Unlike the boffo web-based schemes of TelexFree, Zeek Rewards and AdSurfDaily, the “Achieve Community” scam in which participants were told they’d glean returns of 700 percent did not perform well (relatively speaking) at the MLM Pyramid/Ponzi Scheme Box Office.
What’s particularly alarming about U.S.-based Achieve is that, though small in dollar volume and victims’ count compared to its larger fraud kin, it still reached into more than 140 countries.
Federal prosecutors from the office of U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina now say Achieve created about 10,000 victims, “including more than 4,000 located outside the United States.”
The U.S. victims’ count also presented a logistical challenge — enough of one, at least, for the Justice Department to assign its “Mega Victim Case Unit” to the Achieve matter. The unit helped prosecutors contact U.S. victims.
As the PP Blog reported in July 2015, prosecutors established a web page for victims. Authorities now say “[a]pproximately 229 victims including 29 located in foreign countries have provided details of their victimization. . .”
When a federal crime is committed, prosecutors said, victims have “[t]he right to reasonable, accurate, and timely notice of any public court proceeding . . . involving the crime or of any release or escape of the accused,” and “[t]he right to be reasonably heard at any public proceeding in the district court involving release, plea, sentencing, or any parole proceeding.”
When a case with a large number of victims such as Achieve presents itself, it becomes a practical impossibility to contact each and every person who has been defrauded. Because of this, prosecutors have asked a judge to approve a plan that provides “notification to victims who reside in other countries through the internet by posting details about the case and relevant victim impact forms on the United States Attorney’s Office website.”
And there are other logistical challenges when victims of a U.S. crime hail from other countries, prosecutors said.
“Because each country has its own procedures and requirements for contacting persons located in its territory, contacting each foreign victim directly is not practical or advisable,” prosecutors said. “Due to sovereignty concerns, many countries limit or prohibit foreign government officials from directly contacting persons within that country’s borders. This case’s 4,000+ foreign based victims hail from over 140 different countries.”
So, Internet notice is the thing.
We’ll conclude this column with a question: If Achieve created a need for the Justice Department to bring in its “Mega Victim Case Unit,” what sort of need will the TelexFree case create? There may be on the order of 1 million victims in that scheme.
Watch for a special PP Blog editorial tomorrow.
Achieve’s Kristi Johnson is scheduled to be sentenced Nov. 19. Matters pertaining to her alleged colleague Troy Barnes appear to be unresolved.
Let’s say you’re an MLMer or network marketer. Your email inbox begins to fill up with offers for a scheme that purports to be an “advertising program” favored by famous brands. Spammers are trying to blast their way into your social-media accounts.
The messages: You’re going to be rich in no time. Beyond that, you’re going to receive valuable shares in a startup.
This was Bossteam E-Commerce Inc. — and it was a noxious Ponzi fraud whose “Inc.” designation was meaningless and served as a reminder that a corporate registration is not proof no scam is occurring.
AdSurfDaily ($119 million) was an “Inc.” running a fraud. Bernard Madoff was at the helm of an LLC involved in the largest Ponzi scheme in U.S. history. (NOTE: MLMers/network marketers should think about these things that next time they point to an “Inc.” or “LLC” designation” as proof of legitimacy. TelexFree, accused of operating a combined Ponzi- and pyramid scheme that gathered on the order of $1.8 billion, was both an “Inc.” and an “LLC.” Rex Venture Group “LLC” operated the Zeek Rewards scheme believed to have gathered on the order of $897 million. At one point in time, promoters of ASD, TelexFree and Zeek pointed to corporate registrations as proof no scam was occurring. The same thing happened with DFRF Enterprises, currently in the news.
As the PP Blog reported in May 2012, the Bossteam “program” surfaced in British Columbia and allegedly sold memberships for up to $5,000 each. Prospects allegedly were told they’d get paid for clicking on ads and could exchange purported “private” shares through a purported “internal trading platform.”
But “Bossteam committed fraud when they created the false impression that Bossteam members and well-known local and international businesses were paying Bossteam to advertise on its websites,” a panel of the British Columbia Securities Commission found in a decision dated yesterday. “This was untrue, as the majority of ads appearing on Bossteam’s websites were associated with Bossteam’s own accounts, and not to accounts for parties that had paid Bossteam to post their links.(NOTE: Bossteam is hardly alone in this category. Remember EAdGear?)
ASD, Zeek and TelexFree also had purported “advertising” elements.
It gets worse — and MLMers/network marketers need the learn from this history.
The panel found that each of the respondents breached the Act by:
distributing securities of Bossteam without first having filed a prospectus, contrary to section 61(1);
engaging in conduct that perpetrated a fraud on those who purchased securities of Bossteam, contrary to section 57(b);
withholding information concerning the sale of securities of Bossteam in response to a demand for production issued under section 144 of the Act, contrary to section 57.5; and
attempting to conceal or withhold information concerning the sale of securities of Bossteam by instructing others to deny Bossteam had offered such securities to the public and to refer to the concept of online trading as being planned for the future, contrary to section 57.5.
Put another way, Bossteam first ripped off its members and then tried to draft them into an international conspiracy to cover up the fraud scheme.
The decision involved the conduct of Bossteam, Guan Qiang Zhang (also known as Victor Zhang) and Yan Zhu (also known as Rachel Zhu).
Among the panel’s conclusions was that “Zhang contravened section 57.5 of the Act by attempting to conceal information concerning the sale of Bossteam securities when he instructed others to stop referring to Shares as shares and instead call them consumer credits.”
It is common for HYIP scammers to try to tweak language to skirt securities laws. Both before and after the tweaks, the scammers may seek to dupe the fleeced masses into doing the same thing — a circumstance that leads to a flood of misinformation on the web.
One of the classic fraudulent tweaks occurs when a scheme purports to be morphing from a private offering into one that soon will trade on one or more public stock exchanges. Here is part of what the BCSC said in its May 2015 Investor Alert on the DFRF scheme.
The BCSC has become aware that [Daniel Fernandes Rojo] Filho is offering investments to British Columbians with returns of up to 15% per month. Filho is also promising that DFRF will soon be listed on a public stock exchange, after which the value of members’ investments will triple within 30 days. Members will continue to receive up to 15% per month on their investment. These returns are economically impossible. Also, when selling securities, it is illegal to represent that those securities will be listed on an exchange without certain conditions being met.
Daniel Fernandes Rojo Filho also has been cited in filings as Daniel Fernandez Rojo Filho.
The SEC announced its action against Filho, DFRF and others last week. Here is part of what the agency said (italics added):
The SEC alleges that Filho and others began selling “memberships” in DFRF last year through meetings with prospective investors primarily in Massachusetts hotel conference rooms, private homes, and businesses. DFRF promoted the investment opportunity through online videos in which Filho falsely claimed that the company had registered with the SEC and its stock would be publicly traded. As DFRF’s marketing reach widened, membership sales dramatically increased from under $100,000 in June 2014 to more than $4 million in March 2015 alone.
