Already facing criminal Ponzi and loan-sharking charges in Massachusetts and a disgorgement order of at least $3.1 million in an SEC civil case brought him in April 2013, Steven Palladino faces a new hurdle: He has been arrested again for loan-sharking.
That arrest came yesterday, according to the office of Suffolk County (Mass.) District Attorney Daniel F. Conley.
Less than two months ago (July 18, 2013), the SEC said it had obtained a disgorgement order of at least $3.1 million against Palladino and his company, Viking Financial Group Inc.
On Aug. 11, Palladino repeatedly “began calling and texting” to demand repayment of $30,000 from a customer to whom he’d provided an illegal loan in February 2013 at a usurious interest rate of 40 percent, Conley’s office said.
“The victim contacted Boston Police, who yesterday apprehended Palladino in his 2012 Mercedes CLS 63 AMG Coupe at a West Roxbury gas station,” Conley’s office said. ” In his pockets were wads of cash totaling $4,395 and a check to the Viking Financial Group for $3,499.47.”
UPDATED 3:33 P.M. EDT (U.S.A.) Thanks to PP Blog reader “Tony,” who first posted a link to the FCA warning in this story thread on how a Profitable Sunrise Facebook site was being used to promote TelexFree, an alleged pyramid scheme.
In April 2013, the SEC described Profitable Sunrise as a murky offering fraud that may have gathered tens of millions of dollars. SolidTrustPay, a Ponzi-forum darling used by a stunning number of schemes, reportedly was one of the processors used by Profitable Sunrise. Zeek Rewards, alleged last year by the SEC to have been a combined Ponzi- and pyramid scheme that had gathered at least $600 million, also used SolidTrustPay, according to court filings. So did AdSurfDaily, a $119 million Ponzi scheme broken up by the U.S. Secret Service in 2008. And so did JSSTripler/JustBeenPaid, a “program” purportedly operated by Frederick Mann that has spawned at least three reload scams and, like ASD, may have ties to the “sovereign citizens” movement. “Sovereign citizens” may be gaining a toehold in Canada, one of the bases of SolidTrustPay. (Please note that the “opportunities” referenced above constitute only a small sampling of the HYIP schemes enabled by SolidTrustPay.)
Also see this 2012 Consent Order between the Securities Department of the U.S. state of Arkansas and SolidTrustPay in which SolidTrustPay agreed to pay a $60,000 civil penalty and did not contest findings that it had been operating illegally in the state for years, had processed about $12 million in Arkansas through about 43,600 transactions and had illegally mined more than $331,000 in fees and commissions in the state.
We believe this firm has been providing financial services or products in the UK without our authorisation. Find out why to be especially wary of dealing with this unauthorised firm and how to protect yourself from scammers.
Almost all firms and individuals offering, promoting or selling financial services or products in the UK have to be authorised by us.
However, some firms act without our authorisation and some knowingly run scams like share fraud.
This firm is not authorised by us but has been targeting people in the UK:
SolidTrust Pay Ltd
Website: www.solidtrustpay.com
How to protect yourself
We strongly advise you to only deal with financial firms that are authorised by us, and check the Financial Services Register to ensure they are. It has information on firms and individuals that are, or have been, regulated by us.
If a firm does not appear on the Register but claims it does, contact our Consumer Helpline on 0800 111 6768.
If you think you have been approached by an unauthorised firm or contacted about a scam, you should contact our Consumer Helpline on 0800 111 6768. If you were offered, bought or sold shares, you can use our share fraud reporting form.
Despite at least seven pyramid-scheme probes into TelexFree, an apparent affiliate of the MLM “program” was promoting it yesterday on Facebook — on a site once used to lead cheers for the Profitable Sunrise scheme.
A Facebook cheerleading site for Profitable Sunrise — alleged in April by the SEC to have conducted an offering fraud that may have gathered tens of millions of dollars through offshore bank accounts — again is being used to drive dollars the TelexFree scheme. The same Facebook site has been used to drive cash to multiple schemes. Some of the schemes already have disappeared, taking unknown sums with them.
