An X-rated Web operation that paid affiliates who used illegal e-mail to drive customers to its Web sites will pay a $413,000 civil penalty under a settlement reached with the FTC and the Department of Justice. The settlement also bars the illegal marketing practices in the future and requires the operator to monitor its affiliates to ensure that they are complying with the law.
In 2005, the FTC cracked down on seven companies that illegally exposed unwitting consumers, including children, to graphic sexual content, in violation of federal laws. Five of those cases were previously settled. The settlement announced today with Cyberheat, Inc., ends the litigation in that case, and brings the total combined civil penalty amount in these cases to over $1.6 million.
The FTC's Adult Labeling Rule and the CAN-SPAM Act require commercial e-mailers of sexually-explicit material to use the phrase "SEXUALLY EXPLICIT: " in the subject line of the e-mail message and to ensure that the initially viewable area of the message does not contain graphic sexual images. The Rule and the Act also require that unsolicited commercial e-mail contain an opportunity for consumers to opt out of receiving future e-mail and provide a postal address, among other things. The FTC charged that the affiliate marketers sent sexually-explicit e-mail messages that:
- Violated the Adult Labeling Rule requirements;
- Violated the requirement to provide a clear and conspicuous opt-out mechanism; and
- Violated the requirement to provide a postal address.
While Cyberheat did not send e-mail directly to consumers, they operated an "affiliate marketing" program in which they paid others who used spam to drive traffic to Cyberheat's Web sites. The government's complaint alleged that under the CAN-SPAM Act, the defendant is liable for the illegal spam sent by its affiliates because the defendant induced them to send it by offering to pay those who successfully attracted subscriber to its Web sites.
The settlement bars future violations of the CAN-SPAM Act and the Adult Labeling Rule and requires the defendant to closely monitor its affiliates to ensure that they are complying with the law. In addition the defendant will pay $413,000 in civil penalties. The settlement contains standard bookkeeping and record keeping provisions to allow the FTC to monitor the company for compliance.
Posted on Sunday, December 28, 2008
The Securities and Exchange Commission continued its highly successful pursuit against stock market e-mail spam by suspending trading in the securities of three companies that haven't adequately disclosed information to investors and have been the subject of spam e-mail campaigns and promotional videos on the Internet site YouTube. The videos often repeat information in the companies' press releases and are posted to coincide with traditional spam e-mail campaigns.
The Commission issued an Order finding that each of the companies subject to today's trading suspension — NeoTactix Corporation (NTCX), Graystone Park Enterprises, Inc. (GPKE), and Younger America, Inc. (YNGR) — has inadequately disclosed its assets, business operations, and current financial condition.
The SEC's Anti-Spam Initiative, launched in March 2007, has been credited with a significant reduction in financial spam, and spam-related complaints to the SEC's Online Complaint Center have decreased by more than two-thirds in the past year.
"The SEC's anti-spam efforts have been remarkably successful to date, but we will not be complacent in our pursuit of unscrupulous stock promoters," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "The SEC will continue to take aggressive action against stock promoters and spammers, including those who are exploiting investors through YouTube."
Through its Anti-Spam Initiative, the SEC has suspended trading in the securities of 50 companies and has brought several enforcement actions against spammers, promoters, and insiders. These latest three suspensions are the result of a coordinated effort between the SEC's New York, Denver, and Washington D.C. offices. The SEC's Anti-Spam Initiative is now part of the microcap fraud working group recently formed within the Division of Enforcement.
The Commission issued an Order finding that each of the companies subject to today's trading suspension — NeoTactix Corporation (NTCX), Graystone Park Enterprises, Inc. (GPKE), and Younger America, Inc. (YNGR) — has inadequately disclosed its assets, business operations, and current financial condition.
The SEC's Anti-Spam Initiative, launched in March 2007, has been credited with a significant reduction in financial spam, and spam-related complaints to the SEC's Online Complaint Center have decreased by more than two-thirds in the past year.
"The SEC's anti-spam efforts have been remarkably successful to date, but we will not be complacent in our pursuit of unscrupulous stock promoters," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "The SEC will continue to take aggressive action against stock promoters and spammers, including those who are exploiting investors through YouTube."
Through its Anti-Spam Initiative, the SEC has suspended trading in the securities of 50 companies and has brought several enforcement actions against spammers, promoters, and insiders. These latest three suspensions are the result of a coordinated effort between the SEC's New York, Denver, and Washington D.C. offices. The SEC's Anti-Spam Initiative is now part of the microcap fraud working group recently formed within the Division of Enforcement.
Labels: 419 scam, ATM Scam, email scam, email spam, http://www.blogger.com/img/blank.gif, lottery, Nigerian Scam, scam, spam, spam news
Posted on Tuesday, December 16, 2008
The Chair of the Australasian Consumer Fraud Taskforce, Ms Louise Sylvan, said that the results of the ABS survey results on Personal Fraud showed how clearly consumer fraud has become a major concern.
