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DEVELOPING STORY: Phil Ming Xu Of WCM777 May Be Under Arrest In China

UPDATED 3:11 P.M. EDT U.S.A. A report dated today at ShanghaiDaily.com says an individual “surnamed Xu” and associated with “World Capital Market Inc.” is “now in custody” after a police action against a “pyramid scheme” in China.

The PP Blog has contacted the U.S. Securities and Exchange Commission to determine if the person reportedly under arrest in China is “Phil” Ming Xu of the World Capital Market/WCM777 scheme from 2014.

If the individual proves to be the Xu in the SEC case, it would mean that Xu left the United States sometime after being charged civilly by the SEC in March 2014 with a fraud alleged to have gathered tens of millions of dollars. It also potentially means the scheme, which allegedly operated under different names and resulted in the appointment of a receiver by a U.S. federal court, continued offshore after the U.S. action.

Phil Ming Xu resided in Temple City, Calif., the SEC said in 2014.

From Shanghai Daily (italics added):

Last June and August, police received alerts from the People’s Bank of China and the Guangdong branch of China Securities Regulatory Commission that the company and its owners were not qualified to conduct public financing, and a criminal investigation began.

A U.S. criminal probe into World Capital Market and related companies or figures also is believed to be under way.

The WCM777 story in the United States has been consistently bizarre. MLM hucksters, for example, pitched the “program” in churches and claimed the company had given loans for spectacular sums to some top American businesses.

There also was a claim a former CIA operative was involved, that the appearance of “blood moons” in the sky would provide investors guidance, that Ming Xu had acquired a company that produced “Innocence of Muslims,” a film that has been described as anti-Islamic and denigrating to the prophet Muhammad, that Ming Xu was an educator at a purported university known as the Joseph Global Institute.

UPDATE 2:03 P.M. EDT MAY 17 U.S.A. The SEC said today that it didn’t have anything on whether the Xu reportedly under arrest in China is the Xu from the agency’s March 2014 case.

May 16, 2016
11,900 Claims Received In WCM777 Ponzi/Pyramid Case; Time To File Is Running Out

In the bizarre WCM777 Ponzi- and pyramid scheme, investors may not know what has become of Ming Xu and how much the equally bizarre Joseph Global Institute reportedly once operated by Xu and a former Mafia member continues to contribute to the vomitous madness.

What is known is that about 11,900 claimants have come forward. The number is included in a Dec. 4 report filed by Krista L. Freitag, the court-appointed receiver. The deadline for filing originally was Nov. 9. But Freitag, in October, asked the court to extend the deadline in part because too few claimants had surfaced.

U.S. District Judge John F. Walter of the Central District of California extended the deadline until Dec. 24 and empowered the receiver to take other actions “to increase the number of investor claims submitted,” according to the court docket.

The order seems to have aided the cause.

Noted Freitag in her report: “As proposed in the Receiver’s application, in addition to a reminder email blast notifying investors of the extended bar date and steps approved by the Court, the steps taken by the Receiver include opening a live telephone line for investor calls (which can be answered in six different languages), allowing investors to submit their supporting documents by mail, mailing physical notices to investors whose addresses are available from checks, and holding an in-person meeting in Los Angeles at which investors were able to submitting claims with assistance from the Receiver and her staff. As a result of these efforts, the response rate and number of claims received have increased significantly.”

As of Nov, 27, the number of claimants stood at approximately 11,900, the receiver noted.

Dec 8, 2015
WCM777/’Joseph Global Institute’: More Strange Turns Potentially Involving More Colleges And A Push Toward Offshore ‘Cryptocurrency’

SWIU.edu call itself Southwestern University and claims it is showing its front gate for its “main campus,” but it’s actually a gate at Eastern Connecticut State University.

UPDATED 4:06 P.M. ET U.S.A. Campus police departments at Southwestern University, Eastern Connecticut State University, the University of Wisconsin-Madison and Texas Tech University had no immediate comment today on a developing story that may be flowing from the bizarre WCM777 Ponzi scheme allegedly operated by SEC defendant Phil Ming Xu, also known as Dr. Phil Ming Xu.

In addition to pushing WCM777, Xu pushed something called the “Joseph Global Institute” alongside a former reputed member of the Mafia named “Dr. Bruno Caporrimo.” Joseph Global purportedly was a California University in Pasadena that offered a “College of Engineering,” a “College of Health, ” a “College of Media Arts” and a “College of Business.”

Everything about Joseph Global appears to have been bogus

On Saturday, the PP Blog reported that an entity that is calling itself “Southwestern University” and purports to have a campus in Georgetown, Texas, claimed it had taken over Joseph Global. This entity, which appears to have no affiliation with the actual Southwestern University in Georgetown, is using SWIU.edu as a URL. The actual Southwestern University uses Southwestern.edu.

Not only does SWIU appear fraudulently to be trading on the name of Southwestern University, it appears also to have ripped off images from the websites of Eastern Connecticut State University, the University of Wisconsin-Madison and Texas Tech to create a veneer of legitimacy.

At the SWIU site, for example, what is described as a photo of the “USA Main Campus Front Gate” appears actually be be a photo from the website of Eastern Connecticut showing its entryway.

Another photo at SWIU purports to be that of the “Main Library,” but it appears to be a photo from Wisconsin-Madison. Still-another SWIU photo depicts a statue of a man with a horse. This appears to be a photo of the statue of Will Rogers and “Soapsuds” at Texas Tech. There may be other misappropriated photos at the SWIU site.

