MUSINGS: It’s Possible ASD NEVER Operated Legally

EDITOR’S NOTE: Many observers hold the view that ASD broke the law the first time it paid an “old” member with funds from a “new” member in the classic Ponzi setup. It’s hard to argue with that point of view, given the failure of hundreds and hundreds of autosurfs, all of which used a Ponzi model and were pushed by serial Ponzi promoters.

Regardless, the Ponzi discussion is only one element of the ASD case, which was brought as a wire-fraud and money-laundering prosecution amid assertions that ASD was selling unregistered securities and operating a Ponzi scheme.

This column seeks to promote discussion about whether ASD ever operated legally.

As pro se motions from individual members criticizing the government’s actions in the AdSurfDaily forfeiture case continued to pile up last week, prosecutors filed a brief that says filers “must establish an interest in a property that existed before the crime occurred.”

Can the pro se filers do it? Can they demonstrate that their investment in ASD — what they claim was a purchase of  “ad packages” to be displayed in ASD’s rotator — occurred before the company morphed into what the government calls a criminal enterprise?

We think not.

We’d like to applaud the filers’ participation in the judicial process, but we cannot. The filings are disingenuous. They were made from a template circulated among at least one ASD downline group. And they make claims contrary to the public record of the case — a record that has been published in multiple places.

Among other things, the filings claim:

  • The U.S. Government has failed to produce any EVIDENCE of alleged wrongdoing.
  • The U.S. Government has failed to produce any WITNESSES of alleged wrongdoing.
  • The U.S. Government has failed to produce any VICTIMS of alleged wrongdoing.

All of these claims are disingenuous to the extreme and can be defeated by one simple fact: A trial date has not even been set in the case. Regardless, the pro se filers are telling a federal judge that the prosecution “has failed” to do all of these things, as though the judge does not have a clue about a case over which she is presiding and scheduling in consultation with the parties.

These filings are an insult to the judge. Moreover, they are an insult to the rank-and-file members of ASD. The members have been subjected to months and months of tall tales told by members of the Pro-ASD Surf’s Up forum. Now they’re being subjected to a litany of disingenuous filings by individual ASD promoters.

ASD had asked last year for an opportunity to present its witnesses at an evidentiary hearing to argue against the Ponzi allegations. The prosecution did not object to the hearing, and the judge granted ASD’s request. She later ruled that ASD had not demonstrated it was a legal business and not a Ponzi scheme at the hearing, explaining that ASD’s testimony was at odds with itself and contradicted by ASD’s “come on” statements on its own website. (Emphasis added below.)

“The lay testimony of [ASD Member] Mr. Grayson belies the expert testimony of [ASD Expert Witness] Mr. Nehra,” the judge said. “Mr. Nehra repeatedly asserted that ASD does not ‘guarantee’ rebates under the Terms of Service, see Terms of Service at 2 (Ad Packages and Credits) (“ASD does not guarantee any earnings and/or rebates”), but his testimony cannot be relied upon because (1) it is contradicted by come-on statements on the ASD website and Mr. Grayson’s testimony and (2) it relied solely on the written words contained in the Terms of Service without independent investigation or review of ASD’s business records to ascertain how ASD operates in fact before opining.”

But let’s return to the issue as to whether filers can demonstrate that they ever were members of a legal enterprise.

There is evidence that an ad for ASD in February 2007 — only a few months after ASD’s launch — promised “shelter” from the Federal Trade Commission and the Securities and Exchange Commission. Every dollar that flowed into ASD from that ad was polluted by fantastic lies. The people who sponsored the ad were representatives of the ASD organization.

“Shelter” from the FTC and SEC? And “shelter” provided by an “advertising” company no less? Go to your local newspaper, radio, television or billboard provider. Ask if they ever provided “shelter” from the FTC or SEC to any of their advertising clients.

Moreover, there is evidence that members were advised their ASD deposits were insured by the FDIC. The suggestion was that one could not lose with ASD because members’ individual ASD accounts — ad-pack numbers on a screen — were insured against loss by the FDIC.

Meanwhile, there is evidence that debit cards used by ASD were the same debit cards used by what the Drug Enforcement Administration described as a major drug operation in Medellin, Colombia. Yes, that Medellin.

Records suggest that the man who provided the debit cards to the Medellin operation is the same man who provided the debit cards to ASD and that the man or his intermediary participated in an ASD function in November 2006, just days after ASD began to build its web operation.

Meanwhile, there is evidence that ASD members were not getting paid shortly after the company’s launch, that at least $1 million came up missing from the enterprise at the purported hands of “Russian” hackers and that resources were depleted by scripting errors.

At the same time, the record suggests that ASD President Andy Bowdoin was involved in a failed surf known as DailyProSurf prior to the October 2006 launch of ASD. This leads to the intriguing possibility that ASD was in the hole before it even started and that the initial ASD iteration was used to pay back DailyProSurf members for losses they sustained.

Even if that was not the case, there is evidence that ASD morphed into ASD Cash Generator and did not tell new members that their money was being used to pay members of ASD’s first or previous iterations.

