BULLETIN: The SEC has gone to federal court in Florida to accuse Quri Resources Inc. and its Chief Executive Officer Jaime Santiago Gomez of operating a pump-and-dump scheme to drive up the price of Quri’s unregistered stock.
It was the second major action in Florida today against companies and individuals who allegedly were running stock-fraud schemes. Named defendants in a separate SEC case were Atlantis Technology Group and CEO Christopher Dubeau of Weston, Fla.
“Investors were duped into believing that Quri Resources was a successful mining company and that Atlantis Technology Group was selling cutting-edge technology services,” said Eric I. Bustillo, director of the SEC’s Miami Regional Office.
“Both companies misled investors with exaggerated claims while their respective senior executives illegally dumped shares into the market,” Bustillo said. “We will continue to crack down on companies that promote misleading information.”
The SEC said that Quri purported to be a “mining company headquartered in Miami, Florida, and operating in Ecuador.”
As was the case with Atlantis and Dubeau, Quri and Gomez were accused of issuing “a series of false press releases and other misleading public statements” as part of the scheme, the SEC charged.
From February to July 2009, Quri claimed in several press releases that, among other things:
It was ready to begin drilling on a mining project in Ecuador with a probable gold reserve worth over $1 billion.
It had signed letters of intent to acquire two valuable mining projects in Arizona.
It had acquired a second mining project in Ecuador and anticipated producing gold within three months.
It had signed a letter of intent to acquire a third valuable mining project in Ecuador.
“[A]t the same time, Quri’s website and other public statements described Quri as having ongoing operations, employees worldwide, and an impressive management team,” the SEC charged. “The complaint alleges that these claims were grossly misleading because, among other things:
The exact value of the gold reserves in Ecuador could not be known without further detailed exploration.
Quri never acquired any mining projects in Arizona, and it acquired, at most, only one project in Ecuador.
Quri never developed any of its purported mining projects and was never in a financial position to do so.
Quri had no money, was never able to raise any funds, had no reasonable expectation of any funding, and was heavily indebted.
The SEC said the scheme also involved the misuse of a website and a social-networking site.
“Gomez also authored Quri’s internet website and approved its profile on the social network website LinkedIn,” the agency alleged. “These falsely described Quri as having ongoing operations, 28 employees worldwide, a geologist with a PhD on staff, and an impressive management team led by Gomez, a college graduate. None of these claims were true.”
Gomez simply fleeced investors, the SEC charged.
“[T]aking advantage of Quri’s artificially inflated stock price, Gomez, through an entity he controlled, dumped over half a million shares of Quri stock on the unsuspecting public, selling Quri stock in unregistered transactions, earning at least $17,500 from the sale of the stock,” the SEC charged.
“Based on his track record, there is no reason to doubt — and every reason to believe — that [Trevor] Cook is hiding assets, and that he can do much, much more to recover stolen funds. Why else would Cook send millions of dollars to 14 foreign countries, including Dubai, Cyprus, Greece, Belize, Antigua, England, Germany, Denmark, Mexico, Canada, Panama, Costa Rica, Jordan, and Switzerland?”— SEC, Sept. 24, 2010
On July 21 — six months after Trevor Cook had been jailed for contempt of court in a civil case brought by the SEC, and three months after he had pleaded guilty to criminal charges and agreed to cooperate with investigators — the FBI received a tip that led agents to the home of Cook’s brother Graham.
“The investigation involved assets hidden in Graham Cook’s home in ‘air ducts,’ in ‘ceiling rafters,’ and behind a ‘toilet paper dispenser,’” the SEC said yesterday.
The FBI “learned about the assets through a tip, not from Cook,” the SEC stressed, arguing that Cook’s earlier pledge to cooperate to make victims as whole as possible was virtually meaningless.
Agents later found even more loot stashed at a Minnesota shopping mall, the SEC said.
All in all, federal agents “ultimately recovered over $200,000 in cash, over 2,000 gold and silver coins (worth an additional $200,000), numerous Rolex watches, and valuable sports memorabilia” from the home, the SEC advised Chief U.S. District Judge Michael Davis of the District of Minnesota.
Meanwhile, at the mall, agents summoned by a security guard found “118 gold and platinum coins, as well as ‘stocks of different currency denominations from different foreign countries to include Iraqi Dinars, Turkish Lira, [and] Dominican Republic, Canadian, and Asian currencies,’” the SEC said.
The money stashed at the mall was recovered July 24, three days after the FBI recovered the cash from Graham Cook’s home, the SEC said.
Davis had jailed Trevor Cook in January for ignoring orders in the civil case. In August, he was sentenced to 25 years in federal prison by U.S. District Judge James Rosenbaum, who presided over the criminal aspect of the case brought by federal prosecutors.
Now, the SEC says Cook never purged the contempt citation in the civil case and should remain jailed until he does. The blistering filing suggests that, in theory, the clock may not start running on Cook’s 25-year sentence in the criminal case until he purges the civil contempt.
Some defendants jailed for contempt in civil cases involving large sums of money have remained behind bars for years, the SEC noted.
Going against the prosecution’s recommendation, Rosenbaum did not give Cook credit for time served in the civil case when sentencing the Ponzi schemer last month.