Though SWIU calls itself “Southwestern University,” it developed today that an entity perhaps based in Singapore that calls itself the “WOW School of Excellence” is pointing visitors toward an entity dubbed SWIU — for “Southwestern International University.”

The reference at the WOW School site appears to be a reference to the SWIU domain, despite the fact the SWIU domain calls itself “Southwestern University” as opposed to “Southwestern International University.”

The WOW school website purports to train students in “cryptocurrency.” At the same time, it suggests it operates a “School of Business (School of Excellence in Digital Currencies for Asian Students.”)

“Our courses are currently affiliated with Southwestern International University (SWIU) and WOW Digital Academy,” the site claims.

WCM777 was a scam targeted in part at Asian communities. At the moment, any number of purported cryptocurrency schemes are targeting Asians and other population groups.

The SWIU website purports to be that of a Christian university led by individuals who hold doctorates in various academic disciplines. Videos for the Joseph Global Institute positioned Xu as the “dean” and Caporrimo as the “chancellor.”

Nov 11, 2015
SPECIAL REPORT: Accused WCM777 Ponzi Schemer Ming Xu Expressed Concern About Being Harmed, Says He Was Cooperating With Government; Purported Texas University Claims It Has Absorbed The Bizarre ‘Joseph Global Institute,’ Raising New Questions; WCM777 Claims Deadline Extended To Dec. 24

EDITOR’S NOTE: The story about Phil Ming Xu’s asserted cooperation with the government appears below the subhead. We’ll lead with the news of extension of the claims deadline for WCM777 victims.

If you’re a victim of the World Capital Market/WCM777 Ponzi- and pyramid scam shut down by the SEC last year, you now have until Dec. 24 — Christmas Eve — to file your claim.

The original claims deadline had been Nov. 9. On Oct. 26, court-appointed receiver Krista L. Freitag asked for an extension. U.S. District Judge John F. Walter of the Central District of California granted the request on the same day, extending the deadline until Dec. 24 and empowering the receiver to take other actions “to increase the number of investor claims submitted,” according to the court docket.

This is the URL of the receiver’s site: http://www.worldcapitalmarketreceivership.com/

This is the URL of the site to file claims: https://www.wcm777claimsprocessing.com/en/Home/Filing

Among other things, the WCM777 case demonstrates the logistical challenges posed by cross-border fraud schemes operating over the Internet and involving cash transactions and potentially thousands of domestic and international bank accounts, including at least 100 linked to accused WCM777 Ponzi schemer Phil Ming Xu alone. Victims from multiple countries piled up potentially by the tens of thousands. Not all of them spoke the same language and, as in similar scams, not all of them paid WCM777 directly. Rather, they paid their “upline” sponsor, making the task of following the money and filing a claim more difficult. (See March 15, 2015, PP Blog story: “WCM777: More Theft And Money Laundering MLM-Style.”

Phil Ming Xu Says He Cooperated With Government

The opening of a Phil Ming Xu declaration originally filed under seal in April 2014. The seal was lifted at the request of an investor and after federal prosecutors did not object.

The PP Blog is reporting today that Ming Xu claimed in an application to file certain information under seal in April 2014 that he was cooperating with the government on matters pertaining to alleged misdeeds by attorney Vincent J. Messina, a figure in the WCM777 story. The SEC previously had described Messina, believed to be in his eighties, as an “inactive” Florida lawyer. (Also see March 13, 2015, PP Blog story: “BULLETIN: CLAIM: Former CIA Operative Was Paid More Than $400,000 By Companies Linked To WCM Ponzi Scheme.”

Messina is alleged to have come into possession of $5 million in proceeds from the WCM777 fraud, some of which allegedly was directed to International Market Ventures, a company operated by Gary Messina, his nephew. Gary Messina formerly worked as the chief information officer for the Bureau of Citizenship and Immigration Services, an arm of the U.S. Department of Homeland Security.

Messina has been ordered to return the $5 million, and IMV — the recipient of a transfer from Messina — is on the hook for $941,505 of it.

The effort to lift the seal on Ming Xu’s April 2014 filings began more than a year later, on Aug. 21, 2015, with a filing by an alleged victim of Xu from Daly City, Calif. This individual asserted he’d wired $2,000 to HSBC Bank in Hong Kong as his initial investment in WCM, a company that “represented itself as a leader in China based business and finance.”

Walter lifted the seal in an order dated Sept. 14, after the office of U.S. Attorney Eileen M. Decker of the Central District of California did not object. Precisely what Decker’s office is investigating remains unclear, although tens of millions of dollars are alleged to have flowed through WCM and related entities.

Ming Xu once claimed campaign ties to Los Angeles Mayor Eric Garcetti, and Freitag has alleged a California lobbying firm received $750,000 from the fraud for the purposes of “locating and securing legislators, obtaining access to such legislative leaders in California and Washington, D.C., and communicating and recommending advocacy strategies and effective public relations programs with the government.”

It is not unusual for Ponzi schemers to rub elbows with famous politicians as a means of trying to sanitize their scams, Scott Rothstein being an infamous example.

How dangerous is the world of HYIP Ponzis? Well, the Press Democrat of Santa Rosa, Calif., reported in January 2015 that investigators believe a murder might be tied to WCM777 and a companion scam known as Kingdom777.

Ming Xu also was concerned about being harmed, according to his now-unsealed motion from April 2014 to file under seal. He did not list a source of harm, but with so much money and so many tentacles involved, it could be anybody — from a person down the street to a person overseas.

