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  • President Raises Piracy Issue In State Of The Union Address Just Days After Justice Department Brings Megaupload Copyright-Infringement Case; Overall Fraud Battle Will Expand, Obama Tells Nation

    President Obama raised the issue of international piracy in last night's State of The Union address to the U.S. Congress.

    Speaking to the nation in his State of the Union address to Congress, President Obama last night referenced U.S. efforts to combat piracy. Although the remarks were in the context of battling knock-off goods that infringe trademarks and affect American manufacturing jobs, Obama delivered the message just days after the Justice Department brought racketeering and copyright-conspiracy charges in the Megaupload international piracy case — and the hacker’s group “Anonymous” retaliated by bringing DDoS attacks against government and other sites.

    Megaupload principal Kim Dotcom yesterday was denied bail in New Zealand, the country in which he was arrested on U.S. charges that Megauplaod had amassed at least $175 million through international web piracy.

    Obama referred to neither the Megaupload case nor the follow-up DDoS attacks. But the President did signal that the United States would not stand by idly and submit to the whims of pirates who seek to hide behind international borders and gorge themselves on profits derived from U.S. ingenuity.

    “It’s not right when another country lets our movies, music, and software be pirated,” the President said.

    Megaupload and related entities operated websites that caused at least $500 million in economic harm to U.S. companies by unlawfully reproducing and distributing “infringing copies of copyrighted works, including movies – often before their theatrical release – music, television programs, electronic books, and business and entertainment software on a massive scale,” the Justice Department said last week.

    “The conspirators’ content hosting site, Megaupload.com, is advertised as having more than one billion visits to the site, more than 150 million registered users, 50 million daily visitors and accounting for four percent of the total traffic on the Internet,” the Justice Department said.

    Law enforcement last week executed 20 search warrants in eight countries, including the United States. At least $50 million in assets and 18 domain names were seized, and servers in Canada, the Netherlands and the United States were targeted by investigators to freeze the fraud in its tracks, the Justice Department said.

    Obama also signaled that his administration’s overall fraud crackdown will continue and the the United States would dial up efforts to bring financial criminals to justice. Congress, he said, should stiffen fraud penalties.

    “We’ll also establish a Financial Crimes Unit of highly trained investigators to crack down on large-scale fraud and protect people’s investments,” Obama said.  “Some financial firms violate major anti-fraud laws because there’s no real penalty for being a repeat offender.  That’s bad for consumers, and it’s bad for the vast majority of bankers and financial service professionals who do the right thing.  So pass legislation that makes the penalties for fraud count.

    “And tonight, I’m asking my Attorney General to create a special unit of federal prosecutors and leading state attorney[s] general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis,” the President continued. “This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”

    The word “fraud” appeared four times in a White House transcript of Obama’s speech. It did not appear at all in the Republican response, which was delivered by Indiana Gov. Mitch Daniels and questioned where the United States would get the money to pay for programs in an era of runaway budget deficits.

    The government does too much meddling in business and engages in unrestrained spending, Daniels suggested.

    “In three short years, an unprecedented explosion of spending, with borrowed money, has added trillions to an already unaffordable national debt. And yet the president has put us on a course to make it radically worse in the years ahead,” Daniels said, according to a CNN transcript.

    “In word and deed, the president and his allies tell us that we just cannot handle ourselves in this complex, perilous world without their benevolent protection,” Daniels said. “Left to ourselves, we might pick the wrong health insurance, the wrong mortgage, the wrong school for our kids; why, unless they stop us, we might pick the wrong light bulb.

    “A second view, which I’ll admit some Republicans also seem to hold, is that we Americans are no longer up to the job of self-government. We can’t do the simple math that proves the unaffordability of today’s safety net programs, or all the government we now have. We will fall for the con job that says we can just plow ahead and someone else will pick up the tab. We will allow ourselves to be pitted one against the other, blaming our neighbor for troubles worldwide trends or our own government has caused.”

    A highlight of last night’s State of the Union address was an emotional appearance by Rep. Gabrielle Giffords in the House Chamber. Giffords was shot in an assassination attempt a year ago. Still in the process of recovering from her wounds at the hands of a deranged man with a gun, she is leaving the Congress.

    U.S. District Judge John Roll was killed in the same attack, as were a nine-year-old girl, three senior citizens in their seventies and a 30-year-old Congressional aide engaged to be married.

    Both sides agree that Giffords, who is married to an astronaut, is an American hero whose courage has set an example for all. Both sides also agree that politics in the United States has become polarizing

    What neither side appears to agree on is how best to address polarization, kickstart the economy, regulate the U.S. markets and equip agencies to meet modern challenges, including the unique challenges of the Internet age.

  • ‘OneX’ And Club Asteria Pitchman ‘Strosdegoz’ Turns Attention To New ‘Program’ Called ‘Huge Yield’; Flogging On Ponzi Boards Has Begun Amid Early Report Of DDoS Attack

    Veteran Ponzi-board huckster “strosdegoz,” also known as “manolo,” now is flogging a new “program” known as “Huge Yield.” There already is an unconfirmed report that HugeYield has suffered a DDoS attack.

    “strosdegoz” emerged last year as a regular shill for Club Asteria, the purported Virginia-based program that became a Ponzi-forum darling and later announced its PayPal account had been suspended. Claims about ClubAsteria came under investigation by CONSOB, the Italian securities regulator, and the American Red Cross later clashed with the purported “program,” which traded on the name of the relief agency.

