PatrickPretty.com

Category: Writing And Branding

  • BULLETIN: FLORIDA — AGAIN (VIA NEW YORK): SEC Says Men Gathered $8 Million Through Lure Of Nonexistent IPO And ‘Contracts’ With Famous Companies; Angelo Cuomo And Recidivist George Garcy Of E-Z Media Inc. Charged With Securities Fraud

    BULLETIN: A recidivist securities offender in Florida and his business partner in New York have been charged by the SEC with fraud in a case that alleges they pumped an IPO that never happened.

    Charged in the civil case were George Garcy, 54, of Aventura, Fla., and Angelo Cuomo, 62, of Staten Island, N.Y. Garcy also is known as Jorge Garcia, and was charged by the SEC in 1997 with improperly selling stock, the SEC said.

    Today’s case was brought in federal court in the Eastern District of New York. It involved an offering fraud for a company known as E-Z Media Inc., the SEC said.

    “Garcy and Cuomo conducted an offering fraud that was rife with false statements and omissions to entice unsuspecting investors,” said George S. Canellos, director of the SEC’s New York Regional Office. “Instead of using the offering proceeds to develop their business, Garcy and Cuomo treated E-Z Media’s bank account as a personal slush fund and diverted millions of dollars to line their pockets.”

    Both Garcy and Cuomo failed to tell investors of E-Z Media Inc. about Garcy’s previous encounter with regulators when he was a California resident, the SEC charged.

    As part of the newly detected fraud, E-Z Media investors were told the firm had “contracts” with Heineken, Anheuser Busch and Aramark Corp. for its beverage and -food carrier product, but no contracts existed, the SEC said.

    Investors also were lured by the promise of a profitable IPO, but E-Z Media “never took even the basic steps to prepare” for an IPO, the agency said.

    The scheme attracted “at least” 200 investors and gathered about $8 million between April 2003 and March 2009, the SEC charged.

    Garcy and Cuomo diverted about half of the scheme proceeds to themselves and family members, the agency charged.

    A carrier patent E-Z Media purportedly held also was used to lure investors, but the patent was contingent upon a $14.5 million payment to Cuomo and may not have been valid to begin with because “Cuomo had previously transferred his ownership rights” to his sister, the agency charged.

    Cuomo’s sister,  Judith Guido, 55,  received at least $1.7 million from the scheme, the SEC said. She has been named a relief defendant, as have two sons of Cuomo: Ralph Cuomo, 37, and Vincent Cuomo, 31.

    The Cuomo brothers received a combined total of at least $240,500 from the scheme, the SEC said.

    Also named a relief defendant was attorney Joseph Lively, 55, of Farmingdale, N.Y. Lively received at least $120,000, the SEC said.

    The SEC described the payments to the relief defendants as ill-gotten gains, saying none of the relief defendants had any legitimate claim to the money.

     

  • BULLETIN: Google Says Justice Department Is Investigating Its Advertising Program; Search Giant Sets Aside $500 Million, Notes ‘Potential Resolution’

    DISCLOSURE: Until Jan. 9 of this year, the PP Blog displayed Google ads. See this post.

    BULLETIN: Google disclosed in a regulatory filing yesterday that its advertising program was under investigation by the U.S. Department of Justice. The company announced that it has taken a charge of $500 million “in connection with a potential resolution.”

    The Mountain View, Calif.-based firm provided few details of the probe, and did not say whether the investigation was targeting AdWords, AdSense or another facet of its advertising platform. The charge reduced Google’s first-quarter net income to about $1.8 billion.

    AdWords is an auction-based system that enables advertisers to place ads on the Google network; AdSense is a program that distributes the ads. AdSense publishers earn fees when website visitors click on the ads.

    This ambiguous note appeared in the filing:

    “In May 2011, in connection with a potential resolution of an investigation by the United States Department of Justice into the use of Google advertising by certain advertisers, we accrued $500 million for the three month period ended March 31, 2011. Although we cannot predict the ultimate outcome of this matter, we believe it will not have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows.”

    Google did not identify the “certain” advertisers, say whether the advertisers also were under scrutiny or were viewed by the government as potential victims. Nor did the firm say when it had come under investigation or how long it had known about the probe.

  • RECOMMENDED READING/VIEWING: Washington Post/Bloomberg Report On ‘The Ponzi Schemer Next Door’; FINRA/AARP Share Tale Of Purported ‘Bank President’ Who Lured Victims While ‘Craving Cocaine’ At Pay Phones From Which He Set Up Marks

    This man purported to be a bank president. In reality, he was an investment fraudster who used pay phones to lure people into scams as he was craving cocaine, according to a remarkable video airing on the Internet and PBS stations.

