What Happened To ASD’s Money In Canada?

UPDATED 12:42 P.M. EDT U.S.A (SEE BOTTOM OF POST FOR STATEMENT FROM SOLID TRUST PAY)

Over the weekend, some AdSurfDaily members reported they had received what amounts to partial refunds for money they spent in ASD. The members said they received the payment notifications in an email marked as a “final” refund through SolidTrustPay, a payment processor based in Canada.

The email did not disclose the authority by which STP was sending the refunds. It was not immediately clear if recipients were charged a fee for accepting the refund, and no accounting was provided.

Recipients, for example, were not told the size of the STP refund pool. One recipient, however, said he was told that the refund consisted of a pro rata share of the money ASD had on deposit in STP and that ASD had removed 63 percent of the money it once had on deposit on a date or dates uncertain.

If that is true, what happened to the 63 percent ASD removed? And when did ASD remove the money and who benefited from the removal?

ASD suspended operations Aug. 1, 2008, the date it was notified that its U.S. bank accounts were being seized. The U.S. Secret Service and federal prosecutors said in court documents that ASD had moved “several million” dollars into STP about two weeks prior to the seizure.

“Several million” implies at least $3 million. If that is the case — and if ASD removed 63 percent of the money in STP prior to STP freezing its account — then $1.89 million may be unaccounted for. If “several million” means $5 million, then $3.15 million may be unaccounted for. At a minimum, there has been no public accounting of the money by ASD.

What happened to that money?

It is not known if ASD had more than one STP account or if ASD executives and insiders used their personal STP accounts to store ASD money. It is possible that ASD, for example, had “unofficial” accounts — accounts that did not bear the names of ASD or ASD President Andy Bowdoin, but accounts into which ASD could funnel money with no transparent tie to the firm.

Here is what prosecutors said last August:

“Within the past two weeks, ASD has wired several million dollars to Solid Trust Pay from its BOA Accounts. A TFA also learned that earlier in July 2008, a bank other than BOA closed the last account that was controlled by Bowdoin or family members after that bank determined, and explained to them, that an investigation by the bank determined that Bowdoin appeared to be operating a Ponzi scheme. Bowdoin indicated that he purchased, or was seeking to purchase, a home in another country.”

Complicating matters is that ASD argued in court last year for emergency release of $2 million held by the U.S. government with court oversight, saying it needed the money to operate. Prosecutors pointed out that ASD had at least $1 million on deposit in Antigua, saying the firm’s “emergency” pleading was overblown.

ASD eventually acknowledged the Antigua money, saying it would repatriate it to the United States, along with an unspecified amount “currently being held with Solid Trust Pay in Canada,” as part of an oversight plan. On Sept. 16, ASD told U.S. District Judge Rosemary Collyer that Andy Bowdoin would step down from ASD, if necessary, as part of an oversight plan tied to the emergency petition for the release of money held by the government.

“Unless otherwise agreed to by the Monitor, Andy Bowdoin will not be an employee, officer or director of the Company,” ASD said in September. “He will act as a consultant to the Company on terms acceptable to the Monitor and will agree to follow the Code of Conduct developed as part of the Future Business Operations Plan.”

About two weeks later — on Sept. 30 and Oct. 1 — Collyer held an evidentiary hearing at ASD’s request to consider the oversight plan and the release of government-held funds with oversight. On Nov. 19, Collyer ruled that ASD had not demonstrated it was a legal business and not a Ponzi scheme, and denied the request to release the money and to implement an oversight plan.

It does not appear as if any ASD money in Antigua or Canada was repatriated. If 63 percent of the money ASD had in STP was removed on dates uncertain and no longer is available to become part of a restitution pool envisioned by the government, it leads to troubling questions about what happened to the money.

AdViewGlobal (AVG), a surf firm with close family, management and promotional ties to ASD, began a prelaunch phase in December, less than a month after Collyer’s ruling. ASD gave its official endorsement to the Pro-ASD Surf’s Up forum, and some of the Surf’s Up forum Mods and members went on to start a forum for AVG. That forum now has gone dark, as has a company-run AVG forum. AVG also uses STP.

