“Weber was an Assistant United States Attorney and Chief of Asset Forfeiture in the United States Attorney’s Office for the Eastern District of New York, based in Downtown Brooklyn, where he served for 10 years and prosecuted and coordinated complex multiagency domestic and international money laundering, financial, tax, and forfeiture cases.”

“At the Justice Department, Weber oversaw prosecutions against major domestic and international financial institutions and corporations, including the federal portion of the Credit Suisse and Lloyds investigations, Union Bank of California, American Express Bank International, BankAtlantic, E Gold Ltd. (an internet-based digital currency business), and Sigue Corporation (a global money service business).”

The Major Economic Crimes Bureau will be responsible for all manner of complex financial investigations, including:

• securities, commodities, and investment fraud
• mortgage fraud and financial institution fraud
• commercial bribery and kickbacks
• bank fraud
• structured investment schemes
• internet fraud
• international money laundering and terror financing

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• Prosecutors: ID theft case takes deadly turn (cnn.com)
• Feds Want Leniency for Madoff’s Former Chief Aide (abcnews.go.com)

Here is the scam’s pitch:

“So we have found a way to profit from China’s growing economy and don’t want to keep the know-how just for ourselves. With MandarinInvest you will be able to partake in our success and patch up any financial holes your budget might have gotten due to the world financial crisis.”

Strangely enough?… I followed a Pecunix, keyword alert.

and found this wonderful scam interview, posted on a scam promotional web site, for a fraudulent/scam investment ponzi scheme.

Hi everyone! For my first post today I am really pleased to finally have this interview with the admin of what has surely been one of the most successful programs and consistent performers in the online investments industry for the last several months. I’m talking about Robbyn Hart who I’m sure needs little introduction to the many loyal fans of MandarinInvest (reviewed here).

That popularity is in no small part due to the professional service and regular and dependable payouts made by MandarinInvest. In what can be a very difficult area of the HYIP industry to establish yourself in, Robbyn and MandarinInvest have worked tirelessly to earn a reputation as a team that can compete with the more established names in the industry. And I think you’ll agree after reading this that the program is in some very capable hands and managed by some good HYIP professionals.

Before we hear from Robbyn however allow me to just briefly remind you that MandarinInvest is a long term HYI program that offers 1% for 30 days, 1.3% for 100 days, and 1.6%-2.1% for 150 days, with your principal returned on expiry.

I’m so tired of seeing these HYIP investment scams and writing about them (not that anyone cares) but we are today dropping Pecunix and C-gold from any future magazine issues. You are now both banned from our tiny part of the DGC world.  No ads, no articles etc.

I’m very unhappy to make such a decision, but to the operators of those companies, we are distancing the magazine and blog from you because of your continued support and integration with such scams.

I’ve got the term “Pecunix” in my Google keyword alerts along with a few dozen other industry related items.

For years, the term “Pecunix” did not generate to many alerts and in fact most of them were my articles or blog posts. However, since e-gold is no longer the ponzi favorite, the “Pecunix” alerts are many and much more frequent. Each day I’m receiving anywhere from a few to a few dozen.  Unfortunately, they are not the kind I like to see. It does not take a genius to forecast where this kind of business will lead Pecunix.

Cook said. “The Receiver and the Commission have made numerous inquiries regarding future access to the E-Bullion business records and funds, and we have been advised the U.S. Attorney’s office has not made a decision on when or how these records and funds will be administered.”

The pretty boy always has the best info. If you are not following him, here is the feed. http://feeds.feedburner.com/PatrickPrettyBlog

U.S. man arrested in gold-bullion Ponzi case

By Martha Graybow

NEW YORK (Reuters) – A man accused of running a multimillion-dollar Ponzi scheme in which investors were told their deposits were backed by offshore gold bullion reserves was arrested on Tuesday, nearly seven years after his operation shut down and he moved to Mexico, authorities said.

David Copeland Reed, 38, was charged with conspiracy, money laundering and wire fraud in an indictment unsealed in U.S. District Court in Manhattan, prosecutors and the FBI said.

The charges carry a prison term of up to 40 years.

Reed ran the alleged scam around a purported Internet banking operation he founded known as OSGold, according to the charges outlined in court documents. The business operated from March 2001 until June 2002, when Reed moved from North Carolina to Cancun, Mexico, taking customer funds with him, authorities said.

Millions of dollars of the investors’ and depositors’ money has never been returned, and no gold bullion reserves associated with OSGold have been located, authorities said.

Reed was arrested in Columbia, South Carolina, where he moved recently, authorities said. The name of his attorney was not immediately available.

