This grainy likeness of Gregory N. McKnight is taken from federal court filings in 2008.
URGENT >> BULLETIN >> MOVING:Gregory N. McKnight, the operator of the Legisi HYIP Ponzi scheme, has pleaded guilty to wire fraud in federal court in the Eastern District of Michigan, the SEC said this afternoon.
McKnight was charged criminally on Feb. 14 — Valentine’s Day. His guilty plea followed two days later, the SEC said. He faces a maximum sentence of 20 years in federal prison. The SEC charged him civilly in May 2008.
Legisi, which gathered more than $72 million and fleeced more than 3,000 investors in the United States and several other countries, was popularized in part on Ponzi cesspits such as TalkGold and MoneyMakerGroup.
MoneyMakerGroup is specifically referenced in U.S. court files in the Legisi case.
Legisi’s Terms of Service resemble those of JSS Tripler/JustBeenPaid, a purported “opportunity” currently being flogged on the Ponzi boards even as CONSOB, the Italian securities regulator, has opened a probe into the actions of JSS Tripler/JustBeenPaid promoters.
Promos by Legisi triggered an undercover operation by the U.S. Secret Service and state regulators in Michigan.
In addition to the prospect of jail time, McKnight is on the receiving end of a civil judgment and penalties totaling about $6.5 million, the SEC said.
Legisi members, according to the Terms, had to affirm they were not an “informant, nor associated with any informant” of the IRS, FBI, CIA and the SEC, among others, according to documents filed in federal court.
The others included “Her Majesty’s Police,” the Intelligence Services of Great Britain, the Serious Fraud Office and Interpol.
JSS Tripler/JustBeenPaid makes members affirm they are “not an employee or official of any government agency.” In addition, it makes them affirm they are not “acting on behalf of or collecting information for or on behalf of any government agency” and not “an employee, by contract or otherwise, of any media or research company.”
One of Legisi’s payment “programs” advertised a return of .25 (one-quarter) percent per day, according to court filings.
JSS Tripler/JustBeenPaid promotes a return of 2 percent a day — eight times higher than Legisi.
A sentencing date for McKnight will be determined later, the SEC said.
U.S. District Judge Mark A. Goldsmith presided over McKnight’s guilty plea, the SEC said.
Frederick Mann is the purported operator of JSS Tripler/JustBeenPaid.
“You can only load money from your Alertpay account onto it. So, now I can start using AP in other programs & have an easy way to get my money to spend, by loading funds from my AP account onto the card. Then I can use the card like a regular debit card in stores, online & even withdraw the money off of the card via an ATM machine.” — MoneyMakerGroup post by JSS Tripler/JustBeenPaid promoter, Feb. 16, 2012
There’s none so blind as those who will not see.
Only a little more than eight months ago — on June 3, 2011 — the U.S. Secret Service advised a federal judge in Maryland that HYIP schemes spread in part through coordinated posts on “discussion boards.” One of the boards referenced in a Secret Service affidavit aimed at seizing tens of millions of dollars in “criminal proceeds” linked to HYIP hucksters and other scammers was TalkGold.
Yes, that TalkGold, the Ponzi cesspit, the same TalkGold to which promoters of JSS Tripler/JustBeenPaid race to fire up “I got paid” posts to help sustain a scam that advertises an annualized return of 730 percent on top of two-tier downline commissions totaling 15 percent — more, if members choose to “compound” their “earnings” by leaving them in the system.
JSSTripler/JustBeenPaid promoters are doing this on the Ponzi forums even after CONSOB, the Italian securities regulator, announced a JSS Tripler-related action late last month and certain promoters’ websites in the United States suddenly have gone missing this month. Frederick Mann is the purported operator of the scheme.
It was not the first time TalkGold’s name had been referenced as a place from which massive fraud schemes were promoted. The board was referenced in 2010 filings by the U.S. Postal Inspection Service in the Pathway to Prosperity (P2) case. So was MoneyMakerGroup, another Ponzi and fraud cesspit. P2P operator Nicholas Smirnow was charged criminally, and investigators described P2P as an HYIP scheme that had spread to at least 120 countries and created as many as 40,000 victims. The alleged P2P haul: about $70 million.
Courtroom references by the Secret Service to TalkGold in the context of fraud schemes date back at least to 2007.
Here is how the Secret Service affidavit from June 2011 described the activities that occur on TalkGold and elsewhere. (Italics added):
“Most of the individual posts to the boards are from those who invest in the pyramid schemes and those who operate and promote the illegal investment scams.”
Based on the Secret Service affidavit and voluminous evidence culled in the aftermath of the 2007 E-Gold investigation that had led to 2008 guilty pleas on charges related to unlicensed money-transmitting and money-laundering, the judge authorized the seizure of tens of millions of dollars from the E-Gold accounts of alleged scammers who’d set up shop through E-Gold to fleece the masses.
On June 20, 2011, U.S. District Judge Ellen L. Hollander ordered the money “arrested.” The forfeiture is pending, and the final sum seized is unclear. But the website of a court-appointed claims administrator includes this notation. (Emphasis added): “Approximately $90 million has been seized and/or restrained from the sale of e-metal held in accounts at E-Gold.”
These things are exceptionally noteworthy in the context of the forfeiture case:
E-Gold is assisting investigators in ridding itself of corrupt proceeds warehoused as a result of the money-laundering allegations in 2007. It has cooperated with prosecutors in identifying accounts linked to HYIP scammers and other hucksters.
The Secret Service agent who filed the affidavit is the same agent who led the 2008 AdSurfDaily Ponzi scheme investigation, which resulted in the forfeiture of at least $80 million and criminal charges against ASD operator Andy Bowdoin.
Even though the agent allegedly has been targeted with false liens by so-called “sovereign citizens” for his work in the ASD Ponzi case, he continues to serve in a capacity that is vital to the security of the United States. He has conducted numerous investigations involving money-laundering and other crimes. These cases, according to court filings, have resulted in the seizure of more than $300 million in “criminally derived proceeds.” That is more than a quarter of a billion dollars. The agent and his colleagues have worked with a Task Force whose members reverse-engineer fantastically complex financial crimes.
