Tag: AdSurfDaily

  • INetGlobal Operator Steve Renner In Custody Of U.S. Marshals Service To Begin Sentence In Tax Case

    Steve Renner

    Steve Renner is in the custody of the U.S. Marshals Service, the agency said this afternoon.

    Renner, 55, was the operator of the INetGlobal autosurf. He was convicted of income-tax evasion in December 2009. On May 5, he was sentenced by U.S. District Judge Donovan Frank to 18 months in prison, although Renner was not immediately jailed after sentencing and was given permission to report on a date uncertain.

    His prison term appears now to have begun.

    Renner is listed by the Federal Bureau of Prisons as “in transit” to a federal detention facility. The name and location of the facility were not immediately clear, and the Marshals Service said it could not provide any additional details.

    INetGlobal continues to be under investigation by the U.S. Secret Service amid allegations Renner was operating an autosurf Ponzi scheme. Renner’s tax case was separate from the INetGlobal probe.

    Renner was indicted on the tax charges in September 2008, about a month after the Secret Service raided the Florida headquarters of AdSurfDaily, another alleged autosurf Ponzi scheme.

  • Affiliate Links Show That Surf’s Up Mod And ASD Members Hold High Positions In Upstart Surf: Things To Consider If You Are Tempted To Join AdPayDaily

    Alfred E. Neuman: From Wikipedia.

    Dear Readers,

    We have received a few inquiries about a new surfing program called AdPayDaily (APD). Our initial take is that the program is a dressed-up version of AdSurfDaily, AdViewGlobal, BizAdSplash and AdGateWorld and that the operators are persuaded they’ve found a word combination and legal structure that will neutralize critics and law enforcement should concerns about the sale of unregistered securities and a Ponzi and pyramid scheme be raised.

    AVG, BAS and AGW were positioned by former ASD members as offshore “clones” of ASD. APD, like ASD, appears to be operating in the domestic United States.

    In our view, APD’s presentation raises numerous red flags. At a minimum, it is starting out as an MLM absurdity, if not a potential monstrosity. To get a flavor of the absurdity, imagine that Walmart was clueless enough to start an autosurf and provide a corporate-approved greeter who says, “Welcome to Walmart Pay Daily. We count all the money out of sight in the back room at midnight to determine how much you get, and keep 50 percent of the cash for ourselves. Don’t worry. We have excellent lawyers, and we’ve instructed the money-counter not to rip you off.”

    That’s effectively what APD is saying.

    Another red flag is the fax number listed on a document APD refers to on its website as “Ad Pay Daily’s Conference Registration Form For July 30th and 31st 2010.” The fax number is listed online as a number used by a Kansas real-estate flipping company billed as National Flips. Like APD, the National Flips domain registration is hidden behind a proxy, although the website says this: “To learn how to become a Hard Money Lender and earn 30+% per annum, call [a telephone number] . . .”

    Meanwhile, the invitation for the APD conference that uses the National Flips fax number says this — not once, but twice: “Any person who does not provide photographic proof of identity will not be permitted to attend this event, so don’t forget your photo ID.”

    Why a photo ID would be required to attend a sales pitch for an advertising company is left to the imagination. Undercover Secret Service agents have been known to attend such functions, however.

    Virtually every autosurf that has come along has used strange approaches or applied language tweaks designed to skirt securities laws, disarm critics and sanitize the “opportunities” for prospects. Serial autosurf promoters are infamous for telling prospects that a particular surf has found the magic pill that makes everything legal. Historically they rely on the surf operators to provide a legal cover. When things go south, they claim no one can blame them for promoting the schemes. After all, they relied on the assertions of the operators that everything was above-board and legal. They have been disingenuous in the same way that Alfred E. Neuman, Mad magazine’s fictional mascot, was disingenuous.

    “What, me worry?”

    Worry, however, appears to be front-and-center at APD, which is preemptively denying in multiple places that it is a Ponzi scheme. This strikes us as a big red flag. There are others.

    ASD, Surf’s Up Members Become APD Players

    During its early research into APD, the PP Blog has determined that a number of members of the alleged AdSurfDaily autosurf Ponzi scheme have high positions in the APD venture. Some of the former ASD members hold more than one position in the top 80 positions in APD, including a former Surf’s Up Mod who appears to hold positions 76 and 77. It is possible that another Surf’s Up Mod also is high up in the pecking order of APD affiliates at No. 56.

    The Blog determined the names of APD promoters by researching the method by which APD creates affiliate links. At least one ASD member who made himself part of the ASD Ponzi litigation by submitting pro se pleadings holds positions 9 and 10 in APD, according to the affiliate links.

    Surf promoters are not fond of pointing out the pain of previous prosecutions of autosurfs and the time-consuming and expensive litigation involving both the government and court-appointed receivers that may occur when a surf collapses. It is not uncommon for millions of dollars to go missing in a surf.

    ASD’s Andy Bowdoin has told members that he has spent more than $1 million in his legal defense. Nothing (other than GIGO passed along by promoters) suggests Bowdoin was a man of means prior to the Secret Service raid on ASD’s headquarters in August 2008. His money for his defense appears to have come from ASD members. On a side note, Bowdoin tried to persuade members in September 2009 that the million dollars he dropped to keep himself out of prison was for their benefit. At the same time, he claimed his fight with the government was inspired by a former Miss America.

    ASD gathered at least $65.8 million. When the sum seized in the Golden Panda Ad Builder action, which is part of the ASD litigation, is factored in, the number surges to more than $80 million. That’s a big number, of course — one that shows why others want to start surfs and just tweak and tweak and tweak in search of the elusive magic pill.

    APD’s website was registered on Nov. 18, 2008. That’s just one day before U.S. District Judge Rosemary Collyer ruled that ASD had not demonstrated it was a lawful business and not a Ponzi scheme. APD’s domain-registration date also coincides with a string of registration dates by the so-called ASD clones:

    • Aug. 18, 2008: Domain name for AdGateWorld registered. (About two weeks after the ASD raid by the U.S. Secret Service, which is working in concert with the IRS and federal prosecutors.)
    • Sept. 22, 2008: Domain name for AdViewGlobal registered. (AVG had very close ties to ASD.)
    • Nov. 7, 2008: Domain name for BizAdSplash registered. (ASD and Golden Panda figure Clarence Busby purportedly was both the “chief consultant” and owner of BAS.)

    APD’s domain was registered just 11 days after the BAS domain was registered and only a couple of weeks before ASD declared that the now-defunct Surf’s Up forum was its official organ for ASD news. Surf’s Up became infamous for shilling for Bowdoin, fracturing the facts of the ASD wire-fraud and money-laundering case and misinforming members.

    Each of the surfs in the bullet points above failed spectacularly. Each of them blamed members for their problems. Each of them had promoters and members in common with ASD. Each of them also offered various “bonuses” to join — something APD is doing at the moment.

  • Nicholas A. Smirnow, Pathway To Prosperity (P2P) Operator, A ‘Convicted Burglar, Robber And Drug Dealer’ Who Fleeced At Least 40,000 People In International Ponzi Scheme

    Here is how Pathway To Prosperity (P2P), operated by Nicholas A. Smirnow, was described by members of the indefatigable, Ponzi-pushing ASA Monitor forum in 2007:

    “Just talked with Nick today on the phone,” one member said. “I always enjoy talking with him — honest and straightforward.”

    “This one is a WINNER,” another crowed. “People, you don’t know what you are missing if you aren’t in this program.”

    Here is how a member of TalkGold, another Ponzi-pushing site, described P2P:

    “[T]his program will go a long way to bringing back stability to investment sites,” he wrote. “[T]his one you can trust 100% and also the admin Nick . . . come and join our happy group.”

    Here is how P2P was described by a member of MoneyMakerGroup, yet another Ponzi-pushing site:

    “[T]his is the kind of program that is needed,” the poster wrote. “p-2-p gives the little man a chance to invest and relax knowing your money will be safe at the end of the investment.”

    And here, according to the St. Louis Post-Dispatch, is how the U.S. Postal Inspection Service and federal prosecutors described Smirnow after charging him yesterday with operating an international Ponzi scheme that gathered more than $70 million and fleeced more than 40,000 people:

    “convicted burglar, robber and drug dealer who told a former employee that he was involved in a double homicide.”

    Smirnow, believed to be on the lam in the Philippines, used aliases such as Nicolay Smirnow, Alexander Judizcev, Nicholas Kachura and Jeff Prozorowiczm. The scam spread across the world, and P2P shielded itself by using a website in the Netherlands and a company incorporated in the Turks and Caicos Islands.

    Although the program pitched interest rates of up to 17,000 percent, a poster on ASA Monitor incongruously said, “This is not a HYIP — Nick does not believe in them.” Regardless, the same poster — despite his cheerleading — acknowledged he was worried “about the authorities getting in and shutting things down . . . but since it is not a site being heavily promoted like CEP and not so open, it may keep under the radar . . .”

    CEP was yet another Ponzi scheme.

    It has been an electrifying week for opponents of HYIP and autosurf frauds, who routinely are derided as “naysayers” by commission-grubbing pitchmen who spread Ponzi pain across the planet for a share of illegal profits.

    On Tuesday, the SEC announced it had charged Mazu.com operator Matthew J. Gagnon, 41, of Weslaco, Texas, and Portland, Ore., with helping “orchestrate a massive Ponzi scheme conducted by Gregory N. McKnight . . . and his company, Legisi Holdings, LLC.”

    The Legisi scheme raised about $72.6 million from more than 3,000 investors “by promising returns of upwards of 15% a month,” the SEC said.

    Like Pathway to Prosperity, Legisi also was promoted on ASA Monitor, TalkGold, MoneyMakerGroup and other forums criminals and their shills frequent to separate people from their money.

    A U.S. warrant for Smirnow’s arrest was issued yesterday — although Smirnow is believed to have been ducking Canadian authorities for months because of an investigation into his business practices.

    Smirnow now joins Robert Hodgins — yet another international fugitive allegedly associated with the drug and HYIP trades — on the lam.

    Hodgins, who provided debit cards for the alleged AdSurfDaily Ponzi scheme and is believed also to have a tie to the PhoenixSurf autosurf Ponzi scheme and other autosurf and HYIP schemes, is wanted for helping a Colombian narco business launder money at ATM machines in Medellin and also for accepting $100,000 in purported drug proceeds for laundering money in the Dominican Republic.

    INTERPOL is searching for Hodgins.

    Read the Smirnow story in the St. Louis Post-Dispatch.

  • Data Network Affiliates Asks Members If They Know About Their ‘DNA Tax Benefits’; Pitch Highlights Mileage Deduction; Firm Quotes IRS In First Paragraph Of Email

    An email DataNetworkAffiliates’ (DNA) members received today led with a pitch that participating in DNA could result in large tax deductions for mileage.

    DNA purports to be in the business of paying members to record license-plate numbers for entry in a database that would be potentially useful to law enforcement and the AMBER Alert program for abducted children. The company also purports to be in the cell-phone business and other businesses such as juices and magnetic sleep systems.

