Looks like there is trouble in Paradise. Subpoenas were issued for Don Gillette, Melton McClanahan and John Schepcoff, Yes, John Schepcoff, the guy with the “1000 times better than Zeek Rewards” new program in Hong Kong for whom he is recruiting.
Along with these 3 subpoenas, PayPal and Societe Generale (A French multinational bank and finance company) were also issued subpoenas. I have uploaded these onto the Files Website.
NOTICE Of Filing by Securities and Exchange Commission (Attachments: # 1 Subpoena to Testify at a Deposition to Don Gillette, # 2 Subpoena to Testify at a Deposition to Melton McClanahan, # 3 Subpoena to Testify at a Deposition to John Schepcoff)(Huddleston, Pat) (Entered: 06/04/2013)
Investor Alert: Kansans Cautioned About Potential Fraud Tied to International Investment Scheme
Topeka, KS— The Kansas Securities Commissioner issued a cease and desist order after learning that at least four Kansas residents had invested a total of $22,000 in an international investment scheme.
The order alleges that Inter Reef Ltd., a company based in the United Kingdom, used a website to operate an investment scheme known as Profitable Sunrise. The website described five investment plans that offered gaudy returns of 1.6% to 2.7% on a daily basis. Profitable Sunrise violated Kansas securities laws by failing to register its investment offering as securities in Kansas.
The Office of the Securities Commissioner of Kansas is continuing to investigate the matter as it relates to Kansas residents. Josh Ney, Interim Securities Commissioner said, “If an investment opportunity sounds too good to be true, it probably is.”
He also urges any Kansas residents that have invested money with Profitable Sunrise or had contact with persons promoting Profitable Sunrise to contact his office immediately. “Considering the extent of this scheme, it is likely that several other Kansas residents have funds at risk with Profitable Sunrise. Our office needs information from such people in order to stop this type of activity,” stated Ney.
Also named in the cease and desist order are two individuals and an organization that promoted Profitable Sunrise to Kansas residents. David P. Cozzocrea, a Florida man, promoted Profitable Sunrise via a website known as KTFAlways.com. Two Kansas investors learned about Profitable Sunrise through KTFAlways.com and contacted Cozzocrea directly. Cozzocrea provided the investors with instructions for setting up an account with Profitable Sunrise and directly funded their accounts with Profitable Sunrise.
(emphasis added by me below)
Two other Kansas residents invested in Profitable Sunrise through an organization known as the NJF Global Group Community. The NJF Global Group Community was operated by Focus Up Ministries, Inc. and its founder, Nanci Jo Frazer. The NJF Global Group Community promoted Profitable Sunrise as a fundraising opportunity for religious-based and charitable organizations.
At least thirty other states have issued cease and desist orders or investor alerts regarding Profitable Sunrise. The United States Securities and Exchange Commission (SEC) has filed a complaint against Profitable Sunrise. The SEC complaint alleges that Inter Reef Ltd., the company that operated Profitable Sunrise, employed devices, schemes, and artifices to defraud persons that invested with Profitable Sunrise.
Kansans are encouraged to check the Securities Commissioner’s website at ksc.ks.gov before investing. For more information, contact Caley Love, Director of Communications, at email@example.com or call our office at 785-296-3307.
Around April 25th of this year, James Paul Schilling filed a “Motion to Unfreeze, Release and Return” the $ 57,300 that he claims to have wired to the many institutions that Inter Reef, Inc./ProSun used. Within the SEC’s response in Opposition, they say:
Rather than send their money to Inter Reef, people who wanted to purchase a Profitable Sunrise investment sent their money to another company designated by Inter Reef, including:
a. Relief Defendant Melland;
b. Relief Defendant Solutions;
c. Relief Defendant Color Shock;
d. Relief Defendant Fortuna;
e. Technocash Limited (“Technocash”), an Australian entity with an address at 70 Pitt Street, Sydney, NSW, 2000, Australia; and
f. Trackford Business Corp. (“Trackford”), a Panamanian entity with an address at 50 Street, Global Plaza Tower, 19th Floor, Suite H, Panama City, Panama. (Order ¶ 9).
