William Walters: Extradited from Argentina to face Ponzi charges in Colorado.
BULLETIN: (UPDATED 9:32 P.M. EDT (U.S.A.) William L. Walters has been extradited to the United States from Argentina to face Ponzi scheme charges in Colorado, prosecutors announced.
“This extradition is the culmination of years of work and cooperation between my office and the FBI,†said Colorado Attorney General John Suthers. “In this case, justice delayed will not result in justice being denied. We look forward to presenting our case against Mr. Walters and securing justice for his victims.â€
Walters, 45, fled the United States prior to being indicted in 2007. Interpol “flagged” his passport, and the FBI traced him to Argentina, prosecutors said.
The Walters’ case exposes a common myth on HYIP and autosurf Ponzi boards that “offshore” locations insulate Ponzi schemes from prosecution and that the schemers themselves can avoid arrest by operating outside the United States or fleeing from the United States to a foreign country after a scheme is exposed.
“Pursuant to the FBI’s Project Welcome Home, the Denver Division was able to work closely with the Colorado Attorney General’s Office to insure that William Walters was returned to Colorado for prosecution,†said James H. Davis, FBI special agent in charge. “This is yet another example of law enforcement cooperation in Colorado and our commitment to pursue fugitives from justice, even if they attempt to flee outside of the United States.â€
Walters is accused of operating a “day-trading” Ponzi scheme that gathered more than $23 million from investors in Colorado, California, Florida, Hawaii, Illinois, Massachusetts, Pennsylvania, Texas and Wyoming.
He operated companies known as Samurai Capital and Mana Trading Inc. A court in Argentina approved the extradition to the United States.
Horohorin allegedly operated an overseas fraud scheme targeted at U.S. residents.
Court records show that the Secret Service infiltrated the AdSurfDaily autosurf by employing undercover agents. Records also show that the agency employed undercover operatives in the investigation of the INetGlobal autosurf.
In the INetGlobal case, records show that undercover agents attended an INetGlobal function in New York earlier this year. The Secret Service said one of its agents was introduced to INetGlobal by an ASD member.
In the ASD case, the Secret Service said it believed that ASD President Andy Bowdoin was planning to flee the United States prior to the seizure of tens of millions of dollars in August 2008 — amid Ponzi allegations.
UPDATED 7:11 P.M. EDT (U.S.A.) When U.S. District Judge James Rosenbaum sentenced Ponzi schemer Trevor Cook to a quarter of a century in federal prison earlier this week, the judge used some powerful words to describe Cook’s colossal fraud.
Rosenbaum described the scheme that bilked investors out of at least $158 million as “wretched, tawdry and cheap.” Some of the victims were rendered destitute.
It’s easy to see why a federal judge would use such words. Not only did Cook steal by the tens of millions of dollars, he stole even after the SEC and the CFTC went to court last November to bring the scheme to a halt. Cook spent money that had been frozen by court order, thus thumbing his nose at both victims and the judicial system. He later failed to disclose the whereabouts of assets — this until he failed a lie-detector test.
All of those acts — and the $190 million scheme itself — easily qualify as “wretched, tawdry and cheap.” One could argue rationally that even stronger adjectives could be applied to Cook’s behavior and still fall within the bounds of decorum.
And this brings us to the subject of AdSurfDaily — specifically, what at least one member appears to be doing to recruit former ASD members and people interested in ASD into yet-another scheme.
That’s been done before, of course. AdViewGlobal, itself a scheme that could be described fairly as “wretched, tawdry and cheap,” rose from ASD’s ashes to bilk anew.
Along those lines, who could forget MegaLido? It was yet another autosurf that became popular in the aftermath of the domestic seizure of tens of millions of dollars in the ASD Ponzi case. One former ASD member described MegaLido as “fool proof.”
It’s “OFFSHORE!!!” he exclaimed.
Some ASD members also saddled up and starting promoting the Noobing autosurf, which targeted people with hearing impairments. There were plenty of HYIPs, too. These included Genius Funds, believed to have gathered up more than $400 million; Gold Nugget Invest, which promoted itself as a betting arbitrage and later implied in was in Forex; and CashTanker, which used an image of Jesus in its sales pitch.
Look here to see a list of some of the “programs” promoted by ASD members. (Most of the programs, by the way, were promoted after the ASD seizure.)
How To Irritate A Sleeping Dog
At 9:05 p.m. yesterday, Maddy the Wonder Puppy — always and forever a wonder puppy in my mind, even though she’s two now — was going through her endearing presleep maneuvers under my desk. This is one of those things that make me feel good about the world.
As Maddy was going through her positioning dance and stretching and yawning routine, an email popped into my box. It proved to be one of those things that make me feel bad about the world.
“input on opportunity” — all lowercase — was the subject line of the email. So, I knew right away that I was about to get a sales pitch — and I suspected before opening it that was going to a disingenuous pitch at that.
“I used to belong to ASD,” the email began. “Need your input on UniqueBuyingClub.”
OK. Here’s what’s important so far: The pitch was completely unsolicited and came through the Blog’s support address; it used ASD’s name (sixth word) to catch my attention; the subject line suggested I was being asked for “input,” as though the sender saw something fishy on the Internet and wanted to get my take on it; and the pitch proved to be for MPB Today, not an entity called “UniqueBuyingClub.”
Let’s proceed. It gets worse.
The first affiliate link appeared 12 words into the pitch, meaning I wasn’t really being solicited for input — unless it was input after the fact — because the sender already had registered for MPB Today. (Note: I checked the email address of the sender against the affiliate email addresses on the MPBToday page. They matched, meaning it is highly likely that the sender was an affiliate who was spamming me.)
