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Tag: Roman Novak

BULLETIN: SEC Moves To Block Virginia Man From Intervening In Profitable Sunrise Case; Appointment Of Receiver Will Depend On Success Of Efforts To Repatriate Assets To United States

BULLETIN: The SEC has asked a federal judge not to permit a Virginia man to intervene in the Profitable Sunrise HYIP fraud case, saying that the man’s self-filed pleading “would open the floodgates for other investors to file similar motions.”

In late April, James Paul Schilling of Mechanicsville effectively asked U.S. District Judge Thomas W. Thrash Jr. of the Northern District of Georgia to unfreeze $57,300 sent to Profitable Sunrise via wire in a series of transfers in January and February. In early April, the SEC described Profitable Sunrise as a pyramid scheme that may have collected tens of millions of dollars while operating through a “mail drop” in England and using other companies to gather the funds.

Money from the scheme was directed at entities in several countries, the SEC said.

Profitable Sunrise was targeted at U.S. residents, the SEC said in April. One of the claimed “plans” of Profitable Sunrise was bizarrely dubbed the “Long Haul” and purported to pay 2.7 percent a day.

“In this case, permitting S[c]hilling to intervene and retrieve money commingled with funds deposited by thousands of other investors would open the floodgates for other investors to file similar motions, which would create an unnecessary strain on this Court’s resources thereby delaying the proceedings and, ultimately, any distribution of funds to investors,” the SEC argued.

The agency said in its opposition to Schilling’s motion that it was contemplating asking the court to appoint a receiver, but any decision to ask for the appointment would depend on whether the SEC’s “efforts to repatriate funds are successful.

“A Receiver could best administer a process to return funds to defrauded investors pursuant to a plan of distribution approved by the Court,” the SEC said.

In April, the SEC said that “Hungarian law enforcement authorities” had frozen an account holding $11.3 million connected to the scheme as part of an “investigation of suspected money laundering.”

Whether that money will be returned to the United States is unclear. Also unclear is whether Profitable Sunrise funds that may be held in other countries ever will be returned. Among other things, the Profitable Sunrise case demonstrates the dangers of doing business with murky enterprises, regardless of where an investor lives. Investors by the thousands could be left holding the bag.

Profitable Sunrise was promoted on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. Although promoters claimed “Roman Novak” was running Profitable Sunrise, it remains unclear whether he actually exists. The scheme spread through an MLM-style network of promoters hoping to glean commissions.

The SEC is asking Thrash to summarily deny Schilling’s motion or “in the alternative, order that Shilling support the motion with admissible evidence and provide citation to the legal authorities that he claims support his motion.”

Despite the murkiness of Profitable Sunrise, former pitchman John Schepcoff is telling YouTube viewers that he’s identified another venture that is “1,000 percent better” than Profitable Sunrise and Zeek Rewards. In August, the SEC described Zeek as a $600 million Ponzi and pyramid scheme, saying it duped people into believing a return of about 1.5 percent a day was legitimate.

The Profitable Sunrise “Long Haul” plan offered about double the purported returns of Zeek.

NOTE: Our thanks to the ASD Updates Blog.

May 13, 2013
Pitchman Says Hong Kong-Based ‘Program’ Is ‘1,000 Percent Better’ Than Profitable Sunrise And Zeek Rewards

John Schepcoff says he potentially lost more than $193,000 in Profitable Sunrise but that a new “program” is “1,000 percent” better.

In a bizarre and disturbing video playing on YouTube, a former Profitable Sunrise pitchman claims a new “program” he joined is operating from Hong Kong and is purveyed by an unidentified “doctor.”

The purported opportunity is “1,000 percent better” than Profitable Sunrise or Zeek Rewards, according to the video.

News of the video first was reported on the RealScam.com antiscam forum.

Pitchman John Schepcoff did not identify the new “program” in the 14:32 video. But he described it as invitation-only. Zeek made similar claims, according to the SEC’s August 2012 Ponzi- and pyramid action against the North Carolina-based firm and accused operator Paul. R. Burks. The SEC described Zeek as a $600 million fraud scheme.

In April 2013, the agency described Profitable Sunrise as a pyramid scheme that may have gathered tens of millions of dollars, in part through using financial conduits in the Czech Republic, Australia, Panama and China.

“There’s a litttle bit of a [learning] curve, like also Zeek Rewards in a way, but he made it 1,000 percent better,” Schepcoff said of the new Hong Kong “program.”

Earlier in the video, Schepcoff claimed the new program was “1,000 percent better” than Profitable Sunrise.

Schepcoff put $8,225 into the new program, he claimed in the video. He further claimed he’d potentially lost more than $193,500 in Profitable Sunrise but is holding out hope that “Roman Novak” somehow will resurrect the “program.”

It is unclear whether “Roman Novak” actually exists, according to court filings.

Among other things, Schepcoff claims in the video that Profitable Sunrise participants need to accept personal responsibility for their losses in the “program” and should not blame individuals such as himself or Profitable Sunrise pitchwoman Nanci Jo Frazer.

“Stop blaming people, and say, ‘I am responsible,’” Schepcoff coached. Other people who should not be blamed include “Roman Novak,” he noted.

And Schepcoff claimed he is “so happy” and “really, really happy” he got into the new program. Smiles, however, are absent from his face throughout the video.

With respect to Profitable Sunrise, Schepcoff described the “program’s” scheme that purportedly permitted “compound[ing]” at a daily interest rate of between 2.15 percent and 2.7 percent as a “no-brainer” for a coach and mentor in finance such as himself.

