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Jonathan Mikula and PhoenixSurf Charged by SEC for Fraud
Remember Johnathan Mikula and his NME Global group who operated the ponzi scheme autosurf program Phoenixsurf last year? Well, it’s taken a long time for it to happen but on July 24th 2007, formal charges were issued by the SEC against Jonathan Mikula and Gabriel Frankewich. The information from the SEC’s website is reprinted below.
SEC Charges Operators of Phoenixsurf.com Web Site With Conducting a Massive Internet Ponzi SchemeFOR IMMEDIATE RELEASE Washington, D.C., July 24, 2007 - The Securities and Exchange Commission today filed securities fraud charges against the operators of an Internet-based Ponzi scheme that raised $41.9 million in just four months from more than 20,000 investors worldwide. The Commission’s action, filed in U.S. District Court in Los Angeles, alleges that from Feb. 22, 2006, through May 21, 2006, four defendants operated a Web site — Phoenixsurf.com — that offered investors a 120% return in just eight days on investments ranging from $8 to $6,000 in a purported “traffic exchange program.” Walter Ricciardi, Deputy Director of Enforcement, said, “Paid autosurf programs have become an enormous industry on the Internet. In this instance and other similar cases, however, a paid autosurf program has turned out to be a Ponzi scheme, which depends on attracting new members in order to pay returns to current members. In reviewing such programs, investors should bear in mind the age-old adage: ‘If it looks too good to be true, it probably is.’ Promises or guarantees of double-digit returns in a matter of days or weeks are highly suspicious and the investor should exercise extreme caution.” Andrew Petillon, Associate Regional Director of the Commission’s Los Angeles Regional Office, said, “The Phoenixsurf.com program was destined to collapse because it depended on attracting new investors to pay existing investors. We again caution investors about ‘get-rich quick’ schemes offered on the Internet, especially when the companies have not filed disclosure documents with the Commission.” The Commission’s complaint against Jonathan W. Mikula, 21, of Athens, Ga., Gabriel J. Frankewich, 29, of Byron, Ga., New Millenium Enterpreneurs, LLC, and Phoenixsurf.com alleges that under the purported program, to receive the promised return, investors had to purchase advertising and view at least 15 web pages of advertising per day during the eight-day period. Although the defendants represented that they would pay the promised returns with funds received from investors and other “businesses/programs within the NME/Phoenix network,” they operated Phoenixsurf.com primarily as a pure Ponzi scheme — using for the most part only new investor funds to pay the promised returns to existing investors. The complaint alleges that the defendants paid investors $36.7 million, almost all of which came from advertising purchases from new investments in the scheme. To settle the Commission’s charges, the defendants consented, without admitting or denying the allegations in the complaint, to a judgment permanently enjoining them from future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act. The judgment also ordered the defendants to pay disgorgement and prejudgment interest — for Mikula, a total of $106,671.08; Frankewich, a total of $96,345.79, and Phoenixsurf.com and New Millenium Entrepeneurs, LLC in amounts to be determined. Payment of the disgorgement and prejudgment interest by Mikula and Frankewich was waived and civil penalties were not assessed against them based on their sworn financial statements and other documents submitted to the Commission. |
URL: http://62.193.249.41/servlet/redirect.srv/p5.p1.pbcd.pbon.ptck/news/press/2007/2007-141.htm
After reading the SEC’s indictment I was wondering why Christian Rischel, Michael Hawkins and Jason Benoit of Avante Holding Group were not named in the SEC’s filings against Phoenixsurf. Perhaps during the course of the investigation they will also be indicted because if anyone remembers, Rischel was accused to taking control of PhoenixSurf’s accounts and pilfering hundreds of thousands of dollars beside the fact Rischel had launched his own Phoenixsurf spinoff, AdTitans.
