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Tag: Bitclub Network

  • ZEEK RECEIVER: ‘No Comment’ On BitClub Network Story

    Zeek receiver Kenneth D. Bell had “no comment” this morning on an Aug. 30, PP Blog story that reported Zeek figure T. LeMont Silver now was pushing a murky “program” called “BitClub Network.”

    Bell has raised concerns that Silver is a serial promoter of Zeek-like schemes to defraud.

    As the PP Blog noted yesterday, Silver also has been linked to a “program” known as “Gold Crowdfunding” that has links to the OneX scam that put AdSurfDaily Ponzi schemer Andy Bowdoin in jail in 2012. Like Bowdoin, Silver pitched OneX.

    OneX used an image of a bomb in its logo.

    OneX logo.
    OneX logo.

    Bell is suing Silver for the return of his alleged gains in Zeek, saying they came from Zeek victims. The SEC and federal prosecutors in the Western District of North Carolina have described Zeek as a Ponzi- and pyramid scheme that collected hundreds of millions of dollars in less than two years of operation.

    The SEC shut down Zeek in August 2012.

    Zeek figure Dawn Wright-Olivares pleaded guilty to criminal charges of investment-fraud conspiracy and tax-fraud conspiracy in February 2014. Her stepson, former Zeek programmer Daniel Olivares, pleaded guilty to a charge of investment-fraud conspiracy.

    The Consumer Financial Protection Bureau (CFPB) issued a warning on Bitcoin-themed scams on Aug. 11, 2014. Silver’s promotions for BitClub Network began to appear on the Internet about three weeks later.

    CFPB did not immediately respond to a request for comment on BitClub Network, which Silver has described as a “mining” venture.

    BitClub Network purportedly pays out a daily dividend for 1,000 days and has three “mining pools” with tiered buy-in rates: $500, $1,000 and $2,000. Early birds — described as “Leaders” — are being encouraged to send in $3,599 to qualify for a “Founder’s” position.

    Much is murky about BitClub Network.

    Also see Sept. 1 report on “Gold Crowdfunding” by BehindMLM.com.

  • UPDATE: BitClub Network Launch Said To Be Delayed; ‘Founders’ Positions Reportedly Sell For $3,599; Pitches Directed At ‘Leaders’; Prospects Asked To Wire Money; Purported ‘Opportunity’ May Have TelexFree-Like Cash-Transfer System

    “These participants received uncontrolled cash deposits outside of the TelexFree system,” — Massachusetts Securities Division, Ponzi- and pyramid complaint against TelexFree, April 15, 2014.

    cautionflagEDITOR’S NOTE: For our earliest background on BitClub Network, see Aug. 30 report that references serial HYIP promoter T. LeMont Silver. Are you really sure you want to promote bitcoin-themed HYIPs alongside a man who parachuted into the Dominican Republic from Florida after the Zeek HYIP scam and now is using an address in Seychelles?

    Read on for more early background on BitClub Network . . .

    ** ______________ **

    As tomorrow is the 75th anniversary of the beginning of World War II, it’s easy enough to summon images of the late Winston Churchill asking the world to pay attention. The great man still is very much alive in the annals of history and in millions of hearts. We imagine him in 2014, contemplating BitClub Network as a gathering storm, perhaps a modern “riddle wrapped in a mystery inside an enigma.”

    BitClub Network appears very much to be yet another nascent MLM/network marketing whack-a-mole “program,” a reload scheme rising to replace a “program” that has collapsed. The most recent major “program” to crumble into an alleged heap of Ponzi- and pyramid rubble was TelexFree — in April 2014.

    Reload schemes keep cash flowing to factories of online crime and to the “leaders” who deliver human souls to them for the purposes of financial disembowelment. The more bodies disemboweled, the more the scammers-in-chief and their disingenuous and corrupt enablers make.

    Our early analysis of BitClub Network, subject to amendment, is that it is casting its net to attract the greediest and greatest HYIP scammers on a cross-continent basis. The PP Blog observed information last night that suggested the brand of BitClub Network, which already is conducting business via wires that pass though the United States, also may be expanding in a region of Europe known for atrocities, including ethnic cleansing.

    Among the core dangers of HYIP scams is that they deliver undeserved and potentially ruinous economic power to unknown persons or entities. The money could be used for any nefarious purpose under the sun.

    For an unclear reason — headline scraping to drive people with an interest in politics to bitcoin-themed sites, perhaps? — one promo using the name of BitClub Network linked yesterday via Twitter to a site that featured a video commercial and the names of National Geographic and Michelin, the French tire-maker with a presence in the United States. The Twitter linkage occurred through a site curiously dubbed “Bitcoin Regime” with a “From” message of “Bitclub Russia.” A promo today linked via Twitter through Bitcoin Regime was playing a commercial for Schick, the Connecticut-based maker of razors. Some text surrounding the promos is in English. Other text appears to be in the language of Russian or Ukranian or Serbian.

