PatrickPretty.com

Tag: FINRA

  • ALERT! On Heels Of SEC’s Complaint Against Alleged Latvian Hacker Accused Of Manipulating Stock Prices By Hijacking Brokerage Accounts, FINRA Warns Of Plots Targeting Email Accounts

    “Investors who suspect that their email account has been hacked should immediately notify their brokerage firm and other financial institutions, and anyone who suspects they have been defrauded should file a complaint with FINRA.” — Gerri Walsh, vice president for Investor Education, Financial Industry Regulatory Authority, Jan. 26, 2012

    The Financial Industry Regulatory Authority (FINRA) yesterday issued an alert and regulatory notice, saying that it “has received an increasing number of reports involving investor funds being stolen by fraudsters who first gain access to the investor’s email account and then email instructions to the firm to transfer money out of the brokerage account.”

    FINRA’s announcement occurred on the same day the SEC charged that a 34-year-old Latvian trader “broke into” customers’ brokerage accounts between June 2009 and August 2010 and made trades to manipulate the prices of stock he owned to create a personal windfall while causing losses to customers and broker-dealers.

    In just one 32-minute period on Oct. 26, 2009, Igors Nagaicevs “generated more $14,000 in illegal profits” by twice taking a position a NYSE-listed security, driving up the stock price by purchasing shares through a hacked account and then “liquidating his position at a profit.”

    All in all, Nagaicevs repeated his fraudulent scheme 159 times over 14 months, manipulating the prices of “104 different NYSE and Nasdaq securities” and pocketing more than $850,000 in illegal profits, the SEC charged.

    Nagaicevs, in effect, caused his hacking targets to lose at least $2 million while passing the bill for the losses to broker-dealer firms, which reimbursed the affected customers, according to the SEC complaint in federal court.

    FINRA did not reference Nagaicevs in its alert yesterday, but warned that email intrusions were on the rise.

    “In some instances, the perpetrators appear to have obtained customers’ brokerage information by accessing customers’ email accounts and searching contact lists or emails sent from the account,” FINRA cautioned in its regulatory notice.

    After breaching the email accounts, FINRA said, the scammers typically “email brokerage firms from customers’ personal email accounts with instructions to wire funds to an account, often overseas, controlled by the perpetrator.”

    Document forgeries may follow the initial email chicanery, FINRA said.

    “The instructions may be accompanied or followed by fraudulent letters of authorization also emailed from compromised email accounts. In some instances, firms have released funds after unsuccessfully attempting to verify emailed instructions by phone. In at least one case, the fraudulent email stressed the urgency of the requested transfer, pressuring the firm to release the funds before verifying the authenticity of the emailed instructions.”

    Read the FINRA Alert.

    Read a new alert from the FBI, the Financial Services Information Sharing and Analysis Center (FS-ISAC) and the Internet Crime Complaint Center (IC3) that warns that scammers are using devious email plots to siphon cash from “banks, broker/dealers, credit unions and other institutions.”

    NOTE: If you follow the criminal madness on the various Ponzi-scheme boards, you’ll notice that the new alert from the FBI, FS-ISAC and IC3 cites the type of scam-talk frequently seen on the huckster forums.

    An outtake from the alert (emphasis added):

    “The excuse is typically based on an illness or death in the family which prevents the account holder from conducting business as usual.”

  • ‘DAVE’ UPDATE: JSS Tripler 2 (T2) Blocks Public Access To Forum; Purported ‘Admin’ Claims Members Distorting ‘The Facts’ As He Announces ‘Scan’ Of Member-Critics On MoneyMakerGroup; Faith Sloan Chides Legendary Huckster ‘Ken Russo’ With ‘Oopsies’

    UPDATE: “Dave,” the purported “admin” of an increasingly bizarre HYIP known as JSS Tripler 2 (T2), has blocked public access to the T2 forum.

    T2, which purportedly was born after a meeting of Ponzi-forum minds, is using payment processors notoriously friendly to Ponzi and fraud schemes. The “program” is trading on the name of a different Ponzi scheme even as it preemptively denies that T2 itself is a Ponzi scheme and advertises a return of 2 percent a day on top of referral commissions.

    But payouts can’t be made because an AlertPay account in the name of “Chris,” an apparent one-time business partner of “Dave,” was frozen, “Dave” has asserted.

    The action blocking the public from the forum was taken because naysayers were copying information from the forum and using it to make critical posts elsewhere, according to “Dave.”

    Forum closures, post deletions, traffic blockages and leeching off the name recognition of other “programs” often are signatures of scams-in-progress. (See July 2009 story on the roller-coaster ride of the AdViewGlobal (AVG) forum, which rose from the carcass of the alleged AdSurfDaily Ponzi scheme and was accompanied by threats that AVG critics would be banned, sued or lose their Internet connections.) Similar claims have accompanied events at T2.

    Purported ‘Scan’ Of MoneyMakerGroup

    And “Dave,” posting on the T2 forum as “foradmin,” also claims he has performed “a scan over on [MoneyMakerGroup”] to “see who is turning against us and promoting T2 as a scam.”

    “Dave” did not say precisely what his “scan” entailed or how he intended to hold naysayers accountable for their off-site posting activities. Nor did he explain how scanning MoneyMakerGroup for T2 traitors could help T2 solve its core problem: the apparent blockage of the “Chris” AlertPay account that was used to launch T2 in the fall of 2011.

    Although “Dave” and “Chris” purportedly are battling electronically across continents, “Dave” purportedly is telling T2 members there is reason to be hopeful that onetime T2 business partner “Chris” will stop being a wretch long enough to get the “program” restarted, according to forum posts.

    But even the amount purportedly trapped in the AlertPay account when the freeze ensued and things purportedly turned sour between “Dave” and “Chris” is in dispute. “Dave,” according to forum posts, has claimed at least two separate sums: $200,000 and $160,000.

    The reporting disparity only leads to more questions about T2. “Dave,” according to forum posts, is advocating for T2 members not to file AlertPay disputes. T2 says it sells “dream positions” (DPs) for $10 each and something called “dream matrices” (DMs) for $20.  T2 bills itself as the place “WHERE YOUR DREAMS COME TRUE.”

