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Tag: MoneyMakerGroup

  • REPORT: Nicholas Smirnow, Pathway To Prosperity Operator, Sentenced To Prison In Canada

    Nicholas Smirnow: From INTERPOL.
    Nicholas Smirnow: From INTERPOL.

    Nicholas Smirnow, the operator of the Pathway To Prosperity Ponzi-board “program” charged with fraud by U.S. authorities in 2010, has been sentenced in Canada to seven years in prison.

    News of the sentence appeared Sept. 30 at MuskokaRegion.com.

    Smirnow was arrested in Canada for P2P-related crimes in 2014. The United States has submitted an extradition request.

    INTERPOL’s wanted notice for Smirnow is still active. It lists his age as 59 and says he faces charges of conspiracy, securities fraud, wire fraud and money-laundering in the United States.

    In June 2010, the U.S. Department of Justice pointed to P2P as an example of international mass-marketing fraud that occurs on the Internet. The “program” was a Ponzi-forum darling. MoneyMakerGroup and TalkGold are referenced in P2P-related filings in the United States as places from which Ponzi schemes are promoted.

    P2P operated in all the  “permanently inhabited continents of the world,” a member of the U.S. Postal Inspection Service said in 2010.

    Losses were pegged at about $70 million.

    Ponzi forums and social media continue to drive traffic to hideous schemes. Recent examples of Ponzi-board programs include Traffic Monsoon, Zeek Rewards and TelexFree. There are many more.

    NOTE: Thanks to a reader for the heads-up on Smirnow’s sentencing in Canada.




  • SINISTER: TrafficPowerline, A Ponzi-Board ‘Program,’ Threatens BehindMLM

    “The threat did not explain now a negative review on BehindMLM could be any worse than a fawning sales pitch on MoneyMakerGroup. ‘Programs’ that have appeared on that forum have caused billions of dollars in losses globally.” — PP Blog, Sept. 5, 2016

    trafficpowerlinelogoTrafficPowerline, a “program” whose thread-starter at the MoneyMakerGroup Ponzi forum has more than 4,700 posts, reportedly is threatening BehindMLM.com because of a negative review. (More on the bizarre and sinister threat to artificially link BehindMLM to malware and porn below.)

    The mere presence of TrafficPowerline on MoneyMakerGroup suggests tainted proceeds from any number of scams could be flowing to the emerging program. “proReflex” is the starter in a thread dated July 23. The post begins with the classic line of “I am not the Admin.”

    MoneyMakerGroup is listed in U.S. federal court files as a place from which Ponzi schemes are promoted. Infamous schemes such as Zeek Rewards, AdSurfDaily, TelexFree and many others were listed there, contributing to a condition under which polluted money flows from scheme to scheme to scheme.

    A “program” similar to TrafficPowerline — Traffic Monsoon — was shut down by the SEC on July 26, just three days after TrafficPowerline made its MoneyMakerGroup debut. Like TrafficPowerline, TrafficMonsoon was a Ponzi-board scheme.

    In a post dated Sept. 5, BehindMLM reported that Pearse Donnelly of TrafficPowerline and an earlier scheme known as “MoBrabus” was the source of the threat. MoBrabus also was listed on the Ponzi boards. One of its payment processors was Payza, which the court-appointed receiver in the Zeek case has accused of facilitating that mammoth, cross-border scheme.

    Donnelly, according to BehindMLM, demanded the review be taken down within 72 hours or else a “negative SEO” campaign against BehindMLM would begin.

    Tools used against the well-known review site would include “SGA, Xrummer, Scrape BoX, SeNuke and other SEO tools at our disposal or from service providers to create thousands of low PR, PBN, PN, Porn, Link Farms and Malware site backlinks to your site along with teen-girl 10% free sex online 9% harmful for your computer 8% do not open this link 8% porn 8% adult content harmful 8% computer virus 8% dangerous 8%.”

    The apparent TrafficPowerline aim is to artificially damage BehindMLM’s worth with Google and other search engines through fraudulently placed links.

    Despite bizarrely claiming he was “nicely” requesting BehindMLM to kill the review and not issuing a threat. Donnelly reportedly went on to write that “I am fucking serious OZ do not fuck with me take down the fucking pages or I will make it my little project to fuck your site up.”

