PatrickPretty.com

Author: PatrickPretty.com

  • Judge Jails New York Man After Arrest On Cyberstalking, Wire Fraud And Mail Fraud Charges; Vitaly Borker Used Multiple Identities To Bully, Terrify Online Shoppers, Feds Say

    A New York man was arrested by the U.S. Postal Inspection Service yesterday in a bizarre case in which it was alleged he threatened to assault customers of his bogus online eyeglasses shop.

    Vitaly Borker, 34, of Brooklyn, was denied bail. He bizarrely told the New York Times weeks ago that he threatened customers as a means of improving Google search-engine listings for his company, DecorMyEyes.com.

    Federal prosecutors now say Borker used multiple identities in his cyberstalking scheme and was selling “counterfeit and inferior quality goods.”

    “Online consumers should never be in fear for their safety simply because they have chosen the convenience of Internet shopping,” said U.S. Attorney Preet Bharara. “But that is what allegedly occurred in this case. Vitaly Borker, an alleged cyberbully and fraudster, cheated his customers, and when they complained, tried to intimidate them with obscenity and threats of serious violence.”

    The allegations against Borker, who allegedly used the aliases of “Tony Russo” and “Stanley Bolds,” are stunning. Borker allegedly:

    • Called one customer a “[f******] whore” and threatened to “come after” and “get” the victim and her husband and to sue them.
    • Told another customer he knew where she lived, that he lived only “one bridge away” and that he would come to her home and carry out a violent sexual assault. The threats continued repeatedly.
    • Told the same customer he had sued her in small-claims court and provided a bogus docket number.
    • Emailed a photo of the victim’s residence to the victim. Later advised her that “I AM WATCHING YOU!”
    • Told another female victim that he knew where she lived, that he was watching her and threatened to “kick her ass” and carry out a violent sexual assault.
    • Threatened a male customer and emailed the customer’s work colleagues, accusing the customer of being a narcotics user and describing the customer to his colleagues as a homosexual.
    • Called another customer vulgar names and threatened to “crush” eyeglass frames the customer had returned and “ship the powder back to him.”

    After Borker’s arrest, U.S. Magistrate Judge Michael H. Dolinger denied him bail, saying that the defendant was either “verging on psychotic” or had “an explosive personality,” according to the New York Times.

    The Times earlier had reported that Borker claimed to have mistreated customers because it helped him improve his search-engine rankings.

    Read the federal complaint against Borker.

  • Walmart Joins ‘If You See Something, Say Something’ Terrorism-Awareness Campaign Operated By Department Of Homeland Security; Agency Takes Message To The Heartland As Critics Post Rants On YouTube

    DHS Secretary Janet Napolitano.

    It has become kneejerk sport to deride Department of Homeland Security (DHS) Secretary Janet Napolitano as “Big Sis.”

    Today the attacks on Napolitano turned even more caustic, with the announcement by both DHS and Walmart that Walmart had joined the DHS-operated “If You See Something, Say Something” campaign.

    Walmart issued a news release today saying it was proud to become part of the campaign, linking its announcement to a 44-second DHS video that will begin playing in 588 Walmart stores across the United States in the coming weeks .

    “Homeland security starts with hometown security, and each of us plays a critical role in keeping our country and communities safe,” said Napolitano. “I applaud Walmart for joining the ‘If You See Something, Say Something’ campaign. This partnership will help millions of shoppers across the nation identify and report indicators of terrorism, crime and other threats to law enforcement authorities.”

    Snarky, vile comments were posted on the DHS YouTube site in response to the video — some of the sort that made the “Big Sis” slam seem almost like a compliment.

    Walmart, though, is not alone in backing the campaign.

    Other DHS partners in the campaign include Mall of America, the American Hotel & Lodging Association, Amtrak, the Washington Metropolitan Area Transit Authority, sports and general aviation industries and state and local fusion centers across the country.

    Walmart’s announcement that it had joined the campaign occurs against the backdrop of a recent terrorist plot targeted at a community Christmas tree lighting ceremony in Portland, Ore. The plot, which was detected by the FBI, was scheduled to be carried out on “Black Friday.”

    “Black Friday” is the day after Thanksgiving in the United States, and has become a day filled with heavy retail shopping and community events. The suspect in the foiled Portland attack allegedly told the FBI that the plot would be less apt to be detected because the city was not front-and-center on law enforcement’s antiterrorism radar screens.

    “. . . it’s in Oregon; and Oregon, like, you know, nobody ever thinks about it,” the FBI quoted the Portland suspect as saying.

    There also have been bizarre events this year in which Walmart’s name was appropriated by members of murky multilevel-marketing businesses. Members of MLM programs known as Narc That Car/Crowd Sourcing International and Data Network Affiliates/OWOW instructed prospects to take photos of the license plates of cars parked at Walmart and other large retail stores.

    The plate numbers purportedly were to be entered into databases controlled by the MLM firms as a means of helping law enforcement and the AMBER Alert program rescue abducted children. No evidence has surfaced that either of the MLM firms has any tie to the AMBER Alert program, which is administered by the U.S. Department of Justice and the National Center for Missing and Exploited Children.

