Another article of how WCM got smashed in China (AGAIN), translated

Previously #MLMskeptic translated the article from LegalDaily.com.cn about how WCM got smashed. This time we're translating a different article of the same event, with additional details.

http://tech.ifeng.com/a/20160514/41608055_0.shtml

海归硕士开空壳公司 以“虚拟货币”连环套诈骗数亿

Master Degree Open Shell Companies, "Cryptocurrency" Scammed Hundreds of Millions

2016年05月14日 08:17  14-MAY-2016 08:17来源：澎湃新闻 作者：邢丙银   Source: Pengpai News  Author: Xing Bing

2015年5月，广东肇庆市公安局鼎湖分局经侦大队接群众谢某报案称：其听信嫌疑人梁某花之言，以26000元的价格购买了万通奇迹社交资本云计算平台（以下简称“万通奇迹”）套装产品。开通万通卡成为会员后申请提现，原本每天可分红32美元，但至今未收到分红款项，本金也无法退回。

In May 2015, Zhaoqing City, Dinghu Branch, Economic Investigation Unit (EIU from now on), in Guangdong province received report from citizen Xie, who claimed that he was fooled into believe a Ms. Liang and purchased several Wantong Miracle  (WM from now on) Suites for 26000 RMB, received the WM card, and was supposed to receive daily profit of 32 USD, but so far received nothing, and there's no sign of his original investment.

经广东省公安厅经侦总队组织广州、深圳、肇庆三市警方同时开展行动，一起未经有关部门批准，假借投资原始股权理财、电子商务等新概念，以承诺还本付息来吸引公众投资的特大非法吸收公众存款案由此揭开。

With economic investigation unit of three cities: Guangzhou, Shenzhen, and Zhaoqing cooperating, they revealed a huge illegal securities crime, that never was approved or licensed by authorities, and uses buzzwords such as protoshare investment product, e-commerce, and so on, with promises of huge profits.

近日，深圳市公安局经侦支队向澎湃新闻透露，这起案件涉及全国28个省147个县市区5800多名投资人，涉案金额数亿元。目前该案在进一步侦办中。

Recently, Shenzhen EIU told Penpai News that this scam has victims in 28 provinces, 147 jurisdictions, and over 5800 victims, with amount of scam in the hundreds of millions of RMB. Investigation is ongoing.

办案民警介绍，2013年5月，万通奇迹系列融资产品由所谓某投资银行控股集团董事长徐某、CEO刘某及执行董事徐某忠、“金融学家”孙某等人策划成立。
Police investigator said in May 2013, WM series of securities was established by Mr. Xu, president of some investment bank holding group, a Mr. Liu, CEO, an executive director Mr. Xu something Zhong, and a "financial scholar" Mr. Sun

轻信万通奇迹投资收益高被套牢
Belief in WM Investment Profit, Ensnared in Trap


湖南长沙的陈女士是万通奇迹的投资者之一。2013年9月，好友陈某芬告知她称，有一个叫万通的公司发布了万通奇迹系列产品，投资收益高，让她了解一下。

Ms. Chen of Changsha, Hunan province, was an investment in WM. In September 2013, a friend Chen (something) Fang told her that this Wantong (WT from now on) company released a series of WM products, promised huge profits if invested. Asked her to look into it.

随后，陈女士在网上查询了有关万通公司老总徐某的资料。“网上的徐某是天使投资人，作为投资银行的董事，曾帮助7家中国公司在国外上市。”

Later, Ms. Chen searched the boss of Wantong, a Mr. Xu online. "Xu, online, is an angel investor, CEO of an investment bank, helped 7 Chinese companies get listed in foreign exchanges."

陈女士信以为真，加入了一个万通奇迹的QQ群，看到有消息称万通公司将于2013年11月在深圳举行招商会，禁不住诱惑的她从长沙赶到深圳参会。

Ms. Chen believed all these to be true, and joined a WM related QQ Chat group, and learned of a recruiting meeting held by Wantong in Shenzhen coming in November 2013. Unable to resist, she went to Shenzhen to attend the meeting.

据其回忆，当天有几百人参会，万通公司的执行董事周某口若悬河，描绘了一番美好前景，并回答了参会人员的提问。

Based on memory, there were hundreds of people there. Wantong's executive direct, Mr. Zhou, promised the sun and the moon, described a bright future, and answered all of the questions from the attendants.

