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  • Two Attorneys, Including One Who Is A Church Bishop, Accused In $52 Million Ponzi Scheme With Alleged Pipeline From Missouri To England

    BULLETIN: UPDATED 3:20 P.M. EDT (U.S.A.) Three men have been indicted in Missouri in an alleged Ponzi conspiracy prosecutors said created an illicit pipeline that sucked millions of dollars from investors and put it in the hands of fraudsters in the United States and Britain.

    Some of the investors were lured into the scheme because one of its perpetrators was a symbol of faith and a fixture in social circles. Still other investors lacked expertise on financial matters and were vulnerable in other ways, prosecutors said.

    Charged were Martin T. Sigillito, 62, of Webster Groves, Mo.; James Scott Brown, 66, of Leawood, Kan.; and Derek J. Smith, 67, of Oxfordshire.

    Sigillito is an attorney, ordained priest and bishop in the church of the American Anglican Convocation, prosecutors said. Brown also is an attorney.

    Smith is a real-estate speculator and hotelier in Britain. He ultimately became the sole borrowing client of an enterprise known as the “British Lending Program” (BLP) after acquiring distressed hotel properties which were not profitable due to a recession in the English real estate market.

    “By the end of the 1990s, Smith was in need of capital to maintain his ownership of several small hotels which were not trading profitably and to support his retention of several options to purchase land,” prosecutors said.

    “The federal indictment alleges that conspirators stole more than $52 million through a Ponzi scheme that lasted nearly a decade,” said U.S. Attorney Beth Phillips of the Western District of Missouri.

    From 2000 to 2010, investors in the United States loaned a total of $52.5 million to Smith for what they believed was operating capital, prosecutors said.

    In reality, prosecutors said, “most of their money was kept by Sigillito and Brown” or used to pay interest and principal to other lenders.

    Sigillito gained nearly $8 million from the fraud scheme and used it to support an affluent lifestyle, prosecutors said.

    The Ponzi caper, which the FBI described as “the largest in the history of the Eastern District of Missouri” because of the dollar volume of stolen money, traded in part on Sigillito’s social skills and the world-renowned name of Oxford University, prosecutors said.

    Sigillito “claimed he was a lecturer at Oxford University in England, based upon his participation in an annual summer program of continuing legal education at Oxford through the University of Missouri – Kansas City,” prosecutors said.

    And Sigillito interacted with well-to-do Missouri residents as part of the scam, becoming a member of  “exclusive, private clubs in St. Louis,” including The Racquet Club and the Boone Valley Golf Club, prosecutors said.

    Over time, the attorney/bishop acquired “rare and antique books, maps, prints, coins, jewelry, artifacts, liquor and rugs,” prosecutors said.

    “He routinely traveled first class, including internationally, took his family on expensive vacations, purchased a country home in Marthasville, Mo., employed a chauffeur, sent his children to private schools, purchased and leased Volvo automobiles and invested in a condominium project at the Lake of the Ozarks in Missouri,” prosecutors said.

    Luxury was a change for Sigillito, who was divorced and had declared bankruptcy prior to being introduced to the BLP scheme by Brown in 2000, prosecutors said.

    Like Sigillito, Brown did not have an active law practice and turned to BLP to make a nice living, prosecutors said.

    For his part, “Smith received the benefit of a total of approximately $6.1 million during the time in which approximately $52.5 million in loan funds were received in the BLP,” prosecutors said. “In contrast, during the same period, Sigillito took ‘fees’ totaling approximately $7.8 million, Brown took ‘fees’ totaling approximately $1.4 million and approximately $27 million was used to pay interest and principal to lenders. All BLP funds were dissipated and as of June 2010, the BLP had no funds.”

  • FLORIDA — AGAIN: Parolee, Larcenist And Recidivist Huckster Charged In New Fraud Caper; Allen E. Weintraub Made Bogus Takeover Bids For Kodak And AMR — And Caused AMR’s Trading Volume To Mushroom Sixfold, SEC Says

    Allen E. Weintraub of Aventura, Fla.

    Is it the oddest fraud story coming out of Florida to date?

    A man who emailed Eastman Kodak and AMR in March with offers to purchase the famous companies for billions of dollars had declared bankruptcy in 2007, was on probation for grand theft when the offers were made and extended the offers through a shell company the state of Florida dissolved last year for not filing its first annual report, the SEC said.

    On March 19, a Saturday, Allen E. Weintraub emailed  Kodak with a “tender offer” to purchase the firm for $1.3 billion in an all-cash deal through Sterling Global Holdings, his dissolved shell company. Ten days later, with his purported Kodak deal percolating, Weintraub emailed AMR, the parent company of American Airlines, and offered to plunk down about $3.25 billion in cash to acquire the company, the SEC said.

    Sterling Global “conducts no business and has no assets,” the SEC said. Regardless, Weintraub allegedly offered a premium nearly 50 percent above the prices of each of the firms’ stock.

