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.
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.
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.
Kenneth Wayne Leaming, also known as "Kenneth Wayne" and "Keny."
UPDATED 5:52 P.M. ET (U.S.A.) A Washington state man emerging as a figure in the AdSurfDaily forfeiture case claimed a small town targeted him for “DEATH” and threatened to kill him by “HUNTING” him down “in screaming packs and mobs” and using “several armed street gangs” that served as police, according to records.
Kenneth Wayne Leaming of Spanaway filed a lien for $10 million in 2009 against the city of Puyallup, Wash., in the case. Among the claims were that Puyallup engaged in terrorism by controlling “multiple electronic broadcast media” and employing police who used “chemical and biological weapons,” “machine guns” and “explosives.”
The lien was notarized by Tina M. Hall, a Leaming business associate and another emerging figure in the ASD case. Hall’s notary license was revoked last month. Leaming has been linked by the Anti-Defamation League to an “extremist group” known as “Little Shell Pembina Band of North America.”
Puyallup is a city of about 33,000 in Pierce County.
Pattern Of Filing Astronomical Liens
In a separate case in which Leaming’s name is referenced as a co-defendant with Janice Kay Bryson, a lien for more than $19 billion was placed against several individuals and the city of Fife, Wash., another small town in Pierce County. Records show that Leaming has been assessed sanctions of at least $15,000 in Washington state for filing false liens.
Fife has a population of about 4,800. Puyallup, named in the $10 million lien, somehow also became a party along with Fife in the $19 billion lien.
Lien For Billions Filed Against Hospital With Historic Roots To St. Francis Of Assisi And The Order Of Poor Ladies Founded By St. Clare
Leaming also filed a bogus lien for $9.2 billion against St. Clare Hospital, a faith-based facility in Washington state that admitted 6,995 patients, handled 48,363 patient visits to its Emergency Department and received 26,114 outpatient visits during the 2008 fiscal year.
Hall also affixed her notary seal to the lien against St. Clare, which is operated by Franciscan Heath Systems and traces its faith-based healthcare mission in Washington state to 1891.
The Franciscan Order is named after St. Francis, known the world over as St. Francis of Assisi, who died 784 years ago, in 1226, after rejecting earthly wealth and living in poverty as a street preacher. He is one the most revered figures in the annals of Christianity.
One of the first followers of the man who became known as St. Francis of Assisi was Chiara Offreduccio. She became known as Clare of Assisi and, after being elevated to sainthood, St. Clare. Clare of Assisi was the founder of the Order of Poor Ladies which, like the Franciscan Order, rejected earthly wealth. The Order of Poor Ladies went on to become known as the Order of St. Clare, known the world over as the “Poor Clares.”
Leaming sought to attach “all tangible and intangible property” of the St. Clare Franciscan facility, including its money, furnishings and fixtures, according to records. St. Clare was Leaming’s community hospital in Spanaway. Ironically, AdSurfDaily members had positioned ASD in promotional materials as the invention of a Christian “genius” and an attractive way for people of faith to make enormous sums of money by clicking on advertisements for less than 20 minutes a day.
Members who recruited other members were paid commissions of 10 percent. Commissions for second-level recruits in the MLM scheme were set at 5 percent. ASD member and purported company “trainer” Robert Fava claimed in a testimonial that he made $1,000 a day from ASD.
ASD President Andy Bowdoin, speaking at an event in Las Vegas in May 2008, exhorted attendees to “to have an attitude of gratitude with God” and imagine themselves in possession of “a big check coming in from AdSurfDaily.” Bowdoin thanked God from the stage for developing him into a “money magnet.”
Video from the Las Vegas event shows members standing in line to turn money over to ASD — and employees placing paperwork into plastic baskets. By Aug. 1, 2008, about two months after the Las Vegas gathering, the U.S. Secret Service seized tens of millions of dollars from 10 personal bank accounts held by Bowdoin, amid allegations of money-laundering, wire fraud and operating a Ponzi scheme. Court filings placed the amount seized from Bowdoin at $65.8 million.
One of his personal accounts contained more than $31.6 million; another contained more than $23.7 million. Prosecutors said ASD was not Bowdoin’s first brush with the law. In the 1990s, he pleaded guilty to felonies that flowed from an Alabama securites caper, avoiding prison by agreeing to make restitution to victims.
About $14 million more under the control of Clarence Busby and an ASD-related company known as Golden Panda Ad Builder also was seized by the Secret Service. The abbreviation “Rev.” was attached to Busby’s name 120 times in an ASD-related court filing that accused the company and unnamed co-conspirators of racketeering.
Busby was accused by the SEC in the 1990s of participating in three prime bank schemes in which investors were promised enormous returns that did not materialize.