“投资13000元，每天收益近100元，收益挺高。”会后不久，陈女士即出资39000元买了三套万通奇迹WCM705（每份1999美元）产品。

"If I invest 13000, I can profit 100 per day, that's very high profit." Not long after the meet, Ms. Chen bought in with 39000 RMB and bought three of the WM suite called "WCM705", at $1999 USD each.

陈女士介绍，万通奇迹系列套餐有5种投资金额，分别为399美元、799美元、1999美元、1599美元和1999美元，金额不同每日分红也不同。如购买一套1999美元产品，每日可分红16个电子币，相当于16美元。

Ms. Chen explained that WM suite has 5 amounts: $399, $799, $999, $1599, and $1999. Daily profit is dependent on the amount invested. For the $1999 suite, daily share is 16 E-points, worth 16 USD.

购买万通奇迹产品后，陈女士还在万通公司网站注册成为会员，登陆后可浏览个人资料及账户上的电子币。最初她还能正常提现，不料没几日，提现就出了问题。

After the purchase of these suites, Ms. Chen registered in WM website, and can view her account and accumulated e-points, and even cash out at the beginning, but soon, cashing out became a problem.

“先是被拖延，后来干脆就不能提现了，2014年4月，连网站都打不开了。”陈女士遂询问好友陈某芬的上线王某波，但对方也没说出个所以然来。

"First it was delays, then later all cashing out was stopped. By April 2014, the entire website is gone." Ms. Chen asked her friend's upline, a Mr. Wang (something) Po, but he had no explanation.

2015年5月，陈女士获悉徐某在深圳新开了万怡通国际投资发展（深圳）有限公司（下称“万怡通公司”），而且还将在一五星级酒店召开投资宣传会，她又赶了过去。

In May 2015, Ms. Chen hard that Mr. Xu has established a new company in Shenzhen called WanYiTong (WYT from now on), and will do a promo event at a 5-star hotel. She went to check it out.

BREAKING NEWS: WCM777 smashed AGAIN in China, is Phil Ming Xu in custody?

PatrickPretty.com spotted a news in ShanghaiDaily that a Mr. Xu of "World Capital Market" was arrested by Chinese police for pyramid scheme in China. It appears that Phil Ming Xu of WCM777 has moved back to China and restarted his scam which collapsed in 2014 in the US. Below is a bilingual version of the news, with English version provided by me.


http://www.legaldaily.com.cn/index/content/2016-05/15/content_6626584.htm?node=20908

会员遍布28省 涉案金额数亿

Members spread across 28 provinces, amount into hundreds of millions

“万通奇迹”涉嫌非法吸存被查

Wantong Miracle suspected of illegal securities, being investigated

发布时间：2016-05-15 20:42 星期日   来源：法制日报——法制网

Posted: May 15 2016 Sunday 20:42     Source: LegalDaily.com,cn

法制网记者 李想  Reporting for LegalDaily Xiang Li

2015年5月27日，广东省肇庆市鼎湖区居民周华（化名）走进当地经侦大队报案。情绪激动的周华告诉警方，自己听信他人投资了万通奇迹社交资本云计算平台。孰料，不仅没有收到一分钱分红，连2.6万元本金也“打了水漂”。

On May 27, 2015, Ms. Zhou Hua (pseudonym) who resided in Guandong, reported to the local Police Economic Crime Detachment to report that she had been defrauded. The frustrated Ms. Zhou told police that she trusted others and invested in "Wantong Miracle Social Capital Cloud Computing Platform", and not only did not get any promised profit, the 26000 investment is "gone with the wind".

    警方顺藤摸瓜，一个披着投资原始股权理财、电子商务等新概念外衣的特大非法吸收公众存款犯罪团伙浮出水面。据调查，此案涉及万通卡会员5800余人，分布于全国28省，涉案金额达数亿元人民币。

Police followed the leads, and revealed this humongous illegal securities crime syndicate that used various new concepts such as "protoshare money management", "e-commerce" to disguise itself. Based on investigation, this crime involved over 5800 Wantong Card members, spread across 28 different provinces (in China), involving hundreds of millions in RMB. 

    精心包装欺骗群众

A exquisite facade to deceive the masses

    据警方介绍，2014年1月，周华听信犯罪嫌疑人梁某、陈某的话，投资购买两份“万通奇迹”WCM705套装，价值1999美元，按照“万通奇迹”公布的人民币和美元6.5:1的汇率，折合人民币13000元，对应1999个电子积分。对方向周华承诺，她可以获取每天16美元的分红，可累计100次分红。

According to police, in January 2014, Ms. Zhou believed suspects Mr. Liang and Mr. Chen, and purchased two of the Wantong Miracle "WCM705" suite at cost of $1999 each. Based on the then published rate of 6.5 RMB to 1 dollar that's about 13000 RMB. This would give the investor 1999 "points". According to the then promises, she can get 16 USD every day as profit share, and can do it 100 times. 