    The Washington Post and Bloomberg published Bob Carden’s story about how smart people get sucked into investment scams. The story is titled, “Investment fraud isn’t relegated to Wall Street: Beware the Ponzi schemer next door.”

    Carden produced the video “Tricks of the Trade: Outsmarting Investment Fraud.” Editor John Warnock assembled the package, which shows some of the things FINRA and AARP are doing to educate the public about the plague of fraud schemes and how to avoid them.

    Read the story here.

    And make sure you set aside some time to watch Carden’s pointed video (below), which is running on New Hampshire Public Television and elsewhere. The video shows footage of actual scammers talking about how they plied their trade and includes audio of scammers making pitches, including rude ones. You’ll learn about the buttons they push, the manipulation tactics they employ and how people who would seem to know better get duped.

    The video features commentary from psychologist Robert Cialdini, commentary from fraud victims, commentary from fraud perpetrators and commentary from fraud-busters, including Joe Borg of the Alabama Securities Commission.

    Borg, among other things, is famous for prosecuting the case against Greater Ministries International, a colossal Ponzi scheme that traded on faith and operated from Florida.

    Among the many interesting things in the video is footage from the old Candid Camera TV show in which passersby were persuaded the entire state of Delaware was “closed.”

    Watch the full episode. See more Making Sense New England.

  • MOTHER’S DAY FANTASY POST: Legendary MLM Scammer Phil Pumpernickel Says He’ll Package ‘Troll Spray’; Fraudster Announces He’ll Coax Affiliates To Trade On Donald Trump’s Name To Reel In The ‘Birthers’

    EDITOR’S NOTE: The “story” below is not real. The PP Blog occasionally presents fantasy posts, parody and satire as a means of advancing the discussion about issues in the world of online crime and marketing schemes.

    SOUTH FLORIDA (PPBlog) — Phil Pumpernickel, the unapologetic scammer who once started an “opportunity” that hawked caskets MLM-style after telling the world he was moved to do so after being reduced to tears by the “fine Christian” conducting his “sainted grandmother’s” funeral, is getting in the “troll spray” business.

    Pumpernickel said he decided to “seize the moment” and launch a new frauduct after being impressed by a photographic depiction of troll spray used as an avatar on Scam.com by a fellow MLM aficionado doing battle with critics.

    “Those people who speak out against MLM and all the so-called ‘scams’ are just a bunch of bigots,” Pumpernickel said. “They’re all a bunch of mindless trolls. Many of them not only are anti-MLM, but are anti-American.

    “I mean, they actually think Obama was born in the United States,” he protested. “I’m so glad I saw that avatar. It’s important for trolls to be put in their place and dressed down in public. All the best MLMers are doing that now — that and coming up with great, highly descriptive terms such as ‘bigots’ and ‘haters’ and ‘whiners’ to describe the self-appointed critics. All of these things are helping  to paint MLM in the most favorable light. The pro-MLMers at Scam.com are PR geniuses, I’ll tell you, and I can’t thank them enough. In any event, I decided to build an entire new scam around a ‘troll-spray’ theme.”

    Although the MLM casket business failed during “prelaunch” in no small measure “because of the trolls,” Pumpernickel said, the troll-spray business would be different.

    “What I’m going to do,” he said, “is plant the seed that affiliates should use more pictures of Donald Trump this time to help sanitize the opportunity. I can get the ‘Birthers’ that way, and make people believe Trump has endorsed the program.”

    The failure of affiliates to take full advantage of Trump’s celebrity to hawk the casket “opportunity” was one of its biggest shortcomings, Pumpernickel conceded.

    “People can call me a lot of things — and I’m well aware of my reputation as a serial scammer — but they’ll never be able to claim this time that my affiliate’s efforts to trade on Trump’s name without authority were insufficient,” the celebrated scammer said. “My fellow scammers made it perfectly clear to me that I need to ‘Trump’ up my next fraud scheme, and I listened.”

    Pumpernickel added that he was considering advice from a “group” of fellow scammers who recommended he add the names and images of Oprah Winfrey and former Presidents Bill Clinton and George W. Bush to the troll-spray promos. He declined to name members of the group, except to say “they are all veteran scammers who’ve made millions and millions and millions.”

    But Pumpernickel hinted that there is some early dissension in the ranks about how best to proceed with the troll-spray scam.

