With May approaching , the PP Blog once again is at the edge of an abyss. In July 2011, the Blog enabled a donation button. We’ve stayed online to fight the good fight — thanks to readers.
As was the case last month, key bills are coming due and core essentials are in short supply. It is never easy to pass the hat. But with the state of publishing, pass it we must.
Our current editorial well consists of 1,620 posts, including 137 through the first 116 days of 2012. It is our hope there will be many more in the days, weeks and months ahead.
“Defendant Trebor Company (Robert spelled backward) is a sole proprietorship owned by [Robert C. Brown Jr.] and is the name he has used for his ‘investment group.’” — U.S. Securities and Exchange Commission, in civil complaint against Trebor and Brown, July 23, 2008
“Evidence at trial established that much of the investor money was funneled through the ‘WISE’ account (wise investors simply excel) opened by Duane Allen Eddings.” — Office of U.S. Attorney Benjamin B. Wagner of the Eastern District of California, April 24, 2012
It was a Ponzi scheme involving a purported expert, a shill and at least $17 million — and it featured wordplay: A business entity known as TREBOR got its name from spelling “Robert” backward, and WISE was a limited-liability company that stood for Wise Investors Simply Excel. Now, TREBORS’s namesake Robert C. Brown Jr., 59, of Vallejo, Calif., has been sentenced to 15 years and eight months in federal prison.
Meanwhile, Duane Allen Eddings, 52, of San Francisco, has been sentenced to 17 years and six months. Federal prosecutors said Ponzi cash was funneled through a WISE account he opened, setting the stage for money-laundering to occur through an account Eddings controlled in the name of CDC Global Inc. He is listed in records as the managing member of WISE, and prosecutors said he effectively was shilling for Brown by painting him as a stock-market “expert.”
Eddings was found guilty by a jury last year on Ponzi-related charges of money-laundering, wire fraud, bankruptcy fraud and tax evasion. Ponzi colleague Brown pleaded guilty to wire fraud.
In bringing a civil action in 2008, the SEC said investors believed Brown would invest their money in the stock market. But most of the funds never were invested.
Instead, “Brown deposited investors’ money into accounts that he treated like personal piggy banks, using the money to pay for luxurious personal expenses such as upkeep on his Ferrari, limousine services, and expensive shopping trips with his girlfriend,” the SEC alleged in 2008.
After the SEC brought its 2008 civil case, Brown and Eddings were charged criminally in 2009. The investigation that led to the charges was conducted by the U.S. Postal Inspection Service and IRS-Criminal Investigation.
False statements and omitted details critical to prudent investment decisions were part of the Brown/Eddings scam, prosecutors charged.
Eddings showcased his wealth to investors, claiming Brown was the “expert” who made it possible, prosecutors said.
As the probe moved forward, however, investigators discovered that Eddings had invested only $1,000 with Brown and had been using investor cash to live the high life by funneling client money that did not belong to him through WISE — and then transferring it to the CDC Global account to make personal purchases.
“In sentencing Brown, [U.S. District Judge John A. Mendez] expressed sympathy to the victims stating, ‘This is a crime among the worst that I see,’” prosecutors said. “And he said that what Brown had done to his victims was ‘evil.’ Judge Mendez later said that this comment applied equally to Eddings. He further said that he was not convinced that the defendants were ‘no longer a danger to the public.’”
About 400 victims were defrauded by the Brown/Eddings Ponzi, which operated between September 2005 and May 2007, prosecutors said.
Making matters worse was that Brown and Eddings “encouraged investors to raise additional funds by taking out mortgages and home equity lines of credit on their homes,” prosecutors said.
“Many” investors lost their homes, prosecutors said.
In reverse-engineering the complex caper involving Brown and Eddings, investigators discovered that “Edding’s personal spending habits led to the collapse of the Ponzi scheme” and that Eddings had grossly understated his taxable income during one of Ponzi years and claimed to have a taxable income of zero during two of the years.
Some of the Ponzi money went to “lulling payments to earlier investors” in a failed bid to keep the scheme afloat and prevent its detection, prosecutors said.
“It can be devastating when the financial well-being of an individual falls into the wrong hands through trickery and deceit,” said Marcus Williams, special agent in charge of the IRS Criminal Investigation Unit.
Postal Inspector Oscar Villanueva described the Brown/Eddings scheme as “complex.”
“Fraud schemes like the one perpetrated in this case are devastating to victims,” said U.S. Attorney Benjamin B. Wagner.