The SEC continues :
Melland, Color Shock, Solutions, Fortuna, Technocash, and Trackford have been unjustly enriched by their receipt of investor funds. (Order ¶ 21). Continuing violations are likely in the absence of injunctive relief. (Order ¶ 22).
In light of those findings the Court issued a preliminary injunction and continued the asset freeze against the Relief Defendants. Shilling, who is neither a party to this action, nor acting as attorney for the Defendant or Relief Defendants, has asked the Court to vacate its freeze order for certain transfers from an account that he specifies. The motion is unsupported by admissible evidence or legal authority.
The SEC’s Response in Opposition concludes:
Allowing Shilling to intervene in this case to assert claims unique to him would simply undermine the Commission’s ability to litigate this enforcement case consistent with its statutory mission to protect all investors. Given the likelihood of delay and public harm if intervention is permitted the Commission respectfully requests that the Court deny Shilling’s motion.
I have uploaded the document onto the Files website.
New to the Profitable Sunrise docket, we have this: “MOTION to Unfreeze and Release and Return Cash Wire Transfers Deposited to Profitable Sunrise by James Paul Schilling”. It seems Mr. Schilling filed this on his own, and apparently wants to jump ahead of everyone else to get his money returned.
The only problem is the Asset Freeze ordered by the Georgia Northern District Federal Court.
MOTION TO UNFREEZE AND RELEASE AND RETURN TO JAMES PAUL SCHILLING, xxxxx PLUM GROVE DRIVE, XXXXXXXXXXXX, VIRGINIA xxxxx THE FOLLOWING CASH WIRE TRANSFERS FROM BANK OF AMERICA ACCOUNT NUMBER xxxxxxxxxxxxx DEPOSITED TO PROFITABLE SUNRISE:
1. $1500 on January 17,2013 to MELLAND COMPANY S.R.O •.•..••.•••••••• $1500
2. $1800 + $4500 on February 1,2013 to MELLAND COMPANY S.R.O ••••• $6300
3. $3000 + $6000 on February 12, 2013 to COLOR SHOCK S.R.O •••••..•..••• $9000
4. $1000 + $7500 on February 15,2013 to COLOR SHOCK S.R.O. • •••••.••• $8500
5. $10,000 on February 20,2013 to COLOR SHOCK S.R.O ••.••.••.•••••••••• $10000
6. $18000 on February 28, 2013 to COLOR SHOCK S.R.O. • •••.••.•••••••••• $18000
7. $4000 on February 28, 2013 to FORTUNA-K S.R.O •.••••••••••••.•••..•••••• $4000
The filing contains detailed records of his wire transfers, something I will not be posting on the Files website as they contain a ton of personal information.
Not very long after I posted a FINRA warning about HYIP’s, I received the following comments from ProSun protagonists:
It has always amazed me how steadfastly loyal participants are in these scams. They want to believe they have not been duped, even though all of the evidence points towards that conclusion. Anyone who does not follow the “plan” has to be spreading misinformation, totally opposite to all of the “truth” being told by their sponsors, the same sponsors that made lots of money off of these same individuals.
Source: YouTube, Nancy Jo Frazer pictured on promotional material for “Focus Up Ministries.”
(Toledo News Now) –
“My name is Nanci Jo Frazer. And I live in Ohio.”
That’s how Bryan, Ohio’s Nanci Jo Frazer introduces herself in an online webinar. She also offers up statements of faith.
“I’ve asked God to guide me in his wisdom as to where I want to be.”
In the webinars, Frazer claims she’s been guided, through her charity Focus Up Ministries, to help people invest in an online investment group. The group’s called Profitable Sunrise.
She says: “He is bringing me to the reality that my job is to help the ministry – the kingdom expand…I put my own money in and I saw it grow and I saw it explode and I said – OK – this thing is incredible.”
