Federal prosecutors have Tweeted a photo of $20 million allegedly found stuffed in a box spring and linked to the massive TelexFree Ponzi- and pyramid caper.
In other HYIP news, apparent supporters of the Traffic Monsoon “program” have been using Twitter in the past 24 hours to ask President Trump to intervene in the SEC’s fraud case brought in July 2016.
Traffic Monsoon was pitched as an “advertising” program. The SEC alleged the program operated as a Ponzi scheme.
Sann Rodrigues. From a promo for the TelexFree international convention in Spain in 2014.
BULLETIN: (Updated 9:27 p.m. EDT U.S.A.) TelexFree and iFreeX figure Sann Rodrigues has been arrested in New Jersey, according to the Blog of Joaldro Dalla “Billy” Costa, citing a report on radio station WSRO 650 AM in Framingham, Mass.
Rodrigues — listed as Devasc Sanderley Rodrigues in online booking records and believed to be a native of Brazil who has lived in the U.S. states of Massachusetts and Florida — appears to have been arrested May 18.
On the same day, U.S. and Brazilian law-enforcement officials met in Washington, D.C. Whether the international talks and the arrest were a coincidence was not immediately clear.
The records suggest Rodrigues was detained at the Essex County Correctional Facility.
Billy’s story suggests the booking was immigration-related. The PP Blog could not immediately confirm the information.
No release date appears, suggesting Rodrigues, 43, still is being held. Information on bond and a specific charge was not posted.
Rodrigues was one of eight TelexFree figures charged civilly with securities fraud by the U.S. Securities and Exchange Commission. He is a recidivist securities violator, according to the SEC.
TelexFree, an alleged Ponzi- and pyramid scheme that may have gathered on the order of $1.8 billion in about two years, is under investigation by the SEC and the U.S. Department of Homeland Security. Alleged TelexFree operators James Merrill and Carlos Wanzeler have been charged criminally.
U.S. authorities have called Wanzeler an international fugitive perhaps living in Brazil.
On May 18, officials from U.S. Immigration and Customs Enforcement (ICE), an arm of the Department of Homeland Security, met in Washington with officials from the Brazilian National Police.
The officials “discussed the joint commitment to continued information-sharing and conducting investigations into child exploitation, financial fraud and human trafficking, among other topics,” according to an ICE news release dated May 21.
From ABC News report on James McBride and “Divine Province.”
EDITOR’S NOTE: U.S. Immigration and Customs Enforcement (ICE) and Homeland Security Investigations (HSI) are referenced in the story about purported “sovereign citizen” James T. McBride below. ICE/HSI also are involved in the investigation of the alleged TelexFree Ponzi- and pyramid scheme. Whether TelexFree had any “sovereign citizens” in its ranks is unclear. “Sovereign citizens,” however, have been linked to other HYIP schemes. Wild narratives may accompany such schemes both before and after a government intervention.
** __________________________________ **
James T. McBride first came to our attention in January 2013, after a reader alerted us to a story in the Sun Sentinel about a bizarre incident that occurred during a bankruptcy hearing for a Florida business known as RoboVault.
McBride, who claims to derive his authority from the Vatican, sent letters to the judge and trustee demanding the bankruptcy case be dropped. He previously has been profiled in media accounts as a “sovereign separatist,” someone who believes he is not subject to state and federal laws.
McBride’s name next surfaced in February 2013, as part of a story concerning the arrest near Columbus, Ohio, of a purported “sovereign citizen.” A police officer and police canine reportedly were injured. (See Comments thread below story, which references an entity known as “Divine Province.”)
So-called “sovereign citizens” — jailed AdSurfDaily figure Kenneth Wayne Leaming is one of them — have an irrational belief that laws do not apply to them. Leaming became the target of an FBI investigation after filing false liens against various public officials involved in the ASD Ponzi case. Investigators found bogus police credentials in Leaming’s possession.