    Meanwhile, bizarre promos for an MLM program known as MPB Today routinely used Walmart or its branding materials as backdrops for a purported program that suggested a one-time, $200 purchase from MPB Today could lead to free groceries for life.

    One of the promos painted President Obama and Secretary of State Hillary Clinton as Nazis. Another urged MPB Today affiliates who were not fans of Walmart to lay down their pipe bombs.

    In its news release announcing it had joined the “If You See Something, Say Something” campaign, Walmart urged customers to support the program, but did not say precisely why it had made the decison to become to first national retailer to partner with DHS.

  • BULLETIN: National Investment-Fraud Sweep Dubbed ‘Operation Broken Trust’ Nets 532 Defendants; AG Holder Says Capers Caused More Than $10 Billion In Losses; ‘Undercover Operations’ Part of Task Force Arsenal

    U.S. Attorney General Eric Holder and members of President Obama’s Financial Fraud Enforcement Task Force said this morning that a nationwide sweep known as “Operation Broken Trust” has netted 343 criminal defendants and 189 civil defendants.

    Among the targets of the sweep were purveyors of Ponzi schemes, affinity fraud, prime bank/high-yield investment scams, foreign exchange (FOREX) frauds, business-opportunity fraud and other similar schemes, investigators said.

    Some of the defendants “filed for bankruptcy in an attempt to avoid claims by victim-investors,” investigators said.

    The combined losses in the schemes, which affected 120,000 investors, were estimated at $10.4 billion, Holder said. He was joined in the announcement by FBI Executive Assistant Director Shawn Henry; U.S. Securities and Exchange Commission (SEC) Director of Enforcement Robert Khuzami; U.S. Postal Inspection Service (USPIS) Chief Postal Inspector Guy Cottrell;  Deputy Chief Rick Raven of the Internal Revenue Service Criminal Investigation (IRS-CI); Acting Director of Enforcement Vince McGonagle of the U.S. Commodity Futures Trading Commission (CFTC); and other members of the Financial Fraud Enforcement Task Force.

    “With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” said Holder.  “To the public: be alert for these frauds, take appropriate measures to protect yourself, and report such schemes to proper authorities when they occur. And to anyone operating or attempting to operate an investment scam: cheating investors out of their earnings and savings is no longer a safe business plan — we will use every tool at our disposal to find you, to stop you, and to bring you to justice.”

    The calling card of the schemes was greed, Henry said, adding that undercover probes are part of the Task Force’s arsenal.

    “This operation highlights the scope of this problem, and its impact on individuals from all walks of life,” said Henry.  “This one sweep alone involves fraud schemes that harmed more than 120,000 victims. The schemes may change, but the underlying greed does not. Working with our partners, we in the FBI will use all the investigative techniques in our arsenal, including undercover operations, to bring those responsible to justice.”

    Khuzami, meanwhile, said the law-enforcement community was pursuing multiple forms of fraud.

    “Fraud by well-known companies or high-profile executives gets the biggest headlines, but other scams are equally devastating to hard working families and retirees,” said Khuzami. “Victims want justice and don’t much care who the fraudster is or how unique the fraud. Today’s actions underscore that law enforcement agrees and will pursue fraud in whatever form.”

    Read Holder’s announcement, made this morning in Washington.

    President Obama authorized the Financial Fraud Enforcement Task Force in November 2009. In January 2010, Holder ventured to Florida to speak about the aims of the Task Force and to warn scammers that the government was serious about putting them in jail.

  • AdPayDaily, Surf With ASD Ties, May Be Disintegrating; Member Says Firm Still Encouraging Participants To Send In Money As Surf Urges Troops To Keep The Faith

    A surf firm with membership and promoters’ ties to AdSurfDaily may be disintegrating — but is still encouraging participants to send in money, a member said.

    “[T]he earnings/payouts nearly [stopped] but of course we were ‘encouraged’ to continue making purchases so that our earnings/payouts could continue as before,” the member said of the surf, which is known as AdPayDaily (APD).

    Like AdViewGlobal (AVG), yet-another surf with ASD ties, APD has a history of at once asking for money from members and then scolding them.

    The PP Blog reported in June that members of the pro-ASD Surf’s Up forum were listed as having high positions in APD.

    APD’s website was registered on Nov. 18, 2008. That’s just one day before U.S. District Judge Rosemary Collyer ruled that ASD had not demonstrated it was a lawful business and not a Ponzi scheme. APD’s domain-registration date also coincides with a string of registration dates by the so-called ASD clones, including AVG, AdGateWorld and BizAdSplash — all of whose domains were registered after the seizure of ASD’s assets in August 2008 and all of which eventually went missing.

    “I feel like we are being strung along to keep on paying in,” an APD member told the PP Blog.

    ASD President Andy Bowdoin was arrested last week on charges of wire fraud, securities fraud and selling unregistered securities. Like Bowdoin, APD urged members to keep their faith in the enterprise.

