The website of “NewGNI” has not resolved to a server for days. The “program” is believed to have been a knockoff of a predecessor scam known as “GNI” or GoldNuggetInvest, which collapsed in early 2010 after being promoted by members of the AdSurfDaily Ponzi scheme.
The collapse of the original GNI was about as bizarre as they come in HYIP land. Critics were told to concentrate on earthquake relief in Haiti, rather than questioning the HYIP scheme. GNI’s collapse purportedly occurred after its operators sought “a crystal clear vision of our financial vortex.“
Among the pitchmen for both GNI and NewGNI was Ponzi-board legend “Ken Russo,” also known as “DRdave.” Earlier, “Ken Russo” had promoted the $119 million ASD scheme. He later turned to ClubAsteria, which was trading on the name of the World Bank to reel in suckers. ClubAsteria promos came under the lens of CONSOB, the Italian securities regulator. “Ken Russo” also emerged as a pitchman for Zeek Rewards, which the SEC described in August 2012 as a $600 million Ponzi- and pyramid scheme operating from North Carolina.
Among “Ken Russo’s” latest ventures is “Profitable Sunrise,” now the subject of a cease-and-desist order from North Carolina regulators.
Profitable Sunrise purportedly is operated by Roman Novak. The “program” is being targeted at people of faith, some of whom appear to be defending it by weaving impossible tales. Any number of Ponzi-board taunts have been aimed at the Securities Division of North Carolina Secretary of State Elaine Marshall, even as ProfitableSunrise advertises a risk-free, preposterous return of 2.7 percent a day in its bizarrely named “Long Haul” program with a purported Easter holiday payoff.
“lol @ NC officials,” says one post at MoneyMakerGroup. Another compares Marshall’s office to “Deputy Barney Fife,” an iconic TV character played by Don Knotts in the Andy Griffith Show.
Even after the government of Belize issued a warning against GNI in 2009, scammers continued to promote it — virtually to the very day it collapsed and took an unspecified sum with it. The collapse triggered a bizarre series of conspiracy theories.
GNI was operating concurrently with a now-collapsed scam bizarrely known as “Cash Tanker,” an “opportunity” aimed at Christians. Cash Tanker used an image of Jesus Christ in its promos and purported to pay 2 percent a day.
URGENT >> BULLETIN >> MOVING: AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming has been found guilty in the Western District of Washington of filing false liens against public officials, harboring fugitives and being a felon in possession of firearms, federal prosecutors said tonight.
Leaming associate David Carroll Stephenson also was found guilty of filing false liens.
The PP Blog will have a full report when more information becomes available. The case was prosecuted by the office of U.S. Attorney Jenny A. Durkan.
The U.S. Court of Appeals for the District of Columbia Circuit has upheld the rulings of a federal judge and rejected an appeal by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer. The ASD duo had contended the seizure of records from ASD’s database in a Ponzi scheme case brought in 2008 by the U.S. Secret Service and federal prosecutors violated their right to privacy and that Judge Rosemary Collyer was biased.
A three-judge panel rejected both contentions.
“Appellants’ purported evidence of bias amounts to nothing more than their disagreement with the judge’s actions in presiding over a related matter, and ‘judicial rulings . . . virtually never provide a basis for recusal,’” the panel ruled
Moreover, the panel ruled, “The dismissal of appellants’ Fourth Amendment claim is affirmed on the ground that appellants lacked a reasonable expectation of privacy in the records allegedly seized.”
ASD was a $119 million Ponzi scheme operating from Quincy, Fla. Disner and Schweitzer later became pitchmen for Zeek Rewards, which the SEC described in August 2012 as a $600 million Ponzi- and pyramid fraud operating from Lexington, N.C.
Kenneth Wayne Leaming, aka “Kenneth Wayne,” aka “Keny,” now is calling himself a “live abortion” — apparently in “defense” of home-based businesses.
UPDATED 12:28 P.M. (FEB. 27, U.S.A.) Kenneth Wayne Leaming, a figure in the AdSurfDaily Ponzi-scheme story and a purported “sovereign citizen,” is scheduled to go on trial today in federal court the Western District of Washington with co-defendant David Carroll Stephenson. Leaming is charged with filing false liens against public officials involved in the ASD prosecution. Among his alleged targets were a federal judge, at least two federal prosecutors — and the U.S. Secret Service agent who cracked the ASD Ponzi case in 2008.
