Keith Epstein, 56, told senior citizens they could trust him with their money. Some of his investors believed him — and they liquidated legitimate holdings and gave the cash to Epstein.
But Epstein, of Farmington Hills, Mich., was running a $4 million Ponzi scheme, the FBI said.
He took the cash from his victims, spending it on gambling and to support “multiple exotic dancers,” investigators said.
Some investors received Ponzi payments, investigators said. Epstein plied his marks in part by visiting their homes, participating in their family functions and by putting “money toward[] charitable causes important to clients,” the FBI said.
Epstein, who’d been held in the Macomb County lockup for violating state laws and writing a bad check, now is on his way to an unspecified federal prison. He was sentenced yesterday by U.S. District Judge Nancy G. Edmunds to 97 months for the Ponzi scheme.
“We hope to send a message to investment advisors that we will aggressively prosecute those who steal from the elderly and other small investors,” U.S. Attorney Barbara McQuade of the Eastern District of Michigan said.
“Many of his victims’ retirement funds have been completely eviscerated, leaving them with nothing after lifetimes of saving and hard work,” the FBI said.
Edmunds ordered Epstein to make resitution of $4.1 million to victims.
Last month, it was famed actor Will Smith. This month, it is Mahatma Gandhi, the civil-rights champion and beacon of freedom in India who was assassinated at a prayer meeting in 1948.
Although the promo features no image of Gandhi, it does include a quote attributed to him: “Be the change you want to see in the world.”
The promo misspells the slain leader’s last name, and a “JOIN OUR MISSION” button appears directly below the quotation, which appears on Page 37 of the October house organ.
Club Asteria became a darling of the Ponzi boards earlier this year before slashing payouts and later eliminating them. Promos for the firm were banned in Italy, and Club Asteria acknowledged its PayPal account had been suspended.
A spread on Pages 26 and 27 of the October Club Asteria house organ features a photo of famed entrepreneur Richard Branson posing with a group of mostly younger people. An accompanying story asserts that a group of Club Asteria members conversed with Branson at an entrepreneurial event in Richmond, Va., “a few weeks ago.”
“Both Richard Branson and Club Asteria share a common link and that link is GRATITUDE,” the story claimed.
The story appears to have been written by a Club Asteria staffer. A “JOIN NOW” button appears on Page 27, though not directly below the image of Branson.
Ponzi forum boosters such as “Ken Russo” repeatedly sang the praises of Club Asteria.
In 2008, a “program” with the bizarre name of Cash Tanker used images of Jesus Christ in sales pitches. Cash Tanker ultimately tanked.
Many of the “programs” on the Ponzi boards — Club Asteria, Just Been Paid and AdSurfDaily, for instance — have or had promoters and members in common. Promo posts for Cash Tanker appeared on the now-defunct, pro-ASD “Surf’s Up” forum, and Club Asteria executive Hank Needham has been linked to promo for ASD.
The October 2011 Club Asteria house organ, which includes the Gandhi quote and attached sign-up button and the image of Branson with a sign-up button on the same page, also features a photo of Needham. A button below the Needham photo reads, “ABOUT COURAGE.”
Screen shot: Pitchmen now are trading on the name of Oprah Winfrey to hawk JustBeenPaid. The name and likeness of Warren Buffett also have been used in JustBeenPaid pitches, and Ponzi forum chatter also includes the name of Charlie Sheen.
UPDATE: In addition to trading on the name of Warren Buffett, the JustBeenPaid “program” is trading on the name of entertainment icon and business titan Oprah Winfrey.
Actor Charlie Sheen’s name also has been referenced in Ponzi forum chatter about JustBeenPaid, an “opportunity” whose braintrust once recruited members for Florida-based AdSurfDaily. ASD, according to the U.S. Secret Service, was operating a $110 million Ponzi scheme.
YouTube recently has been deleting JustBeenPaid promos.
JustBeenPaid became a darling of the Ponzi scheme boards earlier this year. The Winfrey development occurs against the backdrop on a September incident in which Club Asteria — another Ponzi board darling — published a likeness of actor Will Smith in a promo.