    As time moved on, “strosdegoz” later joined  accused Ponzi schemer Andy Bowdoin of AdSurfDaily in flogging a mysterious “program” known as “OneX.” There is a report today that Bowdoin either canceled or postponed his latest OneX pitch because a fellow pitchman identified as “Alan” has “pneumonia and is not able to do anything right now.”

    The pneumonia announcement was attributed to an email sent by Bowdoin, who is accused of orchestrating an international Ponzi scheme involving at least $110 million through ASD. His criminal trial is set for September 2012.

    Huge Yield purports that $120 can turn into $1,000. The following HugeYield claims are verbatim:

    “A Traditional SPICED UP follow your sponsor 2×2 that will surprise anyone online TODAY! HugeYield has changed the way marketing a tradition 2×2 is done. We have added a safety net to ensure that all members progress through the program and make their ultimate goal, The $1000.00 Payout!”

    In the website’s FAQs section, a question about what payment processors HugeYield accepts is answered in this verbatim fashion:

    “We accepts payments and pays all commissions through Alertpay,liberty reserve and solid trust pay,perfect Money and Okpay.”

    Whether “”strosdegoz/manolo” is concerned about HugeYield’s apparent lack of grammar and usage skills is unclear.

    “strosdegoz/manolo” is pitching HugeYield on MoneyMakerGroup and TalkGold. In addition to ClubAsteria and OneX, he has pitched Centurion Wealth Circle and “The Tornado.”

    Both MoneyMakerGroup and TalkGold are identified in federal court filings as places from which international Ponzi schemes are promoted.

  • BULLETIN: Alaska ‘Sovereign Citizens’ Charged In New Indictment; Feds Say Francis Schaeffer Cox Had ‘Armed Security’ Force That ‘Stop[ed] Private Citizens Without Lawful Authority And Under The Force Of Arms’

    Francis Schaeffer Cox

    BULLETIN: A new superseding indictment has been returned in federal court in Alaska against purported “sovereign citizens” and “militia” members Francis Schaeffer Cox, Coleman L. Barney and Lonnie G. Vernon.

    In addition to the original charges outlined in an the first superseding indictment, the trio now is accused of conspiracy to kill federal officers and officials, according to the FBI.

    Cox further is charged with soliciting Barney and Vernon to murder federal officers, the FBI said.

    And  Cox, 27, Barney, 36, and Vernon, 57,  “are all charged with additional counts involving the carrying of firearms during a crime of violence,” the FBI said. “In addition to these charges, the indictment includes criminal forfeiture allegations relating to several seized firearms, silencers, and destructive devices.”

    Cox allegedly has asserted courts have no authority over him. The superseding indictment alleges that Cox and his militia colleagues, despite their sovereign posturing and beliefs the government has no legitimate authority over them, apparently divined themselves the right to assert authority over private citizens.

    Among other things, the indictment alleges that Cox had an armed security force and somehow persuaded himself that a federal “hit team” had been sent to Fairbanks to assassinate him, according to the indictment.

    With Cox scheduled to make a television appearance in November 2010, Cox, Barney, Vernon and others “developed a tactical plan to provide security for COX,” according to the new indictment. “Part of the tactical plan included the wearing of body armor, the possession of hand grenades, arming with semi-automatic weapons, the possession of 37mm launchers loaded with Hornets Nest anti-personnel rounds along with the creation and implementation of a deadly force policy in the event the federal agents arrived to arrest or attempt to kill COX.”

    On Nov. 23, 2010, according to the indictment, Barney, Vernon and others “established a tactical and armed perimeter security force of militia members around COX while COX was doing the television interview,” according to the indictment.  “This perimeter security force, among other things, trespassed on the private property of local citizenry while ‘patrolling’ on COX’s behalf, constructed a vehicular funneling point in order to stop and inspect the vehicles and identities of private citizens, and did, in fact, stop private citizens without lawful authority and under the force of arms.”

    The armed security detail asked citizens “for names and identification and prevented citizens from traveling either to their place of employment or their own private residences,” according to the indictment.

    While stopping citizens, Barney had “a semi-automatic assault rifle, an AR-15 .223 rifle,” according to the indictment..

    Attached to the “rail mount” of the semi-automatic rifle “was a 37mm launcher,” according to the indictment. “Loaded inside the 37 mm launcher was a ‘Hornets Nest’ anti-personnel round.”

    For his part, Vernon had “a semi-automatic assault rifle, a Sig Arms AR-15 .223 rifle,” according to the indictment.

    Also in November 2010 — apparently after divining himself the right to use armed guards to interrupt the free travel of private citizens — Cox paid for 16,000 newspaper ads, according to the indictment.

    Here is how the ads read:

    “The laws of The Judiciary appear to have been fraudulently displaced by a privately owned for profit corporation deceptively named the ‘Alaska Court System.’  This corporation and the Alaska Bar Association are under criminal investigation. If you have had a case decided without full disclosure of the true nature of the ‘Alaska Court System’ the damages can be corrected. Judgments can be overturned and you may be entitled to restitution! A public meeting to explain the process in simple laymen’s terms will be held at the CARLSON CENTER ON DECEMBER 1, AT 6:30 PM . . .”