Leaming, 57, also is charged with assisting Stephenson in the filing of false liens against two federal-prison officials. Stephenson was in federal prison for a tax scheme at the time the liens allegedly were filed. Records strongly suggest that Stephenson, also 57, would be a free man today were it not for his association with Leaming, given that Stephenson’s prison term in the tax case had been scheduled to end early this year. Instead, he’s facing new charges and potentially more jail time.
But the false-liens charges are just the beginning for Leaming. He also is charged with harboring two federal fugitives wanted in a multimillion-dollar home-business fraud in Arkansas, being a felon in possession of firearms and passing a bogus “Bonded Promissory Note” for $1 million.
If you’re new to the PP Blog and new to the ASD case, a brief review is in order: The Secret Service raided ASD in August 2008, alleging the Florida-based firm operated by Andy Bowdoin was a massive Ponzi scheme operating over the Internet. Bowdoin reacted to the raid and the seizure of tens of millions of dollars by comparing the U.S. government to “Satan” and the Secret Service to the 9/11 terrorists. Now 78 and in federal prison, Bowdoin came out of the gate after the seizure by assuring ASD investors that “God” was on the company’s side.
Some MLMers were quick to accuse the government of targeting a fine Christian man who was helping the United States create jobs with a “program” that purported to pay participants back 100 percent of their investment and a profit of 25 percent in only months. (Ten-thousand dollars in ASD purportedly fetched $12,500 within 90 to 125 days, purportedly more if members “compounded” their “earnings,” kept 80 percent of their money in a continuous state of “roll over” and never fully cashed out.)
Essentially there was only one chance that ASD was not a Ponzi scheme during its approximately 18-month run — and that single chance required nearly a complete suspension of logic to destroy the government’s Ponzi case and get ASD off the hook: Had a crazy billionaire or exceptionally well-heeled financier (who also was crazy) given convicted-felon Bowdoin more money than ASD’s rapidly accruing liabilities — basically an enormous line of credit that didn’t have to be paid back and could be tapped on demand for ASD to pay out $1.25 for every dollar it took in until the line was exhausted — ASD would not have been a Ponzi scheme. Absent a benevolent madman-billionaire and the kind of capital it would take to build a nuclear-power plant and operate it indefinitely with zero concern for profit, however, ASD could be one thing and one thing only: a Ponzi scheme using money from “new” members to fund the redemption requests of “old” members or a Ponzi scheme that sustained itself by simply recycling money among members of a closed group.
No madmen-billionaires sufficiently liquid to bankrupt themselves by funding Bowdoin’s stated plan of creating 100,000 ASD millionaires in three years while at once financing the “profits” of tens of thousands of average people seeking to expand the ranks of ASD millionaires well beyond 100,000 appeared to testify on ASD’s behalf at an evidentiary hearing it requested in the fall of 2008.
Here is just one of the reasons MLM has a miserable reputation: Notwithstanding the fact that Bowdoin already was a convicted felon for an Alabama securities swindle in the 1990s and that one of his business partners was a man implicated by the SEC in the 1990s in three prime-bank swindles, some MLMers decided to improve the already bizarre narrative that the government was picking on a grandfatherly Christian.
Petitions were started to paint prosecutors as the bogeymen. (The shorthand for this in MLM’s HYIP Ponzi land is “evilGUBment.”) ASD critics were derided as “maggots.” A “prayer” went out calling for prosecutors to be struck dead from the heavens. A theory was advanced that a Florida TV station should be charged with Deceptive Trade Practices for carrying news unflattering to ASD. A companion theory held that the Attorney General of Florida should be charged with the same offense and that AARP, which lobbies for senior citizens, should lobby for ASD. Meanwhile, some MLMers tried to enlist the U.S. Senate to turn the focus of the investigation away from ASD and Bowdoin and put it on the prosecutors who brought the Ponzi case. One MLMer called for the government’s lead prosecutor to be placed in a medieval torture rack, with ASD members at large drawing straws to determine who got the honor of making the prosecutor’s time in the rack as painful as possible.
Very few people in MLM had anything to say about the circus surrounding ASD. The few who did — perhaps most notably Rod Cook of MLM Watchdog — were excoriated for dismissing the narrative advanced by Bowdoin and other MLMers. All of this was occurring while ASD was provably insolvent. When Bowdoin failed to take the witness stand at the evidentiary hearing he requested, it was explained that he was “too honest” to testify. Both before and after the hearing, some of his most notable Stepfordian apologists advanced a theory that the government secretly had admitted ASD was not a Ponzi scheme and was clinging to the case in a bid to save face.
