GSPartners settles securities fraud, US investor refunds
GSB Group and owner Josip Heit have settled allegations pertaining to their fraudulent GSPartners investment scheme.
As part of the settlement, reached with state securities regulators in Texas, Alabama, Arizona, Arkansas and Georgia, US investors in those states will receive refunds.
The GSPartners fraud settlement with US regulators is broken down into two phases.
The first phase will see GSPartners US investor refunds handled by third-party AlixPartners LP.
The Texas State Securities Board (TSSB) cites AlixPartners LP as
a firm consisting of more than 3,000 experienced personnel drawn from the Federal Bureau of Investigation, Internal Revenue Service, Securities and Exchange Commission and other public and private organizations.
GSB Group and Heit will be footing the bill to cover all of AlixPartners LP’s expenses.
GSPartners investors in the settling states will be able to claim losses pertaining to all of GSPartners’ failed investment schemes. This includes G999 token, XLT vouchers and metaportfolio certificates.
The terms of the settlement permit other states to join under the reached terms if they wish.
This is extended to Canadian regulators, who also filed multiple fraud warnings against GSPartners and Heit (right).
Following the execution of the term sheet, the Texas State Securities Board and other participating states will begin notifying clients and coordinating with AlixPartners.
In the near future, participating states will announce the date that clients can begin taking steps to participate in the claims process.
A copy of the GSPartners settlement Term Sheet is available on the TSSB’s website.
The TSSB “strongly encourages” GSPartners victims to contact them with respect to “begin[ing] preparations”.
“If you live in Texas, and you purchased any product or service from GS Partners, please reach out to us as soon as possible.
We can help you begin preparing for the claims process,” said Financial Examiner Seth Oufnac.
It’s assumed the same applies in other states GSPartners has settled with.
The second phase of the GSPartners fraud settlement kicks in once victim claims have been finalized. And of course assuming Heit pays up.
GSB Group and Mr. Heit will consent to the entry of an enforcement order that concludes they illegally offered and/or sold securities that were not registered pursuant to state law.
The pending enforcement order is likely to include an injunction, permanently prohibiting further securities law violations by GSB Group and Heit in the settling US states.
TSSB notes that
under Texas law, violation of a cease and desist order is classified as a third degree felony punishable by incarceration for a term of not more than 10 years or less than 2 years.
TSSB also notes the pending consent order does not apply to prior fraud allegations against respondents Swiss Valorem Bank LTD, Dirc Zahlmann, Bruce Innes Wylde Hughes and Aline Lima.
In a September 10th paywalled article covering the GSB Group fraud settlement, Bloomberg cites GSPartners as an “$1 billion illegal cryptocurrency investment scheme“. GSPartners US victim claims are expected to run into “hundreds of millions of dollars”.
Several federal investigations into GSPartners and Josip Heit remain active. It’s likely GSB Group and Heit admitting to fraud will be cited in any pending federal civil and/or criminal fraud charges.
For GSPartners victims in Texas, instructions have been provided by the TSSB.
For GSPartners victims in Georgia, instructions have been provided the Secretary of State.
For GSPartners victims in Alabama, instructions have been provided by the Alabama Securities Commission.
I’ll link to instructions provided by other settling states and/or Canadian provinces as they’re made available.
If you’re a GSPartners victim outside of the settling states and Canadian provinces, contact your state securities regulator for guidance.
If you’re in the US filing an enquiry with the SEC and/or CFTC at the federal level may also be of benefit.
Get Heit to voluntarily refund US investors at the state level (avoiding litigation and delays pertaining to said litigation), then go in with fed charges for the monetary penalties and prison time (after Heit has already admitted to fraud as part of state-level settlements).
Lulz. Very clean.
how does a canadian file to get their money back?
Contact your province securities regulator.
Your article claims that Heit is admitting to fraud, but the settlement says otherwise and that all of the fraud charges are being dropped:
So, what kind of “scam” organization/group proactively works for 9 months on a settlement with multiple states and other countries?
How can Illinois become part of the lawsuit to get investments paid back??
The settlement says all of the fraud charges are being dropped and there is no monetary fine? This seems to indicate it was just a failure to register, and there is no actual misconduct by the respondents.
Why are you saying there is an ongoing fraud investigation? That seems to be false reporting no?