Since late March 2015, the defendants have claimed that DFRF is registered with the Commission, its stock is about to become publicly traded, and current investors may convert their membership interests into stock options at $15.06 per share. At first, Filho represented that public trading would start in mid-April 2015. Since then, he has announced several delays and offered various excuses. On June 17, 2015, he claimed that, although public trading has not begun, the value of DFRF stock now exceeds $64 per share.
DFRF and Bossteam were not precisely alike, but both schemes allegedly were offering frauds that operated as Ponzi schemes and duped investors with talk of trading shares. Bossteam allegedly lined up about $14 million, with DFRF coming in at about $15 million.
Bossteam has been cease-traded. Zhang and Zhu have been banned from the British Columbia securities trade. Fines and disgorgement against the pair total $28 million.
Many current online HYIP schemes share a common story of above-market returns, with shared wealth being enjoyed by the masses. These may be advanced as private or public offerings, with references to in-house platforms or public stock exchanges. The term “IPO” also is used in some schemes.
In recent years, the schemes have led to losses that cascade across the globe. The schemes may be positioned as “offshore” and therefore safe or even guaranteed. There may be accompanying claims prestigious banks or insurance companies provide financing or a guarantee against losses.
Among the SEC defendants in the DFRF case is Heriberto C. Perez Valdes, 46, of Miami. The SEC alleged that he is a manager of a Massachusetts DFRF entity “with responsibility for “all administrative and executive work.’”
The agency further alleged that Valdes also is “an administrator of Platinum Swiss Trust, a purported Swiss private bank that is not actually authorized to conduct banking activities in Switzerland. (Emphasis added.) “He has made materially false and misleading statements about DFRF in public meetings and videos posted on the internet.”
How deep did the deception go? Perhaps deep into Boston Harbor.
“On October 16, 2014, DFRF sponsored a public event on a cruise ship in Boston harbor,” the SEC alleged. “Several videos of the event were posted on the internet. In one video, Filho states that DFRF makes a gross profit of 100% on its gold production in Africa, it needs the investors’ money to ‘leverage’ its credit line in Switzerland and triple its available funds, it pays 15% per month to investors (but cannot promise to do so without violating the law), and the investors’ money is fully insured. In a second video, Valdes states that the investors’ money is held in Switzerland and is fully guaranteed.”
Like other schemes (including TelexFree), an insurance company was said to provide DFRF members a safeguard against losses.
Here is part of what the SEC alleged against DFRF defendant Jeffrey A. Feldman, 56, of Boca Raton, Fla. (Italics added.)
He is the sole officer and director of Universal Marketing Group, Inc., a Florida corporation. He claims to be the U.S. representative of Accedium Insurance Company (“Accedium”), which is based in Barbados and London. In July 2007, he filed for personal bankruptcy. In 1998, he was found guilty of fraud and forgery for having received $2.5 million in premiums from a rental car chain for insurance policies that he did not actually obtain. In 1996, the state of Florida revoked his license to sell insurance after he pleaded no contest to charges that he submitted false insurance claims for losses he supposedly suffered from Hurricane Andrew. He has made materially false and misleading statements about DFRF in public meetings and videos posted on the internet.
4TH UPDATE 2:47 P.M. EDT JUNE 27 U.S.A. An unsigned pro se pleading docketed June 23 and attributed to Zeek Rewards’ clawback defendant Catherine Parker is leading to questions about whether Parker is a Canadian “sovereign citizen” taunting a U.S. federal court in North Carolina and the receivership judicially empowered to gather hundreds of millions of dollars for Zeek victims.
The 2008 petition called for the U.S. Senate to investigate federal prosecutors and the Secret Service, claiming that “we as Americans have a right to advertise with any company without interferences [sic] by [sic] Attorney General and /or any of its agents.”
Prosecutors said ASD was a securities company offering unusually consistent, above-market returns while posing as an “advertising” firm. Zeek, which also had a purported “advertising” element while allegedly offering securities, offered unusually consistent returns even higher than ASD.
Parker resides in Hamilton, Ontario, according to the June 23 pleading attributed to her. That’s the same city and province that appeared under the name of Catherine Parker in the 2008 ASD petition, leading to questions about whether a Zeek beneficiary with “sovereign” ties also had profited from ASD’s outrageous scheme that also was advanced by “sovereigns.”
The June 23 pleading attributed to Parker was sent back to Parker’s Hamilton address for a signature, according to the clawback case docket. The case is styled “Bell v. Parker et al.” Kenneth D. Bell is the court-appointed Zeek receiver. In the early months after the SEC’s August 20012 Ponzi- and pyramid action against Zeek, Bell, a former federal prosecutor, was accused by an asserted Zeek member to have committed a felony.
Senior U.S. District Judge Graham C. Mullen is presiding over the Zeek clawback actions. A longtime jurist and former Naval officer, Mullen is no stranger to poisonous filings that may be designed to embarrass or even ruin public officials by making scandalous claims against them.
In 2002, in a case unrelated to Zeek, Mullen became the alleged target of a smear campaign that used both the court docket and the Internet. Mullen then was the chief judge in North Carolina’s Western District.
In the 2002 case, the disciplinary committee of the North Carolina State Bar found that an attorney had used a website and created a “fictitious criminal record” for Mullen and had asserted that the judge had a felony record for horribly disgraceful crimes.
The attorney, who allegedly complained about “the record keeping practices of several federal, state and local entities,” including the IRS, the FBI, the CIA, the Administrative Office of the United States’ Courts, the Charlotte Mecklenburg Police Department, the Mecklenburg County Sheriff and the North Carolina State Bar, also allegedly tried to weaponize his own pleading accusing Mullen of felonies, according to the Bar filing.
“Now that these documents are a part of the record in this case, any person can come look at the court file, and copy only the pages that they want, and publish them in any newspaper or on any web site, with or without any explanatory comment, for any purpose they want to accomplish,” the attorney allegedly wrote. “No one is under any obligation to say that these are spoof pages and that the Chief District Judge did not do these things and was not ever arrested for these things. Isn’t freedom wonderful! And as long, as they only publish the pages, and don’t comment on whether they are true or not, they can’t be sued for libel, due to the absolute privilege that attaches to court filings.”
The June 23 pleading attributed to Parker appears to contend that Parker, who faces a Zeek-related default judgment of nearly $214,000, entered a defense to the clawback claims in October 2014 and that Parker has a postal receipt to prove it — but that a 46-page document she submitted in her defense was never entered into the record of the case. The pleading, however, does not detail the asserted October 2014 defense. Nor does it appear to include a copy in the form of an exhibit that presents the claimed defense.
