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Tag: Interpol

  • BULLETIN: Ponzi Scheme Figure William Walters To Be Extradited From Argentina, FBI, Colorado AG Say; Another ‘Offshore’ Myth Exposed

    William Walters: Extradited from Argentina to face Ponzi charges in Colorado.

    BULLETIN: (UPDATED 9:32 P.M. EDT (U.S.A.) William L. Walters has been extradited to the United States from Argentina to face Ponzi scheme charges in Colorado, prosecutors announced.

    “This extradition is the culmination of years of work and cooperation between my office and the FBI,” said Colorado Attorney General John Suthers. “In this case, justice delayed will not result in justice being denied. We look forward to presenting our case against Mr. Walters and securing justice for his victims.”

    Walters, 45, fled the United States prior to being indicted in 2007. Interpol “flagged” his passport, and the FBI traced him to Argentina, prosecutors said.

    The Walters’ case exposes a common myth on HYIP and autosurf Ponzi boards that “offshore” locations insulate Ponzi schemes from prosecution and that the schemers themselves can avoid arrest by operating outside the United States or fleeing from the United States to a foreign country after a scheme is exposed.

    “Pursuant to the FBI’s Project Welcome Home, the Denver Division was able to work closely with the Colorado Attorney General’s Office to insure that William Walters was returned to Colorado for prosecution,” said James H. Davis, FBI special agent in charge. “This is yet another example of law enforcement cooperation in Colorado and our commitment to pursue fugitives from justice, even if they attempt to flee outside of the United States.”

    Walters is accused of operating a “day-trading” Ponzi scheme that gathered more than $23 million from investors in Colorado, California, Florida, Hawaii, Illinois, Massachusetts, Pennsylvania, Texas and Wyoming.

    He operated companies known as Samurai Capital and Mana Trading Inc. A court in Argentina approved the extradition to the United States.

    Read the Walters’ indictment.

    Read more about the FBI’s “Project Welcome Home.”

    Read about the U.S. Secret Service case against Vladislav Horohorin, who was arrested in France earlier this month after undercover agents infiltrated an online crime forum.

    Horohorin allegedly operated an overseas fraud scheme targeted at U.S. residents.

    Court records show that the Secret Service infiltrated the AdSurfDaily autosurf by employing undercover agents. Records also show that the agency employed undercover operatives in the investigation of the INetGlobal autosurf.

    In the INetGlobal case, records show that undercover agents attended an INetGlobal function in New York earlier this year. The Secret Service said one of its agents was introduced to INetGlobal by an ASD member.

    In the ASD case, the Secret Service said it believed that ASD President Andy Bowdoin was planning to flee the United States prior to the seizure of tens of millions of dollars in August 2008 — amid Ponzi allegations.

  • UPDATE: Robert Hodgins Still Wanted By Interpol; Co-Defendant In Narcotics Probe With Link To AdSurfDaily Case Sentenced To Prison; Colombian Drug Business Used Same Debit Card As ASD

    Robert Hodgins of Dallas-based Virtual Money Inc. is wanted by Interpol in an international money-laundering case that allegedly involves proceeds from the sale of narcotics. Virtual Money Inc.'s name is referenced in the AdSurfDaily autosurf Ponzi scheme case brought by the U.S. Secret Service and the PhoenixSurf autosurf Ponzi scheme case brought by the Securities and Exchange Commission. The case against VM and Hodgins was brought by the U.S. Drug Enforcement Administration and the IRS. PHOTO SOURCE: Interpol.

    A Colombian national implicated in an international conspiracy to launder drug money has been sentenced to 45 months in prison, federal prosecutors announced.

    Meanwhile, another figure in the alleged scheme — Robert Hodgins, the operator of Dallas-based Virtual Money Inc. (VM) — remains at large, prosecutors said. Hodgins is wanted by Interpol on a warrant issued by a federal judge in Connecticut.

    Hodgins is Canadian by birth and lived in the Oklahoma City area of the United States, according to records.

