An attorney accused of racketeering in a lawsuit by members of AdSurfDaily and accused by prosecutors of shilling for ASD President Andy Bowdoin once advertised his services in “Escape From America Magazine.”
The magazine is part of a website known as EscapeArtist.com.
Robert F. Garner identified himself a “[f]ormer General Counsel for major Miami-based securities firm with Latin and South American focus,” according to his ad. He listed the URL for his law office in Greensboro, North Carolina, saying he also specialized in “[r]ecoveries from scam.”
Garner is licensed to practice law in North Carolina. But web records show he has not informed the North Carolina bar this year whether he is in private practice or carries malpractice insurance — two things he is required to do.
“Each active member of the North Carolina State Bar is required to advise the State Bar annually whether he or she is engaged in private practice and whether he or she is covered by legal malpractice insurance,” the bar says on its website. Garner’s entries for 2009 are listed “no response.”
Garner’s magazine ad ran in Vol. 5, Issue 11, of Escape From America. It was published in November 2003, alongside ads for tax havens, financial, telephone and real estate services for expatriates, and pitches for people to move to Belize and elsewhere.
“YOUR OWN OFFSHORE BANK ACCOUNT IS WAITING FOR YOU,” promised one of the ads in the publication.
In December, federal prosecutors filed a second forfeiture complaint against assets tied to ASD, including a home and personal property acquired by Bowdoin family members.
Bowdoin’s wife, Edna Faye Bowdoin, and her son, George Harris, used ASD money to open an account in a separate bank. Harris used $157,216 of the opening deposit to pay off the mortgage on the Tallahassee home he shared with his wife, prosecutors said.
Garner shilled for Andy Bowdoin in an ASD video, prosecutors said.
“ASD actually [employed] Garner to participate in a marketing video that ASD crafted to reassure hesitant prospects of ASD’s lawfulness, not for his expertise in ensuring ASD’s compliance with applicable laws,†prosecutors said.
“Messrs. Bowdoin and Garner said that ASD’s operations had been reviewed carefully by a team of legal experts to ensure compliance with all applicable laws,†prosecutors said.
“Messrs. Bowdoin and Garner knew the representations made in the video were material to prospective participants, made-up, and false,†prosecutors said. “The misrepresentations led to a significant expansion of investment in ASD and related auto-surf investment programs.â€
In fact, prosecutors said, ASD didn’t hire compliance attorneys during the first 20 months of its existence, waiting until after it started to collect enormous sums at rallies last year to address compliance with federal securities laws and other laws.
A RICO complaint brought against Bowdoin, Garner and Golden Panda Ad Builder President Clarence Busby in January accuses the men of organized efforts to defraud. The lawsuit was filed by Mike Collins of Savage, Minn.; Frank Greene of Washington, D.C.; and Natures Discount of Aventura, Fla.
The complaint alleged the men were involved in “other†schemes beyond ASD, Golden Panda and LaFuenteDinero, and have “committed or aided and abetted in the commission of countless acts of racketeering activity,†including indictable offenses.
“The ASD Enterprise provides the RICO Defendants and other unnamed co-conspirators with a system by which to operate fraudulent schemes such as ASD, to hide the fraudulent nature of the schemes, and to profit from such schemes,†the plaintiffs alleged. “Each RICO Defendant agreed to perform services of a kind which facilitated the operation of the ASD Enterprise and facilitated the RICO Defendants and others in the operation of various fraudulent schemes, including ASD.â€
One entity associated with ASD — a surf known as AdViewGlobal — lists former ASD executive Gary Talbert as its chief executive officer. Chuck Osmin, a former ASD customer-service representative who said he expected to earn $2,000 a day from ASD, also now works for AVG.
Meanwhile, AVG lists George Harris as a trustee. AVG has turned to a firm known as Pro Advocate Group for advice on becoming a private members’ association. Pro Advocate Group is associated with Karl Dahlstom. In 1997, Dahlstrom was sentenced to 78 months in federal prison for his participation in a securities scheme.
An attorney named Robert F. Garner — with ties to Florida and North Carolina –Â is referenced in documents published by the U.S. Senate pertaining to a 2001 investigation into international money-laundering.
UPDATEÂ 9:16 P.M. EST (U.S.A.) The indictment against Karl Dahlstrom is available in PDF format at the bottom of this post.
Here, below, our earlier post . . .
