The domain name now resolves to a GoDaddy page, despite claims from Trinity Lines just two days ago that “[e]xciting times are coming for us” and that a “PURCHASE PARTY” would be held today.
A post dated today and attributed to Trinity Lines on the MoneyMakerGroup Ponzi forum claims the “program” folded because of “the current circumstances that are surrounding Trinity Lines and the attacks, abuse and threats that is being aimed at both the admin and the owner.”
Precisely who is operating Trinity Lines never has been clear.
Achieve Community and alleged operators Kristi Johnson and Troy Barnes were charged last week with securities fraud in a complaint filed under seal. The SEC said Achieve was a combined pyramid- and Ponzi scheme. The complaint was made public this week.
“We’re leaving the markets of these crazy MLM companies, and there are people like the Achieve Community, Trinity Lines, Unison Wealth, many of these other companies are coming out,” Blackburn said in the promo. “And they are making programs that are very simplistic, they’re passive, they’re residual incomes. They’re just so simple you just kind of put your money down.”
BULLETIN: (5th update 8:31 p.m.) Zeek Rewards receiver Kenneth D. Bell has sued more than a dozen alleged “winners” with residencies in Norway. These are believed to be the first cases against defendants in Europe. Bell previously has sued U.S. residents and residents of Australia, New Zealand, Canada and the British Virgin Islands.
As is the case against other clawback targets, Bell contends Norwegian defendants must return their Zeek hauls because they “won” money from victims “in an unlawful combined Ponzi and pyramid scheme.”
The alleged Norwegian defendants were identified as:
Geir Vidar Pleym, Oslo, $256,917.29.
Roger Guldahl, Halden, $200,271.51.
Anne Liv Dale, Kristiansand, $158,896.14.
Fredrik Skjoldt, Oslo, $97,694.27.
Robert Ulvberget, Elverum, $72,569.11.
Stian Alexander Karlsen, Oslo, $65,000.94.
Pia Cecilie Fore, Heggedal, $62,115.13.
Knut Fore, Asker, $60,436.49.
Fredrik Harald Skjoldt, Oslo, through CMS Huset AS, an alleged shell company, $57,586.54. (Note: “individually or collectively with Morten Skaar.”)
Morten Skaar, Oslo, through CMS Huset AS, $57,586.54.
Anne-Mette Helland, Mandal, through Vita-min AS, an alleged shell company, $53,428.51.
Zeek is alleged to have gathered on the order of $897 million in less than two years of operation. It was shut down by the SEC in August 2012.
The case against the Norwegian defendants is filed in U.S. District Court for the Western District of North Carolina.
Just yesterday the SEC announced it had charged a “program” known as “Achieve Community” with operating a combined pyramid- and Ponzi fraud that had gathered more than $3.8 million in less than a year of operation. No receiver has been appointed in that case, which remains under investigation.
URGENT >> BULLETIN >> MOVING: (17th update 3:07 p.m. ET U.S.A.) The U.S. Securities and Exchange Commission has charged “Achieve Community” (as Work With Troy Barnes Inc.) and alleged operators Troy A. Barnes and Kristine L. Johnson with operating a combined pyramid- and Ponzi scheme that raised more than $3.8 million. A federal judge in Colorado has ordered an asset freeze and granted a temporary restraining order.
“Johnson and Barnes allegedly claim to be operating a successful investment program when in fact they are taking funds from new investors to pay phony profits to earlier investors,” said Julie Lutz, director of the SEC’s Denver Regional Office.
Achieve’s internal structure is part of the probe.
“Johnson is one of the two founders of TAC, and handles the majority of TAC’s finances,” the SEC charged. “Johnson is an authorized agent of WWTB and has acted as the sole signatory on at least three bank accounts that she opened in the name of WWTB.”
Meanwhile, the Colorado Division of Securities confirmed minutes ago that it was working with the SEC on the Achieve probe.
“We continue to have our own open investigation regarding possible violations of the Colorado Securities Act,” said Lillian Alves, Colorado’s Deputy Securities Commissioner. “The factual basis of our investigation parallels that of the SEC case.”
In a 17-page complaint that was filed under seal on Feb. 12, the SEC described the Achieve Community as a “pure Ponzi and pyramid scheme” whose revenue “has consisted entirely of investor-contributed funds.”
“Johnson and Barnes have made no effort to generate profits from any legitimate business operations from which they could repay earlier investors,” the SEC charged. “Instead, the sole source of repayments to earlier investors is funds contributed by newer investors.”
The Feb. 12 filing date likely means that Achieve still was trying to raise money even as the SEC was in court to request an emergency asset freeze. On Feb. 12, a Barnes-narrated video appeared on YouTube. The 11:06 video was titled “Thursday Update 2 12.” The video provided Achieve members instructions on how to register for a purported new payment processor.
By Feb. 14, Achieve members were quoting a forum post attributed to Barnes that Achieve’s assets had been frozen. Whether a criminal probe is under way is unclear.