“I will tell you that I will not purge him of that contempt,” Rosenbaum said from the bench last month, according to a transcript of the proceeding in sentencing court. “That is an order of my Chief and that is his choice.”
In a memo to Davis, the SEC said Trevor Cook simply cannot be trusted.
“This Court ruled that Cook would remain incarcerated unless and until he performed 11 duties, including repatriating over $27 million from overseas, recovering over $6 million in preferential payments, and surrendering $2 million from domestic accounts, among others,” the SEC argued.
“Since then, Cook has repatriated $0 from overseas, has recovered $0 in preferential payments, and has surrendered $0 from domestic accounts,” the agency continued. “Yet Cook now asks to be released [from the contempt citation], based on the notion that he has done everything that he can do, and based on his promise to be helpful in the future. He gives his word.
“With all due respect, Cook’s word is not worth the paper that it is written on,” the SEC argued to Davis.
Any bid by Cook to argue he has cooperated with investigators and genuinely sought to purge the contempt citation is defeated by the facts of the case, the SEC argued.
“Cook promises that he is not hiding anything — honest — but Cook’s credibility has long since run out. As Judge Rosenbaum stated: ‘You haven’t got a clue what the difference is between the truth and a lie. The two words mean nothing to you,’” the SEC said, citing Rosenbaum’s courtroom comments to the Ponzi schemer.
And Cook is thumbing his nose at both the court and victims, the SEC said.
“Despite holding the keys to the jailhouse gates in his pocket, Cook has chosen to stay in jail, presumably in the hope of reaping a bounty someday,” the SEC said. “That is his choice, but he cannot now be heard to complain that his detention continues. Cook cannot secure his release by offering self-serving statements and empty promises.
“One of Cook’s victims said it best at the sentencing hearing: ‘If he wanted to help, he’s been sitting in jail since January. He could have helped recover any money that there was between now and then. Promises now of being able to help in the future are ridiculous. It’s just not acceptable,’” the SEC argued, quoting a statement from a victim.
Even as Cook professes to be cooperative, a laundry list of unanswered questions remains, the SEC said:
What were the circumstances surrounding each overseas transfer?
Who did Cook interact with concerning each transfer?
In particular, who did Cook communicate with at the foreign banks?
Who helped him create the accounts and/or wire the funds?
How much money was in each account at the time of the entry of the Asset
Freeze Order?
Where are the account statements?
What, if anything, has he done to obtain the account statements and all other financial records?
Did Cook transfer any funds from those foreign accounts to other foreign or domestic accounts? If so, where, when, and how much? And why?
What role did Cook play in creating the accounts in the first place?
What was the purpose of the offshore accounts?
What was the purpose of each transfer?
Who are the signatories? Who else had access to the funds in the accounts?
What are the passwords?
If Cook has no access to the accounts, as he suggests, then how does he know that the accounts lost money in trading?
What, if anything, has he done to return the funds to the United States?
What, if anything, has prevented him from simply contacting the foreign institutions and having them return the money?
Indeed, the SEC said, question-and-answer sessions involving the agency, Cook and R.J. Zayed, the court-appointed receiver, “were remarkable for [Cook’s] inability to remember and answer straightforward questions.”
Although Cook has the keys to the contempt cell, he has chosen not to use them, the SEC argued.
“Cook cannot lighten his burden by claiming that he has already sat in jail for eight months,” the agency said. By definition, there is no time limit for civil contempt. Sanctions for civil contempt include ‘confining a contemnor indefinitely until he complies.’”
Meanwhile, one of Cook’s victims told the PP Blog late last night that Cook showed no respect for victims and set aside money to gamble even after the SEC probe began 16 months ago.
A court filing suggests a bid was made to route the gambling money through Antigua.
“The United States suggested I give you credit for the time which you have served, and I shan’t do that,” Judge Rosenbaum told Cook in sentencing court, according to the transcript. “You’re not doing my time, you’re in jail as a contempt order. That’s called
dead time. That’s Judge Davis’s sentence. It’s not mine.
“So whatever you’ve done up until now counts zero against the sentence I’m imposing. And as far as I’m concerned, but it’s not my opinion that matters, you’re still in contempt,
and whether or not they’re going to run your time till you purge yourself with my brother, that’s up to somebody else,” Rosenbaum said.
Earlier this week the PP Blog reported that members of MPB Today were using YouTube and other sites to post images of checks drawn on a distressed Florida bank. The checks, which were supplied as purported “proof” of MPB Today’s legitimacy, may expose both the posters and the bank to security breaches and identity theft.
The bank, Gulf Coast Community Bank of Pensacola, has been operating under an FDIC consent agreement since January. It did not respond to a request for comment from the PP Blog. It is possible that the bank was unaware that its name was being used as a form of purported “proof” that one of its customers — MPB Today, which operates an MLM advertised on Ponzi forums such as ASA Monitor — was above-board.
Like MPB Today, the alleged Legisi Ponzi scheme was pushed on Ponzi forums such as MoneyMakerGroup. This bizarre section of the Legisi Terms of Service purports that members must avow they are not an "informant, nor associated with any informant" of the IRS, FBI, CIA and the SEC, among others. The others included "Her Majesty's Police," the Intelligence Services of Great Britain, the Serious Fraud Office and Interpol.
