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Tag: FINRA

  • Club Asteria Members Posting On Ponzi Boards Turn Their Attention To ‘JSS Tripler’ Amid Claims Daily Payout Of 2 Percent ‘Indefinitely Sustainable’; ‘Bizarre Substatum’ Gets Crazier Yet

    From a YouTube promo for JSS Tripler.

    We’ve previously noted that the Financial Industry Regulatory Authority (FINRA) has described the HYIP sphere as a “bizarre substratum of the Internet.”

    That substratum now is getting crazier yet.

    Three weeks ago, Club Asteria was a great darling of the Ponzi boards. But weekly payout rates that purportedly have been slashed — coupled with a purported freeze of Club Asteria’s PayPal account — appear to have put the “program” in a death spiral.

    Club Asteria stopped short of announcing it had placed a call to the coroner, but did announce a “downward spiral,” according to a post on the MoneyMakerGroup Ponzi scheme and criminals’ forum.

    Not to worry, though: Some Club Asteria promoters on the Ponzi forums have turned their attentions to JSS Tripler, whose site appears to be accessible through multiple domains, including a site known as JustBeenPaid (JBP).

    JBP appears to be tied to something called Synergy Surf, which appears to be another darling of the Ponzi boards.

    “I buyed (sic) new 8 positions for that,” a MoneyMakerGroup poster announced.

    JPB encouraged enrollees to “[s]et up your AlertPay account and fund it, or link your credit card to it,” according to web records.

    These instructions also were provided.

    • Upgrade in JBP by making your $10 or $20 payments.
    • Enter your AlertPay email address in the JBP Member Area.
    • Buy and/or sponsor downline members.
    • Study and apply ‘Upgrade Your Brain’ and the ‘Big Success Breakthrough’ — see ‘Access Our Products’ in your JBP member area.
    • Make JBP’s Synergy Surf (JSS) your primary moneymaker.

    In the spring of 2009 — as the AdViewGlobal (AVG) autosurf was in its death throes before a fatal gurgle — the AVG braintrust pointed the finger of blame at the membership.

    Other surfs that launched in the aftermath of the seizure of tens of millions of dollars from Florida-based AdSurfDaily did the same thing. These included AdGateWorld, which once referenced ASD in what appeared to be a copy-and-paste lift from ASD’s Terms of Service, and BizAdSplash, whose purported “chief consultant” was ASD/Golden Panda Ad Builder figure Clarence Busby.

    Fast forward two years, and Club Asteria, which lists Andrea Lucas as managing director, appears to be doing the same thing — along with serving up some Busby-like syrup for the soul:

    “Greed is a very powerful motivation, but the kindness, generosity and goodness in all of us all are even more powerful,” Club Asteria is reported on MoneyMakerGroup to have intoned.

    “The challenges that we are facing recently have been caused by a small percentage of our members misusing their membership privileges,” Club Asteria is reported to have told members. “As any good company would have done to protect their members and future members, we had to reinforce our Code of Ethics and Conduct, to ensure that our message of a better life for all of us is presented honestly and accurately.

    “We are working very hard to make sure that any benefit from Club Asteria and all of our products and services are accurately represented. Any company, no matter how good their products and services are, can be destroyed with misleading information, bad publicity, false rumors and inactivity of their members/customers.”

    Two years ago, AVG’s death spiral began as the ASD grand jury was meeting in the District of Columbia. The surf first slashed payouts — something Club Asteria reportedly is doing right now — and then eliminated them altogether, while at once announcing an 80/20 program would become mandatory after AVG completed an audit of itself.

    One of the issues complicating matters for AVG was the purported misuse of a member-to-member cash button. Club Asteria members also purportedly misused a money-transfer facility.

    “Bizarre substratum of the Internet” just about covers it — except for the heartache and myriad nightmares created by the various HYIP darlings, of course.

    Thinking Outside The Box

    Our friends at RealScam.com report another nightmare in the making. It’s bizarrely called Insectrio — and it bizarrely has an “Egg” plan purported to pay 103 percent after one day, a “Larva” plan purported to pay 120 percent after five days and other plans advertised to pay even more.

    The sales pitch for Insectrio, apparently an emerging HYIP, touts MoneyMakerGroup, TalkGold and DreamTeamMoney.

    Given JBP’s prompt for enrollees to “upgrade” their brains — which we view as a prompt to think outside the box — the PP Blog concludes this post by providing readers an outside-the-box way to look at the Insectrio offer:

    InSECtrio.

    Indeed, the three letters centering the HYIP’s name are real attention-getters.

  • As Promos On Ponzi Forums Continue And Members Claim IRS Recognition, Club Asteria Acknowledges That Its Members Used PayPal ‘To Cheat Fellow Members’; Says Fraudsters Were Turned Over To Unidentified ‘Authorities’; Existing Members Of Virginia-Based Firm Told To Use Offshore Processors

    This May 1 promo for Club Asteria describes its as an "investment company" and instructs prospects that "you will not again anything unless you invest." The promo advertises returns of up to 7 percent a week. "I am happy because even if I am not doing anything I still manage to earn from it," the promo claims.

    In June 2010, the U.S. Department of Justice used its Blog to warn about the emerging threat of “mass marketing fraud,” specifically citing the criminal allegations of a $70 million Ponzi fraud against Nicholas Smirnow of Pathway To Prosperity (P2P).

