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.
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.
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.
UPDATED 7:41 P.M. EDT U.S.A. If the office of U.S. Attorney Stephen R. Wigginton of the Southern District of Illinois gets its way, Canada will turn over accused international Ponzi schemer Nicholas Smirnow to the United States.
An “extradition request has been submitted to the government of Canada for the extradition of SMIRNOW to the United States,” according to a March 20 update to the Smirnow victims’ site maintained by Wigginton’s office.
Ontario Provincial Police notified Wigginton’s office of the Smirnow arrest in December, according to the victims’ site. U.S. federal prosecutors and the U.S. Postal Inspection Service accused Smirnow in 2010 of operating “Pathway To Prosperity,” a $70 million Ponzi-board swindle that flowed across six continents into 120 countries and affected tens of thousands of participants.
P2P, as the scheme was known in shorthand, allegedly created victims in 48 of the 50 U.S. states and in 18 of the 38 counties that comprise the Southern District of Illinois. The concentration in the district may suggest a major P2P promoter was operating in the area.
Many HYIP schemes offer promoters commissions to round up participants. Prosecutors have described the interest rates offered by P2P as absurd.
U.S. prosecutors said this in 2010 (italics added):
According to the complaint, investors were offered their choice of seven, fifteen, thirty, and sixty day “plans.” At the daily interest rates promised by SMIRNOW, a seven day plan supposedly produced an annual return of 546% and a sixty day plan supposedly was returning an annual return of 720%. Fifteen and thirty day plans supposedly returned equally spectacular rates of return. If an investor reinvested both his original investment and the supposed earnings that Pathway to Prosperity promised on a seven day program, for instance, at the daily interest rate quoted by SMIRNOW, the annual return would have been approximately 17,000%.
Smirnow initially slipped out of Canada to the Philippines, where he ended up in jail, according to court filings. Although the United States sought to extradite him from the Philippines nearly five years ago, the process reportedly was canceled, resulting in Smirnow eventually heading back to Canada.
U.S. filings from 2010 identified him as a resident of Baysville, Ontario. Precisely why the earlier process was canceled is unclear.
What is clear is that the United States has now asked Canada to turn him over.
As “Achieve Community” promoter Kristen Jennifer shows her back office in the “Unison Wealth” program, ads for other “programs” appear, including some “programs” on well-known Ponzi-scheme forums.
EDITOR’S NOTE: In litigation related to Zeek Rewards, a Ponzi-board “program,” court-appointed receiver Kenneth D. Bell has raised a concern that network-marketers may be proceeding from one fraud scheme to another. Bell has asked a federal judge to take “judicial notice” of certain YouTube videos.
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UPDATED 10:07 P.M. ET U.S.A. “Unison Wealth” is a “program” on MoneyMakerGroup from which a promoter claims “Turn $35 One-Time Into $1545.” It’s also on TalkGold. Both MoneyMakerGroup and TalkGold are forums listed in U.S. federal court files as places from which Ponzi schemes are promoted.
One such reference to the forums is in the context of Nicholas Smirnow, the operator of the Pathway To Prosperity HYIP fraud who was arrested in Canada this month after being charged by the United States in 2010 and spending time in the Philippines.
Pathway To Prosperity allegedly plucked people from 120 countries for $72 million. An affidavit by the U.S. Postal Inspection Service in the Smirnow case specifically references MoneyMakerGroup and TalkGold. The affidavit has been available online for more than four years and is published by the office of Stephen R. Wigginton, U.S. Attorney for the Southern District of Illinois.
A “program’s” presence on the Ponzi boards is a crimson-red flag that a scam is occurring. Thousands of promoters of Zeek Rewards, a Ponzi-board “program” alleged to gave gathered on the order of $897 million, now face litigation aimed at clawing back their “winnings” from Zeek. At least one payment vendor for Zeek claims it was rendered insolvent through its business relationship with North Carolina-based Zeek.
On another Ponzi-board front, promoters and vendors of TelexFree — an alleged $1.2 billion fraud — also are facing Zeek-like litigation nightmares.
Like Pathway To Prosperity, Zeek and TelexFree, “Achieve Community” also has a Ponzi-board presence. This potentially sets the stage for new HYIP litigation nightmares from law-enforcement, receivers mandated by court order to round up fraud proceeds and class-action lawyers. And because some Achieve Community promoters are simultaneously promoting other Ponzi-board “programs,” any litigation that emerges could be amplified across multiple courts. Achieve, for example, appears to be operating in Michigan and Colorado.
In theory, an Achieve promoter living in, say, Florida (or any other state) could be compelled by court order to appear in a federal court in another state to produce documents, sales materials, promos and business records.
Back-Office Tour By Achieve Promoter Is Revealing
Promoting Achieve is bad enough. But some Achieve promoters now are pitching other Ponzi-board “programs.” One YouTube promo dated Dec. 20 for Unison Wealth by an Achieve promoter takes prospects inside the Unison Wealth back office.
Remarkably — and without comment from Achieve/Unison promoter Kristen Jennifer — the promo shows one ad after another for HYIP schemes loading in the Unison back office. (The ads load as Kristen pitches Unison.)
The first of these is “MyTrafficValue.” As Kristen tries to sell viewers on Unison, a banner ad for MyTrafficValue claims “invest to earn 110% within 4 days or daily payments until 125%.”
Who placed the ad is unknown, but the mere presence of the ad shows that Unison is driving traffic to a Ponzi-board “program” with a 141-page thread at MoneyMakerGroup.
Lo and behold, an ad for Cycles 24/7 also appears in the Unison back office of Achieve promoter Kristen. (BehindMLM.com has a report dated today on Cycles 24/7.)
What obviously is occurring is that one scam is giving synergy to another. It hardly ends with Cycles 24/7.
Indeed, even as Achieve promoter Kristen is narrating her ad for Unison, ads for other Ponzi-board “programs” load on the screen. Ads for each of these “programs” (and others) appear:
BitcoinCycler.
TrinityLines.
OneTenMethod. (URL appears to be OwnMatrix.com, with “OWN” an acronym for Online Wealth Network.)
HeavenPaid. (“THIS DONT [sic] SUCK” is among the claims.)
MyAdvertisingPays.
ClickAdPays.
Super 2×7 Matrix.
EveryoneCycles.
During the same 13:18 YouTube promo by Achieve member Kristen for Unison, ads for other “programs” appear on the screen. (In some cases, these may include descriptors, rather than the actual “program” name.) This lineup includes Auto Mass Traffic, Dollar Funnel, $20 Quality AdPack, AdBoardMarketing, Private Cycler, Seven Save In Gold & Silver from $25 (edited Jan. 5, 2015), NetPennyStocks.com (” . . . Makes You Earn 101,970.75 And Get Paid Weekly”).
A couple of ads for what appear to be “leads” program also appear. Some other names that appear in the ad are too fuzzy to be recognizable.
Regulators have been warning for years about scams spreading on social media.