    《法制日报》记者登录网页搜索“万通奇迹”，发现有不少人在网上询问投资“万通奇迹”是否靠谱。那么，“万通奇迹”到底是怎样的一家公司呢？

Legal Daily reporter searched the Internet about "Wantong Miracle", and found there were many people asking online is Wantong Miracle" legal. So what sort of company is Wantong Miracle? 

    5月6日，在深圳市第二看守所，记者见到了在押犯罪嫌疑人徐某。据徐某称，大学毕业后他曾在媒体做过编辑，后来转行到金融领域工作。

May 6th (2016), in Shenzhen 2nd detention center, reporter met the suspect Mr. Xu, who had been arrested. Mr. Xu claimed, after graduating from university he worked as producer in media, then transferred to finance. 

    据肇庆市公安局经侦支队副大队长张朝晖介绍，2013年5月，“万通奇迹”系列融资产品由某投资银行控股集团董事长徐某等人策划成立。徐某等人宣称，“万通奇迹”进行的是社交资本革命，利用互联网云服务、云计算和全球零售折扣系统，为全球客户提供资本放大。

According to Zhang Zhaohui, deputy chief, economic investigation detachment, Zhaoqing Public Security, Wantong Miracle's various products was introduced to China in May 2013, by a Mr. Xu (supposedly some "investment bank holding group CEO") and others. Xu, et al, claimed that "Wantong Miracle" is a social capital revolution, using Internet, cloud computing, and world retail discount system, to provide "capital magnification" to global customers. 

PSA: Victims of WCM777 and related fraud must file claim by December 24th (Deadline extended)

If you were a victim of Phil Ming Xu's ponzi scheme WCM777 and its related entities, you need to gather up your paperwork ASAP and file a claim before December 24th, 2015.

This is the URL of the receiver’s site: http://www.worldcapitalmarketreceivership.com/

This is the URL of the site to file claims: https://www.wcm777claimsprocessing.com/en/Home/Filing

Among the defendant companies, affiliated entities or receivership entities are World Capital Market, Inc.; WCM777, Inc.; WCM777 Ltd (d/b/a WCM777 Enterprises, Inc.); Kingdom Capital Market, LLC; Manna Holding Group, LLC; Manna Source International, Inc.; WCM Resources, Inc.; To Pacific, Inc.; and ToPacific, Inc.

You do not need a lawyer, but you do need to be online and have paperwork ready, and ability to use an English website and follow instructions.

Any delay in filing a claim may result in you not getting any compensation from this fraud.

UPDATE: After a motion filed by the receiver and agreement by the judge, the deadline has been extended to December 24th, 2015.

Now you have NO excuse not to file if you are a victim.

Scam Basics: Do you "Google" your upline, the company leader, and so on?

Do you Google your own name as well as those people you know? Come on, everybody does. People who go on dates google each other's name, or even the photo, just to make sure they're not being catfished.

So why aren't people Googling their MLM uplines, and businesses googling their customers, and so on?

(NOTE: Yes, I'm using "Google" as a verb, meaning "to search online, probably using Google search". You are welcome to substitute Yandex , Baidu, or whatever your favorite search engine may be. )

A few years ago I wrote about "due diligence", and the case of Janamjot Singh Sohdi and his scam, and how he managed play an investment advisor and defrauded about a thousand people out of 2.5 million dollars despite having a long rap sheet such as having investment broker license revoked, disbarred from NYSE, and so on.  All of which can be easily Googled.

In the same article, I also wrote about the suspect scheme of "Phil Ming Xu" called WCM777, and how Xu was linked to the "Vantone scam" in China. WCM777 was eventually closed by SEC.

How did I found out that Xu was linked to Vantone scam in China?

I "googled" it, of course.

And it seems that's way more due diligence than most people bother to exercise, even bankers who's supposed to be following Federal "Know Your Customer" guidelines.

Have you ever heard of Daniel Filho? How about his full name: Daniel Fernandes Rojo Filho? Still no? How about his company, DFRF Enterprises (named with his initials)?  Yes, it's a scam, closed by the SEC in June 2015.  But what ELSE did you find out through Googling?

NEWS UPDATE: WCM777 Ponzi leader Phil Ming Xu used Ponzi money to fund House and Fashion Shop

The receiver attempting to recover assets from WCM777 Ponzi scheme operated by "Phil" Ming Xu has found more money laundered by Ming Xu.

