A “program” known as ViziNova was both a cross-border pyramid scheme and a reload scam aimed at victims of the WCM777 online debacle, the SEC says.
VizaNova, which gathered at least $5 million, invaded the Asian-American and Hispanic-American communities and was partly focused at Brazilians, the SEC said.
A PP Blog report in June 2014 suggested some ViziNova promoters also were involved in the epic TelexFree scam, which targeted speakers of Portuguese and Spanish. It is common for promoters of MLM-style scams to proceed from scheme to scheme to scheme.
Charged in the SEC’s ViziNova complaint were alleged operators Renato Rodriguez of Downey, Calif., and Gutemberg Dos Santos of Las Vegas. Both hucksters also promoted WCM777, the agency said.
“Rodriguez and Dos Santos previously were upper-tier salesmen in World Capital Market (“WCM”), the subject of a 2014 emergency civil injunctive action by the Commission,” the SEC said.
The complaint also positions ViziNova as a WCM777 reload scheme in which scammed WCM777 participants were scammed a second time by ViziNova. WCM777 was led by Ponzi/pyramid schemer “Phil” Ming Xu.
From the SEC’s ViziNova complaint (italics added/light editing performed):
Rodriguez and Dos Santos made false statements to investors. In March and April 2014, an investor received a phone call from Dos Santos, who told him that Rodriguez and Dos Santos had created Vizinova to make whole those who had invested in WCM. He told him that persons investing $3,200 in Vizinova would receive $32 per day until they had been credited $5,000.
In September 2014, the investor met with Dos Santos to voice his complaints that Vizinova offered no means to convert points to cash and that the few products available for purchase and resale did not work; Dos Santos reminded him that Vizinova was in a developmental stage and urged patience. That same investor made two trips to Guadalajara, Mexico in the fall of 2014, meeting with Rodriguez and Dos Santos each time in unsuccessful efforts to have his principal returned . . .
Another investor invested his money and the money of investors whom he recruited for WCM by providing the money to Rodriguez. In early 2014, he met with Rodriguez to demand the return of the amount invested. Rodriguez told him he was going to launch a new, then-unnamed multilevel marketing company in which investors would receive $5,000 for every $3,200 invested, and asked the investor to continue recruiting investors and to develop software for the new venture.
ViziNova worked in part because Rodriguez and Dos Santos “provided their subordinates with false information that described Vizinova as a legitimate multi-level marketing enterprise, and rewarded those subordinates with commissions for using those falsehoods to solicit new investors,” the SEC charged.
Setting up a bogus company in Mexico and other business entities to steer pyramid proceeds also was part of the scam, the SEC said.
“There is no U.S.-based entity called Vizinova,” the SEC charged. “Instead, Rodriguez and Dos Santos used Mexican nationals as nominees to incorporate an entity known as Vizinova S.A. de C.V, in Mexico in April 2014. Although Mexican law precluded them from incorporating the entity, Rodriguez and Dos Santos controlled Vizinova.”
The securities-fraud haul by Rodriguez included “almost $860,000 to purchase a house, $280,000 in withdrawals or checks to himself” and diversions of $150,000 to other entities he controlled,” the SEC charged.
Dos Santos, meanwhile, “spent approximately $200,000 in withdrawals or checks to himself, $200,000 on a Lamborghini, and $100,000 on mortgage payments,” the SEC charged.
In addition, “Rodriguez and Dos Santos also spent more than $1.2 million on credit and debit card bills in connection with running the enterprise,” the SEC charged.
Read the SEC complaint. The defendants agreed to settle for $1.4 million in disgorgement and $160,000 each in penalties, the SEC said. They neither admitted nor denied the allegations, and the settlement must be approved by a federal judge.
EDITOR’S NOTE: The story about Phil Ming Xu’s asserted cooperation with the government appears below the subhead. We’ll lead with the news of extension of the claims deadline for WCM777 victims.
If you’re a victim of the World Capital Market/WCM777 Ponzi- and pyramid scam shut down by the SEC last year, you now have until Dec. 24 — Christmas Eve — to file your claim.
The original claims deadline had been Nov. 9. On Oct. 26, court-appointed receiver Krista L. Freitag asked for an extension. U.S. District Judge John F. Walter of the Central District of California granted the request on the same day, extending the deadline until Dec. 24 and empowering the receiver to take other actions “to increase the number of investor claims submitted,” according to the court docket.
