BREAKING NEWS: Prosecution Answers Bowdoin; Says Ignorance Of Law No Excuse, Asks Judge To Reject ASD’s ‘Fair Notice’ Claim

Prosecutors have responded to ASD President Andy Bowdoin’s pro se claim that he was denied fair notice that the conduct of ASD was illegal, saying ignorance of the law is no excuse.

At the same time, prosecutors asserted Bowdoin’s own past as a criminal defendant turned his argument that the case should be dismissed on its ear.

“In this case, Mr. Bowdoin’s motion to dismiss on vagueness grounds is all the more
remarkable because he was previously arrested for having used money he took from individuals who invested in a new opportunity he had been promoting to repay debts he owed to individuals who lost money after investing with him in a different venture,” prosecutors said, referring to Bowdoin’s arrest in Alabama in the 1990s.

“Mr. Bowdoin even acknowledged that he lost money in a similar auto-surf ‘Ponzi’ scam that the government closed before he started ASD,” prosecutors said. “The ‘I forgot what I knew’ inference Mr. Bowdoin would have this Court draw certainly provides no basis for dismissing the government’s wire fraud allegations on vagueness grounds.”

And Bowdoin was tilting at windmills when he asserted that the government was required to warn him that wire fraud, money-laundering and running a Ponzi scheme were illegal.

“Mr. Bowdoin’s assertion that he ‘did not know or realize that his conduct was illegal’ cannot survive a moment’s analysis,” prosecutors said. “The central claim underpinning the government’s forfeiture action is that Ad Surf Daily (ASD) and Golden Panda (GP) were unlawful, fraudulent ventures operating over the Internet.

“The government’s complaint alleges that ASD and GP operators falsely stated that they were offering legitimate business opportunities in which ‘members’ could invest and expect a profitable return of at least 125%, at the rate of about 1% per day, on each dollar invested,” prosecutors continued.

“But, as the two related forfeiture complaints show, ASD and GP had no actual independent operations and, thus, earned no profits from which to pay out the returns they promised to their members-investors. Rather, in a classic ‘Ponzi’ style scheme, money from investments by later ‘members’ was (and would have been) used to redeem promises of fantastical returns made to earlier member-investors.”

Bowdoin Piled Lies On Lies, Prosecutors Claim

Andy Bowdoin is only pretending to be ignorant, prosecutors said.

“At bottom, Mr. Bowdoin’s protestations of ignorance are yet another lie: he not only knew that he lacked sufficient revenue to pay the returns he promised, he knew the revenue numbers he posted were made-up. With such knowledge, and given that Mr. Bowdoin does not deny having used the Internet to publicize his false promises and misrepresentations, his argument for dismissal on void-for-vagueness principles is meritless,” prosecutors said.

In walking back Bowdoin’s pro se pleading, prosecutors said that Bowdoin appears to be arguing that he should be permitted to lie with impunity and keep money he collected as a result of his lies.

“To examine Mr. Bowdoin’s proposition, at the outset, the Court should recall precisely
what the government has alleged in seeking forfeiture in this civil action: the defendants in this case, several parcels of real property and millions of dollars — were amassed through a wire fraud. In particular, the government asserts that Mr. Bowdoin ran a ‘Ponzi’ style scam that made false promises to deceive investors into sending their money off to Mr. Bowdoin and his associates.

“The government asserts that Mr. Bowdoin and his associates failed to tell the investors that ASD was merely shuffling their money — that it had no true profits with which to
pay the profitable returns it promised them. In light of the government’s allegations here, Mr. Bowdoin seems to be asserting (1) that he did not know that it was illegal for him to lie to investors in order to cause them to send him their money in the first place, and (2) that he should therefore get to keep all of the money he secured by lying. He offers, not surprisingly, no authority for his proposition.”

Prosecutors cited law and precedent to back their claims, arguing that Bowdoin was making vague, disingenuous claims, including the claim that he is a “defendant” in a criminal prosecution when the forfeiture case resides in civil court.

“This is a civil forfeiture action, not a criminal prosecution, so Mr. Bowdoin’s references to himself as the ‘defendant’ are miscast,” prosecutors said.

