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  • REVISITING ADVIEWGLOBAL AND ‘ONEX’: Why Promoters Of Better-Living Global Marketing, Zeek Rewards, TelexFree And Profitable Sunrise Should Care About Scam History

    EDITOR’S NOTE: The PP Blog is back — after its most recent brush with death led to a suspension of publishing that lasted through all or parts of six days. You’ll read more in the days ahead about certain changes the Blog plans to implement to safeguard its right to publish, to improve revenue, to make it less reliant on a small group of dedicated readers to put out fires and to keep its archives open to the people who can benefit most.

    As for the editorial below: Some of it is based on “Government Exhibit G” and other government exhibits in the criminal prosecution of AdSurfDaily Ponzi schemer Andy Bowdoin. Exhibit G was filed on Aug. 13, 2012, four days before the SEC went to federal court in Charlotte, N.C., and alleged that the Zeek Rewards MLM “program” was a $600 million Ponzi- and pyramid fraud that had victimized hundreds of thousands of participants. Among other things, Exhibit G addressed Bowdoin’s participation as a silent partner in the AdViewGlobal reload scam. Another court document filed by prosecutors on the same day addressed Bowdoin’s participation in OneX, which prosecutors described as yet-another MLM-style scam in which Bowdoin had participated after the U.S. Secret Service moved against ASD in August 2008 and eventually seized more than $80 million.

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    The evidence sticker from "Government Exhibit G" in the criminal prosecution of AdSurfDaily Ponzi schemer Andy Bowdoin. (Red bar added by PP Blog.)
    The evidence sticker from “Government Exhibit G” in the criminal prosecution of AdSurfDaily Ponzi schemer Andy Bowdoin. (Red bar added by PP Blog.)

    Let’s talk about pollution and how it may be flowing to a bank near you:

    AdSurfDaily Ponzi schemer Andy Bowdoin used a secret hushmail address in 2009 to discuss a bank wire for $38,750 that was to be sent to an account at Regions Bank in Fort Lauderdale, Fla., to pay for servers and programming required by AdViewGlobal.

    AVG, as it was known, was an ASD reload scam that began to unfold in October 2008, just two months after the U.S. Secret Service began the process of seizing more than $65.8 million from at least 10 Bank of America accounts linked to ASD, according to government records.

    The Secret Service, according to court filings, also had its eyes on separate Bank of America accounts linked to an ASD-connected enterprise known as Golden Panda Ad Builder. Golden Panda was operated by Rev. Walter Clarence Busby Jr., a Bowdoin business partner and Georgia grifter implicated by the SEC 11 years earlier in three prime-bank swindles, including one that promised to pay interest of 10,000 percent. Some of the Golden Panda money also made its way into Bartow County Bank, a small Georgia bank that later failed, costing the Federal Deposit Insurance Corp. an estimated $70 million, according to government records.

    From this fact set, one can plainly see that ASD and related scams had caused polluted money to flow to Bank of America and Bartow — and that the noxious and ever-evolving ASD enterprise now had its sights on causing polluted money to flow to Regions. That’s three banks put in harm’s way by what effectively was an evolving ASD criminal enterprise.

    There were more.

    At least $413,018 in ASD-infected funds also had made their way into accounts at First National Bank in Ames, Iowa. Another $96,525 in polluted proceeds flowed to two accounts at Wachovia Bank. (The U.S. state in which Wachovia was used to stockpile $96,525 in fraudulent proceeds directed at an ASD member is unclear. What is clear, according to federal court filings, is that the ASD member allegedly was using ASD to promote a “multi-level marketing site that listed classified job postings” and that 17 checks from ASD were deposited into the Wachovia account on a single, fateful day.)

    That day was July 31, 2008.

    History shows that the Secret Service moved against ASD the very next day, Aug. 1, 2008, as a means of stopping the ASD Ponzi monster from sucking in any more cash and from polluting any more banks. The ASD member with the Wachovia accounts had “sponsored 6-8 people to get into the ASD system,” and somehow had managed to receive nearly $100,000 in tainted proceeds after paying ASD only $500 and working as a “consultant” to ASD “for a brief period,” according to court records.

    Because ASD used infected proceeds to pay members with accounts at banks across the U.S. spectrum of hundreds of institutions, each of those institutions became places at which wire-fraud proceeds were deposited. The total flow of fraudulent proceeds linked to Bowdoin and follow-up scams exceeded $120 million, according to federal court files.

    But it gets worse . . .

    At Least 2 Swiss Accounts Discussed In Exchanges Over Hushmail And Gmail

    Why not infect Europe with American Ponzi proceeds?

    This is the clincher, the one event that — in the context of other ASD-related events — shows the rampant criminality within the ASD enterprise and this particular wing of MLM. This criminality caused federal prosecutors to describe Bowdoin as a man who roped in at least 96,000 people in part by asserting that his “programs” reflected “God’s will.”

    Bowdoin, prosecutors said, indeed was the personification of a con man and affinity fraudster who “boldly continued or expanded his criminal conduct” even after the Secret Service raid in August 2008.

    Just two months later, in October 2008, Bowdoin and a former ASD insider held discussions aimed at launching AVG, the ASD reload scam that allegedly sucked in millions of dollars — in part by targeting ASD members all over again. The sources for this information are a government sentencing memo and  “Government Exhibit F,” filed on Aug. 13, 2012, four days before the SEC’s Zeek action and confirmation by the Secret Service that it also was investigating Zeek.

    Exhibit F is styled “Summary of AdView Global by T. Andy Bowdoin, Jr.” Precisely when and how the government obtained the document is unclear, but prosecutors say Bowdoin drafted it in “memo” form. Agents are known to have seized ASD-related computers. It also is believed that the government seized at least one AVG-related computer.

    The undated document features a narrative in which Bowdoin, despite the Secret Service raid of ASD and ongoing civil and criminal investigations, suggests he was still sticking to a cover story that ASD was an “advertising” company, not an investment company offering securities that paid a preposterous interest rate of 1 percent a day while magically constituting neither a Ponzi scheme nor an investment firm. In fact, according to the document, AVG hoped to ward off the U.S. government by establishing some sort of presence in Uruguay.

    Another part of the AVG launch plan was to attract “30 founders” in December 2008. In the Exhibit F document, Bowdoin also planted the seed that the nascent AVG MLM program had been vetted by “attorneys.”

    These unidentified “attorneys” purportedly had advised Bowdoin that prosecutors would not be interested in establishing whether the AVG upstart “was OK,” even if Bowdoin submitted an AVG business plan, according to Exhibit F. Bowdoin then moved forward with AVG, despite all that had happened at ASD. Both before and after the ASD debacle, according to assertions by prosecutors, Bowdoin claimed he had acted “on the advice of counsel” and therefore had done nothing wrong.

    “Bowdoin’s reliance on the ‘advice of counsel’ defense became a theme in both the civil and criminal litigation,” prosecutors advised a federal judge.

    It was a defense that failed miserably, as various entries on the public record show. And when Bowdoin got in trouble again — this time for promoting an alleged pyramid scheme known as “OneX” while out on signature bond in the ASD criminal case even as he asserted the OneX “program” had been vetted by attorneys and passed muster and that recruits could earn to the limits of their imaginations — Bowdoin again defaulted to an advice-of-counsel defense.

