Scam Theatre: Inside an Online Trading Crime Ring That Grifted Millions from Mum-and-Pop Investors

Scam Theatre: Inside an Online Trading Crime Ring That Grifted Millions from Mum-and-Pop Investors

It was supposed to be an easy gig. Jason Glick had been acting for more than 30 years, mostly in stage productions, but the occasional on-screen commercial work helped cover the bills, and the shoot for the Quantum Code paid too well to pass up. In a half-hour pitch video with more than 4 million views on Facebook, the graying Oregon-based actor plays “Michael Crawford,” CEO of a company called Quantum Code, who tells the audience he’s known as the “Wall Street Wizard” and the “Nicest Rich Guy in the World.” He shows off his revolutionary new investment software, which he claims is “guaranteed to make you money as long as you keep it on.” If you invest now, you — yes, you — can be one of the lucky few to beta test the system, explains “Crawford.” He flashes screenshots of fat bank account balances, posing in a wood-paneled office, by a swimming pool, and in the cabin of a private jet. The broad-shouldered Glick remembers squeezing into the small aircraft, trying to read the teleprompter as it lurched through the sky. “I’m like, cold sweating, trying to fight off air sickness. While I’m talking about my life of ease and luxury.”

He says he felt a little “gross” about the offer afterwards, but didn’t give it too much more thought until the threats started. Since the videos had no credits, “I have no idea how they found me,” says Glick, but he says he began to receive “hate mail” via his LinkedIn account. He says a few of the angry notes were from financial professionals “offended” by the get-rich-quick scheme’s unrealistic promises. But others who reached out said they had lost money on Quantum Code — a lot of money. Some of them were despondent, though some, he says, just sent “‘I’m going to rip off your head and shit down your throat’ kind of stuff.”

“I hate that my portrayal caused any kind of suffering,” says Glick, who adds that the ordeal “changed the way I accept jobs.”

Along with Coronavirus, the past year brought a tidal wave of new online investors, as apps like Robinhood drew millions of first-time users, hungry for opportunity in an otherwise-bleak pandemic economy. Any kind of investment can, in theory, be hazardous, but there are other perils that come with so many rushing in with their wallets out: the rise of the retail investor coincides with a toxic bloom of outright scams, ponzi schemes, and cryptocurrency ripoffs. Like the Quantum Code, many of these offers might immediately seem like simplistic cons built around the oldest tricks in the book. But even the shallowest get-rich-quick schemes often grow from deep, elaborate roots.

In November 2020, the man who’d commissioned the Quantum Code video — Antonio Giacca, an Italian music producer and marketer living in Florida — pleaded guilty to criminal wire fraud charges. It was just one case in an ongoing, multi-year series of civil and criminal actions by U.S. authorities targeting a ring of prolific scam promoters, a motley group of internet predators who, in Skype conversations captured by regulators, joked about targeting the elderly, openly referring to their own solicitations as “scams” that “ruin lives.”

Between 2013 and 2018, Giacca and his fellow marketers made at least tens of millions of dollars advertising cryptocurrency cons, and recruiting investors for a little-known financial instrument called “binary options,” which was primarily used as a front for flimflam. Digging into these cases reveals a shocking culture of greed, and the often-absurd details of scamming’s creative side, a story about how people craft lies to tell the public, but also how they craft lies to tell themselves. The mission, conscripting copywriters, producers, and actors, was to put a rosy, aspirational public face on a shadowy, ever-shifting, international fraud industry, which continues to steal billions from people around the world every year.

“The Customers Come First Fund”

Glick and at least a handful of other Portland-area actors were subpoenaed and deposed by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission in 2017. The actors had starred in videos advertising apps with names like Cash Code, Binary Cash Creator, Secret Millionaire Society, and Golden Goose Method, each of which offered automated, easy to use, push-button money-making systems, supposedly using some genius new trading algorithm or financial loophole. According to SEC and CFTC complaints, after watching the infomercials, at least tens of thousands of people clicked through, setting up trading accounts with off-exchange brokers in boiler-room operations, who conned, cajoled, and pressured clients into investing ever more cash. Contrary to the pitch videos’ opulent promises, customers not only didn’t profit, they almost always lost everything.

