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Tag: Financial Fraud Enforcement Task Force

  • BULLETIN: Salt Lake City Man Arraigned In Atlanta On Charges Of Running Ponzi And Fraud Scheme In Which Tens Of Millions Of Dollars Mysteriously Vanished Offshore; Canadian Also Charged In Alleged Caper

    BULLETIN: Two men — one from Salt Lake City, the other from Belleville, Ontario — have been charged by federal prosecutors in Atlanta with operating a Ponzi and fraud scheme in which tens of millions of dollars mysteriously disappeared overseas.

    Thomas Repke, 57, was arraigned today in Atlanta. Prosecutors said he worked with the Canadian man, James Jeffery, 58, to fleece more than $30 million from investors.

    “This indictment alleges a major international investment fraud scheme that defrauded over 100 victims around the country out of tens of millions of dollars, most of which has been transferred to overseas accounts,” said U.S. Attorney Sally Quillian Yates.

    The scheme began in 2006 and centered around a company known as Coadum Capital in which investors were told that they were purchasing shares in hedge funds and that their investment capital was kept in “escrow” accounts and thus not at risk. Participants expected to earn up to 5 percent a month.

    “[A]lthough investors were instructed to and did transmit much of their funds to one or more supposed ‘escrow’ accounts, including one in Atlanta, the money did not stay in any such account,” prosecutors said. “Rather, unbeknownst to investors, Repke and Jeffery transferred over $20 million overseas to accounts in Switzerland and the Mediterranean island of Malta.

    “This money was supposedly invested in a series of hedge funds or other investments operated by a supposed Malta-based trader,” prosecutors said.

    But the investments “produced no earnings at all,” prosecutors said. “[B]y the end of 2007 only a fraction of the transferred funds remained deposited in these European accounts.”

    Regardless, Repke and Jeffery “continued to send account statements every month to investors continuing to represent that their funds remained intact, preserved in escrow accounts, and that monthly earnings of 3-5% continued to accrue,” prosecutors said.

    Both Repke and Jeffery had “no control” over the overseas accounts — accounts “about which they received little or no information,” prosecutors said.

    Investigators obtained correspondence that showed Repke and Jeffery both “were frustrated in their repeated requests to obtain information about where the funds were being held, how they were being used by the trader, and whether and to what extent earnings were being generated,” prosecutors said.

    The SEC referred the case for criminal investigation after bringing an administrative action and lawsuit against Repke and Jeffery in 2008, according to records.

    “Those who prey on the investing public in this way will continue to find themselves facing federal felony charges,” Yates said.

    The investigation was coordinated by the Financial Fraud Enforcement Task Force. prosecutors said Jeffery had not yet made his initial court appearance in the case.

    Repke potentially faces decades in prison, if convicted. He was charged with multiple counts of mail fraud, wire fraud and conspiracy.

    (NOTE: The SEC complaint references a Malta company known as “Exodus Equities Inc,”  which apparently was tied to an entity known as “Exodus Platinum Genesis Fund Ltd.” Also of note for additional case information/filings is the website of Pat Huddleston, the court-appointed receiver in the SEC case.)

  • LETTER TO READERS: Reflections On 1,000 PP Blog Posts, The Lionization Of Fools And An Unprecedented Crime Wave That Threatens National Security And Is Filling Stadiums With Victims

    Dear Readers,

    This is actually Post No. 1,007 since the PP Blog switched to the WordPress platform two years ago this month. We’d hoped to commemorate our 1,000th WordPress post in the actual 1,000th post, but missed the chance because of Breaking News concerning the Financial Fraud Enforcement Task Force’s Operation Broken Trust.

    The PP Blog's Breaking News graphic was stolen and used in a promotion for Data Network Affiliates (DNA) earlier this year. DNA, which purports to be in the business of helping the AMBER Alert prohram rescue abducted children, now apparently has morphed into a company known as OWOW, which has instructed members to advertise a secret cure for cancer.

    Several hours after we reported that the Task Force now was counting investment-fraud victims by the tens of thousands and noting that even deaf people had been targeted in massive scams, we reported that Walmart had joined the “If you see something, say something” terrorism-awareness campaign operated by the Department of Homeland Security (DHS).

    Walmart was instantly and savagely pilloried on YouTube, apparently for holding the view that DHS deserved private-sector help in its work to keep America safe. On. Dec. 6, when the PP Blog first observed the DHS video on YouTube announcing the Walmart partnership, the video had received only 310 views. That number now has shot up to 289,657. YouTube posters called DHS Secretary Janet Napolitano names that could peel paint. We’ll leave it at that, except to say that scores of Americans appear to have emerged as kneejerk critics and appear unwilling to view America’s economic well-being within the lens of national security.

    Indeed, how safe is America — and the world at large — if fraud victims are being counted in numbers that would fill stadiums and vast sums of wealth are being consumed and disappearing down ratholes? In the Task Force announcement, Attorney General Eric Holder said that, since Aug. 16 alone, cases investigated by the Task Force have uncovered losses of more than $10.4 billion. The schemes affected at least 120,000 victims.

    The victims’ count in just this relatively small cluster of cases is more than enough to fill the Rose Bowl in Pasadena or Michigan Stadium in Ann Arbor, America’s largest college-football stadium.

    Just prior to our Operation Broken Trust post — in Post No. 999 — we reported that the AdPayDaily autosurf, which has promoters and members in common with both AdSurfDaily and AdViewGlobal, was showing signs of collapse. Flash forward to Post No. 1,002: In this post, we reported that a New York Internet Marketer had been arrested by the U.S. Postal Inspection Service for cyberstalking.

    Vitaly Borker apparently believed it prudent to use the Internet to threaten to rape women who had received what investigators described as bogus and inferior-quality goods from him. A fair reading of the complaint against Borker shows that he used the same type of gutter language directed at Napolitano on YouTube — you know, for her apparent High Crime of asking Walmart shoppers to be aware of their surroundings in the Age of Terrorism.

    We next reported on a 54-year prison sentence handed down to a former Indiana pastor who duped Christian investors in a Ponzi scheme. After that, we reported that a company that once did business with Steve Renner’s Cash Cards International had been implicated in a massive Forex scheme that affected at least 800 investors.

    Renner was the operator of the INetGlobal autosurf, which the U.S. Secret Service said in February was operating a Ponzi scheme affecting thousands of people, including victims of Chinese descent who may have limited ability to understand English. The Secret Service said an undercover agent had been introduced to INetGlobal by an AdSurfDaily member.

    On Dec. 8, we reported that a Maryland man had been arrested after the FBI intercepted his plot to detonate a car bomb at a military-recruitment center. A similar plot had been unmasked by the FBI in Portand, Ore., on the day after Thanksgiving. It was aimed at a Christmas tree lighting ceremony, meaning it was aimed at children and families.

