BREAKING NEWS: Judge Denies Bowdoin’s Bid To Reenter AdSurfDaily Case; Says ASD President’s Claims Lack Merit

UPDATED 5:18 P.M. ET (U.S.A.) A federal judge has denied the bid of AdSurfDaily President Andy Bowdoin to reverse his decision to forfeit tens of millions of dollars to the government in a case that features allegations of wire-fraud, money-laundering and operating a Ponzi scheme.

Andy Bowdoin ina video for 'Paperless Access.'

Andy Bowdoin in a video for 'Paperless Access.'

“As Mr. Bowdoin’s own descriptions of events fail to support these arguments, and there is no other reason to grant reconsideration . . . the Court will deny the motion,” said U.S. District Judge Rosemary Collyer.

Collyer also denied a motion by Bowdoin for a second evidentiary hearing, saying the matter was moot because she was not permitting him to reenter the forfeiture case after he previously submitted to the forfeiture. Collyer ruled after an evidentiary hearing last year that ASD had not demonstrated it was a lawful business and not a Ponzi scheme.

“[N]othing in Mr. Bowdoin’s own sworn statement justifies the conclusion that he was mistaken [in releasing the claims in January], that the Government engaged in any misrepresentation or misconduct, or that his attorney provided bad advice,” Collyer ruled. “He also fails to present any meritorious defense.”

The ruling was a crushing blow to Bowdoin, and Collyer minced no words, saying evidence in the forfeiture case against him “appears to be strong” and that Bowdoin “balked” after submitting to the forfeiture.

“The Government charges that Mr. Bowdoin operated a Ponzi scheme on the Internet,
whereby he, using ASD as a vehicle, bilked hundreds of people,” Collyer said. “Presented by affidavit and testimony outside the crucible of a criminal trial, its evidence appears to be strong. In the face of the civil in rem proceedings and the expected criminal prosecution, it is no surprise that his criminal lawyer would recommend a cooperation plea with demonstrated early acceptance of responsibility, i.e., withdrawal of claims to the seized assets, so that Mr. Bowdoin might earn a motion for a downward departure under Section 5K1.1 of the United States Sentencing Guidelines and/or 18  U.S.C. § 3553, both of which allow the Court to impose a sentence below the statutory minimum to reflect a defendant’s ‘substantial assistance’ to a Government investigation.”

Bowdoin’s former attorney, Stephen Dobson, whom Bowdoin’s current attorney Charles A. Murray claimed served Bowdoin poorly while Bowdoin was meeting with prosecutors last winter to settle the forfeiture case and discuss a potential criminal plea, behaved responsibly, Collyer said.

“Such an approach from counsel could be seen as the norm when the Government’s evidence is strong,” Collyer said. “What Mr. Bowdoin hoped to gain from his release of claims/early acceptance of responsibility and his debriefing with the Government was a promise of no jail time. When that was not forthcoming from the Assistant United States Attorney, Mr. Bowdoin balked and tried to back up, as if he had not already released his claims and talked to the Government.”

Collyer cited several claims from Bowdoin himself when issuing her ruling this afternoon, repeating Bowdoin’s own words back to him to demonstrate he had not been ill-served by Dobson or lied to by the government: (Emphasis added.)

  • Dobson represented to me that I could possibly avoid prison or get a reduced sentence if I agreed to disclose details concerning ASD and releasing the assets.
  • I also signed a document stating that I would release my claims in the abovecaptioned civil in rem forfeiture proceeding, again thinking that necessary for a possible avoidance of a prison term.
  • I did all of this on the understanding that by cooperating I could possibly avoid a prison sentence.
  • I agreed not to exercise my rights in the civil forfeiture proceeding, anticipating from representations made by Dobson that this could possibly keep me out of prison.
  • Dobson lead [sic] me to believe that if I cooperated there was a possibility that I would not be incarcerated or imprisoned.
  • I believed that my cooperation would still result in a criminal sentence that could possibly not include imprisonment or incarceration.
  • [Prosecutor William] Cowden explained that I would be subject to the maximum penalty under the statute, but that he would inform the judge that I cooperated.
  • I slowly came to understand what I understood from Dobson not to be the case: that my agreement to cooperate provided me no benefit in the criminal matter except the possibility of a reduced sentence if the judge desired which would still be a life sentence.

