Nicholas A. Smirnow. Source: Interpol "Wanted" notice.
After the news broke yesterday that Gregory N. McKnight, the accused operator of the Legisi HYIP Ponzi scheme, had pleaded guilty to wire fraud in a $72 million caper, things only got worse for the serial Ponzi-forum cheerleaders — not that they’re likely to abandon their practice of willful blindness while reaching across oceans to pick the pockets of any person with cash and a pulse.
Nicholas Smirnow, a convicted robber, burglar and drug dealer before he became an HYIP operator and darling of the TalkGold, MoneyMakerGroup and ASAMonitor Ponzi forums, is listed as wanted by INTERPOL.
How long Smirnow has been on INTERPOL’s wanted list and the circumstances under which he was placed on the list were not immediately clear. An email yesterday by the PP Blog seeking comment from federal prosecutors in the Southern District of Illinois on the status of Smirnow and the case against him was not immediately returned.
Smirnow, 54, also is known as Nicolay Smirnow, Alexander Judizcev, Nicholas Kachura and Jeff Prozorowiczm. He was charged in the Southern District of Illinois with fraud and money laundering-related crimes in May 2010 for his alleged operation of the Pathway To Prosperity (P2P) Ponzi scheme.
When the charges against Smirnow were announced approaching two years ago, U.S. federal prosecutors said they intended to ask the government of the Philippines to extradite Smirnow to the United States. Whether Smirnow had been jailed in the Philippines and somehow later was set free after the U.S. arrest warrant was issued could not immediately be determined.
What is clear is that INTERPOL is publishing a “Wanted” listing with the following physical details about Smirnow:
Height: 1.76 meter
Weight: 76 Kg
Colour of hair: Brown
Colour of eyes: Green
The INTERPOL poster for Smirnow was up even as the SEC was announcing the McKnight conviction. (See “Wanted” poster, which is active at the time of this post.)
The P2P scheme was almost unimaginably widespread, a postal inspector said in the 2010 affidavit.
“Financial records of payment processors utilized by P-2-P to collect investment funds from investors show that approximately 40,000 investors in 120 countries established accounts with P-2-P,” the postal inspector said. “Despite the fact that the investment was supposedly ‘guaranteed, investors lost approximately $70 million as a result of [Smirnow’s] actions.”
Ponzi-forum cheerleaders yesterday appeared either to be unaware of (or to have to ignored) the news about the guilty plea of Legisi’s McKnight and corresponding civil judgments against him totaling about $6.5 million.
Some of them continued to focus on their efforts to promote JSS Tripler/JustBeenPaid, a “program” purportedly operated by Frederick Mann that also uses AlertPay and SolidTrustPay.
AlertPay and SolidTrustPay also are referenced in court filings in the AdSurfDaily Ponzi case. A 2008 promo for ASD attributed to Mann asserted that Mann was an ASD promoter. ASD operator Andy Bowdoin faces a criminal trial in September 2012 on Ponzi-related charges of wire fraud, securities fraud and selling unregistered securities.
JSS Tripler/JustBeenPaid asserts it pays a daily return of twice what ASD offered. ASD figure Kenneth Wayne Leaming has been linked to the so-called “sovereign citizens” movement and is jailed near Seattle on federal charges of filing false liens against public officials involved in the ASD case.
McKnight’s base program in Legisi offered a return of .25 percent (one quarter of 1 percent) per day, according to a 2008 SEC filing.
Mann’s purported base program offers eight times that return on a daily basis, according to JSS Tripler/JustBeenPaid promos. On an annualized basis, the “program” offers a return that is between 48 and 73 times higher than the returns of imprisoned Ponzi schemer Bernard Madoff.
Madoff is serving a U.S. prison term of 150 years. McKnight faces up to 20 years, the SEC said yesterday.
A promo for JSS Tripler/JustBeenPaid that appeared yesterday on a forum known as CariGold made this claim. (Italics added):
JSS-Tripler now has 213,884 members — continuing to grow by over 3,000 new members a day. (If it hadn’t been for yesterday’s downtime, the number would have been “over 4,000.”) Thank you to our many promoters for doing such a great job!
Purchases of new JSS-Tripler positions are on track for a new all-time record, today.
More than a month ago — on Jan. 23 — the Italian securities regulator CONSOB announced that JSS Tripler promoters were under investigation. Ponzi-forum promoters pooh-poohed the news.
The World Bank confirmed to the PP Blog this morning that a person named Andrea Lucas left its employment in December 1986, nearly 25 years ago. But Lucas was never a member of the World Bank’s board of directors, as many members of business “opportunity” known as Club Asteria have implied in online, MLM-style promotions for the firm.
Rather, the World Bank described Lucas as a former department head among “many” department heads who held the internal title of director of an individual department. Lucas, the World Bank said, was director of the management systems and account department. She worked in Washington, D.C., according to the World Bank’s records.
The PP Blog initially sought comment from the World Bank on March 3 about Lucas and various claims about Club Asteria made by members of the purported opportunity. Some of the claims have been made on the TalkGold Ponzi scheme and criminals’ forum. The World Bank’s name is being used in Club Asteria promos on TalkGold and other websites.
A blurb for Andrea Lucas on the slow-loading Club Asteria website describes her in the first sentence as “former Director of the World Bank,” using an uppercase “D” in “Director” with no other qualifiers. The reference to the World Bank begins seven words into the profile. The profile also lists Andrea Lucas as “founder and Managing Director of Club Asteria.” No other entities are referenced in the Andrea Lucas blurb.
The blurb makes no mention that Andrea Lucas left her staff job at the World Bank more than two decades ago, when Ronald Reagan was President of the United States and Mikhail Gorbachev was General Secretary of the Communist Party of the now-dissolved Soviet Union.
When Andrea Lucas last worked at the World Bank, George Herbert Walker Bush was Vice President of the United States and still more than two years away from his term as President. The “Black Monday” market crash of October 1987 had not yet occurred, and Iraq’s August 1990 invasion of Kuwait that led to the Gulf War was still nearly four years away. Modern-day accused shoplifter and actress Lindsay Lohan was five months old, and few people outside of Arkansas recognized the names of Bill Clinton and Hillary Clinton. Barack Obama, a community organizer in Chicago, had yet to enter Harvard Law School or meet Michelle Robinson, who’d become his wife and, later, First Lady of the United States.