    Here is one way to look at the alleged Thanksgiving plot: The arrest was announced on Nov. 26. By Dec. 6, crackpots were flooding YouTube with paint-peeling comments about Napolitano and the terrorism-awareness campaign. Two days after that, on Dec. 8, a man was arrested in the Maryland plot. He allegedly also talked about blowing up Andrews Air Force Base, which happens to be the home base of Air Force One, which happens to be the aircraft used by the President of the United States.

    We haven’t even written about Wikileaks and the arrest in Britian of Julian Assange. Wikileaks’ sympathizers reacted by bringing DDoS attacks, apparently based on the belief that the best way to show support for Assange was to send out an army of bots to disrupt the websites of businesses that did not support Assange.

    By week’s end, Prince Charles and Camilla, the Duchess of Cornwall, were surrounded by a mob unhappy about the skyrocketing costs of getting a college education in the United Kingdom. Civility, it seems, can be cast out the door in a country minute and replaced by the taunts of a mob.

    Yesterday, as we again sought to commemorate our 1,000 post, word arrived about the apparent suicide of Bernard Madoff’s son on the second anniversary of his father’s arrest.

    There is no doubt — none whatsoever — that Ponzi = Pain. There also is no doubt that the Internet has ushered in an era of unprecedented, mass-produced, viral crime. Criminals have been aided in their nefarious pursuits by crackpots who employ no editorial filters and simply create or repeat lies that institutionalize crime as an occupation and even celebrate it.

    At the precise moment in time in which Americans and other citizens of the world could benefit most from serious words and serious research backing those words, some of the world’s great publishing companies are struggling to make ends meet. Print circulation is down. Journalists are losing jobs. Designers and salespeople are losing jobs.

    The switch to electronic publishing platforms has been accompanied by piracy, wanton theft and trademark infringement that further erodes the value of words and intellectual property, undermines the economy and adds to concerns about national and international security. People, including well-intentioned people, simply copy-and-paste entire editorial wells from one site to another. The public becomes confused about the original source of material, which often is shoe-horned to fit a specific agenda.

    If former President Bill Clinton, for example, hands out an award for commitment to the environment, it gets spun by alleged scammers as an endorsement of their company. Images of Walmart, Warren Buffet, Donald Trump and Oprah Winfrey frequently are used in promos for multilevel-marketing (MLM) and direct-sales companies to which they have no ties.

    Earlier this year, the PP Blog’s Breaking News graphic was stolen by a member of Data Network Affiliates (DNA), an MLM company that routinely targets promos at Christians and, among other things, has claimed it is helping the AMBER Alert program rescue abducted children. DNA now apparently has morphed into a company known as OWOW, which is asking members to suggest that a product known as TurboMune cures cancer.

    For months, members of an MLM company known as MPB Today have helped themselves to Walmart’s name and branding materials, claiming that a $200, one-time purchase can result in free groceries and gasoline for life. One MPB Today member apparently believed it prudent to drive business to the firm by depicting the President of the United States and the U.S. Secretary of State, a former member of Walmart’s board of directors, as Nazis.

    This is not “freedom,” as the scammers would have you believe; it is theft and piracy on the high electronic seas, plain and simple. It also often is the case that this specific brand of theft also gets mixed with appeals to faith, meaning the scammers are seeking to pluck heartstrings and separate Believers from their money.

    There simply is no way that any government or branch of government can be at all places at all times. Although it is fashionable to describe efforts to battle crime in the Age of the Internet and the Age of Terrorism as an effort by Big Brother to assign each individual citizen his or her own bureaucrat to bring commerce and freedom to a screeching halt, such opinions often are simple rants that lack any real-world context.

    Within hours of the PP Blog’s publication of a story about the alleged Portland plot, the Blog was bizarrely assailed by an MLM aficionado for DNA/OWOW as a tool for Israel. Michael Chertoff, a former federal judge, federal prosecutor and DHS secretary, was described as a “suspect” in the 9/11 attacks, which the poster blamed on Israel while calling Chertoff an Israeli scum bag.

    As noted above, when Janet Napolitano announced a simple partnership with Walmart to encourage citizens to be aware of their surroundings, she encountered vicious name-calling — and it all happened during the same week yet-another bombing plot was unmasked, the Task Force was noting that America’s largest stadiums were not large enough to accommodate recent victims of financial fraud, DDoS attacks were aimed at companies deemed by third parties to be unfriendly to Wikileaks and the future king of England and his wife were surrounded by an angry mob.

    Even if one is willing to assume that Wikileaks seeks to serve a higher, noble purpose, directing DDoS attacks at businesses and government sites hardly helps Assange elicit sympathy or understanding. He lost an important round in the PR war last week, as did the unthinking crowd that assailed Napolitano and the mob that heckled Prince Charles and the Duchess.

    The lionization of crackpots of all stripes is rapidly emerging as a dangerous, unintended consequence of the Internet — as are all the tortured claims that MLM products treat or cure cancer, create vast sums of wealth for ordinary participants and the tortured claim that appropriating the names of Walmart and Winfrey and Trump and Buffet and Clinton is just another word for freedom.

    Far from promoting freedom, the crackpots and criminals are promoting anarchy. They do not seek to compete in either a free marketplace of commerce or a free marketplace of ideas. Rather, they seek to commit crimes on a global scale and to fill entire stadiums with victims — even as would-be terrorists speculate about throwing cocktail bombs into military-recruitment centers and shooting soldiers and staff as they flee the flames through the doors.

    In Portland, meanwhile, the idea was to kill wide-eyed children contemplating the miracles of Christmas and Santa Claus with a fireball that also would consume their parents.

    We conclude this 1,000 post commemoration with a simple thought: Death and taxes are not the only two certainties of life. It is equally certain that law enforcement needs the proactive participation of the public more than ever. It is one thing to direct reasonable criticism at agencies and public officials; it is quite another to cheer against the people who are responding to unprecedented security challenges while trying to make sure the stadiums fill up with football fans, not victims.

  • BULLETIN: National Investment-Fraud Sweep Dubbed ‘Operation Broken Trust’ Nets 532 Defendants; AG Holder Says Capers Caused More Than $10 Billion In Losses; ‘Undercover Operations’ Part of Task Force Arsenal

    U.S. Attorney General Eric Holder and members of President Obama’s Financial Fraud Enforcement Task Force said this morning that a nationwide sweep known as “Operation Broken Trust” has netted 343 criminal defendants and 189 civil defendants.

    Among the targets of the sweep were purveyors of Ponzi schemes, affinity fraud, prime bank/high-yield investment scams, foreign exchange (FOREX) frauds, business-opportunity fraud and other similar schemes, investigators said.

