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Tag: David A. Smith

  • [EYE-OPENING EXERCISE]: A Modest ‘HYIP’ — But One That Provides A Learning Experience Juxtaposed Against JSS Tripler/JustBeenPaid: Compare Pitches Of ‘Blue Hedge Investments’ And JSS/JBP

    "Blue Hedge Investments," like JSS Tripler/JustBeenPaid, is out there for all of Canada (and other countries) to see.

    UPDATED 2:57 A.M. EDT (U.S.A., MARCH 27) Vague information about JSS Tripler/JustBeenPaid is all over the web. The “opportunity” purportedly operated by Frederick Mann is targeting investors in Canada, the United States and many other countries through conference calls, videos and text pitches.

    The PP Blog has listened to recordings of four JSS/JBP conference calls with Mann as the featured guest. Persons who asked questions during the calls have identified themselves as residents of the Canadian provinces of “Alberta” and “British Columbia” and several U.S. states. One caller suggested he was Jamaican — and Jamaica, like Canada and the United States, has had more than its share of problems with massive fraud schemes.

    See story on combined Jamaica/U.S. allegations against Bertram A. Hill. See story about the guilty plea of Jamaican citizen David A. Smith, implicated by the United States in a spectacular international fraud scheme that involved at least $220 million.

    One of the hallmarks of HYIP fraud is vagueness about an “opportunity.” JSS/JBP, for example, purports to pay a daily return of 2 percent, with Mann accorded the description of “mathematical genius.”

    But Mann — despite the various superlatives attached to his name and the various preposterous claims  — does not tell investors in Canada or the United States (or any other country) where the JSS/JBP “program” is operating from.

    As an exercise in identifying red flags, the PP Blog today is proposing that readers visit the website of “Blue Hedge Investments.” (The URLs are below.)

    Among other things, “Blue Hedge” describes itself as a “truly once-in-a-lifetime opportunity.”

    Promoters of JSS/JBP use similar language when promoting their “program.”

    And “Blue Hedge” — also in vague, JSS/JBP-like fashion — also says this: “BlueHedge Investments is led by a team of well-respected Canadian specialists with vast experience in the offline and online investment market . . .”

    If anything, though, JSS/JBP is even more vague than “Blue Hedge.” JSS/JBP, for example, doesn’t even identify itself with a nation-state.

    Unlike JSS/JBP, “Blue Hedge” plants the seed that its investors earn 9 percent a month, a relatively modest claim in the HYIP sphere.  JSS/JBP, on the other hand, claims 60 percent a month, more than 6.6 times the “advertised” monthly return of “Blue Hedge.”

    While “Blue Hedge” asserts it is interested in “the financial stability of our people today,” JSS/JBP promoters also claim their program is about the people — specifically, “average people.”

    Many people instantly would question any claim that appears on the “Blue Hedge” website, even though its purported payout is far lower than the payout advertised by JSS/JBP and thousands of its affiliates.

    But the sad reality is that many people would question neither the claims of “Blue Hedge” nor the even more extreme (or even more opaque) claims of JSS/JBP.

    Like “Blue Hedge,” JSS/JBP has a “Platinum” program. And like “Blue Hedge,” JSS/JBP is out there for all of Canada (and all of the United States and other countries) to see.

    “Blue Hedge” provides a learning opportunity for all JSS/JBP promoters. The PP Blog encourages readers to visit the “Blue Hedge” site.

    It perhaps is best to start with this page to get a sense of the interest rates while comparing them to JSS/JBP. You’ll see “Invest Now” buttons on the page, but perhaps it is best to avoid clicking on them until you’ve visited the “Blue Hedge” FAQs page and finally this page to assess its content and watch the short video.

    After that, click on the “Invest Now” button and assess its content. It might be one of the best clicks you make all year. (See button on this page.)

  • UPDATE: International Forex Ponzi Swindler David A. Smith Sentenced To 30 Years In U.S. Jail

    David A. Smith. Source: Orange County Jail

    David A. Smith, the Ponzi schemer who swindled investors in the Caribbean and Florida in a caper that gathered more than $200 million, has been sentenced to 30 years in a U.S. prison.

    Smith, a Jamaican citizen who was brought to Florida last year to face the U.S. charges, first must serve a sentence of six and one-half years in the Turks and Caicos Islands. His time there will count toward his U.S. sentence, and U.S. federal prosecutors said he’d finish the balance of his U.S. term in the United States.