“And I teach people about the . . . way how things are done,” he said.

When he heard about Profitable Sunrise in December 2012, Schepcoff said, “I basically ran to my bank, and I couldn’t get the money in fast enough.”

Just four months earlier — in August 2012 — the SEC said Zeek duped people into believing they were receiving a legitimate return of about 1.5 percent a day. The Profitable Sunrise “Long Haul” plan purported almost to double Zeek’s purported daily payout.

“I kept putting wire transfers after wire [transfer]” into Profitable Sunrise,” Schepcoff said, suggesting he took money out of retirement accounts to do so.

“Greed” that became like a “cancer” controlled his behavior in Profitable Sunrise, he said. Schepcoff did not explain what was driving his behavior in sending funds to the purported Hong Kong “program” purportedly purveyed by the “doctor.”

The new program apparently relies on a secret strategy designed to prevent links from being shared publicly and is “amazing” in “what it does,” he said. “There’s people — I can tell you this — that are bringing out only in five months over [$]40,000.”

One person, according Schepcoff, told him that he’d taken out “over [$]200,000” from the new program in a single day.

Some HYIP “programs” are pitched by “sovereign citizens” and political extremists who divine a construction by which participants are “free” to spend their money as they see fit and that specific word combinations insulate purveyors from any liability if a “program” collapses or becomes the subject of an action by law enforcement.

HYIP scams typically are promoted on social-media sites such as YouTube, Twitter and Facebook, FINRA said in a 2010 warning.

May 12, 2013
Virginia Man Asks For The Return Of More Than $57,000 Wired To Profitable Sunrise In Series Of Transactions
UPDATED 8:52 P.M. EDT (U.S.A.) A Virginia man has asked for the return of $57,300 wired to Profitable Sunrise in a series of transfers from Bank of America between Jan. 17 and Feb 28. It was unclear from the filing whether the man was a simple investor in Profitable Sunrise, an individual who also was promoting the scheme for commissions or an interested party of a different sort.

The request was made in the form of a self-filed petition to U.S. District Judge Thomas W. Thrash Jr. in Atlanta. Thrash is overseeing the SEC’s April 4 fraud action against Profitable Sunrise.

Two of the transfers appeared to have occurred on Feb. 28. Just a day earlier, the state of North Carolina filed a cease-and-desist order against the Profitable Sunrise “program” and purported operators Roman and Radoslav Novak. One of the Feb. 28 transactions was for $18,000 and marked the largest sum among the series of transfers, based on the Virginia’s man’s motion for the court to release the funds.

The document did not say which of the five Profitable Sunrise “plans” to which the money was directed. Although the SEC obtained an asset freeze after accusing Profitable Sunrise of fraud last month, it is far from clear whether Thrash can order the money returned consistent with the man’s wishes. No receiver has been appointed in the Profitable Sunrise case, and the investigations of the purported “opportunity” by the SEC and other regulators continue.

One of the five Profitable Sunrise “plans” was known as the “Long Haul,” which had a purported deadline of March 1 for accepting deposits and purported to pay an absurd 2.7 percent daily.

Based on the man’s filing, it appears as though all of the transfers were directed at entities named relief defendants in the SEC’s action, including Melland Company SRO, Color Shock SRO and Fortuna-K SRO. These Czech entities apparently were receiving money for Profitable Sunrise, which operated through a British entity known as Inter Reef LTD and was conducting an offering fraud through a “mail drop,” according to the SEC’s Profitable Sunrise complaint.

Like other HYIPs, Profitable Sunrise was flogged online, a situation that potentially puts pitchmen in legal jeopardy. Profitable Sunrise has been accused of selling unregistered securities as investment contracts. The SEC said the Profitable Sunrise referral program operated as a “pyramid scheme” and raised questions about whether the purported Novak brothers actually exist.

Here are the amounts and dates of the wire transfers, according to the man’s filing:
- $1,500 on Jan. 17.
- $6,300 on Feb. 1. (Two transactions; one for $1,800 and another for $4,500.)
- $9,000 on Feb. 12. (Two transactions; one for $3,000 and another for $6,000.)
- $8,500 on Feb. 15. (Two transactions; one for $1,000 and another for $7,500.)
- $10,000 on Feb. 20.
- $18,000 on Feb. 28.
- $4,000 on Feb. 28.
Profitable Sunrise may have gathered tens of millions of dollars, the SEC said last month.
May 1, 2013
WTOL Introduces Middle America To The Profitable Sunrise HYIP Scheme; Graphic Shows 3-Tiered Affiliate Program On Top Of Absurd Payout

From the WTOL report.

During its 11 p.m. newscast yesterday, WTOL (CBS/Toledo) aired a report titled “Holy Rip-Off” about the alleged Profitable Sunrise HYIP scam. The report, which began with images of Ponzi schemer Bernard Madoff playing in the background, focused on alleged Profitable Sunrise pitchwoman Nanci Jo Frazer of Bryan, Ohio. Frazer and her NJF Global Group are referenced in Profitable Sunrise-related regulatory actions that brought the alleged scam to a halt, but have not been charged.

It’s easy to imagine that many people in WTOL’s audience will be surprised to learn that groups of individuals were pushing Profitable Sunrise and its absurd purported daily rates of return with a straight face. Among the Profitable Sunrise offerings was the bizarrely named “Long Haul” plan that promised interest of 2.7 percent a day that could be compounded. That Profitable Sunrise also traded on faith may bring a special blend of horror to the station’s Middle America viewers.