In the Unison Wealth video, Kristen says, “I’m gonna keep you posted on this, but I have to be mindful of YouTube because YouTube doesn’t really like me posting result videos for some reason.”
There are other instances, including the eAdGear case in which the SEC contacted YouTube owner Google for information. The eAdGear case speaks to the issue of a scam trying to sanitize itself by touting supposed links to legitimate companies. Achieve promoters are doing the same thing when they assert Achieve couldn’t possibly be a scam because certain well-known financial vendors do business with it.
Think of Enron, a colossal fraud. That famous financial firms did business with it was immaterial to the issue that Enron itself was a huge scam.
Kristen also ventures there may be certain tax advantages when one joins Unison Wealth. Veteran MLM huckster Phil Piccolo of TextCashNetwork, DataNetworkAffiliates and OWOW — disasters one and all — is infamous for making such claims.
Is there any doubt that network marketers are falling off one cliff after another and, in one “program” after another, putting on blindfolds? These scams are gathering billions of dollars.
Friends, Kristen very well could be one of the nicest, most sincere people you’d ever want to meet. But she is grossly misinformed about Achieve and Unison Wealth.
The Zeek and TelexFree litigation alone offers compelling examples of decidedly unpleasant things that can happen when HYIP “programs” crater or attract regulatory scrutiny. For promoters to ignore these cases is to ignore peril.
Achieve promoters currently are explaining away criticism as the tool of “haters.” Zeek and TelexFree promoters did the same thing.
URGENT >> BULLETIN >> MOVING: (6th update 9:35 p.m. ET U.S.A.) Nicholas Smirnow, still listed by INTERPOL as a person wanted by the United States in the alleged Pathway To Prosperity (P2P) HYIP Ponzi scheme that affected people in 120 countries, has been arrested at Toronto’s Pearson International Airport, Canadian media outlets are reporting.
U.S. federal prosecutors charged Smirnow, believed now to be 56 or 57, in 2010. He has been listed by INTERPOL since that time.
P2P was an instance of international mass-marketing fraud, U.S. authorities said in 2010. Though large for its time in the 2008 to 2010 time frame after allegedly gathering more than $70 million and affecting 40,000 investors, P2P since has been eclipsed in dollar volume and victims count by other mass-marketing fraud schemes such as Zeek Rewards and TelexFree.
Professor James E. Byrne, an HYIP expert consulted by the U.S. government in the P2P case, said in 2010 that “the investment scheme described in the materials that I have reviewed are not legitimate but resemble and are classic instances of so-called high yield frauds and fraudulent pyramid schemes. The proposed returns are excessive for even the most risky legitimate investments and are simply preposterous for investments whose principal is supposedly guaranteed.”
From Byrne’s P2P analyis (italics added):
The funds are turned over to the investment and “earn” returns that range from 1.5% daily for a 7 day plan Plus the return of the initial investment to 2.67% daily for a 60 day plan or 160.2% plus the return of the initial investment. The weekly returns on the 7 day investment would amount to approximately 540% per year without taking into account the principal and the 60 day plan would return approximately 950% annualized.
Like many HYIP schemes before and after, P2P had a presence on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. Both forums are referenced in P2P-related court filings. TalkGold got a mention last week in the Liberty Reserve money-laundering case.
Like current schemes with a Ponzi-board presence such as “Achieve Community,” the P2P tentacles spread far and wide and sucked in vulnerable people such as senior citizens. From a PP Blog story on May 31, 2010 (italics/bolding added):
The scheme was almost unimaginably widespread, the U.S. Postal Inspection Service said in an affidavit.
“Financial records of payment processors utilized by P-2-P to collect investment funds from investors show that approximately 40,000 investors in 120 countries established accounts with P-2-P,” a postal inspector said. “Despite the fact that the investment was supposedly ‘guaranteed, investors lost approximately $70 million as a result of [Smirnow’s] actions.”
The probe began when the U.S. government received a referral from the Illinois Securities Department “concerning an elderly Southern District of Illinois resident who had made a substantial investment in P-2-P,” the postal inspector said in the affidavit.
“In addition to P-2-P’s own website, I discovered that P-2-P’s investment scheme was marketed on other websites, including High Yield Investment Program forums, which I was able to access directly through the internet,” the inspector said.
Before long, the inspector determined that the scheme cost investors losses in 48 of the 50 U.S. states, and 18 of the 38 counties that comprise the Southern District of Illinois, prosecutors said.
Such penetration in Illinois may suggest Smirnow had a promotional arm in the state. The complaint spells out a case against conspirators “known and unknown,” and the complaint notes that family members told other family members about the scheme.
“When P-2-P’s funds were depleted and when investors did not receive a return of their funds as they had been promised, [Smirnow] caused a posting on P-2-P’s private forum warning investors not to complain to payment processors about P-2-P’s failure to return their money or they would find themselves ‘on the outside looking in,’” prosecutors charged.
The postal inspector has spoken to “hundreds of P-2-P investors” during the course of the investigation, according to court filings.
“Hundreds [of people] sent me copies of printouts they had made of P-2-P’s website, postings that had been made on the P-2-P’s members forum, and internet sites touting high yield investment programs which contained postings related to P-2-P,” the postal inspector said.
With “Achieve Community,” promoters claim that $50 turns into $400 in three months or less. Participants are encouraged to roll over profits.
Achieve Community promoters have published extrapolations that show “earnings” in the tens of thousands, hundreds of thousands and even the millions of dollars.
**[UNCONFIRMED]** A report in Brazilian media translated by Google Translate from Portuguese to English says that prosecutors in Brazil have asked a U.S. court to prevent new members from joining TelexFree and to block the accounts of TelexFree figures Carlos Wanzeler, James Merrill, Carlos Costa and Lyvia Wanzeler.
The PP Blog could not immediately confirm the report. If it is true, it could mean that law-enforcement agencies in Brazil have contacted their U.S. counterparts and asked them to begin the process of investigating a potential seizure of TelexFree-related funds that may be in the United States and perhaps to disable or otherwise block the functionality of the TelexFree web domains. The United States has said on various occasions that it is interested in fostering partnerships with law-enforcement agencies across the globe to combat commercial fraud online.
As of 1:03 p.m. EDT today in the United States, the TelexFree websites remained online and appeared still to be capable of enrolling recruits.
TelexFree has said it has U.S. arms in the states of Massachusetts and Nevada. Some U.S. afffiliates of TelexFree also appear to have formed business entities in California and Florida. Some TelexFree affiliates have claimed the “opportunity” did business through Bank of America, TD Bank and ProPay. (See July 8, 2013, PP Blog report on some of the claims.)
Despite allegations in Brazil that TelexFree was conducting a massive pyramid scheme and that a Brazilian judge and prosecutor had been threatened with death, TelexFree nevertheless held a rah-rah session in California late last month in which an MLM pitchman appears to have tried to sustain the scheme by telling a joke about “Carlos Danger,” an online identity purportedly used by U.S. Democratic politician Anthony Weiner. A companion TelexFree promo playing in the United States on YouTube claims that people who send $15,125 to TelexFree can expect to profit to the tune of more than $42,000 in a year.