Authorities said customers opened accounts with OSGold by wiring money to bank accounts that Reed and others controlled. The deposits were said to be backed by gold bullion reserves stored in an off-shore vault.

For the first few months of operation, OSGold operated reliably and developed a reputation as a secure way to engage in Internet banking, prosecutors said in court papers. Once depositors opened an online account, they could purportedly use their OSGold funds to wire money to locations around the world and to purchase items over the Internet, the indictment said.

OSGold account holders were also offered the opportunity to put money in a high-yielding investment program known as OSOpps that promised a guaranteed return of their principal as well as soaring rates of return, the court papers said. The high returns were said to come from gains on foreign exchange trading, but neither Reed nor his associates did any such trades, according to the indictment.

Clients worldwide opened about 66,000 accounts with Reed, transferring at least $12.8 million to three bank accounts that he and his associates controlled, according to the indictment.

Authorities called the alleged swindle a Ponzi scheme, a fraud in which earlier depositors are paid with money taken in from newer ones.

Reed and unidentified co-conspirators are accused of laundering customer funds through bank accounts in the United States, Mexico, Latvia and elsewhere, and using the money for their own personal expenses. Prosecutors said an investigation into the case is continuing.

(Editing by Jeffrey Benkoe)

The Bloomberg news service is reporting this:

Citigroup Inc., the second-biggest U.S. bank by assets, was accused in a lawsuit of repackaging unmarketable collateralized debt obligations it held and re-selling them to itself in order to hide its exposure to the securities.

Citigroup, based in New York, began using the “CDO-related quasi-Ponzi scheme” in 2006 to give the appearance that it had a healthy asset base, according to the complaint.

This and other claims are made in a 500-page amended complaint on Dec. 1 in an investor class action, or group lawsuit, originally filed in November 2007 in Manhattan federal court. The new complaint, which is based on an investigation by investor lawyers at Kirby McInerney LLP in New York, seeks unspecified damages based on the bank’s loss of more than $100 billion in market capitalization.

Let’s clear up some more false rumors before we get into the court document details.

1. Contrary to earlier allegations, Mr. Fayed did not personally rent the vehicle; the vehicle was rented by the business on a month-to-month basis through a corporate credit account.

2. The government also alleged that Mrs. Fayed sought to cooperate with the government on or about June 24, 2008. District Court Judge Otis D. Wright II, however, struck that statement from the prosecutor’s pleadings as unfounded.

3. The government has also referred to over $20 Million in Ponzi scheme proceeds going through defendant’s accounts, however, there is no evidence that Goldfinger or Mr. Fayed were engaged in a so-called Ponzi scheme.

4. The large amount of gold and silver bullion reserves and bank accounts seized by federal law enforcement demonstrates that e-Bullion.com has sufficient reserves to cover its depositors.

The big question everyone was asking over the past few weeks was….What did the government seize?  Now we know.

EVERYTHING THEY COULD FIND for a total of $24 million.

The FBI and IRS seized bank accounts, business records, property, and precious metals holdings from Goldfinger’s vaults, including gold and silver bullion worth approximately $24 Million that is held for the benefit of thousands of e-Bullion.com depositors.”

Since e-bullion began the company has had just over 466,000 customer accounts.  That is total accounts, funded or not, since day one and you may compare that amount to e-gold’s over 5 million accounts, Webmoney with over 5 million, and finally GoldMoney comes in at over 40,000.

At the time of the original indictment in February of 2008, the prosecutor Mark Aveis made a dire prediction in court papers which has come true today.  In sworn documents, he predicted what would happen to e-bullion’s online business if that sealed indictment ever became public as it just has,

02/08 “Similarly, disclosure of this indictment would most certainly cause disruption, if not a complete shut-down, of the relevant Internet sites and would, accordingly, likely destroy any possibility of a proactive, ongoing investigation of very important targets.”

New court documents show his prediction has come to pass,

08/08 “…the FBI and IRS executed search warrants and seizure warrants that caused a complete shut-down of Goldfinger and e-Bullion.com, and all relevant Internet sites.”

If you had funds in an e-bullion account, there is NO reason to wait by your mailbox for the check to arrive. That is a long way off. It is likely you will be filing a claim and waiting until after the trail a receiver could be the one sending out checks for pennies on the dollar. Also be prepared to show a ‘source of funds’ for that money, the government is NOT in the habit of sending the proceeds of crime back to the crooks. That tugging you feel at your pocket…that’s the long arm of the law.

The hundreds of HYIP scams now in operation accepting e-bullion, you can just kiss those funds goodbye.

Cheaters justice. I really hate those scams.