Among other things, the WCM777 case demonstrates the logistical challenges posed by cross-border fraud schemes operating over the Internet and involving cash transactions and potentially thousands of domestic and international bank accounts, including at least 100 linked to accused WCM777 Ponzi schemer Phil Ming Xu alone. Victims from multiple countries piled up potentially by the tens of thousands. Not all of them spoke the same language and, as in similar scams, not all of them paid WCM777 directly. Rather, they paid their “upline” sponsor, making the task of following the money and filing a claim more difficult. (See March 15, 2015, PP Blog story: “WCM777: More Theft And Money Laundering MLM-Style.”
Phil Ming Xu Says He Cooperated With Government
The opening of a Phil Ming Xu declaration originally filed under seal in April 2014. The seal was lifted at the request of an investor and after federal prosecutors did not object.
Messina is alleged to have come into possession of $5 million in proceeds from the WCM777 fraud, some of which allegedly was directed to International Market Ventures, a company operated by Gary Messina, his nephew. Gary Messina formerly worked as the chief information officer for the Bureau of Citizenship and Immigration Services, an arm of the U.S. Department of Homeland Security.
Messina has been ordered to return the $5 million, and IMV — the recipient of a transfer from Messina — is on the hook for $941,505 of it.
The effort to lift the seal on Ming Xu’s April 2014 filings began more than a year later, on Aug. 21, 2015, with a filing by an alleged victim of Xu from Daly City, Calif. This individual asserted he’d wired $2,000 to HSBC Bank in Hong Kong as his initial investment in WCM, a company that “represented itself as a leader in China based business and finance.”
Walter lifted the seal in an order dated Sept. 14, after the office of U.S. Attorney Eileen M. Decker of the Central District of California did not object. Precisely what Decker’s office is investigating remains unclear, although tens of millions of dollars are alleged to have flowed through WCM and related entities.
How dangerous is the world of HYIP Ponzis? Well, the Press Democrat of Santa Rosa, Calif., reported in January 2015 that investigators believe a murder might be tied to WCM777 and a companion scam known as Kingdom777.
Ming Xu also was concerned about being harmed, according to his now-unsealed motion from April 2014 to file under seal. He did not list a source of harm, but with so much money and so many tentacles involved, it could be anybody — from a person down the street to a person overseas.
From the motion (italics added):
“Xu is making this request because public disclosure of his cooperation with the government, including the U.S. Attorney’s Office for the Central District of California and the Securities and Exchange Commission, could jeopardize potential criminal investigations and the use of proactive covert operations. If Xu’s cooperation was disclosed, potential subjects of the ongoing investigations may take certain steps to hide evidence and proceeds of criminal activity, flee the jurisdiction or potentially harm Xu or his family.”
As for what Ming Xu said in his actual declaration docketed in May 2014 and now public . . .
If you were pushing WCM777 during hotel pitchfests and in your church and continue to have doubt WCM777 was a Ponzi scheme, put those doubts to rest. The huckster conceded the Ponzi in his declaration, while alleging Messina also knew it was a Ponzi.
From the declaration (italics added):
“Mr. Messina knew the $5 million transferred to him was proceeds of an illegal Ponzi scheme and is being investigated by SEC and knew I was sending him the money to avoid detection and seizure of the funds by the federal government. I transferred the $5 million to Mr. Messina’s IOLTA account because he warned me the government would seize the money as illegal proceeds of the Ponzi scheme. Mr. Messina told me on several occasions that WCM had serious criminal and civil liability issues, and that he expected federal agents to show up at our office in Pasadena, execute a search warrant, seize all the computers, and other business records of WCM’s business operations.”
Ming Xu continued (italics added):
On or about February 27, 2014, Mr. Messina sent me a document to sign stating that the transfer of the $5 million was a non-recourse loan payable in full in five years. I executed the loan document after being advised to do so by Mr. Messina. The money I transferred to Mr. Messina was not truly a loan and the two-line document purporting to be a loan agreement is false.
On or about March 20, 2014, I wrote and sent a letter to Mr. Messina, wherein I demanded return of the $5 million transferred from the ToPacific bank account into Mr. Messina’s IOLTA account for SEC settlement. Mr. Messina refused to return the monies.