Why Leaming, who acknowledges an “Almighty Creator” only known as “I am” in documents that identify Leaming as “Postmaster,” would seek to vex and bankrupt a faith-based hospital and two small towns in Washington state is unclear.
Also unclear is why any ASD member would put faith in the purported legal skills of Leaming, who was accused of the unauthorized practice of law in the state five years ago and was the subject of a protection-from-abuse order filed by a notary public who claimed he coerced her into notarizing documents.
At least two notaries public have lost their licenses in Washington state after performing work for Leaming, according to records.
At Least 3 ASD Filers Have Leaming Ties
Excluding himself, Leaming now has been linked to at least three people who either filed or attempted to file documents in the ASD case: Hall, Christian Oesch and Kathryn E. Aschlea.
On June 11, 2010, Aschlea was blocked by U.S. District Judge Rosemary Collyer from filing a document styled “Claim by Notary Presentment/Acceptance” in the ASD forfeiture case in the District of Columbia.
The nature of the blocked filing is not publicly known.
Records in Washington state identify a woman by the same name as a notary public. Meanwhile, Kathryn Aschlea is listed as a business partner of Kenneth Wayne Leaming in a venture known as FAN NW LTD INC. Aschlea is listed as a “governing person” and vice president of the firm, with Leaming — shortening his name to “Kenneth Wayne” by dropping the surname “Leaming” in the registration — listed as president and a “governing person.”
The unsuccessful bid to file in the ASD case occurred more than five months after Collyer issued a final order of forfeiture that granted the government title to the money seized by the U.S. Secret Service from Andy Bowdoin. Collyer signed an order in July 2009 that awarded the money seized from Busby’s Golden Panda to the government.
Federal prosecutors announced more than two years ago that money declared forfeited would be used to compensate victims.
Prosecutors brought the forfeiture case to enforce wire-fraud and money-laundering laws, according to court records. A racketeering statute also is referenced in the forfeiture complaint.
Collyer has consistently ruled that nonparty claimants have no standing in the ASD case.
On July 2, 2010 — nearly six months after Collyer issued the final forfeiture order and four months after Bowdoin appealed it — Collyer blocked Leaming and Christian Oesch from filing a document styled “Notice of Final Determination and Judgment by Christian Oesch and Kenneth Wayne.”
Like Aschlea and Hall, Oesch has a business tie to Leaming. A Leaming company known as AMERICAN INTERNATIONAL BUSINESS LAW INC. is listed as the registered agent for an Oesch-controlled company in Washington state known as HUMAN ECONOMIC RESOURCE SOLUTIONS LTD.
Records list Hall as vice president of AMERICAN INTERNATIONAL, with Leaming as its president.
Records suggest that within days of the July 2 docket entry in which Collyer blocked “Kenneth Wayne” and Oesch from filing the document styled “Notice of Final Determination and Judgment,” Leaming set the stage for ads positioning him as an “attorney” or “lawyer” to appear online. Those ads were removed by Justia.com, Oyez.org and Cornell University Law school earlier this month, after questions were raised about whether Leaming was a licensed attorney.
Records show there have been multiple complaints about Leaming engaging in the unauthorized practice of law in Washington state. At least one of the complaints came from a woman who lost her notary’s license in 2005 as a result of notarizing documents on Leaming’s behalf, according to records.
The woman also filed for a protection-from-abuse order against Leaming, according to records maintained by the Washington State Bar Association, which redacted the woman’s name in a 2005 letter to Leaming that accused him of the unauthorized practice of law.
Records at the U.S. Court of Federal Claims show that “Kenneth Wayne” and Christian Oesch filed a complaint against the United States on July 23, 2010, about three weeks after Collyer rejected their bids to file a document on the ASD docket in U.S. District Court for the District of Columbia.
A public link to the complaint is not available. The docket, however, shows that the U.S. Department of Justice has filed a motion to dismiss the complaint. Whether Leaming and Oesch even can establish that the U.S. Court of Federal Claims (COFC), which typically hears contract disputes in a limited number cases in which the government waives sovereign immunity, has jurisdiction to hear an ASD-related dispute is far from clear.
Leaming is listed as an “agent” for “MYHUB GROUP LLC” on the COFC docket. A company by that name is listed in Nevada records as in “default,” with Christian Oesch as its manager.
Earlier this month, some ASD members received an email that referenced “MYHUB.” The email appeared to be a compendium assembled by ASD member Sara Mattoon. The same email referenced a purported “legal opinion” by “Keny.”
“Keny” is a nickname used by Leaming.
The email asserted that ASD members who filed a restitution claim through Rust Consulting, the government-approved claims administrator, might face a lawsuit from a group of ASD members.
