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  • UPDATE: Nicholas Cox, Figure In North Carolina Fraud Scheme Operating Near Ground Zero For Zeek Rewards, Sentenced To Federal Prison

    With the alleged $600 million Zeek Rewards Ponzi scheme dominating local headlines in North Carolina’s Piedmont Triad region, including the city of Lexington in Davidson County, an earlier, smaller fraud scheme operating in the region largely fell out of the news.

    ponziblotterBut the Integra Capital Management LLC Ponzi and fraud scheme operated by Nicholas Cox and Rodney Whitney is back in the headlines. Cox, 35, of Lexington, has been sentenced to three years in federal prison, followed by three years’ supervised release, for his role in Integra Capital’s $3.2 million commodities and Forex swindle.

    Whitney, 50, from the nearby community of Archdale, pleaded guilty in January. He was sentenced to five years in federal prison.

    The Integra Capital scam, which had a Ponzi component, operated between September 2006 and August 2009, the CFTC said in September 2010. Among other things, the fraud scheme was notable for destroying a myth: that “opportunities” that send out 1099 tax forms to investors could not possibly be operating a scam.

    Cox and Whitney were charged both civilly and criminally. The CFTC led the civil probe; the U.S. Postal Inspection Service led the criminal investigation. Cox was arrested in May 2011 in Denton, N.C. Like Zeek’s home base of Lexington, Denton is in Davidson County.

    During Zeek’s run, some promoters argued that the enterprise could not be a scam because it collected data to be used on tax forms. Promoters also argued that Zeek was above-board because it was registered as a corporation in North Carolina.

    Records show, however, that Integra Capital also was registered as a North Carolina corporation — with business addresses in the Triad cities of High Point, Denton and Archdale. Neither Integra’s registration nor the issuance of tax forms proved to be proper barometers for investors to follow.

    What matters in Ponzi and financial-fraud schemes is how the money moves within the sphere of the actual practices of a business, not whether a company is a registered entity that issues tax forms.

    Citing court documents, the U.S. Department of Justice said that “Cox and Whitney obtained and misappropriated more than $3.2 million in investor funds and fabricated account statements and tax forms to conceal their fraud.”

    In December 2012, Cox pleaded guilty to one count of conspiracy to commit mail fraud, five counts of mail fraud and one count of conspiracy to commit money laundering. Earlier, in March 2011, Whitney pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of conspiracy to commit money laundering.

    “Cox and Whitney used the money invested by later investors to pay the monthly investment returns they had promised to earlier investors,” prosecutors said today.

    And the Triad duo also bought real estate, funded other business ventures and purchased automobiles and other personal goods and services, prosecutors said.

    In September 2012, the SEC said Lexington-based Zeek was a “classic” Ponzi scheme in which “[m]ost of ZeekRewards’ total revenues and the ‘net profits’ paid to investors” were “comprised of funds received from new investors.”

  • URGENT >> BULLETIN >> MOVING: KABOOM! 2 Connecticut Women Found Guilty In Cash-Gifting Pyramid Scheme

    breakingnews72URGENT >> BULLETIN >> MOVING: (2ND UPDATE 6:44 P.M. ET U.S.A.) Both of the defendants on trial in federal court in Connecticut in a cash-gifting pyramid scheme known as Women’s Gifting Tables have been found guilty of wire fraud and filing false tax returns.

    The jury returned the verdicts against Jill Platt, 65, and Donna Bello, 56, this afternoon. Both women live in Guilford. They were charged in May 2012. A third woman, Bettejane Hopkins, 66, of Essex, pleaded guilty.

    In returning the guilty verdicts in about two hours, the jury rejected defense contentions that the women believed their cash-gifting “program” that gathered $5,000 from each participant and used a food theme was legal.

    Prosecutors called it a fraud scheme designed to enrich some participants at the expense of others.

    “As the jury’s swift verdict of guilty on all counts makes clear, ‘Gifting Tables’ are pyramid schemes and illegal, plain and simple,” said U.S. Attorney David B. Fein. “These defendants enriched themselves while fraudulently misrepresenting material facts about the Gifting Tables and conspired to hide their income from the IRS. I commend the agents of IRS Criminal Investigation for their thorough investigation of this matter, which is ongoing.”

