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Tag: Utah fraud schemes

  • British Fraudster Running Investment Swindle And Conducting Pitchfests In Utah Sent Email To Undercover Agent, Feds Say; John S. Dudley Pleads Gulity To Wire Fraud

    ponzinews1John S. Dudley, a citizen of Great Britain, has pleaded guilty to wire fraud in federal court in Utah in an investment-fraud case that featured the presence of an undercover agent who’d received email from Dudley, the office of U.S. Attorney David B. Barlow said.

    The agent — from the Utah Department of Commerce’s Division of Securities — was described as “UA” in court papers, prosecutors said.

    As part of a plea agreement, Dudley will not contest a restitution order for more than $6.8 million, prosecutors said. When Dudley completes his sentence, prosecutors expect to deport him under the terms of the plea. Prosecutors have recommended a prison sentence of five years.

    Dudley was accused in 2011 of a Ponzi scheme that married multiple components, including pitchfests for “various investment programs, including a foreign exchange trading program, mining speculation, European and domestic stock options and commodity trading, and a human jetpack rocket suit,” prosecutors said at the time.

    The pitchfests were described as “bounce nights” or “Tashi group meetings,” prosecutors said at the time.

    From a statement by prosecutors on the Dudley guilty plea (italics added):

    The indictment alleged Dudley made a variety of representations to potential investors, including telling them they could expect monthly returns of 5-10 percent; that he had not suffered a trading loss since 1978; that investors’ funds would be used exclusively for investment purposes; that he had personally done very well in his investments and had never made less than 5 percent per month over the last 30 years; that investors’ money was backed by a “senior life settlement policy” that reduced or eliminated investors’ risk of loss; and that investing with him was an exclusive opportunity with only a limited number of investors allowed to invest with him at one time.

    As a part of the plea agreement reached with federal prosecutors, Dudley admitted he sent an e-mail to an individual, identified as U.A. in the plea agreement, with the subject line “Re: Castle Creek Bank Details.” He admitted that the e-mail was a part of his attempt to execute the fraud scheme by obtaining money under false representations. Investor U.A. is identified in the indictment as a Utah Department of Commerce’s Division of Securities investigator acting in an undercover capacity in the indictment.

  • Man Who Fled To Philippines After Bizop Scam Was Exposed By Postal Inspectors Sentenced To 125 Months In Federal Prison; Robert Nicol Bilked More Than $5 Million In Utah-Based Fraud Ventures

    A man who ran a Utah-based fraud scheme has been sentenced by a federal judge in Florida to 125 months behind bars.

    Robert Nicol initially fled to a remote section of the Philippines after the U.S. Postal Inspection Service executed a search warrant in an investigation of Gold Star Vending Inc. in 2007. But authorities tracked him down, and the Philippine government deported Nicol to the United States in 2010 to face justice, federal prosecutors said.

    “This defendant used his business opportunity scam to target those trying to make an honest living, and then fled to the Philippines when his fraud was discovered,” said Tony West, assistant Attorney General for the Civil Division of the U.S. Department of Justice. “As this stiff sentence demonstrates, we will see to it that fraudsters who cheat others to make a quick buck cannot escape justice.”

    In addition to sentencing Nicol to more than 10 years in prison, U.S. District Judge Patricia A. Seitz ordered him to pay more than $5.2 million in restitution to customers he scammed through Gold Star Vending and an entity known as Table Top Vending Inc.

    Customers believed they were buying everything they needed to run coin-operated games businesses successfully in places such as restaurants, but Nicol had lined up shills to sing the praises of the venture and purchasers lost millions of dollars, prosecutors said.

    “Fraudsters can run but they cannot hide,” said Henry Gutierrez, Miami’s U.S. Postal Inspector in charge. “Robert Nicol joins a growing number of business opportunity defendants the U.S. Postal Inspection Service, along with prosecutors, have brought to justice after being apprehended in other countries.”

    More than 100 bizop fraudsters in South Florida have been convicted and sentenced in recent years, noted U.S. Attorney Wifredo Ferrer, the Miami region’s top federal prosecutor.

    “Fraudulent telemarketers must realize that all financial fraud will be prosecuted vigorously,” Ferrer said.

    Utah also has been plagued by fraud schemes, perhaps especially investment-fraud and Ponzi schemes with a companion element of affinity fraud. The FBI said last year that various recent scams in the state had cost residents an estimated $1.4 billion and that the agency had identified at least 370 “potential perpetrators.”

    Two others implicated in Nicol’s Utah-based vending scam also were sentenced to hefty terms in federal prison.

    Seth Lehrenbaum, who provided shilling services for Nichol, received a sentence of 78 months. Meanwhile, Charles Nicol, Robert Nicol’s son and a pitchman for the scam, received a sentence of 41 months.

    In a separate case, the Salt Lake Tribune reported yesterday that Utah resident Wayne R. Ogden, who’d been charged, convicted,  jailed and paroled in a fraud scheme in the 1990s involving $7 million, now has been charged in an alleged $29 million caper.

