Nick Smirnow and his now notorious “Pathway 2 Prosperity” scam is perhaps the first major ponzi scheme that the original PSA site (PonziSchemeAlert.com) aggressively reported in a manner that urged all members / victims to take immediate action. PSA continues to display testimonies from frustrated victims.

However, we’ve recently received other e-mails from victims asking for updates about Nick Smirnow and any “legal action” taken against him. Therefore, we’ve decided to create a quick update about the latest efforts to track down Smirnow.

The fraudster, Nick Smirnow, escaped to the Philippines and many victims were left wondering if they’d ever see a short line of justice against his major money laundering activities. Fortunately, for investors, the U.S. wasn’t about to let Smirnow spend the rest of his life sitting on the beach, sipping cocktails paid for with the money he stole from his victims.

— — — — —

Nick Smirnow to be extradited?

The United States government is indeed currently attempting to extradite the P2P administrator and chief operator, Nick Smirnow, from his “hide-out” in the Philippines.

P2P was officially classified as a “ponzi scheme” by U.S. authorities, and therefore, if Nick Smirnow is captured and forced to surrender all remaining assets and investments belonging to P2P members, the U.S. AG will probably appoint a receiver and attempt to claw back returns (or “profits”) from P2P members that gained the most from Nick’s ponzi scheme operations.  The total recovered funds will first be used to satisfy all legal fees, and the remaining amount will most likely be distributed to P2P victims based on some proportional value in comparison with victims’ “investments.”

Unfortunately, as seen with similar large-scale ponzi schemes, such as 12 Daily Pro, this process can take several years.  Another unfavorable possibility also exists for victims, in which a considerable amount of P2P “returns” will be difficult to recover.  Victims may only receive a small fraction of their “investments.”

“Can I sue Nick Smirnow?”

From what I understand and have been able to find, the government has charged Nick Smirnow with selling unregistered securities, securities fraud, and (essentially) operating an illegal ponzi scheme.  In this case, I expect the U.S. government would take precedence over any individual or class-action lawsuits.  They will attempt to confiscate any and all illegally distributed funds.

I expect the court appointed receiver will then send out a notice asking for victims to submit their claims in a specific report format via e-mail or fax.  Once you receive this notice, make sure you send in your report (as directed) asap.  Those specific reports would then be used in order to allocate refunds to victims.

Just as a quick warning – I’m not necessarily saying this will happen; rather that this is what has happened with similar, large-scale scams, as with 12 Daily Pro (Charis Johnson) and CEP (Trevor Reed).  The U.S. must successfully extradite Smirnow before we can know for sure.

“Should I still report Nick Smirnow to ic3.gov?”

I usually refer people to the ic3.gov site if they wish to report an internet-related scam, and unfortunately, the process usually ends there.  However, fortune may be on P2P victims’ side, since the numerous complaints have already convinced United States authorities to take action.

Victims may still want to submit a report, since it will give investigators testimony and record of any loss they may have incurred.  However, if further questionnaires or reports are sent to victims in the future by a court appointed receiver, make sure you complete these as well.
Attributes to : The P2P scam / Pathway 2 Prosperity scam / Why the Nick Smirnow scam may have left deadly ponzi scheme wounds
— — — — —

- Mr. Ryz

www.PonziSchemeAlert.com

— — — — — — — — — —

Victims of the now infamous 12 Daily Pro, originally founded and operated by Charis Johnson, have been awaiting the refund process for nearly 3 and a half years.

Finally, many victims that originally filed a complaint with the Receiver, Thomas F. Lennon, are walking to their mailboxes and pulling out refund checks with excitement. All qualified claims are estimated to be settled between September 1 and September 30, 2009.

Unfortunately, many victims involved in Charis Johnson’s 12 Daily Pro money laundering scheme are faced with a cruel reality. The aftermath of one of the largest Autosurfs now clearly demonstrates that all ponzi schemes ultimately result in heavy losses and misery for the majority of “investors.” Eligible victims – i.e. people who filed a claim and completely lost their investment after 12 Daily Pro assets were seized by the government – only received approximately 30% of their “upgrades” (which were essentially referred to as “initial investments”).

