ANNIVERSARY EVE: Message That Altered Lives Appeared On AdSurfDaily Website One Year Ago Tomorrow

Ponzi back in vogue in big way.

Ponzi back in vogue in big way.

It was before Bernard Madoff and before Sir Allen Stanford. President Obama was candidate Obama. Sarah Palin, the little-known governor of Alaska, would not become part of the public consciousness for nearly another month. Few people had heard of the so-called “Arby’s Indians.” Fewer yet could instantly place Uruguay or Panama on a map or understand the acronym “RICO” without a quick trip to Wikipedia. No one had heard of AdViewGlobal, BizAdSplash or AdGateWorld. The 31st Annual Pilgrimage to Graceland  to commemorate the life and passing of Elvis Presley would not begin officially until Aug. 9, another eight days.

Regardless, the term Ponzi scheme — which goes missing from the public consciousness for years at a time, despite the nonstop play it recently has received — started making a big comeback late in the afternoon of Aug. 1, 2008. For good measure and to sear the memory, nature treated part of the world to a total eclipse of the sun on Aug. 1. The small town of Quincy, Fla., was too far south to witness the spectacle — but Quincy soon would witness a spectacle of its very own.

Friday, August 1st 2008 afternoon update

Upon direction from the U.S. Attorney’s Office in the District of Columbia, ASD will not be able to move funds into company accounts, or out of them. We will work to resolve this problem, and return to normal operation, as soon as we are permitted to do so.

ASD Management.

Yes, ASD signed this life-altering message “ASD Management.” A company that claimed to be a professional advertising and communications firm — one whose promoters claimed had Fortune 500 clients and signed contracts from major advertisers for millions of dollars — lost the PR war with a single, vague posting.

It was only the first of many incongruities. Reporters who called later were told there was nothing to fear because God was on ASD’s side.

Quincy’s spectacle began on Aug. 5, the date agents showed up with search warrants for ASD’s headquarters and the home of ASD President Andy Bowdoin. WCTV was the first media outlet to report the news. Here is how we put it:

WCTV is reporting that agents are executing a search warrant at ASD Cash Generator headquarters in Quincy, Florida.

Details are sketchy. WCTV serves Tallahassee, Thomasville and Valdosta., and is a CBS affiliate.

Our first update came at 3:09 P.M. EDT (U.S.A.):

WCTV is reporting that the U.S. Secret Service and the Gadsden County Sheriff’s Department are conducting the raid at ASD Cash Generator. Agents reportedly are searching for documents and computers.

We obtained a copy of the forfeiture complaint later in the day. Here are the initial quotations and background we published from the complaint.

” . . . there is reasonable cause to believe that ASD, Thomas A. Bowdoin, Jr. and others, devised and intended to devise a scheme or artifice to defraud, or a scheme for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, and that he and they transmitted or cause to be transmitted by means of wire, communications in interstate or foreign commerce (including writings, signs, signals, pictures, or sounds), for the purpose of executing such scheme or artifice, to wit: an Internet-based Ponzi scheme, in violation of Title 18, United States Code, Section 1343 (Wire Fraud); and in violation of Title 18, United States Code, Section 371 (Conspiracy to Commit Wire Fraud),” the complaint read in part.

“Further, based on the information provided herein, there is reasonable cause to believe that the defendant properties constitute proceeds of the above-specified offenses or property involved in financial transactions, with wire fraud proceeds, that are prohibited by the federal anti-money laundering statutes.”

ASD sales materials positioned Bowdoin as an accomplished business person who once received a medal for business achievement from President Bush. Federal prosecutors, however, say Bowdoin received no such medal from Bush and that “successes are remarkably absent from his true work history.”

Bowdoin “was arrested in Alabama for one or more felony violations related to Fraud in Connection with the Offer and Sale of Securities by an Unregistered Agent,” prior to his involvement in ASD, prosecutors said.

In the Alabama case, prosecutors said, Bowdoin and co-defendants in a company known as Mobile International Inc. were charged with selling “unregistered securities to investors and with failing to state material facts to the investors that would have impacted the victims’ decisions to invest.

Alabama officials asserted Bowdoin “instigated a scheme by which he took money from some victims to pay off prior investors,” prosecutors said.

Charges were dismissed after Bowdoin agreed to enter Pre-Trial Diversion with three years’ supervised probation. He was ordered to pay $15,000 in restitution to victims. The case was settled in 1997.

