TEA LEAVES: AdSurfDaily Case About To Come To A Head?

EDITOR’S NOTE: Reading the tea leaves in court cases often is an iffy proposition, and there often is no way to know what will happen when. Readers are advised to keep those thoughts in mind when considering the information in this story.

UPDATED 7:03 P.M. EDT (U.S.A.) Recent court filings suggest — although it is far from clear — that dramatic events could occur soon on at least three fronts in the AdSurfDaily case.

Consider:

• The government today added two prosecutors to its roster in the main civil-forfeiture case against tens of millions of dollars and real estate seized in August 2008 from ASD President Andy Bowdoin. Both new members of the team are experienced in criminal prosecutions, including appeals. One of the prosecutors has served in complex cases involving international banking and money-laundering, as well as cases involving the Federal Bureau of Investigation and the Drug Enforcement Administration.
• A federal judge, noting that no claimants have stepped forward in a second forfeiture case filed in December 2008 and targeted at assets tied to ASD, now has ordered prosecutors to state their intentions by Nov. 6 on how they intend to proceed in the December case. Potential claimants included Bowdoin and his wife, Edna Faye Bowdoin, and her son, George Harris. Judy Harris, the wife of George Harris, also was a potential claimant, as was Hays Amos, a former ASD employee.

The Harris home in Tallahassee was seized in the December complaint, as was a car registered to George and Judy Harris. Prosecutors said a mortgage of more than $157,000 on the Harris home was retired with illegal proceeds from ASD, adding that Edna Faye Bowdoin and George Harris worked together to establish a bank account into which ASD funds were deposited and quickly wired to a third bank to pay off the mortgage.

Prosecutors said the account was opened June 10, 2008, at Capital City Bank, less than two weeks after ASD concluded a rally in Las Vegas at which Andy Bowdoin exhorted the crowd to internalize the thought of acquiring large sums of money.

The account was opened in the name of Bowdoin/Harris Enterprises Inc. and was funded with an opening deposit of $177,900.12 from two ASD accounts at Bank of America.

Less than two weeks later, the lion’s share of the money was used to retire the mortgage on the Harris home — a home for which the couple has not filed a claim.

(Emphasis added in the paragraph below.)

“On or about June 23, 2008, George Harris requested via a telephone call that an electronic wire for $157,216.79 be sent from his Capital City Bank account to Citi Mortgage Inc.,” prosecutors said. “The reference that Mr. Harris provided was ‘REF: PAYOFF JUDY HARRIS #XXXXXX2292.'”

The clear implication from the language of the complaint was that money from ASD — money prosecutors said Andy Bowdoin had acquired through a wire-fraud and money-laundering scheme — had been used a second time to commit wire fraud, this time by George Harris with help from his mother, Bowdoin’s wife.

Four members of the Bowdoin/Harris family were involved in one way or another in the transaction, with George Harris becoming a supplemental beneficiary and Judy Harris becoming the final beneficiary. The mortgage on the property was recorded in Leon County, Fla, as paid on July 11, 2008, with the filing of a “satisfaction of mortgage.”

Another way to look at the transaction is that it put each of the principal members of the Bowdoin/Harris family at great risk of getting arrested and, upon conviction, going to prison.

George and Judy Harris later emerged as “Trustees”  — and then the purported owners of the AdViewGlobal (AVG) autosurf. Bowdoin was the silent head of AVG, members said.

AVG purported to he headquartered in Uruguay. It launched in the wake of the filing of both forfeiture complaints, and also the filing of a racketeering lawsuit against Bowdoin and ASD by individual members. The racketeering lawsuit first was filed in November 2008 in Florida — in the immediate aftermath of a major court ruling against ASD in which a federal judge said ASD had not demonstrated it was a legal business and not a Ponzi scheme at an evidentiary hearing last fall.

Attorneys for the plaintiffs dismissed the case in Florida, and refiled it in the District of Columbia in January 2009. AVG formally launched in February 2009, despite all the litigation that had piled up around Bowdoin and the Bowdoin/Harris family.

On Sept. 25, prosecutors made a veiled reference to AVG in a court filing in which they accused Bowdoin of trying to lie his way back into the August 2008 civil-forfeiture case after he had already submitted to the forfeiture in January 2009.

Here, in its entirety, is the Sept 25 reference: (Italics added.)

“Maybe Bowdoin mistakenly thought that he could con the government into believing that he was just a harmless, foolish old man. Ironically, after telling thousands of investors that he intended to build the world’s preeminent advertising company for them, in order to make them 100,000 millionaires, Bowdoin tries to con this Court, telling it that because he’s 74 and has a heart condition, any incarceration amounts to a death sentence. See Document #132 ¶8. Was he lying then, or now?

“Or, 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.

“Or, maybe other attorneys Bowdoin employed, or ASD’s other promoters convinced Bowdoin that if he paid some of the fraud proceeds the government had missed to them (the money laundering as Mr. Murray reports), they could help to circle the wagons or otherwise do a better job than Akerman Senterfitt did when it tried to prove that free advertising was a true profitable sale and not a poorly disguised, and unsustainable, investment opportunity.

“But what is clear from Bowdoin, himself, is that neither the government, nor Bowdoin’s experienced criminal defense counsel, ever told Bowdoin that it was reasonable for a defendant convicted of operating a $100 million wire fraud scheme to expect probation.”

Three days later, on Sept. 28, prosecutors returned to court, filing a supplemental brief and a U.S. Secret Service transcript of an audio recording Bowdoin or a person who aided him posted online.

(Italics added.)

“Remarkably, Bowdoin even suggests to those members participating in the conference call that the money taken from his bank accounts and, supposedly, never constituting an investment, belongs, not to Bowdoin, but to the membership. It is clear that this con man cannot manage to keep his stories straight,” prosecutors said.

Bowdoin’s claim in the transcript of the audio recording is at odds with his own court filings — filings in which he claims to be the owner of the seized funds. It is clear from the language prosecutors used in their supplemental filing that they now have the option of arguing that Bowdoin’s statement to the membership was tantamount to a confession that he was selling unregistered securities as investment contracts, not advertisements as he had claimed.

In the hours that followed, some ASD members appeared to suggest in various emails that ASD members should not cooperate if contacted by the Secret Service.

Given the nature and the content of recent filings from parties on both sides of the case, the ASD prosecution could be building to a crescendo. Prosecutors have many options, and appear to be preparing to use them — up to and including acting on the December forfeiture complaint at the moment that best suits their strategy.

There could be dramatic developments — and surprises — ahead.