We’ve previously noted that the Financial Industry Regulatory Authority (FINRA) has described the HYIP sphere as a “bizarre substratum of the Internet.”
That substratum now is getting crazier yet.
Three weeks ago, Club Asteria was a great darling of the Ponzi boards. But weekly payout rates that purportedly have been slashed — coupled with a purported freeze of Club Asteria’s PayPal account — appear to have put the “program” in a death spiral.
Club Asteria stopped short of announcing it had placed a call to the coroner, but did announce a “downward spiral,” according to a post on the MoneyMakerGroup Ponzi scheme and criminals’ forum.
Not to worry, though: Some Club Asteria promoters on the Ponzi forums have turned their attentions to JSS Tripler, whose site appears to be accessible through multiple domains, including a site known as JustBeenPaid (JBP).
JBP appears to be tied to something called Synergy Surf, which appears to be another darling of the Ponzi boards.
“I buyed (sic) new 8 positions for that,” a MoneyMakerGroup poster announced.
JPB encouraged enrollees to “[s]et up your AlertPay account and fund it, or link your credit card to it,” according to web records.
These instructions also were provided.
Upgrade in JBP by making your $10 or $20 payments.
Enter your AlertPay email address in the JBP Member Area.
Buy and/or sponsor downline members.
Study and apply ‘Upgrade Your Brain’ and the ‘Big Success Breakthrough’ — see ‘Access Our Products’ in your JBP member area.
Make JBP’s Synergy Surf (JSS) your primary moneymaker.
In the spring of 2009 — as the AdViewGlobal (AVG) autosurf was in its death throes before a fatal gurgle — the AVG braintrust pointed the finger of blame at the membership.
Other surfs that launched in the aftermath of the seizure of tens of millions of dollars from Florida-based AdSurfDaily did the same thing. These included AdGateWorld, which once referenced ASD in what appeared to be a copy-and-paste lift from ASD’s Terms of Service, and BizAdSplash, whose purported “chief consultant” was ASD/Golden Panda Ad Builder figure Clarence Busby.
Fast forward two years, and Club Asteria, which lists Andrea Lucas as managing director, appears to be doing the same thing — along with serving up some Busby-like syrup for the soul:
“Greed is a very powerful motivation, but the kindness, generosity and goodness in all of us all are even more powerful,” Club Asteria is reported on MoneyMakerGroup to have intoned.
“The challenges that we are facing recently have been caused by a small percentage of our members misusing their membership privileges,” Club Asteria is reported to have told members. “As any good company would have done to protect their members and future members, we had to reinforce our Code of Ethics and Conduct, to ensure that our message of a better life for all of us is presented honestly and accurately.
“We are working very hard to make sure that any benefit from Club Asteria and all of our products and services are accurately represented. Any company, no matter how good their products and services are, can be destroyed with misleading information, bad publicity, false rumors and inactivity of their members/customers.”
Two years ago, AVG’s death spiral began as the ASD grand jury was meeting in the District of Columbia. The surf first slashed payouts — something Club Asteria reportedly is doing right now — and then eliminated them altogether, while at once announcing an 80/20 program would become mandatory after AVG completed an audit of itself.
One of the issues complicating matters for AVG was the purported misuse of a member-to-member cash button. Club Asteria members also purportedly misused a money-transfer facility.
“Bizarre substratum of the Internet” just about covers it — except for the heartache and myriad nightmares created by the various HYIP darlings, of course.
Thinking Outside The Box
Our friends at RealScam.com report another nightmare in the making. It’s bizarrely called Insectrio — and it bizarrely has an “Egg” plan purported to pay 103 percent after one day, a “Larva” plan purported to pay 120 percent after five days and other plans advertised to pay even more.
The sales pitch for Insectrio, apparently an emerging HYIP, touts MoneyMakerGroup, TalkGold and DreamTeamMoney.
Given JBP’s prompt for enrollees to “upgrade” their brains — which we view as a prompt to think outside the box — the PP Blog concludes this post by providing readers an outside-the-box way to look at the Insectrio offer:
InSECtrio.
Indeed, the three letters centering the HYIP’s name are real attention-getters.
A surf firm with membership and promoters’ ties to AdSurfDaily may be disintegrating — but is still encouraging participants to send in money, a member said.
“[T]he earnings/payouts nearly [stopped] but of course we were ‘encouraged’ to continue making purchases so that our earnings/payouts could continue as before,” the member said of the surf, which is known as AdPayDaily (APD).
The PP Blog reported in June that members of the pro-ASD Surf’s Up forum were listed as having high positions in APD.
APD’s website was registered on Nov. 18, 2008. That’s just one day before U.S. District Judge Rosemary Collyer ruled that ASD had not demonstrated it was a lawful business and not a Ponzi scheme. APD’s domain-registration date also coincides with a string of registration dates by the so-called ASD clones, including AVG, AdGateWorld and BizAdSplash — all of whose domains were registered after the seizure of ASD’s assets in August 2008 and all of which eventually went missing.
“I feel like we are being strung along to keep on paying in,” an APD member told the PP Blog.
ASD President Andy Bowdoin was arrested last week on charges of wire fraud, securities fraud and selling unregistered securities. Like Bowdoin, APD urged members to keep their faith in the enterprise.
Also like ASD, APD told members in a recent email that it was experiencing “tech issues.”
“Just a note to let everyone know that we’re still working on tech issues in with the Administrative section of our website,” APD wrote last month. “If you have continued to surf you know that the daily payouts are minimal at best and that probably won’t change until we secure the necessary funding.
“In the meantime we’re still working to resolve all issues and we are extremely hopeful that we’ll have everything in order by years end,” the company said. “We will keep you posted with our progress.”
EDITOR’S NOTE: The PP Blog has covered a number of stories in which U.S. residents living overseas were extradited to the United States to face Ponzi charges. The case against Ronald Paul Shade is another one — and it’s one that demonstrates that an extradition can occur even if a defendant is not charged with a federal offense.
Indeed, the warrant for Shade’s arrest was issued by a state-level Superior Court judge in California, according to Interpol. Shade’s case is instructive because it defeats some of the myths propagated on Ponzi boards such as MoneyMakerGroup, ASAMonitor, TalkGold and MyCashForums. Among the myths is that “offshore” equals “safe” for both investors and Ponzi perpetrators.
