Category: Uncategorized

  • DEVELOPING STORY: Now-Dead California Rampage Suspect Reportedly Announced Murder On Facebook, Took Hostages And Shot At Police And Motorists During Highway Chase

    Sergio Alberto Munoz. Source: Ridgecrest Police Department.
    Sergio Alberto Munoz. Source: Ridgecrest Police Department.

    DEVELOPING STORY: This may be the bitterest irony of all in the bizarre and chilling story that played out yesterday in the environs of Ridgecrest, Calif: Ridgecrest Mayor Dan Clark reportedly was teaching a class on conflict resolution at Mesquite Continuation High School when all hell broke loose in his normally quiet town of about 27,000 residents and carried over into the Mojave Desert, where it ended in the death of a suspected murderer.

    Mesquite’s motto is “Freedom Through Responsibility,” according to its website. It’s a good motto, one that tens and tens of millions of Americans in towns large or small would embrace.

    Ridgecrest police have attributed the hours-long hell to Sergio Alberto Munoz, saying they were dispatched at 5:29 a.m. (PDT) to a residence on W. Atkins Ave. after receiving reports of “multiple gunshots” and a “possible homicide.” Officers arrived to find two people shot, including a woman who’d been shot fatally and a man “with multiple gunshot wounds.”

    Munoz, 39, was identified as the suspect. The beginnings of a homicide investigation unfolded during the morning hours, as the wounded man was transported to Ridgecrest Regional Hospital. Munoz was not found at the scene.

    Police searched for him, apparently while he conjured up even more hell, heralded his crime online, predicted his demise (while assuming it would be glorious) and completed his transition from reputed local drug dealer and user into local madman and terrorist.

    At some point after the shootings, according to media accounts, Munoz called police and said he had a “package” for them and would like to have a shootout at the station, but believed he’d be overmatched. Instead, he reportedly said, he’d “wreak havoc” elsewhere. Three to four hours passed before the full extent of the hell that traversed Ridgecrest and crossed into other areas finally would be known.

    After the Munoz phone threats, according to media accounts, police began to fear for the safety of the entire town. That’s when schools were locked down. There also was fear that Munoz would go to the hospital to finish off the man he’d allegedly shot earlier.

    At some point, a Kern County deputy spotted Munoz in a Dodge sedan. A chase ensued. Police cars followed. Helicopters were dispatched. So was an airplane. Such scenes typically don’t play out in the Ridgecrest area.

    From the Los Angeles Times (italics added):

    As he drove south on U.S. 395, Munoz fired a shotgun and handgun an estimated 10 to 12 times at oncoming traffic and forced several vehicles off the roadway, [Kern County Sheriff Donny] Youngblood said. At one point, the vehicle pulled over and the trunk opened. Officers saw a man and woman inside, who then appeared to pull the trunk lid closed, the sheriff said.

    Youngblood said the presence of people in the trunk “changed the entire dynamic” of the chase.

    Several miles later — north of California 58 — Munoz pulled over again and began shooting through the back seat of the sedan into the trunk, Youngblood said. Seven officers from the Sheriff’s Department, the Ridgecrest Police Department and the California Highway Patrol opened fire, killing the gunman, the sheriff said.

    The “package” to which Munoz had referred earlier in his menacing call to police appears to have been the man and woman in the trunk. Ridgecrest police described them as “hostages.”

    And could any homicidal spree be truly complete these days if not accompanied a hemorrhage of vomit from the suspect on Facebook?

    From a story titled “Wild day in Ridgecrest” in the Daily Independent (italics added):

    While the chase was going on, Munoz was updating his Facebook page. The posts began shortly after 7 a.m.

    He said in three Facebook posts:

    “To all friends got tired of cops lieng and putting me in jail xxxx you lucky bitch i haven’t found you just killed 2 snitches xxx and his girl.”

    “Also xxxx you wanted me dead … now i will when these pigs find me and like a movie i will go.”

    “High speed chase about to go out like a soldier.”

    Munoz went out, all right — but not like a soldier. No, he went out like a homicidal maniac who appears to have committed “suicide by police,” after apparently rejecting the brand of freedom the local high school tries to instill in young minds and after apparently licensing himself to be free to deal drugs, murder a woman, shoot a man, shoot at cops, shoot at cars and drivers innocently pursuing their own freedom and shoot at two human beings in the trunk of his car. (At the time of this post, it was unclear whether the individuals in the trunk were deliberately put in the line of fire by Munoz to create a diabolical means by which police accidentally could kill human shields if they engaged Munoz at any point along his route.)

    To Munoz, cops apparently were truthless “pigs” who should be executed by shotgun at a time and place he selected. And the other human beings who crossed his path yesterday apparently also were viewed under his particular interpretation of freedom as equally valid candidates for the slaughter.

     

    residents of Ridgecrest and environs are not accustomed to seeing scenes such as this: Source: Facebook/The Daily Independent
    Residents of Ridgecrest and environs are not accustomed to seeing scenes such as this: Source: Facebook/The Daily Independent

    Visit The Daily Independent’s Facebook site.

  • Another Scam In Zeekland Region

    breakingnews72A 48-year-old resident of Lexington, N.C., has been charged criminally in an alleged “precious metals investment scam,” the office of North Carolina Secretary of State Elaine F. Marshall said.

    Huge profits purportedly would flow within two weeks from gold transactions in the Middle East, according to related state filings.

    Rondell Scott Hedrick  was taken to the Davidson County Jail under $150,000 secured bond, Marshall’s office said.

    He was charged with 10 counts of securities fraud, five counts of obtaining property by false pretense, five counts of securities-dealer registration violation, five counts of security-registration violation and two counts of violation of a cease-and-desist order.

