Tag: Secret Service

UPDATED 5:25 P.M. ET (U.S.A.) KINGZ Capital Management Corp. (KCM) might have been used or contemplated for use as a tool in two far-reaching, incredibly elaborate Ponzi schemes, according to an analysis of public records and other information.

One of the schemes ultimately appears to have consumed tens of millions of dollars in a squalid venture that used a royalty theme trading off the name “Crown.” It involved purported forex trading in Switzerland under the name “Crown Forex SA” and an American namesake called “Crown Forex LLC” allegedly set up to confuse investors and perhaps authorities.

The other scheme, which appears to have been nipped before it could mushroom on a grand scale, sought to kickstart a rapidly collapsing autosurf believed to be an offshoot of an existing criminal enterprise desperately seeking to extend its reach from the United States into the Caribbean, Central America, South America and perhaps Europe to keep itself alive.

The first scheme, which included other confusingly similar corporate names such as Oxford Global Partners LLC and Oxford Global Advisors LLC, became the subject of fraud charges filed by the SEC and the CFTC in November. Investors appear to be out tens of millions of dollars.

Charged in the $190 million November case were Trevor Cook, former Christian radio host Pat Kiley and several other companies. The allegations paint the picture that Crown Forex LLC set up a U.S.-based bank account to siphon money investors believed was destined for the Swiss entity, which they knew as Crown Forex SA.

“Cook and [Pat] Kiley, directly and acting through others, deposited checks from many investors, into a U.S. bank account in the name of a domestic shell company, with a name — Crown Forex, LLC –  that was misleadingly similar to the Swiss firm Crown Forex, S.A.,” the SEC said.

Cook was jailed earlier this week for violating a court order that required him to turn over assets.

Separately, the National Futures Association (NFA) charged KCM in September with permitting Cook — who was not accredited and previously was disciplined by NFA for highly questionable business practices — to manage a KCM fund that purportedly contained “somewhat above and below $300 million” between September 2008 and July 2009.

KCM now has been permanently banned from NFA membership. David Krywenky, KCM’s vice president, has been banned for three years.

It’s anybody’s guess how much money the fund actually contained and what happened to the money. The SEC, the CFTC and a court-appointed receiver are turning over numerous domestic and international rocks to find assets of Cook and Kiley’s alleged epic fraud.

NFA’s allegations against KCM are disturbing. Not only was Cook managing a KCM pool known as KCI, according to the allegations, Cook’s Oxford Global Partners “appeared to be the only investor” in the KCI pool and all of the pool’s money was dumped into Crown Forex SA, a company in which Cook purportedly owned a majority stake and a company Swiss authorities declared bankrupt.

Was Cook At The Intersection Of A Second Scheme?

The second scheme to which KCN’s name has been linked was called AdViewGlobal (AVG), an autosurf purportedly headquartered in Uruguay but believed actually to have operated from inside the United States, most likely from Florida but perhaps also from Arizona. Autosurfs pose as “advertising” companies to skirt securities laws, authorities say.

AVG had close family, membership and promoters’ ties to AdSurfDaily, a Florida company implicated by the U.S. Secret Service in a $100 million Ponzi scheme. Federal prosecutors are well aware of AVG. So are attorneys suing ASD President Andy Bowdoin and ASD attorney Robert Garner for racketeering.

KCM’s tie to AVG  — according to AVG — was as the surf’s new facilitator of offshore wire transfers after AVG earlier had lost access to a bank whose name was not disclosed. AVG, among other things, claimed to own a payment processor known as eWalletPlus.

Records suggest eWalletPlus was an extension of corporate shells in Nevada and Arizona. At least two other companies claimed to own eWalletPlus during the same time period in which AVG claimed ownership. In March 2009, AVG announced its back account had been suspended. Problems with eWalletPlus were reported at the same time.

