Thread: McKnight and Legisi Holdings, LLC....

Anyone remember this one??....

The good news is that in the 6th interim report from the reciever it talks about claw backs

B. Demand Letters Sent to “Net Winners”
In a Ponzi scheme scenario, the distribution of funds to an investor in excess of the
principal invested (and in some cases, even receipt of invested principal) constitutes a fraudulent
transfer under Michigan law. The Receiver has been working to collect the gains obtained by
these investors so that they may be distributed to investors who suffered net losses as a result of
their participation in the Legisi scheme. In October and December, the Receiver’s attorneys sent
demand letters to investors who received more money from the Legisi Ponzi scheme than they
contributed to it, requesting that these investors return these gains to the Receiver. To date, the
Receiver has recovered approximately $90,000 from these “net winners.”
In the coming months, the Receiver anticipates commencing suit against certain investors
who received substantial net gains, and, as yet, have refused to return those gains to the estate.

Originally Posted by okosh

Anyone remember this one??....

The good news is that in the 6th interim report from the reciever it talks about claw backs

This could be an interesting precedent. I have never taken any interest in scams in this genre so. I will look forward to hearing news on promoters who do have to fork out these claw backs.

This is not a precedent setting event.

William F Perkins, the court appointed receiver for the Colon End Parenthesis (C.E.P.) Clayton Kimbrell and Trevor Reed autosurf scam carried out a successful, although drawn out, clawback of funds from many insiders and players.

A lawsuit was filed in U. S. Bankruptcy Court in Atlanta yesterday for the recovery of transfers of CEP funds totaling approximately $1.5 million. The defendants named are Trevor Reed, Ginger Phillips Reed, Earl Reed, Clayton Kimbrell, Greg Kimbrell, Russell Phillips, Jessica Phillips, Chris Barany and Cliff Barany.

I am defining “creditors” who will receive this initial mailing to be all participants that CEP records indicate have a net positive cash balance as discussed in FAQ #5.

I filed a lawsuit yesterday against SureInvest LLC and its principals, Michael Donaker, Kyle Herron and Tammy Dowell, seeking the return of approximately $1,753,000 transferred to them during 2007.

I have filed 33 lawsuits in the Bankruptcy Court (two more to go) in this first round of recovery suits against investors. We are pursuing all distributions to these defendants. I am not attaching the complaints here due to volume, although I understand that some have probably been picked up off the docket and are being circulated about the forums. This group includes Caroline, Bart and Heidi Strittmatter, Israel Lagares, Daniel May, Gary Schrier, Marcus Petrelli, Regina & Gary Johnson, Dustin Fennell, Thomas Hall, Maurice Usenbor, Max Gonzalez, Troy Winters, Pamela Anderson, Curtis Greek, E-Business (Alwine), Hobson Black, Wilfried Owatoye, Patricia Bruno, William Nugent, Skye Karls, Shad Foss, Wilmer Michael Wrenn, Bill Holcombe, Andrew Hockenbrock, Jevard Hitch, Brenda Bumgardner, Jace Wingard, Greg Collier, Jim Pratt, Denise Higgins, Howard C. Phillips, and Gareth Lodge. This group received distributions in excess of $2.5 million with over $2.0 million of that amount appearing to be in excess of their investment.

The last month has been extremely busy. I have filed another 27 lawsuits on preference issues totaling $1.5 million and written 64 demand letters for the return of approximately $1.1 million. I am sure that when the deadlines pass on the demand letters on October 5 and October 12 that many more lawsuits will become necessary.