    The threat did not explain now a negative review on BehindMLM could be any worse than a fawning sales pitch on MoneyMakerGroup. “Programs” that have appeared on that forum have caused billions of dollars in losses globally.

    Sites sometimes have been known to overplay their hands when trying to bludgeon critics. KlearGear.com allegedly once threatened negative reviewers with a fine of $3,500. The site ended up getting sued by a public advocacy group.

    Because the PP Blog today was able to access the TrafficPowerline website, it means the site is accessible in the United States — after the TrafficMonsoon case and the allegations of securities fraud and after California passed a law that backs consumers if companies try to strongarm consumers by limiting speech through nondisparagement clauses.




  • SEC: Claims That Traffic Monsoon Was A Successful Advertising Business ‘Merely An Illusion’

    “The complaint alleges that more than 99% of Traffic Monsoon’s revenue is derived from new investor funds, making claims that it is a successful advertising business merely an illusion.” — U.S. Securities and Exchange Commission, July 28, 2016

    Charles Scoville.
    Charles Scoville.

    EDITOR’S NOTE: This (below) is the full litigation statement of the SEC on its Ponzi case against Traffic Monsoon and Charles Scoville. The statement was issued today. It asserts Traffic Monsoon “raised more than $207 million from investors worldwide, primarily in the U.S., India and Russia.” The case was brought July 26 in Utah federal court. The photo (left) of Charles Scoville is a screen shot by the PP Blog of a video on YouTube featuring Scoville. The SEC’s Salt Lake City office, referenced in the statement below, has experience uncovering online schemes, including the infamous Imperia IBC caper targeted at Americans and others with hearing impairments. Like  Traffic Monsoon, Imperia was a Ponzi-board “program” with a presence on sites such as MoneyMakerGroup and TalkGold. 

    **_______________________________**

    U.S. SECURITIES AND EXCHANGE COMMISSION

    Litigation Release No. 23604 / July 28, 2016

    Securities and Exchange Commission v. Traffic Monsoon et al., No. 2:16-cv-00832-JNP (D. Utah filed July 26, 2016)

    SEC Halts $207 Million Internet-Based Ponzi Scheme

    The Securities and Exchange Commission today announced that it has obtained an asset freeze against the operator of a Utah-based international Ponzi scheme that raised more than $207 million from investors worldwide, primarily in the U.S., India and Russia.

    In a complaint filed in federal court in Salt Lake City on July 26, the SEC alleges that Traffic Monsoon LLC and Charles Scoville, the company’s only member operated an Internet-based Ponzi scheme that they falsely represented to investors was an advertising company. According to the SEC complaint, Scoville began operating Traffic Monsoon in October 2014 as a combination Internet traffic exchange and pay-per-click program and recruited more than 162,000 investors around the world. According to the complaint, although Traffic Monsoon markets itself as a highly successful company, nearly all of its revenue is generated by other investors, not its products or services. The complaint alleges that more than 99% of Traffic Monsoon’s revenue is derived from new investor funds, making claims that it is a successful advertising business merely an illusion.

    The SEC’s complaint alleges that Traffic Monsoon and Scoville violated Sections 5(a), 5(c) and 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5(a) and (c) thereunder. Among other things, the SEC’s complaint seeks permanent injunctions, prohibiting further violations of the laws charged, disgorgement of ill-gotten gains plus prejudgment interest and civil penalties from Traffic Monsoon and Scoville.

    The SEC’s investigation was conducted by Alison Okinaka, Scott Frost and Cheryl Mori of the SEC’s Salt Lake Regional Office. Daniel Wadley is leading the SEC’s litigation.

    SEC Complaint

    [SOURCE] http://www.sec.gov/litigation/litreleases/2016/lr23604.htm

    **_______________________________**




  • TRAFFIC MONSOON: Whack-A-Mole — For Sure

    trafficmonsoonlogoNews came early this morning that the SEC had moved against Traffic Monsoon, calling it a Ponzi scheme. Both the “program” and alleged operator Charles Scoville were charged civilly yesterday in Utah federal court with securities fraud and selling unregistered securities to unaccredited investors.

