Is your purported debt coach or foreclosure-relief expert a “sovereign citizen” with an avowed contempt for the U.S. government and banking in general? Is he (or she) actually trying to recruit you into a criminal scheme that only will add to your stress? Is your last disposable dollar going into the pockets of a domestic extremist posing as a patriotic problem-solver and putting you in the position of having to explain incomprehensible legal filings to a judge?
A new report by the FBI “indicates a continued effort by Sovereign Citizen domestic extremists throughout the United States to perpetrate and train others in the use of debt elimination schemes,” the agency said.
“Victims pay advance fees to perpetrators espousing themselves as ‘sovereign citizens’ or ‘tax deniers’ who promise to train them in methods to reduce or eliminate their debts,” the agency said.
“While they also target credit card debt, they are primarily targeting mortgages and commercial loans, unsecured debts, and automobile loans,” the FBI said. “They are involved in coaching people on how to file fraudulent liens, proof of claim, entitlement orders, and other documents to prevent foreclosure and forfeiture of property.”
The finding is included in a 29-page report on mortgage fraud released this month. Sovereign citizens, though, are hardly the only force driving the fraud, according to the report.
“Mortgage fraud enables perpetrators to earn high profits through illicit activity that poses a relative low risk for discovery,” the FBI said. “Mortgage fraud perpetrators include licensed/registered and non-licensed/registered mortgage brokers, lenders, appraisers, underwriters, accountants, real estate agents, settlement attorneys, land developers, investors, builders, bank account representatives, and trust account representatives.
“There have been numerous instances in which various organized criminal groups were involved in mortgage fraud activity,” the FBI said. “Asian, Balkan, Armenian, La Cosa Nostra, Russian, and Eurasian organized crime groups have been linked to various mortgage fraud schemes, such as short sale fraud and loan origination schemes,” the FBI said.
Unhappy with an entity with which you have a dispute? Want to chill them to get your way by threatening to use keyword targeting and social networking? Want to start a wild spin campaign to misinform the public and slime people and entities you perceive to be your enemies?
Want to suggest a person or entity submits to your demands or else? Want to suggest you’ll be aided in your efforts to get what you want by thousands — if not tens of thousands — of like-minded, online acquaintances and colleagues?
A California man has been indicted in New York on federal charges of extortion through interstate communications. Federal prosecutors also are seeking the forfeiture of Anthony Digati’s computer and other equipment alleged to have been used in an ever-escalating bid to extort money from New York Life Insurance Co. because he was unhappy with a product purchased from the firm.
U.S. District Judge Denny Chin — the judge who presided over the Bernard Madoff case — has been assigned to hear the Digati case. Digati, 52, of Chino, Calif., faces a maximum of two years in federal prison and a fine of up to $250,000 — or twice the gross pecuniary loss or gain derived from the offense — if convicted.
Digati registered a domain in February that used New York Life’s name in its URL, according to records. He then embarked a relentless hectoring campaign aimed at fashioning “false public statements” and threatening to transmit millions of spam emails “in an effort to damage the reputation of New York Life and cost the company millions of dollars in revenue,” according prosecutors.
The intent, according to prosecutors, was not to inform or educate. Rather, it was to “extort” money from New York Life by keeping it in a constant state of threat and suggesting the demand for a payment of $198,303.88 would escalate into a demand for $3 million if the lower demand was not met.
New York Life called the FBI.
Part of Digati’s strategy, according to prosecutors, was to “drag [New York Life’s] company name and reputation . . . through the muddiest waters imaginable.”
Digati’s website included this text, according to records:
These things, unless you honor the below claim, WILL HAPPEN on March 8, 2010.
As you have denied my claim I can only respond in this way. You no longer have a choice in the matter, unless of course you want me to continue with this outlined plan. I have nothing to lose, you have everything to lose.
My demand is now for $198,303.88. This amount is NOT negotiable, you had your chance to make me an offer, now I call the shots.
I have 6 MILLION emails going out to couples with children age 25-40, this email campaign is ordered and paid for. 2 million go out on the 8th and every two days 2 million more for three weeks rotating the list. Of course it is spam, I hired a spam service, I could care less, The damge [sic] will be done.
I am a huge social networker, and I am highly experienced. 200,000 people will be directly contacted by me through social networks, slamming your integrity and directing them to this website within days.
I think you get the idea, I am going to drag your company name and reputation, through the muddiest waters imaginable. This will cost you millions in lost revenues, trust and credibility not to mention the advertising you will be buying to counter mine. Sad thing is it’s almost free for me!
The process is in motion and will be released on March 8th, 2010. If you delay and the site goes live, The price will then be $3,000,000.00.
Meanwhile, prosecutors said Digati flooded the company with email directed at executives, employees and a board member.
“[H]e directed the recipients to his website and stated, ‘I HIGHLY suggest you visit this website and contact me afterwards,’” prosecutors said.
Later, according to prosecutors, Digati sent an email that said the “[c]lock is ticking” and prompted New York life employees, executives and a board member again to visit his website.
A grand jury returned the indictment after Digati was arrested by the FBI in March. The original case was filed via criminal complaint.
“In this computer age, cyber-extortion has become an emerging tool for criminals to hold businesses at virtual gunpoint, threatening them with widespread spamming and other Internet-based attacks,” U.S. Attorney Preet Bharara said in March, after Digati’s arrest.
