Monty Ervin, the self-styled “sovereign citizen” who declared himself “governor” of Alabama in its “original jurisdiction” and a “Most Christian Prince,” has been sentenced to 10 years in federal prison for his role in scheme that masked the ownership of real estate by placing it in the names of bogus trusts and relied on structured transactions to evade currency-reporting requirements.
Meanwhile, Ervin’s wife — Patricia Ervin — has been placed on probation for five years and ordered to spend “40 consecutive weekends” in jail for her role in the bizarre scheme.
Things could have gone worse for Patricia Ervin, who’d been convicted of conspiracy, tax evasion and structuring. But a judge found that “Monty Ervin was the leader and organizer of the conspiracy and exercised control” over his wife.
Patricia Ervin, according to court filings, once declared herself a “Most Christian Princess” who’d been “certified” by Prince George, whom she described as the “Arch Treasurer” for “The United States of America” in the “Treaty of Paris of 1783.”
Both Patricia Ervin and her husband “proclaimed that they were not United States citizens, and as ‘sovereigns,’ did not consider themselves subject to federal or state law,” federal prosecutors said.
After his February 2011 indictment in Alabama, Monty Ervin went on the lam to Florida’s West Coast. The U.S. Marshals Service captured him in the area of Naples.
Ervin was found with “a notebook containing the latitudinal and longitudinal coordinates of an island off the coast of Honduras,” prosecutors said.
So-called “sovereign citizens” have an irrational belief that laws do not apply to them. “Sovereigns” have been known to draft both knowing and unknowing others into their schemes, thus potentially placing individuals within their sphere of influence at risk of becoming victims or even defendants with both civil and criminal exposure.
This is always the hardest post of the month — the one in which I ask for your continued help to get through the upcoming month.
The need right now is on the order of $300. That sum would take the instant crisis out of play. It has not been easy keeping the Blog going during these lean times, and I am very grateful for the support I’ve received. Every story you’ve read this month, for example, was made possible by readers who contributed last month.
There are some important stories in the offing, stories that may help open eyes, shape thoughts and keep both longtime and new readers out of harm’s way. The fraud sphere constantly evolves, the language changes, the wordplay and disguises get more sinister. This Blog exists to help readers understand the various means by which fraudsters and their collective of online shills separate people by the thousands from their money.
On Memorial Day, U.S.-based Zeek Rewards announced it was closing its "old" bank accounts in the United States and opening a new account at a bank it did not name.
UPDATED 8:18 A.M. EDT (MAY 29, U.S.A.) In a curious Memorial Day announcement placed below a representation of the American flag, the Zeek Rewards MLM “program” told affiliates they must cash commission checks “immediately” because Zeek is switching banks.
“Zeek is currently in the process of moving to a bank that can handle our growing needs and while in transition will be closing our old accounts with both New Bridge Bank and BB & T,” Zeek said on its news Blog. “Please be sure to deposit or cash any commission checks immediately so they clear before June 1st, 2012 or they will be returned to you with ‘account closed’ and will need to be reissued.”
Zeek did not identify its new bank. Nor did the purported “opportunity” say why its old banks could not handle its needs and whether its new bank operated on U.S. soil.
Both New Bridge and BB&T are FDIC-member banks operating in North Carolina. Zeek is a purported arm of Rex Venture Group LLC, which conducts business in North Carolina.
Zeek says it conducts business with offshore payment processors such as AlertPay (now Payza) and SolidTrustPay. Both AlertPay and SolidTrustPay have been criticized for being friendly to dubious businesses if not outright scams such as investment programs operating in disguise, HYIPs, autosurfs and cycler matrices.
Zeek affiliates, meanwhile, have a presence on well-known Ponzi-scheme forums such as TalkGold and MoneyMakerGroup, which has led to questions about whether proceeds from any number of fraud schemes could be passing through Zeek. Today alone Italian authorities announced advertising bans against at least three “programs” that either have or had a presence on the Ponzi boards. The “programs” included JSS Tripler, which purports to pay a daily return of 2 percent; Ricochet Riches, which advertised a daily return of at least 2 percent; and Macro Trade, which advertised a daily payout rate of between 1.2 percent and 2.2 percent. A entity known as “System Explosion” also was referenced today in an investor warning by CONSOB, the Italian securities regulator.
Although Zeek insists it is not an investment program, its reported daily payout rate of between 1 percent and 2 percent is consistent with the returns advertised by numerous online scams.
Two days ago, British journalist Tony Hetherington of the Daily Mail wrote about a purported program known as Royalty 7 that was advertising a daily return of 7 percent. Royalty 7 also has a presence on the Ponzi boards, and a PP Blog reader — “Tony” — reported today that the U.K. Financial Services Authority warned on May 22 that Royalty 7 was an unauthorized firm.
“Finance Your Dream Ltd trading as Royalty7.com is not authorised under the Financial Services and Markets Act 2000 (FSMA) to carry on a regulated activity in the UK,” FSA warned. “Regulated activities include, among other things, accepting deposits by way of business.”