    Hedrick “was not registered to sell financial securities during the alleged incidents and his company was shown on the Secretary of State website to be not in good standing,” Marshall’s office said.

    “We always ask people to check before they invest,” Marshall said. “In this case, checking first would have shown a corporation that had been dissolved and that neither the suspect nor his investment offering were registered to be doing this business. Plus, he and the company had already been issued a cease and desist order for pursuing this type of activity.”

    The activity that led to Hedrick’s jailing involved trawling for investor cash on Craigslist, amid claims he was using the cash “to buy gold overseas and then re-sell[ing] for huge profits within a matter of days,” Marshall’s office said.

    In November 2012, Marshall’s Securities Division accused Hedrick in a cease-and-desist order of posting an ad a month earlier on Craigslist in Los Angeles that said, “$5,000 Investment pays $15,000 in about 10 days.” He also made at least one more Craigslist pitch during October 2012, according to the order.

    Hedrick “is or was” the president of “Hedrick Consulting, Incorporated” in Lexington, according to the November 2012 order.

    Upon seeing the ad, a California investor called Hedrick and was told Hedrick “was raising capital to buy gold bars in Dubai,” according to the order.

    Dubai is a city in the United Arab Emirates.

    The investor, according to the order, wired Hedrick $5,000 to a Hedrick account at a North Carolina credit union, after Hedrick had provided instructions and claimed he’d be leaving for Dubai soon and providing the investor a return of 200 percent.

    No evidence emerged that Hedrick made the promised trip to Dubai to purchase gold, and the investor received neither the promised return nor the return of the principal, according to North Carolina filings.

    “[H]e has refused to return Investor’s money,” the state said.

    Hedrick also operated a website styled “HedrickConsulting.com,” according to the order.

    HedrickConsulting.com is still viewable online. Alongside photos of glistening buildings in Dubai, these word appears (italics added):

    Gold Buyer
    International Consultant and Broker
    Introduction to MTN – BG – SBLC Sellers
    Coming Soon: Electronic Sales Division

    United States – West Africa – Dubai

    Contact information for for Hedrick Consulting in “Raleigh, North Carolina” and “Malibu, California” also appear at the site.

    Lexington is a small town known for delicious barbeque, rather than crime.

    But Lexington also was the home of Zeek Rewards, which the SEC described in August 2012 as a $600 million Ponzi- and pyramid fraud. Prior to the filing of the SEC complaint, Zeek complained publicly on its Blog about purported interference in its operations by unnamed “North Carolina Credit Unions.”

    “All” criticism of Zeek had been “unprofessional” and based on “false information,” the firm bizarrely contended on Aug. 4, 2012, 13 days prior to the SEC action.

    Among other things, Zeek planted the seed that it would provide a daily return in excess of 1 percent and an annualized return in the hundreds of percent. The SEC later said Zeek duped members into believing that such returns came through legitimate means, alleging that Zeek operator Paul R. Burks “unilaterally and arbitrarily” determined the daily dividend rate so that it would average “approximately 1.5% per day, giving investors the false impression that the business is profitable.”

    With the Zeek debacle still in the news 14 months after the SEC action, Lexington again unwillingly found itself back in the headlines, in a story on yet another fraud scheme aimed at its residents. Earlier this month, state investigators charged an out-of-town vendor at the Lexington wholesale market with two felony counts of trademark violations.

    In the trademark case, Hua Wu, 40, of Raleigh, was accused of possessing nearly $60,000 worth of “counterfeit designer handbags and designer labels.”

    “The sale of counterfeit trademarked goods harms people across the economic spectrum, from consumers to the legitimate manufacturers and retailers who build our economy,” Marshall said earlier this month.

    News about the arrest of Lexington resident Hedrick followed the news of Wu’s arrest by about three weeks.

     

     

  • BULLETIN: FBI Issues Wanted Posters, INTERPOL Issues Red Notices For Alleged International Cybercriminals Who Targeted Americans In Scam That Duped Big-Ticket Shoppers

    BULLETIN: The FBI has issued Wanted posters and INTERPOL has issued Red Notices for at least five alleged cybercriminals who targeted Americans and websites such as eBay, Cars.com, AutoTrader.com and CycleTrader.com in a scheme that netted millions of dollars.

    Victims were in the marketplaces for high-ticket items such as cars, boats and motorcycles, and the scammers and coconspirators posed as sellers and created fake websites to dupe victims into believing they were doing business with real merchants. The products, however, “did not actually exist,” the FBI and federal prosecutors said.

    Phony invoices also were part of the scheme, which also allegedly used “high-quality fake passports to be used as identification by co-conspirators in the United States.”

    “After the ‘sellers’ reached an agreement with the victim buyers, they would often e-mail them invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with instructions to transfer the money to the American bank accounts used by the defendants,” the prosecution team said.

    “Today, we have unsealed charges—and issued wanted posters and Interpol red notices—for a band of dangerous cyber criminals who are alleged to have stolen millions of dollars from unsuspecting consumers around the globe,” said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

    “As described in the indictment, the leader of this band of thieves openly proclaimed that he is beyond the reach of the U.S. criminal justice system,” Raman said. “But with the help of our international partners, we will track down and capture every alleged member of this criminal syndicate, no matter where they are hiding.”

    Among those wanted are Nicolae Popescu. the alleged ringleader described by the FBI as a “Romania fugitive.”

    Also wanted are “Romanian nationals Daniel Alexe (who may also go by the name ‘Alexe Daniel’), Dmitru Daniel Bosogioiu, Ovidiu Cristea, and Dragomir Razvan, and a defendant who goes by the names ‘George Skyper’ and ‘Tudor Barbu Lautaru,’” the FBI and prosecutors said.

