BREAKING NEWS – SEC Halts Pyramid Scheme – WCM777 !!!!

SEC Halts Pyramid Scheme Targeting Asian and Latino Communities

03/28/2014 12:58 PM EDT

sec-logoThe Securities and Exchange Commission today announced charges and asset freezes against the operators of a worldwide pyramid scheme targeting Asian and Latino communities in the U.S. and abroad.

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.

The court has granted the SEC’s request for an asset freeze and the appointment of a temporary receiver over the assets of WCM, WCM777, and several other entities named as relief defendants for the purpose of recovering money from the scheme in their possession.

“Xu and his entities claimed they were using investor funds to build a strong cloud services company that would then ignite other high-tech companies and ultimately make their investors very wealthy,” said Michele Wein Layne, director of the SEC’s Los Angeles Regional Office.  “In reality, they were operating a pyramid scheme that preyed on investors in particular ethnic communities, leaving them with nothing left to show for their investment.”

According to the SEC’s complaint, WCM and WCM777 sell their products exclusively to investors and have no other apparent sources of revenue.  Their offerings and operations depend almost entirely on the recruitment of new investors and purchases by existing investors to provide the money for returns.  On its website, WCM777 specifically addressed the question “Is WCM777 a Ponzi Game?” by writing, “In summary, we are not a Ponzi game company. We are creating a new business model.”

The SEC alleges that Xu and his entities made various false claims to investors about purported partnerships with more than 700 major companies such as Siemens, Denny’s, and Goldman Sachs – in some instances falsely representing that they had permission to use their logos.  Meantime, besides buying two golf courses with investor money, Xu and his entities also purchased a warehouse, vacant land, and several single family homes  They also used investor funds to play the stock market and make other related investments through intermediary companies, such as an oil and gas offering.  They also sent investor money to a rough diamond jewel merchant in Hong Kong and another unrelated company affiliated with Xu.

The SEC’s complaint alleges that WCM, WCM777, and Xu violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5.  The complaint further alleges that Xu violated Section 20(a) of the Exchange Act.  In addition to the asset freezes and appointment of a temporary receiver, the Honorable Christina A. Snyder also granted the SEC’s request for an order prohibiting the destruction of documents and requiring the defendants to provide accountings. A court hearing has been scheduled for April 10, 2014.

The SEC’s investigation has been conducted by Peter Del Greco, Maria Rodriguez, and Marc Blau of the Los Angeles office.  The SEC’s litigation will be led by John Bulgozdy.

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 For more information about the dangers the dangers of potential investment scams involving pyramid schemes posing as multi-level marketing programs, see the SEC’s investor alert, which also is available in Chinese.

BehindMLM: Phil Ming Xu linked to another scam??

Phil Ming Xu linked to Vizinova (Global Unity)

Mar.25, 2014 in WCM777 14 Comments

vizinova-logoFacing a regulatory crackdown in multiple jurisdictions, earlier this month Ponzi mastermind Phil Ming Xu publicly announced that he was giving up his WCM777 empire.

In a somewhat cryptic series of tweets, Xu revealed that he was ‘not a shareholder or officer of WCM777 or Global Unity’, having exited the company ‘due to investigations‘.

The story Xu pushed was that he’d sold off WCM777 and Global Unity to a new anonymous buyer, who he hoped would “legalize” the company and “continue his vision”.

Not surprisingly, turns out Xu might have been telling porky pies…

[Continue reading…]


 

BehindMLM: TelexFree linked to WCM777?

TelexFree US investigation linked to WCM777

Mar.06, 2014 in TelexFree, WCM777 2 Comments

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As first reported by Patrick Pretty, the US state of Massachusetts Securities Division has confirmed they are investigating TelexFree. A US investigation was first announced by Brazilian Public Prosecutor Alessandra Marques back in January, with TelexFree denying there was an investigation taking place at the time.

Since Patrick Pretty’s initial announcement at least two independent media outlets have gone on to confirm the existence of a US regulatory investigation into TelexFree, with one of them reporting the case is linked to the cease and desist issued to the WCM777 Ponzi scheme last November. [Read the rest of this entry…]

BehindMLM: Global Unity: Kingdom777 rebooted (again)

Global Unity: Kingdom777 Ponzi rebooted (again)

Feb.25, 2014 in WCM777

global-unity-logo

It’s getting rather difficult to keep up with the continuous changes Phillip Ming Xu keeps making to his global Ponzi empire. After regulators around the world began to target Xu and his WCM777 Ponzi scheme late last year, he changed its name to Kingdom777 and hid behind the skirt of newly appointed CEO, James Tenorio.

