GSPartners & Josip Heit “unlawful activities” C&D from Florida
GSPartners and owner Josip Heit have received a securities fraud cease and desist from Florida.
Florida’s Office of Financial Regulation’s two hundred and eighty-six page November 17th order names eight respondents;
- GSB Gold Standard Bank LTD, dba GS Partners
- GSB Gold Standard Corporation AG
- GSB Standard Corporation USA
- Swiss Valorem Bank LTD.
- WealthBuilders Worldwide
- Josip Heit
- Brian Cromley and
- Ruel Milson
Brian Cromley is a high-ranked GSPartners’ “Crown Ambassador” promoter.
From 2021 through 2023, Respondent Cromley has organized several in-person presentations throughout Florida and at various locations throughout the United States.
The purpose of these presentations was to advise attendees on how to promote GS Partners’ MetaCertificates and on how to acquire more investors.
Ruel Milson is a lower-ranked promoter and part of WealthBuilders Global.
WealthBuilders Global is a GSPartners group run by Michael Dalcoe and Nathaniel Hines (aka Nate Hines).
Both Cromley and Milson are Florida residents.
The Office of Financial Regulation (OFR) cites GSPartners’ “MetaCertificates” investment scheme as “an offer or sale to Florida residents of unregistered securities”.
Through MetaCertificates, GSPartners solicits investment on the promise of up to 5% a week.
OFR also points out GSPartners, through its GSB Gold Standard LTD and Swiss Valorem Bank, violated Florida law
regarding unauthorized use of the of the term “bank”, the offer of traditional banking services, and otherwise holding themselves out as financial institutions to Florida residents.
OFR’s investigation into GSPartners was primarily undertaken by two Bureau of Financial Investigations agents. Details of the investigation itself are worth a read, this article will only cover the findings and subsequent orders.
Having identified GSPartners’ MetaCertificates scheme as a securities offering under Florida law, OFR notes
Respondents are not presently, and have never been, registered with the Office as investment advisers, dealers or associated persons pursuant to (Florida law).
The MetaCertificates offered or sold by Respondents are not presently, and have never been, registered as securities with the Office pursuant to (Florida law).
With respect to use of the term “bank”;
No Respondent has ever been a chartered or licensed as a financial institution according to the Federal Financial Institution Examination Counsel’s National Information Center.
Respondents GSB Bank LTD and Swiss Valorem Bank have never been chartered or licensed by the Office to do business in the state of Florida as a financial institution.
Respondents have never been members of the Federal Deposit Insurance Corporation (FDIC), any any funds deposited with Respondents are not insured by the FDIC.
OFR did find “GSB USA”, a Florida shell company that lists Josip Heit (right) as its Director and President.
I don’t believe GSB USA has ever been disclosed or mentioned in GSPartners’ marketing material.
In addition to committing securities fraud, OFR also points out various GSPartners disclosure failings.
Respondents failed to disclose and continue to fail to disclose facts material to the investments being offered.
Specifically, the following information relating to GSB Group was not disclosed:
- the identity of all officers, directors and control persons
- the business repute, qualifications and experience of officers, directros, and other control persons
- the physical location and branch offices
- the assets, liabilities, revenue, and other financial information
- the legal relationship, including the existence and material terms of any contracts or affiliations between related parties
- all material facts associated with the use or intended use of investors’ funds to generate promised investment returns
Citing “ongoing immediate danger” to consumers, OFR warns
money invested in MetaCertificates may result in substantial losses for Florida residents.
Money held at Swiss Valorem Bank and GSB Bank LTD may result in substantial losses for Florida residents.
Given Respondents’ multinational ties, Respondents may divert investor funds outside of the U.S. and thereby evade the jurisdictional reach of the U.S. courts and legal efforts to return investor funds to their rightful owners.
Entities and individuals that falsely hold themselves out the public as authorized and qualified to operate as a financial institution pose an immediate danger to the public health, safety, or welfare, and particularly to those depositors or creditors who rely upon those false representations.
Respondent’s actions, including internet website publications, social media and online video postings and mobile application offerings, are unlawful and the current circumstances constitute an ongoing and immediate danger to the public health, safety, or welfare.
Respondents’ actions are likely to continue for the foreseeable future, and an immediate final order is necessary and fair under the circumstances to stop the ongoing violation.
The OFR’s final order, issued on November 17th, requires GSPartners, Josip Heit, Brian Cromley and Ruel Milson to “immediately cease and desist all continuing violations of (Florida law).”
- the offer or sale of unregistered securities
- making material omissions and misleading investors
- conducting unauthorized banking activities and
- making unauthorized claims of being a bank and financial institution
OFR’s order effectively bans GSPartners and promotion of GSPartners across Florida.
GSPartners, Heit, Cromley and Milson are entitled to request a judicial review to contest OFR’s findings, or file an appeal.
Any such requests must be submitted within twenty-one days from November 17th.
BehindMLM also recently confirmed ongoing CFTC and SEC investigations into GSPartners.
As part of a joint operation with their US counterparts, earlier this week the British Columbia Securities Commission took further action against three GSPartners promoters.
The Australian Securities and Investments Commission added GSPartners to its Investor Alert List on November 15th. South Africa’s FSCA also issued a GSPartners securities fraud warning on November 22nd.
Given the scope of GSPartners’ fraud across the US and involvement of federal regulators, it’s highly likely the DOJ are also building a criminal case.
To date neither Josip Heit or any GSB executives have addressed the GSPartners regulatory enforcement actions.
Instead, sometime over the last few days GSPartners announced a “booster” scheme.
Under the new booster scheme, GSPartners investors are encouraged to make an additional 20% investment of their original deposit.
This is done on the promise of
- a 50% increased end-of-contract bonus;
- resetting of existing 52 week contracts; and
- a new equal value investment position in GSPartners’ new “Success Series” certificates scheme (equal to the original amount invested into a prior certificates scheme)
Notably, the booster scheme effectively pushes back the lump sum bonus GSPartners has to pay out at the end of existing contracts by up to 30 months.
In light of regulatory enforcement action from the US, Canada, South Africa and Australia, why GSPartners is desperate to dodge upcoming end-of-contract payouts should be obvious.