The Associated Press is reporting that Zeek Rewards operator Paul R. Burks claims that he is not at fault and that Zeek participants are to blame if they lost money.
From the AP (via Yahoo News/italics added):
“I never told anyone to invest more money than they could afford,” Burks snapped. “I didn’t tell them to do that. Never.”
He said if they lost money, “it’s their fault. Not mine. Don’t blame me.”
Zeek rose in part through promotions on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. In August, the SEC alleged that Zeek was a $600 million Ponzi- and pyramid scheme operating from Lexington, N.C. Court records suggest the SEC’s Zeek probe began at least in April 2012.
Serial hucksters on the Ponzi boards often rationalize Ponzi train wrecks by claiming that no one advised participants to spend more than they could afford to lose.
Convicted Ponzi schemer Dennis Bolze — one of the original so-called “mini-Madoffs” — tried a version of the “don’t invest more than you can afford to lose” rationalization in an unsuccessful bid to reduce his 27-year prison sentence for his brick-and-mortar scheme. A judge applied a sentencing enhancement in the Bolze case because senior citizens were among the victims.
Bolze used a similar argument for a sentencing reduction, asserting that his victims invested only “discretionary money.”
He further argued that age alone was not sufficient to justify the enhancement “and that the present poor financial condition of his victims is not relevant to whether they were unusually vulnerable at the time they invested their money with him,” according to the 6th Circuit.
Meanwhile, Bolze “denied that he forced anyone to invest” and claimed “that he did not know” certain investors “because his associate dealt with them.”
The panel rejected each of those arguments.
Burks, 66, has not been charged criminally. The SEC sued Burks and Zeek parent Rex Venture Group LLC last year.
Ponzi-board hucksters have promoted numerous Internet-aided scams. AdSurfDaily, a $119 million Ponzi scheme opearting from Florida, had a presence on the boards. So did Legisi, a $72 million Ponzi scheme operating from Michigan. So did Pathway to Prosperity, a $70 million scam alleged to have penetrated 120 countries. So did Imperia Invest IBC, a shadowy entity that stole millions of dollars by targeting people with hearing impairments.
The most recent Ponzi-board scam to make major news is Profitable Sunrise, another shadowy entity purportedly operated by “Roman Novak.” Profitable Sunrise purported to pay interest of 2.7 percent a day through its bizarrely named “Long Haul” plan targeted at Christians. Members were due a purported “Easter gift” on Monday, April Fool’s Day.
The Profitable Sunrise website has been missing for more than two weeks. At least 34 U.S. states or provinces in Canada have issued Investor Alerts or cease-and-desist orders against Profitable Sunrise. The United Kingdom and New Zealand also have issued warnings.
Research shows that Profitable Sunrise had members in common with ASD and Zeek.
EDITOR’S NOTE: Information from Tennessee was received after this story was published. The Tennessee info is published in the Comments thread below . . .
UPDATED 8:18 P.M. EDT (U.S.A.) Louisiana has issued an Investor Alert on the Profitable Sunrise HYIP, joining a growing list of U.S. states and Canadian provinces to have done so.
Profitable Sunrise has a presence on well-known Ponzi-scheme forums such as TalkGold and MoneyMakerGroup. The “program” purportedly is operated by Roman Novak and is trading on Bible verse.
“Consumers who have invested with Profitable Sunrise are encouraged to contact the Securities Division of the Office of Financial Institutions at (225) 925-4512,” the office of Louisiana Commissioner of Securities John Ducrest said.
With Louisiana’s action, the unofficial total of U.S. states or Canadian provinces issuing Investor Alerts or cease-and-desist orders against Profitable Sunrise now stands at 27. (See current list here.)
From the statement by Ducrest’s office (italics added):
Investments are purportedly used to provide short-term loans to companies at 3% interest per day. The company’s website also states that investors may earn money by recruiting others through a referral program that pays 5% of deposits generated from recruits.
Consumers should be aware that neither Profitable Sunrise, nor its investment products, are registered in Louisiana as required by the Louisiana Securities Law. High-yield investment programs often have common red flags of fraud that consumers should be looking for, such as unusually high yields; lack of information regarding the investment operator; unclear methodology for achieving returns; off-shore operations; incentives to recruit new investors; and online advertisements containing typographical errors and grammatical mistakes.
