A new Pope has been elected. He is Jorge Mario Bergoglio of Argentina and will be known as Francis I.
Francis is the first Pope from South America.
Blog
-
NEW POPE! Francis!
-
BULLETIN: No Profitable Sunrise For Florida Ponzi Pitchman; Gary D. Martin Sentenced In North Carolina To 10 Years In Federal Prison For ‘Queen Shoals’ Money-Laundering Conspiracy And Ordered To Pay More Than $31 Million In Restitution
In a development that could give pause to promoters of the purportedly “private” Profitable Sunrise scheme now on the radar of regulators in North America and Europe, a Florida man has been sentenced to 10 years in federal prison for his role in pitching a purported “opportunity” known as Queen Shoals.The announcement of the prison sentence of Gary D. Martin, 61, was made by U.S. Attorney Anne M. Tompkins of the Western District of North Carolina. She was joined by Roger A. Coe, acting special agent in charge of the FBI office in Charlotte, and North Carolina Secretary of State Elaine F. Marshall.
Marshall’s office issued a cease-and-desist order late last month to Profitable Sunrise, a purportedly “private” program. Tompkins’ office, meanwhile, is involved in the probe of the alleged Zeek Rewards Ponzi scheme, which described itself as a “private” program, according to court files. In August 2012, the SEC said Zeek was selling unregistered securities as investment contracts and had gathered at least $600 million.
While Profitable Sunrise is alleged by regulators to be offering returns in excess of 300 percent a year, Queen Shoals promised a much lower annualized percentage of between 8 percent and 24 percent.
The $32.5 million Queen Shoals Ponzi scheme was operated by Sidney Hanson. Martin formed an LLC with a similar name and pitched Queen Shoals from Florida. Federal prosecutors effectively accused him of passing along lies told by Hanson to fleece investors, including senior citizens.
Chief U.S. District Judge Robert J. Conrad Jr., who ruled in August 2011 that promises of “guaranteed” annual earnings were used by Martin to lure customers into the fraud, described the effect as devastating
“People in their 60’s, 70’s, 80’s and even 90’s lost everything because Hanson and Martin defrauded them,” prosecutors quoted Conrad as saying.
And, prosecutors said, Conrad also noted that Martin “went into homes, got people to rely on him and told them things that weren’t true, and based on false representations, many lost their life savings . . . He is seriously culpable.”
Conrad ordered Martin to pay more than $31.7 million in restitution and to serve two years’ probation upon completion of the prison sentence.
The Martin case speaks to the issue of how a lack of due diligence on the part of promoters can cause problems if a scheme later turns out to be a scam, perhaps especially if promoters add their own lies to a pitch and recruit other pitchmen.
From a statement by prosecutors (italics/bolding added):
Court records show that although Hanson never directly told Martin that Queen Shoals was a Ponzi scheme, Martin induced victims to invest in the Queen Shoals Ponzi scheme through a series of false and fraudulent representations. Specifically, Martin falsely claimed that QSC had over 20 years’ experience in financial services and international finance and that he had a vast background in financial services, including the silver, gold and foreign currency trading markets. In fact, Martin had no such experience, held no professional licenses related to finance or investments and had never engaged in any silver, gold or foreign currency trading.
According to court documents, Martin, through the QSC web site and other means, also made false claims about QSC’s financial expertise in “Self-Directed IRA Strategies and Fixed Rate Accounts.” Martin held QSC out as “leaders in Professional Private Placement Retirement Planning” and falsely claimed that QSC had a “proven method of diversification [that] spreads the risk nicely for a balanced portfolio,” when, in fact, QSC offered no such diversification and funneled victim funds solely into the Queen Shoals Ponzi scheme. Court records show that Martin routinely vouched for the success and reliability of Queen Shoals by claiming to have personally invested a significant amount of his own money into Queen Shoals when, in fact, Martin personally invested only $4,000.
According to filed documents and today’s sentencing hearing, Martin engaged in money laundering transactions by utilizing the referral fees he received from Hanson to pay commissions to himself and the so-called QSC consultants. From in or about 2007 to in or about 2009, Martin received over $1.9 million in referral fees from Hanson and paid the consultants over $1.5 million during the relevant time period in return for inducing victims to invest in the Queen Shoals Ponzi scheme. These payments caused QSC consultants to induce additional victims to invest in the Queen Shoals Ponzi scheme, thereby perpetuating the scheme.
In March 2011, Hanson, then 63, was sentenced to 22 years in federal prison.
