Images of Donald Trump and Oprah Winfrey appear in a YouTube video promo for Data Network Affiliates. Neither Trump nor Winfrey could be reached for comment tonight.
The images of business tycoon Donald Trump and entertainment icon Oprah Winfrey appear for 10 continuous minutes in a sales pitch for Data Network Affiliates (DNA) on YouTube.
DNA pitchmen have described the company as a multilevel-marketing (MLM) company that recruits affiliates to record license-plate numbers in the parking lots of retail stores, churches, doctors’ offices and “anywhere” cars are parked in a group. Some critics have raised propriety, safety, legal and privacy concerns.
It was unclear whether either celebrity approved the use of the images in the ad. A security guard answered the phone tonight at the Trump Organization in New York. He said the media office was closed for the day.
An operator answered the phone at Harpo Productions, Winfrey’s Chicago-based production company. She said no one would be available for comment until tomorrow.
The promo for DNA incorporates an audio recording from a company conference call. An image of Trump appears on the left side of the video screen, with Winfrey’s image on the right. The video appears to be an affiliate promo.
Referring to DNA Chief Executive Officer Dean Blechman, the narrator in the DNA conference call dubbed into the You Tube video says, “This is the guy. He rolls with the Donald Trumps; he rolls with the big boys. I mean, you know, he has [inaudible] certain people on speed dial that’s incredible.”
DNA’s web domain lists an address in the Cayman Islands. A “Contact Us” link on the DNA website resolves to message that says, “Information is coming soon!”
The domain advertised in the promo — DataNetworkAffiliates.org — is registered behind a proxy. A DNA affiliate URL on the .org website begins with the word “students,” and includes this message:
“We are sharing all of our marketing tools with our team so they can capitalize on this wonderful opportuniy (sic).” Get stared (sic) today at the link above.”
It was unclear if one of the tools was the video featuring the images of Trump and Winfrey.
Saying it has identified nearly 100 organizations that lost control of personal information they maintain on employees, customers or others, the FTC has notified the entities to tighten security on peer-to-peer (P2P) file-sharing networks.
At the same time, the agency said it has opened “non-public investigations” of companies whose customer or employee information has been exposed on P2P networks.
The FTC did not name the organizations that lost control of data, describing them as a mix of schools, local governments, small businesses and “corporations employing tens of thousands” of people.
In numerous cases, the FTC said, data maintained by the organizations was shared over their computer networks and now “is available on P2P networks” on which users play games, make phone calls, and share music, video and documents.
“[W]e found health-related information, financial records and drivers’ license and Social Security numbers — the kind of information that could lead to identity theft,†said FTC Chairman Jon Leibowitz.
The FTC provided three examples of letters sent to the organizations.
A letter sent to companies begins, “The Federal Trade Commission (FTC) is sending you this letter because at least one computer file containing sensitive personal information from or about your customers and/or employees has been shared from your computer network, or the network of one of your service providers, to a peer-to-peer file sharing (P2P) network.
“One such file is *******. The information is now available to users of the P2P network, who could use it to commit identity theft or fraud. Your failure to prevent such information from being shared to a P2P network may violate laws enforced by federal, state, or local law enforcement agencies.”
‘Hard Look’ Advised
“Companies should take a hard look at their systems to ensure that there are no unauthorized P2P file-sharing programs and that authorized programs are properly configured and secure,” Leibowitz said. “Just as important, companies that distribute P2P programs, for their part, should ensure that their software design does not contribute to inadvertent file sharing.â€
In litigation in recent years, the FTC brought privacy-breach actions against well-known companies such as CVS Caremark Corp., the largest pharmacy chain in the United States; Genica Corp., operators of Computer Geeks Discount Outlet and geeks.com; and Premier Capital Lending Inc.
Those cases all have been settled.
In the PremierCapital case, the FTC alleged the company allowed a third-party home seller to access data without taking reasonable steps to protect it.
“A hacker compromised the data by breaking into the home seller’s computer, obtaining the lender’s credentials, and using them to access hundreds of consumer reports,” the FTC said.
In the Computer Geeks case, the FTC alleged the company stored sensitive customer information in unencrypted text on its corporate computer network.
Hackers stole the information, the FTC said.
Meanwhile, in the CVS case, the FTC said that it opened its investigation after reading newspaper reports that the company was “throwing trash into open [D]umpsters that contained pill bottles with patient names, addresses, prescribing physicians’ names, medication and dosages; medication instruction sheets with personal information; computer order information from the pharmacies, including consumers’ personal information; employment applications, including Social Security numbers; payroll information; and credit card and insurance card information, including, in some cases, account numbers and driver’s license numbers.”
