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Tag: Profit Clicking

  • URGENT >> BULLETIN >> MOVING: Legisi HYIP Ponzi Pitchman Sentenced To 60 Months In Federal Prison, Ordered To Pay $4.4 Million In Restitution

    Matthew John Gagnon
    Matthew John Gagnon

    URGENT >> BULLETIN >> MOVING: Legisi HYIP Ponzi-scheme pitchman Matthew John Gagnon has been sentenced to 60 months in federal prison, ordered to pay $4.4 million in restitution and further ordered to serve three years’ supervised probation after his prison release, the office of U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan said.

    Legisi, a $72 million Ponzi scheme pushed on fraud forums such as TalkGold and MoneyMakerGroup, was operated by Gregory N. McKnight, who faces sentencing in August. Gagnon’s five-year sentence was the maximum under a plea agreement with prosecutors, who’ve recommended McKnight serve 15 years.

    Gagnon pushed Legisi and other fraud schemes through Mazu.com, the SEC said in 2010. The name of MoneyMakerGroup appears in evidence exhibits in the Legisi Ponzi case.

    Gagnon will be permitted to self-report to prison, prosecutors said.

    The Legisi case — perhaps particularly events involving Gagnon — has been closely watched because it shows that MLM-style HYIP pitchmen can be held accountable criminally for pushing scams. The SEC called Gagnon a threat to the investing public, describing him as a serial fraud pitchman who lacked licenses to sell securities and pushed the unregistered securities of multiple fraud schemes.

    In civil charges announced yesterday in Ohio, prosecutors effectively made the same claims against promoters of the alleged Profitable Sunrise pyramid scheme. Included among them was Nanci Jo Frazer, who allegedly also promoted the $119 million AdSurfDaily Ponzi scheme and the $600 million Zeek Rewards Ponzi- and pyramid scheme.

    The Legisi case began as an undercover probe by state securities regulators in Michigan and the U.S. Secret Service.

    Legisi’s Terms of Service sought to make members affirm they were not an “informant, nor associated with any informant” of the IRS, FBI, CIA and the SEC, among other agencies, according to documents filed in federal court.

    Current scams such as Profit Clicking have published similar terms, which read like an invitation to join an international financial conspiracy. Ohio prosecutors said they believed Frazer also pushed ProfitClicking, in addition to Zeek, ASD and Profitable Sunrise.

    McKnight, prosecutors have said, tried to sanitize Legisi by calling it a “loan” program and engaging in semantic obfuscation. Any number of HYIP scams have employed similar linguistic sleight-of-hand, with ProfitClicking bizarrely arguing that neither itself nor affiliates can be held accountable.

    Gagnon argued in court that he’d been duped by McKnight, but a federal judge didn’t buy it.

  • Law Firm’s Name Used In Bid To Dupe Members Of Banners Broker, Profit Clicking, MLM Attorney Says

    Kevin Thompson of Thompson Burton PLLC.
    Kevin Thompson of Thompson Burton PLLC.

    UPDATED 11:28 P.M. EDT (U.S.A.) Scammers have used the names of government agencies and famous businesses in bids to dupe the public. Now, the name of a well-known MLM law firm appears to have been used for the same purpose.

    Attorney Kevin Thompson published a Blog post today that warns of a bogus Banners Broker/Profit Clicking “Claim Form” on the Web. Thompson is with Thompson Burton PLLC in Tennessee.

    “DO NOT FILL OUT THIS FORM,” Thompson warned in the post. “It’s fraudulent. We did not create this form, or anything like it. We are not representing Banners Brokers or Profit Clicking participants.”

    And, Thompson noted, “The form is requiring highly sensitive information, such as your usernames and passwords for Payza and Solid Trust Pay accounts. It’s also asking for credit card information. If you filled out the form, we strongly suggest you change your passwords and cancel your credit cards immediately.”

    Such events have been associated with phishing schemes and identity-theft schemes.

    Banners Broker is a bizarre “program” that, like many HYIPs, purports to be in the “advertising” business. Promoters have claimed that sending money to Banners Broker results in a doubling of the cash.

    ProfitClicking is a scam that rose up to replace the JSSTripler/JustBeenPaid scam purportedly operated by Frederick Mann. Mann, a former pitchman for the AdSurfDaily Ponzi scheme, may have links to the “sovereign citizens movement.” “Sovereign citizens” may express an irrational belief that laws do not apply to them.

    Among other things, ProfitClicking became known — like JSS/JBP before it — for publishing Terms that read like an invitation to join an international financial conspiracy. Here is Item 6 from the ProfitClicking Terms, as published on Sept. 3, 2012 (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.

    Mann once called government employees “part of a criminal gang of robbers, thieves, murderers, liars, imposters.”

