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Tag: Frontier Assets

  • TelexFree Affiliate Pitches Appear To Have Been ‘Scraped’ To Drive Traffic To Purported Gold And Silver Venture In Panama; Spam Link Leads To Site That Showcases ‘First Zeek Red Carpet Event’ And ‘Banners Broker’ In Folder Labled ‘aaronsharazeek’

    UPDATED 7:36 P.M. ET (U.S.A.) Let’s say you’re out there feverishly flogging the TelexFree MLM even as the pyramid-scheme probe moves forward in Brazil, a judge and prosecutor have been threatened with death and TelexFree executive Carlos Costa is pulling an Andy Bowdoin and telling the world that God used him to bring the purported opportunity to the flock.

    There’s always risk associated with HYIP schemes. Now, however, it seems those risks are becoming even greater.

    With us so far? We’ll connect the dots below.

    At 5:56 p.m. on Friday, the PP Blog received a would-be “comment” that targeted this Nov. 17 story thread: NEW RECORDING: TelexFree Members Told To Pay The Piper 20 Percent Within 10 Days Or Lose Positions.”

    Here is a key fact: The sender used an IP based in France that has been associated by Project Honeypot with comment-spamming — pitches for porn sites and sites that purport to give you a good price on designer goods in advance of a predicted “downturn,” for example. (Basic message: You can look wealthy even if you’re not, even after the economy tanks. Buy your knockoffs now and look good when the sky is falling on your life.)

    The sender, now adding HYIP schemes to the porn and designer-good mix from that specific IP, used a handle that incorporated the word “Silver” within its overall handle and sought to plant a URL at the PP Blog to a Panamanian venture that advertises a custody service for precious metals. The PP Blog is declining to publish the URL and the name of the enterprise which, among other things, reproduces on its website the logos of an internationally famous insurer based in London and an internationally famous accounting firm based in Chicago. The site also publishes various contact phone numbers in the United States, Panama, New Zealand, Australia, Switzerland, the United Kingdom and Hong Kong. Although there is a chance that the service is legitimate, the PP Blog questions why someone or some thing is spamming links to the precious-metals site and loading them up further with links to “positive” coverage of seemingly unrelated HYIPs.

    For the purposes of this PP Blog post, the Panamanian venture is a sidebar tidbit. Far more interesting was the body content of the spam, which appears to be a compendium of gushing affiliate pitches for TelexFree that appear on the net. The spam appears to have been cobbled together by a human scraper or scraping device of some sort that had visited one or more TelexFree-related websites. Links embedded in the spam are the “real story” in the context of this PP Blog post.

    So, for starters, TelexFree’s name is being used as part of a bid to drive traffic to a precious-metals website on which visitors curiously are told they must provide 15 days’ notice if they wish to visit the office in Panama City. The PP Blog likely was targeted by the spammer simply because the word “TelexFree” appears here many times in reports about TelexFree-related events in Brazil and the United States.

    The spammer  — be it bot or human — appears to have made the calculation that TelexFree members might be the perfect customers for the precious-metals venture. Contained within the spam were three links: One to a site styled TelexFreeUnitedStates and two to a URL-shortening service that redirected visitors to Photobucket, the popular image-hosting and story-sharing website.

    Here’s where the story really begins . . .

    One of the picture stories told at at the Photobucket site was told inside a subfolder of a folder labeled “aaronsharazeek.” (Emphasis added.) The subfolder was slugged “First Zeek Red Carpet Event April 18th 2012.” Zeek conducted a Red Carpet event on that date.

    Exactly a month earlier — on March 18, 2012 — the popular BusinessForHome Blog listed “Aaron and Shara” as top Zeek earners. Whether the Photobucket site is operated by the same Aaron and Shara is unclear. Here’s a link to the BusinessForHome story. (If you’re not a Platinum member of Business For Home, you’ll need to purchase a subscription to read the entire story.) The PP Blog referenced the BusinessForHome story within a June 14, 2012, story titled, “Did Zeek Give Puff Piece To Rep Who Signed Petition For U.S. Senate To Investigate AdSurfDaily Prosecutors And U.S. Secret Service Agent?”

    The SEC moved against Zeek on Aug. 17, 2012. On the same date, the Secret Service said it also was investigating Zeek. Court records suggest the SEC began the Zeek probe at least by April 17, 2012, one day before the April 18 Zeek Red Carpet event highlighted within the “aaronsharazeek” folder on Photobucket.

    On April 17, 2012, according to court filings, the SEC tasked an IT specialist to “conduct Website/video capture” of ZeekRewards.com.

    Paul Burks appears to have been in deep thought on April 18, 2012, one day after the SEC tasked an IT specialist to capture content from Zeek Rewards.com. This is a slice of a photo from a larger photo that appears on Photobucket in a folder labeled "XXXX."
    Paul Burks appears to have been in deep thought on April 18, 2012, one day after the SEC tasked an IT specialist to capture content from Zeek Rewards.com. This is a slice of a photo from a larger photo that appears on Photobucket in a folder labeled “First Zeek Red Carpet Event April 18 2012.”

