PatrickPretty.com

Category: Writing And Branding

  • Foreign Office Asks U.K. Travelers To Be ‘Vigilant’ In Wake Of Ongoing Military Campaign Against ISIS; North Carolina Man Pleads Guilty To ‘Attempting To Aid’ Terrorist Organization Linked To Beheadings

    Citing a generalized global terrorism threat, the United Kingdom’s Foreign Office says it is updating its travel advice and has asked U.K. travelers to be “vigilant.”

    From the Foreign Office (italics added):

    “There is considered to be a heightened threat of terrorist attack globally against UK interests and British nationals from groups or individuals motivated by the conflict in Iraq and Syria. You should be vigilant at this time.”

    Put another way, if you are a Brit, ISIS or ISIS sympathizers may attack you on that basis alone.

    The United Kingdom, like the United States, Canada and Australia, is a member of the military coalition arrayed against ISIS. Australian authorities have said ISIS or its sympathizers planned random attacks against members of the Australian public to demonstrate the reach of the terrorist group.

    ISIS, also known as ISIL or the Islamic State, has beheaded Brits and Americans and appears to be inciting people from multiple nations to join ISIS campaigns in Iraq and Syria. ISIS also appears to be inciting nationals from multiple countries to make war against their own governments or own fellow citizens to broaden the terror.

    On Oct. 30, federal prosecutors in North Carolina announced that Donald Ray Morgan, a 44-year-old local man from Rowan County, pleaded guilty to attempting to provide material support to a designated foreign terrorist organization and possession of a firearm by a felon.

    “Today’s plea is a sad reminder that those who wish to aid foreign terrorist organizations can come from any community and from any background,” said Ripley Rand, U.S. Attorney for the Middle District of North Carolina.

    From a statement on the Morgan case by federal prosecutors (italics added):

    According to court documents, Morgan knowingly attempted to provide support and resources beginning in January 2014 until on or about Aug. 2, 2014, including his own services, to al-Qa’ida in Iraq, also known as Islamic State of Iraq and the Levant (ISIL) and the Islamic State of Iraq and al-Sham (ISIS), a designated foreign terrorist organization. On at least one occasion Morgan unsuccessfully attempted to travel from Lebanon to Syria to join ISIL/ISIS. Morgan also frequently used social media and an interview with an American journalist to express his support for ISIL/ISIS and violent terrorist activities.

    A look at the agencies that participated in the Morgan probe shows that terrorism-related activities have become not only a concern for national agencies such as the U.S. Department of Justice and the FBI, but also local agencies. Indeed, the names of the Greensboro Police Department, the Guilford County Sheriff’s Office, the High Point Police Department and the Winston-Salem Police Department all appear in the Justice Department’s statement on the Morgan case. The local agencies are are members of Joint Terrorism Task Forces.

    “We will continue to do everything we can to work effectively with our law enforcement partners and protect innocent people from terrorist activity, whether here in the United States or abroad,” Rand said.

    “Preventing individuals from joining ISIL and holding accountable those who attempt to provide material support to the terrorist organization remains one of our highest priorities,” said John Carlin, assistant Attorney General for National Security.

    In the United Kingdom, MailOnline, citing extracts from a U.N. study, is reporting concerns that “a new breed of terrorist was being attracted by the [ISIS] ‘cosmopolitan’ use of social media.”

    The report suggests that terrorists could making war or inciting it in one moment — and posting “kitten photographs” on Twitter in the next.

    In recent days, individuals have carried out alarming attacks against Canadian soldiers, the Canadian Parliament, New York City police officers and a police officer in Washington, D.C. The precise motives for the attacks and the degree to which mental-heath issues may have played a role are less than clear, which makes the overall circumstance murkier.

    Weaponry has ranged from guns (Canada) to a hatchet (New York) to an ax (Washington).

  • SEC Official Speaks On TelexFree Case At ‘Fraud Affects Every Community’ Event At FTC, Announces ‘Pyramid-Scheme Task Force’ And Tells Audience That ‘Program’ Consumed Entire $50,000 Retirement Account Of Trusting Mom

    “We know of at least one victim who borrowed, I think, $50,000 from his mother and gave it all to [TelexFree]. And it was her entire retirement.” — Melissa Armstrong, assistant chief litigation counsel, U.S. Securities and Exchange Commission, Oct. 29, 2014

    Melissa Armstrong of the SEC at an FTC event today. Source: FTC video.
    Melissa Armstrong of the SEC at an FTC event today. Source: FTC video.