Instead, the pleading purports to make a U.S. court clerk for the Western District of North Carolina the “respondent.” It also contends that the clerk and two attorneys working for the Zeek receivership under Bell have “dishonored the court.” At the same time, the pleading puts the court’s Charlotte Zip Code in a bracket — “[ 28202 ]” as opposed to a straightforward 28202, the standard convention.
A pleading that asserts “dishonor” claims against public officials and litigation opponents is consistent with tactics employed by “sovereigns” and their adherents. So is the use of a bracket to encase a Zip Code. (See the Blog of the Anti Defamation League, which has a March 15, 2013, story unrelated to Zeek that references a bracket and “sovereign” conspiracy theories about Zip Codes. The ADL story reports on a particularly tragic outcome for a purported “sovereign” the PP Blog also has written about.)
Whether the asserted October 2014 filing by Parker complied with the local rules of U.S. District Court for the Western District of North Carolina — the venue from which Parker was sued for the return of her alleged Zeek winnings plus interest — is not known. What is known is that pleading standards exist in U.S. courts. Pro se filings also are one of the hallmarks of “sovereign citizens,” individuals who may express sentiment that laws do not apply to them or that courts do not have jurisdiction over them.
A court is not mandated to accept any and all pleadings. Some “sovereigns,” for instance, have been known to submit vexatious pleadings that seek to use the courts as an outlet for smear campaigns against judges, clerks, government officials and litigation opponents. “Sovereigns” also have been known to submit nonsensical claims or antigovernment or extremist political arguments, rather than cogent legal defenses.
Whether Parker is a “sovereign” is unclear. Some individuals have fallen under spells by “sovereigns” who sell pleading kits online or at speaking engagements. Now-jailed AdSurfDaily Ponzi-scheme figure Kenneth Wayne Leaming was a purported “sovereign citizen.” Fellow ASD figure Curtis Richmond also was a purported “sovereign.”
Is A Canadian ‘Sovereign Citizen’ Taunting The U.S. Court And The Zeek Receivership?
On its first page, the June 23 pleading attributed to Parker includes what appears to be an ink stamp or seal of something called the “INTERNATIONAL FLAG OF PEACE.” Some “sovereigns” have shown a fascination with ink stamps, including ones in red that purportedly signify a bloody thumb print. (See this May 13, 2015, story in the Jackson Hole News & Guide that refers to purported “sovereigns” in Wyoming and the “International Flag of Peace.”)
Meanwhile, some “sovereigns” have expressed a fascination with capital letters, arguing in essence that if their names appear in caps, the reference is to a nonperson, a person who does not exist or to a person who exists in two forms. The June 23 pleading attributed to Parker asserts she is a “natural person.”
Another oddity with the June 23 pleading attributed to Parker is that it requests “a certified copy” of any oath taken by the court clerk and “certified copies and detailed lists of all [the clerk’s] court related bonds, sureties, indemnifications, and insurance related policies.”
This, too, is consistent with filings by “sovereign citizens.”
Although the June 23 pleading attributed to Parker is typewritten, the phrase “special, private, priority” is scrawled in longhand down the left-side margin of both pages. The reason why was not immediately clear. Some “sovereigns,” however, have expressed a belief that certain word combinations and certain types of punctuation have magical properties that can render courts and litigation opponents powerless, resulting in the dismissal of a case.
The June 23 pleading attributed to Parker ends with the words “Notice to Principal is notice to Agent and Notice to Agent is Notice to Principal.” Similar words have appeared in filings by “sovereign citizens” in U.S. courts.
“Sovereign citizens” in Canada sometimes have been called “Freemen on the land.” In certain instances, they have polluted Canada’s courtrooms with gobbledygook and have behaved in fashions similar to American “sovereigns” — claiming interests in properties they do not own and asserting their actions flow from common law or the Uniform Commercial Code.
Although many “sovereigns” clutter court dockets with mind-numbing nonsense, they do not act out in violent ways.
“Sovereigns,” however, have been linked to violence, including the murders of police officers.
Questions have been raised about whether a Canadian “sovereign citizen” murdered Edmonton Constable Daniel Woodall earlier this month.
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.
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 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.
From an Achieve promo playing on YouTube. Masking by PP Blog.
Achieve offered a 700 percent ROI, according to the SEC and federal prosecutors.
EDITOR’S NOTE: Certain reports by the PP Blog that are available to any person with an Internet connection are referenced in a consolidated, amended prospective class-action complaint that makes claims against various defendants with an alleged association with TelexFree. Information from other publicly available sites, including BehindMLM.com, RealScam.com and others, also is referenced.
The purpose of the PP Blog is to make information available to a wide audience interested in Ponzi schemes, pyramid schemes, securities-fraud schemes and concerns about the interconnectivity of such schemes. The Blog was not consulted about the inclusion of its links or quoted material from the Blog. Nor was the Blog compensated. The PP Blog has no association with the class-action attorneys, who obviously are readers of the Blog and the other online publications.
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Still promoting MLM HYIP schemes in the face of evidence they cause intractable financial, legal and emotional pain that sometimes mushrooms to involve hundreds of thousands of people?
On March 9, 2015, the PP Blog reported that the name of “MyAdvertisingPays” was referenced in a TelexFree-related proposed class-action lawsuit filed in U.S. District Court for the Southern District of New York in December 2014.
The filing appeared to mark the first time MyAdvertisingPays, known in shorthand as MAPS, was referenced in a federal-court filing.
History shows that such references are closely watched by law enforcement. Indeed, they sometimes serve as unofficial triggering actions and presage federal regulatory action by civil authorities such as the SEC and even actions by agencies empowered to enforce criminal laws.
When the California Department of Business Oversight was investigating the WCM777 scam in 2013, for instance, TelexFree’s name popped up in the context of the cross-promotion of MLM HYIP schemes.
This was months before it became known that the SEC and the U.S. Department of Homeland Security were investigating TelexFree, alleged to have gathered at least $1.6 billion in a combined pyramid- and Ponzi scheme.
Instead, the complaint alleged that TelexFree huckster Daniil Shoyfer was “the largest single Promoter” of TelexFree “in the greater New York area.” Web records showed that Shoyfer also was promoting MAPS alongside MAPS colleagues such as U.K. hucksters Simon Stepsys and Shaun Smith.
Willfully blind and supremely disingenuous MLM HYIP promoters moving from one cross-border fraud scheme to another has been a longtime problem. Such promoters may have little of their own money invested, but contribute to a condition under which banks and payment processors become warehouses for fraudulent proceeds cycling between and among scams.
New York is the financial center of the United States. The filing of the proposed TelexFree class action there contributed to questions about whether MAPS soon would be on the U.S. regulatory and enforcement radar.
The answer to that question remains unclear. What is clear is that the New York complaint was transferred to Massachusetts, the U.S. home base of TelexFree. And it’s also clear that Shoyfer has been named a defendant in an amended TelexFree class-action complaint filed April 30 in Massachusetts federal court.
