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Viceroy
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May 12, 2013, 10:33:47 PM |
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OP of this thread has been updated with the following attachments:
1: Copied from Page 3 of this thread on 2013-05-12, in the interest of visibility. Exhibit D Sworn affidavit of IRS Special Agent Timothy Nugent:
Victim Statements
8. Clarence Enge
Amy Von Freyman stated that her grandfather, Clarence Enge, who is in his 80s, received letters via the United States mail from companies soliciting his participation in foreign lotteries.
Since 1997, Enge had sent $600-$1200/month to such companies, including to OLD AMSTERDAM and SHAMROCK AGENCY. In order to continue his participation he refinanced his home.
9. Paul Greven
A letter addressed to Greven stating it is an "Official Announcement of Winning Tickets in the 2003 Irish Sweepstake Triple Crown." The letterhead indicated it was from "The Shamrock Agency" and claimed it had been a "Certified Service since 1959." The letter stated: "Millionaires by the score! We have just finished round one of the verification process of the Triple Crown 118 major Jackpot winning tickets. Enclosed is a list of the winning numbers. Congratulations to the jackpot winners.. . ." The letter informed Greven to be patient for "round 2 of the winning verification process" but encouraged him not to "... delay in getting the 'Jump' on next year's Triple Crown millions (order form enclosed)." It also stated that the Triple Crown was unlike any other lottery because players could be sure there is no ". . . 'Inside corruption' or 'secret trick' . . . ." The letter was signed by "Sir William Winfield, Northup Manor, Shannon Ireland."
10. Paul Wood
When interviewed, Paul Wood stated that he had been involved with WORLD EXPERT for about five years. He had played lotteries with them and obtained a form of life insurance from WORLD EXPERT. Woods stated the insurance from WORLD EXPERT FUND was known as the "Gold Reserve Fund." For this he sent $29 per month to the Netherlands to pay for retirement/life insurance. Statements he had received showed that he had approximately $4,000 in his account.
13. In furtherance of the scheme to defraud, the following mailings, among many others, were sent by the companies run by SONNY VLEISIDES and his co-schemers, to victims of the scheme:
Proceeds to describe the fraudulent letters; [ a, b, c, d, e, f, g, h, i, j, k ]
The letters are clearly fraudulent, like some snail mail 419 scam, that no non-senile person should fall for. The exhibits are dating from the years 2002 to 2006.
18. When interviewed, PJ and Michael Swink stated the following: a. PJ Swink stated that her company, Western Internet, worked for Sonny VLEISIDES. The work PJ Swink did for VLEISIDES included printing as well as stuffing and mailing envelopes. VLEISIDES gave her instructions regarding the preparing, printing, and mailing of lottery solicitations. Western Internet had done this work for VLEISIDES, or his father, "Rex Rogers," since 1993. Since 2000, all of the work PJ Swink had done for VLEiSIDES and "Rex Rogers" had been related to the lottery. b. PJ Swink was unaware of the exact name of VLEISIDES' company, because it has had multiple names over the years. Based on conversations and other communications with VLEISIDES over the years, she believed "The Shamrock Agency" and "World Expert" were companies related to VLEISIDES. She believed VLEISIDES also used the name "Atlas Informaticos." Michael Swink stated that VLEISIDES told him that VLEISIDES was a licensed broker for these companies in Europe. PJ Swink and Michael Swink have met VLEISIDES in person. c. PJ Swink provided a business card with contact information for VLEISIDES. The information on the card said "SONNY VLEISIDES." The address was in Costa Rica. The email address was sonnv[-BAD-OCR-]city.com . However, PJ Swink later identified a further email address for VLEISIDES of sonnv@atlasinformaticos.com.
20. Henry Walther, who has pled guilty to one count of mail fraud and one count of money laundering and is cooperating with the United States government, stated the following when interviewed:
a. Henry Walther explained that the main people involved in the lottery were Houston, VLEISIDES, and Dennis Emmett. The business started with Houston and Emmett. Houston was the principal behind it. Cloud is Houston's brother or halfbrother, and lives in Amsterdam. About five years ago, Houston and Dennis Emmett got into an argument and split their businesses. Then, Houston and VLEISIDES got into an argument, and VLEISIDES took over the business.
b. For the last five to ten years, Henry Walther has been working as an accountant/banker and attorney for VLEISIDES and Houston, who he also knows as "Rex Vieisides" and "Rex Rogers." Henry Walther explained that VLEISIDES and Houston resided in Costa Rica. Henry Walther explained that Houston and VLEISIDES operated a mail solicitation business involving foreign lotteries and horse racing. Two of the companies they use were The Shamrock Agency and World Expert Fund. Houston and VLEISIDES instructed Henry Walther to open and maintain bank accounts in the United States because the banking system was too slow in Costa Rica.
