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Tag: prime bank schemes

  • ‘Minister Of The Gospel’ Accused Of Offering Undercover Agent Discount To Join ‘Secret’ HYIP Program Found Guilty Of Wire Fraud And Conspiracy

    onciuEDITOR’S NOTE: It doesn’t come any crazier than HYIP prime-bank schemes. This is another example . . .

    UPDATED 7:47 P.M. ET (U.S.A.) Moses Onciu, a self-styled “Minister of the Gospel” and director of David and Goliath International Ministries Inc. of Fountain Hills, Ariz., has been found guilty in federal court in California of HYIP-related criminal charges. (Wire fraud and conspiracy.)

    Onciu appears yesterday to have personally announced the guilty verdicts against him on a subdomain of a website styled DIYTrade that may operate from Hong Kong. On DIYTrade, Onciu promotes an Arizona company known as Allied Petroleum LLC, which claims to be “a Christian based company that believes in Jesus Christ as Lord, His virgin birth and his death and resurrection. We espouse the principles of Godly business practices and believe that God has given clear direction to those that truly wish to walk upright in their life and business.”

    OCWeekly, a publication in Orange County, Calif., first reported the news of the Onciu guilty verdicts on Oct. 24. PonziClawbacks.com picked up the story on the same day.

    How things will proceed at Allied Petroleum is unclear, given that Onciu was indicted in 2008 as part of what federal prosecutors called an “undercover investigation into fraudulent high yield investment schemes” and now has been found guilty. As part of the sting, the FBI created an “undercover entity (UCE) in Newport Beach, California that purported to be a financial advisory firm,” according to the indictment.

    Undercover agents posed either as “partners of the UCE seeking to invest their own funds or as wealthy clients of the UCE seeking to invest substantial monies,” according to the indictment.

    Onciu was accused in the indictment of pumping a “select, secret” HYIP that “would yield a 300% to 650% return in 30 to 45 days at no risk.”

    Along the way, according to the indictment, a Onciu co-defendant named Irene Pemkova of Las Vegas explained that David and Goliath was a “humanitarian foundation under the Central Intelligence Agency (CIA) umbrella” and that Onciu was a “former, highly placed CIA officer.”

    In an allegation similar to allegations in the Profitable Sunrise HYIP case brought by the SEC earlier this year, the 2008 indictment alleged that Pemkova asserted that a “humanitarian project was required for entry into the program.”

    Onciu, meanwhile, told an undercover agent during a conference call in December 2006 that he “usually doesn’t do transactions of less than $100 million” and that “making a return of 100% a month is not abnormal,” according to the indictment.

    With an undercover agent on the line, Onciu asserted that his role was to provide the required “humanitarian element” and that the “program is highly confidential and the government does not want people talking about such programs,” according to the indictment.

    Onciu also offered to reduce his fee, as a means of inducing the undercover agent to join the program, according to the indictment.

    During the same 2006 time period, Onciu co-defendant Beata Gizella Priore of Glen Head, N.Y., spoke on the phone with an undercover agent and purported to be in Europe, according to the indictment.

    Priore told the agent that a “client of hers invested $1 million in the program and made a return of $6.5 million,” according to the indictment. Priore, who has pleaded guilty, later had a personal meeting with the undercover agent.

    Among other things, New York resident Priore asserted she was “calling from the trading group in Frankfurt,” had been in the HYIP business for seven years and that the “program required a minimum investment of $1 million,” according to the indictment.

    Records in New York show that a person by the same name in the same town was disciplined by the state Office of the Professions in 1998 after admitting to “having been convicted of Criminal Possession of a Controlled Substance in the Fourth Degree.” The profession was identified as “Certified Dietitian and Certified Nutritionist.”

    In the Nov. 4 web post, Onciu appears to be claiming that Priore’s surprise  guilty plea in the 2008 HYIP case undercut his defense and that Pemkova created a false narrative that he was a CIA operative, thus subjecting him to the conspiracy charge. The post did not explain Onciu’s take on the allegations that he’d offered an undercover agent a discount to join the program and apparently decided that, in this instance, he’d accept less than the $100 million usually required to do business with him.

    Nor did the post explain how making a return of 100 percent a month in a secret HYIP program that required a humanitarian element was not abnormal.

    “Although I was only the introducing party I was charged as a co conspirator in this case and ultimately was the only one tried due to the other two parties legal standing: one took a guilty plea for a reduced sentence and the other took an insanity plea, leaving me as the only defendant,” the post read in part.