Still, it won’t be the maximum horror. Indeed, the SEC has alleged that Profitable Sunrise pitchmen may not even have known the identity of the person or persons running the “program” from a “mail drop” in England.

Indeed, a situation has evolved in which self-identified Christians apparently were targeting other Christians with promises of daily payouts that would make Madoff gag — and from all indications were doing so without even knowing for whom they were working as the offer spread virally over the Internet.

Whether purported Profitable Sunrise operator “Roman Novak” even exists still isn’t known.

Then, of course, there is the question about the final destination of purported tens of millions of dollars directed at the “program,” which was pitched in part from well-known forums referenced in U.S. court filings as places from which massive Ponzi and fraud schemes are promoted.

Within hours of an action brought by North Carolina against Profitable Sunrise weeks ago, a poster on the MoneyMakerGroup Ponzi forum said this:

“lol @ NC officials.” (See Comments thread in this PP Blog March 1 story.)

As the story has continued to unfold, an element or elements within NJF Global Group appears to be trying to blame critics for the demise of the “program,” as though the 2.7-percent-a-day “Long Haul” and four other absurd plans were entirely rational and didn’t warrant any scrutiny at all. This is occurring against the backdrop of major actions brought against other HYIP “programs” by the U.S. government in recent years, including Zeek Rewards last year. Zeek allegedly planted the seed it paid an average of 1.5 percent a day, about half of the purported return of the Profitable Sunrise “Long Haul” plan.

One of the issues posed by Profitable Sunrise is the issue of willful blindness among promoters. If Zeek was a scam at 1.5 percent a day, for instance, how could Profitable Sunrise not be one with “plans” that dwarfed the returns of Zeek?

It is known that Profitable Sunrise had promoters in common with Zeek. Some of the promotional ties among various HYIP programs date back at least to the AdSurfDaily 1-percent-a-day scheme in 2008. Like Profitable Sunrise, ASD also traded on religion.

As the screen shot (above) from the WTOL report shows, Profitable Sunrise offered a three-tiered, MLM-style referral “program” on top of the absurd interest rates. ASD President Andy Bowdoin is in federal prison for his 2008 scam, which offered a two-tiered referral program on top of an absurd 1-percent-a-day interest rate.

When the U.S. Secret Service exposed the ASD scam, Bowdoin compared the agency to “Satan” and the raid on ASD’s Florida headquarters to the 9/11 terrorist attacks. Earlier — prior to the August 2008 raid — he described himself as a Christian “money magnet” and encouraged prospects to send him tens of thousands of dollars at a time.

Watch WTOL introduce Profitable Sunrise and the early fallout to its audience . . .

ToledoNewsNow.com: News, Weather

Apr 26, 2013
UPDATE: North Carolina Says Profitable Sunrise Investors Have Been Targeted In ‘Reload Scams’ Like Zeek Rewards Investors Before Them

From a warning by North Carolina that Profitable Sunrise investors are being targeted in reload scams.

UPDATED 11:28 A.M. EDT (U.S.A.) The Securities Division of North Carolina Secretary of State Elaine F. Marshall has issued a warning that Profitable Sunrise investors are being targeted in “reload scams.”

North Carolina issued a similar warning in August 2012, saying then that members of the Zeek Rewards “program” — an alleged $600 million Ponzi- and pyramid scheme operating online — also were being targeted in reload scams.

From a statement by Marshall’s office (italics added):

The NC Securities Division has learned that Profitable Sunrise investors are being contacted with promises of help in getting their money back for them. The Securities Division is issuing this alert to warn investors that such promises may be yet another attempt to scam them again through a “reload scam”.

Reload scams hit consumers when they’re down, offering to help them make back money they lost to a previous scam or bad business decision. These scams have been popular for years with telemarketing fraud rings but can also follow other types of fraud, including investment fraud.

Such reload scams were aimed at victims of the Zeek Rewards Ponzi scheme last year. Reload scammers used social media sites and online news releases to tout opportunities to help investors replace the income they were receiving from Zeek Rewards. Similar opportunities are being touted in the case involving Profitable Sunrise. Investors are warned to stay away from such “opportunities”.

On Feb. 27, North Carolina issued a cease-and-desist order against the Profitable Sunrise “program” and purported operators Roman Novak and Radoslav Novak. Profitable Sunrise operated through a British entity known as Inter Reef LTD.

At least 35 U.S. states or provinces in Canada went on to issue Investor Alerts or cease-and-desist orders against Profitable Sunrise. The SEC filed an action on April 4, alleging that Profitable Sunrise was an online pyramid scheme that may have gathered tens of millions of dollars.

Promoters of Profitable Sunrise may have pushed the program without even knowing for whom they were working, the SEC said.

On April 1, the PP Blog observed an online pitch for an entity that appeared to be using the name and address of a U.S. government agency while promising “to recover” funds lost through Profitable Sunrise. The fake agency claimed it could recover losses for a sum of less than $50 and encouraged Profitable Sunrise members to send money to purported accounts at the Liberty Reserve and Solid Trust Pay payment processors.

Profitable Sunrise members also have been targeted by boat-sharks hoping to glean commissions for other HYIP “programs” and purported MLM “opportunities.”

On March 31 — Easter Sunday — the PP Blog reported that a Facebook pitch aimed at Profitable Sunrise members sought to recruit them into a “program” known as TelexFree.