The following people have not responded in a substantive manner to my demand for their return of the fictitious profits that they removed from CEP Trust in the amounts shown. If, in my judgment, I receive no meaningful response from these individuals by the end of this week, Friday, December 7, 2007, then I will proceed with more formal legal remedies as stated in the demand letters. These individuals pocketed a total of $503,000 of “profits” from CEP Trust.
JEAN ANDERSON, $28,113.85
JOSHUA ANDERSON, $16,368.67
PENNY AULD, $27,961.52
RONALD VILLA / AURELIO, INC., $15,492.08
KELLY BEAUCHAMP, $29,495.95
KEITH BEAUCHAMP, $23,625.00
KENNETH BOYD, $29,759.14
KENNETH BROWN, $16,970.04
DAVID FERNANDEZ, $23,946.76
GARY HARBIN, $25,082.00
CINDY HENRYSON, $24,919.24
KELLY HIGGINS, $23,437.76
CHARLES HOLDER, $23,040.41
NOEL HURD, $17,650.00
JOEL KANTOR, $18,321.77
RUTH ANN MCDONALD, $15,436.18
APRIL PATTIE, $24,611.39
REBECCA PROSCH, $19,855.98
DELFIN RODRIGUEZ, $19,728.25
PAUL STANSEL, $25,936.70
SHARM STILTZ, $22,153.34
DAVID STUCKE, $15,339.73
DOUG WHYTE, $15,723.04

The Receiver's lawsuit against CEP participants Gary and Susan Schreier for amounts in excess of $200,000 was tried on August 20, 2009. On January 6, 2010, U.S. Bankruptcy Judge James Massey ruled in favor of the Receiver and awarded judgments against Gary Schreier in the amount of $149,474; against Susan Schreier in the amount of $148,529; and against The Schreier Family Retirement Assets LLC in the amount of $161,695. The judgment awards are duplicative against the parties and the Receiver is entitled to only one satisfaction of the judgments, not to exceed approximately $230,000.

SEC v. Colon End Parenthesis Trust LLC

Originally Posted by littleroundman

This is not a precedent setting event.

William F Perkins, the court appointed receiver for the Colon End Parenthesis (C.E.P.) Clayton Kimbrell and Trevor Reed autosurf scam carried out a successful, although drawn out, clawback of funds from many insiders and players.

SEC v. Colon End Parenthesis Trust LLC

Thanks LRM. I did know about that case, as it was an autosurf. I could have sworn I saw Jack Cobb's name on that clawback list. I had never heard of clawbacks from programs in a different genre. What sort of category did this scam come under?

Originally Posted by path2prosperity

Thanks LRM. I did know about that case, as it was an autosurf. I could have sworn I saw Jack Cobb's name on that clawback list. I had never heard of clawbacks from programs in a different genre. What sort of category did this scam come under?

That's a good question.

The only people who make a distinction between different types of "programs" are usually shills and players.

In the CEP/Reed/Kimbrell case, the defendants were prosecuted by the SEC for the fraudulent sale of securities.

The AdSurf Daily prosecution was notable for the fact the investigation was carried out by a combined IRS/FBI/Secret Service taskforce and the prosecution is being handled by the Department of Justice itself.

The charges, too, are a departure from the norm.

ASD/Bowdoin have been charged NOT with Securities fraud, but with fraud, mail fraud, money laundering and conspiracy

The terms "ponzi" or "HYIP" or "autosurf" are not usually contained in the criminal complaints

Thus far, Legisi/McKnight have been charged by the SEC with fraudulent and unregistered sale of securities.

Legisi/McKnight are also facing Federal charges alleging wire fraud and money laundering and McKight is facing up to 40 civil suits.

The times for HYIPs are a changin'

Originally Posted by littleroundman

That's a good question.

Please can you answer it then.

I asked about Legisi Holdings, LLC.. I have been following the Bowdoin news here and on Patrick Pretty. I have never bothered to read the Legisi Holdings threads on any forums because I was not in any of their programs. I undertand and agree with most of eveything else you have said in your general reply.

I also asked why Jack Cobb was not on the list you supplied as he had to pay some quite hefty clawbacks from CEP ptofits.

Originally Posted by path2prosperity

Please can you answer it then.

I asked about Legisi Holdings, LLC.. I have been following the Bowdoin news here and on Patrick Pretty. I have never bothered to read the Legisi Holdings threads on any forums because I was not in any of their programs. I undertand and agree with most of eveything else you have said in your general reply.