Don’t tell that to Shade, now jailed in California after being extradited from Bangkok by local — as opposed to federal — prosecutors in California. His bail was set at $3.9 million.
And don’t tell it to Jeffrey Lane Mowen, extradited from Panama to face federal Ponzi charges in Utah and later indicted in an alleged murder-for-hire plot. Here’s a quick side note on the Mowen case: If you like the recruitment fees paid by HYIP, autosurf and corrupt MLM or commission-based investment programs and make claims about the “due diligence” you’ve performed and try to impress prospects with your insider knowledge, your willful blindness may put you at great risk.
Mowen had three prior convictions in Utah for securities fraud and two for theft, according to records. Despite Mowen’s criminal record and history as a fraudster, promoters still did business with him. Their faith drained millions of dollars from investors, the SEC said. Using language apt to cause unease in the Ponzi-promoting world, the SEC said at least one promoter “either knew or was reckless in not knowing that Mowen had multiple recent felony convictions involving crimes of dishonesty.â€
Indeed, the SEC said, the promoter learned in approximately late June 2007 that Mowen had been convicted of securities fraud . . . [but] “continued to solicit new investor funds for several months while failing to disclose Mowen’s criminal history to any of the Promoters or their investors.†Downstream promoters who entrusted the promoter “conducted virtually no due diligence in connection with [his] purported investment opportunities, but transferred investor money to [him] without any documentation or limitation on his use of the funds,†the SEC said.
Perhaps the biggest myth exposed by the Ronald Paul Shade case is that going offshore takes state attorneys general and local prosecutors totally out of play. Longtime PP Blog readers will remember that the “offshore” pitch was pivotal in promotions for AdViewGlobal, AdGateWorld, MegaLido and other autosurfs that surfaced in the aftermath of the seizure of tens of millions of dollars by the U.S. Secret Service in the AdSurfDaily Ponzi scheme case. Some ads claimed that the “offshore” surfs neutralized state-level investigators.
Shade, however, was brought back to the United States at the request of the San Bernardino County District Attorney’s Office in California to face state charges filed by local investigators.
Still promoting investment-fraud schemes on the Ponzi boards and supplementing your pitches with myths about “safety” and how the overseas schemes are insulated from prosecution? Perhaps this story on the dramatic extradition of Colombian national David Murcia to the United States will help you snap out of your delusion that Ponzi and pyramid businesses cause no harm and represent “freedom” of choice. Perhaps this story on Robert Hodgins, who goes to bed at night knowing he’s wanted by Interpol, will help you shape your thinking.
The cases of John and Marian Morgan, U.S. residents extradited from Sri Lanka, also are instructive.
Finally, it’s worth noting that, after the United States charged Canadian national Nicholas Smirnow in May with operating an HYIP Ponzi scheme, a MyCashForums poster was quick to claim that “the USA has no extridition (sic) agreement ion (sic) place with the Phillipines (sic) . . . “
The claim was false. Federal prosecutors said they are seeking Smirnow’s extradition. He was accused of operating a $70 million, international fraud known as Pathway to Prosperity (P2P).
Here, now, the story of Ronald Paul Shade’s extradition . . .
A California man living in Thailand was extradited to the United States to face charges he ripped off senior citizens in a real-estate Ponzi scheme, authorities said.
Ronald Paul Shade, 39, formerly of Riverside, was arrested by local detectives Friday at Los Angeles International Airport. He was charged by investigators from the San Bernardino District Attorney’s Office with 29 felonies, including financial elder abuse, filing forged documents with the County Recorder’s Office and grand theft.
San Bernardino County District Attorney Michael A. Ramos, who also is the president of the California District Attorneys’ Association, led the probe.
Among the detectives involved in the Shade probe was Michael Leibrich, a senior investigator with the DA’s office.
“From 2006 to 2008, Shade solicited money from numerous investors for his company, Orange Crest Realty,” investigators said. “Investors were promised a high rate of return for a short-term investment. Elderly victims later discovered that their life’s savings were being used to further a Ponzi scheme.”
Shade had been living in Thailand for about two years, investigators said.
In 2008, the California Department of Corporations issued a “desist and refrain” order against Shade and his company after alleging that they were selling unregistered securities and recruiting prospects by urging them to “Get 18% APR Today†through the company’s “wonderful†investment.
Shade and the company used a now-defunct website known as OCRFunding.com to pitch the purported program, authorities said.
Among the misleading claims made to investors, according to authorities, were these:
That Orange Crest Realty was founded in 1993. (Authorities said Orange Crest Realty was not incorporated until June 2004.)
That Orange Crest Realty is a “registered investment advisor.†(Authorities said neither Shade nor the company and its associates were registered.)
That each investment was secured by actual title to specific existing real property. (Authorities said that “each investment was not secured by real property.”)
That a Deed of Trust And Assignment of Rents in the Property would be recorded with the Office of the County Assessor/Recorder and the investor would be provided with the recorded deed. (Authorities said a deed promised an investor who sent in $50,000 was not recorded and the “investor never received a recorded deed.”)
That the investor would receive regular monthly interest payments. (Authorities said “payments ceased shortly after the investment was purchased.”)
San Bernardino County investigators were assisted in the extradition by the Southwest Regional Fugitive Taskforce of the U.S. Marshals Service.
The scheme, which allegedly gathered $14 million, also fleeced investors who responded to newspaper ads, investigators said.
We have received a few inquiries about a new surfing program called AdPayDaily (APD). Our initial take is that the program is a dressed-up version of AdSurfDaily, AdViewGlobal, BizAdSplash and AdGateWorld and that the operators are persuaded they’ve found a word combination and legal structure that will neutralize critics and law enforcement should concerns about the sale of unregistered securities and a Ponzi and pyramid scheme be raised.
AVG, BAS and AGW were positioned by former ASD members as offshore “clones” of ASD. APD, like ASD, appears to be operating in the domestic United States.
In our view, APD’s presentation raises numerous red flags. At a minimum, it is starting out as an MLM absurdity, if not a potential monstrosity. To get a flavor of the absurdity, imagine that Walmart was clueless enough to start an autosurf and provide a corporate-approved greeter who says, “Welcome to Walmart Pay Daily. We count all the money out of sight in the back room at midnight to determine how much you get, and keep 50 percent of the cash for ourselves. Don’t worry. We have excellent lawyers, and we’ve instructed the money-counter not to rip you off.”