In the alleged AdSurfDaily (ASD) Ponzi scheme in 2008, members cited ASD’s relationship with Bank of America as purported “proof” of legitimacy. Federal agents later seized more than $65.8 million from 10 bank accounts controlled by ASD President Andy Bowdoin amid allegations of wire fraud and money-laundering.
ASD also was promoted on the Ponzi boards. Robert Hodgins, who operated a company ASD members said supplied debit cards to the firm, now is wanted by INTERPOL in a case that alleges he assisted in the laundering of money for Colombian narcotics traffickers. The money was accessed with debit cards through ATMs in Medellin, according to court records.
A mysterious business opportunity known as WebsiteTester.biz also is being hawked at ASAMonitor and other Ponzi boards. WebsiteTester claims it has collected the names and email addresses more than 400,000 prospects across the world. WebsiteTester claims its legitimacy can be established by watching a YouTube video that shows no faces and by reading a news release published by an anonymous author.
In July, the Financial Industry Regulatory Authority (FINRA) issued an alert about fraud schemes that use forums and social-media sites such as YouTube and Facebook to spread virally.
Among the other “programs” pushed on the Ponzi boards was Legisi, an alleged Ponzi scheme that gathered more than $70 million. Legisi members were specifically prompted to “avow” they were not “an informant” for law enforcement, including INTERPOL, the FBI and the SEC, among other agencies.
Despite repeated public warnings by authorities to exercise caution on the Internet, fraud schemes continue to proliferate globally. INTERPOL now says one of its own was targeted in an identity-theft bid on Facebook — and it was the boss himself.
“Just recently INTERPOL’s Information Security Incident Response Team discovered two Facebook profiles attempting to assume my identity,” said Ronald K. Noble, INTERPOL’s Secretary General.
“One of the impersonators was using this profile to obtain information on fugitives targeted
during our recent Operation Infra Red,” Noble said. “This Operation was bringing investigators from 29 member countries at the INTERPOL General Secretariat to exchange information on international fugitives and lead to more than 130 arrests in 32 countries.”
Three people charged with conspiring to impersonate federal agents in a bid to rattle the nerves of a Ponzi scheme suspect and recover money have been sentenced to 180 days of home confinement and placed on federal probation for two years.
A fourth defendant in the shakedown scheme avoided a sentence of home confinement but was placed on federal probation for two years.
The bizarre shakedown scheme unfolded in March 2009, when Michael David Sanders, 43, of Fair Oaks, Calif.; Craig Anderson, 41, of Chicago; Sean Smartt, 42, of Sacramento; and Cassandra Moore, 27, of Beverly Hills, Calif., entered a California hedge-fund office suite in a bid to recover investor money “lost in a Ponzi scheme carried out by federal defendant Anthony Vassallo,” the FBI said.
“The defendants entered dressed to give the impression of authority (bullet proof vests, ear pieces, fake credentials, hand cuffs, and badges),” the FBI said. “Sanders and Anderson announced they were with the FBI and the United States Security and Exchange Commission.
“In their guilty pleas the defendants admitted to creating an environment that was intimidating and causing the individuals to believe that they were not free to leave,” the FBI continued. “Anderson told the hedge fund operators that they had until noon on Monday, March 9, 2009, to wire $378,300.16 to a Patelco Credit Union bank account in the name of the ‘Spirit Foundation’ and to send an e-mail confirmation to an e-mail address they provided. No money was ever turned over to the defendants.”
Moore was the only defendant who avoided home detention.
The shakedown bid was connected to the the alleged Equity Investment Management and Training Inc. (EIMT) Ponzi scheme that gathered more than $40 million.
It is illegal to impersonate a federal agent. Had the defendants not accepted a plea deal and not qualified for probation, they could have been sentenced to federal prison. Each pleaded guilty and accepted the deal. The IRS assisted in the probe.
A Hawaii man and his company were hit with sanctions totaling $6.2 million in a case that alleged they targeted people with hearing impairments in a Forex Ponzi scheme.
Both the SEC and the CFTC filed actions against Marvin Cooper and his Honolulu-based firm, Billion Coupons Inc. (BCI). The CFTC announced the judgment against Cooper and the company.
Investigators said Cooper and BCI “solicited funds from deaf American and Japanese individuals for the sole purported purpose of trading forex,” luring them with payout promises of up to 25 percent per month.
For his part, Cooper took “more than $1.4 million of customer funds for personal use, including for flying lessons and to purchase a $1 million home,” investigators said.
He was ordered to pay $3.9 million in restitution to customers and more than $2.3 million in penalties. The company is liable for the same amounts.
The “Billion Coupons” case drew comparisons to the now-defunct Noobing autosurf, which also targeted the deaf. Noobing became popular in the aftermath of the August 2008 federal seizure of tens of millions of dollars in the AdSurfDaily Ponzi scheme case.
Despite the federal seizure, some ASD members promoted Noobing. Noobing effectively went bust in July 2009, when the FTC charged its parent company — Affiliate Strategies Inc. — with pushing a scheme that promised “guaranteed” government grants of $25,000 from economic stimulus funds.
Noobing later was named a receivership defendant in the case. Receiver Larry Cook sold the company’s assets lock, stock and barrel — right down to a lavatory wastebasket. Like ASD, Noobing’s parent firm also owned a jet ski. Cook sold that, too.
