The PP Blog was subjected to a "mass injection" attack from the website whose domain name is circled above, according to the Blog's security software. The Blog visited the website today as part of its research/reporting on the alleged Jeremy Johnson/IWorks Inc. fraud case brought by the FTC in December 2010. The case has been marked by strange developments.
ANNOUNCEMENT/ALERT: UPDATED 6:10 P.M. EDT (U.S.A.) The PP Blog is publishing this post in an abundance of caution. Based on a security alert the Blog received this afternoon, it may be best to steer clear of the website circled in the graphic above and described below.
On Jan. 4, 2012, the Blog reported that the Federal Trade Commission had filed an emergency motion in Nevada federal court in December 2011 alleging that longtime FTC staff attorney Collot Guerard had been targeted in a web harassment campaign that stemmed from the Jeremy Johnson/IWorks civil fraud prosecution.
As part of the harassment campaign, the FTC said, a website that formed its name with Guerard’s name was registered.
The domain went offline for a while, and then returned.
When the PP Blog went to the URL of the domain at approximately 3:22 p.m. EDT today, its security software blocked what was described as an “intrusion attempt” from a “mass injection” website.
The full meaning of this development is unclear. The PP Blog left a voicemail message at the FTC at approximately 3:24 p.m. EDT today. The agency has not responded to the Blog’s message.
For security reasons, the PP Blog has taken three columns offline that referenced the specific domain that included Guerard’s name. We hope this will be temporary.
BULLETIN: Richard F. Reynolds, of the region of Bozeman, Mont., is wanted on 20 felony warrants, Montana officials said. Reynolds also is known as Richard F. Adkins.
Reynolds, the office of Montana Commissioner of Securities Monica J. Lindeen said, presided over an “elaborate” caper that swindled “at least 140 victims from 21 states and 6 countries.”
Between 2008 and 2011, the scam “shuffled investor’s money across more than 30 bank accounts to be spent on new cars, international vacations, and a new home for Reynolds and his wife,” Lindeen’s office said.
As many as eight corporations Reynolds created over the three-year period may be part of the swindle, Lindeen’s office said.
An investigation has been under way for 19 months, Lindeen’s office said.
Reynolds faces up to 200 years in prison. The investigation is being conducted by Lindeen’s office and the Gallatin County Attorney’s Office, authorities said.
A former employee of Reynolds told investigators that Reynolds was a devoted scammer “not concerned about who he hurts — seniors, and even single parents with kids,” Lindeen’s office said.
“Reynolds allegedly used his connections with various ministers, pastors, and other religious leaders to recruit victims into his scheme,” Lindeen’s office said. “Pastors told investigators Reynolds paid approximately 10 percent of new funds they brought into the scheme, and tax records indicate that the pastors were considered employees of Reynolds’ companies. The pastors said they believed all of the money was being invested in foreign currency trading or gold opportunities until Reynolds abruptly cut off contact in the fall of 2011.”
Some of the investors hailed from Russia, Mexico, Germany and South Korea, Lindeen’s office said. Court documents also reference Canada.
Reynolds has not been arrested and is considered “wanted,” officials said.
When arrested, Reynolds faces bond of $10 million, officials said.
He was associated with an “umbrella” entity known as “United Consultant Investment Corporation” and nested “pyramid schemes” and embezzlement within his elaborate fraud mix, officials said.
“Marketing materials given to potential victims promised 100 percent quarterly returns on investments in Reynolds’ phony gold and foreign currency trading schemes through two of his companies, Buffalo Exchange and Buffalo Extension LLP,” officials said.
Losses preliminarily are estimated at more than $5 million.
Sample advertisement promising relief from foreclosure: Source: FTC
BULLETIN: A federal judge in the Central District of California has approved asset freezes and appointed a receiver in a case in which the FTC alleged several companies and a scammer-in-chief were running two mortgage-relief fraud schemes.
The scam, the FTC said, traded on an image of President Obama and used at least three .org sites to separate homeowners who already were financially strapped from even more money.
Named defendants were Sameer Lakhany of Santa Ana, Calif.; The Credit Shop LLC of Orange, Calif.; Fidelity Legal Services LLC of Orange, Calif.; Titanium Realty Inc. of Anaheim, Calif.; Precision Law Center Inc. of South Coast Metro, Calif.; and Precision Law Center LLC, also of South Coast Metro.
Lakhany also controlled three .orgs from which the scam was carried out, the FTC said: FreeFedLoanMod.org, HouseHoldRelief.org and MyHomeSupport.org.
In stunning allegations of relentless fraud aimed at vulnerable Americans, the FTC said Lakhany and his business entities authored a con “that falsely promised to get help for homeowners who joined others to file so-called ‘mass joinder’ lawsuits against their lenders.”
As part of the mass-joinder fraud, the scammers charged “$6,000 to $10,000 in advance, but failed to get the results they promised,” the agency alleged.
In the second fraud, the hucksters “promised but failed to deliver relief from . . . mortgages and foreclosures,” even after charging customers “between $795 to $1595 each for a so-called ‘forensic loan audit.’”
