BULLETIN: (4th update 9:11 p.m. ET U.S.A.) Alleged Zeek Rewards’ insider Darryle Douglas has been arrested in Riverside, Calif.
Court filings docketed March 7 in the SEC’s civil case against Zeek say Douglas, whose age was not listed, was arrested March 2 by the U.S. Marshals Service.
On Dec. 10, 2015, Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina ordered marshals to arrest Douglas for civil contempt of court. On Jan. 5, 2016, marshals said they had not located him and that Douglas was the subject of an ongoing investigation.
He is believed to reside in Orange County, Calif., an area close to Riverside in the southern part of the state.
Word of the arrest was received tonight. The warrant issued by Mullen in December specified that Douglas was to be brought to North Carolina. The PP Blog could not immediately determine this evening if a transport had taken place.
Douglas, who allegedly had access to Zeek’s database and did not return it as ordered, may be involved with a nascent scheme known as Auction Attics, the PP Blog reported last year. Others have said Auction Attics was morphing into something called Auction Addicts.
Zeek was a penny-auction fraud that gathered on the order of $900 million, the SEC has said.
Through defense counsel, TelexFree figure Sann Rodrigues said in court filings today that he wanted to avoid a flight on “Con Air” from Florida to Massachusetts to face a contempt proceeding in federal court there.
Rodrigues, 44, is being held in Florida’s Pinellas County Jail, according to the Pinellas County Sheriff’s Office. Rodrigues resides in Davenport, Fla.
U.S. District Judge Nathaniel M. Gorton of Massachusetts found Rodrigues in contempt last month and ordered him incarcerated on Jan. 15. The arrest was carried out yesterday by the Marshals, according to court filings.
Robert Eckard, the lawyer for Rodrigues, advised Gorton today that his client desires to remain in Florida pending further order of the court.
“The undersigned [Eckard] was advised by court personnel, before the start of yesterday’s hearing, that if the defendant was transported back to Boston for incarceration, it could take the United States Marshal’s service from one (1) to (3) months before the defendant would actually be back in Boston due [to] Federal Marshal service transportation routes, likely traversing the United States ending in California first before heading back to the east coast,” Eckard argued.
“If the defendant is transported back to Boston, this would cause significant problems for the undersigned to be able to timely and effectively communicate with the defendant either for this case or the unrelated pending criminal case in Boston once he is loaded onto ‘Con Air.’”
The SEC wants more information on whether Rodrigues will be held in Florida or Massachusetts, according to court filings.
“The Commission seek[s] clarification as to whether he needs to be transported to Massachusetts by the United States Marshals Service or whether he should remain incarcerated in Florida pending further order of this Court,” the SEC said. “If he needs to be detained in Massachusetts, the Commission seeks clarification as to whether he may travel on bond using a commercial carrier or whether he needs to be escorted by the U.S. Marshal[s] Service.”
UPDATE 6:14 P.M. ET JAN. 22 U.S.A. Judge Gorton has issued an order that will keep Rodrigues in a Florida jail until the contempt is purged or further notice of the court.
BULLETIN: (2nd Update 10:46 P.M. ET U.S.A.) TelexFree figure Sann Rodrigues has been ordered jailed.
The order, dated Jan. 15, was issued by U.S. District Judge Nathaniel M. Gorton of the District of Massachusetts. Gorton found Rodrigues in civil contempt last month for violating an asset freeze.
Rodrigues did not purge the contempt by Jan. 15, so Gorton ordered the U.S. Marshals Service to incarcerate him, according to the order. The huckster was charged by the SEC in April 2014 with fraud.
The SEC has described Rodrigues as a recidivist securities fraudster who claimed God invented MLM and “binary.” He also was charged criminally with immigration fraud. A separate judge in that case had threatened to revoke bail if Rodrigues did not comply with orders in the SEC’s civil case.
Whether Rodrigues now faces a bail-revocation hearing in the criminal case was not immediately clear.
TelexFree was a pyramid- and Ponzi scheme that generated about $3 billion in illicit economic activity, according to bankruptcy trustee Stephen B. Darr.