Royalty7 — like Zeek, JSS Tripler and scores of other programs that either plant the seed that outsize returns are possible or outright advertise returns that correspond to annualized returns in the hundreds of percent — advertises that it uses AlertPay and SolidTrustPay as payment processors.
The Zeek Rewards MLM program is married to a penny-auction site known as Zeekler.
“Win Cash!” Zeekler roars to bidders. “Funds will be sent to the winner by SolidTrust Pay or AlertPay.”
Zeek’s apparent reliance on processors that are the darlings of global fraudsters has resulted in a bizarre condition under which Zeekler effectively is using U.S. currency as an auction “product” no different than a TV set while advertising that successful bidders for sums of cash can receive their winnings through offshore processors linked to fraud scheme after fraud scheme.
Successful Zeekler bidders are told to “please send a note to [Zeekler] customer support requesting SolidTrust Pay or AlertPay” to receive their cash winnings.
Despite Zeek’s claim it is not an investment program, it has been presented as such online by its own affiliates. Affiliates claim they’ve earned gains that correspond to an annualized return of more than 500 percent and that Zeek has a feature that makes “compounding” possible.
“Geringer painted the picture of a successful fund weathering America’s financial crisis through a diversified, conservative investment strategy. The reality, however, was the complete opposite. Geringer lost millions of dollars in the market, tied up remaining investor funds in a pair of illiquid private companies, and lied about it in phony account statements.” — Marc Fagel, director of the SEC’s San Francisco Regional Office, May 24, 2012
A California investment adviser presiding for years over a $60 million fraud duped investors by making Ponzi payments and used the names of the Securities and Exchange Commission and the National Association of Securities Dealers to sanitize his scheme, the SEC charged.
Named defendants in a fraud case filed in the Northern District of California were John A. Geringer, 47, of Scotts Valley, and his Scotts Valley-based companies: GLR Capital Management LLC; GLR Advisors LLC; and Geringer, Luck & Rode LLC. GLR Growth Fund L.P. of Scotts Valley was named a relief defendant amid allegations it received ill-gotten gains.
The SEC said Geringer touted imaginary annual trading profits of between 17 and 25 percent to lure investors into his scam, describing the investigation as one that exposed internal inconsistencies. Fraud schemes are known for such inconsistencies.
“Although the fund was started in 2003, marketing materials claimed 25 percent returns in 2001 and 2002 — before the fund even existed,” the SEC charged. “The marketing materials also falsely indicated a nearly 24 percent return in 2008 from investing mainly in publicly-traded securities, options, and commodities, while the S&P 500 Index lost 38.5 percent.”
And Geringer “further lied” to investors when the claimed his venture was “MEMBER NASD SEC APPROVED,” the agency said.
“The SEC does not ‘approve’ funds or investments in funds, nor was the fund (or any related entity) a member of the NASD (now called the Financial Industry Regulatory Authority — FINRA),” the SEC said.
Geringer raised more than $60 million since 2005, mostly from investors in the Santa Cruz area, the SEC said.
“To mask his fraud, Geringer paid millions of dollars in ‘returns’ to investors largely by using money received from newer investors,” the SEC said. “He also sent investors periodic account statements showing fictitious growth in their investments.”
(UPDATED 10:56 A.M. EDT (U.S.A.) Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, acknowledged in a conference call last night that the program that advertises a return of 60 percent a month is not registered with regulators. The acknowledgement, which potentially puts promoters worldwide at risk of being drawn into both civil and criminal prosecutions for selling unregistered securities and participating in a global financial conspiracy, occurred near the tail end of a call that lasted nearly an hour and a half.
JSS/JBP may have ties to the “sovereign citizen” movement, a loosely knit confederation of individuals who have an irrational belief that laws do not apply to them. The enterprise does not say where it is operating from and is using a number of payment processors that are “offshore” from a U.S. perspective.
A caller who identified himself as “Brian” from California asked Mann straight out if JSS/JBP was “legally registered.”
“You may have it backward,” Mann replied. “If you are legally registered, then you’ve signed up to be a slave, part of the slave system, and then they have jurisdiction over you and can shut you down.”
Earlier in the call — in response to a question from “Ricky” about why the JSS/JBP member agreement makes enlistees affirm they are not employees or officials of the “government” — Mann said this:
“In general, government people are not welcome in JBP.”
And then Mann explained why.
“Well, they’re part of a criminal gang of robbers, thieves, murderers, liars, imposters.”
Mann also said this: “These people are much worse than the Mafia.”
He conceded that some government employees might be good people. Mann also implied that, if a government employee signed up for JSS/JBP and later became a witness against the company, JSS/JBP would be able to challenge the credibility of the witness because of the firm’s member agreement.
In February, Gregory McKnight, the operator of the $72 million Legisi HYIP Ponzi scheme, pleaded guilty to wire fraud. Legisi had member terms similar to JSS/JBP. The terms neither insulated Legisi nor McKnight from prosecution.
After Mann compared the government to the Mafia, a caller who identified himself as “Richard” from “Phoenix” described Mann as a “savior for the world.”
JSS/JBP purports to provide a preposterous daily return of 2 percent — twice that of AdSurfDaily, a $110 million Ponzi scheme that came under investigation by the U.S. Department of Justice and the U.S. Secret Service in 2008. ASD President Andy Bowdoin pleaded guilty last week to wire fraud.