“Again, we are asking that our Claimants do not engage in the DOJ’s Remission Process, as long you want to maintain being part of our Group Claims whatsoever,” the portion of the email attributed to MYHUB read in part. “If you are indeed wanting to eat on the other side of the fence, you must let us know before you submit anything to the DOJ, without causing us potential harm and further damages. In case you were to fail to notify us, we would have a possible claim against you, and that’s not what you want us to do in the first place.”
Kenneth Wayne Leaming, also known as Kenneth Wayne.
UPDATED 8:03 A.M. ET (U.S.A., Nov. 23) A Washington state notary public stripped of her license last month notarized a purported “admiralty” lien for the colossal sum of $9.24 billion against Franciscan Heath Systems, the faith-based operator of St. Clare Hospital of Lakewood, Wash., according to records.
The Franciscan tradition in Washington state traces its roots to 1891, when the Sisters of St. Francis of Philadelphia founded St. Joseph Hospital in Tacoma. St. Clare is a 106-bed facility that serves Lakewood, Spanaway, Steilacoom, DuPont, University Place and other communities in Pierce County, according to records.
The purported lien, acknowledged with the seal of notary Tina M. Hall, was in favor of her business colleague, Kenneth Wayne Leaming, according to records in Pierce County.
Both Hall and Leaming are listed as officers of American International Business Law Inc., a Spanaway company some members of Florida-based AdSurfDaily say is performing legal work on their behalf.
U.S. District Judge Rosemary Collyer of the District of Columbia has blocked bids by both Hall and Leaming to file pleadings in the ASD case. Hall lost her notary license last month after notarizing a string of bizarre documents in Washington state. The nature of the documents she sought to file in the ASD case, which is being prosecuted in the District of Columbia, has not been disclosed publicly.
Some ASD members have said they intended to pursue an admiralty claim against the government.
Leaming, using the notary services of Hall, sought in June 2009 to attach “all tangible and intangible property” of the hospital, including its fixtures, furnishings, motor vehicles, bank accounts, passbooks, saving certificates, stock certificates, lines of credit, inventories, promissory notes, office equipment, educational equipment — and even its mineral and water rights, according to records.
Hall’s license was revoked about 14 months later. The precise reason for the revocation — and whether the documents filed against the hospital played any role in the revocation decision — was not immediately clear.
Other records show that Hall has filed similar documents on Leaming’s behalf in other cases. One of them was for $10 million against members of the City Council of Puyallap, Wash.
Hall also notarized documents for other clients, including a filing styled an “Affidavit of Alternative Obligation” for $100 million against a bank dubbed an “agent” for the Internal Revenue Service.
Such scorched-earth filings have been referred to in other cases as “paper terrorism,” a litigation approach that is designed to rattle the nerves of judges, prosecutors, attorneys and courtroom opponents. ASD member Curtis Richmond has been associated with such filings in a separate case in Utah. In the Utah case, Richmond was among a group of litigants sued successfully for racketeering after a purported “Indian” tribe with which they were involved placed a bogus lien against a county prosecutor for $250 million.
Leaming, who was accused in 2005 of the unauthorized practice of law in Washington state, was dubbed “Postmaster” in the bizarre filing against Franciscan Heath Systems, the hospital, Pierce County Court Commissioner Mark Gelman and others.
Members of law enforcement were expressly warned in the notarized document not to attempt to “negate” Leaming’s wishes to attach the property of the hospital and others. Parties who attempted to interfere “shall be deemed outlaws and/or felons and shall be prosecuted,” according to the filing.
If filing liens against a hospital that has the responsibility for tending to the needs of entire communities were not enough, Leaming also filed liens or claims against the Washington State Bar Association, members of the Practice of Law Board and others.
These liens were styled “commercial liens” or “admiralty” claims or “international claims.” On Oct. 16, 2009, a judge ruled them null and void and ordered Leaming to pay the attorneys’ fees and court costs of his targets. The judge also imposed a $10,000 sanction against Leaming to be paid to the Washington State Bar Association’s Lawyer’s Fund for Client Protection.
See earlier story about the revocation of Hall’s notary license for “professional misconduct.”
See earlier story about ads listing Leaming as an attorney being pulled from prominent websites.
See earlier story about threatening email received by some ASD members.
UPDATED 2:33 P.M. ET (U.S.A.) Cornell University Law School, Justia.com and Oyez.org have removed the online profiles of Kenneth Wayne Leaming. Leaming previously had been listed as an attorney who practiced law and advertised a fee structure of up to $250 an hour from Spanaway, Wash.
Visitors were encouraged to “schedule a free introductory consultation.”
Cornell said Sunday that it would remove Leaming’s profile if he proved not to be a licensed attorney. The university began checking into the matter after it learned a man by the same name had been accused in Washington state in 2005 of engaging in the unauthorized practice of law.