    Precisely when Zeek operator Paul R. Burks found out about the SEC probe remains unclear. But photos inside the “First Zeek Red Carpet Event April 18th 2012” subfolder at the Photobucket site show a Burks who appears to be in deep thought. One can only wonder what 66-year-old Burks was thinking about on that date. His health? His wife’s stress level, given the noise Zeek was creating in the small town of Lexington, N.C.? His ability to keep Zeek going? The prospect that investigators were closing in?

    There are 18 other photos in the Red Carpet event subfolder, some showing Zeek luminaries such as former SEC defendant Keith Laggos, former Zeek COO Dawn Wright-Olivares, former Zeek videographer OH Brown (looking happy), former Zeek trainer Peter Mingils (identified in one photo as the “V.P. of the Association of Network Marketing Professionals”). Other photos of Zeek personalities/staffers appear in the folder, as do photos showing attendees.

    Absent the “Silver”/TelexFree spammer, the PP Blog likely never would have seen these photos.

    Also within the “aaronsharazeek” folder at Photobucket is a subfolder slugged “Zeek Trip,” and subfolders slugged “Banners Broker” and “telexfree.” The “Zeek Trip” folder appears to contain four photos of Zeek-related real estate in Lexington, N.C. (In the ASD Ponzi case, affiliates suggested that ASD couldn’t possibly be illegitimate because ASD had an office. The same thing has been asserted by TelexFree promoters.)

    Meanwhile, the “Banners Brokers” folder contains a video of a sales pitch, and the “telexfree” folder contains images of government documents from the state of Massachusetts and the country of Brazil that appear to have been designed to plant the seed that TelexFree couldn’t possibly be a scam.

    Taken as a whole, the various folders and photos demonstrate the interconnectivity of MLM HYIP schemes, regardless of who actually controls the Photobucket site. It is known from other sources that some Zeekers also were in the JSSTripler/JustBeenPaid scam and the exceptionally murky Profitable Sunrise scam shut down by the SEC and various state regulators earlier this year.

    Banners Broker is an uber-bizarre Ponzi-board program. On July 2, 2013, the PP Blog reported that MLM attorney Kevin Thompson said that the name of his law firm had been used by scammers in a bid to dupe members of Banners Broker and Profit Clicking, the JSS/JBP-associated “program” linked to Frederick Mann that may have ties to the extremist “sovereign citizens” movement. The July 2 PP Blog post was titled, “Law Firm’s Name Used In Bid To Dupe Members Of Banners Broker, Profit Clicking, MLM Attorney Says.”

    Within the July 2 post, the PP Blog reported that it had received menacing messages in apparent “defense” of Banners Broker. As the Blog reported at the time (italics added):

    WARNING: The next paragraph  includes quoted material from one of the Jan. 18, 2013, spams, and the PP Blog is reproducing it to illustrate the bizarre and often menacing nature of the HYIP sphere. Indeed, the apparent Banner’s Broker supporter wrote (italics added):

    ” . . . I am Big Bob’s cock meat sandwich. Your mom ate me and made me do press ups until I threw up . . . I am gonna report you. When you make false accusations, you can get done. Maybe you will be seen in court soon . . .”

    It is as ugly today as it was on the January date the PP Blog received the communication.

    Why “programs” such as TelexFree, Zeek Rewards, BannersBroker and ProfitClicking become popular with people of faith is one of the head-scratching mysteries of current times. Gold fever, of course, is nothing new; it’s been around for centuries. What’s at least relatively new in the Internet Age is that the gold- and silver-sellers appear to be piggybacking off HYIP pitchmen, apparently hoping to rope in customers for shiny-object schemes.

    This "comment" sent to the PP Blog on Nov. 22 sought to drive traffic to a precious-metals site while using the TelexFree "program" as the engine.
    This “comment” sent to the PP Blog on Nov. 22 sought to drive traffic to a precious-metals site by planting a link to the site and also planting links related to TelexFree.

    On Oct. 25, the PP Blog reported that an alleged shiny-object scheme had taken root in Zeek’s back yard in North Carolina. On June 19, the PP Blog reported that the receiver in the Legisi HYIP Ponzi case was going after assets linked to E-Bullion, a collapsed payment processor with shiny-object woo. James Fayed, E-Bullion’s operator, is sitting on death row in California after a jury found him guilty of arranging the brutal contract slaying of his own wife.

    The Legisi scheme was targeted at Christians, and E-Bullion’s cheerleaders included the Canadian clergyman Brian David Anderson, who was sent to U.S. federal prison in 2010 for the Frontier Assets Ponzi scheme. Anderson also was linked to the Flat Electronic Data Interchange (FEDI) HYIP scheme that put Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon,” in federal prison after his September 2009 convictions for financing terrorism and fleecing FEDI investors.

    Yes, financing terrorism.

