UPDATED 6:36 P.M. EDT (U.S.A.) To hear some folks in HYIP Ponzi Land tell it, “opportunities” can avoid the long arm of the law by preemptively prohibiting affiliates from using certain words — “investment” and “security,” for two examples. Regardless, court records show that hucksters who played linguistic games to mask their fraud schemes confronted investigators who neatly exposed their wink-nod wordplay.
The following is from a transcript of a May 2007 U.S. Secret Service recording in which undercover agents posing as prospects were talking to Gregory McKnight of Legisi inside Legisi’s office in Michigan. McKnight and Legisi later were implicated in a $72 million Ponzi scheme that in part was promoted on the MoneyMakerGroup forum:
McKnight: ” . . . it is not an investment.”
Agent 1: “Okay.”
McKnight: “I hope you have any idea — if you have any inkling of an idea that it is an investment, then you should really . . .”
Agent 1: “I’m sorry.”
McKnight: “This is a loan to my corporation.”
Agent 1: “Okay.”
“Agent 2: “What’s the difference?”
McKnight: “The difference is — if I am selling investments and I am not registered with the SEC, I am going to prison.”
Agent 2: “Oh.”
Outcome: McKnight, adjudicated liable civilly in a case brought by the SEC and ordered to pay millions of dollars in restitution and penalties, is scheduled to be sentenced on a criminal charge of wire fraud on Sept. 11. The U.S. Secret Service brought the criminal case.
The following is from Paragraph 43 of the August 2008 complaint for forfeiture that targeted tens of millions of dollars in bank accounts tied to the AdSurfDaily Ponzi scheme, which gathered at least $110 million. ASD also was promoted on the Ponzi boards (italics added):
“The [undercover agent] asked her about investing with ASD. She immediately said, ‘Don’t call it investing, you know what I mean, we can get in trouble if we say that, we have to be careful.”
Outcome: A federal judge ordered the civil forfeiture of more than $80 million, including the forfeiture of more than $65.8 million in ASD President Andy Bowdoin’s personal bank accounts and more than $14 million in bank accounts linked to Golden Panda Ad Builder, another autosurf. The U.S. Secret Service brought the civil case.
The following is from the November 2010 criminal indictment against Bowdoin. The prosecution quoted from an email from Bowdoin in which the ASD patriarch himself laid out the wink-nod nature of the 1-percent-a-day ASD program and explained his bid to skirt securities laws by coming up with naming conventions to keep the government at bay (italics added):
“[L]et’s don’t (sic) use the words investment and returns. Instead, lets (sic) use ad sales and surfing commissions. The Attorney Generals in the U.S. don’t like for us to use these words in our program.”
Outcome: Bowdoin, currently jailed amid allegations he pushed other fraud schemes after the seizure and after his arrest and posting of bond, is scheduled to be sentenced on a criminal charge of wire fraud on Aug. 29. The criminal charge was brought after an investigation by the U.S. Secret Service.
And what about AdViewGlobal (AVG), the alleged 1-percent-a-day knockoff of ASD that prosecutors now say they’ve linked to Bowdoin? From the PP Blog’s April 27, 2009, report about the AVG forum warning members not to call AVG an investment program (italics added):
A Mod at an AdViewGlobal forum set up by Mods and members of AdSurfDaily has warned AVG members not to refer to their purchases as “investments.”
Rather, the Mod said, AVG members purchase “advertising” and are not “investing” or “investors.”
Posts that used the terminology of investments would be deleted, the Mod warned.
AVG members currently are stressing a so-called “80-20? strategy as a means of keeping the program viable for the long-term.
Analysts, however, point out that the “80-20? plans — taking out 20 percent in cash and letting 80 percent ride with the companies — are just another way to keep cash within ready reach of autosurf Ponzi schemes to sustain the deception.
There is not a single, documented case in the history of autosurf prosecutions in which the use of the word “advertising” to describe what the government views as an “investment” program involving the sale of unregistered securities has succeeded as a means of fending off a prosecution.
In other words, the government has made it plain that you can’t avoid prosecution by using other terminology to describe an investment program.
Regardless, many surf companies continue to insist that the use of the word “advertising” as a replacment for “investing” somehow insulates surfs from prosecution.
Outcome: Unknown. The AVG forum mysteriously disappeared, as did AVG itself. In April 2012, federal prosecutors announced in court filings that they’d linked Bowdoin to AVG.
Virtually all of the material quoted above has been a matter of record for at least three years. In the case of Legisi, it has been a matter of record for more than four years.
Wordplay, though, still is in play among “programs” that purport to pay members outsized percentages that correspond to annualized returns in the hundreds of percent per year. In the past 24 hours on the MoneyMakerGroup forum, for example, these posts (below) appeared in the context of the Zeek Rewards “program.” The first post used the word “investment.” Perhaps ignorant of history (or maybe not), the poster quickly followed up in the second post by saying the use of “investment” was a mistake and that what really was meant was that he or she had purchased “Bids.”
It was hard not to hear the echoes of ASD and AVG members doing largely the same thing summers ago, sometimes after being scolded by the purported forum masters.
“It’s gonna blow up; it’s gonna be an ugly blow-up. It’ll probably happen sooner, not later. And it will leave a trail of devastation behind it. And I urge you to not even consider them.” — Comment on Zeek Rewards by Randy Schroeder, president of North America and Europe for Mona Vie, July 16, 2012
Randy Schroeder
UPDATED 7:10 P.M. EDT (U.S.A.) Randy Schroeder, the president of Mona Vie for North America and Europe, has done what few major figures in multilevel marketing have been willing to do: comment about the menace posed by the Zeek Rewards MLM program.
It was a most unexpected and welcome development, something that speaks well of both Schroeder and Mona Vie. But some Zeek apologists immediately (and predictably) accused Schroeder of meddling in North Carolina-based Zeek’s affairs and defaming the company, which suddenly announced on Memorial Day evening (May 28) that it was closing accounts at two U.S. banks and mysteriously claimed that affiliates had to cash or deposit checks drawn on the banks before June 1 or they would bounce.
Just 22 days earlier — on May 6 — Ponzi-forum huckster “DRdave,” also known as “Ken Russo,” claimed on the TalkGold Ponzi forum that he’d received $34,735 from Zeek since Nov. 14, 2011. The Zeek money, according to the post, was delivered largely if not wholly by AlertPay and SolidTrustPay. Both companies are offshore payment-processing firms linked to fraud scheme after fraud scheme promoted online.
Hucksters such as “Ken Russo” and myriad others use “I Got Paid” posts on the Ponzi forums as a means of creating the appearance a scheme is legitimate. Included in “Ken Russo’s” signature at TalkGold today is a link to a “program” known as “NewGNI,” which purports to pay “up to 6% weekly.”
"Ken Russo," as "DRdave," brags on the TalkGold Ponzi forum about a purported Zeek payout of $2,164.80 from Rex Venture Group LLC while pitching an emerging HYIP known as "NewGNI."
GNI may be a knockoff scam to the collapsed Gold Nugget Invest HYIP Ponzi, which also used the acronym GNI while purporting to pay a Zeek-like 7.5 percent a week. The government of Belize issued a warning about GNI in November 2009. In December 2009 — after the GNI warning by Belize — the “program” nevertheless was pitched (with three others HYIPs) by a member of the “Surf’s Up” forum, which existed to shill for accused AdSurfDaily Ponzi schemer Andy Bowdoin.
