Paul Burks, the 70-year-old operator of the Zeek Rewards Ponzi scheme, now is listed as prisoner No. 29723-058 at FMC Lexington. The facility is an administrative security federal medical center with an adjacent minimum security satellite camp in Lexington, Ky.
After being sentenced in February to more than 14 years, Burks was ordered to report to the facility no later than yesterday. He reportedly is suffering from significant medical issues.
Burks has become the third and senior-most Zeek executive sent to jail. Dawn Wright-Olivares and Daniel Olivares earlier began serving respective terms of 7.5 years and two years.
U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina was the sentencing judge in all of the cases against the Zeek braintrust.
Zeek’s operations were similar to the AdSurfDaily Ponzi scheme, which sent ASD President Andy Bowdoin to federal prison in 2012. Bowdoin, now 82, is scheduled to be released in February 2018. He is listed as a prisoner at Butner Medium FCI in Butner, N.C. The Butner prison also has a medical facility. Bowdoin, like Burks, had health issues prior to sentencing.
Like ASD, Zeek was a Ponzi-board “program.”
Troy Barnes, one of the principals of “The Achieve Community” (TAC) scam, was sentenced in April to 33 months in prison. TAC also was a Ponzi-board “program.”
Barnes’ Achieve colleague Kristi Johnson was sentenced to 21 months.
From a 2014 YouTube promo for The Achieve Community. Authorship is unclear.
Still promoting your securities scam on YouTube?
As the PP Blog reported on Oct. 3, YouTube promos for the alleged DFRF Enterprises’ Ponzi scheme were cited in two of three wire-fraud counts against accused operator Daniel Fernandes Rojo Filho. Filho, allegedly at the helm of a fraud that gathered tens of millions of dollars, has been in federal custody since his July 21 arrest in Boca Raton, Fla.
It turns out that YouTube videos also are playing a role in the criminal prosecution for wire fraud and wire-fraud conspiracy of Troy Barnes of The Achieve Community — or TAC. That prosecution was announced Nov. 3 by the office of U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.
Among other things, the indictment against Barnes alleges that “YouTube communications” played a role in duping Achieve participants and therefore constituted part of a wire-fraud conspiracy.
Barnes, 53, resided in Riverview, Mich. He is free on bond, pending trial. In addition to the conspiracy count against him, Barnes also faces three counts of wire fraud for three transactions in 2014 involving the purchase of Achieve “positions” by victims, according to the indictment.
“By the time the scheme collapsed in February 2015, the conspirators had defrauded over 10,000 investors in the Charlotte-area and worldwide, and owed victim-investors at least $51 million in purported investment returns, yet only had available approximately $2.6 million,” prosecutors said. “According to court records, over the course of the scheme, Barnes used over $140,000 of the victims’ money for his own enrichment.”
Barnes co-conspirator was Kristi Johnson, 60, who resided in Aurora, Colo., prosecutors said. She has already pleaded guilty to wire-fraud conspiracy and is scheduled for sentencing Nov. 19, before U.S. District Judge Max O. Cogburn Jr.
Achieve offered a 700 percent ROI, according to the SEC and federal prosecutors. Barnes and Johnson also face a civil action by the SEC.
In December 2014, the PP Blog reported that Achieve boosters parroting each other were circulating a YouTube promo that read, “We are not investing in a stock or buying shares in a company. We are using our God given universal right to spend our money the way we want. We choose not to sell out to the banking system for their tiny little 1% annual return.”
Said Rose’s office on Tuesday: “According to court filings, as the scheme grew in size and scope, Barnes and his conspirators concealed the true nature of the scheme through multiple misrepresentations. According to court records, when the conspirators became concerned that the use of the term ‘investment’ would draw scrutiny from regulators, they instructed victim-investors that ‘We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.’”
Scammers from AdSurfDaily in 2008 tried the same tactic. It backfired, as it later would do with Achieve and other “programs,” including Zeek Rewards.
Among other things, Achieve claimed $50 turned into $400. The U.S. Secret Service brought the Achieve criminal case and the ASD prosecution. ASD was a 1-percent-a-day “program.”
UPDATE 7:22 P.M. ET U.S.A. Scheduled for sentencing Nov. 19, Kristi Johnson today asked the court for a sentencing delay. Specifics were filed under seal. This is from a motion on the public record (italics added):
1. Pursuant to Local Rule of Criminal Procedure 55.1, Ms. Johnson respectfully requests this Court to seal the Joint Motion to Continue Sentencing because it contains sensitive information regarding a criminal investigation.