    Alishtari traded on his purported ties to prominent politicians, just like ASD’s Andy Bowdoin. At least one of the schemes linked to Alishtari and Anderson used the term “rebates,” just like ASD. The narrative surrounding FEDI read like impossibly outrageous fiction, a mind-bending example of a shiny-object scheme. Ten members of purported “Royal families” in the Middle East were said to have set aside “50 Billion in Gold” ($5 billion each) to advance the scheme. Another entity in the Middle East was said to have supplied a “total of 100 Billion in Gold.” Still another entity was said to have put up “500 Million dollars in liquid gold assets.”

    FEDI marks were solicited to purchase what effectively were trading desks that somehow would enable them to profit on the coattails of Middle East royals interested in escrowing huge sums to fund worldwide construction projects, with money purportedly flowing to the “labor” force. If that weren’t enough, the scheme purportedly was married to a venture that purportedly would put vending machines in at least 50,000 locations. The vending machines purportedly would sell debit cards, and were purportedly backed by $150 billion in gold and an insurance policy in Canada.

    In March 2012, the PP Blog reported on FTC allegations that three Florida companies and a Florida man had roped customers into a shiny-object scam, a precious-metals boondoogle allegedly carried out by telemarketers.

    Imagine what would happen if a scamming telemarketing firm had the customer lists for TelexFree, Zeek, Banners Broker, Profit Clicking, AdSurfDaily, Legisi and others.

    If the MLM industry seeks to win favor on Main Street and stop being the brunt of jokes, it needs to act forcefully to eradicate these schemes. MLM attorneys need to stop permitting schemes to trade on their names, thus potentially setting the stage for prospects to believe that no scam could be occurring because no lawyer would permit his name to be used in this fashion.

    But even today, what does one get when one visits the website of TelexFree? A pitch in which the alleged TelexFree pyramid scheme announces its pride at having MLM lawyer Gerald Nehra on board.

    Zeek traded on the name of MLM attorney Kevin Grimes, who comes off in Red Carpet Day shots as a Zeek crowd prop, and also the name of Nehra. Bidify traded on Kevin Thompson’s name. The lawyers should not permit this to happen. And they should stop making personal appearances at “opportunity” events and start questioning why so many of these “programs” are targeted at people of faith and promise or suggest the likelihood of absurd returns.

    Profitable Sunrise — perhaps recognizing that an MLM scheme can be made to appear legitimate if affiliates simply are provided the name of a  purported lawyer  — appears to have conjured up an attorney’s name out of thin air. It then allegedly proceeded to run off with millions and millions of dollars. When ASD’s Bowdoin switched from the two scams that eventually put him in prison (ASD and AdViewGlobal) and began pitching the alleged OneX pyramid scheme, one of the first things he did was assure the former ASD members he was pitching in a webinar that OneX had an “attorney,” adding that the venture was a great fit for college students. Bowdoin,  mixing in God talk during the October 2011 webinar, never identified the purported lawyer by name. Neither did a former ASD pitchwoman pitching the OneX scheme alongside Bowdoin.

    One of Bowdoin’s fellow OneX pitchmen was Zeek Rewards figure T. LeMont Silver.

    In the absence of self-imposed, self-regulatory restraints in the MLM industry — lawyers restraining themselves from becoming accidental or purposeful stage props and sanitizers of “programs,” for example — MLM prospects may be well-advised to view any MLM “program” with the highest degree of skepticism, regardless of the programs’ wares.

    Every single one of the “programs” referenced in this story has ridden on the coattails of a deity and lawyers. It did not matter whether the lawyers were real or imagined.

    And it did not matter that the Gods of many faiths were observing it all, perhaps mournfully wondering how the precious Children of the Earth had come to view MLM money as the maximum deity.

     

  • UPDATE: E-Bullion, Firm Alleged To Have Provided Payment Services To ASD, Linked To Alleged Legisi Ponzi Scheme; Like ASD, FEDI Fraud Scheme Called Payments ‘Rebates’

    Andy Bowdoin

    UPDATED 2:25 P.M. ET (U.S.A.) Still pushing autosurf and HYIP frauds?

    Last week, the PP Blog reported that the U.S. Secret Service and federal prosecutors had established a link between California-based E-Bullion and Florida-based AdSurfDaily. E-Bullion is a shuttered payment processor whose owner, James Fayed, is awaiting trial on charges of murdering his wife, Pamela Fayed, whom prosecutors said wished to cooperate in the E-Bullion probe.

    It was the first public assertion by the government that ASD had a tie to E-Bullion.

    The Blog further reported that E-Bullion had been linked to at least three alleged Ponzi or fraud schemes: ASD, Gold Quest International (GQI) and Flat Electronic Data Interchange (FEDI), whose convicted operator, Abdul Tawala Ibn Ali Alishtari, was associated with convicted Ponzi schemer Brian David Anderson.

    Alishtari, also known as Michael Mixon, was convicted in 2009 of financing terrorism. Anderson, a FEDI pitchman, was sentenced to federal prison for his role in yet-another Ponzi scheme known as Frontier Assets. He also has been linked to a mysterious scheme known as the “Alpha Project.”