The court-appointed administrator handing the claims process is the same company that handled a similar process in the ASD Ponzi case.
E-Gold has done the right thing in cooperating with investigators.
Coming Soon To An ATM Near You
Any person who spends so little as five minutes on the Ponzi boards knows that Canada-based AlertPay is conducting business with serial promoters of outrageous frauds — frauds that have grave consequences to individual pocketbooks and frauds that have grave ramifications to national and international security.
And now, according to posts that originate on forums referenced in multiple U.S. court filings about massive international fraud schemes, AlertPay is sending debit cards to the scammers.
“Thanks Mann & Co.,” the excited poster announcing her coup on MoneyMakerGroup said, adding five smilies to accent her glee after her earlier reference to ATMs and stores that now could be used to offload profits from a scheme that advertises a return of 2 percent a day.
In an earlier post, the MoneyMakerGroup member said she received the AlertPay debit card in her mailbox in North Carolina.
“Now I’m able 2 get my money out FAST!!!!!!!!!!!!” she roared.
Below her post was a link to a “program” known as “Expert Invest Group” that purports to pay “up to 20000% After 30 days.” The company says its accepts AlertPay, Perfect Money and “Liberty Reserver (sic).”
A (Brief) Pictorial Study In Contrasts
1.
MoneyMakerGroup post from Feb. 16 by promoter of JSSTripler/JustBeenPaid. The post highlights the utilty of AlertPay debit cards in joining other "programs" and offloading profits at ATMs and retail outlets.
2.
From Paragraph 55 of a U.S. Secret Service affidavit filed in U.S. District Court in Maryland on June 3, 2011.
On Feb. 4, the PP Blog reported that a JSS Tripler-related website listed in an action by CONSOB, the Italian securities regulator, was based in the United States and had been programmed to redirect to the Netherlands several days after CONSOB announced the action.
That domain — JSS-Tripler.com — now is throwing a server error and no longer is redirecting the traffic to Europe. The site generates an “Unable to connect” message in the Firefox browser and an “Unknown error: 1214” message when pinged, meaning the server is in a black hole.
The circumstances under which the server went dark are unclear. It is not known, for instance, if law enforcement, the hosting company or the JSS Tripler affiliate — purportedly a woman — caused the domain to stop working. Its registration is valid until Feb. 24, according to records.
Earlier this week, the site was directing to a JustBeenPaid subdomain styled “marketing.” JustBeenPaid and Frederick Mann are the purported operators of JSS Tripler, which advertises a return of 2 percent a day. The return computes to an annualized return of 730 percent.
Despite the CONSOB action, cheerleading for JustBeenPaid/JSS Tripler continue on the Ponzi cesspits such as TalkGold and MoneyMakerGroup.
Just BeenPaid/JSS Tripler makes members affirm they are “not an employee or official of any government agency.” In addition, it makes them affirm they are not “acting on behalf of or collecting information for or on behalf of any government agency” and not “an employee, by contract or otherwise, of any media or research company.”
The Terms alone appear to be an invitation to join an international financial conspiracy. Regardless, the Ponzi-forum cheerleading continues.
JustBeenPaid has traded on the names of American icons Warren Buffett, Oprah Winfrey, Benjamin Franklin, Mark Zuckerberg — and even the name of fictional spaceman “Mr. Spock” from the Star Trek series on American television.
Frederick Mann was a cheerleader for the alleged AdSurfDaily Ponzi scheme in 2008, according to promos. ASD was based in Florida.
In May 2008, Mann asserted that “[p]ast performance indicates a strong probablility (sic) that ASD will continue to perform as advertised,” according to a promo.
Two months later, the U.S. Secret Service seized tens of millions of dollars from bank accounts linked to ASD President Andy Bowdoin and others.
Some ASD figures are known to have ties to so-called “sovereign citizens” — and any number of ASD members have invested in crackpot legal theories such as all commerce is lawful as long as parties agree to a contract.
Such bizarre constructions would legalize slavery, securities fraud, tax fraud, Ponzi schemes and narcotics-trafficking, among other pursuits.
And because some “sovereign citizens” believe they can divine a contract out of thin air and demand a litigation result from judges, prosecutors, investigators and creditors, bizarre courtroom clashes have been occurring across the United States.
Prior to its killing, this post yesterday by Ponzi-forum huckster "strosdegoz" showed a DNS propagation map for JSS Tripler 2 (T2) when a link in the post was clicked. The page that loaded showed that T2 was accessible via wire in the United States. The post vanished without explanation in less than an hour.
“strosdegoz,” the serial Ponzi-board pitchman who claims to have a presence on at least 35 forums or websites that promote “programs” that advertise preposterous returns, has killed a MoneyMakerGroup post he created that showed JSS Tripler 2 (T2) is accessible via wire in the United States.
The original post, which appears to have been created because some T2 members were complaining they could not access the T2 site, was replaced with a single word: “Edit.” A note below the substituted one-word post explained it had been “edited by strosdegoz.”
Prior to its killing, the post had included a link to this DNS tracking service. When that link was clicked, it showed that the JSSTripler2 domain is accessible in the United States. It also showed T2 is accessible in Italy. (More on the potential importance of T2’s reach into Italy below.)
“strosdegoz” did not explain his decision to kill his post and the link. Nor did he say whether he was properly registered to sell securities to U.S. or Italian citizens. Nor did he say whether T2 was properly registered to do so.
T2 was known to be accessible in the United States even before “strosdegoz” killed the link that showed multiple points of contact on U.S. soil from the East Coast and the West Coast and places in between. Still, the DNS map provided a compelling visual of how scammers from all parts of the world can reach into the United States (and other countries) and recruit the unknowing into the murkiest of investment enterprises.
T2, which preemptively denies it is a Ponzi scheme despite advertising returns that dwarf the return rates of Bernard Madoff, purports to pay a return of 2 percent a day, a figure that computes to an annualized return of 730 percent. The “opportunity” claimed for weeks that it had suspended member cashouts, blaming the development on an AlertPay account freeze.
