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Tag: Ming Xu

  • EDITORIAL: When MLM Is PR Poison: Footnote In Zeek Receiver’s Most Recent Filing Harkens Back To Scam Of Yesteryear — Also, Does Unrelated ‘Agape World’ Case Provide Clues About Tax Scam Within Ponzi Scam At Zeek?

    From the 2010 MPBToday MLM scam, which in part traded on the names of Walmart and a Florida bank.
    From the 2010 MPBToday MLM scam. Like Zeek Rewards, MPBToday traded in part on Walmart gift cards.

    Ah, those serially disingenuous MLM hucksters and commission-based Ponzi pitchmen: They’ll ultimately destroy their own brands while picking millions of pockets. Before doing so, they’ll use your brand as a temporary means of sanitizing themselves, bring PR disasters to your legitimate company and perhaps even find an insidious way to turn the government into their banker.

    Longtime PP Blog readers will recall the outrageous scam of MPBToday. MPBToday duped the MLM masses in part by planting the seed that Walmart gift cards or prepaid Visa cards would flow to members in unlimited supply if they sent $200 to the Florida-based “program” for a “one-time” purchase of “groceries” and if the members recruited two others who’d also recruit two others to do the same.

    In addition to being a pyramid scheme that sent operator Gary Calhoun to prison in Florida on a racketeering charge, MPB Today could have been a scam that disguised “program” earnings as nontaxable “gifts” to dupe Uncle Sam.

    It’s almost axiomatic in MLM Scam Land that an “opportunity” and/or its Stepfordian promoters will imply a tie to a major brick-and-mortar business or even the government, when no such ties exist or the ties are no more official than ties any consumer can enjoy — purchasing a gift card from a major retailer, having a bank account or renting a room at a major hotel chain, for instance. It happened at MPB Today in 2010, and it’s happening now within the Stepfordian wing of TelexFree — a wing in which promoters have suggested that TelexFree has been “authorized” or “approved” by the government.

    It also happened both internally and externally at WCM777, now the subject of cross-border investigations in both North America and South America. In an apparent bid to sanitize the WCM777 scheme, alleged operator Ming Xu arranged to have himself photographed with celebrities such as former U.S. Vice President Al Gore and Apple co-founder Steve Wozniak. Meanwhile, WCM777 promoters rushed to YouTube and other social-media sites to claim that WCM777 had ties to famous businesses such as Siemens and a host of hospitality companies with famous flags.

    Such rank MLM disingenuousness also occurred within the $850 million Zeek Rewards scheme. In the PP Blog’s view, Zeek’s maximum expression of such deception occurred when it was auctioning sums of U.S. cash and telling successful bidders they’d get paid through offshore payment processors such as AlertPay and SolidTrustPay. By divining sums up for auction and accepting bids for U.S. currency, Zeek implied it had been approved by the U.S. government, perhaps specifically the Treasury Department.

    And by sending the incongruous (and bizarre) message that the Treasury-approved Zeek MLM scheme would pay members via offshore processors linked to the equally outrageous AdSurfDaily Ponzi scheme broken up by a Task Force consisting of the U.S. Secret Service and the Treasury Department (IRS) in 2008, Zeek served up another colossal mess for MLM.

    Zeek, of course, followed the footsteps of MPBToday — whose operator lost his liberty after pushing all those Walmart cards out the door — by leeching off the names of major American retailers. In addition to auctioning cash, Zeek auctioned gift cards.

    And this brings us to an interesting footnote in a quarterly report filed Jan. 30 by Kenneth D. Bell, the receiver in the Zeek Rewards Ponzi-scheme case. Zeek operated through Rex Venture Group (RVG).

    “Unlike other retailers the Receiver Team approached, Wal-Mart and Home Depot readily agreed to refund the full amount of their gift cards held by RVG at the time of shut-down,” Bell advised Senior U.S. District Judge Graham C. Mullen.  “The remaining gift cards were sold at auction, and their value is included in the gross receipts from the personal property portion of the Receivership auction.”