    P2P was promoted on the TalkGold and MoneyMakerGroup Ponzi forums.

    A little over a month later, in July 2010,  the Financial Industry Regulatory Authority (FINRA) described the HYIP sphere as a “bizarre substratum of the Internet” and issued a fraud alert. FINRA also referenced the P2P case. At the same time, it pointed to the collapsed Genius Funds Ponzi, believed to have consumed $400 million.

    Genius Funds also was promoted on TalkGold and MoneyMakerGroup.

    In December 2010, the interagency Financial Fraud Enforcement Task Force led by U.S. Attorney General Eric Holder specifically warned the public to be wary of social-networking sites and chat forums. The warning was part of “Operation Broken Trust,” a law-enforcement initiative in which investigators described more than $10 billion in losses from recent fraud cases.

    One of the cases described was the SEC’s action against Imperia Invest IBC, a murky offshore business accused of stealing millions of dollars from the deaf.

    Imperia Invest also was promoted on TalkGold and MoneyMakerGroup.

    Last week, promoters of a Virginia-based company known as Club Asteria (CA) announced on the Ponzi boards that PayPal had frozen CA’s funds and blocked its access to the PayPal system. Although CA has been presented as a wholesome “opportunity” recognized by the Internal Revenue Service as a nonprofit organization (see graphic below), the CA promoter who announced the PayPal news last week on MoneyMakerGroup simultaneously was promoting two “programs” that purportedly pay 60 percent a month.

    Some CA promoters claim CA pays 520 percent a year. Even jailed Ponzi schemer Bernard Madoff would blush at such advertised rates of return.

    MoneyMakerGroup is referenced in federal court filings as a place from which Ponzi schemes are promoted. So is TalkGold, another well-known forum in the HYIP world.

    This morning — also on the MoneyMakerGroup — a different CA promoter announced that CA’s Andrea Lucas had responded to last week’s PayPal news. Even as the CA member was announcing on a known Ponzi scheme and criminals’ forum that Lucas had issued a statement on the PayPal matter, he simultaneously was promoting two HYIPs and something called One Dollar Riches.

    “OneDollarRiches allows you to parlay a small investment of just one dollar into a constant stream of cash, day in and day out!” according to its ad. “You can make 100 times your investment in just a few days by following our simple step by step instructions.”

    The mere presence of CA promotions on the Ponzi boards leads to questions about whether the firm’s receipts are polluted by Ponzi proceeds. Paying members from such proceeds would put CA members in possession of tainted money — and banks into which they deposited those proceeds also would be in possession of tainted money.

    Lucas, according to the CA website, now has publicly acknowledged last week’s actions by PayPal. Details, though, were spartan. CA did not say how much money PayPal had frozen. Meanwhile, the firm instructed members to fund their accounts by using offshore processors.

    At the same time, CA urged members not to spread bad news about the company on forums. Members who shared negative information were subject to having their CA accounts revoked, according to the company.

    “Members shall not publically (sic) disparage, demean or attack Club Asteria, its members, services or charitable activities,” CA remarks attributed to Lucas on the CA website read. The remarks were dated May 16 and appeared in the “News” section of the site.

    In the same announcement, Lucas acknowledged that a “small group” of CA members “used their PayPal accounts to cheat fellow members.”

    The company claimed it had turned the members “over to the authorities,” but did not identify the authorities or say whether they were based in the United States or elsewhere.

    CA, which said PayPal was “acting with integrity,” then counseled its members to rely on offshore processors.

    “First, if you have been paying for your membership through PayPal, please discontinue your subscription with PayPal immediately and start using one of the other approved payment processors AlertPay, Towah or CashX to ensure that your membership stays current,” the remarks attributed to Lucas read.

    “Second, Do NOT use online forums, websites or social networks to lodge blame or complaints about PayPal or your Club Asteria team,” the remarks continued. “There is no benefit or purpose in this, and it only serves to create discord and spread rumors. Not only that, doing so is a direct violation of Code of Ethics & Conduct, Rule 8 and can result in immediate revocation of your membership.”

    CA’s bizarre announcement occurred against the backdrop of thousands of bizarre promos for the firm that appear online. Some promos claim $20 spent with CA monthly turns into a lifetime income of $1,600 a month. Others claim CA is a “passive” investment opportunity, which raises questions about whether CA — whose members claim the program typically pays out about 3 percent to 4 percent a week or up to 208 percent a year — is selling unregistered securities as investment contracts.

    Lucas has been referred to in promos as a former “chairman” and “vice president” of the World Bank. Several promos have described her as a Christian “saint.”

    CA’s claims that only a “small group” of members is causing problems may be dubious. Wild claims have been made in promo after promo for the firm, which says it is not in the investment business.

    This promo for CA contains a link that resolves to an active CA affiliate site. The affiliate site has a low affiliate ID number, suggesting the affiliate was one of CA's earliest members. The promo claims CA is a 501 (c)(3) nonprofit organization recognized by the IRS.

  • RECOMMENDED READING/VIEWING: Washington Post/Bloomberg Report On ‘The Ponzi Schemer Next Door’; FINRA/AARP Share Tale Of Purported ‘Bank President’ Who Lured Victims While ‘Craving Cocaine’ At Pay Phones From Which He Set Up Marks

    This man purported to be a bank president. In reality, he was an investment fraudster who used pay phones to lure people into scams as he was craving cocaine, according to a remarkable video airing on the Internet and PBS stations.

