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Tag: HYIP schemes

  • WILL JSS/JBP AND ‘ONEX’ MEMBERS PAY ATTENTION? Andy Bowdoin’s Plea Agreement Bans Him From MLM, Internet Programs And Mass Marketing; ‘I Am Pleading Guilty Because I Am In Fact Guilty . . .,’ AdSurfDaily Patriarch Tells Judge

    Under the terms of his plea agreement, AdSurfDaily President Andy Bowdoin effectively has been banned from multilevel marketing, Internet opportunities and businesses that employ mass marketing.

    The agreement contains this provision, and Bowdoin consented to it in writing as a condition of release before he is formally sentenced: “Your client shall not participate in any business venture using the internet, multi-level marketing, or mass marketing.” (Italics added.)

    Language in the agreement suggests the bans could last until Bowdoin is well into his eighties — until Bowdoin, now 77, serves any prison or probationary term imposed. No sentencing date has been scheduled. Bowdoin’s next court date is set for June 12 “to determine if he should be incarcerated pending his sentencing,” federal prosecutors said.

    Bowdoin pleaded guilty yesterday to wire fraud for the web-based ASD scam.  The information in the numbered entries (below) was confirmed by Bowdoin himself in a “Statement of Offense” that bears his signature. It is in stark contrast to earlier online claims by the ASD patriarch that he had been railroaded and that ASD members should send him money to pay for his criminal defense.

    Second Key Win For Government

    Bowdoin’s guilty plea marked the second recent win by the government in a major online HYIP case. Gregory N. McKnight, the operator of the Legisi HYIP and Ponzi scheme, pleaded guilty to wire fraud in February. The Legisi and ASD schemes fetched a combined haul of more than $180 million, according to court filings. Bowdoin’s scheme was a form of HYIP fraud known as “autosurfing” in which participants were promised enormous returns for viewing advertisements. The schemes spread in part through social networking and shilling sites such as the TalkGold and MoneyMakerGroup forums.

    The U.S. Secret Service was involved in both the ASD  and Legisi probes.

    ASD Discussed In HYIP’s Conference Call Day Before Bowdoin Guilty Plea

    A current HYIP scheme known as JSS Tripler/JustBeenPaid continues to make inroads online. Frederick Mann, the purported operator of JSS/JBP, was identified in 2008 promos as an ASD pitchman. Bowdoin’s legal problems were among the subjects of a JSS/JBP conference call Thursday that appeared to be heavily populated by U.S. residents, including some who expressed worry about the “program.” JSS/JBP purports to provide a daily return of 2 percent, twice that of ASD.

    Less than 24 hours after Thurday’s JSS/JBP call ended, Bowdoin pleaded guilty in open court and subjected himself to a possible prison term of 78 months, along with three years’ supervised release. Under the terms of his plea agreement, Bowdoin potentially faces court supervision for the next 9 and a half years.

    During Thursday’s call, Mann — an older man, like Bowdoin  — did not rule out the possibility that his program could encounter an ASD-like intervention by the government.

    “The slavemasters don’t want their slaves to escape,” Mann said, casting the U.S. government as wicked.

    “What you need to realize is that the de facto U.S. Constitution is ‘anything goes’ that we can get away with. So, that’s how Obama operates. That’s how Romney would operate if he were elected President. That’s how George Bush operates.”

    Like ASD, JSS/JBP may have ties or be sympathetic to the so-called “sovereign citizen” movement. “Sovereign citizens” have an irrational belief that laws do not apply to them. JSS/JBP is so secretive that the “opportunity” does not identify where it is operating from and makes members affirm they are not with the “government.”

    After a caller asked Mann Thursday about ASD, Mann said this:

    “If they want to arrest people and take their money, they will find some pretext.”

    HYIPs operate as virtually pure Ponzi schemes. Victims can pile up by the tens of thousands in a single scheme. The schemes redistribute wealth from the masses and put it in the hands of a select few.

    Bowdoin’s Statement

    ASD's Andy Bowdoin

    Before getting into some of the specifics of Bowdoin’s signed statement — a statement also signed by Bowdoin’s attorney Charles A. Murray and a federal prosecutor — it perhaps is worth noting that Bowdoin’s plea agreement contains this provision to which Bowdoin agreed in writing: “Your client represents to the Court that his attorney has rendered effective assistance.” (Italics added.)

    Though boilerplate  language, it is important in the context of Bowdoin’s history. Indeed, he has a history of publicly blaming lawyers for his problems. In 2011, for example, he appeared in a video solicitation in which he asked the people he now admits he defrauded to pay for his criminal defense. Bowdoin blamed his prior counsel, a federal judge, two federal prosecutors and three agents of the U.S. Secret Service for his predicament. The final page of the plea agreement contains this language to which Bowdoin agreed in writing:

    “I have read this Plea Agreement and discussed it with my attorneys, Michael McDonnell, Esq. and Charles Murray, Esq. I fully understand this Plea Agreement and agree to it without reservation. I do this voluntarily and of my own free will, intending to be legally bound. No threats have been made against me nor am I under the influence of anything that could impede my ability to understand this Plea Agreement fully. I am pleading guilty because I am in fact guilty of the offense(s) identified in this Plea Agreement.” (Italics/bolding added)

    Because of the plea agreement and the MLM/Internet/mass-marketing bans, Bowdoin’s role as an an online pitchman for a program known as “OneX” has ended.

    In essence, because of what Bowdoin did in ASD — and allegedly what he continued to do even after being arrested for running a Ponzi scheme — Bowdoin has been banned from MLM, kicked out of the business side of the Web and barred from making mass solicitations in any form.

    Prosecutors said last month that OneX was a “fraudulent scheme” and “pyramid” that was recycling money to members in ASD-like fashion. Bowdoin was arrested on ASD-related charges in December 2010. In October 2011 — 10 months after his arrest — he told OneX prospects that God had provided the OneX program and that he intended to use money from the scheme to pay for his criminal defense.

    On Tuesday — just three days before Bowdoin pleaded guilty to a felony for his operation of ASD — a fellow OneX pitchman described Bowdoin as “our Mentor.”

    Here, now, some highlights from Bowdoin’s signed “Statement of Offense” — along with editorial notes. Bolding added by the PP Blog . . .

    1.) “Bowdoin called ASD’s operation a revenue-sharing advertising program . . .” (NOTE: All kinds of HYIP schemes use the phrase “revenue sharing” as a means of masking the Ponzi elements. The phrase, for example, appears on the website of JSS/JBP. It “works” because it sounds plausible. After all, many businesses share revenue legally. The connection many new HYIP enlistees do not make is that scammers have co-opted the term to sanitize their fraud schemes.)

    2.) “But, contrary to its representations, the advertising packages sold by ASD generated insufficient revenue to fund the returns it promised to the members. Instead, ASD operated as a ‘Ponzi’ scheme.” (NOTE: ASD members Dwight Owen Schweitzer and Todd Disner sued the government last year, alleging that ASD was a legitimate business. Bowdoin now publicly disagrees with them, based on his admission that ASD was a Ponzi scheme.)

    3.) “Throughout ASD’s operation, Bowdoin was aware that ASD was an illegal money making business, and that he was intentionally defrauding ASD members.”

    4.) ASD, according to Bowdoin’s statement, actually gathered more than “$119 million” from members. (NOTE: This figure is about $9 million higher than the rough amount of $110 million cited by the government in previous filings. The PP Blog will check next week to see if it can confirm that the $119 million figure is the final sum identified after investigation. As things stand, both Bowdoin and the government agree on the $119 million figure.)