Then, in 1999, Bowdoin plead guilty in Wilcox County to one count of selling unregistered securities. He was sentenced to a year in prison and three years’ supervised probation. The prison sentence was suspended, and Bowdoin was ordered to make restitution in the amount of $75,000.

U.S. Attorney Jeffrey A Taylor of the District of Columbia, the U.S. Secret Service, the Internal Revenue Service and other agencies are involved in the ASD probe, which also involves Golden Panda Ad Builder, another autosurf.

An IRS-Secret Service Task Force agent opened an A[SD] account as part of the investigation, according to the complaint. Agents also interviewed a number of ASD members as part of the investigation.

Here is how we followed up on Aug. 6:

Yesterday U.S. Attorney for the District of Columbia Jeffrey A Taylor filed a forfeiture complaint in a case involving Ad Surf Daily Inc., ASD Cash Generator, Thomas “Andy” Bowdoin, Golden Panda Ad Builder, Clarence Busby Jr. and Dawn Stowers.

Meanwhile, some ASD members appear to be acting in organized fashion to criticize the government. This has led some ASD critics to dismiss Bowdoin’s advocates as “Kool-Aid” drinkers. References to Bowdoin, Christianity and religion are common parts of the discussion across the Web.

Federal prosecutors and the U.S. Secret Service, which raided ASD’s Quincy, Florida, headquarters, are seeking $53 million held in various Bank of America accounts, a condominium in Myrtle Beach, S.C., and Bowdoin’s home in Quincy.

The Justice Department called ASD a “massive Internet-based wire fraud scheme,” alleging that ADSurfDaily Inc. was nothing more than a common Ponzi that used incoming money from new ASD members to sustain payouts to earlier members of the program.

Some ASD members appear to be going on the offense, attacking the government and flooding news sites, Blogs and forums with defenses for ASD and Bowdoin. Some of the messages have a fire-and-brimstone quality. The message in many cases is that ASD members have a Christian duty to back ASD and Bowdoin, who has a criminal record in Alabama for selling unregistered securities and bilking investors.

WCTV-TV, a CBS affiliate in Tallahassee, has been flooded by comments from ASD members. Many of the posts are defenses for Bowdoin. Some posters mentioned a medal Bowdoin allegedly received from the Bush administration for business achievement. Prosecutors said Bowdoin received no such award, even though the alleged award was cited in ASD advertising materials.

Other posters compared the government’s actions yesterday to the actions of Nazi Germany. Others suggested the government was involved in a conspiracy to defame Bowdoin and that overzealous prosecutors were trying to destroy private enterprise.

ASD members have contacted this Blog, saying it has a duty to investigate the Social Security program if it is going to report on ASD Cash Generator. The argument — directed at this Blog and at others — is that Social Security is a government-sanctioned Ponzi. It therefore follows that ASD should be let off the hook.

Elsewhere online there are reports of people who’d directed life savings and large sums of cash at ASD. One Blog poster and ASD member asked if anybody could point him in the direction of a bridge from which he could jump. The post appeared to be in jest, but it’s easy to believe that people who have thousands of dollars tied up in ASD are unnerved.

The Government Makes Its Case Against Bowdoin And Busby

Bowdoin once was sentenced to prison for his role in a securities scheme. The sentence was suspended after he agreed to three years’ supervised probation and to make restitution in the amount of $75,000, according to the Feds’ complaint.

Like Bowdoin, Golden Panda’s Busby also had a previous run-in with the law over securities issues.

In 1997, according to prosecutors, the “SEC successfully charged that Busby had violated anti-fraud provisions of the Securities laws by offering and selling investment contracts in connection with three different ‘prime bank’ schemes. Busby was accused of raising money for purported trading programs in ‘prime bank’ notes by fraudulently representing that investments were risk-free and the ventures would result in returns ranging from 750% to 10,000%. In total, Busby raised nearly $1 million from more than 70 investors.

“None of the investors earned the exorbitant returns promised by Busby,” prosecutors said in the forfeiture complaint. “Busby was ordered to pay $15,000 in disgorgement to victims; however, after Busby filed a financial statement to support a professed inability to pay, the court dismissed the order of payment. Busby filed for bankruptcy in 1997. This information was not disclosed on Golden Panda’s webpage or mentioned by Busby during his recent conference call.”

Although Bowdoin positioned ASD Cash Generator as an advertising program, the government said it was a smokescreen.

In July 2008, according to the forfeiture complaint, the Ad Cash Generator website stated that ([emphasis] added):

All payments made to ASD are considered advertising purchases, not investments or deposits of any kind. All sales are final. ASD does not guarantee any earnings or profits. Any commissions paid to Members are for the service of viewing other Member web sites and for referring Members to AdSurfDaily. All advertising purchases are non-refundable.

