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  • DEVELOPING STORY: Pittsburgh Police On Scene Of Possible Hostage Situation At CW Breitsman Associates LLC, Firm That Administers Insurance And Benefits Plans [UPDATE: Suspect in Custody]

    UPDATED 2:38 P.M. EDT (U.S.A.) Klein Michael Thaxton now is in police custody, CBS News is reporting. Below, our earlier brief . . .

    ** ______ **

    Pittsburgh police, including a SWAT team, are at the scene of a possible hostage situation inside the 16th-floor offices of CW Breitsman Associates LLC, a third-party administrator of insurance and pension benefits.

    With the FBI also reportedly at the scene, police are said to be negotiating with the alleged hostage-taker. The individual’s motivations were unclear.

    Pittsburgh Police Chief Nate Harper identified the man as Klein Michael Thaxton, the Pittsbugh Post-Gazette is reporting.

     

  • Now, A ‘Fraudulent $53 Million Worldwide Off-Exchange Forex Scheme,’ CFTC Alleges; Agency Charges Australian Resident Senen Pousa, U.S. Residents Joel Friant And Michael Dillard, Along With ‘Investment Intelligence Corp.’ And ‘Elevation Group Inc.’

    EDITOR’S NOTE: In a statement on the allegations against Senen Pousa, Joel Friant, Michael Dillard and their companies, the CFTC pointedly stressed that international agencies cooperated in a probe and that the alleged scammers created victims in multiple nations . . .

    The CFTC has gone to federal court in the Western District of Texas, alleging that Senen Pousa of Australia and Joel Friant of Bellingham, Wash., were running a “fraudulent $53 million worldwide off-exchange Forex scheme” through an Australian enterprise known as Investment Intelligence Corp. (IIC).

    Also charged in the alleged caper were Michael Dillard and Elevation Group Inc. of Austin, Texas.

    “The scheme allegedly accepted at least $53 million from at least 960 clients worldwide, including at least 697 clients in the United States, and clients in Australia, the United Kingdom, Canada, Germany, the Netherlands, and Singapore, among other countries. None of the defendants has ever been registered with the CFTC,” the CFTC charged.

    U.S. District Judge Lee Yeakel of the Western District of Texas issued an emergency freeze of the assets of Pousa, Friant and IIC and prohibited the destruction of books and records, the CFTC said.

    Cooperating in the probe were the Australian Securities & Investments Commission, the U.K. Financial Services Authority, the Hungarian Financial Supervisory Authority, the Netherlands Authority for the Financial Markets, the Financial Markets Authority of New Zealand and the New Zealand Serious Fraud Office, the CFTC said.

    From a CFTC statement (italics added):

    The CFTC complaint alleges that from at least January 1, 2012 through the present IIC, through Pousa, Friant and its other agents, and defendants Dillard and Elevation Group, utilized “wealth creation” webcasts, webinars, podcasts, emails, and other online seminars via the Internet to directly and indirectly solicit actual and prospective clients worldwide to open forex trading accounts at IIC. The complaint further alleges that clients were promised by IIC, through Pousa, Friant, and other agents 1) a monthly return of 9 percent, 2) that IIC’s managed forex trading would risk less than 3 percent of a client’s capital per transaction, 3) that IIC was able to limit the risk inherent to forex trading by limiting its managed forex trading to 2 to 5 trades per month, and 4) that IIC has six “proprietary traders” working 24 hours a day trading clients’ funds. The CFTC complaint alleges that all of these representations to clients were false.

    On or about May 16-17, 2012, the complaint alleges that clients suffered a loss of over 60 percent of their investment, when IIC, by and through its agents, entered over 200 forex trades in each client’s account in violation of the representations made by IIC, by and through its agents.

    Also assisting the CFTC were the Texas State Securities Board, the Washington State Department of Financial Institutions, the U.S. Attorney for the Western District of Texas, the FBI and the SEC, the CFTC said.

    Read the CFTC complaint.

  • 2 Attorneys Have Filed Court Notices For Robert Craddock’s Fun Club USA ‘And Other Entities Whose Assets Were Seized,’ According To Zeek Docket

    UPDATED 7:58 P.M. EDT (U.S.A.) The mystery of precisely who would represent Zeek Rewards figure Robert Craddock in a bid to intervene in the Zeek Ponzi scheme case may be over.

