Edward Purvis, Head Of ‘Christian’ Group, Indicted For Running Ponzi Scheme; Case Has Echoes Of Ad Surf Daily Probe
In a complex case apt to remind some members of AdSurfDaily about strange twists and turns the ASD case has taken, an Arizona man has been indicted on charges of running a Ponzi scheme that fleeced Christians.
The case has featured allegations of bribery, claims that proceeds from the enterprise could not be taxed, and bizarre legal filings naming a judge, court clerk, investigators and a reporter defendants.
Purvis already is in prison, serving an 18-month term. He was convicted in May of attempting to bribe a police officer in Chandler, Arizona, and of harassing public officials in a bid to thwart an investigation by the Arizona Corporation Commission.
The commission ordered more than $11 million in restitution and administrative fines of $250,000.
Cash-Gifting Scheme, Coupled With Ponzi And Affinity Fraud
“Although investors expected a return that was allegedly guaranteed, Purvis and [civil co-defendant Gregg] Wolfe referred to these investments as ‘donations’ and the dividend income as ‘gifts,'” the commission said.Â “In some instances, investors received phony account statements that showed their investments were increasing in value when they were not. In other instances, investors did not receive any documentation at all.”
Purvis and Wolfe, the commission said,Â “funneled investor money into offshore accounts and used it for cars, jewelry, a down payment on a luxury home, gambling debts, a payment to a womanâ€™s professional soccer team, and for Purvisâ€™ legal fees in connection with the Commissionâ€™s proceedings.”
Prosecutors in the AdSurfDaily case said ASD funds were used to purchase luxury automobiles, real estate, jewelry, a 20-foot Triton Cabana boat, jet skis and trailers to haul the water equipment. Prosecutors also said ASD had money in offshore accounts in Canada and Antigua.
ASD President Andy Bowdoin, prosecutors said, also made claims that Russian hackers had stolen $1 million from ASD. Bowdoin never filed a police report, which prompted questions from members about whether the money actually had been stolen or was hidden offshore.
Case Takes Criminal Twist
Arizona Attorney General Terry Goddard now is prosecuting a criminal Ponzi case against Purvis. A grand jury handed down an indictment Friday.
“Purvis told some investors that by forming a ‘corporation sole’ they would not have to pay taxes on the investment return paid by N.G.G.M.I. each month or that payments made by N.G.G.M.I. were ‘gifts’ and therefore were not taxable,” according to the indictment.
The indictment accused Purvis of multiple felonies, including theft, securities fraud, selling unregistered securities and running a racketeering enterprise.
Purvis targeted at least one pastor, church elders and at least two congregations, authorities said.
Members of the Arizona Corporation Commission said affinity fraud is one of the worst forms of financial fraud because it takes advantage of people’s tendency to trust members of a group.
“This tragic case demonstrates how important it is for investors to verify the registration of both the seller and the security before they buyâ€”no matter who is selling the investment,â€ said Commissioner Bill Mundell.
“Watch out!” warned Commissioner Jeff Hatch-Miller. “In rough financial times, the scam artists are out in full force.”
Echoes Of ASD
Last fall, some ASD members advocated an approach by which members would send certified letters to prosecutors and others involved in the case in a bid to undermine the government’s efforts.
The strategy previously had been employed by members of a Utah Indian tribe a federal judge ruled a sham. A cornerstone of the strategy is to force recipients of certified letters to default on demands made in the letters, and then to seek punitive financial judgments through UCC filings.
Curtis Richmond, a member of the Utah-based tribe, attempted to file a motion to have the ASD case dismissed. On Nov. 19, Judge Rosemary Collyer refused to accept the motion, denying Richmond leave to file.
The tribe, known as Wampanoag Nation, Tribe of Grayhead, Wolf Band, has been implicated in a number of attempts to stifle prosecutors, judges, investigators and others by making vexatious court filings and filing fraudulent judgments against litigation opponents and public officials.
Richmond was convicted in February 2007 of criminal contempt of court for threatening or trying to intimidate judges in a case separate from the ASD case. His name is listed on incorporation papers for an entity known as Pacific Ministry of Giving International. California records say the registration has been forfeited.
Investigators in Arizona say Edward Purvis and Nakimi Chi Group Ministries International employed some of the same methods the sham Utah Indian tribe employed to nuisance public officials.
Purvis filed fraudulent $15 million liens against a judge, a court clerk and two investigators, for example, according to an indictment charging him with felony counts of bribery and harassment of public officials.
Investigators said Purvis bribed former Chandler police officer Bradley Todd Forward to gain access to confidential files used in the investigation of N.G.G.M.I. by the Arizona Corporation Commission.
Here is the indictment against Forward for helping Purvis.
And here is the criminal indictment against Purvis for the Ponzi and affinity fraud.
(Note: The indictment URLs load slowly.)