Despite dramatic asset seizures and the federal actions against ASD and Noobing’s parent — and despite previous actions against autosurfs, including 12DailyPro, PhoenixSurf and CEP — some ASD members have continued to promote autosurfs.
This has occurred against the backdrop of a racketeering lawsuit against ASD President Andy Bowdoin and public filings in which prosecutors claimed Bowdoin had signed a “proffer” letter in the case and met with members of law enforcement over a period of four days in December 2008 and January 2009.
It also is known that Interpol is seeking the arrest of Robert Hodgins, whose Dallas-based debit-card company, Virtual Money Inc., is alleged to have agreed to launder drug money in the Dominican Republic and assist a Colombian drug operation launder money at ATMs in Medellin.
ASD members said Hodgins’ company supplied debit cards to AdSurfDaily, and web records suggest that Hodgins or a Virtual Money designate attended an ASD function in the Orlando area in late 2006.
Even though Bowdoin acknowledged in court filings that he had given information against his interests to the government, some ASD members continue to promote autosurfs and HYIPs. After signing the proffer letter and surrendering his claims to more than $65.8 million seized from his personal bank accounts, Bowdoin later reentered the case as his own attorney.
One of Bowdoin’s 10 personal bank accounts contained more than $31 million, according to court filings. Another contained more than $23 million. Three other bank accounts contained the exact same amount — a little over $1 million.
After submitting to the forfeiture in January 2009, Bowdoin fired his attorneys without notice and attempted to reenter the case weeks later as his own attorney. This set in motion a series of bizarre pleadings from Bowdoin, including one in which he claimed he had not been provided “fair notice” of his illegal conduct by the government. ASD members by the dozens then filed their own bizarre, pro se pleadings. U.S. District Judge Rosemary Collyer ruled against each of the filers, saying they had no standing in the case.
Collyer since has ruled against Bowdoin, awarding title to more than $80 million seized in the case to the government, which said it intends to implement a restitution program. Bowdoin is appealing Collyer’s forfeiture decisions.
Court filings show that Bowdoin told Collyer the seized money belonged to him. In September 2009, the U.S. Secret Service presented Collyer a transcript of a conference-call recording in which Bowdoin told members the money belonged to them. Although Bowdoin insisted he had big plans for ASD, records show that he let the firm’s registration lapse in the state of Florida — even as he was telling members they should be excited about the company’s future.
In the recording, Bowdoin claimed his fight against the government was inspired by the compelling personal story of a former Miss America.
A Dallas man accused of fleecing investors in oil-and-gas schemes that gathered $535 million in Texas and Michigan has pleaded guilty to his role in the alleged schemes.
“Investment fraud is, at its core, a betrayal of trust by one person to another,” said U.S. Attorney John M. Bales of the Eastern District of Texas. “We will be relentless in our pursuit of those individuals responsible for abusing the trust of others in order to obtain criminal profits.â€
Joseph Blimline, 35, was accused of making “materially false representations” and failing to disclose material facts as a representative of Provident Royalties, which was implicated in a securities swindle by the SEC.
Blimline, who faces up to 40 years in prison after pleading guilty to two counts of conspiracy, previously had been charged with securities fraud by the state of Michigan, prosecutors said.
Provident was accused by the SEC in July 2009 of orchestrating a $485 million offering fraud involving more than 7,700 investors. Blimline was accused of orchestrating a separate fraud in Michigan that involved $50 million.
UPDATED 7:11 P.M. EDT (U.S.A.) When U.S. District Judge James Rosenbaum sentenced Ponzi schemer Trevor Cook to a quarter of a century in federal prison earlier this week, the judge used some powerful words to describe Cook’s colossal fraud.
Rosenbaum described the scheme that bilked investors out of at least $158 million as “wretched, tawdry and cheap.” Some of the victims were rendered destitute.
It’s easy to see why a federal judge would use such words. Not only did Cook steal by the tens of millions of dollars, he stole even after the SEC and the CFTC went to court last November to bring the scheme to a halt. Cook spent money that had been frozen by court order, thus thumbing his nose at both victims and the judicial system. He later failed to disclose the whereabouts of assets — this until he failed a lie-detector test.
All of those acts — and the $190 million scheme itself — easily qualify as “wretched, tawdry and cheap.” One could argue rationally that even stronger adjectives could be applied to Cook’s behavior and still fall within the bounds of decorum.
And this brings us to the subject of AdSurfDaily — specifically, what at least one member appears to be doing to recruit former ASD members and people interested in ASD into yet-another scheme.
That’s been done before, of course. AdViewGlobal, itself a scheme that could be described fairly as “wretched, tawdry and cheap,” rose from ASD’s ashes to bilk anew.
Along those lines, who could forget MegaLido? It was yet another autosurf that became popular in the aftermath of the domestic seizure of tens of millions of dollars in the ASD Ponzi case. One former ASD member described MegaLido as “fool proof.”
It’s “OFFSHORE!!!” he exclaimed.
Some ASD members also saddled up and starting promoting the Noobing autosurf, which targeted people with hearing impairments. There were plenty of HYIPs, too. These included Genius Funds, believed to have gathered up more than $400 million; Gold Nugget Invest, which promoted itself as a betting arbitrage and later implied in was in Forex; and CashTanker, which used an image of Jesus in its sales pitch.