I also asked why Jack Cobb was not on the list you supplied as he had to pay some quite hefty clawbacks from CEP ptofits.

The list I supplied was not a complete reporting of the total activities of the receiver, Mr Perkins, just to show a representative range of amounts recovered and action/s undertaken on behalf of creditors.

The receiver has provided a blow-by-blow description of his activities over many months on the website set up for the purpose: CEP receivers' website

Included on the page are lists of all those subject to recovery of funds by the receiver.

WRT, Legisi and Greg McKnight, he and they face civil AND criminal proceedings.

The SEC has no statutory authority to press criminal charges. The charge of fraudulent sale of securities is considered a civil matter, the penalties for which do not include jail time, but do include penalties, monetary relief and disgorgement.

Criminal charges, on the other hand, bring harsher penalties, including jail


Historically, the "normal" (if anything WRT fraud can be considered normal) procedure has been the filing of civil proceedings first, to stop the fraud in its' tracks and freeze any assets, then to proceed with criminal action at a later date.

Originally Posted by littleroundman

The list I supplied was not a complete reporting of the total activities of the receiver, Mr Perkins, just to show a representative range of amounts recovered and action/s undertaken on behalf of creditors.

Thank you for that information. I did not ask for the rest but it may interest those who were members.

It is (relatively) little known, but the U.S. Secret Service infiltrated Legisi prior to the filing of the SEC complaint. An undercover agent walked right through the front door and chatted up the operator. Not long after that, Legisi did some bizarre things -- you know, things such as making members swear they weren't secret agents for the CIA and British Crown and such.

The handwritten words "Money Maker Group.com" appear in a Legisi evidence exhibit filed by the SEC in May 2008. Some of the Legisi money was tied to E-Bullion, whose operator later was accused of arranging the contract murder of his wife.

Some folks will recall that, in December 2010, more than two years after the AdSurfDaily forfeiture case was filed, federal prosecutors alleged that ASD also had an E-Bullion tie. E-Bullion also had a tie to the Gold Quest International caper (also May 2008, just like Legisi), and the FEDI scheme in which a man pleaded guilty to financing terrorism.

Taking a moment to revisit history, the Secret Service, using undercover operatives, began the ASD investigation during the first week of July 2008, about two months after the Legisi and GQI cases became public. Pamela Fayed, the estranged wife of E-Bullion operator James Fayed, was murdered in a California parking garage on July 28, 2008, three days before the seizure of about $80 million in the ASD case.

These events occurred against the backdrop of yet another investigation -- by the U.S. Drug Enforcement Administration -- concerning the actions of certain narcotics traffickers in a Colombian network. One of the targets was a company that allegedly provided debit cards to ASD. The company was known as Virtual Money Inc.; it was operated by Robert Hodgins, who was indicted under seal in April 2008 and again in June 2008. The seal was lifted in September 2008, about seven weeks after the ASD seizure.

Hodgins is now wanted by INTERPOL.

It is worth pointing out that AdViewGlobal, which had close ties to ASD and was pimped by most of the Surf's Up Mods, did some Legisi-like things prior to the ultimate collapse in June 2009. It became a "violation," for example, to discuss AVG outside of the confines of the AVG "private association," which bizarrely divined itself U.S. Constitutional protections while purportedly operating from Uruguay. After AVG tanked, members were threatened with trademark-infringement lawsuits for sharing the news.

These schemes alone involved hundreds of millions of dollars -- and each and every one of them was pimped on the Internet.

PPBlog

Thank you for the extremely well presented summary of the case PRBlog.

I was aware of the Virtual Money Card and E-bullion situation but I knew nothing about Legisli.

I asked my own bank about these cards that were being offered everywhere and they advised me not to use any credit or debit card, which was not issued by a British Bank. I accepted their advice. I am so relieved that I did not get lured into this VirtualMoney card scenario or ASD.