    5.) ASD made more than $45 million in Ponzi payments and spent more than $10 million on operations. About $1.161 million was directed at Bowdoin or his family.

    6.) During ASD’s initial iteration at AdSurfDaily.com, Bowdoin realized “[a]fter only a few months of operation” that ASD was in over its head “because he was not selling any independent products or services sufficient to generate an income stream needed to support the returns and commissions ASD was paying . . .” (NOTE: The JSS/JBP scheme has a commission-payout scheme (two tiers, one paying 10 percent the other 5 percent) that is virtually identical to ASD. Incredibly, JSS/JBP  says it can pay double ASD’s daily return of 1 percent on top of the two-tiered commissions.)

    7.) “In approximately March 2007, Bowdoin ceased ASD’s operations because it was paying out money to its employees and members faster than it was taking in new money.” (NOTE: Bowdoin’s concession proves the government’s longstanding theory that ASD collapsed in its original iteration because of the Ponzi pressure. At one point, according to court filings, Bowdoin blamed ASD’s inability to pay on script problems and a purported theft of $1 million by “Russian” hackers.)

    8.) Bowdoin — instead of getting out of the Ponzi business — thereafter launched ASD under a new name at a new website: ASDCashGenerator.com. Bowdoin, according to his statement, admits he made some cosmetic tweaks — lowering the return from 150 percent to 125 percent, for example. “By not changing ASD’s business model in any meaningful way, Bowdoin continued to intentionally defraud members.” (NOTE: It is common in the HYIP fraud sphere for “admins” to claim they’ve employed tweaks to take Ponzi issues out of play. An obvious Ponzi scheme known as JSS Tripler 2 appears recently to have employed some Bowdoin-like tweaks, including a name change to T2MoneyKlub — while adding to its claims that the “opportunity” had income streams sufficient to pay an absurd return of 2 percent a day on top of referral commissions.)

    9.) Bowdoin never told his second group of fraud victims that they were paying for the fraud Bowdoin committed against his first group of victims.

    10.) “Bowdoin also intentionally failed to explain to old and new members that, in the 1990s, he was convicted in Alabama of three securities-related crimes, charged in Alabama in at least 13 additional indictments alleging securities fraud, and barred from ever selling securities in Alabama.”

    11.) Bowdoin compounded lies told about his lack of a criminal record by permitting lies to be told about an award for business achievement purportedly given Bowdoin by President George W. Bush. The “award” actually was a memento from the National Republican Congressional Committee (NRCC) that was “entirely dependent” on a Bowdoin money contrbution to NRCC of $25,000 “and was not based on Bowdoin’s business acumen or any other evaluation of his prior business practices.”

     

  • INTERPOL PRESIDENT: Transnational Criminals Working For ‘Common . . . Boss’ In Asia Gathered Billions; Suspects Caught At Airport In ‘Nick Of Time’; Cybercrime Costs In Europe Now Approaching $1 TRILLION A Year; U.S. Banks Lost $12 Billion To Cyber Criminals In 2011

    “[Eighty] per cent of crime committed online is now connected to organized gangs operating across borders. Criminal gangs now find that transnational and cybercrime are far more rewarding and profitable than other riskier forms of making money.” — INTERPOL President Khoo Boon Hui at 41st European Regional Conference held in Tel Aviv, citing study from London Metropolitan University, May 8, 2012

    INTERPOL President Khoo Boon Hui at the 41st European Regional Conference in Tel Aviv. Source: INTERPOL.

    EDITOR’S NOTE: HYIPs, autosurfs, money-cyclers, and other “programs” are part of the cyber menace, which increasingly is being advanced by criminal gang members who reach across national borders and line their pockets with money stolen from their targets.

    In June 2011, U.S. Attorney General Eric Holder described the amount of money being stolen online as “staggering.”

    The thefts, Holder said, have “the potential to threaten not only the security of our nation — but the integrity of our government, the stability of our economy, and the safety of our people.”

    In Tel Aviv yesterday, INTERPOL cited some truly alarming numbers . . .

    How big is the criminal menace becoming in the age of cross-border fraud on the Internet?

    In jaw-dropping remarks yesterday in Israel, INTERPOL President Khoo Boon Hui said Malaysian police last month arrested 137 “gang members” from China and Taiwan who were running an online gambling scam that had gathered the staggering sum of $1.3 billion in “profits.” (NOTE: This sum is quoted in U.S. dollars.)

    The scammers, Hui said, were part of a cross-border criminal syndicate that was operating from “six luxury homes equipped with call centres, computers and even training rooms in a gated community which was also home to a former prime minister.”

    If that weren’t enough, Malaysian police — just two days after taking down that scam — encountered another one that had resulted in criminal profits in the billions. The second scam again involved gang members from China and Taiwan. It resulted in 83 arrests, Hui said.

    “They cheated victims in China and Taiwan through online scams involving a range of modus operandi from impersonating the authorities to phoney credit card and bank charges,” Hui said. “They were on the verge of fleeing the country, having closed down their operational base and some had even made it to the airport where they were detained in the nick of time. They had been in Malaysia for just eight months when they were arrested.”

    Early information suggests that the fraud “originated from Macau and had operated from other countries such as Cambodia, Indonesia, Philippines and Thailand,” Hui said.

    The story of the arrests, however, appears to have an ending that could be described as unfinished. Indeed, Hui said he grew “perturbed” when he found out that the subjects of the arrests were deported because “thousands of victims were out of Malaysian Police jurisdiction.”

    “I was perturbed by this course of action and asked the Malaysian Police Chief for more details when I met him last Friday,” Hui said. “It turned out that though the two syndicates were unknown to each other, they were controlled by a common Taiwanese boss. This was why the second syndicate had been alerted to pack up. Fortunately, the Taiwanese Police, which as we all know is not an INTERPOL member, was able to fully cooperate with its Chinese and Malaysian counterparts and had alerted them of what was happening from its own close monitoring. The Malaysian Police chief was confident that the gang members would get their just dues back in their homeland.”

    In relating the story of scammers who allegedly stole billions of dollars while operating inside the borders of another nation, Hui said the incident highlights some of the problems law enforcement encounters in the age of the Internet.

    “This case illustrates how organized crime is now able to recruit members from countries without diplomatic ties to commit crimes overseas operating from temporary safe bases in third countries equipped with the latest technology,” Hui said. “It also shows that there are links between syndicates that operate scams and those which promote illegal betting and presumably match fixing using sophisticated MOs. In this case, exceptional international police cooperation within the region thwarted them.”

    And cybercrime hardly is limited to Asia, Hui said, noting that the menace and its economic costs come in more than one form.

    “Here in Israel alone, a reported number of over 1,000 cyber?attacks take place every minute,” Hui said. “Experts have estimated that the cost of cybercrime is larger than the combined costs of cocaine, marijuana and heroin trafficking. In Europe, the cost of cybercrime has apparently reached 750 billion Euros [US$971 billion] a year. Likewise, we have seen global financial institutions suffer from major cyber?attacks on their networks and servers with US banks purportedly losing $900 million to bank robbers but $12 billion to cyber criminals last year.”

     

  • Only Days After Negative CONSOB Finding On JSS Tripler, Affiliate Press Release Claims ‘Program’ Lets Members ‘Start With Just $10 And Turn It Into A Fortune’

    An affiliate's "press release" for JSS Tripler/JustBeenPaid is juxtaposed on Google News today against information about CONSOB's ban of promos for the "opportunity" in Italy. The affiliate's release ignores the CONSOB news, positions JSS/JBP as a way to make a "fortune" — and does not explain that JSS/JBP members must affirm they are not with the "government." The release also ignores conflicts between the "opportunity's" written words and the spoken words of purported operator Frederick Mann.