Barnes is 52. He resides in Riverview, Mich., according to the complaint. Johnson, known as “Kristi,” is 60. She resides in Aurora, Colo.
Johnson also is associated with an entity known as “Achieve International LLC,” which has been named a relief defendant as an alleged recipient of funds from the fraud.
“Johnson formed Achieve International as a Colorado entity, is an authorized agent of Achieve International, and, on information and belief, is the sole member, and managing member, of Achieve International,” the SEC said. “Johnson has acted as the sole signatory on at least one bank account that she opened in the name of Achieve International. Johnson is a former registered representative, and was last associated with a registered entity in 1996.”
Some Achieve members have described Johnson as a “former stockbroker.” The SEC’s allegation that she is a former registered representative may be particularly problematic for her, leading to troubling questions about whether she simply ignored the very real possibility that the SEC would do exactly what it did: charge her with securities fraud and allege she and Barnes made “material misrepresentations and omissions” about the nature of Achieve.
The SEC accuses both Johnson and Barnes of misappropriating funds sent in by Achieve investors.
From the complaint (italics added/light editing performed):
In addition to making Ponzi payments to investors, Defendants have misappropriated investor funds for Johnson and Barnes’ own personal use.
On more than a dozen occasions, Johnson made significant cash withdrawals or wrote checks to “Cash” from the WWTB and Achieve International accounts, and made corresponding cash payments to her personal accounts.
Johnson used these investor funds to pay her personal expenses, including paying nearly $35,000 in cash for a new car, and making personal credit card payments.
To date, Johnson has misappropriated at least $150,000 in investor funds.
Similarly, Barnes has misappropriated investor funds. Using thirteen separate transfers reflected on WWTB bank statements as “Visa Paypal *Troy Barnes,” Johnson transferred approximately $40,000 to Barnes.
The seal on the complaint was lifted yesterday afternoon in Colorado federal court. Achieve’s websites went offline yesterday. Whether the outage was related to the TRO was not immediately clear.
What is clear is that the SEC wasn’t impressed by Achieve’s claims that a “triple algorithm” somehow made a 700-percent ROI possible. It’s also clear that the SEC spent plenty of time listening to and transcribing recordings used to sell the scheme.
Johnson said this in a conference-call pitch, the SEC alleged: “I thought, what can I do, what can I make, what can I design, that has only what works and none of what doesn’t, and one day, honestly this is what happened, I just saw it. I just saw it in my head. This matrix is 3D, which is why we can’t put it on paper. It’s a triple algorithm. And I can’t for the life of me tell you why I could figure that out in my head. But I could.”
Barnes claimed he hired a programmer “who spent three months perfecting the ‘triple algorithm’ investment formula,” the SEC said.
The trouble, the agency said, was that Achieve had “no legitimate business operations; the only available funds to pay the promised investment returns come from new investors lured into the scheme.”
With their “triple algorithm” cover story, Johnson and Barnes went on to fleece Achieve members, the SEC said.
“In a short video on TAC’s website, again narrated by Johnson, Johnson encourages investors to repurchase new ‘positions’ with their investment returns rather than taking money out of TAC,” the SEC alleged. “Johnson explains that by purchasing one $50 ‘position,’ and then using the $400 investment return to repurchase 8 positions, the investor would earn $3,200. Johnson goes on to explain that, if the investor used the repurchase strategy again, she would then have 64 positions worth more than $25,000. Johnson states that this strategy will ‘give you the same income over and over again, forever.’”
She was hardly alone, the SEC charged.
“Barnes makes similar statements about TAC’s ‘Re-Purchase’ strategy,” the agency alleged. “For example, in a video posted online touting TAC, Barnes states that investors can repurchase more ‘positions’ to make more money. In another online video, Barnes claims that, with the ‘Re-Purchase’ strategy, it is ‘very easy to make six figures.’”
The SEC said its investigation was ongoing. Johnson is the only person alleged in the Feb. 12 complaint to have hauled $100,000 or more out of Achieve.
Johnson and Barnes are charged with securities fraud. And despite claims online that Achieve wasn’t selling an investment or a security and therefore the SEC would have little or nothing to say on the matter, the filing of the complaint shows those claims were a crock.
Achieve’s “positions” are “securities under federal law,” the agency charged.
U.S. District Judge Robert E. Blackburn granted the TRO and asset freeze.
The SEC is seeking an order “that each of the Defendants and the Relief Defendant disgorge any and all ill-gotten gains, together with pre-judgment and post-judgment interest, derived from the activities set forth in this Complaint.”
At the same time, the agency is seeking “civil money penalties.”
Achieve had a presence on well-known Ponzi-scheme forums such as MoneyMakerGroup and TalkGold. Some Achieve promoters created YouTube videos and have moved to other Ponzi-board scams.
With “Achieve Community” members posting on Facebook over the long President’s Day weekend claims attributed to co-founder Troy Barnes that he was under criminal investigation and assets had been seized, something seemed a bit odd on YouTube: Search results appeared to demote Rodney Blackburn in listings when the term “Achieve Community” was entered into the form.
