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Category: Writing And Branding

  • BULLETIN: Tata Group, Famous Business Concern In India, Says Fraudsters Trading On Its Name To Push HYIP Scheme; Purported Agriculture ‘Program’ Has Presence On The Ponzi Boards

    The purported TataAgro entity had a presence on the Ponzi boards and appears to have used trading screens to dupe the worldwide investing public. Image source: Google cache.
    The purported TataAgro entity had a presence on the Ponzi boards and appears to have used trading screens to dupe the worldwide investing public. Image source: Google cache.

    BULLETIN: (3rd Update 8:32 a.m. ET, Feb. 20 U.S.A.) The Tata Group, a global conglomerate based in India, says its name has been stolen by an HYIP Ponzi scheme. The fraud scheme is associated with a domain styled TataAgro.com and has a presence on the MoneyMakerGroup, TalkGold and DreamTeamMoney Ponzi forums, according to search results.

    Like the recently exposed WCM777 fraud scheme, the TataAgro scam claims a business presence in the British Virgin Islands. WCM777 also traded on the names of famous companies, including Siemens, the German conglomerate. Siemens issued statements warning the public about WCM777. Tata now has done the same thing with the purported TataAgro entity.

    The TataAgro website “claims that ‘Tata Agro Holding is a subsidiary of the globally known Tata group, [and is] one of the top 10 agro investment players in Asia’s financial market,’” the real Tata says. “It goes on to offer a wide range of investment plans with a monthly profitability of up to 100%.

    “Members of the public are hereby cautioned that the information provided on the website is absolutely false, misleading and intended to defraud innocent and unwary members of the public,” the real Tata says. “Neither Tata Sons nor any other Tata company has any connection whatsoever with the aforesaid Tata Agro Holding. Tata Sons is initiating appropriate action in the matter.”

    PonziTracker.com was among the first outlets to report the news of the Tata warning.

    The TataAgro site appears not to be loading.

    It is somewhat common for fraud schemes to try to steal the identities of major figures on the world financial stage. CONSOB, the Italian securities regulator, regularly publishes information on purported “opportunities” that adopt the names of legitimate firms to create confusion and fleece the masses.

    A post dated Dec. 3, 2013, at the MoneyMakerGroup Ponzi forum claims the purported TataAgro entity pays “1.9-3.1% daily for 15-90 days” and accepts Perfect Money, BitCoin, EgoPay and Qiwi.

    Meanwhile, a post dated Dec. 17 at the DreamTeamMoney Ponzi forum makes this claim (italics added):

    Tata Agro is an agricultural investment company founded in 2012 in British Virgin Islands. We are a subsidiary of transcontinental conglomerate Tata Group that has been established in India back in 1868 and now boasts the combined market capitalization of $96 bln.

    We have retained only the best things from a rich and long experience of our ancestor: the unique corporate culture, client-oriented and customized approach, and understanding of the market through retrospective analysis. Our fundamental aim is to help you grow your capital.

    We work with assets like barley, soya, soya oil and meat, corn, wheat, and livestock and currently operate in CME Group, TOCOM, and MGEX exchange houses.

    We are eager to offer you four investment plans with the daily ROI of 1.9% to 3.1% and investment term of 15 to 120 days. You can invest from 5 to 10,000 USD. Apart from that, we offer you a profitable referral program that lets you earn more and work side by side with your family and friends.

    A post dated Dec. 17 at the TalkGold Ponzi forum makes these claims (italics added):

    • Invest 5 to 100$ for 15 days and earn 1.9% ROI daily;
    • Invest 100 to 1000$ for 30 days and earn 2.3% ROI daily;
    • Invest 1000 to 5000$ for 60 days and earn 2.5% ROI daily;
    • Invest 5000 to 10,000$ for 120 days and earn 3.1% ROI daily.

    Collapsed fraud schemes such as Zeek Rewards, AdSurfDaily, Legisi, Pathway to Prosperity, Profitable Sunrise, Imperia Invest IBC and many more also had a presence on the Ponzi boards.

    The TelexFree “program” currently has a presence on the Ponzi boards.

  • TELEXFREE LA-LA LAND: Promo For Alleged Pyramid Scheme’s International Convention Is Voiced By Former SEC Defendant (In Pyramid-Scheme Case) — And Uses Images Of Pyramids Of Giza And American MLM Lawyer

    In a bizarre promo, Egyptian pyramids are being used as an art element by cheerleaders for TelexFree, an alleged pyramid scheme. Source: ConventionTelexFree.com. Red highlight by PP Blog.
    In a curious promo, Egyptian pyramids are being used as an art element by cheerleaders for TelexFree, an alleged pyramid scheme. Source: ConventionTelexFree.com. Red highlight by PP Blog.