Of course, people were getting rich off these investment systems, just not in the way portrayed by the ads. Links to the videos had been sent out hundreds of millions of times, mostly via massive email spam lists, the product of a loose network of marketers who ran a sort of media mill, collecting commissions for each victim that fell for their gold-plated tall tales. The marketers, a group of men mostly based in Florida, each ran their own operations, though they coordinated activities, promoting each other’s ad campaigns and meeting up once a year at a convention in Las Vegas. According to the CFTC, one of the marketers, a Jacksonville man named Michael Shah, “sent more than 60 million mass emails” in just one seven-month period, and in total, earned more than $US17 ($22) million in commissions through his fraudulent marketing work.  

There was Giacca, now 42, an Italian DJ and music producer with a pointed Roman pout, 25,000 Instagram followers, and dance tracks with more than a million YouTube plays. (Giacca did not respond to multiple email interview requests.)

Maybe the most prolific spammer in the bunch was Tim Atkinson, a fast-talking, Lamborghini-driving hotshot based in Miami Beach, who sold himself as a direct sales and marketing guru, and hoped to eventually pivot his video scamming into a film career. Atkinson didn’t respond to multiple interview requests for this story. But according to a bio on an archived version of his personal site, in the early 2000s, he struggled with cocaine addiction while working as a mortgage broker, surviving overdoses and a brief stint in a “psych ward.” On his site, Atkinson claimed he was forced to reevaluate his life after the financial crisis wrecked his business in 2008, eventually founding his online marketing company, All In Publishing, which would later become a central focus of SEC and CFTC investigations.

Atkinson, Giacca, and the other marketers communicated through private Skype channels, where they organised product launches, blew off steam, and generally maintained a tone of giddy indifference towards their actions: Take this exchange captured by U.S. regulators, in which Atkinson joked around with Giacca, suggesting he start a “Customers Come First Fund,” a “charity” for all the people who’d gone broke on their previous offers. “A fund raiser for them,” agreed Giacca, “to put them back on track, so we can scam them again.” Atkinson replied, “LOL exactly!” The marketers could, wrote Giacca, “show them that there is hope, then take it all away one more time lol.” Atkinson answered, “just ONE more time hahahaha… love the slogan son!””

They were scam-happy and high on the hog; according to one CFTC complaint, in another conversation between the marketers, Atkinson bragged to the group that he’d created an ad “where the kid was dying of cancer . . . and dad was given the [investment] system so he could make money to save his kids’ life.” The ad did “great,” added Atkinson.

Atkinson and the other marketers built a big, corny Potemkin village of fake entrepreneurs and cancer kids, phony millionaires and smiling seniors finally able to retire after taking a chance on some secret investment system. One campaign claims the advertised software was developed by a hacker “boy genius” named Daniel Rosenberg who has the “12th highest IQ ever to be recorded.” Two other members of the marketing ring, Ronald Montano and Travis Stephenson, pushed ads for a system called “Larry’s Cash Machine,” which featured a pastor character claiming he used his trading profits to build a new church. In the videos and spam emails, customers were told the returns were “guaranteed,” signing up was “risk-free,” and they were always shown lots of what the marketers called “social proof” — that is, various actors posing with fake giant checks, excitedly showing off fake live trading results, as they appear to effortlessly make thousands of dollars in seconds.

The marketers’ falsities and bogus investment advice were central to the legal cases later brought by regulators, who edited them into scam supercuts, lengthy video tours through the toney exurbs of the collective American aspirational psyche, a gallery of luxury SUV-baited booby traps set for anyone naive enough to believe there might actually be, as Glick portrayed, a “Nicest Rich Guy in the World,” looking to help out ordinary folks. The offers targeted “vulnerable populations,” says a senior CFTC attorney in an interview with Gizmodo. Often that meant older people who might not be so web savvy, but it could be anyone in financial desperation, who was “looking to make money to pay their bills, to get back above water.”

Shots and angles

Connecting the Florida marketers and the Portland actors was Bill Berry, a freelance producer with a background in music composition and making videos for churches. In Facebook photos, Berry appears as an easygoing, sturdy looking, middle-aged dad, and in a phone interview, his voice is low and gravelly as he admits, “hindsight being what it is, I guess I should have questioned more what these projects were all about.” Unlike the actors, who were ultimately only deposed, Berry and his Oregon-based company, Berry Mediaworks, settled civil charges brought by the SEC and CFTC in 2018, agreeing to cooperate in their investigations and pay back more than half a million dollars in ill-gotten gains.

Glick described Berry as locally “well respected and well liked.” Portland’s dramatic community is pretty small, says Glick, and “The word around town for the actors was like, ‘hey, if Bill calls you, that is like the easiest check in the world.’” Berry had personally auditioned and hired the performers who played the ads’ fake CEOs and folksy millionaires, and according to Glick, the producer paid for an attorney to represent the actors in their depositions.

