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  • Accused Ponzi Suspect Daniel Fernandes Rojo Filho Arrested, But New Mystery Emerges: NFL Draft Pick Was Seen Driving Same Car

    Screen shot from YouTube video. Red highlights by PP Blog.
    Screen shot from YouTube video. Red highlights by PP Blog.

    2ND UPDATE 6:23 P.M. EDT U.S.A. Ponzi-scheme suspect Daniel Fernandes Rojo Filho of DFRF Enterprises has been arrested in Boca Raton, Fla. after an FBI investigation — but a new mystery is emerging on how he came into possession of a gold Lamborghini bearing Florida tag DJBU10.

    The extremely pricy automobile is shown in at least two online videos that display the tag number and name of Prestige Imports/Lamborghini Miami in the rear license-plate holder. Filho is driving the car in a video that appears on YouTube. (Shown below.)

    In a separate video that appears on Instagram, the car purportedly is being driven by Vic Beasley, the Georgia native and Clemson University (South Carolina) football standout who was the first-round pick of the Atlanta Falcons in this year’s NFL draft.

    Neither the dealership nor Beasley has been accused of wrongdoing, and the car may be a marketing prop for the dealership on Biscayne Boulevard North in Miami Beach. The PP Blog left messages for comment today at both the dealership and the office of Five Star Athlete Management, the Atlanta-based agency that represents Beasley.

    The Blog will include the comments if the calls are returned. The Blog also is awaiting the return of a call it made for comment to the office of U.S. Attorney Carmen Ortiz of the District of Massachusetts.

    Both of the videos appear to have been made by happenstance by individuals who have no DFRF ties and simply shot footage when the eye-popping Lamborghini appeared when they were nearby.

    The person who posted YouTube footage showing Filho in the car appears to be an automobile hobbyist and not to have recognized him at all. Separately, the person who shot the Instagram footage showing Beasley behind the wheel appears possibly to have recognized the football star, but the backdrop also is striking.

    In the Beasley video, the car is seen driving at a slow speed across across a grassy area that includes a fire hydrant and low curb, making a right turn onto a side road, drifting through a stop sign and then making another right turn onto a different highway. A sign that briefly appears in the video appears to read “NW 13th St.”

    There is a NW 13th Street in Miami, but the Blog could not conclusively determine that’s where the Instagram video was shot.

    There also is a discussion thread about Beasley and the Lamborghini at the website of TigerNet, which covers topics pertaining to Clemson athletics. The first post is dated Feb. 18, 2015, weeks prior to the April 30 NFL draft.  Another Feb. 18 post in the thread identifies the license number as DJBU10. Still another identifies it as a Florida tag.

    The PP Blog first observed Filho driving the car in this DFRF promotional video published May 8, 2015, on YouTube. The tag number, however, does not appear in the video.

    As noted above, an apparent car hobbyist with a YouTube account (HAW.Photography) encountered the exceptionally flashy ride while shooting footage in Boca Raton. The YouTube upload date of this video is April 4, 2015. The headline is “GOLD Lamborghini Aventador LP700-4 in Boca Raton, Florida.” Most of the video appears to have been shot on U.S. Route 1, which passes through Boca Raton.

    A female in the car shooting the video exclaims, “There’s another one!” Another female voice says, “A gold one!”

    At one point the Lamborghini makes a right turn into a car wash. The videographers appear to be in a different traffic lane, but eventually make it into the same parking lot. When the video resumes in the parking lot, Filho is seen stepping out of the driver’s side door of the Lamborghini. A woman exits the vehicle from the passenger’s side door.

    Whether either of the videos has evidentiary value in the Ponzi cases against Filho was not immediately clear. Federal prosecutors in Massachusetts described him yesterday as a fugitive who met arrest Tuesday while “coming out of a restaurant in Boca Raton.”

    Filho is a citizen of Brazil. Prosecutors said Filho had evaded “arrest for more than two weeks” before being caught. The FBI had been seeking his arrest since June 25.