BULLETIN: The SEC is tackling another bizarre securities-fraud case in which the alleged elements read like fiction. In May 2011, the agency charged Allen E. Weintraub of Aventura, Fla., in a bogus “tender offer” caper in which he fraudulently claimed to have backers to purchase (for purported billions of dollars) Eastman Kodak Co. and AMR Corp., the parent company of American Airlines.
Weintraub, who declared bankruptcy in 2007, submitted the bogus tender offers while he was on probation for two felony counts of organized fraud and one felony count of money-laundering, the agency charged.
If that weren’t enough, the offers were submitted through a dissolved shell company known as Sterling Global Holdings while Weintraub was coming off a 2008 mortgage foreclosure. His criminal record dates back at least to 1992, according to records.
Weintraub and Sterling Global were ordered in January 2012 to pay civil fines totaling $400,000 for the bizarre Kodak/AMR takeover fraud — and Weintraub once again was enjoined from violating federal securities laws. The January order followed a 2002 order in which Weintraub was banned from being an officer or director of a public company as a result of a previous scam, according to records.
Alleged New Weintraub Fraud Emerges
Now — incredibly — the SEC says Weintraub is presiding over yet-another fraud, this one involving the use of the alias “William Lewis” and three companies: Private Stock Transfer Inc., PST Investments III Inc. and World Financial Solutions.
The latest scam involve the selling of “worthless shares” in an enterprise known as “PST Investments,” with Weintraub claiming he could arrange for customers to get pre-IPO shares of Facebook. The IPO scam operated at least in part through a website styled PrivateStockTransfer.com, the SEC alleged.
As part of an emergency order and asset freeze, a federal judge has ordered the site taken offline. It was serving a blank page this morning, but Google cache suggests the site was active at least through April 10. The April 10 cache entry shows the logos of Twitter and Facebook, which potentially means that Weintraub was using two social media-platforms, including Facebook, to commit fraud against Facebook and possibly Twitter.
Various government agencies have warned about social-networking fraud.
Here is how the Google cache for the landing page of PrivateStockTransfer.com read (in part) on April 10 (italics added):
Welcome to the leading company in PRIVATE STOCK buying and selling of the hottest PRIVATE COMPANIES. In the past only celebrities and big funds were invited to purchase shares in the hottest PRE-IPO companies. Today any accredited investor can have that opportunity as well. Today you can own stock in FACEBOOK, TWITTER, and other explosive pre-ipo companies.
If you currently own stock in these companies and want to sell, Private Stock Transfer, can match you up to waiting buyers. No need to wait for the IPO to cash out. Today there is a Market for your Private Stock, and buyers waiting to buy.
Another page on the site read (in part) on April 2 as follows, according to Google cache (italics added):
FACEBOOK STOCK
Currently available: April 1-30, 2012 or until sold
100,000 Shares of common stock, PRICED at $38.00 a share and a minimum investment of 3,000 shares
The April 2 page, according to the Google cache, asserted the offer was a “private placement” and, despite the offer of a specific number of shares and a “minimum investment” of 3,000 shares, asserted that “None of the information displayed represents a public offer to buy or sell any securities.”
Regulators long have warned that scammers engage in wordplay and publish disclaimers to disguise the fraudulent sale of securities.
Registration data for the domain shows it was registered to “bill lewis” of Tampa. The street address used in the domain registration appears to be the address of an office complex in Tampa that has a video-conferencing center among its amenities. The website was registered on Oct. 3, 2011, about five months after the SEC brought the “tender-offer” fraud case against Weintraub.
As part of its latest Weintraub probe, the SEC has published the phone number and name of a specific senior attorney — and is asking the public for help.
“The Division of Enforcement urges anyone who believes that Allen Weintraub may have recently defrauded them to contact John Rossetti, Senior Counsel, at 202-551-4819,” the agency announced — in bold type.
Owing to time constraints, the PP Blog hasn’t written much about Zeek Rewards, an MLM “program” married to a penny-auction site known as “Zeekler.” For simplicity, we’ll refer to both arms as “Zeek.”
The structure of Zeek and precisely what it does are just plain baffling. Even so, it appears to have a legion of loyal followers, including followers on well-known Ponzi forums such as MoneyMakerGroup and TalkGold. The Ponzi-board presence of Zeek affiliates is potentially problematic in the sense that some of them also are pushing obvious fraud schemes such as JSS Tripler/JustBeenPaid, which advertises a return of 60 percent a month and does not disclose its base of operations.