One ASD member advanced a narrative that the government had taken about $80 million in seized proceeds and invested it in a secret fund to pay for black-ops. It was from this caldron of conspiracy theories and fantastic idiocy that Kenneth Wayne Leaming emerged.
Like other “sovereigns,” Leaming to date hasn’t focused much of his attention on the actual charges against him, even though his conviction could result in considerable jail time. Rather, Leaming mostly has focused on creating a blitz of paperwork on the apparent theory his best “defense” is to keep the Feds and even local officials scurrying to guard all flanks. Since his November 2011 arrest by an FBI Terrorism Task Force, Leaming has sued the President of the United States, the Attorney General of the United States, various officials (including purported “Does”) and a county sheriff in Arkansas.
Members of Zeek Rewards and other MLM schemes should pay attention to the Leaming trial. There can be no doubt that Leaming-like figures existed within the Zeek enterprise. Like ASD before it, Zeek was a magnet to willfully blind MLM hucksters and actual criminals. Both “businesses” best are viewed as racketeering enterprises that posed an untenable risk to the United States and the rest of the world.
For the remainder of this column, the PP Blog will focus on just one crime alleged against Leaming: the filing of a false lien against the U.S. Secret Service agent — not that the other alleged bogus liens are any more palatable or acceptable. The word “disgraceful” hardly covers Leaming’s alleged actions, and yet some MLMers saw Leaming not only as an inspirational figure, but as the wisest man of all.
The Secret Service guards the lives of the President of the United States and the Vice President of the United States and their families. It also guards the lives of former Presidents and international dignitaries and political figures visiting the United States. As the agency is doing this, it also protects the U.S. financial system.
It is unthinkable — so far beyond the pale that it almost defies description — that Leaming, let alone any other American, ever would target a Secret Service agent in a harassment campaign. The Secret Service is a smallish agency by federal standards, yet it is arguably the most important: Markets become unglued when world figures are assassinated or targeted in assassination attempts. Beyond that, history now has shown that an event such as the 9/11 terrorist attacks actually can close markets and restrict freedom, the very things Leaming purports to be upholding.
People of good will are appalled that Leaming apparently thought it somehow his duty to Democracy and Constitutional government to harass a Secret Service agent. Given the critical duties of the Secret Service and its role in both national security and economic security, no American of good will wants to see an agent’s attention divided by the Kenneth Wayne Leamings of the nation and world.
If Leaming is convicted, he should be sentenced to the longest jail term permissible under the law. Never again should MLM or any MLMer stay silent when an obvious fraud scheme surfaces and is “defended” at the exclusion of all logic.
In both form and substance, Zeek was virtually identical to ASD — and yet ASD members and other MLMers joined Zeek. That’s a problem for MLM. whether it admits it or not.
Those ASD members who joined Zeek? They did so even as Kenneth Wayne Leaming allegedly was targeting public officials, including a U.S. Secret Service agent, in campaigns designed to destroy the thin blue line that protects citizens from anarchy. The most dangerous Zeek members are the ones who hoped he’d succeed.
On Feb. 13, the PP Blog reported that a federal judge who was quoting from a pleading by AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming had referenced a domain styled peoplestrust1776.org.
U.S. District Judge Ronald B. Leighton declared Leaming’s filing, which apparently cited the Uniform Commercial Code (UCC), “undecipherable.” The judge exempted prosecutors from responding to a series of recent bizarre pleadings from Leaming, who is jailed near Seattle on charges of filing false liens against public officials in the AdSurfDaily Ponzi case. Leaming, 57, also is accused of other crimes.
Like other purported “sovereigns,” the judge observed, Leaming is “fascinated” by capital letters.
Some “sovereign citizens” appear to believe that pleadings that include capital letters or make UCC claims provide defenses or remedies for everything from murder charges to charges of targeting public officials in harassment campaigns.
Less than two days after the PP Blog published its most recent story about Leaming’s strange defense efforts in the Western District of Washington, the Blog received a would-be comment it is treating as spam because it purported to be in response to a reader who left a comment on the PP Blog nearly two years ago on a different subject. Received at 2:55 a.m. ET today, the unpublished, would-be comment included a link to a post on a Blog whose URL was formed in part with the words “the-full-details-of-kidnapping-of.”