“Each of these statements indicates that Mr. Bowdoin completely understood what he
was doing: releasing his claims and cooperating to ‘possibly avoid a prison sentence,'” Collyer said.

In September, prosecutors argued that any thought by Bowdoin that a $100 million, wire-fraud and Ponzi scheme crime would not result in imprisonment upon conviction was ludicrous.

Collyer said the allegations were serious and easily could result in prison time.

“If he proceeds to trial and the evidence persuades a unanimous jury beyond a reasonable doubt that Mr. Bowdoin is guilty as charged, he will face a term of incarceration for sure,” Collyer said. “Mr. Dobson’s hope was to avoid such a result by avoiding a trial and persuading the Government to file motions with the Court that could be used to argue for a sentence that did not include jail time.”

Collyer said Bowdoin’s behavior has been puzzling.

“It is very strange that Mr. Bowdoin passed that opportunity by, despite clear knowledge that it ‘could possibly keep me out of prison,'” she said. “Perhaps the delay in obtaining an indictment has led Mr. Bowdoin to believe that he will not be indicted after all.”

Collyer also pointed to a stated belief by Bowdoin that a grand-jury indictment had been returned, saying she hasn’t see one.

“Mr. Bowdoin believes the Government ‘submitted charges before a grand jury on or about May 2009,’” Collyer said, using Bowdoin’s affidavit as her resource. “[B]ut as of this date no indictment has been returned against him in a federal court.”

Read Collyer’s ruling.

Read Collyer’s order denying Bowdoin’s motions.

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23 Responses to “BREAKING NEWS: Judge Denies Bowdoin’s Bid To Reenter AdSurfDaily Case; Says ASD President’s Claims Lack Merit”

  1. bilked hundreds of people

    I thought it was supposed to be thousands of members not “hundreds”? Or maybe it was just “hundreds” that were conned – the rest knew that it was an illegal ponzi scheme, and knew exactly what they were getting into.

    I wonder if there will be a “virtual party” on the Surfs Up forum like after the evidentiary hearing?

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  2. Hi Tony,

    Tony H: I thought it was supposed to be thousands of members not “hundreds”?

    I noticed the judge’s wording in that passage. With all the judge’s denials of pro se filings from people who license themselves to claim the government has no “evidence” and is evil for stopping a Ponzi scheme before it could mushroom, perhaps the judge is wondering out loud about the true depths of the scheme.

    She could have meant “thousands,” though. In any event, the pro se filers are approaching 100 in number now. That could be on her mind.

    She also opined in her ruling today that the government appeared to have “strong” evidence. So much for the pro se claim there is “NO” evidence.

    Heck, there were six exhibits included in the August 2008 complaint, which has been in the public record for 15 months — and still the pro se filers are claiming there is no evidence.

    I think the judge took care of that notion today.

    Regards,

    Patrick

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  3. Glad to see Judge Collyer finally issued her ruling in the last motions filed by Andy and his lawyer. Now the question is when will the criminal indictments be released and we find out who all the people are who will be indicted in ASD? One can only hope it will be soon. It promises to be an ineteresting read when it does happen. Have to wonder if they will do it on a Friday? Maybe a little weekend jail time will help convince those involved it is serious and not just a game. Now the real fun begins.

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  4. I am glad the ruling has finally been issued.

    The ruling is almost verbatim what the anti-ASD posters here have been saying would happen. Judge Collyer read Bowdoin’s words back to him justifying here decision. As has been stated, the Surf’s Up crowd will likely throw another “victory party”.

    I hope the arrests and criminal charges follow shortly.

    BTW, Watt, Courtney and the usual crowd have been awfully quiet as of late. Nothing seems to be mushrooming at this point. Tazoodle doesn’t seem to be making noise. Nor does anything else from the usual crowd. Yes, I know Watt “announced his retirement” but I am taking it with a grain of salt until proven otherwise.

