The series of screen shots (below) show spam waves aimed here today that appear to originate in China. The would-be visitors tried to register to post “comments” in older stories detailing the MPB Today pyramid scheme, the Evolution Market Group and FinanzasForex fraud schemes and the ProfitClicking fraud scheme. Not pictured are URLs from another Oct. 8 wave, which sought to pull stories and/or post “comments” in threads on scams of more recent vintage, including Zeek Rewards and Profitable Sunrise.
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This is an expanded view of a wave tonight and the spammers’ bids to register to post “comments” here.
Through 12:49 p.m. EDT today, the PP Blog had received 24,575 spams this month alone. By 9:05 p.m. today, the number had risen to 25,264. The total in the past six months has exceeded 317,000. For a month or so, the Blog has been testing a new means of minimizing the effect of data floods on its core systems. This is a work-in-progress that occasionally has created inconvenience for legitimate readers and posters. We appreciate your thoughtful notes and patience as we continue this battle.
‘BlessingGoldClub’ Brief
Speaking of thoughtful notes, we received one today from a person knowledgeable about a purported “opportunity” known as “BlessingGoldClub,” which appears to be a cash-gifting scheme with some members trying to marry themselves to a purportedly Hong Kong-based, Zeek Rewards-like scheme known as Better-Living Global Marketing and an apparent subsidiary known as Bidders Paradise.
We referenced Better-Living Global Marketing in this May 12 thread involving former Profitable Sunrise pitchman and Zeek Rewards fawner John Schepcoff. It also is referenced in this June 5 story about an SEC subpoena aimed at Schepcoff.
We have briefly reviewed some information about Blessing Gold Club, which purports to be a “private membership association.” In any event, offering materials for Blessing Gold Club show children displaying handfuls of cash. If members now are congregating with Zeek and Profitable Sunrise scammers and pushing Better-Living Global Marketing, it could be yet another MLM disaster in the making.
The person knowledgeable about BlessingGoldClub is raising the prospect that gifters are trying to keep Better-Living Global Marketing/Bidders Paradise under the radar and may be avoiding traditional scam-pushing sites such as the Ponzi boards.
Longtime readers will recall that AdViewGlobal, a knockoff of the AdSurfDaily Ponzi scheme, also purported to be a “private association.” According to an AVG consultant (in 2009) who had a criminal record for securities fraud, such structures permit individuals to practice medicine and law without a license.
And by the various magical constructions that existed within AVG, they apparently also make Ponzi and pyramid schemes “legal.”
Be careful out there, Folks. The bots and spammers are doing all they can do to make sure the scammers can thrive on the Internet.
Paul Darby with “President Obama,” apparently on Inauguration Day in 2009 after the U.S. Secret Service infomed the MLM world through the filing of the AdSurfDaily Ponzi case that trading on the name and image of the President of the United States might not be a good idea.
UPDATED 8:37 A.M. EDT (OCT. 21, U.S.A.) Former AdSurfDaily President Andy Bowdoin is continuing to serve 78 months in federal prison at the age of 78 — in part because he borrowed liberally from the MLM scammer’s playbook and planted the seed that the President of the United States (then George W. Bush) backed his “program.” Some MLM prospects joined the ASD fraud scheme — a $119 million Ponzi popularized in part on the Ponzi boards and broken up by the U.S. Secret Service in 2008 — based on pitches highlighting Bowdoin’s purported ties to the White House.
Bush left office on Jan. 20, 2009. Barack Obama then became President.
Records now strongly suggest that Obama was President for only minutes when he became an unwitting salesman for an MLM or affiliate scheme. Indeed, an online pitch featuring “Obama” is dated Jan. 20, 2009, Inauguration Day in the United States and the date upon which Obama took over from Bush.
A Blog on Google’s free Blogspot platform made this headline claim on Jan. 20, 2009: “Barack Obama visits Unimax Services.”
The Blog, which remains online well into Obama’s second term that began on Jan. 20 of this year, features a knockoff of the Seal of the President of the United States. “Presidents Club,” it screams. Recruits for a “program” known as Net Millionaires Club apparently were accorded the title of Presidents — not of the United States, but of the “Unimax States.”
This is straight out of MLM or affiliate scheme La-La Land.
Paul Darby, who describes himself as “President of the Unimax Services Corporation” on the Blogspot site with the “Barack Obama visits Unimax Services” headline, is featured alongside a cardboard cutout of Obama in a video playing on the site. In the bizarre video, Darby bizarrely describes the cutout of Obama as the “featured guest” and suggests the Net Millionaries Club he’s promoting with the knockoff of the U.S. Presidential Seal is an “economic stimulus package.”
If you don’t go any farther than the headline — if you don’t take the time to view the video showing the Obama cutout — you could reasonably conclude that Obama actually visited Unimax Services and endorsed the “program.” Put another way, it’s a contemptible, backdoor way to use the Internet to turn the White House and the Commander-in-Chief into a spokesman for a highly dubious MLM or affiliate scheme.
