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Tag: Interpol

INTERPOL: ‘Digital Currencies Increasingly Used To Finance Criminal Activities[,] Including Terrorism’

Pushing a murky, MLM-style digital currency scheme or even a purported one? Involving family, friends and online contacts?

INTERPOL is warning that “digital currencies [are] increasingly used to finance criminal activities[,] including terrorism.”

The warning is included in an INTERPOL announcement dated Jan. 16 about a law-enforcement conference in Qatar on the topic of transnational crime and how digital currencies are being used to launder money.

“Digital currencies are not constrained by national regulations or borders, therefore cooperation in fighting against criminal uses of digital currencies must also transcend borders and integrate solutions from both law enforcement and the private sector,” said Tim Morris, INTERPOL’s executive director of Police Services.

About 400 participants from law enforcement and private industry from 60 counties attended the conference in Doha, INTERPOL said. The event concluded today.

INTERPOL, Europol and the Basel Institute on Governance, with the collaboration of the Qatar National Anti-Money Laundering and Terrorism Financing Committee, organized the conference, INTERPOL said.

Even Bitcoin can be exploited for criminal purposes, INTERPOL said.

Any number of murky cryptocurrencies are being marketed MLM-style online. BehindMLM.com has reported that one known as OneCoin is being investigated in multiple countries.and that even a kidnapping and ransom plot involving promoters has been reported.

Read the INTERPOL announcement titled “Digital currencies and money laundering focus of INTERPOL meeting.”

Jan 18, 2017
BULLETIN: Sann Rodrigues Subject Of INTERPOL Wanted Notice

Sanderley Rodrigues [de] Vasconcelos. Source: INTERPOL.
BULLETIN: TelexFree and IFreeX figure Sanderley Rodrigues [de] Vasconcelos (Sann Rodrigues) is the subject of an INTERPOL notice that says he is wanted by authorities in Brazil for “Tax Evasion and not obey[ing] a Judicial Order.”

Precisely when the notice was entered was not immediately clear. The notice drops the “de” portion of his last name, listing him as “Vasconcelos” as opposed to De Vasconcelos.

Rodrigues reportedly was detained yesterday in Boston by U.S. authorities at the request of Brazil.

The INTERPOL notice remains active online at the time of this PP Blog post.

Rodrigues was arrested last month in the United States on charges of immigration fraud. The SEC charged Rodrigues civilly last year with securities fraud for his alleged role in TelexFree, which allegedly gathered a sum on the order of $1.8 billion.

He is purported to be a world traveler.

The Brazilian judicial order appears to be in the context of IFreeX, the subject of a warning by the state of Massachusetts last year.

More as the situation develops . . .

Jun 30, 2015
URGENT >> BULLETIN >> MOVING: Nicholas Smirnow, Pathway To Prosperity HYIP Ponzi Figure, Arrested At Airport In Canada

Nicholas Smirnow. Source: INTERPOL Wanted notice.

URGENT >> BULLETIN >> MOVING: (6th update 9:35 p.m. ET U.S.A.) Nicholas Smirnow, still listed by INTERPOL as a person wanted by the United States in the alleged Pathway To Prosperity (P2P) HYIP Ponzi scheme that affected people in 120 countries, has been arrested at Toronto’s Pearson International Airport, Canadian media outlets are reporting.

U.S. federal prosecutors charged Smirnow, believed now to be 56 or 57, in 2010. He has been listed by INTERPOL since that time.

CTV News, via the Canadian Press, is reporting that U.S. authorities are aware of the arrest. Smirnow also has been charged with crimes in Canada.

P2P was an instance of international mass-marketing fraud, U.S. authorities said in 2010. Though large for its time in the 2008 to 2010 time frame after allegedly gathering more than $70 million and affecting 40,000 investors, P2P since has been eclipsed in dollar volume and victims count by other mass-marketing fraud schemes such as Zeek Rewards and TelexFree.

Professor James E. Byrne, an HYIP expert consulted by the U.S. government in the P2P case, said in 2010 that “the investment scheme described in the materials that I have reviewed are not legitimate but resemble and are classic instances of so-called high yield frauds and fraudulent pyramid schemes. The proposed returns are excessive for even the most risky legitimate investments and are simply preposterous for investments whose principal is supposedly guaranteed.”

From Byrne’s P2P analyis (italics added):

The funds are turned over to the investment and “earn” returns that range from 1.5% daily for a 7 day plan Plus the return of the initial investment to 2.67% daily for a 60 day plan or 160.2% plus the return of the initial investment. The weekly returns on the 7 day investment would amount to approximately 540% per year without taking into account the principal and the 60 day plan would return approximately 950% annualized.

Like many HYIP schemes before and after, P2P had a presence on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. Both forums are referenced in P2P-related court filings. TalkGold got a mention last week in the Liberty Reserve money-laundering case.

Like current schemes with a Ponzi-board presence such as “Achieve Community,” the P2P tentacles spread far and wide and sucked in vulnerable people such as senior citizens. From a PP Blog story on May 31, 2010 (italics/bolding added):

The scheme was almost unimaginably widespread, the U.S. Postal Inspection Service said in an affidavit.

