Sentencing for Legisi HYIP Ponzi scheme pitchman Matthew John Gagnon has been rescheduled for June 18. Gagnon initially was scheduled to be sentenced yesterday, federal prosecutors said earlier this month.
Gagnon pleaded guilty to not disclosing he’d been paid more than $1 million by Legisi and operator Gregory N. McKnight to tout the “program” online. McKnight is scheduled to be sentenced Aug. 6, federal prosecutors said.
Legisi, a Ponzi-forum darling, collapsed in 2008. It triggered a civil probe by the SEC and a criminal investigation by the U.S. Secret Service. Michigan securities regulators also were involved in the probe.
Other recent Ponzi-board “programs” that became the subjects of major investigations include Pathway To Prosperity, Imperia Invest IBC, AdSurfDaily, Zeek Rewards and Profitable Sunrise. All of the “programs” claimed absurd rates of return.
The name of MoneyMakerGroup, a forum listed in U.S. court filings as a place from which Ponzi schemes are promoted, appears in an evidence exhibit in the Legisi case. Also included in the exhibit is Legisi’s bizarre Terms of Service, which required investors to avow they were not an “informant” for government agencies such as the CIA, FBI, SEC, “Her Majesty’s Police,” the Intelligence Services of Great Britain and the Serious Fraud Office, among others.
Like McKnight, Gagnon also faces millions of dollars in civil judgments for hawking the Legisi scheme.
In a plea agreement in the criminal case, Gagnon admitted he’d caused more than $7 million in losses to more than 50 Legisi investors.
Delays in sentencing dates may be due in part to the difficulty the court-appointed receiver in the Legisi case has encountered in deposing a potential Legisi witness jailed in Alabama in a second scam.
BULLETIN: The state of Kansas has issued a cease-and-desist order against the alleged Profitable Sunrise HYIP scheme, saying the “program” offered “gaudy” returns “of 1.6% to 2.7% on a daily basis.”
In a statement, Kansas securities officials say the order names Florida resident David P. Cozzocrea as a Profitable Sunrise pitchman. Cozzocrea’s promo appeared on a website styled KTFAlways.com. (The site appears to be offering an Iraqi Dinars scheme at the time of this post.)
“Two Kansas investors learned about Profitable Sunrise through KTFAlways.com and contacted Cozzocrea directly. Cozzocrea provided the investors with instructions for setting up an account with Profitable Sunrise and directly funded their accounts with Profitable Sunrise,” the office of Josh Ney, Kansas interim securities commissioner, said.
Meanwhile, the Kansas order also identifies Ohio resident Nanci Jo Frazer of NJF Global Group as a Profitable Sunrise pitchwoman.
“Two other Kansas residents invested in Profitable Sunrise through an organization known as the NJF Global Group Community,” Ney’s office said. “The NJF Global Group Community was operated by Focus Up Ministries, Inc. and its founder, Nanci Jo Frazer. The NJF Global Group Community promoted Profitable Sunrise as a fundraising opportunity for religious-based and charitable organizations.”
Kansas now has become at least the third U.S. state to identify Frazer or NJF Global Group Community in a securities action. The others include Ohio and Minnesota. NJF Global Group also is referenced in an alert by the Financial Markets Authority of New Zealand.
Kansas urged “any Kansas residents” who may have invested money with Profitable Sunrise or had contact with persons promoting Profitable Sunrise to contact Ney’s office immediately.
“Considering the extent of this scheme, it is likely that several other Kansas residents have funds at risk with Profitable Sunrise,” Ney said. “Our office needs information from such people in order to stop this type of activity.”
A website tied to the NJF Global Group, however, appears to be encouraging investors not to contact state regulators.
“If you file a claim in your State, be prepared to prove yourself and allow access to your bank accounts, personal info and emails as a part validating you,” NJFGlobalGroup.com says. “Some states are saying that all who participated are considered to have purchased an unregistered security.”
In 2008 (and later), pitchmen for the AdSurfDaily Ponzi scheme also discouraged recruits from filing complaints with regulators.
In April, the SEC described Profitable Sunrise as a pyramid scheme that may have gathered tens of millions of dollars through offshore entities.
Kansas now has become one of at least 36 U.S. states or provinces in Canada to issue cease-and-desist orders or Investor Alerts against Profitable Sunrise. At least four Kansas residents invested a total of at least $22,000 in Profitable Sunrise, the state said.