If all of this seems altogether too much, altogether too bizarre, consider that the Secret Service, through the filing of the ASD Ponzi case in 2008, informed the MLM world that it wasn’t a good idea to go around trying to tie the President of the United States to your scheme. Next consider that the ASD scheme had its own form of a Darby-like Net Millionaries Club; the ASD version was multipronged and was called the “President’s Circle,” the “President’s Advisory Board” and “President’s Advisory Counsel.” Then consider that the Darby Blog — in January 2009, months after the ASD case had been filed — led with the “Barack Obama visits Unimax Services” headline on the date the President was inaugurated.
Did the President of the United States really visit Unimax Services, purveyors of the Net Millionaires Club? And did the White House somehow give Darby permission to alter the Seal of the President of the United States as a means of driving traffic to the “program? Did Paul Darby learn nothing from the ASD case?
But it gets worse . . .
Flash forward to 2013 (while considering that MLM schemes such as BidsThatGive and Lyoness also have tried to tie themselves to the U.S. Presidency or the Presidency of other countries), and you’ll find Darby as the braintrust behind yet another “program.” This one is called “YouGetPaidFast.”
Like ASD before it, YouGetPaidFast has a presence on the Ponzi boards. The new “program” appears to be a cash-gifting scheme. Ponzi-forum pitchman “Ken Russo,” previously of the ASD Ponzi scheme, the GNI and NewGNI Ponzi schemes, the Zeek Rewards Ponzi scheme, the MPB Today pyramid scheme, the Club Asteria fraud scheme and the Profitable Sunrise fraud scheme, is helping lead the YouGetPaidFast charge.
“Ken Russo” appears even to have coined a new acronym to deflect attention away from the critical issues surrounding online fraud schemes. Critics, according to a post attributed to “Ken Russo” at the MoneyMakerGroup Ponzi forum, are “NAG[s].” NAG stands for “Naysayers Anonymous Group.”
According to “Ken Russo,” in apparent defense of YouGetPaidFast (italics added):
“The NAG (Naysayers Anonymous Group) are doing their best to deter you from joining an excellent program which offers one of the best opportunities I have ever seen for average folks to develop a substantial additional income stream. The NAG is relentless in their efforts to denigrate this fine program . . .”
This is occurring after the United States charged three women criminally in Connecticut for pushing a cash-gifting pyramid scheme. Two of the three women were sentenced earlier this year to lengthy terms in federal prison.
It also is occurring against the backdrop of bids earlier this year by enthusiasts of other Ponzi-board “programs” to trade on images of Obama and the prestige of the U.S. Presidency. Those “programs” included Empower Network and “Ultimate Power Profits.”
Unlike his Net Millionaires Club scheme, however, Darby’s YouGetPaidFast scheme appears no longer to be interested in trading on the name of the President of the United States and the seal of the President of the United States.
No, this time Darby is planting the seed that the FBI backs his “program.”
Darby is trotting out some of the same sort of MLM La-La Land talking points advanced by self-styled Zeek Rewards consultant Robert Craddock — that is, if you speak out against a “program,” you’re going to get sued and perhaps even paid a visit by its backers in law enforcement.
As BehindMLM.com is reporting today, Darby now claims to have FBI agents on “speed dial.” And at least one of those agents purportedly has vetted YouGetPaidFast and given it the all-clear.
Beyond that, according to the BehindMLM.com report, one or more Christian pastors is encouraging Darby to sue his detractors.
If that seems altogether too odd, consider that purported Christian pastors also are backing Empower Network and its purported “Badass” content, including the reported death by suicide of a top Herbalife MLM distributor.
David Wood, one of the top dogs at Empower Network, once advised critics to “Back the fuck down.”
“Be warned: BIG, SCARY WARNING,” Wood wrote. “I’m in the process of having lawyers research into whether or not we can sue the shit out of you.”
Whether Wood lost any pastors after the remark is unclear. At least one purported pastor encouraged Empower Network affiliates to overlook the nasty language and simply concentrate on making money. Pastors also backed the ASD Ponzi scheme and the Profitable Sunrise scheme — to cite just two of the MLM fraud schemes that recently have fleeced people of faith. ASD’s Bowdoin, before becoming a pitchman for a scheme known as OneX, once described himself as a Christian “money magnet.”
There is plenty of God talk in YouGetPaidFast, too.
Rolaids products are back on store shelves after a recall that lasted nearly three years — and that may come as particularly good news for sufferers of the ongoing Zeek Rewards sickness.
And with the TelexFree MLM story potentially churning hundreds of thousands of stomachs and getting stranger and stranger with each passing week, Rolaids may have a chance of regaining its past glory under the new leadership of Sanofi US and its consumer-health business Chattem Inc.
One way to look at Zeek Rewards is as a sort of reverse Rolaids, a brand of antacids that provides heartburn relief and became legendary for its claim that it consumed “47 times its weight in excess stomach acid.”
Another way Rolaids worked its way into the American consciousness was by asking a simple question that Sanofi says became “one of the most recognized advertising taglines of all-time”:
“How Do You Spell Relief? R-O-L-A-I-D-S.”
