eAdGear: Wang and Yuen Plead Guilty in Criminal Case
Following the filing of a Superseding Information document, and sealed Plea Agreements, we have this:
On May 27, 2015, defendant Charles Wang, pled guilty to Counts One and Two of the captioned Superseding Information, and agreed to pay a forfeiture money judgment in the amount of $731,405.33 (“Forfeiture Money Judgment”). The defendant admitted that the Forfeiture Money Judgment represents the funds that were involved in the structuring violations and, thus, is forfeitable to the United States pursuant to 31 U.S.C. § 5317(c) and the procedures outlined in Rule 32.2 of the Federal Rules and Criminal Procedures. The defendant further agreed that the court enter a personal money judgment in the amount of $731,405.33.
On May 27, 2015, defendant Francis Yuen, pled guilty to Counts One and Two of the captioned Superseding Information, and agreed to pay a forfeiture money judgment in the amount of $731,405.33 (“Forfeiture Money Judgment”). The defendant admitted that the Forfeiture Money Judgment represents the funds that were involved in the structuring violations and, thus, is forfeitable to the United States pursuant to 31 U.S.C. § 5317(c) and the procedures outlined in Rule 32.2 of the Federal Rules and Criminal Procedures. The defendant further agreed that the court enter a personal money judgment in the amount of $731,405.33.
BREAKING: Criminal Charges Filed Against eAdGear’s Wang and Yuen
Below is part of the Sealed Indictment, issued in late September alleging Conspiracy against eAdGear’s CEO Wang and COO Yuen, which was recently unsealed for public viewing:
I have added documents onto the Files website.
SEC Calls eAdGear a $129 Million Pyramid Scheme
SEC Announces Cases Targeting International Pyramid Scheme Operators
FOR IMMEDIATE RELEASE
Washington D.C., Sept. 26, 2014
—The Securities and Exchange Commission today announced charges against the operators of an international pyramid scheme that raised more than $129 million from investors worldwide, primarily in the U.S., China, and Taiwan. The case follows another against a separate pyramid scheme that lured investors in the U.S., China, and Korea with seminars, webinars, and YouTube videos.
The newest case, filed in federal court in San Francisco, charges Hong Kong-based eAdGear Holdings Limited and California-based eAdGear, Inc., along with operators Charles S. Wang and Qian Cathy Zhang, of Warren, N.J., and Francis Y. Yuen, of Dublin, Calif. According to the SEC complaint, even though eAdGear claimed to be a successful Internet marketing company, nearly all of its revenue was generated by investors, not its products or services.
The complaint alleges that eAdGear’s operators used money from new investors to pay earlier investors as well as to repay a personal loan and purchase million-dollar homes for themselves. It alleges the operators concealed and perpetuated the scheme by displaying sham websites on eAdGear’s own site to make it appear as if it had real, paying customers and manipulated revenue distributions to investors to appear profitable.
“eAdGear and its operators falsely claimed that they were running a profitable Internet marketing company when in reality, they were operating a Ponzi and pyramid scheme that preyed on Chinese communities and caused investors to lose millions of dollars,” said Jina L. Choi, director of the SEC’s San Francisco Regional Office.
The eAdGear case follows one filed Monday in federal court in Georgia against Zhunrize Inc. and CEO Jeff Pan for allegedly defrauding investors of more than $105 million since 2012. Despite its claims to be a legitimate multi-level marketing company, Zhunrize derived most of its funds from selling memberships, not products, according to the SEC complaint.
“Zhunrize claimed to offer investors the opportunity to be an ‘e-commerce Business Owner’ selling products to customers through a website. In fact, it was a pyramid and ‘profits’ came from fees paid by later investors,” said William Hicks, associate regional director of the SEC’s Atlanta Regional Office.
In both cases, the courts granted the SEC’s request for an asset freeze and issued a temporary restraining order. In the case of eAdGear, that order bars the defendants from soliciting investors, including through websites they have used until now – www.eadgear.com, www.eadgear.net, www.winteam777.com, and www.winteam168.com. A court hearing has been scheduled for October 10.
Jessica W. Chan, John A. Roscigno, and Jason M. Habermeyer of the SEC’s San Francisco Regional Office conducted the eAdGear investigation. Erin E. Schneider and Cary S. Robnett supervised the investigation. Ms. Chan and Susan F. LaMarca will lead the SEC’s litigation. The SEC appreciates the assistance of the United States Attorney’s Office for the Northern District of California and the Federal Bureau of Investigation. It also appreciates the assistance of the Hong Kong Securities and Futures Commission, the China Securities Regulatory Commission, the Ontario Securities Commission, and the Financial Conduct Authority in the United Kingdom.
