A Florida man has been arrested by the FBI on 21 counts of wire fraud amid allegations he operated a forex Ponzi scheme, collecting more than $10.2 million and pocketing $1 million for himself.
The announcement of the arrest of Patrick H. Rakotonanahary, 34, of Punta Gorda, Fla., was made in Hawaii after a joint probe by the FBI, the Commodity Futures Trading Commission (CFTC), and the State of Hawaii Department of Commerce and Consumer Affairs (DCCA).
His arrest was credited to a joint investigation by the agencies, which operated under the umbrella of the Interagency Financial Fraud Enforcement Task Force, the FBI said.
President Obama formed the task force in November.
“[I]nstead of using investor money to engage in Forex trading, Rakotonanahary primarily paid investment returns to earlier investors with investment funds from later investors as part of a ‘Ponzi scheme,’ using only about $1,864,000 for Forex trading, which generated losses of $814,806,” the FBI said. “Rakotonanahary used approximately $8,375,703 to pay investment returns and another $1 million personally.”
Most of Rakotonanahary’s 100 investors hailed from Hawaii, the FBI said.
Separately, CFTC announced yet another Ponzi case — this one in North Carolina.
The agency charged Dennis Todd Hagemann and Yellowstone Partners Inc., both of Raleigh, with operating a forex Ponzi scheme involving the fraudulent solicitation of at least $700,000 from at least nine individuals.
Hagemann was arrested and jailed by North Carolina state authorities.
In yet another bizarre Ponzi twist, CFTC said Hagemann purported to have a tie to former Russian Federation President Boris Yeltsin.
Hagemann failed to inform a potential investor “that Mr. Yeltsin is deceased, and was deceased at the time he made the representation,” CFTC said.
UPDATED 4:32 P.M. EDT (U.S.A.) A video Narc That Car promoters may rent for $12.95 a month and a onetime set-up fee of $15 through a third-party provider demonizes a fantasy deadbeat named “Rena the Realtor” for stiffing a bank on her car loan and says some members of the multilevel-marking company are making more money than the President of the United States.
Narc That’s Car’s name is not mentioned in the video, which does not name the NTC reps out-earning the President.
“Rena” is depicted as an attractive, sweet-faced young woman with blue eyes and perfect teeth. She buys a car to impress her real-estate clients, makes payments for a couple of months — and then misses three payments in a row and hides the car to save herself from the repo man.
The video depicts a glum-faced collection agent who had no luck getting “Rena” to cough up her payments, and it becomes time for the bank to dispatch the repo man. But where to start searching?
Thanks to a Narc That Car member named “John,” who is depicted as having the bearing of a plainclothes cop and happens to write down Rena’s license-plate number as he exits a hair salon a few doors away from the gym at which “Rena” works out, the information is entered in the NTC database.
Through a process that the video does not make clear, it is established that “Rena” works out at the gym every day at 7 p.m.
This sets the stage for the repo company to snatch the car. The video shows a car (presumably Rena’s) being hauled off by a repo truck — a successful conclusion from the lender’s point of view, but a stinging defeat for “Rena the Realtor,” who didn’t make her car payments but still had the money to stay toned by working out at the gym.
The video displays scores of cars backed up during Rush Hour — each one of them with a dollar sign superimposed. The video also implies that an NTC sponsor will give prospects their first 10 plate numbers to enter into the system — if the prospect does not have time to get 10 on his or her own.
How the data can be validated if a sponsor provides the plate numbers is not made clear in the video. Such an approach would mean that the prospect would have to accept as truth the address at which the sponsor said the car was sighted, since the prospect neither saw the car nor recorded the plate number.
Also unclear was whether the sponsor could share the same 10 plate numbers with other incoming prospects and perhaps simply instruct them to enter a fabricated address at which the plate was sighted.
“Either contact your sponsor, who will provide you with your first 10 plates to enter into the system, or you can do it yourself,” the narrator says.
And the narrator said a handsome wage is possible:
“Several people saw this opportunity and dropped everything they were doing on the spot,” the narrator says. “Ninety days later, they’re making more money than the President — and without the stress.”
The video displays a picture of the White House, the official residence of the President and the office from which he makes $400,000 a year, and has an expense account of about $169,000. The video does not say how much the President makes.
The video’s ending was a little flat — a businessman was depicted walking on a tightrope, and another businessman (presumptively) with a briefcase was pictured falling into a safety net.
It might have made for a better ending had “Rena the Realtor” redeemed herself by deciding to join NTC after her car was repossessed — as a means of making sure nothing like that ever could happen again.
Then again, how could she? Deadbeat “Rena,” her blond hair, blue eyes and perfect smile notwithstanding, no longer had a car, no way to get to work, no way to get to the gym to record plate numbers.
Too bad. The parking lot in front of the gym and the hair salon could have been a wonderful place to record numbers every night at 7Â — and perhaps the next time around she could have returned the favor by getting “John’s” plate for NTC.
Who knows if the repo man — or someone else — might one day have benefited from knowing where John got his hair cut?
See the news release dated today with the video attached. The video appears to have been produced by this site, which says it has done promotional work for teams and companies such as Ad Surf Daily, AdGateWorld, BizAdSplash.Ad-ventures4U, TVI Express and Global Verge/Buzzirk Mobile, among others.
It entered the autosurf world in January 2009 with the stern bang of a drum in a promotional video. The message was dire: “The World Is In Crisis,” it warned. “Turn On The News, And You’ll See. The Stock Market Is At A Record Low. Foreclosures Are At An All-Time High. Thousand’s (sic) Are Losing Their Jobs. Banks Are Closing. There Has To Be A Solution!”
The dire bang of the drum faded, replaced by a riff from an organ. The riff grew frantic, building toward a crescendo. The video never said the tones were from a 1999 work by Fatboy Slim: “Right Here, Right Now.”
Messages flashed in front of viewers’ eyes for more than a minute before the video announced the company’s name — BizAdSplash — and positioned the surf as the cure for all the economic misery in the world.
“Biz Ad Splash Has The Answer,” it said. “The Plan Is Simple. Advertise Your Business, A Product Or Service, Introduce Others To The Value Of Advertising. View A Few Ads For A Few Minutes A Day. Earn Profits. It’s That Simple!”
Except it wasn’t, of course.