TelexFree has a presence on well-known Ponzi-scheme forums such as TalkGold, MoneyMakerGroup and DreamTeamMoney. The forums previously were used as staging grounds for the Legisi Ponzi scheme, the AdSurfDaily Ponzi scheme, the PathwayToProsperity scheme, the Zeek Rewards scheme and the Profitable Sunrise scheme, among others. The SEC has described Zeek as a $600 million Ponzi- and pyramid fraud. The agency has described Profitable Sunrise as a fraud that may have gathered tens of millions of dollars through a series of accounts. Federal prosecutors in Illinois have described PathwayToProsperity as a fraud that made its way into at least 120 countries.
In May, the United States indicted the Liberty Reserve payment processor and forced it offline, amid allegations that Liberty Reserve and some of its operators had engaged in a $6 billion money-laundering conspiracy. In June 2011, U.S. Attorney General Eric Holder described the amount of money being stolen online as “staggering.”
“In recent years, we’ve seen clear, and alarming, advances in the sophistication and commercialization of crimes involving electronic networks,” Holder said. “And the staggering volume of money being stolen online today has the potential to threaten not only the security of our nation — but the integrity of our government, the stability of our economy, and the safety of our people.”
Nearly a year later — in May 2012 — INTERPOL said that “[Eighty] per cent of crime committed online is now connected to organized gangs operating across borders.”
In October 2012, Lisa Monaco, then-Assistant Attorney General for National Security, said that cyber intrusions may have resulted in “the greatest transfer of wealth in history.”
Monaco is now President Obama’s chief counterterrorism adviser.
Some TelexFree members have claimed that the purported “opportunity” has gathered in excess of $300 million. Among other things, TelexFree has purported to be in the hotel-development business in the run-up to the 2014 World Cup and the 2016 Summer Olympics in Brazil. TelexFree, an MLM business, also purports to be in the VOIP telephone business.
Many HYIP “opportunities” that use an MLM sales model have members and promoters in common and promise absurd rates of return. The practice has led to questions about whether groups of MLMers — however loosely associated — may be engaging in willful blindness and causing banks and payment processors to become warehouses for fraud proceeds.
The ASD, Zeek, Legisi, PathwayToProsperity and Profitable Sunrise HYIP schemes may have gathered on the order of $1 billion, court filings suggest. Alleged PathwayToProsperity operator Nicholas Smirnow is listed as wanted by INTERPOL. So is Robert Hodgins, who reportedly once provided payment services to ASD and is listed as an INTERPOL fugitive in a money-laundering case allegedly involving the offloading of narcotics profits in Colombia.
“HYIPs use an array of websites and social media — including YouTube, Twitter and Facebook — to lure investors, fabricating a ‘buzz’ and creating the illusion of social consensus, which is a common persuasion tactic fraudsters use to suggest that ‘everyone is investing in HYIPs, so they must be legitimate.’” — The Financial Industry Regulatory Authority (FINRA), July 15, 2010
FINRA issued a warning back in 2010 against HYIP schemes, pointing out that they often trade through social-media sites such as forums, YouTube, Twitter and Facebook. The warning came on the heels of the collapse of the Genius Funds “program” ($400 million) and the filing of criminal charges in the United States against Nicholas Smirnow, an alleged former bank robber in Canada who allegedly was running the Pathway To Prosperity (P2P) Ponzi scheme. P2P is alleged to have gathered more than $70 million.
P2P even got a mention on the U.S. Department of Justice Blog. That mention came in the form of a warning about international mass-marketing fraud.
Nearly three years later, Smirnow, 55, is still listed by INTERPOL as an international fugitive.
So is Robert Hodgins, 68. Hodgins, a Canadian supplier of debit cards to HYIP schemes, is charged in a money-laundering case in the United States. It is alleged that cards Hodgins supplied were used by narcotics traffickers to offload millions of dollars in “profits” at ATMs in Medellin, Colombia.
Speaking of Colombia . . . well, it was one of the staging grounds of the infamous D.M.G. Group (DMG) multilevel-marketing pyramid scheme of David Eduardo Helmut Murcia Guzman (David Murcia). Murcia, too, was tied to narcotics traffickers. His collapsed pyramid scheme gathered hundreds of millions of dollars. The anger spilled out onto the streets.
Just about all of these schemes made absurd claims. Genius Funds, for example, promised a payout of 6.5 percent a week. Compare that absurd claim to the Profitable Sunrise claim of 2.7 percent a day through its bizarrely named “Long Haul” plan with a purported payout timed to coincide with Easter. A scheme bizarrely known as Cash Tanker was operating at the same time as Genius Funds. Like Profitable Sunrise, Cash Tanker purported to be a Christian enterprise. It’s gone now, too. So is Profitable Sunrise. Their members were cast into the sea like so much chum.
Enter the Facebook boat-sharks and the contemptible “lifelines” they’re tossing toward the people struggling to stay afloat in rough seas . . .
Despite all the warnings — despite all the publicity surrounding HYIP schemes — opportunists are descending on Facebook today to recruit Profitable Sunrise members (the people struggling in the water) into new scams. The same thing has happened repeatedly, perhaps most prominently in August 2012, after the SEC described the Zeek Rewards “program” as a $600 million Ponzi- and pyramid scheme.)
Boat-sharks posting on a Profitable Sunrise Facebook site today are promoting schemes such as “SuperWithdraw,” “Whos12,” Maxi-Cash,” “FairyFunds,” “Roxilia,” “OptiEarn,” “AVVGlobal,” “ProForexUnion” and “MajestiCrown.” Some of the emerging schemes promise to pay even more than Profitable Sunrise.
A woman who described herself as a Zeek victim filed copies of postal receipts in federal court today. Source: Screen shot of federal court files. Redaction by PP Blog.
UPDATED 8:26 A.M. EDT (OCT. 31, U.S.A.) Saying it would save money, the court-appointed receiver in the Zeek Rewards Ponzi scheme case has asked a federal judge to treat the receiver’s Oct. 8 preliminary liquidation plan as a status report. (See Oct. 9 PP Blog story.)
Separately, yet another Zeek member has declared herself a victim of the alleged $600 million Zeek fraud scheme operated by Paul R. Burks and Rex Venture Group LLC. Two other Zeek members effectively did the same thing earlier this month. On Aug. 17, the SEC alleged that Zeek was a massive Ponzi- and pyramid scheme that potentially fleeced more than 1 million people.
In August, Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina ordered receiver Kenneth D. Bell to file the first status report in the case by Oct. 30. Among other things, status reports inform judges about the efforts under way to recover proceeds linked to alleged fraud schemes and return them to victims.