Visit the FTC site for info on previous data-breach cases.
AdSurfDaily President Andy Bowdoin's threats to sue critics backfired, exposing the company to even more scrutiny.
EDITOR’S NOTE: Repping for Data Network Affiliates or Narc That Car, two companies in the business of recording license-plate data? Here are some things you might want to consider . . .
UPDATED 2:21 P.M. ET (March 5, U.S.A.) Data Network Affiliates (DNA) and Narc That Car (NTC) both say they are soliciting members to record the license-plate numbers of cars for entry in a database. Both are multilevel-marketing (MLM) companies. Both have become the subject of scrutiny by web critics who have raised issues of propriety, safety, legality and privacy.
Both companies should thank their lucky stars that the criticism, so far, largely has been contained to the web.
Last week, Dean Blechman, the chief executive officer of DNA, came out firing against the critics. Painting with a brush that was almost unimaginably wide, Blechman suggested the company is monitoring “everyone that’s a distraction out there and anyone that’s printing stuff on the Internet or anywhere†and perhaps preparing to sue. (Emphasis added.)
Yes, a company whose members say is in the business of establishing a database so customers can monitor cars as they move from Walmart to a “doctor’s office” to other locations (including churches) now says it is monitoring “everyone” and “anyone” who poses a “distraction.”
“I’ll tell you one thing,†Blechman warned in an audio recording posted on DNA’s website, which lists an address in the Cayman Islands. “They better be very, very careful of what they write . . . [b]ecause I have every intention of policing and pursuing every legal ramification . . . against anybody that’s reporting any information inaccurate to try to tear down what I’m trying to build here.†(Emphasis added.)
So, a company with a domain that uses a Cayman Islands address and does not say where its corporate offices are located — and a company that does not have a working Contact Form on its website and, according to members, is in the business of recording license-plate numbers in the United States in the parking lots of retailers such as Walmart and Target, supermarkets, churches and doctors’ offices — is sending a clear message to critics.
Blechman’s remarks also might have the effect of chilling DNA affiliates. Some are apt to interpret his comments as a warning that they’d best raise no questions about the company if they’re writing about it in Blog posts or in emails sent to prospects. Customers of DNA and Narc That Car are ill-served by sponsors who might be inclined to write reviews that are anything less than flattering because such reviews might upset management of the companies.
DNA’s own pitchmen have identified Walmart, Target, supermarket parking lots, parking lots at churches and doctors’ offices and “anywhere” cars are parked in a group as the sources of license-plate numbers.
One of the pitchmen who introduced Blechman in the recording in which Blechman warned critics was the same pitchman who told listeners in a previous call that the company envisioned an America in which DNA members would record the plate number of a hypothetical “red corvette” parked at Walmart, and then record the plate number again an hour later at a “doctor’s office” — and then record it again three hours later when it was parked elsewhere.
Blechman said nothing about the pitchman’s comments in the recording in which he threatened critics. Nor did he address a DNA video promotion by the company’s top affiliate that suggested DNA members should behave “inconspicuously” while snapping photographs of “cars” and plate numbers at Walmart on their iPhones, Blackberrys and notepad computers.
Whether affiliates need the permission of retailers, patrons, clergy, worshipers, physicians, patients or any party is left to the imagination. How the company can prevent abuses also is left to the imagination.
Instead of addressing the criticism, Dean Blechman turned his focus on the critics, thus creating the appearance that the company has no problem with its members taking photos of cars and license plates at Walmart, at places of worship and at doctors’ offices.
Until Blechman speaks on these issues publicly in a news conference or addresses them in an official news release available to the media and DNA members, it is not unreasonable for Americans to believe that, if they are seeking the private counsel of clergy, their license-plate number may be recorded while they’re inside their place of worship pouring out their souls — and the number will be entered in a database used to track the movement of vehicles.
And it’s not unreasonable for Americans to believe their plate number will be recorded while they’re inside the office of their physician, surgeon, psychiatrist, psychologist, attorney or other professional.
What’s more, it’s not unreasonable for Americans to believe their plate number will be recorded wherever they do their shopping or reading, including retail outlets large and small, libraries and shops that sell adult videos and magazines.
Blechman needs to speak to these issues before the MLM program launches March 1. And he needs to make it plain whether he approves of the practice of writing down plate numbers (or recording them on video) where Americans shop, worship, receive medical and legal advice and spend their casual time.
