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Tag: Steve Renner

  • Website Of Spokesman For Renner Entity Claims Government ‘Leaking’ Info To PP Blog About INetGlobal Ponzi Probe; ‘Didn’t Happen — Ever,’ Blog Says; Meanwhile, A Bogus ‘Apology’ Claim

    UPDATED 2:20 P.M. ET (U.S.A.) Did people associated with a company implicated by the U.S. Secret Service in a Ponzi scheme, wire-fraud and money-laundering case participate in a misinformation campaign?

    A Twitter website with a tie to the Inter-Mark companies operated by Steve Renner claims that federal officials are “leaking” information to the PP Blog.

    “Didn’t happen — ever,” the PP Blog said today. “The information we published was not leaked to the Blog. The Blog obtained the information from a public source, through the normal course of its reporting, and the information was available to reporters and the public before the Blog even published its first story based on the information.”

    Meanwhile, another website with a tie to a Renner’s Inter-Mark Corp. is making the claim that a Blogger Inter-Mark is targeting in a lawsuit for calling INetGlobal a “scam” issued an “apology.”

    The apology claim appears on a domain titled CheapClix.net, whose domain registration lists V-WEBS.COM as its nameserver. A Renner company dubbed V-Webs LLC appears to be an inactive Minnesota corporation that used the same Minneapolis street address as InetGlobal and other Renner companies, according to public records.

    A CheapClix.net post headlined “HOSPITALERA.COM APOLOGIZES TO iNetGlobal” and dated Feb. 4 claims that the Hospitalera Blog issued an apology to INetGlobal on a date uncertain and implies that Hospitalera now even endorses INetGlobal.

    “We are deeply saddened by the actions taken by this blog to defame iNetGlobal,” the CheapClix.net site says, apparently quoting from the purported apology. “iNetGlobal is one of the top Internet Marketing firms in the United States. We reach out to them with a sincere apology in hopes that we too can use the iNetGlobal products and services.

    “After careful review of iNetGlobal’s services and products, we find the company is real and the services are true to what iNetGlobal represents. Again, we apologize.”

    The apology claim is dubious because Sybille Yates, who operates the Hospitalera Blog from the Czech Republic, told the PP Blog last week that she was not even aware that Renner’s company was suing her until Feb. 25 — three weeks after the date of her purported apology.

    Yates did not immediately return an email from the PP Blog today seeking comment on the apology claim and whether she had, in fact, apologized. A Feb. 16 post  from Yates on the Hospitalera Blog, however, describes the news release that announced the apology as “faked.”

    Whether the apology claim somehow sprouted from some fantastic reshaping of facts by an INetGlobal supporter or was just an outright lie that was part of a misinformation campaign was not immediately clear.

    It has been common in the so-called autosurf “industry” for lies, misstatements, misrepresentations, misinformation and claims not based on facts to spread virally on the Internet as though they were truth.

    In the AdSurfDaily case, for instance, claims were made that the prosecution admitted ASD was not a Ponzi scheme, that ASD President Andy Bowdoin had received an award from the President of the United States for business acumen, that Google and ASD were partners and that ASD had the backing of huge corporations with huge advertising budgets.

    All of the claims were untrue.

    The CheapClix.net claim about the purported apology adds another strange twist to the INetGlobal story. If Yates never issued such an apology — and Yates’ Blog says no such apology was issued — it leads to questions about why someone would claim such an apology had been issued and even go so far as to issue a news release to announce an apology that had not been made.

    The introduction to Hospitalera’s purported apology as reported by CheapClix net begins, “We appreciate this step taken by the people at the hospitalera web-site to make amends for their erroneous publications.”

    The CheapClix.net post from Feb. 4 includes a link to what appears to have been a news release issued by an unknown party to herald Hospitalera’s purported apology. The news release link to PRLog.org resolves to an error page. PRLog.org is a free news-release distribution service.

    Yates’ Blog says she contacted PRLog to have the fake news release removed, and that PRLog took down the bogus release “in a heart beat.”

    UPDATE 2:20 P.M. Yates has confirmed she never issued an apology.