“With the assistance of the FBI, our Office will work to safeguard the Internet and prosecute computer-savvy criminals who seek to harm the well-being of businesses and our economy,” Bharara said.
If you follow news about the so-called autosurf “industry,” the mind-boggling PR approach by some supporters of Steve Renner’s INetGlobal is apt to remind you of the bizarre approach employed by Florida-based AdSurfDaily and some members of the now-defunct Surf’s Up forum.
If you’re new to the ongoing saga of AdSurfDaily (ASD), the developing story about INetGlobal and the autosurf “industry” in general, ASD’s case is instructive. Although ASD claimed to be a professional advertising and communications firm, one of its first efforts to counter the federal government’s allegations was to compare prosecutors and the U.S. Secret Service to “Satan” and the 9/11 terrorists who killed nearly 3,000 people in New York.
ASD President Andy Bowdoin later asked for an evidentiary hearing in the civil-forfeiture case against the company’s assets — the same sort of case INetGlobal is facing — but Bowdoin then took the 5th Amendment, as did his chief executive officer.
In a comment that will live for the ages, one ASD supporter explained that Bowdoin, who was running the company with 10 bank accounts in his personal name and let it slip that ASD had $1 million in an account under a different name on the Caribbean island nation of Antigua, was “too honest” to testify.
One of the issues in the ASD case was the Ponzi issue — specifically, whether ASD had sufficient revenue to pay members “rebates” without resorting to taking money from new members to pay old ones. ASD’s evidentiary hearing lasted two days. The company did not submit an audited and certified balance sheet to refute the government’s Ponzi claims.
Instead, after the hearing — while ASD was awaiting a decision by U.S. District Judge Rosemary Collyer on whether it was operating lawfully and had demonstrated it was not a Ponzi scheme at the hearing — the company issued a news release.
The news release claimed ASD was expecting a revenue infusion of $200 million from a penny stock company. Performing no due diligence at all, some ASD members immediately raced to forums and websites to announce the company had a business deal worth one-fifth of a billion dollars.
Other ASD members sought to substantiate the company’s announcement and insisted that ASD prove its $200 million claim. The company then deleted the news release.
Meanwhile, ASD also claimed that Ponzi allegations brought against it by Florida Attorney General Bill McCollum had been dropped. Once again, ASD members who did no checking at all raced to forums and websites to announce the good news.
In response, McCollum’s office issued a statement that, not only had Ponzi allegations not been dropped, they’d never been filed to begin with. ASD was accused by McCollum of operating a pyramid scheme.
Earlier, some ASD supporters were part of a bizarre campaign to have McCollum charged with Deceptive Trade Practices for holding the view the company had broken the law. They also wanted to charge a Florida TV station with the same offense, apparently for broadcasting a story they deemed unflattering to ASD.
Like ASD’s Andy Bowdoin, Steve Renner — now ordered by a federal judge to wear a GPS tracking device as he awaits sentencing on federal tax-evasion charges and plans his defense for the civil Ponzi allegations against INetGlobal — is being portrayed as a victim of a corrupt government bent on destroying small business.
The approach is absurd. It did not work for Bowdoin, and it won’t work for Renner.
Renner, of course, is entitled to have supporters. Regardless, his supporters will be hard-pressed to persuade — let alone convince — the Ponzi-hating public that government evil is driving events at INetGlobal when the Secret Service already has produced an affidavit that says a bank closed down Renner-connected accounts prior to the raid because it suspected money-laundering.
Moreover, federal records show that one of Renner’s companies — a money-services business known as Cash Cards International (CCI) — previously had provided services for a Ponzi scheme that resulted in lengthy prison sentences for four people associated with the scheme.
When the receiver in the Ponzi case asked Renner to convert electronic credits to cash to fund the estate for Ponzi victims, Renner could not do it because he had spent the money as though it were his own, according to court filings.
As was the case with ASD, some INetGlobal members are attacking the media, amid claims there has been a rush to judgment.
Blaming Renner’s predicament on the media or suggesting the media have rushed to judgment also won’t work. The media did not invent the allegations; it simply reported them, as it would do in any other case.
Some INetGlobal members are pointing to an opinion piece on The Independent Business News Network (IBNN) website that the Star-Tribune newspaper of Minneapolis/St. Paul was guilty of “bias” in its coverage of the Secret Service raid on INetGlobal.
The IBNN piece, however, did not disclose that Don Allen, the author of the IBNN editorial, also worked as a spokesman for a Renner company. In short, while Allen was opining the Star-Tribune was guilty of bias, he did not make it clear that his own impartiality could be questioned.
IBNN’s Twitter site later reported that the Secret Service was “leaking” information to the PP Blog. It simply did not happen. The Secret Service leaked no information to the Blog.
While bashing the media in this context may provide some red meat for INetGlobal’s supporters, it does nothing to address the compelling reality that the allegations against Renner and his company are serious:
Ponzi scheme. Wire fraud. Co-mingling. Suspicious withdrawals. Accounts closed by a bank that suspected criminal activity. Money-laundering.
It’s the Minneapolis version of the ASD case. As was the case with ASD, INetGlobal is entitled to its day in court. It is entitled to argue passionately in its defense, and it is entitled to poke holes in the prosecution’s case. If the government does not have the goods, INetGlobal is entitled to win the forfeiture case and any future litigation that evolves.
At the same time, INetGlobal members who support the company are entitled to argue their point of view passionately. They are not entitled, however, to be taken seriously if they spin events in ridiculous ways that cannot pass the giggle test.