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  5. …..for the few remaining ASD/Bowdoin supporters out there, this ruling should be crystal clear. Andy Bowdoin has taken the money he stole from the victims, stashed a bunch of it away (not the seized assets of course), and then has used that hidden money to pay his new lawyers to file pleadings that have been throughly routed by the Government case. Nice use of the stolen funds…..tick tock, tick tock, tick tock — the ASD promoters should be getting nervous about their own criminal liability about now…..

    btw, probably Bowdoin only personally defrauded hundreds. It was his minions, accolytes, and Ponzi p**ps and w**r*s who brought the number up into the thousands……

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  6. This is about to get really good! :-)

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  7. A friend that lives in Quincy told me today that he heard Andy Bowdoin was offering $250,000.00 to anyone that could get him out of the country.

    Any takers?

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  8. A quick remark regarding the reference to the hundreds vs the thousands…

    You hear many different numbers quoted as the membership, mostly 100,000 or a little more. Fact is, many of the 100,000 or so membership were free members and as such are not financial victims of this scam.

    I don’t know the exact number of financially affected victims but from what I personally know, I would expect that you could easily divide by 10 and come a lot closer to the real number.

    Then the membership that put in very small amounts, like less than $100 may be scratched from the victim list, which is typically what the Government does in cases such as this. There were a quite a large number of folks who put in very small amounts. All this is not to say that some members were hurt even by small amounts.

    So the judge maybe looking at the victim list of those who lost larger amounts. Maybe from those who filed the DOJ victim form? This might possibly be in the hundreds rather than the thousands.
    But then again, I doubt the the judge is going to spend her time counting the number of victims but rather leave that to the DOJ.

    Just my thought for the day.

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  9. Finally, we get an answer from the judge. We should all be very delighted with her ruling….

    Andy…you are about to be judged for your actions by the judge who has you all figured out!

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  10. Patrick: With regard to Judge Collyer’s statement:

    “Mr. Dobson’s hope was to avoid such a result by avoiding a trial and persuading the Government to file motions with the Court that could be used to argue for a sentence that did not include jail time.”

    One wonders if, by the same token, Andy’s machinations over the past few months can be used by the AUSA who eventually prosecutes him to argue for a LONGER prison term. It sounds reasonable to me. If taking responsibility for his crimes and forfeiting the funds had the potential to mitigate his prison term, then portraying himself as a victim, making false accusations against his attorney, saying that he is going to insist on a jury trial and upon acquittal reopen ASD should be admissible as aggravating circumstances.
    I’m not up on Federal sentencing rules, but state courts typically consider both mitigating and aggravating circumstances prior to sentencing, even in venues where sentencing guidelines trump judicial discretion, to a large extent. We can always hope.

    P.S. I think Judge Collyer reads your columns!

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  11. Good points Richard!

    I wonder what the mean (or perhaps more relevant, median) “investment” was? If it was ~$10K, that would point to ~10,000 members or so, figuring ~$100MM in ASD “cash flow”……

    Richard Burson: A quick remark regarding the reference to the hundreds vs the thousands…You hear many different numbers quoted as the membership, mostly 100,000 or a little more. Fact is, many of the 100,000 or so membership were free members and as such are not financial victims of this scam.I don’t know the exact number of financially affected victims but from what I personally know, I would expect that you could easily divide by 10 and come a lot closer to the real number. Then the membership that put in very small amounts, like less than $100 may be scratched from the victim list, which is typically what the Government does in cases such as this. There were a quite a large number of folks who put in very small amounts. All this is not to say that some members were hurt even by small amounts. So the judge maybe looking at the victim list of those who lost larger amounts. Maybe from those who filed the DOJ victim form? This might possibly be in the hundreds rather than the thousands.But then again, I doubt the the judge is going to spend her time counting the number of victims but rather leave that to the DOJ.Just my thought for the day.

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  12. Hi dirty_bird,

    dirty_bird: As has been stated, the Surf’s Up crowd will likely throw another “victory party”.

