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The Continuing Saga Of Asset Protection Group.

By Rob Lambert - Email Editor

Date : 09-Feb-2007

Dear Subscriber:

I normally try not to revel in the misfortunes of others – even those who, in my opinion, so richly deserve it. Despite this, I’m finding it hard to refrain from at least smiling when I see the latest hot water that Bill Reed’s gotten himself into.

Reed, you might remember, was the defrocked lawyer who was the founder and brains behind Asset Protection Group (APG), an outfit from Nevada that promised all sorts of Asset Protection if you just got into a Nevada corporation that he and his group would set up. Reed’s scam relied on a combination of so-called “bearer shares,” nominee officers, “friendly liens” and a bunch of other out-and-out fraudulent tricks designed to hide one’s riches from his creditors. Before the feds caught on and shut him down, Reed suckered nearly 2,000 “consultants” into plunking down nearly $10,000 each to be part of his Asset Protection scam. Last summer, the FTC took over APG, appointed a receiver over APG’s business, and issued an order forcing Reed and his second in command, convicted felon Rich Neiswonger, to comply with a rash of court directives. Among these were the requirements that Reed could only transfer money with the receiver’s express permission, could only open a bank account with the receiver’s permission, and could only do business with the receiver’s permission. According to the court order, Reed was to be kept on a pretty short leash. It turns out he didn’t like it much.

As I mentioned in a prior newsletter, it came out in the FTC’s case against Reed that he and Neiswonger at one point tried to shut me and my website down, offering a computer hacker untold riches if he could just crash my server. (It didn’t work, by the way). I suppose that Reed and Neiswonger couldn’t stand the fact that the truth about them and their scam was being told on my Asset Protection bulletin boards.

Recently, the receiver finally shut the doors on APG altogether, concluding that there was just no way that the scam could or should continue. This pretty much sounded the death knell for whatever hopes Reed and company might have had about how they could somehow survive this little federal inconvenience and jump back into the saddle once the feds had gone away.

As bad as that was for Reed, it now appears that the receiver wants to have him held in contempt of court for actions that appear to amount to criminal fraud. In a massive pleading filed with the federal court, the receiver accuses Reed of “egregiously, consistently and flagrantly” violating the court’s orders, and having simply thumbed his nose at the court, the FTC and the receiver.

Among the actions that the receiver has discovered are, unknown to the receiver, Reed opened a bank account in the name of “A-Plus Group Inc.” (not coincidentally having the same initials of APG), and then depositing checks intended for payment to Asset Protection Group – checks made out simply to APG – into that bank account. All of this was in direct violation of the court’s orders, of course. As a final “coup de grace” (at least that’s how the receiver characterized it), Reed set up a bunch of offshore corporations for APG consultants and simply pocketed the money instead of turning it over to the receiver, like he should have.

When Reed was asked, under oath, about these actions, he simply lied, blaming his former underlings at APG, blaming the receiver himself or simply developing amnesia. The receiver recently told the court that Reed’s testimony under oath was “blatantly false and perjurious.” The receiver went on to say that “Reed’s testimony is so devoid of credibility that it ultimately must not be given any weight, except when he admits his contemptuous conduct, albeit with unbelievable explanations.” The receiver added that Reed’s testimony “includes preposterous explanations and denials regarding his forging of client signatures, his theft of client identities, and his explanation regarding why he has apparently failed to report and pay taxes on millions of dollars of earned income.”

Maybe it’s just me, but I think the guy’s in trouble.

I’m trying not to gloat. I really am. But it’s hard. Damn hard.

There’s a lesson in all of this, of course, and it gets down to simply filling in the blanks of what you’ve heard all your life. If it walks like a scam, talks like a scam and smells like a scam, … well, you know the rest. My bulletin board used to be filled with Reed’s defenders, screaming, “Well, if it’s such a scam, how come Reed and company have never been shut down?” Needless to say, we don’t get that particular posting anymore. The folks who spent so much time defending Bill Reed and APG are now trying to figure out how they’re going to get any of their money back. (Here’s my hint: Don’t hold your breath.) In the end, guys like Bill Reed will bring themselves down.

Meanwhile, you need to be keeping a close eye on those folks who would promise you a quick and easy (or slick and sleazy) answer to your Asset Protection needs. Remember, if it seems too good to be true … ah, you know the rest of that one, too.

Have a healthy and protected week

Rob Lambert

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