  • BULLETIN: SEC Gains Asset Freeze, Seeks Shutdown Of Imperia Invest In Emergency Action; Program Pitched On Same Ponzi Forums Promoting MPB Today; Agency Says Imperia Defrauded Thousands Of Deaf Americans

    BULLETIN UPDATED 5:02 P.M. EDT (U.S.A.): The SEC has gone to federal court in Utah to halt the operations of Imperia Invest IBC, alleging a spectacular fraud that fleeced money from thousands of Americans with hearing impairments.

    Imperia was promoted from the MoneyMakerGroup Ponzi forum — one of the Ponzi forums promoting the MPB Today “grocery” MLM. Imperia also was the topic of discussion and defenses on TalkGold and ASAMonitor, two other forums that are pitching MPB Today.

    The SEC’s allegations against Imperia are stunning. More than 14,000 investors were defrauded worldwide, the agency said.

    Among the victims were thousands of deaf investors in the United States, the SEC said.

    Imperia gathered relatively small sums from thousands of people, the SEC charged, noting that “no evidence has been found that any of the investors have received a single payment.”

    “Imperia Invest IBC is a web-based entity that claimed, until late 2009, to be located in the Bahamas,” the SEC charged. “The Bahamian address listed by Imperia is fictitious. Imperia now claims to be located in Vanuatu. However, Imperia is not registered to do business in Vanuatu and the address listed on its website appears also to be fictitious. Neither Imperia nor its securities are registered with the Securities and Exchange Commission. Imperia is not licensed or registered with the Commission, with any state, or with any Self Regulatory Organization.”

    Categorically absurd representations of earnings and the program’s potential were made to investors, the SEC said.

    “Investors were promised eye-popping amounts of money in return for a simple $50 or $100 investment, and Imperia has made numerous excuses on its website about why these returns haven’t been paid,” said Ken Israel, director of the SEC’s Salt Lake Regional office.

    “The Imperia website shows an example of such earnings in which a $50 investment will return $134,000 to the investor in six months,” the SEC charged. At the same time, the agency said some investors were told that spectacular sums were due them for doing business with Imperia.

    “Imperia represented to one investor who invested $150.00 with Imperia that Imperia owed him $36,610,755.20 within a two year time frame,” the SEC charged. “Another individual’s account statement who invested $500 in July 2007 showed he is owed $43,907,652.20 as of May 2010.”

    It was not immediately clear how so many deaf investors became involved in Imperia. A federal judge has approved an asset freeze.

    Imperia called its product Traded Endowment Policies (TEP), which the SEC described as “the British term for viatical settlements.”

    “A TEP or viatical settlement involves the sale of an insurance policy by the policy owner before the policy matures, and policies are sold at a discount from face value in an amount greater than the current cash surrender value,” the SEC said.

    “There are at least 14,000 [Imperia] investors worldwide with a total investment exceeding $7 million,” the SEC said. “In the United States, there appear to be approximately 6,000 investors, most of whom belong the hearing impaired community, who have invested in excess of $4 million with Imperia.”

    Imperia used offshore payment processors such as “Liberty Reserve, located in Costa Rica; Perfect Money, located in Panama; and Procurrex, located in the British Virgin Islands,” the SEC charged. “Once Imperia received funds from Investors, it appears that Imperia then transferred amounts from these accounts to foreign bank accounts, including but not limited to accounts located in Cyprus and New Zealand.”

    Even as Imperia was ripping off investors, it also was infringing trademarks and the intellectual property of Visa, the credit-card service, the SEC charged..

    “Imperia also requires that investors purchase a Visa debit card to access their investment proceeds,” the SEC said. “Imperia charges customers a fee to purchase the Visa debit card ranging from $145 to $450.

    “Visa has not authorized Imperia to use its name or trademarks and has sent Imperia a cease-and-desist letter to halt its unauthorized use of the Visa name and logo,” the SEC said. “There is no evidence that any investor who has ordered a Visa debit card from Imperia has actually received such a card.”

    One poster on the MoneyMakerGroup forum advised prospects that he would keep an “open mind” about Imperia, according to web records.

    “Anyway, in the final analysis each person must make their own decision,” the poster said in 2007.

    While the MoneyMakerGroup poster was holding forth about keeping an “open mind,” Imperia was cloaking itself to siphon millions of dollars, according to web records and court records.

    “Imperia took proactive steps to conceal the identity of its control persons by using an anonymous browser to host its website, by communicating with all investors via email without disclosing the identity of any control persons and by establishing off-shore Paypal-style bank accounts to conceal the recipient of the investment proceeds,” the SEC charged.

    In July, the Financial Industry Regulatory Authority issued a warning about HYIP schemes pitched online. In May, the U.S. Postal Inspection Service accused an HYIP known as Pathway To Prosperity of defrauding more than 40,000 people in a scheme that took in about $70 million.

    Pathway To Prosperity also was promoted on the Ponzi and criminals’ forums. ASAMonitor, TalkGold and MoneyMakerGroup are specifically referenced in court filings in the Pathway to Prosperity case.

    MoneyMakerGroup is specifically referenced in court documents in the alleged Legisi HYIP and Ponzi scheme, a fraud that allegedly gathered more than $70 million.

    Read the SEC complaint against Imperia.