    His firm was known as OLINT, which stands for Overseas Locket International Corp.

  • SPECIAL REPORT: Investor In Alleged Florida Forex Caper Arrested For Bankruptcy Fraud; Botfly LLC Ponzi Case Reminiscent Of ASD Case; Female Investigator Called Vile Names; Accused Schemer David Lewalski Shifted Blame To Government, Feds Say

    UPDATED 1:14 P.M. EDT (U.S.A.) A Florida man who allegedly received $1.5 million from an international Forex fraudster now jailed in the United States has been arrested on charges of bankruptcy fraud, federal prosecutors said.

    The three-count indictment against Jon Jerald Hammill, 39, of St. Petersburg, was unsealed yesterday. It marked the fourth major Ponzi-related event in Florida in recent days. The state is the site of some of the most complex fraud investigations in the nation, and the case against David R. Lewalski — from whom Hammill and his company allegedly received money — is no exception.

    Hammill, whose arrest was announced in Washington yesterday by Assistant Attorney General Lanny A. Breuer, was accused of failing “to disclose that he had received more than $100,000″ from Lewalski’s company prior to the filing of his bankruptcy petition” in February 2009. He is further accused of not disclosing his ownership of a shell company into which payments from Lewalski’s Ponzi scheme were routed and not disclosing his business relationship with Lewalski.

    Although Hammill’s Chapter 7 bankruptcy initially was granted in July 2009, U.S. Bankruptcy Trustee Donald F. Walton later reopened the case and sought to revoke Hammill’s discharge for fraud. In court filings, Walton said Hammill invoked his 5th Amendment right against self-incrimination when questioned about his dealings with Lewalkski’s company, which was known as Botfly LLC.

    Breuer is the head of the Criminal Division of the U.S. Department of Justice. The federal probe into the alleged $29 million Botfly Forex caper is being led by U.S. Attorney Robert O’Neill of the Middle District of Florida, with the U.S. Postal Inspection Service in Washington as the lead agency. O’Neill and his predecessor — former U.S. Attorney A. Brian Albritton — have squared off against against a series of spectacular fraud schemes operating in the region.

    Among the cases are the Beau Diamond Ponzi scheme, the David Merrick Ponzi scheme known as TIRN, the $220 million Forex Ponzi scheme of Jamaican David A. Smith and the alleged EMG/Finanzas Forex fraud. Investigators say they have traced proceeds from the EMG/Finanzas fraud to the international narcotics trade. A task force working in the region also did investigative legwork in the alleged AdSurfDaily Ponzi scheme.

    Some of the cases have elements that only can be described as bizarre and deeply disturbing. In the Lewalski case, for instance, it is alleged that Lewalski discussed a plan by which he’d divert blame to the government for his legal predicament in a bid to get his victims to pay for his defense.

    By making the government the bogeyman, Lewalski hoped victims would come to believe that he — as opposed to investigators — offered the best shot of getting back their money, according to court filings.

    At least one person gave Lewalski $50,000 to pay for a lawyer — and this occurred after Lewalski had chartered a private Gulfstream IV jet at a cost of $172,744 to fly from the United States to Belgium one day after he was charged civilly in Florida, according to court filings.

    One women — an attorney for the court-appointed receiver in Florida’s civil case — was made the subject of misogynistic rants by Lewalski, according to court filings. The rants were cited by federal prosecutors who argued successfully that Lewalski should not be released on bond.

    Prosecutors also argued that Lewalski had spent astronomical sums of investors’ money on luxuries in the United States and Europe and advised investors to take the 5th Amendment when questioned. In court filings, prosecutors argued that Lewalski also sought to tamper with witnesses.

    Lewalkski, prosecutors said, told “family members and other potential witnesses to stay quiet and not cooperate with law enforcement.”

    The receiver’s attorney was called a “c[$%!]” and a “Nazi,” according to court filings. In one rant, Lewalski allegedly said, “So f[$%!] her what a bitch.” Court documents also allude to a woman who allegedly was called an “FDLE chick” and described by Lewalski as “nuts” and a “bitch.”

