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Category: Writing And Branding

  • URGENT >> BULLETIN >> MOVING: SEC Charges Alleged Zeek Promoter Trudy Gilmond

    breakingnews725URGENT >> BULLETIN >> MOVING: (5th Update 9:15 p.m. ET U.S.A.) The SEC has gone to federal court in the Western District of North Carolina and charged Zeek Rewards’ figure Trudy Gilmond with securities fraud, selling unregistered securities and failure to register as a broker-dealer.

    Among the allegations: Gilmond knew Zeek was under investigation in 2012 and cashed out without telling investors the “program’s” days likely were numbered. She also is accused of joining with Zeek’s principals in playing word games to sanitize the fraud.

    Gilmond, 45, of Vermont, is the first individual Zeek promoter charged in an alleged Ponzi- and pyramid scheme said to have gathered more than $850 million. She previously had been sued by court-appointed receiver Kenneth D. Bell as an alleged “winner” in the scheme.

    The Zeek receivership estate was awarded a judgment of more than $2.1 million against Gilmond, who previously promoted the collapsed Regenesis 2X2 scheme investigated by the U.S. Secret Service in 2009.

    In its complaint, the SEC said Gilmond is a “self-described network marketer who has participated in numerous MLM programs, operating under the trade name ‘Team Fired Up’ to attract followers and new recruits to join her ‘downline’  in those MLM programs (several of which ultimately collapsed in a fashion similar to ZeekRewards).”

    Zeek’s former COO Dawn Wright-Olivares, an SEC civil defendant who also has been charged criminally, recruited Gilmond, the SEC charged.

    Bell has raised the issue of MLMers or direct marketers moving from one fraud scheme to another. Gilmond now joins MLM promoter Matthew John Gagnon as a roving huckster pursued by both a receiver and the SEC. Gagnon also was pursued by criminal authorities.

    It perhaps never has been more dangerous for hucksters to move from scheme to scheme to scheme. Serial promoters Faith Sloan and Sann Rodrigues were charged by the SEC in the TelexFree Ponzi- and pyramid case and also are being pursued by class-action attorneys. Rodrigues, who once claimed God invented MLM and “binary,” also has been hit with criminal charges of immigration fraud.

    The SEC later tied Rodrigues to Daniel Fernandes Rojo Filho, an alleged fraudster from DFRF Enterprises who previously was tied to the infamous EMG/Finanzas Forex Ponzi scheme.

    With respect to Gilmond, the SEC described her as “one of the most successful and prolific promoters of ZeekRewards. From at least September 2011 until ZeekRewards was shut down in August 2012, Gilmond worked closely with the company founders and served as a senior ‘field liaison’ to promote the scheme, persuading scores of unsophisticated retail investors to buy ZeekRewards securities upon the promise of profit sharing. Gilmond reaped more than $1.7 million in transaction-based commissions and bogus profit-sharing for her recruiting efforts.”

    Some of the specific allegations against Gilmond in the SEC complaint (italics added/editing performed):

    Based on Gilmond’s efforts and the misstatements on the website, many of Gilmond’s team members ultimately purchased the ZeekRewards securities, earning Gilmond substantial commissions.

    As a field liaison, Gilmond had access to portions of ZeekRewards’ internal electronic investor database so that she could make adjustments to individual accounts to address her affiliates’ concerns or complaints. Among other things, Gilmond had the ability to adjust the number of “points” earned and could assign downline recruits to certain affiliates, both of which impacted the measure of profit sharing or commissions paid to those affiliates. In addition, Gilmond developed close ties with Wright-Olivares and other ZeekRewards insiders, which gave her unique access and insight not available to a typical investor.

    Having worked closely with the company founders and insiders to promote the scheme in her role as a senior field liaison, and given her prior experience with similar MLM programs that ultimately collapsed, Gilmond knew or should have known that the ZeekRewards scheme’s outsize returns (averaging 1.5% per day) were too good to be true and could not be sustained.

    Gilmond also helped conceal from investors and regulators the true nature of the ZeekRewards scheme. To that end, Wright-Olivares and others directed, and Gilmond helped implement, several superficial or nominal changes to certain ZeekRewards features. This included removing any references on the website to the terms “investment” and “ROI”; substituting a daily award percentage that in the aggregate approximated 125% every 90 days rather than “guaranteeing” a 125% return; and requiring investors to give away VIP bids to foster the illusion of contributing efforts to the enterprise.

