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Tag: Shawn Henry

  • UPDATE: Antihistorical ‘MoneyMakingBrain’ Claim: ‘Law Enforcement Agencies Don’t Pay Attention To What’s Being Said On Forums And Blogs’

    “There is a line between First Amendment Rights vs. Libel here. So, when does your right to form an opinion begins (sic) and when does it constitute a defamation of character? The answer is, law enforcement agencies don’t pay attention to what’s being said on forums and blogs, so get your head straight and feet firm on the ground.” — “MoneyMakingBrain,” in March 4, 2012, post on RealScam.com

    As previously reported on the PP Blog, a JSS Tripler/JustBeenPaid “defender” known as “MoneyMakingBrain” (MMB) has emailed threats to the PP Blog, hatched bizarre conspiracy theories here and at RealScam.com and planted the seed that he was someone to fear.

    The email threats were received after MMB claimed Feb. 18 on RealScam he had performed “due diligence” on JSS Tripler/JustBeenPaid. On a website known as “ReviewOPedia,” a poster with the same handle offered this on Feb. 14, in the context of JSS Tripler/JustBeenPaid:

    “They are for real! ”

    Within the same Feb. 14 ReviewOPedia post, MoneyMakingBrain ventured this (italics added):

    “BTW, everybody should check out the JBP live support chatroom which has over 160 people at any given time and is live 24/7. You can ask all the questions you can come up with and there is always moderator. Who does that? I’m sold already. So, if someone here claims that they ‘didn’t get paid’, either they still don’t understand how the matrix works or they’re just internet trolls.”

    Whether the “MoneyMakingBrain” on the PP Blog and the “MoneyMakingBrain” on ReviewOPedia are one and the same is unknown to the PP Blog.

    Precisely why the MMB known to the PP Blog and RealScam.com has been trying to chill specific individuals and antiscam forums is unclear. What is known is that what he’s doing is hardly unique.

    Lessons Of HYIP History Ignored

    While asserting that he knows the PP Blog’s IP address and posting location, MMB now is making a claim on RealScam, a forum that concerns itself with international mass-marketing fraud, that “law enforcement agencies don’t pay attention to what’s being said on forums and blogs.”

    That claim is contrary to the public record, which shows that any number of agencies, self-regulatory bodies and private attorneys have been noting for years that HYIP schemes are proliferating on the Internet and being spread by posters on forums and social-networking sites. It also ignores the reality — also a matter of public record — that law-enforcement has a history of filing court documents that reproduce HYIP forum posts and of infiltrating HYIP schemes.

    Prominent FINRA Warning On HYIPs

    In July 2010,  the Financial Industry Regulatory Authority issued this highly public alert. FINRA noted that “HYIPs use an array of websites and social media — including YouTube, Twitter and Facebook — to lure investors.”

    HYIPs fabricate a “buzz” and create “the illusion of social consensus,” FINRA said, describing the sinister approach as a “common persuasion tactic fraudsters use to suggest that “everyone is investing in HYIPs, so they must be legitimate.”

    Forum Posts Become Evidence In HYIP Cases

    In the SEC’s May 2008 prosecution of the Legisi HYIP scheme, the agency included page after page of forum posts as part of a 267-page evidence exhibit in support of an asset freeze.  A federal judge approved the freeze. (The screenshot below is from one of the forum pages.)

    Legisi operator Gregory McKnight pleaded guilty to criminal charges of wire fraud last month. He also faces millions of dollars in civil judgments. The SEC Legisi filings also include a reference to the MoneyMakerGroup forum, which is listed in other federal court filings as a place from which HYIP Ponzi schemes are promoted.

    This 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, Interpol and others.

    Included within the SEC filings is a reproduction of Legisi’s bizarre Terms. (See graphic at right. It is taken from court filings.) Among other things, the Terms made members avow they were not an “informant” for various government entities.

    JSS Tripler/JustBeenPaid has similar Terms. The Terms read like an invitation to join an international financial conspiracy. (The next two paragraphs are verbatim from the JSS Tripler/Just BeenPaid member agreement. Italics added.)

    6. I affirm that I am not an employee or official of any government agency, nor am I acting on behalf of or collecting information for or on behalf of any government agency.

    7. I affirm that I am not an employee, by contract or otherwise, of any media or research company, and I am not reading any of the JBP pages in order to collect information for someone else.”

    When the U.S. Postal Inspection Service filed criminal charges against Nicholas Smirnow in May 2010 for his alleged operation of the Pathway To Prosperity HYIP Ponzi scheme, MoneyMakerGroup, TalkGold and ASAMonitor were specifically referenced in the service’s case filings. Smirnow now has his face on an INTERPOL “Wanted” poster.