In a desperate bid to hide itself underground after its management structure was exposed, the controversial autosurf AdViewGlobal has formed a private association and is taking advice from an entity known as “Pro Advocate Group.”
Pro Advocate Group is associated with Karl Dahlstrom. In 1997, Dahlstrom was sentenced to 78 months in federal prison for his participation in a securities scheme.
Dahlstrom and others “were indicted for their involvement in a nationwide solicitation campaign for the purpose of selling unregistered shares” of Inferno Snuffers Inc. (ISI), and Inferno Engineering and Consulting Inc. (IEC), the SEC said.
AdSurfDaily, under fire for selling unregistered securities amid allegations of wire fraud, money-laundering and running a $100 million Ponzi scheme, is led by Andy Bowdoin, himself a convicted felon from a 1990s securities scheme. Prosecutors seized part of ASD’s assets in an August forfeiture complaint.
George Harris, Bowdoin’s stepson, is listed as a trustee for AVG. In December, about a week after AVG started being talked about in online forums, federal prosecutors seized additional assets linked to ASD, filing a second forfeiture complaint. Among the assets seized was a Tallahassee home owned by George Harris and his wife, Judy Harris.
Under Dahlstrom’s direction, the SEC said, ISI and IEC “were marketing ‘Uni-Snuff,’ a product claimed to be useful in extinguishing and suppressing fires, and the ‘Snuffer System,’ a method of dispensing Uni-Snuff.”
The website for Pro Advocate Group lists “Clara Dahlstrom” as the administrator. Clara Dahlstrom is Karl Dahlstrom’s wife. In court documents in a tax case, Karl Dahlstrom is described as having “been in the abusive trust business for many years.”
AVG announced its association with Pro Advocate Group in a members’ conference call earlier this week. A Mod at the Pro-AdSurfDaily “Surf’s Up” forum introduced listeners to Gary Talbert, a former ASD executive now listed as the chief executive officer of AVG.
Talbert, in turn, introduced listeners to Pro Advocate Group and a man identified as “Carl,” who delivered remarks.
“He discussed why AVG decided to establish a 1st and 14th Amendment Private Membership Association,†a source said.
Like ASD, Pro Advocates Group uses religion in its sales pitch.
“We are proud of our Christian moral values and feel that we stand alone in a sea full of Master Deceivers in the world of Asset Protection,” the group says on its website. “Let us help you find the proper legal solution for your problem and peace of mind. We are founded upon legal principles that are backed by book, chapter and verse of legal rulings, regulations and Supreme Court interpretation of the U.S. Constitution. We teach and support the inherent rights of DUE PROCESS and EQUAL PROTECTION under the law.”
Read the indictment against Karl Dahlstrom, Karla Dahlstrom (his daughter), Hubert Leopard and Richard Lopez. Some of the allegations read like the allegations against ASD.
Karl Dahlstrom was accused of using investors' funds to purchase new vehicles and pitching the opportunity to church groups.
Earlier this week we reported on the failure of Premium Ads Club (PAC). Now a surf with close ties to PAC is in its death spiral. Aggero Investment says tomorrow will be its last day, absent a miracle that will prevent a run on the bank as investors race to collect returns advertised at 60 percent a month, on top of bonus returns.
Like PAC, Aggero Investment collected money right up to the bitter end, assuring investors that things were just fine and that external investments paying astronomical returns made Aggero Investment’s merely collossal returns possible.
Aggero Investment relied on some of the same promoters as AdSurfDaily (ASD), the Quincy, Fla,-based autosurf that had nearly $100 million in assets seized by the U.S. Secret Service in August amid allegations of money-laundering, wire fraud and running a Ponzi scheme.
ASD had more than $250 million in unfunded liabilities at the time of seizure, prosecutors said. ASD, however, tried to tell a federal judge that it had no liabilities because rebates weren’t guaranteed.
The judge didn’t buy it.
The usual script is in play on the Ponzi boards in the wake of the Aggero Investment collapse. Some posters are angry and bitter. Others are urging calm, advising participants not to file claims through SolidTrustPay, a Canadian payment processor fond of surf fees, because claims could make it harder on everybody. Still others are hoping Aggero Investment will slash payouts to something more “reasonable,” suggesting that 30 percent — what ASD paid monthly — might be the ticket.