Zeek: The ‘Reverse Rolaids’
While wanting you to believe that it cured financial pain for small businesses and upstart entrepreneurs, Zeek and its combined MLM and auction “programs” actually created it by consuming victims at 44 times its weight. We arrive at this rounded figure (and reverse-Rolaids observation) by dividing the estimated number of Zeek “losers” (840,000) by the population of the North Carolina city of Lexington (18,936).
Indeed, Zeek was to causing financial pain what Rolaids was to relieving your sick stomach.
In August 2012, the SEC described Zeek as a massive Ponzi- and pyramid scheme that duped people into believing it paid a legitimate return of about 1.5 percent a day.
Zeek, through Rex Venture Group LLC, operated from Lexington, turning a Southern city famous for its hospitality and delectable barbecue into the MLM Heartburn Capital of the World.
Rolaids products were pulled from store shelves in late 2010, because “wood and metal particles were potentially introduced into the products during the manufacturing process at an outside supplier” and because customers detected “a musty or moldy scent,” according to the AP and NBC News.
Lexington, unfortunately, inherited the MLM Heartburn Capital title from Quincy, Fla., home base of the $119 million AdSurfDaily MLM scam in 2008. Zeek, the SEC said, gathered about $600 million.
A court-appointed receiver has been gathering up money for Zeek victims for more than a year and prepping to sue Zeek profiteers and insiders. He’s also in the process of seeking court approval to dismantle Zeek’s Heartburn Factory in Lexington.
Though coincidental to the dismantlement of Zeek in a tranquil American city that never wanted the MLM Heartburn Capital title from Quincy, the comeback of Rolaids amid continuing stomach-churning events in MLM La-La Land perhaps is occurring at the perfect time.
BULLETIN: (UPDATED 9:04 P.M. EDT (U.S.A.) The SEC has sanctioned MLMHelpDesk Blogger Adam “Troy” Dooly, amid allegations he accepted money from the Zeek Rewards MLM “program” operated by Rex Venture Group LLC without disclosing to Blog readers and radio listeners that Rex “was paying him” to publicize the Zeek venture.
Section 17(b) of the Securities Act “prohibits publishing, giving publicity, or circulating ‘any notice, circular, advertisement . . . or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer . . . without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof,’” the SEC said.
Zeek has been described by the SEC in court papers (August 2012) as a $600 million Ponzi- and pyramid fraud that was selling unregistered securities as investment contracts. Dooly consented to the sanctions and an accompanying cease-and-desist order without admitting or denying wrongdoing.
“In each instance of public relations or promotion in various media outlets, Dooly failed to disclose to his readers and listeners that RVG was paying him for such publicity,” the SEC asserted in an administrative filing dated today. “Dooly believed that, pursuant to a non-disclosure agreement, RVG maintained the exclusive right to determine whether or not to disclose Dooly’s consulting agreement and the amount of compensation. Because RVG did not authorize such disclosure, Dooly declined to reveal his compensation and, in at least one instance, Dooly denied (or misled his audience about) receiving compensation from RVG (apart from reimbursement of expenses) when asked about his compensation during a public radio program.
Dooly, 49, has settled with the SEC by agreeing to pay disgorgement of $3,000, prejudgment interest of $98.81, and civil penalties of $3,000 to the court-appointed receiver in the case. The receiver is Kenneth D. Bell, who is in the process of preparing lawsuits against Zeek winners and insiders.
From the SEC (italics added):
2. From at least April 2012 until August 2012, Dooly served as a paid consultant to Rex Venture Group, LLC (“RVG”), the parent company of ZeekRewards.com (“ZeekRewards”), the self-described “affiliate advertising division” for a penny auction website known as Zeekler.com. ZeekRewards operated as a multi-level marketing program offering subscription memberships to affiliates who then recruited new affiliates and bought and gave away as samples, or sold, bid packages for the penny auction website. Rather than promoting penny auctions, however, RVG primarily marketed ZeekRewards to investors as an opportunity to earn passive income indefinitely through their participation in the program.
3. Under two successive contracts, RVG agreed to pay Dooly $6,000 per month to provide various consulting and public relations services that included, among other things, responding to negative press about RVG and ZeekRewards; providing live reporting from company events; conducting video chat interviews to “promote company, founders, officers, products and culture”; and providing media exposure to facilitate market penetration and improve public perception. In furtherance of the foregoing, Dooly promoted ZeekRewards on his website, MLMHelpdesk.com; posted blog entries and youtube.com videos giving publicity to ZeekRewards; and conducted at least one radio interview promoting the company.
4. Dooly provided the agreed services until ZeekRewards was shut down by the SEC in August 2012 for operating an illegal pyramid and Ponzi scheme. For all his services, Dooly earned $24,000 in consulting fees, but he never received the last $6,000 payment because the company’s assets were frozen (thus receiving only $18,000). Of that total, $3,000 or approximately 17% was attributed to public relations or promotion in various media outlets.