    Like ASD’s Andy Bowdoin, Alishtari donated money to the National Republican Congressional Committee, according to the Federal Election Commission database. Documents reviewed by the PP Blog show that payments from the FEDI scheme were referred to as “rebates.” ASD also called its payments to participants “rebates.”

    Today the PP Blog is reporting that federal investigators also have established a link between E-Bullion and Legisi, a company whose operator, Gregory N. McKnight, was accused by the SEC in May 2008 of operating a massive Ponzi and fraud scheme based in Michigan. During the same month, the SEC also accused GQI of operating a massive Ponzi and fraud scheme from Las Vegas. Investigators likewise established a GQI link to E-Bullion.

    Documents reviewed by the PP Blog show that records maintained by E-Bullion were the subject of a subpoena issued on Aug. 6, 2008 — five days after tens of millions of dollars were seized by the U.S. Secret Service from bank accounts controlled by ASD’s  Bowdoin. The subpoena was issued in the Legisi case.

    As the PP Blog previously reported, the Secret Service, which used undercover operatives in the ASD case, also used an undercover operative in the Legisi case. In fact, the Blog reported, the Secret Service undercover operative and an undercover operative from the state of Michigan, had a face-to-face meeting with Legisi’s McKnight in his office.

    Legisi later began to act in a fashion that only can be described as bizarre, allegedly morphing into a sort of super-secret enterprise that was exhibiting clear signs of paranoia. Investors, for example, were asked to submit to a loyalty oath and pledge that they weren’t government investigators or informants.

    The AdViewGlobal autosurf, which has close ties to ASD, later began to operate in a similar fashion, morphing into a so-called “private association,” scolding members for asking questions in public and exhibiting paranoia.

    “This Association of members hereby declares that our main objective is to protect our rights to freedom of choice regarding our advertising and marketing information and conduct, through maintaining our Constitutional rights,” AVG announced on its website in February 2009.

    Court records show that the Secret Service also employed undercover operatives in the investigation of the INetGlobal autosurf. An affidavit in the case notes that at least two operatives were present at an INetGlobal function in New York earlier this year and that one undercover agent had been introduced to INetGlobal by an ASD member.

    ASD President Andy Bowdoin was indicted earlier this month on federal charges of wire fraud, securities fraud and selling unregistered securities. Prosecutors alleged he was operating a Ponzi scheme that had gathered at least $110 million. The indictment accused Bowdoin of making campaign donations to the National Republican Congressional Committee with proceeds from the ASD Ponzi scheme.

    Six days ago, prosecutors alleged in a forfeiture complaint that ASD member Erma Seabaugh used E-Bullion in November 2007 to transfer $10,510 to ASD. The alleged transfer occurred about six months before E-Bullion’s name surfaced in the GQI and Legisi cases brought by the SEC.

    When investigators later searched the home of James Fayed in the murder investigation, they found “approximately $60,000 in cash wrapped in plastic material; approximately $3,000,000 in gold; and approximately 31 firearms, including one with a long-range night vision scope, along with thousands of rounds of matching ammunition,” prosecutors alleged.

    Pamela Fayed was stabbed to death in a California parking garage on July 28, 2008. The Secret Service, which had begun its investigation of Bowdoin less than a month earlier, seized his assets three days later, on Aug. 1, 2008.

    The agents said Bowdoin was moving large sums of money outside the United States and had talked about buying a home in another country. In September 2008, the month after ASD’s assets were seized, an indictment was unsealed in Connecticut that accused Robert Hodgins of Virtual Money Inc. of helping a Colombia narcotics operation launder money at ATMs in Medellin.

    Virtual Money Inc. once provided debit cards to ASD, according to an ASD downline group.

    CLOSING NOTE: Read this chilling document from the case against Fayed in California.  Also see this 2007 report from CBS News. CBS reported FEDI operator Alishtari claimed to be “[National Republican Congressional Committee] New York State Businessman of the Year. ASD members later would make similar claims about Bowdoin.)

  • PROSECUTION: ASD Member Funded Account With Transfer From E-Bullion And Used Ad Rotator To Pitch ‘StreamlineGold,’ Apparent Pyramid Scheme; Records Show E-Bullion Founder Charged In Wife’s Murder In California

    An AdSurfDaily promoter whose cash was seized in February 2009 and now has been targeted for forfeiture funded one of her three ASD accounts in part with a transfer from E-Bullion, a shuttered payment processor whose founder was charged in 2008 with operating an unlicensed money-transmitting business and hiring a hit man to kill his estranged wife, according to records.

    The E-Bullion allegation raises troubling new questions about the sinister worlds of autosurfs and HYIPs, how ASD and its members were exchanging money and whether ASD and top promoters were employing secret conduits. In 2008, prosecutors asserted ASD had a relationship with E-Gold, a payment processor accused in 2007 of money-laundering. Yesterday’s assertion that ASD also had a relationship with E-Bullion marked the first time that prosecutors have raised E-Bullion’s name in the ASD case.

    Erma Seabaugh, known among ASD members as the “Web Room Lady,” used E-Bullion in November 2007 to transfer $10,510 to ASD, according to a forfeiture complaint filed yesterday.