    In a civil case against Filho announced by the SEC on July 2, the agency describes him as having spent $2.5 million to acquire “a fleet of luxury automobiles,” including a 2014 Rolls-Royce, a 2015 Lamborghini, a 2014 Lamborghini, a 2012 Ferrari, a 2006 Ferrari, a 2013 Mercedes, a 2014 Cadillac and a 2015 Cadillac.

    The SEC has linked Filho to Sann Rodrigues, a figure in the epic TelexFree pyramid- and Ponzi scheme case. TelexFree may have gathered as much as $1.8 billion. DFRF’s haul currently is estimated at $15 million.

    Officials at the SEC today Tweeted news of the Filho arrest.

  • DEVELOPING: Herbalife V. Twitter: More Latino Polarization?

    Screen shot from Twitter.
    Screen shot from Twitter.

    UPDATED 3:33 P.M. EDT U.S.A. Herbalife International of America Inc. has sued Twitter Inc. in a reported bid to out the identity of a person posting on Twitter as @AfueraHerbaLIES and then potentially sue that person for defamation, Reuters and other media outlets are reporting.

    The PP Blog this morning identified the action as case No. 2015-L-007373. It was filed July 20 in the Law Division of the Circuit Court of Cook County, Ill. Dentons US LLP is listed as counsel for Herbalife. The complaint is styled a “Petition for Discovery.” It was not immediately clear if Twitter had been served.

    From Reuters (italics added):

    Herbalife said it wants Twitter to provide information such as IP addresses and account details of the user who vilified the company and its management as “thieves, pill pushing frauds and bullies”.

    The @AfueraHerbaLIES Twitter site appears to have posts in both Spanish and English and to position Herbalife as a pyramid scheme that rips off Latinos. One post — apparently from yesterday — features an image of a space alien puffing on a cigarette (or weed) while flipping Herbalife the bird.

    Another — dated July 14 — is positioned as a “Media Alert.” It tells readers “El Chapo” was seen entering Herbalife’s corporate office.

    “El Chapo” is the reputed druglord Joaquin Guzman Loera, who escaped from a prison in Mexico on July 11, prompting the U.S. Department of Justice to issue a statement on a Sunday that offered assistance to Mexico in recapturing him.

    Herbalife sued six days after the “Media Alert” post, which included a superimposed image of Guzman in a frame that also included an image of Herbalife CEO Michael O. Johnson outside an Herbalife office building.

    “Wonder what he could be doing there? $$$,” the Tweet inquired (and answered) about Guzman.

    Billionaire businessman, MLM aficionado and GOP Presidential hopeful Donald Trump last week reportedly declared he’d kick Guzman’s ass. Trump reportedly later called the FBI, when a Twitter account purportedly linked to Guzman was used to threaten him.

    Herbalife has been under fire from activist investor Bill Ackman, who has called the company a pyramid scheme that targets vulnerable population groups. (See Nov. 13, 2013, PP Blog editorial: Herbalife And Polarization In The Latino Community. Use the Blog’s search function for other references to Ackman and Herbalife.)

    Herbalife has hired former government officials as it seeks to stem the tide of attacks against the company, which faces investigations in multiple jurisdictions. As it gets more and more entrenched in politics, the MLM firm, which was ripe for parody before Ackman produced a serious analysis in 2012, now may be particularly ripe.

    If Trump, displeased with the state of immigration in America, drops out of the Presidential race, for example, might the Herbalife braintrust consider hiring him to bolster the relationship between the company and Latinos? (It might not be a good idea.)

    Might the company be in the market to hire the “two 20-week old, 48-pound” Thanksgiving turkeys President Obama pardoned last year — simply because they were available and potentially useful as part of Washington’s revolving door? Could those grossly overweight birds have benefited from a month or two on Herbalife weight-loss shakes? Will there be “before” and “after” pictures if Herbalife takes them on?

     

    An opinion piece at ValueWalk this afternoon illustrates some of the PR dangers Herbalife faces with its action aimed at  @AfueraHerbaLIES, an account that appears to have only 93 followers.

    NOTE ADDED AT 8:35 P.M. EDT U.S.A. See the first comment in the thread below, which includes a link to a report today in the Cook County Record. Herbalife appears to be bringing this action under Illinois Supreme Court Rule 224. The PP Blog has provided additional links below that contain information on Rule 224.

