As a part of its Ponzi scheme ruse, Revenue Join claimed to “proprietary Ai and Machine Studying Algorithms”.
None of that existed.
Revenue Join additionally represented to buyers that it mined cryptocurrency. As a part of these efforts, Revenue Join instructed buyers it had “been mining for years and have been very profitable”.
Seems Revenue Join solely began mining on or round June 2021, a couple of week earlier than the SEC shut it down.
As reported by the Revenue Join Receiver in his November 1st First Interim Report;
Revenue Join solely made roughly $300 from mining actions as much as the beginning of the everlasting receivership, an roughly three-week time frame, earlier than accounting for the price of computer systems, labor, or electrical energy.
Upon factoring in these liabilities, the Receiver concluded;
my group of laptop consultants, and in-house IT professionals, we have been unable to supply a proof-of-concept mannequin that will be capable to cool the mining computer systems in such a manner to supply a aggressive benefit and in the end, the crypto foreign money mining enterprise was deemed non-viable.
As a part of his advertising efforts, Brent Kovar as soon as claimed Revenue Join would associate
with casinos by putting in cylinders of their swimming pools. These cylinders would home the Supercomputer rigs, heating the pool, and mining cryptocurrency on the similar time.
One other of Kovar’s plans was to dangle
put in cylinders with supercomputers from home boats in Lake
Mohave as a result of it’s deep and chilly.
Neither plan eventuated.
The Receiver’s report additionally confirms the passing of Eddie Kona, previous to the SEC’s lawsuit;
The late Eddie Kona (also called Donald Edward Sabisch) and Eric Garrison have been talked about by Brent Kovar as founders and, within the case of Eddie Kona, an worker of Revenue Join.
Regardless of Kona being the face of Revenue Join, ‘Brent Kovar was completely in control of working the day-to-day operations of Revenue Join’.
After going over Revenue Join’s enterprise operations and talking with workers, of which there have been twenty-one, the Receiver concluded
there was no viable enterprise to proceed working, the Receiver terminated the staff and closed the workplaces, retaining just a few on a contract foundation to help with the wind-down of operations.
Together with frozen cryptocurrency, the Revenue Join Receiver has so far managed to get well $8.6 million.
Evaluation of Revenue Join’s accounting revealed Brent Kovar (proper), appreciated to encompass himself with unqualified ladies and lavish them with presents.
The Short-term Receiver recognized three Revenue Join workers with the obligations of administering the monetary and personnel operations of Revenue Join: SW, a former pharmacy technician employed because the accounting supervisor and, as she has acknowledged, a long-term girlfriend of Brent Kovar, RU, a former pharmacy technician employed as an accountant, and JM, with no prior job expertise who was employed because the junior accountant and receptionist on the warehouse.
Along with being comparatively overcompensated through payroll for his or her obligations as described beneath, these three ladies additionally obtained different substantial belongings paid for by Revenue Join, together with: a fully-paid-for dwelling totaling $387,786.94, a Dodge Ram 1500 truck costing $49,320.35, a 2021 Mannequin Y Tesla lease costing $18,513.16, cosmetic surgery costing $21,461.24, and income from the Wealth Companies applications of a minimum of $114,100.
The accounting employees couldn’t display even essentially the most elementary understanding of enterprise accounting finest practices, the accounting employees was overcompensated based mostly on their expertise and expertise, the accounting employees have been supplied lavish non-cash presents for his or her efforts, the accounting employees unquestionably adopted Brent Kovar’s each request, and there have been uncommon and inappropriate relationships with the accounting employees.
As is typical of MLM Ponzi schemes, accounting was nearly non-existent.
By the Receiver’s interviews with Brent Kovar and the accounting employees, it was decided that no type of record-keeping was being carried out for the money inflows or outflows of Revenue Join.
The corporate had no stock of what had been bought with funds from Revenue Join.
Revenue Join has by no means filed taxes nor carried out any of the bookkeeping needed to take action.
No workers on the accounting employees have been certified to conduct skilled enterprise accounting capabilities.
A full record of Revenue Join victims will doubtless not be made public,
out of concern for sustaining their privateness and to stop them from being focused for fraudulent funding schemes by different events who could search to prey upon them.
So to adjust to procedural issues, an inventory consisting of solely a primary preliminary and final identify can be produced.
Within the wake of the SEC’s Revenue Join lawsuit, opportunistic associates have proceeded with their very own litigation.
On September 30, 2021, Jeffrey Nicholas filed a lawsuit towards Troy Sutton, alleging that Mr. Sutton, as a Revenue Join agent, negligently induced Mr. Nicholas and others into making Revenue Join investments.
In a separate November eighth submitting requesting the Texas lawsuit be halted, in addition to sanctions imposed for violating the injunction order, the Receiver characterised Nicholas’ lawsuit as
nothing greater than the investor’s try to race the Receiver to the courthouse in order that the investor could get well false income and monies that belong to the receivership property earlier than the Receiver can.
The Receiver goes on to state he absolutely intends to pursue clawback litigation towards Revenue Join’s net-winners.
Throughout his investigation, the Receiver has uncovered numerous fraudulent transfers from Revenue Join to varied individuals and entities.
On account of the Receiver’s evaluate of Revenue Join’s books and data, he has recognized roughly 150 gross sales brokers who obtained fee funds from Revenue Join starting from $29 to $847,903.
The Receiver intends to claw again and unwind such transfers, and the place applicable, provoke lawsuits towards the fraudulent transferees.
The Receiver intends to first ship demand letters and can solely start litigation if the matter can’t be resolved consensually.
Within the very close to future, the Receiver intends to file a lawsuit towards a celebration who obtained a minimum of $370,000 in fraudulent transfers.
These funds are at present at concern in ongoing divorce proceedings, through which the Receiver additionally intends to intervene to say an curiosity and stop dissipation of Revenue Join belongings.
Keep tuned as we proceed to observe the case docket.