Look here to see a list of some of the “programs” promoted by ASD members. (Most of the programs, by the way, were promoted after the ASD seizure.)
How To Irritate A Sleeping Dog
At 9:05 p.m. yesterday, Maddy the Wonder Puppy — always and forever a wonder puppy in my mind, even though she’s two now — was going through her endearing presleep maneuvers under my desk. This is one of those things that make me feel good about the world.
As Maddy was going through her positioning dance and stretching and yawning routine, an email popped into my box. It proved to be one of those things that make me feel bad about the world.
“input on opportunity” — all lowercase — was the subject line of the email. So, I knew right away that I was about to get a sales pitch — and I suspected before opening it that was going to a disingenuous pitch at that.
“I used to belong to ASD,” the email began. “Need your input on UniqueBuyingClub.”
OK. Here’s what’s important so far: The pitch was completely unsolicited and came through the Blog’s support address; it used ASD’s name (sixth word) to catch my attention; the subject line suggested I was being asked for “input,” as though the sender saw something fishy on the Internet and wanted to get my take on it; and the pitch proved to be for MPB Today, not an entity called “UniqueBuyingClub.”
Let’s proceed. It gets worse.
The first affiliate link appeared 12 words into the pitch, meaning I wasn’t really being solicited for input — unless it was input after the fact — because the sender already had registered for MPB Today. (Note: I checked the email address of the sender against the affiliate email addresses on the MPBToday page. They matched, meaning it is highly likely that the sender was an affiliate who was spamming me.)
There was no way to unsubscribe from the “list” I now found myself on. (BTW, I’m wondering if the sender knows if Warren Buffet and Donald Trump really have endorsed MPB Today, a business that bizarrely mixes the home delivery of groceries with a 2×2 cycler. Their pictures are right at the top of the sales page, which implies an endorsement. Perhaps MPB Today missed the news about the FTC action last week in a case that alleges an Internet Marketing company that hawks Acai berry products tried to make people believe Oprah and Rachel Ray were on board.)
But it got worse from there. Not only was the “UniqueBuyingClub” angle confusing, the link asked me to visit a site called WeCreateRiches. Then, a second link asked me to visit the MPB Today site. We are only 14 words into the pitch at this point.
Let’s take another brief pause. The import of what’s happening here is that a former ASD member who perhaps got bilked in a $100 million MLM and securities scheme that promised riches now is urging me to visit a website called WeCreateRiches to sign up for a company that uses a home-delivered groceries business to promote an MLM scheme that uses a 2×2 matrix cycler. The U.S. Secret Service, which is investigating ASD, also has experience investigating cyclers.
Prior to receiving the email, I knew about MPB Today, which Rod Cook had written about. I just haven’t gotten around to writing about it yet, mostly because there is only so much time in the day. In some ways, I almost hate to write about it because writing about it potentially means that the MLM Stepfords will come of the woodwork to “defend” the company. It also potentially means the Blog will start getting spam from people angry that I dared mention the MPB Today name on a blog about scams. (Spam, in this context, means people who “defend” the company not by leaving a comment that actually defends the company, but by submitting their affiliate link on the theory that they might be able to cherry-pick a new downline member from the Blog’s readership ranks.)
In any event, the email went on to inform me that “Walmart is loving the results!!” generated by MPB Today.
Oh, really? I do hope the sender leaves a comment in this thread to substantiate the Walmart claim. It will spare me some work.
The email also wished me “Blessings and hope through your connections,” while urging me to “Please get back to me and let us help many ASD members who lost money and hope.”
Well, email sender, consider this post “getting back” to you.
It is my view that your email — and I haven’t gotten into the most revolting part yet — is “wretched, tawdry and cheap.” Like Judge Rosenbaum, I feel that way about Trevor Cook’s actions — as I do the actions of ASD’s Andy Bowdoin, who also traded on religion.
Take your “blessings” and “hope” elsewhere. I think the idea of using religion and identifying yourself as an ASD member to pitch other ASD members on MPB Today is “wretched, tawdry and cheap.”
Meanwhile, I think that sending a reporter who covers fraud schemes an email titled “input on opportunity” also is “wretched, tawdry and cheap.”
It makes me believe you’d sell anything for a commission and say anything to gain a commission. My thoughts on this subject were further reinforced this morning when I learned you sent a largely identical email to another forum.
“Blessings,” the email to the other forum concluded.
It made me want to retch. Is this what you believe Internet Marketing to be?
OK. Here’s the part of the pitch that irked me most (emphasis added):
“Just go online and order. BUT if you introduce club to just TWO and help those two introduce to two that completes ONE cycle for you. YOU – plus those six, Only qualification to be part of this is to introduce to TWO , but you may choose to get crazy and promote to many to inc. cycling. When you finish cycle one – go to backoffice and order grocery.goods BUT now company pays all shipping OR replace that voucher for a $200 WalmartGiftCard to go into the store and PLUS company sends you a $300 check to spend whereever. You NEVER add another dime. You may cycle as often as you please. People here in Orlando are cycling two to seven times in a week. There is so much excitment because people are hurting and now they can go get FREE groceries/goods and FREE gas at SamClub.”