There was no way to unsubscribe from the “list” I now found myself on. (BTW, I’m wondering if the sender knows if Warren Buffet and Donald Trump really have endorsed MPB Today, a business that bizarrely mixes the home delivery of groceries with a 2×2 cycler. Their pictures are right at the top of the sales page, which implies an endorsement. Perhaps MPB Today missed the news about the FTC action last week in a case that alleges an Internet Marketing company that hawks Acai berry products tried to make people believe Oprah and Rachel Ray were on board.)
But it got worse from there. Not only was the “UniqueBuyingClub” angle confusing, the link asked me to visit a site called WeCreateRiches. Then, a second link asked me to visit the MPB Today site. We are only 14 words into the pitch at this point.
Let’s take another brief pause. The import of what’s happening here is that a former ASD member who perhaps got bilked in a $100 million MLM and securities scheme that promised riches now is urging me to visit a website called WeCreateRiches to sign up for a company that uses a home-delivered groceries business to promote an MLM scheme that uses a 2×2 matrix cycler. The U.S. Secret Service, which is investigating ASD, also has experience investigating cyclers.
Prior to receiving the email, I knew about MPB Today, which Rod Cook had written about. I just haven’t gotten around to writing about it yet, mostly because there is only so much time in the day. In some ways, I almost hate to write about it because writing about it potentially means that the MLM Stepfords will come of the woodwork to “defend” the company. It also potentially means the Blog will start getting spam from people angry that I dared mention the MPB Today name on a blog about scams. (Spam, in this context, means people who “defend” the company not by leaving a comment that actually defends the company, but by submitting their affiliate link on the theory that they might be able to cherry-pick a new downline member from the Blog’s readership ranks.)
In any event, the email went on to inform me that “Walmart is loving the results!!” generated by MPB Today.
Oh, really? I do hope the sender leaves a comment in this thread to substantiate the Walmart claim. It will spare me some work.
The email also wished me “Blessings and hope through your connections,” while urging me to “Please get back to me and let us help many ASD members who lost money and hope.”
Well, email sender, consider this post “getting back” to you.
It is my view that your email — and I haven’t gotten into the most revolting part yet — is “wretched, tawdry and cheap.” Like Judge Rosenbaum, I feel that way about Trevor Cook’s actions — as I do the actions of ASD’s Andy Bowdoin, who also traded on religion.
Take your “blessings” and “hope” elsewhere. I think the idea of using religion and identifying yourself as an ASD member to pitch other ASD members on MPB Today is “wretched, tawdry and cheap.”
Meanwhile, I think that sending a reporter who covers fraud schemes an email titled “input on opportunity” also is “wretched, tawdry and cheap.”
It makes me believe you’d sell anything for a commission and say anything to gain a commission. My thoughts on this subject were further reinforced this morning when I learned you sent a largely identical email to another forum.
“Blessings,” the email to the other forum concluded.
It made me want to retch. Is this what you believe Internet Marketing to be?
OK. Here’s the part of the pitch that irked me most (emphasis added):
“Just go online and order. BUT if you introduce club to just TWO and help those two introduce to two that completes ONE cycle for you. YOU – plus those six, Only qualification to be part of this is to introduce to TWO , but you may choose to get crazy and promote to many to inc. cycling. When you finish cycle one – go to backoffice and order grocery.goods BUT now company pays all shipping OR replace that voucher for a $200 WalmartGiftCard to go into the store and PLUS company sends you a $300 check to spend whereever. You NEVER add another dime. You may cycle as often as you please. People here in Orlando are cycling two to seven times in a week. There is so much excitment because people are hurting and now they can go get FREE groceries/goods and FREE gas at SamClub.”
Yep. Florida. Again.
Florida was ASD’s home. Florida means retirees — and ASD members again are being targeted in pitches to send money to MPB Today, whose headquarters also happens to be in Florida.
“Blessings,” the emailer wrote — in pitches to both places — while also claiming her “girlfriend did [a] background check” and that “all is good” in the land of 2×2 cyclers targeted at victims of previous fraud schemes and prospects from a state favored by retirees who saved to get there.
Florida has one of the highest foreclosure rates in the United States. Just three seconds — three seconds — into the video pitch for MPB Today, the word “Foreclosure” appears on the screen. It appears again at the 11-second mark.
In MPB Today’s world, the apparent remedy for the foreclosure problem is to get Florida seniors and other struggling residents to join a 2×2 cycler.
BULLETIN: Ponzi schemer Trevor Cook has been sentenced to 25 years in federal prison for his role in an international Forex Ponzi scheme that gathered more than $190 million and fleeced victims out of more than $158 million.
In ordering the prison term, U.S. District Judge James Rosenbaum sided with the prosecution’s recommendation of a quarter of a century. It is believed to be the longest prison term ever imposed in a Minnesota financial-fraud case in which the defendant pleaded guilty.
“Such a sentence fairly, adequately, and justly punishes the defendant for his offense, reflecting the seriousness of the offense, his willingness to plead guilty and provide information to law enforcement, and the need to protect the public,” prosecutors said last week in a sentencing recommendation to Rosenbaum.
“Over the course of a few years, the defendant executed an investment fraud, victimizing approximately 923 victims and defrauding them of over $158 million,” prosecutors said. “As is all too common, the defendant often used victims’ religious beliefs as a means of enticing them to give him their money.”
Cook, 38, is not out of legal harm’s way — even with the sentence of 25 years. Prosecutors disclosed last week that he has signed a waiver that would subject him to further punishment if the ongoing investigation shows he has “somehow secreted undisclosed assets.”