    U.S.-based TelexFree, alleged in Brazil to be a massive pyramid scheme, is serving up a heaping helping of strangeness.

    For starters, a promo for TelexFree’s International Convention set for Spain next month is being voiced by Sann Rogrigues, whom the SEC successfully sued in 2006 amid allegations he was operating a pyramid scheme and engaging in affinity fraud aimed at the Brazilian community.

    The promo curiously is playing against the backdrop of an image of the Pyramids of Giza. For good measure, images of other famous world landmarks are thrown in. These include St. Basil’s Cathedral (near the Kremlin) in Moscow; Big Ben in London; The Eiffel Tower in Paris; the Empire State Building and the Statue of Liberty in New York; the Leaning Tower of Pisa; and the Burj al Arab Hotel in Dubai.

    TelexFree operates out of Marlborough, Mass., and Las Vegas in the United States. Its convention is scheduled for March 1 and 2 in Madrid.

    The promo in which Rogrigues dispenses the TelexFree convention wisdom appears on a website styled ConventionTelexFree.com. Among the claims on the site is that American MLM lawyer Gerald P. Nehra will be among the “Special Guests” at the rah-rah fest in Spain.

    American MLM lawyer Gerald Nehra will be a special guest at TelexFree's International Convention in Madrid next month, according to ConventionTelexFree.com.
    American MLM lawyer Gerald Nehra will be a special guest at TelexFree’s International Convention in Madrid next month, according to ConventionTelexFree.com.

    Serving as an expert witness for AdSurfDaily in 2008, Nehra opined that ASD was not a Ponzi scheme. ASD operator Andy Bowdoin, now serving 78 months in federal prison at the age of 79, later disagreed with his own expert. In 2012, Bowdoin admitted that ASD was a Ponzi scheme that had gathered $119 million and said the “program” never operated lawfully from its inception in 2006.

    ASD promoted a return of 1 percent a day. Some TelexFree promoters say that “program” triples or quadruples money in a year. Some promos solicit sums of $15,125.

    Nehra’s law firm also was touted by Zeek Rewards. In 2012, Zeek was accused by the SEC of operating a massive international Ponzi- and pyramid scheme that gathered hundreds of millions of dollars by planting the seed that returns would average 1.5 percent a day. At least two Zeek figures potentially now face prison sentences after pleading guilty for their roles in the scheme.

    The court-appointed receiver in the Zeek case says he’s on the brink of filing lawsuits against thousands of Zeek promoters.

    TelexFree appears recently to have begun operating under the name TelexFree International. Precisely where TelexFree International is based is unclear.

    In the past, Nehra has described himself an an attorney for “TelexFREE in the USA,” according to BehindMLM.com. Whether he represents the TelexFree International derivative is unclear. Convention promoters, however, appear to believe he does.

     

  • Why California’s WCM777 Action May Spell Trouble For HYIP Promoters On You Tube

    As a reporter interviews a Peruvian official at the scene of a police raid against a WCM777 outlet, an image of American pitchman Harold Zapata flashes on the screen. Source: YouTube.
    As a reporter interviews a Peruvian official at the scene of a police raid against a WCM777 outlet in Lima, an image of American pitchman Harold Zapata (left) flashes on the screen. Source: YouTube.

    Still using social-media sites to promote massive fraud schemes — even after the AdSurfDaily, Zeek Rewards and Profitable Sunrise debacles?

    Thanks to his presence on social media, Harold Zapata, a WCM777 YouTube pitchman named a respondent in a Desist and Refrain order announced last month by California’s Department of Business Oversight, may be trapped between a rock and a hard place.

    Zapata is a California resident. Not only does the state know about his YouTube presence — indeed, his promos are referenced in the D&R — so do authorities in Peru. Whether Zapata ever has ventured to Peru is unclear. What is clear is that Peruvian media have used snippets of his U.S.-based promo as a backdrop to video reports about a police raid against a local WCM777 outlet in Lima.

    Whether he likes it or not, Zapata has become one of the American faces for WCM777.  In one video, Zapata identified himself as a WCM777 “director . . . working directly with our founder, CEO, chairmans [sic], leaders in our WCM777 organization.”

    WCM777 executives include Ming Xu and Zhi Liu, California said. Both men are named in the D&R. Zapata also is named.