Berry’s a contractor and didn’t invent the content of the ads; they were penned by the marketers or copywriters, and passed on to him. He claims he knows nothing about finance, and despite making hundreds of them, didn’t think too hard about what was on the other end of the videos. “We always said this stuff’s so corny,” he said about the out-there storylines and wild promises of profit, but in his reasoning, that didn’t mean people were necessarily getting ripped off. “Our entire focus,” he says, “was just on trying to get a good performance out of the actors, get good audio, and find good shots and angles to show off the props.”

According to court documents, though he might not have known all the specifics, Berry did know his productions were bullshit. For example, he helped create screenshots of fictitious trading results and sky-high account balances to wow viewers. Not that he necessarily liked it; in Skype conversations obtained by regulators, he commiserated with a copywriter about their employers’ shady ways, with Berry lamenting that one of the marketers was a “giant scam artist.” Berry was specifically referring to Ronald “Ronnie” Montano, owner of Montano Enterprises — who in 2012, introduced Atkinson, Giacca and the rest of the gang to a highly lucrative new business, a chance to recruit customers for niche trading platforms specialising in a then-obscure financial instrument called binary options.

Berry says in his earliest videos for online marketers, he’d acted as his own pitchman, reading scripts for simple, talking-head testimonials about how some product or investment opportunity had changed his life. But once binary options were in play, everything changed. Before long, Berry became the go-to guy for Shah, Atkinson, Giacca, Montano, and any other marketers who wanted to bring fake company founders to life. Soon he was hiring actors, renting jets, and flying out to shoot in places like Los Angeles, Miami, and the Virgin Islands, in what he describes as “almost a competition” between marketers to create the most elaborate pitch. His bosses were swimming in cash and they owed it all to binary options.

Binary Options

In an email statement to Gizmodo, CFTC Division of Enforcement Director James McDonald writes that in fiscal year 2020, the agency’s pursuit of binary options fraudsters led to “charges alleging that nearly two dozen individuals and entities bilked nearly $US400 ($513) million from customers or prospective customers.”

Binary options are basically up-or-down, rapid bets on the performance of asset prices. So you could bet, say, that Tesla stock would be above or below a certain price in three minutes. If you bet wrong, you lose the money you stake on the option. If you predict correctly, you collect an agreed-upon payout, usually somewhere between 50% and 100% of what you wagered. You can take out a binary options contract on basically anything that’s traded, betting on the tiny, short-term movements of securities like stocks, or commodities like metals and oil. But unlike actually buying a share of stock, which can, in theory, go up or down in value by any amount, binary options investors aren’t actually purchasing anything, and each “trade” is an all-or-nothing proposition. As one binary options broker told the Times of Israel in 2016, “It’s gambling and we’re a bookie.”

Once you got past the absurd and chaotic stories, the investment systems advertised by Atkinson, Montano, and their associates each claimed to have a different automated method of gaming binary options — in the Quantum Code video, Glick boasts about the “near quantum speed” of its algorithm — or a particular binary niche, like betting on minute changes in the price of wheat.

Even legal, regulated binary options trading is pretty risky, but according to SEC and CFTC complaints, videos for systems like Quantum Code or Larry’s Cash Machine led customers to off-exchange brokers in call centres around the world, whose sale of investment services to people in the U.S. is illegal. Managing each investor by phone and through various apps, the brokers used high-pressure sales tactics and phony trading results, convincing customers to keep depositing more money, with some supposed big payout always just over the horizon. Unbeknownst to customers, the brokers themselves were the counterparties to any bets made — meaning, like a casino or bookie, the entire business model depends on clients losing their money.

The odds and payout structure of these trades made it almost impossible for customers to win. Even if they did somehow win (or wanted to cut their losses) the brokerages often just wouldn’t give them any of their money back. And if a given investor’s account ever managed to beat the odds, some brokers just directly manipulated trading conditions to ensure investor losses. In other cases, it wasn’t totally clear whether any trading of binary options ever even occurred. Sometimes, as one former binary options broker told CTV News in 2018, “There are no trades … There’s no anything. It doesn’t exist. It’s just a platform, like a video game.” The apps advertised by marketers like Montano, Giacca, and Atkinson were usually flimsy cutouts, with some kind of display screen that supposedly tracked trades and account information, though in some cases, the advertised software simply did not exist, the campaign a pure ploy to reel in marks.