Some members of the Profitable Sunrise HYIP have said they were providing loans to “Roman Novak,” who lent out the money at a higher rate and created profits for the business and its promoters. Profitable Sunrise has been hit by cease-and-desist orders or Investor Alerts in at least 25 U.S. states and Canadian provinces.
Profitable Sunrise allegedly had five plans, all of which promised absurd daily interest rates to investors and one of which was billed as the “Long Haul” plan.
Prosecutors in Massachusetts today described a similar case, this one involving an entity known as Viking Financial Group Inc and its alleged operators, Steven and Lori Palladino. The couple is accused of operating a Ponzi scheme.
The office of Suffolk County District Attorney Daniel F. Conley described Steven Palladino as “common and notorious thief based on more than two dozen prior larceny convictions in Suffolk Superior and Norfolk Superior courts.”
From a statement by prosecutors (italics added):
Prosecutors allege that Viking borrowed money from investors, who were told by Steven Palladino that the funds would be used to provide loans at a higher interest rate. Very little of the money was used to make loans, prosecutors said, and it instead funded a lavish lifestyle for the Palladinos. Money borrowed from new investors was then used to repay earlier investors and to make monthly interest payments to all of the investors, prosecutors said.
Transactions show that investors’ money was often transferred from Viking’s account into personal accounts held by the Palladinos and used to cover personal expenses including a vacation in the Bahamas, rent for Steven Palladino’s mistress, and hundreds of thousands of dollars paid to casinos to cover apparent gambling losses, prosecutors said.
In addition, Steven Palladino allegedly made use of investors’ funds when he paid $350,000 to satisfy a condition of his probation on a 2007 Superior Court conviction for defrauding an elderly relative.
Prosecutors alleged that fake loans were entered in Viking’s corporate books to make them appear balanced. The named recipients of these made-up loans never applied for or received loans from Viking, prosecutors said.
The indictment also alleges that three of the real loans Viking extended in 2007 and 2008 charged interest rates well beyond the 20 percent maximum allowed under state law. Of those loans, prosecutors said two charged interest exceeding 60 percent and a third charged over 200 percent interest.
The state of California alleged last week that Profitable Sunrise was breaking both securities laws and lending laws in the state.
This disturbing ad for Profitable Sunrise is targeted at residents of South Dakota.
UPDATED 8:52 A.M. EDT (APRIL 16, U.S.A.) See related stories here (April 1) and here (March 25).
EDITOR’S NOTE: These numbers are unofficial. They are culled from media reports and/or news releases from enforcement agencies. As the PP Blog reported yesterday, the Profitable Sunrise website appears to be down. The reason why is unclear, although there are Ponzi-forum reports that the “opportunity” is switching servers, perhaps to Hong Kong.
For background, consider that the Zeek Rewards “program” operating in North Carolina until the SEC filed a Ponzi action last year allegedly planted the seed that it provided a return of about 1.5 percent a day. The bizarrely named “Long Haul” plan of Profitable Sunrise — with its purported Easter payout — purported to pay 2.7 percent a day. Indeed, the HYIP Ponzi universe has served up another doozy. Some of the Stepfordian promoters appear to have no concern at all that such “programs” undermine faith in legitimate markets and raise serious concerns about both national and international security. As noted below, HYIP “programs” are known to trade on themes of religion, patriotism and doing what’s best for a community. Despite all the fluff, the reality is that the “programs” are dangerous. Period.
Current count of state/provincial actions or investor alerts against Profitable Sunrise: 20. (Now 35, with March 15 additions of South Carolina, Alaska, Maryland, Maine, the March 18 addition of New Jersey, the March 19 additions of Louisiana and Tennessee, the March 21 additions of Oregon and Missouri, the March 25 addition of New Hampshire and the March 28 addition of West Virginia. The District of Columbia (Washington, D.C.) issued a warning on March 19. It was added to this list on March 27. Georgia issued a cease-and-desist order on March 14. It was added to this list on March 27. Idaho issued an Investor Alert on April 15. It was added to this list on April 16. Manitoba, in Canada, issued an alert on March 15. It was added to this list on March 21.)
In Canada: New Brunswick, Quebec, Ontario, British Columbia, Alberta, Manitoba.
In the United States: Kentucky, Ohio, Florida, Wisconsin, Nevada, Minnesota, California, Indiana, New Mexico, Texas, Delaware, North Dakota, South Dakota, Alabama, North Carolina, South Carolina, Alaska, Maryland, Maine, New Jersey, Louisiana, Tennessee, Oregon, Missouri, New Hampshire, District of Columbia (Washington, D.C.), Georgia, West Virginia, Idaho.