    California’s action against WCM777, its executives and Zapata may signal trouble for other YouTube pitchmen for highly questionable MLM “programs” or outright scams. For starters, YouTube commercials for HYIPs sometimes are copied and used by promoters of the same purported “opportunity,” thus saving fellow pitchmen the time and trouble of making their own videos. This can happen with or without permission, perhaps with an eager recruit using the video of another sponsor but inserting a URL to the recruit’s page in a companion text pitch below the actual video.

    Beyond that, some fraud-scheme pitchmen openly share their YouTube promos with downline recruits as a means of driving more business to a scam. Such approaches typically are portrayed as the acts of a helpful sponsor who wants to see his or her recruits thrive by providing them the “tools” they need to succeed.

    At least one YouTube pitchman for WCM777 appears to be using Zapata’s video to drive traffic to WCM777 and possibly other “opportunities.”

    Zapata appears to have noticed this at least two months ago and placed warnings in Spanish and English on the YouTube site of the fellow WCM777 pitchman.

    Here’s how the warnings read (italics added):

    Por favor quite este video inmediatamente o me veo obligado a reportarte por infracción de copyright, de este video.

    Please remove this video immediately or I will be forced to report this video for copyright infringement.

    The video nevertheless remains. It shows Zapata pitching WCM777 in English, even after the California action and the raid in Peru. The title of the video on the fellow WCM777 pitchman’s site is “WCM777. FULL PRESENTATION IN ENGLISH.”

    It is unclear from Zapata’s warnings whether he was upset that the video was being used without his permission or whether he was concerned that the fellow WCM777 pitchman was using the video to cherry-pick Zapata’s earnings.

    Regardless of Zapata’s specific concerns, however, the continued appearance of the video shows the vulnerability of MLM pitchmen who promote “programs” on YouTube. Such promoters not only may lose control over their own content, they literally may lose control over their own faces.

    Even if Zapata has stopped promoting WCM777, the video published by the fellow WCM777 pitchman makes it appear as though Zapata still is promoting the purported opportunity, which California publicly declared a scam last month. Last week, the state asked residents who invested in WCM777 to contact the DBO immediately.

    At least 5,500 Californians plowed money into the WCM777 scam, the state said.

    “The California Department of Business Oversight has seen a surge of high-yield investment schemes that take advantage of social networks to market illegal investments,” said Jan Lynn Owen, commissioner of the Department of Business Oversight. (Bolding added by PP Blog.)

    In 2010, FINRA called the HYIP sphere a “bizarre substratum of the Internet” and issued a warning that such schemes were spreading on social-media sites such as YouTube, Facebook and Twitter. Zapata’s experience demonstrates that some HYIP pitchmen either missed the warning or chose to ignore it.

    BehindMLM.com is reporting that WCM777 — now operating as Kingdom777 — appears now to be engaging in ham-handed wordplay to continue its duping of the masses. The “program,” BehindMLM reports, now is using the word “members” and trying to steer clear of the word  “investors.”

    Such wordplay bids foreshadowed doom at both AdSurfDaily, a $120 million Ponzi scheme, and Zeek Rewards, which allegedly gathered at least $850 million.

    As the PP Blog reported in June 2012, here is part of what the U.S. Secret Service said in a filing in the ASD Ponzi-scheme case in February 2009 (italics’bolding added):

    [ASD operator Andy] Bowdoin and his sponsor knew that it was illegal to sell investment opportunities to thousands of individuals; thus, they were careful not to call participants “investors” but rather referred to them as “members.” Moreover, there were careful not to call payments to “members” “return on investments”; rather, they referred to the income program as a “rebate” program . . .

    The document cited above is available at the top this PPBlog story about the then-active Zeek Rewards Ponzi scheme: EDITORIAL: A Friday Evening In MLM Radio La-La Land. (Document courtesy of the ASD Updates Blog.)

    For whatever reason, HYIPs and their pitchmen apparently continue to believe they can duck or circumvent securities regulations and laws against the sale of unregistered securities by calling an investment something else.

    Prosecutors made short work of the Zeek and ASD wordplay, saying both “programs” engaged in linguistic games to describe an investment as something else.

    WCM777 even may dialing up the HYIP wordplay madness. From BehindMLM.com (italics added):

    A “dividend” [at WCM777/Kingdom777] is now a “bonus”… cuz well, a bonus could be anything… including an investment “return”, which is now also just a “bonus”.