AlertPay is a processor based in Canada.
But T2 now says is has regained access to the frozen funds, a development that led to a flood of “I got paid” posts on MoneyMakerGroup, which is listed in U.S. federal court filings as a place from which Ponzi schemes are promoted.
After having posted the DNS tracking link and later deleting it, “strosdegoz” — also known as “manolo” — virtually simultaneously posted an “I got paid” post for T2 at MoneyMakerGroup.
“I got paid today already,” the post read. “Fast as usual.”
Only days earlier, T2 purportedly was paying no one. Its explanation of an AlertPay freeze was a virtual concession that the enterprise was insolvent and could not pull from other resources to meet its obligations. “Opportunities” such as T2 pretend liabilities do not exist or conceal insolvency by treating liabilities as assets. Any significant interruption of cash flow can create a crisis that potentially affects thousands or even tens of thousands of participants.
Both the edited DNS post and the “I got paid” post below it had a time stamp of 7:11 p.m. (The original DNS post had a time stamp of 6:21 p.m; the edit occurred at 7:11 p.m., according to the time stamp, and the follow-up “I got paid” post also was time-stamped at 7:11 p.m.)
T2 Reaches Into Italy As Promoters Of Namesake ‘Opportunity’ JSS Tripler Are Under The Lens
T2 purportedly created its name by appropriating the name of JSS Tripler, another “program” that advertises a return of 2 percent a day. JSS Tripler promoters have come under the lens of CONSOB, the Italian securities regulator.
Like T2, JSS Tripler is accessible in the United States — with no corresponding evidence that the program itself as well as its promoters have any registrations as issuers of securities or broker-dealers.
JSS Tripler promoters have pooh-poohed the CONSOB action, preferring instead to flood the Ponzi forums with “I got paid” posts.
Compellingly, the DNS link “strosdegoz” posted at MoneyMakerGroup yesterday for T2 — JSS Tripler’s purported namesake — showed that T2 is accessible in Rome, the capital of Italy. CONSOB is headquartered in Rome.
Club Asteria, another Ponzi-forum darling, came under the CONSOB lens last year — even as “strosdegoz” was leading Club Asteria cheers. The Club Asteria “program,” which traded on the name of the World Bank, first slashed weekly payouts and then eliminated them — amid reports of a PayPal freeze.
Some Club Asteria cheerleaders claimed the “program” provided a “passive” return of up to 10 percent a week. “Ken Russo,” one of “strosdegoz’” fellow cheerleaders on the Ponzi forums, posted purported Club Asteria payment proofs totaling in the thousands of dollars.
Even as accused AdSurfDaily Ponzi schemer Andy Bowdoin was pimping a murky “program” known as “OneX” while awaiting his September 2012 criminal trial that potentially could land him in prison for 125 years if found guilty on all counts, “strosdegoz” also emerged as a OneX pitchman.
Among other things, Bowdoin is accused of selling unregistered securities to U.S. residents. He also is accused of using wires that run through the United States to sell prospects into the massive ASD scam, along with securities fraud.
As “strosdegoz” was hawking T2 and OneX by wire, he turned his attention to a “program” called “HugeYield.”
T2 purportedly is operated by “Dave,” now said to be venturing to Cambodia after previously venturing from England to Thailand during the purported AlertPay freeze. “Dave” posts on MoneyMakerGroup as Peakr8.
JSS Tripler, meanwhile, is purported to be in the stable of “JustBeenPaid,” a “program” purportedly operated by onetime ASD promoter Frederick Mann.
Like its Ponzi-forum cousin Legisi — which became the subject of an undercover operation by U.S. law enforcement that resulted in fraud charges — JSS Tripler makes members affirm they are not government spies or media lackeys.
On Jan. 23, CONSOB, the Italian securities regulator, made public an action against promoters of JSS Tripler, a “program” that advertises an annualized return of 730 percent. The claim alone would be enough to make Bernard Madoff or Charles Ponzi himself blush.
Or projectile-vomit.
But if the CONSOB action were not trouble enough, one of the JSS Tripler-related domains listed in the agency’s action is hosted in Utah, according to domain records. The domain, which forms its root with a hyphen splitting the proper name of JSS Tripler — i.e., JSS-Tripler.com — continued to serve pages from Utah for several days after CONSOB’s Jan. 23 announcement. The domain, for instance, published daily updates on the number of days JSS Tripler itself purportedly had been in action.
Among the graphics on the Utah-hosted landing page was an image of a JSS Tripler pitchwoman who appeared to be Asian in descent. Assuming the woman actually exists, her nationality remains a mystery. At a time uncertain between Feb. 2 and Feb. 3, however, the site stopped serving content and instead began to redirect to a JustBeenPaid subdomain styled “marketing” that is hosted in the Netherlands.
Whether a U.S. resident or citizen of another country who reached across international borders applied the redirection is unclear. What is clear is that the United States could join Italy in exercising jurisdiction over JSS Tripler and its promoters if it chose to do so. The site also is accessible through individual U.S. states, meaning regulators at the state level also could exercise jurisdiction.
JustBeenPaid and Frederick Mann, a murky figure who once claimed to be an ASD promoter, are the purported operators of JSS Tripler. The Netherlands subdomain shows an image of a man at the top of the page. That man is described on the site as “Louis Paquette, JBP Affiliate Sales & Marketing Director.”
The redirection, which occurs in Utah, according to server data, is virtually immediate — meaning that the previous content and photo of the woman of Asian descent no longer load and that the traffic is switched to the Netherlands page that shows the purported image of Paquette.
Among other things, this development raises questions about who caused the Utah server to redirect to the Netherlands domain and precisely why the change was made on the heels of the CONSOB action. Whether JustBeenPaid or JSS Tripler themselves had control over the Utah domain is unknown.
