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Tag: Minnesota

  • PONZI UNIVERSE: Just How Weird Will It Get? Spammer With Possible ASD Ties Tries To Post News Release In 10 Separate PP Threads; Elsewhere, A ‘Comic Book’ Ponzi Scheme

    On a day a federal judge ordered alleged Minnesota Ponzi schemer Trevor Cook jailed — in part for not turning over a two-passenger submarine allegedly purchased on eBay with Ponzi proceeds — the following things happened:

    • A would-be PP Blog poster attempted to post the same news release about AdSurfDaily mainstay “Professor” Patrick Moriarty in 10 separate threads over a span of 26 minutes. The early indications are that the spammer was associated with both the alleged ASD Ponzi scheme and Gold Nugget Invest (GNI), an HYIP that tanked earlier this month after advertising tax-free returns of 7.5 percent a week. (One poster after another on the Ponzi boards has defended GNI, saying the program was “real” and “honest” because it paid. The same defenses have been uttered for ASD.)
    • The FBI announced the Ponzi scheme arrests of two Greater Chicago men, alleging they had met in federal prison while serving time for previous fraud schemes. After they emerged from prison, they started a Ponzi scheme involving comic books and movies that bilked investors out of $4 million.

    Just how crazy are things going to get in the Ponzi universe? It’s a universe that already includes figures associated with bizarre litigation centered on bizarre claims they are immune from U.S. law because they are adopted members of “Indian” tribes purported to be “sovereign” and that their sovereignty not only is absolute, but also is portable; figures who claim Ponzi schemes are legal as long as participants get “paid”; figures who claim the presence of convicted felons in one scheme after another is mere coincidence; figures who claim prosecutors are not permitted Constitutionally to interfere with commerce even if the commerce is illegal; figures who believe the United States passed secret legislation in the 1990s in anticipation of a visit by reptilian aliens; figures who claim the answer to Ponzi schemes that plague America is even more Ponzi schemes.

    First, a few paragraphs about the would-be serial poster on the PP Blog earlier today:

    We were working on a story this afternoon when our Comments Box in the Blog’s administrative panel began to bulge from spam from a would-be poster. We always check the spam box several times a day in case our filter flags a legitimate comment as spam. When we took a peek this afternoon, the filter had collected 10 consecutive posts from the same sender.

    Each of the would-be posts was targeted at separate Comments threads below stories. Each was a duplicate of a Justice Department news release on “Professor” Patrick Moriarty’s guilty plea to tax charges earlier this month, a story we covered 15 days ago. (If you’re new to the PP Blog, Moriarty was a member of the alleged ASD Ponzi scheme. His tax case was separate from the alleged scheme masterminded by ASD President Andy Bowdoin, and Moriarty is not listed as a defendant in the ASD Ponzi case. He became notable, however, for advancing a theory that the ASD prosecutors had interfered with commerce. Moriarty also once established a nonprofit entity in the name of a man accused of murdering a woman in cold blood and shooting a Missouri police officer four times.)

    In any event, none of the threads the would-be poster selected to copy and paste the news release pertained to Moriarty. Near as we can tell, the poster may have a link to both the alleged ASD scheme and the GNI “arbitrage” program, an HYIP that tanked recently. The would-be poster did not include an actual comment with his copy-and-paste news release; he simply copied and attempted to paste it in 10 separate threads over a period of 26 minutes.

    The first attempt occurred at 3:03 p.m. ET; it was followed by attempts at 3:24 in two separate threads; 3:25 in two separate threads; 3:26 in a separate thread; 3:27 in two separate threads; 3:28 in a separate thread; and 3:29 in a separate thread.

    As often is the case with ASD, the question is why. Based on a preliminary analysis of data, we believe the would be-poster was a member of the now-defunct Surf’s Up forum, a Pro-ASD site that railed against the government and advocated on behalf of Ponzi schemes. Surf’s Up went missing earlier this month. A forum with Surf’s Up ties that had advocated for a surf known as AdViewGlobal (AVG) went missing last summer — after AVG, which had close ASD ties, suspended payouts.

    We’ll update readers on the would-be serial poster if we develop more information. At the moment, the data suggest his effort is connected in some form or fashion to this story. His name may or may not be “joe.”

