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Tag: Liberty Reserve

  • BULLETIN: Legisi Receiver Goes After E-Bullion Assets Tied Up After Grisly California Murder; Robert D. Gordon Says More Than 85 Percent Of Funds Directed At HYIP Flowed Through Shuttered Processor

    This Legisi "Quick Start Manual" showed investors how to open payment accounts at E-bullion and e-Gold, both of which provided services to HYIP scams and both of which were implicated in money-laundering schemes. e-Bullion operator James Fayed was convicted in 2011 of arranging the grisly murder of his wife.
    This Legisi “Quick Start Manual” showed investors how to open payment accounts at e-Bullion and e-Gold, both of which provided services to HYIP scams and both of which were implicated in international fraud schemes. e-Bullion operator James Fayed was convicted in 2011 of arranging the grisly murder of his wife, a potential witness against him. (Source: federal court files.)

    UPDATED 5:08 P.M. EDT (U.S.A.) How dangerous and bereft is HYIP Ponzi Land? More than 85 percent of the $72.6 million directed at the Legisi HYIP Ponzi scheme before its May 2008 collapse flowed through the now-shuttered e-Bullion payment processor operated by convicted murderer James Michael Fayed, according to the court-appointed receiver in the Legisi case.

    Receiver Robert D. Gordon — noting he has consulted with federal prosecutors — now is asking a federal judge in Michigan for an order that would authorize him “to receive and collect any remission or restoration of funds recoverable or payable to Legisi investors pursuant to forfeiture actions brought by the United States” in federal court in Los Angeles.

    Fayed is sitting on California’s Death Row after his May 2011 conviction for ordering the brutal contract slaying of Pamela Fayed, his wife and a potential witness against him. Pamela Fayed was stabbed 13 times in a Greater Los Angeles parking garage on July 28, 2008. The Los Angeles Times reported her husband was seated on a nearby park bench “texting” on his cell phone while his alleged accomplices carried out the slaying.

    Gordon asked Judge George Caram Steeh of the Eastern District of Michigan for the order on June 6. About two weeks earlier, federal prosecutors in New York brought criminal charges against the Liberty Reserve payment processor, alleging that it had orchestrated a $6 billion money-laundering conspiracy. Both Liberty Reserve and E-Bullion were popular with HYIP scammers and other criminals.

    Legisi was a “program” promoted on Ponzi-scheme forums such as TalkGold and MoneyMakerGroup. The “program” resulted in both criminal and civil charges being filed against operator Gregory N. McKnight and online pitchman Matthew John Gagnon of Mazu.com. In 2010, the SEC described Gagnon as a serial pithman for fraud schemes and a “danger to the investing public.”

    Sentencing for Gagnon had been scheduled for yesterday. It now has been moved to July 9. McKnight, whom prosecutors said engaged in “semantic obfuscation” to raise millions of dollars in his HYIP fraud scheme, is scheduled to be sentenced Aug. 6.

    In his June 6 filing, Gordon alleged that McKnight “used e-Bullion as the vehicle to hold, receive and distribute funds from and to Legisi investors” and that McKnight used investor funds to invest in “various High-Yield Investment Programs.” He further alleged that Gagnon was a “prolific” user of e-Bullion and that “Mazu and Gagnon published on the mazu.com website how-to instructions for prospective Legisi investors to fund their accounts by opening an e-Bullion account.”

    From the receiver’s June 6 filing (italics added):

    The Department of Justice has established a remission process in the Central District of California to administer claims of former accountholders of e-Bullion a/k/a “Goldfinger Coin & Bullion.” McKnight, Legisi, and the majority of Legisi investors held accounts with e-Bullion. Mr. Gordon has made claims against the seized funds for the benefit of the Estates. In addition to direct claims on behalf of the Legisi-related entities, Mr. Gordon seeks to recover funds relative to Legisi investor accounts. To authorize such claims, officials at the Department of Justice have suggested an order from the Receivership Court stating: “Receiver is authorized to receive and collect any remission or restoration of forfeited funds recoverable by or payable to [Legisi Investors] pursuant to any civil or criminal forfeiture action brought by the United States in any federal jurisdiction.” Such an order would assist Mr. Gordon in recovering funds owed by net winner investors and in compensating victims of the Legisi scheme.

    E-bullion has been linked to multiple Ponzi schemes, including AdSurfDaily, Legisi, Gold Quest International and FEDI. The FEDI scheme has been linked to Abdul Tawala Ibn Ali Alishtari, also known as Michael Mixon. Ali Alishtari pleaded guilty in 2009 to financing terrorism and fleecing investors in the FEDI scheme.

    When a jury sentenced Fayed to death in 2011, Los Angeles Superior Court Judge Kathleen Kennedy described him as “one cold, calculating human being.”

    Here is how the U.S. Department of Justice is describing e-Bullion. (Note: this is reproduced verbatim from Gordon’s June 6 filing — with italics/bolding added):

    e-Bullion was a web-based money transmitting business operated by James Michael Fayed. e-Bullion allowed individuals to deposit money and purchase virtual “e-currency” that was purportedly backed by precious metal reserves maintained by Fayed’s companies in the United States and Australia. Accountholders could use e-currency to trade in goods and services with other accountholders. Federal investigators determined that many operators of fraudulent investment schemes used e-Bullion to collect millions of dollars from victims, much of which was wired to overseas accounts.