    Attorney Rodney E. Alexander of Charlotte has filed an appearance notice for Fun Club USA Inc., Craddock’s Florida business that raised funds for a court action challenging the Zeek case through ZTeamBiz.com.

    Meanwhile, attorney Michael J. Quilling of Dallas has applied to the North Carolina federal court handing the Zeek Ponzi scheme case for permission to represent Fun Club.

    Quilling’s application was sponsored by Alexander. Quilling is with Quilling, Selander, Lownds, Winslett & Moser, P.C.

    In court filings today, Alexander said he “is appearing in this matter as local counsel for Fun Club USA, Inc and other entities whose assets were seized in connection with” the Zeek case.

    Fun Club’s name does not appear as a defendant in the SEC’s civil case against Zeek, and it was not immediately clear whether a specific sum was seized from the company or whether Craddock and the unidentified “other entities” plan to argue that Zeek-related seizures in general by the government were unlawful.

    The filing did not identify the other entities.

    An email attributed to Craddock yesterday suggested that Senior U.S. District Judge Graham C. Mullen had permitted politics to enter the Zeek Ponzi fray. The email described the law firm of the court-appointed receiver in the Zeek case as “politically connected” and therefore potentially lacking “any incentive to protect anyone” and positioned to “run up a bill and submit invoices to the courts so they can pay themselves.”

    Craddock did not explain why Mullen — a former Naval officer with 22 years on the bench — ever would play politics with Zeek. Zeek receiver Kenneth D. Bell, whom Craddock has painted as fee-hungry before Bell has submitted a single bill for the judge to review, is experienced as both a defense attorney and a prosecutor.

    As a prosecutor, Bell was heralded by the U.S. Department of Justice for gaining convictions in a case against a Hezbollah terrorist cell operating in the United States. (See Bell in this YouTube video speaking about the cell.)

    Craddock, though, appears to be dubious of Bell and his firm.

    “So now we have an overzealous government agency, making unsubstantiated claims and convincing a judge to freeze the bank accounts and, dismantle the penny auction and for what, so the receiver can employ 100 people making in excess of 500 an hour for 210 weeks or 4.3 years and burn through the $500 million they have grabbed in 16 bank accounts,” the email attributed to Craddock read in part.

    Scammers on well-known Ponzi-scheme forums such as MoneyMakerGroup also have planted seeds of doubt against the receiver. Zeek was promoted widely on forums listed in court filings as places from which Ponzi schemes are promoted.

    Bell has said there potentially could be 2 million victims in the Zeek case. Yesterday alone attorneys for accused Zeek operator Paul R. Burks of Rex Venture Group filed thousands of Zeek-related records under seal. It is part of Bell’s job to examine those documents.

    Craddock’s suggestion of political tomfoolery was curious, given that Craddock used the name of former Florida Attorney General Bill McCollum and the SNR Denton law firm in Craddock’s initial fundraising efforts to hire counsel. SNR Denton dropped out soon thereafter. McCollum is a partner at SNR Denton.

    AdSurfDaily Ponzi scheme pitchman Todd Disner was present on a Craddock fundraising call last month. Among other things, Disner asserted in court filings earlier this year that ASD was not a Ponzi scheme even after ASD President Andy Bowdoin pleaded guilty to wire fraud and admitted ASD was a Ponzi scheme.

    In a November 2011 lawsuit against the government for alleged misdeeds in the ASD Ponzi case, Disner also accused prosecutors of going shopping for a friendly judge when bringing the ASD Ponzi case in 2008. His claims were dismissed on Aug. 29, the same day Bowdoin was sentenced to 78 months in federal prison.

    At an unclear point in time, Disner became a Zeek pitchman. Like ASD, Zeek featured a 1-percent-a-day (or more) payout plan on top of commissions for sales.

    On Aug. 17, the SEC described Zeek as a Ponzi- and pyramid scheme that sold unregistered securities and raised $600 million.

    Craddock has described himself as a consultant for Rex Venture Group LLC, Zeek’s parent company.

  • ZEEK UPDATE: Thousands Of Records Filed Under Seal

    An entry from the court docket in the Zeek Ponzi scheme case.

