PatrickPretty.com

Category: Writing And Branding

  • UPDATE: MLM Pitchman Jeff Long Warned Against ‘EZ MONEY Pitches’ When He Fled DNA, Narc That Car Last Year; Long Now Promoting AutoXTen Cycler Amid Claims That Members Can ‘Turn $10 into $199,240’

    This video in which Jeff Long was driving an automobile and pitching the MLM license-plate schemes of DNA and Narc That Car was edited to insert the red balloon and annoucement from Long that he had dumped both DNA and Narc — and to warn prospects to stay away from "EZ MONEY'" MLM schemes. Long now is promoting AutoXTen amid claims the firm's matrix cycler can turn $10 into nearly $200,000 and is appropriate for "churches."

    Jeff Long, one of the purported founders of the AutoXTen matrix-cycler scheme, warned his followers last year to “Stay away from ‘EZ MONEY’ pitches and claims.”

    A year later, Long appears to be ignoring his own advice.

    The 2010 warning appeared in a YouTube video Long edited after he had led his troops into registering for the Narc That Car and Data Network Affiliates’ (DNA) license-plate MLM schemes. Long first joined Narc, but quickly abandoned it in favor of DNA. He then touted DNA online and hawked the Phil Piccolo-associated scheme in a DNA sales-hype conference call.

    Long, billed as DNA’s top recruiter,  then abandoned DNA. Both Narc and DNA came under Better Business Bureau and media scrutiny, and Long’s YouTube video became part of a Fox News local affiliate’s scam coverage. (See graphic below.)

    Eventually Long edited the video to insert an announcement in a red balloon with white type that he no longer was with either DNA or Narc and to warn about “EZ MONEY” claims.

    But Long now has emerged this year as a central figure in the AutoXTen cycler scheme.

    One promo for AutoXTen claims members can “Turn $10 into $199,240.”

    In 2010, Jeff Long's YouTube video for Narc That Car was referenced by Fox News 11 in Los Angeles as part of the station's Narc coverege. The original Narc video was repurposed by Long into a YouTube text pitch for DNA, but later edited to insert an annoucement Long had left both Narc and DNA.

    Remarks attributed to Long on the AutoXTen help desk claim that AutoXTen is appropriate for “churches.” DNA made similar claims about one of its “programs” last year. After Long pulled out of both DNA and Narc after reportedly recruiting hundreds of participants, he noted in his YouTube red balloon that he hoped affiliates would “Be Blessed!”

    Officials in Oregon yesterday announced a $345,000 penalty against cycler pitchman Kristopher K. Keeney, saying he was promoting a “pyramid scheme” and acting as an unlicensed seller of securities — while selling unregistered securities and lying to prospects of a collapsed matrix known as “InC” or “I need Cash.”

    Keeney’s Oregon fine was broken down as follows, according to the state:

    $100,000 for 221 violations of ORS 59.055 for “selling unregistered securities.”

    $15,000 for 1 violation of ORS 59.055 for “offering to sell unregistered securities in Oregon.”

    $100,000 for 221 violations of ORS 59.165(1) for “selling securities without a license.”

    $30,000 for the “untrue statements of material facts made in connection with the sale of securities” in violation of ORS 59.135(2).

    $100,000 for the “omissions of material facts in connection with the sale of securities” in violation of ORS 59.135(2).

  • Ponzi Forum Pitchfest Begins For ‘Fast Profits Daily; ‘Any Attempts To Acquire A Refund Or Chargeback Constitute Theft And Fraud, And Are Grounds For Legal Prosecution,’ Matrix Cycler Says

    UPDATED 2:49 P.M. EDT (U.S.A.) A pitchfest for an apparent cycler matrix called “Fast Profits Daily” has begun on the TalkGold Ponzi forum. Fast Profits Daily shares a street address in Delaware with another apparent matrix program known as “2X2 Prosperity Formula” and a purported vacation program known as “DREAM STYLE VACATIONS, LLC,” according to research.

    Why the businesses all use the same address and whether they are affiliated entities was not immediately clear.

    Meanwhile, the emerging Fast Profits Daily cycler matrix appears to have links to the AutoXTen cycler matrix and lists Scott Chandler, Randal Williams and Brent Robinson as pitchmen-in-chief on its landing page.

    Chandler, Williams and Robinson are “three of the world’s most famous network marketers,” according to the landing page. Until recently, Chandler and Robinson also were associated with AutoXTen, the Jeff Long-promoted scheme enabled by AlertPay.

    Long , a former pitchman for Data Network Affiliates and NarcThatCar, said on the firm’s web-based help desk that AutoXTen was suited for churches. The AutoXTen help desk also declared that the firm was relying on AlertPay to avoid PayPal “limits.”

