12 Daily Pro Now Under Federal Control

Thanks to an interesting article contributed by one of my readers:

12 Daily Pro investors may eventually get some of their money back, but it is going to take a while.

For the first time, Charis Johnson is talking to the media. She tells the Charlotte Observer that everything was legal as far as she knew, and she says she's now working with the government to "fix this."

But a judge in Los Angeles effectively took Johnson out of the business picture. Federal District Court Judge Nora Manella assigned Tom Lennon as receiver over 12 Daily Pro. Lennon, who's business is based in Southern California, is already in Charlotte, North Carolina.

With the judges order now in hand, he can take control of all aspects of the internet venture and start tracking down the money. At this point, the largest chunk of investors money appears to be held by Storm Pay.

Storm Pay is the internet payment processor that froze the 12 Daily Pro account a month ago. Storm Pay has been vilified by many 12 Daily Pro faithful for stopping what they say had been a company that always paid its members on time.

Ironically, it now appears the money Storm Pay froze estimated now at just under 50-million dollars -- may represent the best hope for those who have lost money.

Randall Lee, Regional Director for the Securities and Exchange Commission in Los Angeles is just grateful that there is any money. "The sad truth is, in most cases by the time we shut it down, most of the money if not all of the money is already gone," said Lee.

Lee also thinks quick action in this case has led to a good result.

"It was almost a pure Ponzi," says Lee, who oversees the investigators who filed the original complaint with Judge Manella and negotiated the stipulated order that led to the appointment of a receiver.

Lee said, "The only real source of income was from new investors. Our investigation found that 95% of the funds were simply moved from one investor to another."

Lee says there isn't much that investors can do but wait. "The receiver will be taking overlooking at the full scope of the operations including anybody that lost money in this scheme. The receiver at the same time will be making an effort to reach out and contact all investors. There is nothing immediate that anyone can do. It will take some time. We are firmly committed to the protection of investors."

And yet Lee admits, "We can't be on every street corner. We cant know what's going on in every corner of the internet."

Lee says investors have to take some measure of responsibility for where they put their money, and he says a 12% daily return as promised by 12 Daily Pro is unreasonable.

Still, Lee is reluctant to place blame for any Ponzi scheme's collapse on investors, adding, "Nobody deserves to be cheated. Nobody deserves to be lied to. Everybody is entitled to the protection of federal securities laws. And so we are here to protect investors even if they make decisions that they might later regret."

Lee advises investors to watch for updates on the www.sec.gov web site.

He also says the receiver will probably eventually start posting updates on the 12 Daily Pro web site -- which is now under his control as well.

Story by: Brent Hunsaker
brent @abc4.tv