    VM’s name is referenced in the forfeiture allegations in the AdSurfDaily autosurf Ponzi scheme case brought by the U.S. Secret Service in the District of Columbia in August 2008. It also is referenced in the PhoenixSurf Ponzi prosecution brought by the SEC in Los Angeles in July 2007.

    Juan Merlano Salazar, 36, of Medellin, Colombia, was sentenced to 45 months Aug. 9 by U.S. District Judge Mark R. Kravitz of the District of Connecticut. Salazar is among five defendants convicted so far in the money-laundering case, which allegedly involved the use of debit cards provided by VM to launder drug proceeds at ATMs in Colombia, according to court filings.

    Hodgins also is alleged to have accepted $100,000 to launder drug proceeds in the Dominican Republic.

    The Colombian narco business used “stored value cards” to enable drug proceeds to be withdrawn from banks in Medellin as Colombian pesos, prosecutors said.

    Medellin was home base to the late drug lord Pablo Escobar.

    In August 2009, the PP Blog reported that VM’s name appeared in advertising materials for ASD in 2007. Records suggest that Hodgins or a VM designate attended an ASD function in Orlando in November 2006, about a month after ASD began its rollout.

    This 2007 ad for ASD promoted the VM debit card.

    Some ASD members have said they observed large sums of cash and briefcases full of cashiers’ checks at ASD “rallies” in U.S. cities in the spring and summer of 2008, which led to questions about whether ASD was laundering money for a drug cartel and international criminals.

    If the allegations against VM and Hodgins are true, it means the company that provided the debit cards ASD used was in the business of laundering money for at least one international narco business.

    On Aug. 1, 2008, the U.S. Secret Service seized more than $80 million in the ASD case. The money allegedly was tied to at least three autosurfs: ASD, GoldenPandaAdBuilder and LaFuenteDinero.

    ASD, which had operated under at least one other name and perhaps as many as three or more, claimed in 2007 that one of the reasons it could not make payments to members was that $1 million had been stolen by “Russian” hackers.

    Prosecutors said ASD never filed a police report — not even to report the theft of a huge sum of money. ASD instead relaunched as ASD Cash Generator. By the summer of 2008, it was gathering tens of millions of dollars per week.

    One bank account in the name of ASD President Andy Bowdoin seized by the Secret Service contained more than $31 million, according to court filings. Another account in Bowdoin’s name contained more than $23 million. Bowdoin was referenced as the “Sole Proprietor” of the accounts.

    All in all, the Secret Service seized more than $65.8 million from 10 Bowdoin bank accounts, and more than $14 million from at least five bank accounts linked to Golden Panda, according to records.

  • BULLETIN: ‘Genesis Fund’ Operator John S. Lipton Gets 70 Months In Prison; ‘Offshore’ Forex Scheme Presaged Frauds, Lengthy Global Probes To Come

    UPDATED 2:18 P.M. EDT (U.S.A.) John S. Lipton, an alleged founding member and principal manager of the Genesis Fund Forex Ponzi scheme, has been sentenced to 70 months in federal prison for conspiracy to defraud the United States and tax evasion.

    The Genesis Fund scheme traces its roots at least to 1994 and presaged Forex, HYIP, and autosurf  fraud investigations to come. Indictments were handed up more than five years ago — in May 2005 — and the United States worked with the government of Costa Rica to arrest and extradite some of the defendants.

    Prosecutors said the offshore arrests were coordinated by State Department’s Bureau of Diplomatic Security at the U.S. Embassy in San Jose, Costa Rica, which worked with the IRS attache in Mexico City, the Costa Rican Judicial Police and Interpol.

    Lipton’s prosecution — and the guilty pleas of some codefendants and continuing litigation against others — lay to waste various theories on HYIP Ponzi boards that the U.S. government is powerless to act against offshore schemes and that purveyors of “private” investment opportunities cannot be prosecuted. Part of the scheme featured instructions to participants  “to create nominee offshore corporations and bank accounts to receive distributions from the fund,” prosecutors said.

    Nine people were indicted in the scheme, including Richard B. Leonard. Leonard, who was 71 when arrested in 2005 along with Lipton in Costa Rica, was described as a “promoter” and early investor in the scheme.