Among the allegations against Shoyfer (italics added/light editing performed/formatting not precise):
TelexFree changed its compensation plan on or about March 9, 2014, much to the fury of affiliates, noted below. Shoyfer, however, continued to promote it unremittingly, sending group text messages to his network with such as the following:
Hey..my team Telexfree! ! And here we go again..Come to check out and learn about new compensation plan TF 2.0.. and how to grow it even faster and MUCH more aggressively and efficiently than the one we had before.…Here is this week’s schedule. . Monday 03/24 at Salon Delacqua (2027 86 str) at 8.00 pm (in English) ..Wednesday 03/26 at SOHO launch(2213 65th street) at 7.45 pm ( in Russian) and Thursday 03/27 at 7.30 pm at 63-112 Woodhaven Blvd in a real estate office. In my case, since I have started from absulute zero during this passed week Mon 03/17- Sun 03/23/14 I booked 11,500 from new one and 21,600 still coming from old plan..A total of 31,100 in 7 short days… Go Telex!!!
After the institution of the new TelexFree compensation plan in March 2014, Shoyfer took part in a closed meeting with TelexFree’s directors and owners in Marlborough, Massachusetts, at which Shoyfer was instructed not to discuss the new TelexFree compensation plan with others and non-insiders, as the new compensation plan was detrimental to Promoters and was adopted to forestall [TelexFree] filing bankruptcy.
So, a man who allegedly promoted TelexFree and had inside information detrimental to ordinary TelexFree affiliates allegedly kept it to himself, continued to promote the scheme — and then moved on to MAPS. This naturally leads to questions about whether Shoyfer has kept information from ordinary MAPS members.
Purpose Of The Amended TelexFree Class Action
The complaint is an effort to consolidate for the sake of efficiency various TelexFree-related class actions filed in various courts. Such actions were filed in multiple U.S. states.
But that’s not the only news: The amended complaint also names TelexFree pitchman Scott Miller a defendant alongside Shoyfer and HYIP huckster Faith Sloan. In documents prepared by Zeek receiver Kenneth D. Bell, Miller’s name appears as an alleged winner in the $897 million Zeek scheme.
In 2013, Miller promoted TelexFree through a publication known as Home Business Advertiser. Another advertiser promoted a cash-gifting scheme. A columnist described Jesus Christ as the person who inspired modern network marketers through his recruitment of 12 disciples.
A Semacon cash-counting machine appeared as a stage prop in a cash-gifting video advertised in Home Business Advertiser. The promos appeared after two women in Connecticut were sentenced to federal prison for their roles in a cash-gifting scheme and tax fraud.
Also named promoter-defendants in the amended TelexFree class action are Sanderley Rodrigues de Vasconcelos (Sann Rodrigues), a two-time SEC defendant in pyramid-scheme cases who allegedly also claimed his actions were inspired by a deity; Santiago de la Rosa; and Randy N. Crosby.
How the promoter-defendants will pay for their defenses in the amended class action is an open question. One of the risks of promoting such schemes is to be left totally on your own if the government or class-action attorneys file lawsuits.
Another open question is whether other shoes will drop in the government actions. The government probes are ongoing. Some of the class-action defendants conceivably could become defendants in amended or new actions filed by the SEC or agencies that have criminal enforcement power.
The amended TelexFree class action asserts fraud claims under Massachusetts law against a slew of defendants, including financial vendors and MLM attorney Gerald Nehra, also a figure in the the Zeek scheme and the AdSurfDaily Ponzi-scheme story. ASD was a $119 million Ponzi scheme broken up by the U.S. Secret Service in 2008. ASD operator Andy Bowdoin was sentenced to federal prison in 2012, after authorities tied him to at least two other cross-border fraud schemes: OneX and AdViewGlobal.
ASD’s name is referenced repeatedly in the amended TelexFree complaint, as is the name of Zeek. When the complaint will be heard is anyone’s guess. That’s because there are unresolved criminal matters against alleged TelexFree principals James Merrill and Carlos Wanzeler, both of whom are named defendants in the amended complaint and also are among the subjects of the SEC complaint.
Katia Wanzeler, Wanzeler’s wife, also is named a defendant in the amended complaint. So is TelexFree figure Joe Craft, another defendant in the SEC action. Brazilian TelexFree figure Carlos Costa also is named a defendant in the amended class action.
Also named a defendant in the amended class action is Jason “Jay” Borromei of Laguna Niguel, Calif. Along with a company known as Opt3, he is accused of “intentionally, knowingly, unfairly and deceptively set[ting] up TelexFree’s United States-based servers in Brazil with the intent of directly furthering, aiding or abetting their unlawful and fraudulent operation, including facilitating the placement of evidence of the Pyramid Scheme beyond the jurisdiction of the United States’ courts.”
With TelexFree itself in bankruptcy court, the class-action plaintiffs contend that “Opt3 and Borromei have a history of providing technical services within the multilevel marketing industry and hold themselves out as having related specialized knowledge. For example, Borromei previously served as chief information officer of Joystar, Inc., later renamed Travelstar, a multilevel marketing company that collapsed in approximately late 2008, and subsequently entered involuntary chapter 7 bankruptcy.”
Though not named a defendant in the amended class action, TelexFree and Zeek figure Tom More also is referenced in the 200-page complaint.
‘Private Jet’ Gets A Mention
On March 9, 2014, the PP Blog reported that a person who took the stage at a TelexFree rah-rah fest in Massachusetts asserted that TelexFree had access to a “private jet” that recently had ventured to the Dominican Republic and Haiti.
The “private jet” also was referenced in the class-action complaint. Details about it remain unclear.
At the moment, the April 30, 2015, amended and consolidated complaint is posted here at the website of class-action attorney Robert Bonsignore.
More lawsuits against international “winners” in the Zeek Rewards cross-border Ponzi-and pyramid-scheme case are coming, receiver Kenneth D. Bell has advised a federal judge.
Bell also signaled to Senior U.S. District Judge Graham C. Mullen that lawsuits may be coming against alleged international Zeek vendors such as Payza and SolidTrustPay, both of which earlier were involved in the AdSurfDaily Ponzi scheme and are Ponzi-forum darlings.
On another front, Zeek’s former COO — Dawn Wright-Olivares — doesn’t get to keep her cars.
“In the first quarter, the Receiver also took possession of several motor vehicles as part of the settlement with Defendant Dawn Wright-Oliveras,” Bell informed Mullen. “The Receiver has retained an auctioneer and intends to liquidate these vehicles during the second quarter of 2015.”
Bell’s forensic team has tracked Zeek money all over the world. The receiver already has sued alleged “winners” with addresses in the United Kingdom, Canada, Australia, New Zealand, the British Virgin Islands and Norway.
It won’t end there, he advised Mullen in a quarterly update to the court filed yesterday.
“The Receiver expects to file lawsuits against foreign net winners in additional countries during the second quarter of 2015,” he wrote.