    Aware that ZeekRewards was under investigation by several law enforcement agencies and that the business was in serious trouble in 2012, Gilmond and others withdrew substantial sums of money from the scheme before it was shut down, without advising investors that the scheme was likely to collapse.

    Read the SEC statement and complaint against Gilmond.

    NOTE: Our thanks to the ASD Updates Blog.

     

  • 11,900 Claims Received In WCM777 Ponzi/Pyramid Case; Time To File Is Running Out

    wcm777In the bizarre WCM777 Ponzi- and pyramid scheme, investors may not know what has become of Ming Xu and how much the equally bizarre Joseph Global Institute reportedly once operated by Xu and a former Mafia member continues to contribute to the vomitous madness.

    What is known is that about 11,900 claimants have come forward. The number is included in a Dec. 4 report filed by Krista L. Freitag, the court-appointed receiver. The deadline for filing originally was Nov. 9. But Freitag, in October, asked the court to extend the deadline in part because too few claimants had surfaced.

    U.S. District Judge John F. Walter of the Central District of California extended the deadline  until Dec. 24 and empowered the receiver to take other actions “to increase the number of investor claims submitted,” according to the court docket.

    The order seems to have aided the cause.

    Noted Freitag in her report: “As proposed in the Receiver’s application, in addition to a reminder email blast notifying investors of the extended bar date and steps approved by the Court, the steps taken by the Receiver include opening a live telephone line for investor calls (which can be answered in six different languages), allowing investors to submit their supporting documents by mail, mailing physical notices to investors whose addresses are available from checks, and holding an in-person meeting in Los Angeles at which investors were able to submitting claims with assistance from the Receiver and her staff. As a result of these efforts, the response rate and number of claims received have increased significantly.”

    As of Nov, 27, the number of claimants stood at approximately 11,900, the receiver noted.

  • Listen To Famed Attorney Jan Schlichtmann Talk About TelexFree Class Action

    newtelexfreelogoJan Schlichtmann is famous in legal circles. If you’ve never heard of him, perhaps you’ve heard of the actor who played him on the big screen: John Travolta.

    The film title was “A Civil Action,” with Travolta starring alongside Robert Duvall. The movie was based on the best-selling novel by Jonathan Harr.

    Schlichtmann has led a colorful career  — and now he and other attorneys are involved in multidistrict litigation flowing from the TelexFree scheme. Among the issues is whether financial institutions assisted the fraud,

    This “Speaking of Justice” podcast features Schlichtmann speaking about TelexFree. He is introduced by Mark Wahlstrom.

  • TRAGIC REPORTS IN BRAZIL: TelexFree Prosecutor Found Dead

    UPDATED 1:22 P.M. ET U.S.A. There are reports in Brazil that a prosecutor who worked on a TelexFree action in that country has been found dead inside her apartment.

    She has been identified as Nicole Gonzales Colombo Arnoldi, 35, of the state of Acre. The government of Acre has issued a statement of sympathy (in Portuguese) on the death. Arnoldi died yesterday, according to the statement. No cause was listed, and TelexFree was not referenced in the statement.

    Brazil and the United States have shared information on the TelexFree case. The office of U.S. Attorney Carmen M. Ortiz of the District of Massachusetts did not respond immediately this morning to a request for comment on the tragic news from Brazil.

    Whether the United States would send a delegation to Brazil for funeral services was not immediately known.

    ac24horas.com is reporting (in Portuguese) that police are investigating the possibility of suicide by pistol, though no definitive conclusion has been reached.

    In Brazil, the TelexFree probe was conducted in an atmosphere that led to threats against judges and prosecutors. As the PP Blog reported in December 2013, there were disturbing reports in Brazilian media that someone with a Facebook account used it to claim falsely that a prosecutor involved in the local TelexFree pyramid-scheme probe had been murdered. The bogus report was supplemented by photos of a mutilated body purported to be that of the prosecutor.

    Investigators in Brazil treated the matter as an effort to intimidate the prosecutor, according to media accounts in Portuguese.

    TelexFree was a cross-border MLM fraud that generated more than $3 billion in economic activity, according to a report by the court-appointed bankruptcy trustee in the United States. Arnoldi’s death occurred just four days after a U.S. Bankruptcy judge ruled the “program” a Ponzi- and pyramid scheme.

    Chief Judge Melvin S. Hoffman of the District of Massachusetts made the ruling on Thanksgiving Eve in the United States.

    Giropb.com.br is reporting that Arnoldi recently was involved in the investigation of a lynching in the city of Bujari, Brazil.

