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Tag: Tim McQueen

  • BULLETIN:’3 Hebrew Boys’ Sentenced To Prison Terms Totaling 84 Years; Case Has Bizarre Elements In Common With AdSurfDaily Litigation

    In a case that features elements remarkably similar to the AdSurfDaily litigation, a federal judge in South Carolina has sentenced three defendants in the “3 Hebrew Boys” fraud case to a combined total of 84 years in prison.

    Joseph Brunson, Tim McQueen and Tony Pough were jailed immediately after their convictions a year ago in an $82 million, foreign-currency fraud and Ponzi scheme case that traded on religion. The men, who called their business a debt-relief ministry, accused former U.S. Attorney Walt Wilkens of “treason” last year and of committing acts of war against them.

    The sentencing occurred today, with U.S. District Judge Margaret Seymour giving Pough 30 years and Brunson and McQueen 27 years each. The office of U.S. Attorney William N. Nettles of the District of South Carolina did not immediately return a call from the PP Blog for comment. The Associated Press first reported on the lengths of the sentences tonight, noting that the terms were “so harsh in part because the judge found they tried to obstruct justice at every turn.”

    Brunson, McQueen and Pough became known as “3 Hebrew Boys” after operating a website with the same name, which is based on a biblical story of believers who escaped a furnace by relying on their faith. The Ponzi scheme operated under the name Capital Consortium Group LLC.

    In 2007, the men filed a court document that described their investment program as an effort to free people from government “bondage” and referred to the investigation as “Satan’s handiwork.”

    A year later, in 2008, AdSurfDaily President Andy Bowdoin described the case against his purported Florida “advertising” firm as the work of “Satan,” comparing it to the 9/11 terrorist attacks.

    Bowdoin, 76, was indicted earlier this month on Ponzi scheme charges.

    The 3 Hebrew Boys’ operation sought to chill law enforcement, regulators and members of the media from scrutinizing operations, prosecutors said.

    In an approach similar to one used by the AdViewGlobal (AVG) autosurf, members were forced to agree to a confidentially clause that purportedly prohibited them from discussing the company outside the confines of meeting places. Participants were threatened with a $1 million penalty for sharing information.

    A court-appointed receiver published documents that listed an astonishing array of luxury purchases made by the 3 Hebrew Boys schemers with investors’ money. Among the items were a Gulf Stream jet, a Prevost Motorcoach and automobiles with famous names such as Mercedes, Lexus, BMW, Saab, Cadillac and Lincoln.

    In the “3 Hebrew Boys” case, Brunson filed documents that appear to have asserted immunity from prosecution on the grounds of purported sovereignty. The documents appear to have been designed to force Wilkens, then the U.S. Attorney, to default on a contact to which he never had agreed. The approach sometimes is referred to as “paper terrorism” or “mailbox arbitration.”

    A similar approach has been used by litigants in the ASD case.

    Screen shot: Joseph Brunson declared last year that then-U.S. Attorney Walt Wilkens was guilty of treason, insurrection and conspiracy to overthow the U.S. government in his efforts to prosecute Brunson.

    Brunson wrote in a court filing he described as a “Bill of Peace” that Wilkens had a duty to appear before a notary public and acknowledge Brunson’s assertion of sovereignty in “red ink.” The document demanded that Wilkens use his “Christian name” in his response to Brunson.

    A refusal by Wilkens to carry out the demands within three days, Brunson said, would result in a contractual agreement that Wilkens was “an enemy of One and the [U]nited States of America and the people, Constitution, and Government thereof.”

    Read Joseph Brunson’s purported “writ” in the “3 Hebrew Boys” case.

  • PONZI NEWS/UPDATES: Fire Destroys ‘3 Hebrew Boys’ Ponzi Headquarters; Minnesota Man Gets Nearly 10 Years In Prison In Ponzi Case; California Man Gets 25

    Sign of the apocalypse? The headquarters of the “3 Hebrew Boys” Ponzi scheme in Columbia, S.C., was gutted in a fire Monday and Tuesday. Firefighters spent 19 hours over two days battling the blaze, but the “building and all contents . . . were completely destroyed,” according to Beattie B. Ashmore.

    Ashmore is the court-appointed receiver in the case. Proof-of-claim forms for victims of the $80 million Ponzi swindle became available April 15, only 11 days before the fire broke out. The cause of the fire is under investigation, and the building was an asset of the receivership estate.