How does DNA plan to guard against invasions of privacy? How can it prevent database customers from abusing data it provides?
DNA’s own pitchman offered up the possibility that the company wanted to create records of the movement of automobiles and offer that information for sale to database customers. If this is so — and if you don’t want anyone to know you’re seeking the counsel of clergy, a medical professional or a legal professional — you should know that DNA appears to be building a database that will record various sightings of your license plate.
If you owe money to a finance company and are having money problems, the repo man very well might learn you are seeking the counsel of your clergyman or even your therapist. The repo man will get the addresses. He will know if your car was parked at the office of a psychologist or a heart surgeon, a rabbi or a priest, the public library or the adult bookstore, the City Hall building or the casino, the curb in front of your house or the curb in front of friend’s house.
If your name is Daisy, if you’ve recently had heart-bypass surgery and fell into clinical depression and are having trouble paying your bills because you aren’t healthy enough to return to work or you’ve been laid off, the repo man might be able to tell his client:
“Hey, Daisy’s car was parked in a surgeon’s parking lot. Then it was spotted in her shrink’s parking lot. Then it moved to a credit counselor’s parking lot. Then she visited her daughter. Then she visited the Catholic parish down the street from her house.
“You won’t believe where the next sighting was. The Salvation Army soup kitchen! Daisy is broke — and she’s a nutcase to boot!”
And what if the availability of the info is not limited to the repo man or finance companies? The United States could become a country of paid snoopers who recruit other paid snoopers.
Blechman’s response was to threaten to sue critics. One of the pitchmen who introduced Blechman said the company had recruited 37,000 members in just a few weeks. The database product is not yet available, but the manpower to populate it is — and members by the thousands are being urged to write down plate numbers.
Some members already have a supply on hand: NTC launched before DNA, which Blechman described as his “unbelievable vision.” From appearances, it looks as though NTC had the vision first — and DNA now is in position to benefit from plate numbers submitted by NTC members.
Leading with an elbow normally is frowned upon in business and often leads to even more intense scrutiny. Ask AdSurfDaily President Andy Bowdoin, who announced that the company had amassed a giant money pot to punish critics.
Here, according to federal court filings, is what Bowdoin told ASD members at a company rally in Miami on July 12, 2008:
“These people that are making these slanderous remarks, they are going to continue these slanderous remarks in a court of law defending about a 30 to 40 million dollar slander lawsuit. Now, we’re ready to do battle with anybody. We have a legal fund set up. Right now we have about $750,000 in that legal fund. So we’re ready to get everything started and get the ball rolling.” (Emphasis added.)
Yes, Andy Bowdoin publicly threatened to sue critics. He, too, painted with a wide brush, saying his warning applied to “anybody.”
Less than a month later, the U.S. Secret Service raided ASD. Prosecutors said the company was operating a $100 million Ponzi scheme and engaging in wire fraud and money-laundering.
Bowdoin’s lack of PR skills later contributed to other nightmares for members. Bowdoin, for example, described the Secret Service seizure of his assets as an attack by “Satan.” And he compared the government’s actions to the 9/11 terrorist attacks that killed nearly 3,000 people.
He later said his fight against the government was inspired by a former Miss America.
The concerns about the propriety, privacy, safety and legality of both DNA and NTC are real. The BBB of Dallas and the district attorney of Henderson County, Texas, have opened inquiries into NTC.
Because DNA is competing in the same arena as NTC, it is not unreasonable to ask the same sort of questions.
Dean Blechman is a longtime businessman. He could learn a few things from the PR mistakes of Andy Bowdoin, one of which was to attack the critics before addressing the issues and making the company’s operations crystal clear and transparent to thousands of affiliates and members of the public.
Video cameras? Cell phone cameras? Notepad computers? Pens and pads?
Professional complexes? Walmart? Target? Adult bookstores? Libraries? Church parking lots? Doctors’ offices?
UPDATED 10:31 A.M. ET (U.S.A.) The chief executive officer of Data Network Affiliates (DNA) has come out swinging against critics, threatening to take legal action.
“There are some distractions I’m hearing about out there,” said CEO Dean Blechman.
An audio recording of Blechman’s remarks is posted on DNA’s website. Two DNA pitchmen warmed up listeners by exchanging compliments with each other and lauding Blechman for nearly seven minutes before he offered his remarks.
Blechman described DNA as his “unbelievable vision” — for which he had come out of retirement to make come true. “I have a chance to make that really happen,” he said.