Regardless, Lucas and the World Bank are referenced repeatedly in online promos by Club Asteria members. Why the company and promoters had seized on the World Bank’s name when Andrea Lucas last was employed there nearly a quarter of a century ago as a young woman was not immediately clear.
“Real Profit Sharing Program ! No Ponzi !” one affiliate promo preemptively screams. “Club Asteria from the Former Director of World Bank – Andrea Lucas.” The affiliate site includes a photo of a letter dated Dec. 14, 2010, and the letter appears to feature the World Bank’s letterhead and verify the former employment of Andrea Lucas at the World Bank. It is positioned by the affiliate as a reason to trust Club Asteria.
Why the affiliate would preemptively argue that Club Asteria was “No Ponzi” was unclear.
Another promo describes Club Asteria as “a perfect home based business that specializes in the remittance business of sending funds back home.
“We provide training, opportunities, consultation and one of the most sensational pay plans of our time,” the promo continues. Club asteria (sic) is run by a former Director of the World Bank and it (sic) set to take the net by storm.”
“Ken Russo,” who posts at TalkGold as “DRdave” and promotes one highly questionable scheme after another, announced yesterday that Club Asteria’s membership ranks had soared to 187,481.
The announcement occurred against the backdrop of a December warning by the Financial Fraud Enforcement Task Force led by U.S. Attorney General Eric Holder that visitors to websites and forums should be skeptical of claims.
“Be wary of people you meet on social networking sites and in chat rooms, where investment fraud criminals have been known to troll for victims,” the Task Force warned.
Except for its confirmation this morning that a person named Andrea Lucas once worked for the World Bank and its release of certain details about her employment nearly a quarter of a century ago, the World Bank declined to comment immediately about the linkage of its name to Club Asteria and the promos at TalkGold and other websites.
The bank, however, confirmed it is aware of the claims. Meanwhile, some Club Asteria members are grumbling in forums about the firm’s slow-loading website and spotty customer support. Among the concerns is that the company recruited members under one set of rules, but may be trying to implement a new set that may force higher costs on participants who expect to get paid.
Some Club Asteria members appear to be confused about whether Club Asteria conducts business from the United States or Hong Kong.
How the company makes money beyond membership fees is unclear. Also unclear is whether the firm has significant revenue streams beyond membership fees. Club Asteria appears to publish no verifiable financial data.
The World Bank is the most recent prominent international entity to have its name appear on TalkGold and other Ponzi forums that push highly questionable business pursuits. Last year, members of the purported MPB Today “grocery” program, which operates as an MLM, flooded websites and social-media sites such as YouTube with references to Walmart.
It is common in the MLM sphere for affiliates to trade on the names of prominent business entities even if no ties exist. Walmart’s name also appeared in promos on the Ponzi boards.
TalkGold, MoneyMakerGroup and ASAMonitor are referenced in federal court filings as places from which international Ponzi schemes are promoted. Even if Club Asteria is a legitimate enterprise, the mere fact it is being promoted on the Ponzi boards raises troubling questions about whether its revenue stream is polluted by proceeds from any number of fraud schemes operating globally.
In recent weeks, federal agencies such as the SEC and CFTC have taken actions against schemes promoted on the Ponzi boards. Meanwhile, the FTC announced an action this week against an online enterprise that allegedly was not policing its affiliate sales force properly.
The FTC charged Lester Gabriel Smith and Legacy Learning of Nashville, Tenn., with disseminating “deceptive advertisements by representing that online endorsements written by affiliates reflected the views of ordinary consumers or ‘independent’ reviewers, without clearly disclosing that the affiliates were paid for every sale they generated.”
In bringing the case, the agency held Smith and Legacy accountable for claims made by affiliates.
“Whether they advertise directly or through affiliates, companies have an obligation to ensure that the advertising for their products is not deceptive,” said David Vladeck, director of the FTC’s Bureau of Consumer Protection. “Advertisers using affiliate marketers to promote their products would be wise to put in place a reasonable monitoring program to verify that those affiliates follow the principles of truth in advertising.”
The TalkGold Ponzi scheme and criminals’ forum has deleted a “sticky” thread reportedly paid for by InstaForex, a dubious company named a defendant in a registration sweep conducted by the U.S. Commodity Futures Trading Commission last month.
The PP Blog reported two days ago that InstaForex was using TalkGold to promote a scheme by which participants who sent InstaForex at least 1,000 U.S. dollars could qualify to win a Lotus Elise valued at more than $50,000. Although sweepstakes that require a purchase are illegal in the United States, InstaForex bizarrely instructed investors that they could improve their odds of winning the car by opening up to 100 accounts each.
Some of the InstaForex promoters used photographs of attractive women to promote the scheme. It was unclear whether the photos were actual pictures of the promoters or whether they were stage props designed to lure skeptical investors.
Why any investor from any country would open a single account — let alone 100 accounts — with a firm that advertises on TalkGold was left to the imagination. TalkGold and similar sites such as MoneyMakerGroup are referenced in multiple filings in U.S. federal courts as places from which international Ponzi and fraud schemes are pushed.
A separate ad for which InstaForex apparently paid TalkGold $95 remains operational on the forum. The ad shows an image of a red Lotus and claims the company is “THE BEST BROKER IN ASIA.” Directly below the ad is an ad for a company that claims to provide a return of 525 percent “After 1 Minute” and 9,860 percent “After 6 Hours.”
Just four of the thousands of schemes pushed on TalkGold — Imperia Invest IBC, EMG/Finanzas Forex, Legisi and Pathway to Prosperity — created tens of thousands of victims globally while gathering hundreds of millions of dollars, according to court records.
The precise time at which TalkGold deleted the paid “sticky” thread on InstaForex and the precise reason why the thread of at least 109 pages was deleted were unclear. Records suggest the thread was deleted in the past 24 hours. The once-massive thread now returns a “No Thread specified” error.
