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Tag: U.S. Secret Service

  • Zeek Receiver Solicits Victim Letters For Feb. 13 Sentencing Of Paul Burks

    Paul Burks will be sentenced Feb. 13 for his criminal role in Zeek Rewards, and the court-appointed receiver is soliciting letters from victims of the combined Ponzi- and pyramid scheme that affected hundreds of thousands of people.

    Zeek gathered hundreds of millions of dollars in a massive fraud scheme broken up by the SEC and the U.S. Secret Service in 2012.

    From receiver Kenneth D. Bell in an announcement dated Jan 19, 2017  (italics added):

    Victims of these offenses are entitled to be heard at sentencing. If a victim would like to have a letter describing the impact that ZeekRewards had on them submitted to the Court please send an email to HearingLetter@zeekrewardsreceivership.com. In particular, the Court would like to hear about any of the below circumstances:

    • Becoming insolvent;
    • Filing for bankruptcy under the Bankruptcy Code;
    • Suffering substantial loss of a retirement, education, or other savings or investment fund;
    • Making substantial changes to his or her employment, such as postponing his or her retirement plans;
    • Making substantial changes to his or her living arrangements, such as relocating to a less expensive home; and
    • Suffering substantial harm to his or her ability to obtain credit.

    I will be attending the hearings on behalf of all ZeekRewards victims and will present your letters to the Court.

    Bell also is special master of the criminal case against Burks.

    Burks, then 67, was indicted in 2014 on charges of wire and mail fraud, wire- and mail-fraud conspiracy and tax-fraud conspiracy. He was convicted by a jury in July 2016 at age 69 on all charges and potentially faces decades in federal prison.

    Two of Burks’ former Zeek colleagues — Dawn Wright-Olivares and her stepson Daniel Olivares — previously pleaded guilty and now are listed as federal prisoners.




  • EDITORIAL: Traffic Monsoon Apologist Goes All-Trump, Calls Receiver ‘Piggy’ And ‘Lying Cow’

    trafficmonsoonlogoUPDATED 3:51 P.M. EDT U.S.A. Peggy Hunt, a partner at Dorsey & Whitney in Salt Lake City, is the court-appointed receiver in the SEC’s Ponzi- and securities-fraud case against Traffic Monsoon and Charles David Scoville. Her impressive Dorsey bio says she has worked in the areas of bankruptcy and receivership law for more than 25 years and has served as “lead counsel to trustees and equity receivers appointed in some of the largest Ponzi and securities fraud cases in Utah.”

    In a section on some of her professional and civil involvement, the firm notes “Peggy is passionate about advancing the status of women and girls in Utah. She co-founded and currently chairs the Utah Women’s Giving Circle of the Community Foundation of Utah, is President of the Utah Women’s Forum, and is a former President of Women Lawyers of Utah.”

    But to Traffic Monsoon apologist Jose Nunes, Hunt, an officer of the court for close to three decades, is “Piggy,” a “[b . . . h” and a “Lying cow.”

    These descriptors naturally reminded us of some of the things Donald Trump has said about women. Remarkably, Nunes took to Facebook to disparage Hunt just this past weekend, the same weekend Trump again was battling assertions that he is a misogynist.

    Like Trump, Nunes may have a defective filter of some sort. The Traffic Monsoon huckster earlier came up with a “Revenue Shares Matter” campaign with a slogan of “RIOT.”

    Such cluelessness is hardly unprecedented in the so-called revshare sphere. AdSurfDaily was a purported “advertising” program similar to Traffic Monsoon.

    When the U.S. Secret Service raided ASD in 2008, operator Andy Bowdoin responded by comparing the agency to “Satan” and the 9/11 terrorists.

    Some ASDers circulated a “prayer” calling for prosecutors to be struck dead.

    When a receiver was appointed in the Zeek Ponzi case, Zeek apologists immediately launched verbal attacks against the receiver. One Zeeker suggested almost immediately that the receiver was guilty of a felony.

    It is all a steaming pile.




  • Private Attorneys Now Investigating Traffic Monsoon

    Charles Scoville: From YouTube.
    Charles Scoville: From YouTube.