Is withdrawal otherwise still restricted everywhere else with a 50% fee? The rewards stopped a while ago too right? Did they ever restart?
Good deal for US/Canada investors/victims here being able to get money back, but elsewhere in the world are funds still stuck? I wonder where they money to pay those people back will come from…
How do I file a claim, as I live in Minnesota>! Thank you.
Huge win for anyone in the US to get their money back. Let’s hope it happens.
@Victor
It does and that’s straight from the TSSB.
Again, the settlement is in two phases. The first will see a refund to US victims, after which existing fraud warnings will be withdrawn.
This is because, at least in Texas, securities fraud is a criminally actionable. This provision to “redact or amend” previous fraud warnings/orders is to ensure Heit isn’t hit with enforcement at the state level after paying hundreds of millions in restitution.
That’s the Term Sheet, after which it has been executed (i.e. GSPartners’ US victims are refunded in full), as per the TSSB;
That is the full terms of the settlement. It’s in two parts as per the TSSB. I’m not claiming this, I’m literally repeating what the settling regulators have stated publicly.
Most of that money has been spent already, so I don’t think these refunds will go down well.
@James
Heit’s terrified of being arrested. He can’t take back committed securities fraud so it’s either play ball or, when the time comes, face worse consequences.
Make no mistake, US and Canadian GSPartners victims recovering hundreds of millions from Heit is a big consumer protection win (assuming Heit pays up).
Typically restitution comes at the end of legal proceedings, and if the defendant is oversees recovery can be complex. With GSPartners, at least on paper, it’s going to be very straightforward and processed via a neutral third-party.
Restitution however is only one part of the securities law violation enforcement equation. There’s still monetary penalties, disgorgement and prison time.
As far as the states are concerned (as per the reached settlement), they’re happy with their residents being refunded. Logically that punts civil penalties, disgorgement and prison time to the federal authorities investigating GSPartners and Heit.
Hell, when the time comes Heit agreeing to restitution might even result in a sentence reduction whenever we get to that.
For those of you new to prosecution of MLM related securities fraud in the US, a good recent example is NovaTech FX (~$2.3 billion).
NovaTech FX launched in 2019. US/Canadian state/provincial fraud warnings began in 2022.
New York sued NovaTech FX in June 2024. After months of investigation, the SEC moved in at the federal level in August 2024. It’s assumed sealed indictments have been filed pending arrests (the NovaTech FX co-founders fled to Panama).
There is of course no timeline for anything. The point is, with respect to the larger MLM Ponzi schemes, typically federal cases follow state-level cases.
Nothing at the state level has any impact on the pending federal investigations into GSPartners.
Thus the regulatory plan for GSPartners seems to be secure restitution at the state level, and then move in for monetary penalties, disgorgement and prison time at the federal level.
@Michelle and @Ray
You need to contact the securities regulator in your state.
In Illinois that appears to be the Securities Department within the Secretary of State.
In Minnesota that appears to be the Securities division of the Minnesota Department of Commerce.
Note neither Illinois or Minnesota took action against GSPartners and Heit. I’m not sure what that means with respect to participation in the reached settlement. Best to ask your state securities regulator for clarification.
I see Georgia has issued instructions to Georgia resident victims of GSPartners. I’ll add instructions from each state to the article as they become available.
@Philips
The fraud charges aren’t being dropped. They’ve been settled at the state level. See my comments above in #11.
Also, as per the TSSB, the settlement is in two phases. Restitution is the first part. GSB Gold and Heit acknowledging fraud is in the second phase.
The bottom line is if Heit wanted to clear his name, all he had to do was rock up at the originally scheduled September 2024 Arizona hearing and make a case for legalization of securities fraud in the US.
That didn’t happen, and instead Heit has consented to restitution expected to run into the hundreds of millions.
It would have certainly cost far less to attend the Arizona hearing. Why that didn’t happen though should be obvious.
Failing to register securities = offering unregistered securities = misconduct (violation of both state and federal securities laws).
What happens at the state level has no bearing on ongoing federal GSPartners investigations.
If you think a billion in fraud that mostly targeted US residents is going to go unanswered beyond restitution, good luck with that.
Optimism might best be tempered.