Prosecutors said Leaming was a member of the “County Rangers,” the armed-enforcement wing of a group of “sovereign citizens.”
By May 2014, prosecutors had formally connected McBride, 60, of Columbus, Ohio, to “Divine Province.” He has now been convicted in the Eastern District of Virginia on charges of conspiracy, causing the impersonation of a diplomat and producing false identification documents.
Yes. You read that right: causing the impersonation of a diplomat.
McBride was indicted on May 14, 2014, by a federal grand jury of one count of conspiracy, one count of causing the impersonation of a diplomat and four counts of producing false identification documents. According to the evidence at trial, McBride was the leader of a sovereign citizen group called “Divine Province,” whose members claimed the U.S. government was a “municipal corporation” that did not have authority over them. McBride produced and distributed false diplomatic identification cards to his group’s members, and he encouraged them to make claims of diplomatic immunity to avoid arrest, debts or taxes. None of the group’s members were in fact accredited diplomats.
McBride started selling the identification cards in September 2012 at a seminar he organized in Herndon, Virginia. Afterwards, he started selling the IDs from a website and shipping them around the country.
McBride sold the IDs in pairs, one that identified the holder as a “Universal Post Office Diplomat” and another that purported to be an “International Diplomatic Driver Permit,” for approximately $200. The defendant also encouraged his members to send copies of the IDs to governmental agencies to notify them of a member’s “status” as a diplomat. The defendant claimed that his authority to issue the IDs came from the Vatican. The defendant also gave a televised interview on ABC News prior to the filing of charges in the case, in which he reiterated such claims. During the course of the charged conduct, the defendant’s organization earned close to $500,000.
URGENT >> BULLETIN >> MOVING: The United States and 10 law-enforcement agencies in Europe and Hong Kong have seized 706 domain names in a Cyber Monday fraud crackdown, U.S. Immigration and Customs Enforcement (ICE) said.
The photo above is from one of the domains: nfl-go.com, which has been linked to counterfeiting, according to a seizure message playing on the site. Variety.com first reported the seizure of domains linked to alleged counterfeiting sites that trade on the intellectual property of the National Football League.
At least some of the seized sites now display the emblems of at least 14 law-enforcement agencies in the United States, the United Kingdom (City of London Police), Belgium, Romania, Hong Kong, France, Spain, Hungary and Denmark. The EUROPOL emblem also is rolling across the seized sites.
“Working with our international partners on operations like this shows the true global impact of IP crime,” said ICE Acting Director John Sandweg. “Counterfeiters take advantage of the holiday season and sell cheap fakes to unsuspecting consumers everywhere. Consumers need to protect themselves, their families, and their personal financial information from the criminal networks operating these bogus sites.”
A top EUROPOL official said buyers may be assisting organized crime.
“Unfortunately the economic downturn has meant that disposable income has gone down, which may tempt more people to buy products for prices that are too good to be true. Consumers should realize that, by buying these products, they risk supporting organized crime,” said Rob Wainwright, director of Europol.
ICE dubbed the takedown “Operation In Our Sites, Project Cyber Monday IV,” saying it built on efforts that began in 2010 and continued through subsequent years. The European side of the probe was dubbed Project Transatlantic III.
ICE is a division of the U.S. Department of Homeland Security. Working with ICE on the U.S. side were Homeland Security Investigations (HSI), the U.S. Department of Justice and the National Intellectual Property Rights Coordination Center (IPR Center) in Washington, D.C.
HSI conducted undercover operations as part of the effort, ICE said.
“This is the fourth year that the IPR Center has targeted websites selling counterfeit products online in conjunction with Cyber Monday,” ICE said. “Due to the global nature of Internet crime, the IPR Center partnered with Europol who, through its member countries, seized 393 foreign-based top-level domains as part of Project Transatlantic III. Additionally, Hong Kong Customs coordinated the seizure of 16 foreign-based top-level domains hosted in Hong Kong, enlisting the assistance of the web-hosting companies to suspend the service of related websites.”