    Not a murmur so far from the traditional cheerleaders. I think the filing Sept. 28 by the Secret Service of the conference-call transcript was an important development.

    Beyond that, various bids to discourage members from filling out the government form appear to have backfired. It was hard not to view such efforts as an attempt to obstruct justice — and a transparent one at that.

    Along those lines, some of the tortured constructions seemed finally to have scared people who previously provided kneejerk support back to sobriety. I mean, what was their choice? Bowdoin himself was talking about a possible sealed indictment.

    The whole thing was just plain odd, and some of the folks seem to have had great difficulty reconciling Bowdoin’s recent filings, which plainly were at odds with themselves.

    He told the judge the money was his, but he told the members the money was theirs. With the Miss America reference, the claims were even odder.

    Regards,

    Patrick

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  13. Hi Entertained,

    Entertained: …..for the few remaining ASD/Bowdoin supporters out there, this ruling should be crystal clear. Andy Bowdoin has taken the money he stole from the victims, stashed a bunch of it away (not the seized assets of course), and then has used that hidden money to pay his new lawyers to file pleadings that have been throughly routed by the Government case. Nice use of the stolen funds…..tick tock, tick tock, tick tock — the ASD promoters should be getting nervous about their own criminal liability about now…..

    btw, probably Bowdoin only personally defrauded hundreds. It was his minions, accolytes, and Ponzi p**ps and w**r*s who brought the number up into the thousands……

    Yes. Agreed. The ruling was crystal clear and, as you pointed out months ago, the judge signaled that a simple declaration by Bowdoin that he’d changed his mind does not mean that the world moves to accommodate him.

    It might have served some PR purpose for him to let members believe that reversing a court order he requested was as simple as putting a filing in the mail. The judge told him during the summer it was not.

    Regards.

    Patrick

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  14. Hi Richard,

    Richard Burson: A quick remark regarding the reference to the hundreds vs the thousands…

    You hear many different numbers quoted as the membership, mostly 100,000 or a little more. Fact is, many of the 100,000 or so membership were free members and as such are not financial victims of this scam.

    I don’t know the exact number of financially affected victims but from what I personally know, I would expect that you could easily divide by 10 and come a lot closer to the real number.

    Then the membership that put in very small amounts, like less than $100 may be scratched from the victim list, which is typically what the Government does in cases such as this. There were a quite a large number of folks who put in very small amounts. All this is not to say that some members were hurt even by small amounts.

    So the judge maybe looking at the victim list of those who lost larger amounts. Maybe from those who filed the DOJ victim form? This might possibly be in the hundreds rather than the thousands.
    But then again, I doubt the the judge is going to spend her time counting the number of victims but rather leave that to the DOJ.

    Just my thought for the day.

    Thanks for sharing your thoughts, Richard. Like you, I’ve wondered just how many “free” and “paying” members ASD had.

    It the case of AdViewGlobal, it looks as though a relatively small percentage of paying members were being relied upon to sustain the Ponzi, which collapsed quickly.

    AVG blamed it on theft — but theft can be defined in more than one way. There is the purported theft of $2.7 million, of course.

    But there also is the issue about whether ad-packs (page impressions) were ported over from ASD to AVG, and whether a new crop of suckers was being recruited to subsidize ASD losses. That, too, could be considered theft.

    The December forfeiture complaint reads like a prequel to what happened later at AVG. One of the specific allegations against Bowdoin is that ASD failed in at least one prior iteration, and he arranged to port over ad-packs and their “earnings” potential from the failed site to ASD Cash Generator and funded them on the backs of new members.

    It’s possible the same thing happened at AVG: Same playbook, different day.

    Regards,

    Patrick

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  15. admin: He told the judge the money was his, but he told the members the money was theirs. With the Miss America reference, the claims were even odder.

    I just have to wonder about the “light bulb” moment when he knew ASD was going to take off and become really big. If he had any brains, he would have pocketed the first few million and run it through a ton of jurisdictions to make it difficult on the authorities and retired somewhere. I guess greed got the better of him.

