GSPartners & Josip Heit issued fraud C&D in Texas
GSPartners, owner Josip Heit and several executives have been issued an emergency cease and desist by the Texas State Securities Board (TSSB).
The TSSB’s November 16th order names the following recipients;
- GSB Gold Standard Bank (dba GS Smart Finance, Gold Standard Partners, GSPartners, GS Partners & GSP)
- GSB Gold Standard Banking Corporation PLC
- GSB Gold Standard Corporation AG
- GSB Gold Standard Pay Kommanditbolag (aka GSB Gold Standard Pay LTD, acting under the brand name GSDEFI)
- GSB Gold Standard Trade
- Swiss Valorem Bank LTD
- Josip Dortmund Heit (GSPartners’ owner)
- Bruce Innes Wylde Hughes (GSPartners Corporate Trainer)
- Aline Lima and
- Dirc Zahlmann (GSPartners CEO)
Collectively, TSSB refers to GSPartners as
an international coalition … of various fraudulent investment schemes that are threatening immediate and irreparable harm.
This assessment is based on a joint investigation by
securities regulators from the United States and Canada, (who) identified the ongoing threat presented by GSB Group and organized a working group to collectively investigate its operations.
BehindMLM has already confirmed ongoing GSPartners investigations by the SEC, CFTC and Alabama Securities Board.
As per TSSB’s filed order, GSB Gold Standard Bank started off as GCC Gazella Corporate Capital GmbH, a German shell company “involved in the manufacture, import, export and distribution of chemicals, plastics, plant protection products, and dyes.”
GCC Gazella Corporate Capital was owned by Josip and Kristina Heit. TSSB doesn’t state when it happened, but at some point GCC Gazella Corporate Capital changed its name to GSB Gold Standard Banking Corporation AG.
This new shell company was owned by Josip Heit, Kristina Heit, Ulf Lammers and Andrey Labuzdko.
In 2021, GSB Gold Standard Banking Corporation AG changed its name once again to Gold Standard Corporate AG.
Heit’s Ponzi scheme is run through a series of “proprietary internal tokens”, which TSSB casts doubt on even existing.
The proprietary internal tokens are represented by the tickers GEUR, CVEUR, LEUR and DEUR. They are highly illiquid assets, are not traded on external cryptocurrency exchanges and have no fair market value outside the GSP ecosystem.
Moreover, Respondent GSP is not providing clients with access to block explorers for GEUR, CVEUR, LEUR and DEUR, and they are not disclosing information relating to their consensus mechanisms, their contract addresses or their contracts.
Simply put, Respondent GSP is not providing clients with sufficient information to show GEUR, CVEUR, LEUR and DEUR actually exist.
In a nutshell, TSSB has determined GSPartners’ MLM opportunity constitutes a securities offering.
Respondents GSP and Hughes mistakenly and falsely claimed Respondent GSP uses proprietary tokens like CVEUR instead of external tokens like BTC and ETH so it can pay rewards without needing a securities license.
Their statements are materially misleading or otherwise likely to deceive the public because
-Using internal proprietary tokens such as CVEUR instead of BTC or ETH does not impact the regulation of the Elemental and Success Series Certificates and investments in the LYS Staking Pool by the Securities Act, and
-The Elemental and Success Series Certificates are regulated as securities when offered or sold in or from Texas regardless of the use internal systems, ledgers, blockchains, or tokens.
A. Parties offering the Elemental Certificates, Success Series Certificates, and investments in the LYS Staking Pool in or from Texas are offering unregistered securities in violation of Section 4003.001 of the Securities Act, and
B. Parties offering the Elemental Certificates, Success Series Certificates, and investments in the LYS Staking Pool in or from Texas are offering securities in violation of Section 4004.051 of the Securities Act unless the parties are registered as dealers or agents.
GSPartners’ use of the word “bank” in Swiss Valorem Bank branding is also a cited regulatory issue;
Respondents Swiss Valorem Bank and GSP are using the term “bank” in their names and describing Respondent GSP as a bank.
These statements are materially misleading or otherwise likely to deceive the public because:
-Respondents Swiss Valorem Bank and GSP are offering securities in or from Texas and not licensed or chartered as a bank by the Texas Department of Banking, and
-Texas residents that purchase Elemental Certificates, Success Series Certificates, and other products promoted by Respondent GSP are not protected by FDIC insurance or U.S. laws designed to protect banking consumers.
Additionally TSSB also cites retaliatory legal action initiated by GSPartners. The first example is a Virginia lawsuit filed against Chris Saunders in 2021.
For example, Christopher Saunders is a resident of Virginia that operated various social media channels, including a YouTube channel named Grit, Grind, Gold (@gritgrindgold) for new entrepreneurs looking for new ways to make money online.
He used his social media channels to publish negative information about certain members of GSB Group.
On December 16, 2021, Respondent GS Corporation AG, Respondent Heit, Antonio “Tony” Euclides Meneses De Gouveia (as an independent affiliate of Respondent GS Corporation AG) and Michael Dalcoe (an independent affiliate of Respondent GS Corporation AG) filed a complaint against Mr. Saunders in GSB Gold Standard Corporation AG et al. v. Saunders, Case No. 1:21-cv-01398-RDAIDD, in the United States District Court for the Eastern District of Virginia, Alexandra Division.
