CLASSIC PONZI MODEL FOR UNREGISTERED THIEVERY
Monday 22 January 2007 00:46
EVIL INSPIRATION FOR RUTHLESS ‘OMEGA OPS’ SCAMMING OF AMERICANS
By Christopher Story FRSA, Editor and Publisher, International Currency Review, World Reports Limited, London and New York: www.worldreports.org. Press CLICK HERE and the ARCHIVE Button on the www.worldreports.org Home Page for Wanta Crisis reports since April 2006.
EXPOSING THE CORRUPT NESTS OF SCORPIONS
In direct response to the reprobate theft, misdirection, diversion, exploitation and generally illegal manipulation of the $4.5 trillion taxable private Wanta Settlement funds formally and agreed back in May 2006 [see www.worldreports.org ARCHIVE for details] by relevant officials at the highest levels of the US Federal Government and at the Federal Reserve, we have been obliged to expose more and more layers of the institutionalised revolutionary financial corruption masterminded by evil elements of the intelligence community in pursuit of a failing ‘Black’ intelligence agenda which has nothing to do with the interests of the American people, let alone those of the Rest of the World.
As this official gangland intransigence has continued, and the criminal operatives have become ever more scared, defiant, arrogant, reckless and careless, it has been possible to identify with confidence certain dimensions of the nexus of scams being perpetrated against the American population by components of their own Government.
As this is an international corruption crisis, and affects the whole world, rather than simply a US domestic affair, we are entitled to do all we can to rip away the layers of deceit, the lies and the evidence of financial scamming authorised and perpetrated by corrupt US intelligence officials, and to name names where necessary in order to bring these scandals into the open. This corruption, which has severely compromised the international financial system, needs to be confronted head-on NOW, and decapitated.
The purge has started, but it may take many years to complete.
The fact that the ‘mainstream media’ has to a large extent irresponsibly stuck its collective head in the sand, has been irrelevant for months. Our last posting was reproduced at least 20 million times within 24 hours, and our website hit rate has gone through the roof. As one correspondent has noted [see TREASONGATE UPDATE: OUTPOURING OF SUPPORT, 17th January 2007], isn’t it interesting how those who protest most loudly at the deceitful silence of the ‘mainstream media’, seek the ‘mainstream media’s’ confirmation of what we have published?
And isn’t it amazing that some critics seem unable to comprehend the reality that sensitive information such as we have published cannot possibly be posted unless it is true? Surely, a higher Degree in Logic and Philosophy is not necessary in order for the stark simplicity of this fact to be understood, even by those who remain confused?
US INTELLIGENCE SCAMS AGAINST AMERICANS
Corrupt ‘Black’ elements of US intelligence, penetrated by fundamentally malevolent foreign powers and operating without constraint in accordance with an international underworld hegemony agenda, have been ripping off American families, Black Churches, indigenous peoples and other US constituencies for three decades, to our certain knowledge – and probably for longer. One of the models they have been using, and continue to deploy, is the ‘Ponzi Scheme’ model, alluded to in a recent posting on this site.
This model presupposes as follows:
1. That the funds contributed by victims are siphoned untaxed, offshore (as in the case of OMEGA OPS scams run by perverted criminal cadres within US intelligence).
2. That the victims may be wittingly or unwittingly compromised so that they find themselves in a quandary when they discover that they have been scammed.
3. That the victims can be manipulated by constantly varying promises of settlement which are never met, and which are routinely superseded by fresh promises that are likewise never fulfilled – with this pattern being repeated ad infinitum, amid reports of a few ‘lucky’ participants actually receiving payment. This is done in order to sustain the ongoing deception. Associates of George Bush Sr. (Scherff) have elevated such promises and undertakings into a new ‘Black’ art form.
4. Given the above, the victims succumb to a deep slumber, like Rip van Winkel, constantly fretting in their dreams that they have been deprived of their funds but never able to pin anyone down with respect to settlement, and vaguely aware that something or other is not quite right, without really knowing what – or how the matter can ever be resolved.