A video for TelexFree claimed members could purchase an income by sending the “program” specific sums of money.

The TelexFree pitch was similar to pitches for the infamous World Marketing Direct Selling (WMDS) and OneUniverseOnline (1UOL) pyramid schemes, which were exposed in 2005 and operated by James Bunchan and Seng Tan. Those scams resulted in federal prison sentences for both Bunchan and Tan and also sparked follow-up probes by the government because a federal prosecutor and witnesses were subjected to death threats by Bunchan.

Like Profitable Sunrise, the WMDS and 1UOL scams traded on references to religion. And like TelexFree and Profitable Sunrise, WMDS and 1UOL prospects were told they could purchase an income.

WMDS and 1UOL members — like Profitable Sunrise members — also may not have been sure of who they were working for. Here is a snippet from an appeals-court ruling upholding the 20-year-prison sentence of Tan (italics added):

“A high-school graduate, [Christian] Rochon became president (in name only, though) for one reason, and one reason only: Bunchan wanted an ‘American face’ for his companies, and his neighbor Rochon (a Caucasian of Canadian decent) apparently fit the bill,” the footnote reads. “And after renting Rochon a suit jacket and taking him to a professional photographer, Bunchan had Rochon’s photo plastered all over the companies’ promotional pamphlets.”

Tan told WMDS and 1UOL members that she’d been sent by the “Gods” to make them millionaires.

Also see April 16 PP Blog story: Idaho Says Profitable Sunrise Pitchmen May Have Exposure ‘For Soliciting Other Investors’

Apr 20, 2013
Idaho Says Profitable Sunrise Pitchmen May Have Exposure ‘For Soliciting Other Investors’

The state of Idaho says the Profitable Sunrise “program” used investors in the state to recruit other investors.

UPDATED 9:44 A.M. EDT (U.S.A.) Add Idaho to the list of U.S. states and provinces in Canada that have issued Investor Alerts or cease-and-desist orders against the Profitable Sunrise HYIP “program.”

And because Profitable Sunrise also was in the business of recruiting pitchmen to sell unregistered securities in addition to offering preposterous returns, Idaho’s Department of Finance noted that the pitchmen could have exposure.

“Those investors who receive compensation for soliciting other investors may themselves be subject to the licensing and anti-fraud provisions of state and federal securities laws,” said Gavin Gee, director of the Finance Department.

The unofficial tally of U.S. states and provinces on Canada taking action against Profitable Sunrise now stands at 35. The SEC also has taken action, including a notice that it had arranged depositions. The court docket in the SEC case suggests the agency had entered at least 11 evidence exhibits as of April 15.

Purported Profitable Sunrise operator “Roman Novak” was a no-show at a federal hearing yesterday in Atlanta.

Regulatory filings in Colorado say that Profitable Sunrise was pitched in part through classified-advertising sites.

One ad for the “program” in South Dakota claimed this: “Finally we have the bomb.”

In court filings on April 4, the SEC said Profitable Sunrise pitchmen may have pushed the “program” without even knowing for whom they were working.

“Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places,” the SEC alleged.

Tens of millions of dollars may have been directed to Profitable Sunrise, the SEC said.

Apr 16, 2013
Joe Borg Of Alabama Securities Commission Tells WSFA That Profitable Sunrise Worked Because People ‘Kind Of Glossed Over The Mathematics’

Joe Borg of the Alabama Securities Commission. From: WSFA news report.

EDITOR’S NOTE: Alabama was one of the first U.S. states to take action against the Profitable Sunrise HYIP “program,” issuing both an Investor Alert and a cease-and-desist order last month. The C&D lists two alleged “agents” of Profitable Sunrise, demonstrating that a “program” can create problems for pitchmen, perhaps even as the “program” operators make a getaway or disappear into the darkest corners of the Internet.

Profitable Sunrise had at least five purported investment plans, including one dubbed the “Long Haul” that promised a payout of 2.7 percent a day.

Whether the bizarrely named “Long Haul” plan was a deliberate taunt at regulators and possibly even the pitchmen who helped the scheme gain a head of steam remains unclear.

Listed as agents in the Alabama order were Melton McClanahan and Adam York. “An investigation of the company’s actions revealed that the men allegedly promoted at least five different ‘investment plans’ through a website used to promote Profitable Sunrise investment program and disseminate information to potential investors regarding the company’s various investment opportunities,” the Alabama Securities Commission said in the order.

Also listed in the order were purported Profitable Sunrise operators Roman Novak and Radoslav Novak. In a complaint last week, the SEC said that “Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places.”

____________________________________

Joe Borg of the Alabama Securities Commission (ASC) has dealt with massive fraud schemes that traded on faith, including the Greater Ministries International Church caper in the 1990s that led to criminal convictions against five individuals.

Back in 1999, ASC and the Ohio Division of Securities filed a joint complaint in federal court in Florida to shut GMI down. The purported “opportunity” took in more than $550 million by touting “divinely-inspired investments in the foreign currency market and gold, silver and diamond mines in Africa and the Caribbean,” ASC said at the time.

Now, Borg and other state and provincial regulators are tacking the Profitable Sunrise scheme, which traded on faith and promised absurd returns.

“I think because they used a per-day percentage, people kind of glossed over the mathematics,” Borg told WSFA.

WSFA.com: News Weather and Sports for Montgomery, AL.

