Government Scores Clean Sweep In ASD Forfeiture Litigation, But That May Not Be The Biggest News: Is A Separate Legal Drama Playing Out In Background?

Andy Bowdoin

UPDATED 11:57 A.M. EDT (U.S.A.) Federal prosecutors have won the second forfeiture case against assets tied to Florida-based AdSurfDaily, meaning the government now holds title to 100 percent of the money and assets seized in the autosurf Ponzi scheme, wire fraud and money-laundering investigation.

U.S. District Judge Rosemary Collyer issued a final order of forfeiture March 30 in a case brought in December 2008. On Jan. 4, Collyer issued a final order of forfeiture in a case brought in August 2008. The government now has control over more than $80 million seized in the cases, along with real estate, cars, marine equipment, computers and other property.

But that may not be the big news.

Grand Jury Probe

Indeed, the big news may be that a hidden legal drama is playing out behind the scenes. Appeal documents filed by attorneys for ASD President Andy Bowdoin in the August 2008 case reference two separate matters filed “under seal” and say that attorneys for unnamed “defendants” were called to testify before a grand jury.

The filings suggest — but do not state plainly — that prosecutors subpoenaed at least two attorneys involved in the defense of ASD-related property to testify and that a federal judge ordered the attorneys to comply.

Charles A. Murray, an attorney for ASD President Andy Bowdoin, referenced two sealed court cases when informing the appeals court about litigation “related” to ASD.

“Only one case related to this matter is currently pending before this Court, an interlocutory appeal alleging that the court below erred in ordering the defendant’s attorneys to testify before a grand jury,” Murray wrote.

Murray identified the case as “Grand Jury Subpoena, Case No. 09-3118 (Under Seal).”

“This related appeal arose from an ongoing grand jury investigation, In re: Possible Violations of Title 18, United States Code, Sections 1341, 1343, and 1349, Misc. No. 09-270 (Under Seal),” Murray wrote.

The sections of federal law cited in Murray’s appeal brief pertain to mail-fraud, wire-fraud and conspiracy statutes. The attorneys are not named, and the brief does not identify the targets of the grand-jury probe.

Details Unclear

Why the attorneys were called to testify is unclear. Also unclear are the identities of the attorneys’ clients, the nature of the information the government sought from the attorneys, whether the attorneys sought to invoke attorney-client privilege and whether they actually testified before the interlocutory appeal filed under seal was brought.

An interlocutory appeal is an appeal to a higher court of a ruling by a lower court that is made before the trial in the lower court has concluded.

Such appeals, which higher courts are reluctant to entertain, may be filed when a party believes a lower court’s ruling is severely prejudicial and turns to an appeals court to stop it in its tracks, instead of following the customary procedure of waiting for the case to conclude before filing an appeal.

Racketeering Case Cited

Murray also identified as a “related” matter a racketeering lawsuit filed against Bowdoin and ASD attorney Robert Garner by three ASD members in January 2009. The racketeering lawsuit, which alleges ASD was a criminal enterprise as defined under federal statutes, has been placed on hold until issues in the federal case are resolved.

In June 2009, attorneys for the parties suing Bowdoin and Garner referenced the AdViewGlobal (AVG) autosurf, an entity with close ties to ASD. In September 2009, federal prosecutors made a veiled reference to AVG in a filing that suggested that Bowdoin and family members initially planned to “move to another country and profit from a knock-off autosurf program that Bowdoin funded and helped to start.”

The assets seized in the December 2008 forfeiture case identified Bowdoin family members as beneficiaries of ASD’s illegal conduct. Members of AVG later identified George and Judy Harris as AVG’s owners, with Bowdoin as a silent partner.

George Harris is the son of Bowdoin’s wife, Edna Faye Bowdoin, who also was named in the December 2008 complaint as a beneficiary of ASD’s illegal conduct.

AVG crashed and burned in June 2009, taking an unknown sum of money paid by members with it by exercising its version of a “rebates aren’t guaranteed” clause. There were reports that $2.7 million was stolen from AVG, which purportedly operated from Uruguay.

Among AVG’s most noteworthy promoters were former ASD members, including some of the moderators of the now-defunct Pro-ASD Surf’s Up forum. Surf’s Up suddenly went missing in the earliest days of 2010.

Bowdoin, 75, has been portrayed by prosecutors as “delusional.” He pleaded guilty in Alabama during the 1990s to felony securities charges, according to court records. A decade later, he associated with Clarence Busby, the operator of Golden Panda Ad Builder, the so-called “Chinese” option for ASD members.

Bowdoin and Busby, according to court filings by Busby, talked about forming Golden Panda in April 2008 while on a “relaxing fishing trip” to a Georgia lake.

