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Thread: Why does it take so long for government action?

  1. #1
    surfer's Avatar
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    Why does it take so long for government action?

    I know that there are far too many scams for the various governments to keep up with completely, but so few blatantly obvious ponzis actually ever have anything formal entered against them.

    How difficult would it be to have an agent or several agents monitoring the HYIP sites with a system put in place to streamline the legal process against these things?

    Do you guys think it's because most of these scams die so quickly it would be a waste of manpower or is it because the usual victims of these scams aren't deemed important enough for agencies to stay on top of matters better. Or some other reason?

    Your thoughts?

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    Re: Why does it take so long for government action?

    I'm not sure how qualified I am to comment in this area, but it is probably a myriad of things, such as how much money is involved, how many persons affected, what evidence they have or can get, and identifying who and where the perpetrator is. You also have the situation as to which agency will pursue the matter. I would hope the criteria would NOT include WHO the victims are. In reality, the decision may be as basic as prioritizing the economic impact of the scams, whether monetarily or socially.
    It seems like in this "industry" common sense is not all that common!

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    Re: Why does it take so long for government action?

    Quote Originally Posted by laidback View Post
    I'm not sure how qualified I am to comment in this area, but it is probably a myriad of things, such as how much money is involved, how many persons affected, what evidence they have or can get, and identifying who and where the perpetrator is. You also have the situation as to which agency will pursue the matter. I would hope the criteria would NOT include WHO the victims are. In reality, the decision may be as basic as prioritizing the economic impact of the scams, whether monetarily or socially.
    What appears to be a long time in this day and age, is actually a very short time in the "vast eternal plan." Crime is, always has been been and always will be, the biggest growth industry on the planet. Crime prevention is the second largest. The gap between the two is decreasing faster than ever before. Four years to bring a major felon like Bowdoin to justice and nail and his accomplices is very good timing when you think of the larger picture.

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    Re: Why does it take so long for government action?

    Well, there would be no way for any agency to have an idea of how much money or how many people are involved until they were able to pursue them and obtain that info from the scammer's records.

    My point is why can't an agency like the SEC, for example, have some sort of streamlined process in place to at least make a filing/posting on their website that states a company is operating illegally even if they don't have the time/manpower to pursue the scammer immediately.

    I mean, how hard is it to see that something like JSS Tripler is offering 2% interest per day to U.S. citizens. If they aren't registered with the SEC to do so, they are in obvious violation of the law. Posting something like a C&D order pertaining to selling to U.S. citizens would certainly prevent more naive newbies from joining up.

    Man, I hate government red tape, lol.

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    littleroundman is offline Administrator
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    Re: Why does it take so long for government action?

    Rank Country (or dependent territory) Population Date

    3 United States 313,448,000 April 29, 2012

    Number of employees, SEC: approximately 3500
    The only thing necessary for the triumph of evil is for good men to do nothing

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    Re: Why does it take so long for government action?

    Might be an acceptable answer if all 313,448,000 were running ponzi scams.

    Like I said, I know it's impossible to chase down every ponzi, but I think they could do a lot better in at least issuing something.

    Personally, I'm inclined to believe it's a mixture of too much red tape in the legal system and most online ponzis not being high priority because a large percentage of the people involved do know what they are involved in.

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    littleroundman is offline Administrator
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    Re: Why does it take so long for government action?

    Here's a few points:

    * currently there are over 2000 HYIP ponzi games on the "usual suspect" forums

    * A large number of which are run from outside the USA

    * Many, if not most, run by people who use false identities, untraceable offshore payment processors, disposable, untraceable cell phones, hijacked wireless 'net connections, money laundering services and various other identity concealing methods.

    * many last only a matter of days or weeks.

    * many involve only a relatively few dollars, making prosecution less cost effective. For example, it is not unusual to find 30 or 40 small time HYIPs all "owned" by the same person/s parked on a HYIP friendly server waiting to be brought online as required AND gaining credibility as far as time since the domain name was registered. 30 X $1000 is the same as 1 X $30,000 with a far greater likelihood of staying "under the radar" and far less chance of HYIP losers complaining.

