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  • NORTH CAROLINA: Jonathan Davey, Figure In Infamous ‘Black Diamond’ And ‘Divine Circulation Services’ Ponzi And Fraud Caper, Convicted On All Counts; Jury Returned Verdicts In 45 Minutes

    breakingnews72UPDATED 7:08 P.M. ET (U.S.A.) Jonathan D. Davey, a Newark, Ohio, certified public accountant and purported hedge-fund manager, has been convicted of all four counts against him in the “Black Diamond” and “Divine Circulation Services” Ponzi and fraud schemes in the Western District of North Carolina.

    A federal jury, according to prosecutors, took only 45 minutes to return four guilty verdicts against Davey, 48. Ten defendants previously were convicted for their roles in the fraud, and CommunityOne Bank was charged criminally. Davey, who was convicted of conspiracy to commit securities fraud, conspiracy to commit wire fraud, conspiracy to commit money-laundering and tax evasion, potentially faces decades in federal prison.

    Davey was charged last year.

    In a statement, prosecutors said Davey “used an elaborate network of shell companies to evade taxes and commit money laundering with the proceeds of the Ponzi scheme. In particular, Davey used an offshore shell company in Belize to funnel money to build a mansion in Ohio, creating a sham ‘loan’ by pretending that investors had ‘loaned’ investment money to the Belizean shell company that was then used to build Davey’s personal mansion.

    Black Diamond principal Keith F. Simmons was sentenced in 2012 to 50 years in prison.

    See statement by the office of U.S. Attorney Anne M. Tompkins.

  • BULLETIN: CFTC Alleges Robert Stanley Harrison Of Easley, S.C., Was Presiding Over Fraud Scheme That Guaranteed ‘100 Percent Profits’ In 90 Days Through Investors Choice Advisors LLC Commodity Pool; Federal Judge Freezes Assets

    XXX
    The case against Robert Stanley Harrison appears to have one of the signatures of an investment-fraud scheme: a website asking for “patience” owing to purported “improvements” in progress. The site also claims that God “wants you to be so blessed . . . so keep standing, keep hoping and keep declaring His Word . . .”

    BULLETIN: In a case filed under seal last week, the CFTC accused Robert Stanley Harrison of Easley, S.C.. of presiding over a commodity-pool and Forex fraud scheme in which investors were guaranteed a return of 100 percent in 90 days. The seal now has been lifted, and U.S. District Judge G. Ross Anderson has granted an emergency asset freeze.

    The scheme traded in part via “regular teleconferences with Pool participants” during which Harrison “touted his trading ability and the profits he was purportedly making for Pool participants,” the CFTC said.

    Separately, the Securities Division of the Office of the Attorney General of South Carolina accused Harrison last year of scamming investors through Investors Choice Advisors LLC, the same company referenced in the CFTC complaint. The Securities Division described Harrison as a man who “had multiple prior felony convictions which were not disclosed when he offered and sold securities.”

    Records in Pickens County, S.C., show several arrests on fraud charges for Harrison, including one on Dec. 19, 2012. The address in the Pickens County filings is the same address as Investors Choice Advisors LLC.

    Meanwhile, the website of the enterprise claims it is “undergoing improvements” and asks investors to be “patient.” A section of the website dubbed “Motivational Moments” carries this message:

    “During these challenging times, know that you are not alone. God has a plan to drive out the darkness — He will flood you with His light!”

    Here is part of what the CFTC said in the unsealed filing (italics added):

    Prior to expiration of their “Investment Contracts,” at least some of the Pool participants were solicited by Defendant and his agent to “roll over” their contracts for another 60 or 90 day term and, at the same time, to increase the principal amount of their investments.

    For example, after sending Defendant $1,000 for investment in the Pool in September 2011, one Pool participant received a contract via email from Defendant’s agent that reflected the Pool participant’s $1,000 principal investment and promised a return of $2,000 in 90 days.

    In November 2011, Defendant’s agent solicited this Pool participant to roll over her initial principal investment, along with her purported returns, and to invest additional funds in the Pool. Based on the representations that her initial investment was profitable, this Pool participant decided to roll over her initial investment and to invest an additional $28,000 in the Pool. After sending her funds to Defendant, the Pool participant received a new contract via email from Defendant’s agent in December 2011, which showed a principal investment amount of $30,000, including $1,000 in profits purportedly earned on her initial investment, and a guaranteed return of $60,000 in 90 days.

    The investor never got paid, despite repeated requests, the CFTC said. The agent’s name was not disclosed.

