A Florida man who served jail time in an earlier scheme in California has been arrested by the Miami Beach Police Department and agents from the Florida Office of Financial Regulation (OFR), amid allegations he swindled investors in a “yogurt-based product to re-grow hair,” OFR said.
Joseph P. Fox, president of Telogenesis Inc. of Miami Beach, was charged with Grand Theft and Organized Scheme to Defraud in his sale of Telogenesis stock.
Beginning in 2007, Fox sold Telogenesis stock for $1,000 a share to at least 59 investors. All in all, he gathered $380,000 in the scheme and used most of the money to support his lifestyle, OFR said.
In 2002, OFR said, Fox was charged with grand theft in California and served 270 days in jail.
The Telogenesis scheme was similar to the California scheme, OFR said.
Fox made “false representations” about the financial soundness of Telogenesis and its development of the yogurt-based hair product, positioning it as “a breakthrough in the cosmetic industry,” OFR said.
A website from which a Telogenesis product was pitched as being available “very soon” for $1,999 included links to medical journals that appeared to have no tie to the product — and also to Oprah Winfrey’s website.
Winfrey’s site also appeared to have no tie to the Telogenesis product, which was advertised on IGrowHair.com
It is not uncommon for hucksters to try to create the appearance that prominent medical organizations, celebrities and the government endorse products when they do not.
TVI Express, an MLM company whose pitchmen have used images of business titans Warren Buffett and Donald Trump to plant the seed they backed the firm, has come under criminal investigation in South Africa, according to web records and a media site.
Buffett and Trump are believed to have no ties to the firm.
News of the TVI criminal probe first was reported Dec. 30 by The New Age. The publication quotes a spokesperson for the South Africa Department of Trade and Industry, noting the TVI matter has become a “police case” involving pyramid-scheme allegations.
TVI, purportedly based in London, also is under fire in Australia. Meanwhile, there are reports the company has come under fire in the U.S. state of Georgia. Reports that Georgia officials have issued a cease-and-desist order could not be confirmed immediately.
It was not immediately clear if South Africa would seek to determine why TVI promoters sought to plant the seed that Buffett and Trump backed TVI, which purports to be in the travel business. An image of Buffett appears on the TVI home page — and images of Trump and former President Bill Clinton appear on an internal page.
A number of MLM schemes have produced photos or made references to Clinton, who once delivered remarks to tout the direct-selling industry. Clinton did not endorse a specific company, and the Code of Conduct of the Direct Selling Association (DSA) specifically prohibits “Deceptive or Unlawful Consumer or Recruiting Practices.”
In its Code of Conduct, DSA specifically requires member companies to provide information that is “accurate and complete.” At the same time, DSA says member companies “shall not present any selling opportunity to any prospective independent salesperson in a false, deceptive or misleading manner.”
TVI Express is not listed as a DSA member on the organization’s website.
Even as news about the TVI criminal probe was appearing online in South Africa, news that Buffett’s name allegedly had been used to sanitize elements of the George Theodule Ponzi scheme in Florida was appearing in the United States.
Images of Buffett and Trump also have been used by promoters of a purported “grocery” MLM in Florida known as MPB Today. Separately, images (and references) to Trump and television icon Oprah Winfrey have been used in promotions for Data Network Affiliates (DNA), an MLM company purportedly in the business of building a database to help the U.S. government and the AMBER Alert program rescue abducted children.
DNA now appears to have morphed into a company known as OWOW, which has positioned its products as cancer cures or treatments and even as a means of preventing the surgical amputation of limbs and growing tomatoes twice the size of ordinary tomatoes. DNA has a rating of “F” from the Better Business Bureau, the organization’s lowest.
Eventually websites bearing DNA’s name began to resolve to the OWOW site. DNA also used names such as TagEveryCar.com and LockInYourFreeSpot.com. Those sites also now resolve to the OWOW site.
Phil Piccolo, also known as "Mr. P.," strides the stage to hawk OWOW products. Piccolo claims the company's magnetic line assists in hair retention and even prevents the surgical amputation of limbs. The products also improve dairy production and help home gardeners grow tomatoes double the size of ordinary tomatoes, according to Piccolo.
BULLETIN: The National Institutes of Health (NIH), a division of the U.S. Department of Health and Human Services, said this morning that the OWOW multilevel-marketing program was using agency materials on cancer research inappropriately.
OWOW is associated with Internet Marketer Phil Piccolo. The company has positioned at least two products sold MLM-style as cancer cures or treatments, including a bottled water.
