Bowdoin Still A No-Show In RICO Lawsuit; Attorneys For Both Sides Gear Up For What Could Be An Interminable Slog

AdSurfDaily President Andy Bowdoin still hasn’t responded to a Jan. 15 racketeering lawsuit filed against him by three ASD members seeking class-action certification.

Meanwhile, Bank of America, a non-RICO defendant accused in the complaint of aiding Bowdoin and others in a fraudulent scheme, has added two additional attorneys who specialize in complex financial litigation to its legal team.

At the same time, Steven Berk, an attorney for the plaintiffs, has notified U.S. District Court for the District of Columbia that he has left the law firm of Chavez & Gertler and has started his own firm, Berk Law LLC of Washington, D.C.

Berk filed papers yesterday to ask the court to delay the due date until May 26 for the plaintiffs’ response to a motion to dismiss Golden Panda Ad Builder President Clarence Busby as a defendant in the case. The response had been due May 11, but Busby’s attorneys have agreed to a 15-day delay.

Like Bowdoin and ASD attorney Robert Garner, Busby was named a RICO defendant, amid allegations he engaged in racketeering with Bowdoin, Garner and unnamed others. Bowdoin is the sole named RICO defendant who hasn’t responded to the complaint.

Although he is an attorney, Garner filed a pro se pleading asking to have until May 22 to respond to the complaint. It is unclear if he intends to continue to represent himself or if he’ll retain counsel.

Busby, through his attorneys, said he should be dismissed from the RICO case because he already has settled a separate case filed by the government in August 2008.

Why Bowdoin hasn’t responded to the RICO complaint, which was filed in January and amended April 27, is unclear. He filed at least four pro se motions in the government forfeiture case in February and March and authored a special statement to ASD members released through the pro-ASD Surf’s Up forum that said other filings he planned “should really get” the attention of prosecutors.

Prosecutors, however, said Bowdoin had signed a proffer letter in the case and had acknowledged to law enforcement that ASD had been operating illegally. Proffer letters sometimes mean that the one who proffers is trying to minimize exposure while providing information that may help in the prosecution of others.

Bowdoin’s pro se litany began at the same time the AdViewGlobal (AVG) autosurf introduced members to Pro Advocate Group, a company that says it can help people practice law without a license. Pro Advocate Group is associated with Karl Dahlstrom, who was sentenced to 78 months in federal prison in the 1990s for securities fraud.

Securities fraud is one of the allegations cited in the government’s August forfeiture complaint against assets tied to ASD and Golden Panda. Both Bowdoin and Busby have had previous run-ins with securities regulators. In separate cases in the 1990s, Bowdoin was almost jailed in Alabama, and Busby was ordered in Georgia not to break securities laws after the SEC alleged he had pushed three fraudulent prime-bank schemes.

AVG has family and promoters’ ties to ASD. Bowdoin’s stepson, George Harris, is listed as an AVG trustee. The government filed a second forfeiture complaint against assets tied to ASD in December, implicating Harris and his mother — Edna Faye Bowdoin, Andy Bowdoin’s wife — in the ASD scheme.

Also in March, Andy Bowdoin appeared in a video for an upstart surf firm known as PaperlessAccess, which he positioned as a company that could help ASD members earn back funds seized by the government in August.

Bowdoin’s PaperlessAccess video went missing after only a few days, and Surf’s Up reported he had been misled by the company. While all this was happening, AVG  announced the sudden resignation of Gary Talbert, its chief executive officer and a former ASD executive.

Talbert’s March 20 resignation was followed three days later by an AVG announcement that its bank account had been suspended. Earlier this week, AVG announced that it had struck a deal that would enable customers to wire money for advertising purchases to an offshore bank, but a company AVG identified as the beneficiary of the funds — KINGZ Capital Management Corp. — issued a denial that it had any business relationship with AVG.

Michael P. Krywenky, president and chief executive officer of KINGZ, said the company was “very shocked” and “appalled” by the claims, noting that attorneys for KINGZ were monitoring the situation.

Krywenky said KINGZ believed a scam of some sort was under way at AVG.

AVG yesterday ignored Krywenky’s denial, instead issuing a statement that advised members it was looking at other wire “options” and expected to announce “additional funding solutions within the next 2 weeks.”

Late last month, the plaintiffs in the RICO case alleged that ASD had hired the “majority” of the staff of Bank of America’s branch in Quincy, Fla., as ASD employees, paying the Bank of America employees more than other ASD employees doing the same work.

One of the plaintiffs’ arguments was that Bank of America knew its employees also were working for ASD and should have detected that the company was up to no good.

Bowdoin promised ASD members in March that he would have a conference call to update members. The call never occurred, and Bowdoin has not explained why he has not responded to the RICO complaint.