Yesterday, for instance, a MoneyMakerGroup poster “defending” JSS/JBP while dissing naysayer “Lynndel” was showcasing his Zeek affiliate link below his JSS/JBP “defense.”
“I am sorry to bring it up to you, but every business is a ponzi online or not,” poster “masikk08” wrote in response to “Lynndel’s” pointed criticism of JSS/JBP.
Let’s stop for a moment to assess what we just read: A JSS/JBP “defender” who’s also a Zeek affiliate just told you that “every business” is a Ponzi scheme.
Those words from your potential Zeek sponsor are just plain absurd. They also are devoid of any real-world understanding of the Ponzi menace. Ponzis have put people out of their homes, ruined lives, caused divorces, caused bankruptcies, destroyed college plans and dreams of passing on money to children and caused or contributed to suicides. A number of Ponzi/pyramid-related, murder-for-hire plots have been investigated. A California man believed to have used his ecommerce platform to facilitate Ponzi schemes has been sentenced to death for arranging the contract slaying of his wife, a potential witness against him.
“Every business makes money off of new customers and nothing lasts forever either,” the MoneyMakerGroup poster and Zeek affiliate continued, mixing an irrelevant point with a bromide.
“But we have to make the best out of what opportunities we have,” he droned. “I get paid and everyone I know gets paid with JBP. So I can not agree with your statement. But if you do not like to make money with JBP, there are other opportunities you may be interested in. JBP is not for everyone you know.”
Let’s assess those words: That people are getting paid is not evidence that no underlying crime exists. Successful Ponzis always pay. Bernard Madoff “paid” — right up until the day he didn’t.
Below the post, “masikk08” used an all-caps headline to attract attention to Zeek: “I HAVE A GIFT FOR YOU,” the headline reads. When the link is clicked, it resolves to a Zeek page.
“Zeek Affiliates are giving away up to 500 FREE BIDS to each of their registered and new customers!” the promo begins. It goes on to explain that the the bid giveaway is “AMAZING” and that the giveaway began in August 2011 and will “continue throughout the year!”
Given that we’re approaching May 2012, it appears as though the giveaway has been extended well into 2012.
Some JSS/JBP affiliates came under fire in January by CONSOB, the Italian securities regulator. From a U.S. perspective, both JSS/JBP and Zeek are using offshore payment processors. This, coupled with the Ponzi-board presence and the processors’ histories of enabling investment scams, could mean that money “earned” in one or more scam “programs” is passing through Zeek.
Zeek Cash Auctions
From the tempting-fate department, Zeek and its affiliates, using photos of U.S. currency, also advertise what effectively are auctions for sums of U.S. cash — all while affiliates laud the “program” for providing a return. These things easily could catch the attention of the Treasury Department’s Office of the Comptroller of the Currency, not to mention the SEC and potentially even the CFTC and the FTC.
Bidders potentially could receive substantial sums of cash at a significant discount. There is a certain incongruity about this, perhaps particularly in the sense that the cash auctions create the appearance that U.S. currency is being used as bait and potentially as a loss leader. But the strangest thing of all is that successful bidders apparently have the option of receiving the full value of the U.S. currency via AlertPay or SolidTrustPay, both of which are based in Canada and both of which are friendly to fraud schemes.
This opens the door to questions such as these: What registrations, if any, with which regulators in which countries does Zeek require — and does it have them? Which agency is its principal regulator? If a successful bidder pays less than the face value of the U.S. currency, is Zeek eating the loss? Is Zeek buying currency in bulk — or is it simply divining a sum available for bid and debiting its own bank or processing account for that sum when it sends the electronic equivalent of that sum to the successful bidder via the offshore processors?
Is Zeek selling U.S. currency at a loss or at a profit? If at a loss, why? If at a profit, how? Is there a risk to the U.S. and the currency markets if other “opportunities” model Zeek?
Blogger “Oz” at BehindMLM.com has written a number of articles that raise legitimate questions about Zeek. (It’s worth taking the time to use the search form at BehindMLM to check out the articles/editorials about Zeek.)
As time allows, we’ll add to our coverage of Zeek. We’re reading a lot about it from a variety of sources. The source volume and competing claims about the “program” create an atmosphere of confusion, and the overall Zeek “story” is far from clear.
For the purposes of this column, we’ll raise one final point: AdSurfDaily, which prosecutors have described as an international Ponzi scheme that operated over the Internet and plucked at least $110 million, once spouted that it would try to incorporate an auction arm of some sort. That arm never materialized.