The PP Blog reported today that Rodrigues, who claimed to have made $3 million in TelexFree, was not listed among the scheme’s top winners in recent lawsuits filed by Darr. TelexFree had billed Rodrigues as its “TOP PROMOTER.”
Darryle Douglas, the alleged Zeek Rewards’ insider whose arrest was ordered last month, is still wanted by the U.S. Marshals Service.
“He is the subject of an ongoing investigation,” a spokesman for the Marshals Service in the Western District of North Carolina told the PP Blog moments ago. “We’re trying to locate him.”
The spokesman declined to say more.
Douglas resides in Orange County, Calif., according to court filings. The Marshals Service has nationwide jurisdiction. Whether Douglas remains in California or is elsewhere is unclear.
Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina ordered his arrest on Dec. 10.
Mullen specifically found that Douglas had violated a court order in a civil case and that the Zeek receivership had suffered harm as a result of the conduct of Douglas. Kenneth D. Bell is the receiver.
Douglas may have gravitated to an emerging scheme known as Auction Attics, with the aim of targeting Zeekers all over again. He has not complied with an order to surrender the Zeek database and other information.
Zeek was alleged by the SEC to have been a Ponzi- and pyramid scheme that gathered more than $850 million. Auction Attics has a similar theme.
URGENT >> BULLETIN >> MOVING: (3rd Update 6:25 p.m. ET U.S..) Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina has ordered the U.S. Marshals Service to arrest alleged Zeek Rewards’ insider Darryle Douglas for civil contempt of court.
The order was issued yesterday and included a directive for marshals to execute an arrest warrant and jail Douglas, a Californian. It was not immediately clear whether he has been taken into custody.
As the PP Blog reported on July 13, Douglas may be associated with an emerging scheme known as Auction Attics. Zeek receiver Kenneth D. Bell initially declined to comment on the nascent “program,” which almost certainly was aimed at former Zeekers and others.
After Mullen ordered Douglas to appear at a Dec. 3 hearing in North Carolina, Douglas failed to show, according to the order.
At the same time, Douglas has not complied with a Sept. 15 order that directed him to turn over the Zeek Rewards’ database, to produce certain financial records and to submit to a deposition by Bell, according to the order.
And, according to the order, Douglas has been obstructing the receiver. From the order (italics added):
Mr. Douglas failed to appear for the show-cause hearing. The Court took evidence at the hearing from the Receiver and from counsel for Mr. Douglas and is satisfied that Mr. Douglas received notice of the hearing well in advance of the hearing date. The Court finds that Mr. Douglas received notice of the September 15 Order and has violated that Order. In addition, the Court finds that the Receivership has suffered and will continue to suffer harm because of Mr. Douglas’ violation of the Order. Mr. Douglas was previously found liable for more than $2 million to the Receivership in the form of fraudulent transfers and prejudgment interest, and under the Agreed Order in this matter, these are Receivership Assets belonging to the Receivership Estate.
Mr. Douglas’s failure to return the database and these Receivership Assets not only harm the Receivership, but they also violate the Agreed Order in obstructing the Receiver’s efforts.
From a filing by the receiver in the Steve Chen/USFIA case.
“Initially, Defendant Steve Chen aka Li Chen (“Chen”) was not present at the Company Offices. Shortly after the Receiver arrived and the U.S. Marshals secured the Company Offices, Chen arrived. He was wearing a security guard uniform and carried a loaded gun, which was not concealed. The U.S. Marshals seized the weapon and also found $46,150 in cash in Chen’s car. The funds are being held by the Receiver.” — Thomas Seaman, receiver in the USFIA pyramid-scheme case filed by the SEC, Nov. 13, 2015
UPDATED 1:24 P.M. ET NOV. 21 U.S.A. Back in September, the SEC civilly charged Steve Chen, USFIA Inc. and other entities with operating a “worldwide pyramid scheme” from Arcadia in Greater Los Angeles. Chen since has invoked his Fifth Amendment right not to incriminate himself, hinting at an underlying criminal probe.