    Fein this afternoon threw down the gauntlet against cash-gifters.

    “During the trial, the jury heard evidence that other Gifting Tables continue to operate in Connecticut,” he said. “The jury’s verdict today is fair notice to anyone participating on Gifting Tables that any money received is taxable income and that they may be involved in an illegal pyramid scheme.”

    Included among the damning evidence against Platt and Bello was email correspondence, prosecutors said.

    “I’m pleased to see that the jury saw that the ultimate purpose was the enrichment of the defendants,” said William P. Offord, IRS Criminal Investigation Special Agent in Charge of New England.

    From a statement late this afternoon by prosecutors (italics added):

    Evidence at trial included several emails, including an email sent by Platt in March 2009 that told a participant: “It’s sort of a joke that I refer to our freezer as the ATM.”  Later in March 2009, Bello complained to Hopkins and another individual about two recruits, stating: “They have had enough parties. Its [sic] costing us a small fortune in their food and wine delights. No more parties until they commit with the cash.”

    In June 2009, Bello sent an email that said “I am not a . . . saint . . . . I’m teaching you all how to make an extra 80 grand a year . . . . Isn’t that enough?”

    Platt and Bello were found guilty of one count of conspiracy to commit wire fraud, one count of conspiracy to defraud the IRS and a combined total of 15 counts of wire fraud. (Eleven against Bello and four against Platt.) Meanwhile, the jury found Bello guilty of two counts of filing a false tax return. Platt was found guilty of one count of filing a false tax return.

    Sentencing is set for May 15 before Chief U.S. District Judge Alvin W. Thompson. The women potentially face years in prison.

    Cash-gifting schemes may surface as forms of affinity fraud. They often are targeted at people of faith, and purveyors may claim the “programs” are legal.

  • BULLETIN: Oh, Utah! FTC Says Yet-Another Scam Used Shell Companies To Bilk Consumers And Dupe Payment Processors

    Steve Sunyich of Ideal Financial Soutions. Source: Website.
    Steve Sunyich of Ideal Financial Soutions. Source: Website.

    UPDATED 1:17 PM ET (FEB. 27. U.S.A.): The FTC has sued six Nevada-based companies with ties to a call center in St. George, Utah, amid allegations that the firms and corporate officers scammed consumers and payment processors in a $25 million fraud scheme.

    Nevada and St. George were ground zero for the alleged $275 million Jeremy Johnson/IWorks fraud scheme involving shell companies in 2010. The region now has served up another doozy of a case, with the FTC alleging once again that shell companies were used to pull off a major swindle.

    Named corporate defendants in the latest alleged caper were Ideal Financial Solutions Inc., Ascot Crossing LLC, Bracknell Shore Ltd., Chandon Group LLC, Avanix LLC and Fiscal Fitness LLC. Individual defendants include Steven Sunyich, Michael Sunyich, Christopher Sunyich, Shawn Sunyich, Melissa Sunyich Gardner, and Kent Brown.

    U.S. District Judge Miranda M. Du, the same judge presiding over the Johnson/IWorks civil case brought by the FTC in December 2010, has ordered an asset freeze and appointed a receiver in the agency’s most recent case that alleges spectacular financial fraud occurring in Nevada and Utah.

    Du’s order lists the following as receivership entities, amid FTC allegations they were part of a common enterprise: Debt Elimination Systems LLC; US Debt Relief LLC; Money Mastery LLC; US Debt Assistance Corp.; IWB Services (St. Kitts); Financial Fitness LLC; Debt to Wealth LLC (St. Kitts); Debt to Wealth LLC (Nevada); Ideal Goodness LLC; Dollars West LLC; Fluidity LLC; Newport Sails LLC; Shaw Shank LLC; Bunker Hillside LLC; Funding Guarantee LLC; Newline Cash LLC; Wealth Fitness LLC; and Zeal Funding Services LLC.

    The judge appointed Thomas McNamara of Ballard & Spahr receiver.