     

  • California Scammers Who Wiped Out Investors In 4,000 Percent ‘International Bank Trades’ Swindle Get Extra Prison Time For Filing False Liens Against Federal Prosecutor, FBI Agents

    ponziblotterRonald Wesley Groves and Donald Charles Mann swindled $4.8 million from 642 investors in a bizarre “international bank trades” caper that promised a payout of 4,000 percent. Now, they’ve been sentenced to an extra year in federal prison for filing false liens against a federal prosecutor and two FBI agents involved in the fraud probe, the office of U.S. Attorney Benjamin B. Wagner of the Eastern District of California said.

    Prime-bank fraud schemes, which may trade on secrecy and claim to be humanitarian in nature, are among the strangest of all in Ponzi Land. In the Groves/Mann scheme, $300,000 made its way into “the coffers of a Liberian presidential candidate,” prosecutors said.

    Liberia is a country in West Africa.

    Groves, 71, was sentenced last week to 10 years in federal prison for his role in the “Money Growth Solutions” (MGS) swindle, which operated between April 2005 and April 2006.

    Mann, 56, was sentenced to more than 17 years for the same swindle.

    Both men were sentenced today to an extra year in jail for filing the bogus liens while they were awaiting trial on fraud charges from the MGS scheme in 2008. The liens claimed that Groves and Mann were owed $101.9 million and that the meter was running against the prosecutor and FBI agents at a rate of $100,000 a day.

    Groves and Mann were charged with four counts of retaliation against federal officials by false claim and slander of title and one count of obstruction of justice.

    From a statement by prosecutors:

    The defendants told investors that these bank trades were a highly secretive investment vehicle known only to a few people around the world.

    In June 2011, a jury returned guilty verdicts against Groves and Mann after a nine-day trial. According to evidence presented at their trial, in one program, investors were offered a 10 to 1 return (1,000 percent) on their investment within a matter of weeks. In a later offering, the defendants promised a 40 to 1 return (4,000 percent) in the same amount of time. The defendants told investors that while their money was waiting to be placed into a bank trade, it would be maintained in an escrow account that could not be touched for any other purpose. The defendants also told investors that if they were unable to execute a “bank trade,” the investors would receive their entire investment back plus 6 percent interest within 12 months. With the exception of a few people who were able to obtain refunds, every MGS investor lost their entire investment.

    The federal investigation revealed that by April 2006, out of the $4.8 million received, Money Growth Solutions had less than $65,000 remaining in its bank account. Some of that money — $300,000 apiece — went into the pockets of the two defendants. The remainder of the money went to the defendants’ various pet projects, including $300,000 to the coffers of a Liberian presidential candidate and $2.5 million to a Florida company that was supposedly developing a revolutionary battery. The battery company was later determined by the Securities and Exchange Commission to be a scam and its owner was federally indicted.

  • BULLETIN: SEC: Purported ‘Trust’ Was $15 Million Prime-Bank Ponzi Swindle Operated By Two 70-Year-Olds; 1 Of The Accused Hucksters Has Prior Conviction For Trafficking Cocaine; Investors Were Told ‘Department Of Homeland Security’ Was A Customer And That The Devil Was Behind The Adage, ‘If It Sounds Too Good To Be True . . .”

    EDITOR’S NOTE: They don’t come any weirder than prime-bank swindles — and this one is one of the strangest we’ve ever reported on. 

    UPDATED 8:19 A.M. ET (NOV. 20, U.S.A.) Two individuals — both now 70 — conducted a prime-bank Ponzi swindle known as “the Trust” since at least 2004, the SEC said late this afternoon.

    The scheme allegedly operated in more than 20 states, but was concentrated in Georgia, the SEC said.

    One of the accused allegedly claimed he first heard about the Trust in the 1990s from a man named “John” in London. The other allegedly claimed this adage — “If it sounds too good to be true, it probably is” — was the work of the devil.

    Investors were told the U.S. Department of Homeland Security was a lending customer of the purported trust, a purported “loan” program that operated secretly in England and provided a return of 38 percent a year, the SEC said.

    They also were told that the trust “was started after World War II and is comprised of several extremely wealthy European families,” that the trust “owns banks in Europe,” that the trust “has the power to create money through fractional banking and the sale of banking debentures” and “funds humanitarian projects around the world,” the SEC alleged in the complaint.

    Charged in the alleged $15 million caper were Billy W. McClintock of Bradenton, Fla., and Dianne Alexander of Carlsbad, Calif. Alexander also is known as Linda Dianne Alexander and previously lived in Cumming, Ga. McClintock has claimed to be a gospel singer, was convicted of cocaine trafficking in 1989 and served prison time in Kentucky, the SEC said.