Not incredible. But illegal – according to multiple government agencies. WTOL 11 found the Securities and Exchange Commission sued Profitable Sunrise in district court – charging the company with fraud – and freezing its assets.
The Ohio Department of Commerce filed a cease and desist order – accusing Frazer personally of recruiting investors on multiple websites. Twenty-nine other states filed similar orders.
Read the official Cease and Desist order from the State of Ohio Department of Commerce[PDF]
The amount of money invested, millions of dollars. The number of investors who never got their money back – unknown.
Ohio accuses Frazer and Profitable Sunrise of using “confusing statements” and “misrepresentations” that are “designed to deceive.”
Here’s one claim she made online: “From Monday to Friday, we are able to see ourselves grow 2.15% – and that is unheard of in the regular world.”
That would mean a $10 dollar investment would bring you $7,840 dollars after one year. Frazer also claims investors can get their money back in as few as 170 business days.
WTOL investigated further- and found Frazer declared bankruptcy in 2009. In addition, we found Focus Up Ministries is not registered with the IRS as a non-profit. We went to Frazer’s house to try to ask her about the complaints.
So, we showed licensed financial advisor Allen Lancz the SEC lawsuit, who told us “The numbers at all didn’t make sense.”
Lancz told us that “[What] scammers do is they tie in to people’s emotions, whether it’s trying to gain goodwill or credibility through a non-profit, or through a charity, church, religious pursuit – and in this case that’s exactly what they did. They’ll use the words and make it seem like they know what they’re talking about, and unfortunately a lot of these entities are great salespeople. They motivate and tug on your emotions, and they’re not knowledgeable at all, they can’t even handle their own finances.”
We spoke to the Bryan Chamber of Commerce – where her husband was a member – they didn’t comment. Ultimately, Craig Thomas did speak to Frazer on the phone as we finished our investigation – and asked her to discuss the allegations.
She said she couldn’t.
He also spoke to multiple investors who told us they don’t want to go on camera. Some are embarrassed, others just want to put this behind them. All say – they don’t think they’ll get their money back.
The Ohio Department of Commerce is still investigating, and wants any victims to come forward. If you want to contact them, call 877-683-7841, or go to www.com.ohio.gov/secu
Here are two links to YouTube videos that feature Nanci Jo Frazer giving advice regarding Profitable Sunrise.
Securities and Exchange Commission v. Inter Reef, Ltd. dba Profitable Sunrise, Melland Company S.R.O., Color Shock S.R.O., Solutions Company S.R.O. and Fortuna-K S.R.O., Civil Action No. 1:13-CV-1104 (U.S. District Court for the Northern District of Georgia)
Court Enters Preliminary Injunction Against Inter Reef d/b/a Profitable Sunrise and Extends Asset Freeze Order
On April 15, 2013, the Honorable Thomas W. Thrash of the United States District Court for the Northern District of Georgia issued an order of preliminary injunction against violations of the registration and antifraud provisions of the federal securities laws in the civil action brought by the United States Securities and Exchange Commission against Inter Reef, Ltd. dba Profitable Sunrise and four Czech companies named as relief defendants.
The Commission filed its complaint on April 4 and in its complaint alleged that Inter Reef, located in the United Kingdom, has operated a fraudulent securities offering over the internet under the name of Profitable Sunrise that has been targeted towards investors in the United States. The Commission’s complaint also named Melland Company S.R.O., Color Shock S.R.O., Solutions Company S.R.O. and Fortuna-K S.R.O. as relief defendants, alleging that they received funds from investors at the direction of Profitable Sunrise. The Court issued a temporary restraining order and granted other relief on the same day the Commission filed its complaint.
In its April 15 order, the court found that the Commission had established a prima facie case that Inter Reef had violated Sections 5(a) and (c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and preliminarily enjoined it from further violations. The court also continued its freeze on the assets of Inter Reef and the relief defendants.
For further information, see Litigation Release No. 22666 (April 5, 2013).