Just hours after news broke of a racketeering indictment by Colorado prosecutors against a Denver-area man in an alleged Ponzi scheme, Michigan prosecutors announced the racketeering indictment of a Greater Detroit woman in what was described as a real-estate Ponzi scheme.
In the past two days, prosecutors from different agencies in different regions of the United States have announced three major Ponzi indictments brought under state or federal racketeering statutes.
On Tuesday,the FBI arrested former Fort Lauderdale attorney Scott Rothstein, 47, on federal racketeering charges in Florida.
Yesterday, Mark J. Jackson, 55, was indicted on state racketeering charges in Colorado by Denver District Attorney Mitchell Morrissey.
Early this morning Rita Gosselin of Grosse Ile, Mich., was arrested by investigators from the Southgate Police Department and the office of Michigan Attorney General Mike Cox.
Gosselin, 58, was charged under Michigan law with one count of continuing criminal enterprise (racketeering), and three counts of false pretenses over $20,000. In unrelated cases, Michigan prosecutors brought racketeering charges against Michael J. Morris and William T. Perkins in October in an alleged fraud scheme that targeted churches.
Bail for Gosselin was set at $300,000 cash. She was unable to post it, and was taken to the Wayne County Jail. A hearing for Gosselin is scheduled Dec. 15.
“Taking advantage of Michigan families, especially in today’s economy, will not be tolerated,” said Cox.
Prosecutors said Gosselin was at the helm of a Ponzi scheme “involving fraudulent real estate investments and stealing hundreds of thousands of dollars from Michigan families.”
To pull off the scheme, prosecutors said, Gosselin “enticed investors with claims she was able to purchase foreclosed and distressed properties in bulk and renovate the homes to sell at a profit.”
Investors were given promissory notes and promised regular returns on the money they entrusted to Gosselin.
“Few investors received any of the payments promised and all lost some, if not all the money they invested,” prosecutors said.
The alleged scheme fleeced at least 20 investors out of at least $500,000, prosecutors said.
EDITOR’S NOTE: The story below references a column by Renee McGaw in the Denver Business Journal. Make sure you read the column. The link is at the bottom of this story.
The column reminded us of what occurred in the opening hours of the prosecution against the assets of Florida-based AdSurfDaily Inc., accused in August 2008 of operating a $100 million Ponzi scheme. Reporters who called ASD got a recording featuring the voice of ASD President Andy Bowdoin and intoning that God was on the company’s side.
Within hours, Bowdoin’s supporters were complaining on Internet forums that the media refused to take ASD’s side of the story seriously. Rather than questioning why the media might find such a recording important enough to mention in stories, Bowdoin’s apologists then sought to discredit reporters by casting them as conspirators in a plot to defame Bowdoin and to discredit members of law enforcment by painting the government as “evil.” The attack even featured a campaign to have a Florida television station and Florida Attorney General Bill McCollum charged with Deceptive Trade Practices for daring to raise the issue of the legitimacy of ASD.
McGaw’s column on a Colorado company, Speed of Wealth LLC, is remarkable in a number of ways, perhaps principally in the sense that it shines a light on relentless email pitches to join online money-making “opportunities.” Not even serious Ponzi scheme allegations against Speed of Wealth principal Wayde McKelvy prevented McGaw from receiving pitches for other programs from him. The column leaves us with this question: Is it any wonder that much of America and the world views Internet Marketing as a vast wasteland filled with fraudsters and schemers?
On a side note, readers of the PatrickPretty.com Blog occasionally have chided us about our view that exclamation points should be used like garlic — sparingly. We’ve enjoyed the banter on the topic. McGaw’s column also raises the issue of exclamation points in marketing pitches.
Here, now, the story . . .
Denver Business Journal reporter Renee McGaw says she is being pounded with offers from Wayde McKelvy, a defendant in a Ponzi scheme lawsuit filed by the SEC last month.
McKelvy’s Colorado firm, Speed of Wealth LLC, was accused by the SEC of pitching a “green” Ponzi scheme for Mantria Corp. of Pennsylvania. The names of President Obama, former President Clinton and Secretary of State Hillary Clinton were prominently featured in a Mantria video that played on the Speed of Wealth website. The video, now missing from the site, was based on events that occurred in September at the annual meeting of the Clinton Global Initiative (CGI), one of President Clinton’s signature undertakings after he left the White House in January 2001.
