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Tag: ToPacific Inc.

  • REMINDER: Claims-Filing Deadline In WCM777 Ponzi- And Pyramid Case Is Nov. 9

    wcm777Take note: Victims of the WCM777 MLM “program” must file a claim by Monday, Nov. 9, a little more than three weeks from today.

    The website of WCM777 receiver Krista L. Freitag now includes a countdown timer to the filing deadline. At the time of this post, only 23 days remain to file claims.

    This is the URL of the receiver’s site: http://www.worldcapitalmarketreceivership.com/

    This is the URL of the site to file claims: https://www.wcm777claimsprocessing.com/en/Home/Filing

    Among the defendant companies, affiliated entities or receivership entities are World Capital Market, Inc.; WCM777, Inc.; WCM777 Ltd (d/b/a WCM777 Enterprises, Inc.); Kingdom Capital Market, LLC; Manna Holding Group, LLC; Manna Source International, Inc.; WCM Resources, Inc.; To Pacific, Inc.; and ToPacific, Inc.

    See the PP Blog’s Tag archives on story references to WCM777 here.

     

  • BULLETIN: CLAIM: Former CIA Operative Was Paid More Than $400,000 By Companies Linked To WCM Ponzi Scheme

    breakingnews72UPDATED 9:44 P.M. EDT MARCH 14 U.S.A. How strange were things in the universe of WCM777, an MLM “program” accused by the SEC last year of pulling off an $80 million, cross-border Ponzi swindle?

    Would you believe that a former CIA operative with two felony convictions ended up on the payroll?

    Robert Sensi, the former operative, received $403,000 from companies linked to WCM777, according to an amended lawsuit filed against Sensi in U.S. District Court for the Central District of California.

    WCM777 was operated by Ming Xu of Temple City, Calif. A forensic accounting has determined that the WCM777 entities used 77 domestic bank accounts and 23 foreign ones, according to filings by court-appointed receiver Krista L. Freitag.

    Sensi was paid six times through ToPacific Inc. and one time through World Capital Market Inc. between Jan 30 and March 25, 2014, according to court filings.

    Alleged paymnets to Robert Sensi from WCM777-related firms. Source: Screen shot from federal court filing.
    Alleged payments to Robert Sensi from WCM777-related firms. Source: Screen shot from federal court filing.

    Freitag is suing Sensi for return of the money.  She initially sued him for the return of $385,000 (excluding interest and costs) in November 2014, alleging that he claimed he “used to work” for the CIA and was hired by WCM777-related companies to address complaints about the program by authorities in Peru, Taiwan and Dubai.  She further alleged that Sensi was “well aware” that various WCM777-related business were engaged in a Ponzi scheme.

    Sensi responded to the November complaint on Feb. 9. He did not expressly deny Freitag’s claim that he had claimed to have worked for the CIA, but he did deny the allegations he’d been hired by the Xu entities to address the concerns about WCM777 in Peru, Taiwan and Dubai. He further denied he had knowledge of a Ponzi scheme.

    In his answer, Sensi admitted “services were rendered pertaining to Peru, Taiwan, and Dubai.”  But he did not describe the services. On March 12, Freitag filed an amended complaint, asserting in the filing that Sensi had received $403,000 from the WCM777 entities, not the $385,000 specified in the original complaint.

    Court records or published reports from the past two decades show that Sensi has been sentenced to prison twice — once for stealing millions of dollars from Kuwait Airways, a second time for a “Nigerian letters” scam in which a German businessman was swindled.

    Larry J. Kolb, an author and former CIA agent, has written extensively about Sensi, his ties to the CIA and further ties to Republican politicians and Republican political causes, including fundraising.

    Chapter 1 of “America at Night,” a 2007 book by Kolb, is available for free on Kolb’s website. The chapter references a meeting Kolb had in California with attorney “Vince Messina”  in May 2004.

    A snippet (italics added):

    Vince was late for lunch, and I wish he’d never shown up. But, then again, all indications are if Vince hadn’t sucked me back into the secret world, somebody else would’ve. So I don’t hold it against him. Vince Messina. Washington tax and immigration attorney, international dealmaker, bon vivant. Based on what I know of his background, he has to be as old as the hills. But somehow he doesn’t seem it. Bald on top, short dark hair on the sides, olive skin, smiles a lot, constantly on the move. Vince is on the up and up, but spends much of his time in strange lands working for mysterious clients.

    During the lunch meeting, Messina asked Kolb if he knew Sensi, a somewhat startling question, Kolb wrote.

    After Kolb answered yes, Messina called his nephew, Gary Messina, a U.S. Department of Homeland Security official, to enable Gary to listen in, Kolb wrote.

