PatrickPretty.com

Category: Writing And Branding

  • FEDS: Man Tried To Scam Zuckerberg, Facebook Out Of Billions ‘By Marching Into Federal Court For A Quick Payday Based On A Blatant Forgery’

    A New York man tried to scam Mark Zuckerberg and Facebook out of billions of dollars by forging documents and filing a lawsuit to make it appear as though Zuckerberg had promised him a 50 percent share of the company, prosecutors said.

    Paul Ceglia, 39, of Wellsville, was arrested this morning after an investigation by the U.S. Postal Inspection Service, prosecutors said.

    “As alleged, by marching into federal court for a quick payday based on a blatant forgery, Paul Ceglia has bought himself another day in federal court for attempting a multibillion dollar fraud against Facebook and its CEO,” said U.S. Attorney Preet Bharara of the Southern District of New York. “Ceglia’s alleged conduct not only constitutes a massive fraud attempt, but also an attempted corruption of our legal system through the manufacture of false evidence. That is always intolerable. Dressing up a fraud as a lawsuit does not immunize you from prosecution.”

    When Zuckerberg was a Harvard student in 2003, prosecutors said, Ceglia contracted with him to do programming work for Ceglia and Ceglia’s StreetFax.com.

    Ceglia later claimed in lawsuits that Zuckerberg “had promised him at least a 50% interest in ‘The Face Book’ project that ultimately became Facebook Inc.,” prosecutors said.

    In reality, prosecutors said, Ceglia “doctored, fabricated, and destroyed evidence to support his false claim.”

    From a statement by prosecutors (italics added):

    “In support of his claim, [Ceglia] attached a copy of what he alleged to be the two-page April 28, 2003 contract between himself and Zuckerberg (“Alleged Contract”). The first page of the Alleged Contract contained language giving [Ceglia] “a half interest (50%) in the software, programming language and business interests” derived from the expansion of “The Face Book” or “The Page Book.” The second page of the Alleged Contract contained the signatures of [Ceglia] and Zuckerberg. Also in support of his claim, [Ceglia] described emails he alleged to have exchanged with Zuckerberg between July 2003 and July 2004 via Zuckerberg’s Harvard email account (“Purported Emails”). The Purported Emails reflected conversations between [Ceglia] and Zuckerberg about the design and functionality of “The Face Book” website, as well as ways to generate income from its expansion. The Purported Emails also reflected conversations in which Zuckerberg offered [Ceglia] money to “repair [their] business relationship.”

    As alleged in the Complaint, however, [Ceglia’s] claim to having a contractual right to 50% of Facebook was entirely false. [Ceglia] simply replaced page one of the real contract with a new page one doctored to make it appear as though Zuckerberg had agreed to provide [Ceglia] with an interest in Facebook. And [Ceglia] doctored, fabricated and destroyed evidence to support his false claim. The evidence demonstrating [Ceglia’s] lawsuit is a fraud included the following:

    • A search of one of [Ceglia’s] hard drives uncovered a copy of the real April 28, 2003 contract, which [Ceglia] had emailed to an attorney in March 2004, years before his lawsuit against Facebook and Zuckerberg (“Real Contract”). Page one of the Real Contract does not refer to Facebook in any fashion, let alone give[Ceglia] a 50% interest in it.
    • The spacing, columns, and margins of page one of the Alleged Contract are different from the spacing, columns, and margins of page two of the Alleged Contract. No such differences exist as between the pages of the Real Contract.
    • A review of Harvard University’s email servers reveals that none of the Purported Emails appears in Zuckerberg’s email account as of February 2012. Further, none of the Purported Emails appears in Harvard’s backup tapes for Zuckerberg’s emails as they existed in October 2010, nor do any of the Purported Emails appear in Harvard’s backup tapes for Zuckerberg’s emails as they existed in November 2003. The emails between Zuckerberg and [Ceglia] that do exist in Zuckerberg’s email account do not show any discussion of Facebook and, contrary to [Ceglia’s] claim, show that Zuckerberg was asking [Ceglia] for money he was owed in 2004, not offering to give [Ceglia] money.
    • A forensic expert examined [Ceglia’s] hard drives and other electronic media and found evidence that in February 2011, [Ceglia] deleted files relating to the April 2003 contract with Zuckerberg and replaced them with new files that supported his lawsuit but that were backdated to make it appear as if those the files had in fact been created in 2003 and 2004. Further, a CD Rom revealed that [Ceglia] had done test runs on fabricating some of the documents, including the Purported Emails, upon which his lawsuit relied.
    • Zuckerberg and another of Facebook’s founders have said that the idea for Facebook did not arise until months after the April 2003 contract purportedly giving [Ceglia] an interest in Facebook.

    Ceglia was charged with mail fraud and wire fraud, prosecutors said.

  • $250 Million-Plus Ponzi ‘Arbitrage’ Scheme In South Africa Allegedly Led To Murder/Suicide; A ‘Tangled Web Of Close Corporations, Trusts And Offshore Bank Accounts’

    MoneyWeb has the story of Relative Value Arbitrage Fund (RVAF), an alleged massive Ponzi scheme in South Africa in which Herman Pretorius shot and killed a business partner in July and then shot and killed himself.

    The scheme appears to have gathered R2.2bn, the equivalent of more than $250 million (U.S.).

    From Julius Cobbett at MoneyWeb (italics/bolding added):

    RVAF curators estimate that the scheme received R2.2bn from about 3000 investors. At the time of Pretorius’s death, the RVAF owed an estimated R3.1bn to investors.