    “All computers and documents have been stored off-site since the Receiver took possession of the building in October 2007,” Ashmore said. “The building was being managed by a reputable property management company, fully insured and continuously monitored by a security company. The Receiver will make a claim immediately with the Hartford Insurance Company for the full value of the building with the insurance proceeds going to the benefit of the victims.”

    The 3 Hebrew Boys case is one of the strangest in the United States, drawing comparisons to the alleged AdSurfDaily Ponzi scheme owing to elements of affinity fraud and antigovernment rhetoric.

    Joseph Brunson, Tim McQueen and Tony Pough were convicted in November of swindling tens of millions of dollars in a bogus debt-relief “ministry.” The purported aim of the program was to free people from government “bondage,” and the investigation was referred to as “Satan’s handiwork.”

    In the earliest days of the 3 Hebrew Boys case, more than 100 people protested on behalf of the scheme at a rally in Columbia, saying the government did not understand the program, had overreached in its prosecutorial efforts, refused to deny it was wrong and had chosen to move forward with the case in a bid to save face.

    In an approach similar to one used by the AdViewGlobal (AVG) autosurf, members were forced to agree to a confidentially clause that purportedly prohibited them from discussing the company outside the confines of meeting places. Participants were threatened with a $1 million penalty for sharing information.

    AVG, which has close ties to ASD, morphed into a “private association” in February 2009. Members were scolded for sharing information and calling the autosurf an “investment” program. As the company appeared to be collapsing in May and June, members were threatened with copyright-infringement lawsuits for sharing information published by the firm.

    Brunson, McQueen and Pough are jailed awaiting sentencing. After they were found guilty of 174 counts mail fraud, money-laundering and transporting stolen goods, the men filed documents accusing former U.S. Attorney Walt Wilkins of treason and committing acts of war by prosecuting them.

    The men became known as “3 Hebrew Boys” after operating a website with the same name, which is based on a biblical story of believers who escaped a furnace by relying on their faith. The Ponzi scheme operated under the name Capital Consortium Group LLC.

    Minnesota Ponzi Sentencing

    A Ponzi scheme operator in Rosemount, Minn., has been sentenced to 117 months in prison and ordered to pay $21.8 million in restitution to victims.

    Charles “Chuck” E. Hays, 56, has been detained since his arrest in February 2009. He pleaded guilty last year to one count of mail fraud, one count of wire fraud and one count of structuring transactions to avoid financial reporting requirements.

    Among the items seized in the case was a $3 million yacht acquired with investors’ money. Hays operated a firm known as Crossfire Trading LLC and bilked investors out of more than $20 million by operating a Ponzi scheme.

    “Hays told potential investors he was a day trader in stock index futures and other futures contracts,” federal prosecutors said.

    Investors plowed money into the scheme based on lies told by Hays, and he “admitted he diverted and converted those funds for his personal use and other unauthorized purposes,” prosecutors said.

    The sentencing judge in the case was U.S. District Judge Donovan Frank.

    California Ponzi Sentencing

    Milton Retana, 46, of Huntington Park, was sentenced to 25 years in prison for a $62 million Ponzi scheme that bilked mostly Spanish-speaking investors out of at least $33 million.

    The case became known as the “Best Diamond case.” Retana operated a purported real-estate investment company known as Best Diamond Funding. It was yet another instance another in which the name of a precious metal or mineral was used in a Ponzi scheme.

    Evidence of the fraud was hidden in the back of a religious bookstore operated by Retana’s wife, prosecutors said. When investigators searched the bookstore, they found millions of dollars in cash. Best Diamond was located next door to the bookstore.

    The scheme — like many other Ponzi schemes — featured an appeal to religion, prosecutors said.

    “Best Diamond Funding solicited money through advertisements in Spanish-language magazines, on the Internet, and during weekly investment seminars at locations across Los Angeles. The raucous investment seminars often had as many as 300 potential investors and incorporated religious messages,” prosecutors said.

    “Retana guaranteed returns as high as 84 percent each year, claiming that he would purchase properties in bulk at below-market prices and immediately sell them for a profit,” prosecutors said. “However, records obtained by federal investigators showed that Retana used only a tiny fraction of the victims’ money to purchase real estate and that his company was actually losing money.”

    The sentencing judge in the case was U.S. District Judge R. Gary Klausner.

  • ASD ALL OVER AGAIN? ‘3 Hebrew Boys’ Accuse U.S. Attorney Of ‘Treason’; Claim Draws Another Parallel To AdSurfDaily

    Three men found guilty in South Carolina last week of operating an $82 million Ponzi scheme accused a federal prosecutor of treason on the same day the jury returned its verdict, the FBI said.