    Regulators in Italy and the Philippines have issued warnings about JSS/JBP or ProfitClicking, both of which featured Terms similar to those of Legisi, a $72 million HYIP fraud scheme broken up by the SEC and the U.S. Secret Service in May 2008, about three months before the AdSurfDaily Ponzi scheme ($119 million) was exposed.

    The PP Blog has been subjected to various bids to chill its reporting on the JSS/JPB/ProfitClicking scams, including one from an individual who claimed he’d defend Mann “so help me God.”

    Meanwhile, the PP Blog has received bizarre and menacing spam apparently in support of Banners Broker. (Like JSS/JBP/ProfitClicking, AdSurfDaily, Legisi and Zeek Rewards, Banners Broker has a presence on well-known Ponzi-scheme forums such as TalkGold and MoneyMakerGroup.)

    WARNING: The next paragraph  includes quoted material from one of the Jan. 18, 2013, spams, and the PP Blog is reproducing it to illustrate the bizarre and often menacing nature of the HYIP sphere. Indeed, the apparent Banner’s Broker supporter wrote (italics added):

    ” . . . I am Big Bob’s cock meat sandwich. Your mom ate me and made me do press ups until I threw up . . . I am gonna report you. When you make false accusations, you can get done. Maybe you will be seen in court soon . . .”

    In August 2012, the SEC described Zeek Rewards as a $600 million Ponzi- and pyramid scheme. A number of reload scams have surfaced in its wake. At least one appears to have been a bid to dupe people into sending money to an entity that was posing as a U.S. government agency while claiming to be a recovery vessel for Zeek members who lost money.

    Thompson is encouraging people who may have information about the purported Banners Broker/Profit Clicking “Claim Form” to contact him here.

     

  • ULTIMATE INSULT? ‘ProfitClicking,’ A ‘JSSTripler’/’JustBeenPaid’ Reload Scam That Surfaced After Collapse Of Zeek Rewards, Now Called ‘ProfitCrapping’ On Ponzi Boards

    Frederick Mann
    Frederick Mann

    A “program” the PP Blog reported may have ties to the so-called “sovereign citizens” movement appears to have wiped out investors and perhaps zeroed out the purported earnings of many of them, according to posts at the MoneyMakerGroup Ponzi-scheme forum.

    In fact, according to one post, the “ProfitClicking” program perhaps now can be best described as “Profitcrapping.”

    ProfitClicking listed Liberty Reserve as one of its payment processors. On Tuesday, federal prosecutors in New York described Liberty Reserve as a massive criminal enterprise involved in the laundering of more than $6 billion. The effect of the Liberty Reserve action on Profit Clicking was not immediately clear.

    What is clear is that ProfitClicking was a fraud from the start. The “program” traces its roots to JSSTripler/JustBeenPaid, which promised a daily payout of 2 percent and purportedly was operated by Frederick Mann, a one-time pitchman for the collapsed, 1-percent-a-day AdSurfDaily Ponzi scheme. ProfitClicking surfaced after Mann purportedly retired suddenly in the days after the SEC took down Zeek Rewards in August 2012, amid allegations it had operated a $600 million Ponzi- and pyramid fraud that had duped investors into believing it provided a legitimate payout averaging about 1.5 percent a day.

    Prior to the emergence of ProfitClicking, Mann speculated that his JSS/JBP “program” could come under attack by American cruise missiles. He also has described U.S. government employees as “part of a criminal gang of robbers, thieves, murderers, liars, imposters.”

    Taking the time to ensure JSS/JBP was operating legally was a concession to slavery, Mann contended. Fellow AdSurfDaily figure Kenneth Wayne Leaming, a purported sovereign convicted in a plot to file false liens for billions of dollars against U.S. government employees, later contended that he was being held as a slave against his will.

    But even as Mann was sliming the U.S. government and calling its employees slavemasters, one of his JSS/JBP pitchmen was operating a site known as Vatican Assassins that contended “Majority Savage Blacks were never taught to behave in civil White Protestant culture and thus have been released upon us Reformation Bible-believing Whites to further destroy our once White Protestant and Baptist American culture founded upon the Reformation’s AV1611 English Bible and a White Protestant Presbyterian Constitution with its attached White Baptist-Calvinist Bill of Rights.”

    Some analysts have speculated that the name “Frederick Mann” (emphasis by PP Blog) is longhand code for “free man.” Purported “sovereign citizens” sometimes calls themselves “free men of the land.”

    Among other things, both JSS/JBP and ProfitClicking made members affirm they were not with the “government.” Mann declined to say where his “program” was operating from, a development that drew comparisons to the infamous BCCI banking scheme of the 1990s. BCCI, shorthand for Bank of Credit and Commerce International, purportedly was designed to be “offshore everywhere,”

    Liberty Reserve also has drawn such comparisons. (Link is to May 28 article in Vanity Fair.)