-
UPDATE: Canada’s Ontario And Quebec Join Alberta In Issuing Warning On ‘ProfitableSunrise’; [UPDATE: British Columbia, Too]
UPDATED 4:48 PM EDT (U.S.A.) British Columbia now also has issued a warning against Profitable Sunrise. See Comments thread below . . .First it was North Carolina in the United States. Alabama quickly followed.
And the United Kingdom’s Financial Services Authority also issued a warning about the Profitable Sunrise “program.”
Canada’s province of Alberta published a Profitable Sunrise warning yesterday. Ontario and Quebec followed today.
Here is Ontario’s warning in its entirety (italics added):
___________________________________________________________
OSC INVESTOR ALERT: Inter Reef Ltd., Roman Novak and Radoslav Novak (doing business as Profitable Sunrise)
TORONTO – The Ontario Securities Commission (OSC) is warning Ontario investors not to invest with Profitable Sunrise, which claims to be located in the United Kingdom while representing that its banking facilities are in the Czech Republic. Profitable Sunrise is offering investors “investment plans”, but Profitable Sunrise is not registered in Ontario to engage in the business of trading in securities or advising anyone with respect to investing in, buying or selling securities.
Profitable Sunrise is representing that its “investment plans” earn abnormal returns, “risk-free”, of 1.5 per cent – 2.7 per cent per business day, which translates into an annual return of over 300 per cent. On January 11, 2013, the OSC issued a warning to investors entitled “Beware: High-yield Investment Programs are Ponzi Schemes” that explains the risks of investing with companies like Profitable Sunrise. You can find the warning on the “OSC Investor News” section of the OSC’s website at www.osc.gov.on.ca.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in capital markets. Investors are urged to check the registration of any person or company offering an investment opportunity and to review the OSC’s investor materials available at www.osc.gov.on.ca.
If you have any questions or information relating to this matter, please contact the OSC Contact Centre at 1-877-785-1555.
___________________________________________________________
And here, through the Autorité des marchés financiers, is Quebec’s warning (italics added):
March is Fraud Prevention Month – Caution to be used when solicited by Profitable Sunrise
Tuesday, March 12, 2013
Montréal – The Autorité des marchés financiers (the “AMF”) is warning Quebeckers about investment contracts offered by Inter Reef LTD, also known as Profitable Sunrise on the Internet, which purports to be a British company and is not authorized to carry on business in Québec.
The North Carolina Department of the Secretary of State recently issued an order warning investors about offers published by Profitable Sunrise and its officer, Roman Novak, on the Internet. Investigators with the North Carolina Department of the Secretary of State say that Profitable Sunrise and its officer promoted five different investment plans through a website that offered rates of return ranging from 1.6% to 2.7% per business day. Investors were told their money would be used to fund short-term loans to businesses, “risk-free”. Secretary of State investigators have also discovered that victims were asked to make wire transfers of money to financial institutions in Eastern European countries, including the Czech Republic.
This week, the Alberta Securities Commission warned investors after it received reports from a Calgary-based banking institution that several of its customers have attempted to withdraw significant amounts of funds from their accounts for wire transfers to the Czech Republic.
Although there is no proof that Quebeckers invested in the scheme, the AMF urges great caution in dealing with offers by Profitable Sunrise. No person or company named Roman Novak, Inter Reef LTD or Profitable Sunrise is registered with the AMF. Since they are not registered with the AMF, solicitations by Roman Novak, Inter Reef LTD and Profitable Sunrise of Québec investors could contravene the laws administered by the AMF.
If you have responded to solicitations from Profitable Sunrise or any similar type of solicitation, please contact an officer at our Information Centre.
Reminder to investors
As part of Fraud Prevention Month, the AMF reminds consumers that it is important to ask questions (5 bonnes questions — in French only) before entrusting their savings to a person who solicits them, especially when promised a return that is too good to be true such as in this case.The Autorité des marchés financiers (the “AMF”) is the regulatory and oversight body for Québec’s financial sector.
-
BULLETIN: Purported ‘Sovereign Citizen’ Shot And Killed In Florida After Pointing Pistol At SWAT Team Members, Santa Rosa County Sheriff’s Office Says
BULLETIN: Jeffrey Allen Wright, a purported “sovereign citizen” wanted on arrest warrants for counterfeiting, was shot and killed March 8 after pointing a pistol at a Sheriff’s SWAT Team in Navarre, Fla., the Santa Rosa County Sheriff’s Office said.Wright, 55, had previous clashes with the Sheriff’s Office, the agency said.