“My 30 years of my reputation in business stands for itself, no matter what distractions are out there towards Data Network Affiliates,” Blechman said, after mentioning his background in the natural-products industry with a company known as TWIN LAB.
Without specifying the distractions and what the critics have gotten wrong, Blechman suggested he’ll sue, targeting his remarks at “everyone that’s a distraction out there and anyone that’s printing stuff on the Internet or anywhere.”
“I’ll tell you one thing,” he warned in the recording. “They better be very, very careful of what they write . . . [b]ecause I have every intention of policing and pursuing every legal ramification . . . against anybody that’s reporting any information inaccurate to try to tear down what I’m trying to build here.”
DNA’s domain lists a Cayman Islands address, as does a companion domain: TagEveryCar.com. A “Contact Us” link at the bottom of the DNA website resolves to a page that says, “Contact Data Network Affiliates[:] Information is coming soon!” The TagEveryCar domain redirects to the DNA website.
DNA has delayed the program launch twice this month, and now says it will launch March 1. DNA says it is building a database of license-plate numbers.
In recent days, critics have raised issues ranging from propriety, affiliate training, safety and privacy to the ownership of the company and why the domains listed offshore addresses. A multilevel-marketing firm, DNA says it has signed up more than 37,000 participants to gather license-plate numbers.
Pitchmen for the company have identified the parking lots of Walmart, Target, churches, doctors’ offices and “anywhere” cars are parked as sources of plate data.
Promoters have provided little instruction on matters such as whether DNA members are required to obtain the permission of store managers, church pastors and physicians before recording the plate numbers of patrons or congregants or patients, whether members should obtain additional insurance protection or consult with an attorney before entering the license-plate number recording business and how members are required to behave if confronted by store managers and patrons, church pastors and congregants, doctors and patients and police.
Lionel Cesaire, one of the DNA pitchmen who introduced Blechman in the recording, previously described DNA as a company with members who would record the license-plate number of a hypothetical “red corvette” parked at Walmart at noon, a “doctor’s office” at 1 p.m. and “somewhere else” at 4 p.m.
Privacy advocates may take a dim view of the approach, raising concerns about both propriety and legality. Some DNA members have recommended that affiliates record plate numbers with video cameras. Such information easily could end up on the Internet, exposing people to invasions of privacy and triggering lawsuits. At the same time, DNA members who collected information for the company could stockpile it and offer it for sale to other companies.
Blechman thanked Cesaire for his introductory remarks, but did not reference Cesaire’s remarks in a previous conference call about recording numbers at churches, store parking lots and doctors’ offices.
In a promotional video on YouTube, Florida-based DNA promoter Jeff Long — whom DNA says has recruited more than 700 members — suggested prospects should behave “inconspicuously” when snapping photographs of license plates at stores such as Walmart with iPhones, Blackberrys and notepad computers.
Cesaire also has used the word “inconspicuous” when describing the recording of plate numbers, suggesting that members might want to be seated in their cars when writing down plate numbers in retailers’ parking lots.
Describing his own experience collecting plate numbers at Walmart by taking pictures of them while strolling through the parking lot, Long said in a DNA promo on YouTube that store patrons looked at him “weird.”
“People looked at me kinda weird. But I didn’t care. You kind of do it inconspicuously. . . . because . . . you know, everybody, ‘Why are you taking a photo of my car?’†Long said.
As Long’s video narration continued, he said, “Who cares what people think? Who cares what people are going to . . . look at you weird? Whatever. Because as you do this, and you record 20 license plates, the company’s going to pay you $25.â€
The video promo continues to appear on YouTube. A similar video featuring Long in which the words referenced in the paragraphs above appear to have been edited out was removed from YouTube “by the user” in the past several hours, according to the YouTube site.
The video also was removed from a webpage operated by an individual DNA affiliate believed to have spammed the PP Blog Thursday.
A link to the now-removed YouTube video was sent to the PP Blog in a pure spam post Thursday at 10:05 p.m. The sender targeted a DNA discussion thread, but attempted to post an ALL-CAPS sales pitch (italics added):
“WANT TO JOIN DNA’s TOP TEAM AND LEARN THE TRADE SECRETS OF BUILDING A HUGE ORGANIZATION FAST AND FREE?
TO QUALIFY YOU MUST REGISTER TO BECOME A FREE AFFILIATE AT
[**SPAMMING LINK REMOVED BY ADMIN**]
SEE YOU AT THE TOP!
Later, a possible shill entered the thread, saying he was “tryin to sign up.” After that, a third poster left a sales URL in the same thread. The PP Blog attempted to contact DNA through its website to report the spam, but the site did not have a contact form.
