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Tag: cash gifting

  • UPDATE: ‘YouGetPaidFast’ Pitchman Said To Be Casting Net At Unemployment Office For Gifting-Program Leads; Meanwhile, Scheme Takes A Phil Piccolo-Like Turn By Pointing To Alexa Rankings As Supposed Proof Of Legitimacy

    yougetpaidfastclaim

    YouGetPaidFast, a Texas-based “program” that plants the seed it has the blessing of the FBI, is benefiting from a pitchman who is handing out flyers at an “unemployment office,” according to a post from an apparent naysayer at the MoneyMakerGroup Ponzi forum.

    The poster says his friend is the one handing out the flyers — and won’t listen to reason because he is desperate for money.

    If the claim is true, it would follow an incendiary circumstance that surfaced in the Women’s Gifting Tables pyramid scheme in Connecticut that resulted in lengthy prison sentences for two pitchwomen.

    In the Women’s Gifting Tables scheme, members of Alcoholics Anonymous were targeted, according to the trial testimony reported by the New Haven Register.

    Such schemes typically target vulnerable populations. Similar schemes such as HYIP frauds have been known to target people facing mortgage foreclosures and recent job losses.

    YouGetPaidFast is operated by Paul Darby, a Texan who claims he is friendly with FBI agents and has them on “speed dial.”

    At least one FBI agent has vetted his “program,” Darby has claimed.

    Unlike the Women’s Gifting Table scheme, which asked for $5,000 at a time, YouGetPaidFast appears to be seeking the much-smaller sum of $28. Participants reportedly are instructed to mail $7 to each of four names of individuals or entities that appear on a list and advised they are purchasing products.

    Gifting and other fraud schemes that assert they sell inexpensive “products” appear somewhat regularly on the Internet. Such an approach is consistent with micro-fraud, a scam by which hucksters gather small sums from participants, rather than seeking large sums. The hope is that the small sums will add up to a large sum over time and investigators will perceive a micro “program” as less toxic than a jugular-vein fraud and won’t bother to look into it.

    The JSSTripler/JustBeenPaid HYIP “program” purportedly operated by AdSurfDaily Ponzi pitchman and cash-gifter Frederick Mann was an example of micro fraud. Participants were told that JSS/JBP would give them $10 to get started in the “program.” After payout and other problems developed at JSS/JBP, the “program” started seeking “purchases” of tens of thousands of dollars at a time.

    Claims that a “program” sells “products” and that participants make “purchases” long have been associated with bids to mask the true nature of the “program” — a gifting scam or HYIP fraud disguised as a merchant doing legitimate business, for example. Meanwhile, claims that the government or an important politician or business person have vetted or endorsed a “program” are common in the fraud sphere.

    An earlier Darby “program” featured a knockoff of the Seal of the President of the United States and suggested that something called Net Millionaires Club was an “economic stimulus package.”

    The marketing efforts of Net Millionaires Club were reminiscent of those of the AdSurfDaily Ponzi scheme exposed by the U.S. Secret Service in 2008. (ASD traded on the name of former U.S. President George W. Bush; Darby has traded on the name of President Obama.) In 2010, a Phil Piccolo-linked scam known as Data Network Affiliates planted the seed that it had been endorsed by Oprah Winfrey and Donald Trump.

    Meaningless, Bizarre, Piccolo-Like Claims

    YouGetPaidFast now screams it is “SETTING RECORDS WORLD WIDE,” pointing to an Alexa traffic ranking and “Video Views by You Tube 30 Days” as purported proof of legitimacy. Despite the claim it is setting records, however, YouGetPaidFast does not appear to specify precisely what records it is setting. Nor does it appear to say precisely what authority had certified the marks as “records.”

    Such incongruities litter the cash-gifting and HYIP landscapes, which are lined with the carcasses of collapsed “programs.” Sometimes the “programs” come back with a new name or a name designed to instill new confidence such as XXX Scheme 2.0 XXX Scheme Web 3.0.

    The Financial Industry Regulatory Authority (FINRA) warned in 2010 that fraud schemes were spreading online through social-media sites such as YouTube. A year earlier — in 2009 — the Better Business Bureau reported there were 22,974 cash-gifting videos on YouTube.