    UPDATE 1:22 P.M. ET U.S.A. This photo of Arnoldi, via Twitter, is from @portal_serido, with credit to TV Globo.

    Also see: http://www.folhapolitica.org/2015/11/promotora-do-caso-telexfree-e.html

  • Robert L. Dear: Colorado Springs Police ID Alleged Shooter

    Robert L. Dear. Source: Colorado Springs Police Department.
    Robert L. Dear. Source: Colorado Springs Police Department.

    This is Robert L. Dear, the alleged mass shooter at  a Planned Parenthood clinic in Colorado Springs yesterday. He is suspected of murdering officer Garrett Swasey of the University of Colorado Colorado Springs (UCCS) Police Department. He also is suspected of shooting 12 people in total, killing Swasey and two others.

    President Obama said this morning that the incident terrorized an entire community.

    Here is the President’s statement (italics added):

    The last thing Americans should have to do, over the holidays or any day, is comfort the families of people killed by gun violence — people who woke up in the morning and bid their loved ones goodbye with no idea it would be for the last time.

    And yet, two days after Thanksgiving, that’s what we are forced to do again.

    We don’t yet know what this particular gunman’s so-called motive was for shooting twelve people, or for terrorizing an entire community, when he opened fire with an assault weapon and took hostages at a Planned Parenthood center in Colorado. What we do know is that he killed a cop in the line of duty, along with two of the citizens that police officer was trying to protect.  We know that law enforcement saved lives, as so many of them do every day, all across America.  And we know that more Americans and their families had fear forced upon them.

    This is not normal.  We can’t let it become normal.  If we truly care about this — if we’re going to offer up our thoughts and prayers again, for God knows how many times, with a truly clean conscience — then we have to do something about the easy accessibility of weapons of war on our streets to people who have no business wielding them.  Period.  Enough is enough.

    May God bless Officer Garrett Swasey and the Americans he tried to save — and may He grant the rest of us the courage to do the same thing.

    Swasey was 44, a six-year veteran of the campus police department. He was assisting the Colorado Springs Police Department, the university said.

    CNN interviewed a witness who’d allegedly encountered Dear while the murderous event unfolded.

    From CNN (italics added):

    “Five seconds we stared right at each other … and in those five seconds, bullet holes passed through my window,” he said.

    “He was looking directly at my face; he was aiming at my head. I could see it in his eyes … cold stone face.”

    As the bullets ripped through his windshield, he started bleeding in the mouth and face, and assumed he’d been shot. He sped out of the parking lot.

    It can be a small world. The PP Blog previously has written about John Suthers, Colorado’s former Attorney General and the one-time U.S.Attorney for the state. Suthers now is the mayor of Colorado Springs, meaning he is the local comforter-in-chief when there is a community-wide tragedy.

    There was fear yesterday that Dear might have brought explosive devices with him.

    Here’s what Suthers’ office says today, via Twitter:

     

  • SPECIAL REPORT: Accused WCM777 Ponzi Schemer Ming Xu Expressed Concern About Being Harmed, Says He Was Cooperating With Government; Purported Texas University Claims It Has Absorbed The Bizarre ‘Joseph Global Institute,’ Raising New Questions; WCM777 Claims Deadline Extended To Dec. 24

    EDITOR’S NOTE: The story about Phil Ming Xu’s asserted cooperation with the government appears below the subhead. We’ll lead with the news of extension of the claims deadline for WCM777 victims.

    If you’re a victim of the World Capital Market/WCM777 Ponzi- and pyramid scam shut down by the SEC last year, you now have until Dec. 24 — Christmas Eve — to file your claim.

    The original claims deadline had been Nov. 9. On Oct. 26, court-appointed receiver Krista L. Freitag asked for an extension. U.S. District Judge John F. Walter of the Central District of California granted the request on the same day, extending the deadline until Dec. 24 and empowering the receiver to take other actions “to increase the number of investor claims submitted,” according to the court docket.

    This is the URL of the receiver’s site: http://www.worldcapitalmarketreceivership.com/

    This is the URL of the site to file claims: https://www.wcm777claimsprocessing.com/en/Home/Filing

    Among other things, the WCM777 case demonstrates the logistical challenges posed by cross-border fraud schemes operating over the Internet and involving cash transactions and potentially thousands of domestic and international bank accounts, including at least 100 linked to accused WCM777 Ponzi schemer Phil Ming Xu alone. Victims from multiple countries piled up potentially by the tens of thousands. Not all of them spoke the same language and, as in similar scams, not all of them paid WCM777 directly. Rather, they paid their “upline” sponsor, making the task of following the money and filing a claim more difficult. (See March 15, 2015, PP Blog story: “WCM777: More Theft And Money Laundering MLM-Style.”