“100% Guaranteed Get Paid To Post Telexfree Ads,” a post on the Profitable Sunrise site roared yesterday. There was no mention that at least seven pyramid-scheme probes into TelexFree are under way in Brazil.
The TelexFree pitch on the Profitable Sunrise Facebook site is surrounded by claims that a “conference call” has been held with a purported Profitable Sunrise “Admin” and that a new call will be held today and that some sort of good news is in the offing.
With respect to Profitable Sunrise, a post dated Aug. 21 declares that the U.S. government “Is The Crooked One.”
In 2010, FINRA said that HYIP fraud schemes were spreading though social-media sites through which pitchmen seek to sanitize the scams by making them appear to be legitimate programs.
“Whack-a-mole” also is an element in the scams: As soon as one scam is shut down, others pop up to replace it. The interconnectivity of the schemes and the willful blindness of many participants put banks and payment processors in the position of becoming warehouses for fraudulent proceeds, leading to questions about money-laundering, wire fraud and national security.
In August 2012, the SEC said the Zeek Rewards MLM scheme had gathered at least $600 million through a combined Ponzi- and pyramid scheme. The final haul of Profitable Sunrise, which the SEC described in April 2013 as a scheme operated by an apparent ghost, is unknown.
By some estimates, TelexFree has gathered $300 million or more. Some promoters have planted the seed that TelexFree was “authorized” by the U.S. government. The U.S. government does not authorize such schemes.
BehindMLM.com is reporting today that investigators in Brazil have established promotional links between TelexFree and BBOM, another alleged fraud scheme operating in Brazil.
The deadline for filing claims in the Zeek Rewards Ponzi-scheme case is 11:59 p.m. prevailing Eastern time on Thursday, Sept. 5, 2013. That’s only two days from today.
Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina is presiding over the Zeek case. North Carolina is in the U.S. Eastern Time Zone, the prevailing time zone for Zeek claims.
On May 8, 2013, Mullen approved the claims process, set the bar date and approved the receiver’s method of administering the process. The claims portal opened on schedule on May 15. Claims submitted after the Sept. 5 deadline “are automatically disallowed pursuant to the Order approving the Claims Process,” according to the receiver.
On Sept. 28, 2012, the PP Blog reported on bizarre court filings linked to “sovereign citizens,” “Freemen-on-the-Land” and others in Canada. The story may provide some additional context for a story published yesterday by the Global Post with a Vancouver dateline.
From the Global Post: “Police officers, Crown lawyers and judges have been sued or been named in multimillion-dollar ‘liens’ or ‘ecclesiastical notices’ or other legal manoeuvres.”
Notaries public reportedly have encountered menacing behavior from “sovereigns” or “freemen.” Police have experienced the same during traffic stops.
And there is concern about encounters involving firearms, according to a bulletin quoted by the Global Post.
UPDATED 1:57 P.M. EDT (U.S.A.) A U.S. Congresswoman representing a district in Hawaii was repeatedly menaced by a man who threatened to cut off her head, U.S. Capitol Police said in an affidavit.
Aniruddha Sherbow now has been arrested in Mexico and turned over to U.S. authorities in California for later return to the District of Columbia, the FBI said. He is facing a charge of transmission of threats in interstate commerce. The charge is filed in the District of Columbia, and the victim in the case is U.S. Rep. Tulsi Gabbard.
Gabbard, a Democrat, is a newly elected member of Congress. This is from her biography on her official Congressional website (italics added):
In 2004, Tulsi voluntarily deployed to Iraq with her fellow Soldiers of the 29th Brigade eventually serving two tours of combat duty in the Middle East. Tulsi was awarded the Meritorious Service Medal during Operation Iraqi Freedom, was the first female Distinguished Honor Graduate at Fort McClellan’s Officer Candidate School, and was the first woman to ever receive an award of appreciation from the Kuwaiti military on her second overseas tour. Tulsi continues to serve as a Captain in the Hawaii National Guard’s 29th Brigade Combat Team. In between her two tours, Tulsi worked in the U.S. Senate as a legislative aide to Senator Daniel Akaka, where she advised the senator on energy independence, homeland security, the environment, and veterans’ affairs.