That’s effectively what APD is saying.
Another red flag is the fax number listed on a document APD refers to on its website as “Ad Pay Daily’s Conference Registration Form For July 30th and 31st 2010.” The fax number is listed online as a number used by a Kansas real-estate flipping company billed as National Flips. Like APD, the National Flips domain registration is hidden behind a proxy, although the website says this: “To learn how to become a Hard Money Lender and earn 30+% per annum, call [a telephone number] . . .”
Meanwhile, the invitation for the APD conference that uses the National Flips fax number says this — not once, but twice: “Any person who does not provide photographic proof of identity will not be permitted to attend this event, so don’t forget your photo ID.”
Why a photo ID would be required to attend a sales pitch for an advertising company is left to the imagination. Undercover Secret Service agents have been known to attend such functions, however.
Virtually every autosurf that has come along has used strange approaches or applied language tweaks designed to skirt securities laws, disarm critics and sanitize the “opportunities” for prospects. Serial autosurf promoters are infamous for telling prospects that a particular surf has found the magic pill that makes everything legal. Historically they rely on the surf operators to provide a legal cover. When things go south, they claim no one can blame them for promoting the schemes. After all, they relied on the assertions of the operators that everything was above-board and legal. They have been disingenuous in the same way that Alfred E. Neuman, Mad magazine’s fictional mascot, was disingenuous.
“What, me worry?”
Worry, however, appears to be front-and-center at APD, which is preemptively denying in multiple places that it is a Ponzi scheme. This strikes us as a big red flag. There are others.
ASD, Surf’s Up Members Become APD Players
During its early research into APD, the PP Blog has determined that a number of members of the alleged AdSurfDaily autosurf Ponzi scheme have high positions in the APD venture. Some of the former ASD members hold more than one position in the top 80 positions in APD, including a former Surf’s Up Mod who appears to hold positions 76 and 77. It is possible that another Surf’s Up Mod also is high up in the pecking order of APD affiliates at No. 56.
The Blog determined the names of APD promoters by researching the method by which APD creates affiliate links. At least one ASD member who made himself part of the ASD Ponzi litigation by submitting pro se pleadings holds positions 9 and 10 in APD, according to the affiliate links.
Surf promoters are not fond of pointing out the pain of previous prosecutions of autosurfs and the time-consuming and expensive litigation involving both the government and court-appointed receivers that may occur when a surf collapses. It is not uncommon for millions of dollars to go missing in a surf.
ASD’s Andy Bowdoin has told members that he has spent more than $1 million in his legal defense. Nothing (other than GIGO passed along by promoters) suggests Bowdoin was a man of means prior to the Secret Service raid on ASD’s headquarters in August 2008. His money for his defense appears to have come from ASD members. On a side note, Bowdoin tried to persuade members in September 2009 that the million dollars he dropped to keep himself out of prison was for their benefit. At the same time, he claimed his fight with the government was inspired by a former Miss America.
ASD gathered at least $65.8 million. When the sum seized in the Golden Panda Ad Builder action, which is part of the ASD litigation, is factored in, the number surges to more than $80 million. That’s a big number, of course — one that shows why others want to start surfs and just tweak and tweak and tweak in search of the elusive magic pill.
APD’s website was registered on Nov. 18, 2008. That’s just one day before U.S. District Judge Rosemary Collyer ruled that ASD had not demonstrated it was a lawful business and not a Ponzi scheme. APD’s domain-registration date also coincides with a string of registration dates by the so-called ASD clones:
Aug. 18, 2008: Domain name for AdGateWorld registered. (About two weeks after the ASD raid by the U.S. Secret Service, which is working in concert with the IRS and federal prosecutors.)
Sept. 22, 2008: Domain name for AdViewGlobal registered. (AVG had very close ties to ASD.)
Nov. 7, 2008: Domain name for BizAdSplash registered. (ASD and Golden Panda figure Clarence Busby purportedly was both the “chief consultant” and owner of BAS.)
APD’s domain was registered just 11 days after the BAS domain was registered and only a couple of weeks before ASD declared that the now-defunct Surf’s Up forum was its official organ for ASD news. Surf’s Up became infamous for shilling for Bowdoin, fracturing the facts of the ASD wire-fraud and money-laundering case and misinforming members.
Each of the surfs in the bullet points above failed spectacularly. Each of them blamed members for their problems. Each of them had promoters and members in common with ASD. Each of them also offered various “bonuses” to join — something APD is doing at the moment.
Has the Golden Panda Ad Zone forum, which was renamed the Online Success Zone after federal agents seized tens of millions of dollars from AdSurfDaily and Golden Panda Ad Builder in 2008, followed the Pro-AdSurfDaily Surf’s Up forum into the dust?
The website URL — http://goldenpandaadzone.ning.com — now is returning the same error message Surf’s Up produced when it went missing early this year. Other failed autosurf forums on ning.com have generated the same error message.
It was not immediately clear how long the Golden Panda Ad Zone forum has been offline. The forum was a meeting place at which promoters shilled for autosurf programs, cash-gifting schemes and other questionable “business opportunities” such as recyclers.
It is believed that every single autosurf program pitched on the Golden Panda Ad Zone Forum collapsed or is in the process of failing, giving the forum an unblemished record for failure. In recent weeks, the forum was used to promote MLM programs such as Narc That Car and Data Network Affiliates.
In one memorable video, the forum pitched multiple surf programs that reportedly collapsed this year or last after the spectacular seizures in the ASD case. These included — but are not limited to — Biz Ad Splash, AdGateWorld and Daily Profit Pond.
Biz Ad Splash purportedly was operated by Clarence Busby, who presided over the collection of more than $14 million before it was seized in the ASD case and an untold sum with Biz Ad Splash. AdGateWorld, meanwhile, collapsed after collecting an untold sum and purportedly being sold to buyers in the “Middle East.”
Daily Profit Pond, which suddenly went missing just prior to Christmas in 2008 after collecting an untold sum, also was said to have collapsed.
In AdGateWorld’s earliest days, the acronym “ASD” appeared in its Terms of Service, which suggested the surf simply copied and pasted terms from one program to another.
