The assets of an Arizona man who allegedly mixed a Forex Ponzi scheme with a cash-gifting scheme and claimed his software system let clients “profit every time” from trades have been frozen by a federal judge after the CFTC filed an emergency court action.
Anthony Eugene Linton of Tucson told investors that entrusting their money to him posed “no risk whatsoever” because of his miraculous trading abilities, personal wealth and software system, the CFTC charged.
Some customers were told their profits under Linton were not taxable because the enterprise was structured as a “tax free gift plan in which participation interests would be considered to be gifts” to Linton’s company, known as “The Private Trading Pool” (PTP).
Returns from PTP were positioned as “gifts” back to participants, “with the result that the transactions would not have to be disclosed to the Internal Revenue Service . . . and would be considered ‘tax free’ by the IRS,” CFTC charged.
Linton told one whopper after another, CFTC said.
“[W]hat little forex trading Linton did using customer funds resulted in consistent net losses, and, in the aggregate, he lost more than 90 percent of the funds traded,” CFTC charged.
When the scheme began to unravel, CFTC charged, Linton blamed purported “new restrictions” on Forex trading imposed by the U.S. Congress and the National Futures Association (NFA) for his inability to make payments, CFTC charged.
He also told some investors that a “Permanent Injunction” placed against him in his divorce case prevented him from making payments, CFTC charged.
The alleged scheme gathered at least $650,000 from at least 19 investors. Some of the funds were used in Ponzi scheme fashion, CFTC said.
Linton also used customer funds to make his “personal mortgage, car and credit card payments,” CFTC charged.
At the same time, he used customer funds “to buy and sell items on Ebay and converted large sums of customer funds into cash and stashed it in a safe in his home,” CFTC said.
U.S. District Judge David C. Bury ordered the asset freeze.
A Florida resident charged with defrauding investors in Hawaii and the U.S. mainland has been sentenced to 90 months in federal prison, ordered to begin serving his sentence immediately and make restitution — and advised he faces deportation to Madagascar upon his release from a U.S. prison.
The case against Patrick H. Rakotonanahary, 34, of Punta Gorda, was one of the first assembled by President Obama’s Financial Fraud Enforcement Task Force. He was sued civilly by the CFTC and charged criminally by the FBI in March 2010 with 21 counts of wire fraud, amid allegations he operated a forex Ponzi scheme and pocketed $1 million for himself.
The scheme affected about 100 investors, most of them residents of Hawaii, state and federal investigators said. The state of Hawaii also sued Rakotonanahary.
Rakotonanahary operated a company known as Cyber Market Group LLC, which marketed a Forex scheme that purported to pay investors up to 10 percent interest per week. The scheme netted more than $10.2 million.
Only minimal Forex trading occurred — and the trading that did occur resulted in losses, authorities said. The scheme sustained itself in typical Ponzi fashion.
A Hawaii man and his company were hit with sanctions totaling $6.2 million in a case that alleged they targeted people with hearing impairments in a Forex Ponzi scheme.
Both the SEC and the CFTC filed actions against Marvin Cooper and his Honolulu-based firm, Billion Coupons Inc. (BCI). The CFTC announced the judgment against Cooper and the company.
Investigators said Cooper and BCI “solicited funds from deaf American and Japanese individuals for the sole purported purpose of trading forex,” luring them with payout promises of up to 25 percent per month.
For his part, Cooper took “more than $1.4 million of customer funds for personal use, including for flying lessons and to purchase a $1 million home,” investigators said.
He was ordered to pay $3.9 million in restitution to customers and more than $2.3 million in penalties. The company is liable for the same amounts.
The “Billion Coupons” case drew comparisons to the now-defunct Noobing autosurf, which also targeted the deaf. Noobing became popular in the aftermath of the August 2008 federal seizure of tens of millions of dollars in the AdSurfDaily Ponzi scheme case.
