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Tag: INetGlobal

  • UPDATE: Renner Begins Sentence In Tax Case; INetGlobal Operator Housed In Minnesota

    Steve Renner, the operator of the Minneapolis-based INetGlobal autosurf, is an inmate at the Federal Prison Camp (FPC) in Duluth, Minn., according to the Federal Bureau of Prisons (FBP).

    Renner, 55, was sentenced in May to 18 months for income-tax evasion. He was indicted in September 2008 and convicted in December 2009.

    The Duluth FPC is a “minimum security” facility located at the former Duluth Air Force Base. FPCs have “dormitory housing, a relatively low staff-to-inmate ratio, and limited or no perimeter fencing,” according to the FBP. “These institutions are work- and program-oriented; and many are located adjacent to larger institutions or on military bases, where inmates help serve the labor needs of the larger institution or base.”

    Renner was listed last week as in the custody of the U.S. Marshals Service and “in transit” to an unnamed federal facility. For security reasons, there may be lag time between when a federal prisoner is being transported to a facility and when he or she is listed as an inmate at a specific facility.

    As of this morning, Renner was listed as Inmate No. 14166-041 at FPC Duluth. Renner’s conviction occurred prior to allegations by the U.S. Secret Service that he was operating a Ponzi scheme through INetGlobal and related businesses.

    A federal probe into Renner’s business practices continues. He has not been charged with a crime, and has denied wrongdoing.

  • Prosecution, INetGlobal Strike Interim Agreement That Frees Money To Pay Employees, Insurance Under Court Supervision

    UPDATED 6:14 P.M. ET (U.S.A., JAN. 20, 2011.)

    Employees of an Internet company under federal investigation amid allegations it was operating a Ponzi scheme have received some good news: a sum of $125,000 has been released to pay their past-due salaries and $25,000 has been released to pay their past-due healthcare benefits.

    Meanwhile, $200,000 per month will be released to pay the “ordinary and necessary operating expenses” of INetGlobal and affiliated companies as the probe into their business practices continues.

    News for commission-based affiliates of INetGlobal was not good. No money has been released to pay them.

    Dubbed an “interim agreement,” the release of funds was negotiated by attorneys for both INetGlobal and the government. It will be in effect “until such time as the government files an indictment or information containing forfeiture provisions, a civil forfeiture complaint against the funds seized on February 23, 2010 and in later days, or determines that there shall be no prosecution or forfeiture complaint,” according to the terms.

    The agreement does not mean that INetGlobal no longer is in legal jeopardy.

    A separate action against a San Diego property the government alleged was acquired with fraud proceeds has been suspended under the terms of the agreement. The case against the San Diego property has not vanished; under the terms of the agreement, it is being placed on hold “until the related criminal case or investigation is resolved or, in the event that the government determines that there shall be no prosecution, until the government either files a separate civil forfeiture complaint against the funds which were seized on February 23, 2010 and in later days, or determines that there shall be no prosecution or forfeiture complaint.”

    In February, the U.S. Secret Service said it believed INetGlobal operator Steve Renner was running an international Ponzi scheme. About $26 million was seized in the case.

    Companies covered under the agreement include INetGlobal, Inter-Mark Corp. of Nevada,
    Virtual Payments Systems LLC of Wisconsin, V-Media Marketing LLC of Minnesota, Cash Cards International LLC of Minnesota and SMR Investments #1 LLC of Minnesota.

    NOTE IN BOLD ADDED JAN. 20, 2011: An Indianapolis-based company known as Virtual Payment Systems Inc. has contacted the PP Blog to let it know it is not affiliated with the Renner company Virtual Payment Systems LLC of Wisconsin, which is referenced in the paragraph above.

    SteveRenner.com described the agreement with the prosecution as “an incredible turn of events,” reporting it was “worth millions.” The website also reported that the firm has become “the 1st company ever” targeted in a government investigation to receive money back.

    Prosecutors told the Star Tribune of Minneapolis-St. Paul that the government agreed to the release of funds so employees could get paid. (See link to Star Tribune story below.)

    Payments will be administered under court supervision by a court-appointed attorney, according to the agreement. The agreement calls for the IRS to receive “up to” $650,000 and the Minnesota Department of Revenue to receive “up to” $150,000 for tax payments delayed by the probe. Renner will receive $151,484.75 upon providing “proof that Inter-Mark Corporation and/or V-Media Marketing, LLC and/or Cash Cards International, LLC” owe him that sum.

    Renner, 55, was listed last week as in the custody of the U.S. Marshals Service and “in transit” to a federal detention facility to begin serving an 18-month sentence for income-tax evasion. He was convicted in December 2009 and sentenced in May for actions that occurred prior to the INetGlobal Ponzi scheme investigation.

    Renner-related companies have ties to at least four other Ponzi or investment-fraud cases, according to records.

    Read the Star Tribune story on the interim agreement.

  • INetGlobal Operator Steve Renner In Custody Of U.S. Marshals Service To Begin Sentence In Tax Case

    Steve Renner

    Steve Renner is in the custody of the U.S. Marshals Service, the agency said this afternoon.

    Renner, 55, was the operator of the INetGlobal autosurf. He was convicted of income-tax evasion in December 2009. On May 5, he was sentenced by U.S. District Judge Donovan Frank to 18 months in prison, although Renner was not immediately jailed after sentencing and was given permission to report on a date uncertain.

    His prison term appears now to have begun.

    Renner is listed by the Federal Bureau of Prisons as “in transit” to a federal detention facility. The name and location of the facility were not immediately clear, and the Marshals Service said it could not provide any additional details.

    INetGlobal continues to be under investigation by the U.S. Secret Service amid allegations Renner was operating an autosurf Ponzi scheme. Renner’s tax case was separate from the INetGlobal probe.

    Renner was indicted on the tax charges in September 2008, about a month after the Secret Service raided the Florida headquarters of AdSurfDaily, another alleged autosurf Ponzi scheme.

  • INetGlobal Enters Objection To Magistrate Judge’s Ruling Permitting Government To Approach ‘Current And Former’ Employees In Ponzi Probe

    Steve Renner

    The investigation into the business practices of INetGlobal is turning into a legal slog reminiscent of the AdSurfDaily autosurf Ponzi scheme case.

    In April, attorney Paul Engh filed a motion, saying he represented INetGlobal employees. Among other things, Engh sought an order that effectively would have blocked the U.S. Secret Service from interviewing the employees, as the agency’s Ponzi probe into the company moved forward.

    Engh asserted that, by contacting employees on a cold-call basis, the government was  conducting the investigation “on some federalist notion of superiority or entitled sense of un-accountability.”

    Prosecutors shot back in May, claiming INetGlobal was trying to derail the probe.

    “Mr. Engh indicates that he ‘was hired’ to represent these employees, but refrains from indicating who it was who hired him,” prosecutors said. They added that “many of [Engh’s] purported clients seem to have never spoken with him.”

