By Richard Smith, who would be a member of the International Consortium of Interfering Bloggers, if there was such a thing.
Last year, in a post entitled ?New Zealand?s Savings & Loans Companies: Not Like Any Banking Industry You?ve Ever Seen Before? I scoffed at a bunch of dubious-looking NZ financial companies that had somehow been permitted onto the Companies Office register, amongst them, Technologies Savings and Loans Limited,? and commented:
After the Reserve Bank of New Zealand?s little flail at companies using ?restricted words?, there are not so many New Zealand companies with Bancorp in their name any more, but one does detect in the Company Register a lingering fondness for other bank-like appelations, such as ?Savings and Loan?, or ?Savings & Loan?.
Names like that, on a New Zealand company, have no official meaning, but they might appeal to any Americans out there whose due diligence on an overseas bank stops at checking whether the bank has a vaguely familiar-looking name. That level of nonchalance identifies ideal scam victims. The company name functions as a filter: only dopes sign up.
Should the Reserve Bank be warning judiciously about these foreign-accented phrases, and others, too, no doubt; whether or not the words are in their Reserve Bank of New Zealand Act 1989?
Then it was just a matter of sitting back and waiting for some American dopes to make themselves known, which would provide the expected answer to my rhetorical question.
It took just a couple of months, and in fact my expectation was far too specific. It wasn?t just Americans, so the ?savings and loan? branding wasn?t quite the point; some Aussies, and many others, got snared too:
Former Melbourne boy Senen Pousa has been told by a court not to leave town while he is helping the corporate police with their inquiries into who owns $3.4 million in bank accounts associated with him.
Pousa lives in Byron Bay, which means that there are worse places you could be stuck in when deprived of your passport, but maybe some of the self-proclaimed financial guru?s 3000 followers worldwide will be disappointed they will not be getting any face time in the near future.
The Australian Securities and Investments Commission told the Queensland Supreme Court last week that it is concerned that Pousa has been carrying on an unlicensed financial services business via his company Investment Intelligence Corporation and its web-based ProphetMax ?financial mentoring? program.
Insider suspects that ASIC?s concerns go a little deeper and wider than that because the regulator revealed that it is working with authorities in the US, New Zealand and the Netherlands on this one.
So what is the scam? It sounds a bit like a ponzi, but with a pyramid-like twist:
ProphetMax?s website is members only ? but it looks like the sort of club that Insider probably would not want to join, judging by much of the internet chatter over the past six months.
Even more disappointing was that a two to three hour Q&A session with Pousa and US wealth promoter Mike Dillard and his Elevation Group, is also out of reach. Dillard earlier this year introduced Pousa to his followers as: ?Lesson 19? in his series of online coaching sessions.
?
Pousa and Dillard both pitch to potential clients about revealing to them the secrets that only the super-rich, and celebrities, have for making money even when markets go into a tailspin. The clever part of their business is they are not just trying to build a client base of traders, but an army of proselytisers who pay to re-sell their wisdom.
ASIC described Pousa?s business as supposed to be about web-based learning modules that teach you financial literacy, life coaching ? and currency trading.
Next come our American dopes, and many others; someone?s moaned to the CFTC, and ?Insider? was right, it?s not just a matter of licenses:
The U.S. Commodity Futures Trading Commission (CFTC) filed a civil enforcement action charging Senen Pousa of Australia, Joel Friant of Bellingham, Wash., and their company, Investment Intelligence Corporation (IIC), an Australian corporation, with operating a fraudulent off-exchange foreign currency (forex) scheme. The complaint also charges Michael Dillard and Elevation Group, Inc., both of Austin, Texas, with registration violations. The scheme allegedly accepted at least $53 million from at least 960 clients worldwide, including at least 697 clients in the United States, and clients in Australia, the United Kingdom, Canada, Germany, the Netherlands, and Singapore, among other countries. None of the defendants has ever been registered with the CFTC.
On the same day the CFTC complaint was filed, September 18, 2012, Judge Lee Yeakel of the U.S. District Court for the Western District of Texas issued an emergency order freezing the assets of defendants Pousa, Friant, and IIC and prohibiting the destruction of books and records.