    In a securities-fraud complaint that reads like an impossible work of fiction, the SEC alleged that Weintraub had been convicted three times in criminal fraud and grand larceny cases between 1992 and 2008. In 2003, he was ordered by a federal judge not to act as an officer and director of a public company after the SEC accused him of breaking securities laws, not disclosing his criminal past in filings and “dumping” shares. The agency obtained a judgment of $1.050 million against Weintraub in the case, which was filed in 2002.

    Weintraub was arrested for selling bogus hurricane insurance in Florida in 2005, according to records.

    Weintraub had paid only $220 on the SEC judgment, according to records. He was on probation for 10 years at the time the Kodak and AMR offers were made, the SEC said.

    Although Weintraub claimed to have financial backing to take over the companies, the SEC said its investigation revealed that he made visits to at least three “branch offices” of large commercial banks in his neighborhood, but emerged with no money.

    Why Weintraub allegedly discussed financing for major corporate takeovers through branch offices that cater to commuters instead of dealing directly with investment-banking units was unclear. Also unclear is why Weintraub claimed to have secured financing when no lenders signed onto a deal with Weintraub, a recent bankrupt who had an unpaid judgment of more than $1 million from the SEC case and also had been the subject of a 2006 foreclosure action in Florida involving a $1 million promissory note on a property at Golden Beach in Miami-Dade County.

    What is clear is that Weintraub created a sideshow involving both firms by embarking on a media campaign after announcing his takeover bids, according to the SEC.

    “In an effort to generate publicity, Weintraub emailed the purported tender offers to media outlets and financial investment research firms,” the SEC said. “In published media interviews, Weintraub boasted that he has 15 years[‘] experience buying distressed companies, that banks had agreed to finance the acquisitions, and that letters of credit could be readily provided.”

    And Weintraub pumped up the offers by creating the appearance that he was at the helm of a global enterprise, rather than a dissolved Florida company formed in October 2009 that did not even file its first required annual report the following year.

    Indeed, the SEC said, Sterling’s Global’s “letterhead listed the cities Atlanta, Cleveland, Denver, Dubai, London, Los Angeles, Miami, New York, and Tel Aviv, creating a false impression that Sterling Global had offices in each of those cities.”

    The address used in the tender offers was a “nothing more than a mail drop” in Davie, Fla., the SEC said.

    As news about the AMR offer appeared, the trading volume of the stock jumped more than sixfold, the SEC said.

    “The trading volume in AMR’s stock rose from approximately 5 million shares on March 29 to approximately 31.5 million shares on March 30,” the SEC said. “The lack of any other AMR or airline industry news indicates that the March 30 price and volume movement were affected by the media coverage of Sterling Global’s AMR tender offer that occurred in the late afternoon of March 29.”

    Weintraub has been charged with securities fraud and violations of the tender offer rule.

    “Neither Weintraub nor Sterling Global has the means to purchase either Kodak or AMR by tender offer or otherwise as they have no substantial assets or resources,” the SEC said.

    Read the SEC complaint.

     

  • CFTC: Michigan Man Sucked Church Members Into Forex Ponzi Scheme; Jeffery L. Groendyke Sued For Fraud

    A Michigan man has been sued for fraud and misappropriation in yet-another alleged Forex Ponzi scheme, the CFTC said.

    Jeffery L. Groendyke of the Grand Rapids-area community of Middleville, Mich., gathered at least $953,305 since May 2010 and ripped off at least 54 customers through his at-home business known as JG Forex Fund (JGF), the CFTC said.

    The scheme “primarily” was targeted at congregants of a Middleville church, the agency alleged.

    As the scheme progressed, some customers ended up becoming recruiters lured by commissions, the CFTC said.

    But Groendyke never was registered with the CFTC “in any capacity,” and he traded customers’ commodity-pool funds in his own personal accounts, the CFTC said.

    One account in which Groendyke allegedly traded purportedly had a balance of more than $1 million on Dec. 31, but actually had a balance of $14, the CFTC alleged.

    Another account that purportedly contained more than $458,000 had an actual balance of $49, the CFTC charged.

    Investors were given bogus information on the account balances and Groendyke’s trading prowess, the CFTC said. Filings suggest the scheme began to unravel last fall, but Groendyke continued to solicit funds

    Although Groendyke “solicited and accepted at least $953,305,” he used “no more than $366,950 of that amount to trade forex,” the CFTC said.

    “Instead of using participants’ funds to trade forex, as Groendyke represented, he transferred $461,385 of their funds to his personal bank account, used at least $26,966.14 to pay purported forex trading profits to existing participants in the manner of a Ponzi scheme, and used $124,970 to trade commodity futures for his own account,” the CFTC said.

     

  • SEC Says Former Radio Host Pat Kiley Is ‘Frustrating The Search For Truth About His Involvement In A $190+ Million Fraud’

    One of the central figures in the Trevor Cook Ponzi scheme civil case is stonewalling investigators and frustrating efforts to get to the truth, the SEC claims in new court filings.

    Former radio talk-show host Pat Kiley, who was named a defendant in the SEC action filed in November 2009, “has produced no documents, and he has answered no interrogatories,” the SEC said.

    Kiley was 71 when the SEC case was filed, according to court records.

    The agency has asked Chief U.S. District Judge Michael J. Davis of the District of Minnesota to order Kiley to turn over discovery documents that were due “six weeks ago” in mid-March.

