SENIOR FRAUD CAVALCADE CONTINUES: Maryland Man, 67, Pleads Guilty To Wire Fraud In Alleged $6.2 Million ‘Advertising’ Scheme Purportedly Involving ‘Narrow Cast’ TV Monitors; Scheme Payout Promises Were ‘Entirely Fraudulent,’ U.S. Attorney Says

EDITOR’S NOTE: Any number of ventures have tied themselves to claims of remarkable returns made possible by purchasing “advertising” products and services or agreeing to watch or receive “advertisements” in a closed environment. Longtime readers will recall that AdViewGlobal (AVG) came out of the gate in late 2008 and early 2009 by claiming what it did was the equivalent of what the NBC television network does. The claim was pure hogwash.

Here is a story about more pure hogwash involving a purported “advertising” opportunity . . .

An investment scheme involving claims about outsized returns from a purported “advertising” business gathered $6.2 million and has resulted in the guilty plea of its operator, federal prosecutors in Maryland said.

Edward J. Lawson, 67, of Silver Spring, Md., pleaded guilty last week to wire fraud after an investigation by the FBI and IRS uncovered evidence that Lawson was running a scam through companies known as Automated Revenue Creation LLC and Guaranteed Results Advertising LLC (GRA), prosecutors said.

Lawson and the firms purported to be in the business of beaming “Narrow Cast television commercials” to LCD television monitors at gas stations and convenience stores. The scheme operated at least between May 2006 and September 2008, prosecutors said.

“Edward J. Lawson’s promises of ‘automatic revenue’ and ‘guaranteed results’ were entirely fraudulent,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland.

“In financial fraud schemes the promoter eventually runs out of other people’s money and the scheme collapses like a house of cards,” added Jeannine Hammett, acting special agent in charge of the IRS Criminal Investigations Unit in Washington, D.C.

Lawson positioned himself as an entrepreneur with 30 years’ experience, encouraged GRA investors to roll over their purported earnings amid assertions the screens were generating “so much revenue” and explained checks had bounced “due to conditions beyond [his] control,” prosecutors said.

At least 60 investors plowed money into the scheme, initially lured by claims that a screen purchased for $15,800 would lead to “a monthly return over a 10 year period that began at $3,000 and escalated to approximately $30,000 after 15 months,” prosecutors said.

As the scheme advanced, the price of the screens kept going up and the purported returns they’d fetch kept changing, prosecutors said.

“Later in the scheme,” prosecutors said, “an investor who purchased a screen for $23,800 was guaranteed a monthly return of $3,000 and escalated to approximately $15,000 after 12 months. In GRA’s final phase, an investor who purchased a screen for $89,800 was guaranteed a monthly return of $13,950 over a five or 10 year period.”

Lawson pitched the scheme from metro Washington hotels and at GRA’s office in Rockville, Md., prosecutors said.

U.S. District Judge Roger W. Titus scheduled sentencing for April 6 , 2012.

Various investment schemes involving “advertising” have been on the radar screens of federal investigators.

Andy Bowdoin, 77, the president of Florida-based AdSurfDaily, was arrested by the U.S. Secret Service a year ago this month and is awaiting trial. Prosecutors said Bowdoin positioned himself as a successful entrepreneur and was at the helm of an “autosurf” advertising fraud that had gathered at least $110 million by operating as a Ponzi scheme and dangling suggestions of huge returns.

ASD and AVG had promoters and members in common, according to online promos. Among the bizarre claims associated with AVG was that members who advertised in AVG’s closed system with about 20,000 members would achieve a conversion rate of 37 percent of their sales copy didn’t “totally suck.”

Based on the claim, a member who advertised a doughnut for free and a doughnut priced at $10,000 each would achieve the same conversion rate of 37 percent, an utterly preposterous assertion.

The rate would be achieved within the same closed universe of prospects, according to the claim.

AVG collapsed in June 2009.