PatrickPretty.com

Tag: TalkGold

  • 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: Gold Quest International (GQI) UPLINE/DOWNLINE Groups Will Be Subject Of Hearing By Ontario Securities Commission; Case Alleges Respondents Were Both Investors And Promoters Who Pushed Unregistered Securities Of Bizarre Firm

    EDITOR’S NOTE: If you’re pushing Ponzi schemes on MoneyMakerGroup, TalkGold and other criminal forums, allegations brought by the Ontario Securities Commission (OSC) against geographically localized promoters of Gold Quest International (GQI) may interrupt your delusions of invincibility over the next several weeks.

    Upline and downline networks within Gold Quest International (GQI), a bizarre company taken down by the SEC just three months before the U.S. Secret Service raid on AdSurfDaily in 2008, are in the news in the Canadian province of Ontario.

    The Ontario Securities Commission (OSC) will conduct a hearing March 24 to consider taking provincial action against local promoters of GQI, which already has been ruled a Ponzi scheme, pyramid scheme and “sham” investment by the Alberta Securities Commission.

    OSC pointed out that GQI “has never been registered in any capacity with the Commission” and alleged that its promoters within the province also were not registered.

    The case is important because it signals that Ontario regulators have backtracked millions of dollars of GQI transactions that originated in the province, segregated the source of the money to specific groups of promoters within the province and now intend to hold them accountable for spreading financial misery to their fellow citizens.

    The odds of the respondents avoiding sanctions after the hearing may be low. One Ontario man implicated in the GQI scheme already has filed bankruptcy and has been ordered to pay $652,000 in disgorgement and penalties for his role in GQI.  The man, Donald Iain Buchanan, allegedly was introduced to GQI by some of the promoters who are the subject of the hearing next month.

    And the odds may be weighted even more heavily against the promoters prevailing at the hearing because of the bizarre claims of GQI itself, which purported to have a “Lord” among its key managers and said it was immune to regulatory oversight because it was an extension of a North Dakota sovereign “Indian” tribe and was permitted to operate untouched from Las Vegas.

    GQI, which gathered about $29 million in a long-running scheme by promising returns of 87.5 percent a year and huge commissions, sought unsuccessfully to sue the SEC for the astronomical sum of $1.7 trillion. A U.S. federal judge dispatched U.S. marshals to haul key players into court for ignoring court orders, and vast sums of money appear to have gone missing down ratholes in Europe and New Zealand.

    Some of the money also is tied up as a result of criminal allegations — including murder — against James Fayed, the operator of the now-shuttered E-bullion payment processor.

    In its statement of allegations, OSC accused Simply Wealth Financial Group Inc., Naida Allarde, Bernardo Giangrosso, K&S Global Wealth Creative Strategies Inc., Kevin Persaud, Maxine Lobban and Wayne Lobban of promoting unregistered securities. All of the accused companies and individuals have Ontario addresses, according to OSC.

    “During the Material Time, Simply Wealth, Allarde, Giangrosso, K&S, Persaud, Maxine Lobban and Wayne Lobban . . . promoted securities in Gold-Quest to Ontario residents,” OSC charged.

    About 94 Ontario residents plowed $1.6 million into GQI “as a result of promotional activities conducted by Allarde, Giangrosso and Simply Wealth,” OSC charged. “These activities included recommending investment in Gold-Quest, providing information regarding the nature of the investment in Gold-Quest, facilitating the process of investing in Gold-Quest, and, in certain cases, facilitating the transfer of funds to Gold-Quest on behalf of investors.”

    K&S and Persaud, meanwhile, caused about nine Ontario investors to plow about $69,000 into the GQI scheme. Among their alleged customers was Buchanan, who also became a promoter and caused his customers to bring $1.8 million more into the scheme, according to OSC.

    Maxine Lobban and Wayne Lobban also became promoters and caused investors to bring “at least $675,000” into the GQI scheme, the OSC alleged.

    The math of the scheme was doomed to fail, but purveyors were lured by titles and promised both spectacular investment earnings and commissions. Promoters were categorized in upline/downline tiers, the OSC alleged.

    “Individuals who introduced an investor to Gold-Quest would receive the title ‘Administrative Manager’ for the new investor,” OSC alleged. “Administrative Managers would receive an up-front commission of ten percent of that investor’s original investment and then a further four percent per month for a year (for a total commission of 58 percent of the principal invested).

    “The individual who had introduced the Administrative Manager to Gold-Quest would receive the title ‘Managing Director’ for the new investor and would receive a commission of 1.5 percent per month for a year (for a total of 18 percent of the principal invested),” the OSC continued.

    “Lastly, the individual who introduced the Managing Director to Gold-Quest would receive the title ‘Supervisory Managing Director’ for the new investor and would receive a commission of one percent per month for a year (for a total of 12 percent of the principal invested).

    “In sum, when a new investor sent funds to Gold-Quest, 88 percent of the investor’s funds were earmarked for commissions to be paid to the investor’s Administrative Manager, Managing Director and Supervisory Managing Director over the course of a year,” OSC alleged.

    In November 2010, OSC ordered penalties and disgorgement of $652,000 against Buchanan for his role in the GQI scheme.

    “Buchanan’s conduct warrants a substantial administrative penalty,” OSC said. “He was involved in two investment schemes in which Ontario investors invested approximately US $4.3 million.”

    Although commission staff had recommended an administrative penalty of $150,000 against Buchanan, who is bankrupt, OSC doubled the amount to $300,000, saying Buchanan had shown no remorse and that the smaller penalty would not serve as a deterrent.

  • AN HYIP PARANOIA-MAKER: Undercover Agent Listens To Alleged Bankrupt Fraudster’s Pitch In ‘Hooters’; SEC Files Emergency Action Alleging Christopher Love Blackwell At Helm Of Massive Fraud Scheme

    EDITOR’S NOTE: This developing story on the alleged actions of accused securities schemer Christopher Love Blackwell is apt to cause paranoia among HYIP and prime-bank fraudsters, including criminals who populate online forums such as TalkGold and MoneyMakerGroup.

    It features the presence of a Department of Homeland Security (DHS) undercover operative who allegedly infiltrated Blackwell’s scheme and was so good at keeping his identity secret that Blackwell pitched him repeatedly over a period of months in a Hooters restaurant and bar as other agents worked to unmask the complex caper. The undercover agent eventually returned an “investment contract”  prepared by Blackwell and plunked down $1,000 of government money as a down payment on a purported $500,000 investment. Blackwell allegedly later contacted the undercover agent repeatedly via email and telephone to collect the outstanding “balance” of $499,000. Blackwell even left a voicemail on the agent’s phone, according to court filings.

    BULLETIN: The SEC has gone to federal court in Dallas and is seeking an emergency injunction to halt an alleged Ponzi scheme involving Christopher Love Blackwell of Euless, Texas, and Roswell, N.M., AV Bar Reg Inc. of Colleyville, Texas, and Millers A Game LLC of Chandler, Ariz.

    Blackwell, 31, and his companies initially came on the Feds’ radar screens last year when the U.S. Department of Homeland Security (DHS) was alerted that he was wiring large sums of money and conducting cash transactions that raised terrorism concerns, according to court records.

    In the end, the SEC dryly advised a federal judge, “it became clear to DHS that Blackwell was not a terrorist — just a thief.”

    Regardless, the SEC said, the fraud was ongoing and  Blackwell still appeared to be selling the scheme as recently as Jan. 19.

    DHS operatives kept Blackwell under surveillance, assembled documents, conducted interviews and “made video and audio recordings of meetings during which Blackwell offered investments to undercover agents,” the SEC said in court filings.