    SCREEN SHOT: Federal prosecutors asserted yesterday that ASD member Erma Seabaugh funded one of her ASD accounts by transferring $10,510 from E-Bullion.

    E-Bullion founder James Fayed was jailed in California in August 2008, the same month as the seizure of tens of millions of dollars from ASD and nine months after the firm was used to transfer money to ASD, according to records. He initially was charged in an indictment unsealed in August 2008 by federal prosecutors with operating an unlicensed money-transmitting business that had processed more than $20 million in Ponzi scheme payments. The scope of E-Bullion’s alleged Ponzi business is unclear, but the company now has been linked to at least three alleged Ponzi schemes.

    In September 2008, Fayed was charged by the Los Angeles District Attorney’s office with the July 2008 murder of his wife, Pamela Fayed.

    In June 2008, a month before she was killed in a California parking garage by a man who allegedly had accepted $25,000 from James Fayed to carry out the plot, Pamela Fayed had informed federal prosecutors in California that she wished to cooperate in the investigation of E-Bullion, according to records. E-Bullion is referenced in court files as a payment processor used by Gold Quest International (GQI), an alleged Ponzi scheme operating in Las Vegas that was charged by the SEC in May 2008 and also was charged by Canadian regulators.

    A total of four people, including James Fayed, now have been charged in the murder plot. As with many things in the miserable worlds of HYIPs and autosurfs, the prosecution of GQI by the SEC turned into Theatre of the Absurd.

    GQI, accused in May 2008 by the SEC in a $29 million Ponzi case, sought to derail the case by filing a lawsuit for $1.7 trillion against the agency. Company officials absurdly asserted that GQI was immune to U.S. law because its Las Vegas operations enjoyed purported sovereignty that was portable from an “Indian” tribe in North Dakota and that GQI also was off-limits to prosecution in the United States because it was registered in Panama.

    Chillingly, E-Bullion also is referenced in documents filed by the Ontario Securities Commission in a case against Ponzi swindler Brian David Anderson, a former Christian clergyman from Vancouver, British Columbia. Anderson was sentenced to prison in the United States earlier this year for his role in a Ponzi scheme known as Frontier Assets.

    Anderson also was linked to a mysterious scheme known as the “Alpha Project.” U.S. and Canadian investigators also identified Anderson as a pitchman for an international HYIP known as Flat Electronic Data Interchange (FEDI). FEDI’s operator, Abdul Tawala Ibn Ali Alishtari, also known as Michael Mixon, was convicted in September 2009 of financing terror and fleecing investors in the FEDI scheme.

    In addition to the ASD account funded by the E-Bullion transfer, Seabaugh had at least two other ASD accounts, prosecutors charged in the forfeiture complaint. She used one of her accounts to advertise a mysterious business known as StreamlineGold, which was described by investigators as a probable “pyramid scheme dealing with the sale of memberships that are sold to customers.”

    The account through which Seabaugh promoted StreamlineGold was funded by a transfer from La Fuente Dinero, yet-another Ponzi scheme associated with ASD, prosecutors said.

    StreamlineGold’s website now throws an error message, but web records show it was promoted on the MoneyMakerGroup and TalkGold forums, two websites that are associated with Ponzi schemes and referenced in federal court records as a place from which the alleged Pathway To Prosperity Ponzi scheme was promoted.

    “StreamLine Gold is literally what it says,” a poster crowed on the MoneyMakerGroup Ponzi site in November 2007, the same month Seabaugh allegedly was promoting the same scheme through ASD. “[I]t can provide you with an unlimited income through the combination of Precious Metals and Cash with a business model whose time has come PLUS the most advanced and lucrative pay plan ever devised.”

    Records suggest StreamlineGold had failed in an earlier iteration — and then failed again after rebirthing itself.

  • GNI Members: Failed Program Was ‘Honest’ And ‘Real’; Critics Should Shut Up And Focus On Haiti Earthquake

    Critics of Gold Nugget Invest (GNI), the collapsed Internet HYIP, do not understand that the program that advertised a return of 7.5 percent a week was “real,” according to a member writing on an online Ponzi board.

    Bickering about GNI only will lead to additional problems for the company, which is faithfully trying to reorganize, and the critics should send money to Haiti instead of infecting the membership with negative thinking, according to the member.

    “[W]hy not use your idle time for [the Haitian people?]” the GNI apologist asked on the ASA Monitor Ponzi board. “l doubt if you can do that ‘cos that is your true nature.”

    Haiti suffered a devastating earthquake Jan. 12. As many as 200,000 people are believed to have perished.

    In earlier posts, the apologist suggested that GNI critics were suffering from “mental illness” and observed that, “I will be very grateful if GNI runs for 20 years as a pronzi (sic) !!!!”

    The poster did not explain how a program purported to be a “real” business could create legitimate profits by operating as a Ponzi scheme.