Whether purported Profitable Sunrise operator “Roman Novak” has any plans to help pitchmen address potential legal bills is unknown.
The Kansas investigation is ongoing, the state said.
John Schepcoff says he potentially lost more than $193,000 in Profitable Sunrise but that a new “program” is “1,000 percent” better.
In a bizarre and disturbing video playing on YouTube, a former Profitable Sunrise pitchman claims a new “program” he joined is operating from Hong Kong and is purveyed by an unidentified “doctor.”
The purported opportunity is “1,000 percent better” than Profitable Sunrise or Zeek Rewards, according to the video.
News of the video first was reported on the RealScam.com antiscam forum.
Pitchman John Schepcoff did not identify the new “program” in the 14:32 video. But he described it as invitation-only. Zeek made similar claims, according to the SEC’s August 2012 Ponzi- and pyramid action against the North Carolina-based firm and accused operator Paul. R. Burks. The SEC described Zeek as a $600 million fraud scheme.
In April 2013, the agency described Profitable Sunrise as a pyramid scheme that may have gathered tens of millions of dollars, in part through using financial conduits in the Czech Republic, Australia, Panama and China.
“There’s a litttle bit of a [learning] curve, like also Zeek Rewards in a way, but he made it 1,000 percent better,” Schepcoff said of the new Hong Kong “program.”
Earlier in the video, Schepcoff claimed the new program was “1,000 percent better” than Profitable Sunrise.
Schepcoff put $8,225 into the new program, he claimed in the video. He further claimed he’d potentially lost more than $193,500 in Profitable Sunrise but is holding out hope that “Roman Novak” somehow will resurrect the “program.”
It is unclear whether “Roman Novak” actually exists, according to court filings.
Among other things, Schepcoff claims in the video that Profitable Sunrise participants need to accept personal responsibility for their losses in the “program” and should not blame individuals such as himself or Profitable Sunrise pitchwoman Nanci Jo Frazer.
“Stop blaming people, and say, ‘I am responsible,’” Schepcoff coached. Other people who should not be blamed include “Roman Novak,” he noted.
And Schepcoff claimed he is “so happy” and “really, really happy” he got into the new program. Smiles, however, are absent from his face throughout the video.
With respect to Profitable Sunrise, Schepcoff described the “program’s” scheme that purportedly permitted “compound[ing]” at a daily interest rate of between 2.15 percent and 2.7 percent as a “no-brainer” for a coach and mentor in finance such as himself.
“And I teach people about the . . . way how things are done,” he said.
When he heard about Profitable Sunrise in December 2012, Schepcoff said, “I basically ran to my bank, and I couldn’t get the money in fast enough.”
Just four months earlier — in August 2012 — the SEC said Zeek duped people into believing they were receiving a legitimate return of about 1.5 percent a day. The Profitable Sunrise “Long Haul” plan purported almost to double Zeek’s purported daily payout.
“I kept putting wire transfers after wire [transfer]” into Profitable Sunrise,” Schepcoff said, suggesting he took money out of retirement accounts to do so.
“Greed” that became like a “cancer” controlled his behavior in Profitable Sunrise, he said. Schepcoff did not explain what was driving his behavior in sending funds to the purported Hong Kong “program” purportedly purveyed by the “doctor.”
The new program apparently relies on a secret strategy designed to prevent links from being shared publicly and is “amazing” in “what it does,” he said. “There’s people — I can tell you this — that are bringing out only in five months over [$]40,000.”
One person, according Schepcoff, told him that he’d taken out “over [$]200,000” from the new program in a single day.
Some HYIP “programs” are pitched by “sovereign citizens” and political extremists who divine a construction by which participants are “free” to spend their money as they see fit and that specific word combinations insulate purveyors from any liability if a “program” collapses or becomes the subject of an action by law enforcement.
HYIP scams typically are promoted on social-media sites such as YouTube, Twitter and Facebook, FINRA said in a 2010 warning.
During its 11 p.m. newscast yesterday, WTOL (CBS/Toledo) aired a report titled “Holy Rip-Off” about the alleged Profitable Sunrise HYIP scam. The report, which began with images of Ponzi schemer Bernard Madoff playing in the background, focused on alleged Profitable Sunrise pitchwoman Nanci Jo Frazer of Bryan, Ohio. Frazer and her NJF Global Group are referenced in Profitable Sunrise-related regulatory actions that brought the alleged scam to a halt, but have not been charged.