“During this operation, federal law enforcement officers made undercover purchases of a host of products including professional sports jerseys and equipment, DVD sets and a variety of clothing, jewelry and luxury goods from online retailers who were suspected of selling counterfeit products,” ICE said. “Upon confirmation by the trademark or copyright holders that the purchased products were counterfeit or otherwise illegal, law enforcement officers obtained seizure orders for the domain names of the websites that sold these goods.”
This claim appears today on a website styled obopayusa.com. Precisely when it began to appear is unclear.
With Cyber Monday and the traditional online sales coming up a few days from now on Dec. 2, this is what we know: Payza, the successor brand to Montreal-based AlertPay, a Ponzi-forum darling and chronic HYIP- and fraud-enabler, suddenly says this in a headline on its Community forum: “US Funds Frozen | Obopay/Ultralight FS. issue.”
The announcement is dated yesterday, Thanksgiving Eve in the United States.
Today is Thanksgiving Day. U.S. government offices are closed. Black Friday, another day of brisk U.S. sales activity in which retailers cater to door-busting holiday shoppers, is tomorrow.
We also know that the U.S. government has established a tradition of taking down counterfeiting and piracy scams and their enabling websites on Cyber Monday. Moreover, we know that U.S. Immigration and Customs Enforcement (ICE), a division of the U.S. Department of Homeland Security, issued an alert two days ago that it is working with partners and “will be conducting increased operations during the holiday season targeting the importation and distribution of counterfeit and pirated products.”
Beyond that, we know that the United States — the U.S. Secret Service, ICE and other agencies — took down the Liberty Reserve payment processor over the 2013 Memorial Day holiday period and the U.S. Department of the Treasury identified Liberty Reserve as a “Financial Institution of Primary Money Laundering Concern.” The bust was announced on May 28, the day after Memorial Day.
Backing up a few years, we also know that AlertPay and SolidTrustPay enabled the $119 million AdSurfDaily Ponzi scheme and the $70 million Pathway To Prosperity fraud scheme — to name just two of many.
Meanwhile, we know that the court-appointed receiver in the Zeek case is going after money allegedly tied to Payza and SolidTrustPay. The most recent affirmation of this occurred on Nov. 14, when the receiver advised a federal judge that his efforts to gather $10 million from Payza “persisted” and that “new information has come in” that affects his analysis of Zeek-related Payza funds. Whether the $10 million sum would go up or down based on the new information was not revealed in the filing.
Analysis of “transactional data from Payza is not yet complete,” the receiver advised the judge. He also noted that the Payza funds were held in a “foreign bank account” in an undisclosed country. Based on its research, the PP Blog believes the country is in Eastern Europe.
We also know that AlertPay effectively became Payza in May 2012, even as Zeek was conducting auctions for U.S. currency and experiencing trouble with U.S. banks. Payza operates through a New York entity known as MH Pillars Inc., which in May 2012 announced the “recent acquisition of AlertPay’s existing online payment platform.” Payza also is associated with a U.K. entity known as MH Pillars Ltd. of London.
Thanksgiving Confusion
Although Payza’s headline uses the word “Frozen,” the text below it does not identify the party that purportedly froze the funds. At the same time, the text appears to be at least slightly at odds with the headline claim that the money was “Frozen.” Indeed, the text describes the funds as “withheld.”
Although the word choices may or may not be important, one thing seems obvious: Either word is apt to be unsettling to Payza’s U.S. customers who want their money.
“As you may or may not already know, we are unable to complete any requests to withdraw or transfer funds for a part of our U.S. members at this time, since they are being withheld [emphasis added by PP Blog] by Ultralight Financial Services (formerly known as Obopay Inc.) a licensed U.S. money transmitter of which Payza was an agent,” the announcement begins.
“We have tried to resolve this problem by contacting their management, their legal team and State regulators,” the announcement continues. “Their management and legal team were unresponsive. However, State regulators are willing to help us, but they have told us that they will not intervene unless they hear from you, the owner of your funds.