From the motion (italics added):

“Xu is making this request because public disclosure of his cooperation with the government, including the U.S. Attorney’s Office for the Central District of California and the Securities and Exchange Commission, could jeopardize potential criminal investigations and the use of proactive covert operations. If Xu’s cooperation was disclosed, potential subjects of the ongoing investigations may take certain steps to hide evidence and proceeds of criminal activity, flee the jurisdiction or potentially harm Xu or his family.”

As for what Ming Xu said in his actual declaration docketed in May 2014 and now public . . .

If you were pushing WCM777 during hotel pitchfests and in your church and continue to have doubt WCM777 was a Ponzi scheme, put those doubts to rest. The huckster conceded the Ponzi in his declaration, while alleging Messina also knew it was a Ponzi.

From the declaration (italics added):

“Mr. Messina knew the $5 million transferred to him was proceeds of an illegal Ponzi scheme and is being investigated by SEC and knew I was sending him the money to avoid detection and seizure of the funds by the federal government. I transferred the $5 million to Mr. Messina’s IOLTA account because he warned me the government would seize the money as illegal proceeds of the Ponzi scheme. Mr. Messina told me on several occasions that WCM had serious criminal and civil liability issues, and that he expected federal agents to show up at our office in Pasadena, execute a search warrant, seize all the computers, and other business records of WCM’s business operations.”

Ming Xu continued (italics added):

On or about February 27, 2014, Mr. Messina sent me a document to sign stating that the transfer of the $5 million was a non-recourse loan payable in full in five years. I executed the loan document after being advised to do so by Mr. Messina. The money I transferred to Mr. Messina was not truly a loan and the two-line document purporting to be a loan agreement is false.

On or about March 20, 2014, I wrote and sent a letter to Mr. Messina, wherein I demanded return of the $5 million transferred from the ToPacific bank account into Mr. Messina’s IOLTA account for SEC settlement. Mr. Messina refused to return the monies.

I have subsequently learned that Mr. Messina has disbursed some of these funds to an entity, International Marketing Ventures, a company that is controlled and operated by Gary Messina, his nephew.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

It is unclear if Ming Xu currently is cooperating with the government and how much his asserted cooperation in April 2014 helped in pursuit of the WCM777 case or other cases.

What is clear is that the WCM777 story has included a series of bizarre developments — everything from a pledge of love for the people of Peru written on the letterhead of a suspended California company and a recitation of the importance of “blood moons” to the appearance of a “Jesus sword” and the apparent involvement of a former CIA operative.

Strangest of all, though, may be the Ming Xu claim he was taking over a company linked to the film “Innocence of Muslims” as part of a bid to “transform nations” and “train a group of Josephs to bless the world.”

Who constituted the “Josephs” and how they would “bless the world” always has been unclear, as has the nature of the purported “training” they required. This particular segment of the WCM777 narrative is deeply strange in other ways. For example, a former reputed member of the Mafia named “Dr. Bruno Caporrimo” is part of the narrative and a purported Ming Xu associate.

So is a purported California university known as the “Joseph Global Institute” of which Ming Xu purportedly was “dean” and Caporrimo reportedly was “chancellor.” As the PP Blog reported last year, one promo for the institute appeared to rip off video footage from Liberty University, a well-known Christian college in Virginia.

‘Joseph Global Institute’ Narrative Evolves

Something that curiously calls itself “Southwestern University” even though it uses the four-letter acronym SWIU (at www.swiu.edu) now claims online that it has absorbed the Joseph Global Institute. Best we can tell, SWIU stands for “Spirituality Wisdom Inspiration Understanding” and appears not to be affiliated with Southwestern University of Georgetown, Texas, which uses www.southwestern.edu. SWIU purports to have a campus at 4040 Saltburn Drive in Georgetown, but the city does not have such a street, the Georgetown Police Department told the PP Blog today. (The city of Plano, nearly three hours from Georgetown, has a Saltburn Drive.)

The Joseph Global Institute previously planted the seed it was affiliated with Harvard.

Some people have blamed the “Innocence of Muslims” film for the Sept. 11, 2012, attack on U.S. outposts in Bengazi, Libya, that killed Ambassador Chris Stevens and three other Americans. The issue has dogged former Secretary of State Hillary Clinton, now a Democratic candidate for President of the United States.

The WCM777 Ponzi-scheme story has proceeded through all sorts of tortured twists and turns, creating nonfiction that reads like fiction. Although it not unusual for bizarre narratives to accompany Ponzi schemes, the narratives surrounding WCM777 are particulary bizarre — and Americans should be concerned and follow developments closely.

NOTE: Our thanks to the ASD Updates Blog.

Nov 7, 2015
EDITORIAL: MIXED MLM MESSAGING: As Herbalife Announces FTC Probe, TelexFree Cheerleaders Plant Seed That Obama Gave Their ‘Program’ An Exemption From Securities Laws

From a Blog leading dubious cheers for the TelexFree MLM “program.”

UPDATED 12:07 P.M. EDT (U.S.A.) You can’t blame legitimate MLMers if they’re feeling a little jittery. Herbalife, one of the industry’s stalwarts, is under investigation by the FTC, which has many duties, including enforcing laws against false advertising and pyramid schemes. Precisely why the FTC is investigating Herbalife is unknown. Hedge-fund manager Bill Ackman says Herbalife is a pyramid scheme that plumbs and churns vulnerable population groups. (See Nov. 13, 2013, PP Blog editorial: “Herbalife And Polarization In The Latino Community.”)