In a 2016 infomercial for Atkinson’s “Push Money App” system (watched more than 500,000 times on Facebook), one fake user, a longhaired man identified as “Rodney” claims he’s making “over $US1,000 ($1,282) an hour” with the software. A spam email promoting the video told potentially wary recipients, “I know last year you were scammed with the Binary Options bots. Trust me, this is not one of those scams.” However, despite the email’s assurances, it was, in fact, one of those scams.

Gaylen Ray Richards of Texas told Gizmodo he saw an ad for Push Money App and put down $US250 ($320), the minimum initial deposit. After signing up with the recommended broker, he made the first couple suggested trades, and then — poof — his money was gone “almost immediately.” Other Push Money customers didn’t get off so easy, like Richie Oliva, a 43-year-old single father of four, who works in hospital security in Florida. Oliva initially thought his “investment” was doing well; according to his broker, he was making thousands, but he was told that to trade at higher tiers, he’d have to keep depositing more. In total, says Oliva, he was taken for about $US32,000 ($41,018). It’s not clear if any trading was ever actually done on his behalf, or if the whole thing was an illusion, a drama of exhilarating highs and devastating lows enacted onscreen and over the phone, to grift an audience of one. “It put me in a bad financial situation” he says. “My kids suffered from it.”

“The Wolves of Tel Aviv”

Offers like Push Money App and Quantum Code fed a massive binary options business that thrived for almost a decade, primarily based out of Israel, where the industry employed thousands. The FBI, the Better Business Bureau, and multiple financial regulators have issued warnings about binary options in recent years. But outside U.S. authorities and the scammers themselves, there’s probably no one more familiar with the characters and scuzzy details of the binary game than the Times of Israel’s Simona Weinglass, whose relentless reporting was essential to making public the extent and mechanics of the fraud.

Her 2016 investigation, “The Wolves of Tel Aviv: Israel’s vast, amoral binary options scam exposed,” kicked off years of coverage into what she calls a “bizarre financial netherworld,” where the brokers used fake names and the companies didn’t belong to any particular country, a dirty open secret that was just too profitable for anyone to fix. The Knesset officially banned binary options in 2017, at least partially due to her reporting, though Weinglass has continued to be critical of Israeli authorities’ enforcement efforts, which she called “impotent” and “wishy-washy” in a recent video. The reporter added that it was a “breath of fresh air” when in 2019, one Israeli binary options CEO, Lee Elbaz, was sentenced to 22 years in prison by a federal judge in Maryland. (Elbaz has since appealed.)

For Weinglass, the relief at seeing some justice done was personal. Her investigations laid bare an industry’s lucrative secrets, and in a phone interview with Gizmodo, she says individuals associated with the binary options business have repeatedly threatened her and her family. “When the FBI started arresting people, the threats stopped. I don’t know if that’s a coincidence,” she says, “but I think these people are cowards. And even the tiniest threat to them, some kind of enforcement, really puts them on better behaviour.”

It’s important to keep talking about this, says Weinglass, because despite years of cases brought by U.S. authorities against binary options scammers, “this industry has started up again, and especially since the coronavirus they’re recruiting,” she says citing ads she’s seen online lately.

Binary options, explains Weinglass, are less an individual scam than a single phase of a resilient, ever-shifting fraud industry, which morphs every few years, adapting to new regulations, advertising restrictions, and public scrutiny. The binary phenomenon, she says, grew out of the notorious online trade in scams related to the foreign exchange currency market, or “forex.” Making up the other half of the equation, she adds, “Many of the people who went into binary options previously worked in online gambling.” Authorities, online advertising platforms, and payment processors were starting to crack down on forex scams, which, in any case, were always “just really hard to understand,” says Weinglass. “So someone had the genius idea to take the investment aspects of forex and combine them with the excitement and simplicity of gambling. And they created this new product. And it just worked.”  

Out in front, driving the binary wave were the marketers, for whom, says Weinglass, “It’s just a maths problem. They’ll do anything. First they sold online pharma, then they’re selling all kinds of dietary supplements. They don’t even care what the product is.” Binary options became the thing: commissions were high, and enough of their audiences deposited money when compared to the cost of advertising. The maths made sense; they had every incentive to make recruiting binary options investors their life’s mission. “If horsemeat had been the thing that gave them the highest ROI,” says Weinglass, “they would have sold horsemeat.”