The Golden Panda Ad Zone forum also was notable for promoting MegaLido, another program that resulted in a spectacular flameout prior to the 2008 Holiday Season, and a host of cash-gifting schemes promoted as “Pay It Forward.”
“Pay It Forward” is a promotional scheme by which members sign up under each others links as a means of assuring they can build downlines or establish relationships with like-minded participants.
Autosurf programs that pay a lower daily rate “normally have sustainability,” a forum pitchman counseled prospects in a video. He cited no authority for the claim, but noted that 7 percent to 14 percent a week was a “really, really good” return that no bank could match.
“I can assure you [of] that,” the pitchman said, noting that higher return-on-investment surf programs “just tend to go away quicker.”
MegaLido, he explained, might have been a clunker because its advertised payout rate of about 13 percent a day perhaps made it unsustainable. How a program that paid a lower rate of say, 1 percent a day or 365 percent a year, could be any more sustainable without being a Ponzi scheme never was explained.
Like their brick-and mortar cousins, autosurf Ponzi schemes are not sustainable. They sustain themselves temporarily only through the use of smoke-and-mirrors, paying old members with money from new members to create the mirage of sustainability and performing other sleight-of-hand such as “80/20” programs to minimize cash outflow. Ponzi scheme operators typically siphon funds paid by investors, which is a form of theft. Prosecutors view the money as proceeds of a crime.
Like the Surf’s Up forum — but to a lesser degree — the Golden Panda Ad Zone forum became an outlet for members to complain about how the government views the autosurf “industry.” Some members complained openly, if not bitterly, about perceived “slow” refunds as a result of the seizure of assets connected to ASD and Golden Panda.
Those assets were seized amid wire-fraud, money-laundering and Ponzi scheme allegations — but members continued to push surf programs even after the seizure, while still complaining about “slow” refunds.
The complaints continued even after the government explained it had not perfected title to the seized assets because of court challenges by Andy Bowdoin. Although the government now holds title to the assets, an appeal filed by Bowdoin in one of the forfeiture cases — and the prospect of a Bowdoin appeal being filed in a second case — means that restitution could be delayed even longer, prosecutors said.
Some Golden Panda Ad Zone members positioned new surf programs as a means by which ASD and Golden Panda members could recover losses. Like Surf’s Up, entire threads went missing at the Golden Panda Ad Zone forum.
One thread that went missing pertained to a surf program purportedly operated by ASD Chief Executive Officer Juan Fernandez after the ASD seizure. Some Golden Panda Ad Zone members used religion in their sales pitches.
Religion also was an element in ASD pitches. ASD President Andy Bowdoin told a crowd assembled at a company “rally” in Las Vegas that he thanked God for making him a “money magnet.”
Prosecutors said Bowdoin family members and at least one insider embarked on a spending spree less than two weeks after the Las Vegas rally concluded on May 31, 2008, purchasing cars, jet skis, a boat and haul equipment — and retiring the $157,000 mortgage on the Tallahassee home of George and Judy Harris.
George Harris is Bowdoin’s stepson. Members later said he was the co-owner of the AdViewGlobal (AVG)Â autosurf, which crashed and burned in June 2009, after launching in the aftermath of the ASD seizure and in the weeks after a key court ruling went against ASD.
Some members of the Golden Panda Ad Zone also pitched AVG, despite everything that had happened to ASD, Golden Panda and a related surf known as LaFuenteDinero. There were reports later that at least $2.7 million was stolen from AVG, but the reports have not been confirmed.
After AVG announced a suspension of cashouts last summer and exercised its version of a “rebates aren’t guaranteed” clause, the surf said that, if the program restarted, an “80/20” program would become mandatory.
AVG pitchmen started out by saying the surf paid about 1 percent a day — or 365 percent a year — an amount the Golden Panda Ad Zone pitchman described as reasonable and sustainable for autosurfs in general.
The claims were made despite the fact that prosecutors had laid out a case against ASD that its 1 percent daily payout rate was unsustainable and that the surf was insolvent.
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.â€
“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.
If a thousand people tell you the autosurf they’re promoting is the “real deal” and that they’ve done their “due diligence” — they are lying.
If you believe them, you are setting yourself up to be fleeced and perhaps even dragged into court, perhaps as a reluctant victim or perhaps even as a defendant in a fraud case.
If you promote the surfs, email prospects, attach your referral URL to forum and web posts, set up forums to pimp these miserable businesses, accept commissions, provide strategic advice or an “earnings calculator” or spreadsheet, tell people to “call” you for details, maintain a list of surfs that are “working” and surfs that are not, defend the surfs in forums, repeat Garbage In, Garbage Out (GIGO) from the program owners and claim you had no ill intent when the surf failed because you were relying on the assertions of your upline sponsor or the program owner, well, you are asking for trouble.
The SEC told you that three years ago with the 12DailyPro prosecution and the follow-up prosecutions of Phoenix Surf and CEP.
And the U.S. Secret Service told you that almost 18 months ago with the prosecution of AdSurfDaily, Golden Panda Ad Builder and LaFuenteDinero. Moreover, the President of the United States and the Attorney General of the United States told you that last year with the creation of the Interagency Financial Fraud Enforcement Task Force.
Plan to defend your surf participation on the grounds people are free to make up their own minds and that the government has no right to interfere with commerce? Congratulations. You’ve just provided aid and comfort to securities fraudsters, narcotics traffickers, drug dealers and people engaged in human trafficking.
That’s their argument, and that makes you their intellectual soulmate. It also was the argument for slavery in the 19th century and earlier. Society rejected the argument long ago. It was far too taxing on the intellect and the human soul to be assigned any continuing credibility. The poison you deliver through your Ponzi is at least the equal of the poison the man hiding in the shadows of the school yard wants to deliver to your child.
Selling a Ponzi? You are selling people into financial bondage. You might as well sell human beings to the highest bidder on Public Square: Ponzi = Slavery To Money Lost. That’s what you’re selling, and it consumes human souls.
Willful Blindness
Still an autosurf player? There you are, still ignoring information published in the open, still flailing, still pimping, still telling people this one is “different,” still pretending that the enterprises are wholesome or a “game” or a nontraditional investment, still persuading yourself daily that there is no way that any of the money gathered by these schemes could fall into the hands of people who’d sooner drop a bomb on your office than assign you or your family members and friends any worth as human beings.