    Mann fell out of the Ponzi spotlight for a brief time after his purported retirement from JSS/JBP as ProfitClicking was gaining a head of steam.

    He soon was back, however — this time as a pitchmen for a “program” known as ClickPaid.

    The ClickPaid Terms — like the Terms of JSS/JBP and ProfitClicking — made members affirm they are not with the “government.”

    On May 29, the PP Blog reported that the Securities and Exchange Commission of the Republic of the Philippines had issued a warning on the JSSTripler/JustBeenPaid and ProfitClicking scams. JSS/JBP also came under investigation in Italy.

    A Ponzi-board program known as “Profitable Sunrise” also experienced the same fate in Italy.

    The U.S. SEC has described Profitable Sunrise as a murky “program” that may have collected tens of millions of dollars through offshore bank accounts. Profitable Sunrise had five HYIP plans, including one bizarrely dubbed the “Long Haul,” which purported to pay 2.7 percent a day — more than Zeek, more than ASD, more than JSS/JBP, more than ProfitClicking, more than ClickPaid.

    A website linked to Mann once linked to videos featuring Francis Schaeffer Cox, a purported “sovereign” and “militia” man implicated in a murder plot against public officials in Alaska.

  • RECEIVER: AlertPay And SolidTrustPay May Hold Additional Zeek Assets; Forensic Team Is Working ‘To Investigate And Seize These Funds’

    EDITOR’S NOTE: One way to read a report filed yesterday by the court-appointed receiver in the Zeek Rewards Ponzi-scheme case is as a warning manual that brings to life the kind of vexing problems HYIP schemes create for operators, vendors and participants — including “insiders.” Kenneth D. Bell’s report to Senior U.S. District Judge Graham C. Mullen of North Carolina strongly hints that the receivership has identified “key insiders.” Their names have not been published in court filings . . .

    recommendedreading1UPDATED 4 P.M. EDT (U.S.A.) Although early filings last year in the Zeek Rewards Ponzi scheme case suggested that offshore payment processors Alert Pay (Payza) and Solid Trust Pay held more than $40 million connected to Zeek, the court-appointed receiver has advised a federal judge that the two processors may hold even more than originally believed.

    Both AlertPay and SolidTrustPay operate from Canada. Their names appear constantly in Ponzi-board promos for fraud schemes. The companies’ names also have appeared in court filings related to various HYIP schemes, including the alleged $72 million Pathway To Prosperity fraud in 2010 and the $119 million AdSurfDaily fraud in 2008.

    In 2009, while the ASD case was still in the courts, some members of AdSurfDaily received mysterious “final refunds” from SolidTrustPay through an STP-connected email address of oceannamusic@xplornet.com. The purported pro rata refunds led to questions about whether some ASD members were benefiting at the expense of others while the case still was in the U.S. courts and whether ASD actually had money in SolidTrustPay under the name of a different company or a user other than President Andy Bowdoin. (See July 2009 post by PP Blog guest columnist Gregg Evans here.)

    Later, an emerging scam known as JSSTripler/JustBeenPaid purportedly operated by former ASD pitchman Frederick Mann began to use the offshore processors — amid claims from JSS/JPB pitchmen that they not only were recruiting for JSS/JBP, but also managing both the JSS/JBP accounts of their sign-ups and the payment-processor accounts of the sign-ups.

    Because HYIP schemes proliferate in part through the willful blindness of promoters and serial con artists, a situation has evolved over the years in which fraudulent proceeds circulate between and among scams and their individual promoters. “Alan Chapman,” a Zeek pitchman, also was promoting JSS/JPB and a follow-up scam known as “ProfitClicking,” for instance. Serial huckster “Ken Russo” also promoted Zeek and JSS/JBP — and many more schemes, including ASD and Profitable Sunrise, which the SEC described last month as a scam that may have gathered tens of millions of dollars.

    But a new filing by Kenneth D. Bell, the Zeek receiver, suggests that the receivership may seek to foreclose any after-the-fact opportunities for offshore processors to duck their responsibilities to the receivership estate and for holders of the offshore accounts to benefit from Zeek after the SEC brought spectacular allegations of Ponzi- and pyramid fraud against Zeek in August 2012.

    Zeek, the SEC said last year, was a $600 million fraud scheme that used at least 15 foreign and domestic financial institutions.

    A forensic accounting has led Bell to believe that “both Payza and SolidTrustPay may have additional Receivership assets.”

    In a report to Senior U.S. District Judge Graham C. Mullen, Bell said he is working “to investigate and seize these funds.”