It’s easy to imagine that many people in WTOL’s audience will be surprised to learn that groups of individuals were pushing Profitable Sunrise and its absurd purported daily rates of return with a straight face. Among the Profitable Sunrise offerings was the bizarrely named “Long Haul” plan that promised interest of 2.7 percent a day that could be compounded. That Profitable Sunrise also traded on faith may bring a special blend of horror to the station’s Middle America viewers.
Still, it won’t be the maximum horror. Indeed, the SEC has alleged that Profitable Sunrise pitchmen may not even have known the identity of the person or persons running the “program” from a “mail drop” in England.
Indeed, a situation has evolved in which self-identified Christians apparently were targeting other Christians with promises of daily payouts that would make Madoff gag — and from all indications were doing so without even knowing for whom they were working as the offer spread virally over the Internet.
Whether purported Profitable Sunrise operator “Roman Novak” even exists still isn’t known.
Then, of course, there is the question about the final destination of purported tens of millions of dollars directed at the “program,” which was pitched in part from well-known forums referenced in U.S. court filings as places from which massive Ponzi and fraud schemes are promoted.
Within hours of an action brought by North Carolina against Profitable Sunrise weeks ago, a poster on the MoneyMakerGroup Ponzi forum said this:
As the story has continued to unfold, an element or elements within NJF Global Group appears to be trying to blame critics for the demise of the “program,” as though the 2.7-percent-a-day “Long Haul” and four other absurd plans were entirely rational and didn’t warrant any scrutiny at all. This is occurring against the backdrop of major actions brought against other HYIP “programs” by the U.S. government in recent years, including Zeek Rewards last year. Zeek allegedly planted the seed it paid an average of 1.5 percent a day, about half of the purported return of the Profitable Sunrise “Long Haul” plan.
One of the issues posed by Profitable Sunrise is the issue of willful blindness among promoters. If Zeek was a scam at 1.5 percent a day, for instance, how could Profitable Sunrise not be one with “plans” that dwarfed the returns of Zeek?
It is known that Profitable Sunrise had promoters in common with Zeek. Some of the promotional ties among various HYIP programs date back at least to the AdSurfDaily 1-percent-a-day scheme in 2008. Like Profitable Sunrise, ASD also traded on religion.
As the screen shot (above) from the WTOL report shows, Profitable Sunrise offered a three-tiered, MLM-style referral “program” on top of the absurd interest rates. ASD President Andy Bowdoin is in federal prison for his 2008 scam, which offered a two-tiered referral program on top of an absurd 1-percent-a-day interest rate.
When the U.S. Secret Service exposed the ASD scam, Bowdoin compared the agency to “Satan” and the raid on ASD’s Florida headquarters to the 9/11 terrorist attacks. Earlier — prior to the August 2008 raid — he described himself as a Christian “money magnet” and encouraged prospects to send him tens of thousands of dollars at a time.
Watch WTOL introduce Profitable Sunrise and the early fallout to its audience . . .
Joe Borg of the Alabama Securities Commission. From: WSFA news report.
EDITOR’S NOTE: Alabama was one of the first U.S. states to take action against the Profitable Sunrise HYIP “program,” issuing both an Investor Alert and a cease-and-desist order last month. The C&D lists two alleged “agents” of Profitable Sunrise, demonstrating that a “program” can create problems for pitchmen, perhaps even as the “program” operators make a getaway or disappear into the darkest corners of the Internet.
Profitable Sunrise had at least five purported investment plans, including one dubbed the “Long Haul” that promised a payout of 2.7 percent a day.
Whether the bizarrely named “Long Haul” plan was a deliberate taunt at regulators and possibly even the pitchmen who helped the scheme gain a head of steam remains unclear.
Listed as agents in the Alabama order were Melton McClanahan and AdamYork. “An investigation of the company’s actions revealed that the men allegedly promoted at least five different ‘investment plans’ through a website used to promote Profitable Sunrise investment program and disseminate information to potential investors regarding the company’s various investment opportunities,” the Alabama Securities Commission said in the order.
Also listed in the order were purported Profitable Sunrise operators Roman Novak and Radoslav Novak. In a complaint last week, the SEC said that “Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places.”
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Joe Borg of the Alabama Securities Commission (ASC) has dealt with massive fraud schemes that traded on faith, including the Greater Ministries International Church caper in the 1990s that led to criminal convictions against five individuals.