    The Washington Post and Bloomberg published Bob Carden’s story about how smart people get sucked into investment scams. The story is titled, “Investment fraud isn’t relegated to Wall Street: Beware the Ponzi schemer next door.”

    Carden produced the video “Tricks of the Trade: Outsmarting Investment Fraud.” Editor John Warnock assembled the package, which shows some of the things FINRA and AARP are doing to educate the public about the plague of fraud schemes and how to avoid them.

    Read the story here.

    And make sure you set aside some time to watch Carden’s pointed video (below), which is running on New Hampshire Public Television and elsewhere. The video shows footage of actual scammers talking about how they plied their trade and includes audio of scammers making pitches, including rude ones. You’ll learn about the buttons they push, the manipulation tactics they employ and how people who would seem to know better get duped.

    The video features commentary from psychologist Robert Cialdini, commentary from fraud victims, commentary from fraud perpetrators and commentary from fraud-busters, including Joe Borg of the Alabama Securities Commission.

    Borg, among other things, is famous for prosecuting the case against Greater Ministries International, a colossal Ponzi scheme that traded on faith and operated from Florida.

    Among the many interesting things in the video is footage from the old Candid Camera TV show in which passersby were persuaded the entire state of Delaware was “closed.”

    Watch the full episode. See more Making Sense New England.

  • UPDATE: Club Asteria Members Use TalkGold Ponzi Forum To Announce That Firm Now Has More Than 200,000 Members; Separately, Some Members Grumble About Missing Payouts

    EDITOR’S NOTE: The adjective-inspiring story below is made possible by the incongruous behavior of online pitchmen who operate in an environment the Financial Industry Regulatory Authority (FINRA) described last year as a “bizarre substratum of the Internet.”

    Two promoters of Club Asteria, a business “opportunity” purportedly operated by a woman variously described as a former “Chairman,” former “Director” and former “Vice president” of the World Bank, have announced on the TalkGold Ponzi scheme forum that they’ve enrolled new recruits and that Club Asteria now has more than 200,000 members.

    “Ken Russo” advised TalkGold members that he had enrolled Club Asteria (CA) member No. 198920. A short time later, TalkGold member “manolo” announced he had enrolled CA member “200,600+”

    “It’s Official,” “manolo” declared. “Club-Asteria has over 200,000 Member!” (sic)

    The World Bank said last week that it once employed a woman named Andrea Lucas as director of the management systems and account department. The bank described the position as a staff job, and said Lucas worked in Washington, D.C.

    In this promo, Club Asteria is said to have been founded by a "former world bank Chairman." In a separate promo, Club Asteria is described as a site of "World Bank's former Vice president Andrea Lucas." The claim is made in a bold headline that features 24-point type.

    In MLM-style promotions, scores and scores of Club Asteria members globally have implied Lucas was a member of the World Bank’s board of directors. The World Bank, though, said that Lucas never was on the board of directors and had left her job at the bank in December 1986, nearly 25 years ago.

    Other Club Asteria members have described Lucas as a former chairman and vice president of the World Bank. At least one online promo for Club Asteria implies that Lucas is a current director of the bank.

    Get a “life time income wth (sic) help of world bank director,” the promo prompts viewers.

    On the MoneyMakerGroup Ponzi board today, Club Asteria members are complaining about cashout requests that have not been honored, slow or absent customer support and server troubles.

    Last week, Club Asteria asked members to put “a little extra effort into your Club-Asteria business over the next 15 days. We are asking you now to just use one extra hour each day to focus on the things that generate additional revenue, such as product and service sales as well as memberships.”

    The request was part of a promo on “HOW WE CAN HELP THE PEOPLE OF JAPAN” after the devastating earthquake and tsunami.

    Read a July 2010 story about an alert issued by FINRA.

  • BULLETIN: Man Implicated By Jamaica In Alleged $326 Million Ponzi Known As ‘Cash Plus’ Now Accused By United States Of Orchestrating Separate HYIP Scheme That Funneled Cash To Latvian And Jamaican Accounts

    EDITOR’S NOTE: You might feel a chill after reading the story below about Bertram A. Hill and co-defendants implicated by the SEC in an international fraud scheme that ensnared investors in the United States and Europe. The SEC case includes an allegation that U.S. retail brokers were solicited to push unqualified clients to a murky Massachusetts firm that funneled business to Hill, who was suspended by FINRA in 2002, had an unpaid FINRA fine of $5,000 and yet somehow was operating under the radar. If that’s not shocking enough, Hill already had been implicated by Jamaican authorities in a Ponzi scheme that allegedly gathered hundreds of millions of dollars — and yet allegedly still was able to line up millions of dollars from new investors more than two years after being charged criminally with fraud in Jamaica. Records show the case in Jamaica was brought in April 2008. The new scheme, according to the SEC, began in December 2010, about two months ago. Accounts from Jamaican media in 2008 noted that “heavily armed police officers” were patrolling the grounds during a court appearance by Hill and his brother, Carlos Hill, in 2008. A “handful” of protesters unhappy that arrests had been made demanded that Carlos Hill, the alleged mastermind of the Jamaican scheme, be set free, according to the Jamaica Observer. (See link at bottom of story.) Among the victims in the later-to-emerge scheme, which the SEC alleged was unrelated to the Jamaican scheme, were a “boarding school for boys” in Brandon, Fla., a retired school teacher from California, an unidentified U.S. investor who plowed about $250,000 into the scheme, an investor in the United Kingdom who plowed at least $1.3 million into the scheme and an investor in Switzerland who plowed more than $1.8 million into the scheme.

