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ASD Odds And Ends: Halloween Edition
Friday, October 31, 2008

BLOG UPDATE 4:15 P.M. EDT (U.S.A.):

Praebius traded 249,318 shares today, down 498,505 shares from yesterday's final figure of 747,823.

Volume opened light today, unlike yesterday, which saw Praebius exceed Wednesday's volume of 302,219 shares in the first hour and 20 minutes of trading.

Here are today's numbers, from Yahoo Finance:

9:42 a.m.: 40,000 shares
9:49 a.m.: 60,000 shares
11:25 a.m.: 92,000 shares
12:59 p.m. : 154,975 shares
1:05 p.m.: 183,561 shares
2:00 p.m.: 190,107 shares
2:29 p.m.: 225,107 shares
3:18 p.m.: 239,318 shares
3:56 p.m.: 249,318 shares

** No shares traded beyond 3:56 p.m.


Here, below, is our earlier post today:

In a case that has featured just about everything, it would be both coincidental and ironic if the eagerly awaited AdSurfDaily court ruling gets handed down on Halloween. The investigation into ASD's business practices is about alleged ghoulish behavior and, at the end of the day, will answer this question:

Trick or treat?

That question will be answered whether or not the ruling comes today. A ruling today, however, would be another memorable occurrence in this very memorable case.

We noted above that this case has featured "just about everything." The most recent example of this occurred on Wednesday, when ASD posted news that it had been negotiating a $200 million deal with Praebius Communications, a penny stock.

This was a strange claim, to be sure.

ASD just up and told its members that $200 million might stream into the firm over "several" years, owing to the Praebius deal. Companies that have joint news -- perhaps especially news that deals with large sums of money -- typically announce the news jointly.

ASD, however, announced the news individually, naming Praebius as an angel but not including quotes from Praebius or its executives or even any Praebius contact information. At the same time, ASD did not describe how it arrived at the $200 million figure, which led to thoughts that ASD simply had pulled the figure out of thin air.

Regardless, some ASD members helped ASD trumpet the Praebius news. There were positive Blog posts, forum discussions and more. One site that carries pro-ASD news used this excited headline, complete with an exclamation point:

"Praebius Venture!"

ASD removed the Praebius News Release yesterday, but didn't explain why on its Breaking News site. The website that trumpeted the "Praebius Venture" with an exclamation point also removed the news and the electrifying headline. Like ASD, it did not explain why.

We read reports yesterday from some very confused ASD members. Some were downright angry that ASD had offered a tasty cake and then had taken it away. Others were angry because they saw ASD's announcement as premature. They questioned whether there was any news at all if a real deal hadn't been signed.

It still is not clear today whether Praebius authorized the release of the news by ASD or whether the company had held any discussions with ASD, formal or otherwise, at any point in time.

Praebius, of course, could issue a News Release of its own and outline its version of events or specifically deny and disclaim what ASD had reported.

Even that, however, is a sticky wicket. It's hard to get a Genie such as this back in the bottle. ASD appears to have put Praebius in the position of having to defend a negative -- the "Do you still beat your wife?" problem. There is really no good answer to that question.

We're wondering today if any ASD members bought Praebius stock yesterday or the day before, based on the ASD report that it might receive $200 million over several years from Praebius. Almost 750,000 shares of Praebius' penny stock were traded yesterday, up from just over 300,000 the day ASD made the announcement.

Yesterday, Praebius stock traded at about 14 times the three-month volume. On the day ASD made the announcement, it traded at about six times the three-month volume.

What's clear right now is that ASD once again lost control of its message. On one of the pro-ASD forums yesterday, some ASD members were blasting other ASD members for having the temerity to call Praebius to confirm or deny the news ASD reported. The theory behind the scoldings was that Praebius just might back out of the deal if too many ASD members light up the switchboard.

Translation: Shut up. Just accept what ASD says, even if the message is ambiguous. How dare you use your own brain! It will be your fault if this deal doesn't come together.

The story then began to shift from "ASD was negotiating with Praebius" to "ASD was negotiating with a subsidiary of Praebius." Finally the story disintegrated, and was removed from the ASD Breaking News website. Only ASD knows precisely why, and it isn't telling.

posted by Patrick Pretty @ 7:32 AM, , links to this post



ASD Removes News Release Citing Potential $200 Million Praebius Deal
Thursday, October 30, 2008

Breaking News . . .

The AdSurfDailyBreakingNews website has removed a News Release that said the company had been negotiating a $200 million deal with Praebius Communications.

Why the News Release was removed is unclear. It was dated Oct. 29 and was posted yesterday. The News Release did not include quotations from Praebius or its executives, and it's not known if Praebius authorized the News Release.

Some ASD members said in forums they were thrilled by news that ASD appeared to have an exciting, new business partner. Others viewed the announcement as a cynical ploy designed to keep members' hopes alive as ASD continued to battle allegations of wire fraud, money laundering and operating a Ponzi scheme.

Earlier this year, some ASD members announced a partnership with Google and asked fellow members to click on Google Adsense ads, an apparent attempt at click fraud. A lawsuit filed in August by Florida Attorney General Bill McCollum accused ASD of misrepresenting its relationship with Google.

ASD also misrepresented an award ASD President Andy Bowdoin received from the National Republican Congressional Committee for campaign donations as an award for lifetime business achievement from the President of the United States, federal prosecutors alleged.

posted by Patrick Pretty @ 8:54 PM, , links to this post



Ad Surf Daily's Strange PR Blitz Continues With Praebius Claim

BLOG UPDATE 6:53 PM EDT (USA):

After final trades were tabulated today, Praebius' volume was 747,823. That's about 14 times the three-month average.

BLOG UPDATE 4:15 PM EDT (USA):

Praebius stock closed this afternoon at slightly below a penny, down fractionally from yesterday. Volume was extremely heavy -- about 13 times the three-month average. Final volume today, according to Yahoo Finance, was 697,823 shares.

That is more than double yesterday's volume of 302,219 shares. Praebius exceeded yesterday's volume one hour and 20 minutes into today's trading.

Here is a rundown of today's volume activity:

10:37 a.m.: 240,111 shares
10:46 a.m.: 311,525 shares
10:50 a.m.: 331,525 shares
12:02 p.m.: 333,512 shares
12:43 p.m.: 340,219 shares
2:36 p.m.: 495,019 shares
2:47 p.m. 602,872 shares
2:52 p.m: 617,212 shares
2:57 p.m.: 677,823 shares
3:14 p.m.: 697,823 shares

** No shares traded beyond 3:14 p.m.

BLOG UPDATE 11:15 AM EDT (USA):

Praebius stock opened this morning with a flurry of trading. By 10:50 a.m., volume reached 331,525 shares, according to Yahoo Finance. That's more than six times the three-month volume. Today's volume surpassed yesterday's in the first one hour and twenty minutes of trading. Yesterday's final volume was 302,219 shares.

Here, below, is today's initial post:

Praebius Communications issued a News Release today, but it was not about the deal the AdSurfDailyBreakingNews site reported yesterday. The company reported it was ready to launch "the last piece of our plan to become a full spectrum supplier for cable advertising system operators" and was "rolling out the final component of Addige.NET[,] which provides networked traffic and billing for our ad insertion system."

The News Release was rich with quotes from Praebius executives and included disclaimer language about "forward-looking" statements and a "Safe Harbor" statement.

Yesterday the ASD News Site reported Praebius and ASD were negotiating a deal that would pump an estimated $200 million into ASD coffers over several years. ASD did not quote any Praebius executives in its News Release. Instead it vaguely said "both Praebius and ASD are looking forward to continuing negotiations and implementation once the current restrictions are lifted."

Praebius, to date, appears not to have publicized any deal or any negotiations with ASD. It is unclear if ASD released the news with the knowledge and consent of Praebius, a publicy traded company whose stock traded for a penny yesterday.

Negotiations between companies normally are treated with great care and sensitivity. ASD is in deep trouble with the federal government and is at the center of a Ponzi scheme, wire-fraud and money-laundering investigation. Meanwhile, the company also is the subject of a Deceptive Business Practices lawsuit by Florida Attorney General Bill McCollum, who is seeking to dismantle ASD.