Charis Johnson & 12 Daily Pro Overview

Charis Johnson founded 12 Daily Pro through MyLifeClicks, LLC in April of 2005. The company advertised an opportunity to purchase advertising upgrades (“investments”) and earn a 44% ROI within 12 days. Members were required to surf a minimum of 12 websites per day for 12 days in order to gradually earn 12% portions of their 144% total return. Once the 12 day cycle was completed, 12 Daily Pro would payout the principle plus 44% ROI via internet payment processors; the most popular of which were StormPay and E-Gold.

Between April of 2005 and January of 2006, 12 Daily Pro had attracted over 300,000 people and inspired them to create member accounts. Only a portion of these 300,000 accounts actually upgraded money into the 12 Daily Pro system; however, thousands of these accounts were actually maxed out at $6,000, the 12 day period advertising upgrade limit. During this 9 month period, 12 Daily Pro’s total “upgrade package” value exceeded $50 million.

After a month of investigations, the SEC charged Charis Johnson, 12 Daily Pro Administrator, with running an illegal ponzi scheme. All 12 Daily Pro related assets were seized and placed in the hands of a court appointed receiver, Mr. Thomas F. Lennon. Future reports acknowledged that although Charis Johnson had claimed that 12 Daily Pro was earning revenue through a variety of income streams in order to pay the 44% returns, more than 95% of these payouts was merely transferred through the classic “rob Peter to pay Paul” ponzi scheme model.

Let Us NOT Forget 12 Daily Pro!

As described earlier, the end results for this massive ponzi scheme were not pretty. The legal battles and recovery process took well over 3 years – essentially from February of 2006 to September of 2009 – before most victims even received a penny back. Now that the 12 Daily Pro case is finally winding down to a close, these victims are left with mere fraction of their investments. Only approximately 30% of victims’ funds remain due to (1.) initial (or “early”) 12 Daily Pro “investors” withdrawing their profits through the ponzi scheme money pool, and (2.) the excessive legal fees during the 3 year process.

One nightmare might be wearing off, but the internet is still flooded with Autosurfs that essentially utilize the exact same ponzi scheme elements as 12 Daily Pro. Some popular examples of similar, long-term Autosurfs include Bob Krimm’s Tri Star Media of 2006 and Andy Bowdoin’s Ad Cash Generator (ASD) of 2008. In fact, Andy Bowdoin of ASD is currently facing the same charges and undergoing the same legal process that Charis Johnson met in early 2005. Just like 12 Daily Pro, many ASD victims are standing by for refunds, but will unfortunately soon realize that (1.) the legal process will take 2-4 years and (2.) only a fraction of assets involved in the ponzi scheme can be recovered in the end.

Let us not forget the eye-opening, dreadful truths about the “Autosurf” concept. It can NOT work from any realistic financial perspective; it is mathematically impossible, just like all ponzi scheme elements. Do not fall prey to the next “12 Daily Pro,” or you will learn a painful lesson in reality vs. greedy ambitions.

— — — — —

- Mr. Ryz

www.PonziSchemeAlert.com

Just 10 minutes of reviewing the “business” made me feel as if I was staring at a reformed version of another infamous program in Autosurf history: Charis Johnson’s 12 Daily Pro scam. The red flags sticking out of ASD seemed obvious. Yet, thousands of people had their head in the clouds only because they were being paid repeated high returns for the simple act of viewing website ads.

The popular opinion that Bowdoin was a “Saint” quickly changed after the State of Florida and United States Attorney General took a closer look at ASD related activites and then soon revealed that Andy Bowdoin’s “internet advertising business” was nothing more than a masquerade for an illegal ponzi scheme model.

— — —

When you see these kinds of situations with major, sophisticated ponzi schemes and realize just how many people get hurt in the process, you hope that at least some people learn an important life-long lesson about responsible investing and research.  Unfortunately, it appears that many people did not learn anything at all.  Many of them held on to their “get rich quick” emotions and refused to come back to reality.

Even after the Courts and various Autosurf related blogs and websites warned about the ponzi scheme element – AND even after Judge Collyer ruled that Andy Bowdoin’s ASD Cash Generator was not a legal business and therefore operated as an illegal ponzi scheme – former members flocked to the new birth of the same treachous program: The Ad View Global Association or AVGA, also abbreviated as simply AVG.