    On May 28, U.S. Magistrate Judge Franklin L. Noel issued an order that required Engh to compile  “a complete list of the names of current and former Inter-Mark and iNetGlobal employees whom he purports to represent” and permitted the government to continue to contact both current and former employees.

    “Before interviewing current and former employees of Inter-Mark and iNetGlobal, law enforcement shall first ask each individual if he or she is represented by an attorney,” Noel wrote in the order.

    “If the individual responds that he or she is not represented by counsel, the interview may proceed,” Noel continued. “If, however, the individual indicates that he or she is represented by an attorney, law enforcement shall ask that individual for the name of his or her lawyer; at that time, questioning must immediately cease until such a time as the Government’s attorney obtains the consent of the lawyer named, whether Mr. Engh or otherwise, to communicate with the individual ‘about the subject of the representation.’”

    Last week, Engh filed an “appeal from the order,” saying the judge is misinterpreting the law and that INetGlobal employees are entitled to protection from “isolated and surprise contact” by the government.

    In February, the U.S. Secret Service said it believed INetGlobal operator Steve Renner was running an international Ponzi scheme through his affiliated companies that largely targeted Chinese members, including members from Mainland China. No criminal charges have been filed, but the government has seized about $26 million in the case, alleging wire fraud and money-laundering.

    Prosecutors later filed filed a forfeiture complaint against a San Diego property allegedly acquired for $595,000 by Inter-Mark in August 2009 with criminal proceeds from a Ponzi, wire-fraud and money-laundering scheme.

    Inter-Mark is INetGlobal’s Las Vegas-based parent company. INetGlobal operates from Minneapolis. Renner has denied wrongdoing.

    Donald Allen

    In late April, Donald W.R. Allen II, a former Renner employee, said he’d been contacted by the Secret Service and was cooperating in the probe “100 percent.”

    Allen complained that the company had blocked access to a public-affairs Blog he published and that he was being punished by the firm “for coming forward to answer ANY questions the Government has regarding iNetGlobal.”

    Renner then got a restraining order against Allen, asserting that Allen tried to extort $100,000 from the company and had engaged in a pattern of abusive behavior, including raising “havoc” with employees, threatening “to destroy him and his family,” posting libelous and defamatory material on the Internet and engaging in verbal harassment.

    Allen also was accused to taking pictures of Renner’s offices and employees without their consent.

    “[Allen] has attempted to extort $100,000 from Petitioner’s businesses [and] if not paid will go to the FBI and Secret Service,” Renner asserted.

    Allen denied Renner’s claims, saying Renner had made similar extortion claims against Steven Keough, INetGlobal’s former chief executive officer and potentially the government’s star witness in the case.

    Ponzi litigation against assets tied to AdSurfDaily has been under way for nearly two years. The government has been awarded title to tens of millions of dollars seized in the ASD case, but ASD President Andy Bowdoin has filed an appeal.

  • Affiliate Links Show That Surf’s Up Mod And ASD Members Hold High Positions In Upstart Surf: Things To Consider If You Are Tempted To Join AdPayDaily

    Alfred E. Neuman: From Wikipedia.

    Dear Readers,

    We have received a few inquiries about a new surfing program called AdPayDaily (APD). Our initial take is that the program is a dressed-up version of AdSurfDaily, AdViewGlobal, BizAdSplash and AdGateWorld and that the operators are persuaded they’ve found a word combination and legal structure that will neutralize critics and law enforcement should concerns about the sale of unregistered securities and a Ponzi and pyramid scheme be raised.

    AVG, BAS and AGW were positioned by former ASD members as offshore “clones” of ASD. APD, like ASD, appears to be operating in the domestic United States.

    In our view, APD’s presentation raises numerous red flags. At a minimum, it is starting out as an MLM absurdity, if not a potential monstrosity. To get a flavor of the absurdity, imagine that Walmart was clueless enough to start an autosurf and provide a corporate-approved greeter who says, “Welcome to Walmart Pay Daily. We count all the money out of sight in the back room at midnight to determine how much you get, and keep 50 percent of the cash for ourselves. Don’t worry. We have excellent lawyers, and we’ve instructed the money-counter not to rip you off.”

    That’s effectively what APD is saying.

    Another red flag is the fax number listed on a document APD refers to on its website as “Ad Pay Daily’s Conference Registration Form For July 30th and 31st 2010.” The fax number is listed online as a number used by a Kansas real-estate flipping company billed as National Flips. Like APD, the National Flips domain registration is hidden behind a proxy, although the website says this: “To learn how to become a Hard Money Lender and earn 30+% per annum, call [a telephone number] . . .”

    Meanwhile, the invitation for the APD conference that uses the National Flips fax number says this — not once, but twice: “Any person who does not provide photographic proof of identity will not be permitted to attend this event, so don’t forget your photo ID.”

    Why a photo ID would be required to attend a sales pitch for an advertising company is left to the imagination. Undercover Secret Service agents have been known to attend such functions, however.

    Virtually every autosurf that has come along has used strange approaches or applied language tweaks designed to skirt securities laws, disarm critics and sanitize the “opportunities” for prospects. Serial autosurf promoters are infamous for telling prospects that a particular surf has found the magic pill that makes everything legal. Historically they rely on the surf operators to provide a legal cover. When things go south, they claim no one can blame them for promoting the schemes. After all, they relied on the assertions of the operators that everything was above-board and legal. They have been disingenuous in the same way that Alfred E. Neuman, Mad magazine’s fictional mascot, was disingenuous.

    “What, me worry?”

    Worry, however, appears to be front-and-center at APD, which is preemptively denying in multiple places that it is a Ponzi scheme. This strikes us as a big red flag. There are others.

    ASD, Surf’s Up Members Become APD Players

    During its early research into APD, the PP Blog has determined that a number of members of the alleged AdSurfDaily autosurf Ponzi scheme have high positions in the APD venture. Some of the former ASD members hold more than one position in the top 80 positions in APD, including a former Surf’s Up Mod who appears to hold positions 76 and 77. It is possible that another Surf’s Up Mod also is high up in the pecking order of APD affiliates at No. 56.

    The Blog determined the names of APD promoters by researching the method by which APD creates affiliate links. At least one ASD member who made himself part of the ASD Ponzi litigation by submitting pro se pleadings holds positions 9 and 10 in APD, according to the affiliate links.

    Surf promoters are not fond of pointing out the pain of previous prosecutions of autosurfs and the time-consuming and expensive litigation involving both the government and court-appointed receivers that may occur when a surf collapses. It is not uncommon for millions of dollars to go missing in a surf.

    ASD’s Andy Bowdoin has told members that he has spent more than $1 million in his legal defense. Nothing (other than GIGO passed along by promoters) suggests Bowdoin was a man of means prior to the Secret Service raid on ASD’s headquarters in August 2008. His money for his defense appears to have come from ASD members. On a side note, Bowdoin tried to persuade members in September 2009 that the million dollars he dropped to keep himself out of prison was for their benefit. At the same time, he claimed his fight with the government was inspired by a former Miss America.