Mann, identified in 2008 promos as an ASD pitchman, said last night that ASD “basically operated as a sitting duck.”
Asked by a caller if JSS/JBP had lawyers to protect itself, Mann said this:
“Typically, lawyers are part of the slave system.”
And Mann speculated that the government could fire “cruise missiles” to take out a building in the Netherlands “where our servers are.”
Mann implied during the call that JSS/JBP had studied the ASD Ponzi case and had taken measures not to get swept into a Ponzi probe.
ASD was a “very badly managed business,” Mann said, adding that JSS/JBP had “much better security than the typical registered company.”
They’ll tell you that 2 percent a day (730 percent a year) is not too good to be true and that experts had performed “due diligence.” They’ll say their “program” is different from other schemes that either collapsed under their own weight or were brought down by the government. They’ll position themselves as free-market entrepreneurs, perhaps even the guardians and gatekeepers of freedom itself.
They’ll draft grandparents into their cross-border HYIP fraud schemes, tell them to set up accounts for their grandchildren and then proceed to defraud entire families — oldest to youngest.
Grandma might not even know that the payment-processing account her unlicensed, unregistered sponsor helped her set up for 15 percent of her personal and family outlay is based offshore.
By design.
It makes the money harder to trace. It creates jurisdictional hurdles for law enforcement. It gives the collective of international criminals more time to pick more pockets — and pick them they will. It’s what they do. Often repeatedly in scam after scam. Sometimes for years.
If you’re an American interested in politics — perhaps especially if you have Republican, conservative, rightist or libertarian leanings and hold the principled view that less government is best — they’ll shape a message just for you. Because the sales pitch is designed to confirm your biases while at once loosening your purse strings, you’ll be less apt to be discerning. They might tell you what you should be angry about — the economy, the Fed, Wall Street, the banks, the bailout, the regulators, the politicians who start wars.
This does not mean, however, that they won’t be glad to separate you from your money if you’re a centrist of any political persuasion or a Democrat, liberal or leftist in your leanings. They’ll tell you anything to get access to your money.
The schemes work best during lean times. If no bogeyman exists in your life, they’ll create one for you to loathe: an individual, an authority figure, an agency, a bureaucracy, a member of the media. Their frauds are designed to separate you from your rational self; that’s how they suck you in.
There may be a public face of the enterprise, perhaps a man who projects impeccable manners. He’ll be described as a genius, perhaps by a conference-call or webinar host who has a soothing voice made for radio. If you haven’t been able to access your account for weeks and aren’t really sure where your money is, someone will suggest it is your fault. Stepfordian shills will reinforce that notion. They’ll try to make you believe that questioning the enterprise is a sign of weakness, a sign that — unlike the rest — you lack faith.
True believers will emerge. So will enforcers who will “defend” the enterprise at any cost. There may be no ceiling to their wretched excess, their intellectual dishonesty, their disconnect from the world of rational thought. Some of them even will send notes to reporters that read like the one the PP Blog received yesterday at 3:41 p.m. EDT.
The would-be poster tried to put this in the thread below my tribute post to Maddy, my beloved terrier who died last week.
Here is is:
Congratulations! At last a real report based on credible sources and on a fact- not on fabricated false statements or regurgitated information from somewhere else.
A dog’s life is worthless if his owner is engaged in spreading lies and speculation to harm others.
It’s a sign of GOD telling you to stop publishing fear and meaningless accusations once and for all. If you don’t believe in him (GOD) but Karma, then this is it coming at ya.
The next time it will be someone who you love not an animal.
You’ve been warned by the universe.
[Name Deleted By PP Blog]
We’d like to say that the suggestion that God favored HYIP Ponzi schemes and caused Maddy’s death because of what the PP Blog has written represents a new low.
But it doesn’t.
In 2008 — on the seventh anniversary of the 9/11 terrorist attacks — an apologist for the AdSurfDaily Ponzi scheme that had sucked in at least $110 million by promising to provide a daily return of 1 percent released a “prayer” that asked God to cause U.S. federal prosecutors to be made to suffer.
And to be struck dead.
It therefore comes as no surprise that an HYIP apologist could not resist the urge to subject Maddy — a tiny dog who provided nothing but joy, never saw a person she did not love and put smiles on countless faces — to such a monstrous indignity.
In the HYIP sphere, according to the apologist, God protects the innocent operators of schemes advertising 2 percent a day and kills dogs to send a message to their owners not to try to warn the public about transnational crime made possible over the Internet.
And if the death of a dog doesn’t provide enough of a chill for a reporter to abandon a story, then maybe God or at least the forces of karma then will cause family members to die.
It is thuggery and racketeering, the voluntary abandonment of the greater angels of the soul, and it is utterly bereft of decency.
Keith F. Simmons, whose monumentally bizarre Ponzi scheme put a North Carolina bank in harm’s way, has been sentenced to 50 years in federal prison.
The Charlotte Observer was first with the story this afternoon.
Simmons is 47.
Among the allegations in case is that hucksters who’ve been charged both civilly and criminally conducted no real due diligence and helped Simmons grow the scheme to about $40 million.