21. Glenda Emmet, when interviewed, stated the following:
a. Emmett was the owner of Astro Computer, which operated a mail list business. This included maintaining lists and preparing the letters to be mailed out by a mail house.
b. For five or six years, her only customer was Global Search Network, which was run by her ex-husband, Dennis Emmett. Dennis Emmett is now in prison in Costa Rica for murder, but was still issuing instructions to her from prison. Before she worked for Global Search Network, she worked for World Expert Fund. That company was owned by VLEISIDES. Her ex-husband, Dennis Emmett, worked with World Expert Fund for some time in Costa Rica.
Search Warrant Evidence26. On July 6, 2006, several search warrants were executed at addresses in California, Georgia, and Missouri. The searches yielded the following evidence, as well as other information: a. A computer belonging to co-schemer Scott Walther contained documents and emails involving the scheme. The emails were between VLEISIDES and co-schemer Henry Walther and Scott Walther. Some of the emails were addressed to "Sonny" with an email of Sonny@atlasinformaticos.com (identified as VLEISIDES' email address by other participants in the scheme, while others were addressed to "Sonny Vleisides" with the same email address. Specific examples of documents and emails are as follows: i. A word processing document stating: This is a fraud that has been going on for many years. Millions of dollars have been stolen from people that cannot afford it. The mailings originate from Little Rock, AR-cancelled at 722. The mail then goes to . . . Amsterdam in the Netherlands. From there it is sent by DHL to . . . Costa Rica. Atlas Informaticos to be held for pick up at the DHL office... The master mind behind this scam is James Ray Houston apx. 60 years old. He gained fame in 1974 when he ran for Governor in Nevada. His accomplice is Sonny Vleisides apx. 30 years old. Both from Kansas City originally .... However, these guys are very slick and try very hard not put their names on anything. A Russian by the name of Mikhstl Larguine has been used as Houston's front man for most of the 10 years plus that Houston has been in Costa Rica. Houston has used many aliases over the years. Rex Rogers was the longest lasting. ii. An email dated November 1, 2002, from Henry Walther to Sonny at an email address of sonny@atlasinformaticos.com with a "cc" to Scott Walther, shows a thread of discussion regarding establishing a new bank account and company offshore since accounts were being closed in the United States. At one point Henry Walther asks VLEISIDES "What goals do you want to accomplish by getting the accounts offshore. I think it is to keep the account from being shut down by the US banking system. Any other goals?" VLEISIDES responds saying "The only objective is to have an account with less vulnerability from any US authority. Also depending on how the account works for the Mexican bank-it may be more difficult for the bank to deal with canceling an account that's co-mingled with all their other accounts in the US-because it's all really just one account to them." In an earlier thread, Henry Walther had written: "Dear Sonny: Today Scott set up a new EU American Payment Services account at Union Bank. I will get the information to you tomorrow, but since PJ [Swink, a participant in the scheme, as described above] has Scott's facsimile signature and also the Union Bank has been handling the North American account, it should be easy to set up once she has the account number." c. At an address in Georgia that was under the control of co-schemer William Cloud through a woman named Mary McRae, relevant evidence including the following was found: i. Thousands of credit card "Mail Order Forms" that listed names and credit card numbers. On the bottom of many of the forms was "Euro American." ii. Western Union receipts for money wired by McRae, in Georgia, USA, to "Sonny Velisides" in Costa Rica. The dates and amounts were as follows: August 11, 2004 - $2200, August 5, 2004 - $1200, July 9, 2004 - $3300, July 2, 2004 - $2000, and June 24, 2004 - $2000.
27. SONNY VLEISIDES is a United States citizen born on February 21, 1971, in Las Vegas, Nevada. He is a white male, who is 1.8 meters tali and was last known to weigh approximately 70 kilograms. He has black hair and hazel eyes. He was issued a United States passport, number 701797046, on May 23, 1989, in New Orleans, Louisiana. A photograph of VLEISIDES is attached as Exhibit 1 to my affidavit.
