When MLM companies committing fraud tout a debit card, it’s typically obtained through shell companies attached to dodgy merchants.

Both GSPartners’ and PLC Ultima offered debit cards through PMA Media Group, Aurae Lifestyle, Nvayo Limited, Club Swan and AU Card LLC – all owned by Christopher James Scanlon.

Scanlon was arrested by US authorities at Miami International Airport on Thursday, May 25th.

Through his companies, Scanlon (right) has been charged with running an “unlicensed money transmitting business”.

As per the Criminal Complaint filed against him, Scanlon’s companies

operated as an unlicensed private bank for its customers and had operations in the United States and other foreign jurisdictions.

Both GSPartners and PLC Ultima are MLM companies BehindMLM can confirm were clients of Scanlon’s unlicensed bank.

GSPartners solicits investment from US residents on the promise of a 300% ROI paid over 18 months.

Once acquired, investor funds were laundered through GSLifestyle, a “global card solution” provided by Scanlon’s unlicensed bank.

Last September, Club Swan and Nvayo Limited abruptly advised investors it had terminated its business partnership with GSPartners’ parent company Gold Standard Bank.

Following fraud warnings from Canada and the Central Bank of Comoros, GSPartners rebooted as Swiss Valorem Bank earlier this month.

As part of the reboot, new debit cards are being offered through Swiss Valorem Bank LTD (Kazakhstan), IBBP Pay Services LTD (Kazakhstan) and CoinX24 AG (Switzerland).

GSPartners and Swiss Valorem Bank are run by Josip Heit. Believed to hold a German passport, Heit spends most of his time hiding in Dubai.

On a May 24th GSPartners Corporate Call, Heit confirmed Swiss Valorem Bank’s new cards are going live on June 1st.

[32:53] (On the) first of June around the world, ladies and gentleman.

American citizens will have a local bank accounts. Directly in (the) US with a bank with which we are working together … using technology created by Swiss Valorem Bank.

Swiss Valorem Bank’s new financial services provider isn’t disclosed.

PLC Ultima is an MLM crypto Ponzi scheme run by Alex Reinhardt. Reinhard is another European national hiding in Dubai.

PLC Ultima’s ties to Chris Scanlon’s unlicensed bank was through PLC Card.

For all intents and purposes PLC Ultima has collapsed. Presently there is talk of a “swap” reboot, which will see PLCU bagholders swap their Ponzi coin for yet another coin.

Outside of GSPartners and PLC Ultima, Chris Scanlon’s Criminal Complaint gives you an idea of the type of clients his unlicensed bank serviced.

Customer-1 was a resident of New Jersey and a customer of Aurae Lifestyle.

In or around 2021, Customer-1 pleaded guilty to U.S. federal charges for conspiring to violate the federal anti-kickback statute and conspiring to defraud the IRS.

Customer-2 was a resident of California and a customer of Aurae Lifestyle.

Customer-2 was previously convicted in or around 2001 of a federal charge for conspiring to engage in mail and wire fraud, which arose in connection with a long distance phone card scam.

In or around 2018, the U.S. Securities and Exchange Commission brought a civil enforcement action against Customer-2 and his entity (“Fraud Entity-1”) alleging various federal securities violations that occurred between in or around October 2015 and in or around 2017 (“Fraud Scheme-1”).

The SEC alleged that Fraud Scheme-1 was a Ponzi and pyramid scheme. In or around 2023, the SEC achieved a settlement with Customer-2 and Fraud Entity-1, which required Customer-2 and Fraud Entity-1 to jointly and severally disgorge more than approximately $20 million.

Customer-3 was a resident of Colorado and a customer of Aurae Lifestyle.

In or around December 2019, Customer-3 was charged in a federal indictment (“Indictment-1”) with conspiracy to commit wire fraud in connection with a large-scale cryptocurrency mining scheme (“Fraud Scheme-2”), which took place between in or around 2014 and in or around December 2019.

Customer-4 was a citizen of the United States and a customer of Aurae Lifestyle. In or around December 2019, Customer-4 was charged in Indictment-1 with conspiracy to commit wire fraud in connection with Fraud Scheme-2.

Customer-5 was a resident of California and a customer of Aurae Lifestyle.

In or around 1997, Customer-5 was convicted of a federal charge for distributing methamphetamine, and was sentenced to a federal term of imprisonment of 145 months, followed by 5 years of supervised release.

In or around December 2019, Customer-5 was charged in Indictment-1 with conspiracy to promote an unregistered security in connection with Fraud Scheme-2.

In or around September 2020, Customer-5 pleaded guilty to conspiring to promote an unregistered security in connection with Fraud Scheme-2 and to subscribing to a false tax return.

Lawyer-1 was an attorney licensed to practice law in the State of Utah and a customer of Aurae Lifestyle. Lawyer-1 assisted Customer-3, Customer4, and others with transmitting significant amounts of money obtained through Fraud Scheme-2, including through Lawyer-l’s Aurae Lifestyle account.

The recurring themes among Scanlon’s clients speaks for itself.

With respect to “Customer-3”, “Customer-4”, “Customer-5” and “Fraud Scheme-2”, if I’m not mistaken “Customer-3” is either Matthew Goettsche or Joby Weeks.

“Customer-4” is Russ Medlin, “Customer-5” is Joe Abel and “Fraud Scheme-2” is BitClub Network.

BitClub Network was a “large-scale cryptocurrency mining scheme” whose founders were arrested in December 2019.