At a minimum, though, the presence of the Utah domain may be evidence that JustBeenPaid/JSS Tripler not only sold unregistered securities to U.S. citizens, but did so from inside the United States with a U.S. promoter or a promoter from another country with access to the Utah server at the helm. And because the redirect to the JustBeenPaid subdomain in the Netherlands occurs from inside the United States, it exposes a JustBeenPaid/JSS Tripler lie that the “opportunity” protects itself and promoters from investigation and/or prosecution.
Even if the redirection were not occurring in the United States, the CONSOB action destroys the myth that the “opportunity” is outside the reach of law enforcement. So does the simple fact that any regulator in the world could take action against the “opportunity” and its promoters. Indeed, the cross-border nature of the scheme puts investors in virtually all jurisdictions at risk. Individual promoters could be targeted for investigation/prosecution in multiple jurisdictions — and if actions such as those begin to occur, the access of Just BeenPaid/JSS Tripler to cash sources could dry up.
A claim by a MoneyMakerGroup Ponzi-forum promoter that Just BeenPaid/JSS Tripler has paid out more than $10 million to investors may demonstrate the vast reach of the “opportunity” and its ability to tap funding sources while siphoning undisclosed sums for itself. Just BeenPaid/JSS Tripler may be no Madoff, but $10 million still is a massive sum, one that should raise eyebrows in the worldwide law-enforcement community.
Content accessible from the Netherlands-based JustBeenPaid subdomain — marketing.justbeenpaid.com — raises other troubling concerns. This statement (next paragraph) appears at the bottom of a “login” page in the JustBeenPaid root domain. The statement is accessible through the “marketing” subdomain. (Indent/italics added):
Secure Offshore Servers — Our servers are in a strategic location. We pay special attention to security. Our servers are organized so upgrading and expansion are very easy.
Offshore Business — Our business operations are geographically decentralized. We don’t have any central office. We’re not located in any “unfriendly political jurisdictions.”
As a practical matter, the mere fact the page is accessible through a redirect that occurs in the United States may destroy any claims that JustBeenPaid/JSS Tripler protects members against “unfriendly political jurisdictions.” Any transaction that occurred or occurs through the Utah domain necessarily involves wires in the United States.
Regardless of the domain or email address through which business is conducted, any U.S.-based promoter of JustBeenPaid/JSS Tripler is using wires inside the United States, a situation that brings wire fraud into play — in addition to the securities issues.
A more troubling question, perhaps, is why JustBeenPaid/JSS Tripler even would have the need to make such a claim if its international business is above-board. The same enterprise also claims to have a U.S. patent, a specious claim in the context of securities because the U.S. Patent and Trademark Office does not regulate the securities markets of the United States or any other country.
Is JustBeenPaid/JSS Tripler The BCCI Of The HYIP World?
In the early 1990s, a corrupt international banking enterprise known as Bank of Credit and Commerce International created a worldwide financial scandal. The bank perhaps was best known by its acronym — BCCI — and purportedly was designed to be “offshore everywhere.”
JustBeenPaid/JSS Tripler is making the same sorts of claims associated with BCCI, a spectacularly bright red flag if ever there was one.
But if that bright red flag were not enough, other content accessible through the “marketing” subdomain of JustBeenPaid sends signals that positively glow of danger. Indeed, a “Member Agreement” link accessible through the site includes this language. (Indent/italics added):
6. I affirm that I am not an employee or official of any government agency, nor am I acting on behalf of or collecting information for or on behalf of any government agency.
7. I affirm that I am not an employee, by contract or otherwise, of any media or research company, and I am not reading any of the JBP pages in order to collect information for someone else.
Any political jurisdiction in any part of the world easily could construe those words as an invitation extended by JustBeenPaid/JSS Tripler to investors to join an international conspiracy engaging in organized crime and mass-marketing fraud.
Even more land mines emerge when one considers that JustBeenPaid/JSS Tripler is being promoted on Ponzi boards such as MoneyMakerGroup and TalkGold, both of which are referenced in U.S. federal court files as places from which Ponzi schemes are promoted.
Veteran forum and social-network hucksters are promoting JustBeenPaid/JSS Tripler, including promoters linked to the AdSurfDaily Ponzi scheme case in the United States and CONSOB’s earlier action involving Club Asteria, another Ponzi forum darling.
Depending upon how the universe lines up, JustBeenPaid/JSS Tripler could find itself starving for cash in very short order. It is a program that is thumbing its nose at law enforcement across the globe — and its willfully blind promoters could find themselves named in individual actions just about anywhere.
It is the very definition of an international financial conspiracy of the most dangerous sort, a sort of emerging BCCI of the HYIP world.
BEFORE
This is the top of the page at the JSS-Tripler.com domain as it existed on Jan. 30, 2012.
AFTER
This is the top of the "marketing" subdomain of JustBeenPaid.com as it exists today. Prospects who visit the Utah-based JSS-Tripler domain referenced in the "BEFORE" screen shot above now are redirected to the Netherlands-based "marketing" subdomain of JustBeenPaid. The switch occurs in Utah, according to server data.
“I dont care what the CONSOB or whatever says because I am not an Italian.” — TalkGold poster known as “WallStreetIsAPonzi,” Jan. 28, 2012
Even as CONSOB, the Italian securities regulator, is publishing an announcement on its website that promoters of a bizarre HYIP known as JSS Tripler are under investigation amid preposterous claims that investors receive an annualized return of 730 percent, promoters on Ponzi forums such as MoneyMakerGroup and TalkGold are thumbing their noses at the news.
JSS Tripler is an arm of “program” known as “JustBeenPaid” (JBP). Whether JBP plans to assist any of the companies or individuals identified in the CONSOB announcement in navigating the regulatory waters and preparing a defense in the weeks ahead is unclear.
What is clear is that some JBP promoters are reacting to the news by posting fresh “I got paid” posts on the Ponzi boards, even as JBP continues to use its website to advertise returns of “2%+ per Day” and “60% per Month!”
Visitors are advised they can “Increase Earnings with Daily Compounding” and glean affiliate “bonuses” totaling 15 percent over two tiers — on top of the annualized returns of 730 percent.