     

  • Defense Attorney With Ties To Zeek Case Now Representing Kristi Johnson Of Achieve Community In Criminal Case

    recommendedreading1UPDATED 9:08 A.M. EDT JULY 21 U.S.A. Matthew G. Pruden, an attorney with the Tin Fulton Walker & Owen law firm, is a defense lawyer in the June 2015 criminal case against “Achieve Community” figure Kristine Louise Johnson (Kristi Johnson), according to the docket of the case.

    North Carolina-based Tin Fulton Walker & Owen also is representing alleged Zeek Rewards’ operator Paul R. Burks in the criminal case against him brought by federal prosecutors in the Western District of North Carolina last year and in the civil case brought by the SEC in 2012. Pruden’s name appears on a Plainsite.org version the docket in the SEC’s civil case against Rex Venture Group LLC, the company through which Burks allegedly operated Zeek.

    Achieve, like Zeek, is alleged to have been a pyramid- and Ponzi scheme. Pruden was appointed by the court to represent Johnson, who has pleaded guilty to a charge of wire-fraud conspiracy.

    Though bizarrely dismissed by some Zeek cheerleaders as country bumpkins in the early days after the SEC brought its civil case, Tin Fulton Walker & Owen is a distinguished law firm. (Read GlimDropper of the RealScam.com antiscam forum, posting at Quatloos, covering a 2012 Robert Craddock barb against the firm.)

    Among the firm’s most famous clients is Gen. David Petraeus, the former director of the Central Intelligence Agency who received probation and a fine after admitting “to the unauthorized removal and retention of classified information and lying to the FBI and CIA about his possession and handling of classified information.” (Jake Sussman, the Petraeus lawyer quoted in this April 23, 2015,  AP story on the Petraeus sentence, also is a lawyer for Zeek’s Burks.)

    Achieve’s Johnson pleaded guilty to wire-fraud conspiracy on June 30. She is free on bail. Though listed as a Colorado resident, she was charged criminally in the Western District of North Carolina — the same venue in which the criminal charges against Burks were filed.

    It is known that Zeek and Achieve had members in common.

    Whether the cases against Burks and Johnson raise any potential conflicts for Tin Fulton Walker & Owen was not immediately clear.

    Certain documents that appear to be related to Johnson’s passport have been sealed in the criminal action against her. Certain documents in the Zeek case also are sealed.

    Pruden assisted Johnson when she appeared in court last month and pleaded guilty, according to documents in the case.

    NOTE: Our thanks to the ASD Updates Blog.

     

     

     

  • Spanish Police Bust ‘Unete’, AKA ‘Unetenet’; Thousands Allegedly Victimized In Digital-Currency Pyramid Scam Operated By ‘Criminal Organization’

    breakingnews72UPDATED 11:15 P.M. EDT U.S.A. Still pushing UFunClub (or Unascos) and absurd propositions such as UToken? Follow the narrative of the Spanish National Police and see if it reminds you of anything you’ve heard before. Any number of digital-currency scams currently are fleecing people globally.

    Indeed, National Police have announced the arrests of 20 individuals and the seizure of millions of dollars after an investigation into a purported digital currency known as unete or unetes offered through a “program” known as “Unetenet.”

    Here is a Google translation from Spanish to English of a news release issued by the National Police. Here is the original in Spanish.

    From the English translation (italics added/no editing performed):

    National Police agents have broken up an alleged criminal organization specialized in the commission of massive fraud by the method of the “pyramid schemes”. The group had obtained more than 50 million euros through scams 50,000 people, 6,000 of them located in Spain. After more than year and a half of investigation, agents were able to confirm the existence a company that captured his victims through publicity events, as events in luxury hotels, promotional videos or educational talks and offered them extra income quickly inserting ads company network. Money that was developed by the company in a con artist invented virtual currency, I really had no value, and thus impossible to recoup their investments.

    Arrests were made in Madrid, Valencia, Malaga, Seville, Langreo, Alicante and Arrecife (Las Palmas), police said.