Despite the federal seizure, some ASD members promoted Noobing. Noobing effectively went bust in July 2009, when the FTC charged its parent company — Affiliate Strategies Inc. — with pushing a scheme that promised “guaranteed” government grants of $25,000 from economic stimulus funds.
Noobing later was named a receivership defendant in the case. Receiver Larry Cook sold the company’s assets lock, stock and barrel — right down to a lavatory wastebasket. Like ASD, Noobing’s parent firm also owned a jet ski. Cook sold that, too.
Despite dramatic asset seizures and the federal actions against ASD and Noobing’s parent — and despite previous actions against autosurfs, including 12DailyPro, PhoenixSurf and CEP — some ASD members have continued to promote autosurfs.
This has occurred against the backdrop of a racketeering lawsuit against ASD President Andy Bowdoin and public filings in which prosecutors claimed Bowdoin had signed a “proffer” letter in the case and met with members of law enforcement over a period of four days in December 2008 and January 2009.
It also is known that Interpol is seeking the arrest of Robert Hodgins, whose Dallas-based debit-card company, Virtual Money Inc., is alleged to have agreed to launder drug money in the Dominican Republic and assist a Colombian drug operation launder money at ATMs in Medellin.
ASD members said Hodgins’ company supplied debit cards to AdSurfDaily, and web records suggest that Hodgins or a Virtual Money designate attended an ASD function in the Orlando area in late 2006.
Even though Bowdoin acknowledged in court filings that he had given information against his interests to the government, some ASD members continue to promote autosurfs and HYIPs. After signing the proffer letter and surrendering his claims to more than $65.8 million seized from his personal bank accounts, Bowdoin later reentered the case as his own attorney.
One of Bowdoin’s 10 personal bank accounts contained more than $31 million, according to court filings. Another contained more than $23 million. Three other bank accounts contained the exact same amount — a little over $1 million.
After submitting to the forfeiture in January 2009, Bowdoin fired his attorneys without notice and attempted to reenter the case weeks later as his own attorney. This set in motion a series of bizarre pleadings from Bowdoin, including one in which he claimed he had not been provided “fair notice” of his illegal conduct by the government. ASD members by the dozens then filed their own bizarre, pro se pleadings. U.S. District Judge Rosemary Collyer ruled against each of the filers, saying they had no standing in the case.
Collyer since has ruled against Bowdoin, awarding title to more than $80 million seized in the case to the government, which said it intends to implement a restitution program. Bowdoin is appealing Collyer’s forfeiture decisions.
Court filings show that Bowdoin told Collyer the seized money belonged to him. In September 2009, the U.S. Secret Service presented Collyer a transcript of a conference-call recording in which Bowdoin told members the money belonged to them. Although Bowdoin insisted he had big plans for ASD, records show that he let the firm’s registration lapse in the state of Florida — even as he was telling members they should be excited about the company’s future.
In the recording, Bowdoin claimed his fight against the government was inspired by the compelling personal story of a former Miss America.
Yet another HYIP scheme pushed on the TalkGold and MoneyMakerGroup forums has been outlined by federal prosecutors — this time in Florida.
The name of the scheme was Alpha Trade Group (ATG), and web records show that the scheme was pitched on TalkGold and MoneyMakerGroup beginning on Oct. 7, 2009. Court records, meanwhile, show that ATG already was under investigation by the U.S. Department of Homeland Security when the first posts to promote the scheme appeared on the forums.
Just days earlier, on Sept. 25, 2009, a U.S. bank closed an account prosecutors later linked to the scheme, according to court records. Taken together, the court and web records strongly suggest that the ATG investment “opportunity” first was advertised on MoneyMakerGroup and TalkGold when the scheme already was in a state of collapse because one of its key money conduits had been blocked.