Regulators in New Zealand (FMA) and the United Kingdom (FSA) also have issued warnings against Profitable Sunrise.
Here’s a sampling of what securities officials are saying:
From the office of David Goodman, director of the Ohio Department of Commerce (italics/bolding added):
The Division is concerned that these businesses could be targeting religious-based organizations. The company’s website includes Bible quotations and options for donating investment returns to charity. The website also describes various investment plans that claim to offer returns between 288% and 648% for investment periods between 180 days and 240 days. The website claims the investments are “risk-free” with “no chance of default” and provides short-term business loans in the United States.
The website also includes apparent traits of a pyramid scheme. It provides details about a “referral program” where individuals can become regional representatives for an investment group. The regional representatives are offered five percent commissions from those who join the referral program under that representative’s name.
From the Florida Office of Financial Regulation (OFR):
To attract interest in its investment offerings, Profitable Sunrise and its sub-companies may be attempting to exploit investors’ religious affinities. The organization is believed to be engaged in a marketing campaign which makes conspicuous use of biblical quotations.
From the Division of Securities at the Wisconsin Department of Financial Institutions (DFI):
Investors in other states were informed that their money would be used to fund short-term loans to businesses and that “all funds deposited with (Profitable Sunrise) are insured against loss” by a leading investment bank. Investors were instructed to wire money to financial institutions in Eastern Europe, including one bank that was located in the Czech Republic.
From the office of Nevada Secretary of State Ross Miller:
Securities officials are also concerned that the company is using a related website for the “Profitable Sunrise Team” to entice people to bring in additional investors for a commission. Secretary Miller cautions Nevada residents that “investment products must be registered or exempt from registration to be sold in Nevada, and generally those selling an investment must be licensed.”
There have also been reports that Profitable Sunrise has directed investors to wire transfer funds to a bank in the Czech Republic. Secretary Miller warns investors that it can be extremely difficult for an investor to recoup funds invested through banks in foreign countries.
From the New Brunswick Securities Commission:
Investors are warned not to send money to an offshore company called Profitable Sunrise, an entity that claims to provide high-yield investments through short-term bridge loans to businesses. The New Brunswick Securities Commission is issuing this warning following similar warnings by several Canadian and American securities regulators.
From the office of Indiana Secretary of State Connie Lawson. (Editor’s note: Indiana officials are describing some of the Profitable Sunrise talking points used to disarm skeptical investors. Scams often trade on patriotic themes and claims that investors are helping drive the economy. The AdSurfDaily Ponzi scheme (and many others) have used similar talking points):
Profitable Sunrise founder, Roman Novak, states that the investment model is based on providing short-term loans to small businesses throughout the United States. Profitable Sunrise makes investments attractive by not only touting risk-free, high returns but also by stating that by helping these United States companies, investors are also helping revitalize the national economy and create more desperately needed jobs in the United States.
From the office of Minnesota Commerce Commissioner Mike Rothman:
Commerce Commissioner Mike Rothman ordered Profitable Sunrise and its operators, Roman Novak and Radoslav Novak, and Minnesotans William Nilsson (a/k/a Chad Nilsson) and Casey Dorian, today to cease and desist from selling securities in the State of Minnesota.
The Minnesota Department of Commerce, in conjunction with 19 jurisdictions throughout the United States and Canada, took coordinated action against Profitable Sunrise, an international entity allegedly operating an internet scheme to defraud investors. The Commerce Department’s investigation found that two individuals in Minnesota, Chad Nilsson and Casey Dorian, were allegedly participating in the investment scheme, currently soliciting investors but are not licensed to sell securities in the state.
(Editor’s Note: When the SEC moved in August against the alleged $600 million Zeek Rewards Ponzi- and pyramid scheme, the state of North Carolina warned about “reload scams.” Chad Nilsson may not have gotten the message, something that’s not unusual in the world of MLM. From WhoIsChadNilsson.com: “Of course we are all waiting patiently for our Zeekler Refunds, but now, in the meanwhile, there is a company out that is better than Zeek Rewards every [sic] was! A six year old company has just launched a new program that is even better. They are paying 2.15 percent daily and you can pull your profit out every day if you want, right from day one. If you were to put $200.00 into this new program, in 170 business days, your money would have grown to $7500.00!)