Zeek appears to have ASD-like elements, leading to questions about whether regulators could become concerned that Zeek was selling unregistered securities as investment contracts and using wordplay to mask an investment program as something else.
ASD’s auction dream was speculative at best. Our initial take on Zeek is that it shared ASD’s now-ancient dream — indeed, other MLM’s have had the same dream — but Zeek actually put the dream into action. The question is whether that dream is compliant with any number of regulations that could come into play — or whether Zeek jumped the gun and now is trying to become compliant after the fact and after gathering an unknown sum of money while operating unlawfully.
Lots of people — perhaps millions — support MLM in one form or another. It is virtually impossible to quantify all of the disingenuous presentations, which often are hyperbolic — if not completely over-the-top. A certain sphere within the MLM universe is dominated by hucksters. These hucksters often display a remarkable lack of awareness. Some of them are tone-deaf politically and have a tin ear for real-world PR.
So, for the purpose of this first column on Zeek, we leave you with two questions: If you place a successful bid for a sum of U.S. currency on Zeekler, do you have any legal or political concerns if your cash equivalent is delivered via an offshore processor that has processed payments for one scam or collapsed scheme after another?
This will be a familiar refrain to many readers of the PP Blog: In July 2010, the Blog reported that the Financial Industry Regulatory Authority (FINRA) had launched a public-awareness campaign about HYIP fraud. FINRA called the HYIP sphere a “bizarre substratum of the Internet.”
Just a month earlier — in June 2010 — the U.S. Department of Justice pointed to a threat assessment by the International Mass-Marketing Fraud Working Group (IMMFWG) that declared “[t]here are strong indications that the order of magnitude of global mass-marketing fraud losses is in the tens of billions of dollars per year.” (Emphasis added).
In publicizing the IMMFWG document, which noted that international scammers use threats and coercive tactics to sustain schemes and chill “uncooperative victims,” the Justice Department alleged that the Pathway to Prosperity (P2P) HYIP scheme had reached into at least 120 countries and gathered $70 million.
P2P was only one of hundreds or even thousands of HYIP scams operating on the Internet.
“Dave,” who preemptively denied JSS Tripler 2 was a Ponzi scheme, now appears to have duped members into performing “tasks” such as making comments on Blogs/websites to dupe prospective purchasers of the sites into believing they’re buying established sites with built-in readership. The theory — apparently — is that “Dave” can monetize the sites, sell them at a handsome profit and use the cash to fund his various investment programs, thus muting the Ponzi critics and taking concerns of illegality off the table.
Some of “Dave’s” members claim they’ve carried out the “tasks” — in effect, to “do what’s best for the ‘program.’” Whether they’re concerned that they’re helping “Dave” scam a new crop of suckers who’d end up with junk websites is unclear.
What is clear is that they want to get paid — and perhaps are willing to say anything while carrying out the “task” of posting comments on Blogs in purported bids to make them more attractive to purchasers.
One bizarre and homophobic “comment” on a purported “Dave” Blog (CarryMyBaby.com) reads as such:
“[W]ell obviuosly [sic] the more sex you have the greater the chances of becoming pregnant unles [sic] you r [sic] one of those queer couples. then no matter what you two do together neither party wll [sic] get pregnant,,,capisce [sic]?”
Meanwhile, a bizarre comment on a purported “Dave” Blog (IBeatForeclosure.com) reads as such:
“its [sic] got be [sic] tough to have to decide if you have to foreclose on your house but the this [sic] mortagage [sic] crisis happened [sic] people had not [sic] choice not [sic] and [sic] easy thing to go through.”
The Blogs appear to be hosted in Utah. Ownership is unclear.
But even with the “tasks,” JSS Tripler 2 payments reportedly have been suspended again, owing to “Dave’s” wedding, the need to accommodate international travelers and a purported script glitch that caused some members to get paid twice.
Some members — including members who previously sold JSS Tripler as a “passive” investment opportunity — now claim that members unwilling to assist Dave in posting fake comments are “lazy.”
On the MoneyMakerGroup Ponzi forum, a “Dave” cheerleader posted a list of 26 websites for JSS Tripler 2 members to visit to post comments.
So, the JSS Tripler 2 “program” includes these elements:
An HYIP scheme that purportedly provided an annualized return of 730 percent and started out by naming itself after an existing scheme that also purported to pay 730 percent a year. (Think FINRA and its memorable “bizarre substratum of the Internet” line in July 2010.)