    Today’s email to affiliates suggested that people who racked up mileage while recording plate numbers for DNA could qualify for large, business-related tax write-offs.

    “Did you know about your DNA Tax Benefits . . .” the DNA pitch began. “Imagine driving 10,000 miles for your DNA Business = up to a $5,000 Tax Deduction… “IRS Announces 2010 Standard Mileage Rates” IR-2009-111, Dec. 3, 2009… and this is just one of many…”

    DNA did not explain what “one of many” meant. The line that trailed off with the ellipses, however, was in the context of tax deductions. The headline on the email was titled, “DNA = FREE = A Great Opportunity with Great Tax Benefits.”

    DNA then published snippets from an IRS news release with a Washington dateline. Because DNA’s email included only snippets of the IRS release — and because DNA added commentary to the email and appears not to have distinguished its words from the words of the IRS — members could become confused about whether the IRS was talking or whether DNA was talking.

    DNA’s email instructed members to “[c]heck with your accountant to find out what you DNA Business will allow you to legally write off . . .”

    Here is the full IRS news release from Dec. 3 (italics added):

    IR-2009-111, Dec. 3, 2009

    WASHINGTON — The Internal Revenue Service today issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

    Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

    * 50 cents per mile for business miles driven
    * 16.5 cents per mile driven for medical or moving purposes
    * 14 cents per mile driven in service of charitable organizations

    The new rates for business, medical and moving purposes are slightly lower than last year’s. The mileage rates for 2010 reflect generally lower transportation costs compared to a year ago.

    The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.

    A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

    Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

    Revenue Procedure 2009-54 contains additional details regarding the standard mileage rates.

    Here is the portion of the email concerning tax write-offs DNA sent today (italics added):

    WASHINGTON — The Internal Revenue Service today issued the 2010 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

    Beginning on Jan. 1, 2010, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

    * 50 cents per mile for business miles driven
    * 16.5 cents per mile driven for medical or moving purposes
    * 14 cents per mile driven in service of charitable organizations

    Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

    Check with your accountant to find out what you DNA Business will allow you to legally write off…

    DNA spent the balance of the email on topics such as a “Travel Agent Package,” a “Back Relief System,” a “Foot Insole System,” cell phones, juices and other offerings.

    “CHECK OUT YOUR BACK OFFICE YOU CAN BUY $59.95 DNA MAGNETIC PRODUCTS FOR $19.95 AND THEY ARE CHEAPER BY THE DNA DOZEN . . .” DNA said. “BUY THE BACK RELIEF SYSTEM TODAY IT IS A GREAT DNA PRODUCT TO DEMONSTRATE . . .

    “I”N FACT YOU SHOULD BUY A DOZEN . . . GIVE THEM TO TEN FRIENDS OR 5 COUPLES TO TRY . . . THEY WILL MOST LIKELY BUY THEM AND . . . SIGN UP FOR FREE & START SELLING THEM . . .”

    DNA did not explain how it had arrived at the conclusion that people shown the products “most likely” will buy them.

    DNA, which uses a domain registered in the Cayman Islands and conducts customer service with a free gmail address, also did not say why it chose to highlight the tax advantages of repping for the company over the advantages of any actual product offered by the firm.

    The DNA program — and also a similar program operated by a company known as Narc That Car and Crowd Sourcing International — potentially could lead to tax challenges by the United States because of claims made by promoters and the nature of the business itself.

    Both DNA and Narc purport to pay members to record license-plate numbers. Both firms are multilevel-marketing (MLM) programs and have encouraged participants to write down plate numbers or record them on cell-phone cameras at retail outlets such as Walmart, Target, Giant Eagle and others.

    Promoters also have been encouraged to record plate numbers at places such as churches and doctors’ offices.

    The approach has led to questions about whether members would engage in tax abuses such as claiming trips to the grocery store and places of worship as deductible business miles because they recorded plate numbers while in parking lots. Because members have been encouraged to use cell phones and cameras to record plate numbers, a second tier of potential tax abuse could open up, with members trying to write off the costs in whole or in part of any item that had even a tenuous link to the purported business of recording plate numbers.

    There also are questions about whether DNA and Narc members could engage in grandiose frauds such as attending a funeral thousands of miles away and seeking to deduct the trip as a business expense because plate numbers were recorded at the destination site.

    Neither DNA nor Narc publish the names of purported clients of the database products. Affiliates have published purported “training” videos on YouTube that encouraged prospects to record plate numbers virtually anywhere. Some of the videos have suggested that members should behave inconspicuously while recording numbers — for example, driving to the parking lot of a retailer and remaining in the car while recording the plate numbers.

    Details about the propriety, safety and legality of the DNA and Narc programs have been given short-shrift in the purported training videos. It is known that members of an alleged Ponzi scheme known as AdSurfDaily have promoted DNA and Narc, and ASD has been linked to people who participate in tax schemes.

    Parts of DNA’s email today that did not deal with taxes appeared to have been copied from earlier emails and pasted into today’s email. DNA, for example, said today it was “CELEBRATING 69 DAYS IN BUSINESS . . .”

    Earlier emails made the same claim about a celebration for 69 days in business. DNA also celebrated a “Two Month Anniversary.”

  • KABOOM! Agents Tie Alleged ‘Evolution Market Group’ Ponzi And HYIP Fraud Scheme To Narcotics Case In Arizona; Tens Of Millions Of Dollars Seized; Firms Promoted On ASA Monitor, TalkGold Forums

    Kaboom! It has happened again. Explosive court filings by the government show that kneejerk apologists and defenders of High Yield Investment Programs (HYIPs) and autosurfs are quickly running out of cover when they assert that anything is noble or even real about the programs they relentlessly push for their share of purported profits from introducing others to the schemes.

    A law-enforcement task force consisting of the U.S. Secret Service, the IRS and veteran investigators from other agencies that specialize in reverse-engineering complex money-laundering networks have tied funds from a widely promoted online HYIP to the international narcotics trade and a murky money-services business. Research shows that the program and offshoots could have gathered between $100 million and $200 million before the wanton criminality was exposed after exhaustive investigations. The program was advertised as lucrative and harmless on the Ponzi-friendly ASA Monitor and TalkGold forums.

    Research by the PP Blog suggests the purported investment program was so sordid that promoters even claimed some of the funds were being used for the “humanitarian” purpose of assisting kidnapping victims in Colombia. In a sickening display of marketing theatrics, a claim was made that investors could “adopt” kidnapping victims for a payment of $1,000 and that the company would set aside $500 in corporate funds for each victim so that their families could have bright futures if the victims ultimately were released by their captors.

    The HYIP scheme allegedly was associated with an entity known as Evolution Market Group (EMG), which purportedly had a Forex component known as FinanzasForex. Investigators alleged in January  that there were schemes within schemes in a tangled web of domestic and international deception that featured dozens of bank accounts, shell companies and various fronts for money-laundering enterprises, including companies purportedly in businesses such as real estate and car washes.

    The scheme was so corrupt, according to court filings, that some investors were told that, in order to leave the program whole, they had to recruit new investors, have the new investors pay them directly — and use the proceeds from the new investors to “recover” their initial outlays.

    Members of the same Florida-based task force also are involved in the AdSurfDaily autosurf Ponzi scheme investigation. In the ASD case, records show that the company once advertised a debit card federal prosecutors in Connecticut say was offered by a Dallas-based firm that laundered money for a narco business in Medellin, Colombia. The Dallas firm, known as Virtual Money Inc. (VM), also agreed to launder purported drug proceeds in the Dominican Republic, according to court filings.

    Robert Hodgins, the operator of VM, is now an international fugitive wanted by INTERPOL.

    ASA and TalkGold are infamous for promoting international financial frauds, with posters routinely describing the programs as legitimate. The very first post about the alleged EMG scheme at ASA referenced yet another Ponzi scheme — 12DailyPr0 — and informed prospects that they could earn commissions by introducing the alleged Forex component of EMG to others.

    “I have been in internet business for 3 years now and in autosurf industry from 12dailypro,” an ASA poster began, while promoting EMG’s Finanzas Forex arm, which investigators now say was part of a grandiose scheme with tentacles in Central America, South America and Europe.

    “And the (sic) you can earn also money from people under you if you want, you get 0,5% (sic) from every one that you bring (0,5% (sic) from his investment),” the poster said in April 2008.

    Court filings in the EMG case paint a picture of an incredibly elaborate maze of companies and bank accounts set up to confuse both investors and law enforcement. At least 59 bank accounts, 294 bars of gold and nine luxury vehicles have been seized in the case. One of the cars was a 2008 Lamborghini Murcielago valued at more than $430,000.

    The EMG allegations are explosive because they showcase the now-undeniable fact that people who promote programs such as HYIPs and autosurfs because such programs may pay “commissions” to recruit new members may be operating as fronts or conduits for international drug dealers and money-launderers.

    Although ASD is not mentioned in a Task Force affidavit in the EMG case, forfeiture complaints against assets tied to both companies include similar allegations of wanton, relentless fraud. Compellingly, EMG allegedly sponsored “rallies” of members, an allegation in common with allegations in the ASD case. At the same time, research suggests that EMG touted offshore events in exotic locations.

    AdViewGlobal, an autosurf with close ties to ASD, also touted offshore venues and once sponsored at least one meeting on a ship at sea, according to members.

    Meanwhile, research suggests that both EMG and ASD went to great lengths to mask the schemes just prior to interventions by law enforcement and that both schemes had ties to narcotics traffickers and professional money-launderers.

    Both the alleged EMG and ASD schemes were operating during the same general time period, roughly between 2006 and 2008, according to court filings. Each of the schemes had components of investment fraud that targeted people who spoke Spanish or English. Task Force agents have been investigating entities and individuals linked to EMG since June 1, 2008, including a mysterious entity known as DWB Holding Co.

    “The conspiracy to commit wire fraud offenses that gives rise to this action is an international Ponzi/Pyramid scheme operated by Evolution Market Group (EMG) d/b/a Finanzas Forex, DWB Holding Company (DWB), Superior International Investments Corporation (SIIC), German Cardona (Cardona), Daniel Fernandez Rojo Filho (Rojo Filho), Pedro Benevides (Benevides) and others in which investors have been defrauded out of millions of dollars,” federal prosecutors said.

    Federal agencies, including the U.S. Drug Enforcement Administration (DEA), seized “financial accounts” in DWB’s name during a drug investigation in Arizona, according to court filings in Florida. One account seized during the drug probe contained more than $24 million. The money was seized on Aug. 22 and Aug. 26, 2008, about three to four weeks after agents seized more than $80 million in the ASD case.

    A section of U.S. law referenced in the EMG forfeiture complaint refers to “cocaine” and “marihuana,” among other drugs.

    As the investigation progressed, agents established additional money-laundering links — and other bank accounts were seized, according to court filings. The precise mechanism by which purported investment money ended up in accounts seized in the drug case was not immediately clear.

