SEC shut down $3.8M Achieve Community Ponzi scheme
Following a statement from Achieve Community co-owner Troy Barnes claiming that the SEC was on his tail, comes the expected news today that the agency has indeed shut down Achieve Community.
In a complaint filed on the 12th of February in a District Court of Colorado, the SEC claim that Kristi Johnson, Troy Barnes, Work With Troy Barnes LLC and Achieve Community International LLC (collectively the defendants), were engaged in the running of “an ongoing fraudulent Ponzi scheme”.
From approximately April 2014 through the present, TAC has offered and sold “positions” in TAC to investors. These “positions,” which are securities, promise investors a significant return on their investment.
Whodathunkit?
A declaration filed by an SEC attorney reveals that the agency first began investigating Achieve back in January 2014, I believe this might be a typo, as the SEC’s complaint alleges Achieve began soliciting investments in April 2014.
I’d suggest the SEC began investigating sometime in January 2015.
The declaration reveals that Kristi Johnson was first contacted by the Colorado Securities Division on January 13th 2015, around the time she disappeared from the internet.
Upon being contacted by the Colorado Securities Division, Johnson immediately moved to close down the company’s FirstBank account. Invested funds were then transferred to a new account at Citizens Bank.
Since approximately April 2014, Defendants have raised more than $3.8 million from investors primarily through videos and promotional materials posted on Internet websites.
Through their marketing efforts, Defendants entice investors to buy “positions” in TAC and earn extraordinary investment returns of 700 percent.
Now that much we of course knew, but what of Kristi Johnson’s much famed super-secret “triple matrix formula”?
After reviewing Achieve Community myself, I called the model’s name out for being nothing more than marketing jargon. Inside Achieve Community all you had was a stock-standard matrix Ponzi cycler model.
After investigating the scheme, here’s what the SEC thought of Johnson’s model:
Defendants claim that TAC generates its extraordinary investment returns through a “triple algorithm” that Johnson and Barnes
developed.Defendants further claim TAC is a long-term, stable program that will generate “limitless,” “lifetime” returns. Defendants portray these investments as legitimate, going so far as to expressly disclaim that TAC is a pyramid scheme.
Indeed, after publishing our BehindMLM review of Achieve Community, a constant stream of investors in denial sought to comment on the review. Most of the comments were not fit for publication.
Publication of BehindMLM Achieve Community articles on websites and forums Achieve investors frequented was also banned.
Anyway I digress, back to Kristi Johnson’s money-tree triple matrix formula;
In reality, TAC is a pure Ponzi and pyramid scheme. Early investors are paid their purported investment returns from the funds of newer investors.
Indeed, TAC has no legitimate business operations; the only available funds to pay the promised investment returns come from new investors lured into the scheme.
I couldn’t have said it better myself. Infact here’s exactly what I wrote back in October of last year:
The Achieve Community affiliates purchase a position in the cycler queue and then via the collective recruiting efforts of affiliates in the company get paid when enough subsequent positions have been purchased.
The charade of products being purchased falls apart when one considers that multiple positions can be purchased by affiliates. Marketing videos on the Achieve Community website recommend affiliates purchase bulk lots of up to 16 positions at a time.
Make no mistake, affiliates are purchasing positions in a straight-line cycler queue, with any products or services bundled simply an attempt at pseudo-compliance.
That’s not going to fool any regulators that take a look at the Achieve Community and it shouldn’t fool you either.
Had Achieve investors who were too busy enforcing an environment of mandated positivity, where even the slightest hint of common-sense thinking would see investors terminated from the company, perhaps they too might have seen the Achieve Ponzi scheme for what it was.
One of the persistent claims that I’ve seen pop up, both from Achieve investors and those familiar with Barnes and Johnson, has been that the admins themselves have been wildly spending invested funds.
Before the SEC investigation the only thing we had to go on was the Facebook posts showing off new purchases. Whether Kristi Johnson engaged in this I can’t say, but I do know that Troy Barnes in particular was fond of boasting the spending of Achieve Community funds.
To that end;
In addition to operating a Ponzi and pyramid scheme, Defendants have also misappropriated at least $200,000 in investor funds for their own personal use, including to buy a new car and to pay personal credit card bills.