    In May 2011, Fayed was convicted of murdering his wife and is currently awaiting execution on California’s death row. On July 30, 2012, the United States Attorney’s Office for the Central District of California obtained a judgment in federal district court that resulted in the forfeiture of approximately $3.6 million in bank funds and $5.4 million worth of gold, silver, and platinum seized from two entities formerly controlled by Fayed – Goldfinger Coin and Bullion (GCB) and Goldfinger Bullion Reserve Corp (GBRC). In a related matter, the Australian Federal Police obtained a judgment resulting in the forfeiture of approximately $13 million in precious metals that were purchased and stored by Fayed in the Perth Mint in Australia. The funds forfeited in the Australia matter are also expected to be distributed to qualified e-Bullion accountholders through this remission process.

     

  • ‘Earn Profit Click,’ Scheme Targeted At Profitable Sunrise Victims On Facebook, Says It Will Build Its Program With Targeted Spam On Facebook And Twitter

    An emerging scheme that butchers the English language and contends it opposes spam also bizarrely says it intends to build its business by requiring members to post ads on Facebook and Twitter.

    Equally bizarrely, the scheme says it accepts Liberty Reserve, the now-shuttered payment processor implicated by the United States last month in an alleged $6 billion money-laundering conspiracy.

    The scheme is known as Earn Profit Click — or EPC for short. The PP Blog observed ads for the “program” over the weekend on a Profitable Sunrise Facebook site. The ads now appear to have been removed. Profitable Sunrise was a murky international pyramid scheme that may have gathered tens of millions of dollars by using offshore bank accounts, the SEC said in April.

    Since that time, pitches for reload scam after reload scam have appeared on the still-active Profitable Sunrise Facebook site. Both the SEC and FINRA have warned that scams are spreading via social media such as Facebook, Twitter, YouTube and others. EPC’s full name is similar to “ProfitClicking,” a scam that rose from JSSTripler/JustBeenPaid, an earlier scam that also used social media to spread.

    EPC is similar to Zeek Rewards in the sense that “members” are required to place ads for the “program.” In August 2012, the SEC described Zeek as a $600 million Ponzi- and pyramid fraud. Unlike Zeek, EPC appears to be trying to force members to post ads on specific social-media sites that may have heavy viewership. (Many Zeek ads were placed on classified-ad sites with low traffic; such also appeared to be the case with Profitable Sunrise.)

    Here is a verbatim snippet from the purported Terms of EPC (italics added):

    19. You have to post face book ads in a group which have at least 500 members. If you want to post the ad on any of your friends’ wall, then the condition is that your particular friend must have at least 300 friends in his friends list.

    20. If you post the ad on LinkedIn or twitter in a group then there should be at least 200 members in this group. If you post the ad on a friend’s wall then there should be 100 friends in his friends list.

    21. In a group, you can post maximum 2 ads in 24 hours.

    22. On a friend’s wall, you can post only one ad during 24 hours.

    23. By accepting terms and conditions, you will be bound to keep the marketing material confidential provided on website.

    Part of the "Earn Profit Click" pitch.
    Part of the “Earn Profit Click” pitch.

    Elsewhere on its site, EPC claims to be a “Rapidly spread advertising company” through which members can “earn thousands of free entry [sic] that are changing lives [sic] of thousands people [sic] . . .”

    Meanwhile, EPC makes this text declaration: “We are a win-win game players [sic], as we provide our members a suitable era [sic] to win high financial benefits and helps [sic] to make their financial future [sic] splendid. We have the best minds from the field of IT to assist you and to handle the operations of EPC. Our mature, dedicated and wonderful team has twenty years [sic] experience in the field of online home-based business.”

    A graphic on the site declares, “We are growing fastly [sic].”

    The site reproduces famous logos and appears to trying to plant the seed that well-known companies such as GoDaddy, HostGator and the Ernst & Young accounting firm somehow have endorsed EPC’s operations. (The PP Blog’s research suggest GoDaddy is the EPC domain registrar and that HostGator servers are being used.) Promos for various HYIP scams appear on the same page as the logos of the famous companies. The HYIP scams include FastCashMega (“Turn $10 Into $20,010 Without Recruiting”); “NonStopPayments” (“6% Daily For 180 Business Days”); and “WorldConsumerAlliance,” a “program” once known as “WealthCreationAlliance” that launched as a Zeek Rewards reload scam in 2012 and published ad after ad for HYIP scams.

  • BULLETIN: New South Wales Police Arrest Man For Fraud Crimes Allegedly Linked To Liberty Reserve

    breakingnews72BULLETIN: (UPDATED 11:43 P.M. EDT U.S.A.) The New South Wales Police Force (Australia) has arrested a 21-year-old man, amid allegations he was laundering money through Liberty Reserve. Officials did not identify the man in a news release announcing the arrest, but said he did not apply for bail and remains in custody.

