Will the August 2008 forfeiture case against $65.8 million in the personal bank accounts of AdSurfDaily President Andy Bowdoin end before Christmas?
A federal judge suggested today that it might.
Bowdoin, 74, knew what he was doing when he submitted in January 2009 to the forfeiture of the cash and “knowingly and voluntarily” agreed never again to raise the claims, Judge Rosemary Collyer said in an order today.
Collyer added that the time to file claims has expired, thus agreeing
Andy Bowdoin
with an argument advanced by federal prosecutors earlier this month. But Collyer today left the door open for 30 more days before ordering the final forfeiture of the money to the government, issuing an order that any “potential claimant(s)” must “show cause in writing” before Dec. 20 why she should not grant the final forfeiture.
Earlier this month Collyer denied a bid by Bowdoin that began in February with his emergence as a pro se litigant to reassert claims to the money. Prosecutors said Bowdoin’s acts — and acts by dozens of other ASD members who had attempted to intervene in the case — were delaying the implementation of a restitution program for victims of the alleged ASD wire-fraud, money-laundering, securities and Ponzi scheme.
Collyer has denied dozens of bids by ASD members to intervene for money in the case, saying they had no standing and no “cognizable interest” because the money had belonged to Bowdoin alone at the time of its seizure.
On Nov. 10 alone, Collyer denied 13 such bids to intervene. All were filed by ASD members who shared a pro se litigation template. The judge repeatedly denied pro se attempts to intervene, denying the bids en masse in July, August, September and November. More than 70 such motions were filed in the case, dating back to February 2009.
Curtis Richmond, a California man, was one of the pro se litigants. Records show Richmond was a member of a Utah “Indian” tribe a federal judge in a separate case last year ruled a “complete sham” that tried to extort money from public officials to gain a favorable litigation result.
Richmond was hailed a “hero” on the pro-ASD Surf’s Up forum, even as thousands of ASD members were waiting to gain a share of a restitution pool the government is setting up for ASD victims.
Even though Andy Bowdoin and his family knew in January 2009 that the government intended to seize the Tallahassee home of his stepson George Harris and an $800,000 building purchased with cash in ASD’s home city of Quincy, Fla., the AdViewGlobal (AVG) autosurf proceeded with its launch in February 2009, according to an analysis of web records and new court filings.
Although a “Proof of Service” filed by federal prosecutors yesterday did not mention AVG, other records say that Bowdoin was given “direct notice” of a second forfeiture complaint that had been filed in December 2008 against ASD-connected assets. The initial forfeiture complaint against ASD was filed in August 2008.
Yesterday’s filing by the prosecution showed that the Harris home and ASD building in
Andy Bowdoin
Quincy were publicly posted for forfeiture on Jan. 8, 2009. AVG launched less than a month later, triggering a virtually relentless series of 200-percent, matching bonus offers to generate cash and events that ultimately led to its collapse after the Harrises were identified by AVG as the owners of the company.
A Nov. 6 filing by the prosecution states that Bowdoin was given “direct notice” of the December 2008 seizure in January 2009, as were “all known potential claimants.” Prosecutors noted in the Nov. 6 filing that they had “signed receipts” from Bowdoin and others.
Other records clearly show that AVG’s launch proceeded in February 2009, pushed by former members of ASD despite the filing of two forfeiture complaints against the firm and a racketeering lawsuit.
Cash and property seized by the U.S. Secret Service in the December 2008 forfeiture complaint against assets tied to Bowdoin, his wife, stepson and Golden Panda Ad Builder are being prepared for liquidation, according to yesterday’s filing in the December case.
The property includes $634,266.13 in cash seized from a Golden Panda bank account. It is being held in a U.S. Customs Suspense account in Indianapolis.
The $800,000 building ASD paid for in cash also is being prepared for liquidation. The building is located in Quincy, Fla. It was promoted by Bowdoin as the site to which the company intended to move to accommodate employees and customers, owing to ASD’s rapid expansion.
ASD’s growth was fueled by both video and written lies that its business was legal, the Secret Service said.
In only months last year, ASD morphed from a company that earlier said it could not afford to pay members because of a malfunctioning computer script that purportedly had overpaid members and an accompanying $1 million theft at the purported hands of “Russian” hackers to a purported cash turbine was was going to buy an interest in an “international bank” and a “call center” in South America, the Secret Service said.
In August 2008 — in the first forfeiture case filed against ASD’s assets — prosecutors told a federal judge that they believed Bowdoin was preparing to flee the United States. After reviewing a 37-page affidavit filed by the Secret Service and an additional 57 pages of evidence, including surveillance photos taken in Quincy prior to the filing of the application for seizure, a federal magistrate judge ordered Bank of America to freeze 13 bank accounts linked to ASD or Golden Panda and the U.S. Department of Homeland Security to seize the money.
Prosecutors later seized two additional Golden Panda accounts at Bank of America, as part of the August complaint, bringing the total of accounts seized in the August matter to 15 — 10 from ASD, and five from Golden Panda. Those accounts, after reconciliations, contained more than $79.88 million, according to court filings.