    “Bitclub Russia” appears also to have its own YouTube site. “Bitcoin Regime,” meanwhile, says “[t]his site was created out of passion and interest in the subject.” One of the headlines on the site reads, “Obama: No Strategy For ISIS.. (Oops, We Funded & Trained ISIS!).”

    Another reads, “. . . because fuck fiat!” Yet another reads, “Let’s Talk Bitcoin: Buenos Aires & Bitcoin Embassy.” Still another, in Russian, reads, “Earn Bitcoins on a serious level 1 service! The most serious Bitcoin earnings!” — when Google’s translation tool from Russian to English is used.

    Is it a scraping site of some sort that is drafting off the anticipated popularity of BitClub Network?

    ISIS is the terrorist group that allegedly beheaded American journalist James Foley and also allegedly beheaded a Lebanese soldier.

    Launch Timing

    Head-scratchingly, the “Founders’” launch of the BitClub Network “program” had been set for Sept. 1, the 75th anniversary of the beginning of World War II. Whether that’s a coincidence is unclear. Sept. 1 also is Labor Day in the United States. Various HYIPs have targeted the world’s workers, offering false relief from the daily grind — not just a chicken in every pot, but a mansion, unlimited sums of cash and perhaps a fleet of high-end automobiles and maybe even a Ferrari (or two).

    As is typical in HYIP scams, there was at least one report this morning circulating on Twitter that BitClub Network has experienced a launch delay. As also is typical in HYIP Ponzi Land, black comedy is in no short supply. Whether it’s accidental or intentional is unclear.

    In any event, BitClub Network reportedly has a feature known as the “holding tank” — and this “holding tank” is being blamed for the launch delay.

    “Hi Leaders,” a link from Twitter bizarrely begins, adding a second layer of black comedy. “Ok, I just heard that the programming of the holding tank feature is taking a bit longer than expected, so dont [sic] be dissapointed [sic] as it basically gives us more time to prepare our teams. :) So, it now looks like we [sic] gonna pre launch around wednesday [sic] or thursday [sic] 2pm EST [sic?] this coming week!”

    Perhaps most distressing, though, is a murky claim that “Founders” still can wire $3,599 to get started, “holding tank” delay or not. This wire maneuver appears to be very similar to the way things were done at WCM777, alleged by the SEC earlier this year to be a massive international scam. It’s also highly reminiscent of Profitable Sunrise, which told the marks to wire money to the Czech Republic. Some of the money was seized in Hungary in a money-laundering probe.

    Details of the BitClub Network wiring arrangement are not published and apparently are revealed only in private communications, another typical signature of an emerging HYIP scam. It’s also possible that people are disguising themselves as BitClub Network promoters to solicit and then steal wire transfers.

    “If you want to do a wire you need to get back to me ASAP and I will sent [sic] you the details for that,” the link from Twitter coaches. “The advanatge [sic] of sending in a wire is that you lock your spot on top of the binairy [sic] before hundreds or probably thusands [sic] that will come in afer [sic] you at launch!”

    Chronic typos and odd syntax often signal HYIP scammers are at work.

    A separate link from Twitter, presumptively from a different early bird, says, “[Y]ou get paid right away on all referrals and can use those commissions to pay others in after they send you paypal [,] bank wire, or pazya etc.”

    If this is true, it would reflect the money-moving mechanics of other HYIP scams that encourage “leaders” to gather money from prospects via bank wires and payment processors — and then to cherry-pick part of it or all of it to use as a recruitment lure. Such deals almost certainly would take place off the books of the “program” and can create layers and layers of black markets inside a larger black market — nesting dolls of crime, if you will.

    The second link from Twitter continues (italics added):

    I can’t stress enough the fact that you are at the top and at the very beginning of this incredible global program that will make everyone money every day, just for joining.

    If you have done your homework you shoud [sic] know by now why this is and how it works, cause of the crypto currency mining :)

    And if you refer others, well you”ll [sic] make a KILLING! read [sic] the income example on the payplan site, this will blow your mind!

    This is BIG money you can make here, some of you will make already [sic] 7 figures by christmas [sic].

    Naturally some American scammers appear already to be doing some of the bidding for BitClub Network. It’s as though Profitable Sunrise, a collapsed HYIP allegedly operated by a ghost and driven by willfully blind affiliates who conducted business by wire from the United States to Eastern Europe, never happened.

