Prelude 2004
The Blue Hippo Swindle

The dancing Blue Hippo seemed harmless enough. Some people still remember the Blue Hippo company's late-night television advertisements in 2004, back when George W. Bush was president. Blue Hippo promised to sell computers to people with bad credit. "I saw them on the Christian station," recalled one jilted shopper.

Customers were encouraged to call a toll-free number, pay the $99 sign-up fee, and agree to have $39.99 taken from their bank account every week. Once a certain number of payments were received, Blue Hippo promised to ship the computer, printer, flat screen TV, or whatever else the customer ordered. Some were promised rebates. Months and years would pass. Blue Hippo took money out of people's bank accounts. Many customers received nothing. By 2005, Maryland's consumer protection division was flooded with complaints about Blue Hippo. People warned each other on consumer bulletin boards.1 The personal complaints are heart wrenching.

"M.A.E. was looking to get The Boy a laptop for Christmas," wrote Larry. "She got suckered by this outfit calling itself Blue Hippo. To make a long story short, they told her she could get a laptop for $600, then sold her a $300 desktop system for $2000. She called and canceled the order, and they kept taking money out of her account anyway."

"On December 5, 2006, I contacted Blue Hippo to purchase a computer," wrote Linda. "After 6 months I had not received my computer but my account was being deducted every week . Since then I have canceled the order and requested my refund. I have called on many occasions only to get the runaround. It is now January 3, 2008. I get a recording saying an account specialist will help me shortly. After 45 minutes I'm still waiting. What kind of scam is this?"

"It has been 11 months," wrote Valerie on a consumer bulletin board. "Needless to say I have canceled my account and stopped payments on this computer. I received a letter from a law firm, Hosto, Buchan, PLLC, to garnish my payroll for this computer that would have cost $500 at Walmart. I will be fighting this." The law firm that Blue Hippo hired to collect from their customers, the Arkansasbased firm Hosto Buchan, has the motto, "You Concentrate on Your Business. We Make Sure You Get Paid."2

"They have taken a little over $1,000 from my checking account," wrote Vicky. "Finally I put a stop-payment on that and reported it to the attorney general in their state . I want my money back."

"I ordered a Dell Computer from Blue Hippo in February 2008 and still not received it," complained James M. "Every time you call it's always a different lie one after another . I am a senior citizen and can't afford to throw money in the toilet. All together they have taken $753.82 from my checking account."

"I have called multiple times and no one there can tell me who the CEO or President is," wrote another Valerie. "I've been told that the employees don't have supervisors that they report to. So, whoever runs this scam operation, he has his ### well covered."

Valerie has no idea how right she was. Joseph K. Rensin, the man responsible for the scam, indeed did have his ### and assets well protected. Rensin was CEO of Edison Worldwide, the company that wholly owned Blue Hippo and was based in Windsor Mill, Maryland. In 2007, the Maryland attorney general announced a settlement with Blue Hippo. The company agreed to pay restitution to Maryland customers who had been ripped off. But Blue Hippo kept going with their marketing in other states.3

Eventually, the Federal Trade Commission sued Rensin, claiming that his wholly owned company, BlueHippo Funding LLC, and its subsidiary, BlueHippo Capital LLC, had defrauded more than 50,000 customers by taking in $14 million payments for which no products where delivered. In 2008, the FTC won a judgment in the amount of $13.4 million against BlueHippo, but Rensin was not named in the judgment. In 2009, BlueHippo declared bankruptcy. It took another couple of years, but the government finally started to pursue Rensin personally for these fees. But Rensin was well shielded, with help from several specialized attorneys and accountants.

In 2001, Rensin established an "asset protection trust" in the Cook Islands, a remote outcropping of rocks in the South Pacific, 560 miles northeast of New Zealand. The trust, which he named the Joren Trust, was a specially designed mutation pioneered in the Cook Islands. As we will discuss later, such trusts are now available "on shore," in trust haven states like South Dakota. Rensin is both the "settlor," the creator of the trust, and the beneficiary. He appointed a trustee who administers the trust according to terms created by Rensin.