    Leonard has pleaded guility to his role in the scheme, as has Teresa R. Vogt, who was 51 when indicted. Vogt was an “administrator” for the scheme and worked out of her California home, prosecutors said.

    Prosecutors said the scheme started in the United States before morphing into an offshore fraud. Genesis Fund allegedly gathered more than $80 million.

    “[T]o obscure the operations of the fund and to limit scrutiny of its operations by investors and the government, the defendants caused the Genesis Fund to maintain no financial statements or other statements of operation,” prosecutors said.

    In April 2000, “Genesis Fund’s administrative operations were relocated from Anaheim, Calif., to Costa Rica,” prosecutors said. “At about the same time, paper records were moved to Costa Rica and electronic data on computers was destroyed.”

    Genesis Fund purported to have “no reporting obligations to the IRS,” prosecutors said. “Bank accounts in the names of trusts and offshore bank accounts were allegedly used to receive distributions from the Genesis Fund that were not reported to the IRS.”

    Prosecutors said “Lipton admitted that he used, and conspired with others to use, foreign trusts, corporations, and bank accounts, to receive distributions from the Genesis Fund and did not report these distributions to the IRS.

    He also “admitted that he directed the transfer of approximately 19 boxes of Genesis Fund documents to Costa Rica, rather than turn them over in response to a grand jury subpoena,” prosecutors said.

    It is common for HYIP and autosurf fraud schemes to claim the ventures are “offshore” and therefore “safe” from prosecution. Some purported HYIP “experts” have repeatedly urged domestic operators to move schemes offshore for the presumptive safety blanket such schemes enjoy.

    Genesis Fund promised investors a return of 4 percent per month, prosecutors said.

    As part of his sentence, Lipton was ordered to pay the IRS nearly $3 million in restitution.

    Trials for four defendants who pleaded not guilty are set for next year. Investigators said they followed the money trail all over the world. Separate trials for the Ponzi aspect of the case also are set for next year.

    “The Genesis fund, [which] operated as a Ponzi scheme, led IRS agents on a financial trail from the Caribbean to Hong Kong to Costa Rica and numerous other offshore locations around the world,” Victor S O. Song, chief of the IRS Criminal Investigation Unit, said in April.

    “This signals the new era of solving global financial fraud — the veil of offshore secrecy has been lifted and the IRS will do what is necessary to expand international cooperation to obtain financial evidence,” Song said.

    Genesis ceased paying investors in June 2002, just weeks after claiming the fund was worth $1.3 billion. Investors then “were allegedly lulled into believing that their investments would be recovered through a new investment plan,” prosecutors said.

    It is common for investment fraud schemes to suspend payouts and then claim a new program will emerge to replace a failed one.

    In August 2009, Victor Preston, another defendant in the case, pleaded guilty. Preston, 64 at the time of the indictment in 2005, is an attorney.

    Read more on the indictments in the Genesis Fund case.

  • MYTH-SHATTERING CASE: Local Prosecutors Extradite Ronald Paul Shade From Thailand To Face Real-Estate Ponzi Charges; Shade Also Accused Of ‘Financial Elder Abuse’

    Ronald Paul Shade: Source: Interpol

    EDITOR’S NOTE: The PP Blog has covered a number of stories in which U.S. residents living overseas were extradited to the United States to face Ponzi charges. The case against Ronald Paul Shade is another one — and it’s one that demonstrates that an extradition can occur even if a defendant is not charged with a federal offense.

    Indeed, the warrant for Shade’s arrest was issued by a state-level Superior Court judge in California, according to Interpol. Shade’s case is instructive because it defeats some of the myths propagated on Ponzi boards such as MoneyMakerGroup, ASAMonitor, TalkGold and MyCashForums. Among the myths is that “offshore” equals “safe” for both investors and Ponzi perpetrators.

    Don’t tell that to Shade, now jailed in California after being extradited from Bangkok by local — as opposed to federal — prosecutors in California. His bail was set at $3.9 million.