Mass deletions by Blackburn (see below) of Achieve-related content almost certainly explain the apparent SEO erosion. Blackburn, though, hasn’t completely run away from Achieve. A couple of the huckster’s productions remain, including one dated Saturday in which he throws Achieve’s Kristi Johnson under the bus.
It is titled, “Achieve Is Done But We are Not!” The length is 6:24. In the video, Blackburn claims to be “really in shock right now on how everything has played out.”
He further claims he had a falling out with Johnson in the recent past. “I didn’t want to bring that information out because I wanted Achieve to work just as much as each and every one of you,” he said.
This falling out, Blackburn suggests, happened within four days of a Dec. 10 conference call Blackburn co-hosted with Mike Chitty. Johnson, the purported business partner of Barnes in Achieve, was a guest on the call. (Someone who goes by “washable jones” and appears not to be keen on HYIP hucksters posted a recording of the call on YouTube.)
Blackburn and Chitty are Achieve members associated with a sponsor’s group known as the Legendary Income Solutions Team (LIST). On the Dec. 10 call, Blackburn claimed LIST had “over 2,000 people within our marketing team that is supporting Achieve. So, that’s just our little part of the 13,000 people who are in Achieve.”
If “supporting” means “joining,” this means that LIST members alone had plowed at least $100,000 into Achieve and that they constituted 15 percent of Achieve’s membership, something that would have provided Blackburn and Chitty plenty of incentive to keep insisting prosperity for the masses was right around the corner if members would simply not abandon ship when payouts stopped in early November.
It’s not that they stood to gain commissions through Achieve, which claims everybody was on the same team for the common good and promoted a common affiliate link. In Blackburn’s case, what he stood to gain was a payout on the claimed 221 Achieve positions he held. These positions weren’t going to pay if new people did not register and if both existing and new members didn’t keep reinvesting “earnings.”
Blackburn’s expected payout, according to one of his videos, was ballparked at $90,000. And he’d already cashed out $16,000, he said. Registrations for LIST were a second benefit. From there, the LIST “leaders” could plow the marks into other Ponzi-board scams, some of which do pay commissions on top of preposterous interest payments.
The minimum buy-in at Achieve was $50. Much higher buy-ins were possible, with some Achieve members likely spending hundreds or even thousands of dollars and expecting a minimum return of 800 percent, more through the Achieve-endorsed process of plowing “earnings” back into the scheme.
Johnson was a guest on the Dec. 10 call co-hosted by Achieve/LIST members Blackburn and Chitty.
Johnson ostensibly went on the show to lead cheers for Achieve in the aftermath of the payout suspension in November. In that strange network-marketing way, Johnson’s guest spot also gave Blackburn a chance to shine. Rodney, unlike other Achievers, could summon the master and, in some ways, use her to dial down the pressure he might have felt if LIST was responsible for bringing 2,000 people into the “program.”
Blackburn also implied during the call that he was an Achieve insider, telling listeners that Johnson told him things they didn’t get to hear. He also suggested that LIST sponsorship group could do a better job performing customer service than Achieve itself.
These things could not have been music to the ears of Johnson.
On this President’s Day it is unclear if the SEC is investigating Achieve. The agency last month declined to comment on Blackburn’s video. Achieve is reported to be under investigation by state authorities in Colorado and Michigan.
Blackburn’s now-missing SEC challenge was titled, “Network Marketing & MLM Programs Are Getting Better!!!” It returns the message shown below.
Also missing is a video posted in mid-December in which Blackburn appeared to apologize to Achieve Community members for not being supportive enough of Johnson and Achieve “admins” on a Facebook site who were clashing with or deleting individuals who raised concerns about Achieve. It was titled, “Rodney Apology Achieve Community.”
All of these Achieve-themed videos by Blackburn appear to have been removed.
Achieve Community Update 1 10 2015 By The LIST Marketing Team
Network Marketing & MLM Programs Are Getting Better!!!
Achieve Community Update 1/ 4 /2015
LIST – Achieve Community Update and More!!!
Rodney Apology Achieve Community
Achieve Community Update 12-5-14 2014
Achieve Community Update 12-2-14 Part 2
Achieve Community Update 12-2-2014 Relaunch is Here! No be patient…
Achieve Community Update 12 1 14 2014
Achieve Community Update 11 21 2014
Achieve Community Relaunch is Coming
Achieve Update 11-12-2014
Achieve Community – Believe…
Achieve Community Are You Ready?
Achieve Community Update 10 22 2014
Achieve Community What’s Possible? Paid out $138,000 this week!
Achieve Community Update- $102,000 Paid Out This Week!!!
Achieve Community~ Chuck made Money! $8,000!!!
Achieve Community Come Experience Achieve
Achieve Community- How to Repurchase Positions and Why…
The Achieve Community- How Does It Work?