A failed ponzi scheme owes a hell of a lot more money to it’s victims than it could ever afford to repay. This is the same math which put them out of business in the first place.
Where is Josip Heit going to get the money to pay restitutions? Out of his own back pocket? Surely not.
@MD
GSPartners ceased withdrawals when it collapsed in late 2023. Victims outside the US and Canada remain screwed out of their money.
@Glim
This is one thing I didn’t address because I honestly don’t know what’s going to happen.
If AlixPartners LP provides Heit with the restitution bill and he can’t pay, state and federal regulators are going to eat that up.
If the restitution bill is paid, that money is obviously pooled from US/Canadian and offshore investor funds. The latter for which there is no restitution.
The question is whether there’s enough left, sans MLM commissions and whatever Heit, his accomplices and top GSPartners recruiters stole, to satisfy the pending restitution bill.
Or even if the money is sitting in accounts in Dubai or whatever, if Heit wants to pay the bill amount once it’s finalized.
I can’t answer that but I guess over the coming months we’re going to find out. Can’t imagine the Romanian mafia is too happy about any of this.
Just passing along from up line. They are thrilled with news. Are expecting more good news to come. They see the fraud dropped as a big win, they expect not only refunds but full pay outs for its members.
This means all money on the site not just money they deposited. They also expect with this news that Heit will develop another spin off and everyone can start a new and rebuild their teams and wealth again with it.
They view that they are the ones with the upper hand and have agreed to do this settlement. So they can swipe the slate clean and start a new mlm asap.
They claim that this was just red tape that got them into this and the settlement was again a big win and heit and company new mlm will now know how to legally operate in the US.
AlixPartners LP is effectively a Receivership handling claims (without taking control of the collapsed Ponzi).
As with any restitution claims, only personal investment losses are covered. This doesn’t include backoffice ROI amounts and owed commissions.
This is from the NASAA;
nasaa.org/73192/state-provincial-securities-regulators-settlement-josip-heit-gs-partners/
Yas plz, more securities fraud. That’s of course the smart thing to do when your previous Ponzi was taken down by the largest state-level coordinated action we’ve ever seen. And federal investigations are ongoing.
Double down on the fraud, if only for the lulz.
How to legally operate in the US with respect to securities has remained unchanged since 1933. They Howey Test from 1946 certainly made things clearer.
The problem for GSPartners has never been figuring out how to legally offer securities in the US. It’s that Heit can’t file audited financial reports with the SEC proving external revenue because… well, y’know.
(Ozedit: spam removed)
Above two links posted by Bruce Hughes on FB. Three news sites have picked up this important story, Josip’s version must be correct then.
Those aren’t news sites, they’re PR spam sites owned by Heit (Nottingham Guardian, Fort Worth Press etc.). Note the “imprint” link at the bottom, legal requirement for German owned websites.
https://behindmlm.com/companies/gspartners/re-gsb-gold-standard-corporation-litigation-misinformation/
Stick to press-releases from the regulators involved, the actual settlement document and actual news sites (Bloomberg etc.).
what happened to their “Blockchain centric” platform?
youtube.com/watch?v=lHSr4nNB9aw
pro tip – watch from the 20th minute
FTFY.
Gunna be a shitshow if AlixPartners LP has to deal with a high percentage of claims that don’t match GSPartners’ incomplete/doctored records.
Popcorn stonks rising!
Again upline blowing up all night. Cliff Notes:
1) This is what theyve expected the entire time. Fraud charges dropped means they are not in the wrong. They just did a few things wrong that the US needs corrected to continue forward. If they really had something of substance on them, the US would have dropped the hammer and did not.
2) They are doing these re-funds to hurry up and end the process so they can begin another process. Think they’ll be a way to move funds directly from this into the next MLM
3) the second phase of these settlements will be even better for GSP.
4) Are encouraging people to NOT ask for this refund. They claim to wait until part 2 of the settlement comes out. Will get all funds promised not just refund on deposits.
5) new products are already here that will be able to comply with or get around the US law and business will turn back on and money will be made.
Quoting for the lulz.
There is no part 2 with respect to refunds. You have 90 days to file a claim after AlixPartners LP has set things up in your state and then it’s sorry for your loss (again).
this may explain why there was a problem with their record keeping…
Oz – did you see that bit about them having to won assets / property worth their refund quantum or more to ensure they are solvent. Do you think the regulators accepted property from Lydian world as proof?