In 2010, Tulsi ran for the Honolulu City Council and served as Chair of the Safety, Economic Development, and Government Affairs committee and Vice Chair of the Budget committee. Representing Hawaii’s 2nd Congressional District, Tulsi is one of the first two female combat veterans, first Hindu and first female of Samoan ancestry to ever serve as a member of the U.S. Congress.
BULLETIN: Zeek Rewards members are being targeted in a new scheme with ties to the Phil Piccolo organization and are being solicited for sums ranging from $600 to $60,000 “in return for ” . . . “guaranteed 50 percent interest” from a purported “unique and legal loan system” over an unspecified time period, the PP Blog has learned.
The offering, which hints of some sort of falling out with Zeek’s management, has been styled on YouTube as “The Diamond Club by TRUE CASH.” The emerging “program” was the subject of an email pitch yesterday that appears to have been targeted by an unknown party at former Zeek “Diamond” affiliates, potentially including some of Zeek’s largest “winners” who have exposure to clawback lawsuits filed by the court-appointed receiver and who previously have been solicited to make contributions to a purported defense fund for Zeek affiliates. Zeek “losers” also could be targets.
Previous schemes linked to Piccolo include the uber-bizarre Data Network Affiliates (DNA) “program” and One World One Website (OWOW), an equally bizarre money grab. (Use the PP Blog’s search function for information on those “programs.”)
In August 2012, the SEC described Zeek as a $600 million Ponzi- and pyramid scheme. In April 2013, the SEC took down a purported “loan” program known as Profitable Sunrise that may have gathered tens of millions of dollars through an alleged offering fraud. How the “The Diamond Club by TRUE CASH” offering intends to collect money is unclear, although a website to which pitchmen are directing traffic includes the logo of SolidTrustPay, one of the offshore processors used by Zeek.
Certain members of a Zeek-related email chain received the purported “Diamond Club” pitch yesterday. Hinting of bad blood, the pitch appeared below this headline, “Zeek Management Belongs in Prison – On 8/27/2013 I earned over $500,000 – I will pay your way in from $600 to $3000.”
How the $500,000 purportedly was earned was not explained. Also unclear was the identity of the sender. Among the claims in the pitch is this one (italics added):
IF YOU LOST $10,000 IN ZEEK OR RECRUITED 10 PEOPLE IN ZEEK I WILL PUT UP $3,000.00 FOR YOU
The principal part of the pitch claims this: “I just made $500,000.00[.] I will put up the $600 minimum for you – You pay me back ‘ONLY OUT OF COMMISSIONS’. If you are already in one of TCN 12 opportunities and want to be on my “DIAMOND CLUB” Team then you need to re-sign up. If you are resigning up you will need a new e-mail address. Get a free g-mail account from Google.”
From the lower-right corner of the True Cash Network website. Source: Aug. 30 screen shot.
In the same email, the pitch points recipients to a YouTube video and a website URL of ThePowerTeam.TrueCashNetwork.Com. “TrueCashNetwork” is using the same acronym used by TextCashNetwork (TCN), an earlier scheme linked to Piccolo and Joe Reid, a longtime huckster associated with Piccolo. On the TrueCashNetwork website, an emblem labeled SiteLock SECURE appears, along with the word “Passed.” The emblem incongruously includes the name of “TEXTCASHNETWORK.COM,” even though it appears on the TrueCashNetwork domain. The TrueCashNetwork domain appears to have been registered behind a proxy on June 28, 2013.
Reid, according to the TrueCashNetwork website, is the new TCN’s “Master Referral Agent” or “MRA.”
Precisely what happened with the original TCN, a purported daily deals site that purportedly used text-messaging, never has been clear. The emerging TCN, however, appears to have access to the original’s database and appears already to have used it to create affiliate links for “old” TCN members — this despite the fact TextCashNetwork is listed in Wyoming as a “dissolved” entity and its members may not have given permission to be ported to the “new” TCN.