Further, Defendants have siphoned investor funds to an account held by Relief Defendant Achieve International, and have then misappropriated funds out of that account.
Defendants often touted the friendly, community nature of TAC. For example, in a short video posted on TAC’s website, narrated by Johnson, Johnson states that TAC is “a group of people that want to help each other, ourselves, and the people we care about to achieve the lifestyle and financial freedoms that we’ve always dreamed about.”
Similarly, in a video posted online touting TAC, Barnes claims that he and Johnson founded TAC “to help a whole lot of people.”
In another online video, Barnes claims that “we’re just here to help you and to help you make a whole lot of money.”
In the numerous videos and other promotional materials posted on TAC’s website and other online channels describing the TAC program, Defendants omitted to state that Johnson and Barnes were using investor funds for their personal benefit.
On more than a dozen occasions, Johnson made significant cash withdrawals orwrote checks to “Cash” from the WWTB and Achieve International accounts, and made corresponding cash payments to her personal accounts.
Johnson used these investor funds to pay her personal expenses, including paying nearly $35,000 in cash for a new car, and making personal credit card payments.
To date, Johnson has misappropriated at least $150,000 in investor funds.
Similarly, Barnes has misappropriated investor funds. Using thirteen separate transfers reflected on WWTB bank statements as “Visa Paypal *Troy Barnes,” Johnson transferred approximately $40,000 to Barnes.
In addition to what they withdrew out of the invested funds, positions in Achieve yielded $102,725 for Barnes (“by far the largest payment to any investor”) and $41,400 for Johnson.
Once again the Ponzi rule rings true: Those who invest early withdraw the largest amount of funds. Combined, Barnes and Johnson stole $336,975 from Achieve Community investors.
All of this took place back when Payoneer was still processing funds for Achieve Community. A relationship that was terminated in November of 2014.
At the time Achieve Community claimed Payoneer dropped them because Payoneer “couldn’t handle the volume of money” Achieve was paying out to its investors.
BehindMLM called bullshit on this, as Payoneer hold accounts with multiple million and billion dollar corporations. Instead I asserted the account was terminated due to likely concerns that Achieve Community was laundering invested Ponzi funds.
As per the aforementioned SEC attorney declaration,
Payoneer ended their relationship with TAC over concerns TAC was operating a pyramid/Ponzi scheme.
This next point is something I really want to drive home, as it’s a common occurrence for investors, and even scheme owners in some instances, to rock up and start spouting denials about the credibility of their company.
Defendants made material misrepresentations and omissions regarding TAC’s investment returns and Ponzi payments.
Numerous times in videos and other promotional materials on TAC’s website and other online channels, Defendants have described TAC’s purported operations and investment returns.
For example, as described in detail above, Johnson claims TAC is a “lifetime income plan” with “limitless” opportunities for investment returns. Similarly, Barnes claims that TAC has amazing stability, and that the program will continue long into the future.
Johnson also claims that TAC is able to pay investment returns as a result of a “triple algorithm” and “matrix”; Barnes claims he hired a developer who spent three months developing the “triple algorithm.”
In the numerous videos and other promotional materials posted on TAC’s website and other online channels describing the TAC program, Defendants omitted to inform investors that TAC was functioning as a Ponzi scheme.
Indeed, TAC expressly disclaimed being an improper pyramid or Ponzi scheme.
In a short video on the TAC website narrated by Johnson explaining TAC, Johnson announces “what we are not… We are not a pyramid scheme.”
Each of these representations and omission to investors was false and misleading because, since its inception, TAC has operated as a Ponzi and pyramid scheme, and has repaid investors, not as a result of a “triple algorithm,” but by making Ponzi payments to other investors.
These misrepresentations and omissions were material to investors because investors believed TAC was not a pyramid scheme, and that the payment of their investment return was not dependent on future investor funds coming into the scheme.
Defendants each knew or were reckless in not knowing, or alternatively were negligent in not knowing, that misrepresentations and omissions regarding TAC’s use of investor proceeds and Ponzi payments were materially false and misleading.
If you blatantly lie to the general public about your Ponzi scheme, you’re only making things worse for yourself. At the end of the day your business model is all that matters, that being how funds are channeled through your company.