    With a representation of a sparking-silver  crescent moon encasing the phrase “2%” in glowing gold — and against a backdrop of twinkling stars in multiple sizes — T2 goes about the business of impressing website prospects.

    Among the veteran hucksters in its ranks is Ponzi-forum legend “Ken Russo.”

    OINKER ALERT: ‘Ken Russo’ Assesses Criminality Of ‘Chris’

    “Ken Russo” — a man whose fraud bona fides only grow as he leads participants into one train wreck  after another and habitually posts his “earnings” in forums listed in federal court filings as places from which Ponzi schemes are promoted — claims to have communicated with “Chris” and decided that the lack of follow-up communications from “Chris” suggests that “Chris has “committed a serious crime” and that he “should cooperate fully at this time.”

    Whether “Ken Russo” called police on “Chris” is unclear. Also unclear is how any police investigation would proceed once officers determined that “Ken Russo,” too, was promoting a “program” whose advertised annualized return was on the order of 730 percent — with recruitment commissions on top of that — while simultaneously insisting it was not a Ponzi scheme after having been born on a Ponzi forum listed in federal court files and claiming to be trying to rebirth itself from Thailand.

    The word “MoneyMakerGroup” is spelled out by a fraud victim in longhand in a 2008 evidence exhibit in the Legisi HYIP scheme, which triggered both civil (SEC) and criminal investigations (U.S. Secret Service) and charges. Legisi, another Ponzi forum darling, allegedly gathered more than $72 million and sparked an undercover probe by the Secret Service, which assigned an agent to pose as an interested investor.

    Mazu.com operator and forum huckster Matthew J. Gagnon was charged both criminally and civilly in the Legisi case, with the SEC describing Gagnon as “a danger to the investing public.” Civil judgments totaling more than $2.5 million have piled up against Gagnon. The evidence exhibit filed in the case (referenced above and partially displayed on the right) shows “Money Maker Group.com” in longhand, along with Gagnon’s name and phone number in longhand.

    “Dave” asserted last week that “Chris” would be arrested — and then “Dave” purportedly left England for Thailand, apparently with the expectation that an unidentified police agency would mop up on “Chris” after “Dave” boarded a plane for the Indochina Peninsula.

    Thailand now has emerged as the purported venue from which “Dave” now claims he is back in communication with “Chris,” after “Chris” purportedly had ducked him in England when both men were in the country simultaneously.

    After being subjected to arrest threats, “Chris,” according to Dave, is starting to understand that he is in an impossible legal thicket and is displaying a willingness to solve the purported AlertPay problem.

    “Chris,” according to “Dave,” apparently also recognizes that T2 members who live in England might pose a localized threat to “Chris,” something that reportedly has made “Chris” more amenable to making sure money gets back in the hands of T2 members.

    “Dave” did not say what police agency he purportedly called on “Chris.” Whether “Chris” will construe “Dave’s” purported actions and the prospect of local menacing by individual T2 members as extortion bids is unclear.

    Despite preemptively denying T2 is a Ponzi scheme, “Dave,” appears not to recognize that prosecutors might construe at least one of his forum remarks as a virtual confession that T2 was selling unregistered securities as investment contracts and positioning the “program” as a passive investment opportunity.

    “Dave,” according to “Dave,” worked his “ass” off and created a condition under which members “can sit and watch TV and make a fantastic return.” Meanwhile, the T2 website claims that “Dream Positions are perfect for the ‘passive type’ member.”

    Faith Holds Forth

    HYIP aficionado Faith Sloan has trained her sights on both “Dave” and “Ken Russo.”

    Sloan, who published a “JSS Tripler2 (T2) Calculator” on her Blog and speculated that her “$1500 outlay of cash” compounded for 75 days would morph into an “account value of $6,623.75” of which “$5,123.75” would be profit, announced that “Dave” booted her off the T2 forum — apparently for making him look bad.

    Events at T2, she now ventures, may be “borderline insane.” And “Dave” may be “EXTREMELY INCOMPETENT” or perhaps “just a little SCAMMER boy” — if not a “hybrid mix.”

    In July 2010, the Financial Industry Regulatory Authority (FINRA) ran a public-awareness campaign that warned about HYIP scams that spread on social-media sites. FINRA described the HYIP sphere as a “bizarre substratum of the Internet.”

    The awareness campaign occurred against the backdrop of criminal charges being filed by the U.S. Postal Inspection Service against Nicholas Smirnow, a one-time bank robber and drug dealer and the alleged operator of the Pathway To Prosperity HYIP fraud scheme.

    Pathway To Prosperity generated more than $70 million and created 40,000 victims from 120 countries, according to court filings.

    Whether Sloan acquainted herself with FINRA’s public-awareness campaign about HYIPs and documents by Professor James E. Byrne that explained the alleged fraud behind Pathway to Prosperity is unclear. Also unclear is whether Sloan is aware that the U.S. Department of Justice has spotlighted the Pathway To Prosperity case as an example of international mass-marketing fraud.

    What is clear is that T2’s asserted payout rate is nearly as absurd as Pathway to Prosperity’s. It’s also clear Faith Sloan — despite her T2 calculator — is publicly challenging fellow HYIP purveyor “Ken Russo” to get real.

    “Ken Russo,” Faith Sloan declares on her Blog, is “a crybaby!”

    And “Ken Russo,” she asserts, made a bad call on a program known as “Dollar Monster” and has “NOT made any money with his $24000.00 in JSSTripler2 . . .”

    “Oopsies,” she chides “Ken Russo.”

    Whether “Ken Russo” actually has $24,000 riding in T2 is unclear.

     

  • SEC Names 3 Defendants In Alleged $16 Million Credit-Card ‘Merchant Portfolio’ Ponzi Scheme Targeted At Mormons; Records Show Schemes Within Schemes Dating Back Years

    EDITOR’S NOTE: If you’re keeping a Bubba Blue notebook on how to have a Ponzi scheme as opposed to shrimp, here is an entry: an alleged “merchant portfolio” Ponzi scheme.