    And don’t tell it to Jeffrey Lane Mowen, extradited from Panama to face federal Ponzi charges in Utah and later indicted in an alleged murder-for-hire plot. Here’s a quick side note on the Mowen case: If you like the recruitment fees paid by HYIP, autosurf and corrupt MLM or commission-based investment programs and make claims about the “due diligence” you’ve performed and try to impress prospects with your insider knowledge, your willful blindness may put you at great risk.

    Mowen had three prior convictions in Utah for securities fraud and two for theft, according to records. Despite Mowen’s criminal record and history as a fraudster, promoters still did business with him. Their faith drained millions of dollars from investors, the SEC said. Using language apt to cause unease in the Ponzi-promoting world, the SEC said at least one promoter “either knew or was reckless in not knowing that Mowen had multiple recent felony convictions involving crimes of dishonesty.”

    Indeed, the SEC said, the promoter learned in approximately late June 2007 that Mowen had been convicted of securities fraud . . . [but] “continued to solicit new investor funds for several months while failing to disclose Mowen’s criminal history to any of the Promoters or their investors.” Downstream promoters who entrusted the promoter “conducted virtually no due diligence in connection with [his] purported investment opportunities, but transferred investor money to [him] without any documentation or limitation on his use of the funds,” the SEC said.

    Perhaps the biggest myth exposed by the Ronald Paul Shade case is that going offshore takes state attorneys general and local prosecutors totally out of play. Longtime PP Blog readers will remember that the “offshore” pitch was pivotal in promotions for AdViewGlobal, AdGateWorld, MegaLido and other autosurfs that surfaced in the aftermath of the seizure of tens of millions of dollars by the U.S. Secret Service in the AdSurfDaily Ponzi scheme case. Some ads claimed that the “offshore” surfs neutralized state-level investigators.

    Shade, however, was brought back to the United States at the request of the San Bernardino County District Attorney’s Office in California to face state charges filed by local investigators.

    Still promoting investment-fraud schemes on the Ponzi boards and supplementing your pitches with myths about “safety” and how the overseas schemes are insulated from prosecution? Perhaps this story on the dramatic extradition of Colombian national David Murcia to the United States will help you snap out of your delusion that Ponzi and pyramid businesses cause no harm and represent “freedom” of choice. Perhaps this story on Robert Hodgins, who goes to bed at night knowing he’s wanted by Interpol, will help you shape your thinking.

    The cases of John and Marian Morgan, U.S. residents extradited from Sri Lanka, also are instructive.

    Finally, it’s worth noting that, after the United States charged Canadian national Nicholas Smirnow in May with operating an HYIP Ponzi scheme, a MyCashForums poster was quick to claim that “the USA has no extridition (sic) agreement ion (sic) place with the Phillipines (sic) . . . “

    The claim was false. Federal prosecutors said they are seeking Smirnow’s extradition. He was accused of operating a $70 million, international fraud known as Pathway to Prosperity (P2P).

    Here, now, the story of Ronald Paul Shade’s extradition . . .

    A California man living in Thailand was extradited to the United States to face charges he ripped off senior citizens in a real-estate Ponzi scheme, authorities said.

    Ronald Paul Shade, 39, formerly of Riverside, was arrested by local detectives Friday at Los Angeles International Airport. He was charged by investigators from the San Bernardino District Attorney’s Office with 29 felonies, including financial elder abuse, filing forged documents with the County Recorder’s Office and grand theft.

    San Bernardino County District Attorney Michael A. Ramos, who also is the president of the California District Attorneys’ Association, led the probe.

    Among the detectives involved in the Shade probe was Michael Leibrich, a senior investigator with the DA’s office.

    “From 2006 to 2008, Shade solicited money from numerous investors for his company, Orange Crest Realty,” investigators said. “Investors were promised a high rate of return for a short-term investment. Elderly victims later discovered that their life’s savings were being used to further a Ponzi scheme.”

    Shade had been living in Thailand for about two years, investigators said.

    In 2008, the California Department of Corporations issued a “desist and refrain” order against Shade and his company after alleging that they were selling unregistered securities and recruiting prospects  by urging them to “Get 18% APR Today” through the company’s “wonderful” investment.