The defendants, according to the FTC, “told consumers these audits would find lender violations 90 percent of the time or more, and that the resulting legal leverage would force their lender to give them a loan modification that would substantially improve their mortgage terms. The defendants falsely portrayed themselves as non-profit, free, accredited, or HUD-certified housing counselors with special qualifications to help obtain mortgage loan modifications and avoid foreclosure.
“They promised consumers that the forensic loan audit would be the only charge not covered by their ‘free’ service, and that if the ‘audit’ did not turn up any violations, consumers could get a 70 percent refund and still obtain a loan modification. They also told consumers their loan modification requests would be seriously delayed without the audit,” the FTC charged.
The scams traded in part on an image of President Obama, the FTC said.
One ad featuring an Obama image urged consumers to call a toll-free number to “Speak With a Counselor and Receive a FREE Loan Modification Under the Obama Loan Modification Programs,” the FTC said.
Using various misrepresentations, the scammers targeting vulnerable Americans took in more than $1 million, the FTC said.
The addresses of Credit Shop LLC and Fidelity Legal Services LLC were mail drops, the FTC said.
BULLETIN:Stewart David Nozette, the Maryland man with a PhD from the Massachusetts Institute of Technology and a “Top Secret” security clearance, has been sentenced to 13 years in federal prison on charges of tax fraud and attempted espionage.
The espionage case was brought by the FBI after Nozette — believing he’d been recruited by Israel’s Mossad to spy on the United States — accepted $10,000 left by the FBI in an undercover sting. In effect, Nozette sold out his country for the price of a used car and the expectation that more cash would be forthcoming.
Nozette already was under investigation for tax evasion and financial fraud against the United States when he was arrested in the 2009 sting.
“Stewart Nozette’s greed exceeded his loyalty to our country” said U.S. Attorney Ronald C. Machen Jr. of the District of Columbia. “He wasted his talent and ruined his reputation by agreeing to sell national secrets to someone he believed was a foreign agent. His time in prison will provide him ample opportunity to reflect on his decision to betray the United States.”
The case was notable for reasons other than Nozette’s bid to sell out his country. Indeed, elements of the case were prosecuted by Machen’s office — an office familiar to readers of the PP Blog because it brought the AdSurfDaily Ponzi scheme case (under then-U.S. Attorney Jeffrey A. Taylor) in 2008 and supervised the return in 2011 and 2012 of more than $59 million (under Machen) to defrauded ASD investors.
Michael K. Atkinson, the assistant U.S. Attorney who led the Nozette tax and fraud prosecutions, once was assigned to the ASD case.
Nozette “betrayed his country and the trust that was placed in him by attempting to sell some of America’s most closely-guarded secrets for profit,” said Assistant Attorney General Lisa Monaco.
Monaco is from the Justice Department’s National Security division. She joined Machen in making the announcement about Nozette’s sentence, along with Principal Deputy Assistant Attorney General John A. DiCicco of the Tax Division.
Also joining in the the announcement were James W. McJunkin, assistant director in charge of the FBI’s Washington Field Office; Paul K. Martin, inspector general for the National Aeronautics and Space Administration (NASA OIG); Eric Hylton, acting special agent in charge of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI); and John Wagner, special agent in charge of the Washington, D.C., Office of the Naval Criminal Investigative Service (NCIS).
“Federal agents take an oath to protect our nation ‘against all enemies, foreign and domestic,” said Wagner. “That would include ‘insider threats’ like Stewart Nozette.”
Nozette, 54, parlayed his impressive academic credentials and MIT doctorate in planetary science into a career in which he conducted business with the U.S. government. He worked at the White House, for example, on the National Space Council through the Executive Office of the President of the United States.
Prosecutors said he also worked as a physicist for the U.S. Department of Energy’s Lawrence Livermore National Laboratory, and also had access to the U.S. Naval Research Laboratory (NRL) in Washington, D.C., the Defense Advanced Research Projects Agency (DARPA) in Arlington, Va., and NASA’s Goddard Space Flight Center in Greenbelt, Md.
“We are particularly proud that NASA OIG’s fraud investigation of Nozette, which began in 2006, served as the catalyst for further investigation and today’s outcome,” said Martin, NASA’s inspector general.
The indictment did not allege that the government of Israel or anyone acting on its behalf committed any offense under U.S. laws in this case, prosecutors said.
“Where does JustBeenPaid get the money to pay that kind of interest?” — Caller “Michael” from “San Francisco” in March 15 JSS Tripler/JustBeenPaid conference call
“Well, first of all, JBP or JSS Tripler is a revenue-sharing program, so that means some of the money comes from new members buying positions. Then, we are in the process of developing additional income streams, so that’s relevant. And eventually the additional income streams may be sufficient to pay the 2 percent — maybe not.” — Response by Frederick Mann, purported JBP/JSS operator, to “Michael’s” question, March 15, 2012
Frederick Mann
UPDATED 7:26 P.M. EDT (U.S.A.) In yet-another bizarre conference call for JSS Tripler/JustBeenPaid, the “program’s” purported operator told listeners from the United States and Canada (and possibly from Jamaica) that JSS/JBP is paying them with money sent in by “new members.”
Using “new” money to pay “old” members is the central element of a Ponzi scheme — although Frederick Mann did not use the phrase. Still, it was the white elephant in the conference room, and Mann’s explanations during the March 15 call became increasingly complex, vague and incongruous.
