This ad for a purported Thailand escort service appears today in the United States on AdLandPro, a site whose operator is threatening a class-action lawsuit against RealScam.com, an antiscam forum. The PP Blog captured this screen shot today and edited it to remove the images of EIGHT AdLandPro members whose photographs were displayed in the left sidebar and created the appearance that the AdLandPro members also were members of (or approved of) the escort service. When the Blog reloaded the ad, the page displayed the images of EIGHT other AdLandPro members. A third reload served up an image of an entire family, including three young children who appear to reside in the South Central United States.
In November 2011, the PP Blog reported that Bogdan Fiedur of AdLandPro had threatened antiscam site RealScam.com with litigation. The bid to chill RealScam in the age of international mass-marketing fraud featured the registration of a domain styled RealScamClassActionSuit.com.
With Fiedur trolling for suckers and hoping to make his intellectual dishonesty go viral, RealScam did not buckle at his obvious bid to chill it.
Good for you, RealScam!
It’s hard to condense all the AdLandPro absurdities that followed over the next several weeks, but we’ll summarize them as such: A sampling of Stepfordian shills and mindless apologists stepped up to the plate for Fiedur, “fake” law students purportedly from a major American university entered the fray to add to the bid to chill — and the matter devolved into Threatre of the Absurd in that Internet-only sort of way.
By the end of December, the chill bid appeared to end: Content on the purported class-action site went missing, and the site began to resolve to an AdLandPro page.
We would be remiss if we did not point out that, in addition to being solicited to register for HYIP scams such as AdSurfDaily, Finanzas Forex and JSS Tripler/JustBeenPaid (730 percent a year) by purported “Christians” on AdLandPro over the past few years, American visitors (and others) also were solicited for cross-border sales of pharmaceuticals.
If drugs weren’t on their purchase list, AdLandPro visitors were told how to find used underwear and arrange — umm, how should we put this? — the temporary services of scantily clad women in various nations from India eastward after demonstrating a way to pay?
At least some of the risqué ads have gone missing, but their URLs remain. When they’re clicked, they resolve to pages that show the faces of AdLandPro members who had nothing to do with the placing of the ads. Did we mention that AdLandPro purports to be a great guardian of privacy and the interest of its members?
And did we mention that not all of the risqué ads have gone missing — and that, when they’re clicked, they load images of AdLandPro members who had nothing to do with placing the ads and that AdLandPro wants members to believe it was a sort of Facebook before Facebook became the craze?
“The most exclusive, classic and attractive companions in Bangkok are here waiting to join you, at your hotel, apartment, or villa,” one ad on AdLandPro reads today. “All our princesses are hand picked by our management for their beauty, demeanour and friendly attitude.”
The ad is on the “community” subdomain of the AdLandPro.domain. When the PP Blog viewed the ad earlier today, the photographs of EIGHT AdLandPro members showed up in a sidebar only inches to the left. The headline above the sidebar read, “Our Members.” Less than an inch away, a photo of a presumptive “escort” wearing a pink-lace bra and a pink-lace wrap over her genital area appeared. The photo appeared to display two red telephones, with the woman posing seductively on what appeared to be a bed or mat.
When the PP Blog reloaded the page, the images of eight different AdLandPro members were displayed. A third reload resulted in the display of images of an AdLandPro family whose matriarch identified herself in her AdLandPro profile as a mother and grandmother from the South Central United States.
Two adults in the photo were holding young children, one of whom appeared to be an infant. A third child also appeared in the photo. Below that photo, the full-face image of a lone AdLandPro member — a woman — appeared. Below the woman’s photo, an ad for “OneX” appeared.
OneX is a program accused Ponzi schemer Andy Bowdoin of AdSurfDaily said he was using to raise funds to pay for his criminal defense.
“I believe that God has brought us OneX to provide the necessary funds to win this case,” Bowdoin said in an October 2011 pitch.
So, if you’re an AdLandPro member and had nothing whatsoever to do with the placement of the escort ad and do not endorse Thailand “princesses” purportedly “hand picked by . . . management,” say, because you oppose human trafficking and the sexual exploitation of women, AdLandPro is making it appear as though you’re on board the Thailand escort train.
A link prompt below the photos of the eight AdLandPro members reads, “See All 185753 Members.” The URL points to the AdLandPro membership directory.
By coincidence, the U.S. Department of Justice announced today that Marcus Choice Williams, 36, of Fort Worth, Texas, was sentenced to 30 years in federal prison followed by 30 years of supervised release for various felony offenses related to a conspiracy to traffic women for prostitution.
“The court’s sentence clearly reflects the seriousness of these awful sex trafficking crimes,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “The victims suffered physical assaults, sexual abuse and daily degradation all because of this defendant’s greed and callous disregard for them as individuals. We are committed to prosecuting sex traffickers and vindicating victims’ rights, as they were vindicated today.”
Williams, prosecutors said, operated “adult escort web sites” as part of a human-trafficking scheme that also included money-laundering.
He “recruited vulnerable women, specifically single mothers from troubled backgrounds, and, in some cases used a combination of deception, fraud, coercion, threats and physical violence to compel the women to engage in prostitution, requiring each young woman to secure a daily quota of money, and if operating out of town, to wire the funds to him,” prosecutors said.
Crazier By The Moment
Just when one began to believe that AdLandPro had abandoned its absurd litigation threat against RealScam, guess what’s back? (You’d be right if you guessed the class-action site.)
And if ads on AdLandPro from “Christian” HYIP peddlers and purveyors of used underwear and illegal, cross-border pharmaceutical sales (after Google had agreed in August 2011 to pay the United States $500 million to settle claims of illegal cross-border solicitations for pharmaceuticals) were not enough, Fiedur’s purported class-action site is quoting a notorious YouTube cyberstalker and raunchy Internet gadfly, positioning him as an authoritative critic of RealScam.com.
It’s enough to make decent people from all corners of the world cringe as they contemplate whether intellectual corruption as practiced on the web has gained the upper hand.
WordPress suspended this JSS Tripler/JustBeenPaid affiliate Blog earlier today. Google had indexed a post on the site only hours earlier.
UPDATED 12:20 P.M. ET (U.S.A.) Within six hours of Google indexing (earlier today) a JSS Tripler/JustBeenPaid affiliate Blog using WordPress as a free platform from which to attract investors, Word Press caused the post to disappear.
Kudos to WordPress!
Visitors to the Blog URL of dailyrevenueresourcegroup.wordpress.com now see a message that the Blog “has been archived or suspended for a violation” of the WordPress Terms of Service.
The keyword title of the post, which now cannot be seen, was “How To Invest In JustBeenPaid.” The title ended with an exclamation point.
The post appeared to be a reposting of companion JSS/JBP-related content that appeared on Blogger, yet another free Blogging platform. The Blogger post remains active.
Amid claims that JSS/JBP’s advertised daily payout rate of 2 percent “is not a bad rate,” the now-missing WordPress post asked investors to compare JSS/JBP to a bank and planted the seed that prospects should choose the absurd program over the bank.
“Look at the banks [sic] they are only offering you .05-1% apr on yearly basis for savings accounts,” the now-missing WordPress post claimed.
In its introduction, the now-missing post claimed, “In this article it is my intent to help those that are unsure of how JustBeenPaid works and how to invest in it.”
Despite the WordPress ban, the same phrasing continues to appear on the Blogger site at Blogsport.com — along with at least three JSS/JBP affiliate links. The Blogger post is dated today.
It is common for promoters of highly questionable “opportunities” and even outright scams to rely on free hosting services in bids to recruit new affiliates and “earn” downline commissions.