    In a statement, police said the man was charged with one count of knowingly dealing with proceeds of crime with intent to conceal, one count of unauthorized function with intent to commit a serious offense and five counts of fraud.

    From the NSW Police Force (italics/bolding added):

    Last month, police officers from the Fraud and Cybercrime Squad formed Strike Force Kaye to investigate a large number of electronic devices, which were found following a search warrant at a property in The Rocks on 10 May 2013.

    Following a month-long investigation, police yesterday (Monday 10 June 2013) charged a 21-year-old man after he appeared in Central Local Court on other matters.

    In May, U.S. federal prosecutors in New York described Liberty Reserve as a criminal enterprise that had laundered $6 billion for various subgroups of scammers and criminals.

    Charged criminally in the United States last month were alleged Liberty Reserve co-conspirators Arthur Budovsky; Vladimir Kats, also known as “Ragnar”; Ahmed Yassine Abdelghani, also known as “Alex”; Allan Esteban Hildago Jimenez, also known as “Allen Garcia”; Azzeddine El Amine; Mark Marmilev, also known as “Marko” and “Mark Halls”; and Maxim Chukharev.

    The New South Wales Police Force did not specifically reference Liberty Reserve in its release announcing the arrest of the 21-year-old. Rather, the agency described it as a “Costa Rica-based currency transfer and payment-processing company” that “was shut down by an overseas government last month.”

    Liberty Reserve was tied in the U.S. indictment to the crimes of  “credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking.”

  • BBC HOST: ‘We Have An Idiot On The Program Today’ — And It’s Alex Jones

    Andrew Neil yesterday made the universal "[batspit] crazy" gesture after trying to interview Alex Jones of InfoWars.
    Andrew Neil yesterday made the universal “[batspit] crazy” gesture after trying to interview Alex Jones of InfoWars.
    HYIP apologists dating back (at least) to the AdSurfDaily Ponzi scheme in 2008 ($119 million) have bizarrely sought to defend their favorite scams by steering discussions off the track. Why talk about the recidivist securities felon who presided over ASD (Andy Bowdoin), for instance, when the “real menace” is the Bilderberg Group?

    And, hey, since the United States is a participatory Democracy, why not further cloud the issues by launching petition drives designed to derail the prosecutions of major Ponzi schemes (such as AdSurfDaily and Zeek Rewards) and even filing bogus liens for billions of dollars against judges, prosecutors and investigators?

    If you encounter an HYIP Ponzi scheme these days that perhaps purports to pay interest of 2 percent a day or more, it’s a safe bet you’ll encounter one conspiracy theorist after another on well-known fraud-scheme forums such as TalkGold and MoneyMakerGroup — especially if the evilGUBment brings a criminal or civil action against the purported “opportunity.”

    It was against this delusional backdrop that conspiracy theorist Alex Jones appeared on the BBC’s “Sunday Politics” program hosted by Andrew Neil. The subject was the annual meeting of the Bilderberg Group, sometimes known  simply as the Bilderbergers.

    One of the best moments of the program occurred near the end of the Jones segment, when Neil made the universal “[batspit] crazy” gesture after Jones shared a FEMA concentration-camp conspiracy theory and screamed that “you will not stop freedom! You will not stop the republic! Humanity is awakening!”

    Neil declared, “We have an idiot on the program today.”

    Among the bizarre claims of the AdSurfDaily apologists was that all commerce is lawful as long as the parties to a “contract” agree that it is lawful, a position that would legalize Ponzi schemes — and slavery and human trafficking and narcotics trafficking, for that matter. The U.S. Secret Service took down ASD, and promptly was called “Satan” by ASD operator Andy Bowdoin, now serving a 78-month prison sentence for wire fraud for his 1-percent-a-day scheme.

    The SEC took down Zeek Rewards in August 2012, amid allegations it was conducting a $600 million, international Ponzi- and pyramid scheme by duping people into believing they were receiving a legitimate return that averaged about 1.5 percent a day. A federal judge appointed a receiver, who quickly was described as a felon by a Zeek litigant. (The Zeek receiver is a former federal prosecutor who once successfully prosecuted a Hezbollah terrorist cell operating in the United States.)

    Back in 2008 and 2009, some of the ASD apologists accused a federal judge appointed by President George W. Bush of committing dozens of felonies and conspiring with a chief judge to deny ASD members justice.

    Why HYIP scammers seem to embrace the conspiracy theories of Jones long has been left to the imagination. One thing that is clear is that ASD and Zeek combined allegedly gathered $719 million. Some recent HYIP scams such as Legisi ($72 million) and JSSTripler/JustBeenPaid (unknown take) have required participants to avow they were not with the “government.” Legisi specifically named the CIA, FBI, SEC, “Her Majesty’s Police,” the Intelligence Services of Great Britain and the Serious Fraud Office, among others.

    Late last month, the United States — working with other countries — took down a major payment processor for fraud schemes. Its name was “Liberty Reserve.”

  • YouTube Video Pitchmen For Profitable Sunrise Hit By Subpoenas From SEC

    John Schepcoff says he potentially lost more than $193,000 in Profitable Sunrise but that a new “program” is “1,000 percent” better.
    John Schepcoff says on YouTube that he potentially lost more than $193,000 in Profitable Sunrise but that a new “program” operating from Hong Kong is “1,000 percent” better.

