Category: Writing And Branding

RECEIVER: ‘No Comment’ On Report Zeek Rewards’ Figure Darryle Douglas Involved In New Scheme Known As ‘AuctionAttics’

AuctionAttics logo.

UPDATED 10:04 A.M. EDT JULY 18 U.S.A. The Zeek Rewards’ receivership this morning told the PP Blog it had “no comment” on a report that alleged Zeek insider Darryle Douglas was involved in a new scheme known as “AuctionAttics.”

BehindMLM.com reported early yesterday that Douglas, who owes the Zeek estate $2.2 million plus postjudgment interest, was involved in the selling of shares in a purported “profit pool” offered by Auction Attics. The report led to immediate questions about whether Douglas, a Californian, was involved in another cross-border offering fraud and would market it to former Zeek members.

Zeek is alleged by the SEC and federal prosecutors in the Western District of North Carolina to have been a Ponzi scheme that gathered hundreds of millions of dollars. The SEC filed civil charges in August 2012. Prosecutors have filed criminal charges against alleged operator Paul R. Burks and former executives Dawn Wright-Olivares and Daniel Olivares, her stepson.

Wright-Olivares and Olivares entered guilty pleas to the criminal charges in February 2014. The criminal case against Burks is proceeding toward trial. Douglas was identified as a Zeek “insider” in a lawsuit filed by Zeek receiver Kenneth D. Bell in February 2014.

AuctionAttics appears to be an upstart MLM “program” pitched on social-media sites such as Facebook. The “program” appears to be in prelaunch phase and to have a dotcom website that uses graphics that resemble Post-it brand notes, a trademark owned by 3M.

A spokesperson for 3M did not immediately return a call by the PP Blog for comment on whether the company was concerned its trademark was being infringed by AuctionAttics.

In 2014, Bell raised concerns about some MLMers/network marketers moving from one fraud scheme to another. Bell raised those concerns again in a June 2015 article in Business North Carolina.

A snippet from the Business North Carolina story (italics added):

“Some of these folks had been engaged in this kind of thing before, and frankly, some of our largest winners re-engaged in similar schemes right away.”

Based on a victims’ count on the order of 800,000, Zeek likely is the largest or second-largest Ponzi scheme in U.S. history. (In the end, the TelexFree scheme shut down by the SEC and federal prosecutors last year may take the title, but the final numbers are unclear.)

Zeek was a purported “penny auction.” AuctionAttics appears to be using a similar theme, amid suggestions that its customers can be both bidders and sellers who will generate enormous personal profits either way.

The AuctionAttics website appears to be publishing testimonials attributed to people who were big winners, despite the fact the “program” appears not even to have launched.

One of the testimonials quotes “Maria” as saying, “I can earn much more selling on Auction Attics than i [sic] could anywhere else.” The “program” itself claims “Maria didn’t have a store front, she sold reconditioned cell phones exclusively on Auction Attics and earned up to 500% profit.”

Another “program” claim: “Micheal [sic?] and Brenda buys [sic] items, and then sells [sic] them on Auction Attics. They have the potential to earn $1,000’s weekly!”

“Micheal” and Brenda, meanwhile, are quoted as saying, “What a business, we love it.”

The images depicting them appear to be clipart.

An “opportunity” page on the site of AuctionAttics positions the “program” as the next Apple, Instagram and eBay. Namedropping is a common theme in MLM/network-marketing scams.

Among other things, the website of Auction Attics purports to sell “Cover Ads,” explaining them in this fashion:

“Cover ads are so called because they cover more than the original cost of your item even when it was new.”

In July 2014, according to court filings, Zeek’s Burks, Wright-Olivares and Olivares agreed to a $600 million civil consent judgment with the receivership “to be satisfied with substantially all of their assets.”

Burks settled with the SEC in 2012, and Wright-Olivares and Olivares settled in 2013.

Jul 13, 2015
U.S. Attorney General Issues Statement On Escape From Mexican Prison By Joaquín Guzmán Loera; Reputed Narcotics Kingpin Known As ‘El Chapo’ Reportedly Ducked Through Tunnel

In an extraordinary statement issued on a Sunday, U.S. Attorney General Loretta E. Lynch said “[t]he U.S. government stands ready to work with our Mexican partners to provide any assistance that may help support his swift recapture.”

The reference was to reputed Mexican druglord Joaquin Guzman Loera, known as “El Chapo.” News broke earlier today that Guzman had escaped from a prison about 55 miles outside Mexico City, reportedly by tunneling out.

Here is the full statement by Lynch (italics added):

“We share the government of Mexico’s concern regarding the escape of Joaquin Guzman Loera ‘Chapo’ from a Mexican prison. In addition to his crimes in Mexico, he faces multiple drug trafficking and organized crime charges in the United States.

“The U.S. government stands ready to work with our Mexican partners to provide any assistance that may help support his swift recapture.”

The escape triggered an international media sensation, with publications across the globe covering the sudden disappearance of the leader of the Sinaloa cartel.

Guzman initially escaped in 2001, but was recaptured last year. His latest escape is leading to fears he’ll soon be back at the helm of the murderous cartel and create even more international problems for Mexico’s government, which has been unable to contain him. As the PP Blog noted in 2014, Forbes magazine once described him as a billionaire and as one of the world’s most powerful people.

A sampling of current coverage of the escape:

New York Times.

ABC News.

Toronto Sun, via Reuters.

Bangkok Post, via AFP.

Jakarta Post, via AP.

Jul 12, 2015
What MLMers/Network Marketers Can Learn From BCSC’s ‘Bossteam’ Case And Similar Cases — Including The SEC’s DFRF Enterprises Action
Let’s say you’re an MLMer or network marketer. Your email inbox begins to fill up with offers for a scheme that purports to be an “advertising program” favored by famous brands. Spammers are trying to blast their way into your social-media accounts.

The messages: You’re going to be rich in no time. Beyond that, you’re going to receive valuable shares in a startup.

This was Bossteam E-Commerce Inc. — and it was a noxious Ponzi fraud whose “Inc.” designation was meaningless and served as a reminder that a corporate registration is not proof no scam is occurring.