    UPDATED 1:15 P.M. EDT U.S.A. It has happened in previous cases involving alleged violations of federal securities laws, and now it’s happening with Traffic Monsoon.

    “The Peiffer Rosca Wolf law firm is investigating Traffic Monsoon, LLC and Charles Scoville’s alleged Ponzi scheme on behalf of investors – whom Traffic Monsoon called ‘members,’” the firm said in a PR release today.

    How the firm would proceed is unclear. The announcement, however, potentially means Traffic Monsoon and Scoville will be facing litigation on a front separate from the Ponzi case filed by the SEC on July 26.

    After the 2008 AdSurfDaily Ponzi case was filed by the U.S. Secret Service, private attorneys filed a racketeering complaint against ASD operator Andy Bowdoin (and others) that helped out a second Ponzi scheme known as AdViewGlobal.

    Class-action attorneys also filed complaints in the TelexFree and Zeek Ponzi- and pyramid cases. Certain TelexFree-related actions alleged racketeering and referenced a “program” similar to Traffic Monsoon: My AdvertisingPays. There also were counts of fraud against TelexFree principals and some individual promoters.

    Even if they don’t result in a recovery, the actions filed by private individuals — as opposed to government plaintiffs — force defendants to confront litigation on multiple fronts. Defense costs may soar.

    “The Peiffer Rosca Wolf lawyers are preparing to take action and seek compensation on behalf of those who invested in the alleged Ponzi scheme orchestrated by Traffic Monsoon and Scoville,” the firm said.

    Traffic Monsoon gathered at least $207 million, according to the SEC.




  • Some Traffic Monsoon Promoters Are Zeek Clawback Defendants

    trafficmonsoonlogoUPDATED 11:51 A.M. EDT U.S.A. Zeek Rewards’ receiver Kenneth D. Bell had no comment this morning on reports that some Zeek clawback defendants also were participants in Traffic Monsoon, alleged last week by the SEC to have been a Ponzi scheme that had gathered at least $207 million.

    The reports appeared on RealScam.com.

    In March 2015, Bell sued Adrian Hibbert of the United Kingdom, alleging he had received more than $82,000 in Ponzi proceeds from Zeek. Zeek was charged with fraud by the SEC in August 2012.

    Another Zeek promoter listed by Bell as a winner in that scheme — Frank Calabro Jr. of the United States — also promoted Traffic Monsoon. Bell has expressed concern about online pitchmen moving from one fraud scheme to another.

    “Winnings” from MLM or direct-sales fraud schemes may be subject to return through clawback litigation.

    Both Zeek and Traffic Monsoon were purported “revenue sharing” programs. Paul Burks, the operator of Zeek Rewards, potentially faces a long prison term after his conviction earlier this month on multiple fraud counts.

    On July 26, the SEC civilly charged alleged Traffic Monsoon operator Charles Scoville of Utah with fraud. He has not been charged criminally and is believed to be residing overseas.

    Peggy Hunt of the Salt Lake City office of the Dorsey & Whitney law firm has been appointed receiver over Traffic Monsoon. Neither she nor the firm responded immediately this morning to a request for comment on the issue of common promoters between Traffic Monsoon and Zeek.

    The law firm confirmed to the PP Blog last week that there would be a receivership website for Traffic Monsoon, but the site was not yet live. The URL has not been released.

    Some Zeek clawback defendants also were participants in the AdSurfDaily Ponzi scheme. ASD was a “program” similar to Traffic Monsoon broken up by the U.S. Secret Service in 2008 in a highly publicized action.

    In U.S. domestic clawback litigation and in cases filed against non-U.S. residents, Bell has sued thousands of alleged Zeek winners for return of their gains and interest.

    Hunt’s plans with Traffic Monsoon are unclear.

    Hibbert appears also to have a page promoting the “My Advertising Pays” scheme.  MAPS, as it is known, has caught the attention of class-action attorneys involved in litigation against the TelexFree scheme broken up by the SEC and the U.S. Department of Homeland Security in 2014. The litigation also includes Zeek figures.