Yet others are referring to the electronic Ponzi-scheme business as an “industry,” positioning themselves as experts and the voices of reason. Serial promoters in the “industry” all have exposure — both to civil and criminal litigation — and routinely spin surf failures as nothing to get all worked up about.
It has been a bad week for surfs. AdViewGlobal (AVG), which has management in common with ASD, desperately is trying to get undergound. Its new gambit is to form a private asssociation and dispatch shills to rail against the government in a bid to make its exposure go away and deflect from the central issues of the autosurf prosecutions: the sale of unregistered securities by wire in a Ponzi environment.
The Pro-ASD Surf’s Up forum, which also is shilling for AVG, can’t delete posts that shed light on this soulless business fast enough these days. Some Surf’s Up members were electrified this week when ASD members used a litigation template by Curtis Richmond to file motions to intervene in the ASD case.
Richmond and his co-litigants are accusing the judge and prosecutors in the ASD case of crimes, and its music to the ears of the Surf’s Up crackpots. Never mind that Richmond is associated with a sham Utah Indian tribe that was sued successfully under federal racketeering statutes for nuisancing federal judges with vexatious litigation.
And never mind that Richmond has a conviction for criminal contempt of court for threatening federal judges, has been banned from the practice of law in Colorado despite the fact he’s not an attorney, and describes himself in court documents as a “Sovereign” who answers only to Jesus Christ and enjoys diplomatic immunity from prosecution.
His theory of diplomatic immunity didn’t play well with a federal judge who ordered Richmond and other members of the sham tribe to pay nearly $110,000 in damages and costs to victims of their litigation schemes. And it didn’t play well with another federal judge who found Richmond gulity of criminal contempt of court and sentenced him to six months of home confinement with electronic monitoring and five years’ probation.
This week has featured the collapse of Aggero Investment and Premium Ads Club, and a renewed commitment by AVG and Surf’s Up to take the absurdity to new levels — on the heels of a bonus program to get new money into the AVG system, of course.
UPDATED 12:56 A.M. EST (Feb. 28, U.S.A.) Documents filed by federal prosecutors in the AdSurfDaily case pointedly refer to Andy Bowdoin’s wife as “Edna Faye Bowdoin.”
But other documents on file with the Florida Department of State refer to her as “Faye S. Bowdoin.” Other documents in the Florida Department of State and elsewhere in Florida refer to her as “Faye S. Harris.”
“Harris” is the last name of a man to whom she once was married and also the name of her son, George Harris III.
Adding to the mystery is the building in Quincy, Fla., that once was home to “Faye’s Florist” and later became home to AdSurfDaily. Documents from 1996 list the shop’s address address as 11 S. Calhoun Street, Quincy, Fla. 32351.
AdSurfDaily, however, listed its address as 13 S. Calhoun Street, even though it was in the same building once occupied by Faye’s Florist. Adding yet another layer of mystery is that Faye S. Bowdoin is listed in state records as the sole board member of Bowdoin Harris/Enterprises Inc., which became a corporation in Florida in June 2008, about two months before the seizure of ASD’s assets.
Like ASD, Bowdoin/Harris Enterprises used the 13. S. Calhoun address — but 12 years earlier, Faye S. Harris listed the corporate address for “Faye’s Florist” as 11 S. Calhoun Street.
Federal prosecutors said the 13 S. Calhoun Street address listed for ASD was bogus. In December, prosecutors filed a second forfeiture complaint against assets linked to ASD, including property purchased by Bowdoin/Harris Enterprises using ASD money.
Adding yet another layer of mystery is a name that appears on documents Faye’s Florist filed with the state in 1996. The name “Thomas, Andrew” of 7. West Washington St., Suite 4, Quincy, Fla. 32351, appears as the name of the registered agent for Faye’s Florist.
Andy Bowdoin’s given name is Thomas Anderson Bowdoin Jr. ASD members knew him as “Andy.” The appearance of the name “Thomas, Andrew” — with the last name first, meaning the actual name is “Andrew Thomas” — on the 1996 documents from Faye’s Florist suggests that Andy Bowdoin could be “Andrew Thomas.”
That is not for certain, of course. What is for certain, however, is that law enforcement would find such a name on a document entirely too coincidental not to investigate thoroughly.
There has to be a reason why both ASD and Bowdoin/Harris Enterprises used a nonexistent address — 13 S. Calhoun St. — in public records. And unless Edna Faye Bowdoin and Faye S. Bowdoin are two separate people, there has to be a reason why Mrs. Bowdoin is using two separate names and two addresses for the same building.