    “Using forged documents and phony websites, for years Popescu and his criminal syndicate reached across the ocean to pick the pockets of hard working Americans looking to purchase cars,” said U.S. Attorney Loretta E. Lynch of the Eastern District of New York. “They thought their distance would insulate them from law enforcement scrutiny. They were wrong.”

    Six scamming colleagues of the wanted men already have been caught, the FBI said.

    From a statement by the FBI and federal prosecutors (italics added):

    As alleged in the complaint and subsequent indictment, the defendants participated in a long-term conspiracy to saturate Internet marketplace websites including eBay, Cars.com, AutoTrader.com, and CycleTrader.com with detailed advertisements for cars, motorcycles, boats, and other high-value items—generally priced in the $10,000 to $45,000 range—that did not actually exist. The defendants employed co-conspirators who corresponded with the victim buyers by e-mail, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money. The defendants allegedly even pretended to sell cars from non-existent auto dealerships in the United States and created phony websites for these fictitious dealerships. As part of the scheme, the defendants produced and used high-quality fake passports to be used as identification by co-conspirators in the United States, including Razvan (who previously resided in California), to open American bank accounts. After the “sellers” reached an agreement with the victim buyers, they would often e-mail them invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with instructions to transfer the money to the American bank accounts used by the defendants. The defendants and their co-conspirators allegedly used counterfeit service marks in designing the invoices so that they would appear identical to communications from legitimate payment services. The illicit proceeds were then withdrawn from the U.S. bank accounts and sent to the defendants in Europe by wire transfer and other methods.

    The complaint and indictment describe the extent to which Popescu, in particular, led the conspiracy. Among other things, Popescu coordinated the roles of the various participants in the scheme—he hired and fired passport makers based on the quality of the fake passports they produced, supervised co-conspirators who were responsible for placing the fraudulent ads and corresponding with the victims, and ensured that the illicit proceeds transferred to the U.S. bank accounts were quickly collected and transferred to himself and others acting on his behalf in Europe. Popescu also allegedly directed Cristea to obtain and transfer luxury watches purchased using the illegal proceeds of the scheme, including three Audemars Piguet watches with a combined retail value of over $140,000, to his associates in Europe. It is estimated that the defendants earned over $3 million from the fraudulent scheme.

    Screen Shots Of Wanted Posters

    popescu

    bosogioiu

    cristea

    razvan

    meme

  • BULLETIN: Massachusetts Teacher Found Murdered; 14-Year-Old In Custody

    breakingnews72BULLETIN: (UPDATED 10:37 A.M. EDT U.S.A.) A 24-year-old teacher reported missing late last night was found murdered in the woods near Danvers High School in Essex County, Mass., prompting the closure of all schools in the district today, authorities said.

    Precisely how Colleen Ritzer died was not revealed at a news conference by District Attorney Jonathan Blodgett. The conference concluded minutes ago and was carried live by WHDH.com.

    A 14-year-old has been taken into custody and is a suspect in the killing, authorities said.

    Police began investigating after Ritzer did not return home from work last night. Upon checking at the school, police found blood in a restroom. Ritzer’s body later was found in the woods, Blodgett said.

    “She was a very, very, respected, loved teacher,” Blodgett is quoted in the Boston Globe as saying about Ritzer. “It’s a terrible tragedy for the entire Danvers community.”

    Police yesterday had received a report that a 14-year-old male was missing and last had been seen “at the Hollywood Hits Cinema on Endicott St around 6:30 this evening,” Danvers police said.

    The boy later was found and apparently now is the suspect in the death of Ritzer, who taught math at the school.

    It is the second murder this week of a teacher in the United States. Mike Landsberry, a math teacher in Sparks, Nev., allegedly was shot and killed Monday at Sparks Middle School by a 12-year-old who shot two other pupils before shooting himself to death.

    Yesterday’s killing of Ritzer mars the celebratory mood in and around Boston, where the Red Sox will open the World Series tonight versus the Saint Louis Cardinals. The Boston region is still recovering from the terrorist bombing at the Boston Marathon in April, just as baseball season was getting under way.

    WHDH-TV 7News Boston

  • Accused Identity Thief May Have Had User ID At TalkGold Ponzi Forum, KrebsOnSecurity Reports; Hieu Minh Ngo, A Vietnamese National, Jailed In United States After Plot ‘To Steal And Sell’ Personally Identifiable Information From More Than 500,000 Individuals, Feds Say

    Screen shot/highlights by PP Blog.
    Screen shot/highlights by PP Blog.

    EDITOR’S NOTE: KrebsOnSecurity is written by Brian Krebs, who worked as a reporter for the Washington Post from 1995 to 2009. Our thanks to a PP Blog reader who brought our attention to information highlighted in the story below. Although the PP Blog is focusing on the TalkGold angle, the KrebsOnSecurity report covers much more, including how a U.S. credit-reporting agency potentially was doing business with a credit-card scammer and forum huckster hiding behind a proxy and wiring money from Singapore. It is highly recommended reading. Two links to the report appear in the story below.

    An individual who used the handle “hieupc” on the “scammer-friendly” TalkGold forum may have peddled stolen Social Security numbers at the forum and appears also to have been in the business of defacing websites and “even attacking the Web site of his former university in New Zealand after the school kicked him out for alleged credit card fraud,” KrebsOnSecurity reports.