  • PP BLOG POST NO. 1,500: ‘Anonymous’ Data Cannons, The Conscription Of The Unwitting Public To Wage An Electronic War On Law Enforcement — And Google And The ‘C’ Word

    Dear Readers,

    This PP Blog post is No. 1,500 since we switched to the WordPress platform in December 2008. Two years later, in December 2010, we commemorated our 1,000th post in this letter to readers, which rued the lionization of fools and hucksters on the Internet and questioned whether criminals and anarchists hold the upper hand.

    God help us if they do.

    Our concern that they might only was heightened last week with the DDoS attacks in which electronic data cannons were aimed at the websites of the U.S. Department of Justice, other U.S. government agencies and well-known recording-business entities after an indictment was unsealed in the Megaupload racketeering and copyright conspiracy case. There now are reports that a government site in Brazil was targeted, as well as the site of a Brazilian entertainer and other U.S. sites.

    Yes, electronic cannons — specifically Low Orbit Ion Cannons that had been fired from secret bedroom and home-office bunkers in a contemptible display of criminality that had been trained on sites paid for by taxpayers and legitimate business entities and designed to knock them offline.

    There are reports that Anonymous, the hacker’s collective that took credit for firing the electronic cannons, duped people who did not want to fire cannons at sites paid for by taxpayers and consumers into firing those cannons. Otherwise law-abiding folks reportedly were drafted into a conspiracy to attack government property, also known as taxpayer property, by computer code placed by Anonymous that turned their machines into information-killing weapons.

    Putting it another way, Anonymous reportedly orchestrated an attack on U.S. government servers and conscripted unwitting participants to fire electronic weapons at websites operated by agencies whose mission is to keep the public safe from criminals: alleged would-be presidential assassins such as Oscar Ramiro Ortega-Hernandez of Idaho; Ponzi schemers and six-time felons such as Anthony Ray of Georgia; securities schemers such as Jenifer Devine of New Jersey; scammers who target seniors internationally such as Dennis Bolze of Tennessee; alleged con men such as Andy Bowdoin of Florida; purported “sovereign citizens” such as Kenneth Wayne Leaming of Washington state.

    Read more about Megaupload’s Kim Dotcom in the DailyMail. Anonymous apparently is putting him forth as a role model.

    The attacks in which unwitting participants reportedly found themselves unwillingly married to committed anarchists occurred within hours of Wednesday’s civil protests of the SOPA and PIPA antipiracy bills by Google, Wikipedia and others.

    ‘Anonymous’ Rains On Google’s Civics Parade

    Neither Google nor Wikipedia got much of a chance to take a victory lap and marvel in their abilities to enlist the public to cow lawmakers and stop legislation in its tracks. That’s because the Justice Department announced the Megaupload copyright prosecutions under existing law on Thursday, a day after Google used the “c” word (censor) and Wikipedia staged its blackout. The Anonymous cannon attacks on public and private websites soon began, and the attacks quickly darkened and short-circuited the afterglow and PR bonanzas Google and Wikipedia had enjoyed during the 24 hours in which their presumptively utopian protests unfolded.

    After being shown by Google and Wikipedia that Internet users practicing viral civics can freeze politicians during a U.S. Presidential election year in which 33 Senate seats and all 435 House seats also will be up for grabs, some lawmakers did manage to scrape up enough courage to allow that something specific needed to be done about online piracy.

    But whatever needed to be done could be done later, the cowed politicians ventured, apparently after even more jobs, wealth and creativity get stolen by pirates who know that law enforcement’s battle against piracy is constrained by budgets, Congressional disputes, international borders, masked IPs and unthinking or downright criminal consumers who buy stolen property from pirates whose sympathizers include the anarchists who wield Low Orbit Ion Cannons.

    Although Google and Wikipedia were hardly alone in their negative views about the proposed legislation, the opportunistic cannon attack by Anonymous that followed provided a stark reminder that extremists can hijack a presumptively well-meaning online civics lesson in a heartbeat and turn it into an international-security drama.

    And because Anonymous is a loose coalition, the opportunity for “lone wolves” with their own destructive agendas to emerge from within the ranks of Anonymous is high. If someone in Anonymous decides he or she is opposed to, say, Sunday church picnics, then any church that hosts such an event and promotes it on the Internet could have its website targeted by Low Orbit Icon Cannons.

    The PP Blog is feeling less free today on the Internet, the purported last bastion of freedom of expression. Although this Blog champions the First Amendment, its does not champion instances in which criminals hide behind the First Amendment to cover up or rationalize their crimes as a lawful expression of protected speech.

    We wonder if our advocacy for law enforcement and content creators could invite Low Orbit Cannon-firers to train their sights anew on us, thus subjecting us to the mercies of a mob that empowers itself to silence our voice while it champions its own with the conscription of a viral mob. At the same time, we wonder if our publication of certain court documents could cause cannons to be trained on judges and prosecutors and investigators and crime victims, thus delaying or derailing prosecutions and putting the government and individual officers on the defense against criminals.

    What happens, say, if an autosurf or HYIP with 500,000 members who purport to be Christians spreading the word that Jesus wants them to be rich decides the best way to derail a prosecution is to share a Low Orbit Ion Cannon among all members of the enterprise — or to create tens of thousands of websites designed to obscure or bury government and consumer-reporter warnings about international mass-marketing fraud?

    And what happens of Congress decides to author specific legislation against HYIPs and autosurfs after learning that the largest sports stadiums may not be big enough to accommodate all the victims of a single scam — and an army of Bible-toting scammers start crashing servers or waging a disingenuous PR war against public servants and calling it free speech or an exercise in civics or civil disobedience?