The “positions” in TAC that Defendants offered and investors purchased are securities under federal law.
When an investor purchases a “position,” his or her individual funds are pooled with all other investor funds.
Investors are not required to take any action in order to earn the returns on their “positions.” Rather, investors expect their returns to be generated by the efforts of the individuals running TAC.
If you are simply using newly invested funds to pay off existing investors (as all matrix cycler schemes do), you are running a Ponzi scheme. No ifs, no buts, no maybes.
From the outset, TAC’s revenue has consisted entirely of investor-contributed funds. Johnson and Barnes have made no effort to generate profits from any legitimate business operations from which they could repay earlier investors.
Instead, the sole source of repayments to earlier investors is funds contributed by newer investors
As a result of the conduct described herein, Defendants Johnson, Barnes, and WWTB have violated the anti-fraud provisions of the federal securities laws.
Specifically, Defendants have engaged in a scheme to defraud, and have thus violated and unless restrained and enjoined will continue to violate … the Securities Act of 1933.
For their efforts in running a multi-million dollar Ponzi scheme, Troy Barnes and Kristi Johnson now face three counts of relief in the SEC complaint:
- fraud in the offer or sale of securities
- fraud in the purchase or sale of securities and
- equitable disgorgement
The SEC requested an injunction to prohibit Johnson and Barnes from committing and further violations of the Securities Act. Johnson and Barnes would also have to pay back the money they stole, including post and pre-judgment interest.
When the SEC filed their complaint, they requested that public access to the case be initially restricted. This was done as the agency moved to freeze and secure the known assets of Achieve Community (invested affiliate funds).
Filing complaints under seal is also done to catch the perpetrators of fraud unawares. This stops them from seeking to transfer and/or hide their assets and flee the country.
The Colorado District court granted the SEC’s temporary injunction request the same day it was filed (February 12th), Summons to both Johnson and Barnes were also sent out on this date.
Contrary to Troy Barnes’ earlier claims, it would appear that Kristi Johnson is still residing in the US (he claimed she had fled).
The asset freeze was granted on February 17th, with a preliminary injunction hearing set for February 24th. February the 17th was also the date the case was unsealed, hence our reporting of it at this time.
Of particular significance to this case is the fact that Achieve Community deployed a matrix cycler business model, and that the amount stolen was $3.8 million.
Typically we’re used to seeing Ponzi schemes busted to the tune of hundreds of millions, or even billion of dollars (TelexFree).
The Achieve Community Ponzi bust is the first low-level scam I’ve seen taken down in years. Hopefully it signals to other matrix cycler admins (who are in the same denial Achieve Community and its investors were) that they might be next.
Looking forward, it’s expected at some point a mechanism for investors to file claims will be established. Whether or not Achieve Community’s top investors will be subject to clawback litigation remains to be seen.
Criminal charges against Barnes and Johnson might also be on the cards, although they’ll have to be filed by another agency (typically the DOJ), as the SEC only file civil complaints.
If I may, I’d like to finish up with a short message to Achieve Community’s investors:
Look, here at BehindMLM we’ve seen every MLM business model under the sun, heard every excuse and justification for fraud and had every conceivable allegation of misdirection thrown our way.
But we’ll be fine. This isn’t the easiest of topics to cover but I knew that going in. Having your name dragged through the mud, even if it’s fictional mud, comes with the territory of those engaged in fraudulent criminal activity.
What you need to take stock of are yourselves.
I’ve heard unconfirmed reports of suicides and at least one attempted suicide linked to the aftermath of the Achieve Community shut down.
If there was even the slightest shadow of an actual community behind this Ponzi scheme, now is the time to fall back on it.
Yes you got scammed, yes you should have seen it coming and no doubt some of you are feeling rather desperate about this mess right now.
There is light at the end of the tunnel though, but by that I don’t mean jumping on the next Ponzi scam someone tries to entice you with.
Anybody following the Rodney Blackburns of the world into the similar matrix cycler scams are just setting themselves up for more tears.
Educate yourselves, learn from this experience and become familiar with the traits of schemes designed to steal your money and transfer it to those who got in before you.
It’s a crazy world out there people, take care of yourselves.