A public company, Herbalife itself announced the probe on March 12, saying it had received a “Civil Investigative Demand” (CID) and will “cooperate fully” with the agency.

But even as Herbalife wore a confident face and shared the FTC news, others within the MLM realm were making the trade look ridiculous on a global scale. MLM already is known for train wrecks (see example) and spectacular PR gaffes (see example). The sorry circus taking place outside of Herbalife’s immediate sphere of influence (see below) couldn’t come at a worse time for the firm.

To Herbalife’s credit, there was no attempt to demonize the FTC or pretend the CID was unimportant. So, score an early point for the supplement-maker in the category of PR awareness.

The unfortunate reality for Herbalife, however, is that it is ensconced in an industry that serves up one outrageous scam after another. And because some quirky or downright bizarre MLM “programs” have shown an almost unbelievable ability to raise tremendous sums of money quickly, the issue is not simply about a PR deficit. It’s also about national and cross-border security.

That’s why Herbalife’s conduct while it is under investigation by the FTC matters to the entire trade.

Attempts by Stepfordian MLMers to paint law enforcement as the enemy and dismiss the importance of a CID sent by North Carolina Attorney General Roy Cooper to the Zeek Rewards MLM “program” in July 2012 made MLM look silly. Claims from Zeek’s Stepfordian wing that the receipt of a CID was “exciting” news made it look beyond clueless.

Whether the trade likes it or not, all of this Stepfordian behavior gets pinned on “MLM.” And MLM therefore looked particularly ridiculous when the SEC, a month after the North Carolina CID, described Zeek as a Ponzi- and pyramid scheme that had gathered hundreds of millions of dollars in less than two years and had ripped off hundreds of thousands of people by planting the seed it paid an interest rate of 1.5 percent a day and that earnings could be “compounded.”

So, if you’re a legitimate MLMer and need a comforting thought, here’s one for you: Unlike Zeek, Herbalife isn’t trying to sell the “exciting” angle to its legions of members during a government probe. And here’s a tip for legitimate MLMers and individuals considering signing up for an MLM: When someone tells you a government investigation is exciting news, get the hell off the list or stop reading the Blog. Recognize that you’re being splashed with sugary vomit and programmed by an MLM Stepfordian.

The PP Blog’s analysis of Zeek is that it was a criminal enterprise from the start that was designed in part to reel in participants dissatisfied with traditional MLM companies such as Herbalife that sell the dream but have low distributor success rates and high burn rates. Refugees from Herbalife and other traditional MLMs were perfect marks for Zeek’s MLM, a collection of predatory vultures unlike the MLM world had ever seen.

We’re bringing this up because MLM so often ventures into Stepfordland. So, odd as it sounds, Herbalife did itself (and the industry) a favor by avoiding the word “exciting” when describing a CID. For perfectly understandable reasons, it allowed only that it “welcomes the inquiry given the tremendous amount of misinformation in the marketplace” and that it is “confident that Herbalife is in compliance with all applicable laws and regulations.”

Even though Herbalife did not fumble the ball when announcing the probe, the company still needs to work on its messaging. Last year, when the firm was confronting Ackman’s pyramid allegations and companion assertions that it was plumbing and churning Latinos/Hispanics to sustain growth, Herbalife described former U.S. Surgeon General Richard Carmona — a new appointee to its board — as “[b]orn to a poor Hispanic family in New York City.”

In highlighting Carmona’s circumstances as a newborn delivered into poverty in the Big Apple more than 60 years ago, Herbalife perhaps was projecting some stress. Whether it also was projecting an accidental hint of a Stepfordland within Herbalife remains on open question.

Given the disturbing plumbing-and-churning assertions against the firm, Herbalife would have done better by simply announcing Carmona’s appointment and including only his academic/business/public-service credentials in the announcement. It doesn’t matter that other enterprises with which he is involved have used the same line about hailing from a “poor Hispanic family” to describe him. They’re not being accused of pillaging vulnerable populations.

In short, Herbalife cannot afford to be seen as a Stepfordland company. Nothing can erode marketplace confidence faster.

Poor or even insidious messaging has harmed MLM for years. It is an industry that, unfortunately, is known for serial disingenuousness, absurd misrepresentations, gross distortions, impossible constructions and outright lies.

How Other Industry Messages Could Hurt Herbalife

On March 11, a day before Herbalife announced the FTC probe, members of the TelexFree MLM were taking to the web and planting the seed that President Obama had TelexFree’s back. The assertions are either a gross misunderstanding of the JOBS Act and the concept of raising startup capital through crowdfunding or a typical MLM lie to provide extra cover for the scheme. (See Google Translation from Portuguese to English here. See original here.)

For starters, TelexFree, which appears to have gathered $1 billion or more in less than two years, wants the public to believe it is not selling securities, despite affiliate claims the “program” delivers “passive” income. Moreover, it is not raising capital under the JOBS Act, which is a work-in-progress. In October 2013, the SEC formally proposed that a “company would be able to raise a maximum aggregate amount of $1 million through crowdfunding offerings in a 12-month period.”

The sum of $1 million is less than the sum TelexFree pitchman and former SEC defendant Sann Rodrigues says he’s earned from TelexFree since Feb. 18, 2012.

Rodrigues started pitching TelexFree before the JOBS Act even became law and before the SEC even promulgated rules. So, strike the JOBS Act claim.