    Scoville also was the braintrust behind AdHitProfits, a Ponzi-board “program” in part targeted at people who also were targeted in the egregious 2013 Profitable Sunrise cross-border scam in which millions of dollars appear to have vanished overseas.

    As the PP Blog reported on June 2, 2013 (italics added):

    A spammer hit a Profitable Sunrise Facebook site yesterday with five drive-by offers for “AdHitProfits.” All five of the machine-gunned theft bids claimed the same thing: “make money every half an hour…100% commission let your money grow for you at high speed.”

    The AHP “program” also is being pitched on the Ponzi boards, with the thread-starter at MoneyMakerGroup bragging that “Payza, []STP & Liberty Reserve Accepted !!”

    LibertyReserve was described last week by federal prosecutors in New York as a criminal enterprise that had laundered more than $6 billion for Ponzi schemers, credit-card fraudsters, identity thieves, investment fraudsters, computer hackers, child pornographers and narcotics traffickers.

    Traffic Monsoon allegedly used PayPal, SolidTrustPay and Payza, a processing firm under fire from the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case. Payza also is involved in a federal investigation centered in the District of Columbia.

    In its complaint against Traffic Monsoon and Scoville, the SEC says PayPal restricted Traffic Monsoon during the winter, in January 2016.

    Our research shows that Scoville then turned to Payza for the heavy lifting and that Payza attended a Traffic Monsoon event in May 2016, during the spring and while funds in PayPal had been frozen by PayPal.

    From the SEC complaint (italics added):

    After the PayPal freeze, Scoville began using other payment processors more extensively: Solid Trust Pay, headquartered in Ontario, and Payza, headquartered in London with offices in New York. He has also used an account at JPMorgan Chase to receive investor funds.

    Zeek used both SolidTrustPay and Payza, as did the AdSurfDaily Ponzi scheme before it.

    Traffic Monsoon’s haul appears to have exceeded $200 million, potentially making it one of the largest advertising “revshare” schemes of all time. As things stand, it is larger than other well-known revshare frauds such as AdSurfDaily ($119 million) and Banners Broker ($156 million). Some of the Banners Broker cash reportedly ended up in KulClub, yet another Ponzi-board MLM scheme.

    Ponzi-board schemes are eviscerating wealth globally. It is not unusual for such schemes to use multiple payment processors and to target vulnerable population groups. Agencies from the U.S. Department of Homeland Security have been involved in a number of major investigations of Ponzi-board “programs.”

    It is unclear if DHS or other U.S. agencies with the power of arrest are involved in a Traffic Monsoon probe. History has shown, however, that when the SEC brings a civil case, other agencies sometimes carry out criminal investigations on a parallel track.




  • Embezzled Banners Broker Pyramid Funds Allegedly Ended Up In ‘KulClub,’ Another Ponzi-Board MLM Program

    kulclublogo2ND UPDATE 2:25 P.M. EDT U.S.A. More horrible PR for the MLM trade: Banners Broker international pitchman and pyramid-scheme figure Kuldip Josun embezzled at least $3.6 million from affiliates, according to a receiver’s report.

    The money was deposited into a Swiss bank account held by an entity known as World Web Media Inc. and appears to have been used to start an “MLM program” known as “KulClub,” the receiver advised a court in Canada.

    Like the alleged $156 million Banners Broker scheme, KulClub had a presence on the MoneyMakerGroup forum, records show. U.S. authorities have alleged MoneyMakerGroup is a place from which fraud schemes are promoted.

    KulClub purports to be a “unique revenue sharing program in which KulClub shares the majority of its revenue with all its members. No other club can match it!”

    But msi Spergel inc., the Toronto-based Banners Broker receiver, said KulClub likely was started with stolen Banners Broker funds that never were recovered from the Swiss account.

    “The Receiver believes that Josun has since used the Swiss bank account funds for personal purposes, including the launching of his own MLM program called ‘KulClub,'” Spergel alleged. The receiver is seeking a sweeping order preventing the dissipation of assets.

    How did Josun end up with affiliate funds? After becoming the “main representative among international affiliates” of Banners Broker, the huckster allegedly hosted web events, flew to events in Europe, gathered money from hopefuls and kept it for himself.