    The difference between the amount received and owing is most likely explained by the fund’s performance, which is believed to be fictitious.

    Investigations following Pretorius’s death show that he alone was in control of a tangled web of companies, close corporations, trusts and offshore bank accounts.

    Read the MoneyWeb story.

    NOTE BY PP BLOG: Some scammers on Ponzi-scheme forums also purport to engage in “arbitrage.” The collapse of purported arbitrage “program” Gold Nugget Invest (GNI) in 2010 brought out the “conspiracy theorists,” the PP Blog reported at the time.

    Among the bizarre assertions was that the SEC was under investigation by INTERPOL.

    It is common for Ponzi-board scammers to use terms that sound impressive — arbitrage, for instance — in their scams.

    “Ken Russo,” a former Ponzi-board pitchman for the alleged Zeek Rewards Ponzi scheme, was promoting something called “NewGNI” even as he was promoting Zeek, according to his posts at the TalkGold Ponzi forum (as “DRdave”).

    NewGNI may be a follow-up scam to the GNI scam.

    Read a January 2010 PP Blog story on some of the bizarre claims surrounding the collapse of GNI, a scheme also pushed by some members of the AdSurfDaily Ponzi scheme.

  • BULLETIN: International Scammers Used Mail Drops, 80 Different Domains And 130 Phone Numbers To Dupe People Into Paying For ‘Removal Of Bogus Viruses And Non-Existent Spyware, FTC Says

    BULLETIN: Calling it a “major international crackdown on tech support scams,” the FTC has charged multiple companies and individuals in an alleged fraud scheme in which consumers were duped into believing their computers were infected with “viruses, spyware and other malware” and then charged to remove it.

    To cover their tracks, the FTC charged, the scammers used “virtual offices that were actually just mail-forwarding facilities and “80 different domain names and 130 different phone numbers.”

    “And the tech support scam artists we are talking about today have taken scareware to a whole other level of virtual mayhem,”said FTC Chairman Jon Leibowitz.

    From an FTC statement today (italics added):

    The FTC charged that the operations – mostly based in India – target English-speaking consumers in the United States, Canada, Australia, Ireland, New Zealand, and the U.K. According to the FTC, five of the six used telemarketing boiler rooms to call consumers. The sixth lured consumers by placing ads with Google which appeared when consumers searched for their computer company’s tech support telephone number.

    According to the FTC, after getting the consumers on the phone, the telemarketers allegedly claimed they were affiliated with legitimate companies, including Dell, Microsoft, McAfee, and Norton, and told consumers they had detected malware that posed an imminent threat to their computers. To demonstrate the need for immediate help, the scammers directed consumers to a utility area of their computer and falsely claimed that it demonstrated that the computer was infected. The scammers then offered to rid the computer of malware for fees ranging from $49 to $450. When consumers agreed to pay the fee for fixing the “problems,” the telemarketers directed them to a website to enter a code or download a software program that allowed the scammers remote access to the consumers’ computers. Once the telemarketers took control of the consumers’ computers, they “removed” the non-existent malware and downloaded otherwise free programs.

    The scam was targeted at “English-speaking consumers in the United States, Canada, Australia, Ireland, New Zealand, and the U.K,” the FTC said.

    Assisting in the cross-border probe were the Australian Communications and Media Authority (ACMA), the Canadian Radio-television and Telecommunications Commission (CRTC) and the United Kingdom’s Serious Organised Crime Agency, the FTC said.

    All in all, the FTC filed six complaints in the Southern District of New York. The named corporate defendants include Pecon Software Ltd., Finmaestros LLC,  Zeal IT Solutions Pvt. Ltd., Virtual PC Solutions, Lakshmi Infosoul Services Pvt. Ltd., and PCCare247 Inc.

    Visit the FTC site to read the agency’s full statement and to access the complaints.

  • Florida Recidivist Swindler John A. Mattera Pleads Guilty In Fraud Scheme That Traded On Names Of Facebook And Groupon

    John Mattera: Source: Mattera Foundation Nov. 2. 2011, news release.

    John A. Mattera, the recidivist Boca Raton swindler who was charged civilly and criminally last year in a new caper, has pleaded guilty to one count of securities fraud, one count of wire fraud and one count of conspiracy to commit securities fraud and wire fraud, federal prosecutors said.

    He potentially faces decades in prison.

    Mattera, 50, was charged last year by the SEC and the office of U.S. Attorney Preet Bharara of the Southern District of New York with duping investors into believing his purported hedge fund had the inside track on shares of Facebook and Groupon in advance of the IPOs.

    The purported fund had the high-sounding name of “The Praetorian Global Fund,” investigators said.

    “With false promises of profitable investments in high-profile stock, John Mattera lured unsuspecting investors into a meticulously orchestrated, multi-million dollar fraud scheme, and used their money to fund his lavish lifestyle,” Bharara said.

    Investors plowed millions of dollars into the scheme, believing their money would be held in “escrow” at a Florida bank and that they’d have an advantage because Mattera held the key to higher Facebook and Groupon profits when the companies went public, prosecutors said.

    “However, instead of maintaining the investor money in the escrow accounts as Mattera promised, Mattera caused the vast majority of the funds to be transferred to other entities with which he was associated,” prosecutors said.  “Ultimately, Mattera misappropriated approximately $13 million of investor money, spending nearly $4 million on personal items for himself and his family, such as expensive jewelry, interior decorating and luxury cars.”