2. Public dissemination of the Joint Motion to Continue Sentencing may interfere with the administration of justice. Therefore, there is good cause for the Court to seal said motion.
Unlike the boffo web-based schemes of TelexFree, Zeek Rewards and AdSurfDaily, the “Achieve Community” scam in which participants were told they’d glean returns of 700 percent did not perform well (relatively speaking) at the MLM Pyramid/Ponzi Scheme Box Office.
What’s particularly alarming about U.S.-based Achieve is that, though small in dollar volume and victims’ count compared to its larger fraud kin, it still reached into more than 140 countries.
Federal prosecutors from the office of U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina now say Achieve created about 10,000 victims, “including more than 4,000 located outside the United States.”
The U.S. victims’ count also presented a logistical challenge — enough of one, at least, for the Justice Department to assign its “Mega Victim Case Unit” to the Achieve matter. The unit helped prosecutors contact U.S. victims.
As the PP Blog reported in July 2015, prosecutors established a web page for victims. Authorities now say “[a]pproximately 229 victims including 29 located in foreign countries have provided details of their victimization. . .”
When a federal crime is committed, prosecutors said, victims have “[t]he right to reasonable, accurate, and timely notice of any public court proceeding . . . involving the crime or of any release or escape of the accused,” and “[t]he right to be reasonably heard at any public proceeding in the district court involving release, plea, sentencing, or any parole proceeding.”
When a case with a large number of victims such as Achieve presents itself, it becomes a practical impossibility to contact each and every person who has been defrauded. Because of this, prosecutors have asked a judge to approve a plan that provides “notification to victims who reside in other countries through the internet by posting details about the case and relevant victim impact forms on the United States Attorney’s Office website.”
And there are other logistical challenges when victims of a U.S. crime hail from other countries, prosecutors said.
“Because each country has its own procedures and requirements for contacting persons located in its territory, contacting each foreign victim directly is not practical or advisable,” prosecutors said. “Due to sovereignty concerns, many countries limit or prohibit foreign government officials from directly contacting persons within that country’s borders. This case’s 4,000+ foreign based victims hail from over 140 different countries.”
So, Internet notice is the thing.
We’ll conclude this column with a question: If Achieve created a need for the Justice Department to bring in its “Mega Victim Case Unit,” what sort of need will the TelexFree case create? There may be on the order of 1 million victims in that scheme.
Watch for a special PP Blog editorial tomorrow.
Achieve’s Kristi Johnson is scheduled to be sentenced Nov. 19. Matters pertaining to her alleged colleague Troy Barnes appear to be unresolved.
BULLETIN: (2nd updated 8:54 p.m. EDT U.S.A.) The office of Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina has published a webpage for victims of the “Achieve Community” scam. Victims are asked to “submit information concerning the amount of your losses to the U.S. Probation Office,” which is compiling a “presentence” report on convicted Achieve Ponzi- and pyramid scammer Kristine Louise Johnson.
Achieve participants know her as Kristi Johnson.
Directions on how to submit information are provided on the victims’ site.
Troy Barnes and Kristine Johnson operated a fraudulent Pyramid/Ponzi scheme through Work With Troy Barnes, Inc. (WWTB), an entity they founded and which did business as “The Achieve Community” (TAC). Between April 2014 and February 2015 TAC generated more than $6.8 million. Through online video blogs and written promotional materials on the website, both Barnes and Johnson enticed victim-investors to buy “positions” in TAC and earn extraordinary investment returns of 700 percent. More than 10,000 people invested. Barnes and Johnson repeatedly assured listeners who bought $50 “positions” that they would “cycle” through the matrix and receive $400 in return for each $50 position. There was no requirement that investors do anything. Success depended entirely on sufficient new investors to “retire” early investors positions. The scheme ended when the SEC executed a temporary restraining order (TRO) on February 13, 2015. When it was forced to cease operations due to the TRO, TAC had $2.6 million on deposit but owed more than $50 million to investors.
The defendant, Kristine Johnson, pled guilty on June 30, 2015 and was released on bail. The case is in the presentence stage of the criminal justice process. The United States Probation Office has been assigned to complete a presentence report.
Achieve was a Ponzi-board scam that also spread on social media. The reach potentially created thousands of victims. When online scams cast a wide net, it potentially can led to sentencing enhancements.
In a letter to a U.S. Magistrate Judge, Troy Barnes of “The Achieve Community” claims he is ignorant and will prove it.