    From the receiver (italics added/light editing performed):

    In that role, Josun would travel to meet with international affiliates, or potential affiliates, and conduct conference calls and seminars via videoconferencing. His day-to-day occupation with Banners Broker was to maximize Affiliate investment into the program, as well as to establish an international network Banners Broker Network. That is, he was responsible for encouraging the development of overseas affiliates into `super-affiliates’ (or “Resellers”), who would establish their own networks of affiliates.

    In his role as Banners Broker’s international representative, Josun would frequently fly to overseas locations with a significant amount of company funds. Those funds were used to advertise a lifestyle of success and luxury to potential affiliates. Josun spent existing affiliate funds lavishly in maintaining this facade, as he carried out a campaign to woo wealthy new affiliates to the Banners Broker enterprise.

    Josun’s spending in his role as Banners Broker’s international spokesperson lacked any effective oversight. No budgets were set for Josun’s business trips on behalf of Banners Broker, nor was there any control over his expenses.

    The Receiver asserts that Josun would regularly receive funds from affiliates meant to be spent on Banners Broker products. Rather than remit these funds to the company, Josun would redirect the funds to his own personal accounts in offshore jurisdictions, intending to place them beyond the reach of creditors.

    Similar allegations of cherry-picking have surfaced in the TelexFree Ponzi- and pyramid case. Like Banners Broker and KulClub, TelexFree had a presence on the Ponzi boards.

    Josun was hardly alone in misappropriating Banners Broker funds, the receiver alleged.

    Rajiv Dixit, a Banners Broker principal charged criminally,  “purchased six watches from Weir & Sons in Dublin, Ireland: three Rolexes and three Breitfings,” the receiver alleged. “Two of the watches were women’s watches.”

    The receiver’s allegations against Josun appear to be yet-another example of a scammer within a purported revshare “program” scamming both the “opportunity” itself and incoming participants. Although Banners Broker allegedly terminated Josun, it made little difference because the “program” itself was a scam.

    Read the receiver’s report.

    NOTE: Also see RealScam.com Banners Broker thread and this June 19 “Harrison” post.




  • BULLETIN: FEDS: Burks Ran Scam Prior To ZeekRewards

    breakingnews725BULLETIN: (4th Update 9:13 p.m. EDT U.S.A.) Accused Ponzi schemer Paul Burks ran a “pyramid scheme” known as FollowMe1X2 that was a precursor to ZeekRewards, federal prosecutors say.

    A quote about FollowMe1X2 that appears in a prosecution filing today also appears verbatim in a post on the MoneyMakerGroup Ponzi forum dated Sept. 4, 2010, by “charlieone.”

    From the quote: FollowMe1X2 is “a fast-paced network advertising program that was designed to maximize your ad budget, increase your businesses exposure and your bank account exponentially!”

    FollowMe1X2 collapsed and participants were ported into ZeekRewards, prosecutors said.

    Zeek also had a presence on MoneyMakerGroup and other boards referenced in federal court filings as places from which Ponzi schemes are promoted.

    Today’s prosecution filings against Burks, who faces trial next month on charges of wire fraud, mail fraud. conspiracy to commit both and conspiracy to commit tax fraud, come in the form of a “Notice of Intent to Introduce Evidence and Memorandum of Law in Support of its Admissibility.”

    The document is similar to filings against now-convicted Ponzi schemer Andy Bowdoin of AdSurfDaily, another Ponzi board “program.” In the ASD cases, prosecutors tied Bowdoin to scams both before ASD (DailyProSurf) and after (AdViewGlobal and OneX).

    ASD, another Ponzi-board “program,” collapsed in 2008. Like Zeek, ASD used vendors such as SolidTrustPay and AlertPay and purported to have an “advertising” function.

    Like Burks, Bowdoin was accused of porting participants from one scam to another.

    BehindMLM.com reported today that Burks is seeking to have the tax-fraud conspiracy charge against him dismissed prior to trial, scheduled to begin July 5. Prosecutors have not yet responded to his argument.

    But in their notice today, prosecutors argued that the jury should be able to hear evidence that Zeek parent Rex Venture Group LLC had not filed corporate tax returns between 2003 and 2011.