“Financial records of payment processors utilized by P-2-P to collect investment funds from investors show that approximately 40,000 investors in 120 countries established accounts with P-2-P,” a postal inspector said. “Despite the fact that the investment was supposedly ‘guaranteed, investors lost approximately $70 million as a result of [Smirnow’s] actions.”

The probe began when the U.S. government received a referral from the Illinois Securities Department “concerning an elderly Southern District of Illinois resident who had made a substantial investment in P-2-P,” the postal inspector said in the affidavit.

“In addition to P-2-P’s own website, I discovered that P-2-P’s investment scheme was marketed on other websites, including High Yield Investment Program forums, which I was able to access directly through the internet,” the inspector said.

Before long, the inspector determined that the scheme cost investors losses in 48 of the 50 U.S. states, and 18 of the 38 counties that comprise the Southern District of Illinois, prosecutors said.

Such penetration in Illinois may suggest Smirnow had a promotional arm in the state. The complaint spells out a case against conspirators “known and unknown,” and the complaint notes that family members told other family members about the scheme.

“When P-2-P’s funds were depleted and when investors did not receive a return of their funds as they had been promised, [Smirnow] caused a posting on P-2-P’s private forum warning investors not to complain to payment processors about P-2-P’s failure to return their money or they would find themselves ‘on the outside looking in,’” prosecutors charged.

The postal inspector has spoken to “hundreds of P-2-P investors” during the course of the investigation, according to court filings.

“Hundreds [of people] sent me copies of printouts they had made of P-2-P’s website, postings that had been made on the P-2-P’s members forum, and internet sites touting high yield investment programs which contained postings related to P-2-P,” the postal inspector said.

With “Achieve Community,” promoters claim that $50 turns into $400 in three months or less. Participants are encouraged to roll over profits.

Achieve Community promoters have published extrapolations that show “earnings” in the tens of thousands, hundreds of thousands and even the millions of dollars.

Dec 16, 2014
Attorney General References ISIS Recruiting Efforts; ‘We Have Established Processes For Detecting American Extremists Who Attempt To Join Terror Groups Abroad,’ Holder Says

“Today, few threats are more urgent than the threat posed by violent extremism. And with the emergence of groups like ISIL, and the knowledge that some Americans are attempting to travel to countries like Syria and Iraq to take part in ongoing conflicts, the Justice Department is responding appropriately.” — Eric Holder, U.S. Attorney General, Sept. 15, 2014.

EDITOR’S NOTE: This is the full statement of the U.S. Department of Justice on an initiative to combat violent extremism in an era in which terrorists effectively are operating global mass-marketing campaigns. The terrorist group ISIS, which has taken over lands in Iraq and Syria, recently has engaged in beheadings of two American journalists and a British aid worker. A link to a video of remarks by U.S. Attorney General Eric Holder appears at the bottom of this post. ISIS also is known as ISIL.

** ________________________________ **

Eric Holder. From Sept. 15, 2014, Justice Department video.

Attorney General Eric Holder announced Monday that the Justice Department will launch a new series of pilot programs in cities across the country to bring together community representatives, public safety officials and religious leaders to counter violent extremism. The new programs will be run in partnership with the White House, the Department of Homeland Security, and the National Counterterrorism Center.

“Today, few threats are more urgent than the threat posed by violent extremism,” [the] Attorney General said in a video message posted on the Justice Department’s website. “And with the emergence of groups like ISIL, and the knowledge that some Americans are attempting to travel to countries like Syria and Iraq to take part in ongoing conflicts, the Justice Department is responding appropriately.”

The complete text of the Attorney General’s video message is below:

“Last week, millions of Americans paused to mark the 13th anniversary of the attacks of September 11, 2001 – the deadliest acts of terror ever carried out on American soil. For my colleagues at every level of our nation’s Department of Justice, and for me, this anniversary was also a solemn reminder of our most important obligation: to ensure America’s national security and protect the American people from a range of evolving threats.

“Today, few threats are more urgent than the threat posed by violent extremism. And with the emergence of groups like ISIL, and the knowledge that some Americans are attempting to travel to countries like Syria and Iraq to take part in ongoing conflicts, the Justice Department is responding appropriately.

“Through law enforcement agencies like the FBI, American authorities are working with our international partners and Interpol to disseminate information on foreign fighters in Syria and Iraq, including individuals who have traveled from the United States. We have established processes for detecting American extremists who attempt to join terror groups abroad. And we have engaged in extensive outreach to communities here in the U.S. – so we can work with them to identify threats before they emerge, to disrupt homegrown terrorists, and to apprehend would-be violent extremists. But we can – and we must – do even more.

“Today, I am announcing that the Department of Justice is partnering with the White House, the Department of Homeland Security, and the National Counterterrorism Center to launch a new series of pilot programs in cities across the nation. These programs will bring together community representatives, public safety officials, religious leaders, and United States Attorneys to improve local engagement; to counter violent extremism; and – ultimately – to build a broad network of community partnerships to keep our nation safe. Under President Obama’s leadership, along with our interagency affiliates, we will work closely with community representatives to develop comprehensive local strategies, to raise awareness about important issues, to share information on best practices, and to expand and improve training in every area of the country.