By naming Praebius yesterday, ASD linked Praebius to a company that is under intense federal and state scrutiny for alleged egregious business abuses. Companies that have shared news typically author joint News Releases that quote executives of the firms and provide specific and concrete details.

Sometimes companies that have joint news will author individual releases that describe the deal and offer quotes from executives. It's a way to establish credibility while giving the companies and executives an opportunity to shine, one of the fundamentals of Public Relations.

Praebius certainly didn't shine in ASD's News Release yesterday.

ASD, which has been under a dark cloud for months amid allegations that President Andy Bowdoin was a "convicted fraudster" who'd previously fleeced investors and now had disguised a securities firm as an advertising business, simply announced it had been negotiating with Praebius and the possibility of a $200 million deal at a date uncertain, an odd announcement in itself.

No supporting material or quotes from executives of either firm was provided. ASD did not even provide contact information for Praebius, which triggered Bloggers and people following ASD news to start researching the firm. Callers to Praebius' main number were told executives were unavailable for comment.

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posted by Patrick Pretty @ 7:40 AM, , links to this post



ASD, Amid Federal Probe, Says It Is Negotiating With Praebius Communications In $200 Million Deal
Wednesday, October 29, 2008

The AdSurfDailyBreakingNews site is reporting ASD is negotiating a joint advertising venture with Praebius Communications that would result in tens of millions of dollars in new revenue to ASD.

"Expected revenues for ASD are estimated to be $200 million over the first several years," the ASD News Site reported.

No deal has been signed, but the ASD News site reported that ASD was negotiating with Praebius prior to the government seizure of ASD's assets and that those negotiations would continue once ASD returned to business.

The U.S. Secret Service has seized at least $93.5 million in the ASD probe, and ASD's lawyers said in court filings that the company and its top executives are targets of a federal criminal investigation.

ASD President Andy Bowdoin advised a federal judge last month that he would take the 5th Amendment if called to the stand to testify in an Evidentiary Hearing ASD requested.

"A joint venture agreement was underway prior to ASD's shutdown and both Praebius and ASD are looking forward to continuing negotiations and implementation once the current restrictions are lifted," the ASD News Site said.

Praebius is a penny stock. It closed at a penny today, and has had a range between a penny and 51 cents this year, according to Yahoo Finance.

Praebius did not have a News Release on its website about joint-venture negotiations with ASD. Meanwhile, the News Release from ASD did not quote executives from either ASD or Praebius.

The ASD News site provided no details on how it arrived at the revenue figure of $200 million. It is not clear if Praebius authorized the release of the news by ASD.

Praebius has recorded average volume of about 51,000 shares over the past three months, but today recorded volume of 302,219 shares, according to Yahoo Finance.

Praebius' News Releases have included "Safe Harbor" language and forward-looking disclaimers under the Private Securities Litigation Reform Act of 1995.

ASD is not a publicly traded company and used no disclaimer language in its News Release talking about an estimated revenue infusion of $200 million through its possible joint venture with Praebius.

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posted by Patrick Pretty @ 6:53 PM, , links to this post



ASD: A Culture Of Insider Selling?

In recent days we've read reports about some ASD upline sponsors accepting checks from downline members and depositing the checks into personal bank accounts. These sponsors allegedly then transferred "ad packs" from their ASD accounts into the accounts of the people who wrote the checks.

In other words, the sponsors sold "ad packs" for cash. Their instant benefit was to enrich their bank accounts without having to rely on ASD to pay them. The benefit to the purchaser of the "ad packs" was to get a head start on surfing for cash inside ASD and not have to wait for ASD to post their purchases. The benefit to ASD was that it didn't have to make pay-outs to inside sellers of "ad-packs" because incoming members were taking care of that by writing checks to upline sponsors.

If a person ordered "ad packs" through ASD, he or she could not begin to earn surfing cash until ASD got around to posting the purchase. Upline sponsors allegedly solved that problem by bypassing ASD and selling "ad packs" directly, a neat, little off-the-books trick.

Such side-dealing speaks to the absence of internal controls at ASD. If a member had a high number of "ad packs," he or she simply could bypass the ASD "teller," enter the vault, remove the number of "ad packs" requested by the downline member, accept cash in return and perform the transfer.

There is a general allegation, of course, that ASD was a seller of unregistered securities. The forfeiture case uses the language of wire fraud, money-laundering and conspiracy, citing unnamed co-conspirators. The government believes ASD was a criminal enterprise and had help extending the branches of criminality.

If the government is able to demonstrate that ASD was an unregistered securities business, for instance, any person who helped ASD sell unregistered securities could be in trouble. But people who sold "ad packs" for cash may find themselves in a secondary heap of securities trouble. The trouble doesn't end there, however, because this is a case about money-laundering and wire fraud. Prosecutors could make the claim that ASD members, as individuals, were using ASD to launder money and keep personal income off the books.

In earlier columns we wrote about the duty of the U.S. Secret Service to keep the money supply free of pollution. The government's acts against ASD were designed to contain a pollution threat at the source, just as the Coast Guard tries to contain an oil spill at the source and a pest-control business tries to contain a cockroach infestation at the source.

If the reports about ASD upline sponsors making cash side deals are true, it means the pollution threat may be wider than initially believed. Members who made side deals could have infected their local banks -- not just with ASD cash, but with cash from downline members. Any deposits in those banks that resulted from side deals could be fruit from a poisonous tree.

The import of this is that some ASD members seem to have found a way to make ASD a business within a business. By bypassing ASD and selling "ad packs" for cash, they were, in effect, getting paid by ASD customers, not ASD.

Members already are making the claim that ASD's inability to post member payments in timely fashion contributed to this alleged culture of insider selling. That very well could be true, but it won't necessarily insulate the inside sellers from claims and possible prosecution.

ASD did not guarantee rebates. But members reportedly could take that pesky problem off the table simply by selling "ad packs" to downline members for cash value, thus reducing the seller's risk of cash losses or cash-equivalent losses if ASD failed or the government shut it down.

By selling "ad packs" in side deals, the member could create guaranteed income while, in theory, transferring culpability to ASD in the event of a failure that prevented the buyer of the side-deal "ad packs" from cashing out using ASD's traditional means.

In the wake of ASD's legal troubles, some buyers who acquired ASD "ad packs" in side deals with upline sponsors appear to be putting the heat on their sponsors to return the money. And some sponsors appear to be balking at returning the funds.

If an upline sponsor sold $50,000 in ASD "ad packs" to downline members in side deals, for example, that member now has trouble from the downline members and potential trouble from the government. It's one heck of a box to be in -- and we're just using $50,000 as an example. The trouble exists whether the actual figure is less or more.

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posted by Patrick Pretty @ 7:58 AM, , links to this post



Ad Gate World: Critics 'Vile' And 'Spiteful Human Beings'
Tuesday, October 28, 2008

After several days, no one has stepped forward to claim ownership of AdGateWorld, the new autosurf that claims incorporation in Panama.

Promoters, however, are telling prospects that AdGateWorld presents a ground-floor opportunity. And they're telling them that Panama registration will keep the SEC, IRS, FBI and state attorneys general at bay.

Speaking of "at bay," promoters also are positioning AdGateWorld as an exciting, new eBay of sorts, a pitch that seems designed to transfer the sweet scent of eBay's brand name and success to AdGateWorld and diffuse customer objections about doing business with a Panamanian upstart.

In the world of politics, this would be called "putting lipstick on a pig."

The trouble with AdGateWorld is that promoters already have corrupted the message -- and this during prelaunch phase. In the past we've written about the wink-nod nature of autosurfs. AdGateWorld is just another example. People reflexively started selling it as an investment opportunity.

AdGateWorld has positioned itself as an "advertising" company. Promoters, however, already are pitching it as a get-rich-quick opportunity, too.

Here's a headline from one promotion:

"ADGATEWORLD (ASD CLONE) just launch (MANY BECAME RICH WITH THIS SITE!!)"

