Despite ignorance not being an excuse commit crime, it never seems to stop promoters of fraudulent schemes from trotting it out when caught.

The latest scammers to claim they knew nothing of the true nature of the scams they promoted are Scott Chandler, Louis Gatto and Eric Pinkston.

Chandler, Gatto, Pinkston and Thomas Dluca were sued by the FTC for promoting the Bitcoin Funding Team gifting scam and My7Network. Chandler was sued individually for promotion of the JetCoin Ponzi scheme.

All three defendants have had their assets frozen through a Temporary Restraining Order.

Following a Magistrate report that recommended a preliminary injunction be issued to make the freeze permanent, Chandler, Gatto and Pinkston have filed objections to the report.

The fourth defendant, Thomas Dluca, has thus far failed to filed an objection.

In his objection Eric Pinkston describes himself as

a small-town farmer from Elmer, Missouri with a population of 92 people.

He works for a cattle operation in the Mid-West where he manages livestock and lives a modest blue-collar lifestyle.

He does not own the land he manages nor the cattle that live off the land.

He collects a paycheck for managing the livestock and has a line of credit with Farm Credit Services (FCS) Financial that he uses for expenses related to managing the cattle ranch and 30 to 40 cattle of his own each summer that he sells annually in the fall.

Pinkston argues he should be exempt from a preliminary injunction because he

was not a developer, administrator or otherwise have any authority to bind the Bitcoin Funding Team business.

Most importantly, Mr. Pinkston never had any ownership interest in the Bitcoin Funding Team.

Mr. Pinkston’s involvement and benefit pale in comparison to the millions alleged to have been made by the developers and main benefactors of the Bitcoin Funding Team.

In a nutshell, Pinkston’s argument can be boiled down to “others were scamming worse, so why am I being sued?”

Mr. Pinkston joined Bitcoin Funding Team as a regular member and later felt that he, too, had been misinformed.

Because of his blue-collar upbringing Mr. Pinkston was asked to take-part in informational or testimonial calls about his experiences with cryptocurrency.

Mr. Pinkston was a mere guest on those testimonial calls where his blue-collar background was exploited by sophisticated businessmen to show others that anyone could invest in cryptocurrency.

He was also asked by the developers of the Bitcoin Funding Team to introduce two former football players he knew to provide moving testimonials.

Ultimately, Mr. Pinkston became a victim of the ineffective matrix system as anyone else.

He grossed 15 Bitcoin of which 11.6 was paid forward into the matrix for a total gain of 3.5 bitcoin when it was worth a lot less than today.

Regardless of the fiat value of bitcoin and despite having scammed people out of 3.5 BTC, Pinkston attempts to present himself as a Bitcoin Funding Team victim.

Pinkston goes on to claim he was only involved in Bitcoin Funding Team for “a few months”, having left when “the program was not and could not work as advertised”.

After Bitcoin Funding Team collapsed, Pinkston vowed never to get involved in scams again and went back to quietly tending to his cows.


After Bitcoin Funding Team collapsed, Pinkston immediately followed Thomas Dluca into My7Network.

The My7Network was promoted to him as an organic and legitimate way to purchase cryptocurrency that could help others in a local network consisting of trusted partners.

So uh, how was My7Network any different to any other cryptocurrency gifting scam doing the rounds?

Unlike the never-ending matrixes or traditional pyramid structures, My7Network’s cycles would cap at just 6-14 individuals and were less risky.

Smaller matrix. Seriously, that’s the only differentiation Pinkston provides.

In the FTC’s filed response to Pinkston’s objection, they state clearly why they sued him.

Having made every effort to convince recruits that he was a key player in Bitcoin Funding Team and My7Network when he was promoting the program, Defendant Pinkston now characterizes himself as an unsophisticated victim who was minimally involved.

However, notably he does not deny that he was placed near the top of the pyramid, he does not deny that he made the statements—including deceptive income claims—cited in the FTC’s briefing, and he admits that he had direct contact with Defendant Dluca regarding the operations of Bitcoin Funding Team and some level of unofficial involvement in administration.

Pinkston maintains that should the preliminary injunction be granted,

the Asset Freeze … (will have) a chilling effect on Mr. Pinkston’s
livelihood and threatens a nonparty’s livestock.

The FTC dismiss much of Pinkston’s objection, rightfully stating

Pinkston has produced no admissible evidence rebutting the FTC’s position or justifying a narrower injunction.

The factual statements asserted in the Pinkston Objections are unsupported by sworn testimony or any other form of admissible evidence.

In the Pinkston Objections, Defendant Pinkston admits that he engaged in repeated violations of the FTC Act.

He does not dispute that he promoted Bitcoin Funding Team and My7Network; nor does he dispute that these programs were illegal chain referral schemes.

The FTC has produced ample evidence and argument to support entry of the preliminary injunction recommended by Magistrate Snow against Defendant Pinkston.

The Court should disregard the statements of fact in the Pinkston Objections entirely and consider only admissible evidence.

Since there is no rebutting evidence in the record, the Court should grant the preliminary injunction as recommended by Magistrate Snow.

Turns out being a small-time cattle farmer doesn’t justify FTC Act violations. Whaaaaaaaaaaa?

In their joint objection to the Magistrate’s report, Louis Gatto and Scott Chandler claim they

failed to fully understand the true nature of a “chain referral scheme”.

In fact, both Defendants sincerely believed that substantial income could legally be generated through participation in such “schemes.”

Simply stated, neither Gatto nor Chandler fully comprehended the true nature of Bitcoin investing nor how hardly any participants would ultimately become profitable.

While I can’t speak to Gatto, Scott Chandler has been running MLM scams since at least 2011.

How much money Chandler scammed people out of in Bitcoin Funding Team and My7Network isn’t disclosed.

Gatto however claims to be employed by L.A. Fitness and states that he ‘lost money … and presently maintains less than two-thousand dollars in his bank account‘.

Whether this includes any cryptocurrency Gatto has squirreled away is unclear.

Tellingly, Chandler and Gatto are also objecting to being required to provide the FTC with requested documentation.

The pair argue that doing so may infringe on their First and Fourth Amendment rights.

Oh and;

Objection # 4 – RE: Criminal liability

Simply stated, compliance with any ordered “ancillary relief” specifically, inter alia, production of documents, data, and electronic  communication, with no protection from criminal liability, places Defendants Gatto and Chandler in a precarious legal situation.

Gee, well I wonder why that is.

Surely a preliminary injunction is more than appropriate to freeze the assets of suspected criminals?

Chandler and Gatto’s objection was filed on April 7th. An FTC response is expected early next week.

The current TRO in place expires on April 9th. It is expected it will either be extended until April 23rd or a preliminary injunction will be granted on the 9th (this coming Monday).

Stay tuned…


Update 10th April 2018 – As per an April 9th court order, the TRO has been extended until April 16th.


Update 18th April 2018 – On April 16th a preliminary injunction was granted against defendants Scott Chandler, Louis Gatto and Thomas Dluca.

A decision on Eric Pinkston is pending.