Perhaps you’re even signing your emails with a “God Bless” or a religious reference. Maybe you’re even including a disclaimer of some sort, perhaps not recognizing that you’re setting the stage to be labeled an affinity fraudster in addition to being labeled a financial fraudster — and providing investigators the evidence of “consciousness of guilt” by all the ducking and weaving and dancing you’re doing in your bid to find words to insulate yourself from liability.
“God bless” makes you look like a crook in the context of autosurfs and HYIPs. The disclaimer makes you look like a common fraudster who’s made a cold calculation and arrived at the conclusion you’re smarter than the cops and the regulators.
You likely haven’t seen a disclaimer along these lines, but here is what the standard disclaimers mean — no matter how they’re dressed up, no matter how polite the language:
I am a common fraudster, but I’d like you to think I’m an “industry” expert and a thoughtful sponsor. Basically I’m a parrot: I repeat what the program owners tell me. Usually I’m better with words than they are, so I dress it up. I’m smart enough to know that no real due diligence is possible with these things. They don’t publish financials. They all use offshore payment processors. There is no real way to check on any financial claims. I got “paid” and others got “paid” is good enough for me. I’m willing to take the risk that the money generated by the surfs will be used for peaceful purposes, rather than building bombs.
Every autosurf (and HYIP) I’ve pitched has failed. Some of the operators are the subjects of criminal actions and lawsuits filed by the government and members of the surfs. Some of the participants had criminal records, had been arrested for felonies, had been charged civilly with securities fraud or had been sued for other wrongdoing. I didn’t bother to tell you these things because I didn’t really know and, besides, it was not my job to do the research. My job is to be willfully blind. My job is to show you what’s out there and let you make up your own mind — you being an adult and thus free to make your own choices. I just want your money.
Don’t come crying to me if the surf fails after you’ve signed up under me. I’m a victim, too, but I won’t whine about it. Too much risk of getting caught. Stick with me and we’ll become victims in one scheme after another. For now, I’ll make the most money because my list is bigger than yours and I run a forum and am an active participant in other forums. Follow my lead. Build your surf list. Start a forum — and you can be a victim just like me!
You are on thin ice for even participating in a surf. This ice becomes thinner yet if you make the decision to become a pimp. You could find yourself all alone — in need of an attorney.
Under The Microscope
Have you read any of our coverage of the alleged Trevor Cook/Pat Kiley Ponzi scheme in Minnesota? We have published a number of stories demonstrating that local communities are paying close attention to the Ponzi players in their midst. Neighbors and local cops are putting the alleged schemers under the microscope.
Cook was videotaped in a grocery store after the Ponzi allegations surfaced because a loss-prevention specialist thought he just might be using the store to deplete assets of the receivership estate. His wife also was videotaped. The 71-member police department in Eagan, Minn., contacted the receiver in the case to report Cook was using a credit card after his assets were frozen.
The general public and its representatives have connected the dots autosurf and HYIP promoters refuse to connect, let alone acknowledge: Ponzi = Pain, and Ponzi = Scrutiny — even by the local cops and grocers and retailers.
Trevor Cook now has been jailed for contempt of court. A federal judge has ordered him to turn over tens of millions of dollars investigators have traced to the alleged scheme. Jamie Solow was ordered to jail in Florida for trying to hide assets in the Cook Islands in another fraud scheme.
Still undecided on where you stand on the issue of autosurfs and HYIPs? Ask yourself if you want to be videotaped when you go into the store to buy a loaf of bread — or videotaped as you return to your car. Ask yourself if you want to be sitting in court watching a video produced by a camera that even captured the numbers on your license plate.
That’s how much regard society has for Ponzi schemers these days. If you get named in a Ponzi complaint, you’re going to be on TV, in the newspapers, on the radio, on the Internet. You’re even going to be on the video the store detective is shooting because he figures you’re up to no good.
And if you are promoting autosurf and HYIP schemes today, you are sticking out like a sore thumb. You may be putting your freedom at risk because you cannot say no to the money and continue to believe that, if there’s a hole, you can wiggle out of it with your command of language or by playing the victims’ card.
You are not a victim if you are continuing to promote autosurfs and HYIPs. You are a perpetrator.
‘Offshore’ Beacon Signals The Crime
Ever receive a pitch highlighting the advantages of an “offshore” surf or HYIP enterprise? The people who send you such pitches want you to think that “offshore” equals “safe.” You should regard such pitches as clear evidence you are being scammed by a criminal, one who is willing to lie to separate you from your money and perhaps even make you part of a court case.
The three so-called AdSurfDaily clones — BizAdSplash, AdGateWorld and AdViewGlobal — all have tanked. Each launched in the aftermath of the federal seizure of tens of millions of dollars from ASD. Each domain name for the clones was registered after the seizure. Each of the clones highlighted “offshore” locations. Promoters preached the gospel of having learned from ASD’s mistakes.
Like a bunch of Stepford children, ASD members lined up to promote the clones. The clones filled their “membership” rosters with ASD members looking for a way to retrieve their ASD losses.
Andy Bowdoin put some ASD members in desperate straits. All three of the clones traded off that misery, positioning themselves as cures for what ailed ASD, while they also benefited from Bowdoin’s antigovernment missives. He fanned the flames, told the troops that the U.S. Secret Service — the agency that guards the President and the Treasury — was comprised of Nazis and terrorists responsible for losses 30 times greater than the 9/11 losses.
We’re of the mind that very few true BAS, AGW and AVG victims exist. There is good reason to believe that most of the earliest members of the clones also belonged to ASD. Their participation in the clones speaks of a willful blindness — and also of a desire to enrich themselves by trading off the misery of those who would come later.
It is particularly galling — almost galling beyond measure — that some of the earliest members of the clones were complaining about “slow” refunds in the ASD case. They were perfectly willing to see themselves as ASD “victims” if it meant getting back a share of their money from restitution proceeds. At the same time, they were perfectly willing to rail against the members of law enforcement who stopped the ASD scheme from mushrooming — all while they were trying to help the clones mushroom to pocket commissions and make up for ASD losses.
Those positions are irreconcilable. They speak compellingly of egregious intent to defraud.