    “I never issued said apology, nor did I ever authorize anybody to do so in my name,” Yates said.

    “I never issued or published a press release on prlog.org. As I came across the forged and false press release, I contacted prlog.org immediately and they took it down. I have no information who published/submitted said press release to prlog.org.”

    A second link in the CheapClix.net post that heralded the purported apology resolves to TweetMeme.com, a site that aggregates Twitter links. A small icon that reads “V News Network” appears below a headline of “iNetGlobal Scam: Hospitalera Blog apologizes to iNetGlobal.”

    Records suggest that “V News Network” may be yet another Renner entity.

    A headline heralding a purported apology from the Hospitalera Blog for calling INetGlobal a scam appears on a website known as CheapClix.net. The Hospitalera Blog says the apology was "faked."

    ‘Leaking’ Claim

    Why the Twitter site, which is tied to IBBN.org, made the claim of that the government was “leaking” to the PP Blog is unclear. The Twitter post is dated Feb. 28. IBNN, which stands for The Independent Business News Network, is registered in Renner’s name. The site is operated by Donald W.R. Allen II, IBNN’s editor-in-chief and the the vice president and director of public relations for V-Newswire — a company in Renner’s INetGlobal family.

    Renner is listed as the IBNN domain registrant.

    Allen did not comment Friday when the PP Blog advised him that the government leaked no information to the Blog. The Twitter site does not list a source for its claim that federal officials “leaked” information to the Blog, but asserts that such an event was possible “Only in America!” The Twitter site continues to make the claim.

    The site also claims “iNetGlobal not a Ponzi.” No source is listed for the denial. It is unclear if IBNN has access to audited and certified balance sheets and financial statements of the Renner enterprise that could destroy the government’s Ponzi assertions.

    IBNN previously skewered the Star-Tribune newspaper of Minneapolis/St. Paul, asserting that the paper, which covered the INetGlobal raid, was displaying  “defamatory contempt [for the Renner entities] prior to a full investigation and a Grand Jury inquiry.”

    Allen, who signed the IBNN opinion piece, did not disclose his tie to the Renner companies when the piece was published. The piece went missing after the PP Blog published a story in IBNN’s tie to Renner, but since has been restored — with a few lines added.

    The U.S. Secret Service, which raided Renner’s operations in Minneapolis last month, asserted that INetGlobal and other Renner companies were part of an international Ponzi scheme that was engaging in wire fraud and money-laundering.

    The PP Blog cited as its source a Secret Service affidavit for a search warrant. The affidavit was published openly on a government website.

    At various times in its history, the PP Blog has been accused by participants in alleged Ponzi schemes of being part of a government operation. The Blog has reported on paranoia that often accompanies Ponzi scheme participants, some of whom become preoccupied with thoughts about government “plants.”

    Such claims about the PP Blog have been made from one Ponzi scheme case to the next, but they simply are not true. Ponzi promoters have accused the Blog of idiocy, occasionally resorting to name-calling or posting under multiple identities in a bid to create the appearance that a particular company caught up in Ponzi allegations the Blog was covering had more supporters than it actually had.

    As was the case with AdSurfDaily, a Florida company implicated in an autosurf  Ponzi scheme by the Secret Service in 2008, the Secret Service used undercover agents as part of the investigation into INetGlobal, according to a court affidavit. At least one of the undercover agents also was involved in the ASD investigation, according to court filings.

    Other court filings reviewed by the PP Blog have described various investigative techniques the agency uses, including surveillance from automobiles of subjects under investigation at places such as residences, parking lots and post offices — and even trash Dumpsters.

    At least two Secret Service agents were in the room to observe an INetGlobal function in New York, according to court filings. Agents also observed an ASD function in Miami in 2008, according to court filings.

    An agent involved in the ASD case listened to an INetGlobal sales pitch by an ASD member, according to the affidavit in the case.  It is plain from multiple public filings that the Secret Service is well aware of the so-called autosurf “industry” — and also the so-called “matrix” industry.

    It was publicly known that Renner had been under federal indictment for income-tax evasion since September 2008, a month after the ASD raid. There also is a considerable, public paper trail consisting of court filings, news releases and other information that links Renner to a Ponzi scheme known as Learn Waterhouse, elements of which were prosecuted by both the SEC and the U.S. Department of Justice.