    Hieu Minh Ngo, 24, a Vietnamese national, now is jailed in the United States. He was charged in a sealed, 15-count indictment in November 2012 with conspiracy to commit wire fraud, substantive wire fraud, conspiracy to commit identity fraud, substantive identity fraud, aggravated identity theft, conspiracy to commit access device fraud, and substantive access device fraud, the U.S. Department of Justice said on Oct. 18.

    It may be a case of an offshore fraudster who erroneously believed that U.S. agents and prosecutors couldn’t touch him and grew increasingly confident that oceans and land masses that separated him from the United States would insulate him from arrest. In its remarkable story, however, KrebsOnSecurity is reporting that U.S. federal agents “set up a phony business deal to lure Ngo out of Vietnam and into Guam, an unincorporated territory of the United States in the western Pacific Ocean.”

    Ngo was arrested when he arrived in Guam, KrebsOnSecurity reports.

    Citing the indictment, the Justice Department said, “[F]om 2007 through 2012, Ngo and other members of the conspiracy acquired, offered for sale, sold, and/or transferred to others packages of [Personally Identifiable Information] for more than 500,000 individuals.” (Bolding added by PP Blog.)

    The User ID of “hieupc” appears to have been formed at TalkGold in June 2007. (See screen shot above.) In October 2010, a TalkGold post attributed to “hieupc” offered for sale the Social Security numbers and dates of birth (at least) of Americans.

    If “hieupc” is Ngo, it could mean he was trawling TalkGold as a teen-ager and seeking to recruit HYIP scammers as customers for his identity-theft ring. Such an approach conceivably could enable fellow criminals to join HYIP scams under assumed names while providing them a means of accessing U.S. bank accounts,  potentially setting the stage for them to steal money from the accounts and even pass tax liabilities for HYIP program “earnings” to unknowing victims. TalkGold is populated by serial HYIP fraudsters and willfully blind promoters of online fraud schemes. Over the years, such schemes have led to DDoS attacks on the sites of fraud schemes (and sites that report on them) and repeated claims of account hackings.

    Here is part of the “hieupc” TalkGold pitch (italics added):

    OUR PLANS
    Plan For Tester – 6 Credits – $4
    Plan $10 = 15 credits
    Plan $20 = 35 credits
    Plan $30 = 60 credits
    Plan $50 = 110 credits
    Plan $100 = 230 credits
    Reseller Plan $500 – 2000 Credits
    Reseller Plan $1000 – 5000 Credits
    No Hit = No Lost Your Credit.
    SSN US: 3 credits, DOB US: 3 credits Please register an account to buy credits. Thanks

    Such packages of Personally Identifiable Information, the Justice Department said, are known as “fullz” and “typically included a person’s name, date of birth, social security number, bank account number and bank routing number.”

    And Ngo had at least one co-conspirator, according to the now-unsealed grand-jury indictment filed in U.S. District Court for the District of New Hampshire. In the indictment, the co-conspirator is identified as “JOHN DOE ONE,” also known as “rr2518” and “Wan Bai.”

    Here is the first paragraph from the indictment, which is available through a link at the KrebsOnSecurity website:

    Defendant HIEU MINH NGO (“NGO”), also known by online monikers that include “hieupc” and “traztaz659,” resided in New Zealand and Vietnam. He is one of the control persons and administrators for the websites “findget.me” and “superget.info,” and its associated data.

    During the 2007-2012 time period,  “Ngo and other members of the conspiracy acquired, offered for sale, sold, and/or transferred to others stolen payment card data, which typically included the victim account holder’s payment card number, expiration date, card verification value number, account holder name, account holder address and phone number,” the Justice Department said in its Oct. 18 statement.

    Meanwhile, the indictment notes that an “undercover agent located in New Hampshire” was involved in the probe that led to Ngo’s arrest and that the agent was instructed by scammers “to open an account with ‘Liberty Reserve’ in order to engage in any financial transactions with them.”

    In May 2013, federal prosecutors in New York alleged that Liberty Reserve had engaged in a $6 billion money-laundering conspiracy. The U.S. Secret Service is known to be involved in both the Liberty Reserve and Ngo identity-theft probes. Liberty Reserve was popular among HYIP fraudsters and other scammers.

    TalkGold is not referenced in the Ngo indictment. But the forum’s name appears in other court filings as a place from which online Ponzi and fraud schemes are promoted. Just five of the hundreds of recent (or relatively recent) scams promoted at the forum — Zeek Rewards, Profitable Sunrise, AdSurfDaily, PathwayToProsperity and Legisi — are believed to have generated receipts approaching or exceeding $1 billion. (Zeek Rewards = $600 million; ProfitableSunrise = unknown tens of millions; AdSurfDaily = $119 million; PathwayToProsperity = $70 million; Legisi = $72 million.)

     

  • ALBANY (N.Y.) TIMES UNION: Purported ‘Sovereign Citizen’ Who Once Identified Himself As A ‘1922 Silver Dollar Coin’ Found Guilty After Being Tossed From Courtroom For Disruptive Behavior

    recommendedreading1It’s another bizarre one from the make-believe world of “sovereign citizens.”

    From the Albany Times Union, in a story dated today: “Glenn Unger, 62, could only watch the verdict via video from a cell in the Rensselaer County jail. Unger’s antics during the four-day trial before U.S. District Court Senior Judge Thomas McAvoy convinced the judge last week to boot Unger from the courtroom, where he had been representing himself.”

    Read the story in the Albany Times Union, which reports that, when Unger was arrested in December 2012, he identified himself as a “1922 silver dollar coin.”

  • BULLETIN: Shooting Reported At Sparks Middle School In Nevada

    Source: Washoe County School District website.
    Source: Washoe County School District website.