    This time, however, Bowdoin appears to have merely repeated false assertions that he’d heard from OneX or someone within OneX. The government responded by producing an affidavit from an attorney who’d performed work for OneX but never had drawn a conclusion the “program” was lawful and had never examined the actual business practices of OneX. The attorney swore in an affidavit filed under pain of perjury that the law firm through which he represented MLM clients “has never represented” Bowdoin. (The PP Blog is declining to identify the attorney, a partner in a Southern California law firm.)

    Back to AVG, the scheme Bowdoin helped launch before later trying to sanitize the alleged OneX pyramid scheme by claiming it had been scrubbed clean by attorneys: Bowdoin was to own two-thirds of AVG; the former ASD insider would own the remaining third, according to Exhibit F.

    Among other things, the document shows some of the fractured thinking and incongruities so often associated with HYIP scams. Despite the purported need for an offshore presence to ward off U.S. investigators, for instance, the document asserts that Gary D. Talbert, identified elsewhere as an ASD insider and one-time executive, had hired AVG “customer service people in the U.S.” (Bolding added by PP Blog.)

    Web records show that AVG had come out of the gate with two impossible (if not insane) propositions: The first was that AVG was just like the NBC television network, an absurdity on its face in that NBC doesn’t pay its advertisers to watch ads. Moreover, NBC, unlike the collapsed AVG, doesn’t operate a closed network in which only NBC’s advertisers and not the public at large can view ads. Nor does NBC try to recruit advertisers by telling them they’ll receive a dividend of 125 percent (or more) on their ad spend within a few months and that its advertisers can earn downline commissions two levels deep by recruiting competitors to advertise on NBC’s closed network.

    The second proposition was even more absurd: that AVG had nothing to do with ASD. The absurdity of this obvious lie was exposed before January 2009 even had ticked off the calendar. Indeed, after earlier asserting that AVG had no ties to ASD, the company — using a U.S.-based AVG customer-service rep who’d actually testified on ASD’s behalf in federal court —  announced that ASD’s Talbert was its CEO. If this weren’t absurd enough, AVG insisted through the former ASD member now working as a AVG spokesman that the appearance of AVG graphics in an ASD-controlled webroom was an “operational coincidence.”

    AVG went on to pile on the absurdities, according to court filings. In Exhibit F, the document prosecutors say was Bowdoin’s draft memo of his AVG reflections, members of Bowdoin’s family who allegedly benefited from ASD Ponzi proceeds are described as heroes who tried to save AVG from the thieves.

    With ASD’s Bowdoin’s knowledge, Talbert, according to Exhibit F, also purchased an Arizona “company named TMS” that owned a payment processor named “eWallet.” (Other records strongly suggest that the payment processor actually was named “eWalletPlus” and was operating from servers AVG was using in Panama.)

    “TMS used a bank in the Caribbean,” according to the document. The signatory on the Caribbean account somehow never was changed after the asserted change in ownership at TMS, and two former TMS associates allegedly stole nearly $2.7 million from AVG. The theft of nearly $3 million led to the collapse of AVG, according to the telling attributed to Bowdoin in the document.

    To date, the PP Blog has been unable to ascertain the truthfulness of the assertions about the thefts allegedly committed by the alleged former TMS insiders.

    What is clear, however, is that as much ASD money that could be found in August 2008 was seized. AVG then launched with cash that hadn’t been seized, and in part was targeted at ASD members.  AVG members then were left holding the bag, with the blame placed on former TMS associates.

    And something else is clear, which brings us to “Government Exhibit G”: AVG, the follow-up scam to ASD that involved Bowdoin and ASD insiders and alleged thefts of millions of dollars by outsiders, had at least two Swiss bank accounts.

    bowdoinhmail
    One of AVG’s Swiss bank accounts allegedly was discussed in this email between Andy Bowdoin and Gary Talbert. Bowdoin was ASD’s operator; Talbert was an ASD insider who allegedly became Bowdoin’s business partner in the AVG Ponzi scheme that sucked away millions of dollars. (Red lines inserted by PP Blog.)

    On Jan. 28, 2009, just days before AVG’s scheduled launch date in early February and less than six months after the Secret Service raid on ASD’s headquarters and Bowdoin’s home in Quincy, Fla., Gary Talbert used a Gmail address to email Andy Bowdoin at a hushmail address, according to Exhibit G.

    Talbert advised Bowdoin that an individual — presumptively one of the 30 AVG founders — had conducted a “Wire Transfer to AVG Swiss Bank Account” and needed assurances that it had posted. The inquiry about the asserted wire transfer appears to have been initiated by another AVG insider who’d emailed Talbert from his Gmail address to Talbert’s Gmail address. Through Gmail, Talbert then checked with Bowdoin at Bowdoin’s hushmail address, instructing the ASD patriarch that someone wanted to “verify that a bank wire hit the Swiss bank account.”

    Upon verification, the customer would make “another large wire,” Exhibit G suggests.

    Another email within the January 2009 chain says that AVG had at least two Swiss accounts.

    What It Means

    Walking this back and assuming the Exhibit G communications were truthful, what it means is that the ASD enterprise — this time in the form of AVG — had set up a banking operation in Switzerland, a secrecy haven. At the same time, it means that the ASD enterprise did this after it earlier had polluted U.S. banks in multiple states with fraudulent proceeds and now was taking its act not only to Switzerland, but also to South America, Central America and the Caribbean.

    Less clear is whether ASD had a preexisting banking network in Switzerland before effectively morphing into AVG. Regardless of when the Swiss accounts were opened, however, the mere presence of them suggests that ASD and AVG insiders had the means to move fraudulent proceeds from U.S.-based crimes offshore and perhaps tap into them later.

    And this brings us to Zeek Rewards, which also used domestic and offshore facilitators and the same fundamental business model of ASD and AVG. It also brings us to Profitable Sunrise and other MLM “programs” such as Better-Living Global Marketing. The now-disappeared Profitable Sunrise scheme allegedly used U.S. bank wires and offshore facilitators to drive tens of millions of dollars to the scheme. BLGM, still active, clearly has U.S. promoters and facilitators while purportedly operating from Hong Kong.

    Meanwhile, BLGM, like ASD, AVG, Profitable Sunrise and Zeek Rewards, has Stepfordian “defenders” running interference online.

    One of those “defenders” is over at the BehindMLM.com antiscam Blog asserting that he “met a guy online. I know him well now. I deposited $6500 into his Bank Of America account at my local branch.”

    Another BLGM defender is at BehindMLM.com asserting that (italics added):

    Got my Hongkong wire/remittance of 6,000 USD at Bank of America, have all my questions and concerns answered by Luke Teng, the teleconference helped a lot, disregard all the unnecessary comments of non-members.

    Get all your transparent answers from Luke Teng, or else you will die of stress reading all the negative comments of people who are not engaging, and guys remember this is our freewill and our own money, our decision, our own risk.

    TelexFree, a scheme more or less operating globally that has U.S. footprints in Massachusetts and Nevada and is under investigation in Brazil, also used Bank of America, according to members. Some TelexFree promoters instructed recruits to walk deposits meant for TelexFree into a Bank of American branch in Massachusetts or TD Bank locations elsewhere. TD Bank, of course, was the bank of Florida Ponzi schemer and racketeer Scott Rothstein. Four years after Rothstein’s $1 billion-plus scam brought great shame to the banking community, it’s still causing ripples.

