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Tag: Competition Bureau of Canada

  • BULLETIN: 2 Arrested In Alleged ‘Banners Broker’ Pyramid Scheme

    breakingnews725BULLETIN: (14th Update 3:39 p.m. ET U.S.A.) Toronto police have arrested “Banners Broker” figures Christopher George Smith of Toronto and Rajiv Dixit of Vancouver.

    Both suspects are 45 and are scheduled to make a court appearance today, police said. The scheme allegedly raised $93 million (U.S.).

    They have been charged with Defrauding the Public of Over $5000, Possession of the Proceeds of Crime, Laundering the Proceeds of Crime, Operating a Pyramid-Selling Scheme and Making False or Misleading Representations under the Competition Act, police said.

    “[T]here are 1000’s of victims worldwide in Banners Brokers pyramid scheme,” police said on Twitter. The remark was attributed to Det. Sgt. Ian Nichol of the Toronto Police Mass Marketing Section.

    And, the department Tweeted, the agency and mass-marketing fraud investigators from the Royal Canadian Mounted Police “worked for 2yrs full time on Banners Brokers pyramid scheme investigation.”

    Also assisting in the cross-border probe were the Competition Bureau of Canada, the Ministry of Government and Consumer Services, the Ministry of Finance, the U.S. Federal Trade Commission, FINTRAC and the Canada Revenue Agency, police said.

    FINTRAC stands for the Financial Transactions and Reports Analysis Centre of Canada.

    “[T]he program’s existence was entirely dependent upon the fee-based entry of new members and little or no real product or service was provided,” police said.

    Banners Broker, a purported “advertising” program similar to the AdSurfDaily Ponzi scheme broken up by the U.S Secret Service in 2008 and a current “program” known as MyAdvertisingPays or MAPS, previously has been described as a criminal enterprise.

    As the PP Blog reported last year, Banners Broker, like similar schemes, appeared to be trying to intimidate members.

    Read the statement by the Toronto Police Service on Banners Broker and the arrests of Smith and Dixit.

    In 2013, the PP Blog received bizarre spam from apparent Banners Broker supporters unhappy about the Blog’s coverage of the “program.”

    The PP Blog’s first reference to Banners Broker was published on June 17, 2012, when the Blog reported that a site that claimed it sold “customers” to Zeek Rewards members also was pushing traffic to Banners Broker and JSS Tripler/JustBeenPaid, the bizarre, 730-percent-a-year “program” purportedly operated by Frederick Mann.

    Mann also was a pitchman for the AdSurfDaily Ponzi scheme. JSS/JBP, which later morphed into a “program” known as ProfitClicking, may have ties to the sovereign-citizens movement. Zeek allegedly was a Ponzi/pyramid scheme that gathered more than $850 million.

    Some HYIP promoters move from scheme to scheme to scheme, creating a condition in which losses mount globally and banks become warehouses for fraud proceeds. The SEC yesterday announced charges against alleged Zeek promoter Trudy Gilmond, whom the agency alleged recruited members for multiple failed schemes.

    See the PP Blog’s tag archive of references to Banners Broker or use the search function near the upper-right corner.

    Also see: “Law Firm’s Name Used In Bid To Dupe Members Of Banners Broker, Profit Clicking, MLM Attorney Says.”

    Within the story, the PP Blog showed a menacing communication it had received in January 2013. The story also shows the interconnectivity of certain online MLM schemes, as does this 2013 story: “TelexFree Affiliate Pitches Appear To Have Been ‘Scraped’ To Drive Traffic To Purported Gold And Silver Venture In Panama; Spam Link Leads To Site That Showcases ‘First Zeek Red Carpet Event’ And ‘Banners Broker’ In Folder Labeled ‘aaronsharazeek’  




  • URGENT >> BULLETIN >> MOVING: FTC Goes To Federal Court To Block Alleged $467 Million Scam Operating Globally Online; International Cooperation Cited In Exposing Colossal Fraud Caper, Officials Say

    David Vladeck of the FTC.

    BULLETIN: UPDATED 3:50 P.M. EDT (U.S.A.) The FTC has gone to federal court to halt what it described as a $467 million, online fraud scheme operating across international borders. The scheme was exposed through international cooperation among the FTC, the Canada Competition Bureau, Service Alberta, the Royal Canadian Mounted Police, the Alberta Partnership Against Cross Border Fraud, the Edmonton Better Business Bureau and the BBB of Southern Nevada, officials said.

    Charged in the case were Jesse Willms, Peter Graver, Adam Sechrist, Brett Callister, Carey L. Milne and several companies.

    Willms, a Canadian, released a statement on his website that described the FTC case as a “disagreement.”

    “We believe our business practices are compliant with the law and are working to resolve this disagreement with the appropriate government agencies,” the statement attributed to Willms read in part.

    The FTC had a far different take.

