EDITOR’S NOTE: This story originally was published June 30. The PP Blog later encountered a database problem, which caused the site to go down and resulted in the temporary loss of some data. The data now has been retrieved.

This story is about a new site known as “WebsiteTester.biz,” but some background is in order.

It turns out that the April reports of the demise of the Golden Panda Ad Zone Forum, which changed its name to the Online Success Zone (OSZ), were premature.

OSZ now is back online — and a poster is pitching  “WebsiteTester.biz,”  which appears to be promoting itself as an upstart advertising “testing” platform.

Positioning surfing sites as testing platforms dates back at least to the CEP Ponzi scheme. Last summer, the failed AdViewGlobal (AVG) autosurf, which had close ties to the AdSurfDaily autosurf, was trying to reposition itself as an ad-testing site.

Just prior to going offline in April, OSZ was pushing Narc That Car and Data Network Affiliates, two highly questionable companies  whose membership roster includes people linked to alleged Ponzi or pyramid schemes. OSZ got its start as the Golden Panda Ad Zone forum after the U.S. Secret Service seized more than $80 million from ASD and its purported “Chinese” autosurf companion, Golden Panda Ad Builder.

During the summer of 2008, with ASD at its zenith and about to be accused of operating a Ponzi scheme, a predecessor to the INetGlobal autosurf also was coming online. INetGlobal eventually morphed into a surf site that largely targeted Chinese members, according to the Secret Service, which is investigating INetGlobal as its operator, Steve Renner, is in federal prison serving time for income-tax evasion.

The ASD and Golden Panda money was seized amid allegations of wire fraud, money-laundering, selling unregistered securities and operating a Ponzi scheme. A forfeiture complaint in the case alleged a conspiracy with unnamed participants, and ASD was sued separately under the federal racketeering statute by members who also alleged a conspiracy was under way.

Participants’ marketing of WebsiteTester.biz. occurs against the backdrop of a forceful statement by federal prosecutors in Illinois that virtually all HYIPs are Ponzi schemes. Autosurfs are a form of an HYIP program.  The business model of WebsiteTester.biz is unclear, and the company has not been accused of wrongdoing.

In the Illinois case, Pathway To Prosperity (P2P) was alleged to have operated a global Ponzi scheme that gathered more than $70 million and fleeced more than 40,000 people. Nick Smirnow, P2P’s operator,  has a criminal past dating back to at least 1979, including convictions for breaking and entering, driving the getaway car in a robbery and cultivating and selling drugs. He also told a colleague he was involved in a double homicide in Canada and claimed to have ties to organized crime in Ontario, according to court filings.

Posts on forums such as ASA Monitor, TalkGold and MoneyMakerGroup sought to sanitize the P2P scheme, authorities said. This important piece of information seems to have escaped the OSZ forum, which apparently continues to operate on the theory that HYIPs, autosurfs and cash-gifting programs somehow are a legitimate form of commerce.

Incongruities abound in the autosurf and HYIP universes. “WebsiteTester.biz,” the apparent new darling of Ponzi boards such as OSZ, has a domain that is registered behind a proxy. It is unclear if any of its early boosters even know who owns the company or could name a single executive or a board member. Because the site’s business model is unclear, promoters are pitching a program they know virtually nothing about.

The mere fact the “opportunity” is being pitched on the Ponzi boards shows, at a minimum, that promoters instinctively turned to the cesspools to drive business to the company.

On its website, Website Tester, which purportedly is in prelaunch,  says this (italics added):

“FINALLY . . . This is the business you have waited for so long:

“It is completely free, you earn through EVERYBODY who registers after you, even if you do not sponsor people; you must not sell or buy anything. Guaranteed!

“The faster you register, the more can be your potential income, even if you do nothing else than register for free . . .

“How does it work? – It’s simple!

“A market research company from the USA is searching for internet users all over the world, who get paid for testing websites and giving a short opinion. You also can earn up to 1,000 US$ per month working 1 to 10 hours weekly.

“Even if the job as a website tester is not for you, you can earn two passive incomes month after month.”

Excuse us while we vomit.

Based on information on the landing page of WebsiteTester, the upstart company appears to have a tie to an upstart, Las Vegas-registered company known as Alpha Market Research Inc.  Alpha Market appears to have a Twitter site from which it relentlessly links to self-produced news releases that are posted on PRLog.org, a free press-release distribution service.

Hey, did you see how the SEC described a scam yesterday that allegedly relied on Twitter and Facebook to help line up people to be fleeced in a securities swindle?