These links shown in Google search results are showing the name of “textcashnetwork” in the URL. But all of them rotate to True Cash Network.
The “new” TCN purports to be operating as “True Cash Network, Inc.” Disputes, according to its website, will be handled under Wyoming law, but there appears to be no corresponding registration for True Cash Network in the state. Meanwhile, the “new” TCN is using the same Boca Raton (Fla.) business address as the “old” TCN. The old TCN once curiously purported that a member’s agreement with it “may not be transferred or assigned without prior written consent of REX Venture Group.”
Rex was the operator of Zeek Rewards and one of the defendants in the SEC’s Ponzi case.
True Cash Network — like TextCashNetwork before it — appears to be positioning itself as an MLM company that pushes affiliate products, including a “Medical Savings Plan,” X8 Energy Gum, Parcman Male Enhancer and more.
While TCN was operating as TextCashNetwork, the Piccolo organization appears to have tried to dupe people into believing the company was owned by Johnson & Johnson, a component of both Dow Jones and the S&P 500 and an internationally famous maker of pharmaceuticals and consumer products that are household names.
EDITOR’S NOTE: The screen shot above is from the PP Blog during a spam wave. It was taken yesterday and shows that 13 of 18 “readers” at the Blog between 10:11 a.m. and 10:18 a.m. were using IPs that resolve to China.
Many of you have heard the website of the New York Times was brought down two days ago. The Times still was having trouble yesterday, according to USA Today.
From USA Today (italics added):
The SEA, a group of hackers who support Syrian President Bashar Assad, claimed responsibility online and said it also hacked Twitter’s sites.
Although the mechanics (reported by Fox News to be a “spear phishing attack,” the subsequent theft of log-in details and DNS hijacking at the registrar level) of this week’s attack on the Times were different than the mechanics of various attacks directed at the PP Blog over the years, the result was the same: The loss (or the limiting of) the ability to report, educate, opine and, yes, generate the revenue needed to report, educate and opine in the coming hours, days, months and years.
Destroying or altering the functionality of websites that are the very embodiment of the free press is incompatible with Democracy, making the attack on the Times an attack on freedom itself.
The PP Blog encountered DDoS attacks (in 2010) that knocked the site offline for days. There have been follow-up traffic floods, including one in 2011 in which the Blog received a claim of responsibility from a “master of execution” purportedly from the HYIP sphere. The PP Blog went down twice over the past weekend. Both today and yesterday the Blog has been relentlessly targeted by what appears to bots whose IPs appear to originate in China.
Beyond the commonality of the IPs, the masters appear to be quite interested in scraping content snippets from other websites and repackaging it in bizarre fashion in apparent bids to sell designer goods that may not be the real thing. Put another way, apparent would-be capitalists who apparently have control of a wide range of Chinese IPs are entitling themselves to a free ride on the the bandwidth of the PP Blog in the United States and are trying to attract “customers” for goods that may or may not be original — while perhaps also setting the stage for “customers’” identities to be stolen or otherwise misused.
A spam the PP Blog received last night included a dateline that purported to be from the AP. Earlier in the day, the Blog received a spam that appeared to have been lifted from a 2011 AP report on the departure of Sheila Bair from the FDIC. Like most of the recent spam received by the Blog, these two appeared to be hawking designer goods — or maybe, just maybe, trying to dupe people into visiting websites designed to pick pockets in more clever ways.
The screen shot above reflects only a small sampling of the resources-draining spam received yesterday morning by the PP Blog. Each spam appears to have been assigned its own bogus individual Gmail address. The red rectangles on the right highlight the PP Blog stories (or links) targeted by the spammers/bot masters. Had the wave been strong enough to cripple the Blog, readers interested in accessing the stories/links would not have been able to do so. In fact, nothing on the Blog would have been accessible — as was the case for at least four hours this past weekend.