    “[T]hese securities were fictitious and nearly $3 million of investor funds were quickly wired out of the country to accounts in Latvia and Jamaica,” the SEC charged.

    BULLETIN: The SEC has filed an emergency action in federal court in New Jersey to halt a “Swiss debentures” scheme allegedly operated in the United States by a man charged criminally in Jamaica with laying waste to investors in a $326 million Ponzi scheme.

    U.S. District Judge Anne E. Thompson has frozen the assets of the defendants in the U.S. case, while also ordering the repatriation of assets and expedited discovery.

    The Jamaican scheme, which was exposed in 2008, is known as “Cash Plus.” It has become the subject of global intrigue and an international money-chase, playing out not only in the Caribbean but also in venues such as Europe and the emirate of Dubai in the Persian Gulf. Dubai is one of seven emirates of the United Arab Emirates.

    The alleged U.S.-based scheme appears to have begun in late 2010 and has the hallmarks of a prime-bank/HYIP hybrid that promised spectacular returns of up to 100 percent monthly, according to the SEC complaint.

    Investigators said the U.S. case against Bertram A. Hill was “unrelated” to the alleged Jamaican fraud for which he faces trial this year, but that millions of dollars had been “spirited” to Latvia and Jamaica from bank and brokerage accounts in the United States without investors’ knowledge or permission.

    Hill, according to the SEC allegations, was booted by the Financial Industry Regulatory Authority (FINRA) amid customer complaints 2002. FINRA, the SEC said, leveled a $5,000 fine against Hill that remains unpaid

    Hill, whose age was not immediately known, resides in Red Bank, N.J., according to court filings. The SEC said he presided over a company known as Secure Capital Funding Corp. (SCF), which purported to be a subsidiary of a firm known as “ST Underwriters.”

    ST Underwriters, the SEC said, held itself out as a “private banking group” operating out of Panama and as a subsidiary of a company known as “Secure Trust.”

    Although Secure Trust “purports to be a business operating in Switzerland,” the SEC said, it “is not authorized by the Swiss Financial Markets Supervisory Authority . . . to do financial business in Switzerland and is on FINMA’s published “black list.”

    A mysterious company known as PP&M Trade Partners, which purported to be located in Elkart Ind., also was part of the fraud, the SEC alleged. PP&M was under the control of Kiavanni Pringle of Metheun, Mass., according to the agency.

    Pringle, whose age was not immediately known, also has been named a co-defendant in the case. Despite the assertion PP&M was operating as a financial-services business in Indiana, the Indiana location proved to be a “warehouse where another business with which Mr. Pringle was previously associated stores televisions and other merchandise,” the SEC said.

    PP&M actually was operating from Pringle’s home in Massachusetts and had “no clients” prior to November 2010, the SEC said.

    Pringle and PP&M used “multiple, detailed websites” to engage retail brokers to find investors for the scheme, the SEC alleged. The brokers were offered “commissions” of up to 4 percent from purported “gains” enjoyed by clients.

    “None of the offerings and sales of purported Swiss debentures made by Defendants beginning in December 2010 have been registered with the Commission by an issuer in accordance with the federal securities laws,” the SEC said. “At least some of the sales made by Defendants have been made to persons who did not qualify as ‘accredited investors’ so as to exempt Defendants from the obligation to register the securities offerings and make required disclosures. None of the Defendants ever sought or obtained an exemption from the registration requirements.”

    Read the stunning SEC complaint, which asserts that at least some of the investors didn’t even know with whom they were doing business because the “true identities” of the alleged schemers were not disclosed.

    Read a 2008 story in the Jamaica Observer that outlines allegations made against Hill nearly three years before a new scheme allegedly took root in the United States.

  • KABOOM! SEC, Feds Target Alleged Money-Laundering Operation In Costa Rica; 6 People From Various Countries Charged Criminally; 7 Charged Civilly In Coordinated Probe Of ‘Pump And Dump’ Schemes

    BULLETIN: Two days after Southern Florida’s top federal prosecutor warned that offshore fraudsters who targeted Americans had no safe haven, six people from various parts of the world who allegedly ran or contributed to a pump-and-dump scheme that used the services of a  money-laundering operation in Costa Rica have been charged criminally, authorities said.

    The SEC, meanwhile, charged seven people civilly. An attorney has been charged both criminally and civilly, the SEC said. The cases were brought in the Southern District of Florida, which has been a hotbed of financial crime.

    Defendants in the cases hail from Costa Rica, Great Britain, Canada, Israel and the United States, according to the SEC. The criminal charges include conspiracy to commit securities, mail and wire fraud; wire fraud; mail fraud; violating the securities regulation laws and obstruction of justice.

    Jonathan R. Curshen, a convicted felon awaiting sentencing in an earlier securities and bribery scheme, has been charged both criminally and civilly in the new case. Curshen, 46, a dual U.S. and British citizen and the one-time “honorary counsel” of St. Kitts-Nevis to Costa Rica, presided over a Costa Rican company known as Red Sea Management Ltd.

    Red Sea “effected fraudulent pump-and-dump schemes on behalf of its clients and laundered millions of dollars in illegal trading proceeds out of the United States to its clients overseas,” the SEC charged.