Easy Scammin’

“I love movies and I love storytelling,” said Tim Atkinson in a 2018 deposition, adding that he sees himself as a “visionary.” One binary options marketing campaign he was particularly “passionate” about, he told SEC and CFTC attorneys, was the “Secret Millionaire Society,” which woos viewers with the mysterious tale of a man whose father died, leaving him only a worn copy of The Great Gatsby. A clue left in the book leads to a decadent underground world of all-powerful financial elites, who control a “secret force” that “lurks” behind the world’s markets — a force he is willing to share, if you invest now.

Atkinson, who occupied a Miami penthouse with an ocean view, is a truly in-your-face character, a high-octane alpha dawg living the dream. “I got fucking pulled over twice today…and my licence is suspended. once in the lambo,” he told other marketers in one 2014 conversation captured by regulators. “He turned out to be a cretin of the highest order,” said Berry, “he’s just the most offensive guy. … He’s got all these tattoos, super jacked, loves to drive around and make offensive comments about women.” In Skype chats, Atkinson seems to have no illusions or qualms about the nature of his work, ridiculing U.S. customers who responded to his ads as “stupid,” and bragging, “I guess that’s why I love living here, easy scammin.”

He was in his early 30s when binary options became the primary focus at his company, All in Publishing. According to a CFTC complaint, between 2013 and 2016, the company and its associates launched at least 20 of their own binary options campaigns, and in some way promoted at least nine more, sending out up to hundreds of thousands of spam emails every day. Despite his seeming contempt for his audience, the creative side of the business really did seem to represent greater ambitions for Atkinson, who called the infomercials his “movies,” and has referred to himself as a “filmmaker.” He wrote many of the video scripts himself, or at least adapted them: One video was based on the plot of Runner Runner, a 2013 thriller starring Justin Timberlake with an 8% approval rating on Rotten Tomatoes.

Sometimes he concocted the stories with a copywriter, like Shmuel Pollen, who under the name “Mike Williams,” penned spam email copy and video scripts for All In Publishing. In an email to Gizmodo, Pollen claims he “had no idea this had to do with defrauding anyone,” and “needed the money as I had a growing family.” Pollen, pale with a short, bushy red beard, is a New Jersey rabbi, and claims he used a pseudonym to avoid interfering with his goal of becoming a prominent public spiritual figure. “I want to go on Oprah. I want to take it to the top,” he told an SEC attorney in an April, 2018 deposition.

In the deposition, Pollen lays out some of the salescraft behind his work, maybe explaining why some of the videos seem so unrelated to the concept of trading binary options: His pitch method is “blind,” he said, using “curiosity as the main tool. So, people will buy just to find out what the product is.” According to a 2018 SEC complaint, Pollen sometimes used a “‘random name generator’ available on Google,” to come up with monikers for the videos’ fake moguls and phony investment gurus. The underlying writing strategy, though, was pretty simple: “These opportunistic customers only respond to extreme displays of wealth and borderline ridiculous promises,” wrote Pollen in an email. “That is the only thing they respond to, that is what we give them.”

Ridiculous as the videos might have been, to Atkinson they were his very own scam masterpieces: He explained to regulators he wanted to “just focus 100 per cent on expressing my art,” so he delegated most of All In Publishing’s day-to-day operations to Jay Passerino, his quiet, businesslike “right-hand man” and “best friend,” who collected 15% of the company’s net profits. (Passerino did not respond to multiple email interview requests.)

Berry seems to believe Atkinson was a bad influence on Passerino, a square headed man with thick-framed glasses, who the producer described as a “basically a nice guy.” To give an idea of the dynamic here, in a deposition, Atkinson explains to SEC and CFTC attorneys that he refers to Passerino as “Jay Dizzle,” to give him some “mystique” among the other marketers, because his “character was somewhat very bland.” According to court documents, Passerino once asked Atkinson whether binary options customers were actually making any money, and was told it was none of his business. Passerino “did not inquire further.”

All In Publishing was specifically in the business of “affiliate marketing,” in which freelance agents drive customers to a company or product — in this case, binary options trading — for a commission. For every person who followed a link, watched the video, and then set up an account with a broker, a company like All In Publishing would usually receive between $US250 ($320) and $US450 ($577). The various marketers, like Giacca, Montano, Shah, and Atkinson, primarily worked together by acting as “sub-affiliates” for each other’s campaigns, extending the reach of the pitches to much larger audiences in exchange for a piece of the action. According to a CFTC complaint, the marketers “often ran contests with prizes … to encourage sub-affiliates and media buyers to promote their campaigns more aggressively,” regularly paying “thousands of dollars as prizes.” In one sub-affiliate sales contest, for example, Montano won a Rolex watch worth around $US25,000 ($32,045). In another, Atkinson jokingly offers autographed copies of one of Giacca’s albums as a last-place prize.