5. As a consequence, a large constituency of these US ‘broken hearted’, who have been scammed, are seething with despair, anger and resentment, and are understandably frustrated by their grim impotence in the face of this scandalous state of affairs. They feel raped and helpless. And they prefer the comfort reminiscent of Rip Van Winkel, who remained in a coma for years, to the harshness of having to come to terms with a real world in which components of their national Government have stolen their own, or their trust’s, private funds with impunity (so far).
6. ‘Messengers’ who wake them up from their deep slumber may be ‘shot’, since sleep is a much more pleasant experience than having to confront the reality that one has been ripped off by ruthlessly cynical Luciferian operatives licensed by one’s own Government.
THE U.S. REGULATIONS THAT SHOULD APPLY
In the United States there are very strict regulations governing the marketing of securities. Registration is a sine qua non and, without exception, the Ponzi-style securities scams we have in mind, are not registered. The fact that they are often operated via pools of funds handled by banks is intended to provide a veneer of false legitimacy that masks the underlying reality that these schemes are ALL illegal. Therefore, when victims seek official assistance, they may feel vulnerable to ‘Blowback’ in the form of inquiries into their own financial reporting and other issues. And of course, the ‘Black’ official scamsters exploit this vulnerability to their own Luciferian advantage.
Prior to ‘Black Tuesday’ (29th October 1929), the US Federal Government was not involved in licensing the issuance or sale of stocks, bonds, or any other form of security, since this was considered to be the domain of State regulators under the “Blue Sky” laws.
This term refers to the plight facing any gullible investor who discovers that the securities he has purchased represent nothing of value other than the blue sky above. These laws require that any security that is offered to investors must be certified by a State agency, which must be supplied with the necessary comprehensive financial information.
In 1933, Congress passed the Securities Act of that year, incorporating the ‘Truth in Securities’ law which superseded the State “Blue Sky” laws with respect to the registration, issuance and the prospectus identifying the security being offered to the public for purchase.
The primary focus of this legislation was its registration procedures, and the prohibition of false representation and fraudulent sales practices. In 1934, the Securities Exchange Act established the Securities and Exchange Commission (SEC) to oversee both the registration process and the antifraud provisions of the 1933 Securities Act.
The Maloney Act of 1938, amending the Securities Act of 1933, created the National Association of Securities Dealers (NASD). This legislation promoted the organization of member securities dealers under the umbrella of a self-regulating organization (SRO), supervised by the SEC to ensure the application of a code of ethics and its enforcement throughout the United States.
Members of the NASD are known as Broker/Dealers since they represent both clients who buy and/or sell securities, as well as representing themselves, as principals, when underwriting and/or selling a stock or bond issue directly to the public. The NASD is the only firm operating under the Maloney Act, and its responsibilities include the following:
• Nation-wide field inspections of member firms.
• Centralised computerized surveillance of the trading of NASD Automated Quotations posted by its sister corporation NASDAQ.
• Enforcement of Securities and Exchange Commission rules and regulations, as well as the NASD’s own rules applicable to its members.
• Review of underwriting arrangements for securities offered to the public.
• Coordination of, and cooperation with, the Securities and Exchange Commission, other Federal agencies, and the States.
• Performance and monitoring of qualification examinations required to be passed by personnel employed by members. The Registered Principal of a member firm must pass the Series 24 (General Securities Principal) and the Series 7 (General Securities Representative) Examinations conducted by the NASD, and must pass the written procedures and oral interview, before assuming this position within the member firm.
The member firm’s Registered Financial Operations Officer (see below) is equally responsible with the Registered Principal for the firm’s financial reports to the SEC and NASD, for the accurate record-keeping of the firm’s Net Capital Account, for all securities trades and customer accounts and correspondence, and for advertising and sales literature issued by the firm. The Registered Financial Operations Officer must pass the Series 27 (Financial and Operations Principal) and the Series 7 (General Securities Representative) Examinations conducted by the NASD, and must also pass written procedures and oral interview prior to assuming this position within the firm.