Any number of Zeek affiliates, including individuals Zeek has described as “empoyees,” hail from the ranks of ASD’s $110 million Ponzi scheme and various other interconnected fraud schemes. Some Zeek affiliates, for example, also are promoting JSSTripler/JustBeenPaid, which purports to pay 2 percent a day and may have ties to the “sovereign citizens” movement.
Zeek promoters also have been associated with a “program” known as OneX, which U.S. federal prosecutors described in April as a “fraudulent scheme” and pyramid cycling money in ASD-like fashion.
In addition to pushing Zeek, ASD, the NewGNI knockoff and a JSS/JBP knockoff known as JSS Tripler 2 that hatched a companion fraud scheme known as Compound150, “Ken Russo” pushed Club Asteria, which purported to provide a Zeek-like payout of between 3 percent and 8 percent a week before promoters came under the lens of CONSOB, the Italian securities regulator.
Amid these ruinous circumstances that are creating monumentally bizarre PR and legal disasters for the MLM trade, what did certain purported MLM experts do?
Why, boo Mona Vie’s Schroeder, of course — for the apparent high crime of trying to protect his own company and affiliates from these interconnected, international cancers.
Here is hoping that other influential MLM executives and trade groups follow Schroeder’s lead, including the Association of Network Marketing Professionals. Its name is being used to sanitize the Zeek scheme — and if it continues to permit that to happen, it risks a future in the dust bin of irrelevance.
While we’re speaking of hope, here’s hoping that Mona Vie will not shy away from Schroeder’s Zeek comments and actually will join him in the remarks, which he says were made as a concerned individual, not as a Mona Vie executive. Mona Vie should back Schroeder to the hilt.
A ‘Messy Fact’
It’s a “messy fact that periodically a company comes along and sweeps people along into a trail that turns into a trail of devastation,” Schroeder said about Zeek Rewards during a July 16 conference call with Mona Vie distributors.
Schroeder, of course, was alluding to Zeek’s AdSurfDaily-like business model that solicits participants to shell out sums up to $10,000, offers a dubious “product” (or a “product” that is just lipstick on a pig), plants the seed that spectacular returns on the order of 500 percent a year are possible and insists participants who buy into the scheme are neither making an investment nor purchasing a security.
“My own opinion is that that company will come to grief, that it will come to grief in the relatively near future, not farther future,” Schroeder said of Zeek.
If history is any guide — and Schroeder, with considerable justification, suggests that it is — Zeek will encounter a regulatory action that will cause it to crater.
But those words and others — including the use by Schroeder of “pyramid” and “Ponzi” in the context of Zeek — did not sit well with MLM Blogger Troy Dooly. (See PP Blog June 10 editorial.)
Dooly Takes Schroeder To The Woodshed
Dooly wrote Thursday that he “started getting the links and downloads of Randy Schroeder’s call” on July 18, took some time to digest the call and to shoot off a text message to MonaVie founder Dallin Larsen about Dooly’s “concerns” about Schroeder’s remarks.
And then Dooly ventured that Rex Venture Group LLC, the purported parent company of Zeek, just might sue Schroeder and perhaps MonaVie itself. Dooly wrote (italics added):
As the leader of a billion dollar multi-national health and nutrition company in the network marketing community, Schroeder should be very careful what he has to say about any other company. Although he made it clear he was not speaking on behalf of MonaVie, as an officer of the company, he places the company and their distributors in jeopardy if Rex Venture Group LLC were to file some form of civil action.
Good grief. The world is facing the greatest white-collar fraud epidemic in history, much of the money is routed through murky businesses and shell companies with accounts at offshore payment processors such as AlertPay and SolidTrustPay and banks that are asleep at the switch because staying awake is bad for fee revenues, many of the corrupt “programs” use MLM or an MLM-like component — and Troy Dooly, apparently with a straight face, is telling Randy Schroeder that he’d better tread lightly on Paul Burks because Zeek just might sue.
In the same column in which he bizarrely took Schroeder to the woodshed for holding a view about Zeek that is wholly responsible and serves the best interest of the MLM community moving forward, Dooly equally bizarrely extended an olive branch to the subject of his fresh scorn. Indeed, Dooly suggested a bunch of legal messiness could be avoided if Schroeder and Dallin Larsen saddled up Mona Vie’s corporate jet and deposited themselves in North Carolina at Zeek’s next Red Carpet event.
While ensconced in North Carolina as Dooly’s guest, they could hear Zeek boss Paul Burks deliver the good word about the company and could get some extra education from the Zeek “team.”
Dooly wrote (italics added):
I challenge Randy and Dallin to take the corporate jet and travel to N.C. next week as my guests to the Red Carpet Day event. I will introduce you to Paul Burks, and his team and let you better understand their drive and mission for the company.
Dooly did not say whether Burks and Zeek would make their Ponzi-board team available to educate the Mona Vie executives on Zeek’s drive and mission. Nor did he say whether Zeek would make “Ken Russo” available to explain the differences between Zeek and, say, NewGNI or Club Asteria or JSS Tripler 2.
We sincerely hope Schroeder and Larsen decline Dooly’s offer to parachute into North Carolina to break bread with the Zeek pope and the “team.”
Dooly is engaging in pandering of the worst sort. It’s also caustically amateur PR because it raises the specter that an aggrieved Zeek might use legal muscle to silence Schroeder, who, like Larsen, is a prominent figure in MLM circles. Zeek’s Stepfordian cheerleaders will love it, of course, because it gives them a new supply of red meat and raises the prospect that, if Schroeder speaks his mind against Zeek and gets sued, the Bloggers and critics may be next.
History An Appropriate Guide
Intimidation campaigns did not work for AdSurfDaily; they will not work for Zeek, either directly or through proxies. Beyond that, Schroeder has the weight of history on his side: the notoriousness of the ASD Ponzi case, Andy Bowdoin’s guilty plea in that case and the guilty plea of Gregory McKnight in the Legisi HYIP Ponzi case. Of course, Schroeder also could point that accused Pathway To Prosperity HYIP operator Nicholas Smirnow is listed as an international fugitive wanted by INTERPOL. And Schroeder also could point out that Robert Hodgins, an accused international money-launderer for narcotics-traffickers, also has been linked to the HYIP “industry” and also is wanted by INTERPOL.
Just days ago, a federal grand jury returned a 49-count indictment against alleged HYIP purveyor Terrance Osberger, 48, of Genoa, Ohio. In March, a top U.S. Department of Justice official speaking in Mexico City commented on some of the challenges law enforcement is facing in the Internet Age, including bogus libel lawsuits filed to silence critics and protect ventures that engage in organized crime. In May, a top INTERPOL official speaking in Israel said the cost of cybercrime was approaching $1 trillion a year in Europe and that U.S. banks lost $12 billion to cybercrime last year.
Regardless, we have to concede that Zeek/Rex Venture might be stupid enough to try to score points by suing Schroeder and MonaVie. Back in 2008, then-closeted Ponzi schemer Andy Bowdoin of ASD planted the seed that he might just sue “MLM Watchdog” Rod Cook for $40 million. Bowdoin even announced that he’d filled a pot with $750,000 and was going to use it to start suing critics of his 1-percent-a-day “program” back to the Stone Age.
Cook, who is a board member of ANMP and holds the title of chairman emeritus, didn’t blink.
When the Feds noticed the lawsuit threats, they thought them important enough to bring to the attention of a federal judge. They simply called it “GOVERNMENT EXHIBIT 5.”
On Aug. 5, 2008, the U.S. Secret Service raided ASD. What occurred after that from the ASD side left an indelible stain on MLM. Bowdoin compared federal prosecutors and the Secret Service, the agency that guards the life of the President of the United States and has the companion duty of protecting the U.S. financial system from attack, to “Satan.” He further compared the raid to the 9/11 terrorist attacks.