    BULLETIN: The Washoe County School District in Nevada has issued a “Code Red at Sparks Middle School” and the Sparks Police Department is reporting a “shooting” incident at the school.

    “STAY AWAY FROM SPARKS MIDDLE SCHOOL 2275 18TH ST,” the police department warned on its website this morning.  “WE BELIEVE THE SUSPECT HAS BEEN NEUTRALIZED.  ALL PARENTS GO TO AGNES RISLEY TO RETRIEVE YOUR CHILDREN.”

    ABC News, via the AP, is reporting a local hospital says two boys are “in critical condition.”

    Early details are sketchy. Sparks is situated near Reno, Nev.

    Nevada today is contending with another shooting with multiple victims.

    The AP is reporting that a shooting early this morning at an after-hours club in Las Vegas left one patron dead and two employees wounded.

  • URGENT >> BULLETIN >> MOVING: SEC Charges 3 Executives, 8 Promoters Of Alleged ‘Worldwide’ Pyramid Scheme Operating From Hong Kong, Canada And British Virgin Islands; ‘CKB’ And ‘CKB168’ Fraudsters Allegedly Targeted Asian-American Community, Agency Says

    breakingnews72URGENT >> BULLETIN >> MOVING: 3RD UPDATE 5:46 P.M. EDT (U.S.A.) The SEC says it has gained an asset freeze and charged three executives and eight promoters of a worldwide pyramid scheme operating through five entities from Hong Kong, Canada and the British Virgin Islands.

    Promoters of the scheme, which “purportedly” sells Internet-based children’s educational courses, gathered at least $20 million “from U.S. investors, and millions of dollars more from investors in Canada, Taiwan, Hong Kong, and other countries in Asia, the agency charged.

    Entities known as CKB and CKB168 are “at the center of the scheme,” the SEC said. The complaint, which was brought on an emergency basis and initially filed under seal, is filed in U.S. District Court for the Eastern District of New York. U.S. District Judge Roslynn Mauskopf has granted an asset freeze. The seal has been lifted in the case.

    “CKB has little or no real-world retail consumer sales to generate the extraordinary returns promised to investors,” the SEC said. “In fact, CKB has no apparent source of revenue other than money received from new investors. Bank records show that the bulk of the money raised has been paid out to accounts controlled by CKB executives and as commissions to promoters of the pyramid scheme.”

    Various investment schemes with apparent footprints in Hong Kong have been pushed by online hucksters since the SEC moved against U.S. based Zeek Rewards in 2012. On Oct. 14, BehindMLM.com reported that a scheme known as WCM777 operating from Hong Kong through an entity in the British Virgin Islands suddenly announced it was closing its U.S. operations.

    Whether WCM777 had promoters in common with the CKB entities was not immediately clear. What is clear is that the SEC has taken action against three MLM or MLM-like “programs” that promised outsize returns since August of last year, amid allegations that were selling unregistered securities as investment contracts. (These are Zeek Rewards in August 2012; Profitable Sunrise in April 2013; and the “CKB” entities through an emergency action filed Oct. 9 and announced today, after the seal was lifted yesterday.)

    Accompanying the CKB actions was the issuance today by the SEC of an Investor Alert “about the dangers of potential investment scams involving pyramid schemes posing as multi-level marketing programs,” the SEC said. The Zeek and CKB cases are referenced in the Alert.

    “CKB’s operators and promoters profited by abusing relationships of trust within the Asian-American community and promising investors they can earn more money by recruiting other investors instead of selling actual products,” said Antonia Chion, an associate director in the SEC’s Division of Enforcement.  “What CKB really sells is the false promise of easy wealth.”

    Here is how the SEC described the eight U.S. promoters charged:

    • Daliang (David) Guo is a China native and a resident of Coram, N.Y., who was among CKB’s first U.S. promoters. He currently sits atop an investment pyramid, and claims in a testimonial on the CKB website to have earned more than $1 million within eight months.
    • Yao Lin is a resident of Fresh Meadows, N.Y., who was among CKB’s first U.S. promoters. He currently sits atop an investment pyramid, and claims in a CKB website testimonial to have earned more than $300,000.  The SEC’s complaint alleges that bank and credit card accounts he controls have received approximately $450,000 from CKB investors.
    • Chih Hsuan (“Kiki”) Lin is a Taiwanese native and resident of Las Vegas who claims in a CKB website testimonial to have earned “one million USD” in her first two months of investing.  She operates a website through which “CKB members” can log in to a password-protected area. She is within David Guo’s pyramid. The SEC’s complaint alleges that bank accounts she controls have received approximately $1.8 million from CKB investors.
    • Wen Chen Hwang (“Wendy Lee”) is a Taiwanese native and resident of Rowland Heights, Calif., who claims in a CKB website testimonial to have made $53,000 within four months. She is within Yao Lin’s pyramid. The SEC’s complaint alleges that bank accounts she controls have received approximately $2.2 million from CKB investors.
    • Toni Tong Chen is a resident of Hacienda Heights, Calif., and a certified public accountant who was formerly associated with a registered broker-dealer and held securities licenses. She and her husband claim to have earned six-digit commissions and in excess of a 100 percent return on their investment. They are connected to Wendy Lee and have made presentations at her weekly seminars in Los Angeles.
    • Cheongwha (“Heywood”) Chang is a Chinese native and the husband of Toni Tong Chen. He was formerly associated with a registered broker-dealer and held securities licenses. The SEC’s complaint alleges that bank accounts that he and his wife control have received approximately $2.1 million from CKB investors.
    • Joan Congyi Ma is a resident of Arcadia, Calif., who was formerly associated with a broker-dealer and held securities licenses. She is connected to Wendy Lee and has helped her organize seminars and other events in Los Angeles. In her CKB website testimonial, she references the day she met Yao Lin as her “lucky day.” The SEC’s complaint alleges that bank accounts she controls have received approximately $200,000 from CKB investors.
    • Heidi Mao Liu is a resident of Diamond Bar, Calif., who was formerly associated with a broker-dealer and held securities licenses. She is connected to Wendy Lee and has provided testimonials at her seminars in Los Angeles. She also operates her own website that promotes the CKB scheme. The SEC’s complaint alleges that bank accounts she controls have received approximately $1.2 million from CKB investors.

