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As Was Case With DFRF Enterprises And Rojo Filho, YouTube Promos Played Role In Criminal Ponzi Prosecution Of The Achieve Community’s Troy Barnes

From a 2014 YouTube promo for The Achieve Community. Authorship is unclear.

Still promoting your securities scam on YouTube?

As the PP Blog reported on Oct. 3, YouTube promos for the alleged DFRF Enterprises’ Ponzi scheme were cited in two of three wire-fraud counts against accused operator Daniel Fernandes Rojo Filho. Filho, allegedly at the helm of a fraud that gathered tens of millions of dollars, has been in federal custody since his July 21 arrest in Boca Raton, Fla.

The office of U.S. Attorney Carmen Ortiz of the District of Massachusetts is prosecuting the Filho criminal case, and the SEC simultaneously is prosecuting a civil case. The SEC has warned for years about securities scams spreading on social media.

It turns out that YouTube videos also are playing a role in the criminal prosecution for wire fraud and wire-fraud conspiracy of Troy Barnes of The Achieve Community — or TAC. That prosecution was announced Nov. 3 by the office of U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

Among other things, the indictment against Barnes alleges that “YouTube communications” played a role in duping Achieve participants and therefore constituted part of a wire-fraud conspiracy.

Barnes, 53, resided in Riverview, Mich. He is free on bond, pending trial. In addition to the conspiracy count against him, Barnes also faces three counts of wire fraud for three transactions in 2014 involving the purchase of Achieve “positions” by victims, according to the indictment.

“By the time the scheme collapsed in February 2015, the conspirators had defrauded over 10,000 investors in the Charlotte-area and worldwide, and owed victim-investors at least $51 million in purported investment returns, yet only had available approximately $2.6 million,” prosecutors said. “According to court records, over the course of the scheme, Barnes used over $140,000 of the victims’ money for his own enrichment.”

Barnes co-conspirator was Kristi Johnson, 60, who resided in Aurora, Colo., prosecutors said. She has already pleaded guilty to wire-fraud conspiracy and is scheduled for sentencing Nov. 19, before U.S. District Judge Max O. Cogburn Jr.

Achieve offered a 700 percent ROI, according to the SEC and federal prosecutors. Barnes and Johnson also face a civil action by the SEC.

In December 2014, the PP Blog reported that Achieve boosters parroting each other were circulating a YouTube promo that read, “We are not investing in a stock or buying shares in a company. We are using our God given universal right to spend our money the way we want. We choose not to sell out to the banking system for their tiny little 1% annual return.”

Said Rose’s office on Tuesday: “According to court filings, as the scheme grew in size and scope, Barnes and his conspirators concealed the true nature of the scheme through multiple misrepresentations. According to court records, when the conspirators became concerned that the use of the term ‘investment’ would draw scrutiny from regulators, they instructed victim-investors that ‘We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.’”

Scammers from AdSurfDaily in 2008 tried the same tactic. It backfired, as it later would do with Achieve and other “programs,” including Zeek Rewards.

Among other things, Achieve claimed $50 turned into $400. The U.S. Secret Service brought the Achieve criminal case and the ASD prosecution. ASD was a 1-percent-a-day “program.”

The PP Blog’s Achieve coverage received a mention Nov. 3 in the Charlotte Observer. See the Blog’s archive of Achieve Community references.

UPDATE 7:22 P.M. ET U.S.A. Scheduled for sentencing Nov. 19, Kristi Johnson today asked the court for a sentencing delay. Specifics were filed under seal. This is from a motion on the public record (italics added):

1. Pursuant to Local Rule of Criminal Procedure 55.1, Ms. Johnson respectfully requests this Court to seal the Joint Motion to Continue Sentencing because it contains sensitive information regarding a criminal investigation.

2. Public dissemination of the Joint Motion to Continue Sentencing may interfere with the administration of justice. Therefore, there is good cause for the Court to seal said motion.

NOTE: Our thanks to the ASD Updates Blog.

Nov 5, 2015
MyAdvertisingPays Pulls Out Of America, Leaving U.S. Affiliates In The Lurch; Cross-Border Scheme Alleges Libel, Defamation

From PP Blog archives: On April 2, a video depicting President Obama as a fan of the MyAdvertisingPays “program” appeared on YouTube. An “Obama voice” was dubbed into the video, which also shows the Presidential Seal. Text below the video reads, “Mr. President speaks about the new advertising revolution.”

EDITORIAL: In April 2015, the PP Blog reported that a promo on YouTube put words in the mouth of President Obama and depicted him as a pitchman for MyAdvertisingPays, a cross-border scheme with promoters in common with the alleged Zeek Rewards and TelexFree Ponzi- and pyramid schemes.

“My AdvertisingPays pays its members every 20 minutes,” a mimicked voice of Obama said in the promo. “I highly recommend you to join MyAdvertisingPays.”

Like many things in network marketing, this was reckless beyond measure. MAPS, as it is known, is reminiscent of the AdSurfDaily Ponzi scheme broken up by the U.S. Secret Service in 2008. ASD, sued by some of its own members amid allegations of racketeering and described by the Secret Service as a “criminal enterprise,” thought it prudent to trade on the name of President George W. Bush to drive dollars to its $119 million scam.

It proved to be very imprudent for ASD to suggest a White House vetting and endorsement. The indictment against ASD operator Andy Bowdoin even referenced the bid to dupe members and prospects in this fashion . (Also see: “THE DAY ‘WINK-NOD’ DIED,” from the PP Blog on Dec. 2, 2010.)