“In this case, Payza is asking all affected members to demand action from both Ultralight FS and your State regulator . . .”
At the time of this PP Blog post, the full Nov. 27 announcement is available at the Payza Community Forum. [See Update at bottom of this PP Blog post.]
These Thanksgiving Eve claims by Payza are at odds with other claims online.
In short, Payza seems to be saying that Ultralight/Obopay Inc. is responsible for its inability to serve U.S. customers because the entities either froze or withheld the money.
But here is where the information diverges and becomes even more fractious: At least two websites that state they’re associated with Obopay claim that “[t]he US Department of Homeland Security has seized all MH Pillars dba Payza money on deposit with UltraLight FS.” Both of these sites are cheesy in appearance. Both also have have copyright notices: One, styled obopayusa.com, says “Content copyright 2013. Obopay, Inc. All rights reserved.” The other, styled ultralightfs.com, says “Copyright @ UltraLight Financial Services. All rights reserved.”
Neither site says when the money purportedly was seized. Nor does either site say how much was seized.
So, the apparent obopay and UltraLight entities are saying the money was seized by the U.S. Feds. Payza is saying it was “frozen” or “withheld” by obopay/ultralight.
What’s the truth? Well, it’s unclear at this time.
There’s also a website styled obopay.com that appears to have the same logo as obopayusa.com. The obopay.com site asserts an association with Obopay Mobile Technology India Pvt. Ltd. of Bangalore and says its partners include Societe Generale, Essar Telecom Kenya Limited and Union Bank of India.
The obopay.com site appears to make no reference to Payza or MH Pillars, but does reference Obopay Inc. of Redwood City, Calif., as its parent company. When the PP Blog clicked on a “State License” tab at the bottom of the obopay.com site, however, it received this error message: “An error occurred during a connection to www.obopay.com. Peer’s Certificate has been revoked. (Error code: sec_error_revoked_certificate).”
So, another layer of the curious.
Searching the database of the Financial Crimes Enforcement Network (FinCEN), the PP Blog located a document that suggests Obopay Inc. of Redwood City, Calif., is a registered Money Services Business in all 50 U.S. states, plus the District of Columbia. FinCEN is an arm of the U.S. Treasury Department. Its stated mission is “to safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.”
Information on MH Pillars Inc. of New York also appears in the FinCEN database. The information suggests the firm is a registered Money Services Business in at least 48 of the the 50 U.S. states. (California and New Hampshire appear to be possible exceptions.) MH Pillars also appears to be registered in venues such as American Samoa, the Federated States Of Micronesia, the Marshall Islands, the Northern Mariana Islands, Palau and the U.S. Virgin Islands.
It seems clear that both Obopay Inc. and MH Pillars Inc. are registered MSBs. Why, then, can’t U.S. Payza customers get their cash? Could it be because UltraLight isn’t registered? The FinCEN database appears to have no information on UltraLight.
But a Florida Department of State database does, and that information suggests Obopay Inc. is changing its name to ULTRALIGHT FS Inc. The Florida document is date-stamped Oct. 15, 2013. A phone number listed in the document comports with a phone number in Louisiana and Mississippi records as the number for Obopay Inc. of Mountain View, Calif. Like Redwood City, Mountain View is a Silicon Valley community.
Why FinCEN records show Obopay in Redwood City while state records show the enterprise in Mountain View was not immediately clear.
What does seem clear is that some or all of Payza’s U.S. customers can’t get their money and that whatever dispute exists between Payza and OboPay/Ultralight is about money that either was frozen/withheld by OboPay/Ultralight or seized by U.S. law enforcement.
Payza claimed in July 2012 to be cleaning up its act. This claim was made about a month prior to the August 2012 Zeek action by the SEC and an accompanying confirmation from the U.S. Secret Service that it also was investigating Zeek. Whether the Payza claim was just lip service remains to be seen.