Claims about JSS/JBP have been under investigation by CONSOB, the Italian securities regulator, since at least Jan. 23.
JSS/JBP does not disclose where it operates from. The scheme’s preposterous purported daily payout rate of 2 percent is double that of AdSurfDaily, which the U.S. Secret Service described in 2008 as an international Ponzi scheme that had gathered tens of millions of dollars.
Frederick Mann, JSS/JBP’s purported operator, described himself in 2008 promos as an ASD pitchman. In December 2010, ASD President Andy Bowdoin was indicted on charges of wire fraud, securities fraud and selling unregistered securities.
JSS/JBP has no known securities registrations. The “program” operates in an MLM-like fashion in which prospects are told they’ll receive a return of 60 percent a month for their “positions” — on top of two-tier affiliate commissions totaling 15 percent for recruiting prospects who send money to the company via offshore payment processors.
Among other things, the Terms for JSS/JBP makes members affirm they are not government spies or media lackeys.
An ad banner accompanying the still-active Blogger post solicits prospects to “Start collecting Unlimited $15 payments Straight to your Alertpay account.” When the banner is clicked, it lands on a JBP affiliate page that asserts, “Quickly Get CLEVER[.] GET PAID FOREVER!”
“[F]raudulent commercial schemes are not noted for their internal consistency.” — Professor James E. Byrne, consultant to FBI and Scotland Yard (among others) and HYIP expert hired by U.S. government to assess the alleged Pathway To Prosperity scheme in 2010
Frederick Mann
In a bizarre conference call for the JSS Tripler/JustBeenPaid “program,” a caller who identified himself as a former AdSurfDaily member raised the issue of the ASD Ponzi scheme case brought by the U.S. Secret Service in 2008, questioning whether JSS/JBP was safe from regulatory scrutiny or “getting too big and drawing certain attention.”
The implication of the remark was that the attention of the U.S. government would be unwanted.
With listeners identifying themselves as U.S.-based members of JSS/JBP on the line, Frederick Mann suggested that his purported program was outside the reach of U.S. law enforcement.
“Just Been Paid is not based in the U.S.,” Mann replied to the caller, after the female host of the call had paraphrased the caller’s query to Mann. The host paraphrased the question because Mann said he didn’t catch it the first time around.
” . . . [H]e was making reference to AdSurfDaily and that they were closed down, and he wants to know what we have in place to protect Just BeenPaid for it not to happen like AdSurfDaily,” the host said to Mann.
“Just Been Paid is not based in the U.S., and our servers are not in the U.S.,” Mann replied. “We don’t have an office in the U.S.”
But Mann’s answer did not speak to costly civil and criminal litigation that could ensue against JSS/JBP’s U.S.-based members, all of whom are using wires that run through the United States to participate in the purported program and some of whom are using U.S. wires to recruit downline members. Nor did the answer speak to actions the United States could take against JSS/JBP itself.
In 2008, marketing materials identified Mann as an ASD promoter. In January 2012, the Italian securities regulator CONSOB announced a JSS/JBP-related probe and issued a 90-day suspension order. JSS/JBP purports to pay out at a daily rate of 2 percent, double that of ASD. On an annualized basis, the payout rate of JSS/JBP corresponds to a return that is between 48 and 73 times the typical rates that put Bernard Madoff in prison for 150 years. ASD President Andy Bowdoin was indicted on Ponzi scheme charges in December 2010.
Bowdoin specifically was accused of wire fraud, securities fraud and selling unregistered securities. The U.S. Secret Service seized 10 of his personal bank accounts in August 2008, amid Ponzi allegations. Other court filings that became public in 2010 showed that the Secret Service also had seized bank accounts linked to some individual ASD promoters.
Mann previously has declined to identify JSS/JBP with a nation-state, meaning investors do not know where the “program” is operating from. JSS/JBP has no known securities registrations, and its U.S. affiliates very well could be selling unregistered securities to U.S. citizens via wire while at once implicating themselves and their recruits in a Ponzi scheme that is trying to disguise itself as a legitimate business.
Even if it is presumed to be true that the United States could not act against the company itself — and that’s a big “if” because U.S. law enforcement has a number of options should it choose to exercise them — U.S.-based affiliates of the “program” likely are running afoul of any number of civil and criminal statutes.
Internal Inconsistencies
In 2010, Professor James E. Byrne — who has consulted with the FBI and Scotland Yard and was hired by the United States to offer an expert opinion on the Pathway To Prosperity (P2P) HYIP scheme — observed that “fraudulent commercial schemes are not noted for their internal consistency” and that materials he examined in the P2P case displayed such inconsistencies.
After a probe by the U.S. Postal Inspection Service, P2P operator Nicholas Smirnow was charged criminally and accused of running an international financial scam. The purported return rate of JSS/JBP is somewhat on par with the rates of the alleged Smirnow/P2P HYIP scheme.
Internal inconsistencies were on full display during the March 8 JSS/JBP call featuring Mann.
As one example, a caller who identified himself as “John” and appeared to be speaking in U.S. English asked Mann for some specifics about the program, voicing that he was confused.
“All your marketing material — your website and now this conference call — has confused me more than anything I’ve ever heard in my life,” John said.
“You don’t have any answers for the [gentlemen] that have asked questions,” John said.
Mann suggested that John “submit a help request.”
Apparently growing agitated and increasingly confused, John shot back, “I submit that I just would like to have a straight answer.”
Mann again pointed John to the company’s web-based explanations and resources.
“The basic approach” to JSS/JBP, Mann explained, is to “find one thing that you understand and then find another thing that you understand, and that way you keep on finding things that you can understand.”
Unmoved by Mann’s response, John shot back, “I have two master’s degrees and I’m telling you that I do not understand it.”
John was the seventh caller to have asked Mann questions during the March 8 call. An eighth caller then came on the line. He identified himself as “Rick” (or by a name that sounded like Rick), saying he was from “California.” (Note: Garbling during the recorded call sometimes made it difficult to hear a name clearly.)
Rick questioned whether callers such as John should be asking Mann such “basic” questions, asserting that Rick, unlike John, had no master’s degree but nevertheless understood the program.
At that point, Mann observed that online money-making programs may have a “bigger learning curve.”
After Rick exited the line, a caller who identified himself as “Michael” from “San Francisco” stepped up to the plate for Mann and JSS/JBP.
Michael asserted that, like John, he has a “master’s degree,” adding that “I have lots of degrees” but noting that his academic pedigree was “really not applicable to online money-making.”
As guidance, Michael suggested that JSS/JBP promoters sign up for “all” of the payment processors used by the program — but Michael did not tell listeners that all of the processors with which JSS/JBP has associated itself are operating offshore (from a U.S. standpoint), are known to be friendly to fraud schemes and may deny customers U.S. consumer protections.
More Internal Inconsistencies
Other examples of internal inconsistencies presented themselves during the call, a recording of which was about 48 minutes in length.
One caller who identified himself as residing in “Florida” asked Mann about the importance of the “patent” claim on JBP’s website.
Mann initially replied that the “patent” claim is “not important at all.”
The response, however, gives rise to questions about why JSS/JBP even would mention a patent if it was “not important at all,” particularly since the “program” had altered the patent claim over time.
Prior to a website alteration that appears to have occurred last month, JSS/JBP made this specious claim: “JustBeenPaid! (JBP) and its related programs, including JSS-Tripler, are licensed under United States Patent 6,578,010.”
Those words were changed to read, “JustBeenPaid! (JBP) and its related programs operate in accordance with United States Patent 6,578,010 (now public domain).”
After reflecting on the caller’s patent question, Mann said this, “In any case, the patent is public domain. It doesn’t actually protect anything. But what is relevant about it is that a patent that covers some of what we do was issued and was approved by a government agency.”