BizAdSplash, whose “chief consultant” Clarence Busby was implicated by the U.S. Secret Service in the AdSurfDaily Ponzi scheme probe as the operator of Golden Panda Ad Builder, was in the throes of death out of the gate. The company started out by promoting its offshore location; its servers resolved to Panama.
Payments slowed, then vanished. The site appeared, then disappeared, then reappeared. Even as BizAdSpash was in the throes of death, Busby talked about how “excited” he was — and how “excited” members who were not getting paid should be.
The site disappeared again over 2009’s Christmas holiday and into the new year. It then reappeared. In late January, members said they received a platitude-filled note from Busby that BizAdSplash had tanked.
“Now what about the future?†the email said. “No matter what, there is a future. There are many things on the Internet that will help you in this future, so don’t give up. Make the effort and success is just right around the corner. May your life be full of faith, hope and love. This is where you will find your best rewards. May God bless you all!â€
Busby’s name appeared at the bottom of the email, which carried a business address of Acworth, Ga. The surf came to life in the wake of the seizure of tens of millions of dollars from AdSurfDaily Inc. and Golden Panda Ad Builder. Busby is the former president of Golden Panda, which ceded more than $14 million to the government in the ASD/Golden Panda case.
Known for syrupy communications, Busby described the BAS staff as “sad,†according to the January email.
“Our staff has been sad, not just because of losing a job, but because they have developed friendships with many of you and are very sad to ‘break up the party,’†the email said. “With anything that has had life, it is very sad to have that life taken away.â€
Busby was identified in the email as the owner of BAS. In earlier communications, he was identified as “chief consultant.†It was not immediately clear how he purportedly had ascended from consulting work to ownership.
The site remained online. It now has vanished, however, and has been resolving to a blank page for at least three days. (It might have disappeared earlier.) The site’s server signature is in the United States.
Now, it seems, the death dance is complete — offshore to onshore, and a fade to nothing but white.
But the Biz Ad Splash video, the dire beat of the drum and Fatboy Slim’s pulsating tones remain on YouTube: It’s just that there no longer is anything to sell.
Busby’s simple cure for the world’s economic ills — clicking on ads and introducing others to click on ads — did not work. The extent of Biz Ad Splash member losses is unclear.
Busby, who used the title “Rev.†at least 120 times in a court filing involving Golden Panda last year, was implicated by the SEC in three prime-bank schemes in the 1990s, according to records.
UPDATED 5:14 P.M. EDT (U.S.A.) The database being built by affiliates of Narc That Car (NTC) will not be used solely for the purpose of locating cars for seizure by the repo man, according to a recording of a March 11 conference call by the company.
The database, according to the recording, also is envisioned as a means of locating people, meaning it could be used to develop a data map that can plot the movement of citizens by tracking sightings of the license plates of their cars. The announcement of NTC’s plans may trigger even more concern about privacy and legal issues because citizens may not know their plate numbers are being recorded by a private business and entered in a database that tracks movement of cars.
NTC does not publish a list of data clients. The company says it is expanding internationally, which raises the possibility that overseas data clients could track the movement of U.S. citizens, as well as citizens of other countries. Meanwhile, NTC provides only threadbare details about its management team while collecting millions of dollars from participants.
Absent transparent controls, such a data tool conceivably could be used by spy agencies and secret clients, nationally and internationally, as a means of monitoring the behavioral patterns of individuals, including persons who hold sensitive jobs in government, science and industry, as well as the behavioral patterns of individuals such as politicians, candidates for offices, judges and their family members — and people of all stripes, regardless of occupation.
NTC does not describe how it screens data clients, and also has announced a new name change — the third name the company will use this year alone.
“What we want to become is the biggest company in the world for locating one individual item,” a speaker on the call said. It is believed the speaker was CEO William Forester.
“That could be a car, boat, person, child — anything you could possibly imagine,” the speaker said. “That’s what we’re building this database for.”
No Paid Clients From Law Enforcement
The speaker confirmed that NTC has no paying clients from law enforcement, saying the company would provide data to police agencies “for free” as a “service to the community.”
“We’re not charging local law enforcement; law enforcement — any law enforcement — is not a customer of ours,” the speaker said. The confirmation that NTC had no paid law-enforcement clients leads to questions about the company’s ability to attract clients outside of law enforcement in sufficient quantity to mute concerns about how it pays affiliates and whether the firm was using a pyramid or Ponzi model to pay participants who harvest license-plate data.
The confirmation also destroyed claims from individual NTC affiliates that the company had an existing stable of law enforcement clients such as the FBI, the U.S. Department of Homeland Security and the military — and was part of the federally operated AMBER Alert program.
Such claims appeared in promoters’ ads for weeks, leading to questions about whether NTC had come into possession of money based on false, misleading or confusing claims by its army of promoters — and whether NTC’s own vague claims led to the dubious claims of its affiliates.
The speaker said NTC had “over 34,000” members, was expanding “very, very rapidly” and had paid out “over several million dollars” in bonuses and commissions. He added that the company was integrated with Code Amber.
Code Amber is an entity that publishes AMBER Alerts and makes available a website ticker for others to publicize alerts, but is not the AMBER Alert program itself. The AMBER Alert program is administered by the U.S. Department of Justice and the National Center for Missing & Exploited Children, both of which said last month that they are not affiliated with NTC, despite the claims of promoters.
An Ohio man who promotes NTC on a Blog known as Cash For Car Plates announced the name change on his Blog last week.
“Narc Technologies/Narc That Car is now Crowd Sourcing International,” wrote Ajamu Kafele.
No announcement of a name change appears on NTC’s website.
But an NTC audio (the source of the quotes above) is accessible from a website titled CrowdSourcingWealth.com operated by Kafele, who uses the nickname “Jah” to promote the company. The audio, which Kafele described as an excerpt of remarks by the “CEO,” suggests the name change is official and that NTC will begin to use the initials CSI.
Indeed, a speaker says in the call, “We’re gonna change our name to Crowd Sourcing International — that’s right, for short, CSI.”
The CrowdSourcingWealth.com domain was registered in Kafele’s name March 12, one day after the NTC conference call. A similar domain name that references NTC — CrowdSourcingPower.com — was registered in California Jan. 27. Like Kafele’s domain, the CrowdSourcingPower domain appears to be an NTC affiliate site that is a work-in-progress.