    ASD gathered at least $65.8 million. When the sum seized in the Golden Panda Ad Builder action, which is part of the ASD litigation, is factored in, the number surges to more than $80 million. That’s a big number, of course — one that shows why others want to start surfs and just tweak and tweak and tweak in search of the elusive magic pill.

    APD’s website was registered on Nov. 18, 2008. That’s just one day before U.S. District Judge Rosemary Collyer ruled that ASD had not demonstrated it was a lawful business and not a Ponzi scheme. APD’s domain-registration date also coincides with a string of registration dates by the so-called ASD clones:

    • Aug. 18, 2008: Domain name for AdGateWorld registered. (About two weeks after the ASD raid by the U.S. Secret Service, which is working in concert with the IRS and federal prosecutors.)
    • Sept. 22, 2008: Domain name for AdViewGlobal registered. (AVG had very close ties to ASD.)
    • Nov. 7, 2008: Domain name for BizAdSplash registered. (ASD and Golden Panda figure Clarence Busby purportedly was both the “chief consultant” and owner of BAS.)

    APD’s domain was registered just 11 days after the BAS domain was registered and only a couple of weeks before ASD declared that the now-defunct Surf’s Up forum was its official organ for ASD news. Surf’s Up became infamous for shilling for Bowdoin, fracturing the facts of the ASD wire-fraud and money-laundering case and misinforming members.

    Each of the surfs in the bullet points above failed spectacularly. Each of them blamed members for their problems. Each of them had promoters and members in common with ASD. Each of them also offered various “bonuses” to join — something APD is doing at the moment.

  • KABOOM! Alleged Commodities Ponzi Scheme Run By Mexican Nationals On U.S. Soil Dumped Money Into TWO Other Failed HYIP Fraud Schemes, Investigators Say; Ruben Gonzalez, Jose C. Naranjo Charged By CFTC

    UPDATED 10:17 A.M. EDT (May 25, U.S.A.) It has been another nasty day for the HYIP and autosurf “industries” and their apologists. Investigators have charged two Mexican nationals with operating a Ponzi scheme on U.S. soil. The alleged scheme, which used names such as New Golden Investment Group LLC (NGI), NGI Group LLC, New Golden Management, New Golden Entertainment LLC, Grupo NGI International Inc. and NGI International Inc., targeted Latinos in Greater Los Angeles, authorities said.

    Charged by the CFTC is the case were the companies and their operators, Ruben Gonzalez of West Covina, Calif., and Jose C. Naranjo of La Mirada, Calif. Both men are Mexican nationals. Their ages were not immediately known. Gonzalez was jailed in October on immigration charges, authorities said.

    Gonzalez also has been indicted on criminal charges of mail fraud and wire fraud, the CFTC said.

    The alleged NGI scheme has ties to other fraud schemes, including the Traders International Return Network (TIRN) scheme and the alleged Finanzas Forex scheme, authorities said. Criminal charges have flowed from the TIRN scheme, and the Finanzas Forex scheme — allegedly part of an international scheme known as Evolution Market Group (EMG) — has resulted in allegations that proceeds from the EMG scheme found their way into bank accounts seized by the U.S. Drug Enforcement Administration in a narcotics investigation in Arizona.

    Meanwhile, the TIRN scheme, which operated from Florida and claimed a presence in Panama, also has a tie to the alleged INetGlobal autosurf Ponzi scheme. Both TIRN and INetGlobal used the same debit-card company to pay members, according to court filings.

    Gonzalez and Naranjo gathered $3.65 million in the NGI scheme beginning in August 2008, dumping at least $100,000 into TIRN and $290,000 into Finanzas Forex, the CFTC said. All of the money appears to have been misappropriated, with Gonzalez transferring “at least” $260,000 from NGI member funds to his personal bank account and Naranjo transferring “at least” $267,000 from NGI member funds to his personal bank account.

    About $62,000 transferred into Naranjo’s bank account was withdrawn in cash, the CFTC said.

    The men “used investor funds to purchase a Mercedes-Benz, airline tickets, various other retail items and to make payments on a home,” the CFTC said.

    It is possible that as much as $1 million was directed at Finanzas Forex, the CFTC said.

    Gonzalez and Naranjo tricked investors by making them believe NGI was a real commodities-trading business.

    “Gonzalez, Naranjo and NGI falsely presented NGI as a successful trading company by displaying trading software on NGI’s office computers to make it appear to customers and prospective customers that NGI was engaged in electronic commodity futures trading,” the CFTC said.

    In reality, “NGI did not trade commodity futures for customers and did not make any of their advertised profits. Instead, Gonzalez and Naranjo allegedly ran a Ponzi scheme using new investor money to pay purported profits to existing investors,” the CFTC said.

    Part of the NGI sales pitch was similar to the sales pitch of yet another Ponzi scheme: the Learn Waterhouse scheme, which operated from California and also has a tie to INetGlobal, according to court records.

    INetGlobal operator Steve Renner provided payment-processing services for the Learn Waterhouse Ponzi scheme through an entity known as Cash Cards International, according to court records.

    Learn Waterhouse talked about purported investments in “gold” in Mexico. According to the CFTC complaint in the NGI case, NGI did the same thing, falsely claiming to customers that “they would double their money within a year in oil, gold, silver and other commodities.”

    NGI stopped making payments to investors in about June 2009, the CFTC said. At least 165 investors were affected.

    Gonzalez and Naranjo told customers that the payments stopped because a bank in Mexico was holding the funds and refused to release them. The men then told investors to have patience because a new deal involving oil was on the horizon and that investors who left their money with NGI son would have “huge” profits, the CFTC said.

    Investors were encouraged to fund accounts with money from credit cards or retirement savings, the CFTC said.

    NGI had been operating since about August 2008, according to records. That’s the same month INetGlobal was coming onto the autosurf stage, and AdSurfDaily was exiting the stage.

    The U.S. Secret Service said it believed both INetGlobal and AdSurfDaily were operating Ponzi schemes.

  • KABOOM! Agents Tie Alleged ‘Evolution Market Group’ Ponzi And HYIP Fraud Scheme To Narcotics Case In Arizona; Tens Of Millions Of Dollars Seized; Firms Promoted On ASA Monitor, TalkGold Forums

    Kaboom! It has happened again. Explosive court filings by the government show that kneejerk apologists and defenders of High Yield Investment Programs (HYIPs) and autosurfs are quickly running out of cover when they assert that anything is noble or even real about the programs they relentlessly push for their share of purported profits from introducing others to the schemes.

    A law-enforcement task force consisting of the U.S. Secret Service, the IRS and veteran investigators from other agencies that specialize in reverse-engineering complex money-laundering networks have tied funds from a widely promoted online HYIP to the international narcotics trade and a murky money-services business. Research shows that the program and offshoots could have gathered between $100 million and $200 million before the wanton criminality was exposed after exhaustive investigations. The program was advertised as lucrative and harmless on the Ponzi-friendly ASA Monitor and TalkGold forums.