AdSurfDaily ($119 million) was an “Inc.” running a fraud. Bernard Madoff was at the helm of an LLC involved in the largest Ponzi scheme in U.S. history. (NOTE: MLMers/network marketers should think about these things that next time they point to an “Inc.” or “LLC” designation” as proof of legitimacy. TelexFree, accused of operating a combined Ponzi- and pyramid scheme that gathered on the order of $1.8 billion, was both an “Inc.” and an “LLC.” Rex Venture Group “LLC” operated the Zeek Rewards scheme believed to have gathered on the order of $897 million. At one point in time, promoters of ASD, TelexFree and Zeek pointed to corporate registrations as proof no scam was occurring. The same thing happened with DFRF Enterprises, currently in the news.

As the PP Blog reported in May 2012, the Bossteam “program” surfaced in British Columbia and allegedly sold memberships for up to $5,000 each. Prospects allegedly were told they’d get paid for clicking on ads and could exchange purported “private” shares through a purported “internal trading platform.”

But “Bossteam committed fraud when they created the false impression that Bossteam members and well-known local and international businesses were paying Bossteam to advertise on its websites,” a panel of the British Columbia Securities Commission found in a decision dated yesterday. “This was untrue, as the majority of ads appearing on Bossteam’s websites were associated with Bossteam’s own accounts, and not to accounts for parties that had paid Bossteam to post their links.(NOTE: Bossteam is hardly alone in this category. Remember EAdGear?)

ASD, Zeek and TelexFree also had purported “advertising” elements.

It gets worse — and MLMers/network marketers need the learn from this history.

From the BCSC panel’s decision yesterday (italics/bolding added/spacing approximated):

The panel found that each of the respondents breached the Act by:
- distributing securities of Bossteam without first having filed a prospectus, contrary to section 61(1);
- engaging in conduct that perpetrated a fraud on those who purchased securities of Bossteam, contrary to section 57(b);
- withholding information concerning the sale of securities of Bossteam in response to a demand for production issued under section 144 of the Act, contrary to section 57.5; and
- attempting to conceal or withhold information concerning the sale of securities of Bossteam by instructing others to deny Bossteam had offered such securities to the public and to refer to the concept of online trading as being planned for the future, contrary to section 57.5.
Put another way, Bossteam first ripped off its members and then tried to draft them into an international conspiracy to cover up the fraud scheme.

The decision involved the conduct of Bossteam, Guan Qiang Zhang (also known as Victor Zhang) and Yan Zhu (also known as Rachel Zhu).

Among the panel’s conclusions was that “Zhang contravened section 57.5 of the Act by attempting to conceal information concerning the sale of Bossteam securities when he instructed others to stop referring to Shares as shares and instead call them consumer credits.”

It is common for HYIP scammers to try to tweak language to skirt securities laws. Both before and after the tweaks, the scammers may seek to dupe the fleeced masses into doing the same thing — a circumstance that leads to a flood of misinformation on the web.

One of the classic fraudulent tweaks occurs when a scheme purports to be morphing from a private offering into one that soon will trade on one or more public stock exchanges. Here is part of what the BCSC said in its May 2015 Investor Alert on the DFRF scheme.

The BCSC has become aware that [Daniel Fernandes Rojo] Filho is offering investments to British Columbians with returns of up to 15% per month. Filho is also promising that DFRF will soon be listed on a public stock exchange, after which the value of members’ investments will triple within 30 days. Members will continue to receive up to 15% per month on their investment. These returns are economically impossible. Also, when selling securities, it is illegal to represent that those securities will be listed on an exchange without certain conditions being met.

Daniel Fernandes Rojo Filho also has been cited in filings as Daniel Fernandez Rojo Filho.

The SEC announced its action against Filho, DFRF and others last week. Here is part of what the agency said (italics added):

The SEC alleges that Filho and others began selling “memberships” in DFRF last year through meetings with prospective investors primarily in Massachusetts hotel conference rooms, private homes, and businesses. DFRF promoted the investment opportunity through online videos in which Filho falsely claimed that the company had registered with the SEC and its stock would be publicly traded. As DFRF’s marketing reach widened, membership sales dramatically increased from under $100,000 in June 2014 to more than $4 million in March 2015 alone.

And from the SEC’s complaint (italics added):

Since late March 2015, the defendants have claimed that DFRF is registered with the Commission, its stock is about to become publicly traded, and current investors may convert their membership interests into stock options at $15.06 per share. At first, Filho represented that public trading would start in mid-April 2015. Since then, he has announced several delays and offered various excuses. On June 17, 2015, he claimed that, although public trading has not begun, the value of DFRF stock now exceeds $64 per share.

DFRF and Bossteam were not precisely alike, but both schemes allegedly were offering frauds that operated as Ponzi schemes and duped investors with talk of trading shares. Bossteam allegedly lined up about $14 million, with DFRF coming in at about $15 million.

Bossteam has been cease-traded. Zhang and Zhu have been banned from the British Columbia securities trade. Fines and disgorgement against the pair total $28 million.

Many current online HYIP schemes share a common story of above-market returns, with shared wealth being enjoyed by the masses. These may be advanced as private or public offerings, with references to in-house platforms or public stock exchanges. The term “IPO” also is used in some schemes.

In recent years, the schemes have led to losses that cascade across the globe. The schemes may be positioned as “offshore” and therefore safe or even guaranteed. There may be accompanying claims prestigious banks or insurance companies provide financing or a guarantee against losses.

Among the SEC defendants in the DFRF case is Heriberto C. Perez Valdes, 46, of Miami. The SEC alleged that he is a manager of a Massachusetts DFRF entity “with responsibility for “all administrative and executive work.’”

The agency further alleged that Valdes also is “an administrator of Platinum Swiss Trust, a purported Swiss private bank that is not actually authorized to conduct banking activities in Switzerland. (Emphasis added.) “He has made materially false and misleading statements about DFRF in public meetings and videos posted on the internet.”

How deep did the deception go? Perhaps deep into Boston Harbor.