    Some of the defendants “filed for bankruptcy in an attempt to avoid claims by victim-investors,” investigators said.

    The combined losses in the schemes, which affected 120,000 investors, were estimated at $10.4 billion, Holder said. He was joined in the announcement by FBI Executive Assistant Director Shawn Henry; U.S. Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami; U.S. Postal Inspection Service (USPIS) Chief Postal Inspector Guy Cottrell;  Deputy Chief Rick Raven of the Internal Revenue Service Criminal Investigation (IRS-CI); Acting Director of Enforcement Vince McGonagle of the U.S. Commodity Futures Trading Commission (CFTC); and other members of the Financial Fraud Enforcement Task Force.

    “With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” said Holder.  “To the public: be alert for these frauds, take appropriate measures to protect yourself, and report such schemes to proper authorities when they occur. And to anyone operating or attempting to operate an investment scam: cheating investors out of their earnings and savings is no longer a safe business plan — we will use every tool at our disposal to find you, to stop you, and to bring you to justice.”

    The calling card of the schemes was greed, Henry said, adding that undercover probes are part of the Task Force’s arsenal.

    “This operation highlights the scope of this problem, and its impact on individuals from all walks of life,” said Henry.  “This one sweep alone involves fraud schemes that harmed more than 120,000 victims. The schemes may change, but the underlying greed does not. Working with our partners, we in the FBI will use all the investigative techniques in our arsenal, including undercover operations, to bring those responsible to justice.”

    Khuzami, meanwhile, said the law-enforcement community was pursuing multiple forms of fraud.

    “Fraud by well-known companies or high-profile executives gets the biggest headlines, but other scams are equally devastating to hard working families and retirees,” said Khuzami. “Victims want justice and don’t much care who the fraudster is or how unique the fraud. Today’s actions underscore that law enforcement agrees and will pursue fraud in whatever form.”

    Read Holder’s announcement, made this morning in Washington.

    President Obama authorized the Financial Fraud Enforcement Task Force in November 2009. In January 2010, Holder ventured to Florida to speak about the aims of the Task Force and to warn scammers that the government was serious about putting them in jail.

  • PROMISSORY NOTES SCAM: Feds Bust Another Alleged ‘Wholesale’ Business; Jenifer Devine Faces Wire Fraud Charge In Ponzi Case Brought By Obama Task Force; ‘Wholesale Business Was Wholesale Fraud,’ U.S. Attorney Says

    The FBI has arrested Jenifer Devine, saying the Fair Lawn, N.J., woman was operating a promissory notes Ponzi  scheme through a purported wholesale business that claimed to sell clothing and electronics.

    Similar charges were brought earlier this year in New Jersey against Nevin Shapiro. Prosecutors said Shapiro, who has pleaded guilty, was running an $880 Ponzi scheme in Florida that purported to sell groceries wholesale.

    Like the case against Shapiro, the case against Devine, 39, was brought by President Obama’s interagency Financial Fraud Enforcement Task Force.

    “As alleged in the complaint, Devine’s wholesale business was wholesale fraud,” said U.S. Attorney Paul Fishman, whose office also prosecuted Shapiro. “Victims who were promised huge returns paid the tab for [Devine’s] vacation and designer goods. This case reminds investors: always be wary of a sure thing.”

    More than 15 investors plowed more than $8 million into Devine’s scheme, operated through a company known as Devine Wholesale of Carlstadt, N.J. Investors were told they were helping Devine finance the business and would receive a speedy return of 25 percent. Some investors were shown bogus lists of inventory Devine said she sold, prosecutors said.

    “In reality,” prosecutors said, “Devine Wholesale had no active wholesale clothing or electronics business during the relevant time period, and had virtually no business sales.”

    In classic Ponzi fashion, “Devine instead used new investor funds to make principal and interest payments to existing investors, as well as to fund her own lifestyle. Devine stole tens of thousands of dollars to pay for personal expenses, including a Royal Caribbean cruise and purchases at luxury retailers such as Burberry, Gucci and Coach. Devine also transferred over $26,000 to her mother, who had no role with Devine Wholesale,” prosecutors said.

    Investors losses were estimated at $2 million, but may be higher, prosecutors said. If convicted, Devine faces up to 20 years in federal prison and a fine of up to $1 million.

    Read the criminal complaint against Devine.

    “It is a difficult thing to convince people to be prudent and cautious with their financial
    investments when people like Ms. Devine make grandiose promises,” said David Velazquez, assistant special agent in charge of the FBI’s office in Newark.

    “Criminals know how easily greed can override good judgment and they use that basic human flaw to victimize other people,” Velazquez said about the promissory-notes scheme that promised 25 percent interest. “We hope this matter will serve the public as an educational tool in preventing investment fraud as the disruption and dismantling of these schemes remains an important part of our work at the FBI and with our partners.”

    Separately, Paul J. LoPapa, 64, of Livingston, N.J., pleaded guilty today in federal court in New Jersey to duping investors investors in a scheme involving fictitious overseas investments sold though a company known as Skyline Equities Inc.

    LoPapa also pleaded guilty of defrauding the Social Security Administration of $145,000 in disability payments beginning in 2001, claiming he had not worked since 1990.

    Skyline Equities’ referred to its investment program as the “Bank Guarantee Program,” which was billed as a “sophisticated international financial instrument facilitated through well-known financial institutions,” prosecutors said.

    Investors dumped about $815,000 into the scam, prosecutors said.

    The money was used to pay for “five high-end Mercedes-Benz automobiles” and other personal purchases, prosecutors said.

    LoPapa potentially faces decades in prison.

  • UPDATES/NEWS: ASA Ponzi Forum Now Redirects To CashX.com; Arthur Nadel Gets 14 Years In Florida Ponzi Case Brought By Obama Task Force; Former Indiana Pastor Who Bilked Christians Convicted Of Securities Fraud

    President Obama formed the interagency Financial Fraud Enforcement Task Force in November 2009. He later became the subject of an attack ad by an affiliate of the purported MPB Today "grocery" MLM.

    UPDATED 10:56 A.M. EDT (U.S.A.) The ASA Monitor Ponzi and criminals’ forum now is redirecting to a website operated by CashX.com, a Canadian payment processor that hawks MasterCard debit cards and says it permits customers to withdrawn money to Liberty Reserve.

    Liberty Reserve is a Ponzi-friendly payment processor purportedly headquartered in Costa Rica after earlier operating from Panama.

    Meanwhile, confessed Ponzi schemer Arthur Nadel — who briefly went on the lam from Florida in early 2009 as his $390 million scheme was disintegrating and became known as one of the original “mini-Madoffs” — has been sentenced by a federal judge in New York to 14 years in prison.