    At least 230 Internet domains were used in the scam, the FTC alleged. From the agency (italics added):

    According to the FTC’s complaint, the Ideal Financial Solutions defendants targeted financially vulnerable consumers who had never come in contact with them, and without authorization debited their bank accounts and charged their credit cards, usually for about $30. Those who disputed the charges were told they had purchased something, such as financial counseling or loan matching services, or assistance in completing a payday loan application. How the defendants got the consumers’ financial information is not known, but some consumers had recently applied for payday loans via the Internet, and entities that receive payday loan applications often sell the information to other parties.

    The complaint alleged that, to avoid detection, the defendants created dozens of shell companies to open merchant accounts with payment processors that enable merchants to get customers’ money via electronic banking; the processors receive a fee for each transaction they handle. The defendants also allegedly registered more than 230 Internet domain names, often using identity-hiding services and auto-forward features.

    Read the FTC complaint.

  • INCREDIBLE: JSSTripler/JustBeenPaid Operator Frederick Mann Now Billed As Pitchman For Upstart Scheme Known As ‘ClickPaid’

    Frederick Mann is back, according to "ClickPaid."
    Frederick Mann is back, according to “ClickPaid.”

    UPDATED 8:51 A.M. ET (FEB. 20, U.S.A.) Frederick Mann, a former pitchman for the AdSurfDaily Ponzi scheme and the operator of the bizarre JSSTripler/JustBeenPaid “program” that advertised a return of 2 percent a day and morphed into a “program” known as “ProfitClicking” in the days after the SEC called rival HYIP Zeek Rewards a $600 million Ponzi- and pyramid scheme in August 2012, is back, according to promos for a new “opportunity” known as “ClickPaid.”

    The news comes as ProfitClicking appears to be in a state of collapse. Like ASD, Zeek, JSS/JBP and ProfitClicking before it, ClickPaid has a presence on the MoneyMakerGroup and TalkGold Ponzi forums. Mann purportedly “retired” from JSS/JBP last year, but not before claiming that government workers  were part of  “a criminal gang of robbers, thieves, murderers, liars, imposters.”

    Frederick Mann
    Frederick Mann

    He also speculated that the U.S. government could target JSS/JBP’s servers in a “cruise missile” attack.

    Mann is believed to be in his eighties and, at a minimum, to be sympathetic to the “sovereign citizens” movement. At the time of this post, ClickPaid is showcasing a ProfitClicking-like launch-countdown timer on its website. Visitors are invited to listen to a “World Wide Pre Launch Live Broadcast Call with Frederick Mann” tomorrow. A tab/subtab on the website styled “MEDIA/Upcoming Events” claims Mann will “personally” introduce “Click Paidto [sic] the world” tomorrow and will be featured on “the live launch call” Feb. 27.

    The ClickPaid Terms — like the Terms of JSS/JBP and ProfitClicking — makes members affirm they are not with the “government.”

    If the nongovernment affirmation were not enough, Click Paid also says it reserves the right to enroll Click Paid members in other programs. (Verbatim/italics added):

    19. From time to time, the Click Paid managers may import the entire Click Paid membership into another program, maintaining the Click Paid genealogy. This will also be done on the basis that people imported into the other program will have to activate their accounts by a certain deadline in order to become members of the other program. If they don’t activate their accounts by the deadline, they will be dropped from the other program. One benefit of this procedure is that Click Paid members receive their Click Paid downline in the other program (to the extent that accounts are activated). Another benefit is that those who don’t want to be in the new program will be dropped automatically if they do nothing. Prior to such an import,Click Paid managers will inform all Click Paid members via email and in the Member Area of the expected import and the reasons for it. Subsequent to the import, managers of the other program will email those imported from Click Paid to explain the benefits of the other program, and to provide them with the procedure to activate their accounts, should they wish to become members of the other program. More than one email may be sent by the managers of the other program. (Click Paid members who don’t activate their accounts in the other program by the deadline will be dropped from that program.) Click Paid members agree to receive the emails referred to in this rule 19. (Privacy: Any import per this rule 19 will be on the basis that the managers of the other program will not abuse the Click Paid email addresses in any way. Once the deadline has been reached, all unactivated accounts in the other program will be deleted and the email addresses for these deleted accounts will not be retained by managers of the other program.)

  • WECT Report On ‘Sovereign Citizens’

    EDITOR’S NOTE: Readers are duly cautioned that the WECT Special Report linked below contains images that may be disturbing.