    This is not the America we knew in the first 20 years of our journalism career. Something has gone horribly wrong in the past four or five years — and much of what has gone horribly wrong is attributable to viral criminals and their disingenuous cheerleaders and abettors on the Internet.

    A PP Blog companion site that featured news about Ponzi schemes was destroyed by pirates hiding behind servers on the other side of the world. The site’s content was scraped 100 percent and monetized. The thieves used us as their free labor force. It killed our site and our desire to keep it online.

    The PP Blog itself has survived DDoS attacks and has received a claim of responsibility — not from Anonymous, but from a purported advocate for HYIPs and online money schemes. It’s hard to count all the threats or bids to chill us that we’ve received, and we long ago reached the point that only a machine can count the bids to spam the Blog with offers for obvious scams or solicitations to visit piracy sites.

    For each published post, the Blog — on average — has received 100.09 spam communications. Looking at it another way, 100 scammers (or perhaps a smaller number with the ability to create the impression of scale) try to take advantage of the Blog’s work and ride its bandwidth and brand for every post we publish. Their business model is to flood antiscam sites with advertisements for individual scams.

    At the moment, the scammers appear to be concentrating on PP Blog stories involving the emerging OneX scheme.

    We are doing our best to keep you informed and are trying to out-think the scammers and criminals. Please help keep us around for Post 2,000.

     

  • BULLETIN: SEC Says St. Louis Man Went On ‘Spending Spree’ With Investors’ Money, Fleecing Them Of More Than $9 Million; Burton Douglas Morriss Charged With Fraud

    BULLETIN: The SEC has gone to federal court in Missouri and obtained an emergency asset freeze in a case that alleges a St. Louis man who operated private investment funds misappropriated more than $9 million from investors.

    Charged in the civil case is Burton Douglas Morriss, 49, and four companies: MIC VII LLC, Acartha Technology Partners LP, Acartha Group LLC and Gryphon Investments III LLC.

    Some of the money was steered to Morriss Holdings LLC, which is named a relief defendant for receiving ill-gotten gains, the SEC said.

    “It is fraud, pure and simple,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office.

    Investors’ money was used by Morriss to make alimony payments, pay interest on personal loans and take “costly vacations, including an African safari,” the SEC charged.

    “Morriss attempted to hide his illegal transfers of investor funds by calling them ‘loans’ when in reality he had no intention of paying back the money and instead went on a spending spree,” Bustillo said.

    Read the SEC’s emergency complaint.

  • BULLETIN: Verdict Goes Against TD Bank In Case Linked To Scott Rothstein Ponzi; Jury Awards $67 Million; Victorious Attorney For Investors Also Is Court-Appointed Receiver In Fraud Case With AdSurfDaily Tie

    BULLETIN: A Florida jury found that TD Bank assisted now-disbarred and imprisoned attorney Scott Rothstein in his epic Ponzi scheme and has found the bank liable for $67 million in damages.

    Read a story in the Sun Sentinel about the federal-court verdict that went against TD Bank.

    The victorious attorney in the civil case is David S. Mandel, who represented the plaintiffs against the bank.

    If Mandel’s name seems familiar to PP Blog readers, it’s because he also is the court-appointed receiver in the Commodities Online LLC fraud case brought by the SEC last year.

    Separately, a company known as SSH2 Acquisitions Inc. had sued Commodities Online figure James C. Howard III on Sept. 15, 2010, alleging that Howard and others were running a massive Ponzi scheme into which SSH2 had plowed $39 million.

    Records in Nevada show that former AdSurfDaily member and “Surf’s Up” forum moderator Terralynn Hoy was a “director” of SSH2.

    Hoy has not been accused of wrongdoing.

    The private lawsuit against Howard and the others became notable because of the clashing images: Although SSH2 was complaining about the alleged Ponzi scheme directed at it by Howard and others, it was doing so in the months after Hoy had helped lead cheers on Surf’s Up for accused ASD Ponzi schemer Andy Bowdoin, who was implicated by the U.S. Secret Service in an alleged Ponzi scheme even larger than Howard’s alleged scheme. Hoy also was a moderator on a forum that supported AdViewGlobal, an autosurf that vanished mysteriously in June 2009.

    Now defunct, Surf’s Up was known for unapologetic, unabashed cheerleading for Bowdoin, whom federal prosecutors said had swindled investors in Alabama in a previous securities caper during the 1990s and took in at least $110 million through ASD. Clarence Busby, an alleged business partner of Bowdoin and the operator of the Golden Panda Ad Builder autosurf, swindled investors in three prime-bank schemes in the 1990s, according to the SEC.

    More than $14 million linked to Golden Panda was seized as part of the ASD case — and yet the cheerleading for autosurf schemes continued on Surf’s Up. The forum labeled ASD pro-se litigant Curtis Richmond a “hero” after he accused the judge and prosecutors of crimes in 2009.

  • UPDATE: Fugitives Arrested With AdSurfDaily Figure Kenneth Wayne Leaming File Bizarre ‘Forgive Me’ Pleading In Arkansas Federal Court — AFTER Missing First Filing Deadline

    On Nov. 22, 2011, AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming was arrested by the FBI in Washington state on charges he filed bogus liens against at least five public officials involved in the ASD Ponzi case.