    At the moment, Google News is providing an interesting juxtaposition on the subject of JSS Tripler, the purported arm of the “JustBeenPaid” program that does not identify itself with a nation-state, makes members affirm they are not with the “government” and advertises an absurd monthly return of 60 percent.

    Frederick Mann, the “opportunity’s” purported operator, was identified in 2008 promos as a pitchman for AdSurfDaily. The U.S. Secret Service called ASD an online Ponzi scheme that had gathered at least $110 million and defrauded thousands of people. JSS Tripler/JustBeenPaid advertises a daily payout rate twice that of ASD.

    As the screen shot above shows, Google News today is publishing information on JSS Tripler from three sources. Two of the sources report on the April 23 JSS Tripler promotional ban by CONSOB, the Italian securities regulator.

    A third source — dated May 2, nine days after CONSOB announced the JSS Tripler ban — does not reference the ban at all. Instead, it instructs readers via an affiliate’s press release that JSS Tripler is “an income-generating program that lets investors start with just $10 and turn it into a fortune. Essentially an HYIP, the program factors in the daily compounding system to increase earnings or make daily withdrawals as any investor would wish.”

    One of the issues in the ASD Ponzi case is lack of disclosure to investors.

    JSS Tripler/JustBeenPaid has no known securities registrations. Regardless, the affiliate’s release defines participants as “investors” and positions the program as one that is passive in nature. Claims in the release easily could lead to questions about whether the “opportunity” and its affiliates are benefiting in ASD-like fashion from the sale of unregistered securities by a global network of unregistered brokers.

    In March, Mann told members it was OK to describe the opportunity as an investment program. Regardless, this line appears in his own program’s member agreement. (Italics added):

    5. I have NOT been led to believe that this activity is an investment activity, franchise, or employment opportunity.

    Although the release prompts readers (in the first paragraph) to “look closely at what they are getting into and ensure that they are joining income opportunities through programs that are proven to truly deliver financial freedom and sustainability,” it does not explain why the Member Agreement says one thing and Mann another.

    Nor does it explain why any reasonable person would direct money to an entity whose Member Agreement also says this. (Italics added):

    6. I affirm that I am not an employee or official of any government agency, nor am I acting on behalf of or collecting information for or on behalf of any government agency.

    7. I affirm that I am not an employee, by contract or otherwise, of any media or research company, and I am not reading any of the JBP pages in order to collect information for someone else.

    Bizarre ambiguities, incongruities and internal inconsistencies are common in the HYIP fraud sphere.

    News about CONSOB’s JSS Tripler ban was published in English on CONSOB’s own website April 23. It also was published on the PP Blog and other sites, including the sites referenced by Google News.

    Even as the affiliate was prompting JSS Tripler/JustBeenPaid prospects to “look closely,” he apparently missed information that was available through simple web searches — and this apparently also occurred after he missed the conflict between Mann’s words and the “opportunity’s” published Member Agreement.

    The release concludes with these words:

    “People who want real money from a reliable online networking system without the fuss and tricks should visit [URL deleted by PP Blog] to learn more.”

  • UPDATE: JSS Tripler 2 And Associated Scams Get More Bizarre By The Day: After Purported Bout With Dengue Fever, ‘Dave’ Purportedly Gets Married; Cashouts Now Reportedly Delayed Due To Wedding And Script Glitch — As Members Encouraged To Carry Out Blog-Posting ‘Tasks’

    This will be a familiar refrain to many readers of the PP Blog: In July 2010, the Blog reported that the Financial Industry Regulatory Authority (FINRA) had launched a public-awareness campaign about HYIP fraud. FINRA called the HYIP sphere a “bizarre substratum of the Internet.”

    Just a month earlier — in June 2010 — the U.S. Department of Justice pointed to a threat assessment by the International Mass-Marketing Fraud Working Group (IMMFWG) that declared “[t]here are strong indications that the order of magnitude of global mass-marketing fraud losses is in the tens of billions of dollars per year.” (Emphasis added).

    In publicizing the IMMFWG document, which noted that international scammers use threats and coercive tactics to sustain schemes and chill “uncooperative victims,” the Justice Department alleged that the Pathway to Prosperity (P2P) HYIP scheme had reached into at least 120 countries and gathered $70 million.

    P2P was only one of hundreds or even thousands of HYIP scams operating on the Internet.

    Flash forward to late 2011 and the birth of “Dave’s” JSS Triper 2, which apparently based its name on JSS Tripler, the “opportunity” purportedly operated by Frederick Mann. JSS Tripler 2 reportedly stopped making payments within weeks of launch, blaming an AlertPay account freeze. After that, “Dave” suggested that an unidentified law-enforcement agency that had failed to act in his interests was at least partly responsible for JSS Tripler 2’s problems.

    Among other things, “Dave” has asserted he was conducting a “scan” of critics. Naturally, a “program” relaunch purportedly occurred, Ponzi-forum cheerleaders helped “Dave” advance the scheme (as they drove traffic to their other schemes) and JSS Tripler 2 changed its name to T2MoneyKlub and hatched a companion scheme known as Compound150.com — all while “Dave” reportedly was battling back from a bout with Dengue fever.

    “Dave,” who preemptively denied JSS Tripler 2 was a Ponzi scheme, now appears to have duped members into performing “tasks” such as making comments on Blogs/websites to dupe prospective purchasers of the sites into believing they’re buying established sites with built-in readership. The theory — apparently — is that “Dave” can monetize the sites, sell them at a handsome profit and use the cash to fund his various investment programs, thus muting the Ponzi critics and taking concerns of illegality off the table.

    Some of “Dave’s” members claim they’ve carried out the “tasks” — in effect, to “do what’s best for the ‘program.’” Whether they’re concerned that they’re helping “Dave” scam a new crop of suckers who’d end up with junk websites is unclear.

    What is clear is that they want to get paid — and perhaps are willing to say anything while carrying out the “task” of posting comments on Blogs in purported bids to make them more attractive to purchasers.

    One bizarre and homophobic “comment” on a purported “Dave” Blog (CarryMyBaby.com) reads as such:

    “[W]ell obviuosly [sic] the more sex you have the greater the chances of becoming pregnant unles [sic] you r [sic] one of those queer couples. then no matter what you two do together neither party wll [sic] get pregnant,,,capisce [sic]?”

    Meanwhile, a bizarre comment on a purported “Dave” Blog (IBeatForeclosure.com) reads as such:

    “its [sic] got be [sic] tough to have to decide if you have to foreclose on your house but the this [sic] mortagage [sic] crisis happened [sic] people had not [sic] choice not [sic] and [sic] easy thing to go through.”

    The Blogs appear to be hosted in Utah. Ownership is unclear.

    But even with the “tasks,” JSS Tripler 2 payments reportedly have been suspended again, owing to “Dave’s” wedding, the need to accommodate international travelers and a purported script glitch that caused some members to get paid twice.

    Some members — including members who previously sold JSS Tripler as a “passive” investment opportunity — now claim that members unwilling to assist Dave in posting fake comments are “lazy.”

    On the MoneyMakerGroup Ponzi forum, a “Dave” cheerleader posted a list of 26 websites for JSS Tripler 2 members to visit to post comments.