    Research by the PP Blog suggests the purported investment program was so sordid that promoters even claimed some of the funds were being used for the “humanitarian” purpose of assisting kidnapping victims in Colombia. In a sickening display of marketing theatrics, a claim was made that investors could “adopt” kidnapping victims for a payment of $1,000 and that the company would set aside $500 in corporate funds for each victim so that their families could have bright futures if the victims ultimately were released by their captors.

    The HYIP scheme allegedly was associated with an entity known as Evolution Market Group (EMG), which purportedly had a Forex component known as FinanzasForex. Investigators alleged in January  that there were schemes within schemes in a tangled web of domestic and international deception that featured dozens of bank accounts, shell companies and various fronts for money-laundering enterprises, including companies purportedly in businesses such as real estate and car washes.

    The scheme was so corrupt, according to court filings, that some investors were told that, in order to leave the program whole, they had to recruit new investors, have the new investors pay them directly — and use the proceeds from the new investors to “recover” their initial outlays.

    Members of the same Florida-based task force also are involved in the AdSurfDaily autosurf Ponzi scheme investigation. In the ASD case, records show that the company once advertised a debit card federal prosecutors in Connecticut say was offered by a Dallas-based firm that laundered money for a narco business in Medellin, Colombia. The Dallas firm, known as Virtual Money Inc. (VM), also agreed to launder purported drug proceeds in the Dominican Republic, according to court filings.

    Robert Hodgins, the operator of VM, is now an international fugitive wanted by INTERPOL.

    ASA and TalkGold are infamous for promoting international financial frauds, with posters routinely describing the programs as legitimate. The very first post about the alleged EMG scheme at ASA referenced yet another Ponzi scheme — 12DailyPr0 — and informed prospects that they could earn commissions by introducing the alleged Forex component of EMG to others.

    “I have been in internet business for 3 years now and in autosurf industry from 12dailypro,” an ASA poster began, while promoting EMG’s Finanzas Forex arm, which investigators now say was part of a grandiose scheme with tentacles in Central America, South America and Europe.

    “And the (sic) you can earn also money from people under you if you want, you get 0,5% (sic) from every one that you bring (0,5% (sic) from his investment),” the poster said in April 2008.

    Court filings in the EMG case paint a picture of an incredibly elaborate maze of companies and bank accounts set up to confuse both investors and law enforcement. At least 59 bank accounts, 294 bars of gold and nine luxury vehicles have been seized in the case. One of the cars was a 2008 Lamborghini Murcielago valued at more than $430,000.

    The EMG allegations are explosive because they showcase the now-undeniable fact that people who promote programs such as HYIPs and autosurfs because such programs may pay “commissions” to recruit new members may be operating as fronts or conduits for international drug dealers and money-launderers.

    Although ASD is not mentioned in a Task Force affidavit in the EMG case, forfeiture complaints against assets tied to both companies include similar allegations of wanton, relentless fraud. Compellingly, EMG allegedly sponsored “rallies” of members, an allegation in common with allegations in the ASD case. At the same time, research suggests that EMG touted offshore events in exotic locations.

    AdViewGlobal, an autosurf with close ties to ASD, also touted offshore venues and once sponsored at least one meeting on a ship at sea, according to members.

    Meanwhile, research suggests that both EMG and ASD went to great lengths to mask the schemes just prior to interventions by law enforcement and that both schemes had ties to narcotics traffickers and professional money-launderers.

    Both the alleged EMG and ASD schemes were operating during the same general time period, roughly between 2006 and 2008, according to court filings. Each of the schemes had components of investment fraud that targeted people who spoke Spanish or English. Task Force agents have been investigating entities and individuals linked to EMG since June 1, 2008, including a mysterious entity known as DWB Holding Co.

    “The conspiracy to commit wire fraud offenses that gives rise to this action is an international Ponzi/Pyramid scheme operated by Evolution Market Group (EMG) d/b/a Finanzas Forex, DWB Holding Company (DWB), Superior International Investments Corporation (SIIC), German Cardona (Cardona), Daniel Fernandez Rojo Filho (Rojo Filho), Pedro Benevides (Benevides) and others in which investors have been defrauded out of millions of dollars,” federal prosecutors said.

    Federal agencies, including the U.S. Drug Enforcement Administration (DEA), seized “financial accounts” in DWB’s name during a drug investigation in Arizona, according to court filings in Florida. One account seized during the drug probe contained more than $24 million. The money was seized on Aug. 22 and Aug. 26, 2008, about three to four weeks after agents seized more than $80 million in the ASD case.

    A section of U.S. law referenced in the EMG forfeiture complaint refers to “cocaine” and “marihuana,” among other drugs.

    As the investigation progressed, agents established additional money-laundering links — and other bank accounts were seized, according to court filings. The precise mechanism by which purported investment money ended up in accounts seized in the drug case was not immediately clear.

    Shameful Behavior By HYIP And ‘Surf Advocates

    Still promoting autosurfs and HYIPs? Still selling yourself on the delusional theory that they’re harmless and that only “Socialists” or “Nazis” would support the government’s efforts to destroy them? Still arguing that journalists who write about the cases are “liberal” lackeys, have no understanding of the “real” issues and won’t be pleased until every single American entrepreneur is assigned an individual bureaucrat to make their lives miserable?

    Still calling for federal prosecutors and Secret Service agents to be investigated because you love your downline commissions gleaned from Ponzi proceeds and the sale of unregistered securities, don’t want to part with them and figure that, if only you scream loudly enough and long enough, you’ll be able to persuade your fellow Americans that the cops are the real crooks?

    In August 2009, the PP Blog reported that members of ASD, which is implicated in an autosurf  Ponzi scheme involving tens of millions of dollars, advertised that the company used the debit-card services of VM in Dallas. Research suggests that Hodgins or a VM designate attended an ASD function in Florida shortly after ASD’s launch in late 2006.

    Prosecutors said that VM helped the Colombian drug operation offload at least $7.1 million in illegal proceeds at automated teller machines in Medellin. Medellin once was home base of the infamous Medellin Cartel, operated by drug lord and terrorist Pablo Escobar. Escobar was killed by Colombia National Police in 1993.

    Escobar was implicated in the assassination of Colombian presidential candidate Luis Carlos Galán and the bombing of Avianca Flight 203 over Colombia, which killed 110 people.

    Autosurf and HYIP promoters long have claimed that participation in the illegal enterprises is harmless. The indictment against VM — and the allegations that it laundered money for a Colombian drug organization — demonstrates the dangers of participating in murky businesses in which participants have no way of knowing what is in the hearts and minds of other participants.