    Also charged criminally and civilly were attorney Michael S. Krome, 49, of Lake Grove, N.Y; Ariav “Eric” Weinbaum, 37, of an unspecified city in Israel; Yitzchak Zigdon, 47, of Tel Aviv; Ronny Morales Salazar, 39, of San Jose, Costa Rica; and Robert L. Weidenbaum, 44, of Coral Gables, Fla.

    Krome and Weidenbaum (as distinct from Weinbaum) are Americans.

    Weinbaum, according to records, has dual U.S. and Israeli citizenship. He previously lived in Boca Raton, Fla., but now is living in Israel, the SEC said. The SEC alleged that Weinbaum has a “network of operatives he uses to perpetrate pump-and-dump stock manipulations.”

    Zigdon is an “Israeli accountant and the business partner of Weinbaum,” the SEC said.

    David C. Ricci of San Jose, Costa Rica, was charged civilly, and already has settled with the SEC. Ricci is a citizen of Canada who was living in Costa Rica, according to the SEC charging documents.

    “This group of illicit stock promoters sought to hide their scheme behind offshore entities, but their misconduct was exposed by the excellent cooperation of law enforcement agencies here and abroad,” said Cheryl Scarboro, associate director in the SEC’s Division of Enforcement.

    On Feb. 16, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida warned offshore scammers and criminals that the United States would not tolerate crime aimed from abroad at its citizens.

    “International law enforcement cooperation eliminates safe havens for those who cheat American citizens from overseas,” Ferrer said.

    “Curshen directed Red Sea to open numerous nominee brokerage accounts with U.S. and Canadian broker-dealers to enable the firm to engage in coordinated manipulative trading and conceal its illegal activity,” the SEC charged, alleging that Ricci and Salazar had trading authority over the nominee accounts.

    The scheme for which the charges were brought centered on a “sham” company known as CO2 Tech Ltd., which purported to be in the business of reversing global warming, the SEC said.

    Purportedly based in London, the company claimed to have a relationship with Boeing, the aircraft-maker, and traded on the Pink Sheets.

    “There were no communications, correspondence or understandings between CO2 Tech and Boeing,” the SEC said flatly, alleging that CO2 Tech was a “sham” that had no “significant assets or operations.”

    Krome, the lawyer, “issued a fraudulent opinion letter” to enable Weinbaum and Zigdon to advance the scheme, and “Weinbaum hired Weidenbaum” to distribute false information through websites, spam e-mails and fax blasts, the SEC charged.

    “Weidenbaum enlisted a group of stock promoters who then executed illegal ‘matched orders’ with Red Sea’s nominee brokerage accounts in order to ‘jump-start’ the market and increase the price of the stock,” the SEC charged. “As a result of the false media campaign and the illegal matched orders, the market price of CO2 Tech stock increased 81 percent increase in one day and trading volume increased 1,573 percent.”

    Ricci and Salazar sold the stock through Red Sea, and the “coordinated misconduct enabled stock sales at artificially inflated prices for profits of more than $7 million at the expense of unsuspecting investors,” the SEC charged.

    Cooperating in the case were the U.S. Department of Justice, the FBI, and the U.S. Postal Inspection Service, FINRA, the Costa Rican Police, the British Columbia Securities Commission, the Israel Securities Authority, the United Kingdom Financial Services Authority and The City of London Police Department, the SEC said.

    In recent days, federal prosecutors also have filed charges against more than 100 people associated with Armenian Power, an international organized-crime group with ties to Russia and Armenia.

  • URGENT >> BULLETIN >> MOVING: New York Man Arrested After Threatening To Kill CFTC, SEC, NFA And FINRA Regulators; Vincent McCrudden Used Emails, Website To Terrorize Officials, Prosecutors Charge

    A New York man sued by the CFTC last month for registration violations has been arrested on criminal charges of threatening to kill 47 current or former market regulators, federal prosecutors said.

    Vincent P. McCrudden, 49, who recently had been living in Singapore, was arrested yesterday by the FBI at Newark Liberty International Airport after returning to the United States.

    The arrest occurred just five days after a gunman opened fire at an Arizona constituent event hosted by U.S. Rep. Gabrielle Giffords. Giffords was critically wounded in the attack. U.S. District Judge John Roll and five others were shot and killed.

    McCrudden was denied bail this afternoon in the alleged threats against regulators, some details of which U.S. Attorney Loretta E. Lynch of the Eastern District of New York released today.

    “In this day and age, there is no such thing as an idle threat,” said Lynch. “Those who threaten injury or worse to the lives of others will be promptly investigated and vigorously prosecuted.”

    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[*!&$$%]!”

    The email went on to inform the official that he was “first on my list.”

    McCrudden used the website to encourage others to “[g]o buy a gun” and take back the country. On the website, McCrudden wrote that he would lead by example, prosecutors said.

    A top FBI official said the threats were “especially troubling.”

    “Overt threats of the sort made by this defendant must be dealt with to the fullest extent of the law,” said Janice K. Fedarcyk, assistant director-in-charge of the FBI’s New York field office.

    “The threats were direct, extreme, and specific, vowing to kill securities regulators and encouraging others to do the same,” Fedarcyk said.  “The allegations, coming as they do during a period of national mourning in the wake of horrific violence done to public officials and others, are especially troubling.”