Beyond that, TelexFree is under investigation by the Securities Division in its home state of Massachusetts. There’s also at least one probe in Africa, specifically in Rwanda, where a genocide occurred in the 1990s. Meanwhile, in South America, Brazilian prosecutors have called TelexFree a pyramid scheme. Police in Europe have issued warnings about TelexFree, amid concerns that the “opportunity” is targeting the Madeiran community.

At a minimum, TelexFree is at least as clueless as Zeek, home of the “exciting” CID. As noted above, TelexFree pitchman Sann Rodrigues is a former defendant in an SEC pyramid-scheme and affinity-fraud case. If that weren’t enough, TelexFree executives and reps apparently have access to a “private jet” that recently made a flight between the Dominican Republic and Haiti.

Passengers on the “private jet” reportedly were met by the motorcade of Haiti’s Prime Minister, according to a TelexFree rep who was selling a credit-repair “program” from the stage of a Massachusetts hotel while telling the Haiti story.

If there’s a surefire way to destroy the public’s confidence in the emerging JOBS Act, it’s for a bunch of MLMers to go around planting the seed that the President of the United States has authorized TelexFree as a crowdfunding company — and to water that seed by talking about “private jets” that can be flown by the TelexFree MLM into Haiti to line up struggling Haitians to sell credit repair and financial advice to struggling Americans.

Yes, we know: It’s altogether too much to believe. But the bitter reality for MLM — and therefore for Herbalife — is that it’s actually happening.

TelexFree says it’s in the communications business, and is expanding from VOIP into cell phones and, highly curiously, credit repair and financial advice. This is an MLM quagmire if ever there was one, especially since American MLMers say sums from $289 to $15,125 sent to TelexFree virtually triple or quadruple in a year.

If MLMers ever wonder why the trade has so many critics, they need look no further than TelexFree or Zeek before it.

With Zeek smoldering in the ashes of Ponzi/pyramid history and TelexFree serving up a current symphony of the bizarre, the MLM trade now also is confronting yet-another epic PR disaster — namely, a “program” known as WCM777 that, like TelexFree, is under investigation in multiple countries.

Like TelexFree and Zeek, WCM777 also promoted preposterous returns.

But that might be just the beginning of WCM777’s problems. Among other things, WCM777 has claimed it is “Launching The Way TV to transform nations & Joseph Global institute to train a group of Josephs to bless the world.”

But the “Joseph Global Institute” and a companion enterprise that trades on the name of Harvard appear to be shams. And The Way TV launched long ago through an entity known as Media for Christ, which became the center of an international firestorm over a production known as “Innocence of Muslims.”

Particularly disconcerting now are reports that tens of millions of dollars may have gone missing from the WCM777 coffers. In 2013, the SEC alleged that a “program” known as Profitable Sunrise may have gathered tens of millions of dollars before disappearing.

Don’t kid yourself: There is no doubt that the circumstances surrounding some MLM “programs” are affecting economic security and contributing to concerns about national security.

MLM Minefields

As noted above, precisely why the FTC is investigating Herbalife is unclear. The Zeek case initiated by the SEC, however, could supply a clue or even a specific reason for the U.S. government to be concerned about Herbalife. A look at the list of alleged “winners” by the court-appointed receiver in the Zeek case suggests that Zeek became popular in immigrant communities, which may signal MLM affinity fraud on top of Ponzi and pyramid fraud.

It also may signal immigrant-on-immigrant crime under the MLM umbrella.

This information is preliminary, meaning a more thorough analysis is needed. But it at least suggests that some MLMers are proceeding from fraud scheme to fraud scheme and either laying waste to immigrant communities in the United States or setting the stage for immigrant populations to become immersed in litigation and MLM scams.

The surname name of “Johnson,” for instance, is one of longstanding in America. So, it can be expected that a major fraud scheme with 1 million or so members such as Zeek would pull in a number of people with that last name. There are about 45 people with that name on the Zeek list.

At the same time, there are about 60 people on the list with the Asian name of “Li.” So, “Li” has significantly more appearances than “Johnson.”

And what about “Smith,” another traditional American name? Well, there are about 52 “Smiths” on the list. Contrast that with the names “Nguyen” (about 146) and “Chen” (about 137).

There also are many Latino/Hispanic names on the Zeek list. Mind you, this is the list of alleged Zeek winners, not losers. The list of losers — perhaps as many as 800,000 — is not publicly available. (Because it is believed that many Zeek members had multiple user IDs, the number of user IDs may exceed the actual number of losers. But even if the 800,000 figure only incorporates user IDs, it remains troubling. The early data on the winners’ names suggest that immigrants could have been targeted as marks by other immigrants and also by long-established American MLMers.)

Latino groups have voiced concerns about Herbalife targeting vulnerable populations. With Zeek data suggesting such targeting occurred within Zeek, the MLM trade have may to confront some tough questions: Is a mature American MLM market being shored up by a disproportionate share of recent or relatively recent immigrants? And are American MLM companies prospecting in new lands creating losing propositions for the native inhabitants of those lands?

TelexFree certainly has targeted Portuguese and Spanish speaking populations — in the United States, Brazil and elsewhere. So has WCM777, which also has targeted Asians and Asian-Americans.

People are free to criticize Bill Ackman’s assertions that Herbalife is a pyramid scheme that is targeting vulnerable populations. But if MLMers who criticize Ackman expect to be taken seriously, they’d better be able to explain what appears to have happened at Zeek and what appears to be occurring now with both TelexFree and WCM777.