    It was not immediately clear how long ASD used the VM debit card, which was heavily promoted in early 2007 when ASD said it was having cash-flow problems. By 2008, ASD said it was generating tens of millions of dollars of revenue per week. Some members said they observed huge sums of cash and brief cases full of cashier’s checks at ASD rallies in Florida cities.

    Two Colombian conspirators “directed their agents in the United States to provide proceeds of sales of controlled substances to agents of VIRTUAL MONEY, INC. to be sent to Colombia so the proceeds could be made available to the clients,” according to the indictment against Hodgins.

    VM “stored value cards were used by the members of the conspiracy to make available at a Daviviendo Bank ATM in Medellin, Colombia the peso equivalent of US $2,430,810.24 in April 2006; US $2,437,023.53 in June 2006; and US $2,257,761.45 in August 2006,” prosecutors charged.

    VM and its president, Robert Hodgins, were indicted under seal in 2008 in a case brought by the DEA. The seal was lifted in September 2008, a month after the U.S. Secret Service seized 15 bank accounts in the ASD case.

    ASD was accused by the Secret Service of operating an international Ponzi scheme.

    One of the alleged components of the ASD scheme was an autosurf named LaFuenteDinero, which targeted people who spoke Spanish. Records show that one of the Secret Service agents involved in the ASD investigation formerly was a member of a DEA Task Force in Florida and was experienced in “investigating large criminal organizations that distributed and sold controlled substances.”

    In November 2009, the PP Blog reported that the Secret Service expressed a fear in court documents originally filed under seal that ASD President Andy Bowdoin had become aware of scrutiny into his business affairs in 2008 and planned to flee the United States.

    “Based [on] ASD’s indication that it intends to cease accepting funds into [Bank of America] at the end of July 2008, Bowdoin’s indication that he has relinquished his interest in Golden Panda [Ad Builder], and an indication that Bowdoin intends to establish his offshore presence, and the recent complaints governmental authorities have received, I believe that Bowdoin is aware of increasing scrutiny and that he intends to move himself, his proceeds, and, until it collapses possibly his operation, offshore,” the Secret Service wrote in an affidavit.

    Golden Panda was the purported “Chinese” arm of ASD, according to court filings.

    The agency said Bowdoin had moved millions of dollars into Canada just prior to the seizure of his assets.

    Read a warrant originally issued under seal Aug. 1, 2008, by U.S. Magistrate Judge Alan Kay, who ordered the U.S. Department of Homeland Security to seize a Bowdoin bank account that contained more than $31.6 million. The entire sum was in an account under Bowdoin’s name. Agents eventually seized at least nine other Bowdoin accounts that, in the aggregate, contained more than $34.2 million.

    In recent days, the PP Blog  reported that the alleged INetGlobal autosurf Ponzi scheme in Minnesota, which allegedly targeted Chinese prospects,  had ties to at least three other Ponzi cases, including ASD and a separate Florida case in which it was alleged that the same debit-card company that provided services for INetGlobal provided services for a company implicated in a $22 million Ponzi scheme with ties to Panama.

    Some INetGlobal members provided Chinese prospects instructions on how to offload profits onto debit cards that could be used to withdraw cash at ATM machines, according to promotional material for INetGlobal. About $26 million has been seized in the INetGlobal case.

    INetGlobal-related entities such as Cash Cards International (CCI) and V-Cash now have been linked to a fourth financial-fraud scheme known as Megafund. In the $13 million Megafund case, it was alleged that CCI and V-Cash provided services for certain participants in the Megafund HYIP scheme. At least $175,000 purportedly transferred by a mysterious entity known as MexBank S.A. de C.V. passed through CCC and V-Cash, according to court filings.

    The money was described in court filings as commission payments for the Megafund scheme. Authorities later determined that MexBank was “neither a bank nor a legitimate financial institution licensed” in Mexico, despite its official-sounding name.

    Bradley C. Stark, one of the defendants in the Megafund case, was convicted in 2003 of possessing counterfeit government securities. He was released from prison and was on probation while participating in the Megafund scheme, according to court records. The scheme targeted Christians, and investors were told money was being directed to humanitarian causes.

    Forbes magazine wrote about the Megafund case in July 2005, in a story titled “Too Good To Be True.”

    Less than four years later, the AdViewGlobal autosurf sent an email to members that included Forbes’ logo in a sales pitch. Research showed that the logo had been hotlinked from Forbes’ website and that AdViewGlobal members were attempting to create the appearance that the famous publishing company had endorsed the autosurf scheme. Like the Megafund and EMG schemes, participants in AdViewGlobal were told a portion of the money was devoted to humanitarian causes, including a purported fund devoted to preserving the rainforest.

    In the AdSurfDaily case, members said the company touted a contribution of 100,000 “ad packs” to a charity. The donation was used by promoters to position Bowdoin as a benevolent human being.

    At an ASD rally in Las Vegas in 2008, Bowdoin asserted that he thanked God daily for making him a “money magnet,” and he implored members to imagine themselves coming into large sums of money through rebates on ASD advertising purchases that not only would return 100 percent of the cost of the members’ advertisements, but also pay them at least 25 percent beyond that — more if they rolled over a percentage of their purchases.

    The payment-processing arm of INetGlobal also has been tied to a Ponzi scheme known as Learn Waterhouse, which purportedly advertised a presence in Mexico, according to court filings. Four people have been sentenced to lengthy prison terms in the Learn Waterhouse case, some of the underpinnings of which led to the successful prosecution of INetGlobal operator Steve Renner for income-tax evasion in December 2009.

    Filings in the Learn Waterhouse case assert that Renner, who operated both CCI and V-Cash, used customers’ funds as though they were his own.

    When the Learn Waterhouse receiver tried to reclaim the funds to make Ponzi victims as whole as possible, the money was not available because Renner had spent it on personal purchases, according to court filings.

    If you are playing the HYIP and autosurf games, the PP Blog suggests you read these documents from the alleged EMG Ponzi case.

    Task Force affidavit.

    Amended Forfeiture Complaint in U.S. District Court in Orlando.

    Still want to cheer for the HYIPs and autosurfs?

  • Debit-Card Firm Spotlighted In Purported Training Material For Minnesota-Based INetGlobal Was Referenced In $22 Million Ponzi Case In Florida Last Year; Renner Company Now Has Link To Third Ponzi Court Scrape

    Part of the purported INetGlobal training material on how to transfer money to a debit card. (Red bar added to screen shot by PP Blog to block account number.)

    Training material purportedly produced in November 2009 and published online shows prospects of INetGlobal how to transfer money from the company to a reloadable debit card. The presentation reveals that INetGlobal was using the same debit-card firm that provided services for a Florida man implicated in October 2009 — just a month before the INetGlobal training material purportedly was produced — in an alleged international fraud scheme that gathered at least $22 million and made Ponzi payments to members via debit cards.