    * very few of the "usual suspects" are who they claim to be. Good fraudsters are prepared to spend time establishing bona fides and identities.
    In fact trusted "identities" can be bought or exchanged easily on the usual suspect forums.

    " HYIP ponzi players are notoriously uncooperative and many spend as much effort deliberately covering their tracks as HYIP owners.

    *** I urge ANYONE interested in HYIP ponzis to read this Letter from a scammer published on the Talkgold forum for an insight as to what goes on behind the scenes.
    The only thing necessary for the triumph of evil is for good men to do nothing

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    Re: Why does it take so long for government action?

    LOL.

    I forgot about that letter. It's been a while since I read that.

    If nothing else, I'm glad I posted just so that got brought up again.

    Okay, so there's too many to make it all worthwhile.

    Let's go from another angle.

    What about forums like MMG and TG that promote these.

    Why are they allowed to continue to exist?

    Even if they are on scam friendly webhosts, wouldn't an organization like ICANN be able to force a registrar to redirect or shut down the domain?

    Just curious and thinking out loud.

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    littleroundman is offline Administrator
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    Re: Why does it take so long for government action?

    You have me there, I have no clue.

    I have no idea of the legality or otherwise of what the usual suspect forums do or the difficulties of prosecuting the owners, them being based in strange, far off places buried under who knows how many corporate shields.

    I find it hard to imagine, though, there isn't a very good reason for them being allowed to continue.
    The only thing necessary for the triumph of evil is for good men to do nothing

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    Re: Why does it take so long for government action?

    Well, unless all the countries of the world are organizing one giant global sting operation to incarcerate all of the ponzi players and as many owners as possible, I don't see where whatever "good" letting them alone does outweighs the bad that these communities do to the world.

    Now that's a nice dream. All the promoters and owners at these forums being tracked down methodically by some super hacking software with agents knocking on/down the doors of thousands of pimps at the same time.


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    Re: Why does it take so long for government action?

    Quote Originally Posted by littleroundman View Post
    You have me there, I have no clue.

    I have no idea of the legality or otherwise of what the usual suspect forums do or the difficulties of prosecuting the owners, them being based in strange, far off places buried under who knows how many corporate shields.

    I find it hard to imagine, though, there isn't a very good reason for them being allowed to continue.
    Actually, you had the best reason for them to be allowed to continue..............it's a resource for LE to get info on them

  12. #12
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    Re: Why does it take so long for government action?

    Surfer:

    Sorry to be so late to this party, but maybe I can shed some light on why it takes so long before any action is taken by law enforcement in general. There is no way that I can provide you all the reasons, but will just mention the most obvious ones.

    First, law enforcement is "reactive" not "proactive" when it comes to this type of crime, or any crime for that matter. First there has to be victims, and monetary loss. Until they shut down/disappear there are no victims and loss. Once there are victims, then the investigation starts. Back in 2004, the averagle SEC investigation could take 2 years, and that was just for the investigation. Then toss in trying to find the perp, recover any money and you are talking another 6 months to a year, if they are lucky to find them. Usually the money is long gone and not recoverable. Then once that is done, charges are filed and the trial process begins; which can take another 2-3 years sometimes.

    Then you had over 1800 white collar crime investigators moved from the FBI unit to Homeland Security and they were not replaced back in 2007. Most agencies are grossly understaffed, and shockingly many were not computer savvy to do reverse IP Lookup, allocation ranges, reverse domain/name, IP address allocated, open ports, network blocks, network tracking, etc, etc.. When you toss in the rampant white collar crimes in these industries: mortgage, banking, insurance, welfare, stocks, accounting, embezzlement, construction, home repair, heating and cooling, pump and dump, and the list goes on and on, there just aren't enough investigators to cover them all. The Cyber-Criminals know this.

    Toss in overcrowded court calendars, continuance requests, jurisdictional transfers, scheduling conflicts between defense and prosecutors, illness, deaths in the family, vacations, and the most simple case can take a year just to get all the parties available to hear and try the case. This is why there are so many plea deals so they can free up court calendars and still receive some kind of justice.