    Shade and the company used a now-defunct website known as OCRFunding.com to pitch the purported program, authorities said.

    Among the misleading claims made to investors, according to authorities, were these:

    • That Orange Crest Realty was founded in 1993. (Authorities said Orange Crest Realty was not incorporated until June 2004.)
    • That Orange Crest Realty is a “registered investment advisor.” (Authorities said neither Shade nor the company and its associates were registered.)
    • That each investment was secured by actual title to specific existing real property. (Authorities said that “each investment was not secured by real property.”)
    • That a Deed of Trust And Assignment of Rents in the Property would be recorded with the Office of the County Assessor/Recorder and the investor would be provided with the recorded deed.  (Authorities said a deed promised an investor who sent in $50,000 was not recorded and the “investor never received a recorded deed.”)
    • That the investor would receive regular monthly interest payments. (Authorities said “payments ceased shortly after the investment was purchased.”)

    San Bernardino County investigators were assisted in the extradition by the Southwest Regional Fugitive Taskforce of the U.S. Marshals Service.

    The scheme, which allegedly gathered $14 million, also fleeced investors who responded to newspaper ads, investigators said.

  • Nicholas A. Smirnow, Pathway To Prosperity (P2P) Operator, A ‘Convicted Burglar, Robber And Drug Dealer’ Who Fleeced At Least 40,000 People In International Ponzi Scheme

    Here is how Pathway To Prosperity (P2P), operated by Nicholas A. Smirnow, was described by members of the indefatigable, Ponzi-pushing ASA Monitor forum in 2007:

    “Just talked with Nick today on the phone,” one member said. “I always enjoy talking with him — honest and straightforward.”

    “This one is a WINNER,” another crowed. “People, you don’t know what you are missing if you aren’t in this program.”

    Here is how a member of TalkGold, another Ponzi-pushing site, described P2P:

    “[T]his program will go a long way to bringing back stability to investment sites,” he wrote. “[T]his one you can trust 100% and also the admin Nick . . . come and join our happy group.”

    Here is how P2P was described by a member of MoneyMakerGroup, yet another Ponzi-pushing site:

    “[T]his is the kind of program that is needed,” the poster wrote. “p-2-p gives the little man a chance to invest and relax knowing your money will be safe at the end of the investment.”

    And here, according to the St. Louis Post-Dispatch, is how the U.S. Postal Inspection Service and federal prosecutors described Smirnow after charging him yesterday with operating an international Ponzi scheme that gathered more than $70 million and fleeced more than 40,000 people:

    “convicted burglar, robber and drug dealer who told a former employee that he was involved in a double homicide.”

    Smirnow, believed to be on the lam in the Philippines, used aliases such as Nicolay Smirnow, Alexander Judizcev, Nicholas Kachura and Jeff Prozorowiczm. The scam spread across the world, and P2P shielded itself by using a website in the Netherlands and a company incorporated in the Turks and Caicos Islands.

    Although the program pitched interest rates of up to 17,000 percent, a poster on ASA Monitor incongruously said, “This is not a HYIP — Nick does not believe in them.” Regardless, the same poster — despite his cheerleading — acknowledged he was worried “about the authorities getting in and shutting things down . . . but since it is not a site being heavily promoted like CEP and not so open, it may keep under the radar . . .”

    CEP was yet another Ponzi scheme.

    It has been an electrifying week for opponents of HYIP and autosurf frauds, who routinely are derided as “naysayers” by commission-grubbing pitchmen who spread Ponzi pain across the planet for a share of illegal profits.

    On Tuesday, the SEC announced it had charged Mazu.com operator Matthew J. Gagnon, 41, of Weslaco, Texas, and Portland, Ore., with helping “orchestrate a massive Ponzi scheme conducted by Gregory N. McKnight . . . and his company, Legisi Holdings, LLC.”

    The Legisi scheme raised about $72.6 million from more than 3,000 investors “by promising returns of upwards of 15% a month,” the SEC said.

    Like Pathway to Prosperity, Legisi also was promoted on ASA Monitor, TalkGold, MoneyMakerGroup and other forums criminals and their shills frequent to separate people from their money.