  • Banners Broker Cultists Rip Play From Zeek, AdSurfDaily, AdViewGlobal HYIP Scambook

    YOU are being watched by Banners Broker: Source: Graphic published at RealScam.com
    Banners Broker members who log into their accounts are seeing this pop-up message: Source: Graphic published at RealScam.com

    Whoever is pulling the linguistic strings at the Banners Broker HYIP cult operating globally online now is channeling Zeek Rewards, AdSurfDaily and AdViewGlobal in their final days.

    Zeek, an $850 million Ponzi- and pyramid fraud that once suggested participants should change their toilet-paper dispensing habits if instructed to do so, threatened to ban members who didn’t stick to the company’s insidious, Stepfordian chant. It also planted the seed that it would use the courts to gag doubting voices and sue credit unions that dared to speak ill about its “program” that averaged a payout of 1.5 percent a day. And through proxies, Zeek made sure that other MLM companies and executives who’d dare question its outrageous claims knew that the Zeek eye in the sky was watching them.

    AdSurfDaily, a $119 million Ponzi scheme that promised to pay 1 percent a day, announced that it had filled a pot with $750,000 in cash and would sue critics for tens of millions of dollars. (The U.S. Feds were so moved by the claim that they made sure it was included in an evidence exhibit used to seize more than $80 million in ASD cash.) Prior to the seizure, ASD’s Stepfordian wing made sure that doubters knew their doubts would be reported by right-thinking loyalists to “ASD legal.” After the seizure, some of the ASDers planted the seed that any fellow member who filed a remissions claim through the U.S. Department of Justice would get sued by their fellow members.

    In 2009, after forming itself from the carcass of ASD’s MLM fraud scheme and on the brink of collapse itself, AdViewGlobal threatened to sue critics for purported copyright infringement. (Zeek, through purported “consultant” Robert Craddock, later would work the “infringement” gambit into its arsenal while planting the seed one or more Zeek lawyers would go after critics.)

    To cement its thuggery, AVG, a Zeek- and ASD-like 1-percent-a day “program” that gathered millions of dollars, said it was watching what members said about it online and planted the seed it would seek to have the Internet connections of in-house critics shut down. AVG bizarrely (and incongruously) did these things while purporting to have “protectors” in its ranks and while purporting to enjoy U.S. and Florida Constitutional speech and commerce protections from its purported base of operations in Uruguay.

    Now comes word that Banners Broker, an almost indescribably bizarre “program” whose online steroidal puppeteers have been stringing people along and picking pockets since at least 2012, has accidentally announced that it, too, has become a factory from which MLM thuggery is manufactured. Not only is Banners Broker watching members, the “program” says, its members also are watching members. The news first appeared on the RealScam.com antiscam forum.

    Banners Broker, of course, wants members of its cyberspace cult to remain in their Stepfordian trances and not to notice they’re being manipulated like robots, so it has given its strong-arm bid an innocuous (if not wholesome-sounding) name: “Community Watch.”

    Ready to projectile vomit?

    Given the monitoring policy, individual members who’ve posted negative content should remove it, the “program” instructs. And members who observe other members posting negative content should contact the doubters and provide a copy of the “program’s” policy that bans negativity and threatens management-led account seizures.

    On Feb. 12, Banners Broker will begin to take “a firmer stance against people that are speaking badly against Banners Broker,” the “program” bizarrely bleats.

    “Affiliates found to be contributing to the negativity on the Internet will have their accounts locked,” the “program” threatens. “[T]hey will be banned from participating in the Banners Broker system and they will forfeit all of their inventory and revenue.”

    Banners Broker appears also to be trying to chill nonmember critics.

    “If you know of a site with content that is negative towards Banners Broker, we ask that you report it to the Community Watch,” the “program” instructs.

    In June 2012, the PP Blog reported that a website selling “customers” to Zeek recruiters also was directing traffic to double-your-money Banners Broker and the 2-percent-a-day (precompounding) JSSTripler/JustBeenPaid HYIP scam purportedly operated by Frederick Mann.

    On Jan. 17, 2013, the PP Blog reported it was receiving menacing communications about Banners Broker.

    For additional background on bids to chill reporters or program members who publish information about scams and highly questionable “opportunities,” see this Dec. 27, 2012, PP Blog post: Our Choice For The Most Important PP Blog Post Of 2012.

     

  • MORE FROM MLM LA-LA LAND: Former SEC Defendant In Pyramid-Scheme And Affinity-Fraud Case To Headline TelexFree Event In Spain

    Former SEC defendant Sann Rodrigues will be a headliner at a TelexFree event scheduled next month in Spain. Source: TelexFree rolling promo on website.
    Sann Rodrigues (right) will be a headliner at a TelexFree event scheduled next month in Spain. Source: TelexFree rolling promo on website.