“On October 16, 2014, DFRF sponsored a public event on a cruise ship in Boston harbor,” the SEC alleged. “Several videos of the event were posted on the internet. In one video, Filho states that DFRF makes a gross profit of 100% on its gold production in Africa, it needs the investors’ money to ‘leverage’ its credit line in Switzerland and triple its available funds, it pays 15% per month to investors (but cannot promise to do so without violating the law), and the investors’ money is fully insured. In a second video, Valdes states that the investors’ money is held in Switzerland and is fully guaranteed.”

Like other schemes (including TelexFree), an insurance company was said to provide DFRF members a safeguard against losses.

Here is part of what the SEC alleged against DFRF defendant Jeffrey A. Feldman, 56, of Boca Raton, Fla. (Italics added.)

He is the sole officer and director of Universal Marketing Group, Inc., a Florida corporation. He claims to be the U.S. representative of Accedium Insurance Company (“Accedium”), which is based in Barbados and London. In July 2007, he filed for personal bankruptcy. In 1998, he was found guilty of fraud and forgery for having received $2.5 million in premiums from a rental car chain for insurance policies that he did not actually obtain. In 1996, the state of Florida revoked his license to sell insurance after he pleaded no contest to charges that he submitted false insurance claims for losses he supposedly suffered from Hurricane Andrew. He has made materially false and misleading statements about DFRF in public meetings and videos posted on the internet.
Jul 7, 2015
‘OATH’ UPDATE: Official Responds To Strange Filing That Claimed Court Clerk In Charge Of Zeek Rewards’ Records Dishonored Office

Viewed as a PDF, this is a section from a court order signed by three federal judges appointed by the President of the United States. The order from April 1994 officially appointed Frank G. Johns clerk of the U.S. District Court for the Western District of North Carolina.

UPDATED 9:21 A.M. EDT JULY 2 U.S.A. As the PP Blog reported on June 25, at least one odd sideshow is occurring while court-appointed receiver Kenneth D. Bell is pursuing clawback actions against alleged “winners” in Zeek Rewards.

A filing docketed June 23 and attributed to Canadian alleged winner Catherine Parker led to questions about whether Parker, of Hamilton, Ontario, was a “sovereign citizen.” Parker is facing a default judgment of nearly $214,000. Among other things, the June 23 filing attributed to her accused longtime U.S. Court Clerk Frank G. Johns of the Western District of North Carolina of dishonoring his office.

Johns has held the office for more than two decades.

The filing identified Johns as a “respondent.” It also requested “a certified copy” of any oath taken by Johns and “certified copies and detailed lists of all [the clerk’s] court related bonds, sureties, indemnifications, and insurance related policies.”

Such tactics are consistent with filings by “sovereign citizens.” It is unclear whether Parker adheres to the bizarre “sovereign” ideology, some of which surfaced in the AdSurfDaily Ponzi case and ultimately led to criminal charges and convictions against ASD story figure Kenneth Wayne Leaming.

Leaming acted out on some of his legal fantasies, ultimately participating in the filing of bogus liens against U.S. judicial officials. “Sovereigns” sometimes don’t know when to stop, and escalations often land them in trouble.

Chief Deputy Clerk Terry T. Leitner of U.S. District Court for the Western District of North Carolina responded to the June 23 filing attributed to Parker today.

This is from a letter from Leitner to Parker today (italics added):

In response to your request for a copy of the oath of office form for Frank G. Johns, Clerk, U.S. District Court, this office does not release copies of personnel documents.

This letter will confirm, however, that Frank G. Johns was appointed Clerk of the U.S. District Court for the Western District of North Carolina on April 11, 1994. The oath of office taken by a Clerk may be found in the United States Code at 28 USC Section 951.

Attached is a copy of the Order appointing Mr. Johns which is public record.

Included with the Leitner letter was a copy of a 21-year-old court order from April 1994 that appointed Johns clerk of the district. Three judges signed the order, including then-U.S. District Judge Graham C. Mullen. The order was signed on April 5, 1994. It went into effect on April 11 of that year.

Mullen, who is hearing the Zeek clawback cases, went on to become Chief Judge of the district. A former Naval officer, Mullen is now a Senior District Judge. He also is presiding over the SEC’s Ponzi/pyramid action against Zeek brought in August 2012.

The June 23 letter attributed to Parker appears to contend she entered a defense to the clawback action in October 2014 but that the defense never was entered into the record of the case. Johns entered a clerk’s order of default judgment against Parker on Jan. 6, 2015. The letter requesting the clerk’s oath was filed more than six months later. It complained about Parker’s name being presented in all-caps and accused two attorneys working for the Zeek receivership of dishonoring the court.

The June 23 filing attributed to Parker marked at least the second time a resident of Canada has filed a document that raised questions about whether a person north of the U.S. border was playing potentially costly “sovereign” games in the Zeek clawback actions in the United States.

Bell alleged in September 2014 that Sandra Gavel of Sechelt, British Columbia, was a Zeek winner who owed the receivership estate nearly $90,000, plus interest. As was the case with Parker, Bell alleged that Gavel had received Ponzi proceeds that had come from Zeek victims.

Gavel wrote a letter to the North Carolina court in October 2014 that sought to make Johns or the court itself a “respondent” and asserted Johns had made an “offer to contract” with her, according to records.

“Your offer to contract is hereby rejected as unacceptable,” the letter read in part. It also solicited “evidence that the United States Constitution, North Carolina Constitution, United States Laws, United States statutes and United States codes apply to me.”

Like the June 23 letter attributed to Parker, the Gavel letter described Gavel as a “natural person.”

As is the case with Parker, it is unclear whether Gavel adheres to “sovereign” ideology. But Bell raised questions about Gavel’s curious letter in February 2015. From the receiver (italics added/spacing approximated):

However, Ms. Gavel failed to file a substantive answer to the Complaint. Rather, acting pro se, Ms. Gavel filed a letter that was received by the Court on October 24, 2014. (Doc. No. 32). In the letter, Ms. Gavel states:

Your offer to contract is hereby rejected as unacceptable. . . .
I do NOT consent to the jurisdiction of any United States Magistrate, or the jurisdiction of any United States Article III Judge in the UNITED STATES DISTRICT COURT WESTERN DISTRICT OF NORTH CAROLINA . . . .