The amber-themed USFIA scheme pushed a purported cryptocurrency known as “gemcoins” and was alleged to have gathered on the order of $32 million. Thomas Seaman was appointed receiver.
Seaman now alleges in court filings that he entered with the U.S. Marshals Service the two-story office USFIA was using at 135 E. Live Oak [Ave.] in Arcadia to take “control and possession of the premises.” The Arcadia Police Department also assisted.
Chen was not initially present at the office when the takeover began, but up to 50 other individuals were, including 32 Chen employees, according to a Nov. 1 report by Seaman. The alleged scammer showed up “shortly” thereafter.
In this setting involving dozens of employees and office subtenants, federal agents, police officers, the receiver and presumably receivership staff, two very strange things happened.
Chen, according to the receiver, arrived “wearing a security guard uniform and carried a loaded gun, which was not concealed.”
And, according to Seaman, “The U.S. Marshals seized the weapon and also found $46,150 in cash in Chen’s car. The funds are being held by the Receiver.”
Ponzi and pyramid narratives often are strange to the point of being unnerving. With USFIA so far, we have the alleged presence of a purported financial titan hauling around a large wad of cash during an active investigation and, yes, allegedly appearing at headquarters with a “loaded gun” with dozens of people in the area.
Why Chen allegedly was wearing the uniform of a security guard was not explained in the report, but Seaman did note he also discovered “a weapons safe with ammunition, and owner’s manuals for two rifles (but not the [rifles] themselves)” in the company offices.
BehindMLM.com reported in September that some USFIA investors were worried about threats involving firearms.
Like Krista L. Freitag, the receiver in the WCM777 Ponzi- and pyramid scheme also operating from Greater Los Angeles and also targeting Asian population groups and other peoples who may lack command of English, Seaman suddenly finds himself in the real-estate business.
From the receiver’s report (italics added/formatting not precise/light editing performed):
2. Hills Garden Hotel
In the days following his appointment, the Receiver also took possession of the Hills Garden Hotel located on Ostrem Boulevard in Rancho Cucamonga. The 112 unit hotel was formerly a Days Inn, but had recently lost its flag with Days Inn. The Receiver is in financial control of the hotel and manages the hotel with the assistance of the on-site employees, many of whom had been employed by the hotel for many years prior to its purchase by the Receivership Entities on August 1, 2015. The Receiver confirmed that adequate insurance for the hotel is in place. It appears the hotel was going to be used by Defendants to conduct fundraising activities.
3. Other Real Properties
The Receiver also took possession of the following real properties:
A 36-unit apartment building located in Alhambra . . . A mansion located in Bradbury that was not used as a residence and appears to have been used for fundraising and investor relations. The home is apparently called the “Clubhouse.” . . . A single family home and a condominium, both located in Arcadia. Finally, the Receiver has also identified several other single family homes purchased with funds from the Receivership Entities and vested in other individuals or entities. The Receiver is further investigating and evaluating potential claims to recover these assets.
Meanwhile, the receiver says he has found two new large Mercedes vans, five diamonds located in Chen’s desk, a “bag of 1,160 Chinese New Year cards each containing a $5 bill” and “several designer (Chanel, Louis Vuitton, etc.) women’s bags, some of which appear to have authentic receipts. There is also an inventory of ornamental jewelry, none of which is characterized as either precious or semi-precious in nature.”
And what about gemcoins and claims of fabulous mineral wealth?
“Although the Receiver’s investigation is ongoing, at this point there is no indication of any legitimate Gemcoin or other viable business,” Seaman advised U.S. District Judge R. Gary Klausner. “There is also no indication the Receivership Entities had any significant sources of income other than monies raised from investors. Rather, based on documents located at the company headquarters and gathered from other sources, it does not appear that the assets described in online and written marketing materials actually exist. Instead of mines located around the world, millions of dollars in precious gems, and houses and cars available to be awarded to investors, the Receiver has found only costume jewelry and bins filled with rings of nominal value.”
Like alleged Ponzi-schemer Ming Xu at WCM777, Chen appears to have been involved in one way or another with dozens of business entities foreign and domestic.