    Ponzi and fraud schemes often use impressive-sounding terminology to separate people from their money. Schemes typically mushroom to consume millions of dollars when investors — who sometimes become commission-based promoters and effectively act as unregistered brokers and dealers — accept a firm’s extraordinary claims at face value, ignore red flags such as outsized returns or engage in willful blindness because choosing to see is bad for profits.

    In June 2010, the SEC charged Joseph A. Nelson, Anthony C. Zufelt, David Decker, Cache Decker and five companies “in connection with three related Ponzi schemes largely targeting the Mormon community.” The complaint was filed in Utah and alleges schemes within schemes dating back at least to 2005.

    As 2011 came to a close, the SEC named three additional defendants in a separate, Nelson-related complaint also filed in Utah. Named in the year-end complaint were Kevin J. Wilcox, Jennifer E. Thoennes and Eric R. Nelson.

    Eric Nelson is Joseph Nelson’s brother. He is accused of deceiving investors by creating “fictitious bank account statements reflecting balances in his brother’s accounts that were far in excess of the actual amounts in those accounts.”

    Wilcox and Thoennes are accused of solicitation fraud

    Joseph Nelson, Wilcox and Thoennes told investors “that Joseph Nelson and his companies were engaged in the business of purchasing ‘merchant portfolios’ of credit card processing accounts, holding them for a certain period of time, and then selling them for a profit to financial institutions, such as banks.”

    “Many” of the investors were “fellow members of the Church of Jesus Christ of Latter Day Saints” whom Joseph Nelson “identified and targeted through church connections and during church functions,” the SEC charged.

    But “Joseph Nelson and his companies never purchased or sold a single merchant portfolio,” the SEC charged.

    “The money invested with Joseph Nelson and his companies was instead used by Nelson to make incremental payments to investors in a Ponzi-scheme fashion, to pay his associates, including Wilcox and Thoennes, and to pay his own lavish personal expenses, as well as those of other family members,” the SEC charged.

    Affinity fraud is a major problem in Utah. In June 2010, the FBI said thousands of people in the state had been victimized by Ponzi schemes and cases of investment fraud that caused Utah residents to lose an estimated $1.4 billion.

    SEC Warns About Scams That Use Social-Media Sites To Fleece The Masses

    In a separate, unrelated action yesterday, the SEC charged an Illinois-based investment adviser with offering to sell fictitious securities on LinkedIn, a social-media site.

    Social media increasingly are being used to sanitize schemes and help them mushroom, a top SEC official said.

    “Fraudsters are quick to adapt to new technologies to exploit them for unlawful purposes,” said Robert B. Kaplan, co-chief of the SEC Enforcement Division’s Asset Management Unit.

    Charged in an SEC administrative action yesterday was Anthony Fields, 54, of Lyons, Ill.

    The agency alleged he “offered more than $500 billion in fictitious securities through various social media websites.”

    On LinkedIn, for example, he allegedly used “discussions to promote fictitious ‘bank guarantees’ and ‘medium-term notes.’”

    Read the SEC order against Fields, Anthony Fields & Associates and Platinum Securities Brokers. See this SEC Investor Alert on social-media fraud.

    Revisit this July 2010 PP Blog story on a FINRA warning about HYIPs and scams that use social media to proliferate. See this Nov. 2, 2011, PP Blog editorial on a threat by AdLandPro — a purported social-media site — to sue RealScam.com, an antifraud forum.

    Among other collapsed schemes, the alleged AdSurfDaily and Pathway To Prosperity Ponzi schemes were promoted on AdLandPro. A recent thread at AdLandPro is promoting OneX, which also is being promoted by ASD President Andy Bowdoin while he awaits trial on criminal charges of wire-fraud, securities fraud and selling unregistered securities.

    Among the screaming headlines in OneX-related content on AdLandPro is this one:

    “Are You in Deep Money Trouble? See Me at Once!”

     

  • MoneyMakerGroup Ponzi Forum ‘Temporarily’ Closes ‘JustBeenPaid’ Thread After Bickering Between Former Club Asteria Pitchman And Pitchman For ‘New’ Program Trading On JustBeenPaid’s Name

    We’ve mentioned it before — and we’ll mention it again. In July 2010, the Financial Industry Regulatory Authority (FINRA) described the HYIP sphere as a “bizarre substratum of the Internet.”

    It was as good a description as any, and here is yet another case in point:

    The MoneyMakerGroup Ponzi forum said today that it “temporarily” closed its thread for the “JustBeenPaid” Ponzi scheme owing to bickering between “10BucksUp” and “lolalola.” JustBeenPaid, which is trading on the names of Warren Buffett and Oprah Winfrey, makes users affirm they are not government spies and purportedly began a transition in August to “offshore” servers. Members have been grumbling for weeks.

    “10BucksUp” rose to Ponzi forum prominence earlier this year through his efforts to promote the Club Asteria HYIP, which is trading on the names of the World Bank and the American Red Cross. “10BucksUp”  also promoted the JustBeenPaid HYIP while discouraging members from filing chargebacks with AlertPay for the good of all JustBeenPaid investors.

    “lolalola” now is hawking something called JSSTRIPLER2 or T2, which apparently is trading on the name of JustBeenPaid’s purported JSS Tripler arm.

    Although “10BucksUp” insists the purported new program is merely a “copycat” of the JustBeenPaid program, “lolalola” claims that, “[F]rom what I understand from the Admin is they did not trademark the brand or do they hold a copyright on the name… so he is free to use it.”

    In essence, two fraud programs now appear to be trading on the same name — but both “10BucksUp” and “lolalola” appear to be more concerned about clashing with each other than whether the schemes have (or are) stealing cash on a grand scale.

    Or something like that . . .

    “lolalola” is simultaneously promoting something called Zeek Rewards.

    “10BucksUp” recently has promoted Club Asteria, JustBeenPaid, Ad2Million and Cherry Shares. All of the programs are in a state of decay or outright disappearance. Cherry Shares is cited in litigation in Canada, and Club Asteria is cited in litigation in Italy.

    MoneyMakerGroup is listed in U.S. federal court filings as a place from which Ponzi schemes are promoted. So is TalkGold, another Ponzi forum.