See this story/comments thread for more info on actions/alerts against Profitable Sunrise.
EDITOR’S NOTE: Ohio now has issued a warning on Profitable Sunrise, saying 15 other states also have issued warnings. Information from Ohio and other states has been added to the Comments thread below . . .
BULLETIN: (UPDATED 2:01 P.M. EDT (U.S.A.)
The state of Kentucky has issued an emergency cease-and-desist order to the Profitable Sunrise HYIP “program,” amid allegations that the purported “opportunity” is selling unregistered securities to residents of the state and that residents themselves — in turn — are doing the same thing to earn commissions.
Profitable Sunrise is trading on Bible prose, according to the Kentucky order. And some residents of the state appear to be offering the “program” to family members and perhaps even investing in the names of loved ones.
The Profitable Sunrise website is offline this morning. There are Ponzi-forum reports that the “program” is changing servers.
Kentucky’s order is directed at purported Profitable Sunrise operators Roman Novak and Radoslav Novak. The company lists an address in the United Kingdom and does business as Inter Reef LTD.
Kentucky’s order was issued by the Department of Financial Institutions. It is dated today. The order also references Nicole Sanders of Louisville, describing her as a possible Profitable Sunrise pitchwoman operating in the state by issuing press releases through a social-networking site. One release viewed by the PP Blog displayed a link to a purported “HYIP Investment Calculator.”
It is somewhat common for HYIP promoters to try to woo prospects with earnings projections. (It happened in Zeek Rewards and AdSurfDaily, for just two examples. ASD was a $119 million Ponzi scheme. Zeek was accused by the SEC in August 2012 of operating a $600 million Ponzi- and pyramid scheme.)
Sanders may be a purported “private group leader” for Profitable Sunrise, according to the Kentucky order.
One of the claims in a news release attributed to Sanders is this (italics added):
Example: If I invest $200.00, over 170 days of my initial investment date without taking $$$$ out (meaning compound on), my investment matures and my PROFIT will be $7,439.66.
Kentucky now has joined North Carolina, which earlier issued a cease-and-desist order to Profitable Sunrise. Alabama has issued a warning about the “program.” So have the Canadian provinces of Alberta, Ontario, British Columbia and Quebec.
Britain’s Financial Services Authority and New Zealand’s Financial Markets Authority also have issued warnings.
OSC INVESTOR ALERT: Inter Reef Ltd., Roman Novak and Radoslav Novak (doing business as Profitable Sunrise)
TORONTO – The Ontario Securities Commission (OSC) is warning Ontario investors not to invest with Profitable Sunrise, which claims to be located in the United Kingdom while representing that its banking facilities are in the Czech Republic. Profitable Sunrise is offering investors “investment plans”, but Profitable Sunrise is not registered in Ontario to engage in the business of trading in securities or advising anyone with respect to investing in, buying or selling securities.
Profitable Sunrise is representing that its “investment plans” earn abnormal returns, “risk-free”, of 1.5 per cent – 2.7 per cent per business day, which translates into an annual return of over 300 per cent. On January 11, 2013, the OSC issued a warning to investors entitled “Beware: High-yield Investment Programs are Ponzi Schemes” that explains the risks of investing with companies like Profitable Sunrise. You can find the warning on the “OSC Investor News” section of the OSC’s website at www.osc.gov.on.ca.
The mandate of the OSC is to provide protection to investors from unfair, improper or fraudulent practices and to foster fair and efficient capital markets and confidence in capital markets. Investors are urged to check the registration of any person or company offering an investment opportunity and to review the OSC’s investor materials available at www.osc.gov.on.ca.
If you have any questions or information relating to this matter, please contact the OSC Contact Centre at 1-877-785-1555.
And here, through the Autorité des marchés financiers, is Quebec’s warning (italics added):
March is Fraud Prevention Month – Caution to be used when solicited by Profitable Sunrise
Tuesday, March 12, 2013
Montréal – The Autorité des marchés financiers (the “AMF”) is warning Quebeckers about investment contracts offered by Inter Reef LTD, also known as Profitable Sunrise on the Internet, which purports to be a British company and is not authorized to carry on business in Québec.