    It is effectively a life sentence for Nadel, who is 77 and one of several senior citizens implicated in U.S. Ponzi schemes.

    At the same time, a former clergyman from Indiana who told congregants it was their “Christian responsibility” to become pitchmen for his then-undiscovered bond scheme has been convicted of nine counts of securities fraud.

    Vaughn Reeves, 66, is scheduled to be sentenced next month. The jury deliberated only four hours before returning the verdict against Reeves, himself a senior citizen. Congregants believed they were helping raise money for church-building projects, but it was a scam that led to foreclosure proceedings against eight places of worship. (See link to AP report below.)

    Claims made by Reeves are similar to claims made by the Data Network Affiliates (DNA) MLM program, which told members that churches had the “MORAL OBLIGATION” to help bring business to the Florida-based firm and qualify for commissions ten levels deep. DNA purports to be in the license-plate data collection business, claiming it can help law enforcement and the AMBER Alert program recover abducted children.

    Incongruously, DNA also purports to sell a “protective spray” that shields cameras from taking photographs of license plates. Equally incongruously, the company said that it could offer a free cell phone with unlimited talk and text for $10 a month. The company later backtracked on the claim, bizarrely saying it studied pricing structures only after announcing it had become the world’s low-price leader while acknowledging it hadn’t vetted its purported vendor for the service.

    DNA figure Phil Piccolo later threatened to sue critics. Earlier, Dean Blechman, who said he was the company’s CEO before resigning in February, threatened to sue critics. DNA withheld the announcement of Blechman’s departure for nearly a week and then misspelled his name. DNA also described Blechman as the “future” CEO, even though Blechman had described himself as the current CEO.

    Blechman complained to the PP Blog about “bizarre” events at DNA.

    ASA Monitor, which is referenced in court filings as a place from which the alleged Pathway To Prosperity (P2P) Ponzi scheme was pitched and was a site from which the purported “grocery” MLM operated by Florida-based MPB Today was pitched, suddenly announced on Oct. 12 that it was closing.

    Like MPB Today, DNA also was pitched from Ponzi and criminals’ forums.

    The ASA Monitor closure announcement coincided with a flap in which an ASA forum moderator sought to muzzle critics of the MPB Today program, which is being targeted at Christians, foreclosure subjects, Food Stamp recipients, senior citizens, people of color and members of the alleged AdSurfDaily (ASD) Ponzi scheme.

    ASD also operated from Florida before the U.S. Secret Service seized tens of millions of dollars in August 2008, amid allegations of wire fraud and money-laundering. Robert Hodgins, an international fugitive wanted by Interpol in a narcotics-trafficking and money-laundering case filed after an undercover probe by the U.S. Drug Enforcement Administration in Connecticut, provided debit cards to ASD, members said.

    Nadel’s scheme, meanwhile, operated in the Sarasota area.

    “Through his massive Ponzi scheme, Arthur Nadel greased his own pockets and financed his lavish lifestyle, using money his clients relied on him to invest,” said U.S. Attorney Preet Bharara of the Southern District of New York.

    “He cheated his elderly and unwitting victims out of their retirement savings and consigned others to poverty,” Bharara said. “The message of [yesterday’s] sentence should be loud and clear — we will continue to work with our partners at the FBI to find the perpetrators of financial fraud and use every resource we have to bring them to justice.”

    U.S. District Judge John G. Koeltl ordered Nadel to forfeit $162 million, five airplanes, a helicopter and real estate in Florida, North Carolina and Georgia.

    The prosecution of Nadel was brought in coordination with President Obama’s Financial Fraud Enforcement Task Force. U.S. Attorney General Eric Holder traveled to Florida earlier this year to warn fraudsters that the United States was serious about putting scammers in prison.

    By September, an affiliate of MPB Today had created a video in which Obama was depicted as a left-handed saluting Nazi who cowered to U.S. Secretary of State Hillary Clinton, who was depicted as a drunk. First Lady Michelle Obama, the mother of two daughters, was depicted as having experienced an embarrassing gas attack in the Oval Office after sampling beans at a Sam’s Club store.

    Clinton, depicted in the sales promo as “Hitlary,” knocked out Michelle Obama after barging into the Oval Office bawling and carrying a bottle of wine. Clinton, the mother of one, was the first woman ever appointed to the Walmart board of directors.

    Some MPB Today affiliates have claimed Walmart is affiliated with MPB Today and that the government backs the MLM program, which appears to have accounts at at least two banks in the Pensacola area. One of the banks is operating under a consent agreement with the FDIC.

    Read the AP story on the Vaughn Reeves scheme in Indiana.

  • KABOOM! Florida — Again: Palm Beach Operators, Firms Charged With Running Scheme-Within-Scheme In Tom Petters’ Ponzi; More Than $1 Billion Plowed Into Rathole, SEC Says

    EDITOR’S NOTE: The SEC has been particularly active in Florida in recent weeks. Now, the agency once again has gone to federal court to allege a spectacular fraud involving people and companies in the Sunshine State. This one involves more than $1 billion and is linked to the Tom Petters’ Ponzi case in Minnesota.

    Two Florida men and their companies assisted convicted Ponzi schemer Tom Petters in keeping his $3.65 billion fraud afloat by hatching a scheme-within-a-scheme that assured hedge-fund investors that their money was safe, the SEC said in a lawsuit.

    The scheme occurred prior to the filing of criminal charges against Petters in 2008, according to court documents. Petters, who also faces an SEC lawsuit, was convicted of running the Ponzi scheme last year. In April, he was sentenced to 50 years in federal prison.

    SEC investigators now say Bruce F. Prévost, 50, of Palm Beach Gardens, and David W. Harrold, 51, of Del Ray Beach “falsely assured their investors and potential investors that the flow of their money would be safeguarded by collateral accounts and described a phony process for protecting their assets.

    “When Petters was unable to make payments on investments held by the funds they managed, Prévost, Harrold, and their firms concealed it from investors by concocting sham note exchange transactions with Petters,” the SEC said.

    Calling it a “betrayal” that had cost investors more than $1 billion, Robert Khuzami, director of the SEC’s Division of Enforcement, said the Florida men parlayed the losses of others into gains for themselves.

    “Prévost and Harrold portrayed themselves as guardians of their hedge fund investors while in fact they facilitated Tom Petters’s fraudulent scheme through lies and deceit,” Khuzami said.

    The case was filed in Minnesota.

    Prévost, Harrold and their companies — Palm Beach Capital Management LP and Palm Beach Capital Management LLC — pocketed more than $58 million in fees from the scheme, the SEC charged.