    “Some of these people are convinced that trading on Oprah’s name without permission ‘works’ because of the chain-letter scams and the impressive success of the recent acai-berry scams,” Pumpernickel said. “My take is a bit different at the moment, given what the FTC did in the acai cases, but I’ve agreed to take the matter under advisement. In this early, pre-prelauch stage, though, I’m given to believe that Oprah may be a little too hot right now. The FTC is playing hardball.”

    Pumpernickel said he was less concerned about using the names of the former presidents.

    “Hey,” he said, “the Mantria people used Clinton. And the AdSurfDaily people used Bush. No one can doubt the success of those schemes — and the scams are old enough now that trotting out the Presidents again to plant the seed that they endorse troll spray just might be viewed as a fresh approach.”

    Among the lies he intended to make go viral were that the troll-spray product not only was useful in keeping anti-MLM trolls at a distance in person and on forums, but also could be used to improve a car’s gas mileage, grow apples the size of “Washington state” and cure cancer, Pumpernickel said.

    “What I’ll do,” he revealed, “is simply plant the seed that the product has all of these benefits. My affiliates have proven over time that they can be relied upon to do no checking or independent research whatsoever. Marketing online is beautiful in this way. They’ll take the ideas I plant, and before it’s all over, they’ll have Trump as the president of the company, Bush as director emeritus and a famous cancer hospital not only saying the product cures the disease, but also that the entire hospital staff is warding off the disease by consuming apples that are bigger than pumpkins.”

    Ultimately, Pumpernickel said, “the goal of any good scam is to plant the seed that fabulous wealth is possible.

    “We’ll do that, too, of course,” he promised. “I’ve had success in the past by rambling on and on about commissions 10 levels deep and talking about the ‘millions’ I’ve made. But the best viral scams are the ones that mix those elements with what I call the ‘Real Unreal.’

    “For example, Trump is a ‘real’ person,” Pumpernickel said, “but it’s ‘unreal’ that he”ll be involved in the troll-spray product. My best promoters will be the ones who make the best use out of all the ‘Real-Unreal’ elements out there. I mean, the possibilities are endless.”

    Pumpernickel said he was in the process of negotiating with a vendor to brand and package the troll spray, which a newly created shell company likely would market for $19.95 per can, with volume discounts if the product is purchased by the case.

    Prospects will be told they can join the opportunity for “free” and will be encouraged to invite their mothers to do so.

    “It’s always best when we have a good group of mothers helping us market our scams,” Pumpernickel said. “We should be ready to start the prelaunch by Father’s Day next month. If something goes wrong with the actual prelaunch and launch and people don’t get paid, I’ll just change the rules and tell the folks to pretend it never happened. I learned that by observing the launch and prelaunch of Data Network Affiliates last year.

    “And if people ask too many questions,” he concluded, “I’ll plant the seed that I know leg-breakers and call all the critics ‘bigots.’ It’s great PR.”

  • UPDATE: Promo For Club Asteria Says Earnings ‘1000% Guaranteed,’ Introduces ‘Benefactor’ Program; Pitches Purportedly Show How To Earn ‘Huge Amount Without Doing Nothing’

    At least 20 charts showing a scenario for progressive Club Asteria earnings appear in this Blog promo. The promo, which is hosted on Blogger, Google's free Blogging service, was the subject of a forum post two days ago that appears to have been deleted. Although the forum post is missing, the Blog and the promo remain.

    Club Asteria, a Virginia-based company that acknowledged last week that it had liars selling its “opportunity,” appears to be having difficulty controlling its own members. A multisite promo that includes a promise of guaranteed earnings coupled with a “benefactor” program that encourages members to pay prospects’ fees to join the program now has surfaced.

    A forum post that appeared Friday claimed Club Asteria earnings were “1000% Guaranteed.” The post included a link to a Blog and videos that promote Club Asteria. Although the forum post itself appears to have been deleted, the Blog and videos remain.

    Among the text claims in the promo is that Club Asteria members can be “100% passive” and earn money. It also claims that benefactoring members into Club Asteria by paying their fees for fives months is something “we expect.”

    Such claims lead to questions about whether Club Asteria is selling unregistered securities as investment contracts and whether members are bribing prospects to join while at once encouraging new members also to bribe prospects in an endless cycle.

    How much can a person earn by paying Club Asteria $20? Here are the answers, according to the promo. (Verbatim.)

    • Without any work Your Guaranteed Earnings are as Follows (A short List) : –

    12th months: $683.72
    18th months: $4,746.11
    20th months: $7,933.50
    From 19th months onward, you earn $400/wk
    Giving you an Annual income of: $20,800
    Benefactor Focus: Upon reaching a point of financial comfort, we expect each of our members to benefactor a minimum of 10 people by paying their $20 Gold Membership Fee for 5 months. At that time their membership fee will be fully funded by their progressive earnings from within our system. Our desire is to have One Million people benefiting from our club within 5 years and for you to become financially free within 2 years. This automatically happens as your spirit of generosity spreads throughout the world.