Among other things, InstaForex advertised that it accepted payments through Perfect Money, a murky money-services business purportedly operating from Panama. Imperia Invest, which the SEC accused in October of stealing millions of dollars from thousands of participants, also used Perfect Money, according to court filings.
Included among the Imperia Invest victims were thousands of Americans with hearing impairments, according to the SEC.
Meanwhile, the name of Roger Alberto Santamaria del Cid — the purported contact person of Perfect Money — appears in federal court filings in the EMG/Finanzas Forex forfeiture case.
A Florida-based task force that specializes in detecting and uncovering massive fraud schemes brought the EMG/Finanzas Forex case last year. Del Cid, Perfect Money’s purported contact person in Panama, is listed as EMG’s “Secretary” in court filings that allege that tens of millions of dollars seized in the probe were tied to the international narcotics trade.
EMG/Finanzas Forex was so corrupt that some participants were told the only way they could get their money out was to recruit new investors, have the new investors pay them directly — and use the proceeds from the new investors to recover their initial outlays, according to court filings.
The very first EMG post on the now-shuttered ASA Monitor Ponzi and criminals’ forum referenced yet-another widely promoted Ponzi scheme: 12DailyPro. The 12DailyPro case, brought by the SEC in February 2006, also is cited in the AdSurfDaily Ponzi prosecution brought by the U.S. Secret Service in August 2008. ASD also was promoted on TalkGold.
Writing on ASA Monitor, an EMG/Finanzas Forex aficionado claimed to have learned the ropes from 12DailyPro.
“I have been in internet business for 3 years now and in autosurf industry from 12dailypro,” the ASA poster began. He (or she) then proceeded to tell readers about how they could earn commissions by recruiting for EMG/Finanzas, which the Feds later described as an international menace with tentacles in Central America, South America and Europe.
Court filings in the EMG/Finanzas 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 were seized.
The EMG allegations were explosive because they showcased the 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.
UPDATED 12:04 P.M. ET (U.S.A.) In court filings this week in the AdSurfDaily autosurf Ponzi scheme case, federal prosecutors in the District of Columbia revealed a series of jaw-dropping numbers. The biggest of these is 500,000 — the number of pages of emails gleaned so far in the investigation, which began in July 2008.
Because prosecutors put the qualifier “at least” on the already-staggering number, it is clear the number actually could increase. Each of the pages is subject to the discovery process, meaning that attorneys from both sides and perhaps the court itself faces the monumental challenge of sifting through at least half a million pages of scheme-related correspondence.
Other big numbers in the alleged $110 million ASD Ponzi include 100,000, the number of pages of bank records, and 5,000, the number of pages of documents that emerged after the U.S. Secret Service searched ASD’s office in Quincy, Fla., and the home of company president Andy Bowdoin.
To date, investigators have identified 40,000 potential ASD victims. This number also could grow because there is reason to believe that “there may be members who provided funds to ASD but whose information ASD did not enter into its database,” according to prosecutors.
ASD’s database included information on 97,000 members. Some participants have claimed ASD actually had 120,000 members. Regardless of the final number that emerges, ASD created victims by the tens of thousands, including victims who do not live in the United States, prosecutors said.
The import — and the danger of these numbers — is that ASD is only one autosurf. There may be hundreds if not thousands of autosurfs operating in the world at any one time, along with hundreds or thousands of HYIPs. Like other autosurfs and HYIPs, ASD was promoted on Ponzi forums such as TalkGold, MoneyMakerGroup and ASA Monitor. The Ponzi pitchmen love American money, and commission-grubbing American salespeople and serial promoters who play dumb to line their pockets at the expense of their fellow countrymen specialize in spreading the misery globally.
In May, the PP Blog reported on criminal charges filed against Nicholas Smirnow, the alleged operator of the Pathway to Prosperity (P2P) Ponzi and HYIP scheme. The numbers that have emerged from that alleged scheme are equally stunning: $70 million fleeced from 40,000 victims in 120 countries from “all of the permanently inhabited continents of the world,” according to the U.S. Postal Inspection Service.
The criminal complaint filed against Smirnow specifically references the TalkGold, MoneyMakerGroup and ASA Monitor Ponzi forums — the same forums from which ASD and countless other schemes have been promoted.
Legisi, yet another alleged scheme pitched at the forums, also produced some big numbers. Among them are $72.6 million fleeced from at least 3,000 victims. Matthew Gagnon, one Legisi pitchman, netted $3.8 million alone from the scheme, according to the SEC.
So, in just the three alleged schemes referenced in this column — ASD, P2P and Legisi — the numbers shape up like this: at least $252.6 million gathered from at least 83,000 victims. If the P2P and Legisi cases are shaping up like the ASD case from the standpoint of paper production, investigators, attorneys from both sides and the courts may have to go through more than a million pages of documents and corresponding bank records to make sense of it all.
Meanwhile, the wink-nod, serial promoters continue to ply their trade on the Ponzi boards — all while the U.S. and world economies are trying to navigate the choppiest waters since the Great Depression. While the serial promoters are lining their pockets at the expense of Moms and Pops from virtually every corner of the earth, they are anticipating the danger signs consistent with the implosion of their currently favorite Ponzi — and they are preparing their next round of lies to protect their illicit profit pipeline and explain away the problems that inevitably will emerge.
Some of the professional criminals will tell their marks that it is their duty to be patient when Ponzi payments slow down. They’ll add that problems affect all enterprises regardless of size, and that it’s not unusual for payment bottlenecks to occur. They’ll explain that it likely is a problem with software or the need to acquire a new server to accommodate traffic. After all, they’ll say, “growing pains” are something to celebrate because they signal the success of the enterprise.
And the serial criminals also will talk about a doubting recruit’s duty to be loyal to the enterprise. After all, they’ll explain, the company is doing the right thing by acquiring the equipment and manpower needed to streamline operations and thus return to a normal payout schedule.
