When MLM firms committing fraud tout a debit card, it’s sometimes obtained by shell firms connected to dodgy retailers.
Each GSPartners’ and PLC Ultima supplied debit playing cards by PMA Media Group, Aurae Life-style, Nvayo Restricted, Membership Swann and AU Card LLC – all owned by Christopher James Scanlon.
Scanlon was arrested by US authorities at Miami Worldwide Airport on Thursday, Might twenty fifth.
By means of his firms, Scanlon (proper) has been charged with working an “unlicensed cash transmitting enterprise”.
As per the Felony Grievance filed in opposition to him, Scanlon’s firms
operated as an unlicensed personal financial institution for its clients and had operations in america and different international jurisdictions.
Each GSPartners and PLC Ultima are MLM firms BehindMLM can verify have been shoppers of Scanlon’s unlicensed financial institution.
GSPartners solicits funding from US residents on the promise of a 300% ROI paid over 18 months.
As soon as acquired, investor funds have been laundered by GSLifestyle, a “world card answer” offered by Scanlon’s unlicensed financial institution.
Final September, Membership Swan and Nvayo Restricted abruptly suggested buyers it had terminated its enterprise partnership with GSPartners’ mum or dad firm Gold Customary Financial institution.
Following fraud warnings from Canada and the Central Financial institution of Comoros, GSPartners rebooted as Swiss Valorem Financial institution earlier this month.
As a part of the reboot, new debit playing cards are being supplied by Swiss Valorem Financial institution LTD (Kazakhstan), IBBP Pay Providers LTD (Kazakhstan) and CoinX24 AG (Switzerland).
GSPartners and Swiss Valorem Financial institution are run by Josip Heit. Believed to carry a German passport, Heit spends most of his time hiding in Dubai.
On a Might twenty fourth GSPartners Company Name, Heit confirmed Swiss Valorem Financial institution’s new playing cards are going dwell on June 1st.
[32:53] (On the) first of June all over the world, girls and gentleman.
Americans could have a neighborhood financial institution accounts. Instantly in (the) US with a financial institution with which we’re working collectively … utilizing know-how created by Swiss Valorem Financial institution.
Swiss Valorem Financial institution’s new monetary providers supplier isn’t disclosed.
PLC Ultima is an MLM crypto Ponzi scheme run by Alex Reinhardt. Reinhard is one other European nationwide hiding in Dubai.
PLC Ultima’s ties to Chris Scanlon’s unlicensed financial institution was by PLC Card.
For all intents and functions PLC Ultima has collapsed. Presently there’s discuss of a “swap” reboot, which can see PLCU bagholders swap their Ponzi coin for one more coin.
Outdoors of GSPartners and PLC Ultima, Chris Scanlon’s Felony Grievance offers you an concept of the kind of shoppers his unlicensed financial institution serviced.
Buyer-1 was a resident of New Jersey and a buyer of Aurae Life-style.
In or round 2021, Buyer-1 pleaded responsible to U.S. federal expenses for conspiring to violate the federal anti-kickback statute and conspiring to defraud the IRS.
Buyer-2 was a resident of California and a buyer of Aurae Life-style.
Buyer-2 was beforehand convicted in or round 2001 of a federal cost for conspiring to have interaction in mail and wire fraud, which arose in reference to an extended distance cellphone card rip-off.
In or round 2018, the U.S. Securities and Alternate Fee introduced a civil enforcement motion in opposition to Buyer-2 and his entity (“Fraud Entity-1”) alleging numerous federal securities violations that occurred between in or round October 2015 and in or round 2017 (“Fraud Scheme-1”).
The SEC alleged that Fraud Scheme-1 was a Ponzi and pyramid scheme. In or round 2023, the SEC achieved a settlement with Buyer-2 and Fraud Entity-1, which required Buyer-2 and Fraud Entity-1 to collectively and severally disgorge greater than roughly $20 million.