In the United States, patents are issued by the U.S. Patent and Trademark Office, a government entity. The office is not the nation’s securities regulator.
It is common for scammers to try to associate a scheme with the government as a means of planting the seed that the government has full knowledge of the “program” and has endorsed it. The ASD scheme, for example, traded on the name of the President of the United States — something that caught the attention of the U.S. Secret Service, which has the twin duties of guarding the President’s life and protecting the U.S. financial system from criminals.
Callers also expressed confusion about “commission” payments from JSS/JBP and raised questions about an emerging JSS/JBP “Platinum” program that would accompany an existing “Premium” program through which some earlier members had paid higher fees believing they would “cycle” faster and make more money.
Based on comments made during the call, it appears as though the “Platinum” program is priced higher than the “Premium” program — and members are concerned that their earlier “Premium” purchases would be for naught if new “Platinum” purchasers effectively could pay more money to cut in line and “cycle” faster than them.
From WSPA: An agent returns inside to cart out another box at the headquarters of Atlantic Bullion and Coin Inc. in Easley, S.C.
UPDATED 7:31 A.M. ET (U.S.A., MARCH 17) State officials in South Carolina say Ronnie Gene Wilson and Atlantic Bullion and Coin Inc. were running a “precious metals” Ponzi scheme that gathered about $70 million from “numerous” investors in 25 states over the past three years.
After dark Thursday, the U.S. Secret Service was seen carting boxes out of the Easley, S.C., office of Atlantic Bullion. The scene was reminiscent of the earliest hours of the AdSurfDaily Ponzi case, which began as a civil probe by the Secret Service in August 2008 and eventually led to criminal charges against ASD President Andy Bowdoin of Quincy, Fla.
Like Bowdoin — once a councilman in Perry, Fla. — Wilson once was a councilman in Anderson County, S.C. The initial filings in the Wilson case suggest that he’d previously been on the radar of law enforcement for a scheme in the 1990s that led to a cease-and-desist order. Bowdoin also was implicated in a securities scheme in the 1990s, according to records.
South Carolina Attorney General Alan Wilson has filed a civil complaint in the Richland County Court of Common Pleas against Ronnie Gene Wilson.
Among the allegations is that Ronnie Gene Wilson “made false or misleading statements to investigators from the Securities Division, including statements regarding the quantity of silver that the defendants actually took possession of and held for clients,” authorities said.
“Investors must be wary of those looking to defraud and deceive,” Attorney General Wilson said. “The Securities Division will continue to watch for unscrupulous individuals and businesses looking to take advantage hard working investors.”
“The Government has provided over 2742 pages of discovery consisting of: liens, police reports, [Bureau of Prisons] records, pictures, surveillance photos, internet search records, audio subpoenas and over 1000 pages of documents seized.” — From March 5 court order in false-liens case involving accused AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming and former Leaming business associate David Carroll Stephenson
Kenneth Wayne Leaming
If the scheduling holds, accused AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming will go on trial in the Western District of Washington on Sept. 17 with his former business colleague David Carroll Stephenson, one week before ASD President Andy Bowdoin is set to go on trial in the District of Columbia in a Ponzi scheme case involving at least $110 million.
Leaming, 56, of Spanaway, Wash., is accused of filing false liens against at least five public officials involved in the ASD case, including a federal judge, three federal prosecutors and a special agent of the U.S. Secret Service. In addition, he is charged with being a participant with 56-year-old Stephenson, a federal inmate in a fraud case, in a scheme to file false liens against at least two federal prison officials.
At the same time, Leaming is charged with concealing two federal fugitives involved in an Arkansas-based, home-business fraud scheme involving millions of dollars, being a felon in possession of firearms and uttering a false “Bonded Promissory Note” with a purported face value of $1 million.
The docket of U.S. District Judge Ronald B. Leighton of the Western District of Washington now shows a trial date of Sept. 17 for both Leaming and Stephenson.
Leaming, who has a 2005 felony conviction for piloting an aircraft without a valid pilot’s certificate, originally was scheduled to go on trial March 20. That trial date was rescheduled for April 2 after a superseding indictment was returned against Leaming after his initial arrest on a criminal complaint in November 2011 — and now has been moved to September to give Leaming and Stephenson more time to prepare, according to court filings.
Bowdoin, 77, was indicted in 2010 on charges of wire fraud, securities fraud and selling unregistered securities. In August 2008, the U.S. Secret Service seized tens of millions of dollars from 10 of his personal bank accounts, amid allegations that Bowdoin was presiding over an international Ponzi scheme operating over the Internet.
Both of the Arkansas fugitives allegedly found with Leaming in Washingston state also are purported “sovereign citizens.” They were identified as Timothy Shawn Donavan, 64, and Sharon Jeannette Henningsen, 67. Donavan currently is detained in Oklahoma, and Henningsen is detained in Texas, according to records.
Leaming and Stephenson both are detained near Seattle.
As was the case with the original court filings in the 2008 civil action that led to the criminal prosecution of Bowdoin, investigators have produced surveillance photos pertaining to the Leaming and Stephenson prosecutions.
Records suggest that Leaming came under surveillance in Washington state by an FBI Terrorism Task Force by at least August 2011.
In addition to the surveillance photos, the government also has produced, liens, police records, unspecified “pictures,” prison records, Internet search records, “audio subpoenas” and “over 1000 pages of documents seized,” according to court filings.
All in all, according to the filings, the government has produced at least 2,742 pages of discovery in the Leaming and Stephenson cases.
Leaming has asserted he is proceeding to trial under “duress.”
In March 2009 — while the ASD Ponzi case was still a civil matter — Bowdoin claimed a January 2009 decision he made to submit to the forfeiture and stop pressing claims for the money seized from his bank accounts was made under “severe duress.”
He made the claim while acting as his own attorney, and further claimed that his decision to relitigate the case after earlier abandoning his claims was “legally accomplished as a matter of law” simply because he had filed papers saying so.
A month later — in April 2009 — federal prosecutors made a bombshell announcement in court that, prior to submitting to the forfeiture and dropping his claims to the seized cash, Bowdoin had signed a proffer letter and acknowledged the government’s material allegations were all true.
In September 2009, prosecutors said Bowdoin was telling ASD members one story — while telling a federal judge another.
Final orders of forfeiture were entered in the ASD civil case in January 2010. Bowdoin appealed, but lost in March 2011.
In the earliest days and weeks after the August 2008 seizure, some ASD members — ignoring the lessons of history — began to promote other schemes that advertised preposterous payouts, claiming they were safe because they were “offshore.”
One current HYIP scheme is JSS Tripler/JustBeenPaid, whose advertised daily payout rate is 2 percent — twice that of ASD. Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, identified himself as an ASD pitchman in 2008 web promos three months before the Secret Service raid on ASD headquarters in Quincy, Fla.
In a Feb. 23, 2012, conference call, Mann declined to say precisely where JSS Tripler/JustBeenPaid was operating from. On Feb. 27, the PP Blog reported that a site linked to Mann featured videos of Francis Schaeffer Cox, a purported “sovereign citizen” implicated in an alleged murder plot against public officials in Alaska.
On Feb. 29, the PP Blog received threatening communications from an individual describing himself as “MoneyMakingBrain.” Among other things, “MoneyMakingBrain” claimed he’d defend Mann “so help me God.”
On March 12, the PP Blog reported that “MoneyMakingBrain” had asserted the Blog would “go down in flames.”