(Id.). It is unclear whether, in light of the Defendant’s pro se status, the Court construes this letter as a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction or merely a failure to answer or defend.

Defendants, of course, are entitled to defend themselves in actions brought in U.S. courts. In general, pro se filers — people representing themselves — are held to lower pleading standards. Regardless, they are expected to follow the rules of the court. In U.S. courts, judges have the power to construe a pleading by a pro se filer because the plain meaning may not be clear.

When “sovereigns” are involved, however, it often is the case that the filers are being deliberately obtuse, sometimes as a means of harassment against judges, clerks and litigation opponents. One “sovereign” strategy present in the AdSurfDaily case has been described as “mailbox arbitration” — making an impossible demand of an opponent or perceived opponent, putting in on a tight deadline and declaring a “win” if the demand isn’t met.

The practice needlessly adds to litigation costs and wastes the time of the courts.

The June 23 letter attributed to Parker asserted that Johns had 30 days to produce his oath and other information.

Failure to do so “is your tacit admission to perpetrating fraud upon Catherine Parker in her natural capacity,” the letter read in part.

Johns is a lawfully appointed clerk whose appointment to office was witnessed and verified by three U.S. judges appointed by the President of the United States. Their order was signed on April 5, 1994 and, as noted above, became effective on April 11 of that year. It is captioned “ON THE MATTER OF THE APPOINTMENT OF FRANK G. JOHNS AS CLERK OF THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NORTH CAROLINA.”

It has legal effect even though the name of Johns appears in all-uppercase lettering.

Visit the website of Cornell University’s Legal Information Institute to read up on 28 U.S. Code § 951, “Oath of office of clerks and deputies.”

NOTE: Our thanks to the ASD Updates Blog and its files website.

Jul 1, 2015
Binary-Options Scammers Targeting Investors For Reload Schemes And May Be Offering Bogus Compensation Funds, Quebec Authority Says
UPDATED 10:08 A.M. EDT U.S.A. Binary-options scammers may be using the names of government agencies and copying material from government websites in bids to steer people to reload schemes, Quebec’s securities regulator says.

In a new warning, the Autorité des marchés financiers (AMF) is cautioning investors to be wary of plowing money into online schemes operated by unregistered foreign companies.

Reload schemes typically follow in the wake of collapsed or missing schemes and are designed to fleece marks all over again. Victims chasing losses from an initial scheme end up compounding their losses through second (and often subsequent) schemes.

“The AMF is particularly concerned about schemes that specifically solicit investors who have lost money or who have been unable to recover their money after investing via unauthorized on-line trading platforms in the past few months,” the agency says. “In some cases, callers even claim that they have been mandated by a regulator, such as the AMF, to help investors recoup a specific amount of the money recently lost by trading on an unregistered platform.

“The AMF also recently became aware that material from its website had been copied by a company claiming to be mandated by a foreign regulator to administer a compensation fund. This company’s website is no longer available.”

Investing through unauthorized trading platforms is “very risky and could result in difficulty recovering money and even identity theft,” AMF says. “In addition, these losses cannot be covered by the financial services compensation fund, as the transactions were carried out with companies not registered with the AMF.”

Updated List Of Websites Not Authorized In Quebec To Offer Investment Products And Services

NOTE: Names that appear in bold are the newest platforms AMF deems suspicious.
- www.5markets.com
- www.247binary.com
- www.777binary.com
- www.2251ws.com
- www.anyoption.com
- www.askobid.com
- www.avafx.com
- www.AvaOption.com
- www.avatrade.ca
- www.avatrade.com
- www.bancdebinary.com
- www.bforex.com
- www.binareo.com
- www.etoro.com
- www.financial-advice.com
- www.finexo.com
- www.fioptions.com
- www.forextime.com
- www.forextrada.com
- www.frxbanque.com
- www.fxlite.com
- www.fxntrade.com
- www.fxobank.com
- www.gdbrokers.com
- www.gfcmarkets.com
- www.gmtinvest.com
- www.goforex.com
- www.gtoptions.com
- www.4xp.com
- www.aaafx.com
- www.accentforex.com
- www.amberoptions.com
- www.icmtrading.com
- www.iforex.com
- www.ilq.com.vn
- www.leaderoption.com
- www.liteforex.org
- www.lite-forex.com
- www.markets.com
- www.netotrade.com
- www.nrgbinary.com
- www.onetwotrade.com
- www.plus500.com
- www.PrestigeBanq.com
- www.stockpair.com
- www.strongoptions.com
- www.sycamoreoptions.com
- www.tradersking.com
- www.traderush.com
- www.triumphoption.com
- www.ufxmarkets.com
- www.vaultoptions.com
- www.xm.com
- www.youtradefx.com
- www.ytfxaffiliates.com
Read the June 23, 2015, AMF warning.
Jun 24, 2015
URGENT >> BULLETIN >> MOVING: Achieve Community’s Kristi Johnson Charged Criminally

URGENT >> BULLETIN >> MOVING: (13th Update 1:43 p.m. EDT U.S.A.) After an investigation by the U.S. Secret Service, Kristi Johnson (Kristine Louise Johnson) of the “Achieve Community” has been charged criminally with wire-fraud conspiracy and has agreed to plead guilty, federal prosecutors said.

“By the time the scheme collapsed in February 2015, the conspirators owed victim-investors at least $51 million in purported investment returns, yet Johnson, her conspirators and TAC had available only 4% or approximately $2.6 million,” the office of Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina said.

The SEC charged Johnson, 60, civilly in February 2015 with operating a combined Ponzi- and pyramid scheme that allegedly had gathered at least $3.8 million. She resided in Aurora, Colo., the agency said. The securities regulator also charged Troy A. Barnes, 52, of Riverview, Mich.

Barnes disclosed in February that he was a target of a federal criminal investigation. A charge sheet (known as an “information”) filed by prosecutors yesterday against Johnson described an alleged co-conspirator as “CC#1.” The information also suggested there were other co-conspirators “known and unknown to the United States Attorney.”