Back in 1999, ASC and the Ohio Division of Securities filed a joint complaint in federal court in Florida to shut GMI down. The purported “opportunity” took in more than $550 million by touting “divinely-inspired investments in the foreign currency market and gold, silver and diamond mines in Africa and the Caribbean,” ASC said at the time.
BULLETIN: (UPDATED 1:56 P.M. EDT (APRIL 8, U.S.A.) In a move that may rattle promoters of HYIP fraud schemes, the SEC has scheduled a deposition for at least one individual known to have pitched the Profitable Sunrise “program.”
Pitchman Anthony M. Infante will be deposed April 11 at a location in Florida, according to the docket of the case.
Martin Sipe will be deposed April 9 [moved to April 19] at a location in Utah, according to the docket. Sipe’s tie to the ProfitableSunrise case was not immediately clear.
Whether the SEC plans other depositions has not been disclosed in early filings.
The filings disclosing the depositions of Infante and Sipe are expected to appear later today on the ASD Updates Blog.
In filings in federal court in Atlanta this week, the SEC described Profitable Sunrise as an international pyramid scheme that had used a “mail drop” in England while conducting an “offering fraud” targeted at U.S. citizens.
“Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places,” the SEC alleged.
URGENT >> BULLETIN >> MOVING: (17th update 4:02 p.m.) The SEC has filed a complaint against the ProfitableSunrise HYIP “program” in federal court in Atlanta. The story first was reported by CourthouseNewsService this morning.
At the same time, the PP Blog has learned that the agency applied for an emergency asset freeze, explaining that Profitable Sunrise was using a “mail drop” in England and that “Hungarian law enforcement authorities” had had frozen an account holding $11.3 million connected to the scheme as part of an “investigation of suspected money laundering.” U.S. District Judge Thomas W. Thrash Jr. granted the freeze, which applies to multiple bank accounts.
The Profitable Sunrise “referral program” operated as a “pyramid scheme,” the SEC said in its filings. Moreover, the SEC charged, Profitable Sunrise was conducting an “offering fraud” targeted at U.S. citizens and selling unregistered securities.
And people pushing the “program” for commissions may not even know who they’re working for, the SEC said.
“Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places,” the SEC alleged.
The complaint names Inter Reef Ltd. (DBA Profitable Sunrise) as defendants. Four relief defendants also are named:
Melland Company SRO, Color Shock SRO, Solutions Company SRO, and Fortuna-K SRO.
Absent from the list of defendants are both “Roman Novak” and “Radoslav Novak.” Although many Profitable Sunrise pitchmen have claimed that “Roman Novak” operates the company and that “Roman’s” brother “Radoslav” is its attorney, that information has not been confirmed.
“There is more than a slight possibility, as with many offering frauds, that the people described in the website, including the Novak brothers, do not exist,” the SEC said.
InterReef’s registered agent is based in Seychelles, an island chain in the western Indian Ocean, the SEC said.
“Tens of thousands of investors” may have invested “at least tens of millions of dollars in Profitable Sunrise,” the SEC said.
Assertions online that Profitable Sunrise “generates profits by making loans to businesses at higher rates” are “false,” the SEC charged.
The scheme spread in part through “social media” and “numerous promoters in the United States,” the SEC said in its complaint.
Incongruities dotted Profitable Sunrise, the SEC alleged.
Although Profitable Sunrise claimed it had been operating for six years, “the United Kingdom Companies House reports that Inter Reef has been in existence for only 19 months,” the SEC alleged.
Meanwhile, the SEC said, a YouTube promo for Profitable Sunrise positioned the “opportunity” as a “ministry” and included a discussion of why Profitable Sunrise “is not a Ponzi or pyramid scheme.”
From the SEC complaint filed in federal court in Atlanta April 4.From the SEC complaint.
Caption from Colorado’s Final Cease and Desist Order dated April 2, 2013, against Profitable Sunrise
Profitable Sunrise had come under investigation in Colorado at least by March 8 and was officially notified March 11 that the state suspected it was breaking securities laws, the state Securities Board says in filings this week.
Colorado scheduled a hearing for March 25 after learning that Profitable Sunrise also was under investigation in North Carolina, but the firm filed “no answer or other responsive document,” the Securities Board said.
In short, the filings suggest that Profitable Sunrise did not even ask for more time to respond to the state’s allegations that it had reached out from England to sell unregistered securities unlawfully to residents of Colorado.