A preemptive denial that a Ponzi scheme was under way — even as well-known Ponzi forum cheerleaders helped the scheme gain a head of steam. (As part of FINRA’s July 2010 educational campaign on the dangers of HYIP fraud, it issued a public warning about social-networking fraud.)
A purported payment-processor freeze that left members in the lurch for weeks.
Incongruous suggestions that “law enforcement” had failed to act in the best interests of the “program.”
Attempts to chill/ostracize members. (The sort of coercive tactics referenced in the June 2010 IMMFWG document publicized by the U.S. Department of Justice.)
A name change. (Also an element in the AdSurfDaily Ponzi case.)
The launch of companion “programs.” (Another element in the ASD Ponzi case.)
A purported bout with Dengue fever. (Purported illnesses and violent windstorms are longtime HYIP clichés.)
Payment delays blamed on a wedding. (Imagine a legitimate broker/financial adviser telling you that you’d have to wait for the branch manager to return from her honeymoon in Southeast Asia before you could withdraw the sum you need to buy groceries or cough medicine for your children or pay a tuition bill.)
Payment delays blamed on script problems and/or double payments to members. (See this story from our ASD files.)
A purported duty to post comments on Blogs to drive up their sale value, so the money can be used to fund investment “opportunities.”
Attorney General Kamala D. Harris at a February news conference on the mortgage crisis in California.
James A. Sweeney II and Patrick M. Ryan — the two men who presided over the Big Co-op Inc. and Ez2Win.biz online pyramid scheme and stock swindle — have been sentenced to a combined 64 years in state prison, California Attorney General Kamala D. Harris announced.
Sweeney, 64, of Afton, Tenn., was sentenced to 33 years.
Ryan, 35, of Canyon Lake, Calif., received a sentence of 31 years.
Big Co-op and its Ez2Win arm purported to be an online shopping hub where consumers could go to purchase goods and services at discounted prices from big-name retailers including, Sears, Target and Macy’s.
Operating as a pyramid scheme and recruitment trap from 2005 to 2006, Big Co-op plucked $1.2 million, prosecutors said. A phony stock offering also was part of the mix, and the fraud soared by about $7 million.
The combined scams were fueled by seminars and netted $8.2 million, prosecutors said. More than 1,000 Californians were lured into the schemes. Filings by the California Department of Corporations painted a picture of affiliates making wild claims to drive business to the purported opportunities.
“With investor cash, Sweeney and Ryan bought homes, country club memberships, several luxury cars, and ran up $30,000 to $50,000 in monthly credit card bills,” prosecutors said. “Investor funds were also used to pay for an elaborate bachelor party in Las Vegas, a $23,000 wedding ring and a $100,000 wedding.”
“Ephren Taylor professed to be in the business of socially-conscious investing. Instead, he was in the business of promoting Ephren Taylor. He preyed upon investors’ faith and their desire to help others, convincing them that they could earn healthy returns while also helping their communities.” — David Woodcock, director of the SEC’s Fort Worth Regional Office, April 12, 2012
Ephren W. Taylor II: From: YouTube
URGENT >> BULLETIN >> MOVING: The SEC has gone to federal court in Atlanta, alleging that well-known speaker Ephren W. Taylor II was at the helm of an $11 million Ponzi scheme targeting African American church congregations through two investment “programs” offered by City Capital Corp.
Taylor is 29, the son of a minister. Taylor last was known to be living in New York, but [h]is current whereabouts are unknown,” the agency alleged.
“He failed to respond to a number of Commission investigative subpoenas, including a subpoena requiring his appearance for testimony,” the agency advised a federal judge in a complaint filed in Atlanta.
Former City Capital COO Wendy Jean Connor, 43, of metropolitan Raleigh, N.C., also was charged in the alleged caper. The agency said that she pocketed “hundreds of thousands of dollars” in salary and commissions that came from money investors plowed into the Ponzi, which was at least in part a promissory-notes scam married to a “sweepstakes machine” business and other purported businesses.
Taylor “secretly” funded his wife’s singing career with Ponzi money and “diverted hundreds of thousands of dollars to publishing and promoting his books” and “hiring consultants to refine his public image,” the SEC charged.
The scheme was multifaceted and occurred across multiple jurisdictions, with Taylor focusing on African Americans, denigrating traditional investment options and encouraging his audience to plow money from their Individual Retirement Accounts into his schemes, the agency charged.