Over time, the ASD case turned into a symphony of the bizarre. “Sovereign citizens” entered the fray. One of them accused a federal judge of “TREASON.” Another allegedly filed bogus liens against five public officials involved in the ASD case, including a federal judge, three federal prosecutors and a special agent of the U.S. Secret Service who led the Ponzi investigation.
These episodes were to the utter humiliation of MLMers who value the reputation of the trade. The ruinous PR fallout continues even to this day.
What did Zeek do? Why, it wrapped what effectively is ASD’s 1-percent-a-day compensation model into its payout plan, thus raising the stench of ASD all over again and adding to the stench by effectively paying out an affiliate-reported average of about 1.4 percent a day. Zeek promptly found favor on the Ponzi boards and benefited from promoters of fraud schemes such as ASD and JSS Tripler/JustBeenPaid (730 percent a year). It also picked up some hucksters from OneX, a “program” in part responsible for the fact ASD’s Bowdoin is now jailed in the District of Columbia.
There can be no doubt that Zeek also attracted promoters of AdViewGlobal (AVG) into its fold. The Feds now have linked Bowdoin to AVG, a 1-percent-a-day “program” that collapsed in 2009 under circumstances both mysterious and bizarre. Before AVG went missing, its braintrust tried to plant the extortive seed that lawyers were going after the critics and that “program” members themselves were at risk of getting sued for sharing negative information. For good measure, AdViewGlobal tried to plant the extortive seed that it would report its own members to their Internet Service Providers if they continued to question the “program” in public.
‘MoneyMakingBrain’ Reemerges In Bid To Chill Critics
Today on the RealScam.com antiscam forum, a notorious cyberstalker and JSSTripler/JustBeenPaid apologist known as “MoneyMakingBrain” is planting the seed that JSS/JBP is going to use its lawyers to come after critics. “MoneyMakingBrain” previously claimed he’d defend Frederick Mann, JSS/JBP’s purported operator, “so help me God.” And then “MoneyMakingBrain” started attacking Lynn Edgington, the chairman of Eagle Research Associates, a California nonprofit entity that works proactively with U.S. law enforcement to educate the public about online financial fraud. Edgington is a longtime contributor to the PP Blog and, like the PP Blog, is a member of RealScam.com, a site that concerns itself with international mass-marketing fraud.
(IMPORTANT NOTE: The PP Blog is providing a link to the RealScam.com thread in which “MoneyMakingBrain” has (for months) been engaging in efforts to intimidate JSS/JBP critics. MoneyMakingBrain has a history of emailing threatening communications to the PP Blog. Among other things, he purports to have an ability to track IP addresses and to be keeping a “dossier” on critics. If these things are true, it could mean that “MoneyMakingBrain” will seek to target you in harassment and intimidation campaigns. [** Caution duly advised. RealScam link. Caution duly advised **])
The PP Blog commends Randy Schroeder for his remarks about Zeek. It encourages Mona Vie to back him. Zeek is awash in the stench of ASD, AVG, JSS/JBP, OneX and the serial scammers who populate the Ponzi boards.
Such “programs” put economic security at risk and thus national security.
Period.
Stories Wouldn’t Sell As Fiction
Thank your lucky stars that Zeek’s apologists and Stepfordians are not the fire department. If they were, they wouldn’t be fighting fires. Instead, they’d be standing in the parking lot, deducing the red glow under the roof of the building to which they’d been dispatched was an optical illusion and that the man on the roof with the gas can wasn’t really there. All the acrid, billowing smoke would be ignored in favor of a theory that smoke doesn’t always mean flame.
“No need to bring out the hoses,” they’d say. “This is nothing.”
And when the cops showed up and observed firefighters standing around watching a blaze and ignoring their duty to put it out, they’d be told to mind their own damned business or get busy hiring a lawyer to defend against a defamation lawsuit.
It wouldn’t sell as fiction — and yet somehow passes the plausibility test with thousands or even hundreds of thousands of individuals who call themselves MLMers.
Bravo to Randy Schroeder for advising the members of his trade to open their eyes and choose to see.
Screen shot: I-Payout website showing logos of "Global Strategic Partners." In April, federal prosecutors described a murky enterprise known as "OneX" as a "fraudulent scheme" and "pyramid" that was recycling money to members in a fashion similar to the AdSurfDaily Ponzi scheme. Now jailed, ASD President Andy Bowdoin was a OneX pitchman, saying he intended to use his "earnings" from the "program" to pay for his criminal defense in the ASD Ponzi case. Like ASD, OneX conducted business with SolidTrustPay, an offshore payment processor linked to one HYIP fraud scheme after another. Mysterious OneX pitchman "J.C." now says the "program" is turning to I-Payout.
Back in April, federal prosecutors described the purported OneX “program” as a “fraudulent scheme” and “pyramid” pushed by former AdSurfDaily President Andy Bowdoin, the author of the $110 million ASD Ponzi scheme.
Bowdoin, 77, now is jailed in the District of Columbia — in part because of his OneX pitches. He’d initially been free of bond while awaiting his criminal trial in September 2012 on charges of wire fraud, securities fraud and selling unregistered securities in the ASD Ponzi case. Bowdoin was arrested by the U.S. Secret Service in December 2010.
The ASD patriarch pleaded guilty in May to wire fraud in the ASD Ponzi case, acknowledging that ASD was a Ponzi scheme and never operated lawfully from its 2006 inception. Bowdoin remained free after his guilty plea. But a federal judge ordered him jailed in June — pending an August 2012 sentencing date — after prosecutors linked Bowdoin both to OneX and a scam known as AdViewGlobal.
Bowdoin, according to prosecutors, chose to continue to commit crimes — even after the August 2008 seizure by the U.S. Secret Service of $65.8 million in his 10 personal bank accounts at Bank of America and even after he was arrested on Ponzi charges. In October 2011, Bowdoin told OneX conference-call listeners that they could make $99,000 very quickly and that he intended to use his profits from OneX to pay for his criminal defense in his ASD-related Ponzi scheme trial.
College students were excellent prospects for OneX, Bowdoin ventured.
Much remains murky about OneX, including the identity of its purported operator and precisely where the company operates from. A male referred to as “J.C.” presides over OneX conference calls, which occasionally continue to be held despite prosecutors’ assertions against the firm in April. “J.C.” has described himself as a “consultant,” even though he apparently is empowered to make financial decisions for the murky enterprise.
OneX has announced it no longer is using SolidTustPay, the Canadian payment processor linked to one HYIP fraud scheme after another.
But “J.C.” announced during a OneX conference call this week that the “program” was switching to I-Payout, according to a source.
Part of the presentation by “J.C.” in the conference call included the presentation of a screen shot that showed I-Payout’s name in the back offices of OneX members who’d been wondering if and when the company would find a substitute for SolidTrustPay, according to a source.
It is unclear if OneX has an actual account at I-Payout. What is clear is that it is encouraging members to register for I-Payout accounts, only three months after prosecutors described OneX as a scam that was recycling money to members in ASD-like fashion.
Among the clients I-Payout touts on its website is TextCashNetwork. (See Feb. 14, 2012, PP Blog story on TextCashNetwork.)
I-Payout’s website publishes the logos of HSBC, Deutsche Bank, Bank of America, Barclays and other “Global Strategic Partners.”
Bloomberg/Businessweek is reporting this morning that HSBC and Deutsche Bank employees are under investigation for alleged manipulation of the LIBOR interest rate in a growing scandal that also involves Barclays and other major financial institutions.