    YouTube video pitches and a claim that at least one promoter had acquired five properties in Las Vegas through the scheme were used to dupe the masses, the SEC said.

    “Kiki Lin,” the SEC said, “exemplified the pitch in a videotaped recording posted to the Internet, telling potential investors that in the ‘pyramid triangle system, we spread it from one to ten, and ten to hundred, and hundred to thousand, thousand to ten thousand.’ Kiki Lin later added, ‘And for those who really want to make money, who are really hard working, in a short time you would all be like John,’ who she claimed ‘made money to buy five houses in Las Vegas.’”

    The charged executives include:

    • Rayla Melchor Santos, whom the SEC said is a Philippines national “who is featured on the CKB website as its founder. Santos is known as “Teacher Sam” and “has traveled to New York and other areas of the U.S. to participate in meetings and seminars to promote CKB.”
    • Hung Wai (“Howard”) Shern, whom the SEC said is a Canadian citizen and resident of Hong Kong “who is featured on the CKB website as the director of CKB168 International Marketing.” And Shern “is one of the signatories to bank accounts used to receive and transfer funds from CKB investors, and has traveled to New York and other areas of the U.S. to participate in meetings and seminars to promote CKB.”
    • Rui Ling (“Florence”) Leung, whom the SEC said is a Hong Kong national “who is described on the CKB website as its chief financial officer. And Leung “is one of the signatories to bank accounts used to receive and transfer funds from CKB investors, and approximately $4.6 million has been transferred from CKB bank accounts to bank accounts in her name and the names of entities she controls. Leung portrays herself as a professional investment adviser who will assist CKB in its supposed future public offering.”

    From the SEC complaint (italics added):

    2. Through publicly available websites, promotional materials, seminars, and videos posted to the internet, as well as through other efforts intended to create the appearance of a legitimate enterprise, Defendants have falsely portrayed CKB as a profitable multi-level marketing company that sells web-based children’s educational courses.

    3. What CKB really sells, however, is the false promise of easy wealth. Potential purchasers of CKB products must invest in CKB to get one of its courses. Defendants promise that those investors will earn exponential, risk-free returns. In addition to the course, each purchaser/investor receives “Profit Reward Points” (“Prpts”) with a purported value of $750.

    Investors are told that they will eam “passive” returns in the form of Prpt dividends and 2-for-1 splits, and that they will be able to buy and sell their Prpts in an online exchange accessible through the CKB website. Investors also are promised that they will earn massive retums by converting their Prpts into shares of CKB stock when the company conducts an initial public offering (“IPO”) on the Hong Kong Stock Exchange sometime during 2014. Some Defendants allege that these returns can be achieved without any risk of loss.

    4. Despite Defendants’ representations to the contrary, the Prpts are worthless and cannot be meaningfully traded, sold or exchanged. Nor has CKB taken required steps to prepare for the promised IPO and, in fact, does not meet the Hong Kong Exchange’s current listing requirements. Even if the IPO were to occur, CKB would have to go public as one of the world’s largest companies in order to honor conversions of the ever-expanding universe of Prpts.

    Still, while essential to the scheme, Prpts are not its only incentive. The scheme’s ultimate goal is to tum investors into recruiters. CKB lures investors with the promise of even greater “active” returns, in the form of commissions and bonuses, for recruiting new, “downline” participants into the program. In contrast to Prpts, active recruitment is the only way to make actual significant money.

    The CKB defendant entities include:

    • WIN168 Biz Solutions Limited (WIN168), which the SEC described as a “private Hong Kong company” that “maintained bank accounts at HSBC in Hong Kong that were used to receive and transfer funds from CKB investors located in the United States and elsewhere. Those accounts received wire transfers from banks located in New York.”
    • CKB168 Biz Solution Inc., which the SEC described as a Canadian company in Toronto that “has maintained bank accounts at TD Bank in Canada that have been used to receive and transfer funds from CKB investors.”
    • CKB 168 Limited, which the SEC said shares a business address with WIN168 and operated from Hong Kong. Its alleged “sole director is CKB168 Biz Solution Limited (“CKB168 Biz Ltd.”), a British Virgin Islands corporation with its office in Tortola,” the SEC said, further alleging that “CKB168 Ltd. maintained a bank account at HSBC in Hong Kong that was used to receive and transfer funds from CKB investors, including wires coming from New York.”
    • CKB 168 Holdings Limited, which the SEC described as sharing a business address with WIN168 and CKB168 Ltd. “Sample stock certificates shown to prospective investors indicate that CKB 168 Holdings is the entity whose shares have been offered to the public,” the SEC said.
    • Cyber Kids Best Education Limited, which the SEC described as the controller of “five bank accounts at Shanghai Commercial Bank Ltd. in Hong Kong, at least two of which were used to receive and transfer funds from CKB investors located in the United States.”

    “WIN168, CKB168 Biz, CKB168 Holdings, CKB168 Ltd., and CyberKids Best have never been registered with the Commission in any capacity and have never registered any offering of securities under the Securities Act or any class of securities under the Exchange Act,” the SEC charged.