    And, Bell advised Mullen, “[t]o the extent these entities allowed affiliates to withdraw funds after receiving notice of the Receivership, the Receiver may seek reimbursement of indemnification for the funds from the payment service providers.”

    If Bell somehow is able to foreclose chicanery involving serial Ponzi pitchmen and the scamming insiders with offshore accounts, it could go a long way toward minimizing the spread of fraud schemes over the Internet.

    Bell’s April 30 filing also reveals that the receivership has recovered $291,000 from a “merchant services account reserve” that had been held by American Express for Rex Venture Group, Zeek’s parent company. At the same time, it reveals that Bell — to date — has recovered $36,000 from Zeek net winners in prelitigation settlements. That number may grow. The deadline to enter into negotiations for a prelitigation settlement is May 31.

    More than anything, though, Bell’s report to the court showcases the enormous problems created by HYIP schemes. Among the problems outlined in the filing:

    Potentially costly and time-consuming litigation disputes for all parties. Zeek operator Paul Burks is claiming privilege on certain matters. Some Zeek “winners” have filed motions that could slow down the refund process for Zeek victims at large.

    Taxes: Zeek appears to have misclassified certain employees as independent contractors, which has tax ramifications.

    Incomplete records. Because of poor records at Zeek, some members who received 1099 tax forms from the receivership received forms that showed earnings either higher or lower than actual earnings. The receivership has prepared amended 1099s for certain Zeek members.

    Possible disputes with vendors. Bell’s report noted that USHBB Inc. asserted it was owed $878,856 by Zeek. USHBB produced video promos for Zeek. In September 2012, the PP Blog reported that Zeek once listed USHBB executive OH Brown as an employee. Meanwhile, USHBB once produced videos for a collapsed MLM scheme known as Narc That Car.)

    Clawback litigation: In the absence of settlements, the receiver potentially could file actions that involve thousands of Zeek affiliates in possession of ill-gotten gains from the scheme.

    Read the receiver’s April 30 filing. (Our thanks to the ASD Updates Blog for providing the filing.)

    Visit the receivership website.

     

     

     

  • UPDATE: PP Blog Now Starting To Get Bizarre Spam Related To BannersBroker ‘Program’

    americaatrisk4UPDATED 7:06 P.M. ET (U.S.A.) The PP Blog today began to receive bizarre spam related to the purported BannersBroker “program,” a Ponzi-forum darling.

    Senders from separate IPs who deemed themselves “Banners Broker” transmitted spam at 5:27 p.m. (ET) and 5:29 p.m. today. (UPDATE: 7:06 P.M. Actually, the 5:27 spammer deemed himself/herself “Banners Broker” and the 5:29 spammer deemed himself/herself  “Banners Brokers.”)

    One of the spams appeared to make the assertion that the PP Blog was created specifically in response to the Banners Broker “program” and that the Blog is in cahoots with at least two other sites to make Banners Broker look bad. The same would-be spam, which appeared to originate in the United Kingdom, also appeared to advance an argument that individuals should not question the Banners Broker “program.”

    An earlier spam — one that appeared to originate in Poland with a different email address but largely the same user name and same URL to a website that appears to sell purported Banners Broker sales aids — took a potshot at a Blogger named Finch. (The later spam described in the paragraph above also took a potshot at Rod Cook, the “MLM Watchdog.“)

    The PP Blog’s first reference to Banners Broker was published on June 17, 2012, when the Blog reported that a site that claimed it sold “customers” to Zeek Rewards members also was pushing traffic to Banners Broker and JSS Tripler/JustBeenPaid, the bizarre, 730-percent-a-year “program” purportedly operated by Frederick Mann.

    Mann also was a pitchman for the AdSurfDaily Ponzi scheme. JSS/JBP, which later morphed into a “program” known as ProfitClicking, may have ties to the sovereign-citizens movement.

    In August 2012, the SEC called Zeek Rewards a $600 million Ponzi- and pyramid fraud. Zeek, JSS/JBP, ProfitClicking and Banners Broker all were promoted from the Ponzi boards and had members in common, which leads to questions about whether the schemes and their financial vendors came into possession of funds tainted by multiple fraud schemes.

    The commonality of the “programs” also leads to questions about whether satellite companies are developing “leads” programs and purported sales aids to benefit from securities-fraud schemes before they are detected.

    The spammer at 5:27 p.m. today asserted that he (or she) was sure companies such as Banners Broker “will fight back through the legal system and get [Blogs critical of such programs] shut down.”

    In July, less than a month before the collapse of Zeek, Zeek figure Robert Craddock sought to shut down the website of Zeek critic K. Chang. It became the “Most Important” story of the year on the PP Blog.