One difference between the INetGlobal forfeiture case and the ASD forfeiture case is that ASD did not appear to have gained traction in China. INetGlobal, though, does appear to have a substantial base of members in China. One of the issues in the INetGlobal case is language barriers: Can members who speak Chinese and have limited or no facility in English understand the business they joined and the complex litigation now engulfing the Renner companies?
Neither bashing the government nor bashing the media does anything to address those concerns. Such an approach leads to questions about whether INetGlobal’s members who have limited facility in English are being ill-served by the efforts of English-speaking members to spin the story in ways that avoid the unpleasant realities and cloud the critical issues, which can be confusing even if a member has perfect understanding of English.
On March 16, the PP Blog was provided a copy of an email some INetGlobal members received from their upline.
“[T]he first court appearance which took place yesterday [March 15] went in favor of iNetGlobal,” the email claimed. It did not mention that a federal judge ordered Renner to wear the GPS tracking device as he awaits sentencing on four felony counts of income-tax evasion.
Renner was convicted of the tax charges in December, more than two months prior to the Secret Service raid.
Among the other claims in the email was that “[t]he judge in the case ordered the ‘Feds’ to release iNetGlobal payroll monies back to the company.”
No such order appears to have been issued. Federal forfeiture law puts property that has been “arrested” — money in a bank account that has been seized, for example — in a state of limbo.
Judges may entertain motions to have seized money released, but may be reluctant to release it out of concern the money will be “lost” prior to the conclusion of a forfeiture case.
In general, the law seeks to avoid an inequitable result — for example, a decision to free money to pay employees could lead to a result in which less money would be available to compensate people who invested in a scheme and lost money.
In the ASD case, the company asked for $2 million to be released. Collyer said no after hearing live testimony, weighing briefs submitted by attorneys from both sides and deliberating on the issues for several weeks.
“The $2 million that ASD seeks to utilize are funds that were paid to ASD by advertisers and members,” Collyer ruled. “ASD has not demonstrated sufficiently that ASD is a legitimate business. Thus, the Court cannot release the funds to be used by the Company in its current form. And, if the plan to revamp ASD’s business proves unsuccessful, the citizens who paid that money will receive no advertising benefits and no return on their advertisement purchases. Quite simply, the money will be ‘lost’ forever.
“Despite the obvious hardships endured by the employees of ASD and a great number of its members,” Collyer continued, “the Court cannot ignore its oath to uphold the law, nor can it rightly take the hardships of some and transfer them unto others.”
Some of the same legal issues may come into play in the INetGlobal case, although the fact sets are not precisely the same. U.S. District Judge Donovan Frank is hearing the case, and the prosecution already has filed papers that reference ASD and a ruling by Collyer that ordered the forfeiture of more than $65 million to the government.
Another section of the email was worded in a vague way that implied Donovan had arrived at the conclusion that INetGlobal might have the upper hand in the case.
“Also indicated by the judge that inetGlobal should petition the court to have other funds released,” the email said.
The mere act of petitioning a court for a result does not mean the court will rule favorably. That’s already been demonstrated in the INetGlobal case.
Prosecutors sought to jail Renner, arguing he did not abide by the law while awaiting sentencing for his December tax conviction. Instead of jailing Renner, the judge ordered GPS tracking, enabling him to remain free.
In the ASD case, members routinely spread misinformation after Collyer issued orders. When Collyer ordered ASD to file papers by a certain date, some ASD sponsors told downline members the prosecution had been ordered to prove ASD was a Ponzi scheme by the same date or lose the case.
When Collyer ordered the government to file motions in response to Bowdoin’s pleadings by a certain date, ASD sponsors told downline members that the prosecution was in a panic because it could not prove ASD was a Ponzi scheme and was trying to find a way to save face.
For at least a year, the Pro-ASD Surf’s Up forum spread a rumor based on “inside information” that the prosecution had admitted behind closed doors that ASD was not a Ponzi scheme. The rumor persisted, despite the fact that the government filed a second forfeiture complaint against ASD-connected assets after the rumor started.
Like the first complaint, the second complaint alleged the company was operating a Ponzi scheme. Not even the filing of the second complaint stopped the rumor, which was being repeated as though the court filings that disproved it simply did not exist.
UPDATED 8:31 P.M. ET (U.S.A.) Federal prosecutors today asked the Clerk of U.S. District Court for the District of Columbia to enter a default notice for assets seized in the December 2008 forfeiture complaint against AdSurfDaily.
The clerk entered the notice, and the forfeiture of the property is pending. It will be finalized when U.S. District Judge Rosemary Collyer enters a forfeiture order. Collyer issued an order last week for the forfeiture of ASD assets seized in the August 2008 case.
Seized in the December 2008 complaint were the Tallahassee home of George and Judy Harris; a 2008 Honda car registered to the Harrises; a 2009 Lincoln luxury sedan registered to Bowdon/Harris Enterprises; a 2009 Acura registered to Hays Amos, an $800,000 building in Quincy, Fla. paid for in cash; jet skis; a Cabana boat; marine equipment; computers; and $634,266.13 surrendered by Golden Panda Ad Builder.
No claimant ever came forward in the December 2008 case, prosecutors said.
With Collyer’s forfeiture order in the August case, prosecutors now have title to about 99.2 percent of the liquid assets in the overall forfeiture case (August 2008 and December combined). A forfeiture order in the December case, which included only a fraction of the liquid assets, would give them title to 100 percent.