    Walmart and Home Depot know a PR disaster when they see one. They ponied up quickly when the receiver asked them, thus making his job of gathering funds for Zeek victims a bit easier. Some other companies that perhaps have less PR savvy did not. The receiver auctioned their gift cards in public.

    Bell’s examination of Zeek’s money flow continues, according to the Jan. 30 report. The report reveals that lawsuits against alleged insiders and winners had not been filed as of the 30th, but remain pending.

    The receivership is “on the brink of filing,” Bell said.

    Some Zeekers who choose to see instead of turning a blind eye perhaps can gain an understanding of just how dangerous the “program” was to the U.S. financial system — and not just the relatively small segment in which retailers that issue gift cards reside. Not only did Zeek create legal and PR dilemmas for itself, it created them for others, including gems of U.S. commerce and banking.

    During 2013’s fourth quarter, attorneys for the receiver “sent demand letters to fifty-four (54) financial institutions seeking reimbursement for teller’s checks on which financial institutions were believed to have improperly stopped payment under Section 3-411 of the Uniform Commercial Code and in violation of the Freeze Order,” Bell advised the court.

    “As of December 31, 2013, thirty-one (31) financial institutions had not responded to the Receiver’s demand(s) for payment of stopped payment cashier’s checks and bank money orders,” Bell continued. “Additionally, fifteen (15) issuers of teller’s checks had not responded to demand letters.”

    Let’s hope these financial institutions develop the PR savvy of Wal-Mart and Home Depot. Zeek not only was a train wreck unto itself, it set the stage to involve legitimate enterprises in its own bizarre drama. Company after company that conducted business with Zeek or whose customers did so has had to lawyer up or at least rely on in-house counsel to determine how much exposure the “program” brought to legitimate enterprises.

    The Zeek story is far from being over and likely will reverberate for years in the financial community. Bell now says that he’s “discovered additional RVG financial accounts during the fourth quarter.”

    Zeek money, according to the report, circulated onshore and offshore.

    “All transactional information received from financial institutions through the end of the fourth quarter has been included in the creation of the financial books and records,” Bell advised the court. “However, communications with financial institutions are ongoing, and there are outstanding requests by the Receiver for transactional information.”

    When will other shoes drop?

    “The Receiver Team continued its investigation into potential claims against RVG insiders and third-party advisers as a part of its ongoing fact investigation, continuing its analysis of documentary evidence that will be used in proving such claims,” Bell advised the court. “The Receiver Team also responded to requests for assistance and information from the U.S. Attorney’s Office that aided the government in obtaining plea agreements from both Dawn Wright-Olivares and Daniel Olivares.”

    Wright Olivares, Zeek’s former COO, was charged criminally and civilly in December 2012 2013 (Feb. 5, 2014 edit). Olivares, her stepson, also was charged criminally and civilly. They are expected to appear in court this week to enter formal guilty pleas to criminal conduct.

    Federal prosecutors say tax fraud occurred at Zeek.

    Here, we’ll point you to an unrelated story by Jordan Maglich at PonziTracker.com. The story is about an alleged pitchman for Ponzi schemer Nicholas Cosmo, now serving 25 years in federal prison for his epic Agape World fraud. (Quick side note: Agape World was a purported “bridge lender,” similar in some ways to the outrageous “Profitable Sunrise” MLM fraud scheme broken up by the SEC last year.) The PonziTracker story on Agape World developments is titled, “Ponzi Associate Jailed For ‘Mind-Boggling’ Money Laundering Scheme.”

    The story explains why alleged Cosmo pitchman Anthony Ciccone now is in jail. A snippet from the story:

    According to prosecutors, Ciccone overpaid approximately $1.7 million in federal and state income taxes beginning in 2008 that was comprised of Ponzi scheme proceeds. Several years later, the funds were returned to Ciccone in the form of tax refunds, and Ciccone subsequently had his wife and mother-in-law launder the refund money through their bank accounts.