    The training material is confusing in places, and the form in which it was published suggests that some INetGlobal members with Chinese names shared information to recruit Chinese prospects.  At the same time, the training material and other information accessible at the same website suggests Chinese members also worked together to create instructional materials that showed other Chinese members and prospects how to offload their profits in cash at ATM machines and receive $300 sign-up bonuses that may not have been available to all INetGlobal members.

    It is possible that a single member or group of members created the training material and the companion information. Whether the material, which does not purport to be hypothetical and appears to include no disclaimer language, used the names of real members was unclear. Also unclear is whether the approach had the approval of INetGlobal. What is clear is that the information was published openly online and purportedly reflects INetGlobal financial transactions that occurred among Chinese members in November 2009.

    A “Contact” address on the website that published the information lists a street address in British Columbia, even though the domain itself lists a registration address in Mainland China. The British Columbia street address returns a page in Google search results that purports to lay out a conspiracy case against judges in Canada for issuing unfavorable rulings in what appears to be a matter unrelated to INetGlobal.

    Just two months earlier, in September 2009, some Clickbank vendors were complaining that links to their businesses were being placed in INetGlobal’s advertising rotator without their knowledge. The Clickbank vendors also complained that INetGlobal was passing along bandwidth costs to them and that their businesses were experiencing a surge in unproductive traffic from China.

    The author of the training document on debit cards was listed as Annie Zhang, according to the “Properties” of the document, which was published in PDF format.

    The training document was published on a website whose domain-registration address was listed as “Xian, Shanxi  . . . China.” The domain on which the information was published was registered to Jun Zhang. The website encourages prospects to submit their email address and wait to receive a return email “to get a referrer ID and referrer name that you will need in the registration process.”

    Visitors to the website registered in China are told that, by registering for INetGlobal in this fashion, they can “Make Free Fast Money $300 Right Now.” The site instructs viewers to purchase a “$2000 Executive Business Package,” provide proof of the purchase by return email and wait to receive their bonus.

    “We will send $300 free fast money to your V-Cash account,” the site tells viewers. “If you prefer, we can send $300 to your PayPal account too!”

    Another URL at the same domain instructs prospects on how to register for a Clickbank account to promote products through INetGlobal. The instructions are available in multiple languages, including English, Chinese and Japanese.

    The debit card featured in the PDF training material on the website registered in China is known as the “Exclusive One” card and is issued by Anres Technologies Corp. of Las Vegas. The Exclusive One card is pictured in the INetGlobal training material, and Anres’ name is referenced in court filings by the U.S. Secret Service in the INetGlobal case.

    Anres’ name also is referenced by the SEC in a case filed last year in Florida against David F. Merrick, Traders International Return Network (TIRN), MS Inc., GTT Services Inc., MDD Consulting Inc. and Go ! Tourism Inc. Merrick and the companies were accused of running a Florida-based Ponzi scheme that used debit cards and claimed a presence in Panama.

    Among the claims in the SEC case was that “Merrick and TIRN falsely represented that investors requesting a withdrawal of funds would receive a debit card loaded with their initial investment and return on their investments, when, in fact, the money loaded on the cards was money from other investors,” according to the SEC.

    The PP Blog wrote about the TIRN case on Oct. 15, 2009.  Millions of dollars were moved across borders, the SEC said.

    “[A]t least $2.3 million of investor funds were transferred to accounts in Panama, Mexico, Malaysia, Switzerland and the Netherlands,” the SEC said. It added that about $8.8 million was placed on debit cards to make Ponzi payments to members..

    Although TIRN was not an autosurf, debit cards have become increasingly popular in the autosurf universe. The TIRN case demonstrated that alleged fraudsters were relying on debit cards to pull off international financial schemes.

    Anres was not named a defendant in either the TIRN case or the emerging INetGlobal case. The company has not been accused of wrongdoing.

    In recent months, the FBI has expressed public concerns that criminal organizations were turning to preloaded debit cards to launder money and that users were taking advantage of a “shadow” banking system.

    Card Highlighted In Instructional PDF For INetGlobal

    The purported INetGlobal training material appears in a PDF that includes screen shots. The person (or persons) who assembled the material appear to have Chinese names, and the English-language material walks prospects through the process of converting electronic credits to cash that can be loaded onto an Exclusive One debit card and withdrawn at ATMs.

    In February, the Secret Service said it believed INetGlobal was targeting Chinese members in an international Ponzi scheme. The purported training material lists IP addresses in the United States and Canada in a manner that suggests Chinese members in both countries were working together to train other Chinese members how to offload profits onto debit cards and also how to transfer money using INetGlobal’s internal system from one Chinese member to another.

    Among the assertions against INetGlobal by the U.S. Secret Service was that the company was engaging in wire fraud and money laundering. The IRS now has entered the case, which suggests that the government also suspects tax crimes.

    Material Suggests Account-Sharing And Cross-Border Planning

    The second page of the 18-page PDF purportedly shows the back office of an INetGlobal member who appears to have a Chinese name. This page lists the member’s name as “Dong,” lists a five-digit INetGlobal member number, a six-digit V-Cash account number and an IP address that comes back to Minneapolis. The page notes that automatic repurchasing of additional “adpacs” was enabled and set for 50 percent. Viewers were prompted to click on a tab labeled “V-Services.” In the next step, viewers were prompted to click on a graphic labeled “V-Cash Online Payment Services.”

    This page forwarded to another prompt to click on a V-Cash logo, which led to a login screen that prompted members to enter a user ID and a password. A “Welcome” screen followed, and members were instructed to click on a tab that prompted them to go to the “Member Center.”

    Once inside the Member Center, members were prompted to click on a tab labeled “V-Cash.” This led to a screen that prompted them to enter a password for their V-Cash accounts. The next screen shot showed that V-cash was logging members’ IP numbers; the IP number logged in this screen shot came back to Toronto. Why the shot displayed a Toronto IP when the earlier shot displayed a Minneapolis IP was unclear.

    The Exclusive One Card, as pictured inside the training material.

    The next screen shot prompted members to click on a tab labeled “balance.” This screen noted a “Currency balance” of more than $3,038 in the account. The next screen was confusing because the currency balance had been lowered by $200. Why the balance was lowered was not made clear in the presentation.

    In the next screen shot, the presentation provided the initial instructions on how to transfer money to the Exclusive One card, which is pictured in the document. This screen shot also purported to show that members could transfer money from their V-Cash accounts to other V-Cash accounts from within the company’s internal system. The presentation prompted viewers to select the option to transfer money to the Exclusive One card and press “Continue.”

    Thereafter, the presentation showed a purported transfer of $2,000 to the Exclusive One card. The presentation noted a $30 fee incurred when making the transfer. The fee rate for the transfer service was described as 1.5 percent. The screen shot noted that the total amount transferred, including the $30 fee, was $2,030. Viewers were prompted to “Click to Confirm” the transfer.

    Part of purported INetGlobal traning material. (Red bars added to screen shot by PP Blog to block account numbers.)