    TelexFree and Zeek may be the two largest combined Ponzi- and pyramid schemes in history, generating on the order of $4 billion in illicit, cross-border business and affecting hundreds and hundreds of thousands of people.

    The MAPS’ page attributed to Hibbert claims that MAPs operator Mike Deese “has been in the trenches with Zeek, ASD, Banners Broker, Ad Hit Profits, and many other advertising revenue sharing companies some of which continue to thrive and some that are not.”

    AdHitProfits also was a Scoville scheme. BannersBroker was a cross-border fraud that led to arrests in Canada.

    Separately, the Zeek page attributed to Hibbert claims, “If you want to make money and get paid everyday, you have to look at Zeek Rewards and understand how it works.”

    The SEC and federal prosecutors in the Western District of North Carolina said Zeek worked as a Ponzi scheme.

    Visit the TrafficMonsoon thread at RealScam.com.




  • Banners Broker Figure May Be Using ‘Sovereign Citizen’ Tactics On Canadian Court Officials

    From a purported "Cease and Desist" order by Banners Broker figure Rajiv Dixit.
    From a purported “Cease and Desist” order by Banners Broker figure Rajiv Dixit. Red highlights by PP Blog.

    Remember when Simon Stepsys — now with the cross-border MyAdvertisingPays scheme — was pushing the uber-bizarre Banners Broker cross-border scheme?

    New court filings in Canada by the receiver and liquidators in the Banners Broker case now estimate the total haul of the alleged double-your-money pyramid scam at more than $156 million. That’s up from an earlier estimate by Toronto police of $93 million. If the $156 million figure proves correct, it would make Banners Broker a bigger fraud than the $119 million AdSurfDaily Ponzi scheme broken up by the U.S. Secret Service in 2008.

    Like MAPS, which currently is operating, ASD and Banners Broker purported to be “advertising” companies. The ASD case threw down the gauntlet on securities companies trying to evade the law by pretending to be “advertising” firms.

    But the apparent upstaging of ASD by Banners Broker in dollar volume in the purported “advertising” trade is not the only news.

    Rajiv Dixit, one of the Banners Broker figures who helped put Stepsys in the position of getting rich from online fraud schemes, was arrested in Canada in December 2015.

    Filings April 4 by the receiver and liquidators in the case show that Dixit may be trying to use “sovereign citizen” courtroom tactics against them in Canadian proceedings. In the United States, AdSurfDaily figure Kenneth Wayne Leaming tried the same thing in that case.

    The Banners Broker receiver and liquidators have reported Dixit’s alleged activities to the court.

    Specifically, they say Dixit, who calls himself  “the man master rajiv of the family dixit” [sic] and his targets “interlopers,” is trying to foist a bogus “Cease and Desist” order on them that threatens a fine of $36 per second if they don’t back off from their judicially mandated duties. Dixit apparently wants to be paid in “silver dollars.”

    From the receiver/liquidators (italics added):

    The Cease and Desist Notices go on to state that if the Court Officers and their counsel do not cease and desist “all actions and claims against Mr. Rajiv Dixit and or Rajiv Dixit forthwith” Dixit will invoice them $47,304,000.00 silver dollars “[p]lus, for each second starting at 12:00:01 AM until the cease and desist is complied with, each Respondent will be charged an additional $36.000 per second.”

    Leaming, a “sovereign citizen” now in a U.S. federal prison in part for harassing officials who played a role in the ASD case, once sent a bill demanding payment of 208,000 ounces of “99.9% fine silver” from a judge.

    Court filings in other cross-border cases — including Zeek Rewards and DFRF Enterprises — have signaled that “sovereigns” also were involved in those schemes.

    With Banners Broker, Dixit called his affiliates “stupid,” according to the new filings by the receiver and liquidators.

    Visit the RealScam.com antiscam forum to read the filings.