MAPS Suddenly Says It Is Withdrawing From United States

After one or more MAPS’ promoters lifted footage of a Presidential address and used technology to put words in Obama’s mouth to help an MLM scheme spread its tentacles, it now has come to pass that MAPS — purportedly led by American Mike Deese of Mississippi via Anguilla, a British overseas territory — says it is pulling out of the United States.

In an announcement dated yesterday and titled “THE MOST IMPORTANT UPDATE EVER RELEASED,” MAPS more than hinted it is not wanted in America: “We are going to focus on the place where we are wanted and are making huge strides,” MAPS said.

That place is Europe, according to MAPS.

“The decision comes on the heels of a declining marketplace in the US for our company.,” MAPS said. “It simply isn’t profitable for us to remain engaged there. Over 90% of our business already comes from Europe, while we are catering to the US members by operating in US currency. It doesn’t make good business sense to continue operating in a place and expending valuable resources in a market that’s steadily declining.”

If MAPS is right — if it’s not wanted in America and if the U.S. market is steadily declining — we take this as good news that suggests MAPS perceives a serious threat from American law enforcement and class-action lawyers interested in suing under the federal RICO (racketeering) statute. Even so, it’s troubling that MAPS apparently sees a welcome mat for itself in Europe.

About 50,000 Spaniards reportedly got sucked into the TelexFree scheme. TelexFree pain, in fact, lingers across Europe and the world. It is possible that it affected 1 million people or more. MAPS currently brags that it has “209805+ Users.”

MAPS also is reminiscent of Banners Broker, another “advertising” program and a bizarre MLM “opportunity” ultimately described in Canada as a criminal enterprise. Among other things, Banners Broker thought it prudent to try to chill critics — like the Zeek Rewards, AdSurfDaily and AdViewGlobal schemes before it. (See Feb. 8, 2014, PP Blog story, “Banners Broker Cultists Rip Play From Zeek, AdSurfDaily, AdViewGlobal HYIP Scambook.”

Like the other “programs,” MAPS now is planting the seed it is lining up people to sue.

From the MAPS Oct. 15 announcement (italics added):

On a different note, it has come to our attention that there exist multiple internet-based avenues being used for defamatory and libelous speech against MAP. Through our research, we have found many, if not all, of these claims to be without merit and simply an attempt by certain individuals to exploit the MAP name in order to heighten the popularity of their own product. MAP has served demand letters upon those individuals who engage in defamatory and slanderous rhetoric, and in anticipation of litigation, has prepared complaints against all such individuals. MAP would like to emphasize and reassure you that their decision to cease operations in the United States is in no way connected to the aforementioned defamation and libel claims.

Oct 16, 2015
SHADES OF ZEEK: Prospective Class-Action Defendant Tells Judge TelexFree Was Operating A Tax Scam

In October 2014, federal prosecutors alleged that the Zeek Rewards MLM “program” shut down by the SEC two years earlier was in part a scam that caused “victim-investors to file inaccurate tax returns for phantom income they never actually received.”

Now, a year later, a member of the TelexFree MLM scheme shut down by the SEC and other agencies last year is telling a federal judge that it appears TelexFree engaged in accounting fraud that caused him to pay taxes on income he never actually received.

The claim was made in an Oct. 7 defense filing by Daniil Shoyfer, whom private plaintiffs want to make the lead defendant in a class-action case that effectively would sue Shoyfer and 20,000 other alleged TelexFree net winners believed to have collected money directly from recruits.

Unlike Zeek’s Paul Burks and Dawn Wright-Olivares, alleged TelexFree operators James Merrill and Carlos Wanzeler have not been charged criminally with tax offenses. But the assertion by Shoyfer gives rise to questions about whether they and others could be as the federal probe of the enterprise continues. Merrill and Wanzeler currently face charges of wire fraud.

Shoyfer, through attorneys from two Boston law firms, says U.S. District Judge Timothy S. Hillman should not permit the plaintiffs to amend the complaint to make him the class-representative. He further contends that “TelexFree has engaged in what appears to be fraudulent accounting practices intending to show that it paid Mr. Shoyfer in excess of $750,000 – however this is simply false.”

“Although TelexFree credited Mr. Shoyfer with large amounts to his TelexFree account, he never withdrew or had access to the vast majority of these funds,” he contended through counsel.

Shoyfer did not identify who might have helped TelexFree hatch a bogus accounting scheme. The SEC, in 2014, charged former TelexFree CFO Joseph H. Craft of Boonville, Ind., with securities fraud. Craft is an accountant. In its civil complaint, the SEC alleged Craft “has been the chief financial officer of other multi-level marketing companies” in addition to his work for TelexFree.

From Shoyfer’s argument (italics added/light editing performed):

Mr. Shoyfer worked with TelexFree from March of 2013 through April of 2014 . . . Over the course of those thirteen months, Mr. Shoyfer received a total of $122,000 from TelexFree . . . However, Shoyfer also spent many thousands of dollars in expenses in order to make this money from TelexFree . . . Mr. Shoyfer estimates that he paid nearly $60,000 to TelexFree in order to be a part of the MLM (including dozens of purchases of the $1,425 AdCentral Family packages, . . . plus other expenses . . . Contrary to the allegations in the proposed amended complaint, Shoyfer never earned $300,000 per week . . . Mr. Shoyfer cannot afford to be the class representative in this lawsuit: it would almost certainly bankrupt him (again), and it would work an immeasurable hardship on his wife, his daughter, his unborn daughter, his two sons, his father, his sister and others that depend on him.

The argument describes Shoyfer as a teenager when he fled the Soviet Union for America years ago with his mother to escape “persecution because of their Jewish heritage.”

Living in the United States, Shoyfer, now believed to be in his forties, eventually became a full-time occupational therapist who started a staffing business in that profession and also dabbled in MLM, according to the argument.