NTC appears to have arrived at the conclusion that tying the company’s brand to the catch phrase crowdsourcing — which describes a method of accomplishing a task using large numbers of people and is controversial as an economic and scientific approach because it may drive down wages and lead to flawed and uneven results — would resonate with NTC members.
“The main goal of NarcThatCar is to us (sic) the Power of CrowdSourcing to develop the largest database of it’s (sic) kind,” the CrowdSourcingPower.com site says. “Working together with Amber Alert and other organizations we can help to locate the known vehicles that may be involved in the abduction of children.”
“CSI” is an acronym used by law enforcement that stands for “Crime Scene Investigation.” It also is the title of a crime drama on the CBS television network. If the name change is official, Crowd Sourcing International will become the third name NTC and its corporate parent have operated under this year.
The use of the CSI name as an acronym also could set the stage for NTC affiliates again to leech off the brands of famous entities by tying NTC to companies or entities that have no affiliation with the firm.
NTC affiliates have demonstrated a desire to link the program to the names or the intellectual property of famous entities, including government entities. At least one NTC affiliate registered a domain titled AmberAlertHelp. org, using it as an affiliate site for NTC. Another affiliate used a takeoff of the ToysRUs brand to promote NTC.
Kafele has recorded check-waving videos to promote NTC and has said repping for the firm was like working for the U.S. Census Bureau.
The announcement about the name change, Kafele said, was based on a “company wide” announcement NTC made during a March 11 conference call. Why the announcement does not appear on the NTC website was not immediately clear.
Company VP To Explain Vision
Meanwhile, NTC has identified Rene Couch as its vice president of marketing. No biographical
Narc That Car says VP Rene Couch will share his vision for the company.
information on Couch was provided on NTC’s website, which said Couch will “share his vision” of the company at a meeting March 23 in Oklahoma City. The audio accessible from Kafele’s website includes comments from a male speaker who used the name Rene.
A man by the same name with the middle initial of “L” was charged civilly by the Arizona Corporation Commission (ACC) with selling unregistered securities and misappropriating investors’ funds in a complex case involving real-estate promissory notes.
It is unclear if NTC’s Rene Couch is the Rene L. Couch referenced in the ACC complaint.
A call to NTC by the PP Blog was answered by an auto-attendant. A message said the office was closed. There was not an option for a caller to leave a message. The Blog verified there was no option to leave a message by placing a second call to the number. As was the case with the first call, the auto-attendant simply hung up.
In 2005, after a finding that Rene L. Couch and entities he controlled had made “untrue statements or misleading omissions of material facts, and or . . . [engaged] in transactions, practices or courses of business which operate or would operate as a fraud or deceit upon investors,” ACC issued an order to cease and desist from unlawful conduct.
Rene L. Couch and the entities further were ordered to disgorge “$549,085 plus interest at the rate of 10% per annum” to investors. In filings in the case, Rene L. Couch was described as the owner of a “personal nutritional supplement business known as Infinity 2.” Rene L. Couch consented to the order, according to case filings.
Rene L. Couch was accused in the Arizona case of using investor funds in the real-estate venture for “various undisclosed purposes” and diverting investor funds to the Infinity 2 supplement business. Infinity 2 was described in documents external to the case as a multilevel-marketing company.
The filings in the ACC case are public records.
Other Arizona public records show that Rene L. Couch was a party in a Family Court dispute in Maricopa County over back child support and unreimbursed medical expenses between April 1, 2006 and May 31, 2009. Records published on an Arizona court site show that one of the parties was ordered to pay $65,895 in back support, plus an additional $8,472 in unreimbursed expenses.
Repayment terms in the support case were set at $550 a month, according to records. The party ordered to pay the back support was not clear from court filings, and the case still appears to be in litigation. The PP Blog was unable to contact NTC to clarify whether the Rene Couch referenced as its vice president was the Rene L. Couch referenced in the Arizona documents.
In February, NBC-5 of Dallas/Fort Worth reported it repeatedly was unable to reach NTC by telephone to answer questions for a story.
“Repeatedly, NBCDFW worked through a phone tree, only to reach a recording that said, ‘Sorry, this mailbox is full and cannot accept any more recordings. Thank you for using the voice mail system. Goodbye,” the station reported of its efforts to navigate NTC’s phone tree.
NBC-5 further reported that it sent a reporter to the company’s office, and was met by a man who identified himself as the operations manager.
“He said company phones are busy because Narc Technologies has more than 20,000 participants,” the station reported. “He declined to answer any other questions and said the company’s CEO would call us back, but we have received no return calls.”
Timing Of Name-Change Announcement
The timing of the name-change announcement coincides with a negative rating NTC received from the Better Business Bureau. The BBB branch in Dallas gave Narc That Car a rating of “F” on March 4. The “F” rating is the BBB’s lowest on a 14-point scale that begins with “A+” as the highest possible score. The announcement of the name change occurred March 11, a week after the BBB issued the company an “F.”
Three versions of domains using the phrase CrowdSourcingInternational — a .com version, a .net version and a .org version — were registered behind a proxy Feb. 4. All three domains resolve to a parked page that shows advertisements.
It was not immediately clear if the domains are connected to NarcThatCar. If they are, the domains were registered 17 days after the BBB opened an inquiry into Narc That Car amid pyramid concerns. On the previous day — Feb. 3 — the district attorney of Henderson County, Texas, also opened an inquiry. In a statement last month, the district attorney said he was consulting with Texas Attorney General Greg Abbott in the case.
Less than a month earlier, on Jan. 12, a corporation named National Automotive Record Centre Inc. filed papers to incorporate in Nevada. Kafele produced a YouTube video March 1 that showed affiliate payments from National Automotive Record Centre Inc. for NTC earnings.
An earlier video by Kafele showed a payment coming from Narc Technologies Inc., another company associated with the NTC brand. Both videos were made private on YouTube after the PP Blog reported that Kafele claimed in the video that working for NTC was like working for the U.S. Census Bureau, a division of the U.S. Department of Commerce.
NTC is not a government entity. Its affiliates are deemed “independent consultants” by the company. Regardless, advertisements by NTC promoters have implied or stated directly that NTC was associated with the government, including the federally operated AMBER Alert program and even the U.S. Department of Homeland Security.