    El Pais, the Spanish newspaper, reported last month that the currency was devised by Spaniard José Manuel Ramírez Marco. The publication carried a photo of Marco posing in front of a building dubbed “Dubai Internet City.”

    Any number of recent schemes have claimed ties in Dubai.

    Authorities investigating unete got a break when a former employee of the company filed a complaint, apparently at the Interior Attaché in Bolivia. Complaints also came in from various parts of Spain, police said.

    In a money-laundering probe, police seized at least 18 computers, hard drives and CPUs, three tablets, “numerous documents related to fraud and money laundering,” 15,505 euros and two luxury cars.

    “In addition, an account has been locked in Latvia with millions of US dollars [possibly $22 million or $27 million], plus Canadian dollars, British pounds [presumptively] and Australian dollars.

    Also see report on Unascos at BehindMLM.com.

  • BULLETIN: Mass Shooting At 2 Separate Military Sites In Chattanooga, Tenn.

    breakingnews72BULLETIN: (7th Update 6:32 p.m. EDT U.S.A.) Multiple media outlets are reporting a mass shooting at two separate military centers in Chattanooga, Tenn. An early report in the Chattanooga Times Free Press says four U.S. Marines have been killed and a police officer shot and wounded.

    A gunman apparently also has been killed.

    The U.S. Navy has confirmed a shooting incident in Chattanooga.

    U.S. Attorney Bill Killian of the Eastern District of Tennessee has called the shootings an “act of domestic terrorism,” according to an AP report via the Washington Post. Chattanooga Mayor Andy Berke called the shootings a “horrific incident in our community.”

    From NBC News (italics added):

    The shootings happened about 40 minutes and six miles apart, first at a military recruitment station and then at a Navy and Marines reserve center. It appeared that the Marines were killed at the reserve center.

    The U.S. Marines Corps has confirmed the deaths of four marines at the Navy & Marine Reserve Center.

    FBI identifies shooter as Mohammod Youssuf Abdulazeez, 24. Statement from FBI (italics added):

    The FBI’s Knoxville Field Office, along with the Chattanooga Police Department and other law enforcement partners, are working jointly to investigate today’s shootings at a military recruitment center and a reserve center in Chattanooga, Tennessee in which four individuals were killed and three injured. The shooter, Mohammod Youssuf Abdulazeez, 24, is also deceased. While it would be premature to speculate on the motives of the shooter at this time, we will conduct a thorough investigation of this tragedy and provide updates as they are available.

    U.S. Attorney General Loretta E. Lynch calls it a “national security investigation.” (Full statement/italics added):

    “On behalf of the Department of Justice, I offer my heartfelt condolences and deepest sympathies to the loved ones of the U.S. servicemembers who were murdered and the law enforcement officer who was wounded in this shameful and cowardly act of violence. I have directed the FBI to take the lead in the national security investigation of this heinous attack on members of our military. The U.S. Attorney’s office and department prosecutors are also actively involved. In the days ahead, we intend to work with our partners in law enforcement and the intelligence community to ensure that the American people are protected and that justice is served.”

  • Meet Jeffrey A. Feldman, Purported ‘Insurance’ Provider For DFRF Enterprises And Daniel Fernandes Rojo Filho

    Daniel Fernandes Rojo Filho and Jeffrey A. Feldman: Source: DFRF Enterprises' pitch on YouTube.
    Daniel Fernandes Rojo Filho (left) and Jeffrey A. Feldman: Source: DFRF Enterprises’ pitch on YouTube.

    As the PP Blog reported late yesterday, a federal warrant for the arrest of alleged DFRF Enterprises’ Ponzi- and pyramid figure Daniel Fernandes Rojo Filho has been issued. The FBI has brought a criminal charge of wire fraud against Filho, 47, a citizen of Brazil who has lived in the United States. The SEC lists an address for him in Winter Garden, Fla.

    One of Filho’s co-defendants in the SEC’s civil case filed late last month is Jeffrey A. Feldman, 56, of Boca Raton, Fla. Among other things, the SEC alleged that Feldman “is the sole officer and director of Universal Marketing Group, Inc., a Florida corporation.