Shoyfer asserts that he believed TelexFree to be legitimate.

“Prior to TelexFree closing down and being charged with fraudulent acts, Mr. Shoyfer had no knowledge that TelexFree was engaged in any unlawful, unfair, or improper practices,” his lawyers argued. “To the contrary, Mr. Shoyfer relied upon the statements of TelexFree’s officers and legal representatives that TelexFree was a fully legitimate and legal enterprise . . . Mr. Shoyfer had no reason to believe otherwise (nor did he) until TelexFree and its officers were charged.”

More from the argument (italics added/light editing performed):

The defense costs Mr. Shoyfer would have to absorb as the named defendant for the putative defendant class would easily exceed the amounts he received from TelexFree and he, therefore, has no incentive to pay the defense costs of being the named defendant . . . If a defendant class is certified, Mr. Shoyfer intends to opt out of the class . . . Mr. Shoyfer has no interest in being lumped together with 20,000 or so other defendants, some of whom may have known more than he did about TelexFree’s activities and the purported pyramid scheme, and some of whom liked caused Mr. Shoyfer to suffer damages himself.

The argument further contends Shoyfer is a good son and sibling who sends between $200 and $300 each month to both his father in Russia and his sister in Lithuania. He also has paid support of about $2,000 a month since 2008 for two children from his first marriage. Shoyfer now has a child with his second wife, with another child on the way.

In June 2015, The PP Blog reported that Shoyfer also was promoting a scheme known as MyAdvertisingPays — or MAPS, for short. MAPS resembles the AdSurfDaily Ponzi scheme, a $119 million fraud uncovered by the U.S. Secret Service in 2008.

Kenneth D. Bell, the Zeek receiver, has raised questions about MLMers moving from one fraud scheme to another.

NOTE: Our thanks to the ASD Updates Blog.

Oct 14, 2015
URGENT >> BULLETIN >> MOVING: Zeek Receiver Sues MLM Attorney Gerald Nehra

URGENT >> BULLETIN >> MOVING: (7th Update 8:33 p.m. EDT U.S.A.) The court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case has sued MLM attorney Gerald Nehra and his law firm and law partner.

Named defendants are Nehra as an individual and as a member of the Nehra and Waak law firm of Michigan, and Richard W. Waak. Like Nehra, Waak is named as an individual and as a member of the firm. The two lawyers’ individual professional LLCs also are named.

The 21-page complaint by Zeek receiver Kenneth D. Bell is dated Sept. 21 and alleges damages of at least $100 million. A section of the complaint quotes a July 22, 2012, email from Waak that reads, “I have primary responsibility for the Zeek Rewards account with our law firm.”

The SEC moved against Zeek a month later, in August 2012, alleging a massive Ponzi- and pyramid scheme. At least three Zeek executives, including alleged operator Paul R. Burks of North Carolina, later were charged criminally. Two of the executives — Dawn Wright-Olivares and her stepson Daniel Olivares — have pleaded guilty.

From the receiver’s complaint (italics added):

By virtue of their knowledge of [Zeek operator Rex Venture Group] and ZeekRewards and their legal expertise, Nehra and Waak knew or should have known that RVG was perpetrating an unlawful scheme which involved a pyramid scheme, an unregistered investment contract and a Ponzi scheme. Despite this knowledge, Nehra and Waak encouraged investors to participate in the scheme by knowingly allowing their names to be used in providing a false façade of legality and legitimacy and gave improper legal advice that allowed the scheme to continue far longer than it would have without the Defendants’ support. Nehra and Waak’s improper and negligent actions, which breached their fiduciary duties to RVG and assisted RVG’s Insiders to breach their fiduciary duties, caused significant damage to RVG.

Nehra and Waak also face the prospect of private litigation flowing from the alleged TelexFree Ponzi- and pyramid scheme.

In a complaint filed May 3, 2014, plaintiffs accused Nehra of counseling TelexFree “on methods to evade United States securities laws that were intended to offer, in part, protection from pyramid Ponzi schemes; all to enrich himself financially and serve his own selfish interests.”

He further was accused of encouraging unknowing TelexFree members to “participate in the evasion of federal and state securities laws.”

The Zeek receiver made similar claims against the lawyers.

“With their inside knowledge of multi-level marketing schemes and access to RVG’s Insiders, Nehra and Waak knew or should have known that insufficient income from the penny auction business was being made to pay the daily ‘profit share’ promised by ZeekRewards,” Bell alleged.

“The Defendants knew or should have known that the money used to fund ZeekRewards’ distributions to Affiliates came almost entirely from new participants rather than income from the Zeekler penny auctions. Further, based on their inside knowledge and access, Nehra and Waak knew or should have known that the alleged ‘profit percentage’ was nothing more than a number made up by Burks or one of the other Insiders. Rather than reflecting the typical variances that might be expected in a company’s profits, the alleged profits paid in ZeekRewards were remarkably consistent, falling nearly always between 1% and 2% on Monday through Thursday and between .5% and 1% on the weekends, Friday through Sunday.”

Nehra also was a figure in the 2008 AdSurfDaily Ponzi scheme story, opining that ASD was not a Ponzi scheme despite remarkably consistent returns. ASD operator Andy Bowdoin later pleaded guilty to wire fraud and acknowledged his company was a Ponzi scheme and never operated lawfully from its inception in 2006.

Like Bowdoin, Zeek’s Burks is accused of making up numbers to dupe participants. In TelexFree-related matters, class-action lawyers argued that “Attorney Nehra’s extensive experience in multi-level marketing, and particularly his involvement with the Ponzi schemes involving Ad SurfDaily and Zeek Rewards, armed him with the knowledge of what constitutes violations of United States securities law. Indeed, Attorney Nehra was well aware that the use of semantics and obscured phraseology to obfuscate securities laws fails to legitimize TelexFree’s illegal Pyramid Ponzi Scheme.”