    It was not immediately clear if Lewalski was talking about the receiver’s attorney or a different woman employed by the Florida Department of Law Enforcement  when making the alleged “FDLE chick” remark. In the context of the remark, however, Lewalski is alleged to have discussed a “nuclear option.”

    Separately, the U.S. Postal Inspection Service alleged that Lewalski complained to investors he defrauded about “recent ‘Orwellian’ totalitarian tactics” employed by U.S. investigators in Ponzi scheme cases, instead of accepting accountability for his fraud.

    But even as Lewalski was grumbling that his U.S. assets had been frozen, he allegedly did not tell his investors what had happened to their money and why they had not been paid as promised prior to the seizure. Instead, according to the investigating postal inspector, he talked about money he was able to access in Europe after he left the United States hastily, saying he had as many as six offshore accounts.

    Among Lewalski’s other claims was that he had been “investigated and cleared by the Securities and Exchange Commission,” according to court filings. Members of ASD also have claimed that ASD, which was accused of orchestrating a $110 million international fraud from Florida, was given the green light by the SEC.

    No evidence has surfaced in either the ASD case or the Botfly case that the SEC approved of the companies’ operations. Meanwhile, ASD members also have directed rants at prosecutors and investigators, describing them as “goons,” “Nazis,” merchants of “Satan” and criminals. One ASD member proposed that a federal prosecutor be placed in a medieval torture rack, with ASD members at large drawing straws to determine who got the honor of turning the torture wheel.

    Another ASD member proposed that a “milita” storm Washington in defense of ASD. Still another said that the company’s critics consisted of “Rats, Bed Bugs, Maggots, Cockroaches And Everything Else.”

    Lewalski, 47, operated Botfly from his mother’s home in Bayonet Point, Fla., according to court records.

    After being charged civilly by the state of Florida in April 2010, Lewalski immediately left the United States, spending the next seven months in Europe, according to court filings.

    He is believed to have returned to the United States in October 2010, but investigators said he pretended still to be in Europe. Lewalski was arrested in New York on November 4, 2010. Prosecutors said he was staying in a luxury suite atop the Mandarin Oriental Hotel for which he had paid $143,000 in advance with investors’ money.

    The Mandarin bills itself “the most breathtaking luxury hotel in New York,” and Lewalski’s suite overlooked Central Park, according to court records.

    Visit the site of the court-appointed receiver in the Lewalski Forex Ponzi case.

  • INCREDIBLE: Florida — AGAIN: CFTC Charges Ft. Lauderdale Firm, Principals In Alleged Precious-Metals Scam; ‘Defendants Never Held Or Acquired Any Metals,’ Agency Says

    On the same day the SEC announced charges against two residents of South Florida in an alleged $30 million Ponzi scheme, the CFTC went to federal court and accused two other residents of the region of conducting a precious-metals scheme.

    Charged by the CFTC were James A. Ward of Ft. Lauderdale, and Nathaniel R. Walker of Lauderhill. Also charged was their firm, Kastle & Hawke Inc. of Fort Lauderdale.

    Florida has been plagued by spectacular fraud schemes. Just two days ago, David A. Smith, a citizen of Jamaica, pleaded guilty to charges in a $220 million Ponzi scheme. Last week, the U.S. Court of Appeals for the District of Columbia Circuit ruled that Ponzi-related orders of forfeiture totaling more than $65.8 million in a 2008 civil case would stand against Florida resident Andy Bowdoin, who now is charged criminally in the alleged AdSurfDaily Ponzi scheme. Prosecutors said Bowdoin’s ASD had gathered at least $110 million.

    In the case against Ward and Walker, the CFTC said “the defendants never held or acquired any metals for customers and charged customers interest on non-existent loans.”

    U.S. District Judge James I. Cohn has frozen their assets, amid allegations the company misappropriated at least $319,000 from customers hoodwinked in the scheme. Cohn also ordered books and records to be preserved.

    “To conceal their fraud, the defendants allegedly manufactured and sent false account statements and transaction confirmations to customers,” the CFTC charged.

    “K&H does not hold, nor has it ever acquired, any physical precious metals on behalf of customers,” the CFTC charged.

    When customers wanted to sell the metals they believed they had acquired, Ward manufactured one excuse after another, the CFTC alleged. Customers were told that “rogue” traders were responsible for his inability to sell the metals, according to the complaint.