Club Asteria later removed the image, which featured Smith’s likeness over a “JOIN NOW” button. It is common for schemes to plant the seed that a famous person or entity endorses a “program” — even when no such endorsement exists.
Winfrey’s name and likeness repeatedly have been used by scammers to sanitize their fraud schemes, leading to litigation filed by Winfrey herself, the Federal Trade Commission and the attorney general of Illinois.
“Click on the Oprah banner below,” a prompt for a current JustBeenPaid promo urges. A likeness of Winfrey appears below the prompt, which creates the appearance that she has endorsed the “program.”
“The Profit Program for the Most Special Moneymakers!” the promo exclaims.
When the image is clicked, a page for a JustBeenPaid affiliate loads.
An appeal for visitors to join “OneX” appears on the same page that abuses Winfrey’s name and likeness. OneX and Club Asteria, which trades on the name of the World Bank, were among the “programs” pitched on the Ponzi boards by “manolo” earlier this year.
In April, “manolo” used the name of JPMorgan Chase when pitching a “program” known as ThatFreeThing.
In 2010, the DataNetworkAffiliates “program” linked to Phil Piccolo traded on the name of and likeness of Winfrey. Piccolo has been called the “one-man Internet crime wave.”
The continuing outage of a fundraising site for accused Ponzi schemer Andy Bowdoin of Florida-based AdSurfDaily now has exceeded 80 hours — more than three full days. The site first was reported to be offline Thursday at 11:09 p.m. EDT.
What caused the outage and why the site remains offline are unclear. Bowdoin, 76, had been using the site in a bid to gather $500,000 to pay for his criminal defense on charges of wire fraud, securities fraud and selling unregistered securities.
A post dated today and signed “Andy” on a companion Facebook site says this:
“Hello ASD Members! Just a quick positive note. Our Website has been down for a few days due to some tech issues with our server, but it will be back up shortly. A “Good News Update” email will be sent with some very exciting news for all of you in the next couple of days. Andy”
Bowdoin’s fundraising campaign had lasted more than two months prior to the disappearance of the site, but had fallen 95 percent of the mark, according to the most recent claims.
Lynn Edgington, the founder of Eagle Research Associates Inc. and a regular contributor to the PP Blog, is quoted in an article in tomorrow’s St. Louis Post-Dispatch.
An online version of the article by reporter Stephen Deere is available here.
Eagle, a nonprofit that battles online fraud schemes, is based in Mission Viejo, Calif.
A website through which accused Ponzi schemer Andy Bowdoin of Florida-based AdSurfDaily hoped to raise $500,000 to pay for his criminal defense has been offline for at least 11 hours. The reason why is unclear.
The site — known as Andy’s Fundraising Army — launched on July 26 after weeks of prelaunch hype and after having missed at least two advertised launch dates. The site’s URL now resolves to a page that beams advertisements.
Bowdoin’s used the website and emails to paint himself the Christian commander of an “Army” that was “fighting mad.” The site used images of David and Goliath and accused the government of “wrong doing” and “suppression.”
In 2008, Bowdoin referred to the Secret Service and federal prosecutors as “Satan,” and compared the seizure of tens of millions of dollars from his 10 bank accounts to the 9/11 terrorists attacks. In a video released July 26, he claimed he was “crucified” and “heavily ridiculed” by two U.S. Attorneys and three Secret Service agents.
Bowdoin’s PR strategy of demonizing the government for seizing the money in August 2008 appears to have backfired. As of last week — after more than two months of fundraising — Bowdoin reportedly was 95 percent short of his $500,000 goal.
Three weeks ago, the government returned $55 million seized in the case to members.
Screen shot: Neither of these two YouTube videos for JustBeenPaid will load on a site associated with the purported "opportunity" — but a repurposed video featuring billionaire investor Warren Buffett will. It is common in fraud schemes for scammers to trade on the names of celebrities and to suggest a famous person endorses a "program."
There are the deliberate shills for JustBeenPaid — serial Ponzi board hucksters such as “10BucksUp,” for example.
And there are the unwitting shills whose celebrity is stolen without their knowledge to sanitize the over-the-top fraud that promotes absurd returns — people such as famed investor Warren Buffett. Buffett’s only tie to JustBeenPaid is that he lives and breathes on the same planet occupied by the collective of international scammers behind the purported “opportunity.”