So, on one hand, you have a company that claims to be a legitimate advertising company and social-networking site. And on the other, you have promoters bragging about protection from the SEC, the IRS, the FBI, state attorneys general -- all the while comparing it to ASD and positioning it as a get-rich opportunity.

Unknown representatives of AdGateWorld appear to be trying to put the Genie Of The Mixed Message back into the bottle, but they're fighting a losing battle. On one forum, missives coming down from an unknown "AdGate Team" are declaring that AdGateWorld is not an ASD clone.

"AdGateWorld is NOT an ASD clone," wrote the "AdGate Team."

"Was Google a clone of Yahoo? The future plans for AdGateWorld go far beyond the original ASD model. Plans for an entire social network component, travel, lending and auction site are just the first of many innovations and income streams. We will also be creating a full video and steaming audio channel for further advertising capability. We have great admiration for those that came before us but we are going to blaze our own road in this industry."

And the "AdGate Team" already is creating devils, something ASD is famous for doing.

"Claims regarding AdGateWorld being a scam are completely unfounded," the "AdGate Team" wrote. "AdGateWorld is a social advertising community. This site does NOT offer an investment of any kind. All members should re-visit the pre-launch page and read the legal disclaimer. NO person that EVER purchases advertising on AdGateWorld will ever feel that they did not understand the rebate program or the concept.

"In conclusion," the "AdGate Team" continued, "many people are simply spiteful human beings that we must tune out to move on with our lives and create a positive environment moving forward. Make up your own decisions and do not put your destiny in the hands of such vile characters."

Here is an autosurf firm in prelaunch -- one that sent a message to recruit early promoters in what was called an "Angel" round -- referring to critics as "vile characters" and "spiteful human beings."

That's exactly what ASD President Andy Bowdoin did when he referred to prosecutors as "Satan" -- and what other ASD members did when they called prosecutors "Nazis" and derided one member of the prosecution team as "Gomer Pyle."

It's interesting that the "AdGate Team" didn't choose to correct the record on member claims that the company provided protection from the SEC, the IRS, the FBI and state attorneys general.

No, what the "AdGate Team" did was to deflect attention away from people's legitimate concerns and come up with new demons for members to focus on. And instead of saying members already had pushed the envelope too far, the team instructed members to go back and read the legal disclaimer.

The entire message is mixed: Why incorporate in Panama if everything is on the up-and-up? Why mention the SEC if you're not concerned about being targeted with a securities prosecution? Why not lease shiny office space in the United States and promote your "rebate" program if you're confident it passes muster? Why even compare the program to ASD, when Feds have seized nearly $100 million and ASD appears to be the target of a criminal probe that could result in people going to jail?

Why create an "Angel" round amid these circumstances and list registration in Panama as a net plus?

If you'd like more information on how the SEC views such matters, visit Eagle Research Associates.

Also, visit the SEC.

posted by Patrick Pretty @ 8:06 AM, , links to this post



Shocker: AdGateWorld Promoter Claims IRS/FBI Protection
Sunday, October 26, 2008

Not only does Panama-based AdGateWorld insulate members from the SEC, it also prevents "harassments" by the IRS, FBI and state attorneys general, according to a promoter of the new autosurf.

"Limitless financial growth in a secured environment ( No IRS, FBI or State Attorney harassments)," one Blogger advised readers.

Screen shot: AdGateWorld promoter says no 'IRS, FBI or State Attorney harassments.'

If government protection weren't enough, the Blogger went on to say that AdGateWorld would be a great way for nonprofit groups to spread the good word about themselves.

Citing a note from attorney Jack Schrold, who has had problems with the FTC and once was suspended from the Florida bar upon conviction of a felony, the Blogger advised readers that AdGateWorld was being designed to appeal to businesses and nonprofits.

The same Blogger told readers that Schrold "has formed a group of attorneys and marketing professionals to launch a much improved version of ASD."

Schrold has downplayed his role in AdGateWorld online, but new members are making the claim that he is part of the AdGateWorld brain trust. No one has claimed ownership of the firm, which is using the address of a holding company for a law firm in Panama.

This Blogger wasn't the first to make the "formed a group" claim about Schrold and AdGateWorld; the same or similar language appears on other Blogs and elsewhere on the Web.

Today's Blogger, however, published a copy of a correspondence purported to be from Schrold. The headline on the section of the post was titled "From Jack Schrold."

Here is a copy:

This is your invitation to participate in a project that I have personally been involved in creating over the last few months. Professionals from the legal, marketing, advertising and international banking arena have all played a crucial role in its development.

This new online entity is called AdGateWorld dotcom

It is a revolutionary merger of a social network type of site such as Facebook with the amazing direct sales and online marketing potential of a Google or Ebay.

It will be the ultimate cash flow and advertising method. It is membership based and gives each person the opportunity to generate incredible returns based solely on advertising revenue that is shared from the company daily. Unlike Google or Yahoo, AdGate members will share in 50% of all revenues generated every day through our advertiser rebate program!

Are you getting paid for watching TV commercials or viewing web sites now?

AdGateWorld is the first 'social advertising' site that WILL include everyone in the massive online advertising bonanza.

What's the catch? Simple. Each member is an advertiser AND a viewer. That's it. No one is required to ever buy or sell products to anyone. We have the ultimate product…..advertising. Recruiting others is 100% optional. Of course the shared site revenues accelerate based on our unique ADGATE viewer delivery method and ad packs purchase by our growing number of members/viewers.

The site will not be open to the public for pre-launch for another few weeks BUT I am allowing a small group of friends and associates to get into the database during this 'Angel Round'. Membership is f-r-e-e so that when we open you can test drive the concept for yourself.

On the pre-launch page you can view our short intro video explaining the concept. Webinars and training sessions will be available after our full launch.

No website or product to promote in the AdGate? No problem. We will show you how to get affiliate links and have your own online advertising empire within moments.

This company is really a family of 'members' from many others programs that had a wonderful vision. We will be working with non-profits organizations and have lots of features never seen before.

For instance, people can advertise in a specific category AND localize there ad as well. This open the door for local advertising by professionals, service providers, etc.

To take advantage of my private 'Founding Member' invitation to be included in the pre-launch database, [link removed]

Best Wishes,

Jack Schrold,

AdGateWorld Legal Counsel

Events over the past few days have been remarkable: No one wants to take credit for owning AdGateWorld, but promoters are selling it by comparing it to ASD and thumbing their noses at the SEC. Today, of course, the Blogger dangled a taunt at the IRS, the FBI and state attorneys general, while incongruously mentioning that AdGateWorld was good for nonprofit groups.

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posted by Patrick Pretty @ 7:06 AM, , links to this post



ASD Cash Generator: Free Beer For The Loyalists
Saturday, October 25, 2008

This post is about some ASD odds and ends and concludes with free beer . . .

Golden Panda Offline: We noticed last evening that the GoldenPandaAdBuilder website is offline. That continues to be the case this morning. The site is throwing a server error. Why that is happening is unclear. As reported previously, the sites for ASD Cash Generator and LaFuenteDinero also are offline.

ASD and LaFuenteDinero have been offline for weeks. The Golden Panda site previously had been pointing visitors to a Department of Justice website.

No Court Ruling: ASD members continue to wait to hear if seized funds will be returned to the company and whether ASD can implement a compliance plan under court supervision.

AdGateWorld: The new autosurf (prelaunch) has been in the news this week. One forum reports the company has generated 3,000 sign-ups, despite ASD's legal problems, the seizure of nearly $100 million in the ASD case, the prospect of a criminal investigation into ASD's business practices and previous successful prosecutions of autosurfs.

Two Mini Fantasy Scenarios: During the U.S. summer, Andy Bowdoin talked about bringing the legal hammer down on "people that needed it" and ASD members cheered him on in forums, gleefully calling critics names and laughing at them. This peculiar form of vulgarity only added to ASD's problems. Many ASD members simply refused to wear a juror's hat and preferred to intoxicate themselves on the company line.

How funny are either of the two mini fantasy courtroom scenarios below?