    Records show that Blackwell was on the receiving end of a default judgment of $24 million in a civil fraud case filed in July 2008 and sought Chapter 7 protection in U.S. Bankruptcy Court on Christmas Eve 2008.

    Despite the lawsuit, judgment and bankruptcy filing, Blackwell continued to operate what he described as a “Fixed Income Trading Program” that offered returns of up to 30 percent a month, according to the SEC.

    To pull off his Ponzi and fraud scheme, Blackwell bragged about his “academic pedigree,” falsely claiming to have Master’s and PhD degrees “from a prestigious university in Spain” and also falsely claiming once to have been employed by Goldman Sachs and the Bank of Madrid.

    In 2007, with the scheme unknown to law enforcement, Blackwell stole $750,000 from an investor. In 2008, according to court filings, he swindled $200,000 from another investor, returning $9,926 in bogus “profits” to the investor. This investor was introduced to Blackwell by “an intermediary who claimed to run a faith-based business and investment development firm,” according to the SEC complaint.

    The purported faith-based intermediary assured the investor that Blackwell’s program in “foreign bank instruments” was “totally safe,” the SEC alleged. Despite the assurance of the intermediary, Blackwell immediately began to distribute the $200,000 provided by the investor to other companies and people, including Blackwell’s former business partner and Blackwell’s father.

    By late 2008, according to the SEC, Blackwell was engineering a scheme to rip off a former football player for the Dallas Cowboys. The player had been introduced to Blackwell by another player, according to the complaint.

    Neither player was identified in the complaint. The former player, lured by the promise of safe returns from an experienced international trader, gave Blackwell $250,000 in the belief that he was purchasing an investment note from HSBC Bank, one of the largest financial firms in the world.

    Blackwell “never” purchased an HSBC note. Instead, according to the SEC, he instructed an attorney exercising control over the escrow account to which the former Cowboy had wired the funds to transfer nearly all of the $250,00 to a Phoenix company controlled by a friend of Blackwell.

    When confronted by the SEC, Blackwell allegedly told the agency that he had “earned” the money despite his assurances to the player that the sum would be used to purchase a safe bank note.

    Although Blackwell showed the former football player a document on HSBC letterhead as purported proof  he had purchased a bank note with the player’s money, “HSBC’s Security and Fraud Risk group has confirmed that the letter was fraudulent.

    “In other words,” the SEC said, “it was a forgery.”

    The former player appears to have been ripped off for the entire $250,000 investment, the SEC said.

  • TalkGold Ponzi And Criminals’ Forum Deletes ‘Sticky’ Thread On InstaForex; Firm Named Defendant In CFTC Sweep Used Payment Processor Whose Contact Person Is Referenced In International Money-Laundering And Narcotics Case

    The TalkGold Ponzi scheme and criminals’ forum has deleted a “sticky” thread reportedly paid for by InstaForex, a dubious company named a defendant in a registration sweep conducted by the U.S. Commodity Futures Trading Commission last month.

    The PP Blog reported two days ago that InstaForex was using TalkGold to promote a scheme by which participants who sent InstaForex at least 1,000  U.S. dollars could qualify to win a Lotus Elise valued at more than $50,000. Although sweepstakes that require a purchase are illegal in the United States, InstaForex bizarrely instructed investors that they could improve their odds of winning the car by opening up to 100 accounts each.

    Some of the InstaForex promoters used photographs of attractive women to promote the scheme. It was unclear whether the photos were actual pictures of the promoters or whether they were stage props designed to lure skeptical investors.

    Why any investor from any country would open a single account — let alone 100 accounts — with a firm that advertises on TalkGold was left to the imagination. TalkGold and similar sites such as MoneyMakerGroup are referenced in multiple filings in U.S. federal courts as places from which international Ponzi and fraud schemes are pushed.

    A separate ad for which InstaForex apparently paid TalkGold $95 remains operational on the forum. The ad shows an image of a red Lotus and claims the company is “THE BEST BROKER IN ASIA.” Directly below the ad is an ad for a company that claims to provide a return of 525 percent “After 1 Minute” and 9,860 percent “After 6 Hours.”

    Just four of the thousands of schemes pushed on TalkGold — Imperia Invest IBC, EMG/Finanzas Forex, Legisi and Pathway to Prosperity — created tens of thousands of victims globally while gathering hundreds of millions of dollars, according to court records.

    The precise time at which TalkGold deleted the paid “sticky” thread on InstaForex and the precise reason why the thread of at least 109 pages was deleted were unclear. Records suggest the thread was deleted in the past 24 hours. The once-massive thread now returns a “No Thread specified” error.

    Among other things, InstaForex advertised that it accepted payments through Perfect Money, a murky money-services business purportedly operating from Panama. Imperia Invest, which the SEC accused in October of stealing millions of dollars from thousands of participants, also used Perfect Money, according to court filings.

    Included among the Imperia Invest victims were thousands of Americans with hearing impairments, according to the SEC.

    Meanwhile, the name of Roger Alberto Santamaria del Cid — the purported contact person of Perfect Money — appears in federal court filings in the EMG/Finanzas Forex forfeiture case.

    A Florida-based task force that specializes in detecting and uncovering massive fraud schemes brought the EMG/Finanzas Forex case last year. Del Cid, Perfect Money’s purported contact person in Panama, is listed as EMG’s “Secretary” in court filings that allege that tens of millions of dollars seized in the probe were tied to the international narcotics trade.

    EMG/Finanzas Forex was so corrupt that some participants were told the only way they could get their money out was to recruit new investors, have the new investors pay them directly — and use the proceeds from the new investors to recover their initial outlays, according to court filings.

    The very first EMG post on the now-shuttered ASA Monitor Ponzi and criminals’ forum referenced yet-another widely promoted Ponzi scheme: 12DailyPro. The 12DailyPro case, brought by the SEC in February 2006, also is cited in the AdSurfDaily Ponzi prosecution brought by the U.S. Secret Service in August 2008. ASD also was promoted on TalkGold.

    Writing on ASA Monitor, an EMG/Finanzas Forex aficionado claimed to have learned the ropes from 12DailyPro.

    “I have been in internet business for 3 years now and in autosurf industry from 12dailypro,” the ASA poster began. He (or she) then proceeded to tell readers about how they could earn commissions by recruiting for EMG/Finanzas, which the Feds later described as an international menace with tentacles in Central America, South America and Europe.

    Court filings in the EMG/Finanzas case paint a picture of an incredibly elaborate maze of companies and bank accounts set up to confuse both investors and law enforcement. At least 59 bank accounts, 294 bars of gold and nine luxury vehicles were seized.

    The EMG allegations were explosive because they showcased the undeniable fact that people who promote programs such as HYIPs and autosurfs because such programs may pay “commissions” to recruit new members may be operating as fronts or conduits for international drug dealers and money-launderers.

  • SPECIAL REPORT: Forex Firms Named In CFTC Sweep Used Same Offshore Processor As Alleged Imperia Invest Fraud; Name Of Man Linked To ‘Perfect Money’ Appears In Ponzi Forfeiture Complaint In Which Feds Tied Cash To International Narcotics Trade

    InstaForex, a company accused by the CFTC last month of targeting U.S. customers to purchase unregistered offerings and paying through Perfect Money, says participants can win this Lotus — but they have to pay to play by depositing at least $1,000 USD. Sweepstakes that require a purchase by participants are illegal in the United States.

    SPECIAL REPORT: UPDATED 2:27 P.M. ET (U.S.A., FEB. 9) Federal court and web records show that at least three of the 14 purported Forex dealers named defendants in a major sweep of unregistered firms last month by the Commodity Futures Trading Commission advertised that they accepted funds from Perfect Money.