    Early info about Fast Profits Daily is bizarre, incongruous and confusing. The PP Blog visited the site yesterday. A launch countdown timer indicated the launch would occur within three hours, conflicting with a printed message that the launch would occur in days.

    Today the countdown timer says the launch will occur in fewer than 10 hours. Like yesterday’s countdown timer, the information conflicts with the “days” printed message.

    Precisely what Fast Profits Daily is selling is unclear. Website visitors are told that “160 countries” will be involved in an “unprecedented opportunity of a lifetime.” The site also publishes a conflicting report that 140 countries are involved.

    “Turn a ONE-TIME $50 or $250 into $1,000, $5,000 even $35,000 over and over monthly, weekly, even daily,” the site advertises.

    On a separate page, the site declared in red type that “ALL Purchases are FINAL and NO REFUNDS or CHARGEBACKS are allowed.

    “Any attempts to acquire a refund or chargeback constitute theft and fraud, and are grounds for legal prosecution,” the site continues. “Purchaser will be liable for all legal and administrative cost associated with the chargeback and minimum penalty of $500USD. Plus any unused services shall be forfeited upon expiration or termination of services.”

    The Fast Profits Daily site also has a headline in red titled, “TRAVEL RELATED REFUNDS / CANCELLATIONS:” Separately, the DREAM STYLE VACATIONS site, which says it accepts AlertPay and Sold Trust Pay, has a headline in red titled, “Travel Related Cancellations/Refunds:” The headline wording is the same as the wording on the Fast Profits Daily site, except the words “cancellations” and “refunds” are transposed.

    Fast Profits Daily did not say whether it intended to prosecute senior citizens and other vulnerable individuals who may come to believe they’d been ripped off and filed a dispute or chargeback.

    Although Fast Profits Daily did not reveal the choice of law under which the firm operates, its servers appear to resolve to Dallas. The website domain is registered behind a proxy, but the website itself lists its address as:

    PMB 6747
    2711 Centerville Rd., Ste 120
    Wilmington, DE 19808
    USA

    As noted above, the same address is associated with 2X2 Prosperity Formula. The 2X2 website features a photo of an orange sports car, a luxious home (or perhaps a rental property) — and a happy family, including young children, walking along a beach with an ocean in the background. Also as as noted above, a third “opportunity” known as “DREAM STYLE VACATIONS, LLC” uses the same address.

    A promo for Fast Profits Daily was posted on the TalkGold Ponzi forum two days ago. Separately, the MoneyMakerGroup Ponzi forum has a thread for 2X2 Prosperity Formula that appears to have been established in February 2009. Based on the post count in MoneyMakerGroup’s 2X2 thread, the “program” appears not to have gained much traction — but its website remains active.

    Like the Fast Profits Daily site, the site for 2X2 Prosperity Formula also appears to be hosted in Dallas.

    UPDATE 2:49 P.M: This thread at MLM.com may be useful.

  • With A New Month Approaching, PP Blog Again Asks For Donation Assistance From Readers, Encourages Them To Use The Blog’s Tools To Peel Back The Online Fog And Strip Away The Web Thicket That Provides Cover For Fraudsters

    Dear Readers,

    The PP Blog is read each day by Ponzi scheme victims, victims of affinity fraud and various forms of securities fraud and commodities fraud, victims of online scams, researchers, media outlets, members of the antiscam community, financial-services companies and law-enforcement agencies. We are pleased that they turn to the Blog for information.

    Our current editorial well consists of 1,310 posts and nearly 11,000 comments from readers. All in all, the Blog publishes approximately 17,622 internal links and links to scores of offsite sources of information. The Blog’s internal search function and 5,537 cloud tags enable readers to find meaningful information quickly. The Blog’s most popular tags are found in the lower section of the sidebar on the right. The search function is in the upper-right corner of the Blog.

    The tags are important for a number of reasons. If you look at our current, 29-entry tag on Club Asteria, for instance, you’ll notice a cloud archive of our coverage. If you scan the headlines of the stories that reference Club Asteria, you’ll see that the headlines may reference other entities. And if you read the stories, you’ll find information that may help you ask questions, fill in the blanks, connect dots, solve mysteries and resolve conflicts that have been swirling in your head. It very often is difficult to connect dots online and to spot and analyze incongruities. The tags and search function of the Blog can help you do these things.

    In the Club Asteria example, for instance, readers may find themselves asking why a company that purports to elevate the world’s poor out of poverty was being promoted by well-known hucksters on forums associated with Ponzi schemes — and why purported “earnings” from a program targeted at a vulnerable population were being broadcast on the TalkGold forum, for instance. They also may question whether the presence of Club Asteria promotions on the Ponzi boards polluted Club Asteria’s revenue stream — and whether the world’s poor received proceeds from a polluted stream.