    EDITOR’S NOTE: Much remains murky about Profitable Sunrise, the alleged purveyor of five HYIP “plans,” including one bizarrely dubbed the “Long Haul” that purported to pay a preposterous 2.7 percent a day. The “Long Haul” payoff was dubbed the “Easter Gift.” Investors were told it would arrive April 1 — but it never materialized.

    One thing that is abundantly clear is that Profitable Sunrise potentially has created legal exposure and inconvenience for individual pitchmen, even though purported operator “Roman Novak” appears to be gone like a thief in the night.

    Still pushing HYIP schemes?

    _____________________________

    At least three Profitable Sunrise pitchmen — including at least two who pushed the “program” on YouTube — have been subpoenaed by the SEC to appear at depositions this month. The agency’s move is occurring in the aftermath of the depositions of at least two other Profitable Sunrise figures in Florida and Utah in April.

    In July 2010, the PP Blog reported that the Financial Industry Regulatory Authority (FINRA) warned investors worldwide “to stay away from HYIPs,” saying that they use social-media sites such as YouTube, Twitter, Facebook and online forums and “rating” sites to spread Ponzi misery globally.

    At least two of the men named in the new round of subpoenas went on to push other purported “opportunities” after the SEC described Profitable Sunrise in April as a murky HYIP that had used a “mail drop” in England and a series of offshore bank accounts in multiple countries to scam investors potentially of tens of millions of dollars.

    A subpoena was docketed yesterday in federal court in Atlanta for John Schepcoff of Carmichael, Calif. Schepcoff also is known as James Schepcoff, according to the SEC. His deposition has been scheduled for June 12 at 10 a.m. in San Francisco.

    After pitching Profitable Sunrise on YouTube prior to its March collapse amid especially murky circumstances, Schepcoff returned to YouTube in late April and began pitching yet another murky “program” purportedly operating from Hong Kong. Although the identity of the Hong Kong “program” was unclear, records suggest it was a Zeek Rewards-like “opportunity” known as “Better-Living Global Marketing.”

    In August 2012, the SEC described Zeek as a $600 million Ponzi- and pyramid scheme that had pushed unregistered securities on hundreds of thousands of people and duped them into believing they were receiving a legitimate return of about 1.5 percent a day. The U.S. Secret Service also said it was investigating Zeek.

    A subpoena also was docketed in Atlanta yesterday for video pitchman Melton McClanahan of Fairfield, Calif. McClanahan was identified in a March order by the Alabama Securities Commission (ASC) as a Profitable Sunrise agent. McClanahan then posted a YouTube video denying he was an agent and yet claiming the information he passed along to lure prospects “was given to me.”

    McClanahan’s deposition is scheduled for June 11 at 10 a.m. in San Francisco.

    An SEC subpoena also was docketed yesterday in Atlanta for Don Gillette of Miami. Gillette reportedly told members of his Profitable Sunrise downline that he was turning to a new “program” that “must have a realistic earning potential of at least $500 a day or more,” according to a post at the RealScam.com antiscam forum.

    Details about the scheduling of Gillette’s deposition are unclear.

    As part of its ongoing Profitable Sunrise probe, the SEC also has subpoenaed records at PayPal and at Societe Generale in New York, according to the docket of U.S. District Judge Thomas W. Thrash Jr. in Atlanta. Whether Profitable Sunrise or its members were using the companies to move money is unclear.

    One of the problems with HYIP schemes is that they may cause laundered funds or proceeds of criminal enterprises to pass through or be placed on deposit at legitimate financial institutions.

    News of the new round of Profitable Sunrise subpoenas follows on the heels of the takedown last month of Liberty Reserve, amid allegations it had orchestrated a $6 billion money-laundering conspiracy. Liberty Reserve was popular with HYIP scammers and other criminals.

    NOTE: Thanks to the ASD Updates Blog.

     

  • ULTIMATE INSULT? ‘ProfitClicking,’ A ‘JSSTripler’/’JustBeenPaid’ Reload Scam That Surfaced After Collapse Of Zeek Rewards, Now Called ‘ProfitCrapping’ On Ponzi Boards

    Frederick Mann
    Frederick Mann

    A “program” the PP Blog reported may have ties to the so-called “sovereign citizens” movement appears to have wiped out investors and perhaps zeroed out the purported earnings of many of them, according to posts at the MoneyMakerGroup Ponzi-scheme forum.

    In fact, according to one post, the “ProfitClicking” program perhaps now can be best described as “Profitcrapping.”

    ProfitClicking listed Liberty Reserve as one of its payment processors. On Tuesday, federal prosecutors in New York described Liberty Reserve as a massive criminal enterprise involved in the laundering of more than $6 billion. The effect of the Liberty Reserve action on Profit Clicking was not immediately clear.