    Kiley, though, claims he has turned over the materials, according to court filings. But the SEC said it has not received the materials.

    Instead, the agency said, Kiley sought to “turn the tables” on the Commission by serving it requests of his own.

    “On March 18 — one day before his responses were due — Kiley took the Commission’s requests, tweaked the language, and served them back on the Commission,” the agency said. “That is, Kiley redirected the Commission’s requests back at the Commission, apparently under the mistaken belief that the ball is now in the Commission’s court.”

    But “needless to say,” the agency said, “discovery is not a game of tag — a party cannot avoid answering discovery by serving requests of his own.”

    Kiley next blamed health problems, including “arthritis and tremors in both hands,” for missing deadlines, the agency said.

    “Arthritis is not the real reason for his failure to respond,” the agency said. “Indeed, hand tremors did not prevent him from serving 10 interrogatories and 25 document requests on the Commission on March 18. Arthritis also did not prevent him from litigating the issue of his attorneys’ fees, including the filing of a Motion to Refund Fee . . . and a 12-page affidavit.”

    Kiley, the SEC said, has appeared at three hearings since October 2010, showing that “he litigates — when he wants to.”

    Participating in discovery, however, has been another matter, the SEC said.

    “By refusing to provide information, Kiley is frustrating the search for truth about his involvement in a $190+ million fraud,” the agency said.

    Here is a partial list of what the SEC is seeking from Kiley, according to court filings:

    • All documents that support the statements made in your Answer filed on October 14, 2010 (Docket No. 535). For example, produce: (1) the “letters of gratitude,” “emails of gratitude,” and “letters, cards, and phone calls” from investors, including the “room full of these tokens of clients’ gratitude.”
    • Documents relating to the “customer service” that you performed or experienced.
    • Documents relating to the notion that “everything [you] had on earth was invested in the program,” that you were “fully invested” in the currency program, and that you “lost everything” you owned in the program.
    • Documents relating to the notion that you “liquidated [customer] accounts” and returned customer funds “against their will” when you “felt they did not fit anymore.”
    • Documents relating to the notion that you “predicted accurately (9 months in advance), the failure of banks, investment houses, and the coming real estate foreclosure market.”
    • Documents relating to the “commissions” and other funds received from Trevor Cook or the Currency Program.
    • Documents relating to the “[p]reparation of and research for the radio program.”
    • Documents relating to application materials submitted by investors.

    Thee SEC also asked Kiley to:

    • Produce the “piles and piles of documentary evidence” that you mentioned at the Rule 26(f) conference with Magistrate Judge Noel on December 16, 2010.
    • Produce all affidavits, declarations, responses, and summaries of any kind that you have prepared relating to the Currency Program or to the allegations of the Complaint. This request includes, but is not limited to, the so-called “60-page” affidavit or summary that you prepared about this case, as represented to various investors.
    • Produce all documents that refer or relate to any due diligence of whatever kind that you performed about the Currency Program from January, 2006 to July, 2009. This request includes, but is not limited to, any investigation to confirm whether (i) the investor’s funds would be placed – and were in fact placed – in segregated accounts; (ii) the investor’s funds would be used – and were in fact used – to trade foreign currencies; (iii) the foreign currency trading would generate – and did in fact generate – annual returns of 10% to 12%; (iv) the foreign currency trading involved little or no risk; (v) the investor’s principal would be safe and could be withdrawn at any time; and (vi) Trevor Cook, Bo Beckman, Chris Pettengill, and Jerry Durand were competent and trustworthy.
    • Produce all documents that refer or relate to communications with investors about the Currency Program. This request includes, but is not limited to, all correspondence with investors, and all representations to investors about the Currency Program.
    • Produce all documents that refer or relate to investments by investors in the Currency Program. This request includes, but is not limited to, agreements, applications, account statements, marketing material, so-called “pitch sheets,” and so on.
    • Produce all documents that refer or relate to the content of the “Follow the Money” radio program. This request includes, but is not limited to, recordings or transcripts of broadcasts. This request also includes, but is not limited to, any notes, research, preparatory material, or summaries relating to any broadcasts, as well as any communications with listeners about the broadcasts.
    • Produce all documents that refer or relate to any compensation of any kind that you received relating to the “Follow the Money” radio program.
    • Produce all documents that refer or relate to the content of www.patkiley.com. This request includes, but is not limited to, any information posted on the website, as well as the computer server that contained the contents of the website.
    • Produce all documents that refer or relate to communications with Trevor Cook, Bo Beckman, Chris Pettengill, Jerry Durand, or any officer or employee of the Universal Entities or the Oxford Entities about the Currency Program.
    • Produce all documents relating to any funds (e.g., cash, checks, or cash equivalents) that you received from Trevor Cook, Bo Beckman, Chris Pettengill, Jerry Durand, or any officer or employee of the Universal Entities or the Oxford Entities.
    • Produce all agreements between you and Trevor Cook, Bo Beckman, Chris Pettengill, Jerry Durand, the Universal Entities or the Oxford Entities.
    • Produce all documents relating to any personal investment by you in the Currency Program at any time.
    • Produce all advertisements or other marketing material relating to the Currency Program, the Universal Entities, or the Oxford Entities.
    • Produce all documents referring or relating to your education, professional training, and experience in financial and economic matters. This request includes, but is not limited to, all documents referring or relating to your education, professional training, and experience in the trading of securities or foreign currencies.
    • Produce all documents relating to any communications that you had with anyone about the investigation by the SEC or about the merits of this lawsuit.
    • Produce all photographs relating to the Currency Program or to the “Follow the Money” radio program. This request includes, but is not limited to, all photographs with Trevor Cook, Bo Beckman, Chris Pettengill, Jerry Durand, or any officer or employee of the Universal Entities or the Oxford Entities.
    • Produce all bank statements for accounts used by you (personal or business) from January 1, 2006 to the present.
    • Produce all phone records from January 1, 2006 to the present.
    • Produce all calendars, time entries, and diaries from January 1, 2006 to the present.
    • Produce all federal and state tax returns from January 1, 2006 to present.
    • Produce all documents cited or described in your (forthcoming) Rule 26(a) Initial Disclosures and any supplements.
    • Produce all documents that you cited in, or documents that you relied upon in preparing, your responses to any interrogatories served by the SEC.