    Meanwhile, they may ask whether the impoverished people of the world were the real winners — or whether the serial Ponzi hacks and apologists were — even as they were promoting and collecting commissions and “earnings” from, say, Centurion Wealth Circle or AutoXTen or JSS Tripler or Exotic FX after earlier promoting and collecting commissions from, say, Pathway to Prosperity and perhaps ignoring this document from the U.S. Postal Inspection Service. (See the cloud tag for the U.S. Postal Inspection Service here. The Blog has cloud tags for many law-enforcement agencies. These tags help readers understand the cases investigated by the agencies and the types of occurrences that may draw their attention, the expansion of white-collar crime, the challenges the agencies encounter — and the strange if not downright bizarre nature of some of the cases under investigation.)

    Things often do not occur in a straight line on the Internet. There may be dozens, hundreds or even thousands of hopscotching points before a true picture emerges. Finding useful information online that enables you to make informed choices can be an exercise in futility. In the case of corrupt online “opportunities,” for example, a program’s sponsor and affiliates may employ a keyword strategy that seizes on the word “scam” — and then directs traffic to pages that explain why the purported “opportunity” is not a scam. The fog and ground-level thicket that emerges can become impossibly deep, a situation that provides cover for both scams and scammers.

    Our search function, tags, archives and internal and external links can assist you in piercing the fog, navigating the thicket and analyzing the “Big Picture.”  Because the big picture often ends in misery,  the faster you see it, the better for you and your pocketbook.

    On July 26, the Blog enabled a donation button. We received seven donations, which enabled us to get through the month of August. Now, at the end of August, we are confronting a lack of resources needed to get through the month of September.

    Publishing simply isn’t healthy right now. Our challenge was made more difficult by the DDoS attacks against the Blog, an increase of our hosting costs and the underperforming economy.

    We are gratified that the Blog has become a useful resource for readers. We are grateful for the thoughtful communications we receive from readers.

    And now, as was the case last month, we again ask our readers for their help. For security reasons, we will not publicly reveal the Blog’s precise monthly costs. On April 6, the Blog was subjected to a threat and a bid to chill our reporting, and reported the incident to a federal law-enforcement agency. The threat concerned our hosting and security arrangements. What the Blog is able to say publicly is that a sum of about $400 monthly from its readers would make a considerable difference to the Blog.

    The donation button is active in this post, and it continues to be active in the sidebar to the right.

    Thank you.

    Patrick

     

  • UPDATE: CONSOB, Italy’s Securities Regulator, Issues New Order In Probe Related To Club Asteria; Findings And Effect Not Immediately Clear; Google Translation Software Calls CONSOB A ‘Bag’; Yahoo Calls Club A ‘Starfish’; PP Blog Awaits Official Government Translation

    Dear Readers,

    The PP Blog became aware last night that CONSOB, Italy’s equivalent of the U.S. Securities and Exchange Commission (SEC), had issued a new order on Monday in its investigation into certain claims made online in Italy about the purported Club Asteria business “opportunity.”

    Club Asteria has been widely promoted online as a “passive” investment program that provides a weekly return that projects to yearly gains in the hundreds of percentage points. The firm, which claims to be a revenue-sharing program, is based in Virginia. Its offer is targeted at the world’s poor.

    The CONSOB order, which addresses concerns first raised by the agency during the spring about how citizens of Italy were approached in online solicitations to join Club Asteria, was signed by CONSOB President Giuseppe Vegas on Aug. 22 and announced yesterday.

    The PP Blog has a copy of the order. What it does not have is a reliable translation from Italian to English.

    Italy first raised issues about Club Asteria in May. It is believed to be the first nation to have done so publicly, and Club Asteria may have sales affiliates in 150 or more countries worldwide. The Italian probe — coupled with claims about Club Asteria in other languages or in butchered or even highly polished, stylized English — led to questions about whether Club Asteria and tens of thousands of affiliates were selling unregistered securities on a global scale — with Club Asteria being the beneficiary of an unlawful offering.

    Because Google’s translation tool leaves a lot to be desired — and because the CONSOB order potentially affects thousands of Club Asteria members and was released in Italian — the PP Blog contacted CONSOB by email at 5:49 a.m. (EDT, U.S.A.) today to see if an official English translation was available and to clarify certain CONSOB findings. The Blog addressed CONSOB in English — and is uncertain if its email was received in Italy and understood.

    It’s easy to imagine an Italian reporter who did not speak English and needed the SEC to provide a document in Italian or an SEC employee to answer questions in Italian encountering the same information hurdles.