In the Zeek case, status reports are due within 30 days of the end of a quarter — for example, the third quarter of the calendar year ended Sept. 30, making the first Zeek status report due Oct. 30. The second is due Jan. 31, 2013, a month after the end of the fourth quarter of the calendar year on Dec. 31, 2012.
Bell said in court filings today that the information in the Oct. 8 report included “the same information” due today.
“Given that a separate Quarterly Status Report would be redundant, and in the interest of preserving Receivership assets, the Receiver respectfully requests that the Court order that the Preliminary Liquidation Plan be treated as the Receiver’s First Quarterly Status Report,” Bell petitioned Mullen.
Mullen had not acted on the request by late this afternoon, according to the docket of the case.
How Zeek enthusiasts on Ponzi-scheme boards such as TalkGold and MoneyMakerGroup will react to Bell’s request was not immediately clear. One-percent-a-day (or more) schemes such as Zeek gain a head of steam in part because willfully blind scammers who populate the Ponzi cesspits position the “programs” as legitimate.
The demonization of Bell on the Ponzi boards and elsewhere began shortly after the SEC brought the Zeek case. As was the case in the AdSurfDaily prosecution brought by the U.S. Secret Service in 2008, some Zeek members have claimed that the government is manufacturing victims where none exist. The ASD and Zeek Ponzi schemes fetched a combined sum of at least $719 million, nearly three-quarters of a billion dollars, according to court filings.
Both frauds operated as classic Ponzi schemes that recycled money from members to create the illusion of sustainability and profitability, according to investigators.
Both Zeek and ASD were promoted on forums listed in federal court filings as places from which Ponzi schemes are promoted. Earlier schemes promoted on the forums include Legisi and Pathway To Prosperity, which gathered a combined sum of more than $140 million and affected tens of thousands of people, according to court filings.
Legisi operator Gregory McKnight faces sentencing next month in his Ponzi scheme case. Alleged Pathway To Prosperity operator Nicholas Smirnow, meanwhile, is listed by INTERPOL as a wanted fugitive. As was the case with Zeek, the SEC and Secret Service led the Legisi probe. The U.S. Postal Inspection Service brought the Smirnow/Pathway to prosperity case, saying the scam affected individuals in 120 countries.
ASD operator Thomas A. “Andy” Bowdoin is serving a 78-month prison sentence. He was sentenced in August 2012.
Despite claims that Zeek created no victims, at least three individuals already have claimed in court filings to have been scammed by Zeek.
In a filing docketed today, Maria Aide Gomez claimed she sent North Carolina-based Zeek parent Rex Venture Group five postal money orders for $1,000 each in May and paid an additional $300 to maintain her Zeek membership.
Gomez described herself as a “Victim of fraud and deception” on the part of Zeek, Rex Venture Group and Paul R. Burks, the operator of Zeek and Rex Venture. The money orders Gomez sent to Zeek were purchased at a post office in Washington state, according to exhibits that accompanied the filing.
Bell, the receiver, is experienced as both a defense attorney and a prosecutor. The U.S. Department of Justice lauded Bell a decade ago for his successful prosecution of a Hezbollah terrorist cell operating in the United States.
“[F]raudulent commercial schemes are not noted for their internal consistency.” — Professor James E. Byrne, consultant to FBI and Scotland Yard (among others) and HYIP expert hired by U.S. government to assess the alleged Pathway To Prosperity scheme in 2010
Frederick Mann
In a bizarre conference call for the JSS Tripler/JustBeenPaid “program,” a caller who identified himself as a former AdSurfDaily member raised the issue of the ASD Ponzi scheme case brought by the U.S. Secret Service in 2008, questioning whether JSS/JBP was safe from regulatory scrutiny or “getting too big and drawing certain attention.”
The implication of the remark was that the attention of the U.S. government would be unwanted.
With listeners identifying themselves as U.S.-based members of JSS/JBP on the line, Frederick Mann suggested that his purported program was outside the reach of U.S. law enforcement.
“Just Been Paid is not based in the U.S.,” Mann replied to the caller, after the female host of the call had paraphrased the caller’s query to Mann. The host paraphrased the question because Mann said he didn’t catch it the first time around.
” . . . [H]e was making reference to AdSurfDaily and that they were closed down, and he wants to know what we have in place to protect Just BeenPaid for it not to happen like AdSurfDaily,” the host said to Mann.
“Just Been Paid is not based in the U.S., and our servers are not in the U.S.,” Mann replied. “We don’t have an office in the U.S.”
But Mann’s answer did not speak to costly civil and criminal litigation that could ensue against JSS/JBP’s U.S.-based members, all of whom are using wires that run through the United States to participate in the purported program and some of whom are using U.S. wires to recruit downline members. Nor did the answer speak to actions the United States could take against JSS/JBP itself.
In 2008, marketing materials identified Mann as an ASD promoter. In January 2012, the Italian securities regulator CONSOB announced a JSS/JBP-related probe and issued a 90-day suspension order. JSS/JBP purports to pay out at a daily rate of 2 percent, double that of ASD. On an annualized basis, the payout rate of JSS/JBP corresponds to a return that is between 48 and 73 times the typical rates that put Bernard Madoff in prison for 150 years. ASD President Andy Bowdoin was indicted on Ponzi scheme charges in December 2010.
Bowdoin specifically was accused of wire fraud, securities fraud and selling unregistered securities. The U.S. Secret Service seized 10 of his personal bank accounts in August 2008, amid Ponzi allegations. Other court filings that became public in 2010 showed that the Secret Service also had seized bank accounts linked to some individual ASD promoters.
Mann previously has declined to identify JSS/JBP with a nation-state, meaning investors do not know where the “program” is operating from. JSS/JBP has no known securities registrations, and its U.S. affiliates very well could be selling unregistered securities to U.S. citizens via wire while at once implicating themselves and their recruits in a Ponzi scheme that is trying to disguise itself as a legitimate business.
Even if it is presumed to be true that the United States could not act against the company itself — and that’s a big “if” because U.S. law enforcement has a number of options should it choose to exercise them — U.S.-based affiliates of the “program” likely are running afoul of any number of civil and criminal statutes.
Internal Inconsistencies
In 2010, Professor James E. Byrne — who has consulted with the FBI and Scotland Yard and was hired by the United States to offer an expert opinion on the Pathway To Prosperity (P2P) HYIP scheme — observed that “fraudulent commercial schemes are not noted for their internal consistency” and that materials he examined in the P2P case displayed such inconsistencies.
After a probe by the U.S. Postal Inspection Service, P2P operator Nicholas Smirnow was charged criminally and accused of running an international financial scam. The purported return rate of JSS/JBP is somewhat on par with the rates of the alleged Smirnow/P2P HYIP scheme.
Internal inconsistencies were on full display during the March 8 JSS/JBP call featuring Mann.
As one example, a caller who identified himself as “John” and appeared to be speaking in U.S. English asked Mann for some specifics about the program, voicing that he was confused.
“All your marketing material — your website and now this conference call — has confused me more than anything I’ve ever heard in my life,” John said.
