ABAJournal.com, the website of the prestigious flagship magazine of the American Bar Association, has named PonziTracker.com to the “Blawg 100” for a second time.
PonziTracker.com is published by attorney Jordan Maglich.
“Ponzitracker is honored to be included in the Blawg 100,” Maglich says on the Blog.
The Top 100 selection was made from a list of more than 4,000 eligible publications.
Maglich, who also writes for Forbes, is an attorney at Wiand Guerra King PL in Tampa, Fla. His practice includes complex commercial litigation, receiverships, Foreign Corrupt Practices Act litigation, and regulatory matters, with a focus on securities and financial services litigation.
If you’re a student or educator or employee or boss with a traditional M-F schedule, chances are you’ll be hearing about a new Ponzi scheme before the final bell rings or the final whistle blows on Friday.
During the first six months of 2014, a Ponzi scheme was discovered every 4.9 days (or every 118 hours), according to an eye-popping report today by Jordan Maglich at PonziTracker.com.
From PonziTracker (italics added):
. . . Ponzi schemes remain rampant in the United States and worldwide despite mounting government and regulatory efforts. Indeed, the 37 schemes discovered during the first half of 2014 suggest that at least 74 schemes will be discovered in 2014 — approximately 10% more than the 67 schemes unearthed in 2013.
The largest alleged scheme discovered in 2014 so far is TelexFree, PonziTracker reports.
Read the report on PonziTracker, which also notes Ponzi prison sentences handed down this year are on pace to top last year’s cumulative sentencing total.
The PP Blog’s research shows that MLM HYIP Ponzi schemes that spread through commission-based salespeople are the most insidious because they create victims in numbers America’s largest sports stadiums cannot accommodate.
Both Zeek Rewards (2012) and TelexFree (2014) may have created hundreds of thousands of victims each. The combined schemes could fill the Rose Bowl to capacity with victims 15+ times over and have led to requests by prosecutors or receivers to ask courts to approve special victim-notification procedures because of the overwhelming numbers.
BULLETIN: (4th Update 3:28 p.m. EDT U.S.A.) U.S. Bankruptcy Judge August B. Landis of Nevada has transferred the TelexFree Chapter 11 case to Massachusetts, PonziTracker.com reported at 2:27 p.m.
At 2:34 p.m., PonziTracker reported that Landis has suspended all proceedings in the case until the transfer to Massachusetts can be completed.
The SEC sought the transfer to Massachusetts last month, arguing that the state was TelexFree’s “nerve center” and that the bankruptcy filing in Nevada on Oct. 13 was a “transparent attempt to avoid Massachusetts, where their ‘business’ and numerous witnesses are located and where various government agencies have been investigating their fraudulent conduct.”
TelexFree, an alleged $1.2 billion Ponzi- and pyramid scheme targeted at immigrants, is an exceptionally dangerous MLM malignancy and criminal enterprise. The SEC, the Massachusetts Securities Division and the U.S. Department of Justice have an obligation to society at large to treat TelexFree with maximum legal prejudice and to annihilate it.
This, we believe, is happening.
MSD has filed an action. The SEC has filed an action. The office of the U.S. Trustee, the Justice Department’s watchdog arm in bankruptcy petitions, is seeking to intervene in TelexFree’s Chapter 11 case in Nevada. On Friday, Jordan Maglich of PonziTracker.com reported that the SEC asserted at a key bankruptcy hearing that federal prosecutors also have entered the TelexFree fray through the filing of forfeiture actions.
TelexFree, it seems, finds itself the target of a richly deserved paper-nuking by a government righteously angered by the preposterous “opportunity” and its gaggle of reliably felonious pitchmen.
Regardless, the process of killing TelexFree dead and delivering it to the judiciary for final pronouncement inevitably will create an opportunity for MLM’s criminal wing and robotic Stepfordians to serve up a vomitous spectacle. Members of the public at large should pay close attention to this spectacle and use it to inform their thinking.
EXTREME CAUTION WARRANTED: Watch the rancid TelexFree spectacle from a distance: If you get too close to the ever-hurling Stepfordians and their upstream programmers who load the vomit-inducing talking points, you might find yourself suddenly wondering why your fellow man ever questioned the beauty of Soviet propaganda night at Jonestown. You even could find yourself waxing nostalgically for the Peoples Temple itself.
Like Zeek Rewards and AdSurfDaily before it, TelexFree was a vessel created to divert the wages of the MLM proletariat to the MLM Politburo, known in HYIP scam circles as the “leaders.” Some of those “leaders” have Ferraris and Hummers and BMWs and blue-chip investment accounts that reportedly contained millions and millions of dollars.
Little wonder some angry affiliates showed up at TelexFree’s broom closet office in Massachusetts to voice their displeasure a mere 12 days before TelexFree filed for bankruptcy protection in Nevada, a state from which TelexFree operated a billion-dollar business through a mailbox.