    UPDATED 12:19 P.M. EDT OCT. 30 U.S.A. Affinity fraud was one of the topics at an all-day symposium today at the Federal Trade Commission (FTC). The event was titled, “Fraud Affects Every Community.”

    Melissa Armstrong, assistant chief litigation counsel for the U.S. Securities and Exchange Commission (SEC), was one of the featured speakers. Her topic was the SEC’s pyramid- and Ponzi case against TelexFree and how TelexFree was a form of affinity fraud.

    In her view, Armstrong said, some TelexFree promoters exploited members of the Dominican and Brazilian communities.

    And, she told the audience, the scheme spread over YouTube, Facebook, Twitter, Instagram and though local pitchfests.

    “They sold a version of the American dream that was [meant] to appeal to recent immigrants,” she said.

    Over time, Armstrong said, TelexFree gathered “hundreds of millions of dollars from hundreds of thousands of promoters. It had promised to pay them back to the tune of [about] $5 billion.”

    “The message was always consistent: You could go from having nothing to having it all in a very short time with this program,” she said. “The organizers would travel from city to city.”

    Organizers “were given the rock-star treatment,” she said. Recruiters provided “testimonials.”

    And, she said, “training centers were nothing more than recruitment centers.”

    “Ministers” of church congregations helped the scam spread, Armstrong said.

    Armstrong also touched on TelexFree’s April 2014 bankruptcy filing. And, without mentioning TelexFree co-owner Carlos Wanzeler by name, she said he “fled to Brazil” and now faces criminal charges in the United States.

    Former TelexFree President James Merrill also faces criminal charges.

    The SEC now has a “newly established pyramid-scheme task force,” Armstrong said.

    Armstrong’s remarks begin at about the 4:22 mark below.

    More information on the “Fraud Affects Every Community” FTC symposium, including the roster of speakers and topics, is available here.

    Topics:

    • Welcome/Introduction
    • A Look at the Marketplace for Different Communities
    • How and Why Fraud Affects Different Communities
    • Getting More Specific: Community Case Studies on Fraud
    • Education and Community Outreach: An Open Discussion
    • Fraud Research: Building on Solid Data
    • Wrap Up

  • Nevada Isssues Warning On Wings Network MLM ‘Program’; Says It Is Being Sold ‘Door-To-Door’ And Is Targeting Spanish And Portuguese

    wingsnetworkAs the PP Blog reported on May 15, Massachusetts Commonwealth Secretary William Galvin sued the Wings Network MLM “program” and some of its promoters, alleging securities violations and a “thinly veiled pyramid scheme” targeting minority communities.

    Now, Nevada Secretary of State Ross Miller has published a warning on Wings Network, saying the online “program” even is being sold “door-to-door” and is targeting Spanish and Portuguese prospects.

    Miller is encouraging residents of Nevada who have information on Wings Network to contact his Securities Division here or by calling 702-486-2440.

    “It is vital that every investor conduct the most thorough due diligence possible when making an investment,” Miller said in a statement. “Investing is a complicated and risky process. Even the initial receipt of interest payments or distributions paid to some investors, or an investment sold by someone you know, doesn’t guarantee that an investment is legitimate. A Ponzi scheme may have similar attributes. Potential investors just can’t be careful enough. And always remember that if it sounds too good to be true, it probably is.”

    From an Oct. 23 statement by Miller’s office (italics added):

    Secretary of State Ross Miller warns Nevadans to beware of a possibly fraudulent investment scheme targeting minority communities, specifically Spanish and Portuguese. Wings Network is a multi-level marketing program that is advertising online, and being sold door-to-door or through friends and relatives.

    Wings Network offers investors various packages ranging from $49 to $1,499. The “Elite” package purportedly requires an investor to purchase the package for $1,499, pay an activation fee of $49, and recruit two additional people to buy the package. The seller then allegedly promises that the investor is guaranteed to receive a minimum of $750 per month for one year afterward.

    Investors may be told that Wings Network is associated with smartphone applications compatible with Google Play and Apple. Individuals who purchase the “Elite” package gain access to the Wings Network website, which provides them with information related to their purchase. Wings Network is allegedly associated with Tropikgadget FZE located in the United Arab Emirates.