    At the same time, they raised additional money to plow into the scheme “by borrowing money from two Cayman Islands funds that were also established by Prévost and Harrold,” the SEC charged. The agency identified the offshore funds as Palm Beach Offshore Ltd. and Palm Beach Offshore II Ltd.

    “From 2004 through at least as late June 2008, the defendants funneled money into the Petters Ponzi scheme by selling interests in the Palm Beach Funds to investors throughout the United States,” the SEC charged. “Investors in the Palm Beach Funds included individuals, foundations, family trusts and other hedge funds. The Funds invested all investor contributions into the Petters Ponzi scheme. Of the approximately $3.65 billion invested in the Petters Ponzi scheme at the time of its collapse, the Palm Beach Funds accounted for more than $1 billion.”

    Florida has been plagued by Ponzi schemes and fraud schemes. In January, U.S. Attorney General Eric Holder ventured to the state to introduce President Obama’s Financial Fraud Enforcement Task Force.

    Holder announced the Task Force at a speech in the Palm Beach area, using the event at the Forum Club of the Palm Beaches to drive home the message that Ponzi schemers, mortgage fraudsters and financial criminals are going to have many sleepless nights in the months ahead.

    “To those who see the victimization of others as an avenue to wealth, take notice,” Holder warned. “If you fabricate a financial statement, if you propagate an investment scheme, if you are complicit in an act of financial fraud, you are writing your ticket to jail.”

  • BULLETIN: ASA Monitor Ponzi And Criminals’ Forum Says It Is Closing; Threads Go Missing En Masse; Closure Coincides With Undercover Operations By Law Enforcement And USDA Probe Of MPB Today

    BULLETIN: UPDATED 7:37 P.M. EDT (U.S.A.): The ASAMonitor Ponzi and criminals’ forum — the forum from which the purported MPB Today “grocery” program was being promoted and countless other fraud schemes were being promoted — suddenly has announced that the forum is closing.

    The announcement, which appeared today in red type, was made by “Wanrou,” whose ID says he is “ASA Administrator.” Content from the forum appears to have been deleted or hidden en masse.

    “ASA forum has been a place where members can get information, discuss, share, debate, to educate and be educate about possibilities and risks of online money making programs for the last few years,” the Wanrou post said.

    “Sadly we can no longer keep it online as a free discussion forum because of time consuming and financial reasons,” the post continued.

    “Thanks you all for your long time support and best wishes to your present and future online endeavors.”

    The forum’s sudden closure coincided with reports in recent months that U.S.-based law-enforcement agencies were conducting undercover stings both online and offline and using informants to bring both criminal and civil charges against financial fraudsters.

    It was not immediately clear if ASAMonitor would seek to reopen as a so-called “private” forum. Court records show that undercover operations also have infiltrated “private” forums and that members of the forums who had been scammed have provided helpful information to investigators.

    The sudden closure of ASAMonitor also coincided with yet-another flap in the MPB Today thread. An antiscam poster was specifically warned by a moderator yesterday to refrain from his efforts to inform ASA members about developments in the MPB Today story and his reading of events at MPB Today.

    Specific claims about MPB Today are being investigated by the U.S. Department of Agriculture. The program has been pitched to Food Stamp recipients, people of faith, Ponzi scheme victims, people of color, senior citizens, college students and opponents of President Obama, among others.

    Obama created an entity known as the Financial Fraud Enforcement Task Force in November 2009 to do battle with fraudsters. In January, U.S. Attorney General Eric Holder warned in Florida that the U.S. government was serious about putting scammers in prison.

    ASAMonitor previously closed the MPB Today thread after warning an antiscam poster to back off from challenging “Ken Russo,” a poster promoting the MPB Today program. The thread later was opened after what a Mod described as a “cooling off period” had passed. In an earlier closure of the thread, links to the PP Blog’s coverage of the MPB Today story were deleted from the forum and later restored.

  • Pensacola Fraudsters Sentenced To Federal Prison; Pinnacle Quest International Vendors Sold ‘Tax And Credit Card Debt Elimination Scams,’ Federal Prosecutors, IRS Say

    “They helped form a series of sham business entities and then promoted fraudulent debt elimination tactics intended for the sole purpose of concealing income from the IRS.” — Victor S. O. Song, chief, IRS Criminal Investigation

    As the U.S. Department of Agriculture was conducting a “review” of claims made by affiliates of a purported “grocery” business in Pensacola, Fla., that dispenses “gift cards” to winners in a 2×2 matrix cycler, a federal judge in Pensacola was handing out prison sentences to defendants convicted in a tax-fraud and debt-elimination scheme.

    All in all, nine promoters were implicated in the Pinnacle Quest International (PQI) case. Four were sentenced to prison in July. Two others will be sentenced in October, and three were sentenced yesterday for their roles in an elaborate fraud in which PQI served as an “umbrella organization for numerous vendors of tax and credit card debt elimination scams,” federal prosecutors said.

    Eugene Casternovia received 7 years in prison. Arthur Merino, meanwhile, was sentenced to 40 months. Mark Lyon, the third defendant sentenced yesterday, cooperated with prosecutors and received a sentence of 18 months.

    Among the PQI vendors was the Southern Oregon Resource Center for Education (SORCE), which “sold bogus theories and strategies for tax evasion,” prosecutors said.

    “For fees starting at $10,000, SORCE assisted its customers in the creation of a series of sham business entities in the United States and Panama,” prosecutors said. “Other tax-related PQI vendors denied the legitimacy of the income tax system on various theories and provided customers with a ‘reliance defense’ that consisted of a paper trail of frivolous correspondence which a client could allegedly use as evidence of good faith if the client were prosecuted.”

    Financial Solutions, another PQI vendor, sold “fraudulent schemes for eliminating credit card debt,” prosecutors said.

    “Financial Solutions charged its customers thousands of dollars for a series of letters to send to credit card companies disputing the lawfulness of the underlying debt,” prosecutors said. “The product was wholly ineffective, and customers typically were sued by their creditors and often forced into bankruptcy.”

    At the same time, yet-another PQI vendor known as MYICIS “operated as a sophisticated, computerized ‘warehouse bank,’” prosecutors said.

    “MYICIS was a single bank account in which customers pooled their money,” prosecutors said. “MYICIS was promoted to PQI’s clients as a method to hide their assets from the IRS as a result of the pooled nature of the account. MYICIS had 3,000 clients and approximately $100 million in deposits over a three year period.”

    A veteran IRS agent declared the business entities tied to the PQI case a “sham.”

    “These defendants are now being held accountable for their criminal behavior,” said Victor S. O. Song, chief, IRS Criminal Investigation. “They helped form a series of sham business entities and then promoted fraudulent debt elimination tactics intended for the sole purpose of concealing income from the IRS. Their tactics were fraudulent. There is no secret formula that can eliminate an individual’s tax obligation.”