The real-estate, automobiles, computers, boat, jet skis and marine equipment are illiquid assets that must be sold before they can become part of a compensation pool for ASD victims.
Prosecutors alleged that ASD was operating a Ponzi scheme, while selling unregistered securities under the guise of being an “advertising” service and engaging in wire fraud and money-laundering.
UPDATED 5:34 P.M. ET (U.S.A.) In a development reminiscent of a claim made more than a year ago on the Pro-AdSurfDaily Surf’s Up forum that prosecutors had acknowledged behind closed doors that ASD was not a Ponzi scheme and refused to admit it publicly because of embarrassment, a new email missive surfaced today that suggested Bowdoin was on the verge of winning the forfeiture case.
Like previous unsubstantiated claims that the government was losing the case, today’s email was published on the Surf’s Up forum. Threadbare of supporting details, the email cited a third-party conversation with Bowdoin and implored ASD members to “get a little excited folks!”
“Andy explained a few things to me of which I cannot share them all, but I can say that the government attorney’s ‘have’ finally admitted to some things that are totally in our (ASD) favor,” the email claimed.
No mention was made as to what the government purportedly admitted that was helpful to ASD’s case. The email was posted a short time after news broke that U.S. District Judge Rosemary Collyer refused to step down from the ASD forfeiture case.
Collyer’s refusal came in response to a Dec. 17 motion filed by Bowdoin to disqualify her, but Collyer said Bowdoin no longer had standing in the case to make any additional claims or to reassert old claims.
Today’s Surf’s Up email did not address the judge’s fresh ruling, which was docketed only hours before the new round of unsubstantiated claims was made in the email published on Surf’s Up.
“Andy said that in cases such as the ASD one the government usually pushes so hard until they get a plea deal. He said that this happens 98% of the time,” today’s email claimed. “But, Andy would not sell us out and he has stood his ground firm since August of 2008 and because of that things are starting to turn around for ASD. This is something the government did not expect.”
Prosecutors called Bowdoin “delusional” in September 2009, asserting he was telling members one story and Collyer another. They asserted in earlier filings that he has “followers.”
Despite repeated claims on Surf’s Up beginning in the fall of 2008 that prosecutors had admitted ASD was not a Ponzi scheme, no such proof ever has surfaced. In fact, in December 2008, prosecutors filed a second forfeiture complaint against assets tied to the firm, again alleging that ASD was a Ponzi scheme.
Even though Surf’s Up claimed the government had admitted ASD was not a Ponzi scheme, no attorney for ASD ever argued a similar claim in court — in either the December 2008 or August 2008 forfeiture cases against the firm. There is not a single entry in the public record of the case that the government ever acknowledged ASD was not a Ponzi scheme.
In April 2009, prosecutors said Bowdoin signed a proffer letter in the case and had acknowledged the material allegations against ASD were “all true.” Bowdoin had at least two meetings with prosecutors over a period of at least four days last winter, and admitted ASD was operating illegally, according to court filings.
In September 2009, Bowdoin said in his own court filings that he had admitted “significant information against my interest.”
Today’s email urged ASD members to search for videos that might have been taken at ASDÂ functions, suggesting the videos could be used to prove the prosecution is lying.
“The reason Andy was calling was to get some help from the members. So, here it is…
“Andy wants to know if any of you took Videos and/or Audios of ‘him’ speaking at any of the ASD Rallies,” the email said. “The government is stating that Andy said certain things during the rallies and Andy is confident that he did not, but he does not have the proof without being able to provide the video/audio footage.
“Please share this message with your entire organization so that we can get it out to the
masses yet today hopefully to see if someone has the supporting evidence for Andy,” the email urged. “If any of you DO have the video footage (or audio recording) then transfer it to DVD and and contact Catherine Parker at [email address deleted].”
In August, some of Bowdoin’s supporters claimed that Collyer had ordered the prosecution to prove by Aug. 28 that ASD was a Ponzi scheme or dismiss the charges. A similar claim was made in April.
Collyer has never issued such an order.
Today’s email asked ASD members to send warm thoughts to Bowdoin and his wife, Edna Faye Bowdoin. Edna Faye Bowdoin and her son, George Harris, were named beneficiaries of ASD’s illegal conduct in the December 2008 prosecution filing.
Prosecutors alleged that Edna Faye Bowdoin and Harris used money from two ASD Bank of America accounts in June 2008 to open an account at a third bank into which more than $177,000 in illegal proceeds was deposited. Of that sum, more than $157,000 was transferred by wire to yet another bank and used to pay off the mortgage on the Harris home in Tallahassee.
Bowdoin described George Harris as head of ASD’s real-estate division, according to court filings. He also talked about establishing a business presence in South America. Only months later, the AdViewGlobal autosurf was born, purportedly operated from Uruguay and owned by George Harris and his wife, Judy Harris.
‘I asked Andy how Faye was doing and he was quiet for a moment and then said she is not doing so good,” today’s email said. “She is in a very severe depression and has been for quite some time ever since this whole debacle started.
“So, I have a personal favor to ask of you all. Can you take a few minutes to send her a card or a nice note at the very least to let her know that the members are still thinking about her and Andy?” the email urged.
Some ASD members immediately questioned why Bowdoin himself had not sent the email and instead relied on a third-party communication to ask for a favor. At the same time, members questioned what had become of Sara Mattoon, reportedly ASD’s official spokeswoman.
