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Tag: OSC

  • UPDATE: Canada’s Ontario And Quebec Join Alberta In Issuing Warning On ‘ProfitableSunrise’; [UPDATE: British Columbia, Too]

    breakingnews72UPDATED 4:48 PM EDT (U.S.A.) British Columbia now also has issued a warning against Profitable Sunrise. See Comments thread below . . .

    First it was North Carolina in the United States. Alabama quickly followed.

    And the United Kingdom’s Financial Services Authority also issued a warning about the Profitable Sunrise “program.”

    Canada’s province of Alberta published a Profitable Sunrise warning yesterday. Ontario and Quebec followed today.

    Here is Ontario’s warning in its entirety (italics added):

    ___________________________________________________________

    OSC INVESTOR ALERT: Inter Reef Ltd., Roman Novak and Radoslav Novak (doing business as Profitable Sunrise)

    TORONTO – The Ontario Securities Commission (OSC) is warning Ontario investors not to invest with Profitable Sunrise, which claims to be located in the United Kingdom while representing that its banking facilities are in the Czech Republic. Profitable Sunrise is offering investors “investment plans”, but Profitable Sunrise is not registered in Ontario to engage in the business of trading in securities or advising anyone with respect to investing in, buying or selling securities.

    Profitable Sunrise is representing that its “investment plans” earn abnormal returns, “risk-free”, of 1.5 per cent – 2.7 per cent per business day, which translates into an annual return of over 300 per cent. On January 11, 2013, the OSC issued a warning to investors entitled “Beware: High-yield Investment Programs are Ponzi Schemes” that explains the risks of investing with companies like Profitable Sunrise. You can find the warning on the “OSC Investor News” section of the OSC’s website at www.osc.gov.on.ca.

    The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in capital markets. Investors are urged to check the registration of any person or company offering an investment opportunity and to review the OSC’s investor materials available at www.osc.gov.on.ca.

    If you have any questions or information relating to this matter, please contact the OSC Contact Centre at 1-877-785-1555.

    ___________________________________________________________

    And here, through the Autorité des marchés financiers, is Quebec’s warning (italics added):

    March is Fraud Prevention Month – Caution to be used when solicited by Profitable Sunrise

    Tuesday, March 12, 2013

    Montréal – The Autorité des marchés financiers (the “AMF”) is warning Quebeckers about investment contracts offered by Inter Reef LTD, also known as Profitable Sunrise on the Internet, which purports to be a British company and is not authorized to carry on business in Québec.

    The North Carolina Department of the Secretary of State recently issued an order warning investors about offers published by Profitable Sunrise and its officer, Roman Novak, on the Internet. Investigators with the North Carolina Department of the Secretary of State say that Profitable Sunrise and its officer promoted five different investment plans through a website that offered rates of return ranging from 1.6% to 2.7% per business day. Investors were told their money would be used to fund short-term loans to businesses, “risk-free”.  Secretary of State investigators have also discovered that victims were asked to make wire transfers of money to financial institutions in Eastern European countries, including the Czech Republic.

    This week, the Alberta Securities Commission warned investors after it received reports from a Calgary-based banking institution that several of its customers have attempted to withdraw significant amounts of funds from their accounts for wire transfers to the Czech Republic.

    Although there is no proof that Quebeckers invested in the scheme, the AMF urges great caution in dealing with offers by Profitable Sunrise. No person or company named Roman Novak, Inter Reef LTD or Profitable Sunrise is registered with the AMF. Since they are not registered with the AMF, solicitations by Roman Novak, Inter Reef LTD and Profitable Sunrise of Québec investors could contravene the laws administered by the AMF.

    If you have responded to solicitations from Profitable Sunrise or any similar type of solicitation, please contact an officer at our Information Centre.

    Reminder to investors
    As part of Fraud Prevention Month, the AMF reminds consumers that it is important to ask questions (5 bonnes questions — in French only) before entrusting their savings to a person who solicits them, especially when promised a return that is too good to be true such as in this case.

    The Autorité des marchés financiers (the “AMF”) is the regulatory and oversight body for Québec’s financial sector.

     

  • BULLETIN: Gold Quest International (GQI) UPLINE/DOWNLINE Groups Will Be Subject Of Hearing By Ontario Securities Commission; Case Alleges Respondents Were Both Investors And Promoters Who Pushed Unregistered Securities Of Bizarre Firm

    EDITOR’S NOTE: If you’re pushing Ponzi schemes on MoneyMakerGroup, TalkGold and other criminal forums, allegations brought by the Ontario Securities Commission (OSC) against geographically localized promoters of Gold Quest International (GQI) may interrupt your delusions of invincibility over the next several weeks.