McKelvy describes himself as a wealth coach — and not even the assertion he was part of a $30 million fraud has slowed him down, McGaw reports.
In a column yesterday, McGaw said she sent McKelvy an email Nov. 16 to inquire about the SEC allegations. (The SEC had brought the allegations earlier on the same day.) McGaw’s email to McKelvy triggered what she described as automated pitches describing her as a “fellow Wealthalete” and urging her to join money-making programs.
“I am totally focused on one thing right now which I believe will be very, very fun and the opportunity to put money in your pocket by owning you’re own business with the help of ‘The Donald’,†McGaw quoted McKelvy as writing in an email Nov. 18, two days after the SEC filed civil charges against McKelvy, his former wife, and Mantria officers Troy Wragg and Amanda Knorr.
The columnist noted she did not correct McKelvy’s spelling or punctuation when reproducing the email for readers of the Denver Business Journal.
“Yes, I am talking about the ‘Trump Network,’†McKelvy stressed to McGaw.
McGaw reported that McKelvy’s pitches often featured subject lines consisting of all capital letters and ending with exclamation points.
“YOU MUST START YOUR OWN BUSINESS Renee!†McKelvy advised McGaw in one email. “What You Have Been Taught About Building Wealth is DEAD WRONG!â€
Through the Mantria video, Speed of Wealth also dropped the names of former U.N. Secretary General Kofi Annan, President Laurent Gbagbo of the Ivory Coast, Mike Duke, CEO of Wal-Mart, Muhtar Kent, CEO of the Coca-Cola Co. and actor Matt Damon.
All of the individuals were among the prominent attendees of President Clinton’s CGI function. The video featured footage of Wragg appearing on stage next to Clinton.
Mantria was a “supposed ‘carbon negative’ housing community in rural Tennessee,†the SEC said.
Screen shot: Troy Wragg, whom the SEC said was a manager at a janitorial company before becoming CEO of Mantria Corp., next to President Clinton at the annual meeting on the Clinton Global Initiative in New York on Sept. 25.
But the “green†representations “were laced with bogus claims, and investors were falsely promised enormous returns on their investments ranging from 17 percent to ‘hundreds of percent’ annually,†the SEC said.
The agency charged that “Mantria’s environmental initiatives have not generated any significant cash, and any returns paid to investors have been funded almost exclusively from other investors’ contributions.â€
“These promoters fraudulently exaggerated Mantria’s green initiatives and used high-pressure tactics to convince investors to chase the promise of lucrative returns,†said Don Hoerl, director of the SEC’s Denver Regional Office. “In reality, the only green these promoters seemed interested in was investors’ money.â€
Think the Feds are the only thing to worry about if you’re in the Ponzi scheme business? Think again.
In yet another prosecution that demonstrates Ponzi schemers have more to fear than federal agencies such as the SEC, the CFTC, the FBI, the Secret Service, the IRS and the Postal Inspection Service, a Colorado man has been indicted by a local prosecutor under state racketeering, securities, theft and forgery laws.
Mark J. Jackson was sued civilly in April by Colorado Securities Commissioner Fred J. Joseph and Colorado Attorney General John W. Suthers. An order prohibiting the destruction of records was entered, and a receiver was appointed. The receiver now is suing Jackson’s father, Ted Jackson, amid allegations that the elder Jackson was a partner in the scheme and was unjustly enriched.
Denver District Attorney Mitchell Morrissey, a local prosecutor, opened a criminal probe, with the assistance of the Colorado Division of Securities. That local and state investigation resulted in the criminal indictment against Mark Jackson.
Mark Jackson, 55, was charged with 59 felony counts, including a single count of violating the Colorado Organized Crime Control Act and, as part of the racketeering scheme, 11 counts of securities fraud, 17 counts of theft and 30 counts of forgery.
“[B]eginning in 1995 Jackson portrayed himself as a successful day trader and took money from investors with promises of returns from 12 to 36 percent,” prosecutors said. “[I]nstead of investing the money, Jackson used it to pay other investors and also used investor money for his personal benefit.”
At the same time, prosecutors said, “Jackson prepared phony profit and loss statements and other documents with false statements.”
