The government report 007240 indicates that over $38 million in commissions were “paid” and “used” by distributors who were depicted as alleged victims in the i2G case. These commissions served as the funding source for their purchases of the “emperor packages.” However, the government reported the total purchase amounts as losses without deducting the commissions that covered these purchases. As a result, the representation of gains and losses in the i2G case was skewed by the prosecutors during the trial, leading to a substantial overstatement of the reported losses or the creation of losses that never actually occurred. Attached below are Exhibit 7240 and a video explanation.
Column J in Exhibit 7240 shows the total I2G commissions earned and “utilized.” You can easily sort the data in Column J using Google Sheets to calculate the total commissions earned, which amounts to $38,116,346.38. This total includes1) Commissions requested for withdrawal to the e-wallet and 2) Fund transfers that represent commissions converted into “gift certificates,” used for product purchases or transferred to others for their startup purchases. The total transactions reflect these earned and “used” commissions. The government filtered out all commissions indicated by “funds transfers”, which accounted for nearly 80% of the total I2G commissions earned. In the Gains and Losses presented to the jury in 101I, the government reported only a mere $7.5 million in “I2G Gains”- dramatically inflating losses and hiding the gains of the represented “victim investors.”
Since the trial, Jerry Reynold provided the defense a new spreadsheet with total of ALL commission earned which coincides with the spreadsheet Government 007240 which the government had at least six years prior to trial. An evidentiary hearing is necessary so that Reynolds can provide sworn testimony to determine the willfulness, malice, and deliberation behind the prosecution’s actions, which occurred two weeks before the trial.
Take the time to verify the data for yourself. People went to prison because of these misrepresentations.
Summary of Fraud Upon the Court
The assistant district prosecutor misled the Court by repeatedly making false statements about remarks attributed to data provider Jerry Reynolds, which never took place. It can reasonably be assumed that this was done to conceal $28 million in exonerating commissions paid to distributors classified as “alleged victims.” These commissions contradicted the claim that i2G operated as a pyramid scheme with a 96% loss rate. The erroneous statements attributed to Reynolds were presented to the Court and the defense during the trial, as well as during restitution and sentencing hearings, in an effort to undermine evidence that disproved their case.
The government informed the Court and defense that the exculpatory data (007240) which it was required to disclose was “problematic” and “inaccurate,” according to Reynolds. Reynolds later provided an affidavit repudiating the false statements by affirming the validity of the (007240) data.
The government ordered seven spreadsheets (1011, 101F, 101D, 101G, 101G1, 101B, and 101A) to reflect i2G operations two weeks before the trial. However, the new data “filtered out” $28 million in paid commissions to alleged victims and included two years of data after i2G ceased operations. This data belonged to a separate company, Xtg1, which was well-known to the prosecution. It is important to note that the indictment period for i2G ended on December 31, 2014. However, all seven critical spreadsheets which were used as evidence that i2G was a pyramid scheme with a 96% loss rate, extended until March 2017. These spreadsheets formed the foundation of Keep’s analysis and were used extensively throughout the trial.
In 2017, the government obtained data from Jerry Reynolds (7240) that included “all I2G transactions”. This data revealed a total product revenue of $40,398,505.71 and total commissions paid to I2G distributors amounting to $38,116,346.38. These figures contrasted sharply with the significantly lower numbers presented to the jury in cases 101i and 101F, which reported earned commissions of $9,512,603.52 and gains of only $7.5 million. Specifically, the accurate data from Reynolds indicated $28 million in “greater gains” and “lower losses” than those represented to the jury. Moreover, the commissions paid showed that I2G earnings were considerably higher than those typically in multi-level marketing companies.
The government “knew” the commission totals on spreadsheets it ordered. The government knew that “victim investor” losses in US 007240 did not align with its “loss” narrative. Rather than disclose that the anticipated losses were non-existent, it attempted to impeach the exculpatory data (007240) and order new data which would “filter out” the majority of commissions earned.”
Two weeks before the trial in 2022, the government met with Jerry Reynolds and subpoenaed new data that filtered out 80% of the commission earned and “used” by their alleged “victim investors.” The “filtering out” of 28 million dollars in earned commissions (which Reynolds affirms) was a deliberate choice to misrepresent I2G gains and losses.
Four key government witnesses falsely represented the “manipulated data” as total I2G gains and losses. The government’s failure to correct extensive false testimony by their key witnesses violated its obligation under Napue.
The data in 101i and 101f were used extensively with fourteen witnesses to create the illusion that many “victims” were losing money. In reality, every purchaser of Emperor products made significantly higher gains and lower losses than presented in 101i data. No representation of gains or losses associated with any Emperor distributor was accurate. The false losses in 101i and 101F extended to the improper summary charts 230 and 232, as presented by Agent McClelland. The government acknowledged that the summary charts were improper in their appeal brief but failed to disclose that the withheld “underlying data” amounted to 28 million dollars in commissions paid to “alleged victims.” The misconduct extends to the appellate attorneys, who failed to correct the falsehoods and used them as evidence in her brief.
The introduction of this data violated Rule 702, which mandates the use of reliable evidence. To prove fraud, it must be demonstrated that there were actual losses directly resulting from a misrepresentation. In the i2G case, all alleged “losses” were fabricated by “excluding the actual “gains.” The government failed to rectify false testimony provided by four key witnesses on manipulated data, violating the Napue principle.
An affidavit from Reynolds confirmed that all the gains and loss data in document 101i was false. In its appeal brief, the government acknowledged that key commission data had been “filtered” out of 101i, but argued that it never claimed to show “truthful” losses. Instead, the government contended that the defense should have discovered the misleading data sooner. The prosecution misrepresented the $28 million in “filtered commissions” as “missing funds” in offshore bank accounts, which influenced the i2G Court to believe that these “missing funds” actually existed. These data manipulations were deliberate efforts to falsely inflate losses while concealing known gains, all to support the narrative of a “pyramid scheme.”
The government also “knowingly” presented non-I2G data as I2G data. Two years of critical data belonged to XtG1, a separate company that launched after i2G had closed. This included over $4 million in sales and 4000 distributor enrollments from XtG1. The government knew about xtg1, per its own exhibits and witness testimony. It knew that key seven spreadsheets admitted to the jury included data up to March 2017, two years After I2G ceased all operations.
The government pushed a “data-driven” case to prove a pyramid scheme, knowing it required accurate and dependable data. Government witnesses prove the government’s knowledge of its false data representations. For example, FBI Agent McClelland testified that Reynolds’ records indicated $40 million in paid commissions. The government shared the same knowledge with paid commissions totaling $38,116,346.38 and total product purchases amounting to $40,398,505.71. This data (7240) was subpoenaed and known seven years before the trial.
FBI Agent Sauber acknowledged many data inconsistencies during Maike’s sentencing trial. These inconsistencies included un-deducted gifted positions, unpaid transactions, unaccounted refunds, customer spots, waived auto-ships, and Xtg1 transactions outside the indictment timeline. These errors contributed to a staggering inflation of the loss figures presented in 101i at the trial. Sauber’s awareness of these issues reflects the government’s awareness. Ultimately, these data inconsistencies inflated losses by millions of dollars.
Reynolds provided an affidavit that the information in 101i was false. He acknowledged that he complied with the government’s request to exclude key commission data that substantiated these inaccuracies. Reynolds denied the false statements attributed to him about “problems” in the original data and confirmed that the original data (7240) was valid.