This screen shot shows the first post about Alpha Trade Group appeared at the MoneyMakerGroup Ponzi forum on Oct. 7, 2009 — days after a U.S. bank already had closed an account linked to the scheme amid fears it was being used to launder money.This screen shot, taken from Paragraph 23 of a federal affidavit in the ATG Ponzi case, shows that a U.S. bank closed an account later linked to the scheme at least 12 days prior to the ATG promo on the MoneyMakerGroup forum. Court records show the scheme already was under investigation by federal authorities before the sales posts were made on the MoneyMakerGroup and TalkGold forums.
It is possible that the scheme was in a state of collapse even earlier than September 2009. Court records show that at least one bank account tied to the business was closed on June 18, 2009 — nearly four months prior to the first posts promoting the scheme on MoneyMakerGroup and TalkGold.
One MoneyMakerGroup poster — apparently angry that the program was being advertised in public — scolded the poster who started the thread.
“Please take down your posts,” the scolder wrote. “ATG asked all of the members not to advertise. Otherwise your account with the company will be closed. Go to recent e-mails from the company. This is serious. Please comply.”
The post scolding the advertiser appeared on Oct. 29, more than three weeks after the original sales pitch appeared on the forum and more than a month after federal agents began their probe into ATG.
By Feb. 22, 2010, federal prosecutors and Immigration and Customs Enforcement (ICE), a division of the U.S. Department of Homeland Security, were in federal court in Orlando filing a forfeiture complaint.
The Feds sought the seizure of $316,418.50 in a bank account linked to the scheme, according to court records. The forfeiture complaint alleged a Forex Ponzi scheme, and prosecutors linked the fraud to ATG, a Florida company known as Online Market Solutions and at least four individuals: Jose Cecilio Martinez Beltran, Francisco Amaury Suero Matos, Yehodiz Padua Valentin and Welinton Bautista Castillo.
Unnamed “others” also were referenced in the complaint.
“Investment opportunities offered by Alpha Trade Group promised participants unusually high monetary returns on investments and for referring other persons to the programs,” prosecutors said, in a statement to victims. “In reality, the investment opportunity was little more than ‘Ponzi’ or ‘Pyramid’ scheme, in which if participants actually received funds, those funds were generated by investments made by other Alpha Trade Group investors.”
A federal judge ordered the money forfeited on July 26, according to court records.
The case was brought by the office of U.S. Attorney A. Brian Albritton of the Middle District of Florida. Albritton’s office is handing a number of highly complex financial-fraud schemes.
Websites such as TalkGold, MoneyMakerGroup, ASAMonitor and MyCashForums have promoted one fraud scheme after another. TalkGold, MoneyMakerGroup and ASAMonitor are specifically referenced in court documents filed in the Pathway To Prosperity (P2P) fraud scheme.
P2P’s Nicholas Smirnow was charged in May by the U.S. Postal Inspection Service and federal prosecutors in Southern District of Illinois with operating a massive HYIP Ponzi scheme that affected investors across the world.
MoneyMakerGroup also is referenced in court filings by the SEC in the alleged Legisi Ponzi scheme.
Earlier this month, the U.S. Department of Justice announced that the U.S. Secret Service had helped bring about the arrest in France of an alleged international thief in part by monitoring criminal forums.
Vladislav Anatolievich Horohorin, 27, was arrested by French authorities in Nice. Court filings show that the Secret Service used undercover agents and “undercover communications” to develop the case.
Federal records show that ATG purported to be registered in Panama and was using “various corporations and fictitious names registered in Florida” to pull off the scheme.
Among the names used was “Orsa Investment Group LLC,” according to an affidavit filed in the case. The scheme began in April 2009, according to court filings.
An ICE agent said in an affidavit that the Internet and “business opportunity meetings” in Central Florida were used to promote the scheme.
Read the ATG forfeiture complaint, which paints a picture of a commission-based, multilevel-marketing (MLM)Â scheme within a Forex fraud scheme — and other schemes within schemes.