    The Secretary of State’s Securities Division believes Wings Network’s proposed business opportunity is an investment contract and a security that should be, but isn’t, registered with the State of Nevada. Some multi-level marketing programs may be structured in such a way that they constitute a security and should be registered as such. Miller cautions individuals not to buy or sell packages from Wings Network without conducting thorough research and seeking independent legal advice.

    Although the dotcom landing page for WingsNetwork appears not to be loading properly at least in the United States, other pages on the site continue to be accessible from the United States. The PP Blog today observed the flags of the United States, Spain, Portugal, Italy, France, Germany and Russia on the site. WingsNetwork subdomains with Wings Network affiliate pitches that point prospects to YouTube promos and lead-capture pages also were observed.

    In addition, the Blog observed a specific domain named a respondent in the Massachusetts action — WingsNetworkGlobal.com — that appears to have been repurposed by a onetime Wings Network affiliate to drive traffic to a video pitch for something called “The Millionaire’s Brain.”

    “Listen,” a male narrator intones. “You’re skeptical. You’ve heard big claims before and they didn’t pan out. I get it.”

    Opportunity-hopping is a frequent occurrence in MLM or direct-sales programs. Some affiliates of such programs proceed from fraud scheme to fraud scheme to fraud scheme.

    Research suggests that the WingsNetworkGlobal domain previously was used to promote alleged scams such as TelexFree and WCM777, both of which were sued by the SEC and became the subjects of regulatory actions by the Massachusetts Securities Division.

     

  • REPORTS: Chinese Man Arrested In Thailand Faces Charges He Swindled $277 Million In Cross-Border Pyramid Scheme

    Reports in Thai media say Song Migui, a Chinese man and purported philanthropist, was arrested in Bangkok and will be transported to Phuket to answer charges he and others swindled 9 billion baht and allegedly operated a cross-border fraud empire.

    The sum is the equivalent of about $277 million.

    PhuketWan, which says its is a tourism publication, reports that Migui also is known as Zhang Jian and declared himself “the future richest man” prior to his arrest.

    Migui attracted attention earlier this year with an asserted gift of 30 million baht ($924,000) to a Buddhist temple, PhuketWan reports.

    From PhuketWan (italics added):

    At the time of the massive donation, Song Migui said that he was the proud and prosperous owner of an IT software company. Police nabbed him in Bangkok after the Anti-Money Laundering Office became involved in examining his unusual wealth. Song Migui was on a blacklist in China, investigators discovered.

    Elsewhere, NationMultimedia.com is reporting that Thai police are seeking to identify victims of the scheme.

     

  • Tweets Claim SEC Inquiring About ‘Hundreds’ Of Bitcoin-Themed Companies

    4th UPDATE 8:09 A.M. EDT OCT. 30 U.S.A. In the past several hours, Tweets sourced to Bitcoin-themed publications such as CoinFire, CryptoCoinsNews and CoinTelegrah claim the SEC has opened preliminary inquiries into hundreds of Bitcoin-themed enterprises.

    On the CoinTelegraph website, the publication asserts there is a “gag order attached to these requests for voluntary cooperation.”

    For starters, there appears to be no independent corroboration from the SEC of the inquiries. None may be forthcoming, given that early inquiries — if they exist — are not public by design. Moreover, references to a “gag order” may be a misinterpretation of a phrase the SEC uses when opening preliminary inquiries. Using boilerplate language, the SEC typically informs the subjects of the inquiries that “This investigation is confidential and non-public.”

    The language is designed to protect both the recipient’s interests and the SEC’s. So, if the claim that a “gag order” has been issued is hung around the boilerplate language concerning the confidential nature of SEC inquiries at this early stage, it very well may mean the “gag order” claim is incorrect.

    Not all inquiries result in an enforcement action that involves a U.S. federal court or an SEC administrative law judge. Some do, however. Here, via the Chicago Sun Times, is an example of a nonBitcoin enterprise that received an SEC boilerplate letter in September 2013 and later became the subject of a full-blown  investigation that led to an enforcement action in June 2014.

    On the whole, though, we’d say the odds the SEC wants to look down certain Bitcoin-themed rabbit holes are very high — notwithstanding the fact that the PP Blog cannot confirm the Twitter claims about the inquiries.