“Already, since 2012, our U.S. Attorneys have held or attended more than 1,700 engagement-related events or meetings to enhance trust and facilitate communication in their neighborhoods and districts. This innovative new pilot initiative will build on that important work. And the White House will be hosting a Countering Violent Extremism summit in October to highlight these and other domestic and international efforts. Ultimately, the pilot programs will enable us to develop more effective – and more inclusive – ways to help build the more just, secure, and free society that all Americans deserve.

“As we move forward together, our work must continue to be guided by the core democratic values – and the ideals of freedom, openness, and inclusion – that have always set this nation apart on the world stage. We must be both innovative and aggressive in countering violent extremism and combating those who would sow intolerance, division, and hate – not just within our borders, but with our international partners on a global scale. And we must never lose sight of what violent extremists fear the most: the strength of our communities; our unwavering respect for equality, civil rights, and civil liberties; and our enduring commitment to justice, democracy, and the rule of law.”

The full video of the Attorney General’s message is available at http://www.justice.gov/agwa.php.

Sep 15, 2014
BULLETIN: FBI Issues Wanted Posters, INTERPOL Issues Red Notices For Alleged International Cybercriminals Who Targeted Americans In Scam That Duped Big-Ticket Shoppers

BULLETIN: The FBI has issued Wanted posters and INTERPOL has issued Red Notices for at least five alleged cybercriminals who targeted Americans and websites such as eBay, Cars.com, AutoTrader.com and CycleTrader.com in a scheme that netted millions of dollars.

Victims were in the marketplaces for high-ticket items such as cars, boats and motorcycles, and the scammers and coconspirators posed as sellers and created fake websites to dupe victims into believing they were doing business with real merchants. The products, however, “did not actually exist,” the FBI and federal prosecutors said.

Phony invoices also were part of the scheme, which also allegedly used “high-quality fake passports to be used as identification by co-conspirators in the United States.”

“After the ‘sellers’ reached an agreement with the victim buyers, they would often e-mail them invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with instructions to transfer the money to the American bank accounts used by the defendants,” the prosecution team said.

“Today, we have unsealed charges—and issued wanted posters and Interpol red notices—for a band of dangerous cyber criminals who are alleged to have stolen millions of dollars from unsuspecting consumers around the globe,” said Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

“As described in the indictment, the leader of this band of thieves openly proclaimed that he is beyond the reach of the U.S. criminal justice system,” Raman said. “But with the help of our international partners, we will track down and capture every alleged member of this criminal syndicate, no matter where they are hiding.”

Among those wanted are Nicolae Popescu. the alleged ringleader described by the FBI as a “Romania fugitive.”

Also wanted are “Romanian nationals Daniel Alexe (who may also go by the name ‘Alexe Daniel’), Dmitru Daniel Bosogioiu, Ovidiu Cristea, and Dragomir Razvan, and a defendant who goes by the names ‘George Skyper’ and ‘Tudor Barbu Lautaru,’” the FBI and prosecutors said.

“Using forged documents and phony websites, for years Popescu and his criminal syndicate reached across the ocean to pick the pockets of hard working Americans looking to purchase cars,” said U.S. Attorney Loretta E. Lynch of the Eastern District of New York. “They thought their distance would insulate them from law enforcement scrutiny. They were wrong.”

Six scamming colleagues of the wanted men already have been caught, the FBI said.

From a statement by the FBI and federal prosecutors (italics added):

As alleged in the complaint and subsequent indictment, the defendants participated in a long-term conspiracy to saturate Internet marketplace websites including eBay, Cars.com, AutoTrader.com, and CycleTrader.com with detailed advertisements for cars, motorcycles, boats, and other high-value items—generally priced in the $10,000 to $45,000 range—that did not actually exist. The defendants employed co-conspirators who corresponded with the victim buyers by e-mail, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money. The defendants allegedly even pretended to sell cars from non-existent auto dealerships in the United States and created phony websites for these fictitious dealerships. As part of the scheme, the defendants produced and used high-quality fake passports to be used as identification by co-conspirators in the United States, including Razvan (who previously resided in California), to open American bank accounts. After the “sellers” reached an agreement with the victim buyers, they would often e-mail them invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with instructions to transfer the money to the American bank accounts used by the defendants. The defendants and their co-conspirators allegedly used counterfeit service marks in designing the invoices so that they would appear identical to communications from legitimate payment services. The illicit proceeds were then withdrawn from the U.S. bank accounts and sent to the defendants in Europe by wire transfer and other methods.

The complaint and indictment describe the extent to which Popescu, in particular, led the conspiracy. Among other things, Popescu coordinated the roles of the various participants in the scheme—he hired and fired passport makers based on the quality of the fake passports they produced, supervised co-conspirators who were responsible for placing the fraudulent ads and corresponding with the victims, and ensured that the illicit proceeds transferred to the U.S. bank accounts were quickly collected and transferred to himself and others acting on his behalf in Europe. Popescu also allegedly directed Cristea to obtain and transfer luxury watches purchased using the illegal proceeds of the scheme, including three Audemars Piguet watches with a combined retail value of over $140,000, to his associates in Europe. It is estimated that the defendants earned over $3 million from the fraudulent scheme.