Looking for your BAS, AGW or AVG money? Good luck. It could be in the pocket of an insider or a serial promoter. It could be in any number of offshore banks or payment processors — or it could be hidden practically anywhere. The cash is not in plain view, to be sure.
We sincerely hope the investigators dug down deep into the filthy laboratories of these schemes — and just observed and observed and observed and interacted with the “players” undetected, using the intelligence they gathered to set the stage for a spectacular autosurf and HYIP takedown to come.
In the near term, members of BAS, AGW and AVG who also were members of ASD should be excluded from the proposed ASD restitution fund. The days of willful blindness and wink-nod need to come to an end.
EDITOR’S NOTE: This list summarizes several programs pushed by members of AdSurfDaily, a Florida company implicated in an alleged $100 million Ponzi scheme. In some cases, the programs were pushed prior to the seizure by the U.S. Secret Service in August 2008 of 15 bank accounts linked to ASD or Golden Panda Ad Builder, one of the companies implicated in the ASD scheme. Each of the programs listed below came to a dubious end or continue to exist in an unclear, shadowy form. This list is presented in no particular order and does not include every HYIP/autosurf pitched by ASD members.
UPDATED 3:16 P.M. ET (U.S.A.)
Gold Nugget Invest (GNI): Collapsed Friday. HYIP. Government of Belize issued warning in November. Ownership hidden behind proxy. Business model unclear. Presented as betting arbitrage, but perhaps was involved in forex. Advertised payout of 7.5 percent per week. Possibly linked to European banking investigation. Changed rules on the fly. Still collecting money after “Re-organization.” Purportedly launched in October 2006, the same month ASD was preparing for launch.
Genius Funds/Cash Tanker/Saza Investments: Pushed by ASD member “joe” in a post on the ProASD Surf’s Up forum just prior to collapse of GNI. CashTanker, which used a graphic depicting Jesus, now has tanked after advertising payouts of 2 percent a day. “joe” pitched GNI, Genius Funds, Cash Tanker and Saza Investments in an egg-themed promotion in which the word “egg” was used in domain names that redirected to the HYIPs. “joe’s” egg-themed domain that redirected to Cash Tanker now redirects to a program called PTV Partner, an HYIP that bills itself “The Ultimate High Yield Asset for your Financial Portfolio!” “joe’s” egg-themed pitch was based on the screaming notion that “ALL MY EGGS ARE NOT IN ONE BASKET. I MAKE $2000.00 A WEEK.†A street address for the egg-themed domains corresponds to an address in a federal lawsuit involving cell-phone trafficking.
Regenesis 2×2: Matrix in Seattle area. Records seized by U.S. Secret Service in July 2009. Operators kept under surveillance for five weeks. Multiple search warrants issued. Discarded records found in Dumpster. Sold “commission centers†for $325. Touted itself the “THE ECONOMIC STIMULUS PLAN FOR YOU.†Site appears to have been registered behind a proxy in Europe. Jeffrey William Snyder, one of the individuals kept under surveillance, was a convicted felon on probation for a previous securities scheme.
GoldenPandaAdBuilder: So-called “Chinese” version of ASD. Assets seized in two forfeiture complaints in ASD case. Operated by Clarence Busby of Georgia. Records in now-dismissed RICO lawsuit against Busby identified him as “Rev.” at least 120 times. Busby was implicated by SEC in 1990s in three prime-bank schemes that promised enormous payouts. Purportedly became Golden Panda president after going fishing with ASD President Andy Bowdoin in April 2008. Federal judge ordered forfeiture of more than $14 million from Golden Panda in July 2009. Busby now purported “chief consultant” of BizAdSplash (BAS). Ceased payouts in July 2009, after declaring “crisis” and claiming members were overpaid. Went offline. Returned online. Went offline again for about two weeks during 2009 Holiday season. Now back online.
BizAdSplash (BAS): (Also see GoldenPanda entry above.) BAS launched in aftermath of seizure of assets in ASD/GoldenPanda case. Assets seized in civil complaints in ASD/GoldenPanda case total about $80.52 million. Clarence Busby purported to be chief consultant of BAS. BAS touted purported offshore registration in Panama. Georgia corporation records show version of surf’s name used address of UPS Store No. 2644 in Kennesaw, Ga.
Noobing: Pitched as alternative to ASD after seizure. Noobing targeted deaf people. Deaf member says she reported Noobing to FBI and sheriff’s department in California. There are recent suggestions that deaf members also reported Noobing to SEC. FTC and attorneys general of Minnesota, Kansas and North Carolina joined in suing Affiliate Strategies Inc. (ASI), Noobing’s parent company, in alleged scheme offering guaranteed government grants from economic stimulus funds. Illinois now has joined the FTC action. Original lawsuit filed in July 2009. Like ASD, ASI owned a jet ski. Court-appointed receiver sold it at auction. Receiver performed a preliminary exam of Noobing’s records and determined surf was upside down by approximately $550,000. Noobing gathered money in aftermath of seizure of ASD’s bank accounts. Surf slashed payouts in early 2009, citing unclear ruling in ASD case. Site offline since FTC lawsuit, which did not name Noobing.
DailyProSurf (DPS): DPS is a largely unknown and mysterious surf site registered by ASD President Andy Bowdoin in August 2006, about two months prior to the formal birth of ASD. Records suggest DPS operated prior to registration, although its ownership was unclear. (NOTE: The story in the DPS link in this paragraph also contains information on 12DailyPro and PhoenixSurf, two surfs sued successfully by the SEC.)
AdVentures4U (ADV4U): Surf tanked in August 2009. Reportedly had more than 60,000 members. Members identified Steve R. Smith as owner. Smith also purported owner of venture called TradingGold4Cash. In confusing note to ADV4U members, Smith purportedly said his family received threats. Used ASD-like “rebates aren’t guaranteed” excuse upon payout suspension. Urged members not to contact payment processors. Site reportedly conducted business with hotmail address.
CEP: Judicially declared Ponzi scheme. Smashed by SEC. ASD once advertised it accepted funds through CEP Trust, the payment processor associated with the CEP Ponzi scheme.