    So, the JSS Tripler 2 “program” includes these elements:

    • An HYIP scheme that purportedly provided an annualized return of 730 percent and started out by naming itself after an existing scheme that also purported to pay 730 percent a year. (Think FINRA and its memorable “bizarre substratum of the Internet” line in July 2010.)
    • A preemptive denial that a Ponzi scheme was under way — even as well-known Ponzi forum cheerleaders helped the scheme gain a head of steam. (As part of FINRA’s July 2010 educational campaign on the dangers of HYIP fraud,  it issued a public warning about social-networking fraud.)
    • A purported payment-processor freeze that left members in the lurch for weeks.
    • Incongruous suggestions that “law enforcement” had failed to act in the best interests of the “program.”
    • Attempts to chill/ostracize members. (The sort of coercive tactics referenced in the June 2010 IMMFWG document publicized by the U.S. Department of Justice.)
    • Cheerleading by willfully blind participants. (Think Matt Gagnon and the Legisi HYIP Ponzi scheme.)
    • A name change. (Also an element in the AdSurfDaily Ponzi case.)
    • The launch of companion “programs.” (Another element in the ASD Ponzi case.)
    • A purported bout with Dengue fever. (Purported illnesses and violent windstorms are longtime HYIP clichés.)
    • Payment delays blamed on a wedding. (Imagine a legitimate broker/financial adviser telling you that you’d have to wait for the branch manager to return from her honeymoon in Southeast Asia  before you could withdraw the sum you need to buy groceries or cough medicine for your children or pay a tuition bill.)
    • Payment delays blamed on script problems and/or double payments to members. (See this story from our ASD files.)
    • A purported duty to post comments on Blogs to drive up their sale value, so the money can be used to fund investment “opportunities.”

     

  • [VOMIT ALERT]: JSS Tripler 2 — After Name Change to T2MoneyKlub — Opens Feeder Scam Called Compound150; Operator/Cheerleader Lecture MoneyMakerGroup Ponzi-Forum Mods As ‘Opportunity’ Targets ‘Compounding Lovers’

    Compound150 says it is a spinoff of T2MoneyKlub, while targeting "compounding lovers" like a sandwich joint targets lovers of cheeseburgers.

    The ink was barely dry on the most recent civil judgments for millions of dollars against serial HYIP pitchman Matthew J. Gagnon when Compound150 launched yesterday. On Tuesday, the SEC announced $4.2 million in new court-ordered assessments against Gagnon, who’d earlier been hit with more than $2.5 million in assessments in a related case and became the subject of a criminal complaint filed by the U.S. Secret Service.

    Gagnon was a web-based pitchman for the Legisi HYIP Ponzi scheme and other high-yield “opportunities,” including a “program” in which his alleged partner was a twice-convicted felon. The SEC essentially charged Gagnon with turning a blind eye to obvious fraud schemes — repeatedly.

    Apparently not taking the clue that HYIP promoters are at risk of both civil and criminal prosecution, the operators of JSS Tripler 2 have launched the Compound150 feeder scam, a companion to the original JSS Tripler 2 scam. After suspending member payouts in December 2011 amid reports of an AlertPay freeze, JSS Tripler 2 — also known as T2 — gave itself a new name: T2MoneyKlub.

    The addition of the Compound150 scam means that the entity — purportedly operated by “Dave” from locales ranging from Britain to Cambodia to Thailand — means that the original JSS Tripler 2 entity now has a third entry in its scam lineup.

    But the strangeness does not end there: Indeed, JSS Tripler 2 reportedly based its original name on JSS Tripler, a purportedly unrelated “program” whose affiliates became the subjects in January of a probe by CONSOB, the Italian securities regulator. Compound 150 reportedly launched during a period in which “Dave” was building prelaunch buzz while simultaneously battling (or recovering from) a bout with Dengue fever.

    In the fraud sphere, it is common for “opportunities” to refer to illnesses, server problems or catastrophes such as typhoons. In upholding the 20-year prison sentence of pyramid schemer Seng Tan, the U.S. Court of Appeals last month pointed out that Tan — who targeted the scam she ran with her husband at Cambodian émigrés in the United States — blamed the scam’s inability to make payouts on Hurricane Katrina.

    Tan’s husband — James Bunchan — ultimately received sentences totaling 60 years because he discussed murdering witnesses and the federal prosecutor who brought the case.

    How strange could the JSS Tripler2/T2MoneyKlub/Compound150 “opportunity” get? The answer, perhaps, is that the sky is the limit. Perhaps positioning itself as a category creator, Compound150 says “compounding lovers” are among its target audience.

    Compound150 apparently believes it is to multilevel marketing (MLM) what a fast-food chain is to lovers of cheeseburgers

    Compound150 opened its doors amid a weekend flap at the MoneyMakerGroup Ponzi forum in which “Dave” — posting as Peakr8 — protested the forum’s description that the emerging opportunity was an HYIP, not an MLM opportunity.

    “So are we a HYIP?” Dave asked.

    “Hell no!” he answered himself, even as Compound150 was claiming on its website that it pays participants “1% daily for 150 days up to 150%.”

    In effect, Compound 150 is advertising a (precompounding) annualized return of 365 percent, about the same purported ROI that led to the 2010 indictment of AdSurfDaily President Andy Bowdoin amid allegations he was operating an international Ponzi scheme.

    If convicted on all counts in his September 2012 Ponzi trial, Bowdoin, 77, faces up to 125 years in federal prison and fines in the millions of dollars. As part of the ASD Ponzi investigation, the U.S. Secret Service seized the bank accounts of some individual ASD promoters.

    Ten of Bowdoin’s personal bank accounts were seized — and five bank accounts allegedly involved in the operation of Golden Panda Ad Builder, a companion autosurf, were seized.

    “Dave” was joined in his protest by JSS Tripler2/T2MoneyKlub/Compound150 shill “lolalola,” who insisted that Compound150 was an MLM.

    In the civil portion of the ASD case, ASD also insisted it was an MLM. A federal judge was unmoved, ordering the forfeiture of more than $80 million, including more than $65.8 million from Bowdoin’s personal bank accounts.

    An “opportunity” can at once be both an HYIP and an illegitimate MLM “program.” (Simply calling a program an ‘MLM” does not cure a program of legal defects, and some scams mix-and-math elements of both pyramid schemes and Ponzi schemes. Such programs may be described by investigators as pyramid-style Ponzi schemes.)

    Compound150 appears to have a confluence of payout schemes very similar to the schemes that led to at least FOUR ASD-related forfeiture actions, the filing of a racketeering (RICO) lawsuit against Bowdoin, the seizure of tens of millions of dollars, millions of dollars in ASD-related civil judgments — and the ultimate filing of wire fraud and securities- fraud charges against Bowdoin.

    Bowdoin also was charged with selling unregistered securities.

    Like Bowdoin, Seng Tan also insisted her “opportunity” was an MLM.

  • Day After SEC Announces Judgments Totaling $4.2 Million Against Serial HYIP Pitchman, Another Serial Pitchman — ‘Ken Russo’ — Makes ‘I Got Paid’ Post On TalkGold For JSS Tripler/JustBeenPaid; Separately, McAfee’s ‘Site Advisor’ Declares JBP Pages ‘Dangerous’

    In a 29-page court order announced yesterday by the SEC, U.S. District Judge George Caram Steeh of the Eastern District of Michigan laid out the case of willful blindness against serial HYIP pitchman Matthew John Gagnon.

    That case now has resulted in court-ordered judgments of more than $4.2 million against Gagnon, who also was named in a criminal complaint by the U.S. Secret Service in November 2011.