From a statement by the Sheriff’s Office (Italics added):
The warrants for Wright’s arrest were for five counts of Counterfeiting, and five counts of Passing a Counterfeit Bill (both 3rd degree felonies). Wright has had confrontations in the past with the Sheriff’s Office, claiming that he is a “Sovereign Citizen” and denounced his United States Citizenship.
Wright has also told the Sheriff’s Office that he does not acknowledge State Laws and that he doesn’t have to comply with law enforcement because their requests are “unlawful”. Due to Wright’s perception of law enforcement, numerous deputies went to his residence to facilitate the arrest. When Wright was encountered by deputies, Wright produced a black object from his pocket, appearing to be a firearm, and concealed it behind his back. Wright then fled into the garage area and went up the stairs to the second floor. Wright then began to barricade the stairway so that deputies could not approach.
Wright then discharged a firearm one time. Wright made statements that he was “not a U.S. citizen, but a sovereign citizen, and that he would not be a servant of the king”. Wright also stated that if any deputies came up the stairwell, they would “not come back down”. Wright also stated that if deputies “if you ever want to see your families again, you will leave”.
Deputies withdrew from the immediate area and called a SWAT Team and negotiators, the Sheriff’s Office said.
“Wright refused to continue conversing with negotiators, and continued to state that deputies would have to ‘come up and get me,’” the agency said. “As the situation progressed, and due to Wright being armed, the SWAT team deployed gas into the second story of the garage. Wright was continuously given commands to come out, unarmed; however Wright would continue to yell ‘come and get me.’
Matters then turned even worse, the agency said.
“Wright then began to break out windows with a semi-automatic pistol,” the Sheriff’s Office said. “Wright then went to the top of the stairwell and began to remove the items he had used to barricade the entrance. Wright sat down at the top of the stairs, holding a handgun. While refusing to obey lawful commands to surrender, Wright raised the pistol and pointed it directly at SWAT team members at the bottom of the stairwell. Due to there being a great danger of being shot, three SWAT deputies simultaneously discharged their firearms at Wright.”
The purported “sovereign” was pronounced dead at the scene.
As is typical in officer-involved shootings, the three deputies have been placed on paid administrative leave, the agency said.
The Florida Department of Law Enforcement (FDLE) is conducting an investigation, the sheriff’s office said.
-
BULLETIN: Alberta Securities Commission Issues Warning On ‘Profitable Sunrise’ After First Calgary Financial Observes ‘Trend’ Of ‘Suspicious’ Overseas Transactions
BULLETIN: The Alberta Securities Commission (ASC) has issued a warning on the Profitable Sunrise “program.” The Canadian agency’s move followed on the heels of reports from First Calgary Financial that “several of its Calgary customers have attempted to withdraw significant amounts of funds from their accounts for wire transfers to the Czech Republic,” ASC said.“Albertans should be aware that Profitable Sunrise and its agents are not registered to sell securities in Alberta,” the agency said.
ASC is Alberta’s securities regulator. The agency noted that the Securities Division of the North Carolina Secretary of State issued a cease-and-desist order to Profitable Sunrise last month, amid allegations that the “program” was selling unregistered securities.
“It’s important for investors to know that there is no such thing as a high return, no risk investment,” said Bill Rice , chair and CEO of the ASC. “If you are persuaded to send money overseas, it may be difficult, if not impossible to get it back if something goes wrong.”
The United Kingdom’s Financial Services Authority issued a warning on Profitable Sunrise last week. So did the Alabama Securities Commission in the United States.
First Calgary is Canada’s ninth-largest credit union. A First Calgary executive said the company contacted ASC after observing unusual transactions.
“Our front-line employees are trained to identify suspicious transactions by members so that we may be able to stop them from becoming the possible victims of an investment scam,” said Debbie Pratt, vice president of retail banking for First Calgary Financial. “In this case, we noticed a trend and a quick call to the ASC allowed us to alert our members.”
Profitable Sunrise lists a business address in the United Kingdom. Regardless, the enterprise is soliciting funds to be sent to Raiffeisenbank AS in the Czech Republic, according to North Carolina investigators. An entity known as Melland Company SRO was listed in Profitable Sunrise wiring instructions as the beneficiary, according to the North Carolina order.
A credit union used by a North Carolina-based Profitable Sunrise investor blocked at least one transaction directed toward the Czech bank, citing suspicions of fraud, according to the order.
Among other claims, Profitable Sunrise purported to offer a “Long Haul” plan that paid 2.7 percent a week with an Easter payout. The Profitable Sunrise “program” is being pitched on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup.