Screen Shots Of Wanted Posters

Oct 24, 2013
SPECIAL REPORT: Like AdSurfDaily And OneX Before It, Alleged TelexFree Pyramid Scheme May Be Engaging In Game Of Payment-Processor Roulette

“While reviewing the ASD website in the District of Columbia, [an undercover agent] found a posting within ASD’s News section, apparently posted by ASD on July 2, 2008. The title of the posting was, “Alert Pay & Direct Deposit are being phased out July 31, 2008.” According to ASD’s posting, “We have notified BOA not to accept cash or personal checks for deposit account – English or Spanish.” ASD further stated, “Please remember that the preferred method of purchasing Ad Packages is by mailing a Check or by Solid Trust Pay . . . Solid Trust Pay is a Canada based money transmitting and payment company that, like the e-Gold system, operates over the Internet. It appears that beginning August 1, 2008, Solid Trust Pay will be ASD’s preferred method for receiving funds from members, and for paying rebates and commissions to members . . . Within the past two weeks, ASD has wired several million dollars to Solid Trust Pay from its BOA Accounts. A TFA also learned that earlier in July 2008, a bank other than BOA closed the last account that was controlled by Bowdoin or family members after that bank determined, and explained to them, that an investigation by the bank determined that Bowdoin appeared to be operating a Ponzi scheme.” — AdSurfDaily Ponzi scheme forfeiture complaint, August 2008

TelexFree affiliate promos encouraging participants to register for International Payout Systems (I-Payout) began to appear online in recent hours. Just last month, TelexFree affiliates were encouraged to register for Global Payroll Gateway, another e-Wallet vendor that supposedly would solve TelexFree’s payment problems as a pyramid-scheme probe moved forward in Brazil. There now are reports online that GPG has dumped TelexFree, leading to questions about whether TelexFree is trying to port its alleged fraud scheme to yet another vendor — I-Payout. Source: Google search results.

In 2008, the U.S. Secret Service effectively accused the AdSurfDaily MLM “program” of playing a game of payment-processor roulette as U.S. law enforcement put the squeeze on certain money-movers, the willfully blind enablers of online fraud schemes.

ASD, a $119 million HYIP Ponzi scheme that led to a 78-month prison sentence for operator Andy Bowdoin, started out by accepting “e-Gold and Virtual Money,” according to a Ponzi-scheme forfeiture complaint filed in federal court in August 2008.

But ASD, according to the complaint, realized e-Gold had come under investigation for enabling the laundering of money, something that could put the heat on ASD.

“Shortly after publicity surrounding the government’s investigation into e-Gold appeared, ASD discontinued using the e-Gold system as a means for receiving member funds,” the complaint alleged.

And even as these events were occurring, according to court filings in the ASD case and in other cases, Robert Hodgins, a supplier of debit cards and the operator of Virtual Money Inc. — now listed by INTERPOL as an international fugitive — came under investigation in Connecticut amid allegations he was assisting in the laundering of narcotics proceeds in Medellin, Colombia, and prepping himself to assist in the laundering of funds in the Dominican Republic.

Virtual Money, whom some ASD members said was supplying debit cards to ASD, also was linked to the PhoenixSurf Ponzi scheme, according to court filings.

In December 2010, federal prosecutors alleged that ASD also had accepted money from e-Bullion, a California firm that processed payments for Ponzi schemes, including the $72 million Legisi HYIP scheme in Michigan that led to prison sentences for operator Gregory McKnight and pitchman Matthew John Gagnon. E-Bullion operator James Fayed has been sentenced to death for ordering the brutal contract slaying of his wife, a potential witness against him. Pamela Fayed’s throat was slashed repeatedly in the shadows of a Greater Los Angeles parking garage, her husband seated on a nearby park bench “like he doesn’t have a care in the world.”

ASD, according to court filings, also used AlertPay and SolidTrustPay, money-movers based in Canada that have been linked to multiple Ponzi schemes, including the alleged $600 million Zeek Rewards Ponzi scheme broken up by the SEC last year.

Not even Bowdoin’s arrest in 2010 stopped him from pitching fraud schemes, according to court filings. Facing serious criminal charges for his actions in ASD, Bowdoin (in 2011) became a pitchmen for the OneX “program,” which federal prosecutors later alleged to be a pyramid scheme recycling money in ASD-like fashion. Among Bowdoin’s fellow OneX pitchmen was T. LeMont Silver, later of Zeek and later of JubiMax and GoFunPlaces, two MLM “programs” that are suing each other amid allegations of financial fraud.

At one time, OneX claimed to have a relationship with SolidTrustPay. It then claimed to have ended that relationship and to have started a relationship with I-Payout. Earlier, I-Payout had listed the uber-bizarre TextCashNetwork MLM “program” with ties to the Phil Piccolo organization as a “selected client.” TextCashNetwork now appears to have disappeared, but still is operating with the acronym “TCN” — this time as TrueCashNetwork. How the “new” TCN is processing payments is unknown. What is known is that someone associated with the “new” TCN has sent emails to “winners” in the Zeek scheme in an apparent bid to get them to flog for the new iteration, an apparent investment arm of which is being promoted as an opportunity to earn an interest rate of 50 percent.