Update 20th February 2015 – Both Troy Barnes and Kristine “Kristi” Johnson have, along with the SEC, approached the court to request they grant the SEC’s request for a preliminary injunction, asset freeze (extension) and any other equitable relief.
With Barnes and Johnson rolling over, sounds like this is going to be over quickly.
Love you, Oz. Keep doing what you’re doing. You may suffer the slings and arrows of the naysayers but what you’re doing is righteous work.
I’m not trying to lay a religious thing on you. Just saying I appreciate what you try to do and even though many try to bring up your history and other allegations I have found that you speak nothing but the truth.
Good job man!
Great work, Oz. Without your reporting, I have a suspicion the regulators would’ve overlooked this one.
The work you do is serious business. You were on this company quick and never let up.
yeah oz. look at those total takeover guys in the other thread. serial ponzi organizers . these scams seem short, and may have a low loss figure, but when you consider, that they occur sequentially, the losses can be quite large.
@ mr kevin thompson!
good morning! could you please step across to the WUN article, and state your views there?
https://behindmlm.com/companies/that-free-thing/wakeupnow-file-70-million-lawsuit-against-kirby-cochran/
You really need to add a “like” button.
Thanks for the support guys.
@Zoe
Bottom of every article?
I don’t like intrusive social media buttons so I’ve tried to keep them as minimalistically streamlined as possible.
So Kevin, will you also call out My Advertising Pays for what it is? Or will you keep silent because you have been paid by them in the past?
listen guys, you cannot put ‘lawyers’ in the same bracket as blogwriter ‘activists’.
both may work in the same arena, and both may regularly get their asses kicked, for the job they do, which have their supporters or denouncers. but both jobs are necessary.
if you want to avoid a world of kangaroo courts, let kevin thompson do his job, and oz his. and accept KT’s compliment graciously!
I agree. It’s 2 different arenas with different sets of rules, e.g. Professional Conduct rules.
I think this person should also be checked out. Go to her facebook page and look at all the things about Achieve.
Kathleen Francesco Humphrey she has some connections with Kristie Johnson. Very much into promoting online scams.
Oz, I very clearly remember all the way back to when I was looking into Zeekler back in 2012. That is when I first found this place.
Since then I have found that you and Patrick Pretty have been heads and shoulders above all others in cutting through the dreck and getting to the heart of the matter.
In the face of hype, scorn and outright deception the clear path is to stick the facts and an objective, methodical analysis.
When will people learn- “Facts are stubborn things.”
Keep raising the bar, Oz.
Xorly
PonziHater,
I put a message out on my fan page last week. It’s consistent with the responses I’ve been giving over the past year when people asked me privately. There’s not much I can say, but it’s better than nothing.
facebook.com/mlmlegal/posts/816431801761033
anjali and M_Norway, thanks.
To be fair to Kevin Thompson, there is not only a certain “weight” his comments would have as a lawyer, but there are obligations to go with it.
While I have been critical of some things he has said in a few recent matters (the hiring of Kevin Grimes was something I expressed skepticism of), considering the field he works in, the nature of the clients he has and the obligations and pitfalls of the post he occupies – I think taking his earlier statement in the best possible light is reasonable.
Article updated with Johnson and Barnes’ stipulating to agree to the court granting the SEC a preliminary injunction, asset freeze extension and any other equitable relief.
amazing how fast barnes found johnson right? *eyerollthingy*
seems barnes make believe girlfriend facebook disappeared.
Sounds like poor Kristi is losing the car she purchased with her ill-gotten gains.
I’d like to see both facing some jail time but, that’s probably too much to ask.
I am without words…
funny how he just keeps falling into ‘traps’.
Not funny, just sad. After all, he’s probably amnesiac and never learns anything.
interesting facts about kristi johnson from the SEC civil case complaint:
1] kristi is a series 7, registered securities representative. that means she has above average knowledge of what constitutes a ‘security’.
inspite of this, she pulled BS about a ‘triple algorithm’ generating profits in achieve, when in fact she knew all along, she was perpetrating securities fraud.
