Regulators warned investors about “Internet scheme” to separate them from their money.
The state Commerce Department announced Thursday that Profitable Sunrise is “operating an Internet scheme to defraud investors.” The department added that two Twin Cities men, Chad Nilsson and Casey Dorion, were soliciting would-be investors even though they are not licensed to sell securities in the state.
“We are taking strong action today to stop Internet fraud from victimizing Minnesotans and duping them into a pyramidlike scheme to lose their life savings,” Commerce Commissioner Mike Rothman said in a statement. “Minnesota investors should not invest any of their money into Profitable Sunrise’s fraud.”
Profitable Sunrise characterizes its investment model as the “charitable platform” for a money lending group, meaning that it claims to raise money from individual investors and provide short-term loans to various businesses that pay 3 percent interest per day, according to state officials.
Nilsson, Dorion and the other investors would then earn a return of 2 percent per business day over an investment period of a minimum 170 business days. For example, a $1,000 investment would theoretically be worth $37,198 at the end of that time.
Both Nilsson and Dorion said in separate interviews that they have no financial advising credentials, have small amounts of money invested and have recruited only relatives.
As incentive for reeling in new investors, a three-tiered referral opportunity is extended to investors, making it identical to a pyramid or multilevel sales approach. Groups have formed around the country. A woman in Ohio claims to have 1,400 investors in “NJF Global Group Community,” whose mission is to fund her ministry.
These pitches are marketed through websites, blogs, YouTube, Facebook and other social media. Profitable Sunrise also operates its own website referencing religious scriptures on each page, including a statement on the main page implying a spiritual endorsement of the investment program.
Commerce investigators say they found that while Profitable Sunrise claims to be registered and based in Britain, the multiple addresses on the company’s website appear to be false, with one listed as a construction site.
No phone numbers for Profitable Sunrise were available, and efforts to get reaction from company officials Thursday through its Facebook page and other social media were unsuccessful.
Nilsson, of Eagan, said he had no idea that regulators around North America were going after the company, and he described himself as little more than “a blogger [who] drives traffic and markets other products. … I am in the dark, otherwise. I am not a CPA or a financial adviser.”
Nilsson said he has yet to make any money in his relationship with Profitable Sunrise, but “on Easter, they are going to release some money.”
Website suddenly down
He said he turned over $300 to Profitable Sunrise and gets daily e-mails showing how his investment is growing, most recently by about $1,000 over the past four or five months. Nilsson said he also could check his account online “until today. The website is down.”
Nilsson also convinced his father in Canada to put in $500, but “I guess he’s lost his money too. … I’m scared. What do I do? I feel horrible, bad for my dad. I’m going to cry.”
Dorion, of Chaska, said he has turned over about $200 for Profitable Sunrise to invest and has gotten his son and daughter to put in smaller amounts.
“I’m not a broker, and I don’t profess to be one,” said Dorion, who said he has never spoken to anyone from Profitable Sunrise and was recruited by a longtime friend in Idaho. “I’m just trying to make some money.”
Dorion, a retired Mystic Lake blackjack dealer, said he’s waiting for the required 170 business days to elapse before he can collect his earnings. So far, Dorion said, he’s earned about $130 toward his payoff day on top of his initial investment.
“Consumers need to be very cautious of investment affinity fraud schemes both in person and on the Internet that deliberately exploit and manipulate the trust of Minnesotans,” Rothman said. “Unfortunately, fraudsters use the Internet and other advertising to carry out their schemes, and I urge everyone to use vigilance. When a deal seems too good to be true, then it is.”
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