When the United States took down Liberty Reserve, the Secret Service changed Liberty Reserve’s domain nameservers to a “sinkhole” URL at ShadowServer.org. This initially caused Liberty Reserve to go offline. When the domain returned, the logos/badges of the U.S. Department of Justice, the Global Illicit Financial Team, the Secret Service, the Treasury Department and Homeland Security Investigations were published on the site to let the world know that crime doesn’t pay in the United States.
Payza’s website loaded quickly this morning, with full Payza branding and services appearing. DNS settings appear not to have been altered, suggesting at least to this point that the domain has not been seized by the United States. Whether the United States intends to seize it now or ever is not known.
But seizing money is an altogether different matter. One of the ways to choke off HYIP and counterfeit-goods/pirating scams is to stop the fuel supply and to starve them out. If the United States desired to cripple criminal HYIPs and counterfeiting enterprises, it theoretically could attack them by seizing money that had been routed through Payza and the AlertPay predecessor.
Whether that’s what’s happening here remains unclear. At the same time, it would be catastrophically foolish for an enterprise such as Obopay or UltraLight (or some combination thereof) to attribute a seizure of Payza funds to the U.S. Department of Homeland Security if it were not true. It also would be catastrophically foolish for Payza to claim that Obopay/UltraLight froze or withheld the money from U.S. Payza customers if that were untrue or not the complete truth.
Seizure of money by the U.S. government requires a court order. Obopay/UltraLight either hasor has not received such a court order or notice that one was on the way.
If the United States has court-worthy evidence that Payza was facilitating online criminal enterprises, then it should become apparent in the coming days. If Obopay/UltraLight played any role, it also should become apparent.
It could be a very interesting Black Friday or Cyber Monday.
Update 7:31 p.m. Nov. 28: The original Payza announcement appears to have been removed this afternoon or this evening and replaced by this considerably shorter one. There’s also a post on the Payza Blog. It is dated today and titled, “Important Update: Limited Services for Certain U.S. States.” Those states are not identified in the Payza Blog post.
URGENT >> BULLETIN >> MOVING: (15TH UPDATE 2:31 P.M. EDT U.S.A.) Liberty Reserve, its founder and several others have been indicted in U.S. District Court for the Southern District of New York (Manhattan).
The charges, which include conspiracy to commit money-laundering, conspiracy to operate an unlicensed money-transmitting business and operating an unlicensed money-transmitting business, were confirmed this morning by the office of U.S. Attorney Preet Bharara.
Liberty Reserve founder Arthur Budovsky was using the aliases “Eric Paltz” and “Arthur Belanchuk,” according to the indictment.
Co-conspirators, according to the indictment, include Vladimir Kats, also known as “Ragnar”; Ahmed Yassine Abdelghani, also known as “Alex”; Allan Esteban Hildago Jimenez, also known as “Allen Garcia”; Azzeddine El Amine; Mark Marmilev, also known as “Marko”; and Maxim Chukharev.
Marmilev also is known as “Mark Halls,” according to an affidavit that accompanies the indictment.
Budovsky and El Amine were arrested Friday in Spain, Bharara’s office said today. Kats and Marmilev were arrested Friday in Brooklyn. Chukharev was arrested Friday in Costa Rica. Hildago and Abdelghani are “at large” in Costa Rica.
“As alleged, the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes — the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers, and traffickers,” Bharara said. “The global enforcement action we announce today is an important step towards reining in the ‘Wild West’ of illicit Internet banking. As crime goes increasingly global, the long arm of the law has to get even longer, and in this case, it encircled the earth.”
Added Steven G. Hughes, special agent in charge of the U.S. Secret Service. “These arrests are an example of the Secret Service’s commitment to investigate and apprehend criminals engaged in the misuse of virtual currencies to conduct global monetary fraud. Cyber criminals should be reminded today that they are unable to hide behind the anonymity of the Internet to avoid regulated financial systems.”
The IRS and the U.S. Department of Homeland Security (U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI)) also are involved in the probe, as are multiple nations, Bharara’s office said.