Prosecutors dismissed the disclaimer language, calling it “ASD’s effort to avoid being recognized as an unregistered issuer of securities and to avoid liability to participants, for breaking promises it makes elsewhere, when the Ponzi is revealed.”

Government Describes Role Of ASD Attorney Robert Garner

It was widely known online that ASD explained to new members that its program was legal — and used an attorney to help make it’s non-Ponzi case.

The attorney, Robert Garner, appeared in a video alongside Bowdoin and is mentioned prominently in the forfeiture complaint.

Here’s what the government had to say about Garner’s video appearance with Bowdoin:

“Mr. Garner proceeds to explain that Bowdoin hired [Garner] to insure that ASD’s operations are legal in all aspects. Garner assures the viewer that he and ‘other attorneys in our offices . . . are dedicated to this work with Andy and his company.’ He continued by saying his attorneys ‘are available at any time to deal with the issues as they arise.’

“Garner address[ed] the concerns that new ASD members sometimes have in the area of the legality of the Ad Cash Generator opportunity, by saying: ([Emphasis] added):

Andy has directed us to ensure that his company is structurally sound today and tomorrow and far into the future. My staff and I are dedicated to Andy’s vision that his company will continue to rapidly grow bigger and stronger, and will continue to be an industry leader in Internet advertising in the years to come.

“According to Garner,” the forfeiture complaint continued, “ASD . . . complies with all laws and regulations that apply to it. In explaining that ASD is not a Ponzi scheme, Garner notes that a Ponzi scheme is ‘illegal, because [it] use[s] money from new investors to pay the first investors in the scheme their promised returns.'”

“On behalf of ASD, on its website,” prosecutors said in the forfeiture complaint, “Garner advises prospective members that ASD is not a Ponzi scheme because, among other things, ASD is developing other revenue sources and ‘[t]here is no continuing obligation to pay returns to infinity.’ Contrary to Garner’s claim that this is not a Ponzi scheme, however, an infinite payment obligation is irrelevant and the lack of a non-member revenue source is a tell-tale sign of a Ponzi.”

In what prosecutors described as a “further attempt to make Bowdoin’s business model sound more legitimate, Garner describes ASD rebates as ‘function[ing] something like ‘loss leaders’ in that advertisers are presented [with] a way[ ] to earn their money back, plus a little more, in addition to having their ads viewed on the internet.'”

But an IRS-Secret Secret Service Task Force has “not found any other product or service that ASD sells, aside from new memberships, to cover the ‘losses’ it incurs by allowing its so-called ‘advertisers’ to ‘earn their money back, plus a little more,'” the government said in the forfeiture complaint.

Agents discovered that ASD’s “Nevada incorporation documents list Garner as a director. [Garner], however, does not disclose the fact that he is an insider of ASD in his interview, in his typewritten opinion letter that appears on ASD’s webpage, or anywhere else on ASD’s webpage,” the complaint said.

“Furthermore, although Garner is admitted to the North Carolina Bar, it appears that [Garner] works out of his home and that he does not employ the team of lawyers that, he claims, have worked diligently to confirm ASD’s legality,” prosecutors said.

All in all, the government’s forfeiture complaint takes up 101 pages (including exhibits).

A year has passed. The documentation is much thicker now. Andy Bowdoin has fewer people willing to support him publicly. AdViewGlobal is in a state of decay; like AVG, BizAdSplash recently announced the suspension of member cash-outs. AdGateWorld announced it was selling itself to an unnamed party in the Middle East.

The autosurf world continues to alter lives, continues to turn friend against friend and family member against family member. Every day is a total eclipse of the sun.

About the Author

17 Responses to “ANNIVERSARY EVE: Message That Altered Lives Appeared On AdSurfDaily Website One Year Ago Tomorrow”

  1. Wow, no wonder George and Judy Harris moved to Uruguay!! Where is Andy when we need him??? Oh, right.. Who needs him??

    Good article, thanks, Patrick

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  2. Great recap Patrick. I had forgotten that this occurred on the same day as the I35W bridge collapse here in Minnesota. The bridge has been rebuilt and in use for some time now. Thirteen died, 145 were injured.

    Amazingly we are all still waiting on the courts regarding ASD and Andy.

    Keep up the great work, we appreciate you!

    Roxy Lewis, Ning #9

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  3. Yuyp, that was one h*ll of an eclipse!. it was a very powerfu8l day.