    Banners Broker uses at least two of the payment processors used by Zeek: Payza and SolidTrustPay.

     

     

     

  • Former Zeek Pitchman Who Also Pushed JSS/JBP Scam Reportedly Doubts He’ll Be Paid By ProfitClicking, A Follow-Up ‘Program’

    alanchapmanpcmmgFormer Zeek Rewards and JSSTripler/JustBeenPaid pitchman “Alan Chapman” reportedly now claims he hasn’t been paid by “ProfitClicking” for “at least 3 months,” according to a post quoting “Chapman” on the MoneyMakerGroup Ponzi forum.

    ProfitClicking is the absurd follow-up “program” to the bizarre JSS/JBP scam, a 730-percent-a-year “opportunity” purportedly operated by Frederick Mann. JSS/JBP may have had ties to the “sovereign citizens” movement. Like ProfitClicking, the JSS/JBP “program” made members affirm they were not with the “government.”

    On Aug. 17,  the SEC described Zeek as a $600 million Ponzi and pyramid scheme that was selling unregistered securities to sustain a massive fraud that duped members into believing it provided a legitimate return averaging 1.5 percent a day. Just a day earlier, JSS/JBP took a page from the Zeek playbook, asserting that it was not selling securities and members were not making an investment.

    After the SEC’s Zeek action, JSS/JBP morphed into ProfitClicking, amid reports of the sudden retirement of Mann, a former pitchman for the AdSurfDaily Ponzi scheme. On Sept. 5, the PP Blog received a menacing communication threatening a lawsuit over its coverage of JSS/JBP/ProfitClicking. The lawsuit threat was made after the Blog reported that ProfitClicking was disclaiming any responsibility on the part of itself or its affiliates for offering the “program.”

    Like Zeek, JSS/JBP/ProfitClicking was promoted on forums listed in U.S. federal court files as places from which Ponzi schemes are promoted. In the hours after the SEC action, the PP Blog began to receive spam for a “program” known as “Ultimate Power Profits.” A check of the MoneyMakerGroup Ponzi forum showed that Zeek peddler “mmgcjm” was the key pitchmen for Ultimate Power Profits.

    The connectivity of the various scams shows how banks and financial vendors can come into possession of funds tainted by fraud schemes. Meanwhile, the court-appointed receiver in the Zeek case said last month that he had “obtained information indicating that large sums of Receivership Assets may have been transferred by net winners to other entities in order to hide or shelter those assets.”

    “Chapman” was an apparent Diamond affiliate of Zeek. In June 2012 — apparently even as the SEC’s Zeek probe already was under way — a “Chapman” Blog known as “ZeekRewardsPays” asserted this (italics added):

    ZeekRewards Daily Profit Last 7 Days!
    June 11 2012 1.89 %
    JUNE 10 2012 0.88 %
    JUNE 09 2012 0.96 %
    JUNE 08 2012 0.92 %
    JUNE 07 2012 1.91 %
    JUNE 06 2012 2.00 %
    JUNE 05 2012 1.93 %

    Court filings by the SEC last week suggest its Zeek probe began in April 2012 and perhaps earlier. What’s not known is when Zeek learned it was under investigation. It is not unusual for law enforcement to maintain secrecy when a “program” hits its radar screens. Court filings from 2008 show that the U.S. Secret Service had infiltrated AdSurfDaily with undercover agents who corresponded with ASD promoters prior to any public announcement of a probe.

    At least one ASD member instructed an undercover agent not to call the “program” an investment, apparently based on the errant belief that wordplay designed to disguise ASD as an “advertising” program and not a program offering unregistered securities and unusually consistent returns at a preposterous rate of 1 percent a day somehow could insulate ASD from prosecution.

    On Aug. 1, 2008, the Secret Service began the process of seizing more than $80 million from ASD-related bank accounts, alleging that the “opportunity” was a massive online Ponzi scheme. ASD, Zeek, JSS/JBP and Profit Clicking planted the seed they provided returns that made Bernard Madoff look like a piker. Viewed on an annualized basis, the “programs” effectively were asserting they could outperform Madoff by a factor on the order of between 30 and 70 to one.

    The assertion by “Chapman” (as noted above) computed to an average daily return of 1.498 percent. On Aug. 17, the SEC said that Zeek operator Paul R. Burks “unilaterally and arbitrarily determines the daily dividend rate so that it averages approximately 1.5% per day, giving investors the false impression that the business is profitable.”

    Burks consented to a judgment on the same day the SEC brought the Zeek Ponzi action. The U.S. Secret Service — also on Aug. 17 — announced it was investigating Zeek. In 2008, the Secret Service brought Ponzi allegations against ASD’s 1-percent-a-day “program.” ASD operator Andy Bowdoin later admitted he was running a Ponzi scheme. Bowdoin was sentenced to 78 months in federal prison. He is 78 years old.