Buyer-3 was a resident of Colorado and a buyer of Aurae Life-style.
In or round December 2019, Buyer-3 was charged in a federal indictment (“Indictment-1”) with conspiracy to commit wire fraud in reference to a large-scale cryptocurrency mining scheme (“Fraud Scheme-2”), which happened between in or round 2014 and in or round December 2019.
Buyer-4 was a citizen of america and a buyer of Aurae Life-style. In or round December 2019, Buyer-4 was charged in Indictment-1 with conspiracy to commit wire fraud in reference to Fraud Scheme-2.
Buyer-5 was a resident of California and a buyer of Aurae Life-style.
In or round 1997, Buyer-5 was convicted of a federal cost for distributing methamphetamine, and was sentenced to a federal time period of imprisonment of 145 months, adopted by 5 years of supervised launch.
In or round December 2019, Buyer-5 was charged in Indictment-1 with conspiracy to advertise an unregistered safety in reference to Fraud Scheme-2.
In or round September 2020, Buyer-5 pleaded responsible to conspiring to advertise an unregistered safety in reference to Fraud Scheme-2 and to subscribing to a false tax return.
Lawyer-1 was an legal professional licensed to follow legislation within the State of Utah and a buyer of Aurae Life-style. Lawyer-1 assisted Buyer-3, Customer4, and others with transmitting important quantities of cash obtained by Fraud Scheme-2, together with by Lawyer-l’s Aurae Life-style account.
The recurring themes amongst Scanlon’s shoppers speaks for itself.
With respect to “Buyer-3”, “Buyer-4”, “Buyer-5” and “Fraud Scheme-2”, if I’m not mistaken “Buyer-3” is both Matthew Goettsche or Joby Weeks.
“Buyer-4” is Russ Medlin, “Buyer-5” is Joe Abel and “Fraud Scheme-2” is BitClub Community.
BitClub Community was a “large-scale cryptocurrency mining scheme” whose founders have been arrested in December 2019.
Two of the founders, Matthew Goettsche and Joby Weeks, are from Colorado. Scanlon’s Felony Grievance states that Buyer-3
moved hundreds of thousands of {dollars} derived from Fraud Scheme-2 by his Aurae Life-style account.
With respect to Buyer-4, we all know Buyer-4 and Buyer-3 knew one another, which inserts with them being Russ Medlin and both Goettsche or Weeks respectively.
In or round July 2019, Buyer-4 instructed Scanlon to maneuver cash from his account to Buyer-S’s account and to then ship that cash to Customer4’s Cambodian checking account.
On or about October 21, 2019, Buyer-4 offered an attestation claiming that he was a working towards legal professional licensed in Utah who served as authorized counsel and as a trustee for numerous shoppers, and he entered right into a talking engagement with an organization, through which he obtained roughly $3 million for taking part in three talking engagements.
The attestation on the backside of the doc nonetheless included the title of Lawyer-1 as an alternative of Buyer-4. The doc gave the impression to be notarized in Japan.
Buyer-4 was not a lawyer. The truth is, an Web search revealed that Buyer-4 was a noncompliant, Tier II intercourse offender.
He had beforehand been convicted of coercion utilizing sexually motivated drive and possession of kid pornography.
Buyer-4 remained a buyer of Aurae Life-style and continued to conduct monetary transactions by his account by in or round February 2020, however that the AU Entities have been conscious of pending felony expenses pertaining to Fraud Scheme-2 in opposition to Buyer-4 in December 2019.
Following his BitClub Community indictment, Russ Medlin (proper) was arrested in Indonesia in June 2020. Medlin was caught paying underage ladies for intercourse.
“Buyer-5” is from California, was charged with relation to “Fraud Scheme-2”, and pled responsible in September 2020. This needs to be Joe Abel.
Every part suits apart from me not being 100% sure on whether or not Buyer-3 is Goettsche or Weeks (Goettsche was nearer to Medlin so if I needed to guess Buyer-3 is Goettsche).
