BREAKING NEWS: Busby Dismissed As RICO Defendant; Bank Of America Asks Judge To Stay Lawsuit Until Forfeiture Matter Is Resolved

Three members of AdSurfDaily Inc. who sued Golden Panda Ad Builder President Clarence Busby amid allegations of racketeering have asked a federal judge to dismiss the allegations against Busby.

Meanwhile, Bank of America has asked the judge to stay the case until a federal forfeiture proceeding invoving AdSurfDaily and Golden Panda is adjudicated.

In essence, the bank is arguing that the forfeiture case provides a remedy for ASD members to gain refunds. The plaintiffs are expected to oppose the motion for a stay.

Bank of America was not named a RICO defendant in the racketeering lawsuit against Busby, AdSurfDaily President Andy Bowdoin and ASD attorney Robert Garner. Rather, the plaintiffs alleged the bank had aided and abetted Busby, Bowdoin and Garner in a fraudulent scheme.

The plaintiffs asked U.S. District Judge Rosemary Collyer to dismiss the complaint against Busby “with prejudice,” meaning they do not intend to bring it again.

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8 Responses to “BREAKING NEWS: Busby Dismissed As RICO Defendant; Bank Of America Asks Judge To Stay Lawsuit Until Forfeiture Matter Is Resolved”

  1. Three are a couple of issues here.

    Why on earth should a group of ex ASD members wish to dismiss the complaint that they themselves brought against Busby? Do they have business with him in other programs? Have they struck a deal? What could be their reasons to suddenly exclude from the ASD Enterprise?

    The other issue is, of course, the BoA’s attempt to delay any proceedings that could affect them. Their argument that ASD members will be compensated by the forfeiture is totally irrelvant to any culpability that that BoA may have in facilitating and perpetuating the ASD business. It certainly avoids the issue, but no more than that.

    Even with the protections afforded to banking institutions, it is exceedingly difficult to imagine that the President, Vice President and management staff of BoA Quincy were not fully cognisant with the ASD business model and internal practices. It must have been their biggest client and in small towns, banks are very familiar with the ins and outs of their major clients. If they did not know they were aiding and abetting a pònzi, then there is a valid argument for gross negligence – but that is difficult to believe. Irrespective of banking protection, they must have a large liability for the conduct of their Quincy branch, in the name of BoA

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  2. alasycia: If they did not know they were aiding and abetting a pònzi, then there is a valid argument for gross negligence

    Before anyone gets too carried away with the possibility of BoA being somehow complicit with ASD and therefore as a possible source of “refunds” thay would do well to consult relevant sections of the finCEN guidelines on compulsory filing of Suspicious Activity Reports:

    finCEN guidance document (fin-2007-g002) ” * Law enforcement may request that a financial institution maintain a particular account despite suspicious or potentially criminal activity flowing through it, but ultimately the final decision is left to the financial institution based on its policies and guidelines; and

    * While there is no requirement that a financial institution maintain such an account at law enforcement’s request, FinCEN would like it to consider the value of such an account in the fight against money laundering, terrorist financing, and other crimes.

    The guidance also provides a number of suggestions for credit unions, banks and thrifts that plan to comply with law enforcement requests such as: getting the request in writing from a supervisory agent or attorney; limiting the duration of the request to no more than six months; and maintaining documentation of these requests for at least five years after the request has expired.

    It also clarifies that a financial institution choosing to maintain such an accounts is still obligated to comply with all Bank Secrecy Act requirements, such as filing SARs”

    and FIN-2007-G003: # Confirmation that no additional legal process—such as a written request or subpoena–is required from “appropriate law enforcement and supervisory agencies” that request supporting documentation or a copy of the SAR)related to a Suspicious Activity Report (SAR) filing;

    # Clarification that “supporting documentation” refers to all documents or records that assisted the financial institution in making the SAR filing determination. What qualifies as supporting documentation will vary based on the facts and circumstances of each particular case;

    # Confirmation that disclosure of SARs to appropriate law enforcement and supervisory agencies is protected under the safe harbor provisions; and

    # An assertion that Right to Financial Privacy Act prohibitions against disclosure do not apply when FinCEN or a supervisory agency requests financial records or information during the exercise of its “supervisory, regulatory, or monetary functions” or where FinCEN, appropriate law enforcement, or a supervisory agency requests a copy of a SAR or the supporting documentation related to a particular SAR”

    Given the fact BoA is required to, and does, maintain Automated Account Monitoring under the Bank Secrecy Act (BSA) it seems highly unlikely that ASD could have slipped “under the radar”

    Given also the amount of information available to investigators, it seems far more likely that BoA DID supply SARs and, in fact, was co operating fully with the agencies involved.