2] kristi was the ‘sole’ authorized signatory, in all four bank accounts connected to achieve, in the FirstBank.
three accounts were of ‘work-with-troy-barnes’, and one of achieve international LLC. so, kristi controlled the money, which means she was the mastermind.
3] on january 13,2015, when kristi was contacted by the SEC [colorado division], she promptly closed her firstbank accounts and shifted the money to citizensbank. suchasmart move i say! why would anybody notice ? 🙂
4] kristi’s personal spending spree of investor funds, occurred mostly from jan 2015, onwards, while under the public scrutiny of sites such as behindmlm and others.
the possibility of an SEC investigation was quite real. no payment processor was willing to hold kristi’s hand. at such a time, she ran up 25.000$ in credit card bills?
depression? comfort shopping? did kristi come unhinged?
TAC [the achieve community] transferred around 800.000$ to binarywallet, to start payout to the investors and in lieu of processing fees.
binarywallet, however, for reasons unknown, did not forward any payments to investors accounts. the SEC complaint says troy barnes, was on binarywallets heels, asking them to make payments.
this is probably because the heat was up, and troy wanted to keep the community calm by saying ; look we’re paying you! don’t complain to to the AG or securities division!
i think we can safely say that, binarywallet, with all the disrepute and shadiness, we’ve uncovered about them, can consider themselves in deep shit, and done with payment processing forever.
Greetings,
I live around 2 hours from Troy in Michigan. Really cracks you up how these guys plus the likes of Dominic Purcell in TL write all these rosey speaches on their FB walls and are sticking to us and members entire time LOL I ought to hunt this P OF Crap down.
Am hoping for some kind of refund to investors via mail if they can access the records properly. I received a check few years back that way when SEC stepped into an Alabama ring.
Hopefully someone can give everyone info. as to what is needed to recoup some of $ or am hoping they find the records to the transactions seeing they may have seized a large chunk.
so, you’re going to run around investing money in ponzi/pyramid schemes, and expect the govt to be your handmaiden, and keep running around, returning your funds to you, at your behest?
why didn’t you Stop after getting trapped in the alabama ring? why should the govt protect you and your money?
If binary wallet is in trouble, why are they not listed in any docs? Why do you think no funds were sent out to anyone? Was there a freeze order maybe?
Anjali who has info apparently, what do you know??
i am flummoxed! i just spent half an hour going over all the achieve case filings on asdupdates.
while writing post 20 and 21, i was reading from a court document concurrently.
however i cannot find this info again in the documents [this is in my own language, the court language would naturally differ]:
has a document gone missing from asdupdates? has any document been revised? i just cannot fathom what has happened.
and since the NC DOJ came in, the talk has been about the 800.000$ being in the ipayDNA account.
HELP!!
one explanation for the binarywallet/ipayDNA enigma, could be that :
ipayDNA was the collector of investor funds.
binarywallet came on board right towards the end, to be the payout processor.
kristi may have requested ipayDNA to transfer funds to binarywallet.
as tensions were peaking at the end, and troy/kristi were falling apart, and out with each other, there may have been communication gaps.
the money may have never been transferred to binarywallet,and the SEC may have been misinformed by kristi/troy.
has the SEC complaint been amended? where is the document i read on 23/02/2015. what the hell!
Update: Massachusetts Securities Division have formally issued a cease and desist – patrickpretty.com/2015/04/30/achieve-community-issued-cease-and-desist-order-accused-of-securities-fraud-selling-unregistered-securities-and-conducting-pure-ponzi-scheme-in-colorado/
kevin thompson is lying?
Tony Booth Maps Executive told all of us at many events (I have on video) that you have credit packs!
Are you at 1200 yet? How many referrals do you have?
Why would Simon and Tony tell us at seminars that you have credit packs?
That you helped come up with MAPS?
Man I know LOTS of people who purchased credit packs because Tony Booth and Simon said you have them, this was after the banners broker fall out where we didnt know who to trust. This helped build trust.
Actually I will upload the video now, it is blurry but you can clearly hear Tony and Simon saying you have credit packs.
I wonder if KT is Obsesses Possessed and Addicted towards credit packs.
I am from Binary wallet and Binary wallet never received a Single Dollar from Achieve ever.
In fact my personal account was seized and had passed all info to law agency before time it help me get my account back.