Seaman has identified these to date, with his investigation ongoing:
Aborell Realty Advisors LLC
Aborell Realty Corporation
AFG Holding Company
Ahome Real Estate USA LLC
Alhambra Gardens LLC
Ally Investors LLC
Ameritra Inc.
Amkey Global
Ammine Inc.
Apollo Investors LP
Chenne Corporation
China-US Consultation Association
First Investment Holding Company
Great Wall Mountain LLC
Hills Garden Hotel Inc.
Hills Garden Hotel LLC
International Gemstone Mining Association
L’BE Group
LH Investment LLC
One World Currency Fund
Quail Ranch Golf Club LLC
Steamfont Capital Investment Group LLC
Steamfont Investment Group LLC
The New World Currency Fund
To Quang Duan
US Fovictor Jewel Investment LLC
US-China Consultation Association Liaison/Consulting Services
Weimar International Group Inc.
In California these days, Ponzi- and pyramid-schemers running offering frauds in which cash is siphoned and used to prop up a network of interrelated businesses may be targeting you if you have money or the dream of having money. And you may be particular target if you’re of Asian or Hispanic descent and if English is not your first language, making such schemes a form of affinity fraud.
The schemes may use shell companies and create a thicket of entities through which money may be laundered.
Federal Election Commission records list this donation from Daniel Fernandes Rojo Filho to the 2012 reelection campaign of President Obama. Filho’s employer is listed as Platinum Trade Bancorp. Red highlight/redaction by PP Blog.
In 2012, Daniel Fernandes Rojo Filho, purportedly an employee of an entity known as Platinum Trade Bancorp and using the address of a mansion in Boca Raton, Fla., made a $250 campaign contribution to Obama for America, according to Federal Election Commission records.
The PP Blog is declining to publish the address of the 6,742-square-foot (est.) waterfront property, which appears not to have been owned by Filho. Records suggest the six-bedroom home has at least 6,200 square feet with air-conditioning and a separate quarters for domestic staff.
It sold for $2.025 million in August 2013, but Filho was listed neither as buyer nor seller. If he ever lived in the mansion, it appears he was a tenant, not an owner.
The donation to President Obama’s reelection campaign in Filho’s name (and listing the address of the Boca Raton mansion) was recorded on Oct. 16, 2012, just three weeks before the Nov. 6 general election that returned Obama to the White House for four more years. Obama is a Democrat.
Filho, now implicated criminally and civilly by the FBI and the SEC in the alleged DFRF Enterprises Ponzi- and pyramid scheme that traded on an international gold-mining theme, is not a U.S. citizen, according to court filings. Rather, he is a citizen of Brazil.
Campaign donations by “foreign nationals” are illegal under U.S. law. There is an exception for U.S. residents who have a green card “indicating his or her lawful admittance for permanent residence in the United States,” according to the FEC.
Sann Rodrigues, a defendant in the epic TelexFree Ponzi- and pyramid case and an alleged Filho business associate, was arrested in May 2015 on a charge of immigration fraud. Like Filho, Rodrigues is a citizen of Brazil. Prosecutors said Rodrigues lied to get a green card.
Both men have listed addresses in Florida and Massachusetts and have been implicated in alleged frauds targeted at people who speak Portuguese or Spanish.
FEC records show that the donation in Filho’s name lists him as “Chairman of the Board” of Platinum Trade Bancorp. Where the purported business was based is unclear. No such company appears to exist in Florida.
The name of the purported firm, however, is similar to the name of Platinum Swiss Trust, a company the SEC said played a role in the DFRF fraud.
Platinum Swiss Trust, the SEC alleged, is a “purported Swiss private bank that is not actually authorized to conduct banking activities in Switzerland.” It purportedly is associated with Heriberto C. Perez Valdes, 46, of Miami. Valdes is a DFRF codefendant in the SEC’s civil case.
DFRF, the agency said, advanced a story that it has a $3.1 billion line of credit with Platinum Swiss Trust and used investors money to “leverage the credit line and generate a total return of 600%.”
Darren Covar, a Florida immigration attorney who appeared with Filho and others in a DFRF promo, is listed in FEC records as a contributor to Democratic causes. He has not been accused of wrongdoing.