News that Bell intended to expand his efforts to gather money for an estimated 800,000 victims of Zeek’s cross-border scheme was received while the nation of Thailand was squaring off against UFunClub/UToken, yet another scheme pushed by MLMers/network-marketers.
So-called “sovereigns” were involved in the $119 million AdSurfDaily Ponzi scheme in 2008. ASD was pushed in part by Frederick Mann, the purported operator of multiple fraud schemes. Mann appears to have had sympathy for Francis Schaeffer Cox, an Alaskan “sovereign” and militia man implicated in a plot to murder public officials.
A scheme known as Profitable Sunrise also appears to have been pushed in part by “sovereign citizens.”
UPDATED 7:57 A.M. EDT U.S.A. UFunClub and its purported digital currency known as UToken are the latest examples of grandiose absurdities in the MLM/network-marketing HYIP sphere. These transnational schemes pose an untenable economic and political danger. They must be destroyed.
To the people of Thailand and likely an incredibly large number of people in other nations, UFunClub/UToken is what a combine/knife cutter bar is to a field of grain: The people — living, breathing human beings — have been reaped, threshed and winnowed by equal-opportunity MLM/network-marketing scammers operating with reckless abandon.
The heart of the scam is that people are being duped into believing they’re investing in something Bitcoin-like, only on the ground floor, only better and only without any inherent risks such as price volatility and imbalances in supply and demand. As the screen shot above demonstrates, investors are told UToken values only can rise and never can fall.
The identity of UToken’s official scorer and the location from which he or she delivers this purportedly permanent miracle are unknown.
What is known is that harebrained schemes in this sphere are infamous for con men such as AdSurfDaily’s Andy Bowdoin, a “man behind a green curtain” who fabricated numbers to make the impossible appear to be plausible. This was done prior to the collapse, of course.
After the 2008 collapse — and prior to the imposition of a prison sentence against Bowdoin — investors were falsely told the government didn’t understand the “program” and the new way of doing business electronically.
Burks’ green curtain allegedly was situated in a North Carolina building with an attached coin-operated laundry. Bowdoin’s was in a former flower shop in Florida. UFunClub/UToken appears to have arranged a much better backdrop for photos: an office tower.
Drones And Cops
Despite the arrests of his colleagues and an ongoing pyramid/Ponzi investigation by the police in his host country, Jamison Palmer, an American UFunClub/UToken promoter living in Thailand, has positioned himself as an insider.
In the aftermath of Ponzi/pyramid police raids against UFunClub/UToken in Thailand, it’s important to have the “proper perspective,” Palmer drones on video, building a narrative that the police have been misinformed and that the “media” is the real culprit.
UFunClub/UToken is not a Ponzi or pyramid scheme and is not the problem, he contends. The problem is that “the media in Thailand is notoriously corrupt.”
For good measure, Palmer adds, “Here in Thailand, it’s possible to pay off the media. UFun has a lot of jealous competitors, and so that may be what we’re looking at here. There’s obviously some type of agenda.”
It is common for MLM/network-marketing firms and affiliates to blame events on competitors with axes to grind. (Read here how Dawn Wright-Olivares did so at Zeek Rewards before the SEC shut down the “opportunity” and before she was sued civilly and charged criminally.)
Even Thailand’s Prime Minister has recognized that the country’s media lies and twists things, Palmer contends.
The Prime Minister, according to Palmer, is on record saying that “he’s going to shut the media down” if reporters keep telling lies. Palmer did not explain how the head of a Democracy answerable to 67 million inhabitants would go about the draconian business of halting presses, blocking broadcast signals and preventing web publishing.
In the wake of the Thailand investigation, UFunClub has been working with their “teams of attorneys” and is preparing “a calculated response,” Palmer says, prodding investors not to lose faith.
“We’re planning on acquiring as many UTokens as we possibly can,” he says of his recruitment team.
But even the core stories surrounding UToken are hard to reconcile. Some promoters say at least 22 percent of its value is backed by gold. Palmer claims that UToken holds “money-generating assets” such as interests in Asian commercial developments and the “marble-mining project, which has an estimated value of tens of billions of dollars.”
These dollars prop up the purported UToken “reserve,” Palmer says.
Even as the Thai probe moves forward, questions have been raised about whether UFunClub/UToken has found political cover in Malaysia. If the answer proves to be yes, it will only add to the cross-border horror. (Please see Concluding Note at bottom of column on a PP Blog theory of what could be contributing to the impression that UFunClub/UToken is operating with impunity in Malaysia.)
Thai police have been on the case since at least April 10, the date raids were conducted and the first arrests were made. The dollar volume involved may exceed $1.17 billion (U.S.).
UFunClub/UToken likely is based in Asia. Exactly where is unclear, even though there is a glistening office building in Bangkok that promoters point to as proof no scam exists. The “program” may be operating through layered nominees in multiple Asian nations and through corrupt Asian distributors who effectively are the local faces of the “program,” but are puppets on a string to the true braintrust.
How deeply it has penetrated the United States is unclear. But if you look at the screen shot below from a UToken promo in English and then visit this story and review some of the graphics and narratives from the TelexFree and AdSurfDaily Ponzi-scheme stories, you will quickly learn that UFunClub/UToken promoters used the same insidious marketing methods that put nearly $2 billion on the table for TelexFree and ASD combined.
Compare these instructions given to UFunClub/UToken recruits to those given recruits of TelexFree and AdSurfDaily.
There have been reports that some UToken investors, unnerved by reports of investigations, are trying to offload their holdings. The same thing happened with TelexFree “AdCentrals.”
Make no mistake: UFunClub, like TelexFree before it, is doing things that encourage black-market profiteers. And because serial scamming is part and parcel to this noxious sphere, scammers within the larger scam can be relied upon to expand the black market.
Some UFunClub/UToken figures are considered international fugitives. Some of these figures may not be managers or principals at all. Rather, they may be individuals who rented their faces or credentials to the “program” to give it a veneer of legitimacy.
The UFunClub/UToken Band Plays On
Despite the well-documented actions of Thai police to contain the damage, the UFunClub/UToken band plays on in Malaysia. Propaganda videos from American cheerleaders for the schemes appeared online over the weekend. They show Dato Daniel Tay, UFun’s purported executive chairman, being given the welcome of a rock star. Never mind that he is a suspected international felon allegedly involved in a colossal cross-border fraud.
Zeek Rewards was an alleged $897 million Ponzi- and pyramid scheme. Zeek was promoted in part as a “private, invitation-only” program.
How is UFunClub/UToken being promoted? Well, as a “private member registration only” program. In short, UFunClub/UToken’s script apple didn’t fall very far from Zeek’s insidious tree.
Zeek may have scalded 800,000 or more investors while also triggering Ponzi clawback litigation against thousands and thousands of alleged “winners” across the world. The claim that Zeek was “private” did nothing to forestall these lawsuits.