  • BULLETIN: Mass Shooting At Delaware’s New Castle County Courthouse

    breakingnews72A mass shooting occurred this morning at the New Castle County Courthouse in Wilmington, Del., multiple media outlets are reporting. Wilmington is the state’s largest city.

    The Wilmington News Journal is reporting that two women were killed by gunfire and three other people were wounded. Among the wounded are two Capitol police officers. The gunman reportedly is dead.

    A prosecutor in Kaufman County, Texas, was killed last month in a courthouse shooting.

    Vice President Joe Biden is a former Senator from Delaware. His son, Joseph R. “Beau” Biden III, is the state’s attorney general. The vice president’s schedule today includes an appearance at Girard College in Philadelphia to hold a “roundtable discussion with law enforcement officials and Members of Congress on gun safety,” according to WhiteHouse.gov.

    CNN is reporting that Wilmington’s police chief was expected to attend the event in nearby Philadelphia.

  • OHIO: Purported ‘Sovereign’ Citizen Allegedly Assaults Officer, Police Dog

    Police dog "Rek" allegedly suffered an injury this week at the hand of a purported "sovereign citizen" in Ohio. Source: screent shot from 10TV.com news report.
    Police dog “Rek” allegedly suffered an injury this week at the hand of a purported “sovereign citizen” in Ohio. Source: screen shot from 10TV.com news report.

    A police officer and a police dog allegedly were assaulted Thursday during a confrontation at the home of a purported “sovereign citizen” in the Columbus suburb of Westerville in central Ohio, 10TV.com is reporting.

    Westerville is situated in Franklin and Delaware counties

    The station reported that Gabriel Carnelian Pace, the purported “sovereign,” was wanted on traffic charges and allegedly not making child-support payments. He was arrested after the skirmish, as was his wife, April Dawn Pace. April Pace later was released.

    “Rek,” a police canine, allegedly suffered an injury below the eye while Gabriel Pace was resisting arrest, the station reported. It was not immediately clear if the officer was injured.

    A document that appears online at a website styled DivineProvince.org describes an individual known as “gabriel carnelian of the house of pace,” purportedly the “Living Beneficiary of The GABRIEL CARNELIAN PACE ESTATE.”

    An apparent caption on the document is styled a “Complaint of Breach of Trust by Original Writ.” It purports to name as “Respondent” the state of Ohio at 70 N. Union Street, Delaware, Ohio. That’s the address of the Delaware Municipal Court. The document appears to be dated Jan. 4, 2013, and includes the purported signatures of “gabriel carnelian” and “April dawn.”

    A second document at the same site is styled “Final Order” and describes “Gabriel Carnelian Pace” as “a commercial vessel, an official carriage registered under the universal post office and authorized to transport the official post and sacred cargo beyond the sea.” This document, also dated Jan. 4, purports to present the official seal of the “Postmaster General” of the “Divine Province.”

     

  • NEW HAVEN REGISTER: Witness Says Alcoholics Anonymous Members Were Recruited For Cash-Gifting Scheme And That ‘Largest Conflict I’ve Ever Seen’ In AA Ensued

    EDITOR’S NOTE: In May 2012, the PP Blog reported that three women had been arrested on federal charges in Connecticut that flowed from an alleged cash-gifting pyramid scheme. One of the women has pleaded guilty. Two others now are on trial.

    Cash-gifting often is associated with affinity fraud. The alleged Connecticut scheme centered around women with common interests, for example. Cash-gifting schemes also may be targeted at members of a common faith or belief system, members of a specific racial or ethnic group, members of specific occupations or members of virtually any group with common interests or common problems.

    No individual or member of an organization may be truly safe in the context of affinity fraud, considering that schemes even have been targeted at members of the military and their loved ones. Now, it seems, not even members of Alcoholics Anonymous — an American treasure with international reach that has helped countless participants in their daily struggle against the clutches of alcoholism —  were off limits to a person or persons desiring to recruit members into the cash-gifting scheme.

    ** _________________________________ **

    recommendedreading1The New Haven Register is reporting that “Julie,” a witness in the “Women’s Gifting Table” trial in federal court in Connecticut, testified that members of Alcoholics Anonymous were recruited for the scheme, which caused dissension among people battling to stay sober.

    “Julie” was introduced to cash-gifting by her AA sponsor, Julie testified, according to the Register.

