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Tag: Pay It Forward Program

  • ‘Pay It Forward’ Gifting Scheme Leads To Felony Racketeering Charge, Sparks Child-Porn Probe In Michigan

    payitforwardAs the PP Blog reported more than six years ago, Pay It Forward (PIF) “programs” have a noxious history in HYIP and cash-gifting Scamland.

    A new case in Michigan, however, may be off-the-charts in terms of noxiousness. That’s because investigators looking into a PIF scheme there found child pornography on the alleged PIF operator’s computer, the office of Michigan Attorney General Bill Schuette said in February.

    Michael Skupin, 54, of Oakland County, was charged with six counts of possession of child sexually abusive materials five counts of larceny by conversion,and one count of Racketeering- Conducting a Criminal Enterprise.

    The PIF “program” was a Ponzi scheme that gobbled up $10,000 at a time from participants, Schuette’s office said.

    Records show that it’s not unusual for Ponzi schemers in Michigan to be charged with racketeering, a 20-year felony.

    “Victims allegedly made $10,000 cash investments in the [Skupin] scheme,” Schuette’s office said. “Their money would then cycle through a chart in which participants were eventually paid out of other new investors’ money.  The scheme was discovered when eventually there were no new investors signing and most people in the scheme lost all of their money.”

    The Oakland Press reported yesterday that Skupin was a former contestant on the “Survivor” television show.

    And, the publication reported, Skupin was accused of violating his release conditions while waiting trial on the charges against him.

    From the Oakland Press (italics added):

    Following his arraignment, the former reality TV contestant posted bond and was under house arrest with conditions that barred him from using the Internet except for work.

    But during a probable cause hearing Friday, April 8, in Clarkston’s 52-2 District Court, Judge Kelley Kostin ordered Skupin jailed because he violated the Internet bond conditions by posting on Facebook.

    Skupin now has made bail for a second time.

    PIF schemes have many price points — from low-dollar sums to high. In some PIF schemes, a recruiter may offer you the money to join a “program” — with the understanding you’ll do the same for your recruits. Some participants will purchase multiple “positions” for friends and family members, only to lose it all.

    Other such schemes may encourage you to purchase second and subsequent “positions” if you get paid — in effect, paying it forward to yourself, so you can get paid again.

    The money-cycling schemes ultimately collapse.




  • DEVELOPING STORY: Message Board For Members Of ‘OneX’ Scheme Pushed By Accused Ponzi Schemer Andy Bowdoin Claims ‘Transfer Funds’ Option Disabled Because Members Are Using ‘Stolen Credit Cards,’ Source Says

    Andy Bowdoin

    A bulletin board accessible only through the back offices of members of the purported  “OneX” program includes a message that the program has disabled a “Transfer Funds” option because a “recent investigation” has determined that members “have been depositing funds from stolen credit cards and transferring this tainted money to hundreds of other members of the organization,” a source tells the PP Blog.

    The bulletin-board announcement was dated yesterday and attributed to “the administration.” No OneX owner or operator was identified in the announcement, but members of OneX were told there was no choice left “but to disable the ‘Transfer Funds’ option indefinitely,” according to information provided by the source.

    AdSurfDaily President and accused Ponzi schemer Andy Bowdoin emerged Monday as a OneX pitchman.

    There was no corresponding announcement on the site that OneX or its staff had alerted authorities that members were joining with stolen credit cards, the source said.

    Who conducted the “investigation” — the company or some other entity — was not made clear in the announcement.

    “The Company must take a hard stance against this type of financial fraud in the interest of those hardworking, honest members who are legitimately building their businesses and depend on the survival of this Company for all the great financial opportunities that it represents,” the post on the bulletin board claimed, according to the source.

    OneX is a purported 4×4 matrix linked to a purported 3×9 matrix known as QLxchange that purportedly operates from Panama through a server purportedly located on Isle of Man in the Irish Sea.

    In a webinar Monday, Bowdoin told ASD members that they could earn $99,000 “very quickly” through OneX, a program he intended to use to pay for his criminal defense.

    Bowdoin, who has participated in at least three webinars this week in which he sang the praises of the purported opportunity, was charged with wire fraud, securities fraud and selling unregistered securities last year.

