CONNECT WITH:

In Broward State Attorney race, Murphy collects big money from company tied to Pyramid, Ponzi schemes

state attorney candidates
State Attorney candidates Joshua Rydell and Sarahnell Murphy
The two Broward State Attorney candidates with the biggest war chests: Joshua Rydell and Sarahnell Murphy.

By Dan Christensen, FloridaBulldog.org

For the first time in nearly two generations, Broward voters have the opportunity to elect a state attorney in November whose name won’t be Mike Satz.

But in a county where there are more than twice as many registered Democrats as Republicans, the winner will most likely be decided on Aug. 18 when Democrats choose their party’s nominee from among eight candidates.

Adding an air of mystery to the race are four substantial, unexplained contributions made in recent weeks to the 527 organization of Assistant State Attorney Sarahnell Murphy, the establishment candidate favored by Satz. Unexplained because Murphy did not return Florida Bulldog’s repeated phone calls and emails since last week seeking comment.

527 political committees, named for a section of the federal tax code that allows them, are federal, state or local groups organized for the purpose of influencing an election or issue. Their value to candidates is that they can raise unlimited sums from individuals, corporations or labor unions.

In Murphy’s case, her 527 has raised $111,600, a bit more than her campaign. About $30,000 of that was used to pay a political mail firm. Much of the rest remains unspent as of the latest filings through Aug. 1. Nearly all of that money originated from the address of an international payment processing company located in Fort Lauderdale and linked to large Pyramid and Ponzi schemes. More on that further down.

Still, if money alone decides who wins, Coconut Creek Vice Mayor Joshua Rydell, 39, a criminal-defense lawyer, will be Broward’s next top prosecutor. Through July 31, his campaign raised nearly $293,000 from more than 700 contributors. He also loaned his campaign another $17,000. He’s spent $292,000, with most of it going to digital and direct mail marketing companies – plus $2,000 to a political consulting firm in Lauderhill owned by Damara Holness, daughter of Broward County Mayor Dale Holness.

But that’s not all. Rydell’s 527 political committee, Equal Justice, collected another $72,000 and has spent $60,000 of it. The grand total backing Rydell: $382,000.

Other well-funded state attorney candidates

Two other candidates for Broward state attorney have a 527: Harold Fernandez Pryor and Joe Kimok.

Attorney Pryor, 33, has amassed the second-highest number of contributors to his campaign, more than 650, as well as contributions, $129,000, according to state election records. His 527 committee, Broward United, added another $8,100. Pryor’s biggest claim to fame: he’s got the endorsement of veteran Broward Congressman Alcee Hastings.

State Attorney candidates Harold Fernandez Pryor and Joe Kimok
State Attorney candidates Harold Fernandez Pryor, left, and Joe Kimok

Kimok, 38, is a major-crimes attorney at the state’s Office of Criminal Conflict and Civil Regional Counsel. He’s yet to crack $90,000 in total contributions to his campaign and his 527, the Florida Justice & Public Safety PAC. But on July 28 his 527 reported receiving a $40,000 “in kind” contribution to pay for “polling” services from the similarly named Justice & Public Safety PAC. That’s a liberal Washington, D.C. group heavily funded by the George Soros Fund.

Sarahnell Murphy’s campaign has raised $111,000 from about 240 contributors. Murphy, 51, also loaned $50,000 to her campaign, which has so far spent $122,000, the state records show.

Murphy rises to second place in total fundraising when you add in the $111,650 collected by her Victims Have Rights PAC, plus an additional $10,000 she pumped into it.

International Payout Systems

Most of that money, $80,000, is attributed to contributions from International Payout Systems, of 540 NE Fourth St. in Fort Lauderdale. The donations were made on June 24 and July 22 and 29. Also on July 29, Integrated Data Technology, at the same address, gave $30,000 to Murphy’s campaign.

A search of state Division of Election records turns up no contributions by those companies to any other candidates since the database began in the 1990s. But International Payout Systems (IPS) and its Chief Executive Edwin “Eddie” Gonzalez did contribute $1,000 apiece to Murphy’s campaign on June 18.

Why did IPS, also known as I-Payout, contribute so much to help Murphy win the race for Broward state attorney? Were those contributions perhaps made by others via IPS and not by IPS itself? If so, who contributed? Gonzalez did not respond to Florida Bulldog phone messages and emails seeking comment left with him since last week.

Federal court records, however, show that IPS is among a number of defendants in a massive civil lawsuit arising from the $3-billion TelexFree Pyramid  scheme. The lawsuit dates to 2015.

Telex sold a voice-over-internet-protocol (VOIP) telephone service, similar to Skype, which customers could sign up on at TelexFree’s website. Investors in the company were also scammed, according to federal prosecutors.

