Back in mid September BehindMLM received a cease and desist from Avi Perry, an attorney at Quinn Emanuel Urquhart & Sullivan (Quinn Emanuel), acting on behalf of GSB Gold Standard Corporation and owner Josip Heit.

In a nutshell, Perry objected to BehindMLM’s ongoing reporting on GSB’s and Heit’s alleged securities fraud.

While I did respond to the cease and desist I didn’t publicly report about it at the time. The notion that Heit’s attorneys would stand before a Judge and argue GSB and Heit hadn’t committed securities fraud, in light of receiving over a dozen regulatory fraud warnings and enforcement actions pertaining to securities fraud, was ridiculous.

On October 10th Quinn Emanuel published a press-release titled “Multiple U.S. and Canadian regulators agree to drop fraud charges against Josip Heit and GSB Germany as part of expanded settlement“.

Cited as a “related matter”, Quinn Emanuel stated;

In a related matter, Mr. Heit and GSB Germany also served a cease-and-desist notice on BehindMLM.com, a website that has published false and defamatory statements about Mr. Heit and his companies.

Many of BehindMLM’s posts about GSB Germany and Mr. Heit have been subject to injunctions and take-down orders in courts throughout the world.

First on a matter of principle, BehindMLM is certainly not a “related matter” within the context of GSB’s and Heit’s fraud charges. Dropped or no, GSB’s and Heit’s fraud charges are theirs alone.

Evidently what I thought was too silly to make public last month, is now a marketing point to deflect from GSB’s and Heit’s pending fraud charges settlement with North American regulators.

In the interests of transparency and allowing consumers to make up their own minds, today BehindMLM will be publishing Quinn Emanuel’s cease and desist. This includes subsequent email communication between myself and Avi Perry.

As received by Avi Perry (right) on September 12th, 2024;

Re: Cease and Desist Notice

Dear Sir or Madam:

I represent Josip Heit, GSB Gold Standard Corporation AG, and certain other affiliated entities, some of which do business as GSPartners.

I write to demand that you immediately cease and desist defaming Mr. Heit and GSPartners on your website, BehindMLM.com.

Your years-long campaign of harassing and defaming my clients clearly shows malice and a complete disregard for the truth. Mr. Heit has ample grounds to bring claims against you in the United States and elsewhere, and he will vigorously enforce his rights.

As you are aware, Mr. Heit recently announced a very favorable settlement with state securities regulators in Alabama, Arizona, Arkansas, Georgia, and Texas in connection with their civil investigations into GS Partners.

Other states and jurisdictions are joining the settlement every day.

The settlement term sheet is public, and indeed you link to the term sheet in your September 10, 2024 blog post, GSPartners Settles Securities Fraud, US Investor Refunds.

The very first term makes clear that my clients have made no admissions in connection with the settlement, and they
will face no allegations of fraud upon completion of the settlement process.

The settling states have expressly agreed to “withdraw . . . all prior allegations of fraud or dishonest, unethical practices” by my clients.

Yet, despite your knowledge of the settlement terms, you insist on publishing lies on BehindMLM.com.

For example, in your September 10 blog post, you falsely assert, both in the body of the article and again in the comments section, that Mr. Heit is “admitting to fraud,” and has “admitted to fraud.”

He is not. The term sheet makes crystal clear that my clients have not, and will not, admit to any fraud or other misconduct as part of the settlement.

You also assert in the September 10 blog post, with no apparent basis, that “[s]everal federal investigations into GSPartners and Josip Heit remain active.” To my knowledge, that claim is false.

Finally, in connection with unwarranted commentary about Mr. Heit’s ability to pay refunds to former GSPartners customers as part of the settlement, you make the disparaging comment that you “[c]an’t imagine the Romanian mafia is too happy about any of this.”

Mr. Heit has no connection to organized crime, and your false insinuation that he does has caused emotional distress and reputational harm.

You must immediately retract these statements and cease and desist from making similar defamatory statements about my clients. Please confirm by no later than September 16, 2024, that you will do so.

Please consider this letter to provide notice of your obligation to preserve all documents, tangible things, and electronically stored information, existing in any form whatsoever, that may be relevant to your malicious defamation and harassment of Mr. Heit and GSPartners.

For the avoidance of doubt, you must preserve all documents and communications regarding Mr. Heit and GSPartners.

This preservation demand is continuing and includes all computer, messaging, or social media files that might otherwise be subject to automatic deletion, or metadata that might be altered or changed by computer programs.

Until instructed otherwise, you must suspend and/or disable any automatic deletion policies currently in place that could result in the deletion of any of the above-mentioned categories of information.

My clients reserve all rights.

If you have questions regarding this letter, I may be reached at the number listed above.

Sincerely,
Avi Perry

On September 13th I replied;

Hi Avi,

BehindMLM never claimed Heit admitted to fraud in the Term Sheet. We quoted a public press-release issued by the Texas State Securities Board.

Assuming the respondents successfully return deposits to clients as required by the term sheet, 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 consent order will replace any prior administrative actions filed by state securities regulators in participating jurisdictions solely as those prior administrative actions relate to the respondents.