And, according to the filings, no answer was received even though ProfitableSunrise claimed on its website that “RADOSLAV [Novak] is identified as ROMAN’s brother, as well as the attorney and the person responsible for marketing PROFITABLE SUNRISE.”
Roman Novak, Profitable Sunrise members claim, was the operator of the scheme.
In a series of devastating filings, the state revealed that at least three Colorado investors sent money via wire to Profitable Sunrise in February. All of the transactions were for the purported Profitable Sunrise “Regular Plan,” which required “a minimum of $500” and offered “an interest rate of 1.8% per business day,” the state alleged.
Profitable Sunrise offered five plans, including the bizarrely named “Long Haul” that purported to pay 2.7 percent a day with a purported Easter payout that has not materialized
Two of the “Regular Plan” transactions in Colorado occurred on Feb. 6. Another occurred on Feb. 8, according to the filings. The senders of the funds are identified in the filings only by their initials.
The Profitable Sunrise website has been offline at least since March 14.
“Profitable Sunrise is running a massive, international scheme, based in England, which takes advantage of religious affinity to lure investors into sending them money,” Colorado Securities Commissioner Fred Joseph said. “We encourage anyone who dealt with this organization to contact the Division of Securities.”
And, Joseph said in a news release, Profitable Sunrise is an “Internet scam” and the subject of crackdowns by multiple states. (See list here.)
Colorado’s filings allege that the scheme was spread at least in part through promos placed on classified-advertising sites.
Among the exhibits investigators viewed were “Printouts of online solicitations at []denver.backpage.com.” Precisely who made the solicitations in Colorado was not revealed.
One Denver ad viewed by the PP Blog made this claim: “Changing lives together: We Believe in a Better Living Every Day. As a Non Profit Christian Community, We put our Resources to Work to Rebuild the American Dream, One Day at a Time!”
Elsewhere in the ad, this claim was made (italics added):
Our Invited Members Save for a New CAR, Pay College Tuition, or Donate to their favorite Non-Profit, Charity, or Church! Example 1: Invest $200 Returns $1356.70in 90 days, Returns: $7439.69 in 170 days Example 2: Invest $500 Returns $3391.75in 90 days, Returns: $18599.22 in 170 days Example 3: Invest $1000 Returns $6783.50in 90 days, Returns: $37198.44 in 170 days
A specific URL for a free Blogspot Blog (wealthwithchrystal.blogspot) that appeared in the Denver ad viewed by the PP Blog also appears in ads in many other American cities, including New York, Los Angeles, Chicago, Boston, Atlanta, Miami, Fort Lauderdale, Houston, Dallas, Las Vegas and many more.
Visitors were encouraged to click on a link in the ads “To see my payment Proofs!!!”
UPDATED 11:33 A.M. EDT (APRIL 1, U.S.A.) On April 1, the PP Blog published a story that informs Profitable Sunrise participants on how to contact state and provincial securities regulators in the United States and Canada.
April 1 was the date the Profitable Sunrise “Long Haul” plan was supposed to pay out. That didn’t happen.
Here, below, our March 25 post . . .
Now the subject of Investor Alerts or cease-and-desist orders in at least 30 states and provinces in the United States and Canada, the Profitable Sunrise HYIP has passed a milestone of sorts: Its website has been offline for 10+ days.
Despite the extended outage, wild, unverified reports have surfaced on Facebook and the Ponzi boards that Profitable Sunrise will resurface in Hong Kong, restarting with a 4-percent-a-day scheme.
Even if Profitable Sunrise still has control over servers — and even if it relaunches with a 4-percent-a-day scheme — history cannot be taken off the table. Part of HYIP history includes the renaming and relaunching of schemes designed to give scammers access to new cash to sustain the Ponzi deception. The “trick” has been used so many times in HYIP Ponzi Land that it has become a virtual cliché.
The AdSurfDaily Ponzi scheme appears to have operated under at least three different names, all the while positioning itself as a “Christian” enterprise. An HYIP scheme bizarrely known as Cash Tanker once was promoted on the pro-ASD “Surf’s Up” forum. Cash Tanker, which promised a Profitable Sunrise-like 2 percent a day and used an image of Jesus Christ in promos, later collapsed.