In Thailand so far, the prospect of Zeek-like clawback lawsuits has not been raised. Instead, in the early days of the probe, police appear to have concentrated on seizing vehicles, homes and other personal property. MLM/network-marketing fraud schemes typically are labyrinths with interconnected rabbit holes.
What else does one see online about UToken? Convenient, shoehorned daily claims that UToken is better than Bitcoin and has perfected a means by which the UToken value, unlike Bitcoin, only will rise and never will fall. As noted above, there are companion claims that UToken is backed by gold. The odd thing about that is that gold values fluctuate — and yet UToken purportedly does not.
How is UToken’s purported permanent upward movement possible? Well, to hear the cheerleaders tell it, UFunClub also has investments in mineral mining (marble) and major construction projects that are indefatigable cash cows, apparently whether building occupancy and retail activity is zero percent or 100 percent and whether consumer and corporate buying power rises or falls.
Remember the 2008 economic crisis that swept across the world and caused, among other things, waves of foreclosures in the United States at rates unseen since the Great Depression? Remember those sad and disturbing images of the stick-shells of homes and commercial sites sitting empty, their partially installed, tattered insulation flapping in the wind?
To hear the UFunClub/UToken Happy Land cheerleaders tell it, UFunClub/UToken apparently insulates investors worldwide from all of that — in fact, from any negative that could come down the pike.
UFunClub’s apparently perfect investments in marble and development projects apparently also serve as a hedge against drops in the price of of government-issued currency, further guaranteeing that UToken never will go down. The natural extension of this fantastic line of logic is UToken will go up even if gold and real estate go down and even if the dollar crashes.
It’s purportedly win-win with UToken in perpetuity, 24/7/365, apparently even if a recession occurs across the world, even if terrorists carry out a political assassination or an attack against masses of people that panics the markets, even if a major power grid goes offline through infrastructure neglect or actions by terrorists, even if an earthquake ravages a major population center and destroys commerce in that area or releases a radiation cloud.
Reduced to its essence, nothing can cause UToken to go down, not even the current criminal investigation that likely will expand into other countries. The narrative holds that income from UToken will be “passive,” there will be “splits” when it reaches a certain dollar value, the wealth will rain down on members as a whole and create an endless number of “millionaires,” and UToken will start trading on NASDAQ in 2016.
Wouldn’t you just love to see an SEC registration statement or a prospectus for an offering tied to a digital currency that purportedly is backed by a “private” reserve and can never go down in value? Can you imagine a jaw-dropping footnote that reads, “UToken’s value is perennially guaranteed to increase because we hold investments in marble and profit-generating construction projects?”
Of course, UFun also purportedly engages in the sale of products such as cosmetics and perhaps juices. There’s not much talk about it, though. Almost all of the talk is about the miraculous marriage of businesses that apparently are unaffected by general marketplace conditions, inflation, interest rates, supply-chain issues, cross-border logistics and regional differences in money values.
Precisely who is keeping the books isn’t clear. Also unclear is how UFunClub/UToken deals with compliance issues in the dozens of countries in which it conducts operations.
The three screen shots in this PP Blog editorial are from the same online promo for UFunClub/UToken. Among the information not shown in the shots are references to a “home run” and these text lines (italics added/not in order as they appear in the text):
Talks and Agreements are also being held between the Chinese Governrment [sic] and UFUN Management to Officially Upgrade Utokens as China’s Recognized Digital Currency.
With so many more projects in The pipelines, It is no longer a SECRET that The Top Elites in Asia are Rushing to buy THEIR UTOKENS! And now it’s the English speakers turn to get their slice of this ever-growing massive pie!
NOTE
Please hold all bank wires until further notice
Hello Team,
I just got finished messaging with Jamison and have been told that we need to put a stop to sending wires altogether. They are on the verge of releasing their payment gateway and have asked that the wiring of funds cease. I do not have any further info about the payment gateway as of yet, but once that it established, we can move forward full steam ahead.
Based on the text lines, it seems clear that UFunClub/UToken has solicited investors across the world to wire money to the “program.” At some point, a marching order went out to stop using wires. This adds yet another layer of general murkiness.
A Special Message For American Promoters
This PP Blog column is mostly for “serial” American MLMers/network marketers who boarded the UFunClub/UToken train and became promoters: You are making your trade look ridiculous on a global scale. You are injuring people while you turn a blind eye and pursue illicit profits. You are making your country look ridiculous.
Some of you started as exporters of Ponzi and pyramid schemes. Now, you’re importing them to your friends, neighbors, family members and loved ones. It is not macular degeneration that afflicts you; it is willful blindness. You are not promoting capitalism and “freedom”; you are promoting naked greed and anarchy.
UFun/UToken is, at its essence, an insidious scam that relied on disguised, cross-border crowdfunding and claims about future IPOs to advance a preposterous offering fraud that is tied to an equally preposterous digital currency. The suggestions that Thailand is a “little” country and therefore there’s nothing to fear from the probe ring every bit as hollow as the claims that Profitable Sunrise investors had nothing to worry about because North Carolina was a “small” state.
History shows that the claims that TelexFree investors had nothing to fear because the original action was brought by the “small” Brazilian state of Acre were equally vapid.
More than anything else, UFunClub/UToken demonstrates there is no ceiling to the willful blindness and criminality within MLM and network marketing. A pulse is the only thing needed to become a target.
And once you become immersed in the lunacy, some of the lunatics who melted your brain even may try to get you to turn against your own country.
America got a new Attorney General yesterday. She very likely will have a relatively short stint, given that President Obama will leave office in early 2017.
Loretta Lynch nevertheless will have a chance to cement an enduring legacy. It could start with an all-out assault against the insidious schemes that are weakening America and its allies even as these words go to print.
Prospects across the world are being told to buy into UFunClub/UToken for sums ranging from $575 to $57,500 and that the “program” plans to begin trading on NASDAQ in 2016.
Concluding Note
Malaysia is coming under editorial fire for not cracking down on UFunClub/UToken. There are companion reports that a member of the prime minister’s family somehow is involved with the “program.”
There is do doubt that various MLM/network-marketing scams have tried to influence the political process and have thrown around money to politicians. This happened in the United States with AdSurfDaily, Zeek Rewards and WCM777, and prosecutors have pursued all three “programs” aggressively.
These schemes are heavily layered and murky. All investigations require time to “follow the money.” Dozens and dozens of money-moving conduits, shell companies and nominees could be in play. One way to reverse-engineer a scheme is for a government to inject capital into it and watch how and where the money moves. After that, a government can introduce chokeholds to stop the flow of illicit cash.
There is no doubt this happened in the United States with AdSurfDaily and TelexFree. It very likely also happened with Zeek, given that there are multiple active criminal prosecutions.