  • UPDATE: Club Asteria, Cherry Shares, ‘JustBeenPaid’ Promoter ’10BucksUp’ Falsely Claims PP Blog Posts As ‘ISPY’ On MoneyMakerGroup Ponzi Forum; HYIP Apologist Taunts U.S. Law Enforcement In Bizarre Post

    The bizarre descent into chaos of a failing “program” that claimed to be moving to “offshore” servers and once made its participants swear they were not government spies or media lackeys has gotten stranger yet.

    Poster “10BucksUp,” who’s now flogging the JustBeenPaid “program,” falsely claimed on the MoneyMakerGroup Ponzi forum today that the PP Blog posts on MoneyMakerGroup as “ISPY” and published a link to the Blog on the forum to discredit him.

    The PP Blog is not “ISPY” and does not post on MoneyMakerGroup under any identity. Nor does the Blog communicate with “ISPY” in any fashion, know his (or her) identity or encourage  “ISPY” directly or indirectly to post links to the Blog. The Blog has never encouraged any member of MoneyMakerGroup — or any other Ponzi scheme forum — to post links to the Blog.

    It is somewhat common for posters on Ponzi boards, including so-called “naysayers,” to post links to the Blog’s coverage of schemes-in-progress or schemes gone bust. It also is somewhat common for Ponzi board promoters to exhibit paranoia about the Blog’s reporting and even claim the Blog is part of a U.S. government operation.

    Prior to asserting that “ISPY” was the PP Blog, “10BucksUp” accused ISPY of threatening him. ISPY denied threatening “10BucksUp.”

    “10BucksUp” rose to Ponzi forum prominence as a pitchman and apologist for ClubAsteria, which became the subject of a probe by the Italian securities regulator CONSOB in May, had its PayPal account frozen, slashed weekly payouts to members and then eliminated the payouts.

    Meanwhile, “10BucksUp” also acknowledged today that he was a member of the collapsed Cherry Shares HYIP. In June, Cherry Shares was referenced in freeze and trade orders brought by The Autorité des marchés financiers (AMF), the securities regulator for the province of Quebec in Canada.

    The acknowledgement by “10BucksUp” of his Cherry Shares involvement means that he was participating in a second “program” that had come under government scrutiny — but nevertheless plowed headlong into JustBeenPaid.

    Earlier this month, “10BucksUp” advised members of JustBeenPaid that late-entry members were engaging in hurtful and “drastic measures” if they filed disputes with AlertPay. Among other things, JustBeenPaid has asserted it is a “private association.”

    The AdViewGlobal (AVG) autosurf made the same claim prior to its collapse in June 2009. AVG was one of the so-called AdSurfDaily clones — each of which launched (and collapsed) after the August 2008 seizure by the U.S. Secret Service of tens of millions of dollars in a Ponzi scheme investigation.

    Today’s false MoneyMakerGroup claims about the PP Blog also occurred against the backdrop of a securities fraud case brought by the SEC against Jody Dunn, an alleged pitchman for Imperia Invest IBC. Imperia Invest also was promoted on MoneyMakerGroup and TalkGold, and the SEC charged that Dunn had promoted it blindly and relied on claims made by the purported opportunity, rather than conducting any actual due diligence.

    Millions of dollars directed at Imperia Invest went missing, the SEC charged.

    “You want to arrest me? [G]o ahead,” 10BucksUp wrote on MoneyMakerGroup today. “Send a Secret Service/US Seal/intergalactic commando force in my little 3rd world village. Afterall, that is what some Americans think of us right? We all should live under your whims, at what you dictate as legal and not illegal. And then when somebody else invoke that ‘power’ against you, you cry ‘dont tread on me’ or ‘taxed enough already[.”]

    “Go ahead with your crusade, Mr ISPY/Patrick Pretty/Twerp,” 10BuckUp continued. “Clean up the world of garbages like us. There are millions of us. I hope you can finish up in your lifetime.”

    10BucksUp did not say whether he believed U.S. and other world citizens unwise to the ways of the Ponzi pitchman should simply remain silent after they recognize they’ve been scammed and permit fraudsters to steal their money. Nor did he say whether he believed the U.S. government was making a mistake in prosecuting fraudsters who have disappeared with tens of millions of dollars in recent cases such as Legisi and Pathway to Prosperity — in an era of terrorism and economic uncertainty.

    The combined haul of the Legisi, Pathway to Prosperity and ASD “opportunities” was about $250 million, according to court filings. Separately, the Financial Industry Regulatory Authority (FINRA) said last year that Genius Funds, a collapsed HYIP, had gathered $400 million.

    Like Club Asteria, JustBeenPaid and Cherry Shares, Legisi, Pathway To Prosperity, ASD, AVG and Genius Funds were promoted on the Ponzi boards.

    FINRA specifically warned last year that HYIP fraud schemes spread on the Internet through social media and forums.

    “10BucksUp” said today that he used a “a free, blogger blog” to promote Club Asteria. Blogger is part of Google’s Blogspot platform.

    “Now everybody knows ISPY = Patrick Pretty,” 10BucksUp falsely asserted today.

    MoneyMakerGroup and TalkGold are referenced in U.S. federal court filings as places from which Ponzi and fraud schemes are promoted.

  • UPDATE: Club Asteria Pitchman And TalkGold Promoter ’10BucksUp’ Declares That Filing An AlertPay Dispute To Recover Money From Yet-Another Tanking HYIP Scheme ‘Drastic’ Measure That Will Cause ‘All’ Members To ‘Suffer’

    You can’t make this stuff up . . .

    A Club Asteria pitchman flogging multiple HYIP schemes on the TalkGold Ponzi forum says that late-entry members of a teetering “program” known as “JustBeenPaid” are engaging in hurtful and “drastic measures” if they file disputes with AlertPay.

    Filing a dispute means that “all members will suffer,” according to serial HYIP pitchman “10BucksUp.”

    “10BucksUp” rose to Ponzi-board prominence earlier this year in his shilling for ClubAsteria, a U.S.-based company that traded on the name of the World Bank, had its PayPal account frozen, became a subject of an investigation by Italian regulators and suspended member cashouts.