    The public paperwork in the Learn Waterhouse case dates back to 2004. A Renner entity known as CCI provided payment-processing services for the Learn Waterhouse Ponzi scheme.

    Visit the Hospitalera site.

    Read about the purported apology on CheapClix.net.

  • DEVELOPING STORY: Blogger In Czech Republic Who Called INetGlobal A ‘Scam’ Last Summer Says She Was Threatened With Lawsuit; Blogger’s Name Means ‘Prophetess’ Or ‘Oracle’

    EDITOR’S NOTE: Sybille Yates, the subject of the story below, contacted the PP Blog Feb. 26 and Feb. 27  from an IP in the Czech Republic, after reading our coverage of the Ponzi scheme allegations against INetGlobal. The PP Blog asked Yates questions in follow-up emails, and this story is based on her responses and the PP Blog’s own reporting.

    A woman who described herself as a Blogger in the Czech Republic says she was threatened with a lawsuit after calling INetGlobal a “scam” in a post in September 2009 and after owner Steve Renner was convicted of federal income-tax evasion in a case that alleged he had converted customers’ money in a separate company to his own use.

    Sybille Yates, who said she runs a Blog at hospitalera.com, called INetGlobal a scam in a post on Sept. 3, 2009.

    Ironically, the name “Sybille” means “prophetess” or “oracle,” according to ThinkBabyNames.com, a website that provides a dictionary on the meaning of names.

    About three months later — on December 8, 2009 — Renner was convicted of four felony counts of income-tax evasion. Last week, federal agents raided his offices in Minneapolis, amid allegations that INetGlobal was operating a Ponzi scheme and engaging in wire fraud and money-laundering.

    Although Yates said paperwork directed at her appears to have originated in the United States on or around Dec. 18 — about 10 days after Renner’s conviction — Yates added that she did not know she was the target of a prospective lawsuit until on or around Feb. 25, about two days after the Feds raided INetGlobal.

    Yates said she was summoned to a Czech court to retrieve the papers, adding that “I think [INetGlobal] tried to silence me, but didn’t count on the amount of time it would take to serve them overseas.” She noted that she was puzzled by the paperwork because “I never received a cease and [desist] email or letter.”

    The Czech court appeared not to be the venue from which any lawsuit would be heard. Rather, the court contacted Yates to let her know that “that legal papers were waiting for me [since the] middle of January.”

    “This notice didn’t state what the papers were all about, just that they were legal and from the USA and that the courts here in the Czech Republic are not involved,” Yates said. “I kind of felt paralyzed, I lead a pretty law obedient life and didn’t have any experience with such situations.”

    INetGlobal’s website was offline early this morning, throwing an error message that said “Our Web Servers appear to be experiencing technical difficulties.”

    Yates, who described English as one of four languages she speaks, said she was not a member of INetGlobal.

    “I toyed with the idea for a second to sign up for free /[or the] minimum fee in order to get better insider info, but only for a second,” she said. “I would not have felt comfortable enough to give them even the most basic personal information, not to speak of my debit card details.”

    INetGlobal went to the time and expense of translating the documents sent from the United States into Czech, Yates said.

    “[T]hat was completely wasted on me as I don’t speak Czech!” she said. “I live here, because my husband works here.”

    Yates said she believed INetGlobal perceived her “as a pain in the backside” because of the “scam” reference and because she has a high search-engine ranking for terms associated with INetGlobal.

    “I don’t concentrate on scams, but I am convinced that it is perfectly possible to make money online without scamming and ripping people off, so if I come across something that I think is a scam, I say so,” Yates said.

    On Sept. 3, Yates wrote, “Inetglobal is a scam and a really bad one. Stay away from them and save your money!”

    Her Sept. 3 post suggested INetGlobal had a “daily re-purchase,” program in place, which she interpreted to mean “your credit card will get continuously charged and drained until you are in deep debts.”

    In an affidavit for a search warrant in the INetGlobal case last week, the U.S. Secret Service described an “automatic repurchasing” program that the firm allegedly employed by default and prevented customers from overriding.

