SENTENCING TIME! PYRAMIDERS OFF TO PRISON!
April 2012 - James Sweeney Gets 33 years and Patrick Ryan 31 years in Prison by California’s Riverside County Superior Court. State officials announced the sentencing of two men to more than 30 years in state prison for stealing more than $8 million dollars from elderly and Filipino victims through an illegal pyramid scheme and phony stock sales. Both men were ordered to pay restitution of approximately $8.2 million. ED. NOTE: See history of the scam below. I could never see how Big Co-op survived after the demise of online shopping malls. Now all is clear Sweeny and company were doing a pyramid plus a stock scam at the same time!
BIG CO-OP OFF TO JAIL - ARREST & GUILTY BELOW
April 21, 2011 - James A. Sweeney and Patrick M. Ryan were found guilty in a criminal trial in California of running a pyramid scheme selling phony, hyped stock and stealing $8.2 million at seminars from innocent participants. They told suckers that the “dog” MLM Big Co-op Inc was the future of Internet marketing. Sweeny and Ryan could spend 20 years in prison. Ed. Note: Jim Sweeny always operated in the “GRAY” area and I could never figure out how such a piece of "XXXX" as Big Co-op survived as an MLM. Now we know!
California Attorney General Agents Arrest
Internet Mall Owners of Big Co-op, Inc
James A. Sweeney, II, 62, of Afton, Tennessee and Patrick M. Ryan,
JUNE 17 2009 Editor's note: I hadn't heard much about Big Co-op in the last couple of years and web stats didn't show much growth so I had it in mind as a dead dog MLM. It turns out they had a new twist... running a pyramid scheme to commit securities fraud. Not the first one they have had, but a quiet one! Jim Sweeny had started several MLM companies, but created such nutty MLM Complans they flopped.
California - Attorney General Edmund G. Brown Jr., working with law enforcement in Tennessee and Nevada, arrested two individuals earlier this week for stealing $8.8 million dollars through phony stock sales and an illegal pyramid scheme. “Big Co-op, Inc., an Internet Mall” owners scammed consumers using a Pyramid Scheme, and then sold them non-existent stock.
The Accused - James A. Sweeney, II, 62, of Afton, Tennessee and Patrick M. Ryan, 34, of Canyon Lake, California were arrested on June 3, 2009 in Afton, TN and Las Vegas, NV, respectively, and are being held until they are extradited to Riverside County. Both face 78 counts of grand theft and securities fraud. Bail has been set at $8.8 million each. Attorney General Brown said. "They stole investors' money and used it to pay for luxury homes, fancy cars and a $100,000 Las Vegas wedding."
AG Brown's complaint contends that Sweeney and Ryan, co-founders of Riverside California based Big Co-op, Inc., stole $8.8 million from more than 1,000 Californians through an illegal pyramid scheme and phony stock sales. Big Co-op, AKA Ez2Win.biz, acted as online shopping hub where consumers could go to purchase products and services from big online retailers including, Sears, Target and Macy's, and get rebates that amounted to discounted prices.
Pyramid Scheme: Suckers were pitched that if they purchased a Big Co-op membership, they could save money and earn commissions and rewards by signing up others to shop on the site. What really occurred according to the AG was members never got rebates or rewards. Money actually came from signing up others to buy a membership, and then those purchasers went out to recruit others to purchase memberships – a classic pyramid scheme trait based on recruitment not the sales of products or services.
Members paid Big Co-op from $19.95 to $99.95 in ongoing monthly membership fees. Their Fast Start a $100 commission for every six members recruited. This is the mark of a Pyramid Scheme by paying on bodies and not products/services sold. Per the California AG information from 2005 to 2007, Big Co-op generated $1.3 million in revenues through this pyramid scheme. Your Watchdog editor thinks it started before this by several years.
Phony Stock Sale: To add insult to injury of the pyramid scheme, Sweeny and Ryan sold non-existent stock in Big Co-op as an investment and also as part of some membership plans in opportunity meetings across California (this is the area of AG Control, but it actually happened accross the whole U.S.). Sweeney and Ryan hyped “Big Co-op” as the leading edge of online commerce. They did comparisons with Google and EBay, and told current and prospective stock buyer- investors “Big Co-op Mall” was cranking out huge profits. Potential stock buyers were also hyped that an initial public offering (IPO) was ready to go, and that when “Big Co-op Mall” went public, Internet shopping Mall shares could jump to over $100 per share! Big Co-op took in $7.5 million from these phony stock sales. The shares were sold for .50 to $5 bucks with all kinds of deals made for cash buyers. There wasn’t an impending IPO, and the only revenue was a result of the sale of phony stock and membership fees for the pyramid scheme.