I have subsequently learned that Mr. Messina has disbursed some of these funds to an entity, International Marketing Ventures, a company that is controlled and operated by Gary Messina, his nephew.
I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.
It is unclear if Ming Xu currently is cooperating with the government and how much his asserted cooperation in April 2014 helped in pursuit of the WCM777 case or other cases.
What is clear is that the WCM777 story has included a series of bizarre developments — everything from a pledge of love for the people of Peru written on the letterhead of a suspended California company and a recitation of the importance of “blood moons” to the appearance of a “Jesus sword” and the apparent involvement of a former CIA operative.
Strangest of all, though, may be the Ming Xu claim he was taking over a company linked to the film “Innocence of Muslims” as part of a bid to “transform nations” and “train a group of Josephs to bless the world.”
Who constituted the “Josephs” and how they would “bless the world” always has been unclear, as has the nature of the purported “training” they required. This particular segment of the WCM777 narrative is deeply strange in other ways. For example, a former reputed member of the Mafia named “Dr. Bruno Caporrimo” is part of the narrative and a purported Ming Xu associate.
So is a purported California university known as the “Joseph Global Institute” of which Ming Xu purportedly was “dean” and Caporrimo reportedly was “chancellor.” As the PP Blog reported last year, one promo for the institute appeared to rip off video footage from Liberty University, a well-known Christian college in Virginia.
‘Joseph Global Institute’ Narrative Evolves
Something that curiously calls itself “Southwestern University” even though it uses the four-letter acronym SWIU (at www.swiu.edu) now claims online that it has absorbed the Joseph Global Institute. Best we can tell, SWIU stands for “Spirituality Wisdom Inspiration Understanding” and appears not to be affiliated with Southwestern University of Georgetown, Texas, which uses www.southwestern.edu. SWIU purports to have a campus at 4040 Saltburn Drive in Georgetown, but the city does not have such a street, the Georgetown Police Department told the PP Blog today. (The city of Plano, nearly three hours from Georgetown, has a Saltburn Drive.)
The Joseph Global Institute previously planted the seed it was affiliated with Harvard.
Some people have blamed the “Innocence of Muslims” film for the Sept. 11, 2012, attack on U.S. outposts in Bengazi, Libya, that killed Ambassador Chris Stevens and three other Americans. The issue has dogged former Secretary of State Hillary Clinton, now a Democratic candidate for President of the United States.
The WCM777 Ponzi-scheme story has proceeded through all sorts of tortured twists and turns, creating nonfiction that reads like fiction. Although it not unusual for bizarre narratives to accompany Ponzi schemes, the narratives surrounding WCM777 are particulary bizarre — and Americans should be concerned and follow developments closely.
Take note: Victims of the WCM777 MLM “program” must file a claim by Monday, Nov. 9, a little more than three weeks from today.
The website of WCM777 receiver Krista L. Freitag now includes a countdown timer to the filing deadline. At the time of this post, only 23 days remain to file claims.
Among the defendant companies, affiliated entities or receivership entities are World Capital Market, Inc.; WCM777, Inc.; WCM777 Ltd (d/b/a WCM777 Enterprises, Inc.); Kingdom Capital Market, LLC; Manna Holding Group, LLC; Manna Source International, Inc.; WCM Resources, Inc.; To Pacific, Inc.; and ToPacific, Inc.
See the PP Blog’s Tag archives on story references to WCM777 here.
“Many investors gave cash to the company and to their leaders (or upline sponsors) who then deposited the cash along with other investor funds.” — Krista L. Freitag, court-appointed receiver in the WCM777 pyramid- and Ponzi case, Feb. 27, 2015
EDITOR’S NOTE: Tens of millions of dollars allegedly flowed through WCM777 and related entities. At the bottom of this column, you’re going to read that an apparent apologist for accused Ponzi schemer Ming Xu is claiming the U.S. Securities and Exchange Commission is violating his human rights. Fair warning: You might want to have your vomit bucket at the ready . . .
UPDATED 10:31 A.M. ET U.S.A. Here’s how you rob the Christians in an offering fraud that involves the sale of tens of millions of dollars in unregistered securities across state and national borders: You start an MLM “program,” get it in the churches and on YouTube, permit “leaders” to gather money from their enraptured audiences and put out the word that $1,999 returns $3,200 in 100 days.