BULLETIN: The operator of an alleged HYIP fraud known as Eagle Trades LTD has been indicted on 49 Ponzi-related charges of wire fraud and money-laundering after a probe by the IRS, federal prosecutors in the Northern District of Ohio said.
Terrance Osberger, 48, of Genoa, Ohio, has been charged with one count of wire fraud and 48 counts of money-laundering, the office of U.S. Attorney Steven M. Dettelbach said.
Records show that the “program,” which allegedly offered returns in the hundreds of percent over 190 days, was promoted in 2009 on the TalkGold and MoneyMakerGroup forums. Separately, records show that state securities regulators in Massachusetts filed civil charges against Eagle Trades in 2011, alleging that two investors in the state were instructed by Osberger to send “their joint $103,000 investment through SolidTrustPay.”
SolidTrustPay is a Canadian payment processor favored by HYIP scammers.
The money sent through SolidTrustPay appears to have made its way into an Eagle Trades’ bank account in Ohio “over the course of several successive days,” according to the Massachusetts filing. But due to the “high volume of transactions and the intermingling of funds” in the account, Massachusetts investigators said they were “unable to definitely determine the ultimate destination of the $103,000 investment.”
Another Massachusetts investor was instructed by Osberger to wire $50,500 to a Cyprus entity known as F.B.M.E. Bank Ltd. That transaction proved to be difficult to reverse-engineer because of international red tape, according to the Massachusetts complaint.
The Massachusetts filings speak to the recovery difficulties investors may encounter when doing business with murky enterprises that may have one or more offshore arms, the ability to send and receive money via offshore payment processors and a corresponding ability to dump the money into domestic or international bank accounts — before moving it again.
Eagle Trades, according to an evidence exhibit prepared by Massachusetts investigators, told investors that they “will quickly notice that we have reengineered the mold regarding High Yield Investment Programs [HYIPs], making it easier than ever for you to be more informed regarding your investment options and earn a realistic, yet sustainable investment return.”
Current HYIPs such as JSS Tripler/JustBeenPaid are making similar claims about purported sustainability and reengineered platforms while also luring prospects by advertising returns that correspond to annualized returns in the hundreds of percent — and all while using SolidTrustPay and other offshore processors.
JSS/JBP purportedly is operated by Frederick Mann, a former pitchman for the AdSurfDaily Ponzi scheme, which also had a presence on the Ponzi boards, also used SolidTrustPay and also planted the seed that annualized returns in the hundreds of percent were possible.
ASD President Andy Bowdoin, 77, is jailed in the District of Columbia. He pleaded guilty to wire fraud in May and acknowledged ASD was a Ponzi scheme that never operated legally from its 2006 inception.
Over time, Eagle Trades told Massachusetts investors waiting for their payouts that it had been targeted in a”massive, seven-figure fraud” and provided a series of excuses about why investors were not getting paid. But federal prosecutors in Ohio now say Osberger was using Eagles Trades to defraud customers.
He potentially faces decades in prison.
“Osberger misused investor funds for his own personal use,” federal prosecutors said. “In other cases, he misused investor proceeds to repay earlier investors in what is commonly known as a Ponzi scheme, according to the indictment.”
And, federal prosecutors said, “Osberger listed Eagle as a subsidiary of Falcon Financial Group Limited, with addresses in Belize and the Commonwealth of Dominica and utilitzed Aurum Capital Holdings, which maintained several offshore bank accounts during the scheme, according to the indictment.
From "Exhibit 1" in the state-level case against the Eagle Trades HYIP in Massachusetts.
Screenshot: Part of a promo for Zeek translated from Portuguese to English by Google Translate
UPDATED 1:59 P.M. EDT (U.S.A.) An article on Google News by an apparent Portuguese-speaking affiliate of the U.S.-based Zeek Rewards MLM “program” that is married to a penny-auction site known as Zeekler claims that Zeek has more than 100,000 members in Brazil alone.
Meanwhile, a promo by an American affiliate dated July 7 on YouTube describes Zeek as an investment program — before the affiliate backtracks and says Zeek is not an investment program. The YouTube development first was reported by BehindMLM.com. (Link at bottom of story.)
Portuguese is the official language of Brazil, the largest country in South America. The claim of 100,000 Brazilian members could not immediately be confirmed, and no breakdown of the specific Zeek membership ranks Brazilian members had chosen was provided in the article. Zeek categorizes members as “Free,” “Silver” ($10 a month), “Gold” ($50 a month) and “Diamond” ($99 a month).
In addition to selecting a membership rank within the Zeek MLM organization, affiliates can opt to send the company up to $10,000 as a means of gaining a daily share of what is known as the Retail Points Pool (RPP). Those shares later can be converted to cash payouts that correspond to an annualized return in the hundreds of percent. The RPP program has led to questions about whether Zeek is selling unregistered securities as investment contracts and using linguistic sleight-of-hand in a bid to avoid regulatory scrutiny.
Zeek, purportedly part of Rex Venture Group LLC, is based in North Carolina. On June 20, the office of North Carolina Attorney General Roy Cooper said it had concerns about the company, which plants the seed that members can earn a return of between 1 percent and 2 percent a day but denies it is offering an investment program. Zeek’s business model resembles that of AdSurfDaily, which the U.S. Secret Service said in 2008 was a massive, online Ponzi scheme that was offering securities and disguising itself as an “advertising” program.
Andy Bowdoin's booking photo in the District of Columbia.
ASD President Andy Bowdoin is now jailed in the District of Columbia after pleading guilty to wire fraud in the ASD Ponzi case in May 2012. ASD’s purported payout of 1 percent a day was on par with Zeek’s purported daily payout. Because it is known that some affiliates of the ASD Ponzi scheme also are promoting Zeek and because Zeek has highlighted some of those ASD promoters on its website, questions have been raised about whether a core group of MLMers who move individually or as part of “teams” from one investment scheme to another is engaging in willful blindness by promoting Zeek, which is similar to ASD in key respects.
And because the U.S. government returned millions of dollars to ASD victims last year in the form of remissions payments that came from funds seized in the ASD Ponzi case, questions have been raised about whether Zeek’s growth has been fueled at least in part by the funds originally seized in the ASD case. The government is believed to have returned about $59 million to former ASD members.
Although Zeek says it is not offering a return on investment and instead is offering revenue-sharing program, the resultant payouts correspond to figures typically associated with HYIP Ponzi investment schemes. Like Zeek, ASD also claimed to be a revenue-sharing program.
The English version of the Portuguese article for Zeek, according to Google Translate, includes this line: “The easiest way to earn money is by posting at least one ad per day to earn a daily rebate.” (Emphasis added by PP Blog.)
ASD also called its payouts to members “rebates.” The affiliate article for Zeek in Portuguese includes this phrase: “uma bonificação diária.” The phrase, according to Google Translate, means “a daily subsidy” or “a daily rebate.”
In the ASD case, federal prosecutors said use of the word “rebate” was a means of masking the investment element of the ASD “program.”
Zeek also may have a presence in Portugal itself, according to text below a YouTube video (www.youtube.com/watch?v=w07uP5XF39w) in which former ASD pitchman Todd Disner appears. Disner speaks in English in the video, but others appear to be speaking Portuguese and a link below the video points to a website styled in part as zeekportugal.com. Other text at the YouTube site points to a YouTube site styled “parttimezeekrewards’s channel.”