    WECT TV6-WECT.com:News, weather

  • 2 Days After Judge Cites Specific Web Domain And Declares Kenneth Wayne Leaming Filing ‘Undecipherable,’ PP Blog Receives Would-Be Comment With Link To Page That References Same Domain And Case Against Different Purported ‘Sovereign’

    ponziblotterOn Feb. 13, the PP Blog reported that a federal judge who was quoting from a pleading by AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming had referenced a domain styled peoplestrust1776.org.

    U.S. District Judge Ronald B. Leighton declared Leaming’s filing, which apparently cited the Uniform Commercial Code (UCC), “undecipherable.” The judge exempted prosecutors from responding to a series of recent bizarre pleadings from Leaming, who is jailed near Seattle on charges of filing false liens against public officials in the AdSurfDaily Ponzi case. Leaming, 57, also is accused of other crimes.

    Like other purported “sovereigns,” the judge observed, Leaming is “fascinated” by capital letters.

    Some “sovereign citizens” appear to believe that pleadings that include capital letters or make UCC claims provide defenses or remedies for everything from murder charges to charges of targeting public officials in harassment campaigns.

    Less than two days after the PP Blog published its most recent story about Leaming’s strange defense efforts in the Western District of Washington, the Blog received a would-be comment it is treating as spam because it purported to be in response to a reader who left a comment on the PP Blog nearly two years ago on a different subject. Received at 2:55 a.m. ET today, the unpublished, would-be comment included a link to a post on a Blog whose URL was formed in part with the words “the-full-details-of-kidnapping-of.”

    One had to visit the site to determine who allegedly was kidnapped.

    The PP Blog visited the link and found a post about Patrick Cody Morgan, a purported Texas “sovereign” who was convicted last year of conspiracy and nine counts of bank fraud in a real-estate swindle involving repeated bids to scam residential mortgage lenders and FDIC-insured banks between 2004 and 2007. The scam involved “trust accounts” and “straw buyers,” prosecutors said. The PP Blog wrote about the Morgan convictions on Nov. 2, 2012. No readers left comments in the thread below the story.

    In any event, the would-be commentator apparently wants to generate discussion about the Morgan case and to enlist support for Morgan. Notably, the spammed link received by the PP Blog includes references to the same peoplestrust1776.org domain Leaming cited in an apparent defense bid in his criminal case.

    Content on the site whose post link was spammed to the PP Blog overnight appears to be designed to paint government officials or agencies involved in the Morgan case as “the Accused.” Apparently among the purported “Accused” are U.S. Attorney General Eric Holder, FBI Director Robert Mueller, U.S. District Judge Lynn N. Hughes of the Southern District of Texas and others. The site also published florid legalese attributed to Morgan that, like Leaming’s prose, made liberal use of capital letters.

    Legalese attributed to Morgan asserts he is “Patrick-Cody: Family of Morgan”; Leaming’s legalese asserts he is “Kenneth Wayne, born free to the family Leaming.”

    Some “sovereigns” appear to believe that using exceptionally formal prose, capital letters and/or specific forms of punctuation in court filings somehow provide for a winning defense.

    Leighton characterized Leaming’s prose as “gobbledygook.”

    Morgan — in his apparent defense — appears to claim he was the victim of criminals working for the government. Leaming has made similar arguments in Washington state.

    Precisely what role, if any, peoplestrust1776.org is playing in the Morgan and Leaming cases is unclear.

     

  • Some ‘ProfitClicking’ Members Who Scheduled Sea Cruise May Have Gotten Lucky Break — Sort Of

    ProfitClicking has had trouble since it evolved from the carcass of JSSTripler/JustBeeenPaid last year.
    ProfitClicking has had trouble since it evolved from the carcass of JSSTripler/JustBeeenPaid last year.

    Back in June 2012 — when the “program” later to become “ProfitClicking” still was known as JSS Tripler/JustBeenPaid — a member told JSS/JBP operator Frederick Mann that she was arranging a sea cruise on Carnival Cruise Lines “out of Galveston, Texas” during the last week of January and the first week of February of this year.

    It would not have been the first time members of a Ponzi scheme got together on a ship at sea to talk up a “program.” Members of the AdViewGlobal autosurf, which federal prosecutors later linked to the AdSurfDaily Ponzi scheme, reportedly advanced the AVG scam on the high seas in 2009.