U.S. MLMers of any stripe — from longstanding citizens and naturalized ones to individuals hoping one day to proudly call themselves Americans — need to say no loudly to “programs” such as Zeek, TelexFree and WCM777.

And at a minimum, Herbalife needs to stop selling a message of “get rich quick” or turning a blind eye to it and stop trying to explain away its burn rate as the byproduct of affiliates who didn’t work hard enough to realize the dream.

Herbalife cannot be blamed for Zeek, but the burn rate may explain how Zeek and similar schemes rise to cherry-pick traditional MLMers and their recruits who have made little or no money with companies such as Herbalife.

No matter what the FTC has on its mind, any assertion by Herbalife that its current program is exemplary will be the strongest evidence of all that it, too, resides in MLM La-La Land. That would be a tragedy, given that Herbalife is viewed in the MLM community as a beacon of freedom.

Mar 16, 2014
SPECIAL REPORT: WCM777 Says Its U.S. Operations ‘Will Be On Hold Until Further Notice’ Because Its Securities Sales ‘Failed To Fully Comply With Laws And Regulations In United States’ — But Will The ‘WCM 777 Boston’ Band Play On In Houston? And What About The Highly Curious ‘Joseph Global Institute?’
EDITOR’S NOTE: This story covers highly curious events associated with WCM777 and related entities or people. In this post you’ll find:
- News on yesterday’s announcement by WCM that it had mothballed its U.S. operation that sells securities.
- Questions about whether a WCM777 event scheduled over the next two days in Houston would occur or whether TelexFree, a company under investigation in Brazil amid pyramid-scheme allegations, could become the “opportunity” promoted at the Houston event.
- News about confusion associated with a strange entity known as the Joseph Global Institute, purportedly operated by WCM777 executive Ming Xu. Ming Xu also is known as “Dr. Phil Ming Xu” and “Dr. Philip Ming.” A website associated with the Joseph Global Institute appears to have preemptively declared the enterprise a university that confers graduate and postgraduate degrees, but is showing videos that appear to be owned by Liberty University in Lynchburg, Va. The Liberty videos have led to questions about whether Joseph Global potentially is duping visitors into believing the Liberty students who appear in the videos are Joseph Global Institute students or whether Joseph Global is a California branch of Liberty.
- News about strange claims that WCM777 was “launching” an enterprise that actually launched long ago and became the center of an international media and diplomatic firestorm in 2012 over its reported ties to the controversial film, “The Innocence of Muslims.”
____________________________________

UPDATED 6:56 P.M. ET (U.S.A.) WCM777 announced yesterday on its website that it was out of compliance with U.S. regulations and thus had put its U.S. securities operations “on hold.” Whether the purported “opportunity” whose affiliates claim can cause $14,000 to turn into $500,000 in 52 weeks had been notified by WCM777 to stop pitching U.S. prospects is far from clear.

The news of the U.S. halt first was reported by BehindMLM.com.

Left unsaid by WCM777 in its announcement was how the purported opportunity intends to address potential claims from untold scores of U.S. residents, including residents who attended pitchfests in hotels and churches and who might have purchased its securities. It is known from public records that Massachusetts purchasers were offered refunds. On Nov. 14, the state alleged WCM777 was selling unregistered securities.

The WCM777 announcement did not address whether the “opportunity” had reported itself to the SEC. Nor did it say whether it had been contacted by the SEC. Until yesterday, the company never had directly addressed the Massachusetts allegations, hinting only that things had to change at WCM777.

Another major concern: If WCM777 is selling unregistered securities, so is its stable of thousands of promoters, including those outside the United States who can solicit U.S. residents over the Internet. In theory, any U.S. -based promoter or international WCM777 promoter who continues to pitch the “opportunity” to U.S. residents could be charged under U.S. securities laws or the securities laws of the U.S. states. Whether WCM777 has the ability to block U.S. registrations is unclear.

Will The WCM777 Band Play On In Houston?

At the time of this PP Blog post, an apparent WCM777 affiliate site dubbed “Wcm777 Boston” on Facebook appeared not to know that WCM777 is closing shop in the United States. Nothing about WCM777’s announcement about its lack of compliance and the asserted halting of its U.S. securities operations appears on the Boston Facebook site. Indeed, at the time of this post, it was still promoting a WCM777 pitchfest set for tomorrow and Saturday at the “Crown plaza northwest brookhollow.”

“i just arrived in houston…. any question about the up coming meeting inbox me… dont lose this opportunity to learn about multi level marketing,” a post dated yesterday at the Boston Facebook site read. Meanwhile, a Nov. 1 post at the Boston Facebook site touting the purported daily payout of WCM777’s $1,999 plan reads, “U$32.00 DOLLARS EVERY DAY. NON STOP Daily Cash Flow NO Selling Required…coming soon, meeting in Houston, 11/22 and 11/23 . . .”

Whether the WCM777 affiliate who runs the Wcm 777 Boston Facebook site will follow through with the plan to pitch WCM777 at the event — despite WCM777’s own confirmation it was operating illegally and was halting the sale of its own securities — is unclear. Continued sales of WCM777’s offerings could trigger even more scrutiny of the firm and its affiliates. Attendees at the Houston event who plowed any money into the WCM777 scheme all could become potential litigants against the Boston pitchman and WCM777 itself. If the Boston pitchman is aware or becomes aware of WCM777’s announcement before the Houston event and seeks to pitch something else, he may find himself addressing a confused and hostile crowd.