    “McClintock and Alexander pitched an investment opportunity that simply did not exist,” said William P. Hicks, associate director of Enforcement in the SEC’s Atlanta Regional Office. “They merely reshuffled funds between investors in a modern take on a classic prime bank scheme.”

    Some of the allegations against McClintock and Alexander are reminiscent of elements of the AdSurfDaily, Legisi and Zeek Rewards cases.

    In the ASD, Legisi and Zeek cases, for instance, investors were told not to refer to the programs as “investment” programs, according to records.

    Here is one of the allegations against McClintock and Alexander (italics added):

    Apparently attempting to avoid scrutiny by federal securities enforcers, McClintock told Alexander not to refer to investor payments as an “investment,” but rather as a “loan,” and that she should never refer to those whose money she took as “investors,” but rather as “Trust lenders.”

    Alexander recruited at least 220 people into the scam, which had “downline” investors, the SEC said.

    “Alexander recklessly relied solely on McClintock’s representations about the profits to be generated by the Trust, without taking any independent steps to either verify the existence of the Trust or whether McClintock was in fact receiving payments from the Trust,” the SEC charged.

    And Alexander issued appeals to religious faith to reel in investors, calling the adage “If it sounds too good to be true, it probably is” a “lie that came from the pit of hell,” and saying, “Put your money in the Trust and your trust in God,” the SEC charged.

    Clarence Busby, a figure in the AdSurfDaily Ponzi story, was implicated by the SEC in three prime-bank swindles in the 1990s, according to records.

    Read the SEC complaint.

     

     

  • URGENT >> BULLETIN >> MOVING: SEC Says D.C. Attorney Brynee K. Baylor Was Running Prime-Bank Swindle With Frank L. Pavlico III, A Felon On Probation In Case Involving ‘Drug Trafficking’ Proceeds

    UPDATED 10:04 A.M. ET (DEC. 8, U.S.A.)  Frank L. Pavlico III — convicted in 2007 of felony conspiracy to conduct financial transactions involving the proceeds of drug trafficking and released in 2008 after serving his 10-month prison term — has been arrested for wire fraud by the FBI in an alleged prime-bank swindle that occurred while Pavlico was on probation, the SEC said.

    Charged civilly with securities fraud is Brynee K. Baylor, an attorney in the District of Columbia, Maryland and New Jersey. The SEC said Baylor helped Pavlico pull off the swindle, which allegedly gathered about $2.1 million and affected at least 13 investors.

    U.S. District Judge Rosemary Collyer of the District of Columbia approved an emergency asset freeze, the SEC said.

    “Pavlico and Baylor produced paperwork dotted with legal-sounding gibberish designed to deceive investors into believing this is a highly-sophisticated investment opportunity,” said Stephen L. Cohen, associate director of the SEC’s Division of Enforcement. “This case is particularly egregious because attorneys hold a special position of trust, and Baylor and her law firm cloaked the Milan investment in the guise of licensed legal services to deceive investors and steal their money.”

    Baylor, 37, of Silver Spring, Md., is co-founder and managing partner of Baylor & Jackson PLLC in the District of Columbia, according to the SEC. The agency said she and the law firm “acted as ‘counsel’ for Pavlico’s company The Milan Group, vouching for Pavlico and acting as an escrow agent that in reality was merely receiving and diverting the majority of investor funds.”

    The Milan Group, which also was known as The Milan Trading Group Inc., operated from Pavlico’s home in Clarks Summit, Pa., the SEC said. Pavlico is 41, the SEC said.

    The scheme operated in a shroud of mystery, with inexperienced investors being told about a purported “private trading platform” and that  “confidentiality and secrecy requirements prevented the defendants from providing details of the investments,” the SEC charged.

    Baylor “deceive[ed] investors into believing that the Milan investment was legitimate and that investors’ funds would be safe,” the SEC charged, adding that she provided notarized “Attorney Attestation” letters to some investors.

    Moreover, the SEC charged, Baylor “told investors that she had personally witnessed millions of dollars paid to investors through B&J’s trust account, consistent with Pavlico’s representations.”

    Pavlico “deceived investors by using the name ‘Frank Lorenzo’ and by failing to disclose that he pled guilty to a felony, served 10 months in prison, and was on supervised release at the time he was soliciting their investments,” the SEC charged.