    And, prosecutors noted, “neither Mattera, Praetorian nor the G Power Entities held these shares of stock.”

    Mattera pleaded guilty in 2003 to seven counts of grand theft in three separate Florida criminal cases, according to court records. Among other things, “Mattera stole $34,000 from two Florida investors by promising to provide them with shares of stock that Mattera falsely represented he owned,” the SEC said of the 2003 cases.

    In 2009, the SEC charged Mattera “with fraudulently attempting to avoid registration requirements by backdating promissory notes to obtain improperly unrestricted shares of a company,” according to the agency.

    Despite his history of engineering fraud schemes, Mattera positioned himself as a community volunteer and head of a foundation, rubbing elbows with the American Red Cross and Florida’s elite in the days and months leading up to his most recent scam.

     

  • EDITORIAL: On Threats, Reporting On An Unprecedented Crime Wave — And A Disappearing Cloud Tag In The Age Of Epic White-Collar Fraud

    EDITOR’S NOTE: On Friday, the PP Blog was informed by the Washington State Department of Financial Institutions that it wanted the Blog to remove its “tag.”

    This editorial describes the PP Blog’s thoughts on the matter.

    ** _____ **

    Containing HYIP fraud schemes and online crime in the Information Age is a daunting challenge. There definitely is an element of whack-a-mole. As soon as law enforcement takes action against one scheme, a new one rises to replace it. The schemes often operate across borders, making the challenge even more daunting.

    There can be no doubt that these schemes pose a threat to both economic security and national and international security. The mass marketing of criminal schemes is a recipe for anarchy and puts the legitimate marketplace at risk.

    If you’re a reporter or Blogger covering online fraud schemes, it’s a safe bet your site soon will be lined with “comments” in “support” of the schemes. Once you wrap your brain around the mind-bending reality that Ponzi schemes actually have “defenders,” you shouldn’t be surprised if you end up spending more time performing maintenance chores on your site and less time reporting on scams.

    That’s exactly what the scammers want, of course. And they might not stop with simple distractions.

    Some of the chores will be garden-variety — pruning spam and sales pitches for follow-up- scams, for instance. It will be some of the most disingenuous drivel you’ll ever read. You perhaps will notice right away that the “offers” for the emerging “program” will be very similar to the “offers” for the just-collapsed “program” — and that the emerging “program” itself will be very similar to the just-collapsed “program.”

    But if your site has been around long enough — and the PP Blog has been around long enough — you perhaps will notice that some of the “comments” you receive will be deeply disturbing and will go far beyond an amateur bid to sanitize a fraud scheme as a legitimate business.

    Some individuals “defending” a scam will use menacing language. Their would-be “comments” will include direct or veiled threats. Some of them will plant the seed that somebody might just die if you keep reporting on fraud schemes. That “somebody” just might be you or a family member, they’ll imply. Sometimes they’ll state it plainly.

    Last month the PP Blog reported two specific threats to the U.S. law-enforcement agency that handles such things. These threats weren’t directed at me. Rather, individuals who tried to post here directed them at others.

    For security reasons, I won’t get into the details about who was threatened and what was said. In a general sense, I’ll say that it’s not very smart to use this Blog in a bid to convey threats.

    And it is foolish beyond measure to plant the seed that you’re the type of person who might be involved with a group that’s talking about carrying out political assassinations — you know, because you perceive the individuals you reference in your would-be posts to be enemies of what you view as “free enterprise” and what people who understand mathematics and serialized criminality view as five-alarm fraud schemes.

    This Blog operates in a constant environment of threats. Regardless, it tries not to complain too much about things that go on behind the scenes. The news is that scammers are using the Internet to plunder residents of town after town, city after city, country after country. Our focus is to bring to public attention the greatest white-collar fraud epidemic in history. Some of the stories wouldn’t sell as fiction because they require the suspension of too much disbelief — but they nevertheless are very, very real.

    Now, to the purpose of this post . . .

    This Blog is widely read by law enforcement, which uses it for the purposes of research. One of the most important parts of the Blog is its cloud tags. The Blog uses a WordPress widget that tracks certain keywords. The more mentions a certain keyword gets, the greater its size becomes in our sidebar widget. The graphic (above/left) is a screen shot of our cloud tags as they exist today in the sidebar.

    By looking at the screen shot, you’ll see that, as of today, electronic Ponzi schemer Andy Bowdoin has been referenced on the PP Blog more than brick-and-mortar Ponzi schemer Bernard Madoff. You’ll also see the name of Kenneth Wayne Leaming, the Washington state resident and purported “sovereign citizen” now jailed at a federal facility near Seattle on charges of targeting public officials in harassment campaigns.

    You’ll also see that law-enforcement agencies get prominent play on this Blog. As of the time of this post, if a reader clicks on the tag for the SEC, they’ll see what is depicted in the screen shot directly below. (Editorial continues below screen shot.)

    The tags — along with the Blog’s search form — put a lot of information in a common area. As of today, the PP Blog has an archive that includes nearly 1,800 stories. Hundreds and hundreds of thousands of words appear on the Blog, along with thousands of links to information sources both internal and external. Tags and the search function help readers get to what they want to see faster.

    In no small measure, the tags and the text snippets and included links tell the story of these very troubled times — and what law enforcement is doing to restore order after the U.S. capital markets almost tanked in 2008. This Blog has used WordPress for nearly four years. Never once has it received a complaint about its tags.