  • URGENT >> BULLETIN >> MOVING: SEC Charges Alleged Zeek Promoter Trudy Gilmond

    breakingnews725URGENT >> BULLETIN >> MOVING: (5th Update 9:15 p.m. ET U.S.A.) The SEC has gone to federal court in the Western District of North Carolina and charged Zeek Rewards’ figure Trudy Gilmond with securities fraud, selling unregistered securities and failure to register as a broker-dealer.

    Among the allegations: Gilmond knew Zeek was under investigation in 2012 and cashed out without telling investors the “program’s” days likely were numbered. She also is accused of joining with Zeek’s principals in playing word games to sanitize the fraud.

    Gilmond, 45, of Vermont, is the first individual Zeek promoter charged in an alleged Ponzi- and pyramid scheme said to have gathered more than $850 million. She previously had been sued by court-appointed receiver Kenneth D. Bell as an alleged “winner” in the scheme.

    The Zeek receivership estate was awarded a judgment of more than $2.1 million against Gilmond, who previously promoted the collapsed Regenesis 2X2 scheme investigated by the U.S. Secret Service in 2009.

    In its complaint, the SEC said Gilmond is a “self-described network marketer who has participated in numerous MLM programs, operating under the trade name ‘Team Fired Up’ to attract followers and new recruits to join her ‘downline’  in those MLM programs (several of which ultimately collapsed in a fashion similar to ZeekRewards).”

    Zeek’s former COO Dawn Wright-Olivares, an SEC civil defendant who also has been charged criminally, recruited Gilmond, the SEC charged.

    Bell has raised the issue of MLMers or direct marketers moving from one fraud scheme to another. Gilmond now joins MLM promoter Matthew John Gagnon as a roving huckster pursued by both a receiver and the SEC. Gagnon also was pursued by criminal authorities.

    It perhaps never has been more dangerous for hucksters to move from scheme to scheme to scheme. Serial promoters Faith Sloan and Sann Rodrigues were charged by the SEC in the TelexFree Ponzi- and pyramid case and also are being pursued by class-action attorneys. Rodrigues, who once claimed God invented MLM and “binary,” also has been hit with criminal charges of immigration fraud.

    The SEC later tied Rodrigues to Daniel Fernandes Rojo Filho, an alleged fraudster from DFRF Enterprises who previously was tied to the infamous EMG/Finanzas Forex Ponzi scheme.

    With respect to Gilmond, the SEC described her as “one of the most successful and prolific promoters of ZeekRewards. From at least September 2011 until ZeekRewards was shut down in August 2012, Gilmond worked closely with the company founders and served as a senior ‘field liaison’ to promote the scheme, persuading scores of unsophisticated retail investors to buy ZeekRewards securities upon the promise of profit sharing. Gilmond reaped more than $1.7 million in transaction-based commissions and bogus profit-sharing for her recruiting efforts.”

    Some of the specific allegations against Gilmond in the SEC complaint (italics added/editing performed):

    Based on Gilmond’s efforts and the misstatements on the website, many of Gilmond’s team members ultimately purchased the ZeekRewards securities, earning Gilmond substantial commissions.

    As a field liaison, Gilmond had access to portions of ZeekRewards’ internal electronic investor database so that she could make adjustments to individual accounts to address her affiliates’ concerns or complaints. Among other things, Gilmond had the ability to adjust the number of “points” earned and could assign downline recruits to certain affiliates, both of which impacted the measure of profit sharing or commissions paid to those affiliates. In addition, Gilmond developed close ties with Wright-Olivares and other ZeekRewards insiders, which gave her unique access and insight not available to a typical investor.

    Having worked closely with the company founders and insiders to promote the scheme in her role as a senior field liaison, and given her prior experience with similar MLM programs that ultimately collapsed, Gilmond knew or should have known that the ZeekRewards scheme’s outsize returns (averaging 1.5% per day) were too good to be true and could not be sustained.

    Gilmond also helped conceal from investors and regulators the true nature of the ZeekRewards scheme. To that end, Wright-Olivares and others directed, and Gilmond helped implement, several superficial or nominal changes to certain ZeekRewards features. This included removing any references on the website to the terms “investment” and “ROI”; substituting a daily award percentage that in the aggregate approximated 125% every 90 days rather than “guaranteeing” a 125% return; and requiring investors to give away VIP bids to foster the illusion of contributing efforts to the enterprise.