    And they also were told that the metals could not be sold because of “problems in London,” because markets were closed for the holidays and because “force majeure” — things beyond the company’s control — had occurred, the CFTC charged.

    One of the things that occurred was that the unregistered company had advertised it was selling palladium on a leveraged basis to customers, an unlawful act in itself, the CFTC said.

    On the K&H website, the company told prospects they could take advantage of a “Leveraged Purchase Program” that allowed them to finance up to 77 percent of the costs of the precious metals over five years — “without having to make monthly payments or undergo credit checks,” the CFTC charged.

    Customers were told the company’s approach would lead to hefty profits, but it was all a scam, the CFTC charged.

    In April and May of 2010 — as the firm was explaining to customers why they could not claim their profits even as it was charging them interest on nonexistent loans — Ward withdrew $21,350 in cash from the company’s bank account “and spent nearly $9,000 at a grocery store chain, draining the bank account to a balance of less than $500,” the CFTC charged.

    Read the stunning CFTC complaint.

  • BULLETIN: OLINT’S David A. Smith Pleads Guilty In $220 Million Ponzi Scheme; International Forex Caper Laundered $128 Million, Feds Say

    David A. Smith. Source: Orange County Jail

    BULLETIN: David A. Smith, who presided over a $220 million Forex fraud known as OLINT, has pleaded guilty in U.S. District Court for the Middle District of Florida.

    Smith, 41, is a citizen of Jamaica. He “executed a Ponzi scheme to defraud over 6,000 investors located in the Middle District of Florida and elsewhere out of more than $220 million,” prosecutors said. “Smith led investors to believe that he was investing their money in foreign currency trading, earning 10 percent per month on average. In fact, he was not trading their funds.”

    The case included a conspiracy with unnamed others to launder $128 million, prosecutors said.

    “Considerable investigative support”  was provided by the Financial Crimes Unit with the Royal Turks and Caicos Police Force, the Financial Services Commission in Jamaica, the Special Investigation and Prosecution Team in Turks and Caicos, and the governments of the United Kingdom, Turks and Caicos, and Jamaica, the FBI said today.

    Lead agencies in the United States included U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the FBI and the IRS. Also assisting in the probe were the CFTC and the NFA.

    Smith pleaded guilty to four counts of wire fraud, one count of conspiracy to commit money laundering and 18 counts of money laundering. He was the majority owner in a Lake Mary, Fla., firm known as I-Trade FX LLC, prosecutors said last year.

  • SARASOTA HERALD-TRIBUNE: Convicted Ponzi Swindler Beau Diamond Sentenced To More Than 15 Years In Federal Prison

    The Sarasota Herald-Tribune is reporting that Ponzi swinder Beau Diamond has been sentenced to 186 months in federal prison.

    Sentencing court was conducted this morning.

    The Diamond case is among a number of complex Ponzi or fraud-scheme investigations undertaken by federal prosecutors and investigators in the Middle District of Florida.

    Others include  Traders International Returns Network (TIRN), Evolution Marketing Group/FinanzasForex, the Alpha Trade Group case and the David A. Smith/OLINT case. Prosecutors and investigators in the region also have had a role in the AdSurfDaily case.

  • BREAKING NEWS: OLINT Boss David A. Smith Extradited To United States From Turks And Caicos Islands; Faces Charges In Spectacular Forex-Fraud Case In Orlando Region

    BULLETIN: Agents from U.S. Immigration and Customs Enforcement (ICE) traveled to the Turks And Caicos Islands to take accused Ponzi schemer David A. Smith into custody. Smith has been transported to the United States and is jailed in Florida.

    Smith, who was serving a prison term in the islands for fraud and conspiracy, became the subject of an official request by the United States to extradite him to face federal charges in Florida for bilking investors out of more than $220 million.

    The director of ICE said the Smith fraud posed a danger to the U.S. banking system, and the Department of Homeland Security is involved in the probe of Smith’s business activities.

    “One of ICE-Homeland Security Investigations’ critical missions is investigating the flow of illicit money across U.S. borders and the criminal enterprises behind that money,” said ICE Director John Morton. “Not only do these kinds of financial schemes damage the lives of the thousands of victims, but the international money laundering involved poses a direct threat to the security of the U.S. financial system.”