    Investors were duped by high-sounding terms such as “standby letters of credit” and “bank guarantees,” the SEC said. Meanwhile, “Pavlico and Baylor also provided investors with bogus excuses attempting to explain the delay in providing the promised returns including, among other things, feigned illnesses, false representations that the European bankers supposedly involved in the transaction were on extended vacation, or that there were unspecified problems with processing the transactions through ‘Euroclear,’ a supposed necessary step in the transaction,” the SEC charged.

    The scheme began in August 2010 or earlier, the SEC charged. Prison records show Pavlico was released in November 2008. His probation ran through Nov. 5, 2011, according to records.

    “Pavlico offered returns of up to twenty times the original investment within forty-five days,” the SEC charged. “Investors were told that the investment involved no risk and that their principal would be returned if a successful bank instrument transaction was not completed.”

    Fake “screen shots” also were used to dupe investors, the SEC charged.

    Collyer also is presiding over the AdSurfDaily Ponzi case in the District of Columbia. The FBI alleged last month that Collyer was targeted with false liens by Kenneth Wayne Leaming, 55, of Spanaway, Wash.

    Read the SEC complaint against Pavlico and Baylor.

  • Jury Convicts Florida Woman Who Ran Bizarre Ponzi And Fraud Scheme With Husband; Marian I. Morgan Guilty On All 22 Counts, Including Wire Fraud And Money-Laundering

    A 57-year-old Florida woman who ducked out of the United States with her husband after becoming implicated in a $28 million HYIP/prime-bank swindle has been found guilty of wire fraud, money-laundering, conspiracy, interstate/foreign transportation of stolen funds and tax crimes, U.S. Attorney Robert E. O’Neill of the Middle District of Florida announced.

    The investigation into the business affairs of John and Marian Morgan of Sarasota began as an SEC civil case and morphed into a 22-count criminal prosecution with bizarre international and domestic twists. The Morgans initially high-tailed it for Europe in a bid to duck the SEC and then ventured to the island nation of Sri Lanka, where they were jailed in 2009 for passing a “forged instrument,” expelled and returned to the United States.

    John Morgan pleaded guilty to criminal charges of wire fraud and conspiracy in June 2011. Marian Morgan, whom the Sarasota Herald Tribune reported two years ago had text-chatted with her gardener to make sure he was maintaining the couple’s Florida mansion while they were jailed in Sri Lanka, chose to go on trial.

    The Morgans were fraudsters at the helm of Morgan European Holdings, a Ponzi factory with a high-sounding name.

    “They promoted sham ‘high yield/ prime bank note’ investment programs through the company, promising investors that they would receive returns of 200-300% in three months and that their principal funds would be held safe in an escrow account in Denmark,” prosecutors said. “Evidence at trial, however, showed that the Morgans spent approximately $11 million of investor money on themselves soon after investors wired the funds to the escrow account. The Morgans purchased luxury automobiles, a waterfront mansion, and numerous luxury items with investor funds.”

    While jailed in Sri Lanka, Marian Morgan complained to a U.S. judge about “filthy” conditions and being housed alongside “murderers and heroin dealers,” according to court records.

    She told the same judge that the couple’s “biggest client”  in the United States hired them to lay the banking groundwork for $1.6 billion in infrastructure projects” in Sri Lanka and the Maldives and that the government of Sri Lanka had falsely accused them of presenting a “forged bank document.”

  • After Weeks Of Prelaunch Hype And A Month Of Formal Fundraising, Andy Bowdoin Says He Is $480,700 Short Of $500,000 Goal; AdSurfDaily Patriarch And Accused Felon Says In Email That He Has Collected Only $19,300 To Pay For Criminal Defense In $110 Million Ponzi Case

    He once had command of legions — and AdSurfDaily members lined by the hundreds and waited in line for hours to pay Andy Bowdoin to give them a chance to “build wealth.” At its peak in the summer of 2008, ASD reportedly was posting tens of millions of dollars a week in revenue.

    But that was then.

    Now, three summers later, Bowdoin says he is having trouble even establishing contact with members listed in a database that contains 77,000 names. Those few members still willing to read his emails have been stingy with their wallets and pocketbooks.

    A month ago — after preliminary fanfare that started weeks prior — Bowdoin formally asked members to pony up $500,000 to pay for his criminal defense on charges of wire fraud, securities fraud and selling unregistered securities. Bowdoin’s “positive” appeal to get members to join “Andy’s Fundraising Army,” though, has been a dud.

    The army has managed to cough up only $19,300, leaving Bowdoin $480,700 short of his goal, according to Bowdoin.

