URGENT >> BULLETIN >> MOVING: (17th update 4:02 p.m.) The SEC has filed a complaint against the ProfitableSunrise HYIP “program” in federal court in Atlanta. The story first was reported by CourthouseNewsService this morning.
At the same time, the PP Blog has learned that the agency applied for an emergency asset freeze, explaining that Profitable Sunrise was using a “mail drop” in England and that “Hungarian law enforcement authorities” had had frozen an account holding $11.3 million connected to the scheme as part of an “investigation of suspected money laundering.” U.S. District Judge Thomas W. Thrash Jr. granted the freeze, which applies to multiple bank accounts.
The Profitable Sunrise “referral program” operated as a “pyramid scheme,” the SEC said in its filings. Moreover, the SEC charged, Profitable Sunrise was conducting an “offering fraud” targeted at U.S. citizens and selling unregistered securities.
And people pushing the “program” for commissions may not even know who they’re working for, the SEC said.
“Profitable Sunrise operates for the benefit of unknown individuals and/or organizations doing businesses through companies formed in the Czech Republic and using bank accounts in the Czech Republic, Hungary, Latvia, and China, among other places,” the SEC alleged.
The complaint names Inter Reef Ltd. (DBA Profitable Sunrise) as defendants. Four relief defendants also are named:
Melland Company SRO, Color Shock SRO, Solutions Company SRO, and Fortuna-K SRO.
Absent from the list of defendants are both “Roman Novak” and “Radoslav Novak.” Although many Profitable Sunrise pitchmen have claimed that “Roman Novak” operates the company and that “Roman’s” brother “Radoslav” is its attorney, that information has not been confirmed.
“There is more than a slight possibility, as with many offering frauds, that the people described in the website, including the Novak brothers, do not exist,” the SEC said.
InterReef’s registered agent is based in Seychelles, an island chain in the western Indian Ocean, the SEC said.
“Tens of thousands of investors” may have invested “at least tens of millions of dollars in Profitable Sunrise,” the SEC said.
At least 34 U.S. states and provinces in Canada have issued Investor Alerts or cease-and-desist orders against Profitable Sunrise.
Assertions online that Profitable Sunrise “generates profits by making loans to businesses at higher rates” are “false,” the SEC charged.
The scheme spread in part through “social media” and “numerous promoters in the United States,” the SEC said in its complaint.
Incongruities dotted Profitable Sunrise, the SEC alleged.
Although Profitable Sunrise claimed it had been operating for six years, “the United Kingdom Companies House reports that Inter Reef has been in existence for only 19 months,” the SEC alleged.
Meanwhile, the SEC said, a YouTube promo for Profitable Sunrise positioned the “opportunity” as a “ministry” and included a discussion of why Profitable Sunrise “is not a Ponzi or pyramid scheme.”
See filings courtesy of the ASDUpdates Blog.