Mrs. Smith

Prosecutor: Mrs. Smith, how old are you?
Mrs. Smith: I'm 86.
Prosecutor: Do you own a business?
Mrs. Smith: Heavens, no!
Prosecutor: But you advertised on ASD?
Mrs. Smith: I'm not sure. My son put me in it, saying I could make a lot of money on the Internet with a man who was a good Christian.
Prosecutor: Mrs. Smith, do you own a computer?
Mrs. Smith: Heavens, no!

Mr. Smith

Prosecutor: Mr. Smith, you're Mrs. Smith's son, correct?
Mr. Smith: Yes.
Prosecutor: And your Mom is 86, correct?
Mr. Smith: Yes.
Prosecutor: And she has been long-retired and doesn't own a business or a computer, correct?
Mr. Smith: That's correct:
Prosecutor: Why did you recommend that your mother advertise on ASD when she wasn't a businesswoman, has been long-retired, didn't own a computer and had nothing to advertise?

Free Beer: ASD has been serving it up to the loyalists. The conference calls were free beer. During the first weekend after the seizure, members were told it was a small misunderstanding with authorities that would be solved in days; that was free beer. When that didn't happen, members were told the prosecutors were "Satan" -- more free beer, with a pretzel snack of someone to hate while drinking all the free beer and flexing all the free-beer muscles. The contest in which members could submit ideas on how ASD could improve operations upon its restart was more free beer. The idea that ASD was negotiating with a potential $200 million account was more free beer. When Bowdoin advised the court he'd take the 5th Amendment, an ASD member explained that Bowdoin was too honest to take the witness stand: more free beer.

In the past couple of weeks, some folks finally asked the key question: Why is ASD serving us all that free beer -- and why don't I feel good after consuming it?

Productive discussions among ASD members are taking place on the ASD Business Information Zone forum, a forum that appears to have come to life because some ASD members were tired of the slow-motion and real-time vulgarity present at other ASD forums, where folks still were intoxicating themselves on free beer.

posted by Patrick Pretty @ 6:35 AM, , links to this post



AdGateWorld Mystery Deepens
Friday, October 24, 2008

An address for AdGateWorld listed in the Terms of Service for the new autosurf company is the address for Panama Offshore Services International Inc., a holding company for a law firm that practices in Panama.

There are repeated references online to the address -- 41 Street, off Balboa Avenue, IPASA Building, 3rd Floor, Bella Villa District, Panama City, Panama.

The Terms for the new autosurf appeared online yesterday, listing Global Gate Media of Panama as the owner. In some places, the Terms used the acronym "ASD" instead of AGW. The company reportedly is being put together by former members of AdSurfDaily, which used the acronym ASD.

Here are four instances in which the acronym ASD was used in the ADGateWorld Terms:

Screen shot of section of AdGateWorld Terms in which "ASD" was used.

There also is a reference to ASD being indemnified from losses. It is unclear why the reference to "AdGate.com" was made in the Terms, instead of "AdGateWorld.com."

Headlines about AdGateWorld are screaming across the Web. Here are a few samples:


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posted by Patrick Pretty @ 7:35 AM, , links to this post



Observations On The Phenomenon Of ASD
Thursday, October 23, 2008

Editor's Note: This is a guest column on AdSurfDaily by Lynndel Edgington of Eagle Research Associates.

Since my introduction of ASD Cash Generator on July 8, it has been a very interesting three and a half months. I was contacted about ASD by a listener to a radio show I was a guest on speaking about Internet Investment Scams on July 7. I actually had been asked to take a look at this company some 9 months earlier, but after review it seemed it was going nowhere, and felt it would die out on its own due to lack of interest. When I revisited ASD on July 8, I could hardly believe my eyes. It was clear that something had happened to generate this much excitement and explosive growth.

In researching ASD, it soon became apparent that this growth was due to several factors, but the primary factor was major MLM Leaders joining ASD and promoting it to their downlines; who in turn promoted it to anyone they could convince to join. To add to the circus atmosphere, ASD was conducting rallies that fueled the fire of exponential growth. It seemed money and people were coming out of the woodwork to join ASD. There was only one problem: Most of the people joining had no clue as to what they were joining, but knew they would get back more money than they put in to ASD in a few months' time.

It was at this time very clear ASD was in real trouble, but to the faithful it was nothing but roses, sweetness and light and making money. Clouds were forming on the horizon, but the faithful weren't taking the time or bothering to see them coming. No matter what excuse was given for ASD not performing, the faithful accepted it as just part of a growing business. After all, this is what happens when a business grows so fast. While some grumbling was heard, it was soon drowned out by the faithful and explained away. No one wanted to ask the hard questions, and if they were, no one wanted to hear the answers. Without knowing it, the divisions were beginning to form within ASD.

It seemed that no matter what information was revealed about Andy [Bowdoin] that was contrary to the story Andy had told, no one wanted to hear it, and in fact they refused to believe anything negative about Andy even if it was true. It was at this time the storm clouds had arrived, and the thunderstorm was upon ASD -- ASD was raided. As with almost every Ponzi before it, the supporters of ASD defended their business model to anyone and everyone who would listen. They did do something that previous supporters of scams had not done: They began a letter writing campaign, at the urging of Andy, to anyone they could think of believing this would cause the government officials to change their minds. Actually what they did was help the government prove their case in many instances.

But the camp lines had been drawn. The late-comers and those who were not the heads of huge downlines, went into overdrive to defend ASD and Andy. Those who were the major promoters, and who also promoted 12DP, CEP, and PhoenixSurf quietly slipped into the background. Out of the 100,000, give or take 10,000-20,000, only a handful of ardent supporters still defend ASD and Andy. They should be wondering why the ones who got them into ASD, and were the ones bragging about how much money they were making with ASD are nowhere to be found on any forum defending ASD or Andy. Instead they have focused their anger on the government, while the true villains in this have slid away into the sunset. Well, they think they have slid into the sunset.

If pyschology students were working on their Masters or Doctorate degrees, they could come and study the ASD forums, and get a true education in the human psyche. For it has been on display for all to see. Bizarre now seems to be a mild term to describe the pro-ASDers, and it is going to be even more bizarre when the Judge rules against ASD's Emergency Petition. As the saying goes, "You haven't seen nothin yet!"

Lynndel "Lynn" Edgington is the Founder and President of Eagle Research Associates, Inc. Lynn has over 30 years of executive management and management consulting experience. He has worked and provided consulting services in the insurance, banking, nonprofit, credit union, and financial services industries. Lynn is a graduate of Ball State University with a Bachelor of Science Degree. He formed Eagle Research Associates, Inc., after spending 3 years researching Internet investment scams. Eagle has highly qualified team members, management team, and Board of Directors. Through Eagle's efforts, we have assisted in the closure of companies that stole over $1 Billion Dollars; and with the public's support, Eagle can do even more.

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posted by Patrick Pretty @ 6:28 PM, , links to this post



AdSurfDaily: DesMoines Register Says Thousands of Iowans Involved

Thousands of residents of Iowa spent millions of dollars in Ad Surf Daily, according to the DesMoines Register.

The newspaper reported one ASD event held at a golf club generated $1.6 million in sales. A separate event at a restaurant generated $900,000. In all, the newspaper said 25,000 Iowans may be involved. One promoter acknowledged bringing $5 million in business to ASD.

Florida Attorney General Bill McCollum may go after some of the top promoters, the newspaper reported.

Read the story in the DesMoines Register.

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posted by Patrick Pretty @ 8:17 AM, , links to this post



The Mystery Of AdGateWorld
Wednesday, October 22, 2008

In the past two days we've written about a new autosurf that is positioned for prelaunch and is accepting registrations. The name of the autosurf is AdGateWorld. We hadn't published the name until today, but references to it now are spreading virally across the Internet, so we've decided to publish the name.

AdGateWorld is being sold by participants as a Panama-based version of AdSurfDaily. ASD, of course, is in big trouble with the U.S. government. Among other things, prosecutors believe it is a securities firm masked as an advertising company. AdGateWorld promoters are selling ASD's troubles with the government -- which, to date, do not officially involve the Securities and Exchange Commission (SEC) -- as a reason to join AdGateWorld.