It might help if you have a storefront in, say, Peru. It also might help if you have, say, promoters willing to tout the “program” in webinars and from a “function room in a hotel in Massachusetts.” At the same time, it might help if you have promoters willing to steal the intellectual property of the “Rocky” movie franchise to drive dollars into any of the “77 domestic and 23 foreign bank accounts” you’re using. (The bank-account information is sourced from a forensic accounting by Krista L. Freitag, the court-appointed receiver in the WCM777 case. It was filed Feb. 27 in U.S. District Court for the Central District of California and is the basis for part of this PP Blog column. Links to exhibits are provided near the bottom of the column.)
Along the way, it might help if you follow the standard blueprint from one MLM scam after another that calls for you to disarm skeptics by dropping the names of plenty of famous businesses, perhaps with the aim of hoping your “leaders” will follow your lead and do the same thing. Damn! Wouldn’t you know it! They did exactly that! (See link in first paragraph of this story.)
It might be particularly helpful if you make a calculation that a bank such as HSBC in Hong Kong might frown upon a subpoena issued in the United States and clam up when it comes to assisting the receiver appointed to your case after the SEC moves in.
“To date, HSBC-Hong Kong has not responded to the Receiver’s requests/subpoena,” Freitag advised U.S. District Judge John F. Walter in her forensic accounting.
Or maybe HSBC doesn’t want to open a new can of worms after it settled with the Justice Department in December 2012 by forfeiting $1.256 billion and entering into a deferred-prosecution agreement after it was accused of “willfully failing to maintain an effective anti-money laundering (AML) program, willfully failing to conduct due diligence on its foreign correspondent affiliates, violating [the International Emergency Economic Powers Act] and violating [the Trading with the Enemy Act].”
“Vincent,” the alleged Ming Xu email to Messina began. “We have lots of members for our social capital company, WCM777 in Brazil. They paid us in Brazil. How to move the money legally from Brazil to USA or Hong Kong?”
Whether Messina provided guidance on how to get money out of Brazil and move it to the United States and Hong Kong is unclear. Ming Xu’s email, however, suggests that WCM affiliates in Brazil, like their U.S. counterparts, also were collecting money directly from MLM recruits and that Ming Xu needed to find a way to get the cash under his control.
Freitag says she has traced $5 million in Ming Xu proceeds to Messina, and Walter ordered Messina to return it. Only $2.133 million has been returned, Freitag says.
Messina wasn’t just a lawyer; he was a WCM777 “insider,” the receiver alleges.
Because Freitag has access to certain WCM777 banking records, she has been able to determine that “$29,404,996” went to HSBC in Hong Kong “for 7 Receivership Entities and 1 individual.”
Ming Xu used numerous companies as part of his overall money-moving scheme, the receiver contends.
Here’s how she describes one transaction that occurred after WCM777 got in trouble with the Massachusetts Securities Division in late 2013 and agreed to return money to the fleeced investors in that state (italics added):
“ . . . rescission payments were made to WCM777 investors in accordance with the Consent Order issued by the Massachusetts Securities Division. Bank records show that funds from ToPacific bank accounts were used to make payments to the Massachusetts WCM777 investors.”
“ToPacific” was a company in the WCM777 fold.
How circuitous were things within WCM777 (italics added):
“the payment methods with which investors payments were made varied from third-party electronic disbursement (primarily Global Payout) to physical checks written directly on Receivership Entity bank accounts. There does not appear to be any consistency in the bank accounts from which investor checkswere written. Rather, bank records indicate payments were made to investors from whichever accounts happen[ed] to have funds available at the time the payments were made.”
The FBI has been warning about shell companies involved in crime and how banks and payment processors can get caught up in it since at least 2010. Even so, the WCM777 entities somehow managed to open at least 100 bank accounts while also gaining access to bank wires and at least one payment processor.
Here’s how Freitag describes the overall scheme (italics added/light editing performed):
“The Receivership Entities’ primary source of income was investor deposits, which was also the primary source of virtually all funds distributed to the investors; [t]he vast majority of the Receivership Entities’ business activities revolved around raising and distributing investor funds; [i]nvestor funds were so materially commingled between and among the Receivership Entities that the entities operated as a unitary enterprise, rather than as separate entities.”
And while WCM777 recruits thought they were joining an MLM “program,” their money financed the purchases of two golf courses in California, several pieces of real estate, including one with live koi, and a series of purported investments elsewhere. These allegedly included jewelry or gold, oil and gas — and even piles of “jeans, shorts, pants and leggings” stored by Ming Xu’s sister.