    At 1:08 p.m. (EDT, U.S.A.) today — approximately seven hours after asking CONSOB for assistance and lacking confidence that its email to CONSOB in Italy had been received and understood — the PP Blog contacted Italy’s U.S. Embassy in Washington by phone. The Blog asked the Embassy’s assistance in translating the new CONSOB order from Italian to English, and the Embassy provided an email address through which the Blog could submit a request for journalistic assistance through the Embassy. At 1:55 p.m. (EDT, U.S.A.), the Blog emailed the Embassy with the CONSOB order as it exists in Italian, and also supplied a link to the CONSOB webpage at which the agency’s order is published. The Blog is awaiting the Embassy’s response.

    An English translation by Google of the CONSOB order is available, but it is highly confusing, if not tortured. CONSOB, for instance, is described in the translation as “THE NATIONAL COMMISSION FOR THE SOCIETY AND THE BAG.” A translation available through Yahoo is no better; it refers to Club Asteria as “Club Starfish.”

    Club Asteria, which trades on the name of the World Bank and has blamed members for its PR problems and a freeze of its PayPal account, has not updated its news webpage since July 21. Members across the globe have been left in an information vacuum for weeks, while the firm directs attention to its glossy “e-Magazine” and asks members to “Imagine the Possibilities with Club Asteria.”

    The PP Blog hopes to publish a comprehensive report about CONSOB’s findings after it hears back from the Embassy.

    For now, the Blog is reporting that suspension orders against two websites CONSOB identified in May as Club Asteria troublespots apparently continue to be in effect and that the sites are serving PDFs in Italian of the Italian allegations.

    Posters on Ponzi scheme forums well-known to U.S. law enforcement claim that Club Asteria has more than 300,000 members globally — and Club Asteria sales pitches on the Ponzi forums and websites independent of the forums are almost incomprehensibly reckless.

    Some members have claimed that a monthly payment of $19.95 to Club Asteria produces a “passive” income of $20,800 a year. In other words, more or less pay Club Asteria a yearly total of $240 in 12 easy installments of $20 a month. Do nothing else unless you want to sponsor new members to make even more money. Receive  nearly $21,000 annually — forever.

    The offers are targeted at the world’s poor.

    Whether the impoverished people of the world made any meaningful money after becoming pitchmen for Club Asteria remains far from clear. What is clear — if the “I Got Paid” posts on Ponzi forums are reliable — is that well-known Ponzi pitchmen cleaned up by recruiting members for Club Asteria.

    In July 2010, the Financial Industry Regulatory Authority (FINRA) issued a warning about HYIP schemes popularized in web forums and through social-media outlets. FINRA called the HYIP sphere a “bizarre substratum of the Internet.”

    Just a month before, in June 2010, the United States and six other member-nations of the International Mass Marketing Fraud Working Group (IMMFWG) issued a warning about global marketing fraud.

    It is known that some promoters race from online scheme to online scheme.

    A photograph of Hank Needham, a Club Asteria principal, appears online in a 2008 sales pitch for the alleged $110 million AdSurfDaily Ponzi scheme. Like Club Asteria, ASD was based in the United States — and also was promoted on the Ponzi boards.

    ASD President Andy Bowdoin was arrested by the U.S. Secret Service in December 2010 after his indictment on felony charges of wire fraud, securities fraud and selling unregistered securities online.

  • Earthquake Affects Eastern United States, Parts of Midwest; Temblor Has Reported Preliminary Magnitude Of 5.9; PP Blog’s Floor Started To Shake, But No Apparent Damage

    Source: Preliminary data on where earthquake was felt: U.S. Geological Survey.

    An earthquake with a preliminary magnitude of 5.9 is resulting in reports of shaking from Washington, D.C., southward to North Carolina, northward to New York and westward to Ohio in the Midwest.

    The PP Blog is produced from a location within the shaking zone and uses a service within a second area of the zone to enable publishing. Several minutes ago — with Maddy the Wonder Puppy in our lap as we were typing — our office floor began to shake. This lasted for only a brief time, and did not appear to have caused any structural damage or a loss of critical publishing services.

    Preliminary reports from the U.S. Geological Survey say the quake was centered about 4 miles SSE of Louisa, Va., and approximately 83 miles SW of Washington.

     

  • Former DNA/Narc That Car Pitchman Jeff Long Now Says Churches May Join Matrix Known As AutoXTen; Company Says It Uses AlertPay To Avoid PayPal ‘Limits’; Web Pitchmen Say $10 May Fetch Nearly $200,000

    U.S.-based MLM pitchman Jeff Long is one of the purported founders of an “opportunity” known as AutoXTen that is collecting money through Canada-based AlertPay and says churches may join the AutoXTen matrix. Early promos for AutoXTen claim members can “Turn $10 into $199,240.”

    Long’s recent flops include Narc That Car, which came under fire from Fox News outlets, and Data Network Affiliates (DNA), a Phil Piccolo-affiliated firm that claimed it was the “MORAL OBLIGATION” of churches to pitch a purported mortgage-reduction program.