    Shameful Behavior By HYIP And ‘Surf Advocates

    Still promoting autosurfs and HYIPs? Still selling yourself on the delusional theory that they’re harmless and that only “Socialists” or “Nazis” would support the government’s efforts to destroy them? Still arguing that journalists who write about the cases are “liberal” lackeys, have no understanding of the “real” issues and won’t be pleased until every single American entrepreneur is assigned an individual bureaucrat to make their lives miserable?

    Still calling for federal prosecutors and Secret Service agents to be investigated because you love your downline commissions gleaned from Ponzi proceeds and the sale of unregistered securities, don’t want to part with them and figure that, if only you scream loudly enough and long enough, you’ll be able to persuade your fellow Americans that the cops are the real crooks?

    In August 2009, the PP Blog reported that members of ASD, which is implicated in an autosurf  Ponzi scheme involving tens of millions of dollars, advertised that the company used the debit-card services of VM in Dallas. Research suggests that Hodgins or a VM designate attended an ASD function in Florida shortly after ASD’s launch in late 2006.

    Prosecutors said that VM helped the Colombian drug operation offload at least $7.1 million in illegal proceeds at automated teller machines in Medellin. Medellin once was home base of the infamous Medellin Cartel, operated by drug lord and terrorist Pablo Escobar. Escobar was killed by Colombia National Police in 1993.

    Escobar was implicated in the assassination of Colombian presidential candidate Luis Carlos Galán and the bombing of Avianca Flight 203 over Colombia, which killed 110 people.

    Autosurf and HYIP promoters long have claimed that participation in the illegal enterprises is harmless. The indictment against VM — and the allegations that it laundered money for a Colombian drug organization — demonstrates the dangers of participating in murky businesses in which participants have no way of knowing what is in the hearts and minds of other participants.

    It was not immediately clear how long ASD used the VM debit card, which was heavily promoted in early 2007 when ASD said it was having cash-flow problems. By 2008, ASD said it was generating tens of millions of dollars of revenue per week. Some members said they observed huge sums of cash and brief cases full of cashier’s checks at ASD rallies in Florida cities.

    Two Colombian conspirators “directed their agents in the United States to provide proceeds of sales of controlled substances to agents of VIRTUAL MONEY, INC. to be sent to Colombia so the proceeds could be made available to the clients,” according to the indictment against Hodgins.

    VM “stored value cards were used by the members of the conspiracy to make available at a Daviviendo Bank ATM in Medellin, Colombia the peso equivalent of US $2,430,810.24 in April 2006; US $2,437,023.53 in June 2006; and US $2,257,761.45 in August 2006,” prosecutors charged.

    VM and its president, Robert Hodgins, were indicted under seal in 2008 in a case brought by the DEA. The seal was lifted in September 2008, a month after the U.S. Secret Service seized 15 bank accounts in the ASD case.

    ASD was accused by the Secret Service of operating an international Ponzi scheme.

    One of the alleged components of the ASD scheme was an autosurf named LaFuenteDinero, which targeted people who spoke Spanish. Records show that one of the Secret Service agents involved in the ASD investigation formerly was a member of a DEA Task Force in Florida and was experienced in “investigating large criminal organizations that distributed and sold controlled substances.”

    In November 2009, the PP Blog reported that the Secret Service expressed a fear in court documents originally filed under seal that ASD President Andy Bowdoin had become aware of scrutiny into his business affairs in 2008 and planned to flee the United States.

    “Based [on] ASD’s indication that it intends to cease accepting funds into [Bank of America] at the end of July 2008, Bowdoin’s indication that he has relinquished his interest in Golden Panda [Ad Builder], and an indication that Bowdoin intends to establish his offshore presence, and the recent complaints governmental authorities have received, I believe that Bowdoin is aware of increasing scrutiny and that he intends to move himself, his proceeds, and, until it collapses possibly his operation, offshore,” the Secret Service wrote in an affidavit.

    Golden Panda was the purported “Chinese” arm of ASD, according to court filings.

    The agency said Bowdoin had moved millions of dollars into Canada just prior to the seizure of his assets.

    Read a warrant originally issued under seal Aug. 1, 2008, by U.S. Magistrate Judge Alan Kay, who ordered the U.S. Department of Homeland Security to seize a Bowdoin bank account that contained more than $31.6 million. The entire sum was in an account under Bowdoin’s name. Agents eventually seized at least nine other Bowdoin accounts that, in the aggregate, contained more than $34.2 million.

    In recent days, the PP Blog  reported that the alleged INetGlobal autosurf Ponzi scheme in Minnesota, which allegedly targeted Chinese prospects,  had ties to at least three other Ponzi cases, including ASD and a separate Florida case in which it was alleged that the same debit-card company that provided services for INetGlobal provided services for a company implicated in a $22 million Ponzi scheme with ties to Panama.

    Some INetGlobal members provided Chinese prospects instructions on how to offload profits onto debit cards that could be used to withdraw cash at ATM machines, according to promotional material for INetGlobal. About $26 million has been seized in the INetGlobal case.

    INetGlobal-related entities such as Cash Cards International (CCI) and V-Cash now have been linked to a fourth financial-fraud scheme known as Megafund. In the $13 million Megafund case, it was alleged that CCI and V-Cash provided services for certain participants in the Megafund HYIP scheme. At least $175,000 purportedly transferred by a mysterious entity known as MexBank S.A. de C.V. passed through CCC and V-Cash, according to court filings.

    The money was described in court filings as commission payments for the Megafund scheme. Authorities later determined that MexBank was “neither a bank nor a legitimate financial institution licensed” in Mexico, despite its official-sounding name.

    Bradley C. Stark, one of the defendants in the Megafund case, was convicted in 2003 of possessing counterfeit government securities. He was released from prison and was on probation while participating in the Megafund scheme, according to court records. The scheme targeted Christians, and investors were told money was being directed to humanitarian causes.

    Forbes magazine wrote about the Megafund case in July 2005, in a story titled “Too Good To Be True.”

    Less than four years later, the AdViewGlobal autosurf sent an email to members that included Forbes’ logo in a sales pitch. Research showed that the logo had been hotlinked from Forbes’ website and that AdViewGlobal members were attempting to create the appearance that the famous publishing company had endorsed the autosurf scheme. Like the Megafund and EMG schemes, participants in AdViewGlobal were told a portion of the money was devoted to humanitarian causes, including a purported fund devoted to preserving the rainforest.

    In the AdSurfDaily case, members said the company touted a contribution of 100,000 “ad packs” to a charity. The donation was used by promoters to position Bowdoin as a benevolent human being.

    At an ASD rally in Las Vegas in 2008, Bowdoin asserted that he thanked God daily for making him a “money magnet,” and he implored members to imagine themselves coming into large sums of money through rebates on ASD advertising purchases that not only would return 100 percent of the cost of the members’ advertisements, but also pay them at least 25 percent beyond that — more if they rolled over a percentage of their purchases.

    The payment-processing arm of INetGlobal also has been tied to a Ponzi scheme known as Learn Waterhouse, which purportedly advertised a presence in Mexico, according to court filings. Four people have been sentenced to lengthy prison terms in the Learn Waterhouse case, some of the underpinnings of which led to the successful prosecution of INetGlobal operator Steve Renner for income-tax evasion in December 2009.

    Filings in the Learn Waterhouse case assert that Renner, who operated both CCI and V-Cash, used customers’ funds as though they were his own.

    When the Learn Waterhouse receiver tried to reclaim the funds to make Ponzi victims as whole as possible, the money was not available because Renner had spent it on personal purchases, according to court filings.

    If you are playing the HYIP and autosurf games, the PP Blog suggests you read these documents from the alleged EMG Ponzi case.

    Task Force affidavit.

    Amended Forfeiture Complaint in U.S. District Court in Orlando.

    Still want to cheer for the HYIPs and autosurfs?

  • ESSAY: Why Narc That Car Has A Duty To Reveal The Names Of Its Database Clients And Police Departments Whose Members May Be Narc Consultants

    This promo by a Narc That Car member appeared on a .org website that used AMBER Alert's name in its URL. The U.S. Department of Justice, which administers the AMBER Alert program, denied in February that it had any affiliation with Narc. Days later, Narc removed a reference to AMBER Alert in its own video production to advertise the opportunity. The actions of both Narc and its promoters have led to questions about whether the company had come into possession of money based on misrepresentations that caused prospects to believe they were helping out worthwhile causes by joining Narc. The very first Narc promotions observed by the PP Blog were authored by members of AdSurfDaily and Golden Panda Ad Builder, companies implicated in a Ponzi scheme involving tens of millions of dollars.

    EDITOR’S NOTE: Narc That Car says it is a private company and has no duty to reveal the names of its data clients. This essay challenges Narc’s arguments.

    The public has a compelling interest not only in learning the identities of Narc That Car’s clients through appropriate channels, but also in learning the identities of the company’s data-gatherers who may hold jobs in the public sector and are supplementing their income by moonlighting for Narc as consultants.

    Narc is a highly questionable business. Moonlighting by public employees in highly questionable ways is one of the elements in the Scott Rothstein Ponzi scheme in Florida. Rothstein is alleged to have employed off-duty members of law enforcement as bodyguards while he orchestrated a $1.2 billion fraud. Moonlighting also is an element in a recent case in which investigators in Georgia probed allegations of sexual assault against Pittsburgh Steelers’ quarterback Ben Roethlisberger, who employed off-duty police officers as bodyguards.

    The assault allegedly took place in the women’s restroom of a nightclub. Roethlisberger was not charged in the case, but was suspended for six games by the NFL for conduct detrimental to society and the league. Two Pennsylvania police officers working for him potentially face disciplinary action for sullying the reputations of their departments and not extricating themselves from a situation in which a crime or crimes might have been committed in their presence.

    Why Wouldn’t The BBB Have Questions

    Today the PP Blog challenges its readers, including its critics, to read this essay, observe the sampling of graphics and answer a few simple questions: Why wouldn’t the Better Business Bureau, responsible businesspeople, journalists, law-enforcement agencies and taxpayers not have questions about Narc That Car? (Now suddenly known as Crowd Sourcing International after issuing checks to members under at least two different names earlier in the year.)

    And why isn’t the company stepping forward with answers that enlighten, not deflect or hop-scotch, around key issues? The company should supply the information to the Better Business Bureau and any law-enforcement agency that asks for it.  Information Narc provides could be kept private while any investigation ensues and released by the government if it is determined that wrongdoing has occurred.

    Narc says it is in the business of paying people to record the license-plate numbers of cars for entry in a database that will be used by “lien holders” and companies that repossess automobiles when owners default on loans.

    Members of Narc say they record plate numbers randomly — in places such as parking lots — on the off-chance the vehicle is or later will become a target of the repo man. Narc’s data-gatherers are required to provide the address at which the plate number was viewed and recorded. Because the location data likely will be stale and the car likely will be moved before it becomes the subject of a repo bid, there are legitimate concerns about the actual usefulness of the data to lien-holders and concerns about whether Narc is just an excuse for a business, not an actual business capable of making profits from retail sales to database clients.