The Washington State Bar Association (WSBA) said yesterday that it was continuing to research matters pertaining to Leaming. Leaming was the subject of a letter sent in 2005 by the Practice of Law Board of the State of Washington. The Law Board made a determination in December 2005 that Leaming’s conduct in cases it was investigating “constitutes the unauthorized practice of law.”
In one case, the Law Board said, a notary public accused Leaming of coercing her into “notarizing documents that resulted in the loss of her notary license.”
A final deposition of the case was not immediately available.
“When [the notary] questioned you about the legality of notarizing the documents you drafted, you were physically and emotionally abusive to her,” the Law Board wrote in its letter to Leaming, citing the notary’s allegations. “[The notary] voluntarily resigned her notary license as a consequence of the acts you directed. She has also obtained an order of protection against you.”
A purported business entity known as “AMERICAN-INTERNATIONAL BUSINESS LAW INC.,” which some AdSurfDaily members claim is providing legal representation to a group of members, is associated with Leaming, according to records.
Unlawful practice of law can be charged as a crime in the state of Washington. Leaming is not listed as a member of the state bar, and has been described by the Anti-Defamation League (ADL) as a “self-described ‘recognized international lawyer’” and member of an extremist group known as the “Little Shell Pembina Band.”
The ASD case has been filled with oddities since the U.S. Secret Service seized tens of millions of dollars from the Florida-based firm in August 2008, accusing ASD in a forfeiture complaint of operating a massive Ponzi scheme.
Some ASD members have been associated with the “sovereign,” “Patriot” and tax-denial movements. The case has featured dozens of bizarre, pro-se pleadings filed by ASD members, some of whom claimed the prosecutors and judges involved in the case were guilty of crimes.
One ASD member — Curtis Richmond — has been associated with a Utah “Indian Tribe” a federal judge ruled a “sham” after members of the bogus tribe placed enormous financial judgments against public servants and members of law enforcement in the performance of their duties. The sham tribe was known as “Wampanoag Nation, Tribe of Grayhead, Wolf Band.” Richmond was successfully sued under the federal racketeering statute for his sham activities.
Regardless, Richmond was hailed a “hero” on the now-defunct Surf’s Up forum, a pro-ASD website that had members who openly jeered and condemned prosecutors and the Secret Service. One forum member described ASD critics as “rats” and “maggots” and “cockroaches.” Some members heckled a federal prosecutor, calling him “Gomer Pyle.” One member wrote that the prosecutor should be placed in a medieval torture rack, suggesting fellow members should draw straws to determine who got the honor of turning the screw.
ASD President Andy Bowdoin said the prosecution was the work of “Satan.”
Many of the pro-se filings in the case are at odds with the public record, conflating realities that simply do not exist about matters pertaining to evidence and witnesses. Recent emails circulated by some ASD members suggest that a group of members is trying to cloud issues and intimidate victims into not filing complaints or making a claim for restitution.
ASD also is the subject of a racketeering lawsuit brought by members against Bowdoin and attorney Robert Garner of North Carolina.
In a bizarre and unsettling development, some members of AdSurfDaily who may be planning to file for restitution through the official claims administrator have received a confusing and threatening email from a “group” of ASD members.
The email, which appears to be a compendium that cobbles together communications from the group and asks ASD members to pass along the information, implies that ASD members who file for restitution through the government-approved process may face legal action from the group, which has or will file claims against the “illicit UNITED STATED (sic) OF AMERICA INC. et al” for its prosecution of the ASD Ponzi scheme case brought by the U.S. Secret Service in August 2008.
The lawsuit threat appears to be targeted at ASD members who are planning to file a restitution claim through Rust Consulting Inc. of Minneapolis. Rust Consulting is under contract with the government to administer the restitution program through a process known as remission in which ASD members must certify they are crime victims.
Pasted into the email is a purported “legal opinion” by a person described as “Keny” of “AMERICAN-International Business Law inc. (sic).”
“Keny” does not appear to be the source of the lawsuit threat. Rather, the email quotes a purported “legal opinion” by “Keny” — and then implies members who file through Rust Consulting may be sued by members of the group. The email asks members not to file for a refund through the official process.
“Please send me your response(s) and I will manage the feedback timely,” says an email signed “MYHUB.” “Again, we are asking that our Claimants do not engage in the DOJ’s Remission Process, as long you want to maintain being part of our Group Claims whatsoever. If you are indeed wanting to eat on the other side of the fence, you must let us know before you submit anything to the DOJ, without causing us potential harm and further damages. In case you were to fail to notify us, we would have a possible claim against you, and that’s not what you want us to do in the first place.