    Also like ASD, APD told members in a recent email that it was experiencing “tech issues.”

    “Just a note to let everyone know that we’re still working on tech issues in with the Administrative section of our website,” APD wrote last month. “If you have continued to surf you know that the daily payouts are minimal at best and that probably won’t change until we secure the necessary funding.

    “In the meantime we’re still working to resolve all issues and we are extremely hopeful that we’ll have everything in order by years end,” the company said.  “We will keep you posted with our progress.”

  • Judge At Bail Hearing Orders Bowdoin To Surrender Passport And Not To Intimidate Witnesses, Court Officials; Order Issued Against Backdrop Of Payment Demand By 2 ASD Figures For $29 TRILLION From Federal Judge, Prosecutors, Secret Service Agent

    Andy Bowdoin and Kenneth Wayne Leaming.

    As AdSurfDaily President Andy Bowdoin was explaining to a federal magistrate judge in Florida Wednesday that he’d honestly come by $110 million the government intends to make subject to criminal forfeiture, two other ASD figures were awaiting a ruling by a judge in another venue on whether they could proceed with their bizarre, ASD-connected lawsuit against the U.S. government.

    One of the men, Kenneth Wayne Leaming of Spanaway, Wash., described himself in court documents as a “sovereign man.” Records in Washington state show that he once filed a lien against a faith-based Franciscan hospital for $9.24 billion, threatening to attach the money, furnishings and fixtures of the healthcare facility, which serves tens of thousands of patients.

    Leaming, who also has a history of filing liens against public officials, has been assessed sanctions totaling at least $15,000 in Washington state for filing bogus claims, according to records. He also has been accused of the unauthorized practice of law.

    Leaming and Christian Oesch filed a complaint against the United States in July 2010. The lawsuit, which was filed in the U.S. Court of Federal Claims, appears to be tied to an earlier failed bid by Leaming and Oesch to demand a payment for the astronomical sum of $29 TRILLION from a federal judge, three federal prosecutors and a U.S. Secret Service agent for their actions in the ASD civil-forfeiture cases filed in U.S. District Court for the District of Columbia in 2008.

    At a bail hearing Wednesday in Florida after Bowdoin was arrested on federal charges of wire fraud and securities fraud for his operation of ASD, U.S. Magistrate Judge Thomas G. Wilson specifically ordered Bowdoin not to intimidate witnesses, jurors and officers of the court — and not to obstruct the investigation, tamper with witnesses or engage in retaliatory actions against witnesses, victims or informants.

    As a condition of bail, Bowdoin was ordered not to commit a federal, state or local crime. Wilson warned him that he could be prosecuted for contempt of court for violating the conditions of his bail.

    Bowdoin, 76, was granted bail after he told Wilson that he had a heart condition, diabetes and high blood pressure — and  that he gives his wife medication because she has a brain tumor. He noted that he looked forward to going on trial in Washington, D.C., on the charges for which he was arrested on Wednesday, and had lined up experts to testify on his behalf.

    Prosecutors argued that Bowdoin should be jailed, saying he was a flight risk, has ties to international countries, potentially could acquire false travel documents and has a large amount of money available to relocate.

    Wilson set bail at $350,000. Bowdoin was freed after bail was secured by two properties in his wife’s name and a relative agreed to post a surety bond. Bowdoin was ordered to surrender his passport and not to travel outside the Northern and Middle Districts of Florida and the District of Columbia. He was further ordered to report by telephone to the federal Pre-Trial Services Agency in Tampa each Wednesday by 4 p.m., except for when he is attending court in the District of Columbia.

    His first appearance in Washington is set for Dec. 17 at 1:45 p.m.

    In June 2010, the PP Blog learned yesterday, Leaming and Oesch prepared documents that demanded payments totaling more than $29 TRILLION from U.S. District Judge Rosemary Collyer; Jeffrey A Taylor, the former U.S. Attorney for the District of Columbia; Vasu B Muthyala, an assistant U.S. Attorney; William Cowden, a former assistant U.S. Attorney and Roy Dotson, an active-duty agent with the U.S. Secret Service.

    According to a document obtained by the Blog, the public officials were sent “invoice billing statements” for the purported debt.

    Collyer, the presiding judge in the ASD forfeiture cases, had issued two final orders of forfeiture earlier this year. She later blocked Leaming and Oesch from filing documents in the ASD case.

    Collyer’s name was misspelled as “Collier” in the payment demand, which was made in the form of a “Notice of Final Determination and Judgment.” The bizarre document sought a sum that would more than double the U.S. Gross Domestic Product in 2009. The precise sum demanded from the public officials was twenty-nine trillion, four-hundred-forty-four billion, one-hundred-one-million dollars — “PLUS interest and compounded penalties.”

    Gross Domestic Product, or GDP, is the monetary value of all the finished goods and services produced within the borders of an entire country during an entire year. GDP for the United States in 2009 was about $14.25 trillion, meaning that Leaming and Oesch sought to collect from five public servants a sum that was more than twice the production output of the entire U.S. economy last year.

