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.

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

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.

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.

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.

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.

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.

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

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.

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