be foul play with all of these so called [name deleted] communications that are going around.
How would the D.N.A. management be fooled like this? When you believe you are talking to the [title deleted] of Sprint, when you believe you are receiving legitimate email communication with the [rank deleted] of Sprint, it’s easy to be fooled at first. Thankfully there was enough red flags that this foolishness was quickly exposed for what it was.
Addressing the allegation of D.N.A. Affiliates raiding the Liberty International WOW downline, this is another untrue comment. It would be impossible to have 120,000 Affiliates (from D.N.A.) who would not know any WOW Affiliates, so there was a lot of discussion in the field from both companies. There is a very open relationship and mutual respect for Randy Jeffers the owner of WOW Mobile and myself.
In regard to Phil Piccolo, it is no secret that Phil Piccolo is a lead consultant to the D.N.A. corporate team and we are happy to have him on our team. As far as my D.N.A. Corporate team is concern, we do not judge people by what others say about a person, especially on the wild wild west of the Internet, but by the content of their character and their accomplishments. We hired Mr. Piccolo for his genius ability to develop the best compensation plan for our affiliates and his incredible leadership and customer relationship ability. I have also known Mr. Piccolo personally for years and know him as a man of integrity and have watched him help 3 different companies reach the billion dollar level. He is an industry expert that goes back 34 years and we are proud to have him on our team to spear head us to a million affiliates by years end.
We were blinded by excitement and did not believe the rumors that flooded into D.N.A. about [the reseller]. Not only from hundreds of affiliates but from other owners of companies. We thought at first they were just jealous of our newest, greatest and latest deal with [the reseller]. However now with personal experience along with written, documented facts backed up with recorded conference calls, e-mail and voice mail messages. We can truly say that [the reseller] is a fraud and we have cut all ties with him. We are also looking at all legal options to protect D.N.A. from this man including to see if there are any criminal and civil charges that can be explored.
We plan to turn over all of our evidence to the proper authorities. Our intent is to make sure all of our D.N.A. affiliates are fully protected from unethical characters like this man.
We also apologize for [the resellers’] crude language on our conference calls. You have our word that this will never happen again. That anyone we expose to our D.N.A. Family will be 100% checked out and vetted by a very high standard.
Again, we are very excited about being in the cellular industry and we are pleased with the development of D.N.A. Cellular becoming it’s own MVNO in full control of our wireless future! Stay tune for some more great news in the days to come.
Brian Alexik, 33, is wanted by Los Angeles police, and the police department and the U.S. Secret Service have opened a probe after an AK47 assault rifle, ammunition, a camera tripod, narcotics, counterfeit currency and other contraband was found inside Alexik’s apartment.