Prosecutors also made a veiled reference to the AVG autosurf in a September filing. In June, RICO attorneys suing Bowdoin for racketeering made a direct reference to AVG.
In the prosecution’s September 2009 filing, the government suggested an AVG prosecution could be in the offing.
“ . . . it may be the case that Bowdoin never intended to plead guilty when he agreed to debrief, and was just buying time while searching for a different exit strategy that failed to materialize. Maybe Bowdoin thought that before the government brought its charges he (like some of his family members) could move to another country and profit from a knock-off autosurf program that Bowdoin funded and helped to start,” prosecutors said.
Will the August 2008 forfeiture case against $65.8 million in the personal bank accounts of AdSurfDaily President Andy Bowdoin end before Christmas?
A federal judge suggested today that it might.
Bowdoin, 74, knew what he was doing when he submitted in January 2009 to the forfeiture of the cash and “knowingly and voluntarily” agreed never again to raise the claims, Judge Rosemary Collyer said in an order today.
Collyer added that the time to file claims has expired, thus agreeing
Andy Bowdoin
with an argument advanced by federal prosecutors earlier this month. But Collyer today left the door open for 30 more days before ordering the final forfeiture of the money to the government, issuing an order that any “potential claimant(s)” must “show cause in writing” before Dec. 20 why she should not grant the final forfeiture.
Earlier this month Collyer denied a bid by Bowdoin that began in February with his emergence as a pro se litigant to reassert claims to the money. Prosecutors said Bowdoin’s acts — and acts by dozens of other ASD members who had attempted to intervene in the case — were delaying the implementation of a restitution program for victims of the alleged ASD wire-fraud, money-laundering, securities and Ponzi scheme.
Collyer has denied dozens of bids by ASD members to intervene for money in the case, saying they had no standing and no “cognizable interest” because the money had belonged to Bowdoin alone at the time of its seizure.
On Nov. 10 alone, Collyer denied 13 such bids to intervene. All were filed by ASD members who shared a pro se litigation template. The judge repeatedly denied pro se attempts to intervene, denying the bids en masse in July, August, September and November. More than 70 such motions were filed in the case, dating back to February 2009.
Curtis Richmond, a California man, was one of the pro se litigants. Records show Richmond was a member of a Utah “Indian” tribe a federal judge in a separate case last year ruled a “complete sham” that tried to extort money from public officials to gain a favorable litigation result.
Richmond was hailed a “hero” on the pro-ASD Surf’s Up forum, even as thousands of ASD members were waiting to gain a share of a restitution pool the government is setting up for ASD victims.
Federal prosecutors have filed an affidavit that seeks to give the government permanent control over more than $65.8 million seized from 10 bank accounts in the name of AdSurfDaily President Andy Bowdoin.
Prosecutors already have permanent control over money seized from the bank accounts of Golden Panda Ad Builder in the same case.
Today’s move against ASD’s bank accounts followed quickly on the heels of a ruling Tuesday by U.S. District Judge Rosemary Collyer that Bowdoin would not be permitted to reassert claims to the money. Prosecutors said they intend to implement a restitution program for victims of the alleged ASD Ponzi scheme.
“[T]he time for filing pleadings to intervene has expired,” said Barry Wiegand, one of the prosecutors handing the case, in today’s affidavit.
In all, the government seized $65,838,999.70 from Bowdoin’s bank accounts, according to court filings.
The largest Bowdoin account contained more than $31.6 million. Another Bowdoin account contained more than $23.7 million. A third Bowdoin account contained more than $4.99 million. (An additional $107 would have made it an even $5 million.)
Three Bowdoin accounts contained the exact same amount: $1,000,338.91. Three other accounts contained smaller amounts, and one additional account contained more than $1.088 million. Bowdoin’s smallest account contained $13,286, prosecutors said.
Bowdoin surrendered claims to the money in January. He attempted to reassert his claims in February. Collyer ruled Tuesday that he would not be permitted to reenter the case.
Today’s affidavit by the prosecution asks the Clerk of Court to enter a default notice. The default would become finalized with a formal order of forfeiture from Collyer, meaning the government would perfect its title to the money.
In July, Collyer signed an order of forfeiture against assets once held by Golden Panda Ad Builder, giving the government formal title to more than $14 million seized from Golden Panda. Golden Panda ‘s assets were seized as part of the ASD probe.
Golden Panda President Clarence Busby’s five accounts — some of which also included the name of his daughter, Dawn Stowers — contained $14,045,598.07 in total, prosecutors said. The largest account contained exactly $6 million. Another Busby account contained more than $3.007 million. A third Busby account contained more than $2.282 million. A fourth Busby account contained more than $1.642 million. Busby’s smallest account contained more than $1.112 million.
In May, prosecutors tallied the ASD money as follows:
(a) $1,088,246.48 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(b) $31,674,039.13 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(c) $937,470.18 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(d) $13,286.89 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(e) $403,791.04 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(f) $4,999,893.00 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(g) $23,721,256.25 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(h) $1,000,338.91 from account #[deleted by this Blog] at Bank of America, in the name
of Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(i) $1,000,338.91 from account #[deleted by this Blog] at Bank of America, in the name
of Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(j) $1,000,338.91 from account #[deleted by this Blog] at Bank of America, in the name
of Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY.