    “He claims to be the U.S. representative of Accedium Insurance Company (“Accedium”), which is based in Barbados and London,” the SEC continued. “In July 2007, he filed for personal bankruptcy. In 1998, he was found guilty of fraud and forgery for having received $2.5 million in premiums from a rental car chain for insurance policies that he did not actually obtain. In 1996, the state of Florida revoked his license to sell insurance after he pleaded no contest to charges that he submitted false insurance claims for losses he supposedly suffered from Hurricane Andrew. He has made materially false and misleading statements about DFRF in public meetings and videos posted on the internet.”

    JeffreyAFeldman551606Florida state records show that Feldman served time in a Florida prison between Dec. 28, 1998, and March 2, 2001, on charges of fraud and theft. The 2001 photo at the right, sourced from the Florida Department of Corrections, is his mugshot.

    A June 24, 1993, story in the Lakeland Ledger reported that Florida state agents accused Feldman of faking “at least 15 clothing receipts from high-class stores for $76,661 and [turning] them in as part of his homeowner’s claim” after Hurricane Andrew.

    One of the ways DFRF duped investors, according to both the SEC and the FBI, was to make them believe their money was insured through the Accedium firm. In an FBI affidavit, the agency described two alleged co-conspirators. One of them appears to be Feldman, referenced as “CC-2.”

    From the FBI affidavit (italics added):

    Bank records reviewed to date indicate that no money has been paid to any entity by the name of Accedium, the company that allegedly insured investments in DFRF. In a December 8, 2014 DFRF video, which was posted on the internet, an individual identified herein as Co-Conspirator 2 (“CC-2”) was identified as an “insurance executive,” and described as “the person responsible for the insurance company.” In a subsequent DFRF video, posted on the internet on December 10, 2014, FILHO represented that DFRF obtained its Accedium insurance through CC-2. CC-2’s license to sell insurance, however, was revoked in 1996.

    The screen shot at the top of this story showing Filho and Feldman is from a YouTube video dated Dec. 8, 2014.

  • URGENT >> BULLETIN >> MOVING: DFRF Enterprises’ Figure Daniel Fernandes Rojo Filho Wanted By FBI; Arrest Warrant Issued; Feds Conducting ‘Border Watch’

    breakingnews7210th Update 10 a.m. EDT July 14 U.S.A. Daniel Fernandes Rojo Filho, the alleged operator of the $15 million DFRF Enterprises LLC Ponzi- and pyramid scheme sued civilly by the SEC in late June, has been charged criminally with wire fraud and is wanted by the FBI. An arrest warrant has been issued.

    Court filings show that the FBI was conducting a parallel criminal probe while the SEC was conducting its civil probe. The FBI filed a criminal complaint under seal on June 25, about five days before the SEC filed its civil complaint under seal.

    The SEC announced its civil action on July 2. The complaint tied TelexFree Ponzi- and pyramid figure Sann Rodrigues to Filho. In terms of victims, TelexFree may be the largest Ponzi- and pyramid scheme in U.S. history. Having potentially gathered $1.8 billion, TelexFree may be among the largest Ponzi schemes of all time.

    Filho, like Rodrigues, is a citizen of Brazil. Both men have used addresses in Massachusetts and Florida.

    Federal prosecutors from the office of U.S. Attorney Carmen M. Ortiz of the District of Massachusetts moved to unseal the criminal complaint on July 8. U.S. Magistrate Judge Jennifer C. Boal lifted the seal on the same day, making the wire-fraud complaint and arrest warrant against Filho a public record.

    In a July 10 filing, an SEC investigator said this (italics added):

    “I have had several conversations with an FBI agent involved in the investigation and the recently-filed criminal proceeding against defendant Filho. I have been informed that the FBI has been unable to execute the arrest warrant issued for defendant Filho in this matter and that the FBI currently considers defendant Filho a fugitive. (A process server retained by the Commission has made several unsuccessful attempts to serve Filho at his residence.) I have been informed that the FBI is actively searching for Filho and has initiated a border watch.”

    Filho is 47 and has an address in Orlando, Fla., according to an FBI affidavit. The SEC complaint gives his place of residence as Winter Garden, Fla., which Wikipedia says is 14 miles west of Orlando in Orange County.