    Until Friday.

    Today I am reluctantly reporting that a regulatory agency that should know better and apparently understands neither WordPress nor the Internet in the era of epic white-collar fraud contacted the PP Blog and asked that its tag be removed.

    I could hardly believe my eyes.

    “This blog is not the DFI archives nor is it affiliated with the Washington State regulatory agency the Department of Financial Institutions,” the Washington State Department of Financial Institutions wrote on Friday. “You are welcome to link to items from our site, but the statement currently on your blog page is misleading.”

    And just what allegedly was “misleading?” Why, our single-entry tag for the Washington State Department of Financial Institutions (DFI). DFI apparently believes the Blog’s automatically generated tag line that reads “You are browsing the archives of ‘Washington State Department of Financial Institutions’” could cause readers to mistakenly conclude they are on DFI’s website, not the PP Blog.

    DFI got a mention on the PP Blog on Thursday, and we created a tag for the agency. The CFTC, which stressed cooperation among agencies when it announced the case against an alleged $53 million Forex fraud operating across national borders, thanked DFI and several other agencies (both domestic and international) for their cooperation. We thought that noteworthy, so we referenced all of the agencies in our story.

    But our tag on DFI is “misleading,” the agency says.

    “Please remove the info-box on your site,” the agency says.

    Friends, I have to tell you that I was stunned. Both individuals and criminal organizations are stealing money by the tens of millions now. As Gregg Evans has pointed out repeatedly, traditional bank robbery with guns and masked intruders is largely going out of style because it’s “safer” to steal even greater sums of money on the Internet.

    This Blog exists to expose that fraud. It is here 24/7/365, and it is sustained only by the goodwill of small handful of individuals. The Blog is hanging by a prayer — even as criminals send taunts and menacing communications and threats.

    We are honored that the law-enforcement community comes here constantly to read about what’s going on “out there” during these deeply troubling times. The threat to law and order never has been greater. “Sovereign citizens,” for example, are filing bogus liens against public officials, threatening judges — and holding “seminars” to teach others how to become anarchists.

    One of the places “sovereign citizens” are operating is Washington state, DFI’s home state. This Blog also maintains a “sovereign citizens” tag.

    It is darned hard to get bad press on the PP Blog if you’re an agency engaged in the worldwide fight against fraud. But DFI is getting some today. Fortunes are being stolen worldwide. Bogus liens are being filed against public officials. Reporters are being menaced by cyberstalkers who are running interference for criminals — and DFI wants to complain about a tag that serves the public interest and creates confusion only in Bureacratic La-La Land.

    Get a clue, DFI. Your tag, though, now has been removed at your request — and it is a stupefying loss for the public.

    Here, for posterity, is a screen shot of the “tag” DFI complained about:

     

     

  • ZEEK: Part Of The Backstory — In Pictures

    UPDATED 4:20 P.M. EDT (U.S.A.) Unsolved mysteries remain in the Zeek Rewards Ponzi scheme case. Among the unanswered questions are these:

    • How many members did Zeek have in common with AdSurfDaily, a predecessor 1-percent-a-day scam to the Zeek scheme?
    • Why do some Zeek “defenders” appear to be engaged in bizarre bids to harass and menace Zeek critics?
    • Why did Zeek list certain ASD members or story figures as employees on its website — and why does some of the employee information published on Zeek’s website in June appear to be at odds with employee information contained in court filings by Zeek last week?
    • How much connectivity did Zeek have with scams such as NarcThatCar, AdViewGlobal, OneX and JSSTripler/JustBeenPaid, a “program” that may have ties to the “sovereign citizens” movement?

    On June 7, the PP Blog reported that a Zeek Rewards MLM “program” website was listing the names of 16 Zeek “employees,” including the name of Terralynn Hoy, a mainstay in the AdSurfDaily Ponzi scheme story. Also included was the name of OH Brown, an executive at a company (USHBB Inc.) that produced ads for the NarcThatCar pyramid scheme. This information is reflected in screen shots Nos. 1 and 2. Notes by the PP Blog also are included.

    Hoy participated in at least one conference call for Zeek, as did Brown. Zeek’s 1-percent-a-day-plus business model was very similar to the business model of ASD, which the U.S. Secret Service described in 2008 as a massive online Ponzi scheme that had gathered tens of millions of dollars. Zeek launched after the collapse of ASD and had members and/or figures in common with ASD and AdViewGlobal, a collapsed 1-percent-a-day “program” federal prosecutors linked in April 2012 to ASD.

    1.

     

    2.

    ADDITIONAL NOTES: T. LeMont Silver, identified by Zeek in June as an employee, also was a pitchman for “OneX.” In April, federal prosecutors in the District of Columbia described OneX as a “fraudulent scheme” and “pyramid” that was recycling money in AdSurfDaily-like fashion. ASD was a $119 million Ponzi scheme operated by the now-jailed Andy Bowdoin, who also was a OneX pitchman.

    Among Silver’s OneX claims was that OneX positions being given away were worth $5,000. Bowdoin declared OneX an excellent “program” for college students.

    Even though Zeek claimed Silver, Hoy, Catherine Parker, Brown, Trudy Gilmond and Marie Young Cain as “employees” in June, they are not referenced as “EMPLOYEES, OTHER PERSONNEL, ATTORNEYS, ACCOUNTANTS & OTHER AGENTS/CONTRACTORS” in a Sept. 17 court filing by Rex Venture Group LLC/Zeek operator Paul R. Burks.