Mann, for instance, declined to say where the program was operating from, repeating his practice of nondisclosure from previous calls.
What’s important, he explained, “is that our programs are not U.S.-based. We don’t have any offices in the U.S. Our servers are not in the U.S.”
The explanation caused a chuckling U.S. caller to quip, “Yeah. I agree. Somewhere out in the galaxy.”
“Yes,” Mann replied to the caller’s “galaxy” remark. The caller earlier had described himself during the March 15 call as a “financial planner” for 22 years. In a previous call, the caller said he was in “California” and had family in Iowa.
And Mann advised listeners that it was OK to call JSS/JBP an investment program when they were recruiting new members — guidance that seemed to catch even the conference-call host off-guard.
“And I know that, in the [separate conference] room, we do try to say ‘purchase’ and ‘repurchase’ as opposed to ‘invest’ and ‘reinvest,’” the female host said.
It is common for HYIP scams and their purveyors to seek to avoid the language of investments when promoting “programs” — on the errant belief that avoiding such language insulates them from prosecution.
The female host did not say why the other room was giving one set of instructions and Mann another. Regardless, internal inconsistencies are one of the hallmarks of HYIP scams, and it is well-known that wordplay designed to disguise securities fraud cannot insulate purveyors from prosecution — rather like a robber who uses a gun to snatch the purse of an 80-year-old woman cannot avoid prosecution by calling the robbery an innocent exercise in arranging a loan and insisting that the gun was a harmless piece of metal that just happened to be at the scene.
Mann, whose name appears in 2008 materials identifying him as a promoter of the alleged AdSurfDaily Ponzi scheme, said nothing about whether JSS/JBP had any securities registrations or whether promoters of the “program” were risking a legal calamity by recruiting downlines into a scheme that does not identify itself with a nation-state and whose payout corresponds to a preposterous annualized return of 730 percent .
The bank accounts of some individual ASD promoters were seized by the U.S. Secret Service in the ASD Ponzi case, according to court filings. JSS/JBP purports to pay a daily return double that of ASD.
Income Streams Are Theoretical; ‘Free’ Members Dominate JSS/JBP
The most troubling explanation — among any number of troubling explanations during the 1:11 call — was Mann’s assertion in response to a question from “Michael” of “San Francisco” about where JSS/JBP gets the money to pay a return of 2 percent a day. (The exchange is noted in the breakout quotes at the top of this story.)
Conceding that the company uses money from “new members” who buy “positions” to make the payouts, Mann simultaneously acknowledged that the “program” was “in the process” of developing new income streams and that those still-theoretical streams may be insufficient to sustain the scheme.
But the company’s “restart” feature, Mann suggested, was enough to defeat any concerns that the firm’s liabilities exceeded its assets.
“The 2 percent that the company pays is effectively a liability to the company,” Mann said. “But what the ‘restart’ makes possible is to convert some or even all of these liabilities into assets in the form of JSS positions.”
Even so, members needed “to bring in new members with new money,” Mann said. He later asserted that only “about 25 percent” of new registrants “put in money.”
“Maybe 75 percent of people do nothing,” Mann said, a problematic response because the program advertises that it provides registrants a $10 credit (described during the March 15 call as a loan) for joining and pays them interest of 20 cents a day until they realize a profit of $5 after 75 days.
When JSS/JBP debits a member’s account to recapture the purported loan, which apparently is made at an interest rate of zero percent, the company still is on the hook for the $5 due the new subscriber.
Speaking with a South African accent but using an American baseball metaphor, Mann said the lion’s share of JSS/JBP new members (about 75 percent) do nothing after enrolling
If the JSS/JBP program were baseball, Mann suggested, “The pitcher would pitch the ball, and they would watch it go by, they would just stand there.”
If Mann’s assertions are true, it means that only 25 percent of JSS/JBP’s members are propping up 100 percent of the enterprise, including the purported $5 profit due new registrants in 75 days and much larger payments due other members. Even if JSS/JBP enforces a cash-out minimum higher than $5 to prevent a flood a small redemptions, such a device leads to questions about whether the purported $10 credit is just a smaller scam within a larger scam that permits accrued liabilities to be ignored.
Much remains mysterious about JSS/JBP’s purported restarts and its in-house accounting methods. Other HYIPs have used similar devices to duck the Ponzi issue. But with its “restart” explanation, JSS/JBP may be inviting questions about whether is has introduced Enron-like accounting tricks into the morass.
Enron’s 2001 collapse revealed one of the greatest financial scandals in U.S. history. It destroyed not only the company, but also the Arthur Andersen accounting firm. (See “Enron scandal” Wikipedia entry.)
Is JSS/JBP a miniature Enron-in-waiting?
Among the callers who asked questions during the call was a JSS/JBP member who described himself as “Earl,” a 79-year-old man interested in leaving money for his daughter.
Also on the line was a man who suggested he hailed from Jamaica and wanted to start a JSS/JBP account for a “nonprofit, for a school that I have, that I attended in Jamaica.”
Other callers identified themselves as residents of the Canadian provinces of British Columbia and Alberta and the U.S. states of California, South Dakota, Texas, Georgia, Missouri and Louisiana.
