Fake Charity?

Practical and Practice issues for Professionals who practice in the area of taxation. Moral, social and economic issues relating to taxes, including international issues, the U.S. Internal Revenue Code, state tax issues, etc. Not for "tax protestor" issues, which should be posted in the "tax protestor" forum above. The advice or opinion given herein should not be relied on for any purpose whatsoever. Also examines cookie-cutter deals that have no economic substance but exist only to generate losses, as marketed by everybody from solo practitioner tax lawyers to the major accounting firms.
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Gregg
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Fake Charity?

Postby Gregg » Mon Apr 01, 2013 2:11 am

Some of you may have been following the HYIP scam Profitable Sunrise and one of the major promoters, Nanci Jo Frazer.

Nanci Jo centers her web on an affinity fraud website, FocusUp Ministries, Inc, which on many pages states "is a 501(c)3 Charity" etc... at one time there was an EIN listed, but when someone checked that it turned out to be the one for an unrelated charity that had never heard of Nanci Jo.

In just this latest scam, she has a downline of 17,000 people (yes, that stunned me too) and they have contributed to the scam (not the fake charity) at least $11 million.

Nanci Jo has not been a good scammer, and her websites all tie into eventually "get your congregation to invest with us, and you get commissions for your organization", the most egregious one is a plan where they sell life insurance, split the commission with the pastor/leader of a group, designate FUMI and/or the other group as a 50% beneficiary on the policy...

So, I got peeps on her, she's in Ohio where I have connections, and before long I'm sure she's gonna have to explain all this to a Judge.

My question is, how much trouble is she in for faking the EIN of a charity? Is anyone going to have to go back and notify the people who took a deduction? I'm guessing that list alone would turn up enough tax cheating to make a career for someone in CID...
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Re: Fake Charity?

Postby Gregg » Mon Apr 01, 2013 4:14 am

Well, someone corrected me and it turns out my numbers in her downline were wrong.

According to the Ohio Cease and Desist Order against Profitable Sunrise, Inter Reef and Raman Novak, the figures for Nanci Jo's referrals are 71,000 members representing $33 million.

And strangely, although the C&D goes to lengths to describe the ativities of Nanci Jo and FUMI, neither of them are named as respondents. That kind of makes me hope that they're going to deal with her in another document, maybe an indictment?
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Re: Fake Charity?

Postby GlimDropper » Tue Apr 02, 2013 4:42 pm

I certainly don't have the answer to Gregg's central question but look forward to other's opinions. Nanci Jo Frazer is a piece of work, she's gone from MLM jumping beauty queen housewife to an ordained minister serial ponzi scheme promoter. It would be very hard to overstate just how contemptible I find her "pozies for Jesus" sales pitch to be and I'm having a hard time not encouraging all of her many victims to file a class action civil suit against her on every web forum and social media site I participate on (see, I just did it again).

Just a short introduction to Nanci Jo's promotional efforts for what without her help would have been a fairly run of the mill HYIP ponzi game. "Profitable Sunrise" pretended to be legitimate hard money lenders who charged businesses and individuals 3% interest per day for the loans it issued but even with this trans-loanshark like interest rate they also only loaned to people who had collateral to back the loan (this means there's no risk). This clearly explains how the company owner "Roman Novak" could afford to pay his investors a 2.15% compounding daily ROI. Oh, and Roman, just like Nanci Jo is also a very fine and committed Christian.

Here is a small set of slides from a PowerPoint presentation of Nanci Jo's NJF Global Group's sales pitch. If you're interested here is a YouTube video with a 12 minute clip from that presentation. This is a much longer (58 min) interview with Nanci Jo where, among other highlights Nanci Jo reveals (about the 11 minute mark) that after the government closed down a previous program she'd been involved in (Zeek Rewards) she was very glad and greatly comforted that Profiatable Sunrise was based off shore (cause that makes it safe and all that). This is an Archive dot Org link to Nanci Jo's FocusUp Ministries donation page as it appeared prior to Profitable Sunrise's sunset. I'm pretty sure I can count on one finger the number of times I've seen a 501(c)(3)'s donation page with the following warning:

Taxes: As a donor, you must have a written acknowledgement from FocusUp Ministries before any single $250 or higher contribution on his/her federal income tax return...

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Re: Fake Charity?

Postby GlimDropper » Thu Apr 25, 2013 4:06 pm

WTOL in Toledo is running a story about Nanci Jo tonight at 11. You have to love this YouTube clip of a teaser they're running. I'm sure the main story will be on WTOL's website tomorrow.

The Byran Times ran a story on this situation, it's a subscription site but someone was kind enough to send me the text. Fair use considerations:

Sun setting on investors Profitable Sunrise group has local tie



Posted: Thursday, April 25, 2013 12:00 am | Updated: 1:29 am, Thu Apr 25, 2013.
By LYNN THOMPSON Times Reporter | 0 comments
By LYNN THOMPSON
Times Reporter

Two men on the other side of the ocean stand accused of running an international Ponzi scheme, with an alleged accomplice in Bryan.

On March 14, the Ohio Department of Commerce Securities Division issued findings against the Birmingham, England-based Profitable Sunrise company and its owner, Roman Novak.

Bryan resident Nanci Jo Frazer was also named in the findings, along with her FocusUp Ministries, Inc., which claims, "Your prosperity is increased when you use the Jesus."