Apr 11, 2013
URGENT >> BULLETIN >> MOVING: SEC Files Complaint Against Profitable Sunrise; Purported ‘Opportunity’ Called An International ‘Pyramid Scheme’

URGENT >> BULLETIN >> MOVING: (17th update 4:02 p.m.) The SEC has filed a complaint against the ProfitableSunrise HYIP “program” in federal court in Atlanta. The story first was reported by CourthouseNewsService this morning.

At the same time, the PP Blog has learned that the agency applied for an emergency asset freeze, explaining that Profitable Sunrise was using a “mail drop” in England and that “Hungarian law enforcement authorities” had had frozen an account holding $11.3 million connected to the scheme as part of an “investigation of suspected money laundering.” U.S. District Judge Thomas W. Thrash Jr. granted the freeze, which applies to multiple bank accounts.

The Profitable Sunrise “referral program” operated as a “pyramid scheme,” the SEC said in its filings. Moreover, the SEC charged, Profitable Sunrise was conducting an “offering fraud” targeted at U.S. citizens and selling unregistered securities.

And people pushing the “program” for commissions may not even know who they’re working for, the SEC said.

“Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places,” the SEC alleged.

The complaint names Inter Reef Ltd. (DBA Profitable Sunrise) as defendants. Four relief defendants also are named:

Melland Company SRO, Color Shock SRO, Solutions Company SRO, and Fortuna-K SRO.

Absent from the list of defendants are both “Roman Novak” and “Radoslav Novak.” Although many Profitable Sunrise pitchmen have claimed that “Roman Novak” operates the company and that “Roman’s” brother “Radoslav” is its attorney, that information has not been confirmed.

“There is more than a slight possibility, as with many offering frauds, that the people described in the website, including the Novak brothers, do not exist,” the SEC said.

InterReef’s registered agent is based in Seychelles, an island chain in the western Indian Ocean, the SEC said.

“Tens of thousands of investors” may have invested “at least tens of millions of dollars in Profitable Sunrise,” the SEC said.

At least 34 U.S. states and provinces in Canada have issued Investor Alerts or cease-and-desist orders against Profitable Sunrise.

Assertions online that Profitable Sunrise “generates profits by making loans to businesses at higher rates” are “false,” the SEC charged.

The scheme spread in part through “social media” and “numerous promoters in the United States,” the SEC said in its complaint.

Incongruities dotted Profitable Sunrise, the SEC alleged.

Although Profitable Sunrise claimed it had been operating for six years, “the United Kingdom Companies House reports that Inter Reef has been in existence for only 19 months,” the SEC alleged.

Meanwhile, the SEC said, a YouTube promo for Profitable Sunrise positioned the “opportunity” as a “ministry” and included a discussion of why Profitable Sunrise “is not a Ponzi or pyramid scheme.”

From the SEC complaint filed in federal court in Atlanta April 4.

From the SEC complaint.

See filings courtesy of the ASDUpdates Blog.

Apr 5, 2013
Profitable Sunrise Filed ‘No Answer Or Other Responsive Document,’ Colorado Securities Officials Say; HYIP Scheme Was Pitched On Classified-Ad Sites, Research Shows

Caption from Colorado’s Final Cease and Desist Order dated April 2, 2013, against Profitable Sunrise

Profitable Sunrise had come under investigation in Colorado at least by March 8 and was officially notified March 11 that the state suspected it was breaking securities laws, the state Securities Board says in filings this week.

Colorado scheduled a hearing for March 25 after learning that Profitable Sunrise also was under investigation in North Carolina, but the firm filed “no answer or other responsive document,” the Securities Board said.

In short, the filings suggest that Profitable Sunrise did not even ask for more time to respond to the state’s allegations that it had reached out from England to sell unregistered securities unlawfully to residents of Colorado.

And, according to the filings, no answer was received even though ProfitableSunrise claimed on its website that “RADOSLAV [Novak] is identified as ROMAN’s brother, as well as the attorney and the person responsible for marketing PROFITABLE SUNRISE.”

Roman Novak, Profitable Sunrise members claim, was the operator of the scheme.

In a series of devastating filings, the state revealed that at least three Colorado investors sent money via wire to Profitable Sunrise in February. All of the transactions were for the purported Profitable Sunrise “Regular Plan,” which required “a minimum of $500” and offered “an interest rate of 1.8% per business day,” the state alleged.

Profitable Sunrise offered five plans, including the bizarrely named “Long Haul” that purported to pay 2.7 percent a day with a purported Easter payout that has not materialized

Two of the “Regular Plan” transactions in Colorado occurred on Feb. 6. Another occurred on Feb. 8, according to the filings. The senders of the funds are identified in the filings only by their initials.

The Profitable Sunrise website has been offline at least since March 14.

“Profitable Sunrise is running a massive, international scheme, based in England, which takes advantage of religious affinity to lure investors into sending them money,” Colorado Securities Commissioner Fred Joseph said. “We encourage anyone who dealt with this organization to contact the Division of Securities.”

And, Joseph said in a news release, Profitable Sunrise is an “Internet scam” and the subject of crackdowns by multiple states. (See list here.)

Colorado’s filings allege that the scheme was spread at least in part through promos placed on classified-advertising sites.

Among the exhibits investigators viewed were “Printouts of online solicitations at []denver.backpage.com.” Precisely who made the solicitations in Colorado was not revealed.