AVG identified KCM as its new wire facilitator on May 4, 2009, the same day the Obama administration announced a crackdown on international financial fraud. KCM denied AVG’s claim on May 7, saying it believed AVG had targeted it in a scam and perhaps was tying to use a third company based in Florida to route money to itself.

KCM identified the third company as Living Legacy One LLC. Records in Florida identified Gerald Castor as Living Legacy One’s principal, and a communication from AVG identified Castor as an employee of the surf’s “Compliance” department.

Michael P. Krywenky, David Krywenky’s father, denied any AVG ties in an interview with the PP Blog. The interview was conducted in May 2009, after Michael Krywenky contacted the Blog and asked it to remove a story citing AVG’s wire claim.

The Blog declined to remove the story. Instead, it published a story about Michael Krywenky’s denial. The story was based on an interview the Blog conducted with Michael Krywenky and an email Michael Krywenky sent the Blog on May 7, 2009.

“I think that we may be victims of a scam here and we are investigating this further at our end as well,” Michael Krywenky said in the email.  “Thank you for bringing this to our attention. In the meantime, we please (sic) remove this posting since it contains false information that is detrimental to our company.”

A month later, in June 2009, the SEC began to investigate the Cook/Kiley entities. By September 2009, the NFA was accusing David Krywenky and KCM of permitting Cook to manage an investment fund and not making a claim for money lost when the Swiss entity went bankrupt.

Whether NFA questioned David Krywenky and KCM about AVG is unclear.

“KCM and D. Krywenky failed to act in the best interests of KCI’s participants, both known and unknown, in that when they knew or should have known that funds on deposit at Crown Forex, SA were frozen pursuant to that firm’s bankruptcy they took no action on behalf of the KCI pool to participate in the bankruptcy as a creditor or otherwise protect KCI’s equity,” NFA said.

NFA further accused David Krywenky and KCM of turning a blind eye to Cook, now implicated with Kiley in a colossal fraud.

AVG, which shielded members from knowing the identities of its owners by signing communications “The AVG Management Team,” never explained how it had identified KCM as a possible facilitator. The surf also ignored Michael Krywenky’s public denial that it had any business relationship with AVG, explaining that the wire deal it had announced as completed only days earlier — up to and including providing detailed wiring instructions — had fallen through as a result of failed negotiations.

Meanwhile, the surf also did not address Michael Krywenky’s claim that AVG appeared to be trying to route money to itself through Living Legacy One, the entity associated with Castor.

Michael Krywenky said KCM was consulting with attorneys to address AVG’s false claims and that the company had taken steps to ensure AVG could not receive money through KCM. AVG spent the balance of May promoting the launch of a new website and telling both prospects and recruiters that they could earn matching bonuses of 200 percent for sending money to the company or causing money to be sent to it.

Like ASD, AVG used offshore payment processors such as Canada-based Solid Trust Pay.

AVG collapsed in June, taking an unknown amount of money with it. Before the collapse, AVG identified George and Judy Harris of Tallahassee, Fla., as its owners. They previously had been identified as “Trustees” of AVG’s “private association,” which had cited U.S. Constitutional protections while purporting to he headquartered in Uruguay.

AdSurfDaily members later said ASD President Andy Bowdoin was a silent partner in AVG, claiming that Bowdoin had dispatched George Harris to Switzerland to establish bank accounts.

George Harris is Bowdoin’s stepson. The Harrises were named beneficiaries by the U.S. Secret Service of ASD’s illegal conduct in December 2008. AVG formally launched two months later, in February 2009, after the Harrises and Bowdoin’s wife, Edna Faye Bowdoin, had been named recipients of ill-gotten ASD gains — and after a major court ruling went against ASD, and after Bowdoin had been named a defendant in a racketeering lawsuit brought by members.

In May 2009 — the month during which AVG purportedly had turned to KCM to establish a wire facility and during a period in which Trevor Cook allegedly was managing money for a KCM entity known as KCI — the alleged Cook/Kiley Ponzi scheme appears to have been collapsing.