Victims have expressed concerns that Cook could have stashed money from the scheme anywhere on earth. Cook failed a lie-detector last month about the whereabouts of assets.
FBI and IRS agents later found more than $400,000 in undisclosed assets under the control of Graham Cook, Trevor Cook’s brother.
Despite Cook’s lack of disclosure, prosecutors contended that it made no sense to delay Cook’s sentencing any longer as the asset search by the government and R.J. Zayed, the court-appointed receiver in a civil case filed against Cook and former Christian radio host Pat Kiley last year by the SEC and the CFTC, continued.
Cook had been scheduled to be sentenced last month. Kiley, who called his radio listeners “truth seekers,” has not been charged criminally in the case.
“The government has worked closely with the court-appointed receiver to assist its efforts in finding and identifying assets,” prosecutors said of Cook. “The government and the receiver now agree that any additional time prior to sentencing will not result in any additional information or assistance to the receiver’s efforts.”
It is possible that Cook could prove to be a valuable source of information for the government — in the same sense that disbarred attorney, convicted racketeer and Ponzi schemer Scott Rothstein has become an information source.
Rothstein, who presided over a $1.2 billion Ponzi scheme in Florida, was sentenced to 50 years in federal prison earlier this year. It is known that Rothstein has provided information helpful to the government.
Cook “has been repeatedly debriefed by law enforcement in an effort to identify assets and to provide information regarding other individuals,” prosecutors said. “He has done so. The information has been of assistance to law enforcement in its ongoing investigation.”
Ponzi schemes are toxic — and frequently are incredibly elaborate. Court documents in case after case show that the schemes frequently feature schemes within schemes and elaborate money-laundering networks. Criminals often go to fantastic lengths to disguise the conduits of the schemes, using shell companies and multiple bank accounts to funnel money and make the schemes difficult to reverse-engineer.
FBI Director Robert Mueller has warned Congress at least twice this year about a “shadow” banking system criminals employ and an increasing reliance on “shell corporations†to commit crimes and hide from investigators.
Cook’s scheme featured companies with confusingly similar names.
Records show that Cook had a tie to a company the AdViewGlobal (AVG) autosurf claimed to be its facilitator of offshore wires.
KINGZ Capital Management, AVG’s purported facilitator, denied any affiliation with AVG, which has close ties to the AdSurfDaily autosurf. ASD is implicated in a Ponzi scheme alleged to involve tens of millions of dollars.
AVG collapsed in June 2009, after running a virtually nonstop promotion that advertised matching bonuses of 200 percent for both recruits and their sponsors.
The National Futures Association said last year that Cook was managing money for KINGZ. AVG made the claim KINGZ was its wire facilitator on May 4, 2008 — the same day the Obama administration announced a crackdown on offshore fraud.
Growing up a child of Andy Bowdoin and advancing through adolescence and adulthood was hard because of Bowdoin’s habitual scheming, according to Scott Bowdoin, Andy Bowdoin’s son.
“He uses religion — always,” Scott Bowdoin, 42, said flatly of his 75-year-old father, noting he had not spoken to Andy Bowdoin in about 15 years because the elder Bowdoin had ripped off his own mother, Scott’s late grandmother, in a credit-card scheme.
The elder Bowdoin left his own mother “with nothing,” Scott Bowdoin asserted. “The electricity was about to get cut off, the water was about to get cut off. He is a man with no conscience.”
Scott Bowdoin made the remarks about his father in an interview with the PP Blog this morning. The younger Bowdoin said his father had disgraced the family name — and that it was high time the public in general and AdSurfDaily members in particular knew that Andy Bowdoin did not enjoy the uniform support of his family as the ASD Ponzi case winds its way through the courts.
There was a long-ago scheme involving telephone calling cards, Scott Bowdoin said.
And there was an “air-conditioning scam” in Florida, he added, saying his father traded on faith.
“He’d go around and evangelize,” Scott Bowdoin said. “That was a scam. He did something with cell-phone towers. That was a scam.”
Andy Bowdoin has been married five times, Scott Bowdoin said, adding that Andy Bowdoin’s financial scheming devastated Scott’s grandmother late in her life.
“He drained my grandmother,” Scott said.
Separately, an Andy Bowdoin family member who spoke to the PP Blog on the condition of anonymity said Bowdoin “has been doing this since the 1960s.
“I always knew he was a con man,” the family member said. “I just didn’t know he could do it at this level.”
The “level,” according to federal prosecutors and the U.S. Secret Service, exceeds $80 million and may approach $100 million when a final accounting is done. Records show that agents seized more than $65.8 million from 10 Andy Bowdoin bank accounts, including one that contained more than $31 million and another that contained more than $23 million.
In total, about $80 million was officially listed as forfeited in the case. Andy Bowdoin has appealed the forfeitures, which were ordered by U.S. District Judge Rosemary Collyer. An attempt last year by Bowdoin to force Collyer to withdraw as the presiding judge failed.
Prosecutors claimed in court filings that ASD was a massive international Ponzi scheme masked as an “advertising” business.
“I was a little surprised because I didn’t know he could pull off a scam that big,” Scott Bowdoin said. “But, by God, he did it.”
After the elder Bowdoin scammed his own mother in the 1990s, Scott Bowdoin said, “I told him you are dead to me.” Andy Bowdoin later was implicated in a securities swindle in Alabama. Records show he was making restitution to the Alabama victims even as he was operating ASD in 2008.
“I pity you when you have to face the Lord when you die,” Scott Bowdoin said he told his father after he had fleeced Scott’s grandmother.