    It is also a reality that law enforcement must prioritize the cases they are working on by the number of victims and dollar lost; and in some cases the amount of money that can be recovered.

    Add in that most of the law enforcement agencies have seen an increase of 300-800% of new filings/complaints from the previous year, and you have the system overloaded with investigations/cases.

    It is was for this reason that I formed Eagle, to assist law enforcement with most of the research so there investigation could center only on what law enforcement can do. Thus freeing up a lot of the basic research manpower and time.

    As I said, this is only a tip of the iceberg as to why it takes so long. I hope this helped.

    EagleOne
    Founder/President Eagle Research Associates
    http://eagleresearchassociates.org
    http://swindles.org
    Author: "Robbing You With A Keyboard Instead Of A Gun - Cyber Crime How They Do It" available in soft cover and eBook at Amazon.com
    Lifetime Member of the National Association of Distinguished Professionals

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    PPBlog is offline Senior Member
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    Re: Why does it take so long for government action?

    There are any number of cases that show the enormous effort it takes to reverse-engineer a single fraud. Many of these frauds are incredibly elaborate. In fact, "incredible" as a descriptor probably even understates the lengths to which the criminals and their accomplices go to mask the fraud.

    Among the many problems with these schemes is that they introduce illicit proceeds to banks at the local level. An HYIP operator speculating about a "cruise missile" attack by the evilBUBment on his servers in the Netherlands could be introducing illicit proceeds into a bank in, say, Wisconsin or New York -- or ANY other U.S. state.

    A few cases provide a glimpse into the maze:

    * EMG (aka Finanzas Forex). Secret Service/IRS Task Force case (like AdSurfDaily). Cross-border HYIP fraud. Investigation started with civil-forfeiture complaint in Florida (like AdSurfDaily, only the ASD complaint was brought in D.C.). Money tied to narcotics trafficking investigation in Arizona. (Note: A purported debit-card supplier to AdSurfDaily is an alleged money-launderer for a narco business in Medellin, Colombia. Yes -- that Medellin.) At least 59 bank accounts, 294 bars of gold and nine luxury vehicles were seized in the EMG/Finanzas Forex case. "Program" advertised as lucrative and harmless on MoneyMakerGroup and TalkGold. Haul exceeds $100 million and even may exceed $200 million. In general, the "program" offered a payout far below the current payout advertised by JSS Tripler/JustBeenPaid, for example.

    Another point of interest: Like filings in the AdSurfDaily, Pathway to Prosperity and Legisi HYIP cases, filings in the EMG/Finanzas Forex case refute any notion that the Feds do not pay attention to what's being said on forums and Blogs. Anyone who tells you that the Feds do not pay attention to what's being written online -- whether by anonymous posters or people who provide their names -- is either a liar or grossly misinformed or possibly wants to make you believe (or even himself) believe that anonymous postings have no investigative value.

    * George Theodule Ponzi in Florida. The filings in the Theodule case are truly frightening. It is literally true that a bank booted Theodule and he immediately took his pollution to another bank. It also is true that the Theodule scam was in part sanitized through the creation of a bogus regulatory agency designed to make investors believe the government and/or the business community had given a stamp of approval. (Note: JSS/JBP is using a "U.S. patent" claim.) All Theodule banks/financial institutions in the chain have been sued by the receiver. A lawyer has been disbarred. Any number of clawback lawsuits have been filed. Court filings strongly suggest interconnectivity between the Theodule Ponzi and the EMG/Finanzas Forex Ponzi.

    One of the Theodule victims is a nursing assistant -- then 53 years old -- who plowed her IRA into Theodule's Ponzi and took out a second mortgage and plowed the proceeds from that into the Ponzi. The total was $80,000. Unlike JSS/JBP, which says it will triple money in a period of days, Theodule promised "only" a doubling of the money in a period of days.

    ** Jeremy Johnson case in Utah/Nevada. Not an HYIP, but HYIP-like because of the incredible maze. In January, the receiver announced he had looked at more than 265 bank accounts and other records from 35 financial institutions and 25 other businesses. The case involves at least 115 affiliated entities and shell companies and the Receiver says he discovered at least another 65 entities that were involved in moving funds and concealing assets.