     

  • Pittsburgh Steelers Issue Statement On Controversial ‘Tweets’ Of Running Back Rashard Mendenhall After Successful U.S. Action Against Osama Bin Laden

    Pittsburgh Steelers’ President Art Rooney II, the son of U.S. Ambassador to Ireland Dan Rooney, has issued a statement in response to controversial Tweets attributed to Steelers’ running back Rashard Mendenhall after the United States killed Osama bin Laden two days ago.

    The Tweets have sparked a web firestorm and enraged one of America’s hardest-working cities. Pittsburgh, a community of both brawn and brain, does not suffer fools gladly.

    And it does not like to see its storied football franchise and its beloved Rooney family drawn into controversies.

    “I have not spoken with Rashard so it is hard to explain or even comprehend what he meant with his recent Twitter comments,” Art Rooney said in a statement on the Steelers’ website. “The entire Steelers’ organization is very proud of the job our military personnel have done and we can only hope this leads to our troops coming home soon.”

    Bin Laden’s terrorist group killed nearly 3,000 people in the United States on Sept. 11, 2001. Bin Laden was found Sunday hiding in a mansion in Pakistan. The news of his death sparked spontaneous street celebrations in U.S. cities.

    Did Mendenhall use Twitter to elicit sympathy for the terrorist leader?

    “What kind of person celebrates death?” a Tweet attributed to Mendenhall read. “It’s amazing how people can HATE a man they have never even heard speak. We’ve only heard one side . . .”

    Another Tweet attributed to Mendenhall seemed to touch on a conspiracy theory that raised doubts about what really happened at the collapsed Twin Towers in New York City nearly a decade ago.

    “We’ll never know what really happened,” a Tweet attributed to Mendenhall read. “I just have a hard time believing a plane could take a skyscraper down demolition style.”

    Other Tweets attributed to Mendenhall appeared to suggest Americans had judged Bin Laden too harshly after the murderous 9/11 ambush from the skies.

    “Those who judge others, will also be judged themselves,” one Tweet read.

    “I believe in God,” read another. “I believe we’re ALL his children. And I believe HE is the ONE and ONLY judge.”

    The Twitter site did not explain whether the United States should have done nothing after being attacked on its own shores in September 2001. Nor did it explain whether the administrations of President George W. Bush and President Obama had any duty to defend the United States in the aftermath of the devastating attacks or seek justice for the American people and the families of victims of the attacks.

    The burgeoning Mendenhall flap was occurring against the backdrop of an appearance today on Capitol Hill by U.S. Attorney General Eric Holder before the House Judiciary Committee.

    “As I have stated often, no aspect of our work is more important — or more urgent — than protecting the American people,” Holder told the panel. “This is our top priority — and our most fundamental responsibility.

    “Two days ago — with the death of Osama bin Laden, the leader of al Qaeda and the world’s most wanted terrorist — our nation made historic progress in fulfilling this responsibility, and in achieving justice for the nearly 3,000 innocent Americans who were murdered on September 11, 2001,” Holder said.

    Steelers’ owner Dan Rooney, a lifelong Republican, was appointed U.S. Ambassador to Ireland in 2009 by President Obama, who ordered the action against bin Laden. Navy SEALs carried out the operation, and the President lauded the “tireless and heroic work of our military and our counterterrorism professionals.”

    The embassy’s website features information on the action and the death of bin Laden. Ambassador Dan Rooney praised the President and the action.

    Ambassador Dan Rooney

    “I am proud and grateful for the President and all the men and women of intelligence and military communities for their constant demonstration of courage and bravery,” Rooney said in a statement on the embassy website. “Their actions this weekend have made the world a safer and more just place to live for all humanity.”

    “Capturing or killing bin Laden had been a U.S. goal even before the 2001 attacks,” the website noted. “He declared war on the United States and its allies in 1996, and al-Qaida was considered responsible for the 1998 bombing of U.S. embassies in Kenya and Tanzania and the 2000 suicide attack against the USS Cole in Yemen.”