    Leaming and Oesch said they defined $1 as “one ounce of .999 fine silver, or a pre-1964 United States Silver Dollar, whichever value is greater.”

    In 2009, silver production in the United States totaled only 1,230 tons with an estimated value of $520 million, according to the U.S. Geological Survey.

    The men said they’d accept U.S. “fiat currency” for payment if it was tied to the “spot price for silver as established on the date of tender at London, England.”

    When the public officials did not cede to the payment demand, Leaming and Oesch appear to have turned to the U.S. Court of Federal Claims to enforce it, in effect arguing that Collyer, Taylor, Muthyala, Cowden and Dotson had defaulted on a contract.

    Such scorched-earth litigation has been referred to as “paper terrorism.” As part of the apparent strategy, Leaming and Oesch also sought to force the government to post a bond of $100 billion and to “Cease and desist in all investigation and harassment of ASD, its officers and staff, and its member/distributors FOREVER.”

    The U.S. Department of Justice responded by filing a motion to dismiss the complaint filed by Leaming and Oesch in the U.S. Court of Federal Claims, arguing that the court had no jurisdiction over ASD-connected forfeiture matters, that Leaming and Oesch were trying to use the claims court as an appeals court and that neither man had standing in the forfeiture actions.

    The Justice Department pointed out that Leaming is not a licensed attorney and had been accused in 2005 by the Washington state Law Practice Board of engaging in the unauthorized practice of law.

    In 2009, Leaming filed a lien against St. Clare Hospital, a Franciscan facility in Lakewood, Wash., for more than $9.24 billion. The lien sought to attach the hospital’s money, furnishings and fixtures, according to records.

    See stories on Leaming.

  • Andy Bowdoin Makes $350,000 Bail After Relative Posts Surety Bond; No Date Set For Formal Arraignment On Fraud Charges In District Of Columbia

    AdSurfDaily President Andy Bowdoin appeared before a federal magistrate judge in Florida after his arrest yesterday on charges of wire fraud, securities fraud and selling unregistered securities, the PP Blog has learned.

    Bail for Bowdoin was set at $350,000. The bail was secured by two properties and a surety bond from a relative. Bowdoin was released after posting it.

    No date has been set for the arraignment. Because Bowdoin was arrested in Florida on charges filed in the District of Columbia, the initial proceedings were conducted by a federal magistrate judge in Florida.

  • THE DAY ‘WINK-NOD’ DIED: Use Of ‘Money Magnet’ Line, ‘Rallies,’ ‘Ad Packages’ And ‘Rebates’ Backfires On Bowdoin; Grand Jury Uses Terms Repeatedly In Indictment; Prosecution Has Damning ASD Correspondence

    Thomas A. "Andy" Bowdoin

    History was made yesterday. “Wink-nod” marketing deceptions  — the use of disingenuous language supplemented by willful blindness in the cancerous autosurf and HYIP trades to create plausible deniability — were pronounced dead by a grand jury sitting in the District of Columbia.

    Members of the insidious trade can thank ASD President Andy Bowdoin for the much-anticipated pronouncement.

    The grand jury, which began meeting in May 2009 and returned an indictment against Bowdoin that was unsealed yesterday, repeatedly referred to Bowdoin’s alleged wink-nod wordplay and incongruous claims to hide his massive international Ponzi scheme.

    Want to position yourself as a man of God from a stage in Las Vegas (or in any city or home office) and tell your audience that you are a “money magnet” — and then plant the seed that audience members can become “money magnets” just like you if they turn over their cash to you?

    It’s time for autosurf purveyors to anticipate that a grand jury just might have something to say about it on a time and date uncertain. Bowdoin’s grand jury handed him back his “money-magnet” line repeatedly. Federal agents arrested Bowdoin yesterday in Florida. His booking and bail status still are unclear hours after his arrest. The government previously argued that Bowdoin was a flight risk who had moved money offshore and now says he faces up to 125 years in federal prison.

    And what if you’re an autosurf aficionado and want to use wordplay to tell the troops that they’re not purchasing an investment in the form of an unregistered security — but instead are purchasing “advertising” in the form of “ad packages” (or a similar phrase) you’ve concocted to mask the nature of your “program?”

    Well, the grand jury had an answer for that one, too: Charge the fraudster with felonies.

    Want to tell the troops that your “program” has passed muster with the SEC and does not need to concern itself with registering when the claims are untrue? The grand jury had an answer for that one, too: Charge the fraudster with felonies.

    Among the grand jury’s conclusions was that Bowdoin, who’d previously been charged twice with securities offenses and modeled ASD after the 12DailyPro securities, fraud and Ponzi scheme, was blowing smoke to tens of thousands of people at a time.

    KABOOM! “Wink-nod” was blown to bits yesterday.

    Want to create an incongruous condition in which people are standing in line for hours at “rallies” to purchase “ad packages” that pay “rebates” of up to 150 percent and an “instant bonus” on top of the “rebates” just for signing up?

    The grand jury had an answer for that one, too: Charge the fraudster with felonies.