What became of Tenorio remains unclear. He published one update on the Kingdom777 website in January, after which rumors claiming he’d abandoned the post began to surface. I was never able to confirm this information, however it seems Tenorio has since gone into hiding as there has been no communication from him since.

That left Ming Xu back in charge, and with Kingdom777 barely over a month old, it appears he’s gone and changed the name of his scheme yet again.

Suspicions were raised when Kingdom777 and its associated sites went offline roughly twenty-four hours ago. Dutra’s The Paper observed that

As of early this morning the websites for Kingdom777 are down.  This includes kingdom777.com, kingdomtrade.org and kingdom777.hk. Social media is stating the outage will be for 48 hours and they are making upgrades and changes to the site.

It is unknown how unity.pe plays into this yet, however the domain is listed as repossessed by godaddy.com, the preferred domain seller of Kingdom777 owner Xu Ming.

Further initial investigations into this outage show that many of the sites are moving services to new providers and net blocks.

Worldcapitalmarket.com has relocated onto Google Cloud Services, 1and300.com has moved to a net block assigned to seizuretimegaming, Kingdom777.com has moved to Yahoo hosting, kingdomtrade.org remains at liquidweb, where many of the sites related to this scam have been since the start of the scheme.

A few hours ago emails began to trickle in with information on one of Kingdom777′s top Ponzi pimps trying to covertly shift over his downline to a “new” scheme, named “Global Unity”.

Renato Rodriguez, one of the top leaders in wcm777 might be switching all of people to “his” new company. He said “no information must be shared”.

The Global Unity website domain, “global-unity.net” was only registered just yesterday on February 24th, with much of the site still in development:

global-unity-website-not-ready-feb-2014

Continue reading “BehindMLM: Global Unity: Kingdom777 rebooted (again)”

BehindMLM: Kingdom777 not a Ponzi, just “misused words”


Kingdom777 not a Ponzi, just “misused words”

Feb.15, 2014 in WCM777

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Despite claiming that new “rules and regulations” governing Kingdom777 compliance and an “approved code of ethics” would be published on January 31st, the deadline came and went without anything surfacing.

A bit late, owner Ming Xu now appears to have delivered… but it’s probably not what you were expecting. Or given the nature of Kingdom777, maybe it was.

After previously blaming affiliate investors for turning his Ponzi scheme into a… well, Ponzi scheme, Xu released some guidelines for his investors to follow.

Citing “frequently misused words”, the directive instructs affiliates with the correct terminology Xu wishes them to use when describing or talking about Kingdom777.

incorrect-terms-kingdom777-feb-12-update

“Investments” in Kingdom777 are to be referred to as purchases – despite the fact that Kingdom777 guarantees a weekly ROI on all “purchases” made within the company.

investment-plans-wcm777

Investors who make aforementioned investments are to as members. They still obviously invest, but apparently calling them “members” doesn’t look as dodgy (provided nobody looks into your business any further than the terminology you use to describe it).

Continue reading “BehindMLM: Kingdom777 not a Ponzi, just “misused words””

From BehindMLM: Kingdom777 Stops US ROI Payments

Kingdom777 “suspends” US ROI payouts

Jan.31, 2014 in WCM777 Leave a Comment

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When US regulators came knocking on Phil Ming Xu’s door to ask about the WCM777 Ponzi scheme he was running, he kept it a secret until the state of Massachusetts went public. Xu claimed he was “suspending all US operations”, but continued to accept investment funds from and pay a daily ROI to US affiliate investors.

When California investigated WCM777, Xu again kept quiet about it but announced he was stepping into the background and changing WCM777′s name to “Kingdom777″. James Tenorio was named as Xu’s replacement.

Xu also promised Kingdom777 would eventually go public and “register its stock with the SEC”. In an “announcement” published on the Kingdom777 website in early January, Xu blamed WCM777 affiliates for his regulatory troubles.

Xu’s “blame the affiliates” announcement was made the day before California formally issued their cease and desist against Xu and WCM777. Following California’s cease and desist (January 8th), Colorado has issued their own notice and both Louisiana and New Hampshire have issued WCM777 investor alert notices.

Despite it being pretty obvious that Xu continuing to run WCM777 as Kingdom777 in the US will most certainly result in further regulatory action taken against him (if it already isn’t pending), on January 26th his successor, James Tenorio, published his first member announcement on the Kingdom777 website:

Dear Members,

It has been a busy few days for me. I have been in numerous meetings and will be in countless more as I attempt to gain a full understanding of all the details of the program we acquired from WCM 777.

Our first order of business is to ensure that we work within the guidelines of the law. In doing so, I will be officially suspending all U.S. based transactions throughout our Kingdom 777 system. I am sure with legal council that we will be able to restructure our company to be in direct compliance with all regulatory guidelines here in the US.