    A U.S. warrant for Smirnow’s arrest was issued yesterday — although Smirnow is believed to have been ducking Canadian authorities for months because of an investigation into his business practices.

    Smirnow now joins Robert Hodgins — yet another international fugitive allegedly associated with the drug and HYIP trades — on the lam.

    Hodgins, who provided debit cards for the alleged AdSurfDaily Ponzi scheme and is believed also to have a tie to the PhoenixSurf autosurf Ponzi scheme and other autosurf and HYIP schemes, is wanted for helping a Colombian narco business launder money at ATM machines in Medellin and also for accepting $100,000 in purported drug proceeds for laundering money in the Dominican Republic.

    INTERPOL is searching for Hodgins.

    Read the Smirnow story in the St. Louis Post-Dispatch.

  • 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?

  • Man Whose Company Supplied Debit Cards To AdSurfDaily Wanted By INTERPOL In International Money-Laundering Case; Robert Hodgins On The Lam

    Robert Hodgins: Source: INTERPOL

    The man who supplied debit cards to the AdSurfDaily autosurf is wanted by INTERPOL on an arrest warrant issued by U.S. District Court for the District of Connecticut, the international police agency says on its website.

    INTERPOL has published two photographs of Robert Hodgins, 65. People with information on Hodgins are urged to contact the General Secretariat of INTERPOL.

    Hodgins, whom INTERPOL says was born in Shawville, British Columbia, Canada, operated a Dallas-based company known as Virtual Money Inc. He was indicted under seal in 2008 in the United States on charges of assisting a Colombian narco-business launder money. He lived in the Oklahoma City area.

    His company, known as VM, was featured in advertising materials for ASD in 2007, and records suggest Hodgins or a VM designate participated in an ASD function in Orlando in late 2006. Five people have been convicted to date in the drug and money-laundering case, including two

    Robert Hodgins: Source: INTERPOL

    individuals from Medellin, Colombia, according to records. Medellin was the home base of the late drug lord and terrorist Pablo Escobar.

    Web records suggest VM supplied debit cards to other autosurfs and HYIPs, and the company’s name in mentioned in the Ponzi scheme litigation against ASD and in court papers in the PhoenixSurf Ponzi scheme.

    PhoenixSurf was sued successfully by the SEC in 2007.

    The criminal case against Hodgins was brought by the U.S. Drug Enforcement Administration after an undercover operation.

    In September 2008 — about a month after the U.S. Secret Service seized tens of millions of dollars from ASD President Andy Bowdoin amid wire-fraud, money-laundering and Ponzi scheme allegations in the District of Colombia — the indictment against Hodgins was unsealed in Connecticut.

    Some ASD members said they saw huge sums of cash and suitcases full of cashier’s checks at ASD “rallies” in American cities, leading to questions about whether the company was being used as a front for criminal enterprises.

  • ASD ALL OVER AGAIN? Gold Nugget Invest (GNI) Collapse Brings Out The Conspiracy Theorists, Apologists; Theorists Claim Interpol Investigating SEC

    EDITOR’S NOTE: Conspiracy theories quickly became part of the AdSurfDaily story after federal agents seized tens of millions of dollars from the company in August 2008 amid Ponzi scheme allegations.

    Yesterday reports surfaced that Gold Nugget Invest (GNI), a High Yield Income Program (HYIP) positioned as a betting arbitrage, had collapsed. GNI reportedly announced that it had engaged in forex trading, an announcement that surprised some members who apparently believed they had invested in a sports-betting enterprise.

    As was the case with ASD, conspiracy theories surfaced quickly after GNI’s purported collapse. The post below summarizes some of the early, tortured claims.

    Here, now, the post . . .

    UPDATED 10:26 A.M. ET (U.S.A.) Did you know any of the following things:

    That Interpol had unearthed a complex plot by Former President George W. Bush to undermine the world economy and install banking puppets?

    That Bush had started “drug trafficking operations,” funding them with Ponzi proceeds and profits from manufacturing weapons?