    Mann’s age is unknown. There have been reports he is in his eighties.

  • LETTER TO READERS: Our Choice For The Most Important PP Blog Post Of 2012

    Dear Readers,

    The PP Blog’s choice for the “Most Important” story to appear on the Blog in 2012 is this one, dated July 28: “Site Critical Of Zeek Goes Missing After HubPages Receives Trademark ‘Infringement’ Complaint Attributed To Rex Venture Group LLC — But North Carolina-Based Rex Not Listed As Trademark Owner; Florida Firm That IS Listed As Owner Says It Has ‘No Knowledge’ Of Complaint.”

    The story tells the bizarre tale of how purported Zeek “consultant” Robert Craddock, beginning on July 22, tried to gag K. Chang, a Zeek critic.

    Our reasoning for selecting the Craddock tale appears below . . .

    ** __________________________________ **

    recommendedreading1UPDATED 1:30 P.M. ET (U.S.A.) This Blog is well aware that some MLMers would have you believe that nothing that appears here is important. The “case” against the Blog normally involves ad hominem attacks, along with bids to change the subject or cloud issues. Some of the campaigns against the PP Blog have been almost comical, falling along lines such as these: ASD can’t be a Ponzi scheme because it rained on Tuesday. Your [sic] an idiot and looser [sic] !!!!!

    Other campaigns have been much more menacing.

    One of the least-appreciated aspects of the Zeek Rewards story is that Zeek launched after Bernard Madoff made the word “Ponzi” a part of the national (and international) consciousness. Setting aside Zeek’s epic legal problems, Zeek and its “defenders” have a PR problem from which they’ll never recover. In short, it is fatal. The reason that it’s fatal is that it creates a dynamic that is virtually unique to the MLM HYIP sphere: While the rest of the world rails against Ponzi schemes and Ponzi schemers, the MLM HYIP sphere defends them.

    But it gets stranger than that. Certain inhabitants of the HYIP sphere in effect are lobbying for the legalization of Ponzi schemes to make their lives more convenient. To this group, the answer to Ponzi schemes is even more Ponzi schemes. Their message is remarkably similar to the message of the gun lobby, which appears to be arguing that the answer to gun violence is even more guns — in strategic locations, of course, perhaps in educational institutions at the grade-school level through college. (And maybe at movie theaters and at the scene of rural house fires, in case first responders such as firefighters and EMTs encounter an ambush.)

    You’ve heard by now that the rural town of Webster, N.Y., turned into Israel last week, we’re sure.

    In fairness to the gun lobby, it must be pointed out that HYIP “defenders” who are lobbying for more Ponzi schemes even as the gun lobby lobbies for more guns have less legal standing than the gun lobby. Guns already are legal. Ponzi schemes are not.

    But, getting back to Zeek’s PR problem . . .

    Madoff was exposed in 2008 as a Ponzi schemer, a financial criminal of unprecedented hubris. Not only did Zeek debut after Madoff, it came after Scott Rothstein was exposed (in 2009) as a racketeer/Ponzi schemer — and after AdSurfDaily, a purported MLM “advertising” company, was exposed (in 2008 and 2009) as the largest online Ponzi scheme ever and was sued by its own members amid allegations of racketeering.

    For some Zeek promoters, this well-known fact set makes them vulnerable to charges they are nothing less than members of an organized mob of habitual criminals who thrive by choosing to be willfully blind.

    But, incredibly, it gets even stranger . . .

    Zeek had members in common with AdSurfDaily and, like AdSurfDaily, told members that a purported “advertising” function was central to its business model.  Meanwhile, Zeek became popular in North Carolina, after the infamous Black Diamond Ponzi caper was exposed in that very state. (Among other things, the Back Diamond fraud led to criminal charges being filed against a bank.)

    Along those lines, Zeek (in May) began to show signs that it was experiencing banking problems after it had become popular in a region known to have served up another colossal mess, this one in nearby South Carolina. (The South Carolina mess was known as the “3 Hebrew Boys” scheme. It resulted in the longest Ponzi scheme sentences in the history of the South Carolina federal courts and, like AdSurfDaily and Zeek, served up a heaping helping of the bizarre, including claims by “sovereign citizens” that prosecutors had no authority over them.)

    Moreover, the Zeek scheme for which some “defenders” continue to cheer featured recruitment commissions on two levels (like AdSurfDaily) and an “RPP” payout (like ASD’s 1-percent-a-day “rebates”). Finally, the Zeek scheme came to the fore after the U.S. Secret Service described ASD as a “criminal enterprise” and after the Attorney General of the United States made a special public appearance in Florida — fertile recruitment grounds for schemes such as Zeek and the stomping grounds of Madoff and Rothstein — to announce that the Justice Department was serious about putting people in jail for ravaging the U.S. economy with their Ponzi schemes.