    But in the HYIP sphere, which FINRA described in 2010 as a “bizarre substratum of the Internet,” not even the huge judgment against Gagnon announced yesterday appeared to unnerve the serial scammers on the TalkGold and MoneyMakerGroup Ponzi forums.

    Posting as “DRdave” on TalkGold, huckster “Ken Russo” announced he’d received a new payment of $482.08 from JSS Tripler/JustBeenPaid, a “program” whose purported daily payout rate of 2 percent dwarfs the purported payout rate of Legisi, one of the “programs” that led to Gagnon’s demise.

    In a March 15 conference call, Frederick Mann, the purported operator of JSS/JBP, told members that the company was making the payouts from money sent in by “new members.” Paying “old” members with money from “new” members is the central element of a Ponzi scheme.

    Even as “Ken Russo” was making the announcement, the online security company McAfee was publishing a “Warning: Dangerous Site” message about the JustBeenPaid website.

    “We tested this site and found it’s risky to visit,” McAfee’s Site Advisor reported.

    In 2010, the SEC declared Gagnon a “danger to the investing public” for his serial promotion of scams. (See paragraph 11 of May 2010 SEC complaint.)

    Assessing Gagnon more than $4.2 million in disgorgement, prejudgment interest and penalties, Steeh found that:

    • Gagnon promoted the Legisi HYIP online, through emails and through a forum.
    • Even though Gagnon promoted the program, he was not associated with a registered broker-dealer and had never been registered with the SEC in any capacity.
    • Gagnon understood HYIP frauds and Ponzi schemes, and yet gleaned about $3.6 million from Legisi operator Gregory McKnight and did not disclose details of his agreement with McKnight to solicit investors for Legisi.
    • Gagnon helped orchestrate the “massive” Legisi Ponzi scheme and initially had come into contact with McKnight after Gagnon had recruited McKnight into an MLM business that sold dietary supplements.
    • Legisi was selling unregistered securities.
    • Gagnon was selling unregistered securities.
    • Gagnon did not qualify investors in any way. (In essence, the only necessary qualification was to have money to send to Legisi.)
    • Gagnon performed no “due diligence” on the profitability of the Legisi program. He did not retain or review trading records, bank or brokerage accounts statements or e-currency account records.
    • Gagnon knew or “recklessly disregarded” warnings that Legisi was a scam, did not know where McKnight was keeping the money or how McKnight was calculating profits and losses.
    • Eventually Gagnon distanced himself from McKnight (after learning about an SEC probe, according to the agency), but proceeded to pitch other scams touting the illegal sale of securities. A twice-convicted felon was Gagnon’s alleged partner in one of the scams, but Gagnon performed no legwork up front.
    • Gagnon eventually learned that a man with the same name as his partner had been convicted of fraud, but “accepted” his partner’s “representation that it was not him.” Gagnon did not investigate his partner’s denials, which were false.
    • Gagnon then proceeded to another opportunity touting unregistered securities, effectively using the same blueprint he’d used when touting Legisi and the other scam in which his partner was a convicted felon. As in the other scams, Gagnon did no legwork and “recklessly ignored several warning signs.”
    • Even as he touted the third program, Gagnon had received “several” bad checks from the purported “successful” trader. Gagnon continued to tout the program.
    • Gagnon then touted a fourth program, apparently one operated by a Ugandan national Gagnon had met on the Internet. (Gagnon stopped promoting this program, according to the SEC, only after the agency subpoenaed his bank records.)
    • Gagnon has shown “no remorse” for his conduct “and has tried to downplay his culpability.”

    Whether “Ken Russo” has conducted any “due diligence” on JSS/JBP is unknown. Whether “Ken Russo” has any qualifications to sell securities is unknown. Whether “Ken Russo” qualified investors in any way is unknown. Whether “Ken Russo” retained or reviewed JSS/JBP records, bank or brokerage accounts statements or e-currency account records is unknown.

    What is known is that “Ken Russo” proceeds from scheme to scheme to scheme.

    “I would caution everyone not to listen to anyone who is posting negative comments about this program,” “Ken Russo,” posting as “DRdave” on TalkGold, urged today. “JBP/JSSTripler has changed many lives during the past 13 months and it is one of the best programs I have seen since I first entered the industry back in 1996!”

    Here, according to the SEC, is how Gagnon, who’d been pitching programs online “since at least 1997,” described Legisi:

    “IN ALL OUR EXPERIENCE IF (sic) HIGH YIELD PROGRAMS THIS IS THE ONLY GENUINE PROGRAM THAT WE HAVE EVER FOUND!”

    McKnight, like Gagnon, is facing millions of dollars in civil judgments. And McKnight pleaded guilty last month to a criminal charge of wire fraud.

    It turned out that Legisi was not “GENUINE” at all.

  • URGENT >> BULLETIN >> MOVING: Legisi Ponzi-Scheme Pitchman Matthew J. Gagnon Ordered To Pay More Than $4.2 Million In Disgorgement, Penalties

    Matthew John Gagnon

    UPDATED 10:35 P.M. EDT (U.S.A.)  Matthew John Gagnon, an HYIP huckster and promoter of the Legisi Ponzi scheme, has been hit with orders of disgorgement and penalties totaling more than $4.2 million, the SEC said.

    Gagnon, of Portland, Ore., and Weslaco, Texas, was described by the SEC as a serial promoter of fraud schemes through his Mazu.com website.

    “The Court found that Gagnon ‘purposefully built up an image of trustworthiness in the on-line investing community and exploited this trust,’” the SEC said. “The Court also found that Gagnon ‘repeatedly committed egregious violations of the federal securities laws’ and ‘has shown no remorse for his conduct.’”

    U.S. District Judge George Caram Steeh of the Eastern District of Michigan presided over the Gagnon case, which the SEC brought in May 2010. The SEC case against Gagnon was not limited to his involvement in Legisi. It also addressed his involvement in a “resorts” securities-fraud scheme from which money was diverted to a recidivist felon, and his involvement in multiple Forex schemes.

    Legisi, an HYIP fraud, had a considerable presence on the TalkGold and MoneyMakerGroup Ponzi forums. Legisi operator Gregory McKnight pleaded guilty to wire fraud last month.

    Here is the breakdown of the financial penalties ordered by Steeh in the May 2010 case against Gagnon: $3,613,259 in disgorgement; $488,570.47 in prejudgment interest; and a $100,000 civil penalty.

    The court-appointed receiver in the Legisi case also holds millions of dollars in judgments against Gagnon.

    Here is a snippet from Steeh’s order of permanent injunction against Gagnon (italics added):

    “[Gagnon] explained that ‘I have a trader I represent in Europe that can trade your funds in a managed account.’ Gagnon promised that investors in the European Trade Offer would experience ‘consistent monthly profits’ and ‘very few losing trades.’ Apparently, the European trader is ‘Juju,’ who is Jjunju Kateregga, a Ugandan national residing in Finland. Gagnon promoted Juju’s trading prowess after meeting him on the internet, exchanging emails and talking to him on the phone ‘a few times.’”

    NOTE: The quoted passage above pertains to a purported “managed Forex trading” offer pitched by Gagnon after he moved on from Legisi. (Read the full order at Justia.com.)

    In November 2011, the U.S. Secret Service filed a criminal complaint against Gagnon for his alleged wrongdoing in Legisi.

  • STATUS QUO CHANGE IN ‘PROGRAM’? Conference-Call Recordings Of ‘Carl Pearson’ Go Missing From JSS Tripler/JustBeenPaid Website; Development Explained Away As Response To Potential ‘Hackers’ — Although Frederick Mann Recordings Remain

    Purported JSS Tripler/JustBeenPaid COO Carl Pearson. From: YouTube.