    There also are significant concerns about privacy, and the propriety, safety and legality of the Narc program. Some Narc members have advertised that they collect “extra” plate numbers and use them as incentives for prospects to qualify for commissions without gathering data themselves, a practice that leads to troubling questions about whether Narc members have provided corrupt data to the company. An unknown number of plate numbers recorded in Narc’s database may be third-party sightings passed along to incoming members who entered bogus addresses at which plates purportedly were sighted — all to qualify for payments.

    Equally troubling is that Narc, which has to know that some members are providing plate numbers for downline recruits, does not reveal the names of its database clients, saying the information is proprietary. There may be no way for existing Narc clients to know whether the data Narc reportedly is selling has been corrupted by the practices of members so eager to earn money that they’re giving away plate numbers and the recipients of the plate numbers are fabricating addresses at which the plates were spotted.

    Corrupt data is worthless data.

    There are reports that Narc can verify the validity of a plate number — but it is inconceivable that Narc has the means to verify that the plate actually was spotted at a specific address. Adding to the ripples of a potentially corrupt data stream is that some Narc members have instructed incoming members in purported “training” videos not to bother noting the address at the time the plate number was sighted. Rather, the prospects have been told to go home and look up the address on the Internet or refer to a store receipt if they happened to be shopping at, say, Walmart or Giant Eagle, when they were doing their side business for Narc.

    Members appear to be able to enter any address they please, whether the car was spotted there or not. Meanwhile, some members have openly said they don’t like their neighbors knowing they’re recording plate numbers for a fee, so they record the numbers in the same fashion a character in a spy novel hides behind a newspaper or makes himself invisible in plain sight. The casualty is transparency at virtually all levels, meaning clients don’t know if they’re buying reliable data, members of the public don’t know their cars are being watched and if profiles are being created, and Narc members don’t know anything other than the information Narc chooses to share.

    Public Esteem For Police At Stake Amid Confusing Claims

    Narc members say police officers have joined the Narc program as data-gatherers and upline sponsors. If true (and the PP Blog believes that police officers are involved in Narc), it is incumbent upon Narc to publicly identify the police departments for which the officers work.

    Because of claims made by Narc promoters, the public has the right to determine if officers who belong to Narc are collecting data while on “city time” or during their off-duty hours and assisting Narc in ways that nonpolice members of Narc cannot.

    Why? Because Narc largely operates in the shadows. Moreover, some of the public claims of its promoters have been beyond reckless — and only Narc knows the truth about how it is paying members and using the data they collect. If Narc has police officers among its ranks amid these circumstances, it means the officers are promoting a business they may know very little about.

    Police officers should not be promoting a business they know very little about, especially amid these circumstances. That Narc is paying members is not evidence that no wrongdoing is occurring. All successful pyramid and Ponzi schemes pay members. Moreover, the advertising claims of Narc promoters alone give officers all the information they need to pull out of Narc today and potentially spare themselves and their departments embarrassment later — just as Rothstein’s bodyguards and Roethelisberger’s bodyguards should have pulled out.

    That the officers are repping for Narc and not providing security services is immaterial. Narc emits the same kind of stink. It stinks even if it’s legal.

    Few people would begrudge a police officer from supplementing his or her income in legitimate fashion — but that is not the issue here. The issue is whether Narc and many of its data-gatherers are legitimate. The Better Business Bureau has expressed concerns that Narc might be a pyramid scheme. Whether Narc is a pyramid scheme is not the only issue, however. This essay points out some of the other issues.

    Only Full Transparency Can Lead To A Clean Bill Of Health For Narc

    Absent full transparency from Narc, no police officer or nonpolice officer gathering data, asking people to send money to Narc and building Narc downlines — can determine if they are promoting a scam.

    Period.

    There have been reports in recent days that Narc — through its own unfiltered channels — has claimed the reason it does not publish data clients’ names is because such clients got “incessant” calls when it did publish the names.

    This claim strikes us as the precise kind of dreck that cannot pass the giggle test on Main Street but somehow passes the plausibility test in the most florid hallways of MLM, which much of America and the world already view as a cesspool. Not only is the claim absurd, it also is contrary to promoters’ claims that Narc was employing a revolutionary MLM concept by which members would build the database product first and Narc would sell it to retail customers later. This approach could be illegal if Narc does not have “true” customers (database clients) in  sufficient volume to destroy the pyramid concerns. Although some Narc promoters have claimed the company has “investors,” the claim itself only leads to more questions: Who put up the purported investment money if investors actually exist?

    Narc promoter “Jah” (see below) has been telling prospects for months that Narc reps engage in “No Selling, Trying, Switching, or Using Anything” — in short, Narc’s data-gatherers do not buy the retail database product. Rather, they pay an up-front fee to earn the right to submit plate numbers, become Narc recruiters and have the prospect of earning more money by sponsoring more fee-paying members who pay for the right to submit plate numbers and become recruiters themselves, and Narc sells the database to another set of customers.

    These claims and similar claims have led to concerns that Narc was operating a pyramid scheme. Such an approach also can be viewed as a Ponzi scheme. Absent continuous membership growth and real profits from sales to retail database customers to support the payments to Narc’s data-gatherers, the business could collapse.

    A video promotion in February by another Narc member showed a tab labeled “Clients.” The video was recorded inside the member’s Narc back office and appeared on YouTube  — after Narc had been operating for months. “Don’t worry about that right now,” he said of the “Clients” tab. He did not explain why members should not concern themselves about the tab, which led to questions about whether Narc had data clients in sufficient volume to quash concerns that members were getting paid exclusively or almost exclusively with money from other members — not retail sales to database clients.

    This Is ‘Training?’

    The promo was described as a teaching tool in a YouTube headline titled, “NarcThatCar Training Video.” In the same video, viewers were told that the parking lots of libraries, schools and universities provided a steady stream of license-plate numbers to be harvested and entered into the Narc database.

    “So, carry a pen and paper with you,” the narrator instructed. “You can go to parking lots. You can go to libraries. You can go to schools. My wife goes to the university, and just goes through the parking lot and collects license-plate numbers.”

    An address in the video suggests plate data was recorded in or around the University of Nevada, Las Vegas. The address is the same street address as the UNLV campus. Indeed, one Narc promoter after another has pointed one prospect after another to sources of license-plate data, implying that cars parked on both public and private property were fair game for downline commissions.

    Not even public schools, universities and libraries were off limits in Narc’s universe of members. Narc itself has said its database will be used to locate people, boats, cars and any item imaginable. Data is being mined on both private and public property, and Narc itself says the plate numbers are checked against “the DMV,”  commonly known in many U.S. states as the Department of Motor Vehicles.

    If Narc’s data is checked against the DMV, then Narc’s business is the public’s business. The public has an interest in determining the identities of Narc’s data clients in no small measure because the data potentially could be used to monitor private citizens and people who hold sensitive jobs in government, science, research and the military.

    Narc’s explanation that its clients’ names are proprietary is unacceptable. Its own members are claiming plate numbers are “public” information and “training” prospects to drive through “university” parking lots and the lots of retail stores and restaurants to get a supply of tags, which are checked against DMV records.

    If you’re shopping at Walmart, for example, your plate number could be recorded and entered in Narc’s database by a Narc participant in search of MLM commissions and interested in recruiting prospects who could record your plate number elsewhere, leading to even bigger commissions and an even greater loss of your privacy. Incredibly, some Narc promoters have anticipated the public’s objection to such a pursuit, answering it with a chilling argument that people who’ve done nothing wrong have nothing to fear.

    That is just downright creepy. Is it any of Narc’s business where you park your car because it wants to help the repo man repossess your neighbor’s car? And what if the repo man isn’t Narc’s only client?

    What if a company poses as a repo company or a “lien holder” company and has an objective totally unrelated to the repossession of collateral? What if a suspicious husband with a violent streak, for example, wants to monitor sightings of his wife’s car? What if a private investigator wants to determine where you spend your time? What if the government wants to determine if you’re seeing a shrink? What if an unfriendly government wants to monitor the whereabouts of an important government official or scientist?

    Narc’s purported assurance that members don’t record the plate numbers of government vehicles is hollow because government employees own private cars and do not always travel in government vehicles. The sensitivity of their jobs does not vanish if they are in their private cars whether on-duty or off, and the prospect that a data profile on the movement of these cars can be created and offered for sale is unacceptable.

    It is unacceptable whether the target for monitoring is employed by the government or is just an ordinary citizen employed by any private company. Cars are inexorably linked to their owners. To track the car is to track the owner. Left unchecked, Narc could be used as a data source by private and public entities to monitor people. That is inconsistent with liberty and privacy. It is offensive by its very nature because it potentially puts people who don’t know they are being watched under a microscope, and it is offensive to any notion of propriety because it potentially puts private citizens in the business of spying on other private citizens to qualify for downline commissions. That Narc’s own members are cheerleading for the supposed the riches to be made by helping the repo man theoretically get the neighbor’s car causes one to wonder if America is taking leave or its senses and willing to package and sell anything.

    What’s next? News releases from Narc that announce yet-another successful repo brought about by the company’s army of commission-based spies?

    A World-Class Example Of MLM Excess

    MLM has served up a doozy this time: Peel away the hype and Narc emerges as a private spy-agency-in-waiting. At last count, 52,000 people have expressed a willingness to help Narc build the database and share in the joy of knowing they’ve helped the repo man separate a struggling, single, stay-at-home Mom from the car she shares with her laid-off husband who lost his job when the economy went in the tank.

    Lien-holders do have the right to seize their collateral if a car owner is in default. Lenders do have a corresponding duty to be responsible to investors and depositors to protect assets. But to create a cheerleading section for the repo man when unemployment is at 10 percent is something only the darkest minds in MLM could serve up. That people seem actually to be comforting themselves with the thought that they’ve performed some sort of civic duty by ratting out their neighbor to the repo man and somehow made America a better place is one of the surest signs yet that a big pocket of U.S. commerce has become morally bankrupt.

    And that’s before the Narc privacy and security issues are examined in any detail.

    Does anyone really want Narc to come into possession of data that could be used to create movement profiles on private citizens in any context — all under some implausible theory that the repo man needs extra help?

    Sensitive research — including research paid for by the government — is performed by some universities. The data could be used to monitor people who hold sensitive jobs. This makes it the public’s business to determine precisely what Narc is doing and how and why it is doing it.

    A ‘GOOGLE Opportunity Like Never Before’

    Narc, according to an email members received, also is blaming the media for not understanding what it is doing. Its response to the bad press it has received recently was to tell members not to worry, that Narc remains a “GOOGLE Opportunity like Never before” — and then close the email with insipid, flowery motivational drivel, including this gem: “EVERYTHING is funny when you [sic] making MONEY!”

    Even dispossessing your cash-strapped neighbor of his car, apparently, is funny as long as it pays a downline commission.

    The email remided us of the now-defunct Surf’s Up forum, which promoted the now-defunct AdSurfDaily Ponzi scheme by instructing members that “there are no prizes for predicting rain, only for building arks.” Perhaps finding the fuel they needed in Surf’s Up’s trite prose, many members of ASD pressed forward, introducing prospects susceptible to the harmful power of trite prose to one Ponzi scheme after another.