28. Henry Walther has identified the photograph attached as Exhibit 1 to this affidavit as being a photograph of the same SONNY VLEISIDES who ran the fraudulent lottery scheme discussed in this affidavit.
Timothy Nugent, Special Agent
Internal Revenue Service -
Criminal Investigations Division
Subscribed to and sworn before me this 9 day of May, 2007
HONORABLE SUZANNE H. SEGAL
United States Magistrate Judge
The photo attached to the extradition document:
2: "Hi, my name is Sonny Vleisides" https://bt.irlbtc.com/view/110868.msg1207670#msg1207670My role was mostly as a software & license supplier, However, I became more involved over time... enough so that my name was included in the indictment. Everything was fine until one day I was picked up while traveling in Florence. It was a sealed indictment, so I had no idea what was going on. I spent the next two years fighting extradition. The case went all the way to the Italian Supreme Court. In the end, I was extradited after the US was made to drop half of the charges. That's all they could do for me, but they really helped. I'll always be thankful to Italy for that. In the US, I was preparing for my case. It had been a long slog. My finances had dwindled to zero, leaving me with a free court appointed lawyer from the legal pool. He showed me that the US federal system had a 97% conviction rate... higher than the Russian courts under Stalin. He calmly informed me that I was facing full life without possibility of parole as a first time white collar defendant. Yes.. really. This is no joke. It's called the federal sentencing guidelines implemented in 1984. It's the point system that determines the sentence, not the judge. My points totaled 43. Life in prison. Look it up and prepare to be amazed. After two and a half years preparing, we neared trial. The prosecutor calls for a meeting and offers me a deal. I can go home if I accept a single count of mail fraud and skip the trial. They would drop 23 charges and leave me with a simple postal violation (lesser count of mail fraud). I thought about it and it didn't take long for me to agree to get the shackles off. I signed and went home to my Mother's house in Kansas City. I sat there looking at the wall for a long time. I didn't feel like leaving the house much. It was difficult to get over the emotional loss. My life was ruined. Mom got me an account on match.com and encouraged me to date. I met a wonderful girl and we had a little boy. We named him Indy. My life continued and I started to look for a new project to begin again. A fresh start. I'm on a good track now, trying to put the past behind me. Somewhere along the way, I got involved with the BFL project. (No one from the indictment is involved in this company, in fact two of them have since died including my father.) With regards to BFL, I'm proud to have played a role in it's start up and focus on the current products, but I am not a majority owner. The company has 22 employees who are all dedicated and focused on delivering a truly amazing best in class product. https://bt.irlbtc.com/view/110868.msg1207670#msg1207670 NB: Notice that In the above, Sonny Vleisides confirms that he is both a founder and an owner of Butterfly Labs.
3: When the news broke, this community compiled a list of questions for Sonny Vleisides. Mr. Vleisides (a) promised to answer those questions, (b) didn't, and (c) locked the thread. Looks like Sonny locked his thread, siting it's the competition's fault (in no uncertain terms). To be fair, he did state that a third post is forthcoming. I'll assume it'll be long, addressing most every question and concern to date.
Thank you all for your comments... both positive and negative. I see many of our competitors in this thread pushing their agenda which isn't surprising but still, there are some very reasonable posts with deserving questions. Overall, I appreciate the public's reason for concern and I will return and provide answers.
jjiimm_64: https://bt.irlbtc.com/view/110868.msg1210400#msg1210400
4:Regarding the peculiar secrecy, "no last names" policy and other unusual tactics: (Hearsay, but still...) Worth quoting here: Josh told me that the owner of Butterflylabs has a buissness history of keeping stuff secret and silent.
And he certain doesnt have any experience with posting on a forum or maintaining websites.
Thats why (untill now) stuff has seem so shady and all I guess.
5: Restitution not ordered because... Just lining up more pieces: http://www.scribd.com/doc/106409576/Indictment-USA-v-Vleisides-Houston-Emmett-Cloud-WaltherThis one is interesting: RESTITUTION:Pursuant to 18 U.S.C. § 3663A(c)(3), restitution is not ordered because (1) the number of identifiable victims is so large as to make restitution impracticable [3663A(c)(3)(A)]; and (2) determining complex issues of fact related to the cause or amount of the victim's losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process [3663A(c)(3)(B)].