BULLETIN: The SEC has sued a Florida woman, amid allegations she swindled Colombian-Americans and other Colombians in a $4 million Ponzi scheme that duped investors into believing her purported “immigration bail bonds” program was backed by the FDIC and an “investment broker” later blamed for payout delays.
The woman — Jenny E. Coplan of Tamarac — also has been charged criminally by federal prosecutors in the Southern District of Florida, the SEC said.
Coplan’s age is listed as 54.
“Coplan deliberately misled investors into believing their investments were safe and secure when in reality she was lining her own pockets,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office. “Her predatory scheme exploited the trust and friendship of members of her own community by using empty promises to convince them to trust her with their hard-earned savings.”
All in all, the SEC said, Coplan “raised approximately $4 million from more than 90 investors in Florida, California, Georgia, Texas, Canada, and Colombia.”
Records cited by the SEC show that Coplan controlled at least four Florida LLCs, all of which used the word “Immigration” in their names. All of the entities have been dissolved.
Elements of the case are similar to elements of the $119 million AdSurfDaily Ponzi scheme case brought by the U.S. Secret Service in 2008. Like Coplan, ASD operator Andy Bowdoin was associated with various dissolved business entities in Florida. And as is the case in the allegations against Coplan, some ASD promoters claimed ASD was backed by the FDIC, suggesting money sent to the enterprise by insured.
Some promoters of TelexFree — a current HYIP scheme operating in Brazil and the United States — also have claimed that money sent to their “program” was insured, purportedly making it impossible for participants to lose money. TelexFree may be an affinity-fraud scheme initially targeted at Brazilian-Americans and Brazilians in general. The scheme now has entered many countries.
From the SEC’s complaint against Coplan (italics added):
16. Coplan, who is herself a member of the Colombian-American community, developed relationships with other Colombian-Americans and Colombian immigrants through a business she operated providing immigration services. Coplan then offered individuals the opportunity to invest in Immigration Services and the bail bond program.
17. In about June 2009, Coplan told at least one investor that this was an investment opportunity she offered to her friends and family initially, and then later opened it to everyone. Coplan also told prospective investors she wanted to help them achieve financial stability. To cultivate potential investors, Coplan sometimes mingled with investors’ friends and family members at their social gatherings. A large number of at least one investor’s friends and family members invested.
“Coplan never placed investor funds with any investment broker, and their money was never FDIC insured,” the SEC alleged. “Instead, she paid supposed profits to earlier investors using funds from newer investors in classic Ponzi fashion, and she stole approximately $878,000 of investor money for her own personal use.”
From a statement by the SEC (italics added):
The SEC alleges that Coplan created fictitious investor statements that she disseminated to hide her misuse of the money and lead investors to believe their investments were growing. Furthermore, Coplan e-mailed one investor two purported FDIC statements reflecting insured balances of $107,000 and $250,000, lulling the investor to think the investment was particularly safe. When her scheme began to unravel in 2011, Coplan blamed the purported investment broker for the delay in interest payments to investors, telling them the broker held the investors’ funds to cover deficiencies because Coplan had failed to meet certain monthly investment quotas. Even though Immigration General Services had virtually no funds in its bank accounts and was unable to honor investors’ increasing redemption requests, Coplan tried in late 2011 to create a false appearance that the company was back to business as usual. She issued non-sufficient fund checks to investors purporting to be their monthly profits. Through her continued misstatements, Coplan was able to raise another $578,000 from new investors before the scheme collapsed entirely.
Coplan’s investors were told they’d fetch returns of between “60 to 108 percent annually,” the SEC charged.
EDITOR’S NOTE: In case you haven’t seen the series finale, there are no spoilers in this post. “Breaking Bad” ended its original run on AMC, and America said goodbye (or good riddance) to Walter White, the money-launderer next door, last night. The fictional White, of course, had been pursuing clandestine wealth, recklessly disregarding the safety of his family, destroying the lives of people who got in the way of his self-consuming greed and risking U.S. national security for five TV seasons. (At one point, he’d amassed at least $80 million in cash — enough to equip a small army of thugs or terrorists had they found its hiding place. Lo and behold, a group of neo-Nazi racketeers/murderers in part supplying Czech narcotics traffickers through a Houston-based methylamine supplier and upstart meth manufacturer did find it. Put another way, a white-supremacist group that openly shot at cops and murdered a bicycle-riding child to prevent him from tattling about the heist of a train carrying a meth precursor gained unwarranted economic power in the tens of millions of dollars.)
Like the world of narcotics traffickers, the HYIP world is filled with Walter White-types, the wire fraudsters and money-launderers next door. Beyond that, claims of great faith in God and miraculous money-making systems often accompany HYIP schemes. If you’re repeatedly joining murky HYIP schemes or pushing them, you’re engaging in the same sort of self-indulgence and self-deception chronicled each week on “Breaking Bad,” a program whose greed- and desperation-driven central character — Walter White — openly defies the U.S. government, helps crime thrive in the United States, Mexico and (now) Europe, sets the stage for political instability and for hostilities to develop among friendly nations, and rationalizes it as a necessary means of making money for his family.
