PonziScams.com Schemes & Due Diligence

The Securities and Exchange Commission has obtained an emergency court order freezing the assets of the alleged perpetrator of an Internet fraud scheme that reaped approximately $72 million from more than 3,000 investors in all 50 states and at least 30 foreign countries.

The SEC alleges that from December 2005 until at least November 2007, Gregory N. McKnight of Swartz Creek, Mich., and his company, Legisi Holdings LLC, sold unregistered securities through a Web site by representing that he would invest the offering proceeds in foreign currencies, commodity futures, stocks, and real estate. He promised to pay interest as high as 15 percent per month out of the profits from his investments. Throughout the offering period, McKnight represented to investors that his investments were profitable and were generating the promised returns. But McKnight invested approximately $33 million, less than half the money he raised, on behalf of investors. Those investments suffered substantial losses. Furthermore, nearly $30 million of the investors’ funds were allegedly dissipated through an unlawful Ponzi scheme and unauthorized personal expenditures by McKnight. The SEC froze millions of dollars of remaining assets controlled by McKnight and Legisi Holdings on behalf of the injured investors.

“This emergency action demonstrates that the Commission can and will move quickly to secure and preserve assets for the benefit of all investors, both in the United States and internationally,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement.

“As alleged in our complaint, McKnight lured investors from around the globe into investing by claiming on his Web site that the Legisi program was legitimate and unlike other ’scams’ and ‘high yield investment programs’ that you see on the Internet. In fact, McKnight’s Legisi program was just that, a scam from beginning to end,” said Merri Jo Gillette, Regional Director of the SEC’s Chicago Regional Office.

On May 5, 2008, the Honorable Judge Paul V. Gadola of the U.S. District Court for the Eastern District of Michigan issued an Asset Freeze Order against all assets of McKnight and Legisi Holdings, LLC, as primary defendants, and against all assets of McKnight’s affiliates, Legisi Marketing, Inc., Lido Consulting, LLC, Healthy Body Nutraceuticals, and Lindenwood Enterprises, LLC, which were named as relief defendants based on their alleged receipt of investor funds. In addition, Judge Gadola issued an order appointing a receiver over all assets of McKnight, Legisi Holdings, and the affiliates.

The court issued the freeze and receivership orders under seal while the assets were being secured, and the seal has now been lifted.

The SEC alleges that the defendants used approximately $27.5 million of the offering proceeds to make payments of purported profits to prior investors in a Ponzi scheme, and McKnight used $2.2 million of investor funds to pay for his personal expenses and to make payments to his relatives.

The SEC action also seeks recovery of the assets McKnight allegedly transferred to his relatives, including his daughter Jennifer McKnight, his niece Danielle Burton, and Danielle Burton’s mother Theresa Burton, all of whom were named as relief defendants based on their receipt of investor funds.

The SEC’s complaint charges the defendants with an unregistered securities offering and securities fraud in violation of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In addition to the emergency relief already obtained, the SEC’s complaint seeks preliminary and permanent injunctions, disgorgement of ill-gotten gains and civil penalties against McKnight and Legisi Holdings, as well as disgorgement of ill-gotten gains from the relief defendants. A hearing on the SEC’s request for a preliminary injunction is scheduled for May 19, 2008 at 2 p.m.

The SEC acknowledges the assistance of Michigan’s Office of Financial and Insurance Regulation, the U.S. Secret Service, and the Commodity Futures Trading Commission in this investigation.

# # #

For more information, contact:

Tim Warren
Associate Regional Director, SEC’s Chicago Regional Office
(312) 353-7394

Kathryn Pyszka
Assistant Regional Director, SEC’s Chicago Regional Office
(312) 353-7416

SEC Charges Global Asset Partners and Joseph C. Lavin For Defrauding Investors In $5 Million Ponzi Scheme

The Securities and Exchange Commission today filed fraud charges against Joseph C. Lavin and his company, Global Asset Partners, LLC (”GAP”), a purported Seattle-based investment fund manager, accusing them of misappropriating at least $5 million from over 100 investors nationwide. According to the Commission, Lavin, 41, of Woodinville, Wash., promised investors extraordinary returns of 18 to 36 percent per year from the GAP investments. Far from producing the promised returns, the Commission’s complaint alleges that Lavin used investor funds to pay for personal expenses for himself and his friends, including lavish trips, automobiles, a Seattle Mariners luxury skybox, and real estate in Costa Rica. Lavin also diverted investor funds to a now-bankrupt Texas real estate project known as Wildflower Resort Company.

The complaint alleges that Lavin told investors that their money would be placed into funds managed by GAP, where it would be invested in foreign currencies and asset-backed securities. Instead, Lavin converted the investors’ money to his own use. In addition, as in a classic Ponzi scheme, Lavin used money raised from new investors to pay purported returns to previous investors. The Commission further claims that Lavin sent false account statements to GAP’s investors showing ever-increasing account balances based upon accumulation of the promised returns. In reality, according to the complaint, the GAP funds never made any money and Lavin fabricated the account balances on the statements to fool investors into believing their investments were profitable and to induce them to make additional investments.