    UPDATED 4:20 P.M. EDT (U.S.A.) Attorneys for accused Ponzi schemer Paul R. Burks of the Zeek Rewards MLM “program” operated through North Carolina-based Rex Venture Group LLC have filed thousands of records under seal.

    On Sept. 17, Burks’ attorneys sought the approval of Senior U.S. District Judge Graham C. Mullen to file the documents under seal.

    The “anticipated filing contains account and financial information concerning not only Rex Ventures Group, LLC d/b/a ZeekRewards.com, but also thousands of individuals who either paid funds to and/or received funds from Receivership Defendant since January 1, 2010,” the attorneys said in advance of the massive filing.

    Mullen permitted the attorneys to submit the documents under seal. The filings now have been made and will remain under seal until further order of the court. The precise form of the filings is unclear because they are not available to the public.

    As things stand, the records will be available to Burks, the SEC and to Kenneth D. Bell, the court-appointed receiver in the Zeek case.

    Zeek was described Aug. 17 by the SEC as a Ponzi- and pyramid scheme that had gathered $600 million.

    The sheer complexity of Ponzi-scheme cases often leads to spectacular paper chases because of the enormous number of records that must be reviewed. But the Zeek case could set a new standard for volume because Zeek used as many as 15 financial vendors and perhaps ensnared between  1 million and 2 million victims while operating over the Internet between January 2011 and August 2012.

    Visit the ASD Updates files site to view Zeek-related court documents. Visit the ASD Updates Blog.

     

  • IRISH INDEPENDENT: ‘Senior Judges’ Caught Up In Collapse Of ‘Custom House Capital’ As Ponzi And Pyramid Concerns Lead To ‘Shockwaves’

    “The fallout from the collapse of investment firm Custom House Capital (CHC) is sending shockwaves through Ireland’s elite. Barristers, solicitors and prominent sports stars were all roped in by the investment firm with promises of attractive returns.” — Irish Independent, Sept. 19, 2012

    The Irish Independent is reporting that more than 1,500 investors may have plowed 500 million euros (approximately $650.7 million) into a now-collapsed investment firm known as Custom House Capital (CHC).

    Senior judges were among the investors, the newspaper reports.

    Authorities are investigating amid concerns that 90 million euros (approximately $117.12 million) was diverted in Ponzi scheme fashion to keep the scam afloat prior to its collapse, the newspaper reports.

    Read the story in the Independent.

  • BULLETIN: Purported ‘Sovereign Citizen’ Tim Turner Of Purported ‘Republic for the united States of America’ Charged In Alleged ‘Seminar’ Scam In Which He Taught Attendees How To File Bogus Liens Against Public Officials; Tax Crimes Also Charged, Justice Department Says

    “Turner is alleged to have attempted to pay his own taxes with a fictitious $300 million bond and to have assisted others in attempting to pay their taxes with fictitious bonds purporting to be worth amounts ranging from $10 million to $100 billion.” — U.S. Department of Justice, Sept. 18, 2012

    BULLETIN: James Timothy Turner, a purported “sovereign citizen” who claims to be “President” of the “Republic for the united States of America,” has been indicted by an Alabama grand jury on charges of conspiracy to defraud the United States, attempting to pay taxes with fictitious financial instruments, attempting to obstruct and impede the Internal Revenue Service, failing to file a 2009 federal income tax return and falsely testifying under oath in a bankruptcy proceeding, the Justice Department announced.

    Among the allegations against Turner is that he “conducted seminars at which he taught attendees how to file retaliatory liens against government officials and to defraud the IRS by preparing and submitting fictitious bonds to the United States government in payment of federal taxes,” the Justice Department said.

    “Turner is alleged to have attempted to pay his own taxes with a fictitious $300 million bond and to have assisted others in attempting to pay their taxes with fictitious bonds purporting to be worth amounts ranging from $10 million to $100 billion,” the Justice Department said.

    The IRS and the FBI led the probe, the Justice Department said.

    So-called “sovereign citizens” may have an irrational belief that laws do not apply to them.