Liberty Reserve and its co-conspirators “intentionally created, structured, and operated Liberty Reserve as a criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes,” according to the indictment.
The United States has seized the Liberty Reserve domain name along with several others, according to an affidavit that accompanies the indictment. The others include: ExchangeZone.com; SwiftExchanger.com; MoneyCentralMarket.com; and Asianagold.com. As part of the seizure process, a federal judge ordered the U.S. Secret Service to point the domain nameservers to a “sinkhole” URL at ShadowServer.org.
News about the seizures destroys various examples of wishful thinking advanced by online HYIP hucksters at forums such as TalkGold and MoneyMakerGroup since LibertyReserve’s domain went offline Friday. On Saturday, reports surfaced that Budovsky had been arrested in Spain and that Liberty Reserve was under investigation in Costa Rica and the United States.
Seizure notices are expected to appear on the domains, although the timing was not clear.
The indictment ties Liberty Reserve to the crimes of “credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking.”
Among other things, the indictment alleges that “virtually all of Liberty Reserve’s business derived from suspected criminal activity” and that the scope of the fraud is “staggering.”
Between 2006 and May 2013, according to the indictment, Liberty Reserve processed an estimated 55 million transactions and is believed “to have laundered more than $6 billion in criminal proceeds.”
Supporting affidavits in the case show that the indictment was returned under seal on May 20 and that prosecutors applied for an injunction barring Amazon Web Services Inc. from providing services to Liberty Reserve. The affidavit also shows that the United States is seeking forfeiture of sums on deposit in at least 42 accounts in various countries
These banks are in countries such as Costa Rica, Cyprus, Russia, Hong Kong, China, Morocco, Spain, Latvia, Australia and the United States. Tens of millions of dollars are being sought in forfeiture actions, although the final sum is unclear.
Liberty Reserve, according to the indictment, used “exchangers” in countries with little oversight, including Malaysia, Russia, Nigeria and Vietnam. The process was part of a criminal scheme to bury evidence of fraud while providing anonymity for the fraudsters.
The enterprise, according to the indictment, functioned “in effect as the bank of choice for the criminal underworld.”
In a separate but related action, the U.S. Department of the Treasury announced it had identified Liberty Reserve as a “Financial Institution of Primary Money Laundering Concern.”
“Treasury is determined to protect the U.S. financial system from cyber criminals and other malicious actors in cyberspace, including overseas entities like Liberty Reserve that facilitate online crime and hope to evade regulatory scrutiny,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. “We are prepared to target and disrupt illicit financial activity wherever it occurs – domestically, at the far reaches of the globe or across the internet.”
One of the enduring myths of the Ponzi boards — “offshore equals safe” — has been shattered again. The Los Angeles County Sheriff’s Department says it got its man — with help from the government of Thailand, the U.S. Marshals Service and U.S. Immigration and Customs Enforcement (ICE).
Ponzi scheme suspect John Chiyuan Lee became a fugitive in November 2006, when he fled Greater Los Angeles for Thailand after being identified as a thief. Victims emerged from at least four California counties — Los Angeles, Orange, Ventura and Santa Clara — and at least one victim resided in St. George, Utah, authorities said.
INTERPOL published a “Wanted” notice on Lee, according to records.
The case was assigned to Los Angeles Sheriff’s Det. Simeon Plyler, who discovered at least 29 victims and used passport records and worked with ICE to track Lee to Thailand.
“ICE agents enlisted the assistance of Thailand authorities who were able to locate and arrest him in Pataya, Thailand, on October 4, 2011,” the Sheriff’s Department said. “Deputies with the U.S. Marshals Service assisted in the case by transporting Lee back to the United States from Thailand to face criminal charges.”
Lee, 40, was arrested at Los Angeles International Airport and taken to the Los Angeles County Jail. Bail was set at $1.869 million, according to jail records. He remains jailed.
