Earlier this month Frank Calabro Jr. posted a series of rants against the North Carolina Securities Division.
In one provided court transcript, it is revealed Calabro Jr. stole at least $2.2 million from USI-Tech Ponzi victims.
The transcript pertains to a hearing held in October 2018, several months after Calabro Jr.’s property was raided and evidence seized.
Calabro Jr.’s attorney argued that, in the absence of information pertaining to investigations into his client, Calabro Jr.’s seized assets should be returned.
As put forth by Calabro Jr.’s attorney;
We inquired as late as yesterday afternoon of the Department of the Secretary of State what agency or authority is investigating Mr. Calabro.
The response we received was that they were not authorized to tell us who that was.
What we do know is originally when we filed this motion, we were told that we should speak to the U.S. Attorney’s Office in the Western District of North Carolina, particularly Mr. Ryan, Dan Ryan, and we did that to talk about the return of the property and were very quickly told that the U.S. Attorney’s Office was not going to be pursuing an investigation.
So as we stand here today, we don’t know whether there is an investigation. We don’t know who might be conducting it.
In response, First Assistant District Attorney Howard Cummings clarified Calabro Jr. was
being investigated by investigators and forensic analysts under the direction of Mr. Haislip who is a special prosecutor at the Secretary of State.
First ADA Cummings then questioned Special Agent Shawn Pruett, who described how Calabro Jr. earns a living as follows:
Mr. Calabro will tell you that he is a marketing tutorer, if you will. He trains people on marketing techniques.
He calls himself an affiliate marketer and his expertise, he will tell you, is — and I say he will tell you because I have spoken with him directly — his expertise is —
that he is a trainer for — trains people in how to be an internet affiliate marketer.
To that end, he runs a website called planetmillionaire.(dot)com which is kind of the hub of his internet enterprise or his internet activity.
Within — within planetmillionaire.(dot)com, there are certain sections where anybody can go to view a video, for example, of how he trains people on affiliate marketing and how to market with the internet.
those videos then end up all going into something that Mr. Calabro was actually selling to someone. And so you may watch a video on how to use e-mails for marketing.
By the end of that video, he is then walking you into either a MLM, a pyramid-type scheme, or in some cases Ponzi schemes.
At the request of Calabro Jr.’s attorneys, the Securiteis Division examined a box ‘labeled 2017 for his tax purposes.‘
SA Pruett: We found that box, and yes, there were many ledger items and notes within that box referring to USI Tech.
First ADA Cummings: And can you — when you referred those ledger sheets, were you able to determine anything from them? Did they have dates on them or amounts of things?
SA Pruett: They did. There were — Mr. Calabro is very good at accounting or taking notes, if you will.
Calabro Jr.’s Attorney: Objection. Move to strike about an opinion on Mr. Calabro being good at anything.
SA Pruett: Mr. Calabro’s, what we assumed to be his own handwriting on these things that we have that we seized, would state or there were written out so that you could see how much revenue he was pulling in from the commissions from USI Tech, where he then sent the money or what appeared to be cryptowallets that he sent money to or from.
Based on a limited analysis of his — of the information that was within specifically box 2017, for the three months from September 17 to January 18, or I guess the last quarter, he had, according to his own records, had pulled in about 2.3 million dollars from the various things that he was doing.
Our forensic accountants took a closer look at it and determined that out of that 2.3 million dollars, that 96 percent of that 2.3 million dollars came from the sale of USI Tech.
96% of $2.3 million is $2,208,000. And bear in mind that’s over just three months.
USI-Tech launched as a forex Ponzi scheme in 2016.
In July 2017 the company jumped on the cryptocurrency Ponzi bandwagon.
By late 2018, the scam had collapsed.
The total amount Calabro Jr. stole from USI-Tech victims has not been made public.
Calabro Jr.’s involvement in Traffic Hurricane was also brought up;
FADA Cummings: And then there is a crystal ward in a — crystal award in a blue box. What is that from?