The MLM equivalent of a Walter White could be in your upline or downline. Such a figure also could be very close to the money flow, staying out of sight but positioning himself to influence or even extort the public face of the scheme.
White broke bad when he morphed from a mild-mannered, noble but financially struggling chemistry teacher and family man into a brutal and conniving meth kingpin after his cancer diagnosis — on the theory that manufacturing and selling meth would help him pile up some cash to provide for his family after his death. Bodies in Mexico and the United States have piled up around him ever since, including the bodies of 167 people who perished when two planes collided over Albuquerque after an air-traffic controller who couldn’t concentrate on work accidentally directed them into each other because he’d been reduced to emotional rubble by his daughter’s drug-related death. (She asphyxiated on her own vomit; the airplane death toll in Albuquerque was only one less than the real-life Oklahoma City domestic-terrorist attack in 1995, which killed 168 when the Alfred P. Murrah Federal Building was bombed by Timothy McVeigh.)
Another body was that of White’s own brother-in-law, a DEA agent murdered by a neo-Nazi White had hired to kill his business partner (and onetime chemistry student) Jesse Pinkman, the boyfriend of the woman who drown in her own puke. Yet-another body (actually a body part) was that of a DEA informant’s head mounted on a turtle after being severed by a Mexican cartel to send a message. The head and turtle were booby-trapped with explosives that detonated, killing a DEA agent. Still-another body was that of Gus Fring, a Chilean national, New Mexico drug kingpin and onetime White boss who laundered funds through chicken restaurants, pretended to be a supporter of the DEA and was killed by a wheelchair bomb planted by White in the nursing home in which Fring’s enemy Hector Salamanca, a onetime cartel enforcer, resided.
White’s form of money-laundering was the classic car wash. But the writers easily could have provided him a different front, perhaps that of respected teacher who’d gravitated to the commodities field and relied on MLM-style pitchmen and boiler rooms to drum up business for the side operation and help clean up the cash.
** _______________________________ **
James C. Howard III
Court documents in the Commodities Online Ponzi caper describe “purported” purchases of “iron ore” and “related equipment” by the Florida-based firm in Mexico. The documents also point out that the enterprise was led by two individuals previously convicted of narcotics crimes in the United States and that more than $5 million mysteriously was wired to “accounts in Mexico” in March 2011 after one of the felons approved the wiring “directions” of the other — this after the first felon had received an SEC subpoena and the second had found out about it.
Separately, the court-appointed receiver in the case says that, “after substantial investigation, including extensive interviews, depositions, and on-site investigation conducted both in the United States and Mexico, the Receiver concluded that the Defendants had no recoverable iron ore or related equipment in Mexico.”
What they did have in Mexico, if anything, remains unclear. Also unclear is how much of the money sent to Mexico will be recoverable
More than two years after the SEC moved against Commodities Online, the precise nature of its business remains murky. As noted above, one of the things that is known is that two of the firm’s managers were associated with narcotics earlier in their lives and had criminal records for felonies and and yet somehow had managed to become investment executives.
Now, one of those felons — James Clark Howard III — has pleaded guilty to mail- and wire-fraud conspiracy for his role in the Commodities Online scam.
And, according to Howard’s proffer in the criminal side of the case, he approved the “directions” of fellow felon Louis N. Gallo III to wire millions of dollars to Mexico after Howard had been subpoenaed by the SEC.
Gallo was in Mexico, according to the proffer — and that’s an oddity because he was on U.S. federal probation at the time. The Sun Sentinel newspaper reported in 2012 that “Gallo was sentenced in 2008 in New Jersey for bank fraud, intent to distribute cocaine and transmitting a threat to injure.”
And, according to the proffer, Howard was one of the controllers of an enterprise known as SSH2 Acquisitions Inc., which has been sued amid allegations it, too, was conducting a Ponzi scheme. Howard also has been implicated in a separate Ponzi scheme targeting Haitian-Americans in Florida.
Terralynn Hoy, who has not been accused of wrongdoing, is listed in Nevada as a onetime director of SSH2. SSH2 sued Howard, alleging he was conducting a Ponzi scheme.
Hoy earlier had been a cheerleader for AdSurfDaily, which proved to be a $119 million Ponzi scheme. After that, she became a cheerleader for AdViewGlobal, a 1-percent-a-day Ponzi scheme federal prosecutors linked to ASD President Andy Bowdoin, now serving a 78-month sentence in federal prison for the ASD scam. Hoy later was listed by Zeek Rewards as an “employee.” In August 2012, the SEC described Zeek as a $600 million Ponzi and pyramid scheme.
Bowdoin, like Howard, was a convicted felon, according to court records.
AdViewGlobal launched in 2009, even as ASD was the subject of a major federal investigation. Zeek, whose business model strongly resembled the models of ASD and AVG, launched after both ASD and AVG had collapsed. With two convicted felons linked to the narcotics business at the helm, Commodities Online appears to have gathered more than $20 million.