While the professional Ponzi criminals are explaining all of this, investors will become further separated from their money before the final round of excuse-making begins. Investors will be cautioned not to contact the authorities and told not to contact the payment processors. After all, the serial pitchmen will explain, if the authorities seize the cash or if the payment processors freeze the accounts, no one will get paid.
When the scheme ultimately collapses, some of the serial criminals will shrug their shoulders and feign surprise. They’ll explain why they had every reason to believe that this one was different, that they’d been assured by the Christian operator it was different. No matter, they’ll say, perhaps positioning themselves as people of faith. Recruits who invested more than they could afford to lose have only themselves to blame, they’ll claim. (This is if they call it “investing” at all; many serial criminals avoid that word like the plague. After all of these years and all of this Bible-thumping, they still apparently believe that it’s possible to skirt securities laws by avoiding the word “investment” and calling it something else.)
Then they’ll unapologetically move on to the next scam. After all, they’ll explain, they have a right to make a living. Some of them will explain that the government, which refuses to see the beauty of the autosurf and HYIP models, is to blame. Along the way they’ll create some clone promoters, and the clones will multiply. The clones will add to the purported, pro-Bible (and antigovernment chorus) — and before long, investigators trying to reverse-engineer a single case will be sifting through 500,000 pages of emails, 100,000 pages of bank records and 5,000 pages of records created as the result of the execution of a search warrant or as a result of actual documents seized.
Agents then will begin the mind-numbing and time-consuming process of identifying victims by the tens of thousands.
Some of the victims will lose their homes because they borrowed against their equity to take advantage of “bonus” ad packs and to maximize their “earnings” through “compounding.” Others will have lost savings set aside to educate their children. Still others will have lost their life savings and money set aside for retirement.
Many of the people who created all the pain will sprint back to the Ponzi forums — and the government will be left to clean up the colossal mess. The Ponzi pitchfest is in constant motion as property values decline in neighborhood after neighborhood, driven by the foreclosures glut. The Stepfords among the promoters will write their Congressman or Senator or perhaps the Inspector General at the Justice Department.
They’ll more or less say that it would be in the interests of America if the Congressman or Senator or Inspector General would see fit to fire all the prosecutors and agents who made these unseemly events occur.
And then they’ll gather up their lists of suckers and try to recruit them into yet-another MLM, autosurf or HYIP nightmare. This they will call “freedom.” Some of them will be angry. Some of them will write rambling diatribes on forums. Invective will be part of the diatribes. Some of them will call public officials “Nazis” and “Socialists,” perhaps even in the same fractured paragraph. Some of them even will try to sue the government or have the prosecutors and judges charged with crimes. They’ll talk about “treason” and high crimes against the Constitution.
What they will never do is make any sense.
It is impossible to imagine that any government agency has the resources to take down all of the corrupt MLMs, autosurfs and HYIPs. But one can imagine a systematic process by which the government identifies the serial promoters and plans a litigation strategy from which will emerge the “shot heard round the world” of corrupt online investment “opportunities.”
That day cannot come soon enough — and the numbers demand it: more than $250 million gathered from victims of just the three alleged schemes referenced on this page, perhaps 1 million or more emails and other documents produced by the investigations, at least 83,000 victims from virtually all corners of the earth, an untold number of agents/investigators from multiple government entities forced to sift though monumental piles of evidence.
It is clear that wealth is being drained by the billions. It is equally clear that vast sums of money have gone missing in the Age of Terrorism.
Clearest of all, however, is that the corrupt MLMs, autosurfs and HYIPs cannot thrive without their greedy and dangerous promoters — and that highly public lawsuits and early morning raids designed to hold the wink-nod Ponzi pitchmen accountable would send an unmistakable message that pain is in your future if you promote these criminally toxic businesses. Serial promoters deserve the same treatment as mid-level drug dealers.
No economy can thrive if a single case among thousands of potential cases is producing 500,000 pages of emails and creating 40,000 victims while consuming tens of millions of dollars — and if “shell companies,” the “shadow banking system” and wink-nod, serial promoters are driving the wanton criminality and letting the cancers metastasize globally.
Here’s hoping such an operation aimed specifically at corrupt MLMs, autosurfs and HYIPs already is under way.
President Obama formed the interagency Financial Fraud Enforcement Task Force in November 2009. He later became the subject of an attack ad by an affiliate of the purported MPB Today "grocery" MLM.
UPDATED 10:56 A.M. EDT (U.S.A.) The ASA Monitor Ponzi and criminals’ forum now is redirecting to a website operated by CashX.com, a Canadian payment processor that hawks MasterCard debit cards and says it permits customers to withdrawn money to Liberty Reserve.
Liberty Reserve is a Ponzi-friendly payment processor purportedly headquartered in Costa Rica after earlier operating from Panama.
Meanwhile, confessed Ponzi schemer Arthur Nadel — who briefly went on the lam from Florida in early 2009 as his $390 million scheme was disintegrating and became known as one of the original “mini-Madoffs” — has been sentenced by a federal judge in New York to 14 years in prison.
It is effectively a life sentence for Nadel, who is 77 and one of several senior citizens implicated in U.S. Ponzi schemes.
At the same time, a former clergyman from Indiana who told congregants it was their “Christian responsibility” to become pitchmen for his then-undiscovered bond scheme has been convicted of nine counts of securities fraud.
Vaughn Reeves, 66, is scheduled to be sentenced next month. The jury deliberated only four hours before returning the verdict against Reeves, himself a senior citizen. Congregants believed they were helping raise money for church-building projects, but it was a scam that led to foreclosure proceedings against eight places of worship. (See link to AP report below.)
Claims made by Reeves are similar to claims made by the Data Network Affiliates (DNA) MLM program, which told members that churches had the “MORAL OBLIGATION” to help bring business to the Florida-based firm and qualify for commissions ten levels deep. DNA purports to be in the license-plate data collection business, claiming it can help law enforcement and the AMBER Alert program recover abducted children.