    Some ASD members apparently have relied on Leaming for legal advice, even though he is not an attorney.

    Leaming was found with two federal fugitives implicated in an Arkansas-based, home-business scheme involving envelope-stuffing, federal prosecutors said. Those fugitives — Timothy Shawn Donavan and Sharon Jeannette Henningsen — were indicted on mail-fraud charges in February 2011, according to federal records.

    Whether Donavan and Henningsen were ASD members is unclear. Also unclear is whether they relied on Leaming for legal advice at any point in time. Their filings, however, appear to be consistent with filings in cases involving purported “sovereign citizens.”

    Although Leaming remains jailed, Donavan, 63, and Henningsen, 67, were released on bond in Washington state several days after their arrests and kept a court date in Arkansas on Dec. 8. During their initial Arkansas appearance, both defendants suggested they’d defend themselves — while also ambiguously suggesting they might hire a lawyer, according to court filings.

    They again were released on bond, with the judge ordering them as a bond condition “to report to the court within 10 days o[n] whether they had hired an attorney or intended to pursue representing themselves.”

    They did not do so, according to federal court records. The judge then set a hearing date for Dec. 27 and required Donavan and Henningsen to formally explain whether they’d rely on attorneys or themselves to defend the case.

    On Dec. 27 — the date of the hearing and nine days after the initial deadline to inform the court on how they intended to defend the case — Donavan and Henningsen filed a bizarre pleading styled, “Notice: Forgive Me Request; Constructive Notice of Conditional Acceptance and Request to Continue Public Proceedings.”

    In the pleading, Donavan and Henningsen apparently argued that they needed “80” more days to make up their minds. Their trail date, however, already had been scheduled for Jan. 19, 2012. Both defendants were aware of the trial date, according to court records.

    It got stranger yet.

    “At the hearing and in their Notice the Defendants stated that they were appearing as ‘Authorized Representatives for the Secured Party Creditor having a security interest in the collateral belonging to the Debtor-Defendant, SHARON JEANNETTE HENNINGSEN AND TIMOTHY SHAWN DONAVAN, and also accommodation parties, hereinafter, ‘Offerees.’” according to an order issued by the judge.

    “The Offerees,” the strange pleading continued, “are in receipt of INDICTMENT a copy attached hereto and incorporated herein as if full reproduced herein as ‘Exhibit 1’ dated February 24, 2011 in Case #2:11-CR-20008, hereinafter ‘offer’, (sic) from UNITED STATES OF AMERICA via M.W. FLEMING, Assistant United States Attorney, U.S. Attorney’s Office . . ., hereinafter `Offerer’”. (sic)

    Donavan and Henningsen then apparently ventured that they’d accept appointed counsel if the appointed counsel would “hold them harmless” for anything they suffered.

    The judge denied the motion for an 80-day continuance and appointed provisional counsel.

    How the case will proceed was not immediately clear.

    Visit Leagle.com to read the full judge’s order.

  • BULLETIN: Oscar Ramiro Ortega-Hernandez, Accused White House Shooter, Formally Indicted On Charges Of Attempting To Assassinate President Obama; Case Assigned To Judge Collyer

    Oscar Ramiro Ortega-Hernandez

    BULLETIN: Oscar Ramiro Ortega-Hernandez, the Idaho man accused in November of shooting at the White House, now has been formally indicted on charges of attempting to assassinate the President of the United States.

    Ortega-Hernandez, 21, also was accused of assaulting three U.S. officers or employees with a deadly weapon.

    Whether the officers or employees were agents of the U.S. Secret Service was not immediately clear. The Nov. 11 White House shooting allegedly occurred after dark. Federal employees work at the facility around the clock.

    All in all, Ortega-Hernandez faces 17 charges in the indictment, including damaging U.S. property and firearms offenses. The FBI found “several confirmed bullet impact points on the south side of the building on or above the second story residence area,” the office of U.S. Attorney Ronald C. Machen Jr. said.

    “Several bullets and fragments also were collected in the area near the impact points,” Machen’s office said.

    The case has been assigned to U.S. District Judge Rosemary Collyer of the District of Columbia.

    Collyer, whose name has appeared on the PP Blog many times,  is the judge overseeing the AdSurfDaily Ponzi cases.

    Ortega-Hernandez potentially faces life in prison. He has been jailed since his Nov. 16 arrest in Pennsylvania.

     

  • SPECIAL REPORT: OWOW, Phil Piccolo-Associated Firm That Pumped Text Cash Network, Purportedly Cited ‘Financial Trouble’ Last Summer And Sought ‘Brand New People’ To ‘Pay Off All Of The Past Commissions And Money Owed To Suppliers’

    From YouTube: Mr. P. prowls the stage for OWOW in 2010.

    UPDATED 5:05 P.M. ET (U.S.A.) Did One World One Website Inc. (OWOW) — the Phil Piccolo-associated company that appears to have been given some of the top positions in Text Cash Network (TCN) and recruited a huge downline with the knowledge of TCN management — try to fix its own problems last year by hatching a Ponzi plan in which money sent in by new members would be used to pay commissions owed to original members?

    A bizarre OWOW promo dated July 30, 2011, on Dealslinker.com suggests so. The promo, which claimed that “O.W.O.W. Management left town a long time ago” and “gave up for many reasons,”  further claimed OWOW was implementing a restoration plan and suggested that the company was being run by “leaders.” The “leaders” were not identified.