Michael E. Mashburn and Kristin Wilhelm of the SEC’s Atlanta Regional Office conducted the Zhunrize investigation, supervised by Peter J. Diskin. Ms. Wilhelm is leading the SEC’s litigation.
Behind MLM: JubiRev ditch auto reinvestment, add Quality Score
After taking in who knows how many hundreds of thousands (millions?) of dollars from affiliates who were urged to “purchase as many JubiBucks as (their) resources allow(ed)“, recruit as many “low-hanging fruit” affiliates from rival revenue-sharing companies and months and months of reassurance that their revenue-sharing compensation plan was “100% compliant”, JubiRev announced today two major changes to the plan.
In a webinar that went live just a few hours ago, JubiRev announced that they would be abolishing the automatic (and mandatory) re-investment component of the daily ROI paid out to affiliates, as well as the introduction of a “Customer Quality” score.
Read the full article here
Northern California District Issues “Consent /Declination” Notice to eAdgear, Inc.
As you may recall, eAdgear, Inc. (dba GoFunRewards and GoFunPlaces) decided to abandon/terminate their affiliates and the entire US market “acting on advice from legal counsel” as of May 1st; this new filing in their case raises several questions. Since they ran back to Hong Kong like their butts were on fire, will they actually answer this filing? After all, the last thing they seem to want is a confrontation with the US Federal Court system.
EADGEAR INC v. RANDAL WILLIAMS
This matter has been assigned to Chief Magistrate Judge Elizabeth D. Laporte for all
purposes including trial.
The magistrate judges of this district have been designated to conduct any and all
proceedings in a civil case including a jury or nonjury trial and to order the entry of a final
judgment, upon the consent of all parties.
A review of the file discloses that the Consent /Declination to Proceed Before a United States
Magistrate has not been filed in this case. Please select one of the attached forms documenting your
consent or request for reassignment and file it with the Court by May 24, 2013.
Attached to the filing are 2 pages, one Consenting to proceedings before a US Magistrate Judge and the other declining assignment of this case to a Magistrate judge and requesting all proceedings before a US District Court Judge. I have a feeling eAdgear wants neither of these options and will likely let the lawsuit be dismissed.
Federal Civil Suits Filed In Texas And California Between eAdGear And JuviMax
In the Northern District of California, Plaintiffs eAdGear and Go Fun Places have filed suit against Defendants Randal Williams, Prosperity Formula, LLC., Jubimax LLC, Jubimax, Inc. and Affiliate Pro, Inc. (and 100 unnamed Defendants) alleging:
Misappropriation of Trade SecretsViolation of Computer Fraud and Abuse Act, 18 USC § 1030
- Violation of California Penal Code § 502
- Breach of Fiduciary Duty and Duty of Loyalty
- Tortious Interference with Contractual Relations
- Tortious Interference with Prospective Economic Advantage
- Inducing Breach of Contract
- Breach of Contract
- Breach of Implied Covenant of Good Faith and Fair Dealing
- Unfair Competition
Gee, I wonder if they left out anything? There is a “Demand for Jury Trial” on the Complaint, something that would prove interesting down the road.
In addition to the California lawsuit, we have another in the Western District of Texas wherein the roles are reversed from those above. In the Texas lawsuit, it is Plaintiff Randall Ray Williams filing suit against Defendants eAdGear Holdings USA, Inc., eAdgear, Inc., GoFun Places, Inc., Seafreed Travel, Francis Yuen, Charles Wang, Mike Driggers, Jr., Paul Nash, Glenn M. Jensen, and Kent McLaughlin. Williams is alleging the following in his lawsuit:
- Unlawful Business Practices under § 15.05 of the Texas Business and Commercial Code
- Injuries to Business Reputation under § 16.29 of the Texas Business and Commercial Code
- Breach of Contract
- Breach of Fiduciary Duty
- Slander and Defamation
- Tortious Interference with a Business Relationship
- Damages to Business reputation
- Unfair Competition
- Unjust Enrichment
This case also has a “Jury Demand” listed and I can hardly wait until Discovery begins. I love it when one alleged Ponzi/Pyramid scheme files suit against another alleged Ponzi/Pyramid scheme. It could prove enlightening for us all.
I have uploaded both lawsuits onto the Files website, on a separate page entitled “eAdGear Filings”.