FEC records lists Covar as having made $2,800 in 2012 contributions, though none to Obama. These contributions consisted of $300 to the Democratic Executive Committee of Florida, and $2,500 to the Kristen Jacobs for Congress campaign. Jacobs, a Democrat running for seat in the U.S. House, lost the race to Democrat Lois Frankel, the former mayor of West Palm Beach and the former minority leader of Florida’s state house.
Whether bail has been set for Filho is unclear. The U.S. Attorney’s office in Massachusetts did not return an inquiry on the matter.
Filho made an appearance in federal court in the Southern District of Florida yesterday. Miami defense attorney David A. Howard made a “temporary” appearance for him, according to the docket of the case.
Howard did not immediately return an inquiry for comment on Filho’s bail status.
Court records suggest he is in the custody of the U.S. Marshals Service and will be returned from Florida to face the DFRF-related criminal charge of wire fraud in federal court in Massachusetts.
Sann Rodrigues (Sanderley Rodrigues de Vasconcelos).
EDITOR’S NOTE ADDED 10:10 P.M. EDT U.S.A.: About 16 minutes after the post below was published, PP Blog reader “Diego” sent a note and a link to an AP report dated today. The report says Rodrigues was arrested today in Boston at the request of Brazilian authorities. Our original story is below. The URLs to the AP story and a translation to English by Google are in the first two comments below . . .
**______________**
TelexFree and IFreeX figure Sann Rodrigues was released from the custody of the U.S. Marshals Service after meeting bail conditions June 26, according to the docket of the immigration-fraud case filed against him last month by federal prosecutors in the District of Massachusetts.
A person in Florida posted $200,000 cash, as part of the arrangement, according to paperwork in the immigration case.
Rodrigues, a citizen of Brazil who also has lived in the United States, was charged on May 16 with fraud and misuse of visas, permits and other documents, the office of U.S. Attorney Carmen Ortiz said on May 26.
He was arrested at Newark International Airport on May 16, after returning from a trip to Israel that began May 3 at Logan Airport in Boston, according to documents
Though prosecutors said Rodrigues initially was released on tight conditions May 21 from detention in New Jersey, the docket of the immigration case in Massachusetts suggests he was detained again on June 8 after not meeting all the bail conditions.
Those apparently now have been met.
In addition to requiring secured bail and other measures such as passport and driver’s-license surrender, U.S. Magistrate Judge Judge Marianne B. Bowler of Massachusetts ordered Rodrigues placed on home incarceration with electronic monitoring, to comply with a civil injunction in the SEC case against him and not to break any local, state or federal law while on release.
No trial date on the immigration-related charges has been set.
WANTED: Travis Boys, age 33. Source: New Orleans Police Department.
UPDATED 3:38 P.M. EDT U.S.A. A manhunt is under way in Louisiana for Travis Boys, who allegedly shot and killed New Orleans police officer Daryle Holloway this morning.
In a statement, NOPD said Holloway was found shot in the front seat of a police SUV he was using to transport Boys to Orleans Parrish Prison. The vehicle had crashed into an electric pole near a Shell gas station in the area of of North Claiborne Ave. and Elysian Fields Ave.
“EMS discovered Officer Holloway in the front seat of the vehicle with an apparent gunshot wound to his body,” police said. “EMS transported the officer to the hospital, where he later died.”
Holloway, a father of three, was a 22-year veteran of the department, police said.
Holloway had been transporting Travis Boys, a 33-year-old black male, from NOPD to Orleans Parish Prison after Boys had been arrested for aggravated battery and outstanding warrants. Holloway was not the arresting officer. According to the initial investigation, Boys shot Officer Holloway from within the vehicle during the transport. After the vehicle crashed, Boys fled the scene. NOPD has identified Boys as the suspect for the murder of Officer Holloway, and a manhunt is underway for his arrest.
Officer Daryle Holloway. Source: New Orleans Police Department.