    Mendenhall is regarded as one of the top young runners in the National Football League. The Pittsburgh Post-Gazette reported that Mendenhall earlier had used Twitter to compare “the lot of NFL players to that of slaves in the old South.”

    The Post-Gazette reported in 2008 that Mendenhall had a five-year, $12.55 million contract with the Steelers that guaranteed him $7.125 million.

    Pittsburgh took great pride in Obama’s nomination of Dan Rooney to the embassy post.

  • BULLETIN: 3 New Defendants In ‘Red Sea Management’ Case Have Been Arrested; New Charges Filed Against Original Defendants In Alleged Stock-Manipulation Scheme Over Which Purported One-Time ‘Consulate’ To Nonexistent Nation Of ‘New Utopia’ Allegedly Presided

    BULLETIN: Federal agents have arrested three new defendants in the alleged Red Sea Management stock-manipulation scheme. The arrests occurred in three U.S. states last week, and one of the new defendants already was in custody for a separate scam, federal prosecutors said.

    Arrested were Timothy Barham Jr., 43, of Henderson, Tenn.; Nathan Montgomery, 30, of Henderson, Nev.; and Ryan Reynolds, 39, of Dallas. Reynolds already was in custody. The SEC charged him in 2008 in a separate scam, according to records. He is a defendant in at least two separate SEC actions.

    Red Sea allegedly was operated by Jonathan Curshen, a convicted felon and the one-time purported “honorary counsel” of St. Kitts-Nevis to Costa Rica. Curshen, 46, of Sarasota, Fla., also has been referenced as a purported “consulate” to the bizarre, nonexistent nation of “New Utopia.”

    New Utopia has purported to be an underwater nation that will rise out of the Caribbean on concrete stilts.

    On March 10, the PP Blog received a bizarre communication from a person who purported to be “Mr. Protector” and complained about the Blog’s coverage of the New Utopia fantasy, which the SEC said was dreamed up by American Lazarus R. Long more than a decade ago.

    Long has described himself as a “Prince.” New Utopia, which purportedly is located undersea “approximately 115 miles west of the Cayman Islands,” has offered driver’s licenses for $140.

    The communication both invited and uninvited the Blog to witness the debut of the New Utopia “Palace” on a date uncertain.

    “How about we print your words out about New Utopia in size 12 font and then, when New Utopia Construction begins, we can invite you there in front of the Palace and watch you eat the words and the paper they are written on?” the person wrote.

    In the very next paragraph, however, the Blog was uninvited.

    “[H]ow will we know to not allow you to visit The Principality of New Utopia?” the person inquired. “We will find a way of that be assured.”

    Read the Justice Department statement on the new defendants and a superseding indictment against the original defendants. The original defendants included Curshen; attorney Michael Simon Krome, 49, of Long Island, N.Y.; Ronald Salazar Morales, aka “Ronny Salazar,” 39, of Costa Rica; Robert Lloyd Weidenbaum, 44, of Miami; and Eric Ariav Weinbaum, 37, and Izhack Zigdon, 47, both of Israel.

    The case was brought by elements of the interagency Financial Fraud Enforcement Task Force created by President Obama in November 2009.

  • Fugitive With Links To The Late Pablo Escobar And Medellin Cartel Arrested 17 Years After Indictment; Sigifredo Maya Pleads Guilty In Florida

    The long arm of U.S. law — and the long memory of U.S. law enforcement — has resulted in the guilty plea in Southern Florida of a Colombian fugitive linked to the defunct Medellin cocaine cartel and the late Pablo Escobar.

    In 1989, federal prosecutors said, Sigifredo Maya directed a money courier to deliver $3 million in drug proceeds “stuffed inside six cardboard bankers boxes” from New York to Miami. The cash then was flown to Colombia and deposited in bank accounts linked to the cartel and Escobar.

    Escobar was killed by Colombian National Police in 1993. Maya, now 48, was indicted in the United States in 1994. Prosecutors said he managed part of the cartel’s operations in Miami.

    Maya and accomplices “owned several properties and businesses in South Florida on Pablo Escobar’s behalf, and used these entities to foster cocaine shipments into Miami, and conceal money shipments back to the Medellin cartel in Colombia,” prosecutors said yesterday.

    On March 18, 2011, Maya was detained in Panama “while attempting to travel to Mexico.” He was flown to Miami and arrested by the DEA.

    Maya pleaded guilty yesterday to conspiracy to possess with intent to distribute more than five kilograms (11 pounds) of cocaine. Sentencing is scheduled for July 28.

    One Miami warehouse linked to Escobar contained more than 500 kilograms (1,102) pounds of cocaine in 1988, prosecutors said.

    It is common for narcotics traffickers and money-launderers to attempt to conceal proceeds from criminal enterprises by disguising them as proceeds from legitimate enterprises or redirecting criminal proceeds to companies that have the outward appearance of legitimacy.

  • UPDATE: FBI Moves Osama Bin Laden From ‘Most Wanted’ To ‘Deceased’; Terrorist Also Linked To Pre-9/11 Attacks, Agency Reminds Public

    The FBI, which had listed Osama bin Laden as “Most Wanted,” now is listing him as “Deceased.”