    Screen shot: From a government evidence exhibit in the Legisi case. Legisi, an HYIP Ponzi scheme promoted on TalkGold and MoneyMakerGroup,made members certify they were not government spies. JustBeenPaid, a hybrid HYIP scheme now in an apparent state of collapse, sought to do the same thing, according to its member agreement.

    Undaunted, “10BucksUp” — like other Club Asteria pitchmen — turned his promotional attentions to JustBeenPaid, which appears to feed itself through something known as “JSSTripler.”

    JustBeenPaid claimed it was a “private association.” The “program’s” member agreement called for participants to “affirm that I am not an employee or official of any government agency.”

    Participants also had to certify that they were not “acting on behalf of or collecting information for or on behalf of any government agency.” Meanwhile, they had to certify that “I am not an employee, by contract or otherwise, of any media or research company, and I am not reading any of the JBP pages in order to collect information for someone else.”

    A Ponzi forum uproar began when JustBeenPaid’s website recently began to malfunction. A person who identified himself as a recent registrant threatened on TalkGold today file a dispute with AlertPay.

    “10BucksUp” counseled the JustBeenPaid member to “[p]lease just calm down.”

    “I am pretty sure they are doing their best to make the new system work,” 10BucksUp continued, without describing how he’d arrived at his notion of being “pretty sure” and whether being “pretty sure” constituted legitimate due diligence and proper consumer advice.

    “I just think that the priorities are screwed as the logging in right now even without the member id thing should work within this week,” 10BucksUp opined. “New members like you are becoming restless I know, but try to understand if you do such drastic measures then all members will suffer.”

    Whether the late-entrant enrollee, who also is pitching multiple schemes on Talk Gold, will file a dispute is unclear. What is clear is that AlertPay enabled both Club Asteria and JustBeenPaid and that both “programs” are in a state of decay.

    Among other things, JustBeenPaid announced last month that it was “moving to new offshore servers” and that the transition could take weeks.

    “10BucksUp” did not explain why a dispute to a payment processor by a late entrant in JustBeenPaid who is apt to have joined a global Ponzi scheme constituted a “drastic measure.” Nor did he explain his apparent belief that late-entry registrants had a duty to suffer their Ponzi losses gladly so the early entrants had a chance to continue getting paid.

    In 2010, the Financial Industry Regulatory Authority called the HYIP sphere a “bizarre substratum of the Internet.”

    Club Asteria was widely promoted on the Ponzi boards, which led to questions about whether the Virginia-based firm with a purported Hong Kong subsidiary was selling unregistered securities on a global scale and collecting tainted proceeds from other HYIP schemes. The firm’s offer was targeted at the world’s poor.

    A collapsed HYIP Ponzi scheme known as Legisi also was promoted on the Ponzi boards. Like JustBeenPaid, it sought to have registrants certify they were not government spies.

  • UPDATE: CONSOB, Italy’s Securities Regulator, Issues New Order In Probe Related To Club Asteria; Findings And Effect Not Immediately Clear; Google Translation Software Calls CONSOB A ‘Bag’; Yahoo Calls Club A ‘Starfish’; PP Blog Awaits Official Government Translation

    Dear Readers,

    The PP Blog became aware last night that CONSOB, Italy’s equivalent of the U.S. Securities and Exchange Commission (SEC), had issued a new order on Monday in its investigation into certain claims made online in Italy about the purported Club Asteria business “opportunity.”

    Club Asteria has been widely promoted online as a “passive” investment program that provides a weekly return that projects to yearly gains in the hundreds of percentage points. The firm, which claims to be a revenue-sharing program, is based in Virginia. Its offer is targeted at the world’s poor.

    The CONSOB order, which addresses concerns first raised by the agency during the spring about how citizens of Italy were approached in online solicitations to join Club Asteria, was signed by CONSOB President Giuseppe Vegas on Aug. 22 and announced yesterday.

    The PP Blog has a copy of the order. What it does not have is a reliable translation from Italian to English.

    Italy first raised issues about Club Asteria in May. It is believed to be the first nation to have done so publicly, and Club Asteria may have sales affiliates in 150 or more countries worldwide. The Italian probe — coupled with claims about Club Asteria in other languages or in butchered or even highly polished, stylized English — led to questions about whether Club Asteria and tens of thousands of affiliates were selling unregistered securities on a global scale — with Club Asteria being the beneficiary of an unlawful offering.

    Because Google’s translation tool leaves a lot to be desired — and because the CONSOB order potentially affects thousands of Club Asteria members and was released in Italian — the PP Blog contacted CONSOB by email at 5:49 a.m. (EDT, U.S.A.) today to see if an official English translation was available and to clarify certain CONSOB findings. The Blog addressed CONSOB in English — and is uncertain if its email was received in Italy and understood.

    It’s easy to imagine an Italian reporter who did not speak English and needed the SEC to provide a document in Italian or an SEC employee to answer questions in Italian encountering the same information hurdles.

    At 1:08 p.m. (EDT, U.S.A.) today — approximately seven hours after asking CONSOB for assistance and lacking confidence that its email to CONSOB in Italy had been received and understood — the PP Blog contacted Italy’s U.S. Embassy in Washington by phone. The Blog asked the Embassy’s assistance in translating the new CONSOB order from Italian to English, and the Embassy provided an email address through which the Blog could submit a request for journalistic assistance through the Embassy. At 1:55 p.m. (EDT, U.S.A.), the Blog emailed the Embassy with the CONSOB order as it exists in Italian, and also supplied a link to the CONSOB webpage at which the agency’s order is published. The Blog is awaiting the Embassy’s response.

    An English translation by Google of the CONSOB order is available, but it is highly confusing, if not tortured. CONSOB, for instance, is described in the translation as “THE NATIONAL COMMISSION FOR THE SOCIETY AND THE BAG.” A translation available through Yahoo is no better; it refers to Club Asteria as “Club Starfish.”

    Club Asteria, which trades on the name of the World Bank and has blamed members for its PR problems and a freeze of its PayPal account, has not updated its news webpage since July 21. Members across the globe have been left in an information vacuum for weeks, while the firm directs attention to its glossy “e-Magazine” and asks members to “Imagine the Possibilities with Club Asteria.”