A third official, the Registered Representative, who is licensed and authorised to purchase and/or to sell stocks, bonds, options, limited partnerships, tax sheltered mutual funds, and variable annuities on behalf of customers or the firm itself, must have passed the Series 7 (General Securities Representative) Examination, and must be registered with the firm as an authorised Representative. All licensed Representatives must have passed the Series 63 (Uniform State Law) Anti-Fraud Examination, and be registered with each State where the firm will be operating (1).
(Since 1966, the United Kingdom, Canada and Japan have adopted the same regulations with respect to licensing, and the licenses issued in these countries correspond with those of the Securities and Exchange Commission and the NASD).
UNREGISTERED FRAUDULENT SECURITIES SCAMS
Securities and ‘lending programs’ operating along Ponzi Scheme lines promoted clandestinely inter alia by corrupt elements of the intelligence community (including OMEGA OPS scams) comply with none of these stringent regulations and requirements and are therefore, by definition, all illegal in the United States.
The question therefore arises: why are these illegal schemes so widespread, having given rise to a huge constituency of the American ‘broken hearted’, who have been scammed in one way or another but who cling to the hope, like Rip van Winkel, that they, their family trusts or their restless associations of ‘the scammed’, will finally be paid out one sunny day far out into the future?
The generic answer to this question is that the criminalised fraudster elite, led by the crooks controlling and inside the intelligence community, have installed their own corrupt operatives within and in control of the enforcement institutions, including the SEC.
As a consequence, blind official eyes have been turned to what has been going on, the securities regulations have not been enforced with respect to such illegal Ponzi frauds, and the old system whereby anyone involved with trading securities was blackballed for life if caught engaged in irregular activities, has been moribund since the 1970s. When an uncorrupt SEC Commissioner tried, quite recently, to enforce the regulations, he was removed from his post on some typically trumped-up pretext or other. In other words, the wolves are in charge of the chicken coops.
So the enforcers are, as matters stand, co-conspirators in the despicable, proliferating intelligence community-driven Ponzi Game operations that have devastated an unknown number of American families – with the proceeds channeled through corrupt participating banks into offshore accounts.
Apparently the volume of illegally stashed ‘funny money’ held in offshore accounts since all forms of exploitation of the ‘fiat money’ system were taken over by the State-Controlled Mafia – or, even more accurately, the Intel-Mob-Controlled State – runs into the hundreds of trillions of dollars: and long after the Wanta Settlement, the consequences of this criminality will continue to mess up the international financial system, as we shall be explaining.
For the moment, grieved by the plight of the victims, the Editor has researched our files for an article we published some years ago entitled ‘How Charles Ponzi pulled it off: Making a fine art out of a pyramid fraud’. It appeared in International Currency Review, Volume 27, Number 3, December 2001, and represents a condensed summary of the original, classic Ponzi Pyramid Scheme, plus a potted history of its cynical immigrant Italian originator, Charles Ponzi:
THE ORIGINAL PONZI SCHEME EXPLAINED
Charles Ponzi, an immigrant from Italy to Boston, MA, made millions of dollars for a brief period, by exploiting his shrewd observation that while national currencies were fluctuating wildly in 1920, just after the end of the First World War, the Universal Postal Union (UPU) issued coupons which were always worth a given amount of postage stamps.
In those days, European refugees were flocking to the United States, Canada and Brazil; and often, their only contact with their families and friends back home was an occasional letter, enclosing a few dollars. The Universal Postal Union arranged to move the millions of letters, business documents and messages across national borders by issuing Postal Reply Coupons. You bought a Postal Reply Coupon in your country of residence, and enclosed it with your letter. Your mother, once she had received the letter, exchanged the Postal Reply Coupon for stamps at her local post office.
Charles Ponzi told friends in Boston: ‘Everybody’s heard of the Postal Union. They print coupons like these I’m holding here: Postal Reply Coupons. You can send a letter home, or anywhere in the world, with these coupons. And you can trade this coupon for a stamp in any country. I send my mother coupons with every letter that I write home’.