    It was not immediately clear if Yates and the Secret Service were referring to the same repurchase program.

    Visit the hospitalera.com Blog to read Yates’ Sept. 3 post. See Yates’ Feb. 25 post that announced she had been targeted in a prospective lawsuit.

  • SECRET SERVICE: INetGlobal Forced Members To Keep Money In The Company With ‘Automatic Repurchasing’ Scheme; Undercover Agent Sent Email To Support, Which Verified Repurchase Was Mandatory

    UPDATED 11:07 A.M. ET (U.S.A.) One of the undercover Secret Service agents who joined INetGlobal discovered that the company had implemented an “automatic repurchasing” program by default and that the program could not be switched off, thus distancing participants — many of whom may not have understood English — from their money.

    Although it is unclear when the automatic-repurchasing program began, it was in operation in the weeks after INetGlobal owner Steve Renner was convicted on Dec. 8, 2009, of four felony counts of income-tax evasion, according to court filings.

    Other filings show that another Renner company — Cash Cards International (CCI), a money-transmission business  — was upside down by more than $2.5 million when a court-appointed receiver in a Ponzi scheme case sought to convert electronic credits to cash to compensate victims of the scheme.

    Beginning on Feb. 1, the Secret Service agent — a woman — repeatedly tried to turn off INetGlobal’s automatic-repurchasing feature, but it “came back on” each time. The agent, who speaks and writes in English, attempted to disable the feature “several times on different days,” failing each and every time, according to an affidavit for a search warrant filed in the case.

    INetGlobal had a high concentration of Chinese members who did not speak English, according to the affidavit. How they even could understand the automatic-repurchasing scheme or fully comprehend INetGlobal’s operations and English-language website is far from clear, and has led to questions about whether the company deliberately was targeting members who could not understand what they were purchasing and would have both a language and a geographic disadvantage when seeking explanations or filing complaints with authorities.

    The company generated “at least” 87 percent of its revenue from the sale of memberships to members “residing in China,” according to an analysis referenced in the affidavit. The analysis was performed by an unnamed INetGlobal employee.

    On Feb. 17, the undercover agent sent an email to INetGlobal customer service, asking if the feature could be turned off.

    “Customer service replied in the negative,” the agent said, suggesting that the automatic-repurchasing feature was forcing participants to keep at least 40 percent of their money in the company.

    In the affidavit, the Secret Service said a “high level iNetGlobal member” from Nevada was becoming increasingly frustrated by an inability to withdraw funds. The member complained to management that “for over one week [in January] they had been unable to get a money order payment from the company for value they are owed.”

    “The victim contacted iNetGlobal’s customer service on several occasions only to get excuses,” the Secret Service said.

    Eventually, the victim spoke with former InetGlobal CEO Steven Keough.

    Keough, according to the Secret Service, told the victim on Jan. 11 to “cash out” of the system.

    “We can’t cash out,” the victim said. “[I]t is not possible, due to mandatory repurchasing built into the system.”

    On the very next day — Jan. 12 — Keough, an attorney and former naval officer, met with the Secret Service. He had contacted federal prosecutors Jan. 8 to express concerns about the company’s business practices. His first contact occurred only two months after he was appointed CEO on Nov. 7, 2009, according to the affidavit.

    Steve Renner’s Tax Convictions, Link To Previous Ponzi Scheme

    Renner was found guilty Dec. 8 of four felony counts of federal income-tax evasion.

    Prosecutors said he “diverted substantial funds” from CCI between 2002 and 2005 to pay his personal living expenses as well as to make personal investments in coins, oil wells, art, stamps, and vintage musical instruments.

    CCI, which once served as a money-transmitter for a California Ponzi scheme known as “Learn Waterhouse,” used the same office facility in Minneapolis as INetGlobal, the Secret Service said.

    When a court-appointed receiver in the Learn Waterhouse case attempted to get Renner to return money due Ponzi scheme victims, he explained that he could not do so because it had been “invested,” according to the affidavit.