One caller asked Mann why electronic payments from JSS/JBP came from “Michael” at a BigBooster.com email address, not an email address associated with the JSS/JBP domains.
“Michael is a business partner, and he handles some of the finances,” Mann said. He did not identify “Michael” by a last name.
Mann also advised callers that JSS/JBP had two representatives in Italy, but did not speak to the JSS/JBP-related probe involving the program’s affiliates announced by the Italian securities regular CONSOB in January.
One caller informed Mann that his downline recruits has put in “substantial” sums. Another complained that his account had been debited weeks in advance of the anticipated debit. Another complained that the website was unattractive to potential recruits and looked like a scam. Yet another fretted that the site appeared to lack a secure connection (https). Still another complained that his “matrices” did not appear to be cycling properly.
HYIPs are infamous for creating one set of expectations and then changing the rules at midstream. They’re also infamous for their convoluted explanations and fuzzy — if not downright impossible — math.
Like ASD’s Andy Bowdoin — now under indictment amid charges that he orchestrated an international Ponzi scheme that had gathered at least $110 million — Mann has been accorded the description of “genius” in promotions for the program.
This ad for a purported Thailand escort service appears today in the United States on AdLandPro, a site whose operator is threatening a class-action lawsuit against RealScam.com, an antiscam forum. The PP Blog captured this screen shot today and edited it to remove the images of EIGHT AdLandPro members whose photographs were displayed in the left sidebar and created the appearance that the AdLandPro members also were members of (or approved of) the escort service. When the Blog reloaded the ad, the page displayed the images of EIGHT other AdLandPro members. A third reload served up an image of an entire family, including three young children who appear to reside in the South Central United States.
In November 2011, the PP Blog reported that Bogdan Fiedur of AdLandPro had threatened antiscam site RealScam.com with litigation. The bid to chill RealScam in the age of international mass-marketing fraud featured the registration of a domain styled RealScamClassActionSuit.com.
With Fiedur trolling for suckers and hoping to make his intellectual dishonesty go viral, RealScam did not buckle at his obvious bid to chill it.
Good for you, RealScam!
It’s hard to condense all the AdLandPro absurdities that followed over the next several weeks, but we’ll summarize them as such: A sampling of Stepfordian shills and mindless apologists stepped up to the plate for Fiedur, “fake” law students purportedly from a major American university entered the fray to add to the bid to chill — and the matter devolved into Threatre of the Absurd in that Internet-only sort of way.
By the end of December, the chill bid appeared to end: Content on the purported class-action site went missing, and the site began to resolve to an AdLandPro page.
We would be remiss if we did not point out that, in addition to being solicited to register for HYIP scams such as AdSurfDaily, Finanzas Forex and JSS Tripler/JustBeenPaid (730 percent a year) by purported “Christians” on AdLandPro over the past few years, American visitors (and others) also were solicited for cross-border sales of pharmaceuticals.
If drugs weren’t on their purchase list, AdLandPro visitors were told how to find used underwear and arrange — umm, how should we put this? — the temporary services of scantily clad women in various nations from India eastward after demonstrating a way to pay?
At least some of the risqué ads have gone missing, but their URLs remain. When they’re clicked, they resolve to pages that show the faces of AdLandPro members who had nothing to do with the placing of the ads. Did we mention that AdLandPro purports to be a great guardian of privacy and the interest of its members?
And did we mention that not all of the risqué ads have gone missing — and that, when they’re clicked, they load images of AdLandPro members who had nothing to do with placing the ads and that AdLandPro wants members to believe it was a sort of Facebook before Facebook became the craze?
“The most exclusive, classic and attractive companions in Bangkok are here waiting to join you, at your hotel, apartment, or villa,” one ad on AdLandPro reads today. “All our princesses are hand picked by our management for their beauty, demeanour and friendly attitude.”
The ad is on the “community” subdomain of the AdLandPro.domain. When the PP Blog viewed the ad earlier today, the photographs of EIGHT AdLandPro members showed up in a sidebar only inches to the left. The headline above the sidebar read, “Our Members.” Less than an inch away, a photo of a presumptive “escort” wearing a pink-lace bra and a pink-lace wrap over her genital area appeared. The photo appeared to display two red telephones, with the woman posing seductively on what appeared to be a bed or mat.
When the PP Blog reloaded the page, the images of eight different AdLandPro members were displayed. A third reload resulted in the display of images of an AdLandPro family whose matriarch identified herself in her AdLandPro profile as a mother and grandmother from the South Central United States.
Two adults in the photo were holding young children, one of whom appeared to be an infant. A third child also appeared in the photo. Below that photo, the full-face image of a lone AdLandPro member — a woman — appeared. Below the woman’s photo, an ad for “OneX” appeared.
OneX is a program accused Ponzi schemer Andy Bowdoin of AdSurfDaily said he was using to raise funds to pay for his criminal defense.
“I believe that God has brought us OneX to provide the necessary funds to win this case,” Bowdoin said in an October 2011 pitch.
So, if you’re an AdLandPro member and had nothing whatsoever to do with the placement of the escort ad and do not endorse Thailand “princesses” purportedly “hand picked by . . . management,” say, because you oppose human trafficking and the sexual exploitation of women, AdLandPro is making it appear as though you’re on board the Thailand escort train.