Ming Xu’s Mom allegedly got a new house, but not until after the cash to purchase the home had passed through bank accounts linked to Ming Xu and his sister.
The Ming Xu Twitter account, which once claimed all would become known when “blood moons” appeared in the sky and published a picture of Apple co-founder Steve Wozniak, whom Ming Xu had corralled at a networking event in California, now includes a link to a website that claims (italics added):
U.S. Securities and Exchange Commission was wrong to close down the company and confiscate about $43M cash asset and oil reserve asset of $50M. It has violated the company’s legal interests and human rights of Ming Xu.
Read the exhibits from Freitag’s forensic accounting. (Here’s one; here’s the other.)
As noted above, you might want to have a vomit bucket handy if you’re contemplating how certain MLM “programs” are operating these days in the era of epic white-collar fraud and while terrorism, beheadings and attacks on police are occurring.
UPDATE: A federal judge has ordered the receiver in the WCM777 case to list for sale three properties linked to the alleged MLM pyramid scheme.
U.S. District Judge Christina A. Snyder is presiding over the SEC’s civil case filed in March. Receiver Krista L. Freitag asked for the authority to sell the properties last month. Snyder granted the authority June 9. The properties are single-family residential homes in Lake Elsinore, Monrovia and Walnut, Calif.
Snyder also authorized Freitag to “close frozen bank accounts of the Receivership Entities and have the balances wired to receivership bank accounts.”
Since the filing of the original SEC pyramid action, the agency has upped the dollar volume of the alleged scam from about $65 million to about $80 million. In April, Freitag said she’d put an end to a nascent MLM scheme with ties to WCM777.
WCM777 purportedly was part of an entity known as World Capital Market.
In an amended complaint last month, the agency accused Vincent Messina, an attorney linked to alleged WCM operator Phil Ming Xu, of self-dealing and distributing millions of dollars in funds linked to WCM777 to other entities.
Certain money disbursed by Messina ended up with “persons in Canada, Abu Dhabi, and to an entity in Hong Kong,” the SEC alleged.
Snyder imposed an asset freeze on Messina last month.
Some promoters of TelexFree, an MLM “program” and alleged Ponzi- and pyramid fraud that gathered more than $1.2 billion, also promoted WCM777.
Like TelexFree, WCM777 was the subject of a state-level securities investigation in Massachusetts. Regulators said both programs targeted individuals who speak Spanish or Portuguese. WCM777 also targeted the Asian community.
Like other HYIP scams, WCM777 traded on the names of famous companies.
The WCM777 and TelexFree “programs” have led to questions about whether MLMers were getting sucked into companies that have cult-like qualities.
BULLETIN: (1st update 7:58 p.m. EDT U.S.A.) The SEC has filed an amended complaint in the alleged WCM777 pyramid- and Ponzi scheme. The complaint ups the WCM777 haul from roughly $65 million to more than $80 million and names an “inactive” Florida attorney a relief defendant as the alleged recipient and distributor of fraud proceeds.
Vincent Messina, the attorney, allegedly is associated with an entity known as International Market Ventures (IMV) “based in Washington, D.C.” with asserted offices in Los Angeles, Shanghai, Hong Kong, United Arab Emirates, Nigeria, Congo, Benin, and South Africa, the SEC says.
Messina also was the asserted “general counsel” of World Capital Market, a company associated with WCM777 and accused Ponzi schemer Ming Xu, the SEC said. An affidavit included with the SEC’s amended complaint includes a copy of an email allegedly sent by Ming Xu to Messina inquiring about how to get WCM777 money out of Brazil.
“Vincent,” the alleged Ming Xu email to Messina began. “We have lots of members for our social capital company, WCM777 in Brazil. They paid us in Brazil. How to move the money legally from Brazil to USA or Hong Kong?”
Whether Messina replied to the email was not immediately clear.
“In June 2013, Messina was named as in-house legal counsel of ‘World Capital Market,'” the SEC said in its complaint. “Messina is also the general counsel of Relief Defendant IMV. Messina holds himself out as duly licensed to practice law in the State of Florida; however, the Florida Bar Internet site lists Messina as ‘inactive’ and ‘Not eligible to practice in Florida.’ Messina has an office in Los Angeles, California.”