Kafele was toiling with NTC critics on Scam.com a day after the name-change announcement. Among other things, he asserted that “Whip,” a poster on the PP Blog, and PP were one in the same.
The claim is false, but follows a general pattern of claims about the PP Blog, which frequently becomes the target of fanciful theories and criticism from supporters of companies the Blog is writing about.
The Ohio Supreme Court ruled in 2006 that Kafele had engaged in the unauthorized practice of law in a banking and mortgage-foreclosure case involving a third party, and assessed him a $1,000 civil penalty. Kafele and others have made sweeping statements that license-plate numbers are “public information” available for the taking to be entered by affiliates in the NTC database.
“This is how simple this business is, folks,†he said in the video, as a camera panned around the Giant Eagle parking lot and captured one car after another in video frames.
“I’m not even going to talk to anybody,†he said. He noted that “I’m just going to jot down some public information of the license plates. That’s the way this works.â€
At Scam.com, Kafele also suggested that the PP Blog “lied about our company not being affiliated with Code Amber, in an attempt to discredit us.”
That claim, too, is untrue. The PP Blog never asserted NTC had no relationship with Code Amber. The Blog reported that the U.S. Department of Justice denied that the federally managed AMBER Alert program, which NTC referenced in a promotional video, had any affiliation with NTC.
NTC removed the AMBER Alert reference from the video after the Justice Department’s denial.
Kafele also has defended NTC by attacking the credibility of the BBB and dismissing critics as “naysayers” and “haters.”
The PP Blog reads Scam.com, but does not post there — under any identity. The Blog even has been called a scam on Scam.com by a poster who was banned from the Blog for abusing its Comments function and, later, sending dozens of communications under multiple identities that were designed to harass the Blog and probe its software systems for vulnerabilities.
The poster, who was banned from Scam.com for posting under multiple identities, later threatened to sue the PP Blog.
Dollar value (in millions) of fraud referred for investigation by IC3 between 2007 and 2009. Source: IC3 2009 Internet Crime Report.
Welcome to the rapidly evolving world of Planet Fraud, U.S. Region — or, more precisely, the U.S. Region of Planet Cyberfraud, the electronic web of deceit that often exists out of view and is sucking wealth at an alarming pace.
Its capitals last year, according to a new report from The Internet Crime Complaint Center (IC3), included California, Florida, New York, Texas, Washington and the District of Columbia, with cyberfraud — viewed on a per-capita basis — particularly concentrated in D.C., Nevada, Washington, Montana, Utah and Florida.
People who complained about fraud — and the fraudsters they complained about — most often did not live in the same state. Complainants often weren’t able to identify the state in which a fraudster resided, according to the report.
Countries mentioned in the IC3 report include the United States, United Kingdom, Nigeria, Canada, Malaysia and Ghana. The report focuses on reports to IC3’s website, which operates in the United States.
Highest, per-capita concentration of cyerfraud in the United States in 2009. Source: IC3 2009 Internet Crime Report.
Not even law enforcement was immune from attacks by cybercriminals. The most common complaint that IC3 received last year was about an email scam in which the perpetrators used the name of the FBI — one of the world’s premier police agencies — “in an effort to gain information from the target,” IC3 said.
IC3 is a partnership between the FBI and the National White Collar Crime Center (NW3C).
“The figures contained in this report indicate that criminals are continuing to take full advantage of the anonymity afforded them by the Internet,” said NW3C Director Donald Brackman. “They are also developing increasingly sophisticated means of defrauding unsuspecting consumers. Internet crime is evolving in ways we couldn’t have imagined just five years ago.â€
IC3 placed the dollar losses in cases it referred for investigation last year at $559.7 million, up more than double from 2008’s figure of $264.6 million. The number of complaints in 2009 surged to 336,655, up 22.3 percent from 2008’s total of 275,284.
Peter Trahon, section chief of the FBI’s Cyber Division, reissued the age-old warning:
“[I]f something seems too good to be true, it likely is,†Trahon said. He added that computer users should ensure they have “up-to-date security protection on their devices and evaluate e-mail solicitations they receive with a healthy skepticism.”
Why? Various appeals for money and various rogue attempts to corrupt computers by installing unwanted software and malicious code, including misery delivered by fake pop-up ads that “directed [victims] to purchase anti-virus software to repair their computers.”
In some instances this resulted in viruses, Trojans, or key loggers being downloaded onto victims’ computers, IC3 said.
Some highlights of the report:
In 2009, IC3 received several complaints presenting a new spin on the media coined “Hitman Scam,†a type of email extortion scheme. Victims are reportedly being threatened in an attempt to extort money. The victim receives an email from a member of an organization such as the “Ishmael Ghost Islamic Group.â€
One of the components of crime committed via the Internet that makes investigation and prosecution difficult is that the offender and victim may be located anywhere in the world. This is a unique characteristic not found with “traditional†crime.
Another popular scam of 2009 involved unsolicited calls regarding fraudulent “government stimulus money.†IC3 received numerous complaints from victims receiving unsolicited telephone calls with a recorded message. The recorded voice message reportedly sounds very much like President Barrack Obama discussing alleged government funds available for those who apply.
IC3 received numerous complaints about work-at-home scams and survey scams related to online job sites.
Of the complaints involving financial harm that were referred to law enforcement, the highest median dollar losses were found among investment fraud ($3,200), overpayment fraud ($2,500), and advance fee fraud ($1,500).
UPDATED 2:24 P.M. ET (U.S.A.) If you’re wanting to visit Steve Renner’s INetGlobal.com and AdPacs.com sites, at the moment you’ll land on pages that say “InetGlobal is currently down for maintenance. We’ll to (sic) be back by 12:00pm CST.”
The message on InetGlobal.com and AdPacs.com has been in place for at least three hours and, despite the fact the INetGlobal and AdPacs sites suggested they would be back up by noon Central Standard Time, that time has passed by more than an hour — and the sites still are down.
Why the Renner sites are down is unclear.
UPDATE 2:24 P.M. The message on the site now has been changed to read, “InetGlobal is currently down for maintenance. We’ll to (sic) be back by 12:00am CST on Saturday, March 13th.”