http://www.scribd.com/doc/106409553/Judgment-probation-orderAlso: Through companies located in Costa Rica, The Netherlands and other places, the defendants allegedly mailed more than 1 million solicitations that fraudulently offered people an increased chance of winning foreign and domestic lotteries such as The Australian Lottery, The International Irish Sweepstakes, and The NY Super 7. The solicitations claimed that people could purchase positions in lotteries that would be grouped together, or pooled, to buy larger blocks of tickets in a given lottery or horse race. The solicitations falsely indicated that participants in the pool had a nearly guaranteed chance to win millions of dollars and that previous participants in the pool had already won millions of dollars. According to the indictment, the solicitations misrepresented that the companies were backed by governmental or legitimate lottery entities. As part of the scheme, the solicitations claimed that winnings were invested into trust or pension accounts that would pay monthly pension checks until the end of the victims life, and then would pay a survivors benefit as if the money were a life insurance policy. Victims of the scheme were directed to send their money to mail drops in Ireland, The Netherlands and other locations, where participants in the scheme returned the money to the United States. From domestic bank accounts controlled by Henry Walther and others, some of the money was sent back to victims who were told that they were receiving winnings, even though the winnings were far less than the amount of money sent in by victims. The rest of the money was either spent to further the scheme or to enrich the defendants. Investigators estimate that victims lost approximately $20 million during the scheme, which ran for more than 15 years until it was shut down by federal agents in July 2006.
This investigation brought an end to an elaborate scheme in which the perpetrators relied on the public's trust in the U.S. Mail to victimize some of our most vulnerable citizens, our seniors, said Acting Inspector in Charge Robert Malaby. Whether it's a pension fraud scheme or an illegal foreign lottery, when the U.S. Mail is used to commit fraud, Postal Inspectors are called upon to investigate and bring the perpetrators to justice. The U.S. Postal Inspection Service is committed to keeping our nation's mail system free from criminal misuse."
Debra D. King, Special Agent in Charge of the Internal Revenue Services Criminal Investigation Division in Los Angeles, stated: The fraud committed by these individuals against innocent investors in the operation of their foreign lottery and pension schemes is a crime that IRS-Criminal Investigation takes seriously. This indictment, and the arrests of the perpetrators of this fraud, is indicative of our resolve to bring those who prey upon innocent investors, for their own financial gain, to justice.
The 23 counts in the indictment carry a maximum statutory penalty of 460 years in federal prison and fines of up to $8.75 million.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court. http://www.justice.gov/usao/cac/Pressroom/pr2007/065.html
6: The Murder of Benjamin Daniel Wood: Guys, I think we should stop asking questions. It could be.... unhealthy. To our health.
...
It follows logically that his origins are in Calabria, Italy.
Combining this information and the fact that he was running a 1930s mobster style numbers racket it follows that this is a 'Ndrangheta operation.
Does not follow at all. Still there's this: I feel quite uneasy about posting the following pieces, but it's all publicly available, verifiable information, and perhaps of some interest. Dennis Emmet, who worked for Vleisides murdered Benjamin Daniel Wood, who worked for Emmet. One certainly shouldn't draw any conclusions, or make any assumptions, or implications from the following, but it is what it is... 21. Glenda Emmet, when interviewed, stated the following:
a. Emmett was the owner of Astro Computer, which operated a mail list business. This included maintaining lists and preparing the letters to be mailed out by a mail house.
b. For five or six years, her only customer was Global Search Network, which was run by her ex-husband, Dennis Emmett. Dennis Emmett is now in prison in Costa Rica for murder, but was still issuing instructions to her from prison. Before she worked for Global Search Network, she worked for World Expert Fund. That company was owned by VLEISIDES. Her ex-husband, Dennis Emmett, worked with World Expert Fund for some time in Costa Rica.