‘Now, in cooperation with certain large businesses in our city, I am making a fortune on the Postal Reply Coupon. Stocks are too risky. Forget it. And bonds, what are they paying? Maybe six percent? Savings accounts at Tremont Trust, they’ll give you four and a half cents on the dollar. Give them $100 and they’ll give you back $104.50. I can beat that into the ground’, Ponzi insisted, beating his cane against the floor. ‘My investors get 50 cents on the dollar. Place a hundred dollars with my Securities Exchange Company, and you take out $150. Put that $150 in, you’ll get back $225. That’s right, in six months, you can more than double your money’.
How could he pay 50%, when banks couldn’t even manage 5%? ‘Exchange rates’, Mr Ponzi explained. ‘Every morning I go down and check to see how the lira is doing against the dollar. Usually you get five lire for a dollar. This morning I checked, and with the war just ended, it takes 20 lire to the dollar’. While currency rates were bouncing around like popcorn, Mr Ponzi explained, the Postal Reply Coupon always bought one stamp. Here’s what I do’.
‘I send my cousin in Parma, Italy, $1.0. He exchanges the dollar for lire. With the 20 lire (2,000 centesimi), he can buy 66 Postal Reply Coupons (worth 30 centesimi each, the cost of a letter-sized stamp in Italy). Back in the United States, each of the coupons buys one stamp, face value five cents. I redeem all 66 coupons for $3.30 worth of stamps. The magic happens in the exchange rate. In America, my dollar buys 20 Postal Coupons. But if I exchange the dollar for lire, and buy the coupons in Italy, then return and buy the stamps in America, I get $3.30 worth of stamps for that same $1.0. My profit margin is 230%’.
‘Yeah, but $3.30 worth of stamps is still stamps’, complained an attentive listener.
‘I know’, said Ponzi. ‘So I sell the stamps at a 10% discount through my contacts with the larger firms downtown. Deducting the discount, I’ve got $3.0 cash now, from the $1.0 that I started out with. Now, let’s say, I got that dollar from you. I will pay you back your dollar, plus 50 cents interest. Since I just sold $3.0 worth of stamps, I have a dollar and 50 cents for myself. I’m going to spend a third of that on my offices and processing overheads, and a third on commissions and bonuses to my sales people; and then, ladies and gentlemen, I’m going to pocket the other third and take my wife for a stroll’.
This was the essence of the original Ponzi scheme. Note that in this description, Ponzi starts out by exploiting the fluctuations of exchange rates, and the lack of arbitrage; and note that, by the end of the explanation, he is simply offering 50% interest, which he pays out to claimants out of the additional funds he has received from other investors who are likewise anticipating a 50% return on their investments, within a short space of time.
The germ of the idea was derived from the foreign exchange market; but once Ponzi has realised that people will pour money his way if they are promised a 50% return, he can abandon his elaborate explanation (‘his ‘prospectus’) of the exploitation of exchange rate fluctuations and the tedious task of shipping, receiving, handling and exchanging Postal Reply Coupons, which gave him the ‘easy money’ idea in the first place.
In other words, his sales pitch is no more than a now redundant, expendable illustration – a false prospectus which disguises the fact that he is really promoting a pyramid selling operation. For he has realised that all his investors care about is receiving 50% on their money. How this is to be achieved does not normally concern them.
By December 1920, Charles Ponzi was matching old money with ever larger amounts of new money. In May 1921 alone, almost $500,000 of new money poured into the Securities Exchange Company – as 1,500 or more new customers, lured by the 50% yield offered through advertisements, sought their share of the huge profits they thought would be forthcoming at minimal risk. The office now bulged with fat stacks of dollar bills.
THE FLOOR STARTS TO GIVE WAY BENEATH HIM
But problems started to arise when Joseph Daniels filed a lawsuit alleging that he had helped to found the Securities Exchange Company (SEC) with a loan of $230 worth of furniture plus $200 in cash. Daniels had indeed provided the beaten-up desks that had been offloaded in the dusty office, and had let Mr Ponzi have $200 to spark interest in the Postal Coupons. It wasn’t just a loan, Daniels maintained, now that Ponzi was drowning in cash. ‘We were partners. I put up capital and property’. On 2nd July, Mr Ponzi was handed a demand for $1.0 million.