AV Global Association was founded by a group of participants from the Andy Bowdoin / ASD ring.  Supporters of AVG often posted that it’s claim to fame was the fact that it was Andy Bowdoin’s same “genius” business concept registered offshore, and therefore, protected from the “evil U.S. government trying to ruin everyone’s fun.”  Those claims may have had even a small ounce of merit, if it weren’t for the fact that Bowdoin’s so-called “revolutionary business” with ASD Cash Generator revolved around a money pot that required a consistent increase in investments and/or members to function in the long run.

I would have hoped that the majority of people would have been able to put this basic, logical concept together- “If ASD Cash Generator’s business model was ruled an illegal ponzi scheme, and Ad View Global (AVG) essentially uses the same model, Ad View Global is also a ponzi scheme!”  Putting it in even more simple terms- “If ASD Cash Generator was a scam, then Ad View Global is a scam.”  Fairly simple, right?  Apparently, hundreds (if not thousands) of people failed to understand this.  So, before we dive into further discussion about Ad View Global (AVG)…

Let’s do a quick 30 second re-cap on WHY Bowdoin’s ASD was a ponzi scheme:

ASD Cash Generator members upgraded (or “invested”) their accounts by purchasing “advertising packages.”  This specific dollar amount of advertising packages would eventually yield a 25% ROI.  Substantial referral rewards were also offered.

The ASD business model did not have the means to earn enough outside revenue to continually pay out this high ROI and referral bonuses.  In other words, ASD was using new upgrades (or “investments”) to pay former “25% ROI” obligations and all referral incentives.

Since the ASD model relied on an exponential growth effect to continue to pay these high rewards and the world contains a limited number of people, eventually growth rates would diminish. The money pot would eventually run dry, and many people would be left with a loss. This is the very definition of a ponzi scheme.

I won’t even bother explaining the securities regulations ASD violated when it decided to construct a model based on offering these ridiculous returns.  I don’t need to.  The ponzi scheme element alone makes this model illegal and dangerous.

— — —

Now let’s go back to Ad View Global, shall we?

The main argument for predicted long-term success I’m seeing from former, die-hard ASD supporters is:  “AVG is located offshore, and this time we will be safe.”

Oh really?  Well, before you go about believing something so absurd, you should know 2 interesting facts about ponzi schemes…(1.) They are illegal in all countries, and (2.) even if the program does play out for a considerable amount of time, eventually the money pot will still dry up and most people will LOSE money.

Members of the Ad View Global scam aren’t protected simply because business registration took place across the oceans.  A ponzi scheme is a ponzi scheme, no matter how you slice it.  People get hurt in these scams either way- If the government doesn’t step in and eventually refund small portions to victims, the pool of investor contributions will die off and the “business” will collapse on itself.

Unfortunately, once again, it looks like many former ASD Cash Generator members are going to be faced with the same hard lesson they refused to learn the first time around.  As of 2009, many AVG members were already irritated with money transfer problems.  However, during late June, Ad View Global lifted up the “grand daddy” red flag pointing to a desperate ponzi scheme on the verge of death.  AVG suspended payments to its members, only to back up their action with the excuse that rebates (i.e. “returns”) were never officially guaranteed.

In early July, AVG quickly followed up by announcing a restructured payment plan that greatly disadvantaged current members and may even prevent members from receiving their rebates altogether.  The Ad View Global forum activity grew out of control, and it was repeatedly opened and closed for member viewing.  Some angry members demanding explanations for AVG’s unfavorable changes posted their concerns in the forums only to find them erased soon after.

— — —

Clearly, AVG is in panic mode, and the signs don’t point to a pretty sight.  For some, the “get rich quick” dream is about to crash and burn for the second time.  Let’s hope the lessons to be learned from the Ad View Global scam aren’t so carelessly discarded this time around.

ASD Cash Generator already caused enough problems; it’s a shame history had to repeat itself so quickly.

— — — — —

- Mr. Ryz

www.PonziSchemeAlert.com

The month of August is upon us, and we quickly approach the one year anniversary since the last time Nick Smirnow paid any member of his investment group, Pathway 2 Prosperity, (often abbreviated “P2P”).  I watched enthusiasm for the Pathway 2 Prosperity program slowly die away during the past year, as many loyal members and investors slowly began to accept that Mr. Nick Smirnow wasn’t the “man he claimed to be,” and P2P was most likely not a genius money machine after all.