    Those videos, the BBB said at the time, had garnered an “astounding 59,192,963 views.” (Also see June 2009 report on cash-gifting by KIII-TV. The report includes an interview with an official from the Better Business Bureau of Central Texas.)

    Cash-gifting purveyors are “targeting people with some form of an affinity — such as as women’s clubs, community groups, church congregations, social clubs and special interest groups,” the BBB warned four years ago.

    On Oct. 8, BehindMLM.com, citing a Darby claim, reported that one or more Christian pastors was encouraging Darby to sue his detractors.

    Pointing to Alexa rankings and YouTube videos to sanitize frauds is one of the oldest tricks in the scammer’s playbook in the Information Age. Veteran online huckster Phil Piccolo, known for bizarre schemes such as Data Network Affiliates, OWOW and Text Cash Network,  has been doing it for years.

    Piccolo also has planted the seed he’ll sue his critics. In 2010, he planted the seed on Troy Dooly’s radio program that he could bring in leg-breakers if lawsuits didn’t work. Piccolo earlier had threatened to sue Dooly.

  • REPORT: ‘Women’s Circle’ Cash-Gifting Pyramid Scheme ‘Making Its Rounds’ In Canada’s Province Of British Columbia

    recommendedreading1The Castlegar Source, a publication in British Columbia, is reporting that the Nelson Police Department has issued a warning on a purported “women’s circle” gifting “program” making its way around the area.

    A similar scheme operating in the United States resulted in criminal charges being filed against Connecticut-based pitchwomen and subsequent convictions — with jail sentences ordered.

    Former Connecticut Attorney General Richard Blumenthal — now a U.S. Senator — once described “gifting” schemes as “pernicious” and as “merely a fancy name for an old-fashioned pyramid scheme that bleeds newcomers to feed the parasites above them.”

    “State and federal law prohibit all pyramid schemes because each one is a house of cards doomed to collapse,” Blumenthal said in 2009, noting that the “The Women’s Gifting Table” scheme in Connecticut positioned itself as a “sisterhood.”

    It seems Blumenthal’s early assessment of the perniciousness of the Connecticut scheme was correct. It later was revealed that even members of Alcoholics Anonymous had been targeted in the scheme. In 2009, the Better Business Bureau warned that frauds associated with gifting programs and gifting clubs were flourishing on the Internet.

    The schemes, according to the BBB, may use social-media to gain a head of steam and ultimately take advantage of families struggling to make ends meet during challenging economic times.

    Flash forward to 2013. From yesterday’s edition of the Castlegar Source (italics added):

    Police said because there is no new money created in the circle, the scheme is simply a fraud that allows the original recruiters to take money from the new members. 

    Eventually, when no new recruits come into the circle, the gifters will have lost their money.

    Pyramid schemes are illegal under section 206 (1) (e) of the Criminal Code and Competition’s Act.

     

  • URGENT >> BULLETIN >> MOVING: KABOOM! 2 Connecticut Women Found Guilty In Cash-Gifting Pyramid Scheme

    breakingnews72URGENT >> BULLETIN >> MOVING: (2ND UPDATE 6:44 P.M. ET U.S.A.) Both of the defendants on trial in federal court in Connecticut in a cash-gifting pyramid scheme known as Women’s Gifting Tables have been found guilty of wire fraud and filing false tax returns.

    The jury returned the verdicts against Jill Platt, 65, and Donna Bello, 56, this afternoon. Both women live in Guilford. They were charged in May 2012. A third woman, Bettejane Hopkins, 66, of Essex, pleaded guilty.

    In returning the guilty verdicts in about two hours, the jury rejected defense contentions that the women believed their cash-gifting “program” that gathered $5,000 from each participant and used a food theme was legal.

    Prosecutors called it a fraud scheme designed to enrich some participants at the expense of others.

    “As the jury’s swift verdict of guilty on all counts makes clear, ‘Gifting Tables’ are pyramid schemes and illegal, plain and simple,” said U.S. Attorney David B. Fein. “These defendants enriched themselves while fraudulently misrepresenting material facts about the Gifting Tables and conspired to hide their income from the IRS. I commend the agents of IRS Criminal Investigation for their thorough investigation of this matter, which is ongoing.”

    Fein this afternoon threw down the gauntlet against cash-gifters.