    Calling Sann Rodrigues its “TOP PROMOTER IN THE WORLD,” the alleged TelexFree pyramid scheme curiously has announced that Rodrigues will be a headliner at a TelexFree rah-rah session in Spain on March 1 and 2.

    An image of Rodrigues now rolls across TelexFree’s website. But the promo does not mention that Rodrigues was successfully sued by the U.S. Securities and Exchange Commission in federal court in Massachusetts in 2006. The agency alleged that he was presiding over a pyramid scheme known as FoneClub and engaging in affinity fraud targeted at the Brazilian and Brazilian-American communities in Massachusetts.

    A federal judge held Rodrigues, also known as Sanderley R. De Vasconcelos, “jointly and severally liable” with FoneClub for “$3,269,459 in disgorgement plus $151,928.49 in prejudgment interest,” the SEC said in 2007.

    Prosecutors in Brazil have alleged that TelexFree is a massive pyramid scheme. The purported “opportunity” operates from Massachusetts, the same venue from which Rodrigues was sued by the SEC.

    Massachusetts also was the venue from which the U.S. government brought a successful criminal prosecution against the infamous World Marketing Direct Selling (WMDS) and OneUniverseOnline (1UOL) pyramid- and affinity-fraud scheme targeted at Cambodian immigrants. The SEC also filed suit.

    In the AdSurfDaily Ponzi-scheme case in 2008, the U.S. Secret Service alleged that neither ASD nor a business partner disclosed that the partner had been an SEC defendant in a successful 1997 prosecution that alleged the partner had pitched three prime-bank swindles, including one that advertised a return of 10,000 percent.

    ASD was a $119 million Ponzi scheme targeted in part at the Christian community, federal prosecutors alleged.

    In the $850 million Zeek Rewards’ Ponzi- and pyramid scheme in 2012, former SEC defendant Keith Laggos emerged as a key cheerleader. Laggos was sued by the SEC in 2004 in a case that alleged he didn’t disclose he was being paid to tout stock.

  • Websites For WCM777 And Kingdom777 ‘Unavailable’

    UPDATED 12:08 P.M. ET (U.S.A.) The WCM777 and Kingdom777 websites appear to be back online. Our earlier story is below . . .

    _______________________________

    Websites linked to WCM777 and Kingdom777 are showing a “Service Unavailable” message this morning. The precise reason why is unclear.

    WCM777 now operates as Kingdom777. California securities regulators have called WCM777 an “investment scam” that gathered at least $20 million. California, Colorado and Massachusetts have banned the “program.” Louisiana and New Hampshire have issued Investor Alerts.

    The province of New Brunswick in Canada also has issued an Investor Alert.

    Ming Xu has been identified in securities actions as the operator of WCM777. Some promoters have called him Dr. Phil Ming Xu and Dr. Philip Ming — or just plain Dr. Phil. At a business event in California last year, Ming Xu was photographed alongside former U.S. Vice President Al Gore and Apple co-founder Steve Wozniak.

    Some MLM scams try to gain a head of steam by associating themselves with famous politicians, famous people and famous businesses. Promos for WCM777 have sought to tie to firm to several famous companies.

    A Twitter account in the name of Dr. Phil Ming Xu says this this morning: “You have not shut me up into the hand of the enemy. You have set my feet in a large place.”

    A Jan. 27 Tweet said this: “Though an army should encamp against me, my heart shall not fear. Though war should rise against me, even then I will be confident.”

    Meanwhile, a Jan. 25 Tweet said this: “Confidence in someone unfaithful in time of trouble is like a bad tooth, or a lame foot.”

    Based on promos that have appeared online, it is possible that individual WCM777 sponsors were accepting wire transfers from their recruits and then somehow forwarding the money to WCM777, which reportedly has a presence in Hong Kong and the British Virgin Islands.

    Circuitous flow of cash is a key marker of scams and may signal money-laundering or other crimes are occurring.

    Please use the PP Blog’s search function near the upper-right corner to find more information on WCM777.

  • UPDATES: (1) Colorado Boots WCM777; (2) California Didn’t Have To Look Far To Find ‘Program’: State Has Office In Same Building From Which Alleged Multimillion-Dollar Securities Scam Operated

    From the Colorado C&D against the WCM777 MLM "program."
    From the Colorado C&D against the WCM777 MLM “program.”