    Whether the JSS/JBP sea cruise ever came off is unknown. What is known is that the Carnival Triumph, whose home port is Galveston, has caused an epic PR disaster for the famous cruise line. The ship experienced an engine-room fire on Sunday, after departing Galveston Feb. 7, the company said.

    A passenger on a recent cruise aboard the Triumph told CBS News that the ship had trouble on Jan. 28 as it was preparing to leave Galveston.

    If JSS/JBP-related trip announced last year went ahead as planned, some JSS/JBP (now ProfitClicking) members could have been on the ship during the trip immediately prior to the disastrous cruise. Or if the trip was delayed by a week, they could have been aboard when the engine room caught fire.

    Just how disastrous was the trip?

    Well, no one was killed. Even so, passengers described the excursion as a venture into hell on the high seas. The fire crippled the ship at sea. A CBS reporter described the vessel as “the makings of a floating biohazard” because the Triumph’s toilets and waste systems were not working.

    Fox News, meanwhile, cited reports of “vile conditions onboard” and used the phrase “shanty town.” Passengers were forced to live on the deck because of filthy conditions inside the ship.

    With the aid of tug boats, the crippled Triumph arrived in Mobile, Ala., late last night.

    The U.S. Coast Guard and the National Transportation Safety Board have launched probes.

    Even if JSS/JBP/ProfitClicking members weren’t on board, there are reports of ongoing, major problems with their “opportunity,” which purported to pay 2 percent a day.

    If they were on board, they got the double-whammy.

     

  • In Report On ‘Sovereign Citizens’ Movement, North Carolina TV Station Revisits Strange Case Of Jennifer Melisa Herring

    Jennifer Herring. Source: Brunswick County Sheriff’s Office.
    Jennifer Herring. Source: Brunswick County Sheriff’s Office.

    WWAYTV3 of Wilmington, N.C., aired a report on “sovereign citizens” during its 6 p.m. newscast today. The station revisited some of the strange circumstances surrounding Jennifer Melisa Herring, who was arrested in December 2012 by the Brunswick County Sheriff’s Office after an alleged 15-minute car chase.

    After the PP Blog reported on Herring’s arrest, it received a bizarre communication suggesting the Blog would owe Herring $500,000 for each instance her name was used in a story.

    Tonight’s WWAYTV report was not exclusively about Herring.

  • JUDGE: ‘All The Fancy Legal-Sounding Things’ ASD Figure Kenneth Wayne Leaming ‘Has Read On The Internet Are Make-Believe’

    “The Court therefore feels some measure of responsibility to inform [Kenneth Wayne Leaming] that all the fancy legal-sounding things he has read on the internet are make-believe. Defendant can call himself a ‘public minister’ and ‘private attorney general,’ he may file ‘mandatory judicial notices’ citing all his favorite websites, he can even address mail to the ‘Washington Republic.’ But at the end of the day, while sovereign citizens and Defendant cite things like ‘Universal Law Ordinances,’ they are subject to both state and federal laws, just like everyone else.” —  U.S. District Judge Ronald B. Leighton, Feb. 12, 2013

    Kenneth Wayne Leaming
    Kenneth Wayne Leaming

    A federal judge in the Western District of Washington has issued an order exempting prosecutors from responding to wild assertions made by AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming.

    Like other purported “sovereigns,” Leaming is “fascinated by capitalization,” Judge Ronald B. Leighton said in the Feb. 12 order.

    In a recent filing, the judge said, Leaming used the word “REGISTRY” in all uppercase in a pleading that was “undecipherable.” On at least five occasions during the course of the case, Leaming has filed documents that used the phrase “Mandatory Judicial Notice,” including one in which Leaming asserts he “relies in good faith on the public/commercial REGISTRY entries as published at
    www.peoplestrust1776.org, inclusive of Universal Law Ordinance, UCC #2012096074 . . . .” the judge said.

    “For lack of a better term, this is gobbledygook,” the judge said.