Incongruously, DNA also purports to sell a “protective spray” that shields cameras from taking photographs of license plates. Equally incongruously, the company said that it could offer a free cell phone with unlimited talk and text for $10 a month. The company later backtracked on the claim, bizarrely saying it studied pricing structures only after announcing it had become the world’s low-price leader while acknowledging it hadn’t vetted its purported vendor for the service.
DNA figure Phil Piccolo later threatened to sue critics. Earlier, Dean Blechman, who said he was the company’s CEO before resigning in February, threatened to sue critics. DNA withheld the announcement of Blechman’s departure for nearly a week and then misspelled his name. DNA also described Blechman as the “future” CEO, even though Blechman had described himself as the current CEO.
Blechman complained to the PP Blog about “bizarre” events at DNA.
ASA Monitor, which is referenced in court filings as a place from which the alleged Pathway To Prosperity (P2P) Ponzi scheme was pitched and was a site from which the purported “grocery” MLM operated by Florida-based MPB Today was pitched, suddenly announced on Oct. 12 that it was closing.
Like MPB Today, DNA also was pitched from Ponzi and criminals’ forums.
The ASA Monitor closure announcement coincided with a flap in which an ASA forum moderator sought to muzzle critics of the MPB Today program, which is being targeted at Christians, foreclosure subjects, Food Stamp recipients, senior citizens, people of color and members of the alleged AdSurfDaily (ASD) Ponzi scheme.
ASD also operated from Florida before the U.S. Secret Service seized tens of millions of dollars in August 2008, amid allegations of wire fraud and money-laundering. Robert Hodgins, an international fugitive wanted by Interpol in a narcotics-trafficking and money-laundering case filed after an undercover probe by the U.S. Drug Enforcement Administration in Connecticut, provided debit cards to ASD, members said.
Nadel’s scheme, meanwhile, operated in the Sarasota area.
“Through his massive Ponzi scheme, Arthur Nadel greased his own pockets and financed his lavish lifestyle, using money his clients relied on him to invest,” said U.S. Attorney Preet Bharara of the Southern District of New York.
“He cheated his elderly and unwitting victims out of their retirement savings and consigned others to poverty,” Bharara said. “The message of [yesterday’s] sentence should be loud and clear — we will continue to work with our partners at the FBI to find the perpetrators of financial fraud and use every resource we have to bring them to justice.”
U.S. District Judge John G. Koeltl ordered Nadel to forfeit $162 million, five airplanes, a helicopter and real estate in Florida, North Carolina and Georgia.
The prosecution of Nadel was brought in coordination with President Obama’s Financial Fraud Enforcement Task Force. U.S. Attorney General Eric Holder traveled to Florida earlier this year to warn fraudsters that the United States was serious about putting scammers in prison.
By September, an affiliate of MPB Today had created a video in which Obama was depicted as a left-handed saluting Nazi who cowered to U.S. Secretary of State Hillary Clinton, who was depicted as a drunk. First Lady Michelle Obama, the mother of two daughters, was depicted as having experienced an embarrassing gas attack in the Oval Office after sampling beans at a Sam’s Club store.
Clinton, depicted in the sales promo as “Hitlary,” knocked out Michelle Obama after barging into the Oval Office bawling and carrying a bottle of wine. Clinton, the mother of one, was the first woman ever appointed to the Walmart board of directors.
Some MPB Today affiliates have claimed Walmart is affiliated with MPB Today and that the government backs the MLM program, which appears to have accounts at at least two banks in the Pensacola area. One of the banks is operating under a consent agreement with the FDIC.
BULLETIN UPDATED 5:02 P.M. EDT (U.S.A.): The SEC has gone to federal court in Utah to halt the operations of Imperia Invest IBC, alleging a spectacular fraud that fleeced money from thousands of Americans with hearing impairments.
Imperia was promoted from the MoneyMakerGroup Ponzi forum — one of the Ponzi forums promoting the MPB Today “grocery” MLM. Imperia also was the topic of discussion and defenses on TalkGold and ASAMonitor, two other forums that are pitching MPB Today.
The SEC’s allegations against Imperia are stunning. More than 14,000 investors were defrauded worldwide, the agency said.
Among the victims were thousands of deaf investors in the United States, the SEC said.
Imperia gathered relatively small sums from thousands of people, the SEC charged, noting that “no evidence has been found that any of the investors have received a single payment.”
“Imperia Invest IBC is a web-based entity that claimed, until late 2009, to be located in the Bahamas,” the SEC charged. “The Bahamian address listed by Imperia is fictitious. Imperia now claims to be located in Vanuatu. However, Imperia is not registered to do business in Vanuatu and the address listed on its website appears also to be fictitious. Neither Imperia nor its securities are registered with the Securities and Exchange Commission. Imperia is not licensed or registered with the Commission, with any state, or with any Self Regulatory Organization.”
Categorically absurd representations of earnings and the program’s potential were made to investors, the SEC said.
“Investors were promised eye-popping amounts of money in return for a simple $50 or $100 investment, and Imperia has made numerous excuses on its website about why these returns haven’t been paid,” said Ken Israel, director of the SEC’s Salt Lake Regional office.
“The Imperia website shows an example of such earnings in which a $50 investment will return $134,000 to the investor in six months,” the SEC charged. At the same time, the agency said some investors were told that spectacular sums were due them for doing business with Imperia.
“Imperia represented to one investor who invested $150.00 with Imperia that Imperia owed him $36,610,755.20 within a two year time frame,” the SEC charged. “Another individual’s account statement who invested $500 in July 2007 showed he is owed $43,907,652.20 as of May 2010.”
It was not immediately clear how so many deaf investors became involved in Imperia. A federal judge has approved an asset freeze.
Imperia called its product Traded Endowment Policies (TEP), which the SEC described as “the British term for viatical settlements.”
“A TEP or viatical settlement involves the sale of an insurance policy by the policy owner before the policy matures, and policies are sold at a discount from face value in an amount greater than the current cash surrender value,” the SEC said.
“There are at least 14,000 [Imperia] investors worldwide with a total investment exceeding $7 million,” the SEC said. “In the United States, there appear to be approximately 6,000 investors, most of whom belong the hearing impaired community, who have invested in excess of $4 million with Imperia.”