The Boston Post telephoned, and Mr Ponzi told the reporter that he had indeed bought furniture from Mr Daniels, but that he had never received any money for investment from him.
But when the newly installed banking commissioner for Massachusetts, Joseph Allen, read the newspaper, he wondered: ‘Where did Ponzi come from? Who are his associates? How is he managing to double people’s money?’
Allen asked Ponzi to pop round to his office, for an interview. The Securities Exchange Company did not describe itself as a bank, nor did it offer any banking services. Therefore, in the absence of a complaint – and none had yet arrived – the Commissioner had no jurisdiction to examine Ponzi’s business. At the interview, Ponzi explained the curiosities surrounding Postal Coupons, pointed out that money chased money, collected his black hat and coat, doffed his hat, and bid Mr Allen goodbye.
But Richard Grozier, city editor at The Boston Post, had always thought that Charles Ponzi’s scheme was fraudulent; and to initiate what he fancied would be the inevitable débacle, he elicited a comment from one of Boston’s leading citizens, Clarence Barron, the owner of Dow Jones & Co and The Wall Street Journal.
At the end of July 1920, The Boston Post carried a front page story entitled: ‘Clarence Barron questions the motive behind Ponzi’s scheme’.
Theoretically, Barron admitted, you could indeed turn a profit on the UPU coupons. But that was the only truth buried within the operation. You could never earn more than a few thousand dollars, not just because of the trouble involved in offloading the stamps and tracking the various conversions driving the process, but because there simply were not enough coupons available.
France, Romania and Spain had just abandoned the scheme, a few months earlier. A cursory check with the UPU showed that they had a few hundred thousand dollars’ worth of coupons in circulation – nowhere near the $10 million or $15 million Mr Ponzi claimed to be trading. So where was Ponzi getting his coupons from? Furthermore, the US Postal Service had announced, on 2nd July 1920, that Postal Reply Coupons would no longer be redeemable in lots larger than ten. So how was Ponzi converting his coupons into stamps?
Finally, Barron asked, if Ponzi is doubling everyone else’s money, why does he keep his own funds in regional banks? The Boston Post knew that Ponzi kept millions of dollars on deposit at seven or eight New England banks, and that the accounts were ballooning. How could a man who was paying 100% interest every 90 days, put up with drawing just 4% on his holdings? Barron concluded:
‘Right under the eyes of our Government, Mr Ponzi has been paying out US money to one line, with deposits taken from a succeeding line’ (another bank).
All of a sudden, all the doors which had flown back on their hinges at the sight of Mr Ponzi, were slamming tight shut. The Massachusetts District Attorney ordered Ponzi to cease and desist. His customers demanded their money back, and Ponzi was eventually jailed for Federal mail fraud, then deported. He wound up destitute in South America (2).
SCAMMING TO FINANCE THE WORLD REVOLUTION
Today, the now terrified heirs of black-hatted Mr Ponzi are these cynical, ruthless intelligence-linked corrupt ‘Black Hat’ fraudsters who have been running a huge nexus of Ponzi-style scams from Special Operations at Langley and other segments of the corrupted US intelligence community. Their victims are ordinary Americans. The funds that they steal are stashed untaxed offshore, and then used for self-enrichment, collateralisation, hypothecation and illegal financing operations, including the funding of global terrorism.
Yes, we mean precisely what we say. These funds are used both for self-enrichment and also for World Revolution purposes. And these days, the World Revolution is led by US intelligence.
Some initial light is shed on this in Volume 30 of our associated intelligence newsletter Arab-Asian Affairs [see www.worldreports.org for subsription details]. There is much more to be exposed on how funds routinely scammed from American domestic targets by heartless ‘Black Ops’ American intelligence operatives, conniving lawyers, the moribund US enforcement establishment and dubious tax collection agencies, are being used to finance the imposition of The New Underworld Order (a vast, mad, failing project which is being torpedoed below the water line, ‘as we speak’).