Looking at the current situation involving UFunClub/UToken in Malaysia, the PP Blog would not rule out the possibility that what appears to be inaction on the part of the government is not that at all. Viewing the seeming inaction in a favorable light, the PP Blog theorizes that the government may not fully understand the system and may be creating time to determine the extent to which the “program” established ties in the country and with whom.
We know, for example, that U.S. government agents working undercover were in rooms in which TelexFree cheerleading sessions were taking place — even as the scheme operated. Undercover investigators also interacted with AdSurfDaily promoters.
Could the same thing be happening in Malaysia with UFunClub/UToken? Could Malaysian agents be observing events and introducing money into the system to better understand what the government is dealing with?
Copycat scams are infamous in MLM/network marketing. To be sure, international criminals are observing events in both Thailand and Malaysia and will look to introduce ruinous schemes if they detect so much as a crack in national defenses.
The narratives surrounding UFunClub/UToken are shopworn, fantastically bizarre and betray colossal ignorance. Malaysia, a constitutional monarchy, has to understand this. Don’t rule out that it does and that it has infiltrated the “program.”
If it hasn’t or if it is covering up the actions of the political elite, it might as well post a sign that says it welcomes thieves drunk on their own narratives operating within its borders.
Costa Rica was also increasingly known as a place where dirty money could be cleaned. The country’s geography—with drug producers to the south and their customers to the north—was ideal for money launderers. According to Global Financial Integrity, a nonprofit that monitors international money laundering, Costa Rica exported $5.4 billion in laundered money in 2006, equivalent to 24 percent of its GDP. By 2012, that number was up to $21.6 billion—a whopping 48 percent of GDP. Ólger Bogantes Calvo, the deputy director of the country’s anti-narcotics enforcement agency, told me that the government simply never has the funds, manpower, or materiel to fight the criminal elements it faces. “Realistically, [the criminals] will always be a step ahead,” he said.
Such a question might help educate the MLM/network-marketing masses who continue to push one bizarre scheme after another. After all, the highly publicized Liberty Reserve case was brought in the Southern District of New York, the same venue in which SVM appears to be operating with a purported “professional intuitive” at the helm.
SolidTrustPay, an offshore processor that had been friendly to the AdSurfDaily and Zeek Rewards Ponzi schemes, reportedly is in the SVM fold. (In a complaint announced April 14, the SEC said a Ponzi scheme known as CashFlowBot and perhaps better known as DollarMonster was using STP.)
Meanwhile, they might want to question why cross-border schemes such as TelexFree ($1.8 billion) and Zeek Rewards ($897 million) had “advertising” components.
Speaking of “advertising”: The emerging MAPS cross-border scheme has the word in its name — along with promoters’ ties to Zeek and TelexFree. Like Zeek and ASD, MAPS, short for My Advertising Pays, says it takes SolidTrustPay.
Are “sovereign citizens” immersed in the “SVM Global Initiative” and “UFunClub” cross-border, network-marketing schemes?
“Sovereign citizens” may have an irrational belief that laws do not apply to them. It is not unusual for them to be involved in financial fraud, and some “sovereigns” have been linked to MLM HYIP frauds and securities offering frauds.
Individuals who join such schemes may not understand they have signed on to enterprises engaging in international fraud and that a political agenda or even political extremism may be driving events.
In a conference call Tuesday night for SVM, a man who identified himself as “Nelson” calling from “Saskatchewan, Canada” came on the line. He explained that he’d been with SVM “from the very beginning” and was involved in “world-shaking affairs, including the global currency reset.”
Precisely what constituted the purported “reset” wasn’t explained, but the term has been associated with banking conspiracy theorists and “sovereign citizens.” AdSurfDaily Ponzi story figure Kenneth Wayne Leaming, for instance, allegedly claimed “the Rothschilds” were hiding in a “bunker in India” while controlling the central bank of Iraq, according to a 2011 complaint against Leaming that accused him of filing bogus liens against public officials and other crimes.
The complaint was filed by a member of an FBI Terrorism Task Force operating in Washington state. Leaming, who’d been under federal surveillance, later was convicted on charges of filing false liens, harboring two federal fugitives wanted in a separate home-business caper in Arkansas and being a felon in possession of firearms.
Banking conditions in Iraq were causing the Rothschilds to lose money, and the “inner circle” is “jumping ship,” Leaming allegedly told a colleague, “just like body odor’s inner circle in the White House.”
“Body odor” was a veiled reference to President Obama. ASD was a “program” that claimed a daily payout rate of 1 percent. The $119 million scheme spread over the Internet, creating thousands of victims. ASD was broken up by the U.S. Secret Service in 2008.
A Troubling Narrative: Was A Rallying Cry Of ‘Sovereign Citizens’ Part Of It?
On the call hosted by SVM’s Sheila V. Tabarsi, “Nelson” further ventured that he had “many connections in the international banking arena.
“I have many connections in law; I have many connections in military — on and on and on,” he said.
During his fawning over SVM, “Nelson” went on to make a veiled reference to UFunClub, now the subject of a major investigation in Thailand. This leads to questions about whether he is involved in two separate cross-border schemes and whether other SVM members also are pushing multiple schemes.
“Nelson” said this before he got off the line (italics added):
“And God Bless the Republic of the United States of America.”
Here we’ll point you to BehindMLM.com’s April 13 review of SVM. We’ll note that the Tuesday SVM call more or less was an effort to slime the online publication, which reports on emerging MLM schemes.
SVM appears to operate out of Greater New York City, perhaps from the Bronx and Manhattan — with an arm in Costa Rica.
Prior to “Nelson” coming on the line, Tabarsi asserted BehindMLM.com was a “pawn” and a “coward” that works with an unidentified third party to “bring network-marketing companies down.”
“To me, this is real Illuminati kind of stuff,” Tabarsi said. “Granted, the success of Sheila V and Associates and the SVM Global Initiative could do some devastating things to the network-marketing industry.”
Other MLM schemes have trotted out the theme that dark forces — usually cast as competitors unhappy that downlines are leaving one “program” because another has found the Holy Grail — are controlling things behind the scenes or secretly. It is not unusual for political rhetoric, conspiracy theories or antigovernment sentiment to become part of the narrative, and this may be happening with SVM.
Tabarsi, for example, said during Tuesday’s call that the “Bush administration” was involved in an “effort to dismantle this world economy” and that the effort has been “so concentrated” and “so diligent.”
The aim, she contended, was to concentrate 99 percent of the world’s wealth in the hands of 1 percent of the people.
“We are a threat to that,” she said. “The success of Sheila V and Associates and the SVM Global Initiative is a threat to this establishment that is trying so long and so hard to take everybody down.”
Any number of MLM schemes have advanced forms of this narrative. The $1.8 billion TelexFree scheme broken up by the SEC last year was positioned as a “revolution” that would put wealth in the hands of ordinary people. Though much smaller in scale, the Achieve Community scheme broken up by the SEC earlier this year advanced a similar narrative.