    Also absent from Burks’ Sept. 17 list of Rex/Zeek employees/contractors is Robert Craddock, who identified himself in July as a Rex “consultant.” In July, prior to the SEC’s Ponzi allegations against Zeek, Craddock sought to disable the Hub of Zeek critic “K. Chang” by filing a complaint for purported copyright/trademark infringement and libel with HubPages.com. Craddock was successful briefly, but HubPages eventually restored the “K. Chang” Hub. Craddock later became involved in a purported effort to raise funds to “protect” Zeek affiliates from the SEC and/or the court-appointed receiver in the Zeek Ponzi case.

    Gilmond once pitched Regenesis2x2, a “program” that became the subject of a U.S. Secret Service investigation in 2009. The Secret Service also is investigating Zeek. The SEC described Zeek last month as a $600 million Ponzi- and pyramid scheme.

    Precisely how and when Rex/Zeek hired or replaced/dismissed employees is unclear. The names of a number of individuals listed by Zeek as employees in June do not appear on the list Burks filed in court last week.

    NarcThatCar effectively collapsed in 2010, after coming under scrutiny by the Better Business Bureau and investigative reporters. Narc operated from Texas — and yet did part of its banking in North Carolina at one of the banks used by Zeek. Both Narc and Zeek used USHBB Inc. to produce ads for their respective “programs.” Both Narc and Zeek scored “F” grades with the BBB — and when the BBB published negative information about the respective “programs,” some affiliates of the respective “programs” claimed the BBB was a fraud.

    Zeek ‘Defender’ Stalks PP Blog, Starts Disinformation Site After HubPages Restores ‘K. Chang’ Site Targeted By Craddock

    The PP Blog is reporting today that, after the SEC described Zeek as a $600 million fraud and after HubPages restored the “K. Chang” Hub critical of Zeek and targeted by Craddock, a purported Zeek “defender” used the Internet repeatedly to send harassing communications to the PP Blog. Dated Aug. 28, one such communication was an announcement that the PP Blog and “K. Chang” had been targeted in a retaliation campaign for their respective reporting on Zeek.

    3.

    4.

    The Blog’s stalker created more than a dozen bogus usernames and email addresses to send harassing (and bizarre) communications to the PP Blog.

    Here is one from Aug. 31 (italics added):

    Watch out for the Romney lover namely KSChang!!!! He was saw holding hands with Mitt, caressing the presidential candidate, while surfing PatrickP’s amazing, smart, funny, and romantic blog.

    Mitt Romney is the Republican nominee for President of the United States.

    For reasons that remain known only to the PP Blog’s cyberstalker, the individual also sent a one-word harassing communication — “Pussy” — to the thread below this Aug. 29 PP Blog guest column by Gregg Evans. Separately, the cyberstalker sent a communication that planted the seed Evans would get sued for his Aug. 29 PP Blog column.

    “Are you willing go toe to toe with a lawyer on your claims and back up this article?” the cyberstalker wrote.

    On Aug. 31, the cyberstalker — who’d been banned under multiple identities — sent this harassing communication to the PP Blog:

    “What happened to your face dude, looks like you got ran over by an ugly truck.”

     

     

     

  • BULLETIN: Mantria Ponzi Scheme Pitchmen Hit With Millions Of Dollars In Disgorgement And Penalties — And Principals Ordered To Pay Tens Of Millions

    Mantria CEO Troy Wragg in a music video by ICEBLOC.

    BULLETIN: Two pitchmen for the Mantria Corp. “green” Ponzi scheme have been ordered to pay millions of dollars in disgorgement and penalties, including a purported wealth coach who advised people who contacted him after the 2009 collapse of Mantria to join the Trump Network MLM “opportunity.”

    Mantria purportedly was an environmentally friendly investment opportunity. In reality, the SEC said, it was a massive Ponzi scheme that was selling unregistered securities through unregistered broker-dealers.

    Any returns paid to investors “were funded almost exclusively from other investors’ funds,” the SEC said.

    Wayde M. McKelvy of Speed of Wealth LLC was ordered by U.S. District Judge Christine M. Arguello of the District of Colorado to pay $6,273,632.78 in disgorgement, interest of $869,141.87 and a civil penalty of $6,273,632.78.

    McKelvy, an MLM pitchman who also was pushing Mantria, described himself as a wealth coach with “Wealthalete[s]” as pupils and prospects.

    McKelvy’s former wife — Donna McKelvy — was ordered to pay $429,731.84 in disgorgement, interest of $55,172.93 and a civil penalty of $214,865.92.

    Arguello ordered even greater disgorgement and penalties against Mantria principals Troy B. Wragg and Amanda E. Knorr.

    “The Court ordered Wragg and Knorr to pay $37,031,035.36 in disgorgement plus interest of $3,713,772.06 jointly and severally with Mantria Corporation and a civil penalty of $37,031,035.36 each,” the SEC said today.

    All in all, Arguello ordered more than $135 million in monetary relief in the Mantria/Speed of Wealth case, the SEC said.

    The agency brought the Mantria Ponzi case in 2009, saying the “promoters fraudulently exaggerated Mantria’s green initiatives and used high-pressure tactics to convince investors to chase the promise of lucrative returns.”

    Strangeness marked the early days of the Mantria case. When reporters contacted Wayde McKelvy by email for comment, they received back a pitch for the Trump Network.