One had to visit the site to determine who allegedly was kidnapped.
The PP Blog visited the link and found a post about Patrick Cody Morgan, a purported Texas “sovereign” who was convicted last year of conspiracy and nine counts of bank fraud in a real-estate swindle involving repeated bids to scam residential mortgage lenders and FDIC-insured banks between 2004 and 2007. The scam involved “trust accounts” and “straw buyers,” prosecutors said. The PP Blog wrote about the Morgan convictions on Nov. 2, 2012. No readers left comments in the thread below the story.
In any event, the would-be commentator apparently wants to generate discussion about the Morgan case and to enlist support for Morgan. Notably, the spammed link received by the PP Blog includes references to the same peoplestrust1776.org domain Leaming cited in an apparent defense bid in his criminal case.
Content on the site whose post link was spammed to the PP Blog overnight appears to be designed to paint government officials or agencies involved in the Morgan case as “the Accused.” Apparently among the purported “Accused” are U.S. Attorney General Eric Holder, FBI Director Robert Mueller, U.S. District Judge Lynn N. Hughes of the Southern District of Texas and others. The site also published florid legalese attributed to Morgan that, like Leaming’s prose, made liberal use of capital letters.
Legalese attributed to Morgan asserts he is “Patrick-Cody: Family of Morgan”; Leaming’s legalese asserts he is “Kenneth Wayne, born free to the family Leaming.”
Some “sovereigns” appear to believe that using exceptionally formal prose, capital letters and/or specific forms of punctuation in court filings somehow provide for a winning defense.
Leighton characterized Leaming’s prose as “gobbledygook.”
Morgan — in his apparent defense — appears to claim he was the victim of criminals working for the government. Leaming has made similar arguments in Washington state.
Precisely what role, if any, peoplestrust1776.org is playing in the Morgan and Leaming cases is unclear.
ProfitClicking has had trouble since it evolved from the carcass of JSSTripler/JustBeeenPaid last year.
Back in June 2012 — when the “program” later to become “ProfitClicking” still was known as JSS Tripler/JustBeenPaid — a member told JSS/JBP operator Frederick Mann that she was arranging a sea cruise on Carnival Cruise Lines “out of Galveston, Texas” during the last week of January and the first week of February of this year.
It would not have been the first time members of a Ponzi scheme got together on a ship at sea to talk up a “program.” Members of the AdViewGlobal autosurf, which federal prosecutors later linked to the AdSurfDaily Ponzi scheme, reportedly advanced the AVG scam on the high seas in 2009.
Whether the JSS/JBP sea cruise ever came off is unknown. What is known is that the Carnival Triumph, whose home port is Galveston, has caused an epic PR disaster for the famous cruise line. The ship experienced an engine-room fire on Sunday, after departing Galveston Feb. 7, the company said.
A passenger on a recent cruise aboard the Triumph told CBS News that the ship had trouble on Jan. 28 as it was preparing to leave Galveston.
If JSS/JBP-related trip announced last year went ahead as planned, some JSS/JBP (now ProfitClicking) members could have been on the ship during the trip immediately prior to the disastrous cruise. Or if the trip was delayed by a week, they could have been aboard when the engine room caught fire.
Just how disastrous was the trip?
Well, no one was killed. Even so, passengers described the excursion as a venture into hell on the high seas. The fire crippled the ship at sea. A CBS reporter described the vessel as “the makings of a floating biohazard” because the Triumph’s toilets and waste systems were not working.
Fox News, meanwhile, cited reports of “vile conditions onboard” and used the phrase “shanty town.” Passengers were forced to live on the deck because of filthy conditions inside the ship.
With the aid of tug boats, the crippled Triumph arrived in Mobile, Ala., late last night.
The U.S. Coast Guard and the National Transportation Safety Board have launched probes.
Even if JSS/JBP/ProfitClicking members weren’t on board, there are reports of ongoing, major problems with their “opportunity,” which purported to pay 2 percent a day.
If they were on board, they got the double-whammy.