    In 2009, an autosurf known as AdViewGlobal (AVG) reportedly disabled a button that permitted members to transfer money to other members. AVG, which had close ASD ties, purportedly was based in Uruguay.

    OneX purportedly has 750,000 members.

    On Monday, Bowdoin claimed God had led him to his strategy of using OneX to raise defense funds for his Ponzi battle against the government.

    “I believe that God has brought us OneX to provide the necessary funds to win this case,” Bowdoin said.

    A PP Blog reader (“Tony”) reported at 6:45 p.m. EDT today that a OneX/QLxchange-related “press release” dated Oct. 11 had appeared on PRLog, a news-release distribution site. The release, which also referenced cash-gifting and a “pay it forward” strategy, was attributed Bryce Jackson, a purported “Business Mentor” and “Success Coach.”

    “God truly wants you to be a blessing to other people during these bad economic times,” the release read in part.

    Links in the press release lead to sites where people who register reportedly are given information about OneX/XLxchange. One of the sites is called “godsmoneyfeeder”; another is called “whatablessing.”

    Bowdoin also is promoting a “pay it forward” theme for OneX, according to his webinar remarks.

    In essence, “pay it forward” — also known as PIF or “benefactoring” — is a practice by which money theoretically stays in constant motion and flows to schemes because sponsors pay fees for recruits and encourage recruits to to the same for their recruits.

  • Canadian Regulators Attack ‘Pay It Forward’ Scheme; Many Autosurfs, Cash-Gifting And MLM Schemes Use Similar Marketing Approach

    Trading off a popular phrase, Kerry John O’Neill’s “pay-it-forward” scheme has landed him in trouble with Canadian securities regulators, wiped him out financially and implicated an associate who helped him sell the scheme.

    O’Neill even named his scheme the “Pay It Forward Program” (PIF), according to the British Columbia Securities Commission (BCSC), which accused him of collecting $9.6 million from 943 investors by telling them they could expect returns ranging from 100 percent to 300 percent in 90 days.

    “Pay it forward” is a marketing buzzword phrase. The phrase often is associated with autosurf, cash-gifting and MLM schemes that recruit affiliates. The “pay-it-forward” sales approach has emerged as a potential marker of a financial fraud.

    Broke and living in public housing, O’Neill now has become the subject of an investigation by the Alberta Securities Commission (ASC). Like BCSC, ASC is seeking sanctions against O’Neill, who was banned in September 2009 from the securities business in British Columbia.

    BCSC accused O’Neill of selling unregistered securities as investment contracts. Although Pay It Forward was not an autosurf, similar prosecutions have been brought against autosurf operators in the United States.

    “Between November 2005 and December 2006, O’Neill solicited investors to join the PIF Program and enter into investment contracts (the PIF Securities) with him,” BCSC said. “No prospectus was ever filed for the PIF Securities and none of the exemptions under the Securities Act . . . applied to their distribution. O’Neill was not registered under the Act when he distributed the PIF Securities.”

    Banned along with O’Neill by BCSC was Renee Marie Helmig, also known as Nisha Helmig.

    Helmig, of North Vancouver, admitted she “used false information provided by O’Neill to make misrepresentations to investors and potential investors to convince them to invest in Pay it Forward,” according to BCSC.

    O’Neill’s particular brand of “pay-it-forward” involved a scheme by which investors were told that “their funds would be used to buy and sell distressed merchandise,” BCSC said.

    Here is how money invested in the scheme was distributed, according to BCSC:

    • $6.4 million to pay amounts owed to other investors.
    • $1.1 million to purchase merchandise.
    • $213,000 for “other investment opportunities.”
    • $56,000 for O’Neill’s personal expenses.

    The remainder was used for “expenses related to the distressed merchandise business,” BCSC said.

    “[M]ost investors did not earn any return on their investments, but rather lost some or all of their investment capital,” BCSC said. “[T]he payments O’Neill made to investors did not come from profits he made from buying and selling distressed merchandise. Instead, O’Neill paid investors with other investors’ funds.”

    “O’Neill has been unemployed since the PIF Program ended” in April 2007, BCSC said. “He lives in subsidized housing and his only income is a monthly disability benefit.”