The murder doesn't seem obviously "work related", judging by the media reports. I also can't easily tell whether Emmet worked for Vleisides at the time of the killing. Per Costa Rican media: U.S. Citizen Linked to MurderA U.S. citizen identified only by his family name, Emmett, 67, is held suspect of the murder of his fellow countryman , 33, whose body was found with a bullet in an eye near Turrucares, Alajuela. It was Wood's Costa Rican girlfriend who alerted the police about the possibility of Emmett's involvement in the murder. Wood used to work for Emmett in a house and a business property of the elder man. http://insidecostarica.com/dailynews/2005/may/01/nac04.htm U.S. citizen's body was dumped Guards heard dispute and then a shot at quinta By the A.M. Costa Rica staff A loud argument about 10 p.m. Thursday was cut short by a gunshot, and investigators think that is when Benjamin Daniel Wood, a 33-year-old U.S. citizen died. The scene was at the quinta of the two people now being held in the death, according to investigators. The argument and the shot were heard by guards outside. The full extent of the crime did not become apparent until about 9 a.m. Friday when passers-by discovered the body of a man near a lookout point in the community of San Miguel de Turrúcares. http://www.amcostarica.com/041905.htm This last week was not a 'good news' week for Americans in Costa Rica.An American identified only by his family name, Emmett, 67, was held suspect of the murder of his 33 year old fellow countryman Benjamin Daniel Wood, 33, whose body was found with a bullet in his eye near Turrucares, Alajuela. It was Wood's Costa Rican girlfriend who alerted the police about the possibility of Emmett's involvement in the murder. According to investigators Wood used to work for Emmett in a house and a business property of the older man. The murder of Wood, supposedly occurred after Emmet aged 67 had an explosive argument with his 24 year old South American girlfriend. http://www.welovecostarica.com/public/210.cfm
Also: Lottery scam indictment dismissed against California manBy the A.M. Costa Rica staff Prosecutors have dismissed an indictment against Scott Henry Walther, who was indicted in 2007 stemming from his association with a Costa Rican-based lottery scam, according to documents and an assistant U.S. attorney in the Central District of California. ... According to Ms. Lindsay, Walther's case was delayed when his lawyer fell ill and died. With no representative to meet with, prosecutors were unsure of Walther's role, if any, in the scheme. When the lawyer died, U.S. officials were prevented from getting Walther's story until after the indictment Ms. Lindsay said, As a prosecutor you'd like to hear both sides based on all the evidence you can possibly get, and with Scott Walther we felt ambivalent because the evidence against him looked really, really bad at first.Walther, who brought the dismissal to the attention of reporters, was one of six men indicted in the fraud case. Henry Walther, Scott Walther's father, pleaded guilty to mail fraud and international money laundering March 6, 2007. Henry Walther currently is serving time. Charges against Dennis Emmett, William Cloud, James Ray Houston and Sonny Vleisides remain. Emmett is being extradited to the United States from Costa Rica, said Ms. Lindsay, and Vleisides is being extradicted from Italy. Cloud is also being extradited from Amsterdam, and Houston has not been apprehended, according to Ms. Lindsay. http://amcostarica.com/061008.htm Emmet was perhaps squeezed out before Sonny took over the family business, after an argument with his father: Henry Walther explained that the main people involved in the lottery were Houston, VLEISIDES, and Dennis Emmett.
The business started with Houston and Emmett. Houston was the principal behind it. Cloud is Houston's brother or halfbrother, and lives in Amsterdam.
About five years ago, Houston and Dennis Emmett got into an argument and split their businesses. Then, Houston and VLEISIDES got into an argument, and VLEISIDES took over the business.
Still, Dennis Emmet continued to work for Sonny according to Emmet's wife, per the first testimony above. Added... 7: Violation of FTC regulations... Not giving the opportunity for a refund to a customer when shipment has been delayed is against some FTC rule:
Quoted for the benefit of the lazy: Selling on the Internet: Prompt Delivery Rules
[...]
By law, you must have a reasonable basis for stating that a product can be shipped within a certain time. If your advertising doesn't clearly and prominently state the shipment period, you must have a reasonable basis for believing that you can ship within 30 days.
If you can't ship within the promised time (or within 30 days if you made no promise), you must notify the customer of the delay, provide a revised shipment date and explain his right to cancel and get a full and prompt refund.
For definite delays of up to 30 days, you may treat the customer's silence as agreeing to the delay. But for longer or indefinite delays - and second and subsequent delays - you must get the customer's written, electronic or verbal consent to the delay. If the customer doesn't give you his okay, you must promptly refund all the money the customer paid you without being asked by the customer.
Finally, you have the right to cancel orders that you can't fill in a timely manner, but you must promptly notify the customer of your decision and make a prompt refund.
[...] Due to BFL's violation of this rule, most of the thousands of customer-victims have already lost more than 90% of the bitcoin denominated value of their purchase, if BFL chooses to refunds their purchase in dollars. (Which, according to the law, they can do, at any time.) If BFL chose to keep any portion of the pre-order funds in BTC they could, presumably legally, pocket the difference. (Some tens of thousands to hundreds of thousands of Bitcoins.) An official statement from the payment processor on how pre-order funds were allocated would be desirable. ( Your word for it doesn't cut it, Josh.) |