    MMB took great exception to the PP Blog’s Smirnow post, apparently believing it had no relevance in the context of JSS Tripler/JustBeenPaid. MMB also apparently believes the PP Blog and RealScam are treating Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, unfairly.

    Among other things, MMB asserted on the PP Blog that “no one is invisible to the MoneyMakingBrain and you need to stop doing what you’re doing against this man immediately. Because if you don’t, I am going to make a formal complain (sic) to the very authorities you purport are coming after scam sites and send all the evidence I’ve gathered so far from posting on your site and the realscam site. I don’t like witch hunts and I am sure Fred Mann can whip your ass in court for your highly suggestive, provocative, highly contentious and flat-out defamatory commentaries against his character on your sites.”

    MMB further suggested that JSS Tripler/JustBeenPaid critics may be “needing to look for another ISP because you won’t have internet access at home or your office, wherever.”

    About three months after the SEC brought the $72 million Legisi/McKnight HYIP Ponzi case, the U.S. Secret Service — in August 2008 — filed evidence exhibits in support of an order to freeze tens of millions of dollars in AdSurfDaily-related bank accounts. The complaint in support of the seizure specifically references an ASD-related “Breaking News” Blog, and an evidence exhibit labeled “Government Exhibit 5” consists entirely of an ASD-related post on a different Blog that took up 15 printed pages.

    The 15-page post featured alleged comments from ASD President Andy Bowdoin in which he threatened to sue critics.

    “These people that are making these slanderous remarks, they are going to continue these slanderous remarks in a court of law defending about a 30 to 40 million dollar slander lawsuit,” the post quoted Bowdoin as saying. (The screen shot below is from Government Exhibit 5. It has been a matter of public record approaching four years.)

    Both the ASD and Legisi investigations used government agents in undercover capacities, according to court filings.

    Meanwhile, in June 2009, attorneys suing Bowdoin on behalf of ASD members in a civil RICO (racketeering) case referred to the PP Blog’s reporting on the ASD Ponzi case, specifically its reporting on a spinoff surf known as AdViewGlobal (AVG). (See court document. See June 30, 2009, related story. See PP Blog story the attorneys referenced in their filings.)

    Threat Of  HYIP ‘Fire Power’

    Also in June 2009, a poster who purported to be an attorney issued a veiled threat to the PP Blog, stating that that “[i]f you keep pushing it now the toes you are stepping on might start stepping back. Looks like they have some fire power behind them now.”

    AVG ceased payouts about 24 days after the threat. Even as it suspended cashouts, AVG threatened the media with copyright-infringement lawsuits for reporting on the payout suspension. Within days, it planted the seed that it would arrange to have the Internet Service Provider (ISP) connections of critics suspended.

    During its short run, AVG bizarrely asserted that it operated as a “private association” that enjoyed U.S. Constitutional protections in Uruguay. AVG used U.S.-based Gmail addresses to conduct business, something JSS Tripler/JustBeenPaid is doing. The defunct surf further claimed that it had appointed a person who held the title of “Protector.”

    Such claims have been linked to the so-called “sovereign citizen” movement. On Feb. 27, 2012, the PP Blog reported that a site linked to Mann published videos of Francis Schaeffer Cox, a purported “sovereign citizen” indicted in Alaska in an alleged murder plot against public officials. The site features a drop-in ad for JSS Tripler/JustBeenPaid that encourages prospects to register with  a Gmail address.

    Whether MMB is aware of all of these these historical incidents while issuing threats and planting the seed he has the power to divorce JSS Tripler/JustBeenPaid critics from their Internet connections is not known. MMB’s posting privileges were revoked by the PP Blog last week after he emailed threats and menacing communications. RealScam has continued to permit MMB to post on its forum.

    The PP Blog believes it is unwise to click on any link MMB has posted on RealScam. He appears to be attempting to bait members of the antiscam community into clicking on links as part of a bid to gather IP addresses and other data from posters — all while asserting he has the power to use the information to harm individuals and entities such as Eagle Research Associates, a California based nonprofit that seeks to educate the public about scams.

    Piling On The HYIP Absurdity

    In what would become one of the most visited threads in the history of the PP Blog, a poster known as “CORRECTION” repeatedly demanded that the Blog retract this June 3, 2009, headline about the AdViewGlobal (AVG) autosurf and a strategy advanced by a promoter by which AVG upline sponsors could gather money from individual prospects and funnel it through the sponsors’ local banks before passing it to offshore payment processors — instead of letting AVG gather the money.

    “Get it right before you lead with this inaccurate, bias (sic) and unfair reporting!!!!!!!!!!!” CORRECTION demanded.

    The PP Blog did not submit to the demand to retract the headline.

    It was revealed later in court filings that the grand jury that indicted Bowdoin on charges of wire fraud, securities fraud and selling unregistered securities began to meet in May 2009, about a month prior to ASD- and AVG-related threats and demands made against the PP Blog.