A link prompt below the photos of the eight AdLandPro members reads, “See All 185753 Members.” The URL points to the AdLandPro membership directory.
By coincidence, the U.S. Department of Justice announced today that Marcus Choice Williams, 36, of Fort Worth, Texas, was sentenced to 30 years in federal prison followed by 30 years of supervised release for various felony offenses related to a conspiracy to traffic women for prostitution.
“The court’s sentence clearly reflects the seriousness of these awful sex trafficking crimes,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The victims suffered physical assaults, sexual abuse and daily degradation all because of this defendant’s greed and callous disregard for them as individuals. We are committed to prosecuting sex traffickers and vindicating victims’ rights, as they were vindicated today.”
Williams, prosecutors said, operated “adult escort web sites” as part of a human-trafficking scheme that also included money-laundering.
He “recruited vulnerable women, specifically single mothers from troubled backgrounds, and, in some cases used a combination of deception, fraud, coercion, threats and physical violence to compel the women to engage in prostitution, requiring each young woman to secure a daily quota of money, and if operating out of town, to wire the funds to him,” prosecutors said.
Crazier By The Moment
Just when one began to believe that AdLandPro had abandoned its absurd litigation threat against RealScam, guess what’s back? (You’d be right if you guessed the class-action site.)
And if ads on AdLandPro from “Christian” HYIP peddlers and purveyors of used underwear and illegal, cross-border pharmaceutical sales (after Google had agreed in August 2011 to pay the United States $500 million to settle claims of illegal cross-border solicitations for pharmaceuticals) were not enough, Fiedur’s purported class-action site is quoting a notorious YouTube cyberstalker and raunchy Internet gadfly, positioning him as an authoritative critic of RealScam.com.
It’s enough to make decent people from all corners of the world cringe as they contemplate whether intellectual corruption as practiced on the web has gained the upper hand.
WordPress suspended this JSS Tripler/JustBeenPaid affiliate Blog earlier today. Google had indexed a post on the site only hours earlier.
UPDATED 12:20 P.M. ET (U.S.A.) Within six hours of Google indexing (earlier today) a JSS Tripler/JustBeenPaid affiliate Blog using WordPress as a free platform from which to attract investors, Word Press caused the post to disappear.
Kudos to WordPress!
Visitors to the Blog URL of dailyrevenueresourcegroup.wordpress.com now see a message that the Blog “has been archived or suspended for a violation” of the WordPress Terms of Service.
The keyword title of the post, which now cannot be seen, was “How To Invest In JustBeenPaid.” The title ended with an exclamation point.
The post appeared to be a reposting of companion JSS/JBP-related content that appeared on Blogger, yet another free Blogging platform. The Blogger post remains active.
Amid claims that JSS/JBP’s advertised daily payout rate of 2 percent “is not a bad rate,” the now-missing WordPress post asked investors to compare JSS/JBP to a bank and planted the seed that prospects should choose the absurd program over the bank.
“Look at the banks [sic] they are only offering you .05-1% apr on yearly basis for savings accounts,” the now-missing WordPress post claimed.
In its introduction, the now-missing post claimed, “In this article it is my intent to help those that are unsure of how JustBeenPaid works and how to invest in it.”
Despite the WordPress ban, the same phrasing continues to appear on the Blogger site at Blogsport.com — along with at least three JSS/JBP affiliate links. The Blogger post is dated today.
It is common for promoters of highly questionable “opportunities” and even outright scams to rely on free hosting services in bids to recruit new affiliates and “earn” downline commissions.
Claims about JSS/JBP have been under investigation by CONSOB, the Italian securities regulator, since at least Jan. 23.
JSS/JBP does not disclose where it operates from. The scheme’s preposterous purported daily payout rate of 2 percent is double that of AdSurfDaily, which the U.S. Secret Service described in 2008 as an international Ponzi scheme that had gathered tens of millions of dollars.
Frederick Mann, JSS/JBP’s purported operator, described himself in 2008 promos as an ASD pitchman. In December 2010, ASD President Andy Bowdoin was indicted on charges of wire fraud, securities fraud and selling unregistered securities.
JSS/JBP has no known securities registrations. The “program” operates in an MLM-like fashion in which prospects are told they’ll receive a return of 60 percent a month for their “positions” — on top of two-tier affiliate commissions totaling 15 percent for recruiting prospects who send money to the company via offshore payment processors.
Among other things, the Terms for JSS/JBP makes members affirm they are not government spies or media lackeys.
An ad banner accompanying the still-active Blogger post solicits prospects to “Start collecting Unlimited $15 payments Straight to your Alertpay account.” When the banner is clicked, it lands on a JBP affiliate page that asserts, “Quickly Get CLEVER[.] GET PAID FOREVER!”
“[F]raudulent commercial schemes are not noted for their internal consistency.” — Professor James E. Byrne, consultant to FBI and Scotland Yard (among others) and HYIP expert hired by U.S. government to assess the alleged Pathway To Prosperity scheme in 2010
Frederick Mann
In a bizarre conference call for the JSS Tripler/JustBeenPaid “program,” a caller who identified himself as a former AdSurfDaily member raised the issue of the ASD Ponzi scheme case brought by the U.S. Secret Service in 2008, questioning whether JSS/JBP was safe from regulatory scrutiny or “getting too big and drawing certain attention.”