    GNI, which positioned itself as a betting “arbitrage,” tanked last week. It is among a number of recent investment programs using the name of a precious metal or a precious mineral that have encountered difficulty either from members or law enforcement. GNI did not publish verifiable financial information. There is no way to verify GNI’s claims, including an apparent claim that certain resources are tied up in a purported banking investigation in Europe that has nothing to do with the company.

    GNI now says its program will pay “up to” 20 percent monthly through a “No Risk Wager.” The company did not explain how it had categorically eliminated risk during a period in which it apparently did not have access to the capital it needed to operate and had suddenly changed the rules, leaving existing members holding the bag while apparently still advertising for new members to entrust their funds to the firm.

    Some members, though, insisted they were standing by GNI because it always had “paid” and just hit a bump in the road.

    Canadian regulators last week declared a collapsed program known as Gold Quest International (GQI) a “sham” and both a Ponzi and a pyramid scheme. Investors dumped at least $27 million into the program, according to the U.S. Securities and Exchange Commission.

    GQI, which claimed Panamanian registration while operating from Las Vegas and saying it was immune to U.S. and Canadian law because it was affiliated with a “sovereign” Indian tribe, scammed thousands of investors, according to the SEC and the Alberta Securities Commission.

    At least $3.15 million linked to GQI ended up in New Zealand, in one or more bank accounts tied to a company known as Topaz Group Ltd., according to court filings by Larry Cook, the court-appointed receiver in the SEC case. The majority of that money then was “immediately transferred from the Topaz Group business account to the account of Wendy Smurthwaite Davies, the wife of John Davies,” according to court filings.

    John Davies was identified as the owner of Topaz Group.

    Other GQI money made its way into E-Bullion accounts in California, according to court filings. The E-Bullion money is tied up in a fraud and murder investigation of E-Bullion owner James Fayed, accused of having his wife killed in a Greater Los Angeles parking garage.

    Another “gold-themed” tie involves Brian David Anderson, a former Christian clergyman from Vancouver, British Columbia. Anderson recently was sentenced to 90 months in federal prison in the United States for operating a $4 million Ponzi scheme known as Frontier Assets.

    Anderson also was linked to a mysterious scheme known as the “Alpha Project.”

    U.S. and Canadian investigators identified Anderson as a pitchman for an international HYIP known as Flat Electronic Data Interchange (FEDI). FEDI’s operator, Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon,” was convicted in September 2009 of financing terror and fleecing investors in the FEDI scheme.

    Records in the Anderson case include references to E-Bullion.

  • CHILLING: Terrorism Link, A Ponzi, An HYIP, Gold, Mysterious ‘Offshore’ Businesses, ‘Rebates’ — And A Brutal Murder In California

    EDITOR’S NOTE: HYIP or autosurf promoter? Can’t say no to the commissions from recruiting people into scheme after scheme? Position yourself as an “expert” on Internet forums — even though you don’t have a clue about the motivations of the program owners and may not even know their names? Find yourself promoting programs that reference “gold” and “funds” and relying on marketing assertions that cannot be verified? Tell your recruits that the programs are money “games” or nontraditional investments? Been involved in one program after another that has failed in this seedy and dangerous world? Think that you’ll have a lifetime of plausible deniability and that professional investigators will believe you when you explain you didn’t really know what was going on — despite the fact you’ve been involved in one failed “program” after another, perhaps for months and even years?

    Here’s a story about what can happen in the sea of HYIP, “Gold,” Ponzi and autosurf corruption . . .

    UPDATED 12:42 P.M. ET (U.S.A.) Yesterday a reader provided us a document that can only be described as chilling. The document, from the Ontario Securities Commission (OSC), includes exhibits from a 2003 Canadian civil-securities case against convicted Ponzi swindler Brian David Anderson, a former Christian clergyman from Vancouver, British Columbia.

    Last week, Anderson was sentenced to 90 months in federal prison in the United States for operating a $4 million Ponzi scheme known as Frontier Assets. Anderson also was linked to a mysterious scheme known as the “Alpha Project.”

    U.S. and Canadian investigators, meanwhile, also identified Anderson as a pitchman for an international HYIP known as Flat Electronic Data Interchange (FEDI). FEDI’s operator, Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon,” was convicted in September 2009 of financing terror and fleecing investors in the FEDI scheme.

    Why is the document chilling? For starters, its references a bank account held by Goldfinger Coin & Bullion Inc. in Camarillo, Calif. If that name does not ring a bell, think “E-bullion,” the now-shuttered money-exchange business purportedly backed by gold.

    James Fayed, the operator of Goldfinger and E-Bullion, was charged in 2008 with operating an unlicensed money-transmitting business. Investigators said E-Bullion had been used to transact at least $20 million in Ponzi scheme payments.

    During the same general time period in 2008, the SEC was conducting a Ponzi scheme investigation into a separate company known as Gold Quest International (GQI), which used E-Bullion and claimed to be registered in Panama.

    GQI operated from Las Vegas. It initially tried to claim that it was immune to U.S. law because of links to a “sovereign” Indian tribe. GQI was charged in May 2008 by the SEC with operating a Ponzi scheme. The purported “attorney general” of the purported “sovereign” tribe reacted by trying to file a lawsuit against the SEC for the preposterous sum of $1.7 trillion. A federal judge was not amused, and struck the bizarre filings.