Victims sustained losses “estimated to be in the millions of dollars,” prosecutors said. Court documents suggest the alleged scheme involves more than $41 million.
Jackson is expected to surrender this week. Morrissey’s Economic Crime Unit is spearheading the probe.
A former supervisor with the Securities and Exchange Commission unwittingly aided a man accused of operating a Ponzi scheme in Arizona, according to a report by SEC Inspector General H. David Kotz.
Meanwhile, Kotz reported that the Office of Inspector General (OIG) also investigated a case in which an SEC enforcement accountant allegedly threatened a supervisor by email. The supervisor, according to Kotz, reported the incident to the SEC’s Security Branch, claiming that the accountant “routinely brought a ‘large buck knife’ to work.”
A “buck knife” commonly is associated with hunting, although the report did not identify the weapon as a hunting knife.
On April 1, investigators interviewed the accountant and discovered he was carrying a folding knife with “a 31/2 to 4-inch blade.” An investigator also discovered two similar knives in the accountant’s back pack. The knives were confiscated “immediately,” and the accountant was placed on leave and banned from the building.
“The OIG found that the Enforcement Accountant violated Title 18 U.S.C. § 930 of the
Federal criminal code by knowingly carrying dangerous weapons into a federal facility,” according to the Kotz report. “Specifically, the OIG found that on April 1, 2009, the Enforcement Accountant knowingly possessed at least three ‘dangerous weapons’ in a ‘federal facility,’ as those terms are defined in 18 U.S.C. § 930(g), and had routinely been in possession of dangerous weapons within the SEC building for several years despite his own admission that he knew it was unlawful to do so.”
Investigators also discovered evidence that suggested the accountant “was not completely truthful in his testimony before the OIG and in his previously-submitted Declaration for Federal Employment regarding his prior criminal conviction and probation for driving while intoxicated.”
Federal prosecutors referred the case to an administrative proceeding, and the SEC is seeking to fire the accountant. The dismissal case is pending.
Ponzi Case And ‘Soothsayer’
In the Ponzi case, the OIG concluded that a former supervisor in the SEC’s Office of Administrative Services used an SEC computer to exchange “approximately 2,300 e-mails that were related to the Ponzi scheme perpetrator and his companies.”
Although the Kotz report did not identify the specific Ponzi suspect by name, the Arizona Corporation Commission (ACC) did in a June 11 news release: Jerome Carter of Scottsdale.
ACC identified Carter as a purported “soothsayer” who could predict the future. Carter said on his website that he checked into a hotel in the World Trade Center on Sept. 10, 2001, one day before the 9/11 attacks.
Getting a “bad feeling” later in the day, Carter said, he checked out of the hotel. The Trade Center complex was struck by two hijacked airliners the next day, killing nearly 3,000 people.
Carter himself was killed in a motorcycle accident in September 2009, about four months after admitting he had operated the Ponzi scheme.
“Through a website, video teleconferences, radio shows and event appearances, Carter proclaimed himself as an international numerologist and spiritual adviser who could predict the future,” ACC said. “While working as a life coach to individuals in his VIP coaching program, Carter represented to potential investors that he could, through the use of numerology concepts, improve their financial well-being by investing in futures and commodities.
“As owner and operator of The Greatest Only Divine Productions, LLC and Good Only Done Productions, Carter sold investment and commodity contracts totaling $432,450 to at least 65 investors,” ACC said. “The Commission found that Carter used investor funds for his own personal use and benefit, but in Ponzi-like fashion, returned a total of $154,450 to some of the investors. In settling this matter, Carter admits to the Commission’s findings and agrees to the entry of the consent order.”
During its probe of Carter, ACC came into possession of emails from the SEC supervisor and turned them over to the OIG.
“The ACC investigator also informed the OIG that several other witnesses in the ACC investigation had identified the Supervisor as the person who handled money for this Ponzi scheme perpetrator and his companies,” the Kotz report said.
OIG investigators did not name the supervisor in the report, but said she took early retirement after the OIG probe began and accepted a $25,000 buyout.
“The OIG discovered that during the period in question, the Supervisor used her SEC e-mail account to conduct business on behalf of the Ponzi scheme perpetrator and his companies on virtually a daily basis,” the Kotz report said. “The OIG found that the Supervisor was extensively involved in handling the payments to and from his victims, and used her SEC e-mail account to communicate directly with those victims.”