The Commission’s complaint, filed in federal district court in Seattle, seeks to enjoin Lavin and GAP from future violations of the antifraud provisions of the federal securities laws [Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act. The Complaint also requests that the district court order Lavin and GAP to disgorge their ill-gotten gains, plus prejudgment interest and to impose a civil monetary penalty.

SEC Complaint in this matter

http://www.sec.gov/litigation/litreleases/2007/lr20220.htm

Securities and Exchange Commission v. Global Finance & Investments, Inc., Charles R. Davis, Lucre Fund, LLC, JTA Enterprises, William H. Clark, Level Par Investments, LLC, Kelly G. Rogers, Sterling Meridian LLC, Ronald J. Linn Glenn Maske and William F. Dippolito, Defendants, and USAssets & Funding Corp., Nevada Sentry Service Corp., Wells Ventures LLC, Triquestra Management Corp., and CMR Mngt. Group, LLC, Relief Defendants. Civil Action No. 4:07cv346, (United States District Court; Eastern District of Texas; Sherman Division)
SEC Sues Promoters of High Yield Investment Programs For Fraud and Seeks Appointment of a Receiver on Behalf of Investors
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SEC HALTS $45 MILLION PONZI-LIKE PROMISSORY NOTE SCHEME

The Commission, on July 12, filed an emergency action to halt an
ongoing $45 million securities offering that the SEC alleges to be a
Ponzi-like scheme. Named in the Commission’s complaint are Terchi Liao
(a.k.a. Nelson Liao), age 49 of Arcadia, California, and two entities
he controls, also of Arcadia, AOB Commerce, Inc. and AOB Asia Fund I,
LLC. The complaint also names four other Southern California entities
controlled by Liao — AOB Management, Inc., AOB Transportation, Inc.,
AOB Vacations, Inc., and AOB Media, Inc. — as relief defendants based
on their receipt of investor funds. The Honorable Christina A. Snyder,
United States District Judge for the Central District of California,
issued a temporary restraining order halting the securities offering,
appointing a temporary receiver over AOB Commerce and AOB Asia Fund,
and the relief defendants. The court also temporarily froze the assets
of the defendants and the relief defendants.

The Commission’s complaint alleges that since mid-2004, the defendants
have raised more than $45 million from hundreds of investors
nationwide through their unregistered offering and sale of promissory
notes that purportedly pay guaranteed interest of up to 5.5% per
month.

The complaint further alleges that the defendants represent that they
are in the business of making loans to companies in Asia, particularly
China. Although the defendants have made some loans to Asian
companies, they have principally used investor funds to pay the
interest on the promissory notes they previously issued and to pay
commissions to investors who solicit others to invest in the notes.
For example, according to the complaint, in the six-month period from
July 1, 2006 through December 31, 2006, the defendants:

* Raised more than $13.7 million from investors through the sale
of the notes;

* Received less than $375,000 from legitimate business
activities; but

* Paid more than $6 million in interest and commissions to
investors; and

* Loaned or otherwise transferred almost $6 million to four
related entities owned and/or controlled by Liao which are named
in the complaint as relief defendants.

As alleged in the complaint, Liao has known since at least September
2006 that AOB Commerce and AOB Asia Fund were unable to pay the
interest due investors from their business activities, and knew or was
reckless in not knowing that they were unable to do so prior to that
date. Nevertheless, the defendants have continued to raise substantial
amounts from investors through the sale of notes and have continued to
pay interest and commissions with new investor principal.

The court issued an order temporarily enjoining defendants from future
violations of the securities registration and antifraud provisions of
the federal securities laws, Sections 5(a), 5(c), and 17(a) of the
Securities Act of 1933, Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 thereunder. The court also issued orders (1)
freezing the assets of the defendants and relief defendants; (2)
appointing a temporary receiver over the defendants and relief
defendants; (3) requiring the defendants to provide accountings; (4)
prohibiting the destruction of documents by the defendants; and (5)
granting expedited discovery. The Commission also seeks preliminary
and permanent injunctions, return of ill-gotten gains with prejudgment
interest, and penalties against the defendants. The Commission’s
complaint also requests an order barring Liao from acting as an
officer or director of any public company.

The complaint also alleges that the defendants loaned or otherwise
transferred significant amounts of investor monies to the relief
defendants and seeks the return of those monies.

A hearing on whether a preliminary injunction should be issued against
the defendants and whether a permanent receiver should be appointed is
scheduled for August 6, 2007.

Investors may direct their inquiries to the temporary receiver, Robb
Evans & Associates LLC, at (818) 768-8100.

The SEC has issued information for investors on promissory notes,
“Broken Promises: Promissory Note Fraud,” located at
http://www.sec.gov/investor/pubs/promise.htm. [SEC v. AOB Commerce,
Inc., AOB Asia Fund, I, LLC, and Terchi Liao a/k/a Nelson Liao, et
al., No. CV 07-4507 CAS (JCx) (C.D. Cal.)] (LR-20196)

Pinoy Money Talk has an article showing how surprising it is that you have to pay taxes on Gains through HYIP and AutoSurfs. His information is based on Philippino Law, but it shares the same characteristics as U.S. Law regarding gains and taxable income.