UPDATED 10:10 P.M. EDT U.S.A. His Achieve Community cycler colleague Kristi Johnson now charged both civilly and criminally, Troy A. Barnes is professing ignorance.
In a June 22 letter to U.S. Magistrate Judge Craig B. Shaffer of the District of Colorado, Barnes offered reasons for missing a June 3 conference call with the court. The letter was docketed June 26.
Starting off by advising the judge he “meant no disrespect” by missing the call, Barnes explained that he has a sick child who has been hospitalized since May 4.
Barnes, 52, of Riverview, Mich., went on to explain that he did not have counsel and was “Guilty of being ignorant” in the SEC’s civil case filed in February in which he and Johnson both are charged.
Saying he desired to cooperate, Barnes ventured that “I would prove that I am very guilty of being ignorant but still I want to do the right thing.”
The SEC’s civil case was brought in the District of Colorado. The criminal charges against Johnson are filed in the Western District of North Carolina.
In a 17-page complaint that was filed under seal on Feb. 12, the SEC described the Achieve Community as a “pure Ponzi and pyramid scheme” whose revenue “has consisted entirely of investor-contributed funds.”
“Johnson and Barnes have made no effort to generate profits from any legitimate business operations from which they could repay earlier investors,” the SEC charged. “Instead, the sole source of repayments to earlier investors is funds contributed by newer investors.”
Whether Barnes continues to be a subject of a criminal probe is unclear.
Johnson, 60, of Aurora, Colo., was charged criminally with wire-fraud conspiracy earlier this month and agreed to plead guilty, federal prosecutors in North Carolina said. The investigation was conducted by the U.S. Secret Service, which also is investigating Zeek Rewards.
URGENT >> BULLETIN >> MOVING: (13th Update 1:43 p.m. EDT U.S.A.) After an investigation by the U.S. Secret Service, Kristi Johnson (Kristine Louise Johnson) of the “Achieve Community” has been charged criminally with wire-fraud conspiracy and has agreed to plead guilty, federal prosecutors said.
“By the time the scheme collapsed in February 2015, the conspirators owed victim-investors at least $51 million in purported investment returns, yet Johnson, her conspirators and TAC had available only 4% or approximately $2.6 million,” the office of Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina said.
The SEC charged Johnson, 60, civilly in February 2015 with operating a combined Ponzi- and pyramid scheme that allegedly had gathered at least $3.8 million. She resided in Aurora, Colo., the agency said. The securities regulator also charged Troy A. Barnes, 52, of Riverview, Mich.
Barnes disclosed in February that he was a target of a federal criminal investigation. A charge sheet (known as an “information”) filed by prosecutors yesterday against Johnson described an alleged co-conspirator as “CC#1.” The information also suggested there were other co-conspirators “known and unknown to the United States Attorney.”
These individuals were not named.
The conspiracy prosecution brought by the Secret Service and federal prosecutors appears to have upped the Ponzi dollar sum to $6.8 million. Prosecutors said Achieve “defrauded more than 10,000 investor victims” worldwide.
Prosecutors called Achieve a “sham internet company.” The case against Johnson was brought in the venue — the Western District of North Carolina — that is the center of action in the 2012 Zeek Rewards’ Ponzi- and pyramid scheme.
Achieve and Zeek are known to have had promoters in common. Both schemes instructed prospects and recruits not to call the respective programs “investment” programs in bids to skirt securities laws. Such disingenuousness dates back to at least 2008 and the AdSurfDaily Ponzi scheme, also broken up by the Secret Service.
According to court filings, as the scheme grew in size and scope, Johnson and her conspirators concealed the true nature of the scheme through multiple misrepresentations. According to court records, when the conspirators became concerned that the use of the term “investment” would draw scrutiny from regulators, they instructed victim-investors that “We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.”
According to court records, Johnson and her conspirators also lied about the company’s “business model” to the third-party payment processors which processed TAC’s money transactions. When one payment processor concluded that TAC was operating a Ponzi scheme and terminated TAC as a client, court records show that Johnson and her conspirators falsely told victim investors that it was because the payment processor was unable to handle the large amount of money TAC paid to its investors.
As indicated in court documents, the investment scheme began to crumble when payment processors stopped processing the Ponzi payments to victim-investors. By the time the scheme collapsed in February 2015, the conspirators owed victim-investors at least $51 million in purported investment returns, yet Johnson, her conspirators and TAC had available only 4% or approximately $2.6 million.