    Ten years later, in May 2014, Vincent Messina would become a relief defendant in the WCM777 Ponzi case. The SEC alleged that Messina was WCM’s asserted “general counsel” and had come into possession of $5 million from the fraud scheme.

    More than $941,000 of the $5 million went to International Market Ventures (IMV), a company operated by Gary Messina, according to court filings.

    U.S. District Judge John F. Walter declared the $5 million that flowed to Vincent Messina “ill gotten” and ordered it disgorged. IMV was held jointly liable with Vincent Messina for disgorgement of $941,505 of the $5 million sum.

     

     

  • BULLETIN: Judge Freezes Property Owned By Mother Of WCM777 Ponzi Figure Ming Xu

    breakingnews72BULLETIN: A federal judge has frozen real estate in California owned by the mother of accused WCM777 MLM Ponzi schemer Ming Xu.

    U.S. District Judge John F. Walter of the Central District of California took the action today after court-appointed receiver Krista. L. Freitag alleged Friday that the $730,000 used to purchase the San Gabriel property in March had passed through accounts linked to both Xu and his sister Sue Wang.

    The buyer of the property, Xiaomei Deng, is the mother of Xu and Wang, Freitag said in court filings.

    Wang is associated with an entity known as MaNa Fashion, Freitag alleged last month. She further alleged that Xu, who did not initially disclose that Wang was his sister, effectively had transferred $1 million to her in February through an entity known as ToPacific Inc. Wang likewise did not initially disclose that Xu was her brother.

    Freitag now has discovered that Deng is the mother of Xu and Wang, Freitag alleged.

    MaNa initially tried to wire the $730,000 on March 13 to purchase the property, but the wire was rejected, according to Frietag. One day later, on March 14, MaNa “initiated a wire in the same amount of $730,000 from MaNa Fashion’s account to Deng’s personal checking account at East West Bank . . . ” Freitag alleged.

    “On the same day the $730,000 was wired to Deng, Deng transferred $700,000 of those funds” to an escrow company. She later transferred additional sums to complete the purchase of the property, Freitag alleged.

    Tens and tens of thousands of MLMers appear to have joined the Ming Xu WCM777 scam, which the SEC described in March as a “worldwide”  Ponzi- and pyramid scheme that had gathered tens of millions of dollars by posing as a “cloud” services business.

    The WCM777 tale has been marked by a series of bizarre events, including a declaration of love to the people of Peru that was written on the letterhead of a suspended California company linked to Xu.

  • BULLETIN: WCM777 Receiver Puts End To ‘New Multi-Level Marketing Scheme Which Was Being Developed’ In California Warehouse And ‘Involved Numerous Of The Same Defendants And Personnel’; Receiver Also Seeks Freeze Of Attorney’s Bank Accounts — Plus, A Ponzi Fish Story

    breakingnews72BULLETIN: (UPDATED 11:38 P.M. EDT U.S.A.) The court-appointed receiver in the WCM777 Ponzi- and pyramid case says in court filings that she has stopped a “new multi-level marketing scheme” that had been under development by WCM777 in a warehouse in El Monte, Calif.

    WCM777, alleged by the SEC to have gathered about $65 million, purportedly was in the “cloud” computing business and may have more than 479,000 “member accounts.”

    Receiver Krista L. Freitag says in a report that she has identified more than “100 domain names” associated with the alleged WCM777 fraudsters.

    Meanwhile, Freitag says she is seeking an order to freeze the bank accounts of an attorney linked to accused WCM777 Ponzi schemer Phil Ming Xu.

    The lawyer, according to the receiver, purportedly is “the beneficiary of a $5 million non-recourse loan, to be repaid in 2019 in a single balloon payment” and allegedly claimed he’d lost a cashier’s check for $200,000. The purported loan allegedly came from a Xu-owned entity.

    At the same time, Freitag says her preliminary analysis suggests that Xu, who allegedly squired the purchase of two golf courses and at least six other properties for millions of dollars in cash, may have an association with at least 28 business entities. One is known as “12 Zodiacs Inc.” Another uses the words “Medical Group” when forming its name. Yet-another is described as “US Immigration Investment Assoc.” Still-another is called “WCM Art Inc.”

    Perhaps like the Zeek Rewards MLM HYIP scheme before it, WCM777 could lead to an incredible paper chase that serves up intriguing but worrisome sidebars of black comedy. Another of the entities listed in the WCM777 receiver’s report, for example,  potentially has an all-subsuming name: “Frequency Holdings Inc.”

    The El Monte MLM scheme was being developed by “numerous of the same defendants and personnel” involved in WCM777, Freitag advised a federal judge.