    "Guaranteed" earnings and a "Benefactor" program are being outlined in this current promo for Club Asteria.

    In addition, the promo preemptively claims “Club Asteria is NO PONZI.” It also features at least 20 charts that outline progressive earnings during a 20-month window and notes that “spread sheets with various combinations as to how 100% passives too can make money to the tune of $400 and above every week” are available.

    The Club Asteria referral ID in the promo is a number in excess of 300,000. Members have said the program, which trades on the name of the World Bank, is on its way to recruiting 500,000 members, with 1 million members the ultimate, short-term goal.

    At least one other thing about the promo is incongruous: Although it claims earnings are guaranteed, it also claims the earnings “scenario” presented is “based on present conditions” and that earnings are not guaranteed.

    See earlier story.

    Although this forum post promoting Club Asteria appears to have been deleted, a Blog promo to which it linked remains. The forum post promised "1000% Guaranteed" earnings of $1,600 a month," claiming members can make "huge" sums "without doing nothing." The Blog post is at odds with itself in that it both promises "Guaranteed" earnings and says earnings are not guaranteed.

  • Pittsburgh Steelers Issue Statement On Controversial ‘Tweets’ Of Running Back Rashard Mendenhall After Successful U.S. Action Against Osama Bin Laden

    Pittsburgh Steelers’ President Art Rooney II, the son of U.S. Ambassador to Ireland Dan Rooney, has issued a statement in response to controversial Tweets attributed to Steelers’ running back Rashard Mendenhall after the United States killed Osama bin Laden two days ago.

    The Tweets have sparked a web firestorm and enraged one of America’s hardest-working cities. Pittsburgh, a community of both brawn and brain, does not suffer fools gladly.

    And it does not like to see its storied football franchise and its beloved Rooney family drawn into controversies.

    “I have not spoken with Rashard so it is hard to explain or even comprehend what he meant with his recent Twitter comments,” Art Rooney said in a statement on the Steelers’ website. “The entire Steelers’ organization is very proud of the job our military personnel have done and we can only hope this leads to our troops coming home soon.”

    Bin Laden’s terrorist group killed nearly 3,000 people in the United States on Sept. 11, 2001. Bin Laden was found Sunday hiding in a mansion in Pakistan. The news of his death sparked spontaneous street celebrations in U.S. cities.

    Did Mendenhall use Twitter to elicit sympathy for the terrorist leader?

    “What kind of person celebrates death?” a Tweet attributed to Mendenhall read. “It’s amazing how people can HATE a man they have never even heard speak. We’ve only heard one side . . .”

    Another Tweet attributed to Mendenhall seemed to touch on a conspiracy theory that raised doubts about what really happened at the collapsed Twin Towers in New York City nearly a decade ago.

    “We’ll never know what really happened,” a Tweet attributed to Mendenhall read. “I just have a hard time believing a plane could take a skyscraper down demolition style.”

    Other Tweets attributed to Mendenhall appeared to suggest Americans had judged Bin Laden too harshly after the murderous 9/11 ambush from the skies.

    “Those who judge others, will also be judged themselves,” one Tweet read.

    “I believe in God,” read another. “I believe we’re ALL his children. And I believe HE is the ONE and ONLY judge.”

    The Twitter site did not explain whether the United States should have done nothing after being attacked on its own shores in September 2001. Nor did it explain whether the administrations of President George W. Bush and President Obama had any duty to defend the United States in the aftermath of the devastating attacks or seek justice for the American people and the families of victims of the attacks.

    The burgeoning Mendenhall flap was occurring against the backdrop of an appearance today on Capitol Hill by U.S. Attorney General Eric Holder before the House Judiciary Committee.

    “As I have stated often, no aspect of our work is more important — or more urgent — than protecting the American people,” Holder told the panel. “This is our top priority — and our most fundamental responsibility.

    “Two days ago — with the death of Osama bin Laden, the leader of al Qaeda and the world’s most wanted terrorist — our nation made historic progress in fulfilling this responsibility, and in achieving justice for the nearly 3,000 innocent Americans who were murdered on September 11, 2001,” Holder said.

    Steelers’ owner Dan Rooney, a lifelong Republican, was appointed U.S. Ambassador to Ireland in 2009 by President Obama, who ordered the action against bin Laden. Navy SEALs carried out the operation, and the President lauded the “tireless and heroic work of our military and our counterterrorism professionals.”