    The PP Blog previously reported that a former Zeeker who also was associated with Profitable Sunrise — an alleged international pyramid scheme that funneled tens of millions of dollars to Europe, China and Panama amid the murkiest of circumstances — also was pushing BLGM.

    All of these “programs” are operating or have operated within the MLM sphere, the same sphere that produced the incredibly toxic ASD/AVG Ponzi schemes. All of the “programs” either have or had access to the wire facilities of various nations around the globe while using Ponzi- and pyramid schemes as their business model.

    The Piggybackers

    Various destructive forces are piggybacking on the scams, including attack bots and spambots that are keying on the names of HYIP enterprises and HYIP story figures to promote other scams or to drive traffic to other highly questionable “opportunities.”

    Even after the PP Blog announced the temporary suspension of the publication of new stories last week, it continued to be targeted by resources-draining bots. One wave knocked the Blog offline for about an hour two days ago. During the involuntary outage, legitimate readers and researchers  could not access the Blog.

    One of the spammers left the signature of an IP associated with the country of Indonesia. A spam bid from the specific IP keyed on a PP Blog story about ASD figure and purported “sovereign citizen” Kenneth Wayne Leaming, now in federal prison for targeting U.S. federal officials and a Secret Service agent in an abuse campaign, harboring fugitives and possessing firearms as a convicted felon. Records in Washington state show that a Leaming-connected enterprise once traded on the name of JPMorgan, a famous banking concern. (“Sovereign citizens” are becoming increasingly infamous for harassing banks.)

    Another spammer — one that left an IP signature from Belarus — also targeted a Leaming story thread at the PP Blog.

    In recent weeks, the Blog has recorded data that plainly show that  botnets, spambots or human spammers are circling antiscam sites and attempting to execute command strings that — if enough volume is applied — can cause databases to malfunction or even cause the sites to go offline.

    This creates an atmosphere that affects the publishing of information not only on current scams, but also on emerging scams and scams of the past. The downstream effects are potentially ruinous — and yet it continues.

    ASD and AVG were discredited long ago. But scams that use their core business model not only are launching, but in some cases thriving. Serial promoters are racing from one fraud scheme to the next. This sets the stage for schemes to fill up the world’s largest sports stadiums eight or 10 times over with victims. In 2008, ASD could have filled the Rose Bowl to capacity with victims one time. By 2012, Zeek could have filled the Rose Bowl with victims 10 times.

    The “defenses” for these various schemes range from the bizarre to the utterly mindless — and they absolutely must be decimated with the full, combined weight of the various world governments.

    It is in the interest of the worldwide public to connect the dots of these schemes and to eradicate them through the maximum application of the force of law. Left unchecked, they will erode the very foundations of freedom and permit the criminal underworld of MLM to thrive.

    NOTE: Our thanks to the ASDUpdates Blog.

     

  • MORE SENIOR FRAUD: ‘Insider Lending’ Scam: Illinois Man, 82, Pleads Guilty To Duping Bank He Once Led; Bank Later Failed

    In what federal prosecutors described as an “insider lending” scam, the 82-year-old former chairman of a bank that failed in 2011 has pleaded guilty to duping the bank and regulators by concealing his interests in loans made by the bank to his secret business associates.

    James A. Regas, of Oak Brook, caused employees of Western Springs National Bank & Trust to make false financial reports to the FDIC and “admitted that he falsified and concealed material facts that should have been fully disclosed to the bank’s directors and government regulators during 2008 and 2009,” federal prosecutors said.

    Meanwhile, Regas signed reports to the FDIC “knowing they contained false information regarding the delinquency status of certain loans” prosecutors said.

    All in all, the bank lost about $681,000 on loans in which Regas had an undisclosed interest. Each of the loans went to business associates of Regas and, in one case, Regas received about half of the proceeds of a $500,000 loan “indirectly through a third-party,” prosecutors said.

    In another case, an $803,000 loan was used to partially finance the acquisition of three properties “in which Regas and family members had financial interests.” In a third case, a $750,000 loan was made to a real-estate investor who used the proceeds to purchase an apartment building from Regas.

    “That building served as collateral for the bank on another loan that Regas acquired and sold through a nominee company,” prosecutors said. “These loans enabled Regas to use bank funds for his own benefit without having to apply for loans himself, posting collateral or signing any promises to repay the bank’s money, while evading federal restrictions on insider loans.”

    “Regas knowingly submitted false conflict-of-interest statements to the bank, in which he denied having any financial relationship with any of the bank’s borrowers,” prosecutors said.

    He faces up to five years in federal prison and a restitution order. Sentencing is set for Oct. 25.

  • Raymond Bitar, Full Tilt Poker CEO, Arrested; Gambling Site Linked To THREE U.S. Banks That Failed, Feds Say; ‘The On-Line Casino Become An Internet Ponzi Scheme,’ Top FBI Official Says

    Three vulnerable U.S. banks that processed illegal gambling payments for Full Tilt Poker in exchange for investments in the institutions later failed, federal prosecutors in the Southern District of New York said yesterday. The failures of Sunfirst Bank in St. George, Utah, and All American Bank and New City Bank — both of which were “single-branch” banks in Illinois — allegedly cost the FDIC more than $70 million.

    Now, Full Tilt Poker Chief Executive Officer Raymond Bitar has been arrested in New York. The arrest occurred yesterday upon his return from Ireland, and Bitar, 40, was charged in an 11-count, superseding indictment with lying to players about the security of their funds and other crimes. He’d earlier been charged with gambling, bank fraud, and money laundering offenses.

    News of Bitar’s arrest occurred on the same day the SEC alleged that a Georgia man effectively had gutted a bank in the state as part of a $40 million investment scheme. That man, Aubrey Lee Price,  now is listed as missing. Fraud schemes have contributed to multiple bank failures in the United States.

    In one of three counts that allege Full Tilt’s Bitar committed wire fraud against Full Tilt players, he is accused of lying to participants on an “internet forum” about players’ money being kept separate from corporate funds. Prosecutors said that Full Tilt was using players’ money as its own to sustain the scheme.

    At one point, according to prosecutors, Full Tilt owed players $344 million but had only $145 million “in all of its bank accounts.” At another point, Full Tilt owed players $390 million but had only $60 million on-hand.

    Among the astonishing allegations by federal prosecutors yesterday in the aftermath of an FBI investigation was that Vitar did not halt the Full Tilt Ponzi scheme after the government brought the initial set of charges in 2011. Instead, he continued to operate it offshore and “lured players to continue gambling with Full Tilt Poker by continuing to promise them that their funds were safe. In actuality, [Bitar] was using new customer deposits to pay off some of the backlog of player requests to withdraw funds and to cover the company’s operating expenses, including salary for [Nelson] Burtnick and himself.  In effect, Full Tilt Poker operated what was, by then, nothing more than a Ponzi scheme. When the scheme finally collapsed, Full Tilt Poker was unable to pay players the approximately $350 million it owed them.”

    Nelson Burtnick was the head of Full-Tilt’s payment-processing department. He also was charged yesterday in the superseding indictment.

    Prosecutors said Bitar and Burtnick “hired agents to create dozens of phony companies, complete with fake websites, and to open bank accounts using the names of these phony companies as a cover to process payments for Full Tilt Poker.”