    Bowdoin, however, said in an email that he remains positive — and that he’ll launch a Facebook fan site to broaden his appeal.

    Whether his potential Facebook donors will want their names and photographs splashed all over Bowdoin’s fan page — thus exposing themselves to questions about why they are cheerleading for an accused felon implicated in an alleged $110 million Ponzi scheme after earlier having been implicated in a separate securities swindle — remains unclear.

    Some ASD figures have identified themselves as “sovereign citizens.” Others have emerged as multilevel-marketing (MLM) junkies who race from scheme to scheme to scheme. Still others have circulated purported prayers calling for death and destruction to rain down on federal prosecutors and the men and women who guard the President of the United States and the U.S. financial infrastructure.

    Two ASD figures thought it prudent last year to sue the United States for more than $29 TRILLION — more than double the U.S. Gross Domestic Product in 2009.

    One ASD member claimed that $21 in “silver coinage” taken to a Missouri courthouse could reverse a mortgage foreclosure. Another was sued successfully under the federal racketeering statute in a scheme to have enormous financial judgments placed against public officials. Yet another advanced a belief that the United States passed secret legislation in the 1990s in anticipation of a visit by a race of reptilian aliens.

    During that same decade Bowdoin was arrested in Alabama in a securites caper. And one of his business partners was implicated by the SEC in three prime-bank schemes.

  • URGENT >> BULLETIN >> MOVING: Andy Bowdoin, AdSurfDaily Lose Appeal Of $65.8 Million Forfeiture Order; Panel Unanimously Upholds District Judge

    Andy Bowdoin

    BULLETIN: Andy Bowdoin and AdSurfDaily Inc. have lost their appeal of a January 2010 order by U.S. District Judge Rosemary Collyer that $65.8 million be forfeited to the government in the August 2008 civil Ponzi scheme case against Bowdoin’s assets.

    The U.S. Appeals Court for the District of Columbia unanimously upheld Collyer, rejecting Bowdoin’s claims he had been denied due process and been hoodwinked by his former attorneys into releasing his claims to the seized cash in January 2009.

    “To begin with, there can be no doubt that appellants meant to withdraw their claims,” the panel ruled. “Their withdrawal motion expressly stated that they wished to ‘withdraw and release with prejudice’ their verified claims and that they ‘consent[ed] to the forfeiture of the properties.”

    “Nor is there any basis to conclude that appellants were somehow tricked into releasing their claims,” the panel continued. “Despite Bowdoin’s protests to the contrary, his own affidavit shows that he understood well that he was receiving no promise in return for relinquishing his claims.”

    Bowdoin’s withdrawal of his claims was “free and deliberate,” the panel ruled.

    Although Bowdoin blamed one of his former lawyers for giving him bad advice, the appeals panel said nonsense.

    “[F]ar from being negligent, appellants’ attorney had sound reasons for recommending that they cooperate with prosecutors by relinquishing their claims,” the panel ruled.

    The ruling means that the government now has title to about $80 million seized in the ASD case. Bowdoin lost a previous appeal for a smaller sum in a separate forfeiture action brought in December 2008, and Collyer ordered the forfeiture of more than $14 million from Golden Panda Ad Builder in July 2009.

    Golden Panda was the purported “Chinese” arm of ASD. It was operated by Clarence Busby, whom the SEC had implicated in three prime-bank schemes in the 1990s, according to court filings.

    About $65.8 million of the total sum seized in the August 2008 forfeiture case was in Bowdoin’s personal bank accounts, including one account that contained more than $31 million.

    Bowdoin initially released his claims to the money in January 2009. By late February of the same year, he sought to reassert his claims as a pro se litigant.  He ultimately retained new counsel, and unsuccessfully sought to have Collyer removed from the case.

    Collyer refused to step down, and issued the forfeiture order for $65.8 million in January 2010. At least one other ASD member also sought unsuccessfully to force Collyer to disqualify herself from hearing the case.

    That member — Curtis Richmond — accused the judge of treason. In a separate case in Utah in 2008, Richmond claimed a federal judge owed him $30 million. That judge, too, refused to step down, finding that a purported Indian tribe with which Richmond was associated was a “sham.”

    Richmond has claimed to be a “sovereign” being, as have other people with ties to ASD.

    Bowdoin was charged criminally with wire fraud, securities fraud and selling unregistered securities in December 2010. The U.S. Secret Service said he was operating a Ponzi scheme that had gathered at least $110 million by disguising itself as a “advertising” business.