    The embassy’s website features information on the action and the death of bin Laden. Ambassador Dan Rooney praised the President and the action.

    Ambassador Dan Rooney

    “I am proud and grateful for the President and all the men and women of intelligence and military communities for their constant demonstration of courage and bravery,” Rooney said in a statement on the embassy website. “Their actions this weekend have made the world a safer and more just place to live for all humanity.”

    “Capturing or killing bin Laden had been a U.S. goal even before the 2001 attacks,” the website noted. “He declared war on the United States and its allies in 1996, and al-Qaida was considered responsible for the 1998 bombing of U.S. embassies in Kenya and Tanzania and the 2000 suicide attack against the USS Cole in Yemen.”

    Mendenhall is regarded as one of the top young runners in the National Football League. The Pittsburgh Post-Gazette reported that Mendenhall earlier had used Twitter to compare “the lot of NFL players to that of slaves in the old South.”

    The Post-Gazette reported in 2008 that Mendenhall had a five-year, $12.55 million contract with the Steelers that guaranteed him $7.125 million.

    Pittsburgh took great pride in Obama’s nomination of Dan Rooney to the embassy post.

  • BULLETIN: 3 New Defendants In ‘Red Sea Management’ Case Have Been Arrested; New Charges Filed Against Original Defendants In Alleged Stock-Manipulation Scheme Over Which Purported One-Time ‘Consulate’ To Nonexistent Nation Of ‘New Utopia’ Allegedly Presided

    BULLETIN: Federal agents have arrested three new defendants in the alleged Red Sea Management stock-manipulation scheme. The arrests occurred in three U.S. states last week, and one of the new defendants already was in custody for a separate scam, federal prosecutors said.

    Arrested were Timothy Barham Jr., 43, of Henderson, Tenn.; Nathan Montgomery, 30, of Henderson, Nev.; and Ryan Reynolds, 39, of Dallas. Reynolds already was in custody. The SEC charged him in 2008 in a separate scam, according to records. He is a defendant in at least two separate SEC actions.

    Red Sea allegedly was operated by Jonathan Curshen, a convicted felon and the one-time purported “honorary counsel” of St. Kitts-Nevis to Costa Rica. Curshen, 46, of Sarasota, Fla., also has been referenced as a purported “consulate” to the bizarre, nonexistent nation of “New Utopia.”

    New Utopia has purported to be an underwater nation that will rise out of the Caribbean on concrete stilts.

    On March 10, the PP Blog received a bizarre communication from a person who purported to be “Mr. Protector” and complained about the Blog’s coverage of the New Utopia fantasy, which the SEC said was dreamed up by American Lazarus R. Long more than a decade ago.

    Long has described himself as a “Prince.” New Utopia, which purportedly is located undersea “approximately 115 miles west of the Cayman Islands,” has offered driver’s licenses for $140.

    The communication both invited and uninvited the Blog to witness the debut of the New Utopia “Palace” on a date uncertain.

    “How about we print your words out about New Utopia in size 12 font and then, when New Utopia Construction begins, we can invite you there in front of the Palace and watch you eat the words and the paper they are written on?” the person wrote.

    In the very next paragraph, however, the Blog was uninvited.

    “[H]ow will we know to not allow you to visit The Principality of New Utopia?” the person inquired. “We will find a way of that be assured.”

    Read the Justice Department statement on the new defendants and a superseding indictment against the original defendants. The original defendants included Curshen; attorney Michael Simon Krome, 49, of Long Island, N.Y.; Ronald Salazar Morales, aka “Ronny Salazar,” 39, of Costa Rica; Robert Lloyd Weidenbaum, 44, of Miami; and Eric Ariav Weinbaum, 37, and Izhack Zigdon, 47, both of Israel.

    The case was brought by elements of the interagency Financial Fraud Enforcement Task Force created by President Obama in November 2009.

  • PICTURE STORY: Club Asteria Promoters Claim Program Is ‘Passive’ Investment Opportunity; ‘Single Account’ Said To Return ‘About $20,000 Per Year’; Why Not Open Second Account In Same Household? Affiliate Asks

    Club Asteria members now say the firm, which trades on the name of the World Bank, suddenly threatened recruits for making false claims about the program.

    The PP Blog reported on April 4 that the program, which is being pumped on the Ponzi boards and the personal websites of thousands of Club Asteria members, was routinely being positioned as a “passive” investment opportunity. Some affiliates have tried to plant the seed that Google, Yahoo, MSN and America Online endorsed the program.