    PPBlog
    Last edited by PPBlog; 06-06-2012 at 08:54 AM. Reason: added deatil about where ASD complaint was filed

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    wserra is offline Senior Member
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    Re: Why does it take so long for government action?

    Quote Originally Posted by littleroundman View Post
    *** I urge ANYONE interested in HYIP ponzis to read this Letter from a scammer published on the Talkgold forum for an insight as to what goes on behind the scenes.
    The scammer-author of that letter leaves one thing out:
    Quote Originally Posted by Random HYIP Scammer
    Always talk about those few imaginary people who made more than a few bucks. They don't exist, of course - the only people who made more than a few bucks were all us. Human nature being what it is, however, there will always be a few benighted souls who will believe that, next time around, they will be among those lucky few. You could even leave a couple of clues so that the inquisitive might "investigate" their identities and "find" one or two - who will, of course, be us, shilling. Thus does your apologia continue the scam.
    As for why anti-HYIP govt action takes a while, if it occurs at all: I agree with all of what Lynn and PP had to say, but would add one thing. I've been a lawyer for 36 years, and during part of that time I was a prosecutor. Part of the law enforcement prioritization process is assessing the identities and actions of the victims. Other things being equal, priority will go to the innocent victim. Most cons depend to some degree on greed in order to function. Believing that some guy from Belize whom you've never heard of can really get you 2|5|10 percent per day requires that avarice blind common sense. If I, as a prosecutor, only have the resources to go after (a) the guy who steals the identity of a little old lady or retired parson and empties their retirement accounts, or (b) the guy who cons a willing gift from someone who hopes to get rich quick, I know what I'll do.
    "A wise man proportions belief to the evidence."
    - David Hume

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    kschang is offline Senior Scambuster
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    Re: Why does it take so long for government action?

    The short answer is government often need a whole YEAR of investigation before they can move in with their injunction, at least in the Western countries. Australia sued TVI Express trio "TVI Oz Team" in 2010 and the case wasn't wrapped up until last month. Canada's "Business in Motion" Ponzi was exposed by CBC in 2009, but charges were not filed until 2011 by the RCMP. FTC and state Attorney General's office spent a whole YEAR investigating Burn Lounge before moving in. It just takes them time.

    And what's the worse that can happen? The HYIP gets hit with a Cease and Desist, and that's about it. TVI Express got that from state of Georgia, which essentially drove them out of the US, but they kept on moving to other countries. South Africa is STILL trying to untangle TVI Express mess (and other Ponzi schemes) since end of 2010 as they had hired forensic accounting firm to trace the money. By the time they're done there will be little left. (There was a update in April 2012 about how they're STILL tracing the money).

    Sometimes, I really like the communist countries. China, within months of discovering TVI Express scam in 2009, shut it down by announcing it as a scam over national news, then ordered EVERY Public Security department to go after it, and even launched a 100-day anti-pyramid-scheme campaign in 2009 to beat it and all other similar schemes, with tons of arrests (after which they awarded a bunch of medals to the local cops and whatnot).

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    PPBlog is offline Senior Member
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    Re: Why does it take so long for government action?

    Quote Originally Posted by kschang View Post
    South Africa
    There is a well-known pyramid case in South Africa in which Maritjie Prinsloo was found guilty on 122,000 counts of fraud, money-laundering and racketeering.

    Prinsloo insisted that, had the government not acted against her, she could have turned it around.

    That claim reminded me of the case of American Ponzi schemer Dennis Bolze, now doing 27+ years.

    Bolze famously told a judge that all he needed to start making the victims of his $21 million scheme whole was the Internet, a computerized program — and a little time.

    PPBlog

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    kschang is offline Senior Scambuster
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    Re: Why does it take so long for government action?

    South Africa is famous for some "racism defense"... South African TVI Express scammer tried to explain that any body against TVI Express is "against black people getting rich".

    TVI South Africa play race card as regulators close in | BehindMLM

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