The North Carolina Department of the Secretary of State recently issued an order warning investors about offers published by Profitable Sunrise and its officer, Roman Novak, on the Internet. Investigators with the North Carolina Department of the Secretary of State say that Profitable Sunrise and its officer promoted five different investment plans through a website that offered rates of return ranging from 1.6% to 2.7% per business day. Investors were told their money would be used to fund short-term loans to businesses, “risk-free”. Secretary of State investigators have also discovered that victims were asked to make wire transfers of money to financial institutions in Eastern European countries, including the Czech Republic.
This week, the Alberta Securities Commission warned investors after it received reports from a Calgary-based banking institution that several of its customers have attempted to withdraw significant amounts of funds from their accounts for wire transfers to the Czech Republic.
Although there is no proof that Quebeckers invested in the scheme, the AMF urges great caution in dealing with offers by Profitable Sunrise. No person or company named Roman Novak, Inter Reef LTD or Profitable Sunrise is registered with the AMF. Since they are not registered with the AMF, solicitations by Roman Novak, Inter Reef LTD and Profitable Sunrise of Québec investors could contravene the laws administered by the AMF.
If you have responded to solicitations from Profitable Sunrise or any similar type of solicitation, please contact an officer at our Information Centre.
Reminder to investors As part of Fraud Prevention Month, the AMF reminds consumers that it is important to ask questions (5 bonnes questions — in French only) before entrusting their savings to a person who solicits them, especially when promised a return that is too good to be true such as in this case.
The Autorité des marchés financiers (the “AMF”) is the regulatory and oversight body for Québec’s financial sector.
BULLETIN: The Alberta Securities Commission (ASC) has issued a warning on the Profitable Sunrise “program.” The Canadian agency’s move followed on the heels of reports from First Calgary Financial that “several of its Calgary customers have attempted to withdraw significant amounts of funds from their accounts for wire transfers to the Czech Republic,” ASC said.
“Albertans should be aware that Profitable Sunrise and its agents are not registered to sell securities in Alberta,” the agency said.
ASC is Alberta’s securities regulator. The agency noted that the Securities Division of the North Carolina Secretary of State issued a cease-and-desist order to Profitable Sunrise last month, amid allegations that the “program” was selling unregistered securities.
“It’s important for investors to know that there is no such thing as a high return, no risk investment,” said Bill Rice , chair and CEO of the ASC. “If you are persuaded to send money overseas, it may be difficult, if not impossible to get it back if something goes wrong.”
First Calgary is Canada’s ninth-largest credit union. A First Calgary executive said the company contacted ASC after observing unusual transactions.
“Our front-line employees are trained to identify suspicious transactions by members so that we may be able to stop them from becoming the possible victims of an investment scam,” said Debbie Pratt, vice president of retail banking for First Calgary Financial. “In this case, we noticed a trend and a quick call to the ASC allowed us to alert our members.”
Profitable Sunrise lists a business address in the United Kingdom. Regardless, the enterprise is soliciting funds to be sent to Raiffeisenbank AS in the Czech Republic, according to North Carolina investigators. An entity known as Melland Company SRO was listed in Profitable Sunrise wiring instructions as the beneficiary, according to the North Carolina order.
A credit union used by a North Carolina-based Profitable Sunrise investor blocked at least one transaction directed toward the Czech bank, citing suspicions of fraud, according to the order.
Among other claims, Profitable Sunrise purported to offer a “Long Haul” plan that paid 2.7 percent a week with an Easter payout. The Profitable Sunrise “program” is being pitched on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup.
Zeek Rewards, which the SEC in August 2012 called a $600 million Ponzi- and pyramid scheme, was promoted in part from the same forums. Some individuals have promoted both Zeek and Profitable Sunrise.
URGENT >> BULLETIN >> MOVING: The state of Alabama has issued a warning on Profitable Sunrise. The move follows on the heels of a cease-and-desist order issued last week by North Carolina.
The warning comes in the form of an “investor alert” issued by the office of Joseph Borg, the director of the Alabama Securities Commission.
“We want to make our citizens aware of the potential perils of web-based investment marketing,” said Borg. “As with all investment opportunities, investors should thoroughly scrutinize any offer, especially if it comes from a foreign country,” Borg said. “Most investment offerings, as well as the person making an investment offering, must be registered with the Alabama Securities Commission. This is a critical first step in protecting the public from con artists and investment fraud.”
Borg urged “anyone in Alabama who has invested with Profitable Sunrise to contact the ASC’s Enforcement Division at 1-800-222-1253.”