    U.S. District Judge Christina A. Snyder is presiding over the case. It was not immediately clear whether the alleged emerging scheme was “Global-Unity,” which once used a photograph of a golden pyramid on its website.

    What is clear is that Freitag has been plenty busy since the SEC fraud case was filed March 27. In one instance, she advised the judge, the receivership observed a “third party” removing  “furniture and art work” from a property linked to WCM777.

    “The Receiver promptly contacted the Monrovia [Calif.] police department and made a report,” Freitag advised the judge. “The Receiver has investigated the removal of art and furniture and has identified the people who removed the personal property. The Receiver has demanded the return of the art and furniture.”

    In another instance, Freitag said in the report to the judge, the receivership observed “live Koi” at a WCM777-linked property, this one in Walnut, Calif.

    “Koi” are color-splotched, trainable, domesticated carp originally bred in Japan and reportedly known to recognize the persons feeding them and to eat out of the hands of their owners, according to the Wikipedia entry for the species.

    Some websites sell Koi for thousands of dollars apiece.

    “The Receiver has taken steps to maintain these fish in the event they have value to the receivership estate,” Freitag advised the judge.

    On the money front, the receiver advised the judge that the receivership now has in its possession “$11.28 million” of WCM777-connected money that once had been in the trust account of a law firm, $1.5 million that had been in a bank account and designated to be part of a WCM777-connected real-estate acquisition and an “aggregate of approximately $2.54 million held in other accounts of the Receivership Entities or recovered from other entities.”

    Freitag also has met with Xu and his lawyers, according to the receiver’s report to the judge.

    “This interview lasted several hours, during which the Receiver primarily focused on identifying assets of the Receivership Entities that needed to be secured, as well as gaining understanding of any past or present operations that were being conducted by Receivership Entities,” Freitag advised the judge.”Among other things, these interviews yielded significant information concerning funds transferred to Vincent Messina as well as a myriad of investments, loans, and transfers that need to be addressed by the Receiver.”

    Messina is a lawyer WCM777 billed as its “In-house Legal Counsel,” according to affiliate promos.

    From the receiver’s report (italics/carriage returns added):

    During her initial investigation, the Receiver learned that, approximately one month before this case was filed, $5 million was transferred from ToPacific, Inc., an entity owned by Defendant Phil Ming Xu and whose accounts are now frozen, to the IOLTA trust account of attorney Vincent Messina.

    Mr. Messina has refused to turn over the funds and his counsel has stated that some of funds have already been disbursed, but the details of those disbursements have not been provided. The Receiver initially sought to recover the funds from Mr. Messina, which Mr. Messina refused. The Receiver then asked Mr. Messina to agree to escrow the undisbursed funds pending further order of the Court and provide an accounting of the funds he received. On April 4, 2014, Mr. Messina, the Receiver, and the Commission agreed that $2.332 million wired by Mr. Messina from various accounts he controls to the client trust account of Thompson Hine LLP, Mr. Messina’s attorneys, would be held in escrow by Thompson Hine pending further order of the Court. Mr. Messina still refuses, however, to provide any information about the remaining $2.668 million, stating only that it was disbursed for “business purposes.”

    On April 8, 2014, Maranda Fritz of Thompson Hine confirmed that $2,133,214.62 has been received by Thompson Hine and is being held pursuant to the escrow agreement. The remaining $200,000 to be held pursuant to the escrow agreement has not yet been received.

    The Receiver also learned Mr. Messina obtained a $200,000 cashier’s check from Bank of America, which he claims he lost. Mr. Messina is apparently putting in a claim with Bank of America that the funds be credited back to his account. Bank of America advises it may take as long as 91 days for such claim to be approved and the funds credited back to Mr. Messina’s account.

    Mr. Messina’s position is that the $5 million transfer is a loan pursuant to a two-line loan agreement dated February 27, 2014, in which Mr. Messina is the beneficiary of a $5 million non-recourse loan, to be repaid in 2019 in a single balloon payment. The funds were wired to Mr. Messina’s IOLTA trust account . The purported loan agreement is virtually identical to purported non-recourse, unsecured loan agreements signed by Receivership Entity Manna Holding Group, Inc., an entity owned by Mr. Xu’s wife, in connection with large transfers from World Capital Market, Inc. and Kingdom Capital Market, LLC for the purchase of real property. Declaration of [lead SEC investigator] Peter Del Greco, Dkt. No. 6, Exhibits 32 and 33. No payments are due under the purported loan agreement until January 2019.