A YouTube video in which Buffett is giving a speech to a group of Florida MBA students is shoehorned into a JustBeenPaid promo at BigBooster.com. As Buffett arrives at the podium, he makes sure the microphone is working.
“Testing,” he quips. “One million, two million, three million.”
The audience appreciates the line.
Buffett’s repurposed appearance sandwiched into the JustBeenPaid promo at BigBooster.com is one filled with irony that is the very definition of bizarre. As this post is being written, it is the only video on the page that works. Two in-house videos for JustBeenPaid do not work and carry these messages:
“This video is no longer available because the YouTube account associated with this video has been terminated.”
“This video has been removed because its content violated YouTube’s Terms of Service.”
This YouTube video of famed investor Warren Buffett is playing in a promo for JustBeenPaid on a website known as BigBooster.com.
But the repurposed video of Buffett is every bit as dangerous as it is bizarre: It is being used to help the JustBeenPaid Ponzi scheme proliferate globally. And the people behind JustBeenPaid once promoted AdSurfDaily before the U.S. Secret Service exposed the ASD Ponzi scheme in August 2008. (See graphic near bottom of story.)
To its credit, YouTube has been removing JustBeenPaid videos at least for several days. But even as YouTube does the right thing by taking the videos offline in the age of epidemic white-collar crime and global money-laundering and Ponzi theft, the video of Buffett still plays on the BigBooster site. The likely reason is that there is no easy way for YouTube to associate Buffett’s 13-year-old speech at the University of Florida to a relatively recent BigBooster.com ad for JustBeenPaid, a “program” of recent vintage.
Research by the PP Blog suggests Buffett delivered the speech on Oct. 15, 1998 — when Saddam Hussein still was presiding over Iraq and George W. Bush still was governor of Texas before being elected President of the United States more than two years later. A decade passed — as did the 9/11 terrorist attacks, Bush’s eight-year occupancy of the White House and the fall of Saddam Hussein — before the people behind JustBeenPaid apparently had the brainstorm of shoehorning the Buffett video into the BigBooster promo to help them sell a scam.
YouTube’s removal of the JustBeenPaid videos poses only a minor hurdle, according to an email attributed to JustBeenPaid honcho Frederick Mann, who’s also the apparent braintrust behind BigBooster.com and a former ASD member.
“We’ve started moving our videos to our own server,” the JustBeenPaid email attributed to Mann read in part.
BigBooster.com appears to be hosted in South Africa; JustBeenPaid.com appears to be hosted in the United States. Both domains use a street addresses in South Africa that lists Mann as the administrative contact.
Here is some of the advice attributed to Mann in the BigBooster.com promo associated with JustBeenPaid and related “programs.” (Italics added.)
Get in early.
Get in with “significant” money
If the program performs well, do some early compounding.
Sponsor as many people as possible to earn referral fees.
Withdraw your original risk capital as soon as appropriate to get into a “can’t-lose” position.
Parlay, compound, or let run some of your profits.
Think in terms of maximizing the money you “take off the table.”
Much of the power of this formula is that it enables you to make money with programs that fail after a few months, but if a reasonably good program lasts 6 months or longer, you could earn tens of thousands.
The message could not be more at odds with the principles for which Buffett stands, and yet Mann and JustBeenPaid incongruously sandwich him into the promo after previously leading ASD recruits to disaster.
And even as JustBeenPaid tells members it is saying goodbye to Google’s YouTube, is is encouraging members to register for the “program” by using a Google Gmail addresses.
“Gmail E-mail addresses work well with JustBeenPaid! – and they are free!” the firm informs prospects on its sign-up page.
But it gets stranger yet: Payouts from JustBeenPaid come from an email address assigned to “michael” on the BigBooster.com domain, according to “I got paid” posts by shills on the Ponzi forums such as MoneyMakerGroup.
Not “JustBeenPaid” or “Frederick” — but “michael.”