Prosecutors said that Bowdoin/Harris Enterprises was a bid by Andy Bowdoin and Edna Faye Bowdoin to hide assets. What’s unclear, however, was what motivated the need to hide assets.
If “Andy Bowdoin” is the “Andrew Thomas” listed in the 1996 documents for Faye’s Florist, however, it suggests an elaborate attempt to hide assets dating back at least 12 years. The document just as easily could have carried the name “Thomas Anderson Bowdoin” Jr. if Andy Bowdoin and Andrew Thomas are one in the same.
The question is why did it not if they are one in the same.
Andy Bowdoin was charged with defrauding customers in an Alabama securities scheme in the 1990s, and was still making incremental payments to victims even as ASD was generating tens of millions of dollars last year.
At the time of the August seizure, he still owed the victims about $45,000. Just a few days prior to the seizure Bowdoin paid nearly $50,000 for a new Lincoln. A month later he sent his Alabama victims a check for $100.
Edna Faye Bowdoin’s son, George Harris, is listed as the registered agent for Bowdoin/Harris Enterprises. Prosecutors said he and his mother used nearly $180,000 in ASD funds from Bank of America to open an account at Capital City Bank on June 10, 2008, just days after Bowdoin/Harris Enterprises was formed.
On June 23, 2008, George Harris used $157,216 of the money in the new account to pay off the mortgage on the Tallahasse home he shared with his wife, Judy Harris, prosecutors said.
Here, below, some screen shots of documents:
1.
Corporate filing from 1996 showing address of Faye's Florist as 11 S. Calhoun Street.
2.
Signature of Faye S. Harris in 1996 filing for Faye's Florist.
3.
Document signed Faye S. Bowdoin in 2008 corporate filing for Bowdoin/Harris Enterprises that shows the address as 13 S. Calhoun Street. When Faye's Florist was open, it used 11 S. Calhoun Street as its address.
4.
Document from June 2008 showing George Harris as registered agent for Bowdoin/Harris Enterprises.
5.
Andy Bowdoin lists 13 S. Calhoun as ASD's address in 2008 filing with Florida Department of State.
Using the Curtis Richmond litigation blueprint, two new motions to intervene have been filed in the AdSurfDaily forfeiture case.
The motions were filed by Ronald Breckenfelder of Littleton, Colo., and John R. Moore of Ames, Iowa. The motions accuse U.S. District Judge Rosemary Collyer, U.S. Attorney Jeffrey A Taylor, and Assistant U.S. Attorney William Cowden of committing crimes.
In addition, the motions accuse the judge, the prosecutors and Chief Judge Royce Lamberth of conspiring to deny ASD members justice. Collyer and Lamberth specifically were accused of operating a “Kangaroo Court.”
As was the case in two previous motions to intervene, including a motion filed by Richmond himself, Collyer placed a hand-written note on the cover pages of the motions.
“Let this be filed,” she wrote. Collyer has used the exact same wording on each of four motions to intervene filed in the ASD case in recent weeks.
The documents order Collyer to set aside the ASD forfeiture within 30 days or face criminal or civil prosecution. At the same time, court documents filed with the motions include a list of demands made on prosecutors and Agent Roy Dotson of the U.S. Secret Service to produce “Legal Evidence” within seven days or face legal action.
Richmond is associated with a sham Utah Indian tribe that has been successfully sued under racketeering statutes for bringing vexatious legal proceedings against judges, prosecutors and police officers. He also has been convicted of contempt of court for threatening federal judges.
The tribe is known derisively as the “Arby’s Indians” because it once held a meeting in an Arby’s restaurant in Provo, Utah. A sham “Supreme Court” set up by the tribe used the address of a conference room attached to a doughnut shop in Utah as its chambers.
One prong of the “Indian” strategy is to place enormous judgments against public officials in a bid to extort a litigation result. Recent motions in the ASD case that have used the Richmond blueprint have said an ASD member by the name of Alana Holsted has been prevented from collecting on a $30 million judgment because of conspiratorial actions by the judge and prosecutors.
The Holstead claim appears to seek a total of $120 million in judgments for the alleged offenses of Interference With Commerce and Interference With Interstate Commerce.
Today mostly was a day for thinking, not writing. Maddy the Wonder Puppy accompanied me this morning on a drive to my sister’s house.