When SEC caught up with Ming Xu and his ponzi scheme in March 2014, Xu signed a plea deal and a receiver was appointed to track down all the assets for eventual return to the victims. And the receiver, Krita L. Freitag, was sure finding a lot.

Xu had at least 54 different bank accounts under a dozen different company names at different banks, alleged the SEC in its restraining order back in March 2014. And the receiver was discovering even more assets that had been distributed to what appeared to be other companies, but are actually family members and friends. One attorney and friend of Xu got a 5 million loan from Xu days before restraining order. The same attorney also claimed to have lost a 200000 (two hundred thousand dollar) cashier's check that belongs to the receiver. In yet another case, unknown people were observed removing furniture and other property from assets frozen by court order and law enforcement had to be contacted to compel return of said assets.

Then there's the story of the missing million...

News Update 07-SEP-2014: Herbalife problem in Norway; TelexFree Brazil Exposed; Zeek, TelexFree, and WCM ponzi updates

Remember folks, when you read "news", they better have a source, and it better be a reputable source (or links to a reputable source), and I do try to do that. If I don't, let me know and I'll fix it. If the sources you read don't cite sources... Well, maybe you shouldn't trust them.

I know I haven't updated this blog for a week, so here's some belated updates:

Herbalife Scandal in Norway; False Claims that former Norwegian PM joined Herbalife

Norwegian magazine Kapital broke the news that Gro Harlem Brundtland, former three-time Prime Minister of Norway and former director general of World Health Organization (WHO) was completely unaware that her name was used on the website "Herbashop Norway" where one of the replicated websites proudly claims "Welcome to Gro Harlem Brundtlands Herbashop! ... After only three months I had controlled my weight down and changed pant size from 42 to 36"

Screenshot of the said Herbashop Norway, courtesy of Kapital magazine
page has been since removed

The page had since been removed from the Herbashop website. However, there is no word on whether Brundtland will take further action against Herbalife or Herbashop, or whether Herbalife itself may take some sort of action against Herbashop, which is an independent operation based in Norway by affiliate Dan Ove Tuven. Herbalife has promised an investigation.

Norwegian news Dagbladet claims that several other Norwegian celebrities were also used in various claims regarding Herbalife products, probably without their permission.

In March 2014 Ray Liotta sued Nerium, when he found that Nerium affiliates claimed for months in late 2013 that Ray Liotta's skin condition improved due to use of Nerium products.

(First reported by BehindMLM)


Brazilian News Revealed Shell Companies Allegedly Used by TelexFree for Money Laundering

Coat of arms of Brazilian Federal Police
(Photo credit: Wikipedia)

Globo news in Brazil have published allegations from Brazilian Federal Police that they believe TelexFree has engaged in money laundering and concealment of assets through various shell corporations by using relatives of Carlos Costa, head of Ympactus, i.e. "TelexFree Brazil". At least two companies are registered to Carlos' daughter Leticia Costa: AgroFruta and Brasil Factoring, and their stocks are allegedly worth millions despite her only declaring income of 60K a year. It's also worth noting that Carlos' wife Jozelia is named as the biggest creditor in the original TelexFree US bankruptcy application.

Brazilian Federal Police suspect that money that was ordered frozen by Brazilian court back in 2013 may have been used illegally to fund these alleged shell companies in order to hide them from authorities. Many of the directors in these companies are TelexFree top promoters, said the police.

You can read the Globo report here in Portuguese

News Update 22-AUG-2014: More TelexFree Lawsuits, Zeek Lawsuits, and Phil Ming Xu (WCM) lawsuits

A lot of developments regarding various closed ponzi schemes in recent months...

According to an expert tracking ponzi scheme, a new Ponzi scheme was discovered every 5 days in the US. That's right, every five days, just during the first 6 months in 2014, with over 1 BILLION dollars in potential losses.

But here's some news...


Court Approves Zeek Receiver to Sue International Winners

US Federal Judge overseeing the receivership of Zeek Rewards has approved the receiver's request to start suing "net winners" who do not reside in the United States. Previously, receiver have already sued most net winners in the US who has gained 1000 dollars or more from Zeek Rewards. Many have already settled for a lesser amount, though a few notable exceptions are the really top winners, who have gained anywhere from 500K to well over a million dollars from Zeek.

It is worth noting that several prior top promoters of Zeek has indeed fled the US to various countries, including the Dominican Republic and the Philippines.

Speaking of foreign countries...