    It also should be able to hear evidence about the FollowMe1X2 scheme, prosecutors contended.

    NOTE: Our thanks to the ASD Updates Blog.

  • After FBI Probe, Ju Ding Inc. (Juding) Exposed As Ponzi, Feds Say; Wenxing Huang Arrested

    From Twitter.
    From Twitter.

    A fraudster who used “fancy cars and parties” to dupe investors has been arrested after an FBI investigation, said Eileen M. Decker, the top federal prosecutor in the Central District of California.

    Wenxing Huang, 33, of San Gabriel, has been charged with money-laundering and wire fraud in an alleged Ponzi scheme that gathered at least $6.9 million. He operated a Brea-based entity known as Ju Ding Inc. Huang also is known as “Di Peng” and “Fatty,” prosecutors said.

    At one point, Huang “orchestrated a Ju Ding holiday party . . . at the Long Beach Convention and Entertainment Center in which luxury items, including a Mercedes-Benz automobile were raffled off,” prosecutors said.

    “Records from the facility show that the event for 2,000 people cost more than $180,000,” prosecutors said.

    Ju Ding Inc. was known simply as “Juding” on Ponzi boards such as MoneyMakerGroup. The “program” also had a presence on social media such as Twitter, Facebook and YouTube. The scheme, prosecutors said, traded on false promises that investors’ “money would be used to invest in and develop technology based on graphene, which is a layer of pure carbon that is only one atom thick.”

    In November 2013, BehindMLM.com reported it had observed potential links between Juding and WCM777, a scam exposed by state regulators and the SEC in 2014. WCM777 purported to be in the cloud-computing business.

    A news release yesterday from Decker’s office on the Juding scheme did not reference WCM777, although the U.S. government is believed still to be investigating that “program.”

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

    As part of the scheme, Huang allegedly offered compensation to investors who recruited others, according to the complaint, which alleges that many investors received little, if any, return on their investments. However, approximately $2.2 million appears to have been returned to clients in what were essentially Ponzi payments.

    Huang is charged with money laundering for allegedly using approximately $1.2 million in investor funds to purchase the Diamond Bar home, which has since been sold.

     

  • At Chicago Symposium, SEC Highlights Pyramid Scheme Task Force And Notes ‘Whack-A-Mole’ Nature Of Online Scams

    “These frauds are easily duplicated, and at times, we find ourselves playing ‘whack-a-mole,’ chasing the same set of fraudsters who, after feeling a bit of heat, simply close down one scheme and quickly set up a new one under a different name.” — Andrew Ceresney, SEC Enforcement Division director, March 2, 2016

    EDITOR’S NOTE: Type “whack-a-mole” into the PP Blog’s search box near the upper-right corner to find our stories that touch on frauds rising to replace other frauds. Examples include so-called “programs” that claim to be “advertising” companies or to have an “advertising” component — for example, Zeek Rewards, TelexFree, Banners Broker and AdSurfDaily. If you’re in an “advertising” program such as MyAdvertisingPays (MAPS) or TrafficMonsoon, you should asking some serious questions and thinking about whether serial fraudsters are whacking you.

    When one scheme collapses, another quickly rises to replace it. Many such schemes operate simultaneously, drafting the unwary into multiple miseries. Ill-gotten gains or losses pile up in the billions of dollars. Yes, billions.

    Of course, “whack-a-mole” is not limited to “advertising” schemes. There are “cycler” schemes such as “The Achieve Community” and its Ponzi-board equivalents. Meanwhile, there are HYIP schemes such as “Profitable Sunrise” and its Ponzi-board equivalents. MoneyMakerGroup and TalkGold are examples of Ponzi boards. The scammers now have added social media such as YouTube, Facebook and Twitter to their arsenal. Vulnerable people and population groups are constant targets.

    Scams such as WCM777 that claim to have a “product” also are part of “whack-a-mole.”

    **________________________________**

    cautionflagLet’s begin by encouraging you to read Andrew Ceresney’s opening remarks at a joint symposium today sponsored by the SEC and the University of Illinois at Chicago. (Link at bottom of story. Also see Twitter links.)