“You don’t have any answers for the [gentlemen] that have asked questions,” John said.
Mann suggested that John “submit a help request.”
Apparently growing agitated and increasingly confused, John shot back, “I submit that I just would like to have a straight answer.”
Mann again pointed John to the company’s web-based explanations and resources.
“The basic approach” to JSS/JBP, Mann explained, is to “find one thing that you understand and then find another thing that you understand, and that way you keep on finding things that you can understand.”
Unmoved by Mann’s response, John shot back, “I have two master’s degrees and I’m telling you that I do not understand it.”
John was the seventh caller to have asked Mann questions during the March 8 call. An eighth caller then came on the line. He identified himself as “Rick” (or by a name that sounded like Rick), saying he was from “California.” (Note: Garbling during the recorded call sometimes made it difficult to hear a name clearly.)
Rick questioned whether callers such as John should be asking Mann such “basic” questions, asserting that Rick, unlike John, had no master’s degree but nevertheless understood the program.
At that point, Mann observed that online money-making programs may have a “bigger learning curve.”
After Rick exited the line, a caller who identified himself as “Michael” from “San Francisco” stepped up to the plate for Mann and JSS/JBP.
Michael asserted that, like John, he has a “master’s degree,” adding that “I have lots of degrees” but noting that his academic pedigree was “really not applicable to online money-making.”
As guidance, Michael suggested that JSS/JBP promoters sign up for “all” of the payment processors used by the program — but Michael did not tell listeners that all of the processors with which JSS/JBP has associated itself are operating offshore (from a U.S. standpoint), are known to be friendly to fraud schemes and may deny customers U.S. consumer protections.
More Internal Inconsistencies
Other examples of internal inconsistencies presented themselves during the call, a recording of which was about 48 minutes in length.
One caller who identified himself as residing in “Florida” asked Mann about the importance of the “patent” claim on JBP’s website.
Mann initially replied that the “patent” claim is “not important at all.”
The response, however, gives rise to questions about why JSS/JBP even would mention a patent if it was “not important at all,” particularly since the “program” had altered the patent claim over time.
Prior to a website alteration that appears to have occurred last month, JSS/JBP made this specious claim: “JustBeenPaid! (JBP) and its related programs, including JSS-Tripler, are licensed under United States Patent 6,578,010.”
Those words were changed to read, “JustBeenPaid! (JBP) and its related programs operate in accordance with United States Patent 6,578,010 (now public domain).”
After reflecting on the caller’s patent question, Mann said this, “In any case, the patent is public domain. It doesn’t actually protect anything. But what is relevant about it is that a patent that covers some of what we do was issued and was approved by a government agency.”
In the United States, patents are issued by the U.S. Patent and Trademark Office, a government entity. The office is not the nation’s securities regulator.
It is common for scammers to try to associate a scheme with the government as a means of planting the seed that the government has full knowledge of the “program” and has endorsed it. The ASD scheme, for example, traded on the name of the President of the United States — something that caught the attention of the U.S. Secret Service, which has the twin duties of guarding the President’s life and protecting the U.S. financial system from criminals.
Callers also expressed confusion about “commission” payments from JSS/JBP and raised questions about an emerging JSS/JBP “Platinum” program that would accompany an existing “Premium” program through which some earlier members had paid higher fees believing they would “cycle” faster and make more money.
Based on comments made during the call, it appears as though the “Platinum” program is priced higher than the “Premium” program — and members are concerned that their earlier “Premium” purchases would be for naught if new “Platinum” purchasers effectively could pay more money to cut in line and “cycle” faster than them.
Here is an imponderable: Is there any ceiling to the absurdities in the HYIP sphere and the destructive force it exercises around the web?
On Wednesday, the PP Blog received repeated spams from U.S.-based IPs. The spammer used the handle “invest liberty reserve” and targeted two threads, including this one about JSS Tripler 2, a purported “program” that purportedly based its name on JSS Tripler. JSS Tripler is a purported element of JustBeenPaid, an “opportunity” purportedly operated by Frederick Mann that claims it pays a return of 60 percent a month.
Liberty Reserve is an “offshore” payment processor favored by HYIP schemes, including JSS Tripler/JustBeenPaid. Wednesday’s spam bids used purported email addresses at AOL and Hotmail.
One of the Wednesday spams featured a graphic swiped from PonziNews, once a sister site to the PP Blog. The spammer attempted to use the stolen graphic in his posting bid on the PP Blog.
It was not the first time the Blog’s graphics had been used in a nefarious way online. On Dec. 12, 2010 — in commemoration of its 1,000th post — the PP Blog recounted a July 2010 story that its Breaking News graphic had been swiped and placed inside a promotion for Data Network Affiliates.
DNA was a scam associated with huckster Phil Piccolo. The “opportunity” traded on the names of Oprah Winfrey and Donald Trump and advertised a nonexistent cell-phone plan of unlimited talk and text for $10 a month, an offshore “resorts” scheme and a “mortgage-reduction” scheme — all while tying itself to Christianity, the U.S. AMBER Alert system of locating abducted children and a purported bid to end world poverty.
It’s worth noting that some JSS Tripler/JustBeenPaid promoters also traded on Winfrey’s name.
In the same December 2010 commemoration post, the Blog reported that Janet Napolitano, the secretary of the U.S. Department of Homeland Security, had been called names that would peel paint when DHS announced that Walmart had joined the “If you see something, say something” terrorism-awareness campaign. Meanwhile, the Blog reported that some online-fraud schemes had evolved to victimize participants by the tens of thousands — numbers America’s largest sports stadiums could not accommodate.
The PP Blog no longer owns the PonziNews domain. The Blog suspended publication of the site in 2010, after thieves who used international IPs stole the domain’s content verbatim and posted it on other sites they controlled that had a higher Page Rank than Ponzi News.
In short, the net effect of the theft was that the PP Blog was being used to create “free” content for thieves who intercepted the traffic of PonziNews. Such piracy schemes are hurting the publishing industry.
In a separate spam bid on Wednesday, a would-be poster suggesting he represented an HYIP ranking site targeted this PP Blog thread on strange claims associated with “MoneyMakingBrain” in the context of JSS Tripler/JustBeenPaid.
The would-be poster purporting to represent the HYIP ranking site complained that the Blog had used the term “HYIP” in the linked story above “21 times” without explaining the meaning of the term.
“Nice writing job!” the would-be poster jabbed. He provided no comment on the substance of the story.
On RealScam.com yesterday, “MoneyMakingBrain” — who’d emailed threats repeatedly to the PP Blog on Feb. 29 — described the Blog as a “BIG idiot,” a “chicken,” a “deceptive unethical lowlife,” the user of “NONFACTUAL” sources and other names.
Because of the emailed threats and “MoneyMakingBrain’s” subsequent ban from the PP Blog, the Blog will not engage with MoneyMakingBrain on RealScam.com, an antiscam forum that concerns itself with mass-marketing fraud and occasionally has been subjected itself to threats and menacing communications.