Victims’ losses ranged from $3,000 to $425,000, authorities said.
Residents of California communities such as Culver City, Hancock Park, Hollywood, Hollywood Hills, Huntington Beach, Lakewood, Los Angeles, Marina del Rey, Morgan Hill, San Pedro, Shadow Hills, Sherman Oaks, Studio City, Thousand Oaks, Valley Village, Van Nuys, Ventura, West Hollywood, West Los Angeles and Westwood were among the victims, authorities said.
Patch.com is reporting that Lee was a trainer at a Culver City gym — and all of his victims worked out at the facility.
A recidivist securities felon tied to at least 24 bank accounts had an airline ticket for Bermuda last week but was arrested in Florida before he could get offshore after scamming investors in a long-running fraud scheme that had gathered $20 million, according to law-enforcement officials.
Charged in a criminal complaint by the U.S. Postal Inspection Service was James D. Risher, who is associated with firms identified as Jade Asset Group LLC, Managed Capital LLC and Safe Harbor Investments. Risher is accused of mail fraud, wire fraud, money-laundering and conspiracy.
Risher, 61, of Sanibel, Fla., was released from federal prison on Aug. 14. 2004, according to records. His imprisonment stemmed from 1997 convictions for mail fraud, securities fraud and money-laundering for which he was sentenced to 92 months, with three years’ supervised probation after his release.
He also has state-level convictions in Georgia from a securities swindle in the early 1990s, according to records.
The new charges against Risher suggest he embarked on a new swindle in early 2007, perhaps while still on probation for the swindle that led to his 1997 convictions. The FBI, the IRS, the Florida Department of Law Enforcement and the Florida Office of Financial Regulation are assisting postal inspectors in the new probe, which is ongoing.
One of the keys to Risher’s arrest was a notification that law enforcement received from U.S. Immigration and Customs Enforcement (ICE) that Risher had a plane ticket to fly from North Carolina to Bermuda last week, according to court documents.
Risher, according to the investigating postal inspector, had been placed on an ICE watch list during the probe and was being monitored for “scheduled travel outside of the country.”
The investigating postal inspector advised a federal magistrate judge that Risher was a flight risk and may have a bank account in Bermuda, which is located in the Atlantic Ocean about 640 miles from North Carolina. ICE is part of the U.S. Department of Homeland Security.
Risher had reason to believe investigators were closing in, according to the postal inspector’s affidavit.
Fleeced investors were demanding their money, according to the affidavit. Meanwhile, at least two Florida law firms were investigating claims against Risher on behalf of about 150 investors, according to other records.
BULLETIN: David A. Smith, who presided over a $220 million Forex fraud known as OLINT, has pleaded guilty in U.S. District Court for the Middle District of Florida.
Smith, 41, is a citizen of Jamaica. He “executed a Ponzi scheme to defraud over 6,000 investors located in the Middle District of Florida and elsewhere out of more than $220 million,” prosecutors said. “Smith led investors to believe that he was investing their money in foreign currency trading, earning 10 percent per month on average. In fact, he was not trading their funds.”
The case included a conspiracy with unnamed others to launder $128 million, prosecutors said.
“Considerable investigative support” was provided by the Financial Crimes Unit with the Royal Turks and Caicos Police Force, the Financial Services Commission in Jamaica, the Special Investigation and Prosecution Team in Turks and Caicos, and the governments of the United Kingdom, Turks and Caicos, and Jamaica, the FBI said today.
Lead agencies in the United States included U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the FBI and the IRS. Also assisting in the probe were the CFTC and the NFA.
Smith pleaded guilty to four counts of wire fraud, one count of conspiracy to commit money laundering and 18 counts of money laundering. He was the majority owner in a Lake Mary, Fla., firm known as I-Trade FX LLC, prosecutors said last year.
BULLETIN: A deputy U.S. marshal was shot and killed this morning while serving an arrest warrant in a drug case at a home in Elkins, W. Va., a law-enforcement official said.