    It is obvious that Bitcoin-themed HYIPs are operating. Another area of obvious concern: Are Bitcoin-themed enterprises running crowdfunding scams?

    One thing to look for as this situation evolves is crackpot “defenses” of everything Bitcoin. In response to the Tweets and coverage on Bitcoin-themed publications of the asserted SEC inquiries, some such defenses already have surfaced. One poster on CryptoCoinsNews, for example, appears to be advancing a conspiracy theory that the SEC is trying to dupe recipients of the asserted inquiry letters into confessing jurisdiction.

    In the Comments thread, the poster suggests that recipients of the asserted inquiries should respond as such (italics added):

    “I _______ (state your name), present myself in pro pria persona for a special appearance, as to be distinguished from a general appearance and respectfully ask [the court to direct the prosecution] to prove for and on the record all elements of jurisdiction binding me to perform in any way whatsoever.”

    The problem with such a response is that it comes off sounding like so much “sovereign citizen” poppycock that it has the potential to subject to additional scrutiny those who’d adopt the guidance. Beyond that, even if the inquiries actually are taking place, no court appears to be involved at this time and it’s already clear that the SEC has jurisdiction over matters pertaining to securities.

    Other “defenses” suggest the SEC is sending out a squad of “goons” to make it hard for companies to do business and that the SEC is interfering in “contracts” between consenting adults.

    For whatever reason, various “defenders” of online “opportunities” have adopted a bizarre narrative that more or less asserts that all commerce is lawful as long as the parties entering a contract agree that it is lawful. Such constructions, however, would legalize murder-for-hire, terrorism plots, extortion, human trafficking, selling narcotics to school children and many other pursuits society rejects.

    Simply put, there are a lot of holes in claims that all commerce is lawful as long as the parties agree that it is lawful. Such constructions would mean that John Q. Bloodthirsty Political Extremist could enter into a contract with Carlos the Jackal to plant a car bomb designed to kill innocents in France — and no government or no person could do anything about it, including maimed survivors who never agreed to be disfigured at the hands of the contracted parties.

    It is no more lawful to operate an HYIP or crowdfunding scam that involves Bitcoin than one that involved Liberty Reserve, alleged to have helped criminals launder $6 billion.

  • Now, A Hatchet Attack On New York City Police Officers

    From CNN video.
    From CNN video.

    Four uniformed New York City police officers were ambushed yesterday afternoon by a murderous man wielding an 18.5-in. hatchet. The sneak attack occurred a day after the sneak attack on Canada’s Parliament in which a duteous sentry standing watch over the Tomb of the Unknown Soldier at the War Memorial in Ottawa was shot and killed.

    In the New York incident, one officer presumptively was brutally cleaved in the head, another in the arm. Both are hospitalized. The two other officers reportedly shot the attacker dead. A bystander exercising the freedom to be out in public reportedly was hit by a stray bullet. All four officers are rookies. They were posing for a picture when attacked, according to reports.

    This, friends, is what anarchy looks like in freeze frame. It can happen in a matter of seconds. The danger is that it can be copy-catted in random locations. At least for now, whether a hardware-store hatchet served as a cheap substitute for the swords of ISIS is just another imponderable.

    As an official matter, terrorism has neither been ruled in nor ruled out in the New York attack. When a man swinging a hatchet like a baseball bat goes after patrol cops on the streets of Queens in broad daylight, however, it’s hard to see it as anything other than an attack on U.S. society itself.

    New York, of course, was a target of grandiose terrorists who caused airliners to crash into the Twin Towers of the World Trade Center on Sept. 11, 2001, destroying both human and brick-and-mortar symbols of freedom and Democracy. The hatchet attack suggests New York City and other cities now may need to be on the lookout for terrorists (officially designated or otherwise) who are less grandiose in choice of weaponry and their instant aims, but equally committed to destroying the symbols of order and the guardians of that order — in this case, four cops on the beat.

    Video of the incident appears to show the attacker could have carved up a civilian on the sidewalk, but darted around him and headed straight for the people wearing badges. But before you get the notion that the hatchet man was interested in giving the pedestrian an even break and didn’t hold him accountable for grievances, remember that the 9/11 attackers also sought to aim planes at the U.S. Capitol or the White House and ultimately struck the Pentagon.