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18 Responses to “Bowdoin Still A No-Show In RICO Lawsuit; Attorneys For Both Sides Gear Up For What Could Be An Interminable Slog”

  1. So BoA did everything right and now are hiring two more high priced lawyers!!! I know that littleroundman took me to task about not understand the banking rules, but it still don’t sound right that if BoA did everything right they would have to or want to pay good money to protect themselves. Local ad link a public held company just got a line of credit from a credit card company for 50 million. After that was anounced a leader of the compnay was telling people that many times in the last month or two that the company was growing so quickly that the old credit card companies were freezeing the accounts becuase of the big growth. Between the Minneapolis rally of April 26th and the Vegas rally of May 31 ASD put over $25 mill into BoA. In june the reason that was told to the member of ASD about late ACH depoists was “we had the wrong type of account with BoA. and that ASD could not send out over & mill using ACH.
    o.k. littleround kick my ass and tell me about SAR obligation, again.lol
    remember the feds jump in in early july.

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  2. Sorry it should read. In june the reason that was told to the members about late payments to us using ACH was our account could only y handle 7 mill a month in withdarawals and that was being changed
    Happy mothers day

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  3. It’s kind of amazing my family managed to run a business for over 30 years, sending money all over the world without interference from the authorities and without all the banking snafus. When we needed banking or financial services, we interviewed banks and service companies recommended to us. As customers, we’d call our account managers or they would call us if a question arose or we/they needed documents. We must have lived a charmed life.

    Why is it that every HYIP has:

    1. Difficulty explaining what outside income is generated?
    2. Difficulty providing audited income statements and balance sheets?
    3. Banking problems ad infinitum?

    Is there a pattern here?

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  4. Local ad link is a company owned by beyond commerce, and is publicy traded under the sign BYOC. The info about the line of credit was in a press release, and the company, “credit card processing consultant” who just gave the 50 mil line of credit has not called the lawyers about it being False.
    Dirty bird are you calling local ad link a HYIP?

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  5. Mark kreiling: Local ad link is a company owned bybeyondcommerce, and is publicy traded underthe signBYOC.The info about the line of credit was in a press release,and the company, “credit card processingconsultant” whojust gavethe 50 mil line of credit has notcalled the lawyers about itbeingFalse.
    Dirty bird are you callinglocal ad link aHYIP?

    ???

    I was calling AVG & ASD HYIPS. I know nothing about the other companies you mention.

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  6. cool, I’m with you 100%

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  7. Mark kreiling: Local ad link is a company owned bybeyondcommerce, and is publicy traded underthe signBYOC.The info about the line of credit was in a press release,and the company, “credit card processingconsultant” whojust gavethe 50 mil line of credit has notcalled the lawyers about itbeingFalse.
    Dirty bird are you callinglocal ad link aHYIP?

    It may not be a HYIP but it certainly seems to be a scam of some sort. A rose by any other name…….

    http://www.ripoffreport.com/reports/0/427/ripoff0427685.htm

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  8. Mark kreiling: Local ad link is a company owned bybeyondcommerce, and is publicy traded underthe signBYOC.The info about the line of credit was in a press release,and the company, “credit card processingconsultant” whojust gavethe 50 mil line of credit has notcalled the lawyers about itbeingFalse.
    Dirty bird are you callinglocal ad link aHYIP?

    It may not be a HYIP but it certainly seems to be a scam. Google Local ad link.

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  9. It has already been commented that if Bowdoin can manage to file documents with the courts, he should be equally able, through his attorneys, to receive court documents.

    Either he has received the filings and is stumped for a response and is still working on it, or someone has screwed up.

    And, DB

    Why is it that every HYIP has:

    1. Difficulty explaining what outside income is generated?
    2. Difficulty providing audited income statements and balance sheets?
    3. Banking problems ad infinitum?

    Is there a pattern here?

    You seem to have your tongue firmly stuck in your cheek, LOL Brilliant!

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  10. Mark kreiling: SoBoAdid everything right andnow arehiring twomorehigh priced lawyers!!! I know thatlittleroundman took me to task about not understand the banking rules, but it still don’t sound right that if BoA did everything right they would have to or want to pay good money to protect themselves.Local ad linka public held company just got a line of credit from a credit card company for 50 million.After that was anounceda leaderof the compnay was telling people that many times in the last month or two that the company was growing so quickly that the old credit card companies were freezeing the accounts becuase of the big growth. Between the Minneapolisrally of April 26th and the Vegas rally of May 31 ASDput over $25 mill intoBoA. In june the reason that was told to the member of ASDaboutlate ACH depoistswas “we had the wrong type of account with BoA. and that ASD could not send out over & millusing ACH.
    o.k. littleround kick my ass and tell me aboutSAR obligation, again.lol
    rememberthe feds jump inin early july.