Meanwhile, there have been deletions of certain LIST content and content from other “programs” pushed by Blackburn, including Unison Wealth. Blackburn pitches for Ponzi-board programs such as “Rockfeller,” “Automatic Mobile Cash,” “Bring The Bacon Home” and “Trinity Lines” remain.
NOTE: This subscription post originally was published at 11:34 p.m. ET U.S.A. on Feb. 7.
As was the case with our 2,500th-post commemoration in November, there are four subscription options. In the spirit of that post and the 6th anniversary post last month, I’m returning to the “penny a post” theme. 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. There’s a pull-down menu in case you decide you’d like personally to value the editorial well at 2 cents a post ($50), 3 cents a post ($75) or 4 cents a post ($100).
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 noted in November, 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.
This 2014 promo for “Achieve Community” asked members to purchase “one EXTRA position” on Christmas Day.
UPDATED 4:36 A.M. ET FEB. 16 U.S.A. “Achieve Community” members this evening are circulating on Facebook a screen shot from a forum post attributed to Michigan-based co-founder Troy Barnes that claims “Achieve’s assets have been frozen.”
Members say the post appeared earlier today in Achieve’s recently installed private forum.
“I am facing criminal charges,” the post reads in part. It is dated today (Feb. 14), includes the Achieve logo and is headlined, “Weekend Update.”
The post did not identify the agency that purportedly launched a criminal investigation into Barnes. Nor did it say how long Barnes had been under investigation, when he found out about it and what person or agency informed him he was facing criminal charges.
Nor did the post identify the agency that requested the freeze and the judge who imposed it.
Whether an action by a specific law-enforcement agency led to the asserted freeze also was not addressed in the post. The post claims “Kristi has fled from USA” after she “had been talking to the Attorney general in Colorado for many weeks.”
The post did not substantiate the claim “Kristi” had fled. Nor did it substantiate the claim “Kristi” had been talking to Colorado’s Attorney General for weeks or say why they’d been talking. It is unclear if Achieve still was gathering money while these purported talks occurred. Achieve appears to have been trying to create and implement a new payment conduit as recently as Friday.
Kristi Johnson of the Denver region is Achieve’s other co-founder, according to Achieve’s websites at ReadyToAchieve.com and TheAchieveCommunity.com. The sites remains online. For at least two days, this message has appeared when the “Join Now!” button is accessed through the “Sign Up” page: “We are temporarily under maintenance – sorry for the inconvenience.”
The office of Colorado Attorney General Cynthia Coffman did not immediately return a call from the PP Blog Saturday night requesting comment. The Blog confirmed in January that Achieve was under investigation by the Colorado Division of Securities, which is not part of the Attorney General’s office.
The two Colorado agencies, however, have a history of working together on cases involving allegations of securities fraud. From time to time, such cases have led to criminal charges of theft and racketeering.
Andrea Bitely, the communications director and press secretary for Michigan Attorney General Bill Schuette, said yesterday that the Attorney General’s office does not comment on investigations. BehindMLM.com reported yesterday that Achieve was under investigation by Schuette’s Consumer Protection Division.
In 2013, a now-former Michigan state Legislator pleaded no contest to criminal charge of Neglect of Duty by a Public Official. Schuette’s office said the onetime lawmaker carried a cell phone provided by a scammer running a $9 million Ponzi scheme and “answered calls from potential investors even while on the House floor.”
At least one Achieve member has claimed on Facebook that Johnson has not fled and that Barnes is telling vicious lies, according to a post on the RealScam.com antiscam forum.
A Twitter account linked to Johnson disappeared today. So did at least one Facebook site.
EDITOR’S NOTE: This is one to think about if you’re an “Achieve Community” fan who’s moved over to the “Rockfeller” Ponzi-board scam while asserting its professional-looking website puts you at ease — even though you don’t know who’s running the purported company and apparently have formed the irrational belief that engaging a “chat” attendant through the website somehow means you’ve conducted due diligence.
You’re about to read a tale about a man, his attractive websites and the artifices he allegedly employed to make sure he had a ready supply of cash at his disposal during his long con. The take home: Eye-pleasing websites and stories of fantastic success routinely are used to conduct and fuel securities fraud.
**______________________**
UPDATED 6:51 P.M. ET U.S.A. Moazzam Ifzal Malik, also known as Mark Malik, has been indicted, arrested and jailed in New York “on $1 million bond over $1 million cash bail,” state Attorney General Eric T. Schneiderman announced yesterday.
Separately, the SEC announced civil charges against Malik, whom Schneiderman described as a Pakistani who’d defrauded investors in New York, Florida, Texas, Canada and Switzerland after setting up a constantly evolving flim-flam operation.
Malik, the SEC charged, solicited investors with promises of consistently high returns. In the end, though, investors were left holding the bag.
“By pretending to be a successful hedge fund manager, Malik conned investors into bankrolling his lavish lifestyle,” said Andrew M. Calamari, director of the SEC’s New York Regional Office.