    “During the trial, the jury heard evidence that other Gifting Tables continue to operate in Connecticut,” he said. “The jury’s verdict today is fair notice to anyone participating on Gifting Tables that any money received is taxable income and that they may be involved in an illegal pyramid scheme.”

    Included among the damning evidence against Platt and Bello was email correspondence, prosecutors said.

    “I’m pleased to see that the jury saw that the ultimate purpose was the enrichment of the defendants,” said William P. Offord, IRS Criminal Investigation Special Agent in Charge of New England.

    From a statement late this afternoon by prosecutors (italics added):

    Evidence at trial included several emails, including an email sent by Platt in March 2009 that told a participant: “It’s sort of a joke that I refer to our freezer as the ATM.”  Later in March 2009, Bello complained to Hopkins and another individual about two recruits, stating: “They have had enough parties. Its [sic] costing us a small fortune in their food and wine delights. No more parties until they commit with the cash.”

    In June 2009, Bello sent an email that said “I am not a . . . saint . . . . I’m teaching you all how to make an extra 80 grand a year . . . . Isn’t that enough?”

    Platt and Bello were found guilty of one count of conspiracy to commit wire fraud, one count of conspiracy to defraud the IRS and a combined total of 15 counts of wire fraud. (Eleven against Bello and four against Platt.) Meanwhile, the jury found Bello guilty of two counts of filing a false tax return. Platt was found guilty of one count of filing a false tax return.

    Sentencing is set for May 15 before Chief U.S. District Judge Alvin W. Thompson. The women potentially face years in prison.

    Cash-gifting schemes may surface as forms of affinity fraud. They often are targeted at people of faith, and purveyors may claim the “programs” are legal.

  • OREGON LIVE: State Takes Action Against Alleged Gifting Pyramid

    OregonLive (The Oregonian) is reporting that the state has taken action against participants in an alleged cash-gifting pyramid scheme.

    Like recent cases in Connecticut and Michigan, the Oregon case involves women. The paper is reporting that four naturopathic physicians were involved in the scheme. One of them was ordered to pay a fine of $15,000 and make restitution.

    From The Oregonian (italics added):

    A letter from the attorney general’s office warned Abundance members that their involvement could run afoul of the Board of Naturopathic Medicine. “A doctor’s solicitation of patients to join a pyramid club can result in discipline by the state board,” the letter said.

    Read the story in The Oregonian. (The reader comments below the story also are well worth reading.)

    Read the state’s warning on cash-gifting pyramid schemes.

    A snippet (italics/bolding added):

    Many Oregonians are being defrauded by unlawful pyramid schemes operating under the guise of so-called “gifting clubs” such as the Dinner Club or Women’s Empowerment Network. These “clubs” are elaborate scams designed to make money for a few at the expense of many.

    The promoters of the scheme claim that IRS regulations allow people to “gift” one another up to $10,000 per year tax free. For example, persons are asked to pay $5,000 to enter at the bottom of the pyramid or “tree” along with others. As these people encourage others to join the club, they rise on the tree to the top position, where the total amount collected from “gifts” is $40,000, a $35,000 profit. Often, people at the top re-invest another $5,000 and start the process anew.

    Each of the eight persons just entering the tree delivers his/her $5,000 “gift” directly to the person at the top of the pyramid. This also helps convince new players that they will eventually receive a $35,000 return on their “gift.”

    These schemes are doomed to failure. Each “tree” involves 8 persons who “gift” $5,000 each. The person at the top of the tree gets $40,000 and the other 7 people hope that enough players come on board to push them to the top. For each person at the top, there are 8 people who are likely to lose their investment and the chance of a big “payoff.” Eventually, these schemes collapse because they run out of prospective participants.

    No matter what the promoters may tell you, gifting clubs are illegal. They are unlawful pyramid schemes. Gifting clubs and pyramids have not been approved by the Oregon Attorney General, local district attorneys, or the Division of Finance and Corporate Securities. Operating or participating in a pyramid scheme violates Oregon’s Unlawful Trade Practices Act, which imposes civil penalties of up to $25,000 per violation.