On March 6, the PP Blog observed information in a nonEnglish, international forum that strongly suggested an ASD promoter had become a key pitchman for Profitable Sunrise. The information suggested that the ASD promoter had assembled a “group” that carried a purported balance of more than $18.8 million in Profitable Sunrise.
ASD collapsed in 2008.
Because Profitable Sunrise traded on Bible verse and images of Jesus Christ and was promoted by self-identified Christians, the scheme now has caused divisiveness in the Christian community. Among the key unanswered questions: Who would benefit from such divisiveness and was Profitable Sunrise deliberately structured to turn Believers against each other?
Cheerleading for the “program” continues. On a conference call last week, a Profitable Sunrise pitchman assured listeners that “all is good” with the enterprise. The claim appears to have been based on second- and third-hand reports that morphed into a purported “consensus” among leaders/members given to confirming their own biases.
“Everyone agrees that the Easter gift from the [Profitable Sunrise] Long Haul [plan] is on,” the pitchman said. “It’ll be given on schedule.”
One speaker on the same call claimed “[w]e can do what we want,” despite government warnings and even legal proceedings to the contrary.
“[W]e’re not selling any securities and we’re free citizens,” the speaker intoned.
Separately, a claim was made on the MoneyMakerGroup Ponzi forum that the Howey Test from a famous Supreme Court case in 1946 does not apply to Profitable Sunrise because the “Howey Test is for Private Real Estate Loans.”
Like many things surrounding Profitable Sunrise, the claim about the purported inapplicability of the Howey Test is absurd. The Howey Test is a key test of what constitutes an investment contract. Profitable Sunrise itself positioned the “program” as an investment opportunity. Meanwhile, various members of the “program” — including ones who continue to support it — have written or spoken publicly about their “contracts” that purport to pay up to 2.7 percent interest a day through a plan bizarrely known as the “Long Haul.”
After he was charged criminally in 2010 for his role in the ASD Ponzi scheme, ASD President Andy Bowdoin argued that the Howey Test did not apply to ASD, a purported “advertising” company that purported to pay 1 percent a day.
Despite Bowdoin’s Howey argument, a federal judge ruled that “these alleged facts smack of an investment.”
And, the judge ruled, “Based on the allegations set forth in the Indictment, the evidence already before the Court, and the government’s proffers of expected trial evidence, the Court finds that the allegations, if proven, would be sufficient to permit a jury to find that ASD members were investing.”
Bowdoin later pleaded guilty to wire fraud. He was sentenced to 78 months in federal prison.
EDITOR’S NOTE: Thanks to PP Blog reader “Tony” for pointing us to the British Columbia Securities Commission (BCSC) warning against the Lucra Fund and Goldenarium HYIP schemes. Earlier this month, BCSC issued a warning on the Profitable Sunrise scheme.
The British Columbia Securities Commission has issued warnings on HYIP “programs” known as Lucra Fund and Goldenarium. BCSC’s move follows on the heels of its move earlier this month to issue a warning against Profitable Sunrise.
All three “programs” had a presence on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. The Zeek Rewards “program,” which the SEC in August 2012 described as a $600 million Ponzi- and pyramid scheme, also had a presence on the forums. So did many other collapsed schemes, including the $119 million AdSurfDaily Ponzi scheme, the $72 million Legisi Ponzi scheme and the alleged $70 million Pathway to Prosperity Ponzi scheme. P2P spead Ponzi misery to at least 120 countries, according to the U.S. Postal Inspection Service.
BCSC said it became aware of Lucra Fund on March 11 “after a BCSC staff member received a promotional e-mail.
“The sender of the e-mail wrote that Lucra Fund offered 5.5% daily returns, and promised a referral commission,” the agency said.
And, it noted, “[t]he Lucra Fund website stopped working soon afterwards.”
Among the talking points of Lucra Fund was that it employed “DDoS Protection By BlockDos,” according to a pitchman’s post at MoneyMakerGroup.
That appears to be the same firm that provided protection for Profitable Sunrise. The Profitable Sunrise website also has gone missing. (At the time of this post, the Profitable Sunrise website has been inaccessible for nine days.)
On March 19, BCSC said, the agency “became aware of what appears to be a BC-connected promotion of Goldenarium through Twitter. Similar to Profitable Sunrise, this high-yield investment promotion offered a minimum investment of $10 and high daily returns. It also offered a referral fee.
“The Goldenarium website no longer works, and people on numerous Facebook pages connected to the scheme are questioning whether the entity will reactivate its website,” BCSC said.