Zeek receiver Bell accused Nehra and Waak of turning a “blind eye” to incredible claims by Zeek and of suggesting cosmetic changes to language instead of “recommending substantive changes that would make the program lawful.”

At least one alleged TelexFree promoter accused by the SEC last year of securities fraud has alleged she was duped by both the company and Nehra. That claim was made by veteran HYIP Ponzi pitchwoman Faith Sloan.

NOTE: Our thanks to the ASD Updates Blog.

Oct 9, 2015
SEC Declines Comment On ‘IntellaShares’ And Its Purported ‘BLACKLIST’; Ponzi-Board ‘Program’ Trades On Name Of Save The Children

IntellaShares reportedly is threatening members who file disputes — all while trading on the name of Save The Children. Photo source: 4/1/2015 screen shot from website of IntellaShares.

UPDATED 11:31 A.M. EDT U.S.A. In 2010, the Federal Trade Commission took action against an online venture known as iWorks. This allegation appeared on Page 7 of the FTC’s Dec. 21, 2010 complaint:

“They have also attempted to drive down their chargeback rates by threatening to report consumers who seek chargebacks to an Internet consumer blacklist they operate called ‘BadCustomer.com’ that will ‘result in member merchants blocking [the consumer] from making future purchases online!’”

BehindMLM.com is reporting today that a “program” known as “IntellaShares” appears to be threatening participants with entry on a “BLACKLIST.”

IntellaShares appears to have launched earlier this year and then experienced a prompt collapse. Despite this, the “program” claims on its website that it has or will donate $478 to the “Save The Children Foundation.”

It is unclear if IntellaShares actually was referring to Save the Children Federation Inc., the internationally prominent Connecticut charity that operates at SaveTheChildren.org.

BehindMLM has described IntellaShares as a “$2.50 micro Ponzi investment scheme.”

The “program” has a presence on well-known Ponzi-scheme forums such as MoneyMakerGroup. There are assertions of an imminent “relaunch.”

So far this year, the SEC has taken actions against two Ponzi-board “programs”: Achieve Community and Wings Network. In Congressional testimony on March 19, the agency said it is targeting scams that operate “under the guise of ‘multi-level marketing’ and ‘network marketing’ opportunities.”

Such scams may use social media such as forums, YouTube, Twitter and Facebook to target marks. Some may imply they are linked to a charity or perform good deeds with money sent in by participants.

In 2009, for instance, a Ponzi scheme known as AdViewGlobal purported to be involved in an effort to preserve the rain forest. AdViewGlobal, which was a knockoff of the 2008 AdSurfDaily Ponzi scheme, later disappeared.

Like IntellaShares, AdViewGlobal purported to be in the “advertising” business. It also had a presence on the Ponzi boards.

In 2011, a Ponzi-board “program” known as “Club Asteria” promised weekly payouts of up to 8 percent while trading on the name of the American Red Cross. During the same year, a TalkGoldPonzi forum promoter pitching both Club Asteria and a separate scam known as JSSTripler/JustBeenPaid (730 percent a year) claimed that filing disputes with payment processors meant that “all members will suffer.”

IntellaShares may be operating out of New York.

The SEC this morning declined to comment on IntellaShares. The FTC did not immediately respond to a request for comment.

Update 11:31 a.m. The FTC said this morning that it “hasn’t brought any enforcement actions involving IntellaShares.”

Whether it would remains an open question. The agency has an aggressive enforcement history when consumers end up on the receiving end of threats or are duped into joining work-at-home “programs.”

Apr 1, 2015
BULLETIN: Receiver Sues USHBB Inc., Maker Of Zeek Videos — And Ties Firm To AdSurfDaily Ponzi Scheme
9th UPDATE 9:01 P.M. EDT U.S.A. Indianapolis-based USHBB Inc. and three of its principals — James A. Moore, Robert Mecham and Oscar H. Brown — have been sued by the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case.

Receiver Kenneth D. Bell alleges USHBB, a producer of videos, also did work for the AdSurfDaily Ponzi scheme “and one or more other failed MLM operations.”

Though not referenced specifically in the complaint, one of those operations was “NarcThatCar,” a bizarre pyramid scheme that collapsed in 2010.

Bell raised concerns months ago that some MLMers or network marketers simply were proceeding from scheme to scheme to scheme. The receiver previously tied alleged Zeek winner Todd Disner to the ASD Ponzi scheme.

Not only did USHBB and its principals mine $676,848 from Zeek for producing videos and marketing materials that duped vast numbers of Zeek participants, Moore, Mecham and Brown piled up hundreds of thousands of dollars in illicit profits as Zeek affiliates, Bell charged.

Brown, better known as O.H. Brown, used “ushbb” as his Zeek affiliate name and amassed $168,642.70, Bell alleged.

Moore scored $109,130.64 under multiple usernames, including “geniweb” and “ttm,” Bell alleged.

Mecham piled up “at least $868,542.17 through his shell companies Five Star Marketing, LLC and The End Media, LLC, under multiple usernames, including ‘napier2’ and ‘theend,’” Bell alleged.

Moore resides in Indianapolis, according to the complaint. Mecham is a resident of Bountiful, Utah, and Brown lives in Mount Pleasant, S.C.

Mecham and Brown received transfers of $25,000 each from a Zeek “insider” in August 2012, the same month Zeek collapsed, according to the complaint.