Messina appears also not to be licensed in California, the SEC said in the affidavit. WCM777 operated from California.
WCM777, the SEC said, “is the umbrella name that Defendants use for their multilevel marketing scheme.”
The SEC initially sued WCM777 in March 2014. The “program” is known to have promoters in common with TelexFree, which the SEC sued on April 15. Both complaints were filed on an emergency basis. Both “programs” allegedly targeted speakers of Portuguese and Spanish, with WCM777 also allegedly targeting speakers of Chinese.
Portuguese is the main language spoken in Brazil.
On April 10, the PP Blog reported that the court-appointed receiver in the WCM777 case advised a federal judge that she’d halted an apparent WCM777 reload scheme and that Ming Xu, also known as Phil Ming Xu, transferred $5 million to Messina as part of a “sham” designed to stash cash.
Messina, the SEC alleged in the May 7 amended complaint, “disbursed those funds to, among others, IMV and possibly entities affiliated with IMV.”
Certain money disbursed by Messina ended up with “persons in Canada, Abu Dhabi, and to an entity in Hong Kong,” the SEC alleged.
BULLETIN: What happens if it is alleged by law enforcement that you’re a Ponzi schemer/affinity fraudster, a business associate of a Ponzi schemer/affinity fraudster or a vendor of a Ponzi schemer/affinity fraudster?
A federal judge has frozen at least 54 bank or financial accounts the SEC has linked to WCM777, an alleged $65 million Ponzi- and pyramid scheme with domestic and offshore conduits.
Accused operator Ming Xu had “authority” over at least 16 of the accounts, according to court filings. Who controlled the others was not immediately clear.
WCM777 was accused of targeting the Asian and Latino communities in a ribald HYIP scam that in part traded on the names of famous businesses, perhaps particularly companies in the hospitality industry. Many immigrants work in the hospitality trades.
The order has a provision that covers “all accounts at any bank, financial institution or brokerage firm, or third-payment payment processor, all certificates of deposit, and other funds or assets.”
Banks/vendors expressly covered by the order include Bank of America, Wells Fargo, Merrill Lynch, Comerica, HSBC, E*Trade, JPMorgan Chase, Citibank, East West Bank and American Continental.
It also became known today that Krista L. Freitag of E3 Realty Advisors of Los Angeles has been appointed receiver. The receiver already has taken control of at least two websites linked to WCM777, including WCM777.com.
U.S. District Judge Christina A. Snyder of the Central District of California has approved the asset freeze and the appointment of Freitag, a forensic accountant.
Snyder has authorized the SEC to conduct depositions “on two days’ notice” and cleared the agency to perform depositions even on Saturdays.
“Depositions may be taken Monday through Saturday,” according to the order.
And Snyder also authorized the SEC to bypass subpoenas and serve “a deposition notice by facsimile, hand or overnight courier” upon “agents, servants, promoters, employees, brokers, associates, and any person who transferred money to or received money from the bank accounts . . .”
Meanwhile, Snyder ordered Freitag “to conduct such investigation and discovery as may be necessary to locate and account for all of the assets of or managed by Defendants World Capital Market Inc., WCM777 Inc., WCM777 Ltd. d/b/a WCM777 Enterprises, Inc., and Relief Defendants Kingdom Capital Market, LLC; Manna Holding Group, LLC; Manna Source International, Inc.; WCM Resources, Inc., and their subsidiaries and affiliates, and to engage and employ attorneys, accountants and other persons to assist in such investigation and discovery.”
The judge also ordered the defendants and relief defendants not to destroy records and to repatriate assets.
This image of a golden pyramid appeared on the Global-Unity website last month.
UPDATED 6:42 P.M. EDT (U.S.A.) The Autorité des marchés financiers (AMF) has issued an Investor Alert on the WCM777 MLM “program.”
Quebec’s securities regulator now joins at least nine other jurisdictions issuing Investor Alerts or filing actions against WCM777, also known as World Capital Market, Kingdom777 and Global-Unity. Global-Unity recently used a photo of a golden pyramid on its website, a possible taunt at regulators.
“World Capital Market, Inc., WCM777, Inc. and WCM777 Limited and their officers and representatives, Ming Xu, Zhi Liu and Harold Zapata, are not registered with the AMF and did not obtain a receipt for a prospectus from the AMF,” AMF said. “Consequently, any solicitation of Québec investors by these firms and individuals could violate the Québec Securities Act.”