I can see why it is such a huge victory for the International enforcement agencies who are waging a war, which I describe as Online Scammer's Armageddon in my own publications and it is also the reason why I refuse to join any affiliate program unless I negotiate with somebody on a person to person basis or I use the products/services myself.

Thank you once again for takng the trouble to come in here and explain what sort of outfit it was.

Just a few questions if I may....

1.When are Reed and Kimbrell due to face these court cases??...
2.Same question for Mcnight??.....
3.Will there be claw backs in the ASD case??....
And
4.Did Charris Johnston of 12dp fame ever face court for running a ponzi??...(If yes then what happened??)....

Originally Posted by okosh

Just a few questions if I may....

1.When are Reed and Kimbrell due to face these court cases??...
2.Same question for Mcnight??.....
3.Will there be claw backs in the ASD case??....
And
4.Did Charris Johnston of 12dp fame ever face court for running a ponzi??...(If yes then what happened??)....

1) AFAIK, To date, Reed and Kimbrell have been dealt with only via SEC instituted securities related civil proceedings and the subsequent recovery by the court appointed receiver.

2) AFAIK, McKnight has been the subject of similar SEC instituted actions and receivership XRoads - Case Management Services
AFAIK, no criminal charges have yet been filed, although Legisi still remains one of 12 companies named in a multi agency ongoing investigation and complaint WRT wire fraud and money laundering

In my extremely amateur reading of the situation, it would appear that the ASD/Bowdoin case signalled the beginning of a new strategy WRT dealing with HYIP ponzis. That strategy involving using both civil charges involving the securities violations AND criminal action involving mail fraud, money laundering and conspiracy.

3) Without having any inside information, it would be extremely surprising if there was not a vigorous clawback procedure instituted following settlement of the civil proceedings.

4) AFAIK, 12DP/Johnson have thus far only been dealt with under the "old" strategy of securities violations based civil action/s.

I am still curious to know how such a pernicious outfit could take root and grow to such heights. What was "the label on the seed packet"? Was it first advertised as a HYIP, an autosurf, a reverse pension plan, a private investment program, a millionaire's club or just another of the "make money online" deals which looked fairly innocuous when it started?

In Legisis' own words:

The key to our long-term success at LEGISI.com is the same as any individual for attaining personal wealth � Multiple Streams of Income. Currently, our funds are at work in the very lucrative FOREX (Foreign Exchange) and COMEX (Commodities Exchange) arenas with a small amount in the Stock Market. Profits from these investments as well as Internet Marketing and Sports Arbitrage Trading activities are used to enhance our program(s) and increase stability for the long term. Future plans include E-Currency Exchange Services as well as sales of various information and health related products through strategic alliances and partnerships with various marketing concerns. Profits from these activities will increase liquidity and allow for Weekly and, eventually, Daily Payout Plans. But don't look for ridiculously high, unsustainable rates of return.

It was heavily promoted on the usual suspect forums by Matt Gagnon/Mazu Publishing:

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21532 / May 25, 2010

SEC v. Matthew J. Gagnon, Case No. 2:10-CV-11891 (E.D. Mich.)

SEC vs Matthew J. Gagnon Litigation release

From memory, the "founder" of Legisi, Greg McKnight was involved with Mazu/Gagnon in the Vanuatu based Global Digital Transfer/GDT/DXIO/DXGold fake global currency HYIP ponzi which ran from around 2005 until 2007

From the SEC Action against McKnight, filed 7/6/2011:

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that, in addition,Defendant McKnight shall pay disgorgement of $3,613,259.21, representing investor funds Defendant McKnight diverted in furtherance of the fraud alleged in the Complaint, together with prejudgment interest hereon in the amount of $192,596.62, for a total of $3,805,855.83. Defendant McKnight shall be liable for payment of this $3,805,855.83, jointly and severally, with Matthew J. Gagnon and others to whom Defendant McKnight paid these sums, should any of them also be held liable for disgorgement of said sums.