These individuals were not named.

The conspiracy prosecution brought by the Secret Service and federal prosecutors appears to have upped the Ponzi dollar sum to $6.8 million. Prosecutors said Achieve “defrauded more than 10,000 investor victims” worldwide.

Prosecutors called Achieve a “sham internet company.” The case against Johnson was brought in the venue — the Western District of North Carolina — that is the center of action in the 2012 Zeek Rewards’ Ponzi- and pyramid scheme.

Achieve and Zeek are known to have had promoters in common. Both schemes instructed prospects and recruits not to call the respective programs “investment” programs in bids to skirt securities laws. Such disingenuousness dates back to at least 2008 and the AdSurfDaily Ponzi scheme, also broken up by the Secret Service.

Here’s how prosecutors described the alleged verbal gymnastics of Achieve and its bids to dupe investors, payment processors and law enforcement (italics/bolding added):

According to court filings, as the scheme grew in size and scope, Johnson and her conspirators concealed the true nature of the scheme through multiple misrepresentations. According to court records, when the conspirators became concerned that the use of the term “investment” would draw scrutiny from regulators, they instructed victim-investors that “We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.”

According to court records, Johnson and her conspirators also lied about the company’s “business model” to the third-party payment processors which processed TAC’s money transactions. When one payment processor concluded that TAC was operating a Ponzi scheme and terminated TAC as a client, court records show that Johnson and her conspirators falsely told victim investors that it was because the payment processor was unable to handle the large amount of money TAC paid to its investors.

As indicated in court documents, the investment scheme began to crumble when payment processors stopped processing the Ponzi payments to victim-investors. By the time the scheme collapsed in February 2015, the conspirators owed victim-investors at least $51 million in purported investment returns, yet Johnson, her conspirators and TAC had available only 4% or approximately $2.6 million.

Prosecutors said “a signed plea agreement was also filed [Thursday], and Johnson is expected to appear before a U.S. Magistrate judge in the coming days to formally accept the plea. The wire fraud charge carries a maximum of 20 years in prison and a $250,000 fine. As part of her plea agreement, Johnson has agreed to pay restitution, the amount of which will be determined by the Court.”

In January 2015, Achieve promoter Rodney Blackburn produced an ad that featured nearly six minutes of continuous footage from the website of the SEC. The ad suggested the SEC did not have jurisdiction over “programs” such as Achieve and “Unison Wealth.” At the time, the SEC declined to comment on the Blackburn promo.

Blackburn promoted several recent Ponzi-board scams that tanked. Included among them were “Daily-Earnings,” plus “Moore Fund” and “Trinity Lines” and “Rockfeller Asset Management Limited” and “Bring The Bacon Home” and “Automatic Mobile Cash.”

Zeek receiver Kenneth D. Bell has raised the issue of MLMers proceeding from one fraud scheme to another.

In December 2014, the PP Blog reported that Achieve boosters were parroting each other and circulating a promo that read, “We are not investing in a stock or buying shares in a company. We are using our God given universal right to spend our money the way we want. We choose not to sell out to the banking system for their tiny little 1% annual return.”

Prosecutors described Achieve’s purported 700 percent return as “bogus.” The SEC described Achieve as a “pure Ponzi and pyramid scheme” whose revenue “has consisted entirely of investor-contributed funds.”

Claims of that a “triple algorithm” made such outsized returns possible also were bogus, authorities said.

From an Achieve promo playing on YouTube. Masking by PP Blog.

Achieve offered a 700 percent ROI, according to the SEC and federal prosecutors.

NOTE: Our thanks to the ASD Updates Blog.

Jun 19, 2015
WCM777 Claims Process Proposed: RECEIVER

WCM777 claims will be accepted in the not-too-distant future, under a proposal by Krista L. Freitag, the court-appointed receiver in the SEC’s pyramid- and Ponzi-scheme case.

The proposal, which includes time guidelines but no specific date upon which claims will be accepted, was submitted to U.S. District Judge John F. Walter of the Central District of California on June 3. Walter must approve the plan. The dates will become clear once the plan, which is subject to objections and amendments, is approved.

EDITORIAL NOTE: IMPORTANT: There is no way to file claims right now, but it perhaps is best to assemble your documentation now — before the filing date and deadlines are announced. As is typical in HYIP scams, WCM777’s books and records allegedly were a mess. In formulating the plan, Freitag says she also has taken the cross-border nature of the scheme into account, but budgeting also is a concern.

Says the receiver, “The notice, the physical claim form, the claim form website and call center will be presented in six languages – English, Spanish, Mandarin, Portuguese, Taiwanese and Japanese. While this does not cover all languages for known investors (because the cost of translation is significant), these six languages account for nearly 90% of investors who received and opened my October 2014 e-blast notification.”

Read the plan and the supporting motion. Read other documents at the receiver’s website.

Freitag says in court filings that she has gathered about $20 million since she was appointed receiver about 14 months ago. WCM777 and associated entities are alleged to have hauled $80 million or more through 77 domestic bank accounts and 23 foreign ones.

Up to 96,000 claimants could come forward, according to an estimate by Freitag. She has nominated Epiq Systems — Class Action & Mass Tort Solutions. Inc., to be the claims administrator.

Snippet From The Proposal

We highly recommend you read the receiver’s plan to gain an understanding of the specifics before the claims process begins. The information below is from the plan and speaks to the difficulties scams such as WCM777 present (italics/bolding added):

3. In formulating procedures for the administration of claims, my goal is to find an efficient and cost effective means to verify and validate investor and creditor claims. In a best case scenario, a receiver transmits the receivership entity’s estimated claim amounts to claimants as part of the proof of claim form and simply seeks confirmation of the claim information. In other cases, a receiver requests claim information and matches the information received from claimants with information found in the records of the receivership entities or backup information provided by investors. Here, these approaches are simply not feasible because there are not reliable, detailed records reflecting who invested and how much was invested.