    We wonder: Could some of the Zeekers effectively have been doing the same thing — deliberately overpaying taxes and using the government as a de facto bank that temporarily would conceal and warehouse Ponzi proceeds for return later in the form of tax refunds?

    From a Dec. 20, 2013, PP Blog report on the criminal allegations against Wright-Olivares (italics/bolding added):

    And for the 2011 tax year, according to the charging documents, “P.B.,” Wright-Olivares and others reported to the IRS that Zeek investors had received more than $108 million from the scheme when Zeek had paid out only about $13 million.

    This caused Zeek victims to file “false tax returns with the IRS reporting phantom income that they never actually received,” according to the charging documents.

    Zeek used the “false tax notices to perpetuate the Ponzi scheme,” according to the charging document.

    NOTE: Our thanks to the ASD Updates Blog.

  • Websites For WCM777 And Kingdom777 ‘Unavailable’

    UPDATED 12:08 P.M. ET (U.S.A.) The WCM777 and Kingdom777 websites appear to be back online. Our earlier story is below . . .

    _______________________________

    Websites linked to WCM777 and Kingdom777 are showing a “Service Unavailable” message this morning. The precise reason why is unclear.

    WCM777 now operates as Kingdom777. California securities regulators have called WCM777 an “investment scam” that gathered at least $20 million. California, Colorado and Massachusetts have banned the “program.” Louisiana and New Hampshire have issued Investor Alerts.

    The province of New Brunswick in Canada also has issued an Investor Alert.

    Ming Xu has been identified in securities actions as the operator of WCM777. Some promoters have called him Dr. Phil Ming Xu and Dr. Philip Ming — or just plain Dr. Phil. At a business event in California last year, Ming Xu was photographed alongside former U.S. Vice President Al Gore and Apple co-founder Steve Wozniak.

    Some MLM scams try to gain a head of steam by associating themselves with famous politicians, famous people and famous businesses. Promos for WCM777 have sought to tie to firm to several famous companies.

    A Twitter account in the name of Dr. Phil Ming Xu says this this morning: “You have not shut me up into the hand of the enemy. You have set my feet in a large place.”

    A Jan. 27 Tweet said this: “Though an army should encamp against me, my heart shall not fear. Though war should rise against me, even then I will be confident.”

    Meanwhile, a Jan. 25 Tweet said this: “Confidence in someone unfaithful in time of trouble is like a bad tooth, or a lame foot.”

    Based on promos that have appeared online, it is possible that individual WCM777 sponsors were accepting wire transfers from their recruits and then somehow forwarding the money to WCM777, which reportedly has a presence in Hong Kong and the British Virgin Islands.

    Circuitous flow of cash is a key marker of scams and may signal money-laundering or other crimes are occurring.

    Please use the PP Blog’s search function near the upper-right corner to find more information on WCM777.

  • UPDATES: (1) Colorado Boots WCM777; (2) California Didn’t Have To Look Far To Find ‘Program’: State Has Office In Same Building From Which Alleged Multimillion-Dollar Securities Scam Operated

    From the Colorado C&D against the WCM777 MLM "program."
    From the Colorado C&D against the WCM777 MLM “program.”

    UPDATED 6:33 P.M. ET (U.S.A.) The state of Colorado has issued a cease-and-desist order against the WCM777 “program,” saying the Ming Xu-led enterprise was selling unregistered securities.

    Ming Xu also is known as Dr. Phil Ming Xu, according to WCM777 promoters.

    In issuing the C&D, Colorado now has joined at least two other U.S. states in banning WCM777. The other states are California and Massachusetts. Louisiana has issued an Investor Alert. (Edit 6:33 p.m. New Hampshire also has issued an Investor Alert on WCM777.)

    California has alleged that WCM777 gathered at least $20 million.

    Gerald Rome, Colorado’s acting securities commissioner, announced his state’s ban on Jan. 21. Paperwork is here. Ming Xu consented to the action without admitting or denying wrongdoing.