Golden Panda money was tallied as follows in May:
(k) $2,282,999.72 from account #[deleted by this Blog] at Bank of America, in the name of
Clarence Busby Jr. and Dawn Stowers, DBA Golden Panda Ad Builder Deposit
Account;
(l) $1,112,978.42 from account #[deleted by this Blog] at Bank of America, in the name of
Clarence Busby Jr. and Dawn Stowers, DBA Golden Panda Ad Builder Operating
Account;
(m) $1,642,039.08 from account #[deleted by this Blog] at Bank of America, in the name of
Clarence Busby Jr. and Dawn Stowers, DBA Golden Panda Ad Builder Cashout
Account;
(n) $6,000,000.00 from account #[deleted by this Blog] at Bank of America, in the name
of Golden Panda Ad Builder; and
(o) $3,007,580.85 from account #[deleted by this Blog] at Bank of America, in the name
of Golden Panda Ad Builder.
The government seized more than $79.88 million combined from the bank accounts of ASD and Golden Panda.
Yesterday’s ruling by a federal judge that AdSurfDaily President Andy Bowdoin would not be permitted to change his mind about submitting to the forfeiture of tens of millions of dollars in a case brought in August 2008 dealt the embattled surf firm a crippling blow.
But a virtually unnoticed ruling yesterday by Judge Rosemary Collyer in a second forfeiture case brought in December 2008 against other ASD-connected assets was equally devastating — at least from the point of view of Bowdoin’s champions on the Pro-ASD Surf’s Up forum and unnamed members of a mysterious “group” of surf participants who had advised him earlier this year to embark on a scorched-earth campaign against the government.
Yesterday’s ruling by Collyer in the December case did not generate headlines, in part because Bowdoin had managed to rivet the attention of ASD members on the August case and the enormous sum of money involved. The ruling in the December case, though, was the second clear win for prosecutors yesterday because it maximized the leverage they can apply to destroy the alleged ASD Ponzi scheme operation.
In the December case, Collyer used exactly 13 words to discharge an order that had required prosecutors to defend against dismissal for failure to prosecute the action, which involves assets held by Bowdoin family members.
Collyer issued the order Oct. 5. Prosecutors responded to it Friday, saying Bowdoin and unnamed others were served “direct notice†in January 2009 of the complaint but did not file claims to property the government intends to seize as proceeds of a crime.
In short, Bowdoin was defending a case (August) and making personal claims to tens of millions of dollars with great fanfare — but was not defending the second case, which involved family members and far less money, at all.
Here is a question all ASD members should ask themselves: Why didn’t Bowdoin fight for the money and property seized in December?
If circumstances warrant, prosecutors now can argue that the reason neither Bowdoin nor family members defended against the second case was because they did not need the money and a plan was in place to generate even more cash — perhaps to replace all the property seized in the December case.
Prosecutors have suggested in court filings — through a veiled reference to the AdViewGlobal autosurf — that Bowdoin indeed had a plan to replace the lost money and property by operating an autosurf offshore. They could argue, for example, that while Bowdoin was negotiating to settle the August case, he was not negotiating in good faith because of a secret plan to launch a second surf to cover losses sustained by ASD.
And they could argue that, while Bowdoin was telling members in a conference call that the tens of millions of dollars seized in August belonged to them, he was so unconcerned about the December money and property that he didn’t bother even to stake a claim to it.
Along those lines, prosecutors could argue that, if the August money belonged to members as Bowdoin claimed, so, too, did the December money.
Why didn’t he file a claim to it if it belonged to members?
Prosecutors, in effect, could argue that the December money was chump change to Bowdoin because there already was a plan to replace it.
The ruling in the December case paves the way for the government to seek a default judgment to more than $1 million in personal property prosecutors said was acquired with illegal proceeds from ASD. Owners of the personal property include George and Judy Harris.
George Harris is the son of Bowdoin’s wife, Edna Faye Bowdoin. Judy Harris is the wife of George Harris.
Even Edna Faye Bowdoin had been a potential claimant in the December case. Prosecutors said she and George Harris opened a bank account in June 2008, funding it with an opening deposit of more than $177,000.
George Harris later called the bank on the telephone and caused more than $157,000 of the opening deposit to be transferred by wire to a third bank to pay off the mortgage on the Harris home in Tallahassee, prosecutors said.
In the December complaint, prosecutors described the transaction as money that had been obtained illegally by ASD and deposited in Bank of America in a wire-fraud and money-laundering scheme — and money that ultimately left Bank of America through the actions of Bowdoin, his wife and George Harris to be used in a second wire-fraud and money-laundering scheme involving two other banks.
There’s your answer to the question about why Bowdoin didn’t fight for the money in the December case. Fighting for it would have forced ASD’s rank-and-file to focus on the inconvenient facts of the twin cases, not the convenient story Bowdoin and his shills were putting out about the August case.
The December allegation, which laid out a case for wire fraud and conspiracy, put George Harris, Judy Harris and Edna Faye Bowdoin in jeopardy of losing their freedom. Andy Bowdoin had to know that — and yet he focused the attention of members on the August case, even saying he was inspired to keep fighting for them by a former Miss America who had to learn to walk again after being seriously injured in an automobile accident.
By not explaining to members the gravity of the December complaint — indeed, by virtually ignoring it in communications with members and relying on shills to deflect attention away from the more sinister elements of the case — Andy Bowdoin demonstrated that the rank-and-file was just a tool he used to serve his own ends.