“MoneyMakingBrain” has advanced various conspiracy theories about RealScam.com, the PP Blog and and some of their common posters.
What he has not done is explain what his purported “due diligence” into the JSS Tripler/JustBeenPaid “program” entailed or how purported operator Frederick Mann could pay an annualized return between 48 and 73 times higher than the purported “returns” of Bernard Madoff.
Yesterday on RealScam, “MoneyMakingBrain” asserted that he has “recently read [about the PP Blog] on some scams forum, that he is a very deceptive reporter, well, that doesn’t surprise the MMB at all.”
It is possible that “MoneyMakingBrain” is referring to this September 2009 thread on Scam.com. The thread was started by a PP Blog poster known as “little joe” who’d been banned for harassment. The poster, who later was banned from Scam.com, claimed the PP Blog would be “scrambling to put out fires” from multiple IPs.
The threats and intimidation campaign from “little joe” began after the summer 2009 collapses of AdViewGlobal (AVG) and Ad-Ventures4U (ADV4U), both of which claimed an ability to provide preposterous returns in the wake of the government seizure of tens of millions of dollars in the AdSurfDaily Ponzi case.
Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, has described himself as a promoter for both ASD and ADV4U.
On Aug. 18, 2009, antiscam commentators on the PP Blog were called “idiots” and the PP Blog itself was asked by an ADV4U promoter whether the author was a “fag.” After launching his ad hominem attacks against the PP Blog and its posters, the ADv4U pitchman asserted he was a longtime businessman and that criticism about ADV4U on the PP Blog was about “as unprofessional as it gets people.”
“I’m out of here.You bunch of idiots make me sick!!!” the poster railed.
Less than a year later — in May 2010 — Professor James Byrne, an expert hired by the U.S. government to assess the alleged HYIP Ponzi scheme of Nicholas Smirnow of Pathway To Prosperity — observed that HYIPs were not “noted for their internal consistency.”
One of the inconsistencies that became part of the ADV4U story was the assertion by the “defender” that he was a longtime, professional businessman — while the same “defender” asked the PP Blog if he was a “fag” and declared ADV4U critics who questioned a purported payout rate of 1 percent a day “idiots.”
Both assertions occurred a year after the U.S. Secret Service brought Ponzi allegations against ASD, whose payout scheme was similar to ADV4U’s.
“There is a line between First Amendment Rights vs. Libel here. So, when does your right to form an opinion begins (sic) and when does it constitute a defamation of character? The answer is, law enforcement agencies don’t pay attention to what’s being said on forums and blogs, so get your head straight and feet firm on the ground.” — “MoneyMakingBrain,” in March 4, 2012, post on RealScam.com
As previously reported on the PP Blog, a JSS Tripler/JustBeenPaid “defender” known as “MoneyMakingBrain” (MMB) has emailed threats to the PP Blog, hatched bizarre conspiracy theories here and at RealScam.com and planted the seed that he was someone to fear.
The email threats were received after MMB claimed Feb. 18 on RealScam he had performed “due diligence” on JSS Tripler/JustBeenPaid. On a website known as “ReviewOPedia,” a poster with the same handle offered this on Feb. 14, in the context of JSS Tripler/JustBeenPaid:
“They are for real! ”
Within the same Feb. 14 ReviewOPedia post, MoneyMakingBrain ventured this (italics added):
“BTW, everybody should check out the JBP live support chatroom which has over 160 people at any given time and is live 24/7. You can ask all the questions you can come up with and there is always moderator. Who does that? I’m sold already. So, if someone here claims that they ‘didn’t get paid’, either they still don’t understand how the matrix works or they’re just internet trolls.”
Whether the “MoneyMakingBrain” on the PP Blog and the “MoneyMakingBrain” on ReviewOPedia are one and the same is unknown to the PP Blog.
Precisely why the MMB known to the PP Blog and RealScam.com has been trying to chill specific individuals and antiscam forums is unclear. What is known is that what he’s doing is hardly unique.
Lessons Of HYIP History Ignored
While asserting that he knows the PP Blog’s IP address and posting location, MMB now is making a claim on RealScam, a forum that concerns itself with international mass-marketing fraud, that “law enforcement agencies don’t pay attention to what’s being said on forums and blogs.”
That claim is contrary to the public record, which shows that any number of agencies, self-regulatory bodies and private attorneys have been noting for years that HYIP schemes are proliferating on the Internet and being spread by posters on forums and social-networking sites. It also ignores the reality — also a matter of public record — that law-enforcement has a history of filing court documents that reproduce HYIP forum posts and of infiltrating HYIP schemes.
Prominent FINRA Warning On HYIPs
In July 2010, the Financial Industry Regulatory Authority issued this highly public alert. FINRA noted that “HYIPs use an array of websites and social media — including YouTube, Twitter and Facebook — to lure investors.”
HYIPs fabricate a “buzz” and create “the illusion of social consensus,” FINRA said, describing the sinister approach as a “common persuasion tactic fraudsters use to suggest that “everyone is investing in HYIPs, so they must be legitimate.”
Forum Posts Become Evidence In HYIP Cases
In the SEC’s May 2008 prosecution of the Legisi HYIP scheme, the agency included page after page of forum posts as part of a 267-page evidence exhibit in support of an asset freeze. A federal judge approved the freeze. (The screenshot below is from one of the forum pages.)
Legisi operator Gregory McKnight pleaded guilty to criminal charges of wire fraud last month. He also faces millions of dollars in civil judgments. The SEC Legisi filings also include a reference to the MoneyMakerGroup forum, which is listed in other federal court filings as a place from which HYIP Ponzi schemes are promoted.
This section of the Legisi Terms of Service purports that members must avow they are not an "informant, nor associated with any informant" of the IRS, FBI, CIA and the SEC, among others. The others included "Her Majesty's Police," the Intelligence Services of Great Britain, the Serious Fraud Office, Interpol and others.
Included within the SEC filings is a reproduction of Legisi’s bizarre Terms. (See graphic at right. It is taken from court filings.) Among other things, the Terms made members avow they were not an “informant” for various government entities.
JSS Tripler/JustBeenPaid has similar Terms. The Terms read like an invitation to join an international financial conspiracy. (The next two paragraphs are verbatim from the JSS Tripler/Just BeenPaid member agreement. Italics added.)
6. I affirm that I am not an employee or official of any government agency, nor am I acting on behalf of or collecting information for or on behalf of any government agency.
7. I affirm that I am not an employee, by contract or otherwise, of any media or research company, and I am not reading any of the JBP pages in order to collect information for someone else.”
When the U.S. Postal Inspection Service filed criminal charges against Nicholas Smirnow in May 2010 for his alleged operation of the Pathway To Prosperity HYIP Ponzi scheme, MoneyMakerGroup, TalkGold and ASAMonitor were specifically referenced in the service’s case filings. Smirnow now has his face on an INTERPOL “Wanted” poster.