    It sometimes is the case in the corrupt universes of HYIPs that a change in the status quo signals panic or devastating news. It’s also sometimes the case that significant developments get explained away as meaningless or part of a plan that had been in place all along in response to explosive growth.

    It is almost always the case that HYIPs such as JSS Tripler/JustBeenPaid and their various purveyors reveal incongruities and internal inconsistencies — and a few big ones now are in play at JSS/JBP.

    Within the past several days, audio recordings of JSS Tripler/JustBeenPaid “conference calls” featuring pitchman and purported COO “Carl Pearson” have gone missing from the JSS/JBP website. The recordings previously had been embedded on the site below the embedded recordings of Frederick Mann, the purported operator of JSS/JBP. Although Mann’s recordings remain, the recordings of Pearson have vanished.

    No recording from Mann was added to the site last week, meaning the last embedded Mann recording carries a date of March 15. No recording was posted for March 22, meaning that the streak of posting a recording of every Mann Thursday conference call dating back to Feb. 16 had been broken.

    In the March 15 call, Mann told members that JSS/JBP was paying them with money from “new members” and that it was OK to call JSS/JBP an investment program. Using money from new members to pay old members is the central element of a Ponzi scheme. And because Mann himself described JSS/JBP as an investment program, promoters could find themselves confronting assertions they are selling unregistered securities as investment contracts.

    JSS/JBP members who identified themselves of residents of the United States or Canada were on the March 15 call (and also on previous calls). Their nationalities and citizenship are potentially important because JSS/JBP has no known securities registrations, meaning that regulators from either the United States or Canada could move against the enterprise and perhaps even some of its promoters.

    Mann has declined on multiple occasions to identify JSS/JBP with a nation-state — and promoters still are pushing the scheme, despite the fact they appear to have no clue about the internal workings of JSS/JBP and how they (and their recruits) ever could recover their investments in the event of a collapse or a government intervention.

    In January, the Italian securities regulator CONSOB announced a JSS/JBP-related action — and affiliates still promoted the program, with JSS/JBP itself claiming it was posting record numbers of new members daily.

    At least a few JSS/JBP members have noted the removal of the Pearson calls. Earlier today, the PP Blog viewed an affiliate’s Blog for JSS/JBP in which an assertion was made that Pearson had become too busy with other duties to host calls.

    “Due to the unprecedented growth of JBP, Carl Pearson will no longer be doing the weekly conferences,” a comment from a reader asserted. “He is prioritising now full time in the back office operations of JBP.”

    The comment was dated March 21. A follow-up comment dated March 22 suggested the recordings had been removed for security reasons and that other information also might be removed.

    “From the conference room yesterday at around 8pm Dominick got on the mic and announced it,” the post claimed. “He also said that staff members could have their pictures and information removed from the site if they wanted to and Carl as well as other staff members decided it would be best to have that information removed. He said that they are growing so fast that they could be targeted by crooks and hackers.”

    But what the explanation did not reveal is why Mann’s recordings remained on the site if concern about crooks and hackers was great enough to trigger the removal of the Pearson recordings.

    As often is the case in the HYIP sphere, the information was posted anonymously, meaning it could not be verified. Even so, the information is potentially disturbing in the sense that it defaults to well-known HYIP clichés such as introducing the prospect of hackers  — while ignoring the potentially damning information contained in the jettisoned material as a factor in the removal decision and the obvious fact that information that remains on the site may be equally damning.

    With a straight face, for example, JSS/JBP purports to pay a daily return of 2 percent and a monthly return of 60 percent.

    JSS/JBP openly advertises that it pays a return of 60 percent a month on TOP of affiliate commissions totaling 15 percent over two tiers.

    In 2007, when the alleged AdSurfDaily Ponzi scheme stopped making payments to members (even as its operator allegedly was making political donations with Ponzi money), ASD President Andy Bowdoin allegedly blamed the halted member payouts on script problems and “Russian” hackers who’d allegedly taken $1 million.

    Bowdoin never filed a police report about the purported theft of $1 million, federal prosecutors said.

    In 2008 promotional materials attributed to Mann, Mann was identified as an ASD pitchman. As the ASD prosecution moved forward, it became apparent that certain ASD members either were “sovereign citizens” or sympathizers. Some “sovereign citizens” hold extreme antigovernment views and have an irrational belief that laws do not apply to them.

    In November 2011, ASD figure and purported “sovereign citizen” Kenneth Wayne Leaming was arrested by an FBI Terrorism Task Force in Washington state on charges he had filed false liens against at least 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.

    On Feb. 27, the PP Blog reported that a website linked to Mann included links to 11 videos concerning Francis Schaeffer Cox, a purported “sovereign citizen” under indictment in an alleged murder plot against public officials in Alaska.

    One poster on the JSS/JBP-related Blog from which the “hackers” explanation was advanced had a different take on conference-call-related developments.

    “Heat is also the REAL reason why Carl Pearson has moved off the conference calls,” the poster speculated.

     

  • [EYE-OPENING EXERCISE]: A Modest ‘HYIP’ — But One That Provides A Learning Experience Juxtaposed Against JSS Tripler/JustBeenPaid: Compare Pitches Of ‘Blue Hedge Investments’ And JSS/JBP

    "Blue Hedge Investments," like JSS Tripler/JustBeenPaid, is out there for all of Canada (and other countries) to see.

    UPDATED 2:57 A.M. EDT (U.S.A., MARCH 27) Vague information about JSS Tripler/JustBeenPaid is all over the web. The “opportunity” purportedly operated by Frederick Mann is targeting investors in Canada, the United States and many other countries through conference calls, videos and text pitches.

    The PP Blog has listened to recordings of four JSS/JBP conference calls with Mann as the featured guest. Persons who asked questions during the calls have identified themselves as residents of the Canadian provinces of “Alberta” and “British Columbia” and several U.S. states. One caller suggested he was Jamaican — and Jamaica, like Canada and the United States, has had more than its share of problems with massive fraud schemes.

    See story on combined Jamaica/U.S. allegations against Bertram A. Hill. See story about the guilty plea of Jamaican citizen David A. Smith, implicated by the United States in a spectacular international fraud scheme that involved at least $220 million.

    One of the hallmarks of HYIP fraud is vagueness about an “opportunity.” JSS/JBP, for example, purports to pay a daily return of 2 percent, with Mann accorded the description of “mathematical genius.”

    But Mann — despite the various superlatives attached to his name and the various preposterous claims  — does not tell investors in Canada or the United States (or any other country) where the JSS/JBP “program” is operating from.

    As an exercise in identifying red flags, the PP Blog today is proposing that readers visit the website of “Blue Hedge Investments.” (The URLs are below.)

    Among other things, “Blue Hedge” describes itself as a “truly once-in-a-lifetime opportunity.”

    Promoters of JSS/JBP use similar language when promoting their “program.”

    And “Blue Hedge” — also in vague, JSS/JBP-like fashion — also says this: “BlueHedge Investments is led by a team of well-respected Canadian specialists with vast experience in the offline and online investment market . . .”

    If anything, though, JSS/JBP is even more vague than “Blue Hedge.” JSS/JBP, for example, doesn’t even identify itself with a nation-state.

    Unlike JSS/JBP, “Blue Hedge” plants the seed that its investors earn 9 percent a month, a relatively modest claim in the HYIP sphere.  JSS/JBP, on the other hand, claims 60 percent a month, more than 6.6 times the “advertised” monthly return of “Blue Hedge.”