“This is a tragic and very sad day for our police department and for the city of New Orleans,” said NOPD Superintendent Michael Harrison. “Officer Holloway was a dedicated police officer who proudly served his community for more than 20 years and was a father of three. He will be deeply missed by all who knew him. We have identified the suspect as Travis Boys, and we are working with our regional, state and federal law enforcement partners to arrest him for this heinous crime. He will be caught and he will be brought to justice for the murder of Officer Holloway and for this assault on our entire community.”
Assisting in the manhunt are regional and state law enforcement agencies and the U.S. Marshals Service, police said.
A Utah man arrested in Panama on Ponzi charges, brought back to the United States to stand trial and later implicated in a murder-for-hire plot owned so many cars and motorcycles that the U.S. Marshal’s Service has been given permission to sell them prior to the trial.
Jeffrey Lane Mowen had acquired more than 200 vehicles through his Ponzi, real-estate and forex scheme, federal prosecutors said. The Salt Lake Tribune reported that the U.S. Marshal’s Service had been paying $20,000 a month just to store the seized assets and that a judge agreed that the storage costs were depleting the amount of money victims would receive.
Mowen was indicted under seal in February 2009. When the indictment was unsealed April 21, authorities said Mowen was “living outside of the United States.â€
That changed quickly. He was arrested just three days later in Panama “by Panamanian authorities in conjunction with the FBI Legal Attache office,†the FBI said.
Mowen was jailed in Davis County, Utah. In November, a new indictment was issued, charging him
Jeffrey Lane Mowen
with wire fraud, solicitation to commit a crime of violence, witness tampering and retaliating against a witness.
Prosecutors said Mowen, 47, of Lindon, Utah, hatched a plot while jailed to hire a fellow prisoner to kill four witnesses in the Ponzi scheme case upon the inmate’s release from prison.
The Utah vehicle auction is billed by Erkelens & Olson Auctioneers as the “Largest collection of Muscle, Collector & Exotic vehicles ever [offered] in Utah! Over 240 Units to be sold in 2 auctions.”
You’ve seen the ads or heard the pitches trying to persuade you to put money in “offshore” ventures such as the AdViewGlobal, AdGateWorld and MegaLido autosurfs. You’ve been told they were safe. You’ve been told the people who run them are out of the reach of U.S. securities regulators and law-enforcement agencies.
And you’ve been told your investment, which the surf purveyors call an “advertising” purchase, provides shelter from the FTC, the SEC and state attorneys general.
Don’t tell John and Marian Morgan of Florida that “offshore” means “safe” and that “offshore” provides a blanket of protection from law enforcement.
And don’t tell it to Jeffrey Lane Mowen, either.
John and Marian Morgan were charged by the SEC in June with running a prime-bank scheme. They skipped the country rather than appear for a hearing in July, first going to Europe and later to Sri Lanka.
Guess where they are now?
John and Marian Morgan are in separate cells in a U.S. jail. In addition to the SEC’s civil charges, they now face criminal charges after being indicted by a federal grand jury. They did not outmaneuver the SEC. They did not outmaneuver the U.S. Marshals Service. They did not outmaneuver the FBI. They did not outmaneuver the IRS. They did not outmaneuver Interpol.
Nor did John and Marian Morgan outmaneuver the government of Sri Lanka. They were arrested and jailed on the island, which is situated about 20 miles off the southern coast of India, in August. Sri Lanka deported them, and the United States brought them home earlier this month.
It’s big news in Sarasota — and it should be big news among the autosurf or forex/HYIP schemers who are telling you the United States is powerless to act against “offshore” enterprises or people inclined to start a get-rich-quick program and then scurry offshore one step ahead of what surf promoters derisively describe as the “sheriff” or “Big Brother.”
Do yourself a favor and read this story in the Sarasota Herald Tribune. Longtime opponents of the autosurf “industry” — in this upside-down world, the opponents are called “naysayers” and the Ponzi advocates are called “leaders” — will recognize the utter absurdity.
Sadly, though, most of the “leaders” likely will be too busy “leading ” the troops to even bigger and better catastrophes to take the time to read it.
Or they simply won’t care because leading people into catastrophes pays too well.