As the investigation continued, prosecutors established more links to ASD-connected assets. In December 2008, they filed a second forfeiture complaint, naming an additional Golden Panda account maintained by Bartow County Bank, rather than Bank of America. The Bartow County account is the one that contained the $634,266.13 now being held in Indianapolis.
Prosecutors also seized the Tallahassee home of George and Judy Harris in the December complaint, saying its mortgage of more than $157,000 had been paid off with illegal proceeds from ASD. Records show the mortgage was paid off about three weeks after a May 31, 2008, ASD rally in Las Vegas had concluded.
George Harris is the son of Bowdoin’s wife, Edna Faye Bowdoin. Judy Harris is the wife of George Harris. The AdViewGlobal (AVG) autosurf, which came to life four months after the August seizure of tens of millions of dollars from Bowdoin’s bank accounts and approximately one month after a key court ruling went against ASD in November 2008, later identified George and Judy Harris as its owners.
Bowdoin invoked God at the May 2008 Las Vegas rally, imploring members to imagine themselves wealthy and thanking God for providing him tremendous wealth.
“And I always say, ‘Thank you, God, for developing me into a money magnet,’” Bowdoin said at the rally. “And I see myself as a money magnet in attracting money and, I say, attracting large sums of money.â€
Within days of the conclusion of the rally, according to court filings, ASD money was used by Edna Faye Bowdoin and George Harris to open a bank account into which more than $177,000 of illegal proceeds were deposited. More then $157,000 of the opening deposit was used to pay off the Harris home, which was seized in the December complaint.
Neither George nor Judy Harris filed a claim to the home, prosecutors said. In September 2009, prosecutors made a veiled reference to the AVG autosurf in court filings.
“Maybe Bowdoin thought that before the government brought its charges he (like some of his family members) could move to another country and profit from a knock-off autosurf program that Bowdoin funded and helped to start,” prosecutors said.
AVG purportedly was headquartered in the South American country of Uruguay. Servers of the purported “advertsing” firm that operated in largely the same form as ASD resolved to Panama.
Also seized in the December complaint were three automobiles: a 2009 Lincoln luxury sedan that had been acquired in July 2008 for nearly $50,000; a 2008 Honda CRV registered to George and Judy Harris acquired in June 2008 for nearly $30,000 after the Las Vegas rally; and a 2009 Acura TXS registered to former ASD figure Hays Amos for nearly $34,000.
The check to acquire the Acura registered to Amos was signed by ASD Chief Executive Officer Juan Fernandez, prosecutors said.
Also seized in the December complaint were computer equipment, two jet skis and a hauling trailer that were purchased with $20,506 of ASD money; and a Triton Cabana boat, Mercury motor and trailer purchased with $23,445 of ASD funds, prosecutors said.
All of the property seized in December now is being prepared for liquidation, pending an order from U.S. District Judge Rosemary Collyer. Prosecutors said no one made a claim to any of the seized property.
Based on the lack of claims, it is possible that prosecutors may argue that none of the property was claimed because ASD already had a plan to replace it through AVG.
ASD’s seized computers are being held at Secret Service headquarters in Orlando, according to to the prosecution court filing. Meanwhile, the Lincoln luxury sedan registered to Bowdoin/Harris Enterprises and the Honda registered to George and Judy Harris are being held at a company in the auto-auction business in Lakeland, Fla.; the Acura registered to Amos is being held at an auto-auction company in Daytona Beach, Fla.; and the marine equipment is being held at auction companies in Fort Lauderdale and Pensacola, Fla.
The $800,000 building and the Harris home were posted for forfeiture on the same date — Jan. 8, 2009, according to the prosecution filing. Only 5 days later Bowdoin surrendered his claims to the millions of dollars seized in August 2008.
Regardless, the AVG autosurf proceeded with its formal launch in February 2009 — less than a month after the Harris home in Tallahassee and the ASD building in Quincy were posted for forfeiture.
By the end of February, Bowdoin attempted to reenter the August case, acting as his own attorney and saying he’d changed his mind about submitting to the August seizure. Coinciding with Bowdoin’s pro se filings was an announcement by the AVG autosurf that it was becoming a “private association” based offshore.
During the same time period, a poster at the Pro-ASD Surf’s Up forum told members that the Secret Service had seized the bank accounts of ASD promoters. The poster warned members to remove money from their bank accounts before it could be seized.
By June 25, 2008, AVG announced that it was suspending cashouts. After initially blaming its inability to pay members on the greed of some members, it later changed its story and said $2.7 million had been stolen from the firm.
The story was remarkably similar to the story the Secret Service said ASD had told about the purported “Russian” hackers to explain why it couldn’t pay members.
EDITOR’S NOTE: In August, a poster here who defended autosurf Ponzi schemes demanded readers to “show me one time where the [U.S. government] has even started a lawsuit or ‘gone after’ a company off shore.” The post concerned the AdVentures4U (ADV4U) autosurf, which, like a number of autosurfs, claimed legal ties to Panama. Promoters said the purported ties insulated the surf from prosecution. Readers responded by providing several examples of prosecutors extending their reach beyond U.S. domestic soil to pierce the illusion of corporate veils and bring schemers to justice.