Some of his most prominent shills even tried to keep members from filling out the government victims’ form. They were not serving the members at large; they were serving only themselves. They didn’t want to give up the money any more than Bowdoin — and they certainly didn’t want to join Bowdoin as a defendant in a criminal prosecution.
So, they painted the government as evil. And they chose to cloud the issues and not share information that members could use to make informed choices. People who insisted on discussing the actual facts were dismissed as “Rats, Bed Bugs, Maggots, Cockroaches And Everything Else.â€
You can look it up.
“In keeping with the likely outcome of this notification [of the December complaint], plaintiff also is preparing a motion for default judgment and a final order of forfeiture,†prosecutors said last week. “As things now stand, plaintiff expects that the Court will be in a position to grant such a motion, which should result in the dismissal of this case, by approximately January 15, 2010, that is, in 70 days.â€
No one from ASD filed a claim to an $800,000 building in Quincy, Fla., prosecutors said.
The building had been paid for in cash and had been described as the new headquarters for ASD and its dozens of employees. Regardless, the building ultimately proved expendable. That’s noteworthy, considering the fact that Bowdoin argued in the August case that the government was responsible for the job losses. He blamed the government — and then didn’t fight for the building he told employees would be their new home.
Also noteworthy is that neither George Harris nor Judy Harris filed a claim to their own home. At the same time, neither George nor Judy Harris filed a claim for a 2008 Honda automobile with a value of nearly $30,000. Prosecutors said the car also had been acquired with criminal proceeds.
Claims also were not filed for two other cars — a 2009 Acura and a 2009 luxury Lincoln sedan with a combined value of more than $80,000, prosecutors said. Marine equipment valued at more than more than $44,000 also was not claimed.
Fighting for members and employees? Hardly. Andy Bowdoin and his crew were lying to them — both overtly and through lies of omission.
The December case provided plenty of leverage to the prosecutors, and Collyer’s ruling yesterday means the case will proceed to an outcome, rather than dying on the vine.
Indeed, the “Rats, Bed Bugs, Maggots, Cockroaches And Everything Else†have been exposed.
UPDATED 5:18 P.M. ET (U.S.A.) A federal judge has denied the bid of AdSurfDaily President Andy Bowdoin to reverse his decision to forfeit tens of millions of dollars to the government in a case that features allegations of wire-fraud, money-laundering and operating a Ponzi scheme.
Andy Bowdoin in a video for 'Paperless Access.'
“As Mr. Bowdoin’s own descriptions of events fail to support these arguments, and there is no other reason to grant reconsideration . . . the Court will deny the motion,” said U.S. District Judge Rosemary Collyer.
Collyer also denied a motion by Bowdoin for a second evidentiary hearing, saying the matter was moot because she was not permitting him to reenter the forfeiture case after he previously submitted to the forfeiture. Collyer ruled after an evidentiary hearing last year that ASD had not demonstrated it was a lawful business and not a Ponzi scheme.
“[N]othing in Mr. Bowdoin’s own sworn statement justifies the conclusion that he was mistaken [in releasing the claims in January], that the Government engaged in any misrepresentation or misconduct, or that his attorney provided bad advice,” Collyer ruled. “He also fails to present any meritorious defense.”
The ruling was a crushing blow to Bowdoin, and Collyer minced no words, saying evidence in the forfeiture case against him “appears to be strong” and that Bowdoin “balked” after submitting to the forfeiture.
“The Government charges that Mr. Bowdoin operated a Ponzi scheme on the Internet,
whereby he, using ASD as a vehicle, bilked hundreds of people,” Collyer said. “Presented by affidavit and testimony outside the crucible of a criminal trial, its evidence appears to be strong. In the face of the civil in rem proceedings and the expected criminal prosecution, it is no surprise that his criminal lawyer would recommend a cooperation plea with demonstrated early acceptance of responsibility, i.e., withdrawal of claims to the seized assets, so that Mr. Bowdoin might earn a motion for a downward departure under Section 5K1.1 of the United States Sentencing Guidelines and/or 18 U.S.C. § 3553, both of which allow the Court to impose a sentence below the statutory minimum to reflect a defendant’s ‘substantial assistance’ to a Government investigation.”
Bowdoin’s former attorney, Stephen Dobson, whom Bowdoin’s current attorney Charles A. Murray claimed served Bowdoin poorly while Bowdoin was meeting with prosecutors last winter to settle the forfeiture case and discuss a potential criminal plea, behaved responsibly, Collyer said.
“Such an approach from counsel could be seen as the norm when the Government’s evidence is strong,” Collyer said. “What Mr. Bowdoin hoped to gain from his release of claims/early acceptance of responsibility and his debriefing with the Government was a promise of no jail time. When that was not forthcoming from the Assistant United States Attorney, Mr. Bowdoin balked and tried to back up, as if he had not already released his claims and talked to the Government.”
Collyer cited several claims from Bowdoin himself when issuing her ruling this afternoon, repeating Bowdoin’s own words back to him to demonstrate he had not been ill-served by Dobson or lied to by the government: (Emphasis added.)
Dobson represented to me that I could possibly avoid prison or get a reduced sentence if I agreed to disclose details concerning ASD and releasing the assets.
I also signed a document stating that I would release my claims in the abovecaptioned civil in rem forfeiture proceeding, again thinking that necessary for a possible avoidance of a prison term.
I did all of this on the understanding that by cooperating I could possibly avoid a prison sentence.
I agreed not to exercise my rights in the civil forfeiture proceeding, anticipating from representations made by Dobson that this could possibly keep me out of prison.