    ASD perhaps created as many as 40,000 victims, according to court filings.  The civil portion of the case featured dozens of templated, pro se filings from ASD members who asserted the government had no “EVIDENCE” of wrongdoing.

    Almost three years into the case, some ASD members still are claiming the government has no evidence — despite the fact that the evidence has been discussed in open court and in public filings dating back to August 2008.

    Read the ruling.

  • SEC: Recidivist Huckster Made Bedside Visit To Dying Man, Promised Him ‘Investment’ Would Take Care Of His Wife For ‘Life’; Couple’s Money Plundered In Apparent HYIP/Prime-Bank Hybrid Scheme With Link To Another Swindle

    EDITOR’S NOTE: Make no mistake: America is at risk from an epidemic of white-collar crime. American money is at risk, American prestige is at risk, and national security is at risk — as Americans hatch one fraud scheme after another and recruit other Americans (and citizens of other countries) to help the schemes mushroom. Some of the conduct reads like fiction of the strangest sort. It’s enough to want to make you gag.

    The story below may make some readers angry — and rightly so. It covers allegations against Larry Michael Parrish of Walkersville, Md. Parrish is accused by the SEC of orchestrating a $9.2 million swindle through IV Capital, his mysterious firm incorporated in Nevis, an island in the Caribbean.  The scheme allegedly had the characteristics of a sort of HYIP/prime bank hybrid.  “Programs” that resemble the one allegedly pushed by Parrish are regularly hawked on Ponzi scheme and criminals’ forums such as Talk Gold and MoneyMakerGroup. Because law enforcement has made inroads in educating the public about the dangers of HYIP schemes, the promoters of such schemes now are trying to make prospects believe they are not investing in an HYIP — and millions of dollars continue to vanish into giant, money-sucking sinkholes.

    The alleged Parrish scheme also has a link to another scheme — this one a “diamond-themed” caper, the SEC said.

    Get ready to gag . . .

    Posing as a concerned financial adviser and investment strategist, recidivist securities swindler Larry Michael Parrish of Walkersville, Md., visited a dying man in a Colorado hospital, the SEC said.

    The man was suffering from cancer. Parrish assured him that investing with him was safe, that the man’s wife would not have to worry about her finances after his death, that “the investment would provide for his wife for the rest of her life.”

    “That money is now gone,” the SEC said. And so is the money from 70 other investors in three states, about $9.2 million in all, the agency added.

    Because Parrish had had well-documented run-ins with the SEC, a trove of information about him was available online and in public filings. Some of his investors even found it. When they approached him with questions, Parrish lied, the SEC said.

    “When expressly asked by investors, Parrish denied that he was the named defendant,” the SEC charged.

    Although Parrish claimed he’d been running a successful business, he’d been running a Ponzi scheme since 2005, the agency said.

    The scheme began to collapse in June 2009, and the excuse-making began, the SEC said.

    “On August 17, 2009, Parrish wrote to his investors to explain the ‘delay in the payment of past earnings,’” the SEC charged. “The letter claimed that some investors in IV Capital had not paid taxes on earnings which ‘triggered a bank audit for the entire group.’”

    “Interest” payments could not be made until the purported bank audit had been completed and until the investors who purportedly weren’t complying with tax laws came into compliance, Parrish allegedly told investors.

    “As part of its investigation, the SEC did not find — and Parrish and IV Capital did not provide — any evidence that there ever was a bank audit that resulted in Parrish being unable to make payments to the investors,” the SEC said.

    But Parrish held to his cover story for months, the SEC said.

    In October 2009, he told investors that “there were still four members who were out of tax compliance,” the SEC said.

    By December 2009, the SEC said, Parrish was reporting good news to investors: Only three members purportedly remained out of tax compliance.

    Even so, the SEC said, Parrish told investors he faced other challenges. These challenges purportedly included “administrative work and time traveling and meeting with non-U.S. clients.”

    A Phantom Partner?

    In February 2010, two investors scheduled a meeting with Parrish in New York to talk about “missed payments and [the] current status of IV Capital. Parrish and a “purported partner in IV Capital” were supposed to attend the meeting.

    “The night before the two investors were to fly from Colorado, where they reside, to New York, Parrish contacted them to say the purported partner was unavailable to meet. As part of its investigation, the SEC did not find — and and IV Capital did not provide — any evidence that Parrish had any partner in IV Capital.”

    What the SEC eventually discovered was that Richard Dalton, who was running a separate, “diamond-themed”  Ponzi scheme, was acting as an agent for Parrish in the Parrish Ponzi scheme, which was called the “Trading Program.”