Prosecutors said “a signed plea agreement was also filed [Thursday], and Johnson is expected to appear before a U.S. Magistrate judge in the coming days to formally accept the plea. The wire fraud charge carries a maximum of 20 years in prison and a $250,000 fine. As part of her plea agreement, Johnson has agreed to pay restitution, the amount of which will be determined by the Court.”
In December 2014, the PP Blog reported that Achieve boosters were parroting each other and circulating a promo that read, “We are not investing in a stock or buying shares in a company. We are using our God given universal right to spend our money the way we want. We choose not to sell out to the banking system for their tiny little 1% annual return.”
Prosecutors described Achieve’s purported 700 percent return as “bogus.” The SEC described Achieve as a “pure Ponzi and pyramid scheme” whose revenue “has consisted entirely of investor-contributed funds.”
Claims of that a “triple algorithm” made such outsized returns possible also were bogus, authorities said.
From an Achieve promo playing on YouTube. Masking by PP Blog.
Achieve offered a 700 percent ROI, according to the SEC and federal prosecutors.
BULLETIN: (3rd Update 3:44 p.m. EDT U.S.A.) The Colorado Division of Securities has issued a cease-and-desist order to “Achieve Community” and accused the network-marketing “program” of securities fraud and selling unregistered securities while conducting “a pure Ponzi and pyramid scheme.”
The order applies to Achieve, Achieve International LLC, Work with Troy Barnes Inc. and Achieve founders Troy Barnes of Michigan and Kristine “Kristi” Johnson of Colorado, the Division said.
Achieve was known in shorthand as TAC.
Johnson already has settled without admitting or denying the allegations, the Division said.
Barnes did not respond to the action, the Division said.
It added that the first complaints against Achieve were submitted to the state in October 2014. The state confirmed publicly in January that Achieve was under investigation.
“Given the location of Achieve in Colorado, we believe that it is important to address this fraudulent activity on a local level and ensure that state investors are protected by barring any further illegal sale or solicitation of these securities by the respondents in this state,” said Colorado Securities Commissioner Gerald Rome.
Colorado’s action is believed to be the first state-level action brought against Achieve, which the U.S. Securities and Exchange Commission charged with fraud in February 2015. A federal judge imposed an asset freeze in the SEC case.
From a statement today by the Division (italics added):
Complainants alleged that they had bought shares in TAC after information on the company’s website promised 800-percent returns on “positions” in the TAC “matrix” costing $50 each.
According to an official complaint compiled by the Division, Barnes and Johnson both allegedly appeared in videos promising that investors would receive an unlimited 800-percent return on positions based on the funds of others who obtained new positions. Further, the founders stated that TAC was “a lifetime income plan,” that members could make “as much as you like with us, as often as you like with us,” and expressly claimed that they were not operating a pyramid or Ponzi scheme.
The Division alleged, however, that the respondents committed securities fraud because the business was, in fact, a pure Ponzi and pyramid scheme. Unlike lawful multi-level marketing businesses, TAC did not sell a product. The proceeds paid to investors and to Johnson and Barnes were derived from funds obtained from later participants in the TAC matrix.
The Division asserts that, despite acting as broker dealers in order to sell the positions, neither Barnes nor Johnson were licensed with the state, as required by the Colorado Securities Act. Furthermore, respondents violated the Act with the sale of unregistered securities products in the form of the $50 positions.
The PP Blog reported on April 20 that an order to show cause had been issued against Achieve and that a cease-and-desist order appeared to be pending.
From an Achieve promo playing on YouTube. Masking by PP Blog.
Two domains linked to the alleged “Achieve Community” pyramid- and Ponzi scheme appear to have been disconnected. On Feb. 17, the PP Blog reported that the domains — ReadyToAchieve.com and TheAchieveCommunity.com — were displaying “Account Suspended” messages.
ReadyToAchieve appears still to have DNS servers, but now displays nothing and will not return a ping. TheAchieveCommunity, meanwhile, displays a “no nameserver” message in registration data.
In a complaint filed under seal in U.S. District Court for the District of Colorado on Feb. 12, the SEC described Achieve as a pyramid- and Ponzi scheme operated by Kristine L. Johnson of Colorado and Troy A. Barnes of Michigan. The agency announced the case on Feb. 18, after the seal was lifted.
Both Johnson and Barnes have asserted their Fifth Amendment rights not to incriminate themselves in the SEC case. Barnes reportedly has claimed he’s under criminal investigation, although it is unclear where and by whom. Both ASD Updates and BehindMLM.com have reported Johnson is the subject of a criminal investigation by the office of U.S. Attorney Anne M. Tompkins of the Western District of North Carolina.