    The codes of credit-card transactions were altered to circumvent Visa and MasterCard processing regulations and to dupe banks into processing illegal gambling transactions, according to the superseding indictment.

    To keep cash flowing to Full Tilt, Bitar and Burtnick also found a way to disguise e-checks that relied on “ACH” transactions routed through an electronic network administered by the Federal Reserve. Dummy companies were used to exploit the network, federal prosecutors charged.

    “Bitar and Full Tilt Poker persisted in soliciting U.S. gamblers long after such conduct was outlawed,” said Janice K. Fedarcyk, FBI assistant director-in-charge. “As alleged, Bitar has already been charged with defrauding banks to conceal the illegal gambling. Now he stands accused of defrauding Full Tilt’s customers by concealing its cash-poor condition and paying off early creditors with deposits from later customers. The on-line casino become an Internet Ponzi scheme.”

    Losses to customers involved “hundreds of millions of dollars” while Bitar and Full Tilt owners were paid “over $430 million,” said U.S. Attorney Preet Bharara.

    With yesterday’s arrest “and the new charges brought against him, Raymond Bitar will now be held criminally responsible for the alleged fraud he perpetrated on his U.S. customers that cost them hundreds of millions of dollars,” said Bharara. “The indictment alleges how Bitar bluffed his player-customers and fixed the game against them as part of an international Ponzi scheme that left players empty-handed.”

  • Receiver In Jeremy Johnson/IWorks Fraud Case Issues Devastating Report; Incredible Number Of Firms Referenced In 79-Page Court Update; ‘Dozens Of Companies Used As Conduits To Re-Route Revenue And To Commingle And Hide Funds,’ Document Claims

    EDITOR’S NOTE: Jeremy Johnson and associated companies were accused civilly by the FTC in December 2010 of orchestrating a massive fraud scheme involving hundreds of millions of dollars. At the moment, Johnson, 35, faces a single criminal charge of mail fraud. He denies wrongdoing on both the criminal and civil fronts and has painted himself a victim of an evil government and a court-appointed receiver run amok.

    About three weeks prior to the release of the court-appointed receiver’s report that is the subject of the story below, the government signaled that new criminal charges will be forthcoming and that those charges will apply to Johnson and unnamed “others” within his business web.

    “The United States’ criminal investigation is expected to continue for some months,” prosecutors said in a Jan. 12 court filing.

    A devastating 79-page report filed Friday by the court-appointed receiver in the Jeremy Johnson/IWorks case paints a picture of an incredibly elaborate domestic and international fraud scheme — one that only grew as the government moved in.

    The issuance of the report by receiver Robb Evans occurred against the backdrop of an ongoing advertising campaign — apparently conducted by a person or persons within Johnson’s camp — that plants the seed that Evans is presiding over a fraudulent company. The ad campaign, which is taking place on Google’s network, initially started on a web domain whose root was formed in part with the receiver’s first and last names, followed by the word “fraud.” (See Dec. 22 editorial.)

    That campaign appears to have been moved to a different domain that does not use Evans’ name to form its root, but instead marries the words “receiver” and “fraud” and asks, “Are you a victim of Robb Evans?”

    “We want to hear from you!” the ad exclaims.

    Evans is one of the financial analysts who helped unravel the infamous BCCI banking scandal in the 1990s. His bona fides are firmly established in the courts, and he has been a receiver or fiduciary in numerous cases.

    Receiver’s Feb. 3 Update To The Court

    Scores of business entities effectively were used as chess pieces to stymie investigators, keep the money wheels of key Johnson associates greased and disguise and conceal the ownership of assets, according to the report.

    At least six people with business and/or personal ties to Johnson either have invoked their Fifth Amendment right against self-incrimination or informed the receiver that they would if asked questions about certain transactions, according to the report.

    Included among this group were Johnson’s parents, a CPA, a notary public, a former banker and a man who’d served jail time for a previous felony conviction, according to the report.

    Among the former convict’s duties was to open domestic bank or trading accounts at the prompting of other Johnson business associates, according to the report.

    Through the efforts of yet another Johnson business associate, millions of dollars ended up in places such as Cyprus and Andorra, a small principality in southwest Europe bordered by France and Spain. The associate claimed to have conducted a “world tour” to open bank accounts, according to the report.

    Here is how Evans, referring to both an earlier report to U.S. District Judge Roger L. Hunt  and the new report issued last week, described his actions to date in reverse-engineering the alleged fraud. (Italics/emphasis added):

    “This process thus far has included an analysis and review of more than 265 bank accounts and other records from 35 financial institutions and 25 other businesses. In addition to 115 affiliated entities and shell companies of the Receivership Defendants as reported in the Receiver’s first report, the Receiver also discovered at least another 65 entities that were involved in moving funds and concealing the assets of Receivership Defendants.”

    And here is one of the receiver’s conclusions:

    “There can be no commercially reasonable explanation for the number of entities and individuals through which funds were routed and re-routed. The only plausible explanation is that these funds are assets of Jeremy Johnson and some of the individuals were paid to shield those assets.”

    There can be no doubt that the report will raise alarm bells in the U.S. Congress and official Washington because of the security implications of an alleged fraud scheme in which proceeds also made their way into a troubled Utah bank already reeling from the recession and stress on real-estate prices. The bank later failed, but not until Johnson allegedly had acquired a 19 percent stake in part through alleged nominee purchases of stock by relatives and “structured” transactions designed to ward off the FDIC.

    Among other things, the report by Evans ties both Johnson and SunFirst Bank of St. George to the poker scandal playing out in New York amid Ponzi allegations. Johnson allegedly paid a bribe to John Campos, a former SunFirst banker indicted in the poker case, according to the report.

    What allegedly happened at Sun First Bank, however, was only one of the events addressed in the report.

    Read the receiver’s Feb. 3, 2012, report.

    Prosecutors Say New Criminal Charges Coming

    In a separate court filing in Nevada last month, federal prosecutors advised Hunt that the government is “conducting an extensive criminal investigation for the purpose of superseding the original indictment with a more comprehensive indictment charging Johnson, iWorks, Inc., and others with a widespread pattern of federal criminal violations.”

    The others were not named in the prosecution filing.

    Johnson currently is facing a single count of mail fraud, in addition to the FTC’s civil charges.

    Separately, the FTC said in court filings last month that Johnson had engaged in an improper subpoena blitz in the civil case while discovery was stayed by the Nevada federal court.

    Johnson, according to the FTC, sent a subpoena to the private, D.C. metro-area residence of FTC Chairman Jon Leibowitz. The subpoena, which was quashed, demanded that Leibowitz appear in St. George at 9 a.m. on Jan. 27 to be deposed.

    Johnson also improperly sought to subpoena FTC commissioner Julie Brill, demanding that she appear in St. George  to attend a deposition a few days after Leibowitz, according to the FTC’s filing. That subpoena also was quashed.

    Like all FTC commissioners, Leibowitz and Brill are Presidential appointees. Neither is required to jump on cue from Johnson. Discovery will continue when the stay is lifted on a schedule the court — rather than Johnson — sets.

    See earlier editorial that lists some of the domain names that use the names of the FTC or FTC officials in forming all or parts of their roots. The domains allegedly were acquired by Johnson or persons in his camp. At least one domain that used the name of the FDIC was formed, according to court filings: EvilFDIC.