    Leaming also recently argued that “the REGISTERED FACTS appearing in the above Paragraph evidence the uncontroverted and uncontrovertible FACTS that the SLAVERY SYSTEMS operated in the names UNITED STATES, United States, UNITED STATES OF AMERICA, and United States of America . . . are terminated nunc pro tunc by public policy, U.C.C. 1-103 . . . .,” according to the judge.

    “He appears to believe that by capitalizing ‘United States,’ he is referring to a different entity than the federal government,” the judge said. “For better or for worse, it’s the same country.”

    And Leighton quoted again from Leaming’s filings:

    “COMES NOW, Kenneth Wayne, born free to the family Leaming, 20 December 1955, constituent to The People of the State of Washington constituted 1878 and admitted to the union 22 February 1889 by Act of Congress, a Man, ‘State of Body’ competent to be a witness and having First Hand Knowledge of The FACTS . . . .”

    Purported sovereign citizens, “like Mr. Leaming, love grandiose legalese,” the judge said, ordering that “no response is required by the Government.”

    Leaming, 57, is detained near Seattle on charges of filing false liens against government officials involved in the ASD Ponzi case. He also is accused of other crimes, including harboring fugitives, assisting others in the filing of false liens, being a felon in possession of firearms and attempting to pass a bogus “Bonded Promissory Note” for $1 million. He was arrested in November 2011 by an FBI Terrorism Task Force.

    “Sovereigns” have been known to engage in what has been described as “paper terrorism” to try to hamstring law enforcement. Some “sovereigns” have been linked to various forms of securities fraud and tax fraud.

    On Sept. 5, 2012, the PP Blog reported that an “opportunity” known as “Wealth Creation Alliance” was using a strange mix of capital letters in its communications with prospects. Whether WCA has any “sovereign” ties is unknown.

    In September, a judge in Canada deconstructed some bizarre arguments from “sovereigns” and others.

     

  • In Explosive New Allegations, Receiver Says Jeremy Johnson Associate Opened New Bank Account In November 2012 And That Firm Owned By Johnson’s Parents Wired $500,000 Into It — And That Almost All Of The Money Was Removed By Associate On Same Day In Cash

    From Feb. 6, 2013, filing by the receiver in the Jeremy Johnson/IWorks fraud case. (Redaction by PP Blog.)
    From Feb. 6, 2013, filing by the receiver in the Jeremy Johnson/IWorks fraud case. (Redaction by PP Blog.)

    EDITOR’S NOTE: Utah has been abuzz since the Salt Lake Tribune reported on Jan. 11 that a plea deal between Jeremy Johnson and the government had unraveled when prosecutors balked “at placing a list of people into the record that Johnson said prosecutors had promised not to indict if he entered a guilty plea.”

    “Included on that list were Johnson family members, business associates, friends — and Utah Attorney General John Swallow,” the newspaper reported. Johnson planted the seed that Swallow had been involved in a bribery scheme to make FTC civil allegations of fraud against Johnson go away in 2010. Swallow denied the allegations.

    Johnson has been engaged in a long-running media campaign to discredit the government. Among other things, he has claimed he had no money to mount a defense to the FTC charges brought in December 2010. But in an update to the court a year ago this month, the receiver in the FTC case raised allegations that some of Johnson’s family members and friends were helping him hide money through scores of business entities.

    Now, receiver Robb Evans has filed a new document (Feb. 6, 2013) that alleges a company owned by Johnson’s parents wired $500,000 to a new bank account opened by a Johnson business associate referenced in last year’s receivership report 10 months after the report was filed. The suspicious transactions involving Kerry and Barbara Johnson and Jason Vowell allegedly occurred in December 2012.

    Although the receiver’s Feb. 6 filing does not reference Johnson’s collapsed plea deal last month, it may lead to questions about the credibility of Johnson, his parents and certain of his business associates. Vowell, for example, is alleged to have withdrawn in cash nearly all of the money supplied by the firm owned by Johnson’s parents just a little more than a month before Johnson’s plea deal collapsed, reportedly in part because prosecutors refused to commit to not charging his parents and others.

    ** _______________________________ **

    The court-appointed receiver in the Jeremy Johnson/IWorks fraud case has advised a federal judge that KV Electric Inc., a company owned by Johnson’s parents, wired $500,000 on Dec. 6 into an account opened Nov. 28 through Johnson business associate Jason Vowell.

