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Category: Writing And Branding

  • Small Sampling Of TelexFree ‘Net Losers’ Paints Picture Of Massive Cash Losses And Potentially Horrifying Loss Of Future Purchasing Power

    TelexFree pitchman Sann Rodrigues, one of four promoters accused by the SEC of fraud. Rodrigues has ties to Massachusetts, Florida and Brazil.
    TelexFree pitchman Sann Rodrigues, one of four promoters accused by the SEC of fraud. Rodrigues, a defendant in an earlier SEC case that alleged pyramid-scheming and affinity fraud,  has ties to Massachusetts, Florida and Brazil.

    UPDATED 3:33 P.M. EDT SEPT. 22 U.S.A. A small subset of data from 95 self-identified “net losers” in the TelexFree MLM scheme shows that they lost a whopping average of $27,578 each, according to an analysis by the PP Blog of court filings in the TelexFree bankruptcy case.

    The average could be higher because investment sums for four of the 95 were not immediately available. Particularly concerning is a claim from the 95 losers that there may be “1,000,000 or more victims” of TelexFree’s fraud.

    Viewed in microcosm, the data from the 95 losers paint a picture of an incredible loss of purchasing power across U.S. states and across the Atlantic Ocean into Italy — all from an association with TelexFree. At a minimum, the data suggest that TelexFree could cause certain U.S. investors to lose their nest eggs or even slip deeper into poverty.

    When compared to the U.S. poverty guidelines as published by the U.S. Department of Health & Human Services earlier this year, TelexFree eviscerated wealth among the TelexFree group of 95 at better than two times the U.S. poverty wage of $11,600 for one-person households in 2014. With average TelexFree losses among the group of 95 at $27,578, the 2014 poverty-wage of $27,910 for a five-member household nearly was matched. (The poverty guidelines referenced in this story are for the 48 contiguous U.S. states and the District of Columbia.)

    What this means, in essence, is that certain TelexFree members who perhaps were living in poverty or had a meager standard of living before they encountered TelexFree have lost capital at a rate that further tightens their economic shackles. Lost purchasing power means a lower standard of living for many Americans already living on tight budgets and may translate into things such as automobile repossessions and mortgage foreclosures.

    The bitter irony is that TelexFree — like many HYIP schemes — was positioned as the remedy for economic ills, perhaps particularly the ills of people already at the edge of individual and family disaster. In a bizarre sales strategy, TelexFree appears to have targeted the impoverished people of Haiti to sell a purported credit-repair program to impoverished people in the United States and elsewhere.

    Some purported TelexFree “leaders” appear to have had access to a “private jet” that traveled from nation to nation to line up marks.

    In many cases, according to the group of 95, the losses eroded or eviscerated the “life savings” of TelexFree members.

    Some TelexFree members were lured into the scheme by promises that $289 would return $1,040 in a year, $1,375 would return $5,200 and $15,125 would return $57,200. (Investors at the $1,375 level appear later to have been pitched to buy in at $1,425. Investors at the $289 level appear later to haven been pitched to buy in at $299. See story below for a reference to buy-ins at the $1,375 and  $1,425 levels among the group of 95. Many TelexFree members bought in at much higher levels.)

    “Everybody gets paid” was a common theme. The “program” even reached into other nations with severe economic challenges such as Peru and Rwanda.

    Of the group of 95, about 38 listed addresses in Massachusetts, TelexFree’s U.S. base. One individual in Everett, Mass., listed a loss of $427,500. Another person in Saugus, Mass., listed a loss of $345,000. Two other individuals with the same address in Revere, Mass., listed combined losses of $350,000 — $175,000 each. A person in Woburn, Mass., listed a loss of $72,800. Another person in Chelmsford, Mass., listed a loss of more than $58,777.

    In nearby Connecticut, a person in Stratford listed a loss of $42,000. A person in Monroe listed a loss of $35,625.  At the same time, a person in Trumbull listed a loss of $19,950. Also in the New England region, a person in Nashua, N.H., listed a loss of $16,000.

    To the south of Massachusetts, an individual in Waleska, Ga., listed a loss of more than $109,465. A person in Raleigh, N.C. listed a loss of more than $81,889. To the west, two persons with different addresses in Las Vegas listed losses of $50,000 — $25,000 each. Another person with a Las Vegas address listed a loss of $26,800. Yet another person in Las Vegas listed a loss of $17,175.

    In April 2014 — after bringing an emergency action against TelexFree and alleging it was conducting a massive Ponzi- and pyramid scheme — the U.S. Securities and Exchange Commission alleged that the “program” mainly was targeted at “Dominican and Brazilian immigrants in the U.S.”

    The SEC’s action occurred after authorities in Brazil — a Portuguese-speaking country — alleged that a TelexFree arm known as Ympactus was targeting investors there in a pyramid scheme.

    The group of 95 now says that TelexFree also targeted the “Nigerian and Russian” communities, in addition to the Spanish- or Portuguese-speaking communities.

    “. . . many Promoters do not speak English fluently,” the group of 95 says, adding that “creditor victims here are also undocumented immigrants residing in the United States, and may be thus extremely reluctant to directly participate in any formal proceedings, and also extremely reluctant to deal with a bankruptcy trustee or other official representative with duties other than solely to creditors. The bulk of the Debtors’ unsecured creditors cannot engage with these Chapter 11 Cases in any meaningful way.”

    Court filings by the group of 95 now show that TelexFree also had a presence among people who speak Italian and have addresses in Italy. Several addresses in Italy proper appear in a document filed by the group of 95, including the address of a person said to have lost $21,375, a person said to have lost $11,400 and another person said to have lost more than $8,699.

    Many others across the spectrum of the group of 95 suffered smaller losses that may be equally painful. The smallest sum lost by member of the group appears to be $900 — by a person in Deltona, Fla.  Another person in Deltona is said to have lost $1,645.

    Other “small” sums lost by members of the group of 95 include $1,375 by a person in Bologna, Italy; $1,425 by a person in Las Vegas; another $1,425 lost by a different person in Las Vegas; $1,425 by a person in New Bedford, Mass; and $1,425 by a person in Weymouth, Mass.

    Buy-in dollar sums from the low thousands to the multiple tens of thousands were common among the group of 95, which is seeking to form an official committee of unsecured creditors in the TelexFree bankruptcy case.

  • No Immediate Comment From Federal Reserve On Claims Related To Emerging BitClub Network ‘Program’

    cautionflagUPDATED 12:27 A.M. EDT SEPT. 22 U.S.A. The PP Blog today contacted the Board of Governors of the Federal Reserve System, owing to claims concerning the emerging BitClub Network “program” that is being pitched by certain members of the $850 million Zeek Rewards Ponzi- and pyramid scheme.

    Known in shorthand as the Fed, the Federal Reserve is the central bank of the United States.

    Someone is posting on the RealScam.com antiscam forum as “Fedman” and purporting to be “Steve,” a “Vice President” of a federal reserve bank. Fedman purports to have been employed by the Fed “for over 30 years,” to “manage large operations” and to “work with monetary policy.”

    Fedman appears to be defending pitches for BitClub Network by Brian Spatola, a New Jersey-based  alleged “winner” in the massive Zeek scheme that may have affected hundreds of thousands of people. The court-appointed receiver in the Zeek case is suing more than 9,000 alleged Zeek winners in the United States and has said he’ll also sue international winners in the “program.”

    The Fed did not immediately comment on the claims being made by Fedman.

    It is sometimes the case in HYIP schemes that promoters and defenders of “programs” drop the names of individuals and entities that have no ties whatsoever to a “program” as a means of sanitizing scams. The name-dropping associated with BitClub Network has been furious and now appears even to include the name of the U.S. central bank.

    bitclub350smallAfter missing a series of advertised launch dates — including one on Sept. 1, the 75th anniversary of the beginning of World War II and another on Sept. 10, the eve of the 13th anniversary of the 9/11 terrorist attacks — BitClub Network now appears to have launched.

    Promoters claim the scheme pays out between 0.3 and 0.8 percent a day for 1,000 days on invested sums of between $500 and $3,500. In addition, promoters claim there are recruitment commissions on top of the daily payout, a claim that accompanies many HYIP Ponzi- and pyramid swindles.

    Among the BitClub Network promoters are Spatola and T. LeMont Silver, late of Zeek. Silver also promoted the OneX pyramid scheme, an exceptionally murky program that used an image of a bomb in its logo.

    AdSurfDaily figure Kenneth Wayne Leaming, a purported “sovereign citizen,” was a Federal Reserve conspiracy theorist and an overall banking conspiracy theorist. Leaming was arrested by an FBI terrorism task force in 2011, after filing bogus liens against federal officials who had a role in the ASD Ponzi prosecution that began in 2008.

    Leaming now is serving a lengthy prison sentence.

     

     

     

  • British Women Convicted For Roles In Cash-Gifting Pyramid Scheme With Bridal Theme

    recommendedreading1In May 2012, three American women and alleged “leaders” of a cash-gifting pyramid scheme were arrested in Connecticut for their roles in the purported “opportunity,” a pyramid that featured so-called “Women’s Gifting Tables” and had a food theme. Two of the woman later were sentenced to prison. The third woman was placed on three years’ probation and put under court supervision.

    It now has emerged that 11 women in Britain implicated in a highly similar scheme have been prosecuted. Six have been convicted. The British scheme was known variously as “Give and Take” and “Key to a Fortune” and had a bridal theme.

    MailOnline published a photo of promo material associated with the scam. It showed a beaming young woman, presumptively a newlywed, displaying a pile of cash from a bed.

    The apparent message? Get a great start in wedded life by handing over your cash to a gifting scheme and waiting for your £3,000 to magically turn into more than £20,000.

    Like the Connecticut cash-gifting scheme, the British scheme allegedly was led by older women, including some in their fifties or sixties. Both schemes featured false claims the “program” was legal.

    The British scheme reportedly gathered on the order of £21 million, with about 90 percent of participants losing their money. Some of the participants appear to have purchased multiple positions, hoping to score more than one payout.

    Western Morning News, quoting a prosecutor, reported the scheme was ruled with a “rod of iron.” In May 2012, federal prosecutors in the United States said the Connecticut scheme included an element of “intimidation” aimed at silencing people who questioned the scheme.

    The scheme in Britain allegedly operated between May 2008 and April 2009. The Connecticut scheme operated roughly between 2008 and 2011.

    From the BBC, quoting Judge Mark Horton (italics added):

    “These cases and the actions and attitudes of these defendants demonstrate the way in which pyramid promotional schemes and chain gifting schemes can be secretly created and quickly spread amongst a vast number of people and over several counties,” he said.

    Even members of Alcoholic’s Anonymous were targeted in the U.S. scheme, according to testimony in the case.

    Vulnerable individuals also were targeted in the U.K. scheme, according to multiple media accounts.

    In 2013, police in Canada issued a warning about a “Women’s Circle” cash-gifting scheme “making its rounds” in British Columbia. In 2010 and 2011, at least 15 women in the U.S. state of Michigan were charged criminally in an alleged cash-gifting scheme.

    In February 2014, a prosecutor in Hawaii warned about a “Women’s Circle” gifting scheme operating in that state. The PP Blog reported at the same time  that members of a cash-gifting scam known as BlessingGoldClub were trying to offload “units” in the Better-Living Global Marketing HYIP scam for $500. The units purportedly were being discounted from $1,295.

    In the U.K. case, Judge Horton said, “The public need to be aware that schemes like this lead to the destruction of lifelong friendships and families and in some cases whole communities as friends and family are lured into such a scheme,” according to Western Morning News.

     

  • Launch Of Murky BitClub Network ‘Program’ Appears To Be Under Way

    From a BitClub Network promo on a page in Indonesian today. Red blocks by PP Blog.
    From a BitClub Network promo on a page in Indonesian today. Red blocks by PP Blog.

    Much remains murky about BitClub Network, a Bitcoin-themed “program” that in typical HYIP fashion missed at least three advertised launch dates earlier this month.

    The launch, however, now appears to have gotten under way shortly after “2 p.m. EST” today, a possible indicator that the “program” is using Panama time.

    One promo the PP Blog observed shortly after the launch time was in Indonesian. It appeared to claim that BitClub Network paid between 0.3 percent and 0.8 percent a day. If we are reading this claim correctly, it appears as though the promoter is saying recruits who send in $3,000 will earn somewhere between $9 and $24 a day — or between $270 and $720 a month.

    We ran the Indonesian claim through Google Translate. Here is part of what the English translation reads (italics added):

    . . . the process is run by experts [mining?] bitcoin Digital Currency you just sit at home and receive a daily income of about 0.3 to 0.8% everyday.

    The Indonesian pitch also referred to “compounding.” Many HYIP schemes purport that “earnings” can be compounded and that relatively small sums will be become tremendous fortunes over time. Zeek Rewards, which allegedly collected on the order of $850 million in a combined Ponzi- and pyramid scheme that lasted less than two years, was such a “compounding” program.

    If our reading of the early info on BitClub Network is correct, it is an upstart offering fraud with a lower daily payout rate than Zeek, which averaged about 1.5 percent. Promos for Bitclub Network claim recruits will get paid for 1,000 days. Zeek had a much shorter term, absent “rollovers.” BitClub Network also may have a rollover feature.

    Alleged Zeek Rewards winner Brian Spatola of Randolph, N.J., appears to be on the front lines of BitClub Network.  So does alleged Zeek winner T. LeMont Silver, a named defendant in a clawback action by the court-appointed receiver in the Zeek case.

    The BitClubNetwork site itself today was using rolling headlines from other sites. One read, “United Way Becomes Largest Nonprofit to Accept Bitcoin.”

    Some scams trade on the names of reputable entities as a means of creating a veneer of legitimacy. The names of other famous companies easily could appear in the rolling headlines on BitClub Network, which is presented as a “mining” venture that offers “shares.”

    That famous entities may use Bitcoin does not mean that BitClub Network itself is legitimate. Prior to the emergence of Bitcoin, the scammers who promote HYIPs routinely traded on the names of famous banks and credit-card companies, hoping the legitimacy of those enterprises would rub off on the emerging scams.

    Regulators have issued repeated warnings about the volatility of Bitcoin values and about scams that seek to tie themselves to Bitcoin.

    Here is part of what BitClub Network says about itself on its website (italics added):

    BitClub is not owned by any one person, we are a team of experts, entrepreneurs, professionals, network marketers, and programming geeks who have all come to together to launch a very simple business around a very complex industry. Anyone can join BitClub and begin earning a passive income by taking advantage of our expertise in Bitcoin mining and other Bitcoin related services.

    Fuzzy ownership and claims about “passive income” lead to questions about whether a “program” is conducting an offering fraud, selling unregistered securities as investment contracts and permitting recruits who have little or no net worth to direct whatever safety blanket they have to murky enterprises with long reach.

    Zeek Rewards preemptively denied it was a “pyramid scheme.” On its website, BitClub Network preemptively denies it is a “ponzi scheme .” The “program” claims to be “based in Europe.”

    It further claims to operate “virtually with contributors from all over the world.”

    And, it claims, “[o]ur main servers and technology for digital mining is located in a very secure and private location that will only be made available by pictures and a live video feed in the near future.”

    An earlier HYIP “program” known as JSS Tripler/JustBeenPaid appeared to use servers in the Netherlands. Frederick Mann, its murky purported operator, once fretted that the JSS/JBP servers could be subjected to a “cruise missile” attack.

    This is from the FAQs at the BitClub Network site (italics added):

    Q – If BitClub is already successful at mining Bitcoin then why are you sharing profit? Great Question!s [sic]

    A: Because of how mining works it is always getting harder and harder for smaller mines to make great profits. This is quickly turning into a game for the big boys. Bigger orders mean bigger discounts on hardware, less electricity and rent per Ghz, more flexibility in what is mined and many other factors. By starting BitClub Network we know that over the next couple of years we could become one of the largest most profitable mines in the world. We will actually make more money sharing the profits with you. That’s why there are so many mining pools, we are just doing things a little differently. We believe in the motto “Making money is a team sport.”

    Despite the fact BitClub Network says it does not promote that “a share will have set return and we don’t offer 100% ROI claims,” the site in Indonesian is making a claim that the daily payout will range between 0.3 percent and 0.8 percent. If people send in $3,000 and purportedly make between $9 and $24 a day with it, they’d make between $9,000 and $24,000 in BitClub Network’s purported term of 1,000 days.

    Bernard Madoff would not have dared to be so bold.

    A graphic of a smiling miner wearing a button-down shirt and swinging a pick appears on the site in Indonesian. Another graphic at the site shows Bitcoin and an Automated Teller Machine — as through BitClubNetwork will be the easiest thing in the world, that laborers worldwide will be smiling.

    The site in Indonesian also carries graphics of nice automobiles. A photo displays people standing in front of a “HOLLYWOOD” sign — presumptively in California. The banner in part reads, “MALAYSIA.”

    Another “MALAYSIA” banner appears in the foreground of a shot that shows people and pine trees set against a backdrop of snow.

    Following a recent pattern in HYIP promos, famous landmarks such as the Eiffel Tower and the Arc de Triomphe also appear on the site in Indonesian.

  • UPDATE: BitClub Network Launch Reportedly Delayed — Again

    bitclub350smallUPDATE: There are reports on Twitter that the launch of the murky BitClub Network “program” has been delayed.

    This would be the third postponement.

    A purported “enormous opportunity in Bitcoin Mining,” according to veteran HYIP huckster and alleged Zeek Rewards Ponzi “winner” T. LeMont Silver,  BitClub Network advertised a Sept. 1 launch date.

    Promoters of the scheme then claimed it would launch on Sept. 3 or Sept. 4, but that didn’t happen. The purported launch date then was moved up to Sept. 10, the eve of the 13th anniversary of the 9/11 terrorist attacks.

    Now, promoters say the 9/10 launch is off. A Facebook post this afternoon claims the launch will be “slightly delayed” and that the “program” will “give 24 hour notice before launch once everything is ready to go.”

    Whether Silver — or any BitClub Network promoter — knows who is running things remains unclear.

    Prospects are being told they’ll earn money for 1,000 days.

    The advertised Sept. 1 launch date coincided with the 75 anniversary of the beginning of World War II.

    A pitch accessible through Twitter claims the”launch will be delayed for a few days more.”

  • T. LeMont Silver In Furious Name-Dropping Spree For BitClub Network; Veteran MLM Huckster Still Trails WCM777 Scam In Unofficial Record Book

    3RD UPDATE 11:45 A.M. EDT U.S.A. Zeek Rewards clawback defendant T. LeMont Silver promised “training” to recruits of the emerging BitClub Network “program” — and the veteran HYIP huckster delivered by training his listeners to drop names.

    Lots and lots of names.

    Regardless, Silver might have to dial up his efforts if he hopes to become be the new standard-bearer in the category of name-dropping to sell a purported MLM/direct-sales “opportunity.” That record is held unofficially by the WCM777 “program,” which the SEC described in March as an international pyramid scheme.

    But even longtime MLM huckster Phil Piccolo — known as the “one-man Internet crime wave” in part for the ceaseless dropping of names such as Oprah Winfrey, Donald Trump, Groupon, Walmart and Apple  — must be shaking his head in begrudging awe at Silver’s recent efforts to foist the emerging BitClub Network brand on the consuming public.

    After leading recruits to disaster in Zeek, Silver turned his attentions to the JubiMax/JubiRev and GoFunRewards/GoFunPlaces MLM disasters, supplementing his promos for “Plan B” HYIP schemes by dropping the names of MLM companies such as Herbalife, Amway, Avon, ViSalus and others.

    With BitClub Network, Silver has put his name-dropping into overdrive, joining the likes of the scamming chieftains of WCM777, the collapsed pyramid scheme that traded on the names of Siemens, Goldman Sachs, the Denny’s restaurant chain and a series of hospitality companies with famous flags.

    By the SEC’s count, WCM777 dropped on the order of 700 names to sanitize its bizarre pyramid scheme. (WCM777 also once featured a love letter to the disaffected affiliates in Peru it had drafted into a Ponzi- and pyramid scheme and subjected to police raids while also featuring what BehindMLM.com has described as a “Jesus Sword.”)

    Distressingly, Silver assures his audience in a recent promo that “people from all across the globe” were listening to his webinar and to promos of other affiliates.  The named countries included the Philippines, Russia “and all over Europe, Australia, Canada.”

    The Silver promo session was titled, “Make Money With No List Featuring BitClub Network Webinar.”

    Silver hasn’t topped 700 yet in the unofficial name-dropping calculus, but he’s off to a good start, essentially positioning BitClub Network as a company that will create profit opportunities for the same sort of visionaries who spotted the genius behind one-time emerging brands such as Google, AOL, Microsoft (Internet Explorer), Amazon.com, Apple’s iPhone, Apple’s iPod, Facebook, Twitter, YouTube, Blogger and more.

    It’s all about “being at the right place at the right time,” Silver bleats. He even suggests in text that BitClub Network could be the next “email.”

    As the video proceeds, Silver talks about Bitcoin, using slides to drop the names of Tiger Direct, the Sacramento Kings NBA franchise, Lord & Taylor, Dish Network, Expedia, Newegg and Gyft. He also works in the names of CVS Pharmacy, Sears, Target, Home Depot, Whole Foods Market and more.

    Along the way, Silver also drops the names of California Gov. Jerry Brown, “China’s Central Bank Governor” and Gerogy Luntovsky, “deputy chairman of the bank of Russia,” according to text Silver displays.

    From a promo for BitClub Network featuring T. LeMont Silver.
    From a promo for BitClub Network featuring T. LeMont Silver.

  • ‘BitClub Network’ Now Reportedly Set To Launch On Sept. 10, Eve Of Anniversary Of 9/11 Attacks

    bitclub350smallThe BitClub Network “program” — originally set to launch Sept 1, the 75th anniversary of the beginning of World War II — reportedly now will launch on Sept. 10.

    That’s the eve of the 13th anniversary of the 9/11 terrorist attacks.

    The Sept. 10 launch time is pegged for “2pm EST,” which possibly means the “program” is using Panama time. Panama, part of the Americas, does not use Eastern Daylight Time (EDT).

    Some of the money from the Profitable Sunrise HYIP swindle last year went to an entity in Panama City, the SEC said last year. Other Profitable Sunrise money ended up in Australia and the Czech Republic, according to court filings.

    Profitable Sunrise operated through a “mail drop” in England and had a “director” in Seychelles, according to court filings.

    Zeek Rewards Ponzi- and pyramid-scheme figure T. LeMont Silver, an early adopter of BitClub Network who is promising a $600 sign-up bonus and “training” for the “program,” now is using a Seychelles address, according to an email pitch he sent last week.

    Seychelles is a known money-laundering haven. Silver may be operating from the Dominican Republic after parachuting into the nation after the collapse of Zeek in 2012 and the later collapse of two other purported “revenue-sharing programs” he was pitching.

    Those “programs,” which ended up suing each other amid allegations of fraud, were GoFunPlaces/GoFun Rewards and JubiMax/JubiRev. Silver described disaffected prospects as “low-hanging fruit.”

    BitClub Network, which purportedly offers “shares” of “mining pools,” has a Bitcoin theme. The reported buy-in levels are $500, $1,000 and $2,000, with “Founders’” positions going for $3,599.

    Whether Silver even knows precisely who is operating the BitClub Network “program” is unclear. Also unclear is why the “program” chose start dates that corresponded with the starting dates of World War II in Europe and the 9/11 terrorist attacks against the United States.

    Are the dates merely coincidences?

    Hitler’s Nazi Third Reich was hoped to last 1,000 years. BitClub Network, early bird MLM HYIPers say, will pay a daily dividend for 1,000 days.

    HYIP schemes in general are exceptionally murky propositions, with narratives, descriptions and actions that may be designed as taunts against both prospects and regulators. Profitable Sunrise, for example, used images of Jesus Christ in promos and offered a purported “Long Haul” plan with a purported Easter gift to be paid out on April 1, 2013 — April Fool’s Day.

    March 31 of that year was Easter Sunday.

    WCM777 also used images of Jesus Christ. A follow-up scam used images of a golden pyramid.

    John Neil Hirst was charged by the U.K. Serious Fraud Office in 2011 with running a Ponzi scheme that targeted British, French and Americans through a company registered in Panama and Seychelles.

    A 2010 scam known as “Alpha Trade Group” that was promoted on well-known Ponzi-scheme forums purported to be registered in Panama and was using “various corporations and fictitious names registered in Florida” to pull off the scheme, according to court filings.

    David F. Merrick of Traders International Return Network (TIRN) was charged in a 2009 Ponzi scheme that was operating in the United States while funneling money to Panama, Mexico, Malaysia, Switzerland and the Netherlands.

    A 2014 online scheme known as Mutual Wealth might have operated through entities in Panama and the United Kingdom “and through Russian or Belarussian nationals,” the SEC said.

    In August 2013, NEOMutual, a purported “crowdfunding” opportunity that claimed it used bitcoin and a series of offshore payment processors, further claimed to provide daily interest rates of 1.4 percent, 1.6 percent and 1.9 percent on sums between $20 and $250,000.

    It was promoted alongside the bizarrely named “Cash Crop Cycler.” Among the provocative claims on the CashCropCycler website was that the “program” was interested in building “a network that ticks.”

    A 2011 scam known as OneX used an image of a bomb in its logo.

    Silver was a OneX pitchman, alongside Andy Bowdoin, the operator of the $119 million AdSurfDaily Ponzi scheme that he positioned as a “revenue-sharing” program.

    At least one promo for Bitclub Network claims “All Countries” and prospects are accepted for “Legal Passive Income.”

    “EARN PASSIVE for 1,000 Days,” the promo roars.

    “No Ponzi,” it says.

     

  • JOAN RIVERS: 1933-2014

    “It is with great sadness that I announce the death of my mother, Joan Rivers. She passed peacefully at 1:17pm surrounded by family and close friends. My son and I would like to thank the doctors, nurses, and staff of Mount Sinai Hospital for the amazing care they provided for my mother. Cooper and I have found ourselves humbled by the outpouring of love, support, and prayers we have received from around the world. They have been heard and appreciated. My mother’s greatest joy in life was to make people laugh. Although that is difficult to do right now, I know her final wish would be that we return to laughing soon.” — Statement at MelissaRivers.com, Sept. 4, 2014.

    And thousands more . . .

  • ZEEK RECEIVER: ‘No Comment’ On BitClub Network Story

    Zeek receiver Kenneth D. Bell had “no comment” this morning on an Aug. 30, PP Blog story that reported Zeek figure T. LeMont Silver now was pushing a murky “program” called “BitClub Network.”

    Bell has raised concerns that Silver is a serial promoter of Zeek-like schemes to defraud.

    As the PP Blog noted yesterday, Silver also has been linked to a “program” known as “Gold Crowdfunding” that has links to the OneX scam that put AdSurfDaily Ponzi schemer Andy Bowdoin in jail in 2012. Like Bowdoin, Silver pitched OneX.

    OneX used an image of a bomb in its logo.

    OneX logo.
    OneX logo.

    Bell is suing Silver for the return of his alleged gains in Zeek, saying they came from Zeek victims. The SEC and federal prosecutors in the Western District of North Carolina have described Zeek as a Ponzi- and pyramid scheme that collected hundreds of millions of dollars in less than two years of operation.

    The SEC shut down Zeek in August 2012.

    Zeek figure Dawn Wright-Olivares pleaded guilty to criminal charges of investment-fraud conspiracy and tax-fraud conspiracy in February 2014. Her stepson, former Zeek programmer Daniel Olivares, pleaded guilty to a charge of investment-fraud conspiracy.

    The Consumer Financial Protection Bureau (CFPB) issued a warning on Bitcoin-themed scams on Aug. 11, 2014. Silver’s promotions for BitClub Network began to appear on the Internet about three weeks later.

    CFPB did not immediately respond to a request for comment on BitClub Network, which Silver has described as a “mining” venture.

    BitClub Network purportedly pays out a daily dividend for 1,000 days and has three “mining pools” with tiered buy-in rates: $500, $1,000 and $2,000. Early birds — described as “Leaders” — are being encouraged to send in $3,599 to qualify for a “Founder’s” position.

    Much is murky about BitClub Network.

    Also see Sept. 1 report on “Gold Crowdfunding” by BehindMLM.com.

  • UPDATE: BitClub Network Launch Said To Be Delayed; ‘Founders’ Positions Reportedly Sell For $3,599; Pitches Directed At ‘Leaders’; Prospects Asked To Wire Money; Purported ‘Opportunity’ May Have TelexFree-Like Cash-Transfer System

    “These participants received uncontrolled cash deposits outside of the TelexFree system,” — Massachusetts Securities Division, Ponzi- and pyramid complaint against TelexFree, April 15, 2014.

    cautionflagEDITOR’S NOTE: For our earliest background on BitClub Network, see Aug. 30 report that references serial HYIP promoter T. LeMont Silver. Are you really sure you want to promote bitcoin-themed HYIPs alongside a man who parachuted into the Dominican Republic from Florida after the Zeek HYIP scam and now is using an address in Seychelles?

    Read on for more early background on BitClub Network . . .

    ** ______________ **

    As tomorrow is the 75th anniversary of the beginning of World War II, it’s easy enough to summon images of the late Winston Churchill asking the world to pay attention. The great man still is very much alive in the annals of history and in millions of hearts. We imagine him in 2014, contemplating BitClub Network as a gathering storm, perhaps a modern “riddle wrapped in a mystery inside an enigma.”

    BitClub Network appears very much to be yet another nascent MLM/network marketing whack-a-mole “program,” a reload scheme rising to replace a “program” that has collapsed. The most recent major “program” to crumble into an alleged heap of Ponzi- and pyramid rubble was TelexFree — in April 2014.

    Reload schemes keep cash flowing to factories of online crime and to the “leaders” who deliver human souls to them for the purposes of financial disembowelment. The more bodies disemboweled, the more the scammers-in-chief and their disingenuous and corrupt enablers make.

    Our early analysis of BitClub Network, subject to amendment, is that it is casting its net to attract the greediest and greatest HYIP scammers on a cross-continent basis. The PP Blog observed information last night that suggested the brand of BitClub Network, which already is conducting business via wires that pass though the United States, also may be expanding in a region of Europe known for atrocities, including ethnic cleansing.

    Among the core dangers of HYIP scams is that they deliver undeserved and potentially ruinous economic power to unknown persons or entities. The money could be used for any nefarious purpose under the sun.

    For an unclear reason — headline scraping to drive people with an interest in politics to bitcoin-themed sites, perhaps? — one promo using the name of BitClub Network linked yesterday via Twitter to a site that featured a video commercial and the names of National Geographic and Michelin, the French tire-maker with a presence in the United States. The Twitter linkage occurred through a site curiously dubbed “Bitcoin Regime” with a “From” message of “Bitclub Russia.” A promo today linked via Twitter through Bitcoin Regime was playing a commercial for Schick, the Connecticut-based maker of razors. Some text surrounding the promos is in English. Other text appears to be in the language of Russian or Ukranian or Serbian.

    “Bitclub Russia” appears also to have its own YouTube site. “Bitcoin Regime,” meanwhile, says “[t]his site was created out of passion and interest in the subject.” One of the headlines on the site reads, “Obama: No Strategy For ISIS.. (Oops, We Funded & Trained ISIS!).”

    Another reads, “. . . because fuck fiat!” Yet another reads, “Let’s Talk Bitcoin: Buenos Aires & Bitcoin Embassy.” Still another, in Russian, reads, “Earn Bitcoins on a serious level 1 service! The most serious Bitcoin earnings!” — when Google’s translation tool from Russian to English is used.

    Is it a scraping site of some sort that is drafting off the anticipated popularity of BitClub Network?

    ISIS is the terrorist group that allegedly beheaded American journalist James Foley and also allegedly beheaded a Lebanese soldier.

    Launch Timing

    Head-scratchingly, the “Founders’” launch of the BitClub Network “program” had been set for Sept. 1, the 75th anniversary of the beginning of World War II. Whether that’s a coincidence is unclear. Sept. 1 also is Labor Day in the United States. Various HYIPs have targeted the world’s workers, offering false relief from the daily grind — not just a chicken in every pot, but a mansion, unlimited sums of cash and perhaps a fleet of high-end automobiles and maybe even a Ferrari (or two).

    As is typical in HYIP scams, there was at least one report this morning circulating on Twitter that BitClub Network has experienced a launch delay. As also is typical in HYIP Ponzi Land, black comedy is in no short supply. Whether it’s accidental or intentional is unclear.

    In any event, BitClub Network reportedly has a feature known as the “holding tank” — and this “holding tank” is being blamed for the launch delay.

    “Hi Leaders,” a link from Twitter bizarrely begins, adding a second layer of black comedy. “Ok, I just heard that the programming of the holding tank feature is taking a bit longer than expected, so dont [sic] be dissapointed [sic] as it basically gives us more time to prepare our teams. :) So, it now looks like we [sic] gonna pre launch around wednesday [sic] or thursday [sic] 2pm EST [sic?] this coming week!”

    Perhaps most distressing, though, is a murky claim that “Founders” still can wire $3,599 to get started, “holding tank” delay or not. This wire maneuver appears to be very similar to the way things were done at WCM777, alleged by the SEC earlier this year to be a massive international scam. It’s also highly reminiscent of Profitable Sunrise, which told the marks to wire money to the Czech Republic. Some of the money was seized in Hungary in a money-laundering probe.

    Details of the BitClub Network wiring arrangement are not published and apparently are revealed only in private communications, another typical signature of an emerging HYIP scam. It’s also possible that people are disguising themselves as BitClub Network promoters to solicit and then steal wire transfers.

    “If you want to do a wire you need to get back to me ASAP and I will sent [sic] you the details for that,” the link from Twitter coaches. “The advanatge [sic] of sending in a wire is that you lock your spot on top of the binairy [sic] before hundreds or probably thusands [sic] that will come in afer [sic] you at launch!”

    Chronic typos and odd syntax often signal HYIP scammers are at work.

    A separate link from Twitter, presumptively from a different early bird, says, “[Y]ou get paid right away on all referrals and can use those commissions to pay others in after they send you paypal [,] bank wire, or pazya etc.”

    If this is true, it would reflect the money-moving mechanics of other HYIP scams that encourage “leaders” to gather money from prospects via bank wires and payment processors — and then to cherry-pick part of it or all of it to use as a recruitment lure. Such deals almost certainly would take place off the books of the “program” and can create layers and layers of black markets inside a larger black market — nesting dolls of crime, if you will.

    The second link from Twitter continues (italics added):

    I can’t stress enough the fact that you are at the top and at the very beginning of this incredible global program that will make everyone money every day, just for joining.

    If you have done your homework you shoud [sic] know by now why this is and how it works, cause of the crypto currency mining :)

    And if you refer others, well you”ll [sic] make a KILLING! read [sic] the income example on the payplan site, this will blow your mind!

    This is BIG money you can make here, some of you will make already [sic] 7 figures by christmas [sic].

    Naturally some American scammers appear already to be doing some of the bidding for BitClub Network. It’s as though Profitable Sunrise, a collapsed HYIP allegedly operated by a ghost and driven by willfully blind affiliates who conducted business by wire from the United States to Eastern Europe, never happened.

    BitClub Network also may be a bit like TelexFree, another collapsed HYIP. After prospects are told they can only join by wire at this stage and later will have to join with bitcoin, the first link from Twitter goes on to suggest sponsors can perform back-office transactions and collect money directly from recruits.

    Here’s how the first link from Twitter (described above) confusingly puts it (italics added):

    OR……having your sponsor or upline paying for you with their commissions within their back office using the credit system after you have sent them the money!

    Back-office transactions almost certainly contributed to the calamity at TelexFree, an alleged Ponzi- and pyramid scheme that may have gathered more than $1.2 billion in a little more than two years of Internet scamming. One of the issues at TelexFree was “cash deposits” alleged to be “uncontrolled.”

    As noted above, one of the dangers of such systems is that they introduce the specter of a black-market economy and back-alley deals, making already-dangerous enterprises doubly dangerous. The results can be bizarre.

    As things stand today, if BitClub Network were the movie “Casablanca,” Renault would be telling the troops to “round up the usual suspects.”

    Any person who joins this program with a purported “holding tank” is a fool. Any person who pitches it to others amid these exceptionally murky circumstances is reckless beyond comparison.

     

  • In Face Of Clawback Action And Warnings On Bitcoin Scams, Zeek Figure And Florida ‘ExPat’ T. LeMont Silver Offers ‘BitClubNetwork’ Mark Bonus Of More Than 3 Times What He Pays His Dominican Maid — And Uses Address In Money-Laundering Haven

    “The Florida Office of Financial Regulation (OFR) warns consumers of the potential risks associated with purchasing, investing in, and exchanging virtual currencies, such as bitcoin. Members of the U.S. Congress, federal and state regulatory authorities, are continuing to question a way forward with respect to these diverse and decentralized payment mechanisms. Mt. Gox, an international Bitcoin exchange, filed for bankruptcy that resulted in losses in excess of $400 million and put a spotlight on risks surrounding virtual currencies.” — Florida Office of Financial Regulation, March 18, 2014.

    “The Court may wish to take judicial notice of the many online videos in which one Defendant, T. Le Mont Silver, has appeared regarding his moving his family to the Dominican Republic . . . and promoting several ‘revenue sharing’ schemes in addition to Zeek.” — Kenneth D. Bell, Zeek Rewards receiver, July 30, 2014.

    “Today the Consumer Financial Protection Bureau (CFPB) issued a consumer advisory warning consumers about the risks of virtual currencies such as Bitcoin. The CFPB advises consumers to be aware of potential issues with virtual currencies such as unclear costs, volatile exchange rates, the threat of hacking and scams, and that companies may not offer help or refunds for lost or stolen funds. The CFPB also announced that consumers who encounter a problem with a virtual currency product or service can now submit a complaint with the Bureau.” — Consumer Financial Protection Bureau, Aug. 11, 2014.

    Using a launching rocket in a promo, "BitClub Network" is set to launch Sept. 1, the 75th anniversary of the beginning of World War II.
    Using a rocket in a promo, “BitClub Network” is set to launch for “Founders” on Sept. 1, the 75th anniversary of the beginning of World War II. Will more financial terror rain down from the skies above HYIP Ponzi Land?

    4th UPDATE 3:27 P.M. EDT U.S.A. Florida “ExPat” T. LeMont Silver, a target of a huge clawback lawsuit flowing from the 2012 Zeek Rewards Ponzi- and pyramid case and a veteran HYIP “revenue-sharing” huckster, may be a bit slow on the uptake.

    Florida — his own state — issued a caution in March 2014, warning that there are risks associated with bitcoin and that virtual currencies have been known to have “[l]inks to criminal activity.”

    In July, the court-appointed receiver suing Silver for the return of his alleged winnings in the Zeek scam alleged that Silver was in a group of “serial” pitchmen of “revenue sharing” schemes — in this context, Zeek-like schemes to defraud.

    Receiver Kenneth D. Bell asked a federal judge to take “judicial notice” of certain Silver promotional videos.

    Silver’s Zeek gains tipped the scale toward $2 million and came from Zeek victims, Bell has alleged.

    On Aug. 11, the Consumer Financial Protection Bureau (CFPB) issued a warning on bitcoin-themed scams.

    “You may also have heard that some people buy them as speculative investments or that you can ‘mine’ them with your computer,” CFPB said in its warning.

    Sometime after 6 p.m. yesterday, Silver sent out an email promising recipients an “enormous opportunity in Bitcoin Mining” through a “program” known as “BitClub Network,” the PP Blog has learned.

    “BitClub Network” prospects are asked to invest in “mining pools,” BehindMLM.com is reporting. (Link below.)

    “There are already hundreds of companies that do a share of revenue with their traders in this space,” the Silver email read in part.

    So, another “revenue-sharing” scheme from Silver — this in the face of highly public warnings about bitcoin-themed scams, HYIP scams and even a de facto warning from the Zeek receiver that something untoward was occurring.

    “Even if you have no list or never have a recruit, you can leverage this system to earn EVERY DAY for a period of 1,000 days!” the Silver email bleats. “As you grow your units … each subsequent unit also earns for 1,000 days.”

    No part of the email touches on any of the warnings issued by regulators about the volatility of bitcoin values and scams that crop up that seek to attach themselves to bitcoin.

    Here is how the Florida OFR spelled out the risks just five months ago (italics added):

    • No insurance guarantee. Virtual currency is not guaranteed with protection, while funds held by U.S. banks and credit unions are insured.
    • Unpredictability. The value of virtual currencies can rise and fall in a short time, and these values are driven by the marketplace. Those who deal in virtual currencies should realize the risks, which can result in substantial losses.
    • Security. Some virtual currency exchanges that offer to store the consumers’ funds in virtual wallets have failed to protect them, resulting in consumer losses due to hacking of these virtual wallets.
    • Links to criminal activity. Criminals have taken advantage of the anonymity provided by virtual currencies, and have used them for money laundering and other crimes. If an exchange is shut down, consumers may not be able to access their funds.
    • Regulation. Oversight of virtual currencies has not been thoroughly developed, and thus, consumers lack many of the protections they have come to expect within the financial services industry.
    • Tax obligations. To view the Internal Revenue Service (IRS) guidance on the tax implications concerning virtual currencies, visit http://www.irs.gov/pub/irs-drop/n-14-21.pdf.

    Silver has been featured in videos bragging about how good his life has been in the Dominican Republic, which recently has been rocked by the alleged TelexFree Ponzi- and pyramid scheme that has affected hundreds of thousands of people across the globe.

    The veteran HYIP huckster appears to have relocated to the Dominican Republic from Florida after the collapse of the Zeek scheme and after at least two other “revenue-sharing programs” he promoted after the collapse of Zeek also cratered.

    One way to view these outrageous “programs” is as a war against people of limited means or people already living in poverty, dressed up as in invitation to escape their own misery. Like the rockets of war rain down on their human targets, HYIP offers fairly rain down from the skies of the Internet, putting vast numbers of people at risk.

    Whether Silver remains in the Dominican Republic is unclear. His email for the “BitClub Network” appears to have used an address in Seychelles, an Indian Ocean archipelago nation associated with money-laundering. Why a Florida man who apparently did at least a pass-through in the Dominican Republic would be using a Seychelles address was unclear.

    Agnes Jouaneau, a purported “director” of Inter Reef Ltd., a purported U.K. business associated with the Profitable Sunrise HYIP swindle last year, purportedly operated out of Seychelles. (Also see this disturbing 2010 story at Stuff.co.nz that references the name of Jouaneau before Profitable Sunrise emerged and raises questions about the laundering of money, perhaps even for terrorism.)

    Incredibly and disgustingly, Silver’s pitch for “BitClub Network” promises “[$]600 to one person that goes through this entire email” and puts into action “everything” he shares in a video pitch.

    Silver did not say whether he intended to pay his mark with proceeds from Zeek or any of his other scams.

    The $600 sum apparently earmarked for his “BitClub Network” mark is more than three times the monthly wage Silver said in a January video he paid his Dominican maid.

    Also see “BitClub Network” review at BehindMLM.com.

    A snippet from BehindMLM.com (italics added):

    At the very least, it’s a certainty that BitClub Network are accepting investments from affiliates on the expectation of a >100% ROI. Whether or not the scheme has registered itself with the SEC is unclear. Given the offshore domain registration with a Panama-based provider, I’d say it’s unlikely.

    BitClub Network is an offshore scheme seeking to fleece investors under the guise of “let us explain Bitcoin mining to you”, with the mining itself (if any actually exists) having little to nothing to do with the flow of funds within the scheme.

    Whilst the owner(s) of BitClub Network are for now are sticking to the shadows, there’s evidence that factions of the Zeek Rewards Ponzi scheme might be behind it.

    “Bitclub Network” and its companion rocket apparently are set to launch for “Founders” on Sept. 1.

    If it does, it will launch on the 75th anniversary of the beginning of World War II and all the hellfire that followed. On Sept. 1, 1939, Hitler invaded Poland.

    NOTE: Our thanks to the ASD Updates Blog for providing the July 30 filing by the Zeek receiver.