Tompkins is leaving her post today, after nearly five years on the job. North Carolina is a banking center, and Tompkins has become known for her role in bringing cases involving multimillion-dollar investment schemes, securities fraud and mortgage-fraud conspiracies.
One such case was the criminal prosecution of three figures associated with Zeek Rewards, an alleged Ponzi scheme said to have gathered on the order of $897 million. Why Johnson, a Colorado resident charged civilly by the SEC in Colorado federal court last month in the Achieve case, is under criminal investigation in North Carolina is unclear.
Zeek receiver Kenneth D. Bell has raised concerns about network marketers proceeding from one fraud scheme to another. At least one filing in the Achieve case in Colorado suggests Zeek and Achieve had promoters in common, given that the woman who filed the document asking for her Achieve money back also is listed by Bell as a “winner” in the Zeek scheme broken up by the SEC and the U.S. Secret Service in 2012.
As the PP Blog reported on Aug. 17, 2012, the date news of the Achieve probe became public (italics added):
The Secret Service leads a multiagency electronic crimes Task Force in Charlotte, N.C. The Charlotte Task Force is known by the acronym CMECTF.
One promo for Achieve claimed its members had the “God given universal right” to spend their money however they pleased and were choosing “not to sell out to the banking system.” Among other things, Achieve claimed $50 turned into $400.
In court filings, the SEC said it has examined at least five Achieve-related bank accounts. The filings also suggest Achieve polluted the commerce stream at at least least nine points of contact: three banks, one credit union, four payment processors and one brokerage firm.
Johnson is alleged to have provided $10,000 to a church. One or more churches sent money to Zeek Rewards, according to court filings.
Because an untold number of Achieve members received debit cards that could be used at ATMs to offload “earnings,” fraudulent proceeds had the potential to flow through many hundreds of towns and cities, effectively turning local banks into dispensaries for Ponzi schemes or warehouses for them. Achieve is said to have had between 9,000 and 14,000 members.
Ads for other fraud schemes were displayed when Achieve members accessed the “program’s” private forum, contributing to concerns that fraudulent proceeds are circulating between and among scams.
There is no good state in which to run a Ponzi scheme, but Michigan and Colorado — the states in which “Achieve Community” operated — are two of the worst.
This is because both states have racketeering statutes that have been used in Ponzi-scheme cases. The case of Joel Wilson, convicted yesterday in Michigan on criminal charges of racketeering, selling unregistered securities, securities fraud and larceny, is one Achieve Community members can use to inform themselves.
Achieve reportedly is under investigation by the state of Michigan. It’s also under investigation by the state of Colorado, and the U.S. Securities and Exchange Commission has filed civil charges that Achieve was a combined Ponzi- and pyramid scheme that gathered more than $3.8 million.
Alleged Achieve operators Troy Barnes of Michigan and Kristi Johnson of Colorado have asserted their Fifth Amendment right not to incriminate themselves. Criminal probes may be occurring on more than one front.
The office of Michigan Attorney General Bill Schuette has declined to talk about Achieve. But Schuette had plenty to say about Wilson and his investment company known as “The Diversified Group Advisory Fund LLC.”
“I am pleased we have secured justice for the victims who lost their life savings,” said Schuette. “Financial exploitation is a growing crime in Michigan, and we are cracking down on these con artists. Be skeptical of anyone who promises huge returns for a small investment.”
Wilson potentially faces decades in prison.
Fallout from the case was not limited simply to Wilson. A saleswoman also was charged criminally. She, too, was convicted of racketeering, plus embezzlement from a vulnerable adult, and seven counts of false pretenses.
The saleswoman, Shawn Dicken, 40, of Bay City, was sentenced last year to “to 11 years, eight months to 20 years” in prison, Schuette’s office said.
Achieve Community allegedly offered a return of 700 percent in as little as a few months. Promoters of the scheme parroted information put out by the “program” to draw recruits who’d help drive the “cycler.”
With Diversified Group, Dicken “failed to disclose the risks associated with the actual investment in question,” prosecutors said.
She also touted “guaranteed” returns, they noted.
That senior citizens were targeted led to the charge of embezzlement from a vulnerable adult which, like racketeering and false pretenses, is a felony.
Achieve Community largely operated over the Internet and is known to have recruited senior citizens. Internet-based schemes typically increase the odds that vulnerable people will be plundered.