    With the greatest respect, Mark, but it sounds to me like you STILL haven’t got a complete handle on exactly what’s “gone down” here.

    For example, you quote the reason given for Bowdoins’ inability to complete payments as being ““we had the wrong type of account with BoA” as if anything Bowdoin said or says can be accepted as being “true”

    Surely by now, even the most ardent Bowdoin supporter must have realised that ASD was a scam FROM THE START.

    Virtually NOTHING was as it appears/ed.

    Yet, here we are, people are still prepared to accept the word of Bowdoin over that of a squillion dollar, 87 year old financial institution.

    Granted, it is entirely possible (if not probable) that individuals within the bank somehow circumvented the BSA software. But, for goodness’ sakes, this is the real world, not an episode of “X Files”

    BoA risks its’ reputation, millions of dallars in fines and almost universal condemnation for what ?? A few bucks in handling and account fees ??? Gimme a break.

    The, to add a real HYIP promoters “spin” to your assertions, you hint that the act of “hiring” lawyers is an indication of guilt, because it “doesn’t sound right”

    I don’t know of your experiences in the world of business, but, to me, the management and board of a corporation under legal threat which DIDN’T employ every means possible to defend the shareholders rights would be subject to more censure than one that ignored the risk.

    Read up on it.

    The BoA obligations are handled by specifically developed (and govt. approved) software. The only “variable” here is the unkown time between reporting, investigation and prosecution action.

    Conspiracy theories make for fun discussions around the table.

    Unfortunately, the “truth” is a lot more mundane.

    Bowdoin and supporters orchestrated and carried out a multi million dollar fraud.

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  11. LRM, I may be wrong, but I suspect that there is a big difference between BoA policy on customer account handling and the practices of the BoA office in Quincy.

    It is possible that BoA Quincy reported the ASD accounts for suspicious activity way back at the beginning of 2007 or even at the end of the year and, in that case, the delays are the sole responsibility of the Government agencies.

    However, one thing is very clear, there is no way that the BoA Quincy was not completely aware of the money movements and business operations of AdSurfDaily from its inception. It’s involvement was far closer that that of a client in a large branch. It may be pennies for a major corporate account handling branch, but for Quincy Branch, ASD was and has been for a very long time, a major account.

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  12. alasycia: LRM,I may be wrong, but I suspect that there is a big difference between BoA policy on customer account handling and the practices of the BoA office in Quincy.
    It is possible that BoA Quincy reported the ASD accounts for suspicious activity way back at the beginning of 2007 or even at the end of the year and, in that case, the delays are the sole responsibility of the Government agencies.However, one thing is very clear, there is no way that the BoA Quincy was not completely aware of the money movements and business operations of AdSurfDaily from its inception.It’s involvement was far closer that that of a client in a large branch. It may be pennies for a major corporate account handling branch, but for Quincy Branch, ASDwas and has been for a very long time, a major account.

    You could be entirely correct, HOWEVER,

    Under the terms of the Bank Secrecy Act and USA Patriot Act regulations, once a financial institution has filed a SAR (Suspicious Activity Report) then:

    “(k) Confidentiality of SARs. SARs are confidential. Any national bank or person subpoenaed or otherwise requested to disclose a SAR or the information contained in a SAR shall decline to produce the SAR or to provide any information that would disclose that a SAR has been prepared or filed, citing this section, applicable law ( e.g., 31 U.S.C. 5318(g)), or both, and shall notify the OCC.

    (l) Safe harbor. The safe harbor provision of 31 U.S.C. 5318(g), which exempts any financial institution that makes a disclosure of any possible violation of law or regulation from liability under any law or regulation of the United States, or any constitution, law, or regulation of any state or political subdivision, covers all reports of suspected or known criminal violations and suspicious activities to law enforcement and financial institution supervisory authorities, including supporting documentation, regardless of whether such reports are required to be filed pursuant to this section or are filed on a voluntary basis”

    http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=0f0c7433271a7f40e09a84815d16bca5&rgn=div8&view=text&node=12:1.0.1.1.19.2.8.1&idno=12

    In other words, they cannot tell ANYBODY even under subpoena or Federal request AND are protected under the “safe harbour” provisions of the BSA.

    As has been pointed out before, it puts the financial institution between a rock and a hard place.

    Fined and penalised if they DO “tip off” the target and criticised and censured by “victims” if they DON’T.

    Again I say, IF the rumours are true, in that BoA or any of its’ employees were involved in perpetuating the ASD fraud , they deserve punishment to the full extent of the law.

    History and logic tell us, however, it is far more likely the so called sanctioning of ASD by the BoA is just “another” Bowdoinism.

    Whatever the case, the BoA is effectively prevented from defending itself by the BSA and Patriot Act.