    Perfect Money is a murky money-services business purportedly based in Panama that allegedly was used by a company that defrauded thousands of deaf investors by promising Visa debit cards and returns of 1.2 percent per day, according to federal records. The name of a man purported to be Perfect Money’s contact person in Panama City is referenced in federal court filings that tie money from the alleged EMG/Finanzas Forex fraud scheme to an international narcotics probe that led to the seizure of at least 59 bank accounts in the United States and the companion seizure of 294 bars of gold and at least seven luxury vehicles.

    The number of purported Forex dealers that allegedly accepted Perfect Money and were named defendants in the CFTC sweep could be higher than three because not all of the defendants publicly disclosed the precise mechanisms by which they accepted payments from U.S. customers.

    According to court filings and web records, some of the companies also advertised that they accepted funds from Liberty Reserve, another murky offshore processor, and even PayPal. PayPal’s Acceptable Use Policy specifically bans the use of its services for “currency exchanges,” businesses that support Ponzi and pyramid schemes and businesses associated with “off-shore banking.”

    PayPal says it requires “pre-approval” for any businesses “selling stocks, bonds, securities, options, futures (forex) or an investment interest.” Whether any of the businesses named in the CFTC Forex complaints received approval from PayPal to either use its name in promos or use its services to collect money is unclear.

    Records show (see paragraph 17 of SEC complaint) that Perfect Money payments were accepted by Imperia Invest IBC, the mysterious offshore company accused by the SEC in October 2010 of pulling off a spectacular fraud that fleeced at least 14,000 people of millions of dollars. Included among the Imperia victims were thousands of Americans with hearing impairments, the SEC said.

    Imperia was promoted on Ponzi scheme and criminals’ forums such as TalkGold, which also promoted at least two of the companies named defendants in the CFTC’s Forex sweep. One of the companies — InstaTrade Corp., doing business as InstaForex — is advertising on TalkGold that participants will have a chance in the months ahead to win a Lotus Elise, a sports coupe that carries a price tag of more than $50,000.

    To win the expensive car, however, investors have to pay to play, according to InstaForex. Sweepstakes that require a purchase are illegal in the United States, according to the Federal Trade Commission.

    InstaForex investors can qualify to win the Lotus by replenishing “the real trading account in InstaForex Company with 1000 USD or more during [the] Campaign period,” the company says in stilted English.

    “Participant has a right to register in the Campaign more than 1 account and raise his/her chances for the victory,” InstaForex continues in stilted English. “However, in case contest administration detects more than 100 accounts registered by one person, it reserves the right to decrease the number of accounts till (sic) 100.”

    Meanwhile, the name of Roger Alberto Santamaria del Cid — the purported contact person of Perfect Money — appears in federal court filings in the EMG/Finanzas Forex forfeiture case. The EMG/Finanzas case was brought last year by a federal task force based in Florida and alleges that tens of millions of dollars seized in Arizona as part of the probe were linked to the international narcotics trade. (See Paragraph 10 of the federal affidavit for the reference to del Cid, who is identified as the “Secretary” of EMG. Del Cid is referenced in domain-registration data for PerfectMoney.com as the contact person for Perfect Money Finance Corp.)

    Elements of the prosecution against more than $100 million in assets linked to EMG/Finanzas were brought by members of the same task force that brought civil and criminal prosecutions against Florida-based AdSurfDaily. Some of the members of the task force have experience working with the U.S. Drug Enforcement Administration (DEA), the U.S. Secret Service, the IRS and other agencies to reverse-engineer fantastically complex financial crimes.

    At least one of the investigators, according to records, was instrumental in bringing the successful money-laundering conspiracy prosecution against the e-Gold payment processor in 2007. The e-Gold case was brought in U.S. District Court for the District of Columbia. It resulted in guilty pleas announced on July 21, 2008.

    About two weeks later, the U.S. Secret Service raided ASD’s headquarters in Quincy, Fla. Federal prosecutors later alleged ASD was operating a Ponzi scheme that had gathered at least $110 million — and had ceased using e-Gold “shortly after” the e-Gold indictments were announced in April 2007.

    Federal prosecutors also alleged that 12DailyPro and PhoenixSurf — two autosurfs charged by the SEC with operating Ponzi schemes — also had used e-Gold. In December 2010, prosecutors said that ASD also had the ability to accept money from e-Bullion, yet-another processor accused of accepting and distributing Ponzi funds from various schemes.

    James Fayed, the operator of e-Bullion, was accused of arranging the July 2008 murder of Pamela Fayed, his estranged wife and potential witness against him. Pamela Fayed’s body was found in a California parking garage  just days before the ASD raid in Florida.

    Erma Seabaugh, known among ASD members as the “Web Room Lady,” used E-Bullion in November 2007 to transfer $10,510 to ASD, according to a forfeiture complaint filed in December 2010.

    On Jan. 26, the CFTC sued 14 purported Forex companies simultaneously, alleging that they were unregistered entities that were illegally targeting  U.S. residents. At least three of the companies — ForInvest (Perfect Money reference appears online), InstaTrade Corp. (see Paragraph 21 of CFTC complaint for the Perfect Money reference) and Kingdom Forex Trading and Futures Ltd. (see Paragraph 17 of CFTC complaint for the Perfect Money reference) — accepted Perfect Money, according to records.

    Two of the complaints — InstaTrade and Kingdom Forex — were brought in the U.S. District Court for the District of Columbia, the same venue in which the e-Gold case was brought in 2007. The case against ForInvest was brought in U.S. District Court from the Northern District of Illinois.

    Perfect Money advertised a relationship with at least two of the defendants named in the CFTC cases: InstaForex and FXOpen, according to web records.

    On its website, Perfect Money advertised its relationship with InstaForex and FXOpen, two companies accused by the CFTC of targeting Americans with unregistered Forex offerings. The FXOpen website now appears to be blocked from loading in the United States. It was not immediately clear if the site will load in other parts of the world.

  • EDITORIAL: On Club Asteria, FxPowerPro And DisasterClub — And What The U.S. State Department Could Do To Contain The Danger Posed By The Talk Gold Ponzi And Criminals’ Forum And Others Of Its Ilk Worldwide

    Let’s start with the chaos in Egypt this week. Protesters have streamed into the streets to demand that President Hosni Mubarak step down after three decades of autocratic rule. The government initially reacted by shutting down the Internet. As tensions rose, protesters, activists and journalists covering the events were beaten. Some of the protesters were killed.

    When a government shuts down the Internet and starts chilling its people and journalists, it’s for a reason: It does not want the world to witness events, and it wants journalists to know they’ll pay a price for trying to report anything other than the government line to the masses. State-run TV beamed images of tranquility, not images of unrest. When the chaos became impossible to sanitize or ignore, the government blamed events on impure thinkers and their media lackeys, planting the seed that “foreign agendas” were at work.

    It was the cue the loyalists needed to start threatening journalists with death by beheading. Fearing for their safety, the journalists abandoned the immediate turf — but not the story. They started reporting from “undisclosed locations.” The word was still getting out, just not the pictures in the degree desired.

    The immediate events in Egypt, of course, are much more serious than, say, the immediate events at the TalkGold Ponzi scheme and criminals’ forum. Even so, some of the parallels are striking.

    The Egyptian government, for example, is trying to control the message. So is the TalkGold forum, which wants the Ponzi shills and criminals who’ve involved the worldwide masses in one catastrophic fraud scheme after another to know they have a safe haven. TalkGold also wants the critics to know the Mods regard them as naysayers and trolls who can be “banned” without notice, rather like the Mubarak regime regards those muckraking reporters and their “foreign agendas.”