After similar reports in July, there are new reports today that members of the TelexFree MLM “program” have been targeted in hacking and phishing schemes. Such fraud bids often accompany HYIP schemes. One such report appeared on Facebook, where a self-identified member of TelexFree claimed she had two TelexFree accounts and that both had been hacked. The poster further claimed her email account had been compromised and that she was having trouble contacting TelexFree.
Separately, the Blog of TelexFree pitchwoman Faith Sloan is reporting on “FAKE EMAILS / PHISHING EMAILS” apparently associated with a bogus domain that marries the name of one of TelexFree’s payment processors to that of TelexFree to form a dotcom.
In the email, TelexFree members are advised to click on a link to “enable” a new payout system.
The email is fake, according to FaithSloan.com.
“DO NOT CLICK ON ANY OF THE LINKS! DO NOT DO IT!” the site advises.
In mid-August, TelexFree affiliates excitedly announced the firm was using Global Payroll Gateway (GPG) to process payouts due members. By Sept. 22, there were reports that TelexFree had dumped GPG (or the other way around) and that TelexFree was switching to I-Payout. Coinciding with these reports were reports that TelexFree was filing for bankruptcy, but a court in Brazil rejected the filing.
Faith Sloan purportedly is spearheading an effort to popularize TelexFree in Peru. The “program” is under investigation in Brazil and is alleged to be a massive pyramid scheme. Sloan previously was associated with Zeek Rewards, alleged by the SEC last year to be a $600 million Ponzi scheme and pyramid fraud. She also has been associated with “Profitable Sunrise,” a “program” the SEC said earlier this year was conducting a massive international swindle. Other Sloan “programs” included Noobing, part of the business mix of Affiliate Strategies Inc., alleged by the FTC to have conducted a large-scale government-grants swindle. Noobing in part was aimed at people with severe hearing impairments.
Despite the investigations in Brazil and reports of death threats aimed at a judge and prosecutor involved in the TelexFree case, some members — including Sloan — continue to sing the praises of the “program.” Some affiliates claim that $15,125 sent to TelexFree fetches at least $42,075 in a year.
Members have been encouraged online to make deposits in TelexFree accounts at Bank of America and TD Bank, although competing reports have suggested that TelexFree has pulled out of Bank of America. These reports were attributed to “Steve Labriola, Director of Marketing for Telex FREE, Boston.”
TD Bank recently agreed to pay $52.5 million to settle claims it was acting as a facilitator for Scott Rothstein’s epic Ponzi scheme in Florida. Rothstein, a former attorney, is a convicted racketeer serving a 50-year prison sentence for his $1.2 billion Ponzi scheme.
TelexFree has U.S. arms in Massachusetts and Nevada. Some affiliates have claimed they can speed the flow of money to the firm and have encouraged prospects to make copies of deposit slips and banking information and email them to sponsors for “expedited” service. Affiliates of the $119 AdSurfDaily Ponzi scheme in 2008 pitched their downlines in similar fashion. At a minimum, the practice puts followers at risk of identity theft. It also may set the stage for money-laundering and other crimes to occur between and among TelexFree members.
There was a claim on Facebook yesterday in which New Zealand and Australian prospects of TelexFree were told that an “australian and new zealand group . . . can help sponsor others in there and pay them in through our back office easy to transfer cash there.”
URGENT >> BULLETIN >> MOVING: (SECOND UPDATE 4:28 P.M. EDT (U.S.A.) The SEC says Edwin Fujinaga and his company MRI International Inc. were operating a Ponzi scheme from 1998 onward that gathered at least $800 million and targeted Japanese and other investors.
After MRI received a letter in March 2013 from the SEC instructing it not to destroy evidence, the SEC said, “a truck from a “document shredding company . . . picked up boxes of documents from MRI.”
An MRI executive assistant “made several telephone calls to prevent the pickup,” the SEC charged, alleging that “Fujinaga called her and said, ‘Why are you concerned about this?’”
“MRI fired the executive assistant because of her efforts to prevent the document destruction,” the SEC charged.
Fujinaga is 66. He resides in Las Vegas, the SEC said. Part of the scam featured “tours” of MRI’s offices in Las Vegas. The alleged scam is evoking images of Bernard Madoff’s colossal Ponzi scheme, in the sense it appears to have gone undetected for years.
At the same time, the alleged Fujinaga/MRI fraud is reminiscent of the epic Trevor Cook Ponzi scheme in Minnesota, in the sense that investors appear to have been lulled into a false sense of security because the company had a physical presence. It is somewhat common for fraudsters to tout a brick-and-mortar presence as “proof” no fraud scheme is occurring, even though case after case has demonstrated that the frauds may be buried deep inside an enterprise that at first glance appears to be legitimate.