For a while, according to investigators, Malik was able to outsmart his investors, in part by creating “opportunity” after “opportunity” to keep the scam going. He even outsmarted financial journalists. But it eventually all came crashing down as redemptions stalled or disappeared and investors grew more skeptical.
The five-year wave of fraud ended yesterday, authorities said, alleging that Malik still was trying to pick pockets as recently as January of this year.
Precisely when Malik, 33, came to America and began his alleged long con is unclear. The SEC said he attended high school in Pakistan and later “became registered with FINRA as a stock broker trainee at a New York-based investment advisory firm from where he was terminated in November 2009.”
Since 2009, the attorney general said, Malik was associated with entities identified as Wall Street Creative Partners L.P., Seven Sages Capital, L.P., American Bridge Investments L.P., and, most recently, Wolf Hedge LLC.
His business? “Purported” hedge funds that “promised his victims a partnership interest,” Schneiderman said.
It’s pretty clear that both the attorney general and the SEC want to use the cases against Malik to create a teachable moment. Schneiderman pointedly published a link to one of Malik’s webpages. The SEC published links to two Malik sites. (See one. See two.)
It is from these attractive sites and corresponding links to social media such as Twitter that Malik created a myth around himself and engineered his alleged scheme to defraud.
The SEC’s complaint is a real keeper for persons able to experience a teachable moment. It relates a tale of the impossible fictions Malik used to fleece his marks. If more money were involved — indeed, as this point we’re talking “only” about an $840,774 swindle — Hollywood perhaps would come calling.
There are so many interesting allegations it’s hard to know where to begin. Let’s start with the allegation Malik used the web to deceive, something many scams (including the Ponzi-board program “Rockfeller” and “Achieve Community”) have in common.
“In addition to communicating with investors using his own name, Malik created a fictitious identity named ‘Amanda Ebert’ to communicate with several investors. Malik sent emails from Amanda Ebert to several investors, with each email including a photograph of Ms. Ebert,” the SEC charged.
“The emails identified Ms. Ebert as ‘Investor Relations, Wolf Hedge LLC’ and attached customer account statements, which contained inflated valuations,” the agency said. “However, there was never any such person named Amanda Ebert associated with [American Bridge Investment Group], Wolf Hedge, or Malik.”
Malik simply plucked a photo of a woman off the web and worked it into his scam, the SEC alleged.
And what of redemption delays? Although Malik was not running a Ponzi-board swindle, his purported hedge fund sure acted like one. The SEC identified one of his victims as “Investor A.” After this investor repeatedly asked Malik for a redemption, the delay in granting one initially was blamed on a busy travel and work schedule.
“Okay working literally 24.7 just came back from Vermont (client meetings),” Malik allegedly advised the investor in an email. “I will call you on Monday and solve the issue. I promise.”
That call allegedly never came. Another month passed. Here’s what happened next, according to the complaint (italics added):
“Investor A did not hear from Malik again until September 2013 when a purported Malik employee named ‘Courtney,’ another fictitious identity used by Malik, emailed the investor as follows: ‘Mr. Malik has been [sic] passed away with the heart attack after accident. We will dissolve the fund shortly.’”
How about name-dropping of the sort that regularly occurs among hucksters pushing HYIP “programs?”
Well, Malik allegedly did that, too — perhaps with particularly notable success. You see, the SEC alleged that Malik duped Bloomberg and BarclayHedge into giving him positive press, and then used the inaccurate coverage he created to dupe his marks.
“In 2012, Barclay Hedge awarded American Bridge Investments L.P. the ‘yearly performance award’ and ranked the fund as the year’s top performing equity long-short fund with over $100 million in assets,” Schneiderman’s office alleged.
In its complaint, the SEC alleged that American Bridge’s trading account “never held more than $90,177 in assets.”
It gets worse. During the same year American Bridge and its Seven Sages spinoff were winning awards as purported rising stars, “Seven Sages’ brokerage account held only $269.52,” the SEC said.
How did Malik pull it off? By creating false financials and presenting them to reporters, the SEC charged.
From the SEC complaint (italics added/light editing performed):
Malik submitted to BarclayHedge a purported financial statement and auditor’s report of Seven Sages, dated December 31, 2012, which listed Berkowitz & Associates, a purported accounting firm with an Iselin, New Jersey address. The report claimed that Berkowitz & Associates had audited the Seven Sages’ financial statement.
This information was false. There is no accounting firm named Berkowitz & Associates in Iselin, New Jersey, and no auditor ever served as ABIG’s or Seven Sages’ auditor.
In the purported financial statement sent to Barclay Hedge, as of December 31, 2012, Seven Sages reported funds under management of$100.26 million. In fact, at that time Seven Sages’ brokerage account held only $269.52.
Malik eventually used another trick from the scammer’s playbook: The SEC alleged he married his namedropping to a purported IPO. Among the names dropped in the never-to-materialize IPO were the New York Stock Exchange, KPMG, Credit Suisse, JP Morgan, Barclays, Guggenheim and Merrill Lynch.