    While “Blue Hedge” asserts it is interested in “the financial stability of our people today,” JSS/JBP promoters also claim their program is about the people — specifically, “average people.”

    Many people instantly would question any claim that appears on the “Blue Hedge” website, even though its purported payout is far lower than the payout advertised by JSS/JBP and thousands of its affiliates.

    But the sad reality is that many people would question neither the claims of “Blue Hedge” nor the even more extreme (or even more opaque) claims of JSS/JBP.

    Like “Blue Hedge,” JSS/JBP has a “Platinum” program. And like “Blue Hedge,” JSS/JBP is out there for all of Canada (and all of the United States and other countries) to see.

    “Blue Hedge” provides a learning opportunity for all JSS/JBP promoters. The PP Blog encourages readers to visit the “Blue Hedge” site.

    It perhaps is best to start with this page to get a sense of the interest rates while comparing them to JSS/JBP. You’ll see “Invest Now” buttons on the page, but perhaps it is best to avoid clicking on them until you’ve visited the “Blue Hedge” FAQs page and finally this page to assess its content and watch the short video.

    After that, click on the “Invest Now” button and assess its content. It might be one of the best clicks you make all year. (See button on this page.)

  • DEVELOPING STORY: JSS/JBP’s Frederick Mann Tells Americans, Canadians That Company Is Paying Them With Money From ‘New Members’ And That Firm’s Theoretical Income Streams May Be Insufficient To ‘Pay The 2 Percent’

    “Where does JustBeenPaid get the money to pay that kind of interest?” — Caller “Michael” from “San Francisco” in March 15 JSS Tripler/JustBeenPaid conference call

    “Well, first of all, JBP or JSS Tripler is a revenue-sharing program, so that means some of the money comes from new members buying positions. Then, we are in the process of developing additional income streams, so that’s relevant. And eventually the additional income streams may be sufficient to pay the 2 percent — maybe not.” — Response by Frederick Mann, purported JBP/JSS operator, to “Michael’s” question, March 15, 2012

    Frederick Mann

    UPDATED 7:26 P.M. EDT (U.S.A.) In yet-another bizarre conference call for JSS Tripler/JustBeenPaid, the “program’s” purported operator told listeners from the United States and Canada (and possibly from Jamaica) that JSS/JBP is paying them with money sent in by “new members.”

    Using “new” money to pay “old” members is the central element of a Ponzi scheme — although Frederick Mann did not use the phrase. Still, it was the white elephant in the conference room, and Mann’s explanations during the March 15 call became increasingly complex, vague and incongruous.

    Mann, for instance, declined to say where the program was operating from, repeating his practice of nondisclosure from previous calls.

    What’s important, he explained, “is that our programs are not U.S.-based. We don’t have any offices in the U.S. Our servers are not in the U.S.”

    The explanation caused a chuckling U.S. caller to quip, “Yeah. I agree. Somewhere out in the galaxy.”

    “Yes,” Mann replied to the caller’s “galaxy” remark. The caller earlier had described himself during the March 15 call as a “financial planner” for 22 years. In a previous call, the caller said he was in “California” and had family in Iowa.

    And Mann advised listeners that it was OK to call JSS/JBP an investment program when they were recruiting new members — guidance that seemed to catch even the conference-call host off-guard.

    “And I know that, in the [separate conference] room, we do try to say ‘purchase’ and ‘repurchase’ as opposed to ‘invest’ and ‘reinvest,’” the female host said.

    It is common for HYIP scams and their purveyors to seek to avoid the language of investments when promoting “programs” — on the errant belief that avoiding such language insulates them from prosecution.

    The female host did not say why the other room was giving one set of instructions and Mann another. Regardless, internal inconsistencies are one of the hallmarks of HYIP scams, and it is well-known that wordplay designed to disguise securities fraud cannot insulate purveyors from prosecution — rather like a robber who uses a gun to snatch the purse of an 80-year-old woman cannot avoid prosecution by calling the robbery an innocent exercise in arranging a loan and insisting that the gun was a harmless piece of metal that just happened to be at the scene.

    Mann, whose name appears in 2008 materials identifying him as a promoter of the alleged AdSurfDaily Ponzi scheme,  said nothing about whether JSS/JBP had any securities registrations or whether promoters of the “program” were risking a legal calamity by recruiting downlines into a scheme that does not identify itself with a nation-state and whose payout corresponds to a preposterous annualized return of 730 percent .

    The bank accounts of some individual ASD promoters were seized by the U.S. Secret Service in the ASD Ponzi case, according to court filings. JSS/JBP purports to pay a daily return double that of ASD.

    Income Streams Are Theoretical; ‘Free’ Members Dominate JSS/JBP

    The most troubling explanation — among any number of troubling explanations during the 1:11 call — was Mann’s assertion in response to a question from “Michael” of “San Francisco” about where JSS/JBP gets the money to pay a return of 2 percent a day. (The exchange is noted in the breakout quotes at the top of this story.)

    Conceding that the company uses money from “new members” who buy “positions” to make the payouts, Mann simultaneously acknowledged that the “program” was “in the process” of developing new income streams and that those still-theoretical streams may be insufficient to sustain the scheme.

    But the company’s “restart” feature, Mann suggested, was enough to defeat any concerns that the firm’s liabilities exceeded its assets.

    “The 2 percent that the company pays is effectively a liability to the company,” Mann said. “But what the ‘restart’ makes possible is to convert some or even all of these liabilities into assets in the form of JSS positions.”

    Even so, members needed “to bring in new members with new money,” Mann said. He later asserted that only “about 25 percent” of new registrants “put in money.”

    “Maybe 75 percent of people do nothing,” Mann said, a problematic response because the program advertises that it provides registrants a $10 credit (described during the March 15 call as a loan) for joining and pays them interest of 20 cents a day until they realize a profit of $5 after 75 days.

    When JSS/JBP debits a member’s account to recapture the purported loan, which apparently is made at an interest rate of zero percent, the company still is on the hook for the $5 due the new subscriber.

    Speaking with a South African accent but using an American baseball metaphor, Mann said the lion’s share of JSS/JBP new members (about 75 percent) do nothing after enrolling

    If the JSS/JBP program were baseball, Mann suggested, “The pitcher would pitch the ball, and they would watch it go by, they would just stand there.”

    If Mann’s assertions are true, it means that only 25 percent of JSS/JBP’s members are propping up 100 percent of the enterprise, including the purported $5 profit due new registrants in 75 days and much larger payments due other members. Even if JSS/JBP enforces a cash-out minimum higher than $5 to prevent a flood a small redemptions, such a device leads to questions about whether the purported $10 credit is just a smaller scam within a larger scam that permits accrued liabilities to be ignored.

    Much remains mysterious about JSS/JBP’s purported restarts and its in-house accounting methods. Other HYIPs have used similar devices to duck the Ponzi issue. But with its “restart” explanation, JSS/JBP may be inviting questions about whether is has introduced Enron-like accounting tricks into the morass.

    Enron’s 2001 collapse revealed one of the greatest financial scandals in U.S. history. It destroyed not only the company, but also the Arthur Andersen accounting firm. (See “Enron scandal” Wikipedia entry.)

    Is JSS/JBP a miniature Enron-in-waiting?

    Among the callers who asked questions during the call was a JSS/JBP member who described himself as “Earl,”  a 79-year-old man interested in leaving money for his daughter.

    Also on the line was a man who suggested he hailed from Jamaica and wanted to start a JSS/JBP account for a “nonprofit, for a school that I have, that I attended in Jamaica.”