    The FBI affidavit alleges the FBI has received complaints about him from multiple individuals and that Filho has at least two co-conspirators.

    At the same time, the affidavit alleges that DFRF opened “at least 19 bank accounts at different financial institutions” since 2014 and that Filho “is a signatory” on 17 of the 19 accounts.

    Much of the FBI information is similar to the SEC’s allegations against Filho.

    From the FBI affidavit (italics added):

    Among other things, FILHO and others acting at his direction falsely represented that DFRF owned and operated gold mines in Africa and South America, that any investors’ money was 100% insured, and investors could withdraw their principal investments at any time. FILHO never invested the money as promised; instead, FILHO used the money for other purposes, including his own personal and other business expenses.

    In its complaint last month, the SEC alleged that, “[s]ince June 2014, he has siphoned more than $6 million out of DFRF — approximately 40% of the total received from investors. This includes more than $1.8 million in cash withdrawals, approximately $1.8 million for personal expenses (including $500,000 for travel), and almost $2.5 million to acquire a fleet of luxury automobiles.”

    The SEC further alleged that Filho caused more than $310,000 to flow to Rodrigues. Rodrigues, who once claimed to have hauled $3 million out of TelexFree, is not referenced in the FBI affidavit.

    In December 2014, Filho issued a bad check for $10,000 to a DFRF investor, according to the FBI affidavit.

    NOTE: Our thanks to the ASD Updates Blog.

    See PP Blog follow-up story dated July 14 here. The story discusses Jeffrey A. Feldman, one of Filho’s co-defendants in the SEC case. Feldman has an address in Boca Raton, Fla.

    In 2010, the PP Blog reported that Filho was a figure in the alleged Evolution Market Group/Finanzas Forex fraud scheme in which money was traced to the narcotics trade.

  • RECEIVER: ‘No Comment’ On Report Zeek Rewards’ Figure Darryle Douglas Involved In New Scheme Known As ‘AuctionAttics’

    AuctionAttics logo.
    AuctionAttics logo.

    UPDATED 10:04 A.M. EDT JULY 18 U.S.A. The Zeek Rewards’ receivership this morning told the PP Blog it had “no comment” on a report that alleged Zeek insider Darryle Douglas was involved in a new scheme known as “AuctionAttics.”

    BehindMLM.com reported early yesterday that Douglas, who owes the Zeek estate $2.2 million plus postjudgment interest, was involved in the selling of shares in a purported “profit pool” offered by Auction Attics. The report led to immediate questions about whether Douglas, a Californian, was involved in another cross-border offering fraud and would market it to former Zeek members.

    Zeek is alleged by the SEC and federal prosecutors in the Western District of North Carolina to have been a Ponzi scheme that gathered hundreds of millions of dollars. The SEC filed civil charges in August 2012. Prosecutors have filed criminal charges against alleged operator Paul R. Burks and former executives Dawn Wright-Olivares and Daniel Olivares, her stepson.

    Wright-Olivares and Olivares entered guilty pleas to the criminal charges in February 2014. The criminal case against Burks is proceeding toward trial. Douglas was identified as a Zeek “insider” in a lawsuit filed by Zeek receiver Kenneth D. Bell in February 2014.

    AuctionAttics appears to be an upstart MLM “program” pitched on social-media sites such as Facebook. The “program” appears to be in prelaunch phase and to have a dotcom website that uses graphics that resemble Post-it brand notes, a trademark owned by 3M.

    A spokesperson for 3M did not immediately return a call by the PP Blog for comment on whether the company was concerned its trademark was being infringed by AuctionAttics.

    In 2014, Bell raised concerns about some MLMers/network marketers moving from one fraud scheme to another. Bell raised those concerns again in a June 2015 article in Business North Carolina.

    A snippet from the Business North Carolina story (italics added):

    “Some of these folks had been engaged in this kind of thing before, and frankly, some of our largest winners re-engaged in similar schemes right away.”