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  4. Patrick:

    Thanks for the flash-back to the beginning of the end. Just imagine what a flow chart would look like from then to now. Someone would think they let a drunk sailor loose trying to read it. Hopefully before the second anniversary, we will actually have a trial or trials underway. One can hope.

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  5. Yep ASD crash, I35W bridge collapse and my son left for Afghanistan all on the same day…it was surreal. Unfortunatlely they can bring my son home (safe and sound) and build a new bridge before they can put a crook in jail.

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  6. Actually this is the 2 year anniversary of the bridge collapse so ASD went down on the one year anniverary of the bridge. My son left for Boot camp the day the bridge crashed and left for Afghanistan exactly one year later. So that’s a big nevermind. I know I’ll never forget the day the bridge collapsed here in Minnesota nor will I ever forget my son leaving that same day but I hope some day I forget all about ASD.

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  7. saint Michael: Yep ASD crash, I35W bridge collapse and my son left for Afghanistan all on the same day…it was surreal. Unfortunatlely they can bring my son home (safe and sound) and build a new bridge before they can put a crook in jail.

    The basic difference/s are, your son WANTED to come home, the US government WANTED to bring him home, people WANTED the bridge to be rebuilt and the relevant authorities WANTED to build it.

    Bowdoin and Co did not and do not want to be prosecuted.

    If ASD is anything like previous HYIP ponzi “autosurf” frauds, (and there’s absolutely no reason to assume otherwise) the fraudster/s have made sure from day one that they’ve done EVERYTHING they can to make their eventual prosecution as difficult as possible, i.e. incomplete or non existent records, unverified “members,” deliberately concealed funds transfers, anonymous payment processors, the whole box and dice one could expect of this sized planned fraud.

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  8. Does anyone have updated info on ASD? where is everyones money at this point and is there any hope of seeing it again?

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  9. Hi ken A.,

    Not sure where your money is (but I have a good idea). Andy Bowdoin’s money was seized a year ago. Many ASD members think the gov’t seized their money, but Andy Bowdoin claims that the money seized was his, and the government and the Federal court agree. YOUR MONEY WAS NOT SEIZED. Andy Bowdoin and accomplices likely have your money. There is some hope of getting restitution, but it will take a while. littleroundman and Gregg Evans have posted here several times as to the likely path forward for ASD’s victims, and you can search this site for their posts. In the meantime, consider suing your upline. They’re liable as well.

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  10. Breaking News (dB Style)

    “SEC investigation: We missed Madoff”

    http://money.cnn.com/2009/09/02/news/economy/Madoff_SEC_investigation/index.htm?postversion=2009090214

    Ya think?

    Here is the full text of Harry Markopolos’ report he sent to the SEC. Any red flags here?

    http://michaelcovel.com/pdfs/Madoff_SECdocs_20081217.pdf

    dB

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  11. Thanks, d_b,

    Here is a link to the executive summary:

    http://sec.gov/spotlight/secpostmadoffreforms/oig-509-exec-summary.pdf

    Patrick

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  12. HAving just read the Executive Summary in its entirety, all I can say is WOW!
    It is quite some tale of complacency, insitutional arrogance, incompetance and disorganization.

    thank heavens the Secret Service seems to be taking over from the SEC on the autosurf frong and other financial fraud.

    Ironically, the total lack of control and coooperation that kept Madoff out of jail all those years, is reflected by the laisse faire attitude of the whole financial sector which has caused the present financial crisis.

    It is time when, as a society, we should stop being dazzled by large numbers of dollars and started asking for some accountability about how they were made and where the money is coming from

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  13. I have read the executive summary and am truly astonished.

    Madoff reminds me off all the Ponzi operators. His behavior fits that of Bryan Marsden of PIPS to a “T”. Nothing changes.

    From page 14.

    When the examiners began their on-site examination of Madoff, they learned Bernard Madoff would be their primary contact and Madoff carefully controlled to whom they spoke at the firm. On one occasion, when a Madoff employee was speaking to the NERO examiners at Madoffs firm, after a couple of minutes, another Madoff employee rushed in to escort her from the conversation, claiming she Was urgently needed. When the examiners later asked Madoff the reason for the urgency, Madoff told them her lunch had just arrived, even though it was 3:00 o’clock in the afternoon.

    Again on page 14. Marsden did the same thing. He grew very agitated when critics did not fawn over his “explanations”.

