Jackson Jambalaya

 The Securities and Exchange Commission issued the following statement on August 1. 

The Securities and Exchange Commission today charged 11 individuals for their roles in creating and promoting Forsage, a fraudulent crypto pyramid and Ponzi scheme that raised more than $300 million from millions of retail investors worldwide, including in the United States. Those charged include the four founders of Forsage, who were last known to be living in Russia, the Republic of Georgia, and Indonesia, as well as three U.S.-based promoters engaged by the founders to endorse Forsage on its website and social media platforms, and several members of the so-called Crypto Crusaders—the largest promotional group for the scheme that operated in the United States from at least five different states.

According to the SEC’s complaint, in January 2020, Vladimir Okhotnikov, Jane Doe a/k/a Lola Ferrari, Mikhail Sergeev, and Sergey Maslakov launched Forsage.io, a website that allowed millions of retail investors to enter into transactions via smart contracts that operated on the Ethereum, Tron, and Binance blockchains. However, Forsage allegedly has operated as a pyramid scheme for more than two years, in which investors earned profits by recruiting others into the scheme.  Forsage also allegedly used assets from new investors to pay earlier investors in a typical Ponzi structure.

Despite cease-and-desist actions against Forsage for operating as a fraud in September 2020 by the Securities and Exchange Commission of the Philippines and in March 2021 by the Montana Commissioner of Securities and Insurance, the defendants allegedly continued to promote the scheme while denying the claims in several YouTube videos and by other means.

"As the complaint alleges, Forsage is a fraudulent pyramid scheme launched on a massive scale and aggressively marketed to investors," said Carolyn Welshhans, Acting Chief of the SEC’s Crypto Assets and Cyber Unit. "Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains."

In addition to charging the four founders, the complaint, filed in United States District Court in the Northern District of Illinois, also charges Cheri Beth Bowen, of Pelahatchie, Miss., Ronald R. Deering, of Coeur d’ Alene, Idaho, Samuel D. Ellis, of Louisville, Ky., Mark F. Hamlin, of Henrico, Va., Carlos L. Martinez, of Chicago, Ill., Alisha R. Shepperd, of Dunedin, Fla., and Sarah L. Theissen, of Hartford, Wis., with violating the registration and anti-fraud provisions of the federal securities laws. The SEC’s complaint seeks injunctive relief, disgorgement, and civil penalties.

Without admitting or denying the allegations, two of the defendants, Ellis and Theissen, agreed to settle the charges and to be permanently enjoined from future violations of the charged provisions and certain other activity. Additionally, Ellis agreed to pay disgorgement and civil penalties, and Theissen will be required to pay disgorgement and civil penalties as determined by the court. Both settlements are subject to court approval.

The SEC’s investigation was conducted by Liz Canizares and Pamela Sawhney of the Crypto Assets and Cyber Unit and supervised by Amy Friedman and Ms. Welshhans. The litigation is being conducted by Patrick Costello, Christopher Carney, Ms. Canizares, and Ms. Sawhney and supervised by Olivia Choe. The Commission appreciates the assistance of the Securities and Exchange Commission of the Philippines and the Montana Commissioner of Securities and Insurance.

Kingfish note: The complaint charges Bowen with acting with two other Americans to promote the Ponzi scheme in the United States.  The complaint mentions her several times: 

Bowen, age 44, is a resident of Pelahatchie, Rankin County, Mississippi. Bowen is a co-founder of the Crypto Crusaders group and a Forsage promoter. She has been a participant and co-host of many of the webinars hosted by Martinez on the Crypto Crusaders YouTube channel. Bowen has prior experience participating in MLM projects. Upon information and belief, she holds Forsage Ethereum IDs XX7957 and XX9418; and Forsage Tron ID XX1742; among others. Bowen declined to respond to the Commission’s subpoena during its investigation or appear for testimony....

Since the summer of 2020, Martinez hosted twice-weekly webinars on the Crypto Crusaders YouTube channel. On Mondays, he held webinars for individuals who had already invested in Forsage. These “training” webinars often included testimonials, as well as tips on social media marketing and responding to investor questions. Shepperd, Theissen, Bowen, and Deering regularly appeared on these webinars as “leaders.” On Wednesdays, Martinez hosted his so-called “Weekly Webinars” that were aimed at recruitment. These typically included a 30-minute presentation on Forsage Ethereum (and later Tron), followed by testimonials from Forsage investors within the Crypto Crusaders group. The testimonials uniformly highlighted how much the person had invested and how much they had earned in a short period of time....

In a webinar entitled “Weekly Forsage Training 2-17-2021,” Bowen told viewers she joined Forsage as a Level 8 for $3,100 on June 8, 2020 and had made $1.1 million in eight months.....

Two days after that, Bowen hosted a webinar on the Crypto Crusaders’ YouTube channel where she advised her audience not to list Forsage’s name in any Facebook posts because, according to Bowen, people would Google Forsage and see videos and articles that it was a Ponzi scheme....

Pig lady? Yup. Ms. Bowen is known for her pigs in Pelahatchie.