MMB took great exception to the PP Blog’s Smirnow post, apparently believing it had no relevance in the context of JSS Tripler/JustBeenPaid. MMB also apparently believes the PP Blog and RealScam are treating Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, unfairly.
Among other things, MMB asserted on the PP Blog that “no one is invisible to the MoneyMakingBrain and you need to stop doing what you’re doing against this man immediately. Because if you don’t, I am going to make a formal complain (sic) to the very authorities you purport are coming after scam sites and send all the evidence I’ve gathered so far from posting on your site and the realscam site. I don’t like witch hunts and I am sure Fred Mann can whip your ass in court for your highly suggestive, provocative, highly contentious and flat-out defamatory commentaries against his character on your sites.”
MMB further suggested that JSS Tripler/JustBeenPaid critics may be “needing to look for another ISP because you won’t have internet access at home or your office, wherever.”
About three months after the SEC brought the $72 million Legisi/McKnight HYIP Ponzi case, the U.S. Secret Service — in August 2008 — filed evidence exhibits in support of an order to freeze tens of millions of dollars in AdSurfDaily-related bank accounts. The complaint in support of the seizure specifically references an ASD-related “Breaking News” Blog, and an evidence exhibit labeled “Government Exhibit 5” consists entirely of an ASD-related post on a different Blog that took up 15 printed pages.
The 15-page post featured alleged comments from ASD President Andy Bowdoin in which he threatened to sue critics.
“These people that are making these slanderous remarks, they are going to continue these slanderous remarks in a court of law defending about a 30 to 40 million dollar slander lawsuit,” the post quoted Bowdoin as saying. (The screen shot below is from Government Exhibit 5. It has been a matter of public record approaching four years.)
Both the ASD and Legisi investigations used government agents in undercover capacities, according to court filings.
Meanwhile, in June 2009, attorneys suing Bowdoin on behalf of ASD members in a civil RICO (racketeering) case referred to the PP Blog’s reporting on the ASD Ponzi case, specifically its reporting on a spinoff surf known as AdViewGlobal (AVG). (See court document. See June 30, 2009, related story. See PP Blog story the attorneys referenced in their filings.)
During its short run, AVG bizarrely asserted that it operated as a “private association” that enjoyed U.S. Constitutional protections in Uruguay. AVG used U.S.-based Gmail addresses to conduct business, something JSS Tripler/JustBeenPaid is doing. The defunct surf further claimed that it had appointed a person who held the title of “Protector.”
Such claims have been linked to the so-called “sovereign citizen” movement. On Feb. 27, 2012, the PP Blog reported that a site linked to Mann published videos of Francis Schaeffer Cox, a purported “sovereign citizen” indicted in Alaska in an alleged murder plot against public officials. The site features a drop-in ad for JSS Tripler/JustBeenPaid that encourages prospects to register with a Gmail address.
Whether MMB is aware of all of these these historical incidents while issuing threats and planting the seed he has the power to divorce JSS Tripler/JustBeenPaid critics from their Internet connections is not known. MMB’s posting privileges were revoked by the PP Blog last week after he emailed threats and menacing communications. RealScam has continued to permit MMB to post on its forum.
The PP Blog believes it is unwise to click on any link MMB has posted on RealScam. He appears to be attempting to bait members of the antiscam community into clicking on links as part of a bid to gather IP addresses and other data from posters — all while asserting he has the power to use the information to harm individuals and entities such as Eagle Research Associates, a California based nonprofit that seeks to educate the public about scams.
Piling On The HYIP Absurdity
In what would become one of the most visited threads in the history of the PP Blog, a poster known as “CORRECTION” repeatedly demanded that the Blog retract this June 3, 2009, headline about the AdViewGlobal (AVG) autosurf and a strategy advanced by a promoter by which AVG upline sponsors could gather money from individual prospects and funnel it through the sponsors’ local banks before passing it to offshore payment processors — instead of letting AVG gather the money.
“Get it right before you lead with this inaccurate, bias (sic) and unfair reporting!!!!!!!!!!!” CORRECTION demanded.
The PP Blog did not submit to the demand to retract the headline.
It was revealed later in court filings that the grand jury that indicted Bowdoin on charges of wire fraud, securities fraud and selling unregistered securities began to meet in May 2009, about a month prior to ASD- and AVG-related threats and demands made against the PP Blog.
“The focus of this sweep was fraud committed against individual investors, including Ponzi schemes, high-yield investment fraud, and market manipulation cases,” said Shawn Henry, the FBI’s executive assistant director. “Operation Broken Trust highlights the pervasiveness of the threat we face, and its impact on individuals from all walks of life.
“The perpetrators of these crimes are those who YOU might trust . . . friends and colleagues — people from your workplace, your child’s soccer team, even your church,” Henry said.
Read this March 1, 2012, story that reports a top U.S. Justice Department official speaking in Mexico referenced bogus libel lawsuits filed to protect criminal enterprises. Read this Justice Department news release last week on a meeting in Ottawa between top U.S. officials and top Canadian officials to discuss cross-border fraud.
More HYIP Nonsense: No ‘Unfriendly Political Jurisdictions’
JSS Tripler/JustBeenPaid purports to pay a daily return of twice that offered by Bowdoin and ASD — and eight times that of Legisi. The JSS Tripler/JustBeenPaid returns are somewhat on par with the returns offered by Pathway To Prosperity.
At the same time, JSS Tripler/JustBeenPaid says this on its website (italics added):
“Our business operations are geographically decentralized. We don’t have any central office. We’re not located in any ‘unfriendly political jurisdictions.’”
It is difficult to conceive how JSS Tripler/JustBeenPaid could send any brighter signals of a scam in progress, given its absurd advertised rate of return and a public proclamation that it is not located in any “unfriendly political jurisdictions.”
In 2008, Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, identified himself as an ASD pitchman. On Jan. 23, 2012 — six weeks ago today — the Italian securities regulator CONSOB announced it had opened a JSS Tripler-related probe and issued a 90-day suspension order.
During a March 1 conference call for JSS Tripler/JustBeenPaid, a caller informed Mann that a member of his second-level downline had informed him that the member’s bid to advertise the “opportunity” had been blocked in Holland amid concerns of legality.
“Tell him not to advertise in any particular country,” Mann replied.
Redacted screen shot of "regional representatives" claim today on the website of JSS Tripler/JustBeenPaid.
BULLETIN: The PP Blog has learned that JSS Tripler/JustBeenPaid is publishing a page in which it advertises the availability of “regional representatives” in various parts of the world, including Italy.
On Jan. 23, CONSOB, the Italian securities regulator, took action against certain JSS Tripler/JustBeenPaid affiliaties. Despite the CONSOB action, JSS Tripler/JustBeenPaid is openly advertising that it has at least two affiliates who speak Italian and that the affiliates are available to “assist you with ALL aspects of the program IN YOUR LANGUAGE.”