    One of the screen shots that followed purported to show a “History” of transfers to and from the account. One of the transfers showed a purported transfer “from” Annie Zhang to an INetGlobal member in the amount of $3,000. It was dated Nov. 3, 2009.

    A person named Annie Zhang purportedly is one of INetGlobal’s top recruiters. Some promos for the firm have asserted Zhang was making $100,000 a month as an affiliate of INetGlobal.

    Parts of the PDF presentation are confusing. For example, the member’s name that appears on the second page of the presentation does not agree with the member’s name that appears on Page 6 — even though the INetGlobal member account number appears to be the same, as does the V-Cash account number.

    On Page 2, the member’s name is listed as “Dong” with an IP number that comes back to Minneapolis. On Page 6, however,  the screen welcomes a member named “Lei.”  An IP shown on Page 9 comes back to Toronto — not Minneapolis.

    In the document’s published form, both Dong and Lei appear to have the same 5-digit INetGlobal number and the same six-digit V-Cash account number. Why two purported INetGlobal members would have the same account numbers is unclear.

    INetGlobal Now Has Links To Three Ponzi Cases

    In February and March court filings, the U.S. Secret Service linked INetGlobal to the alleged AdSurfDaily Ponzi scheme, alleging that an undercover agent was introduced to INetGlobal by an ASD member. The Secret Service brought the Ponzi case against ASD in August 2008.

    The appearance of the Exclusive One card in the purported INetGlobal training material links INetGlobal to a second Ponzi court scrape: the SEC’s case against the alleged David Merrick/TIRN Ponzi scheme, which appears to have used the same debit card as INetGlobal to pay members. The CFTC also filed allegations against TIRN, and the U.S. Attorney for the Middle District of Florida also is investigating TIRN.

    Separately, INetGlobal operator Steve Renner was linked to a Ponzi scheme known as Learn Waterhouse in 2004. A company Renner operates — Cash Cards International (CCI) — provided payment-processing services for the Learn Waterhouse scheme, and Renner himself purportedly was an investor in the scheme, according to court filings.

    Four of the scheme’s operators were sentenced to lengthy prison sentences in the Learn Waterhouse case. (If you have the time, the PP Blog highly recommends you read this document from the U.S. Court of Appeals for the Ninth Circuit, denying appeals in the case.)

    The document recounts the history of the case, including astonishing allegations that Learn Waterhouse told investors that it “had invested $2 billion in a gold mine in Mexico, and [was] working on a billion-dollar Columbus-era ‘find’ on the bottom of the ocean.”

    Renner was alleged to have provided payment-processing services for Learn Waterhouse through CCI and to have spent investors’ money on personal purchases.

    Randall Treadwell, the ringleader of the Learn Waterhouse scheme, “often claimed that he had a God-given ability to make money, but in hindsight it appears that his talents lay in extracting funds from duped investors,” according to court filings.

    Indeed, according to filings in the Learn Waterhouse case, the “purported investments
    did not exist at all.

    “By the time the defendants’ far-reaching Ponzi scheme collapsed, more than 1,700 investors throughout the United States had lost their investments. At trial, the defendants produced no evidence to suggest that any investment profit was generated by their companies.”

    Losses in the Learn Waterhouse case totaled at least $44 million.

  • PROSECUTION: INetGlobal Trying To Derail Probe By Hiring Attorney To Block Agents’ Access To ‘Potentially Adverse Witnesses’ Among Employee Ranks; Assertion That One Attorney Can Represent All Workers ‘Outlandish’

    Federal prosecutors say they believe INetGlobal and its parent company — Inter-Mark Corp. — hired an attorney for employees to derail a criminal probe into the companies’ business practices by muting the voices of workers who could become witnesses in the case.

    Prosecutors made the dramatic claim in response to INetGlobal’s request last week for a court order that would prevent the U.S. Secret Service and other law-enforcement agencies “from contacting these represented individuals and requesting interviews.”

    No attorney-client relationship exists between the workers and attorney Paul Engh, prosecutors argued.

    “Mr. Engh indicates that he ‘was hired’ to represent these employees, but refrains from indicating who it was who hired him,” prosecutors said. They added that “many of [Engh’s] purported clients seem to have never spoken with him.”

    Engh argued last week that government agents were approaching employees “on a cold-call basis, at [employees’] homes, at night or in the early morning hours, and all without notice to counsel.” He added that the government appeared to be ignoring his duty as counsel to INetGlobal employees “on some federalist notion of superiority or entitled sense of un-accountability.”

    Nonsense, the government said.

    “The United States opposes these outlandish claims of sweeping representation, and respectfully asks the Court to deny the pending motion for a protective order,” prosecutors said. “On May 4, 2010, the corporate targets made clear what lies behind Mr. Engh’s motion. The companies joined in the motion for a protective order . . . and quite candidly admitted that they have done so because ‘statements taken by the government could be used against IMC (InterMark Corporation) in subsequent proceedings.

    “This, of course, crystallizes the motive behind the motion for a protective order,” prosecutors asserted.

    Minnesota-Based Case Takes California Swing

    The prosecution’s move occurred against the backdrop of a revelation Tuesday by the defense that the government had filed a forfeiture complaint March 15 against a San Diego property allegedly acquired for $595,000 by Inter-Mark in August 2009 with criminal proceeds from a Ponzi, wire-fraud and money-laundering scheme.

    Inter-Mark lists Las Vegas as its home; INetGlobal and other related companies operate from Minneapolis.

    A Secret Service agent alleged that the San Diego property was acquired with funds from INetGlobal advertisers in a multistep transaction in which credit-card payments from customers were funneled through at least three Inter-Mark bank accounts to pay for the building, which is situated near a beachfront and bay.

    Court records suggest that INetGlobal has known about the forfeiture action since at least April 19, leading to questions about whether the firm withheld the news about the action from the membership at large for at least 15 days in a bid to prevent its support base from eroding. The forfeiture case is proceeding on a litigation track separate from the probe into INetGlobal operator Steve Renner’s business practices.

    In February, the Secret Service said it believed Renner was operating an international Ponzi scheme through his affiliated companies that largely targeted Chinese members, including members from Mainland China. No criminal charges have been filed, but the government has seized about $26 million in the case, alleging wire fraud and money-laundering.

    Prosecutors said Thursday that the probe into Renner’s business practices was continuing and that the government was “carrying out its constitutional obligation to ‘take care that the laws be faithfully executed’ . . . by investigating credible allegations of serious criminal conduct.”

    Whether INetGlobal members at large knew about the building in San Diego remains unclear. At least one prominent supporter of the firm said she did not. She added that she did not believe it was a crime to expand a business and open a branch in California, but the government never alleged that opening a legal business was a crime.

    The allegation against Inter-Mark in the forfeiture case was that it used criminal proceeds to purchase the building and that the building itself was the proceeds of a crime.