On Dec. 26, the bottled-water product was touted on an OWOW affiliate’s website. The site included a link to a Dec. 21 news release by NIH about cancer research, specifically research pertaining to “a rare cancer of the digestive tract . . . linked to a shutdown in an enzyme that helps supply oxygen to cells.”
The affiliate claimed that “OWOW Water Is THE ONLY WATER that brings Oxygen to the cell from within the cell.
“Now check out this Article written almost on the day that OWOW received the exclusive marketing rights to our Oxyengenated Water,” the affiliate instructed, pointing prospects to the NIH website.
“NIH does not endorse products and this promo is an inappropriate use of a press release that has a tenuous connection to this product at best,” NIH spokesman and senior science writer Michael J. Miller told the PP Blog this morning.
How the agency would proceed was not immediately clear.
A “Non-Affiliated Support” link on the OWOW website includes no contact information for the company and no form through which prospects or members of the media can submit questions.
OWOW appears to be the successor company to Data Network Affiliates (DNA), which purported to be in the business of creating a database to help the government and the AMBER Alert program rescue abducted children.
No evidence has emerged that DNA had the capacity to help the government do anything.
Separately — and on the same OWOW-connected website — a series of videos appears. Piccolo, also known as “Mr. P.,” is featured in a video that hawks purported magnetic products positioned as treatments for everything from bruising and hair retention to preventing the surgical amputation of limbs.
Meanwhile, video viewers also are told that the magnetic products can be used to help tomatoes, vegetables and fruits grow “twice the size.”
At the same time, the products also are positioned as helpful to dairy farmers.
“Dairy farmers who feed their cows through this here unit right here produce more milk per cow,” Piccolo claims in the video.
Family pets hearing a call from the grim reaper can extend their lives if their owners use the products, Piccolo instructs viewers.
“Your pets? If you have a pet and your pet’s on its last leg[s], bring them a Magnetic Shower,” Piccolo coaches. “You won’t believe what it will do for your pet.”
See Video
“If it wasn’t for magnets, I really believe I’d be in a wheelchair right now,” Piccolo says in the video. Piccolo asserted he’d been bucked off a horse and suffered the worst bruise his doctors had ever seen — but used magnetic products to save the day quickly, heal bruising and maintain his ability to walk.
One man who suffered a heart attack was able to avoid a leg amputation by using the magnetic shower head, according to the video.
It perhaps was a good idea to purchase the product before “Monday,” because the price was going to increase, Piccolo tells the audience. The date upon which the OWOW video was recorded was not immediately clear.
So, you want to involve your family, friends and business associates in a cash-gifting scheme and tell them it it perfectly legal?
Seven women have been charged with felonies in Michigan and the Michigan State Police (MSP) are warning that schemes targeting women are sweeping across the state.
MSP is asking members of the public to contact the department if they receive an offer for a gifting pyramid scheme. The schemes spread by plucking heartstrings and making people believe they are becoming a part of a legal enterprise.
One of the schemes is known as “Women Integrity Group.” It suggests a $5,000 gift can lead to a return of $40,000.
The office of Michigan Attorney General Mike Cox has been warning about gifting scams for years.
“No matter how these schemes are presented, the bottom line is the same for all — cash gifting schemes are illegal in Michigan,” prosecutors warned in October 2008.
“Cash gifting schemes are the quintessential example of a pyramid scheme,” prosecutors warned. “Instead of selling products, cash gifting schemes forgo the sale of products and just give people cash, but the premise is the same — like other pyramids, cash gifting schemes are based on the amount of people recruited.”
The Muskegon Chronicle reported that seven women from Newaygo County had been charged in the alleged scheme.
Local TV stations also have devoted coverage to the gifting scheme.
Here, according to prosecutors, is the Michigan law that applies:
Section 28 of the Michigan Franchise Investment Law (MCL 445.1501 et seq.) makes pyramids illegal in Michigan. The statute reads in part:
[a] person may not offer or sell any form of participation in a pyramid or chain promotion. A pyramid or chain promotion is any plan or scheme or device by which (a) a participant gives a valuable consideration for the opportunity to receive compensation or things of value in return for inducing other persons to become participants in the program or (b) a participant is to receive compensation when a person introduced by the participant introduces one or more additional persons into participation in the plan, each of whom receives the same or similar right, privilege, license, chance, or opportunity.
Essentially, a pyramid is a scheme in which participants receive compensation for recruiting other participants.
Violations of Section 28 of the Michigan Franchise Investment Law are a felony, punishable by a fine of up to $10,000 or seven years in prison.