For instance, it transpires that the CIA is responsible for having drafted the texts of teaching materials used in the Pakistani ‘religious schools’ (Madrassahs), which teach hatred of America and the West. There are reports that the Bush II Administration has begun promoting surrogate funding for “contra” militias to challenge Hezbollah and Hamas for control of the streets of Beirut, Ramallah and Gaza City – implying that these possessed revolutionary CIA madmen are intent upon promoting an unbroken string of civil wars and failing states stretching from the Hindu Kush to the Mediterranean (3).
Such unspeakable activity on the part of the revolutionary intelligence cadres serving the controlled US Presidency is motivated by a perverse ‘Black’ World Revolution agenda to foment the global terrorism campaign that provides the pretext for their reprobate ongoing global control offensive.
For, in parallel with the KGB/GRU’s ‘collapsible Communism’ operation in 1989-91, the United States moved seamlessly into the driving seat of the World Revolution, while the ‘former’ Soviet Union took a ‘well-earned’ rest.
(Sorry folks, the historical reality is that the United States is a revolutionary power, established by dark European forces: see the Editor’s new book The New Underworld Order: http://www.edwardharle.com“>www.edwardharle.com).
But be of good cheer. These criminals are decisively on the run, their leaders have been negotiating their immunity and the huge penalties that they are liable to have to pay for their reprobate behaviour: the funds that they have stolen must be disgorged in full.
The gross, pervasive financial corruption and associated criminality of this nest of scorpions is being exposed, and their days in the sun are over.
Indeed the prospect facing many of them is lifelong contemplation of the cockroaches roaming the cells of their future residences inside the vast American GULAG.
Their corrupt frustration (from June 2006) of The Wanta Plan, which the Group of Eight powers, other governments and the international banking community wish to see implemented – for the benefit both of the United States and of the Rest of the World – has been publicised everywhere, except in the collaborating and compromised ‘mainstream’ media.
With each posting now, at least 20 million initial copies of our reports are distributed worldwide immediately, within 24 hours.
Since we started these reports, the net has closed in on these people. The thugs never anticipated that anyone would ever have the effrontery to stand up to them. We cannot be more specific yet: we must follow guidance and must exercise appropriate restraint in the face of the strong temptation to reveal what has been happening since we last reported in our Diary format.
Gorbachev once said that ‘there must be no let-up in the fight against religion because until religion is destroyed, Communism cannot prevail’. The Editor of this service rephrases Gorbachev’s boast as follows:
‘There will be no let-up in the fight against rampant official intelligence community-linked financial corruption and scamming, because until this abomination has been decapitated, civilisation and peace can never prevail’.
(1). Condensed with kind permission from ‘Elite Power and Capital Markets’, by Michael C. Cottrell, M.S., Thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, 13 February 2002, pages 42-44.
(2). ‘How Charles Ponzi pulled it off: Making a fine art out of a pyramid fraud’, International Currency Review, Volume 27, Number 3, December 2001, pages 51-52.
(3). ‘A bad plan for the Middle East’, James Dobbins, Director of the International Security and Defense Policy Center at the RAND Corporation and a former US Assistant Secretary of State, International Herald Tribune, 18 January 2007.
George Orwell: ‘In an age of deceit, speaking the truth is a revolutionary act’.
J. Edgar Hoover: ‘The individual is handicapped coming face to face with a conspiracy so monstrous, he cannot believe it exists’. [As with the holocaust].
Martin Luther King: ‘Injustice anywhere is a threat to justice everywhere’.
US friend: ‘You are to be congratulated on a masterful piece of research in exposing the treason and the biggest heist in history’.
Ambassador Leo Emil Wanta: Diplomatic Passport Numbers 04362 & 12535 a.k.a. Frank B. Ingram [FBI] (Sector V) SA32NV; and a.k.a. Rick Reynolds, SA233MS. AmeriTrust Groupe, Inc: Federal EIN Number 20-3866855; Virginia State Corporation Identification Number: 0617454-4; Virginia State Department of Taxation Identification Number: 30203866855F001