    Incongruously, the promo claimed that “[i]t is actually not the current O.W.O.W. that is in Financial Trouble. It is the baggage from 10/10/2010 to 3/10/2011 that has brought us down. And is a Ball and Chain around the current O.W.O.W. Team.”

    “WE NEED YOUR HELP ‘OR’ THE HELP OF BRAND NEW PEOPLE…” the promo urged. “THE SOLUTION IS ‘FOUNDER OWNERSHIP’ YES… FOUNDERS…”

    With those words in July, OWOW introduced a scheme by which “FOUNDER PACKAGES” would be created in four tiers (Bronze, Silver, Gold and Platinum) and sold online to right the OWOW ship. The purported packages were priced between $500 and $5,000, and purchasers who bought in at the $5,000 level were promised they would get “20 shares in a (sic) 5% of The Sales Profit Pool from 8/8/11 to 12/12/12 of The O.W.O.W. Program…”

    The claim leads to questions about whether OWOW was offering unregistered securities as investment contracts and effectively creating an investment pool while using unregistered broker-dealers to sell the offer.

    Purchasers who bought in at the lower-priced tiers were promised a smaller number of shares, according to the promo. Members at the $500 level would get one share; members at $1,000 and $2,500 levels would get three shares and 10 shares, respectively.

    Despite the claim that OWOW’s profits would be shared among certain members through Dec. 12, 2012, the business registration in Wyoming of One World One Website Inc. is listed as “Inactive – Administratively Dissolved (Tax).”

    OWOW and at least one releated entity also appear to have lost the ability to gather money via PayPal.

    Whether OWOW sold any of the purported packages referenced in the July 2011 promo is unclear. But about three months later — during the opening days of November 2011 and while OWOW apparently was still reeling — OWOW appears to have been given a 10-day head start to sell TCN.

    Some TCN members now say that TCN has delayed commission payments to members for a fourth time and that members have been encouraged to send money via Western Union and money orders to both the company and individuals associated with the firm.

    A pulldown menu on TCN’s website says money can be sent via Western Union to three individuals: Tyler Johnson, Brett Hudson or Jane Johnson. TCN purports to have hundreds of thousands of members globally.

    Brett Hudson is listed on TCN’s website as the firm’s president. TCN purports to operate from Boca Raton, Fla. OWOW and another Piccolo-associated entity know as Data Network Affiliates (DNA) also purported to operate from Boca Raton and environs.  The Better Business Bureau issued an alert about DNA in 2010.

    Why TCN is asking members to send funds to individuals via Western Union is unclear.

    TCN purportedly is owned by “The Johnson Group,” although descriptions about that company have been vague and ambiguous.

    Here is what TCN says about itself:

    “Text Cash Network Inc is a USA Corporation and is own (sic) 100% by a five year old communication company which is another USA Corporation owned by The Johnson Group. We have not disclosed the communication’s company name or contact information in fear that THOUSANDS OF AGENTS may or should we say would call them for information prior to our official launch of 12/12/2011.”

    The date TCN advertised as its launch date — Dec. 12, 2011 — was precisely one year ahead of the date through which OWOW promised to pay tiered members who purchased shares in a pooling arrangement: Dec. 12, 2012.

    Curiously, TCN promoters associated with OWOW added an ampersand and extra proper noun to the name of TCN’s purported ownership group, describing TCN’s owners as the “Johnson & Johnson Group.”

    Whether the addition of the ampersand and extra proper noun was a bid to trade on the name of Johnson & Johnson, the New Jersey-based Dow and S&P 500 component, is unclear. TCN came out of the gate trading on the name of Groupon, but a Groupon logo that once appeared on the site has been removed.

    Returning to the subject of OWOW, money from the purported OWOW “FOUNDER PACKAGES” would be used in part to “pay off all of the past commissions and money owed to suppliers,” according to the bizarre OWOW promo, which was attributed to “Mister P.”

    “Mister P” is an alias used by Phil Piccolo. Strangely, though, the OWOW promo was positioned as a “personal letter from J.P. aka Mister P.” Why the initials “J.P.” were used is unclear.

    Other Oddities

    The July 2011 OWOW promo referenced in this post appears to be a bid to sell both OWOW and a program known as ThatFreeThing. Indeed, the headline on the promo reads, “OWOW Wholesale Direct and MyFreething – ThatFreeThing.”

    Despite the headline reference to That Free Thing, the promo does not contain a link to the That Free Thing program.

    That Free Thing uses an address in Westminster, Colo., and publishes a picture of an office building with the name of the company affixed in large letters to the side of the building.

    TCN promos have featured images of a building in Boca Raton with the company’s name affixed in large letters near the crown of the building. The Boca Raton Police Department said on Dec. 14 that TCN’s name was not affixed to the building — despite what promoters led recruits to believe.

    “Mister P,” meanwhile, also is referenced in a promo for something called “MY FREE EVERYTHING,” which appears to be operating through a domain styled “TheDebtFreeCard.com.”

    Visitors to that site are told about a “100% PASSIVE!” program through which they can earn through the sale of “$50,000 to $250,000 JVP FOUNDER LOAN PACKAGES.” Like the OWOW promo, the My Free Everything promo raises questions about whether the purported firm is selling unregistered securities as investment contracts and whether promoters are serving as unregistered broker-dealers.