Brown, according to the complaint, potentially knew that the SEC was looking at Zeek in June 2012 and dashed off a panicked email to Zeek executive Dawn Wright-Olivares.

What appears to have happened, according to the complaint, was that a technology company with which USHBB did business was contacted by the SEC, prompting Brown to tell Olivares:

“Heads up!!!! Our IT partners, RMR development received a telephone call from the SEC today regarding yougetpaidtoadvertise and what organizations were associated. This was a very short call I am told. Not sure what will come of this but this is an alarm at least that the government is looking. We need to get squeaky clean and quick!”

Olivares, charged civilly by the SEC and criminally by federal prosecutors in the Western District of North Carolina in 2013, allegedly shared inside information with USHBB and Brown.

From the receiver’s complaint (italics added):

Further, the Defendants were involved in the Zeek scheme’s operation and the Insiders’ decisionmaking. For example, in August 2011, ZeekRewards adjusted some of the terminology it used publicly in an attempt to disguise the “Compounder” as a legitimate retail profit sharing mechanism. The Compounder’s name was changed to the “Retail Profit Pool,” but the substance of this investment vehicle did not change. USHBB was or should have been fully aware of this deceitfulness in which it participated.

In a June 24, 2011 email, Dawn Wright-Olivares wrote to O.H. Brown regarding a webinar that USHBB had created for Zeek: “I started to do minor edits . . . ([Y]ou’ll see them where I started to say Retail Profit Pool) lol instead of Compounder . . . . ” She further wrote to Brown: “the silent cap [for bid expiration] reality will be 125% but we can’t SAY it as you know.”

Wright-Olivares pleaded guilty to investment-fraud conspiracy and tax-fraud conspiracy in February 2014.

Consistent with USHBB’s “dubious track record” in ASD and other schemes, the company and its principals “assisted the ZeekRewards scheme by creating multiple videos that served as promotional tools for ZeekRewards,” Bell alleged.

Titles included:
- “One Penny Billionaire.”
- “You Get Paid to Advertise.”
- “Got 20 Seconds.”
- “The Dog Gone Truth.”
- “Spin the Wheel.”
“The videos were carefully produced to mislead and deceive victims into participating in the scheme, convincing victims that with minimal effort they could earn significant financial returns from the Zeek scheme,” Bell alleged.

And, he alleged, “These videos assisted the Insiders in promoting the alleged ease with which affiliates could earn passive profits by investing in the scheme and selling membership in the scheme to others. Affiliates were told to mention the ZeekRewards program to a prospective affiliate or advertise it on a web page, and then email or otherwise provide them a link to the USHBB videos, which upon information and belief convinced other unwary victims to sign on . . .

“The videos were a key component in proliferating the RVG Ponzi scheme, causing significantly more victims and financial loss than otherwise would have occurred absent Defendants’ actions.”

RVG stands for Rex Venture Group, the alleged operator of Zeek. It was controlled by Paul R. Burks of Lexington, N.C. Burks also has been charged criminally.

ASD was a $119 million Ponzi scheme broken up by the U.S. Secret Service in 2008. NarcThatCar was a “program” that purported to pay MLM “program” members to recruit other members and to record the license-plate numbers of vehicles parked at restaurant chains, big-box retailers, universities, doctors’ offices and throughout neighborhoods from coast to coast.

The information purportedly would be entered into a database that could assist the U.S. Department of Homeland Security locate terrorists and lenders repossess automobiles. The bizarre scheme disappeared after it caught the attention of the Better Business Bureau and investigative journalists.

Bell is seeking treble damages and the return of ill-gotten gains from the USHBB defendants.

NOTE: Our thanks to the ASD Updates Blog.
Mar 27, 2015
PARTINGS: Ronald C. Machen Jr., Whose Office Led AdSurfDaily Criminal Prosecution, Is Leaving Post As U.S. Attorney For District Of Columbia

“Serving as the U.S. Attorney for the District of Columbia has been the highest honor of my professional career. I am tremendously grateful to the President, Attorney General Holder, and Congresswoman Eleanor Holmes Norton for placing their trust in me. The men and women of this office are among the most dedicated and talented public servants in the country. I am proud of the work we have done together to achieve justice in the courthouse and to build bonds of trust with the community that we serve. I leave this position confident that my extraordinary colleagues will continue to pursue justice and protect the residents of the District and this great nation.” — U.S. Attorney Ronald C. Machen Jr., District of Columbia, March 16, 2015

Ronald C. Machen Jr. is leaving his post as U.S. Attorney for the District of Columbia after five years.

Ronald C. Machen Jr. led many important prosecutions during his five-year tenure as U.S. Attorney for the District of Columbia. The one PP Blog readers are most apt to remember is the criminal prosecution of AdSurfDaily Ponzi-scheme figure Andy Bowdoin.

Machen, 45, is leaving his post and intends to reenter private practice, the Justice Department said today.

“During more than five years as United States Attorney for the District of Columbia, Ron Machen has distinguished himself as a skilled leader, a devoted public servant, and a forceful champion of justice on behalf of the American people,” said Attorney General Eric Holder.

Upon the sentencing of Bowdoin in August 2012, Machen called the huckster “a master of fraud and deception” who cheated “victims out of their hard-earned money and savings with his get-rich scheme.”

AdSurfDaily gathered $119 million through its Internet-based fraud, a 1-percent-a-day “program” that purported to be in the “advertising” business, not the business of selling securities.

Machen will leave his post on April 1. Principal Assistant U.S. Attorney Vincent H. Cohen Jr., 44, will become Acting U.S. Attorney on that date.