The CFTC complaint alleges that from at least January 1, 2012 through the present IIC, through Pousa, Friant and its other agents, and defendants Dillard and Elevation Group, utilized ?wealth creation? webcasts, webinars, podcasts, emails, and other online seminars via the Internet to directly and indirectly solicit actual and prospective clients worldwide to open forex trading accounts at IIC. The complaint further alleges that clients were promised by IIC, through Pousa, Friant, and other agents 1) a monthly return of 9 percent, 2) that IIC?s managed forex trading would risk less than 3 percent of a client?s capital per transaction, 3) that IIC was able to limit the risk inherent to forex trading by limiting its managed forex trading to 2 to 5 trades per month, and 4) that IIC has six ?proprietary traders? working 24 hours a day trading clients? funds. The CFTC complaint alleges that all of these representations to clients were false.
On or about May 16-17, 2012, the complaint alleges that clients suffered a loss of over 60 percent of their investment, when IIC, by and through its agents, entered over 200 forex trades in each client?s account in violation of the representations made by IIC, by and through its agents.
?and suddenly our possible scam has grown from a puny AUD3.4Mn to a much meatier USD53Mn. I wonder where the cash representing the difference between those two numbers has gone. Oh, and it turns out that the SEC have a thing going with Senen Pousa too.
Back to the Sydney Morning Herald for our New Zealand connection at last:
The broker that ProphetMax clients had to deal through was a New Zealand incorporated company, IB Capital FX (NZ), which barely a week before ASIC?s action against Pousa had its licence cancelled by the NZ authorities.
IB Capital says on its now inactive website that the July 17 cancellation was because it was shifting its operations and management to Europe ? although Insider would have thought that would not stop you keeping your website running.
Oddly, the group is also offering a link on the only working page that allows investors to access a form to apply to withdraw their money, which they have to print and then email back. No phone numbers are offered.
IB Capital, says ASIC, told clients to send their money to an ING bank account in the Netherlands. IB Capital?s last director, Emade Echadi, gave a Netherlands address. His predecessor, Joaquim Magro de Almeida, had one in Portgual.
The same people have also been directors of a string of similarly-named and behaved companies in both New Zealand and the UK.
One of those New Zealand companies is my snark-target of last year, Technologies Savings and Loans Limited, where Joaquim Magro De Alameida is a former director.
Not wishing to ruin the fun of whichever lucky New Zealander has been tasked with tracking down and turfing out these companies, I didn?t point out last year the full extent of De Alameida?s activities in NZ. But now, six months after the CTFC piped up, I see the New Zealand authorities may still be catching up, so here?s a tip: De Alameida is director or former director of no fewer than 64 New Zealand companies. None of them has been struck off, a contrast with the frenzy of deregistration triggered by GT Group.? Nor have, for instance, the 13 companies directed by his colleague at New Zealand Capital Finance Limited, Antonio Pires. So one could have a lot of weary fun (for a suitable redefinition of fun) tracking back through all the director names and identifying all the dodgy NZ companies associated with them and with Emade Echadi. This?blogger is happy to leave that exercise to a professional.
Perhaps we can hazard a guess as to what might be going on here. What better way to launder $53Mn of international cash than via a bunch of New Zealand companies with hard-to-trace or non-existent Portuguese (etc etc) directors, obligingly registered by the dopey New Zealand Companies Office? In fact, 60-odd companies seems too many, to wash a footling $53Mn. Could it be that there is more than one lot of scam proceeds going through these companies?
But never mind that, let?s cut straight to the chase: one big fat common strand linking the above skulduggery, and more besides, is this company address, presumably a virtual office or drop-box: 24B Moorefield Street, Johnsonville, Wellington, 6037. There we find 834 companies registered. Strikingly often, all those companies? directors reside overseas. When the latest New Zealand Companies Bill finally makes it into law, NZ companies will be required to have one NZ-resident company director, so all of these companies will have to appoint a local director, or be struck off. That law change is coming because, if all the directors are overseas, it?s been a pretty reliable sign of dodginess. Here is yet another recent example of what can go wrong when the infinite supply of crooks collides with the infinite supply of idiots.
Anyhow, that address sweeps up a lot of the De Alameida companies in one go, and suggests a whole bunch of other companies that might be worth a little sniff.
For instance: the most recent registration at that address, right now, is Andrew Berkeley Limited, whose sole director is Angelique Lilley, wife, or quasi-wife, of Ian Taylor of GT Group. Evidently GT Group hasn?t quite finished with New Zealand after all. I imagine that the New Zealand authorities haven?t quite finished with GT Group, either.
Updated: ICIJ may have found a whole lot more. Now there?s some data I?d love to get a look at.
Highlights here.
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