Here is a paragraph from one of Alpha Market’s PR gems:

“Global marketing is nothing but marketing done on national and international level and which involves understanding the similarities, dissimilarities and taking advantage of the opportunities to attain the goal.”

Here is another gem:

“When you buy something from eBay, Amazon.com or any online store, you’ve participated in e-commerce.”

Meanwhile, here is yet another:

“If you do not have a ghostwriter writing your blog content, then it means you will need to spend some time writing some blog posts.”

Separate from its news releases, Alpha Market says this (italics added):

“Potential clients who are disturbed by trifles during the ordering process are often unaware of exactly why. For you, the entrepreneur, the big questions remain: why did the potential client visit your website and why did they accept or not accept your offer?

Alpha Market Research, Inc. starts exactly at this point: we make your website available for thousands of AMR website-testers, assigned in groups of age and interest – this way we get detailed feedback with an honest evaluation of your website.

Like WebsiteTester.biz, AlphaMarketResearch.com is registered behind a proxy. The Alpha Market site was registered May 28, according to records. The Web Tester site was registered five days later, on June 2. Alpha Market’s Twitter site appears to date back to June 4.

The buzz about Website Tester also is occurring against the backdrop of the launch of yet-another surfing company: AdPayDaily (APD).

APD, which appears to have promotional ties to ASD and AVG, is running an AVG-like series of promotions that offer bonuses.

Interestingly, APD, which appears to have only about 550 members despite virtually nonstop flogging for weeks, now says members can send in as much as $10,000.

Website Tester, at the moment, appears just to be gathering names — and generating excitement by publishing the names of the latest registrants on the left side of its landing page. The names suggest the enterprise is attracting many people from outside the United States, but it is far from clear if anything about the company is real.

Here is how Pathway To Prosperity (P2P), operated by Nicholas A. Smirnow, was described by members of the indefatigable, Ponzi-pushing ASA Monitor forum in 2007:

“Just talked with Nick today on the phone,” one member said. “I always enjoy talking with him — honest and straightforward.”

“This one is a WINNER,” another crowed. “People, you don’t know what you are missing if you aren’t in this program.”

Here is how a member of TalkGold, another Ponzi-pushing site, described P2P:

“[T]his program will go a long way to bringing back stability to investment sites,” he wrote. “[T]his one you can trust 100% and also the admin Nick . . . come and join our happy group.”

Here is how P2P was described by a member of MoneyMakerGroup, yet another Ponzi-pushing site:

“[T]his is the kind of program that is needed,” the poster wrote. “p-2-p gives the little man a chance to invest and relax knowing your money will be safe at the end of the investment.”

And here, according to the St. Louis Post-Dispatch, is how the U.S. Postal Inspection Service and federal prosecutors described Smirnow after charging him yesterday with operating an international Ponzi scheme that gathered more than $70 million and fleeced more than 40,000 people:

“convicted burglar, robber and drug dealer who told a former employee that he was involved in a double homicide.”

Smirnow, believed to be on the lam in the Philippines, used aliases such as Nicolay Smirnow, Alexander Judizcev, Nicholas Kachura and Jeff Prozorowiczm. The scam spread across the world, and P2P shielded itself by using a website in the Netherlands and a company incorporated in the Turks and Caicos Islands.

Although the program pitched interest rates of up to 17,000 percent, a poster on ASA Monitor incongruously said, “This is not a HYIP — Nick does not believe in them.” Regardless, the same poster — despite his cheerleading — acknowledged he was worried “about the authorities getting in and shutting things down . . . but since it is not a site being heavily promoted like CEP and not so open, it may keep under the radar . . .”

CEP was yet another Ponzi scheme.

It has been an electrifying week for opponents of HYIP and autosurf frauds, who routinely are derided as “naysayers” by commission-grubbing pitchmen who spread Ponzi pain across the planet for a share of illegal profits.

On Tuesday, the SEC announced it had charged Mazu.com operator Matthew J. Gagnon, 41, of Weslaco, Texas, and Portland, Ore., with helping “orchestrate a massive Ponzi scheme conducted by Gregory N. McKnight . . . and his company, Legisi Holdings, LLC.”

The Legisi scheme raised about $72.6 million from more than 3,000 investors “by promising returns of upwards of 15% a month,” the SEC said.

Like Pathway to Prosperity, Legisi also was promoted on ASA Monitor, TalkGold, MoneyMakerGroup and other forums criminals and their shills frequent to separate people from their money.

A U.S. warrant for Smirnow’s arrest was issued yesterday — although Smirnow is believed to have been ducking Canadian authorities for months because of an investigation into his business practices.