    More Gov’t HYIP Documentation

    Read this SEC warning about social-media fraud.

    Read a December 2010 statement from a top FBI official on “Operation Broken Trust” and why Americans need to be vigilant in the era of HYIP schemes and mass-marketing fraud.

    “The focus of this sweep was fraud committed against individual investors, including Ponzi schemes, high-yield investment fraud, and market manipulation cases,” said Shawn Henry, the FBI’s executive assistant director. “Operation Broken Trust highlights the pervasiveness of the threat we face, and its impact on individuals from all walks of life.

    “The perpetrators of these crimes are those who YOU might trust . . . friends and colleagues — people from your workplace, your child’s soccer team, even your church,” Henry said.

    Read this March 1, 2012, story that reports a top U.S. Justice Department official speaking in Mexico referenced bogus libel lawsuits filed to protect criminal enterprises. Read this Justice Department news release last week on a meeting in Ottawa between top U.S. officials and top Canadian officials to discuss cross-border fraud.

    More HYIP Nonsense: No ‘Unfriendly Political Jurisdictions’

    JSS Tripler/JustBeenPaid purports to pay a daily return of twice that offered by Bowdoin and ASD — and eight times that of Legisi. The JSS Tripler/JustBeenPaid returns are somewhat on par with the returns offered by Pathway To Prosperity.

    At the same time, JSS Tripler/JustBeenPaid says this on its website (italics added):

    “Our business operations are geographically decentralized. We don’t have any central office. We’re not located in any ‘unfriendly political jurisdictions.’”

    It is difficult to conceive how JSS Tripler/JustBeenPaid could send any brighter signals of a scam in progress, given its absurd advertised rate of return and a public proclamation that it is not located in any “unfriendly political jurisdictions.”

    In 2008, Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, identified himself as an ASD pitchman. On Jan. 23, 2012 — six weeks ago today — the Italian securities regulator CONSOB announced it had opened a JSS Tripler-related probe and issued a 90-day suspension order.

    During a March 1 conference call for JSS Tripler/JustBeenPaid, a caller informed Mann that a member of his second-level downline had informed him that the member’s bid to advertise the “opportunity” had been blocked in Holland amid concerns of legality.

    “Tell him not to advertise in any particular country,” Mann replied.

    In a Feb. 23 conference call, Mann declined to identify JSS Tripler with a nation-state, asserting that the opportunity was “not located in any specific part of the world. We’re all over the planet.”

     

     

  • SEC Chief Makes Veiled Reference To Imperia Invest Case In Congressional Testimony: Will Ongoing Law-Enforcement Initiatives Spell More Trouble For Serial Online Scammers And Their Enablers?

    SEC Chairman Mary Schapiro

    SEC Chairman Mary Schapiro alluded to the agency’s investigation of the alleged Imperia Invest IBC scam in testimony before Congress this morning, a development that may signal more bad news is in the offing for serial scammers online.

    Without mentioning Imperia by name, Schapiro told members of the House Subcommittee on Financial Services and General Government that the agency, which is a member of the Financial Fraud Enforcement Task Force, participated in “Operation Broken Trust.”

    In December, the U.S. Department of Justice noted that the Imperia case brought by the SEC in October was part of the operation. Imperia was promoted on Ponzi and criminals’ forums such as TalkGold and MoneyMakerGroup, both of which have been identified in federal court filings as places from which family-destroying international Ponzi and HYIP fraud schemes are promoted.

    Schapiro said today that the SEC has been aggressively pursuing “Ponzi scheme operators and perpetrators of offering frauds.” The Imperia case, which the SEC brought in Utah, is an example of an Internet-based offering fraud, as are many of the “programs” pitched on the Ponzi boards.

    In December, members of the Financial Fraud Enforcement Task Force identified Ponzi Scheme "hot spots" in the United States. Pictured here are FBI Executive Assistant Director Shawn Henry (foreground), with Attorney General Eric Holder (right) and Chief Postal Inspector Guy Cottrell. The Task Force specifically warned investors to be wary of social-networking sites and chat forums. And officials noted that "we continue to use sophisticated investigative techniques—like undercover operations and court-authorized electronic surveillance—to collect evidence in ongoing cases and to identify and stop criminals before they prey on others."

    Salt Lake City was identified in December by the Task Force as one of the “top five Ponzi scheme hot spots in the country.” Other Ponzi hot spots include Los Angeles, New York, Dallas and San Francisco, the Task Force said, cautioning Americans that the fraud hardly was limited to those cities.

    “Be wary of people you meet on social networking sites and in chat rooms, where investment fraud criminals have been known to troll for victims,” the Task Force urged.