In July 2008, years after the Alabama swindle and while ASD was gathering tens of millions of dollars per month, ASD money was used to purchase a Lincoln automobile for nearly $50,000, according to court records. At the time, Bowdoin still owed the Alabama victims about $45,000.
Even more ASD money — more than $1 million — went to acquire real estate, a Honda automobile, an Acura automobile, jet skis, a Cabana boat, marine equipment and haul trailers, according to records. A shell company linked to Andy Bowdoin’s company began to make the purchases in June 2008, less than two weeks after an ASD “rally” in Las Vegas.
While in Las Vegas, Andy Bowdoin urged members to imagine themselves getting large checks from ASD and thanked God for making him a “money magnet,” according to records.
Scott Bowdoin described his father as a “classic con artist.”
“He is a very, very, very smart man,” Scott Bowdoin said. “He knows exactly what he is doing. He uses religion — always.”
And Scott Bowdoin lamented his father’s appeals in the forfeiture case against his assets.
“I don’t understand why this man is not sitting in prison,” Scott Bowdoin said. “He pulled off the ultimate [con] this time.”
Scott said his father left when he was 14 and that father and son had been estranged for years.
Asked what he would do if his father suddenly materialized in the same room with him, Scott said that Andy Bowdoin “won’t come around me.
“I’d probably punch him in the face,” Scott said.
Asked if he had any advice for ASD members, Scott said, “Don’t believe a word he says. He’s a great actor. He is a good bullshitter. He could sell a screen door to a submarine captain.”
Calling his dad a “charmer,” Scott said he was aware that some ASD members continued to cling to hope that his father came as the “Christian” depicted in sales pitches and motivational talks. After the company was raided in August 2008, Bowdoin asked his followers to trust in God, saying the government action against his autosurfing company was the work of “Satan.”
“These people who feel sorry for him thinking he is a good Christian — they have blinders on,” Scott Bowdoin said. “He has hurt more people than just [members of] AdSurfDaily. I can guarantee it.”
Andy Bowdoin wasted his talents chasing schemes, Scott Bowdoin maintained.
“If he had gone the right way, he could have been a Donald Trump,” Scott contended. “[But] he wanted to start at the top, not at the bottom.”
Meanwhile, the other Bowdoin family member interviewed by the PP Blog said that he believed Andy was “a sociopath.”
“I know that whatever he puts his efforts in to is [designed to] con people out of as much money as he can,” the other family member said. “Andy is a sociopath. There aren’t many sociopaths, but he is one.”
Both family members said they were not participants in ASD and learned about the alleged scheme on the Internet.
The family member who spoke on the condition of anonymity explained he had done so in an effort to maintain as much privacy as he could as a sea of allegations swirled around Andy Bowdoin.
“The man is a genius,” he said of Andy Bowdoin, “but he has a criminal mind. Anyone involved with his companies — they’d be sucked into a Ponzi. To me, he is a sociopath; he will drag other people down. People need to be [careful]. A good con has a little bit of truth to it.”
Andy Bowdoin, said the family member, has lived a “sad” life.
“It’s sad because he could have used his talent for good,” the family member said. “I don’t hate the man, but I pity him.”
When he thinks about Andy Bowdoin, the family member said, he thinks about Bowdoin’s father.
“Andy Bowdoin’s father was a good man,” the family member said.
EDITOR’S NOTE: The arrest of Vladislav Horohorin is notable on a number of levels. First, the arrest in Europe was a result of an online fraud scheme that allegedly crossed international borders and made its way to the United States, where criminal charges were filed. At the same time, the crime allegedly involved the transfer of money though international payment processors. Perhaps more than anything, however, the case against Horohorin demonstrates that the U.S. Secret Service is “plugged into” forums that promote international lawlessness. His arrest is very bad news for credit-card crooks and HYIP and autosurf Ponzi schemers — and their corrupt colleagues.
Here, now, the story on the arrest of Horohorin . . .
A credit-card trafficker based in Russia has been arrested in France on U.S. charges after the U.S. Secret Service infiltrated an online scheme operating internationally through Internet forums, the Justice Department said.
Undercover Secret Service agents “negotiated the sale of numerous stolen credit card dumps,” the Justice Department said.
Vladislav Anatolievich Horohorin, 27, was arrested in Nice. He was indicted under seal in November 2009 on U.S. charges of access device fraud and aggravated identity theft. The seal was lifted today.
Authorities said they believed he was “one of the most prolific sellers of stolen data” in the world, noting Horohorin was known in web forums as “BadB.” He lived in Moscow, and was a citizen of both Israel and the Ukraine.
The Justice Department revealed today that the U.S. Secret Service used an “online undercover identity” to interact with operators of the international scheme, which featured the sale of stolen credit-card information known as “dumps.”
Payments were transferred through online currency services, including a service known as “Webmoney” that was hosted in Russia, the Justice Department said.
“Cyber criminals who target U.S citizens should not fool themselves into believing they can elude justice simply because they commit crimes outside of our borders,” said Assistant Attorney General Lanny Breuer. “As this and so many other cases demonstrate, working hand in hand with our partners around the globe, we will do everything in our power to bring these criminals to the United States to answer for their alleged crimes.”
Horohorin was arrested Aug. 7 as he attempted to board a flight to Moscow. He will be extradited to the United States, the Justice Department said.
A top Secret Service official said the agency would be relentless in its pursuit of cyber-criminals.
“This arrest is an illustration of the success that comes from international law enforcement and private sector partnerships and confirms the Secret Service commitment to traversing the globe in pursuit of online criminals,” said Michael Merritt, assistant director for investigations.
In August 2008, Merritt was among the officials who announced the seizure of tens of millions of dollars in the alleged AdSurfDaily Ponzi scheme.