Now — as incredible as it seems — promoters of the alleged TelexFree pyramid scheme operating in Brazil and the United States now are claiming that TelexFree is using I-Payout, known formally as International Payout Systems Inc. Equally incredibly, this is happening less than a month after TelexFree promoters advised TelexFree participants to register with Global Payroll Gateway (GPG), another eWallet company and supplier of debit cards, as a means of getting paid after payouts to Brazilian members of TelexFree were blocked in Brazil.

Just last month, TelexFree affiliates were encouraging prospects to register with Global Payroll Gateway (GPG). In recent hours — and amid reports GPG has given TelexFree the boot — TelexFree affiliates have been urged to register with I-Payout. Source: Google search results.

There are reports online, including on Facebook from self-identified members of TelexFree, that GPG gave TelexFree the boot in recent days. No sooner did those reports surface than videos went up on YouTube encouraging TelexFree members to register for I-Payout.

One of the reports that TelexFree suddenly had shifted from GPG to I-Payout is published on the MoneyMakerGroup forum. MoneyMakerGroup’s name appears in U.S. court files as a place from which Ponzi and fraud schemes are promoted. Both FINRA and the SEC have warned that HYIP schemes spread in part through social-media sites such as forums, YouTube and Facebook.

Because international MLM HYIP fraud schemes often have promoters in common — and because the schemes are promoted on Ponzi cesspits such as MoneyMakerGroup and TalkGold — proceeds from the schemes can flow into banks at the local level, putting them in the position of becoming warehouses for the ill-gotten gains of participants, including winners and insiders. The use of stored-value debit cards such as those in play in HYIP schemes can lead to the quick dissipation of assets, meaning that victims of an HYIP scheme may have limited hope (or even no hope) that a recovery can be made for their benefit.

The most recent incongruous events involving TelexFree are occurring even as at least one judge and one prosecutor involved in the TelexFree pyramid probe in Brazil reportedly have been threatened with death. And, as was the case with ASD, some promoters of TelexFree have claimed an ability to expedite the flow of money to the scheme — perhaps through back-office transactions within the TelexFree system.

Also see report on BehindMLM.com.

Sep 14, 2013
REPORTS: Ice Cream Flavor Named After TelexFree, An Alleged Pyramid Scheme; Separately, TelexFree Affiliates May Be Crossing National Borders To Keep The Money Flowing — Even As Purported Opportunity Turns To New Payment Method

The HYIP world is known for promoters’ bids to change the storyline, but this one may take the cake — or at least be a sweet complement.

There are reports in Brazilian media that a promoter of the TelexFree MLM scheme — alleged to be a massive pyramid — has named an ice cream after TelexFree to show support for the embattled firm.

“The ice cream is not a pyramid,” a person was quoted as saying in DiarioDigital, according to a translation — and neither is its namesake.

Here is a link to the story in Portuguese; here is a link to the English translation by Google Translate.

Recruitment by TelexFree is banned in Brazil while investigations by at least seven Brazilian states proceed. Payments to Brazilian participants by TelexFree likewise are blocked. The purported “opportunity,” however, still is operating in other countries and apparently gathering money and issuing payments.

Separately, Veja.com is reporting that undercover investigators in Brazil have noticed that some Brazilian promoters of TelexFree have crossed national borders into Bolivia and Paraguay to keep TelexFree investment money flowing. Here is a link to the story in Portuguese; here is the link to the English translation by Google Translate.

The United States long has warned about cross-border fraud such as was present in PathwayToProsperity, an alleged $70 million Ponzi scheme whose operator is listed by INTERPOL as an international fugitive. P2P, as the “program” was known, made its way across multiple continents and 120 countries, according to court filings.

Meanwhile, U.S. promoters of TelexFree have been busy watching a promoter’s Aug. 16 YouTube video titled, “How to register your GPG account with TelexFree.”

GPG, according to the video, stands for Global Payroll Gateway.

The company, according to its website, provides services such as loading payrolls onto debit cards. TelexFree, according to the affiliate’s video, is now a GPG client and TelexFree affiliates must “connect” their account to GPG to get paid.

A screen shown in the TelexFree affiliate’s video shows an apparent executive of TelexFree announcing that the changeover to GPG’s services “is causing a delay in our payment process for the first run.”

The FBI long has warned that certain types of debit cards can be abused and that a “shadow banking system” is playing a role in fraud schemes that affect national security.

If TelexFree is adjudicated a scam, it may be difficult for the governments of the world or the receivers/trustees they may appoint to gather proceeds for victims. HYIP money may dissipate quickly, perhaps particularly quickly if it is offloaded with debit cards. In a money-laundering case brought in 2008, federal prosecutors in Connecticut said that millions of dollars in narcotics proceeds were offloaded at ATMs in Colombia.

Robert Hodgins, a Canadian currently listed by INTERPOL as an international fugitive in the Connecticut money-laundering case, reportedly supplied the debit cards through a firm known as Virtual Money Inc. and had ties to the HYIP world and schemes such as PhoenixSurf and AdSurfDaily.

Another screen in the TelexFree affiliate’s video shows folders with titles such as “telexfree,” “Banner[s] Broker, “hyip monitors,” “forex”and “Passive peeps.”