    Phil Ming Xu Says He Cooperated With Government

    The opening of a Phil Ming Xu declaration originally filed under seal in April 2014. The seal was lifted at the request of an investor and after federal prosecutors did not object.
    The opening of a Phil Ming Xu declaration originally filed under seal in April 2014. The seal was lifted at the request of an investor and after federal prosecutors did not object.

    The PP Blog is reporting today that Ming Xu claimed in an application to file certain information under seal in April 2014 that he was cooperating with the government on matters pertaining to alleged misdeeds by attorney Vincent J. Messina, a figure in the WCM777 story. The SEC previously had described Messina, believed to be in his eighties, as an “inactive” Florida lawyer. (Also see March 13, 2015, PP Blog story: “BULLETIN: CLAIM: Former CIA Operative Was Paid More Than $400,000 By Companies Linked To WCM Ponzi Scheme.”

    Messina is alleged to have come into possession of $5 million in proceeds from the WCM777 fraud, some of which allegedly was directed to International Market Ventures, a company operated by Gary Messina, his nephew. Gary Messina formerly worked as the chief information officer for the Bureau of Citizenship and Immigration Services, an arm of the U.S. Department of Homeland Security.

    Messina has been ordered to return the $5 million, and IMV — the recipient of a transfer from Messina — is on the hook for $941,505 of it.

    The effort to lift the seal on Ming Xu’s April 2014 filings began more than a year later, on Aug. 21, 2015, with a filing by an alleged victim of Xu from Daly City, Calif. This individual asserted he’d wired $2,000 to HSBC Bank in Hong Kong as his initial investment in WCM, a company that “represented itself as a leader in China based business and finance.”

    Walter lifted the seal in an order dated Sept. 14, after the office of U.S. Attorney Eileen M. Decker of the Central District of California did not object. Precisely what Decker’s office is investigating remains unclear, although tens of millions of dollars are alleged to have flowed through WCM and related entities.

    Ming Xu once claimed campaign ties to Los Angeles Mayor Eric Garcetti, and Freitag has alleged a California lobbying firm received $750,000 from the fraud for the purposes of “locating and securing legislators, obtaining access to such legislative leaders in California and Washington, D.C., and communicating and recommending advocacy strategies and effective public relations programs with the government.” 

    It is not unusual for Ponzi schemers to rub elbows with famous politicians as a means of trying to sanitize their scams, Scott Rothstein being an infamous example.   

    How dangerous is the world of HYIP Ponzis? Well, the Press Democrat of Santa Rosa, Calif., reported in January 2015 that investigators believe a murder might be tied to WCM777 and a companion scam known as Kingdom777.

    Ming Xu also was concerned about being harmed, according to his now-unsealed motion from April 2014 to file under seal. He did not list a source of harm, but with so much money and so many tentacles involved, it could be anybody — from a person down the street to a person overseas.

    From the motion (italics added):

    “Xu is making this request because public disclosure of his cooperation with the government, including the U.S. Attorney’s Office for the Central District of California and the Securities and Exchange Commission, could jeopardize potential criminal investigations and the use of proactive covert operations. If Xu’s cooperation was disclosed, potential subjects of the ongoing investigations may take certain steps to hide evidence and proceeds of criminal activity, flee the jurisdiction or potentially harm Xu or his family.”

    As for what Ming Xu said in his actual declaration docketed in May 2014 and now public . . .

    If you were pushing WCM777 during hotel pitchfests and in your church and continue to have doubt WCM777 was a Ponzi scheme, put those doubts to rest. The huckster conceded the Ponzi in his declaration, while alleging Messina also knew it was a Ponzi.

    From the declaration (italics added):

    “Mr. Messina knew the $5 million transferred to him was proceeds of an illegal Ponzi scheme and is being investigated by SEC and knew I was sending him the money to avoid detection and seizure of the funds by the federal government. I transferred the $5 million to Mr. Messina’s IOLTA account because he warned me the government would seize the money as illegal proceeds of the Ponzi scheme. Mr. Messina told me on several occasions that WCM had serious criminal and civil liability issues, and that he expected federal agents to show up at our office in Pasadena, execute a search warrant, seize all the computers, and other business records of WCM’s business operations.”