“The Court therefore feels some measure of responsibility to inform [Kenneth Wayne Leaming] that all the fancy legal-sounding things he has read on the internet are make-believe. Defendant can call himself a ‘public minister’ and ‘private attorney general,’ he may file ‘mandatory judicial notices’ citing all his favorite websites, he can even address mail to the ‘Washington Republic.’ But at the end of the day, while sovereign citizens and Defendant cite things like ‘Universal Law Ordinances,’ they are subject to both state and federal laws, just like everyone else.” — U.S. District Judge Ronald B. Leighton, Feb. 12, 2013
Kenneth Wayne Leaming
A federal judge in the Western District of Washington has issued an order exempting prosecutors from responding to wild assertions made by AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming.
Like other purported “sovereigns,” Leaming is “fascinated by capitalization,” Judge Ronald B. Leighton said in the Feb. 12 order.
In a recent filing, the judge said, Leaming used the word “REGISTRY” in all uppercase in a pleading that was “undecipherable.” On at least five occasions during the course of the case, Leaming has filed documents that used the phrase “Mandatory Judicial Notice,” including one in which Leaming asserts he “relies in good faith on the public/commercial REGISTRY entries as published at
www.peoplestrust1776.org, inclusive of Universal Law Ordinance, UCC #2012096074 . . . .” the judge said.
“For lack of a better term, this is gobbledygook,” the judge said.
Leaming also recently argued that “the REGISTERED FACTS appearing in the above Paragraph evidence the uncontroverted and uncontrovertible FACTS that the SLAVERY SYSTEMS operated in the names UNITED STATES, United States, UNITED STATES OF AMERICA, and United States of America . . . are terminated nunc pro tunc by public policy, U.C.C. 1-103 . . . .,” according to the judge.
“He appears to believe that by capitalizing ‘United States,’ he is referring to a different entity than the federal government,” the judge said. “For better or for worse, it’s the same country.”
And Leighton quoted again from Leaming’s filings:
“COMES NOW, Kenneth Wayne, born free to the family Leaming, 20 December 1955, constituent to The People of the State of Washington constituted 1878 and admitted to the union 22 February 1889 by Act of Congress, a Man, ‘State of Body’ competent to be a witness and having First Hand Knowledge of The FACTS . . . .”
Purported sovereign citizens, “like Mr. Leaming, love grandiose legalese,” the judge said, ordering that “no response is required by the Government.”
Leaming, 57, is detained near Seattle on charges of filing false liens against government officials involved in the ASD Ponzi case. He also is accused of other crimes, including harboring fugitives, assisting others in the filing of false liens, being a felon in possession of firearms and attempting to pass a bogus “Bonded Promissory Note” for $1 million. He was arrested in November 2011 by an FBI Terrorism Task Force.
“Sovereigns” have been known to engage in what has been described as “paper terrorism” to try to hamstring law enforcement. Some “sovereigns” have been linked to various forms of securities fraud and tax fraud.
On Sept. 5, 2012, the PP Blog reported that an “opportunity” known as “Wealth Creation Alliance” was using a strange mix of capital letters in its communications with prospects. Whether WCA has any “sovereign” ties is unknown.
EDITOR’S NOTE: This post originally was published Jan. 24 at 7:33 p.m. It was updated Feb. 8 to include this editor’s note reflecting that Andy Bowdoin now is listed as an inmate at the federal prison camp in Pensacola, Fla. (Pensacola FPC.) The original story published Jan. 24 appears below and includes some edits to reflect the latest information . . .
** ____________________________________ **
UPDATED 9:08 A.M. ET (JAN. 27, U.S.A.) Thomas Anderson “Andy” Bowdoin, the 78-year-old AdSurfDaily Ponzi patriarch, is listed today as an inmate at the Federal Correctional Institution in Tallahassee. His estimated release date is Feb. 7, 2018. [New on Feb. 8: Bowoin has been transferred to Pensacola FPC.)
In August 2008 — after federal prosecutors in the District of Columbia initially filed civil allegations of Ponzi fraud against Bowdoin and ASD after an investigation by the U.S. Secret Service — Bowdoin was defiant. The government was “Satan,” he claimed. And he compared the Secret Service to the 9/11 terrorists.
Bowdoin was described as a head of a “flock,” a man who had “followers.” What transpired in the years that followed was the stuff of fiction — but it was very, very real. After initially demanding an evidentiary hearing and insisting ASD’s online “program” was not a Ponzi scheme, Bowdoin did not take the stand at the hearing he requested.
He was “too honest” to testify, explained one of his followers.