And in reply to a previous post from April, Legisi was a "HYROL" - High Yield Return on Loan. You weren't an investor, you were "loaning" McKnight the money. He would then pay you 12-15% per month interest, just like a HYIP (which it was of course). Same animal, different name.

Glad to see littleroundman and others still following up on this one.

In the 7th interim report the receiver says that he will vigorously pursue claims against net winners and collections of judgements obtained....

To date he has recovered 125K from winners and has begun suit against 7 "Net winners who received substantial net gains and have refused to return those gains to the estate"....

Originally Posted by path2prosperity

Thanks LRM. I did know about that case, as it was an autosurf. I could have sworn I saw Jack Cobb's name on that clawback list. I had never heard of clawbacks from programs in a different genre. What sort of category did this scam come under?

What you are hunting for is on pages 49 and 50 of this link:

http://www.wfperkinsforcep.com/pdf/C...-Statement.pdf

Hope this helps,There are some names that you might recognize.

Or you can start from Post #3339 in this MMG thread...."GoldKitty" posts the info so you can skip the other posters if you only want the actual info.......
Colon End Parenthesis - Colonendparenthesis.com

Read the full story here on the PATRICK PRETTY BLOG

http://www.detroitnews.com/

Originally Posted by littleroundman

http://www.detroitnews.com/

Thanks for the update! I saw this in the paper this morning.

Next question is - how loudly is McKnight squealing to the Feds about his accomplices? He's got 4 months to cooperate before sentencing in June, and that's a lot of time to build more cases, especially against Gagnon and others.

Glad to see some kind of criminal justice served here. Long time coming, but it appears to have been worth the wait. We will see!

More news from the Patrick Pretty blog.

WILLFUL BLINDNESS: With Legisi Operator Now Convicted Of Wire Fraud, HYIP Colleague And Fellow Ponzi-Forum Darling Nicholas Smirnow Of Pathway To Prosperity Listed As ‘Wanted’ By INTERPOL; Meanwhile, Cheerleading For JSS Tripler Continues

I was particularly interesting in the Nick Smirnow case. Nick is on the run and I cant believe he has not been caught yet.

Originally Posted by Eddie Haskell

More news from the Patrick Pretty blog.

WILLFUL BLINDNESS: With Legisi Operator Now Convicted Of Wire Fraud, HYIP Colleague And Fellow Ponzi-Forum Darling Nicholas Smirnow Of Pathway To Prosperity Listed As ‘Wanted’ By INTERPOL; Meanwhile, Cheerleading For JSS Tripler Continues

I was particularly interesting in the Nick Smirnow case. Nick is on the run and I cant believe he has not been caught yet.

Interesting. Months ago the word was that they knew where he was, just gathering evidence before extraditing, but with Interpol having a wanted flyer out on him, makes ya wonder...!

Originally Posted by laidback

Interesting. Months ago the word was that they knew where he was, just gathering evidence before extraditing, but with Interpol having a wanted flyer out on him, makes ya wonder...!

We have to get this thug laidback. He is the worst of the worst imo and I remember fighting the idiots at at TG along with the mods who hated me. The mods at the talk gold crime forum did there best to protect this criminl. What does that say about them? They banned me for telling the truth. I have never been wrong.

Talk gold hates the PP blog also. He spells it out. Talk Gold can kiss my lilly white ass. I am sick of them and there BS.

Originally Posted by Eddie Haskell

We have to get this thug laidback. He is the worst of the worst imo and I remember fighting the idiots at at TG along with the mods who hated me. The mods at the talk gold crime forum did there best to protect this criminl. What does that say about them? They banned me for telling the truth. I have never been wrong.

Talk gold hates the PP blog also. He spells it out. Talk Gold can kiss my lilly white ass. I am sick of them and there BS.

What was even more pathetic was the crowd at MycrapForum and ASA trying to defend him. At least ASA bit the dust, and Mutts forum is a ghost town.