    A treason claim also was made in the federal forfeiture proceeding against assets tied to Florida-based AdSurfDaily, an alleged Ponzi scheme involving $100 million.

    U.S. District Judge Margaret B. Seymour cited the treason claim in the “3 Hebrew Boys” case as a reason to send Joseph Brunson, Tim McQueen and Tony Pough to jail immediately to await sentencing.

    “After the jury’s verdict, Judge Seymour was asked to allow the men to remain free on bond until their sentencing,” the FBI said.  “She denied the request after noting that all three men filed documents [Friday] accusing U.S. Attorney Walt Wilkins of treason and committing acts of war by prosecuting them.”

    Brunson, McQueen and Pough became known as “3 Hebrew Boys” after operating a website with the same name, which is based on a biblical story of believers who escaped a furnace by relying on their faith. The Ponzi scheme operated under the name Capital Consortium Group LLC.

    Wilkens said the scheme targeted people of faith and members of the military.

    U.S. Attorney W. Walter Wilkins
    U.S. Attorney W. Walter Wilkins

    “By calling themselves the Three Hebrew Boys, these con men tried to disguise their Ponzi scheme as a religious, charitable program of debt elimination in order to gain the trust of unsuspecting investors,” Wilkins said. “Unfortunately many people were victimized by these men, including many in our armed forces.”

    In the ASD case, the treason claim was made against U.S. District Judge Rosemary Collyer. ASD is known to have members who identify with the so-called sovereignty movement.

    California resident Curtis Richmond, a pro se litigant in the ASD case, identified himself in court documents in a separate case as a “sovereign” being who enjoyed diplomatic immunity from prosecution and answered only to Jesus Christ.

    Richmond is associated with a Utah “Indian” tribe ruled a “complete sham” last year by U.S. District Judge Stephen Friot. On the eve of a civil RICO trial last year, Richmond attempted to have Friot removed from the case by claiming he owed Richmond $30 million.

    Friot refused to step down in Utah, as did Collyer in the District of Columbia. Richmond accused Collyer earlier this year of operating a “Kangaroo Court” and violating her judicial oath. Collyer is presiding over the ASD civil-forfeiture case. Other filings in the ASD case suggested Collyer was guilty of as many as 60 felonies, and that an effort had been made by at least one ASD member to start a process to collect $120 million from Collyer, two federal prosecutors and a court clerk for “Interference With Commerce.”

    Screen shot: Section of a pro se filing in the ASD case.
    Screen shot: Section of a pro se filing in the ASD case.

    Such bizarre claims have been popping up more and more in litigation involving securities.

    Gold Quest International (GQI), a company accused by the SEC last year of operating a Ponzi scheme from Las Vegas, claimed it was part of a North Dakota Indian tribe and was immune from U.S. law.

    After the SEC brought the charges against GQI in May 2008, Michael Howard Reed, the purported “attorney general” of the tribe, tried to sue the SEC for $1.7 trillion. The sought-after amount would have exceeded the total of federal income tax paid by individual U.S. filers last year by about $575 billion.

    U.S. District Judge Kent J. Dawson struck a series of pleadings by Reed from the record.

    Meanwhile, Dawson jailed John Jenkins, one of the defendants implicated in the Ponzi scheme, for contempt. Dawson also dispatched the U.S. Marshals Service to arrest David Greene, also known as “Lord David Greene,” in part for violating orders to repatriate money offshore to the United States.

    Despite Richmond’s behavior, he was labeled a hero on the Pro-ASD Surf’s Up forum. Over the weekend, Surf’s Up reinforced an earlier announcement that it would not permit discussion about the AdViewGlobal (AVG) autosurf.

    “[P]lease don’t expect any information that concerns AVGA,” a forum Mod said Saturday. “[I]t doesn’t belong on this forum.”

    Another Mod reinforced the ban on AVG discussion today.

    “In the beginning days of AVG we made it clear this is not an AVG forum and it still will not be,” the Mod said.

    Surf’s Up members repeatedly have said they wanted to discuss AVG, which has close connections to ASD. Their requests have been consistently rebuffed. Some of the Surf’s Up Mods were among the founding members of the AVG surf, which came to life after a major court ruling went against ASD last year.

    AVG purported to be a “private association” that operated offshore. Members used the “offshore” angle as a key selling point, saying the surf’s purported country of operation — Uruguay — insulated it from prosecution.

    Like the “3 Hebrew Boys” operation, AVG sought to prevent members from discussing the company outside the confines of areas it controlled. AVG members were scolded for sharing information and calling the autosurf an “investment” program.