As angry investor testimonies began to pile up on the internet, I felt compelled to help victims find the directions for reporting this fraud to the proper authorities.  The current investigators at the time were Andy Muller of the Ontario Provincial Police, and Jacob Gholson, a United States Postal Inspector.  Canadian victims are now urged to also forward their completed victim questionnaire to Detective Tanya Hodgin:  tanya.hodgin@ontario.ca

— — —

I’ve been familiar with the so-called “HYIP / Autosurf” arena for many years now.  Although I’m accustomed to dealing with emotional cheerleaders and poor logic attempting to defend HYIPs and programs filled with multitudes of red flags, I must admit that the Pathway 2 Prosperity fiasco did frustrate me more than usual.  Even after P2P ceased payments for months, the internet continued to be littered with endless comments and taunts from some of the most arrogant, shameless promoters and members I’ve ever come across in this dark industry.

Now that the reality of Pathway 2 Prosperity is starting to become clear to great amounts of members, most of the obnoxious aliases have disappeared from popular forums and blogs.  However, many blind faith Nick Smirnow supporters continue to linger on and speak nonsense.  I originally planned to post 2 articles about the Pathway 2 Prosperity scam on our main PSA (Ponzi Scheme Alert) site and leave it at that.  Unfortunately, I’m still seeing plenty of jeering at P2P contenders and poor arguments defending Nick Smirnow.

I don’t want to see P2P victims confused by Nick’s emotional supporters, because then less people will be tempted to forward their testimony and completed questionnaire to the U.S. / Canadian authorities.  The more victims that don’t bother to do this – the greater odds that Mr. Smirnow will get away with this crime.  Therefore, if YOU are a victim of Nick Smirnow’s Pathway 2 Prosperity and you have not yet filled out the “Victim Questionnaire,” I urge you to read our article HERE for more information.

Now I’m going to address some of questions I’ve received or seen on Pathway 2 Prosperity forum related discussion:

— — —

“How do you know that Pathway 2 Prosperity was an illegal ponzi scheme?  How do you know Nick Smirnow was lying to investors?”

I don’t claim to have the gift of omniscience; nor am I a P2P “insider.”  However, I can offer you basic logic and reason.  What some Nick Smirnow / P2P supporters still don’t appear to realize is that all long-term ponzi schemes have a very distinct pattern. These sophisticated ponzi schemes all follow a nearly identical series of red flags.

Whenever I hear a stubborn or frustrated ponzi scheme participant say – “You don’t know anything, because you’re not a member” or “This program is different from all the other shady high yield programs” – I can’t help but chuckle to myself.  An experienced researcher in this industry usually doesn’t need to spend more than 1 – 2 hours to complete unbiased due diligence on a program and determine whether or not it has an abundance of ponzi scheme related red flags.

Nick Smirnow offered incredible rates of return to his investors without providing even a shred of proof concerning his investments.  Once increased rates of exponential growth subsided, payments ceased and Smirnow vanished. Member support and faith seems to be primarily based on the emotions that merely resulted from “being paid.”  The only defense that was presented from the P2P administration essentially resembled a tantrum thrown by a child who was “caught with his hand in the cookie jar.”

This series of P2P related events follows the pattern that has been observed by several other “investment programs” utilizing a ponzi scheme model.  It is, therefore, my strong opinion that Pathway 2 Prosperity was nothing more than a long-term ponzi scheme. As I have told a couple “passionate” Nick supporters via e-mail in the past months, I would be happy to remove my articles about Nick Smirnow and P2P as soon as he is willing to prove the legitimacy of all his investment activity to me and his membership, as required by law.  (For the records, no one should expect this to happen anytime soon.  )

“What good will it do to cooperate with the government?  In similar situations with large scale ponzi schemes, the government takes money and the victims receive little to no refunds.”

Unfortunately, there is some accuracy to this statement.  The courts and lawyers are always the first to be paid, and the legal process does indeed take a considerable amount of time.  This is one of the primary reasons that ponzi schemes are so treacherous- no matter which reason the program is eventually ended, the vast majority of members or “investors” end up losing money.