    Dalton’s alleged diamond-themed scheme also featured bizarre claims, including assertions that payments were delayed to investors because an airplane the firm used to shuttle diamonds from Africa lost an engine and had to make an emergency landing in Amsterdam.

    Parrish “misappropriated” at least $780,000 in investor funds by awarding himself cash, luxury vacations, a motorcycle, shopping trips, and other extravagances, the SEC said.

    He was not registered with the SEC, and had ignored orders handed down for previous misconduct, the SEC said.

    The nature of his new scheme involved some sort of high-risk trading on a limited basis, and part of the fraud is “presently uncategorizable,” the SEC said.

    “No investor funds remain,” the SEC said. “Parrish and IV Capital’s known bank accounts are empty.”

    Since the collapse of the scheme, “Parrish has virtually disappeared and refused to cooperate with the SEC during its investigation,” the agency said.

  • AN HYIP PARANOIA-MAKER: Undercover Agent Listens To Alleged Bankrupt Fraudster’s Pitch In ‘Hooters’; SEC Files Emergency Action Alleging Christopher Love Blackwell At Helm Of Massive Fraud Scheme

    EDITOR’S NOTE: This developing story on the alleged actions of accused securities schemer Christopher Love Blackwell is apt to cause paranoia among HYIP and prime-bank fraudsters, including criminals who populate online forums such as TalkGold and MoneyMakerGroup.

    It features the presence of a Department of Homeland Security (DHS) undercover operative who allegedly infiltrated Blackwell’s scheme and was so good at keeping his identity secret that Blackwell pitched him repeatedly over a period of months in a Hooters restaurant and bar as other agents worked to unmask the complex caper. The undercover agent eventually returned an “investment contract”  prepared by Blackwell and plunked down $1,000 of government money as a down payment on a purported $500,000 investment. Blackwell allegedly later contacted the undercover agent repeatedly via email and telephone to collect the outstanding “balance” of $499,000. Blackwell even left a voicemail on the agent’s phone, according to court filings.

    BULLETIN: The SEC has gone to federal court in Dallas and is seeking an emergency injunction to halt an alleged Ponzi scheme involving Christopher Love Blackwell of Euless, Texas, and Roswell, N.M., AV Bar Reg Inc. of Colleyville, Texas, and Millers A Game LLC of Chandler, Ariz.

    Blackwell, 31, and his companies initially came on the Feds’ radar screens last year when the U.S. Department of Homeland Security (DHS) was alerted that he was wiring large sums of money and conducting cash transactions that raised terrorism concerns, according to court records.

    In the end, the SEC dryly advised a federal judge, “it became clear to DHS that Blackwell was not a terrorist — just a thief.”

    Regardless, the SEC said, the fraud was ongoing and  Blackwell still appeared to be selling the scheme as recently as Jan. 19.

    DHS operatives kept Blackwell under surveillance, assembled documents, conducted interviews and “made video and audio recordings of meetings during which Blackwell offered investments to undercover agents,” the SEC said in court filings.

    Records show that Blackwell was on the receiving end of a default judgment of $24 million in a civil fraud case filed in July 2008 and sought Chapter 7 protection in U.S. Bankruptcy Court on Christmas Eve 2008.

    Despite the lawsuit, judgment and bankruptcy filing, Blackwell continued to operate what he described as a “Fixed Income Trading Program” that offered returns of up to 30 percent a month, according to the SEC.

    To pull off his Ponzi and fraud scheme, Blackwell bragged about his “academic pedigree,” falsely claiming to have Master’s and PhD degrees “from a prestigious university in Spain” and also falsely claiming once to have been employed by Goldman Sachs and the Bank of Madrid.

    In 2007, with the scheme unknown to law enforcement, Blackwell stole $750,000 from an investor. In 2008, according to court filings, he swindled $200,000 from another investor, returning $9,926 in bogus “profits” to the investor. This investor was introduced to Blackwell by “an intermediary who claimed to run a faith-based business and investment development firm,” according to the SEC complaint.

    The purported faith-based intermediary assured the investor that Blackwell’s program in “foreign bank instruments” was “totally safe,” the SEC alleged. Despite the assurance of the intermediary, Blackwell immediately began to distribute the $200,000 provided by the investor to other companies and people, including Blackwell’s former business partner and Blackwell’s father.

    By late 2008, according to the SEC, Blackwell was engineering a scheme to rip off a former football player for the Dallas Cowboys. The player had been introduced to Blackwell by another player, according to the complaint.