    The PP Blog hopes to publish a comprehensive report about CONSOB’s findings after it hears back from the Embassy.

    For now, the Blog is reporting that suspension orders against two websites CONSOB identified in May as Club Asteria troublespots apparently continue to be in effect and that the sites are serving PDFs in Italian of the Italian allegations.

    Posters on Ponzi scheme forums well-known to U.S. law enforcement claim that Club Asteria has more than 300,000 members globally — and Club Asteria sales pitches on the Ponzi forums and websites independent of the forums are almost incomprehensibly reckless.

    Some members have claimed that a monthly payment of $19.95 to Club Asteria produces a “passive” income of $20,800 a year. In other words, more or less pay Club Asteria a yearly total of $240 in 12 easy installments of $20 a month. Do nothing else unless you want to sponsor new members to make even more money. Receive  nearly $21,000 annually — forever.

    The offers are targeted at the world’s poor.

    Whether the impoverished people of the world made any meaningful money after becoming pitchmen for Club Asteria remains far from clear. What is clear — if the “I Got Paid” posts on Ponzi forums are reliable — is that well-known Ponzi pitchmen cleaned up by recruiting members for Club Asteria.

    In July 2010, the Financial Industry Regulatory Authority (FINRA) issued a warning about HYIP schemes popularized in web forums and through social-media outlets. FINRA called the HYIP sphere a “bizarre substratum of the Internet.”

    Just a month before, in June 2010, the United States and six other member-nations of the International Mass Marketing Fraud Working Group (IMMFWG) issued a warning about global marketing fraud.

    It is known that some promoters race from online scheme to online scheme.

    A photograph of Hank Needham, a Club Asteria principal, appears online in a 2008 sales pitch for the alleged $110 million AdSurfDaily Ponzi scheme. Like Club Asteria, ASD was based in the United States — and also was promoted on the Ponzi boards.

    ASD President Andy Bowdoin was arrested by the U.S. Secret Service in December 2010 after his indictment on felony charges of wire fraud, securities fraud and selling unregistered securities online.

  • BULLETIN: ASDCashGenerator Website Now Returns A Server Error; PP Blog Observed Error After Clicking On Link In 2008 ASD Promo That Featured Photo Of Current Club Asteria Pitchman Hank Needham

    This 2008 ad for AdSurfDaily features an image of Hank Needham and continues to appear online. Last month, an old ASD Cash Generator affiliate link within the ad began to resolve to a page for an opportunity known as Ad Sales Daily International. Today, however, the link is resolving to a page that returns a server error. The reason why was not immediately clear. In a video released last month, Needham identified himself as a principal of Club Asteria. The video was released after Club Asteria, which trades on the name of the World Bank, acknowledged that its PayPal account had been frozen and claimed that it had suspended payouts to members. Club Asteria blamed the developments on members. But some Club Asteria members, including "Ken Russo," have claimed that they continue to be paid by Club Asteria through AlertPay, a Canadian payment processor. "Ken Russo" posts as "DRdave" on the TalkGold Ponzi forum. Talk Gold, which is known for helping HYIPs and other "programs" that promise or suggest preposterous weekly or even daily payouts to members achieve virality on the Internet, moved ClubAsteria to its scam folder last week. The Financial Industry Regulatory Authority (FINRA) said in July 2010 that "HYIPs are old-fashioned Ponzi schemes dressed up for a Web 2.0 world." Some "programs" have tried to distance themselves from the term "HYIP" by declaring themselves "revenue-sharing" programs or using other language tweaks in their offers. Some Club Asteria members have claimed that the firm's program paid out up to 520 percent a year — while preemptively denying Club Asteria was an HYIP or Ponzi scheme and describing it as a revenue-sharing program. Other members described Club Asteria as a "passive" program that provided a weekly return on investment and an income of more than $20,000 a year if members paid only $19.95 a month.

    BULLETIN: (UPDATED 10:16 A.M. EDT (AUG. 22, U.S.A.) As the PP Blog first reported on July 12, the ASDCashGenerator.com domain once controlled by accused Ponzi schemer Andy Bowdoin had returned online and was promoting a mysterious opportunity known as “Ad Sales Daily International.”

    But the ASDCashGenerator website now is throwing a server error and returning this message: “The server encountered an unexpected condition which prevented it from fulfilling the request. The script had an error or it did not produce any output . . .”

    In July, the PP Blog observed that the ASDCashGenerator domain had become operational again after clicking on a link from a 2008 ASD affiliate promotion that featured a photograph of Hank Needham. After his days in 2008 as an ASD pitchman and lead generator, Needham emerged as a principal in Club Asteria.

    Club Asteria, which trades on the name of the World Bank and targets its offer to the world’s poor, announced weeks ago that its PayPal account had been frozen and that it had suspended payouts to members amid a serious cash crunch. The firm blamed the developments on members.

    Claims about Club Asteria are under investigation by Italian regulators.

    Some Club Asteria promoters claimed Club Asteria was a “passive” investment program that paid a return of up to 10 percent a week. The news section of the firm’s website has not been updated since July 21. The last Club Asteria news update occurred nine days after the PP Blog reported that the old ASD Cash Generator URL associated with Needham was sending visitors to the purported Ad Sales Daily International opportunity, which appears to have been an upstart that did not fully launch.

    Precisely when the old ASD Cash Generator domain became operational again is unclear. The domain, however, appears to have directed all old ASD affiliate links to the purported Ad Sales Daily International opportunity, which had its own logo.

    The PP Blog observed the server error on the ASDCashGenerator site today after it again clicked on the old ASDCashGenerator affiliate link in the 2008 ASD promotion that featured Needham’s photograph. On July 12, the same affiliate link returned a pitch page for the mysterious Ad Sales Daily International program.

    Federal prosecutors declined to comment in July on the curious return of the ASDCashGenerator website and the reactivation of the ASDCashGenerator domain name, which previously had been associated with Bowdoin and the alleged ASD Ponzi scheme.  The site had been reregistered in the name of Barbara Cruz.