See Feb. 17, 2011, PP Blog story that outlined some of the elements of a CFTC civil case against Simmons, the principal figure in the Black Diamond Capital Solutions LLC case.
See April 27, 2011, PP Blog story on how and why CommunityONE Bank N.A of Asheboro, N.C., was charged criminally in the aftermath of the Simmons’ caper for failing to maintain an effective anti-money laundering program. The bank entered into a deferred prosecution agreement with the government.
See Feb. 23, 2012, PP Blog story about individuals who allegedly assisted Simmons.
A Belize entity known as “Sovereign Grace Inc.” and and a second entity known as Divine Circulation Services Ltd. were part of the scam, investigators said.
Zeekler, an arm of a U.S. company, frequently promotes auctions for sums of U.S. cash. Winning bidders can collect the sums via offshore payment processors linked to fraud scheme after fraud scheme. Zeek is adding to the incongruity by preemptively denying it is a "pyramid scheme" while planting the seed that the U.S. government is operating a pyramid scheme through the Social Security program.
UPDATED 11:12 A.M. EDT (U.S.A.) After the U.S. Secret Service seized tens of millions of dollars in the AdSurfDaily Ponzi case in 2008, some of ASD’s Stepfordian members advanced the bizarre theory that ASD should have been left untouched because Social Security — a U.S. government program — is a Ponzi scheme. The argument, which assumes Social Security is a Ponzi scheme, is disingenuous to its core. Even if it could be proven that Social Security is a Ponzi, it does not change the simple fact that private businesses are not permitted to operate Ponzi schemes.
With the Social Security argument providing disingenuous cover for ASD and scams across the web, some of ASD’s most reliable “defenders” instantly turned their attentions to other autosurfs, HYIPs, cyclers and cash-gifting schemes. They might as well have said, “If the government gets to run a Ponzi scheme, so do we.”
The Social Security argument is a deflection that gets trotted out in scam after scam. It is used so often in scams that feature an MLM or MLM-like component that it has become a cliché, a veritable signature of a scam. Some of the most robotic MLM Stepfordians can’t resist the urge to go heavy on the exclamation points when they’re “defending” the most recent “program” in their stable of scams. Many of the “defenses” are nothing more than antigovernment screeds.
Even ASD President Andy Bowdoin — who after preemptive denials now admits he was operating a massive Ponzi scheme and knew all along that ASD was “an illegal money making business” — could not summon the discipline required to put an end to his scamming ways and days after his arrest. The government now says it has tied Bowdoin to AdViewGlobal (AVG), an autosurf that launched after the Secret Service raid, and to “OneX,” an alleged “fraudulent scheme” and pyramid.”
After the ASD raid, Bowdoin embarked on a PR strategy that positioned the government as evil. The government, according to Bowdoin, was guilty of “wrong doing,” creating a “nightmare of injustices,” bringing “un-true charges” and the “suppression of all ASD members.”
Like the Social Security argument, it was just a way to change the subject.
It has become somewhat fashionable within the HYIP sphere for “program” operators to preemptively deny they are running Ponzi schemes. The up-front denials were an element in the ASD case. They are incongruous by their very nature because they typically occur even as the “program” plants the seed that it not only pays commissions on two or more levels, but also provides outsize returns of 1 percent or more per day — percentages that would make Bernard Madoff blush.
“Zeek Rewards” is an MLM “program” that is planting an ASD-like seed that money directed to the enterprise will produce a large return.
Given the lessons provided by the ASD case on both the legal and PR fronts, it is just plain bizarre that Zeek is preemptively denying it is a “pyramid scheme” — all while going heavy on the exclamation points and raising the issue of Social Security.
On its Zeekler.com penny-auction site, the “opportunity” is saying this (italics/bolding added):
Our parent company Rex Venture Group has been in business 13 years and has historically paid its representatives in the field every commission check earned since its’ [sic] inception. “Is this a Pyramid Scheme?” Of course not!! “Pyramids” or “Money Games” are illegal and ask its’ [sic] participants to wrap money in tin foil and FedEx it to “someone else” with no exchange for product or service!
For good measure, the site is saying this (italics/bolding added):
The pyramidal structure is actually the “model” structure of every corporation and even the U.S. Social Security system. Why then are pyramids illegal? Because there is no “exchange” of product or service for the money spent and the only ones who “collect” money are the people at the top of the pyramid. When there are no longer enough people coming and sending money “up” to move people thru the pyramid – the pyramid collapses. An example of a legal – yet collapsing pyramidal structure/system is what is happening to social security. The baby boomers are all coming of age to collect (at the top of the pyramid)- with not enough people paying in from the bottom!! The structure will then collapse. Every CEO is at the top of his/her company’s pyramidal structure. That’s why he/she makes so much more than a mailroom worker. At penny auction site Zeekler every person has the same opportunity to achieve the same income or out-earn the person who referred them into the program.
Whether Rex Venture Group historically has paid commissions is immaterial to the issue of whether the company is conducting a pyramid scheme through its Zeek arms. Like successful Ponzis, successful pyramid schemes pay. The payments are what keep new money flowing to the schemes. Web-based Ponzis/pyramids can be exceptionally dangerous because affiliates use the payments they receive as a disingenuous form of social proof that no scam is under way.