Smirnow now joins Robert Hodgins — yet another international fugitive allegedly associated with the drug and HYIP trades — on the lam.

Hodgins, who provided debit cards for the alleged AdSurfDaily Ponzi scheme and is believed also to have a tie to the PhoenixSurf autosurf Ponzi scheme and other autosurf and HYIP schemes, is wanted for helping a Colombian narco business launder money at ATM machines in Medellin and also for accepting $100,000 in purported drug proceeds for laundering money in the Dominican Republic.

INTERPOL is searching for Hodgins.

Read the Smirnow story in the St. Louis Post-Dispatch.

UPDATE 2:49 P.M. EST (U.S.A.) At a gathering of creditors today, Irving Picard, the trustee overseeing the liquidation of Bernard L. Madoff Investment Securities, said he could find no evidence that Madoff even purchased securities for customers in the past 13 years. Cash came in — and immediately went out — to sustain the Ponzi, Picard said. We’ve added a Madoff Discussion Topic at the bottom of this post.

Here, below, our earlier post . . .

This is a discussion thread for readers to share their views on developments in the autosurf world. Offer your opinions on any of the discussion topics below — or even all of them.

First, however, some news:

The bankruptcy judge in the CEP Ponzi scheme case has ordered some large judgments against “winners” who were sued in adversarial proceedings by William Perkins, the CEP receiver.

Judge James E. Massey even ordered interest be paid on the judgment amounts. “Winners” who are now losers include:

• Chris Barany: $225,702.90
• Earl Reed: $146,677.50
• Ginger Phillips Reed: $103,339.70
• Jessica Phillips: $44,821.85

As a side note, our research suggests that AdSurfDaily President Andy Bowdoin was a participant in the CEP Ponzi scheme. ASD once advertised it accepted payments from CEP Trust, the failed payment processor owned by the operators of the CEP Ponzi scheme.

DISCUSSION TOPIC: If you’ve been following the ASD case, you’ve read that ASD was an exciting, new business model and Andy Bowdoin a genius. But how could that be true if ASD was a member of other autosurf Ponzi schemes?

Ponzis And The Deaf

As reported on PonziNews, the SEC has taken action against a Hawaii-based firm that allegedly ran a Ponzi scheme targeting the hearing-impaired communities of the United States and Japan.

Investigators say Billion Coupons Inc., run by Marvin Cooper, made affinity fraud part of a $4.4 million Ponzi scheme.

“A Ponzi scheme targeting members of the Deaf community is particularly reprehensible,” said Rosalind R. Tyson, director of the SEC’s Los Angeles Regional Office.

This week, a surf came under fire in forums for slashing payouts to customers. The surf, known as Noobing, targeted the deaf at Deaf Expo events in 2008 and in YouTube videos.

DISCUSSION TOPIC: Given customers’ claims of “bait and switch,” the fact Noobing launched after the government seized ASD’s assets, Noobing’s statement that people should be angry at the government — not Noobing — for its decision to slash payouts, and the targeting of deaf people, is an investigation warranted?

Andy Bowdoin

Two months have passed since prosecutors filed a second forfeiture complaint against assets tied to ASD. The complaint alleged that ASD funds were used to fuel big spending by Bowdoin family members. It further alleged that $1 million purportedly was stolen from ASD by “Russian” hackers and that Bowdoin didn’t file a police report. Meanwhile, it also alleged that money in addition to what “Russian” hackers took also was stolen — and that Bowdoin didn’t file a police report about those thefts, either.

ASD said it had more than $1 million on deposit in Antigua, which this week became the center of an international financial scandal involving billionaire Allen Stanford, the biggest banker on the Caribbean island. Customers flooded banks in the tiny nation to withdraw money, and the government of Antigua appealed for calm.

Last summer, Bowdoin told a federal judge that ASD needed money to operate and asked her to free up seized funds. But Bowdoin didn’t tell the judge about the money in Antigua until after prosecutors pointed it out. After prosecutors revealed the presence of the Antigua money, Bowdoin explained in a conference call that the cash — at least $500,000 of it — was a deposit so ASD could process credit-card orders.

But the account was in a name other than ASD.

DISCUSSION TOPIC: Did Andy Bowdoin get the money out of Antigua before the onset of the banking crisis? Why was the money in a name other than ASD’s if it was used to process credit cards for ASD? Why didn’t Bowdoin repatriate the money and use it to pay ASD employees and restart the company?