    Amid confusing claims on the site, visitors are told this: “If you are within 10 Levels of This Sale you will EARN IMMEDIATE MONEY… $500 to $2500… or If you personally sell one $5000 to $25,000… However THE BIG PICTURE will be THE RESIDUAL INCOME because THE SALE was made in YOUR DOWNLINE… There are many DOCTORS and OTHER PROFESSIONALS looking for PASSIVE INCOMES… All you do is FIND THEM and The Leadership SELL THEM… ”

    Separately, promos for OWOW on LinkedIn are asking viewers to visit a YouTube site to “see [an] Oprah” video on OWOW.

    When a link in the LinkedIn promo for OWOW is clicked, however, visitors are taken to a video that has nothing to do with Oprah Winfrey, the entertainment icon and business titan whose name often is appropriated by MLM hucksters and affiliates unwise to their ways.

    Instead, the video is about a product known as PhoneGuard, an app that purportedly keeps teens and children safe by shutting off a cell phone’s texting capacity while they’re in automobiles.

    See this story about DNA, another Piccolo-associated program that used Winfrey’s name. DNA purported to have ties to Anthony Sasso, who was described as DNA’s data expert and a “special board consultant.”

    Sasso, who reportedly once had a role in PhoneGuard, is a convicted felon who was charged in a South Florida racketeering case. DNA, the Piccolo-associated entity, hyped him as “The King Of Data For Dollars” and Sasso was said to be the “owner of the largest database of text numbers in the world.”

    TCN purports to be a text-advertising company.

     

  • T2’s ‘Dave’ Suggests Police Stood ‘Idly By’ As Trouble Engulfed His ‘Program’ That Advertises Daily Return Of 2 Percent; MoneyMakerGroup Suspends T2 Naysayers After Poster Claims Mod Pitched Dozens Of ‘Programs’ Now In Scams Folder

    EDITOR’S NOTE: Our first reference to JSS Tripler 2 (T2), which is trading on the name of an obvious fraud scheme known as JSS Tripler, is here. JSS Tripler is part of a larger fraud scheme known as JustBeenPaid, which was pushed by members of the alleged AdSurfDaily Ponzi scheme and any number of Ponzi-forum scammers. ASD President Andy Bowdoin was indicted 13 months ago for wire fraud, securities fraud and selling unregistered securities. He faces a maximum term of 125 years in federal prison, if convicted on all counts of a seven-count indictment.

    We published a T2 follow-up here, and an update to the follow-up here. We also published a story on a decision last week by the U.S. Court of Appeals for the Sixth Circuit that upheld the 27-year prison sentence of Tennessee-based Ponzi schemer Dennis Bolze, whose operation recruited senior citizens and resulted in a two-level “vulnerable victim” sentencing enhancement for Bolze.

    Online Ponzi purveyors and forum fraudsters may be particularly susceptible to the vulnerable-victim enhancement. Indeed, their “programs” cast with a wide net, gain a head of steam through willful blindness and practiced, serial disingenuousness on Ponzi boards and within the purveyor and promotional ranks — and often mushroom to involve thousands of participants, thus increasing the odds they’ll recruit vulnerable members of society into their schemes  . . .

    “Dave,” the purported operator of an increasingly bizarre HYIP that advertises a daily payout rate that projects to an annualized return of 730 percent, appears now to be blaming an unidentified law-enforcement agency for standing “idly by” as trouble engulfed his “program” after a onetime business partner’s AlertPay account was frozen.

    Oddly, though, “Dave” now appears to be grateful his business partner was not arrested on “Dave’s” word, asserting that the partner “is working with us to put this situation back on track.”

    At the same time, “Dave” asserts T2 is implementing a restructuring plan amid reality-bending claims it is “NOT in a weak position” despite a “month of no withdrawals” caused by “Chris,” the onetime business partner whose AlertPay account apparently was used to gather funds for T2 and now cannot be accessed.

    T2 members have been left in the lurch for weeks.

    The T2 “program” purportedly will restart on Feb. 1 with a new “algorithm” and a new name: T2MoneyKlub. The name change, according to a T2 members’ update, will occur because the program “no longer wish[ed] to be confused with Justbeenpaid.com.”

    Claims about “algorithms” and other mathematical magic frequently accompany fraud schemes. So do name changes at mid-stream. AdSurfDaily, for example, allegedly changed its name to ASD Cash Generator after a Ponzi collapse and did not inform incoming members that their funds were being used to pay back investors scammed when the original iteration collapsed.

    Ponzi collapses can be brought on by theft, account closures or seizures by banks and payment processors or by actions by law-enforcement to freeze accounts to stop a scheme from mushrooming. Details surrounding AlertPay’s apparent decision to freeze the account of “Chris” are unclear.

    “Dave’s” move to change the program’s name is in stark contrast to earlier, mind-bending claims that trading on the name of JustBeenPaid’s JSS Tripler arm somehow was appropriate. The T2MoneyKlub domain was registered Jan. 12 — as T2 members were publicly fretting about not getting paid.  The new domain is being powered by servers that use JSS Tripler 2’s name, according to records.

    Existing T2 Members May Face New Risk

    Even now, according to “Dave’s” members’ update, the program is taking advantage of an “SEO” strategy to expand its audience. If true, the program could be expanding its own risk of attracting vulnerable investors.

    “We will be setting up a quantity of forums and blogs, and each one will need to receive page views from the members, also there will be blog commenting tasks and forum posting tasks,” “Dave” asserts.