    Among the many domains that use the FTC’s name is CorruptFTC, along with at least three domains formed with the proper names of FTC staff attorneys.

    Each of the domains allegedly was acquired before the receiver filed his Feb. 3 report.

     

  • 3 PONZI/FRAUD CAPSULES: (1) Washington State Woman Jailed In Alleged $126 Million Ponzi Scheme; (2) Charity, Church, Investors In Metro Washington, D.C., Allegedly Scammed In $27M Ponzi; (3) South Florida Man Sentenced To More Than 12 Years In $29.5M ‘Gold’ Scam

    Screen shot: PDF from section of Page 1 of the indictment of Doris E. Nelson in an alleged $126 million Ponzi operating internationally through multiple companies.

    EDITOR’S NOTE: This information is presented in the form of briefs, with links to external sources.

    1.) Doris E. Nelson, arrested/jailed in Spokane, Wash., region, last week after federal raid in April 2010. SEC filed civil charges in September 2011.

    The allegations against Nelson and multiple companies in Nevada, Utah and Canada are alarming, but also somewhat standard fare if you’ve been observing how schemes form and then explain away problems when trouble develops.

    Among the core allegations are these:

    • Nelson, of Colbert, Wash.,  ran a payday-loan business called “The Little Loan Shoppe” in the area of Spokane. The firm was linked to multiple LLCs in the United States and multiple LTDs in Canada. The business started out in the Canadian province of British Columbia in roughly 1997, and moved to the United States “in or about 2001.” Investors were told they could earn enormous profits from the spread between the loan shop’s expenses and what it charged customers for a short-term loan.
    • The Ponzi scheme took in “at least” $126 million and caused losses of more than $40 million — losses that affected “at least” 800 investors.
    • Federal prosecutors say they have identified “victim investors” in multiple Canadian provinces and multiple U.S. states. The indictment also lists a victim from Spain.
    • The payday loan business was not profitable. Investors were getting paid through a complex shell game that lasted for years and involved the formation of new companies, including marketing and “leads” arms.
    • Nelson and some of the defendants engaged in wire fraud, mail fraud and money-laundering.
    • Nelson lied to the Manitoba Securities Commission and advised certain parties to lie to the British Columbia Securities Commission (BCSC).
    • Nelson used investor funds to purchase a motor home valued at nearly $127,000, a Chevrolet Corvette valued at more than $61,000, a Mercedes Benz valued at nearly $112,000. She purchased more than $220,000 in clothing at the St. Johns Knits store and $217,000 at other stores, including Nordstrom.
    • Nelson lost $400,000 of investors’ funds gambling at various Las Vegas casinos.
    • Nelson spent investors’ money on luxury sea cruises, including nearly $29,000 on a Royal Caribbean cruise in which she also spent $23,500 in investor funds to gamble.
    • The promissory-notes scheme showed classic signs of collapse in October 2008. (More details below.) Nelson slashed payouts to investors — from an anticipated rate of between 40 percent and 60 percent to 10 percent. The 10 percent payouts collapsed by March 2009.
    • Nelson claimed Little Loan Shoppe bought the building it used in Spokane, but that was a lie. In truth, the company was paying rent to a company owned by Nelson’s husband.
    • In February 2008, leading up to the beginning of the end in October 2008, Nelson forecast “an explosion of profit.” In May, she announced that “our industry is thriving.” She then opened a new window for investments, telling marks that she was “excepting” new money, as opposed to “accepting” it.  “[T]his window of opportunity will probably not be open again due to the expected surplus of income . . .” she wrote.
    • Between late June and late July of 2008, Nelson announced a “massive marketing campaign” that would turn the operation into “one of the largest loan companies.”
    • Millions of dollars flowed to the teetering scheme after Nelson’s various hype fests.
    • In October 2008, Nelson lied to BCSC about how she was making interest payments to investors, denying that the money came from “newer” investors and claiming the cash came from loan profits.
    • BCSC ordered Nelson to stop issuing promissory notes. Nelson then told investors that changes to U.S. lending laws had “dramatically reduced our profits . . .”
    • In February 2009, Nelson advised investors to quit contacting her about their investments because the inquiries were distracting her. She then announced a purported account review. In March 2009, Nelson told investors that the account review was behind schedule and perhaps would not be completed until the middle of April.
    • In March 2009, Nelson traveled to Florida to try to get more money from existing investors.
    • The scam then collapsed in its entirety and investors experienced ruin.

    Read/view coverage of alleged Nelson scam at KXLY.com.

    The Alleged Garfield M. Taylor Ponzi Scheme In Metro Washington, D.C.

    2.) Garfield M. Taylor, others sued by SEC last week amid spectacular allegations of Ponzi fraud targeted at charities and people of faith, among others.

    Outlined below are some of the core allegations in the alleged Garfield M. Taylor Ponzi scheme, which includes multiple defendants and multiple companies. The SEC brought the case last week, alleging a $27 million Ponzi scheme.

    First, a quote from Stephen L. Cohen, the SEC’s associate director in the Division of Enforcement.

    “Garfield Taylor and his partners in the scheme touted themselves as seasoned and trustworthy financial professionals offering a conservative but lucrative investment opportunity. In reality, they were gambling away investor assets in extremely risky trades and operating a classic Ponzi scheme.”

    Key allegations:

    • Garfield Taylor, of North Bethesda, Md., formerly worked for Fannie Mae and “frequently” used its name in his fraud pitch. His companies, Garfield Taylor Inc. and Gibraltar Asset Management Group LLC, were charged by the SEC, as were five alleged “collaborators”: Maurice G. Taylor of Bowie, Md., who is the brother of Garfield Taylor; Randolph M. Taylor of Washington, D.C., who is the nephew of Garfield Taylor; Benjamin C. Dalley of Washington, D.C., who is the childhood friend and business partner of Randolph Taylor; Jeffrey A. King of Upper Marlboro, Md., whose sister is married to Maurice Taylor; William B. Mitchell of Middle River, Md.
    • The scheme operated “at least” between 2005 and 2010, targeting “middle class” investors and charities.
    • The FDIC’s name was used to sanitize the scam.
    • Unregistered brokers were used to recruit investors.
    • The firms themselves were not registered.
    • Misleading PowerPoint presentations were used.
    • A Baptist church in Maryland, a children’s charity in Washington and an investment club in Philadelphia were shown the PowerPoint presentations.
    • Fancy language such as “proprietary strategy,” “covered call investment strategy” and “unparalleled downside protection” was used.
    • The Baptist church also was shown a “fake ‘letter of recommendation’ from Charles Schwab.”
    • “This letter was not prepared by anyone at Charles Schwab. Rather, it is a fabrication.”
    • A retiree from Lanham, Md.,  plowed more than $780,000 into the scam, an amount that represented “nearly his entire retirement savings.”
    • At least one investor in 2009 was worried about his/her nest egg in the post-Bernard Madoff environment, but Dalley reassured the investor that the opportunity had “taken the internal measures to strictly regulate our traders and accounting to ensure that our investor’s investments are safe.”
    • When Dalley provided the assurance, he already knew that the opportunity “had not followed a covered call trading strategy and had instead engaged in highly speculative naked options trading.”
    • Garfield Taylor actually was operating a “joint Ponzi scheme” through his companies.
    • Garfield Taylor “convinced at least three individuals to give him the username and password to their online brokerage accounts in order for Garfield Taylor to place trades in those accounts on a discretionary basis in exchange for a share of any profits generated.” A Maryland woman duped in this fashion lost “nearly her entire account” originally worth $450,000 “in a matter of two months.”
    • Garfield Taylor used investors’ money to send his children to private school at a cost of $73,000.
    • At one point, one of the Garfield Taylor firms had “less than” $1,000 in its account, but an investor “wired approximately $590,000.” Garfield Taylor used the incoming money to make Ponzi payments.