The implication of the remark was that the attention of the U.S. government would be unwanted.
With listeners identifying themselves as U.S.-based members of JSS/JBP on the line, Frederick Mann suggested that his purported program was outside the reach of U.S. law enforcement.
“Just Been Paid is not based in the U.S.,” Mann replied to the caller, after the female host of the call had paraphrased the caller’s query to Mann. The host paraphrased the question because Mann said he didn’t catch it the first time around.
” . . . [H]e was making reference to AdSurfDaily and that they were closed down, and he wants to know what we have in place to protect Just BeenPaid for it not to happen like AdSurfDaily,” the host said to Mann.
“Just Been Paid is not based in the U.S., and our servers are not in the U.S.,” Mann replied. “We don’t have an office in the U.S.”
But Mann’s answer did not speak to costly civil and criminal litigation that could ensue against JSS/JBP’s U.S.-based members, all of whom are using wires that run through the United States to participate in the purported program and some of whom are using U.S. wires to recruit downline members. Nor did the answer speak to actions the United States could take against JSS/JBP itself.
In 2008, marketing materials identified Mann as an ASD promoter. In January 2012, the Italian securities regulator CONSOB announced a JSS/JBP-related probe and issued a 90-day suspension order. JSS/JBP purports to pay out at a daily rate of 2 percent, double that of ASD. On an annualized basis, the payout rate of JSS/JBP corresponds to a return that is between 48 and 73 times the typical rates that put Bernard Madoff in prison for 150 years. ASD President Andy Bowdoin was indicted on Ponzi scheme charges in December 2010.
Bowdoin specifically was accused of wire fraud, securities fraud and selling unregistered securities. The U.S. Secret Service seized 10 of his personal bank accounts in August 2008, amid Ponzi allegations. Other court filings that became public in 2010 showed that the Secret Service also had seized bank accounts linked to some individual ASD promoters.
Mann previously has declined to identify JSS/JBP with a nation-state, meaning investors do not know where the “program” is operating from. JSS/JBP has no known securities registrations, and its U.S. affiliates very well could be selling unregistered securities to U.S. citizens via wire while at once implicating themselves and their recruits in a Ponzi scheme that is trying to disguise itself as a legitimate business.
Even if it is presumed to be true that the United States could not act against the company itself — and that’s a big “if” because U.S. law enforcement has a number of options should it choose to exercise them — U.S.-based affiliates of the “program” likely are running afoul of any number of civil and criminal statutes.
Internal Inconsistencies
In 2010, Professor James E. Byrne — who has consulted with the FBI and Scotland Yard and was hired by the United States to offer an expert opinion on the Pathway To Prosperity (P2P) HYIP scheme — observed that “fraudulent commercial schemes are not noted for their internal consistency” and that materials he examined in the P2P case displayed such inconsistencies.
After a probe by the U.S. Postal Inspection Service, P2P operator Nicholas Smirnow was charged criminally and accused of running an international financial scam. The purported return rate of JSS/JBP is somewhat on par with the rates of the alleged Smirnow/P2P HYIP scheme.
Internal inconsistencies were on full display during the March 8 JSS/JBP call featuring Mann.
As one example, a caller who identified himself as “John” and appeared to be speaking in U.S. English asked Mann for some specifics about the program, voicing that he was confused.
“All your marketing material — your website and now this conference call — has confused me more than anything I’ve ever heard in my life,” John said.
“You don’t have any answers for the [gentlemen] that have asked questions,” John said.
Mann suggested that John “submit a help request.”
Apparently growing agitated and increasingly confused, John shot back, “I submit that I just would like to have a straight answer.”
Mann again pointed John to the company’s web-based explanations and resources.
“The basic approach” to JSS/JBP, Mann explained, is to “find one thing that you understand and then find another thing that you understand, and that way you keep on finding things that you can understand.”
Unmoved by Mann’s response, John shot back, “I have two master’s degrees and I’m telling you that I do not understand it.”
John was the seventh caller to have asked Mann questions during the March 8 call. An eighth caller then came on the line. He identified himself as “Rick” (or by a name that sounded like Rick), saying he was from “California.” (Note: Garbling during the recorded call sometimes made it difficult to hear a name clearly.)
Rick questioned whether callers such as John should be asking Mann such “basic” questions, asserting that Rick, unlike John, had no master’s degree but nevertheless understood the program.
At that point, Mann observed that online money-making programs may have a “bigger learning curve.”
After Rick exited the line, a caller who identified himself as “Michael” from “San Francisco” stepped up to the plate for Mann and JSS/JBP.
Michael asserted that, like John, he has a “master’s degree,” adding that “I have lots of degrees” but noting that his academic pedigree was “really not applicable to online money-making.”
As guidance, Michael suggested that JSS/JBP promoters sign up for “all” of the payment processors used by the program — but Michael did not tell listeners that all of the processors with which JSS/JBP has associated itself are operating offshore (from a U.S. standpoint), are known to be friendly to fraud schemes and may deny customers U.S. consumer protections.
More Internal Inconsistencies
Other examples of internal inconsistencies presented themselves during the call, a recording of which was about 48 minutes in length.
One caller who identified himself as residing in “Florida” asked Mann about the importance of the “patent” claim on JBP’s website.