    It won’t work at TalkGold for the same reason it won’t work in Egypt: People still have eyes and ears and the ability to be discerning. There may be only one Tahrir Square in central Cairo to control, but “undisclosed locations,” voices, cell phones, cameras and reporters’ pads and tape recorders are in plentiful supply. They can’t be controlled.

    Egypt’s bid to control the message has resulted in a catastrophic PR problem on top of a political crisis. Meanwhile, TalkGold’s ineptitude, ham-handedness and arrogance has set the stage for its own PR disaster. You can read about it on RealScam.com, which sides with the afflicted masses, not the people who’d afflict the masses.

    While state-run TV in Egypt is airbrushing the dangers of autocratic rule and beaming images of tranquility as the country’s inhabitants try to figure out how they’ll get by for yet-another year on the wages of poverty, TalkGold is airbrushing the economic and security dangers of viral criminality and seeking to tranquilize (and recruit) the masses by using flowery language and even flattery to tell them that opening an account with an offshore payment processor and sending money to any one of hundreds of schemes is their ticket out of the ranks of hopelessness.

    Poster “Ken Russo,” for example, would have the people of Egypt — and the poverty-stricken people of the United States and other countries  — know that the latest “program” he is promoting is one of the “best” he has ever seen.

    One of “Ken Russo’s” current favorites is Club Asteria, which claims to “care” and contends that its “100,000 PLUS MEMBERS CAN’T BE WRONG.” Meanwhile, Club Asteria further claims to “Empower our Members” and to “help expatriates and immigrants to become more successful in their personal and professional lives and enable them to send money home to their loved ones.”

    Tugging at heartstrings, Club Asteria further claims that “[t]hrough our philanthropic efforts we make an immediate difference for struggling individuals, families and communities by focusing on improving nutrition, housing, health care and education.”

    That performing legitimate due diligence on Club Asteria is virtually impossible doesn’t seem to compute with “Ken Russo” and other affiliates. The mere fact the “program” is being promoted on TalkGold is reason enough to avoid it. Any business the company generates from TalkGold likely is radioactive. Club Asteria, for example, could find itself in possession of money that has flowed from fraud scheme to fraud scheme. Even if Club Asteria were legitimate, the fact it is being promoted on TalkGold puts it at one of the principal intersections of crime and fraud.

    About the only good thing about the Internet being down in Egypt this week while its people took to the streets was that “Ken Russo” and his fellow promoters couldn’t sell Club Asteria and other highly questionable “programs” to the disaffected Egyptian masses. (On a side note, one of the companies named in a Forex lawsuit by the U.S. Commodity Futures Trading Commission(CFTC)  just days ago announced on TalkGold that the shutdown of the Internet in Egypt had disrupted its ability to interact with Egyptian clients and other clients in the region. A poster purporting to represent FXOpen — under an underlined  heading of “Arabic Live Chat Disruption” — noted that “[o]ur hopes and prayers go out to the Egyptian people.”)

    And even as the Egyptian government is inciting violence against journalists — to the degree that the U.S. Department of State issued a special statement on the matter — the TalkGold forum is banning posters who speak ill of Ponzi and fraud schemes that are gathering untold sums of money, channeling cash to some of the darkest corners of the Internet and keeping people in financial bondage.

    Here is an idea for the Department of State and Secretary Hillary Clinton: Warn Americans — and other peoples of the world — about sites such as TalkGold. Mention them at a Congressional hearing. Instruct U.S. diplomats the world over to inform their host governments about the security and economic dangers posed by TalkGold and a sea of similar sites. Tell elected officials that the State Department is serious about monitoring sites that are keeping people in human bondage by spreading financial misery globally. Define Talk Gold as a global pariah, an enterprise without a state that would be proud to claim it. Inform the world regularly that the only form of diplomacy on TalkGold is robbery without a gun.

    TalkGold has been named repeatedly in court filings that identify it as a place from which fraud schemes are openly pushed. The ink on recent CFTC lawsuits that identify two of TalkGold’s paid Forex advertisers as the purveyors of unregistered offerings targeted at U.S. citizens is barely dry, and yet the unabashed cheerleading continues.

    The alleged AdSurfDaily Ponzi scheme, which also was pushed from TalkGold, gathered at least $110 million. It caught the attention of the U.S. Secret Service and resulted in civil and criminal probes that could put people in prison for decades, and yet the unabashed cheerleading continues.

    All the autosurfs prominently touted on TalkGold are just recycled forms of ASD, which itself allegedly was a recycled form of 12DailyPro, which the SEC smashed five years ago this month.

    It’s the same thing with Pathway To Prosperity, yet-another alleged scheme promoted on TalkGold that gathered tens of millions of dollars and could put people in jail for decades. All of the HYIPs promoted on TalkGold are just recycled forms of Pathway to Prosperity, which was busted by the U.S. Postal Inspection Service, and Legisi, which was busted by the SEC after the U.S. Secret Service infiltrated its operations by using an undercover operative. The state of Michigan also used an undercover operative in the Legisi probe.

    The best way to deal with TalkGold and similar sites is to tell the world that they promote global criminality and rank illicit profits above human rights and common human decency.

    Like Egypt in its current state, TalkGold is not about freedom — financial or political. It is about the institutionalization of corruption. If TalkGold were an oncological hospital, its doctors would be cheerleading for the cancer to spread and its nurses would be rooting for the highest death rate because intervening to cure the disease and comfort the afflicted would be bad for institutional and personal profits.

    A purported Forex program known as FxPowerPro currently has a 20-page thread on TalkGold. Among other things, FxPowerPro is claiming that “YOUR STABILITY IS OUR PURPOSE.” Its website appears to come from an editable script kit used by hundreds of sites globally, and it says it will accept any sum between $5 and $20,000. FxPowerPro proudly displays a link the the TalkGold forum.

    A few days ago an eagle-eyed PP Blog reader passed along some information about yet-another incongruous program known as “Disaster Club.” Disaster Club appears to be a new wrinkle on cash-gifting schemes. It purports to arrange member-to-member “grants,” asking visitors if they’d like to turn a “One-Time $100 into $17,700.”

    Bizarrely, Disaster Club uses a presentation by which it names four hypothetical members: “Job,” and “Cain, Abel and Eve.”

    “After joining the Club you will receive the name of your assigned member, and each week on Monday you are to send a grant in the amount shown in the grant schedule directly to that assigned member,” Disaster Club says.

    “Should you join the Club between Tuesday and Sunday, send your grant as soon as you receive your assigned name, do not wait until Monday,” Disaster Club coaxes. “Every grant thereafter will be sent according to the Monday schedule. To create a cash explosion from your home three members will each be given your name to send their $100 grants to ($100 X 3 = $300) and each stage you will keep the stated amount shown from the amount you received from the 3 members $100 + $100 + $100 = $300 you keep $50. Then according to the grant schedule shown, you are to send your grant directly to the same member (Job), and the same three members (Cain, Abel and Eve) will each send their grants directly to you.”

    Disaster Club purports to be headquartered in Florida and claims to be a “club that allows like minded members to pool their resources together to help the hurting and homeless victims of any Disaster in any State, or even help others anywhere in the world.”

    The “opportunity” does not appear to have its own thread at TalkGold yet, but there are plenty of disasters already waiting there for its readers. Just don’t expect to get a warm reception if you have a “foreign agenda” — you know, like those muckraking enemies of the Mubarak regime in Egypt.

    Although it’s not likely you’ll be threatened with beheading at TalkGold, you might get deleted if you tangle with “Ken Russo” and others and challenge readers to use their heads for something other than a hat rack.