    Woman Stabbed To Death

    On July 28, 2008, Pamela Fayed — James Fayed’s estranged wife — was brutally murdered in a parking garage in California. She was stabbed in the chest, neck and face — and left to die, according to court filings. Prosecutors said there was no evidence of robbery or carjacking. The murder, according to court filings, occurred just minutes after a meeting Pamela attended with her criminal attorney and her husband’s criminal attorney.

    James Fayed was present at the meeting, according to court filings. A meeting with separate attorneys — this one involving a divorce hearing — had been scheduled for the next day, July 29, 2008. Prosecutors said that James Fayed was at risk of being ordered to turn over nearly $1 million to Pamela at the divorce proceeding.

    Pamela had advised the government in June 2008 that she wished to cooperate in its criminal investigation of E-Bullion, according to prosecutors.

    “Pamela’s murderer left the crime scene in a red SUV that was captured on surveillance video, along with its license,” prosecutors said. “The license was traced to Avis car rentals in Camarillo, not far from [the] defendant’s business. The vehicle had been rented from Avis on July 3, 2008 using an American Express card issued to defendant and GCB.

    “An American Express credit card with the same account number was found in defendant’s wallet during a search of his residence in the days following Pamela’s murder. During the search of defendant’s residence, officers also found approximately $60,000 in cash wrapped in plastic material; approximately $3,000,000 in gold; and approximately 31 firearms, including one with a long-range night vision scope, along with thousands of rounds of matching ammunition,” prosecutors alleged.

    Prosecutors also alleged James Fayed arranged for the July 28 meeting to create an alibi.

    Read a court filing in the federal case against James Fayed in which prosecutors alleged he operated an unlicensed money-transmitting business. The filing references the alleged murder plot.

    Murder Charges Filed

    James Fayed and an employee — Jose Luis Moya — were charged by the Los Angeles District Attorney’s office with murder and a conspiracy plot in September 2008. Fayed paid Moya “approximately $25,000 to arrange the murder of Pamela Fayed,” investigators said.

    On July 3, 2008, investigators said, “Fayed and his company — Goldfinger, Inc. — rented a Suzuki sport utility vehicle that was used by the killers at the Watt Tower parking garage where Pamela Fayed was killed.

    “The Suzuki SUV was driven to Fayed’s Ventura County ranch on Happy Camp Road after the killing,” according to investigators. Moya returned the vehicle to Avis the next day.

    OSC Document Outlined Purported Anderson/E-Bullion Meeting In 2003

    The OSC document filed in Canada is important — and we suggest you read every word of it from the link below — because exhibits in the document show the murkiness and just plain creepiness of the HYIP and Ponzi worlds. One exhibit suggests Anderson planned to meet with Fayed and his wife in 2003 to discuss business.

    The document also references Alishtari and FEDI, claiming an investment program was backed by $125 billion in gold. Among other things, the document lists the name of Goldfinger Coin & Bullion and an account number, along with directions on how to open an E-Bullion account.

    Screen shot: From exhibit in 2003 OSC filing.

    Also included in the document is a purported joint-venture agreement marked “STRICTLY CONFIDENTIAL” that purportedly was used by Anderson to recruit investors into an international fraud scheme.

    Parallels To AdSurfDaily Case

    Parts of the document include claims very similar to claims made by promoters of the alleged AdSurfDaily (ASD) Ponzi scheme in the United States. Anderson, for example, was positioned as a “very successful business executive” who attended a function to observe Alishtari receive an award “for Republican Business Man of the Year for the State of New York.” Similar claims were made about ASD President Andy Bowdoin.

    Investor payouts, according to an exhibit in the OSC document, were called “rebates.” ASD, whose assets were seized by the U.S. Secret Service in August 2008 amid Ponzi allegations, also called its payouts “rebates.” Exhibits in the OSC document were thick with references to God and family — another similarity to the ASD case.  Anderson’s efforts to promote the program were deemed “heroic,” and business was conducted in part from Boca Raton, Fla. ASD was thick with Florida members.

    In a purported email from Anderson dated April 17, 2003, according to an exhibit within the OSC document, Anderson laid out the case for the new venture.

    “Dear Family,” the email began. Chillingly, the email appears to reference Pamela Fayed, allegedly murdered by her husband and conspirators five years later. The email suggests there once were happy days between the Fayeds.

    “I am very pleased that my recommendations and leg work have paid off and the Alpha Project will be merging its gold value/currency transfer through E-Bullion,” the email purportedly sent by Anderson claimed.

    “E-Bullion is owned by a wonderful couple who have their roots in Egypt and, therefore, are Arab in descent. I will be spending personal time with them on Monday in California.”

    Screen shot: Exhibit of purported Anderson email in 2003 OSC filing.

    The email, which discusses a trip to Panama, promised investors an “offshore” company and outlined a plan to sell “debit cards” through vending machines that would be positioned in posts offices, hotels and college buildings.