    Based on a victims’ count on the order of 800,000, Zeek likely is the largest or second-largest Ponzi scheme in U.S. history. (In the end, the TelexFree scheme shut down by the SEC and federal prosecutors last year may take the title, but the final numbers are unclear.)

    Zeek was a purported “penny auction.” AuctionAttics appears to be using a similar theme, amid suggestions that its customers can be both bidders and sellers who will generate enormous personal profits either way.

    The AuctionAttics website appears to be publishing testimonials attributed to people who were big winners, despite the fact the “program” appears not even to have launched.

    One of the testimonials quotes “Maria” as saying, “I can earn much more selling on Auction Attics than i [sic] could anywhere else.” The “program” itself claims “Maria didn’t have a store front, she sold reconditioned cell phones exclusively on Auction Attics and earned up to 500% profit.”

    Another “program” claim: “Micheal [sic?] and Brenda buys [sic] items, and then sells [sic] them on Auction Attics. They have the potential to earn $1,000’s weekly!”

    “Micheal” and Brenda, meanwhile, are quoted as saying, “What a business, we love it.”

    The images depicting them appear to be clipart.

    An “opportunity” page on the site of AuctionAttics positions the “program” as the next Apple, Instagram and eBay. Namedropping is a common theme in MLM/network-marketing scams.

    Among other things, the website of Auction Attics purports to sell “Cover Ads,” explaining them in this fashion:

    “Cover ads are so called because they cover more than the original cost of your item even when it was new.”

    In July 2014, according to court filings, Zeek’s Burks, Wright-Olivares and Olivares agreed to a $600 million civil consent judgment with the receivership “to be satisfied with substantially all of their assets.”

    Burks settled with the SEC in 2012, and Wright-Olivares and Olivares settled in 2013.

  • U.S. Attorney General Issues Statement On Escape From Mexican Prison By Joaquín Guzmán Loera; Reputed Narcotics Kingpin Known As ‘El Chapo’ Reportedly Ducked Through Tunnel

    In an extraordinary statement issued on a Sunday, U.S. Attorney General Loretta E. Lynch said “[t]he U.S. government stands ready to work with our Mexican partners to provide any assistance that may help support his swift recapture.”

    The reference was to reputed Mexican druglord Joaquin Guzman Loera, known as “El Chapo.” News broke earlier today that Guzman had escaped from a prison about 55 miles outside Mexico City, reportedly by tunneling out.

    Here is the full statement by Lynch (italics added):

    “We share the government of Mexico’s concern regarding the escape of Joaquin Guzman Loera ‘Chapo’ from a Mexican prison. In addition to his crimes in Mexico, he faces multiple drug trafficking and organized crime charges in the United States.

    “The U.S. government stands ready to work with our Mexican partners to provide any assistance that may help support his swift recapture.”

    The escape triggered an international media sensation, with publications across the globe covering the sudden disappearance of the leader of the Sinaloa cartel.

    Guzman initially escaped in 2001, but was recaptured last year. His latest escape is leading to fears he’ll soon be back at the helm of the murderous cartel and create even more international problems for Mexico’s government, which has been unable to contain him. As the PP Blog noted in 2014, Forbes magazine once described him as a billionaire and as one of the world’s most powerful people.

    A sampling of current coverage of the escape:

    New York Times.

    ABC News.

    Toronto Sun, via Reuters.

    Bangkok Post, via AFP.

    Jakarta Post, via AP.

     

     

     

  • BULLETIN: $1.5 Billion Ponzi Alleged In Nevada

    breakingnews72BULLETIN: (5th Update 12:54 a.m. EDT July 9 U.S.A.) Three individuals have been indicted on multiple criminal charges in Nevada, with a grand jury alleging they were at the helm of a $1.5 billion Ponzi scheme targeted at Japanese victims. The criminal case follows a civil action filed by the SEC in 2013.

    Charged with eight counts of mail fraud and nine counts of wire fraud were Edwin Fujinaga, 68, of Las Vegas; Junzo Suzuki, 66, of Tokyo; and Paul Suzuki, 36, of Tokyo, the U.S. Department of Justice said. Fujinaga also is charged with three counts of money laundering.