Zeek Rewards, which the SEC in August 2012 called a $600 million Ponzi- and pyramid scheme, was promoted in part from the same forums. Some individuals have promoted both Zeek and Profitable Sunrise.
-
BULLETIN: Britain’s Financial Services Authority (FSA) Puts ‘Profitable Sunrise’ On Warning List Of ‘Unauthorised Firms And Individuals’
Source: FSA website. Red highlight by PP Blog. BULLETIN: The Financial Services Authority (FSA) of the United Kingdom has placed the Profitable Sunrise “program” on a warning list of “unauthorised firms and individuals.”
Profitable Sunrise also is under scrutiny by American regulators in North Carolina and Alabama. The HYIP “program” purportedly is operated by Roman Novak.
Separately, the New Zealand Herald is reporting that New Zealand’s Financial Markets Authority “says it is also looking into the activities of the website.”
Like “programs” such as Zeek Rewards, Legisi, AdSurfDaily and others, Profitable Sunrise is being promoted on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup.
Zeek, Legisi and ASD scammed a combined sum of at least $791 million, according to court filings in the United States.
-
DEVELOPING STORY: Pipe Bombs Reportedly Found In Pennsylvania Storage Unit Rented In Name Of Man Arrested In Ponzi Scheme Case
DEVELOPING STORY: It is early and facts remain unclear. What’s known, according to local news reports, is that the FBI notified local police in the area of Chester County in southeastern Pennsylvania that agents would be operating in the region.Late yesterday — sometime after 11 p.m. while some residents were sleeping — explosions were heard in the area of Valley Creek Park. The explosions appear to have been controlled detonations by law enforcement, which earlier had found dozens of pipe bombs in a storage unit near the town of Malvern. Members of bomb squads were seen in the area.
The storage unit was rented in the name of Istvan Merchenthaler, an accused Ponzi schemer.
From Malvern Patch (italics added):
Around 8:30 p.m., bomb squads from Montgomery County and Philadelphia began hauling the explosives from the storage facility to nearby Valley Creek Park. The explosives were transported inside large metal containers on trailers, and each trip involved a convoy of fire engines, ambulances and police vehicles.
From Chester County Daily Local News (italics added):
The source, who asked to remain anonymous due to the ongoing and sensitive nature of the investigation, said that the storage locker was registered to 42-year-old Istvan [Merchenthaler], a Chester County man facing federal charges in connection to a Ponzi scheme that officials say defrauded investors of about $2 million over the past seven years.
Officials close to [Merchenthaler]’s case said the suspect was connected to similar explosive investigations in other states, and added that he is facing charges in multiple jurisdictions throughout the east coast.
-
MAXIMUM IRONY? Man Tells British Newspaper That He Used Prepaid Mastercard From Banners Broker At ATM — And Received Counterfeit £20 Note
UPDATED AT 10:40 A.M. ET (U.S.A.) A member of the “Banners Broker” program tells The Bristol Post that he used a prepaid Banners Broker MasterCard at a NatWest ATM to withdraw £600 and that a counterfeit £20 note was in the stack of cash dispensed by the machine.The plan, Paul Scoplin reportedly told the paper, was to withdraw the cash at NatWest and then to deposit it into an HSBC account — but the plan didn’t go swimmingly.
“I took the cash over to HSBC straight away and they flagged up one of the notes,” he reportedly told the paper.
NatWest is investigating the note, according to The Post.
Banners Broker is a “program” that gained a head of steam in part from ceaseless promotions on Ponzi-scheme boards such as TalkGold and MoneyMakerGroup. Members are complaining about not getting paid and suggesting that Banners Broker is making selective payouts to sustain a fraud scheme.
Whether Scoplin’s reported claim that counterfeit currency somehow made its way into a NatWest machine would result in additional scrutiny of the Banners Broker “program” was not immediately clear.
In June 2012, the PP Blog reported that a site purportedly selling “customers” to members of the Zeek Rewards “program” also was pushing traffic to Banners Broker and JSS Tripler/JustBeenPaid, the bizarre, 730-percent-a-year “program” purportedly operated by Frederick Mann.
JSS/JBP may have ties to the “sovereign citizens” movement.
In August 2012, the SEC described Zeek as a $600 million Ponzi- and pyramid scheme operating online. JSS/JBP then morphed into a “program” known as “ProfitClicking,” amid reports of the sudden retirement of Mann. But now Mann, a former pitchman for the AdSurfDaily online Ponzi scheme, is back — this time as a pitchman for a “program” known as “ClickPaid.”