4. Three additional factors impact the claims review process in this case. First, a significant number of investors did not invest directly with the Receivership Entities, but rather invested through other individuals and entities. That is, many investors gave their money to another individual who pooled the money from multiple investors for a lump sum deposit with the Receivership Entities. This makes the process of matching claims to deposits far more complicated as the Receivership Entities’ records do not accurately reflect each individual investor’s payment.

5. Second, there are many thousands of investors from many countries around the world and the records indicate that the majority of these investors speak at a minimum six different languages. This makes the cost of all phases of the claims process, including manually reviewing claims, extremely expensive.

6. Third, there is the issue of “points.” As the Court will recall from the Commission’s filings, WCM, the third parties involved in pooling, and some insiders issued or sold points to investors. These points were not formally ascribed any particular value. However, the records show that an extensive marketplace for points developed that was independent of the WCM enterprise. While there was no value ascribed to such points by the Receivership Entities, investors and others purchased, sold, traded and valued the points as if they could be exchanged for cash or goods. As such, the expectation is that many investors will provide claim information based on misconceptions related to the value of their points as well as their cash investment in the Receivership Entities. This issue may also dramatically impact the estimated number of ‘known’ investors as those who traded or otherwise sold points may not have ‘registered’ themselves in the company databases.

Jun 5, 2015
BULLETIN: Bulgarian Responsible For Avon Stock Manipulation Last Month, SEC Charges

The SEC has gone to federal court in the Southern District of New York, alleging that a Bulgarian is responsible for the manipulation of Avon’s stock price last month though a false filing in the agency’s EDGAR database.

Avon, an American network-marketing company famous for cosmetics, was only one of the companies targeted, the SEC said.

Bulgaria is a former Soviet bloc country in Southeast Europe. Its capital is Sofia. The incident effectively turned the SEC’s website into a crime scene and led to questions about whether fraudsters were reaching across continents and oceans to carry out their criminal whims in the U.S. marketplace.

Named defendants in the SEC’s action are Nedko Nedev, who allegedly used an address in Sofia; Strategic Capital Partners Muster Ltd.; Strategic Wealth Investments Inc.; PTG Capital Partners LTD; and PST Capital Group LTD.

Each of the companies is described in the SEC complaint as highly dubious, with purported bases of operation in places such as London, the British Virgin Islands and Henderson, Nev.

PST “allegedly made a false EDGAR filing in a 2012 scheme involving the stock of Rocky Mountain Chocolate Factory,” the SEC said. “The defendants also are charged with a similar scheme in 2014 involving Tower Group International Ltd., which involved a false press release instead of an EDGAR filing.

“The schemes followed similar patterns where the accounts had substantial holdings in a company that had been losing value and the companies’ stock values substantially increased after a false filing or press release originating from Bulgaria,” the agency said.

From the SEC’s complaint against Nedev and several purported companies.

A federal judge has approved an asset freeze that will protect about $2 million in brokerage accounts, at least one of which has been linked to Nedev, the agency said.

“We used parallel trading analysis to connect the dots and track down these defendants,” said Daniel M. Hawke, chief of the SEC Enforcement Division’s Market Abuse Unit. “Even when traders attempt to hide behind proxy servers, false filings, and phony foreign entities, we are able to quickly identify patterns and relationships to focus our investigation and identify who is behind the manipulative trading.”

Read the SEC’s statement.

Read the complaint against Nedev and the purported companies.

Jun 4, 2015
Knife-Wielding Man Killed Near Boston Yesterday Planned ‘Violent Jihad’ And Random Police Killings, Feds Say
One of the knives: Source: Boston Police Department.

At 5 a.m. yesterday — two hours before he died in the Boston neighborhood of Roslindale — Usaamah Abdullah Rahim called David Wright of the Boston-area community of Everett, according to an FBI affidavit from a member of Boston’s Joint Terrorism Task Force.

Wright, 25, also is known as Dawud Sharif Wright and Dawud Sharif Abdul Khaliq, the office of U.S. Attorney Carmen M. Ortiz of the District of Massachusetts said.

During the 5 a.m. call, according to the FBI affidavit, 26-year-old Rahim told Wright he was going to “go after” the “boys in blue” and that he “planned to randomly kill police officers in Massachusetts either yesterday (June 2) or today (June 3).”

Here we’ll point out that, just a little more than two years ago, President Obama spoke at an interfaith service in Boston in the aftermath of the terrorist attack at the Boston Marathon. Obama noted that “doctors and nurses, police and firefighters and EMTs and Guardsmen” ran toward the explosions to treat the wounded.

A little more than a year ago, while feting the Boston Red Sox at the White House for winning the 2013 World Series, Obama reminded the audience once again of the valor on display by police during the Marathon bombing. He noted that Officer Richard Donahue of the MBTA Transit Police was shot and nearly killed in a battle with the terrorists and was fighting back from his injuries.

MBTA police noted that their colleague, Officer Sean Collier of the MIT Police Department, was killed by the terrorists.

Despite the Marathon attacks against innocent human beings — and despite the fact the police are the thin blue line that protects society — Rahim apparently wanted to kill Boston-area cops. And Wright, according to the FBI affidavit, apparently had so little regard for the lives of police officers that he instructed Rahim to wipe his smartphone and computer to make sure the plan was not detected.

Wright now has been charged with conspiracy to obstruct justice. A day earlier, in Roslindale at 7 a.m. outside a CVS pharmacy, Rahim allegedly approached cops and the FBI “while brandishing his weapon, and he was shot by law enforcement.”

There are reports that Rahim worked at the store as a security guard.

From federal prosecutors (italics added):

As alleged in the complaint affidavit, Rahim, a 26-year-old private security officer, was planning to engage in a violent attack in the United States, and had purchased three military-style fighting knives and a sharpener in furtherance of this plan. In intercepted calls between Wright and Rahim, the men discussed a knife attack on an individual not named in the complaint, and suggested that the target was to be beheaded and have his/her head placed on his/her chest. According to the complaint, such beheadings are a tactic of some foreign terrorist organizations which use such killings in propaganda videos.

The implication, of course, is that Rahim had been inspired by ISIS and/or the beheadings carried out by the terrorist group. America and other nations have been on guard for such gruesome aggression — and police are the first line of defense.