    It’s one thing to go from small time scam to small time scam. A few convictions are part of the game. Running a big scam is a career booster for the cop that takes you off the street.

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  16. Hi Marci,

    Marci: “Mr. Dobson’s hope was to avoid such a result by avoiding a trial and persuading the Government to file motions with the Court that could be used to argue for a sentence that did not include jail time.”

    One wonders if, by the same token, Andy’s machinations over the past few months can be used by the AUSA who eventually prosecutes him to argue for a LONGER prison term. It sounds reasonable to me. If taking responsibility for his crimes and forfeiting the funds had the potential to mitigate his prison term, then portraying himself as a victim, making false accusations against his attorney, saying that he is going to insist on a jury trial and upon acquittal reopen ASD should be admissible as aggravating circumstances.
    I’m not up on Federal sentencing rules, but state courts typically consider both mitigating and aggravating circumstances prior to sentencing, even in venues where sentencing guidelines trump judicial discretion, to a large extent. We can always hope.

    I do think that this was a risky approach for Andy. Several weeks ago I wrote a column about imagining Andy inside a box with glass walls.

    The prosecution was in the ceiling; the RICO attorneys in the basement. Garden-variety ASD members who just wanted their money back were pressuring one of the side walls, and potential co-defendants were pressuring the other.

    There was trouble for Bowdoin no matter where he looked outside the box.

    The government filings suggest the prosecution was as friendly as it ever intended to be in January. Andy signed off and gave up the money.

    But then the pro se drivel began, and Bowdoin even chided the prosecution in that letter published on Surf’s Up, reportedly after he had met with a “group” of members. AVG’s switch to an “association” structure coincided with all of that, as did the call by a Surf’s Up member to start closing down bank accounts so the Secret Service couldn’t get them.

    Andy said he was a Dale Carnegie man, but that was hardly a way to win friends and influence people who could put in a good word with a judge. Of course, Bowdoin also was granted several filing extensions after announcing he again was negotiating with prosecutors, only to later recommit to his apparent theory that all the lawyers were plotting against him in one way or another.

    The judge clearly didn’t buy it.

    I don’t know what would be acceptable to the prosecution. But Richard Piccoli, 83, was sentenced to 20 years AFTER cooperating in a scheme that was far less sophisticated than ASD and involved $70 million less.

    Regards,

    Patrick

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  17. Hey Patrick,

    Neither did any of the ASD critics. We have been spot on since the government moved. We could have written that opinion, at least the parts you quoted.

    admin: The judge clearly didn’t buy it.

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  18. Richard Burson: I don’t know the exact number of financially affected victims but from what I personally know, I would expect that you could easily divide by 10 and come a lot closer to the real number.

    One of the reasons AdSurf Daily was able to survive for the time it did, was the fact it was able to attract a relatively high number of large “investors” early in its’ existence.

    For example, I have seen claims of a number members paying in sums of +$10,000 and a few more losing $50,000+

    It’s the nature of a ponzi such as this that a single large deposit allows a far larger amount of small depositors to appear to be paid “interest” allowing the fraud to continue for a far greater length of time than if all deposits were of similar amount.

    The fact that Bowdoin and Co seemed to have been able to attract a high number of large amounts in the early days of AdSurf Daily appears to have had the dual effects of allowing a far greater number of smaller accounts to be “paid” while giving the appearance of legitimacy by virtue of the large returns being reported at the time.

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  19. Wonderful news. We should now see the granting of the forfeiture claims by the government and the forensic accounting to unravel the accounting mess ASD left behind can begin. Equally, we can now look forward to the criminal cases of those who are behind this fraud.

    This phrase from Lynddel on this same topic is the one that stood out in my mind when reading his reply

    Maybe a little weekend jail time will help convince those involved it is serious and not just a game.

    It is time that the serial promoters’ advice changes from “only invest what you can afford to lose” to silence and the argument that “we are all adults and are free to spend our money where we wish” stops. Judge Collyer has now set a nice legal precedent, as far as autosurfs are concerned (or will have, once she signs off the ASD case).

    She has also left the gory bits – with all the recriminations and cross accusations between the future defendants to the criminal courts.