    Long himself says churches may join AutoXTen, according to a post bearing Long’s photo on what is billed the AutoXTen Help Desk.

    “Yes a church can join, there would be no issue with this,” the post under Long’s name and photograph read.

    Both Narc and DNA purported to pay members for recording the license-plate numbers of automobiles. After leaving Narc last year and quickly setting up shop with DNA, Long also left DNA.

    AutoXTen appears to be a matrix program.

    “We are only accepting Alertpay,” according to the AutoXTen Help Desk. “Paypal limits the amount of transactions we can make per day, and we would have to cap people off from becoming paid members. ”

    Still in its early days, AutoXTen has claimed a “malicious hack” into its database that “altered and in some cases deleted member data,” according to an email members received in late July.

  • UPDATE: AdSurfDaily ‘Blast’ Apparently Has Begun; PP Blog Has Received Complaints From Members Who Say They Never Agreed To Receive A Fundraising Email; One Member May Be A Witness For The Government In The ASD Ponzi Case

    Andy Bowdoin

    UPDATE: The PP Blog yesterday began to receive complaints from AdSurfDaily members unhappy that they were being solicited to help ASD President and accused Ponzi schemer Andy Bowdoin pay for his criminal defense.

    “Check this out,” one concerned ASD member said. “Andy is asking his victims to pony up in excess of $500K to help [h]is legal defense.”

    Another member said, “How do I put in a complaint? I live in Canada and what works in the USA may not work here. I don’t want any more e-mail’s from these people. I’ve already lost 15,000.00.”

    This morning the Blog received a complaint from a person it believes potentially is a witness against Bowdoin in the government’s Ponzi case.

    “[O]f all the people to send this to he [chose] to send one to me,” the person said. “[H]e needs help!!”

    The fundraising email purports to be “100% compliant with the Can-Spam Act of Nov. 2003” and to have been sent through “NetSuccessInc and/or it’s (sic) subsidary (sic) companies.” It encourages recipients to view Bowdoin’s fundraising message and provides a link to this website:netsuccessinc.com. The email itself is attributed to Bowdoin, and the netsuccessinc website provides a link to yet another Bowdoin fundraising site: AndysFundraisingArmy.com.

    The netsuccessinc.com site is registered in the name of “Millionaire Marketing International.” Tari Steward is listed as the contact person in the domain registration. Millionaire Marketing International is listed in Florida records as a fictitious business registered in 2009. It is owned by Net Success Inc.

    Florida records show that Net Success Inc. was dissolved in September 2010 for not filing an annual report. Steward is listed as an officer of the firm. Records in Florida also show that Steward was an officer of a company known as “Millionaire Marketing Inc.” That firm’s registration appears to have been dissolved in 2009.

    Steward is listed in federal court filings as a potential witness for Bowdoin in the criminal case.

    In a July email attributed to Bowdoin, recipients were advised that Bowdoin had “hired” Steward “and his company Global Online Success Inc.” to create the “Online Fundraising System for my Legal Defense Fund.”

    Bowdoin did not say whether he was paying Steward for his services. Why ASD members now were receiving emails that advised them to visit the netsuccessinc.com. domain, which appears to be owned by a dissolved Steward company (Net Success Inc.) tied to another Steward company (Millionaire Marketing International) that has a familial relationship with another dissolved Steward company (Millioniare Marketing Inc.), was not immediately clear.

    Potentially adding another layer of confusion in Bowdoin’s fundraising bid are these words that appeared in the “blast” email that asked prospects to visit the netsuccessinc.com domain:

    “You can contact us by snail mail at 2533 N. Carson St., Suite 3167, Carson City, NV 89706.”

    Why a company whose Florida registration was dissolved listed a snail-mail address in Nevada was not immediately clear.

  • ONLY ON THE INTERNET: Accused Huckster Andy Bowdoin’s Email ‘Blast’ To Raise 500K In Defense Funds May Begin Today; Recidivist Fraudster And Self-Described ‘Money Magnet’ Also Plans Facebook Appeal

    Accused Ponzi schemer Andy Bowdoin says he plans to open a Facebook fan page this weekend so AdSurfDaily members won't miss out on the opportunity to help him raise $500,000 to pay for his criminal defense, according to an email some ASD members received today.

    Federal prosecutors say Andy Bowdoin scammed investors in a securities swindle in the 1990s. They add that one of his partners in the autosurf trade was accused by the SEC in the 1990s of pitching a prime-bank swindle.

    Bowdoin, 76, was arrested in December on charges that he presided over an autosurf Ponzi scheme known as AdSurfDaily between 2006 and 2008. Among the allegations against Bowdoin was that the original iteration of ASD collapsed in a pile of Ponzi dust — and that Bowdoin simply started a new autosurf scheme to replace the collapsed one.