    There is nothing decent about Talk Gold and its cancer-spreading cousins worldwide. Only the broadest public-awareness campaign can succeed against the threats they pose to the governments of the world and billions of Internet users globally — and the U.S. State Department could make a difference by describing the criminal forums as places from which human rights are set up to be trampled 24/7/365.

    Any true diplomat from any country worldwide who spent so much as 15 minutes on TalkGold could see the danger to countries, governments and citizens worldwide. The world’s diplomatic corps are uniquely positioned to do something the world’s law-enforcement corps cannot do: be at all places at all times.

    A sustained effort by the world’s diplomats to identify and monitor the fraud sites — and openly share the information with the people of the world — could go a long way toward containing a plague that only will mushroom into a catastrophe if left alone.

  • ‘FRAUD CREEP’: The Two-Word Term That Explains How Crime Expands On The Internet To Affect Tens Of Thousands Of Victims At A Time

    EDITOR’S NOTE: Our definition of “fraud creep” — and suggestions on the context in which the term should be applied — appears lower in this story.

    First, some background . . .

    Investigators now are counting victims of massive, web-based fraud schemes tens of thousands at a time. Such scams pose both budgetary and logistical challenges to law enforcement, bankruptcy trustees and court-appointed receivers — and a single scam may take years to unravel. In recent court filings, federal prosecutors said they had amassed 500,000 pages of emails, 100,000 pages of banking records and 5,000 pages of other records as part of the AdSurfDaily Ponzi probe, which began in July 2008. The U.S. Secret Service raided ASD’s headquarters in August 2008.

    The ASD Ponzi scheme, which operated from Florida, may have defrauded 40,000 or more victims while gathering at least $110 million, prosecutors said.

    Meanwhile, in a civil case brought in Utah in October 2010, the SEC said Imperia Invest IBC defrauded more than 14,000 investors worldwide while gathering small sums that ultimately led to a haul of more than $7 million. Among the victims were thousands of deaf investors in the United States.

    Imperia claimed until late 2009 to be located in the Bahamas, but the Bahamian address was “fictitious,” the SEC said, adding that Imperia later claimed to be located in Vanuatu.

    But Imperia was “not registered to do business in Vanuatu and the address listed on its website appears also to be fictitious,” the SEC said.

    Despite the fact Imperia gathered money from thousands of Americans, “[n]either Imperia nor its securities are registered with the Securities and Exchange Commission,” the SEC said. “Imperia is not licensed or registered with the Commission, with any state, or with any Self Regulatory Organization.”

    In a separate civil case brought in Nevada last month, the FTC accused Utah resident Jeremy Johnson, I Works Inc. and other companies of orchestrating a massive, continuity-billing scheme that used 51 shell companies, maildrops and “straw-figures” as company officers “to keep the scam going.”

    The complaint names as defendants 10 individuals, 10 corporations and the 51 shell companies. Citing court documents, the Salt Lake Tribune reported that Johnson’s companies allegedly took in more than $350 million and ensnared 15,000 consumers a day at the height of the scheme.

    Customers were lured into purchasing “trial” memberships for “bogus government-grant and money-making schemes,” and then were “repeatedly” charged monthly fees “for these and other memberships that they never signed up for,” the FTC said.

    “[T]his scheme has caused hundreds of thousands of consumers to seek chargebacks — reversals of charges to their credit cards or debits to their banks accounts,” the FTC said.

    “The high number of chargebacks has landed the defendants in VISA’s and MasterCard’s chargeback monitoring programs, resulted in millions of dollars in fines for excessive chargebacks, and prevented the defendants from getting access to the credit card and debit card billing systems using their own names,” the FTC said.

    “To keep the scam going, the defendants tricked banks into giving them continued access to these billing systems by creating 51 shell companies with figurehead officers, and by providing the banks with phony ‘clean’ versions of their websites.”

    Like ASD’s Andy Bowdoin, Johnson denies wrongdoing.

    Making Sense Of It All

    Today the PP Blog offers a two-word term, contexts in which we believe the term applies and proposed definitions as a means of educating the public by describing a complex process of organized, international theft and reducing it to its essence. Understanding how online schemes proliferate — and the emotions they trade on and “scam signals” they send — may help consumers protect themselves from the fraudsters.

    fraud creep [frawd kreep]

    1. Principal definition: The tendency of a web-based financial crime undetected by law enforcement to expand across the Internet until it achieves critical mass, reaches the limits of a criminal organization’s ability to manage and forces investigators to respond. Such a crime may creep (advance slowly) to ultimately create thousands or even tens of thousands of victims globally.

    2. Associated definition: A criminal business model (fraud-creep enterprise) that includes a suggestion of exceptional earnings and generous recruiting commissions and the use of tailored messages that appeal to greed, envy, despair or anger. A fraud-creep enterprise also may be characterized by images of wholesome or enticing amenities designed to attract prospects to an illicit scheme whose purpose is hidden or undisclosed.

    3. Associated definition: A form of deceit (fraud-creep plan) employed by hucksters, particularly on the Internet, characterized by efforts to popularize an illicit pursuit by withholding critical information and demonizing market regulators. Profits are reaped by tapping into disillusionment and despair and creating a bogeyman or figure of blame to rationalize participation in a dubious or illegal enterprise. The bogeyman or figure of blame often may be the government, a branch of government, a law-enforcement or regulatory agency or government employee.

    4. Associated definition: A particular instance of such deceit in which an appeal is made to recruit holders of a particular political philosophy into a scam. Politicians and other public figures may be demonized in this form of fraud creep, which may include vicious name-calling or passive-aggressive slime. Images of success may be juxtaposed against images of people or entities cast as barriers to success. This form of fraud creep also may be accompanied by an effort to create marketplace sympathy and to sanitize and expand a fraud scheme by suggesting evil forces are seeking to prevent investors and eager entrepreneurs from creating wealth by erecting barriers or denying them access to the marketplace.

    5. Associated definition: One who practices fraud creep — i.e., a fraud creep.

    Usage example: As the economy struggles and mortgage foreclosures pile up, law-enforcement agencies nationwide are seeing more and more examples of fraud creep in which criminals succeeded in  making Internet scams go “viral” by luring thousands of prospects with images of amenities they’ll purportedly enjoy by registering for a program and sending money.

    Usage example: The ASD fraud-creep and Ponzi scheme gradually expanded to fleece more than 40,000 investors out of at least $110 million, investigators said, noting that participants were lured by the promise that they would be paid $5,000 if a family member or friend they recruited spent $50,000 on “advertising.”

    Usage example: Although Smith routinely bemoaned “Washington” while showing a video of himself behind the wheel of a Maserati parked outside a mansion in a driveway lined by exotic flowers as a groundskeeper toiled nearby, authorities say the investigation uncovered a classic case of fraud creep: Smith simply decided that registering with the SEC was for the “fools who don’t understand the Constitution.” The Maserati, authorities said, was a day rental — and Smith paid the groundskeeper $100 to let him film the driveway and mansion scenes on a Saturday morning when the owners were on the golf course.

    Usage example: The stage was set for fraud creep, authorities said, when the accused huckster — a recidivist who did not disclose his previous conviction for securities fraud in a $20 million scheme  — persuaded  unsophisticated investors that the FBI was forcing the best companies to move offshore and that the SEC and IRS were trying to destroy the middle class.

    Usage example: Authorities began to suspect fraud creep when Jones incongruously explained to investors that the United States was turning into both a “Nazi” and a “Socialist” state and making it impossible for honest “Main Street Capitalists to deliver the American Dream and do what the market does best: get poor people and illegals off Food Stamps and turn them into productive citizens.”  Although Jones, a U.S. resident, frequently talked about his “attorney” and the efforts he had undertaken to ensure his offshore company complied with all laws and regulations,  he refused to provide prospects the name of the attorney, claiming that a previous attorney had been hounded by callers who had sought to verify claims about the program.