    In June 2010, the Justice Department used its Justice Blog to create awareness about the emerging threat of mass-marketing fraud, specifically referencing the alleged Pathway To Prosperity Ponzi scheme. Pathway To Prosperity, which the U.S. Postal Inspection Service said created tens of thousands of victims from virtually all corners of the world, also was promoted on TalkGold and MoneyMakerGroup.

    In October, before the public knew Operation Broken Trust was under way, the SEC said Imperia had stolen millions of dollars from thousands of Americans with hearing impairments. The firm used a payment processor known as Perfect Money, a favorite among international scammers who populate the Ponzi boards. Imperia also purported to have a relationship with Visa, but was using the name “without authorization” to disarm skeptical investors, the agency said.

    Not a “single penny” was paid to Imperia investors, the SEC said.

    Money from the Imperia scheme is believed to have been funneled into accounts in Cyprus and New Zealand. Imperia purported to have operated from the Bahamas and Vanuatu, but the business addresses were “fake,” the SEC said.

    The Justice Department said Imperia used “a series of offshore PayPal style bank accounts to raise “in excess of $7 million from at least 14,000 investors worldwide, including 6,000 investors in the U.S. who have invested in excess of $4 million.”

    Earlier this year, the CFTC turned its attention to purported Forex programs that were promoted on TalkGold and MoneyMakerGroup. Some of those programs also used PerfectMoney. Like the SEC, the CFTC is part of the Financial Fraud Enforcement Task Force.

    Tips From The Task Force

    • Be careful of any investment opportunity that makes exaggerated earnings claims, especially during a short period of time.
    • Ask for written information about the investment, such as a prospectus, recent quarterly or annual reports, or an offering memorandum.
    • Consult an unbiased third party, like an unconnected broker or licensed financial adviser, before investing.
    • Don’t be fooled into believing an investment is safe just because someone you know is recommending it. So-called “affinity scams” are one of the favorite methods used to lure people in.
    • If you feel you are being pressured into investing, don’t do it.
    • Be wary of people you meet on social networking sites and in chat rooms, where investment fraud criminals have been known to troll for victims.

  • BULLETIN: National Investment-Fraud Sweep Dubbed ‘Operation Broken Trust’ Nets 532 Defendants; AG Holder Says Capers Caused More Than $10 Billion In Losses; ‘Undercover Operations’ Part of Task Force Arsenal

    U.S. Attorney General Eric Holder and members of President Obama’s Financial Fraud Enforcement Task Force said this morning that a nationwide sweep known as “Operation Broken Trust” has netted 343 criminal defendants and 189 civil defendants.

    Among the targets of the sweep were purveyors of Ponzi schemes, affinity fraud, prime bank/high-yield investment scams, foreign exchange (FOREX) frauds, business-opportunity fraud and other similar schemes, investigators said.

    Some of the defendants “filed for bankruptcy in an attempt to avoid claims by victim-investors,” investigators said.

    The combined losses in the schemes, which affected 120,000 investors, were estimated at $10.4 billion, Holder said. He was joined in the announcement by FBI Executive Assistant Director Shawn Henry; U.S. Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami; U.S. Postal Inspection Service (USPIS) Chief Postal Inspector Guy Cottrell;  Deputy Chief Rick Raven of the Internal Revenue Service Criminal Investigation (IRS-CI); Acting Director of Enforcement Vince McGonagle of the U.S. Commodity Futures Trading Commission (CFTC); and other members of the Financial Fraud Enforcement Task Force.

    “With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” said Holder.  “To the public: be alert for these frauds, take appropriate measures to protect yourself, and report such schemes to proper authorities when they occur. And to anyone operating or attempting to operate an investment scam: cheating investors out of their earnings and savings is no longer a safe business plan — we will use every tool at our disposal to find you, to stop you, and to bring you to justice.”

    The calling card of the schemes was greed, Henry said, adding that undercover probes are part of the Task Force’s arsenal.

    “This operation highlights the scope of this problem, and its impact on individuals from all walks of life,” said Henry.  “This one sweep alone involves fraud schemes that harmed more than 120,000 victims. The schemes may change, but the underlying greed does not. Working with our partners, we in the FBI will use all the investigative techniques in our arsenal, including undercover operations, to bring those responsible to justice.”

    Khuzami, meanwhile, said the law-enforcement community was pursuing multiple forms of fraud.

    “Fraud by well-known companies or high-profile executives gets the biggest headlines, but other scams are equally devastating to hard working families and retirees,” said Khuzami. “Victims want justice and don’t much care who the fraudster is or how unique the fraud. Today’s actions underscore that law enforcement agrees and will pursue fraud in whatever form.”

    Read Holder’s announcement, made this morning in Washington.

    President Obama authorized the Financial Fraud Enforcement Task Force in November 2009. In January 2010, Holder ventured to Florida to speak about the aims of the Task Force and to warn scammers that the government was serious about putting them in jail.