    Aware that ZeekRewards was under investigation by several law enforcement agencies and that the business was in serious trouble in 2012, Gilmond and others withdrew substantial sums of money from the scheme before it was shut down, without advising investors that the scheme was likely to collapse.

    Read the SEC statement and complaint against Gilmond.

    NOTE: Our thanks to the ASD Updates Blog.

     

  • As Was Case With DFRF Enterprises And Rojo Filho, YouTube Promos Played Role In Criminal Ponzi Prosecution Of The Achieve Community’s Troy Barnes

    From a 2014 YouTube promo for The Achieve Community. Authorship is unclear.
    From a 2014 YouTube promo for The Achieve Community. Authorship is unclear.

    Still promoting your securities scam on YouTube?

    As the PP Blog reported on Oct. 3, YouTube promos for the alleged DFRF Enterprises’ Ponzi scheme were cited in two of three wire-fraud counts against accused operator Daniel Fernandes Rojo Filho. Filho, allegedly at the helm of a fraud that gathered tens of millions of dollars, has been in federal custody since his July 21 arrest in Boca Raton, Fla.

    The office of U.S. Attorney Carmen Ortiz of the District of Massachusetts is prosecuting the Filho criminal case, and the SEC simultaneously is prosecuting a civil case. The SEC has warned for years about securities scams spreading on social media.

    It turns out that YouTube videos also are playing a role in the criminal prosecution for wire fraud and wire-fraud conspiracy of Troy Barnes of The Achieve Community — or TAC. That prosecution was announced Nov. 3 by the office of U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina.

    Among other things, the indictment against Barnes alleges that “YouTube communications” played a role in duping Achieve participants and therefore constituted part of a wire-fraud conspiracy.

    Barnes, 53, resided in Riverview, Mich. He is free on bond, pending trial. In addition to the conspiracy count against him, Barnes also faces three counts of wire fraud for three transactions in 2014 involving the purchase of Achieve “positions” by victims, according to the indictment.

    “By the time the scheme collapsed in February 2015, the conspirators had defrauded over 10,000 investors in the Charlotte-area and worldwide, and owed victim-investors at least $51 million in purported investment returns, yet only had available approximately $2.6 million,” prosecutors said. “According to court records, over the course of the scheme, Barnes used over $140,000 of the victims’ money for his own enrichment.”

    Barnes co-conspirator was Kristi Johnson, 60, who resided in Aurora, Colo., prosecutors said. She has already pleaded guilty to wire-fraud conspiracy and is scheduled for sentencing  Nov. 19, before U.S. District Judge Max O. Cogburn Jr.

    Achieve offered a 700 percent ROI, according to the SEC and federal prosecutors. Barnes and Johnson also face a civil action by the SEC.

    In December 2014, the PP Blog reported that Achieve boosters parroting each other were circulating a YouTube promo that read, “We are not investing in a stock or buying shares in a company. We are using our God given universal right to spend our money the way we want. We choose not to sell out to the banking system for their tiny little 1% annual return.”

    Said Rose’s office on Tuesday: “According to court filings, as the scheme grew in size and scope, Barnes and his conspirators concealed the true nature of the scheme through multiple misrepresentations.  According to court records, when the conspirators became concerned that the use of the term ‘investment’ would draw scrutiny from regulators, they instructed victim-investors that ‘We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.'”

    Scammers from AdSurfDaily in 2008 tried the same tactic. It backfired, as it later would do with Achieve and other “programs,” including Zeek Rewards.

    Among other things, Achieve claimed $50 turned into $400. The U.S. Secret Service brought the Achieve criminal case and the ASD prosecution. ASD was a 1-percent-a-day “program.”

    The PP Blog’s Achieve coverage received a mention Nov. 3 in the Charlotte Observer. See the Blog’s archive of Achieve Community references.