For the marketers, it was all goofs and fancy watches. But horror stories of the havoc binary options wreaked on ordinary lives were also coming into the public spotlight — stories like the tragic case of Frederick Felix Turbide, a Canadian man who died by suicide in 2016 after losing hundreds of thousands of dollars to binary options scammers. According to CTV News, in his suicide note, he told his family to “go after” the people who fleeced him. Despite their seeming indifference to the plight of their victims, the marketers did seem aware that authorities would eventually shut down the binary gold rush. In one sub-affiliate recruiting pitch, Atkinson wrote: “With the Binary market unstable I wanted to make sure we all cashed in BIG before the wave crumbles and crashes.”

The Wave Crumbles and Crashes

Even before the rest of the binary market fell apart, All In Publishing did. Perhaps tired of being called “Jay Dizzle,” Passerino had some kind of falling out with Atkinson and quit. After that, said Atkinson in a 2018 deposition, “My whole company pretty much all quit,” and without much of a business left, All In Publishing soon after ceased operations. But the wheels were already in motion, and on September 27, 2018, the SEC and CFTC filed civil charges against 11 individuals, including Atkinson, Passerino, Montano, Giacca, and Berry, and five businesses they controlled, alleging a range of violations of the Securities Exchange Act and the Commodities Exchange Act.

Like the actors, copywriters, or video crew they employed, some of the marketers claimed to simply be a creative conduit, who never directly took a single red cent from ripped-off consumers. In 2020, responding to the CFTC’s charges, Montano claimed he was “merely a professional affiliate marketer” making commissions from referrals (a position rejected in a recent opinion from a Florida district judge). In a separate 2018 deposition, Atkinson insists he is merely a “hype man” who “gets people excited about making money,” and has “no idea” what binary options are or how they work.

But U.S. agencies came heavy — they had emails, Skye chats, bank records, and a seemingly endless supply of quotes in which some marketers fully tell on themselves, admitting and celebrating their own dirty deeds. Some of those charged, like Berry, settled right away, and agreed to assist in regulators’ cases. And in June 2019, Atkinson and All in Publishing settled with regulators, agreeing to pay out a whopping sum of more than $US57 ($73) million in penalties, interest, and disgorgements. Passerino’s settlement orders him to pay out more than $US4 ($5) million in total. The decision against Shah obligated him to fork over more than $US22 ($28) million. Giacca settled in early 2019, agreeing to pay disgorgement and interest of a little more than $US2.8 ($4) million — though he would still end up facing criminal charges for his marketing work more than a year later. 

The terms of the settlements didn’t require the marketers to admit or deny the allegations against them, but the agreements permanently banned them from most investment-related business. The CFTC and SEC civil cases against Montano — who is alleged to have received about $US6 ($8).5 ($8) million in commissions, proceeds, and prizes for his work on binary options campaigns — are ongoing.

In the time between investigators taking an interest in All In Publishing and the marketers’ eventual settlements, people in their orbit had already started going to jail. The binary game had gone stale, with search results full of warnings about scams, fraud, and false advertising — but that didn’t mean the party had to end. “Once subpoenas started going out and people started getting charged,” says the senior CFTC attorney, “our understanding is that the scheme shifted.”

The Bitcoin Loophole

The CFTC started to get a better idea of what really happened at All In Publishing once they started taking a closer look at yet another Florida marketer, a bearded man with a surfer vibe named Daniel Fingerhut. According to the CFTC, Fingerhut, who’d worked for All In Publishing, lied in depositions and withheld evidence, allegedly telling Passerino he planned to “go on his boat” and throw a laptop computer requested by regulators “into the ocean.” It’s not clear what, exactly, was on that computer, or whether it actually went for a swim, but in any case, on May 5, 2020, the CFTC charged Fingerhut with violations of the Commodity Exchange Act in the Southern District of Florida. Per Gizmodo’s interview with the CFTC, once he learned they were onto him, Fingerhut went into hiding, eventually leading a process server on a “high speed chase,” and in an August hearing, he was found in civil contempt of court.