    UIC promoted the event on its website, titling it “How to Detect and Combat Fraudsters Who Target Our Immigrant Groups and Affinity Communities Through Pyramid and Ponzi Schemes.” The institution notes it is “one of the most ethnically and culturally diverse universities in the country,” so it was a perfect place to host such a confab.

    Ceresney is the SEC’s director of enforcement. One of the things the PP Blog noted while reading the text of his remarks is that it included a subhead titled “Pyramid Schemes and Multi-Level Marketing.”

    This reflected on ongoing effort by the SEC to educate the public that the presence of a “product” in a scheme does not necessarily mean no scam is under way. Many MLMers erroneously believe that a “product” (or purported one) offered for sale cures all ills. That is simply not the case. A year ago in Congressional testimony, the director spoke about a “coordinated effort” to disrupt pyramid schemes.

    Ceresney today provided more details on a new Task Force that is combating pyramid fraud. Here is part of his remarks (italics/bolding added):

    After seeing an increase in complaints regarding pyramid schemes and affinity fraud, the SEC formed a nationwide Pyramid Scheme Task Force in June 2014 to provide a disciplined approach to halting the momentum of illegal pyramid scheme activities in the United States. The goal of the Task Force is to target these schemes by aggressively enforcing existing securities laws and increasing public awareness of this activity.

    The Division is deploying resources to disrupt these schemes through a coordinated effort of timely, aggressive enforcement actions along with community outreach and investor education. More than fifty SEC staff members are part of the nationwide Task Force, which is enhancing its enforcement reach by collaborating with other agencies and law enforcement authorities. We are also using new analytic techniques to identify patterns and common threads, thereby permitting earlier detection of potential fraudulent schemes.

    Collaboration with other regulators, including criminal authorities, is an important goal of the Task Force. To advance this goal, the Task Force has hosted an interagency summit attended by over 200 representatives from other federal and state agencies and has presented at local trainings and agency-specific conferences. And, of course, we have partnered with other regulators and criminal authorities to bring high-impact actions in this space. For example, one month after we filed our enforcement action against the operators of the TelexFree pyramid scheme, two of TelexFree’s principals were charged by the criminal authorities.

    Will the “program” you’re currently pitching become the subject of a “high-impact action?” Time will tell.

    In 11 SEC actions since 2012 involving pyramid operators, the damage resulted in ill-gotten gains or losses totaling more than $4.2 billion, Ceresney said today.

    Read his opening remarks at today’s Chicago symposium.

  • Is Profitable Sunrise Pyramid Case At Risk? SEC Declines Comment

    profitablesunriseimage1The SEC this afternoon declined comment on an order by a federal judge in Atlanta that could lead to the dismissal of the agency’s 2013 case against Profitable Sunrise, an alleged international pyramid scheme and offering fraud targeted at U.S. residents by one or more murky figures.

    Such a dismissal almost certainly would embolden overseas HYIP scammers who reach into the United States over the Internet to steal hundreds of millions of dollars. Profitable Sunrise targeted Christians.

    In April 2013, the PP Blog reported that the SEC alleged the “program” was using a “mail drop” in England and that “Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places.”

    Two days ago, on Jan. 19, Judge Thomas W. Thrash Jr. ordered the SEC to show cause within 21 days why the case should not be dismissed — apparently for lack of prosecution.

    “Decline comment beyond what we say in court filings,” the agency told the PP Blog today.

    How the agency would proceed in the next three weeks was unclear.

    Thrash’s order says there has been no action in the case since July 15, 2015, a period of more than six months.

    From the judge’s order (italics added):

    The above complaint was filed on April 4, 2013, on April 4, 2013 the Court granted plaintiff’s Motion for Temporary Restraining Order; on April 15, 2013 the Court granted plaintiff’s Motion for Preliminary Injunction; Clerk’s Entries of Default have been entered as to various defendants; on July 15, 2015 the Court directed the Clerk of Court to Receive Repatriated Funds. Since that date no further action has occurred; IS THEREFORE ORDERED that the plaintiff show cause in writing within twenty (21) days why the case should not be dismissed. The Clerk is DIRECTED to submit the case to the Court for further action at the expiration of the 21 days. SO ORDERED, this 19th day of January 2016.