    “Palm Beach is, in many respects, ground zero for the $65 billion Ponzi scheme perpetrated by Bernard Madoff — the largest investor fraud case in our nation’s history,” Eric Holder said on Jan. 8, 2010, in southern Florida. “Before the house of cards Madoff built collapsed in 2008, before he was sentenced to 150 years in prison last June, before he became a notorious criminal on the cover of newspapers around the world, he was one of your neighbors.

    “His former home sits just north of us,” Holder continued. “An 8,700-square-foot mansion that’s worth . . . well, we’ll know what its worth once the U.S. Marshals Service auctions it off and the proceeds are distributed to Madoff’s victims.”

    Holder’s words are best viewed as a warning against willful blindness: Neither victim nor perpetrator be. There is unqualified pain and misery for both.

    Despite Holder’s appearance in Florida — despite his reference to Madoff’s “house of cards” — AdSurfDaily promoters Todd Disner and Dwight Owen Schweitzer later sued the United States, claiming that its Ponzi case against ASD was a “house of cards.” Naturally they made this claim even as they were promoting Zeek.

    And from what region were they promoting Zeek? Why, Southern Florida, of course, the same region Holder visited in 2010 to throw down the gauntlet against Ponzi schemers and their enablers.

    Amid the historical circumstances cited above, Zeek Rewards began to encounter some heat from the media and from its own members. Some of the members did not understand why things at Zeek appeared to be so circuitous and why they were being asked to use payment processors such as AlertPay and SolidTrustPay that had been associated with fraud scheme after fraud scheme operating online, including ASD.

    What to do if you’re Zeek?

    Well, according to Florida resident Robert Craddock, a self-described Zeek consultant, you hire, well, Robert Craddock — and you use Robert Craddock to go after Zeek critics such as K. Chang.

    The Most Important Story Of 2012

    In the PP Blog’s view, the most important story to appear on the Blog in 2012 is this one, titled, “Site Critical Of Zeek Goes Missing After HubPages Receives Trademark ‘Infringement’ Complaint Attributed To Rex Venture Group LLC — But North Carolina-Based Rex Not Listed As Trademark Owner; Florida Firm That IS Listed As Owner Says It Has ‘No Knowledge’ Of Complaint.”

    The story details efforts in July by Craddock to have K. Chang’s Zeek “Hub” at HubPages removed from the Internet just weeks before the SEC accused Zeek of being a $600 million Ponzi- and pyramid fraud. By early estimates, the alleged Zeek fraud was about five times larger than ASD in pure dollar volume ($600 million compared to $120 million) and perhaps 20 times larger in terms of the membership base (2 million compared to 100,000).

    Incredibly, Craddock went after K. Chang after Deputy Attorney James Cole, speaking in Mexico, said that international fraud schemes have been known to “bring frivolous libel cases against individuals who expose their criminal activities.” And Cole also pointed out that fraudsters have a means of “exploit[ing] legitimate actors” and may rely on shell companies and offshore bank accounts to launder criminal proceeds.

    If ever a company exploited legitimate actors, it was Zeek. Kenneth D. Bell, the court-appointed receiver, says there were approximately 840,000 Zeek losers who funded the ill-gotten gains of 77,000 winners. And Bell also says he has “obtained information indicating that large sums of Receivership Assets may have been transferred by net winners to other entities in order to hide or shelter those assets.”

    There can be no doubt that some of those winners are longtime residents of the woeful valley of willful blindness. Not only do they “play” HYIP Ponzis for profit, they now publicly announce their intent to keep their winnings. Zeek has exposed the epicenter of willful blindness, the criminal underworld of the Internet. It is easy enough to view Craddock’s efforts as a means of institutionalizing willful blindness, first by seeking to chill speech and, second, by scrubbing the web of information that encourages readers to be discriminating so they won’t be duped by a Ponzi fraudster.

    Bizarrely, it appears as though someone inside of Zeek believed it prudent to hire Craddock to go after K. Chang. If that weren’t enough, only days later Zeek used its Blog to plant the seed that unnamed “North Carolina Credit Unions” were committing slander against Zeek.

    After the SEC brought the Zeek Ponzi complaint in August, Craddock quickly went in to fundraising mode. As incredible as it sounds, ASD’s Todd Disner — also of Zeek — was on the line with him.