“We very much appreciate your understanding in this rather sensitive time of legal dealings,” the email continues. “No worries, we are just getting started to fight for and along with you. If you feel that this email could help some of your friends in ASD that are not part of our Group Claims, we are allowing you to share and forward this email as long it doesn’t end up in Blogs et al., but then again, people need to be informed since they can’t read and or understand the legal language or the meaning of words any longer.”
Google search results include multiple references to “AMERICAN-INTERNATIONAL BUSINESS LAW INC” and a person referenced as “Keny.”
One of the references appears on a website operated by Cornell University Law School under a heading of “Legal Services & Lawyers.” The Cornell reference identifies a person named Kenneth Wayne Leaming of AMERICAN-INTERNATIONAL BUSINESS LAW INC. of Spanaway, Wash. The Cornell site notes that correspondence should be sent to the attention of “Keny” and that Kenneth Wayne Leaming practices “Admiralty/Maritime, Business Law, Estate Planning and Native American Law.”
Records at the Practice of Law Board at the Washington State Bar Association (WSBA) say that Kenneth Wayne Leaming, also known as Kenneth Wayne, was accused of the unauthorized practice of law by clients in 2005.
One client accused Leaming of “actively market[ing] legal services via seminars and the internet” and of providing “legal advice” and preparing “pleadings for many clients,” according to WSBA.
Another client accused Leaming of contracting with him “to assist him in avoiding an IRS lien on his home” and failing to provide the services.
On Dec. 20, 2005, WSBA said in a letter to Leaming that his “conduct constitutes the unauthorized practice of law.” The final disposition of the matter was not immediately clear. Also unclear is whether Leaming ever was a licensed attorney or authorized to practice law in any state.
Separately, the Anti-Defamation League (ADL) lists Leaming as a member of an “extremist group” known as “Little Shell Pembina Band of North America.”
Leaming, according to ADL, is a “self-described ‘recognized international lawyer’ who once served as a deputy sheriff and member of the Civil Rights Task Force, a “sovereign citizen group that has used badges and raid jackets to resemble law enforcement officers.”
“His CRTF partner, David Carroll Stephenson, was ordered by a federal court in March 2004 to stop promoting an alleged tax scam that allowed people to avoid an estimated $43 million in federal income taxes,” according to ADL.
The identity of “MYHUB” was unclear in the email received by ASD members. Portions of the email were pieced together by a sender known as “Sara.” A person named Sara Mattoon once served as ASD’s official spokeswoman and is referenced in a court filing by the Secret Service in 2009.
In the email, “Sara” referenced remarks attributed to “Keny” as a “legal opinion about why it may be unwise for you to fill out the [Rust Consulting] form, aside from it working against ASD.”
The “Sara” email then reproduces the “MYHUB” email and the purported “legal opinion” by “Keny.”
The purported legal opinion describes the Rust Consulting website, which is listed in court documents as the official site for ASD victims, as “almost exclusively a propaganda site to get the viewer to ‘believe’ the gov’t LIE that advertising via network marketing on the internet is somehow bad business and fraudulent, and solicit false testimony from the viewer based on the false information!”
In yet-another email received by ASD members, a fellow member referenced as “Robert” also referred to the claims program administered by Rust Consulting. The email from “Robert” includes an unattributed opinion, meaning the identity of the person who offered the opinion is unclear.
“If members feel it absolutely necessary to complete the remission form now instead of waiting a little longer for the legal process to be completed then they may want to write on a separate piece of paper and have it notarized saying that they were not an investor,” according to the opinion contained within the email from “Robert.”
Members also should swear that “they purchased advertising for their website and that they were happy with their purchase,” according to the unattributed opinion circulated by “Robert.”
“The govt is trying to trick people into saying it was an investment,” the opinion claimed.
Separately, an apparent ASD member known as MMG7 who posts on the MoneyMakerGroup Ponzi forum left a scathing missive yesterday in an ASD thread at the forum.
“The same people who abused their power, under the color of law, back in August of 2008 and basically *shut down* the company without due process are up to yet additional tactics to *CREATE VICTIMS* out of thin air,” the post read in part.
“The general consensus is that once they can *create victims* they can then turn around and use it against ASD or even YOU.
“It is VERY HEALTHY to question their motives. Remember, these are the same people that ruined the lives of 100,000+ people in the blink of an eye without so much as having to provide an explanation for their actions.
“Could it be they thought ASD would roll over and play dead so they could put a feather in their cap and claim victory? Not to mention being able to keep a hefty sum of members monetary property.”
The MoneyMakerGroup forum is referenced in a May filing by the U.S. Postal Inspection Service as a place from which Ponzi schemes are promoted. The filing accused an entity known as Pathway To Prosperity of conducting an international Ponzi scheme that defrauded more than 40,000 investors across the globe.