Indeed, AdGateWorld promoters are saying the company is outside the reach of the SEC. And they're saying it in Blog posts, forum posts and on free News Release sites. Only moments ago we read a promoter's News Release: Here are the headline, subheadline and lead:

Headline: New offshore surf program is a CLONE of ASD Ad Surf Daily
Subhead: There is a new surf program called Ad Gate World. What makes this program so special is that they are operating outside of the United States which means the SEC cannot interfere.
Lead: For a lot of people, the only question on their mind at this point is "HOW DO I SIGN UP??"

Two days ago we reported that AdGateWorld site work was referenced at scriptlance.com by a poster with the user name of "schrold." Elsewhere on scriptlance.com, "schrold" is mentioned as "Jack." We further reported that an attorney by the name of Jack Schrold had been disciplined by the Florida bar upon his felony conviction for knowledge of the commission of conspiracy and wire fraud and later was conditionally reinstated. At the same time, we reported that an attorney by the name of Jack Schrold had previous problems with the Federal Trade Commission. In addition, we reported that a person by the name of Jack Schrold had been a member of Greenback Street, which had a tie to ASD.

Today we are reporting that a person by the name of Jack Schrold was a member of ASD (member ID 17584), and that the name was used in ASD pitches for members of the U.S. military and their families. The ad described Jack Schrold as an attorney.

Jack Schrold pitch for ASD at ArmyWell-Being.org.

Here is part of the body copy of the ad:

I just saw an article on how difficult it is financially when a member of our armed forces is away for long periods of time. I thought I would share a possible answer. The link below will take you to an amazing site that pays a person for simply watching five minutes of ads per day. I have introduced this concept to clients of my law firm. I realized that spouses of soldiers could greatly benefit as well. Please feel free to contact me for assistance or questions.
Jack
http://www.asdcashgenerator.com/?ref=17584

The "schrold" poster as scriptlance.com repeatedly uses the word "our" in describing the AdGateWorld website. And a person using the name "Jack Schrold" has an AdGateWorld email address, according to a post pitching artistic services at the craigslist site for Greensboro, N.C.

Meanwhile, the phone number associated with Jack Schrold in the craigslist posting using the AdGateWorld address also is associated in a separate business with the attorney Jack Schrold.

Ownership of AdGateWorld remains a mystery. Promoters have posted snippets of communications reportedly from management, but the snippets were signed, "Senior AdGate Management."

Names would be released in "due time," according to one promoter's take on the management issue.

The AdGateWorld promotions we've read so far have been clumsy symphonies at odds with themselves. The service is being hailed as a safe, offshore alternative to ASD, one assembled by "big players" in ASD who want to locate the new company where the SEC can't dismantle it.

Indeed, the sales pitches themselves read like acknowledgments that ASD was an unregistered securities business and that AdGateWorld management can keep the long arm of the SEC away from it by doing business out of Panama.

Already the sales message is impossibly butchered; it reads like an invitation to be accused of conspiring to commit a crime, a message that thumbs its nose at authorities who still are busy making the case against ASD. The prelaunch sign-up page features the word "state" and a box for a Zip code, so it's clear AdGateWorld is being marketed to U.S. citizens.

AdGateWorld's logo shows ghost-like figures avoiding a red carpet laid out for them, and instead crawling or walking in worshipful fashion up a set of stairs to be humbled in front of a dark figure whose body helps complete the punctuation of a dollar ($) sign.

Still, we're left wondering how the very smart people who put AdGateWorld together managed to lose control of the message out of the gate. That's one of the things that created problems for ASD.

Could there be a very good, very plausible explanation for this marketing approach, which on the surface appears to be reckless? If there is, we'll let our readers know.

In "due time," of course.

posted by Patrick Pretty @ 8:31 AM, , links to this post



Portable And Proud
Tuesday, October 21, 2008

Some members of AdSurfDaily are promoting the new autosurf we wrote about yesterday, despite the legal trouble ASD is confronting.

One one hand, the U.S. government is sending a very strong message that, if you play the autosurf game, both your money and your freedom could be at risk.

But on the other hand, some ASD members appear to be saying, "[Blank] you and the horse you rode in on, Government! We're portable and proud."

This comes as no surprise. In the hours after the government's ASD intervention in August, some members raced to forums to promote other autosurfs, stressing the need for portfolio "diversity."

If the ASD case proved anything, they insisted, it was the need to be involved in multiple autosurfs in case one failed.

Here's part of the copy of a recruiter's promotion for the new autosurf:

ASD IS BACK . . . Sort Of!

ASD IS BACK . . . but with a new name, look and in a new jurisdiction:

There is a new program called [Name Deleted] that is a complete CLONE of Ad Surf Daily. However, this program is operating outside the United States which means the SEC (Securi[ties] [and] Exchange Commission cannot interfere!

For a lot of people, the only question on their mind at this point is "HOW DO I SIGN UP??" Well, here you go:

[Affiliate Link Deleted]

. . . After all, ASD had over 100,000 SATISFIED members. Let's not forget the fact that the ONLY reason ASD is not operating right now is because of the SEC.

[Name Deleted] is operating from Panama. This program is being run by Professionals that were big players in ASD and know the pitfalls as they went through them . . .

Yesterday we read forum comments from a person who said he'd lost more than $10,000 with ASD -- but he is actively promoting the new autosurf and has begun an ad campaign.

One cut-and-paste prelaunch post, reportedly from the headquarters of the new autosurf, was signed "Senior [Autosurf Name Deleted] Management." The same cut-and-paste copy appears in more than one place online.

So, it seems, people are promoting the new autosurf and don't have a clue about the company itself. Regardless, it's being pitched as something people can believe in.

Promoters are saying there's no downside to signing up right now and the brightest bulbs will register without delay.

Questions about management will be answered in "due time," according to one promotion we saw. What's important, the promoter stressed, was to suspend your disbelief and get in early.

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posted by Patrick Pretty @ 1:11 PM, , links to this post



Service Pitched As ASD 'Clone' Set To Enter Autosurf World
Monday, October 20, 2008

BLOG UPDATE 7:41 P.M. EDT (USA):

The post below is about the birth of a new autosurf, currently in prelaunch phase. This update is to:


Below is our earlier post on the new autosurf:

Another autosurf appears to be having a slow-motion birth and appears to be promoting a model very similar to AdSurfDaily.

The site appears not to be connected to ASD. Rather, some promoters for the new service appear to be trading on ASD's legal troubles to drum up business.

The autosurf is in prelaunch phase. Promoters already are talking about it online, declaring it a safe "clone" to ASD because it is registered in Panama and outside the reach of the Securities and Exchange Commission. There's a video about it on YouTube that says the company is "strategically" located for member safety, with a space-eye view of Central America.

"If you can click, you can earn," promises the video. The payout plan and commissions appear to duplicate the ASD model.

The domain appears to have been registered Aug. 18, just 17 days after ASD became aware of a federal investigation into its business practices and only 12 days after agents from the U.S. Secret Service and the Gadsden County Sheriff's Department raided ASD headquarters.

Feds seized $93.5 million in the ASD case. Meanwhile, Golden Panda Ad Builder, the so-called Chinese option for ASD surfers, has surrendered money agents seized from it and is cooperating in the probe of ASD.

Regardless, this new company appears to have entered the choppy autosurf waters -- waters made even choppier by the prospect of a criminal investigation into ASD's business practices. One of the core messages of the video is that you should consider making an ad purchase because the economy is unhealthy

The question, of course, is why would promoters of the new autosurf even mention the SEC if its operation is perfectly above-board? The early promoters are using free advertising sources (the existing YouTube video, blog posts, forum posts) to drum up interest, something that tends to undermine the assertion that people should pay the autosurf to advertise.

Why pay an autosurf to advertise your business if you can drive traffic to your website promoting the autosurf for free?

Why, rebates, of course.

