Rogue Casino Group Affactive Linked to ‘Pump-and-Dump’ Arrests

Two Israelis and one American have been charged in conjunction with a massive e-mail spam and “pump and dump” scheme involving penny stocks that may have netted the trio and their accomplices as much as $2.8 million in illicit proceeds.  Following the announcement of the charges, at least two of the men were also quickly linked to a notorious rogue online-casino operation incorporated in the Netherlands Antilles.  The rogue casino group’s alleged operations include similar spamming operations, non-payment of winners, and even a massive hacking campaign targeting WordPress blogs listed on Google, which were being hijacked to promote the group’s various operations.

Named in a Securities and Exchange Commission (SEC) press release on Tuesday announcing the charges were Israeli nationals Zvi Orenstein and Gery Shalon, and American citizen Joshua Samuel Aaron.  Orenstein (also known as Aviv Stein and John Avery) and Shalon (also known as Phillipe Mousset and Christopher Engeham) were immediately detained by Israeli authorities, and will likely face extradition proceedings as initiated by the United States.  Aaron (also known as Mike Shields), age 31, was also living in Israel, but is currently believed to be in Russia and is temporarily out of the extradition reach of American authorities.

Yesterday, a Jerusalem court ordered Orenstein, 40, and Shalon, 31, held without bail, citing flight risk, pending the result of the extradition proceedings.  A search of Shalon’s residence also turned up two million shekels (about USD $520,000).

Pump and Dump Details and Charges

The three men were charged in connection with a long-running series of pump-and-dump spams exhorting e-mail recipients to buy certain penny stocks, which the group had already acquired significant holdings in and then sold for a high profit — as much as 1,800% — following the stock’ subsequent surge.  The three men ran their pump-and-dump cycle at least 20 different times, generating at least $2.8 million in illicit proceeds.

According to the SEC statement, “Aaron and Shalon allegedly wrote and designed the e-mails, Shalon allegedly disseminated them, and Orenstein allegedly provided essential operational support by handling brokerage accounts using numerous aliases.”

The three men have been charged with “violating or aiding and abetting violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5.  The SEC is seeking to bar them from the penny stock business and obtain their ill-gotten gains plus interest and financial penalties.”  The pump-and-dump spree dates back to at least 2011, according to the SEC, and each of the men may face as much as 20 years in prison if convicted of the charges.

The trio are also believed to be connected to a major hacking of JPMorgan Chase & Co. last summer.  The hacking, discovered in October, resulted in the theft of what officials termed “gigabytes” of financial information, including customer-account data.

Two other men were named as likely accomplices in the pump-and-dump scheme, but were not (at least as yet) charged or named, just being described as penny-stock “promoters” in the affidavits concerning the Iasrael-based trio.  However, two Florida men, Anthony R. Murgio, 31, of Tampa and Yuri Lebedev, 37, of Jacksonville, were also arrested this week in connection with both the recent financial-services hackings and their operation of a Bitcoin-based payment service, Coin.mx, and the manipulation of an unnamed New Jersey credit union for money-laundering purposes.

Numerous reports suggest that much of the technical support for the JPMorgan Chase & Co. hacking, as well as several others that have plagued the US financial-services server, may have emanating from notorious Russia-based cybercrime groups.  At the time, JPMorgan Chase and US officials had not determined if the hacking was state-sponsored or done for personal profit, though the latter motive now seems likely in the wake of this week’s charges.

Rogue Online-Casino Groups Affactive, Revenue Jet Linked

Numerous reports appearing today on casino-industry discussion forums have linked Shalon and Orenstein to the operation of the notorious online-casino operation, Affactive.  Affactive, best described as an affiliate operation long since declared as rogue, is actually a separate business front of the Netad Management group of online casinos.

Few online-poker or online-gambling customers in English-speaking countries have been spared the inundation of spams touting Netad Management / Affactive sites.  (This writer has received hundreds.)  Among the known Netad / Affactive sites are Win Palace Casino, Casino Titan, Slots Jungle Casino, Jackpot Grand Casino, Golden Cherry Casino, Slots of Fortune, Begado Casino, Grand Macau Casino, Grand Macau Live Dealer Casino, and WinpalacePlay.  Several of the names are named in a manner to intentionally confuse a casual consumer into visiting them instead of similarly-named and more-reputable online casino.  (All of the sites claim to be licensed by the rubber-stamp, faux-regulatory Curacao Gaming Commission, last in the news for their hilarious inactivity regarding the years-long Lock Poker fraud.)

The various Netad Management sites have long spammed the public under their in-house Affactive umbrella, and have been declared rogue for years by industry watchdog Casinomeister.com.  In addition to the unrelenting spam and ignoring of remove requests, the Netad sites have been accused for years of underpaying or ignoring entirely users’ cashouts requests.

A separate, notorious episode involving the hacking of what may have been thousands of largely inactive blogs using a WordPress exploit has also been traced back to the Affactive group, though a company spokesman subsequently denied the the group’s involvement.  In that affair, which occurred in several different bursts in 2014 and 2015, the hackers successfully manipulated Google’s searching and ranking algorithms, forcing site after site to the top of Google search results for common terms such as “online gambling.”  The links thus provided led directly to Affactive-touted sites, in the process burying many more legitimate links and breaking news stories.

Several industry experts, including the CasinoMeister watchdog site, have linked the Affactive / Netad sites to another suspect “affiliate” operation, www.revenuejet.com.  Most of the sites touted by Revenue jet claim to be owned and operated by a company called Milore Limited.  At least five Milore sites exist: Grand Parker Casino – RealTime Gaming, Loco Panda Casino, OnBling Casino, Classy Coin Casino, and Grand Parker Casino – TopGame.  The Milore sites also fraudulent claim to be licensed in Curacao.

The RevenueJet operation does have one separate distinction: It was awarded Casinomeister’s dubious “Worst Casino Group” award in 2014, a dishonor in mocking tribute to the many ways it ripped off its customers.  It’s all the same alleged criminal group, anyway, and Affactive received the same non-honor from Casinomeister in 2010, 2011 and 2013.

According to one industry affiliate, speaking on condition of anonymity, “They have an awful history in the niche: These casinos have been plaguing casino players by robbing, stealing, cheating and lying. There are numerous scam articles on them and player complaints.”

Brad Bailey, who operates another well known casino watchdog site Roulette Online, offered his take.  Bailey told FlushDraw, “Today’s news may just spell the long overdue end of one of the darkest chapters in online casino history. The Affactive and Revenue Jet Groups have long been known to stiff winners and are blacklisted on almost every legitimate casino website. They’ve managed to survive by hanging on the coat tails of unscrupulous affiliates who continued to promote them in spite of their poor reputation in the industry. However, given their reluctance to pay winning players, the worst may still to be come, as if these groups shut up shop, they are likely to do so without paying player balances. “