The ‘Building Wealth Tour’
“Taylor conducted a multi-city ‘Building Wealth Tour,’ on which he spoke to church congregations — including Atlanta’s New Birth Church — or at wealth management seminars featuring other speakers,” the agency charged. “Taylor promoted the Building Wealth Tour on his personal website, through City Capital press releases, and in conjunction with the churches and civic groups that hosted him. Taylor heavily emphasized his Christian background . . . and, indeed, was at times referred to as ‘Minister Taylor.’
“He also touted his ‘socially conscious’ investment focus and successful entrepreneurial history,” the agency continued. “Taylor devoted considerable time to denigrating traditional investment vehicles, such as CDs, mutual funds and the stock market, labeling them as ‘foolish’ and ‘money losers.’”
One of his scam websites was styled SweepstakesIncome.com, the agency alleged, further alleging that the purported investment opportunity was positioned as the “brainchild of self-made millionaire Ephren Taylor.”
Part of the pitch “featured Taylor’s lengthy dissertation about ‘How You Can Create a Zero-Maintenance, Residual Income Using the Sweepstakes Empire!’” the agency alleged.
Priming The Ponzi
To prop up the multifaceted Ponzi, the SEC alleged, investors were encouraged to “roll their notes over” for another year or longer — with corresponding promises that delaying redemptions would “increase the rate of return,” the SEC charged.
“The roll-over solicitations typically touted the supposed ‘great things — usually of a socially conscious nature — City Capital was doing with the investor’s money, which were all untrue,” the SEC charged. “Investors who renewed were issued new promissory notes with the new term and interest rate. Any investor who resisted was subjected to an endless cycle of unreturned phone calls and emails, empty promises of imminent action, and claims that the investor had in fact already agreed to roll over his note. To the extent investors survived this gauntlet to still insist on repayment, any funds they received invariably came from new investor money.”
Undisclosed Risks
Meanwhile, the SEC alleged today that schemes involving sweepstakes machines already were on the radar of law enforcement even as Taylor dialed up his efforts to get investors to send him money.
“Offering materials stressed that the sweepstakes machines did not involve gambling, comparing them to McDonald’s ‘Monopoly’ prize game,” the SEC charged. “Investors were not told about the risks of illegality of the machines, or that several law enforcement agencies had taken action against City Capital’s and other parlors.”
Investors paid up to $4,497 per machine, amid claims City Capital had purchased and established several ‘internet cafes’ featuring the machines,” the SEC alleged.
City Capital paid employees a commission of 10 percent for selling the machines, and Taylor and Connor were paid “overriding commissions of 10% per machine,” the SEC charged.
All in all, the sale of sweepstakes machines raised at least $4 million from more than 250 investors, the agency charged.
Returns From ‘Thin Air’
In April 2010, the SEC charged, “City Capital’s bookkeeper alerted Taylor and Connor to the weak performance of the company’s recently acquired North Carolina and Texas parlors, explaining that the locations each suffered a loss after deducting operating expenses.
“Rather than tell investors assigned to machines in those locations that they would get no distributions — perhaps to avoid an investor backlash — Taylor and Connor instructed the bookkeeper to pay simulated returns essentially pulled from thin air,” the SEC continued.
“The bookkeeper had to divert funds received from new sweepstakes machine investors — and from investors’ funds in other City Capital ventures — to make these payments,” the agency charged. “As the parlors continued to lose money over the ensuing months, Taylor and Connor instructed the bookkeeper to continue making these simulated payments, telling her simply to make the same payment ‘as last month.’ These payments ended after August 2010, when City Capital ran out of money.”
Birds killed as a result of oil from the Exxon Valdez spill. Photo courtesy of the Exxon Valdez Oil Spill Trustee Council. Source: Wikimedia Commons.
Ain’t no one who does it quite like The Salty Droid, the fake-robot Blogger who sometimes curses like a [bleeping] longshoreman as he goes about the business of sucking the wind out of the sails of some nihilistic Internet marketing ships and their fantastically reckless captains.
Like Capt. Frank [“Bleeping”] Kern of “Syndicate” infamy, for instance.
Capt. Kern is a world-class [bleep]. If you’re out on the {Interwebs} searching for your own personal spoon-bender because generations of hucksters have conditioned your mind to tell you that individual spoon-bending kits and/or be-like-me pep talks costing thousands of dollars {and priced at your available credit limit} will help you amass more shoes than Imelda Marcos and free your inner millionaire, let us propose a mind game to counter the Syndicate mind game and keep you safely away from the noxious and tar-carrying IM tides.