People already are promoting the new autosurf, despite ASD's troubles. And they're even using ASD's problems as a reason to spend money on the new autosurf. Never mind that ASD's miseries are being talked about daily online in forums and in newspapers and on Blogs.

And never mind that a Florida legal firm is doing expensive and time-consuming legal work on ASD's behalf -- and that people promoting the new autosurf are mentioning the SEC and ASD in the same breath.

See a thread on the new autosurf at scam.com.

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posted by Patrick Pretty @ 12:35 PM, , links to this post



Andy Bowdoin Alabama Scam Outlined By St. Petersburg Times; Family Says Scheme Cost It $454,000
Saturday, October 18, 2008

AdSurfDaily President Andy Bowdoin immersed himself in luxury while investors in his Alabama mobile-telephone company lost hundreds of thousands of dollars in the 1990s, the St. Petersburg Times is reporting on TampaBay.com.

One family invested $454,000 in Mobile International and lost it all. Family members later sued, claiming Bowdoin and other executives paid themselves high salaries and bonuses, acquired tony office space, provided themselves deep expense accounts and purchased a Mercedes and a Lincoln Continental.

Bowdoin was charged with securities violations has been making restitution in Wilcox County, Alabama, at the rate of $100 per month, the newspaper reported.

Read the story in the St. Petersburg Times at TampaBay.com.

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posted by Patrick Pretty @ 7:51 PM, , links to this post



Part 4 Of ASD Fantasy Courtroom Scenario: 'Blank Pages'

Today we are presenting Part 4 of our fantasy courtroom scenario. It is called "Blank Pages." See the first two scenarios here.

See the third scenario here.

This scenario is fiction. The dialog is fiction. No government or ASD secrets are being divulged. (We don't know any government or ASD secrets.) The dialog is based on what already is in the public record or on the Internet about the ASD case. It is designed to make some of the issues more understandable.

Fantasy Courtroom Scene 4: 'Blank Pages'