Busby, identified by the title “Rev.” at least 120 times in autosurf-related litigation, was implicated by the SEC in three prime-bank schemes in the 1990s, according to records. Golden Panda has ceded more than $14.6 million to the government in the ASD case, including $646,266.13 formally ordered forfeited by Collyer last week, and more than $14 million Collyer ordered forfeited in July 2009.

In his court filings, Busby said he didn’t know Bowdoin “had prior run ins with the law” and had been arrested in Alabama for defrauding investors.

Busby did not say if he told his fishing partner about his own run-ins with the law: The SEC said Busby defrauded investors in the 1990s “by offering and selling investment
contracts in connection with three different prime bank schemes.”

“Using misrepresentations and omissions in each of the three schemes, Busby raised money for purported programs in ‘prime bank’ notes by fraudulently representing to investors that the investments were risk-free and that the ventures would pay 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,” the SEC said.

Busby went on to operate an autosurf known as Biz Ad Splash, which also crashed and burned, reportedly taking members’ money with it. All of the notable autosurfs that dominated the stage in the aftermath of the ASD seizure — MegaLido, AdGateWorld, BAS, Ad-Ventures4U, Noobing and others — have now either died or are in a serious state of decay.

Last month, the U.S. Secret Service, which conducted the probes into ASD, Golden Panda and LaFuenteDinero, asserted that INetGlobal, a company operated by Steve Renner, was operating an autosurf Ponzi scheme and targeting Chinese participants.

The IRS is involved in both the ASD case and the INetGlobal case, according to court filings.

Steve Renner was convicted of income-tax evasion in December 2009. Federal prosecutors described the INetGlobal case last week as a “major fraud and money laundering investigation.”

Renner has denied the government’s allegations.

Bowdoin now says he is appealing the forfeiture order issued by Collyer last week in the December 2008 case. If Bowdoin does appeal the order, it will be his second appeal. He also is appealing the forfeiture order in the August 2008 case.

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8 Responses to “Government Scores Clean Sweep In ASD Forfeiture Litigation, But That May Not Be The Biggest News: Is A Separate Legal Drama Playing Out In Background?”

  1. I can think of at least three attorney’s who seem to have publicly interjected themselves into this case….and not as defense counsel for those named as defendants.

    This should get very interesting once the proceedings are made public.

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  2. Patrick, I sent you the docket for 09-3118, but it doesn’t say too much. Seems it’s an appeal for a decision already made in a criminal matter. Hopefully, things will be unsealed soon so we can all see justice prevail!

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  3. There was a Grand Jury impaneled back in September of 08, for which Ad Surf Daily, Inc. was required to provide documents; including docs on ASD Cash Generator, El Dinero, Andy Bowdoin, Clarence Busby, Golden Panda and employees. Those results were sealed. This indicates there was at least a second Grand Jury impaneled; possibly a third.

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  4. Could the attorneys be Garner and Gerald Nehra? If memory serves, Garner was an officer of ASD (according to Nevada records) not its legal counsel, and Nehra waived his privilege when he testified before the court, at the request of ASD, at the 2008 emergency hearing. In fact, the attorney from Andy’s first law firm — the firm in Miami — who testified about the proposed revised ASD operating plan before Judge Collyer at the emergency hearing also waived privilege. So that’s 3 attorney’s who could conceivably have been called to testify before the grand jury, two of whom could not both testify in open court AND claim attorney-client privilege.

    Murray is grasping at straws and/or Andy is still nuts and thinks he can make up his own laws. (Remember his claim that the seizure of funds was a “quasi-criminal” investigation? It didn’t bother him that there was no such category in law!)

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  5. Maybe Murray should forget all the wrangling and just go straight ahead and apply the McNaghten Rules:

    “at the time of the committing of the act, the party accused was labouring under such a defect of reason, from disease of the mind, as not to know the nature and quality of the act he was doing; or, if he did know it, that he did not know he was doing what was wrong.”

    The M’Naghten/McNaughten Rules

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  6. Quick note:

    New readers — and longtime readers seeking to reacquaint themselves with elements of the ASD/autosurf discussion — may find some value in this post:

    http://patrickpretty.com/2009/09/14/update-the-theory-of-steroidal-puppeteers/

    Patrick

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  7. Anyone knows what will happen with the investors money?
    is the goverment keeping our $$$

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  8. Howdy Iris,

    The government has made it clear all along that they intend to return the money to the victims of Ad surf Daily. There are a few practical issues however. For one thing they need to figure out how much is owed and to who and that is not as simple a process as it might sound at first.

    But the single largest cause for the delay in granting refunds is none other than Andy Bowdoin himself. He surrendered his claim on the seized funds well over a year ago and since that time he has been fighting to renew that claim. Please understand that he has no expectation of keeping that money, but the longer he can draw this process out the longer it will be before he faces the criminal trial which would end with him in prison. It doesn’t seem to matter to him that this also delays the refunds to his victims.

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