In the recorded conference call, Blechman said members should be confident in the program.
“I am leading this company; I’m the CEO. I’m in charge. Every big decision is made by me and my partner, Arthur Kurek.
Kurek is president and chief financial officer of DNA, Blechman said.
In the call posted on DNA’s website, Blechman did not address any of the issues raised by critics. It is unclear if he approves of the Jeff Long video and Long’s plate-number collection method. Long has been identified in a DNA conference call as the company’s top recruiter.
Long recorded a similar video to recruit members for Narc That Car. The headline on the video now says, “NARC That Car – Don’t Join!” In the upper-right corner of the YouTube site, this message appears:
“This video talks about NARC That Car… IF YOU ARE PLANNING ON MARKETING THIS BUSINESS ON THE INTERNET DO NOT JOIN!!!!! NarcThatCar CANCELED AND DISABLED My distributorship because I put this video on YouTube…I’m now the #1 leader and sponsor in their BIGGEST COMPETITOR’S BUSINESS…DataNetworkAffiliates. Again…don’t join NarcThatCar if you plan on marketing on the internet!!!!!!”
Narc That Car is a Dallas-based business. Like DNA, Narc That Car says it is in the business of gathering license-plate data.
Trading off a popular phrase, Kerry John O’Neill’s “pay-it-forward” scheme has landed him in trouble with Canadian securities regulators, wiped him out financially and implicated an associate who helped him sell the scheme.
O’Neill even named his scheme the “Pay It Forward Program” (PIF), according to the British Columbia Securities Commission (BCSC), which accused him of collecting $9.6 million from 943 investors by telling them they could expect returns ranging from 100 percent to 300 percent in 90 days.
“Pay it forward” is a marketing buzzword phrase. The phrase often is associated with autosurf, cash-gifting and MLM schemes that recruit affiliates. The “pay-it-forward” sales approach has emerged as a potential marker of a financial fraud.
Broke and living in public housing, O’Neill now has become the subject of an investigation by the Alberta Securities Commission (ASC). Like BCSC, ASC is seeking sanctions against O’Neill, who was banned in September 2009 from the securities business in British Columbia.
BCSC accused O’Neill of selling unregistered securities as investment contracts. Although Pay It Forward was not an autosurf, similar prosecutions have been brought against autosurf operators in the United States.
“Between November 2005 and December 2006, O’Neill solicited investors to join the PIF Program and enter into investment contracts (the PIF Securities) with him,” BCSC said. “No prospectus was ever filed for the PIF Securities and none of the exemptions under the Securities Act . . . applied to their distribution. O’Neill was not registered under the Act when he distributed the PIF Securities.”
Banned along with O’Neill by BCSC was Renee Marie Helmig, also known as Nisha Helmig.
Helmig, of North Vancouver, admitted she “used false information provided by O’Neill to make misrepresentations to investors and potential investors to convince them to invest in Pay it Forward,” according to BCSC.
O’Neill’s particular brand of “pay-it-forward” involved a scheme by which investors were told that “their funds would be used to buy and sell distressed merchandise,” BCSC said.
Here is how money invested in the scheme was distributed, according to BCSC:
$6.4 million to pay amounts owed to other investors.
$1.1 million to purchase merchandise.
$213,000 for “other investment opportunities.”
$56,000 for O’Neill’s personal expenses.
The remainder was used for “expenses related to the distressed merchandise business,” BCSC said.
“[M]ost investors did not earn any return on their investments, but rather lost some or all of their investment capital,” BCSC said. “[T]he payments O’Neill made to investors did not come from profits he made from buying and selling distressed merchandise. Instead, O’Neill paid investors with other investors’ funds.”
“O’Neill has been unemployed since the PIF Program ended” in April 2007, BCSC said. “He lives in subsidized housing and his only income is a monthly disability benefit.”
A Florida man implicated in a pump-and-dump scheme tied to a Ponzi- and affinity-fraud scheme has been convicted and faces decades in federal prison.
Michael J. Muzio, 46, of Tampa, was convicted on six counts of securities fraud, two counts of substantive wire fraud, two counts of lying to the SEC and the FBI and one count of conspiring to commit wire fraud.
Muzio’s pump-and-dump scheme is linked to the alleged Home Pals Investment Club Ponzi and affinity-fraud scheme involving Ronnie Eugene Bass Jr., Abner Alabre and Brian J. Taglieri.
Bass, Alabre and Taglieri were accused civilly and criminally of targeting Haitian-Americans in a $14.3 million scheme.