    UPDATE 7:22 P.M. ET U.S.A. Scheduled for sentencing Nov. 19, Kristi Johnson today asked the court for a sentencing delay. Specifics were filed under seal. This is from a motion on the public record (italics added):

    1. Pursuant to Local Rule of Criminal Procedure 55.1, Ms. Johnson respectfully requests this Court to seal the Joint Motion to Continue Sentencing because it contains sensitive information regarding a criminal investigation.

    2. Public dissemination of the Joint Motion to Continue Sentencing may interfere with the administration of justice. Therefore, there is good cause for the Court to seal said motion.

    NOTE: Our thanks to the ASD Updates Blog.

     

  • In Separate Case, Zeek Figure Robert Craddock Sentenced To 6 Months In Federal Prison — Plus 15 Days At ‘Work Farm’ After Release

    Uncharged in the Zeek Rewards’ case, Robert Craddock nevertheless has received prison time after pleading guilty to swindling more than $117,000 from the Deepwater Horizon oil-spill fund.

    U.S. District Judge Gregory A. Presnell of the Middle District of Florida yesterday sentenced Craddock to two six-month terms in federal prison to be served concurrently, followed by three years’ supervised release. During his period of probation, Craddock additionally must serve 15 days at the “Brevard County Work Farm,” according to the docket of the case. (See 2013 News13 story on one of the purposes of the work farm.)

    Presnell also ordered Craddock to make restitution of $117,700.

    Craddock had asked for no jail time, BehindMLM.com reported Oct. 21.

    Craddock had a storied history in Zeek, including a bid to silence Zeek critic K. Chang just weeks before the SEC and U.S. Secret Service moved against Zeek in 2012. After that, the SEC accused Craddock of trying to stifle the court-appointed receiver in the Zeek case.

    At one point, Craddock participated in Zeek-related fundraising calls with Todd Disner, a figure in the AdSurfDaily Ponzi-scheme story. (Also see PP Blog guest column by Gregg Evans, from Aug. 29, 2012.)

    The Secret Service led the investigation of the Deepwater Horizon matter involving Craddock.

    NOTE: Our thanks to the ASD Updates Blog.

  • MyAdvertisingPays Pulls Out Of America, Leaving U.S. Affiliates In The Lurch; Cross-Border Scheme Alleges Libel, Defamation

    From PP Blog archives: On April 2, a video depicting President Obama as a fan of the MyAdvertisingPays “program” appeared on YouTube. An “Obama voice” was dubbed into the video, which also shows the Presidential Seal. Text below the video reads, “Mr. President speaks about the new advertising revolution.”
    From PP Blog archives: On April 2, a video depicting President Obama as a fan of the MyAdvertisingPays “program” appeared on YouTube. An “Obama voice” was dubbed into the video, which also shows the Presidential Seal. Text below the video reads, “Mr. President speaks about the new advertising revolution.”

    EDITORIAL: In April 2015, the PP Blog reported that a promo on YouTube put words in the mouth of President Obama and depicted him as a pitchman for MyAdvertisingPays, a cross-border scheme with  promoters in common with the alleged Zeek Rewards and TelexFree Ponzi- and pyramid schemes.

    “My AdvertisingPays pays its members every 20 minutes,” a mimicked voice of Obama said in the promo. “I highly recommend you to join MyAdvertisingPays.”

    Like many things in network marketing, this was reckless beyond measure. MAPS, as it is known, is reminiscent of the AdSurfDaily Ponzi scheme broken up by the U.S. Secret Service in 2008. ASD, sued by some of its own members amid allegations of racketeering and described by the Secret Service as a “criminal enterprise,” thought it prudent to trade on the name of President George W. Bush to drive dollars to its $119 million scam.

    It proved to be very imprudent for ASD to suggest a White House vetting and endorsement. The indictment against ASD operator Andy Bowdoin even referenced the bid to dupe members and prospects in this fashion . (Also see: “THE DAY ‘WINK-NOD’ DIED,” from the PP Blog on Dec. 2, 2010.)