“Marcum’s scheme began to unravel in mid-2013, when certain of his investors began demanding distributions. Marcum could not comply, because virtually all of his investors’ money is gone. However, Marcum has attempted to reassure his investors that their investment is secure by producing fabricated documents showing that he has purported net worth of nearly $300 million. In fact, Marcum is nearly broke, and his accounts contain less than $2,000.” — SEC complaint against John K. Marcum, Aug. 26, 2013
URGENT >> BULLETIN >> MOVING: The SEC has gone to federal court in Indianapolis to obtain an emergency asset freeze against John K. Marcum and Guaranty Reserves Trust LLC. Marcum was accused by the agency of conducting a purported day-trading Ponzi scheme that gathered $6 million, collateralizing a $3 million line of credit with Ponzi proceeds — and using the line to a fund “a bridal store, a bounty hunter reality television show, and a soul food restaurant owned and operated by the bounty hunters.”
Investors did not know their money was being used in this fashion, the SEC alleged.
Moreover, the SEC charged, Marcum swindled investors by targeting their retirement savings, providing account statements showing false gains and promising a guaranteed return of the principal. Some of the money went to “pay personal expenses accrued on credit card bills, including airline tickets, luxury car payments, hotel stays, sports and event tickets, and tabs at a Hollywood nightclub.”
And when the scheme was imploding, Marcum told existing investors that he intended to recruit new investors, setting the stage for a new round of swindling, the SEC charged.
“Marcum tricked investors into putting their retirement nest eggs in his hands by portraying himself as a talented trader who could earn high returns while eliminating the risk of loss,” said Timothy L. Warren, acting director of the SEC’s Chicago Regional Office. “Marcum tried to carry on his charade of success even after he squandered nearly all of the funds from investors.”
Marcum, 49, resides in Noblesville, Ind., the SEC said.
In a particularly disturbing series of allegations, the SEC alleged that Marcum bartered his life during a conference call with investors in a bid to keep the scam afloat.
George Louis Theodule, identified by the SEC in a 2008 civil case as a multimillion-dollar Ponzi huckster and affinity fraudster largely targeting the Haitian community through so-called “investment clubs,” now has been arrested on criminal charges, federal prosecutors in the Southern District of Florida said.
Investors were duped into believing Theodule’s HYIP “program” through entities known as Creative Capital Consortium LLC and A Creative Capital Concept$ LLC had been endorsed by a regulatory agency, the SEC said in December 2008
The FBI and the Florida Office of Financial Regulation joined in the probe, prosecutors said.
“This case provides an egregious example of someone exploiting the trust of members of their own community,” said OFR Commissioner Drew J. Breakspear.
“Ponzi schemes, affinity fraud schemes, and high-yield investment fraud scams such as this pose a serious threat to people,” said U.S. Attorney Wifredo A. Ferrer.
Theodule, formerly of Wellington, Fla., is 52. He has been charged with with multiple counts of wire fraud, securities fraud and money-laundering, prosecutors said.
“This is a stark reminder that promises of large returns with little risk should immediately send up red flags and make investors run the other way,” said Michael B. Steinbach, special agent in charge of FBI’s Miami office..
Screen shot from Newseum. Red highlight by PP Blog.
UPDATED 2:31 P.M. EDT (U.S.A.) A story on bogus liens filed against a Minnesota sheriff and others received prominent treatment in the New York Times today, appearing on Page A1 (the cover page) — and above the fold in the New York edition.
The story touches on the cases of Thomas and Lisa Eilertson, both of whom are jailed in Minnesota in part because they filed bogus liens totaling at least $25 million against Hennepin County Sheriff Richard Stanek. Over time, the Times reports, the Eilertsons filed “more than $250 billion in liens, demands for compensatory damages and other claims against more than a dozen people, including the sheriff, county attorneys, the Hennepin County registrar of titles and other court officials.”
The Eilertsons paid attention to a “sovereign citizen guru” who pitched a lien-filing strategy described as “death by a thousand paper cuts,” the Times reports.
Already facing criminal Ponzi and loan-sharking charges in Massachusetts and a disgorgement order of at least $3.1 million in an SEC civil case brought him in April 2013, Steven Palladino faces a new hurdle: He has been arrested again for loan-sharking.