One Denver ad viewed by the PP Blog made this claim: “Changing lives together: We Believe in a Better Living Every Day. As a Non Profit Christian Community, We put our Resources to Work to Rebuild the American Dream, One Day at a Time!”

Elsewhere in the ad, this claim was made (italics added):

Our Invited Members Save for a New CAR, Pay College Tuition, or Donate to their favorite Non-Profit, Charity, or Church!
Example 1: Invest $200 Returns $1356.70in 90 days, Returns: $7439.69 in 170 days
Example 2: Invest $500 Returns $3391.75in 90 days, Returns: $18599.22 in 170 days
Example 3: Invest $1000 Returns $6783.50in 90 days, Returns: $37198.44 in 170 days

A specific URL for a free Blogspot Blog (wealthwithchrystal.blogspot) that appeared in the Denver ad viewed by the PP Blog also appears in ads in many other American cities, including New York, Los Angeles, Chicago, Boston, Atlanta, Miami, Fort Lauderdale, Houston, Dallas, Las Vegas and many more.

Visitors were encouraged to click on a link in the ads “To see my payment Proofs!!!”

View the Colorado filings.

Apr 4, 2013
URGENT >> BULLETIN >> MOVING: CONSOB, Italian Securities Regulator, Takes Action Against Alleged Profitable Sunrise Promoter

URGENT >> BULLETIN >> MOVING: The Italian securities regulator CONSOB has filed a suspension order that names an alleged promoter of Profitable Sunrise, amid allegations that Profitable Sunrise is an investment program.

The agency said it observed pitches for ProfitableSunrise on a WordPress Blog under the control of “Daniele Verzari, who presents himself to users of the website as the ‘founder’ of the Vdproject Italy team.”

Verzari, according to CONSOB, now is banned from promoting Profitable Sunrise and programs known as “Vityazi” and “Bestforinvest.” In a separate order, the agency said Bestforinvest operated at the domain bestforinvest.org.

Promos for Bestforinvest were “carried out in the absence of the prescribed authorizations,” CONSOB said.

In the past, CONSOB has acted against promoters of HYIP schemes such as Club Asteria and JSSTripler/JustBeenPaid.

Profitable Sunrise had at least five investment programs, according to Investor Alerts or cease-and-desist orders filed by securities regulators in the United States. One of the purported “plans” was known as the “Long Haul,” which purported to pay interest of 2.7 percent a day. Payouts from the bizarrely named “Long Haul” plan were touted as an “Easter Gift” and were due yesterday.

Profitable Sunrise members are complaining about not getting paid. The “opportunity’s” website has been offline for nearly three weeks.

Both the United Kingdrom and Zew Zealand have issued alerts about Profitable Sunrise. So have at at least 34 state and provincial regulators in the United States and Canada.

Here is the text of the April 2 CONSOB order, as presented in English on the agency’s website:

Under the terms of Art. 101, section 4, lett. b), of the Consolidated Law on Finance, Consob has suspended, for a period of 90 days, the advertising activity relating to offering to the public the investment programmes entitled Vityazi, Profitable Sunrise and Bestforinvest carried out, through the website www.vdprojectitaly.wordpress.com by Daniele Verzari, who presents himself to users of the website as the “founder” of the Vdproject Italy team (Resolution No. 18510 of 27 March 2013).

In relation to the three investment programmes, on the basis of the descriptions provided on the website www.vdprojectitaly.wordpress.com and, in relation to the programmes Profitable Sunrise and Bestforinvest, on the basis of the descriptions on the “official” websites, there seem to be the characteristics of an investment of a financial nature, the notion of which implies the presence together of the three elements: (i) an investment of capital; (ii) an expectation of a return of a financial nature; (iii) the assumption of a risk associated with the investment of capital. Indeed, all three investment programmes require investment of an initial capital of an indeterminate amount, with the exception of the programme entitled Bestforinvest which provides for a minimum and maximum investible capital of between 100 and 9,000 US dollars.

The activity carried out through the website www.vdprojectitaly.wordpress.com leads to the well-grounded suspicion that the advertising activity performed in relation to the public offering of financial products breaches Art. 101, section 2, of the Consolidated Law on Finance which states that “before publication of the prospectus it is forbidden to make any advertising announcement regarding the public offering of financial products other than community financial instruments”, and that the said activity is still being performed. Hence the urgency of the measure, adopted in accordance with Art. 101, section 4, letter b, of the Consolidated Law on Finance.

CONSOB’s issuance of the order is important because it demonstrates that individual promoters can be held accountable for schemes that push unregistered securities even if they are not the operator of a “program.”

Whether Verzari will defend against the CONSOB action and receive any help with potential legal bills from “Roman Novak” and Profitable Sunrise is unclear. “Roman Novak” is the purported operator of Profitable Sunrise.

Apr 2, 2013
NO EASTER PAYOUT: How To Contact State Securities Regulators About Profitable Sunrise HYIP SCHEME; [UPDATED WITH INFO FOR PROVINCES IN CANADA]

UPDATED 8:49 A.M. EDT (APRIL 16, U.S.A.) Today is the day payouts were due on the bizarrely named Profitable Sunrise “Long Haul” 2.7-percent-a-day plan. The Profitable Sunrise website has been offline for 18 days, leaving investors in the lurch. All of the U.S. states and provinces in Canada listed below have issued Investor Alerts or cease-and-desist orders against Profitable Sunrise. The number may grow.

The link at the bottom of this post is from the North American Securities Administrators Association. It provides info on how to contact each of the state and provincial securities regulators in the United States and Canada.