TelexFree and Achieve — like the Zeek Rewards scheme in 2012 — were operating combined Ponzi- and pyramid schemes, the SEC has alleged.
SVM, through Tabarsi, has positioned itself a network-marketing enterprise with three arms. Working together, these three arms — Sheila V. and Associates LLC (New York), The Marketplace at SV&A LLC (Costa Rica) and SVM Redesign Your Life America with an organ called “The Freedom Fund” — purportedly will elevate people out of poverty.
On her website, Tabarsi says she is a “4th Generation Native Cherokee/African American Spiritual Life Coach, Universal Life Church Minister, Business and Medical Intuitive with 17 active years of practice performing Clair-empathic healings and various forms of intuitive readings.”
She also notes she is a “corporate administrative manager, former U.S. Air Force Staff Sergeant and Veteran of the ’91 Gulf War” who established “SVM ReDesign Your Life America, a non-profit organization to convert abandoned military bases into places to end poverty and homelessness.”
In a March conference call, she claimed she was under investigation by a U.S. Attorney’s office and the FBI, among others. She denies she has done anything wrong.
“The FBI is involved only because I have international clients, but not that there’s too much they can really act on,” she said during the call last month.
Because SVM says it has a presence in the Bronx and Manhattan, the PP Blog on Wednesday contacted the office of U.S. Attorney Preet Bharara of the Southern District of New York for comment on SVM, UFunClub and “Nelson’s” line about the “Republic of the United States of America” during the Tuesday SVM call.
On April 2, a video depicting President Obama as a fan of the MyAdvertisingPays “program” appeared on YouTube. An “Obama voice” was dubbed into the video, which also shows the Presidential Seal. Text below the video reads, “Mr. President speaks about the new advertising revolution.”
Depicting then-President George W. Bush as a fan of the AdSurfDaily MLM HYIP “program” backfired in spectacular fashion in 2008, drawing the attention of the U.S. Secret Service. Federal agents eventually seized more than $80 million in an asset-forfeiture case. ASD President Andy Bowdoin, accused of operating a cross-border Ponzi scheme, was indicted. He later pleaded guilty to wire fraud.
Bush left the White House in January 2009, after Barack Obama was elected President. By August 2010, according to the FTC, “medical discount” hucksters were trading on Obama’s image.
MPB Today operator Gary Calhoun later was charged with racketeering. Assets were seized. A conviction followed.
In 2013, with Obama now in his second term, he was depicted in a promo as a pitchman for a scheme known as Ultimate Power Profits. That “program” had promoters in common with Zeek Rewards, which the SEC described in 2012 as a combined Ponzi- and pyramid scheme that had gathered hundreds of millions of dollars.
Against this backdrop, a YouTube video that appeared online today positioned Obama as a pitchman for MyAdvertisingPays, a Ponzi-board scheme like ASD, MPB Today, Ultimate Power Profits, Zeek and many others.
News about the 0:33 MAPS’ video titled “My Advertising Pays, Obama” first appeared on the RealScam.com antiscam forum.
IntellaShares, a collapsed “program” with a presence on the Ponzi boards and purportedly prepping for “relaunch,” now is under scrutiny by Save the Children.
Jeremy Soulliere, a spokesman for Save the Children USA, confirmed the inquiry to the PP Blog this morning. Save the Children USA is an arm of Save the Children Federation Inc., the internationally prominent charity.
“We are going to look into this matter further,” Soulliere wrote.
The PP Blog reported yesterday that IntellaShares was publishing a graphic of a check on its website that implied a donation of $478 had been made or will be made to “Save The Children Foundation.” The memo line of the check reads, “Charity Spotlight – Feb/2015.”
Text accompanying the check reads, “The Following Amount Will Be Donated For the Period Feb. 17-28/2015. Thank You To All Members For Making This Possible!”
Another page on the IntellaShares website claims that the “program” donates “20% of Total Collected Membership Fees to THE FEATURED CHARITY.”
This potentially means that Save the Children will not be the sole nonprofit whose name gets dangled by IntellaShares. The site suggests that the Global Music Project was the featured charity last month.
Precisely who controls the purported blacklist wasn’t specified by IntellaShares. The language, however, was menacing.
“So be careful what you do now it could result in loss of ability to become a member of any program in short order,” IntellaShares advised members, according to BehindMLM.
A post on the MoneyMakerGroup Ponzi forum today includes content attributed to IntellaShares. It declares “[t]oday is a beautiful day in the internet world” because “INTELLASHARES WILL BE OPEN FOR NEW SIGN UPS AND FUNDING TODAY!”
This hashtag was attributed to IntellaShares: “#TOOBADABOUT30PEOPLEWEREBLACKLISTED.”
At least one Ponzi-board poster was not amused.
“They think that threatening people can suppress peoples opinion, that doesn’t sound like people that are for the people,” the poster ventured. “Sounds like facism to me. What a joke.”
Scams trading on the Ponzi boards and on social-media sites such as Twitter, Facebook and YouTube are infamous for trying to enforce rigid thinking and mute criticism — sometimes by threat. At the same time, it is not unusual for such schemes to use the names of a famous charity or famous for-profit business as part of a bid to create a veneer of legitimacy.
IntellaShares, which plants the seed “program” participants will receive $3.25 for every $2.50 they send in, appears to have collapsed shortly after launch earlier this year.
Thuggery is not unusual in the HYIP sphere of MLM or network marketing.
In early 2014, a “program” known as Banners Brokers threatened to lock the accounts of members “found to be contributing to the negativity on the Internet.” Participants further were threatened with a forfeiture of earnings and encouraged to report doubters to management.
Banners Broker tried to sugarcoat its thuggery by calling it an effort to implement a “Community Watch” program.
By October 2014, documents filed by the the Royal Canadian Mounted Police in July 2014 surfaced. These documents described Banners Broker as a “pyramid scheme that over time evolved into a straight Ponzi scheme in which new victims were recruited to stave off requests for withdrawals and complaints from older ones.”
Investigative documents in Canada describe Banners Broker as a “criminal enterprise.” The U.S. Secret Service used the same phrase when describing the AdSurfDaily Ponzi scheme.
Like Banners Broker and ASD, IntellaShares purports to be an “advertising” program.
IntellaShares may be trying to skirt securities laws by claiming on its website that “REVENUE SHARING IS NOT GUARANTEED.”
ASD, which once purported to have gifted 100,000 “ad packs” to a charitable venture, made a similar claim in 2008 . So did the Zeek Rewards scheme in 2012.
Both ASD and Zeek collapsed after interventions by law enforcement.
The SEC yesterday declined to comment on IntellaShares.
Unlike the boffo web-based schemes of TelexFree, Zeek Rewards and AdSurfDaily, the “Achieve Community” scam in which participants were told they’d glean returns of 700 percent did not perform well (relatively speaking) at the MLM Pyramid/Ponzi Scheme Box Office.
