While scammers are happy to defraud the general public out of millions of dollars each year, turns out they themselves don’t like being scammed.

Yeah I know, shocking…

Back in September it surfaced that My Advertising Pays had likely collapsed. The scheme had stopped paying investors and there were talks of another reboot.

The reboot will erase previous investor positions, with existing My Advertising Pays affiliates expected to start investing again from scratch.

In an effort to recover funds My Advertising Pays claims have been withheld by their payment processor, VX Gateway, a lawsuit was filed on December 1st.

In their lawsuit, filed in Texas, My Advertising Pays accuse VX Gateway of stealing $60 million dollars of stolen Ponzi funds.

This case is about the recovery of $60 million of stolen money. MAP seeks the recovery of certain assets wrongfully retained by Defendants, which rightfully belong to MAP and MAP’s customers in the United States and abroad, which were fraudulently retained.

My Advertising Pays identify defendants VX Gateway through three corporations and two individuals.

  1. VX Corp, a Texas corporation
  2. VX Inc, a Panamanian corporation
  3. VX Limited, a United Kingdom limited company
  4. Celia Dunlop, a Texas resident and
  5. Timothy MacKay, also a Texas resident

Multi-jurisdiction incorporation is typical of an outfit seeking to launder millions of dollars in stolen Ponzi funds.

My Advertising Pays itself is registered as a shell company in Anguilla, with a “principal place of business” in the US state of Mississippi.

Rather than correctly identify itself as a Ponzi scheme in court, My Advertising Pays instead describes itself as

an affiliate marketing site where individuals can purchase “credit packs” which allow them to view certain advertisements … and in exchange, these individuals are paid based on how many ads they watch.

My Advertising Pays’ adcredit Ponzi model is practically identical to Traffic Monsoon, who were shut down earlier this year by the SEC.

My Advertising Pays’ relationship with VX Gateway began in early 2014, through VX Corp.

My Advertising Pays claim VX Gateway themselves didn’t process payments, but rather ‘outsourced all payment processing to various third-parties‘.

When My Advertising Pays first collapsed and abandoned the US in late 2015, VX Gateway began to limit credit card transactions to $6000.

On February 24, 2016, Lynne Booth (“Booth”), MAP’s Executive Secretary, sent an e-mail to Dunlop inquiring as to why the restrictions had been put into place, and for how long such restrictions would be necessary.

Dunlop responded that same day, indicating that the restriction had been introduced by VX Gateway’s “first processor,” and that it was a permanent restriction for transactions processed by that processor.

Dunlop further explained, however, that VX Gateway had retained a second processor, albeit at a higher transaction fee, and would begin routing MAP transactions to that second processor once a Member processes in excess of Six Thousand Dollars ($6,000.00) of payments with the first processor

This, My Advertising Pays claim, is when they first were made aware VX Gateway themselves were not processing invested funds.

As VX Gateway tried to juggle the circumvention of financial fraud triggers on their end, My Advertising Pays affiliates’ withdrawal requests were delayed.

On February 26, 2016, Booth again sent an e-mail to Dunlop, inquiring about the delay with the processing of Member withdrawals.

Dunlop responded that the issue was not with VX Gateway, but was rather the fault of the “correspondent bank,” Standard Chartered of New York.

Around that same time, Dunlop represented to Deese that VX Gateway was seeking to contract with additional banks to process MAP payments, and that VX Gateway was attempting to set-up additional accounts on MAP’s behalf.

In April 2016 My Advertising Pays claim to have observed that cleared funds cease being deposited into their VX Gateway account.

On April 13, 2016, Booth sent an e-mail to Dunlop to inquire as to why MAP’s VX Loop account showed a zero balance in EUR, despite MAP accepting EUR payments for over a week.

Dunlop responded the same day, noting that the zero balance was correct because the funds in question had not yet cleared the third-party processor, and that funds would not begin showing in MAP’s VX Loop account until at least three weeks after payments in EUR were initiated.

Dunlop explained the delay was due to a ten percent rolling reserve holdback (the “RRH”) from the third-party processor, as well as an unexplained ninety percent holdback initiated at the whim of the various processors, with one purportedly holding back funds for around three
weeks, and the other holding back funds for around seven weeks.

Such is the nature of high-risk Ponzi payment processing.

As the weeks dragged on, My Advertising Pays claim they were still unable to access cleared funds in the account.

MAP’s inability to access funds in its VX Loop account became increasingly problematic given that at the same time MAP ceased accepting payments in USD, VX Gateway implemented a $5,000.00 monthly withdrawal limit.

The available funds visible in MAP’s VX Loop account were not actually available, as most of those funds “are either in the Reserve held
by the banks, or the funds held back by the processors, or [said funds have] already been withdrawn to MAP bank accounts ($8M).