Alabre, 33, of Miramar, Fla., and Taglieri, 39, of Jupiter, Fla., already have pleaded guilty to criminal charges, which were brought in October 2009. Bass and Alabre were accused by the SEC of fooling investors by saying Taglieri was Home Pals’ attorney, but Taglieri is not an attorney, according to records.
Muzio defrauded Haitian-American and other investors in South Florida and elsewhere “by manipulating” the stock price of International Business Ventures Group (IBVG), a Florida shell company “with no assets and virtually no business activities,” prosecutors said.
IBVG purportedly was operated from Palm Beach Gardens. Last month, U.S. Attorney General Eric Holder described the Palm Beach area as the “ground zero” of financial fraud. Holder ventured to Palm Beach to make a speech and introduce the Obama administration’s Financial Fraud Enforcement Task Force.
The manipulation scheme was carried out through “coordinated stock purchases and sales designed to artificially impact share prices,” the FBI said.
“To induce investors to purchase the stock, [Muzio] created a false impression that an active market for the stock existed by engaging in illegal ‘wash trades’ in which he simultaneously entered buy orders through one brokerage account under his control and offsetting sell orders at the same price through another brokerage account under his control.
“These trades had no real economic effect, but the defendant’s brokers unwittingly reported the trading activity and potential investors who saw the online reports were misled into believing that the stock was actively traded at the quoted prices,” the FBI said.
As often is the case in pump-and-dump schemes, Muzio “issued false and misleading press releases” claiming that the company had profitable business dealings.
Muzio claimed IBVG “had deals to provide and offer prepaid debit cards in Haiti,” as well as prepaid calling cards and “exclusive rights to market prepaid electric meters in Haiti,” the FBI said.
“Investors were offered the chance to purchase free-trading shares of stock, but then received certificates for restricted shares which could not be traded and ultimately proved to be worthless,” the FBI said.
Home Pals advised website viewers that the company was “honest†and adhered to “uncompromising ethics,†the SEC said.
The Texas State Securities Board and the district attorney's office of Collin County, Texas, prosecuted Edward Digges Jr. A jury imposed a 99-year-prison sentence.
A Texas jury has thrown the book at Edward S. Digges Jr., sentencing the Collin County man to 99 years in prison for fleecing 130 investors in a securities-fraud and Ponzi scheme.
Digges, 63, formerly was an attorney in Annapolis, Md. He was disbarred in an overbilling scheme, convicted of mail fraud in 1990 and spent two years in federal prison. After his release from prison, he continued to clash with law-enforcement agencies, including the SEC, regulators in Maryland, Ohio and Pennsylvania, and the Texas State Securities Board (TSSB).
Most of Digges’ victims were “elderly,” prosecutors said.
The 99-year sentenced imposed in Texas evolved from Digges’ operation of an entity known as the Millennium Terminal Investment Program, which sold securities that purportedly generated profits from point-of-sale terminals used by merchants to process credit and debit transactions.
In truth, investigators said, Millennium operated in the red out of the gate, was in deep “financial turmoil” not disclosed to investors, was making payments to old investors with money from new investors and lied about having a “reserve fund” to shore up the program.
Digges collected at least $10 million in the scheme by promising investors annual returns of 12 percent, prosecutors said.
“Edward Digges has a long history of defrauding some of our most vulnerable citizens, and this sentence ensures he will never again do so,†said Texas Securities Commissioner Denise Voigt Crawford.
She noted that victims will not be made whole.
“The conviction will not return money to investors,” she said. “This case highlights the importance of checking the background of any financial professional you choose to do business with, and the importance of obtaining full disclosure before investing.â€
Digges deliberately targeted senior citizens in newspaper ads, prosecutors said. At the same time, he did not disclose his criminal conviction and did not tell clients about a $3.6 million civil judgment against him in the overbilling case.
TSSB and the district attorney’s office of Collin County prosecuted Digges on the criminal charges. Collin County is a suburban county in the Dallas/Fort Worth metropolitan area.
SEC civil charges against Digges were brought in Florida.
UPDDATED 2:26 P.M. ET (March 5, U.S.A.) A YouTube video promotion for the Narc That Car multilevel-marketing (MLM) program appears to use celebrity footage produced by Appian Way Productions, a production company owned by actor Leonardo DiCaprio.
The PP Blog attempted to contact DiCaprio for comment through the Screen Actors Guild Friday night. The office was closed for the weekend.
The Narc That Car You Tube promotion references a downline group known as Team Trinity International, and appears to splice in content from a Public Service Announcement (PSA) produced by Appian Way in 2008 that urges Americans to vote.