This SEC filing also brings up questions as to when we’re going to see the axe drop on Dustin Fennel of DesertSkyMarketing who had been a member of NME and who was a moderator on PhoenixSurf’s forums. Also in question is when the SEC will finally go after scammers Bob Krimm of Tri-Star (15HitsDaily, 24SurfPro, Treo-Surf, Tri-Star Moneychangers) and after Jack Cobb of the Maximum Programs (PlanetTrust, MaximumAdz, MaximumSurf). I don’t think anybody was expecting the SEC to take over a year to make this move, but this should be a lesson to all these autosurf admins out there that if you’re going to rip people off after telling people your autosurf is an investment and not a game, you’ll have it coming to you.
by Aprilwine
I pray to God that people will learn to think for themselves and not be taken advantage of by all the thieves and scammers out there.
by TopEarner
They owe me $3k from last year and never pay me Jack!
We should form an alliance, get some lawyers together and go after these guys for our pay including interest!
by Brendan Lim
I had the feeling that the people at Phoenix were liars when they kept defending schEMO when they were being shut down by the attorney general. I should have listened to my instincts, I might have more money now.
I don’t mean to be rude, but why do you guys keep investing in these schemes. Are there any that have operated successfully for a few years? How could they? WHY do you do it? Do you think if you’re in first that you might have the opportuntiy of ripping someone else off? I really don’t get it.
I just hope they get that thief from XLO next.
by C4G
I’m glad I never even joined Phoenixsurf. The people from NMEGlobal just rubbed me the wrong way how they used the commotion from 12DailyPro to launch their own program. Now a year later, they’re getting what everybody said they would.
by Don Corleone
Vince and Stephanie Kronlein, Alien Trust, and W3MA,LLC…YOU ARE NEXT!!!! Get in line behind Bob Krimm and Andy from XLO to get busted all of you thieving bastards. Jail is too good for you scammers. I wish it were China where they would execute the vermin.
by Brendan Lim
I got suckered in through Dustin when he was pushing this program heavily in the beginning. I’ll never trust that jerk ever again. He ripped my off for almost $5000 in DSM and I’ll not forget that. Hope the SEC goes after him in the CEP investigation. The guy is a crook just like his NME buddies.
by DreamsOfWealth
I have to just laugh. To those who did not learn from the Scampay fiasco?? You did not listen to me or others who said Mikula and his gang were fraudsters. Even the mods on scamm ridden TG said so. You deserve to lose your money. You had ample warning. I think the investigation by the University of Georgia is what shut these scammers down. In the meantime, they took the money and acted like their e-gold was hacked. It was their plan all along.
by C4G
These guys were the biggest joke on Talkmold forums last february when they were coming up with all kinds of BS and the senior members were shooting their ideas full of holes. I read somewhere Christian Rischel has started some new scam Forex program.. Anybody have any details? Please post a link here.
by coopersview
Hi C4G,
What a great history lesson about this autosurf world. I must be in Mars during the Phoenix Era so I did not know much about Dustin’s background. I had only good things to say about Dustin.
“He ripped my off for almost $5000 in DSM and I’ll not forget that. Hope the SEC goes after him in the CEP investigation. The guy is a crook just like his NME buddies.”
Brenda, how could Dustin possibly rip you off because we were all paid until the demise of CEP, unless you join DSM very late?
I am still in shock to hear the kind of story on Dustin and that makes me sick to my stomach.
JMV
by Dollars Blog
I always thought it was dumb giving your real info to start a scam.
by C4G
@JMV - Dustin was an early member and supporter of NMRGlobal and Phoenixsurf and he was a moderator on their “one sided” forums. The forums were reminiscent of 12DailyPro’s forums (ie: talk bad about the program and you’re banned). To Dustin’s credit, he did resign as a moderator and left NMEGlobal.
Granted, even though I lost money to Dustin because of his idiotic idea to put his eggs in Trevor and Claytons basket (CEPTrust), Dust is still actually a very nice, intelligent and decent person and I don’t think he intentionally would have ripped us off. I’m sure he got caught between a rock and a hard place, which is the hallmark of this arena.
I’m sure if Dustin could make sure we all got paid, he would, but the situation is out of his control.