And the cheerleaders and shills cheer on, even as a condition has developed in which the program is trying to rescue itself from collapse, offshore servers apparently are being brought into play — and the money is being routed from AlertPay in Canada to a murky business with footprints in both the United States and South Africa and the “opportunity” just happens to be trading on the name of Warren Buffett after previously pushing traffic to ASD.
This is happening through a process by which a 13-year-old speech by the billionaire has been repurposed and made to load on the BigBooster site via YouTube — even as JustBeenBeen can’t get its own YouTube videos to load and even as it apparently is saying goodbye to YouTube while encouraging people to use Google Gmail addresses to sign up so they purportedly can get paid by “michael” at BigBooster.com for JustBeenPaid.
Like JustBeenPaid, ASD had a tie to AlertPay. And ASD and a spinoff surf known as AdViewGlobal also used Gmail addresses and relied on videos to spread the scheme.
On May 14, 2008, according to research by the PP Blog, ASD was touted on BigBooster.com as a “cash cow.” Less than three months later, the U.S. Secret Service alleged that ASD was an international Ponzi scheme that had sucked in tens of millions of dollars, routed money through Canada and was contemplating ways to get offshore.
“I (Frederick Mann) have been with ASD since January 07,” remarks attributed to Mann on the BigBooster site read. “Past performance indicates a strong probablility (sic) that ASD will continue to perform as advertised. (By early May 2008, I had received 14 payments totalling over $6,000!”)
On May 14, 2008, BigBooster.com was touting AdSurfDaily.
Screen shot: Even as JustBeenPaid concedes YouTube is removing its videos, the "opportunity" is encouraging prospects to register by using a free Gmail addresss. Google owns both YouTube and Gmail. Payments for JustBeenPaid are being routed through Canada-based AlertPay by a person apparently known as "michael" of BigBooster.com. Both BigBooster.com and JustBeenPaid.com use street addresses in South Africa, and the linked companies appear also to have a presence in the United States. (Red rectangle around Gmail's name and red block of sponsor's name added by PP Blog.)
Jerry L. Aubrey: Source: 2010 booking photo at Volusia County Jail in Florida.
Jerry L. Aubrey first came on the SEC’s radar screens in 1998, when he was hawking “securities in a fictitious cruise ship,” records show.
By 2007, he’d been charged criminally in Florida with securities fraud for selling shares of a bogus “body scan imaging business” between December 2000 and October 2003. He was convicted of those charges last year and ordered to spend five years in state prison and pay $5.7 million in restitution.
But even as Aubrey was sitting in prison, investigators were putting together another fraud case — this one involving a purported oil-and-gas venture in West Virginia that Aubrey hawked from California before he was jailed in Florida.
Aubrey now has been charged civilly in that case, and the SEC said the business — Progressive Energy Partners LLC (PEP) — was an $11 million Ponzi scheme operated through a boiler room with 196 phone lines.
The scammer and his brother, Tim Aubrey, peeled off millions from the PEP Ponzi, the SEC charged.
“Jerry and Tim Aubrey misappropriated more than $3.2 million of investor funds for their personal use,” the SEC charged. “Jerry Aubrey withdrew about $500,000 directly from PEP’s bank accounts to pay for personal expenses, and he distributed another $2.7 million in cash and checks to himself, Tim Aubrey, their mother, and their company, Allied Marketing Consultants. A portion of the $2.7 million in cash and checks were alleged salary and sales commissions paid to Jerry and Tim Aubrey, even though PEP’s legitimate business activities were virtually nonexistent.”
How did the money get spent?
On “all kinds of things,” the SEC charged — things such as “limo rides . . . to [Staples Center] for Lakers game[s] . . . Vegas . . . strip clubs and just being a high roller.”
But that wasn’t all, according to the SEC:
The rent alone on the “Aubrey family’s lavish house” in California consumed as much as $7,100 a month, the SEC charged, alleging that the three-story, 4,000-square-foot home was “equipped with large screen televisions, a pool table, giant fish aquariums with exotic fish, a hot tub, a pool, and a tennis court.”
Among the exotic fish were “miniature sharks,” according to the SEC.