    What is clear is that ProfitClicking was a fraud from the start. The “program” traces its roots to JSSTripler/JustBeenPaid, which promised a daily payout of 2 percent and purportedly was operated by Frederick Mann, a one-time pitchman for the collapsed, 1-percent-a-day AdSurfDaily Ponzi scheme. ProfitClicking surfaced after Mann purportedly retired suddenly in the days after the SEC took down Zeek Rewards in August 2012, amid allegations it had operated a $600 million Ponzi- and pyramid fraud that had duped investors into believing it provided a legitimate payout averaging about 1.5 percent a day.

    Prior to the emergence of ProfitClicking, Mann speculated that his JSS/JBP “program” could come under attack by American cruise missiles. He also has described U.S. government employees as “part of a criminal gang of robbers, thieves, murderers, liars, imposters.”

    Taking the time to ensure JSS/JBP was operating legally was a concession to slavery, Mann contended. Fellow AdSurfDaily figure Kenneth Wayne Leaming, a purported sovereign convicted in a plot to file false liens for billions of dollars against U.S. government employees, later contended that he was being held as a slave against his will.

    But even as Mann was sliming the U.S. government and calling its employees slavemasters, one of his JSS/JBP pitchmen was operating a site known as Vatican Assassins that contended “Majority Savage Blacks were never taught to behave in civil White Protestant culture and thus have been released upon us Reformation Bible-believing Whites to further destroy our once White Protestant and Baptist American culture founded upon the Reformation’s AV1611 English Bible and a White Protestant Presbyterian Constitution with its attached White Baptist-Calvinist Bill of Rights.”

    Some analysts have speculated that the name “Frederick Mann” (emphasis by PP Blog) is longhand code for “free man.” Purported “sovereign citizens” sometimes calls themselves “free men of the land.”

    Among other things, both JSS/JBP and ProfitClicking made members affirm they were not with the “government.” Mann declined to say where his “program” was operating from, a development that drew comparisons to the infamous BCCI banking scheme of the 1990s. BCCI, shorthand for Bank of Credit and Commerce International, purportedly was designed to be “offshore everywhere,”

    Liberty Reserve also has drawn such comparisons. (Link is to May 28 article in Vanity Fair.)

    Mann fell out of the Ponzi spotlight for a brief time after his purported retirement from JSS/JBP as ProfitClicking was gaining a head of steam.

    He soon was back, however — this time as a pitchmen for a “program” known as ClickPaid.

    The ClickPaid Terms — like the Terms of JSS/JBP and ProfitClicking — made members affirm they are not with the “government.”

    On May 29, the PP Blog reported that the Securities and Exchange Commission of the Republic of the Philippines had issued a warning on the JSSTripler/JustBeenPaid and ProfitClicking scams. JSS/JBP also came under investigation in Italy.

    A Ponzi-board program known as “Profitable Sunrise” also experienced the same fate in Italy.

    The U.S. SEC has described Profitable Sunrise as a murky “program” that may have collected tens of millions of dollars through offshore bank accounts. Profitable Sunrise had five HYIP plans, including one bizarrely dubbed the “Long Haul,” which purported to pay 2.7 percent a day — more than Zeek, more than ASD, more than JSS/JBP, more than ProfitClicking, more than ClickPaid.

    A website linked to Mann once linked to videos featuring Francis Schaeffer Cox, a purported “sovereign” and “militia” man implicated in a murder plot against public officials in Alaska.

  • UPDATE: 2 Liberty Reserve Figures Jailed In New York; 1 Of Them Has Lawyer Experienced In Mob Cases

    recommendedreading1Two defendants in the alleged $6 billion Liberty Reserve money-laundering conspiracy are listed as inmates at the Metropolitan Correctional Center (MCC) in New York. They are Vladimir Kats, also known as “Ragnar,” and Mark Marmilev, also known as “Marko” and “Mark Halls.”

    Kats is 41; Marmilev is 33. Their release dates are listed as “unknown.” Filings in the case show that both men are jailed by “consent” and have reserved their rights to apply for bail later.

    Attorney James R. Froccaro Jr. has entered an appearance notice for Marmilev. Froccaro previously has represented clients implicated in schemes involving organized-crime figures. He also has represented clients caught up in bizarre and incongruous crimes, such as the case of Dr. Felix Lanting, an 85-year-old physician accused of running a pill mill on Staten Island.

    From SILive on Jan. 13, 2013 (italics added):

    Prosecutors said Dr. Lanting wrote a staggering 3,029 oxycodone prescriptions for various patients through his private practice over more than six months that year. He sold the scripts, at an average of $200 each, to patients who didn’t need them, with the help of “bouncers” to keep recipients in line.

    Three of the so-called bouncers — all with criminal records — often worked out deals with their own “patients” to get oxycodone pills, which they allegedly sold for $10 to $15 on the street.

    Marmilev, who was arrrested last week in Brooklyn, was described by prosecutors as a designer of Liberty Reserve’s technological infrastructure. Liberty Reserve was described as a criminal enterprise.

    Liberty Reserve founder Arthur Budovsky was arrested last week in Spain. Seven individuals with ties to Liberty Reserve have been charged criminally. The others include Ahmed Yassine Abdelghani, also known as “Alex”; Allan Esteban Hildago Jimenez, also known as “Allen Garcia”; Azzeddine El Amine; and Maxim Chukharev.