    That Interpol was investigating the SEC for financial crimes and that others were suing the SEC for $3.87 trillion because the agency and President Bush somehow had established a secret trading platform and were operating their own Ponzi scheme on Wall Street?

    That at least one member of President Obama’s cabinet recently had been secretly arrested for a crime related to “sabotage” and then, apparently, secretly released and permitted to continue in his old job?

    That Obama himself had been warned that he faced arrest for the manner in which he was running the country?

    That U.S. Attorney General Eric Holder and the attorneys general of the U.S. states have been warned secretly that they face arrest?

    That the U.S. government and its clandestine operatives somehow had staged the attempt to blow up a Northwest Airlines flight bound for Detroit on Christmas Day?

    That it was OK for GNI to collect large sums of money from new members — even if it knew it did not have the resources to pay its current members — because members’ first duty was to the company and not to themselves?

    That an apparent decision by GNI to lock up members’ funds for 14 months was entirely appropriate because its first duty was to save itself  so it later could redistribute the funds through a scheme with different rules?

    That members who placed money with the company and pulled it out with interest after 30 days were in no small part responsible for GNI’s problems?

    That criticizing GNI management in any way demonstrates that the critics are immature and not responsible adults?

    We knew none of these things until reports of GNI’s collapse and its hard-too-decipher “Re-organization” program surfaced yesterday. The reference to Interpol’s purported SEC probe  seems to be tied to SEC-initiated litigation against CMKM Diamonds and other individuals and companies.

    CMKM Diamonds was a Pinksheet stock.

    How all of the other conspiracy theories evolved is unclear.

  • EDITORIAL: Think ‘Offshore’ Means ‘Shelter’ From The SEC Or The FBI Or The IRS? Don’t Tell That To John And Marian Morgan — Or Jeffrey Lane Mowen

    You’ve seen the ads or heard the pitches trying to persuade you to put money in “offshore” ventures such as the AdViewGlobal, AdGateWorld and MegaLido autosurfs. You’ve been told they were safe. You’ve been told the people who run them are out of the reach of U.S. securities regulators and law-enforcement agencies.

    And you’ve been told your investment, which the surf purveyors call an “advertising” purchase, provides shelter from the FTC, the SEC and state attorneys general.

    Don’t tell John and Marian Morgan of Florida that “offshore” means “safe” and that “offshore” provides a blanket of protection from law enforcement.

    And don’t tell it to Jeffrey Lane Mowen, either.

    John and Marian Morgan were charged by the SEC in June with running a prime-bank scheme. They skipped the country rather than appear for a hearing in July, first going to Europe and later to Sri Lanka.

    Guess where they are now?

    John and Marian Morgan are in separate cells in a U.S. jail. In addition to the SEC’s civil charges, they now face criminal charges after being indicted by a federal grand jury. They did not outmaneuver the SEC. They did not outmaneuver the U.S. Marshals Service. They did not outmaneuver the FBI. They did not outmaneuver the IRS. They did not outmaneuver Interpol.

    Nor did John and Marian Morgan outmaneuver the government of Sri Lanka. They were arrested and jailed on the island, which is situated about 20 miles off the southern coast of India, in August. Sri Lanka deported them, and the United States brought them home earlier this month.

    morgansrilankaIt’s big news in Sarasota — and it should be big news among the autosurf or forex/HYIP schemers who are telling you the United States is powerless to act against “offshore” enterprises or people inclined to start a get-rich-quick program and then scurry offshore one step ahead of what surf promoters derisively describe as the “sheriff” or “Big Brother.”

    Do yourself a favor and read this story in the Sarasota Herald Tribune. Longtime opponents of the autosurf “industry” — in this upside-down world, the opponents are called “naysayers” and the Ponzi advocates are called “leaders” — will recognize the utter absurdity.

    Sadly, though, most of the “leaders” likely will be too busy “leading ” the troops to even bigger and better catastrophes to take the time to read it.

    Or they simply won’t care because leading people into catastrophes pays too well.

    If you missed it earlier, take the time to read this story on how the FBI brought home Jeffrey Lane Mowen from Panama to face charges in a Utah Ponzi case that now has morphed into murder-for-hire investigation.