A ‘pyramid scheme’

TelexFree “was a pyramid scheme; all of the money TelexFree paid out (to early investors) came, not from sales of its product, but from new participants paying TelexFree to sign up as ‘promoters’ for the company,” according to a 2017 Justice Department press release announcing the sentencing of former TelexFree President James Merrill, of Massachusetts to six years in prison.

There were hundreds of thousands of victims in more than 240 countries, the U.S. Justice Department said.

International Payout Systems CEO Edwin Gonzalez and COO Natalia Yenatska
International Payout Systems CEO Edwin Gonzalez and COO Natalia Yenatska

IPS is currently a defendant in the ongoing civil lawsuit being pursued by victims of the TelexFree swindle in federal court in Boston. According to documents filed in the case last month by one of IPS’s attorneys, plaintiffs contend IPS was aware of “the illegal nature of TelexFree’s business activities” when IPS “took TelexFree on as a ‘payment processing’ customer and maintained that relationship until April 17, 2014 by providing services and assistance to TelexFree.”

The charges against IPS: civil conspiracy and common law aiding and abetting.

Plaintiffs now want to amend their complaint to add two IPS officers, CEO Edwin Gonzalez and Natalia Yenatska, as defendants, the court filing says. IPS is fighting that. Yenatska is IPS’s chief operating officer.

A ‘Ponzi scheme’

IPS was also named – but again, not criminally charged – in a 2010 criminal complaint filed against Nicholas Smirnow by the U.S. Postal Service in Illinois. The complaint alleged Smirnow used Pathway to Prosperity (P-2P) to run a Ponzi scheme that defrauded 40,000 investors in 120 countries out of more than $70 million.

“Investors who received returns on their investments received, not legitimate earnings from legitimate investments, but investment funds contributed by later investments,” the Justice Department said.

According to the complaint, which was refiled as an indictment in 2013 while Smirnow was a fugitive, Smirnow had a related Turks & Caicos Islands company called P-2P Energy Ltd. that used IPS’s services as a payment processor to handle its “scam transactions.”

IPS provided “the infrastructure to handle P-2PE’s financial transactions. In addition, IPS provided P-2PE the ability to provide debit cards for each P-2-P investor to access their account. Approximately seven percent of all investor funds went through IPS and P-2PE,” the complaint said.

The nature of IPS’s role in Smirnow’s fraud, and whether it was witting, was never explored at trial. A Canadian newspaper reported he was captured in Canada in 2014 after stepping off a plane from the Philippines. Court records say he pled guilty to related fraud charges in Canada. He was returned to the U.S. on Aug. 15, 2019 to face trial, but died last October while in custody.

Print Friendly, PDF & Email

Latest comments

  • This is am example of why the Bulldog is so important to all of us !!

  • Innuendo seems afoot here. While I am a supported of Joshua Rydell for the position, the article seems to “want to” connect Murphy to bad money begotten of a campaign contributor. Broward Bulldog knows that candidates at all levels rarely track the source of campaign dollars prior to hitting treasurer accounts. Doing so would mean on-boarding teams to track dollars back to their origin. One can only imagine the pile of skeletons buried in EVERY candidates account. Even those from individuals. And to check the backgrounds of all contributors is something no candidate in right mind would do.

    Not returning a call for comment is no more than a sign that an individual feels as though commenting isn’t worthy, or that media may mince words–which to extent Dan has done here. He got creative. He creatively implicated Murphy in connection to schemes by TelexFree. Merrill was sentence to prison three years ago and courts have ruled that victims are to be paid: https://www.telegram.com/news/20200710/telexfree-settlement-funds-being-sent-to-victims-of-ponzi-scheme.

    The justice system has done its job. But it seems unjust in the court of public opinion to throw mud at Murphy based on unfounded critique. If I’m wrong, then mud in my face.

  • This is so untrue about Sarah. Guess people who are scared of her cook up untruths to see if they can get ahead of her. She’s the one to VOTE for. !! Go Sarah!!

  • When candidates running for law enforcement positions, what does that say about their ethics!

  • When a lawyer running for County DA takes money from an illegal company, who would trust him?

  • Dan, I am surprised at you ! The real facts here do not support you ! The “ties” these companies you accuse of having to the actual criminals DO NOT even remotely suggest that they had anything at all to do with the wrongdoing ! They were simply used to process payments …. it is like accusing a bank if a criminal were to have a bank account there or opened a credit card at the bank of having “ties” to the criminals ! This really sucks , Dan .

  • I guess what they say is true about journalism…..if it bleeds it leads, right? All I know is both Sarahnell and her husband are two of the most ethical lawyers I’ve worked with. So, this is just a cheap shot I believe. Not cool…and unnecessary to try to muddy the waters with BS.

leave a comment

×

Subscribe to our Newsletter

Email
*

First Name

Last Name