No evidence was found that the supervisor knew Carter was operating a Ponzi scheme.
OIG investigators “did find that the Supervisor violated Commission rules and policies on the use of SEC office equipment, as well as the Standards of Ethical Conduct for Employees of the Executive Branch by using the SEC’s email system, her SEC computer, and other SEC resources to assist the Ponzi scheme perpetrator operate his companies, whether or not she knew those companies were a Ponzi scheme,” according to the report.
Federal prosecutors declined to file criminal charges, the Kotz report said. The OIG recommended that the SEC try to claw back the $25,000 buyout accepted by the former supervisor, and the matter is pending.
BULLETIN: Minnesota businessman Tom Petters has been found guilty by a Minnesota jury.
UPDATED 6:03 P.M. ET (U.S.A.) Jury deliberations encompassed 32 hours over all or parts of five days. Petters blamed the fraud on subordinates, but the jury did not buy into his explanation that he had been inattentive to business since the stabbing death of his son in 2004.
“There was a lot of people hurt, not just him,” a juror said, discounting Petters’ assertion that his family pain caused by the death of his son explained a massive fraud.
It was the largest fraud in Minnesota history, consuming as much as $3.65 billion. The scheme, which featured phantom sales of merchandise to big-box retailers, collapsed in September 2008. All of the counts against Petters were felonies. He effectively faces life in prison.
In addition to his liquidation business, which purported to buy merchandise from bankrupt retailers and resell it at a handsome profit to discount stores, Petters owned famous companies such as Sun Country Airlines and Polaroid Corp.
Prosecutors said the scheme was sustained by bogus purchase orders and persistent lying to investors.
Prosecutor Joe Dixon said the FBI, the IRS and the U.S. Postal Inspection Service put together an excellent case. Dixon noted that Petters faced a maximum sentence of 350 years in prison.
Shawn R. Merriman has pleaded guilty to mail fraud in a Ponzi scheme case that swindled dozens of investors in Colorado, Minnesota and Utah. The scheme involved more than $20 million, prosecutors said.
Merriman, 46, of Aurora, Colo., faces up to 20 years in prison and a fine of up to $250,000. The SEC said he used some of the money to buy valuable art, including works by Rembrandt.
Like Bernard Madoff and others, Merriman’s scheme featured bogus account statements.
“Merriman repeatedly deceived investors, many of whom considered him a personal friend, by sending them fictitious account statements showing annual rates of return of 7 to 20 percent,” the SEC said.
But Merriman “did not trade stocks and options after his first year of operations,” the SEC said.
Regardless, “he used millions of dollars in investor funds to support his lavish lifestyle and pay out withdrawals by other investors. He also offered ‘rebates’ to existing investors to entice them to invest additional money with him.”
Merriman also bought “classic cars, motorcycles, motor homes, a cabin in Idaho and fine art collections, including works by Rembrandt that are worth millions of dollars,” the SEC said.
Partial list of art seized by prosecutors in Shawn Merriman Ponzi case.
Among Merriman’s cars seized by prosecutors were an Aston Martin and a 1930 Lincoln. Prosecutors also seized at least 34 firearms, along with taxidermy. One of Merriman’s pastimes was safari.
Prosecutors said Merriman operated his scheme for 15 years before it collapsed. He once was a Mormon bishop.
In what is becoming a familiar refrain in the Ponzi universe, former Fort Lauderdale attorney Scott Rothstein threatened a Florida newspaper and one of its reporters in the weeks prior to the exposure of his $1.2 billion fraud, the Sun Sentinel reported.
The Sun Sentinel identified the reporter as Brittany Wallman.
“Am I not making myself clear?” Rothstein railed in a June 29 email to the newspaper’s attorney. “I just arrived home only to receive another message from another business associate advising that a representative of your client is asking questions about me and my business in a manner clearly intended to cast me and my business interests in a negative light . . . Your client’s representative is a renegade that stands for everything that your client should never tolerate, and guaranteed to result in your client being sued if their reporter continues on her current path.”