AVG formally launched in February, and now has suspended cash-outs, made an 80/20 program mandatory if cash-outs resume, and exercised its version of a “rebates aren’t guaranteed” clause that permits it to keep all the money it collects from customers.

Prosecutors revealed in April that Andy Bowdoin had signed a proffer letter in the ASD case, an act that may signal he was willing to help the government untangle the ASD mess. In January, Bowdoin submitted to the forfeiture of tens of millions of dollars seized in August.

In February, though, Bowdoin changed his mind about submitting to the forfeiture, firing his attorneys without notifying them and proceeding as a pro se litigant to repopen his claim to the seized proceeds. At the same time, AVG transitioned into a “private association” that says it is based in Uruguay.

Read ASD’s September oversight plan that mentions money in Antigua and money held in SolidTrustPay.

Read the December forfeiture complaint that identifies George and Judy Harris — now identified as the owners of AVG — as beneficiaries of ASD’s illegal conduct.

Statement From Solid Trust Pay

SolidTrust Pay would like to make an official statement on the recent refunds received.

COMMENT: Vice President of SolidTrust, Stella Hiemstra, is responsible issuing any refunds from dormant merchant accounts. The funds did NOT come from Oceanna Music Publishing (a company also owned/operated by Ms. Hiemstra). The “oceannamusic” email was simply the email attached to the account, and Ms. Hiemstra uses that address in order to keep notifications emanating from it separate from other solidtrustpay based emails. The username and registered account was SolidTrust Group – the main merchant account of STPay. There was no hack, no scam, no conspiracy, no other company, no funneling of funds, no haircuts…it was just a plain refund process.

COMMENT: The ASD account in SolidTrust has now been dormant for over 6 months. It has actually been dormant for 11 months and, as is our policy, dormant merchant accounts with remaining funds are refunded back to the original senders of the funds. SolidTrust has never been contacted by any legitimate US or Canadian authority regarding the ASD situation. The funds in SolidTrust were never considered part of the total liability, and there was a relatively small balance remaining in the ASD account.

COMMENT – 2 million dollars was wired into SolidTrust early last summer, and these funds were immediately used for payments to ASD members who were SolidTrust Pay clients. This is perfectly normal activity for merchants who pay commissions/bonuses to their clients. They obviously have to fund their accounts at periodic intervals in order to honour their commitments.

COMMENT: due to the length of time and dormant state of the account, SolidTrust was acting on its own policies to return funds to clients. There was no interaction in these refunds by any ASD individual or Andy Bowdoin. SolidTrust has done many such refunds in the past. SolidTrust has developed its own software that calculates the value of funds sent, deducts any transfers received, and creates a resulting refund amount.

COMMENT: the wording on the refund was “final refund for AdsSurf Daily from STPay” which is exactly what it was – a final refund for that program, and coming from STPay.

CONCLUSION: SolidTrust prides itself on vigilantly monitoring all account activity and acting on its own policies fairly and equitably for all. It is shocked at the above comments, statements and accusations. There was not one single phone call or support ticket asking the questions posted in this blog, and the blog owner has not contacted us to find out the real, very simple, answers.

In light of this situation, SolidTrust may have to rethink its refund policy if any attempt by STPay to return funds to legitimate users is going to be construed as a suspicious act of some kind. We welcome our members comments on our refund policies – you can submit your opinions to: priority@solidtrustpay.com

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8 Responses to “What Happened To ASD’s Money In Canada?”

