EDITORIAL: With Conviction Of Zeek’s Burks, Another Senior MLMer Faces Prospect Of Decades In Prison

Patrick Pretty Zeek Rewards Authority Shares Deep Editorial With Info From ASDUpdate

UPDATED 4:31 P.M. EDT U.S.A. Zeek Rewards was always inexcusably horrid, fueled by serial willful blindness and the sort of practiced disingenuousness that props up so many MLM “programs.” In dollar volume, Zeek ended up being more than seven times larger than the $119 million AdSurfDaily MLM Ponzi scheme that put ASD operator Andy Bowdoin in federal […]

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Grimes & Reese Reports: SEC Halts Pyramid Scheme Posing as MLM

At the request of the Securities and Exchange Commission, a federal court in Los Angeles has frozen the assets of a group of businesses that the SEC alleges to be operating a pyramid scheme masquerading as a multilevel marketing organization. The companies are based in California and Hong Kong and controlled by “Phil” Ming Xu, a California resident.

According to the SEC, businesses operating under the names WCM and WCM777 posed as multilevel marketing companies selling third-party cloud computing services. The SEC complaint alleges that they raised more than $65 million by falsely promising returns on investment of 100 percent or more in 100 days.

The SEC’s complaint stated that WCM and WCM777 sell their products exclusively to investors and depend almost entirely on the recruitment of new investors and purchases by existing investors to provide the money for returns.

Investors were told they would receive points, either through their investments or by enrolling other investors. The points then could be converted into equity as part of IPOs for the companies they were investing in. However, the SEC charges that WCM and WCM777 instead used the funds to make Ponzi payments as “returns” to some investors.

They also used investor money for unauthorized purchases, including two golf courses, a warehouse, vacant land, several single family homes, stocks and related investments.  They also sent investor money to a rough diamond jewel merchant another unrelated company affiliated with Xu.

In addition to the asset freeze, the court granted the SEC’s request for the appointment of a temporary receiver over the assets of WCM, WCM777, and several other entities named as relief defendants for the purpose of recovering money from the scheme.

http://www.mlmlaw.com/blog/

Behind MLM Reports: Ming Xu repentant about WCM777?

Roughly two weeks ago we saw the SEC finally move in and shut down Ming Xu’s WCM777 Ponzi scheme. As I understand it, these last few weeks Xu has made himself available to the SEC as they continue to tie up any loose ends pertaining to the case. In a series of tweets that hint [Continue reading…]

Source: Ming Xu repentant about WCM777?

Read the full article and join in the discussion over at BehindMLM.

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Grimes & Reese Report: SEC Halts Pyramid Scheme Posing as MLM

At the request of the Securities and Exchange Commission, a federal court in Los Angeles has frozen the assets of a group of businesses that the SEC alleges to be operating a pyramid scheme masquerading as a multilevel marketing organization. The companies are based in California and Hong Kong and controlled by “Phil” Ming Xu, a California resident.

According to the SEC, businesses operating under the names WCM and WCM777 posed as multilevel marketing companies selling third-party cloud computing services. The SEC complaint alleges that they raised more than $65 million by falsely promising returns on investment of 100 percent or more in 100 days.

The SEC’s complaint stated that WCM and WCM777 sell their products exclusively to investors and depend almost entirely on the recruitment of new investors and purchases by existing investors to provide the money for returns.

Investors were told they would receive points, either through their investments or by enrolling other investors. The points then could be converted into equity as part of IPOs for the companies they were investing in. However, the SEC charges that WCM and WCM777 instead used the funds to make Ponzi payments as “returns” to some investors.

They also used investor money for unauthorized purchases, including two golf courses, a warehouse, vacant land, several single family homes, stocks and related investments.  They also sent investor money to a rough diamond jewel merchant another unrelated company affiliated with Xu.

In addition to the asset freeze, the court granted the SEC’s request for the appointment of a temporary receiver over the assets of WCM, WCM777, and several other entities named as relief defendants for the purpose of recovering money from the scheme.

http://www.mlmlaw.com/blog/

Behind MLM Asks: Would TelexFree survive the SEC WCM777 shutdown?

Earlier this month, Massachusetts Secretary of State William Galvin’s office revealed that they were investigating a Marlborough-based telephone marketing company that has already been banned in Brazil for running a pyramid scheme. The inquiry stemmed from the office’s investigation into a similar company that was accused of targeting Brazilian immigrants in Massachusetts with a multi-marketing scam, [Continue reading…]

Source: Would TelexFree survive the SEC WCM777 shutdown?

Read the full article and join in the discussion over at BehindMLM.