    From a statement by Rome’s office (italics added):

    Named in the Order are World Capital Markets, Inc., WCM777, Inc., and their founder and chairman, Ming Xu, all of Pasadena, California.

    The Staff of the Division of Securities (the “Staff”) alleged that World Capital sought Colorado investors through websites, webinars, and live presentations to purchase packages that allow the purchaser to access World Capital’s cloud media services and earn commissions or profits with advertised returns of more than 90%. The program operated much like a multi-level marketing program where purchasers received bonuses for referrals, purchase of stock options, and other bonuses based on how many referrals obtained by a purchaser.

    The Staff alleged that World Capital failed to register either security offering and, by offering the investment opportunity to the public at large by soliciting on the internet, World Capital violated the registration provisions under the Act.

    Meanwhile, it turns out that California didn’t have to venture too far to find WCM777.

    The WCM777 MLM scam was operating from Suite 900 at 150 S. Los Robles Ave., according to a Desist and Refrain Order the state issued last week.

    But the state itself has an office in the same building. The Pasadena branch of the California Department of Rehabilitation occupies suite 300, according to the DOR’s website. The agency says it “administers the largest vocational rehabilitation program in the country.”

  • BULLETIN: California Calls WCM777 A ‘Scam,’ Issues Desist And Refrain Order That Names Executives And YouTube Pitchman

    From the California order announced last week on the state's website.
    From the California order announced last week on the state’s website.
    From a Consumer Alert issued by the California Department of Business Oversight. (Red highlight by PP Blog.)
    From a Consumer Alert issued by the California Department of Business Oversight. (Red highlight by PP Blog.)

    BULLETIN: (Updated 10:36 a.m. ET U.S.A.) The state of California has called the WCM777 MLM “program” a “scam” and issued a Desist and Refrain Order that bans the enterprise in the state. The Department of Business Oversight (DBO) has issued a companion Consumer Alert and is “strongly” encouraging California investors to file a formal complaint.

    Named in the Jan. 8 order announced late last week on the state’s website are WCM777 executives Ming Xu and Zhi Liu. Harold Zapata, an alleged WCM777 YouTube pitchman with an address in Hanford, Calif., also is named in the order. Corporate entities named in the order include World Capital Market Inc., WCM777 Inc. and WCM777 Limited, all of Pasadena.

    Zapata, California alleged, identified himself as “CEO at WCM777 Global Stars,” something that suggests he was the leader of an upline group. On July 15, 2010, the PP Blog reported that FINRA warned the investing public about scams that spread on social-media sites such as YouTube,  Facebook and Twitter.

    WCM777 was targeted at people of faith and members of minority communities. California investors can file a complaint by dialing 866-275-2677, the state said.

    In November, the state of Massachusetts accused WCM777 of selling unregistered securities.

    California now has done the same thing.

    “The WCM777 membership units offered and sold by Respondents constitute securities,” the state charged.

    And, it alleged, “Respondents offered and sold securities by means of written and oral communications which included untrue statements of material fact and which omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.”

    WCM777 now is operating as Kingdom777, and has been associated with a series of bizarre events. On Jan. 17 via Twitter, the “program” issued a declaration of love to the people of Peru after a police raid on a WCM777 outlet there. The announcement was attributed to “Dr. Phil Ming Xu” and claimed the enterprise now “has a promotion plan with a payout ratio of 130%.”

    In issuing the announcement, WCM777 appeared to be ignoring the securities issues altogether. California publicly announced the order six days later, on Jan. 23. The California order is dated Jan. 8. A day earlier, on Jan. 7, WCM777 published an announcement of the name change to Kingdom777, claiming “Kingdom777 has acquired the assets of WCM777.”

    As is typical in HYIP scams, the announcement blamed affiliates for WCM777’s woes.

    “Some members failed to represent WCM777 correctly and distorted our vision and mission to be a social capital company whose goal is to build a global community of trust and love,” the new company said.