More investor money was used to pay “for the defense of Jerry Aubrey’s criminal securities fraud case in Florida,” the SEC charged. Meanwhile, there were “family vacations, which included two trips to Maui, Hawaii,” and other trips for associates to “Las Vegas, Palm Springs and Big Bear.”
Jerry Aubrey also bought a “Lexus car and jewelry” for his girlfriend. Other money was directed at the purchase of “[t]rucks, cars, and Harley Davidson motorcycles, the SEC charged.
Two PEP pitchmen — Brian S. Cherry and Aaron M. Glassser — also were charged civilly alongside the Aubrey brothers.
Jerry Aubrey now is listed as an inmate at the Tomoka Correctional Institution, a state prison in Daytona Beach.
EDITOR’S NOTE: In the past 24 hours, the SEC has filed charges against two firms purportedly in the business of preventing terrorism. Read the PP Blog’s story about the first firm here.
The cavalcade of senior citizens implicated in securities schemes continues — as does the story about the bizarre nature of recent fraud cases in the white-collar arena.
Robert Goldstein, 73, of New York City, has been accused in federal court by the SEC of orchestrating a $1 million offering fraud for Murdoch Security & Investigations Inc. (MSI), a firm that allegedly placed ads in the Wall Street Journal last year promising “repayment of principal plus 22 percent interest per year.”
MSI also placed ads in Barron’s and Investor’s Business Daily for its securities, which were unregistered, the SEC said.
Goldstein was MSI’s senior vice president. His 53-year-old boss — Connecticut-based MSI CEO William C. Vassell — also has been accused by the SEC of orchestrating the alleged offering fraud.
But advertising in prominent publications to drive business to the firm was only part of the scam, the SEC said. Lying to customers who responded to the ads also drove the fraud, the agency alleged.
Described by the SEC as MSI’s “primary salesperson,” Goldstein “provided investors with a wide array of false and otherwise misleading information in an effort to sell the 22% Notes,” the agency said.
The falsities included “statements about the Company’s revenues, existing assets and overseas operations,” the SEC alleged.
Investors were told tales of fabulous success in Mexico, fantastic revenues for 2010 and the company’s “explosive” growth potential. And, according to the SEC, Goldstein spun a yarn that MSI’s “anti-piracy” and “anti-terror” business was “probably one of the largest … on the high seas” in 2011 and “that such business, including in Somalia and Yemen, was expected to yield $100 million to $300 million in revenue for MSI in subsequent years.”
In reality, the SEC said, “MSI’s internal documents reflect revenues that did not approach the numbers conveyed to potential investors; its total assets according to those documents were approximately $4 million, and it had no overseas operations whatsoever, let alone significant revenues from Mexico or a major presence “on the high seas.”
“The plan Goldstein outlined for investors, in explaining how MSI could afford to offer such high yields on the 22% Notes, focused on what Goldstein described as MSI’s expectation to purchase six or seven security companies to fuel increased revenues,” the agency continued.
“Contrary to this supposed plan, MSI not only failed to purchase any security companies with the money obtained from investors in the Notes; nearly all of the money raised from those investors was spent to fund Goldstein’s and Vassell’s salaries, fund the payments on the Notes themselves, and pay for various other of MSI’ s ongoing claimed expenses,” the agency alleged.
BULLETIN: The SEC has gone to federal court in Illinois to charge InfrAegis Inc. and CEO Gregory E. Webb with fraud amid allegations they fleeced investors in a $20 million scam that traded on post-9/11 fears and claims that government security contracts worth more than $1 trillion would make everybody rich.
Webb, 64, resides in the Chicago suburb of Arlington Heights, Ill. The firm is based in the suburb of Elk Grove Village and purportedly was in the “homeland security” business, according to the SEC.
But InfrAegis duped investors by falsely claiming to have lucrative contracts with the cities of Chicago and Washington. D.C., for kiosks that purportedly could detect the presence of nuclear or biological weapons.
Investors were told the Chicago contract would fetch “profits of well over $80 million.” Meanwhile, the Washington contract — purportedly with the Washington Metropolitan Transit Authority (WMATA) — would be worth the staggering sum of $20 billion over 20 years.