In the AdSurfDaily Ponzi case in 2008, U.S. District Judge Rosemary Collyer described “a confluence [of ASD] payment schemes” very similar to the payment schemes purportedly in place at JBP. JBP, though, is advertising a return rate double that of ASD, whose operator, Andy Bowdoin, later was arrested on charges of wire fraud, securities fraud and selling unregistered securities.
Bowdoin faces up to 125 years in federal prison and fines in the millions of dollars, if convicted on all counts.
In her 2008 ruling in the ASD case in which she refused to release money seized by the U.S. Secret Service as part of an international Ponzi probe, Collyer noted that ASD called its payouts to members “rebates.”
Separately, documents from Canadian investigators show that the word “rebates” was used in international scams, including Flat Electronic Data Interchange (FEDI) and the mysterious “Alpha Project.” At least one FEDI promoter is jailed in the United States, as is FEDI operator Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon,” who was convicted on charges of operating an investment-fraud scheme and financing terror.
At MoneyMakerGroup yesterday — on the heels of the CONSOB news — a poster published seven purportedly recent payment proofs from JSS Tripler. Each of them used the word “rebate,” demonstrating that the purported opportunity also is using the same language as ASD and FEDI to describe payouts to members.
The MoneyMakerGroup member said he planned to buy a “motor home” and “start traveling the US” with his JSS Tripler money.
In the AdSurfDaily Ponzi case, several automobiles were seized as the alleged proceeds of a criminal scheme. A boat and marine equipment also were seized, along with computers and real estate valued at more than $1 million. All in all, the cash seizures to date in the ASD case total more than $80 million, including cash seized from individual promoters in at least four U.S. states.
U.S. federal prosecutors say that ASD in part tried to mask its $110 million Ponzi scheme by calling its payments to members "rebates." JSS Tripler, an arm of a "program" known as "JustBeenPaid," also refers to its payouts to members as a "rebate," according to this post yesterday at the MoneyMakerGroup Ponzi forum.
Although Frederick Mann, the purported operator of JBP/JSS Tripler, is described by supporters as a business genius and creator of a “masterpiece,” the program is using the same sort of language and bizarre presentations that drew the attention of law enforcement in the ASD and FEDI cases.
Elsewhere on MoneyMakerGroup, a member described the CONSOB development as “NONSENSE!”
Another member observed yesterday that JBP payouts came from an email address on a domain styled BigBooster.com. Why the payouts are associated with the BigBooster domain is unclear, but the BigBooster domain previously has been linked to the alleged ASD Ponzi scheme and Frederick Mann, the purported operator of JBP/JSS Tripler.
Separately, the TalkGold forum deleted a link to a PP Blog report on the CONSOB action. In the ASD case, a forum known as “Surf’s Up” routinely deleted links to the PP Blog. ASD members who relied on the Blog for information were described on the forum as troublemakers, and posters willing to consider the government’s point of view were described as “rats,” “maggots” and “cockroaches.”
ASD figure and purported “sovereign citizen” Kenneth Wayne Leaming was arrested by the FBI in November 2011 on charges of filing bogus liens against at least five public officials involved in the ASD case, including a federal judge, three federal prosecutors and an active-duty agent of the U.S. Secret Service who did some of the early legwork in the case.
The Secret Service employed undercover operatives in bringing the ASD prosecution.
One MoneyMakerGroup poster yesterday suggested that the CONSOB action was “crap” and claimed outright that JSS Tripler had “paid out over 10 million bucks.”
Whether the poster ever had seen the verified, audited books of JBP/JSS Tripler and other financial records such as bank and payment-processor statements to substantiate his claim is unclear. But even if the $10 million claim is true, the claimed sum was not broken down by recipient — and online scams are infamous for siphoning cash and concentrating it in the pockets of program sponsors and insiders.
Promoters of fraud schemes often pass along company lies and deceptions to recruits and prospects, a situation that U.S. government agencies, including the Secret Service, the SEC and the CFTC, have noted in prosecutions involving individual, commission-based promoters.
The same MoneyMakerGroup promoter also ventured the CONSOB action came because “governments are not getting a cut of this revenue,” further asserting that “the only reason they are starting to do probes and crap (sic) not because they care about protecting you from loosing (sic) your money.”
ASD members made similar claims. Like JBP/JSS Tripler, ASD also was promoted on the Ponzi boards — as were at least three purported ASD clones, all of which have ceased to operate. The cost to investors is unknown.
Like ASD, JSS Tripler also appears to have a clone — one that actually uses JSS Tripler’s name to form its own name. That “program,” known as JSS Triper 2 or T2, appears now to be changing its name to T2MoneyKlub. Regardless of the name, T2 also was hawked on the Ponzi boards and appears even to have given birth to itself on a Ponzi board as a result of a dispute with JBP/JSS Tripler.
Federal prosecutors said ASD also changed its name, morphing from just plain AdSurfDaily into ASD Cash Generator. Court records suggest that changing names was part of ASD’s criminal plan and that the change occurred after the initial ASD Ponzi collapsed and after certain payment conduits began to come under government scrutiny.
Among the MoneyMakerGroup posters who published “I got paid” posts for JBP/JSS Tripler yesterday was “10BucksUp” — his second such post since the CONSOB action became public.
“10BuckUp” previously pushed Club Asteria, anotherPonzi-forum darling that came under CONSOB scrutiny. In addition to displaying no apparent respect for CONSOB, “10BucksUp” let it be known in September 2011 that he also was a pitchman for Cherry Shares, a collapsed program referenced in June by Canadian regulators.
Cherry Shares also was a Ponzi-forum darling.
Whether “10BucksUp” and other JBP/JSS Tripler promoters planned to tell their existing recruits and prospects about the fact CONSOB is targeting individual promoters in a 90-day suspension order related to the purported JBP/JSS Tripler program is unclear.
Also unclear is whether JBP/JSS Tripler will inform existing participants and prospects about the CONSOB action.
Members of any “opportunity” that purports to pay an absurd return always are at great risk. The risk becomes even greater if they are denied information about investigations. Promoters who do not disclose the presence of an investigation or simply rely on the company line (or lack thereof) potentially are at greater risk of prosecution as individual promoters.