The Wcm777 Boston Facebook site has associated itself with a street address in Boston, although the asserted phone number for the site uses an area code from a different region of Massachusetts. Whether the operator of the Facebook site had traveled from Boston (or elsewhere in Massachusetts or another state) to host the Houston event is unclear.

Because the “Wcm777 Boston” Facebook site also references TelexFree in a Nov 10 post, attendees of the Houston event might find themselves getting pitched on that alleged pyramid scheme, too. TelexFree is under investigation in Brazil. The Nov. 10 post reads, “I do have a bunch guys in Houston area, my downlines on wcm777 and Telexfree, they will be more than happy to talk with you… Thank you again.” It is positioned alongside the logo of the National Football League.

The Nov. 1 post that reproduces the NFL logo contends that two lucky prospects who attend the Nov. 22 and 23 WCM777 event in Houston will receive free tickets to “JACKSONVILLE VS HOUSTON.” The game is set for Sunday in Houston. Whether Ponzi or pyramid proceeds were used to pay for the tickets is unclear.

Also unclear is precisely how the Boston affiliate is conducting business with WCM777 and recruits. Asked to provide payment proof, the Boston affiliate contended this in a Nov. 10 Facebook post: “I work with wcm for 3 Months and I had never need to transfers money my bank account because I use my credit to sign people up, if you not happy with screenshots unfortunately I don’t have deposits transfers to my bank account from wcm777…” (Unedited by PP Blog.)

The post introduces the possibility that the Boston WCM affiliate somehow is paying recruits’ way into WCM777 and relying on reimbursement later, a common occurrence in HYIP scams. Whether that reimbursement would come from the prospects or the company is unclear. On Oct. 30, the PP Blog reported that a WCM777 affiliate on YouTube claimed, “I just had some[one] wire me from Mexico . . . $6,000 for three units. I’m signing up another person [in] [Florida?] for six units as well — excuse me, three units as well — another $6,000. And this is just going nuts.”

The YouTube claim raises the specter that individual WCM777 promoters are accepting national and international wires from WCM777 recruits and somehow later transferring the money to WCM777. Such practices have been associated with cross-border securities scams, including the infamous Imperia Invest IBC scam in which the SEC accused a promoter of creating at least two business entities and using them to wire money to the Imperia scammers outside the United States.

Making matters even stranger is the wording of WCM777’s announcement that it was halting its U.S. operations in the aftermath of a Nov. 14 consent order it entered into with the state of Massachusetts, which accused it of selling unregistered securities and benefiting from an affiliate’s targeting of the state’s Brazilian community. WCM777’s announcement is dated Nov. 20, six days after the order in Massachusetts. The announcement did not explain the delay in addressing the Massachusetts allegations. Nor did it explain why WCM777 hadn’t previously announced it was under investigation, only to claim later that “negotiations” went well — as though it were common knowledge that the firm was the subject of a securities investigation.

Moreover, the timing suggests that WCM777 continued to benefit from the sale of unregistered securities across the United States even after the Nov. 14 order. Beyond that, it is far from clear whether WCM777 even has control over its U.S. affiliate base or affiliate bases elsewhere in the world. What is clear is that WCM777 is positioned as an opportunity for Christians to prosper.

Here is WCM777’s Nov. 29 announcement in its entirety (italics added):

WCM777 Response to Massachusetts Consent Order

The negotiations between our lawyers and the Massachusetts’ Office of the Secretary went well. We have reached a settlement with Massachusetts.

However, because the sale of securities failed to fully comply with laws and regulations in United States, our operations in the U.S. will be on hold until further notice; WCM Limited will continue operations. The company will implement new compliance procedures and register with the SEC before selling securities. Our customer service, IT support, and sales training are far from ideal. Especially in sales training, we don’t have a proper system set up. Some of the distributors have exaggerated the sales performance, which has led to complaints. The company system also needs to be further improved to ensure global legitimacy.

Under the counsel of the lawyer, WCM777 has already registered in the state of California. We will soon re-enter the U.S. market. Also, WCM777 will hold the grand opening for Hong Kong office in Dubai this coming January. We will restore WCM777’s promise and move towards achieving our vision!

Why WCM777 would hold a “grand opening” for a “Hong Kong” office in Dubai is unclear. Dubai is a city in the United Arab Emirates. Also unclear is how WCM777 intends to comply with securities regulations in all 50 U.S. states, plus federal territories and districts such as the District of Columbia (Washington, D.C.).

Because virtually all developed nations regulate the sale of securities, WCM777 may face challenges across the globe. The scheme already is under investigation in Colombia, and there are reports that Peru has concerns.

Affiliates, meanwhile, now have been officially blamed by WCM777 for exaggerating the offering and causing complaints, a classic corporate narrative in the HYIP world. While it is clearly true that affiliates have made outrageous claims that reflect their own lack of due diligence on the purported “opportunity,” it is equally true that WCM777 has advertised that a payment of $1,999 returns $3,200 in 100 days.

Other Curious Issues

An entity tied to WCM777’s purported operator Ming Xu — the Joseph Global Institute of Pasadena, Calif. — appears to be implying it operates a university that offers a “College of Engineering,” a “College of Health, ” a “College of Media Arts” and a “College of Business.” A website using the Joseph Global Institute name is accessible through a website that uses the famous name of “Harvard” as part of the URL.