“Thus, citations to precedent dismissing criminal prosecutions are not strictly apposite to this case. Properly speaking, the defendants in this case are not Mr. Bowdoin or his confederates at Ad-Surf Daily or Golden Panda, but the real properties and many millions of dollars garnered in a ‘Ponzi’ style fraud.

“Ironically, even on its own terms, Mr. Bowdoin’s pro se filing cites only fatally vague generalities. Examples include: ‘[i]n criminal prosecution, unclarity alone is enough to resolve the doubt in favor of the defendant’ (citation omitted); ‘[t]he ‘rule of lenity’ is a principle of statutory construction which provides that criminal statutes must be narrowly construed, and any ambiguity be resolved in favor of lenity’ (citation omitted); and, ‘vice of vagueness in criminal statutes is treachery” (citation omitted),” prosecutors said.

Read the prosecution’s answer to Bowdoin.

About the Author

8 Responses to “BREAKING NEWS: Prosecution Answers Bowdoin; Says Ignorance Of Law No Excuse, Asks Judge To Reject ASD’s ‘Fair Notice’ Claim”

  1. Wasn’t this hilarious??? My favorite part, on the bottom of page 4, was when Cowden said that Andy was claiming that he didn’t know he wasn’t allowed to lie to the “members” in order to get them to send money to him, and since he didn’t know it was wrong, he should get to keep it.

    http://api.ning.com/files/9VKnrL3y87nr4kTaYtz7jbwarRFf5qpvAPpCL0S3TaqfIoRYyxO64yGLEjohfLdpUspkwiflfp7lNK3LCaku60EcD25q6yZ5/Cowdensanswertoandyfairnotice.pdf

      (Quote)

  2. AUSA Cowden has now taken one glove off. We have a pretty good idea, I am guessing, as to what the criminal case against Bowdoin will look like, at least in its minimalist form……and it does look like Andy’s pro se filings WILL hurt him in the criminal case, as you have pointed out Patrick (where he admitted ASD was illegal).

      (Quote)

  3. Additionally, AUSA Cowden is likely to be intimating that the government WILL go after Bowdoin’s insiders for criminal charges as well. He repeatedly refers to Bowdoin and his associates as the perpetrators of the ASD illegalities…..

      (Quote)

  4. Hi Entertained,

    I noticed prosecutors’ use of the word “associates” — plural. Also of note is that the document includes the signature of Vasu B.Muthyala, a prosecutor in the criminal division (and a former SEC attorney).

    Thanks for your comments.

    Patrick

      (Quote)

  5. Hi Marci,

    Marci: Andy was claiming that he didn’t know he wasn’t allowed to lie to the “members” in order to get them to send money to him, and since he didn’t know it was wrong, he should get to keep it.

    The prosecution walked back Bowdoin’s argument pretty efficiently.

    Bowdoin, of course, also once made the claim that Ponzi allegations had been dropped in Florida, when they’d never been brought in Florida.

    And the various bids at PR — such as the claim ASD would get $200 million from Praebius — made while it was awaiting a ruling on the evidentiary hearing.

    It was as though ASD thought the claim somehow could influence the decision-making process or undo all the alleged misdeeds prior to Aug. 1. The reasoning has been just so . . . strange.

    Regards,

    Patrick

      (Quote)

  6. I found the fact that he worded this the way he did to be very telling:

    “In this case, Mr. Bowdoin’s motion to dismiss on vagueness grounds is all the more
    remarkable because he was previously arrested for having used money he took from individuals who invested in a new opportunity he had been promoting to repay debts he owed to individuals who lost money after investing with him in a different venture,” prosecutors said, referring to Bowdoin’s arrest in Alabama in the 1990s.

      (Quote)

  7. Short and sweet. And they didnt wait until the 24th april either. The Government is being far more direct in its statements now – they have called it the legalize for “nonsense” – and the addition of “associates” has not gone unnoticed.

    My favourite bit is “In the context of this case, Mr. Bowdoin’s motion has traction only if the government was required to have told him, before seizing his fraud proceeds, that fraud is illegal”

    Not sure that this will go down well with the remaining hard core Bowdoin fans, especially the part about “associates”.

      (Quote)

  8. I like the fact Mr. Cowden used simple English in his response so even Andy and the Arby Indians could understand his points. Well, one would think so anyway.

      (Quote)

Leave a Reply