    “I am totally focused on one thing right now which I believe will be very, very fun and the opportunity to put money in your pocket by owning you’re [sic] own business with the help of ‘The Donald,” one of the McKelvy pitches claimed.

    Among other things, Mantria traded on the name of former President Bill Clinton, along with a host of other politicians and celebrities. It is not unusual for scams to attach their names to prominent individuals.

     

     

  • PP Blog Still $47 Short: [SEPTEMBER DONATION RE-POST]: The Challenges Are Unprecedented — And The PP Blog Continues To Serve Its Readers

    Dear Readers,

    UPDATED 8:13 P.M. EDT (SEP.16. , U.S.A.) As noted on Sept. 15, the PP Blog is $255 $205 $155 $105 ($47) short for September. The matter is pressing now, so this post has been republished.

    The past few weeks have been something that approaches crazy. The PP Blog is doing some of its most important work to date — and there is plenty more to do.

    The need this month again is on the order of $550. Our readers sustained us again last month, but once again it came down to the 11th hour. As always, every story you’ve read this month was made possible by our small universe of contributors.

    Our mission is to keep you reliably informed and to provide content that provides both the backstory and analysis. Ponzi schemes and online fraud are a world scourge. These moments in history are unprecedented and create economic and security challenges never before seen in the history of mankind.

    Please contribute if you’re able.

  • Now, Another ‘Program’ Uses Name Of JustBeenPaid: ‘JustBeenPaidNew’ Says It Features ‘Attractive 2.5% Daily Plans’ With Payments Through Payza

    This YouTube video purports to provide instructions on how to send money through Payza to JustBeenPaidNew, apparently an emerging "program" trading off the name of the JustBeenPaid scam.

    Yet another “program” appears to be trading off the name of JSS Tripler/JustBeenPaid. The new “program” is known as “JustBeenPaidNew.” It uses a domain registered Sept. 9 behind a proxy and, in butchered English, makes claims such as this:

    “We have some Good Professional Fund Managers, and thay [sic] invests [sic] in the global currency trading market . . . Conferm  [sic] your sign up and get $5 as [a] sign up bonus.”

    JustBeenPaidNew says its uses Payza, Skrill and Liberty Reserve as payment processors. A JustBeenPaidNew video apparently uploaded to YouTube in recent hours shows what purports to be a Payza back office. The video is titled “Upload Fund to Justbeenpaid New.Com from Payza Account” — and viewers receive instructions on how to fund their accounts through Payza.

    A section of the video instructs viewers to “Invest $10 in a position and get 2.5% daily profit for 60 dayes [sic.]”

    Claims in the video appear to put JustBeenPaidNew at odds with a policy Payza announced on July 13 that banned “[a]ny indication or demonstration of a literal rate of return on a contribution, payment or investment, while not being licensed to sell or solicit.”

    When clicked, a link styled “Tarms [sic] & condition [sic]” on the JustBeenPaidNew site loads a page that makes this bizarre representation:

    “JustBeenPaidNew.Com [sic] registered as an international limited liability company and not a bank nor [sic] a security [sic] firm. An investment with us is not insured or guaranteed by the ‘Federal Deposit Insurance Corporation’ and/or any other government agency existing out there.”

    In 2011, a “program” known as “JSS Tripler 2” launched, using the name of JustBeenPaid’s JSS Tripler entity. JSS Tripler 2 later collapsed.

    JustBeenPaid was the 2-percent-a-day “program” purportedly operated by Frederick Mann. JustBeenPaid now is morphing into a scam known as “ProfitClicking,” amid reports of Mann’s sudden retirement from JustBeenPaid.

    At 3:44 a.m. EDT today and again at 3:47 a.m., the PP Blog received affiliate spam from a JustBeenPaidNew promoter. Logs suggest the spam was sent from Bangladesh.

  • DISTURBING: ‘ProfitClicking’ Thread At MoneyMakerGroup Ponzi Forum Used In Zeek-Related Disinformation Campaign That Delivers Traffic To Troy Dooly’s Blog While Creating Brand Confusion And Opportunity To Harvest Leads For Poster Known As ‘freezeekler’

    EDITOR’S NOTE: The PP Blog sought comment from Troy Dooly of MLMHelpDesk this morning (Sunday) on the disturbing Zeek- and Ponzi forum-related developments reported in our story below. (Story appears below screen shots.) Dooly has not responded as of the time of this post, but the PP Blog will publish his comment if and when received. (UPDATE 10:24 p.m. Dooly has responded to the request for comment. His comment has been added to the story below.)

    Various efforts to mislead Zeek members and the public about the SEC’s Aug. 17 action against Zeek Rewards amid allegations that Zeek was a $600 million Ponzi- and pyramid fraud now are under way online. If you’ve received an email attributed to Zeek member Dave Kettner that claims “[t]he SEC acknowledged that there are a couple of problems with the case against Zeek Rewards and Rex Venture group,” it almost certainly is best to be extremely skeptical of the claims. Similar claims were made by apologists for the AdSurfDaily Ponzi scheme.

    These are among the claims attributed to Zeek-member Kettner, who is using the pronoun “we” when referring to the SEC:

    1. We (the SEC) are not able to find a victim in this case. We are not able to find anybody at this time that has been harmed by Zeek Rewards.
    2. We (the SEC) are having a hard time finding a security. In the complaint, it said that Zeek was selling securities and was an investment scheme.