In August 2012, a pitchman on the DreamTeamMoney Ponzi forum described Goldenarium as “a company registered in England and Wales (United Kingdom) that “fulfills all the necessary requirements to provide a serious and highly reliable service to all our customers.
In order to accomplish that we not only strictly comply with both United Kingdom’s Law and International Law.”
Before its 2011 collapse, “Insectrio” used the logos of DreamTeamMoney, TalkGold and MoneyMakerGroup in sales pitches.
In August 2011, the PP Blog wrote about the collapse of a bizarre “program” known as Insectrio that advertised 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. It was enabled by the offshore processors LibertyReserve and PerfectMoney, two of the processors used by Profitable Sunrise.
LibertyReserve and Perfect Money also are referenced in the SEC’s October 2010 fraud complaint against Imperia Invest IBC, a scheme that targeted deaf investors. Imperia also had a presence on the Ponzi boards.
Insectrio used the logos of DreamTeamMoney, TalkGold and MoneyMakerGroup in promos.
In July 2010, after the collapse of the P2P and Genius Funds HYIP schemes, the Financial Industry Regulatory Authority (FINRA) issued a warning about HYIP schemes, pointing out that they trade through social media.
FINRA specifically warned about websites that “Rank the latest programs and provide details of ‘payout options.’” At the same time, it warned about sites that “Allow web designers to buy ready-made HYIP templates and set up an ‘instant’ HYIP.” Meanwhile, it warned about sites that “Blog, chat and ‘teach’ about HYIPs.”
“Some HYIP ‘investors’ proffer strategies for maximizing profits and avoiding losses — everything from videos showing how to ‘make massive profits’ in HYIPs and ‘build a winning HYIP portfolio’ to an eBook on how to ‘ride the Ponzi’ and get in and out before a scheme collapses,” FINRA said.
“Other HYIP forums discuss how to enter ‘test spends,’ how to identify new HYIPs to maximize one’s chances of being an early stage payee and even how to check when a HYIP’s domain name expires so you can guess how long it might pay returns before shutting down,” FINRA noted.
Read BCSC’s March 22 Investor Alert against Lucra Fund and Goldenarium. (The document references the earlier warning against Profitable Sunrise.)
BULLETIN: The Alberta Securities Commission (ASC) has issued a warning on the Profitable Sunrise “program.” The Canadian agency’s move followed on the heels of reports from First Calgary Financial that “several of its Calgary customers have attempted to withdraw significant amounts of funds from their accounts for wire transfers to the Czech Republic,” ASC said.
“Albertans should be aware that Profitable Sunrise and its agents are not registered to sell securities in Alberta,” the agency said.
ASC is Alberta’s securities regulator. The agency noted that the Securities Division of the North Carolina Secretary of State issued a cease-and-desist order to Profitable Sunrise last month, amid allegations that the “program” was selling unregistered securities.
“It’s important for investors to know that there is no such thing as a high return, no risk investment,” said Bill Rice , chair and CEO of the ASC. “If you are persuaded to send money overseas, it may be difficult, if not impossible to get it back if something goes wrong.”
First Calgary is Canada’s ninth-largest credit union. A First Calgary executive said the company contacted ASC after observing unusual transactions.
“Our front-line employees are trained to identify suspicious transactions by members so that we may be able to stop them from becoming the possible victims of an investment scam,” said Debbie Pratt, vice president of retail banking for First Calgary Financial. “In this case, we noticed a trend and a quick call to the ASC allowed us to alert our members.”
Profitable Sunrise lists a business address in the United Kingdom. Regardless, the enterprise is soliciting funds to be sent to Raiffeisenbank AS in the Czech Republic, according to North Carolina investigators. An entity known as Melland Company SRO was listed in Profitable Sunrise wiring instructions as the beneficiary, according to the North Carolina order.
A credit union used by a North Carolina-based Profitable Sunrise investor blocked at least one transaction directed toward the Czech bank, citing suspicions of fraud, according to the order.
Among other claims, Profitable Sunrise purported to offer a “Long Haul” plan that paid 2.7 percent a week with an Easter payout. The Profitable Sunrise “program” is being pitched on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup.
Zeek Rewards, which the SEC in August 2012 called a $600 million Ponzi- and pyramid scheme, was promoted in part from the same forums. Some individuals have promoted both Zeek and Profitable Sunrise.