Prosecutor: Mr. Jones, were you the creator of the video we just watched?
Mr. Jones: Yes.
Prosecutor: Did the video appear online?
Mr. Jones: Yes.
Prosecutor: What was the purpose of the video?
Mr. Jones: To introduce people to the ASD opportunity and get them to sign up.
Prosecutor: You would earn commissions if people signed up, correct?
Mr. Jones: Yes.
Prosecutor: How much could you earn?
Mr. Jones: Well, the sky was the limit, really. I'd get 10 percent of the member's advertising purchase, and if the member brought in new members, I'd get 5 percent of that.
Prosecutor: So, if a member bought $50 in ASD ads, you'd get $5? And if the member sold $50 in advertising to a new member, you'd get $2.50?
Mr. Jones: Yes. That's correct.
Prosecutor: But members could purchase more than $50 in ads, correct?
Mr. Jones: Yes. A member could purchase a low of $10 in ads and a high of $12,000 in ads. And if the member got special permission from Andy Bowdoin, he could purchase more than $12,000.
Prosecutor: If a member you signed up purchased $12,000 in ads, how much would you get?
Mr. Jones: I'd get $1,200.
Prosecutor: So, the more money a member would spend on ASD, the more money you'd receive?
Mr. Jones: Yes.
Prosecutor: ASD charged $1 per click, correct?
Mr. Jones: Yes.
Prosecutor: So, a person who spent $50 would get 50 clicks, and a person who spent $12,000 would get 12,000 clicks?
Mr. Jones: Yes.
Prosecutor: OK, Mr. Jones, getting back to the video: You created it to market the ASD business, correct?
Mr. Jones: Yes.
Prosecutor: And ASD called itself an advertising company, correct?
Mr. Jones: Yes.
Prosecutor: So, you were helping ASD sell advertising with your video?
Mr. Jones: Yes.
Prosecutor: Did you advertise your video on the ASD network?
Mr. Jones: No.
Prosecutor: Why not?
Mr. Jones: A couple of reasons . . .
Prosecutor: Let's take them one at a time, Mr. Jones. What was one of the reasons you didn't advertise your video on ASD?
Mr. Jones: Well, I figured the people viewing ASD ads already belonged to ASD, so there wasn't a whole lot of sense in marketing ASD to people who already were involved with ASD.
Prosecutor: Did you ever see an ad for ASD while you were surfing ASD?
Mr. Jones: Yes. We just watched it in my video, the one you just played. Part of the video was to give viewers an 'inside look' at ASD, so I recorded part of a surfing session to give them a look at the rotator and to show them how easy it was to click on ASD ads. Two of the first four ads that appeared in the video were ads for ASD.
Prosecutor: Did that make sense to you?
Mr. Jones: Well, yes and no, but mostly no. The 'yes' part is that it might have been possible to get an ASD sign-up inside ASD, but I didn't think it very likely. The 'no' part is that I figured a person already surfing inside ASD already was a member, so it didn't seem a good idea to market ASD from inside ASD, from the point of view of a recruiter.
Prosecutor: ASD ads cost $1 per click, correct?
Mr. Jones: Yes.
Prosecutor: Mr. Jones, in your video, you recorded part of an ASD surfing session, correct?
Mr. Jones: Yes.
Prosecutor: And in that video, you clicked on seven ads, to show prospects how easy it was to click on ASD ads. Correct?
Mr. Jones: Yes. Correct.
Prosecutor: So you caused each of those members to lose $1 each, or a combined $7, because ASD ads are $1 a click, correct?
Mr. Jones: Well, I never thought about it that way -- but, yes, I guess I did cost them $1 apiece. They would have made it up with the ASD rebates, though.
Prosecutor: So, there was a way to make money with ASD even if people clicked on ads and didn't buy anything? And that way was the rebates? Your demo ad cost members $7, you had no intention to buy, but they could make up that $7 through rebates. Correct?
Mr. Jones: Yes. Correct.
Prosecutor: Mr. Jones, we'll return to the issue of the rebates in a few minutes. For now, I'd like to ask you this: Did a person who joined ASD get a webpage that he or she could use to recruit new members?
Mr. Jones: Yes. The affiliate ID's were embedded on the page, so a member would get credit if somebody signed up under them.
Prosecutor: Could the member advertise their ASD website on ASD?
Mr. Jones: Yes.
Prosecutor: But that didn't make much sense to you, because people surfing at ASD already were members of ASD, correct?
Mr. Jones: Correct.
Prosecutor: Was there any other way for members to advertise ASD through ASD?
Mr. Jones: Yes. If a member owned a domain name, they could put the URL for that domain inside the rotator at ASD, and set it up to redirect to their ASD affiliate website.
Prosecutor: So, if you belonged to ASD, you automatically had a business to advertise -- ASD itself, correct?
Mr. Jones: Correct.
Prosecutor: Did ASD have a requirement that members advertise something?
Mr. Jones: Yes.
Prosecutor: So, it's possible that they could satisfy that requirement by advertising ASD itself?
Mr. Jones: Yes.
Prosecutor: So, just to be clear, you didn't think that was smart, from an advertising point of view?
Mr. Jones: I wouldn't have done it because I believed the people who were surfing ASD already belonged to ASD, so the chances of getting a sign-up inside ASD was negligible, in my mind. Besides, it would have cost $1 a click to advertise ASD from inside ASD. There are many places outside of ASD where you can advertise ASD for free. And most of the people at those places don't know about ASD, so you'd be showing them something new. The people inside ASD already knew about ASD.
Prosecutor: So, you used free advertising to help a company that charges $1 a click advertise a paid advertising service?
Mr. Jones: Yes.
Prosecutor: What were some of these 'free' sites?
Mr. Jones: Well, video sites, for one. There are lots of free video sites. You make the video, upload it to the site, and you have an instant advertisement for your ASD business.
Prosecutor: Is that what you did with your video?
Mr. Jones: Yes.
Prosecutor: What was another free way to advertise your ASD business?
Mr. Jones: Well, blogs. You can start a blog for free and write about ASD to get people interested in ASD. Google has a free blogging service called Blogger. If you started a blog about ASD, Google would index the site and the posts, and those pages would show up in search results.
Prosecutor: Are there any other free ways to advertise ASD's paid advertising service?
Mr. Jones: Yes.
Prosecutor: Tell us about one more.
Mr. Jones: You could participate in online forums and make your ASD affiliate page part of your signature in the forum. Some forums even let you include the URL for the product you're promoting right in the post, so you could describe the program and include your Affiliate link or the redirect page.
Prosecutor: So, just to be clear, the three ways you just just described are all free ways to advertise ASD, which charges $1 per click for an ad, correct?
Mr. Jones: Correct.
Prosecutor: Did people watch the free video you posted to advertise ASD?
Mr. Jones: Yes.
Prosecutor: How many people watched it?
Mr. Jones: Hundreds and hundreds. Actually, more than 1,000.
Prosecutor: So, had you put your video on ASD at $1 a click, it would have cost you more than $1,000 to advertise it? But it was free on the video sites?
Mr. Jones: Yes.
Prosecutor: But didn't you just make a case for not advertising on ASD, even as you were promoting ASD?
Mr. Jones: How so?
Prosecutor: Well, did you not just demonstrate it was possible to get traffic to your website without paying for it?
Mr. Jones: Well, yes. But that doesn't mean that free traffic is always the best traffic. It's just one way to get traffic.
Prosecutor: Let's back up for a moment, Mr. Jones. How would people find the video you used to advertise ASD?
Mr. Jones: Well, people could find it through the search engines, for one.
Prosecutor: So, they'd type in a search string, and if they typed in certain words, they'd find your video for ASD, correct?
Mr. Jones: Yes.
Prosecutor: If they typed in a specific search string inquiring about ASD, would that mean they were interested in getting more information about ASD?
Mr. Jones: Yes.
Prosecutor: And they could do that for free, correct?
Mr. Jones: Yes.
Prosecutor: And they might land on your video page, meaning you'd be the beneficiary of free traffic that was motivated to learn more about ASD?
Mr. Jones: Yes.
Prosecutor: And if people wrote about ASD on their Blogs and in forums, they could become the beneficiary of free traffic to their website promoting ASD?
Mr. Jones: Yes.
Prosecutor: So, it's fair to say there are ways to get motivated traffic, without paying for it? That's what you were doing, correct?
Mr. Jones: Correct.
Prosecutor: And you were doing it with the hope that people would spend money on ASD advertising? The more money they spent, the more money you'd earn? If they spent $12,000, you'd earn $1,200, or 10 percent of their ad spend?
Mr. Jones: Yes.
Prosecutor: Mr. Jones, was ASD a search engine, like Google?
Mr. Jones: No.
Prosecutor: But ASD could benefit from search-engine traffic, and that traffic would be free, correct?
Mr. Jones: Yes -- but people also could pay for Google traffic, through what's called PPC, pay-per-click. Google calls its Adwords.
Prosecutor: How does that work?
Mr. Jones: Well, if you wanted to advertise ASD, you'd write up a short ad and make sure it included keywords, so Google would display it when people were searching for information on ASD. You get charged if someone clicks on the Google ad.
Prosecutor: Please explain some other Google features.
Mr. Jones: Google has filters and geographic targeting, as a means of trying to make sure the people who click on the Adwords ads are your most highly qualified prospects.
Prosecutor: Did ASD have such filters?
Mr. Jones: No.
Prosecutor: How does Google display the Adwords ads?
Mr. Jones: They're included on the same page as the search results.
Prosecutor: So, if a person was searching for information on ASD, they would see Google Adwords ads that explained ASD, as well as search results?
Mr. Jones: Yes.
Prosecutor: And if information on ASD was in the search results, people could click on it for free, and the person whose link was clicked wouldn't be charged a fee by Google?
Mr. Jones: Yes. Correct.
Prosecutor: But if the surfer clicked on an Adwords ad about ASD, the person who sponsored the ad would be charged a fee?
Mr. Jones: Correct. That's why it was important to write the best ASD ad possible and target the ad as perfectly as possible. You wouldn't want people clicking on ads if they had no intention to buy or weren't interested in buying.
Prosecutor: Just to be clear, ASD had no targeting -- but Google did?
Mr. Jones: Yes.
Prosecutor: So, getting back to your video, Mr. Jones: You were using free sources, including Google search results, to drive traffic to your ASD website, correct?
Mr. Jones: Yes.
Prosecutor: Would it be fair to say you hoped people who watched your video would purchase a large amount of advertising from ASD?
Mr. Jones: Yes. The more they'd spend, the more I'd earn.
Prosecutor: So, you were using free, targeted traffic sources to promote ASD and recommending that people pay ASD $1 per click for untargeted traffic?
Mr. Jones: I don't think it's fair to put in that way.
Prosecutor: Mr. Jones, you weren't paying to drive traffic to your ASD website, correct?
Mr. Jones: Well, no. I wasn't paying for my traffic.
Prosecutor: And ASD had no targeting, correct?
Mr. Jones: Well, yes, correct.
Prosecutor: And ASD wasn't a search engine? People were typing search strings into Google to find your ASD video and visit your website; they weren't typing something into ASD, correct?
Mr. Jones: Well, yes, correct.
Prosecutor: So, you were benefiting from free traffic from Google, and so was ASD? And ASD wasn't a search engine, but you were hoping people would pay $1 per click for ASD advertising? The more they spent, the more you'd earn?
Mr. Jones: Yes. But you're forgetting that ASD paid rebates on advertising purchases, and that was a big reason to pay for the advertising.
Prosecutor: You just said 'big reason.' Was it the biggest reason?
Mr. Jones: In my mind, yes.
Prosecutor: So, just to be clear, what you're saying is that people would be willing to pay ASD for untargeted traffic, the worst kind of traffic, as long as they would receive a rebate on their advertising purchases that would exceed the cost of their purchases?
Mr. Jones: Well, yes.
Prosecutor: Earlier, didn't you say that two of the first four ads that loaded in the rotator were promoting ASD?
Mr. Jones: Yes.
Prosecutor: Would it be fair to say those ads didn't interest you?
Mr. Jones: Well, yes; I already belonged to ASD. So, if it was an ad for ASD, there was nothing in it for me because I already belonged to ASD. That's why I didn't advertise my ASD video on ASD.
Prosecutor: Did you see other ads in ASD?
Mr. Jones: Yes.
Prosecutor: What sort of ads?
Mr. Jones: I saw an ad for an overnight cash system.
Prosecutor: Did the ad for the overnight cash system interest you?
Mr. Jones: No.
Prosecutor: Why not?
Mr. Jones: The name alone -- overnight cash system -- was enough to turn me off.
Prosecutor: What other ads did you see?
Mr. Jones: I saw an ad for a Facebook page, but there was nothing for sale.
Prosecutor: Do you remember any other ads you saw while surfing?
Mr. Jones: I saw ads from MLMs, a few ads for local businesses, and I saw some blank pages.
Prosecutor: Did ASD check to see if people had legitimate businesses to advertise?
Mr. Jones: No.
Prosecutor: So, you were recommending people pay for advertising from a company that didn't check if its members had legitimate businesses to advertise?
Mr. Jones: Well, if you put it that way, yes. But that was ASD's job, not my job, and you're forgetting about the rebates.
Prosecutor: Actually, Mr. Jones, I'm not forgetting about the rebates. You said a minute ago that you saw blank pages in the rotator. Would that not mean people were getting paid rebates to advertise blank pages?
Mr. Jones: If the blank page remained in the rotator long enough, yes, people could get paid for rotating a blank page.
Prosecutor: Mr. Jones, if a person spent $12,000 on ASD ads and was rotating a blank page, does that not mean he or she was getting paid $120 a day -- 1 percent of the ad spend -- in rebates for advertising a blank page?
Mr. Jones: Yes. It would mean that.
Prosecutor: So, if the blank page went undetected for five days, it would mean the person was paid $600 for rotating a blank page? And it went undetected for 30 days, it would mean the person got paid $3,600 for advertising a blank page?
Mr. Jones: Yes, it would mean that.
Prosecutor: And if a person advertised a Facebook page upon which there was nothing for sale or a page honoring the family pet for 30 days, he or she could get paid $3,600?
Mr. Jones: That was ASD's job to prevent that, not mine.
Prosecutor: But were you not promoting ASD in your video and hoping people would spend a large amount of money when they signed up for ASD advertising? And were you not doing this knowing that people could get paid for advertising ASD inside of ASD, by using an affiliate link or a redirect? And were you not doing this when you knew it was possible people were getting paid rebates for advertising blank pages?

posted by Patrick Pretty @ 10:00 AM, , links to this post



Part 3 Of ASD Fantasy Courtroom Scenario: 'Blue Paint'
Thursday, October 16, 2008

Today we are presenting Part 3 of our fantasy courtroom scenario, the continuation of the cross examination of Mrs. Doe. See the first two scenarios here.