    One of the claimed “plans” of Profitable Sunrise was bizarrely dubbed the “Long Haul” and purported to pay 2.7 percent a day. At least 34 U.S. states and provinces in Canada issued Investor Alerts or cease-and-desist orders against Profitable Sunrise.

    Among other things, the scheme demonstrated the dangers of doing business with exceptionally murky enterprises making claims that fabulous wealth would flow to investors. U.S. promoters working for commissions apparently believed the “program” was operated by “Roman Novak” and his brother “Radoslav,” a purported attorney.

    Whether the brothers actually exist is unclear. So is the final sum gathered by the “program,” which had a presence on well-known Ponzi-scheme forums such as TalkGold and MoneyMakerGroup.

    No receiver has been appointed to date in the Profitable Sunrise case. How victims would go about filing claims is unclear. So, too, is the amount of money available to victims from actions such as asset freezes.

    Hungary is reported to have suspected Profitable Sunrise of money-laundering.

    In May 2013, the PP Blog reported a Virginia man had petitioned the U.S. court for return of more than $57,000 wired to Profitable Sunrise. The SEC later objected to the petition, arguing it could open the floodgates to similar petitions while the agency was working to repatriate assets that one day could be distributed to victims.

    Christian author James Paris has said he feared for his safety and the safety of his family when writing about Profitable Sunrise. (See PP Blog October 2013 comment on the matter at the RealScam.com antiscam forum.)

    See PP Blog’s tag archive on references to Profitable Sunrise or use the Blog’s search function near the upper-right corner.

    NOTE: Our thanks to the ASD Updates Blog.




  • BULLETIN: ‘TeamVinh,’ A Ponzi-Board ‘Program,’ Charged By SEC

    teamvinhlogoBULLETIN: (8th Update 3:34 p.m. ET U.SA.) The SEC has gone to federal court in Minnesota, alleging that an enterprise known as “TeamVinh” that pushed something called “VPAKs” was operating a securities-fraud scheme targeted at MLMers.

    TeamVinh, which allegedly recruited more than 5,600 participants,  has a presence on the Ponzi boards, including MoneyMakerGroup and TalkGold. Recent chatter suggests the scheme may have been making selective payouts, a classic maneuver in HYIP Ponzi land. The scheme eventually morphed into a “purported commodities trading platform,” the SEC said.

    Morphing into a new scheme is another classic form of Ponzi fraud.

    “Defendants claimed that TeamVinh members are able to obtain the placement of individuals in their downline salesforce through purchasing what TeamVinh refers to as ‘VPAKs,'” the SEC charged. “Each VPAK is supposed to represent another individual who signed up for TeamVinh, and TeamVinh promises to ‘fulfill’ the VPAK by placing the person represented by the VPAK in the member’s downline at the third-party MLM company and in the member’s TeamVinh account. Defendants claim that, through the VPAKs, TeamVinh would ‘continuously SPILL in NEW Active Paying Members into [the existing member’s] Downline.’ Members could also earn funds by referring additional individuals to TeamVinh. ”

    Claims of tremendous spillover are common in MLM schemes.

    Charged were TeamVinh.com LLC and alleged operator Vu H. Le, also known as Vinh H. Le.

    Le, 39, lives in Minnesota and was convicted of forgery in Wisconsin in 1995. He spent two years in prison, the SEC said.

    By 2007, the SEC charged, “the States of Wisconsin and Minnesota barred Le from offering or selling securities in those states based on Le’s involvement in a real estate scam.”

    Le raised more than $3 million through TeamVinh, spending $2 million of it at “a single casino” in Las Vegas, the SEC charged. He allegedly also spent investor money at other casinos.

    Promises of “passive income” were part of the TeamVinh scheme, the SEC alleged. Earlier Ponzi-board scams such as Zeek Rewards and TelexFree made similar claims. So did “The Achieve Community.”

    Ponzi-board posts suggest TeamVinh was using a curious (and lengthy) acronym to sanitize the scheme: ACCESS WEW. This apparently stands for “A Crazily Cost Effective Self-Sustainable Wealth the Easier Way” system.

    A higher-priced scheme within the overall scheme was known as VET, which stood for “Vinh’s Elite Team,” the SEC said.

    The VET membership costs ranged “from $3,995 to $24,995.”