Assisting the Secret Service in the Horohorin probe were the French Police Nationale Aux Frontiers, the Netherlands Police Agency National Crime Squad High Tech Crime Unit, and the FBI’s Atlanta Field Office.
Horohorin was one of the founders of a network known as CarderPlanet, a forum through which criminals sold stolen financial data to other criminals.
Using his “BadB” forum identity, Horohorin “advertised the availability of stolen credit card information through these web forums, and directed purchasers to create accounts at “dumps.name,” a fully-automated dumps vending website operated by Horohorin and hosted outside the United States,” the Justice Department said.
“The website was designed to assist in the exchange of funds for the stolen credit card information,” the Justice Department said.
The FTC said today that images of President Obama were used to help a bogus "medical discount plan" trick customers into believing they were purchasing health insurance.
EDITOR’S NOTE: Some readers will recall that one of the Secret Service’s allegations in the AdSurfDaily Ponzi case is that pitchmen tried to sanitize the scheme by making false claims that ASD President Andy Bowdoin had received an award for business acumen from President George W. Bush and Vice President Dick Cheney.
Others will recall that Mantria Corp. — implicated in a Ponzi scheme by the SEC — used images of former President Clinton and other world figures to sanitize a “green” energy scheme.
Now comes word that the FTC has brought a fraud case against a company amid allegations it used images of President Obama, the White House, the U.S. Capitol and lawmakers to sanitize a bogus “medical discount plan” marketed as health insurance.
Here, now, the story . . .
A company that used images of President Obama and the White House — along with logos that resembled the logos of government agencies — has been charged by the Federal Trade Commission with marketing a bogus “medical discount plan” as healthcare insurance.
At least two other firms and their operators and associates have been charged separately with running discount scams, and a nationwide crackdown involving at least 24 states is under way. The FTC has dubbed the sweep “Operation Health Care Hustle.”
“With so many Americans struggling to deal with the costs of health care, these medical discount benefit plans sound appealing because they masquerade as health insurance,†said David Vladeck, director of the FTC’s Bureau of Consumer Protection. “But they are not insurance. They don’t offer the benefits of health insurance, and victims don’t know they’ve been ripped off until after they’ve tried to use the service and paid their bill.â€
The fraud case against Health Care One LLC and associated firms illustrates the dangers not only of promoting scams, but also of of trying to recruit customers into them by implying a product or service is endorsed by the President, members of Congress or the government in general.
Indeed, Health Care One’s website already has been seized by a court-appointed receiver — and content that once appeared on the site and affiliated sites has vanished. In a remarkable news presentation today, the FTC released a video pitch used by the company.
Healthcare One LLC used images of the White House while scamming customers, the FTC said.
The pitch features video of Obama addressing Congress about healthcare issues on Sept. 9, 2009. Heathcare One makes Obama the star of the video, showcasing remarks in which the President stated, “No one should go broke because they get sick.†Vice President Joe Biden and House Speaker Nancy Pelosi are in the background of the video.
The video then cuts away to a passage in which Obama said, “That is heartbreaking. It is wrong, and no one should be treated that way in the United States of America.”
The video then quickly cuts away again to an image of the U.S. Capitol. Official-looking logos appear on the screen, along with the words “REGISTRATION NOW OPEN[:] NATIONAL HEALTHCARE DISCOUNT PROGRAM[:] FOR ALL UNINSURED AMERICANS.”
A narrator simultaneously declares that “registration is now open for a national healthcare discount program.” The narrator — as an image of the White House replaces an image of the Capitol — goes on to say that “Citizens4Healthcare is now authorized to offer you savings of 20 to 60 percent on doctors, hospitals, prescription drugs and more.”
As the video proceeds, the narrator declares that “there are daily registration limits for this program, so call now for immediate acceptance . . .”
Healthcare One was specifically charged with claiming it sold health insurance when it did not — and of misleading the public into thinking it was affiliated with the federal government.
“Defendants’ advertisements lead consumers to reasonably believe that Health Care One’s program is affiliated with, or endorsed or sponsored by, the federal government,” the FTC said.
“It is not,” the agency said flatly in court filings, accusing the company of selling a scam.
Read more about “Operation Health Care Hustle.” (Look in the upper-right corner of the screen when you land on the FTC page. You”ll find links to other cases announced today — and also a link to the video cited above.)
The website of AdViewGlobal (AVG), an autosurf with close ties to the alleged AdSurfDaily Ponzi scheme, has gone offline.
Why AVG’s site was offline was not immediately clear. One person told the PP Blog that the site had been “down for days.” AVG’s domain, which lists a registration address in Uruguay and appears to use a dedicated server that resolves to Panama, would not return a ping this morning.
Aug. 1 was the two-year anniversary of the seizure by the U.S. Secret Service of tens of millions of dollars in the ASD case. AVG, fueled by the participation of ASD members, launched in the aftermath of the ASD seizure and the filing of a racketeering lawsuit against ASD President Andy Bowdoin.
Promotions for AVG began to appear online less than a month after ASD lost a key court battle in November 2008. In January 2009, AVG graphics were seen on an ASD-controlled website, but AVG denied any ties to ASD. By February 2009, AVG was up an running, and some of the moderators of the Pro-ASD Surf’s Up forum started a forum to promote AVG.
AVG, whose site remained online after the company suspended payouts in June 2009 and announced it was conducting an audit of itself, perhaps is one of the oddest autosurfs of all time.
Although AVG denied any ASD ties, the person issuing the denial on behalf of AVG was a former ASD employee. Even while issuing the denial, the former ASD employee confirmed that Gary Talbert, a former ASD executive, was the chief executive officer of AVG.