AMF said the “scheme originated in California and is offered mainly as part of hotel presentations and through Internet ads and webinars.”
Quebec’s move brings the unofficial total of jurisdictions or regulatory agencies filing actions or issuing Investor Alerts against WCM777 to 10. The others are the country of Peru, the country of Colombia, the state of Massachusetts, the state of California, the state of Colorado, the state of Louisiana, the state of New Hampshire, the state of Alaska, the province of New Brunswick.
The WCM777 “program,” also known as Kingdom777 and Global-Unity, is now the subject of an Investor Alert in Alaska.
Alaska’s move brings the unofficial total of jurisdictions or regulatory agencies filing actions or issuing Investor Alerts against WCM777 to eight: The country of Peru, the state of Massachusetts, the state of California, the state of Colorado, the state of Louisiana, the state of New Hampshire, the state of Alaska, the province of New Brunswick.
“Investors have been promised returns of up to 140% in a period of less than one year,” said Kevin Anselm, director of Alaska’s Division of Banking and Securities. “This type of promise should raise serious red flags for investors, especially when traditional investments such as bank certificates of deposit are generally providing notably less return in the same period of time.”
Alaskans with information regarding World Capital Market may contact the Division at 907-269-8140 or through email.
BULLETIN: (UPDATED 6:38 P.M. ET U.S.A.) The state of California, which last month issued a Desist and Refrain order against the WCM777 MLM “program” and called it an “investment scam,” now is asking residents who invested in WCM777 to contact the Department of Business Oversight “immediately.”
At least 5,500 Californians plowed money into the scheme, the DBO said.
The state has ordered WCM777 to halt is operations in California.
“The California Department of Business Oversight has seen a surge of high-yield investment schemes that take advantage of social networks to market illegal investments,” said Jan Lynn Owen, commissioner of the DBO. “We encourage anyone who dealt with WCM777 to immediately contact the Department.”
Affinity fraud is part of the WCM777 mix, the state said.
“Relying on Biblical themes to lure investors, the WCM777 scheme offers securities in the form of memberships that allegedly provide purchasers with up to a 60 percent profit in 100 days,” the state said.
Named in California’s order are executives Ming Xu and Zhi Liu, and YouTube pitchman Harold Zapata, all with addresses in California Also named are World Capital Market Inc., WCM777 Inc. and WCM777 Limited.
Police raided a WCM777 outlet in Peru last month. At least one Peruvian TV station showed snippets of Zapata’s YouTube pitch as part of its coverage of the raid. The development signals that HYIP pitchmen operating from the United States or other countries and using YouTube to help a fraud scheme go viral now may find their faces plastered on TV both locally and in faraway lands.
FINRA issued a warning on HYIP schemes that use social-media sites in 2010.
Things are getting stranger at WCM777: After a police raid this week on the “program” in Peru, the purported head of WCM777 has declared his love for the Peruvian people — on the letterhead of World Capital Market, a California corporation listed as “suspended.”
The letter, which is dated today and appears on Twitter, did not say whether WCM777 would provide defense lawyers for any arrestees or subjects of investigations in Peru.
WCM777, an arm of World Capital Market, is under investigation in multiple countries. In November 2013, the firm was accused by the state of Massachusetts of selling unregistered securities. Hotel presentations in Massachusetts allegedly were targeted at Brazilian-Americans.
In the United States and elsewhere, claims have appeared that $14,000 sent to WCM777 returns $500,000 in a year.
As part of a Twitter declaration of love to Peruvians, “Dr. Phil Ming Xu” noted that WCM777 “wants to united [sic] people and build a global community of trust and love.”
And, according to the Tweet, WCM777 “has a promotion plan with a payout ratio of 130% for a limited time to sell our seven cloud products” and has stopped “our promotion plan with a payout ration [sic] [of] about 50%.”
The Ming Xu letter to Peruvians claimed the company “is willing to back” the 130 percent scheme, but appears to ignore the issue of offering unregistered securities.
WCM777, now reportedly known as Kingdom777, has been targeted at people of faith in the United States and other countries.
A “program” known as ViziNova was both a cross-border pyramid scheme and a reload scam aimed at victims of the WCM777 online debacle, the SEC says.