    Neither player was identified in the complaint. The former player, lured by the promise of safe returns from an experienced international trader, gave Blackwell $250,000 in the belief that he was purchasing an investment note from HSBC Bank, one of the largest financial firms in the world.

    Blackwell “never” purchased an HSBC note. Instead, according to the SEC, he instructed an attorney exercising control over the escrow account to which the former Cowboy had wired the funds to transfer nearly all of the $250,00 to a Phoenix company controlled by a friend of Blackwell.

    When confronted by the SEC, Blackwell allegedly told the agency that he had “earned” the money despite his assurances to the player that the sum would be used to purchase a safe bank note.

    Although Blackwell showed the former football player a document on HSBC letterhead as purported proof  he had purchased a bank note with the player’s money, “HSBC’s Security and Fraud Risk group has confirmed that the letter was fraudulent.

    “In other words,” the SEC said, “it was a forgery.”

    The former player appears to have been ripped off for the entire $250,000 investment, the SEC said.

  • OFFICIALS: Ponzi Schemes, Investment Fraud Have Led To Staggering Losses In Utah; Hundreds Of Potential Perpetrators Identified

    UPDATED 8:38 P.M. EDT (U.S.A.) Recent Ponzi schemes and cases of investment fraud have cost Utah residents an estimated $1.4 billion, the FBI said today.

    About 370 investigative “subjects” — defined as “potential perpetrators” in current cases — have been identified, and the agency and its law-enforcement partners have embarked on a public awareness and education campaign aimed at keeping Utahns safe from scammers.

    About 4,400 people have been affected by investment-fraud schemes in the state, the FBI said. The education campaign includes billboards and public-service messages.

    Under the umbrella of the Utah Securities Fraud Task Force, the FBI and its partners — including the SEC, the IRS, the U.S. Postal Inspection Service, the Utah Department of Commerce’s Division of Securities, the Utah County Attorney’s Office, the United States Attorney’s Office for the District of Utah and the Utah Attorney General’s Office — have produced a video that encourages viewers to be aware that schemers may target them based on their religious affiliation or interests.

    “Affinity fraud is when someone you know — for example a church member, a coworker, or a friendd — takes advantage of you in an investment fraud scheme,” said James S. McTighe, FBI special agent in charge.

    Con artists have been known to deliberately target members of the Church of Jesus Christ of Latter-Day Saints, the FBI said.

    No group of believers — and no group of people who share a common bond — is immune to the cunning of expert con men, the FBI added.

    An investor featured in the educational video said her experience of being duped can serve as a warning to others:

    “He was a religious man, so he says, and he really, he really put on the ‘You know I am so guided by the spirit’, and ‘I know I am here to help you’, and ‘just trust me,’” the woman said.

    Nothing about a Ponzi scheme is good news, warned the SEC’s top official in Salt Lake City.

    “Ponzi schemes always collapse eventually and it’s typically because you run out of newer investors,” said Ken Israel.

    How do fraudsters profit from a Ponzi scheme?

    “The hallmark of the Ponzi scheme is that you use money from new investors to pay off your old investors and of course put a bunch in your pocket at the same time,” said Keith Woodwell, director of the Utah Division of Securities.

    Officials warned the public to be on the look out for “signs of trouble”:

    • The investment offer is unsolicited.
    • It sounds too good to be true.
    • You’re promised big monthly or yearly returns with little or no risk.
    • You’re asked to keep the investment offer secret.
    • The promoter cannot answer specific questions or provide you with written financial documentation.
    • Slick websites and glossy literature can be deceiving, and also be suspicious of documentation that looks unprofessionally produced.
    • The promoter won’t give you time to research the investment.
    • You are told you are one of the lucky few allowed in on the investment.
    • You are required to bring in more investors.
    • The salesperson is not licensed or the product is not registered.

    “Con artists who run Ponzi schemes often promise big financial returns and may tell potential investors they operate programs that can sound impressive,” the FBI said. The agency advised investors to do their homework and be skeptical of pitches for programs such as these:

    • Foreign Exchange Currency Trading.
    • Prime Bank Investment.
    • Commodities Investments.
    • Real Estate Investments.

    “Research before you invest, the FBI warned, recommending these resources for Utah residents:

    Get educated for free at the June 30 “Fraud College” at Utah Valley University in Orem

    Watch the Task Force video.

    Get more information from the FBI:

    NOTE: This story has been republished at a URL that is different than its original URL. Although this post reflects a date of June 13, it is not the original publication date. Click here to read why.