On Feb. 18 — at RealScam.com, a forum that educates the public about mass-marketing fraud — “MoneyMakingBrain” published a link to the Mann-associated site that beams the Cox videos. It is unclear if “MoneyMakingBrain” understood that Cox was under arrest on serious criminal charges and is identified with the “sovereign citizen movement.”
NOTE: The PP Blog believes it is ill-advised to click on any link left by “MoneyMakingBrain” at RealScam.com.
One of the surveillance photos in the ASD Ponzi case: Source: Court files.
BULLETIN:Philip Lochmiller Sr., the Colorado recidivist securities huckster and Ponzi schemer whose case drew comparisons to the AdSurfDaily Ponzi case for a lack of key disclosures to investors, has been sentenced to 405 months in federal prison and ordered to pay restitution of $18.6 million.
The term amounts to nearly 34 years. Lochmiller is 64. He was taken into custody immediately by the U.S. Marshals Service upon his sentencing, federal prosecutors said.
U.S. District Judge Philip A. Brimmer presided over the case.
“Make no mistake,” said U.S. Attorney John Walsh of the District of Colorado. “Today’s sentence, which amounts to a life sentence, demonstrates that those who rob with the pen and the computer cannot evade the painful consequences of their crimes. Although this sentence can’t by itself undo the damage suffered by the many victims of this fraudulent scheme, justice was done.”
All in all, the scheme attracted more than $30 million and affected more than 400 investors, prosecutors said.
“Today’s sentencing provides 403 citizens victimized by Philip Lochmiller Sr some justice for the devastating financial losses he caused with deceit and misrepresentations,” said James Yacone, FBI special agent in charge.
Added Sean Sowards, special agent in charge of the IRS Criminal Investigation Unit in Denver: “IRS Criminal Investigation will work with our law enforcement partners to vigorously pursue and hold accountable those who perpetrate these schemes to get rich quick at the expense of honest Americans.”
Lochmiller’s stepson — Philip Lochmiller Jr. — also was implicated in the scheme. So was Shawnee Carver, an employee of Valley Investments, a company linked to Lochmiller’s Valley Mortgage Inc. entity.
Lochmiller Jr. earlier was sentenced to eight years and ordered to pay $18.6 million in restitution. Carver was sentenced to two years and ordered to pay $2.5 million in restitution.
Lochmiller and two members of his family were sentenced to prison for their roles in a California securities swindle in the 1980s, according to records. The 1980s scheme operated in the Greater San Diego area and resulted in 1,600 investors being bilked out of a total of $5 million.
Investors in Lochmiller’s most recent scheme were not told about his previous felony conviction, prosecutors said. Nor were they told about a bankruptcy filing.
Like Lochmiller, ASD’s Andy Bowdoin shielded investors from knowing he had been implicated in an Alabama securities swindle in the 1990s and had pleaded guilty to a felony, according to court filings.
At the same time, ASD investors were denied information that Clarence Busby, a key Bowdoin business associate, had declared bankruptcy and had been implicated by the SEC in three prime-bank swindles in the 1990s, according to records.
Here is an imponderable: Is there any ceiling to the absurdities in the HYIP sphere and the destructive force it exercises around the web?
On Wednesday, the PP Blog received repeated spams from U.S.-based IPs. The spammer used the handle “invest liberty reserve” and targeted two threads, including this one about JSS Tripler 2, a purported “program” that purportedly based its name on JSS Tripler. JSS Tripler is a purported element of JustBeenPaid, an “opportunity” purportedly operated by Frederick Mann that claims it pays a return of 60 percent a month.
Liberty Reserve is an “offshore” payment processor favored by HYIP schemes, including JSS Tripler/JustBeenPaid. Wednesday’s spam bids used purported email addresses at AOL and Hotmail.
One of the Wednesday spams featured a graphic swiped from PonziNews, once a sister site to the PP Blog. The spammer attempted to use the stolen graphic in his posting bid on the PP Blog.
It was not the first time the Blog’s graphics had been used in a nefarious way online. On Dec. 12, 2010 — in commemoration of its 1,000th post — the PP Blog recounted a July 2010 story that its Breaking News graphic had been swiped and placed inside a promotion for Data Network Affiliates.
DNA was a scam associated with huckster Phil Piccolo. The “opportunity” traded on the names of Oprah Winfrey and Donald Trump and advertised a nonexistent cell-phone plan of unlimited talk and text for $10 a month, an offshore “resorts” scheme and a “mortgage-reduction” scheme — all while tying itself to Christianity, the U.S. AMBER Alert system of locating abducted children and a purported bid to end world poverty.
It’s worth noting that some JSS Tripler/JustBeenPaid promoters also traded on Winfrey’s name.
In the same December 2010 commemoration post, the Blog reported that Janet Napolitano, the secretary of the U.S. Department of Homeland Security, had been called names that would peel paint when DHS announced that Walmart had joined the “If you see something, say something” terrorism-awareness campaign. Meanwhile, the Blog reported that some online-fraud schemes had evolved to victimize participants by the tens of thousands — numbers America’s largest sports stadiums could not accommodate.
The PP Blog no longer owns the PonziNews domain. The Blog suspended publication of the site in 2010, after thieves who used international IPs stole the domain’s content verbatim and posted it on other sites they controlled that had a higher Page Rank than Ponzi News.
In short, the net effect of the theft was that the PP Blog was being used to create “free” content for thieves who intercepted the traffic of PonziNews. Such piracy schemes are hurting the publishing industry.
In a separate spam bid on Wednesday, a would-be poster suggesting he represented an HYIP ranking site targeted this PP Blog thread on strange claims associated with “MoneyMakingBrain” in the context of JSS Tripler/JustBeenPaid.
The would-be poster purporting to represent the HYIP ranking site complained that the Blog had used the term “HYIP” in the linked story above “21 times” without explaining the meaning of the term.
“Nice writing job!” the would-be poster jabbed. He provided no comment on the substance of the story.
On RealScam.com yesterday, “MoneyMakingBrain” — who’d emailed threats repeatedly to the PP Blog on Feb. 29 — described the Blog as a “BIG idiot,” a “chicken,” a “deceptive unethical lowlife,” the user of “NONFACTUAL” sources and other names.
Because of the emailed threats and “MoneyMakingBrain’s” subsequent ban from the PP Blog, the Blog will not engage with MoneyMakingBrain on RealScam.com, an antiscam forum that concerns itself with mass-marketing fraud and occasionally has been subjected itself to threats and menacing communications.
“MoneyMakingBrain” has advanced various conspiracy theories about RealScam.com, the PP Blog and and some of their common posters.
What he has not done is explain what his purported “due diligence” into the JSS Tripler/JustBeenPaid “program” entailed or how purported operator Frederick Mann could pay an annualized return between 48 and 73 times higher than the purported “returns” of Bernard Madoff.
Yesterday on RealScam, “MoneyMakingBrain” asserted that he has “recently read [about the PP Blog] on some scams forum, that he is a very deceptive reporter, well, that doesn’t surprise the MMB at all.”
It is possible that “MoneyMakingBrain” is referring to this September 2009 thread on Scam.com. The thread was started by a PP Blog poster known as “little joe” who’d been banned for harassment. The poster, who later was banned from Scam.com, claimed the PP Blog would be “scrambling to put out fires” from multiple IPs.
The threats and intimidation campaign from “little joe” began after the summer 2009 collapses of AdViewGlobal (AVG) and Ad-Ventures4U (ADV4U), both of which claimed an ability to provide preposterous returns in the wake of the government seizure of tens of millions of dollars in the AdSurfDaily Ponzi case.
Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, has described himself as a promoter for both ASD and ADV4U.