Mann initially replied that the “patent” claim is “not important at all.”
The response, however, gives rise to questions about why JSS/JBP even would mention a patent if it was “not important at all,” particularly since the “program” had altered the patent claim over time.
Prior to a website alteration that appears to have occurred last month, JSS/JBP made this specious claim: “JustBeenPaid! (JBP) and its related programs, including JSS-Tripler, are licensed under United States Patent 6,578,010.”
Those words were changed to read, “JustBeenPaid! (JBP) and its related programs operate in accordance with United States Patent 6,578,010 (now public domain).”
After reflecting on the caller’s patent question, Mann said this, “In any case, the patent is public domain. It doesn’t actually protect anything. But what is relevant about it is that a patent that covers some of what we do was issued and was approved by a government agency.”
In the United States, patents are issued by the U.S. Patent and Trademark Office, a government entity. The office is not the nation’s securities regulator.
It is common for scammers to try to associate a scheme with the government as a means of planting the seed that the government has full knowledge of the “program” and has endorsed it. The ASD scheme, for example, traded on the name of the President of the United States — something that caught the attention of the U.S. Secret Service, which has the twin duties of guarding the President’s life and protecting the U.S. financial system from criminals.
Callers also expressed confusion about “commission” payments from JSS/JBP and raised questions about an emerging JSS/JBP “Platinum” program that would accompany an existing “Premium” program through which some earlier members had paid higher fees believing they would “cycle” faster and make more money.
Based on comments made during the call, it appears as though the “Platinum” program is priced higher than the “Premium” program — and members are concerned that their earlier “Premium” purchases would be for naught if new “Platinum” purchasers effectively could pay more money to cut in line and “cycle” faster than them.
From WSPA: An agent returns inside to cart out another box at the headquarters of Atlantic Bullion and Coin Inc. in Easley, S.C.
UPDATED 7:31 A.M. ET (U.S.A., MARCH 17) State officials in South Carolina say Ronnie Gene Wilson and Atlantic Bullion and Coin Inc. were running a “precious metals” Ponzi scheme that gathered about $70 million from “numerous” investors in 25 states over the past three years.
After dark Thursday, the U.S. Secret Service was seen carting boxes out of the Easley, S.C., office of Atlantic Bullion. The scene was reminiscent of the earliest hours of the AdSurfDaily Ponzi case, which began as a civil probe by the Secret Service in August 2008 and eventually led to criminal charges against ASD President Andy Bowdoin of Quincy, Fla.
Like Bowdoin — once a councilman in Perry, Fla. — Wilson once was a councilman in Anderson County, S.C. The initial filings in the Wilson case suggest that he’d previously been on the radar of law enforcement for a scheme in the 1990s that led to a cease-and-desist order. Bowdoin also was implicated in a securities scheme in the 1990s, according to records.
South Carolina Attorney General Alan Wilson has filed a civil complaint in the Richland County Court of Common Pleas against Ronnie Gene Wilson.
Among the allegations is that Ronnie Gene Wilson “made false or misleading statements to investigators from the Securities Division, including statements regarding the quantity of silver that the defendants actually took possession of and held for clients,” authorities said.
“Investors must be wary of those looking to defraud and deceive,” Attorney General Wilson said. “The Securities Division will continue to watch for unscrupulous individuals and businesses looking to take advantage hard working investors.”
EDITOR’S NOTE: For the purposes of this column, the PP Blog is reporting on only a small number of references to JSS Tripler/JustBeenPaid in the past 24 hours, as compiled by Google’s “Past 24 hours” feature. Google also has a “Past hour” feature. At the time of this post, Google is reporting “About 3,970” indexed “results” for jss tripler during the 24-hour time period, yesterday to today. A good number of the returns are in languages other than English. (Editor’s note continues below screen shot.)
JSS Tripler/JustBeenPaid is an exceptionally murky “program” that purports to pay a return of 2 percent a day. That’s an absurd 60 percent a month — or, on an annualized basis, 730 percent, an ROI that would make Bernard Madoff gag. The “program,” which purports to be “indefinitely sustainable” and makes members affirm they are not government spies or media lackeys, has a strong presence on forums listed in U.S. federal court files as places from which Ponzi schemes are promoted.
On Feb. 27, the PP Blog reported that a website linked to Frederick Mann, the purported operator of the “program,” is publishing two videos and links to nine more that highlight Francis Schaeffer Cox, a purported “sovereign citizen” implicated in an alleged murder plot against public officials in Alaska.
“Sovereign citizens” have an irrational belief that laws do not apply to them. They have been implicated in numerous fraud schemes and may engage in what has become known as “paper terrorism” — i.e., the filing of false liens against members of law enforcement, false libel lawsuits against publishers and other bids to chill and nuisance the law-enforcement community or members of the media.
Mann declined to tell conference-call listeners on Feb. 23 even where the enterprise was operating from.
Despite these disturbing events, JSS Tripler/JustBeenPaid has achieved Internet virality and may be recruiting thousands of new affiliates daily. The bullet-point brief below condenses some of the affiliate claims in just the past 24 hours.