From ASC (italics added):
An investigation of Roman Novak, Radoslav Novak and their company, Inter Reef, Ltd., doing business as Profitable Sunrise, revealed that the men allegedly promoted at least five different “investment plans” through a website that offered rates of return ranging from 1.6% per business day to 2.7% per business day for periods of from between 180 to 240 business days. Investors were told that their money would be used to fund short-term, “risk-free” loans to businesses, and that “all funds deposited with us are insured against loss” by a leading investment bank. Further investigation revealed that victims had been instructed to wire money to financial institutions in Eastern Europe, including one bank identified as being in the Czech Republic. ASC records revealed that neither of the men, nor the company they represent, are registered to conduct securities business in Alabama, as required by the Alabama Securities Act.
EDITOR’S NOTE: Reproduced below is the full news release by the office of North Carolina Secretary of State Elaine F. Marshall on the cease-and-desist order issued last week to “Profitable Sunrise.”
Even as the state has raised serious concerns about the “program,” Profitable Sunrise “defenders” have been seeking to minimize the issues. Some people even are hurling insults at North Carolina regulators while blanketing Ponzi-scheme forums such as TalkGold and MoneyMakerGroup with “I got paid” posts.
That a program “pays” is not evidence that no fraud scheme is occurring. (Bernard Madoff “paid” — right up until the day he didn’t.) Along those lines, collapsed “programs” such as Zeek Rewards, AdSurfDaily, Legisi, Pathway To Prosperity and Imperia Invest IBC — all of which advertised outsize returns — all had a presence on the Ponzi boards.
Some “defenders” of Profitable Sunrise appear to be scurrying to describe the alleged investment “program” as the recipient of “loans” from customers. The “loan” claims may raise altogether different issues — such as whether Profitable Sunrise is engaging in unlawful banking while commingling assets and operating as an unlawful investment pool. And despite “defenders’” claims that Profitable Sunrise is not the issuer of “securities” as investment contracts, Profitable Sunrise has advertised five investment schemes on its own website, including a bizarrely named plan known as the “Long Haul” that purported to pay 2.7 percent a day.The Legisi HYIP scheme sought to escape scrutiny in the United States by calling itself a “loan” program. Federal prosecutors described Legisi operator Gregory McKnight’s wordplay as “semantic obfuscation.” The SEC earlier described U.S.-based Legisi pitchman Matthew John Gagnon as a threat to the investing public.
Here, below, the statement by Marshall’s office . . .
Raleigh – North Carolina Secretary of State Securities officials have issued a Temporary Order to Cease and Desist to Roman Novak, Radoslav Novak and Inter Reef LTD d/b/a Profitable Sunrise to bar them from offering and selling or attempting to sell securities in the form of investment contracts to North Carolina’s investing public.
Secretary of State investigators say the respondents promoted five different “investment plans” through a website that offered rates of return ranging from 1.6-percent per business day to 2.7-percent per business day. Investors were told their money would be used to fund short-term loans to businesses. Investors were also told their investments were “risk-free,” “with a certain rate of return and no chance of default,” and that “all funds deposited with us are insured against loss.”
Secretary of State investigators have also discovered that victims were making wire transfers of money to financial institutions in Eastern European countries.
However, the respondents were never registered with the North Carolina Secretary of State’s Securities Division to sell securities and the investment itself was not registered as a security in accordance with the North Carolina Securities Act.
“We have issued this Cease and Desist Order because we believe this solicitation poses a real danger to the investing public,” Secretary of State Elaine F. Marshall said Friday. “Proper registration of securities and the individuals selling securities is fundamental to protecting the public from con artists and investment fraud. That is why it is so important to call our Securities Division before investing your hard-earned money to make sure that the investment you are considering is registered. This case also demonstrates the perils of web-based investment marketing.”
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.
The website of “NewGNI” has not resolved to a server for days. The “program” is believed to have been a knockoff of a predecessor scam known as “GNI” or GoldNuggetInvest, which collapsed in early 2010 after being promoted by members of the AdSurfDaily Ponzi scheme.