    MAPS Suddenly Says It Is Withdrawing From United States

    After one or more MAPS’ promoters lifted footage of a Presidential address and used technology to put words in Obama’s mouth to help an MLM scheme spread its tentacles, it now has come to pass that MAPS — purportedly led by American Mike Deese of Mississippi via Anguilla, a British overseas territory — says it is pulling out of the United States.

    In an announcement dated yesterday and titled “THE MOST IMPORTANT UPDATE EVER RELEASED,” MAPS more than hinted it is not wanted in America: “We are going to focus on the place where we are wanted and are making huge strides,” MAPS said.

    That place is Europe, according to MAPS.

    “The decision comes on the heels of a declining marketplace in the US for our company.,” MAPS said. “It simply isn’t profitable for us to remain engaged there. Over 90% of our business already comes from Europe, while we are catering to the US members by operating in US currency. It doesn’t make good business sense to continue operating in a place and expending valuable resources in a market that’s steadily declining.”

    If MAPS is right — if it’s not wanted in America and if the U.S. market is steadily declining — we take this as good news that suggests MAPS perceives a serious threat from American law enforcement and class-action lawyers interested in suing under the federal RICO (racketeering) statute. Even so, it’s troubling that MAPS apparently sees a welcome mat for itself in Europe.

    About 50,000 Spaniards reportedly got sucked into the TelexFree scheme. TelexFree pain, in fact, lingers across Europe and the world. It is possible that it affected 1 million people or more. MAPS currently brags that it has “209805+ Users.”

    MAPS also is reminiscent of Banners Broker, another “advertising” program and a bizarre MLM “opportunity” ultimately described in Canada as a criminal enterprise. Among other things, Banners Broker thought it prudent to try to chill critics — like the Zeek Rewards, AdSurfDaily and AdViewGlobal schemes before it. (See Feb. 8, 2014, PP Blog story, “Banners Broker Cultists Rip Play From Zeek, AdSurfDaily, AdViewGlobal HYIP Scambook.”

    Like the other “programs,” MAPS now is planting the seed it is lining up people to sue.

    From the MAPS Oct. 15 announcement (italics added):

    On a different note, it has come to our attention that there exist multiple internet-based avenues being used for defamatory and libelous speech against MAP. Through our research, we have found many, if not all, of these claims to be without merit and simply an attempt by certain individuals to exploit the MAP name in order to heighten the popularity of their own product. MAP has served demand letters upon those individuals who engage in defamatory and slanderous rhetoric, and in anticipation of litigation, has prepared complaints against all such individuals. MAP would like to emphasize and reassure you that their decision to cease operations in the United States is in no way connected to the aforementioned defamation and libel claims.

     

     

     

  • SHADES OF ZEEK: Prospective Class-Action Defendant Tells Judge TelexFree Was Operating A Tax Scam

    newtelexfreelogoIn October 2014, federal prosecutors alleged that the Zeek Rewards MLM “program” shut down by the SEC two years earlier was in part a scam that caused “victim-investors to file inaccurate tax returns for phantom income they never actually received.”

    Now, a year later, a member of the TelexFree MLM scheme shut down by the SEC and other agencies last year is telling a federal judge that it appears TelexFree engaged in accounting fraud that caused him to pay taxes on income he never actually received.

    The claim was made in an Oct. 7 defense filing by Daniil Shoyfer, whom private plaintiffs want to make the lead defendant in a class-action case that effectively would sue Shoyfer and 20,000 other alleged TelexFree net winners believed to have collected money directly from recruits.

    Unlike Zeek’s Paul Burks and Dawn Wright-Olivares, alleged TelexFree operators James Merrill and Carlos Wanzeler have not been charged criminally with tax offenses. But the assertion by Shoyfer gives rise to questions about whether they and others could be as the federal probe of the enterprise continues. Merrill and Wanzeler currently face charges of wire fraud.

    Shoyfer, through attorneys from two Boston law firms, says U.S. District Judge Timothy S. Hillman should not permit the plaintiffs to amend the complaint to make him the class-representative. He further contends that “TelexFree has engaged in what appears to be fraudulent accounting practices intending to show that it paid Mr. Shoyfer in excess of $750,000 – however this is simply false.”