Two assistant U.S. Attorneys and a special agent of the U.S. Secret Service involved in the ASD case were targeted with false liens by Kenneth Wayne Leaming, a purported “sovereign citizen” from Washington state. Leaming was arrested by an FBI Terrorism Task Force and was successfully prosecuted by the office of then-U.S. Attorney Jenny A. Durkan of the Western District of Washington.

We wish Ronald Machen the best, and we thank him for his service to his country.

Mar 16, 2015
BULLETIN: Zeek Figure Robert Craddock Indicted In Separate Scheme

BULLETIN: Florida resident Robert Craddock, a figure in the Zeek Rewards Ponzi-scheme story, has been indicted in a separate scheme involving the alleged theft of more than $135,000 from a compensation fund set up to assist businesses affected by the Deepwater Horizon oil spill in 2010.

The office of U.S. Attorney A. Lee Bentley III of the Middle District of Florida announced Friday that Craddock, 54, of Port Orange, had been charged with wire fraud. The U.S. Secret Service conducted the probe.

BehindMLM.com reported the news in a story dated March 16.

Prosecutors said in a statement that Craddock “crafted fictitious invoices to support the amount of lost earnings that he claimed.”

From the statement by prosecutors (italics added):

According to the indictment, following the April 2010 explosion of the Deepwater Horizon oil rig (which was being leased by BP, formerly known as British Petroleum), Craddock submitted a claim to BP and the Gulf Coast Claims Facility (“GCCF”), an independent facility established by BP to compensate qualified claimants, for lost earnings purportedly related to the impact of the oil spill on his businesses.

Though uncharged in the Zeek case, Craddock has been described by the SEC as an obstructionist who encouraged victims of the $897 million Zeek scheme not to cooperate with Kenneth D. Bell, the court-appointed receiver.

Separately, the Daytona Beach News-Journal is reporting that local property records showed that Craddock, a pilot, recently “bought a home complete with aircraft hangar that backs up to a runway in Spruce Creek Fly-In.”

In 2012, Craddock was involved in a fundraising venture purportedly to assist Zeek participants to mount a challenge against the SEC for bringing the Zeek Ponzi case. This occurred through a Craddock venture known as Fun Club USA, later described by litigants suing Craddock for alleged trademark infringement as a shell company engaged in a “shake-down” bid against affiliates of at least three MLM networks: Zeek, OfferHubb and BTG180.

Precisely how much Craddock collected in the Zeek-related fundraising effort is unclear. Also unclear is precisely how the money was used.

Zeek figures Todd Disner and T. LeMont Silver — alleged winners of millions of dollars from Zeek — helped champion the fundraising venture. Disner also was a figure in the AdSurfDaily Ponzi-scheme story, something Zeek receiver Kenneth D. Bell pointed out to a federal judge.

Bell has raised concerns that MLMers or network marketers are moving from fraud scheme to fraud scheme to fraud scheme.

Craddock has been a lightning rod for MLM controversy. In November 2012, for example, he bizarrely planted the seed that MLM attorney Kevin Thompson was practicing law without a license. Thompson described Craddock as a liar.

But if there is a signature Craddock moment, it occurred in July 2012, when Craddock sought to disable a HubPage critical of Zeek by alleging author K. Chang had engaged in libel, trademark infringement and copyright infringement. It was all a fantastic crock, and K. Chang eventually prevailed.

Less than a month after Craddock moved against K. Chang, the SEC and the U.S. Secret Service moved against Zeek.

Court records from the ASD Ponzi case show that ASD also tried to chill reporters with threats about lawsuits in the weeks prior to a government raid on ASD headquarters in August 2008.

In 2014, Craddock was listed as a copyright enforcer on the website of an entity known as Changes Worldwide LLC. The SEC has accused TelexFree figure Faith Sloan of violating the asset freeze in the TelexFree case by sending thousands of dollars to Changes Worldwide. Sloan also was a Zeek affiliate.

Craddock later reportedly authored a book whose sales copy included a claim that the U.S. government should have modeled a “stimulus program” after Zeek, which prosecutors have described as a Ponzi- and pyramid scheme that had gathered $897 million and affected hundreds of thousands of people globally.

The SEC declined to comment on the book, which was offered on Amazon.com.

Mar 16, 2015
Court Filings Show Self-Identified Church Sent $10,000 To Zeek Rewards 9 Days Before Collapse; 2 Other Checks From An Individual Were Marked ‘Blessing’

This exhibit in the Zeek Rewards Ponzi- and pyramid case shows that an “E.C. Church” sent $10,000 to Zeek just days before the “program” collapsed in August 2012. (Masking by PP Blog.)

UPDATED 8:42 P.M. ET U.S.A. Members of the faith community joining MLM HYIP schemes is a problem. It happened with the $119 million AdSurfDaily Ponzi scheme and the $72 million Legisi scam in 2008, for example.

It’s happening currently with the “Achieve Community” scheme. Earlier, members of TelexFree — an alleged $1.8 billion pyramid scheme — traded on the words and images of faith, including the Christ the Redeemer statue in Brazil.

The WCM777 and Profitable Sunrise schemes also traded on images of the statue. Promoters of the schemes targeted people of faith. Those schemes likely generated more than $100 million.

There’s also evidence that people of faith were targeted in the $897 million Zeek Rewards scheme brought down by the SEC in 2012.

New filings by the court-appointed receiver in the Zeek case show that an entity that identified itself as an “E.C.” (Evangelical Congregational) church sent $10,000 to Zeek operator Rex Venture Group LLC on Aug. 8, 2012. The payment was in the form of a cashier’s check.

The PP Blog is declining to identify the church because details of its precise geographic whereabouts could not be learned immediately. But the check was drawn on an Alabama bank that allegedly later stopped payment.