MMG7 did not explain in his post how he arrived at the conclusion that ASD was denied due process in a court case that has featured more than 175 filings and a hearing called at ASD’s request to free seized money.
ASD’s request was denied in November 2008 because it did not demonstrate at the hearing it requested to prove its legitimacy that it was operating lawfully and was not a Ponzi scheme, according to court records.
ASD President Andy Bowdoin later met with federal prosecutors over a period of at least four days. Bowdoin, according to court filings, signed a proffer letter and acknowledged the government’s material allegations in the case were all true.
Although Bowdoin initially contested the forfeiture of tens of millions of dollars seized in the case, he submitted to it in January 2009. By the end of February 2009, however, Bowdoin reentered the case, acting as his own attorney and seeking to reassert his claims to the money. Months of legal wrangling followed, and Bowdoin was forced to hire new attorneys. A federal judge ruled last fall that Bowdoin would not be permitted to reenter the case, and an order of forfeiture was signed in January 2010.
Nor did MMG7 explain how he had arrived at his conclusion that the government “ruined the lives of 100,000+ people in the blink of an eye without so much as having to provide an explanation for their actions.”
Court records plainly show that that the government explained in considerable detail to at least two federal judges why it sought the authority to seize tens of millions of dollars contained in the personal bank accounts of Bowdoin, who was accused of swindling investors in an Alabama securities caper in the 1990s. Moroever, the government has said all along that it intended to establish a restitution pool from the assets seized in the case.
The implementation of both the pool and the restitution/remission process were delayed by appeals filed by Bowdoin.
Bowdoin was sentenced to prison in the Alabama case, but avoided jail time by agreeing to make restitution, according to records.
Clarence Busby, his business partner in the AdSurfDaily/Golden Panda Ad Builder venture, also swindled investors in a separate securities scheme in the 1990s, according to the SEC.
At the same time, MMG7 did not explain how he arrived at his conclusion that the government “shut down” ASD. Records show that ASD was permitted to continue to display advertising after the seizure, but that Bowdoin chose not to do so.
Prosecutors say that, despite ASD’s claims to a federal judge that it had no money to operate, the company had $1 million in an account under a “different name” on the island nation of Antigua.
Records show that Bowdoin did not reveal the existence of the Antigua money to members until after ASD had asked the court for emergency cash to pay its rent and webhosting bill.
U.S. District Judge Rosemary Collyer, whom Bowdoin and another member later tried to have removed from hearing the case, refused to release funds to ASD.
DISCLOSURE: The PP Blog is referenced in Lynn Edgington’s new book and provided a comment about the good works undertaken by Eagle Research Associates Inc., a Public Benefit Nonprofit Corporation registered in California. Eagle, which researches Internet investment scams, was formed Aug. 3, 2007. It is an approved 501(c)3 Corporation.
The PP Blog was not compensated for the comment it provided Eagle and, at various times, has given Eagle permission to reproduce articles that have appeared on the PP Blog. The Blog did not charge Eagle a fee. Lynn Edgington is a regular contributor to the PP Blog and is not compensated for his contributions. The PP Blog is not being compensated for providing the link to Lynn’s book (below photograph). The book is titled, “Robbing You With A Keyboard Instead Of A Gun: Cyber Crime – How They Do It.”
The now-defunct Surf’s Up forum was AdSurfDaily’s officially endorsed news venue. It became so on Nov. 27, 2008, a little more than a week after a key court ruling went against ASD, a Florida company implicated by the U.S. Secret Service in an alleged $100 million Ponzi scheme. Surf’s Up routinely deleted posts that challenged ASD President Andy Bowdoin, and routinely suppressed information unfavorable to ASD.
Surf’s Up was known for conflating fantastic realities to accommodate unpleasant fact sets. Among the unanswered questions as the ASD investigation proceeds is whether the forum and some of its members were/are engaging in efforts to obstruct justice by asking victims to spread misinformation.
Some ASD and Surf’s Up members recently received the email below, which fractures facts and appears to encourage members to spread misinformation and not to participate in the federal restitution program. (Italics and carriage returns added. PP Blog’s Notes in Bold.)
“Please pass this on to your group and ask them to pass it on to others who were in ASD. The lawsuit filed against ASD, Andy and his wife Faye was decided in ASD’s, Andy’s & Faye’s favor a few months ago. (PP Blog Notes: The lawsuit was not decided in favor of ASD, Andy Bowdoin or Faye Bowdoin. Florida dropped the lawsuit “without prejudice,” meaning it can be refiled. The state said it had turned over a victim’s list to the federal government for the purposes of securing restitution from funds seized by the U.S. Secret Service.)