    Part of the scheme falsely traded on the names of Oprah Winfrey and Rachael Ray while also making false claims of cancer cures and weight loss, the FTC charged. In fact, the FTC said, Winfrey has sued Willms.

    Named corporate defendants by the SEC were: 1021018 Alberta Ltd., also doing business as Just Think Media, Credit Report America, eDirect Software, WuLongsource and Wuyi Source; 1016363 Alberta Ltd., also doing business as eDirect Software; 1524948 Alberta Ltd., also doing business as Terra Marketing Group, SwipeBids.com and SwipeAuctions.com; Circle Media Bids Limited, also doing business as SwipeBids.com, SwipeAuctions.com, and Selloffauctions.com; Coastwest Holdings Ltd.; Farend Services Ltd.; JDW Media LLC; Net Soft Media LLC, also doing business as SwipeBids.com; Sphere Media LLC, also doing business as SwipeBids.com and SwipeAuctions.com; and True Net LLC, also doing business as Selloffauctions.com.

    In addition to using the names of Winfrey and Ray, the scheme also traded on the famous names of CNN, USA Today, CBS, the “60 Minutes” television show and other brands, the FTC said.

    “None of these entities have endorsed or positively reported on any of the 10 Willms defendants’ products,” the FTC said. The agency added that financial service-providers were duped and manipulated into processing payments for the alleged scam, in part through the creation of “dummy” websites designed to sanitize the scheme.

    “Shell corporations” also were used to hoodwink service-providers, the FTC alleged. Consumers were fleeced out of at least $412 million in the scam, which netted nearly half a billion dollars, the agency charged.

    The heart of the scheme was a continuity-billing fraud in which consumers who responded to “free” trial offers were billed for products and services they never requested, the agency said.

    “The defendants used the lure of a ‘free’ offer to open an illegal pipeline to consumers’ credit card and bank accounts,” said David C. Vladeck, director of the FTC’s Bureau of Consumer Protection. “‘Free’ must really mean ‘free’ no matter where the offer is made.”

    A Canadian official said cross-border cooperation was vital as agencies combat online fraud schemes.

    “Internet fraud is a global problem that requires an international enforcement response,” said Lisa Campbell, deputy commissioner of competition for the Competition Bureau of Canada. “International cooperation ensures that fraudsters can’t hide behind borders.”

    Auction fraud also was part of the massive scam, the FTC said.

    “Willms and 10 companies he controls used deceptive tactics in offering ‘free trials’ for various products online, including acai berry weight-loss pills, teeth whiteners, and health supplements containing resveratrol (the supposedly healthful ingredient in red wine), as well as for a work-at-home scheme, access to government grants, free credit reports, and penny auctions,” the FTC said.

    Penny auctions, the agency said, are “online auctions in which consumers must purchase bids, usually for $0.50 to $1 each. Regardless of whether a consumer actually wins a penny auction, the consumer has paid for each bid he or she placed during the auction. However, each bid that is placed raises the price of the auctioned item by a penny.”

    “Willms and his companies obtained consumers’ credit or debit card account numbers, by enticing them with bogus ‘free’ or ‘risk-free’ trial offers that supposedly required only small shipping and handling fees, and also promised phony ‘bonus’ offers just for signing up,” the FTC said.

    Consumers, though, often were “charged for the ‘free’ trial plus a monthly recurring fee, typically $79.95,” the agency said.

    Making matters worse, the agency alleged, consumers also were “charged monthly recurring fees for the so-called bonus offers,” the agency said.

    A purported money-back guarantee was no remedy because “consumers were often unsuccessful in canceling the charges or obtaining refunds, and the process involved time-consuming phone calls and other steps that made the deals far from risk-free.”

    Meanwhile, the “penny auctions” were corrupt, the agency charged.

    “The complaint charges that the defendants’ penny auction offers falsely indicated consumers would receive free ‘bonus’ bids, but those who provided credit or debit card numbers to facilitate future auction buying were hit with charges they did not know about, including $150 for introductory ‘bonus’ bids and $11.95 per month for ongoing ‘bonus’ bids,” the FTC charged.

    Winfrey and Ray never endorsed the program, despite the appearance that they had, the FTC said.

    Affiliate marketers in pursuit of commissions helped the massive fraud scheme go viral, affecting consumers in the United States, Canada, the United Kingdom, Australia and New Zealand, the FTC said. Important details were buried in the “fine print,” the agency charged.

    The complaint was filed in federal court in Seattle. Willms resides in Alberta, according to the complaint. Graver, Callister and Milne are from Utah. Sechrist lives in Pennsylvania.

    Some of the corporate defendants are from Canada. Others are from England, Cyprus, Utah, Idaho and Nevada, according to the complaint.

    “Offshore merchant banking services” were used as part of the scam, the FTC said.

    “Because these corporate defendants have operated as a common enterprise, each of them is jointly and severally liable for the acts and practices,” the FTC said.