     

  • PROFITABLE SUNRISE CASE: Did Fake Reporter Use Photo Of Real Reporter In ‘Story’ Titled ‘Nanci Jo Frazer WINS in Court – A Case Of Innocent Ignorance?’

    “The judge ruled in Nanci & David Frazer’s favor along with Albert Rosebrock (ministry board members) . . . to release frozen funds. The FBI and the Federal government is categorizing Frazer as having suffered from a case of ‘innocent ignorance’ as she worked for nine months doing customer support for a UK Collateral Loan company.”Lede from “story” on Topix.com, Oct. 5, 2013

    Is a photo of a real reporter being used by a fake reporter in the aftermath of the Profitable Sunrise scheme.
    Is a photo of a real reporter being used by a fake reporter in the aftermath of the Profitable Sunrise scheme? (Screen shot brushed by PP Blog.)

    This is what is known from the publicly accessible court docket in Ohio’s July 8 fraud case against alleged Profitable Sunrise promoter Nancy Jo Frazer (also known as Nanci Jo Frazer), Focus Up Ministries and others: On Sept. 24, the docket of the case noted that the judge had ordered the release of $20,000 to Frazer and her husband (David Frazer) to pay legal bills. Another $8,000 was made accessible to Albert Rosebrock, another defendant, to pay legal bills.

    The $20,000 ordered returned to the Frazers was in the form of a cashier’s check David Frazer had surrendered to the court after Ohio’s July action. Rosebrock’s money came from a bank account the judge ordered frozen after the Ohio action was filed. The docket shows that the judge authorized $8,000 from this frozen account to be made accessible to Rosebrock, but the freeze remains on any other money in the account. Freezes also remain on seven other accounts Ohio authorities have associated with the defendants. (Of the eight accounts originally ordered frozen in July, all eight remain frozen.)

    Importantly, Ohio’s civil case remains ongoing. So does a civil case by the SEC at the federal level. The SEC action does not name the Frazers or Rosebrock defendants, but suggests that pitchmen could have promoted Profitable Sunrise without even knowing who was running the purported “opportunity.”

    Purported Profitable Sunrise operator “Roman Novak” and his brother “Radoslav Novak,” a purported attorney associated with Profitable Sunrise, may be fictitious, according to the SEC, which has described Profitable Sunrise as a murky and massive international pyramid scheme that potentially gathered tens of millions of dollars.

    “Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places,” the SEC alleged in April.

    “There is more than a slight possibility, as with many offering frauds, that the people described in the [Profitable Sunrise] website, including the Novak brothers, do not exist,” the SEC said.

    Enter ‘scampoliceinsider’

    On Oct. 5, 11 days after the Sept. 24 Ohio docket entry, someone using the handle “scampoliceinsider” and a photo of a news reporter posted something that resembles a news story on the Topix.com site for Ogdensburg, NY., near the Saint Lawrence Seaway and the border with Canada.

    Gregg Evans, a poster and occasional guest columnist at the PP Blog and a regular poster at the RealScam.com antiscam forum, posted a link to the Topix story at RealScam.com on Oct. 13.

    Among other things, “scampoliceinsider” asserts on Topix that “I WILL GIVE YOU THE INSIDE SCOOP YOU DID NOT KNOW” and that “I am investigating a fraud within a fraud. I am the one who does what others won’t bother to do.” Moreover, “scampoliceinsider” asserts that he or she believes in “The truth backed by facts.”

    Here is the headline on the Topix “scampoliceinsider” story: “Nanci Jo Frazer WINS in Court – a Case of Innocent Ignorance.” The headline stressed the word “WINS” in uppercase. Nowhere does the story mention that Ohio’s case is ongoing and that any money ordered unfrozen was further ordered to be used for the express purpose of paying legal bills. Instead, the story contends that Ohio authorities had known since October 2012 that Profitable Sunrise was a fraud and that the authorities “failed to inform the public and especially Nanci Frazer.”

    It further positions Frazer as a victim of harassment from “A tight group of online individuals [who] have been targeted to be running their own bitcoin scheme” and claims the purported bitcoin schemers “stole Frazer’s image, identity and training videos while she was on vacation” in a bid to drive traffic to their own websites “and cash in on their own fraud.”

    Meanwhile, a strangely worded passage in the story contends that “The FBI and the Federal government is categorizing Frazer as having suffered from a case of ‘innocent ignorance’” while she “worked for nine months doing customer support for a UK Collateral Loan company.” (This would be Profitable Sunrise, which perhaps would be better described as a purported collateral-lending company.)

    Like the bitcoin and associated claims, the story does not substantiate the “innocent ignorance” claim. At the same time,  the story ventures that “The last straw was watching Toledo 11 Fox News put her children in harms way by airing a hateful and false, damaging, home made video story from one of the online stalkers- James L Paris is was a convicted criminal for Securities fraud(they never checked out his background).” (Unedited by PP Blog.)

    The Fox Toledo outlet now is “in position to be turned in to be put under regulators [sic] scrutiny and to be liable for a full investigation which connects them to another scam,” according to the Topix story.

    Paris is the editor of ChristianMoney.com and recently published an ebook on what he describes as his pressure-packed, nerve-racking experience writing about Profitable Sunrise and the enmity directed at him from certain members of the Christian community. Paris denies he is a convicted criminal, saying that he once was named in a civil securities action in Maine after his brother embezzled money from a Paris company and hid the act from Paris and accountants.