It was not immediately clear if DiCaprio, his production company or the other celebrities in the PSA approved of the use of the footage in what effectively was a commercial for Narc That Car. Several celebrities appear in the Narc That Car promo.
At the moment, the Team Trinity promo is at this URL:
The PSA has nothing to do with MLM. The footage potentially at issue in the Team Trinity video begins at about the 3:40 mark in the PSA and the 0:11 mark in the Narc That Car promo. The PSA’s theme is passing along to friends the worthwhile message of going to the polls, but the Team Trinity video applies the theme to passing along info about Narc That Car.
“I need you to take this and send it to five people,” Oscar-winning actress Halle Berry says in the PSA, referring to sharing the message of going to the polls. Berry says the same thing in the Team Trinity Narc That Car video, but in the context of sharing the Narc That Car message.
Other celebrities who appeared in the PSA are spliced into the Team Trinity MLM message for Narc That Car. The Team Trinity video fades to the Team Trinity logo after comedian-actress Sarah Silverman appears.
In an earlier video, Team Trinity used the logos of 30 famous retail companies, positioning their parking lots as good places to capture license-plate data.
Team Trinity also has referenced the AMBER Alert program administered by the U.S. Department of Justice. The Justice Department denied that Narc That Car had any affiliation with the famous child-protection system.
Narc That Car, which says it is building a database for companies that repossess automobiles, is the subject of inquiries by the Dallas BBB and the district attorney of Henderson County, Texas.
UPDATED 12:15 P.M. ET (U.S.A.) Without raising the issues of propriety, safety and legality, a promoter for the Data Network Affiliates (DNA) multilevel-marketing (MLM) program has produced a sales video that instructs members to “snap photos” of the license plates of cars.
The video is 8:40 in length, and appears to be an upline promotion that is available to DNA downline members in a specific group. A “Join For FREE Right Now” button appears below the video, and the link resolves to a DNA registration page that may be on an insecure site. The sign-up link is on an “http” page, as opposed to an “https” page, although the URL includes the word “securesite.”
“The company’s going to pay you $25 to do this,” the narrator said in a YouTube video. He recommended Walmart parking lots as a source of plate numbers, and also “malls, shopping malls, shopping centers, grocery stores, banks” — and “anywhere” there is a group of parked vehicles.
The PP Blog became aware of the video after the link for it was used in an ALL-CAPS sales-pitch spam attempt at the Blog. It was not immediately clear if DNA, whose domain is registered in the Cayman Islands, had a policy that prohibited affiliates from spamming to drive business to the company.
Also unclear is the process by which recipients of email and forum spam from DNA promoters would contact the company to report affiliate spam. A “Contact Us” link at the bottom of DNA’s website says, “Information is coming soon!”
DNA has been in a state of prelaunch for weeks, twice postponing launch dates in February and moving the launch date to March 1, according to a countdown clock on its website.
The link to the video was at a URL of a domain registered in Myrtle Beach, S.C. The narrator said he had “personally sponsored” more than 400 DNA members in two days.
Screen shot: This DNA sales pitch was sent to the PP Blog at 10:05 p.m. (ET) yesterday. It included an ALL-CAPS promo and a link to a video by a DNA promoter. The video site included a link to register for DNA.
In the video, the narrator described DNA as a “cause” that sought to involve “millions of people” and put “millions of eyeballs” in the business of recording license-plate numbers. In various audio recordings by DNA, pitchmen have referenced the AMBER Alert program, although a recent recording by the company says DNA is not affiliated with the national child-protection system administered by the U.S. Department of Justice.
In this story, the PP Blog describes a DNA audio recording in which a pitchman shared a vision of an America in which DNA members would record the plate numbers of cars as they moved from destination to destination during the day.
A hypothetical “red corvette” could be spotted at Walmart at noon, at a “doctor’s office†at 1 p.m. and somewhere else at 4 p.m. — with DNA members recording the plate number at all three locations, according to the recording. Meanwhile, in this story, the PP Blog reported on a DNA audio pitch that described “church” parking lots as a source of license-plate numbers.
In the YouTube video posted on the Myrtle Beach domain, the narrator instructed viewers to “stop whatever you are doing.”
“This is huge,” he said. “This is truly the wave of the future.” During the video, the promoter described his experience of recording plate numbers. He motioned as though he were snapping photographs, while instructing prospects to do the same.
“Now, there’s people out there that will pay big, big, big bucks for this data, OK? ” he said. “And that’s the reason that these people (DNA) are willing to pay big bucks.”