    Purported “sovereign citizen” Kenneth Wayne Leaming — a mainstay in the AdSurfDaily Ponzi scheme story — was arrested by the FBI last year on charges he filed bogus liens against at least five public officials involved in the ASD case, including a federal judge, three federal prosecutors and a special agent of the U.S. Secret Service.

    He also is accused of uttering a bogus “bonded promissory note,” concealing fugitives wanted in a home-business caper and being a felon in possession of firearms.

    Leaming also has sought to sue President Obama and U.S. Attorney General Eric Holder on a theory they are imposters in office. In June, Leaming, 56, sought to sue a county sheriff in Arkansas, demanding purported damages be paid in gold and silver.

    In August, purported “sovereign citizen” Michael Chung, 52, was arrested in New York on charges that he threatened to kill two bank employees.

  • BULLETIN: Mantria Ponzi Scheme Pitchmen Hit With Millions Of Dollars In Disgorgement And Penalties — And Principals Ordered To Pay Tens Of Millions

    Mantria CEO Troy Wragg in a music video by ICEBLOC.

    BULLETIN: Two pitchmen for the Mantria Corp. “green” Ponzi scheme have been ordered to pay millions of dollars in disgorgement and penalties, including a purported wealth coach who advised people who contacted him after the 2009 collapse of Mantria to join the Trump Network MLM “opportunity.”

    Mantria purportedly was an environmentally friendly investment opportunity. In reality, the SEC said, it was a massive Ponzi scheme that was selling unregistered securities through unregistered broker-dealers.

    Any returns paid to investors “were funded almost exclusively from other investors’ funds,” the SEC said.

    Wayde M. McKelvy of Speed of Wealth LLC was ordered by U.S. District Judge Christine M. Arguello of the District of Colorado to pay $6,273,632.78 in disgorgement, interest of $869,141.87 and a civil penalty of $6,273,632.78.

    McKelvy, an MLM pitchman who also was pushing Mantria, described himself as a wealth coach with “Wealthalete[s]” as pupils and prospects.

    McKelvy’s former wife — Donna McKelvy — was ordered to pay $429,731.84 in disgorgement, interest of $55,172.93 and a civil penalty of $214,865.92.

    Arguello ordered even greater disgorgement and penalties against Mantria principals Troy B. Wragg and Amanda E. Knorr.

    “The Court ordered Wragg and Knorr to pay $37,031,035.36 in disgorgement plus interest of $3,713,772.06 jointly and severally with Mantria Corporation and a civil penalty of $37,031,035.36 each,” the SEC said today.

    All in all, Arguello ordered more than $135 million in monetary relief in the Mantria/Speed of Wealth case, the SEC said.

    The agency brought the Mantria Ponzi case in 2009, saying the “promoters fraudulently exaggerated Mantria’s green initiatives and used high-pressure tactics to convince investors to chase the promise of lucrative returns.”

    Strangeness marked the early days of the Mantria case. When reporters contacted Wayde McKelvy by email for comment, they received back a pitch for the Trump Network.

    “I am totally focused on one thing right now which I believe will be very, very fun and the opportunity to put money in your pocket by owning you’re [sic] own business with the help of ‘The Donald,” one of the McKelvy pitches claimed.

    Among other things, Mantria traded on the name of former President Bill Clinton, along with a host of other politicians and celebrities. It is not unusual for scams to attach their names to prominent individuals.

     

     

  • BULLETIN: Zeek Had $20.7 Million In AlertPay/Payza And $20 Million In SolidTrustPay

    Screen shot: Accused Ponzi schemer Paul R. Burks of Rex Venture Group LLC advised Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina today about Zeek's relationships with various financial vendors. The alleged Zeek Rewards Ponzi scheme operated through Rex Venture..

    BULLETIN: (UPDATED 9:18 P.M. EDT U.S.A.) New court filings by accused Ponzi schemer Paul R. Burks of Rex Venture Group LLC show that Zeek Rewards had more than $40 million in offshore payment processors.

    Included in that sum is $20.765 million in Canada’s AlertPay/Payza, and $20 million in Canada’s SolidTrustPay.

    Today’s filing also shows $10 million on deposit at Bank of America. Court filings in the AdSurfDaily Ponzi scheme case brought by the U.S. Secret Service in 2008 show that ASD also banked at Bank of America.