Apparently, when Jay “Dizzle” Passerino had abandoned All In Publishing, he’d taken Fingerhut with him. Less than a month later, Passerino and Fingerhut were back in business, marketing investment scams for two Israeli men, Itay Barak and Tal Valariola, also charged by the CFTC with civil Commodities Exchange Act violations last year. Neither Barak nor Valariola responded to multiple email interview requests, though reportedly, they both come from notable families: Valariola is the son of a retired police commander who once led a financial-crime investigative unit, while Barak’s father is a former director of several publicly traded Israeli companies.

Barak and Valariola’s Tel Aviv-based business, Digital Platinum, is alleged to have originally acted as an intermediary, connecting the marketers — like Atkinson — with the binary options brokers who ultimately ripped off customers. Digital Platinum, according to the CFTC, collected and distributed payments, supplied the trading software and apps (when they actually existed), and prepped brokers with the details of a given video campaign, so they’d know whether they were supposed to be trading on a system invented by a genius 12-year-old, or delivering the eldritch money secrets of the illuminati. But with All In Publishing kaput, Barak and Valariola lost their megaphone to the masses. So they started their own U.S. subsidiary, taking up the marketing end of the operation themselves, and absorbing staff like Passerino and Fingerhut. Effectively, a middleman had been cut out, and under the Digital Platinum umbrella, the scams kept rolling — with some minor adjustments.

The new thing was “crypto,” or “digital assets,” which could refer to a few different scams revolving around cryptocurrencies, like bogus ICOs. Other digital asset offers sold up-or-down, rapid bets on the performance of cryptocurrency prices — and if that doesn’t sound very different from the concept of binary options trading, that’s because it isn’t. Customers reached the same bucket-shop brokerages, using a similar basic playbook to fraudulently milk money from credulous would-be investors. By 2018, there were still plenty of classic binary options scam stragglers out there, but “the heyday had passed,” according to the senior CFTC attorney. “The first wave was forex, and then it went to binary options and then it went to digital assets.”

According to Times of Israel reporting, the Knesset’s bill banning binary options left open some major loopholes. “A law was passed, but it wasn’t a terribly effective law,” says Weinglass, “all these people have to do is change the name of their product and then they can advertise again.” Digital Platinum barely even bothered to alter the names, just swapping the word “binary” out for verbiage related to cryptocurrency, resulting in titles like “Bitcoin Code,” “Crypto Genius,” and perhaps aptly, “Bitcoin Loophole.”

Gone were the elaborate video shoots, cancer kids, and secret societies. Instead, the new ads spun their get-rich-quick fantasies through simple voice-over sales pitches, set against stock-image slideshows and on-screen text. And though they lacked Atkinson’s audacious storylines, the new ad campaigns did attract some public attention, like in 2018, when Martin Lewis, a U.K. financial journalist and founder of the website, sued Facebook over ads using his image, falsely claiming he’d endorsed bitcoin investment schemes — one of which was Bitcoin Code. (Lewis dropped the suit after Facebook agreed to donate money to a consumer scam-awareness project.)

Weinglass says most binary options and digital asset scam victims were lured in by ads on major platforms. She doesn’t “know the exact percentages,” but in her experience, “Google and Facebook are very dominant.” Facebook banned binary options advertising in 2018. Though the platform initially banned cryptocurrency-related ads too, it has adjusted its rules a few times, ostensibly making room for more above-board offers, while cutting out scams. And yet Facebook scammers seem to prevail, finding new ways to duck restrictions despite the company’s efforts, with a consistency that has led to questions about the social media giant’s commitment to curbing fraud.

A December 2020 BuzzFeed News report, for example, accused Facebook of forging a “financial symbiosis with scammers, hackers, and disinformation peddlers,” citing, among other things, the continued prevalence of cryptocurrency scams like those peddled by Passerino, Fingerhut, and the Digital Platinum companies. A recent article in Time calls Facebook “the primary feeding grounds for scam artists,” quoting an October FTC release that claimed more than 90% of reported “shopping-scam” victims were targeted through the social network. And though yes, in a way, Facebook is just a middleman, the platform’s powerful ad-targeting tools have also reportedly transformed the ability of scammers to reach new victims around the world; as one affiliate marketer interviewed by Bloomberg Businessweek said of Facebook: “They go out and find the morons for me.”

Impact Life

“I feel bad about it now,” sighs Bill Berry. He’s referring to the customers who were conned after watching the videos he produced, but he also regrets roping in the subpoenaed actors, who he says were “completely freaked out,” and suffered after “just doing a job for me.” He does grumble about the size of his $US550,000 ($704,990) agreement with regulators, which he claims was his gross take for the video production jobs, before he paid for the jet rentals and talent, and represents much more than he ever personally profited. He continues to cooperate with regulators’ legal efforts; in a late 2020 video court hearing related to the charges against Fingerhut, Berry logged on to testify during his lunch break, in uniform for his new job driving a public bus in Portland.