    Further reading: http://www.irs.gov/businesses/small/article/0,,id=154557,00.html

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  3. Thx LRM,

    Good information. It also seems like ASD in its early small days could have slipped under the radar, even in Quincy. At their terminal size they clearly got attention, but possibly before April/May they might have been too small to run any red lights wrt the SAR/BSA guidelines.

    littleroundman…..Given also the amount of information available to investigators, it seems far more likely that BoA DID supply SARs and, in fact, was co operating fully with the agencies involved. Further reading: http://www.irs.gov/businesses/small/article/0,,id=154557,00.html

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  4. I couldnt agree with you more Entertained. I am sure that BoA will use LRM’s argument and more besides, however, for the period from thte opening of the 10 Bowdoin dba ASD accounts to the date when they may have reported the issue, but continued to operate the accounts, there is a time period where a major client of BoA Quincy was running a business which was illegal.

    Given the size of Quincy and the importance of any ASD accounts well before it hit the healdines, there is still a very strong argument for the culpability of BoA Quincy – from Pres and VP downwards.

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  5. alasycia: Given the size of Quincy and the importance of any ASD accounts well before it hit the healdines, there is still a very strong argument for the culpability of BoA Quincy – from Pres and VP downwards.

    You could be right, EXCEPT for the fact BoA has a publicly declared policy of co operating fully with SARs investigators,
    As per the finCEN guidance document (fin-2007-g002)

    “LAW ENFORCEMENT MAY REQUEST THAT A FINANCIAL INSTITUTION MAINTAIN A PARTICULAR ACCOUNT DESPITE SUSPICIOUS OR POTENTIALLY CRIMINAL ACTIVITY flowing through it, BUT ULTIMATELY THE FINAL DECISION IS LEFT TO THE FINANCIAL INSTITUTION BASED ON ITS POLICIES AND GUIDELINES”

    and

    “* While there is no requirement that a financial institution maintain such an account at law enforcement’s request, FINCEN WOULD LIKE IT TO CONSIDER THE VALUE OF SUCH AN ACCOUNT IN THE FIGHT AGAINST MONEY LAUNDERING, TERRORIST FINANCING, AND OTHER CRIMES”

    Given the wording of the finCEN wording, BoA and any similar financial institution are effectively caught between a rock and a hard place.

    Do they:
    1) co operate fully with Law Enforcement agencies, fill out SARs statements,(complying with the non disclosure requirements) then keep the accounts running and face the wrath of “victims” (who are generally NOT BoA customers)

    or

    2) co operate fully with Law Enforcement agencies, fill out SARs,(complying with the non disclosure requirements) then risk warning the scammer/s by CLOSING the accounts to then face the wrath of the public at large, who expect FULL co operation with law enforcement.

    or

    3) Face massive penalties and public ridicule by NOT filling out SARs

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  6. I take your point, and I am sure that that is what the BoA will argue. However, it is still inconsistent with the practices of BoA Quincy. It is difficult to believe that even the understaffed Gov, or the Head Office of BoA would knowingly allow a business that was known or suspected to be illegal to grow from a 30,000 member based company with a couple of million dollars to a 120,000 member base with tens of millions moving in and out, and do nothing until August 2008.

    I am making an educated guess, but suspèct that the Gov didnt become involved until late June, early July 2008 and that, prior to that, it was an issue for BoA. We know that the wheels of the court grind slowly, but given the fact that there is rumoured to be well in excess of 50 million dollars missing from the ASD coffers and possibly offshore, then the delay sounds more like tardiness on the part of BoA than the Gov.

    Just my thoughts and of course, this will in no way be affected by the massive and powerful legal defence of BoA in court.

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  7. do you guys know when golden panda members are getting refunds,
    i had $5000 in their…and im waiting on my refund still

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  8. John,
    As GP accounts at BoA were seized by the Secret Service at the same time as those of ASD, I believe nothing will happen with GP members until the forfeiture of ASD assets has been sorted out – including clawback procedures.

    Lynn or Patrick may have a better idea, but I believe that is the position at present.

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