Imperia used offshore payment processors such as “Liberty Reserve, located in Costa Rica; Perfect Money, located in Panama; and Procurrex, located in the British Virgin Islands,” the SEC charged. “Once Imperia received funds from Investors, it appears that Imperia then transferred amounts from these accounts to foreign bank accounts, including but not limited to accounts located in Cyprus and New Zealand.”
Even as Imperia was ripping off investors, it also was infringing trademarks and the intellectual property of Visa, the credit-card service, the SEC charged..
“Imperia also requires that investors purchase a Visa debit card to access their investment proceeds,” the SEC said. “Imperia charges customers a fee to purchase the Visa debit card ranging from $145 to $450.
“Visa has not authorized Imperia to use its name or trademarks and has sent Imperia a cease-and-desist letter to halt its unauthorized use of the Visa name and logo,” the SEC said. “There is no evidence that any investor who has ordered a Visa debit card from Imperia has actually received such a card.”
One poster on the MoneyMakerGroup forum advised prospects that he would keep an “open mind” about Imperia, according to web records.
“Anyway, in the final analysis each person must make their own decision,” the poster said in 2007.
While the MoneyMakerGroup poster was holding forth about keeping an “open mind,” Imperia was cloaking itself to siphon millions of dollars, according to web records and court records.
“Imperia took proactive steps to conceal the identity of its control persons by using an anonymous browser to host its website, by communicating with all investors via email without disclosing the identity of any control persons and by establishing off-shore Paypal-style bank accounts to conceal the recipient of the investment proceeds,” the SEC charged.
In July, the Financial Industry Regulatory Authority issued a warning about HYIP schemes pitched online. In May, the U.S. Postal Inspection Service accused an HYIP known as Pathway To Prosperity of defrauding more than 40,000 people in a scheme that took in about $70 million.
Pathway To Prosperity also was promoted on the Ponzi and criminals’ forums. ASAMonitor, TalkGold and MoneyMakerGroup are specifically referenced in court filings in the Pathway to Prosperity case.
MoneyMakerGroup is specifically referenced in court documents in the alleged Legisi HYIP and Ponzi scheme, a fraud that allegedly gathered more than $70 million.
BULLETIN: The U.S. Department of Agriculture (USDA) said this afternoon that the agency’s Food and Nutrition Service is following specific leads in the MPB Today matter and will “take appropriate action as needed.”
For the first time, the agency used the word “investigate” in its remarks about MPB Today, an MLM tied to a purported “grocery” business known as Southeastern Delivery of Pensacola, Fla. USDA previously referred to the MPB Today matter as a “review.” The agency did not explain why the Food and Nutrition Service had entered the probe.
The Food and Nutrition Service, known as FNS, says its “mission is to provide children and needy families better access to food and a more healthful diet through its food assistance programs and comprehensive nutrition education efforts.”
The announcement followed on the heels of claims by MPB Today affiliates that there are liars and thieves within the organization, that the government and Walmart endorsed the MPB Today program and that the USDA’s Food Stamp program was “affiliated” with MPB Today.
On Tuesday, the PP Blog reported that a purported “news release” promoting MPB Today suggested that Food Stamp recipients should sell $200 of their allotment to raise money to join the MLM program.
Yesterday the Blog reported that at least two MPB Today members claimed there are liars and thieves inside the organization, using the claims to suggest prospects should join the program only under specific downlines. The Blog also reported that MPB Today affiliates may have ties to the judicially declared CEP Ponzi scheme, the alleged AdSurfDaily Ponzi scheme and other Ponzi schemes promoted on forums such as ASAMonitor, TalkGold and MoneyMakerGroup.
All three forums were referenced in a criminal case filed in May by the U.S. Postal Inspection Service against the alleged Pathway To Prosperity Ponzi scheme.
In July, the Financial Industry Regulatory Authority (FINRA) issued a warning about HYIP scams that use forums and social-media sites such as YouTube and Facebook to spread virally on the Internet.
MPB Today’s website says it ships “ONLY” dry goods to customers, who can expect to pay a shipping charge of up to 50 percent of an order. MPB Today affiliates have used the high shipping charges as a reason for Food Stamp recipients and other customers to join to the MLM program, saying a one-time purchase of $200 in groceries could result in free groceries for life.
Affiliates have claimed MPB Today issues grocery “vouchers” that can be converted to Walmart gift cards and cash to purchase gasoline, electronics and other nonfood products.
Among other things, the purported “news release” claimed that the idea about selling Food Stamps for cash to join MPB Today occurred “[on] a beautiful Sunday afternoon” during a drive home from “Church.”
One promo for MPB Today showed a 46-inch Samsung television and other electronics that purportedly had been acquired by an MPB Today member through the program. Other promos have show prepaid Visa cards that spend like cash.
MPB Today operates a 2×2 matrix cycler — a business model that has come under fire by the U.S. Secret Service in a Ponzi scheme probe in the Seattle area. The Seattle program was known as Regenesis2x2, and was promoted on some of the same forums MPB Today is being promoted.
At the 2:54 mark in this video that includes a guitar as a backdrop, an MPB Today sponsor informs prospects that the company includes uplines that lie to recruits to get them to join.
An MPB Today sponsor is asserting in a YouTube video that his upline is honest — but that other uplines in the company consist of liars who are “gonna tell you whatever they think you’re gonna want to hear” in a bid to get you to join the Pensacola-based multilevel-marketing (MLM) program that purports to sell groceries.
How any MPB Today payments to members could be considered untainted if the company collected money based on lies and misrepresentations by sponsors was not explained in the 4:26 video.
“And you’re going to see so many videos here, telling you, ‘Join us, we have a large upline, large [upline],’” the video’s narrator intoned.
“They’re lying to you,” he continued. “I know that ours is the second-largest upline in the company. Don’t be . . . People are gonna try to BS you to try to get you to join. They’re gonna tell you whatever they think you’re gonna want to hear.”