MRI investors “were told that their money would be used to buy accounts from U.S. medical providers with outstanding balances to collect from insurance companies,” the SEC said. “Fujinaga and MRI falsely represented that they purchased the accounts at a discount so they could recover the full amount and turn a profit for investors. They purchased no such accounts in reality, and merely used investor money to pay the principal and interest due to earlier investors in typical Ponzi fashion.”
Similar to other Ponzi schemers whose operations are on the verge of collapse, Fujinaga appeared in 2012 to be preparing to double-down on his fraud, the SEC complaint suggests.
In a memo, the SEC charged, Fujinaga “proposed to resolve the delinquencies by doubling the amount of money raised from new investors.”
The SEC alleged that Fujinaga wrote: “I propose that we reinstate our consultants to fund raise for MRI to secure a larger base of consultants soliciting funds and possibly double the amount off funds raised on a monthly basis.”
Cooperation between the United States and Japan was instrumental in exposing the massive international swindle, the SEC said, noting that the “Financial Services Agency of Japan (JFSA) and the Japanese Securities and Exchange Surveillance Commission (SESC)” exchanged “documents and other evidence critical to the case.”
“Cross-border cooperation can successfully halt fraudsters who attempt to use international boundaries to avoid prosecution,” said Gerald W. Hodgkins, associate director in the SEC’s Division of Enforcement. “The close coordination between the SEC and Japanese regulators was critical to freezing Fujinaga’s assets and foiling his scheme.”
From a statement by the SEC (italics added):
According to the SEC’s complaint, the Ponzi scheme began in October 1998. Fujinaga, who lives in Las Vegas, operated from there but also had a sales office in Tokyo. MRI and Fujinaga hosted Japanese investors in the U.S. for solicitation presentations and tours of MRI’s Las Vegas offices. They told investors they could invest in either U.S. dollars or Japanese yen, and promised returns ranging from 6 to 10.32 percent depending on the size and duration of the investment. Fujinaga and MRI falsely represented that they used investor money solely and exclusively to buy medical accounts receivable. Besides misappropriating money between investors, Fujinaga illicitly transferred investor money to MRI’s operating accounts, where it was used to pay for general operating expenses instead of medical accounts. He also transferred money to other entities he owned that were not in the business of collecting medical account receivables. Investor funds also were siphoned to another company owned by Fujinaga called The Factoring Company, which bought Fujinaga’s cars and paid his bills.
Here is a section from the SEC’s complaint, which was filed under seal two weeks ago (italics added):
As all Ponzi schemes eventually do, the fraudulent enterprise perpetrated by Fujinaga and MRI collapsed. Since at least 2011, MRI has been in default on the payments it is obligated to pay investors. More than 8,000 people invested in MRI and, as of 2012, MRI’s investments totaled approximately $813 million. Notwithstanding MRI’s defaults to investors, this is an ongoing Ponzi scheme, in which Fujinaga and MRI have planned to make up their losses by enlisting new investors for the same treatment suffered by existing investors.
Investors in places other than Japan also were targeted, the SEC said. Those countries included Canada, Malaysia and New Zealand.
The Huffington Post, via The Canadian Press, is reporting that a purported freeman on the land has filed a lien against the property of an Alberta pensioner and declared her home his “embassy.”
Rebekah Caverhill, the property owner, has been reduced to tears in her dealings with Andreas Pirelli, according to the report.
Meanwhile, government officials have expressed sympathy for Caverhill, but apparently are viewing the matter as a civil dispute between a landlord and tenant, according to the report.
From the report (italics added):
No one came to the door at the home when The Canadian Press sought comment from Pirelli earlier this month.
A black Chevrolet Yukon with tinted windows was parked in front. A decal on the rear window said “No Weapons. No Agents. No Foreign Weapons within 3 metres of a Diplomat of a Foreign Nation.”
Many strange and unsettling events have surrounded purported “sovereign citizens” or “freemen on the land” in the United States and Canada. The schemes sometimes have focused on so-called “squatters” who divine paperwork constructions that flummox real-estate owners and litigation opponents, cloud property titles or transfer the ownership or control of property without the consent of the owners.
In the United States, there have been instances in which purported sovereigns have been charged with burglary after allegedly exercising unlawful control over real estate. Whether Canada’s burglary statute could be used in the matter reportedly pertaining to Caverhill and Pirelli was not immediately clear.
Some “sovereigns” have claimed government, diplomatic or royal titles and diplomatic immunity from prosecution. Others have sought to chill reporting on their schemes by divining constructions by which anyone who reports on such matters will be sued for trademark infringement or suffer other financial penalties.
Alberta’s Justice Minister reportedly told The Canadian Press he’d been sued for “$1,000 quadrillion.” A single quadrillion is one-thousand trillion. The U.S. Gross Domestic Product in 2012 was estimated to be about $16.3 trillion, a tiny fraction of the sum for which the Alberta minister reportedly was sued.
A tearful Caverhill reportedly told the Press she was concerned that the purported freeman was “taking away my rights as a Canadian citizen.”
The FaithSloan Blog bizarrely announces that TelexFree has “killed” GPG, a payment processor.