    As we proceed in this essay, we ask readers to note that check-waving videos and “earnings” reports produced by some members of MLM programs are not evidence of success or honesty. It often is the case in the MLM sphere that promoters who throw caution to the wind and pitch programs they know little or nothing about end up the biggest winners, with the vast majority of participants breaking even or losing both money and time that could be better spent trying to make ends meet by other means.

    Moreover, it often is the case that willfull blindness and forced ignorance are the dominant traits displayed by promoters. Incongruously, a lack of knowledge about companies and products is what often drives MLM profits.

    Practiced hucksters often prefer ignorance themselves, while also preferring prospects who will not ask hard questions and are willing to pass along hype and unchecked information as though they were the high gospel of truth.

    BBB’s Concerns Grow

    Although Narc That Car provided the identity of a single, purportedly “major” client to the Better Business Bureau April 27, the BBB now says “the client’s identity only raises more concerns” about the company.

    The BBB did not disclose the name of the Narc client or reveal why its doubts were heightened after Narc provided the information. On its website, however, the organization said it is “communicating” its concerns about the client to Narc. The BBB also noted its inquiry into Narc advertising claims remains open. The advertising inquiry began Jan. 18. It has been unresolved for nearly four months.

    On March 3, the BBB noted, the organization asked Narc to provide a “comprehensive” list of clients. Narc responded April 27 by providing the name of “one of its major clients,” a development that not only did not dampen the BBB’s concerns that Narc was using a pyramid business model and did not have a product with true value, but also ramped them up.

    Narc That Car has identified Rene Couch as its vice president of marketing. He also has been listed by titles such as executive vice president and chief field advisor, leading to questions about whether Narc and its promoters were making things up as they went along.

    Narc already has an “F” rating from the BBB, the lowest score on the organization’s 14-point scale. In the past two weeks, at least two television stations in major markets in the United States have aired reports about Narc, questioning Narc’s business practices, the level of knowledge Narc’s promoters have about the Dallas-based company and Narc’s willingness to address the questions in an atmosphere of transparency.

    Meanwhile, some Narc promoters have been attacking the BBB and accusing the TV stations of biased reporting — instead of insisting that Narc get out in front of the stories and concerns and put the issues to rest.

    BBB Under Attack

    One of the promoters attacking the BBB is Ajamu M. “Jah” Kafele. Kafele once was accused in Ohio of practicing law without a license and ordered to pay a civil penalty of $1,000 by the Ohio Supreme Court after the bar proved its case against him.

    Attorney or not, Kafele is no stranger to the courts. What follows in the passage below is an exchange between Kafele and the attorney for a law firm he had sued for attempting to collect a debt. The exchange started after the lawyer asked Kafele how old he was. In response, Kafele attempted to assert his 5th Amendment right not to answer the question — in a case in which he was the plaintiff, not the defendant, and a case in which a federal judge admonished him that his “invocation of the Fifth Amendment in response to that question was improper.”

    A. [Kafele]. I don’t recall my age. Next question.
    Q. [Defense counsel]. What was your date of birth?
    A. I don’t recall my date of birth.
    Q. Do you have a driver’s license on you?
    A. No, I don’t.
    Q. Do you have any form of identification on you?
    A. No, I don’t.
    Q. Where were you born?
    A. I don’t recall.
    Q. Do you have parents?
    A. I don’t recall.
    Q. Do your parents — are your parents living or deceased?
    A. I don’t recall. Are you going to ask me some relevant questions to the defense and claims or are you going to find out about my livelihood for your personal gain?
    Q. You’ve indicated you don’t recall whether —
    A. That’s right.
    Q. — or not you have parents. Do you have siblings?
    A. I don’t know.
    Q. Are you married?
    A. I don’t recall.
    Q. Where do you live?
    A. I don’t recall.
    Q. What’s your home address?
    A. I don’t recall.
    Q. How long have you lived there?
    A. I don’t recall.
    Q. What’s your current occupation?
    A. Who said I had an occupation?
    Q. Are you gainfully employed?
    A. Who said I was employed?
    Q. I’m asking you a question.
    A. I’m asking you, who said I was employed?
    Q. Are you employed?
    A. I don’t recall being employed.

    Three-figure, check-waving YouTube video by "Jah," who publicly announced his downline group was "not going to be out here flashing, you know, five-figure checks.” The video, which featured a claim that repping for Narc was like working for the "Census Bureau," later was removed from YouTube's public site. Why it was acceptable to publish a three figure-check but not a five-figure check was never explained.

    Strikingly, Kafele, who once believed it was prudent to sue lawyers who were trying to collect on a debt, now has thrown in his lot with Narc That Car, which says it wants to help repossession companies collect their collateral when buyers default on loans. The case cited above did not have a happy ending for Kafele: A federal judge tossed the preposterous lawsuit he had brought, saying Kafele had engaged in “egregious” conduct.

    “Plaintiff’s repeated and persistent refusal to participate in the discovery process has clearly been willful and done in defiance of the express and unambiguous orders of this Court,” U.S. District Judge John D. Holschuh said. “As a result, the defendants have been denied virtually all discovery in this case. Moreover, plaintiff has been warned — most recently in the April 4, 2005, Opinion and Order granting defendants’ motion to compel and awarding monetary sanctions against plaintiff, . . .  that his continued refusal to participate in the discovery process would result in the dismissal of the action. Nevertheless, plaintiff persists in attempting to transform the litigation process initiated by him into a game. Under these circumstances, no sanction other than dismissal of the action is appropriate.”

    Kafele now is telling prospects he is an authority on Narc That Car. He said he has hundreds of members in his downline. He has been conducting meetings in Ohio to recruit even more prospects, according to his website.

    Fox TV Reports Exposed Promoters’ Willful Blindness

    Not a single Narc promoter approached by Fox 5 in Atlanta in a package aired recently could identify a single Narc data client — and yet the promoters were out in force recruiting people for the firm. Meanwhile, Fox 11 in Los Angeles recently visited YouTube and reported on unsubstantiated claims passed long by Narc promoters to a worldwide audience, noting that California Attorney General Jerry Brown was seeking information on the firm.

    It is known that attorneys general from at least three states — Georgia, California and Texas — are aware of growing doubts about Narc’s business practices.

    Narc’s approach — and the approaches of its promoters — have caused even longtime proponents of multilevel marketing (MLM) to question whether the often-controversial industry had reached an all-time low and whether participants would buy into any scheme under the sun. It is clear that promoters either do not know if Narc is engaging in legitimate commerce or do not care if it is not

    Narc promoter shows prospects that parking lots at the University of Nevada Las Vegas are an excellent source of license-plate data. Narc prospects in this promoter's YouTube video were given no guidance on whether the university or campus police needed to be consulted before recording the plate numbers of students, faculty and employees. The promoter said "libraries" were excellent sources of license-plate data.Â

    — as long as commission checks for recruiting members keep streaming in.

    As things stand, there is no way to determine if Narc is operating legally. The reason there is no way is that Narc does not reveal the names of clients, will not step out of the shadows, put an executive and attorney on TV or consent to a probing interview by a print journalist to answer the doubters and publish verifiable financial data audited by a CPA that shows inputs and outputs and the sources of revenue.

    Any argument that suggests members are not entitled to this data or that the data is proprietary because Narc is a “private” company is not going to fly. The company’s promoters are saying that license-plate numbers are “public” information available for the harvesting by a membership roster of 52,000 people for the purpose of populating a database that Narc itself has said is going to be used to locate people, cars, boats and any item imaginable. That alone makes it the public’s business. Beyond that, promoters say Narc is using government databases to verify data. The assertion that Narc is using the DMVs of America’s 50 states to verify registration data gives the public a compelling reason to demand answers from the company.

    Narc has a duty to tell the public through appropriate channels precisely what database it is using to cross-check data entered by members and how it is accessing the database. It also has a duty to reveal the names of its clients, explain how it screens clients, explain how it screens its data-gatherers, explain whether Narc is able to connect a car to a person when members enter license-plate numbers and explain how the data is secured.

    Absent complete transparency, the privacy of every person whose tag number is entered by a Narc member is a potential casualty. It is inconceivable that Narc is empowering itself to collect your license-plate number — no matter where you park — because it has secret clients in the business of repossessing cars and there is a small chance that you are behind on your car payments or a person you do not even know parks his or her car in the same parking lot as you and is behind on his or her car payments.

    This is the business Narc has chosen to enter — and the public has a compelling interest in knowing precisely how it operates.

    Narc Subjecting Own Promoters To Embarrassment; Promoters, Company Blame It On Media

    Narc exposed its own Atlanta-area members and prospects to embarrassment after a Fox 5 reporter showed up to a pitchfest with a hidden camera and could not get answers even to basic questions, but the company has not issued a statement that addresses the concerns in any real way and is suggesting the media is to blame.

    No part of the Narc story is consistent with transparency or ordinary business practices — and the media attention likely is only now beginning. Viewers in Atlanta and Los Angeles — two of the largest markets in the United States — now have been treated to an appalling lack of professionalism in the MLM sphere, which only will fuel the public’s legitimate doubts about the industry as a whole.

    Why wouldn’t the public believe the Internet is just one giant cesspool after viewing the reports on Fox here and here? If you’re a Narc fan and want to argue that Narc was ambushed, you need to know that Narc had plenty of opportunities to answer questions from journalists before they started hiding their cameras. The PP Blog, for instance, has attempted to contact Narc multiple times. The Blog is aware that other news sites have met dead ends in bids to get Narc executives and knowledgeable employees to answer questions, including NBC-5 of Dallas-Fort Worth and others.

    The Fox 5 Atlanta report neatly exposed promoters’ willingness to cheer for a program, duck responsibility for their claims and then hide behind the skirt of a company when the heat became too intense.

    The trouble with hiding behind Narc’s skirt, however, was that the skirt provided no cover for members. Promoters found themselves in the awkward position of taking heat for a company that did not defend them in any credible way. Narc’s skirt provided no cover at all, and yet some members merrily continue to promote the opportunity and apparently see no incongruity at all.

    Let us spell it out: If you’re going to say the media must get answers from the company rather than promoters in the field, you are hiding behind the company’s skirt. And if the company does not provide the answers, you have no cover at all. This creates the appearance that the prospect of making money is the only thing you value. You certainly don’t value transparency if you’re hiding behind the company’s skirt, and the company certainly does not value transparency by ducking questions, avoiding them altogether or spinning things to create the appearance that the media are responsible for Narc’s lack of transparency.

    The media are not responsible for Narc’s bad press; Narc and its promoters are. One Narc promoter created a red banner on a .org site to create the appearance that sending money to Narc was like donating to the Red Cross. Other promoters appropriated the name of the AMBER Alert program to do the same thing on a .org website. At one point the message became so impossibly butchered that a promoter urged prospects to “Help AmberAlert and other organizations find repossessed cars.”