NOTE TO READERS: The PP Blog anticipates that it will publish a story this evening that will say a second financial scandal involving the so-called “Congressional Medal Of Distinction” is evolving.
It is the same award claimed by AdSurfDaily President Andy Bowdoin — and this time it has been used by a California man accused of swindling investors. The man appears to have used as many as three names and has had his picture taken with some of America’s top politicians.
A federal judge in California has halted a marketing scheme in which the symbols and language of government and the names of bogus government agencies with “official sounding names” were used to trick consumers into believing they’d won a sweepstakes, the FTC said.
Twelve defendants have been charged in the alleged scheme, which charged consumers a $20 fee to qualify for bogus prizes and used artwork depicting the bald eagle and the words “In God We Trust,” the agency said.
Among the defendants are National Awards Service Advisory LLC, Central Processing of Nevada LLC, International Award Advisors Inc., Spectrum Caging Service Inc., Prize Registry Bureau Inc., Consolidated Data Bureau Inc., Registered Data Analytics Inc., Lloyd Brannigan Exchange Inc., Geovanni Sorino, Jorge A. Castro, Tully A. Lovisa, and Steven McClenahan.
Some of mailers used in the scheme used names such as the “State of Illinois Commissioners of Regulation,” the FTC said. Similar mailers used the names of California, Florida and Georgia to sanitize the scheme, the FTC said.
The word “voucher” also was used as part of the scam, according to evidence exhibits.
BULLETIN: UPDATED 4:03 P.M. ET (U.S.A.): A man has been arrested in a plot to detonate a car bomb at a military recruitment center in Maryland. The alleged plot was intercepted by the FBI.
In court documents, the FBI identified the man as Antonio Martinez, also known as Muhammad Hussain. He was charged with attempted murder of federal officers/employees and attempted use of a weapon of mass destruction against property owned or leased by the United States.
Martinez potentially faces life in prison, if convicted.
“[T]here was no actual danger because the people Mr. Martinez asked to help carry out his attack actually were working with the FBI,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland.
An FBI agent said in charging documents that Martinez was a “recent convert” to Islam. The plot was intercepted by the FBI in October, according to the documents.
Martinez, 21, sought to recruit three other people to launch an attack against a military-recruiting station in Catonsville, Md., according to the documents. Catonsville is near Baltimore. The plot was presaged by posts on Facebook by Martinez.
In the early stages of the plot, Martinez talked about acquiring weapons and using gasoline and propane in an attack, according to the documents. As the plot developed, Martinez spoke of stationing himself on the roof, going inside, waiting for military personnel to arrive, and then shooting “everybody in the place” with the aid of an accomplice and burning down the building to “instill fear.”
Martinez also speculated about stuffing the exhaust systems of cars with socks, which he believed could be a way to kill drivers by making deadly fumes back up into passenger compartments.
“Just some ideas,” he was quoted as saying. “You know what I’m saying?”
Later, Martinez speculated about throwing cocktail bombs into the recruiting station and shooting people as they ran out, according to the documents. He also speculated about blowing up Andrews Air Force Base.
By mid-November, the focus shifted to detonating a car bomb at the recruitment center, according to the documents.
Martinez had multiple opportunities to back away from the plot, but chose to move forward, according to the documents. He attempted to detonate the bomb earlier today, but it had been engineered by the FBI to be inert.
A similar plot in Portland, Ore., was exposed on the day after Thanksgiving by the FBI last month. The agency had arranged a sting in the Portland case.
Martinez became aware of the Portland sting operation after the fact, fretted that he was being set up — but still decided to carry out his plot, according to the documents. He found out today that, like the Portland suspect, he, too, had been targeted in a sting and had been under constant surveillance by the FBI.
A Mexican company listed as a customer of Steve Renner’s Cash Cards International (CCI) in a 2005 scam known as MegaFund now has been charged by the CFTC with running a massive Forex fraud scheme that gathered at least $28 million from more than 800 U.S. customers.
Named defendants by the CFTC were MXBK Group S.A. de CV, a private Mexican financial services holding company, and its Forex trading division, MBFX S.A. Court records show that MXBK Group S.A. de CV formerly was known as MexBank Group SA de CV or MexBank.
Separately, the SEC has charged three men with fraud for blindly pitching the MexGroup program and raising “tens of millions” of dollars in the process. Charged in Utah federal court were Clifton K. Oram, Don C. Winkler and William R. Michael.
“Beyond the fact that none of the defendants understood how the Forex market or Forex trading functioned, neither Oram, Winker or Michael took any significant steps to investigate MexGroup, its principals, or the viability of the investment,” the SEC charged. “Instead, they blindly accepted MexGroup’s representations about its background, veracity, and track record.