    Read the SEC complaint.

    Gold Scammer Gets More Than 12 Years In Slammer

    3.) Jamie Campany, 48, of Palm Beach County, Fla., sentenced to federal prison in $29.5 million fraud.

    Key allegations:

    • More than 1,400 investors defrauded.
    • Multiple companies operating in South Florida and elsewhere involved, including Global Bullion Exchange LLC of Lake Worth. Scam also used name of “Barclay.”
    • Fraud fueled by telemarketing.
    • FBI, U.S. Postal Inspection Service and Florida Office of Financial Regulation handled probe.

    Read Feds’ statement announcing the Campany sentencing.

    Watch Campany tell ABC News how he scammed the masses.

     

  • BULLETIN: Attorney Pleads Guilty In $47 Million ‘Bond’ Ponzi Scheme That Caused Arkansas Bank To Collapse; ‘Fraud, Whether Of This Magnitude Or Not, Cannot Be Tolerated,’ U.S. Attorney Christopher R. Thyer Says

    BULLETIN: An Arkansas attorney and businessman caused a bank to collapse with his $47 million Ponzi scheme involving the sale of fraudulent bonds, federal prosecutors said.

    Kevin Harold Lewis, 43, of Little Rock, pleaded guilty to a federal charge of bank fraud after waiving indictment, prosecutors said.

    First Southern Bank, an FDIC-insured institution, collapsed after learning it had purchased $23 million in fraudulent bonds from Lewis, prosecutors said. At least seven other banks provided loans to Lewis that were collateralized with Lewis’ bogus bonds: Centennial Bank, Citizens, Liberty Bank, First Community, Allied, Simmons and Regions Bank.

    Two banks continue to hold bogus bonds from the Lewis scheme: Centennial Bank and Bank of Augusta, prosecutors said.

    The Lewis scheme caused losses of $47 million, and Lewis borrowed $4.6 million from First State Bank in Lonoke to gain a controlling interest in First Southern, collateralizing the First State loan with stock from First Southern, the very bank he was defrauding, prosecutors said.

    “This case demonstrates that the actions of one individual can have far-reaching, detrimental effects, including the collapse of a financial institution,” said U.S. Attorney Christopher R. Thyer of the Eastern District of Arkansas. “The amount of fraud loss in this case is one of the highest in the history of our office. Fraud, whether of this magnitude or not, cannot be tolerated, and the Department of Justice will aggressively investigate and prosecute such schemes.”

    A veteran FBI agent described the Lewis scheme as a brazen one that put multiple institutions in the line of financially injurious fire laid down by a con man.

    “With each creation of a fraudulent bond, Mr. Lewis added to his house of cards that ultimately collapsed,” saidValerie Parlave, special agent in charge of the FBI’s Little Rock Field Office.

    As the scheme grew, Lewis increased his ownership stake in First Southern to 64.9 percent, but the stake was built virtually entirely on the instruments of deceit, according to prosecutors. To up his stake in the bank from 53 percent to nearly 65 percent, Lewis used proceeds from the sale of fraudulent bonds he sold to First Southern, effectively imperiling the bank further by opening a second fraud front that destabilized the institution.

    Based in Batesville, First Southern collapsed in December 2010. The cost to the FDIC insurance fund was estimated at $22.8 million.

    At its collapse, First Southern became the 156th bank to fail in the United States in 2010. Only three banks failed in 2007.

    Sixty one banks have failed this year in the United States, including three on July 29.

    Lewis faces a maximum sentence of 30 years in federal prison. prosecutors said he upped his stake in First Southern through an entity known as PA Alliance Trust.

     

  • AdSurfDaily/Golden Panda Figure Clarence Busby Jr. Filed Pro Se Lawsuit Against Bank, 1,000 ‘Does’; ‘Plaintiff Has No Knowledge Of The True Names And Identities Of Any Or All Of The Real Lenders’

    Even as bank failures and  foreclosures were piling up in Georgia last year, a man associated with at least four failed autosurf companies was filing lawsuits against mortgage companies and 1,000 “Doe” defendants amid claims he did not know the “true names” of the “real lenders.”

    Clarence Busby Jr. of Acworth, Ga., advised a Cobb County judge that it was “long standing black letter Mortgage law” from the 19th century that he should receive foreclosure relief from Quicken Loans, OneWest Bank, a service company and the “Does.”

    In January 2011, the defendants moved to have the cases removed to federal court in Northern Georgia and filed for dismissal. The dismissal was granted in March.

    A street address for Busby that appeared in both the county and federal filings corresponds with an address used by Biz Ad Splash NA LLC (BAS) in Georgia corporate filings dated May 13, 2009. BAS was an autosurf associated with Busby that went missing last year. Busby also was the president of Golden Panda Ad Builder, yet another autosurf, and a onetime business partner of Thomas A. “Andy” Bowdoin, the operator of the Florida-based AdSurfDaily autosurf.

    The address BAS used in the Georgia filings was a mail drop, according to records.

    Bowdoin was arrested in December 2010. The U.S. Secret Service said he had presided over an international Ponzi scheme that had gathered at least $110 million. Assets tied to both Bowdoin and Busby were seized as part of the ASD/Golden Panda probe, which also involved an autosurf known as LaFuenteDinero.

    Busby was implicated in three prime-bank schemes by the SEC in the 1990s and was enjoined from violating securities laws by a federal judge. An FDIC-insured bank that once held Golden Panda funds failed in April 2011.

    Georgia leads the United States in bank failures, with Florida nipping on its heels. Both states also are high on the list of mortgage foreclosures. Foreclosures tend to lower the value of surrounding properties.

    Busby has described himself in court filings as a minister and real-estate professional. The actions in Cobb County that were removed to federal court were filed pro se, meaning Busby acted as his own attorney.

    The defendants in the cases claimed Busby was seeking to “invalidate and/or void” in its “entirety” a $120,000 security instrument held on a property in Marietta, Ga.

    Records suggest the property has been bought and sold twice in recent months for wildly different prices.

    Among Busby’s claims in the Cobb County lawsuit was that the “true names and identities of any or all” of the “real” lenders, investors and others involved in his mortgage “were hidden from the plaintiff.”

    BAS, which purported to be headquartered offshore, entered the autosurf world in January 2009 — after the ASD, Golden Panda and LaFuenteDinero-related asset seizures.

    The entry of BAS began with the stern bang of a drum and a dire message in a promotional video: “The World Is In Crisis,” the video warned. “Turn On The News, And You’ll See. The Stock Market Is At A Record Low. Foreclosures Are At An All-Time High. Thousand’s (sic) Are Losing Their Jobs. Banks Are Closing. There Has To Be A Solution!”