Prosecutors had a different take: Bowdoin, they said, was a recidivist securities swindler with a felony record in Alabama from a previous fraud scheme in the 1990s. One of his business partners also was a veteran swindler who once pushed “prime bank” frauds, according to court filings.
Other Bowdoin followers planted stories that prosecutors secretly had admitted ASD was not a Ponzi scheme but were clinging to the case in a bid to save face. One follower ventured that a prosecutor should be placed in a medieval torture rack. Another ventured that a “militia” should storm Washington.
In the bizarre world of ASD, there were efforts to enlist public support for Bowdoin by mailing packets of Kool-Aid to Fox News host Bill O’Reilly. There was a corresponding effort to enlist support for an investigation into a Florida TV station, apparently for having the temerity to cover negative news about ASD. Some of Bowdoin’s followers also wanted to investigate then-Florida Attorney General Bill McCollum, apparently for holding the view that ASD was a pyramid scheme.
On Sept. 11, 2008, the seventh anniversary of the 9/11 attacks, some Bowdoin followers prayed for the prosecution to be struck dead.
By July 2010, purported “sovereign citizen” Kenneth Wayne Leaming had entered the ASD fray. He is now jailed near Seattle on charges of filing false liens against at least five federal officials involved in the ASD case: a federal judge, three federal prosecutors and the Secret Service agent who did the early investigative legwork in the case. Leaming, according to court filings, was harboring two federal fugitives from Arkansas, had tried to pass a bogus “Bonded Promissory Note” for $1 million and assisted in the filing of false liens against other federal officials in cases presumably unrelated to ASD.
Leaming, prosecutors said, was instrumental in the founding of the so-called “County Rangers,” an armed enforcement wing for a “sovereign” group in Washington state. The “Rangers” carried fake badges, according to court filings. And when Leaming, a convicted felon, was arrested in November 2011 by an FBI Terrorism Task Force on the false-liens charges, several firearms were found.
One of them was an “AK-47 style assault rifle with a bayonet,” according to court filings.
Bowdoin was charged criminally in November 2010, when an indictment was unsealed. By October 2011, Bowdoin was trying to sell a “program” known as OneX to the members he was accused of defrauding in the ASD case. Conference-call listeners were told they could earn $99,000 very quickly through OneX, which federal prosecutors later described as yet another fraud scheme pushed by Bowdoin.
In May 2012, Bowdoin pleaded guilty to wire fraud, acknowledging that ASD was a Ponzi scheme and that his Florida-based firm had never operated lawfully from its inception in 2006.
Even after Bowdoin pleaded guilty, some of his followers continued to insist that ASD was a legitimate business. Bowdoin was jailed in June 2012, after prosecutors proffered evidence that he continued to promote fraud schemes even after the Secret Service seized $80 million in the ASD case and even after he was charged criminally.
Bowdoin spent the early days of his sentence in a District of Columbia jail. Earlier this month, he was listed as a prisoner at a federal holding facility in Oklahoma City.
And today he apparently has arrived in Tallahassee to serve out the remainder of his 78-month term. [New on Feb. 8: Bowdoin has been transferred to Pensacola FPC.) The prison is only a short [Feb. 8 edit: roughly two-and-a-half hour] drive from Quincy, the town from which Bowdoin pulled off a $119 million Internet fraud.
BULLETIN: (UPDATED 4:38 P.M. EDT U.S.A.) A federal grand jury in the Western District of Washington has returned a superseding indictment against AdSurfDaily figure and purported “sovereign citizen” Kenneth Wayne Leaming.
It is the second superseding indictment against Leaming. The first was filed in 2012.
The new indictment was returned yesterday, a day after the White House and the Justice Department referenced “sovereign citizens” in a policy announcement that pointed to an FBI site that defined “sovereign citizens” as “anti-government extremists who believe that even though they physically reside in this country, they are separate or ‘sovereign’ from the United States. As a result, they believe they don’t have to answer to any government authority, including courts, taxing entities, motor vehicle departments, or law enforcement.”
Leaming is 57. His alleged onetime business colleague David Carroll Stephenson, 57, also is named in the superseding indictment. The indictment formally accuses Leaming of filing false liens against a federal judge, two former federal prosecutors and a U.S. Secret Service agent who had roles in the ASD Ponzi case. The liens were filed in August 2010 and November 2010, according to the indictment.