“Further, Michael and his company used MexGroup’s purported performance numbers on his company’s website and made misleading representations and omissions regarding their own Forex trading experience,” the SEC continued. “Even more egregious, Winkler and Oram continued to offer and sell the MBFX offering even after the November 2008 collapse.”
Renner, the operator of both CCI and the INetGlobal autosurf, currently is serving an 18-month prison sentence for tax evasion. In February 2010, the U.S. Secret Service alleged that Renner was operating a Ponzi scheme through INetGlobal.
Renner has denied the Ponzi allegations.
The CFTC case against the Mexican companies and the SEC case against the promoters were brought as a result of a joint cooperative investigation among the regulators, the FBI and the IRS, officials said.
Read the CFTC complaint, which alleges the MXBK Group Forex scam began in 2005.
Here is a snippet:
“U.S. customers sign up to participate in the Defendants’ forex trading enterprise by completing forms electronically on the Defendants’ internet website. However, when completing their customer applications, U.S. customers are required to designate certain U.S. individuals or entities, sometimes called ‘resellers’ or ‘introducers,’ who in turn act as liaisons for U.S. customers with Defendants’ operations in Mexico. The resellers or introducers receive rebates described as ‘PIPs,’ which are purportedly based upon the volume of trading.”
(NOTE: The full complaint is highly recommended reading if you follow HYIP and Forex fraud schemes.)
A New York man was arrested by the U.S. Postal Inspection Service yesterday in a bizarre case in which it was alleged he threatened to assault customers of his bogus online eyeglasses shop.
Vitaly Borker, 34, of Brooklyn, was denied bail. He bizarrely told the New York Times weeks ago that he threatened customers as a means of improving Google search-engine listings for his company, DecorMyEyes.com.
Federal prosecutors now say Borker used multiple identities in his cyberstalking scheme and was selling “counterfeit and inferior quality goods.”
“Online consumers should never be in fear for their safety simply because they have chosen the convenience of Internet shopping,” said U.S. Attorney Preet Bharara. “But that is what allegedly occurred in this case. Vitaly Borker, an alleged cyberbully and fraudster, cheated his customers, and when they complained, tried to intimidate them with obscenity and threats of serious violence.”
The allegations against Borker, who allegedly used the aliases of “Tony Russo” and “Stanley Bolds,” are stunning. Borker allegedly:
Called one customer a “[f******] whore” and threatened to “come after” and “get” the victim and her husband and to sue them.
Told another customer he knew where she lived, that he lived only “one bridge away” and that he would come to her home and carry out a violent sexual assault. The threats continued repeatedly.
Told the same customer he had sued her in small-claims court and provided a bogus docket number.
Emailed a photo of the victim’s residence to the victim. Later advised her that “I AM WATCHING YOU!”
Told another female victim that he knew where she lived, that he was watching her and threatened to “kick her ass” and carry out a violent sexual assault.
Threatened a male customer and emailed the customer’s work colleagues, accusing the customer of being a narcotics user and describing the customer to his colleagues as a homosexual.
Called another customer vulgar names and threatened to “crush” eyeglass frames the customer had returned and “ship the powder back to him.”
After Borker’s arrest, U.S. Magistrate Judge Michael H. Dolinger denied him bail, saying that the defendant was either “verging on psychotic” or had “an explosive personality,” according to the New York Times.
The Times earlier had reported that Borker claimed to have mistreated customers because it helped him improve his search-engine rankings.
It has become kneejerk sport to deride Department of Homeland Security (DHS) Secretary Janet Napolitano as “Big Sis.”
Today the attacks on Napolitano turned even more caustic, with the announcement by both DHS and Walmart that Walmart had joined the DHS-operated “If You See Something, Say Something” campaign.
Walmart issued a news release today saying it was proud to become part of the campaign, linking its announcement to a 44-second DHS video that will begin playing in 588 Walmart stores across the United States in the coming weeks .
“Homeland security starts with hometown security, and each of us plays a critical role in keeping our country and communities safe,” said Napolitano. “I applaud Walmart for joining the ‘If You See Something, Say Something’ campaign. This partnership will help millions of shoppers across the nation identify and report indicators of terrorism, crime and other threats to law enforcement authorities.”
Snarky, vile comments were posted on the DHS YouTube site in response to the video — some of the sort that made the “Big Sis” slam seem almost like a compliment.
Walmart, though, is not alone in backing the campaign.