This isn’t unreasonable. GSPartners rebooted its metacertificates scheme every time the old certificates came up for withdrawal.
The ROI liabilities, like in any Ponzi scheme, are of course ridiculous. But paying out US investors only what they invested minus commissions is possible, albeit at the expense of victims outside the US and Canada.
Now if this was a worldwide settlement it’d be a different story.
As for verification of GSB Group’s assurance it can pay out, that’s only “trust me bro”. There doesn’t appear to have been any verification on the regulatory side.
Bit hard to verify the amount when, at this stage, the refund amount is unknown.
Added regulatory instructions from the Alabama Securities Commission.
@james what kind of organization? The wheel has not even completed its full revolution yet. Give it a chance.
Anyone who believes Heit is going to voluntarily pay victims back is incomprehensively gullible.
How does Heit plan on getting this money back to his victims. He sure isn’t going to give up the expensive lifestyle of yachts, fast cars, and escorts.
New ponzi scheme for the Philippines / South Africa / India victims? Punt sales of the existing schemes?
Heit will pay this out because he cannot and will not be able to start another company (MLM/Ponzi) without doing so.
Again from upline:
Do not take the refund. They actually think that there will be a way to roll funds straight from GSP into the next business venture by Heit and company. The word is they’ve already got new products ready to roll out.
If that is Heit’s plan. Then paying out the deposit money, which is a fraction of what was promised, will be pennies for Heit.
@johnny5
Its Auratus, the more I think about it those that don’t take a refund ie those outside the states will likely have been told they can roll their meta certificates to ZAI cards and then they can recruit fresh into the US with Auratus.
@Aurelius
I dont know much about that, but I trust you on it. But per 2 different uplines. The fraud charges dropped were the big part of the settlement, becuase that means Heit didnt break any laws.
If he didnt break any laws, he can still operate inside the US. New products are in the works. Business will open back up soon. The 2nd part of the settlement will be good for GSP. All that is what uplines are preaching currently.
MY OPINION:
The money never was what they were pushing for. He’s going to refund the deposit money, which is again pennies. And then start a new with something different, hoping to roll all the GSP people with him.
@Jhonny5 and @Aurelius
Billionico and Auratus Gold have C&D orders in place with the Regulators in Texas (who seem to be driving this whole thing). I don’t think that they would roll with those two as it would likely be dead in the water for the same reason GSP was.
It’s likely something new all-together.
What i have to wonder about is, if these are seen as refunds – will there be a clawback on the commissions earned by the upline?
Perhaps they play along with the refund settlement at first, then “mysteriously” get hacked and all the funds are gone… oh, what a shame, “we really wanted to refund all those US and Canadian participants that were sooo eligible.”
Popcorn time!
1) There are going to be some people that dont even realize this is an option.
2) There are going to be people that get 0 money back because they have already withdrawn more than they deposited.
3) With the uplines preaching to NOT cash out and telling people they will be able to roll it into something more lucrative in the future, this again will limit people trying to cash out.
The amount that Heit and Company will be very little in the big scheme of things. Paying this out keeps him out of jail and allows him to run his next scam in the US. I dont see why he wouldnt pay this out and move on. Seems like a slap on the wrist.
Or he can avoid jail by going to Dubai like all the other scammers and keep the money for himself.
What are these new products you think he has coming out? The guy is a ponzi scammer. “We took your money and ran the last few times, but reinvest it again in our new scheme and we promise that we will actually pay this time.”
@Concerned
Not as part of the state-level settlement. The SEC has started going after top promoters in recent MLM securities fraud cases.
Widespread clawback litigation is typically initiated by a Receiver. We’re probably past that with respect to GSPartners given it collapsed almost a year ago.
Call on Friday for an update. Upline still telling everyone to hold tight, not take settlement, that everyone will be paid in full and new products are ready to go to re-open business. This call is to give everyone a time line.
In the meantime Josip Heit has been sunning himself in the south of France, having a great time. Looks like he’s had some meetings with the major players too (as they were tagged in various instagram photos). Every person that doesn’t claim back is another cocktail that Josip can afford to drink (he strikes me as a girly cocktail type guy).