MegaLido: Pushed by ASD members in aftermath of seizure of ASD’s assets and positioned as a safe, “offshore” alternative, MegaLido tanked late in 2008, during the Christmas season, a few months after the ASD seizure. MegaLido purportedly had 27,000 members. MegaLido might have had a tie to Instant2U, another surf that tanked during the 2008 Holiday season. “MegaLido Rocks!†one ASD promoter blared, noting excitedly that it paid 12 percent a day and “It’s Offshore!†Instant2U advertised 14 percent a day.
Frogress: Pitched by ASD members in aftermath of seizure. Frogress tanked in January 2009, just after the Christmas holiday in 2008.
DailyProfitPond: Another surf pitched by ASD members in aftermath of seizure. DailyProfitPond tanked in December 2008, in the days leading up to Christmas. One DailyProfitPond promoter said it was possible to start with $12 and turn it into $12,000. The “return†was listed as 150 percent over 30 days.
AdViewGlobal (AVG or AVGA): Surf with ASD/Bowdoin ties. Formally debuted in February 2009, with a push from the now-defunct Pro-ASD Surf’s Up forum and ASD members. Tanked in June 2009 after collecting untold millions of dollars.
Perhaps one of the most bizarre autosurfs ever to enter the “industry.” Switched to “private association” structure after reportedly meeting with felon convicted in a 1990s securities scheme. Cited U.S. Constitutional protection despite purported headquarters in Uruguay.
AVG disclaimed any ties to ASD, despite fact its CEO was a former ASD executive who submitted a sworn affidavit in the ASD case. Issued news release disclaiming ASD ties; release was signed by an ASD employee who had testified in federal court for ASD in 2008. Said the fact AVG’s graphics appeared on ASD-controlled website was “operational coincidence.”
Announced bank account “suspension” in March 2009, blaming it on members who wired too many transactions in excess of $9,500. Announced CEO resignation, saying CEO would remain in “accounting” department. Announced new wire facility as done deal in May 2009. Company it identified as wire facilitator issued public denial, suggesting AVG was trying to funnel money to itself through a shell company.
Shell company operated by man with two large bankruptcy filings, including one in which an address listed as an apartment was the address of a mail drop. Purported AVG “compliance” department head was sued twice in 2008 for noncompliance with federal law. AVG claimed to own eWalletPlus payment processor. Actual eWalletPlus ownership far from clear. At least two people close to AVG money had spectacular bankruptcy filings. Andy Bowdoin, whom members later said was AVG’s silent head, was arrested for felony securities violations in the 1990s and entered guilty pleas.
AdGateWorld (AGW): Now-defunct surf launched after ASD seizure. Later purportedly sold to interests in the “Middle East.” Claims cannot be verified. AGW linked to ASD member Jack Schrold, a Florida attorney once suspended from the Florida bar for misconduct. Schrold was sued successfully by the FTC for the actions of his credit-repair firm, and also was convicted separately of knowledge of the commission of conspiracy and wire-fraud. AGW announced its death as “End of Dream.” Blamed members in announcement: “This honest and legitimate approach using the advertising rebate model apparently did not meet the expectations of the herd mentality.â€
PaperlessAccess: Mysterious upstart surf. ASD President Andy Bowdoin appeared in a video for Paperless Access in 2009, after the ASD seizure. Video appeared online in March 2009 — during time frame in which AVG was announcing bank-account suspension and the departure of its CEO. PaperlessAccess positioned as way for ASD members to regain money seized by the government. Bowdoin did not identify the owners of Paperless Access, describing them only as a small group of people. Nor did Bowdoin mention that the government was establishing an ASD refund program.
PremiumAdsClub (PAC): Tanked in February 2009. Members said it collected money right up to the end.
AggeroInvestment: Had PAC ties. Advertised 60 percent a month, plus bonuses. Collected money to the bitter end.
QBusinessSolution: Surf with purported ties to former ASD executive Juan Fernandez, who took the 5th Amendment in the ASD forfeiture case. # # #
You’ve seen the ads or heard the pitches trying to persuade you to put money in “offshore” ventures such as the AdViewGlobal, AdGateWorld and MegaLido autosurfs. You’ve been told they were safe. You’ve been told the people who run them are out of the reach of U.S. securities regulators and law-enforcement agencies.
And you’ve been told your investment, which the surf purveyors call an “advertising” purchase, provides shelter from the FTC, the SEC and state attorneys general.
Don’t tell John and Marian Morgan of Florida that “offshore” means “safe” and that “offshore” provides a blanket of protection from law enforcement.
And don’t tell it to Jeffrey Lane Mowen, either.
John and Marian Morgan were charged by the SEC in June with running a prime-bank scheme. They skipped the country rather than appear for a hearing in July, first going to Europe and later to Sri Lanka.
Guess where they are now?
John and Marian Morgan are in separate cells in a U.S. jail. In addition to the SEC’s civil charges, they now face criminal charges after being indicted by a federal grand jury. They did not outmaneuver the SEC. They did not outmaneuver the U.S. Marshals Service. They did not outmaneuver the FBI. They did not outmaneuver the IRS. They did not outmaneuver Interpol.
Nor did John and Marian Morgan outmaneuver the government of Sri Lanka. They were arrested and jailed on the island, which is situated about 20 miles off the southern coast of India, in August. Sri Lanka deported them, and the United States brought them home earlier this month.
It’s big news in Sarasota — and it should be big news among the autosurf or forex/HYIP schemers who are telling you the United States is powerless to act against “offshore” enterprises or people inclined to start a get-rich-quick program and then scurry offshore one step ahead of what surf promoters derisively describe as the “sheriff” or “Big Brother.”
Do yourself a favor and read this story in the Sarasota Herald Tribune. Longtime opponents of the autosurf “industry” — in this upside-down world, the opponents are called “naysayers” and the Ponzi advocates are called “leaders” — will recognize the utter absurdity.
Sadly, though, most of the “leaders” likely will be too busy “leading ” the troops to even bigger and better catastrophes to take the time to read it.
Or they simply won’t care because leading people into catastrophes pays too well.
Eight U.S. Senators have introduced a resolution calling for banking sanctions against the Caribbean island nation of Antigua for stonewalling in the Ponzi scheme investigation of Allen Stanford.
The senators said Stanford might have lent the Antigua government “at least” $85 million before the alleged scheme collapsed earlier this year and that the money “presumably came from Stanford investor funds.”