    When the NERO examiners would seek documents Madoff did not wish to provide, Madoff became very angry, with an examiner recalling that Madoffs “veins were popping out of his neck” and he was repeatedly saying, “What are you looking for? …. Front running. Aren’t you looking for front running,” and “his voice level got increasingly loud.”

    On page 17. This quote could have come from the clueless on the AV4U MMG board. They just dismiss the critics because, as insiders, they presume the critics do not have credible information or are incapable of understanding the program.

    Even though the NERO.examination had focused solely on front-running, NERO examination team downplayed the possibility that Madoff was conducting a Ponzi scheme, saying, “these are basically some of the same issues we investigated” and that Markopolos “doesn’t have the detailed understanding of Madoffs operations that we do which refutes most of his allegations.”

    All in all the report is eye opening. It sounds like the SEC was incompetent to the core. No wonder nobody fears them. It’s also no wonder that the clueless people who think AV4U and ASD are real and the serial Ponzi promoters just point to the Madoff and other operations as justification for playing the Ponzi game.

    The huge irony is that organizations like the Simon Wiesenthal Center are subject to clawbacks but SEC Directors get to keep their salaries.

    Scathing is the only word that comes close to describing this summary.

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  14. Sickening was the word that came into my mind. Maybe the clawbacks should be deducted from the salaries of the people who appointed these incompetants.

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  15. Don’t be so quick to judge. In a scam the size and scope of Madoffs, there is first an incredible amount of documentation to sort through, I’m talking hundreds of bank boxes full of documents. Add to that the fact that SEC auditors are severely overworked and I suspect in this one case at least they were a little reluctant to believe that Bernie Madoff was really running a cheap ponzi scheme, he was after all a former head of the NASDAQ. A preliminary investigation also likely involved very junior examiners, people making about $30K a year, and from experience I can tell you you want to think there’s something there you must be missing, no REAL businessman would be doing something this blatant. That’s what surprised me about Madoff, he was running a scam not much more complicated than what I expect from the HYIP industry, he certainly had the skills to do better, I’d have thought.
    Yes, they missed a lot, and they should have gotten him years ago, but I do see how it happened, and trust me, no one feels as much shame as the ones who now know that they should have seen it.

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  16. Gregg,

    I am going to have to respectfully disagree with you on this one.

    Years ago, I got called into our family business to take over the accounting operations. My experience at that point consisted of one accounting class and brute force figuring out how to reconcile the books for my business.

    The owner “had a feeling” that something was not right because what was reported didn’t match her “impressions” in certain areas. She just couldn’t prove it since she was relying on the bookkeeper and outside CPA. The CPA gave her signed and certified copies of everything which we needed for our bond and insurance. Within 10 minutes of looking at the detailed ledgers, I knew for a fact that our books were fiction.

    The CPA had made the basic mistake of relying solely on the verbal statements of the bookkeeper and relying on her consolidated statements without even spot checking the underlying documentation.

    The same thing happened with the SEC in the Madoff investigation.

    I can understand that freshly minted investigators were intimidated by the former chair of the NASDAQ.

    I can fully understand that investigators weren’t conversant on reverse butterfly spreads and other exotic instruments.

    Madoff wasn’t doing anything exotic. He was long the underlying security and hedged with index options which is as basic as it gets with options. He also did a few spreads which means you are long or short one set of options at one strike price and long or short another set of options at another strike price or expiration date.

    The investigators never bothered to check whether his accounts at third parties held the amounts stated. They relied solely on his statements, verbal and otherwise.

    The investigators never bothered to check whether the open interest or trading volumes reflected his alleged activity. They didn’t. He was verbally stating that his activity and positions in the instruments he traded was larger than the total market in these instruments.

    It’s not that Madoff was mixing in a few bogus trades in a market with high volume, it’s that he never, ever traded. There never were any counter parties.

    The Madoff situation is exactly akin to the local police interviewing a suspect and clearing him based solely on his statements. Even a local investigator freshly out of college knows you check the alibi. The SEC never bothered and that’s how he got away with it for so long with all the whispers and Markopolis’ documentation.

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  17. Having read the 22 page report, I am inclined to agree with DB. It is not the operators in the field who should bear the brunt of the blame – they only do what they are told and do not necessarily have the experience necessary to make valid assessments. However the people who sent them to investigate will have to shoulder the responsibility. This was not a common or garden scam being reported, it was suspcion of a scam at a very high level – the ex president of NASDAQ. It merited at least a more serious and sophisticated attention. The responsibility lies with the idiot who sent in a team of littel more than undergraduates, instead of the SEC Crack Team

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