    Smith was at the head of a Jamaican company known as Overseas Locket International Corp. (OLINT), prosecutors said. In 2006, he started another firm known as OLINT TCI Corp. Ltd. in the Turks and Caicos Islands.

    Both firms were described as “private investment clubs,” prosecutors said.

    Smith also was the majority owner in a Lake Mary, Fla., firm known as I-Trade FX LLC, prosecutors said.

    The scheme was pulled off with the help of unindicted co-conspirators in the United States, prosecutors said.

    The conspiracy was carried out in Seminole County, Fla., and was designed to channel money from the scheme into U.S. banks, prosecutors said.

    Residents of Orange County were affected by the scheme, prosecutors said. They noted that the unindicted co-conspirators were affiliated with a Florida company known as JIJ Investments. Prosecutors did not name the unindicted co-conspirators, describing them as “Directors” of JIJ.

    Federal prosecutors in the Middle District of Florida are involved in several actions targeted at alleged purveyors of massive fraud schemes.

    Assisting in the Smith case are U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), the Internal Revenue Service (IRS), Federal Bureau of Investigation (FBI), Commodity Futures Trading Commission (CFTC), National Futures Association (NFA), U.S. Customs and Border Protection (CBP) and the Royal Turks and Caicos Islands Police Force.

    See earlier story.

  • BREAKING NEWS: Another Spectacular Ponzi Scheme Alleged In Florida; OLINT Operator David A. Smith Charged In Caribbean Forex Caper; Extradition To United States Expected

    BULLETIN: A citizen of Jamaica has been charged by U.S. prosecutors in Orlando with operating a Forex Ponzi scheme alleged to have gathered more than $200 million from more than 6,000 investors.

    David A. Smith had help from unindicted co-conspirators in Florida, prosecutors charged. The office of U.S. Attorney A. Brian Albritton of the Middle District of Florida is handling the prosecution, which seeks the forfeiture of $128 million, a sum of $40,103.90 from a wire transaction that occurred in 2006,  a home in Windermere, Fla., precious gemstones, precious metals and jewelry.

    The conspiracy was carried out in Seminole County, Fla., and was designed to channel money from the scheme into U.S. banks, prosecutors said.

    Residents of Orange County were affected by the scheme, prosecutors said. They noted that the unindicted co-conspirators were affiliated with a Florida company known as JIJ Investments. Prosecutors did not name the unindicted co-conspirators, describing them as “Directors” of JIJ.

    In 2005, Smith formed a Jamaican firm known as Overseas Locket International Corp. (OLINT), prosecutors said. In 2006, he started another firm known as OLINT TCI Corp. Ltd. in the Turks and Caicos Islands.

    Both firms were described as “private investment clubs,” prosecutors said.

    Smith also was the majority owner in a Lake Mary, Fla., firm known as I-Trade FX LLC, prosecutors said.

    Although investors were told their money would be used for Forex trading, Smith was accused of “failing to invest their funds in Forex trading as he had promised.” He also caused fraudulent account statements to be sent to investors over the Internet, prosecutors said.

    Meanwhile, prosecutors accused Smith, who also is in deep trouble in the Caribbean, of transferring “millions of dollars” from investors to his personal accounts “to finance a lavish and expensive life-style” for himself and others.

    Smith, prosecutors said, created a “broad infrastructure” to create the appearance OLINT was engaged in legitimate Forex trading when it was not.

    He has been charged with wire fraud, money-laundering and conspiracy, and is not expected to fight extradition to the United States.

    Albritton’s office is involved in the investigation of a number of highly complex Ponzi and fraud schemes, including the Beau Diamond Forex Ponzi scheme, the Traders International Returns Network (TIRN) case and the alleged Evolution Marketing Group/FinanzasForex fraud case.

    TIRN operator David Merrick pleaded guilty in May to money laundering and conspiracy to commit wire fraud and securities fraud in the TIRN Ponzi scheme.

    In the Evolution Marketing Group/FinanzasForex case, prosecutors said investigators had tied some of the money collected in the alleged scheme to the international narcotics trade. Court filings in the case paint a picture of an incredibly elaborate maze of companies and bank accounts set up to confuse both investors and law enforcement. At least 59 bank accounts, 294 bars of gold and nine luxury vehicles have been seized in the case. One of the cars was a 2008 Lamborghini Murcielago valued at more than $430,000.