    Other callers identified themselves as residents of the Canadian provinces of British Columbia and Alberta and the U.S. states of California, South Dakota, Texas, Georgia, Missouri and Louisiana.

    One caller asked Mann why electronic payments from JSS/JBP came from “Michael” at a BigBooster.com email address, not an email address associated with the JSS/JBP domains.

    “Michael is a business partner, and he handles some of the finances,” Mann said. He did not identify “Michael” by a last name.

    Mann also advised callers that JSS/JBP had two representatives in Italy, but did not speak to the JSS/JBP-related probe involving the program’s affiliates announced by the Italian securities regular CONSOB in January.

    One caller informed Mann that his downline recruits has put in “substantial” sums. Another complained that his account had been debited weeks in advance of the anticipated debit. Another complained that the website was unattractive to potential recruits and looked like a scam. Yet another fretted that the site appeared to lack a secure connection (https). Still another complained that his “matrices” did not appear to be cycling properly.

    HYIPs are infamous for creating one set of expectations and then changing the rules at midstream. They’re also infamous for their convoluted explanations and fuzzy — if not downright impossible — math.

    Like ASD’s Andy Bowdoin — now under indictment amid charges that he orchestrated an international Ponzi scheme that had gathered at least $110 million — Mann has been accorded the description of “genius” in promotions for the program.

     

  • AdLandPro, Site Whose HYIP Shills Touted AdSurfDaily, Finanzas Forex And JSS Tripler/JustBeenPaid, Renews Attack Against RealScam.com — As ALP Swaps In Images Of Its Own Members Alongside Ad For ‘Escort’ Service

    This ad for a purported Thailand escort service appears today in the United States on AdLandPro, a site whose operator is threatening a class-action lawsuit against RealScam.com, an antiscam forum. The PP Blog captured this screen shot today and edited it to remove the images of EIGHT AdLandPro members whose photographs were displayed in the left sidebar and created the appearance that the AdLandPro members also were members of (or approved of) the escort service. When the Blog reloaded the ad, the page displayed the images of EIGHT other AdLandPro members. A third reload served up an image of an entire family, including three young children who appear to reside in the South Central United States.

    In November 2011, the PP Blog reported that Bogdan Fiedur of AdLandPro had threatened antiscam site RealScam.com with litigation. The bid to chill RealScam in the age of international mass-marketing fraud featured the registration of a domain styled RealScamClassActionSuit.com.

    With Fiedur trolling for suckers and hoping to make his intellectual dishonesty go viral, RealScam did not buckle at his obvious bid to chill it.

    Good for you, RealScam!

    It’s hard to condense all the AdLandPro absurdities that followed over the next several weeks, but we’ll summarize them as such: A sampling of Stepfordian shills and mindless apologists stepped up to the plate for Fiedur, “fake” law students purportedly from a major American university entered the fray to add to the bid to chill — and the matter devolved into Threatre of the Absurd in that Internet-only sort of way.

    By the end of December, the chill bid appeared to end: Content on the purported class-action site went missing, and the site began to resolve to an AdLandPro page.

    We would be remiss if we did not point out that, in addition to being solicited to register for HYIP scams such as AdSurfDaily, Finanzas Forex and JSS Tripler/JustBeenPaid (730 percent a year) by purported “Christians” on AdLandPro over the past few years, American visitors (and others) also were solicited for cross-border sales of pharmaceuticals.

    If drugs weren’t on their purchase list, AdLandPro visitors were told how to find used underwear and arrange — umm, how should we put this? — the temporary services of scantily clad women in various nations from India eastward after demonstrating a way to pay?

    At least some of the risqué ads have gone missing, but their URLs remain. When they’re clicked, they resolve to pages that show the faces of AdLandPro members who had nothing to do with the placing of the ads. Did we mention that AdLandPro purports to be a great guardian of privacy and the interest of its members?

    And did we mention that not all of the risqué ads have gone missing — and that, when they’re clicked, they load images of AdLandPro members who had nothing to do with placing the ads and that AdLandPro wants members to believe it was a sort of Facebook before Facebook became the craze?

    “The most exclusive, classic and attractive companions in Bangkok are here waiting to join you, at your hotel, apartment, or villa,” one ad on AdLandPro reads today. “All our princesses are hand picked by our management for their beauty, demeanour and friendly attitude.”

    The ad is on the “community” subdomain of the AdLandPro.domain. When the PP Blog viewed the ad earlier today, the photographs of EIGHT AdLandPro members showed up in a sidebar only inches to the left. The headline above the sidebar read, “Our Members.” Less than an inch away, a photo of a presumptive “escort” wearing a pink-lace bra and a pink-lace wrap over her genital area appeared. The photo appeared to display two red telephones, with the woman posing seductively on what appeared to be a bed or mat.

    When the PP Blog reloaded the page, the images of eight different AdLandPro members were displayed. A third reload resulted in the display of images of an AdLandPro family whose matriarch identified herself in her AdLandPro profile as a mother and grandmother from the South Central United States.

    Two adults in the photo were holding young children, one of whom appeared to be an infant. A third child also appeared in the photo. Below that photo, the full-face image of a lone AdLandPro member — a woman — appeared. Below the woman’s photo, an ad for “OneX” appeared.

    OneX is a program accused Ponzi schemer Andy Bowdoin of AdSurfDaily said he was using to raise funds to pay for his criminal defense.

    “I believe that God has brought us OneX to provide the necessary funds to win this case,” Bowdoin said in an October 2011 pitch.

    So, if you’re an AdLandPro member and had nothing whatsoever to do with the placement of the escort ad and do not endorse Thailand “princesses” purportedly “hand picked by . . . management,” say, because you oppose human trafficking and the sexual exploitation of women, AdLandPro is making it appear as though you’re on board the Thailand escort train.

    A link prompt below the photos of the eight AdLandPro members reads, “See All 185753 Members.” The URL points to the AdLandPro membership directory.

    By coincidence, the U.S. Department of Justice announced today that Marcus Choice Williams, 36, of Fort Worth, Texas, was sentenced to 30 years in federal prison followed by 30 years of supervised release for various felony offenses related to a conspiracy to traffic women for prostitution.

    “The court’s sentence clearly reflects the seriousness of these awful sex trafficking crimes,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division.  “The victims suffered physical assaults, sexual abuse and daily degradation all because of this defendant’s greed and callous disregard for them as individuals.  We are committed to prosecuting sex traffickers and vindicating victims’ rights, as they were vindicated today.”

    Williams, prosecutors said, operated “adult escort web sites” as part of a human-trafficking scheme that also included money-laundering.

    He “recruited vulnerable women, specifically single mothers from troubled backgrounds, and, in some cases used a combination of deception, fraud, coercion, threats and physical violence to compel the women to engage in prostitution, requiring each young woman to secure a daily quota of money, and if operating out of town, to wire the funds to him,” prosecutors said.

    Crazier By The Moment

    Just when one began to believe that AdLandPro had abandoned its absurd litigation threat against RealScam, guess what’s back? (You’d be right if you guessed the class-action site.)

    And if ads on AdLandPro from “Christian” HYIP peddlers and purveyors of used underwear and illegal, cross-border pharmaceutical sales (after Google had agreed in August 2011 to pay the United States $500 million to settle claims of illegal cross-border solicitations for pharmaceuticals) were not enough, Fiedur’s purported class-action site is quoting a notorious YouTube cyberstalker and raunchy Internet gadfly, positioning him as an authoritative critic of RealScam.com.

    It’s enough to make decent people from all corners of the world cringe as they contemplate whether intellectual corruption as practiced on the web has gained the upper hand.