Another Renner site — Acesse.com, a search engine the U.S. Secret Service said last month was just a link to another search engine — appears to have limited functionality. It is possible to perform a search on the site and glean results, but several links on the site appear to have no functionality.
The links are titled Images, Videos, Maps, News and Shopping, and appear in the upper-left corner of the Acesse.com site. The links appear to be dead. At the same time, other links that appear on the site — links that point to other Renner sites such as Adpacs.com and INetGlobal.com — are generating the “down for maintenance” message.
Another link on Acesse.com titled “Top Searches” resolves to a page that says, “Top searches as of Tuesday December 2nd 2008 00:00:00 CST.”
It was not immediately clear if the dead links at Acesse.com were caused by code that had been
Part of the maintenance message at INetGlobal and AdPacs.
removed to disable the links or code that had not been entered.
The error message at INetGlobal and AdPacs appears under INetGlobal’s logo, and a headline that reads, “Preparing for bigger waves!” Two men are pictured riding a wave on surf boards, and a subhead reads, “Surf Alert.”
Acesse.com purports to include a “Get Paid To Search The Web” element through the search engine.
In a court affidavit last month, the U.S. Secret Service said Renner was at the head of an international Ponzi scheme.
An individual or group of individuals believed to be operating internationally created a website that mimicked the website of the U.S. Securities Investor Protection Corp. (SIPC) “in an apparent attempt to target [Bernard] Madoff victims” in a fraud scheme, SIPC said.
SIPC and the SEC issued warnings immediately, as did the court-appointed receiver in the alleged Trevor Cook/Pat Kiley Ponzi scheme in Minnesota. There is no suggestion that a similar effort is under way by con artists to fleece Cook/Kiley investors, but R.J. Zayed, the receiver in the Cook/Kiley case brought by the SEC and the CFTC, urged Cook/Kiley investors to pay attention.
“You should use caution when giving personal information to third parties,” Zayed said on the receivership website. “Before giving anyone your information you should verify that the agency you are communicating with exists and that the individual (or system) purporting to represent that agency actually does so.”
SIPC maintains a special reserve fund mandated by Congress to protect the customers of insolvent brokerage firms such as Madoff’s. A scam site appeared online that used SIPC’s initials in its name, preceded by the letter “I” and a hypen, to form the domain name “I-SIPC.com.”
The site purported to be the “International Securities Investor Protection Corporation.”
Visitors to the bogus domain were told that the purported organization “collaborated with Interpol to recover $1.3 billion in Madoff money from a hideout in Malaysia,” SIPC said.
Meanwhile, visitors were shown “a photo of a huge stack of U.S. currency,” SIPC said, noting a bogus “testimonial” from a purported Madoff victim who was happy with the fraudulent entity appeared on the site.
The I-SIPC.com domain listed a registration address in Nigeria and was registered on Aug. 20, 2009, according to the registration data. It is unclear if the site was registered by a Nigerian or a person posing as a Nigerian. The site appears to be using shared hosting with 597 other domains on the same server, according to web records.
Nigeria has an international reputation for online fraud, and some scammers — recognizing Nigeria’s reputation — have posed as Nigerians to perpetrate fraud and to cover their tracks. Such scammers could be located anywhere in the world.
For its part, the SEC called the I-SIPC.com site a “fictitious entity.”
“The ‘ISIPC’ Web site bears a certain likeness to the Securities Investor Protection Corporation’s (SIPC) Web site, mimicking its look, feel, and content in an attempt to achieve an aura of authenticity with Madoff victims,” the SEC said. “The ‘ISPIC’ Web site claims to partner with several governments including the United States, and links to actual government Web sites to signify an affiliation. ‘ISIPC’ also falsely claims to be sponsored by the United Nations, the International Monetary Fund, and the World Bank.”
SIPC said it was investigating misuse of its trademark and “will seek to have the violator prosecuted to the extent the law allows.”
“We know from information provided to us by individuals that this bogus group is already attempting to obtain funds and confidential financial information from investors in the U.S.,” said SIPC President Stephen Harbeck.
“SIPC wants to be as clear as possible that Madoff victims and other investors should not share any personal financial information via this Web site or rely upon it as an information source. We intend to use every available means to shut down this illicit operation.”
The bogus site now is loading a message that says, “THIS SITE IS TEMPORALLY CLOSED.”
“Investors who lose money in widely publicized schemes are often targeted by con artists looking to cash in on the victim’s desire to recover losses,” said Lori Schock, director of the SEC’s Office of Investor Education and Advocacy. “Victims of fraudulent schemes should be aware that such refund schemes commonly exist, and can be perpetrated through copycat Web sites that appear similar to those of actual regulators or other organizations.”
Screen shot: From Exhibit 1 in FTC case against LifeLock, whose CEO, Todd Davis, appeared in ads that published his Social Security number to demonstrate his confidence in the company's services. (The PP Blog added the red highlight. Court filings obscure the number, which LifeLock published openly while prompting customers of its $10-a-month service to "Always protect your social security number. Do not share it unless necessary.")
LifeLock Inc. and its principals have been barred from making deceptive claims and required to take more stringent measures to safeguard the personal information collected from customers, the FTC said.
The FTC charged LifeLock and its co-founders — CEO Richard Todd Davis and former COO Robert J. Maynard Jr. — in the civil case. The case, which has been settled in U.S. District Court for the District of Arizona, alleged that LifeLock “used false claims to promote its identity theft protection services” and “made claims about its own data security that were not true.”
LifeLock agreed to pay $12 million to settle the case, which the FTC described as “one of the largest FTC-state coordinated settlements on record.” The company, Davis and Maynard settled without admitting the allegations were true.
“While LifeLock promised consumers complete protection against all types of identity theft, in truth, the protection it actually provided left enough holes that you could drive a truck through it,†said FTC Chairman Jon Leibowitz.
LifeLock said it welcomed the settlement.
“LifeLock is pleased with this agreement, which, for the very first time, works to set advertising guidelines for the entire industry,” said LifeLock Chairman and CEO Todd Davis. “We welcome federal and state efforts to regulate our industry, because doing so helps to protect consumers from the risks of identity theft.”
In court filings, the FTC said LifeLock did not take adequate steps to protect data it collected from customers — even though Davis appeared in ads that published his own Social Security number to demonstrate his confidence in the company’s ability to prevent identity theft.