Mind-Gaming The Mind-Gamers
We propose that you imagine this: You are a bird; Capt. Kern : : at the helm of his wretched IM hulk thousands of miles away at sea : : is unloosing an oil spill that’s going to float to your birdie habitat, suffocate you in poisonous flotsam and cause a photo of your lifeless birdie carcass to appear on the cover of National [Bleeping] Geographic.
With your grieving and inconsolable birdie family speculating about the type of pocket-picking evil that it surely took to cause you to die covered with tar, broke and in debt, the lawyer for your birdie estate will have to address the $40,000 {pick a number} you still owe {Local Or National Bank X} because you pooled the available lines on your credit cards or spent down your cash or cash equivalents to pay Capt. Kern.
Saying No To The IM Oil Spills
Stephen Pierce, who operates an IM scow called Stephen Pierce International Inc., is a Kern-like captain of the IM seas. Pierce’s Kern-like oil spill is oozing toward shorelines and towns near you.
Living inland won’t protect you. Neither will living on a steep hill or even up in the Rockies. Ain’t no mountain high enough to dam the Pierce IM oil spill : : thanks to the {Interwebs}, which is sort of infamous for making the peeps {human kind} believe they can pay $10,000 {or more} to become the next Imelda Marcos.
Or the next Capt. Frank Kern or Capt. Stephen Pierce.
You can save yourself a lot of heartache by picturing yourself as a tar-covered bird on the cover of National [Bleeping] Geographic.
Chilling The Critics
Stephen Pierce apparently believes it prudent to chill the peeps {human kind} who turn to the {Interwebs} to let other peeps {human kind} know his oil spill has reached their towns. Pierce does this apparently by taking some of his monies gleaned on the {Interwebs} and dangling it in front of [bleeping] lawyers.
Yep, Stephen [Bleeping] Pierce sues the tar-covered peeps {human kind}. It is repugnant. It is dastardly. It is the worst [bleeping] [bleep].
Examples of promotional slogans used on the Hope for Car Owners website: Source: FTC
BULLETIN: The Federal Trade Commission has gone to federal court in the Eastern District of California, alleging that several individuals and companies were running separate, web-based scams in which borrowers were told they could avoid vehicle repossessions by paying upfront fees to the accused scammers and not making payments on their car loans.
The scams were tied to telemarketing operations in which prospects seeking to avoid repossessions were solicited for up-front fees. One set of scammers told consumers to “hide [their] car[s] to avoid repossession,” the FTC charged.
A top FTC official described the alleged repossession-avoidance scam as the automotive equivalent of foreclosure-rescue scams targeted at distressed homeowners.
“Now that the FTC and its partners have stopped hundreds of mortgage loan modification scams, fraud artists are moving to another loan modification scam, preying on consumers who are behind on their auto loan payments and facing repossession,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection. “Despite promising to substantially lower consumers’ monthly payments, these schemes charge hundreds of dollars in up-front fees, leaving financially distressed consumers in worse shape than when they began.”
Charged in one of the alleged capers were Michael Kamfiroozie; Naythem Nafso; Kore Services LLC of San Diego (doing business as Auto Debt Consulting and Car Loans Modification); and NAFSO VLM Inc. of Roseville (doing business as Vehicle Loan Mod).
Charged in an alleged separate scam were Patrick Freeman and Hope for Car Owners LLC of Folsom and Roseville.
Freeman, the FTC charged, operated carloanmod.com, hopeforcarowners.com hope4carowners.com and hope4carowners.org.
Among other things, the FTC charged, the purported Freeman programs were positioned as “Consumer Stimulus & Bailout ASSISTANCE!”
Consumers were instructed to “Stop overpaying for a depreciating LIABILITY!” the FTC charged.
The alleged scam involving Kamfiroozie, Nafso and the Kore-related entities used websites such as carloansmodification.com, autodebtconsulting.com, vehicleloanmod.com, nafsovlm.com, theautomodgroup.com and automobileadvocates.com, the FTC said.
Compound150 says it is a spinoff of T2MoneyKlub, while targeting "compounding lovers" like a sandwich joint targets lovers of cheeseburgers.
The ink was barely dry on the most recent civil judgments for millions of dollars against serial HYIP pitchman Matthew J. Gagnon when Compound150 launched yesterday. On Tuesday, the SEC announced $4.2 million in new court-ordered assessments against Gagnon, who’d earlier been hit with more than $2.5 million in assessments in a related case and became the subject of a criminal complaint filed by the U.S. Secret Service.