Some of this evidence dates back to January 2006 and, in August 2006, two months before the launch of ASD, Bowdoin registered the name DailyProSurf in Florida. It is a matter of public record.

Bowdoin also donated money to the National Republican Congressional Committee in early 2007, even as ASD members were not being paid and the patriarch was consulting with “leaders” in Atlanta to come up with a turnaround plan. It is a virtual certainty that Bowdoin’s campaign donations came from Ponzi proceeds.

Also, public filings in Florida show that the building ASD was using — the former flower shop owned by his wife in Quincy — used the address of 11 S. Calhoun in the 1990s and 13 S. Calhoun during this decade.

Good luck trying to prove you ever were a member of a legal enterprise. It is possible that ASD never operated legally — not even before it made what prosecutors described as Ponzi payouts.

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7 Responses to “MUSINGS: It’s Possible ASD NEVER Operated Legally”

  1. Quick note:

    SEVEN more motions to intervene have just been docketed in the ASD civil-forfeiture case. This brings the unofficial total to 38 since Aug. 24.

    Judge Collyer denied the first 10 motions Aug. 31 for lack of standing.

    The case was nearly litigated to conclusion in January, with Andy Bowdoin’s submission to the forfeiture. Since that time the docket has been dominated by pro se motions — an unofficial total of 54 since February.

    Bowdoin’s January motion to submit to the forfeiture was the 39th entry on the docket. As of this writing, the docket has ballooned to 125 entries.

    The vast, vast majority of docket entries since January have been pro se motions, responses to pro se motions or judicial orders pertaining to pro se motions in which the pro se filers were denied standing.

    Patrick

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  2. Another quick note:

    Three more motions were docketed in the past few minutes, bringing the unofficial total to 41 since Aug. 24 and 57 since February.

    Some of today’s pleadings were mailed days after after the judge ruled against the first 10 petitioners Aug. 31.

    Patrick

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  3. Having been one of the earlier members of AdSurfDaily, I just thank the lord that I never put much money in and thank him even more that I never took money out and so have never taken anyone elses money. The rest just makes me feel sick.

    AdSurfDaily was a straight autosurf to begin with, although there were many discussions and online calls to talk about the development of more afdvertising elements – along the lines of AdSalesDaily which was led by the group that originally were in ASD. There would have been classifieds and advertising design offered amongst other related items. However, it NEVER happened. So it started as an autosurf, nearly morphed into a general advertising site, and then nearly turned into an ecommerce surf site and in fact never became anything other than an autosurf site called ASD Cash Generator

    It appears that is was always an illegal business that paid old members with new members money and that it was never sustainable. The presence of a criminal element from the beginning (apart from Andy Bowdoin himself of course) is something that we will doubtless find out when the next stage of the legal proceedings take place.

    I would be very surprised now if we are told that it started off WITHOUT any criminality. Andy Bowdoin was ASD and the whole programme was set up around his personality and his false image of integrity and success. By whom? We dont yet know. But we are likely to find out soon

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  4. I am so sorry but you guys seemed to be screwed..
    I hope you at least get you initial money back

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  5. Actually Patrick the part in the Ad about the money being FDIC insured was almost correct since Andy did have the money in many Bank of America accounts in his name. As you and I well know everyone that puts money in a bank they are covered up to a certain amount and that amount is covered under the FDIC Policy.

    So, in away the AD was partially correct as I see it.

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  6. Despite all the schemes that A/Bowdoin and family has been involved in there are some people who continue to believe that poor ole Andy was a victim of circumstances. I got this e-mail this week:

    Hi Everyone-
    I have had a lengthy conversation with Andy and a few followup ones. He has given me permission to give you this update.
    The government is really playing hardball and the negotiations are very intense. As things stand now (subject to last minute changes) it will all be over September 14. When that occurs, Andy plans to have a conference call to talk to all of you. Hopefully your email address is the same as the one ASD has for you so you’ll receive that conference call alert in a timely manner. If not, let your team members know that you need to be alerted. The plan is to record the call so, if you miss it, there will be a followup message going out that will give you the procedure to get on that recorded call, so please don’t email me to ask me what happened on the call. Remember that technical difficulties always occur so it’s better to get onto the call live than count on getting it later in recorded fashion. Please keep an eye out on your emails as, when this occurs, it may happen very quickly– with not a lot of notice.
    A handful of people have sent messages that they don’t understand why Andy hasn’t communicated to everyone and, to them, that means Andy is a crook. Those people don’t realize that, when a person is involved in a legal issue, their attorneys counsel them not to discuss anything with anyone. Why? Because those who want to win the case against that person will look for anything the person says, take it out of context, and use it against the person. It’s very commonly done and done effectively. Many innocent people are in jail because of that very mistake. Andy couldn’t take the chance. Please know that this has been very hard on him, not being able to talk to you directly.

    It’s hard to believe that some people are so stup…. I mean naive! It just boggles my mind!!!

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  7. “Many innocent people are in jail because of that very mistake.”

    name one
    just one, please.

    I’m sorry, I thought the topic was a rhetorical question, I didn’t realize anyone with more sense than a pet rock thought ASD ever operated legally.

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