The collapse of the original GNI was about as bizarre as they come in HYIP land. Critics were told to concentrate on earthquake relief in Haiti, rather than questioning the HYIP scheme. GNI’s collapse purportedly occurred after its operators sought “a crystal clear vision of our financial vortex.“
Among the pitchmen for both GNI and NewGNI was Ponzi-board legend “Ken Russo,” also known as “DRdave.” Earlier, “Ken Russo” had promoted the $119 million ASD scheme. He later turned to ClubAsteria, which was trading on the name of the World Bank to reel in suckers. ClubAsteria promos came under the lens of CONSOB, the Italian securities regulator. “Ken Russo” also emerged as a pitchman for Zeek Rewards, which the SEC described in August 2012 as a $600 million Ponzi- and pyramid scheme operating from North Carolina.
Among “Ken Russo’s” latest ventures is “Profitable Sunrise,” now the subject of a cease-and-desist order from North Carolina regulators.
Profitable Sunrise purportedly is operated by Roman Novak. The “program” is being targeted at people of faith, some of whom appear to be defending it by weaving impossible tales. Any number of Ponzi-board taunts have been aimed at the Securities Division of North Carolina Secretary of State Elaine Marshall, even as ProfitableSunrise advertises a risk-free, preposterous return of 2.7 percent a day in its bizarrely named “Long Haul” program with a purported Easter holiday payoff.
“lol @ NC officials,” says one post at MoneyMakerGroup. Another compares Marshall’s office to “Deputy Barney Fife,” an iconic TV character played by Don Knotts in the Andy Griffith Show.
Even after the government of Belize issued a warning against GNI in 2009, scammers continued to promote it — virtually to the very day it collapsed and took an unspecified sum with it. The collapse triggered a bizarre series of conspiracy theories.
GNI was operating concurrently with a now-collapsed scam bizarrely known as “Cash Tanker,” an “opportunity” aimed at Christians. Cash Tanker used an image of Jesus Christ in its promos and purported to pay 2 percent a day.
URGENT >> BULLETIN >> MOVING: The state of North Carolina — home base to the alleged $600 million Zeek Rewards Ponzi scheme — has ordered a purported offshore “opportunity” known as “Profitable Sunrise” to cease and desist from doing business in the state.
Profitable Sunrise purports to be a hard-money lender and investment opportunity. It appears to have attracted some Zeek members both before and after the August 2012 collapse of Zeek. Zeek was under investigation by North Carolina, the SEC and the U.S. Secret Service at the time of its collapse.
In its cease-and-desist order, North Carolina described Profitable Sunrise as “an immediate and significant danger” that is using multiple investment schemes to attract money, including a purported “Long Haul” plan.
The offer is being targeted at people of faith through web-based promoters, some of whom described themselves as Christians. Offering materials for the “Long Haul” plan have advertised an Easter holiday payout.
The company itself has advertised “risk free” payouts with “no chance of default,” according to the North Carolina order. And Profitable Sunrise also claims “investments are insured by a leading investment bank.”
As the PP Blog reported in December, Profitable Sunrise appeared to qualify investors based on their views on hot-button issues, including abortion.
North Carolina’s order names Roman Novak, Radoslav Novak and Inter Reef LTD (doing business as Profitable Sunrise) as respondents, amid allegations by the Securities Division of the office of North Carolina Secretary of State Elaine Marshall that Profitable Sunrise is selling unregistered securities as investment contracts.
Profitable Sunrise lists a business address in the United Kingdom. Regardless, the enterprise is soliciting funds to be sent to Raiffeisenbank AS in the Czech Republic, according to North Carolina investigators. An entity known as Melland Company SRO was listed in Profitable Sunrise wiring instructions as the beneficiary, according to the order.
A credit union used by a North Carolina-based Profitable Sunrise investor blocked at least one transaction directed toward the Czech bank, citing suspicions of fraud, according to the order.
Marshall’s investigators noted that the Profitable Sunrise investor believed that the”Long Haul” plan would pay “interest of 2.7% daily, compounded at 100%, for 240 days.”
Other Profitable Sunrise plans also promised high interest rates in compressed time frames, reaching for sums of between $10 and $2,500 and advertising interest rates of between 1.6 percent and 2 percent a day, according to the order.
Zeek planted the seed that it paid an average of 1.5 percent a day, the SEC said on Aug. 17. On Aug. 4, Zeek claimed on its news site that unspecified “North Carolina credit unions” were creating problems for it.
Zeek rose in part through promotions on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. In August, the SEC alleged that Zeek was a $600 million Ponzi- and pyramid scheme operating from Lexington, N.C. Court records suggest the SEC’s Zeek probe began at least in April 2012.