Disner and former ASD member Dwight Owen Schweitzer sued the United States in November 2011, claiming that ASD was a legitimate business and that government undercover agents who joined ASD had a duty to identify themselves to ASD management. Schweitzer also is promoting Zeek, according to an online promo on a classified-ad site.
ASD’s Andy Bowdoin’s guilty plea and acknowledgement ASD was a Ponzi scheme were recorded in May 2012, about six months after Disner and Schweitzer sued the government. Both men are seeking to press forward with the lawsuit, despite Bowdoin’s guilty plea to wire fraud and Ponzi concession. The duo claims the seizure of information from ASD’s database by the government was unconstitutional under the 4th Amendment. A federal judge in Florida is expected to rule soon on whether the Disner/Schweizer claims can proceed.
Virality And Customer-Service Concerns
The article on Google News that claims that Zeek has 100,000 members in the Portuguese-speaking country of Brazil may speak to the virality of the “program” on the Internet. At the same time, it may explain — at least in part — why Zeek’s customer-support systems appear to be severely taxed if not broken, with Zeek instructing its members to go to their uplines for support. Requests for help through Zeek itself have backed up for weeks or even months. Some English-speaking members of Zeek have complained their support tickets were ignored or closed without explanation.
Having thousands or even tens of thousands of affiliates in countries whose citizens may not be fully conversant in English leads to questions about whether Zeek has both the resources and the infrastructure to support a global membership base, even as some Zeek members who may not speak English are sending the company one-time sums of up to $10,000 and monthly fees on top of that. It also leads to questions about whether Zeek can police its own global network of affiliates, whether Zeek has the capacity to adequately monitor claims about the “program” in languages other than English and whether Zeek can determine whether its U.S. domestic and international affiliates are operating in “teams” to engage in downline “stacking” designed to concentrate earnings in favored familial or local pools.
Like ASD, Zeek has instructed members not to describe the “opportunity” as an investment program. But BehindMLM reported yesterday that a Zeek member on YouTube was doing just that before catching himself and going into backtrack mode. From BehindMLM.com, quoting from a Zeek affiliate’s July 7 YouTube promo (italics added):
[8:58] Do it, I did it! Do it and you’ll see how quickly you can recoup your investm..recoup your investment-ahh, I’m sorry, it’s not an investment – your original purchasing of bids.
BULLETIN: Frederick Mann, the purported operator of the JSS Tripler/JustBeenPaid HYIP “program,” has acknowledged once again — this time by implication — that JSS/JBP pays members from funds received from new members. And Mann, who said the “program” had about a million members and acknowledged that nonmembers could not make purchases, has gone a step farther, saying that all payouts to members came from the funds of other members.
During the June 28 JSS/JBP call, however, Mann again returned to the claim that members were getting paid by other members.
“I was just curious about . . . those million members,” a caller on the June 28 JSS/JBP conference call asked Mann. “So, those payments coming in from the million members right now are just being redistributed to . . . the group of the million members. None of the money is coming into the program from other nonmembers and none of the money is going out of the program to other companies? It’s just circulating in the program. Is that right?”
Mann replied, “That’s essentially right, yes.”
Paying “old” members with funds from “new” members is the central element of a Ponzi scheme.
But Ponzi schemes often also exist within systems in which a “program” effectively pools the funds of all members and then makes disbursements from the common pool to members who qualify for disbursements. Prosecutors and regulators may describe such an “opportunity” as a money-cycling scheme. Such schemes typically feature either the “classic” Ponzi stucture (money flow from “new” to “old” members) or a structure that is less-than-classic but still is a Ponzi (money from “all” to “all” members) — with the money coming from common contributors of an enterprise that has no meaningful income streams (or, indeed, no income streams at all) beyond what members contribute.
AdSurfDaily, which became engulfed in Ponzi litigation in 2008 that led to a plea of guilty to wire fraud in May 2012 by ASD President Andy Bowdoin, had elements of both “new to old” and “all to all.” ASD had income streams external to the Ponzi, but they were insignificant. Court records show that ASD had no underlying, profitable business to sustain its advertised payout rate of 1 percent a day. Like JSS/JBP, ASD operated a closed system — and JSS/JBP purports to pay a daily return double that of ASD’s while also advertising an ASD-like commission structure.
JSS/JBP announced on its website last week that it had hired a law firm in Utah.
That announcement followed on the heels of a statement by Mann last month that JSS/JBP members perhaps should avoid words such as “compound” when presenting the “program.” Despite Mann’s suggestion, JSS/JBP features a video on its website that — within the first 11 seconds — advertises, “Daily Compounding to give yourself an Automatic Pay Raise!”
Internal inconsistencies are one of the hallmarks of HYIP fraud schemes.
UPDATED 11:22 A.M. EDT (JUNE 13, U.S.A.) Images of a man described as “Alan Chapman” appear in online promos for both the JSS Tripler/JustBeenPaid and Zeek Rewards “programs” that plant the seed that enormous daily returns on the order of 1 percent to 2 percent are possible.
In one Blog pitch for JSS/JBP dated Oct. 6, 2011, “Chapman” is quoted as saying, “I have been with JustBeenPaid! since it launched in early 2010, which proved to be very successful. But now in these last 4 short months JSS-Tripler has proven to be my best income earner compared to all the other programs I have joined in the previous 4 years!”
The ad includes a photo of “Chapman.”
Meanwhile, in a Blog pitch for Zeek in a publication titled “ZeekRewardsPays,” “Chapman” is quoted as saying Zeek members can post their “ads” on the ZeekRewardsPays site “to qualify [for] your [Zeek] earnings for that day!”
The Zeek pitch also includes a photo of “Chapman.”
Zeek members who want to share in the firm’s purported revenue pool are required to post an ad online to qualify for a payout. The ad-posting requirement may be a bid to undermine the “Howey Test,” which determines what constitutes a security/investment contract.
One of the questions posed by the Howey Test is whether profits can be derived from an opportunity solely from the efforts of the purveyors. By insisting that Zeek members cannot get paid unless they post an ad, Zeek may be setting the stage to argue that Zeek’s ad-posting requirement constitutes “work” by affiliates and therefore the payouts do not derive solely from Zeek’s efforts.
Both Zeek and JSS/JBP use offshore payment processors such as AlertPay (now Payza) and SolidTrustPay that are friendly to fraud schemes promoted on known Ponzi-scheme forums such as TalkGold and MoneyMakerGroup. Both Zeek and JSS/JBP have promoters in common, and both “programs” are being promoted on the Ponzi boards.
Because Zeek and JSS/JBP have common promoters and a presence on Intenet cesspits, questions have been raised about whether the “programs” and their banks and payment-processing vendors have come into possession of funds tainted by fraud schemes.
On the ZeekRewardsPays site with the photo of “Chapman, the following claim is made today:
ZeekRewards Daily Profit Last 7 Days!
June 11 2012 1.89 %
JUNE 10 2012 0.88 %
JUNE 09 2012 0.96 %
JUNE 08 2012 0.92 %
JUNE 07 2012 1.91 %
JUNE 06 2012 2.00 %
JUNE 05 2012 1.93 %
In recent days, Frederick Mann, the purported operator of JSS/JBP, has raised the prospect that JSS/JBP members could be on their own if law-enforcement agencies take action against the “program.”
JSS/JBP also has banned discussion about customer-service issues on its weekly conference call. That announcement was made during the June 7 call, a week after a woman identified as “Ping” begged Mann for assistance, asserting her concerns had not been addressed in a month.
On May 31, “Ping” implied she was ill with a serious heart condition, was managing three JSS/JBP accounts that had been hacked a month ago and said her “sister borrowed on her house [to] put money in JBP.”