    But California’s order, which in part echoes suggestions in Massachusetts that WCM777 was steering recruits to avoid lower levels of buy-in in favor of the highest level of $1,999, makes it clear that the state viewed WCM777 itself as a fraud.

    From the California order (italics/bolding added):

    9. The most expensive and, by far, the most popular WCM777 membership unit costs $1,999. The $1,999 membership unit provides the purchaser five years of access to WCM777’s alleged online cloud services. In addition, WCM777 claims that a purchaser of the $1,999 membership unit will receive up to $32 per day over a 100-day period in the form of profit-sharing payments, bonuses and commissions. Thus, over a 100-day period, a purchaser of the $1,999 membership unit would allegedly earn $1,200 more than the original cost of the unit—an alleged 60% return in only 100 days.

    10. The vast majority of purchasers buy the five year unit, rather than the less expensive units that generate lesser returns. In fact, over 95% of purchasers in the United States bought the $1,999 membership unit.

    11. There is no limit to how manyWCM777 membership units an individual may purchase at one time. In fact, a significant number of purchasers buy multiple WCM777 membership units at the same time.

    12. After the purchaser’s 100-day daily returns cycle expires, the purchaser may “re-up” by purchasing another membership unit at a 50% discount, which then restarts the 100-day cycle. A purchaser can “re-up” indefinitely. Therefore, over a 300-day span, a purchaser of a single $1,999 WCM777 membership unit who “re-ups” at the end of each 100-day cycle would allegedly earn up to $5,600 more than the cost of buying the membership units—an alleged 140% return in about 10 months.

    Precisely how California learned that 95 percent of U.S. purchasers allegedly bought in at the maximum level of $1,999 is unclear. What is clear is that the state has accused WCM777 of engaging in a rank deception and gathering at least $20 million between March 2013 and September 2013.

    Among WCM777’s fraudulent claims was that the “Respondents’ activities were not subject to the jurisdiction of the United States Securities & Exchange Commission or the United States Federal Trade Commission,” California alleged.

    Moreover, the state claimed that the respondents failed “to disclose that WCM777 had no other significant sources of income but for its sale of membership units.” Meanwhile, they failed to disclose “that WCM777 did not have an enforceable contract with Siemens under which Siemens would provide the alleged online cloud services that WCM777 advertised.” (See Oct. 30, 2013, PP Blog story, which reports on the issue with Siemens and notes that WCM777 was being targeted at a Latino church in Rialto, Calif.)

    Siemens, the state said in its order, “has publicly disavowed any relationship or contract with WCM777. In a press release, Siemens stated that it disavowed a relationship with WCM777 “[i]n order to help . . . investors avoid making any investments based on false assumptions[.]”

    And despite claims by the respondents that “WCM777’s alleged daily returns are backed by the global banking business of its parent company, WCM,” the state charged, “WCM777 and WCM had no significant income outside of sales of WCM777 membership units.

    “From March 2013 to the end of September 2013, WCM777 and WCM generated over $20 million in sales of WCM777 membership units,” the state alleged. “During the same period, over 99% of the income of WCM777 and WCM came from sales of WCM777 membership units, while less than 1% of their income came from WCM’s alleged global ‘merchant banking’ or any other business.”

    Some WCM777 promoters have claimed that the WCM enterprise had handed out more than $1 billion in loans. In a bizarre example of MLM hucksterism, the promoters identified several companies that allegedly had borrowed great sums from WCM — and even how much the firms purportedly had borrowed.

    News of the California order first was reported today by BehindMLM.com.

    Visit California’s website. Read the Desist and Refrain Order.

  • Email From A Concerned WCM777 Participant Raises Prospect That Worries Are Being Ignored

    EDITOR’S NOTE: UPDATED 6:15 P.M. ET U.S.A. WCM777, now known as Kingdom777, is an outrageous fraud scheme operating over the Internet that has penetrated multiple countries, including the United States. Some affiliates claim a payment of $14,000 returns $500,000 in a year. The purported head is “Dr. Phil Ming Xu.” Please use the Blog’s search function for more info on WCM777.