Maddy, at 11 months, hasn’t gotten any better in automobiles. She started whining the moment I backed out of the garage. Not even her favorite blankets — a blue one and a tan one — provided her any comfort. Maddy is like Linus when it comes to her tan blanket, which is to say it’s virtually her constant companion.
As it turned out, the journey proved equally unkind to the blankets; I’ll spare you the details, except to say the blankets are clean again.
My sister, brother-in-law and niece fussed over Maddy, and she soon returned to fine form. Then we took care of family errands, including an unplanned errand. By earlier arrangement, dinner was set for 5 p.m., and I had some time to work when we finished our running around. My niece let me use her computer, and I was able to keep track of ASD and other scam developments.
Work normally is a joy, but it just wasn’t to be today. It was hard to concentrate at a foreign computer, especially when I knew Maddy was showing off upstairs. The girl loves spectators, especially when they’re doling out the treats.
But the unplanned side trip to the BIG DRYER at the coin-operated laundry did pay a dividend.
Outside the laundry it struck me that the recent reports of follow-up seizures in the ASD case very well could be true. Such seizures would follow the general outline of the e-Gold prosecution, a money-laundering case, like ASD. Basically the prosecutors are calling home dirty money from autosurfs and HYIPs that used e-Gold. Autosurfs and HYIPs are criminal enterprises, and the prosecutors alleged in the ASD case that ASD President Andy Bowdoin was the head of a criminal enterprise.
As is the case with e-Gold, prosecutors might be calling back dirty ASD money. I haven’t found any paperwork on it yet, but that doesn’t mean paperwork doesn’t exist. It could be slow to enter the system.
It’s funny what occurs to you when you’re standing on a sidewalk outside a coin-operated laundry waiting for a BIG DRYER to refluff a blue blanket and a tan blanket.
One of the things that occurred to me was that some ASD members were actively discouraging other members from filling out the government form. The problem with that, of course, was that it looked like an attempt to obstruct justice. It also occurred to me that some people decided on their own that the government form wasn’t good enough and created their own form, telling people not to use the government form because it was a trick.
And it also occurred to me that some ASD employees and volunteers were getting paid in “ad packs” as opposed to wages, which means the rank-and-file members were shouldering the burden for the compounding and additional deficits Bowdoin created — and further means that money-laundering likely was taking place at multiple points in the banking system.
Meanwhile, it occurred to me that some ASD members were selling “ad packs” for cash and then transferring the value of the “ad packs” by using ASD’s internal system, which means they had the ability to use ASD itself to launder money.
But what occured to me most was that prosecutorial clawbacks COULD BE A SIGN THAT THERE ARE SEALED CRIMINAL INDICTMENTS IN THE ASD CASE.
We feel for the residents of North Salem, N.Y., and the residents of Quincy, Fla. Fate has put them in the media glare. Talk at Westchester County lunch counters is not about how the Mets or Yankees or Red Sox will do this year. It’s about how Paul Greenwood, the town supervisor of North Salem, got arrested for fleecing universities and public-employee pension funds out of perhaps hundreds of millions of dollars.
Meanwhile, in Gadsden County, the talk in Quincy is less about how Florida State will perform on the football field this fall in nearby Tallahassee and more about how Andy Bowdoin was accused of running a $100 million Ponzi scheme.
Dozens of people in Quincy are out of work because of Bowdoin. Some of them weren’t even earning wages. They were being paid with what Bowdoin called “ad packs.” Prosecutors called them unregistered securities.
Greenwood and Bowdoin have embarrassed their communities, putting on a show before their fraud was exposed. Greenwood declined to take a salary for overseeing the town. Bowdoin, for his part, let the local Chamber of Commerce do his bidding — never telling local executives about a previous felony conviction for securities fraud.
Paul Greenwood.
Local merchants were stunned when prosecutors announced Bowdoin was the head of an international wire-fraud and money-laundering operation disguised as an advertising service. He’d secreted away money on the Caribbean island nation of Antigua — now in the news because of Allen Stanford — while at the same time paying $800,000 cash for the old Masonic Hall in town, prosecutors said.
Quincy viewed him as a savior; North Salem viewed Greenwood as a leader. Prosecutors now say he spent up to $80,000 on individual Steiff Teddy bears. Carnegie Mellon University, the University of Pittsburgh, the Iowa Public Employees Retirement System and pension funds in Sacramento and North Dakota now might have to insist that stuffed animals be sold to be made whole.