    Before and after:

    Source: FBI, prior to May 1, 2011, U.S. operation that resulted in bin Laden's death.
    Source: FBI, May 2, 2011.

    “The mastermind of the attacks on September 11, 2001 that killed thousands of innocent men, women, and children has been killed,” the FBI said today.

    President Obama addressed the American people late last night to inform them that the United States had carried out an operation in Pakistan after assembling actionable intelligence over the past several months.

    “Tonight, I can report to the American people and to the world that the United States has conducted an operation that killed Osama bin Laden,” the president said last night.

    The FBI noted today that bin Laden had carried out other attacks.

    “Well before the events of 9/11, bin Laden had openly declared war on the U.S. and was committed to killing innocents,” the agency said. “His al-Qaeda group was responsible for the 1998 bombings of the U.S. Embassies in Dar es Salaam, Tanzania and Nairobi, Kenya. The attacks killed over 200 people. Bin Laden was indicted for his role in planning the attacks and added to the FBI’s Ten Most Wanted Fugitives list.”

  • URGENT >> BULLETIN >> MOVING: Osama Bin Laden Is Dead; ‘Targeted’ U.S. Operation Carried Out In Pakistan; State Department Urges Travel Caution

    Osama bin Laden has been killed in a “targeted operation” by the United States and his body has been recovered.

    President Obama appeared on U.S. television late Sunday night, saying he approved a U.S. operation in Pakistan and that bin Laden was killed yesterday. No Americans were harmed, the president said.

    Bin Laden was found to be at a “compound” in the city of Abbottabad. Obama said he authorized a “small team of Americans” to carry out the action.

    Obama called former President George W. Bush to inform him of the operation that led to bin Laden’s death. Bush called the operation a “momentous achievement.”

    Bush had been President for only eight months when the 9/11 terrorist attacks occurred.

    Despite the lateness of the hour, spontaneous celebrations broke out on sidewalks outside the White House, with Americans singing the national anthem and chanting “USA! USA! USA!” Celebrations also broke out in New York City.

    The U.S. State Department early today urged Americans to be cautious when living or traveling abroad due to “the enhanced potential for anti-American violence given recent counter-terrorism activity  in Pakistan.”

    Here is Obama’s statement on the death of bin Laden:

    Good evening. Tonight, I can report to the American people and to the world that the United States has conducted an operation that killed Osama bin Laden, the leader of al Qaeda, and a terrorist who’s responsible for the murder of thousands of innocent men, women, and children.

    It was nearly 10 years ago that a bright September day was darkened by the worst attack on the American people in our history. The images of 9/11 are seared into our national memory — hijacked planes cutting through a cloudless September sky; the Twin Towers collapsing to the ground; black smoke billowing up from the Pentagon; the wreckage of Flight 93 in Shanksville, Pennsylvania, where the actions of heroic citizens saved even more heartbreak and destruction.

    And yet we know that the worst images are those that were unseen to the world. The empty seat at the dinner table. Children who were forced to grow up without their mother or their father. Parents who would never know the feeling of their child’s embrace. Nearly 3,000 citizens taken from us, leaving a gaping hole in our hearts.

    On September 11, 2001, in our time of grief, the American people came together. We offered our neighbors a hand, and we offered the wounded our blood. We reaffirmed our ties to each other, and our love of community and country. On that day, no matter where we came from, what God we prayed to, or what race or ethnicity we were, we were united as one American family.

    We were also united in our resolve to protect our nation and to bring those who committed this vicious attack to justice. We quickly learned that the 9/11 attacks were carried out by al Qaeda — an organization headed by Osama bin Laden, which had openly declared war on the United States and was committed to killing innocents in our country and around the globe. And so we went to war against al Qaeda to protect our citizens, our friends, and our allies.

    Over the last 10 years, thanks to the tireless and heroic work of our military and our counterterrorism professionals, we’ve made great strides in that effort. We’ve disrupted terrorist attacks and strengthened our homeland defense. In Afghanistan, we removed the Taliban government, which had given bin Laden and al Qaeda safe haven and support. And around the globe, we worked with our friends and allies to capture or kill scores of al Qaeda terrorists, including several who were a part of the 9/11 plot.

    Yet Osama bin Laden avoided capture and escaped across the Afghan border into Pakistan. Meanwhile, al Qaeda continued to operate from along that border and operate through its affiliates across the world.

    And so shortly after taking office, I directed Leon Panetta, the director of the CIA, to make the killing or capture of bin Laden the top priority of our war against al Qaeda, even as we continued our broader efforts to disrupt, dismantle, and defeat his network.

    Then, last August, after years of painstaking work by our intelligence community, I was briefed on a possible lead to bin Laden. It was far from certain, and it took many months to run this thread to ground. I met repeatedly with my national security team as we developed more information about the possibility that we had located bin Laden hiding within a compound deep inside of Pakistan. And finally, last week, I determined that we had enough intelligence to take action, and authorized an operation to get Osama bin Laden and bring him to justice.