In all honesty, I would be sad if Dustin or Israel from 4Newbies got busted — Now Andy from XLO, Bob Krimm or Nvus are a different story. I’d love to see them all in jail playing “pass the soap” with Bubba.
@Paul - Dustin was trying to be legit, but he just didn’t think his businessplan through. He’s got a good heart, and he’s a great drummer, I had talked with him and Israel about starting a program where people got paid to review music from bands who paid to submit their music. Unfortunately, both Dust and Izzy were in too much of a hurry to do something and didn’t take the time to think things out.
by coopersview
Hi C4G,
Funnily enough, Phoenix Surf was my second autosurf program after 12dailypro. My good friend got me into both and I made very good profits in both. I did not have the habit of visiting any forum or blog at that time. In a way, I was autosurfing like a piece of white paper, so pure and simple and I was not aware of what was going on in real world.
Dustin, the drummer! Oh yes, that was how I was connected with him. As a musician myself (both classical and jazz), I know how we think. Sometimes, we can be very logical but most of the time, our idealistic character could come up with some of the most outlandish ideas and do the strangest things in life. We believe in people and want to see the world in perfect harmony.
I agree with you Dustin and Israel do not deserve to be punished.
I like your idea about ‘getting paid to review music’. You must be a musician yourself in order to come up with such a fantastic idea!
JMV
by coopersview
P.S.
If you are interested, you may read my views on Dustin in Paul’s blog on July 14:
http://money-news-online.com/blog/?p=17#comments
JMV
by C4G
Yes, I’m a musician myself. I have a “bad boy” raunchy Butthole Surfers style punk band called “the Apostles of Vice”
Myspace: http://www.myspace.com/apostlesofvice
Dust and Izzy are both musicians as well. Matt who started CommandSurf with Izzy is also a musician. I was suprised to find out how many musicians and artists flocked to the surf and hyip community. Probably because most musicians are great slackers when it comes to “day jobs”
I was in 12Dailypro, but only $24, back then I was just using surfs to promote my websites and never believed all the hype that you could make thousands of dollars autosurfing. Plus, after years of touring andplaying in bands, I made a lot of connections and so I buy and sell collectible guitars (as well as antique cars and motorcycles). 144% in 12 days didn’t really appeal to me because I’m used to having “want lists” from muscians friends and I do the guitar shows, etc and I can easily double my money in a few days picking up some Les Paul Custom or Fender Strat and turning it to one of my clients. Plus, it’s all under the table, cash only business.
I really cleared up two years ago when the guitarist from Poison (CC. Deville) was in Daytona and he had a crack problem and he sold me a bunch of his guitars really cheap so he could buy drugs. I tripled my money on a few of his BC Rich and Charvel guitars… LOL, I had 6 guitars of his that were used in that “Talk Dirty to Me” video…. the neon green Jackson and the pink charvel I had sold in a half an hour. I only have four guitars I won’t part with, a Mark Minarik ‘Goddess’ he built custom for me, serial #000000007 (signed), a 1984 hand made BC Rich Mockingbird made by Bernie Rico Sr, an Ibanez Iceman I got from Daron Malakian of System of a Down and my PRS (Paul Reed Smith) Dragon. I guess I’d take $25K for each of them, but nah, I only have 40+ more that are expendable.
by coopersview
Hi C4G,
Now you tell me about Israel and Matt, LOL! Aren’t we a bunch of ……May be we should form a club called Musicianshyip Club.
OK I have book-marked your website and will explore more your music. I am very adventurous too! (That always raises eyebrows of my fellow classical musicians.)
I love playing guitar but had to give it up because of my small hands and my teacher said I needed long nails to play guitar which is a “no no” if you want to play piano. So you are a guitar etc. collector. And you are so proud of it when you talked about your collectible guitars. Well I used to have 3 pianos in the house, which was the most I could keep. Now I only keep my 6’8” German semi-concert grand piano. I am more into jazz nowadays and my dream is to live in New Orleans one day and be among the best jazz musicians there.