    Want to counsel members on how they should refer to the “program” and what words to avoid when presenting the “program” to others? Want to be like Bowdoin and send an email that says, “[L]et’s don’t (sic) use the words investment and returns. Instead, lets (sic) use ad sales and surfing commissions. The Attorney Generals in the U.S. don’t like for us to use these words in our program?”

    The grand jury had an answer for that one, too: Charge the fraudster with felonies.

    KABOOM! “Wink-nod” was blown to bits yesterday.

    Will autosurf forum life ever be the same? Not a chance, except among a core group of serial criminals. The grand jury signed off on a document that neatly exposes “wink-nod.” The next time a forum “expert” cautions posters not to call a surf program an investment, autosurf critics can point out that Bowdoin said the same thing — and that his words got him indicted.

    At the very same Saturday “rally” in Las Vegas at which Bowdoin called himself a “money magnet” and encouraged others to become “money magnets” by giving him their cash, Bowdoin implored members not to miss a fabulous opportunity to hand him a virtually unlimited sum in the final hours before the company would enforce a $50,000 “cap” beginning on Monday, according to the grand jury.

    Handing him any more than $50,000 beyond Monday might bring out the regulators, Bowdoin ventured, pointing out that “there are so many people that want to come in now and want to purchase two hundred thousand, three hundred thousand, half a million and a million dollars . . .”

    The grand jury pointed out that Bowdoin, incongruously, was selling advertising to people who did not even own businesses to advertise in the ASD “rotator.”

    After observing any number of incongruities associated with ASD and its use of wordplay to skirt securities laws, the grand jury had a message for the whole of the autosurf and HYIP worlds: Charge the fraudsters will felonies.

    It was the beginning of the end for wink-nod promoters — and it occurred in no small measure due to the efforts of the U.S. Secret Service, an agency Bowdoin and his apologists compared to “Nazis” and “Satan” after telling a Las Vegas crowd to plunk down unlimited sums on Saturday because he was lowering the limit to $50,000 on Monday.

    Bowdoin’s theory behind enforcing a cap was that $50,000 might be a low enough sum to keep ASD under the radar, according to the grand jury.

    Only in the incongruous world of the autosurf could someone sell himself on the notion that limiting purchases to $50,000 on Monday somehow created a safety buffer for others who plunked down higher sums two days earlier. Only in the incongruous world of the autosurf could someone instruct members to “act fast” and plunk down more than $50,000 on Saturday because the safety buffer would be enforced two days later.

    And wink-nod also began its race to the Internet graveyard in no small measure due to the efforts of William Cowden, now in private practice — but once a federal prosecutor and the chief of the Asset Forfeiture Division in the U.S. Attorney’s Office in the District of Columbia.

    Cowden was the man some ASD members loved to hate. They called him “Gomer Pyle” on the pro-ASD Surf’s Up forum. They called him a “goon.” They called him “Crowden.” They called him “Cow-dung.” They called for a “militia” to storm Washington. They said Cowden should be placed in a torture rack. They “prayed” for God to strike Cowden and other federal prosecutors dead.

    And then they called themselves Christians.

    In the months that followed, the Secret Service, Cowden and others at the Justice Department set the stage for the complicated nature of autosurfs and HYIPs to be both understood and rejected by a grand jury that assessed ASD’s wordplay and the sea of incongruities and decided that felonious self-indulgence needed to be dealt with by returning felony indictments and destroying wink-nod.

    Indeed, history was made yesterday. It was the day “wink-nod” died, the day the music died for  “money magnets” and autosurf scammers on stage and in home offices and online forums everywhere.

  • URGENT >> BULLETIN >> MOVING: ANDY BOWDOIN INDICTED: AdSurfDaily President Arrested In Florida

    BULLETIN: UPDATED 4:40 P.M. ET (U.S.A.) AdSurfDaily President Andy Bowdoin has been arrested by federal agents in Florida after an indictment was unsealed earlier today that charged him with five counts of wire fraud, one count of securities fraud and one count of unlawful sale of unregistered securities.

    Bowdoin, 76, was arrested in Englewood, Fla. Details on bail were not immediately available. It is believed the U.S. Secret Service made the arrest. If convicted on all counts, Bowdoin faces a maximum prison sentence of 125 years and a maximum fine of $6.26 million.

    ASD was raided by the Secret Service in August 2008. The case began as a civil-forfeiture action with the filing of a forfeiture complaint that month and the filing of a second complaint in December 2008, as the investigation proceeded.

    With the unsealing of the indictment that alleges a massive Ponzi scheme, Bowdoin now faces serious criminal charges  — and yet-another forfeiture action, this one in criminal court. Today’s forfeiture allegation was included in the indictment and called for a judgment of $110 million to be entered against Bowdoin.

    Prosecutors charged today for the first time that Bowdoin actively discouraged ASD members from contacting law enforcement prior to the Secret Service raid in August 2008. Meanwhile, prosecutors revealed for the first time that a financial analyst had been assigned to the case from the U.S. Attorney’s Office in the District of Columbia.