    From the Register (italics added):

    Eventually, there were eight AA members involved in tables and Julie attempted to recruit more. What followed was “the largest conflict I’ve ever seen in Alcoholics Anonymous,” she said. “It’s a violation of a trusted relationship. I trusted people to save my life, and people trusted me to save their lives, and to take advantage of that situation was a problem.”

    “Julie” testified that she quit the scheme after news broke that former Connecticut Attorney General Richard Blumenthal had launched an investigation.

    Gifting is the business of parasites, Blumenthal said in November 2009.

    Blumenthal now is a U.S. Senator.

    On Jan. 31, the Register reported that some people believe the unsolved murder of a woman in 2010 may be tied to the cash-gifting scheme.

     

  • Convicted Ponzi Schemer Andy Bowdoin Of AdSurfDaily Now Listed As Inmate In Florida Federal Prison [UPDATED FEB. 8]

    EDITOR’S NOTE: This post originally was published Jan. 24 at 7:33 p.m. It was updated Feb. 8 to include this editor’s note reflecting that Andy Bowdoin now is listed as an inmate at the federal prison camp in Pensacola, Fla. (Pensacola FPC.)  The original story published Jan. 24 appears below and includes some edits to reflect the latest information . . .

    ** ____________________________________ **

    UPDATED 9:08 A.M. ET (JAN. 27, U.S.A.) Thomas Anderson “Andy” Bowdoin, the 78-year-old AdSurfDaily Ponzi patriarch, is listed today as an inmate at the Federal Correctional Institution in Tallahassee. His estimated release date is Feb. 7, 2018. [New on Feb. 8: Bowoin has been transferred to Pensacola FPC.)

    In August 2008 — after federal prosecutors in the District of Columbia initially filed civil allegations of Ponzi fraud against Bowdoin and ASD after an investigation by the U.S. Secret Service — Bowdoin was defiant. The government was “Satan,” he claimed. And he compared the Secret Service to the 9/11 terrorists.

    Bowdoin was described as a head of a “flock,” a man who had “followers.” What transpired in the years that followed was the stuff of fiction — but it was very, very real. After initially demanding an evidentiary hearing and insisting ASD’s online “program” was not a Ponzi scheme, Bowdoin did not take the stand at the hearing he requested.

    He was “too honest” to testify, explained one of his followers.

    Prosecutors had a different take: Bowdoin, they said, was a recidivist securities swindler with a felony record in Alabama from a previous fraud scheme in the 1990s. One of his business partners also was a veteran swindler who once pushed “prime bank” frauds, according to court filings.

    Other Bowdoin followers planted stories that prosecutors secretly had admitted ASD was not a Ponzi scheme but were clinging to the case in a bid to save face. One follower ventured that a prosecutor should be placed in a medieval torture rack. Another ventured that a “militia” should storm Washington.

    In the bizarre world of ASD, there were efforts to enlist public support for Bowdoin by mailing packets of Kool-Aid to Fox News host Bill O’Reilly. There was a corresponding effort to enlist support for an investigation into a Florida TV station, apparently for having the temerity to cover negative news about ASD. Some of Bowdoin’s followers also wanted to investigate then-Florida Attorney General Bill McCollum, apparently for holding the view that ASD was a pyramid scheme.

    On Sept. 11, 2008, the seventh anniversary of the 9/11 attacks, some Bowdoin followers prayed for the prosecution to be struck dead.

    By July 2010, purported “sovereign citizen” Kenneth Wayne Leaming had entered the ASD fray. He is now jailed near Seattle on charges of filing false liens against at least five federal officials involved in the ASD case: a federal judge, three federal prosecutors and the Secret Service agent who did the early investigative legwork in the case. Leaming, according to court filings, was harboring two federal fugitives from Arkansas, had tried to pass a bogus “Bonded Promissory Note” for $1 million and assisted in the filing of false liens against other federal officials in cases presumably unrelated to ASD.

    Leaming, prosecutors said, was instrumental in the founding of the so-called “County Rangers,” an armed enforcement wing for a “sovereign” group in Washington state. The “Rangers” carried fake badges, according to court filings. And when Leaming, a convicted felon, was arrested in November 2011 by an FBI Terrorism Task Force on the false-liens charges, several firearms were found.

    One of them was an “AK-47 style assault rifle with a bayonet,” according to court filings.

    afavideosmall1Bowdoin was charged criminally in November 2010, when an indictment was unsealed. By October 2011, Bowdoin was trying to sell a “program” known as OneX to the members he was accused of defrauding in the ASD case. Conference-call listeners were told they could earn $99,000 very quickly through OneX, which federal prosecutors later described as yet another fraud scheme pushed by Bowdoin.