The context of the folders shown in the video is unclear. Banners Broker, however, is a bizarre HYIP scheme. HYIP monitors are websites that monitor whether a particular HYIP site is “paying.” Meanwhile, the word “passive” often is used in HYIP scams that promote tremendous returns for investors inclined to sit back and wait for the payments to flow in, instead of recruiting other investors to earn downline commissions from a “program.”

TelexFree has been promoted on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. The names of both forums appear in U.S. court filings as places from which fraud schemes are advanced.

From a promo for the alleged $600 million Zeek Rewards Ponzi- and pyramid scheme.

Zeek Rewards, an alleged $600 million Ponzi- and pyramid scheme that had a Ponzi-forum presence and became the target of an SEC action last year, was promoted as a “passive” program. Like Zeek, TelexFree purportedly has a requirement that participants post ads for the “program” online.

There have been reports in Brazil that a judge and prosecutor involved in the TelexFree case have been threatened with death.

But not even those disturbing reports were enough to cause TelexFree to cancel a rah-rah event in California last month. The company says it also plans an “at sea” event in December. Earlier, some TelexFree pitchmen provided AdSurfDaily-like coaching tips to enrollees, especially on matters of how to speed the flow of money to the company.

ASD was a $119 million MLM Ponzi scheme broken up by the U.S. Secret Service in 2008. Like Zeek and TelexFree, the ASD “program” also had a Ponzi-forum presence and was promoted as an opportunity for “passive” participants.

Some TelexFree promoters in Brazil appear to believe that TelexFree has been deemed legal in the United States by the U.S. government. This errant belief may in part have been instilled by promoters of TelexFree who worded MLM HYIP pitches to suggest that the U.S. government had authorized the “program.”

Some TelexFree promoters have claimed a payment of $15,125 to the firm will fetch a return of more than $42,000 in a year. Even the cautious “Aunt Ethels” of the world will grow to become keen on TelexFree, according to a promo.

Aug 21, 2013
On The High Seas Of Facebook, The Search For New HYIP Blood In The Water Intensifies After ‘Profitable Sunrise’ Goes Missing

“HYIPs use an array of websites and social media — including YouTube, Twitter and Facebook — to lure investors, fabricating a ‘buzz’ and creating the illusion of social consensus, which is a common persuasion tactic fraudsters use to suggest that ‘everyone is investing in HYIPs, so they must be legitimate.’” — The Financial Industry Regulatory Authority (FINRA), July 15, 2010

FINRA issued a warning back in 2010 against HYIP schemes, pointing out that they often trade through social-media sites such as forums, YouTube, Twitter and Facebook. The warning came on the heels of the collapse of the Genius Funds “program” ($400 million) and the filing of criminal charges in the United States against Nicholas Smirnow, an alleged former bank robber in Canada who allegedly was running the Pathway To Prosperity (P2P) Ponzi scheme. P2P is alleged to have gathered more than $70 million.

P2P even got a mention on the U.S. Department of Justice Blog. That mention came in the form of a warning about international mass-marketing fraud.

Nearly three years later, Smirnow, 55, is still listed by INTERPOL as an international fugitive.

So is Robert Hodgins, 68. Hodgins, a Canadian supplier of debit cards to HYIP schemes, is charged in a money-laundering case in the United States. It is alleged that cards Hodgins supplied were used by narcotics traffickers to offload millions of dollars in “profits” at ATMs in Medellin, Colombia.

Speaking of Colombia . . . well, it was one of the staging grounds of the infamous D.M.G. Group (DMG) multilevel-marketing pyramid scheme of David Eduardo Helmut Murcia Guzman (David Murcia). Murcia, too, was tied to narcotics traffickers. His collapsed pyramid scheme gathered hundreds of millions of dollars. The anger spilled out onto the streets.

Just about all of these schemes made absurd claims. Genius Funds, for example, promised a payout of 6.5 percent a week. Compare that absurd claim to the Profitable Sunrise claim of 2.7 percent a day through its bizarrely named “Long Haul” plan with a purported payout timed to coincide with Easter. A scheme bizarrely known as Cash Tanker was operating at the same time as Genius Funds. Like Profitable Sunrise, Cash Tanker purported to be a Christian enterprise. It’s gone now, too. So is Profitable Sunrise. Their members were cast into the sea like so much chum.

Enter the Facebook boat-sharks and the contemptible “lifelines” they’re tossing toward the people struggling to stay afloat in rough seas . . .

Despite all the warnings — despite all the publicity surrounding HYIP schemes — opportunists are descending on Facebook today to recruit Profitable Sunrise members (the people struggling in the water) into new scams. The same thing has happened repeatedly, perhaps most prominently in August 2012, after the SEC described the Zeek Rewards “program” as a $600 million Ponzi- and pyramid scheme.)

Boat-sharks posting on a Profitable Sunrise Facebook site today are promoting schemes such as “SuperWithdraw,” “Whos12,” Maxi-Cash,” “FairyFunds,” “Roxilia,” “OptiEarn,” “AVVGlobal,” “ProForexUnion” and “MajestiCrown.” Some of the emerging schemes promise to pay even more than Profitable Sunrise.

