When your clients are busted pushing a $1.18 billion dollar Ponzi scheme, there’s not really much you can present by way of their defense.

Still, they’re paying you money so you’ve got to come up with something.

Cue absurd reasoning and logic from defense attorney Leota Schuster. [Continue reading…]

For those unfamiliar with it, California’s Political Reform Act

• requires reports of receipts and expenditures in campaigns for state and local offices and ballot measures.
• limits expenditures for statewide candidates and measures.
• prohibits public officials from participating in governmental decisions affecting their “financial interests” and requires certain public officials to disclose certain assets and income.
• requires lobbyists to register and file reports showing receipts and expenditures in lobbying activities.

Point three, emphasized in bold above, is sure to be keeping a certain Arcadia City Councilman up at night… [Continue reading…]

The strongest indication that Steve Chen has not fled the US yet, comes today via two SEC filings.

Following the granting of a TRO against USFIA and Chen last month, at some point in the future a preliminary injunction hearing would need to take place.

If granted, a preliminary injunction would make permanent the closure of USFIA and prevention of Chen from conducting further securities fraud.

It would also pave the way for recovery efforts to secure funds Chen and top investors and insiders stole from USFIA victims.

In a filing by the SEC dated October 5th, pertaining to consent by USFIA, the following paragraph appears: [Continue reading…]

The SEC’s civil case against USFIA has finally been unsealed, with a declaration filed by SEC attorney spilling details on the investigation.

As per a declaration by Peter Greco, filed on September 28th;

In November 2014 the SEC began to receive information from individuals claiming to have invested in, and been defrauded by USFIA.

The matter was assigned to me for investigation.

It was in these initial stages of the investigation that the SEC became aware of a concurrent FBI criminal investigation.

At about the same time, I was informed that the FBI was conducting its own undercover investigation into USFIA.

I had several conversations and meetings with representatives of the FBI to discuss coordination of our respective investigations.

At the forefront of these discussions was concerns from the FBI that an overt SEC investigation might compromise criminal proceedings.

The criminal authorities were concerned that overt investigatory efforts by the SEC might compromise their undercover investigation and alarm one of the subjects of that investigation, whom they believed to pose a flight risk.

The individual referenced above is almost guaranteed to have been Steve Chen, owner of USFIA (right).

Taking the FBI’s concerns under advisement, the SEC struck a deal with the agency that would see them take a back seat.

Accordingly, an agreement was reached that the SEC would, at least temporarily, refrain from issuing subpoenas or taking other overt investigative action, and the criminal authorities would share bank records and other documents and information it obtained in the course of its investigation.

Had the FBI of not been investigating, we might have seen regulatory action taken against USFIA much sooner. On the flip side though, the FBI were given additional time to put together a concrete criminal case against Chen.

Greco’s declaration goes on to identify several top promoters of GemCoin, based out the various countries it solicited investment in:

• Wendy Liu (USA) – owner of alliancefinancialgroupusa.com and ahomeusa.com (used by Steve Chen to offer EB-5 visas to USFIA investors)
• Richard Mertz & Numora International Inc. (USA) – owner of gemcoin-usfia.com
• Phillippe Dupuis (France) – owner of gemcoin-investment.com
• Tze Hong Sim (Singapore) – owner of investgemcoin.com
• Ethan Zhang (Canada) – owner of 1gemcoin.com, identifies Yan Chen (Steve Chen’s brother) as the purported owner of an amber mine in the Dominican Republic
• Sebastian Catusse (Switzerland) – owner of gemcoin.ch and usfia.ch

Also detailed specific experiences by USFIA investors, detailing the spectacular claims used to market USFIA and the ultimate collapse of the scheme. [Continue reading…]

BehindMLM reader “Ben” has been recording statistical data pertaining to OneCoin accounts for some time now.

Yesterday Ben shared an abnormality pertaining to OneCoin accounts in Bulgaria, in that during the month of September, the number of Bulgarian OneCoin accounts had been wiped to zero.