“In October the state of FL dropped all charges against ASD. (PP Blog Notes: See note above.)
“The Federal charges are all that is left to be addressed and progress will be made on that this month. Unfortunately if members respond to this notice and file a claim, they will be contributing to ASD losing its case because the government will use it as evidence that ASD created these “victims.” (PP Blog Notes: Is this a deliberate attempt to suppress the victims’ count and a bid to obstruct justice? Beyond that, Andy Bowdoin’s appeal of the forfeiture of money he advised a federal judge belonged to him is hardly the sole, unsettled legal issue. It is known, for example, that a criminal grand-jury probe has been under way. Bowdoin references the criminal probe in his own court filings. It is possible that criminal indictments against multiple individuals could be returned.)
“I have told this man that but he persists because he will make money from ‘helping.’ If ASD loses its case, THEN it would be appropriate to follow up these options, but not until then.
“My husband was hit by a car while he was bicycling and I have been struggling to care for him at home alone. I am 63, 105 lbs and he is functionally quadriplegic (which means that there is much to be hopeful for but, in the meantime, it is very challenging). For this reason I am unable to keep everyone updated as I had hoped to do and I have been unable to spearhead a member campaign to help the effort as I had also hoped to.
“God’s Blessings,
Sara”
(PP Blog Notes: The section of the note above even could bring things such as practicing law without a license into play because it introduces an “if, THEN” proposition that lays out a legal strategy. For example, “if” ASD loses the forfeiture proceeding in the appeals court, only “THEN” should victims register for the restitution program. One of the core problems is that there may be no way of knowing precisely when the appeals court will issue its ruling (oral arguments scheduled for this month have been canceled, and the appeals court will decide the issues based on briefs from both sides). Meanwhile, the restitution/remission forms victims must file are due by Jan. 19, 2011. Victims who follow the advice in the email could be denied a refund.)
EDITOR’S NOTE: The remarks below are excerpted from a speech last week in New York by Assistant U.S. Attorney General Lanny A. Breuer. As the PP Blog has previously reported, the Justice Department and agencies such as the FBI and U.S. Secret Service have been using undercover operatives to infiltrate criminal operations and networks used by the criminals.
One of the FBI investigations Breuer referenced was the Trevor Cook Ponzi scheme in Minneapolis. The scheme consumed tens of millions of dollars, defrauding victims of at least $158 million. Many mysteries remain in the case.
Meanwhile, undercover operatives also recently were used to expose penny-stock schemes operating in Florida.
It also is known that the Secret Service used undercover operatives in the AdSurfDaily case, the INetGlobal case, the Regenesis 2×2 case, the Legisi case and a case involving alleged international fraudster Vladislav Horohorin, accused of using criminal forums to peddle stolen credit-card information.
Here, now, some excerpts from Breuer’s speech . . .
Part of Trevor Cook's stash.
“Now, as I’m sure you know, financial criminals can be extraordinarily innovative, and they are often expert at covering their tracks. So we are always looking for creative ways to gather the evidence we need to bring financial criminals to justice. To that end, we have begun increasingly to rely, in white collar cases, on undercover investigative techniques that have perhaps been more commonly associated with the investigation of organized and violent crime.
“As part of this effort, we have significantly strengthened the Criminal Division’s Office of Enforcement Operations (known as OEO), which is the office in the Justice Department that reviews and approves all applications for federal wiretaps from across the country. We have a dynamic new OEO Director, Paul O’Brien, and we’ve substantially increased the number of attorneys at OEO who review these wiretap applications, adding to their ranks experienced prosecutors and recent graduates who have completed federal clerkships. As a result, the number of wiretaps we authorize – in all types of cases – has gone up.
“Let me give you just two examples of white collar cases in which we have used undercover techniques, both of which also highlight areas in which we have stepped up our white collar enforcement efforts more generally.
“The first example is the case of Trevor Cook, which was prosecuted by the U.S. Attorney’s Office in Minneapolis. Mr. Cook is just one of dozens of individuals whom we’ve prosecuted in recent months for participating in investment fraud schemes. Over the course of several years, Mr. Cook schemed to defraud at least 1,000 people out of approximately $190 million by pretending to sell them investments in a foreign currency trading program.
“In reality, he was pocketing the money or using it to pay off other investors. As was recently reported in the New York Times, we gathered evidence against Mr. Cook by using an undercover informant to record his transactions and conversations. [Cook] pleaded guilty earlier this year and was recently sentenced to 25 years in prison.
“Trevor Cook is one of literally hundreds of financial criminals who have preyed upon vulnerable, individual investors and bilked them out of their savings using investment fraud schemes. And as with Mr. Cook, we have been prosecuting these people aggressively, all over the country – from New Jersey and Connecticut to Texas and California, and everywhere in between.