Merriam-Webster.com defines “rabbit hole” as a “bizarre or difficult state or situation — usually used in the phrase down the rabbit hole.”
In the hours leading up to last week’s key hearing for TelexFree in bankruptcy court, the U.S. Department of Justice saw fit to recommend looking down the TelexFree “rabbit hole.” Based on the Merriam-Webster definition, our take is that the take of the Justice Department — through U.S. Trustee Tracy Hope Davis — was practically perfect.
We believe the Justice Department, the SEC and MSD will find Chernobyl, Bhopal and Love Canal down that hole. There’s also a fair chance they’ll find Al Capone wearing an Easter Bunny suit.
TelexFree provided the financial world with a glimpse into what an Extinction Level Event driven by hapless MLM buffoons and their Stepfordian followers might look like. TelexFree was an attack on free enterprise, not an innocent expression of the same.
1:07 p.m. PPBlog note: Based on Jordan’s reporting, it looks as though the U.S. Attorney’s office has filed civil and criminal forfeiture actions. This is similar to what happened in the AdSurfDaily MLM HYIP case in 2008.
1:18 p.m. PPBlog note: One way to view the forfeiture actions is that the United States perceives an attack on the country’s banking infrastructure, opening the door for banks and payment processors effectively to become warehouses and distribution centers for fraud proceeds. For the sake of discussion, let’s say TelexFree has 700,000 members. This could mean there are 700,000 conduits to offload proceeds accumulated during a Ponzi scheme. The FBI has been warning about this type of thing for YEARS.
4:30 p.m. PPBlog note: Testimony resumes after break for lunch. Visit PonziTracker.
From PonziTracker’s April 18 story (italics added):
. . . a casual read of the Motion makes clear that the company accused by regulators of being an “egregious” pyramid scheme seeks now to use the Bankruptcy Court’s power to eliminate the obligation to pay accrued compensation likely totaling hundreds of millions of dollars to “promoters” – under the theory that elimination of these obligations will allow the company to “ultimately prove successful and profitable.” Ironically, one of the chief concerns cited by TelexFree related to questions “raised as to whether the Original Comp Plan is compliant with law, which jeopardized the Debtors’ business.
On the same day, the PP Blog reported that TelexFree was the top story in Thursday’s infrastructure report by the Department of Homeland Security. Meanwhile, the Blog reported that TelexFree is calling the actions by Massachusetts and the SEC “precipitous and unnecessary.”
The Blog noted that some TelexFree members appear errantly to believe that the company already has been cleared of the Ponzi and pyramid charges. Uplines could be feeding them misinformation. Separately, BehindMLM.com reported that the federal judge in the SEC action has granted a Temporary Restraining Order against TelexFree.
As BehindMLM noted in its coverage, quoting the judge (italics added):
the Commission has shown that
1. It is reasonably likely to establish that TelexFree and the individual defendants James Merrill, Carlos Wanzeler, Steven Labriola, Joseph Craft, Sanderly Rodrigues de Vasconcelos, Santiago De La Rosa, Randy Crosby and Faith Sloan have directly or indirectly engaged in the violations alleged in the complaint . . .
At the moment, major civil litigation against TelexFree in the United States is occurring on at least two fronts. The number could rise, given that TelexFree allegedly operated in at least 20 U.S. states. And because the SEC has described a “search warrant” that was executed in Massachusetts, it is almost certain a criminal probe by at least two U.S. agencies is under way.
TelexFree also is under investigation in Brazil.
To hear some TelexFree members tell it, however, none of these things seem to matter or can be regarded as ordinary events.
At least two petition drives in support of TelexFree have started in recent hours. One of them asks a U.S. Bankruptcy Judge to “Bail out Telexfree.” Another appears not to petition a specific judicial officer. Rather, it appears to ask TelexFree members to support the firm’s bankruptcy filing because TelexFree “has meant a real opportunity to bring sustenance to each of our homes.”
Similar petitions popped up after the SEC alleged in 2012 that the Zeek Rewards “program” was a Ponzi- and pyramid scheme that had gathered $600 million. Further investigation now puts that number at between $845 and $897 million. In the interim, two Zeek insiders have been charged with federal crimes and the court-appointed receiver in the case is pursuing clawback claims from thousands of alleged Zeek winners.
In the 2008 AdSurfDaily MLM Ponzi-scheme case, petitions to support ASD also popped up. The Ponzi dollar figure in that case mushroomed from $53 million to $119 million over the course of the probe. Like Zeek, the ASD case started as a civil prosecution with a parallel criminal investigation. ASD President Andy Bowdoin has been in prison since mid-2012. He was sentenced to serve 78 months.
The Zeek and ASD proceeds combined total at least $969 million. If the $1.2 billion asserted in the Massachusetts complaint proves accurate, it means that TelexFree not only fetched more than Zeek and ASD combined, but also may end up holding the title of the largest MLM HYIP Ponzi- and pyramid scheme in history.
There is no doubt that Zeek and ASD members helped fuel the TelexFree machine.