ALABAMA: Joe Borg, director of the Alabama Securities Commission, urged anyone in Alabama who has invested with Profitable Sunrise to contact the ASC’s Enforcement Division at 1-800-222-1253.

Link to cease-and-desist order:

http://www.asc.state.al.us/News/2013%20News/3-14-13%20C&D%20Profitable%20Sunrise.pdf

ALASKA: Persons with information regarding Profitable Sunrise are encouraged to telephone the division at 907-269-8140 or send an email to dbsc@alaska.gov.

Source:

http://www.commerce.state.ak.us/bsc/pub/PR-13-12-ProfitableSunriseAlert.pdf

CALIFORNIA: All California investors in Profitable Sunrise are strongly encouraged to contact the Department of Corporations to file a formal complaint at (866) ASK-CORP or at www.corp.ca.gov.

[March 14] order is available on the Department’s website at http://www.corp.ca.gov/ENF/Default.asp.

COLORADO: (Added April 2.) As reported by the Denver Post. Colorado Division of Securities website is here.

DELAWARE: “This scam is a reminder to be alert and skeptical of money-making claims that are simply too good to be true,” Attorney General Beau Biden said. “I urge investors who believe they have been the victims of this or other schemes to immediately contact our Investor Hotline at 302-577-8424.”

Source:

http://news.delaware.gov/2013/03/14/biden-orders-halt-to-profitable-sunrise-investment-scheme-in-delaware/

DISTRICT OF COLUMBIA: (Washington, DC): If you’re a District resident and have questions about Profitable Sunrise, email the Department of Insurance, Securities and Banking at disbcomplaints@dc.gov or disb@dc.gov; or call (202) 727-8000.

Source: http://disb.dc.gov/release/department-warns-residents-about-possible-fraudulent-investment-group-profitable-sunrise

FLORIDA: File a complaint if you have fallen victim to fraud or if you suspect questionable business practices. Consumers can call the OFR at (850) Its-Your Money (850-487-9687) or file a complaint online.

Source:

http://www.flofr.com/PressReleaseDetail.aspx?id=4146

GEORGIA: See online complaint form on right ride of this page:

http://www.sos.ga.gov/securities/

Link to Georgia cease-and-desist order:

http://www.sos.ga.gov/securities/GAProfitableSunriseCD_ENSC_130293.pdf

IDAHO: “Those investors who receive compensation for soliciting other investors may themselves be subject to the licensing and anti-fraud provisions of state and federal securities laws,” said Gavin Gee, director of the Department of Finance.

Source:

http://finance.idaho.gov/PR/2013/PressRel-ProfitableSunrise.pdf

INDIANA: Anyone who has invested in Profitable Sunrise should contact the Secretary of State’s office at 1-800-223-8791 or find us online at www.indianainvestmentwatch.com.

Source:

http://www.in.gov/activecalendar/EventList.aspx?fromdate=3/1/2013&todate=3/31/2013&display=Month&type=public&eventidn=90006&view=EventDetails&information_id=176811

KENTUCKY: Investors can file a complaint or fraud report with DFI by phone or online at http://kfi.ky.gov/complaint/Pages/securities.aspx.

Source: http://migration.kentucky.gov/Newsroom/eppc_ofi/031413profitable.htm

LOUISIANA: Consumers who have invested with Profitable Sunrise are encouraged to contact the Securities Division of the Office of Financial Institutions at (225) 925-4512.

Source:

http://www.ofi.state.la.us/Sec%20ProfitableSunrise.htm

MAINE: Consumers who have invested with Profitable Sunrise are encouraged to contact the Office of Securities at (877) 624-8551 (toll free in Maine) or (207) 624-8551. Shaw also urged consumers to contact Maine’s Office of Securities before investing to obtain general information about investment professionals and products, including online investment or business opportunities. More information is available at www.investors.maine.gov.

Source:

http://www.maine.gov/tools/whatsnew/index.php?topic=SEC-PressReleases&id=513802&v=Default

MARYLAND: Attorney General Gansler reminds anyone who may have invested in “Profitable Sunrise” to contact the Securities Division of his office at 410-576-7050 if they have questions. Any investor may call the Securities Division to inquire about the status of investment promoters or the securities in which they plan to invest.

See Maryland cease-and-desist order:

http://www.oag.state.md.us/Securities/Actions/2013/ProfitableSunrise.pdf

MINNESOTA: If you have questions or want to report suspicious activity, the Commerce Department’s Consumer Help Line can be reached by phone at (651) 296-2488 or (800) 657-3602. Questions or consumer complaints related to securities can be sent by email to securities.commerce@state.mn.us or by mail to the Minnesota Department of Commerce, 85 7th Place East, Suite 500, Saint Paul, MN 55101.

Link to Minnesota case-and-desist order:

http://mn.gov/commerce/images/ProfitableSunriseCeaseandDesist.pdf

MISSOURI: “File a Complaint” link is on left side of this page:

http://www.sos.mo.gov/securities/enforcement.asp

NEVADA: Residents who have been contacted or solicited by someone claiming to represent Profitable Sunrise or any of its affiliated entities are encouraged to contact the Nevada Securities Division at (702) 486-2440 or by visiting the Securities Center on the Secretary of State’s website at http://www.nvsos.gov.

Source:

http://nvsos.gov/index.aspx?recordid=1285&page=23

NEW HAMPSHIRE: Bureau of Securities: 603-271-1463.