    Such claims not only raise questions about whether Club Asteria is selling unregistered securities as investment contracts, but also raise questions about how much revenue the Virginia-based firm has raised based on the lies and misrepresentations of its own members.

    Liars’ accounts will be terminated, the company reportedly advised members in recent days. What prompted Club Asteria to issue the warning was unclear. Also unclear is whether the firm has any means of determining how much revenue it has generated based on the false, misleading or dubious claims of its membership base, which is worldwide in scope.

    The company provided no guidance to members on how they could be certain the money they received from Club Asteria was clean. Some of the forums from which the “opportunity” is being promoted are referenced in federal court filings as places from which Ponzi schemes are promoted.

    “YOU MUST REMOVE THIS MATERIAL IMMEDIATELY AND CEASE THESE ACTIVITIES OR YOUR ACCOUNT WILL BE SUSPENDED AND/OR TERMINATED AND POSSIBLE LEGAL ACTION AGAINST YOU WILL BE INITITATED (sic),” the firm reportedly warned in all-caps.

    Club Asteria did not specify what form any legal action against its members would take or how many members received the warning. Nor did the firm say who would pay for any litigation that ensued or how international members would be served process. International litigation can be extremely costly and time-consuming.

    Also unclear was whether Club Asteria planned to file police reports or notify agencies such as the Federal Trade Commission about the problems it claims its members are creating.

    “YOU HAVE 72 HOURS TO RESPOND TO THE EMAIL ADDRESS WITH LINKS OR OTHER DOCUMENTATION SHOWING YOUR SITE IS IN COMPLIANCE,” Club Asteria reportedly continued.

    Promoters claimed that Club Asteria specifically warned members that they:

    • [C]annot say or imply that a Club-Asteria member can earn money without working for it.
    • [C]annot say or imply that there is some minimum guarantee of how much money you will earn every week.
    • [C]annot make or imply income projections of ANY type. Only income examples found on the Club-Asteria site and in official member materials may be used at any time.
    • [C]annot say or imply that Club-Asteria membership is a passive investment or imply that this is an investment of any type.
    • [C]annot say or imply that someone should join if they have no interest in the benefits of our products, programs and services.
    • [C]annot invite, solicit or encourage others to join just because of our rewards program.
    • [C]annot create your own website and say anything you want about Club-Asteria.

    Research suggests, however, that thousands of websites globally have positioned Club Asteria as a “passive” investment program and published earnings suggestions, promises or guarantees. Each and every claim puts the enterprise at risk, and unringing the bell after months and months of dubious claims may be a tall order.

    The screen shots below are just a small sampling of the kinds of claims that appear online about Club Asteria. Each of the sites was active as of this morning, despite the purported warning Club Asteria issued last week.

    Purportedly quoting an upline sponsor, this Club Asteria pitch talks about the great expansion of the program and claims "completely passive members make very good money." The program is designed, according to the pitch, to deliver "returns" of $400 a week — or "about $20,000 per year." Opening a second account in the household "will simply double" the $20,000, according to the promo.
    This pitch urges prospects to create income for life and earn "$400 Every Week."
    This YouTube pitch for Club Asteria claims the opportunity pays "$400 USD EVERY WEEK" and suggests PayPal can help members fund their accounts. YouTube appears to have removed the soundtrack from the promo because it violated the copyright of Warner Music Group (WMG).
    This Facebook promo advertises a "minimum of about $1,600 per month forever."
    Club Asteria, according to this promo, enables members to "Earn 100% Passive." It also claims "80% is reinvested."
    Another pitch that highlights the purportedly "passive" nature of Club Asteria. This promo references the name of the World Bank and claims the program is "Real, Safe and Legal." Meanwhile, the promo makes the preemptive claim Club Asteria is not a "Ponzi." Many promoters preemptively have claimed the firm is not operating a Ponzi. Club Asteria does not publish verifiable financial data.
    This promo declares that Club Asteria "is not just a passive income."
    Club Asteria advertised in "Jobs" listings in Germany. The ad claims members are "guaranteed to earn $400 a week without much effort."

  • BULLETIN: Walmart Enters Home-Delivery Grocery Business; Retail Giant Testing ‘Walmart To Go’ Concept In California; News May Be Potentially Devastating To MPB Today Affiliates Because Of MLM’s Up-Front Fees, High Shipping Costs And ‘Dry Goods’ ONLY Policy

    BULLETIN: Walmart said today that it was testing a grocery home-delivery concept known as “Walmart To Go” in the San Jose, Calif., market. Walmart.com visitors can test the availability of home delivery in their area by entering their address and Zip code into a form at the Walmart.com website. (Link at bottom of story.)