Now with U.S. Law if you lose money in one of these scams as well it can be considered a Tax deduction as a loss. This maybe true as well in the Philippines as well, please check with your tax expert.

People have been asking me to look into getting attorneys involved into the case of Club-FX. I have called and left a message with the lawyers at this time. If you would like to post in the comment your Loss amount that would be great.

Remember Losses are the amount invested minus payments to you.

I will Call the Lawyers again today to get a fix on what they maybe able to do.

Troybank had 3116 Victims. Victims are ones not in profit or break even. Their distribution will be about 20 cents on the Dollar recovered, that is even after lawyers fees and all expenses. This is a Great recovery!

The spends will be going out soon to the Troybank Victims!

Thank you!

I have found out how much was recovered from Solidinvestment. The lawyers were able to recover approximately $540,000 from Solidinvestment. With that the people who did sign up for the law suit will be getting back approximately 10 cents on the dollar. There have been about 1000 people that signed up to the law suit with a net loss of between 4 to 5 million dollars.

The spends will be going out soon. The delay has been caused by the Indictment of E-Gold, but will be going out soon now.

Trevors Post regarding E-Gold Indictment. Please read below of the quote from Trevor on another forum stance regarding E-Gold. I will comment after the quote.

Um, they’ve been indicted. Maybe you don’t realize just how bad that is. If you want to risk your money with them at this point, that’s your prerogative. We refuse to work with a company that’s indicted…a pretty logical response, honestly…:-p I will be surprised if anyone wants to receive their funds to e-gold after they find out what’s up with them…it’s just a smart move. When big news like indictment comes up, immediate measures and precautions must be taken. As a business with integrity, we will not work with such a company. Frankly, it would be unwise to do so, as there’s a huge risk that all funds in e-gold would lose all of their value quite quickly when everything starts to get locked-up. The bank wire withdrawals were initially a little while away, but we made it a priority when we found out about the e-gold situation. Recognize that we have not taken any action, as you are saying here. We have re-acted (appropriately, I would argue) to the indictment of e-gold. Again, if you still want to work with them, that’s your choice, but I would say that that is a very foolish decision. Hope that helps.
Trevor

As I thought about this, I realized that I know a piece of background information that not everyone else knows. E-gold is not used very heavily in our system. We purposefully keep very low amounts on hand (because we haven’t trusted e-gold or their integrity…things always seemed edgy with them, but we had no other option for our international members). Honestly, the majority of funds that come through our system are either checks, ACH, or bank wires. A very low percent of the incoming or outgoing funds have been e-gold. Few of our members are affected at all…and those that are affected are affected by the fact that e-gold is indicted…not by the fact that CEP Trust no longer accepts them. There is, afterall, quite a difference between the two of those, I would say. We no longer accept them because they are indicted. Hopefully people stop using them altogether. Wouldn’t that make a great statement to those who have no problem with defrauding others or enabling systems to do so? Why do you think CEP Trust has such heavy verification requirements? To avoid such shady activity as what takes place at E-gold. Wink We have a very different business ethic, and we will uphold that without fail. It’s just the way it is. Any company who doesn’t stand in that same place should not work side by side with us, as we truly care about taking care of our members and keeping them safe. This is the best decision to keep all of our members safe, so it was the best decision to make. Hope that additional thought helps. Smile
Trevor

First and foremost Trevor, you are running an ILLEGAL MONEY TRANSMITTER! Your Integrity is nil, either that or your comprehension skills are very low as you couldn’t understand that you HAVE TO BE LICENSED TO RUN A Money Transmitter in the State of Kentucky or 45 other states for that matter!

You are spouting your mouth off about a company that has been on the internet well over 11 years. Now combine every single site you have, still doesn’t equal that. E-Gold has been on the forefront of being a commodities bank, and involved in e-commerce long before you even started.

Now lets get to the matter at hand, all you are trying to do is bolster your little pie in the sky company for a payment processor, and I quote, “Hopefully people stop using them altogether.”

“…because we haven’t trusted e-gold or their integrity…things always seemed edgy with them, but we had no other option for our international members”, Trevor stated.

Trevor, show me your Registration info, show me you are a man of your words. Or better yet give me the telephone number, name and Bar number of the Lawyer you are working with in New York to get your Money Transmitter License, let them know I will be calling. Let’s see if your integrity is in tact! Let’s see how edgy you are!

BTW have you registered with FINCEN yet?

Ok the main problem Admins are seeing is this; Who is looking at the computer screens at E-Gold? They think, and prolly are right, that the Feds are looking at the Computer Screens at E-Gold.

I can understand why they are jumping away from E-gold. They want to protect their and your Ass! Imagine this, the FBI sitting at E-Gold watching the fluctuations of deposits. Following the flow of E-Gold, then they get a Court order and Freeze that account, then another then another. This is possible, is it probable, I do not know.

I can understand why the mass exodus from E-Gold.

For my new program what Processors would you like to see?