AVG later went on to form a purported “private association” purportedly based in Uruguay. The surf bizarrely claimed U.S. Constitutional protections despite the competing claim it operated on foreign soil.
By June 25, 2009, AVG had collapsed — after running a virtually never-ending series of promotions that offered 200 percent bonuses to both existing members and the prospects they recruited. One promoter claimed that $5,000 placed with AVG turned into $15,000 “instantly!”
The surf later said it was the victim of a $2.7 million theft.
AVG went offline for a brief period in September 2009 after its domain-name registration expired. Records show that the domain name is valid until Sept. 22, 2010 — more than a month from today’s date.
Read this story for the names of other autosurfs/HYIPs promoted by ASD members.
Read this story on AVG threats directed at members and the media after its collapse.
Read this story on a method an AVG member said would help other members qualify for bonuses. (Make sure you read the comments from readers below the story.)
Is it the maximum case of Kaboom! — coupled with the maximum case of denial?
The government of South Africa hit Maritjie Prinsloo with a whopping 122,000 counts of fraud, racketeering and money-laundering in a pyramid-scheme case that involved an estimated $205 million. (R1.5 billion.)
Prinsloo was found guilty last month. South African media now are reporting that she is blaming the government and an accounting firm for interfering in her business affairs while at once insisting she could have turned things around.
It was not immediately clear if the filing of 122,000 counts established a record. Prinsloo has been referred to in local reports as the “Pyramid Scheme Queen” and the “Krion swindler.” Members of her family also have been implicated in the scheme.
It is not unusual for Ponzi and pyramid schemers to blame the government for their legal predicaments and to claim the government made matters worse by taking action to stop a scheme before it could consume even greater sums of money. Online Ponzi forums, for example, are filled with claims that operators can turn things around if given more time, and victims routinely are discouraged, ridiculed and threatened with banishment by operators and their shills for contacting authorities and filing complaints.
A psychologist told the the Pretoria High Court that Prinsloo believes she did nothing wrong and could have turned around the business had the government not filed charges, according to this account in the Daily Dispatch.
Prinsloo was charged with more counts than there are seconds in a day (122,000 counts/86,400 seconds in a day). Had she been charged in the United States — and had she not waived the reading of the complaint — the court official tasked with the duty of ticking off the counts would have left voiceless.
Had the judge ordered one count read per second — and had the employee magically been able to comply with the order — the employee would have consumed 24 straight hours in reading the counts and still been left 35,600 counts short of finishing the job. The job then would have carried over to consume almost 10 straight hours of a second day, at one count per second.
During the first 24 hours of the reading of the complaint at the impossible rate of one count per second, the world’s population would have increased by about 220,000, according to estimates.
In the often bizarre and incongruous world of Ponzi and pyramid schemes, the fact that the world’s birth rate exceeds its death rate has been seized upon by some advocates as purported “proof” that it is impossible to operate such schemes and the government therefore cannot “prove” that a Ponzi or pyramid scheme exists.
Such claims were made by at least one member of AdSurfDaily, which the U.S. Secret Service described as a Ponzi scheme. Some members of ASD defended the firm by claiming that no Ponzi existed and that the government was interfering with commerce.
ASD President Andy Bowdoin, meanwhile, told members that the government had seized their money. In court filings, however, he told the presiding federal judge that the money belonged to him.
BULLETIN: Yet-another bizarre paperwork attack on U.S. law enforcement has occurred.
A California man has been charged with filing “false liens” in Nevada against federal officials and employees of the SEC, the Secret Service, the IRS, four federal judges and staff members of the U.S. Attorney’s Office for the Southern District of California, federal prosecutors said.
Thanh Viet Jeremy Cao was indicted by a federal grand jury in Las Vegas on charges of filing 22 false liens ranging from $25 million to $300 million against the officials, prosecutors said.
He also sought $20 billion in fraudulent tax refunds, prosecutors charged.
Cao resides in Orange County, Calif. If convicted on all counts, he faces up to 223 years in prison and a fine of up to $5.75 million.
“Cao corruptly obstructed the administration of the federal tax laws, by, among other things, filing retaliatory false liens against IRS employees, filing and attempting to file with the IRS false Forms 1099-OID (Original Issue Discount) that claimed fictitious income tax withholdings, filing and attempting to file false tax returns that claim fraudulent refunds totaling approximately $20 billion, and preparing at least five false tax returns for third parties that claimed fraudulent income tax refunds totaling in excess of $1.1 million based upon fictitious income tax withholdings,” prosecutors said.
In June, Ronald James Davenport of Deer Park, Wash., was charged with filing false liens against federal officials in Washington state.
Davenport sought the spectacular sum of nearly $5.2 billion from each of the officials, including U.S. Attorney James McDevitt of the Eastern District of Washington, an assistant U.S. attorney, a court clerk and an IRS agent, according to court records.
Prosecutors described Davenport as a “tax defier.†Davenport has described himself in court filings as a “sovereign.â€
Some members of the alleged AdSurfDaily autosurf Ponzi scheme and other HYIP schemes have been linked to tax-deniers and the so-called “sovereign” movement.
See earlier story that references the Davenport action. (The story also provides some background on court filings and other actions by ASD members.)
In a civil case that preceded the criminal indictment against Davenport, Senior U.S. District Judge Justin L. Quackenbush ruled in May that the liens “were filed to retaliate against the officers for their good-faith efforts to enforce the tax laws against Mr. Davenport.â€
Quackenbush struck the liens, which were filed in the form of UCC Financing Statements with the Washington State Department of Licensing, according to records. The liens not only were fraudulent, but also contained “sensitive personal information†that violated privacy laws, the judge ruled.