He did not disclose the names of any companies for which DNA was collecting data. Nor did he describe whether permission needed to be obtained from retailers to snap photos of their patrons’ license numbers or how DNA members should behave if confronted by retailers, patrons or police.
Many retails chains have policies that limit or prohibit solicitation on their properties. The video provided no guidance on whether individual DNA members should increase their insurance protection or advise local authorities that they were canvassing the parking lots of doctors’ offices, churches and stores to record license-plate data.
A Dallas-based MLM business — Narc That Car — has a similar program involving the capture of license-plate numbers for entry in a database.
UPDATE 11:59 A.M. (See comment below that explains there are two versions of the DNA promo video on YouTube, one that is 8:40 in length and one that is 8:48. The longer version includes this narration about DNA promoter Jeff Long’s experience recording license-plate numbers in a Walmart parking lot:
“People looked at me kinda weird. But I didn’t care. You kind of do it inconspicuously. . . . because . . . you know, everybody, ‘Why are you taking a photo of my car?’â€
The narration in the 8:48 version continues:
“Who cares what people think? Who cares what people are going to . . . look at you weird? Whatever. Because as you do this, and you record 20 license plates, the company’s going to pay you $25.â€)
UPDATED 12:54 P.M. ET (U.S.A.) An airplane reported to be “small” has crashed into a seven-story building in Austin, the state capital of Texas.
NBC affiliate KXAN is reporting that at least two people have been injured, that the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives are on the scene, and that an office of the Internal Revenue Service is located in the building.
The building is known as the Echelon Building. Firefighters are on the scene. The crash occurred in North Austin.
MSNBC has a live feed of KXAN’s coverage. The station is reporting that the plane was flying “very low” at a high rate of speed.
CNN, quoting a “federal official,” is reporting that the suspect in the case set his home on fire this morning, stole the plane and crashed it into the building.
UPDATED 9:47 A.M. ET (U.S.A.) Coincidence? Part of the new partnership the FTC announced yesterday with Craigslist that urges consumers to be on the lookout for scams when responding to job and business opportunity ads online?
Messages urging caution are appearing in Craigslist ads for NarcThatCar, the Dallas-based company that says it is building a database for companies that repossess automobiles and is using a multilevel-marketing program to attract thousands of members.
Warnings were observed at the top of NarcThatCar ads on Craigslist in several cities this morning. The warnings appear at the top of the pages of individual postings and are highlighted in yellow, with a red lead-in:
“Avoid scams and fraud by dealing locally!” the lead-in warns. A “More info” link appears after a general warning about money scams, and the link resolves to a page that includes information on how to contact the FTC.
Screen shot: This Craigslist ad for NarcThatCar in Baton Rouge was one of several that included a warning message that linked to information on how to contact the FTC.
An Atlanta Craigslist ad for NarcThatCar with a headline of “Start Your Own Business! – $125 (Worldwide!)” includes the warning message. The ad calls NarcThatCar an ‘investment.”
“Make over $5000.00 a month with a $125.00 investment! Go to jnelson.narcthatcar.com!” the ad reads.
A NarcThatCar ad on Craigslist in Houston also includes the warning, which appears above a headline that reads, “Earn Extra Cash!… Collecting Data! (www.extracash4plates.narcthatcar.com).”
Meanwhile, a Craigslist ad for NarcThatCar in Oklahoma City also includes the warning. Its headline is “Data Entry/Networking.”
The warning also appears above a NarcThatCar ad in New York’s Craigslist, above a headline that reads “Make money by reporting license plate numbers” and a sales pitch that begins, “What would you do if you could get paid over $2 for every license plate number you write down?”
What once was an ad for Narc That Car on Craigslist in Austin, Texas, does not include the warning. Rather, the ad includes this message, “This posting has been flagged for removal.”
Elsewhere, a NarcThatCar Craigslist ad in Baton Rouge includes the warning, above a headline that reads, “The Simplist Homebase Marketing Job on the Planet! (Baton Rouge).”
The body copy of the ad says (in part), “Learn how to turn information into income NARC (National Automobile Recovery Company) ThatCar.com
“No Selling, No Products or Inventory
“100% Return on Investment as fast as 24 to 48 hours.
“Job Duty: Enter 10 random license plates per month to help create a National real time database that is used by: Police Department(criminal involvement), FBI(Amber Alert), Military(Terriorist), Banks, Car Rentals, Car Dealerships (RePo), and Major Business for marketing purposes.”