Our Kingdom 777 name and brand is something that I will protect and not allow people to create a negative image of our community. We will be moving towards removing those who use our brand and logo without authorization directly from Kingdom 777.

Whether or not Tenorio is stating he’ll “protect” Kingdom777 from Xu who created the Ponzi scheme, or the US regulators who have issued notices and alerts against the scheme is unclear. What is clear though is that US ROI payments to Kingdom777 affiliates have been suspended.

California, presumable after going over Kingdom777′s financials claimed WCM777 had taken in $20 million USD from its investors. How much of that was from US investors and where Xu and Tenorio have transferred that money too are no doubt questions investors will want answered.

Ditto on how Tenorio and his lawyers will modify Kingdom777′s business model to legally operate in the US. As it stands the company is still accepting investment funds from and paying out a daily ROI to non-US affiliate investors. How the company will operate in the US while Kingdom777 continues its Ponzi business model elsewhere around the world is a mystery to me.

Even if Xu and Tenorio ran a different business model in the US there’s still the mixing of funds at a corporate level. Not to mention that US affiliate investors aren’t going to play ball with a non-Ponzi “legitimate” model. Remember Bidify?

In addition to cutting off US affiliate investors from their funds, Tenorio also stated he was putting a stop to Kingdom777 affiliates changing their uplines and acknowledged that

there were recent updates to the system and that some people are waiting to hear the official statement from us of how it works. I will be releasing those shortly.

I’m guessing these are the new Kingdom777 “rules and regulations” Ming Xu stated he’d publish on January 31st (announcement was made when he blamed affiliates for his troubles).

Stay tuned…

Colorado and New Hampshire Join California In WCM777 Cease Orders

All this sort of reminds me of what happened to Profitable Sunrise; one by one, States began filing Cease and Desist Orders, Investor Warnings, and other preemptive strikes to stop the “opportunity” in its tracks. Sadly, though, these actions did not take place before many people lost a lot of money. So far, we have California, Colorado, Massachusetts and new Hampshire; the list will likely be growing daily.

wcm777-logoAlso mind numbing, at least to me, is that people still fall for these HYIP schemes; the promise of an unachievable ROI interest rate and convoluted business plan that even an MIT professor has trouble comprehending would give most people pause.

I have put these 2 new State filings below:

Stipulation for Consent Order – Colorado

Consent Order – Colorado

PRESSR_2014-01-24 – New Hampshire

From BehindMLM: California Issues C&D to WCM777

WCM777 issued cease and desist in California

Jan.27, 2014 in WCM777 11 Comments

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Following closely on the heels of Massachusetts banning WCM777 for selling unregistered securities, on January the 15th California issued a cease and desist against Xu and WCM777.

Issued on January 8th by Jann Lynn Owen, the Commissioner of Business Oversight for the state of California, the “desist and refrain order” lists World Capital Market Inc., WCM777 Inc., WCM777 Limited, (Phil) Ming Xu, (Tiger) Zhi Liu and Harold Zapata as respondents.

Xu and Liu are/were WCM777′s CEO and President respectively, with Zapata credited in the order as a WCM777 “Director” and affiliate (investor).

[Read the rest of this entry…]

From BehindMLM: Kingdom777 is “blessing” Peru?

(Note: It enrages me when I see a scheme or scam that plays on the faith of its victims. I don’t know of anything more vile that a conman could do. Perhaps scamming widows and orphans might be worse but not by much. I hope this guy goes to prison for a long time!)

Kingdom777 “committed to blessing” Peru?

Jan.18, 2014 in WCM777

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On December the 15th, after a public warning was issued by Peruvian congressman Jaime Delgado, the Peruvian government moved to ban WCM777 from operating in Peru.

WCM777 (World Capital Market) offers gains of up to 300% of the people who make an investment of between $399 and $1999 (USD).

It seems that, initially, the scheme works. However, as time passes and when it is not possible to convince more people (to invest, the company) stops paying (its existing) investors. Consumers should be alerted to this business.

Despite Peru banning WCM777, it seems some WCM777 affiliates continued to market the scheme there. On January 14th Peruvian officials enforced the ban, shutting down a local WCM777 marketing office and making several arrests.

World Capital Market has captured the public’s money without proper legal authorization, in violation of article 11 of the General Law of the Financial System and Insurance System and Organic Law of the Superintendency of Banking and Insurance (Law No. 26702).

It was also reported that the legal representatives of the company have been charged with crimes.

Now, just shy of a week after the Peruvian arrests, Kingdom777 (formerly WCM777) owner Phil Ming Xu has announced he is “commited to helping and blessing Peru”.

Huh?

[Read the rest of this entry…]