The page also touts the native-language talents of JSS Tripler/JustBeenPaid affiliates to assist members in Hong Hong, Taiwan, Belgium, Canada, Ireland, the United Kingdom, the United States (to assist people who speak English or Japanese), Germany, Lithuania, Indonesia, Malaysia, Mongolia, Poland, Portugal, Latvia, France, Chile, the Dominican Republic, Ecuador and Spain.
JSS Tripler/JustBeenPaid described its outreach via regional reps as “AMAZING!”
“The people on this page have been thoroughly trained in all the workings of JustBeenPaid’s programs, and are happy to assist you TODAY!” the murky entity crowed.
In a Feb. 23 conference call, Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, declined to say precisely where the “opportunity” itself was located.
JSS Tripler/JustBeenPaid, Mann asserted to an audience of Americans and at least one person who claimed to be a resident of Canada, was “not located in any specific part of the world.
“We’re all over the planet,” he said, speaking with an English accent that appeared to be native to South Africa.
The assertion led to questions about whether Mann was running the “program” in a fashion reminiscent of a sort of small-scale Bank of Credit and Commerce International (BCCI). BCCI deliberately structured itself in murky fashion to ward off oversight by regulators. Its collapse created one of the great business scandals of the 1990s, prompting the Wall Street Journal (Europe) to observe that BCCI had been set up to be “offshore everywhere.”
BCCI’s collapse also triggered Congressional probes in the United States, along with both civil and criminal prosecutions.
The CONSOB probe in Italy, which the agency announced nearly six weeks ago, was not referenced on the “representatives” page on the JSS Tripler/JustBeenPaid website.
Incongruously, the “representatives” page included a link to an “agreement” page in which JSS Tripler/JustBeenPaid registrants and/or prospects were informed they must affirm “that I am not an employee or official of any government agency, nor am I acting on behalf of or collecting information for or on behalf of any government agency.”
Moreover, the registrants and/or prospects were informed they must affirm “that I am not an employee, by contract or otherwise, of any media or research company, and I am not reading any of the JBP pages in order to collect information for someone else.”
The collapsed Legis HYIP published similar terms. (More on the Legisi prosecution below.)
How long the JSS Tripler/JustBeenPaid regional reps have been in place was not immediately clear. Also unclear was whether each of the reps had a physical presence in the respective countries or were using the Internet to reach over borders and perform customer service and recruit downlines in the respective nations.
The U.S. government and other governments of the world have become increasingly concerned about cross-border fraud. Yesterday, U.S. Attorney General Eric Holder and Janet Napolitano, the secretary of the U.S. Department of Homeland Security, met with top officials in Canada to discuss the problem.
Perhaps aghast over JSS Tripler/JustBeenPaid developments, a poster on the MoneyMakerGroup Ponzi forum declared today that having regional reps for JSS Tripler/JustBeenPaid is an “insane idea.”
“Forget about the matrix spots and payouts,” the MoneyMakerGroup poster wrote today. “[W]hy is 200,000 + members not enough and why arent (sic) we off the radar and private and not opening ourselves up to potential problems ? Regional reps is an insane idea, Im (sic) sorry but the admin needs to protect us and wakeup (sic) to the reality that you cant (sic) get this huge and expect nothing bad to happen.”
The poster did not explain his apparent belief that JSS Tripler/JustBeenPaid had a duty to go “private” and to get “off the radar” of regulators. Nor did he say precisely what constituted something “bad.”
HYIPs have been the subject of both civil and criminal litigation in various jurisdictions.
It is common for HYIP purveyors to tout purported “offshore” operating venues and to claim such venues insulate an “opportunity” from prosecution. It also is common for HYIPs to announce they are “private” programs and therefore not subject to government oversight. At the same time, it is common for HYIPs to try to structure a Terms of Service or Member Agreement that purports either that the “opportunity” is not selling securities or is not subject to regulatory oversight.
Some HYIPs, including JSS Tripler/JustBeenPaid, have preemptively denied they are Ponzi schemes.
The purported returns of JSS Tripler/JustBeenPaid are somewhat on par with the returns of Nicholas Smirnow of the alleged Pathway To Prosperity HYIP Ponzi scheme. Smirnow is listed as “Wanted” by INTERPOL.
On Feb. 27, the PP Blog reported that a website linked to Mann displayed videos of Francis Schaeffer Cox, an American and purported “sovereign citizen” under indictment in Alaska in an alleged murder plot against public officials.
Separately, a YouTube promo for JSS Tripler/JustBeenPaid dated yesterday asserted that “[a]ll you have to do is wait for your money to increase!!!”
A Blog post dated today, meanwhile, makes this assertion (italics added):
“The JSS Tripler new site is one month old. It has been a month of phenomenal growth, but it’s nothing compared to what’s in the future. Some ‘Big Things’ are on the horizon that will enable many of the members to become millionaires, some could even become billionaires.”
Neither the March 3 Blog post nor the March 2 YouTube video referenced the CONSOB probe.
In 2008, AdSurfDaily President Andy Bowdoin asserted that ASD had a plan to create 100,000 millionaires in three years. On Dec. 1, 2010, the U.S. government announced that Bowdoin had been indicted on Ponzi-related charges of wire fraud, securities fraud and selling unregistered securities.
Seabaugh also was an affiliate of an enterprise known as Ad-Ventures4U (ADV4u), which crashed in 2009 amid allegations that its operator had been threatened by members.
In web promos, Mann has described himself as a promoter for both ASD and ADV4U. Some affiliates have described him as a “genius,” the same description accorded Bowdoin before the August 2008 raid on ASD headquarters by the U.S. Secret Service.
After the event — and facing both civil prosecution and a criminal investigation — Bowdoin told ASD members that the raid was the work of “Satan.”
It is a descriptor completely contrary to the typical view Americans have of the Secret Service, which has the twin duties of protecting the nation’s financial infrastructure and the life of the President of the United States.
Most Americans believe the Secret Service consists of heroes who place themselves in harm’s way every day to keep the United States safe, doing everything from making sure U.S. grandparents have safe places to deposit their Social Security checks to making sure that the President is well-protected and accessible to the American people.
Kenneth Wayne Leaming, an ASD member and purported “sovereign citizen,” allegedly filed a bogus lien against the Secret Service agent who led the ASD investigation in 2008, the FBI said in November 2011 court filings.
Leaming also allegedly filed bogus liens against a federal judge and three federal prosecutors involved in the ASD case, according to court filings by the FBI. He is jailed near Seattle awaiting trial on those charges, along with charges of filing false liens against other public officials, concealing two federal fugitives wanted in a home-business caper in Arkansas, being a felon in possession of firearms and uttering a bogus “Bonded Primissory Note” for $1 million.
Court filings suggest Leaming was conducting financial research on John Roberts, the chief justice of the United States and the head judge of the U.S. Supreme Court, while hatching a scheme to serve papers on Roberts through a school attended by the distinguished jurist’s children.