Dobson lead [sic] me to believe that if I cooperated there was a possibility that I would not be incarcerated or imprisoned.
I believed that my cooperation would still result in a criminal sentence that could possibly not include imprisonment or incarceration.
[Prosecutor William] Cowden explained that I would be subject to the maximum penalty under the statute, but that he would inform the judge that I cooperated.
I slowly came to understand what I understood from Dobson not to be the case: that my agreement to cooperate provided me no benefit in the criminal matter except the possibility of a reduced sentence if the judge desired which would still be a life sentence.
“Each of these statements indicates that Mr. Bowdoin completely understood what he
was doing: releasing his claims and cooperating to ‘possibly avoid a prison sentence,’” Collyer said.
In September, prosecutors argued that any thought by Bowdoin that a $100 million, wire-fraud and Ponzi scheme crime would not result in imprisonment upon conviction was ludicrous.
Collyer said the allegations were serious and easily could result in prison time.
“If he proceeds to trial and the evidence persuades a unanimous jury beyond a reasonable doubt that Mr. Bowdoin is guilty as charged, he will face a term of incarceration for sure,” Collyer said. “Mr. Dobson’s hope was to avoid such a result by avoiding a trial and persuading the Government to file motions with the Court that could be used to argue for a sentence that did not include jail time.”
Collyer said Bowdoin’s behavior has been puzzling.
“It is very strange that Mr. Bowdoin passed that opportunity by, despite clear knowledge that it ‘could possibly keep me out of prison,’” she said. “Perhaps the delay in obtaining an indictment has led Mr. Bowdoin to believe that he will not be indicted after all.”
Collyer also pointed to a stated belief by Bowdoin that a grand-jury indictment had been returned, saying she hasn’t see one.
“Mr. Bowdoin believes the Government ‘submitted charges before a grand jury on or about May 2009,’†Collyer said, using Bowdoin’s affidavit as her resource. “[B]ut as of this date no indictment has been returned against him in a federal court.”
Federal prosecutors and agents today began the process of seizing assets from Florida attorney Scott Rothstein, amid allegations he had been operating a Ponzi scheme involving hundreds of millions of dollars since 2005.
The early probe is shaping up in largely the same way as the early probe into AdSurfDaily, a Florida business accused last year of operating a $100 million Ponzi scheme.
Rothstein, for example, has not been arrested. Agents from the FBI and IRS seized real estate, boats, cars and bank accounts today. Meanwhile, prosecutors brought a civil-forfeiture case against property tied to the alleged scheme.
Prosecutors used largely the same approach against ASD. ASD President Andy Bowdoin, for example, was not taken into custody when news of the allegations broke. As is the case with Rothstein, the ASD probe began with forfeiture complaints.
Like the ASD case, the government believes others perhaps were involved in the fraud. Unlike Bowdoin of ASD, however, Rothstein does not appear to be enjoying an early surge of support.
In the context of Ponzi schemes, civil forfeiture helps the government stop potentially massive financial crimes in their tracks, before they can mushroom and consume even more wealth. Investigating Ponzi schemes can be a mammoth undertaking that involves reverse-engineering thousands and thousands of transactions and following global and electronic trails.
UPDATED 3:40 P.M. EDT (U.S.A.) A federal judge said she will not recuse herself from the AdSurfDaily forfeiture case and has denied a motion by Curtis Richmond to disqualify herself. Meanwhile, the judge also denied motions by other pro se litigants in the ASD case.
Richmond filed the motion to disqualify Judge Rosemary Collyer, claiming the judge had displayed “extreme bias.” But Collyer denied the motion this afternoon in a Memorandum Opinion. Richmond is associated with a sham Utah “Indian” tribe and has a history of filing 11th-hour motions to force judges to recuse themselves from cases.
“Mr. Richmond is not a party entitled to seek disqualification,” Collyer said. “Mr. Richmond further contends that he can seek this Court’s recusal under Rule 63 of the Utah Rules of Civil Procedure, erroneously referring to the Utah Rule as a federal rule. The Utah Rules of Civil Procedure do not apply in this Court. Even if Mr. Richmond had attempted to proceed under the applicable federal statute governing disqualification, 28 U.S.C. § 455, he would be barred from proceeding because he is not a party to this case.”
Collyer also denied a motion by Richmond to unseat the judge that accused her of treason, declaring the matter moot.
Other pro se litigants whose motions were denied today include Christian Oesch, Jeffrey Robinson and Joan Hughes.
“Movants here are not the first to attempt to intervene in this case and seek its dismissal,” Collyer said. “The Court addressed previous motions to intervene in a July 16, 2009, Memorandum Opinion, wherein it found that the motions to intervene must be denied because the movants did not have a cognizable interest in the defendant properties, and therefore did not have standing to contest this forfeiture action.”
“The movants here are in the same position,” Collyer said. “Since these movants are ineligible to intervene and seek dismissal, they are not parties to the case and their motions to set aside forfeiture will also be denied.”
Collyer denied seven pro se motions to intervene July 16.
Is your purported debt coach or foreclosure-relief expert a “sovereign citizen” with an avowed contempt for the U.S. government and banking in general? Is he (or she) actually trying to recruit you into a criminal scheme that only will add to your stress? Is your last disposable dollar going into the pockets of a domestic extremist posing as a patriotic problem-solver and putting you in the position of having to explain incomprehensible legal filings to a judge?