Meanwhile, the indictment accuses Leaming and Stephenson of filing false liens against two U.S. prison officials in July 2011.
Leaming, meanwhile, was further accused of harboring two federal fugitives in 2010 and of being a felon in possession of six firearms.
At the same time, the indictment accuses Leaming of passing a bogus “Bonded Promissory Note” for $1 million in March 2008, in a bid to defraud the United States.
Leaming and Stephenson are being held at the SeaTac federal detention center near Seattle.
ASD was a $119 million Ponzi scheme brought down by the Secret Service in August 2008. Leaming reportedly was performing legal work for some ASD members, even though he is not an attorney.
Leaming was arrested in Spanaway, Wash., by an FBI terrorism Task Force in November 2011. He has been jailed since then. Stephenson already was serving a federal sentence for a tax crime when Leaming was arrested.
Leaming has an existing federal felony conviction for piloting an aircraft without a license.
A YouTube video apparently in support of “Project GreenLife” superimposes an image of FDA Commissioner Dr. Margaret Hamburg against the backdrop of a height chart — an apparent bid to suggest that Hamburg should be booked at a police station.
The PP Blog first told you about “Miracle Mineral Supplement,” also known as “Miracle Mineral Solution” or MMS, in August 2010. The FDA warned that serious harm could come to human beings who consumed it, saying MMS produced industrial bleach when used as directed.
“Multiple independent distributors” sold the product online, the FDA said.
Now, the U.S. Department of Justice has announced that four people — two from Oregon and two from Washington state — have been charged criminally.
Named defendants were Louis Daniel Smith, 42, and Karis Delong, 38, both of Ashland, Ore. Also charged were Chris Olson, 49, and Tammy Olson, 50, of Nine Mile Falls, Wash.
“Our most vulnerable citizens need real medicine — not dangerous chemicals peddled by modern-day snake oil salesmen,” said Stuart F. Delery, principal deputy assistant Attorney General for the Justice Department’s Civil Division.
Smith and Delong operated a business known as “Project GreenLife” or PGL, the Justice Department said.
A dissolved Nevada corporation known as PGL International LLC lists “Daniel Smith” as its managing member. A website styled ProjectGreenLife.com now appears to be parked at GoDaddy. Meanwhile, there are references online to ProjectGreenLife purportedly having been a “1st and 14th Amendment Private Membership Association.”
At least one website that makes the claim makes a companion claim that Daniel Smith used “the help and counsel of the ProAdvocate Group” when contacting the FDA about MMS-related matters. “Daniel based his inquiry on a good-faith understanding of U.S. Supreme Court case law as it pertained to the activities of a private association,” the site claims. “Daniel told the FDA unless they objected within ten days he would assume they had no objection.”
Pro Advocate Group reportedly was the Texas-based entity that assisted the AdViewGlobal HYIP scam form a “private association” in 2009 in which AVG appears to have tried to insulate itself from examination by the U.S. government by purporting to operate from Uruguay. In April 2012, federal prosecutors in the District of Columbia linked AVG to the $119 million Ponzi scheme operated by Andy Bowdoin of AdSurfDaily.
Along with hawking purported private associations, Pro Advocate Group claims on its website that it offers “Pro Se Litigation with Super Appeal” and other services.
A Justice Department news release yesterday on the charges flowing from Project GreenLife and the sale of MMS did not reference Pro Advocate Group.
Smith, Delong and Tammy Olson were charged with one count of conspiracy, four counts of interstate sales of misbranded drugs and one count of smuggling. Chris Olson was charged with one count of conspiracy, one count of the interstate sale of a misbranded drug and one count of smuggling.
The Justice Department said that “PGL provided consumers directions to combine MMS with citric acid to create Chlorine Dioxide, and the instructions told consumers to drink this mixture to cure numerous illnesses. Chlorine Dioxide is a potent agent used to bleach textiles, among other industrial applications. In humans, Chlorine Dioxide is a severe respiratory and eye irritant that can cause nausea, diarrhea and dehydration.”
Research by the PP Blog shows that Daniel Smith apparently has supporters who’ve issued an appeal to “Please take a stand to help save MMS and Daniel Smith from the FDA.” A headline for video on the site describes the FDA as a “Cult of Tryanny.” A narrator describes the FDA as a “rogue agency” and superimposes the images of FDA Commissioner Margaret A. Hamburg and others against the backdrop of a height chart. It appears to be a ham-handed way to suggest that Hamburg and the other purported “rogues” should be booked at a police station.