    After Bowdoin started his replacement fraud scheme in 2007, he then presided over efforts to start at least two additional autosurf fraud schemes. Those criminal efforts became hugely successful in 2008, sucking in at least $110 million, prosecutors said.

    Bowdoin, a self-described  “money magnet,” now is using a video pitch to raise $500,000 for his criminal defense. The accused con man now says an email “blast” to 77,000 ASD members he hopes will provide the funds to pay his lawyers will take place today after having been postponed last week.

    And Bowdoin, who once referred to the U.S. Secret Service and federal prosecutors as “Satan” and claimed God was on his side, says he will launch a Facebook fan page “THIS WEEKEND” to bolster his fundraising efforts, according to an email some ASD members received today.

    Some ASD members have referred to the Secret Service and prosecutors as “goons” and “Nazis.” Others circulated a prayer calling for Bowdoin’s accusers to be struck dead from the heavens.

    In 2008, a federal judge presiding over a civil-forefeiture case involving about $80 million in seized funds linked to ASD was described as “brain dead” if she ruled against the firm.

    After the judge issued a key ruling against against the company, she was described as the operator of a “Kangaroo Court” who was conspiring with another federal judge also said to be operating a “Kangaroo Court.”

    Bowdoin, though, blamed his losses in the civil case — which included orders of forfeiture totaling about $80 million — on a “single, lone” judge.

    He also blamed his original attorneys and prosecutors. Bowdoin’s fundraising video in which he blamed the judge was released on the Internet on July 26, four days after he made his most recent appearance before the judge.

    Although the video initially advertised a July 15 launch date, that launch date was postponed until July 20 — and then until July 26.

  • BULLETIN: FLORIDA — AGAIN: Destroying Hope Through Wordplay: 4 Men Arrested In Alleged Loan-Modification Scam That Used ‘HOPE’ As Acronym; Fraudsters Sucked More Than $3 Million From Distressed Homeowners In Part By Claiming To Be Nonprofit, Feds Say

    HOPE is a scam operating as a purported nonprofit, federal prosecutors said.

    BULLETIN: Federal agents from the Special Inspector General’s Office for the Troubled Asset Relief Program (SIGTARP) have arrested four Florida men on charges they collected millions of dollars from financially distressed homeowners in a loan-modification scam that claimed to be a legitimate nonprofit business.

    Arrested this morning in Florida on federal criminal charges filed in Boston were Christopher S. Godfrey, 42, of Delray Beach; Dennis Fischer, 40, of Highland Beach; Vernell Burris Jr., 51, of Boynton Beach; and Brian M. Kelly, 34, of Boca Raton.

    South Florida has been plagued by various fraud schemes. Federal prosecutors in Washington said the Florida men were charged with conspiracy, wire fraud, mail fraud and misuse of a government seal in the operation of an entity known as Home Owners Protection Economics Inc., which used the acronym of HOPE.

    In reality, prosecutors said, HOPE was a scam linked to a telemarketing operation designed to pick the pockets of the very customers HOPE claimed it was helping.

    Separately, the Better Business Bureau lists 177 complaints against HOPE and a previous action filed against the firm, Godfrey and Fischer by the office of the Florida attorney general.

    Godfrey was the president of HOPE, and Fischer was vice president and treasurer.  Burris trained and managed HOPE telemarketers,  and Kelly was a key phone pitchman who also trained telemarketers, federal prosecutors said.

    Among the allegations is that HOPE collected at least $3 million in illegal up-front payments from distressed homeowners by arranging for telemarketers to lie to prospects.

    A website apparently linked to HOPE appears to have used hyphens to spell out its name in this fashion: H-OP-E.com, according to research by the PP Blog. The domain registration is hidden behind a proxy, but a “Contact” page on the site lists a building address in Delray Beach associated with at least two of the defendants arrested today.

    HOPE appears to have formed its website name with hyphens and letters from the word "hope" while claiming nonprofit status. Federal prosecutors said today that HOPE was a scam linked to a telemarketing operation.

    Home Owners Protection Economics Inc. appears to operate in Florida as a purported nonprofit under a nonplural variation of its name — i.e., Home Owner Protection Economics Inc. in which no “s” is used in the word “Owner.” Godfrey and Fischer are listed in Florida records as “directors” of the firm at 1801 S. Federal Highway, Suite 247, Delray Beach.

    The same address appears on the H-OP-E website registered behind a proxy. The firm also appears to have used the word “HOPE” as part of a phone number.

    “The indictment alleges that from January 2009 through May 2011, the defendants made, and instructed their employees to make, a series of misrepresentations to induce financially distressed homeowners looking for a federally-funded home loan modification to pay HOPE a $400-$900 up-front fee in exchange for HOPE’s home loan modifications, modification services and ‘software licenses,’” prosecutors said today.