My Advertising Pays claim these withdrawals were not authorized.

On May 6, 2016, VX Gateway withdrew approximately four million dollars from MAP’s VX Loop account.

That same day, Dunlop sent an e-mail to Deese and Booth, informing them that “you are going to see a very reduced VXLOOP balance,” and attributed the withdrawal of funds to VX Gateway’s decision to increase various reserve accounts held by VX Gateway on behalf of MAP, purportedly as a way of insulating VX Gateway from chargebacks or refunds initiated by
MAP Members.

By this stage new investment into My Advertising Pays was in free-fall and investors were demanding their money back.

Late that day, during a previously scheduled lunch meeting between executives of MAP and VX Gateway in Leeds, United Kingdom, MAP asked MacKay about the unexpected withdrawal.

MacKay acknowledged the improper withdrawal, and stated that it had been in error, and that VX Gateway would repay MAP over time in biweekly $600,000.00 installments.

One week later, on May 13, 2016, VX Gateway paid one such installment when it released $615,000.00 to MAP’s VX Loop account.

Shortly thereafter, on May 16, 2016, Dunlop informed Booth that VX Gateway had ceased making payments in USD entirely, and that VX Gateway was unable to transfer any USD funds which MAP held in its VX Loop account.

Since then no additional money that was improperly withdrawn from MAP’s VX Loop account by VX Gateway has been repaid.

The reason VX Gateway ceased making payments in USD is not elaborated on in the lawsuit.

Eager to ditch VX Gateway by mid year, My Advertising Pays began searching for a new processor.

Several processor representatives expressed interest, on condition of seeing My Advertising Pays’ financial reports.

At that time, MAP informed the representatives from the payment processor that MAP had never received statements from VX Gateway, and that MAP did not maintain a bank account independent of MAP’s VX Loop account.

Attempts by My Advertising Pays to recover funds held by VX Gateway continued in the background.

On August 4, 2016, Deese sent an e-mail to Dunlop, stating that VX Gateway was not holding-up its end of the bargain, and that it had been improperly withholding USD funds due and owing to MAP, and had not remitted funds processed in EUR, despite MAP having cleared approximately €16,500,000.00 since April 2016.

Sometime thereafter, VX Gateway represented to MAP that they had sent a letter to one of the processors demanding release of the funds due and owing to MAP, however, VX Gateway claimed that the processor requested two additional weeks to respond to the letter.

Later that month, on August 25, 2016, Booth sent an e-mail to Dunlop seeking an update on the processor’s response, and whether or not the processor would soon be releasing USD funds due and owing to MAP.

Dunlop responded, stating that VX Gateway’s counsel had sent a letter to the processor, and had given them until August 30, 2016, to resolve the issue and release funds due and owing to MAP.

On August 31, 2016, Booth again followed up with Dunlop, again seeking an update as to the status of MAP’s USD funds.

Dunlop responded, stating that the processor has requested an additional two weeks to respond, and that VX Gateway did not anticipate that any USD funds would be released prior to the response.

Why the payment processor continued to request additional time to respond to the request is not clarified in the lawsuit.

MAP ultimately requested that its corporate counsel issue a demand for the funds withheld by VX Gateway, which prompted a telephone call between MAP’s counsel and Dunlop and MacKay on September 7, 2016.

On the call, MAP’s counsel sought an explanation of why these funds had been withheld and the status of the funds, to which VX Gateway responded that everything was the fault of the processor and that the processor had the ability to freeze any MAP accounts for a period of
two years while any claims to the funds were settled.

Freezing funds is a common enough occurrence with payment processors who service the MLM underbelly (knowingly or unknowingly).

After requesting information on VX Gateway’s payment processors,

on September 20, 2016, VX Gateway released certain statements from
two (2) third-party payment processors GPN Data, a Polish company, and BeCash, a Mauritius company.

At the time that they released the GPN Data and BeCash statements, VX Gateway locked MAP out of MAP’s VX Loop account, which prevented MAP from reviewing any of the transactional or sales data, which would have been necessary to properly contextualize the statements.

Again, no explanation for why VX Gateway cut off My Advertising Pays is provided.

In any event, records obtained by My Advertising Pays revealed invested funds had been laundered through Poland and Spain.

The statements from GPN Data indicated that all payments processed in USD were to be paid to the account of VX Gateway Inc. at an account held by Raiffeisen Bank in Poland.

The statements from GPN Data further indicated that all payments processed in EUR were to be paid to the account of VX Gateway Inc. at an account held by Raiffeisen Bank.

The statements from BeCash did not indicate a specific account to which payments processed by BeCash were paid, however, the statements did indicate that the funds were paid to Banco Sabadell in Spain.