    “Although TelexFree credited Mr. Shoyfer with large amounts to his TelexFree account, he never withdrew or had access to the vast majority of these funds,” he contended through counsel.

    Shoyfer did not identify who might have helped TelexFree hatch a bogus accounting scheme. The SEC, in 2014, charged former TelexFree CFO Joseph H. Craft of Boonville, Ind., with securities fraud. Craft is an accountant. In its civil complaint, the SEC alleged Craft “has been the chief financial officer of other multi-level marketing companies” in addition to his work for TelexFree.

    From Shoyfer’s argument (italics added/light editing performed):

    Mr. Shoyfer worked with TelexFree from March of 2013 through April of 2014 . . . Over the course of those thirteen months, Mr. Shoyfer received a total of $122,000 from TelexFree . . . However, Shoyfer also spent many thousands of dollars in expenses in order to make this money from TelexFree . . . Mr. Shoyfer estimates that he paid nearly $60,000 to TelexFree in order to be a part of the MLM (including dozens of purchases of the $1,425 AdCentral Family packages, . . . plus other expenses . . . Contrary to the allegations in the proposed amended complaint, Shoyfer never earned $300,000 per week . . . Mr. Shoyfer cannot afford to be the class representative in this lawsuit: it would almost certainly bankrupt him (again), and it would work an immeasurable hardship on his wife, his daughter, his unborn daughter, his two sons, his father, his sister and others that depend on him.

    The argument describes Shoyfer as a teenager when he fled the Soviet Union for America years ago with his mother to escape “persecution because of their Jewish heritage.”

    Living in the United States, Shoyfer, now believed to be in his forties, eventually became a full-time occupational therapist who started a staffing business in that profession and also dabbled in MLM, according to the argument.

    Shoyfer asserts that he believed TelexFree to be legitimate.

    “Prior to TelexFree closing down and being charged with fraudulent acts, Mr. Shoyfer had no knowledge that TelexFree was engaged in any unlawful, unfair, or improper practices,” his lawyers argued. “To the contrary, Mr. Shoyfer relied upon the statements of TelexFree’s officers and legal representatives that TelexFree was a fully legitimate and legal enterprise . . . Mr. Shoyfer had no reason to believe otherwise (nor did he) until TelexFree and its officers were charged.”

    More from the argument (italics added/light editing performed):

    The defense costs Mr. Shoyfer would have to absorb as the named defendant for the putative defendant class would easily exceed the amounts he received from TelexFree and he, therefore, has no incentive to pay the defense costs of being the named defendant . . . If a defendant class is certified, Mr. Shoyfer intends to opt out of the class . . . Mr. Shoyfer has no interest in being lumped together with 20,000 or so other defendants, some of whom may have known more than he did about TelexFree’s activities and the purported pyramid scheme, and some of whom liked caused Mr. Shoyfer to suffer damages himself.

    The argument further contends Shoyfer is a good son and sibling who sends between $200 and $300 each month to both his father in Russia and his sister in Lithuania. He also has paid support of about $2,000 a month since 2008 for two children from his first marriage. Shoyfer now has a child with his second wife, with another child on the way.

    In June 2015, The PP Blog reported that Shoyfer also was promoting a scheme known as MyAdvertisingPays — or MAPS, for short. MAPS resembles the AdSurfDaily Ponzi scheme, a $119 million fraud uncovered by the U.S. Secret Service in 2008.

    Kenneth D. Bell, the Zeek receiver, has raised questions about MLMers moving from one fraud scheme to another.

    NOTE: Our thanks to the ASD Updates Blog.




     

  • IN MEMORY: Jerry S. Parr, USSS (Ret.), 1930-2015

    On Jan. 20, 1981, Ronald Reagan became President of the United States — America’s 40th. He almost died in an assassination attempt outside the Washington Hilton Hotel a little more than two months later, on March 30. It was the 69th day of his Presidency.

    Today America is remembering the life of Jerry S. Parr, the U.S. Secret Service agent credited with saving the President’s life. Parr died yesterday. He was 85.