    Thomas Lennon, the receiver in the Learn Waterhouse case, met with Renner, who “provided . . . financial statements indicating that the assets of Cash Cards and Renner are insufficient to cover all outstanding vcredit balances and obligations to other creditors.

    “Specifically, the statements show that Cash Cards and Renner have assets with an estimated value of $2,946,000 and an outstanding v-credit liability of $5,450,000,” Lennon said in court filings in 2007. “Renner has also informed the Receiver that he is currently being audited by federal and state taxing authorities which may result in large additional liabilities and liens on his property.”

    Lennon’s name is well-known among victims of financial crimes. He also was the court-appointed receiver in the 12DailyPro autosurf Ponzi scheme.

    Repurchasing programs, which autosurf operators employ to minimize the outflow of cash, are one of the oldest tricks in the Ponzi book. “Trainers” for Florida-based AdSurfDaily, implicated in a $100 million Ponzi scheme, routinely pushed a so-called “80-20” program whereby members would remove no more than 20 percent of money they were due and plow 80 percent back into the surf.

    In June 2009, AdViewGlobal, an autosurf with close family, management and promotional ties to ASD, announced it was ceasing payouts and making an 80/20 program mandatory should payouts ever resume. AdViewGlobal promptly crashed and burned.

    In January, according to the affidavit, Keough told investigators that he could not make sense out of what was going on inside INetGlobal and had observed instances in which Renner appeared to be gaming the payout system.

    “Keough said he was concerned that large amounts of money were flowing through bank accounts related to iNetGlobal and that unusual system manipulation was being conducted by . . . Renner,” the Secret Service said. “Keough had recently been fired by Renner. Keough believed he had been fired because he continually questioned iNetGlobal’s business practices.”

    On Jan. 20, according to the Secret Service, the agency received information that TCF National Bank was closing the accounts of a Renner entity known as Inter-Mark Corp. after an investigation by the bank led to “suspicions that the activity in the accounts might be money laundering,” according to the affidavit.

    “TCF Bank had given notice to Renner that the accounts were going to be closed,” the Secret Service said. It is unclear if Renner ever advised INetGlobal members that the bank had closed the accounts, citing suspicions they were being used to commit crimes.

    TCF prepared a cashier’s check for “for a little over $5 million,” presenting it to a Renner employee.

    Later that day, the check was deposited into Bremer Bank, which also held Renner-connected accounts, according to the Secret Service.

    Balances in Renner-connected accounts began “moving up sharply in August 2008,” the Secret Service said.

    August 2008 was the month in which the Secret Service raided the headquarters of ASD — and the month in which Renner’s autosurf was coming onto the stage. Golden Panda Ad Builder, a surf that is part of the ASD litigation, positioned itself as a company that sought to cater to Chinese members.

    Golden Panda’s operator — Clarence Busby — was implicated by the SEC in a prime-bank investment scheme in the 1990s, the same sort of scheme that engulfed Learn Waterhouse and later resulted in the determination that Renner’s CCI money-services business was impossibly upside down because he had used customers’ money to make personal purchases.

    INetGlobal issued a statement yesterday that acknowledged the Secret Service probe, but did not mention Renner’s tax conviction in December or the trouble he encountered when he could not fund a payment to the Learn Waterhouse receivership estate in the Ponzi case.

    “iNetGlobal offices will remain open to provide support to our 1,000’s of customers from around the world,” the company said. “iNetGlobal will continue to provide the level of quality service our customers have come to expect now and into the future.

    “We would like to thank all of our Members and Customers for their support and well wishes in this trying time,” the company said.

  • BULLETIN: Receiver In Affiliate Strategies Inc. (ASI) Case Asks Federal Judge To Add Noobing Autosurf To Receivership Probe After Inquiries By ‘Tax Authorities’

    The court-appointed receiver in the fraud case against the parent company of the Noobing autosurf has asked a federal judge for the authority to add Noobing to the receivership probe.

    Larry Cook, the receiver, said that Noobing and 14 other companies under the Affiliate Strategies Inc. (ASI) umbrella have become the subjects of “numerous inquiries” from “tax authorities,”  creditors and “former independent contractors.”