The lawsuit claims Mr. Saunders “uses his Social Media Channels to publish purported statements of fact related to various companies operating in the cryptocurrency space.”
It also alleged Saunders published at least 99 videos in social media “that broadcast a litany of false and defamatory factual statements regarding GSB.
On August 2, 2022, the case was dismissed without prejudice by stipulation of all parties, including Respondents GS Corporation AG and Heit.
TSSB also cites GSPartners’ New York Supreme Court petition targeting BehindMLM.
Also, Behind MLM operates a website accessible at behindmlm.com.
The anonymous principal known as Oz acknowledged “[t]here’s a lot of rubbish MLM review and news sites on the internet that masquerade solely as lead generation tools” and purportedly created the website to “provide the public with relevant and
accurate MLM information, news, and company reviews.”
Behind MLM has been posting information about GSB Group and argued its members are running a Ponzi scheme.
Respondent GS Corporation AG determined the IP address for behindmlm.com is hosted by Google, LLC, and that its domain is registered with GoDaddy, Inc.
On or about December 20, 2022, Respondent GS Corporation AG filed a petition in the Supreme Court of the State of New York, County of New York, Index No. 160880, against Google LLC and Go Daddy Inc.
The petition was verified by Respondent Heit as the Chairman to the Board of Directors of Respondent GS Corporation AG.
Respondent Heit certified the petition, and it describes Respondent GS Corporation AG as follows:
A. Respondent GS Corporation AG is “a leading software manufacturer which, in the IT and Blockchain sector, supplies sophisticated “white label” software products as well as hardware trading modules and platforms for use in the financial industry,” and
B. Respondent GS Corporation AG “provides a collection of high-quality services that rely on its own blockchain, and together forms an elite community and a structured ecosystem.
Among those services is a decentralized cryptocurrency, G999, which utilizes blockchain technology to provide its users with a reliable, secure, and confidential service to effectively build and develop private economic relations.”
It also alleges the unknown individual or individuals who operate behindmlm.com have posted “numerous defamatory and false statements about GSB, labeling GSB as a fraud and a Ponzi scheme.”
It sued Google, LLC, and Go Daddy, Inc., to compel them to identify the individual or individuals operating the website because its “global reputation for integrity and transparency is of paramount importance to its business.”
On November 3, 2023, the Court denied motions to quash the subpoenas filed by behindmlm.com. On the same day, counsel for Behind MLM filed a notice of appeal to the Supreme Court Appellate Division, First Department.
Respondent Swiss Valorem published the following information about the litigation involving Behind MLM on the Swiss Valorem Website:
… Due to current ongoing legal action against a group of criminals, and the platforms they use for their criminality, our legal team, along with the Brand and Relationship Management team, have issued instructions to suspends [sic] the accounts of a small number of offending members who are working with the criminals to further their cause.
Whoever is found to be spreading this illegal content, will also be considered accessories, and their details handed over to the legal team handling these cases.
The criminals are using the BehindMLM platform, as well as smaller platforms to hide their identities…
… We will NOT tolerate criminals or acts of abuse against our brand, associated brands, products or services.
At time of publication Heit’s retaliatory NYSC petition targeting BehindMLM remains active.
In addition to securities fraud and retaliatory litigation, TSSB also notes multiple disclosure violations.
These pertain to GSPartners failing to disclose to consumers, among other things, “the identity of its owners” and “assets, liabilities, revenue, and other financial information relevant to its capitalization and operations”.
Respondents GS Corporation AG, GSP, Heit, and Zahlmann are intentionally failing to disclose the identity of companies, organizations or projects that compromise the blockfolios tied to Elemental Certificates and Success Series
Respondents GS Corporation AG, GSP, Heit, and Zahlmann are intentionally failing to disclose the operations, revenue, capitalization, profitability, and location of companies, organizations, and products tied to each blockfolio.
In light of TSSB finding GSPartners is committing securities fraud and other acts that constitute “fraud and deceit”, TSSB concludes;
A. Respondents are violating the Securities Act and conducting their business in a manner that is not legally sound, and
B. As described herein, Respondents GSP, Heit, and Zahlmann have implemented an illegal multilevel marketing system that compensates members for selling securities in or from Texas without proper licensure.
GSPartners and all other named respondents have been ordered to
Immediately CEASE AND DESIST from offering for sale any security in Texas until the security is registered with the
Securities Commissioner or is offered for sale pursuant to an exemption from registration under the Texas Securities Act.
Immediately CEASE AND DESIST from acting as securities dealers, agents, investment advisers, or investment adviser
representatives in Texas until they are registered with the Securities Commissioner or are acting pursuant to an exemption from registration under the Texas Securities Act.
Immediately CEASE AND DESIST from engaging in any fraud in connection with the offer for sale of any security in Texas.
Immediately CEASE AND DESIST from offering securities in Texas through an offer containing a statement that is materially misleading or otherwise likely to deceive the public.
GSPartners is planning to hold a marketing event in South Africa on November 18th.
It is expected multiple violations of TSSB’s order will be committed at the event.
TSSB warns that failure to adhere to its issued emergency cease and desist order runs the risk of a fine of up to $10,000, and/or imprisonment for two to ten years.