If “whole” is possible, that is.
Imagine what it’s like to have to rely on the sale of Teddy bears at auction to offset pension-fund losses. Such are the ugly incongruities of the times.
On the Surf’s Up forum, the Mods are saying there are no ties between AdSurfDaily and AdView Global. But information on AVG’s website tells a different story.
George F. Harris is named a trustee of a new group that’s calling itself “AV Global Association.” Harris is the son of Edna Faye Bowdoin, wife of ASD President Andy Bowdoin. Federal prosecutors went to court in December, filing a forfeiture complaint against property obtained with ASD funds by Harris and his mother.
Included was a home in Tallahassee, Fla. The $157,000 mortgage on the property was retired with ASD funds moved from the company’s Bank of America accounts into a separate account established by Harris and his mother, prosecutors said.
ASD funds also were used to purchase a $28,000 Honda CRV for Harris and his wife, Judy Harris, prosecutors said.
Also named in the association document is Gary Talbert, a former executive at ASD. ASD is headquartered in Quincy, Fla., and was accused in August of operating a $100 million Ponzi scheme and selling unregistered securities by masking the company as an advertising service.
Trust Document screen shot.
The association document is reproduced below:
ARTICLES OF ASSOCIATION
OF
AV Global Association
(A Private Membership Association)
ARTICLE I
Declaration of Purpose
1.This Association of members hereby declares that our main objective is to protect our rights to freedom of choice regarding our advertising and marketing information and conduct, through maintaining our Constitutional rights.
2.As members, we affirm our belief that the Constitution of the United States is one of the best documents ever devised by man and the signer of the Declaration of Independence did so out of love for their country. We believe that the First Amendment of the Constitution of the United States of America guarantees our members the rights of free speech, petition, assembly, and the right to gather together for the lawful purpose of advising and helping one another in asserting our rights under the Federal and State Constitutions and Statutes. We strive to maintain and improve the civil rights, constitutional guarantees, freedom of choice in advertising and marketing information and conduct and political freedom of every member and citizen of the United States of America.
3.We declare the basic right of all of our members to select spokesmen from our number who could be expected to give wisest counsel and advice concerning advertising and marketing enterprises and to select from our number those members who are the most skilled to assist and facilitate the actual performance of advertising and marketing enterprises.
4.We proclaim the freedom to choose and perform for ourselves the types of advertising and marketing enterprises.
5.The Association will recognize any person (irrespective of race, color, or religion) who is in accordance with these principles and policies as a member, and will provide a medium through which its individual members may associate for actuating and bringing to fruition the purposes heretofore declared.
ARTICLE II
Name and Status
1.The name of this national membership association shall beAV Global Association, hereinafter referred to as “Association”.The Association is formed under common law and forms no legal entity distinct from that of its members for litigation purposes.
ARTICLE III
Membership and Dues
1.Membership shall be open to any person which or who adheres to the purposes of this Association in Article I.
2.A yearly membership may be offered at ten dollars ($10.00) or more, as determined by the Trustee(s).Additional assessments may be made at any time for services or benefits rendered.Honorary memberships may be offered and recognized until December 31, 2009.
3.This membership does not entitle a member to any interest in the Association or management thereof, and a member will not be liable for any debts, obligations, liabilities, judgments, suits, etc., of the Association.
4.The Trustee(s) shall have the right to sanction a member upon unanimous vote of the Trustee(s), after a hearing of the facts where the member may be present after notification.The sanctions include removal from active membership or imposing any other special and necessary conditions upon any member who shall discredit or bring harm to the Association in any manner.
5.Any disputes or complaints that arise between the members will be settled by the Association’s Dispute Committee Panel.Any controversy or claim arising out of, or relating to, this association or its members will be resolved by an association Dispute Committee Panel of twelve (12) members in good standing randomly appointed from the existing members of the association that are willing and able to serve.A time and location of the hearing will be determined by the Trustee and travel and lodging expenses will be provided by the association for the Panel.All Parties to the hearing will be allowed to introduce any and all evidence, call witnesses and cross-examine witnesses.A two-thirds (2/3) majority of the Panel is required to decide which party is to prevail and the amount of monetary judgment.If a two-thirds (2/3) majority decision cannot be obtained, a new association Dispute Committee Panel may be appointed to decide the case or controversy.