    “According to the indictment, these misrepresentations included claims that homeowners were virtually guaranteed, with HOPE’s assistance, to receive a loan modification under the Home Affordable Modification Program (HAMP), which is part of TARP and is a federally-funded mortgage assistance program.  Additional misrepresentations to homeowners included that HOPE was affiliated with the homeowner’s mortgage lender, that the homeowner had been approved for a home loan modification, that homeowners could stop making mortgage payments while they waited for HOPE to arrange their loan modification and that HOPE would refund the customer’s fee if the modification was not successful.  HOPE also claimed that it operated as a non-profit organization.”

    In reality, prosecutors said, “HOPE instructed customers to fill out the application and submit it to their mortgage lender.  According to the indictment, the HOPE customers who did use the provided forms to apply on their own for loan modifications had no advantage in the application process, and, in fact, most of their applications were denied.  Through these misrepresentations, HOPE was able to persuade thousands of homeowners collectively to pay more than $3 million in fees to HOPE. ”

    See BBB report.

  • BULLETIN: Judge Finds That Purported Forex ‘Experts’ Used Bogus Website, Former High School Coaches And J.C. Penney Sales Clerks In Scheme That Funneled Millions To Ponzi Schemer Now Jailed With Bernard Madoff

    EDITOR’S NOTE: Both the CFTC and SEC have encountered incredibly elaborate fraud schemes — some with elements that only can be described as bizarre and deeply disturbing. The story below is based on  a fraud case brought by the CFTC against Gary D. Martin and Brenda K. Martin of St. Augustine, Fla. The Martins are husband and wife. Their company, Queen Shoals Consultants LLC, also was named in the March 2011 complaint. The complaint was filed in the Western District of North Carolina.

    The CFTC now has obtained a consent order against the defendants. Chief U.S. District Judge Robert J. Conrad Jr. presided over the case. In issuing the uncontested order, Conrad highlighted testimony by Gary Martin. Martin’s testimony and the fact set against him and his co-defendants was disturbing in several ways. The PP Blog previously has written about “fraud creep” on the Internet, and the Martin/Queen Shoals case provides another compelling example of viral larceny that traded in part on religion and devastated senior citizens . . .

    A Florida couple scammed investors in an elaborate Forex and commodities swindle in which they posed as “experts” to recruit customers while funneling $22 million to a criminal scammer now serving a 22-year prison sentence in the same North Carolina facility that houses Bernard Madoff.

    Among the alarming consent findings by Chief U.S. District Judge Robert J. Conrad Jr. against Gary D. Martin and his wife Brenda K. Martin were that they used the Internet and pitchmen who had minimal or no trading credentials to fuel a fraud turbine that put money in their pockets as well as the pocket of Ponzi schemer Sidney S. Hanson.

    Hanson controlled a similarly named entity known as Queen Shoals LLC and was running a $33 million Ponzi scheme that targeted senior citizens and people of faith by using QSC and other entities as feeders, according to court filings.

    In March 2011, Hanson, 63, was sentenced to 22 years in federal prison. He is listed as an inmate at the Butner Federal Correctional Complex in Butner, N.C. The Martins and QSC drove $22 million to the Hanson scheme, receiving referral fees of up to 5 percent while maintaining the illusion that legitimate commerce was taking place, according to court filings.

    Said Noth Carolina Secretary of State Elaine F. Marshall upon Hanson’s sentencing, “What made this case even more sickening was that the scam was crafted to appeal to victims through their deeply held religious beliefs.”

    Through a process that remains unclear, the Martins and QSC managed to recruit at least 53 “consultants” to pitch their scheme, according to Conrad’s ruling.

    “Although the Martins represented via the QSC website that ‘[our consultants have a vast background in financial services … ,’ Martin admitted that this representation was false,” Conrad wrote. “Of the 53 known QSC consultants, only 8 to 10 had taken a four day course to become ‘certified estate planners, but even these consultants had no other background in financial services. None had any experience trading forex. Martin admitted that a number of the QSC consultants represented to customers as possessing a ‘vast background in financial services’ were actually former high school coaches, J. C. Penney sales clerks, or insurance salesmen . . .”

    The ruling makes in clear that, not only were unqualified reps acting as QSC pitchmen, the QSC scheme was a fraud itself — one that was enabling an even larger fraud operated by Hanson.

    “All of the representations concerning the Defendants’ alleged experience and expertise in trading forex were false,” Conrad ruled. “Martin admitted in his testimony under oath as the corporate designee of QSC that, contrary to the Defendants’ in-person and website representations to prospective and actual customers, he and his wife had no training or experience in buying or selling foreign currency, commodity futures contracts, options on commodity futures contracts, or any other financial instrument.”

    Promises of “guaranteed” annual earnings of between 8 percent and 24 percent were used by the Martins to lure customers as part of the fraud, Conrad ruled.