During the June 7 call, Mann also implied that JSS/JBP members were free to start their own business-with-a-business — for example, they could create pools from investor money at the local, regional, national or international level and a single JSS/JBP member could manage the pools and perhaps make a profit by playing the spread between what JSS/JBP pays and the fees a local pool manager would charge for managing the pool.
JSS/JBP has no known securities registrations, does not identify where it is operating from and may have ties to the “sovereign citizens” movement.
Mann now has taken to doling out medical advice during the JSS/JBP calls, insisting that JSS/JBP members should not trust their doctors.
Nor should they trust attorneys, Mann implied.
JSS/JBP members are required to affirm they do not work for the “government.”
Zeek recently has encountered problems at at least two U.S. banks. Zeek preemptively has denied it is a pyramid scheme. The firm also claims it is not offering an investment product.
A Blog targeted at senior citizens is recruiting affiliates for Zeek Rewards, JSS Tripler/JustBeenPaid and other online "programs" that suggest they can create riches. (Redaction by PP Blog.)
EDITOR’S NOTE: As the PP Blog was researching matters pertaining to the Zeek Rewards MLM “program” and preparing the post below for publication, it encountered a subdomain of the ZeekRewards.com website styled “zeeksupport.” A page on the subdomain purports to identify 16 Zeek “employees,” although is was unclear whether the workers received a wage or salary or were independent contractors.
Here is the full URL: http://zeeksupport.zeekrewards.com/zeeksupport/people
Included among the “employees” listed were Terralynn Hoy and Catherine Parker, both of whom were affiliated with AdSurfDaily, which the U.S. Secret Service alleged was a Ponzi scheme that had gathered at least $110 million. Hoy, at least, also was affiliated with an ASD knockoff known as AdViewGlobal.
In April, federal prosecutors in the District of Columbia said they’d tied ASD President Andy Bowdoin to AdViewGlobal. Bowdoin, 77, pleaded guilty to wire fraud last month after being charged criminally in 2010 for his role in the ASD Ponzi scheme. As part of a plea agreement, Bowdoin has been banned from MLM, Internet programs and mass marketing.
Although the story below does not report on the Zeek claims that Hoy and Parker are Zeek employees, a link on the Zeek subdomain leads to a page in which “Catherine Parker” is responding to Zeek customer-service issues, including one titled, “TO BE PAID FOR OUTSTANDING AUCTION WINNINGS, POST HERE.” Within the customer-service thread is a post from an individual who claimed to have won an April 12, 2012, Zeekler auction for $100 in U.S. cash with a winning bid of $16.28 — but never received his money. Other posters also claimed not to have been paid . . .
UPDATED 5:27 P.M. EDT (U.S.A.) A detailed post from December 2011 on an affiliate Blog that publishes information in German and English instructs affiliates of the Zeek Rewards MLM “program” how to wire funds to Zeek and have them deposited in its account at NewBridge Bank in North Carolina. The Blog, which targets senior citizens, is hosted on Google’s free Blogspot platform at a subdomain styled “getlucky2011.”
Zeek announced suddenly last week that it was ending its relationship with NewBridge. It also announced it was ending its relationship with BB&T, a second bank based in North Carolina. Zeek plants the seed that affiliates can earn a return of between 1 percent and 2 percent a day, but the “program” insists it is not offering an investment opportunity.
Included on the same affiliate Blog are multiple pitches for JSS Tripler/JustBeenPaid, a “program” purportedly operated by Frederick Mann that does not disclose its base of operations, may have ties to the “sovereign citizens” movement and advertises a return of 60 percent a month. The deck of the Blog, which includes a Zeek affiliate link in the right sidebar, features these words (bolding added):
“Indefinitely sustainable second income seniors earn independent living, plan their retirement, meet seniors assisted living, meet seniors online, secure your pension, look for retirement services and retirement benefits”
The post provides a glimpse into how U.S. banks could come into possession of funds tainted by fraud as the funds circulate between and among various HYIP programs advertised online. Research by the PP Blog shows that NewBridge also was one of the banks that handled the business of a bizarre MLM “program” known as “Narc That Car” that effectively collapsed in 2010 after the Better Business Bureau raised pyramid-scheme concerns and American television stations and investigative reporters turned their sights on Narc.
How Narc, a Texas-based company that used at least two names and at least two banks when issuing checks to members, ended up using NewBridge in North Carolina as one of its banks is unclear. Narc issued checks under the names of Narc Technologies Inc. and National Automotive Record Centre Inc. The entity later became known by a third name: Crowd Sourcing International.
National Automotive Record Centre Inc., Narc’s purported parent company, is listed in Nevada records as a corporation in “default.” Zeek’s purported parent company, Rex Venture Group LLC, also is registered in Nevada. Like Narc, Rex has scored an “F” from the BBB. (See Rex listing. See Narc listing.)
Like Zeek, Narc relied on a company known as USHBB Inc. to produce video sales pitches for its opportunity. USHBB is based in Indianapolis. Among its listed officers is OH Brown of Mount Pleasant, S.C. Brown hosted this May 2012 call for the Zeek “program” and also is listed on Zeek’s website as a Zeek “employee” who simultaneously holds the title “Official Rep.” Whether Brown receives compensation from Zeek while also serving as the vice president of USHBB is unclear.
On March 15, 2010, the PP Blog published a story that reported that a video USHBB produced for the Narc “program” asserted that some affiliates were earning more money than the President of the United States.
As part of its reporting on Narc, the PP Blog visited a USHBB website in 2010 that claimed the company had done promotional work for MLM teams and companies such as Ad Surf Daily, AdGateWorld, BizAdSplash, Ad-ventures4U, TVI Express and Global Verge/Buzzirk Mobile. Virtually all of the enterprises listed were associated with get-rich-quick schemes or HYIP autosurfs. Some of the “programs” later went missing from the web or were accused of fraud.
Frederick Mann of JSS Tripler/JustBeenPaid was a promoter of both AdSurfDaily and Ad-ventures4U, according to records. Clarence Busby, a onetime business partner of ASD’s Andy Bowdoin, was the purported chief consultant and operator of BizAdSplash, an autosurf that vanished mysteriously in 2010. Erma Seabaugh, ASD’s purported “Web Room Lady,” also was affiliated with Ad-ventures4U.
On March 2, 2010, the PP Blog reported that a Narc affiliate known as “Jah” was seeking to drive business to Narc by producing his own videos and posting them on YouTube. “Jah’s” videos featured check-waving as a form of social proof that Narc “paid.” One of the videos, which later was removed, showed a Narc check drawn on NewBridge. Another “Jah” video that still appears online shows that Narc also had an account at a second bank.
“Jah” compared repping for Narc to working for the U.S. Census Bureau.
Some of “Jah’s” check-waving videos later were hidden from public view. Jah, however, was not the sole Narc affiliate to produce check-waving videos in which checks from NewBridge were displayed. Though Narc appears to be long gone, the PP Blog observed a video today on YouTube in which the name of NewBridge flashed on the screen.
Zeek has not provided specifics about why it ended its relationship with NewBridge.
Among the assertions on the German/English Blog that was targeting senior citizens and promoting both Zeek and JSS/Tripler/JustBeenPaid was that “SolidTrustPay is one of the worlds most trusted e-wallet providers.”
SolidTrustPay is a Canada-based payment processor that is handling business for both Zeek and JSS Tripler/JustBeenPaid.