“The second example comes from our enhanced efforts in the area of FCPA enforcement. Earlier this year, as I’m sure many of you know, we indicted 22 defendants in the military and law enforcement products industry for their participation in widespread schemes to bribe foreign government officials. These indictments resulted from the Department’s most extensive use ever of undercover law enforcement techniques in an FCPA investigation, and they represent the single largest prosecution of individuals in the history of our FCPA enforcement efforts. In September, one of the defendants in the case, Richard Bistrong, pleaded guilty . . .
“Over the last 18 months, we’ve devoted significant additional resources to the Criminal Division’s Fraud Section. We’ve recruited talent not only from white shoe law firms, but also from a deep pool of prosecutors around the country who bring with them extensive experience in prosecuting everyone from violent mobsters to dangerous terrorists. We are now bringing that extraordinary talent and experience to bear on prosecuting financial fraudsters.”
In early September, federal prosecutors informed U.S. District Judge Rosemary Collyer that an official website had been established to inform victims of the alleged AdSurfDaily Ponzi scheme about the remissions and restitution process.
The government’s filing, which lists the URL of the website — http://www.adsurfdailyremission.com/ — is a public record. It has been on Collyer’s docket since Sept. 2. It is signed by three federal prosecutors, including Ronald C. Machen Jr., the U.S. Attorney for the District of Columbia.
What the filing means is that the government has formally notified Collyer that it has done what it said it would do all along: Arrange for ASD victims to receive restitution from seized funds through a formal process known as remission.
The remissions website is operated by Rust Consulting Inc., which is under contract with the government to handle the remissions and restitution process.
The PP Blog has seen reports and received inquiries from readers about a company known as Anshell Financial Services LLC (AFS). Among other things, AFS claims to be able to “expedite” the process of recovery. It also claims it has “established an efficient business relationship” with Rust, the official claims administrator.
Not so fast, says Rust.
“Rust Consulting, Inc. is an independent claims administrator that has been retained by the U.S. Secret Service to assist in processing Remission Forms,” Rust said. “Neither the U.S. Secret Service nor Rust Consulting, Inc. are in any way affiliated with or endorse AnShell Financial Services.”
AFS published a document on its website that says it will charge a recovery fee to assist ASD, Golden Panda and LaFuenteDinero members. The document was called a “retainer agreement.”
“The fee for these services is a retainer of the lesser of 10% of your investment or $1,000 against 10% of the recovered investment,” AFS said. The company also noted in an email to victims that it may be “intimidating and unpleasant” to work with the government.
There is no need to pay any company to recover money seized by the Secret Service in the ASD case. Contrary to claims made by some ASD members, the government has said all along that it intends to form a restitution pool from the seized assets. It has hired Rust to administer the process and the pool.
As things stand today, the pool is not fully funded because of appeals filed by ASD President Andy Bowdoin. The government is 3-0 in the forfeiture litigation so far, and 1-0 in the appeals process — with a Bowdoin appeal remaining to be decided.
Among the bizarre claims circulated by some ASD members is that prosecutors placed approximately $80 million seized in the case in interest-bearing accounts that generated $1 billion or more in revenue.
Some ASD members claimed prosecutors were partying with the money and had stolen at least some of it. Others claimed Collyer was conspiring with another federal judge to deny ASD members justice.
Even as some ASD members were making one bizarre claim after another, others added to strange nature of the case by claiming there were no “witnesses” and no “evidence” against ASD in the case.
These claims were made despite the fact Collyer conducted an evidentiary hearing in open court over a two-day period in the fall of 2008. ASD members attended the hearing and even testified. Evidence was tested and witnesses examined by both the government and the ASD side.
Some of the evidence against ASD has been in the public record since Aug. 5, 2008. Regardless, dozens of members continued to insist there was no evidence against the company.
In November 2008, Collyer ruled that ASD had not demonstrated it was a lawful business and not a Ponzi scheme.
Bowdoin later signed a proffer letter and acknowledged the government’s material allegations all were true. He met with prosecutors over a period of at least four days, and gave information against his interest because he believed that cooperation possibly could help him avoid a prison sentence, according to Bowdoin’s own court filings.
In January 2009, Bowdoin submitted to the forfeiture. In March 2009, he said through a letter released on the now-defunct Surf’s Up forum that he changed his mind after consulting with a “group” of members. Bowdoin tried to renew his claims to the money, but the effort failed after a months-long court battle.
Bowdoin next tried to have Collyer removed from the case, another effort that failed. He has blamed lawyers from both sides of the case for his legal predicament, and claimed his continuing fight was inspired by a former Miss America.
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.