    BitClub Network also may be a bit like TelexFree, another collapsed HYIP. After prospects are told they can only join by wire at this stage and later will have to join with bitcoin, the first link from Twitter goes on to suggest sponsors can perform back-office transactions and collect money directly from recruits.

    Here’s how the first link from Twitter (described above) confusingly puts it (italics added):

    OR……having your sponsor or upline paying for you with their commissions within their back office using the credit system after you have sent them the money!

    Back-office transactions almost certainly contributed to the calamity at TelexFree, an alleged Ponzi- and pyramid scheme that may have gathered more than $1.2 billion in a little more than two years of Internet scamming. One of the issues at TelexFree was “cash deposits” alleged to be “uncontrolled.”

    As noted above, one of the dangers of such systems is that they introduce the specter of a black-market economy and back-alley deals, making already-dangerous enterprises doubly dangerous. The results can be bizarre.

    As things stand today, if BitClub Network were the movie “Casablanca,” Renault would be telling the troops to “round up the usual suspects.”

    Any person who joins this program with a purported “holding tank” is a fool. Any person who pitches it to others amid these exceptionally murky circumstances is reckless beyond comparison.

     

  • In Face Of Clawback Action And Warnings On Bitcoin Scams, Zeek Figure And Florida ‘ExPat’ T. LeMont Silver Offers ‘BitClubNetwork’ Mark Bonus Of More Than 3 Times What He Pays His Dominican Maid — And Uses Address In Money-Laundering Haven

    “The Florida Office of Financial Regulation (OFR) warns consumers of the potential risks associated with purchasing, investing in, and exchanging virtual currencies, such as bitcoin. Members of the U.S. Congress, federal and state regulatory authorities, are continuing to question a way forward with respect to these diverse and decentralized payment mechanisms. Mt. Gox, an international Bitcoin exchange, filed for bankruptcy that resulted in losses in excess of $400 million and put a spotlight on risks surrounding virtual currencies.” — Florida Office of Financial Regulation, March 18, 2014.

    “The Court may wish to take judicial notice of the many online videos in which one Defendant, T. Le Mont Silver, has appeared regarding his moving his family to the Dominican Republic . . . and promoting several ‘revenue sharing’ schemes in addition to Zeek.” — Kenneth D. Bell, Zeek Rewards receiver, July 30, 2014.

    “Today the Consumer Financial Protection Bureau (CFPB) issued a consumer advisory warning consumers about the risks of virtual currencies such as Bitcoin. The CFPB advises consumers to be aware of potential issues with virtual currencies such as unclear costs, volatile exchange rates, the threat of hacking and scams, and that companies may not offer help or refunds for lost or stolen funds. The CFPB also announced that consumers who encounter a problem with a virtual currency product or service can now submit a complaint with the Bureau.” — Consumer Financial Protection Bureau, Aug. 11, 2014.

    Using a launching rocket in a promo, "BitClub Network" is set to launch Sept. 1, the 75th anniversary of the beginning of World War II.
    Using a rocket in a promo, “BitClub Network” is set to launch for “Founders” on Sept. 1, the 75th anniversary of the beginning of World War II. Will more financial terror rain down from the skies above HYIP Ponzi Land?

    4th UPDATE 3:27 P.M. EDT U.S.A. Florida “ExPat” T. LeMont Silver, a target of a huge clawback lawsuit flowing from the 2012 Zeek Rewards Ponzi- and pyramid case and a veteran HYIP “revenue-sharing” huckster, may be a bit slow on the uptake.

    Florida — his own state — issued a caution in March 2014, warning that there are risks associated with bitcoin and that virtual currencies have been known to have “[l]inks to criminal activity.”

    In July, the court-appointed receiver suing Silver for the return of his alleged winnings in the Zeek scam alleged that Silver was in a group of “serial” pitchmen of “revenue sharing” schemes — in this context, Zeek-like schemes to defraud.

    Receiver Kenneth D. Bell asked a federal judge to take “judicial notice” of certain Silver promotional videos.

    Silver’s Zeek gains tipped the scale toward $2 million and came from Zeek victims, Bell has alleged.

    On Aug. 11, the Consumer Financial Protection Bureau (CFPB) issued a warning on bitcoin-themed scams.

    “You may also have heard that some people buy them as speculative investments or that you can ‘mine’ them with your computer,” CFPB said in its warning.

    Sometime after 6 p.m. yesterday, Silver sent out an email promising recipients an “enormous opportunity in Bitcoin Mining” through a “program” known as “BitClub Network,” the PP Blog has learned.

    “BitClub Network” prospects are asked to invest in “mining pools,” BehindMLM.com is reporting. (Link below.)