The PP Blog reported on June 2 that JSS/JBP also was being promoted on a race-baiting and Catholic-bashing site known as VaticanAssassins. The VaticanAssassins site, among other things, asserts that ““Majority Savage Blacks were never taught to behave in civil White Protestant culture and thus have been released upon us Reformation Bible-believing Whites to further destroy our once White Protestant and Baptist American culture founded upon the Reformation’s AV1611 English Bible and a White Protestant Presbyterian Constitution with its attached White Baptist-Calvinist Bill of Rights.”
On Memorial Day, U.S.-based Zeek Rewards announced it was closing its "old" bank accounts in the United States and opening a new account at a bank it did not name.
UPDATED 8:18 A.M. EDT (MAY 29, U.S.A.) In a curious Memorial Day announcement placed below a representation of the American flag, the Zeek Rewards MLM “program” told affiliates they must cash commission checks “immediately” because Zeek is switching banks.
“Zeek is currently in the process of moving to a bank that can handle our growing needs and while in transition will be closing our old accounts with both New Bridge Bank and BB & T,” Zeek said on its news Blog. “Please be sure to deposit or cash any commission checks immediately so they clear before June 1st, 2012 or they will be returned to you with ‘account closed’ and will need to be reissued.”
Zeek did not identify its new bank. Nor did the purported “opportunity” say why its old banks could not handle its needs and whether its new bank operated on U.S. soil.
Both New Bridge and BB&T are FDIC-member banks operating in North Carolina. Zeek is a purported arm of Rex Venture Group LLC, which conducts business in North Carolina.
Zeek says it conducts business with offshore payment processors such as AlertPay (now Payza) and SolidTrustPay. Both AlertPay and SolidTrustPay have been criticized for being friendly to dubious businesses if not outright scams such as investment programs operating in disguise, HYIPs, autosurfs and cycler matrices.
Zeek affiliates, meanwhile, have a presence on well-known Ponzi-scheme forums such as TalkGold and MoneyMakerGroup, which has led to questions about whether proceeds from any number of fraud schemes could be passing through Zeek. Today alone Italian authorities announced advertising bans against at least three “programs” that either have or had a presence on the Ponzi boards. The “programs” included JSS Tripler, which purports to pay a daily return of 2 percent; Ricochet Riches, which advertised a daily return of at least 2 percent; and Macro Trade, which advertised a daily payout rate of between 1.2 percent and 2.2 percent. A entity known as “System Explosion” also was referenced today in an investor warning by CONSOB, the Italian securities regulator.
Although Zeek insists it is not an investment program, its reported daily payout rate of between 1 percent and 2 percent is consistent with the returns advertised by numerous online scams.
Two days ago, British journalist Tony Hetherington of the Daily Mail wrote about a purported program known as Royalty 7 that was advertising a daily return of 7 percent. Royalty 7 also has a presence on the Ponzi boards, and a PP Blog reader — “Tony” — reported today that the U.K. Financial Services Authority warned on May 22 that Royalty 7 was an unauthorized firm.
“Finance Your Dream Ltd trading as Royalty7.com is not authorised under the Financial Services and Markets Act 2000 (FSMA) to carry on a regulated activity in the UK,” FSA warned. “Regulated activities include, among other things, accepting deposits by way of business.”
Royalty7 — like Zeek, JSS Tripler and scores of other programs that either plant the seed that outsize returns are possible or outright advertise returns that correspond to annualized returns in the hundreds of percent — advertises that it uses AlertPay and SolidTrustPay as payment processors.
The Zeek Rewards MLM program is married to a penny-auction site known as Zeekler.
“Win Cash!” Zeekler roars to bidders. “Funds will be sent to the winner by SolidTrust Pay or AlertPay.”
Zeek’s apparent reliance on processors that are the darlings of global fraudsters has resulted in a bizarre condition under which Zeekler effectively is using U.S. currency as an auction “product” no different than a TV set while advertising that successful bidders for sums of cash can receive their winnings through offshore processors linked to fraud scheme after fraud scheme.
Successful Zeekler bidders are told to “please send a note to [Zeekler] customer support requesting SolidTrust Pay or AlertPay” to receive their cash winnings.
Despite Zeek’s claim it is not an investment program, it has been presented as such online by its own affiliates. Affiliates claim they’ve earned gains that correspond to an annualized return of more than 500 percent and that Zeek has a feature that makes “compounding” possible.
They’ll tell you that 2 percent a day (730 percent a year) is not too good to be true and that experts had performed “due diligence.” They’ll say their “program” is different from other schemes that either collapsed under their own weight or were brought down by the government. They’ll position themselves as free-market entrepreneurs, perhaps even the guardians and gatekeepers of freedom itself.
They’ll draft grandparents into their cross-border HYIP fraud schemes, tell them to set up accounts for their grandchildren and then proceed to defraud entire families — oldest to youngest.
Grandma might not even know that the payment-processing account her unlicensed, unregistered sponsor helped her set up for 15 percent of her personal and family outlay is based offshore.
By design.
It makes the money harder to trace. It creates jurisdictional hurdles for law enforcement. It gives the collective of international criminals more time to pick more pockets — and pick them they will. It’s what they do. Often repeatedly in scam after scam. Sometimes for years.
If you’re an American interested in politics — perhaps especially if you have Republican, conservative, rightist or libertarian leanings and hold the principled view that less government is best — they’ll shape a message just for you. Because the sales pitch is designed to confirm your biases while at once loosening your purse strings, you’ll be less apt to be discerning. They might tell you what you should be angry about — the economy, the Fed, Wall Street, the banks, the bailout, the regulators, the politicians who start wars.
This does not mean, however, that they won’t be glad to separate you from your money if you’re a centrist of any political persuasion or a Democrat, liberal or leftist in your leanings. They’ll tell you anything to get access to your money.
The schemes work best during lean times. If no bogeyman exists in your life, they’ll create one for you to loathe: an individual, an authority figure, an agency, a bureaucracy, a member of the media. Their frauds are designed to separate you from your rational self; that’s how they suck you in.
There may be a public face of the enterprise, perhaps a man who projects impeccable manners. He’ll be described as a genius, perhaps by a conference-call or webinar host who has a soothing voice made for radio. If you haven’t been able to access your account for weeks and aren’t really sure where your money is, someone will suggest it is your fault. Stepfordian shills will reinforce that notion. They’ll try to make you believe that questioning the enterprise is a sign of weakness, a sign that — unlike the rest — you lack faith.
True believers will emerge. So will enforcers who will “defend” the enterprise at any cost. There may be no ceiling to their wretched excess, their intellectual dishonesty, their disconnect from the world of rational thought. Some of them even will send notes to reporters that read like the one the PP Blog received yesterday at 3:41 p.m. EDT.
The would-be poster tried to put this in the thread below my tribute post to Maddy, my beloved terrier who died last week.
Here is is:
Congratulations! At last a real report based on credible sources and on a fact- not on fabricated false statements or regurgitated information from somewhere else.
A dog’s life is worthless if his owner is engaged in spreading lies and speculation to harm others.
It’s a sign of GOD telling you to stop publishing fear and meaningless accusations once and for all. If you don’t believe in him (GOD) but Karma, then this is it coming at ya.
The next time it will be someone who you love not an animal.
You’ve been warned by the universe.
[Name Deleted By PP Blog]
We’d like to say that the suggestion that God favored HYIP Ponzi schemes and caused Maddy’s death because of what the PP Blog has written represents a new low.
But it doesn’t.
In 2008 — on the seventh anniversary of the 9/11 terrorist attacks — an apologist for the AdSurfDaily Ponzi scheme that had sucked in at least $110 million by promising to provide a daily return of 1 percent released a “prayer” that asked God to cause U.S. federal prosecutors to be made to suffer.