    The dire bang of the drum faded, replaced by a riff from an organ. The riff grew frantic, building toward a crescendo. The video never said the tones were from a 1999 work by Fatboy Slim: “Right Here, Right Now.”

    Messages flashed in front of viewers’ eyes for more than a minute before the video announced the company’s name — BizAdSplash — and positioned the surf as the cure for all the economic misery in the world.

    “Biz Ad Splash Has The Answer,” it said. “The Plan Is Simple. Advertise Your Business, A Product Or Service, Introduce Others To The Value Of Advertising. View A Few Ads For A Few Minutes A Day. Earn Profits. It’s That Simple!”

  • KABOOM! CFTC/FTC Cases Against American Precious Metals LLC Were Part Of Broader Effort By New Task Force Operating In South Florida; Feds, State Throw Down Gauntlet Against Scammers

    Kaboom! It turns out that the cases announced this week against American Precious Metals LLC (APM)  by the CFTC and FTC were part of a geographically localized law-enforcement initiative that sprouted from “Operation Broken Trust,” a major national initiative undertaken last year by the U.S. Department of Justice and partner agencies as part of the interagency Financial Fraud Enforcement Task Force.

    The localized initiative that led to both the CFTC and FTC bringing actions against APM is known as the South Florida Securities and Investment Fraud Initiative. It was created in December 2010 by U.S. Attorney Wifredo Ferrer, the top federal prosecutor in the Miami region.

    The CFTC accused APM of running a precious-metals scam. Meanwhile, the FTC opened up a second legal front by charging the company with operating a telemarketing fraud scheme from a boiler room. The effect of the approach is that APM, which both agencies accused of running frauds that had gathered tens of millions of dollars, now has to square off against litigation coming from two different directions.

    Ferrer has warned for months that white-collar fraudsters operating in the region had no safe haven either onshore or offshore.

    In addition to Ferrer’s office, the CFTC and FTC, members of the South Florida Task Force include the FBI, the IRS, the U.S. Secret Service, the U.S. Postal Inspection Service, the SEC, the FDIC, the Florida Office of Financial Regulation and ICE Homeland Investigations.

    ICE is a division of the U.S. Department of Homeland Security.

    “Investors lose billions of dollars annually to fraudulent schemes,” Ferrer said in December, when introducing the new task force. “Some victims — the luckier ones — lose only thousands of dollars. Others lose their entire lives’ savings. While the victims of fraud are financially ruined, the fraudsters live a life of luxury. Together with our law enforcement and regulatory partners, we hope to help put an end to this type of fraud.”

  • URGENT >> BULLETIN >> MOVING: Keith Simmons’ Forex Ponzi Caper Leads To Criminal Charges And Deferred Prosecution Against North Carolina Bank; CommunityONE Bank Charged With Not Maintaining Effective Anti-Money Laundering Program

    BULLETIN: Federal prosecutors say the collapsed Forex Ponzi scheme operated by Keith Franklin Simmons put an undercapitalized  North Carolina bank with 45 offices in 38 communities in harm’s way.

    In a dramatic announcement, Justice Department officials said CommunityONE Bank N.A of Asheboro, N.C., turned a blind eye to Simmons and did not file a single Suspicious Activity Report despite the fact the scheme sent out red flags for more than two and a half years.

    CommunityONE lost 16 percent of its value because of the scheme, the Justice Department said. Had the bank collapsed, it would have cost the FDIC insurance fund $500 million, prosecutors added.

    In a deferred prosecution agreement, the bank has been charged criminally with failing to maintain an effective anti-money laundering program. The agreement, officials said, would enable the bank to recapitalize and execute a merger plan while providing $400,000 to help the Ponzi victims recover.

    “Banks asleep at the switch need to wake up,” said U.S. Attorney Anne Tompkins of the Western District of North Carolina.  “Federal law requires banks to implement a robust and proactive anti-money laundering program to detect fraud and protect the public from harm.  This bank’s failure to detect and report a Ponzi scheme cost it 16 percent of its value.  Other financial institutions should heed this warning:  the Bank Secrecy Act applies to more than just drug and terrorist financing.”

    Simmons, prosecutors said, operated his massive scam “almost entirely through an account at the bank.”

    Between April 2007 and September 2009, prosecutors said, Simmons used CommunityONE to deposit more than $35 million in investor funds and withdraw at least the same amount.

    Even though “hundreds” of suspicious transactions occurred, the bank chose to be willfully blind, the Justice Department said.

    “CommunityONE Bank turned a blind eye to criminal conduct occurring under its nose,” said Assistant Attorney General Lanny Breuer.

    The Justice Department made the announcement from Washington, and Breuer said the bank was implementing a new program and beginning the process of “righting its wrongs.” The charges will be dismissed in two years if the bank complies with its agreement.

    Records at CommunityONE, prosecutors said, showed that Simmons diverted more than $2 million to other accounts at the bank “to operate his other businesses.”

    Meanwhile, he “diverted nearly $800,000 in cash withdrawals, gift cards and transfers to his personal account with the bank” and “diverted numerous payments to support his luxurious lifestyle, including payments for private jets, vehicles and gifts,” prosecutors said.

    Simmons, who was convicted of securities fraud, wire fraud and money laundering last year, operated a company known as Black Diamond Capital Solutions LLC. He faces a maximum sentence of 80 years in federal prison. Read more about Black Diamond here.

    The action against CommunityONE was brought by elements of the interagency Financial Fraud Enforcement Task Force created by President Obama in November 2009.

  • FDIC, Georgia Authorities Shut Down Bank That Once Held Proceeds From Alleged ASD/Golden Panda Ad Builder Scheme

    ASD's Andy Bowdoin.

    Bartow County Bank, which once held deposits tied to Golden Panda Ad Builder and the alleged AdSurfDaily Ponzi scheme, has failed in Georgia.

    The Georgia Department of Banking and Finance closed the small bank today and appointed the FDIC receiver. Bartow once held $644,266 linked to Golden Panda, federal prosecutors said in a December 2008 forfeiture complaint.

    Bartow’s failure is expected to cost the Deposit Insurance Fund nearly $70 million, the FDIC said. Georgia leads the United States in bank failures.

    Golden Panda President Clarence Busby and his daughter, Dawn Stowers, voluntarily ceded the money in the Bartow account to the government more than two years ago, according to court filings. U.S. District Judge Rosemary Collyer formerly ordered the money forfeited on March 31, 2010.

    Golden Panda was the purported “Chinese” arm of the Florida-based ASD “autosurfing” enterprise, which prosecutors said was a $110 million Ponzi scheme. Most of the money from the scheme was routed through Bank of America, according to court filings.

    Busby, who was implicated by the SEC in three prime-bank schemes during the 1990s, advised Collyer in 2008 that Golden Panda was formed after a “relaxing” day of fishing with Bowdoin and a minister on a Georgia Lake.

    Along with the more than $644,000 in Golden Panda cash seized in the December 2008 forfeiture case, prosecutors also seized an $800,000 building in Florida for which Bowdoin had paid cash, according to court filings.

    Prosecutors also seized a boat, cars and other equipment in the December 2008 complaint. In a forfeiture complaint filed in August 2008, prosecutors seized nearly $80 million held in Bank of America accounts, including $65.8 million in 10 accounts in Bowdoin’s name, and $14 million in Golden Panda-related accounts.