Source:

http://www.sos.nh.gov/securities/Press_Releases/PRESSR_2013-03-25.pdf

NEW JERSEY: Individuals who have invested with Profitable Sunrise are encouraged to contact the New Jersey Bureau of Securities at (866) 446-8378 and to file a complaint.

Source:

http://nj.gov/oag/newsreleases13/pr20130318b.html

NEW MEXICO: New Mexico Regulation and Licensing Superintendent J. Dee Dennis Jr. urged anyone in New Mexico who has invested with Profitable Sunrise to contact the New Mexico Regulation and Licensing Securities Division at New Mexico Regulation and Licensing Department at 1-800-704-5533.

Source:

http://www.rld.state.nm.us/uploads/PressRelease/b88957513a09474898000e52177885b3/Investor_Alert___Press_Release.pdf

NORTH CAROLINA: Secretary of State Elaine Marshall urged anyone in North Carolina who has invested with Profitable Sunrise to contact the Secretary of State’s Securities Division at 1-800-688-4507.

Link to cease-and-desist order:

https://patrickpretty.com/wp-content/uploads/2013/03/NorthCarolinaProfitableSunrise21209608.pdf

NORTH DAKOTA: Karen Tyler, North Dakota Securities Commissioner, urged anyone in North Dakota who has invested with Profitable Sunrise to contact the North Dakota Securities Department’s Enforcement Division at 701-328-2910 or 1-800-297-5124.

OHIO: Ohioans are encouraged to call the Ohio Division of Securities Investor Protection Hotline toll free at 877-683-7841 or file a complaint with the Division online at http://www.com.ohio.gov/secu

OREGON: See news release:

http://www.cbs.state.or.us/dfcs/news_releases/ProfitableSunrise.pdf

SOUTH CAROLINA: Attorney General Alan Wilson urged anyone in South Carolina who has invested with Profitable Sunrise to contact the Securities Division of the South Carolina Attorney General’s Office at (803) 734-9916.

Read more: http://www.scag.gov/archives/8089

SOUTH DAKOTA: If you or someone you know invested with Profitable Sunrise, Inter Reef, Ltd., Roman Novak, Radoslav Novak or any affiliated individuals or entities, please contact the Division of Securities at 605-773-4823.

Source:

http://www.sdjobs.org/news/releases13/nr032613_profitable_sunrise.pdf

TENNESSEE: Tennessee Securities Assistant Commissioner Daphne D. Smith urges any Tennessean who has invested with Profitable Sunrise to contact the Securities Division at 800-863-9117 or to visit www.tn.gov/commerce/securities.

Source:

http://news.tn.gov/node/10426

TEXAS: Texas State Securities Board website:

http://www.ssb.state.tx.us/

See cease-and-desist order here:

http://www.ssb.state.tx.us/Enforcement/files/1722.pdf

WEST VIRGINIA: The Securities Division encourages any West Virginia residents who have invested in Profitable Sunrise to contact the Securities Division Enforcement Section at (304) 558-2251 or toll free at (877) 982-9148.

Source:

http://www.wvsao.gov/communications/prDetail.aspx?rID=378

WISCONSIN: Anyone who has invested with Profitable Sunrise is encouraged to contact the Division of Securities enforcement office at 608-266-1603.

Source:

http://www.wdfi.org/newsroom/press/2013/ProfitableSunriseAlert20130314.pdf

In Canada

ALBERTA: The ASC urges investors to familiarize themselves with some common red flags of investing and offers the Red Flags of Investing factsheet. If you unsure about an investment opportunity, consult a registered financial adviser or obtain independent legal advice before making a decision or handing over any money. Do more research using the resources of the Alberta Securities Commission by visiting www.albertasecurities.com or contacting ASC Public Inquiries at 1-877-355-4488 or inquiries@asc.ca.

Source:

http://www.albertasecurities.com/news/Lists/ASC%20News/DispForm.aspx?ID=1151

BRITISH COLUMBIA: The BCSC urges investors, agents or members of the public who have been approached by or have information about Profitable Sunrise to contact the BCSC inquiries line at 604-899-6854 or 1-800-373-6393 (toll free).

Source:

http://www.bcsc.bc.ca/release.aspx?id=16782

MANITOBA: Check out the MSC website at http://www.msc.gov.mb.ca/education/index.html for resources on investment scams and what action you can take to protect your hard earned money. If you have received unsolicited phone calls about investment opportunities please contact the Manitoba Securities Commission at (204) 945-2548 or toll free at 1-800-655-5244 and ask to speak to an investigator.

Source:

http://www.msc.gov.mb.ca/media_events/investor_alerts/sunrise.html

NEW BRUNSWICK: Being an informed investor is the best defence against investment fraud. Learn how to protect yourself by taking advantage of the materials available on the New Brunswick Securities Commission’s website at www.investinknowingmore.ca.

Source:

http://www.nbsc-cvmnb.ca/nbsc/news_content_display.jsp?news_id=396&id=24&pid=4

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

Source:

http://www.osc.gov.on.ca/en/NewsEvents_nr_20130312_osc-ia-inter-reef-novak.htm

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

Source:

http://www.lautorite.qc.ca/en/press-releases-2013-corpo.html_2013_profitable-sunrise-2013-03-12.html

NASAA list of state and provincial regulators

http://www.nasaa.org/about-us/contact-us/contact-your-regulator/

Also see March 25 PP Blog post.

Apr 1, 2013