    Ming Xu continued (italics added):

    On or about February 27, 2014, Mr. Messina sent me a document to sign stating that the transfer of the $5 million was a non-recourse loan payable in full in five years. I executed the loan document after being advised to do so by Mr. Messina. The money I transferred to Mr. Messina was not truly a loan and the two-line document purporting to be a loan agreement is false.

    On or about March 20, 2014, I wrote and sent a letter to Mr. Messina, wherein I demanded return of the $5 million transferred from the ToPacific bank account into Mr. Messina’s IOLTA account for SEC settlement. Mr. Messina refused to return the monies.

    I have subsequently learned that Mr. Messina has disbursed some of these funds to an entity, International Marketing Ventures, a company that is controlled and operated by Gary Messina, his nephew. 

    I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

    It is unclear if Ming Xu currently is cooperating with the government and how much his asserted cooperation in April 2014 helped in pursuit of the WCM777 case or other cases.

    What is clear is that the WCM777 story has included a series of bizarre developments — everything from a pledge of love for the people of Peru written on the letterhead of a suspended California company and a recitation of the importance of “blood moons” to the appearance of a “Jesus sword” and the apparent involvement of a former CIA operative.

    Strangest of all, though, may be the Ming Xu claim he was taking over a company linked to the film “Innocence of Muslims” as part of a bid to “transform nations” and “train a group of Josephs to bless the world.”

    Who constituted the “Josephs” and how they would “bless the world” always has been unclear, as has the nature of the purported “training” they required. This particular segment of the WCM777 narrative is deeply strange in other ways. For example, a former reputed member of the Mafia named “Dr. Bruno Caporrimo” is part of the narrative and a purported Ming Xu associate.

    So is a purported California university known as the “Joseph Global Institute” of which Ming Xu purportedly was “dean” and Caporrimo reportedly was “chancellor.” As the PP Blog reported last year, one promo for the institute appeared to rip off video footage from Liberty University, a well-known Christian college in Virginia.

    ‘Joseph Global Institute’ Narrative Evolves

    Something that curiously calls itself “Southwestern University” even though it uses the four-letter acronym SWIU (at www.swiu.edu) now claims online that it has absorbed the Joseph Global Institute. Best we can tell, SWIU stands for “Spirituality Wisdom Inspiration Understanding” and appears not to be affiliated with Southwestern University of Georgetown, Texas, which uses www.southwestern.edu. SWIU purports to have a campus at 4040 Saltburn Drive in Georgetown, but the city does not have such a street, the Georgetown Police Department told the PP Blog today. (The city of Plano, nearly three hours from Georgetown, has a Saltburn Drive.)

    The Joseph Global Institute previously planted the seed it was affiliated with Harvard.

    Some people have blamed the “Innocence of Muslims” film for the Sept. 11, 2012, attack on U.S. outposts in Bengazi, Libya, that killed Ambassador Chris Stevens and three other Americans. The issue has dogged former Secretary of State Hillary Clinton, now a Democratic candidate for President of the United States.

    The WCM777 Ponzi-scheme story has proceeded through all sorts of tortured twists and turns, creating nonfiction that reads like fiction. Although it not unusual for bizarre narratives to accompany Ponzi schemes, the narratives surrounding WCM777 are particulary bizarre — and Americans should be concerned and follow developments closely.

    NOTE: Our thanks to the ASD Updates Blog.

  • BOOKMARK FOR ZEEKERS: Lawyer For Alleged Ponzi Winners Now Has Website And Has Posted Documents

    Whether you’re an alleged Zeek “winner” or a “loser” hoping the court will force the return of tens of millions of dollars in gains, this is one to bookmark: http://www.zeeknetwinnerclass.com/index

    It’s the website of J. Kevin Edmundson, the lawyer appointed by the court in essence to defend thousands of alleged Zeek Rewards winners sued by court-appointed receiver Kenneth D. Bell. In a Nov. 5 announcement on the receivership page, Bell himself pointed his litigation opponents to the site.

    “As instructed by the Court, Mr. Edmundson will be communicating with the Net Winner Class primarily through a website and collective emails,” Bell wrote.

    Bell alleges the winnings are Ponzi proceeds and thus must be returned. Any number of Zeekers hope to keep the alleged gains.

    The case is known as Bell v. Disner. Disner is Todd Disner, an alleged pitchman for both Zeek and the AdSurfDaily Ponzi scheme in 2008. The winner’s site includes an FAQ’s section, copies of court filings and more.