Federal Prosecutors Allege Extremely Complex International Fraud Regarding TelexFree

According to documents filed with Federal court overseeing the TelexFree case, Federal prosecutors asked the judge to designate the case as "complex case" which will make it exempt from the "Speedy Trials Act" that requires the indicted defendant to be tried within 70 days, because there are significant portions of fraud linked to Brazil and will require foreign investigation / testimony, and subpoenas.

Prosecutors asserted that they have seized 400 TERAbytes of data spanning 46 servers, 26 separate computers from TelexFree and 3 more from grand jury subpoenas containing yet more records.  There are total of 185 grand jury subpoenas issued for evidence related to TelexFree such as business records. They have not yet compiled catalog of existing evidence, and there are strong possibilities that they will need to travel to Brazil to interview yet more witnesses and/or gather more evidence there. Thus, there's no way this can be done in less than 70 days.

Judge has yet to rule on this motion.

In related TelexFree news:

BREAKING NEWS: WCM777 receiver caught participant "losing" $200000 cashiers check, and more

As MLM Skeptic have said before, the more we dig, the more strange things we find about WCM777. We found links to immigration investment (i.e. residency visa for fixed prices), links to churches and controversial entities, sound-alike entities to schools, and more.

It appears that the WCM receiver appointed by court to close this ponzi scheme has found even more, with entities like WCM Art, and Immigrant Investment

What's interesting is the "inhouse legal counsel" Vincent Messina apparently got a 5 million loan a month before the SEC freeze hit and he had already spent half of it. Messina apparently refused to return the money and the receiver had to summon help to force the proceeds into an escrow account, but there's 200000 missing. Messina claimed the check was "lost".  Judge has ordered a hearing.

Please read details at PatrickPretty.com, and the update, also on PatrickPretty.com

UPDATED BREAKING NEWS: US SEC Charges WCM777 and Phil Ming Xu with multiple Violations, 54 accounts frozen

The hammer finally dropped:

The SEC alleges that three entities collectively operating under the business names WCM and WCM777 are posing as multi-level marketing companies in the business of selling third-party cloud computing services, which can include website hosting, data storage, and software support.  The entities are based in California and Hong Kong and controlled by “Phil” Ming Xu, who is a resident of Temple City, California.  

According to the SEC’s complaint filed in federal court in Los Angeles, WCM and WCM777 have raised more than $65 million since March 2013 by falsely promising tens of thousands of investors that the return on investment in the cloud services venture would be 100 percent or more in 100 days.  Investors were told they would receive “points” for making investments or enrolling other investors.  The points would be convertible into equity in initial public offerings of high-tech companies their money would help launch.  However, rather than building out cloud services or incubating high-tech companies, Xu and the WCM entities used investor funds to make Ponzi payments of purported investment returns to some investors.  They also spent investor money to purchase golf courses and other U.S.-based properties among other unauthorized expenditures.

There are, currently, no mention of the various reincarnations, such as Kingdom777, Global Unity, or Visinova, or other colleagues such as Harold Zapata and and "Tiger" Liu.

Here's Reuter's report  http://in.reuters.com/article/2014/03/28/sec-pyramidscheme-cloudcomputing-idINL1N0MP1J820140328

MLM Skeptic is among the first to investigate the WCM777 scam and the reach of such scam is truly staggering. Please check  the WCM777 tag for previous efforts.

UPDATE: PatrickPretty.com reported that at least 54 different financial accounts have been frozen, and Ming Xu have attempted to put proxies and cronies to lead the companies, but in reality he maintained control. Receiver has been appointed and any and all affiliates and associates are warned NOT to destroy records or you can be charged with contempt of court and/or obstruction of justice.

Accounts have been frozen by SEC in Bank of America, Wells Fargo, Comerica, Merrill Lynch, HSBC, E*Trade, JP Morgan Chase, Citibank, East West Bank, and American Continental.

MLM and SCAM NEWS 24-MAR-2014: WCM777 evil spawn, NuSkin Fined in China, KaratBars Warning in Canada

Three bits of scam and MLM related news...

Is Phil Ming Xu Still Involved in Global Unity Despite Tweeting He Got Out?

Phil Ming Xu, who had previously claimed he's no longer involved in WCM 777, Kingdom 777, or Global Unity (or Qianxi, or whatever name they changed to) on Twitter, may have been play word games, according to BehindMLM. A blog in Germany stated outright that Global Unity's "product line" called "Vizinova", is founded by none other than Phil Ming Xu, and has a similar investment structure: put in money, get lots of money out later.

See BehindMLM for details.