The site shows images of smiling, college-age students wearing graduation caps and holding what appear to be degrees. Other smiling students are shown studying in front of something that resembles a university hall. Visitors to the site are prompted to watch three videos, but there are no disclaimers or language that the action shown in the videos isn’t taking place at Joseph Global. All three videos appear to be owned by Liberty University, a large Christian university in Lynchburg, Va. Nothing on the Joseph Global Institute site, however, identifies the videos as belonging to Liberty and not to Joseph Global, a potential source of confusion.

A text line below the videos on the Joseph Global site reads, “Want to see what we offer? Request a brochure here and get a tour of our school.”

Why Joseph Global appears to be implying that it operates a university is unclear.

Liberty University did not respond to a PP Blog request for comment about whether it was aware of the Joseph Global site.

The strangest thing yet: A Nov. 18 Twitter post attributed to “Dr. Phil Ming Xu,” the purported operator of WCM777, says, “Launching The Way TV to transform nations & Joseph Global institute to train a group of Josephs to bless the world.”

But The Way TV is something that launched years ago, through an entity known as Media for Christ. Media for Christ is based in Duarte, Calif. — and has a history that includes being at the center of an international firestorm.

That firestorm centered on the inflammatory trailer of a film production known as “Innocence of Muslims,” which has been described as anti-Islamic and denigrating to the prophet Muhammad.

Here’s how the Los Angeles Times put it on Sept. 13, 2012 (italics added):

Joseph Nassralla Abdelmasih, the president of the Duarte-based charity Media for Christ, and Nakoula Basseley Nakoula, a convicted felon from Cerritos, emerged Thursday as forces behind “Innocence of Muslims.” An online trailer for the low-budget film incited violence in recent days across the Arab world.

Nassralla later reportedly told the website AtlasShrugs2000 that he’d been duped by Nakoula into believing Nakoula was making a film about the persecution of Christians and he understood from Nakoula that the film was titled “Desert Warrior.”

What was supposed to be a film about members of one faith persecuting members of another turned out to be something quite different: a film that portrayed Muhammad, a sacred figure, as a buffoon.

Quoting Nassralla, AtlasShrugs2000 reported this on Sept. 17, 2012 (italics added):

Nakoula needed a place to film. So I let him use my facility – that is all I did, and is the full extent of my involvement with this project. Nakoula used my facility for ten days. Media for Christ employees were given a vacation during that time, because Nakoula was using the facility and so there was no work for them. There was only one Media for Christ employee who remained, to answer phones for the ministry.

I later discovered that Nakoula, using the name Sam Bacile, had gone to LA Films as producer of Desert Warrior, and used the name of my organization, Media for Christ, to obtain the permit he needed. He did so without my knowledge or permission.

Now, the Twitter site under the name of WCM777 figure Dr. Phil Ming Xu is claiming it is “launching” The Way TV, something Nassralla already has launched. The Twitter site further claims the launch extends to the Joseph Global Institute, apparently the same entity that is advertising its operation of various “colleges” of higher education and showing website visitors videos of Liberty University students.

A letter attributed to “Dr. Bruno Caporrimo” at the site references the city of Duarte, the home of The Way TV and Media for Christ, the Nassralla enterprises. Caporrimo is referred to elsewhere online as a former Mafia member who found God.

Here is the opening of the letter, which is dated Nov. 16, 2013: (italics added):

Dear Potential Student,

My name is Dr. Bruno Caporrimo, Chancellor of Joseph Global Institute. At J.G.I. we have been training men and women for full time ministry, in a formal classroom experience as well as helping individuals gain a greater knowledge and understanding of the bible in order to fulfill the mandate of God’s calling in their lives. Our curriculum offers important bible doctrines in addition to the School’s emphasis on the practical side of ministry.

It is our desire to see the world evangelized and we believe that if people are trained and equipped, from the standpoint of their local church and community, that this mandate from the Lord Jesus Christ of Nazareth can be effectively realized and fulfilled in our generation. We currently have students from 50 different churches and from more than 10 nations around the world enrolled in Joseph Global Institute. J.G.I. has equipped and discipled into full and part time church and para-church ministry, over 5,000 students and they have embarked on their personal calling to fulfill the one great Commission of Matthew 28:19.

Whether you plan to study through our International headquarters & ‘Global Student Network’™ in Duarte, California, or through our Distance Learning and online Correspondence Courses™ we are sure that we have the tools and resources to launch and elevate your personal and ministerial calling SO THAT YOU CAN bear much fruit for the Lord Jesus Christ and to operate in faith, diligence and integrity for God’s Kingdom.

In a YouTube video dated Sept. 8, 2012, Caporrimo and Ming Xu appear. Ming Xu is described as the “dean” of the school and says, “If you want to get involved with us . . . we have bachelor degree[s], we have master degree[s.]” Caporrimo refers to Ming Xu as “Dr. Phil.”

The URL cited for the Joseph Global Institute in the video — TheJoseph.org — now rotates to a parked page for Sedo, a domain seller.

Another website associated with the Joseph Global Institute — JosephGlobalInstitute.com — shows some students holding books and others receiving degrees at a graduation ceremony. The JosephGlobalInstitute.com site uses the same logo as the website that uses Harvard’s name in its URL. The logos are similar in appearance to the logo of the actual Harvard University.

Also see coverage on the MLM Skeptic Blog about a purported Ming Xu entity known as the Harvard Global Institute.
Nov 21, 2013