Now a reason has emerged potentially explaining why. [Continue reading…]

There is no information on the Blue Online System website indicating who owns or runs the business.

The Blue Ocean Online System website domain (“boos.business”) was registered on the 16th of September, with “Futurenet INC” listed as the owner. An address in the Marshall Islands, an offshore tax-haven, is also provided.

FutureNet Inc. first appeared on BehindMLM’s radar as part of the FutureNet opportunity.

FutureNet was a $1685 six-tier Ponzi cycler. Alexa statistics reveal the business is still chugging along, with Turkey, Khazakstan and Romania account for over 50% of traffic to the FutureNet domain.

Thors Albers of Falkito fame was the only name we were able to peg to FutureNet, however I wasn’t able to find anything linking him to Blue Ocean Online System.

A marketing video on the Blue Ocean Online System website was uploaded to the YouTube account “Stephan Morgenstern” on September 22nd.

Morgenstern was promoting FutureNet on his Facebook profile in November 2014, around the time it launched.

Recent marketing post to Morgenstern’s Facebook profile suggest Blue Ocean Online System is a new opportunity within FutureNet itself:

This suggests that FutureNet might be cash-strapped, hence the need to launch a new “Power Matrix” opportunity.

Morgenstern’s Facebook profile location is set to Berlin in Germany, which is likely where Blue Ocean Online System is being operated from. Morgenstern’s specific role within Blue Ocean Online System and FutureNet meanwhile remain unclear.

Read on for a full review of the Blue Ocean Online System MLM business opportunity. [Continue reading…]

There is no information on the MTX System24 website indicating who owns or runs the business.

The MTX System24 website domain (“mtxsystem24.com”) was registered on the 28th of September 2015, with a “Lukasz Duda” listed as the domain owner. An address in Losice, Poland is also provided.

Possibly due to language barriers, I was unable to find any further information on Duda.

Read on for a full review of the MTX System24 MLM business opportunity. [Continue reading…]

Listed as Founders on The Elite Networker website are Wallace Nuanez, Val Smyth, Dave Lear and Dan Putnam.

With the exception of Putnam, The Elite Networker’s Founders launched Total Takeover earlier this year.

Total Takeover saw affiliates pay $89.95 a month and get paid to recruit other affiliates who did the same.

The scheme collapsed shortly after launch, but not before withholding owed commissions to affiliates who stopped paying their monthly fees.

Dan Putnam (right) is the Founder of EPX Body and the more recently launched Let Us Close opportunity.

Let Us Close appears to have flopped shortly after launch, with the company’s website now redirecting to that of The Elite Networker.

As per The Elite Networker’s logo, the company is “powered by Let Us Close”.

For all intents and purposes, The Elite Networker would appear to be a merger reboot of both Let Us Close and Total Takeover.

Read on for a full review of The Elite Networker MLM business opportunity. [Continue reading…]

Imagine you had hundreds of thousands of dollars in a cryptocurrency.

After a month of trying to resolve issues converting the cryptocurrency into money you could actually use, you then raised the issue in public.

Next thing you know your entire balance is gone and you’ve been banned from acquiring the digital coin.

Does this sound like a legitimate cryptocurrency offering to you? [Continue reading…]

The culmination of an FBI investigation that began earlier this year, on the 5th of August Daniel Filho was indicted on three counts of wire fraud.

As per the introduction of the indictment, a quick recap of where we’re at:

Beginning in at least June 2014 and continuing through at least June 2015, FILHO, together with others known and unknown to the Grand Jury, devised and intended to devise a schme and artifice to defraud to obtain money and property from individuals by means of materially false and fraudulent pretenses, representations, and promises concerning purported investments in DFRF.

Specifically, FILHO and others acting at his direction promised individuals high returns if they gave their money to DFRF which
would, by way of a private bank in Switzerland, invest the money in highly profitable goldmining operations abroad.

Instead of investing the money as promised, however, FILHO misappropriated the money for his own personal and other uses.

Following a few weeks on the run as a fugitive, the FBI arrested Filho on July 22nd. [Continue reading…]