Stanford is accused by U.S. regulators and criminal prosecutors of presiding over a multibillion-dollar Ponzi scheme through the sale of CDs. He is jailed in Texas awaiting trial.
The resolution calls on the United States to use its voices in the International Monetary Fund and the World Bank “to oppose making any loans to the Government of Antigua and Barbuda until that Government cooperates with the United States and compensates the victims of the Stanford Financial Group fraud.”
“Instead of stonewalling efforts to recover assets linked to the scam perpetrated by Allen Stanford and his firm, the government of Antigua and Barbuda should join U.S. and international organizations in trying to find some measure of justice for victims,” said Sen. Thad Cochran, R.-Miss. “Government officials in Antigua and Barbuda must understand that their lack of cooperation is unacceptable.â€
A Democrat — Sen. Jeanne Shaheen of New Hampshire — joined seven Republicans in introducing the resolution.
One Republican said Antigua and Barbuda were acting in “absurd” fashion.
“The Ponzi scheme perpetrated by Allen Stanford cheated thousands of people, many of them in the United States, out of their investments,†said Sen. Richard Shelby of Alabama.
Shelby is ranking Republican on the Senate Committee on Banking, Housing and Urban Affairs.
“It is essential that to the extent possible these victims get their money back,” Shelby said. “It is absurd that the Government of Antigua and Barbuda is standing in the way of helping victims, while also holding out its hand for funding. This resolution makes clear that the United States will not accept such behavior.â€
A Mississippi Republican agreed.
“Thousands of people have been victimized by the Stanford Ponzi scheme, including many who lost their life savings,†said Sen. Roger Wicker. “The cooperation of the Antigua government is essential to helping the victims of this fraud, but this assistance has been consistently denied. It is completely unacceptable for Antigua to receive any loan from the IMF and the World Bank, both of which receive significant funding from U.S. taxpayers. The American government needs to let it be known that this lack of cooperation is not acceptable. This resolution will send that message.â€
The alleged Stanford Ponzi sparked a banking crisis that rippled across the Caribbean and into Central and South America. At least one autosurf made a veiled reference to the crisis in February.
BizAdSplash was one of three surfs that came to life in the months following the seizure of funds tied to AdSurfDaily Inc., a surf registered in the United States and accused of running a $100 million Ponzi scheme.
One of the key sales points of BizAdSplash was its purported offshore location. Two other surfs — AdViewGlobal and AdGateWorld — also bragged about being offshore. Promoters for the surfs said the offshore locations provided protection from the SEC, the IRS and state attorneys general. Promotions for the new surfs repeatedly referenced ASD.
“We want to let you know that even though our banks in Panama are closed for the next day and half, the payment processors are NOT CLOSED,†BizAdSplash said on Feb. 24. “You can still buy Ad Packages through your chosen payment processor. You will get your 100% match today and will continue into next week.
“So,†BizAdSplash continued, “if you purchased new Ad Packages yesterday from outside your Balance, you received a 100% matching bonus.
“This 100% matching bonus will continue on today, through the weekend and on through Friday, March 6th!!!†the surf exclaimed.
On Feb. 27 — just three days later — BizAdSplash told customers it was ending its affiliation with StrictPay, a payment processor with Panamanian ties.
The AdGateWorld (AGW) autosurf has gone offline and has issued a statement that blames members for having unrealistic expectations.
“The original developers of the AdGate network never created false expectations or gave rebates that were not completely justified by revenues,” AGW said. “This honest and legitimate approach using the advertising rebate model apparently did not meet the expectations of the herd mentality.”
AGW did not explain why it felt the need to defend the purported previous ownership group, while blaming participants for the surf’s fate.
AGW announced weeks ago that it was selling itself to an unnamed ownership group in the Middle East, although there was no way to confirm a sale had taken place. The announcement of AGW’s demise was equally vague, claiming that the surf had changed hands about 60 days ago, but not identifying either the new owners or the old ones.
Jack Schrold, a Florida attorney and member of AdSurfDaily, was instrumental in the launch of AGW. Schrold once was suspended from the Florida bar for misconduct, has been prosecuted by the Federal Trade Commission for the actions of his credit-repair firm, and was convicted separately of knowledge of the commission of conspiracy and wire-fraud.
The adgateworld domain name was registered Aug. 18, 2008, less than two weeks after the formal seizure of ASD’s assets. The adgateworld site at one time included ASD’s name in its Terms of Service. Schrold pitched ASD to members of the military.
“Our ownership group purchased the AdGateWorld properties approximately 60 days ago,” AGW said in its shutdown announcement. “At that time we knew we were getting involved with a fluid situation and a very unique business model. Unfortunately, we did not realize that other ‘similar’ sites continued to operate fly by night operations and dangle unreasonable bonuses and returns.”
AGW appeared to make a veiled reference to AdVentures4U (ADV4U) or perhaps MegaLido — another failed autosurf – in its shutdown announcement.
“No one cared because some other site was giving a ridiculous 14% a week until they collapsed after their supposedly record weeks!” AGW said.
AGW did not explain how its model, which featured advertised payouts roughly in line with the 1 percent daily advertised by ASD, whose assets were seized last year by the U.S. government in a wire-fraud, money-laundering and Ponzi scheme probe, was any more legal. Nor did AGW explain how a relatively “low” payout percentage in comparison with other surfs was any more legal than a higher payout rate when the issues are the sale of unregistered securities in a Ponzi scheme environment, with wire fraud and money-laundering also potentially in play.
Federal prosecutors view the lower payout percentage of some surfs as a bid to sustain the deception for a longer period of time so the “low” percentage surfs can rake in more money and fleece more people.
AGW also did not explain how its purported offshore location made the surf any more legal when selling “advertisements” to U.S.-based customers when the government plainly views the product as securities sold as investment contracts.
Two of the three so-called ASD “clones” — AGW and AdViewGlobal, which had close ties to ASD — now have failed.
A third so-called clone, BizAdSplash, operated by ASD/Golden Panda Ad Builder figure Clarence Busby, has encountered severe difficulties and is conducting a relaunch, according to videos featuring Busby.
Busby is a minister. One court document refers to him as “Rev.” at least 120 times.
“Today may be the end of one dream but all of us will succeed in the exciting projects that will be introduced shortly,” AGW said in its shutdown announcement.