Gagnon was a web-based pitchman for the Legisi HYIP Ponzi scheme and other high-yield “opportunities,” including a “program” in which his alleged partner was a twice-convicted felon. The SEC essentially charged Gagnon with turning a blind eye to obvious fraud schemes — repeatedly.
Apparently not taking the clue that HYIP promoters are at risk of both civil and criminal prosecution, the operators of JSS Tripler 2 have launched the Compound150 feeder scam, a companion to the original JSS Tripler 2 scam. After suspending member payouts in December 2011 amid reports of an AlertPay freeze, JSS Tripler 2 — also known as T2 — gave itself a new name: T2MoneyKlub.
The addition of the Compound150 scam means that the entity — purportedly operated by “Dave” from locales ranging from Britain to Cambodia to Thailand — means that the original JSS Tripler 2 entity now has a third entry in its scam lineup.
But the strangeness does not end there: Indeed, JSS Tripler 2 reportedly based its original name on JSS Tripler, a purportedly unrelated “program” whose affiliates became the subjects in January of a probe by CONSOB, the Italian securities regulator. Compound 150 reportedly launched during a period in which “Dave” was building prelaunch buzz while simultaneously battling (or recovering from) a bout with Dengue fever.
In the fraud sphere, it is common for “opportunities” to refer to illnesses, server problems or catastrophes such as typhoons. In upholding the 20-year prison sentence of pyramid schemer Seng Tan, the U.S. Court of Appeals last month pointed out that Tan — who targeted the scam she ran with her husband at Cambodian émigrés in the United States — blamed the scam’s inability to make payouts on Hurricane Katrina.
Tan’s husband — James Bunchan — ultimately received sentences totaling 60 years because he discussed murdering witnesses and the federal prosecutor who brought the case.
How strange could the JSS Tripler2/T2MoneyKlub/Compound150 “opportunity” get? The answer, perhaps, is that the sky is the limit. Perhaps positioning itself as a category creator, Compound150 says “compounding lovers” are among its target audience.
Compound150 apparently believes it is to multilevel marketing (MLM) what a fast-food chain is to lovers of cheeseburgers
Compound150 opened its doors amid a weekend flap at the MoneyMakerGroup Ponzi forum in which “Dave” — posting as Peakr8 — protested the forum’s description that the emerging opportunity was an HYIP, not an MLM opportunity.
“So are we a HYIP?” Dave asked.
“Hell no!” he answered himself, even as Compound150 was claiming on its website that it pays participants “1% daily for 150 days up to 150%.”
In effect, Compound 150 is advertising a (precompounding) annualized return of 365 percent, about the same purported ROI that led to the 2010 indictment of AdSurfDaily President Andy Bowdoin amid allegations he was operating an international Ponzi scheme.
If convicted on all counts in his September 2012 Ponzi trial, Bowdoin, 77, faces up to 125 years in federal prison and fines in the millions of dollars. As part of the ASD Ponzi investigation, the U.S. Secret Service seized the bank accounts of some individual ASD promoters.
Ten of Bowdoin’s personal bank accounts were seized — and five bank accounts allegedly involved in the operation of Golden Panda Ad Builder, a companion autosurf, were seized.
“Dave” was joined in his protest by JSS Tripler2/T2MoneyKlub/Compound150 shill “lolalola,” who insisted that Compound150 was an MLM.
In the civil portion of the ASD case, ASD also insisted it was an MLM. A federal judge was unmoved, ordering the forfeiture of more than $80 million, including more than $65.8 million from Bowdoin’s personal bank accounts.
An “opportunity” can at once be both an HYIP and an illegitimate MLM “program.” (Simply calling a program an ‘MLM” does not cure a program of legal defects, and some scams mix-and-math elements of both pyramid schemes and Ponzi schemes. Such programs may be described by investigators as pyramid-style Ponzi schemes.)
Compound150 appears to have a confluence of payout schemes very similar to the schemes that led to at least FOUR ASD-related forfeiture actions, the filing of a racketeering (RICO) lawsuit against Bowdoin, the seizure of tens of millions of dollars, millions of dollars in ASD-related civil judgments — and the ultimate filing of wire fraud and securities- fraud charges against Bowdoin.
Bowdoin also was charged with selling unregistered securities.
Like Bowdoin, Seng Tan also insisted her “opportunity” was an MLM.