Surf’s Up

On Nov. 27, ASD offered the Surf’s Up forum its official endorsement. This was several days after ASD lost the evidentiary hearing and several days before major prelaunch buzz for AdViewGlobal (AVG) began.

With ASD’s endorsement in hand, some of the Surf’s Up Mods and members started a new site on ning.com to promote AVG. For its part, AVG says it has no ties to ASD, even though the two companies share a common executive, a common customer-service representative, and AVG’s graphics once appeared on a webroom operated by ASD — and AVG listed its street address as ASD’s street address in Quincy.

DISCUSSION TOPIC: Should Surf’s Up have accepted the endorsement? Does it make sense to promote yet-another surf, especially when the surf has clear ties to ASD?

BizAdSplash

Despite all the upheaval in the financial world — and despite the fact the Feds are working harder than ever to expose Ponzi schemes — BizAdSplash says things are going just fine. Yesterday it announced a new promotion: 100 percent matching bonuses for customers and sponsors.

Here is the announcement:

Over the past week we have had a number of you contact us about your initial deposit and that you only purchased a small amount of Ad Packages just to test the system. Now you are ready to make a larger purchase. Your question is can we get the 100% match or discount on the cost of a larger Ad Package. Biz Ad Splash has agreed to open a small window for this 100% additional match. Any new purchases made from outside the system will be given the same benefit as your initial purchase and will be given the 100% match along with the sponsor match. This is only on purchases made on February 23 through February 28. This is a tremendous opportunity for all our Biz Ad Splash advertisers.

Thank you for your patience while we are in our beta launch. We value your participation in Biz Ad Splash and we look forward to exceeding your expectations.

The Biz Ad Splash Team

DISCUSSION TOPIC: Is BizAdSplash, which launched only a short time ago, already hurting? Is it desperately trying to collect cash to survive? How can it possibly fund payouts for customers and sponsors when the 100 percent matching bonuses create so much extra liability?

Will the surf hide behind “rebates aren’t guaranteed” if things go South? If that happens, will surf participants still think “offshore” surfing is the ticket to prosperity?

And how can any of the new surfs — BizAdSplash, AdviewGlobal, AdGateWorld — expect to thrive when they are fundamentally competing for the same business in a world in which many governments are going after Ponzi schemes with exceptional vigor?

Bernard Madoff

Trustee Irving Piccard now says that Bernard Madoff didn’t even purchase securities for customers in the past 13 years, instead taking incoming money to pay off older investors in a virtually pure Ponzi scheme.

DISCUSSION TOPIC: Given that Madoff escaped detection for years — and given that Allen Stanford appears to have escaped detection for years — are you worried that other Ponzi shoes may drop?

Back in August we began to cover AdSurfDaily Inc., a Florida company accused of being an illegal enterprise. Federal prosecutors said ASD, an autosurf, was selling unregistered securities by calling itself an “advertising” company and running a $100 million Ponzi scheme.

A sister site, LaFuenteDinero, was named in the same federal forfeiture complaint. So was GoldenPandaAdBuilder, a site reportedly conceived on a Georgia fishing lake as a “Chinese” option for ASD members. The site reportedly came to fruition after talks between ASD President Andy Bowdoin and Clarence Busby, who went on to become the operator of Golden Panda.

Golden Panda has officially dissolved its articles of incorporation and removed its claim to funds seized in the ASD probe. The case still is in litigation.

Since August, a number of other autosurfs have appeared, some positioning themselves as attractive alternatives to ASD. At least two of them — MegaLido and Frogress — already have failed.

We decided to keep a running chart of autosurfs. Names will be added over time, as readers contact us or we learn independently of their operations. One of the purposes of this chart is to get a sense about how many autosurfs are involved in litigation, are operating in troubled fashion or are operating freely.

Autosurf Roster (Updated Jan. 14, 2009)

The receiver in the CEP Ponzi scheme case has filed court papers to settle adversary proceedings against 14 participants who profited in the scam.

In court since July 2007,  the case is not fully settled. Litigation against other participants is ongoing. Dozens of lawsuits were filed against CEP members.

Settlement terms for the group of 14 appear to be generous.  Although each of the participants must hand over cash earned from the scheme, the proposed settlement amounts are only a percentage of what the receiver sought initially.

The receiver, forensic accountant William Perkins, has been working on the case since the beginning. CEP was accused by the Securities and Exchange Commission of running an autosurf Ponzi scheme that collected millions of dollars.

One CEP participant, for instance, will pay  $18,400 to settle a claim of $57,806, under the terms of the proposed settlement. Another will pay $20,000 to settle a $45,736 claim.