    In May 2012, Bowdoin pleaded guilty to wire fraud, acknowledging that ASD was a Ponzi scheme and that his Florida-based firm had never operated lawfully from its inception in 2006.

    Even after Bowdoin pleaded guilty, some of his followers continued to insist that ASD was a legitimate business. Bowdoin was jailed in June 2012, after prosecutors proffered evidence that he continued to promote fraud schemes even after the Secret Service seized $80 million in the ASD case and even after he was charged criminally.

    Bowdoin spent the early days of his sentence in a District of Columbia jail. Earlier this month, he was listed as a prisoner at a federal holding facility in Oklahoma City.

    And today he apparently has arrived in Tallahassee to serve out the remainder of his 78-month term. [New on Feb. 8: Bowdoin has been transferred to Pensacola FPC.) The prison is only a short [Feb. 8 edit: roughly two-and-a-half hour] drive from Quincy, the town from which Bowdoin pulled off a $119 million Internet fraud.

  • BULLETIN: Grand Jury Returns Superseding Indictment Against AdSurfDaily Figure And Purported ‘Sovereign Citizen’ Kenneth Wayne Leaming

    americaatrisk4BULLETIN: (UPDATED 4:38 P.M. EDT U.S.A.) A federal grand jury in the Western District of Washington has returned a superseding indictment against AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming.

    It is the second superseding indictment against Leaming. The first was filed in 2012.

    The new indictment was returned yesterday, a day after the White House and the Justice Department referenced “sovereign citizens” in a policy announcement that pointed to an FBI site that defined “sovereign citizens” as “anti-government extremists who believe that even though they physically reside in this country, they are separate or ‘sovereign’ from the United States. As a result, they believe they don’t have to answer to any government authority, including courts, taxing entities, motor vehicle departments, or law enforcement.”

    Leaming is 57. His alleged onetime business colleague David Carroll Stephenson, 57, also is named in the superseding indictment. The indictment formally accuses Leaming of filing false liens against a federal judge, two former federal prosecutors and a U.S. Secret Service agent who had roles in the ASD Ponzi case. The liens were filed in August 2010 and November 2010, according to the indictment.

    Meanwhile, the indictment accuses Leaming and Stephenson of filing false liens against two U.S. prison officials in July 2011.

    Leaming, meanwhile, was further accused of harboring two federal fugitives in 2010 and of being a felon in possession of six firearms.

    At the same time, the indictment accuses Leaming of passing a bogus “Bonded Promissory Note” for $1 million in March 2008, in a bid to defraud the United States.

    Leaming and Stephenson are being held at the SeaTac federal detention center near Seattle.

    ASD was a $119 million Ponzi scheme brought down by the Secret Service in August 2008. Leaming reportedly was performing legal work for some ASD members, even though he is not an attorney.

    Leaming was arrested in Spanaway, Wash., by an FBI terrorism Task Force in November 2011. He has been jailed since then. Stephenson already was serving a federal sentence for a tax crime when Leaming was arrested.

    Leaming has an existing federal felony conviction for piloting an aircraft without a license.

  • URGENT >> BULLETIN >> MOVING: Federal Judge Denies Motion To Appoint ‘Examiner’ In Zeek Ponzi Case; Court Rejects Contention By Alleged Zeek ‘Winners’

    breakingnews72URGENT >> BULLETIN >> MOVING: Senior U.S. District Judge Graham C. Mullen has denied a motion by Zeek Rewards affiliates aligned with Robert Craddock to appoint an “examiner.”

    Craddock’s Fun Club USA and Zeek members and alleged “winners” David Sorrells, David Kettner and Mary Kettner asked for their attorney — Michael Quilling of Dallas — to be appointed examiner late last year. Mullen said no today.

    “First of all, it is readily apparent to the Court that such an examiner would be unable represent the interests of both the net winner and net loser affiliates, two groups with inherently adverse interests,” Mullen said in an order dated today. “Secondly, the Court is of the opinion that appointing an examiner would cause unnecessary and significant depletion of the assets of the receivership.”

    Although Craddock has sought to demonize Zeek receiver Kenneth D. Bell, Mullen today said the court had “utmost confidence” in Bell.

    “The receiver is working diligently to maximize and protect the assets and the Court has utmost confidence in the receiver’s efforts,” Mullen wrote.

    The Kettners and Sorrells potentially have about $1.94 million in combined clawback exposure, according to court filings.

    Both the SEC and Bell opposed the appointment of Quilling.