    Upline and downline networks within Gold Quest International (GQI), a bizarre company taken down by the SEC just three months before the U.S. Secret Service raid on AdSurfDaily in 2008, are in the news in the Canadian province of Ontario.

    The Ontario Securities Commission (OSC) will conduct a hearing March 24 to consider taking provincial action against local promoters of GQI, which already has been ruled a Ponzi scheme, pyramid scheme and “sham” investment by the Alberta Securities Commission.

    OSC pointed out that GQI “has never been registered in any capacity with the Commission” and alleged that its promoters within the province also were not registered.

    The case is important because it signals that Ontario regulators have backtracked millions of dollars of GQI transactions that originated in the province, segregated the source of the money to specific groups of promoters within the province and now intend to hold them accountable for spreading financial misery to their fellow citizens.

    The odds of the respondents avoiding sanctions after the hearing may be low. One Ontario man implicated in the GQI scheme already has filed bankruptcy and has been ordered to pay $652,000 in disgorgement and penalties for his role in GQI.  The man, Donald Iain Buchanan, allegedly was introduced to GQI by some of the promoters who are the subject of the hearing next month.

    And the odds may be weighted even more heavily against the promoters prevailing at the hearing because of the bizarre claims of GQI itself, which purported to have a “Lord” among its key managers and said it was immune to regulatory oversight because it was an extension of a North Dakota sovereign “Indian” tribe and was permitted to operate untouched from Las Vegas.

    GQI, which gathered about $29 million in a long-running scheme by promising returns of 87.5 percent a year and huge commissions, sought unsuccessfully to sue the SEC for the astronomical sum of $1.7 trillion. A U.S. federal judge dispatched U.S. marshals to haul key players into court for ignoring court orders, and vast sums of money appear to have gone missing down ratholes in Europe and New Zealand.

    Some of the money also is tied up as a result of criminal allegations — including murder — against James Fayed, the operator of the now-shuttered E-bullion payment processor.

    In its statement of allegations, OSC accused Simply Wealth Financial Group Inc., Naida Allarde, Bernardo Giangrosso, K&S Global Wealth Creative Strategies Inc., Kevin Persaud, Maxine Lobban and Wayne Lobban of promoting unregistered securities. All of the accused companies and individuals have Ontario addresses, according to OSC.

    “During the Material Time, Simply Wealth, Allarde, Giangrosso, K&S, Persaud, Maxine Lobban and Wayne Lobban . . . promoted securities in Gold-Quest to Ontario residents,” OSC charged.

    About 94 Ontario residents plowed $1.6 million into GQI “as a result of promotional activities conducted by Allarde, Giangrosso and Simply Wealth,” OSC charged. “These activities included recommending investment in Gold-Quest, providing information regarding the nature of the investment in Gold-Quest, facilitating the process of investing in Gold-Quest, and, in certain cases, facilitating the transfer of funds to Gold-Quest on behalf of investors.”

    K&S and Persaud, meanwhile, caused about nine Ontario investors to plow about $69,000 into the GQI scheme. Among their alleged customers was Buchanan, who also became a promoter and caused his customers to bring $1.8 million more into the scheme, according to OSC.

    Maxine Lobban and Wayne Lobban also became promoters and caused investors to bring “at least $675,000” into the GQI scheme, the OSC alleged.

    The math of the scheme was doomed to fail, but purveyors were lured by titles and promised both spectacular investment earnings and commissions. Promoters were categorized in upline/downline tiers, the OSC alleged.

    “Individuals who introduced an investor to Gold-Quest would receive the title ‘Administrative Manager’ for the new investor,” OSC alleged. “Administrative Managers would receive an up-front commission of ten percent of that investor’s original investment and then a further four percent per month for a year (for a total commission of 58 percent of the principal invested).

    “The individual who had introduced the Administrative Manager to Gold-Quest would receive the title ‘Managing Director’ for the new investor and would receive a commission of 1.5 percent per month for a year (for a total of 18 percent of the principal invested),” the OSC continued.

    “Lastly, the individual who introduced the Managing Director to Gold-Quest would receive the title ‘Supervisory Managing Director’ for the new investor and would receive a commission of one percent per month for a year (for a total of 12 percent of the principal invested).