“I’m Todd Davis, CEO of LifeLock, and yes, that’s my real social security number,” the ad read.
Illinois Attorney General Lisa Madigan said there is no foolproof way to protect against identity theft.
“This agreement effectively prevents LifeLock from misrepresenting that its services offer absolute prevention against identity theft because there is unfortunately no foolproof way to avoid ID theft,†Madigan said. “Consumers can take definitive steps to minimize the chances of having their personal information stolen, and this settlement will help them make more informed decisions about whether to enroll in ID theft protection services.â€
The FTC said LifeLook “routinely collected sensitive information from its customers, including their social security numbers and credit card numbers,” but did not adequately protect the data.
Among the LifeLock claims, according to FTC court filings:
“Only authorized employees of LifeLock will have access to the data that you provide to us, and that access is granted only on a ‘need to know’ basis.â€
“All stored personal data is electronically encrypted.â€
“LifeLock uses highly secure physical, electronic, and managerial procedures to safeguard the confidentiality and security of the data you provide to us.â€
But the FTC alleged that “LifeLock’s data was not encrypted, and sensitive consumer information was not shared only on a ‘need to know’ basis. In fact, the agency charged, the company’s data system was vulnerable and could have been exploited by those seeking access to customer information.”
Employees and vendors “working from their homes or other locations beyond the Defendants’ headquarters could access the network remotely,” the FTC alleged.
“[U]ntil at least September 2007, Defendants engaged in a number of practices that, taken together, failed to provide reasonable and appropriate security to prevent unauthorized access to personal information stored on its corporate network, in transit through its corporate network or over the internet, or maintained in Defendants’ offices,” the FTC alleged.
You might find yourself a rank amateur in the new business of writing down the license-plate numbers of your neighbors for entry in a database if you don’t pay Data Network Affiliates (DNA) a one-time fee of $97 and a monthly fee of $29.95 for the right to use what the firm describes as a “PRO” data-entry module.
News about the “PRO” module began to spread yesterday, only days after DNA told members who listened to an “Oscar” night conference call that the company’s “free” affiliates would “receive the same kind of commitment and respect from our DNA management team” as paid members received.
Whether the company’s current membership roster of 69,000 — all members of which were targeted in ads and presentations to join DNA for free — will consider the appeal for them to reach into their pocketbooks for $126.95 an example of commitment and respect to free members is unclear.
The “PRO” module is part of what the company is dubbing the “Business Benefit Package” (BBP), which DNA described as an “awesome” value.
“Upon close inspection of the B.B.P. you will find a minimum of 10 times the cost of such package to the end user in value savings and benefits,” DNA said in an email to members. “The two that stand out the most is (sic) the FREE 1000 REWARD DOLLARS with FREE REFILLS and the $402 Travel Agent Value Package for only $49.”
Indeed, DNA is cross-pollinating the data-entry portion of its business with other opportunities, according to the email.
The “PRO” module is included in the BBP upgrade package “at no additional charge . . . to make DATA ENTRY simpler, easier, faster and less time consuming,” DNA said.
DNA’s “free” members may remain as such or get started with the BBP package for an initial outlay of $126.95, including the one-time fee of $97 and the monthly fee of $29.95.
DNA described the free data-entry module as a clunker, compared to the “PRO” module, which the firm asserts has bells and whistles and crunches information faster.
Here is how DNA described the benefits of the upgrade package (italics added):
With PRO Upgrade Software an entry takes up to 1 minute. Without takes up to 3 to 5 minutes.
With PRO Upgrade Software you may repeat address for entry with a click of a button. Without you need to re-enter all address data manually.
With PRO Upgrade Software many fields will be already filled in. Without you need to re-enter all address data manually.
With PRO Upgrade Software you may enter as many entries as you wish at one time. Without you are limited to 5 entries per day.
With PRO Upgrade Software you may enter data for others who also have PRO Upgraded Software. Without you can only enter for yourself and not receive any entries from anyone else who may wish to help.
DNA’s email yesterday also implied that it might not be able to trust some of its own members who entered license-plate data. The company, a multilevel-marketing firm that does not have a contact form on its website and uses an address from Google’s free gmail service as its support address, urged its data-collectors in the field to be honest.
“WARNING,” the company blared in yesterday’s email. “Anyone caught entering bogus tag data information will be automatically suspended from D.N.A. pending a 30/60 day review. We are not talking about a possible error or a potential mistake. We are talking about outright fraudulent entries. You may say who would do such a thing. We say hopefully no one.”
The company did not explain why members caught entering “outright fraudulent” data or “bogus tag data” would merely be suspended pending a review that could take up to two months, rather than banned immediately for life and reported to the police for a criminal attempt to defraud the company.
DNA pitchmen have described the parking lots of major retail stores, churches and doctors’ offices as excellent places to record license-plate numbers. Implicit in the pitches is the suggestion that license-plate data is public information available for the taking from virtually any venue by any DNA member.
Some DNA promoters have suggested that the company’s plate-recorders should behave “inconspicuously” when writing down numbers with a pen and pad or taking pictures of them with cell phones and video cameras for later entry in the database.
The claims have sparked privacy concerns that the data could be used to create profiles on the movement of people. If the data is sold to a company in the business of repossessing automobiles, for instance, the repo man might be able to determine where a car owner shops, receives medical treatment, picks up prescriptions for medicine, receives psychological or spiritual counseling and visits for any purpose under the sun.
Billed as the “Oscar” night presentation because it coincided with the Academy Awards, a conference call hosted by Data Network Affiliates (DNA) lasted for a total of roughly 32:10.
Almost all of the call — about 28 minutes — consisted of hype. (Looking it as a percentage, about 87.5 percent of the call was hype.) Roughly the first three minutes were consumed by people announcing their presence on the line, with the encouragement of a pitchman. The balance of the call largely consisted of hype from two DNA pitchmen, with discussion of issues such as privacy concerns spoken about only indirectly through a reference to Google.
One of the pitchmen made the broad point that Google collects data. DNA says it collects the license-plate numbers of cars for entry in a database. The parallel between what Google does and what DNA does was not made clear in the call, and the pitchman appeared to be trying to make the point that data collection was just a part of life.