The story below is about an alleged Utah Ponzi, real-estate leveraging and forex-trading scheme in which the operator was arrested in Panama, brought back to the United States and jailed.
While Jeffrey Lane Mowen was in jail awaiting trial, the FBI said yesterday, he solicited a fellow inmate scheduled to be released in October to murder four witnesses “with the intent of preventing their attendance and testimony at his federal fraud trial” in the Ponzi scheme case.
UPDATED 4:14 P.M. ET (U.S.A.) In a case that puts more than just the financial dangers of Ponzi schemes on full display, jailed Ponzi suspect Jeffrey Lane Mowen has been indicted in Utah on charges of hatching a plot to hire a fellow prisoner to kill four witnesses in the Ponzi scheme case upon the inmate’s release from prison.
Mowen was indicted yesterday on charges of wire fraud, solicitation to commit a crime of
violence, witness tampering and retaliating against a witness. Mowen, jailed in Davis County, Utah, earlier this year after being arrested by Panamanian authorities working proactively with U.S. officials, was extradited to the United States to face the original charges in the case.
Jeffrey Lane Mowen
Prosecutors indicted Mowen in February under seal for the alleged Ponzi, announcing when the indictment was unsealed April 21 that he was “living outside of the United States.” He was arrested just three days later in Panama “by Panamanian authorities in conjunction with the FBI Legal Attache office,” the FBI said.
U.S. authorities said Mowen used investor funds “to purchase more than 200 high-end antique, classic, and modern vehicles, including cars, trucks, trailers, motorcycles, three-wheelers, and other vehicles.”
Mowen, 47, of Lindon, Utah, used his material possessions “as symbols of his success to investors,” the FBI said. The agency added that Mowen also used investor funds to “pay for personal expenses, including payments to himself and his [former] wife, dining expenses, vehicle storage fees, travel, utilities, and credit card expenses.”
For its part in a separate civil case, the Securities and Exchange Commission alleged that Mowen had three prior convictions in Utah for securities fraud and two for theft. Despite Mowen’s criminal record and history as a fraudster, promoters still did business with him. Their faith drained millions of dollars from investors, the SEC said.
Using language apt to cause unease in the autosurf Ponzi world, the SEC said one promoter “either knew or was reckless in not knowing that Mowen had multiple recent felony convictions involving crimes of dishonesty.”
Indeed, the SEC said, the promoter learned in approximately late June 2007 that Mowen had been convicted of securities fraud . . . [but] continued to solicit new investor funds for several months while failing to disclose Mowen’s criminal history to any of the Promoters or their investors.”
Downstream promoters who entrusted the promoter “conducted virtually no due diligence in connection with [his] purported investment opportunities, but transferred investor money to [him] without any documentation or limitation on his use of the funds,” the SEC said.
“[T]he Promoters were reckless in failing to discover [his] association with Mowen and that their funds were being placed into a Ponzi scheme or used for other undisclosed purposes,” the SEC said.
Among the SEC’s civil allegations against Mowen were that he siphoned off $8 million in investor funds for his personal use and transferred $650,000 to his former wife, who is named a relief defendant in the case.
Authorities painted a picture yesterday of a scheme that had morphed from financial crimes that crossed international borders to murder-for-hire — all in the name of Ponzi profits.
Federal prosecutors have asked a federal judge to order the formal forfeiture of more than $65.8 million seized from 10 bank accounts in the personal name of AdSurfDaily President Andy Bowdoin.
Prosecutors also asked for a forfeiture order covering Bowdoin’s residence at 8 Gilcrease Lane in Quincy, Fla.
“Plaintiff applies for a default judgment and final order of forfeiture because these eleven defendants in rem were properly served, and no timely paper, pleading, or other claim to the defendant properties remain properly filed that permits any person to challenge their forfeiture,” prosecutors said.
They added that a default notice to the property had been requested, and entered by the Clerk of
Court Nov. 16. Prosecutors said all of the property — the proceeds of the bank accounts and the
Andy Bowdoin
residence — had been advertised for forfeiture beginning on Nov. 15, 2008, more than a year ago.
Court documents unsealed in the case show that the U.S. Secret Service feared Bowdoin had become aware of scrutiny into his business affairs last year and planned to flee the country.
Prosecutors filed 13 separate applications for seizure warrants to trap money connected to ASD on Aug. 1, 2008. A federal magistrate judge ruled that the agency had established probable cause to seize the money, and ordered Bank of America to freeze the accounts.
On the same day, a message appeared on ASD’s website that it was unable to move money in and out of its accounts. Prosecutors said Bowdoin had been talking about South America and planned to stop using Bank of America in July 2008, choosing instead to switch to offshore service-providers, including Canada-based Solid Trust Pay.
Because Bowdoin had suddenly relinquished in July 2008 what had been described as a 50 percent ownership interest in Golden Panda Ad Builder and investigators determined that Bowdoin either had bought or was planning to buy a home in another country — and because a bank other than Bank of America had closed a Bowdoin-connected account just prior to the seizure amid Ponzi concerns — investigators said Bowdoin was setting the stage to flee.
The U.S. Secret Service feared AdSurfDaily President Andy Bowdoin had become aware of scrutiny into his business affairs and planned to flee the country, according to a 37-page affidavit originally filed under seal in the case.