BULLETIN: A citizen of Jamaica has been charged by U.S. prosecutors in Orlando with operating a Forex Ponzi scheme alleged to have gathered more than $200 million from more than 6,000 investors.
David A. Smith had help from unindicted co-conspirators in Florida, prosecutors charged. The office of U.S. Attorney A. Brian Albritton of the Middle District of Florida is handling the prosecution, which seeks the forfeiture of $128 million, a sum of $40,103.90 from a wire transaction that occurred in 2006, a home in Windermere, Fla., precious gemstones, precious metals and jewelry.
The conspiracy was carried out in Seminole County, Fla., and was designed to channel money from the scheme into U.S. banks, prosecutors said.
Residents of Orange County were affected by the scheme, prosecutors said. They noted that the unindicted co-conspirators were affiliated with a Florida company known as JIJ Investments. Prosecutors did not name the unindicted co-conspirators, describing them as “Directors” of JIJ.
In 2005, Smith formed a Jamaican firm known as Overseas Locket International Corp. (OLINT), prosecutors said. In 2006, he started another firm known as OLINT TCI Corp. Ltd. in the Turks and Caicos Islands.
Both firms were described as “private investment clubs,” prosecutors said.
Smith also was the majority owner in a Lake Mary, Fla., firm known as I-Trade FX LLC, prosecutors said.
Although investors were told their money would be used for Forex trading, Smith was accused of “failing to invest their funds in Forex trading as he had promised.” He also caused fraudulent account statements to be sent to investors over the Internet, prosecutors said.
Meanwhile, prosecutors accused Smith, who also is in deep trouble in the Caribbean, of transferring “millions of dollars” from investors to his personal accounts “to finance a lavish and expensive life-style” for himself and others.
Smith, prosecutors said, created a “broad infrastructure” to create the appearance OLINT was engaged in legitimate Forex trading when it was not.
He has been charged with wire fraud, money-laundering and conspiracy, and is not expected to fight extradition to the United States.
TIRN operator David Merrick pleaded guilty in May to money laundering and conspiracy to commit wire fraud and securities fraud in the TIRN Ponzi scheme.
In the Evolution Marketing Group/FinanzasForex case, prosecutors said investigators had tied some of the money collected in the alleged scheme to the international narcotics trade. Court filings in the case paint a picture of an incredibly elaborate maze of companies and bank accounts set up to confuse both investors and law enforcement. At least 59 bank accounts, 294 bars of gold and nine luxury vehicles have been seized in the case. One of the cars was a 2008 Lamborghini Murcielago valued at more than $430,000.
A church pastor targeted congregants in a Forex Ponzi scheme in which he misappropriated at least $462,000, the CFTC said.
The pastor, Jeremiah C. Yancy, previously had been implicated by Idaho regulators in a real-estate swindle and scheme to sell unregistered securities that resulted in ruinous losses for investors, according to records.
Yancy also is known as Jeremiah Christian Yancy, Jeremiah C. Yancey, Jeremiah C. Glaub, Jeremy Christian Glaub and Jeremiah Christian Glaub, regulators said. The Idaho real-estate scheme was centered around the city of Nampa in the Boise and Meridian region, according to records.
When the real-estate fraud scheme was collapsing, Yancy turned to a Forex fraud scheme, according to the Idaho Securities Bureau.
In the CFTC case, Yancy and a company known as Longbranch Group International LLC were charged with operating a Forex Ponzi scheme that targeted at least 64 people, including church members.
“Yancy and Longbranch told prospective customers that they managed forex trading for non-profit organizations, including churches and orphanages,” CFTC said.
Clients were recruited through “fund-raising entities,†telephone conference calls set up by the entities and email pitches, the CFTC said.
Customers were promised “monthly returns of 20 to 40 percent from forex trading” and given false account statements, the CFTC said. Some customers allegedly were told their principal would be guaranteed.