Two of the founders, Matthew Goettsche and Joby Weeks, are from Colorado. Scanlon’s Criminal Complaint states that Customer-3

moved millions of dollars derived from Fraud Scheme-2 through his Aurae Lifestyle account.

With respect to Customer-4, we know Customer-4 and Customer-3 knew each other, which fits with them being Russ Medlin and either Goettsche or Weeks respectively.

In or around July 2019, Customer-4 instructed Scanlon to move money from his account to Customer-S’s account and to then send that money to Customer4’s Cambodian bank account.

On or about October 21, 2019, Customer-4 provided an attestation claiming that he was a practicing attorney licensed in Utah who served as legal counsel and as a trustee for various clients, and he entered into a speaking engagement with a company, in which he received approximately $3 million for participating in three speaking engagements.

The attestation at the bottom of the document still included the name of Lawyer-1 instead of Customer-4. The document appeared to be notarized in Japan.

Customer-4 was not a lawyer. In fact, an Internet search revealed that Customer-4 was a noncompliant, Tier II sex offender.

He had previously been convicted of coercion using sexually motivated force and possession of child pornography.

Customer-4 remained a customer of Aurae Lifestyle and continued to conduct financial transactions through his account through in or around February 2020, notwithstanding that the AU Entities were aware of pending criminal charges pertaining to Fraud Scheme-2 against Customer-4 in December 2019.

Following his BitClub Network indictment, Russ Medlin (right) was arrested in Indonesia in June 2020. Medlin was caught paying underage girls for sex.

“Customer-5” is from California, was charged with relation to “Fraud Scheme-2”, and pled guilty in September 2020. This has to be Joe Abel.

Everything fits other than me not being 100% certain on whether Customer-3 is Goettsche or Weeks (Goettsche was closer to Medlin so if I had to guess Customer-3 is Goettsche).

Getting back to Scanlon’s Criminal Complaint and his clients;

Aurae Lifestyle was attractive to a particular type of customer because it provided customers the ability to engage in financial transactions without immediate scrutiny or detection by U.S. financial regulators and provided customers with access to the U.S. financial system when they otherwise would be barred from obtaining a U.S. bank account.

Further, and illustrative of Aurae Lifestyle’s purpose, a social media account for Aurae Lifestyle promised its customers “discretion.”

Reflecting the illegal conduct of Scanlon’s unlicensed bank and that of his clients;

Customers were charged high fees to become “members” of Aurae Lifestyle and to conduct financial transactions through their Aurae Lifestyle accounts. Aurae Lifestyle further offered a bespoke solid gold debit card to “members” at an exorbitant rate.

AU Card membership fees as high as $60,000 per card are cited. Presumably MLM companies using Scanlon’s unlicensed bank received a bulk discount.

In addition to the high “membership” fees and the expensive debit cards, customers were charged significant fees to conduct fiat wire transfers, sometimes approximately 1 % of the amount of the wire.

MLM companies using Scanlon’s unlicensed bank had funds laundered through three US banks and  two cryptocurrency companies.

The AU Entities used accounts at Bank-1, Bank-2, and Bank-3 to provide money transmitting services to their customers without properly registering with FinCen.

The AU Entities also maintained accounts at several U.S.-based cryptocurrency companies, including Cryptocompany-1 and Cryptocompany-2, to facilitate money transmitting services to their customers that involved cryptocurrency.

Again, during this time period, the AU Entities were not properly registered with FinCen.

Supporting evidence suggests Scanlon knew offering unlicensed banking services to scams was illegal, but figured he could stay one step ahead of the law.

Scanlon operated the AU Entities without appropriate regard for the applicable U.S. financial regulatory system and viewed the penalties for regulatory noncompliance as insignificant. For example, in an exchange with another person working with the AU Entities, Scanlon acknowledged that the AU Entities were moving “fast,” but Scanlon reasoned that moving fast is “how we win.”

Scanlon continued: “in the end, if the regulators come and scrutinize … they tell you what you have done wrong, slap you on the wrist with a fine, and you remediate.”

Scanlon has been charged with one count of conspiring to control and own an unlicensed money transmitting business.

If convicted, Scanlon faces up to five years in prison and a fine of up to $250,000 or double his profit.

Scanlon’s Criminal Complaint details transfers well into the hundreds of millions, so it’s likely he made well over $250,000.

One last point I want to reiterate is that legitimacy via association isn’t a thing.

Scanlon’s unlicensed bank represented it was legitimate because CoinX was registered with FinCEN.

Club Swan Prepaid Accounts issued to individuals in the United States of America are provided and issued by CoinX Inc., a Money Service Business regulated and registered by FinCEN and by over 44 states list here.

Club Swan Prepaid Account access cards are issued by CoinX.

That’s not how regulation and compliance works. If you are offering the service in question then you need to be registered.

The legality of your own business operations doesn’t hinge on whether associated shell companies and/or third-parties are operating legally.

The same is true for MLM companies pitching passive investment schemes to consumers. Neither BitClub Network, GSPartners, Swiss Valorem Bank or PLC Ultima are registered with financial regulators.

On that note, I’m not sure if there’s any link between Swan Club’s “CoinX” and Swiss Valorem Bank’s CoinX24 AG.

I’ve added Scanlon’s criminal case to BehindMLM’s calendar. We’ll keep you posted on any updates.

 

Update 11th August 2023 – Scanlon made his initial appearance in New Jersey on June 2nd.

He was released on a secured appearance bond of $5 million on June 9th.

Scanlon is subject to home detention with monitoring at a residence in New Jersey.