  • Egg-Themed Domains Used To Promote HYIPs That Flushed Hundreds Of Millions Of Dollars Go Missing — Plus, An Update On Data Network Affiliates Amid Suggestion Thyroid Cancer Sufferers Can Benefit From Product Called ‘O-WOW TurboMune’

    Four egg-themed domain names used to drive business to HYIPs that ended in spectacular flameouts and foreshadowed a warning from the Financial Industry Regulatory Authority (FINRA) have gone missing.

    The domains — including one that redirected to an HYIP site known bizarrely as Cash Tanker, which used an image of Jesus Christ to promote a purported payout of 2 percent a day — first were promoted on the pro-AdSurfDaily Surf’s Up forum  by a poster who used the handle “joe” in December 2009.

    The egg-themed promo featured a pitch that HYIP participants were wise to spread risk by not keeping all of their eggs in “ONE BASKET.” It also hawked Gold Nugget Invest (7.5 percent a week); Saza Investments (9 percent a week); and Genius Funds (6.5 percent a week).

    Despite an active criminal investigation into the business practices of ASD President Andy Bowdoin and alleged co-conspirators — and despite a RICO lawsuit filed by members against Bowdoin and repeated warnings from various regulators about the dangers of HYIPs and autosurfs — the egg-themed promo claimed in all-caps that “I MAKE 2000.00 A WEEK” and directly solicited ASD members to part with their money.

    One Surf’s Up member dissed critics of the promo, calling them “dead wrong.”

    “I also make a lot of money from those four and your remarks tell me you don’t know anything about them,” the member claimed. “[T]hey are very reputable [companies] who have been around for years….and the money is NOT made from ‘new’ people’s money….google them and look at various forums and see what others have to say about them….I don’t even know Joe, but I can vouch for the programs!”

    A  series of spectacular collapses that consumed each of the HYIPs then followed over a period of just weeks, demonstrating that spreading risk across multiple HYIPs by putting eggs in multiple HYIP baskets was spectacularly poor advice that had produced a recipe for financial disaster.

    In July, FINRA said that Genius Funds cost investors about $400 million. The regulator launched a public-awareness campaign, one component of which was an ad campaign on Google designed to educate and inform the public about HYIP fraud.

    “Open the cyber door to HYIPs, and you will find hundreds of HYIP websites vying for investor attention,” FINRA said. “It is a bizarre substratum of the Internet.”

    Records show that the government of Belize had issued a warning about Gold Nugget Invest nearly a month before the egg-themed promo had appeared on Surf’s Up and at least two members had vouched for the program.

    FINRA also pointed to criminal charges filed by the U.S. Postal Inspection Service in May against Nicholas Smirnow, the alleged operator of an HYIP Ponzi scheme known as Pathway To Prosperity that fleeced more than 40,000 people across the globe out of an estimated $70 million.

    Gold Nugget Invest (GNI) collapsed in early January 2010, about a month after the egg-themed promo had appeared on Surf’s Up. Surf’s Up went offline just days prior to the collapse of GNI, which was explained in bizarre fashion.

    Using baffling prose, a purported GNI manager claimed the program ended after it had attempted to gain “a crystal clear vision of our financial vortex” during the fourth quarter of 2009.

    After the collapse of the programs in the original egg-themed pitch on Surf’s Up, the domains then were set to redirect to other HYIPs.

    Some ASD members later turned their attention to promoting MLM programs such as Narc That Car/Crowd Sourcing International (CSI), Data Network Affiliates (DNA) and MPB Today.  CSI and DNA purport to be in the business of paying people to write down the license-plate numbers of cars for entry in a database. MPB Today purports to be in the grocery business.

    DNA, which once instructed people of faith that it was their “MORAL OBLIGATION” to hawk a purported mortgage-reduction program offered alongside the purported license-plate program, now appears to have morphed into a program known as One World One Website or “O-WOW.”

    An email received by members of the O-WOW program this weekend purported that a man suffering from terminal thyroid cancer had derived benefit from an O-WOW product known as “TurboMune” and that members somehow can earn “24% Annual Interest on their money” by giving it to O-WOW.

    If members don’t pay O-WOW before Nov. 30, they’ll earn a lower rate of interest (18 percent), according to an email received by members.

    Like DNA, O-WOW is associated with Phil Piccolo. During a radio program in August, Piccolo threatened critics with lawsuits and planted the seed that he could cause critics to experience physical pain. DNA has an “F” rating from the Better Business Bureau. So does CSI. So does United Pro Media, a company formerly operated by MPB Today’s Gary Calhoun.

    See the PP Blog’s Dec. 4, 2009, story on the egg-themed pitches on the Surf’s Up forum.

  • BULLETIN: SEC Gains Asset Freeze, Seeks Shutdown Of Imperia Invest In Emergency Action; Program Pitched On Same Ponzi Forums Promoting MPB Today; Agency Says Imperia Defrauded Thousands Of Deaf Americans

    BULLETIN UPDATED 5:02 P.M. EDT (U.S.A.): The SEC has gone to federal court in Utah to halt the operations of Imperia Invest IBC, alleging a spectacular fraud that fleeced money from thousands of Americans with hearing impairments.

    Imperia was promoted from the MoneyMakerGroup Ponzi forum — one of the Ponzi forums promoting the MPB Today “grocery” MLM. Imperia also was the topic of discussion and defenses on TalkGold and ASAMonitor, two other forums that are pitching MPB Today.

    The SEC’s allegations against Imperia are stunning. More than 14,000 investors were defrauded worldwide, the agency said.