  • UPDATE: No Updates On Club Asteria Blog Since Oct. 15, No ‘News’ Site Updates Since Sept. 12; Firm Continues To Publish Red Cross Logo In House Organ And On Purported ‘Philanthropic’ Site Despite Cease-And-Desist Letter; 2008 Cash-Gifting Video With Hank Needham Emerges

    In this frame from a cash-gifting video dated May 3, 2008, then-AdSurfDaily pitchman Hank Needham opens an envelope from a cash-gifing scheme — and five $100 bills purportedly from "George" spill out. The date on the video coincides with a period of time in which Needham's image appeared in an ad for ASD. Needham later would emerge as a Club Asteria principal and purported owner of the "program," which suspended cashouts earlier this year and caught the attention of regulators in Italy.

    Is anybody at home at Club Asteria and the purported Asteria Philanthropic Foundation? And where, precisely, is home?

    The Club Asteria Blog on a .US domain has not been updated since Oct. 15. In the recent past, the Blog had been updated approximately every three (or so) days, according to the date notations on the site. Updates were posted on Oct. 15, Oct. 12, Oct. 9, Oct. 6, Oct. 3, Sept. 30, Sept. 27, Sept.  24, Sept. 21, Sept. 16.

    Fifteen full days have passed since the most recent update.

    Separately, the Club Asteria “News” page on its .com domain has not been updated since Sept. 12, a period that encompasses more than a month and a half.

    Although the American Red Cross sent the Asteria Philanthropic Foundation a cease-and-desist letter six days ago amid concerns of brand leeching, Club Asteria continues to publish the Red Cross logo and name in its October house organ. The firm uses the publication, an emagazine, for recruiting.

    It is common for fraud schemes to plant the seed they are affiliated with a legitimate entity.

    Meanwhile, the Asteria Philanthropic Foundation, which also is known as the Asteria Foundation and uses street addresses in the United States and Hong Kong, also continues to publish the Red Cross name and logo on the foundation’s .org site.

    Before suspending member cashouts earlier this year, Club Asteria issued payments via wire from a purported Hong Kong entity known as Asteria Holdings Limited, according to “I Got Paid” posts on infamous Ponzi scheme forums.

    Last month, Club Asteria removed from its house organ an image and purported “interview” with actor Will Smith. A “JOIN NOW” button had been placed near the Smith-related content. In this month’s house organ, a “JOIN OUR MISSION” button was placed inside a quotation from Mahatma Gandhi, the slain Indian champion of freedom. Gandhi’s name was misspelled in the promo.

    Virginia authorities said on Oct. 20 that Club Asteria was not registered as an issuer of securities in the state. They declined to say whether a Club Asteria probe was under way.

    In May, CONSOB, the Italian securities regulator, banned promos for the firm in Italy.

    In a video dated May 3, 2008 — prior to the apparent formation of Club Asteria and the Asteria Foundation but during a period of time in which Club Asteria principal Hank Needham’s image appeared in a promo for AdSurfDaily — Needham appeared in a video for cash gifting, the PP Blog has learned.

    Needham is seen in the cash-gifting video opening an envelope from a courier service that contained a smaller envelope. The package purportedly was sent by “George.”

    When Needham opened the smaller envelope, five $100 bills spilled out.

    “Thank you, George, ” Needham said.

    Needham then fanned the bills in front of the camera.

    In August 2008, the U.S. Secret Service seized tens of millions of dollars in the ASD case, amid Ponzi allegations. It is known that some ASD members also were cash-gifting enthusiasts. After the ASD-related seizures, some ASD members sought to recruit others for cash-gifting, autosurf and HYIP schemes, claiming the schemes were excellent ways to make up for ASD losses while highlighting the purported “offshore” locations of some of the “programs.”

  • DEVELOPING STORY: Message Board For Members Of ‘OneX’ Scheme Pushed By Accused Ponzi Schemer Andy Bowdoin Claims ‘Transfer Funds’ Option Disabled Because Members Are Using ‘Stolen Credit Cards,’ Source Says

    Andy Bowdoin

    A bulletin board accessible only through the back offices of members of the purported  “OneX” program includes a message that the program has disabled a “Transfer Funds” option because a “recent investigation” has determined that members “have been depositing funds from stolen credit cards and transferring this tainted money to hundreds of other members of the organization,” a source tells the PP Blog.

    The bulletin-board announcement was dated yesterday and attributed to “the administration.” No OneX owner or operator was identified in the announcement, but members of OneX were told there was no choice left “but to disable the ‘Transfer Funds’ option indefinitely,” according to information provided by the source.