    Despite the fact he thankfully was left physically unharmed, the New York pedestrian nevertheless counts as a casualty: By attacking the cops, the hatchet man was attacking the pedestrian by proxy, just as the American people were attacked by proxy on 9/11 through attacks on the symbols of commerce and freedom itself and the Canadian people were attacked by proxy in this week’s attack against the soldier and Parliament.

    We’re sitting here this morning remembering that Eric Frein, who allegedly ambushed cops at their home barracks in Pennsylvania under cover of darkness last month, is still on the lam.

    Regardless of the varied corrupt ideologies and the tortured psychologies or malignant philosophies of the attackers, all of these attacks are attacks against the keepers of freedom and the people who benefit from that freedom. That some of the attackers chose over-the-counter weapons rather than hijacked airliners matters only in terms of the instant body count and the size of the headline font. The mind-set is the same, even if the official casualty list includes fewer names.

    It’s terrorism at a variety-store discount, the same thing the world observed at the 2013 Boston Marathon. But in New York City yesterday, it was a garden hatchet, not a pressure cooker.

     

  • URGENT >> BULLETIN >> MOVING: Massachusetts Charges 4 Alleged Promoters Of EmGoldEx Scheme, Saying ‘Program’ Was Fraud And That Hucksters Stacked Children In Downlines

    emgoldexURGENT >> BULLETIN >> MOVING: (14th Update 4:33 p.m. EDT U.S.A.) Massachusetts has charged promoters of the EmGoldEx MLM “program” with securities fraud and selling unregistered securities, alleging they “created a complex web entangling investors throughout the Commonwealth” in a “pyramid scheme” that offered “guaranteed returns of up to 1,105% for recruiting more individuals.”

    The civil prosecution was brought by Commonwealth Secretary William Galvin and the Massachusetts Securities Division, which alleged that photos of children “getting paid” by the “program” were used as lures to drive dollars to the scam.

    Children also were used to stack downlines so promoters could “reach the Pay Spot faster,” the state alleged.

    And, the state alleged, “Investors in the EmGoldex Marketing Program are also able to purchase investment positions directly from other investors, rather than through EmGoldex, creating even greater risks for potential new investors.”

    Similar allegations that members could bypass the “program” itself to purchase positions were made in the TelexFree case earlier this year, a circumstance that suggests multilayered criminality in MLM HYIP “programs.”

    Named respondents are EmGoldEx Team USA Inc. of Andover, Mass.; Matthew Michael D’ Agati of Methuen, Mass.; Joseph Zingales of Methuen; James Vincent Piemonte of Methuen; and Jonathan Herman Seigler, formerly of Boston and now of New Hampshire.

    D’ Agati, Zingales, Piemonte and Seigler are accused of recruiting “hundreds of investors into the scheme,” according to the 41 page complaint. MSD is asking for disgorgement and financial sanctions.

    “Using multiple pooled bank accounts, Respondents have collected over $473,000 in Massachusetts for the EmGoldex Marketing Program,” the state alleged, further alleging that “over $282,659 has been wired to EmGoldex financial institutions overseas.”

    The Massachusetts entity was a recruiting arm for EMGX FS Ltd., “an entity purportedly registered in the Seychelles, with a principal place of business located at Suite I, Second Floor, Sound and Vision House Francis Rachel Str. Victoria, Mahe Seychelles[.] EmGoldex maintains an internet website at www.emgoldex.com,” the state alleged.

    Seychelles is a nation associated with money-laundering.

    News that Massachusetts was investigating EmGoldEx broke on Aug. 8.

    Like other HYIP schemes, EmGoldEx was positioned as a “Plan B.”

    “Respondents even use the Team USA Homepage to pitch the EmGoldex Marketing Program as a retirement vehicle, noting that EmGoldex can create a “[p]Ian B to care for you and your family in the later years,” the state alleged. “Respondents further add that membership in the EmGoldex Marketing Program is a fully transferrable asset upon death, providing perpetual residual income for an investor’s family.”

    Facebook and Twitter “at least” were used to drive recruiting, Massachusetts alleged.

    One of the key prongs of the Massachusetts-based pitch was that even “children” could earn through EmGoldEx, the state alleged.

    From the complaint (italics added):

    148. The Team USA Homepage advertises the EmGoldex Marketing Program as a simple and relatively quick way to earn significant residual income.