“There is sort of a line,” said the senior CFTC attorney interviewed by Gizmodo, “between, you know, a video producer that’s making a commercial or something like that, and then someone who may have more knowledge as to either the nature of what they’re doing or the falsity of how it’s being used.” That line, she explains, and Berry’s cooperation with investigators, is why he only ended up on the hook for disgorgement of ill-gotten gains, and wasn’t ordered to pay an additional civil penalty.

“In the binary options industry,” says Weinglass, “everyone just thought, ‘Well, it’s not me,’ you know, ‘it’s the person above me or the person below me.’” It’s an instinct fostered by the arcane architecture of this kind of fraud, houses of cards built with seemingly endless rooms, full of contractors and intermediaries, silent partners and financiers — some of which have yet to be discovered. Tens of billions of dollars flowed through the binary options trade, and in the end, says Weinglass, “Where the money actually went is a bit of a mystery,” disappearing into tax havens, secret accounts, and a maze of shell companies. She says, “The money goes to all kinds of different banks, like a bank in Malta, a bank in Bulgaria, a bank in Russia. From there, we don’t know where it goes.”

According to the CFTC at least one of the brokers connected to All In Publishing and Digital Platinum was based in the U.S., a man named Jared J. Davis, who’s currently facing a broad slate of charges related to wire fraud, money laundering, obstruction of justice and tax evasion, in the U.S. District Court for the Northern District of Ohio.

Davis’ businesses were reportedly built through the SpotOption platform, which powered hundreds of binary options sites, facilitating services like content management systems, payment processing, and broker training. In what Weinglass called a “landmark enforcement action,” on April 19, 2021 the SEC brought fraud charges against SpotOption (now known as Spot Tech House) and its two largest shareholders, alleging the company had cheated U.S. investors out of more than $US100 ($128) million.

After months of litigation, Variola and Barak have agreed to the terms of a tentative settlement with the CFTC. The agency has been unable to reach a settlement with Fingerhut, and its case against him is ongoing. No longer able to claim naivete, Jay Passerino was hit with criminal wire fraud charges related to his binary options work, and in August 2020, was sentenced to 15 months in prison, followed by three years of supervised release. In March this year, Antonio Giacca, who in total made more than $US6 ($8) million on scam marketing, was sentenced to 36 months in prison. In sentencing letters filed on Giacca’s behalf, his family members, former coworkers, and friends from the music industry pleaded for a lenient sentence, describing him as a warm, dedicated family man and fundamentally decent person who felt guilt and regret for what he had done.

It’s not clear exactly what Tim Atkinson has been up to since he settled with U.S. regulators in 2019. In the bio on his now-offline website, he expressed some regret, writing, “Looking back on my life at Miami Beach during that period, I now realise that I was an insufferable jerk.” You can also see this apparent change of heart in a 2018 deposition, in which he explains to SEC and CFTC attorneys that he had recently become “one with God.” He thanked regulators, who in a way, he said, had set him on the path to salvation. “This realisation, or what I call a spiritual awakening, did occur after I shut my business down and after I did receive the subpoenas from the SEC,” he said, “and for that, I’m very grateful.” 

On that note, in the deposition, he introduces the agencies’ attorneys to his new venture, “Impact Life,” which he says is “a life coaching company for spiritual entrepreneurs who want to create a lifestyle business that caters to spirituality and make an impact in humanity.” Impact Life’s YouTube channel only posted four videos between 2017 and 2018, but unlike in his binary scam pitches, Atkinson himself stars in the promos, shown spouting vague, inspirational jabber, driving a black Lamborghini Huracan and claiming the brand will “expand your consciousness.” The Impact Life website is down, but an archived version shows it was live as recently as May 2020, promising spiritual entrepreneurs that if they sign up now, they could soon be earning “six to seven figures a year in gross revenue (Eight figures is possible).”

Maybe it’s an occupational hazard — when you’ve been scamming long enough, even trying to turn over a new leaf just ends up looking like one more empty grift. Especially, if never learning anything from your past transgressions is part of your philosophy. In his archived bio, Atkinson urges you “to free yourself from the lies you tell yourself, the past failures that aren’t your fault, and the possibilities for your future!”

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