    U.S. Attorney Ronald C. Machen Jr. of the District of Columbia praised the Secret Service, which had been derided by Bowdoin as “Satan,” for its work on the case. Machen also praised William Cowden, the former federal prosecutor who brought the forfeiture actions.

    Cowden was derided as “Gomer Pyle” by members of the pro-ASD Surf’s Up forum, one of whom opined that he should be placed in a medieval torture rack while ASD members drew straws to determine who got to tighten the wheel.

    Bowdoin, according to the 18-page indictment, used ASD members’ money to make a donation to the National Republican Congressional Committee (NRCC). The allegation marked the first time the government had charged that Bowdoin used Ponzi proceeds to make the donation. Bowdoin was specifically accused of permitting members to make false claims about a “Medal of Distinction” he received from NRCC.

    Members claimed the award was an important award from the President of the United States. In reality, according to the indictment, the award was for campaign donations — and Bowdoin did not correct the record.

    Meanwhile, the indictment accused Bowdoin of not correcting the record when a purported ASD “compliance officer” said the Bowdoin’s only run-in with law enforcement had been as the recipient of a speeding ticket.

    In truth, prosecutors said, Bowdoin had been charged in two two securities cases in Alabama during the 1990s, pleading guilty in one case and entering a plea of “best interest” in another that required him to pay restitution to victims.

    Read the indictment against Bowdoin.

  • STRANGENESS PILES UP: OWOW ‘8G Zip Drive Stick’ Offered From Non-Existent Address Of ‘123 Internet St.’ In Des Moines, Iowa; Similar Bogus Address Of ‘123 Online St.’ Advertises ‘Global Gifting Connection’

    Advertising a Des Moines, Iowa, business address of 123 Internet St. and claiming the “owow 8g zip drive stick is the new face of data network affiliates,” an affiliate of DNA/OWOW is seeking to drive business to the firm.

    But the Des Moines Police Department told the PP Blog this morning that no such street address exists in the city, despite multiple online listings encouraging prospects to do business with OWOW at the address.

    A separate Des Moines address — 123 Online St. — that advertised something called “Global Gifting Connection” also was bogus, the police department said. It is unclear if the same person placed both ads.

    Why bogus addresses were used to advertise OWOW and a cash-gifting program was not immediately clear.

    “[I]f you would like use this product or learn how to grow a team to market it,” an ad in Des Moines said about the OWOW stick, “I have help top leaders place over 30,000 people into this company and i will be happy to help you.”

    The OWOW ads appear at online venues such as MerchantCircle and HelloDesMoines.com. The business has not been verified, according to the MerchantCircle website. The ad on the HelloDesMoines site carries a photo of the OWOW stick.

    The Des Moines development follows on the heels of a prompt by OWOW, which is associated with Internet Marketer Phil Piccolo, to recruit prospects by planting the seed that a product known as OWOW TurboMune cures cancer.

    It also follows on the heels of a bizarre bid by an OWOW affiliate to suggest that Michael Chertoff, a Harvard-educated former federal judge and federal prosecutor and the former secretary of the U.S. Department of Homeland Security (DHS), was a “suspect” in the Sept. 11, 2001, terrorists attacks on the United States and that Israel had conducted the attacks.

    The bizarre claim was made despite the fact that Chertoff’s nomination to the DHS post was approved by a 98-0 vote in the U.S. Senate more than three years after the attacks occurred.

    OWOW is the apparent successor company to DNA, a Nevada-registered company that operates from Florida and claimed it was developing a database to help law enforcement and the AMBER Alert program rescue abducted children.

    No evidence has emerged that DNA has the capacity to assist either law enforcement or the AMBER Alert program, which the firm chastised earlier this year by suggesting it had a bloated budget and had rescued “ONLY” about 500 children over the years.

    A “Non-Affiliated Support” link on the OWOW website includes no contact information for the company and no form through which prospects or members of the media can submit questions.

    OWOW also has advertised that it pays an annual interest rate of 24 percent to members who send it money. Questions have been raised about whether the company is selling unregistered securities as investment contracts.

    One link in the MerchantCircle ad for OWOW prompts visitors to visit a site that redirects to video promos for  an “opportunity” known as Monitium and a cycler program known as 150 Cash.

  • PROMISSORY NOTES SCAM: Feds Bust Another Alleged ‘Wholesale’ Business; Jenifer Devine Faces Wire Fraud Charge In Ponzi Case Brought By Obama Task Force; ‘Wholesale Business Was Wholesale Fraud,’ U.S. Attorney Says

    The FBI has arrested Jenifer Devine, saying the Fair Lawn, N.J., woman was operating a promissory notes Ponzi  scheme through a purported wholesale business that claimed to sell clothing and electronics.

    Similar charges were brought earlier this year in New Jersey against Nevin Shapiro. Prosecutors said Shapiro, who has pleaded guilty, was running an $880 Ponzi scheme in Florida that purported to sell groceries wholesale.

    Like the case against Shapiro, the case against Devine, 39, was brought by President Obama’s interagency Financial Fraud Enforcement Task Force.