We will discuss in more detail the central role of trusts in hiding wealth. But the important thing to understand is how Rensin's trust created a fictional legal "ownership limbo," where a grifter like Rensin could argue that he was not technically and legally the owner of the assets in the trust. Such a trust exists to frustrate people and governments trying to hold someone like Rensin accountable for their actions, whether they are creditors, tax authorities, law enforcement officials, or former spouses.

Over the ensuing years, as creditors and the government pursued Rensin, he was well armored, deploying some of the most aggressive wealth hiding and asset protection strategies available in addition to his offshore trusts. He moved to Florida, purchasing a mansion with a "homestead exemption" that protected that asset from claims. He declared corporate and personal bankruptcy. He transferred funds in and out of his asset protection trusts in the Cook Islands. When authorities attempted to seize funds from his offshore trusts, he shifted the trustee from the Cook Islands to the dodgy debtor haven of Belize. His wealth defenders then went to the Belize Supreme Court and secured a judgment that the Belize trustee was not to honor any order of a US court to turn over the assets. During this time, Rensin lived the high life. He defied court orders to compensate customers, using his assets instead to finance a luxurious lifestyle, include spending on travel, hotels, restaurants, and fancy cars. He sold two houses in Maryland and bought a home in Florida. As trust lawyer Gray Edmondson observed:

Rather than downsizing, he continued to occupy a 5,000 square foot mansion, paid for in cash that rightfully belongs to his defrauded victims. And the contempt proceeding did not curb Rensin's spending. Just three weeks after the contempt hearing and three weeks before he filed for bankruptcy, Rensin bought himself a brand new Lexus.4

Years passed with the FTC and Bankruptcy trustee trying get a nickel out of Rensin. In February 2019, the Southern District of Florida ruled that Rensin could not hide behind a bankruptcy filing to shield himself from complying with a contempt order requiring him to pay $13.4 million for violating an FTC order. But Rensin was two steps ahead of the law. The Joren Trust, with its trustee in Belize, purchased several annuities that are exempt from creditors as per the general rule in Florida. But isn't this a fraudulent transaction, shifting funds while being pursued by the law? The legal game of cat and mouse continues. Lawyers and specialists in the field of wealth preservation are analyzing the case for its lessons and implications.5

Fifteen years after those television ads, thousands of Blue Hippo customers are still waiting for their money back. Meanwhile, as of this writing, Joseph Rensin is living in his home in Wellington, Florida. He posts pictures of his new puppy on Facebook, along with memes from rightwing political groups.6 Rensin's LinkedIn profile describes him currently as CEO of AGX Funds, a private equity fund. His profile states that between February 2001 and January 2010, he was Chairman and CEO of Edison Worldwide, the owners of BlueHippo. His profile claims, "Edison was the largest direct response merchandise lender in the United States. Over 250 employees, several hundred thousand customers and over $300 million revenue. We spent tens of millions of dollars on national TV, radio and print advertising and had multiple call centers in the US and worldwide."7

Why is it so hard to hold fraudsters like Joseph Rensin accountable? Why has Rensin never spent time in jail for willfully fleecing tens of thousands of customers while a repeat-offender shoplifter serves jail time? Consider the millions of people, disproportionately black and brown, caught up in the US criminal justice system for lesser crimes. And consider the victims of Rensin's scams, mostly low-income working people, with Blue Hippo raiding their bank accounts. Rensin could not have pulled off his multi-million-dollar rip-off without the assistance of a professional Wealth Defense Industry. How could Rensin, sitting in Maryland in 2001, create a trust in the Cook Islands? Who designed the "asset protection trusts" where someone could be both the settlor and the sole beneficiary? Who advised him to shift the trusteeship to Belize, with its pliable court system, to protect the funds of the trust?

Who were the lawyers, accountants, and wealth advisors who enabled Rensin along the way? How much money did...