    “Class counsel has established this website as the primary means of communicating with members of the class,” Edmundson notes on the site. “Please check back frequently for updates as new information becomes available.”

    U.S. District Judge Graham C. Mullen certified the defendant class earlier this year.

    As the PP Blog reported in March (italics added):

    What once was only theoretical in the context of MLM HYIP schemes — that a receiver appointed by a court could simultaneously sue thousands of “winners” from disparate locations for return of funds received from an alleged Ponzi or pyramid scheme — is now a reality.

    This reality was cemented [March 17] by the posting of a “Notice of Certification of Defendant Class Action” by Zeek Rewards receiver Kenneth D. Bell. The four-page document is posted on the receivership website.

    Bell is suing more than 9,000 individuals in the United States alleged to have received more than $1,000 from the “program.”

     

  • As Was Case With DFRF Enterprises And Rojo Filho, YouTube Promos Played Role In Criminal Ponzi Prosecution Of The Achieve Community’s Troy Barnes

    From a 2014 YouTube promo for The Achieve Community. Authorship is unclear.
    From a 2014 YouTube promo for The Achieve Community. Authorship is unclear.

    Still promoting your securities scam on YouTube?

    As the PP Blog reported on Oct. 3, YouTube promos for the alleged DFRF Enterprises’ Ponzi scheme were cited in two of three wire-fraud counts against accused operator Daniel Fernandes Rojo Filho. Filho, allegedly at the helm of a fraud that gathered tens of millions of dollars, has been in federal custody since his July 21 arrest in Boca Raton, Fla.

    The office of U.S. Attorney Carmen Ortiz of the District of Massachusetts is prosecuting the Filho criminal case, and the SEC simultaneously is prosecuting a civil case. The SEC has warned for years about securities scams spreading on social media.

    It turns out that YouTube videos also are playing a role in the criminal prosecution for wire fraud and wire-fraud conspiracy of Troy Barnes of The Achieve Community — or TAC. That prosecution was announced Nov. 3 by the office of U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

    Among other things, the indictment against Barnes alleges that “YouTube communications” played a role in duping Achieve participants and therefore constituted part of a wire-fraud conspiracy.

    Barnes, 53, resided in Riverview, Mich. He is free on bond, pending trial. In addition to the conspiracy count against him, Barnes also faces three counts of wire fraud for three transactions in 2014 involving the purchase of Achieve “positions” by victims, according to the indictment.

    “By the time the scheme collapsed in February 2015, the conspirators had defrauded over 10,000 investors in the Charlotte-area and worldwide, and owed victim-investors at least $51 million in purported investment returns, yet only had available approximately $2.6 million,” prosecutors said. “According to court records, over the course of the scheme, Barnes used over $140,000 of the victims’ money for his own enrichment.”

    Barnes co-conspirator was Kristi Johnson, 60, who resided in Aurora, Colo., prosecutors said. She has already pleaded guilty to wire-fraud conspiracy and is scheduled for sentencing  Nov. 19, before U.S. District Judge Max O. Cogburn Jr.

    Achieve offered a 700 percent ROI, according to the SEC and federal prosecutors. Barnes and Johnson also face a civil action by the SEC.

    In December 2014, the PP Blog reported that Achieve boosters parroting each other were circulating a YouTube promo that read, “We are not investing in a stock or buying shares in a company. We are using our God given universal right to spend our money the way we want. We choose not to sell out to the banking system for their tiny little 1% annual return.”

    Said Rose’s office on Tuesday: “According to court filings, as the scheme grew in size and scope, Barnes and his conspirators concealed the true nature of the scheme through multiple misrepresentations.  According to court records, when the conspirators became concerned that the use of the term ‘investment’ would draw scrutiny from regulators, they instructed victim-investors that ‘We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.'”

    Scammers from AdSurfDaily in 2008 tried the same tactic. It backfired, as it later would do with Achieve and other “programs,” including Zeek Rewards.

    Among other things, Achieve claimed $50 turned into $400. The U.S. Secret Service brought the Achieve criminal case and the ASD prosecution. ASD was a 1-percent-a-day “program.”

    The PP Blog’s Achieve coverage received a mention Nov. 3 in the Charlotte Observer. See the Blog’s archive of Achieve Community references.