    In a blistering memo in December, the SEC accused Craddock of encouraging Zeek affiliates “not to cooperate” with Bell. Craddock has not been charged with wrongdoing.

     

  • Extraordinary Drama Unfolds In California; Manhunt Under Way For Ex-Cop Who Allegedly Authored ‘Manifesto’ Promising ‘Unconventional And Asymmetrical Warfare’ Against Law Enforcement; Suspect Allegedly Tied To Double Homicide And Ambush Shootings Of Police Officers

    christopherdornerAn extraordinary drama is unfolding in Southern California involving a former Los Angeles police officer identified as Christopher Dorner. The photo of Dorner (left) was supplied by the Irvine Police Department, which identified Dorner as the suspect in the Sunday shooting deaths of Keith Lawrence and Monica Quan, a college-basketball coach.

    Dorner is 33.

    “Irvine Police are seeking the public’s help in finding Dorner,” the department said. “If you see him, please call 9-1-1 immediately. If you have information about his whereabouts, we ask you to immediately call our tip line at 949-724-7192.”

    He is believed to be driving a “Gray Nissan Titan with a roof rack, bed cover and aftermarket wheels, (possibly black/chrome),” the department said. “Vehicle plates have been changed, the new plate is 8D83987 or similar.”

    The fear is that Dorner literally is hunting down specific members of law enforcement or members of their families to shoot and kill. He has a military background and allegedly authored a manifesto in which he threatened “unconventional and asymmetrical warfare” against police.

    Monica Quan’s father is former LAPD Capt. Randy Quan, the LA Times is reporting.

    From the LA Times (italics added):

    . . . the search intensified after three police officers were shot in Riverside County Thursday and Dorner was identified as a possible suspect.

    The first police shooting occurred about 1:30 a.m. Thursday in Corona, where two LAPD officers were providing protection for someone mentioned in Dorner’s manifesto, officials said. One officer suffered a graze wound to the head during a shootout and Dorner fled the scene, police said.

    A short time later, two Riverside officers were shot at the corner of Magnolia Avenue and Arlington Avenue in Riverside. Riverside police Lt. Guy Toussaint said the officers were sitting at a red light when they were ambushed. One was killed, the other was still in surgery Thursday morning.

    News sources:

    Los Angeles Times.

    MyFoxLa.

     

     

  • 4 Charged Amid Allegations ‘Industrial Bleach’ Was Sold On Internet As ‘Miracle Cure’ For Flu, Arthritis And Cancer; Web Chatter References Pro Advocate Group, Same Enterprise Linked To Bizarre Claims In AdSurfDaily Saga

    A YouTube video apparently in support of “Project GreenLife” superimposes an image of FDA Commissioner Dr. Margaret Hamburg against the backdrop of a height chart -- an apparent bid to suggest that Hamburg should be booked at a police station.
    A YouTube video apparently in support of “Project GreenLife” superimposes an image of FDA Commissioner Dr. Margaret Hamburg against the backdrop of a height chart — an apparent bid to suggest that Hamburg should be booked at a police station.

    The PP Blog first told you about “Miracle Mineral Supplement,” also known as “Miracle Mineral Solution” or MMS, in August 2010. The FDA warned that serious harm could come to human beings who consumed it, saying MMS produced industrial bleach when used as directed.

    “Multiple independent distributors” sold the product online, the FDA said.

    Now, the U.S. Department of Justice has announced that four people — two from Oregon and two from Washington state — have been charged criminally.

    Named defendants were Louis Daniel Smith, 42, and Karis Delong, 38, both of Ashland, Ore. Also charged were Chris Olson, 49, and Tammy Olson, 50, of Nine Mile Falls, Wash.

    “Our most vulnerable citizens need real medicine — not dangerous chemicals peddled by modern-day snake oil salesmen,” said Stuart F. Delery, principal deputy assistant Attorney General for the Justice Department’s Civil Division.

    Smith and Delong operated a business known as “Project GreenLife” or PGL, the Justice Department said.

    A dissolved Nevada corporation known as PGL International LLC lists “Daniel Smith” as its managing member. A website styled ProjectGreenLife.com now appears to be parked at GoDaddy. Meanwhile, there are references online to ProjectGreenLife purportedly having been a “1st and 14th Amendment Private Membership Association.”

    At least one website that makes the claim makes a companion claim that Daniel Smith used “the help and counsel of the ProAdvocate Group” when contacting the FDA about MMS-related matters. “Daniel based his inquiry on a good-faith understanding of U.S. Supreme Court case law as it pertained to the activities of a private association,” the site claims. “Daniel told the FDA unless they objected within ten days he would assume they had no objection.”