Davenport also filed instruments dubbed “Notice[s] of Claim of Maritime Lien†with the Spokane County Auditor’s Office, according to records. Those, too, were struck.
The act of filing false liens or sending “demand” letters to officials or litigation opponents in a bid to hamstring civil and criminal prosecutions has been referred to as “paper terrorism” and “mailbox arbitration.”
EDITOR’S NOTE: The PP Blog has covered a number of stories in which U.S. residents living overseas were extradited to the United States to face Ponzi charges. The case against Ronald Paul Shade is another one — and it’s one that demonstrates that an extradition can occur even if a defendant is not charged with a federal offense.
Indeed, the warrant for Shade’s arrest was issued by a state-level Superior Court judge in California, according to Interpol. Shade’s case is instructive because it defeats some of the myths propagated on Ponzi boards such as MoneyMakerGroup, ASAMonitor, TalkGold and MyCashForums. Among the myths is that “offshore” equals “safe” for both investors and Ponzi perpetrators.
Don’t tell that to Shade, now jailed in California after being extradited from Bangkok by local — as opposed to federal — prosecutors in California. His bail was set at $3.9 million.
And don’t tell it to Jeffrey Lane Mowen, extradited from Panama to face federal Ponzi charges in Utah and later indicted in an alleged murder-for-hire plot. Here’s a quick side note on the Mowen case: If you like the recruitment fees paid by HYIP, autosurf and corrupt MLM or commission-based investment programs and make claims about the “due diligence” you’ve performed and try to impress prospects with your insider knowledge, your willful blindness may put you at great risk.
Mowen had three prior convictions in Utah for securities fraud and two for theft, according to records. Despite Mowen’s criminal record and history as a fraudster, promoters still did business with him. Their faith drained millions of dollars from investors, the SEC said. Using language apt to cause unease in the Ponzi-promoting world, the SEC said at least one promoter “either knew or was reckless in not knowing that Mowen had multiple recent felony convictions involving crimes of dishonesty.â€
Indeed, the SEC said, the promoter learned in approximately late June 2007 that Mowen had been convicted of securities fraud . . . [but] “continued to solicit new investor funds for several months while failing to disclose Mowen’s criminal history to any of the Promoters or their investors.†Downstream promoters who entrusted the promoter “conducted virtually no due diligence in connection with [his] purported investment opportunities, but transferred investor money to [him] without any documentation or limitation on his use of the funds,†the SEC said.
Perhaps the biggest myth exposed by the Ronald Paul Shade case is that going offshore takes state attorneys general and local prosecutors totally out of play. Longtime PP Blog readers will remember that the “offshore” pitch was pivotal in promotions for AdViewGlobal, AdGateWorld, MegaLido and other autosurfs that surfaced in the aftermath of the seizure of tens of millions of dollars by the U.S. Secret Service in the AdSurfDaily Ponzi scheme case. Some ads claimed that the “offshore” surfs neutralized state-level investigators.
Shade, however, was brought back to the United States at the request of the San Bernardino County District Attorney’s Office in California to face state charges filed by local investigators.
Still promoting investment-fraud schemes on the Ponzi boards and supplementing your pitches with myths about “safety” and how the overseas schemes are insulated from prosecution? Perhaps this story on the dramatic extradition of Colombian national David Murcia to the United States will help you snap out of your delusion that Ponzi and pyramid businesses cause no harm and represent “freedom” of choice. Perhaps this story on Robert Hodgins, who goes to bed at night knowing he’s wanted by Interpol, will help you shape your thinking.
The cases of John and Marian Morgan, U.S. residents extradited from Sri Lanka, also are instructive.
Finally, it’s worth noting that, after the United States charged Canadian national Nicholas Smirnow in May with operating an HYIP Ponzi scheme, a MyCashForums poster was quick to claim that “the USA has no extridition (sic) agreement ion (sic) place with the Phillipines (sic) . . . “
The claim was false. Federal prosecutors said they are seeking Smirnow’s extradition. He was accused of operating a $70 million, international fraud known as Pathway to Prosperity (P2P).
Here, now, the story of Ronald Paul Shade’s extradition . . .
A California man living in Thailand was extradited to the United States to face charges he ripped off senior citizens in a real-estate Ponzi scheme, authorities said.
Ronald Paul Shade, 39, formerly of Riverside, was arrested by local detectives Friday at Los Angeles International Airport. He was charged by investigators from the San Bernardino District Attorney’s Office with 29 felonies, including financial elder abuse, filing forged documents with the County Recorder’s Office and grand theft.
San Bernardino County District Attorney Michael A. Ramos, who also is the president of the California District Attorneys’ Association, led the probe.
Among the detectives involved in the Shade probe was Michael Leibrich, a senior investigator with the DA’s office.
“From 2006 to 2008, Shade solicited money from numerous investors for his company, Orange Crest Realty,” investigators said. “Investors were promised a high rate of return for a short-term investment. Elderly victims later discovered that their life’s savings were being used to further a Ponzi scheme.”
Shade had been living in Thailand for about two years, investigators said.
In 2008, the California Department of Corporations issued a “desist and refrain” order against Shade and his company after alleging that they were selling unregistered securities and recruiting prospects by urging them to “Get 18% APR Today†through the company’s “wonderful†investment.
Shade and the company used a now-defunct website known as OCRFunding.com to pitch the purported program, authorities said.
Among the misleading claims made to investors, according to authorities, were these:
That Orange Crest Realty was founded in 1993. (Authorities said Orange Crest Realty was not incorporated until June 2004.)