    149. Respondents also advertise on the Team USA Homepage that through the EmGoldex Marketing Program, even children are able to make significant profits, with little to no effort of their own.

    150. In a section on the Team USA Homepage titled “Local Success Stories,” Respondents feature at least three photos of children, with one caption reading, “Paid $4000 in only 13 weeks! Yes, even your children can get paid!!”

    151. The Team USA Homepage “Local Success Stories” section also includes photos of a number of other EmGoldex investors who are members of Team USA. Each photo is emblazoned on an American flag background, with the title “GOLDEN $4000 CLUB.”

    152. The “successful” investors received their payouts by recruiting new investors into the EmGoldex Marketing Program, not through the sale of any purported product.”

    Like earlier MLM scams such as TelexFree and WCM777, EmGoldEx picked up a local head of steam when the Massachusetts promoters hosted hotel pitchfests, Massachusetts alleged.

    Some local events for EmGoldEx charged admission fees of $10 and $25, and a purported “boot camp” for EmGoldEx held on Saturdays and Sundays charged an admission fee of $79 and $99, the state alleged.

    “According to marketing materials Team USA provided to the Division, Team USA represented EmGoldex as a ‘life changing opportunity’ for new investors. These advertising and marketing materials from Team USA are also adorned with pictures of gold bars, bags of cash and phrases such as ‘NOW YOU GET PAID,’” the state alleged.

    The scheme also took advantage of the popular culture, Massachusetts alleged.

    “For their part, according to documents that Team USA produced to the Division, D’ Agati and Zingales adopted speeches from popular movies, such as ‘Rocky’ and ‘Any Given Sunday.’”

    Moreover, the state alleged, attendees of a launch event were told “the speakers . . . were ‘not bottom feeders,’ and included lawyers, millionaires, and other very successful business people.’”

    Read the complaint.

  • OUTRAGEOUS! Emerging Scheme That Appears To Have TelexFree Ties Is Trading On The Name Of Abraham Lincoln

    8elosUPDATED 12:24 P.M. EDT U.S.A. BehindMLM.com has a story today about an emerging “program” known as “8Elos” that may have ties to TelexFree promoters, including Sann Rodrigues, already charged with fraud in the TelexFree Ponzi- and pyramid case.

    Rodrigues is an alleged recidivist securities- and affinity fraudster who now may be adding a shiny object scheme (emeralds) to his fraud bona fides. The evolving situation is so bizarre it almost defies description. BehindMLM, which reports 8Elos is using addresses in the British Virgin Islands and Switzerland, has published an early review here.

    One of the things that caught the eye of the PP Blog is that 8Elos appears to be trying to loosen American purse strings by trading on the venerated name of Abraham Lincoln through the use of a quote on leadership attributed to the 16th President of the United States.

    The PP Blog could not immediately confirm that Lincoln ever spoke the words attributed to him by 8Elos: “The greatest ability of a leader is to develop extraordinary abilities in ordinary people.”

    By even attributing a quote to Lincoln, however, 8ELos may be trying to sanitize a scam in largely the same way a 2011 MLM scam known as Club Asteria tried to sanitize its scam and bring in large numbers of Indians. Club Asteria leeched off the name of Mahatma Gandhi.

    8Elos may be targeting Brazilians, Brazilian-Americans and Latinos. Based on the flags published on its website, it also may be targeting Chinese, Portuguese, Spaniards and Russians.

    Lincoln was assassinated in 1865; Gandhi was assassinated in 1948.

    Club Asteria put a “JOIN OUR MISSION” button below a quote attributed to Gandhi.  It also placed a “JOIN NOW” button directly below an image of the actor Will Smith — this after months of trading on the names of the American Red Cross and the World Bank.

    8Elos, which implies it has ties to emerald and gemstone deposits in Brazil, curiously describes itself as “the perfect link between everything and everyone, the four elements with the four dimensions, people in search of infinity and its preciousness.”

    Also see PP Blog story from Oct. 2, 2012: “Was This Man Your Zeek Sponsor?”

    Also see this May 29, 2014, Media Alert from the Utah Securities Commission, an arm of the Utah Department of Commerce.

