Plaintiffs Say BOA Dismissal Motion Should Be Denied, Ask Court To Note 80/20 Plan And SolidTrustPay Activity, Cite ASD Payoff Of Mortgage Held By AdViewGlobal Owners
A federal judge should deny Bank of America’s motion to be dismissed as a defendant in a case that alleges it aided and abetted racketeers operating a massive Ponzi scheme from a former floral shop in Quincy, Fla., the plaintiffs argued yesterday.
Bank of America is not named a RICO defendant in the case, which was filed by three members of AdSurfDaily. The plaintiffs seek class-action status and treble damages.
The bank said in court filings that it has done nothing wrong, and argued that the plaintiffs had made vague assertions and not stated a proper claim.
Attorneys for the plaintiffs disagreed, filing a lengthy response to the bank’s dismissal motion — a response that cites suspicious wire transactions ASD routed through SolidTrustPay, a payment processor based in Canada.
Meanwhile, the plaintiffs said the bank ignored ASD President Andy Bowdoin’s felony criminal record, his ties to a previous securities scheme and his history of operating multiple failed businesses. The plaintiffs made a veiled reference to ASD’s efforts to promote an 80/20 program — something that is occurring now in the AdViewGlobal (AVG) autosurf, which has close ASD ties.
At the same time, the plaintiffs referenced a December forfeiture complaint in which federal prosecutors alleged that ASD money was used to retire the home mortgage of George and Judy Harris. George Harris is the stepson of Andy Bowdoin and the son of Edna Faye Bowdoin, Andy Bowdoin’s wife. Judy Harris is the wife of George Harris.
AVG, which previously had disclaimed any affiliation with ASD, now says it is owned by George and Judy Harris. Andy Bowdoin identified George Harris last summer as the head of ASD’s “real estate division.”
Attorneys for the plaintiffs also referenced Andy Bowdoin’s own acknowledgments that ASD was operating illegally.
“ASD was the brainchild of Thomas Bowdoin, a convicted felon with a history of securities fraud violations and failed business ventures,” the plaintiffs said. “Bowdoin admits that ASD operated [as] a Ponzi scheme.
“ASD sold no products or services, held no intellectual property rights, and had no successful business professionals in management or on its Board,” the plaintiffs continued. “ASD had no colorable legitimate means to generate the massive profits (365% per year) Bowdoin and his co-conspirators promised investors nor the tens of millions of dollars a month flooding its tiny office — a former floral shop — in the small town of Quincy, Florida.”
The bank missed key markers of a scam, the plaintiffs alleged.
“Indeed, when Bowdoin began his relationship with Bank of America, the illegal ‘AutoSurf’ schemes which ASD emulated were well known among banks, regulators and law enforcement authorities,” the plaintiffs said.
“It is no wonder that the two local banks in Quincy refused to even open an account for Bowdoin and ASD. Bank of America, on the other hand, welcomed Bowdoin with open arms, allowing him to open not one but ultimately 10 separate d/b/a accounts. In one month alone, $90 million dollars in cash, cashiers checks and Visa credit card charges were deposited in these accounts. Bank of America made it possible for victims throughout the country to deposit funds with the Ponzi scheme by simply completing a deposit slip and adding the ASD account number. Many of the deposit slips were even pre-printed with ASDâ€™s account information.
“Bank of America also enabled unsuspecting victims to wire transfer contributions to ASD from anywhere in the world,” the plaintiffs said. “Bank of America willingly allowed ASD to falsely legitimize its operations using the Bankâ€™s good name. Bank of America never once questioned or asked ASD to remove its name from its website or written materials that prominently featured Bank of America.”
Reference To Harris Mortgage
On Page 15 of their answer to the bank’s dismissal motion, the plaintiffs referenced the government’s assertion that ASD money was used to pay off the home mortgage of George and Judy Harris and in other unusual ways.
“By virtue of its active involvement in ASDâ€™s business affairs, Bank of America was aware that funds flowed from the RICO Defendantsâ€™ accounts in a manner inconsistent with a legitimate business,” the plaintiffs asserted. “Bowdoin, in particular, used ASD business accounts at Bank of America with impunity to purchase personal luxury items, to pay off mortgages for family members, to buy property, and to otherwise dissipate business funds.”
The plaintiffs then referenced what they described as red-flag-waving transactions ASD routed to Solid Trust Pay, a payment processor based in Canada.
“ASDâ€™s transfers of funds from Bank of America accounts also provided Bank of America with information about the suspicious nature of ASDâ€™s operations,” the plaintiffs said.
“In a two-week period, the RICO Defendants wired several million dollars from their Bank of America accounts to an internet-operated, Canada-based money transmitting and payment company. Such a transaction is not consistent with a legitimate business enterprise.
“The RICO Defendants additionally used funds from the Bank of America accounts of one scheme, ASD, to seed the Bank of America accounts of another scheme operated by the RICO Defendants, Golden Panda. These transactions, too, were consistent with a fraudulent scheme, and inconsistent with legitimate business activity.”
On Page 25 of their answer to Bank of America, the plaintiffs referenced ASD’s efforts to get members to participate in an 80/20 program. Such programs are designed to stem the outflow of cash from an autosurf.
“The RICO Defendants counseled members on reinvesting rebates and commissions under the auspices of trying to help members maximize their financial gains,” the plaintiffs said.
AVG, which announced that it was suspending payouts to members, advised members that participation in an 80/20 program would be mandatory should the surf resume payouts on a date uncertain.
AVG’s name was mentioned in a previous filing by the plaintiffs, although the surf firm has not been named a RICO defendant.
Andy Bowdoin, a RICO defendant along with ASD attorney Robert Garner, has not responded to the complaint, which was filed in January and amended in April. Garner answered the complaint, saying U.S. District Court for the District of Columbia did not have jurisdiction over him.
Read the plaintiffs’ answer to BOA.