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Ponzi Tracker Reports: SEC Alleges Cloud Computing Company Was $65 Million Pyramid, Ponzi Scheme

The Securities and Exchange Commission (“Commission”) announced that it had initiated an emergency enforcement action and obtained an asset freeze against a California company that purportedly specialized in cloud computing but was, according to the Commission, a massive Pyramid and Ponzi scheme that targeted members of the Asian and Latino community.  Defendants World Capital Market Inc., WCM 777 Inc., WCM777 Ltd. d/b/a WCM777 Enterprises, Inc. (the ‘WCM Entities”), and Phil Ming Xu were charged with multiple violations of federal securities laws in a complaint filed yesterday and unsealed today in a California district court.  The Commission is seeking injunctive relief, disgorgement of ill-gotten gains, and civil monetary penalties. In addition, the Commission is seeking appointment of a Receiver over the WCm Entities.

According to the Commission, Xu formed the WCM Entities in March 2012, identifying himself as the founder, chairman, and president in documents distributed to investors.  WCM was described as a “global merchant investment bank,” and represented that it was in partnership with over 700 investment organizations including Siemens, Denny’s, and Goldman Sachs.  WCM777 Inc. was a wholly-owned subsidiary of WCM, opening and maintaining bank accounts in the name of WCM777.

Beginning in March 2013, the WCM Entities began soliciting investors to purchase purported service packages and membership units in various cloud-based computing services.  In addition to computing services, each “package” offered investors returns in the form of cash and “points.”  Investors could earn cash and “points” through referring new members, and were then able to redeem the “points” by either exchanging the “points” for goods and services offered by the WCM Entities or by converting the “points” into equity for the upcoming initial public offering of various companies the WCM Entities planned to bring public, including WCM7.com.

Investors purchasing cloud-based computing packages were given the choice of five different membership levels, which in turn allowed members to purchase even more “World Cloud Media Products.”  Each of the five service packages promised investors returns of at least 100% in 100 days, with the fifth, or highest, level promising returns of 160% within 100 days.  The various levels carried descriptions ranging from “junior distributor” to “director.”  In order to keep the scheme going and to control the possibility of massive cash withdrawals, investors were encouraged to accumulate point balances, with Defendant Xu allegedly posting on WCM777’s online forum that those who took cash withdrawals were required to pay income tax in their respective countries.

To reassure potential investors, the WCM Entities featured a section on their website that included the question whether “WCM777 is a Ponzi game,” responding that “we are not a Ponzi game company.  We are creating a new business model.”T

The WCM Entities have increasingly been the subject of state securities regulators for engaging in unregistered securities offerings, and have since consented to orders in California and Colorado relating to these offerings.  Additionally, according to the Commission, the WCM Entities had no source of revenues other than money received from new investors through the sale of service packages.  Thus, the success of the WCM Entities depended almost entirely on the recruitment of new investors to sustain operations – which inevitably will lead to the situation where incoming funds dry up and existing obligations will dwarf cash on hand.  According to the Commission,the WCM Entities operated a classic Pyramid scheme that had no source of revenue other than soliciting new investors. Additionally, the WCM Entities made Ponzi-style payments to investors by using investor funds as the source of over $4 million of payments of purported “returns” to investors.

Nor did the WCM Entities have the purported extensive connections with numerous multi-national companies.  For example, despite claiming to have a partnership with well known companies including Denny’s, Goldman Sachs, and Siemens, the WCM Entities did not have any relationship with any of the entities, and in several cases were using the respective company’s logo without permission.

Defendants raised more than $65 million from investors worldwide, including nearly $30 million from investors in the United States.  However, rather than being used for cloud-based services, investor funds were used for a variety of unauthorized purposes, including (i) the purchase of nearly $14 million in real estate in the United States, including two golf courses; (ii) “playing” the stock market; (iii) various unrelated investments in an oil and gas company and a rough diamond merchant.

According to Patrickpretty.com, a Twitter account belonging to Xu contained an entry on March 14, 2014, that an employee known as “Liu,” or “Tiger,” had taken more than $30 million in “ecash.”  The veracity of that claim remains unknown.

A copy of the Commission’s complaint is below:

comp-pr2014-60

 

http://www.ponzitracker.com/main/rss.xml

Behind MLM Reports: SEC file charges against WCM777 & Ming Xu

That Phil Ming Xu would go down for his part in running the WCM777 Ponzi scheme was certain, and for the last few months or so it’s simply been a matter of when. Last I heard Phil Ming Xu was had fired his previous legal team after they failed to negotiate a fine penalty with [Continue reading…]

Source: SEC file charges against WCM777 & Ming Xu

Read the full article and join in the discussion over at BehindMLM.

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