    Moreover, Defendant Ming Xu subsequently asked for return of the “retainer” from Mr. Messina, which undermines a claim that this was a bona fide loan transaction for some legitimate purpose.

    The Receiver is filing an ex parte application concurrently with this report requesting that Mr. Messina’s bank accounts be frozen and he be directed to provide an accounting of all funds received from the Receivership Entities, including ToPacific, Inc. Such immediate relief is necessary to protect investors from further dissipation of the funds pending further investigation and a determination by the Court of the true nature of the $5 million transfer.

    Read the receiver’s report.

  • URGENT >> BULLETIN >> MOVING: SEC Takes Down WCM777; Says Purported Opportunity Is ‘Worldwide Pyramid Scheme,’ Ponzi And Offering Fraud; Federal Judge Signs Asset Freeze

    breakingnews72URGENT >> BULLETIN >> MOVING: (16th update 5:42 p.m. EDT U.S.A.) The SEC has gone to federal court in Los Angeles, alleging that the WCM777 “program” is a “worldwide” pyramid scheme, a Ponzi scheme and an offering fraud that targeted Asian and Latino communities and gathered more than $65 million.

    A federal judge has granted an asset freeze, the SEC said. The agency brought the case in an emergency complaint.

    “[Phil Ming] Xu and his entities claimed they were using investor funds to build a strong cloud services company that would then ignite other high-tech companies and ultimately make their investors very wealthy,” said Michele Wein Layne, director of the SEC’s Los Angeles Regional Office.  “In reality, they were operating a pyramid scheme that preyed on investors in particular ethnic communities, leaving them with nothing left to show for their investment.”

    Some MLM promoters have pitched WCM777 alongside the TelexFree “program.” TelexFree is not referenced in the SEC complaint. But the complaint does reference a Massachusetts probe into WCM777 last fall. TelexFree  has been under investigation by the Massachusetts Securities Division since at least February 2014.

    Charged in the SEC’s WCM777 case are WCM777 Inc. of Nevada, World Capital Market Inc. of Delaware, WCM777 Ltd.( dba as WCM777 Enterprises Inc.) of Hong Kong and Ming Xu, also known as Phil Ming Xu, of Temple City, Calif.

    Several firms are listed as relief defendants, amid allegations they received ill-gotten gains. These include Kingdom Capital Market LLC of Delaware, Manna Holding Group LLC of California, Manna Source International Inc. of California, WCM Resources Inc. of Texas, Aeon Operating Inc. of Texas and PMX Jewels Ltd. of Hong Kong.

    Even as WCM777 was under investigation by state regulators in the United States, the SEC said, the “program” raised “more than $37 million from investors which has been deposited into [the defendants’] Hong Kong bank account.”

    During the state-level probes in Massachusetts and elsewhere, “Defendants stopped depositing investor funds into their United States bank accounts, although the WCM777 offering continued,” the SEC alleged.

    Xu, the SEC charged, is “involved in all aspects of the fraud.”

    From the SEC complaint (italics/bolding/carriage returns added):

    The bulk of the investor funds have been used to pay cash for real property purchased in the United States, purchased in many cases with funds transferred through Defendant World Capital Market Inc. (“WCM”), and held in the names of Relief Defendants Manna Holding Group LLC and Kingdom Capital Market LLC, which are affiliated with Defendant Xu.

    The properties include two golf courses, a warehouse, vacant land, and several single family homes. Defendants have also used investor funds to play the stock market and to make investments, through intermediary companies, in an oil and gas offering of Relief Defendant Aeon Operating, Inc.

    Defendants have also sent investor funds to Relief Defendant PMX Jewels, Limited, which is a rough diamond jewel merchant in Hong Kong, and to Relief Defendant Manna Source International, Inc., which is affiliated with Defendant Xu.

    The golf courses were identified as Glen Ivy Golf Club in Corona, Calif., and the Links at Summerly in Lake Elsinore, Calif. To acquire Glen Ivy, WCM777 plunked down $6.5 million in cash, with the money coming from “WCM777 accounts that held investor proceeds,” the SEC charged.

    Meanwhile, the Links at Summerly was acquired for $1.65 million in cash. Again, the SEC charged, the money to acquire the course “originated from WCM777 accounts that held investor proceeds.”

    Along the pyramid and Ponzi path, the SEC charged, WCM777 bought a single-family home in Walnut, Calif., for “$2.4 million in cash,” a single-family home in Monrovia, Calif. for “$980,000 in cash,” a single-family home in Lake Elsinore, Calif., for “$500,000 in cash,” vacant land in New Cuyama, Calif., for “$700,000 in cash,” a warehouse in El Monte, Calif, for “$1,051,750 in cash” and used “$1,456,041.56” to close on the purchase of a single-family home in Monrovia, Calif.

