EDITORIAL: ASD By The Numbers: Why America And The World Should Be Shocked — And Why Serial Autosurf And HYIP Promoters Should Be Prosecuted
ASD's Andy Bowdoin.
UPDATED 12:04 P.M. ET (U.S.A.) In court filings this week in the AdSurfDaily autosurf Ponzi scheme case, federal prosecutors in the District of Columbia revealed a series of jaw-dropping numbers. The biggest of these is 500,000 — the number of pages of emails gleaned so far in the investigation, which began in July 2008.
Because prosecutors put the qualifier “at least” on the already-staggering number, it is clear the number actually could increase. Each of the pages is subject to the discovery process, meaning that attorneys from both sides and perhaps the court itself faces the monumental challenge of sifting through at least half a million pages of scheme-related correspondence.
Other big numbers in the alleged $110 million ASD Ponzi include 100,000, the number of pages of bank records, and 5,000, the number of pages of documents that emerged after the U.S. Secret Service searched ASD’s office in Quincy, Fla., and the home of company president Andy Bowdoin.
To date, investigators have identified 40,000 potential ASD victims. This number also could grow because there is reason to believe that “there may be members who provided funds to ASD but whose information ASD did not enter into its database,” according to prosecutors.
ASD’s database included information on 97,000 members. Some participants have claimed ASD actually had 120,000 members. Regardless of the final number that emerges, ASD created victims by the tens of thousands, including victims who do not live in the United States, prosecutors said.
The import — and the danger of these numbers — is that ASD is only one autosurf. There may be hundreds if not thousands of autosurfs operating in the world at any one time, along with hundreds or thousands of HYIPs. Like other autosurfs and HYIPs, ASD was promoted on Ponzi forums such as TalkGold, MoneyMakerGroup and ASA Monitor. The Ponzi pitchmen love American money, and commission-grubbing American salespeople and serial promoters who play dumb to line their pockets at the expense of their fellow countrymen specialize in spreading the misery globally.
In May, the PP Blog reported on criminal charges filed against Nicholas Smirnow, the alleged operator of the Pathway to Prosperity (P2P) Ponzi and HYIP scheme. The numbers that have emerged from that alleged scheme are equally stunning: $70 million fleeced from 40,000 victims in 120 countries from “all of the permanently inhabited continents of the world,” according to the U.S. Postal Inspection Service.
The criminal complaint filed against Smirnow specifically references the TalkGold, MoneyMakerGroup and ASA Monitor Ponzi forums — the same forums from which ASD and countless other schemes have been promoted.
Legisi, yet another alleged scheme pitched at the forums, also produced some big numbers. Among them are $72.6 million fleeced from at least 3,000 victims. Matthew Gagnon, one Legisi pitchman, netted $3.8 million alone from the scheme, according to the SEC.
So, in just the three alleged schemes referenced in this column — ASD, P2P and Legisi — the numbers shape up like this: at least $252.6 million gathered from at least 83,000 victims. If the P2P and Legisi cases are shaping up like the ASD case from the standpoint of paper production, investigators, attorneys from both sides and the courts may have to go through more than a million pages of documents and corresponding bank records to make sense of it all.
Meanwhile, the wink-nod, serial promoters continue to ply their trade on the Ponzi boards — all while the U.S. and world economies are trying to navigate the choppiest waters since the Great Depression. While the serial promoters are lining their pockets at the expense of Moms and Pops from virtually every corner of the earth, they are anticipating the danger signs consistent with the implosion of their currently favorite Ponzi — and they are preparing their next round of lies to protect their illicit profit pipeline and explain away the problems that inevitably will emerge.
Some of the professional criminals will tell their marks that it is their duty to be patient when Ponzi payments slow down. They’ll add that problems affect all enterprises regardless of size, and that it’s not unusual for payment bottlenecks to occur. They’ll explain that it likely is a problem with software or the need to acquire a new server to accommodate traffic. After all, they’ll say, “growing pains” are something to celebrate because they signal the success of the enterprise.
And the serial criminals also will talk about a doubting recruit’s duty to be loyal to the enterprise. After all, they’ll explain, the company is doing the right thing by acquiring the equipment and manpower needed to streamline operations and thus return to a normal payout schedule.
While the professional Ponzi criminals are explaining all of this, investors will become further separated from their money before the final round of excuse-making begins. Investors will be cautioned not to contact the authorities and told not to contact the payment processors. After all, the serial pitchmen will explain, if the authorities seize the cash or if the payment processors freeze the accounts, no one will get paid.
When the scheme ultimately collapses, some of the serial criminals will shrug their shoulders and feign surprise. They’ll explain why they had every reason to believe that this one was different, that they’d been assured by the Christian operator it was different. No matter, they’ll say, perhaps positioning themselves as people of faith. Recruits who invested more than they could afford to lose have only themselves to blame, they’ll claim. (This is if they call it “investing” at all; many serial criminals avoid that word like the plague. After all of these years and all of this Bible-thumping, they still apparently believe that it’s possible to skirt securities laws by avoiding the word “investment” and calling it something else.)
