PonziScams.com Schemes & Due Diligence

Looks like Trevor Reed and Clayton Kimbrell decided to use their Fifth Amendment right not to incriminate theirselves while giving testimony to the receiver of CEP.

“I took the depositions of Clayton Kimbrell and Trevor Reed today in Atlanta, Georgia in the bankruptcy cases and adversary proceedings filed in the Bankruptcy Court thus far. A deposition is a sworn statement given in response to questions by opposing counsel and taken down by a court reporter for potential use as evidence in these cases. Mr. Kimbrell and Mr. Reed chose to exercise their Fifth Amendment rights against self-incrimination, answering no questions regarding the CEP programs or investments. They also asserted their Fifth Amendment rights against self-incrimination in response to my Requests for Production of Documents, Interrogatories and Requests for Admission.”
http://www.wfperkinsforcep.com/#oct24

One of the top Democratic Fundraisers, Norman Hsu, funds may have came from Ponzi Scam, which took at least $60 Million from unknowing investors. Hillary Rodham Clinton was most notably the main benefactor of these donations from the Ponzi Scheme. U.S. Attorney Michael Garcia said the the Clinton Camp was unaware of any improprieties from Hsu.

Hsu has been charged in California and now in New York on this illegal ponzi scheme. The FBI stated that Hsu has no actual business but was using members investment to pay out to other investors as well as the Donations to the Democratic Contenders.

Hsu was charged with mail fraud, wire fraud and violating campaign finance laws. If convicted, he faces a maximum of 20 years in prison on each of the fraud charges and five years on the campaign finance charge.

Investor Lawsuits Filed, Discovery Hearing

I have filed 33 lawsuits in the Bankruptcy Court (two more to go) in this first round of recovery suits against investors. We are pursuing all distributions to these defendants. I am not attaching the complaints here due to volume, although I understand that some have probably been picked up off the docket and are being circulated about the forums. This group includes Caroline, Bart and Heidi Strittmatter, Israel Lagares, Daniel May, Gary Schrier, Marcus Petrelli, Regina & Gary Johnson, Dustin Fennell, Thomas Hall, Maurice Usenbor, Max Gonzalez, Troy Winters, Pamela Anderson, Curtis Greek, E-Business (Alwine), Hobson Black, Wilfried Owatoye, Patricia Bruno, William Nugent, Skye Karls, Shad Foss, Wilmer Michael Wrenn, Bill Holcombe, Andrew Hockenbrock, Jevard Hitch, Brenda Bumgardner, Jace Wingard, Greg Collier, Jim Pratt, Denise Higgins, Howard C. Phillips, and Gareth Lodge. This group received distributions in excess of $2.5 million with over $2.0 million of that amount appearing to be in excess of their investment.

There is a hearing scheduled for Tuesday morning, August 28, 2007 at 10:00 am to hear motions I’ve put forth to the Judge to expedite the discovery process related to these and other cases pending or to be filed. [See Documents CEP #0032 and #0020]. “Discovery” is essentially the process by which both sides of the litigation endeavor to find out the facts. This includes responses by both plaintiff and defendant to specific questions called interrogatories, the physical production of electronic and hardcopy documents or records, and questioning of parties under oath.

SEC Files Charges Against Ponzi Scheme Operators in $20 Million Mining Claim Securities Fraud

On August 9, 2007, the Securities and Exchange Commission filed charges against two Nevada companies and their officers for perpetrating a $20 million Ponzi scheme involving mining claim interests. The Commission filed charges against Earthly Mineral Solutions, Inc. (”EMS”), Natural Minerals Processing Company (”NMPC”), both based in Henderson, Nevada, and their three principal officers, Roy D. Higgs, age 65 of Henderson, Nevada, Frank L. Schwartz, age 43 of Henderson, Nevada, and Rick Lawton, age 60 of Reno, Nevada, (collectively, “the defendants”).

Also on August 9, 2007, the United States Attorney for the Eastern District of Missouri filed criminal charges against EMS, Higgs, and Schwartz for conduct alleged in the Commission’s complaint.

The Commission’s complaint alleges that between 2003 and 2006, the defendants offered and sold investors mining claims interests based on false and misleading information. As alleged in the complaint, the defendants claimed that investors’ funds would be used to expand EMS’ and NMPC’s mineral processing and fertilizer production businesses. The defendants guaranteed investors a 7% to 9% annual return their on investment, which was to be paid out of the operating revenue from the mining and fertilizer businesses. In reality, the defendants were running a Ponzi scheme; neither EMS nor NMPC operated a functioning mining or fertilizer business, and the returns promised to investors were paid using the investments of new investors. The complaint further alleges that the defendants’ scheme raised approximately $20 million from over 100 investors nationwide, many of whom had been saving for retirement and liquidated their personal Individual Retirement Accounts (”IRAs”) to invest in the mining claims.