    In July, Arnold Ray Manansala was sentenced to 12 years in prison; Dover Eugene Perry, meanwhile, was sentenced to 10 years. Michael Guy Leonard was sentenced to nine years and one month, and Mark Daniel Leitner was sentenced to five years.

    The trial in Pensacola took up a full month. Wayne Hicks, the operator of My Icis Inc., already was serving a five-year prison sentence.

    FBI Director Robert Mueller has warned Congress at least twice this year about a “shadow” banking system that is a threat to U.S. national security.

    In November, President Obama formed the Financial Fraud Enforcement Task Force to attack the problem with white-collar and other forms of fraud. It is billed the “broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.”

    MYICIS was a topic of discussion on known Ponzi scheme and fraud forums such as TalkGold. In May, the U.S. Postal Inspection Service referenced the forums in filings in a criminal case against an alleged Ponzi scheme known as Pathway To Prosperity.

    In recent months, a Pensacola business known as MPB Today (My Premier Business Today) has been operating an MLM program that purports to sell “groceries.” The program has been advertised on TalkGold, and other known Ponzi forums.

    One MPB Today affiliate attempted to sell the program by creating a video animation and depicting President Obama and Secretary of State Hillary Clinton as Nazis. Clinton was called “Hitlary” in the promo.

    Others have attempted to sell the MPB Today business “opportunity” by linking it to the federal Food Stamp program administered by the Department of Agriculture. The USDA announced earlier this month that it was conducting a “review” of affiliate claims.

    This video promo for Pensacola-based MPB Today is targeted at Food Stamp recipients.

    Still other MPB Today affiliates have focused on recruiting prospects by telling them they’d receive “gift cards” from Walmart. At least one promo on YouTube shows an envelope inside an envelope that had been mailed through the U.S. Postal Service.

    Such an approach is consistent with the practices of “cash-gifters” — people who use the mails to promote chain-letter pyramid and tax schemes. The inside envelope in the YouTube video showed that at least one MPB Today affiliate had been paid with a prepaid Visa card purchased at Walmart. The envelope also contained a Walmart gift card.

    In the YouTube video, the MPB Today affiliate appeared to be surprised about what he’d just received in the mail.

    One promo after another for MPB Today has emphasized the gift cards. Still other affiliates have produced videos that show checks drawn on an FDIC-insured bank in Pensacola that has been operating since January under a consent agreement with the FDIC.

    Florida has been plagued by mortgage foreclosures. MPB Today is targeting foreclosure subjects in a video pitch, as are many affiliates. Affiliates also have targeted the unemployed, senior citizens, people of faith and members of the alleged AdSurfDaily (ASD) Ponzi scheme.

    ASD also was based in Florida. The company is known to have attracted affiliates who participated in tax, debt-elimination and cash-gifting schemes. At least one ASD affiliate has been linked to a group that sought to imprison federal judges and litigation opponents in debt cases. Another affiliate filed papers in federal court that purported to show that a bank could be defeated in a foreclosure case by filing a bond consisting of $21 in “silver coinage.”

    At least one MPB Today promoter positioned the grocery company as an opportunity for religious members of ASD to make up losses in the failed autosurf. The U.S. Secret Service has seized tens of millions of dollars from bank accounts linked to ASD.

    Florida records show that MPB and its associated grocery company — Southeastern Delivery — have operated by at least five names since 2006. MPB Today operator Gary Calhoun was ordered by the U.S. Food and Drug Administration to stop violating federal law in promotions for a product marketed as a treatment for Lou Gehrig’s disease, among others.

    ASD President Andy Bowdoin also operated numerous companies in Florida. according to records.

  • Nevin Shapiro, Florida Man Who Ran ‘Grocery’ Ponzi Scheme, Pleads Guilty; Feds Say Con Gathered At Least $880 Million While Fraudster Leased Mercedes For $4,700 A Month

    When Nevin Shapiro was arrested in New Jersey for running a wholesale grocery scam in Florida, the FBI described the scheme as a “perfect example of greed run amok.”

    Shapiro, who was charged both criminally and civilly earlier this year after investigators uncovered his long-running Ponzi scheme, now has pleaded guilty to securities fraud and money-laundering.

    Shapiro, 41, once was a prominent Miami Beach businessman. His Ponzi scheme began in 2005 and eventually mushroomed to nearly the size of convicted Fort Lauderdale Ponzi schemer Scott Rothstein’s $1.2 billion fraud.

    Florida has been plagued by Ponzi schemes.

    Rothstein, a disbarred attorney, was sentenced earlier this year to 50 years in federal prison. Shapiro faces up to 30 years in prison when sentenced in January. His scheme netted at least $880 million.

    Shapiro spent about $26,000 per month on mortgage payments on his $5.3 million residence in Miami Beach, while directing about $7,250 per month for payments on a $1.5 million dollar Riviera yacht and roughly $4,700 per month for the lease of a Mercedes-Benz, prosecutors said

    Viewed on a yearly basis, the payments on the residence, yacht and car alone consumed more than $450,000 — and yet Shapiro’s purported business produced no sales.

    Earlier this year, a veteran FBI agent said the Shapiro case was about naked greed that preyed on “unsuspecting investors.”

    “This case is a perfect example of greed run amok,” said FBI Special Agent in Charge Michael B. Ward.

    Although purportedly in the business of buying groceries in a lower-priced market and selling them wholesale in markets in which they would fetch higher prices, Shapiro’s company largely was a mirage that conducted virtually no legitimate business after 2004 and sustained itself by paying investors with the money of other investors, prosecutors said.

    The case was brought by elements of President Obama’s Financial Fraud Enforcement Task Force.

  • Michael Goldberg Pleads Guilty In $100 Million Ponzi Scheme Featuring Bogus ‘Diamond’ Sales And Bogus Ties To JP Morgan Chase Bank; Gov’t Describes Scammer As Financial Predator And Pitchmen As ‘Feeders’

    EDITOR’S NOTE: The story of Michael Goldberg’s long-running Ponzi scheme is one that also includes a form of domain-name fraud. Goldberg, for example, created a website that used the name of JP Morgan Chase. Scammers routinely seek to piggyback off well-known brands to separate people from their money, sometimes using the names of famous firms to cover their tracks or create “legitimacy” out of thin air. Such domain schemes may feature the unauthorized use of a company’s name in a domain registration or violate trademarks in other ways. Fraudsters also may register  a .org domain to plant the seed that a purported business “opportunity” is connected with a charity or register a name that is very close to the name of a well-established company, perhaps by adding words to the company’s name or varying the spelling of a company’s name. If you’ve been following our coverage of Data Network Affiliates, Narc That Car/Crowd Sourcing International and MPB Today, for instance, perhaps you’ve noted that .org websites were used by affiliates to promote the companies — even though none of the multilevel-marketing (MLM) firms is a charity.