Also, I’m now told by some people that the the FBI may even be legally scalping a percentage of the seized assets although I’m not sure exactly how that would work.

What is going on now?

The defense has requested some funds be released from the government seized loot.

“…an order to immediately release $300,000 in order to preserve exculpatory evidence contained within the Internet servers 2 and computer network system operated by defendants and the 3 business entity e-Bullion.com …Approximately $100,000 per month is needed to pay for server rack space, security software, bandwidth and personnel to maintain defendants’ Internet servers and computer network system.”

Jim’s lawyers are asking for the release of $300k to cover the continuing operation of the businesses. (to keep the servers alive)  They are telling the court that on these servers is evidence which the defense might use to prove Jim’s innocence and that information needs to be allowed to survive throughout his trail and persecution….sorry prosecution.

“…evidence is at a risk of loss due to the sudden and unjustified shutdown and seizure of defendants’ lawful business. The exculpatory evidence that will be lost when the Internet servers and computer network go down is the evidence needed by the defendants establish their innocence.”

Finally, there is the ever present reality that possible charges relating to the murder could be forthcoming from the State or Federal Government.

Is there a bright side of the story or silver lining to any of this?

In fact there could be, Goldfinger and Mr. Fayed may not even have been the actual targets of the longstanding FBI and IRS investigation.

On February 26, 2008, when the original sealed indictment was issued, the prosecutor, Assistant United States Attorney Mark Aveis, told the US District Court magistrate:

“…The indictment represents one of several steps in a long-term investigation by the FBI and IRS regarding fraud, money laundering, and terrorist financing…”

Despite the prosecutor calling e-bullion the ponzi, there is much evidence to suggest that the larger government case is focused on an old matter now being sorted out in the court. Can e-bullion be labeled a ponzi if it was just the company receiving funds on behalf of an account holder?

I think the ponzi and terror financing case they are all referring to is that of Abdul Tawala Ibn Ali Alishtari, a/k/a “Michael Mixon and “Flat Electronic Data Interchange” or F.E.D.I.  This appears to have been a ponzi scheme run by “Michael Mixon” and associates in which they used the e-bullion and Goldfinger accounts to receive their scam proceeds. Here is some background on that case, and some documents from the files that show these crooks may have only been using e-bullion to receive their ponzi funds.  There is NO evidence yet that e-bullion ever operated a ponzi.

Abdul Tawala Ibn Ali Alishtari, a/k/a “Michael Mixon and FEDI

From approximately 1998 through 2004, Alishtari committed a massive fraud in which he stole millions of dollars from his victims through the operation of a loan investment program he called the “Flat Electronic Data Interchange” (“FEDI”). FEDI was purportedly a high-yield investment scheme, in which Alishtari falsely promised his investors that, in exchange for their investment, they would receive high, guaranteed rates of return, according to the indictment.

NEW YORK—Michael J. Garcia, the U.S. Attorney for the Southern District of New York, Mark J. Mershon, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Raymond W. Kelly, the New York City Police Commissioner, announced today the arrest of Abdul Tawala Ibn Ali Alishtari, a/k/a “Michael Mixon,” on attempt charges of terrorism financing, material support of terrorism, and international money laundering, as well as additional charges of conspiracy and wire fraud. According to the five-count Indictment, which was unsealed in Manhattan federal court earlier today. Alishtari, a 53-year-old resident of Ardsley, New York, facilitated the transfer of $152,000 with the intention that it be used in Afghanistan and Pakistan to help train terrorists. Specifically, in the latter half of 2006, Alishtari accepted payment to discreetly transfer these funds, believing that they were earmarked for Pakistan and Afghanistan. Alishtari believed that the funds were being sent abroad to support a terrorism training camp in Afghanistan by funding the purchase of equipment such as night vision goggles. One of these transfers, which is also the subject of the international money laundering charge in the Indictment, relates to Alishtari’s transfer of $25,000 from a bank account in New York to a bank account in Montreal, Canada, with the intent that the funds be used to provide material support to terrorists. *http://newyork.fbi.gov/dojpressrel/pressrel07/terroristfinancing021607.htm

http://www.osc.gov.on.ca/Enforcement/Proceedings/SOA/soa_20030611_anderson-et-al.pdf

If there was ever any question to whether e-bullion had previously cooperated with the authorities on legal subpoena’s Mr. Fayed’s attorney is desperately trying to dispel that myth. This new court document offers up over two dozen agents of the government that e-bullion worked with providing requested account information.

There is a huge amount of additional information, history and data to be discussed regarding e-bullion. We will be detailing more documents, data and updates in this month’s issue of DGCmagazine.com so please look out for the new monthly issue around the 27th of August or sooner.