On Aug. 18, 2009, antiscam commentators on the PP Blog were called “idiots” and the PP Blog itself was asked by an ADV4U promoter whether the author was a “fag.” After launching his ad hominem attacks against the PP Blog and its posters, the ADv4U pitchman asserted he was a longtime businessman and that criticism about ADV4U on the PP Blog was about “as unprofessional as it gets people.”
“I’m out of here.You bunch of idiots make me sick!!!” the poster railed.
Less than a year later — in May 2010 — Professor James Byrne, an expert hired by the U.S. government to assess the alleged HYIP Ponzi scheme of Nicholas Smirnow of Pathway To Prosperity — observed that HYIPs were not “noted for their internal consistency.”
One of the inconsistencies that became part of the ADV4U story was the assertion by the “defender” that he was a longtime, professional businessman — while the same “defender” asked the PP Blog if he was a “fag” and declared ADV4U critics who questioned a purported payout rate of 1 percent a day “idiots.”
Both assertions occurred a year after the U.S. Secret Service brought Ponzi allegations against ASD, whose payout scheme was similar to ADV4U’s.
Dwight Owen Schweitzer and Todd Disner — the two AdSurfDaily members from Miami who filed suit against the Justice Department and Rust Consulting Inc. in November 2011 — never filed remissions-claims forms, Rust said in a motion to dismiss the complaint.
And Schweitzer and Disner are “impermissibly” seeking to relitigate the forfeiture action against tens of millions of dollars in the personal bank accounts of ASD President Andy Bowdoin before a federal judge in Florida, Rust asserted.
The original civil case was brought by federal prosecutors in the District of Columbia and decided against Bowdoin/ASD by a federal judge in the District of Columbia.
But Disner and Schweitzer now are seeking a Florida venue to “avoid or evade the earlier judgment in the Seizure Action, or to deny its force or effect,” Rust argued in its dismissal motion.
The Florida court “lacks subject matter jurisdiction,” Rust argued. But even if the court concluded that it could preside over the the lawsuit, Schweitzer and Disner have not stated “a claim upon which relief can be granted against RUST, on the grounds that it constitutes an impermissible attack on the orders, rulings, and judgment rendered in the Seizure Action.”
“Plaintiffs are effectively seeking to re-litigate the Seizure Action in this case,” Rust argued. “Their material allegations and demands for relief center on their desire for this Court to determine whether the USA presented sufficient evidence in the Seizure Action to justify the seizure and confiscation of property held by ASD, including and in particular Plaintiff’s alleged property . . . In other words, in this action Plaintiffs seek to challenge the court’s decisions rendered in the Seizure Action. This is impermissible.”
Moreover, Rust argued, “it cannot be ignored that Plaintiffs admit they were afforded means in the Seizure Action to submit claims for their alleged property, but elected not to do so.”
In bringing their case in November, Schweitzer and Disner claimed an affidavit filed in the forfeiture case by the U.S. Secret Service in the District of Columbia was flawed and that the government hired Rust to implement a remissions program “designed to collect evidence and coerced admissions from the plaintiffs to be used by the government” at the criminal trial of ASD President Andy Bowdoin.
Disner and Schweitzer also took issue with government agents joining ASD prior to the August 2008 seizure and allegedly violating the ASD membership agreement, including an undercover agent who placed his undercover “MySpace” page in ASD’s advertising rotator. In 2008, the government alleged that “ASD did not require, or even verify that the agent “had any product or service to sell.”
Had the agents “lived up to the obligations they took on by becoming members of ASD they should have reported their own violations of the ASD terms of service with the result that the sites they foisted upon ASD would have been removed and the benefits to them as advertisers’ would be forfeited as the ASD rules mandated,” Disner and Schweitzer argued.
As of yesterday, the government had not responded to the lawsuit, which was brought by Schweitzer and Disner in the form of a complaint for declaratory relief that alleged Constitutional violations.
Whether Schweitzer and Disner properly served the government in the case is an issue.
U.S. District Judge Cecilia M. Altonaga has given them an extension of five days — from March 7 to March 12 — to demonstrate the government has been properly served.
If Schweitzer and Disner have properly served the government, it is possible that the Justice Department may move for dismissal on grounds similar to the grounds cited by Rust.
Not only were final orders of forfeiture entered by U.S. District Judge Rosemary Collyer in the District of Columbia, her orders were upheld by the U.S. Court of Appeals months before Schweitzer and Disner turned to the Florida federal court.
In September 2011 — weeks before Schweitzer and Disner brought their complaint — the government returned about $55 million to ASD members who demonstrated a loss through the remissions process administered by Rust.
When the government announced the return of the money, the U.S. Secret Service described ASD as a “criminal enterprise.”
In their complaint, however, Schweitzer and Disner argued that ASD was a profitable venture, in stark contrast to assertions by the government that ASD was insolvent because it created a liability of $1.25 for each dollar it took in through the sale of purported “advertising.”
“There is a line between First Amendment Rights vs. Libel here. So, when does your right to form an opinion begins (sic) and when does it constitute a defamation of character? The answer is, law enforcement agencies don’t pay attention to what’s being said on forums and blogs, so get your head straight and feet firm on the ground.” — “MoneyMakingBrain,” in March 4, 2012, post on RealScam.com
As previously reported on the PP Blog, a JSS Tripler/JustBeenPaid “defender” known as “MoneyMakingBrain” (MMB) has emailed threats to the PP Blog, hatched bizarre conspiracy theories here and at RealScam.com and planted the seed that he was someone to fear.
The email threats were received after MMB claimed Feb. 18 on RealScam he had performed “due diligence” on JSS Tripler/JustBeenPaid. On a website known as “ReviewOPedia,” a poster with the same handle offered this on Feb. 14, in the context of JSS Tripler/JustBeenPaid:
“They are for real! ”
Within the same Feb. 14 ReviewOPedia post, MoneyMakingBrain ventured this (italics added):
“BTW, everybody should check out the JBP live support chatroom which has over 160 people at any given time and is live 24/7. You can ask all the questions you can come up with and there is always moderator. Who does that? I’m sold already. So, if someone here claims that they ‘didn’t get paid’, either they still don’t understand how the matrix works or they’re just internet trolls.”
Whether the “MoneyMakingBrain” on the PP Blog and the “MoneyMakingBrain” on ReviewOPedia are one and the same is unknown to the PP Blog.
Precisely why the MMB known to the PP Blog and RealScam.com has been trying to chill specific individuals and antiscam forums is unclear. What is known is that what he’s doing is hardly unique.
Lessons Of HYIP History Ignored
While asserting that he knows the PP Blog’s IP address and posting location, MMB now is making a claim on RealScam, a forum that concerns itself with international mass-marketing fraud, that “law enforcement agencies don’t pay attention to what’s being said on forums and blogs.”
That claim is contrary to the public record, which shows that any number of agencies, self-regulatory bodies and private attorneys have been noting for years that HYIP schemes are proliferating on the Internet and being spread by posters on forums and social-networking sites. It also ignores the reality — also a matter of public record — that law-enforcement has a history of filing court documents that reproduce HYIP forum posts and of infiltrating HYIP schemes.
Prominent FINRA Warning On HYIPs
In July 2010, the Financial Industry Regulatory Authority issued this highly public alert. FINRA noted that “HYIPs use an array of websites and social media — including YouTube, Twitter and Facebook — to lure investors.”
HYIPs fabricate a “buzz” and create “the illusion of social consensus,” FINRA said, describing the sinister approach as a “common persuasion tactic fraudsters use to suggest that “everyone is investing in HYIPs, so they must be legitimate.”