    Some Narc members made much ado about a TV anchor referring to Narc as a “job,” but dozens of Narc members posted ads on craigslist that advertised Narc as a job. Promos for Narc have been reprehensible. One member claimed Narc would be used to help the Department of Homeland Security find terrorists. Others claimed that the FBI and the AMBER Alert program endorsed Narc.

    These were blatant misrepresentations — plain and simple. If the MLM world wants the rest of the world to take it seriously, it has to quit serving up this slop and stop apologizing for its chefs and the seemingly mindless cheerleaders who cheer for the chefs even when roaches are swimming in the soup.

    In the AdSurfDaily case, for instance, the Secret Service said the chef served up a Ponzi scheme. How did the cheerleaders respond? They called the Secret Service, the agency that guards the President and the Treasury, Nazis and “Satan.”

    Now, amid a circumstance in which the BBB — one of America’s most recognized business organizations — has questioned whether the Narc chef is serving up a pyramid scheme that potentially affects tens of thousands of people, the cheerleaders are responding by trying to plant the seed that the BBB has a secret agenda and is infested with roaches. It is reprehensible — and it must not stand.

    Myriad questions about Narc remain, including these:

    Why are Narc promoters so willing to represent a company they know so little about?

    Does Narc not understand that vague, ambiguous claims on its own website and its apparent unease in addressing media questions are what’s driving the story?

    Why has a Narc PR spokesman not emerged to address media inquiries and become the face of the company? Why aren’t Narc executives stepping out in front of the cameras?

    Why have the statements Narc has issued not explained the incongruity of insisting that license-plate data is “public” information while at once insisting the public has no right to know who its clients are, how they are being screened, how data-gatherers are being screened and how the information is being indexed and sold?

    Why does Narc insist it has the right to collect your license-plate number and offer it for sale to a third party whose identity and motives are unknown to you?

    Why do tens of thousands of Americans suddenly seem so willing to waltz through parking lots of major retailers to record the plate numbers of their neighbors and to recruit others to do the same — when they have knowledge in advance that troubling questions are being asked about the firm?

    Why does the repo man suddenly need the help of a commission-hungry MLM army to dispossess people going through lean times?

    Any chance that the “buy here, pay here” car business and the title loan business are backing Narc because the industry’s practice of approving anyone for a loan actually is driving repos?

    Why are prospects so willing to hand over money when neither sponsors nor Narc itself are willing to provide information that could make the concerns go away?

    How many data clients does Narc have and when did the clients become clients? How much revenue do the data clients generate for Narc weekly and monthly?

    Is it possible that Narc is selling data to itself through a process in which it formed another company to become a Narc client or is relying on an alter ego of some sort or close association with another firm to create a client out of thin air?

    Is Narc closely connected to the “buy here, pay here” automobile business, meaning an entity with a close association with Narc is making high-risk, front-loaded, usurious loans to disadvantaged consumers?

    Is Narc closely connected to the title-loan and payday loan business?

    Is Narc closely connected to the repossession business?

    Does Narc have an investment angel? If so, what is the source of the money and was a private offering involved?

    Is Narc making pyramid or Ponzi-style payments to members?

    Narc promoter tells prospects the company was started to provide data to the Amber Alert system.

    Who are Narc’s executives beyond CEO William Forester?

    What are their names, job descriptions and backgrounds?

    Do they have high positions in the MLM organization and rely mostly or exclusively on commissions or do they draw a salary?

    Who are the members of Narc’s board of directors?

    Are police officers involved in Narc? If so, are they collecting information off-duty or on-duty — and are they complying with the policies of their departments and their cities in their efforts to increase their income?

    Promoters have claimed that Narc is authorized to verify license-plate data through the DMVs of all 50 states. Is that true? If so, is Narc able to view the names and addresses of vehicle owners and the makes and models of vehicles as police officers could do? If untrue, is Narc verifying the data entered by members through another process — for example, querying databases to determine if a plate number already is “taken” in a state and thus unavailable to any other party, and then concluding the plate is valid simply because it is unavailable to another party?

    Is is possible that police officers are querying restricted databases on Narc’s behalf?

    The parking lots of these famous companies are sources of license-plate data for Narc affiliates, according to a promoter. Whether any permission is required of store managers or motorists to record plate numbers for entry in a private, for-profit database is left to the imagination.

    Are police officers and nonpolice officers alike collecting scores of plate numbers and using their supplies as incentives for people to join Narc? (The PP Blog has observed multiple instances in which Narc sponsors suggested they would supply the first 10 plate numbers to incoming recruits, thus qualifying them for an immediate payment from Narc.)

    What part of the approach in the question above is consistent with an attempt to build a valid database, especially if Narc cannot verify that a “gift” plate number actually was viewed in a specific location by the recipient of the gift?

    Why has Narc not publicly and loudly renounced the practice of providing the “gift” of plate numbers to incoming prospects? Can Narc tell if entire downline groups are simply trading or recycling existing plate numbers among members and instructing members and prospects to fabricate an address where the plate was sighted?

    How can Narc possibly know if the cars members say were parked at a specific location actually were parked there?

    What specific event occurred that caused Narc to remove a reference to AMBER Alert in a video promotion and insert the name Code Amber instead?

    About Data Network Affiliates . . .

    We’ll close this essay by asking a few questions about Data Network Affiliates, Narc’s purported competitor in the business of collecting license-plate numbers:

    Is is possible that DNA saw that Narc’s new business of recruiting members to record license-plate numbers was resonating in the MLM universe? And did DNA then engage in a cynical ploy to build a customer base by incorporating Narc’s message — including references to law enforcement and AMBER Alert — simply because it was “working” for Narc?

    DNA declares "GAME OVER – WE WIN" repeatedly in a hype-filled email pitch to announce a $10 unlimited cell-phone plan. The company had been in the cell-phone business only days when it claimed to be able to beat virtually every other competitor on earth on cell-phone pricing. Only weeks later DNA claimed it had been hoodwinked into believing it could offer such a price, removing the offer and claiming to be excited about its future.

    DNA quickly backed away from emphasizing data collection after it observed Narc becoming the focus of critics who raised concerns about the propriety, safety and legality of Narc — and then DNA morphed into a sort of anti-Narc, saying it existed to help law enforcement only and would never share data with repo companies that wanted to take away cars owned by poor people.

    What follows are DNA’s own words (italics added):

    “DNA Affiliates STAY ALERT – They are watching out for their neighbors children. If DNA has 1 million affiliates that is 1,000,000 more people watching out for and caring about children world-wide.

    “Other companies may collect data to sell to REPO COMPANIES to take cars away from many people who are just down on their luck. A single mom, a dad out of work or 100 other good reasons why good people just can not make a payment. One DNA Affiliate just had his car repossessed because he owed 3 payments and offer to pay two of them and they said no and picked up his car.

    “DNA will have no part in such cases. At DNA we collect car data for one purpose and that purpose is that there is a small chance that this data in the right hands could help save a child or help prevent or solve a crime.

    “We do not boast of 6 figure contracts with REPO COMPANIES. At the end of the day a DNA Affiliate knows that what they are trying to do will only be a FORCE FOR GOOD in their community…”

    DNA also positioned itself as the “free” Narc, before springing a $127 upgrade on customers to purchase a data-entry tool that worked faster than the clunker provided the “free” members at no cost. Free members were not told they were getting a clunker until the upgrade program was announced. Before long, DNA announced it was in the cell-phone business — and plenty of other businesses willing to sell products to members who thought they were joining a “free” business.

    Could DNA’s approach be the most cynical, ribald effort in the entire history of MLM? And does the DNA braintrust not recognize that MLM has so many critics precisely because of the obnoxious and absurd approach of the man behind the green curtain and the men letting him get away with serving up ceaseless, hyperbolic slop?

    In our view, DNA is the worst example of wretched excess the MLM trade has ever served up — and Narc is close on its heels for enshrinement in the Hall of Shame. To be sure, Narc is not the next Google, DNA is not the next anything — and the industry has demonstrated once again that many, many of its members think that trite talk about arks is the same thing as building one.

  • Obama Nominates Andy Bowdoin Lawyer To Be U.S. Attorney For Northern District Of Florida; Separately, Bowdoin Appeal In Subpoena Case Dismissed By Panel

    Andy Bowdoin

    An attorney who represented AdSurfDaily President Andy Bowdoin in state court in Florida has been nominated by President Obama to become the new U.S. Attorney for the Northern District of Florida.

    If confirmed by the Senate, Pamela Cothran Marsh would replace Thomas F. Kirwin as the top federal prosecutor in the region, which encompasses 23 counties.

    Marsh, who holds the title of “of counsel” at the Akerman Senterfitt law firm, was among a number of attorneys employed by Bowdoin to contest civil charges that he had operated a pyramid scheme from a former floral shop in Quincy, Fla.

    Bowdoin went on to fire an unclear number of attorneys representing him in state or federal court in ASD-related litigation. It was not immediately clear if Bowdoin had fired Marsh, whose name appears in Leon County Court records as one of Bowdoin’s lawyers.

    There has been no docketed action in the Florida case since Jan. 20.

    At least three Bowdoin attorneys have been subpoenaed to appear in a separate case involving ASD that was filed under seal in federal court. The PP Blog has tentatively identified the subpoenaed attorneys but is withholding publication of their names pending verification.

    Marsh and members of her firm who formerly represented Bowdoin are not among the attorneys who have been subpoenaed. Bowdoin contested the subpoenas in a federal appeals court, but the court dismissed the appeal Friday for lack of jurisdiction, according to records.

    How the case will proceed is unclear.

    Bowdoin is known to have fired at least two attorneys without notice, acted as his own attorney briefly, and then hired at least two new attorneys, according to court filings.

    Marsh received Obama’s endorsement to replace Kirwin on April 14, according to the White House. She is a former assistant U.S. Attorney currently in private practice.

    The pyramid case against Bowdoin was filed in August 2008 by Florida Attorney General Bill McCollum. Assets connected to ASD — including more than $80 million seized from bank accounts — are part of Ponzi scheme litigation brought by federal prosecutors in the District of Columbia just prior to McCollum’s filing of the pyramid allegations.

    Like the federal prosecution against ASD’s assets, Florida’s prosecution of Bowdoin has been marked by strange developments. During a conference call, Bowdoin told ASD members that Ponzi allegations had been dropped against ASD in Florida, a claim that prompted some members to race to forums to announce the good news.

    McCollum’s office responded to Bowdoin’s claims by saying that, not only had Ponzi allegations not been dropped in Florida, they had not been brought to begin with. Earlier, some ASD members participated in campaign to have McCollum charged with Deceptive Trade Practices for holding the view ASD had broken the law. The members also campaigned to have a Florida television station charged with the same offense for broadcasting news they deemed unflattering to ASD.

    Bowdoin’s forays into federal court in the Ponzi litigation have been equally strange. Documents he has filed frequently have been at odds with themselves.