Zeek receiver Kenneth D. Bell is seeking a court order for the bank — BBVA Compass Bank — to turn the $10,000 over to the receivership. BBVA Compass also allegedly unlawfully halted payment on 23 other cashier’s checks sent to Zeek. These totaled $73,800, meaning Bell is seeking $83,800 from the bank.

Those checks were receivership assets, and the bank’s decision to stop-payment after the receiver presented them to be paid violated the asset freeze in the Zeek case, Bell alleged.

From the receiver’s filings yesterday (italics added/light editing performed):

At the commencement of the SEC Action on August 17, 2012, RVG possessed thousands of cashier’s checks and teller’s checks received from RVG Affiliates that had not been deposited or presented for payment. Upon entry of the Agreed Order, the Receiver collected cashier’s checks from RVG’s offices and deposited them in accounts opened for the Receivership Estate.

Twenty-four (24) of the items collected from the RVG offices and deposited into the Receiver’s accounts were cashier’s checks payable to RVG issued by Compass. . . . On information and belief, between August 21 and August 29, 2012, Compass’s customers requested that Compass stop payment on the twenty-four Compass cashier’s checks previously delivered to RVG.”

These halts by the bank were unlawful under the Uniform Commercial Code, Bell alleged.

“Compass wrongfully accommodated its customers by stopping payment on all twenty-four cashier’s checks when it was not legally permitted to do so under the Uniform Commercial Code,” Bell contended.

Although the filing is not on the subject of affinity fraud, documents within the filing suggest that the E.C. entity had company at Zeek among the faithful. Two checks among the 24 were drafted on behalf of an individual whose Zeek username included the word “blessing.” These checks totaled $2,300.

Religious entities and people of faith getting recruited into HYIP schemes may not be the only problem. In the AdSurfDaily case, for instance, evidence surfaced that individuals had created purported nonprofits and religious entities into which to deposit their Ponzi winnings.

Bell alleged in late 2012 that he “has obtained information indicating that large sums of Receivership Assets may have been transferred by net winners to other entities in order to hide or shelter those assets.”

In 2014, Bell asked a court to take “judicial notice” of certain videos on YouTube.

MLM may have a problem with “serial participants” in Zeek-like schemes to defraud, Bell suggested.

NOTE: Our thanks to the ASD Updates Blog.

Feb 6, 2015
UPDATE: ‘Bacon’ Program Pushed By ‘Achieve Community’ Hucksters Reportedly Put On Hold By ‘Admin’; Second Program May Be DOA After Purported Payza Freeze
“BRING THE BACON HOME” purportedly is operated by an “admin” who is a “young trustworthy girl from Singapore,” according to a Ponzi-board post. If this graphic is to believed, the “program” will produce a happy marriage and bring you children — along with a palm-tree-lined oceanfront mansion near a convenient airport, a big car, lots of U.S. cash and delicious, oversized fruit.

UPDATED 6:20 A.M. ET U.S.A. “BRING THE BACON HOME,” a bizarre Ponzi-board “program” purportedly operated by “Sherilyn” from “Singapore” and pushed on YouTube by Achieve Community hucksters Rodney Blackburn and Mike Chitty, reportedly collapsed during a so-called Beta launch this week and has been put on hold.

The “program” purportedly turns $40 into $1,800. Achieve Community purportedly turns $50 into $400, although it has been dogged by problems for more than two months and now is the subject of an investigation by the Colorado Division of Securities.

“BRING THE BACON HOME” appears to have enabled subscription purchases, but the early haul before the failed Beta is unclear. “Sherilyn” is quoted on the MoneyMakerGroup Ponzi forum in a post dated Jan. 26 as saying, “Just buy the subs and let us do the ‘magic’ for now.”

“My Beta Bacon got Burnt,” one Ponzi-board wag ventured.

Separately, a “program” known as Cycles 24/7 that was advertised on the Achieve Community private forum last month may be dead. Cycles 24/7 initially collapsed at launch, but rebirthed itself — at least long enough to grab some cash.

Cycles 24/7 purportedly is operated by “Rick Fleming.” Like Achieve, Cycles 24/7 purported to turn $50 into $400.

On Jan. 24, a poster on MoneyMakerGroup claimed this about Cycles 24/7: “I have 45$ in payza balance, but admin say that his payza money Frozen, how i can withraw [sic] to egopay?”

The MoneyMakerGroup claim about Payza freezing Cycles 24/7 funds followed by two days a claim on the Blog at EgoPay.com that EgoPay had been hacked and that a “gap” in cash reserves existed.

Cycles 24/7 and “BRING THE BACON HOME” both listed EgoPay and Payza among their processors. Like Achieve Community, Cycles 24/7 is serving ads for other HYIPs.

One ad for “BRING THE BACON HOME” observed today by the PP Blog on the Cycles 24/7 site referenced “Unison Wealth,” yet another Ponzi-board “program” pushed by Achieve Community members.

The ad was titled “Bring Home The Bacon.” A text line read, “Did you miss Unison Wealth on the 1st day?” When clicked, the ad led to the “BRING THE BACON HOME” site.

Unison Wealth also is beaming ads for other HYIP schemes.

It is not unusual for one HYIP venture to try to prop up another through advertising or even to invest in other scams. Beginning in 2005, for instance, the CEP scam allegedly plowed money into at least 26 other schemes.

In 2012, after the collapse of the $897 million Zeek Rewards “program,” a venture known as Wealth Creation Alliance published ads for one HYIP scheme after another. The schemes typically are Ponzi schemes or pyramid schemes — or sometimes both. They engage in securities fraud and the sale of unregistered securities across national borders.