What to do when skeptical investors start turning up the heat? Here, Malik again engaged in the sort of conduct seen in HYIP scheme after HYIP scheme on the Ponzi boards.
This, friends, is stuff made for Hollywood:
“[O]n February 22, 2014, after Investor C had repeatedly asked Malik to redeem his investment (and Malik refused), Malik sent the investor a threatening email,” the SEC alleged. “The email contained a video of a werewolf movie with Malik’s comment ‘that’s what I think I am.’ Malik sent this email as a threat, indicating that Malik was as dangerous and threatening as a werewolf, and the email was intended to deter Investor C from efforts to redeem or to contact the authorities.”
As is the case in many Ponzi-board scams, the threats allegedly didn’t end there.
“Malik sent Investor D, who had repeatedly requested a redemption (which Malik refused), irate and profane emails apparently because Malik believed that the investor had contacted the [SEC] staff,” the agency alleged.
As Malik allegedly dialed up his egregious conduct, he did something else commonly seen in the HYIP sphere: tried to rip off one or more of his victims for a second time.
After his menacing conduct to Investor C, the SEC said, “Malik solicited Investor C to invest an additional $100,000.”
This solicitation came in January 2015, about 11 months after Malik threatened Investor C with the werewolf imagery, according to the complaint.
Along the way, the SEC charged, Malik sent emails that repeatedly used exclamation marks.
It’s something that happens every hour in HYIP Ponzi Land.
This, the SEC said, was one of the Malik emails: “Increase everyone! We are going to go in the biggest trade with full hedge and stop loss. You may redeem next month if you wish. INCREASE!!!”
A false screen shot that showed a a fund value of $56 million was part of the scam, the SEC alleged.
So was the use of “uncompensated individuals to conduct marketing and perform other work for him,” the SEC said.
And when things started caving in, Malik “sent emails to investors accusing them of trying to ruin him by communicating with the Commission staff, while simultaneously soliciting them to invest additional funds.”
At one point, though, he finally remained silent, according to the complaint.
“Malik asserted his Fifth Amendment privilege against self-incrimination in response to the Commission’s staffs subpoenas compelling him to testify and produce documents,” the SEC said.
BULLETIN: (9th update 9:57 p.m. ET U.S.A.) Zeek Rewards receiver Kenneth D. Bell has sued alleged “winners” with residencies in New Zealand and the British Virgin Islands.
One BVI winner is alleged to have gained more than $2 million from Zeek’s combined Ponzi- and pyramid scheme. Bell identified her as Agnita Solomon of Road Town, Tortola.
Susan Forbes, of Tortola, the largest island, is alleged by Bell to have won more than $603,000. No specific town is listed for her.
Hamish Brownie appears to be Zeek’s largest alleged winner in New Zealand. Bell listed a sum of more than $507,000 for Brownie, who resides in Christchurch.
Road Town, the capital of the BVI, possibly was a Zeek stronghold. Of the five BVI residents sued, three listed Road Town addresses, according to Bell’s lawsuit. Besides Solomon, the other two were identified by Bell as Marcus Drigo and Patrice Harewood.
Drigo allegedly won more than $70,000; Harewood allegedly received nearly $60,000.
Marguerite D. Hodge, another BVI resident, was alleged to have won more than $115,000. No specific city or island was listed for her.
The other alleged New Zealand winners sued by Bell were identified as Praveen Kumar of Auckland and David Ian MacGregor Fraser, also of Auckland. Kumar is alleged to have won more than $115,000; MacGregor Fraser received more than $89,000, Bell alleged.
The lawsuits against the BVI and New Zealand defendants are filed in U.S. District Court for the Western District of North Carolina. The actions mark at least the third time Bell has sued international alleged winners.
Bell previously sued winners with addresses in Canada and Australia. He has sued about 9,400 individuals or entities with U.S. addresses, most of them via a class action.
The actions against U.S. domestic alleged winners and their international Zeek colleagues likely represent the largest undertaking by a receiver in an HYIP case in U.S. history.
Cross-border MLM HYIP schemes operating over the Internet have emerged as a considerable problem. Zeek may have involved on the order of 800,000 participants, the vast majority of them alleged losers of a combined sum in the hundreds of millions of dollars.
Court filings in the TelexFree bankruptcy case alleged that $1.8 billion was driven to that cross-border scheme, which potentially involved more than 1 million participants globally.
The SEC shut down Zeek in August 2012, with three key figures later charged criminally. TelexFree declared bankruptcy on a Sunday night in April 2014, just as regulators were preparing to file actions.
Two TelexFree figures later were charged criminally. There also are TelexFree-related civil and criminal investigations in Brazil, perhaps TelexFree’s main stronghold. The U.S. Department of Homeland Security and the FBI are involved in the TelexFree probe.
In the actions against the BVI and New Zealand alleged Zeek winners, Bell said this: “Because Zeek’s net winners ‘won’ (the victims’) money in an unlawful combined Ponzi and pyramid scheme, the net winners are not permitted to keep their winnings and must return the fraudulently transferred winnings back to the Receiver for distribution to Zeek’s victims.”