    Among the victims were thousands of deaf investors in the United States, the SEC said.

    Imperia gathered relatively small sums from thousands of people, the SEC charged, noting that “no evidence has been found that any of the investors have received a single payment.”

    “Imperia Invest IBC is a web-based entity that claimed, until late 2009, to be located in the Bahamas,” the SEC charged. “The Bahamian address listed by Imperia is fictitious. Imperia now claims to be located in Vanuatu. However, Imperia is not registered to do business in Vanuatu and the address listed on its website appears also to be fictitious. Neither Imperia nor its securities are registered with the Securities and Exchange Commission. Imperia is not licensed or registered with the Commission, with any state, or with any Self Regulatory Organization.”

    Categorically absurd representations of earnings and the program’s potential were made to investors, the SEC said.

    “Investors were promised eye-popping amounts of money in return for a simple $50 or $100 investment, and Imperia has made numerous excuses on its website about why these returns haven’t been paid,” said Ken Israel, director of the SEC’s Salt Lake Regional office.

    “The Imperia website shows an example of such earnings in which a $50 investment will return $134,000 to the investor in six months,” the SEC charged. At the same time, the agency said some investors were told that spectacular sums were due them for doing business with Imperia.

    “Imperia represented to one investor who invested $150.00 with Imperia that Imperia owed him $36,610,755.20 within a two year time frame,” the SEC charged. “Another individual’s account statement who invested $500 in July 2007 showed he is owed $43,907,652.20 as of May 2010.”

    It was not immediately clear how so many deaf investors became involved in Imperia. A federal judge has approved an asset freeze.

    Imperia called its product Traded Endowment Policies (TEP), which the SEC described as “the British term for viatical settlements.”

    “A TEP or viatical settlement involves the sale of an insurance policy by the policy owner before the policy matures, and policies are sold at a discount from face value in an amount greater than the current cash surrender value,” the SEC said.

    “There are at least 14,000 [Imperia] investors worldwide with a total investment exceeding $7 million,” the SEC said. “In the United States, there appear to be approximately 6,000 investors, most of whom belong the hearing impaired community, who have invested in excess of $4 million with Imperia.”

    Imperia used offshore payment processors such as “Liberty Reserve, located in Costa Rica; Perfect Money, located in Panama; and Procurrex, located in the British Virgin Islands,” the SEC charged. “Once Imperia received funds from Investors, it appears that Imperia then transferred amounts from these accounts to foreign bank accounts, including but not limited to accounts located in Cyprus and New Zealand.”

    Even as Imperia was ripping off investors, it also was infringing trademarks and the intellectual property of Visa, the credit-card service, the SEC charged..

    “Imperia also requires that investors purchase a Visa debit card to access their investment proceeds,” the SEC said. “Imperia charges customers a fee to purchase the Visa debit card ranging from $145 to $450.

    “Visa has not authorized Imperia to use its name or trademarks and has sent Imperia a cease-and-desist letter to halt its unauthorized use of the Visa name and logo,” the SEC said. “There is no evidence that any investor who has ordered a Visa debit card from Imperia has actually received such a card.”

    One poster on the MoneyMakerGroup forum advised prospects that he would keep an “open mind” about Imperia, according to web records.

    “Anyway, in the final analysis each person must make their own decision,” the poster said in 2007.

    While the MoneyMakerGroup poster was holding forth about keeping an “open mind,” Imperia was cloaking itself to siphon millions of dollars, according to web records and court records.

    “Imperia took proactive steps to conceal the identity of its control persons by using an anonymous browser to host its website, by communicating with all investors via email without disclosing the identity of any control persons and by establishing off-shore Paypal-style bank accounts to conceal the recipient of the investment proceeds,” the SEC charged.

    In July, the Financial Industry Regulatory Authority issued a warning about HYIP schemes pitched online. In May, the U.S. Postal Inspection Service accused an HYIP known as Pathway To Prosperity of defrauding more than 40,000 people in a scheme that took in about $70 million.

    Pathway To Prosperity also was promoted on the Ponzi and criminals’ forums. ASAMonitor, TalkGold and MoneyMakerGroup are specifically referenced in court filings in the Pathway to Prosperity case.

    MoneyMakerGroup is specifically referenced in court documents in the alleged Legisi HYIP and Ponzi scheme, a fraud that allegedly gathered more than $70 million.

    Read the SEC complaint against Imperia.

  • BULLETIN: USDA Following Specific Leads In MPB Today Matter; Agency’s Food And Nutrition Arm Will ‘Take Appropriate Action As Needed’

    BULLETIN: The U.S. Department of Agriculture (USDA) said this afternoon that the agency’s Food and Nutrition Service is following specific leads in the MPB Today matter and will “take appropriate action as needed.”

    For the first time, the agency used the word “investigate” in its remarks about MPB Today, an MLM tied to a purported “grocery” business known as Southeastern Delivery of Pensacola, Fla. USDA previously referred to the MPB Today matter as a “review.” The agency did not explain why the Food and Nutrition Service had entered the probe.

    The Food and Nutrition Service, known as FNS, says its “mission is to provide children and needy families better access to food and a more healthful diet through its food assistance programs and comprehensive nutrition education efforts.”

    The announcement followed on the heels of claims by MPB Today affiliates that there are liars and thieves within the organization, that the government and Walmart endorsed the MPB Today program and that the USDA’s Food Stamp program was “affiliated” with MPB Today.