    UPDATED 6:33 P.M. ET (U.S.A.) The state of Colorado has issued a cease-and-desist order against the WCM777 “program,” saying the Ming Xu-led enterprise was selling unregistered securities.

    Ming Xu also is known as Dr. Phil Ming Xu, according to WCM777 promoters.

    In issuing the C&D, Colorado now has joined at least two other U.S. states in banning WCM777. The other states are California and Massachusetts. Louisiana has issued an Investor Alert. (Edit 6:33 p.m. New Hampshire also has issued an Investor Alert on WCM777.)

    California has alleged that WCM777 gathered at least $20 million.

    Gerald Rome, Colorado’s acting securities commissioner, announced his state’s ban on Jan. 21. Paperwork is here. Ming Xu consented to the action without admitting or denying wrongdoing.

    From a statement by Rome’s office (italics added):

    Named in the Order are World Capital Markets, Inc., WCM777, Inc., and their founder and chairman, Ming Xu, all of Pasadena, California.

    The Staff of the Division of Securities (the “Staff”) alleged that World Capital sought Colorado investors through websites, webinars, and live presentations to purchase packages that allow the purchaser to access World Capital’s cloud media services and earn commissions or profits with advertised returns of more than 90%. The program operated much like a multi-level marketing program where purchasers received bonuses for referrals, purchase of stock options, and other bonuses based on how many referrals obtained by a purchaser.

    The Staff alleged that World Capital failed to register either security offering and, by offering the investment opportunity to the public at large by soliciting on the internet, World Capital violated the registration provisions under the Act.

    Meanwhile, it turns out that California didn’t have to venture too far to find WCM777.

    The WCM777 MLM scam was operating from Suite 900 at 150 S. Los Robles Ave., according to a Desist and Refrain Order the state issued last week.

    But the state itself has an office in the same building. The Pasadena branch of the California Department of Rehabilitation occupies suite 300, according to the DOR’s website. The agency says it “administers the largest vocational rehabilitation program in the country.”

  • BULLETIN: California Calls WCM777 A ‘Scam,’ Issues Desist And Refrain Order That Names Executives And YouTube Pitchman

    From the California order announced last week on the state's website.
    From the California order announced last week on the state’s website.
    From a Consumer Alert issued by the California Department of Business Oversight. (Red highlight by PP Blog.)
    From a Consumer Alert issued by the California Department of Business Oversight. (Red highlight by PP Blog.)

    BULLETIN: (Updated 10:36 a.m. ET U.S.A.) The state of California has called the WCM777 MLM “program” a “scam” and issued a Desist and Refrain Order that bans the enterprise in the state. The Department of Business Oversight (DBO) has issued a companion Consumer Alert and is “strongly” encouraging California investors to file a formal complaint.

    Named in the Jan. 8 order announced late last week on the state’s website are WCM777 executives Ming Xu and Zhi Liu. Harold Zapata, an alleged WCM777 YouTube pitchman with an address in Hanford, Calif., also is named in the order. Corporate entities named in the order include World Capital Market Inc., WCM777 Inc. and WCM777 Limited, all of Pasadena.

    Zapata, California alleged, identified himself as “CEO at WCM777 Global Stars,” something that suggests he was the leader of an upline group. On July 15, 2010, the PP Blog reported that FINRA warned the investing public about scams that spread on social-media sites such as YouTube,  Facebook and Twitter.

    WCM777 was targeted at people of faith and members of minority communities. California investors can file a complaint by dialing 866-275-2677, the state said.

    In November, the state of Massachusetts accused WCM777 of selling unregistered securities.

    California now has done the same thing.

    “The WCM777 membership units offered and sold by Respondents constitute securities,” the state charged.

    And, it alleged, “Respondents offered and sold securities by means of written and oral communications which included untrue statements of material fact and which omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.”

    WCM777 now is operating as Kingdom777, and has been associated with a series of bizarre events. On Jan. 17 via Twitter, the “program” issued a declaration of love to the people of Peru after a police raid on a WCM777 outlet there. The announcement was attributed to “Dr. Phil Ming Xu” and claimed the enterprise now “has a promotion plan with a payout ratio of 130%.”

    In issuing the announcement, WCM777 appeared to be ignoring the securities issues altogether. California publicly announced the order six days later, on Jan. 23. The California order is dated Jan. 8. A day earlier, on Jan. 7, WCM777 published an announcement of the name change to Kingdom777, claiming “Kingdom777 has acquired the assets of WCM777.”

    As is typical in HYIP scams, the announcement blamed affiliates for WCM777’s woes.