Two other deputy marshals were wounded in the attack. Their conditions were not immediately known. Charles E. Smith, the alleged assailant, reportedly was killed by return fire from law enforcement.
Smith, 50, used a shotgun in his attack on the marshals, officials said.
The attack on the marshals in West Virginia followed by a day an attack on two U.S. Immigration and Customs Enforcement (ICE) agents in Mexico.
Special Agent Jaime Zapata was shot and killed in the attack, and a second ICE agent was wounded by gunfire. The agents were assigned to ICE’s attaché office in Mexico City, and were ambushed while driving between Monterrey, Mexico, and Mexico City, officials said.
ICE is an agency within the U.S. Department of Homeland Security (DHS).
“[A]ny act of violence against our ICE personnel — or any DHS personnel — is an attack against all those who serve our nation and put their lives at risk for our safety,” said DHS Secretary Janet Napolitano.
Elkins, a city of about 7,000 in North Central West Virginia, is about 163 miles south of Pittsburgh, Pa.
BULLETIN: An investigation by the U.S. Secret Service, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI) and the Miami Police Department has led to criminal charges against nine defendants in three Florida fraud schemes that allegedly were interconnected.
Seven of the defendants were indicted. Two others were charged via criminal information, and the investigation is ongoing. The probe demonstrates that, in an era of seemingly ceaseless white-collar crime, investigators are using leads uncovered in one case and following them to discover fraud schemes that perhaps would have gone undetected were it not for the discovery of an initial scheme.
Charged with conspiracy to commit bank fraud connected to a Ponzi scheme were Maria Baksh, 50, of Hollywood; Juan Cardenas, 48, of Miami; Gabriel Cifuentes, 63, of Hialeah; Maureen Cifuentes, 35; of Hialeah, Lucia Garcia, 58, of Pembroke Pines; Roberto Hernandez, 66, of Miami; Maribel Roman, 47, of Hialeah; Reinaldo Roman Jr., 39, of Hialeah; and Roberto Rodriguez, 43, of Miami.
The case is tied to the purported “jewelry” Ponzi scheme of Luis Felipe Perez, 38, of Fort Lauderdale. Lopez was charged both civilly (SEC) and criminally last year (Secret Service/ICE). He was sentenced to 10 years in federal prison after pleading guilty to securities fraud.
Investigators said he pocketed $6 million from his Ponzi scheme, which gathered $40 million. Investors were told they were financing his purported jewelry business and pawn shops in New York, authorities said.
Perez, investigators now say, recruited “many” of the new defendants and referred them to Berta Sanders, 61, of Miami Lakes. Sanders, a CPA, helped them secure $12 million in commercial lines of credit by preparing false tax returns and false income statements submitted to Wachovia Bank. Proceeds from the loans were diverted to the Perez Ponzi scheme.
“When Perez’s Ponzi scheme ultimately collapsed in May 2009, most of the fraudulent loans obtained from Wachovia defaulted,” prosecutors said, noting that the scheme cost Wachovia $10 million.
Sanders, who has pleaded guilty to conspiracy to commit bank fraud, is scheduled to be sentenced Feb. 22 by U.S. District Judge Paul C. Huck.
Viewed as a whole, the case featured the Perez Ponzi scheme and a related bank-fraud scheme over which Sanders allegedly presided for a 10 percent cut of the bogus loans she engineered, prosecutors said.
It also featured a conspiracy by which other defendants fleeced the bank by allowing Sanders to prepare fraudulent documents so they could get the money to plow into the Ponzi scheme, prosecutors said.
The investigation was undertaken by elements of the Financial Fraud Enforcement Task Force.
While investors were imagining “guaranteed annual returns of 18 percent to 120 percent through monthly interest payments,” the SEC said last year, Perez spent $3.2 million of their money on a home, $1 million on jewelry for himself and his wife, $400,000 to lease luxury cars, $300,000 on clothing for his wife, $300,000 for travel by private jet and $100,000 on artwork.