My Advertising Pays claim funds frozen by the two processors are only a fraction of the total cleared funds in their VX Gateway account.

From April 2014 through April 2016, MAP made $133,408,963.37 in sales.

For that same period, the statements provided by VX Gateway indicated that GPN Data and BeCash processed $94,320,924.81, leaving an unaccounted for discrepancy of $39,088,038.56.

From April 2016 through September 2016, MAP made €35,053,272.03 in sales.

For that same period, the statements provided by VX Gateway indicated that GPN Data and BeCash processed €19,009,995.64, leaving an unaccounted for discrepancy of €16,043,276.39.

My Advertising Pays allege they suspect VX Gateway was using another payment processor in the background.

Around the time VX Gateway revealed the use of GPN Data and BeCash, they also informed My Advertising Pays they were going into liquidation.

VX Gateway informed MAP’s counsel that VX Gateway had purportedly been placed in dissolution in Panama, and that MAP should consult with VX Gateway’s “liquidator,” a Maltese attorney whom VX Gateway explicitly stated did not represent VX Gateway in a corporate capacity, who was retained solely for the purpose of facilitating VX Gateway’s liquidation.

In a conversation between MAP’s counsel and representatives of VX Gateway, including MacKay, Dunlop, and the Maltese liquidator, VX Gateway represented to MAP, inter
alia,

(i) that the statements from GPN Data were fraudulent,

(ii) that GPN Data had not transferred the amount of money shown on the statements, and (iii) that VX Gateway had initiated legal proceedings against GPN Data in Poland, purportedly for the recovery of funds allegedly withheld from VX Gateway by GPN Data.

At that time, VX Gateway also encouraged MAP to file a claim through a portal on VX Gateway’s website, which was purportedly designed for creditors to make claims during the supposed Panamanian liquidation.

VX Gateway further advised MAP to “join forces” with VX Gateway in their
purported lawsuit against GPN Data in Poland.

This “joining of forces” came attached to a request for My Advertising Pays to ‘execute a full release of liability for any claims‘ against VX Gateway, Timothy MacKay and Celia Dunlop.

The reason?

MacKay and Dunlop were concerned about being charged with international money laundering.

Oh I bet they were.

Rather than consider why MacKay and Dunlop have these concerns, My Advertising Pays has dived headstrong into the US courts.

On information and belief, VX Gateway is attempting to deceive MAP by
convincing MAP to fully release MacKay and Dunlop, supposedly so that VX Gateway and MAP can jointly seek to recover certain assets held by GPN Data.

Meanwhile, VX Gateway seeks to divert MAP’s attention from monies processed by additional, unknown payment processors, which have not been disclosed to MAP, and from which VX Gateway has retained the proceeds.

The lawsuit accuses XV Gateway of breach of contract, conversion, fraud, breach of fiduciary duty, deceptive trade practices.

My Advertising Pays have demanded accounting data from VX Gateway and requested a jury trial.

And of course ‘$42,473,038.56 and €16,043,276.39, plus consequential damages‘.

Combined at the current exchange rate, the sough amount equates to $59.6 million USD.

The same day they filed their initial complaint, My Advertising Pays also requested a Temporary Restraining Order and preliminary injunction against VX Gateway.

Through the motions, My Advertising Pays seek to ‘prevent the disposition of assets by the defendants and to preserve the status quo‘.

So just to recap, a multi-million dollar Ponzi scheme has filed a complaint in US courts, alleging their payment processor scammed them out of $59.6 million dollars.

And Mike Deese wants a judge to sign off on returning the funds… after which they’re likely to disappear.

Whether regulators in the US are currently investigating My Advertising Pays is unclear. What with almost $60 million of fraudulently invested funds in the balance however, I have a feeling we might soon find out.

A hearing on My Advertising Pays’ TRO and preliminary injunction hearings has been scheduled for December 7th.

To date VX Gateway have not filed a response to any of My Advertising Pay’s filings.

Stay tuned…

 

Update 9th December 2016 – My Advertising Pays’ TRO motion has been denied.

A hearing for the preliminary injunction motion has been scheduled for early March.

 

Update 4th February 2017 – On January 31st VX Gateway, Celia Dunlop and Timothy Mackay have a filed a Motion to Dismiss.

The defendants cite jurisdiction issues and failure to state a claim.

 

Update 18th February 2017 – On February 14th My Advertising Pays filed an amended complaint.

The previous Motion to Dismiss has been denied as moot. VX Gateway, Dunlop and Mackay have until April 7th to file a new one.

My Advertising Pays has also been directed to file a new Motion for a Preliminary Injunction by April 7th.