    Here, below, the story of a Ponzi scheme that used domain fraud to fleece investors.

    The wantonness of Michael S. Goldberg’s 12-year Ponzi scheme was stunning. He told clients he invested in “diamond contracts” when he did not.

    And Goldberg, 39, of Wethersfield, Conn., also told clients he invested in “distressed assets from JP Morgan Chase Bank,” federal prosecutors said. Goldberg, though, did not invest in distressed Chase assets.

    What he did, prosecutors said, was create a web domain that used the Chase name, supplementing his web of lies by creating documents that used Chase’s name and the URL of the bogus Chase website so investors could not discover the fraud, prosecutors said.

    Not to be outdone, Goldberg also paid “finder’s” fees to attract new business and created bogus domains in the names of other companies, prosecutors said, referring to the compensated pitchmen as “feeders.”

    “When an investor questioned Goldberg about his business relationships, either with Chase or with any other company, he often created false documents and other items to induce investors to believe that his business relationships were legitimate, including inventories and/or manifests, contracts, business checks, bank statements, business cards and company identification cards,” prosecutors said.

    “Goldberg also created domain names in the names of actual companies, including Chase, that would be listed on false documents in case an investor attempted to verify the authenticity of the documents,” prosecutors continued. “In addition, Goldberg opened actual bank accounts in the names of the companies to whom he purported to be selling foreclosed business assets, without the permission of those companies, that could also be used to create the false impression that he had a business relationship with the companies.”

    A top federal prosecutor described the fraud, which duped 350 people into plowing $100 million into nonexistent diamond contracts and nonexistent Chase deals that paid “returns” in Ponzi proceeds, as overwhelming.

    “For 12 years, this defendant lured hundreds of investors with one false promise after another, the end result being financial misery for many of them,” said U.S. Attorney David B. Fein of the District of Connecticut.

    Losses may total more than $30 million, prosecutors said.

    Meanwhile, a veteran FBI agent described Goldberg as a financial predator.

    “Michael Goldberg’s actions have devastated the financial security of hundreds of innocent investors,” said Kimberly K. Mertz,  special agent in charge of the New Haven division. “The FBI, along with our law enforcement and regulatory partners, will continue to police the actions of those preying upon the investing public.”

    Aside from a brief period in 1997, Goldberg hadn’t dabbled in diamonds — and “he did not have any relationship with Chase,” prosecutors said.

    Goldberg, who confessed to the scheme last year, faces up to 60 years in federal prison after his guilty plea to three counts of wire fraud. Sentencing is scheduled for December. The investigation was conducted by elements of President Obama’s Financial Fraud Enforcement Task Force.

  • EDITORIAL: Animated Attack On Obama Goes Missing From MPB Today Affiliate’s Sales Arsenal; PP Blog Declines Request From Affiliate’s MLM Sponsor To Remove Story That Describes Bizarre Sales Pitch Painting President As Nazi

    Regular readers of the PP Blog know that it supports the efforts of President Obama’s Financial Fraud Enforcement Task Force to weed out the purveyors of schemes who brought the U.S. and much of the world economy to its knees. Obama is a Democrat.

    What readers may not know is that the Blog is written by a Republican who celebrates America’s entrepreneurial spirit, its market economy, its job-creators, its Great Defenders of Freedom, its Great Guardians of Liberty.

    The PP Blog concerns itself with matters of interest to readers who embrace online commerce and see the Internet as an outlet that is pivotal to future economic expansion. How wonderful would it be, say, if Americans and the other peoples of the world who are living in poverty could harness their entrepreneurial spirits and the power of the Internet to engage in legitimate commerce and elevate the standard of living worldwide?

    And how wonderful would it be if companies and individuals who already are benefiting from financial success could use the Internet to create a legitimate turbine that generates sustainable jobs that pay a pride-producing wage and freelance sales and vendor positions that create bright financial futures?

    Although the PP Blog focuses on business and generally avoids politics, today it makes an exception: When the President of the United States — regardless of party — is attacked to drive business to an online multilevel-marketing (MLM) firm, it must be noted for posterity that the MLM sphere has reached a new and deeply disturbing low.

    To call the anti-Obama, animated screed by an affiliate of MPB Today “tasteless” would be a gross understatement. It harms MPB Today, which is the subject of a “review” by the U.S. Department of Agriculture amid affiliate claims the company has been endorsed by the government. Various government agencies — regardless of what political party controls the White House and the Congress — have warned repeatedly for years that one of the scammer’s most important tools is the shovel that plants the seed that the government endorses a “program” or “business opportunity.”

    MLM “opportunities” are infamous for planting this cancer-spreading seed. Members of AdSurfDaily, for instance, planted the seed that President George W. Bush had given ASD President Andy Bowdoin an award for a lifetime of business achievement. Bowdoin fanned the pollination of the seed by taking his “award” on the road with him and even posing with it.

    The clear aim of the claim was to make prospects believe that ASD could not possibly be a scam because the President of the United States would not give an important business award to a scammer.

    It turned out that the “award” actually was a memento for making campaign donations to the National Republican Congressional Committee. In effect, Bowdoin had made the donations to the NRCC in return for banquet tickets. Records show that Bowdoin made the donations during a period of time in which federal prosectors say he was operating an international Ponzi scheme that perhaps ensnared more than 100,000 people.

    It is a virtual certainty that Bowdoin, who’d been charged with felonies in Alabama in a previous securities swindle and was given a suspended jail sentence, used Ponzi proceeds to make the donations.

    Harm spreads virally when such bogus seeds are planted and take root on the Internet.

    But getting back to the matter of the MPB Today affiliate’s Obama-bashing sales pitch . . .

    Walmart and Walmart’s Sam’s Club name now have been harmed because the MPB Today affiliate used the name of Sam’s Club in the animated attack, which painted Obama and Secretary of State Hillary Clinton as Nazis — with Obama as a cowering Nazi and Clinton as a drunken one wearing “puke colored” clothes purchased from Big Lots, a discount retailer.

    This occurred while other MPB Today affiliates were claiming that MPB, which dispenses Walmart gift cards to winners in the MPB 2×2 matrix cycler, was under “contract” with Walmart, that MPB members were “partners” with Walmart, that MPB sells food “vouchers” that can be exchanged for Walmart gift cards and that the MLM program was “Govt. certified with Food Stamps!”