Moreover, the SEC charged, Webb and the firm told investors that “InfrAegis sold a partial stake in the company for $8.7 billion in cash to a company named the DW Group and that the transaction would result in 3800% to 4000% returns to investors.”
“InfrAegis never sold, and never had any agreements to sell, any of its products to the City of Chicago,” the SEC charged.
“Similarly, InfrAegis never sold, and never closed on a contract to sell, any of its products to WMATA,” the agency charged. “Finally, InfrAegis never received any money from the DW Group and Webb had no reasonable basis to believe that such a transaction would ever take place.”
In addition to lying about the success of the firm even as investors were the only source of the company’s income since January 2005, Webb also lied about receiving no compensation from InfrAegis, the SEC charged.
“Despite the fact that InfrAegis never sold a single product, and that InfrAegis’ offering materials claimed that he did not receive compensation from the company, Webb directed InfrAegis to pay him at least $741,000 using investor funds over the course of the offering,” the SEC charged. “In addition to his investor-funded ‘salary,’ from April 2005 through June 2010, Webb used an InfrAegis corporate credit card, again funded by InfrAegis investors, to purchase at least $70,000 in goods and services for himself, including vacations, clothing, fast food, groceries, tobacco, liquor, movies, video games, and music.”
The scheme raised $20 million from 395 investors in 29 states and the District of Columbia, the SEC charged.
Webb and the firm traded on the emotions of investors to pick their pockets, the SEC charged.
“Some of InfrAegis’ offering materials even included photos of the World Trade Center shortly after the 9/11 attacks with smoke billowing from the towers” the SEC said. “Certain InfrAegis offering materials also claimed that InfrAegis’ products could have prevented major terrorist attacks in London, England and Mumbai, India.”
Even sports and American pride in seeking to host the Olympic games were part of the fraud pitch, the SEC charged.
When the city of Chicago was bidding to host the 2016 Summer Olympics, “Webb told investors that InfrAegis had received the endorsement of the 2016 Olympic Committee,” the SEC charged.
“Webb further stated that the DW Group was in the process of completing a transaction with the United States government and certain foreign governments that exceeded $1 trillion and that, once the transaction was completed, InfrAegis would begin receiving multiple, multi-billion dollar payments from the DW Group,” the SEC charged. “Webb additionally told investors that once the DW Group transaction was completed, InfrAegis would pay its shareholders — who typically invested at $1.00 per share — between $39 and $41 per share.”
YouTube is removing videos for JustBeenPaid, a “program’ linked to Frederick Mann and popularized by scammers on Ponzi boards such as TalkGold and MoneyMakerGroup.
JustBeenPaid promos feature claims of remarkable returns.
The removed videos carry messages such as “This video has been removed as a violation of YouTube’s policy against spam, scams, and commercially deceptive content” and “This video is no longer available because the YouTube account associated with this video has been terminated.” Some JustBeenPaid videos remain on the popular video site. It was unclear if YouTube plans to remove all of them.
JustBeenPaid appears to feed itself through a “program” called JSS Tripler and also appears to be tied to something called Synergy Surf. The program, which is foundering, became a Ponzi darling in the days after Club Asteria slashed payouts and then suspended them altogether earlier this year.
Ponzi forum posts identity Mann as the JustBeenPaid braintrust.
There is a claim today on the MoneyMakerGroup Ponzi cesspit that JustBeenPaid members were provided the likenesses of celebrities to promote the “program.”
Just last month, an image of actor Will Smith was featured in a Club Asteria promo. The image was removed after the PP Blog contacted Smith’s publicist. It is common for fraud schemes to trade on the names of celebrities and to plant the seed that celebrities endorse a specific program when no such endorsement exists.
One apparent Just Been Paid fan on MoneyMaker Group suggested his control over hundreds of YouTube accounts would enable him to circumvent any ban YouTube enacts against Just Been Paid.
“No sweat, I own over 500 Youtube accounts, so I’ll just keep making videos like normal, plus I can always use Viddler and Windows movie maker and facebook video as well,” MoneyMakerGroup poster “gtprosperity” claimed.
Keith Epstein, 56, told senior citizens they could trust him with their money. Some of his investors believed him — and they liquidated legitimate holdings and gave the cash to Epstein.