Zeek’s “tin foil” reference is an apparent allusion to obvious cash-gifting scams. But lawyered-up Zeek has to know that the pyramid issue is much more complicated that that, which is why the gifting allusion impresses us as a red herring. Ponzi/pyramid schemes come in many forms and often involve the issuance and sale of securities. Fraud purveyors may avoid the use of the language of investments, but a security described as something else is still a security.
And that’s one of the potential issues with Zeek: Is the company selling unregistered securities as investment contracts and trying to disclaim its way out of an encounter with regulators?
Zeek does not address this issue in its preemptive denial that it is operating a pyramid scheme and simultaneous argument that Social Security is a pyramid scheme. But it does touch on the securities issue at the bottom of the home page of ZeekRewards, the MLM arm of the Zeek “program” (italics added):
IMPORTANT: The following paragraph MUST BE READ ALOUD whenever the ZeekRewards compensation plan is presented verbally or by telephone, or included in it’s entirety when communicating in writing:
“If you make a purchase from ZeekRewards you are purchasing a Premium eCommerce subscription or you are purchasing bids to give away as samples. You are NOT purchasing stock or any other form of “investment” or equity. You MUST actually use the bids that you purchase or give them away as samples to help grow your business. Affiliates who present our products to others in a misleading manner or in a way that leads the buyer to believe he or she is making an investment or purchasing equities will be terminated and all commissions and awards will be forfeited. Buyers MUST read the entire How It Works and Get Paid pages on the ZeekRewards website and the Legal Disclaimers.”
At a minimum, this much can be said about Zeek: It has a tin ear for PR.
Zeek is preemptively denying it is a pyramid scheme even as its affiliates maintain a presence on well-known fraud forums such as TalkGold and MoneyMakerGroup, a circumstance that strongly suggests scammers are directing money to Zeek that they “earned” in other scams. The Social Security argument also is a loser because it is embraced by a sea of online scammers as a rationale for licensing themselves to commit crimes on a global scale.
ASD preemptively denied it was a Ponzi scheme. Its Stepfordian affiliates advanced the Social Security deflection even as they were racing to their next scams and positioning them as a way ASD members could make up their losses.
Almost all of the scams used the same offshore processors Zeek is using.
My beloved Maddy died Friday. She’d been sick for three weeks. Maddy turned four on April 1 — the birthdate I assigned her. I don’t really know when Maddy actually was born. She was a shelter puppy, a gift from God presented to me by my worried family during some of the most challenging times of my life.
Maddy made me healthier.
Instantly.
Maddy: Wonderment, joy, optimism, unqualified love for humanity.
Maddy became my joy when joy was something in short supply. I cannot recall a time in the past four years when she was more than, say, 8 feet away from me. She was with me from the beginning of my coverage of the AdSurfDaily case, often in my lap as I wrote — at other times, on the floor under my desk. If she did venture from my office, it was to a landing area at the top of the steps that led downstairs. She’d position herself on the floor in such a way that she could keep her eyes both on me and on two small windows in the front door at the bottom of the steps.
From her position on the floor, she’d let me know if she saw, say, a lone jogger or the entire high school cross-country team. There were different signals for each, different displays of animation and unbridled joy. A lone jogger or dog-walker outside prompted Maddy to give me the “I’d-like-to-go-outside-and-play-with-them” look.
It was if she were asking this question: “Can I please go outside and show that person how much I love them?”
The cross-country (or track) teams would prompt the “I-absolutely-MUST-go-outside-to-play-with-them” look. It was as though she were saying this: “The more people I see, the more of my love for people I can share.”
Here is a sentence I uttered a thousand times to Maddy: “Do you see someone you love?”
The answer always was yes. She did not have to know them to love them. It’s what I loved most about Maddy.
Maddy loved the cable guy. She loved the man who read the electric meter. She loved the letter-carrier, whether the regular carrier or the occasional substitute. She always thought that every person she saw — be they on the street or at the door — had come to see her. And she wanted to reward them for coming to see her by displaying her return affection. Maddy’s joy was both infectious and inimitable, her unique signature.
I saw it as proof of God, proof that life was not some kind of cosmic or protoplasmic accident.
Through the simple act of being herself, Maddy created a story an hour, on some days a story a minute. This is one of many stories that will live with me for the ages.
A man with a small farm and four cows lived down the road. Maddy believed the cows were her friends. I’d take Maddy on walks just so she could see the cows through the fence. The look on her face when he encountered them is one I’ll never forget. It was a look of overwhelmingly joyous curiosity: She just knew she loved them — and that they’d love her, too, if only she could get closer to them.
An amazing thing happened one day, something that created a lifetime memory for both Maddy and me.
I was at the stove preparing dinner; Maddy was behind me a foot away, peering through the kitchen window. Maddy became extremely animated in her signature way.
“Track team,” I thought.
But the animation endured for minutes, long after even the team stragglers would have vanished from Maddy’s view. By now, Maddy was practically beside herself with excitement — and so I turned around and joined her at the window.
That’s when I saw one of the neighbor’s cows in the side yard, only feet away, completely unconcerned about Maddy. It was an incongruous scene to be sure, evidence that the farmer down the road had a hole in the fence — and perhaps evidence that he had lost his entire small herd and had a significant problem on his hands.
Nothing about the situation was problematic to Maddy, of course. Her eyes and the look on her face told me that she just had to get outside to bond with this 1,500-pound animal, that she just had to share her joy with yet another friend who’d stopped by to visit her. This I could not permit, not even for Maddy. Now at her full adult weight, she was all of 20 pounds. Even if the cow were completely docile — even if its brain cued it not to be afraid of Maddy and not to display any aggression whatsoever toward Maddy — one misstep by the cow could have crushed her.
What I decided to do was call the farmer’s house while improving Maddy’s view. So, I took Maddy to the breezeway door through which Maddy could observe the cow with no curtain partially obstructing her view — and I made the call.
There was no answer, so I left a message. The cow must have heard me talking — and just bolted up over the hill.
Maddy gave me a look of supreme disappointment, as though she were telling me, “You scared off my friend, Uncle Pat.”
True to form, however, Maddy quickly was back in fine fettle.
With the cow long gone, I took Maddy outside for the post-bovine inspection. She sniffed all the hoof marks now suddenly in the yard, soft from recent rains. Maddy examined them as though she were analyzing one of life’s deeper mysteries, like a connoisseur examines the aroma of wine.
Maddy just knew there were clues in that yard, in those holes, especially the ones that were filling up with water. The cow never returned to the yard — but did return to the farm. Maddy always would have her cows. She wanted to bond with the deer, too.
The simplest things made Maddy happy. Fetch. Paws dog food. Hoof marks. Pine cones. Twigs. Dandelions. Apples.
In the fall, I’d put an apple from the nearby tree in my pocket. Maddy would dance next to my pocket the entire way back to the house. She knew an apple meant a double treat: the joy of batting it around on the floor inside, the joy of tasting something sweet. I cut Maddy’s apples into small pieces; that’s what my mother used to do for me when I was a small child, when I had the certitude of Maddy and the same joyous curiosity.
I thank God for sending me Maddy. I thank Maddy for her unqualified love for all humanity, for her generosity of spirit, for her ever-present optimism.
You’ll love your Grandma Kate, Maddy. She’ll be so proud of you for taking such good care of me, for getting me outdoors during all four seasons, for giving me reasons to go on walks, for your selflessness. She will respond to your joy with joy in equal measure. Like you, she found beauty and wonderment in seemingly insignificant things — things such as squirrels and robins and pine cones and dandelions and apples.
And cows.
Grandma Kate passed along those types of joys to me when I was a child. I forgot about them until God sent you to me, Maddy. It’s why I told you every day how lucky and thankful I was to have you.
Maddy's favorite kibble.
As sure as God understands the misdemeanors of puppyhood, Grandma Kate will make sure you have pillows to shred. She’ll make equally sure you have a ready supply of your favorite food — the white chunks of Paws kibbles — for instant consumption or temporary hiding. She’ll also make sure your apples are sliced into bite-size chunks — and she’ll make sure you see plenty of cows and deer and squirrels and chipmunks and birds and turkeys as you walk the nature trails of heaven.
You were my little Maddy girl — and more important to me than I could put into words while you were here. Grandma Kate, I’m sure, will let you know that your life is one that made a difference.
Thank you, dear Maddy girl. Please know how much your people loved you and how much they grieve at your loss.
Under the terms of his plea agreement, AdSurfDaily President Andy Bowdoin effectively has been banned from multilevel marketing, Internet opportunities and businesses that employ mass marketing.
The agreement contains this provision, and Bowdoin consented to it in writing as a condition of release before he is formally sentenced: “Your client shall not participate in any business venture using the internet, multi-level marketing, or mass marketing.” (Italics added.)
Language in the agreement suggests the bans could last until Bowdoin is well into his eighties — until Bowdoin, now 77, serves any prison or probationary term imposed. No sentencing date has been scheduled. Bowdoin’s next court date is set for June 12 “to determine if he should be incarcerated pending his sentencing,” federal prosecutors said.
Bowdoin pleaded guilty yesterday to wire fraud for the web-based ASD scam. The information in the numbered entries (below) was confirmed by Bowdoin himself in a “Statement of Offense” that bears his signature. It is in stark contrast to earlier online claims by the ASD patriarch that he had been railroaded and that ASD members should send him money to pay for his criminal defense.
Second Key Win For Government
Bowdoin’s guilty plea marked the second recent win by the government in a major online HYIP case. Gregory N. McKnight, the operator of the Legisi HYIP and Ponzi scheme, pleaded guilty to wire fraud in February. The Legisi and ASD schemes fetched a combined haul of more than $180 million, according to court filings. Bowdoin’s scheme was a form of HYIP fraud known as “autosurfing” in which participants were promised enormous returns for viewing advertisements. The schemes spread in part through social networking and shilling sites such as the TalkGold and MoneyMakerGroup forums.
The U.S. Secret Service was involved in both the ASD and Legisi probes.
ASD Discussed In HYIP’s Conference Call Day Before Bowdoin Guilty Plea
A current HYIP scheme known as JSS Tripler/JustBeenPaid continues to make inroads online. Frederick Mann, the purported operator of JSS/JBP, was identified in 2008 promos as an ASD pitchman. Bowdoin’s legal problems were among the subjects of a JSS/JBP conference call Thursday that appeared to be heavily populated by U.S. residents, including some who expressed worry about the “program.” JSS/JBP purports to provide a daily return of 2 percent, twice that of ASD.
Less than 24 hours after Thurday’s JSS/JBP call ended, Bowdoin pleaded guilty in open court and subjected himself to a possible prison term of 78 months, along with three years’ supervised release. Under the terms of his plea agreement, Bowdoin potentially faces court supervision for the next 9 and a half years.
During Thursday’s call, Mann — an older man, like Bowdoin — did not rule out the possibility that his program could encounter an ASD-like intervention by the government.
“The slavemasters don’t want their slaves to escape,” Mann said, casting the U.S. government as wicked.
“What you need to realize is that the de facto U.S. Constitution is ‘anything goes’ that we can get away with. So, that’s how Obama operates. That’s how Romney would operate if he were elected President. That’s how George Bush operates.”
Like ASD, JSS/JBP may have ties or be sympathetic to the so-called “sovereign citizen” movement. “Sovereign citizens” have an irrational belief that laws do not apply to them. JSS/JBP is so secretive that the “opportunity” does not identify where it is operating from and makes members affirm they are not with the “government.”
After a caller asked Mann Thursday about ASD, Mann said this:
“If they want to arrest people and take their money, they will find some pretext.”
HYIPs operate as virtually pure Ponzi schemes. Victims can pile up by the tens of thousands in a single scheme. The schemes redistribute wealth from the masses and put it in the hands of a select few.
Bowdoin’s Statement
ASD's Andy Bowdoin
Before getting into some of the specifics of Bowdoin’s signed statement — a statement also signed by Bowdoin’s attorney Charles A. Murray and a federal prosecutor — it perhaps is worth noting that Bowdoin’s plea agreement contains this provision to which Bowdoin agreed in writing: “Your client represents to the Court that his attorney has rendered effective assistance.” (Italics added.)
Though boilerplate language, it is important in the context of Bowdoin’s history. Indeed, he has a history of publicly blaming lawyers for his problems. In 2011, for example, he appeared in a video solicitation in which he asked the people he now admits he defrauded to pay for his criminal defense. Bowdoin blamed his prior counsel, a federal judge, two federal prosecutors and three agents of the U.S. Secret Service for his predicament. The final page of the plea agreement contains this language to which Bowdoin agreed in writing:
“I have read this Plea Agreement and discussed it with my attorneys, Michael McDonnell, Esq. and Charles Murray, Esq. I fully understand this Plea Agreement and agree to it without reservation. I do this voluntarily and of my own free will, intending to be legally bound. No threats have been made against me nor am I under the influence of anything that could impede my ability to understand this Plea Agreement fully. I am pleading guilty because I am in fact guilty of the offense(s) identified in this Plea Agreement.” (Italics/bolding added)
Because of the plea agreement and the MLM/Internet/mass-marketing bans, Bowdoin’s role as an an online pitchman for a program known as “OneX” has ended.
In essence, because of what Bowdoin did in ASD — and allegedly what he continued to do even after being arrested for running a Ponzi scheme — Bowdoin has been banned from MLM, kicked out of the business side of the Web and barred from making mass solicitations in any form.
Prosecutors said last month that OneX was a “fraudulent scheme” and “pyramid” that was recycling money to members in ASD-like fashion. Bowdoin was arrested on ASD-related charges in December 2010. In October 2011 — 10 months after his arrest — he told OneX prospects that God had provided the OneX program and that he intended to use money from the scheme to pay for his criminal defense.
On Tuesday — just three days before Bowdoin pleaded guilty to a felony for his operation of ASD — a fellow OneX pitchman described Bowdoin as “our Mentor.”
Here, now, some highlights from Bowdoin’s signed “Statement of Offense” — along with editorial notes. Bolding added by the PP Blog . . .
1.) “Bowdoin called ASD’s operation a revenue-sharing advertising program . . .” (NOTE: All kinds of HYIP schemes use the phrase “revenue sharing” as a means of masking the Ponzi elements. The phrase, for example, appears on the website of JSS/JBP. It “works” because it sounds plausible. After all, many businesses share revenue legally. The connection many new HYIP enlistees do not make is that scammers have co-opted the term to sanitize their fraud schemes.)
2.) “But, contrary to its representations, the advertising packages sold by ASD generated insufficient revenue to fund the returns it promised to the members. Instead, ASD operated as a ‘Ponzi’ scheme.” (NOTE: ASD members Dwight Owen Schweitzer and Todd Disner sued the government last year, alleging that ASD was a legitimate business. Bowdoin now publicly disagrees with them, based on his admission that ASD was a Ponzi scheme.)
3.) “Throughout ASD’s operation, Bowdoin was aware that ASD was an illegal money making business, and that he was intentionally defrauding ASD members.”