    As incredible as it seems, Michelle Obama — the First Lady of the United States — was depicted in the affiliate’s animation as experiencing an embarrassing gas attack in the Oval Office after sampling “beans” at a Sam’s Club store. A dog depicted in the pitch more or less said that the First Lady was stinking up the joint.

    Good grief!

    The pitch also harms the image of U.S. business in general because it sends the message that “anything goes” in American Capitalism as long as it returns a profit, the precise message U.S. companies now under indictment or investigation were sending when they brought the financial sector to its knees.

    Meanwhile, it specifically harms online business. Much of the world already believes the Internet is one giant cesspit, in no small measure because of the business practices of certain MLM programs and affiliates of MLM programs.

    At the same time, it harms the Republican party, which is trying to make gains in the upcoming midterm elections. It would be easy, for example, for the Democrats to seize on the message that the sales pitch for MPB Today is just another example of wretched GOP excess and hatred embedded in code. The most bizarre thing about the pitch is that it seems to presume that it is a perfectly acceptable business practice to alienate MPB members and prospects who might be Democrats and Obama supporters — as well as Republicans who actually respect and admire the President even if they disagree with his policies and do not share his political philosophy.

    Even though the MPB Today affiliate’s precise party or political affiliation is not known, it seems clear that the affiliate sees nothing wrong with mixing business with inflammatory, divisive politics,  and is not enthusiastic about the current Democratic leadership. In this sense, it also harms the Democratic party. Political pranksters and Obama opponents could paint the MPB pitchman as a Democratic saboteur or a Tea Party activist seeking to create dissension in the ranks, something that could inure to the benefit of Republicans.

    Most of all, though, the pitch hurts America. Much of the world looks to America for both financial and moral leadership. What the world got in the context of the promotion for MPB Today is yet-another impossibly ham-handed attempt to sell an MLM product at any price — even at the price of American prestige.

    Segments of the MLM trade already are infamous for their inability to sell products without lying, for resorting to gutter tactics, for using sales pitches to reimagine products as something they are not and for setting the stage for tens of thousands of people to get fleeced in one spectacular scam after another that goes “viral” on the Internet.

    Today the PP Blog received a request from a person who described herself as the sponsor of the MPB Today affiliate who produced the anti-Obama screed to “delete” the Blog’s stories on the reprehensible sales pitch.

    “The animated short video on MPB with Hilary and Obama was created by a member I sponsored into MPB and the film has since been taken down,” the sponsor noted. “The member agrees it may have been in poor taste and chose to delete it. Please do the same.”

    Welcome to the often-bizarre world of MLM — a world in which the affiliate who authored a political attack on the President of the United States to gain payments from a 2×2 cycler matrix pushed on known Ponzi forums such as ASAMonitor  “agrees” only that the pitch “may have been in poor taste” and the dutiful sponsor seeks to make sure the the record gets deleted.

    Although the PP Blog verified that the sales pitch had been deleted from the animation site, the Blog is declining to delete its coverage of the matter. All people engaged in MLM need to see it. If they are interested in being taken seriously, they need to condemn it.

    MPB Today should issue a statement that condemns it.

    In May 2009 — just days after the Obama administration announced a crackdown on international financial fraud — the PP Blog received a request from KINGZ Capital Management to delete a story about the AdViewGlobal (AVG) autosurf’s claim that it had secured KINGZ as an offshore wire facilitator to make it easier for Americans (and other peoples of the world) to send money to an obvious Ponzi scheme that had risen from the ashes of ASD, yet another Ponzi scheme

    The PP Blog declined the request. KINGZ later was banned by the National Futures Association for turning a blind eye to the actions of Trevor Cook, a now-convicted felon who operated an international Ponzi scheme that caused investor losses of at least $158 million. The scheme traded on religion. A federal judge called it “wretched, tawdry and cheap.”

    History will record that AVG made the claim about  its new relationship with KINGZ on the very same day in May 2009 that Obama himself announced the fraud crackdown. By June 25, 2009, AVG suspended autosurf cashouts, taking an unknown sum of money sent in by members with it. It is known that many AVG members also were members of ASD, the subject of a racketeering lawsuit and two federal complaints that sought the forfeiture of more than $80 million. The government won both forfeiture cases. The decisions by U.S. District Judge Rosemary Collyer now are under appeal by Bowdoin.

    It also is known the ASD victims have been targeted in promotions for MPB Today. If that’s not enough, it also is known that at least one MPB Today affiliate’s pitch page includes links to at least 100 “surfing” programs, as well as a link to Data Network Affiliates (DNA).

    DNA, yet another MLM program, purports to collect license-plate data that can aid law enforcement and the AMBER Alert program rescue abducted children. Even as DNA and affiliates are claiming to be interested in helping law enforcement, the company says it is selling a spray product that prevents cameras from snapping photographs of license plates at intersections that use electronic systems to enforce traffic laws.

    As DNA is doing this, it also is telling churches that they have the “MORAL OBLIGATION” to recruit affiliates for a purported mortgage-reduction program targeted at people who are facing foreclosure. Meanwhile, MPB Today also is targeting foreclosure subjects in sales pitches, and some MPB affiliates are using religion in sales pitches to attract MLM members.

    Both MPB Today and DNA are operating in Florida, which has one of the highest concentrations of foreclosures in the United States and is near the top of the list in U.S. bank failures.

    So, no. The PP Blog will not delete its coverage of the MPB Today affiliate’s attack on Obama.

    All of America — all of the world and all of the MLM universe — needs to see that the President of the United States was right in May 2009 when he announced the fraud crackdown and was right in November 2009 when he announced the formation of the Financial Fraud Enforcement Task Force.

    The PP Blog has no doubt — none whatsoever — that corrupt elements within the MLM universe are doing everything in their power to use the Internet to bleed wealth from hard-working Americans and other hard-working peoples of the world, and that the corrupt transfer of wealth is leading to losses of billions of dollars globally. Simply put, these reprehensible — if not downright criminal business practices — are a money grab on a colossal scale.

    Proceeds from fraud schemes are difficult to trace. Money moves at the speed of an electronic impulse. Any number of nefarious enterprises, including narcotics traffickers, organized crime and terrorist groups, could be tapping into the fraud stream. There is no doubt that some of the criminal enterprises are dressed up as legitimate MLMs or employ a direct-sales business model that pays commissions to attract new money.

    Stand strong, Mr. President. Your efforts to turn off this criminally gushing Ponzi and fraud spigot not only are commendable, but also are in the interest of U.S. national security, the safeguarding of which is your highest duty to the American people.

    The photos below are for posterity. We are publishing them even as we wonder if nothing is off limits if it helps an MLM offer convert — and even as we wonder why the MLM trade seems so willing to repeatedly attribute its image problem to only a “few bad apples” while simultaneously calling the industry’s critics “haters.”

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