Forum Posts Become Evidence In HYIP Cases
In the SEC’s May 2008 prosecution of the Legisi HYIP scheme, the agency included page after page of forum posts as part of a 267-page evidence exhibit in support of an asset freeze. A federal judge approved the freeze. (The screenshot below is from one of the forum pages.)
Legisi operator Gregory McKnight pleaded guilty to criminal charges of wire fraud last month. He also faces millions of dollars in civil judgments. The SEC Legisi filings also include a reference to the MoneyMakerGroup forum, which is listed in other federal court filings as a place from which HYIP Ponzi schemes are promoted.
This section of the Legisi Terms of Service purports that members must avow they are not an "informant, nor associated with any informant" of the IRS, FBI, CIA and the SEC, among others. The others included "Her Majesty's Police," the Intelligence Services of Great Britain, the Serious Fraud Office, Interpol and others.
Included within the SEC filings is a reproduction of Legisi’s bizarre Terms. (See graphic at right. It is taken from court filings.) Among other things, the Terms made members avow they were not an “informant” for various government entities.
JSS Tripler/JustBeenPaid has similar Terms. The Terms read like an invitation to join an international financial conspiracy. (The next two paragraphs are verbatim from the JSS Tripler/Just BeenPaid member agreement. Italics added.)
6. I affirm that I am not an employee or official of any government agency, nor am I acting on behalf of or collecting information for or on behalf of any government agency.
7. I affirm that I am not an employee, by contract or otherwise, of any media or research company, and I am not reading any of the JBP pages in order to collect information for someone else.”
When the U.S. Postal Inspection Service filed criminal charges against Nicholas Smirnow in May 2010 for his alleged operation of the Pathway To Prosperity HYIP Ponzi scheme, MoneyMakerGroup, TalkGold and ASAMonitor were specifically referenced in the service’s case filings. Smirnow now has his face on an INTERPOL “Wanted” poster.
MMB took great exception to the PP Blog’s Smirnow post, apparently believing it had no relevance in the context of JSS Tripler/JustBeenPaid. MMB also apparently believes the PP Blog and RealScam are treating Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, unfairly.
Among other things, MMB asserted on the PP Blog that “no one is invisible to the MoneyMakingBrain and you need to stop doing what you’re doing against this man immediately. Because if you don’t, I am going to make a formal complain (sic) to the very authorities you purport are coming after scam sites and send all the evidence I’ve gathered so far from posting on your site and the realscam site. I don’t like witch hunts and I am sure Fred Mann can whip your ass in court for your highly suggestive, provocative, highly contentious and flat-out defamatory commentaries against his character on your sites.”
MMB further suggested that JSS Tripler/JustBeenPaid critics may be “needing to look for another ISP because you won’t have internet access at home or your office, wherever.”
About three months after the SEC brought the $72 million Legisi/McKnight HYIP Ponzi case, the U.S. Secret Service — in August 2008 — filed evidence exhibits in support of an order to freeze tens of millions of dollars in AdSurfDaily-related bank accounts. The complaint in support of the seizure specifically references an ASD-related “Breaking News” Blog, and an evidence exhibit labeled “Government Exhibit 5” consists entirely of an ASD-related post on a different Blog that took up 15 printed pages.
The 15-page post featured alleged comments from ASD President Andy Bowdoin in which he threatened to sue critics.
“These people that are making these slanderous remarks, they are going to continue these slanderous remarks in a court of law defending about a 30 to 40 million dollar slander lawsuit,” the post quoted Bowdoin as saying. (The screen shot below is from Government Exhibit 5. It has been a matter of public record approaching four years.)
Both the ASD and Legisi investigations used government agents in undercover capacities, according to court filings.
Meanwhile, in June 2009, attorneys suing Bowdoin on behalf of ASD members in a civil RICO (racketeering) case referred to the PP Blog’s reporting on the ASD Ponzi case, specifically its reporting on a spinoff surf known as AdViewGlobal (AVG). (See court document. See June 30, 2009, related story. See PP Blog story the attorneys referenced in their filings.)
During its short run, AVG bizarrely asserted that it operated as a “private association” that enjoyed U.S. Constitutional protections in Uruguay. AVG used U.S.-based Gmail addresses to conduct business, something JSS Tripler/JustBeenPaid is doing. The defunct surf further claimed that it had appointed a person who held the title of “Protector.”
Such claims have been linked to the so-called “sovereign citizen” movement. On Feb. 27, 2012, the PP Blog reported that a site linked to Mann published videos of Francis Schaeffer Cox, a purported “sovereign citizen” indicted in Alaska in an alleged murder plot against public officials. The site features a drop-in ad for JSS Tripler/JustBeenPaid that encourages prospects to register with a Gmail address.
Whether MMB is aware of all of these these historical incidents while issuing threats and planting the seed he has the power to divorce JSS Tripler/JustBeenPaid critics from their Internet connections is not known. MMB’s posting privileges were revoked by the PP Blog last week after he emailed threats and menacing communications. RealScam has continued to permit MMB to post on its forum.
The PP Blog believes it is unwise to click on any link MMB has posted on RealScam. He appears to be attempting to bait members of the antiscam community into clicking on links as part of a bid to gather IP addresses and other data from posters — all while asserting he has the power to use the information to harm individuals and entities such as Eagle Research Associates, a California based nonprofit that seeks to educate the public about scams.
Piling On The HYIP Absurdity
In what would become one of the most visited threads in the history of the PP Blog, a poster known as “CORRECTION” repeatedly demanded that the Blog retract this June 3, 2009, headline about the AdViewGlobal (AVG) autosurf and a strategy advanced by a promoter by which AVG upline sponsors could gather money from individual prospects and funnel it through the sponsors’ local banks before passing it to offshore payment processors — instead of letting AVG gather the money.
“Get it right before you lead with this inaccurate, bias (sic) and unfair reporting!!!!!!!!!!!” CORRECTION demanded.
The PP Blog did not submit to the demand to retract the headline.
It was revealed later in court filings that the grand jury that indicted Bowdoin on charges of wire fraud, securities fraud and selling unregistered securities began to meet in May 2009, about a month prior to ASD- and AVG-related threats and demands made against the PP Blog.
“The focus of this sweep was fraud committed against individual investors, including Ponzi schemes, high-yield investment fraud, and market manipulation cases,” said Shawn Henry, the FBI’s executive assistant director. “Operation Broken Trust highlights the pervasiveness of the threat we face, and its impact on individuals from all walks of life.
“The perpetrators of these crimes are those who YOU might trust . . . friends and colleagues — people from your workplace, your child’s soccer team, even your church,” Henry said.
Read this March 1, 2012, story that reports a top U.S. Justice Department official speaking in Mexico referenced bogus libel lawsuits filed to protect criminal enterprises. Read this Justice Department news release last week on a meeting in Ottawa between top U.S. officials and top Canadian officials to discuss cross-border fraud.
More HYIP Nonsense: No ‘Unfriendly Political Jurisdictions’
JSS Tripler/JustBeenPaid purports to pay a daily return of twice that offered by Bowdoin and ASD — and eight times that of Legisi. The JSS Tripler/JustBeenPaid returns are somewhat on par with the returns offered by Pathway To Prosperity.
At the same time, JSS Tripler/JustBeenPaid says this on its website (italics added):
“Our business operations are geographically decentralized. We don’t have any central office. We’re not located in any ‘unfriendly political jurisdictions.’”
It is difficult to conceive how JSS Tripler/JustBeenPaid could send any brighter signals of a scam in progress, given its absurd advertised rate of return and a public proclamation that it is not located in any “unfriendly political jurisdictions.”
In 2008, Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, identified himself as an ASD pitchman. On Jan. 23, 2012 — six weeks ago today — the Italian securities regulator CONSOB announced it had opened a JSS Tripler-related probe and issued a 90-day suspension order.