    On Thursday — in a filing peppered with the words clients and client encased in quotation marks in what might have been a bid to highlight an emerging theory that the other side was trying to pull the wool over the eyes of both INetGlobal employees and the court, prosecutors said the legal approach chosen by the Renner companies could backfire because the employees Engh says he represents could have competing legal interests. (Emphasis added.)

    “The potential for conflicts of interest also does not seem to have been considered in any depth by the corporation,” prosecutors said. “The motion filed by Mr. Engh is silent as to what course of action he will follow should one of his ‘clients’ implicate another ‘client’ in wrongdoing, or what he will do when one ‘client’ directs him to negotiate favorable terms with the government under which the first client may impart information that may incriminate other ‘clients.’

    “The lack of planning for these eventualities is itself circumstantial evidence that this blanket assertion of representation is more strategic than real,” prosecutors argued.

    The legal situation confronted by INetGlobal’s 70 employees perhaps is analogous to a hypothetical case in which a corporation believed to have stolen money arranged blanket counsel for employees whose ranks could include workers who had knowledge about the theft and workers who did not.

    If the same lawyer is representing each of the employees — and if the employees have competing legal interests — serious doubts about a client’s right to receive thorough representation could arise.

    Prosecutors said they would “scrupulously observe the limitations that the law places on investigative activities,” but added that they would not submit to defense maneuverings designed to derail the investigation.

    “[W]e need not, and shall not, voluntarily accede to sweeping assertions that entire categories of potential witnesses are out-of-bounds because the investigative target has retained counsel and declared that attorney to be the legal representative of those witnesses,” prosecutors said.

    “If a person from whom agents request an interview declines the request, the agents will depart; if the person states that they wish the interview request to go through their lawyer (whoever that lawyer may be) that request will be honored.

    “Otherwise, we plan to proceed with our investigation, and to make use of all the investigative tools at our disposal, to the fullest extent allowed by law, including contact and interviews with witnesses,” prosecutors concluded.

  • BULLETIN: Renner Case Takes West Coast Turn; Prosecutors Seek Forfeiture Of San Diego Property Allegedly Bought With Funds From INetGlobal Advertisers

    BULLETIN: UPDATED 1:47 P.M. EDT (U.S.A.) Federal prosecutors and the U.S. Secret Service have filed paperwork that says INetGlobal’s parent company — Inter-Mark Corp. — acquired a property in San Diego last year and intended to remodel it with proceeds from a Ponzi scheme.

    Records suggest the purchase price of the property was $595,000 and that Inter-Mark intended to spend a substantial sum on renovations paid for with money from INetGlobal members’ advertising purchases.

    Prosecutors have filed a forfeiture complaint against the property, saying it is the proceeds of a criminal wire-fraud and money-laundering scheme. The forfeiture case was filed March 15 and is proceeding on a litigation track separate from a criminal probe that was launched into the business practices of INetGlobal operator Steve Renner in February.

    The case number for the forfeiture action was disclosed in court filings by the defense in the criminal investigation earlier this week. Records suggest that Renner, Inter-Mark and INetGlobal have been aware of the forfeiture case since at least April 19. It was not immediately clear if  Renner or the companies took any steps to inform members that the government had opened a second litigation front amid allegations of criminal conduct.

    In April, some INetGlobal members — apparently unaware of the government’s claim that money from advertisers was used to pay for and renovate a California building far removed from INetGlobal’s base of operations in Minnesota — suggested the prosecution’s case was disintegrating.

    The property, whose address is 3864 Mission Boulevard, San Diego, Calif., was acquired in August 2009 after funds from customers’ credit-card purchases were used in a series of illegal transactions, according to the Secret Service.

    “These deposits are believed to be from individuals who are ‘purchasing’ advertising,” the agency alleged.

    “More specifically, the purchase of the defendant real property was funded by the following transactions,” the agency alleged. “During the month of July 2009 over $2.5 million dollars in credit card transactions were deposited to Wells Fargo Inter-Mark Account #665543xxxx. These funds were later used to purchase the defendant real property (italics added):

    “a. On August 10, 2009, $350,000 was transferred to Inter-Mark Account #137922xxxx from Account #66543xxxx.

    “b. On August 11, 2009, an additional $300,000 was transferred to Inter-Mark Account #137922xxxx from Account #66543xxxx.

    “c. On August 31, 2009, $650,000 was transferred to Inter-Mark Account #224620xxxx from Account #137922xxxx.

    “d. On the same date, $20,000 was wire transferred from Account #224620xxxx to Eaton Escrow in San Diego, California.

    “e. On September 14, 2009, $450,000 was transferred to Inter-Mark Account #224620xxxx from Account #137922xxxx.

    “f. On September 14, 2009, $575,517 was wire transferred from Account #224620xxxx to Eaton Escrow. These funds were used to purchase a commercial building located at 3864 Mission Blvd., San Diego, California.

    “g. On September 23, 2009 Eaton Escrow issued a check payable to Inter-Mark Corporation in the amount of $348.77 with a notation that the check proceeds was a “refund.”

    The Secret Service alleged that “[r]emodeling work is currently in progress to renovate the
    defendant real property.

    “Substantial sums of money have been invested towards the remodeling project,” the agency alleged.

    On May 4, Renner, Inter-Mark and a related entity known as V-Media Marketing denied the allegations in the forfeiture complaint.

  • BULLETIN: Steve Renner, Operator Of INetGlobal Autosurf, Sentenced To 18 Months In Federal Prison In Tax Case Tied To His Money-Services Business

    Steve Renner

    UPDATED 6:57 P.M. EDT (U.S.A.) The operator of the INetGlobal autosurf has been sentenced to 18 months in federal prison for income-tax evasion.

    Steve Renner also was ordered by U.S. District Judge Donovan Frank to cooperate with the IRS “in the assessment and payment of taxes still due,” federal prosecutors said.

    Renner was convicted in December of four felony counts of tax evasion after a six-day jury trial. The case stemmed from his operation of Cash Cards International (CCI), a payment processing company.

    He was not taken into immediate custody after today’s sentencing and perhaps has “several weeks” before he is scheduled to report to prison, said Jeanne Cooney, a spokeswoman for U.S. Attorney B. Todd Jones.

    Cooney added that the IRS is in the process of determining how much money Renner still owes to the government, which is why Donovan ordered him to cooperate with the agency.

    Even with his sentencing today, Renner’s legal troubles are not over. In February, the U.S. Secret Service said there was probable cause to believe he was operating an international Ponzi scheme through INetGlobal and affiliated companies.

    Federal prosecutors have seized about $26 million in a probe into INetGlobal’s business practices. Renner has not been charged in the case, which prosecutors described as a “major” money-laundering investigation.

    In the tax case, prosecutors said Renner diverted customers’ money held by CCI “to pay his living expenses as well as to make personal investments in coins, oil wells, art, stamps, and vintage musical instruments.

    “He also used client funds to promote his blues-rock band, ‘Stevie Renner and the Renegades,’” prosecutors said.