Mar 27, 2013
UPDATE: As Proposed Money-Saving Measure, Zeek Receiver Asks Judge To Treat Oct. 8 Preliminary Liquidation Plan As Status Report; Meanwhile, Yet Another Zeek Member Declares Herself A Fraud Victim

A woman who described herself as a Zeek victim filed copies of postal receipts in federal court today. Source: Screen shot of federal court files. Redaction by PP Blog.

UPDATED 8:26 A.M. EDT (OCT. 31, U.S.A.) Saying it would save money, the court-appointed receiver in the Zeek Rewards Ponzi scheme case has asked a federal judge to treat the receiver’s Oct. 8 preliminary liquidation plan as a status report. (See Oct. 9 PP Blog story.)

Separately, yet another Zeek member has declared herself a victim of the alleged $600 million Zeek fraud scheme operated by Paul R. Burks and Rex Venture Group LLC. Two other Zeek members effectively did the same thing earlier this month. On Aug. 17, the SEC alleged that Zeek was a massive Ponzi- and pyramid scheme that potentially fleeced more than 1 million people.

In August, Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina ordered receiver Kenneth D. Bell to file the first status report in the case by Oct. 30. Among other things, status reports inform judges about the efforts under way to recover proceeds linked to alleged fraud schemes and return them to victims.

In the Zeek case, status reports are due within 30 days of the end of a quarter — for example, the third quarter of the calendar year ended Sept. 30, making the first Zeek status report due Oct. 30. The second is due Jan. 31, 2013, a month after the end of the fourth quarter of the calendar year on Dec. 31, 2012.

Bell said in court filings today that the information in the Oct. 8 report included “the same information” due today.

“Given that a separate Quarterly Status Report would be redundant, and in the interest of preserving Receivership assets, the Receiver respectfully requests that the Court order that the Preliminary Liquidation Plan be treated as the Receiver’s First Quarterly Status Report,” Bell petitioned Mullen.

Mullen had not acted on the request by late this afternoon, according to the docket of the case.

How Zeek enthusiasts on Ponzi-scheme boards such as TalkGold and MoneyMakerGroup will react to Bell’s request was not immediately clear. One-percent-a-day (or more) schemes such as Zeek gain a head of steam in part because willfully blind scammers who populate the Ponzi cesspits position the “programs” as legitimate.

The demonization of Bell on the Ponzi boards and elsewhere began shortly after the SEC brought the Zeek case. As was the case in the AdSurfDaily prosecution brought by the U.S. Secret Service in 2008, some Zeek members have claimed that the government is manufacturing victims where none exist. The ASD and Zeek Ponzi schemes fetched a combined sum of at least $719 million, nearly three-quarters of a billion dollars, according to court filings.

Both frauds operated as classic Ponzi schemes that recycled money from members to create the illusion of sustainability and profitability, according to investigators.

Both Zeek and ASD were promoted on forums listed in federal court filings as places from which Ponzi schemes are promoted. Earlier schemes promoted on the forums include Legisi and Pathway To Prosperity, which gathered a combined sum of more than $140 million and affected tens of thousands of people, according to court filings.

Legisi operator Gregory McKnight faces sentencing next month in his Ponzi scheme case. Alleged Pathway To Prosperity operator Nicholas Smirnow, meanwhile, is listed by INTERPOL as a wanted fugitive. As was the case with Zeek, the SEC and Secret Service led the Legisi probe. The U.S. Postal Inspection Service brought the Smirnow/Pathway to prosperity case, saying the scam affected individuals in 120 countries.

ASD operator Thomas A. “Andy” Bowdoin is serving a 78-month prison sentence. He was sentenced in August 2012.

Despite claims that Zeek created no victims, at least three individuals already have claimed in court filings to have been scammed by Zeek.

In a filing docketed today, Maria Aide Gomez claimed she sent North Carolina-based Zeek parent Rex Venture Group five postal money orders for $1,000 each in May and paid an additional $300 to maintain her Zeek membership.

Gomez described herself as a “Victim of fraud and deception” on the part of Zeek, Rex Venture Group and Paul R. Burks, the operator of Zeek and Rex Venture. The money orders Gomez sent to Zeek were purchased at a post office in Washington state, according to exhibits that accompanied the filing.

Bell, the receiver, is experienced as both a defense attorney and a prosecutor. The U.S. Department of Justice lauded Bell a decade ago for his successful prosecution of a Hezbollah terrorist cell operating in the United States.

Oct 30, 2012
A PONZI WORLD FIRST? JSS Tripler 2 Collapses — And Obvious Ponzi ‘Program’ Blames Ponzi-Pushers’ Forum For Demise

UPDATED 4:05 PM EDT (U.S.A.): It’s MoneyMakerGroup’s fault that JSS Tripler 2 (T2) — also known as T2MoneyKlub — has collapsed.

And it’s also the fault of “Elmer,” a forum poster who apparently committed the unpardonable sin of questioning the legitimacy of a scheme that advertised a return of 2 percent a day — after naming itself after another scheme that advertised 2 percent a day and after T2 gave birth to itself in a forum referenced in U.S. court filings as a place from which massive HYIP Ponzi schemes such as Legisi and Pathway to Prosperity were promoted.

The bizarre assertions were made by T2 Admin “Dave,” a self-described newlywed apparently fully recovered from a recent bout with Dengue Fever but no longer able to ward off a case of Ponzi topplitis fatalis.

