Post by Tony Enriquez/UKIPA Holdings on Feb 28, 2015 20:25:25 GMT 4
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23209 / February 27, 2015
Securities and Exchange Commission v. Tropikgadget FZE, et al., Civil Action No. 1:15 cv 10543-IT (United States District Court for the District of Massachusetts)
SEC Charges Operators of International Pyramid Scheme Targeting Latino Communities
The Securities and Exchange Commission today announced that it filed charges against three company officers and 12 promoters behind an international pyramid scheme targeting Latino communities in the U.S. The agency also obtained a court order to freeze the assets of the company officers, promoters, and related parties.
In a complaint filed February 25, 2015 in federal court in Boston that was unsealed yesterday, the SEC alleges that the Portuguese companies - operating under the name Wings Network - claimed to run a multi-level marketing company that offered digital and mobile solutions to customers, including apps and cloud storage. However, Wings Network's revenues actually came solely from selling memberships to investors, not from the sale of any products. The company relied upon the recruitment of new members, and commissions were paid to earlier investors with money received from later investors. The scheme raised at least $23.5 million from thousands of investors, including many in Brazilian and Dominican immigrant communities in Massachusetts.
According to the SEC's complaint, the scheme was orchestrated by Wings Network officers Sergio Henrique Tanaka of São Paulo, Brazil and Davie, Fla., Carlos Luis da Silveira Barbosa of Lisbon, Portugal, and Claudio de Oliveira Pereira Campos of Lisbon, Portugal. After establishing a network of lead promoters, recruitment of new members surged through the use of social media such as Facebook and YouTube. The promoters used Facebook to publicize "business meetings" that took place at hotels and other locations in Connecticut, California, Florida, Massachusetts, Pennsylvania, Texas, Georgia, and Utah. The promoters also set up storefronts or "training centers" to lure investors into attending Wings Network presentations. For example, one promoter used a storefront in downtown Philadelphia to make presentations to prospective investors, and another promoter rented office space in Pompano Beach, Fla., and spread the word in the local Latino community to attract prospective investors to come in and hear presentations.
Several of the scheme's promoters charged in the SEC's complaint live in Marlborough, Mass., while others reside in Clinton, Mass., Sandy, Utah, Duluth, Ga., and Waco, Texas.
The SEC's complaint alleges that the Portuguese entities and principals Tanaka, Barbosa and Campos violated antifraud provisions Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10-b-5 thereunder, and registration provisions Section 5(a) and 5(c) of the Securities Act, and that the promoter defendants violated Section 5(a) and 5(c) of the Securities Act.
The SEC's investigation was conducted by Scott R. Stanley, Dawn Ethingy, John McCann, Deena Bernstein, and Amy Gwiazda of the SEC's Boston Regional Office. The SEC's litigation will be led by Ms. Bernstein.
The SEC appreciates the assistance of the Massachusetts Securities Division of the Massachusetts Secretary of the Commonwealth's office, which previously filed its own action against Wings Network and other parties, as well as the Comissão do Mercado de Valores Mobiliários of Portugal and the Procuradoria-Geral da República of Portugal.
Litigation Release No. 23209 / February 27, 2015
Securities and Exchange Commission v. Tropikgadget FZE, et al., Civil Action No. 1:15 cv 10543-IT (United States District Court for the District of Massachusetts)
SEC Charges Operators of International Pyramid Scheme Targeting Latino Communities
The Securities and Exchange Commission today announced that it filed charges against three company officers and 12 promoters behind an international pyramid scheme targeting Latino communities in the U.S. The agency also obtained a court order to freeze the assets of the company officers, promoters, and related parties.
In a complaint filed February 25, 2015 in federal court in Boston that was unsealed yesterday, the SEC alleges that the Portuguese companies - operating under the name Wings Network - claimed to run a multi-level marketing company that offered digital and mobile solutions to customers, including apps and cloud storage. However, Wings Network's revenues actually came solely from selling memberships to investors, not from the sale of any products. The company relied upon the recruitment of new members, and commissions were paid to earlier investors with money received from later investors. The scheme raised at least $23.5 million from thousands of investors, including many in Brazilian and Dominican immigrant communities in Massachusetts.
According to the SEC's complaint, the scheme was orchestrated by Wings Network officers Sergio Henrique Tanaka of São Paulo, Brazil and Davie, Fla., Carlos Luis da Silveira Barbosa of Lisbon, Portugal, and Claudio de Oliveira Pereira Campos of Lisbon, Portugal. After establishing a network of lead promoters, recruitment of new members surged through the use of social media such as Facebook and YouTube. The promoters used Facebook to publicize "business meetings" that took place at hotels and other locations in Connecticut, California, Florida, Massachusetts, Pennsylvania, Texas, Georgia, and Utah. The promoters also set up storefronts or "training centers" to lure investors into attending Wings Network presentations. For example, one promoter used a storefront in downtown Philadelphia to make presentations to prospective investors, and another promoter rented office space in Pompano Beach, Fla., and spread the word in the local Latino community to attract prospective investors to come in and hear presentations.
Several of the scheme's promoters charged in the SEC's complaint live in Marlborough, Mass., while others reside in Clinton, Mass., Sandy, Utah, Duluth, Ga., and Waco, Texas.
The SEC's complaint alleges that the Portuguese entities and principals Tanaka, Barbosa and Campos violated antifraud provisions Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10-b-5 thereunder, and registration provisions Section 5(a) and 5(c) of the Securities Act, and that the promoter defendants violated Section 5(a) and 5(c) of the Securities Act.
The SEC's investigation was conducted by Scott R. Stanley, Dawn Ethingy, John McCann, Deena Bernstein, and Amy Gwiazda of the SEC's Boston Regional Office. The SEC's litigation will be led by Ms. Bernstein.
The SEC appreciates the assistance of the Massachusetts Securities Division of the Massachusetts Secretary of the Commonwealth's office, which previously filed its own action against Wings Network and other parties, as well as the Comissão do Mercado de Valores Mobiliários of Portugal and the Procuradoria-Geral da República of Portugal.