    This Monrovia sale never closed, the SEC said.

    And “Ming Xu opened an account at a major brokerage firm in June 2013 in the name of WCM,” the SEC charged. “Between June 2013 and January 2014, Defendants deposited a total of $2.155 million into this brokerage account. The cash originated from WCM777 accounts that held investor proceeds.”

    Moreover, the SEC charged, WCM777 disbursed $200,000 in investors proceeds to ToPacific Inc., $210,000  to Agape Technology and $230,000 to Media for Christ.

    All of these entities, the SEC charged, were “associated or otherwise affiliated” with Xu.

    Media for Christ — apparently before Xu’s alleged involvement — found itself at the center of an international firestorm in 2012 over a film production known as “Innocence of Muslims.” (See PP Blog report dated Nov. 21, 2013.)

    Among the alarming allegations is that WCM777 falsely planted the seed that it had partnerships “with more than 700 major companies such as Siemens, Denny’s, and Goldman Sachs,” the SEC said.

    WCM777 also asserted a false association with Stouffer Hotels and Resorts, a company that “has not been in business since 1996 when it sold its real estate portfolio to another company, and that was then purchased by Marriott in 1997,” the SEC said. “Marriott does not have any relationship with Defendants.”

    As the PP Blog reported in October 2013, affiliates of WCM777 helped spread the claims about ties with famous businesses across the web.

    Commingling

    The WCM777 enterprises “opened and used numerous accounts located at three different banks in the United States, to move and commingle most of the investor proceeds before they were disbursed to third parties,” the SEC said.

    It is common for HYIP scams to use banks and payment processors to warehouse proceeds from fraud schemes, a practice that brings national-security concerns into play.

    HYIP schemes often also purport to offer interest-earning “packages” while using a “points” system and touting future public offerings, things allegedly in play at WCM777.

    From the SEC complaint (italics added):

    Through publicly available websites and promotional materials, Defendants offer packages or membership units in “WCM777.” Defendants portray WCM777 as a profitable multi-level marketing venture that sells packages of “cloud media” or cloud services. In the WCM777 offering, Defendants promise investors that they will earn 100% or more returns in 100 days. Defendants represent that the “points” investors receive for their investments will be convertible into equity in initial public offerings (“IPOs”) of “high tech” companies Defendants are purportedly incubating. Defendants have facilitated a “secondary market” in the points they award to investors, and Defendants estimate that $890 million of the points have traded on this market.

    But in reality, the SEC said, the WCM777 enterprises “do not realize any appreciable revenue other than from the sale of ‘packages’ of cloud services to investors. WCM777 is not profitable, and is a pyramid scheme. Defendants use some of the investor funds to make Ponzi payments of returns to investors.”

    The SEC, which says WCM777 was selling unregistered securities as investment contracts,  is seeking the appointment of a receiver, a request the judge has approved.

    Like other HYIP schemes, WCM777 preemptively denied it was a “Ponzi scheme.”

    “Is WCM777 a Ponzi Game?” WCM777 wrote on its website, before answering its own question, the SEC said.  “In summary, we are not a Ponzi game company. We are creating a new business model.”

    In reality, the SEC said, “The cash paid to investors were Ponzi payments made with funds received from other investors, and were not paid from net income or profits of the WCM777 enterprise.”

    At a 2013 business event in California, Xu was photographed alongside luminaries such as former U.S. Vice President Al Gore and Apple co-founder Steve Wozniak. It is somewhat common for Ponzi schemers to trade on the names and reputations of prominent individuals.

    Zhi Liu, another WCM777 executive identified in state-level filings, is not directly referenced in the SEC complaint. There may be an oblique reference, however.

    “On January 27, 2014, WCM777 Ltd. filed a lawsuit against a former employee in the Superior Court for the State of California, County of Los Angeles,” the SEC said.

    Liu is known as “Tiger.”

    A Twitter site under the name of “Dr. Phil Ming Xu” has a March 14 entry that claims, “Tiger created the system and took $30M worth of unauthorized ecash from WCM777. WCM777 sued him.”

    As noted above, however, the SEC has alleged that Xu was involved in all aspects of the fraud. And also as noted above, the SEC further alleged that “more than $37 million from investors” had been deposited in a Hong Kong bank account.

    Whether Liu had a role in the Hong Kong deposits is unclear. Also unclear is whether Liu remains in the United States or has relocated elsewhere.

    In its emergency filing, the SEC said the WCM777 enterprise constituted an “ongoing” fraud.

    Read the SEC’s statement and complaint.