If continuing to recruit during multiple pyramid-scheme probes even as a judge and prosecutor reportedly had been threatened in Brazil with death were not enough, another MLM PR disaster is unfolding: The Blog of Faith Sloan, late of Zeek Rewards and Noobing, an HYIP Ponzi scheme that ripped off people with hearing impairments, wants TelexFree members to know why the alleged pyramid scheme no longer is using Global Payroll Gateway (GPG).
“We killed them,” FaithSloan.com reports flatly on the fate of GPG.
No so, according to FaithSloan.com, which is claiming TelexFree “killed” GPG because it “Could not handle the 50,000 accounts that came into their system.”
TelexFree now has turned to “ipayout’s globalewallet,” according to FaithSloan.com.
Whether TelexFree planned to “kill” IPayout if any hiccups developed in its purported processing of money for TelexFree was not disclosed in the undated post announcing that TelexFree had “killed” GPG. The apparent message in the TelexFree branch of MLM La-La Land, however, is that affiliates will ignore or downplay unsettling events in Brazil such as the pyramid probes and reported death threats and will blame any company that fails to find favor with TelexFree and its international army of cross-border pitchmen.
TelexFree appears to have sought to transition to GPG in mid-August, with affiliates trumpeting the firm on the web as the answer to TelexFree’s troubles. But problems developed within weeks (if not days), and TelexFree affiliates then announced the firm was switching to IPayout. In about a month, GPG went from the penthouse to the doghouse in the minds of certain TelexFree promoters. Now, IPayout apparently has been given the chance to occupy the penthouse in the incongruous world of TelexFree. Will it slip into the TelexFree doghouse and perhaps be “killed” by the firm, like rival GPG before it?
Within days of the announcement that TelexFree had brought IPayout aboard after the purported failure of GPG, TelexFree executive Carlos Costa announced that TelexFree was seeking bankruptcy protection in Brazil. While making the announcement, Costa curiously waved the flags of Portugal and Mediera. Like former AdSurfDaily President Andy Bowdoin, Costa also suggested God was on the company’s side.
Bowdoin is serving a 78-month prison sentence in the United States. His ASD “program” was a $119 million Ponzi scheme. Among other things, Bowdoin claimed a 2008 raid on his “program” that promised a precompounding payout of 1 percent a day was the work of “Satan.”
Some TelexFree affiliates claim that $15,125 sent to the company fetches a profit of at least $42,075 in a year. Images of Jesus Christ have been used in TelexFree promos.
A court-appointed receiver determined that Noobing was impossibly upside-down. Affiliate Strategies Inc., the U.S.-based parent company, registered several corporations offshore, including Noobing, formed in the Caribbean island of Nevis; ASI Management Inc., formed in Belize on March 24, 2009; Landmark Publishing Group LLC, formed in Nevis on March 25, 2009; Landmark Publishing LLC, formed in Nevis on March 25, 2009; International Research and Writing Group LLC, formed in Nevis on July 1, 2009; and International Publishing Group LLC, formed in Nevis on July 1, 2009.
All in all, the receiver said in 2009, “the ASI defendants have formed and operated eighteen additional Kansas LLCs as subsidiaries of Defendant Apex Holdings International LLC.” The receiver proposed a plan by which all assets tied to Noobing’s parent would be sold — right down to a stainless-steel wastebasket in the women’s restroom.
In 2010, the PP Blog interviewed a 64-year-old woman with a profound hearing loss. The interview was conducted through the woman’s interpreter. The woman told the PP Blog she has lost $5,300 in Noobing and could not sleep at night. Noobing later was added as a receivership defendant. The receiver said that Noobing and 14 other companies under the ASI umbrella had become the subjects of “numerous inquiries” from “tax authorities,” creditors and “former independent contractors.”
TelexFree has U.S. footprints in Massachusetts and Nevada. The firm also now purports to be operating in England. TelexFree is the subject of multiple pyramid-scheme probes in Brazil, where it operates through an entity known as Ympactus Comercial Ltd.
There have been reports that at least one judge and one prosecutor involved in the Brazil probe have been threatened with death.
HYIP fraud schemes spread in part because promoters engage in serial disingenuousness and ignore red flags such as unusually consistent returns, claims of guaranteed payouts and the circuitous flow of money. Some TelexFree affiliates have provided ASD-like coaching tips to prospects on how to speed the flow of money to the firm.
Carlos Costa displays the flag of Madeira while announcing TelexFree is seeking bankruptcy protection.
UPDATED 7:21 A.M. ET Jan. 21, 2013, to correct misspelling. With pyramid-scheme probes under way in multiple Brazilian states and affiliates also filing actions against the company, TelexFree says it is seeking bankruptcy protection in Brazil. Early details are sketchy.
Here’s TelexFree executive Carlos Costa making the announcement while waving the flags of Portugal and Madeira and referencing God:
TelexFree operates in Brazil through Ympactus Comercial Ltd. The firm has U.S. arms in Massachusetts and Nevada. Affiliates appear to have established TelexFree-related firms in Florida and California.