Meanwhile, the affidavit revealed that a key Secret Service investigator in the case formerly was a member of a Drug Enforcement Administration (DEA) Task Force in Florida and was experienced in “investigating large criminal organizations that distributed and sold controlled substances.”
The Secret Service affidavit, however, did not list allegations of a drug crime. Instead the agency focused on what was described as a “wide-spread Ponzi fraud” and the crimes of wire-fraud and conspiracy to commit wire fraud, noting that the affidavit had been “submitted for the limited purposes of establishing probable cause.”
“I have not included every detail of every aspect of the investigation for this affidavit,” the agent who prepared the affidavit said. “Rather, it only includes the information necessary to prove that probable cause exists for a seizure warrant to be issued for property constituting proceeds of a wire fraud scheme.”
Accompanying the affidavit were government exhibits of evidence totaling 57 pages, all of which were reviewed by U.S. Magistrate Judge Alan Kay, who determined that the Secret Service had established probable cause to seize 10 Bowdoin bank accounts.
In a series of 13 orders dated Aug. 1, 2008, Kay directed the Secretary of the U.S. Department of Homeland Security “and any Authorized Officer of the United States†to seize Bowdoin’s bank accounts and three accounts tied to Golden Panda Ad Builder.
Bank of America, the financial institution in all 13 cases, was ordered to freeze the accounts.
The documents are the first to reveal that a judge other than U.S. District Judge Rosemary Collyer had a role in the case. Meanwhile, the documents destroy myths advanced by some ASD members that the seizure was accomplished extrajudicially, that the government was not authorized to seize the funds — and even that agents were partying with the money.
“Based [on] ASD’s indication that it intends to cease accepting funds into [Bank of America] at the end of July 2008, Bowdoin’s indication that he has relinquished his interest in Golden Panda [Ad Builder], and an indication that Bowdoin intends to establish his offshore presence, and the recent complaints governmental authorities have received, I believe that Bowdoin is aware of increasing scrutiny and that he intends to move himself, his proceeds, and, until it collapses possibly his operation, offshore,” the Secret Service wrote in the affidavit.
The agency said Bowdoin had moved millions of dollars into Canada just prior to the seizure
Read a warrant originally issued under seal Aug. 1, 2008, by U.S. Magistrate Judge Alan Kay, who ordered the U.S. Department of Homeland Security to seize a Bowdoin bank account that contained more than $31.6 million based on the government’s affidavit in the case.
On July 22, prior to the seizure and during the early part of the investigation, the Secret Service listened to a Golden Panda conference call featuring Clarence Busby, according to the affidavit.
“During the call, a person who identified himself as Busby said that Bowdoin approached him about running ‘Golden Panda,’” the Secret Service said in the affidavit. “Busby stated that he and Bowdoin were 50% partners but that Busby would be in charge of the daily operations of Golden Panda.”
But Busby’s words ultimately conflicted with a note on Golden Panda’s website “purportedly written by Bowdoin advising that he was relinquishing his role as President, as well as his ownership rights in, Golden Panda,” the Secret Service said.
A federal judge lifted the seal on the records in October 2008. Although the filings became public records upon the lifting of the seal, the information was difficult — though not impossible — to obtain though federal database searches.
Records were filed under 13 different case numbers — one for each bank account — none of which could be accessed by searching under the names of Bowdoin, Busby, AdSurfDaily or Golden Panda.
Agents had been probing ASD since early July, and increasingly gained knowledge about the firm by conducting surveillance in ASD’s home city of Quincy, Fla. Multiple agents joined the autosurf, the Secret Service said.
Among the troubling developments in the earliest days of the probe were that a bank other than Bank of America had closed a Bowdoin account amid Ponzi scheme fears and that Bowdoin was moving money into Canada, where it could not be easily traced, according to the affidavit.
Bowdoin’s behavior pointed to a plan to leave the United States, the Secret Service said.
At the same time, the Secret Service said, the FBI was beginning to receive complaints about ASD, including an inquiry from the Gadsden County Chamber of Commerce about the legitimacy of the surf firm.
Bowdoin proved to be an embarrassment for the Chamber, which initially lauded him for creating jobs but later found itself confronting troubling questions about the firm.
Investigators “also learned that Bowdoin had purchased, or was seeking to purchase, a home in another country,” according to the affidavit.
On July 12 in Miami, the Secret Service said in the affidavit, Bowdoin told attendees of an ASD “rally” that the company “was looking to purchase a South American call center, to purchase a credit card processing center, to purchase an interest in an international bank, and to profit from future investments in real estate.”
All of the ASD bank accounts were in Bowdoin’s personal name, with a “D/B/A,” the Secret Service noted.
A Dallas-based company with ties to ASD was charged in a sealed indictment in April 2008 with helping a Colombian cocaine operation launder money by providing debit cards that were used to convert drug proceeds to cash in Medellin.
The company — Virtual Money Inc. — once provided debit cards to ASD. A grand jury in the Virtual Money case authorized forfeiture complaints totaling $7.12 million. The complaint was unsealed in September 2008, several weeks after ASD’s assets were frozen. The indictment names 10 defendants, including VM President Robert Hodgins, who is believed to have fled the United States.
Prosecutors said that Virtual Money, known simply as VM, helped the Colombian drug operation offload at least $7.1 million in drug proceeds at automated teller machines in Medellin. Medellin once was home base of the infamous Medellin Cartel, operated by drug lord and terrorist Pablo Escobar. Escobar was killed by Colombia National Police in 1993.
ANNOUNCEMENT 7:21 P.M. ET (U.S.A.): The PatrickPretty.com Blog has obtained copies of seizure warrants, warrant returns and “freeze” orders in the alleged AdSurfDaily Ponzi scheme.
The warrants are part of the forfeiture case against ASD’s assets. They were filed under seal Aug. 1, 2008 — the same date a note appeared on the ASD website that the autosurf firm could not move money in and out of its bank accounts.
A federal magistrate judge presided during the opening hours of the case, ordering Bank of America to freeze tens of millions of dollars. The documents are the first to reveal that a judge other than U.S. District Judge Rosemary Collyer has had a role in the case.
“I am satisfied that the affidavit(s) and any recorded testimony establish probable cause to believe that the property so described is subject to seizure and that grounds exist for the issuance of this seizure warrant,” the orders advised the bank.
Seizure warrants for ASD President Andy Bowdoin’s bank accounts were signed by U.S. Magistrate Judge Alan Kay, whose signature on the documents destroys the myth advanced by some ASD supporters that the U.S. Secret Service seized Bowdoin’s assets extrajudicially.
Kay’s order specifically directed the Secretary of the Department of Homeland Security and “any Authorized Officer of the United States” to seize the accounts between 6 a.m. and 10 p.m. and the the bank to freeze the accounts.
An affidavit submitted to Kay by a Secret Service agent to gain warrant approval was 37 pages in length. A separate showing of evidence comprised 57 pages, including surveillance photos of ASD’s headquarters building and the entire “Legality Statement” issued by ASD attorney Robert Garner.
Indeed, the U.S. Secret Service was in ASD’s home base of Quincy, Fla., observing the lay of the land before filing the Aug. 1, 2008, affidavits and evidence exhibits.
In a day of notable irony, the Obama administration announced the creation of an Interagency Financial Fraud Task Force led by the Department of Justice. Critical support functions will be provided by the Treasury Department, the Department of Housing and Urban Development and the Securities and Exchange Commission.
One of the first cases the new Task Force may find itself discussing is the alleged Mantria Corp. Ponzi scheme — a scheme in which a video featuring an image of President Obama and recorded remarks by former President Clinton was used in marketing materials by the alleged schemers.
Even as the Task Force announcement was being made, the SEC was announcing that a federal judge had granted a Temporary Restraining Order and asset freeze in the alleged “green” Ponzi operated by Mantria Corp. of Pennsylvania and sold by Speed of Wealth LLC of Colorado.
Within minutes, a video featuring a snapshot of President Obama and recorded remarks by President Clinton at the Clinton Global Initiative (CGI) annual meeting in New York Sept. 25 went missing from Speed of Wealth’s website. Meanwhile, the Mantria website defaulted to a message that read, “We Are Rebuilding this Site to Make it the Most Informational Site Possible. Please check back with us in 10 days.”
Only yesterday the Mantria website showcased a PDF that appeared to have been assembled in part from CGI press materials to spotlight President Clinton’s efforts to improve the world.
The Speed of Wealth video, a marketing prop that dropped the names of famous politicians and international celebrities such as former U.N. Secretary General Kofi Annan and actor Matt Damon, still had been accessible this morning.
That changed quickly after the announcement of the TRO and asset freeze. The SEC announced civil charges against Speed of Wealth and Mantria yesterday. Speed of Wealth’s video highlighted Mantria’s purported devotion to the environment, under the headline “Mantria Honored by President Bill Clinton and Secretary of State Hillary Clinton.”
In the video, Mantria CEO Troy Wragg appeared on the stage next to President Clinton, Secretary of State Clinton and others. CGI had lauded Mantria for helping to “mitigate global warming through the use of its Carbon Fields site, where Mantria will perform trials on their product BioChar, a carbon-negative charcoal, to prove how this product can sequester carbon dioxide, improve soil quality when buried, and reduce emissions in developing countries.â€
Regulators said yesterday that BioChar was part of a $30 million Ponzi fraud.
Despite claims that “Mantria was the world’s leading manufacturer and distributor of biochar and had multiple facilities producing it at a rate of 25 tons per day,†the SEC said, “Mantria has never sold any biochar and has just one facility engaged in testing biochar for possible future commercial production.â€
Others featured in the Speed of Wealth video included President Laurent Gbagbo of the Ivory Coast, Mike Duke, CEO of Wal-Mart and Muhtar Kent, CEO of the Coca-Cola Co.
All of the individuals were among the prominent attendees of President Clinton’s CGI function.
It is not unusual for companies to promote themselves by trying to establish ties to prominent figures. AdSurfDaily, a Florida company accused by the U.S. Secret Service and federal prosecutors of operating a $100 million Ponzi scheme, was featured in promotions that claimed company President Andy Bowdoin had received a special award for business achievement from President George W. Bush.