    The news may cause an uproar among affiliates of a Florida-based MLM company known as MPB Today, which charges recruits $200 to become MLM affiliates, assesses a website fee, does not deliver perishable items and charges a shipping and handling fee that could cause the price of $200 worth of “dry goods” groceries to soar to $300 or more.

    MPB Today affiliates say the company dispenses $200 Walmart gift cards to enrollees. If Walmart’s own home-delivery business takes off, it could destroy any incentive for MPB Today prospects ever to do business with the MLM because the Walmart program eliminates the middleman and has features that MPB Today cannot touch, including the delivery of fresh food at a far lower cost.

    A current promo for Walmart To Go” shows that the company is charging a delivery fee of as little as $5, offering a “Freshness Guarantee” and making items such a frozen foods and fresh produce available. One product viewed by the PP Blog was a 6-oz. package of Foster Farms Grilled Chicken Breast Strips for $2.50.

    The website outlined the nutritional content of the product and included a label titled “Nutrition Facts.” As an opening offer, the company published a coupon good for free delivery on a customer’s first grocery order of $49 or more. A photograph of a fresh tomato adorned the offer, and Walmart also said that items such as eggs, dairy products, fresh produce, meat and over-the-counter pharmacy items were available.

    Details about how Walmart would roll out the new venture were not immediately clear.

    Walmart created a logo for Walmart To Go. The logo features an artsy depiction of a shopping cart. “Need some inspiration?” the company asked. “Start with one of our quick lists.”

    The “quick lists” reference included a link that opened a browser window that showed customers a gateway to ordering fresh food for themselves in multiple categories. The page also featured a tab through which customers also could order pet food and items such as laundry detergent.

    Many MPB Today members have told prospects that the MLM company was part of a partnership with Walmart. Walmart did not confirm those claims, and today has launched its own home-delivery venture.

    MPB Today affiliates have been the source of bizarre claims and sales presentations, including one that depicted President Obama and Secretary of State Hillary Clinton as Nazis. First Lady Michelle Obama was depicted in the MPB Today promo as having experienced an embarrassing gas attack in the Oval Office after sampling “beans” at a Sam’s Club Store.

    Other MPB Today affiliates have claimed there are liars and thieves in the organization, and it was important for prospects to register for the “program” under an affiliate who would not misrepresent the truth in order to gain a downline commission.

    MPB Today itself said it was possible for an affiliate who made a “one-time” $200 purchase to receive free groceries for life. Critics immediately scoffed at the claims.

    Visit the Walmart To Go page.

  • BULLETIN: ‘Fugitive’ TV Analyst And Commodity-Pool Operator Now Faces Order Demanding $12.5 Million In Restitution And Penalties In CFTC’s Civil Case; Brian Kim Was Indicted In February

    BULLETIN: A trader and TV analyst declared a “fugitive” in February by Manhattan District Attorney Cyrus R. Vance Jr. now faces a restitution order and penalties totaling more than $12.5 million in a lawsuit filed by the CFTC.

    Brian Kim, 35, the operator of a hedge fund known as Liquid Capital Management LLC, appeared on CNBC at least three times in 2009. While reporters were asking Kim to analyze marketplace developments and share his thoughts with the TV audience, he was at the helm of a complex, ongoing Ponzi and fraud scheme and presiding over a cover-up, according to court filings.

    U.S. District Judge Denise L. Cote entered an order against Kim April 15 that requires him to pay more than $3.1 million to customers he defrauded and a trebled financial penalty of nearly $9.4 million.

    “The order finds Kim and LCM liable as to all violations alleged in the CFTC’s complaint,” the agency said.

    Kim’s whereabouts was not immediately clear.

    In February, investigators said Kim’s fraud was occurring even as he was holding forth on TV on issues such as the Dubai debt crisis, derivatives trading in Asia and so-called “dark pools” that provide institutional investors outlets to trade anonymously in murky conditions.

    “The defendant induced his clients to make risky and speculative investments by portraying himself as an accomplished trader and money manager,” Vance said in February. He added that a bench warrant had been issued for Kim’s arrest.

  • FTC: Acai-Berry Scammers Created ‘Fake’ News Sites And Traded On Famous Name Of ‘Consumer Reports’ To Fleece The Masess; Letters ‘CNN’ Were Used In Web Domains In Illinois, State AG Says

    This "fake" news site is now known as "Exhibit A" in the FTC's case against alleged acai-berry scammers.