Despite repeated promotional references to the sum of $10, JSS Tripler/JustBeenPaid members do not have to limit their “purchase” to only one $10 position. The scheme could be raking in tremendous sums during an era of securities hucksterism that sometimes involves massive — if not epic — sums of money. It is not unusual for large sums to go missing, leaving defrauded investors holding the bag for tremendous losses. At a minimum, those losses contribute to the undermining of economies on a local level, perhaps particularly if groups of individuals from the same area become investors.
Source: Blog titled “Easy Online Money” with a kicker of “Change a life today!” Among the claims: “You are guaranteed to earn a daily 2% on the positions you purchase, thereby making a decent amount of passive income online working from home.”
Source: Blog at URL that is a subdomain of blogspot.com, a free Blogger platform hosted by Google. Among the claims: “You can fund your account with as little as $10, and earn 2% per day with no work.”
Source: Blog at another blogspot subdomain. Among the claims: “JSS-Tripler now has 294,651 members — having grown by just over 6,000 new members during the past 24 hours. Thank you to our many promoters for doing such a great job!”
Source: Text accompanying video on Google-owned YouTube. Among the text claims: “Once you are in JSS tripler . . . Click on ‘Financial’ tab . . . Scroll down you will have $10 in your jss tripler account . . . Click on ‘Buy Jss Tripler Position’ . . . Purchase 1 free position with the $10 you receive in your account . . . You will be getting 2% earnings on $10 [sic] i.e. $0.20 every day without doing anything . . . After the 75 days you make $15 dollars [sic] without any more investments or referrals. Then you invest back in $10 or whatever you like and you make more and more each day. Simple system really [sic] More position [sic] you purchase or get from referrals the more you make. Very simple process.”
Source: Blog titled “Money Making Tips.” Among the claims: “The level of support is better than any other program i have seen, the Daily Web Conferences with Carl Pearson are terrific. You can usually get your questions acknowledged instantly, you are kept up to date with what’s going on with this company, they provide training including tutorials and videos. You can access the conference area 24/7 [sic] a moderator is there to answer all your questions. JBP had just hired a new marketing leader, Louis Paquette[,] to help educate members in any areas where they need help.” [Note by PP Blog: Louis Paquette is referenced in this Feb. 4 PP Blog story, which reported that a JSS Tripler-related domain hosted in Utah mysteriously began to redirect to the Netherlands after a JSS Tripler-related action by CONSOB, the Italian securities regulator.]
Source: Blog at empowernetwork.com URL. Among the claims: “JSS Tripler Gives You the first $10 for FREE: My Total ‘2%’ Earnings Thus Far $4757.00.”
Source: Blog with a kicker of “Social Media Marketing Consultant.” Blog has accompanying YouTube video: Among the Blog claims: “I would like to help JBP grow, in any way I can contribute . . . It is my goal to add 60 active referrals over the next 6 months or less.” Among the video claims: “Makes It So Easy to Make Money Online that a Baby can Almost do it!” The text accompanying the video engages in considerable keyword stuffing with the phrase of “Make Money At Home” and similar phrases.
Source: Entry on apsense.com. Among the claims: “I just want to pay it forward and help others . . . get ‘$10 free money’ in your accounts . . . Buy a JSS-Tripler position and start earning 2% per day! . . . Inbite [sic] new members. There is an endless supply of people online looking for money making opportunities.”
Source: Blog styled “Success Instantly.” Blog has accompanying YouTube video. Among the video claims: “Compound your Earnings To INCREASE Your Daily Payout.”
EDITOR’S NOTE: Law enforcement has warned that “shell companies” are playing an increasingly larger role in criminal schemes, as scammers turn to them to sanitize their capers, disguise fraud, disarm skeptical investors and keep large sums of cash flowing.
The threat to the U.S. economy and the corrosive effects on legitimate commerce cannot be overstated in this unprecedented era of securities hucksterism. Not only are investors at risk, so, too, is faith in the marketplace itself. The SEC complaint referenced in the story below includes a mention of a website allegedly used as part of the hedge-fund fraud scheme of James Michael Murray.
UPDATED 4:34 P.M. ET (U.S.A., MARCH 16) The SEC has gone to federal court in San Francisco, alleging that Bay Area investment adviser James Michael Murray duped Market Neutral Trading LLC hedge-fund investors through a “shell company” he secretly controlled.
Murray, 42, of Larkspur, Calif., also has been charged criminally, the SEC said. Details about the criminal case were not immediately available.
But in the SEC’s civil action, the agency said that Jones, Moore & Associates Ltd. — purportedly an “independent” Delaware accounting firm that had assessed the hedge fund — actually was a “shell company” set up by Murray to dupe investors by issuing a “bogus audit report” and embellishing the strength of Market Neutral.
Not only was the accounting firm controlled by Murray illegitimate, “at least five” purported “professionals” whose names and purported academic pedigrees appear on the shell company’s website “do not exist,” the SEC charged.
Among the figments of Murray’s imagination were “Richard Jones” and “Joseph Moore,” the two named principals of the firm, the SEC charged.
The scam netted at least $4.5 million in spurts between July 2008 and November 2011, the SEC said.
“Murray conjured up an accounting firm and deliberately faked the audit to induce investors into believing the fund was in better shape than it actually was,” said Marc Fagel, director of the SEC’s San Francisco Regional Office.