The same pitchman — in a previous call — described the parking lots of giant retail stores, churches and doctors’ offices as sources of license-plate data. Those comments, coupled with claims by other DNA promoters that have ignored privacy and other concerns or pooh-poohed them — are among the things fueling critical commentary about the firm.
When Kurek came on the “Oscar” call at roughly the 21:30 mark after more than 18 minutes of hype by the pitchmen, he spoke for about four minutes, covering his business experience that previously had been covered by both pitchmen.
The balance of the call was more hype. No issues raised by critics on matters such as the propriety, safety and legality of DNA were addressed directly. Kurek did say he had experience with companies that maintained private data and that his business experience had taught him about “accountability” and “organization.”
Kurek did not participate in the hype. He thanked members for listening in — and the thanked the pitchmen and DNA’s 63,000 affiliates.
“My true talent is also finding the right people to get the job done,” Kurek said. “I truly believe we’ve assembled the best MLM minds in the world.”
His vision, he said, was to provide services and benefits never before thought of. Kurek spoke with an even voice throughout his time on the line. He did not address comments made last week by Dean Blechman, DNA’s former CEO, that the company had a “back door guy” within its operation and that some communications put out by the company were “bizarre” and misleading.
Because the lines were muted, no caller asked a question. Neither the pitchmen nor Kurek solicited listeners to ask questions during the call. After the call ended, several issues were left dangling, including whether Phil Piccolo somehow had become involved in DNA.
Piccolo is a lightning rod for MLM critics.
Blechman did not rule out last week that Piccolo was involved. When pressed for a definitive answer, Blechman suggested that one could be forthcoming.
Piccolo is the subject of considerable scorn online. Whether he is part of the company remains unclear, and rumors of his involvement continue to swirl.
In other DNA news, some affiliates of the company appear to be pulling their ads from craigslist. Other craigslist ads by DNA affiliates have been labeled “flagged for removal.” Still others have expired.
Some craigslist ads remain. One of them — dated Feb. 26, two days after Blechman’s departure as CEO — is posted in Los Angeles. The ad claims that its contents came from a DNA “press release” dated Feb. 25.
“A very high powered CEO with Public Company Experience is stepping up to the plate with exciting plans being put into place to make D.N.A. one of the most powerful Viral Affiliate Marketing Companies in the U.S.A. and around The World,” the ad reads.
“The D.N.A. company is signing a MEGA MILLION DOLLAR DEAL with a publicly known industry giant. Between this agreement being sign and the D.N.A. Top Secret Product being announced on March 27th, 2010. D.N.A. is positioning itself to be Global Giant.”
Blechman noted last week that the company did not announce his Feb. 24 departure until March 2. He questioned why the company had waited so long.
At roughly the 3:26 mark of the call, one of the pitchmen said, “I mean, I gotta tell ya, if they were giving out some Oscar awards in multilevel marketing, or, you know, something special, I believe DNA would definitely get something tonight.”
The Oscar awards, of course, are for proficiency in acting.
Image of the logo of V-Local.com from a March 2009 news release.
UPDATED 5:43 P.M. ET (U.S.A., Jan. 20, 2011.) On Feb. 23, the U.S. Secret Service raided the Minneapolis offices of INetGlobal, a company operated by Steve Renner under the Inter-Mark Corp. umbrella. The raid occurred amid allegations that INetGlobal was operating an autosurf Ponzi scheme and also engaging in wire fraud and money-laundering.
A week later — on March 2 — a domain titled RGMG.net was registered in the name of Matt Renner, according to web records. The domain lists a different Minneapolis address than the Steve Renner entities, some of which used a “V” theme: “V-Media” and “V-Local,” among others.
Matt Renner, 27, is Steve Renner’s son.
“We’re running a legitimate business,” he said of RGMG.
V-Local, which has a website at V-Local.com that is registered to Renner’s Inter-Mark in Las Vegas, was “offered to iNetGlobal members as a service they could sell,” the Secret Service said in an affidavit last month.
Matt Renner, who worked as an executive at V-Local, said V-Local provided legitimate products and services.
“We at V-Local were doing nothing wrong,” he said.
And Matt Renner defended his father. “I don’t believe any wrongdoing was done,” he said.
Steve Renner was convicted in December of four felony counts of income-tax evasion. He was awaiting sentencing in the tax case, even as the Ponzi allegations surfaced against INetGlobal.
V-Local’s logo is featured prominently on the RGMG.net site, which says, “RGMG LLC is a rising player in Digital Media Planning, Buying, Selling and Development. With over 35 years combined digital marketing experience and more than 800 past and current clients, the team at RGMG has the experience to deliver high value wide ranging services.”
Another section of the RGMG site says, “Based out of the Beautiful city of Minneapolis Minnesota, RGMG started because the demand for a company who’s (sic) Executives pay more attention to their customers (sic) needs, than their own pocket books, was felt by Founder and President, Matthew D. Renner.”
Yet another section of the RGMG site says, “The team at RGMG has developed many custom platforms including in partnership with V-Media and iNetGlobal the powerful local lifestyle and business directory V-Local.com.”
Although there are serious allegations of wrongdoing against INetGlobal and it is possible that Ponzi proceeds were used to fund V-Local, the RGMG.net site does not mention the allegations or inform visitors that the Secret Service painted a picture that Steve Renner’s claims about V-Local were overblown. (Read a section of the affidavit concerning V-Local lower in this story.)
“[T]here is probable cause to believe that [Steve] Renner is operating a large, Internet-based, Ponzi scheme through his umbrella corporation, InterMark, and some of its subsidiaries, particularly Virtual Payment Systems [LLC of Wisconsin/Brackets Denoting the LLC Designation added Jan. 20, 2011], V-Media, Cash Cards International, and V-Local,” the Secret Service said last month. It further alleged that INetGlobal was the “primary vehicle for the perpetration of this fraud.”
NOTE IN BOLD ADDED JAN. 20, 2011: An Indianapolis-based company known as Virtual Payment Systems Inc. has contacted the PP Blog to let it know it is not affiliated with the Renner company Virtual Payment Systems LLC of Wisconsin, which is referenced in the paragraph above.
There have been no assertions of wrongdoing against RGMG, and the RGMG site does not appear to have a surfing component among the services listed. RCMG stands for “Renner Global Media Group,” according to the site.