Cook has not been publicly linked to AVG. At a minimum, however, someone within AVG appears to have identified Barbados-based KCM as a solution to the company’s wire problem — and the NFA allegations establish a tie between KCM and Cook.

At least for a few days in May 2009, AVG was sufficiently confident that its wire problem was solved, so much so that it provided members detailed wire instructions with KCM’s name and an account number.

Given the nature of NFA’s allegations that Cook somehow had wormed his way into KCM’s purported forex operations with KCM turning a blind eye, it is reasonable to ask whether Cook also somehow had wormed his way into an intersection at which he could have cherrypicked funds from other KCM customers — and whether AVG and other autosurfs and HYIPs had turned to KCM to solve domestic banking and wire problems.

Investigators might be interested in determining if Cook somehow positioned himself to cherrypick  fresh autosurf cash and apply it to his alleged existing Ponzi scheme, thus funding it with proceeds from other Ponzi schemes. Indeed, it is reasonable to ask if Cook’s influence with KCM extended from the forex fund to other areas of the business.

Why?

Because KCM, which became an NFA member in November 2007, issued two news releases less than a year later — in October 2008 — announcing it was managing more than $330 million. In a release dated Oct. 15, 2008, KCM said it had “received investment subscriptions of $334,263,000.” In a release eight days later — on Oct. 23, 2008, KCM said “clients who participated in their first raise of just over $330 Million US . . . have reported a very steady and consistent cash flow and rate of return.”

The Star-Tribune of Minneapolis/St. Paul, quoting a lawyer for KCM,  reported in November 2009 that Cook offered to provide KCM start-up funding. KCM executives met Cook at a function in West Palm Beach, Fla., according to the attorney. Florida has become Ground Zero for Ponzi schemes.

A Mysterious Investor

NFA asserted in this filing that Cook perhaps peeled off $75 million from the purported Swiss fund and directed it to a mysterious investor. Cook also was alleged to have changed “passwords” on KCI “accounts” as part of the scheme.

KCM, according to the NFA allegations, “permitted Cook to effectuate a purported $75 million withdrawal from KCI’s trading accounts for a purported [Oxford Global Partners] investor who was identified to them by Cook only as “Fased.”

KCM is said to be cooperating with investigators from more than one state and federal agency.

It is unclear if “Fased” is a person, a business, an acronym, a proper name, a misspelling of the word “phased” or a slang spelling of “phased,” an amalgamation of some sort or a complete fiction.

What is clear is that Cook allegedly was managing money for KCM, a company to which AVG said it had turned last year to facilitate offshore wire transfers. AVG’s announcement — and the subsequent actions by the NFA, the SEC and the CFTC, may put KCM at the intersection of two murky worlds — the worlds of underground currency-trading schemes and offshore autosurf and HYIP schemes that promise enormous returns.

It’s worth investigators’ time to check it out — if for no other reason than to rule out the possibility that Cook also was playing the autosurf and HYIP games either as an investor or by somehow positioning himself at an intersection in these noxious worlds to siphon funds and divert them to his alleged principal Ponzi scheme.

What’s more, an HYIP known as Gold Nugget Invest (GNI) collapsed earlier this month, several weeks after NFA brought its action against KCM, and the SEC and CFTC brought their actions against Cook and Kiley.

GNI reportedly was having trouble accessing needed funds in a European bank, but announced a “Re-organization” plan that would reduce payouts from 7.5 percent a week to a mere 20 percent a month.

No, it’s not a misprint. GNI purportedly launched in October 2006, the same month AdSurfDaily was preparing for launch. ASD promoters advertised returns of 1 percent a day for viewing “advertisements.” Prosecutors said it operated as a virtually pure Ponzi scheme.

Some GNI members have referred to money — or representations of money — in their “ewallets.” It is unclear if the “ewallets” to which they refer have any connection to eWalletPlus or if the term “ewallet” is being used as a generic.

What is clear is that HYIP, autosurf and forex schemes have many players in common — and that tremendous sums of money go missing routinely.