This scenario is fiction. The dialog is fiction. No government or ASD secrets are being divulged. (We don't know any government or ASD secrets.) The dialog is based on what already is in the public record or on the Internet about the ASD case. It is designed to make some of the issues more understandable.

Fantasy Courtroom Scene 3: 'Blue Paint'

Prosecutor: Mrs. Doe, earlier we discussed the principle of 'Garbage in, garbage out,' and you told us that, if the data was corrupt, the result could be corrupt. Correct?
Mrs. Doe: Yes. Correct.
Prosecutor: And you said that 'Garbage in, garbage out' also applies to language: If somebody told a lie -- and if that lie was repeated on the Internet -- it could lead to a corrupt result. Correct?
Mrs. Doe: Correct.
Prosecutor: You live in the United States, right?
Mrs. Doe: Yes.
Prosecutor: Would you agree the economy could be better?
Mrs. Doe: Yes. That's why I was looking forward to the ASD business. It creates wealth for everybody who participates.
Prosecutor: Let me stop you there for a moment, Mrs. Doe: You just said ASD creates wealth for 'everybody,' right?
Mrs. Doe: Yes. Correct.
Prosecutor: You'd be among 'everybody,' right?
Mrs. Doe: Yes.
Prosecutor: But earlier you said you spent $12,000 on ASD ads and made only $500 through sales of your product. During the previous year, when you weren't with ASD, you spent $1,000 on local classified ads and with Google, and made $10,000. Didn't ASD put you in a hole?
Mrs. Doe: Yes. But I was going to make up the difference and get in profit with the ASD rebates.
Prosecutor: But ASD didn't guarantee rebates, Mrs. Doe. So, the prospect of getting a rebate always was in doubt, meaning it was in doubt 100 percent of the time. True? And since the Terms of Service could change at any time, the prospect of getting any return at all from ASD always was in doubt, meaning it was in doubt 100 percent of the time. True?
Mrs. Doe: Do we really have to go down this road again?
Prosecutor: I understand you're frustrated, Mrs. Doe.
Mrs. Doe: That doesn't even begin to describe it . . .
Prosecutor: But you still agree with 'Garbage in, garbage out?'
Mrs. Doe: Yes.
Prosecutor: Why?
Mrs. Doe: Because there is no denying that bad data can lead to a bad result. My 6-year-old knows that.
Prosecutor: Earlier you said you had three children, two of whom are in college. So, your 6-year-old is your third child?
Mrs. Doe: Yes. My husband and I are very blessed. Our daughter was born when I was 44, and she is perfect in every way. We were worried because of my age. But she is a beautiful, bright child, like her older brothers. She has provided more joy than I can even describe. Like I said, perfect in every way . . .
Prosecutor: Life is about the kids, isn't it, Mrs. Doe?
Mrs. Doe: It certainly is.
Prosecutor: Thanks for sharing your story about your daughter. For now, let's return to the ASD business.
Mrs. Doe: OK.
Prosecutor: ASD wasn't a bank, was it?
Mrs. Doe: Of course not. Everybody knows that.
Prosecutor: There's that word again: 'everybody': Are you sure the word 'everybody' applies, Mrs. Doe?
Mrs. Doe: Yes.
Prosecutor: Mrs. Doe, please turn your attention to the screen for the overhead projector. I'm going to show you part of an ad from an ASD upline in 2007, the uppermost part of the ad, and ask you to read aloud the line that begins with the number 3.



Mrs. Doe: It' says, 'FDIC insured up to $100,000, using virtual money debit card payment options.' Oh, my God!
Prosecutor: Why'd you say, 'Oh, my God!' Mrs. Doe?
Mrs. Doe: Because that ad says ASD purchases were FDIC insured!
Prosecutor: Can you see, now, why I asked whether ASD was a bank?
Mrs. Doe: Yes. Plainly.
Prosecutor: Mrs. Doe, you're 50. You have experience in business. You have a bank account. What does the FDIC do?
Mrs. Doe: It insures bank deposits so people don't lose money if the bank fails.
Prosecutor: Would you agree that the FDIC has been in the news a lot recently?
Mrs. Doe: Yes. Because of all the bank failures.
Prosecutor: Mrs. Doe, you have three children, including the beautiful 6-year-old daughter you described. You have experience in business. You have experience in advertising. You've used ASD. You've used classified ads and Google. Did the newspaper or Google ever tell you advertising purchases were insured by the FDIC?
Mrs. Doe: No. I am really angry about this!
Prosecutor: Why?
Mrs. Doe: Because it is total garbage.
Prosecutor: Mrs. Doe, as I mentioned, this ad is from 2007. And you can see "2007" in the ad, correct?
Mrs. Doe: Yes.
Prosecutor: ASD deposits are not insured by the FDIC, are they, Mrs. Doe?
Mrs. Doe. No. Of course not.
Prosecutor: What does that line of the ad imply to you?
Mrs. Doe: That ASD deposits are FDIC-insured.
Prosecutor: So, using the principle of 'Garbage in, garbage out,' any proceeds that flowed into ASD as a result of that ad could create a problem, because the proceeds originated from the false premise that ASD deposits were FDIC-insured. Correct?
Mrs. Doe: Yes.
Prosecutor: And that ad was from 2007, so it's more than a year old? We know that because the ad says 'predicted to go mainstream by 4/1/07.' Correct?
Mrs. Doe: Correct.
Prosecutor: Mrs. Doe, you have experience in business. And you have experience in advertising. As an owner of a small business, you have at least a basic understanding of accounting. Correct?
Mrs. Doe: Correct.
Prosecutor: How would a company account for money it received as a result of an ad that said deposits were FDIC-insured, when those deposits weren't insured by the FDIC?
Mrs. Doe: Honestly, I don't have a clue.
Prosecutor: Would you consider the money tainted in some way?
Mrs. Doe: Yes.
Prosecutor: If the company that received such money didn't know it was receiving money based on a claim that deposits were FDIC-insured, would it change your opinion as a businesswoman that the money was tainted?
Mrs. Doe: No.
Prosecutor: Why not?
Mrs. Doe: The money would be tainted whether or not the company knew it had come from a tainted source. The fact the company didn't know it was holding tainted money doesn't change the fact the money was tainted. If blue paint gets mixed with white paint, there's still blue paint in the mix, even if you don't know who put it there.
Prosecutor: So, blue paint is bad?
Mrs. Doe: It's not bad if you want blue or a shade of blue. But if you want white paint and blue gets mixed into it, it's bad.
Prosecutor: So, one way to look at this is that an ASD promoter created 'garbage' and that money that flowed into ASD as a result of that 'garbage' was tainted with blue paint?
Mrs. Doe: Yes.
Prosecutor: Could ASD trust its numbers if it was in receipt of garbage and money tainted with blue paint?
Mrs. Doe: No.
Prosecutor: So, 'garbage' and blue paint could have been in the ASD system as early as 2007, based on the claim that deposits were FDIC-insured?
Mrs. Doe: Yes.
Prosecutor: What would happen if ASD was in receipt of tainted money, and that tainted money was deposited in a bank?
Mrs. Doe: The bank would be in possession of tainted money.
Prosecutor: Mrs. Doe, do you see the line in the ad that begins with the number 1?
Mrs. Doe: Yes.