Rothstein, now charged with racketeering and other offenses, also tried to muzzle the newspaper in an earlier email that threatened legal action, according to the Sun Sentinel. On June 26, Rothstein railed against Wallman for asking questions that led to a July 11 story in which the Sun Sentinel reported Rothstein was paying Fort Lauderdale city police $1,080 a day to guard his home 24 hours a day — a cost of nearly $400,000 per year.
Another email threat — this one smarmy and passive-aggressive — was sent Aug. 4.
“Hey David . . . hope all is well. We are getting ready to file and serve our action against Brittany and the paper and wanted to give you a heads up. Do you want to accept service or should we just serve Brittany directly and the paper through its registered agent. Let me know… Be well, Scott.”
No lawsuit ever was served, the Sun Sentinel reported. By late October, Rothstein was fleeing to Morocco, his alleged giant Ponzi scheme involving fraudulent legal settlements about to be exposed.
In 2008, the Moultrie Observer, a Georgia newspaper, posted a note on its website that it planned to publish an editorial warning against Ponzi and pyramid schemes. The simple act of posting the note sparked a series of emailed threats against the newspaper.
The threats coincided with the exposure of the alleged AdSurfDaily and Golden Panda Ad Builder Ponzi scheme in Florida and Georgia.
“Curiously, the e-mails appeared to be a form letter with different names attached. And ironically, the only people who named any companies were those making the lawsuit threats,†the newspaper reported.
Throughout July 2008, various members of ASD used online forums to threaten the company’s critics with lawsuits. The threats continued even after the U.S. Secret Service seized tens of millions of dollars from the bank accounts of ASD President Andy Bowdoin.
Earlier this year, supporters of AdViewGlobal, an autosurf firm with close ties to ASD, took a page from the ASD playbook and threatened to sue critics. The threats were made despite the fact Bowdoin had been named a defendant in a federal lawsuit filed under RICO statutes.
The swine-flu (H1N1) outbreak has led to a “strikingly large malware campaign,” AppRiver reports.
An email being sent out by spammers at a rate of 18,000 per minute purports to be from the U.S. Centers for Disease Control and Prevention (CDC), but is actually from a fake CDC site that installs malware.
Recipients are asked to complete registration for the “State Vaccination H1N1 Program,” and then their computers become infected.
“The link is in fact to an executable file that contains a copy of a Trojan most commonly identified as xpack or Kryptik,” AppRiver reports. “[O]nce installed on your PC, this Trojan will create a security-free gateway on your system and will proceed to download and install additional malware without your authorization. It also enables a remote hacker to take complete control of your computer. This malware can log your typed keystrokes and send confidential personal and financial data (including banking information, credit card numbers, and website passwords) to a remote hacker.”
News of the swine-flu spam and malware attack came just days after Alan M. Ralsky, the “Godfather of Spam,” and three fellow spammers were sentenced to terms in federal prison.
Ralsky, 64, of West Bloomfield, Mich., received 51 months. Scott Bradley, 48, also of West Bloomfield, received 40 months.
Ralsky and Bradley also were sentenced to five years of supervised release following their release from prison. Each man was ordered to forfeit $250,000 seized by prosecutors in December 2007.
How Wai John Hui, 51, a resident of Hong Kong and Canada, was sentenced to 51 months in prison.
Hui was sentenced to three years’ supervised release following his prison term, and agreed to forfeit $500,000 to the United States.
John S. Bown, 45, of Fresno, Calif., was sentenced to 32 months in prison and three years’ of supervised probation after release. He agreed to forfeit $120,000 to the United States.
In a criminal information and news release dripping with the word “co-conspirators,” federal prosecutors, the FBI and the IRS said Ponzi proceeds were used to grease wheels in law enforcement and pollute the worlds of business and politics in South Florida.
Former attorney Scott Rothstein of Fort Lauderdale was arrested for racketeering yesterday. He was arraigned, denied bail and jailed. Residents are waiting for other shoes to drop in what is shaping up to be a scandal of monumental proportions.
No co-conspirators were named immediately. But even police officers were involved and received “gratuities,” prosecutors said. Politicians received donations designed to evade campaign-finance laws.
One crime targeted at clients of Rothstein’s law firm involved $57 million, fraudulent legal documents, forgeries and a claim a lawsuit had been won when it actually had been settled against the interests of the clients, prosecutors said.