  1. I think Patrick you’re a little confused. For STP to refund pro rata @ 37% does not really need to mean that ASD withdrew 67%. STp, in theory is refunding what is left in the account, and at the rate they say is left, but that doesn’t mean that any money was removed. Participant could have been able to deposit through STP for several months before then, and withdraw during that time as well, so the amounts are not tied to the August 1st date as far as I can tell. Of course, STP, if they are the ones refunding the money, are also not disclosing what amount they are charging in fees to handle the transactions, and there is no law I am aware of that limits that. They could be holding $3 million, and decide to do refunds in order to be in the position of saying that they no longer hod any tainted funds, but there’s nothing to keep them from claiming 90% of that money as fees, refunding $300,000 among the members and still being able to claim with a straight face that they have refunded all ASD money they held. Neat trick. Unless and until Canada refines their regulation of online money transmitter businesses, processors in Canada are making it up as they go along and STP has in the past unilaterally declared other scams accounts with them to be abandoned funds and issued refunds according to their own whim and with no accounting to the public, a policy ripe for abuse by almost everyone.

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  2. Hi Gregg,

    I removed the reference to 37 percent prior to reading your note — probably while you were working on it.

    This story is based on these words received from an ASD member:

    “The balance that was frozen in asd’s stp account has been refunded at 37 cents in the dollar, the other 63% of funds had been removed along the way by asd prior to their stp account being frozen.”

    His assertion was that ASD had removed 63 percent of the funds.

    If true, some of it — or even all of it — could have gone to pay ASD members.

    This story, essentially, poses the question, “What if it didn’t?”

    In any event, the money appears to be unaccounted for. With ASD suddenly moving “several million” into Canada just prior to the seizure, I think it’s fair to ask what happened to that money.

    Regards,

    Patrick

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  3. Well, it would seem STP has the scammers over a barrel anyway as who is going to contest it? That would mean admitting the crime by the scammers.

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  4. Story has been updated above to include links to ASD’s September oversight plan that mentions ASD money in Antigua and in Canada’s SolidTrustPay, to the December forfeiture complaint that names George and Judy Harris — now identified as the owners of AdViewGlobal — as the beneficiaries of illegal conduct by ASD, and to include a statement from SolidTrustPay on its refund procedures.

    Patrick

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  5. Sometimes, it’s hard to tell which scammer is scamming which scammer. Can’t tell the players without a scorecard, or an audit.

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  6. One more thing to add to the mix, and confuse the issue even more. Canada enacted tougher rules for money exchangers based in Canada starting January 1, 2009. All money exchangers operating in Canada must now comply with the FISA requirements. The FISA rules does set maximum fees that a money exchanger can charge for their services. One has to wonder if this change in the rules might not have also played a role in STP’s refund of these monies.

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  7. This is perfectly normal activity for merchants who pay commissions/bonuses to their clients.

    Is that how STP views/viewed ASD? As a “merchant paying commission”? Was any sort of due diligence done on the “merchant” – otherwise known as “know your customer”?

    How about any of the other “merchants” that use STP as a payment processor? Are any of these checked to see if they are HYIP/AutoSurf or other sort of ponzi scheme?

    In light of this situation, SolidTrust may have to rethink its refund policy if any attempt by STPay to return funds to legitimate users is going to be construed as a suspicious act of some kind.

    So you may not return funds just because of some comments on a small insignificant blog? Surely, you should be more concerned with your business operating within the law. I’m not sure which laws in Canada apply to money laundering activity, but this is what EGold was charged with. And they were a favourite payment processor for HYIP/AutoSurf ponzi schemes.

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  8. There is nothing in the Sold Trust Pay statement that explains why they have returned funds in such an arbitrary fashion – some people with 37% and others with less.

    Equally, their reference to “merchant paying commission”, as Tony H has already pointed out, is a strange way to refer to the account of a client who they KNOW is the subject of a US forfeiture prosecution on the grounds of illegal operations, wire fraud and money laundering.

    I was not aware that their terms and conditions permitted clients with illegal or fraudulent activities – they are very broad and all encompassing and seem to give STP an enormous amount of protection against nearly everything, but the return of monies that belonged to a company under a major civil and possible criminal investigation sounds commercially, morally, if nmaybe legally reprehensible.

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