    Today, at my direction, the United States launched a targeted operation against that compound in Abbottabad, Pakistan. A small team of Americans carried out the operation with extraordinary courage and capability. No Americans were harmed. They took care to avoid civilian casualties. After a firefight, they killed Osama bin Laden and took custody of his body.

    For over two decades, bin Laden has been al Qaeda’s leader and symbol, and has continued to plot attacks against our country and our friends and allies. The death of bin Laden marks the most significant achievement to date in our nation’s effort to defeat al Qaeda.

    Yet his death does not mark the end of our effort. There’s no doubt that al Qaeda will continue to pursue attacks against us. We must –- and we will — remain vigilant at home and abroad.

    As we do, we must also reaffirm that the United States is not –- and never will be -– at war with Islam. I’ve made clear, just as President Bush did shortly after 9/11, that our war is not against Islam. Bin Laden was not a Muslim leader; he was a mass murderer of Muslims. Indeed, al Qaeda has slaughtered scores of Muslims in many countries, including our own. So his demise should be welcomed by all who believe in peace and human dignity.

    Over the years, I’ve repeatedly made clear that we would take action within Pakistan if we knew where bin Laden was. That is what we’ve done. But it’s important to note that our counterterrorism cooperation with Pakistan helped lead us to bin Laden and the compound where he was hiding. Indeed, bin Laden had declared war against Pakistan as well, and ordered attacks against the Pakistani people.

    Tonight, I called President Zardari, and my team has also spoken with their Pakistani counterparts. They agree that this is a good and historic day for both of our nations. And going forward, it is essential that Pakistan continue to join us in the fight against al Qaeda and its affiliates.

    The American people did not choose this fight. It came to our shores, and started with the senseless slaughter of our citizens. After nearly 10 years of service, struggle, and sacrifice, we know well the costs of war. These efforts weigh on me every time I, as Commander-in-Chief, have to sign a letter to a family that has lost a loved one, or look into the eyes of a service member who’s been gravely wounded.

    So Americans understand the costs of war. Yet as a country, we will never tolerate our security being threatened, nor stand idly by when our people have been killed. We will be relentless in defense of our citizens and our friends and allies. We will be true to the values that make us who we are. And on nights like this one, we can say to those families who have lost loved ones to al Qaeda’s terror: Justice has been done.

    Tonight, we give thanks to the countless intelligence and counterterrorism professionals who’ve worked tirelessly to achieve this outcome. The American people do not see their work, nor know their names. But tonight, they feel the satisfaction of their work and the result of their pursuit of justice.

    We give thanks for the men who carried out this operation, for they exemplify the professionalism, patriotism, and unparalleled courage of those who serve our country. And they are part of a generation that has borne the heaviest share of the burden since that September day.

    Finally, let me say to the families who lost loved ones on 9/11 that we have never forgotten your loss, nor wavered in our commitment to see that we do whatever it takes to prevent another attack on our shores.

    And tonight, let us think back to the sense of unity that prevailed on 9/11. I know that it has, at times, frayed. Yet today’s achievement is a testament to the greatness of our country and the determination of the American people.

    The cause of securing our country is not complete. But tonight, we are once again reminded that America can do whatever we set our mind to. That is the story of our history, whether it’s the pursuit of prosperity for our people, or the struggle for equality for all our citizens; our commitment to stand up for our values abroad, and our sacrifices to make the world a safer place.

    Let us remember that we can do these things not just because of wealth or power, but because of who we are: one nation, under God, indivisible, with liberty and justice for all.

    Thank you. May God bless you. And may God bless the United States of America.

  • PICTURE STORY: Club Asteria Promoters Claim Program Is ‘Passive’ Investment Opportunity; ‘Single Account’ Said To Return ‘About $20,000 Per Year’; Why Not Open Second Account In Same Household? Affiliate Asks

    Club Asteria members now say the firm, which trades on the name of the World Bank, suddenly threatened recruits for making false claims about the program.

    The PP Blog reported on April 4 that the program, which is being pumped on the Ponzi boards and the personal websites of thousands of Club Asteria members, was routinely being positioned as a “passive” investment opportunity. Some affiliates have tried to plant the seed that Google, Yahoo, MSN and America Online endorsed the program.

    Such claims not only raise questions about whether Club Asteria is selling unregistered securities as investment contracts, but also raise questions about how much revenue the Virginia-based firm has raised based on the lies and misrepresentations of its own members.

    Liars’ accounts will be terminated, the company reportedly advised members in recent days. What prompted Club Asteria to issue the warning was unclear. Also unclear is whether the firm has any means of determining how much revenue it has generated based on the false, misleading or dubious claims of its membership base, which is worldwide in scope.

    The company provided no guidance to members on how they could be certain the money they received from Club Asteria was clean. Some of the forums from which the “opportunity” is being promoted are referenced in federal court filings as places from which Ponzi schemes are promoted.

    “YOU MUST REMOVE THIS MATERIAL IMMEDIATELY AND CEASE THESE ACTIVITIES OR YOUR ACCOUNT WILL BE SUSPENDED AND/OR TERMINATED AND POSSIBLE LEGAL ACTION AGAINST YOU WILL BE INITITATED (sic),” the firm reportedly warned in all-caps.

