Legisi: too good to be true…

E-gold accounts from this program were seized on April 2007 before going private:

Total amount seized – over $1.7 MILLION dollars

I recommend you to read these two links about what’s happening with Legisi:

Alan’s Blog and Scam.com

The transaction history shows that, while there were some payments out to investors (generally in the tens to hundreds of dollars), the vast majority of funds were simply taken out of the account for use by McKnight.Approximately 5440.90856 grams ($3,443,852.80) was exchanged out for national currency through Omnipay orThe Bullion Exchange. Another e-gold account, number 2828872 in the name of “LIDO Consulting LLC” and also controlled by McKnight, received 892.133009 grams ($550,000) from account 2636005.

Identified e-gold accounts operating pyramid schemes

e-gold accounts 2636005, 2825136 and 2828872

(Legisi Holdings LLC)

46. e-gold accounts 2636005, 2825136 and 2828872 are accounts purportedly owned by Greg McNight of Swartz Creek, Michigan in the name of Legisi Holdings, LLC. These accounts are used to operate the Legisi pyramid investment scheme, which has been operating since December 2005 via the internet website www.legisi.com. This program describes itself as “a private, members-only High Yield Return-on-Loan program. . . . Our members loan us funds, choose their repayment and enjoy the interest payments.” This scheme offers investors two programs in which to invest their money, including the “Standard Loan” which has a minimum investment of $250 and no maximum. At the end of the four month term, investors are told they can withdraw their principle investment with 10% a month interest paid, or chose to leave their money in the system and continue to earn 10% a month. The second program offered is the “VIP Loan,” in which the minimum investment is $10,000. The term of the investment is for one year, and at the end of the year, the investor can withdraw their money or leave it in the program and receive a 12.5% monthly return. Legisi also encourages investors to recruit others to invest in the programs by paying a 5% referral commission on all funds that are put into a new account The operator of the scheme – Greg McKnight, according to the website – states on his website that investors who may be seeking to refer other investors should never o use the “investment,” “Tax,” or “Guarantee.”

47. As of March 13, 2007, Legisi e-gold account 2636005 was the highest value egold account after the e-gold operation’s own accounts (e-gold, Ltd. and OmniPay accounts), containing approximately 1485.12508 grams ($978,845.94) worth of e-gold. An analysis of account 2636005 was conducted and yielded the following results: The account was created in December 2005 and transactions can be seen up until March 12, 2007. Approximately 11,254.25814 grams ($7,022,258.77) in funds in 1,556 transactions occurred into the account with notations in the memo field such as: “Deposit to www.legisireserve.com User ChuckieM”and “Withdraw to Robert Williams from Legisi.com.” The transaction history shows that, while there were some payments out to investors (generally in the tens to hundreds of dollars), the vast majority of funds were simply taken out of the account for use by McKnight.

Approximately 5440.90856 grams ($3,443,852.80) was exchanged out for national currency through Omnipay orThe Bullion Exchange. Another e-gold account, number 2828872 in the name of “LIDO Consulting LLC” and also controlled by McKnight, received 892.133009 grams ($550,000) from account 2636005.

48. A second Legisi e-gold account, number 2825136 had a balance of 375.641569 grams ($247,585.36) on March 13, 2007. Analysis of this account, also held in the name of Legisi Holdings LLC, was conducted and yielded the following results: Transactions in the account occur between September 2006 and March 2007. Approximately, 1,315 transactions occur involving the transfer of funds into the account with a value of 7498.626704 grams ($4,699,786.63), and include notations in the memo field such as: “Deposit to VIP fund.” Most of the funds received into this account, amounting to approximately 5365.237044 grams ($3,385,048.00), were transferred to Legisi’s account 2636005.

49. A third Legisi e-gold account, number 2828872 received approximately 3724.00066 grams ($2,499,806.00) worth of e-gold from accounts 2636005 and 2825136, both of which were used to receive investor deposits. Analysis of account 2828872 showed: 116 transactions occur into the account with a total weight of 4866.42213 ($3,237,669.14), four of which come from account number 2636005 totaling 3348.77982 grams ($2,240,805.00). Three of the116 transactions come into the account from e-gold account 2825136 with a weight of 375.22084 grams ($259,001.00). There were approximately 149 transactions out of the account with a total weight of 2208.24154 ($1,374,323.44). The smaller transactions out of the account appear to be payouts to keep investors satisfied, while the larger withdraws are to OmniPay for exchange. Shortly before its value was seized, e-gold account 2828872 was one of the greatest valued e-gold accounts, containing approximately 2657.54163 grams ($1,804,205.01) worth of egold.

From the forfeiture case filing of 7/24/2007

Case 1:07-cv-01346-RMC Document 1 Filed 07/24/2007

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES OF AMERICA,
c/o United States Attorney’s Office
Judiciary Center Building
555 4th Street, N.W.
Washington, DC 20530

ALL PROPERTY IN/UNDERLYING E-GOLD ACCOUNT NUMBERS: 2636005, 2825136 AND 2828872,

VERIFIED COMPLAINT FOR FORFEITURE IN REM
The United States of America, by and through the United States Attorney for the District of Columbia, respectfully states as follows:

1.This is a civil action, in rem, brought to enforce the provisions of 18 U.S.C. §981(a)(1)(A), which provides for the forfeiture of any property involved in a transaction or attempted transaction in violation of 18 U.S.C. §§ 1956 and 1960, or any property traceable to such property. This civil action, in rem, also seeks to enforce the provisions of 18 U.S.C. §981(a)(1)(C), which provides for the forfeiture of any property which constitutes or is derived from proceeds traceable to a violation of any offense constituting “specified unlawful activity” or a conspiracy to commit such offense.

DEFENDANT PROPERTY

4. The defendant property is: All property, accounted for as an amount of “e-gold” in, or underlying, e-gold account(s) 2636005, 2825136 and 2828872, on or about April 26, 2007 and May 4, 2007, and now reflected as U.S. dollars.

The E-GOLD operation records the individual or entity opening or directing the e-gold account(s) related to this forfeiture matter as: Legisi Holdings LLC.

5. On or about April 25, 2007 and/or May 4, 2007, seizure warrants were issued by this Court authorizing seizure by federal law enforcement authorities of the property accounted as e-gold and contained in or held on deposit in the e-gold account(s) numbered and identified as indicated above. These warrants required entities operating the E-GOLD system – Gold & Silver Reserve, Inc./OmniPay/e-gold, Ltd. – to convert or exchange the relevant e-gold into funds denominated as United States currency.

Law enforcement officers served the warrants at the offices of Gold and Silver Reserve, Inc., on or about April 26, 2007 and on or about May 4,2007, and left copies of the warrants with Douglas Jackson, or other company officials, on each occasion.

The defendant property herein was seized pursuant to one or more of these warrants.

6. Post-conversion, the U.S. dollar value of the property recovered pursuant to the warrant(s) concerning the e-gold account(s) at issue here was $1,769,264.19.7.

The defendant property is now in the custody of, and under the control of, the United States Department of the Treasury, in Washington, DC.