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  20. DB,

    We’d have gotten the gist of the ruling right, but I know I wouldn’t have gotten the clarity, veiled sarcasm, or incisiveness down nearly as well as the judge. In addition to clearly being a strong jurist, she writes opinions and rulings very well…..

    dirty_bird: Hey Patrick,Neither did any of the ASD critics. We have been spot on since the government moved. We could have written that opinion, at least the parts you quoted.

    admin: The judge clearly didn’t buy it.

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  21. I wonder how long before the noted investigative reporter Mike Mason updates his ASD blog. I’m eager to hear how Andy and his lawyers, seeing that the terminal delays in the civil potion of the case were not in the best interests of ASD members, made THEM decide to move on to the criminal trial.

    Mr. Mason, I hope the Florida real estate market turns around for you. You may have once been a proficient and trustworthy investigator but your blog on ASD is clear proof that you are no longer at least one of those things.

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  22. Hi dirty_bird,

    dirty_bird: I just have to wonder about the “light bulb” moment when he knew ASD was going to take off and become really big. If he had any brains, he would have pocketed the first few million and run it through a ton of jurisdictions to make it difficult on the authorities and retired somewhere. I guess greed got the better of him.

    It’s one thing to go from small time scam to small time scam. A few convictions are part of the game. Running a big scam is a career booster for the cop that takes you off the street.

    His “light bulb” moment occurred, I believe, when he hatched the “Legality Statement” and the video — and saw that it was working. All of a sudden ASD was a cash cow. People stood in line by the hundreds to throw money at it. Some of them mortgage their homes and plowed college savings into ASD to quality for matching bonuses. People such a Fava taught them how to compound. He said he was making $1,000 a day in ASD.

    Basically, people were led to believe that a $50,000 investment — coupled with matching bonuses — could lead to a $365,000-a-year-job working for six minutes a day.

    One remaining question I have is how tens of millions of dollars flowed into ASD practically overnight. The company had failed at least once, and Bowdoin told the troops the failure was caused in part by a malfunctioning script that overpaid members and in part by “Russians” hackers who stole $1 million.

    No police reports on that, of course. And I haven’t seen any evidence that suggests members who purportedly were overpaid were asked to give the money back.

    I have seen evidence that Bowdoin attempted to prop up the company by selling stock at $10,000 a share. BAS seems to be doing something similar, although BAS is not calling it stock.

    But the ASD’s Legality Statement clearly started to work. It might have worked so well that professional money-launderers began to use ASD. After all, the Legality Statement provided some cover for both noncriminal Mom and Pop hobbyists with an interest in making money online and professional criminals alike. A lawyer with purported knowledge of the SEC and securities laws allegedly told the troops that ASD was perfectly legal.

    Regardless, I find it hard to believe that tens of millions of dollars came from the standard surf crowd alone — perhaps particularly because the money came so quickly and because of reports from members that money was being transported to rallies in suitcases.

    Maybe the Pros whose business interests fell outside of the surf world dumped a lot of money into the enterprise. In any event, no ASD member who stood in a crowd at any rally could vouch for the innocent intent of all others standing in line waiting for their exciting chance to purchase “advertising.”

    Some of them had no innocent intent at all. They could have used ASD for all sorts of nefarious reasons, which is why the government needs to reduce the surf “industry” landscape to rubble and call the TV networks and newspapers to record the event for posterity.

    Regards,

    Patrick

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  23. admin: A lawyer with purported knowledge of the SEC and securities laws allegedly told the troops that ASD was perfectly legal.

    Once Bowdoin enlisted some seasoned “Internet marketers”, I would have to agree that the shiny object (the alleged medal from on high) and Garner’s “legality statement” propelled ASD onward and upward and gave Bowdoin enough “credibility” for people to overcome any misgivings they may have had.

    The herd mentality kicked in quite effectively. It’s quite interesting to me that people will follow blindly and back up the vocal few without getting outside opinions. Or block out opinions contrary to their hoped for conclusion. Live and learn. Or not as the case may be.

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