    Turning now to the alleged “comic book” Ponzi scheme, the FBI said it operated in the Chicago area and was known as Sundown Entertainment Inc.

    Charged with wire fraud in the case were Daniel Parrilli, 59, of Carol Stream, and Christopher Andersen, 59, of Westmont.

    Parrilli and Anderson allegedly met while serving time for fraud in federal prison earlier this decade.

    The alleged Parrilli/Andersen Ponzi scheme was the second to touch Carol Stream in recent weeks. On Jan. 8, the SEC charged Steve Salutric, 51, a church treasurer, with operating a Ponzi scheme by raiding the Charles Schwab accounts of clients of Results One Financial LLC.

    Salutric is accused of misappropriating at least $1.8 million in clients’ funds, including more than $400,000 from a 96-year-old woman with dementia. The woman, identified by the SEC as “Client A,”  resided in a nursing home.

    Fearing his fraud was about to be exposed, Salutric began to approach clients with offers to pay them “hush money,” the SEC said.

  • Records Suggest Cook/Kiley Firms Owned At Least 12 Large-Screen TVs And Beer-Dispensing Equipment

    In a case that already has featured assertions that alleged Minnesota Ponzi schemer Trevor Cook purchased a submarine on eBay to access his private island in Canada, the receiver in the case has filed papers that suggest Cook also had an affinity for large-screen TV sets.

    Receiver R.J. Zayed listed 10 TV sets with 50-inch screens and two sets with 42-inch screens as assets of the alleged Cook/Pat Kiley Ponzi scheme.

    Nine of the 50-inch sets were manufactured by Panasonic, and the model number suggests they are plasma TVs. One 50-inch set was manufactured by Akai, and the 42-inch sets were manufactured by Insignia.

    Also listed among the assets of the Cook/Kiley enterprises were at least 39 computer monitors with 22-inch screens and at least 19 with 19-inch or smaller screens, miscellaneous computer, office and sound equipment, three shredders, a “Beertender” dispenser, a “keg cooler/tap,” a craps table, a wine fridge and a karaoke machine, according to Zayed’s filings.

    Cook and Kiley — and their companies — were implicated by the SEC and the CFTC in an alleged $190 million Ponzi scheme. Zayed said Cook is not cooperating, and the SEC is seeking sanctions — including a contempt of court order that could jail him — to get him to cooperate.

    Both Cook and his wife have taken the 5th Amendment in the case.

    Among the allegations against Cook is that he purchased hard-to-trace gift cards after a federal judge froze assets in the case and is hiding assets in other ways. The Star Tribune of Minneapolis/St. Paul reported yesterday that a supermarket became concerned when Cook was observed shopping in the store, fearing he could be using frozen assets to pay for groceries.

    Cub Foods put Cook under video surveillance while he was inside and outside the store.

    Read Zayed’s listing of some of the assets in the Cook/Kiley case.

    Read the Star Tribune story/view the video.

  • Iranian-Americans Targeted In Beverly Hills Investment- And Affinty-Fraud Scheme, SEC Says; Debentures Program Allegedly Pitched On Persian-Language Radio Show

    UPDATED 7:03 P.M. ET (U.S.A. JAN. 12) A Beverly Hills radio host pitched his fraud scheme in Persian and targeted Iranian-Americans in Greater Los Angeles, the SEC said today.

    Client funds were used to build a mansion for John Farahi, 52, and and his wife, Gissou Rastegar Farahi, 50, the agency said. Client funds also were transferred to the Farahi Family Trust. John Farahi hosts the daily radio program.

    Named defendants in the case were the Farahis, Beverly Hills-based NewPoint Financial Services Inc. and Elaheh Amouei, 54. The SEC identified Amouei as NewPoint’s controller and the “personal bookkeeper” of the Farahis.

    A company named Triple “J” Plus LLC operated by John Farahi was named a relief defendant. John and Gissou Farahi have control over the Triple “J” bank accounts, the SEC said.

    “They lured victims with false promises of investment safety while secretly enriching themselves and diverting investor funds for their personal use,” said Rosalind R. Tyson, director of the SEC’s Los Angeles Regional Office.