    “As alleged in the complaint, Devine’s wholesale business was wholesale fraud,” said U.S. Attorney Paul Fishman, whose office also prosecuted Shapiro. “Victims who were promised huge returns paid the tab for [Devine’s] vacation and designer goods. This case reminds investors: always be wary of a sure thing.”

    More than 15 investors plowed more than $8 million into Devine’s scheme, operated through a company known as Devine Wholesale of Carlstadt, N.J. Investors were told they were helping Devine finance the business and would receive a speedy return of 25 percent. Some investors were shown bogus lists of inventory Devine said she sold, prosecutors said.

    “In reality,” prosecutors said, “Devine Wholesale had no active wholesale clothing or electronics business during the relevant time period, and had virtually no business sales.”

    In classic Ponzi fashion, “Devine instead used new investor funds to make principal and interest payments to existing investors, as well as to fund her own lifestyle. Devine stole tens of thousands of dollars to pay for personal expenses, including a Royal Caribbean cruise and purchases at luxury retailers such as Burberry, Gucci and Coach. Devine also transferred over $26,000 to her mother, who had no role with Devine Wholesale,” prosecutors said.

    Investors losses were estimated at $2 million, but may be higher, prosecutors said. If convicted, Devine faces up to 20 years in federal prison and a fine of up to $1 million.

    Read the criminal complaint against Devine.

    “It is a difficult thing to convince people to be prudent and cautious with their financial
    investments when people like Ms. Devine make grandiose promises,” said David Velazquez, assistant special agent in charge of the FBI’s office in Newark.

    “Criminals know how easily greed can override good judgment and they use that basic human flaw to victimize other people,” Velazquez said about the promissory-notes scheme that promised 25 percent interest. “We hope this matter will serve the public as an educational tool in preventing investment fraud as the disruption and dismantling of these schemes remains an important part of our work at the FBI and with our partners.”

    Separately, Paul J. LoPapa, 64, of Livingston, N.J., pleaded guilty today in federal court in New Jersey to duping investors investors in a scheme involving fictitious overseas investments sold though a company known as Skyline Equities Inc.

    LoPapa also pleaded guilty of defrauding the Social Security Administration of $145,000 in disability payments beginning in 2001, claiming he had not worked since 1990.

    Skyline Equities’ referred to its investment program as the “Bank Guarantee Program,” which was billed as a “sophisticated international financial instrument facilitated through well-known financial institutions,” prosecutors said.

    Investors dumped about $815,000 into the scam, prosecutors said.

    The money was used to pay for “five high-end Mercedes-Benz automobiles” and other personal purchases, prosecutors said.

    LoPapa potentially faces decades in prison.

  • OWOW Defender And Phil Piccolo Apologist Demands To Know If PP Blog Is ‘Israeli’; Says Blog Spreads ‘Islamophobia’ And That Terror Scares Are ‘FAKE’; Suggests Cover-Up Followed 9/11 Attacks

    Hours after the PP Blog published a story about the FBI foiling a bid to detonate a bomb targeted at American children and families at a Christmas tree lighting ceremony in Portland, Ore., a poster defending OWOW — the apparent successor company to Data Network Affiliates (DNA) — demanded to know if the Blog was “Israeli,” planted the seed that the Blog was racist and accused it of spreading “Islamophobia.”

    “On a sep[a]rate note, [I] was shocked to discover that you are also spreading Islamophobia, so not only are you a two-bit hack, some might say that you are a racist,” a poster identified as “John” wrote in a comments thread below a Nov. 21 story that referenced OWOW. “For your information, most educated people know that the terror scares are FAKE, and that the Sept 11th attacks were carried out by another group, Israel being prime suspects.”

    “John” also railed against the SEC, in response to a comment by the Blog that raised the question of whether OWOW, which is associated with Internet Marketer Phil Piccolo, was offering unregistered securities as investment contracts by advertising that it paid 24 percent annual interest to members who sent in money.

    Piccolo has gained a reputation online as a “one-man Internet crime wave.” During a radio program in August, Piccolo threatened to sue critics and planted the seed that he could cause them to experience physical pain.

    Rather than answering the question, John wrote, “The SEC? In between watching porn all day? The same SEC covering up the biggest financial crime i[n] history, IE the long term manipulation of the Gold and precious metals markets? That SEC?”

    Earlier this year, the inspector general for the SEC said he was investigating reports that some SEC officials had used government computers to view pornography.  Such an announcement, though embarrassing to the agency,  did not legalize securities fraud or create a new defense for securities violations or potential securities violations.

    DNA is a Nevada-registered company whose website is registered behind a proxy in the Cayman Islands. The company explained months ago that it registered the domain privately in the Caymans to prevent management from having to “put up with 100 stupid calls a day.”

    Dean Blechman, DNA’s former CEO, resigned suddenly in February after just weeks with the firm, saying later that the company was engaging in “bizarre” conduct and a campaign of “misinformation and lies.”