“Yancy and Longbranch allegedly sent prospective customers account statements from demonstration forex trading accounts showing high returns from accounts purportedly containing up to $10 million traded by the defendants,” the CFTC said. “Defendants, however, did not inform customers that these forex accounts were demonstration and/or test accounts and did not represent actual customer account trading.”
The CFTC case was filed in federal court in Houston. Yancy’s last-known address was in Atoka, Okla., the CFTC said.
Read the CFTC complaint, which also alleges that Yancy was unlicensed and that his clients were not qualified investors.
Read the Idaho complaint from 2009, which was decided against Yancy earlier this year by default. Idaho regulators alleged that Yancy often spoke to church-connected groups and told attendees that he had risen above a difficult childhood to become a successful family man and businessman.
Yancy was ordered to pay $600,000 in restitution and more than $450,000 in penalties in the Idaho case.
“When the real estate investments failed, Yancy solicited friends, fellow church members and previous investors to invest with him in a foreign currency program,” Idaho investigators said in February. “Yancy was not properly registered to engage in foreign currency trading as required by the Idaho Commodity Code. Idaho investors who participated in Yancy’s foreign currency trading program have not received a return of their investment or any profit.
A California man accused of bilking Korean-Americans in an $80 million Forex Ponzi scheme was sentenced yesterday to 15 years in federal prison.
Prior to the sentencing of Peter C. Son of Danville, a courtroom spectator yelled in Korean that “You’ve got to kill that bastard!” according to the San Francisco Chronicle.
In June 2009, the SEC accused Son, 38, and his business partner, Jin K. Chung, of Los Altos, of targeting Korean-Americans in a scheme in which “funds were not traded in the forex market as claimed.”
Instead, the SEC said, the funds were used to pay cash “returns” to certain investors in “Ponzi-like fashion” and used to make mortgage payments on Son’s multimillion-dollar home.
“Supposed” Forex returns were “faked,” and investors were given “monthly account statements showing fictitious returns,” the SEC said.
Some of the funds were used to pay a $3,000 monthly salary to Son’s wife, who “did no work,” the SEC said. As the scheme was collapsing in 2008, funds were transferred “overseas,” the agency charged.
Investors were invited to the scheme’s offices purportedly to “view work stations with multiple trading monitors, ostensibly set up to allow . . . employees to monitor market conditions relevant to forex trading,” the SEC said.
But representations of Forex success were “false,” and the scheme “conducted little or no forex trading,” the SEC charged.
The “supposed forex investment program was a fabrication used by Son and Chung to attract investors,” the SEC charged.
Chung has not been not charged criminally.
The scheme operated through a company known as SNC Asset Management Inc. (SNCA) of Pleasanton, Calif. It also operated through a company in New York that had a similar name — SNC Investments Inc. (SNCI) — investigators said.
About 500 investors were defrauded, the SEC said.
It is not unusual for companies to use multiple names — including confusingly similar names — to pull off a fraud scheme. Nor is it unusual for fraudulent companies to claim they have a local, regional, national or international footprint to disarm skeptical investors.
Son’s scheme, fueled by advertisements and word-of-mouth, pulled in investors from at least five U.S. states, South Korea and Taiwan, the SEC said. His home in a gated community was valued at $2.6 million, and Son used investors’ money to pay “country club dues,” the agency charged.
Part of the scheme involved an advertisement that had been altered to appear as through it were an article in Business Week magazine.
It is common in fraud schemes for operators to imply their product or service is endorsed by famous people or companies. In 2009, members of the failed AdViewGlobal autosurf used the logo of Forbes magazine in a sales promo.
Separately, members of the alleged AdSurfDaily autosurf Ponzi scheme claimed the program’s operator, Andy Bowdoin, received a special award from the White House for business acumen.
The assets of an Arizona man who allegedly mixed a Forex Ponzi scheme with a cash-gifting scheme and claimed his software system let clients “profit every time” from trades have been frozen by a federal judge after the CFTC filed an emergency court action.