THIS PART IS NUTS FOR THEM OR ANY INTERNET SHOPPING MALL
Numerous complaints led the California Department of Corporations issue two "Desist and Refrain Orders" against Sweeney, Ryan and other associates: the first, on October 23, 2006, directed them to cease selling stock in the company and the second, on May 2, 2007, directed them to cease selling memberships in the company. Following the second order, the case was referred to Brown's office for prosecution.
On May 29, 2009, Brown filed 78 criminal charges in Riverside County Superior Court against both Sweeney and Ryan that could get the accused more than 25 years in prison. If convicted on all charges, each could face more than 25 years in prison.
AG PRESS RELEASE Big Co-op
OCTOBER 2003 UPDATE SINCE THE RECEIVERS WEBSITE IS DOWN!
The money was released to the lower court of Baldwin County Alabama from the federal court in Maryland where it was interplead. The class action was settled first. This action covered those whose money was transmitted between March 3rd and March 21st 2000. A little over $1.6 million to mall owners throughout ALL 50 states has been paid in that action (many of these people had received commissions that reduced or eliminated the dollar amount of their claim).
The second action was an action to settle with the Michigan AG after she intervened in the above class. In this action approximately 16,000 Michigan residents were notified. It appears that there will be a little over $1.2 million paid out to residents who filed. The payments should be settled in full shortly after the first of the year 2004.
KM.NET REFUND MONEY TO GO TO ALABAMA AND MICHIGAN FIRST?
Attorney General Jennifer M. Granholm announced today that Michigan consumers who were cheated through an alleged on-line pyramid scheme into purchasing their own personal Internet "mall" would immediately begin to receive full refunds. The first wave of disbursements totaling $595,425.45 will be paid to 1,390 Michigan residents who purchased the Internet Malls from PowerCard International.
PowerCard, which operated under the name KM.NET, aggressively marketed the web malls in Michigan and other states. The malls were supposed to allow the mall website owners to make large profits when Internet surfers used the malls to make purchases. Ed Note: The average comes out $402 on payback. The orginal cost was about $300 per mall. That average means many getting the money back bought multiple positions. See the paragraph below on those getting refunds having commissions deducted! Smooth move.
Granholm said: "These Internet 'malls' were nothing but a pyramid scheme meant to bilk money from Michigan consumers. This trick, without any treat, was just a ghoulish rip-off exploiting the popularity of 'dot.coms.'"
Granholm filed suit against KM.NET in July 2001 and reached a settlement earlier this year. Michigan, which was the only state to file suit against the company, filed court pleadings in Michigan and Alabama while also monitoring a court proceeding in Maryland.
This first wave of payments is for consumers who purchased KM.NET malls during the period beginning March 3, 2000, and ending March 22, 2000, which resulted in the consumer's bank account being electronically debited on or after March 22, 2000.
The refunds represent the purchase price of the mall(s) minus any commissions actually received from KM.NET for the sale of Internet shopping malls. Some Michigan consumers purchased multiple malls. The second wave of payments will also cover those who purchased between the same period but will be for those claims requiring further verification. This wave of payments should be paid before the end of the year.
Granholm said: "While a wonderful educational tool, the Internet has become a haven for scams on unsuspecting consumers. We will do everything possible to protect Michigan families from the abuses technology can bring."
The settlement administrator anticipates that the total amount of refunds under the Alabama class action settlement will be approximately $2 million. If the settlement administrator has a question regarding a claim, the claimant will be contacted. Interested claimants should not contact Granholm's office but instead may contact the settlement administrator at 251-473-5550, or by writing to P.O. Box 70106, Mobile, Alabama 36670.
Once the payment for Alabama class members is complete, the claim process for Michigan consumers who purchased a mall at a time other than between March 3 and March 22, 2000, will begin under a separate Consent Judgment.
A message explaining the claims procedure will be posted on the claims administrator's KM.NET website at: www.rtbhpcilit.com. The Attorney General's website will also keep Michigan consumers advised of any updates from the settlement.