Then they’ll unapologetically move on to the next scam. After all, they’ll explain, they have a right to make a living. Some of them will explain that the government, which refuses to see the beauty of the autosurf and HYIP models, is to blame. Along the way they’ll create some clone promoters, and the clones will multiply. The clones will add to the purported, pro-Bible (and antigovernment chorus) — and before long, investigators trying to reverse-engineer a single case will be sifting through 500,000 pages of emails, 100,000 pages of bank records and 5,000 pages of records created as the result of the execution of a search warrant or as a result of actual documents seized.
Agents then will begin the mind-numbing and time-consuming process of identifying victims by the tens of thousands.
Some of the victims will lose their homes because they borrowed against their equity to take advantage of “bonus” ad packs and to maximize their “earnings” through “compounding.” Others will have lost savings set aside to educate their children. Still others will have lost their life savings and money set aside for retirement.
Many of the people who created all the pain will sprint back to the Ponzi forums — and the government will be left to clean up the colossal mess. The Ponzi pitchfest is in constant motion as property values decline in neighborhood after neighborhood, driven by the foreclosures glut. The Stepfords among the promoters will write their Congressman or Senator or perhaps the Inspector General at the Justice Department.
They’ll more or less say that it would be in the interests of America if the Congressman or Senator or Inspector General would see fit to fire all the prosecutors and agents who made these unseemly events occur.
And then they’ll gather up their lists of suckers and try to recruit them into yet-another MLM, autosurf or HYIP nightmare. This they will call “freedom.” Some of them will be angry. Some of them will write rambling diatribes on forums. Invective will be part of the diatribes. Some of them will call public officials “Nazis” and “Socialists,” perhaps even in the same fractured paragraph. Some of them even will try to sue the government or have the prosecutors and judges charged with crimes. They’ll talk about “treason” and high crimes against the Constitution.
What they will never do is make any sense.
It is impossible to imagine that any government agency has the resources to take down all of the corrupt MLMs, autosurfs and HYIPs. But one can imagine a systematic process by which the government identifies the serial promoters and plans a litigation strategy from which will emerge the “shot heard round the world” of corrupt online investment “opportunities.”
That day cannot come soon enough — and the numbers demand it: more than $250 million gathered from victims of just the three alleged schemes referenced on this page, perhaps 1 million or more emails and other documents produced by the investigations, at least 83,000 victims from virtually all corners of the earth, an untold number of agents/investigators from multiple government entities forced to sift though monumental piles of evidence.
It is clear that wealth is being drained by the billions. It is equally clear that vast sums of money have gone missing in the Age of Terrorism.
Clearest of all, however, is that the corrupt MLMs, autosurfs and HYIPs cannot thrive without their greedy and dangerous promoters — and that highly public lawsuits and early morning raids designed to hold the wink-nod Ponzi pitchmen accountable would send an unmistakable message that pain is in your future if you promote these criminally toxic businesses. Serial promoters deserve the same treatment as mid-level drug dealers.
No economy can thrive if a single case among thousands of potential cases is producing 500,000 pages of emails and creating 40,000 victims while consuming tens of millions of dollars — and if “shell companies,” the “shadow banking system” and wink-nod, serial promoters are driving the wanton criminality and letting the cancers metastasize globally.
Here’s hoping such an operation aimed specifically at corrupt MLMs, autosurfs and HYIPs already is under way.
Patrick:
BRAVO! One of your best articles. It is our hope that ASD will be the beginning of law enforcement going after the heavy promoters of these scams, and in all the other scams they promoted after ASD collapsed. Many names come to mind as they appear over and over in scam after scam.
I think it is also time to go after all the so-called financial forums as they are the enablers for the growth of these programs. One you mentioned suddenly disappeared, and there has been a lot of speculation as to why that happened. The other two you mentioned are owned by the same parties, and all of a sudden have become very unfriendly to anyone who dares challenge the validity of any program being promoted there. A major departure from their previous stance. This keeps the ‘newbies’ from being able to hear and understand not all what they are being told is the truth, and how to check things out for themselves. This means that even more people are going to lose their money to these scammers.
For the first time I had a mod actually post on an open forum that he was looking for any reason to ban me. At least he had the guts to say so openly and not hide it like most try to do. Now mind you this is supposed to be an open discussion forum for everyone. Anyone who posts exposing these scams either has had their posts deleted, moved to another thread, received a warning, or all of the above at the same time. They think this is their way of protecting the scammers so they can steal more money, and keep their revenue flowing. They need to think again.
No doubt 2011 is going to be a very interesting year for the scammers and law enforcement.
Patrick: Great Article!
I agree with you and Lynn that closing down the ponzi forums would go a long way towards stopping the proliferation of these schemes. I hope they string the ponzi forum owners up by the “perp walk” butts.