MPB Today is being promoted on YouTube and other social-networking sites. It also is being promoted on known Ponzi scheme forums such as ASAMonitor, TalkGold and MoneyMakerGroup.
It is believed that some of the promoters have ties to the judicially declared CEP Ponzi scheme, the alleged AdSurfDaily Ponzi scheme, the alleged Pathway To Prosperity Ponzi scheme, the alleged Regenesis2x2 Ponzi scheme and other Ponzi and pyramid schemes.
Ponzi ties are potentially catastrophic to MPB Today because promoters could be using criminal proceeds from other schemes to join the company. A public claim by a promoter that the company has upline sponsors who lie to members also is potentially catastrophic because it could be construed as an acknowledgment that the company is coming into possession of money based on falsehoods told by its own members.
Meanwhile, some MPB Today members have posted purported “proof” videos that the company is legitimate. Some of the videos show images of checks drawn on a Florida bank that is operating under an FDIC consent agreement.
At least one video shows an MPB Today member cashing a check from the MLM at an FDIC-insured bank while audiotaping the bank teller’s voice. Research suggests the affiliate’s account is at a bank in Utah.
Federal officials have said that Utah is plagued by Ponzi schemes, including schemes targeted at people of faith.
If MPB Today has come into possession of money from Ponzi schemes and is gathering money based on the lies of its members — and if affiliates are cashing or depositing MPB Today checks at banks across the United States — it means that banks external to MPB Today’s bank may be in possession of tainted money.
The U.S. Department of Agriculture is conducting a “review” of claims about the MPB Today program. In July 2009, the U.S. Secret Service, which opened a probe into ASD’s business practices a year earlier, said it also was investigating a 2×2 cycler program known as Regenesis2x2.
MPB Today also operates a 2×2 cycler. It is known that at least one MPBToday affiliate also promoted Regenesis2x2.
The testimonial signed "Mike DeBias" on a website pitching MPB Today purports that "Mike DeBias" sought "Divine Guidance" when using Google to find a sponsor for the purported grocery program, which operates as an MLM. Nevada records lists "Michael A. DeBias" as the operator of Alpha Market Research, the purported parent company of Websitetester.biz, which purports to have gathered 400,000 names and email addresses online in recent months. Websitetester purports to offer "jobs" and an opportunity to become a website "tester." What, precisely, WebsiteTester does is far from clear.
The Golden Panda Ad Zone forum, also known as the Online Success Zone (OSZ), appears to have died — again. Visitors are greeted with a note that says the forum is “currently unavailable.”
Like ASAMonitor, MoneyMakerGroup and TalkGold, OSZ was a site that pitched Ponzi schemes, pyramid schemes, cash-gifting programs and other highly questionable business “opportunities” such as a “program” known as WebsiteTester.biz.
OSZ first died quietly in the spring. It resurrected itself during the summer, and a poster sang the praises of WebsiteTester, a mysterious company that claims to have gathered 400,000 names and email addresses in recent months for a purported “jobs” and website “testing” opportunity.
WebsiteTester’s business model is far from clear. Although affiliates have said there is no downside for registering because the opportunity is “free,” the company says its legitimacy can be established by watching a video that shows no faces and reading a news release published by an anonymous author.
The purported opportunity has encountered a failed launch, a failed relaunch, server problems, substantial downtime and other problems — and yet somehow has amassed more than 19,600 Twitter followers, even though registrants don’t know exactly what they’re registering for.
Records in Nevada show that Michael A. DeBias is the president of Alpha Market Research, WebsiteTester’s purported parent company. A series of websites linked to the firm, however, are registered behind a proxy.
Separately, a person purported to be “Mike DeBias” of “Las Vegas” is listed as a provider of a testimonial on a website that hawks the purported MPBToday “grocery” program. The testimonial implies that “Mike BeBias” sought guidance from God when searching Google for an appropriate MPB Today sponsor.
“. . . I thought I would google-search for a sponsor that was more to my liking . . . I asked for Divine Guidance and the Force led me to you,” the testimonial reads in part. “Thank God, and Thank you.” It was signed, “Mike DeBias – Las Vegas, Nevada.”
It was not immediately clear if the “Mike DeBias” of “Las Vegas” referenced in the testimonial was the same “Michael A. DeBias” listed at the operator of Alpha Market Research, which purports to be based in Las Vagas.
What is clear is that WebsiteTester — like MPB Today — is being promoted on forums infamous for pitching Ponzi schemes. Promos for MPB Today have been targeted at Food Stamp recipients, senior citizens, the unemployed, people of faith, churches and victims of the alleged AdSurfDaily (ASD) Ponzi scheme.
The OSZ forum got its start in the aftermath of the August 2008 federal seizure of tens of millions of dollars from bank accounts linked to ASD and Golden Panda Ad Builder, ASD’s purported “Chinese” autosurf. Promos for other surfs — and “opportunities” such as cash-gifting schemes — were launched from the forum, even after one surf after another crashed and burned and ASD president Andy Bowdoin was sued for racketeering.
Clarence Busby, the alleged operator of Golden Panda, was implicated in three prime-bank schemes by the SEC in the 1990s. ASD’s Bowdoin was arrested in the 1990s for bilking investors in a securities swindle in Alabama, according to court records.
The ASD scheme has been linked to tax-deniers, “patriots,” people who engage in the credit-repair business, and at least one person who sought to imprison federal judges by having a bogus “Indian” tribe issue bogus arrest warrants. At least one ASD member declared himself “sovereign” in a bizarre court case, suggesting he enjoyed diplomatic immunity and answered only to Jesus Christ.
Another person linked to ASD filed court papers in Missouri that claimed a mortgage-foreclosure case could be halted in its tracks by posting a bond of $21 in “silver coinage.”
Appeals to religion frequently were displayed on the now-defunct “Surf’s Up” forum — a forum that had ASD’s official endorsement — and one HYIP program pitched from the forum used an image of Jesus Christ in a sales pitch. The HYIP later collapsed, after collecting an untold sum of money.
Court records suggest that a person believed to have been involved in ASD and other HYIPs also was engaged in cell-phone trafficking.