    Beginning in August 2009, dozens of AdSurfDaily members flooded the docket of U.S. District Judge Rosemary Collyer with claims the government had produced no “VICTIMS” in the ASD Ponzi case. The pleadings appear to have been based on a template shared by one or more ASD downline groups. Included among the filers was Todd Disner, then an emerging figure in the ASD story and now an emerging figure in the Zeek story.

    Collyer rejected each and every one of the claims. In September 2011, the U.S. government announced it had identified at least 8,400 ASD victims. Two months later — in November 2011 — Disner filed a lawsuit against the government that alleged it had produced a “tissue of lies” and that ASD was a legitimate enterprise. About seven months later — in May 2012 — ASD operator Andy Bowdoin pleaded guilty to wire fraud and admitted ASD was a Ponzi scheme and that the company never had operated lawfully. The government now says it has identified at least 9,000 ASD victims.

    Justia.com has archived Collyer’s ASD docket and the related filings here. Disner’s unsuccessful filing is Docket No. 91. The ruling rejecting his claim (and others) is Docket No. 96. Despite the denials, other ASD members continued to use the same no “VICTIMS” argument, which incorporated a conspiracy theory that government evil was afoot. Collyer eventually issued en masse denials.

    Disner, Kettner and Zeek figure Robert Craddock are known to be involved in an effort to raise funds purportedly to defend Zeek affiliates while taking the SEC to task. The effort has been marked by shifting stories, contributing to an atmosphere of confusion. PP Blog guest columnist Gregg Evans wrote about some of that confusion here. The SNR Denton law firm, once presented by Craddock as the attorneys for Zeek affiliates, now appears to have withdrawn its representation. Meanwhile, a website known as ZTeamBiz that was gathering funds for the purported Zeek defense has been blocked by PayPal, a development ZTeamBiz blamed on purported fear of competition by eBay. eBay owns PayPal.

    RealScam.com (GlimDropper) now is reporting that ZTeamBiz is soliciting money via “electronic check drafts” and potentially putting contributors’ banking information at risk.

    Meanwhile, it’s worth pointing out that the U.S. Secret Service confirmed on Aug. 17 that it was investigating Zeek. Beyond that, the office of North Carolina Attorney General Roy Cooper has confirmed it is investigating Zeek. At least two proposed class-action lawsuits also have been filed against Zeek. The SEC is hardly Zeek’s only worry.

    Here, now, our story about how a Ponzi-board poster appears to be causing Dooly’s MLMHelpDesk.com to load beneath a different URL in an apparent bid to create confusion about the SEC’s Zeek action while also leeching off Dooly’s work product to gather “leads.”

    1.

    "freezeekler," a MoneyMakerGroup Ponzi forum poster in the "ProfitClicking" thread, is using his (or her) forum signature to help disinformation about Zeek spread online. ProfitClicking may have ties to the "sovereign citizens" movement.

    2.

    The redirect from the signature of "freezeekler" at the MoneyMakerGroup Ponzi forum causes Troy Dooly's MLMHelpDesk.com Blog to load under a URL styled "draftsforcash.com."

    3.

    On the MoneyMakerGroup Ponzi forum, "freezeekler" says his (or her) plan with the "ProfitClicking" program is to "withdraw at least until I have my investment back."

    UPDATED 10:24 P.M. EDT (U.S.A.) TO ADD FIRST COMMENT FROM TROY DOOLY. UPDATED AT 11:25 P.M. TO REFLECT COMMENT FROM DOOLY THAT THE OFFENDING PAGE DESCRIBED BELOW HAS BEEN REMOVED. UPDATED 9:13 A.M. (SEPT. 10) TO FIX REDUNDANCY IN THIRD PARAGRAPH.

    Efforts to spread disinformation about the SEC’s action in the Zeek Rewards Ponzi case intensified on the web yesterday. One such bid occurred within the thread on the “ProfitClicking” scam-in-progress at the MoneyMakerGroup Ponzi forum, where a poster known as “freezeekler” is using the following “signature” line (italics added):

    Hot! ZEEK REWARDS Coming Back, NOT GUILTY? NEW updated information!

    “freezeekler” apparently also is in “ProfitClicking,” given his (or her) MoneyMakerGroup comment about a plan to “withdraw at least until I have my [ProfitClicking] investment back.”

    MoneyMakerGroup is listed in U.S. federal court filings as a place from which Ponzi schemes are promoted. Records show that five major scams promoted on the forum in recent years — Zeek, AdSurfDaily, Legisi, Pathway To Prosperity and Imperia Invest IBC — allegedly gathered a combined sum of at least $868 million. By contrast, the 2013 budget for the city of Las Vegas is $468.8 million, according to a May report in the Las Vegas Sun. The population of Las Vegas is approximately 590,000.

    In terms of the number of victims — currently estimated at between 1 million and 2 million — Zeek may be the largest Ponzi scheme ever investigated by U.S. law enforcement. Its membership base may be at least 10 times larger than ASD, whose base was estimated by the U.S. Department of Justice at 97,000. Zeek’s estimated cash-drawing power of $600 million appears to have been approximately five times larger than ASD’s.

    When “freezeekler’s” signature link is clicked, a redirect kicks in and visitors are taken to a URL styled “draftsforcash.com” and a page styled “zeekrewards.” (draftsforcash.com/zeekrewards.) When visitors move their mouse, a lead-capture ad then loads for a 60-minute “webinar” for an unspecified program that asks viewers to submit  their name, email address and phone number.