    Fancy terminology such as “non-depletion,” “leveraged” trading and “proprietary trading practices” also were part of the fraud, according to court filings.

    Customers also were told that “no less than 18 different profit centers” existed and that the purported profit centers “allowed the creation of the profits claimed to be achieved by the Defendants,” Conrad ruled.

    “Indeed, the website touted that all customer funds were ‘immediately placed into our approximate (sic) 60 sub accounts’ and that the forex accounts traded by the Defendants were ‘profit generating,’” Conrad ruled.

    But “[a]ll of the representations concerning trading and guaranteed profits were false,” Conrad ruled.

    “[Gary] Martin admitted under oath that the Defendants never engaged in any forex trading on behalf of customers,” Conrad ruled. “In fact, Martin admitted that the Defendants never engaged in any type of trading or investing with customer funds. There were no forex accounts, gold accounts, silver accounts, or ’60 sub accounts.’

    “All of the Martins’ representations regarding ‘profitable accounts’ were false,” Conrad ruled. “There was no ‘leveraging’ on behalf of customers, no ‘profit centers,’ and, because there was no trading, there were no profits. Instead, the Martins simply turned over customer funds to Sidney S. Hanson . . . in return for a payment of approximately $1.44 million Martin described in his testimony as a ‘referral’ fee.”

    Read earlier story.

    Read the consent order.

  • URGENT >> BULLETIN >> MOVING: Judge Declares Mantria Corp. A ‘Smoke And Mirrors’ Ponzi Scheme, Says Troy Wragg And Amanda Knorr-Led Firm Acted With ‘Sociopathic Greed’; Defendants ‘Shamelessly’ Raised $54.5 Million Through ‘Blatant Lies’

    Screen shot: Troy Wragg, whom the SEC said was a manager at a janitorial company before becoming CEO of Mantria Corp., next to President Clinton at the annual meeting on the Clinton Global Initiative in New York on Sept. 25, 2009.

    URGENT >> BULLETIN >> MOVING: Using direct, no-nonsense language, U.S. District Judge Christine M. Arguello has ruled Mantria Corp. a Ponzi scheme that operated with “sociopathic greed” to defraud investors of millions of dollars.

    Some investors were encouraged to drain equity in their homes to invest with Mantria, according to the ruling.

    The ruling was a straight-line win for the SEC, which charged the firm, its principals and chief pitchman in November 2009 amid allegations that Mantria had orchestrated a colossal fraud targeted at people interested in “green” energy and protecting the environment. Mantria executives Troy Wragg and Amanda Knorr were charged in the caper, as was pitchman Wayde McKelvy of an entity known as “Speed of Wealth LLC.”

    Arguello found that Mantria had scammed more than $54.5 million “by egregiously, recklessly, knowingly, and shamelessly perpetrating a fraudulent scheme” that used “misrepresentations, omissions, and blatant lies to induce unsuspecting and unwitting victim investors to liquidate the equity in their homes and take out bank loans to invest in Defendants’ scheme, which was nothing more than smoke and mirrors.”

    The judge’s ruling specifically points to internal Mantria emails uncovered by the SEC during the probe.

    One email from Wragg to McKelvy read, “Mantria Speed of Wealth = MSOW = Many Souls Owe Wayde.” Another from McKelvy to Wragg allegedly touting seminar registrations and a new crop of suckers read, “110 registered for tonight 75% names I don’t recognize. Let’s blow them away my brother!” An email attributed to Knorr read, “Let’s just make some f*****g money.”

    Mantria traded in part on the name of former President Bill Clinton, who once presented Wragg an award for commitment to the environment. Prospective investors were shown a video that included footage of Clinton and other famous politicians and business figures.

    Fraud schemes often spread virally by planting the seed that famous people endorse the “opportunities” when they do not. In fraud case case after fraud case, celebrity endorsements, which are used to disarm skeptics and create positive feelings, have been manufactured out of wholecloth.

    In the alleged AdSurfDaily Ponzi scheme, for instance, the U.S. Secret Service said promoters claimed that ASD President Andy Bowdoin had received an important award from then-President George W. Bush. The “award” actually was a memento for campaign donations to the National Republican Congressional Committee, according to court filings.

    The Secret Service is known to have seized a significant volume of email during the ASD probe. Some of it has been described in court filings as incriminating to Bowdoin.

    Reporters who emailed McKelvy for comment after the SEC brought it charges against Mantria and Speed of Wealth received invitations to join the Trump Network multilevel-marketing opportunity.

    “YOU MUST START YOUR OWN BUSINESS Renee!” McKelvy advised a reporter in one email, according to the Denver Business Journal. “What You Have Been Taught About Building Wealth is DEAD WRONG!”

    Read the Mantria ruling on Leagle.com.