    Cook did not identify specific parties that made inquiries, but noted that “each of the Subsidiaries used the same post office box as the Receivership Defendants.”

    Noobing targeted people with hearing impairments in its promotions. It is known that some Noobing members have contacted the Federal Trade Commission, which is spearheading the ASI probe, along with the attorneys general of Kansas, Minnesota, North Carolina and Illinois.

    At least one deaf member of Noobing says she has contacted a sheriff’s department in California about the company.

    News that Cook is seeking judicial approval to add Noobing to his receivership probe came on the same day that the U.S. Secret Service said it was conducting an intense probe of INetGlobal, which operated a Minneapolis-based autosurf.

    In an application for a search warrant in a Ponzi case against INetGlobal, the Secret Service referenced the AdSurfDaily Ponzi scheme case, saying a member of ASD had attempted to recruit an undercover Secret Service agent into the INetGlobal scheme.

    ASD members and members of a closely connected surf known as AdViewGlobal also promoted Noobing, as did INetGlobal members, according to web records.

    Steve Renner, the owner of INetGlobal, was convicted in December of four felony counts of income-tax evasion for his conduct with other companies earlier this decade.

    Autosurfs are notorious for keeping poor records or no records at all, and autosurf participants are notorious for engineering schemes to milk tax-free income.

    Cook said tax reporting is required, and is seeking an order that pertains to Noobing and 14 other ASI umbrella companies. Cook listed Noobing’s name at the top of the list.

    “In order to complete the tax reporting requirements and otherwise address the creditors’ and other claims, the Receiver seeks a clear order that he is the Receiver for the Subsidiaries,” Cook said.

    And, he added, “Counsel for the [FTC] has reviewed this Motion and concurs.”

    ASI and a number of companies were sued last year in a scheme involving government grants. Noobing went offline in the immediate aftermath of the FTC probe.

  • AdSurfDaily Cited In INetGlobal/Steve Renner Search Warrant Application; Former Company CEO Helped Agents Prior To Raid; Undercover Agent Joined Surf Program; Agents Witnessed Spectacle At New York Function

    The U.S. Secret Service observed Minnesota-based INetGlobal’s operations for weeks in January, dispatched undercover agents to join the autosurf, learned that a bank recently had closed accounts tied to the firm amid money-laundering suspicions — and already had received incriminating information from the firm’s former chief executive officer prior to executing multiple search warrants Tuesday, according to records.

    Agents even traveled to a company function in New York, mixed in with the audience and observed INetGlobal owner Steve Renner, according to records. The function was known as “Freedom Conference 2010.”

    Most of the attendees were Chinese, the Secret Service said.

    “[C]onference registration took a long time because nobody at the registration desk spoke Chinese, and many of the conference attendees could not make themselves understood in English,” the agency said.  “There was an interpreter in the main hall, but Renner often spoke over the interpreter.”

    At one point, Renner started a pandemonium by holding up $20 bills, which he began handing out to attendees in exchange for $10 bills, the agency said.

    “This caused a crush of people to approach the front of the hall, and Renner eventually needed assistance moving people back,” the Secret Service said. “Renner asked, through an interpreter, how many people in attendance had their own business, and only two raised their hands.”

    Steven Keough, a retired naval officer who was INetGlobal’s CEO for only weeks before being fired by Renner, contacted federal prosecutors Jan. 8 to report concerns about Renner and the company, according to court documents.

    Meanwhile, the search-warrant application cites the government’s prosecution of assets tied to Florida-based AdSurfDaily and a Jan. 4 order of forfeiture by U.S. District Judge Rosemary Collyer to bolster the case against INetGlobal and related companies. The application also cites the successful prosecution of the 12DailyPro and Phoenix Surf Ponzi schemes by the SEC.

    As was the case in the ASD prosecution, the Secret Service raised allegations of Ponzi fraud, wire fraud and money-laundering against INetGlobal, saying the company had grossly overstated its membership numbers, had co-mingled funds and operated the business in slipshod fashion.

    Agency Assigns Veteran From ASD Case To INetGlobal Case

    At least one of the Secret Service agents involved in the INetGlobal investigation also was involved in the ASD investigation, according to the search-warrant affidavit. Agents located an INetGlobal sales pitch online, and the agent involved in the ASD probe called the INetGlobal member.