    UPDATE 7:22 P.M. ET U.S.A. Scheduled for sentencing Nov. 19, Kristi Johnson today asked the court for a sentencing delay. Specifics were filed under seal. This is from a motion on the public record (italics added):

    1. Pursuant to Local Rule of Criminal Procedure 55.1, Ms. Johnson respectfully requests this Court to seal the Joint Motion to Continue Sentencing because it contains sensitive information regarding a criminal investigation.

    2. Public dissemination of the Joint Motion to Continue Sentencing may interfere with the administration of justice. Therefore, there is good cause for the Court to seal said motion.

    NOTE: Our thanks to the ASD Updates Blog.

     

  • Is Jeunesse Rep Trying To Raid Vemma, Usana, Amway And Mary Kay Downlines? And Is Affiliate A Lawyer?

    A Jeunesse rep may be using Twitter in a bid to raid downlines of other MLMers.
    A Jeunesse rep may be using Twitter in a bid to raid downlines of other MLMers.

    On Oct. 24, the PP Blog reported that Truth In Advertising (TINA.org) had raised concerns about health-related claims surrounding the Jeunesse MLM, including a claim from an apparent rep that a product known as Jeunesse Reserve had reversed the course of gangrene in a patient with diabetes who was facing an amputation.

    Today the PP Blog is reporting that an apparent Jeunesse rep with a Twitter handle and email addresses that suggests he is a lawyer may be trying to raid downlines at MLMs such as Vemma, Usana, Amway, Mary Kay, Zhulian and others.

    Jeunesse did not respond immediately to a request for comment from the PP Blog. We’ll publish the comment, if received.

    Earlier today the Blog observed a Twitter promo from an account under the name “DH-mlm-lawyer.tk.” This was the headline in part: “ZHULIAN, VEMMA,USANA,AMWAY,MARYKAY [SIC] -REGSITER [SIC] AND CONVERT DOWN-LINES INTO OVERNITE WEALTH.” Included was a link to an affiliate site at JeunesseGlobal.com. The affiliate ID was “smcmktg,” with the rep listed as “David.”

    Included among the graphics of the promo was one that read “MLM Transfer Your Downline Into Overnight Millions.” Another graphic suggested that MLMers who moved to Jeunesse and took their downlines from other companies with them could earn more than $270,000 in two weeks and $800,000 in a month.

    Another graphic listed the names of Zhulian, Avon, Amway, Mary Kay, Herbalife, Shaklee, Nuskin, Vemma and Usana. It further claimed Jeunesse produced “OVERNIGHT MILLIONAIRES” and that people who moved their downlines from other companies to Jeunesse could “convert” those downlines into “millions” of dollars.

    Avon, Herbalife, Shaklee, NuSkin and Usana are publicly-traded companies. Vemma is the current subject of an FTC pyramid-scheme prosecution.

    Another promo for Jeunesse on the “DH-mlm-lawyer.tk” Twitter account suggested that Jeunesse somehow was affiliated with the Nobel Prize.

    The “DH-mlm-lawyer.tk” Twitter account also promoted a URL styled “mlm-lawyer.tk.”

    This post read, “Need MLM-Network marketing Help or advise? [Sic] How about an answer to EBAY PROBLEMS:”

    When the PP Blog visited the site, it was greeted by images of law books and a prompt that read, “FREE INITIAL 1/2-HOUR CONSULTATION.” “TK” is the top-level domain for Tokelau, a New Zealand territory of 1,300 inabitants  CNN described in 2012 as “The tiny island with a huge Web presence.”

    The purported MLM law site, however, appears to use a phone number in Thailand while not listing any professional credentials commonly associated with attorneys or a street address. A headline on a Blog associated with the site reads, “JEUNESSE GLOBAL DARLING OF WALL STREET.”

    Jeunesse is not a publicly traded company.

  • Another ‘Ken Russo’ Disaster: Team Of Feds Hammers Alleged Operator Of ‘Program’ Pushed By Ponzi-Forum Legend

    breakingnews725UPDATED 7:51 EDT U.S.A. Let’s start by giving you the roster of federal agencies involved in the investigations and prosecutions of William M. Apostelos, 54, and Connie M. Apostelos, 50, his wife:

    (1.) The Office of U.S. Attorney Carter M. Stewart of the Southern District of Ohio. (2.) Internal Revenue Service Criminal Investigation. (3.) The FBI. (4.) The U.S. Postal Inspection Service. (5.) U.S. Department of Labor Office of Inspector General. (6.) U.S. Department of Labor Employee Benefits Security Administration.

    In addition to the six federal agencies, the Ohio Department of Commerce Division of Securities joined in the probe that uncovered an alleged $70 million Ponzi scheme.