Yep. Florida. Again.
Florida was ASD’s home. Florida means retirees — and ASD members again are being targeted in pitches to send money to MPB Today, whose headquarters also happens to be in Florida.
“Blessings,” the emailer wrote — in pitches to both places — while also claiming her “girlfriend did [a] background check” and that “all is good” in the land of 2×2 cyclers targeted at victims of previous fraud schemes and prospects from a state favored by retirees who saved to get there.
Florida has one of the highest foreclosure rates in the United States. Just three seconds — three seconds — into the video pitch for MPB Today, the word “Foreclosure” appears on the screen. It appears again at the 11-second mark.
In MPB Today’s world, the apparent remedy for the foreclosure problem is to get Florida seniors and other struggling residents to join a 2×2 cycler.
BULLETIN: Ponzi schemer Trevor Cook has been sentenced to 25 years in federal prison for his role in an international Forex Ponzi scheme that gathered more than $190 million and fleeced victims out of more than $158 million.
In ordering the prison term, U.S. District Judge James Rosenbaum sided with the prosecution’s recommendation of a quarter of a century. It is believed to be the longest prison term ever imposed in a Minnesota financial-fraud case in which the defendant pleaded guilty.
“Such a sentence fairly, adequately, and justly punishes the defendant for his offense, reflecting the seriousness of the offense, his willingness to plead guilty and provide information to law enforcement, and the need to protect the public,” prosecutors said last week in a sentencing recommendation to Rosenbaum.
“Over the course of a few years, the defendant executed an investment fraud, victimizing approximately 923 victims and defrauding them of over $158 million,” prosecutors said. “As is all too common, the defendant often used victims’ religious beliefs as a means of enticing them to give him their money.”
Cook, 38, is not out of legal harm’s way — even with the sentence of 25 years. Prosecutors disclosed last week that he has signed a waiver that would subject him to further punishment if the ongoing investigation shows he has “somehow secreted undisclosed assets.”
Victims have expressed concerns that Cook could have stashed money from the scheme anywhere on earth. Cook failed a lie-detector last month about the whereabouts of assets.
FBI and IRS agents later found more than $400,000 in undisclosed assets under the control of Graham Cook, Trevor Cook’s brother.
Despite Cook’s lack of disclosure, prosecutors contended that it made no sense to delay Cook’s sentencing any longer as the asset search by the government and R.J. Zayed, the court-appointed receiver in a civil case filed against Cook and former Christian radio host Pat Kiley last year by the SEC and the CFTC, continued.
Cook had been scheduled to be sentenced last month. Kiley, who called his radio listeners “truth seekers,” has not been charged criminally in the case.
“The government has worked closely with the court-appointed receiver to assist its efforts in finding and identifying assets,” prosecutors said of Cook. “The government and the receiver now agree that any additional time prior to sentencing will not result in any additional information or assistance to the receiver’s efforts.”
It is possible that Cook could prove to be a valuable source of information for the government — in the same sense that disbarred attorney, convicted racketeer and Ponzi schemer Scott Rothstein has become an information source.
Rothstein, who presided over a $1.2 billion Ponzi scheme in Florida, was sentenced to 50 years in federal prison earlier this year. It is known that Rothstein has provided information helpful to the government.
Cook “has been repeatedly debriefed by law enforcement in an effort to identify assets and to provide information regarding other individuals,” prosecutors said. “He has done so. The information has been of assistance to law enforcement in its ongoing investigation.”
Ponzi schemes are toxic — and frequently are incredibly elaborate. Court documents in case after case show that the schemes frequently feature schemes within schemes and elaborate money-laundering networks. Criminals often go to fantastic lengths to disguise the conduits of the schemes, using shell companies and multiple bank accounts to funnel money and make the schemes difficult to reverse-engineer.
FBI Director Robert Mueller has warned Congress at least twice this year about a “shadow” banking system criminals employ and an increasing reliance on “shell corporations†to commit crimes and hide from investigators.
Cook’s scheme featured companies with confusingly similar names.
Records show that Cook had a tie to a company the AdViewGlobal (AVG) autosurf claimed to be its facilitator of offshore wires.
KINGZ Capital Management, AVG’s purported facilitator, denied any affiliation with AVG, which has close ties to the AdSurfDaily autosurf. ASD is implicated in a Ponzi scheme alleged to involve tens of millions of dollars.
AVG collapsed in June 2009, after running a virtually nonstop promotion that advertised matching bonuses of 200 percent for both recruits and their sponsors.
The National Futures Association said last year that Cook was managing money for KINGZ. AVG made the claim KINGZ was its wire facilitator on May 4, 2008 — the same day the Obama administration announced a crackdown on offshore fraud.
Yet another HYIP scheme pushed on the TalkGold and MoneyMakerGroup forums has been outlined by federal prosecutors — this time in Florida.
The name of the scheme was Alpha Trade Group (ATG), and web records show that the scheme was pitched on TalkGold and MoneyMakerGroup beginning on Oct. 7, 2009. Court records, meanwhile, show that ATG already was under investigation by the U.S. Department of Homeland Security when the first posts to promote the scheme appeared on the forums.