    As AVG was in failure mode in May and June, members were threatened with copyright-infringement lawsuits. Critics were told AVG would contact their ISPs to file abuse reports and suspend service.

  • ‘3 Hebrew Boys’ Guilty In $82 Million Ponzi/Affinity Fraud Scheme; Company Operated In Fashion Similar To AdViewGlobal Autosurf, Imploring Members To Maintain Secrecy

    ponzinewsIn yet another case that may cause widespread unease in the autosurf world, three men accused of defrauding participants in a bogus debt-relief “ministry” have been found guilty of 174 counts of mail fraud, money-laundering and transporting stolen goods.

    Parts of the case against “3 Hebrew Boys” were remarkably similar to events engulfing the AdSurfDaily autosurf. In 2007, for example, the defendants filed a court document that described their investment program as an effort to free people from government “bondage” and referred to the investigation as “Satan’s handiwork.”

    In 2008, AdSurfDaily President Andy Bowdoin described the case against his purported Florida “advertising” firm as the work of “Satan,” comparing it to the 9/11 terrorist attacks. Prosecutors said ASD was selling unregistered securities, while engaging in wire fraud, money laundering and operating a $100 million Ponzi scheme.

    In 2007 and 2008, prosecutors brought essentially the same charges against “3 Hebrew Boys” — Joseph Brunson, Tim McQueen and Tony Pough.

    About 100 supporters of the “3 Hebrew Boys” rallied in Columbia, S.C., in the early days of the probe, to demand that investigators leave them alone. Participants told reporters that the government did not understand the program, had overreached in its prosecutorial efforts and refused to deny it was wrong, choosing to move forward with the case in a bid to save face.

    Prosecutors said the “3 Hebrew Boys” scam was targeted at churchgoers and members of the military from South Carolina and North Carolina, and also from other states. The scam got its name from the company’s website name, which was based on a biblical tale of believers who escaped a furnace by relying on their faith.

    At least $82 million was consumed in the scheme, prosecutors said.

    The company attempted to chill law enforcement, regulators and members of the media from scrutinizing operations, prosecutors said.

    In an approach similar to one used by the AdViewGlobal (AVG) autosurf,  members were forced to agree to a confidentially clause that purportedly prohibited them from discussing the company outside the confines of meeting places. Participants were threatened with a $1 million penalty for sharing information.

    AVG, which has close ties to ASD, morphed into a “private association” in February 2009. Members were scolded for sharing information and calling the autosurf an “investment” program. As the company appeared to be collapsing in May and June, members were threatened with copyright-infringement lawsuits. Critics were told AVG would contact their ISPs to file abuse reports and suspend service.

    Not only did the plan to force secrecy and mute criticism not work in the “3 Hebrew Boys” case, it resulted in intense scrutiny by federal prosecutors, the FBI, the IRS and other agencies. It also resulted in intense scrutiny on the state level.

    South Carolina Attorney General Henry McMaster filed civil and criminal charges, posting all the documents in the case on his website.

    A court-appointed receiver also published documents, listing an astonishing array of luxury purchases made by the schemers with investors’ money. Among the items were a Gulf Stream jet, a Prevost Motorcoach and automobiles with famous names such as Mercedes, Lexus, BMW, Saab, Cadillac and Lincoln.

    Some of the luxury items are missing, meaning they cannot be sold to compensate victims.

    Brunson, McQueen and Pough were found guilty yesterday. The jury in the case, which was heard in Columbia, S.C., returned the verdict in less than three hours, after listening to testimony for weeks.

    Separately, Lee Otis Fluker was charged with perjury and convicted in 2008 for lying about his knowledge of the scheme. He was sentenced to a year in prison.

    Brunson, McQueen and Pough face decades in prison and fines in the millions of dollars.

    Last month, Beattie B. Ashmore, the court-appointed receiver in the case, warned victims about “companies [that] claim to offer professional services for recovering losses associated with your involvement with CCG,” one of the companies associated with the “3 Hebrew Boys” scheme.

    “Please note that you are not required to respond to these letters in order to be considered for a distribution from the Receiver,” Ashmore said on the receiver’s website.  “In addition, the Receiver takes no position as to any consequential effect filing a claim and recovering funds in this case may have upon any action you have taken or may take with Fraud Recovery Group or any similar type company.

    “Therefore, it is strongly recommended that you seek professional legal and tax advice from a trusted advisor, and that you properly research any professional advice before acting upon it,” Ashmore said.