In the ASD case, for instance, federal prosecutors said the company was collecting money from new members and funneling it to original members affected by ASD’s first collapsed Ponzi — without informing new enlistees and prospects that their money was being used to prop up losers from the initial scheme and to help the second Ponzi gain a head of steam.
The personal assets of a number of individual ASD promoters were targeted in forfeiture actions or affidavits, with the government seizing sums in several bank accounts in multiple U.S. states. These sums totaled in the hundreds of thousands of dollars, according to court records.
URGENT >> BULLETIN >> MOVING: Your time soon may be up if you’re flogging the absurd HYIP known as JSS Tripler.
CONSOB, the Italian securities regulator, has opened a probe into the activities of multiple promoters amid concerns the purported “program” is being offered to Italian citizens unlawfully as a security. JSS Tripler is an arm of “JustBeenPaid,” a Ponzi-forum darling that has been serving up a heavy dose of the bizarre for months.
The agency has issued a 90-day suspension order.
Details of the CONSOB probe and the precise number of investigative targets were not immediately clear to the PP Blog, owing to the lack of a quality Italian-to-English translation. But the websites of multiple entities or individuals who appear to be JSS Tripler affiliates are referenced by CONSOB in a 90-day order dated Jan. 20 and made public Jan. 23.
JSS Tripler’s name also is referenced in the order.
If a JSS Tripler-related domain cited in the translation is accurate, the domain appears to be hosted in the United States.
Among the bizarre claims associated with JSS Tripler promoters were that the company was moving to “offshore” servers and performing a restart.
Some JSS Tripler affiliates identify Frederick Mann as the honcho-in-chief. In May 2008, Mann positioned ASD as a “cash cow,” claiming he pocketed $6,000, according to records. Last year, the purported JustBeenPaid “opportunity” was trading on celebrity names such as Warren Buffett, Oprah Winfrey — and even fictional space man “Mr. Spock.”
Here is the CONSOB announcement — via an English translation by Google Translate.
Another “program” apparently named “System Explosion” also is referenced in the CONSOB suspension order. The domain for that program, which appears to be an HYIP or arbitrage program of some sort, also appears to be hosted in the United States.
Among the payment processors listed on the JSS Tripler-related domain and the System Explosion domain are AlertPay, SolidTrustPay and LibertyReserve.
An ad for JustBeenPaid appears on the SystemExplosion domain. When clicked, it appears to route to a subdomain of the JustBeenPaid domain, which beams this bizarre and vacuous message:
“JustBeenPaid! (JBP) and Its (sic) related programs are Licenced (sic) under United States Patent 6,578,010.”
The U.S. Patent and Trademark Office, however, is not the agency that regulates securities programs and purported business opportunities, even if JustBeenPaid could demonstrate that some sort of patent exists. As a practical matter, it is virtually impossible to conceive that market regulators in any country could be thwarted from opening probes based on claims that a system was patented.
If anything, such a claim in the context of programs that purport to pay a return may only intensify regulatory scrutiny. CONSOB, for instance, referenced JSS Tripler’s purported returns of 2 percent a day.
JSS Tripler is not to be confused with JSS Tripler 2 (T2), an equally bizarre “program” that appears to be a knockoff on the name of JustBeenPaid’s JSS Tripler arm. T2 also uses AlertPay.
Like JSS Tripler, T2 also was promoted on Ponzi forums such as TalkGold and MoneyMakerGroup.
Veteran Ponzi-board huckster “strosdegoz,” also known as “manolo,” now is flogging a new “program” known as “Huge Yield.” There already is an unconfirmed report that HugeYield has suffered a DDoS attack.
“strosdegoz” emerged last year as a regular shill for Club Asteria, the purported Virginia-based program that became a Ponzi-forum darling and later announced its PayPal account had been suspended. Claims about ClubAsteria came under investigation by CONSOB, the Italian securities regulator, and the American Red Cross later clashed with the purported “program,” which traded on the name of the relief agency.
As time moved on, “strosdegoz” later joined accused Ponzi schemer Andy Bowdoin of AdSurfDaily in flogging a mysterious “program” known as “OneX.” There is a report today that Bowdoin either canceled or postponed his latest OneX pitch because a fellow pitchman identified as “Alan” has “pneumonia and is not able to do anything right now.”
The pneumonia announcement was attributed to an email sent by Bowdoin, who is accused of orchestrating an international Ponzi scheme involving at least $110 million through ASD. His criminal trial is set for September 2012.
Huge Yield purports that $120 can turn into $1,000. The following HugeYield claims are verbatim:
“A Traditional SPICED UP follow your sponsor 2×2 that will surprise anyone online TODAY! HugeYield has changed the way marketing a tradition 2×2 is done. We have added a safety net to ensure that all members progress through the program and make their ultimate goal, The $1000.00 Payout!”
In the website’s FAQs section, a question about what payment processors HugeYield accepts is answered in this verbatim fashion:
“We accepts payments and pays all commissions through Alertpay,liberty reserve and solid trust pay,perfect Money and Okpay.”
Whether “”strosdegoz/manolo” is concerned about HugeYield’s apparent lack of grammar and usage skills is unclear.
“strosdegoz/manolo” is pitching HugeYield on MoneyMakerGroup and TalkGold. In addition to ClubAsteria and OneX, he has pitched Centurion Wealth Circle and “The Tornado.”
Both MoneyMakerGroup and TalkGold are identified in federal court filings as places from which international Ponzi schemes are promoted.
EDITOR’S NOTE: The U.S. Court of Appeals for the Sixth Circuit yesterday rejected the bid of convicted Tennessee fraudster and Ponzi schemer Dennis Bolze to have his 27-year prison sentence reduced. Although Bolze did not operate the sort of HYIP typically promoted on Ponzi boards such as TalkGold and MoneyMakerGroup, he advanced some of the arguments/rationalizations that often appear on the forums.
A three-judge appeals panel from the 6th Circuit yesterday reduced those arguments to ruin . . .