     

     

  • URGENT >> BULLETIN >> MOVING: Liberty Reserve, Founder, Others Indicted In New York

    breakingnews72URGENT >> BULLETIN >> MOVING: (15TH UPDATE 2:31 P.M. EDT U.S.A.) Liberty Reserve, its founder and several others have been indicted in U.S. District Court for the Southern District of New York (Manhattan).

    The charges, which include conspiracy to commit money-laundering, conspiracy to operate an unlicensed money-transmitting business and operating an unlicensed money-transmitting business, were confirmed this morning by the office of U.S. Attorney Preet Bharara.

    Liberty Reserve founder Arthur Budovsky was using the aliases “Eric Paltz” and “Arthur Belanchuk,” according to the indictment.

    Co-conspirators, according to the indictment, include Vladimir Kats, also known as “Ragnar”; Ahmed Yassine Abdelghani, also known as “Alex”; Allan Esteban Hildago Jimenez, also known as “Allen Garcia”; Azzeddine El Amine; Mark Marmilev, also known as “Marko”; and Maxim Chukharev.

    Marmilev also is known as “Mark Halls,” according to an affidavit that accompanies the indictment.

    Budovsky and El Amine were arrested Friday in Spain, Bharara’s office said today. Kats and Marmilev were arrested Friday in Brooklyn. Chukharev was arrested Friday in Costa Rica. Hildago and Abdelghani are “at large” in Costa Rica.

    “As alleged, the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes — the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers, and traffickers,” Bharara said. “The global enforcement action we announce today is an important step towards reining in the ‘Wild West’ of illicit Internet banking. As crime goes increasingly global, the long arm of the law has to get even longer, and in this case, it encircled the earth.”

    Added Steven G. Hughes, special agent in charge of the U.S. Secret Service. “These arrests are an example of the Secret Service’s commitment to investigate and apprehend criminals engaged in the misuse of virtual currencies to conduct global monetary fraud. Cyber criminals should be reminded today that they are unable to hide behind the anonymity of the Internet to avoid regulated financial systems.”

    The IRS and the U.S. Department of Homeland Security (U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI)) also are involved in the probe, as are multiple nations, Bharara’s office said.

    Liberty Reserve and its co-conspirators “intentionally created, structured, and operated Liberty Reserve as a criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes,” according to the indictment.

    The United States has seized the Liberty Reserve domain name along with several others, according to an affidavit that accompanies the indictment. The others include: ExchangeZone.com; SwiftExchanger.com; MoneyCentralMarket.com; and Asianagold.com. As part of the seizure process, a federal judge ordered the U.S. Secret Service to point the domain nameservers to a “sinkhole” URL at ShadowServer.org.

    News about the seizures destroys various examples of wishful thinking advanced by online HYIP hucksters at forums such as TalkGold and MoneyMakerGroup since LibertyReserve’s domain went offline Friday. On Saturday, reports surfaced that Budovsky had been arrested in Spain and that Liberty Reserve was under investigation in Costa Rica and the United States.

    Seizure notices are expected to appear on the domains, although the timing was not clear.

    The indictment ties Liberty Reserve to the crimes of “credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking.”

    Among other things, the indictment alleges that “virtually all of Liberty Reserve’s business derived from suspected criminal activity” and that the scope of the fraud is “staggering.”

    Between 2006 and May 2013, according to the indictment, Liberty Reserve processed an estimated 55 million transactions and is believed “to have laundered more than $6 billion in criminal proceeds.”

    Supporting affidavits in the case show that the indictment was returned under seal on May 20 and that prosecutors applied for an injunction barring Amazon Web Services Inc. from providing services to Liberty Reserve. The affidavit also shows that the United States is seeking forfeiture of sums on deposit in at least 42 accounts in various countries

    These banks are in countries such as Costa Rica, Cyprus, Russia, Hong Kong, China, Morocco, Spain, Latvia, Australia and the United States. Tens of millions of dollars are being sought in forfeiture actions, although the final sum is unclear.

    Liberty Reserve, according to the indictment, used “exchangers” in countries with little oversight, including Malaysia, Russia, Nigeria and Vietnam. The process was part of a criminal scheme to bury evidence of fraud while providing anonymity for the fraudsters.

    The enterprise, according to the indictment, functioned “in effect as the bank of choice for the criminal underworld.”

    Link to documents posted by Bharara’s office. Read statement by Bharara’s office.

    In a separate but related action, the U.S. Department of the Treasury announced it had identified Liberty Reserve as a “Financial Institution of Primary Money Laundering Concern.”

    “Treasury is determined to protect the U.S. financial system from cyber criminals and other malicious actors in cyberspace, including overseas entities like Liberty Reserve that facilitate online crime and hope to evade regulatory scrutiny,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. “We are prepared to target and disrupt illicit financial activity wherever it occurs – domestically, at the far reaches of the globe or across the internet.”

     

     

  • URGENT >> BULLETIN >> MOVING: Liberty Reserve Payment Processor Offline Amid Reports Of Arrest Of Operator In Spain On Money-Laundering Charges

    breakingnews72URGENT >> BULLETIN >> MOVING: Costa Rica-based Liberty Reserve, a payment processor favored by HYIP scammers and other criminals, is offline — and there are reports that its operator is under arrest in Spain on money-laundering charges.