    All of the defendants were associated with a company known as MRI International Inc. (MRI). The FBI led the criminal probe.

    The news may create consternation among cross-border scammers who venture into the United States to hatch fraud schemes.

    “The defendants allegedly preyed on thousands of unsuspecting Japanese victims to enrich themselves by operating a billion-plus dollar Ponzi scheme,” said Assistant Attorney General Leslie R. Caldwell. “This prosecution shows that the Criminal Division will pursue not only those who victimize American citizens, but also those who use the U.S. as a home base to defraud victims abroad.”

    As the PP Blog reported in 2013 (italics added):

    Part of the scam featured “tours” of MRI’s offices in Las Vegas. The alleged scam is evoking images of Bernard Madoff’s colossal Ponzi scheme, in the sense it appears to have gone undetected for years.

    At the same time, the alleged Fujinaga/MRI fraud is reminiscent of the epic Trevor Cook Ponzi scheme in Minnesota, in the sense that investors appear to have been lulled into a false sense of security because the company had a physical presence. It is somewhat common for fraudsters to tout a brick-and-mortar presence as “proof” no fraud scheme is occurring, even though case after case has demonstrated that the frauds may be buried deep inside an enterprise that at first glance appears to be legitimate.

    “These defendants are accused of using a Nevada corporation to conduct their $1.5 billion fraud scheme and falsely telling thousands of overseas victims that their investments would be safely held and managed by an independent, third-party escrow agent in Nevada,” said U.S. Attorney Daniel G. Bogden of the District of Nevada  “Fraudulent ruses and schemes perpetrated by Nevadans using Nevada corporations and entities will continue to be addressed by this office.”

    From a statement by the Justice Department (italics added):

    MRI purportedly specialized in “factoring,” whereby the company purchased accounts receivable from medical providers at a discount, and then attempted to recover the entire amount, or at least more than the discounted amount, from the debtor.

    According to allegations in the indictment, from at least 2009 to 2013, Fujinaga and the Suzukis fraudulently solicited investments from thousands of Japanese residents, and MRI currently owes investors over $1.5 billion.  Specifically, the indictment alleges that Fujinaga and the Suzukis promised investors a series of interest payments that would accrue over the life of the investment and that would be paid out along with the face value of the investment at the conclusion of the investments’ duration.  The defendants allegedly solicited investments by, among other things, promising investors that their investments would be used only for the purchase of medical accounts receivable (MARS) and by representing that investors funds would be managed and safeguarded by an independent third-party escrow company.

    The indictment further alleges that MRI operated as a Ponzi scheme, wherein the defendants used new investors’ money to pay prior investors’ maturing investments.  According to the indictment, the defendants also allegedly used investors’ funds for purposes other than the purchase of MARS, including paying themselves sales commissions, subsidizing gambling habits, funding personal travel by private jet, and other personal expenses.

    In January 2015, the SEC said a final judgment from its 2013 civil case “requires Fujinaga and MRI to pay more than $580 million.”

  • FLASH: Trading Halted On New York Stock Exchange Floor

    EDITOR’S NOTE: 3:13 p.m. NYSE has announced trading has resumed. Outage lasted more than three hours. Earlier brief below . . .

    **____________________**

    FLASH: (4th Update 1:01 p.m. EDT U.S.A.) The New York Stock Exchange floor has halted trading, according to an 11:51 a.m. (EDT) message on its status page.

    “NYSE/NYSE MKT has temporarily suspended trading in all symbols,” the message reads in part. “All open orders will be cancelled. Additional information will follow as soon as possible.”

    NYSE Tweets say the halt is attributable to “a technical issue.” A cyber breach is not responsible, the exchange said.

    From CNBC: “It’s been a little bit of a bumpy day. We had some technical problems even before the opening,” said Art Cashin, director of floor operations at the NYSE, in a CNBC interview.”

    In a 12:01 p.m. message, the NYSE said, “NYSE Arca and NYSE Amex/Arca Options are unaffected by this issue and continue normal operations at this time.”

    The Dow Jones Industrial Average was down more than 213 points at 12:13 p.m.

    Just prior to 1 p.m., the SEC Tweeted this: