Rust Consulting, Claims Administrator In AdSurfDaily Ponzi Case, Says ASD Members Dwight Owen Schweitzer And Todd Disner Are ‘Impermissibly’ Seeking To Relitigate D.C. Forfeiture Case Before Florida Federal Judge

UPDATED 2:57 P.M. ET (U.S.A., MARCH 11)

Dwight Owen Schweitzer and Todd Disner — the two AdSurfDaily members from Miami who filed suit against the Justice Department and Rust Consulting Inc. in November 2011 — never filed remissions-claims forms, Rust said in a motion to dismiss the complaint.

And Schweitzer and Disner are “impermissibly” seeking to relitigate the forfeiture action against tens of millions of dollars in the personal bank accounts of ASD President Andy Bowdoin before a federal judge in Florida, Rust asserted.

The original civil case was brought by federal prosecutors in the District of Columbia and decided against Bowdoin/ASD by a federal judge in the District of Columbia.

But Disner and Schweitzer now are seeking a Florida venue to “avoid or evade the earlier judgment in the Seizure Action, or to deny its force or effect,” Rust argued in its dismissal motion.

The Florida court “lacks subject matter jurisdiction,” Rust argued. But even if the court concluded that it could preside over the the lawsuit, Schweitzer and Disner have not stated “a claim upon which relief can be granted against RUST, on the grounds that it constitutes an impermissible attack on the orders, rulings, and judgment rendered in the Seizure Action.”

“Plaintiffs are effectively seeking to re-litigate the Seizure Action in this case,” Rust argued. “Their material allegations and demands for relief center on their desire for this Court to determine whether the USA presented sufficient evidence in the Seizure Action to justify the seizure and confiscation of property held by ASD, including and in particular Plaintiff’s alleged property . . . In other words, in this action Plaintiffs seek to challenge the court’s decisions rendered in the Seizure Action. This is impermissible.”

Moreover, Rust argued, “it cannot be ignored that Plaintiffs admit they were afforded means in the Seizure Action to submit claims for their alleged property, but elected not to do so.”

In bringing their case in November, Schweitzer and Disner claimed an affidavit filed in the forfeiture case by the U.S. Secret Service in the District of Columbia was flawed and that the government hired Rust to implement a remissions program “designed to collect evidence and coerced admissions from the plaintiffs to be used by the government” at the criminal trial of ASD President Andy Bowdoin.

Disner and Schweitzer also took issue with government agents joining ASD prior to the August 2008 seizure and allegedly violating the ASD membership agreement, including an undercover agent who placed his undercover “MySpace” page in ASD’s advertising rotator. In 2008, the government alleged that “ASD did not require, or even verify that the agent “had any product or service to sell.”

Had the agents “lived up to the obligations they took on by becoming members of ASD they should have reported their own violations of the ASD terms of service with the result that the sites they foisted upon ASD would have been removed and the benefits to them as advertisers’ would be forfeited as the ASD rules mandated,” Disner and Schweitzer argued.

As of yesterday, the government had not responded to the lawsuit, which was brought by Schweitzer and Disner in the form of a complaint for declaratory relief that alleged Constitutional violations.

Whether Schweitzer and Disner properly served the government in the case is an issue.

U.S. District Judge Cecilia M. Altonaga has given them an extension of five days — from March 7 to March 12 — to demonstrate the government has been properly served.

If Schweitzer and Disner have properly served the government, it is possible that the Justice Department may move for dismissal on grounds similar to the grounds cited by Rust.

Not only were final orders of forfeiture entered by U.S. District Judge Rosemary Collyer in the District of Columbia, her orders were upheld by the U.S. Court of Appeals months before Schweitzer and Disner turned to the Florida federal court.

In September 2011 — weeks before Schweitzer and Disner brought their complaint — the government returned about $55 million to ASD members who demonstrated a loss through the remissions process administered by Rust.

When the government announced the return of the money, the U.S. Secret Service described ASD as a “criminal enterprise.”

In their complaint, however, Schweitzer and Disner argued that ASD was a profitable venture, in stark contrast to assertions by the government that ASD was insolvent because it created a liability of $1.25 for each dollar it took in through the sale of purported “advertising.”

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One Response to “Rust Consulting, Claims Administrator In AdSurfDaily Ponzi Case, Says ASD Members Dwight Owen Schweitzer And Todd Disner Are ‘Impermissibly’ Seeking To Relitigate D.C. Forfeiture Case Before Florida Federal Judge”

  1. I think I said as much before, but if not:

    You cannot sue The United States in a state court. It’s called Federalism. The only answer the Department of Justice is going to make in the case is a motion to remove the entire case to Federal Court, where it will be tossed out for failure to state a claim and/or Sovereign Immunity. (The government really is sovereign, don’t try this at home,or at Arbys!)