We all have different stories to tell, don’t we? I am sure everyone got into HYIP world by chance. It was 3 good years for me with turbulent rides and experience and after my serious thoughts, I will be leaving this HYIP world and pursue my other venture.
Life is just like an opera; we go from one scene to the next and never look back. Now it is time for me to close the curtain on my HYIP venture and open a new curtain for my next new one.
I wish you all the best in whatever you are pursuing. I will visit here from time to time and will post my comment (like today) if some topic intrigues me.
Continue to pursue your wildest dream! You will be in my mind always.
JMV
by C4G
I studied some classical guitar in college, mainly influenced by Julian Bream and Segovia. As far as Jazz, I’m a huge fan of Coltrane and Charlie Parker but my favorite jazz guitarist is Gabor Szabo (now deceased). I think Dusting plays rock music and Israel is DJ or a remixer.
I was really serious about starting a GPT (Get Paid To) site dealing with music. I’d never dare start any type of ponzi program that relies on new members to pay old members. There would definitely have to be some outside income… I run a free Musicians Classifieds, it’s been up for 2 1/2 years and gets alotof traffic.
I also have a few “web dirctories” and had thought of starting a GPT program where members would review and categorize new submissions for a payment. The site is BZZU
You know, the majority of these surf admins ar pretty smart, resourceful and driven, I just don’t understand why someboy doesn’t put something legit together. I guess my PTP (Paid to Post) forum here is a good example of using advertising revenue to pay members. It’s not a lot of money, but hey, every dollar counts, even if you’re wealthy.
by coopersview
Hi C4G,
I just want to say that I really like you, not because of your multi-talents and you being a musician, but your integrity and your special characters.
If I remember right, you were the one to speak out and expose 12by12 and caused an uproar. That was the first time you caught my attention and at that moment I was wondering, “who really was that guy Code4Gold”?
(I wish I had known you earlier and followed your blog, so that I did not have to lose money in 12by12 big time. The reason I lost so much in 12by12 was I fell for the reputation of DadnDave that was being spread throughout the blogs and forums. Since 12by12 experience I was getting smarter and began to analyze things more with reason and not with my emotion. Oh by the way that saved me from repeating the same mistake of falling for the trap of Andy of XLO.)
You are so knowledgeable and are so “multitasking”. (I can only do one thing at a time and live one day at a time). In my view, it is very rare for a musician. You are intelligent, you write so well, you reason well, you are a real entrepreneur, you are so disciplined, (just look at how much you put in 12dailypro LOL!!) You have a very good heart. (Yes that fits the characteristic of a musician.) Yet on the other side, you are a daredevil (just look at your music and how you bought those guitars real cheap from someone who was so desperate. LOL!) You are not afraid to express yourself and speak up for justice. You have the trait of a superhero. You have become someone who is so fascinating to me and you are someone whom I can respect.
Just to let you know Dave, I like you a lot!!
JMV
by C4G
Wow, thanks for the wonderful compliments!!! Yeah, I was the one who went against Dave Cannard last July when he fell behind on the first cycle of payouts. I’d been in DadnDaves from October 2005 and never received a single payout from that program, plus I even paid for banner advertising on DadnDaves and never got my ads or my money back. I figured I’d try 12By12 to make back my losses in DnD, but when the first payouts fell two weeks behind schedule I actually reported him to E-Gold and they blocked his account. Boy, a lot of people jumped on me for that one, but it was worth it to watch those same people who flamed me piss and moan on Talkgold and MMG about how much money they lost months later.
I think the majority of the C4G forum members take any program as a “game”, the minute somebody tries to push it as anything else, it sets off a warning to most of us who know better than to give he benefit of the doubt to people who make lofty promises.
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[…] Finally, remember Pheonixsurf and the young guy Johnathan Mikula, seems finally after last years ponzi. Formal Charges have been issued by SEC, for more details check out Code4gold blog here […]