The Commission charged EMS, Higgs, Schwartz, and Lawton with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 (”Securities Act”). In addition, the Commission charged EMS, NMPC, Higgs, Schwartz, and Lawton with violating the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 (”Exchange Act”) and Rule 10b-5 thereunder. The Commission also charged Higgs, Schwartz, and Lawton with violating the broker-dealer registration provision of Section 15(a) of the Exchange Act. The Commission seeks a permanent injunction, disgorgement with prejudgment interest, and civil penalties against all of the defendants.

The Commission acknowledges the valuable assistance the United States Attorney’s Office for the Eastern District of Missouri, the Bureau of Land Management, and the Federal Bureau of Investigation in bringing this case.

SEC Complaint in this matter

http://www.sec.gov/litigation/litreleases/2007/lr20237.htm

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)

SEC Charges Operators of Phoenixsurf.com Web Site With Conducting a Massive Internet Ponzi Scheme

Washington, D.C., July 24, 2007 - The Securities and Exchange Commission today filed securities fraud charges against the operators of an Internet-based Ponzi scheme that raised $41.9 million in just four months from more than 20,000 investors worldwide.

The Commission’s action, filed in U.S. District Court in Los Angeles, alleges that from Feb. 22, 2006, through May 21, 2006, four defendants operated a Web site — Phoenixsurf.com — that offered investors a 120% return in just eight days on investments ranging from $8 to $6,000 in a purported “traffic exchange program.”

Walter Ricciardi, Deputy Director of Enforcement, said, “Paid autosurf programs have become an enormous industry on the Internet. In this instance and other similar cases, however, a paid autosurf program has turned out to be a Ponzi scheme, which depends on attracting new members in order to pay returns to current members. In reviewing such programs, investors should bear in mind the age-old adage: ‘If it looks too good to be true, it probably is.’ Promises or guarantees of double-digit returns in a matter of days or weeks are highly suspicious and the investor should exercise extreme caution.”

Andrew Petillon, Associate Regional Director of the Commission’s Los Angeles Regional Office, said, “The Phoenixsurf.com program was destined to collapse because it depended on attracting new investors to pay existing investors. We again caution investors about ‘get-rich quick’ schemes offered on the Internet, especially when the companies have not filed disclosure documents with the Commission.”

The Commission’s complaint against Jonathan W. Mikula, 21, of Athens, Ga., Gabriel J. Frankewich, 29, of Byron, Ga., New Millenium Enterpreneurs, LLC, and Phoenixsurf.com alleges that under the purported program, to receive the promised return, investors had to purchase advertising and view at least 15 web pages of advertising per day during the eight-day period. Although the defendants represented that they would pay the promised returns with funds received from investors and other “businesses/programs within the NME/Phoenix network,” they operated Phoenixsurf.com primarily as a pure Ponzi scheme — using for the most part only new investor funds to pay the promised returns to existing investors. The complaint alleges that the defendants paid investors $36.7 million, almost all of which came from advertising purchases from new investments in the scheme.

To settle the Commission’s charges, the defendants consented, without admitting or denying the allegations in the complaint, to a judgment permanently enjoining them from future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act. The judgment also ordered the defendants to pay disgorgement and prejudgment interest — for Mikula, a total of $106,671.08; Frankewich, a total of $96,345.79, and Phoenixsurf.com and New Millenium Entrepeneurs, LLC in amounts to be determined. Payment of the disgorgement and prejudgment interest by Mikula and Frankewich was waived and civil penalties were not assessed against them based on their sworn financial statements and other documents submitted to the Commission.

* * *

See also SEC publications on Ponzi schemes (http://www.sec.gov/answers/ponzi.htm) and autosurfing (http://www.sec.gov/investor/pubs/autosurf.htm).

# # #
For further information contact:

Andrew Petillon
Associate Regional Director, Enforcement
(323) 965-3214

Kelly Bowers
Senior Assistant Regional Director, Enforcement
(323) 965-3924

Rabia Cebeci
Senior Special Counsel
(323) 965-3853

Los Angeles Regional Office

Additional materials: Litigation Release No. 20205

It appears that the ride for CEP and it’s subsideraries is over. The SEC filed a complaint seeking emergency relief in the United States District Court for the Eastern District of North Carolina against CEP Holdings, Inc. d/b/a www.colonendparenthesis.net (CEP), Colon End Parenthesis Trust, LLC (CEP Trust), and its owners and operators, Trevor Reed (Reed) and Clayton Kimbrell (Kimbrell). This is no surprise to me or others blogging about this today.
See DrunksWorld & NOBS

What does surprise me is people still put money into the unlicensed money transmitters and the associated schemes! Come on guys GROW UP get out of the GREED MODE!

Just because an Admin CLAIMS he has it covered, well guess what most likely he doesn’t!

Furthermore If an Admin tells you “not to invest if you don’t believe him or Trust him“…then DON’T, most likely IT IS A SCAM!!!!

SC of Malaysia is cracking down by blocking websites:

Below is the list of known companies and websites which are not authorised nor approved under the securities laws to deal in securities, provide investment advice and/or fund management services related to securities or futures.

The public is advised not to make any investment with companies that are not licensed or approved by the SC. Offers often comes in the guise of seemingly attractive investment opportunities or schemes and may also be camoflaged as direct selling or business opportunities.
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