    “In sum, when a new investor sent funds to Gold-Quest, 88 percent of the investor’s funds were earmarked for commissions to be paid to the investor’s Administrative Manager, Managing Director and Supervisory Managing Director over the course of a year,” OSC alleged.

    In November 2010, OSC ordered penalties and disgorgement of $652,000 against Buchanan for his role in the GQI scheme.

    “Buchanan’s conduct warrants a substantial administrative penalty,” OSC said. “He was involved in two investment schemes in which Ontario investors invested approximately US $4.3 million.”

    Although commission staff had recommended an administrative penalty of $150,000 against Buchanan, who is bankrupt, OSC doubled the amount to $300,000, saying Buchanan had shown no remorse and that the smaller penalty would not serve as a deterrent.

  • CHILLING: Terrorism Link, A Ponzi, An HYIP, Gold, Mysterious ‘Offshore’ Businesses, ‘Rebates’ — And A Brutal Murder In California

    EDITOR’S NOTE: HYIP or autosurf promoter? Can’t say no to the commissions from recruiting people into scheme after scheme? Position yourself as an “expert” on Internet forums — even though you don’t have a clue about the motivations of the program owners and may not even know their names? Find yourself promoting programs that reference “gold” and “funds” and relying on marketing assertions that cannot be verified? Tell your recruits that the programs are money “games” or nontraditional investments? Been involved in one program after another that has failed in this seedy and dangerous world? Think that you’ll have a lifetime of plausible deniability and that professional investigators will believe you when you explain you didn’t really know what was going on — despite the fact you’ve been involved in one failed “program” after another, perhaps for months and even years?

    Here’s a story about what can happen in the sea of HYIP, “Gold,” Ponzi and autosurf corruption . . .

    UPDATED 12:42 P.M. ET (U.S.A.) Yesterday a reader provided us a document that can only be described as chilling. The document, from the Ontario Securities Commission (OSC), includes exhibits from a 2003 Canadian civil-securities case against convicted Ponzi swindler Brian David Anderson, a former Christian clergyman from Vancouver, British Columbia.

    Last week, Anderson was sentenced to 90 months in federal prison in the United States for operating a $4 million Ponzi scheme known as Frontier Assets. Anderson also was linked to a mysterious scheme known as the “Alpha Project.”

    U.S. and Canadian investigators, meanwhile, also identified Anderson as a pitchman for an international HYIP known as Flat Electronic Data Interchange (FEDI). FEDI’s operator, Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon,” was convicted in September 2009 of financing terror and fleecing investors in the FEDI scheme.

    Why is the document chilling? For starters, its references a bank account held by Goldfinger Coin & Bullion Inc. in Camarillo, Calif. If that name does not ring a bell, think “E-bullion,” the now-shuttered money-exchange business purportedly backed by gold.

    James Fayed, the operator of Goldfinger and E-Bullion, was charged in 2008 with operating an unlicensed money-transmitting business. Investigators said E-Bullion had been used to transact at least $20 million in Ponzi scheme payments.

    During the same general time period in 2008, the SEC was conducting a Ponzi scheme investigation into a separate company known as Gold Quest International (GQI), which used E-Bullion and claimed to be registered in Panama.

    GQI operated from Las Vegas. It initially tried to claim that it was immune to U.S. law because of links to a “sovereign” Indian tribe. GQI was charged in May 2008 by the SEC with operating a Ponzi scheme. The purported “attorney general” of the purported “sovereign” tribe reacted by trying to file a lawsuit against the SEC for the preposterous sum of $1.7 trillion. A federal judge was not amused, and struck the bizarre filings.

    Woman Stabbed To Death

    On July 28, 2008, Pamela Fayed — James Fayed’s estranged wife — was brutally murdered in a parking garage in California. She was stabbed in the chest, neck and face — and left to die, according to court filings. Prosecutors said there was no evidence of robbery or carjacking. The murder, according to court filings, occurred just minutes after a meeting Pamela attended with her criminal attorney and her husband’s criminal attorney.

    James Fayed was present at the meeting, according to court filings. A meeting with separate attorneys — this one involving a divorce hearing — had been scheduled for the next day, July 29, 2008. Prosecutors said that James Fayed was at risk of being ordered to turn over nearly $1 million to Pamela at the divorce proceeding.

    Pamela had advised the government in June 2008 that she wished to cooperate in its criminal investigation of E-Bullion, according to prosecutors.

    “Pamela’s murderer left the crime scene in a red SUV that was captured on surveillance video, along with its license,” prosecutors said. “The license was traced to Avis car rentals in Camarillo, not far from [the] defendant’s business. The vehicle had been rented from Avis on July 3, 2008 using an American Express card issued to defendant and GCB.