    Out of the gate, INetGlobal was described by the member as a wink-nod proposition, the Secret Service said — and it turned out that the INetGlobal member also had been an ASD member.

    “The member said he had previously been a member of ASD . . . and said, ‘We know what happened there,’” the Secret Service said. “The member said he was reluctant to join iNetGlobal due to it being similar to ASD.

    “The member said, ‘we all know what this program is.’ The member said his daughter and wife surfed the websites and the member did not care about the services provided. The member said he just wanted to put his money in and get it out. The member said you convert your earnings to V-cash and then receive payouts by check or through an ATM card you can sign up for. The member said members earn a daily return on their investment but that he was not sure what he exactly earned. The member said he has not been able to figure out the percentage of return due to the convoluted information provided on the iNetGlobal website.”

    Regardless of the member’s own concerns about the program, the member nonetheless was eager to recruit the undercover Secret Service agent, according to the affidavit.

    “The member pushed [the undercover agent] to join and wanted to conduct a three way call with his sponsor,” the Secret Service said. “The member said bringing in new members under you was the best way to earn maximum returns.”

    CEO Met With Secret Service Prior To Raid

    Keough’s holds a Bachelor of Science in Chinese from the U.S. Naval Academy at Annapolis, Md.; a Master of Arts in Congressional Studies from the Catholic University of America, Washington, D.C.; and a law degree from Boston College Law School.

    After working for INetGlobal for only weeks, Keough said things going on inside the firm made no sense and he had come to believe Renner had hired him as a “good face” for the company, according to the search-warrant application.

    Keough told agents he believed Renner fired him for asking too many questions, according to the filings.

    “Keough described what he called his first ‘red flags,’ which were the reported size (50,000 members) and purported revenue ($100 million) of iNetGlobal; the complete disarray and disorganization of the businesses; and the seemingly small outside legitimate income,” the Secret Service said. “Keough further stated that the companies’ website never seemed to work properly, making him question what customers who purchased the advertising service alone, without the possibility of rebates, were getting for their money.

    “Keough said on occasion he witnessed Renner manually manipulating the iNetGlobal system to pay out percentages that were different, and smaller, from the percentage listed on the iNetGlobal website,” the Secret Service continued. “Keough also wondered how, with so little outside income, the company could pay these outlandish returns. Keough said Renner would explain away his concerns by telling him how beneficial the advertising was and about all the different levels a member could achieve. Keough said, ‘I never really understood how it could work.’

    “Renner told him iNetGlobal had 50,000 members, had been in business for 10 years, was debt free, and had made over $100 million in revenue. Keough said he later learned all these facts were ‘lies.’

    “Keough further stated that Renner used the misleading information in power point presentations and webinars to recruit others,” the agency said.

    Once becoming CEO, “Keough conducted his own internal audit and found, contrary to Renner’s statements, that iNetGlobal had only approximately 30,000 members, iNetGlobal had only been in business for 14 months, there were huge liabilities associated with the members’ ‘investments’ and the company’s estimated revenue was approximately $28 million, not the $100 million in revenue claimed by Renner.

    “Keough said he was particularly alarmed because he knew Renner and/or representatives of iNetGlobal were using these false statements to promote and market iNetGlobal to would-be members (investors),” the Secret Service said. “Keough believed these false statements caused individuals to invest with iNetGlobal.’

    “Keough said he had an iNetGlobal employee conduct an analysis to determine the member liability,” the Secret Service said. “The employee reported back to Keough that at least 87% of the company’s revenue was generated from sale of memberships to members residing in China.”

    The search-warrant application also claimed that a company Renner owned provided payment-processing services for a Ponzi scheme called “Learn Waterhouse,” which was smashed by the SEC in 2004.

    When a court-appointed receiver asked Renner to turn over funds to the receivership estate by converting electronic credits to cash, it was learned that Renner could not do it because he had “invested” more than $2.5 million in Learn Waterhouse V-Credits on “stamps, coins, Salvador Dali sculptures, autographed letters, guitars and amplifiers, fractional interests in motion picture companies, and fractional interests in oil wells, among other things.