    “Some members failed to represent WCM777 correctly and distorted our vision and mission to be a social capital company whose goal is to build a global community of trust and love,” the new company said.

    But California’s order, which in part echoes suggestions in Massachusetts that WCM777 was steering recruits to avoid lower levels of buy-in in favor of the highest level of $1,999, makes it clear that the state viewed WCM777 itself as a fraud.

    From the California order (italics/bolding added):

    9. The most expensive and, by far, the most popular WCM777 membership unit costs $1,999. The $1,999 membership unit provides the purchaser five years of access to WCM777’s alleged online cloud services. In addition, WCM777 claims that a purchaser of the $1,999 membership unit will receive up to $32 per day over a 100-day period in the form of profit-sharing payments, bonuses and commissions. Thus, over a 100-day period, a purchaser of the $1,999 membership unit would allegedly earn $1,200 more than the original cost of the unit—an alleged 60% return in only 100 days.

    10. The vast majority of purchasers buy the five year unit, rather than the less expensive units that generate lesser returns. In fact, over 95% of purchasers in the United States bought the $1,999 membership unit.

    11. There is no limit to how manyWCM777 membership units an individual may purchase at one time. In fact, a significant number of purchasers buy multiple WCM777 membership units at the same time.

    12. After the purchaser’s 100-day daily returns cycle expires, the purchaser may “re-up” by purchasing another membership unit at a 50% discount, which then restarts the 100-day cycle. A purchaser can “re-up” indefinitely. Therefore, over a 300-day span, a purchaser of a single $1,999 WCM777 membership unit who “re-ups” at the end of each 100-day cycle would allegedly earn up to $5,600 more than the cost of buying the membership units—an alleged 140% return in about 10 months.

    Precisely how California learned that 95 percent of U.S. purchasers allegedly bought in at the maximum level of $1,999 is unclear. What is clear is that the state has accused WCM777 of engaging in a rank deception and gathering at least $20 million between March 2013 and September 2013.

    Among WCM777’s fraudulent claims was that the “Respondents’ activities were not subject to the jurisdiction of the United States Securities & Exchange Commission or the United States Federal Trade Commission,” California alleged.

    Moreover, the state claimed that the respondents failed “to disclose that WCM777 had no other significant sources of income but for its sale of membership units.” Meanwhile, they failed to disclose “that WCM777 did not have an enforceable contract with Siemens under which Siemens would provide the alleged online cloud services that WCM777 advertised.” (See Oct. 30, 2013, PP Blog story, which reports on the issue with Siemens and notes that WCM777 was being targeted at a Latino church in Rialto, Calif.)

    Siemens, the state said in its order, “has publicly disavowed any relationship or contract with WCM777. In a press release, Siemens stated that it disavowed a relationship with WCM777 “[i]n order to help . . . investors avoid making any investments based on false assumptions[.]”

    And despite claims by the respondents that “WCM777’s alleged daily returns are backed by the global banking business of its parent company, WCM,” the state charged, “WCM777 and WCM had no significant income outside of sales of WCM777 membership units.

    “From March 2013 to the end of September 2013, WCM777 and WCM generated over $20 million in sales of WCM777 membership units,” the state alleged. “During the same period, over 99% of the income of WCM777 and WCM came from sales of WCM777 membership units, while less than 1% of their income came from WCM’s alleged global ‘merchant banking’ or any other business.”

    Some WCM777 promoters have claimed that the WCM enterprise had handed out more than $1 billion in loans. In a bizarre example of MLM hucksterism, the promoters identified several companies that allegedly had borrowed great sums from WCM — and even how much the firms purportedly had borrowed.

    News of the California order first was reported today by BehindMLM.com.

    Visit California’s website. Read the Desist and Refrain Order.

  • UPDATE: Dallas Group May Be Trying To Port WCM777 Members To Lucrazon

    recommendedreading1The PP Blog has received information that suggests a WCM777 group in Greater Dallas may be trying to port members to Lucrazon, a purported revenue-sharing “program.”

    WCM777 now is known as Kingdom777.

    “Same team leaders want to encourage us to invest $8000.00 and we can get 15 units and they said that it will be similar to kingdom777,” a source told the Blog. “In other words they see us as uneducated people who have excavated money from underground or group of dumb people who will trust them again. Believe me that amount of people who invested are already falling for it.”

    It is common for “revenue-sharing” promoters in the MLM sphere to try to switch downline members from one scheme to another. Zeek Rewards and AdSurfDaily — both massive Ponzi schemes — are examples of MLM “programs” pitched as revenue-sharing “opportunities.”