Getting again to Scanlon’s Felony Grievance and his shoppers;
Aurae Life-style was engaging to a specific sort of buyer as a result of it offered clients the flexibility to have interaction in monetary transactions with out quick scrutiny or detection by U.S. monetary regulators and offered clients with entry to the U.S. monetary system once they in any other case can be barred from acquiring a U.S. checking account.
Additional, and illustrative of Aurae Life-style’s objective, a social media account for Aurae Life-style promised its clients “discretion.”
Reflecting the unlawful conduct of Scanlon’s unlicensed financial institution and that of his shoppers;
Prospects have been charged excessive charges to turn into “members” of Aurae Life-style and to conduct monetary transactions by their Aurae Life-style accounts. Aurae Life-style additional supplied a bespoke strong gold debit card to “members” at an exorbitant charge.
AU Card membership charges as excessive as $60,000 per card are cited. Presumably MLM firms utilizing Scanlon’s unlicensed financial institution obtained a bulk low cost.
Along with the excessive “membership” charges and the costly debit playing cards, clients have been charged important charges to conduct fiat wire transfers, generally roughly 1 % of the quantity of the wire.
MLM firms utilizing Scanlon’s unlicensed financial institution had funds laundered by three US banks and two cryptocurrency firms.
The AU Entities used accounts at Financial institution-1, Financial institution-2, and Financial institution-3 to supply cash transmitting providers to their clients with out correctly registering with FinCen.
The AU Entities additionally maintained accounts at a number of U.S.-based cryptocurrency firms, together with Cryptocompany-1 and Cryptocompany-2, to facilitate cash transmitting providers to their clients that concerned cryptocurrency.
Once more, throughout this time interval, the AU Entities weren’t correctly registered with FinCen.
Supporting proof suggests Scanlon knew providing unlicensed banking providers to scams was unlawful, however figured he may keep one step forward of the legislation.
Scanlon operated the AU Entities with out acceptable regard for the relevant U.S. monetary regulatory system and considered the penalties for regulatory noncompliance as insignificant. For instance, in an trade with one other particular person working with the AU Entities, Scanlon acknowledged that the AU Entities have been shifting “quick,” however Scanlon reasoned that shifting quick is “how we win.”
Scanlon continued: “in the long run, if the regulators come and scrutinize … they let you know what you’ve got carried out unsuitable, slap you on the wrist with a advantageous, and also you remediate.”
Scanlon has been charged with one depend of conspiring to regulate and personal an unlicensed cash transmitting enterprise.
If convicted, Scanlon faces as much as 5 years in jail and a advantageous of as much as $250,000 or double his revenue.
Scanlon’s Felony Grievance particulars transfers nicely into the a whole lot of hundreds of thousands, so it’s doubtless he made nicely over $250,000.
One final level I wish to reiterate is that legitimacy through affiliation isn’t a factor.
Scanlon’s unlicensed financial institution represented it was legit as a result of CoinX was registered with FinCEN.
Membership Swan Pay as you go Accounts issued to people in america of America are offered and issued by CoinX Inc., a Cash Service Enterprise regulated and registered by FinCEN and by over 44 states listing right here.
Membership Swan Pay as you go Account entry playing cards are issued by CoinX.
That’s not how regulation and compliance works. If you’re providing the service in query then you must be registered.
The legality of your individual enterprise operations doesn’t hinge on whether or not related shell firms and/or third-parties are working legally.
The identical is true for MLM firms pitching passive funding schemes to shoppers. Neither BitClub Community, GSPartners, Swiss Valorem Financial institution or PLC Ultima are registered with monetary regulators.
On that observe, I’m unsure if there’s any hyperlink between Swan Membership’s “CoinX” and Swiss Valorem Financial institution’s CoinX24 AG.
I’ve added Scanlon’s felony case to BehindMLM’s calendar. We’ll preserve you posted on any updates.