    For starters, see: 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?’

    Here is an email received by the PP Blog today from a WCM777 participant who is deeply worried. The email was sent from a U.S. state that has a considerable Latino population. Other than the carriage returns we added and the name we withheld, the email is verbatim.

    __________________________

    As far as I know our Hispanic Team Leader said we have 3 options, 1 is change address to a different country, 2 is transfer to a different name but in a foreign country and 3rd to just wait for the USA to close it down and we can request for reimbursement for every unit we have.

    All what I know is from my team leader. I Log in under affiliate with my password but there is no answers to my questions. All we want is our money back because the money we invested is what we have save all this long past year’s and I have 4 kids, 2 teenagers that are very close to start college. I need help to find out on how we can get our money back. I herd many comments in the meeting but I talk for my myself. Please help!!

    Sincerely

    [Name Withheld by PP Blog]

  • 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.

    wcm777boston

    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.

  • URGENT >> BULLETIN >> MOVING: Massachusetts Halts WCM777, Says It Was Selling Unregistered Securities And Targeting Brazilian Community

    breakingnews72URGENT >> BULLETIN >> MOVING: (10th Update 9:28 p.m. ET U.S.A.) Massachusetts has halted the WCM777 multilevel marketing scheme, saying it was associated with entities in Hong Kong, the British Virgin Islands and the United States and selling unregistered securities. In Massachusetts, the state said, the scheme was targeting the Brazilian community.

    In a filing by the office of Massachusetts Secretary of State William Galvin, the state says it opened a probe into WCM777’s business practices in September.

    Identified entities include World Capital Market Inc. of Pasadena, Calif., an asserted offshoot of a banking enterprise in the British Virgin Islands; WCM777 Inc., a dissolved Nevada business with an office in City of Industry, Calif; and WCM777 Limited of Hong Kong.

    WCM777 purports to sell “cloud” Internet services. The investment scheme spread in part through weekly pitches in August and September by a WCM777 distributor using a “function room” at a Massachusetts hotel, the state said.

    Investors were lured with promises they’d receive “profit sharing” and an ability to “purchase stock options” in the run-up to an asserted IPO in 2014, the state said.

    The Massachusetts filing is a consent order. WCM777, according to the order, has agreed to cease business in the state and to provide refunds to all Massachusetts investors. The scheme netted at least $300,000 in the state from about 160 investors, the vast majority of whom were members of the Brazilian community, according to the order.

    “Nearly all” of the investors bought into the scheme at the $1,999 level — the level that promised the highest daily payout, according to the order.

    Promos advertised returns of “over 90 percent” in 100-day cycles, the state said.

    WCM777 has neither admitted nor denied the allegations, the state said.

    Attorneys for WCM 777 made the refund offer on Nov. 13 after presenting the state a spreadsheet on Oct. 14 showing information on Massachusetts participants, according to the order. The document does not say whether other states also are investigating WCM777. The nation of Colombia is known to be investigating WCM777.

    Ming Xu is identified in the Massachusetts consent order as the founder and president of WCM777 Inc.

    WCM777 promoters refer to Ming Xu as “Dr. Phil.” A Twitter account associated with the name of “Dr. Phil Ming Xu” displays WCM-related content and photos of Ming Xu with luminaries such as former U.S. Vice President Al Gore and Apple co-founder Steve Wozniak.

    The photos appear to have been taken at a California business event earlier this month at which all three men spoke.

    Meanwhile, there’s a photo of Ming Xu surrounded by adoring followers. The photo appears to come from the same meeting from which this video emerged:

    Read the Massachusetts Consent Order.

    Read Oct. 30, 2013, PP Blog story on WCM777, which appears to have promoters interested in pitching the purported opportunity to churches and their entire congregations.