    Although visitors may believe they are at the “draftsforcash” site’s Zeek Rewards page, they’re actually at the site of Troy Dooly’s MLMHelpDesk.  MoneyMakerGroup’s “freezeekler” appears to have caused the redirect to Dooly’s Blog to occur without causing the URL for MLMHelpDesk to appear in the location bar. Visitors unfamiliar with Dooly could come to believe he is the owner of “draftsforcash.”

    That domain, however, is registered on the name of Bargain Crusader Inc., according to a whois search. When the “zeekrewards” page is stripped from the “draftsforcash.com/zeekrewards” URL, visitors see Blog whose sole story appears under a headline of “Daily, and Weekly fantasy sports leagues.”

    The “skin” for the one-post Blog, according to a link at the site, is provided by “online casino uk site in cooperation with play roulette for fun weblog.”

    Dooly tonight expressed concern about the Ponzi-forum development.

    “This is nuts,” he said in an an initial email to the PP Blog. “Thank you for sharing this info with me. I will do a post tomorrow on this issue.”

    In a second email to the Blog, Dooly said his company took quick action to ensure the offending page was taken down.

    “My COO jumped on the issue as soon as I sent it to him,” Dooly said.

    ProfitClicking is an ASD-like autosurf formed from the carcass of the JSS Tripler/JustBeenPaid “program” that suddenly went missing last month amid reports of the sudden “retirement” of Frederick Mann, the purported operator of JSS/JBP.

    Mann is a former pitchman for the ASD Ponzi scheme. JSS/JBP claimed to have more than 1 million members. Its cash-sucking power remains unclear.

     

  • UPDATE: Launch Of JSS/JBP Follow-Up Scam (ProfitClicking) Under Way — Sort Of

    The launch of “ProfitClicking,” the follow-up scam to the JSSTripler/JustBeenPaid HYIP scheme (2 percent a day) purportedly operated by Frederick Mann, is under way.

    Sort of.

    Carl Pearson in his JSS/JBP days.

    Just who’s running ProfitClicking is unclear, although the site has claimed that cash-gifting enthusiast J.J. Ulrich is the “PC Executive Director” and that Carl Pearson is on the “Management Team.” Pearson purportedly was the one-time COO of JSS/JBP, which experienced a promotional ban in Italy by the securities regulator CONSOB.

    Mann hinted last month that he feared arrest in the United States. He previously speculated that the JSS/JBP site could be taken out by “cruise missiles.” Some JSS/JBP members complained that their support tickets hadn’t been addressed in weeks.

    Rather than hold JSS/JBP responsibile, Mann suggested, it perhaps was best for members to read a self-improvement manual.

    ProfitClicking’s site had featured a countdown clock for days, with the launch set to go live at 6 a.m. (EDT) today. Despite claims by ProfitClicking that new servers and a new engineering approach would make for a seamless experience, the site experienced an immediate meltdown — with the landing page defaulting to a “Block DOS” gateway.

    The site did begin to load slowly within a few minutes, but members immediately complained on the MoneyMakerGroup Ponzi forum that they couldn’t log in. Members now are saying that they can log in but that the site is performing worse than dial-up.

    Whether members’ data was transferred properly from the JSS/JBP site to the ProfitClicking site remains an open question. Like JSS/JBP, ProfitClicking makes members affirm they are not with the “government.” The site also seeks to disclaim any responsibility on the part of the “opportunity” or its affiliates for offering the “program.”

    As JSS/JBP’s purported owner, Mann compared government workers to the Mafia. Regardless, he once permitted JSS/JBP’s conference-call host to hang up on a man who claimed to have been recruited by Mann and later to have suffered a stroke. Prior to being unceremoniously disconnected from the call, the man informed Mann that JSS/JBP support had ignored his pleas for help.

    A woman who complained about support after claiming her sister’s home was at risk because of the JSS/JBP “program” was treated rudely during an earlier call — this after she pointed out she had a heart condition.

    Among the apparent early aims of ProfitClicking is to permit members to fund accounts, but not withdraw. Such an approach is consistent with an effort to draft suckers into turning over money that may or may not be used at a later time to make Ponzi payments to people who bought into the JSS/JBP scam. AdSurfDaily, a ProfitClicking-like autosurf, scammed its members in this fashion in 2007, according to U.S. federal court files.

    Mann was a former ASD pitchman, according to a 2008 promo.

    ASD President Andy Bowdoin never told his new members that their money would be used to pay old members on board when the original iteration of ASD collapsed, federal prosecutors said. Bowdoin was sentenced last month to 78 months in federal prison.

    All sorts of vacuous claims are made on the ProfitClicking site, including a claim that the purported opportunity is “Legally Compliant” and has a “Patented system.” Like JSS/JBP, ASD and the recently collapsed Zeek Rewards “program,” ProfitClicking has no known securities registrations and purports to do business with payment processors linked to fraud scheme after fraud scheme.

    Because ProfitClicking has a virtually unquantifiable number of HYIP scammers within its ranks owing to the fact it was formed from the carcass of JSS/JBP and was promoted widely on the Ponzi-forum cesspits, new members may be at grave risk. ProfitClicking’s original group of scammers has a vested interest in continuing the deception because attracting “new money” may be the only means of getting paid in the future.

    For posterity, the screen shots below provide a snapshot of the countdown of a new scam in progress:

    1.

    The ProfitClicking countdown timer at the 1:00 mark today.

    2.

    The ProfitClicking countdown timer at the 0:01 mark today, one second before launch.

    3.

    Time to scam anew!