That Orange Crest Realty is a “registered investment advisor.†(Authorities said neither Shade nor the company and its associates were registered.)
That each investment was secured by actual title to specific existing real property. (Authorities said that “each investment was not secured by real property.”)
That a Deed of Trust And Assignment of Rents in the Property would be recorded with the Office of the County Assessor/Recorder and the investor would be provided with the recorded deed. (Authorities said a deed promised an investor who sent in $50,000 was not recorded and the “investor never received a recorded deed.”)
That the investor would receive regular monthly interest payments. (Authorities said “payments ceased shortly after the investment was purchased.”)
San Bernardino County investigators were assisted in the extradition by the Southwest Regional Fugitive Taskforce of the U.S. Marshals Service.
The scheme, which allegedly gathered $14 million, also fleeced investors who responded to newspaper ads, investigators said.
UPDATED 4:51 P.M. EDT (U.S.A.) A convicted felon who emerged from prison and almost immediately launched a $1 million fraud scheme known as PPSN threatened to prosecute and sue a consumer who had filed an online complaint, federal prosecutors said.
Although the threat caused the consumer to withdraw the complaint against Philip Pestrichello, Pestrichello’s bid to rattle the consumer’s nerves ultimately backfired because he included a “fake lawsuit number” in a letter to the consumer. Prosecutors used the letter and Pestrichello’s checkered past to persuade a federal judge to deny him bail. He has been jailed since his February arrest, and now faces up to 20 years behind bars after entering a guilty plea in the case.
In the threatening letter, Pestrichello advised the complainant that “we will proceed by filing a lawsuit against you in The State of New York and you will be subject to prosecution, fines and penalties including monetary damages,” prosecutors said.
Pestrichello also threatened “victim-consumers who lodged on-line complaints warning others that PPSN was a scam,” prosecutors said.
The Federal Trade Commission and the U.S. Postal Inspection Service worked together in the Pestrichello case, which was brought in February as one of the undertakings of President Obama’s Financial Fraud Enforcement Task Force.
Pestrichello was running a scam enterprise known variously as “Preferred Platinum Services Network LLC†; “PPSN LLCâ€; “Home Based Associate Programâ€; and the “Postcard Processing Program,†prosecutors said. They added that he had been running scams since the early 1990s and had been sentenced to three years in prison in 2003 after being convicted of mail fraud in a work-at-home scheme known as “IMXT & Co.”
His most recent scam began in 2007 while Pestrichello was on federal probation after serving his time for the 2003 mail-fraud conviction, prosecutors said.
“For nearly 20 years, Philip Pestrichello has preyed on the especially vulnerable — the economically disadvantaged, the unemployed, the disabled, or elderly individuals — who are trying to supplement their income by working from home,” said U.S. Attorney Preet Bharara. “Pestrichello even began committing his work-at-home scam within one year from his release from prison for a prior scam. If Pestrichello thought he was unstoppable, he was wrong.”
Pestrichello, 38, of Bayville, N.J., now has pleaded guilty to mail fraud in the PPSN case. He faces up to 20 years in prison when sentenced by U.S. District Judge Kimba Wood on Oct. 26. A fraud case against Pestrichello’s wife, Rosalie Florie, is pending, prosecutors said.
It is common for fraudsters to threaten to sue customers, critics and journalists. Such threats were present in the $1.2 billion Ponzi scheme case of disgraced Florida attorney Scott Rothstein, who eventually was disbarred. He repeatedly threatened to sue a reporter who questioned his business practices in the weeks leading up the the exposure of the scheme.
Threats against customers and journalists also were part of the alleged AdSurfDaily Ponzi scheme case. ASD President Andy Bowdoin, according to August 2008 court filings, told customers that he had set aside $750,000 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,” Bowdoin said, according to federal prosecutors. “Now, we’re ready to do battle with anybody. We have a legal fund set up. Right now we have about $750,000 in that legal fund. So we’re ready to get everything started and get the ball rolling.â€
Less than a month after Bowdoin allegedly issued the threat in July 2008, the U.S. Secret Service raided ASD’s Florida headquarters. Prosecutors said the company was operating a $100 million Ponzi scheme and engaging in wire fraud and money-laundering.
Even after the raid, some ASD members continued to threaten Bowdoin’s detractors. One ASD member suggested Bowdoin’s critics would be dragged off in handcuffs for speaking out against the autosurf firm, publishing his version of lyrics from the television program “COPS†to put a chill on the purported slanderers.
“Bad Boys, Bad Boys, Whatcha Gonna Do?†he chanted on the now-defunct AdSurfZone forum, a predecessor site to the Pro-ASD Surf’s Up forum. “Whatcha Gonna Do>WHEN<THEY COME FOR YOU ?!!!â€
In June 2009, while the AdViewGlobal (AVG) autosurf was failing, members were threatened with lawsuits for sharing information that purportedly was “copyrighted.” Members also were told that they risked losing their Internet service for questioning the firm in public. Journalists who published information about AVG were threatened with lawsuits.
When the Pathway To Prosperity HYIP scheme was collapsing in 2008, members were threatened with “expulsion,” according to court filings.
“When complaints were made externally to service providers or supposed payment agents,
scathing rebukes were made to the ‘members,’” according to court filings.
In February 2010, Hospitalera.com Blogger Sybille Yates announced she had been threatened with a lawsuit for calling the INetGlobal autosurf a “scam” in September 2009.
On Feb. 23, the U.S. Secret Service raided INetGlobal’s Minneapolis offices. An affidavit by the U.S. Secret Service described the company as operating an international Ponzi scheme. A federal probe into INetGlobal’s business practices is ongoing.