    Usage example: Federal agents announced the arrest of yet-another alleged fraud creep today, saying the Florida man was either running or participating in multiple fraud-creep schemes, including autosurfs, HYIPs and penny-stock scams.

    Usage example: Fraud creeps on the fraud-creep forums were urging their marks not to file complaints with regulators or law enforcement — and not to contact the offshore payment processors that had processed all the Ponzi payments for the suddenly defunct HYIP. One forum fraud creep opined that the government would steal any remaining money. Another issued a dire warning that a receiver was sure to be appointed by the court and that the “greedy” receiver and “brain-dead” judge would conspire against the participants. Yet-another fraud creep ventured that the government would use the remaining fraud proceeds to help it finance its own Ponzi scheme: Social Security.

    Usage example: In court documents, federal authorities said fraud-creep forums such as TalkGold, MoneyMakerGroup and ASAMonitor were helping fraud creeps and fraud-creep schemes steal millions of dollars globally.

  • EDITORIAL: ASD By The Numbers: Why America And The World Should Be Shocked — And Why Serial Autosurf And HYIP Promoters Should Be Prosecuted

    ASD's Andy Bowdoin.

    UPDATED 12:04 P.M. ET (U.S.A.) In court filings this week in the AdSurfDaily autosurf Ponzi scheme case, federal prosecutors in the District of Columbia revealed a series of jaw-dropping numbers. The biggest of these is 500,000 — the number of pages of emails gleaned so far in the investigation, which began in July 2008.

    Because prosecutors put the qualifier “at least” on the already-staggering number, it is clear the number actually could increase. Each of the pages is subject to the discovery process, meaning that attorneys from both sides and perhaps the court itself faces the monumental challenge of sifting through at least half a million pages of scheme-related correspondence.

    Other big numbers in the alleged $110 million ASD Ponzi include 100,000, the number of pages of bank records, and 5,000, the number of pages of documents that emerged after the U.S. Secret Service searched ASD’s office in Quincy, Fla., and the home of company president Andy Bowdoin.

    To date, investigators have identified 40,000 potential ASD victims. This number also could grow because there is reason to believe that “there may be members who provided funds to ASD but whose information ASD did not enter into its database,” according to prosecutors.

    ASD’s database included information on 97,000 members. Some participants have claimed ASD actually had 120,000 members. Regardless of the final number that emerges, ASD created victims by the tens of thousands, including victims who do not live in the United States, prosecutors said.

    The import — and the danger of these numbers — is that ASD is only one autosurf. There may be hundreds if not thousands of autosurfs operating in the world at any one time, along with hundreds or thousands of HYIPs. Like other autosurfs and HYIPs, ASD was promoted on Ponzi forums such as TalkGold, MoneyMakerGroup and ASA Monitor. The Ponzi pitchmen love American money, and commission-grubbing American salespeople and serial promoters who play dumb to line their pockets at the expense of their fellow countrymen specialize in spreading the misery globally.

    In May, the PP Blog reported on criminal charges filed against Nicholas Smirnow, the alleged operator of the Pathway to Prosperity (P2P) Ponzi and HYIP scheme. The numbers that have emerged from that alleged scheme are equally stunning: $70 million fleeced from 40,000 victims in 120 countries from “all of the permanently inhabited continents of the world,” according to the U.S. Postal Inspection Service.

    The criminal complaint filed against Smirnow specifically references the TalkGold, MoneyMakerGroup and ASA Monitor Ponzi forums — the same forums from which ASD and countless other schemes have been promoted.

    Legisi, yet another alleged scheme pitched at the forums, also produced some big numbers. Among them are $72.6 million fleeced from at least 3,000 victims. Matthew Gagnon, one Legisi pitchman, netted $3.8 million alone from the scheme, according to the SEC.

    So, in just the three alleged schemes referenced in this column — ASD, P2P and Legisi — the numbers shape up like this: at least $252.6 million gathered from at least 83,000 victims. If the P2P and Legisi cases are shaping up like the ASD case from the standpoint of paper production, investigators, attorneys from both sides and the courts may have to go through more than a million pages of documents and corresponding bank records to make sense of it all.

    Meanwhile, the wink-nod, serial promoters continue to ply their trade on the Ponzi boards — all while the U.S. and world economies are trying to navigate the choppiest waters since the Great Depression. While the serial promoters are lining their pockets at the expense of Moms and Pops from virtually every corner of the earth, they are anticipating the danger signs consistent with the implosion of their currently favorite Ponzi — and they are preparing their next round of lies to protect their illicit profit pipeline and explain away the problems that inevitably will emerge.

    Some of the professional criminals will tell their marks that it is their duty to be patient when Ponzi payments slow down. They’ll add that problems affect all enterprises regardless of size, and that it’s not unusual for payment bottlenecks to occur. They’ll explain that it likely is a problem with software or the need to acquire a new server to accommodate traffic. After all, they’ll say, “growing pains” are something to celebrate because they signal the success of the enterprise.

    And the serial criminals also will talk about a doubting recruit’s duty to be loyal to the enterprise. After all, they’ll explain, the company is doing the right thing by acquiring the equipment and manpower needed to streamline operations and thus return to a normal payout schedule.

    While the professional Ponzi criminals are explaining all of this, investors will become further separated from their money before the final round of excuse-making begins. Investors will be cautioned not to contact the authorities and told not to contact the payment processors. After all, the serial pitchmen will explain, if the authorities seize the cash or if the payment processors freeze the accounts, no one will get paid.

    When the scheme ultimately collapses, some of the serial criminals will shrug their shoulders and feign surprise. They’ll explain why they had every reason to believe that this one was different, that they’d been assured by the Christian operator it was different. No matter, they’ll say, perhaps positioning themselves as people of faith. Recruits who invested more than they could afford to lose have only themselves to blame, they’ll claim. (This is if they call it “investing” at all; many serial criminals avoid that word like the plague. After all of these years and all of this Bible-thumping, they still apparently believe that it’s possible to skirt securities laws by avoiding the word “investment” and calling it something else.)

    Then they’ll unapologetically move on to the next scam. After all, they’ll explain, they have a right to make a living. Some of them will explain that the government, which refuses to see the beauty of the autosurf and HYIP models, is to blame. Along the way they’ll create some clone promoters, and the clones will multiply. The clones will add to the purported, pro-Bible (and antigovernment chorus) — and before long, investigators trying to reverse-engineer a single case will be sifting through 500,000 pages of emails, 100,000 pages of bank records and 5,000 pages of records created as the result of the execution of a search warrant or as a result of actual documents seized.

    Agents then will begin the mind-numbing and time-consuming process of identifying victims by the tens of thousands.

    Some of the victims will lose their homes because they borrowed against their equity to take advantage of “bonus” ad packs and to maximize their “earnings” through “compounding.” Others will have lost savings set aside to educate their children. Still others will have lost their life savings and money set aside for retirement.

    Many of the people who created all the pain will sprint back to the Ponzi forums — and the government will be left to clean up the colossal mess. The Ponzi pitchfest is in constant motion as property values decline in neighborhood after neighborhood, driven by the foreclosures glut. The Stepfords among the promoters will write their Congressman or Senator or perhaps the Inspector General at the Justice Department.

    They’ll more or less say that it would be in the interests of America if the Congressman or Senator or Inspector General would see fit to fire all the prosecutors and agents who made these unseemly events occur.

