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Tag: Gerald Rome

  • ‘Achieve Community’ Issued Cease-And-Desist Order, Accused Of Securities Fraud, Selling Unregistered Securities And Conducting ‘Pure’ Ponzi Scheme In Colorado

    From a YouTube promo for Achieve Community, which has been issued a cease-and-desist order in Colorado.
    From a YouTube promo for Achieve Community.

    BULLETIN: (3rd Update 3:44 p.m. EDT U.S.A.) The Colorado Division of Securities has issued a cease-and-desist order to “Achieve Community” and accused the network-marketing “program” of securities fraud and selling unregistered securities while conducting “a pure Ponzi and pyramid scheme.”

    The order applies to Achieve, Achieve International LLC, Work with Troy Barnes Inc. and Achieve founders Troy Barnes of Michigan and Kristine “Kristi” Johnson of Colorado, the Division said.

    Achieve was known in shorthand as TAC.

    Johnson already has settled without admitting or denying the allegations, the Division said.

    Barnes did not respond to the action, the Division said.

    It added that the first complaints against Achieve were submitted to the state in October 2014. The state confirmed publicly in January that Achieve was under investigation.

    “Given the location of Achieve in Colorado, we believe that it is important to address this fraudulent activity on a local level and ensure that state investors are protected by barring any further illegal sale or solicitation of these securities by the respondents in this state,” said Colorado Securities Commissioner Gerald Rome.

    Colorado’s action is believed to be the first state-level action brought against Achieve, which the U.S. Securities and Exchange Commission charged with fraud in February 2015. A federal judge imposed an asset freeze in the SEC case.

    Johnson and Barnes have invoked their Fifth Amendment right not to incriminate themselves, according to court filings. Barnes allegedly has told the SEC he is the target of a criminal investigation.

    From a statement today by the Division (italics added):

    Complainants alleged that they had bought shares in TAC after information on the company’s website promised 800-percent returns on “positions” in the TAC “matrix” costing $50 each.

    According to an official complaint compiled by the Division, Barnes and Johnson both allegedly appeared in videos promising that investors would receive an unlimited 800-percent return on positions based on the funds of others who obtained new positions. Further, the founders stated that TAC was “a lifetime income plan,” that members could make “as much as you like with us, as often as you like with us,” and expressly claimed that they were not operating a pyramid or Ponzi scheme.

    The Division alleged, however, that the respondents committed securities fraud because the business was, in fact, a pure Ponzi and pyramid scheme. Unlike lawful multi-level marketing businesses, TAC did not sell a product. The proceeds paid to investors and to Johnson and Barnes were derived from funds obtained from later participants in the TAC matrix.

    The Division asserts that, despite acting as broker dealers in order to sell the positions, neither Barnes nor Johnson were licensed with the state, as required by the Colorado Securities Act. Furthermore, respondents violated the Act with the sale of unregistered securities products in the form of the $50 positions.

    The PP Blog reported on April 20 that an order to show cause had been issued against Achieve and that a cease-and-desist order appeared to be pending.

  • UPDATES: (1) Colorado Boots WCM777; (2) California Didn’t Have To Look Far To Find ‘Program’: State Has Office In Same Building From Which Alleged Multimillion-Dollar Securities Scam Operated

    From the Colorado C&D against the WCM777 MLM "program."
    From the Colorado C&D against the WCM777 MLM “program.”

    UPDATED 6:33 P.M. ET (U.S.A.) The state of Colorado has issued a cease-and-desist order against the WCM777 “program,” saying the Ming Xu-led enterprise was selling unregistered securities.

    Ming Xu also is known as Dr. Phil Ming Xu, according to WCM777 promoters.

    In issuing the C&D, Colorado now has joined at least two other U.S. states in banning WCM777. The other states are California and Massachusetts. Louisiana has issued an Investor Alert. (Edit 6:33 p.m. New Hampshire also has issued an Investor Alert on WCM777.)

    California has alleged that WCM777 gathered at least $20 million.

    Gerald Rome, Colorado’s acting securities commissioner, announced his state’s ban on Jan. 21. Paperwork is here. Ming Xu consented to the action without admitting or denying wrongdoing.

    From a statement by Rome’s office (italics added):

    Named in the Order are World Capital Markets, Inc., WCM777, Inc., and their founder and chairman, Ming Xu, all of Pasadena, California.

    The Staff of the Division of Securities (the “Staff”) alleged that World Capital sought Colorado investors through websites, webinars, and live presentations to purchase packages that allow the purchaser to access World Capital’s cloud media services and earn commissions or profits with advertised returns of more than 90%. The program operated much like a multi-level marketing program where purchasers received bonuses for referrals, purchase of stock options, and other bonuses based on how many referrals obtained by a purchaser.

    The Staff alleged that World Capital failed to register either security offering and, by offering the investment opportunity to the public at large by soliciting on the internet, World Capital violated the registration provisions under the Act.

    Meanwhile, it turns out that California didn’t have to venture too far to find WCM777.

    The WCM777 MLM scam was operating from Suite 900 at 150 S. Los Robles Ave., according to a Desist and Refrain Order the state issued last week.

    But the state itself has an office in the same building. The Pasadena branch of the California Department of Rehabilitation occupies suite 300, according to the DOR’s website. The agency says it “administers the largest vocational rehabilitation program in the country.”