And to be struck dead.
It therefore comes as no surprise that an HYIP apologist could not resist the urge to subject Maddy — a tiny dog who provided nothing but joy, never saw a person she did not love and put smiles on countless faces — to such a monstrous indignity.
In the HYIP sphere, according to the apologist, God protects the innocent operators of schemes advertising 2 percent a day and kills dogs to send a message to their owners not to try to warn the public about transnational crime made possible over the Internet.
And if the death of a dog doesn’t provide enough of a chill for a reporter to abandon a story, then maybe God or at least the forces of karma then will cause family members to die.
It is thuggery and racketeering, the voluntary abandonment of the greater angels of the soul, and it is utterly bereft of decency.
Zeekler, an arm of a U.S. company, frequently promotes auctions for sums of U.S. cash. Winning bidders can collect the sums via offshore payment processors linked to fraud scheme after fraud scheme. Zeek is adding to the incongruity by preemptively denying it is a "pyramid scheme" while planting the seed that the U.S. government is operating a pyramid scheme through the Social Security program.
UPDATED 11:12 A.M. EDT (U.S.A.) After the U.S. Secret Service seized tens of millions of dollars in the AdSurfDaily Ponzi case in 2008, some of ASD’s Stepfordian members advanced the bizarre theory that ASD should have been left untouched because Social Security — a U.S. government program — is a Ponzi scheme. The argument, which assumes Social Security is a Ponzi scheme, is disingenuous to its core. Even if it could be proven that Social Security is a Ponzi, it does not change the simple fact that private businesses are not permitted to operate Ponzi schemes.
With the Social Security argument providing disingenuous cover for ASD and scams across the web, some of ASD’s most reliable “defenders” instantly turned their attentions to other autosurfs, HYIPs, cyclers and cash-gifting schemes. They might as well have said, “If the government gets to run a Ponzi scheme, so do we.”
The Social Security argument is a deflection that gets trotted out in scam after scam. It is used so often in scams that feature an MLM or MLM-like component that it has become a cliché, a veritable signature of a scam. Some of the most robotic MLM Stepfordians can’t resist the urge to go heavy on the exclamation points when they’re “defending” the most recent “program” in their stable of scams. Many of the “defenses” are nothing more than antigovernment screeds.
Even ASD President Andy Bowdoin — who after preemptive denials now admits he was operating a massive Ponzi scheme and knew all along that ASD was “an illegal money making business” — could not summon the discipline required to put an end to his scamming ways and days after his arrest. The government now says it has tied Bowdoin to AdViewGlobal (AVG), an autosurf that launched after the Secret Service raid, and to “OneX,” an alleged “fraudulent scheme” and pyramid.”
After the ASD raid, Bowdoin embarked on a PR strategy that positioned the government as evil. The government, according to Bowdoin, was guilty of “wrong doing,” creating a “nightmare of injustices,” bringing “un-true charges” and the “suppression of all ASD members.”
Like the Social Security argument, it was just a way to change the subject.
It has become somewhat fashionable within the HYIP sphere for “program” operators to preemptively deny they are running Ponzi schemes. The up-front denials were an element in the ASD case. They are incongruous by their very nature because they typically occur even as the “program” plants the seed that it not only pays commissions on two or more levels, but also provides outsize returns of 1 percent or more per day — percentages that would make Bernard Madoff blush.
“Zeek Rewards” is an MLM “program” that is planting an ASD-like seed that money directed to the enterprise will produce a large return.
Given the lessons provided by the ASD case on both the legal and PR fronts, it is just plain bizarre that Zeek is preemptively denying it is a “pyramid scheme” — all while going heavy on the exclamation points and raising the issue of Social Security.
On its Zeekler.com penny-auction site, the “opportunity” is saying this (italics/bolding added):
Our parent company Rex Venture Group has been in business 13 years and has historically paid its representatives in the field every commission check earned since its’ [sic] inception. “Is this a Pyramid Scheme?” Of course not!! “Pyramids” or “Money Games” are illegal and ask its’ [sic] participants to wrap money in tin foil and FedEx it to “someone else” with no exchange for product or service!
For good measure, the site is saying this (italics/bolding added):
The pyramidal structure is actually the “model” structure of every corporation and even the U.S. Social Security system. Why then are pyramids illegal? Because there is no “exchange” of product or service for the money spent and the only ones who “collect” money are the people at the top of the pyramid. When there are no longer enough people coming and sending money “up” to move people thru the pyramid – the pyramid collapses. An example of a legal – yet collapsing pyramidal structure/system is what is happening to social security. The baby boomers are all coming of age to collect (at the top of the pyramid)- with not enough people paying in from the bottom!! The structure will then collapse. Every CEO is at the top of his/her company’s pyramidal structure. That’s why he/she makes so much more than a mailroom worker. At penny auction site Zeekler every person has the same opportunity to achieve the same income or out-earn the person who referred them into the program.
Whether Rex Venture Group historically has paid commissions is immaterial to the issue of whether the company is conducting a pyramid scheme through its Zeek arms. Like successful Ponzis, successful pyramid schemes pay. The payments are what keep new money flowing to the schemes. Web-based Ponzis/pyramids can be exceptionally dangerous because affiliates use the payments they receive as a disingenuous form of social proof that no scam is under way.
Zeek’s “tin foil” reference is an apparent allusion to obvious cash-gifting scams. But lawyered-up Zeek has to know that the pyramid issue is much more complicated that that, which is why the gifting allusion impresses us as a red herring. Ponzi/pyramid schemes come in many forms and often involve the issuance and sale of securities. Fraud purveyors may avoid the use of the language of investments, but a security described as something else is still a security.
And that’s one of the potential issues with Zeek: Is the company selling unregistered securities as investment contracts and trying to disclaim its way out of an encounter with regulators?
Zeek does not address this issue in its preemptive denial that it is operating a pyramid scheme and simultaneous argument that Social Security is a pyramid scheme. But it does touch on the securities issue at the bottom of the home page of ZeekRewards, the MLM arm of the Zeek “program” (italics added):
IMPORTANT: The following paragraph MUST BE READ ALOUD whenever the ZeekRewards compensation plan is presented verbally or by telephone, or included in it’s entirety when communicating in writing:
“If you make a purchase from ZeekRewards you are purchasing a Premium eCommerce subscription or you are purchasing bids to give away as samples. You are NOT purchasing stock or any other form of “investment” or equity. You MUST actually use the bids that you purchase or give them away as samples to help grow your business. Affiliates who present our products to others in a misleading manner or in a way that leads the buyer to believe he or she is making an investment or purchasing equities will be terminated and all commissions and awards will be forfeited. Buyers MUST read the entire How It Works and Get Paid pages on the ZeekRewards website and the Legal Disclaimers.”
At a minimum, this much can be said about Zeek: It has a tin ear for PR.
Zeek is preemptively denying it is a pyramid scheme even as its affiliates maintain a presence on well-known fraud forums such as TalkGold and MoneyMakerGroup, a circumstance that strongly suggests scammers are directing money to Zeek that they “earned” in other scams. The Social Security argument also is a loser because it is embraced by a sea of online scammers as a rationale for licensing themselves to commit crimes on a global scale.
ASD preemptively denied it was a Ponzi scheme. Its Stepfordian affiliates advanced the Social Security deflection even as they were racing to their next scams and positioning them as a way ASD members could make up their losses.
Almost all of the scams used the same offshore processors Zeek is using.