    And then they’ll gather up their lists of suckers and try to recruit them into yet-another MLM, autosurf or HYIP nightmare. This they will call “freedom.” Some of them will be angry. Some of them will write rambling diatribes on forums. Invective will be part of the diatribes. Some of them will call public officials “Nazis” and “Socialists,” perhaps even in the same fractured paragraph. Some of them even will try to sue the government or have the prosecutors and judges charged with crimes. They’ll talk about “treason” and high crimes against the Constitution.

    What they will never do is make any sense.

    It is impossible to imagine that any government agency has the resources to take down all of the corrupt MLMs, autosurfs and HYIPs. But one can imagine a systematic process by which the government identifies the serial promoters and plans a litigation strategy from which will emerge the “shot heard round the world” of corrupt online investment “opportunities.”

    That day cannot come soon enough — and the numbers demand it: more than $250 million gathered from victims of just the three alleged schemes referenced on this page, perhaps 1 million or more emails and other documents produced by the investigations, at least 83,000 victims from virtually all corners of the earth, an untold number of agents/investigators from multiple government entities forced to sift though monumental piles of evidence.

    It is clear that wealth is being drained by the billions. It is equally clear that vast sums of money have gone missing in the Age of Terrorism.

    Clearest of all, however, is that the corrupt MLMs, autosurfs and HYIPs cannot thrive without their greedy and dangerous promoters — and that highly public lawsuits and early morning raids designed to hold the wink-nod Ponzi pitchmen accountable would send an unmistakable message that pain is in your future if you promote these criminally toxic businesses. Serial promoters deserve the same treatment as mid-level drug dealers.

    No economy can thrive if a single case among thousands of potential cases is producing 500,000 pages of emails and creating 40,000 victims while consuming tens of millions of dollars — and if “shell companies,” the “shadow banking system” and wink-nod, serial promoters are driving the wanton criminality and letting the cancers metastasize globally.

    Here’s hoping such an operation aimed specifically at corrupt MLMs, autosurfs and HYIPs already is under way.

  • PROSECUTION: ASD Member Funded Account With Transfer From E-Bullion And Used Ad Rotator To Pitch ‘StreamlineGold,’ Apparent Pyramid Scheme; Records Show E-Bullion Founder Charged In Wife’s Murder In California

    An AdSurfDaily promoter whose cash was seized in February 2009 and now has been targeted for forfeiture funded one of her three ASD accounts in part with a transfer from E-Bullion, a shuttered payment processor whose founder was charged in 2008 with operating an unlicensed money-transmitting business and hiring a hit man to kill his estranged wife, according to records.

    The E-Bullion allegation raises troubling new questions about the sinister worlds of autosurfs and HYIPs, how ASD and its members were exchanging money and whether ASD and top promoters were employing secret conduits. In 2008, prosecutors asserted ASD had a relationship with E-Gold, a payment processor accused in 2007 of money-laundering. Yesterday’s assertion that ASD also had a relationship with E-Bullion marked the first time that prosecutors have raised E-Bullion’s name in the ASD case.

    Erma Seabaugh, known among ASD members as the “Web Room Lady,” used E-Bullion in November 2007 to transfer $10,510 to ASD, according to a forfeiture complaint filed yesterday.

    SCREEN SHOT: Federal prosecutors asserted yesterday that ASD member Erma Seabaugh funded one of her ASD accounts by transferring $10,510 from E-Bullion.

    E-Bullion founder James Fayed was jailed in California in August 2008, the same month as the seizure of tens of millions of dollars from ASD and nine months after the firm was used to transfer money to ASD, according to records. He initially was charged in an indictment unsealed in August 2008 by federal prosecutors with operating an unlicensed money-transmitting business that had processed more than $20 million in Ponzi scheme payments. The scope of E-Bullion’s alleged Ponzi business is unclear, but the company now has been linked to at least three alleged Ponzi schemes.

    In September 2008, Fayed was charged by the Los Angeles District Attorney’s office with the July 2008 murder of his wife, Pamela Fayed.

    In June 2008, a month before she was killed in a California parking garage by a man who allegedly had accepted $25,000 from James Fayed to carry out the plot, Pamela Fayed had informed federal prosecutors in California that she wished to cooperate in the investigation of E-Bullion, according to records. E-Bullion is referenced in court files as a payment processor used by Gold Quest International (GQI), an alleged Ponzi scheme operating in Las Vegas that was charged by the SEC in May 2008 and also was charged by Canadian regulators.

    A total of four people, including James Fayed, now have been charged in the murder plot. As with many things in the miserable worlds of HYIPs and autosurfs, the prosecution of GQI by the SEC turned into Theatre of the Absurd.

    GQI, accused in May 2008 by the SEC in a $29 million Ponzi case, sought to derail the case by filing a lawsuit for $1.7 trillion against the agency. Company officials absurdly asserted that GQI was immune to U.S. law because its Las Vegas operations enjoyed purported sovereignty that was portable from an “Indian” tribe in North Dakota and that GQI also was off-limits to prosecution in the United States because it was registered in Panama.

    Chillingly, E-Bullion also is referenced in documents filed by the Ontario Securities Commission in a case against Ponzi swindler Brian David Anderson, a former Christian clergyman from Vancouver, British Columbia. Anderson was sentenced to prison in the United States earlier this year for his role in a Ponzi scheme known as Frontier Assets.

    Anderson also was linked to a mysterious scheme known as the “Alpha Project.” U.S. and Canadian investigators also identified Anderson as a pitchman for an international HYIP known as Flat Electronic Data Interchange (FEDI). FEDI’s operator, Abdul Tawala Ibn Ali Alishtari, also known as Michael Mixon, was convicted in September 2009 of financing terror and fleecing investors in the FEDI scheme.

    In addition to the ASD account funded by the E-Bullion transfer, Seabaugh had at least two other ASD accounts, prosecutors charged in the forfeiture complaint. She used one of her accounts to advertise a mysterious business known as StreamlineGold, which was described by investigators as a probable “pyramid scheme dealing with the sale of memberships that are sold to customers.”

    The account through which Seabaugh promoted StreamlineGold was funded by a transfer from La Fuente Dinero, yet-another Ponzi scheme associated with ASD, prosecutors said.

    StreamlineGold’s website now throws an error message, but web records show it was promoted on the MoneyMakerGroup and TalkGold forums, two websites that are associated with Ponzi schemes and referenced in federal court records as a place from which the alleged Pathway To Prosperity Ponzi scheme was promoted.

    “StreamLine Gold is literally what it says,” a poster crowed on the MoneyMakerGroup Ponzi site in November 2007, the same month Seabaugh allegedly was promoting the same scheme through ASD. “[I]t can provide you with an unlimited income through the combination of Precious Metals and Cash with a business model whose time has come PLUS the most advanced and lucrative pay plan ever devised.”

    Records suggest StreamlineGold had failed in an earlier iteration — and then failed again after rebirthing itself.

  • Another MPB Today Site Uses Walmart’s Name In Domain Name; Positions ‘Grocery’ Biz As ‘Freedom Club’ In Domain Hidden Behind Proxy; Uses Images Of Buffet, Trump And Late Sam Walton

    This pitch for MPB Today positions it as the Walmart Freedom Club. The pitch misspells the word "prosper" as "prospour." The website registration is hidden behind a proxy, and uses Walmart's name in the domain name. It is unclear if Walmart authorized the domain name or the use of its intellectual property in the MPB Today promo.

    Yet-another domain linked to the purported MPB Today “grocery” program is using Walmart’s name in its domain name. The domain name is registered behind a proxy and uses images of Warren Buffet, Donald Trump and Sam Walton to position the opportunity as a “Freedom Club.”