    (DISCLOSURE: The PP Blog is referenced in the Paris ebook. The Blog does not personally know Jim Paris, has no business association with him and does not benefit from the book, which was offered by Paris for free online for several days earlier this month and now costs $4.99 at Amazon.com. The book is titled, “Exposing The Ponzi Masters – The Profitable Sunrise Scam: How I Exposed It, How They Tried To Stop Me.” The Blog obtained the book free on Oct. 9 through a link supplied by Paris at RealScam.com. On Oct. 11, the Blog posted to RealScam.com about the book, opining that it believed the Paris book would “serve his intended audience in the Christian community well.” In its RealScam.com post, the Blog also drew some comparisons to the AdSurfDaily Ponzi scheme. ASD, like Profitable Sunrise, was targeted at people of faith.)

    Now, back to the Topix story referenced above . . .

    The photo of the reporter that appeared alongside the Frazer story on Topix in Ogdensburg, near the Canadian border, appears to be a low-resolution copy of a professional portrait/publicity still of a real reporter, a broadcast journalist who started her career at a California TV station in 2010 and accepted a job in 2012 at a station in Nevada, where she works as a weekend anchor. The photo does not identify the reporter by name and appears to have been taken while the reporter was working for the California TV station prior to moving on to the Nevada station.

    It may be the case that a fake reporter posting at Topix found an image of the real reporter online and used it as an avatar to add credibility to the story on Frazer published at the site. The PP Blog believes it has established the identity of the real reporter and emailed her yesterday to determine if the image on Topix was being used without her knowledge and consent and to rule out that she was the author of the Topix post. As of the time of this post, the Blog has not heard back from the reporter, which is not unusual. Media people have busy schedules. (For the purposes of this post, the Blog is not identifying the real reporter by name and has brushed the screen shot above to obscure her face and the identity of a TV station that, like the reporter, may have no knowledge of Frazer or Profitable Sunrise or the Ohio case.)

    In the Blog’s view,  the Topix story does not read like one prepared by a trained, working journalist. Rather, the story on Topix reads like fractured marketing and PR fluff of the type often seen in the HYIP sphere. At least part of it seeks to demonize both the media and the government. Similar situations occurred after the action by the United States against ASD in 2008. Online scammers have been known to pose as legitimate members of the media to add presumptive authority to a scheme.

    In 2011, the famous brand of Consumer Reports was appropriated by scammers to drive dollars to an acai-berry scheme, the FTC said. Meanwhile, “fake” news sites in the United States using the image of a real reporter from France were used in the acai  scheme.

    The PP Blog would be very surprised if the Topix story was authored by a real reporter, especially one using the handle “scampoliceinsider” and trying to stick it to a TV station in Toledo, other media outlets and Ohio authorities in this bizarre fashion.

     

  • CBS/LOS ANGELES: ‘Dry Ice Bombs’ Found At LAX

    CBS/Los Angeles is reporting that “dry ice bombs” were found at Los Angeles International Airport on both Sunday and Monday. A bomb exploded Sunday “inside an employee bathroom at LAX’s Terminal 2,” the station reported. Another bomb exploded Monday. Precisely where that bomb detonated was unclear.

    Also unclear is whether the bombs were planted all at once or over a period of days and precisely how they detonated. Police are at the scene, assisted by the FBI, the station reported.

    No injuries were reported. The airport remains open.

    Other, undetonated bombs have been found at the airport, the station reported.

    A search is under way for a suspect, the station reported.

    Also see coverage in Los Angeles Times.

  • Facebook Profitable Sunrise Site Again Used To Pump Scams, Including 1 Trading On Bible Verse

    Like Profitable Sunrise, "GlobalMutualFunds" appears to be targeted at Christians.
    Like Profitable Sunrise, “GlobalMutualFunds” appears to be targeted at Christians.

    A Facebook site initially used to drive traffic to the massive Profitable Sunrise international fraud scheme again is being used by boatsharks looking to find victims struggling in the water.

    Among the new schemes being promoted on the Facebook site is something called RChange. RChange advertises that users “Top-up/Cash-out by Western Union or Hong Kong local transfer INSTANTLY,by Money Gram or International Bank Wire within 1 day. Unverified member may top-up via Western Union and withdraw via bank wire,western union or money gram directly.” (Unedited by PP Blog.)

    Among the other claims of RChange is that “We do not accept registrations from individuals or companies based in the United States of the America. This includes US citizens residing overseas.”

    In May, the United States accused the Liberty Reserve digital-currency system, which operated through a series of exchanges, of engaging in a $6 billion money-laundering conspiracy.

    Also being promoted on the Profitable Sunrise Facebook site (and on Facebook itself) is a “program” known as “Global Mutual Funds.” Facebook has issued a warning that “Facebook thinks this site may be unsafe.”

    Global Mutual Funds, which appears to be a cash-gifting scheme despite the appearance of the words “Mutual Funds,” appears also to have been promoted from WordPress subdomains, a tactic that has led to suspensions, including the April 2013 suspension of a Profitable Sunrise pitchman. In 2010, the Financial Industry Regulatory Authority (FINRA) warned that HYIP schemes spread in part through social media.

    The pitch for Global Mutual Funds on the Profitable Sunrise Facebook site claims, “RECEIVE TOTAL OF $5,000 INCASH FROM 100 PEOPLE IN NEXT 30 DAYS. THIS LEGIT! & LUCRATIVE PROGRAMME HAS EMPOWERD SO MANY PEOPLE AROUND THE GLOB.” (Unedited by PP Blog.)

    Like Profitable Sunrise, Global Mutual Funds appears to be trading on Bible verse.

    Meanwhile, TelexFree, a “program” under investigation in Brazil amid claims it is conducting a massive pyramid scheme, again is being promoted on the Profitable Sunrise Facebook site.