    “An American Express credit card with the same account number was found in defendant’s wallet during a search of his residence in the days following Pamela’s murder. During the search of defendant’s residence, officers also found approximately $60,000 in cash wrapped in plastic material; approximately $3,000,000 in gold; and approximately 31 firearms, including one with a long-range night vision scope, along with thousands of rounds of matching ammunition,” prosecutors alleged.

    Prosecutors also alleged James Fayed arranged for the July 28 meeting to create an alibi.

    Read a court filing in the federal case against James Fayed in which prosecutors alleged he operated an unlicensed money-transmitting business. The filing references the alleged murder plot.

    Murder Charges Filed

    James Fayed and an employee — Jose Luis Moya — were charged by the Los Angeles District Attorney’s office with murder and a conspiracy plot in September 2008. Fayed paid Moya “approximately $25,000 to arrange the murder of Pamela Fayed,” investigators said.

    On July 3, 2008, investigators said, “Fayed and his company — Goldfinger, Inc. — rented a Suzuki sport utility vehicle that was used by the killers at the Watt Tower parking garage where Pamela Fayed was killed.

    “The Suzuki SUV was driven to Fayed’s Ventura County ranch on Happy Camp Road after the killing,” according to investigators. Moya returned the vehicle to Avis the next day.

    OSC Document Outlined Purported Anderson/E-Bullion Meeting In 2003

    The OSC document filed in Canada is important — and we suggest you read every word of it from the link below — because exhibits in the document show the murkiness and just plain creepiness of the HYIP and Ponzi worlds. One exhibit suggests Anderson planned to meet with Fayed and his wife in 2003 to discuss business.

    The document also references Alishtari and FEDI, claiming an investment program was backed by $125 billion in gold. Among other things, the document lists the name of Goldfinger Coin & Bullion and an account number, along with directions on how to open an E-Bullion account.

    Screen shot: From exhibit in 2003 OSC filing.

    Also included in the document is a purported joint-venture agreement marked “STRICTLY CONFIDENTIAL” that purportedly was used by Anderson to recruit investors into an international fraud scheme.

    Parallels To AdSurfDaily Case

    Parts of the document include claims very similar to claims made by promoters of the alleged AdSurfDaily (ASD) Ponzi scheme in the United States. Anderson, for example, was positioned as a “very successful business executive” who attended a function to observe Alishtari receive an award “for Republican Business Man of the Year for the State of New York.” Similar claims were made about ASD President Andy Bowdoin.

    Investor payouts, according to an exhibit in the OSC document, were called “rebates.” ASD, whose assets were seized by the U.S. Secret Service in August 2008 amid Ponzi allegations, also called its payouts “rebates.” Exhibits in the OSC document were thick with references to God and family — another similarity to the ASD case.  Anderson’s efforts to promote the program were deemed “heroic,” and business was conducted in part from Boca Raton, Fla. ASD was thick with Florida members.

    In a purported email from Anderson dated April 17, 2003, according to an exhibit within the OSC document, Anderson laid out the case for the new venture.

    “Dear Family,” the email began. Chillingly, the email appears to reference Pamela Fayed, allegedly murdered by her husband and conspirators five years later. The email suggests there once were happy days between the Fayeds.

    “I am very pleased that my recommendations and leg work have paid off and the Alpha Project will be merging its gold value/currency transfer through E-Bullion,” the email purportedly sent by Anderson claimed.

    “E-Bullion is owned by a wonderful couple who have their roots in Egypt and, therefore, are Arab in descent. I will be spending personal time with them on Monday in California.”

    Screen shot: Exhibit of purported Anderson email in 2003 OSC filing.

    The email, which discusses a trip to Panama, promised investors an “offshore” company and outlined a plan to sell “debit cards” through vending machines that would be positioned in posts offices, hotels and college buildings.

    Put “$20 into a vending machine and the machine spits out a loaded Debit card for you,” the email said. “Now you can begin to see why the Alpha Project in will in time be another Microsoft in size.”

    Claims in HYIP and Ponzi schemes that a company is destined to become the “next” Microsoft or Google are common. Beyond that, the use of debit cards in the murky HYIP and autosurf words is becoming increasingly popular — as are appeals for investors to entrust funds to “offshore” businesses, amid claims that such businesses are outside the reach of U.S. law enforcement.

    Read the OSC document from 2003.