    Sam Walton is the late founder of Walmart. It is unclear if the owners of the website have Walmart’s permission to use its name and the likeness of Sam Walton in a pitch for the MPB Today program. Also unclear is whether the website owners have the permission of Trump and Buffet to use their images in promos for MPB Today.

    Separately, yet another pitch for MPB Today features a narrator who notes that food is necessary to stay “alive” and laments, “I wish we could sell air too.” The “air” video is on a restricted YouTube site maked as “unlisted.” An unlisted video “means that only people who know the link to the video can view it (such as friends or family to whom you send the link,” according to YouTube.

    MPB Today is a multilevel-marketing (MLM) program based in Pensacola, Fla. The “opportunity” is tied to a grocery business in Pensacola known as Southeastern Delivery. Both companies are linked to Gary Calhoun, who has a poor track record with the Better Business Bureau and was the recipient of a warning letter from the Food and Drug Administration for his marketing of a product that purported to be a treatment for Lou Gehrig’s disease, Herpes and Alzheimer’s, among others.

    The new domain that uses Walmart’s name is at least the third linked to the MPB Today program — and the second to position MPB Today as a “club” tied to Walmart.  The domain was registered Sept. 9, after MPB Today itself removed images of Walmart, Buffet and Trump from the homepage of its website.

    Other MPB Today-linked websites branded with Walmart’s name imply the retail giant offers free groceries or that Walmart is partnered with MPB Today.

    Meanwhile, still-other websites linked to the MPB Today program position it as a “Grocery Assistance” program and a program linked to the Food Stamp program administered by the U.S. Department of Agriculture. MPB Today also is being pitched from known Ponzi and criminals’ forums such as ASA Monitor, TalkGold and MoneyMakerGroup.

    On Wednesday, the SEC filed an emergency action in federal court in Utah to stop a program known as Imperia Invest IBC dead in its tracks, amid allegations it had fleeced millions of dollars from thousands of Americans with hearing impairments. Like MPB Today, Imperia was promoted on the Ponzi forums.

    Among the allegations in the Imperia case were that the operators were using trademarks and the intellectual property of a major company — Visa Inc. — without the company’s authorization. All in all, more than 14,000 Imperia investors were fleeced, the SEC said.

    In this separate promo for MPB Today, a narrator notes that food is necessary to stay "alive" and laments that he wishes members also could sell "air" through the MPB Today MLM program.

  • BULLETIN: SEC Gains Asset Freeze, Seeks Shutdown Of Imperia Invest In Emergency Action; Program Pitched On Same Ponzi Forums Promoting MPB Today; Agency Says Imperia Defrauded Thousands Of Deaf Americans

    BULLETIN UPDATED 5:02 P.M. EDT (U.S.A.): The SEC has gone to federal court in Utah to halt the operations of Imperia Invest IBC, alleging a spectacular fraud that fleeced money from thousands of Americans with hearing impairments.

    Imperia was promoted from the MoneyMakerGroup Ponzi forum — one of the Ponzi forums promoting the MPB Today “grocery” MLM. Imperia also was the topic of discussion and defenses on TalkGold and ASAMonitor, two other forums that are pitching MPB Today.

    The SEC’s allegations against Imperia are stunning. More than 14,000 investors were defrauded worldwide, the agency said.

    Among the victims were thousands of deaf investors in the United States, the SEC said.

    Imperia gathered relatively small sums from thousands of people, the SEC charged, noting that “no evidence has been found that any of the investors have received a single payment.”

    “Imperia Invest IBC is a web-based entity that claimed, until late 2009, to be located in the Bahamas,” the SEC charged. “The Bahamian address listed by Imperia is fictitious. Imperia now claims to be located in Vanuatu. However, Imperia is not registered to do business in Vanuatu and the address listed on its website appears also to be fictitious. Neither Imperia nor its securities are registered with the Securities and Exchange Commission. Imperia is not licensed or registered with the Commission, with any state, or with any Self Regulatory Organization.”

    Categorically absurd representations of earnings and the program’s potential were made to investors, the SEC said.

    “Investors were promised eye-popping amounts of money in return for a simple $50 or $100 investment, and Imperia has made numerous excuses on its website about why these returns haven’t been paid,” said Ken Israel, director of the SEC’s Salt Lake Regional office.

    “The Imperia website shows an example of such earnings in which a $50 investment will return $134,000 to the investor in six months,” the SEC charged. At the same time, the agency said some investors were told that spectacular sums were due them for doing business with Imperia.

    “Imperia represented to one investor who invested $150.00 with Imperia that Imperia owed him $36,610,755.20 within a two year time frame,” the SEC charged. “Another individual’s account statement who invested $500 in July 2007 showed he is owed $43,907,652.20 as of May 2010.”

    It was not immediately clear how so many deaf investors became involved in Imperia. A federal judge has approved an asset freeze.

    Imperia called its product Traded Endowment Policies (TEP), which the SEC described as “the British term for viatical settlements.”

    “A TEP or viatical settlement involves the sale of an insurance policy by the policy owner before the policy matures, and policies are sold at a discount from face value in an amount greater than the current cash surrender value,” the SEC said.

    “There are at least 14,000 [Imperia] investors worldwide with a total investment exceeding $7 million,” the SEC said. “In the United States, there appear to be approximately 6,000 investors, most of whom belong the hearing impaired community, who have invested in excess of $4 million with Imperia.”

    Imperia used offshore payment processors such as “Liberty Reserve, located in Costa Rica; Perfect Money, located in Panama; and Procurrex, located in the British Virgin Islands,” the SEC charged. “Once Imperia received funds from Investors, it appears that Imperia then transferred amounts from these accounts to foreign bank accounts, including but not limited to accounts located in Cyprus and New Zealand.”

    Even as Imperia was ripping off investors, it also was infringing trademarks and the intellectual property of Visa, the credit-card service, the SEC charged..

    “Imperia also requires that investors purchase a Visa debit card to access their investment proceeds,” the SEC said. “Imperia charges customers a fee to purchase the Visa debit card ranging from $145 to $450.

    “Visa has not authorized Imperia to use its name or trademarks and has sent Imperia a cease-and-desist letter to halt its unauthorized use of the Visa name and logo,” the SEC said. “There is no evidence that any investor who has ordered a Visa debit card from Imperia has actually received such a card.”

    One poster on the MoneyMakerGroup forum advised prospects that he would keep an “open mind” about Imperia, according to web records.

    “Anyway, in the final analysis each person must make their own decision,” the poster said in 2007.

    While the MoneyMakerGroup poster was holding forth about keeping an “open mind,” Imperia was cloaking itself to siphon millions of dollars, according to web records and court records.

    “Imperia took proactive steps to conceal the identity of its control persons by using an anonymous browser to host its website, by communicating with all investors via email without disclosing the identity of any control persons and by establishing off-shore Paypal-style bank accounts to conceal the recipient of the investment proceeds,” the SEC charged.

    In July, the Financial Industry Regulatory Authority issued a warning about HYIP schemes pitched online. In May, the U.S. Postal Inspection Service accused an HYIP known as Pathway To Prosperity of defrauding more than 40,000 people in a scheme that took in about $70 million.

    Pathway To Prosperity also was promoted on the Ponzi and criminals’ forums. ASAMonitor, TalkGold and MoneyMakerGroup are specifically referenced in court filings in the Pathway to Prosperity case.

    MoneyMakerGroup is specifically referenced in court documents in the alleged Legisi HYIP and Ponzi scheme, a fraud that allegedly gathered more than $70 million.

    Read the SEC complaint against Imperia.