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Tag: U.S. Attorney Timothy J. Heaphy

  • UPDATE: SEC Declines To Comment On Pitchman’s Video Promo For ‘Achieve Community’ And 2 Other Ponzi-Board ‘Programs’ That Used Footage From Agency’s Website

    achievelogoThe U.S. Securities and Exchange Commission declined this morning to comment on a Jan. 9 YouTube pitch from an “Achieve Community” promoter who mixed nearly six minutes of footage from the SEC website into a pitch for Achieve and two other Ponzi-board “programs.”

    Rodney Blackburn implied in the 14:27 production that the SEC did not have jurisdiction over “programs” such as Achieve, Unison Wealth and Trinity Lines. Parts of the Blackburn promo were recorded inside his back office of Unison Wealth.

    “[D]ecline comment,” the SEC succinctly said today.

    Achieve purports that $50 sent to the “program” fetches back $400. Members reportedly were permitted to buy multiple $50 “positions” and to roll a percentage of “earnings” back into the “program,” a straight-line money-cycling scheme.

    A similar rollback feature was an element in the Zeek Rewards scheme shut down by the SEC in 2012.

    Blackburn says he prefers “passive” programs. The SEC and state-level regulators have a history of acting against such ventures. Zeek, for example, was promoted as a “passive” scheme.

    At about the 0:51 mark of Blackburn’s Jan. 9 video, ads for “programs” called “Paradox Cash” and “GlobalAdShare” appear, meaning that people such as Blackburn who sign up for Unison Wealth are being shown promos for still-other Ponzi-board schemes.

    “GET PAID DAILY FOR DOING NOTHING,” the ad for GlobalAdShare blares.

    Blackburn’s Jan. 9 video is at least the second confirmation that Unison Wealth is beaming ads for other HYIPs.

    On Dec. 12, the office of then-U.S. Attorney Timothy J. Heaphy of the Western District of Virginia had no immediate comment on an Achieve Community call in which Blackburn was a host. The call demonstrated that Achieve was driving business by reaching across state lines and that one or more senior citizens had signed up, including a woman who claimed her 86-year-old husband of 53 years had been “in the hospital for a full year and six months in the nursing home.”

    Achieve reportedly suspended payouts to members more than two months ago after losing its ability to conduct business through Payoneer. Although it announced a purported deal with Global Cash Card on Dec. 18 to resume payouts, that deal appears to have fallen through.

    The “program” said last week that it would resume payouts on an unspecified date through a “temporary” processor. The “temporary” processor was not named.

    The SEC’s Office of Investor Education and Advocacy recently has dialed up its efforts to educate the public about scams that spread on social-media platforms such as YouTube, Facebook and Twitter. Achieve and its promoters have or had a presence on all three.

     

  • ASD ECHO CHAMBER? Bizarre Ponzi Case That Included Apparent ‘Sovereign Citizens’ And Crackpot Legal Theories Ends With Spectacular Total Of 465 Guilty Verdicts Against Final 2 Defendants

    UPDATED 7:57 P.M. EDT (U.S.A.) It featured a Ponzi huckster touting a can’t-miss earnings scheme in an Internet video. For good measure, it featured apparent “sovereign citizens,” crackpot claims that U.S. law did not apply to the scheme and incongruous claims that the scheme had passed muster with the SEC.

    It also included a failed bid to remove for alleged bias a federal judge presiding over both criminal and civil aspects of the case. Meanwhile, it featured a failed bid to hamstring law enforcement’s efforts to probe a large fraud scheme through assertions that investigators would suffer astronomical financial penalties in court.

    At the same time, it featured claims from supporters that a wrongfully accused promoter-in-chief actually was an astute businessman who’d found a way to provide a legitimate return of 30 percent a month and suggestions that the investigating agents simply were too thick-headed to see the beauty of the computerized business model.

    But it was not the AdSurfDaily autosurf Ponzi case, which has featured similar claims.

    Rather, it was the Forex Ponzi scheme case of Ronald Wade Smith Jr., 36, and Safeguard 30/30 Investment Club — and it has resulted in straight-line wins for federal prosecutors in the Western District of Virginia, including the return last week of a whopping 465 guilty verdicts against Smith’s wife and a fellow promoter.

    Ronald Smith, who came out of the gate loudly protesting the government’s actions, ended up pleading guilty to more than 240 counts of wire fraud, commodities fraud and conspiracy. The guilty pleas followed an earlier claim by Smith that he’d trademarked his name, an apparent bid to stifle scrutiny and chill investigators.

    Any federal agent who used his name in a court document would owe him $50 million for each instance his name appeared, Smith once claimed, according to court filings.

    Smith, according to court filings, also claimed that he had to personally authorize any civil or criminal prosecution against him and that Chief U.S. District Judge James P. Jones had no “authority over him because ‘the Court has authority based on the Constitution’ and he ‘was not party to the signature of the Constitution; therefore, the Constitution doesn’t apply to me unless I choose to sign it.”

    Smith’s wife, Angela Allison Duty Smith, 35, of Davenport, Va., was fund guilty Aug. 4 of 210 counts of wire fraud, 23 counts of money laundering, one count of commodities fraud and one count of conspiracy to commit wire fraud.

    Terrance Keith Cunningham, 39, of Alpharetta, Ga., was found guilty of 210 counts of wire fraud, 17 counts of money laundering, one count of obstruction, one count of commodities fraud and one count of conspiracy to commit wire fraud.

    The verdicts were returned after a nine-day jury trial.

    During the early phase of the criminal case, Ronald Smith’s father-in-law, Charles Duty, testified on Smith’s behalf despite the fact he had given his life savings to Smith and the money could not be accounted for, according to court records.

    Duty, according to court records, testified that “he was confident Smith had properly invested his money and that he believed Smith’s promise of a 30 percent return every 30 days.”

    Prosecutors moved to have Ronald Smith detained pending trial as a flight risk, but Duty said he put up his real estate as security if his son-in-law were freed. Prosecutors also asked that Ronald Smith he subjected to a competency exam. Smith ultimately was ruled competent to stand trial.

    His wife, who joined her father in testifying on Smith’s behalf after Smith claimed he had a personal net worth of $28 billion and owned a company known as Homer Securities that was worth $4 trillion, also joined with her husband in asserting that U.S. law did not apply to the scheme.

    “Both Duty and Angela Smith appear to have fully accepted the defendant’s outlandish theories and I believe they are substantially under the defendant’s control,” Jones ruled in April 2010.

    Like her husband, Angela Smith was charged criminally.

    “This case demonstrates our commitment to prosecute those who prey upon investors with false promises of unreasonably high rates of return,” said U.S. Attorney Timothy J. Heaphy. “While we will continue to identify and apprehend individuals who make these bogus claims, investors need to be vigilant and carefully scrutinize the promises made by individuals seeking to invest their money. The old adage applies: if it sounds too good to be true, it probably is.”

    Cunningham was a pitchman who recruited Safeguard 30/30 investors, according to court filings.

    All in all, investors lost about $1 million in the caper, prosecutors said.

    Cunningham and both Smiths lied about why returns were not being paid to investors, prosecutors said.

    See earlier story.