    All of the defendants’ assets have been frozen in the case, which includes allegations that clients were told they were investing in FDIC-insured certificates of deposit, government bonds or corporate bonds issued by companies backed by funds from the Troubled Asset Relief Program (TARP).

    TARP is the $700-billion program operated by the Treasury Department to shore up banks.

    “The vast majority of the money raised was transferred to accounts held by Defendants John and Gissou Farahi,” the SEC said in its complaint. “John and Gissou Farahi, in tum, used the investor funds to, among other things, construct a multi-million dollar personal residence in Beverly Hills, California and to engage in risky options futures trading in the stock market in which . . . John and Gissou Farahi lost more than $18 million in 2008 and the beginning of 2009.”

    Investors were asked to invest in the debentures by the Farahis and/or Elaheh Amouei, NewPoint’s controller, after making an appointment to discuss investment opportunities offered by NewPoint, the SEC said.

    Since at least 2003, NewPoint has sold more than $20 million worth of debentures to more than 100 investors. Clients were told their investments were low-risk, the SEC said.

    At some point, NewPoint prepared Private Placement Memoranda (PPM) literature describing the opportunity as high risk, but most investors said they never received the material, the SEC said. Investors also did not know that they were making loans to John Farahi.

    “[N]ot only did Defendants John and Gissou Farahi and/or Defendant Amouei fail to provide the PPMs to most investors, it appears that they only added the disclosure regarding loans to Defendant John Farahi in 2009, after the offering ceased, the SEC said.

    “[T]he vast majority of the money raised was actually transferred to accounts controlled by the Farahis, including an account at relief defendant Triple ‘J,’” the SEC said.

    Beginning roughly in June 2009, the SEC said, John Farahi and Amouei “made further misrepresentations to investors in an effort to lull them into keeping their money with NewPoint.

    “Investors have allegedly been told that their money is safe and that they are guaranteed to get the entirety of their investment back — despite the fact that NewPoint lacks sufficient funds to make all investors whole,” the SEC said. “John Farahi has also paid back some investors on a selective basis while failing to return money to other investors who have asked for a return of their investment.”

    Amouei, accordring to the SEC, “falsely told some of the investors who have not received a return of their investment that NewPoint was unable to return their money because the Commission has frozen NewPoint’s financial accounts.”

    The NewPoint case in California became the second fraud case since November in which a radio show allegedly was used to pitch a fraudulent  investment program.

    Christian radio host Pat Kiley of Minnesota was accused by the SEC and the CFTC in November of promoting a $190 million Ponzi scheme with Trevor Cook, who reportedly used some of the proceeds to buy a submarine to access a private island he bought in Canada.

  • SEC Seeks Contempt Order Against Trevor Cook; Minnesota Man Said To Have Bought Two-Person ‘Submarine’ With Ponzi Proceeds

    ponziblotterTrevor Cook, the Minnesota man implicated with Christian radio host Pat Kiley in a Ponzi and currency-trading scheme that collected at least $190 million, already has taken the 5th Amendment in a civil case brought by the SEC.

    The SEC now is seeking a contempt ruling against Cook, amid allegations he violated the asset freeze and receivership orders entered by a federal judge last month.

    A hearing on the contempt allegations began Dec. 11, but was continued to Jan. 5. The SEC said Cook, whom investors said bought a submarine on eBay for $40,000 and used it to access a private island he bought in Canada, hid assets from the court “by using an undisclosed credit card to make thousands of dollars of retail purchases.”

    Screen shot: Deposition in the Trevor Cook case.
    Screen shot: Deposition in the Trevor Cook case.

    Chief U.S. District Judge Michael Davis ordered Cook to surrender his passport.

    The Star Tribune of Minneapolis – St. Paul, which finds itself covering at least three major Ponzi scheme cases in the state, reported that Cook bought “gift cards” after the asset freeze.

    An attorney for the SEC argued that the gift cards smack “of money laundering,” the newspaper reported.

    The gift-card purchases occurred after the asset freeze was ordered, the SEC said. The agency also alleged that Cook failed “to turn over assets to the Court appointed receiver, to repatriate assets held in foreign countries, and to produce an accounting of investor funds.”