Dennis Bolze’s Ponzi scheme operated for more than six years, gathered $21 million, created more than 100 victims in the United States and Europe and caused millions of dollars in losses.
Bolze, 63, was sentenced in 2010 to 327 months in federal prison — in other words, more than 27 years. If he survives the lengthy term, he’ll be nearly 90 years old when released.
U.S. District Judge Thomas A. Varlan of the Eastern District of Tennessee sentenced Bolze, applying a “a two-level vulnerable victim enhancement.”
Here is why Ponzi purveyors and their forum pimps need to pay attention: They may be recruiting senior citizens and other vulnerable populations into their schemes. In doing so, they risk significant sentencing enhancements if indicted and convicted. This may be particularly true in cases of Internet fraud in which purveyors and their pimps cast exceptionally wide nets.
Following the advisory guidelines, Varlan could have sentenced Bolze under the facts of the case to as little as 252 months, according to the 6th Circuit. But the judge chose the upper term of 327 months — in effect, six-plus more years — because vulnerable victims were ensnared in the scheme.
Bolze claimed his enhanced sentence was “substantively unreasonable.” The appeals court disagreed, siding with Varlan.
“We conclude that the vulnerable victim enhancement was properly applied and that the sentence at the top of the advisory guideline range was substantively reasonable,” the 6th Circuit ruled.
And the three-judge panel pointed out that “a person who is a victim of the offense of conviction qualifies as a ‘vulnerable victim’ if that person ‘is unusually vulnerable due to age, physical or mental condition, or . . . is otherwise particularly susceptible to the criminal conduct.’”
It often is the case on the Ponzi boards that purveyors and pimps of fraud schemes argue that disclaimers such as “do not invest more than you can afford to lose” insulate them from prosecution.
Bolze used a similar argument for a sentencing reduction, asserting that his victims invested only “discretionary money.”
He further argued that age alone was not sufficient to justify the enhancement “and that the present poor financial condition of his victims is not relevant to whether they were unusually vulnerable at the time they invested their money with him,” according to the 6th Circuit.
Meanwhile, Bolze “denied that he forced anyone to invest” and claimed “that he did not know” certain investors “because his associate dealt with them.”
The panel rejected each of those arguments. It also rejected a contention by Bolze that only victims who appeared in court at his sentencing proceeding and offered testimony under oath could be counted against him for the purposes of sentencing.
Varlan was within his discretion when he considered victim-impact statements to fashion a sentence for Bolze, the panel ruled. (Emphasis added).
“A sentencing court is not limited to consideration of sworn testimony,” the panel ruled, adding that “The Crime Victims’ Rights Act gave the district court express authority to consider victim impact statements.”
If Ponzi purveyors and their forum pimps still find themselves committed to robbing people on the Internet, other parts of the appeals-panel ruling could give them pause.
“Additionally” the panel ruled, “we will not disturb the district court’s choice to believe the victims’ statements over Bolze’s testimony.
“Many victims reported that Bolze convinced them to invest by assuring them that their money would be safe, contrary to Bolze’s assertion that his investors were ‘simply willing to take on more risky investments,” the panel continued. “And many victims did not invest ‘discretionary money’ as Bolze claimed, but funds ‘they intended to use for their basic needs and to provide them with an income on which to live in their retirement.”
But the news gets even worse for the committed felons on the Ponzi boards, perhaps particularly the hucksters-in-chief who are deliberately targeting seniors and retirees and may have individuals in their organizations doing the same thing. A Bolze claim that he “didn’t know” vulnerable populations were being targeted was summarily rejected by the panel. (Emphasis added.)
“Furthermore,” the panel ruled, “the preponderance of the evidence supports the district court’s determination that Bolze knew or should have known that victims of his offense were unusually vulnerable to his fraudulent scheme. The district court found that Bolze knew ‘several of the victims were in or about to enter retirement,’ that Bolze ‘had personal dealings with the victims, going so far as to bring them to his home,’ and that Bolze expressly told investors that ‘the investment strategies he was advocating were ideal for people of their situation[.]’”
If you’re a Ponzi board huckster — and if you’re recruiting downlines through presentations in your home, other homes or through webinars and conference calls — the ruling by the 6th Circuit provides compelling reasons why you should stop.
Now.
This is perhaps particularly true if you’re involved in a scheme that has gained a head of steam and you’re telling recruits that all is OK because the authorities would have moved by now if anything was amiss. Such tortured constructions frequently appear on the Ponzi forums.
Importantly, Bolze’s scheme lasted for more than six years. The longer a scheme lasts, the higher the odds that that senior citizens and other vulnerable populations will become investors — a situation that sets the stage for a sentencing enhancement.
In rejecting Bolze’s arguments, the 6th Circuit pointed to the experience of “H.H.,” a 76-year old widow living in the Mediterranean region of Europe who’d met with Bolze personally and was the subject of an invitation to his home.
“When the Ponzi scheme collapsed, H.H. lost her investment,” the appeals panel recounted. “Among other adverse impacts, she could no longer afford private health insurance . . . She is now forced ‘to live on a very small state pension of approximately $175 per week’ and spend the equity in her home on basic necessities.”
If none of this so far has given pause to the Ponzi purveyors and their forum pimps, perhaps a line buried in the appeals-panel ruling will emerge as a difference-maker for some. (Emphasis added.)
“The [sentencing] enhancement applies if the Government proves that one victim of the Ponzi scheme was unusually vulnerable.”
That’s a low bar indeed, considering that the Ponzi purveyors and their forum pimps reach into all corners of the world on the Internet. Their reach alone, coupled with their practiced, serialized disingenuousness, puts them at great risk of recruiting a person such as “H.H.” into their fraud scheme — and persons such as “H.H.” have great sway with judges.
Still planning that personal pitch or webinar or mass email? Still telling folks not to invest more than they can afford to lose and claiming you never forced anyone to invest? Still turning a blind eye to what you knew or should have known.