    Read some information on Marsh as submitted to the Senate Judiciary Committee. Among other things, she was lauded during her tenure as assistant U.S. Attorney for her work prosecuting narcotics cases, including cases known as “Operation Bahama Breeze” and “Operation Panama Express.”

    Operation Panama Express resulted in the seizure of hundreds of tons of cocaine, according to Marsh’s Senate file.

  • FLASHBACK: Year Ago Today, AdViewGlobal Announced Offshore Wire Facilitator — On Same Day Obama Announced Crackdown On International Fraud

    One year ago today, President Obama announced a crackdown on international fraudsters. On the same day, the AdViewGlobal autosurf announced a new, offshore wire facilitator. By November, the president had created the interagency Financial Fraud Enforcement Task Force.

    Longtime readers of the PP Blog may scarcely believe a year has passed since the AdViewGlobal (AVG) autosurf announced a new, offshore wire facilitator — on the same day President Obama announced a crackdown on international fraud.

    Obama delivered his remarks at 11:37 a.m. By 5:54 p.m., a member of an AVG forum operated by some of the Mods and members of the Pro-AdSurfDaily Surf’s Up forum announced that AVG members could wire money offshore from the United States after the company’s bank account had been mysteriously suspended earlier in the year.

    AVG highlighted its purported “offshore” location in sales promos.

    The date of the wire announcement — May 4, 2009 — was an important one in the history of the PP Blog. In the following weeks, the Blog came under attack by advocates for autosurf Ponzi schemes. In the months that followed, however, one autosurf scheme after another came crashing down — including AVG.

    Not even the collapse of one autosurf Ponzi scheme and HYIP scheme after another, however, has caused serial promoters to renounce these sordid pursuits. Too much money is involved. Why fret over the national-security implications if a downline commission is on the line in this shadowy and unseemly pocket of reprehensible commerce populated by greedsters, MLM hucksters and just plain criminals and racketeers?

    In this seedy world of constantly expanding rationalizations for criminal conduct and personal profit, the bomb or missile probably will land on a neighborhood that deserves to be destroyed. Right? Longtime readers of the PP Blog know the Ponzi advocates reshape their stories whenever the need arises. Any fanciful, made-up reality will do.

    Some of the Blog’s readers — and the Blog itself — came under near-ceaseless attacks last spring and summer from people who desire to legalize Ponzi schemes. Although the proposition itself is absurd, it was championed by the Blog’s Kool-Aid-drinking critics. Indeed, some of them believe, for example, that all commerce should be legal.

    Some of them are so out-of-touch that they appear not to recognize they are advancing the argument not only for economic misery and the steady supply of drugs for the schoolchildren of America, but also for slavery and human bondage. Their argument is one that would set Bernard Madoff free if society placed any credence in it at all. Madoff victims would be out billions of dollars, 80-year-old people fleeced of their pensions and savings would be forced to reenter the workforce because “that’s the breaks” of capitalism — and yet Madoff would be set loose to run a brand-new scheme of his choosing.

    No part of that vision for America computes. It is a desperate argument of convenience advanced by people who are willing to embrace crime as long as some people make money. In short, it’s the delusional argument for Enron-style capitalism applied to Ponzi schemes. The scalding irony is that some of the very same people who championed Andy Bowdoin of AdSurfDaily did not do the same for Madoff. The hypocrisy — the disconnect — is stunning. If the basis of a pro-Ponzi argument is that all commerce should be legal and that the government wields too big a stick, then both Madoff and Bowdoin should be equally championed — victims be damned.

    So what if Grandma, 92, is greeting customers at Walmart because Madoff needed another big house? And so what if Enron employees and stockholders lost jobs and what they believed to be their financial security? That’s the breaks. Right? It’s much better to follow the lead of some AdSurfDaily members in calling for the prosecutors to be jailed and the judges to be brought up on charges for violating their oaths? Right?

    Today the PP Blog invites readers to visit its archives.

    You’ll see a story about the announcement of AVG’s purported new, offshore wire facility here. You’ll find a related story here.

    In this story, you’ll find a tie between KINGZ Capital Management — AVG’s purported offshore facilitator — and the Trevor Cook Ponzi scheme in Minnesota.

    Here you’ll find a comment from a purported attorney who advised the PP Blog that it might be stepping on too many toes by publishing stories about AVG. Our response is here.

    You’ll find a story about the collapse of AVG here. The collapse occurred about 23 days after we received the note from the purported attorney. As a side note, the story about the collapse also points out that AVG threatened its own members.

    Here you’ll find a story about AVG’s name being mentioned in a racketeering lawsuit against AdSurfDaily, which has close ties to AVG. (Take time to read the comments from readers below the story.)

    In this earlier story, we provided plenty of reasons for people not to join AVG.

    We also recommend you read this story and the accompanying comments. Weighed by a number of factors beyond page views, it is the “most popular” story in the history of the PP Blog.

    Finally, we encourage you to read this story. It’s one of a number of stories we’ve done on  what the President of the United States is doing to combat the insidious amount of financial fraud.

  • THE MODERN PONZI: Federal Judge Orders Parties Not To ‘Harass’ Receiver In Mantria/Speed Of Wealth Case; Dozens Of Companies Now Ensnared In Litigation

    Mantria CEO Troy Wragg in a music video by ICEBLOC.

    A federal judge has issued an order that effectively puts a court-appointed receiver in control of dozens of entities related to Mantria Corp. and Speed of Wealth LLC in a search for “recoverable assets.”

    One of the receiver’s duties is to determine if fraudulent transfers occurred between or among companies, according to the order.

    The order, which is designed to prevent the dissipation of assets and maneuvering to hide or transfer money, is breathtaking because it covers not only Mantria and Speed of Wealth, but also “all of their subsidiaries, parent companies, and. . .  interests in any affiliated entities of any kind.”

    All in all, the order applies to a staggering total of at least 55 entities, a figure that demonstrates the enormous task of unraveling a modern-day fraud amid a maze of corporations.

    The SEC sued Mantria and Speed of Wealth in November, amid allegations that Mantria was running a “green” Ponzi scheme that focused on biochar and a “carbon negative” housing community in rural Tennessee  that purported to be environmentally friendly. Speed of Wealth allegedly helped Mantria get investment clients.

    Appointed receiver in the case was John Paul Anderson of Alvarez & Marsal Dispute Analysis & Forensic Services LLC.

    U.S. District Judge Christine M. Arguello listed dozens of names, perhaps signaling that the order could become even broader by noting that it was “not limited to” the names on the initial list. She also ordered Anderson to come up with a liquidation plan and warned the entities and their agents not to meddle in receivership affairs.

    Anderson was granted the authority to seek the court’s permission to place the entities in bankruptcy if the circumstances warrant such an approach. Arguello minced no words when ordering parties not to meddle. She specifically warned them not to “harass” Anderson or interfere in his duties as receiver (italics/bold added).

    “The Receivership Defendants and all persons receiving notice of this Order by personal service, facsimile or otherwise, are hereby restrained and enjoined from directly or indirectly taking any action or causing any action to be taken, without the express written agreement of the Receiver, which would:

    A. Interfere with the Receiver’s efforts to take control, possession, or management of any Receivership Property; such prohibited actions include but are not limited to, using self-help or executing or issuing or causing the execution or issuance of any court attachment, subpoena, replevin, execution, or other process for the purpose of impounding or taking possession of or interfering with or creating or enforcing a lien upon any Receivership Property;

    B. Hinder, obstruct or otherwise interfere with the Receiver in the performance of his duties; such prohibited actions include but are not limited to, concealing, destroying or altering records or information;

    C. Dissipate or otherwise diminish the value of any Receivership Property; such prohibited actions include but are not limited to, releasing claims or disposing, transferring, exchanging, assigning or in any way conveying any Receivership Property, enforcing judgments, assessments or claims against any Receivership Property or any Receivership Defendant, attempting to modify, cancel, terminate, call, extinguish, revoke or accelerate (the due date), of any lease, loan, mortgage, indebtedness, security agreement or other agreement executed by any Receivership Defendant or which otherwise affects any Receivership Property; or

    D. Interfere with or harass the Receiver, or interfere in any manner with the exclusive jurisdiction of this Court over the Receivership Estates.

    Here is the initial list of entities covered under Arguello’s order:

    1. Mantria Realty LLC
    2. Mantria Communities Inc.
    3. Mantria Real Estate Opportunities Group LLC
    4. Mantria Investments LLC
    5. Mantria Financial LLC
    6. Mantria Capital Advisors LLC
    7. Mantria Industries LLC
    8. Carbon Diversion Inc.
    9. Mantria Records LLC
    10. The Mantria Foundation Inc.
    11. Mantria Realty FL LLC
    12. Mantria Communities LP
    13. Mantria Real Estate Opportunities Group I LP
    14. KITN Investments LLC
    15. The Mantria Renewable Energy Fund LP
    16. The Mantria Place Renewable Energy Site Development LP
    17. The Mantria Industries Hohenwald Tennessee Eco-Industrial Center Site Development L.P.
    18. Earth Mate Technologies LLC
    19. Clean Energy Components LLC
    20. EternaGreen Capital LLC
    21. The EternaGreen International Carbon Economy Network LLC
    22. EternaGreen University
    23. EternaGreen Global Corporation
    24. C&M Industrial Center LLC
    25. Mantria Industries II LLC
    26. Carbon Diversion Carlsbad New Mexico Manufacturing Plant LLC
    27. Indian Trail Estates LLC
    28. Mantria Village LLC
    29. Mantria Bluffs LLC
    30. IronBridge Properties LLC
    31. Legacy Ridge LLC
    32. Iris Village LLC
    33. Mantria Place LLC
    34. The Mantria Group LLC
    35. Mantria Indian Trail Development LLC
    36. Indian Trail Estates Phase I LLC
    37. Indian Trail Estates Phase II LLC
    38. Indian Trail Estates Phase III LLC
    39. Indian Trail Estates Homeowners Association Inc.
    40. Legacy Ridge Homeowners Association Inc.
    41. The Mantria Place Homeowners Association Inc.
    42. SOW Trust Deed LLC
    43. SOW Hard Money Loans Investment Club LLC
    44. SOW Hard Money Loans II LLC
    45. SOW Trust Deed Group II LLC
    46. Trust Deed Group I LLC
    47. SOW Hard Money 50 Economic Stimulus Investment Club LLC
    48. SOW Mantria Income LLC
    49. SOW Mantria Diversification LLC
    50. SOW Mantria 5% LLC
    51. SOW Mantria Place 25% LLC
    52. SOW Mantria 25% LLC
    53. Speed of Wealth Investments Gold Club LLC
    54. Trust Deed 3.0 LLC
    55. SOW MI 25% Sale of Systems LLC

    Arguello said she recognized “that not all of Speed of Wealth, LLC’s assets and/or business may be related, directly or indirectly, to the conduct alleged in the Commission’s Complaint.”

    Named individual defendants in the alleged $30 million fraud by the SEC in November were Mantria CEO Troy Wragg and Mantria COO Amanda Knorr, along with the company itself. Also named defendants were Speed of Wealth and its principals, Wayde and Donna McKelvy, formerly husband and wife.