Just days earlier, on Sept. 25, 2009, a U.S. bank closed an account prosecutors later linked to the scheme, according to court records. Taken together, the court and web records strongly suggest that the ATG investment “opportunity” first was advertised on MoneyMakerGroup and TalkGold when the scheme already was in a state of collapse because one of its key money conduits had been blocked.
This screen shot shows the first post about Alpha Trade Group appeared at the MoneyMakerGroup Ponzi forum on Oct. 7, 2009 — days after a U.S. bank already had closed an account linked to the scheme amid fears it was being used to launder money.This screen shot, taken from Paragraph 23 of a federal affidavit in the ATG Ponzi case, shows that a U.S. bank closed an account later linked to the scheme at least 12 days prior to the ATG promo on the MoneyMakerGroup forum. Court records show the scheme already was under investigation by federal authorities before the sales posts were made on the MoneyMakerGroup and TalkGold forums.
It is possible that the scheme was in a state of collapse even earlier than September 2009. Court records show that at least one bank account tied to the business was closed on June 18, 2009 — nearly four months prior to the first posts promoting the scheme on MoneyMakerGroup and TalkGold.
One MoneyMakerGroup poster — apparently angry that the program was being advertised in public — scolded the poster who started the thread.
“Please take down your posts,” the scolder wrote. “ATG asked all of the members not to advertise. Otherwise your account with the company will be closed. Go to recent e-mails from the company. This is serious. Please comply.”
The post scolding the advertiser appeared on Oct. 29, more than three weeks after the original sales pitch appeared on the forum and more than a month after federal agents began their probe into ATG.
By Feb. 22, 2010, federal prosecutors and Immigration and Customs Enforcement (ICE), a division of the U.S. Department of Homeland Security, were in federal court in Orlando filing a forfeiture complaint.
The Feds sought the seizure of $316,418.50 in a bank account linked to the scheme, according to court records. The forfeiture complaint alleged a Forex Ponzi scheme, and prosecutors linked the fraud to ATG, a Florida company known as Online Market Solutions and at least four individuals: Jose Cecilio Martinez Beltran, Francisco Amaury Suero Matos, Yehodiz Padua Valentin and Welinton Bautista Castillo.
Unnamed “others” also were referenced in the complaint.
“Investment opportunities offered by Alpha Trade Group promised participants unusually high monetary returns on investments and for referring other persons to the programs,” prosecutors said, in a statement to victims. “In reality, the investment opportunity was little more than ‘Ponzi’ or ‘Pyramid’ scheme, in which if participants actually received funds, those funds were generated by investments made by other Alpha Trade Group investors.”
A federal judge ordered the money forfeited on July 26, according to court records.
The case was brought by the office of U.S. Attorney A. Brian Albritton of the Middle District of Florida. Albritton’s office is handing a number of highly complex financial-fraud schemes.
Websites such as TalkGold, MoneyMakerGroup, ASAMonitor and MyCashForums have promoted one fraud scheme after another. TalkGold, MoneyMakerGroup and ASAMonitor are specifically referenced in court documents filed in the Pathway To Prosperity (P2P) fraud scheme.
P2P’s Nicholas Smirnow was charged in May by the U.S. Postal Inspection Service and federal prosecutors in Southern District of Illinois with operating a massive HYIP Ponzi scheme that affected investors across the world.
MoneyMakerGroup also is referenced in court filings by the SEC in the alleged Legisi Ponzi scheme.
Earlier this month, the U.S. Department of Justice announced that the U.S. Secret Service had helped bring about the arrest in France of an alleged international thief in part by monitoring criminal forums.
Vladislav Anatolievich Horohorin, 27, was arrested by French authorities in Nice. Court filings show that the Secret Service used undercover agents and “undercover communications” to develop the case.
Federal records show that ATG purported to be registered in Panama and was using “various corporations and fictitious names registered in Florida” to pull off the scheme.
Among the names used was “Orsa Investment Group LLC,” according to an affidavit filed in the case. The scheme began in April 2009, according to court filings.
An ICE agent said in an affidavit that the Internet and “business opportunity meetings” in Central Florida were used to promote the scheme.
Read the ATG forfeiture complaint, which paints a picture of a commission-based, multilevel-marketing (MLM)Â scheme within a Forex fraud scheme — and other schemes within schemes.
Robert Hodgins of Dallas-based Virtual Money Inc. is wanted by Interpol in an international money-laundering case that allegedly involves proceeds from the sale of narcotics. Virtual Money Inc.'s name is referenced in the AdSurfDaily autosurf Ponzi scheme case brought by the U.S. Secret Service and the PhoenixSurf autosurf Ponzi scheme case brought by the Securities and Exchange Commission. The case against VM and Hodgins was brought by the U.S. Drug Enforcement Administration and the IRS. PHOTO SOURCE: Interpol.
A Colombian national implicated in an international conspiracy to launder drug money has been sentenced to 45 months in prison, federal prosecutors announced.
Meanwhile, another figure in the alleged scheme — Robert Hodgins, the operator of Dallas-based Virtual Money Inc. (VM) — remains at large, prosecutors said. Hodgins is wanted by Interpol on a warrant issued by a federal judge in Connecticut.
Hodgins is Canadian by birth and lived in the Oklahoma City area of the United States, according to records.