The problem is that, to the uninitiated, the appearance of the hyip type “investments” seems legitimate when shown on a professionally designed website with fake credentials, bogus track records and claims of “we want to help the little guy get what only the big boys used to be able to get”, bla, bla, bla.
I guess what really amazes me is that going after the ponzi forums would be the logical choke point to stop the majority of the scams. Why that isn’t being done astounds me. Otherwise, the government is left to chasing down problems after they have grown and they have to investigate, build a case, prosecute and spend years and millions of dollars doing what could be done by cutting off the scam at the source.
Cut off the flow of information about these bogus “investments” at the source and it will be much harder for the purveyors of scams to thrive.
Just my opinion, I could be wrong. LOL
ARWR
Could be. But you’re not. ;^)
arandomwalkrant: I agree. You have hit the nail on the head. The forums, enable the hard core ponzi pimps to find their bait. The bait, better known as “believers” will then run with the schemes and promote them to all they know, on and offline.
There are literally hundreds of forums that permit the promotion of so-called financial schemes. However, if only the principal ones were held accountable for what they permited, the rest would realise that they can no longer fly under the radar and either close or clean up their acts.
The question of the other enablers – the payment processors who process (and in many cases launder) the monies for the schemes, is another story which also has to be dealt with.
Lets hope 2011 is the year.
I say leave up the forums and take down the second tier of enablers who’s ready made downlines make the initial surge of popularity possible.
The forums are the gathering point. What greater place for the authorities to cast their nets.
That said, I’d like to see the forum owners arrested and prosecuted as enablers along with the serial shills who we all know and detest. Publicly indicting them all at once would be a great warning shot to those who would like to pick up their banners and run with them.
Most of the forum owners and shills have been in multiple scams. It’s time the RICO statutes come into play.
Absolutely true, IM(very)HO,
Keep ’em visible and keep ’em talking, I say.
“hoist with one’s own petard” is such a satisfying way for things to play out.
Patrick,
What type of court filings did the Federal prosecutors file this week? I couldn’t quite figure it out based on what you wrote in your editorial, but I believe Andy’s next court appearance was scheduled for Friday, January 14th. Were the prosecutors seeking to postpone today’s hearing? Just curious.
Great article, of course. Andy’s criminality is absolutely staggering. What a psychopath he is! He’s right, everyone else is wrong; he sees himself as the victim, not all the people who believed all his lies, and sent their money to him. He’s such a GOOD psychopath that he had (or has) a bleating herd of followers singing his praises, even as he was exposed as a felon and a charlatan, and the company was exposed as a giant money-pit of a Ponzi scheme. There are none so blind, etc….
How’s Maddy the Wonder Dog?
Marci
Hi Marci,
The government filed:
* A motion pertaining to victims’ rights in which it said it had identified approximately 40,000 known potential victims and asked the judge to approve a web-based notification system (email/websites).
* A motion (unopposed) to toll the Speedy Trial Clock in which it talked about the 500,000 pages of emails and 100,000 pages of banking records, etc., in the ASD case.
Bowdoin’s side filed motions pertaining to disclosure/discovery.
At the moment, she’s rubbing the sleep from her eyes while at once performing her morning ritual of half-barking at the snow plow on the street. She used to give it a full-throated bark, but now it’s down to a half-bark. :-)
Patrick
Marci,
I saw nothing about anything scheduled for Saint Uncle Andy today on the court docket. I try to keep an eye on PACER without running up the bill. As soon as I see a scheduled appearance, I’ll let Patrick know…
Marci, the only date I see on the docket is this:
“Mr. Bowdoin shall file a Rule 21 motion no later than January 18, 2011”
Let’s see what he and his lawyers have come up with to justify moving the trial away from DC and Judge Rosemary Collyer.
Oops, I apologize, you are correct:
A Status Conference is set for 1/14/2011 at 11:30 AM in Courtroom 2, Prettyman Building, 2nd Floor, before Judge Rosemary M. Collyer.
Well 11.30 EST has been and gone. Wonder what happened – apart from the Honourable Judge Collyer splitting her sides laughing
Hi Don,
Dates when Andy may hear more bad news tend to stick in my mind. Pretty evil, huh? (Hee hee)
Sounds like Maddy is growing up!
Thank you for addressing this.
Greedy and dangerous Promoters
HOW MANY OF THE PROMOTERS OF THESE PROGRAMS ARE ALREADY FELONS ?
MOST PEOPLE WOULD BE SHOCKED TO FIND OUT THE PERSON / PEOPLE THEY TRUSTED WITH THEIR MONEY
ARE ALREADY FELONS .
“Clearest of all, however, is that the corrupt MLMs, autosurfs and HYIPs cannot thrive without their greedy and dangerous promoters…”
So True, Something Needs To Be Done.
Wealth is being drained by the billions. It is equally clear that vast sums of money have gone missing…
“Serial Promoters who play dumb to line their pockets at the expense of their fellow countrymen specialize in spreading the misery globally.”
WELL SAID PATRICK ………..
I believe if career Promoters were held accountable much of this kind of loss and fraud would stop !