Settlement amounts were reached after negotiations with individual participants. No universal formula was applied, meaning some participants will pay a higher percentage of their gains and some will pay a lower percentage. One person who received $140,612 from CEP, for example, will pay $10,000 under the settlement.

Liberally viewed, the proposed settlement amounts seem small. But some CEP participants have declared bankruptcy. Others have had to sell their homes to return ill-gotten gains. All of them were thrust into a prolonged court battle because of their CEP participation.

AdSurfDaily, itself an alleged Ponzi scheme, once advertised it accepted payments from CEP Trust, the failed payment processor operated by the principals in CEP, Trevor Reed and Clayton Kimbrell.

View the proposed CEP settlement.

Under the proposed settlement, any person who fails to pay the settlement amount will be subjected to a judgment in the amount of their ill-gotten gains from CEP. Perkins sued to recover “preferential and fraudulent transfers” — in other words, the “profit” participants received from the Ponzi scheme.

Bernard Madoff

BLOG UPDATE 2:19 P.M. EST (U.S.A.): La Tribune, a French business newspaper, is reporting that a founder of Access International Advisors, a hedge fund with large sums invested with Bernard Madoff, has been found dead in his New York City office building.

Rene-Thierry Magon de la Villehuchet, 65, was found this morning. The French newspaper called it a suicide, as have other media outlets, but the medical examiner hasn’t listed a cause of death.

Here, below, our earlier post . . .

In the CEP autosurf Ponzi scheme case, a court-appointed receiver filed dozens of lawsuits against program “winners,” forcing them to return profits on the theory there can be no winners in an illegal enterprise. The receiver, William F. Perkins, placed CEP in bankruptcy and then methodically went about the task of clawing back money for the estate.

Perkins, who effectively is running CEP as a debtor-in-possession, has negotiated settlements with a number of winners.

Last month he triumphed over CEP’s owners, Clayton Kimbrell and Trevor Reed, in a civil trial for fraud and breach of fidiciary duty.

Judge James E. Massey ordered Kimbrell and Reed to return about $1.5 million in fraudulent transfers they made to themselves, family members, employees and other CEP principals.

Some of the clawback cases against CEP winners still are being heard, about 17 months after the initial filing. More than 20 trials against individual defendants are scheduled next month in U.S. Bankruptcy Court in Atlanta.

CEP was declared a Ponzi by a federal judge, while Madoff remains an alleged Ponzi operator who told authoritites that the Ponzi could amount to $50 billion in losses.  The July 2007 SEC complaint against CEP said about $12 million flowed through the firm in an illegal securities offering.

Perkins maintains a CEP website from which visitors may access all the court documents. It’s well worth a visit.

Talk in the Madoff case has turned to what the court-appointed receiver might do to recover cash. Owing to the size of the alleged scheme, things could get downright ugly. In theory, people who made withdrawals could be ordered to return them — and this group includes individual investors, money managers and charities.

Lawyers are apt to use terms such as “fictitious profits” and “fraudulent conveyance” to describe redemptions by investors before the Ponzi collapse. The prospects are horrifying because investors didn’t know anything untoward was occurring behind the scenes, and many of them likely have spent all or part of the money.

See this Bloomberg News story.

If the case follows the CEP model, Madoff and insiders — if any — could be forced to return illegal transfers. Prior to his arrest, Madoff said he wanted to distribute up to $300 million to employees. If such transfers were made — recently or in years past in the form of bonuses — it’s possible that the money could be ordered returned even if spent.

Ugly doesn’t even begin to describe the battles that could ensue. Charities that relied on Madoff to manage money used for good deeds and took dedemptions could be targeted to pay the money back. There is the potential for pain in many, many places, and it’s possible the clawbacks could go back six years.

Blinded to the reality that Ponzi schemes can have devastasting consequences, some autosurf supporters still are arguing that the government has no business sticking its nose in where it doesn’t belong.

Incredibly, an autosurf whose launch is set for next year has targeted nonprofits in early promotions. Promoters have suggested it’s a great way to publicize the business and get cash flow.

AdSurfDaily, which has ceased to operate in the wake of the government’s August seizure of nearly $100 million, promoted at least one nonprofit, funding it with $100,000 in “ad packs” and asking members to contribute.

“ASD President, Andy Bowdoin, has generously donated 100,000 ad packages to this organization,” the ASD Breaking News site said on July 5, about a month prior to the seizure.

ASD encouraged members to send donations for the charity to ASD headquarters and even to transfer “donations from your [ASD] Cash Balance.”