    One of the companies under the Mantria umbrella was Mantria Records LLC, which purportedly promoted a hip-hop duo known as ICEBLOC.

    Two months after Troy Wragg accepted a kudo from former President Bill Clinton for environmentally friendly business practices, Wragg was implicated by the SEC in an alleged "green" Ponzi scheme. The Financial Industry Regulatory Authority (FINRA) later issued an Investment Alert warning the public about a relatively new form of fraud: “green energy investments” that trade on investors’ affinity for keeping the planet clean.

    The case became notable for reasons beyond its size and scope. Wragg, for instance, appeared alongside former President Bill Clinton at the 5th Annual Meeting of the Clinton Global Initiative (CGI) in New York Sept. 25.

    CGI had lauded Mantria in part for helping to “mitigate global warming” through its business practices. Just two months later Mantria and Speed of Wealth were accused of a colossal fraud.

    After the CGI event in New York, Mantria and Speed of Wealth seized on Clinton’s name and the names of prominent individuals who attended the event to produce marketing materials used to entice investors.

    Even after the SEC brought the charges, reporters who tried to contact Speed of Wealth received email pitches to join money-making opportunities.

    Video promotions by Mantria and Speed of Wealth were notable for dropping the names of President Obama, former U.N. Secretary General Kofi Annan, President Laurent Gbagbo of the Ivory Coast, Mike Duke, CEO of Wal-Mart, Muhtar Kent, CEO of the Coca-Cola Co. and actor Matt Damon.

    Leeching off the names of celebrities, famous businesspeople and politicians to sell fraudulent financial schemes is a common tactic among multilevel marketing (MLM) and Ponzi scammers. By implying that prominent people endorse a product or service, the fraudsters hope to turn skeptics into clients.

    Claims were made in the AdSurfDaily Ponzi scheme case, for example, that ASD President Andy Bowdoin had received an award from President George W. Bush for a lifetime of business achievement. The award proved to be the so-called Congressional “Medal of Distinction,” which is given for campaign contributions to the National Republican Congressional Committee and signifies only the ability to write a check for the purchase of banquet tickets.

    In an SEC case last month, the agency alleged that a Staten Island investment-advisory business known as Gryphon Holdings Inc. told clients that famed businessman George Soros backed the company. A purported “testimonial” from Soros was fraudulent, the SEC said.

  • INetGlobal Employees Ask Judge For Order That Blocks Secret Service From Interviewing Them; Claim Government Has ‘Superiority’ Mentality

    The litigation against INetGlobal amid Ponzi scheme allegations is turning into a legal slugfest in multiple venues. On one side, federal prosecutors are seeking to disqualify INetGlobal attorney Mark Kallenbach, claiming that he is attempting to be both a lawyer and a witness in the same case.

    Now, employees of INetGlobal are seeking a protective order that effectively would block the U.S. Secret Service and other law-enforcement agencies “from contacting these represented individuals and requesting interviews.”

    Attorney Paul Engh filed the motion in federal court on behalf of INetGlobal’s 70 employees, arguing that he is the gatekeeper for the employees’ legal interests and that the government has approached an unspecified number of employees without going through him.

    “These approaches have been made on a cold-call basis, at [employees’] homes, at night or in the early morning hours, and all without notice to counsel,” Engh said in a brief.

    His request that the practice stop was “refused,” Engh argued, asserting that the government claims “that since the employees are on laid off status. . . they are no longer employees.”

    “Having been an employee is a status that doesn’t disappear because the Government wants it to,” Engh asserted. “None were fired.”

    At least one employee — Donald Allen, a former vice president of a company related to INetGlobal and its operator Steve Renner — said earlier this week that he had his own attorney and was cooperating with the Secret Service and federal prosecutors.

    Allen said he was approached by the Secret Service, which appeared at his home unannounced a week ago today, and was asked by the agency if he wanted an attorney. Allen said that he answered yes, and described his first meeting with the agency as “excellent.”

    Allen said he was advised he had “exposure” in the case. He denied he had done anything wrong, saying he was not privy to INetGlobal’s internal financial workings.

    On Tuesday, Allen said he had a second meeting with the Secret Service April 26, adding that he is cooperating in the investigation “100 percent.”

    Also on Tuesday, Steve Renner went to Hennepin County Court in Minneapolis and obtained a restraining order against Allen, claiming that Allen was harassing and threatening him and trying to extort $100,000 from the company.

    Allen said that what Renner claimed to be extortion was actually an attempt to work out a severance package.

    The extortion claim was the second against a former INetGlobal employee. Former CEO Steven Keough was accused in court filings by Renner last month of trying to extort $500,000 from the company. Keough may be the government’s star witness in the case. The Secret Service said Keough had come to believe that Renner had hired him to be a “good face” for the company and that Renner had fired him for asking too many questions.

    Engh argued in his brief yesterday that the government appeared to be ignoring his duty as counsel to INetGlobal employees “on some federalist notion of superiority or entitled sense of un-accountability.”

    Separately, some members of INetGlobal have asserted the government is not playing fair. Similar claims were made in the prosecution of the assets of the AdSurfDaily autosurf. The government ultimately won three separate orders of forfeiture totaling more than $80 million in the ASD case.

    ASD President Andy Bowdoin, whose company has been linked to international fugitive Robert Hodgins, who allegedly laundered money for a Colombian drug cartel, has filed an appeal. The ASD case has been in litigation since the Secret Service raided the company’s Florida headquarters in August 2008. The ASD case is referenced in filings by the prosecution in the INetGlobal case that allege an undercover agent was introduced to INetGlobal by an ASD member who promoted the program despite describing it as a wink-nod enterprise.

    Renner, who was convicted in December of four felony counts of income-tax evasion and is awaiting sentencing, has not been charged in the INetGlobal case. The government seized about $26 million in its investigation into Renner’s business practices, and prosecutors have argued that Renner is attempting to get the government to expose its case before a formal action is brought.

    Renner has denied wrongdoing, and the companies have said they are legitimate enterprises.

  • PONZI NEWS/UPDATES: Fire Destroys ‘3 Hebrew Boys’ Ponzi Headquarters; Minnesota Man Gets Nearly 10 Years In Prison In Ponzi Case; California Man Gets 25

    Sign of the apocalypse? The headquarters of the “3 Hebrew Boys” Ponzi scheme in Columbia, S.C., was gutted in a fire Monday and Tuesday. Firefighters spent 19 hours over two days battling the blaze, but the “building and all contents . . . were completely destroyed,” according to Beattie B. Ashmore.

    Ashmore is the court-appointed receiver in the case. Proof-of-claim forms for victims of the $80 million Ponzi swindle became available April 15, only 11 days before the fire broke out. The cause of the fire is under investigation, and the building was an asset of the receivership estate.

    “All computers and documents have been stored off-site since the Receiver took possession of the building in October 2007,” Ashmore said. “The building was being managed by a reputable property management company, fully insured and continuously monitored by a security company. The Receiver will make a claim immediately with the Hartford Insurance Company for the full value of the building with the insurance proceeds going to the benefit of the victims.”

    The 3 Hebrew Boys case is one of the strangest in the United States, drawing comparisons to the alleged AdSurfDaily Ponzi scheme owing to elements of affinity fraud and antigovernment rhetoric.

    Joseph Brunson, Tim McQueen and Tony Pough were convicted in November of swindling tens of millions of dollars in a bogus debt-relief “ministry.” The purported aim of the program was to free people from government “bondage,” and the investigation was referred to as “Satan’s handiwork.”

    In the earliest days of the 3 Hebrew Boys case, more than 100 people protested on behalf of the scheme at a rally in Columbia, saying the government did not understand the program, had overreached in its prosecutorial efforts, refused to deny it was wrong and had chosen to move forward with the case in a bid to save face.

    In an approach similar to one used by the AdViewGlobal (AVG) autosurf, members were forced to agree to a confidentially clause that purportedly prohibited them from discussing the company outside the confines of meeting places. Participants were threatened with a $1 million penalty for sharing information.

    AVG, which has close ties to ASD, morphed into a “private association” in February 2009. Members were scolded for sharing information and calling the autosurf an “investment” program. As the company appeared to be collapsing in May and June, members were threatened with copyright-infringement lawsuits for sharing information published by the firm.

    Brunson, McQueen and Pough are jailed awaiting sentencing. After they were found guilty of 174 counts mail fraud, money-laundering and transporting stolen goods, the men filed documents accusing former U.S. Attorney Walt Wilkins of treason and committing acts of war by prosecuting them.

    The men became known as “3 Hebrew Boys” after operating a website with the same name, which is based on a biblical story of believers who escaped a furnace by relying on their faith. The Ponzi scheme operated under the name Capital Consortium Group LLC.

    Minnesota Ponzi Sentencing

    A Ponzi scheme operator in Rosemount, Minn., has been sentenced to 117 months in prison and ordered to pay $21.8 million in restitution to victims.

    Charles “Chuck” E. Hays, 56, has been detained since his arrest in February 2009. He pleaded guilty last year to one count of mail fraud, one count of wire fraud and one count of structuring transactions to avoid financial reporting requirements.

    Among the items seized in the case was a $3 million yacht acquired with investors’ money. Hays operated a firm known as Crossfire Trading LLC and bilked investors out of more than $20 million by operating a Ponzi scheme.

    “Hays told potential investors he was a day trader in stock index futures and other futures contracts,” federal prosecutors said.

    Investors plowed money into the scheme based on lies told by Hays, and he “admitted he diverted and converted those funds for his personal use and other unauthorized purposes,” prosecutors said.

    The sentencing judge in the case was U.S. District Judge Donovan Frank.

    California Ponzi Sentencing

    Milton Retana, 46, of Huntington Park, was sentenced to 25 years in prison for a $62 million Ponzi scheme that bilked mostly Spanish-speaking investors out of at least $33 million.

    The case became known as the “Best Diamond case.” Retana operated a purported real-estate investment company known as Best Diamond Funding. It was yet another instance another in which the name of a precious metal or mineral was used in a Ponzi scheme.

    Evidence of the fraud was hidden in the back of a religious bookstore operated by Retana’s wife, prosecutors said. When investigators searched the bookstore, they found millions of dollars in cash. Best Diamond was located next door to the bookstore.

    The scheme — like many other Ponzi schemes — featured an appeal to religion, prosecutors said.

    “Best Diamond Funding solicited money through advertisements in Spanish-language magazines, on the Internet, and during weekly investment seminars at locations across Los Angeles. The raucous investment seminars often had as many as 300 potential investors and incorporated religious messages,” prosecutors said.

    “Retana guaranteed returns as high as 84 percent each year, claiming that he would purchase properties in bulk at below-market prices and immediately sell them for a profit,” prosecutors said. “However, records obtained by federal investigators showed that Retana used only a tiny fraction of the victims’ money to purchase real estate and that his company was actually losing money.”

    The sentencing judge in the case was U.S. District Judge R. Gary Klausner.