    On Aug. 17, the SEC alleged that North Carolina-based Zeek was a massive online Ponzi- and pyramid scheme that had gathered $600 million since January 2011. Filings by Burks today suggest Zeek did it all with fewer than 40 employees, including part-time contractors such as attorneys and consultants in areas such as payroll, accounting, compliance and marketing.

    Included among the consultants listed by Burks was Keith Laggos, a purported MLM expert. Laggos once opined that AdSurfDaily was not a Ponzi scheme. ASD President Andy Bowdoin later admitted that it was. Bowdoin was sentenced last month to 78 months in federal prison.

    Visit the ASD Update Blog’s files site to read Zeek-related court filings.

    Visit the website of Kenneth D. Bell, the court-appointed receiver in the Zeek case. Read the FAQs on the receiver’s website.

  • PP Blog Still $47 Short: [SEPTEMBER DONATION RE-POST]: The Challenges Are Unprecedented — And The PP Blog Continues To Serve Its Readers

    Dear Readers,

    UPDATED 8:13 P.M. EDT (SEP.16. , U.S.A.) As noted on Sept. 15, the PP Blog is $255 $205 $155 $105 ($47) short for September. The matter is pressing now, so this post has been republished.

    The past few weeks have been something that approaches crazy. The PP Blog is doing some of its most important work to date — and there is plenty more to do.

    The need this month again is on the order of $550. Our readers sustained us again last month, but once again it came down to the 11th hour. As always, every story you’ve read this month was made possible by our small universe of contributors.

    Our mission is to keep you reliably informed and to provide content that provides both the backstory and analysis. Ponzi schemes and online fraud are a world scourge. These moments in history are unprecedented and create economic and security challenges never before seen in the history of mankind.

    Please contribute if you’re able.

  • Now, Another ‘Program’ Uses Name Of JustBeenPaid: ‘JustBeenPaidNew’ Says It Features ‘Attractive 2.5% Daily Plans’ With Payments Through Payza

    This YouTube video purports to provide instructions on how to send money through Payza to JustBeenPaidNew, apparently an emerging "program" trading off the name of the JustBeenPaid scam.

    Yet another “program” appears to be trading off the name of JSS Tripler/JustBeenPaid. The new “program” is known as “JustBeenPaidNew.” It uses a domain registered Sept. 9 behind a proxy and, in butchered English, makes claims such as this:

    “We have some Good Professional Fund Managers, and thay [sic] invests [sic] in the global currency trading market . . . Conferm  [sic] your sign up and get $5 as [a] sign up bonus.”

    JustBeenPaidNew says its uses Payza, Skrill and Liberty Reserve as payment processors. A JustBeenPaidNew video apparently uploaded to YouTube in recent hours shows what purports to be a Payza back office. The video is titled “Upload Fund to Justbeenpaid New.Com from Payza Account” — and viewers receive instructions on how to fund their accounts through Payza.

    A section of the video instructs viewers to “Invest $10 in a position and get 2.5% daily profit for 60 dayes [sic.]”

    Claims in the video appear to put JustBeenPaidNew at odds with a policy Payza announced on July 13 that banned “[a]ny indication or demonstration of a literal rate of return on a contribution, payment or investment, while not being licensed to sell or solicit.”

    When clicked, a link styled “Tarms [sic] & condition [sic]” on the JustBeenPaidNew site loads a page that makes this bizarre representation:

    “JustBeenPaidNew.Com [sic] registered as an international limited liability company and not a bank nor [sic] a security [sic] firm. An investment with us is not insured or guaranteed by the ‘Federal Deposit Insurance Corporation’ and/or any other government agency existing out there.”

    In 2011, a “program” known as “JSS Tripler 2” launched, using the name of JustBeenPaid’s JSS Tripler entity. JSS Tripler 2 later collapsed.

    JustBeenPaid was the 2-percent-a-day “program” purportedly operated by Frederick Mann. JustBeenPaid now is morphing into a scam known as “ProfitClicking,” amid reports of Mann’s sudden retirement from JustBeenPaid.

    At 3:44 a.m. EDT today and again at 3:47 a.m., the PP Blog received affiliate spam from a JustBeenPaidNew promoter. Logs suggest the spam was sent from Bangladesh.