    On Tuesday, the PP Blog reported that a purported “news release” promoting MPB Today suggested that Food Stamp recipients should sell $200 of their allotment to raise money to join the MLM program.

    Yesterday the Blog reported that at least two MPB Today members claimed there are liars and thieves inside the organization, using the claims to suggest prospects should join the program only under specific downlines. The Blog also reported that MPB Today affiliates may have ties to the judicially declared CEP Ponzi scheme, the alleged AdSurfDaily Ponzi scheme and other Ponzi schemes promoted on forums such as ASAMonitor, TalkGold and MoneyMakerGroup.

    All three forums were referenced in a criminal case filed in May by the U.S. Postal Inspection Service against the alleged Pathway To Prosperity Ponzi scheme.

    In July, the Financial Industry Regulatory Authority (FINRA) issued a warning about HYIP scams that use forums and social-media sites such as YouTube and Facebook to spread virally on the Internet.

    MPB Today’s website says it ships “ONLY” dry goods to customers, who can expect to pay a shipping charge of up to 50 percent of an order. MPB Today affiliates have used the high shipping charges as a reason for Food Stamp recipients and other customers to join to the MLM program, saying a one-time purchase of $200 in groceries could result in free groceries for life.

    Affiliates have claimed MPB Today issues grocery “vouchers” that can be converted to Walmart gift cards and cash to purchase gasoline, electronics and other nonfood products.

    Among other things, the purported “news release” claimed that the idea about selling Food Stamps for cash to join MPB Today occurred “[on] a beautiful Sunday afternoon” during a drive home from “Church.”

    One promo for MPB Today showed a 46-inch Samsung television and other electronics that purportedly had been acquired by an MPB Today member through the program. Other promos have show prepaid Visa cards that spend like cash.

    MPB Today operates a 2×2 matrix cycler — a business model that has come under fire by the U.S. Secret Service in a Ponzi scheme probe in the Seattle area. The Seattle program was known as Regenesis2x2, and was promoted on some of the same forums MPB Today is being promoted.

  • INTERPOL Chief Says His Identity Was Stolen In Fraud Bid On Facebook; Meanwhile, MPB Today Members Post Check-Waving Videos On Social-Media Sites And WebsiteTester.biz Gathers 400,000 Names And Email Addresses

    Earlier this week the PP Blog reported that members of MPB Today were using YouTube and other sites to post images of checks drawn on a distressed Florida bank. The checks, which were supplied as purported “proof” of MPB Today’s legitimacy, may expose both the posters and the bank to security breaches and identity theft.

    The bank, Gulf Coast Community Bank of Pensacola, has been operating under an FDIC consent agreement since January. It did not respond to a request for comment from the PP Blog. It is possible that the bank was unaware that its name was being used as a form of purported “proof” that one of its customers — MPB Today, which operates an MLM advertised on Ponzi forums such as ASA Monitor — was above-board.

    Like MPB Today, the alleged Legisi Ponzi scheme was pushed on Ponzi forums such as MoneyMakerGroup. This bizarre section of the Legisi Terms of Service purports that members must avow they are not an "informant, nor associated with any informant" of the IRS, FBI, CIA and the SEC, among others. The others included "Her Majesty's Police," the Intelligence Services of Great Britain, the Serious Fraud Office and Interpol.

    In the alleged AdSurfDaily (ASD) Ponzi scheme in 2008, members cited ASD’s relationship with Bank of America as purported “proof” of legitimacy. Federal agents later seized more than $65.8 million from 10 bank accounts controlled by ASD President Andy Bowdoin amid allegations of wire fraud and money-laundering.

    ASD also was promoted on the Ponzi boards. Robert Hodgins, who operated a company ASD members said supplied debit cards to the firm, now is wanted by INTERPOL in a case that alleges he assisted in the laundering of money for Colombian narcotics traffickers. The money was accessed with debit cards through ATMs in Medellin, according to court records.

    A mysterious business opportunity known as WebsiteTester.biz also is being hawked at ASAMonitor and other Ponzi boards. WebsiteTester claims it has collected the names and email addresses more than 400,000 prospects across the world. WebsiteTester claims its legitimacy can be established by watching a YouTube video that shows no faces and by reading a news release published by an anonymous author.

    In July, the Financial Industry Regulatory Authority (FINRA) issued an alert about fraud schemes that use forums and social-media sites such as YouTube and Facebook to spread virally.

    Among the other “programs” pushed on the Ponzi boards was Legisi, an alleged Ponzi scheme that gathered more than $70 million. Legisi members were specifically prompted to “avow” they were not “an informant” for law enforcement, including INTERPOL, the FBI and the SEC, among other agencies.

    Despite repeated public warnings by authorities to exercise caution on the Internet, fraud schemes continue to proliferate globally. INTERPOL now says one of its own was targeted in an identity-theft bid on Facebook — and it was the boss himself.

    “Just recently INTERPOL’s Information Security Incident Response Team discovered two Facebook profiles attempting to assume my identity,” said Ronald K. Noble, INTERPOL’s Secretary General.

    “One of the impersonators was using this profile to obtain information on fugitives targeted
    during our recent Operation Infra Red,” Noble said. “This Operation was bringing investigators from 29 member countries at the INTERPOL General Secretariat to exchange information on international fugitives and lead to more than 130 arrests in 32 countries.”