    What Craddock did was deplorable. It was as though he slept through the past four years of Ponzi history, all the cases that showcase the markers of fraud schemes and all the government warnings to be cautious. (Nongovernment/quasigovernment entities such as FINRA also publish such warnings, like this one on HYIP fraud schemes outlined by the PP Blog.)

    The FINRA warning was published in 2010, prior to Zeek but after the Legisi, Pathway To Prosperity and ASD schemes were exposed. Legisi operator Gregory McKnight potentially faces 15 years in federal prison. He was charged both civilly (SEC) and criminally (U.S. Secret Service) — and Legisi pitchmen Matthew John Gagnon also was charged civilly and criminally by the same agencies. The SEC called Gagnon a “threat to the investing public.”

    Any number of Zeek promoters pose a similar threat. They are at least equally willfully blind.

    It is clear that some Zeek promoters also were promoting JSSTripler/JustBeenPaid, the debacle-in-waiting purportedly organized by Frederick Mann, a former ASD promoter. JSS/JBP has morphed into “ProfitClicking” amid reports of the “retirement” of Mann. Now, ProfitClicking “defenders” are threatening lawsuits against critics.

    Naturally the stories advanced by ProfitClicking “defenders” are being improved by “defenders” of other obvious fraud schemes such as BannersBroker. A BannersBroker “defender” is over at RealScam.com — an antiscam site — suggesting that RealScam is a terrorist organization.

    My God.

    These claims are being made just days after Zeek figure Robert Craddock suggested he had contacts in law enforcement who were going to charge Blogger Troy Dooly with cyber harassment.

    It wouldn’t sell as fiction.

    Craddock’s bid to gag K. Chang easily was the most important story on the PP Blog in 2012. It’s the one that signaled that things are destined only to get crazier in MLM La-La Land and that the threat to U.S. national security only will grow.

     

     

  • UPDATES: (1) Cyberstalker Resurfaces To Claim The Zeek ‘Defense Fund Is Snowballing’ And To Accuse PP Blog And Supporters Of Communism; (2) Blog Receives Separate Email That Plants Seed It Is A ‘Mercenary/Assassin For The SEC & NCAG’; (3) A Series Of Death Threats

    A cyberstalker who has used more than a dozen usernames and bogus email addresses to send harassing communications to the PP Blog resurfaced today after an absence of days.

    The stalker appears to be sending unwanted communications from a series of IPs in the region of Columbus, Ohio.

    Today’s would-be posting bid was targeted at a Sept. 26 story thread titled “SEC Says Zeek Probe ‘Is Continuing’; Agency Updates Information Page.”

    Here is what the would-be poster claimed (italics added):

    Not even a road bump in the affiliates vs the SEC. The amount of support is snowballing. The defense fund is snowballing, and you guys will look so f’n stupid for your communist thought process. down with this stupid website and it’s little communist followers.

    The communication was received at 11:37 a.m. EDT.

    Earlier, at 10:19 a.m., the PP Blog received a strange Zeek-related email that appears to quote an individual dubbed “Steel.”

    Among the claims attributed to “Steel” was this one (italics added):

    In fact, your [sic] creating this un-substantiated linkage between ASD & Zeek, makes you look more like a mercenary/assassin for the SEC & [North Carolina Attorney General] than an impartial observer and reporter.

    These words appeared below the section of the email attributed to “Steel” (italics added):

    Individually We Are Weak – Together We Are Strong[.] We Can Win This Battle & We Will Win The Zeek War.

    The PP Blog is reporting tonight that, on Aug. 6, it received a disturbing communication that “mercenaries” needed to be “[sent] out” to “take out those corrupt bankers, USG politicians, agents, judges and attorney’s that cause us all harm and demages [sic].”

    That communication went on to identify three prominent U.S. politicians — all of whom no longer are in office — and questioned why “[Prominent Politician A’s Name Deleted by PP Blog] and both [Prominent Politician B and C’s Names deleted by PP Blog] [are] still alive and running around?”

    The PP Blog reported the disturbing email to a U.S. law-enforcement agency. The Blog is declining to identify the office once held by the prominent politicians.

    “JUST LOOK AT the insane NAZI driven USA,” the email read in part.

    On Aug. 29, the PP Blog received a death threat targeted at another individual. The Blog reported that communication, as well.

    On Aug. 30, the PP Blog itself received a death threat. Here is part of that message, which incongruously ended with a smilie (italics added):

    . . . we don’t need to worry because we will pay Mr Patrick Pretty a visit. He is already under the sniper’s cross-hair and he will go down. :)

    The Aug. 30 death threat appears to be related to the Blog’s coverage of “Profit Clicking,” the “program” that evolved from JSS Tripler/JustBeenPaid.

    ProfitClicking/JSS/JBP, AdSurfDaily and Zeek are known to have had members in common.