Before shifting focus to police, Rahim had talked about “beheading” a person in another state.

CNN is reporting tonight that the planned victim was conservative Blogger Pamela Geller.

As CNN reported: “Geller drew national attention last month after an off-duty police officer working security thwarted an attack at her organization’s contest for Prophet Mohammed drawings in Garland, Texas. She’s president of the American Freedom Defense Initiative, which includes subsidiary programs Stop Islamization of America and Stop Islamization of Nations.”

The probe also extends into Rhode Island, according to the FBI affidavit. That’s allegedly because Rahim met with Wright and an unidentified third person on a beach during “inclement weather.” The date of the meeting was May 31, just days after Rahim had acquired three knives on Amazon.com and a device to sharpen them.

Here’s how the affidavit describes the knives:
- An Ontario Spec Plus Marine Raider Bowie fighting knife. “The Marine fighting knife Rahim purchased is 15 inches long when opened, contains a 9.75” blade, and weighs 22.4 ounces.”
- A second Marine fighting knife.
- An Ontario Knife SP6 Spec Plus Fighting Knife 8325. “The SP6 Spec Plus Fighting Knife Rahim purchased is 13 inches long and has an eight inch blade.”
Shortly after the ~~7 a.m.~~ 5 a.m. (June 6 edit) conversation yesterday with Wright, according to the affidavit, “Rahim was on a public street in the Boston area, when he was approached by Boston Police Officers and FBI special agents. [Rahim] took out one of the knives he had purchased from Amazon.com when he saw the officers and agents. One of the officers told [Rahim] to drop his weapon and [Rahim] responded, ‘you drop yours.’

“[Rahim] then moved towards the officers while brandishing his weapon, and he was shot by law enforcement.”

Rahim also called Wright on May 26. This from the affidavit (italics added):

Later in the conversation, Wright told Rahim something was “like thinking with your head on your chest.” Both men then burst out laughing. Based upon my training, experience, and involvement in this investigation, I believe this is a reference to the practice of some foreign terrorist organizations to be head targets and place their heads on their chests in propaganda videos.”

Also see Washington Post report.
Jun 3, 2015
FANTASY POST: CLAIM: MLMHelpDesk Blogger Troy Dooly Outed As Curt Gowdy, ‘The Unknown Comic’ And Kareem Abdul-Jabbar

EDITOR’S NOTE: This is a fantasy post. The story below is not real. See additional Note at the bottom.

Latest drama in MLM: MLMHelpDesk Blogger Troy Dooly accused of living a quadruple life.

MIRAMAR BEACH, FLA. (PP BLOG, JUNE 1) — A lawyer has made spectacular claims that dental records and eyewitness testimony will prove famed MLMHelpDesk Blogger Troy Dooly is leading “at least” a quadruple life that he has not disclosed to his millions of readers and viewers.

Not only is Troy Dooly Troy Dooly, the lawyer says, he’s also Curt Gowdy, “The Unknown Comic” and Kareem Abdul-Jabbar.

And there is growing concern, the lawyer says, that Dooly “simply isn’t a gaggle of ‘nice guys.’ Our crack investigative team led by Anthony Pellicano is developing information that he’s also Don Rickles and D.L. Hughley.”

The lawyer, Ginger Mary Ann of Gilligan Grumby Howell Lovey & Hinkley PLLC of Hollywood, told the PP Blog that famed Boston attorney Denny Crane will testify that Dooly is Gowdy, the former voice of the Boston Red Sox and the host of “The American Sportsman.”

Reached for comment by the PP Blog, Crane said, “Denny Crane saw it with Denny Crane’s own two eyes. Denny Crane was watching the radio booth at Fenway Park with binoculars in the fourth inning of the first game of a doubleheader against the Kansas City A’s on July 27, 1965. It was then Denny Crane saw Gowdy morphing from Gowdy into Dooly, and back into Gowdy. Even delightfully drunk on single-malt Scotch whisky as Denny Crane was at the time, Denny Crane would not forget something like that. And fabrication is simply out of the question for Denny Crane.”

Meanwhile, Mary Ann said Chuck Barris, the former host of “The Gong Show,” a former CIA operative and Crane’s onetime client, would testify that Barris, in 1977, playfully lifted up the paper bag that kept the identity of “The Unknown Comic” secret.

Barris, privy to the identity of “The Unknown Comic” and expecting to see TV funnyman Murray Langston, instead was horrified to see Dooly, Mary Ann said.

“Troy Dooly of MLMHelpDesk not only is ‘The Unknown Comic,’ he also is Murray Langston!” Barris told the PP Blog.

Mary Ann insisted the story was true. Crane declined to comment on Barris’s purportedly shocking encounter with Dooly.

“Denny Crane has nothing to say right now about that,” he said. “Do you feel better now that you’ve talked to Denny Crane? I’m thinking that Denny Crane just made your career.”

Although Mary Ann declined to identify the source who would out Dooly as Abdul-Jabbar, the NBA great and Time magazine columnist, the PP Blog has learned it is Col. Nathan Jessup, accused of perjury in a 1992 case that involved the hazing a fellow U.S. Marine.

Jessup, a Jack Nicholson lookalike, now stands accused in Los Angeles County of breaking into Nicholson’s home last year, stealing the Ocsar-winning actor’s courtside tickets to Lakers’ games and scalping them on eBay.

“The cops told me that Jessup told the FBI that Kareem was going up for a sky hook in 1986 and briefly morphed into this fellow Dooly,” Nicholson told the PP Blog. “I’ve seen Kareem take thousands of shots. He never morphed into anybody. Ask anybody in Hollywood: They’ll tell you Nathan Jessup is a kook who’s made a career out of skimming my identity. He used to do supermarket openings as me, for [heaven’s] sake. My agent found out, and kicked his [freaking] [butt] the whole way back to San Quentin.”

Dooly’s Response

Dooly told the PP Blog he was “too busy to talk at the moment,” and referred questions to Kevin Thompson, his attorney.

“No disrespect, Patrick. I’m up here in Washington, interviewing job candidates outside the revolving floor,” Dooly said, accidentally saying “floor” when he meant “door.”