    Collyer ordered Bowdoin’s money forfeited in January 2010. Golden Panda’s money was ordered forfeited in July 2009.

    As was the case with many things associated with ASD, the December 2008 forfeiture case turned into Theatre of the Absurd. Although Bowdoin family members were named beneficiaries of much of the fraud outlined in the December complaint, neither Bowdoin nor a family member entered claims for the seized property.

    Regardless, Bowdoin filed an appeal after Collyer ordered the money and property forfeited.

    The FDIC said today that Bartow County Bank will repoen tomorrow as a branch of Hamilton State Bank. Bartow’s failure will cost the Deposit Insurance Fund an estimated $69.5 million.

    “The FDIC and Hamilton State Bank entered into a loss-share transaction on $247.5 million of Bartow County Bank’s assets,” the FDIC said. “Hamilton State Bank will share in the losses on the asset pools covered under the loss-share agreement.”

    Four other U.S. banks failed today, bringing the year-to-date total to 34. In 2007, only three banks failed in the United States.

    Eight banks have failed in Georgia so far this year. Two have failed in Florida.

    After the assets of ASD and Golden Panda were seized, some members immediately turned their attention to promoting other autosurfs. They also pushed HYIPs and cash-gifting schemes, saying the miserable businesses were a good way to make up for ASD/Golden Panda losses.

    When an MLM program known as MPB Today launched in Florida last year, promoters urged foreclosure subjects and Food Stamp recipients to part with their money to join the business. Records show that one of the banks MPB Today used was operating under a consent agreement with the FDIC.

    MPB Today said last year that it had recruited more than 30,000 members.

    Florida has one of the highest foreclosure rates and bank-failure rates in the United States.

  • UPDATES/NEWS: ASA Ponzi Forum Now Redirects To CashX.com; Arthur Nadel Gets 14 Years In Florida Ponzi Case Brought By Obama Task Force; Former Indiana Pastor Who Bilked Christians Convicted Of Securities Fraud

    President Obama formed the interagency Financial Fraud Enforcement Task Force in November 2009. He later became the subject of an attack ad by an affiliate of the purported MPB Today "grocery" MLM.

    UPDATED 10:56 A.M. EDT (U.S.A.) The ASA Monitor Ponzi and criminals’ forum now is redirecting to a website operated by CashX.com, a Canadian payment processor that hawks MasterCard debit cards and says it permits customers to withdrawn money to Liberty Reserve.

    Liberty Reserve is a Ponzi-friendly payment processor purportedly headquartered in Costa Rica after earlier operating from Panama.

    Meanwhile, confessed Ponzi schemer Arthur Nadel — who briefly went on the lam from Florida in early 2009 as his $390 million scheme was disintegrating and became known as one of the original “mini-Madoffs” — has been sentenced by a federal judge in New York to 14 years in prison.

    It is effectively a life sentence for Nadel, who is 77 and one of several senior citizens implicated in U.S. Ponzi schemes.

    At the same time, a former clergyman from Indiana who told congregants it was their “Christian responsibility” to become pitchmen for his then-undiscovered bond scheme has been convicted of nine counts of securities fraud.

    Vaughn Reeves, 66, is scheduled to be sentenced next month. The jury deliberated only four hours before returning the verdict against Reeves, himself a senior citizen. Congregants believed they were helping raise money for church-building projects, but it was a scam that led to foreclosure proceedings against eight places of worship. (See link to AP report below.)

    Claims made by Reeves are similar to claims made by the Data Network Affiliates (DNA) MLM program, which told members that churches had the “MORAL OBLIGATION” to help bring business to the Florida-based firm and qualify for commissions ten levels deep. DNA purports to be in the license-plate data collection business, claiming it can help law enforcement and the AMBER Alert program recover abducted children.

    Incongruously, DNA also purports to sell a “protective spray” that shields cameras from taking photographs of license plates. Equally incongruously, the company said that it could offer a free cell phone with unlimited talk and text for $10 a month. The company later backtracked on the claim, bizarrely saying it studied pricing structures only after announcing it had become the world’s low-price leader while acknowledging it hadn’t vetted its purported vendor for the service.

    DNA figure Phil Piccolo later threatened to sue critics. Earlier, Dean Blechman, who said he was the company’s CEO before resigning in February, threatened to sue critics. DNA withheld the announcement of Blechman’s departure for nearly a week and then misspelled his name. DNA also described Blechman as the “future” CEO, even though Blechman had described himself as the current CEO.

    Blechman complained to the PP Blog about “bizarre” events at DNA.

    ASA Monitor, which is referenced in court filings as a place from which the alleged Pathway To Prosperity (P2P) Ponzi scheme was pitched and was a site from which the purported “grocery” MLM operated by Florida-based MPB Today was pitched, suddenly announced on Oct. 12 that it was closing.

    Like MPB Today, DNA also was pitched from Ponzi and criminals’ forums.

    The ASA Monitor closure announcement coincided with a flap in which an ASA forum moderator sought to muzzle critics of the MPB Today program, which is being targeted at Christians, foreclosure subjects, Food Stamp recipients, senior citizens, people of color and members of the alleged AdSurfDaily (ASD) Ponzi scheme.

    ASD also operated from Florida before the U.S. Secret Service seized tens of millions of dollars in August 2008, amid allegations of wire fraud and money-laundering. Robert Hodgins, an international fugitive wanted by Interpol in a narcotics-trafficking and money-laundering case filed after an undercover probe by the U.S. Drug Enforcement Administration in Connecticut, provided debit cards to ASD, members said.

    Nadel’s scheme, meanwhile, operated in the Sarasota area.

    “Through his massive Ponzi scheme, Arthur Nadel greased his own pockets and financed his lavish lifestyle, using money his clients relied on him to invest,” said U.S. Attorney Preet Bharara of the Southern District of New York.

    “He cheated his elderly and unwitting victims out of their retirement savings and consigned others to poverty,” Bharara said. “The message of [yesterday’s] sentence should be loud and clear — we will continue to work with our partners at the FBI to find the perpetrators of financial fraud and use every resource we have to bring them to justice.”

    U.S. District Judge John G. Koeltl ordered Nadel to forfeit $162 million, five airplanes, a helicopter and real estate in Florida, North Carolina and Georgia.

    The prosecution of Nadel was brought in coordination with President Obama’s Financial Fraud Enforcement Task Force. U.S. Attorney General Eric Holder traveled to Florida earlier this year to warn fraudsters that the United States was serious about putting scammers in prison.

    By September, an affiliate of MPB Today had created a video in which Obama was depicted as a left-handed saluting Nazi who cowered to U.S. Secretary of State Hillary Clinton, who was depicted as a drunk. First Lady Michelle Obama, the mother of two daughters, was depicted as having experienced an embarrassing gas attack in the Oval Office after sampling beans at a Sam’s Club store.

    Clinton, depicted in the sales promo as “Hitlary,” knocked out Michelle Obama after barging into the Oval Office bawling and carrying a bottle of wine. Clinton, the mother of one, was the first woman ever appointed to the Walmart board of directors.

    Some MPB Today affiliates have claimed Walmart is affiliated with MPB Today and that the government backs the MLM program, which appears to have accounts at at least two banks in the Pensacola area. One of the banks is operating under a consent agreement with the FDIC.

    Read the AP story on the Vaughn Reeves scheme in Indiana.