"This survey, commissioned by the Taskforce, is the first occasion in Australia where we have had absolutely reliable statistics about the extent to which Australians are exposed and are victims to scams and frauds, including identity theft.
The ABS found that almost 6 million people are exposed to scams and frauds during any given year, with over 800,000 falling victim in some way. The financial losses are of major concern – with almost $1 billion in losses – a good part of which will go out of the Australian economy.
"While the normal kind of frauds still persists, mass-marketed global fraud is a new phenomenon that consumer protection and police agencies have not encountered before historically.
"Mass-market frauds and scams represent a serious problem from the perspective of the private sector as well. That is why over 40 private sector businesses join with the Taskforce each year in the co-ordinated campaign to help consumers avoid these scams and frauds.
Lotteries, pyramid schemes and phishing attacks top the list of these scams (which also follows the general complaints data from consumers). "Given that so many of these criminal perpetrators are not easily in the reach of Australian enforcement agencies, consumers need to be more vigilant than ever," Ms Sylvan said.
"The key message for consumers is not to respond to 'out-of-the-blue too-good-to-be-true offers', keep up the protections on your computer, and keep credit cards in sight."
Posted on Sunday, December 14, 2008
You wanted to be rich, and this man promised it to you. Now with the trillions of dollars you've made, you can buy the whole world five times over! But surprise surprise, it's not a legitimate offer – in fact, it's the PITS. That's why it wins the inaugural 'Pie In The Sky' award for 2003.
The 2003 winner is a so-called 'high yield trading program' offered by email by someone calling himself Adam Petersen. Move over Bill Gates, our winner 'Adam Petersen' is apparently the world's richest man, and its most successful investor. He sends out emails saying he’s an 'experienced high-yield trader'.
He claims:
I have been a full time trader for the past 15 years. Throughout this time, profits have CONSISTENTLY EXCEEDED 890% percent annually (20% per month compounding)… Returns on a monthly basis may be significantly lower than this projection - or significantly higher!
Invest just US$1 for 15 years with Adam
'Let's assume Mr Petersen invested just one single US dollar 15 years ago', ASIC Executive Director of Consumer Protection, Mr Peter Kell said when announcing the award.
'If what he says is true, Mr Petersen's total wealth should be about $179 trillion. Which is interesting, given that total world gross domestic product (GDP) reached only US$31 trillion in 2001 according to World Bank figures - a mere trifle in comparison!', Mr Kell said.
Perhaps Mr Petersen keeps his breathtaking fortune on another planet to escape publicity … his past investment returns are certainly out of this world.
Warnings from regulators around the world
'Authorities around the world regard so-called 'high yield' trading programs as a total fabrication, and issue regular warnings against them', Mr Kell said.
'High yield trading programs usually offer a get-rich-quick scheme for trading international bonds with global banks. Cloaked in secrecy and using a mumbo-jumbo of legal and financial terms, they pretend to offer special access to global high finance', he said.
Even Mr Petersen himself acknowledges that some people in his line of business are less than reputable. His e-mail says '…it has angered me to see the way unscrupulous individuals have tainted this arena and taken advantage of people.'
The 2003 winner is a so-called 'high yield trading program' offered by email by someone calling himself Adam Petersen. Move over Bill Gates, our winner 'Adam Petersen' is apparently the world's richest man, and its most successful investor. He sends out emails saying he’s an 'experienced high-yield trader'.
He claims:
I have been a full time trader for the past 15 years. Throughout this time, profits have CONSISTENTLY EXCEEDED 890% percent annually (20% per month compounding)… Returns on a monthly basis may be significantly lower than this projection - or significantly higher!
Invest just US$1 for 15 years with Adam
'Let's assume Mr Petersen invested just one single US dollar 15 years ago', ASIC Executive Director of Consumer Protection, Mr Peter Kell said when announcing the award.
'If what he says is true, Mr Petersen's total wealth should be about $179 trillion. Which is interesting, given that total world gross domestic product (GDP) reached only US$31 trillion in 2001 according to World Bank figures - a mere trifle in comparison!', Mr Kell said.
Perhaps Mr Petersen keeps his breathtaking fortune on another planet to escape publicity … his past investment returns are certainly out of this world.
Warnings from regulators around the world
'Authorities around the world regard so-called 'high yield' trading programs as a total fabrication, and issue regular warnings against them', Mr Kell said.
'High yield trading programs usually offer a get-rich-quick scheme for trading international bonds with global banks. Cloaked in secrecy and using a mumbo-jumbo of legal and financial terms, they pretend to offer special access to global high finance', he said.