“Most of us have noticed the revolving floor seems to be working for Herbalife during the FTC probe,” he observed, repeating the same mistake. “I mean, they have a heap of former politicians, aides and agency officials on the payroll now. More and more of us are doing the same thing. We’re calling it, ‘Getting Herbalife Strong.’”

Thompson, of Thompson Burton PLLC of Nashville, said the claims against his client are “bizarre and absurd.”

For starters, Thompson said, “Mr. Gowdy, a great American broadcaster and sportsman, unfortunately died in 2006. Wouldn’t this mean that Troy would have to be dead? And how could Troy be Curt Gowdy, who was born in 1919? Mr Gowdy was 86 when he passed away nine years ago. Troy is more than three decades younger.”

As for the claim Dooly is “The Unknown Comic,” Thompson said that wasn’t true, either.

Take out your subscription to the PP Blog today.

“Anybody who knows Troy knows that he’s only unintentionally funny,” Thompson said. “Don’t get me wrong: Troy is funny as all get out, but it’s always unintentional. Malapropisms and such. Murray Langston, the real ‘Unknown Comic,’ had to be intentionally funny. Troy can’t be funny on cue. Plus, there’s the age thing again, like with Mr. Gowdy. Mr. Langston is much older than my client.”

No matter the source, the claim that Dooly is Abdul-Jabbar is “clearly a mushroom-induced hallucination,” Thompson said.

“Let me mention the age thing again,” Thompson weighed in. “Mr. Abdul-Jabbar is 68. Troy won’t be that for nearly another two decades.

“But there’s something even more obvious,” Thompson continued. “Mr. Abdul-Jabbar is 7 feet 2 inches tall; Troy is maybe 5-feet something. If Troy ever dunked, it was with a Nerf ball on a Nerf backboard with a low rim in the backyard or at the beach. And let me assure you Troy can’t go to his right on any basketball court, regulation or Nerf. A sky hook is simply out of the question for Troy.”

The claim that Dooly might be Don Rickles and D.L. Hughley was “exceptionally irritating” to his client, Thompson said.

“Troy Dooly, a former Marine, is all about the First Amendment,” Thompson said. “Troy is well aware that ‘insult comics’ draw a crowd by saying things that make the audience feel ill-at-ease. In fact, my client was at a convention in Las Vegas and went to see Rickles perform. Rickles picked Troy out of the crowd and told the crowd it was nice to see “Governor Cueball” in the room.

“Can I get you some wax to put a shine on that thing?” Rickles asked Troy.

Dooly, his lawyer said, suspects that any “dental records” that surface and purport to show that Dooly, Gowdy, “The Unknown Comic” and Abdul-Jabbar are one and the same will be the “result of a series of burglaries, with the ‘evidence’ further doctored by Photoshop.”

Thompson confessed some frustration with the state of MLM and the Internet.

“You can bet that some MLMers will ignore all of the irrefutable evidence in favor of Troy and cling to some bizarre conspiracy theory,” Thompson ventured. “My guess is that they’ll say that Troy never has been seen standing side by side in the same room with any of the other three men. And they’ll deduce from that Troy necessarily must be the three other men in addition to himself and therefore is living a quadruple life.

“Doesn’t anybody read Wikipedia any more?” he asked. “Does anybody do any cursory fact-checking before they start spreading around this garbage?”

NOTE: Inspired by this column at MLM HelpDesk and this one at BehindMLM.com. # # #

Take out your subscription to the PP Blog today.

Visit Wikipedia to look up information on:

Curt Gowdy.

“The Unknown Comic” (Murray Langston).

Kareem Abdul-Jabbar.

Anthony Pellicano.

“Denny Crane.”

“Boston Legal.”

“Gilligan’s Island.”

Don Rickles.

D.L. Hughley.

“Insult Comedy.”

Chuck Barris.

“The Gong Show.”

“Confessions of a Dangerous Mind.”

Single-malt Scotch.

Fenway Park.

Boston Red Sox.

“The American Sportsman.”

“A Few Good Men”/”Col. Nathan Jessup.”

Visit Kevin Thompson’s Blog.

Jun 1, 2015

May Subscription Post

NOTE: This post originally was published on May 11 at 7:51 p.m. It was moved back into this slot on May 22, May 23, May 26 and May 30.

Dear Readers,

Our editorial well now stands at 2,667 posts since December 2008. Today alone, readers from more than 35 countries have visited the PP Blog.

There are four “penny-a-post” subscription options in the pull-down menu below. We’re asking readers who believe in what this Blog is doing to take out a one-year subscription for either $25, $50, $75 or $100.

The $25 fee constitutes a penny a post for our current editorial well of 2,500+ articles. The pull-down menu is in case you decide you’d like personally to value the editorial well at 2 cents a post ($50), 3 cents a post ($75) or 4 cents a post ($100).

It is my hope that newer readers who can afford to subscribe will do so at either the $25 or $50 levels. The higher options may be best suited for readers and researchers who’ve been with us a long time and perhaps have read hundreds or even thousands of stories.

Because the Blog’s well is so deep, we’re able to provide readers additional context. You’ll often find this reflected in “quick notes” in the Comments threads below stories. The notes point readers to stories on the same topic or to stories that have a similar theme.

The Blog, of course, also points readers to other sources of information.

There is no paywall at the PP Blog. By purchasing a subscription that automatically renews in one year, you’ll be helping me personally. And, as I’ve previously, you’ll be helping a Blog that publishes hundreds of stories a year and keeps matters important to readers a bookmark away remain free for other readers.

This “penny-a-post” idea has helped me scotch the very real concern about affecting readership by offering subscriptions. The readers who subscribe will be helping keep the Blog free for those who cannot afford to subscribe and for those who simply choose not to.

Our readers of goodwill recognize the PP Blog as a persistent effort to contain harm and to educate the public about matters that destroy pocketbooks and families and, in some cases, affect national security.

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

Patrick

May 29, 2015

Category: Writing And Branding

Updated List Of Websites Not Authorized In Quebec To Offer Investment Products And Services

Snippet From The Proposal

Dooly’s Response