Feds raid Internet firm, suspecting a Ponzi scheme

He's a part-time musician who fancied himself a Stevie Ray Vaughn play-alike, a would-be guitar hero whose day job was making piles of money through Internet-based businesses. He also was convicted of not paying his taxes.

Now, Steven Mark Renner, 54, could find himself in even deeper trouble with the government.

Federal agents on Tuesday raided a Renner-owned business in downtown Minneapolis -- Inter-Mark Corp. -- looking for evidence of an alleged fraud that sources say may have attracted tens of thousands of customers worldwide, including in Canada, China and Russia.

As agents wheeled out carts carrying files and computers from two office suites housing Renner's business, officials said they are investigating a suspected Ponzi scheme run via the Internet.

While they didn't go into detail, people who know Renner's company and the many ways it makes money say a probable target of the probe is iNetGlobal, an Internet service provider and marketing company that has attracted more than 60,000 "members" seeking to get rich at home.

In all, the alleged fraud could involve as much as $1.2 billion -- based on iNetGlobal members paying $2,000 each to join the "club."

No one answered Renner's home phone on Tuesday, and a call to his attorney was not returned. But a review of Renner's websites, including the one for iNetGlobal, showed that the company claims to be one of the top Internet service providers for businesses "in the world today" and that as of Feb. 15, it had more than 66,000 members worldwide.

Knock on the door

Agents with the Secret Service, IRS-Criminal Investigations, the FBI and the Minnesota Financial Crimes Task Force arrived at Renner's offices at 250 2nd Av. S. about 10 a.m. Tuesday, company employees said.

Within minutes, employees were told to leave the offices as gloved agents began poring over business files and company computers. About a dozen or so employees stood outside the offices as agents locked the doors and restricted access back into the suites housing V-Webs, an online and video company, and iNetGlobal.

The search lasted throughout the day.

Around noon, two agents wheeled a cart carrying several boxes out of the V-Webs office. An hour later, agents wheeled out two more carts, holding personal computers and laptops.

According to John Kirkwood, the Secret Service's special agent in charge in Minneapolis, the search is "part of the Secret Service's investigation of a suspected Ponzi scheme that is headquartered in Minneapolis and that is operating over the Internet."

Kirkwood added that the Secret Service, under a court order, will seize money in several bank accounts that "are believed to hold proceeds of this alleged fraud."

A spokeswoman with the U.S. Attorney's Office said she could not provide additional details.

Mark Kallenbach, an attorney for Inter-Mark, and the company's newly hired CEO, Bob Kinsella, were at the scene Tuesday morning. Kallenbach said V-Webs and iNetGlobal are part of Inter-Mark Corp., a business wholly owned by Renner.

Renner, who once used his deep pockets to take out expensive ads to plug his music performances, was convicted in December on four counts of tax evasion for dodging more than $330,000 in federal taxes. He is awaiting sentencing.

Kallenbach described Inter-Mark as a fast-growing company of 60 to 70 employees that offers various online services such as Web design, Web hosting, graphic design and online public relations.

He said that Tuesday's raid will probably put the company out of business and its employees out of work.

"This company does legitimate business," Kallenbach said. "They put in terrific new management. It's sad."

Kinsella said he joined Inter-Mark at the end of December to help with structural aspects such as accounting and human resources. "I don't know the X's and O's of this company," he said.

Internet riches

But a man whose business is affiliated with Inter-Mark -- yet who insisted "I'm not a part of this craziness" -- said he suspects iNetGlobal is the target of the investigation.

The man, who did not want to be named for fear of reprisals, said the company is essentially a "pay per click" operation that charges its worldwide members $2,000 each to join. In exchange, members make money for surfing the Web and "clicking" access buttons to myriad sites. Every time somebody clicks a button -- in China or Canada or Russia -- club members make money, he said.

According to iNetGlobal's literature and the company's website, part of its operation includes helping people make money by working from home. According to Renner's website, www.steverenner.com, iNetGlobal sponsors conferences nationwide to tout its money-making prowess.

In a biography posted on his website, Renner describes himself as "an Internet Marketing Expert and bestselling author of "Million Dollar Secrets," and "Creating a Million Dollar Business (Home Study Course)."

Renner writes that he has been marketing online since 1998 and has built a network of more than 250,000 affiliates with more than $60 million in online sales.

"I have been blessed to really have gotten in at the right time with Internet marketing. Back when I started online (1998) things were a lot easier. It's harder now to make money online, but armed with the right training and resources you can compete effectively in today's Internet," Renner wrote.

The man said the company has been making about $1 million a month and is adding to its total of more than 60,000 members every week.

Staff writer Paul Walsh contributed to this report. James Walsh • 612-673-7428