When Mann spoke during a recent ClickPaid conference call, the VOX identifier displayed the name “J. J. Ulrich” when Mann was speaking. Ulrich was associated with ProfitClicking, which has led to questions about whether Mann and Ulrich simply were extending an online fraud that started with JSS/JBP.
The presence of the various “programs” on forums linked to Ponzi schemes has led to questions about whether banks and payment processors are coming into possession of funds tainted by fraud. The “programs” are known to have promoters in common.
-
SALT LAKE TRIBUNE: Alleged Utah Fraudster Jeremy Johnson, 4 Others Indicted On Dozens Of Criminal Charges
RECOMMENDED READING: From the Salt Lake Tribune:
http://www.sltrib.com/sltrib/money/55960572-79/johnson-works-attorney-swallow.html.csp
Also see Deseret News story and AP report in the San Francisco Chronicle.
-
URGENT >> BULLETIN >> MOVING: Alabama Issues Warning On ‘Profitable Sunrise’
URGENT >> BULLETIN >> MOVING: The state of Alabama has issued a warning on Profitable Sunrise. The move follows on the heels of a cease-and-desist order issued last week by North Carolina.The warning comes in the form of an “investor alert” issued by the office of Joseph Borg, the director of the Alabama Securities Commission.
“We want to make our citizens aware of the potential perils of web-based investment marketing,” said Borg. “As with all investment opportunities, investors should thoroughly scrutinize any offer, especially if it comes from a foreign country,” Borg said. “Most investment offerings, as well as the person making an investment offering, must be registered with the Alabama Securities Commission. This is a critical first step in protecting the public from con artists and investment fraud.”
Borg urged “anyone in Alabama who has invested with Profitable Sunrise to contact the ASC’s Enforcement Division at 1-800-222-1253.”
From ASC (italics added):
An investigation of Roman Novak, Radoslav Novak and their company, Inter Reef, Ltd., doing business as Profitable Sunrise, revealed that the men allegedly promoted at least five different “investment plans” through a website that offered rates of return ranging from 1.6% per business day to 2.7% per business day for periods of from between 180 to 240 business days. Investors were told that their money would be used to fund short-term, “risk-free” loans to businesses, and that “all funds deposited with us are insured against loss” by a leading investment bank. Further investigation revealed that victims had been instructed to wire money to financial institutions in Eastern Europe, including one bank identified as being in the Czech Republic. ASC records revealed that neither of the men, nor the company they represent, are registered to conduct securities business in Alabama, as required by the Alabama Securities Act.
Read the ASC warning.
-
HIGH POINT (N.C.) ENTERPRISE: Zeek Reached Out To Pluck Utah Man; 1 Downline Had 1,500 Members, Victim Tells Paper
Zeek Rewards likely had a presence in all 50 U.S. states, plus U.S. territories. The High Point Enterprise, a publication in Zeek’s home state of North Carolina, today has a story about a Utah man who joined the “program” just prior to the SEC bringing allegations in August 2012 that Zeek was a $600 million Ponzi- and pyramid scheme.
From the Enterprise (italics added):
During recruitment meetings at a house in Richfield, Olsen said he was approached with a soft-sale pitch to become part of Zeek Rewards. Olsen was told that his $10,000 “would build my credit in the business” and allow him to reap greater income. The recruitment of Olsen took place over a period of months, and the approach was to build a relationship of trust rather than “twist my arm,” he said. The Zeek Rewards affiliates that Olsen met emphasized that the money he provided wasn’t an investment. But when the Securities and Exchange Commission shut down Zeek Rewards, the federal agency called it an unregistered securities business.
“They said that they would be in trouble if they called it investing,” Olsen recalls.
Read the full story in the Enterprise, which described Olsen as an individual who’d just lost his job and discussed a plan with his wife by which the couple would sell a family vehicle to join Zeek.
See “Zeek, The ‘I’ Word And The Weight Of History . . .,” an editorial published by the PP Blog on July 25, 2012.
EDITORIAL NOTE: Ponzi schemes cause real pain to real people. Regardless, the Ponzi-board apologists for Zeek continue to demonize the court-appointed receiver, continue to engage in wordplay to sanitize “opportunities” and continue to fuel schemes such as Zeek by parroting disclaimers such as “don’t spend more than you can afford to lose.”
Blaming victims or insisting no victims exist is one of the most odious practices of the serial Ponzi pitchmen.