    “This is to build up a high alexa rank with a massive amount of original content and high pageview count which sets a great foundation for SEO and advertising revenue etc,” he continues in the members’ update. “We will give attention to each website for approx one month for forums and 2 weeks per blog.”

    Separately posting on the MoneyMakerGroup Ponzi forum as “Peakr8,” “Dave” painted himself a man of considerable business experience who’d been condemned unduly by the media and left twisting in the wind by an unidentified “police” agency.

    ‘Police Standing Idly By’

    “Yes we have had a few problems both technical and the [AlertPay] problem,” “Dave” conceded as “Peakr8” in a post yesterday on MoneyMakerGroup. “[T]his is not unlike any business offline or online, apart from it’s like trying to run your business with a mob walking up and down outside your business premises waving banners screaming ‘scam, scam, scam’ and also the newspapers saying you are a liar and a cheat with absolutely no evidence to back up their claims… when you have done nothing wrong and the police standing idly by saying that they are allowed to do it.”

    “Dave” has not identified the police agency to which he allegedly complained about “Chris” and apparently now is complaining about. He earlier asserted that his complaint would result in the arrest of “Chris.”

    “Dave’s” public complaint on MoneyMakerGroup followed on the heels of his apparent decision to block the public from the T2 forum and a separate claim by “Dave” that he would “viciously” oppose a T2 member who declared the program a “SCAM,” encouraged fellow members to file an AlertPay dispute and said he’d try to get his money back from SolidTrustPay, another payment processor used by T2.

    Whether the member “Dave” claimed he’d oppose “viciously” for trying to get back his money and complaining about the program planned to file a consumer complaint with any of the world’s law-enforcement agencies is unclear.

    What is clear is that it is common for fraud purveyors and their forum shills to discourage members from filing payment disputes amid claims that such complaints harm a “program” and its members.

    MoneyMakerGroup Doles Out Suspensions To Naysayers

    Separately, MoneyMakerGroup announced it had suspended some members who’d raised questions about T2. Those suspensions were attributed to “mmgcjm,” a “Global Moderator.”

    “Dave,” who purports to be posting from Thailand after jetting from England several days ago while T2 members were clamoring for their cash, appears to have approved of the suspensions.

    “Isn’t it nice here[?],” he crowed. “Should have been done months ago and they also ought to get a life ban for their dreadful behaviour.”

    T2 sells “dream positions” and “dream matrices” amid claims that even “passive” members can earn returns of 2 percent a day over the course of 75 days. The “program” has asserted it has “multiple income streams,” and “Dave” has preemptively denied T2 was operating a cross-border Ponzi scheme. T2 says its has 8,838 members, a claim that leads to troubling questions about whether vulnerable victims were reeled in by T2’s wide net on the web.

    “Chris,” a onetime business partner of “Dave,” is responsible for the “program’s” troubles, according to “Dave,” who earlier asserted that “Chris” would be arrested.

    If a police investigation actually ensues, it almost certainly would lead to questions about the extent of T2’s purported income streams, whether those purported ventures were profitable enough to sustain themselves — let alone T2’s (precompunding) annualized return of 730 percent on top of referral commissions — and whether Dave’s public pleas for members not to file AlertPay disputes were designed to keep a Ponzi scheme intact.

    Another possible area of inquiry is whether “Dave” — who appears to have closed the T2 forum to public viewing even as he suggests on MoneyMakerGroup that people who file disputes with SolidTrustPay will be opposed “viciously” — is trying to chill his own members.

    The MoneyMakerGroup suspensions of T2 doubters attributed to “mmgcjm” appear to involve at least three members and were carried out after a poster asserted that “[a]lmost 3 dozen opportunities” that mmgcjm “promoted as being “good”, “Great”, “Fantastic” and so on in 2011″ are now in the SCAM/CLOSED folder.”

    “mmgcjm” justified the suspensions by asserting that, under the guidelines of the MoneyMakerGroup forum, “programs” in the folder were not necessarily scams.

    As an advertisment on the right side of the T2 thread at MoneyMakerGroup lured readers with a suggestion that another program known as “Moon Fund” paid 8,850 percent “After 24 Hours,” “mmgcjm” claimed that the T2 critic was posting “false information.”

    The suspensions followed a short time later, with a prompt from “mmgcjm” for the T2 naysayers to “Enjoy your vacations!”

     

  • BULLETIN: 6-Time Felon Sentenced To 12 Years In Ponzi Scheme; Anthony Ray Will Serve ‘Every Day Of His . . . Sentence,’ Georgia Prosecutors Say

    BULLETIN: A six-time felon who hatched a real-estate Ponzi scheme and swindled a dozen investors out of $660,000 has been sentenced to 12 years in a Georgia state prison, the office of DeKalb County District Attorney Robert James said.

    Anthony Ray ripped off his own flesh and blood and met some of his victims at Pine Grove Baptist Church, prosecutors said.

    “He had a total disregard for others to the degree he even stole from his own father,” said James. “I hope this case serves as a warning for residents to do a thorough background check on any investments that may sound too good to be true. They often are just that.”

    Judge Gregory Adams also ordered Ray placed on probation for eight years after his prison release, prosecutors said, noting that Ray “will be required to serve every day of his twelve-year sentence.”

    Ray was prosecuted on racketeering charges and pleaded guilty.