Tag: U.S. Magistrate Judge Franklin L. Noel

The investigation into the business practices of INetGlobal is turning into a legal slog reminiscent of the AdSurfDaily autosurf Ponzi scheme case.

In April, attorney Paul Engh filed a motion, saying he represented INetGlobal employees. Among other things, Engh sought an order that effectively would have blocked the U.S. Secret Service from interviewing the employees, as the agency’s Ponzi probe into the company moved forward.

Engh asserted that, by contacting employees on a cold-call basis, the government was  conducting the investigation “on some federalist notion of superiority or entitled sense of un-accountability.”

Prosecutors shot back in May, claiming INetGlobal was trying to derail the probe.

“Mr. Engh indicates that he ‘was hired’ to represent these employees, but refrains from indicating who it was who hired him,” prosecutors said. They added that “many of [Engh’s] purported clients seem to have never spoken with him.”

On May 28, U.S. Magistrate Judge Franklin L. Noel issued an order that required Engh to compile  “a complete list of the names of current and former Inter-Mark and iNetGlobal employees whom he purports to represent” and permitted the government to continue to contact both current and former employees.

“Before interviewing current and former employees of Inter-Mark and iNetGlobal, law enforcement shall first ask each individual if he or she is represented by an attorney,” Noel wrote in the order.

“If the individual responds that he or she is not represented by counsel, the interview may proceed,” Noel continued. “If, however, the individual indicates that he or she is represented by an attorney, law enforcement shall ask that individual for the name of his or her lawyer; at that time, questioning must immediately cease until such a time as the Government’s attorney obtains the consent of the lawyer named, whether Mr. Engh or otherwise, to communicate with the individual ‘about the subject of the representation.’”

Last week, Engh filed an “appeal from the order,” saying the judge is misinterpreting the law and that INetGlobal employees are entitled to protection from “isolated and surprise contact” by the government.

In February, the U.S. Secret Service said it believed INetGlobal operator Steve Renner was running an international Ponzi scheme through his affiliated companies that largely targeted Chinese members, including members from Mainland China. No criminal charges have been filed, but the government has seized about $26 million in the case, alleging wire fraud and money-laundering.

Prosecutors later filed filed a forfeiture complaint against a San Diego property allegedly acquired for $595,000 by Inter-Mark in August 2009 with criminal proceeds from a Ponzi, wire-fraud and money-laundering scheme.

Inter-Mark is INetGlobal’s Las Vegas-based parent company. INetGlobal operates from Minneapolis. Renner has denied wrongdoing.

In late April, Donald W.R. Allen II, a former Renner employee, said he’d been contacted by the Secret Service and was cooperating in the probe “100 percent.”

Allen complained that the company had blocked access to a public-affairs Blog he published and that he was being punished by the firm “for coming forward to answer ANY questions the Government has regarding iNetGlobal.”

Renner then got a restraining order against Allen, asserting that Allen tried to extort $100,000 from the company and had engaged in a pattern of abusive behavior, including raising “havoc” with employees, threatening “to destroy him and his family,” posting libelous and defamatory material on the Internet and engaging in verbal harassment.

Allen also was accused to taking pictures of Renner’s offices and employees without their consent.

“[Allen] has attempted to extort $100,000 from Petitioner’s businesses [and] if not paid will go to the FBI and Secret Service,” Renner asserted.

Allen denied Renner’s claims, saying Renner had made similar extortion claims against Steven Keough, INetGlobal’s former chief executive officer and potentially the government’s star witness in the case.

Ponzi litigation against assets tied to AdSurfDaily has been under way for nearly two years. The government has been awarded title to tens of millions of dollars seized in the ASD case, but ASD President Andy Bowdoin has filed an appeal.