“To perpetuate and conceal the fraud, defendant Rothstein and other co-conspirators created a false federal court order, purportedly signed by a Federal District Court Judge, stating that the clients had won the lawsuit and were owed a judgment of approximately $23 million. The false court order also stated that the defendant in the civil suit had transferred the funds to the Cayman Islands to avoid paying the judgment. Defendant Rothstein and other co-conspirators falsely advised the clients that to recover those funds, the clients were required to post bonds. In this way, defendant Rothstein caused the clients to wire transfer approximately $57 million to a trust account he controlled, purportedly to satisfy the bonds.”
But that was only a single element of a colossal fraud, prosecutors said.
“Rothstein and other co-conspirators used the funds obtained through the Ponzi scheme for their own benefit,” prosecutors said. “This included, for example, using the money to fund and operate [the Rothstein Rosenfeldt Adler (RRA) law firm], to make contributions to federal, state, and local political candidates, and generous donations to public and private charitable institutions.
“The money was also used to pay for lavish gifts, including exotic cars, jewelry, boats, cash and bonuses to individuals and members of RRA, to hire local police officers to provide security, and to provide gratuities to high ranking members of police agencies.
“In addition, the money was used to purchase controlling interests in restaurants and other businesses, and to socialize with politicians and sports figures,” prosecutors continued. “These expenditures were calculated to enhance defendant Rothstein’s reputation and ability to solicit potential investors in the Ponzi scheme, provide an air of legitimacy and credibility to RRA, engender loyalty, and deflect law enforcement scrutiny.”
Acting U.S. Attorney Jeffrey Sloman of the Southern District of Florida said the crime was epic and had stained the legal profession.
“Attorneys, like elected officials, hold a special position of trust in our society, and owe a corresponding duty to deal honestly with their clients and to promote their clients’ best interests,” Sloman said. “This attorney breached that duty and stole approximately $1.2 billion from clients and investors. He spent his clients’ money on real estate, cars, yachts, politics and philanthropy, all to create the illusion that he, his law firm, and his schemes were hugely successful.
“Now, the mansions, Ferraris, yachts, the law firm and his friends are gone,” Sloman said. “[Rothstein] sought to buy power and influence at the expense of his clients, and instead has potentially bought himself a lengthy prison sentence.â€
Rothstein, 47, faces up to 100 years in prison if convicted of racketeering and associated crimes such as mail fraud, wire fraud and money-laundering offenses.
A veteran FBI agent said Rothstein’s world was filled with artificial realities.
“Scott Rothstein appeared to be a charismatic, reputable attorney one could trust to invest one’s money and make a sizeable profit,” said John V. Gillies, Special Agent in Charge of the Miami Office of the FBI.
“We now know it was all smoke and mirrors,” Gillies said.
Daniel W. Auer, IRS Special Agent in Charge, said the investigation is ongoing.
“We will continue to move forward with this investigation, wherever it leads, and we will bring to justice those who defrauded the American public and members of our community out of their hard-earned money,†Auer said.
Eight U.S. Senators have introduced a resolution calling for banking sanctions against the Caribbean island nation of Antigua for stonewalling in the Ponzi scheme investigation of Allen Stanford.
The senators said Stanford might have lent the Antigua government “at least” $85 million before the alleged scheme collapsed earlier this year and that the money “presumably came from Stanford investor funds.”
Stanford is accused by U.S. regulators and criminal prosecutors of presiding over a multibillion-dollar Ponzi scheme through the sale of CDs. He is jailed in Texas awaiting trial.
The resolution calls on the United States to use its voices in the International Monetary Fund and the World Bank “to oppose making any loans to the Government of Antigua and Barbuda until that Government cooperates with the United States and compensates the victims of the Stanford Financial Group fraud.”
“Instead of stonewalling efforts to recover assets linked to the scam perpetrated by Allen Stanford and his firm, the government of Antigua and Barbuda should join U.S. and international organizations in trying to find some measure of justice for victims,” said Sen. Thad Cochran, R.-Miss. “Government officials in Antigua and Barbuda must understand that their lack of cooperation is unacceptable.â€
A Democrat — Sen. Jeanne Shaheen of New Hampshire — joined seven Republicans in introducing the resolution.
One Republican said Antigua and Barbuda were acting in “absurd” fashion.