SA Pruett: That is an award that states that Mr. Calabro was a leading salesperson for an investment program that was called Traffic Hurricane.
So I believe that Traffic Hurricane awarded Mr. Calabro the award for his efforts at selling.
First ADA Cummings: Have you tried to determine what Traffic Hurricane is?
SA Pruett: Yes, sir. I am familiar with Traffic Hurricane.
First ADA Cummings: What is Traffic Hurricane?
SA Pruett: Traffic hurricane is an online program in which several persons got involved with — it — a lot of lawsuits came out of it and there were allegations that it was a Ponzi scheme.
Traffic Hurricane was Ernie Ganz’s short-lived Traffic Monsoon Ponzi reboot.
The SEC shut down Traffic Monsoon in 2016. Traffic Hurricane launched after the shut down but collapsed within a few months.
Upon cross-examination, Special Agent Pruett confirms Calabro Jr.’s involvement in Traffic Hurricane constituted promotion of an unregistered security.
As to the nature of the case, First ADA Cummings sheds some light on the Calabro Jr.’s case.
it’s the state’s position that anything in the nature of cash, any other currency or any gold or silver coins, that that is the result of the sale, the unlawful sale of securities and the solicitation of the sale of securities and that should be held and either forfeited to the School Board or used to try to repay some of the victims in this case because there are, in fact, victims, and that is how this investigation got started.
Beyond that however, details are scarce.
Calabro Jr.’s Attorney: Is there any prosecutor’s office, either state or federal, not the Department of Secretary of the State, any prosecutor, county prosecutor, federal prosecutor, state prosecutor, who is currently prosecuting an investigation against Mr. Calabro, to your knowledge?
SA Pruett: Is there any? Yes, sir. There are other investigations going on.
Calabro Jr.’s Attorney: Other than the investigation by the Department of Secretary of State?
SA Pruett: That is correct.
Calabro Jr.’s Attorney: Who is that?
SA Pruett: I am not at liberty to say, sir.
It is well established that neither the SEC or DOJ comment on open cases.
The October 2018 hearing ended with the Judge taking the matter under advisement.
A December 12th filing provided by Calabro Jr. is an order granting his application for the return of seized property (the matter discussed at the October hearing).
Two days later, on December 14th, an arrest warrant was issued for Calabro Jr.
Note that I have not personally seen the warrant. Nor is it provided on Planet Millionaire.
At the time Calabro Jr. was in Texas. He claims he flew back to North Carolina on or around December 18th to turn himself in.
After paying a $20,000 bond, Calabro Jr. claims he was released.
On December 17th, North Carolina filed motion objecting to the December 12th asset return order. This motion is not provided on Planet Millionaire.
On December 21st the previously granted October asset return order was overturned.
As of August 2019, the assets are believed to be in the FBI possession.
In April 2019 Calabro Jr. was indicted. I have not seen this indictment, nor is it provided on Planet Millionaire.
In October 2019, Calabro Jr. claims state-level proceedings against him were dropped. I have not seen the withdrawal filing, nor is it provided on Planet Millionaire.
If taken as true, a hint as to why the state level case was dropped might have been unintentionally disclosed in the October 2018 transcript:
Calabro Jr.’s Attorney: Mr. Pruett, it is correct that the United States Attorney’s office for the Western District of North Carolina declined to investigate Mr. Calabro, isn’t it?
SA Pruett: We did not — jurisdictional issues, yes. That is correct.
Calabro Jr. claims the North Carolina Securities Division case cost him $250,000 in legal fees. This equates to 9% of the money he stole from USI-Tech victims.
In what appears to be a retaliatory move against North Carolina authorities, Calabro Jr. has published what appears to be residential addresses for SA Pruett and another agent on Planet Millionaire.
Calabro Jr. maintains the North Carolina Securities Division and investigating agents are “terrorists”.
Whether there is a federal case pending against Calabro Jr. and other US USI-Tech promoters remains unknown.