    EDITOR’S NOTE: If this federal and state action doesn’t get the attention of the out-of-control, direct-sales crowd that divines itself the right to plant the seed that an “offer” is endorsed by famous companies and people, well, perhaps nothing will. Even as this story is being written, affiliates of Club Asteria, a purported “passive” investment company, are planting the seed that the firm is endorsed by Google, Yahoo, MSN and America Online. Club Asteria promoters also routinely trade on the name of the World Bank. Club Asteria is being pitched on forums populated by serial Ponzi scheme promoters.

    UPDATED 2:23 P.M. EDT (U.S.A.) One of the most cherished brand names in the United States — “Consumer Reports” — was appropriated by acai-berry hucksters to confuse the marketplace and rip off customers, the FTC charged today.

    As the PP Blog reported Friday in advance of the FTC’s formal news conference this morning, “fake” news websites also were used in the alleged scam. The FTC announced today that it was seeking an asset freeze against 10 acai-berry operations. The actions were brought in federal courts in Washington state, Illinois, Michigan, New Jersey, New York and Georgia.

    Illinois brought its own action at the state level against an alleged acai huckster in Sauk Village, near Chicago.

    “Almost everything about these sites is fake,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection. “The weight loss results, the so-called investigations, the reporters, the consumer testimonials, and the attempt to portray an objective, journalistic endeavor.”

    Lisa Madigan, the attorney general of Illinois, said the scheme also masked a continuity-billing fraud while confusing the public about what is real and what is not.

    “Consumers across the country visit these fake marketing sites that are carefully — and illegally — disguised to represent professional news organizations, only to wind up unknowingly debited for extra diet products,” Madigan said. “These Internet con artists are profiting from their purposely deceptive marketing ploys.”

    Consumer Reports itself was affected in the brazen scheme, according to court filings. The publication, which is published by Consumers Union of Yonker’s, N.Y., is an American treasure that readers rely on for unbiased news and reviews.

    The magazine filed an affidavit in the FTC case that advised a federal judge about the unauthorized trading on its name.

    The website consumerproductsdaily.com, which has no tie to Consumer Reports or any of its websites, used language such as “As seen on . . .” followed by the logos for Consumer Reports and other news outlets, Consumer Reports said.

    “Consumers Union has no affiliation with consumerproductsdaily.com or with any other website using the Consumer Reports logo in a similar fashion,” Consumer Reports said. “Consumers Union has never licensed or in any way authorized the use of the Consumer Reports trademark in connection with the website consumerproductsdaily.com or with any website employing a similar format.”

    Injury to the Consumer Reports brand and confusion about perceived ties to acai-berry companies were not just limited to the consumerproductsdaily.com site, according to the affidavit.

    “Additionally, Consumers Union has received numerous complaints and inquiries from consumers regarding web sites with a format similar to consumerproductsdaily.com, including consumerdigestweekly.com, weeklyhealthnow.com, healthnews10.com, and health9news.com,” Consumer Reports said. “Many of the complaints voiced concern that these web sites were infringing the Consumer Reports trademark, while other complaints questioned Consumer Reports’ affiliation with these web sites.”

    For its part, the FTC said the “fake news sites” also used titles such as “News 6 News Alerts,” “Health News Health Alerts” and “Health 5 Beat Health News.”

    “The sites often include the names and logos of major media outlets — such as ABC, Fox News, CBS, CNN, USA Today, and Consumer Reports — and falsely represent that the reports on the sites have been seen on these networks,” the agency said.

    How slow were some affiliate marketers to take the clue that this form of marketing had come on federal radar screens? Even as marketers were using the name of Consumer Reports to hawk the alleged acai scam, the magazine was warning readers about  fake news sites pitching acai products.

    Even after today’s actions, some affiliates are continuing to use the very template the government now describes as “Exhibit A” in a fraud case.

    Charged by the FTC were Beony International LLC, Mario Milanovic and Cody Adams; Zachary S. Graham, Ambervine Marketing LLC and Encastle Inc.; Intermark Communications Inc. also doing business as Copeac and IMM Interactive; Ricardo Jose Labra; Thou Lee, also doing business as TL Advertising; Circa Direct LLC and Andrew Davidson; Coulomb Media Inc. and Cody Low, also known as Joe Brooks; DLXM LLC, and Michael Volozin, also known as Mikhail Volozin; Charles Dunlevy; Tanner Garrett Vaughn, also doing business as Lead Expose Inc., and Uptown Media Inc.

    Named in Madigan’s complaint in Illinois was Ishmael Lopez Jr. Investigators there said at least two sites linked to Lopez used the letters CNN in their domain names, according to the complaint.

    View government “Exhibit B,” which the FTC says outlines how the scheme was designed to work.