Even Mr Petersen himself acknowledges that some people in his line of business are less than reputable. His e-mail says '…it has angered me to see the way unscrupulous individuals have tainted this arena and taken advantage of people.'
Posted on Wednesday, December 10, 2008
Did you pay real money to Lifewealth8, a 'digital marketing company', for 'an outstanding life enrichment opportunity via the Internet' that includes a simulated stock market and simulated shares?
A Sydney couple who refused to play nominated it for our 'Pie In The Sky' (PITS) award and it won our 2004 award for the most outrageous financial scheme of the past 12 months.
'They went to great lengths to make the stock look interesting and attractive, but it looked just like a pyramid scheme in fancy-dress', was how the nominating couple described the scheme.
Unfortunately, Lifewealth8's simulated stock market isn't all that's simulated. One Australian player tried to cash out her gains, but Lifewealth8 made all sorts of excuses and did not pay up. Even the company’s basic registration details are 'simulated' or maybe just plain fake.
This scheme, when first nominated for our awards in 2003, claimed to be incorporated in Malta. The Maltese authorities informed ASIC that no such company was registered there. Today, Lifewealth8 claims to be registered as a company Wealth 8 Limited in the British Virgin Islands. The British Virgin Islands authorities have informed ASIC that no such company is registered there*.
By the way, the company president and founder claimed to hold an accountancy degree from Malta. The Maltese authorities also told us the local university had no record of giving an accountancy degree to the person concerned. Today, the president and founder does not tell us where he gained his accountancy degree.
'Stock market games played with real money offer you none of the legal protections of genuine markets', ASIC Executive Director of Consumer Protection, said.
'If you want to invest, stick to the real thing where you can easily check company details, and get the protection of dealing through licensed markets and licensed financial services businesses', our Director said.
'Furthermore, because it's a game and based overseas, it falls outside ASIC's legal coverage.
'It bears all the hallmarks of a pyramid scheme, based around incentive payments for getting other people to play. ASIC issued a warning to the public in March 2003 when we received complaints that Lifewealth8 was recruiting members in Australia.
'Its nomination for a Pie in the Sky Award was one of the ways in which this first came to our attention', he said.
'The serious purpose behind these 'PITS Awards' is to warn the public. Financial scams still devastate far too many people. Scams frequently use sophisticated props and hard sell techniques that trap even financially experienced people.
'After a period of low returns from genuine investments, consumers need to double their guard against scams and get-rich-quick schemes', he said.
'A common feature of all this and our runner up schemes is that they are all unlicensed offshore operations with the real prospect of losing your money and very little that can be done to get it back', he said.
'The message is that you should only deal with licensed Australian businesses, because that way,your rights are protected if something goes wrong. Investors who choose to deal with unlicensed overseas businesses, lose the protections afforded by the licensing regime. You can check ASIC' investor and consumer website for free to make sure a business is licensed', our Director said.
A Sydney couple who refused to play nominated it for our 'Pie In The Sky' (PITS) award and it won our 2004 award for the most outrageous financial scheme of the past 12 months.
'They went to great lengths to make the stock look interesting and attractive, but it looked just like a pyramid scheme in fancy-dress', was how the nominating couple described the scheme.
Unfortunately, Lifewealth8's simulated stock market isn't all that's simulated. One Australian player tried to cash out her gains, but Lifewealth8 made all sorts of excuses and did not pay up. Even the company’s basic registration details are 'simulated' or maybe just plain fake.
This scheme, when first nominated for our awards in 2003, claimed to be incorporated in Malta. The Maltese authorities informed ASIC that no such company was registered there. Today, Lifewealth8 claims to be registered as a company Wealth 8 Limited in the British Virgin Islands. The British Virgin Islands authorities have informed ASIC that no such company is registered there*.
By the way, the company president and founder claimed to hold an accountancy degree from Malta. The Maltese authorities also told us the local university had no record of giving an accountancy degree to the person concerned. Today, the president and founder does not tell us where he gained his accountancy degree.
'Stock market games played with real money offer you none of the legal protections of genuine markets', ASIC Executive Director of Consumer Protection, said.
'If you want to invest, stick to the real thing where you can easily check company details, and get the protection of dealing through licensed markets and licensed financial services businesses', our Director said.
'Furthermore, because it's a game and based overseas, it falls outside ASIC's legal coverage.
'It bears all the hallmarks of a pyramid scheme, based around incentive payments for getting other people to play. ASIC issued a warning to the public in March 2003 when we received complaints that Lifewealth8 was recruiting members in Australia.
'Its nomination for a Pie in the Sky Award was one of the ways in which this first came to our attention', he said.
'The serious purpose behind these 'PITS Awards' is to warn the public. Financial scams still devastate far too many people. Scams frequently use sophisticated props and hard sell techniques that trap even financially experienced people.