    “There are already hundreds of companies that do a share of revenue with their traders in this space,” the Silver email read in part.

    So, another “revenue-sharing” scheme from Silver — this in the face of highly public warnings about bitcoin-themed scams, HYIP scams and even a de facto warning from the Zeek receiver that something untoward was occurring.

    “Even if you have no list or never have a recruit, you can leverage this system to earn EVERY DAY for a period of 1,000 days!” the Silver email bleats. “As you grow your units … each subsequent unit also earns for 1,000 days.”

    No part of the email touches on any of the warnings issued by regulators about the volatility of bitcoin values and scams that crop up that seek to attach themselves to bitcoin.

    Here is how the Florida OFR spelled out the risks just five months ago (italics added):

    • No insurance guarantee. Virtual currency is not guaranteed with protection, while funds held by U.S. banks and credit unions are insured.
    • Unpredictability. The value of virtual currencies can rise and fall in a short time, and these values are driven by the marketplace. Those who deal in virtual currencies should realize the risks, which can result in substantial losses.
    • Security. Some virtual currency exchanges that offer to store the consumers’ funds in virtual wallets have failed to protect them, resulting in consumer losses due to hacking of these virtual wallets.
    • Links to criminal activity. Criminals have taken advantage of the anonymity provided by virtual currencies, and have used them for money laundering and other crimes. If an exchange is shut down, consumers may not be able to access their funds.
    • Regulation. Oversight of virtual currencies has not been thoroughly developed, and thus, consumers lack many of the protections they have come to expect within the financial services industry.
    • Tax obligations. To view the Internal Revenue Service (IRS) guidance on the tax implications concerning virtual currencies, visit http://www.irs.gov/pub/irs-drop/n-14-21.pdf.

    Silver has been featured in videos bragging about how good his life has been in the Dominican Republic, which recently has been rocked by the alleged TelexFree Ponzi- and pyramid scheme that has affected hundreds of thousands of people across the globe.

    The veteran HYIP huckster appears to have relocated to the Dominican Republic from Florida after the collapse of the Zeek scheme and after at least two other “revenue-sharing programs” he promoted after the collapse of Zeek also cratered.

    One way to view these outrageous “programs” is as a war against people of limited means or people already living in poverty, dressed up as in invitation to escape their own misery. Like the rockets of war rain down on their human targets, HYIP offers fairly rain down from the skies of the Internet, putting vast numbers of people at risk.

    Whether Silver remains in the Dominican Republic is unclear. His email for the “BitClub Network” appears to have used an address in Seychelles, an Indian Ocean archipelago nation associated with money-laundering. Why a Florida man who apparently did at least a pass-through in the Dominican Republic would be using a Seychelles address was unclear.

    Agnes Jouaneau, a purported “director” of Inter Reef Ltd., a purported U.K. business associated with the Profitable Sunrise HYIP swindle last year, purportedly operated out of Seychelles. (Also see this disturbing 2010 story at Stuff.co.nz that references the name of Jouaneau before Profitable Sunrise emerged and raises questions about the laundering of money, perhaps even for terrorism.)

    Incredibly and disgustingly, Silver’s pitch for “BitClub Network” promises “[$]600 to one person that goes through this entire email” and puts into action “everything” he shares in a video pitch.

    Silver did not say whether he intended to pay his mark with proceeds from Zeek or any of his other scams.

    The $600 sum apparently earmarked for his “BitClub Network” mark is more than three times the monthly wage Silver said in a January video he paid his Dominican maid.

    Also see “BitClub Network” review at BehindMLM.com.

    A snippet from BehindMLM.com (italics added):

    At the very least, it’s a certainty that BitClub Network are accepting investments from affiliates on the expectation of a >100% ROI. Whether or not the scheme has registered itself with the SEC is unclear. Given the offshore domain registration with a Panama-based provider, I’d say it’s unlikely.

    BitClub Network is an offshore scheme seeking to fleece investors under the guise of “let us explain Bitcoin mining to you”, with the mining itself (if any actually exists) having little to nothing to do with the flow of funds within the scheme.

    Whilst the owner(s) of BitClub Network are for now are sticking to the shadows, there’s evidence that factions of the Zeek Rewards Ponzi scheme might be behind it.

    “Bitclub Network” and its companion rocket apparently are set to launch for “Founders” on Sept. 1.

    If it does, it will launch on the 75th anniversary of the beginning of World War II and all the hellfire that followed. On Sept. 1, 1939, Hitler invaded Poland.

    NOTE: Our thanks to the ASD Updates Blog for providing the July 30 filing by the Zeek receiver.