Prosecutors said the claim was false. What ASD promoters had called an important award from the White House, investigators called a souvenir for donations to the National Republican Congressional Committee.
What was unusual about the Speed of Wealth video is that it shamelessly dropped so many names of well-known people who attended the CGI event, a dignified function hosted by President Clinton that annually draws global political and business leaders.
Some of the snap shots used in assembling the video appeared to have been pulled from media materials on CGI’s website.
Along with showcasing the video cobbled together from one of President Clinton’s signature events, the Speed of Wealth website announced what it described as “the Partnership of the Century!” between itself and Mantria.
Speed of Wealth said money was to be made while itself and Mantria were saving the environment and “helping Middle America secure its financial future!”
Topics covered included:
Why investing in foreclosures today will make you rich and the only way you should be doing it is sitting on the beach in Bermuda while your foreclosure empire grows.
How to build $2,000,000 dollars of wealth with absolutely no money out of your pocket ever.
How to easily receive up to 25% returns on your money annually in an investment that I believe to be safer than a bank CD.
The ASD Business Information Zone (ASD-Biz) forum covers news and opinion on AdSurfDaily, Golden Panda Ad Builder and what the forum describes as “Related Scams.” ASD-Biz has been a central discussion site on the subject of the ASD Members Business Association (ASDMBA).
Some ASD-Biz members have urged Bob Guenther, the de facto head of ASDMBA, to provide straightforward, transparent accounting of how ASDMBA spent money it collected from ASD members to provide legal representation in a bid to gain back money they spent in the ASD and Golden Panda autosurfs.
Among the assertions by ASDMBA’s critics is that members received no value for the money they contributed to ASDMBA. Specific concerns have been raised about Guenther’s leadership and management skills, including his ability to interact with people. Some members said Guenther seems to operate with the presumption that all people who contributed money to ASDMBA were Republican or conservative in their political beliefs, even though ASDMBA never advised contributors when it was collecting money that it had a political agenda.
Guenther pleaded guilty in the 1990s to a felony count of bank fraud — something members said they did not know when they contributed money to ASDMBA. Earlier this year Guenther was charged with two felony counts in Arizona for allegedly ignoring a court order not to harass a company with which he has a dispute.
Guenther initially said police had obtained evidence against him unlawfully. He now says the case will be settled.
Guenther has used the ASD-Biz forum to respond to his critics. Overnight he came out firing — but not before acknowledging ASDMBA engaged in intimidation tactics to retrieve money for members of the ASD and Golden Panda autosurfs.
“Vigilanteism, is that what you call intimidating a THIEF to give back money he stole from a disabled veteran,” Guenther said. “Is that what YOU call intimidating a thief like Busby to reimburse over $50,000 to a group of active and retired police officers, is that what you call to convince a young pretty scam artist to refund $4000 she stole from a Dallas executive[?]
“You call it what you want, I call it street justice,” Guenther said.
He then brought politics into the discussion, using street language. “Ill take my chances and if it bothers you, stay right where all you left wing liberal no balled people like to sit, on the sidelines.”
Earlier Guenther had cautioned an ASD-Biz poster to “Put up or shut up, you ignorant mouthy broad.”
His comments in which he acknowledged using intimidation tactics to retrieve money came in response to a link to a March news release from the FBI about allegations of attempted extortion against a California man. The agency said the man had “attemped to extort monies” to recover funds in the alleged EIMT Ponzi scheme.
Agents described the case against Michael David Sanders as a “shake-down scheme.” As the investigation proceeded, Sanders and three others who allegedly assisted him in recovering the money by posing as federal agents were charged with serious crimes.
No one asserts that Guenther posed as a federal agent in bids to recover money from the Golden Panda and ASD schemes. But ASDMBA’s website urged visitors to make an ASD member’s life “miserable until he refunds Mr. Smith’s $2,000.00 dollars.” The site published the phone number, postal address and email address of Dan Trost, Smith’s purported ASD sponsor.
“Call, email and write this man until he gives Bill Smith, Jr. his $2,000.00,” ASDMBA’s website urged.
ASDMBA members say Guenther frequently uses coarse language and engages in threatening, menacing conduct.
Guenther said the effort to get back money for Smith, a disabled veteran, was successful. ASDMBA’s website lists the effort to gain back the money as a “Testimonial” to the group’s effectiveness.
ASDMBA, however, has no license to engage in the collection of purported debts, and efforts to collect money on behalf of members occurred while a federal investigation into the business affairs of ASD and Golden Panda was under way.
Guether said the group retrieved funds for retired and active-duty police officers in Texas and California, and for a “high profile Dallas Cowboy” executive.
More than $14 million was seized from Golden Panda last year by the U.S. Secret Service in a wire-fraud, money-laundering, securities and Ponzi scheme probe. More than $65.8 million was seized from ASD, all of it in accounts maintained by ASD President Andy Bowdoin.
In recent days, Guenther has discouraged ASD victims from going through a government program to receive restitution from the alleged fraud, suggesting he has a way that cuts through government red tape.