<Snip>

Securities division findings indicate that the "NJF Global Group" based in Bryan and allegedly managed by Frazer, solicited investments on the Novaks' behalf.

Frazer, who spoke to The Times Wednesday afternoon but asked not to be directly quoted, explained that she was just one many victims in a much larger cyber bullying scheme that targeted Profitable Sunrise to enhance the online status of other websites.

She alleges that the persistant online attacks led to founder Roman Novak's self-inflicted exile with Profitable Sunrise investment funds.

<Snip>

He declined to comment on whether criminal charges will be filed. "The investigation is ongoing," he said.

Ginty also pointed out that Ohioans who may have invested with Profitable Sunrise, its parent company Inter Reef Limited, Roman or Radoslav Novak, or anyone affiliated with them should call the Ohio Division of Securities Investor Protection Hotline toll free at 1-877-683-7841 or file a complaint with the division online at www.com.ohio.gov/secu/.
[Link to the Byran Times]

So now Nanci is claiming that the fictional Roman Novak (who was running this HYIP ponzi) fled with the money into self imposed exile because of his internet critics. I hope she sticks with that story and continues to accept zero responsibility and show no remorse.



And a late edit to add a link to the story on the WTOL website.

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Re: Fake Charity?

Postby Gregg » Sat Apr 27, 2013 11:23 pm

Frazer, who spoke to The Times Wednesday afternoon but asked not to be directly quoted, explained that she was just one many victims in a much larger cyber bullying scheme that targeted Profitable Sunrise to enhance the online status of other websites.


That is staggering, a multi million dollar international company generating profits enough to pay out 2.17% daily, brought down by an internet forum and a blog.
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Re: Fake Charity?

Postby notorial dissent » Sun Apr 28, 2013 11:07 am

More under the "Yeah, Right!!" qualification, pretty much like Fraser is an innocent victim.

They were such a big that they couldn't afford a half way decent attorney to defend against "an internet forum and a blog"????!!!
The fact that you sincerely and wholeheartedly believe that the “Law of Gravity” is unconstitutional and a violation of your sovereign rights, does not absolve you of adherence to it.

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Re: Fake Charity?

Postby GlimDropper » Thu Jul 11, 2013 5:05 am

Turning slowly but grinding fine, the Ohio Attorney General's press release:

Williams County Charity and Solicitors Charged for 'Profitable Sunrise' Pyramid Scheme

7/9/2013

(BRYAN, Ohio) – Ohio Attorney General Mike DeWine and the Ohio Department of Commerce today announced a joint lawsuit and a temporary restraining order against Nancy Jo Frazer, David Frazer, Albert Rosebrock, and their charity, Defining Vision Ministries, formerly known as Focus Up Ministries, Inc., for violations of Ohio’s charitable and securities laws.

“This case involves a worldwide pyramid scheme that defrauded Ohioans and others out of millions of dollars,” Attorney General Mike DeWine said. “These individuals brought the scheme to Ohio by promising outrageous returns and telling investors that their donations and investments would help charities. We will continue to work closely with the Department of Commerce to hold the defendants accountable for their actions.”

Profitable Sunrise is an international pyramid scheme recently shut down by federal and international authorities. Profitable Sunrise claimed to be a Christian company that would use investment proceeds to help charities and provide investors with large returns. According to the state’s complaint, the Frazers, of Bryan, and Rosebrock, of Sherwood, used Focus Up Ministries’ status as a charity to solicit donations and investments into Profitable Sunrise. They also claimed that invested funds would compound at 1.6 to 2.7 percent daily, growing at annual rates of 5,000 to more than 75,000 percent.

The complaint also alleges that the defendants used funds donated to Focus Up Ministries for personal expenses and other unlawful purposes. These included financing for personal business ventures, the purchase of a big screen television, no-interest personal loans, and compensation for agents who solicited on behalf of the Profitable Sunrise pyramid scheme. The complaint contains counts of misrepresentation, deceptive acts and practices, conversion, falsification, securities fraud, and unlicensed sale of securities, among other violations.

In the lawsuit, the state requests that the defendants be prohibited from soliciting for or having any involvement with any charity in Ohio and from engaging in any securities activities in violation of Ohio law, in addition to restitution for investors, relief for charitable beneficiaries, statutory penalties, fees, and punitive damages.

A preliminary injunction hearing has been scheduled for July 22 at 10 a.m. in the Williams County Common Pleas Court.

The Attorney General’s Office is interested in hearing from individuals who invested in Profitable Sunrise or were solicited to invest by the defendants. Those with information should call the Attorney General’s Charitable Law Section at (614) 466-3181.

Documents
Lawsuit
Motion for Temporary Restraining Order
Temporary Restraining Order
Media Contacts
Dan Tierney: 614-466-3840
Kate Hanson: 614-466-3840

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Re: Fake Charity?

Postby wserra » Thu Jul 11, 2013 12:54 pm

"A wise man proportions belief to the evidence."
- David Hume

jameslparis

Re: Fake Charity?

Postby jameslparis » Tue Oct 08, 2013 1:30 am

My new book focuses on several of the Profitable Sunrise leaders, but mostly on Nancy Jo Frazer. It also contains exclusive court audio from the August 30 hearing. There is 2 1/2 hours of testimony and much of it from Nancy Jo Frazer herself.
Last edited by Gregg on Fri Oct 11, 2013 3:40 pm, edited 1 time in total.
Reason: removed commercial link


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