    So, how does Ponzi-forum legend “Ken Russo” fit into all of this? Here we’ll turn to a Nov. 1, 2014, story at BehindMLM.com. The story quotes “Ken Russo” on yet-another scam he is pushing. (Italics added.)

    I am very firm in my belief that this is the real deal and I get no sense whatsoever that any kind of scam is intended here. It is very seldom that we can find an opportunity as transparent and viable as the Genesis Acquisitions International, LLC. investment club.

    It turned out that William Apostelos was linked to Genesis Acquisitions and a sorry cast of other companies, including WMA Enterprises LLC, Midwest Green Resources LLC and Roan Capital.

    Connie Apostelos, also known as Connie Coleman, also operated and oversaw multiple companies in the Dayton area, including Coleman Capital Inc. and Silver Bridle Racing LLC, prosecutors said.

    “These companies were allegedly operated through improper use of investor funds to William Apostelos’ companies,” Stewart’s office said.

    From the statement (italics added):

    William and Connie Apostelos are charged with one count of conspiracy to commit mail and wire fraud, eight counts of mail fraud and 13 counts of wire fraud, each crimes punishable by up to 20 years in prison. They were also charged with two counts of money laundering, which each carry a potential 10-year prison sentence. They were also charged with one count of theft or embezzlement from employee benefit plan, which carries a maximum penalty of up to five years imprisonment. Finally, Connie Apostelos is charged separately with one count of making a false statement, which carries a maximum penalty of up to five years imprisonment.

    See the PP Blog’s archive of story references to “Ken Russo,” perhaps the most prolific Ponzi pitchman on the planet.

    Visit a recent “Ken Russo”-related thread at the RealScam.com antiscam forum for a “program” known as “MyBinaryProfits.”

  • BULLETIN: New York State Senator Calls Herbalife A ‘Pyramid Scheme,’ Says Its ‘House Of Cards Is Tumbling Down’

    The cover page of the report.
    The cover page of the report.

    5th Update 8:04 p.m. EDT U.S.A. New York state Sen. Jeffrey D. Klein of the Bronx has called Herbalife a pyramid scheme whose “house of cards is tumbling down.”

    Klein’s comments came in the context of an “undercover investigation” conducted by his office into Herbalife nutrition clubs in “The Bronx, Queens, and Brooklyn,” according to a PDF report released today. It is titled, “The American Scheme: Herbalife’s Pyramid ‘Shake’down.”

    Partners in the probe, according to the report and a statement by Klein, were the New York City Office of the Public Advocate Letitia James and Make The Road New York, an advocacy group that consists at least in part of former Herbalife distributors.

    Said Klein, in perhaps the most hostile words to date directed at Herbalife by an American politician (italics added):

    “Herbalife’s house of cards is tumbling down. This fraudulent company’s efforts to lure in vulnerable New Yorkers and recent immigrants in pursuit of the American Dream is downright shameful. With false promises of wealth and extravagance, a disproportionate number of Hispanic families are falling prey to these schemes and sacrificing their hard earned dollars.”

    Klein added that he intended to sponsor legislation that “will significantly boost protections for consumers and distributors, drastically strengthen financial reporting requirements for Herbalife independent members and increase oversight of this deceptive company in New York.”

    Herbalife has been under investigation by the FTC for more than a year. No charges have been announced, and the Klein report raises the prospect that Herbalife has found a way to hoodwink regulators.

    From the report (italics/bolding added):

    As applicable to Herbalife International, the FTC does not classify the organization as an illegal pyramid scheme because the required $60 to $100 fee to receive a membership kit is not money used to compensate higher up distributors who recruit. Furthermore, once an Herbalife member becomes a supervisor, she is allowed to maintain the title and royalty collecting privilege for an entire year before having to re-qualify. However, our research and investigation reveal that Herbalife distributors do not follow the rules set by the FTC and are in fact running an illegal pyramid scheme. Our analysis demonstrates that higher up distributors encourage recruits to make large first-time product purchases, which the recruiters stands to gain on. And once the new members are unable to sell off their inventory, recruiters encourage them to recruit other members to increase their compensation claims and maintain operation. By contractually following FTC guidelines, Herbalife International has managed to skirt the law, but in reality their lack of proper financial disclosure and supervision over their members allows distributors on the ground to operate illegal pyramid schemes to the benefit of Herbalife International.

    Read the statement on Sen. Klein’s website.

    Read a PDF of the report.

    More . . .