    Cruz was associated in 2009 with an ASD cheerleading site known as ASD2Day that made confusing claims about the then-Bowdoin controlled ASDCashGenerator site, including a claim that ASD could not be a Ponzi scheme because the script employed by ASD could not be programmed to permit a Ponzi scheme to occur. The ASD2Day site also asserted that U.S. District Judge Rosemary Collyer was on an Aug. 28 [2009] deadline “to determine if the US Attorney General’s case against ASD should move forward.”

    Collyer, who presided over the civil-forfeiture cases involving Bowdoin and ASD Cash Generator and now is presiding over the criminal case against Bowdoin after he was arrested for wire fraud and other crimes in December 2010, was under no such deadline. Although a deadline did exist at the time, it was not one that applied to Collyer.

    Rather, it was a deadline imposed by Collyer on Bowdoin to file pleadings in one of the ASD civil-cases or face the forfeiture of more than $65.8 million seized by the U.S. Secret Service in August 2008. After not having heard from Bowdoin for more than two months, Collyer issued the order to Bowdoin in July 2009.  Bowdoin then asked for a series of delays to comply with the order, saying he was in negotiations with federal prosecutors.

    Collyer ultimately gave Bowdoin until Sept. 14, 2009, to comply with the order. Bowdoin ultimately complied, apparently after his negotiations with prosecutors had broken down.

    A supporter of the ASD2Day cheerleading site for ASD claimed on the PP Blog on Oct. 23, 2009, that Cruz was his mother and that “we where (sic) one of the biggest [ASD] leaders earning over $8,000 daily.”

    Little is known about the purported Ad Sales Daily International “opportunity” that, at least for weeks, was accessible through Bowdoin’s old ASDCashGenerator website that had been reregistered in the name of Cruz. The ASD2Day website, which also had a Cruz tie and promoted Ad Sales Daily International, now is displaying a page that beams advertisements.

    The domain registration for ASD2Day appears to have expired Aug. 19. AdSalesDailyInternational appears not to have a domain registered in its own name.

    Today’s strange developments follow on the heels of a bizarre bid by Bowdoin to raise $500,000 to pay for his criminal defense through a series of “blast” emails to the very individuals he is accused of defrauding: ASD members.

    Bowdoin disses Collyer in a fundraising video released July 26 — without mentioning Collyer by name.

    ASD is known to have ties to so-called “sovereign citizens.”

     

  • BULLETIN: Vincent McCrudden Pleads Guilty To Threatening Regulators, Government Officials

    BULLETIN: Vincent McCrudden, who was arrested in January amid allegations he threatened to kill 47 regulators and government officials, has pleaded guilty to two counts of transmitting threats to kill.

    McCrudden, 50, faces up to 10 years in prison. He has been jailed since his arrest in New Jersey.

    “Mr. McCrudden made bone-chilling and graphic threats against dozens of public officials,” said Assistant Attorney General Lanny Breuer. “As this prosecution reflects, the Department of Justice will act swiftly to identify and prosecute anyone who attempts to retaliate against public officials. Public servants must be able to carry out their duties without fear of being targeted.”

    On Sept. 30, prosecutors said, McCrudden sent an email to an employee of the National Futures Association (NFA) that made a death threat.

    “[I]t wasn’t ever a question of ‘if’ I was going to kill you, it was just a question of when,” the email read, prosecutors said. “And now, that question has been answered. You are going to die a painful death.”

    McCrudden also published an “Execution List” on his website. The list included the names of 47 current and former officials of the SEC, FINRA, NFA, and CFTC.  Included on the list were the names of the “the Chairperson of the SEC, the Chairman of the CFTC, a former Acting Chairman and Commissioner of the CFTC, the Chairman and CEO of FINRA, the former chief of Enforcement at FINRA, and other employees of the NFA and CFTC,” prosecutors said.

    “[T]hese people have got to go,” McCrudden wrote, prosecutors said. “And I need your help, there are just too many for me alone.”

    And McCrudden “posted a $100,000 reward on his website for personal information of several government officials and proof that those officials were punished,” prosecutors charged.

    On Dec. 16, according to the complaint, McCrudden sent a CFTC official an email with a subject line of, “You corrupt mother[*!&$$%]!”

    A top FBI official said such behavior would not be tolerated.

    “The conduct of McCrudden was way beyond mere speech,” said Janice K. Fedarcyk, assistant director in charge of the agency’s New York office. “By his admission, he not only directly threatened to kill government and regulatory officials, but he also listed dozens of officials and offered a reward to others to kill them. This outrageous conduct is not only dangerous, but an affront to civil society.”

    Fedarcyk was backed by U.S. Attorney Loretta E. Lynch of the Eastern District of New York.

    “This defendant crossed the line when he directly threatened to kill public officials who were working to keep our financial markets fair and open, and invited others to join him,” Lynch said. “He thought he could hide in the shadows of the Internet and disseminate his threats and instructions. He was wrong. This office will not tolerate, and will vigorously prosecute, those who threaten to kill men and women who dedicate their lives to public service.”

  • UPDATE: PowerPoint Presentation For Club Asteria Says ‘Passive’ Income ‘100% GUARANTEED’: Is ‘Ken Russo’ Tone Deaf? Promoter Brags About $321 Payment Sent By Wire While Another Laments Payment Of 30 Cents; Members Say They’ll Contact AlertPay

    Screen shot from a PowerPoint presentation on Club Asteria. The presentation is attributed to Andrea Lucas and is accessible online. (White highlights in screen shot added by PP Blog.)

    UPDATED 9:09 A.M. EDT (June 14, U.S.A.) A PowerPoint pitch titled “Asteria Corporation” raises serious questions about the nature of the business “opportunity” and may undermine Club Asteria’s own claims that members alone are to blame for the company’s apparent troubles.

    The document is slugged “[ClubAsteriaPresentation]” and attributed to Asteria Corp. and Andrea Lucas. It describes the “program” as one that enables “passive” income and provides a “25% Matching Bonus” — and claims Gold and Silver members are “100% GUARANTEED to Make Money.”

    Screen shot: The "Properties" of this Club Asteria PowerPoint pitch identifies Andrea R. Lucas as the author.