BehindMLM linked to both the Term Sheet and TSSB press-release in our article.

You can access TSSB’s press-release on their website:

https://ssb.texas.gov/sites/default/files/2024-09/GSB_PressRelease_1.pdf

The quoted section above is on page 4, pg. 4.

BehindMLM has simply quoted the TSSB and discussed their published statements. If you have an issue with something the TSSB has publicly stated I suggest you take it up with the TSSB.

Josip Heit’s connections and associations with organized crime figures in Romania are well-documented and researched. The BehindMLM article below links to several source articles in Romania.

https://behindmlm.com/companies/gspartners/behindmlm-is-under-threat-gspartners-the-nysc/

More recently Heit’s Romanian criminal associations and business partners were researched by Croatian media covering a corruption scandal into a hydroelectric project Heit was involved in.

One of his associates with whom he has excellent friendly relations and calls him brother is Alex Bodi (in the company of Josip Heit in the photo below). 

Romanian Newsweek reveals that he was arrested in 2020 on suspicion of forcing several women into prostitution. Bodi’s best man is Adrian Tâmplaru , an associate of the infamous Romanian mobster Ioan Clămparu , who is currently serving a 30-year prison sentence . 

After his arrest, Tâmplaru started his network of human trafficking and prostitution.

Heit’s connections and associations to organized crime figures in Romania is in the public sphere and has been for many years.

Finally, BehindMLM reported on multiple federal investigations into Heit and GSB Group last year.

https://behindmlm.com/companies/gspartners/gs-partners-josip-heit-under-federal-investigation-in-us/

Whether you are personally aware of these investigations or not is neither here nor there.

Based on the above, BehindMLM won’t be taking any action on your request.

Please note BehindMLM reserves the right to forward this communication and any future communications received to our US regulatory and law enforcement contacts.

-Oz

To which Avi replied;

Oz,

Much of what you say below is demonstrably false. For instance, you write below that “BehindMLM never claimed Heit admitted to fraud in the Term Sheet.”

Yet in your Sept. 10 post, you state that “[i]t’s likely GSB Group and Heit admitting to fraud will be cited in any pending federal civil and/or criminal fraud charges.” To be clear, neither Mr. Heit nor any GSB entity has admitted to fraud.

Further, the settling states have expressly agreed to withdraw all previous fraud allegations. That is an essential term of the settlement, and is clear on the face of the term sheet.

Therefore, you should not persist in making false claims such as “GSPartners settles securities fraud,” or “GSB Group and owner Josip Heit have settled allegations pertaining to their fraudulent GSPartners investment scheme,” or referring to the settlement as a “fraud settlement.”

Finally, it is inaccurate to report, per your Sept. 10 post, that “Several federal investigations into GSPartners and Josip Heit remain active.” There are not, and you lack any basis for that assertion.

Whatever sourcing you may have had for that claim in your Nov. 2, 2023 post, you cannot rely on year-old information to support for a claim that there are active investigations today.

We reiterate our demand that you cease-and-desist from publishing false and defamatory statements. My clients reserve all rights.

Yours,

Avi

To which I replied;

Avi,

Heit admitting to securities fraud is part of the settlement, as disclosed by the TSSB in their press-release.

Assuming the respondents successfully return deposits to clients as required by the term sheet, 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 consent order will replace any prior administrative actions filed by state securities regulators in participating jurisdictions solely as those prior administrative actions relate to the respondents.

Again, BehindMLM never made any claim with respect to Heit admitting securities fraud within the context of a term sheet.

The quoted statement is made within the context of Heit admitting securities fraud as part of the settlement. After which it’s reasonable to expect said act of admitting securities fraud at the state level would be cited in any pending federal civil and/or criminal charges.

I don’t know why you keep bringing up the term sheet. Heit admitting to securities fraud, as disclosed by the TSSB, is in the second part of the settlement.

The settlement is in relation to alleged securities fraud, making it a securities fraud settlement. It’s reasonable to shorten this to “fraud settlement”.

Feel free to forward evidence from US federal authorities that there is currently no federal investigation into Heit or GSB, as you’ve definitively claimed.

Failing which, these links might prove educational:

https://secwhistlebloweradvocate.com/how-sec-investigations-work/

https://candicefieldslaw.com/preindictment-federal-criminal-investigations/

https://seclaw.com/long-sec-investigation-take/

-Oz

To which Avi replied;

Securities fraud is NOT the same as a registration violation. The former requires an intent to defraud.

The latter requires only the sale (or offer) of securities that were not registered. Heit’s settlement is

(1) based on an alleged registration violation, NOT fraud; and

(2) does not involve any admissions. That is clear in the term sheet and the press releases.

To which I replied;

Failure to register a securities offering is illegal and a violation of state securities law. Offering/selling unregistered securities is also a felony at the federal level.

Violation of state securities law = securities fraud. There is no exemption for intent with regards to committing securities fraud by offering/selling unregistered securities, either at the state or federal level.