    Club Asteria did not specify what form any legal action against its members would take or how many members received the warning. Nor did the firm say who would pay for any litigation that ensued or how international members would be served process. International litigation can be extremely costly and time-consuming.

    Also unclear was whether Club Asteria planned to file police reports or notify agencies such as the Federal Trade Commission about the problems it claims its members are creating.

    “YOU HAVE 72 HOURS TO RESPOND TO THE EMAIL ADDRESS WITH LINKS OR OTHER DOCUMENTATION SHOWING YOUR SITE IS IN COMPLIANCE,” Club Asteria reportedly continued.

    Promoters claimed that Club Asteria specifically warned members that they:

    • [C]annot say or imply that a Club-Asteria member can earn money without working for it.
    • [C]annot say or imply that there is some minimum guarantee of how much money you will earn every week.
    • [C]annot make or imply income projections of ANY type. Only income examples found on the Club-Asteria site and in official member materials may be used at any time.
    • [C]annot say or imply that Club-Asteria membership is a passive investment or imply that this is an investment of any type.
    • [C]annot say or imply that someone should join if they have no interest in the benefits of our products, programs and services.
    • [C]annot invite, solicit or encourage others to join just because of our rewards program.
    • [C]annot create your own website and say anything you want about Club-Asteria.

    Research suggests, however, that thousands of websites globally have positioned Club Asteria as a “passive” investment program and published earnings suggestions, promises or guarantees. Each and every claim puts the enterprise at risk, and unringing the bell after months and months of dubious claims may be a tall order.

    The screen shots below are just a small sampling of the kinds of claims that appear online about Club Asteria. Each of the sites was active as of this morning, despite the purported warning Club Asteria issued last week.

    Purportedly quoting an upline sponsor, this Club Asteria pitch talks about the great expansion of the program and claims "completely passive members make very good money." The program is designed, according to the pitch, to deliver "returns" of $400 a week — or "about $20,000 per year." Opening a second account in the household "will simply double" the $20,000, according to the promo.
    This pitch urges prospects to create income for life and earn "$400 Every Week."
    This YouTube pitch for Club Asteria claims the opportunity pays "$400 USD EVERY WEEK" and suggests PayPal can help members fund their accounts. YouTube appears to have removed the soundtrack from the promo because it violated the copyright of Warner Music Group (WMG).
    This Facebook promo advertises a "minimum of about $1,600 per month forever."
    Club Asteria, according to this promo, enables members to "Earn 100% Passive." It also claims "80% is reinvested."
    Another pitch that highlights the purportedly "passive" nature of Club Asteria. This promo references the name of the World Bank and claims the program is "Real, Safe and Legal." Meanwhile, the promo makes the preemptive claim Club Asteria is not a "Ponzi." Many promoters preemptively have claimed the firm is not operating a Ponzi. Club Asteria does not publish verifiable financial data.
    This promo declares that Club Asteria "is not just a passive income."
    Club Asteria advertised in "Jobs" listings in Germany. The ad claims members are "guaranteed to earn $400 a week without much effort."

  • Edward May, 74, Pleads Guilty In Michigan Ponzi Caper That Gathered $200 Million; Feds Say He Used 150 LLCs As Part Of Spectacular, Decade-Long Fraud

    The senior-citizen Ponzi cavalcade and incredible paperwork maze continues: Edward May, 74, has pleaded guilty in Detroit to 59 counts of mail fraud in a case in which federal prosecutors alleged he rented office space in Lake Orion, Mich., and established 150 LLCs as part of a $200 million Ponzi scheme that operated for a decade.

    The SEC, which sued May for his operation of E-M Management Co. LLC and associated busineses, said in November 2007 that May had defrauded as many as 1,200 investors by selling them “interests” in the LLCs.

    Many of the investors were “elderly” persons, the SEC said, adding that May also was selling unregistered securities.

    As part of the fraud, May traded on the name of Hilton Hotel Corp. and planted the seed that he was supplying telecommunications services to the famous company through a “Norwegian” company.

    It was a lie, the SEC said. It also was a lie when May made similar claims and traded on the names of MGM-Mirage Resorts Inc., the MGM Grand Hotel, Motel 6, the Tropicana Resort Casino and the Sheraton Hotels chain.

    The Ponzi collapsed by July 2007, and May went into excuse-making mode by claiming payments were delayed because of the company’s growing pains — specifically claiming that “mailing accuracy” had suffered because the number of LLCs had grown and created a “volume” problem, the SEC said.

    By September 2007, however, he started pitching investors on an opportunity to invest in a Michigan “concrete company,” the SEC said.

    What May actually was doing, investigators said, was running a Ponzi scheme and ripping off investors to pay his gambling debts and other personal expenses.

    In September 2009, the SEC alleged that Frank Bluestein, who ran a company known as Fast Frank Inc., was “the single largest salesperson” for May’s fraud.

    Bluestein, 59 when the SEC case against him was brought, raised $74 million, in part by targeting senior citizens and conducting “seminars” in which seniors were encouraged to “refinance their mortgages for their homes in order to fund their investments,” the SEC alleged.