    AdSurfDaily President and accused Ponzi schemer Andy Bowdoin emerged Monday as a OneX pitchman.

    There was no corresponding announcement on the site that OneX or its staff had alerted authorities that members were joining with stolen credit cards, the source said.

    Who conducted the “investigation” — the company or some other entity — was not made clear in the announcement.

    “The Company must take a hard stance against this type of financial fraud in the interest of those hardworking, honest members who are legitimately building their businesses and depend on the survival of this Company for all the great financial opportunities that it represents,” the post on the bulletin board claimed, according to the source.

    OneX is a purported 4×4 matrix linked to a purported 3×9 matrix known as QLxchange that purportedly operates from Panama through a server purportedly located on Isle of Man in the Irish Sea.

    In a webinar Monday, Bowdoin told ASD members that they could earn $99,000 “very quickly” through OneX, a program he intended to use to pay for his criminal defense.

    Bowdoin, who has participated in at least three webinars this week in which he sang the praises of the purported opportunity, was charged with wire fraud, securities fraud and selling unregistered securities last year.

    In 2009, an autosurf known as AdViewGlobal (AVG) reportedly disabled a button that permitted members to transfer money to other members. AVG, which had close ASD ties, purportedly was based in Uruguay.

    OneX purportedly has 750,000 members.

    On Monday, Bowdoin claimed God had led him to his strategy of using OneX to raise defense funds for his Ponzi battle against the government.

    “I believe that God has brought us OneX to provide the necessary funds to win this case,” Bowdoin said.

    A PP Blog reader (“Tony”) reported at 6:45 p.m. EDT today that a OneX/QLxchange-related “press release” dated Oct. 11 had appeared on PRLog, a news-release distribution site. The release, which also referenced cash-gifting and a “pay it forward” strategy, was attributed Bryce Jackson, a purported “Business Mentor” and “Success Coach.”

    “God truly wants you to be a blessing to other people during these bad economic times,” the release read in part.

    Links in the press release lead to sites where people who register reportedly are given information about OneX/XLxchange. One of the sites is called “godsmoneyfeeder”; another is called “whatablessing.”

    Bowdoin also is promoting a “pay it forward” theme for OneX, according to his webinar remarks.

    In essence, “pay it forward” — also known as PIF or “benefactoring” — is a practice by which money theoretically stays in constant motion and flows to schemes because sponsors pay fees for recruits and encourage recruits to to the same for their recruits.

  • Better Business Bureau Warns: Cash-Gifting Epidemic Online; Organization Says 22,974 Gifting Videos Posted On YouTube

    In the days after the government’s August seizure of tens of millions in the AdSurfDaily probe amid Ponzi allegations, opportunists stepped in to fill the void by offering cash-gifting schemes.

    Today, months later, opportunists trading on Ponzi pain are using the names of autosurfs and autosurf-related keywords to drive traffic to cash-gifting websites.

    The Better Business Bureau (BBB) says gifting programs and gifting clubs are flourishing on the Internet, taking advantage of families struggling to make ends meet in the poor economy.

    BBB has issued a warning “that cash gifting is not a legitimate way to make a few extra dollars, and in fact, is nothing more than a pyramid scheme.”

    How widespread is the problem? BBB reports there are 22,974 cash-gifting videos on YouTube. The videos have garnered an “astounding 59,192,963 views,” BBB adds, citing statistics from TubeMogul, an online video analytics company.

    Cash-gifting purveyors are “targeting people with some form of an affinity — such as women’s clubs, community groups, church congregations, social clubs and special interest groups, BBB says.

    “Bernie Madoff isn’t the only guy with a Ponzi scheme,” says Steve Cox, a BBB spokesman. “Money-making opportunities promising big returns for little work are all over the Internet and are extremely enticing to millions of people struggling with today’s economy.

    Run like there’s no tomorrow, warns Cox.

    “Anyone tempted by slick cash gifting marketing appeals should run in the opposite direction, or they run the risk of being the next person ripped off by a pyramid scheme,” he says.

    BBB said cash-gifting promotions typically are vague, adding that a video performer “might even open a FedEx envelope with cash inside to prove the effectiveness of the program.”

    Scammers often tout the programs as fundraisers for a worthy cause or as “empowerment” programs to help people help themselves. Prospects may be asked to pay anywhere from $150 to $5,000 to join.