It what may become an embarrassment to President Obama, Former President Clinton and Secretary of State Hillary Clinton, a man the SEC now says was operating a $30 million Ponzi scheme appeared alongside President Clinton at the 5th Annual Meeting of the Clinton Global Initiative (CGI) in New York Sept. 25.
Obama’s name and the names of both Clintons were dropped in a video on the website of Speed of Wealth LLC, a Colorado company accused today of promoting the scheme for Mantria Corp. of Pennsylvania. Other names dropped on the site included former U.N. Secretary General Kofi Annan, President Laurent Gbagbo of the Ivory Coast, Mike Duke, CEO of Wal-Mart, Muhtar Kent, CEO of the Coca-Cola Co. and actor Matt Damon.
All of the individuals were among the prominent attendees of President Clinton’s CGI function.
There are no assertions that any of the politicians, prominent business executives or celebrities who attended the CGI event had any knowledge of the alleged scheme. But Troy Wragg, CEO of Mantria Corp., one of the companies accused in the scheme, appeared next to President Clinton and Secretary of State Clinton on the stage in New York.
The Speed of Wealth video featured snap shots of famous people who attended the CGI event. It concluded with Bill Clinton’s remarks recorded on video, with Wragg, other attendees and the Clintons in a group pose.
Speed of Wealth was a sales outlet for the Mantria scheme, the SEC charged today.
Screen shot: Troy Wragg, whom the SEC said today was a manager at a janitorial company before becoming CEO of Mantria Corp., next to President Clinton at the annual meeting of the Clinton Global Initiative in New York on Sept. 25.
Mantria Corp.’s 28-year-old chairman and CEO, Troy Wragg, whom the SEC said was “employed as a manager for a small janitorial services company” prior to getting into the Ponzi business, was prominently featured in a video on Speed of Wealth’s Website.
In the video, Wragg is standing next to President Clinton, who had acknowledged Mantria for its environmental commitment at the CGI event Sept. 25.
Mantria even got a mention in a CGI news release after committing “to help mitigate global warming through the use of its Carbon Fields site, where Mantria will perform trials on their product BioChar, a carbon-negative charcoal, to prove how this product can sequester carbon dioxide, improve soil quality when buried, and reduce emissions in developing countries.”
Today in Denver, however, the SEC said BioChar was part of the alleged Ponzi scheme, which may involve $30 million or more.
Despite claims that “Mantria was the world’s leading manufacturer and distributor of biochar and had multiple facilities producing it at a rate of 25 tons per day,” the SEC said, “Mantria has never sold any biochar and has just one facility engaged in testing biochar for possible future commercial production.”
One SEC official said there was little “green” about the firm, except perhaps for its love of money.
“These promoters fraudulently exaggerated Mantria’s green initiatives and used high-pressure tactics to convince investors to chase the promise of lucrative returns,” said Don Hoerl, director of the SEC’s Denver Regional Office. “In reality, the only green these promoters seemed interested in was investors’ money.”
Charged today were Speed of Wealth and two of its executives: Wayde McKelvy of Sunny Isle Beach, Fla., and Donna McKelvy, of Parker, Colo.
Also charged were Mantria and two of its executives: Wragg, who lives in Philadelphia, and Amanda Knorr, also of Philadelphia.
Wayde and Donna McKelvy previously were married, and “particularly targeted elderly investors or those approaching retirement age to finance such ‘green’ initiatives,” the SEC said.
Mantria was a “supposed ‘carbon negative’ housing community in rural Tennessee,” the SEC said.
But the “green” representations “were laced with bogus claims, and investors were falsely promised enormous returns on their investments ranging from 17 percent to ‘hundreds of percent’ annually,” the SEC said.
The agency charged that “Mantria’s environmental initiatives have not generated any significant cash, and any returns paid to investors have been funded almost exclusively from other investors’ contributions.”
UPDATED 12:29 P.M. EDT (U.S.A.) A default notice to real estate and more than $65.8 million seized from the bank accounts of ASD President Andy Bowdoin has been docketed in U.S. District Court for the District of Columbia.
A clerk entered the notice this morning in response to an affidavit from the prosecution last week. The notice is dated Nov. 13. Today’s filing means the government is one step closer to perfecting title to the property and money, which were seized in an August 2008 forfeiture complaint.
“[I]t is this 13th day of November, 2009, declared that the defendants . . . are in default,” the clerk’s notice reads.
Judge Rosemary Collyer will have to issue a formal order of forfeiture for the government to exercise permanent control of the assets. The timeline for such an order is unclear, but prosecutors say the time for filing claims has expired.
Last week, Collyer rejected a bid Bowdoin launched in February to reassert claims to the money. She also has rejected dozens of bids by pro se litigants to gain standing in the case, including a denial of 13 motions on a single day last week.
In August, pro se motions to gain standing in the case — all of them featuring a legal template shared by members of ASD — began to flood the courthouse. Collyer rejected the arguments of each of the prospective litigants.
Some things have happened here in the past 24 hours that deserve their own post and discussion thread.
EXTREMELY NOTEWORTHY
Poster “Tony H,” a longtime, thoughtful contributor, observed there could be more than one reason why some ASD members appear to be trying to discourage other members from filling out the government information form and claim form that will follow.