    Put “$20 into a vending machine and the machine spits out a loaded Debit card for you,” the email said. “Now you can begin to see why the Alpha Project in will in time be another Microsoft in size.”

    Claims in HYIP and Ponzi schemes that a company is destined to become the “next” Microsoft or Google are common. Beyond that, the use of debit cards in the murky HYIP and autosurf words is becoming increasingly popular — as are appeals for investors to entrust funds to “offshore” businesses, amid claims that such businesses are outside the reach of U.S. law enforcement.

    Read the OSC document from 2003.

  • UPDATE: Prosecutor Lauds FBI Terrorism Task Force In Case That Linked Serial HYIP Promoter To Scheme Operated By Man Convicted Of Financing Terrorism

    EDITOR’S NOTE: In an earlier post, we briefly touched on Ponzi peddler Brian David Anderson and his tie to an HYIP operated by a man convicted of financing terror. Federal prosecutors now have released a formal statement on Anderson’s guilty plea in a related Ponzi scheme — and the statement thanked the FBI’s Joint Terrorism Task Force for its work in the case.

    Here, now, the story . . .

    Critics long have fretted about the often-murky world of brick-and-mortar and electronic HYIPs and autosurfs, pointing out that no one really knows the motivations of the operators and their pitchman and that vast sums of money easily could fall into the hands of terrorists.

    Now federal prosecutors have lauded the FBI’s Joint Terrorism Task Force for its work in the successful prosecution of Canadian citizen Brian David Anderson, whom investigators linked to an international HYIP known as Flat Electronic Data Interchange (FEDI).

    Anderson was identified in legal filings as a FEDI pitchman, claiming FEDI was a commodities exchange and that he was selling “seats.”

    FEDI actually was a fraudulent loan-investment scheme operated as an HYIP by Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon.” Alishtari, 46, of Ardsley, N.Y., pleaded guilty in September 2009 to fleecing investors out of millions of dollars.

    In the same case — a case in which Anderson’s name was referenced as a FEDI pitchman in a grand-jury indictment — Alishtari pleaded guilty to financing terrorism.

    “Alishtari . . . admitted that he stole millions from investors and knowingly financed what he believed to be tools of terror,” U.S. Attorney Preet Bharara said in September, after the guilty plea. “In enriching himself, Alishtari displayed a deliberate disregard for the financial and personal security of others.”

    Investigators said Alishtari “facilitated the transfer of $152,000, with the understanding that the money would be used to fund training for terrorists.

    “In the latter half of 2006,” according to investigators, “Alishtari agreed to discreetly transfer these funds for an undercover officer, believing that the money was going to be used to purchase night vision goggles and other equipment for a terrorist training camp in Afghanistan. During his guilty plea, Alishtari admitted that he sent the money from the United States knowing that the funds were to be used to help finance alleged terrorist activity in Pakistan and Afghanistan.”

    Anderson, the former pastor of a church in Canada who was arrested in Spain in 2007, was not linked to terrorism. But Canadian authorities said he pushed FEDI and another investment scheme known as Frontier Assets.

    He pleaded guilty in the United States to criminal charges stemming from the Frontier Assets scheme, and was sentenced last week to 90 months in federal prison. Prosecutors described it as a $4 million Ponzi scheme.

    U.S. District Judge Alvin K. Hellerstein said Anderson “ripped out” investors’ hearts.

    Prosecutors said Anderson told lie after lie to separate people from their money.

    “Anderson touted Frontier Assets as an exclusive ‘private loan program’ that promised high rates of return in the form of interest payments on the invested principal,” prosecutors said.

    The use of vague descriptions was part of the scheme, prosecutors said.

    “[I]n a document titled ‘How Does Frontier Assets Make Their Income,’ Frontier Assets boasted that it had been appointed a ‘Program Manager’ to a ‘major International Business Corporation’ that participates at the ‘private banking level of several significant European and Asian banks,’” prosecutors said.

    Investment jargon also was used to pique investors’ interest, prosecutors said.

    “Frontier Assets claimed the ability to place investors with offshore entities, including ‘Private Placement Investment Programs,’ ‘Real Estate development in Asia and the United States,’ ‘Manufacturing plants,’ ‘Commodities worldwide,’ ‘Forex Exchange,’ and ‘Buying and Selling of specialized bank paper, i.e. CD’s and Bank guarantees,’” prosecutors said.

    Investors’ funds were said to be insured by an “International Foundation,” prosecutors said.

    But Frontier Assets was blowing smoke, prosecutors said.

    “[T]he only funds paid into the Frontier Assets accounts were monies that had been provided by investors in the program, and the only payments out were payments of interest to investors, and transfers to Anderson and other co-conspirators. Like many other Ponzi schemes, more recent investors in Frontier Assets ultimately lost a substantial portion, if not all, of their invested principal. In total, at least 50 investors were defrauded of at least $4 million in funds.”

    Bharara praised the FBI’s Joint Terrorism Task Force for its work in this case.