    From the lede (italics/bolding added):

    The Utah Securities Commission issued a Final Order against Jack Phillips, an Oregon resident, for conning Utah investors into several phony investment schemes involving travel cards, foreign currency trading, and importing Brazilian emeralds for sale all while promising guaranteed returns of 300 to 500% with no risk to investors.

  • In 1 Thai Province Alone, 120 Pyramid Schemes May Be Operating, Report Says

    cautionflagIn Lamphun Province in northern Thailand, the Thai government suspects that 120 pyramid schemes may be operating and swindling villagers in and around the district of Li, according to a report at NationMultimedia.com.

    The report suggests this is a specific type of securities swindle in which investors purchase shares in purported construction companies that actually are corporate shells with no real operations. The scammers are left with the money. Investors believing they’re helping themselves and the region drive growth are left with worthless pieces of paper.

    As is typical in pyramid schemes, corporate registrations appear to have been used to dupe investors. The presence of a corporate registration is not proof no scam is occurring.

    As NationMultimedia reports, quoting Director-General Pongpun Gearaviriyapun of the Department of Business Development (italics added):

    “Fraudsters deceive people by allowing them to hold shares in a company and partly own the business by asking for initial investment capital. These frauds tell them that they will benefit from the government’s construction mega-projects, and they do register the new firm with the department, but actually these businesses do nothing.”

    A recent example of an alleged swindle in which corporate registrations were used to dupe investors is the TelexFree case in the United States. Promos for the firm pointed prospects to the registrations, but TelexFree was conducting a billion-dollar, cross-border pyramid- and Ponzi scheme, according to court filings.

    Some of the promos for TelexFree even reproduced images of a government official. Other promos were worded to suggest that the government endorsed the purported opportunity and that recruits were helping drive economic growth to sustain their families and communities.

    TelexFree was promoted in Thailand, according to online promos. One promo was headlined, “Telexfree Thailand Team Number One.”

    In Thailand, the Department of Business Development “is closely inspecting newly registered firms to see if they are really operating,” NationMultimedia reports. “If not, the department will probe these companies in cooperation with local police, chief district officers, and the Department of Special Investigation.”

    Thailand is a nation in the Indochina Peninsula. Neighbors include Myanmar, Laos, Cambodia, Indonesia and Malaysia.

  • TELEXFREE BRIEFS: (1) False Claims That ‘Program’ Has Been Cleared Of U.S. Pyramid-Scheme Charges; (2) Name Of Model/Racecar Driver Used In Sanitization Campaign; (3) TelexFree Members Targeted In Ongoing ‘IFreeX’ Reload Scheme

    newtelexfreelogo1.) Reports began to surface late Thursday on Twitter and Facebook that TelexFree has been cleared by a judge of U.S. pyramid-scheme charges. These reports are false. Period.

    Perhaps to add credibility to the claim, a photo that appeared to depict a female TV reporter sitting in a studio was posted on Facebook. A computer to which a TelexFree logo was affixed sat to the reporter’s right. Below these images was a text message in Portuguese.

    The headline was “FORTE VITÓRIA TELEXFREE NOS ESTADOS UNIDOS.” Google’s translate tool (to English) translated it to this: “STRONG Telexfree VICTORY IN THE UNITED STATES.”

    Another Portuguese section read as such: “Corte americana declarou que a empresa não pratica “Pirâmide Financeira” e nomeou um interventor, Stephen B. Darr, que deve dar início ao processo de recuperação judicial, que tem autonomia de liquidar ou manter o funcionamento da empresa.”

    The Google translation tool translated this section to: “American Court stated that the company does not practice “financial pyramid” and appointed a receiver, Stephen B. Darr, who shall initiate the process of bankruptcy, it has autonomy to liquidate or keep running the business.”

    No American court has said that TelexFree was not a pyramid scheme or not a “financial pyramid.” Darr is the court-appointed trustee in the TelexFree bankruptcy case in Massachusetts. He has said he has no intention of reorganizing or reopening the company.

    It is unclear whether the person depicted as a reporter has any association with TelexFree or any of its media outlets. It is not unusual for MLMs and their affiliates to try to create the impression that specific media figures or media brands endorse an “opportunity.”  (See April 7 PP Blog story: “TelexFree, An Alleged Pyramid Scheme, Promotes Itself During Probes By Wrapping Logos Of Local Fox, CBS, ABC, NBC Affiliates Into Video.”) Also see Oct. 15, 2013, PP Blog story: “PROFITABLE SUNRISE CASE: Did Fake Reporter Use Photo Of Real Reporter In ‘Story’ Titled ‘Nanci Jo Frazer WINS in Court – A Case Of Innocent Ignorance?’)