A woman has contacted the court presiding over the Achieve case to solicit help in getting back her money. The six-page filing by Arla Mendenhall, who identified herself as an Achieve investor, further questions how Achieve treated her for tax purposes.
A similar situation at Zeek, according to court filings, led to a 2014 criminal charge of tax-fraud conspiracy against Zeek operator Paul R. Burks. Prosecutors alleged that Burks failed to file corporate tax returns and accused him of issuing “fraudulent IRS Forms 1099s, causing victim-investors to file inaccurate tax returns for phantom income they never actually received.”
Mendenhall claimed in a communication to the court presiding over the Achieve case that she received a 1099 that asserted she was paid $6,000 by Achieve, even though “I only withdrew $800.00.”
The remaining $5,200 was “reinvested in the business,” she advised the court.
All in all, Mendenhall contended she plowed $8,450 into Achieve.
Records in the Zeek case list her as a “winner” of a Zeek sum in excess of $1,000, meaning she’s a defendant in a class-action clawback case filed by Zeek receiver Kenneth D. Bell in 2014. Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina granted class certification earlier this month.
Separately, posters at the RealScam.com antiscam forum have linked Mendenhall to cash-gifting schemes such as The People’s Program and Blessing Gold Club.
In 2013, the PP Blog reported that certain Blessing Gold Club promoters were promoting Better-Living Global Marketing and its Zeek-like Bidders Paradise arm. BLGM purportedly operated offshore, giving rise to questions about whether U.S. members involved in Zeek later had moved to a new venue in an effort to continue to pick fruit from a poisonous tree.
On Feb. 12, U.S. District Judge Robert E. Blackburn of the District of Colorado froze Achieve Community assets after the SEC contended Achieve was a pyramid- and Ponzi scheme that had gathered more than $3.8 million.
“I had no knowledge of anything illegal when I joined this Business,” Mendenhall said in her filing today.
Much of the information submitted by Mendenhall appears to have originated in her Achieve Community back office.
Alleged Achieve operators Troy Barnes and Kristi Johnson have invoked their Fifth Amendment right not to incriminate themselves in the SEC’s civil case. Barnes has claimed he faces a criminal investigation.
BULLETIN: “Achieve Community” Ponzi/pyramid defendants Troy Barnes and Kristi Johnson have informed the U.S. Securities and Exchange Commission that they have invoked their Fifth Amendment right not to incriminate themselves in the agency’s civil case.
A deposition scheduled for Barnes Feb. 20 in Detroit was canceled. So was a deposition set for Johnson today in Denver.
Barnes, according to the SEC, advised the agency in an email that he consulted with an attorney and understands he is the “target of a criminal Investigation involving many of the same issues” before the SEC.
“If Deposed, I intend to take the Fifth Amendment in any and al[l] ongoing investigations Including Kristine Johnson, Work With Troy Barnes Inc. And The Achieve International LLC,” Barnes wrote.
Achieve allegedly operated through Work With Troy Barnes. Achieve International allegedly received ill-gotten gains from the fraud.
Precisely who is representing Barnes is unclear. Johnson is represented by David A. Zisser, a veteran securities attorney.
In court filings today, the SEC said it had learned Barnes “has discussed moving victim funds in this matter outside of the United States in a manner that would make recovery for the benefit of investors particularly difficult or impossible.”
When and with whom Barnes allegedly discussed moving the money are unclear. The SEC said today that, as a result of the asset freeze imposed Feb. 12 in the Achieve case, it has frozen more than $2.5 million.
Johnson, the agency alleged, “withdrew approximately $80,000 in TAC investor funds in cash from a TAC-related account or accounts” on Feb. 6, six days before the agency brought its fraud complaint and a judge imposed an asset freeze.
Although both Barnes and Johnson have stipulated to the entry of a preliminary injunction in the SEC case, Work With Troy Barnes Inc. and Achieve International LLC have not. A hearing is set for tomorrow in Colorado.
If the corporate entities do not appear, the SEC said in court filings, the agency intended to ask a judge to extend the injunctions to the companies. And if the judge wanted to hear testimony, the agency said it has “two witnesses who are not local to Colorado, but rather reside in Washington, D.C. and North Carolina, respectively.”
These unidentified individuals could testify by telephone, the agency said.
Paul Burks, the 70-year-old operator of the Zeek Rewards Ponzi scheme, now is listed as prisoner No. 29723-058 at FMC Lexington. The facility is an administrative security federal medical center with an adjacent minimum security satellite camp in Lexington, Ky.