“The Ponzi scheme perpetrated by Allen Stanford cheated thousands of people, many of them in the United States, out of their investments,†said Sen. Richard Shelby of Alabama.
Shelby is ranking Republican on the Senate Committee on Banking, Housing and Urban Affairs.
“It is essential that to the extent possible these victims get their money back,” Shelby said. “It is absurd that the Government of Antigua and Barbuda is standing in the way of helping victims, while also holding out its hand for funding. This resolution makes clear that the United States will not accept such behavior.â€
A Mississippi Republican agreed.
“Thousands of people have been victimized by the Stanford Ponzi scheme, including many who lost their life savings,†said Sen. Roger Wicker. “The cooperation of the Antigua government is essential to helping the victims of this fraud, but this assistance has been consistently denied. It is completely unacceptable for Antigua to receive any loan from the IMF and the World Bank, both of which receive significant funding from U.S. taxpayers. The American government needs to let it be known that this lack of cooperation is not acceptable. This resolution will send that message.â€
The alleged Stanford Ponzi sparked a banking crisis that rippled across the Caribbean and into Central and South America. At least one autosurf made a veiled reference to the crisis in February.
BizAdSplash was one of three surfs that came to life in the months following the seizure of funds tied to AdSurfDaily Inc., a surf registered in the United States and accused of running a $100 million Ponzi scheme.
One of the key sales points of BizAdSplash was its purported offshore location. Two other surfs — AdViewGlobal and AdGateWorld — also bragged about being offshore. Promoters for the surfs said the offshore locations provided protection from the SEC, the IRS and state attorneys general. Promotions for the new surfs repeatedly referenced ASD.
“We want to let you know that even though our banks in Panama are closed for the next day and half, the payment processors are NOT CLOSED,†BizAdSplash said on Feb. 24. “You can still buy Ad Packages through your chosen payment processor. You will get your 100% match today and will continue into next week.
“So,†BizAdSplash continued, “if you purchased new Ad Packages yesterday from outside your Balance, you received a 100% matching bonus.
“This 100% matching bonus will continue on today, through the weekend and on through Friday, March 6th!!!†the surf exclaimed.
On Feb. 27 — just three days later — BizAdSplash told customers it was ending its affiliation with StrictPay, a payment processor with Panamanian ties.
UPDATED 1:19 P.M. ET (U.S.A.) Former Fort Lauderdale attorney Scott Rothstein was arrested by the FBI this morning after being charged with racketeering and other offenses.
The arrest occurred only days after Rothstein was disbarred by the Florida Supreme Court. Rothstein pleaded not guilty. He then was jailed without bail.
Separately, federal prosecutors moved late last week to seize even more assets tied to Rothstein, including a luxury apartment in New York in the same building convicted Ponzi schemer Marc Drier had an apartment.
Like Rothstein, Drier was an attorney. He is serving 20 years for defrauding investment and law clients. Drier’s apartment in the building was 34C; Rothstein’s was 42D.
A prosecution under RICO statutes suggests investigators believe that Rothstein was part of a broader criminal enterprise that included others. The charges, which also included mail fraud and wire fraud, were part of a “criminal information,” as opposed to an indictment.
Rothstein’s 70-attorney law firm — Rothstein Rosenfeldt and Adler (RRA) — was described in today’s criminal information as an “Enterprise” as defined under federal racketeering statutes. Prosecutors charged that Rothstein had conspirators “known and unknown” who engaged in “a pattern of racketering activity.”
No alleged co-conspirators were named.
“The principal purpose of the racketeering conspiracy was to generate money for [Rothstein] and his co-conspirators through the operation of the Enterprise and through various criminal activities, including mail fraud, wire fraud, and money laundering,” prosecutors charged.
They asserted that the RRA law firm was the the “base of operations” for a Ponzi and fraud scheme.
“RRA was utilized by the defendant and his co-conspirators to unlawfully obtain approximately $1.2 billion from investors,” prosecutors charged.
See Nov. 22 story. See Nov. 23 story on allegations RRA attorneys and employees were being paid with Ponzi proceeds.
Read a story at SunSentinel.com. (Look to the left on the Sun Sentinel page to see a link to a video, with remarks from Rothstein’s attorney, who notably did not protest Rothstein’s innocence.)