VM’s name is referenced in the forfeiture allegations in the AdSurfDaily autosurf Ponzi scheme case brought by the U.S. Secret Service in the District of Columbia in August 2008. It also is referenced in the PhoenixSurf Ponzi prosecution brought by the SEC in Los Angeles in July 2007.
Juan Merlano Salazar, 36, of Medellin, Colombia, was sentenced to 45 months Aug. 9 by U.S. District Judge Mark R. Kravitz of the District of Connecticut. Salazar is among five defendants convicted so far in the money-laundering case, which allegedly involved the use of debit cards provided by VM to launder drug proceeds at ATMs in Colombia, according to court filings.
Hodgins also is alleged to have accepted $100,000 to launder drug proceeds in the Dominican Republic.
The Colombian narco business used “stored value cards” to enable drug proceeds to be withdrawn from banks in Medellin as Colombian pesos, prosecutors said.
Medellin was home base to the late drug lord Pablo Escobar.
In August 2009, the PP Blog reported that VM’s name appeared in advertising materials for ASD in 2007. Records suggest that Hodgins or a VM designate attended an ASD function in Orlando in November 2006, about a month after ASD began its rollout.
This 2007 ad for ASD promoted the VM debit card.
Some ASD members have said they observed large sums of cash and briefcases full of cashiers’ checks at ASD “rallies” in U.S. cities in the spring and summer of 2008, which led to questions about whether ASD was laundering money for a drug cartel and international criminals.
If the allegations against VM and Hodgins are true, it means the company that provided the debit cards ASD used was in the business of laundering money for at least one international narco business.
On Aug. 1, 2008, the U.S. Secret Service seized more than $80 million in the ASD case. The money allegedly was tied to at least three autosurfs: ASD, GoldenPandaAdBuilder and LaFuenteDinero.
ASD, which had operated under at least one other name and perhaps as many as three or more, claimed in 2007 that one of the reasons it could not make payments to members was that $1 million had been stolen by “Russian” hackers.
Prosecutors said ASD never filed a police report — not even to report the theft of a huge sum of money. ASD instead relaunched as ASD Cash Generator. By the summer of 2008, it was gathering tens of millions of dollars per week.
One bank account in the name of ASD President Andy Bowdoin seized by the Secret Service contained more than $31 million, according to court filings. Another account in Bowdoin’s name contained more than $23 million. Bowdoin was referenced as the “Sole Proprietor” of the accounts.
All in all, the Secret Service seized more than $65.8 million from 10 Bowdoin bank accounts, and more than $14 million from at least five bank accounts linked to Golden Panda, according to records.
A Texas man paid a Belize company to produce ads that ran on CNBC and Fox Business News for his oil-and-gas venture, but the offer proved to be fraudulent and the SEC has filed an emergency court action to stop the scheme, the agency said.
Jon C. Grinder of Houston used “at least” $210,000 of investor funds to pay the offshore firm to launch the TV ads, which claimed investors could earn annual returns of up to 40 percent from “low risk producing wells.”
Ginder personally called prospects who responded to the ads. The SEC described the scheme as multilayered, saying Ginder “fraudulently raised approximately $3.5 million from over 50 investors nationwide through three unregistered oil and gas limited partnership offerings.”
Investors were told their money would be used to purchases leases and renovate existing wells to enhance production, amid claims that “historical oil and gas data” suggested production would surge once the properties were improved.
The SEC described the claims as “wildly optimistic” and “fraudulent on their face” because “the historical oil and gas production from the partnership leases was very poor” and “many of the wells had no recent production history.”
In one of the offerings, annual production was estimated at 91,000 barrels even though the wells had produced a total of only 67,000 barrels in the preceding 15 years.
“There were no reserve reports or any other credible basis upon which he could form a reasonable belief that the wells could be reworked to yield a production rate in a single year that would exceed over 135 percent of the prior combined 15 years[‘] worth of productivity,” the SEC said.
During the first year of the venture (2008), total production after several wells “purportedly” were reworked topped out at only about 3,522 barrels — a far cry from the projection of 91,000 barrels, the SEC said.
In 2009, the agency said, production topped out at about 3,986 barrels.
Ginder continued to raise funds based on the same “false and misleading” projections through March 2010, while also failing to disclose the venture was operating at a loss, the SEC said.
But production misrepresentations were only part of the scheme, the SEC said.
Ginder, according to the agency, also used investor funds to provide an unauthorized, interest-free loan of $300,000 to a penny-stock company “founded by his friend and in which Ginder owned stock.”
The penny-stock firm “failed to repay the loan,” the SEC said.
Ginder also did not disclose that $800,000 in investor funds were used to purchase leases from a private company he controlled, netting him a cash profit of $700,000 and 10 “partnership units” worth $60,000 each, the agency charged.
All in all, Ginder netted $1.3 million from self-dealing, the SEC alleged.
The SEC has asked a federal judge to freeze Ginder’s assets, along with the assets of two related companies: Northamerican Energy Group Inc. (NEG) and Northamerican Energy Group Corp. (NEGC). The agency alleged that the scheme operated between February 2008 and May 2010.
BULLETIN: The SEC has gone to federal court in Florida to accuse Quri Resources Inc. and its Chief Executive Officer Jaime Santiago Gomez of operating a pump-and-dump scheme to drive up the price of Quri’s unregistered stock.