    The PowerPoint presentation leads to questions about whether Club Asteria is selling unregistered securities as investment contracts. Meanwhile, it casts doubt on Club Asteria’s claim that members are uniquely responsible for positioning the program as a passive investment opportunity with guaranteed earnings.

    Virginia-based Club Asteria identifies Andrea Lucas as its managing director. The program, which members say has slashed payouts and sends money via wire from a Hong Kong company known as Asteria Holdings Limited, is being investigated by Italian authorities. Club Asteria acknowledged last month that its access to PayPal had been blocked, blaming the development on misrepresentations made by members. Member payouts plunged after the PayPal development.

    Promoters of Club Asteria routinely trade on the name of the World Bank.

    Separately, promoter “Ken Russo” — posting on the TalkGold Ponzi scheme and criminals’ forum as “DRdave” weeks after the PayPal freeze and the developments in Italy — noted he has received by wire $1,632 from Club Asteria since June 2. In separate posts, “Ken Russo” claimed to have received $1,311 on June 2 and $321 on June 12. Both payments came from “Asteria Holdings Limited (Hong Kong),” according to the posts.

    Other Ponzi-forum posters claim they were less fortunate than “Ken Russo.” A poster on MoneyMakerGroup, for example, lamented a payment this week of only 30 cents.

    “my astrios (sic) stand at almost 1000 and you will be shocked to know that i earned only 30 cents this week, thats (sic) like 4 cents per day for an investment of $1000,” the poster complained.

    Another MoneyMakerGroup poster said this: “I made 80 cents from my 2,500 asterios.”

    Even TalkGold, which provides the cyberspace criminals and hucksters use to fleece hundreds of thousands of people globally in one Ponzi or fraud scheme after another, is questioning why Russo appears to be doing so well while others have been left holding the bag.

    “Something unreal compare[d] to others cashouts amount (sic),” a TalkGold Mod wrote on June 10 about “Ken Russo’s” June 2 claim of a $1,311 Club Asteria payout.

    Other forum posters say they plan to retaliate against Club Asteria by filing disputes with Alert Pay, an offshore processor used by Club Asteria.

    “This worked for me with genius funds,” wrote one TalkGold promoter, referring to Genius Funds, an international scam promoted on the Ponzi boards that the Financial Industry Regulatory Authority (FINRA) said last year stole $400 million.

    And the TalkGold poster who’d previously been ripped off in the Genius Funds scam and filed an Alert Pay dispute said he’d do the same thing with Club Asteria — and encouraged others to do the same.

    “Yesterday I filed 3 complaints for myself and family and if enough people do it, maybe they will block their alertpay account and share it out to us,” the poster claimed.

    He found a receptive audience, and a TalkGold poster who responded to his plea to contact Alert Pay suggested Andrea Lucas was trying to stop members from filing disputes.

    “I have contacted to Alertpay too just some days ago,” the TalkGold poster wrote. “Andrea Lucas contacted to me and started whine. Whaiting (sic) message from Alertpay.

    “I think their PayPal account was blocked in the same way as it’s going to be with their Alertpay account,” the poster wrote. “Some smart guys did it before us.”

    Some Club Asteria members have offered inducements for prospects to join the program, including partial reimbursements of monthly fees. Such members now potentially find themselves in the position of having locked in their own losses by bribing prospects up front and expecting to recapture the expense as the program expanded.

    In 2010, “Ken Russo” — while promoting the MPB Today “grocery” program on the Ponzi boards — said one of his downline members was offering up-front payments to incoming prospects to drive business to MPB Today.

  • ILLINOIS MAN INDICTED: Edward L. Moskop Accused In Alleged Multmillion-Dollar Ripoff Of Elderly Couple, Friends, Relatives — And The Local VFW Post

    In a criminal case that flowed from an SEC civil action, an Illinois man has been indicted on mail-fraud and money-laundering charges in a case that alleges he stole from elderly clients and the local Veterans of Foreign Wars Post.

    Edward L. Moskop, 63, of Belleville, originally was charged in November 2010 by the SEC, which alleged he ripped off an 88-year-old man and the man’s 84-year old wife.  At the SEC’s behest, a federal judge issued an asset freeze while the probe moved forward.

    Federal prosecutors now say the scheme gathered at least $2.4 million over 20 years, with Moskop also ripping off friends, relatives, insurance clients, people referred to the scheme by attorneys and the VFW.

    Moskop was a recidivist, prosecutors and regulators say. Records show he was banned from associating with National Association of Securities Dealers (NASD) reps for ripping off clients more than 20 years ago. NASD was the predecessor agency to FINRA, the Financial Industry Regulatory Authority.

    Regardless, Moskop continued to do business with other people’s money.

    “Moskop had been barred from association with any member of the NASD and was no longer registered to act as a broker in the securities industry,” the FBI said. “It is alleged that from 1991 to 2010, Moskop persuaded customers to provide him with funds for investment, but instead of making the investment, he kept the funds for his own use.”

    Moskop called the elderly couple he was ripping off his “premium clients,” and he was “siphoning away” their wealth and giving them “forged” documents, the SEC charged last year.

    All in all, the SEC said, Moskop stole nearly $300,000 from the couple by making them believe they had accumulated nearly $600,000 in 16 different investments.

    For 20 years, the couple never cashed out any of their holdings, choosing instead to let their profits roll over and believing their money not only was safe, but also was growing, the SEC said.

    In September 2010, however, the couple noticed a renewal discrepancy — and contacted an investment company at which they believed they had holdings through Moskop. The company told them there were no accounts — and that the firm did not even handle the type of investment product the couple believed they had: certificates of deposit.

    Alarmed, the couple contacted their daughter, who went to work unmasking the scheme. Moskop then manufactured stories on the fly, but the daughter demanded the money be returned to her parents.

    Eventually Moskop sent checks for a small portion of the overall investments, but the checks bounced, the SEC said.

    Alarmed again, the daughter did some more digging and found out that Moskop had ripped off her parents in other investments for even greater sums, the SEC said.

    Moskop operated a firm known as Financial Services Moskop and Associates Inc