3RD UPDATE 4:02 P.M. ET U.S.A. The “Achieve Community,” an 800-percent ROI Ponzi-board “program” apparently hamstrung by problems with payment processors, now is serving up a spectacle in which confusion and delay are the only consistent themes.
BehindMLM.com reported late last night (or early today, depending on your time zone) that the office of Michigan Attorney General Bill Schuette had confirmed an “open investigation” into Achieve involving the Attorney General’s Consumer Protection Division.
The PP Blog this morning sought comment from Schuette’s office.
“We don’t comment on investigations,” said Andrea Bitely, the Attorney General’s communications director and press secretary.
The response appears to confirm the report on BehindMLM.com that Achieve is under investigation in Michigan.
Because the Colorado Division of Securities has confirmed a probe into Achieve, the PP Blog sought comment yesterday from Michigan’s Corporations, Securities & Commercial Licensing bureau on whether Achieve was under investigation in that state. The bureau referred the Blog to the communications division of its parent agency, the Michigan Department of Licensing and Regulatory Affairs (LARA).
A LARA spokeswoman said only that the bureau neither confirms nor denies investigations.
But if the bureau is working with the Attorney General’s office, it would mean that Achieve might have two types of trouble in Michigan: consumer fraud and securities fraud — and at the same time it faces the Colorado investigation.
Given information on two websites linked to Achieve, the “program” appears to operate through a Delaware corporation known as Work With Troy Barnes Inc. Barnes is a Michigan resident, and the two websites linked to Achieve list a Riverview, Mich., address for the “program.” Although Work With Troy Barnes Inc. appears in Delaware records as a company domiciled in that state, there appears to be no corresponding registration as a foreign corporation in Michigan.
Precisely how Achieve is operating through Work With Troy Barnes is unclear. The two Achieve websites — ReadyToAchieve.com and The Achieve Community.com — have Korean lettering near the bottom. IP addresses for the web properties resolve to Iceland.
Any number of Achieve members have shown blind faith in Achieve. Some “defenders” of the “program” have spoken of faith in God and Jesus Christ. Achieve, though, appears repeatedly to have encountered struggles with payment processors after reportedly losing its ability to do business through Payoneer in late October or early November.
And this brings us to today . . .
Instructional Video Goes Missing
Barnes — along with Kristi Johnson of the Denver area — are the purported operators of Achieve.
At some point yesterday (Feb. 12), a Barnes-narrated video appeared on YouTube. The 11:06 video was titled “Thursday Update 2 12.” The video provided Achieve members instructions on how to register for a purported new payment processor.
This video now mysteriously has gone missing, amid concerns expressed by some Achievers that even registering for the processor might open the door to identity theft. What’s more, the identity of the processor itself, how it is operating and where it is operating from are murky.
The now-missing Troy Barnes’ video for Achieve showed fields soliciting notarized passport and driver’s license photo identification and other sensitive information, raising the specter of identity theft.
The narration by Barnes was disjointed, at once advising members they had to submit all information requested in the information fields but backtracking to insist certain information was optional.
In the video, fields requesting standard identification such as name and address were shown. But there also was a field that requested the submission of notarized color copies of a passport or driver’s license with a signature, “OR an un-notarized copy of one of the previous AND a copy front and back of a valid credit card OR another type of government issued picture identification which shows a signature and birth date.”
There also were fields that solicited information on income and a letter from the employer of an Achieve member addressed “To Whom it May Concern” to verify employment.
With respect to the field soliciting an employment-verification letter, Barnes said this: “Don’t even worry about this. You don’t need it, all right. This is going to disappear off of here. For now, it’s there. Don’t worry about it.”
Despite those words, Barnes also said, “Remember: When you submit, everything’s gotta be filled out. Everything.”
He also said, “If you have a PO Box and you’re in the United States, so, you’re [going to] need to go to the bank. Take your driver’s license. Any bank will do this. Tell them you [want to] get your driver’s license notarized. They’ll take it and make a copy of your driver’s license. I understand your mail may go to a PO Box, but your address should have your driver’s license on it [sic]. And that’s it. Just upload it here, and you’re all set.”
About a field soliciting address verification, Barnes said this: Address verification is “very important. A utility bill. Anything that has your address on it that you’re billed for. You need to upload that here.”
Barnes described a field soliciting information on estimated annual total deposits in this fashion: “You know: What do you think you’re gonna make [through Achieve?] Put whatever you want. It doesn’t matter. You know, for me, I put a hundred thousand. So, put whatever.”
At a minimum, the video suggested Achievers who successfully submitted information would receive some sort of debit card to offload profits — perhaps in a couple of weeks. Achieve appears not have have made a payout for more than three months while at once engaging in payment-processor roulette.
The FBI has warned for years that certain types of debit cards and shell companies can be used for the purposes of money-laundering, handing economic strength to criminals or worse.
Some Achievers have joined other Ponzi-board schemes and published YouTube promos for the schemes.