    2.) Some of our readers may recall the flap over TelexFree’s sponsorship of a professional soccer club in Brazil. Could a new flap be in the offing, one that involves a Brazilian model and racecar driver?

    Twitter and Facebook were used today to drive TelexFree visitors to images of Helena Soares. She is wearing an old TelexFree logo on her racing outfit.

    Whether TelexFree had or has sponsored her was not immediately clear. What is clear is that there are a number of references to Soares in the context of TelexFree online. One of them is a YouTube video titled “Deaf Deaf TelexFree.” Promo text appears to be in Russian.

    This may spark questions about whether TelexFree was targeted at members of the international hearing-impaired community. HYIP scams such as Noobing and Imperia Invest have been targeted at investors who cannot hear.

    Today’s Twitter/Facebook references to Soares depict her as a “Campeã” (champion) of TelexFree.

    It is not unusual for Ponzi schemes to seek to associate themselves with celebrities, politicians, business stars and sports stars. This particular form of brand-leeching surfaces in scheme after scheme after scheme. A recent major example of this is the WCM777 scam, which tried to associate itself with the sport of golf, Jesus Christ, Harvard College, the Denny’s Restaurant chain, Apple co-founder Steve Wozniak and former U.S. Vice President Al Gore — and many others.

    The practice is so common that it has become a virtual signature of a scam. Like TelexFree and the Profitable Sunrise scams, WCM777 traded on the image of the Christ the Redeemer statue in in Rio de Janeiro.

    3.) As the PP Blog reported on Sept. 30, 2014, Massachusetts Commonwealth Secretary William Galvin issued a warning on a an emerging “program” known as IFreeX that is being targeted at TelexFree members. iFreeX may be a reload scheme designed to fleece TelexFree members for a second time. On Oct. 1, the Blog reported that IFreeX appears to have lifted branding material of T-Mobile, including images of Carly Foulkes, “the T-Mobile Girl” famous for wearing pink summer dresses in TV spots.

    T-Mobile said it was looking into the situation.

    A large image of Foulkes appeared today on Twitter in an iFreeX promo targeted at TelexFree members.

    The use of the letter “X” in HYIP scams has led to questions about whether purveyors are speaking in a sort of secret code. The OneX scheme used an “X” and an image of a bomb as part of its logo, and HYIP scams have been known to have ties to “sovereign citizens” and antigovernment extremists.

  • Lawyers Assemble To Discuss TelexFree Case; Session Sponsored By Boston Bar Association And Led By Jonathan M. Horne And Timothy J. Durken Of Jager Smith PC

    newtelexfreelogoEDITOR’S NOTE: It is hard to contemplate the rich history of the United States without at once contemplating the rich history of the Boston Bar Association. They shall forever be intertwined . . .

    One could imagine that, 241 years ago, a contemplative session of the Boston Bar Association (BBA) might have been advertised with paper handbills and titled, “The Law as It Pertains to Taxation without Representation and the Destruction of Certain Aromatic Tea in Boston Harbor on December 16, 1773.”

    Although yesterday’s noontime session at the BBA appears to have eschewed handbills in favor of Twitter and such, it nevertheless addressed the past and the future. Its simple title: “TelexFree[:] How We Got Here and Where We Are Going.”

    Jonathan M. Horne and Timothy J. Durken of Jager Smith PC were instrumental in putting it together. A PDF of what was covered at the session is available today.

    Other information on the session is available at the website of the BBA.

    The venerable Boston Bar traces its roots to the 18th century. In the 1760s, a local young fellow by the name of John Adams was speaking on important things (such as justice) in and around the coffeehouses and taverns on Beacon Hill. He later helped organize the greatest beacon of freedom the world had ever known: the United States of America. In ways large and small, Massachusetts continues to be a preeminent source of light from this beacon.

    Later yet, Adams would become the second President of the United States, succeeding George Washington.

    President Adams, the father of John Quincy Adams, America’s sixth President, knew towns TelexFree members later would know. (Among them are Quincy and Worcester.)

    Read the bio of President John Adams at WhiteHouse.gov.