People who openly profess Christian beliefs or faith in God often are at once the marks and the purveyors of such schemes. AdSurfDaily Ponzi schemer Andy Bowdoin, an apparent advocate of The Prosperity Gospel who encouraged his MLM flock to envision money “flowing” to them, once declared himself a Christian “money magnet.”

Federal prosecutors tied Bowdoin to at least four fraud schemes, including at least two that surfaced after the collapse of ASD in 2008. He is now in federal prison.

One of Bowdoin’s schemes was called “One X.” “I believe that God has brought us OneX to provide the necessary funds to win this case,” Bowdoin claimed in 2011.

The “this case” to which he referred was the ASD Ponzi prosecution. Bowdoin lost on all fronts, eventually pleading guilty to wire fraud.

Bowdoin also was associated with a scam known as AdViewGlobal that once threatened to litigate against its own members for asking questions. AVG, as it was known, also created a private forum after its public scam outreach started to create problems.

Achieve Community recently has added a private forum.

Another current Ponzi-board HYIP scheme pushed by one or more Achieve Community promoters is called “Trinity Lines.” Among other things, Trinity Lines claims to be the purveyor of “high quality scriptural vignettes.” It also claims:
- “Although this opportunity is geared for those who appreciate the Scriptures, we welcome anybody to join our community.”
- “We at Trinity Lines do believe in God and believe in the power of ‘His Word’.
Though not writing about any specific MLM HYIP schemes, the associate pastor of an evangelical church in Massachusetts this week called “The Prosperity Gospel” a “pyramid scheme” and “a form of oppression.”

The column is titled, “Why the Prosperity Gospel Is the Worst Pyramid Scheme Ever.”

From the column by Nicholas McDonald at The Gospel Coalition (italics added):

Step One: A snazzy entrepreneur wants to make a lot of money. Said snazzy entrepreneur tells two little old ladies that if they sell his “Wow-What-A-Sham 3000,” they can make some dough to pay off their cat-sitting bills. That will cost them a startup investment of $401.76. And yes, Wow-What-A-Sham 3000 is a gimmick. But that’s okay, it’s not really about selling the product anyway; it’s about recruiting more salespeople.

McDonald is associate pastor at Carlisle Congregational Church, according to his bio line in the column.
Jan 29, 2015
TelexFree/iFreeX Figure Sann Rodrigues Appears In Car With Emerson Fittipaldi; Is Brazilian Racing Legend Being Duped By MLM Huckster?

Racing legend Emerson Fittipaldi somehow ended up in a car with TelexFree figure Sann Rodrigues. Source: Video on DailyMotion.

UPDATED 2:14 P.M. ET U.S.A. It is not unusual for financial fraudsters to seek to rub elbows with famous people or to imply ties to them as a means of sanitizing purported “opportunities” or accenting their own bona fides. Recent examples of this include Florida-based Ponzi-schemer/racketeer Scott Rothstein, who mixed with the elite as his epic fraud scheme spiraled out of control.

Florida-based AdSurfDaily Ponzi schemer Andy Bowdoin (and any number of his promoters) falsely implied that then-President George W. Bush was on ASD’s train. The Mantria Corp. Ponzi scheme in Colorado traded on images of former President Bill Clinton and famous politicians or business executives.

The WCM777 scam traded on purported ties to Siemens and scores of famous companies. Siemens publicy refuted the WCM777 claims.

TelexFree, alleged to have gathered hundreds of millions of dollars in a combined Ponzi- and pyramid scheme targeted in no small measure at Brazilians and people who speak Portuguese or Spanish, aligned itself with the Botafogo soccer club in Brazil. The PR results were disastrous.

Now comes word that Sann Rodrigues, a figure in both the TelexFree and iFreeX schemes, is seen in a video in which he is driving a car. That in itself wouldn’t be unusual, in that Rodrigues previously has recorded one or more videos that put him behind the wheel of a flashy ride.

But in this case the passenger in the car is Emerson Fittipaldi, the Brazilian racing legend who won the Formula One World Championship twice and also is a two-time winner of the Indianapolis 500.

The PP Blog has sought comment from Fittipaldi through multiple channels and hopes to hear back from the legend. If Fittipaldi or his organization responds, we’ll make sure you see that response.

Rodrigues was charged by the SEC in April 2014 with securities fraud for his alleged role in the massive TelexFree swindle. This marked the second time the SEC had implicated him in a fraud scheme. The first was a 2006 scam known as Universo Foneclub Corporation. Like TelexFree, Universo Foneclub allegedly was targeted at the Brazilian community.

TelexFree also is under investigation by the U.S. Department of Homeland Security and Federal Police in Brazil. At the same time, the Securities Division of Massachusetts Commonwealth Secretary William Galvin also is investigating TelexFree.

In September 2014, Galvin issued a warning about iFreeX, another “program” associated with Rodrigues. T-Mobile, the famous phone company, later said it was checking to see if its branding material was being misused by iFreeX.

Precisely how Fittipaldi ended up in a car with Rodrigues is unclear. Early research suggests Fittipaldi made an appearance at a hotel in the area of Orlando, Fla., on or around Jan. 6 of this year. Rodrigues may reside in the Orlando area.

The Orlando event appears to have been arranged by a venture known as DFRF. The asserted operator of that venture is Daniel Fernandez Rojo Filho. (The Ferdandez name also has been spelled with a trailing “s,” as opposed to a “z.”) His name surfaced as part of the Evolution Market Group/Finanzas Forex case in 2010.

(Also see PP Blog article. Also see Palm Beach Post article.)

It is clear that some Brazilians interested in the TelexFree case are closely following the appearance of Fittipaldi alongside Rodrigues, wondering if the racing legend is being duped by an alleged recidivist swindler.

Jan 19, 2015