“Perhaps the reason some ponzi promoters have been advising the flock not to file a claim is because the ponzi supporters have filed multiple claims themselves,” Tony said.
Tony’s post struck us instantly as worthy of a wide-ranging discussion. Previously we noted that various bids to discourage ASD members from filing claims and cooperating with investigators smacked of a conspiracy to obstruct justice. We still believe that to be true.
But, as Tony pointed out, the shenanigans may not begin and end there. If he is correct, one possible reason some ASD members are discouraging others from filing claims is to create a condition under which they can maximize their shares of the restitution pool at the expense of victims, thus fleecing them twice.
If fewer people file claims, the pro rata shares of refunds from the government program would be higher. Beyond that, if an upline sponsor is discouraging downline members from filing individual claims by casting the government as evil, it could set the stage for all kinds of shenanigans.
Upline sponsors could gain disproportionate shares of the restitution pool because “Mom” and “Pop” in the downline — the real victims — became fearful of filing a claim.
Upline sponsors could be trying for reasons of self-interest to plant the seed that the sponsor has a duty to file a claim for the entire downline. Are some upline sponsors employing tactics of deceit, perhaps by saying things such as, “Don’t worry; I’ll fill out the form for you” or “Filling out the form only will get you in trouble” or “My downline members all agree that I’ll file the only claim and distribute refunds to members when I get the money from the government?”
The rules suggest each ASD member is/will be required to file an individual claim through a process in forfeiture cases known as “remission.” Upline sponsors appear to have no authority to file claims for downline members.
Because it is known that some downline members paid upline sponsors directly for “ad-packs” — as opposed to paying ASD itself for “ad-packs” — is is possible that some sponsors may try to manipulate members into not filing claims in a bid to keep the heat off the sponsors. Such direct sales by sponsors could affect a downline member’s standing in the case if the downline member cannot produce documentation that the purchase was made directly from ASD.
This is troubling. As poster “dirty_bird” has noted, such devious upline tricks have been pulled in other dying Ponzi schemes — and ASD is known to have a good number of professional Ponzi promoters in the organization.
We encourage readers to share their thoughts on this issue.
NOTEWORTHY
ASD mainstay Bob Guenther, de facto head of the ASD Members Business Association (ASDMBA), once again rattled the china when he bulled his way into a thread here.
In one thread, Guenther said the government was capturing “personal information” from people who called the new Justice Department hotline for ASD or visited the website prosecutors set up for ASD victims.
“So because the US Government sets up a hotline and a website, both of which will capture YOUR personal information, people think they will see a refund,” Guenther said.
We wondered if it had not occurred to Guenther that victims in criminal cases all have to make a showing to receive justice. It’s one of the reasons rape cases often are particularly difficult to prosecute and why prosecutors set up information/support networks to aid victims through horribly painful ordeals.
At the same time, we wondered why Guenther — who implies he can help ASD members get refunds faster than the government — suggested the government hotline was nefarious, that people should avoid it because of all the purported capturing of personal information.
Perhaps the answer to that question can be found in yet another thread into which Guenther plowed. He reminded our readers that ASDMBA used “pressure” to gain a refund for an ASD member.
“Let’s just say a little pressure was applied in the right places,” he said. Guenther was describing a case in which ASDMBA encouraged website visitors to “make Dan Trost’s life miserable until he refunds Mr. Smith’s $2,000.00 dollars.”
For good measure, the ASDMBA website provided Trost’s postal address, email address and phone number, along with these instructions:
“Call, email and write this man until he gives Bill Smith, Jr. his $2,000.00,” the ASDMBA website instructed, on a page marked “Testimonials.”
A poster, “Arnet,” pointed out that there seems to be a disparity between the amount ($93.5 million) the U.S. Secret Service listed as seized in the ASD case and the amount ($65.8 million) federal prosecutors said was seized from ASD President Andy’s Bowdoin’s bank accounts.
Arnet noted the disparity is $27.7 million.
We noted that Golden Panda also is part of the ASD case, and the total seizure listed from Golden Panda/ASD combined was $79.88 million. This takes the seeming disparity down to $13.62 million.
But we also pointed out that perhaps no disparity exists because of reconciliations that occurred after the seizure. Some banks might have stopped payment on seized checks that had been deposited, for example.
It’s also possible that no disparity exists because the ASD case is proceeding on two separate tracks — civil and criminal — and that the $93.5 million figure reported by the Secret Service reflects what is publicly known about the forfeiture case ($79.88 million) and an additional amount that is filed under seal in a criminal matter.
It could be that $13.62 million — the difference between the amount published in the forfeiture case ($79.88 million) and the total seizure amount published by the Secret Service ($93.5 million) — is being held in a separate account in a case under seal.
As we pointed out, we’re not sure precisely what accounts for the seeming disparity of $13.62 million. We believe it a virtual certainty, however, that no disparity actually exists.
We believe the government will explain this issue in detail at an appropriate time. The investigation still is in progress. It’s important to remember it also involves the LaFuenteDinero autosurf, and that information concerning how LaFuenteDinero managed its operations and finances is particularly sketchy.