    TeamVinh buy-ins for as low as $40 also allegedly were offered, potentially making the business both a microscheme and a macroscheme.

    With TeamVinh already in trouble in 2014, “Le solicited additional investments from TeamVinh members in what he referred to as the ‘Platform.’ As new member and investor proceeds began to dwindle, Le told existing members and investors that he needed $200,000 to finalize TeamVinh’s launch of VodeOx,” the SEC charged. “Le claimed that an investor had committed the $200,000, but the investor’s bank would not clear the funds.”

    VodeOx purportedly was “TeamVinh’s own MLM company,” after TeamVinh earlier had operated as an apparent affiliate of other MLM firms.

    Read the SEC statement on TeamVinh. Read the complaint.




  • Watch The Trailer For ‘Madoff’ And Think About How You Could Have Avoided Schemes Such As Zeek And TelexFree

    Bernard Madoff, played by Richard Dreyfuss, tells investors "Look, it's a closed fund" in the ABC miniseries. Ponzi schemes often trade on suggestions of exclusivity.
    Bernard Madoff, played by Richard Dreyfuss, tells investors “Look, it’s a closed fund” in the ABC miniseries. Ponzi schemes often trade on suggestions of exclusivity.

    ABC has made available the first trailer for “Madoff,” a network miniseries debuting Feb. 3, 2016. Richard Dreyfuss plays the notorious Ponzi schemer, with Blythe Danner starring as Ruth Madoff.

    Bernard Madoff’s name first appeared on the PP Blog nearly seven years ago, on Dec. 13, 2008. It has appeared numerous times since then.

    Says Dreyfuss, as Madoff, in the trailer: “You want to know how to get people to trust you with their money? I’ll tell you right now: You present it as an exclusive thing.”

    Any number of the “programs” we have covered tried to sell Madoff-like exclusivity. One of them was Zeek Rewards, an alleged MLM fraud involving more than $850 million taken down by the SEC in 2012.

    Zeek Rewards, according to the SEC, called itself a “private, invitation-only, affiliate advertising division” for Zeekler, a penny-auction “opportunity.”

    Of course, the interest rate Zeek promised made Madoff look like an amateur.

    As the PP Blog reported on June 10, 2012, a couple of months prior to the SEC’s Zeek action (italics added):

    When Zeek’s story is compared to the tale of Madoff’s relatively modest (compared to Zeek) but unusually consistent returns of around 10 percent a year, Zeek is outperforming the notorious Ponzi swindler by a factor on the order of 30 to one. Zeek, though, insists it is not offering an investment. It also preemptively denies it is a “pyramid scheme” and plants the seed it will terminate any affiliate who suggests Zeek is offering an investment program.

    Lessons flowing from Madoff continue to go unheeded — things such as suggestions of exclusivity and unusually consistent returns.

    But with HYIPs, the danger signs may be even clearer: preposterous interest rates that dwarf Madoff’s “returns,” a presence of a scheme on the Ponzi boards such as TalkGold and MoneyMakerGroup, menacing behavior by a company or its affiliates, cult-like qualities (such as allegedly existed at TelexFree), bizarre antigovernment rhetoric suggesting the presence of “sovereign citizens” or political extremists.

    One of the classic refrains is that “it can’t be a scam because the company is registered.”

    TelexFree, which allegedly generated $3 billion in economic activity, was “registered.”

    So was Bernard L. Madoff Investment Securities LLC.

    As was the case at Zeek, the TelexFree interest rate dwarfed that of Madoff. From the SEC’s 2014 TelexFree complaint filed years after Madoff made “Ponzi” household word in 2008 (italics added):

    One version of the marketing presentation on the company website contained slides indicating that an AdCentral promoter could clear $2,296 per year on a $289 investment, that an Ad Central Family promoter could clear $11,599 per year on a $1,375 investment, and that a Team Builder promoter could receive as much as $39,600 per year.

    The “Madoff” trailer is below. It includes lots of lessons for the mind and soul in just one minute — and it’s not just about making people think they are becoming members of an exclusive club. The con man serving 150 years in federal prison also made appeals to naked greed.

    Your Ponzi-board sponsor may be doing the same thing to you right now.