2ND UPDATE 9:18 A.M. ET FEB. 13 U.S.A. On Oct. 16, 2014, Google was served a search warrant in the TelexFree criminal case against accused operators James Merrill and Carlos Wanzeler, according to joint court filings by federal prosecutors in the office of U.S. Attorney Carmen M. Ortiz of the District of Massachusetts and Robert M. Goldstein, a defense attorney for Merrill.
Merrill and Wanzeler are charged with wire fraud and wire-fraud conspiracy. U.S. prosecutors have called Wanzeler a fugitive now likely living in Brazil. With discovery involving incredible amounts of data and an avalanche of documents under way that both sides must sift though, no trial date has been set.
The search warrant sought “a substantial amount of video content held by [Google’s] subsidiary, YouTube,” according to the joint interim status report by prosecutors and Goldstein docketed on Dec. 17. The lawyers noted that “Google reports that compliance will take several more weeks.”
Precisely why the government sought the material is unclear, but promoters of MLM or network-marketing HYIP schemes frequently pitch their offerings on YouTube. Filings last week by Stephen B. Darr, the court-appointed trustee in the TelexFree bankruptcy case, assert that TelexFree had gathered as much as $1.8 billion in about two years and that the cross-border “program” may have involved 1 million or more people.
Darr flat out called TelexFree a pyramid scheme.
In another joint interim report docketed Monday, prosecutors said they recently received 45GB of material from Google under the search warrant. The corresponding number of hours of video contained within the production wasn’t specified.
Prosecutors also said in the report that they’d received an unspecified amount of data from Hotmail and Apple that had been sought in a search warrant.
This data involved email accounts, prosecutors said in the interim report. The names of the account-holders and the content of the emails were not revealed in the report.
HYIP schemes often get pitched in emails from promoters. The government did not say why it had sought the material.
Prosecutors did note that “[p]roduction of this material has been delayed by errors in the data as produced by the email providers.”
Darr, the trustee, has turned over 75GB of data, according to the Feb. 9 report.
Getting to the heart of an HYIP scheme that operated over the Internet is an exceptionally time-consuming task. Delays are almost inevitable and even can be caused by external events that affect resources. In the Feb. 9 filing, prosecutors noted that “paralegals and litigation technical support staff” in Ortiz’s office also are participating in the prosecution of the Boston Marathon bombing case, a mammoth undertaking.
Absences or delays, however, are not unique to the prosecution side of the argument. A TelexFree defense attorney who has to sift through discovery material is involved in a trial in another state and could not attend a status conference that had been scheduled for today, according to the joint interim report.
U.S. Magistrate Judge David H. Hennessy canceled today’s conference, setting April 13 as the next date the parties would meet. In his own report, Hennessy noted that discovery was proceeding in the case despite the enormous volume of material.
And that volume only will grow, he wrote, pointing to a TelexFree criminal investigation in Brazil and assertions by U.S. prosecutors that they expect to receive “a large amount of material, both hardcopy and electronic, from the Brazilian government” in March.
News of the conference delay was received on the same day publications in Brazil reported that an accounting firm (Ernst & Young) in that country had reported to the judiciary in Acre state that TelexFree (as Ympactus) had the characteristic of a pyramid scheme.
TelexFree is the subject of both state and federal probes in Brazil.
The Feb. 9 joint interim report in the United States notes that “the government anticipates receiving [data] in response to a search warrant submitted to the Court this week.”
What was targeted in that search warrant was not revealed. Nor was the identity of the person or entity served with the warrant.
The interim report also notes that the U.S. government is in possession of “[v]arious recordings made by undercover [Homeland Security Investigations] agents at TelexFree conference and in conversations with a TelexFree promoter.”
Brazil-based TelexFree figure Carlos Costa appears to be the subject of a veiled reference in the Feb. 9 report, which describes an unnamed person in Brazil as “the third owner of TelexFree.”
Authorities in Brazil have served “about nine” TelexFree-related search warrants in that country and have seized on the order of $450 million, according to the Feb. 9 report.
Bob Simon. Source: CBS News Special Report on Feb. 11, 2015.
American journalism has lost a legend. Bob Simon, the veteran CBS News correspondent, was killed early last evening when the cab in which he was riding was involved in a horrific crash on West Side Avenue, the New York Daily News reported.
Simon was 73. CBS broke into programming to report the news. Tributes poured in. So did expressions of the irony of it all. Simon, who was captured and held for 40 days by the Iraqi army during the Persian Gulf War in 1991, did much of his best work as a correspondent reporting on war or turmoil from the world’s hot spots.
He also was a correspondent for “60 Minutes,” recently (Feb. 8) airing an interview with Ava DuVernay, director of the movie “Selma,” a story about Dr. Martin Luther King Jr. and the pursuit of freedom within America’s borders.
“The Ku Klux Klan” once reigned in the “backwoods around Selma,” Simon said in introducing the segment, and people in the area “have long memories of painful times past.”