During a March 1 conference call for JSS Tripler/JustBeenPaid, a caller informed Mann that a member of his second-level downline had informed him that the member’s bid to advertise the “opportunity” had been blocked in Holland amid concerns of legality.
“Tell him not to advertise in any particular country,” Mann replied.
EDITOR’S NOTE: A top U.S. official — speaking today in Mexico City at the High-Level Hemispheric Meeting Against Transnational Organized Crime hosted by the Mexican government under the framework of the Organization of American States (OAS) — addressed the challenges the world law-enforcement community is confronting in the Internet Age.
In remarks apt to cause unease within the HYIP and organized-crime spheres, Deputy U.S. Attorney General James Cole noted that the government was wise to efforts by criminals to chill efforts to expose crimes by filing libel lawsuits. (A link to Cole’s full prepared remarks appears at the bottom of this story.)
Some recent Ponzi cases in the United States involving incredible sums of money — and the corresponding behavior of some of the participants — help prove the point . . .
AdSurfDaily President Andy Bowdoin, named a defendant in a 2009 civil case that alleged racketeering, issued “slander” lawsuit threats prior to the August 2008 intervention by the U.S. Secret Service in the ASD scheme. The threats were issued not long after Bowdoin had returned from a trip arranged by a lawyer in which the ASD patriarch had ventured to Panama and Costa Rica, according to court filings.
Bowdoin later was indicted, amid allegations he was presiding over an international Ponzi scheme that had gathered at least $110 million. Robert Hodgins, who was referenced in 2007 ads for ASD, is an international fugitive wanted by INTERPOL. The United States accused Hodgins of laundering proceeds for narcotics traffickers in Colombia.
In advance of today’s High-Level Hemispheric Meeting Against Transnational Organized Crime, OAS Secretary General José Miguel Insulza noted that such crime “is the principal continental source of activities such as drug trafficking, the illicit trafficking of firearms and immigrants, human trafficking, money laundering, corruption, kidnapping, and cybercrimes.”
Befitting its importance, the hemispheric meeting was hosted by Felipe Calderón, the president of Mexico.
Among others things, Deputy U.S. Attorney General James Cole said this at the meeting:
“The advance of globalization and the internet, while hugely beneficial to people everywhere, has also created unparalleled opportunities for criminals to expand their operations and use the facilities of global communication and commerce to carry out their criminal activities across national borders.”
Although Cole did not use the term “HYIP” in his remarks, it is clear that the U.S. government is well aware of the dangers online fraud schemes pose as they reach across borders to accumulate tens and even hundreds of millions of dollars — sometimes through a single fraud scheme.
As the PP Blog read the text of Cole’s remarks, another thing leaped off the page. Indeed, Cole said this (emphasis added):
“Because of the sophistication of the world economy, organized crime groups have developed an ability to exploit legitimate actors and their skills in order to further the criminal enterprises. For example, transnational organized criminal groups often rely on lawyers to facilitate illicit transactions. These lawyers create shell companies, open offshore bank accounts in the names of those shell companies, and launder criminal proceeds through trust accounts. Other lawyers working for organized crime figures bring frivolous libel cases against individuals who expose their criminal activities.“
Cole, of course, wasn’t talking specifically about the AdSurfDaily Ponzi case and ASD’s preposterous claims that Bowdoin had found a legitimate way to pay interest of 1 percent a day on the tens of millions of dollars sent in by participants and that ASD would create 100,000 millionaires in three years.
Even so, the words Cole uttered in Mexico City today have deep relevance to the HYIP sphere. Indeed, ASD reached across international borders and relied on an international sales force.
Here is how ASD worked: It relied on “legitimate actors” of the sort Cole described — in ASD’s case, a lawyer who allegedly scrubbed the “opportunity” to ensure compliance, and Moms and Pops and entrepreneurs (and people down on their luck) who signed up and became the friendly faces to their prospect bases. The salespeople were paid 10 percent for recruiting a friend with money and 5 percent more if the friend could recruit a friend with money — on top of “surfing” earnings of 1 percent a day and even more through the purported miracle of “compounding.”
The current HYIP scheme of JSS Tripler/JustBeenPaid has the same type of payout schemes that ASD foisted on the marketplace. One big difference is the JSS/JBP says it can provide twice the daily payout of ASD.
JSS/JBP’s purported operator is Frederick Mann, a former ASD pitchman.
In September 2011, the U.S. Secret Service described ASD as a “criminal enterprise.”
You’ll note above that Cole today used the same phrase to describe one of the inherent threats of transnational organized crime. And, as noted above, he also spoke about bids to chill critics through the filing of libel lawsuits.
Those same types of threats were made in the ASD case, beginning in the summer of 2008. In fact, federal prosecutors even included an evidence exhibit in case filings that alluded to one such alleged threat. Unmentioned in the initial ASD case filings were the bids to chill reporters in at least two states and a newspaper in Georgia.
If you’ve been following the HYIP sphere for any length of time, you know that threats to sue members of the antiscam community are part of the landscape — so much so, that it has become an HYIP cliche. The bids to chill are not limited to threats to sue for libel and “slander,” however.
It also is becoming an HYIP cliche that the operators and apologists for brazen HYIPs threaten to file complaints with the ISPs of members of the antiscam community — i.e., if you report about us we’ll take down your Internet connection and/or sue you for copyright/trademark infringement.
These things are transparent bids to chill speech. They also are designed to have a secondary “benefit”: to make the marks — who may consist in part of people who are otherwise “legitimate actors” — believe that harm will come to them if they ever complain, that there are severe consequences to those who complain.
These nefarious methods have surfaced in scheme after scheme after scheme, as have various assertions about “offshore” venues and the purported “safety” the “offshore” venues provide. Longtime observers know the claims are part and parcel to the HYIP sphere — and that claims that someone is a successful businessman who has presided over multiple companies almost certainly will be incorporated into the sales pitch for an “opportunity.”
The FBI, for just one example, has been warning for years about securities fraud, the “shadow banking system” and the use of shell companies to disguise fraud proceeds. The director has testified repeatedly on Capitol Hill about the subject, while simultaneously warning about debit cards that are being used in nefarious ways and the dangers posed by lone wolves and “home-grown, violent extremists.”
All of these things are or may be in play in the HYIP sphere. Here are some things you should know:
It is likely that the scheme’s operator is trading on the credibility you have with loved ones and friends within your immediate sphere of influence to drive dollars to the scam. It is equally likely that you are being denied the sort of information that would empower you to make an informed purchasing decision and highly likely you are being asked to participate in a venture that could result in prosecutions under both civil and criminal law, possibly even the RICO statute.
The rate of return will be preposterous in any real-world context and the math will be fuzzy and confusing, if not downright impossible.
Your sponsor will lie to you or pass on GIGO that is part of the company line because the company line is more convenient than the uncomfortable truth. It will be garbage coming in, and garbage going out.
You will be subjected to a direct or indirect threat or a bid to chill, especially if you ask uncomfortable questions or raise any doubts.
There is a chance you’ll be working for a racketeer or an international criminal, perhaps even a “sovereign citizen” who has hatched a construction by which nothing is a crime, that all conduct is lawful in the name of freedom and free markets. If your sentiment is against the government or “big business” because of your personal financial situation or your political or philosophical views, an extremist may try to exploit your sentiment for personal profit.
Just some things to think about in the age of the HYIP, the age of terrorism and the age of transnational organized crime as practiced on the Internet . . .
Read the full remarks of Deputy U.S. Attorney General James Cole here.