I’m not going to get into an argument about the degree of securities fraud your client will admit they committed as part of the pending consent order. It’s irrelevant.

-Oz

To which Avi replied;

This isn’t a debate. Please understand that, if you persist in falsely stating that my client has made admissions or has committed securities fraud, we will take appropriate action.

Avi’s last email above was on September 22nd. By then I’d forwarded Quinn Emannuel’s cease and desist to our contacts in US law enforcement and honestly, hadn’t thought about it again till today.

One retrospective note I’ll add, and I’ll forgive Avi for perhaps not knowing it at the time as I didn’t either, is that Heit (right) is in fact a convicted fraudster.

On September 22nd, the day of Avi’s last email, a Croatian journalist reported on Heit’s conviction for financial fraud in Luxembourg and subsequent prison sentence. This is of course prior to Heit’s involvement in Karatbars International and GSPartners.

On the topic of fraud and just so we’re clear, this is the terminology used by North American regulators to describe GSB’s and Heit’s relevant conduct;

  • “fraud, deception and the concealment of operational information”
  • “fraud, deceit, and the blockfolios”
  • “fraud, deceit, and the use of internal tokens”
  • “fraud and the concealment of the use of principal”
  • “fraud, deception, and the market protection system”
  • “fraud, deception, and the performance of prior offerings”
  • “fraud, deception, and the LYS staking pools”
  • “fraud and deception and G999 coin”
  • “Respondents are engaging in fraud in connection with the offer for the sale of securities”

And that is just one example from the dozen plus securities fraud related cease and desists and enforcement actions GSB and Heit received.

BehindMLM correctly maintains that violating state and federal securities laws in the US constitutes securities fraud and will continue to do so in our reporting.

If for what other reason do securities laws exist other than to explicitly prohibit securities related fraud?

One last point that I’ll address from Quinn & Emmanuel’s October 10th press-release is:

Many of BehindMLM’s posts about GSB Germany and Mr. Heit have been subject to injunctions and take-down orders in courts throughout the world.

Officially from memory there’s two or three BehindMLM URLs Heit had a court in Hamburg order blocked in Germany. This was done on an ex-parte manner and, based on what legal documentation I’ve seen, based on nothing more than a sworn affidavit from Heit.

When it became clear Heit would continue to target BehindMLM through German courts, Google and I came to the agreement it was just easier to block BehindMLM’s GSPartners reporting across Germany.

This isn’t a secret, it’s something I’ve publicly addressed.

It’s also no secret that, as part of ongoing attempts to suppress public participation and discourse on GSB and himself, Heit tried to enforce his shenanigans in Germany through the New York Supreme Court.

Across allegations of defamation, extortion and general criminality, the thrust of GSB’s NYSC petition was, to quote one of Heit’s fellow countrymen, “if you repeat a lie often enough it becomes the truth”.

As part of the proceedings, Heit had no less than three opportunities to present evidence to support his allegations against BehindMLM.

Heit failed to do so (because there isn’t any evidence). Subsequently, this was the outcome.

The one positive that came from Heit’s NYSC petition was that a precedent was set, prohibiting frivolous petition filings unsupported by evidence in New York.

Unfortunately that doesn’t stop Heit using different lawyers to continue to harass, intimidate and threaten BehindMLM.

Thankfully as we’ve seen in TSSB’s GSPartners securities fraud cease and desist (par. 130-143), this conduct doesn’t go unnoticed by US authorities.

Across fourteen years and over ten thousand published reviews and news articles, BehindMLM has consistently been at the forefront of MLM related consumer awareness.

Our ongoing research has been cited in multiple US regulatory fraud lawsuits and law enforcement actions.

Josip Heit meanwhile:

  • has been convicted of financial fraud in Luxembourg and sentenced to prison
  • is linked to organized crime interests in Romania (as researched and reported by journalists in Romania and Croatia)
  • is the recipient of over a dozen GSB regulatory fraud warnings and/or enforcement actions in the US, Canada, Australia, South Africa, the Bahamas and New Zealand
  • entered into a settlement agreement to resolve allegations of fraud in North America, through which Heit and GSB “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”
  • is required to pay back North American GSPartners investors as part of aforementioned settlement

Later today GSB is holding a “Global Community Event”, purportedly featuring speakers who are still subject to fraud related enforcement orders across North America.

I don’t know if BehindMLM will come up and it doesn’t matter. GSB’s, Josip Heit’s and BehindMLM’s respective track records speak for themselves.

 

Update 6th December 2024 – A December 5th Bloomberg article, citing US authorities, confirms fraud charges against Josip Heit have not been dropped.

Heit said in a statement that the charges were dropped, although regulators denied that was the case.

Heit still has to repay money to investors before the settlement is finalized.

Joe Rotunda, Enforcement Director at the Texas State Securities Board, quoted the Bloomberg article;

Snip from today’s @bloomberg article relating to Josip Heit, allegedly claiming charges brought by several US states were dropped. #josipht #gspartners #gsp #no1 #apertum #scamkillers #dubai #crypto

Heit’s apparently running around telling people the charges have already been dropped when they haven’t.