Prior to its series of deaths, the OSZ forum also promoted “programs” such as Narc That Car and Data Network Affiliates, both of which purported to be able to help law enforcement and the AMBER Alert program rescue abducted children. No evidence has surfaced that either Narc that Car or DNA has any capacity to help in the rescue of children. During the spring, DNA also purported to be in the cell-phone business.
Narc That Car since has changed its name to Crowd Sourcing International (CSI). Like DNA, CSI has an “F” rating from the Better Business Bureau.
Meanwhile, a separate website that is promoting MPB Today also is promoting DNA and at least 100 “surfing” programs. The programs are promoted MLM-style.
Earlier this week the PP Blog reported that members of MPB Today were using YouTube and other sites to post images of checks drawn on a distressed Florida bank. The checks, which were supplied as purported “proof” of MPB Today’s legitimacy, may expose both the posters and the bank to security breaches and identity theft.
The bank, Gulf Coast Community Bank of Pensacola, has been operating under an FDIC consent agreement since January. It did not respond to a request for comment from the PP Blog. It is possible that the bank was unaware that its name was being used as a form of purported “proof” that one of its customers — MPB Today, which operates an MLM advertised on Ponzi forums such as ASA Monitor — was above-board.
Like MPB Today, the alleged Legisi Ponzi scheme was pushed on Ponzi forums such as MoneyMakerGroup. This bizarre section of the Legisi Terms of Service purports that members must avow they are not an "informant, nor associated with any informant" of the IRS, FBI, CIA and the SEC, among others. The others included "Her Majesty's Police," the Intelligence Services of Great Britain, the Serious Fraud Office and Interpol.
In the alleged AdSurfDaily (ASD) Ponzi scheme in 2008, members cited ASD’s relationship with Bank of America as purported “proof” of legitimacy. Federal agents later seized more than $65.8 million from 10 bank accounts controlled by ASD President Andy Bowdoin amid allegations of wire fraud and money-laundering.
ASD also was promoted on the Ponzi boards. Robert Hodgins, who operated a company ASD members said supplied debit cards to the firm, now is wanted by INTERPOL in a case that alleges he assisted in the laundering of money for Colombian narcotics traffickers. The money was accessed with debit cards through ATMs in Medellin, according to court records.
A mysterious business opportunity known as WebsiteTester.biz also is being hawked at ASAMonitor and other Ponzi boards. WebsiteTester claims it has collected the names and email addresses more than 400,000 prospects across the world. WebsiteTester claims its legitimacy can be established by watching a YouTube video that shows no faces and by reading a news release published by an anonymous author.
In July, the Financial Industry Regulatory Authority (FINRA) issued an alert about fraud schemes that use forums and social-media sites such as YouTube and Facebook to spread virally.
Among the other “programs” pushed on the Ponzi boards was Legisi, an alleged Ponzi scheme that gathered more than $70 million. Legisi members were specifically prompted to “avow” they were not “an informant” for law enforcement, including INTERPOL, the FBI and the SEC, among other agencies.
Despite repeated public warnings by authorities to exercise caution on the Internet, fraud schemes continue to proliferate globally. INTERPOL now says one of its own was targeted in an identity-theft bid on Facebook — and it was the boss himself.
“Just recently INTERPOL’s Information Security Incident Response Team discovered two Facebook profiles attempting to assume my identity,” said Ronald K. Noble, INTERPOL’s Secretary General.
“One of the impersonators was using this profile to obtain information on fugitives targeted
during our recent Operation Infra Red,” Noble said. “This Operation was bringing investigators from 29 member countries at the INTERPOL General Secretariat to exchange information on international fugitives and lead to more than 130 arrests in 32 countries.”
A Nevada-based business that appears to have collected the names and email addresses of 400,000 people worldwide scrubbed its launch and then scrubbed its relaunch, blaming it on technical difficulties.
Websitetester.biz now says it will be back online “Sunday afternoon.”
Although Alpha Market Research, the purported parent company of WebsiteTester.biz is registered as a corporation in Nevada, websites associated with the entities are registered behind a proxy and a video from the firms’ purported CEO included only his purported voice and no images of his face.
Other promos for the purported business fracture the English language, featuring awkward prose such as “Potential clients who are disturbed by trifles during the ordering process are often unaware of exactly why.”
Promos have claimed the purported program is free and that registrants can make money, but the company’s business model is far from clear.
“It is completely free, you earn through EVERYBODY who registers after you, even if you do not sponsor people; you must not sell or buy anything. Guaranteed!” a promo claimed.
Registrants expected WebsiteTester to launch Sept. 1. That launch date was delayed, and the company announced a new launch date in mid-September. WebsiteTester then announced it had encountered “unexpected server difficulties” with the relaunch, leading to grumbling among confused members.
Alpha Market has more than 19,000 Twitter followers, despite its mysterious nature and a pattern of announcing launches and delays.
The company has purported to provide jobs that pay up to $25 per hour for testing websites. It also describes “potential income” and asks members to recruit other members, even though the company exists in a sea of incongruity and uncertainty.
Affiliates have claimed there is no downside to registering because the purported “opportunity” is free. Regardless, the company now appears to have gathered information such as names and email addresses from hundreds of thousands of people across the globe — this while citing an anonymous news release on a free publicity site as an authoritative source of information about the firm.
The news release has been republished on forums that are infamous for promoting Ponzi schemes. The forums have been referenced in court filings in both criminal and civil cases. The ASAMonitor, TalkGold and MoneyMakerGroup Ponzi forums all have promos for WebsiteTester.
Among the other business “opportunities” now being promoted on the Ponzi forums is MPB Today, a Florida-based, multilevel-marketing (MLM) company that purports to be in the grocery business.
Michael A. DeBias is listed in Nevada corporation records as director, treasurer, secretary, and president of Alpha Market Research Inc., WebsiteTester’s purported parent. The address listed for Alpha Market Research — 3651 Lindell Rd., Las Vegas, NV. — appears to be the address of a company that offers “virtual office†services, meaning Alpha Market may not actually be located in Las Vegas.