“Either we talk about here, or I talk about somewhere else (that’s not a threat, it’s a promise :)” — ‘MoneyMakingBrain (MMB), in email threat to PP Blog, Feb. 29, 2012, 7:52 a.m. ET
UPDATED 4:22 P.M. ET (U.S.A.) It has happened again: The PP Blog has received yet another threat via email for its reporting on the HYIP sphere, which FINRA described in a 2010 Alert as a “bizarre substratum of the Internet.”
Today’s threat came from “MoneyMakingBrain” (MMB) in apparent “defense” of JSS Tripler/JustBeenPaid, an HYIP “program” purportedly operated by self-described former AdSurfDaily and Ad-Ventures4U pitchman Frederick Mann. JSS Tripler/JustBeenPaid claims it pays a return of 2 percent per day.
ASD operator Andy Bowdoin, 77, is an accused Ponzi schemer under indictment for wire fraud, securities fraud and selling unregistered securities. The ASD scheme, which was based in Florida, gathered at least $110 million and created thousands of victims, federal prosecutors have said. Bowdoin’s Ponzi trial has been scheduled for September 2012. JSS Tripler/JustBeenPaid purports to pay a daily return twice that of ASD.
Among other things, Bowdoin has compared the August 2008 U.S. Secret Service raid on ASD’s headquarters to the 9/11 terrorist attacks and described it as the work of “Satan.”
MMB’s initial email threat was received at 7:52 a.m. ET. It was followed by another email threat at 11:14 a.m. in which MMB suggested he’d seek to cause banking troubles for a specific PP Blog poster and defend Mann “so help me God.”
“You could be the nicest guy in the world, doing a real public service, but on the matter of Frederick Mann, you’ve made a gross error, and you crossed the line, Mr.,” the second threat read in part. “I am not a passive by-stander Patrick, I am one of those who will come and help an old man from being beaten up by a bully, so help me God.”
The second email also claimed that, “If anything, you’ve brought all this upon yourself.”
On Feb. 27, the PP Blog reported that a site registered to Mann in South Africa at the same street address of JustBeenPaid had at least 11 links to videos featuring Francis Schaeffer Cox. Cox, 27, is a purported “sovereign citizen.” He is accused in Alaska of a “militia” murder plot against public officials.
Federal prosecutors known to be investigating the ASD scheme in the District of Columbia declined to comment on the Blog’s story, which was published Monday. Meanwhile, federal prosecutors known to be investigating the “sovereign citizen” movement in the Pacific Northwest did not respond to a request for comment on the report.
Today’s disturbing developments began with the Blog’s receipt of the initial threatening email at 7:52 a.m. The initial threat implied that, if the PP Blog did publish a comment submitted by MMB during the overnight hours and respond to the email, MMB would seek to cause harm to the Blog. The PP Blog did not reply to the initial email. Nor did it reply to the follow-up threat.
MMB’s comment already had been published by the PP Blog by the time the initial email threat was received. The comment was submitted at 1:12 a.m. today and approved by the PP Blog at approximately 7:30 a.m., after being temporarily sequestered in a holding queue because of the menacing nature of previous comments submitted by MMB.
An anonymous proxy in Europe was used to send the comment, and a Gmail address was entered on the PP Blog’s Comments form. For the past two days, MMB has been submitting comments that imply he has the power to harm the Blog if the Blog does not submit to his threats. His comments were sent from IPs in the United States and Europe. Today’s email communications from MMB were the first received from MMB.
Because the Blog believes it is important to publish comments that showcase the bizarre and sometimes menacing nature of the HYIP sphere, it has published several comments from MMB since Monday. But because today’s email threats introduced a new form of electronic menacing and implied a PP Blog reader would be subjected to a hectoring campaign, the Blog no longer will publish any additional comments from MMB.
The PP Blog engages in the marketplace of ideas, not the marketplace of threats.
These are among MMB’s menacing assertions yesterday:
“I know you’re reading everything I write and you are scared.”
” But, continue to annoy the MoneyMakingBrain and deviate him from his monitoring duties, and you’ll be the ones to be in the hot water. “
“no one is invisible to the MoneyMakingBrain and you need to stop doing what you’re doing against this man immediately. Because if you don’t, I am going to make a formal complain (sic) to the very authorities you purport are coming after scam sites and send all the evidence I’ve gathered so far from posting on your site and the realscam site. I don’t like witch hunts and I am sure Fred Mann can whip your ass in court for your highly suggestive, provocative, highly contentious and flat-out defamatory commentaries against his character on your sites.”
“You can delete my comments as much as you like, but take what I said to the bank. In the end, you are going to look like a fool.”
“Maybe it’s a good idea that you stop your charade once and for all and finally cease and desist attacking Mr. Fred Mann, who is innocent until proven guilty. Not going to be repeating myself again.”
“Needless to say that you’ll be needing to look for another ISP because you won’t have internet access at home or your office, wherever. Needless to say that your server host will also shut down your sites down for violation of terms and conditions.”
MMB also advanced a number of conspiracy theories, including one in which he asserts that two different people who post on RealScam.com and the PP Blog are one and the same. RealScam is a forum that concerns itself with mass-marketing fraud.
In November 2011, RealScam was subjected to a bid to chill from Bogdan Fiedur, the operator of AdLandPro, a website whose members routinely promote HYIP schemes and other highly dubious pursuits. JSS Tripler/JustBeenPaid is one of the “programs” promoted on AdLandPro, which also has a presence on Ponzi forums such as TalkGold and MoneyMakerGroup.
Conspiracy theories are part and parcel to the HYIP landscape, as are threats — direct and veiled. Today”s second MMB email threat also raised the specter of fear.
” . . . it’s clear that you are too scared of me by now,” the second email read in part.
In November 2011, an FBI Terrorism Task Force arrested ASD figure and purported “sovereign citizen” Kenneth Wayne Leaming on charges he filed false liens against at least five public officials involved in the ASD Ponzi case. Two months later, a superseding indictment was returned against Leaming that accused him of participating in a scheme to file false liens against two U.S. prison officials, uttering a false “Bonded Promissory Note” for $1 million and being a convicted felon in possession of firearms.
So-called “sovereign citizens” have been linked to various forms of securities fraud and tax fraud. Because they believe prosecutors and judges have no authority over them, “sovereigns” have been known to target state, local and national officials in plots to file bogus liens and destroy the credit of members of the law-enforcement community and litigation opponents.
Their harassment methods, which feature the use of both postal mail and email and often include direct or veiled threats, have become known as “paper terrorism.”
When arrested, Leaming, the ASD figure and purported “sovereign,” was found with two federal fugitives from Arkansas who’d been indicted on charges of duping participants in a home-business scheme of more than $2 million. Those fugitives also have been linked to the “sovereign citizen” movement and filed a series of bizarre pleadings in Arkansas after their arrests with Leaming, who is jailed near Seattle. Both fugitives now are detained at federal facilities in Texas, according to prison records.
After MMB sent today’s initial email threat, he sent another comment to the Blog that included a threat:
“Stop abusing your forum as Lynn does, or I am going to conclude that there is a business relationship between the two of you, and that would be bad a thing (I am afraid to say anything else as you may call it another ‘threat’).
“And yes, this is not a threat: you’re better off having me talking here than somewhere else. I know too much already about both you and Lynn, and I still want to believe that the two of you are men of good (although the tactics of one indicate the otherwise).”
“Lynn” is a reference to Lynn Edgington, the chairman of Eagle Research Associates Inc., a 501(c)3 Public Benefit Charitable Corporation based in Mission Viejo, Calif.
The second email implied that MMB would seek to interfere with an Eagle Research banking relationship.