    Remember also, as was the case with 12DP and Stormpay, it suits the “steroidal puppeteers” far more to divert attention toward the financial institutions and payment processors and away from the Bowdoin or the “HYIP industry”.

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  13. Point taken LRM, but even though it should in no way be permitted to distract us from the sins of Bowdoin and HYIP “industry”, but even if the BoA did report ASD, I dont see how a bank can knowingly continue to offer a very active banking support system for something they consider a suspicious activity for so long. Another bank asked them to close their accounts, in addition to reporting it. They didnt wait for a move from the authorities to break off the relationship.

    What reason would BoA have for continuing to provide banking services for nearly two years for a company who they considered were operating an illegal business? The branch had a very close relationship with ASD and had sufficient access to information to be able to make an accurate assessment.

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  14. alasycia: but even if the BoA did report ASD, I dont see how a bank can knowingly continue to offer a very active banking support system for something they consider a suspicious activity for so long.

    As I said, financial institutions are caught between a rock and a hard place:

    “Banks should be aware that law enforcement may have an interest in ensuring that certain accounts remain open notwithstanding suspicious or potential criminal activity in connection with those accounts. If a law enforcement agency requests that a bank maintain a particular account, the bank should ask for a written request. The written request should indicate that the agency has requested that the bank maintain the account and the purpose and duration of the request. Ultimately, the decision to maintain or close an account should be made by a bank in accordance with its own standards and guidelines.71”

    http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_015.htm

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  15. alasycia: Point taken LRM, but even though it should in no way be permitted to distract us from the sins of Bowdoin and HYIP “industry”, but even if the BoA did report ASD, I dont see how a bank can knowingly continue to offer a very active banking support system for something they consider a suspicious activity for so long.Another bank asked them to close their accounts, in addition to reporting it. They didnt wait for a move from the authorities to break off the relationship.What reason would BoA have for continuing to provide banking services for nearly two years for a company who they considered were operating an illegal business? The branch had a very close relationship with ASD and had sufficient access to information to be able to make an accurate assessment.

    I can think of at least one very good reason.

    http://uk.truveo.com/was-stanford-a-protected-informer/id/1930112726

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  16. alasycia: Point taken LRM, but even though it should in no way be permitted to distract us from the sins of Bowdoin and HYIP “industry”, but even if the BoA did report ASD, I dont see how a bank can knowingly continue to offer a very active banking support system for something they consider a suspicious activity for so long.Another bank asked them to close their accounts, in addition to reporting it. They didnt wait for a move from the authorities to break off the relationship.What reason would BoA have for continuing to provide banking services for nearly two years for a company who they considered were operating an illegal business? The branch had a very close relationship with ASD and had sufficient access to information to be able to make an accurate assessment.

    U.S. banks and foreign banks operating in the U.S. have been fined tens of millions of USD in the U.S. for not properly reporting suspicious transactions. The simple reason was that people were getting paid nicely to facilitate transactions and got bonuses based on the amount of business they brought in.

    LRM is right in the sense that the Patriot Act forbids the subject of an investigation from being informed.

    As for your question, how does a bank comply with the U.S. Patriot Act, report suspicious transactions and keep on providing services to the “customer”, you’d have to ask some high priced legal talent. How a Swiss bank operating in the U.S. would manage to comply with their own laws and the laws of the U.S., I don’t know. Perhaps they have subsidiaries which are held to differing standards. The U.S. does pressure offshore banks with operations in the U.S. Those banks would also have to comply with the laws governing where they are incorporated.

    I think the recent spat with UBS will be interesting. UBS agreed to pay over $700 million US in fines for helping Americans to evade taxes. Tax evasion is a crime, tax avoidance is legal. UBS also agreed to turn over the names of several hundred US customers to the IRS so that the IRS could collect taxes and fines from these people. Recently, UBS and the Swiss government has gotten cold feet regarding this deal since disclosing private banking data is a crime in Switzerland. The only real action take to date is that the Swiss government has barred Swiss bankers which handle certain foreign accounts from traveling abroad so they won’t be subject to arrest. It should get interesting especially since governments hungry for tax revenue are not taking a wink and nod approach to offshore havens at this point in time.

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  17. It will interesting to see how the BoA situation pans out, once the arguments go to court. Irrespective of privacy requirements and even the possibility that a bank can be required to continue to serve a customer who is under investigation, I still have a strong suspicion that BoA may not be blameless in the ASD issue.

    Given the “small town” nature of the bank concerned and the intimate relationship between bank and client, it will not come as a surprise if we find out that, at local level, rules were bent and an embarrassing situation for the BoA was caused

    None of which, of course, detracts from the principal people responsible for the whole situation, Bowdoin and Co.

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