Tag: Acting U.S. Attorney Jill Westmoreland Rose

URGENT >> BULLETIN >> MOVING: (13th Update 1:43 p.m. EDT U.S.A.) After an investigation by the U.S. Secret Service, Kristi Johnson (Kristine Louise Johnson) of the “Achieve Community” has been charged criminally with wire-fraud conspiracy and has agreed to plead guilty, federal prosecutors said.

“By the time the scheme collapsed in February 2015, the conspirators owed victim-investors at least $51 million in purported investment returns, yet Johnson, her conspirators and TAC had available only 4% or approximately $2.6 million,” the office of Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina said.

The SEC charged Johnson, 60, civilly in February 2015 with operating a combined Ponzi- and pyramid scheme that allegedly had gathered at least $3.8 million. She resided in Aurora, Colo., the agency said. The securities regulator also charged Troy A. Barnes, 52, of Riverview, Mich.

Barnes disclosed in February that he was a target of a federal criminal investigation. A charge sheet (known as an “information”)  filed by prosecutors yesterday against Johnson described an alleged co-conspirator as “CC#1.” The information also suggested there were other co-conspirators “known and unknown to the United States Attorney.”

These individuals were not named.

The conspiracy prosecution brought by the Secret Service and federal prosecutors appears to have upped the Ponzi dollar sum to $6.8 million. Prosecutors said Achieve “defrauded more than 10,000 investor victims” worldwide.

Prosecutors called Achieve a “sham internet company.” The case against Johnson was brought in the venue — the Western District of North Carolina — that is the center of action in the 2012 Zeek Rewards’ Ponzi- and pyramid scheme.

Achieve and Zeek are known to have had promoters in common. Both schemes instructed prospects and recruits not to call the respective programs “investment” programs in bids to skirt securities laws. Such disingenuousness dates back to at least 2008 and the AdSurfDaily Ponzi scheme, also broken up by the Secret Service.

Here’s how prosecutors described the alleged verbal gymnastics of Achieve and its bids to dupe investors, payment processors and law enforcement (italics/bolding added):

According to court filings, as the scheme grew in size and scope, Johnson and her conspirators concealed the true nature of the scheme through multiple misrepresentations.  According to court records, when the conspirators became concerned that the use of the term “investment” would draw scrutiny from regulators, they instructed victim-investors that “We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.”

According to court records, Johnson and her conspirators also lied about the company’s “business model” to the third-party payment processors which processed TAC’s money transactions.   When one payment processor concluded that TAC was operating a Ponzi scheme and terminated TAC as a client, court records show that Johnson and her conspirators falsely told victim investors that it was because the payment processor was unable to handle the large amount of money TAC paid to its investors.

As indicated in court documents, the investment scheme began to crumble when payment processors stopped processing the Ponzi payments to victim-investors.  By the time the scheme collapsed in February 2015, the conspirators owed victim-investors at least $51 million in purported investment returns, yet Johnson, her conspirators and TAC had available only 4% or approximately $2.6 million.

Prosecutors said “a signed plea agreement was also filed [Thursday], and Johnson is expected to appear before a U.S. Magistrate judge in the coming days to formally accept the plea. The wire fraud charge carries a maximum of 20 years in prison and a $250,000 fine. As part of her plea agreement, Johnson has agreed to pay restitution, the amount of which will be determined by the Court.”

In January 2015, Achieve promoter Rodney Blackburn produced an ad that featured nearly six minutes of continuous footage from the website of the SEC. The ad suggested the SEC did not have jurisdiction over “programs” such as Achieve and “Unison Wealth.” At the time, the SEC declined to comment on the Blackburn promo.

Blackburn promoted several recent Ponzi-board scams that tanked. Included among them were “Daily-Earnings,” plus “Moore Fund” and “Trinity Lines” and “Rockfeller Asset Management Limited” and “Bring The Bacon Home” and “Automatic Mobile Cash.”

Zeek receiver Kenneth D. Bell has raised the issue of MLMers proceeding from one fraud scheme to another.

In December 2014, the PP Blog reported that Achieve boosters were parroting each other and circulating a promo that read, “We are not investing in a stock or buying shares in a company. We are using our God given universal right to spend our money the way we want. We choose not to sell out to the banking system for their tiny little 1% annual return.”

Prosecutors described Achieve’s purported 700 percent return as “bogus.” The SEC described Achieve as a  “pure Ponzi and pyramid scheme” whose revenue “has consisted entirely of investor-contributed funds.”

Claims of that a “triple algorithm” made such outsized returns possible also were bogus, authorities said.

Achieve offered a 700 percent ROI, according to the SEC and federal prosecutors.

NOTE: Our thanks to the ASD Updates Blog.