    Money then is funneled to people farther up the pyramid, and participants then recruit more people to join in order to start making money themselves.

    Beware of assertions the programs are legal and sanctioned by the IRS, BBB cautions.

    “Almost every state has laws prohibiting pyramid schemes and/or assesses penalties on those who participate, and the Federal Trade Commission and many state attorneys general have issued warnings about cash-gifting clubs, BBB says.

    Here are some questions consumers should ask, according to BBB:

    • Do I have to make an “investment” or give money to obtain the right to recruit others into the program?
    • When I recruit another person into the program, will I receive what the law calls “consideration” (that usually means money) as a result?
    • Will the person I recruit have to make an “investment” or give money to obtain the right to recruit and receive “consideration” for getting other people to join?

    If the answers are “yes,” BBB warns people to steer clear of the scheme.

    “Don’t give in to tempting claims online and never buckle under to high-pressure sales pitches, even when they come from the mouth of a trusted friend, co-worker, neighbor or church member,” BBB advises.

  • AdViewGlobal, AdGateWorld Brands Leveraged To Sell Cash-Gifting, Other Programs; Pitches Also Use Tony Robbins’ Name

    It’s hard to imagine that motivational speaker Anthony Robbins would be pleased to learn his carefully cultivated brand name is being leveraged to sell highly questionable online-income opportunities such as cash-gifting programs.

    Robbins, however, has company — and it’s the sort of company that adds an extra layer of dubiousness to the drip-drop dilution of the Robbins’ brand: The brands of AdGateWorld and AdViewGlobal also are being used to harvest traffic to “opportunities” that appear to have nothing to do with the autosurf companies.

    AdGateWorld and AdViewGlobal are autosurf companies that surfaced in the wake of the alleged $100 million AdSurfDaily autosurf Ponzi scheme. The U.S. government takes a dim view of the autosurf business model, saying it’s a back-door way of selling securities without a license — while using money from new investors to pay redemptions requested by earlier investors: the classic Ponzi set-up.

    At the same time, the government also cautions against participating in cash-gifting programs, many of which use an illegal pyramid model and trade on get-rich-quick dreams.

    This is one of those bizarre things that happens only online. Autosurfs have been under public scrutiny in the aftermath of the well-publicized August seizure of ASD’s assets.

    Promoters of cash-gifting and MLM-style programs now appear to be trading on ASD’s pain — and the names of new autosurfs that have surfaced since the ASD asset seizure  — to harvest traffic and route dollars to their own questionable opportunities.

    Last night and this morning we noticed that some promoters of cash-gifting and other questionable programs have been using keywords such as “Ad View Global” and “Ad Gate World” to drive traffic to their video presentations. The autosurf names appear in headlines on the video sites, but the videos themselves don’t talk about the autosurfs.

    People who anticipate viewing an autosurf pitch instead are greeted with a cash-gifting pitch or a pitch for another MLM-style program.

    Robbins’ name also is being used in an apparent bid to siphon traffic that originates with autosurf- or business-opportunity-related keywords, and, in at least one case, is being used in an actual video ad for a cash-gifting program. We also noticed Robbins’ likeness in video stills whose headlines suggested the videos were about autosurfs.

    This morning we viewed a video with a headline of “Ad Gate World Create[s] the 4 Hour Work Week.” The video was about a cash-gifting program, not the Ad Gate World autosurf program. Robbins’ name was scrolled in the opening frames of the video.

    A woman who appeared in the video declared she’d found her nirvana through cash-gifting:

    “Cash-gifting is the way to go — hands down,” she told viewers. “This is what I want to do, like forever, now.”

    Like him or not, Tony Robbins has worked hard to cultivate a unique brand identity. Last year he sued Stephen Pierce, an Internet Marketer, amid allegations that Pierce was leveraging the Robbins’ brand without authorization.

    Read about the Robbins/Pierce lawsuit on TMZ.com.

    “[Robbins] carefully limits and vigorously protects and defends the good will and value of Robbins’ name, reputation and image,” Robbins said in the lawsuit.

    Some promoters of highly questionable programs are really pushing things by associating Robbins’ brand with their “opportunities.” This is one of the reasons large segments of the public view Internet Marketing as a cesspool.

    It’s painful to watch.