Other DHS partners in the campaign include Mall of America, the American Hotel & Lodging Association, Amtrak, the Washington Metropolitan Area Transit Authority, sports and general aviation industries and state and local fusion centers across the country.
Walmart’s announcement that it had joined the campaign occurs against the backdrop of a recent terrorist plot targeted at a community Christmas tree lighting ceremony in Portland, Ore. The plot, which was detected by the FBI, was scheduled to be carried out on “Black Friday.”
“Black Friday” is the day after Thanksgiving in the United States, and has become a day filled with heavy retail shopping and community events. The suspect in the foiled Portland attack allegedly told the FBI that the plot would be less apt to be detected because the city was not front-and-center on law enforcement’s antiterrorism radar screens.
“. . . it’s in Oregon; and Oregon, like, you know, nobody ever thinks about it,” the FBI quoted the Portland suspect as saying.
There also have been bizarre events this year in which Walmart’s name was appropriated by members of murky multilevel-marketing businesses. Members of MLM programs known as Narc That Car/Crowd Sourcing International and Data Network Affiliates/OWOW instructed prospects to take photos of the license plates of cars parked at Walmart and other large retail stores.
The plate numbers purportedly were to be entered into databases controlled by the MLM firms as a means of helping law enforcement and the AMBER Alert program rescue abducted children. No evidence has surfaced that either of the MLM firms has any tie to the AMBER Alert program, which is administered by the U.S. Department of Justice and the National Center for Missing and Exploited Children.
Meanwhile, bizarre promos for an MLM program known as MPB Today routinely used Walmart or its branding materials as backdrops for a purported program that suggested a one-time, $200 purchase from MPB Today could lead to free groceries for life.
In its news release announcing it had joined the “If You See Something, Say Something” campaign, Walmart urged customers to support the program, but did not say precisely why it had made the decison to become to first national retailer to partner with DHS.
Advertising a Des Moines, Iowa, business address of 123 Internet St. and claiming the “owow 8g zip drive stick is the new face of data network affiliates,” an affiliate of DNA/OWOW is seeking to drive business to the firm.
But the Des Moines Police Department told the PP Blog this morning that no such street address exists in the city, despite multiple online listings encouraging prospects to do business with OWOW at the address.
A separate Des Moines address — 123 Online St. — that advertised something called “Global Gifting Connection” also was bogus, the police department said. It is unclear if the same person placed both ads.
Why bogus addresses were used to advertise OWOW and a cash-gifting program was not immediately clear.
“[I]f you would like use this product or learn how to grow a team to market it,” an ad in Des Moines said about the OWOW stick, “I have help top leaders place over 30,000 people into this company and i will be happy to help you.”
The OWOW ads appear at online venues such as MerchantCircle and HelloDesMoines.com. The business has not been verified, according to the MerchantCircle website. The ad on the HelloDesMoines site carries a photo of the OWOW stick.
The Des Moines development follows on the heels of a prompt by OWOW, which is associated with Internet Marketer Phil Piccolo, to recruit prospects by planting the seed that a product known as OWOW TurboMune cures cancer.
It also follows on the heels of a bizarre bid by an OWOW affiliate to suggest that Michael Chertoff, a Harvard-educated former federal judge and federal prosecutor and the former secretary of the U.S. Department of Homeland Security (DHS), was a “suspect” in the Sept. 11, 2001, terrorists attacks on the United States and that Israel had conducted the attacks.
The bizarre claim was made despite the fact that Chertoff’s nomination to the DHS post was approved by a 98-0 vote in the U.S. Senate more than three years after the attacks occurred.
OWOW is the apparent successor company to DNA, a Nevada-registered company that operates from Florida and claimed it was developing a database to help law enforcement and the AMBER Alert program rescue abducted children.
No evidence has emerged that DNA has the capacity to assist either law enforcement or the AMBER Alert program, which the firm chastised earlier this year by suggesting it had a bloated budget and had rescued “ONLY” about 500 children over the years.
A “Non-Affiliated Support” link on the OWOW website includes no contact information for the company and no form through which prospects or members of the media can submit questions.
OWOW also has advertised that it pays an annual interest rate of 24 percent to members who send it money. Questions have been raised about whether the company is selling unregistered securities as investment contracts.
One link in the MerchantCircle ad for OWOW prompts visitors to visit a site that redirects to video promos for an “opportunity” known as Monitium and a cycler program known as 150 Cash.
A Florida man who served jail time in an earlier scheme in California has been arrested by the Miami Beach Police Department and agents from the Florida Office of Financial Regulation (OFR), amid allegations he swindled investors in a “yogurt-based product to re-grow hair,” OFR said.