    “We lost Huge $$$,” a poster on the MoneyMakerGroup Ponzi forum complained. The poster’s forum signature was advertising AdHitProfits, with a pitch of “125% – Superfast Earning.” It also was promoting GoldAllianceFunds, with a pitch of “4.5% for 45 Business Days.”

    From The Tico Times, a newspaper published in Costa Rica (italics added):

    Arthur Budovsky Belanchuk, 39, on Friday was arrested in Spain as part of a money laundering investigation performed jointly by police agencies in the United States and Costa Rica.

    Costa Rican prosecutor José Pablo González said Budovsky, a Costa Rican citizen of Ukrainian origin, has been under investigation since 2011 for money laundering using a company he created in the country called Liberty Reserve.

    Local investigations began after a request from a prosecutor’s office in New York. On Friday, San José prosecutors conducted raids in Budovsky’s house and offices in Escazá, Santa Ana, southwest of San José, and in the province of Heredia, north of the capital.

    Budovsky’s businesses in Costa Rica apparently were financed by using money from child pornography websites and drug trafficking.

    Separately, BehindMLM.com is reporting that Liberty Reserve’s website is throwing a server error. The PP Blog confirmed the site will not load and that there appears to be no page-source information on the landing page.

    Recent scams that have used Liberty Reserve include JustBeenPaid/JSSTripler, “Expert Invest Group,” T2MoneyKlub (one of Ponzi schemer “Dave’s”) purported “programs,” Insectrio, Imperia Invest IBC and many more.

    Imperia scammed deaf people, the SEC said in 2010.

  • With CONSOB Probe Under Way In Italy And Certain U.S. Affiliate Sites Offline, JSS Tripler/JustBeenPaid Members Say AlertPay Is Sending Them Debit Cards: ‘Now I Can Start Using AP In Other Programs,’ MoneyMakerGroup Promoter Announces

    “You can only load money from your Alertpay account onto it. So, now I can start using AP in other programs & have an easy way to get my money to spend, by loading funds from my AP account onto the card. Then I can use the card like a regular debit card in stores, online & even withdraw the money off of the card via an ATM machine.” — MoneyMakerGroup post by JSS Tripler/JustBeenPaid promoter, Feb. 16, 2012

    There’s none so blind as those who will not see.

    Only a little more than eight months ago — on June 3, 2011 — the U.S. Secret Service advised a federal judge in Maryland that HYIP schemes spread in part through coordinated posts on “discussion boards.” One of the boards referenced in a Secret Service affidavit aimed at seizing tens of millions of dollars in “criminal proceeds” linked to HYIP hucksters and other scammers was TalkGold.

    Yes, that TalkGold, the Ponzi cesspit, the same TalkGold to which promoters of JSS Tripler/JustBeenPaid race to fire up “I got paid” posts to help sustain a scam that advertises an annualized return of 730 percent on top of two-tier downline commissions totaling 15 percent — more, if members choose to “compound” their “earnings” by leaving them in the system.

    JSSTripler/JustBeenPaid promoters are doing this on the Ponzi forums even after CONSOB, the Italian securities regulator, announced a JSS Tripler-related action late last month and certain promoters’ websites in the United States suddenly have gone missing this month. Frederick Mann is the purported operator of the scheme.

    It was not the first time TalkGold’s name had been referenced as a place from which massive fraud schemes were promoted. The board was referenced in 2010 filings by the U.S. Postal Inspection Service in the Pathway to Prosperity (P2) case. So was MoneyMakerGroup, another Ponzi and fraud cesspit.  P2P operator Nicholas Smirnow was charged criminally, and investigators described P2P as an HYIP scheme that had spread to at least 120 countries and created as many as 40,000 victims. The alleged P2P haul: about $70 million.

    Courtroom references by the Secret Service to TalkGold in the context of fraud schemes date back at least to 2007.

    Here is how the Secret Service affidavit from June 2011 described the activities that occur on TalkGold and elsewhere. (Italics added):

    “Most of the individual posts to the boards are from those who invest in the pyramid schemes and those who operate and promote the illegal investment scams.”

    Based on the Secret Service affidavit and voluminous evidence culled in the aftermath of the 2007 E-Gold investigation that had led to 2008 guilty pleas on charges related to unlicensed money-transmitting and money-laundering, the judge authorized the seizure of tens of millions of dollars from the E-Gold accounts of alleged scammers who’d set up shop through E-Gold to fleece the masses.

    On June 20, 2011, U.S. District Judge Ellen L. Hollander ordered the money “arrested.” The forfeiture is pending, and the final sum seized is unclear. But the website of a court-appointed claims administrator includes this notation. (Emphasis added):  “Approximately $90 million has been seized and/or restrained from the sale of e-metal held in accounts at E-Gold.”