4.) ASD, according to Bowdoin’s statement, actually gathered more than “$119 million” from members. (NOTE: This figure is about $9 million higher than the rough amount of $110 million cited by the government in previous filings. The PP Blog will check next week to see if it can confirm that the $119 million figure is the final sum identified after investigation. As things stand, both Bowdoin and the government agree on the $119 million figure.)
5.) ASD made more than $45 million in Ponzi payments and spent more than $10 million on operations. About $1.161 million was directed at Bowdoin or his family.
6.) During ASD’s initial iteration at AdSurfDaily.com, Bowdoin realized “[a]fter only a few months of operation” that ASD was in over its head “because he was not selling any independent products or services sufficient to generate an income stream needed to support the returns and commissions ASD was paying . . .” (NOTE: The JSS/JBP scheme has a commission-payout scheme (two tiers, one paying 10 percent the other 5 percent) that is virtually identical to ASD. Incredibly, JSS/JBP says it can pay double ASD’s daily return of 1 percent on top of the two-tiered commissions.)
7.) “In approximately March 2007, Bowdoin ceased ASD’s operations because it was paying out money to its employees and members faster than it was taking in new money.” (NOTE: Bowdoin’s concession proves the government’s longstanding theory that ASD collapsed in its original iteration because of the Ponzi pressure. At one point, according to court filings, Bowdoin blamed ASD’s inability to pay on script problems and a purported theft of $1 million by “Russian” hackers.)
8.) Bowdoin — instead of getting out of the Ponzi business — thereafter launched ASD under a new name at a new website: ASDCashGenerator.com. Bowdoin, according to his statement, admits he made some cosmetic tweaks — lowering the return from 150 percent to 125 percent, for example. “By not changing ASD’s business model in any meaningful way, Bowdoin continued to intentionally defraud members.” (NOTE: It is common in the HYIP fraud sphere for “admins” to claim they’ve employed tweaks to take Ponzi issues out of play. An obvious Ponzi scheme known as JSS Tripler 2 appears recently to have employed some Bowdoin-like tweaks, including a name change to T2MoneyKlub — while adding to its claims that the “opportunity” had income streams sufficient to pay an absurd return of 2 percent a day on top of referral commissions.)
9.) Bowdoin never told his second group of fraud victims that they were paying for the fraud Bowdoin committed against his first group of victims.
10.) “Bowdoin also intentionally failed to explain to old and new members that, in the 1990s, he was convicted in Alabama of three securities-related crimes, charged in Alabama in at least 13 additional indictments alleging securities fraud, and barred from ever selling securities in Alabama.”
11.) Bowdoin compounded lies told about his lack of a criminal record by permitting lies to be told about an award for business achievement purportedly given Bowdoin by President George W. Bush. The “award” actually was a memento from the National Republican Congressional Committee (NRCC) that was “entirely dependent” on a Bowdoin money contrbution to NRCC of $25,000 “and was not based on Bowdoin’s business acumen or any other evaluation of his prior business practices.”
URGENT >> BULLETIN >> MOVING:(5TH UPDATE: 5:54 P.M. EDT) Andy Bowdoin has pleaded guilty to wire fraud in the AdSurfDaily Ponzi case.
A bond-review hearing for the 77-year-old ASD patriarch had been scheduled for 2 p.m. today. Instead, the proceeding turned into a plea hearing.
“The Internet now allows swindlers to perpetrate fraud on a much larger scale than Charles Ponzi could have imagined 100 years ago,” said U.S. Attorney Ronald C. Machen Jr. of the District of Columbia. “Andy Bowdoin’s online Ponzi scheme took in $110 million from thousands of people across the United States and other countries. His guilty plea today is another milestone in our efforts to protect the public from being ripped off over the Internet. This case is a healthy reminder that the public should be skeptical when evaluating investment opportunities: If it sounds too good to be true, it probably is.”
Bowdoin, who was arrested in Florida by the U.S. Secret Service on Dec. 1, 2010, has been free on bond since his arrest. He will remain free at least until June 12, when another hearing is scheduled.
U.S. District Judge Rosemary Collyer is presiding over the case.
Bowdoin admitted today that he knew ASD was a fraud — but nevertheless continued to operate it between 2006 and 2008. He also admitted that he siphoned more than $1.16 million from the scam, using it to enrich himself and his family.
Under the terms of a plea agreement, Bowdoin faces a maximum sentence of 78 months in federal prison. How soon he would begin any sentence handed down remains unclear. It is believed that Bowdoin — who’d initially began negotiating with prosecutors in late 2008 — reentered negotiations after prosecutors accused him last month of pitching a “fraudulent scheme” and “pyramid” known as OneX.
Prosecutors also say they tied Bowdoin to an autosurf known as AdViewGlobal.
Monty Ervin, the self-styled “sovereign citizen” who declared himself “governor” of Alabama in its “original jurisdiction” and a “Most Christian Prince,” has been sentenced to 10 years in federal prison for his role in scheme that masked the ownership of real estate by placing it in the names of bogus trusts and relied on structured transactions to evade currency-reporting requirements.