    Pro Advocate Group reportedly was the Texas-based entity that assisted the AdViewGlobal HYIP scam form a “private association” in 2009 in which AVG appears to have tried to insulate itself from examination by the U.S. government by purporting to operate from Uruguay. In April 2012, federal prosecutors in the District of Columbia linked AVG to the $119 million Ponzi scheme operated by Andy Bowdoin of AdSurfDaily.

    Along with hawking purported private associations, Pro Advocate Group claims on its website that it offers “Pro Se Litigation with Super Appeal” and other services.

    A Justice Department news release yesterday on the charges flowing from Project GreenLife and the sale of MMS did not reference Pro Advocate Group.

    Smith, Delong and Tammy Olson were charged with one count of conspiracy, four counts of interstate sales of misbranded drugs and one count of smuggling. Chris Olson was charged with one count of conspiracy, one count of the interstate sale of a misbranded drug and one count of smuggling.

    The Justice Department said that “PGL provided consumers directions to combine MMS with citric acid to create Chlorine Dioxide, and the instructions told consumers to drink this mixture to cure numerous illnesses. Chlorine Dioxide is a potent agent used to bleach textiles, among other industrial applications. In humans, Chlorine Dioxide is a severe respiratory and eye irritant that can cause nausea, diarrhea and dehydration.”

    Research by the PP Blog shows that Daniel Smith apparently has supporters who’ve issued an appeal to “Please take a stand to help save MMS and Daniel Smith from the FDA.” A headline for video on the site describes the FDA as a “Cult of Tryanny.” A narrator describes the FDA as a “rogue agency” and superimposes the images of FDA Commissioner Margaret A. Hamburg and others against the backdrop of a height chart. It appears to be a ham-handed way to suggest that Hamburg and the other purported “rogues” should be booked at a police station.

    From the Justice Department statement (italics added):

    As part of the scheme to manufacture MMS, the indictment alleges that Smith, Delong, and others smuggled sodium chlorite into the United States from Canada using fraudulent invoices to hide the true end use of the product.   In these invoices, according to the indictment, they falsely claimed that the ingredients they were purchasing for MMS were to be used in wastewater treatment facilities.

    According to the charging documents, Smith and Delong were the managing members of PGL Smith co-founded the company, and Delong frequently handled financial transactions for the company and recruited friends and family to participate in the business. The indictment alleges that Smith and Delong paid Tammy Olson to handle all customer inquiries regarding the product.   It is alleged that Tammy Olson continued selling MMS on her own website after federal agents shut down the Project GreenLife website and production facilities.  

     The indictment also alleges that Smith and Delong paid Chris Olson to clandestinely manufacture MMS in a building on his property after regulators from the Food and Drug Administration (FDA) inspected PGL’s original manufacture and shipping locations.

  • Colorado Securities Commissioner Tells Durango Herald: ‘They Want So Badly To Believe In The Tooth Fairy’

    recommendedreading1Joe Hanel, the Denver correspondent for the Durango Herald, has written a series of reports that delves into the symphony of the bizarre surrounding Ponzi schemer Frederick H.K. Baker, who once was immersed in the HYIP world but now is in prison.

    If you’ve been wondering about the psychology of Ponzi schemes — perhaps particularly in the HYIP sphere, where victims may condemn the government for moving against obvious frauds — you’ll find value in the Herald series.

    The first installment is titled, “A man, a plan, a scam.” Part II is titled, “Scammers often earn victims’ trust through shared hopes, dreams, beliefs.” Hanel then delivers Part III, “After the scheme collapses, scammers recede into shadows.” Part IV perhaps has the most memorable title of all, “For a Ponzi payout, call the tooth fairy.”

    Part IV gets its title from a comment by Fred Joseph, Colorado’s securities commissioner. “They want so badly to believe in the tooth fairy,” Joseph told the paper.

    What sparked the comment was a recollection by Joseph that he once had to work hard to convince a resident of the state “not to send $50,000 to Belgium for the promise of getting millions in return,” according to the Herald.

    Here’s hoping the Herald series gets high readership.

    A snippet from Part I of the series (italics added):

    A few million dollars spent the winter in sunny Los Angeles with a company whose president now is on death row. When the law closed in, Baker moved the money to Portugal, placing it in the trust of a company registered in New Zealand, with an address in Panama and directors in the United Kingdom.

    That’s when it disappeared.