    These things are exceptionally noteworthy in the context of the forfeiture case:

    • E-Gold is assisting investigators in ridding itself of corrupt proceeds warehoused as a result of the money-laundering allegations in 2007. It has cooperated with prosecutors in identifying accounts linked to HYIP scammers and other hucksters.
    • The Secret Service agent who filed the affidavit is the same agent who led the 2008 AdSurfDaily Ponzi scheme investigation, which resulted in the forfeiture of at least $80 million and criminal charges against ASD operator Andy Bowdoin.
    • Even though the agent allegedly has been targeted with false liens by so-called “sovereign citizens” for his work in the ASD Ponzi case, he continues to serve in a capacity that is vital to the security of the United States. He has conducted numerous investigations involving money-laundering and other crimes. These cases, according to court filings, have resulted in the seizure of more than $300 million in “criminally derived proceeds.” That is more than a quarter of a billion dollars. The agent and his colleagues have worked with a Task Force whose members reverse-engineer fantastically complex financial crimes.
    • The court-appointed administrator handing the claims process is the same company that handled a similar process in the ASD Ponzi case.

    E-Gold has done the right thing in cooperating with investigators.

    Coming Soon To An ATM Near You

    Any person who spends so little as five minutes on the Ponzi boards knows that Canada-based AlertPay is conducting business with serial promoters of outrageous frauds — frauds that have grave consequences to individual pocketbooks and frauds that have grave ramifications to national and international security.

    And now, according to posts that originate on forums referenced in multiple U.S. court filings about massive international fraud schemes, AlertPay is sending debit cards to the scammers.

    “Thanks Mann & Co.,” the excited poster announcing her coup on MoneyMakerGroup said, adding five smilies to accent her glee after her earlier reference to ATMs and stores that now could be used to offload profits from a scheme that advertises a return of 2 percent a day.

    In an earlier post, the MoneyMakerGroup member said she received the AlertPay debit card in her mailbox in North Carolina.

    “Now I’m able 2 get my money out FAST!!!!!!!!!!!!” she roared.

    Below her post was a link to a “program” known as “Expert Invest Group” that purports to pay “up to 20000% After 30 days.” The company says its accepts AlertPay, Perfect Money and “Liberty Reserver (sic).”

    A (Brief) Pictorial Study In Contrasts

    1.

    MoneyMakerGroup post from Feb. 16 by promoter of JSSTripler/JustBeenPaid. The post highlights the utilty of AlertPay debit cards in joining other "programs" and offloading profits at ATMs and retail outlets.

    2.

    From Paragraph 55 of a U.S. Secret Service affidavit filed in U.S. District Court in Maryland on June 3, 2011.

  • CAUTION FLAG: Murky Website With .Org URL Pops Up Online; OnlineInvestmentBank.org Registration Data Hidden Behind Proxy; Claims Huge Commission And Interest Payments — And Exemptions From U.S. Law

    An apparent investment and banking website whose domain registration is hidden behind a proxy appears to be preparing to accept money from investors worldwide by planting the seed it is a charitable enterprise.

    The website of OnlineInvestmentBank.org appears to have been registered just days ago — on Jan. 21. The site suggests it is both “private” and eager to do business with Americans and others worldwide. Meanwhile, the site suggests it does not have to comply with U.S. law when soliciting U.S. residents.

    Examples of fractured English syntax appear across the site.

    “Don’t post bad vote on Public Forums and at Gold Rating Site without contacting the administrator of our program FIRST,” the site prompts prospects. “Maybe there was a technical problem with your transaction, so please always CLEAR the thing with the administrator.”

    Other examples of the awkward use of the English language appear on the site. At the same time, OnlineInvestmentBank.org  appears to be issuing an appeal for customers to embrace a culture of both spamming and secrecy.

    “You agree that all information, communications, materials coming from onlineinvestmentbank.org are unsolicited and must be kept private, confidential and protected from any disclosure,” the site advises prospects.

    The site also claims an exemption from U.S. law:

    “As a private transaction, this program is exempt from the US Securities Act of 1933, the US Securities Exchange Act of 1934 and the US Investment Company Act of 1940 and all other rules, regulations and amendments thereof,” the site claims. “We are not FDIC insured. We are not a licensed bank or a security firm.”

    Money can be sent to the firm via Liberty Reserve and Perfect Money, according to the website.

    Why a purported investment company and banking firm would use a .org domain was not immediately clear. On its website, OnlineInvestmentBank.org says it is offering a referral program and promises to pay participants “5% of your referrer’s deposit.”

    “Everyone can participate in this program,” the website claims in its FAQ section. “We accept members from any country in the world.”

    The site says it accepts a minimum deposit of “USD 10” and a maximum of “USD 500000.”

    How it purportedly earns money and is able to give away 5 percent of its deposits in the form of commission payments are unclear.

    Bizarrely, the website also appears to claim that customer deposits are locked down, but earn spectacular sums of interest daily — in addition to the 5 percent commissions paid for referrals.

    Under an FAQ that reads, “What do you mean xxx% on your plans? can (sic) I withdrawal (sic) Principal (sic) too?”, the website notes:

    “You can’t withdrawal (sic) your principal money. For example 102% after 1 day is (sic) means 100% which is your principal money plus 2% as profit.”

    And the website also says it favors “e-currencies” because they attract less attention from two notable groups of potential meddlers: “hackers” and “any of the governmental organizations (like tax structures).”