    “Additional sums of customers’ money had been spent by Renner personally, including on daily living expenses,” the Secret Service said.

  • Secret Service, FBI, IRS Raid Steve Renner’s INetGlobal Operations In Minneapolis; Scene Resembled AdSurfDaily Raid In Florida

    UPDATED 10:40 A.M. ET (U.S.A.) Federal and state agents have raided the Minneapolis offices of Inter-Mark Corp., seeking evidence of a Ponzi scheme, the Star Tribune of Minneapolis/St. Paul is reporting.

    Inter-Mark Corp. is operated by Steve Renner, who also operates a purported “advertising” service known as INetGlobal. In a scene that resembled the August 2008 raid at the headquarters of Florida-based AdSurfDaily, agents in Minnesota were seen carting boxes of documents and computers.

    ASD was implicated in a $100 million Ponzi scheme.

    Renner has been under investigation for at least 17 months and likely longer. He was indicted on charges of tax evasion in September 2008, about a month after the ASD raid. He was convicted in December 2009 of evading more than $332,000 in taxes between 2002 and 2005.

    Renner, 54, “diverted substantial funds from his business, Cash Cards International (CCI), between 2002 and 2005 to pay his personal living expenses as well as to make personal investments in coins, oil wells, art, stamps, and vintage musical instruments,” prosecutors said in December.

    He also used CCI funds to promote his musical band, “Stevie Renner and the Renegades,” prosecutors said.

    “From 2001 to 2006, Renner owned CCI, an Internet-based stored-value card and money
    transmission business, with locations in Minnesota, South Dakota, and Hawaii,” prosecutors said. “Although he was legally obligated to file federal income tax returns and pay all federal taxes owed, he failed to file his income tax returns with the Internal Revenue Service for tax years 2002 through 2004 until March 5, 2006, the date on which he also filed his 2005 federal income tax return.”

    “Tax evasion is not a victimless crime,” said Julio La Rosa of the IRS, upon Renner’s conviction.

    “Honest, hardworking taxpayers pay the price when others choose to evade their tax obligations,” La Rosa said. “As this verdict shows, those that cheat will get caught.”

    Renner faces up to 20 years in federal prison in the tax case.

    Renner also is associated with a domain known as AdPacs.com, which is throwing a server error. It is believed that AdPacs promoters also promoted the AdViewGlobal (AVG) autosurf, which had close ties to ASD.

    Affiliates of Steve Renner's AdPacs.com pushed AdViewGlobal just prior to its February 2009 launch. This screen shot of search result that appeared online more than a year ago lists the name of Juan Fernandez, the CEO of AdSurfDaily. ASD is implicated in a $100 million Ponzi scheme. AVG launched AFTER the federal seizure of tens of millions of dollars in the ASD case. Like ASD President Andy Bowdoin, Fernandez took the 5th Amendment at an evidentiary hearing in September 2008. Now, Renner's company is the subject of a major federal probe. ASD sold "ad-packs." AVG referred to its version of "ad-packs" as "viewer impressions" after the phrase "ad-packs' became radioactive.

    As was the case with the ASD raid in Florida, local media caught the events at Renner’s office yesterday on video. Minnesota has been plagued by Ponzi schemes. Some ASD members from Minnesota have been among the loudest advocates for ASD President Andy Bowdoin.

    The Minnesota Financial Crimes Task Force assisted in the raid.

    Earlier this month, the Secret Service announced the formation of an Electronic Crimes Task Force (ECTF) based in Memphis. The agency also has ECTFs in St. Louis, Kansas City, New Orleans and Europe.

    “One of the top priorities for the Secret Service continues to be combating the computer
    related crimes perpetrated by domestic and international criminals that target the U.S.
    financial infrastructure,” said Secret Service Director Mark Sullivan.

    “The Secret Service, in conjunction with its many law enforcement partners across the United States and around the world, continues to successfully combat these crimes by working closely with experts from all affected sectors to constantly refresh and adapt our investigative methodologies.”

    Read the Star-Tribune’s coverage of the Steve Renner raid.