“CLOSED UNTIL FURTHER NOTICE!!” the T2 site screamed last night in all-caps and red type. “DUE TO INCESSANT UNDERMINING BY THE STAFF AND A SELECTION OF ‘STAFF ASSISTED’ MEMBERS OF MONEYMAKERGROUP.COM.”

Only days before, “Dave” announced that members who plowed money into the scheme would begin receiving payments to make them whole and put them in profit. Whether those payments were made remains an open question. Serial scammers and willfully blind Ponzi recruiters who populate the Ponzi boards and organize their public and private sales pitches to speed the flow of cash to the schemes as a means of harvesting commissions as illegal broker-dealers may be the only winners — other than “Dave” himself.

Whether “Dave” assigned himself a Ponzi “rake” is unclear. In the AdSurfDaily online Ponzi case, federal prosecutors said ASD President Andy Bowdoin and a “silent partner” who was Bowdoin’s sponsor in the 12DailyPro online Ponzi scheme agreed to a rake of 10 percent of ASD’s “gross sales.”

The U.S. Secret Service said ASD had gathered at least $110 million. Bowdoin was charged in 2010 with wire fraud, securities fraud and selling unregistered securities. He faces a Ponzi trial in September and a bond-review hearing May 18. Investigators say he continued to scam after the Secret Service raided ASD in August 2008.

Ponzi-board posts suggest “Dave” had access to hundreds of thousands of dollars sent in by T2 members, beginning late last year and at least into the early part of 2012. But a problem with an offshore (from a U.S. perspective) payment processor purportedly developed, a situation that purportedly led to a freeze on cashouts. “Dave” claimed he was operating the program from both Britain and Thailand, while also venturing to countries such as Cambodia.

The collapse of T2 occurred just days after the conclusion of a conference in Israel at which INTERPOL President Khoo Boon Hui described two recent online scams operating in Asia that had gathered billions of dollars and resulted in 220 arrests.

Some of the suspects were trying to make a fast getaway at an airport, Hui said, describing the purveyors as transnational criminals.

“[Eighty] per cent of crime committed online is now connected to organized gangs operating across borders,” Hui said, citing figures from a study by London Metropolitan University. “Criminal gangs now find that transnational and cybercrime are far more rewarding and profitable than other riskier forms of making money.”

MoneyMakerGroup is referenced in both the Legisi and Pathway To Prosperity cases as a place from which Ponzi and fraud schemes are promoted. The combined hauls of those schemes exceeded $140 million, according to court filings.

The combined hauls of ASD, Legisi and Pathway To Prosperity exceeded $250 million, according to court filings. Like Legisi, Pathway To Prosperity and T2, ASD also was promoted on the Ponzi forums. Federal prosecutors now say that OneX — yet another “opportunity” promoted on the forums — is a “fraudulent scheme” and “pyramid.”

Bowdoin now is accused of promoting OneX.

Although the closure announcement on the T2 site did not reference Elmer, remarks attributed to “Dave” (as Peakr8) on MoneyMakerGroup made it plain that “Dave” holds Elmer equally accountable for the collapse of the T2 scheme, which recently started a Ponzi feeder program known as “Compound150.”

Here’s “Dave” as Peakr8 yesterday on MoneyMakerGroup (italics added):

I got an email from [MoneyMakerGroup Admin] Yippee some months back. Included in it was one line I will never forget.

Elmer and his friends will NEVER be banned from MMG, the owner wants them there. To create ‘interesting discussion’.

My kids found this doing a search about T2MK… The youngest is 9 years old, the oldest is 13… they cried.

Hope you feel great about that Elmer and friends.. Hope you all feel great!!

I am closing both programs down as of NOW, and i will leave it to the processors to distribute the funds.

Yippee said hogwash.

“This is a BOLD FACED LIE!” Yippee exclaimed.

Elmer said “Dave’s” Ponzi experienced a meltdown and that “Dave” had become the “newest member of the ‘Crazy admin excuses’ club.”

“Why don’t you just tell the truth Dave? Elmer quizzed. “Your ponzi imploded. It ran out of cash to pay with.”

As part of its fraud, T2 maintained its own fraud forum. In a moment of almost-perfect fraud symmetry, legendary fraudster “Ken Russo” made the last “I got paid” post in T2s subfraud forum for its Compound150 fraud.

Ken Russo’s signature line at T2’s fraud forum led to an “opportunity” known as “Wealth 4 All Team,” which appears to have a cheerleader who is planting the seed that the RealScam.com antifraud forum may get sued for publishing information unfriendly to Wealth4AllTeam.

Whether “Ken Russo” had plowed into Wealth4All any of his purported May 11 net payout of $535.95 from “Dave’s” multifaceted T2 Ponzi venture is unknown.

“Ask About My Matching Loan Offer,” “Ken Russo” prompted in his ad for Wealth4AllTeam at “Dave’s” forum for the combined T2 frauds.

In March, “Dave” asserted that the PP Blog and “all your lackies” had “completely undermined your credibility . . . from the word go” in stories and comments about T2.

The T2 death notice followed about two months after “Dave’s” assertions on the PP Blog.

May 13, 2012
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.”

May 9, 2012