Maybe some of you have been reading about a similar program that once faced the same issues.  It is known as 12 Daily Pro; originally administrated by Charis Johnson and then placed under control of Thomas F. Lennon, U.S. District Court appointed Receiver.  All assets were seized back in February of 2006, and many people who have been told they will indeed “receive a settlement,” i.e. refund, are still awaiting their check in the mail.  Therefore, it’s difficult to predict what (if anything) P2P victims will be able to collect when all is “said and done.”

Am I personally fond of the heavy fees collected through the “preferred payment” structure associated with the legal forces in these cases?  No, not necessarily, but I still recommend all victims report their accounts of theft to the authorities.  I certainly can’t foretell whether or not anyone will see a penny, but I would assume that the chances of a criminal brought to justice are improved when a greater number of testimonies are submitted to the proper authorities.  After all, even if the “refund pot” is sucked dry, ponzi scheme fraud still deserves to be punished.

“Is Chris Balsdon, Gary PVR, Wise Owl, Taplyne, etc. of the former Moderation Staff just as guilty as Nick Smirnow in the Pathway 2 Prosperity scam?”

Some of these P2P Moderators have claimed that they were nothing more than “volunteers” and truly believed what Nick Smirnow had told them; i.e. they were victims like everyone else.  I do not doubt that the Moderation Staff was a group of volunteers; yet, as long-term members, I would have a hard time believing they didn’t all earn a pretty penny off of P2P related “investments.”

But, did they know about the true illegal, ponzi scheme nature of the P2P program all along?  Well, I’m not sure anyone can judge that at this time.  In fact, I have also personally been the victim of a ponzi scheme operator who played on my emotions and convinced me that I was “helping others” by rapidly promoting his program and working for his forum, only to discover that he was a vile scammer.  Therefore, I recognize that a similar situation may have applied to the Pathway 2 Prosperity Moderation Staff.

However, I am not necessarily saying that all former P2P Moderators should be let off the hook.  When I learned I had been lied to and betrayed by a ponzi scheme administrator, I was ashamed of my carelessness and greed. In order to prevent myself from ever being involved with something so sleazy again, I immediately realized the need to learn how to carefully complete due diligence and spot all the red flags of a ponzi scheme.   This required a resolution to put logic and patience before greedy desires of “high ROI.”  In the process, I quickly realized that spotting long-term ponzi schemes is usually not very difficult.

And that is exactly the part that concerns me about some of the former P2P Moderator’s ability to simply claim “ignorance” and expect a free pass.  Some of these individuals took part in Moderation positions for very similar long-term ponzi schemes; one of which will never be forgotten by HYIP / Autosurf history:  Bob Krimm’s Tri-Star Media. Once the Bob Krimm series of ponzi scheme “investment programs” went belly-up, his Moderation staff also claimed ignorance.

That, right there, definitely worries me.  Will they put a limit on reckless behavior in the future?  After Pathway 2 Prosperity also fades away into history, are these allegedly “innocent” Moderators going to find themselves sitting in a similar boat?  Or are they going to take some responsibility for their actions and make a reasonable effort to refrain from becoming involved in yet another illegal mess?

Time will tell, I suppose.  The best line of advice that comes to mind if you find yourself researching a program and discover a similar name from P2P staff is:  “Do your OWN due diligence, and then make the intelligent decision.”

— — —

Finally, I’d like to take this time to mention and thank a couple dedicated Pathway 2 Prosperity contenders that have diligently attempted to open the eyes of confused P2P members, while ignoring the senseless bickering and jeering of cheerleaders on the forums for the past several months:

* Trader J / cvkint (Jody)
* Lynndel

I may not have necessarily agreed with everything they said in P2P related forum discussion; however, I believe they deserve some recognition for trying to show people the true nature of this program and therefore save them time and misery.

— — —

I will leave the comment section open, but I ask that all posters try their best to keep it clean.  I welcome honest discussion.  If, however, you fit the mold of a troll or troublemaker, save your comments for one of those forums that hosts a variety of immature garbage. It will just be deleted here.

For more information about Pathway 2 Prosperity, read our article on the main site.

— — — — —

- Mr. Ryz

www.PonziSchemeAlert.com