    Despite its Caymans’-registered domain, DNA asserted it was paying members of its multilevel-marketing (MLM) program to write down license-plate numbers at churches, “doctors’ offices” and retail outets such as Walmart. The plate numbers, according to DNA, would be entered into a database that was being developed to help law enforcement and the AMBER Alert program rescue abducted children.

    The license-plate program raised privacy concerns, and no guidance was given members in the areas of propriety, legality and safety. DNA later morphed into a purported cell-phone company, proclaiming it had destroyed all competition on earth overnight by offering a free cell phone with unlimited talk and text for $10 a month.

    Members flooded the Internet with ads. DNA later said that it had been hoodwinked by a vendor that had led it to believe it could deliver the $10 unlimited plan. In a bizarre email, the company acknowledged that it had not studied cell-phone pricing before declaring itself the world’s low-price leader. Just weeks before, the company sent an email to announce its cell-phone venture in which it made the all-caps claim of “GAME OVER — WE WIN.”

    By July 4 — and with no new cell-phone plan announced to replace the failed venture — DNA said it was entering the mortgage-reduction and resorts businesses. The purported mortgage-reduction program was positioned as the “MORAL OBLIGATION’ of churches to promote.

    Later in July the company announced it was selling a “protective spray” that would help buyers obscure the license-plate numbers of their cars to guard against getting traffic tickets. The spray purportedly would block cameras from snapping usable photos of the plates, and DNA said the spray protected against “wrongful ticketing by city cameras worldwide.”

    DNA did not explain the incongruity of saying it supported law enforcement in its efforts to locate abducted children while at once working against law enforcement in its efforts to enforce traffic laws. Nor did DNA say whether it believed criminals who abducted children and sped off in cars would find the “protective spray” useful when making a getaway.

    Even as DNA was announcing the availability of its purported “protective spray,” the company announced it soon would adopt a browser-based “DNA World Wide Alert Button” to let members know when a “child is reported missing in your immediate area.”

    It is unclear of DNA ever developed such a button.

    What is clear is that multiple domain names associated with the company now redirect to a website known as “One World, One Website” or OWOW.

    Members have been prompted to send prospects an email that advertises a cure for cancer.

    (Italics added):

    Invest 90 Seconds to earn $4,600 to $46,000 Monthly
    Send A Simple E-mail “The Secret Cure For Cancer”

    JUST FORWARD THIS E-MAIL TO EVERYONE YOU KNOW…
    YOUR PERSONAL WEBSITE IS EMBEDDED IN THIS E-MAIL…

    Invest 90 Seconds + Send out a Simple Cure for Cancer e-mail… Earn $4,600 to $46,000 a Month within 100 days or less…

    +++++++++++++++++++++++++
    The Simple & Short E-mail
    +++++++++++++++++++++++++

    Most likely someone you love will die of Cancer or
    some type of Flu type Disease and when it happens
    you will say I wish I could have done something…

    The SECRET CURE FOR CANCER…
    Are you ready for the Simple & Secret CURE…
    Here it is “DON’T GET IT”…

    THE BOTTOM LINE IS
    Take TurboMune & DON’T GET IT & If you GOT IT
    Take TurboMune To Help You Get Rid You Of IT…

    This product use to sell for $150 a capsule…
    It currently sells in ASIA for $300 a bottle…
    OWOW sells the product as low as $19.95 a bottle…

    ++++++++++++++++++
    Invest 90 Seconds

    The PP Blog first reported the existence of the email Saturday. The Blog also reported that Phil Piccolo had been a member of a company in California that had been expressly warned by the state not to make false and misleading claims in promotional materials and not to advertise that tax “write-offs” were available for joining an MLM company.

    DNA advertised that members who recorded license-plate numbers on its behalf could qualify for hefty mileage deductions despite the fact that no evidence has surfaced that the firm’s license-plate program is a legitimate business.

    “Did you know about your DNA Tax Benefits . . .” the DNA pitch began. “Imagine driving 10,000 miles for your DNA Business = up to a $5,000 Tax Deduction… “IRS Announces 2010 Standard Mileage Rates” IR-2009-111, Dec. 3, 2009… and this is just one of many…”

    Less than enthused about the PP Blog’s reporting, “John” apparently embarked on a strategy of trying to discredit the Blog by advancing a conspiracy theory about the 9/11 attacks, the “the long term manipulation of the Gold and precious metals markets” and tying the Blog to Israel.

    “John” even demanded that another poster answer a question about whether the Blog is “AN ISRAELI?” He also observed that “Millions consider the [Food and Drug Administration] to be a filthy cabal of criminals” and suggested there was nothing misleading about Piccolo’s cancer-cure email to OWOW members.

    The Blog specifically asked “John” why someone would plant the seed that the OWOW TurboMune product cures cancer.

    “THERE YOU GO AGAIN, wrong AGAIN, spreading lies AGAIN,” John claimed. “The email says ‘The Secret Cure For Cancer” IS ‘Dont get it.’”

    “John” offered no comment on the part of the email that read, “THE BOTTOM LINE IS
    Take TurboMune & DON’T GET IT & If you GOT IT Take TurboMune To Help You Get Rid You Of IT…”