If so, the 6th Circuit just told you it isn’t going to work and that a sentencing enhancement might be in your future, as it was for Dennis Bolze, a purported day-trader who briefly went on the lam after the Bernard Madoff Ponzi scheme was exposed.
Online huckster “Ken Russo,” also known as “DRdave,” appears once again to have backed an HYIP fraud scheme and recruited a downline into a Ponzi morass. This one is known as JSS Tripler 2 — T2 for shorthand — and the backstory is just plain bizarre.
Several cross-border crimes punishable by jail time already may have occurred, and there are reports that T2 somehow was operating through an AlertPay account that was not owned by T2 or T2’s purported operator, another person known as “Dave.”
Like virtually all HYIP schemes, details are fuzzy and ambiguous. But “Dave” apparently was operating T2 through an AlertPay account owned by “Chris,” and the Canada-based payment processor — according to Ponzi board posts — has frozen the account.
“Dave,” meanwhile, asserted that the account contained $200,000 and that “Chris” will “be in police custody by the end of the day,” according to Ponzi-board posts.
Although the “police” assertion appears to have been made earlier this month, there appears to be no corresponding information about what police agency “Dave” called to have “Chris” taken into custody. Nor has “Dave” explained why police should consider “Chris” a criminal at the exclusion of “Dave,” whose T2 program claims to pay members a return of 2 percent a day plus referral commissions.
The purported daily payout rate is double that claimed by AdSurfDaily, which the U.S. Secret Service said more than three years ago was operating a massive international Ponzi scheme on the Internet. Like T2, ASD also offered referral commissions on top of absurd daily returns.
Such a “confluence” of payment schemes and an apparent lack of outside revenue are markers of a pure or virtually pure Ponzi scheme — even though criminals on the Ponzi forums turn a blind eye to the fundamental mathematical reality and the virtual certainly that members are being paid from the funds of other members.
It is unclear if anything about T2 is real.
What is clear is that ASD President Andy Bowdoin was indicted on charges of wire fraud, securities fraud and selling unregistered securities in December 2010. He faces up to 125 years in federal prison if convicted on all counts, a fact virtually ignored by T2 promoters. ASD also was promoted on Ponzi boards such as MoneyMakerGroup and TalkGold.
At the same time T2’s “Dave” was claiming to have alerted police about “Chris,” “Dave” appears not to have explained what he intended to do if “Chris” called police on him.
Also apparently absent from the police claim is any sort of real-world explanation of how it apparently came to be that “Dave” had come to believe it somehow was appropriate for a program “admin” such as himself to run a scheme through a third-party’s AlertPay account, not an account in the name of T2.
“Dave” appears also to have asserted he had the power to exact “a lifetime ban from internet access” against “Chris” while further asserting that he somehow could authorize AlertPay to pay T2 members with money in the frozen account held by “Chris.”
Ponzi-forum posts from October assert T2’s server was located in Thailand, with “Dave” being “from the UK.” It appears now, however, that the server is in the United States. “I Got Paid” posts on the Ponzi boards suggest payments have come from a Gmail address that uses the name of “Chris” in its makeup, not an email address from the JSSTripler2 domain.
Such mechanics also were in place for JustBeenPaid and JSSTripler (see link below), “programs” that appear to have used multiple domains and addresses in multiple jurisdictions to funnel payouts to participants.
For his part, “Ken Russo” — who earlier introduced members to the Club Asteria disaster and any number of fraud schemes — is describing T2 members who are demanding real-world answers as individuals who should be “deleted.”
“The relatively few members who are demonstrating impatience along with their demand for a refund should be taken care of and deleted from the program and this forum,” “Ken Russo” ventured, according to RealScam.com, an antifraud site that concentrates on mass-marketing fraud. “Their continued presence here will only create more anxiety and frustration.”
T2 was almost impossibly bizarre from the moment it came out of the gate. The “program” apparently believed it prudent to adopt the name of an existing program in the fraud stable of JustBeenPaid: JSS Tripler. Ponzi-board supporters of the emerging T2 “program” asserted that, since JSS Tripler apparently had not trademarked its name, that using the name as the calling card of a new “program” was perfectly acceptable.
Why any legitimate entity would want to adopt the name of an obvious fraud scheme such as JSS Tripler was left to the imagination — as are so many things in the foundationally corrupt worlds of HYIPs.
In any event, “Dave” now claims that he’s traveling to Thailand to try to right the T2 ship because he was having trouble concentrating from his undisclosed earlier location, according to Ponzi forum posts. Some T2 cheerleaders appear to be urging T2 members not to file disputes with AlertPay, a common occurrence when HYIP Ponzi schemes begin to tank.
T2 apparently also has licensed itself to ban members and seize money (or the representations of money) in their accounts for speaking ill of the purported “program.”
“You can run, but you can’t hide. International cooperation in the pursuit of fugitives is essential as we combat complex financial crimes. Mr. Medcalf is the latest in a long list of fugitives who have been brought back to the United States to face justice. My office is grateful to the authorities in Panama for their assistance in this matter.” — Benjamin B. Wagner, U.S. Attorney for the Eastern District of California, Jan. 3, 2012
Joseph Randall Medcalf has become the latest person to rip to shreds a myth commonly advanced on Ponzi scheme and criminals’ forums such as TalkGold and MoneyMakerGroup that “offshore equals safe.”
Medcalf, 55, resided in Clovis, Calif., before fleeing the United States in 2008 after his $3.2 million investment scheme collapsed and he declared bankruptcy, federal prosecutors said. Medcalf was indicted in March 2011, by a federal grand jury in Fresno.
Prosecutors now say he was “arrested late last week in Panama,” which deported him.
Medcalf was transported to Atlanta on New Year’s Eve and is expected to be returned to California to face the charges.
The FBI is handing the criminal probe, and the “Office of International Affairs in the Justice Department’s Criminal Division assisted in the coordination of Medcalf’s deportation to the United States,” prosecutors said.
Medcalf presided over companies known as All Valley Holdings LLC and CenCal Value Investments, prosecutors said.
He “did not invest the clients’ money as promised but used it for his own personal expenses and enjoyment,” prosecutors said.