Matt Renner, who said he read the Secret Service allegations, said he was not worried that problems could spill over into RGMG and create a problem for the emerging brand.
“It’s a legitimate website,” he said. “It’s a legitimate company; it’s absolutely a valuable service.”
The site, however, may come with a built-in PR dilemma: how to navigate the choppy waters of embracing the Steve Renner V-Local brand without addressing the Ponzi assertions against INetGlobal and V-Local, perhaps especially if a Renner family member is at the head of RGMG.
At the same time, certain marketing materials and the prominence with which Steve Renner’s V-Local is referenced on the RGMG site — indeed, V-Local’s logo appears on the site in at least two places and RGMG encourages visitors to make V-Local their “new Homepage” — may leave some customers and employees of INetGlobal and its “V” entities scratching their heads.
V-Local’s name is prominently mentioned in INetGlobal marketing materials, including a news release dated March 25, 2009. The headline on the news release said, “iNetGlobal launches V-Local and iNetSurf on Saturday, March 28, 2009.” The news release included the V-Local.com logo (pictured above.)
Despite the claim that V-Local launched in March 2009, a news release issued 11 months later — in February 2010 — claimed a January 2010 launch date for V-Local under this headline: “V-Local Reports Exponential Growth Following January Launch.” The Feb. 16 news release includes a graphic of a logo for V-Local labeled “BETA.”
Why the news releases list two different launch dates for V-Local is unclear. Steve Renner’s own website — SteveRenner.com — announced the launch of V-Local on March 3, 2009.
“Steve Renner who is known for his knack of creating successful online ventures, has Struck Gold with his latest project, V-Local,” the website reported.
No mention was made that Renner already was under indictment for tax evasion and that another Renner entity — Cash Cards International — had been unable to return money to victims of a Ponzi scheme known as “Learn Waterhouse,” amid assertions that Renner had spent customers’ money as though it were his own and had invested $250,000 in the Learn Waterhouse scheme.
Renner’s site said the type of service V-Local provided “would normally cost the $1,000’s but V-Local has set the price at an extremely affordable price of just $59 per month, for their Top Of The Line ‘Showcase’ listing.”
By clicking on the “Contact Us” link on The V-Local.com website, visitors arrive at a page that lists the street address of Steve Renner’s Minneapolis entities.
A section of the Feb. 16, 2010, news release reads, “V-Local, the first-of-its-kind online business and lifestyle directory, announced today that it has experienced unprecedented growth since its launch on Jan. 15, 2010. Site traffic increased 900 percent in February alone, according to Google Analytics, with more than 100,000 visitors since the site’s launch.”
Going back 11 months, the body copy of the March 2009 news release that announced V-Local’s launch read, in part: “On Monday, March 16, 2009 iNetGlobal did a ‘soft’ launch of iNetSurf. This product and had over 3,000 internet users sign up in one work day. At iNetSurf current pace, we can expect over 200,000 active ‘surfers’ in 6 months!”
Meanwhile, the emergence of RGMG after the Secret Service raid at INetGlobal could lead to questions about why INetGlobal ever used an autosurf component and folded components such a V-Local into the enterprise.
Between Jan. 11 and Jan. 29, according to a Secret Service affidavit, undercover agents logged in to the INetGlobal website on “multiple occasions.”
Among the things agents noted while logging in, according to the affidavit, was that ‘V-Local’ has an address listed as 250 Second Avenue South, Suite 145, Minneapolis, Minnesota, 55401.”
The Secret Service said it conducted surveillance of the office suite in January — prior to the raid — from a skyway and corridor open to the public.
“Agents saw signs reading ‘iNetGlobal’ and ‘V-Local.com’ at the door of Suite 106A, and saw signs reading ‘V-Records’ and ‘VWebs’ at the door of suite 145,” the agency said. The office suites later were searched as part of the raid.
The phone number associated with RGMG.net in its domain registration also is referenced in INetGlobal marketing materials that quote Matt Renner.
In the Feb. 16 news release, which was issued about a week before the Secret Service raid, INetGlobal is described as V-Local’s parent company.
“V-Local is a lifestyle and business directory, featuring over 3.5 million businesses, events, classifieds and coupons,” the release said. “As a premier online advertising resource for businesses, V-Local provides a platform for businesses to leverage their brand and generate local and global exposure. V-Local bridges the gap between businesses and consumers at both global and local levels.”
A week after the Feb. 16 news release, the Secret Service suggested in its affidavit for a search warrant that Steve Renner’s V-Local marketing claims were overblown. Here is a snippet from the affidavit:
“[Steve] Renner claimed that iNetGlobal’s business directory, V-Local, had over 3.5
million businesses signed up. He explained that attendees could make a great deal of money selling V-Local and signing up businesses to participate in V-Local.
“[Steve] Renner stated that V-Local was expanding into Canada, Europe, and China. He claimed that when a company was listed on V-Local, iNetGlobal would list the business with over 65 local directories, plus social networking sites, and would arrange for the business to be input into Garmin and TomTom GPS navigation devices, as well as Cadillac OnStar.
“On January 28, 2010, [an undercover agent] searched for ‘coffee shop’ in Minneapolis, Minnesota on V-Local, asking V-Local to find the nearest coffee shop. There were no results. [An undercover agent] then broadened the search to coffee shop, food and dining. V-Local then identified six coffee shops in Iowa, Kansas, and other states, only one of them in Minnesota (in Byron).
“[Steve] Renner stated that if an attendee wanted to sell V-Local the attendee would need to pay $300, watch several videos, and take a certification test. Renner stated that for every person in a member’s ‘downline’ who got certified to sell V-Local, the original member would receive $100. Renner stated that this would be an enormous jump in a member’s income. Approximately one week after the Freedom Conference [in New York Jan. 23], [an undercover agent] searched on V-Local for ‘gym’ and ‘restaurant. There were no hits in the search for gym, and only one hit in the search for restaurant.”
Matt Renner said he believed RGMG would emerge a leader, despite the assertions against INetGlobal.
“They didn’t shut the company down,” he said, referring to INetGlobal. “No arrests were made. RGMG is a company that will generate good, positive results.”
A Florida man has been arrested by the FBI on 21 counts of wire fraud amid allegations he operated a forex Ponzi scheme, collecting more than $10.2 million and pocketing $1 million for himself.