    Read Lucrazon review at BehindMLM.com.

    From BehindMLM (italics added):

    The issue with Lucrazon’s MLM business model is the basic mechanic of new affiliate money flowing in at $1000 a pop and being paid out to those who have already paid $1000 a pop for “positions”.

    WCM777 is targeting people of faith. Promoters appear to be targeting Brazilians, Brazilian-Americans, members of the U.S. Latino community and Latinos at large, Asian-Americans and Asians in general.

    Separately, the PP Blog received information today that suggests WCM777 also has a presence in Canada. A person who emailed the PP Blog said a loved one had plowed $8,000 into the WCM777 scheme.

    The “payout stopped, she was never able to withdraw,” the sender said.

    The sender was contemplating reporting WCM777 to the Royal Canadian Mounted Police, according to the email.

    In November, securities regulators in Massachusetts accused the “program” of selling unregistered securities. The WCM777 scheme also is under investigation in Peru and Colombia.

    Meanwhile, a source told the PP Blog today that something called KingdomTrade.org is being discussed in WCM777/Kingdom777 circles.

    “They claim they will also be trading Oil, [G]ems, Gold and Art as well as Stock/Options in Kingdom777,” the source said.

     

  • Will Portugal Be Next Country To Open TelexFree Probe?

    In 2013, Carlos Costa displayed the flag of Madeira while announcing TelexFree was seeking bankruptcy protection.
    In 2013, Carlos Costa displayed the flag of Madeira while announcing TelexFree was seeking bankruptcy protection.

    Citing reports in Brazilian media, BehindMLM.com is reporting that authorities in Portugal are monitoring TelexFree developments and beginning to collect documents. The development may signal that yet-another probe into TelexFree’s business practices is in the offing, potentially the first in Europe.

    From BehindMLM.com (italics added):

    According to the local media there are currently 41,000 TelexFree affiliate investors in Madeira, an autonomous region in Portugal. This figure represents 16% of the island’s total population.

    In September 2013, the PP Blog reported that TelexFree executive Carlos Costa appeared in a video that showed him waving the flags of Madeira and Portugal. Precisely why he chose to wave the flags is unclear. The context of the video was a decision by TelexFree to seek bankruptcy protection in Brazil.

    TelexFree, which operates through Ympactus Comercial Ltd. in Brazil, has been under fire in that country since at least June 2013, amid allegations is is conducting a massive pyramid scheme. There may be hundreds of thousands of TelexFree affiliates worldwide. TelexFree has U.S. arms in Massachusetts and Nevada.

    TelexFree’s early operations appear to have been centered in Brazil. Some U.S. affiliates have claimed a payment of $15,125 to the firm returns $57,200 in a year and that members get paid for posting ads for TelexFree online.

     

  • UPDATE: In Aftermath Of Police Raid On WCM777 Venue In Peru, ‘Dr. Phil Ming Xu’ Declares Love For The People — On Letterhead Of Suspended California Company

    wcm777peruletterThings are getting stranger at WCM777: After a police raid this week on the “program” in Peru, the purported head of WCM777 has declared his love for the Peruvian people — on the letterhead of World Capital Market, a California corporation listed as “suspended.”

    The letter, which is dated today and appears on Twitter, did not say whether WCM777 would provide defense lawyers for any arrestees or subjects of investigations in Peru.

    WCM777, an arm of World Capital Market, is under investigation in multiple countries. In November 2013, the firm was accused by the state of Massachusetts of selling unregistered securities. Hotel presentations in Massachusetts allegedly were targeted at Brazilian-Americans.

    In the United States and elsewhere, claims have appeared that $14,000 sent to WCM777 returns $500,000 in a year.

    As part of a Twitter declaration of love to Peruvians, “Dr. Phil Ming Xu” noted that WCM777 “wants to united [sic] people and build a global community of trust and love.”

    And, according to the Tweet, WCM777 “has a promotion plan with a payout ratio of 130% for a limited time to sell our seven cloud products” and has stopped “our promotion plan with a payout ration [sic]  [of] about 50%.”

    The Ming Xu letter to Peruvians claimed the company “is willing to back” the 130 percent scheme, but appears to ignore the issue of offering unregistered securities.

    WCM777, now reportedly known as Kingdom777, has been targeted at people of faith in the United States and other countries.

    In a Jan. 16 Twitter post, Dr. Phil Ming Xu noted, “When 4 blood moons are on the sky in this April, people will understand what we are doing.”

    Some people believe the world will end in April. It’s unclear if Ming Xu is in the end-of-the-world camp.