    In court filings, receiver Robb Evans said that bank records suggest Vowell removed $499,500 from the account on the same day the wire deposit was made. The withdrawal appears to have been made in cash. An evidence exhibit shows what appears to be a counter check drawn on The Village Bank. The check was filled out in longhand, with Vowell’s name in the “Pay to the order of” line. The words “Living Expenses” are written on the memo line of the check, and the name of Taggart Management LLC is written in longhand at the top of the check.

    Taggart Management, through Vowell, opened the account only days earlier with a deposit of $100, according to the receiver. On Dec. 6, $500,000 flowed into the account via wire from KV Electric, which is owned Johnson’s parents, Kerry and Barbara Johnson, according to the receiver.

    “The transfer of $500,000 to Taggart for the immediate withdrawal of $499,500 in cash by Jason Vowell has no discernible business purpose and is highly suspect under the circumstances,” the receiver said, noting that Taggart is part of the receivership’s investigation into Jeremy Johnson’s business affairs and that Kerry and Barbara Johnson are defendants in a receivership lawsuit to recover ill-gotten gains from their son’s alleged scam.

    Various suspicious transactions involving large sums of money and the Johnson family and other entities have occurred since the FTC sued Jeremy Johnson for fraud in December 2010, alleging a massive Internet-based scam that gathered hundreds of millions of dollars, the receiver alleged.

    On Jan. 3, 2013, the receivership issued a subpoena to The Village Bank, which provided records of the alleged Vowell/Taggart and KV Electric transactions during the previous month, according to court filings. In November, the receivership issued a subpoena to Chartway Federal Credit Union as part of a forensic investigation into the banking activities of Johnson’s parents and others individuals and entities involved with Johnson. Chartway provided sought-after information on Johnson’s parents on Dec. 4.

    On Feb. 8, U.S. District Judge Miranda M. Du authorized Evans in an order to continue the asset investigation of Johnson’s parents.

    Read Feb. 6, 2013, filing, including exhibits, by the receiver.

     

  • Legisi HYIP Pitchman Matthew John Gagnon Pleads Guilty, Admits He Didn’t Disclose ‘Touting’ Compensation Of More Than $1 Million And Caused More Than $7 Million In Losses

    Matthew John Gagnon
    Matthew John Gagnon

    Legisi HYIP Ponzi-scheme pitchman Matthew John Gagnon has pleaded guilty in the Eastern District of Michigan to a criminal charge of not disclosing he’d been paid more than $1 million by Legisi and its operator Gregory N. McKnight to tout the “program” online.

    In a plea agreement now public after being fashioned in October and November, Gagnon admitted he’d caused more than $7 million in losses to more than 50 Legisi investors. Legisi gathered about $72 million and collapsed in 2008, according to court filings.

    Legisi was promoted on Ponzi-scheme forums such as TalkGold and MoneyMakerGroup. Gagnon, who was accused of willful blindness and potentially faces up to five years in federal prison when sentenced in May, pitched the “program” through Mazu.com. The MoneyMakerGroup forum is specifically referenced in an evidence exhibit in the Legisi case.

    In the agreement, Gagnon admitted he touted Legisi as a “winner” and “not a scam.” On any given day, any number of hucksters make the same claims about any number of “programs” on the Ponzi boards. Willful blindness — in no small measure — drives the scams.

    Legisi’s Terms of Service sought to make members affirm they were not an “informant, nor associated with any informant” of the IRS, FBI, CIA and the SEC, among other agencies, according to documents filed in federal court. McKnight, like Gagnon, faces sentencing in May. Prosecutors have sought a 15-year term for McKnight.

    Both McKnight and Gagnon also face millions of dollars in civil judgments that flowed from a case brought by the SEC in 2008. The U.S. Secret Service and state authorities in Michigan also investigated Legisi.

    Prosecutors recommended a three-level sentencing reduction for Gagnon, noting he has accepted responsibility for his role in the scam and has assisted authorities.

    U.S. District District Judge Mark A. Goldsmith is scheduled to sentence Gagnon on May 7.

    Zeek Rewards, an alleged $600 million Ponzi- and pyramid fraud, also was touted on the MoneyMakerGroup and TalkGold forums. The SEC brought the Zeek case in August 2012.