From the Justice Department statement (italics added):
As part of the scheme to manufacture MMS, the indictment alleges that Smith, Delong, and others smuggled sodium chlorite into the United States from Canada using fraudulent invoices to hide the true end use of the product. In these invoices, according to the indictment, they falsely claimed that the ingredients they were purchasing for MMS were to be used in wastewater treatment facilities.
According to the charging documents, Smith and Delong were the managing members of PGL Smith co-founded the company, and Delong frequently handled financial transactions for the company and recruited friends and family to participate in the business. The indictment alleges that Smith and Delong paid Tammy Olson to handle all customer inquiries regarding the product. It is alleged that Tammy Olson continued selling MMS on her own website after federal agents shut down the Project GreenLife website and production facilities.
The indictment also alleges that Smith and Delong paid Chris Olson to clandestinely manufacture MMS in a building on his property after regulators from the Food and Drug Administration (FDA) inspected PGL’s original manufacture and shipping locations.
CNBC’s “American Greed” will be in Minneapolis today to begin filming an episode on the massive Trevor Cook Ponzi scheme that was targeted at senior citizens and conservative Christians and rendered some victims penniless, a source told the PP Blog.
Cook’s scheme gathered about $194 million. It collapsed in 2009. Money that potentially could go to victims is still missing. The scheme was reminiscent of the AdSurfDaily Ponzi case in that it took various bizarre and disturbing turns.
Earlier this month, Cook pitchman Jason Bo-Alan Beckman was sentenced to 30 years in federal prison. Gerald Durand received 20 years. Christopher Pettengill, who cooperated with prosecutors, received a 90-month sentence. Sentencing for Pat Kiley, a conspiracy theorist and former radio host in his seventies, was put on hold, pending the results of medical and psychological exams.
Cook, the ringleader, received a 25-year sentence in 2010.
For what the Cook fraud lacked in dollar volume — indeed, it was significantly smaller than Tom Petters’ epic Ponzi fraud in Minnesota — it more than made up for in pure brazenness. Beckman essentially was accused of taunting victims in his court filings after stealing millions from a senior-citizen couple in their late eighties. Durand told a tale about a submersible submarine Cook allegedly bought on eBay for the waters of Canada before moving it to Panama, where Cook purportedly found the conditions to be more sub-friendly.
Kiley once tried to have a CFTC lawyer fined $1,000 for filing court papers Kiley deemed “offensive.”
The Cook scheme also had something in common with AdViewGlobal, the collapsed 1-percent-a-day autosurf linked to the AdSurfDaily Ponzi scheme: a tie to offshore facilitator KINGZ Capital Management Corp.
AdViewGlobal collapsed during the summer of 2009, amid reports that millions of dollars had been stolen. The purported “opportunity” bizarrely declared itself a “private association” operating in Uruguay, apparently in a bid to evade U.S. regulatory scrutiny even though it was conducting business in the United States. Federal prosecutors tied ASD President Andy Bowdoin to AdViewGlobal in 2012. Bowdoin, now serving a 78-month prison sentence, once claimed that prosecutors were “Satan” and compared the U.S. Secret Service to the 9/11 terrorists. His scheme gathered at least $119 million.
Prosecutors have evidence that suggests at least some of the AdViewGlobal money was deposited in Switzerland. The Cook Ponzi also did business in Switzerland.
There also is a tie between Trevor Cook and Peregrine Financial Group Inc., the collapsed fraud scheme of Russell R. Wasendorf Sr., now facing up to 50 years in federal prison. Wasendorf once was a member of NFA’s Futures Commission Merchant Advisory Committee
Peregrine consumed at least $215 million and conducted a scam for two decades, prosecutors said. “[I]n order for the fraud to be effective and sustainable for years, defendant routinely created and used false certifications and forged documents to deceive his customers, his accounting department, his fellow corporate officers, an outside auditor, and multiple regulatory agencies whose core function was to detect and prevent exactly the type of criminal activity defendant perpetrated,” prosecutors said of Wasendorf.
The website of “NewGNI” has not resolved to a server for days. The “program” is believed to have been a knockoff of a predecessor scam known as “GNI” or GoldNuggetInvest, which collapsed in early 2010 after being promoted by members of the AdSurfDaily Ponzi scheme.