'After a period of low returns from genuine investments, consumers need to double their guard against scams and get-rich-quick schemes', he said.
'A common feature of all this and our runner up schemes is that they are all unlicensed offshore operations with the real prospect of losing your money and very little that can be done to get it back', he said.
'The message is that you should only deal with licensed Australian businesses, because that way,your rights are protected if something goes wrong. Investors who choose to deal with unlicensed overseas businesses, lose the protections afforded by the licensing regime. You can check ASIC' investor and consumer website for free to make sure a business is licensed', our Director said.
Posted on Monday, December 8, 2008
The winner is a so-called 'interest-free loan' that was offered to Queenslanders, with 220 people investing $2.4 million in The Carsworthy Scheme. People were told if they purchased a car through a car buyers club, and borrowed a little more from their financier and invested it offshore, the high returns would repay their car loans. In fact when the offshore investments failed to deliver promised returns, people were left to find their own repayments, often for very high loans which they would probably not have otherwise entered into.
Another case involved Wide-I Design Corporation, a company registered in Vanuatu, ETP Ventures Pty Ltd and Cyrus Strategies Pty Ltd where car or home loans were offered on a similar basis. In that case, ASIC's investigation found the unregistered managed investment schemes promoted the investment of Australian investors funds offshore, and raised at least $2.2 million.
ASIC's investigations found that these two separate schemes combined raised at least $4.6 million from around 400 investors, many of whom were members of church communities on the Sunshine Coast, Queensland.
These illegal investment schemes have since been wound up.
Another case involved Wide-I Design Corporation, a company registered in Vanuatu, ETP Ventures Pty Ltd and Cyrus Strategies Pty Ltd where car or home loans were offered on a similar basis. In that case, ASIC's investigation found the unregistered managed investment schemes promoted the investment of Australian investors funds offshore, and raised at least $2.2 million.
ASIC's investigations found that these two separate schemes combined raised at least $4.6 million from around 400 investors, many of whom were members of church communities on the Sunshine Coast, Queensland.
These illegal investment schemes have since been wound up.
Posted on Friday, December 5, 2008
ASIC's award for 2006 goes to an illegal investment scheme promoted through wealth seminars throughout Australia. Operated by Mr Craig McKim, Pegasus Leveraged Options Group (Pegasus) lured approximately 90 unsuspecting investors and raised $3.7 million. Over $2.1 million of the funds raised were lost in personal gambling and other personal expenses by Mr McKim.
In the case of the Pegasus scheme, the NSW Supreme Court found investors were promised returns of up to 8% a week - figures described by the Court as 'astronomical'. Investors were even issued with a Certificate of Guarantee by a fictitious 'International Investment and Securities Commission'.
In the case of the Pegasus scheme, the NSW Supreme Court found investors were promised returns of up to 8% a week - figures described by the Court as 'astronomical'. Investors were even issued with a Certificate of Guarantee by a fictitious 'International Investment and Securities Commission'.
Posted on Wednesday, December 3, 2008
Financial adviser jailed for commissions scam
Philip Bates who operated from offices in Bedford was found guilty of fabricating business to maximise his commissions and was jailed by HHJ Ainley at Croydon Crown Court for five years and disqualified from acting as a company director for seven years. Confiscation proceedings have been postponed to a later date.
The fraud involved Mr Bates' running of his businesses Anderson Owen Ltd and Transtone Consulting Ltd (trading as Hammond Direct) in 2004. It concerned the "sham sale" by Mr Bates of the financial products of 17 insurance companies to over 100 customers.
Many of Bates' customers were unaware that financial products had been taken out in their names. Others were embroiled in a scheme whereby products were purchased not because they were needed or required but because Bates wanted the up front commission.
The two businesses subsequently went into liquidation and Anderson Owen ceased to be authorised by the Financial Services Authority. Shortly before the frauds came to light Bates left the country.
Arrangements between insurance companies and IFA's provide that if a policy is cancelled before a certain number of premiums have been paid the insurance companies are entitled to a pro rata "clawback" of commissions paid. However, when the insurance companies tried to clawback monies paid over the company accounts were empty. In fact, as the commissions had come in they had been swiftly transferred by Bates to his personal bank accounts first in Jersey, then in Guernsey, finally ending up in an account in Monaco in the name of Acorn Commercial Ventures Ltd for which he had power of attorney.
During the early phase of the investigation Bates' assets were traced and a restraint order was issued freezing the Monaco account in early 2006.
The victims were the product providers who paid out undeserved commission on policies which were not wanted or genuinely required. Customers who bought the policies were also victims in that policies were taken out without their knowledge and consent causing them financial loss.
Labels: 419 scam, email scam, lottery scam, Nigerian Scam, scam, spam
Posted on Sunday, December 21, 2008