ARTICLE IV
Officers and Duties
1.All officers shall be members of the Association.
2.The officers shall be President, Vice-President and Secretary-Treasury.
3.Officers shall be appointed and removed by the Trustee(s).Officer positions may be vacant for any period of time.The Trustee(s) may serve as Officers.
4.The President, or in his/her absence, the Vice-President, shall preside over all membership meetings of the Association, manage all affairs as an agent and defend all actions for and against the Association and its members.
5.The Vice-President’s duties are the same as the President’s and the Vice-President will serve at the pleasure of the President.
6.Secretary-Treasurer:The Secretary-Treasurer will record and maintain minutes of all meetings and keep all records of the Association.
ARTICLE V
Trustees
1.All Trustee(s) will be members of the Association.
2.The Trustee(s) will assume control and the legal, liable, financial and tax responsibility of the Association as the principal.The Trustee(s) will set the compensation of the Officers, Trustee(s) and any other employees of the Association.The liability of the Association is limited to the assets and property of the Association and does not extend to the Trustee(s) individually.
3.The Trustee(s) may appoint a Special Trustee for the limited purposes of representing the Association in court or other legal proceedings as either plaintiff or defendant. The Trustee(s) may appoint a Special Trustee for the limited purposes of maintaining, preparing and filing all local, state and federal tax returns.
4.The Trustee(s) will have the power and responsibility to select from the membership the member(s) who will perform assistance in educating and administering advertising and marketing information to fellow members in accordance with the Declaration of Purpose and to contract with them for such purpose.The Trustee(s) will not contract for any advertising or marketing that would constitute a clear and present danger of substantive evil.
5.The Trustee(s) will have the power and responsibility to determine levels of membership, levels of membership benefits, what benefits will be offered to all members free of charge and for what benefit and at what amount of cost to the member “special assessment” feeswill be levied.
6.All official decisions and actions of the Association will be upon majority consent of the Trustee(s), memorialized by minutes.
7.The original Trustee of the Association will be:First Trustee, Gary D. Talbert.
8.The Successor Trustee of the Association will be George F. Harris.
9.In the event of death of the First Trustee or should he become mentally or legally incapacitated and unable to perform her duties, the Successor Trustee shall assume the position of First Trustee.The First Trustee hereby authorizes any and all successor trustee(s) to this “Association” access to the association information and conduct concerning the First Trustee for the evaluation of mental or legal incapacity of the First Trustee at any time.
10.Provided, however, that a Trustee may be removed by the Protector of this association when the Trustee has been guilty of mismanagement, fraud, malfeasance or any other overt acts that do not work in the best interest of the association and its members.The guilt of the Trustee is to be determined by the sole discretion of the Protector.The Protector shall have the sole authority to appoint a replacement Trustee in any event other than himself or herself who will remain as Trustee unless replaced by the Protector or a vote of the membership according to these Articles of Association.The Protector of this Association is Nate Boyd.In the event of death of Nate Boyd, Protector, the Successor Protector will be George Harris.
11.When the Association membership achieves one million (1,000,000) members, they will have the power to replace with a member of their own choice the Trustee and his successors upon two thirds (2/3) majority vote.
ARTICLE VI
By-Laws
1.By-laws may be adopted by the Association for the purpose of carrying out the Association’s Declaration of Purpose. The Board of Trustee(s) may promulgate and adopt by-laws by unanimous consent which will have the same force and effect as the Articles of the Association provided that said by-laws do not contravene the Articles of Association and provided that said by-laws may be repealed by two-thirds (2/3) majority vote of the members.
ARTICLE VII
Amendments
1.The Articles of Association may be amended upon unanimous consent of the Trustee(s).The amendments will be submitted to the members for their ratification.If the Association achieves ratification by three-fourths (3/4) of the members, that existed at the time the amendment was first submitted, within one year of passing the amendment, the amendment will become a part of the Articles of Association and be binding upon all the members.
ARTICLE VIII
Dissolution
1.The Association will terminate upon the death of the last remaining member or upon unanimous decision of the Trustee(s).All assets and liabilities will then revert to the trustee(s) at the time of dissolution.
ARTICLE IX
Construction and Interpretation of These Articles
1.Any reference in these Articles to the masculine also includes the feminine when appropriate and any reference in these Articles to the singular also includes the plural when appropriate.
2.This Association will be construed and interpreted under the laws of the State of Florida, U.S. Constitution and the Florida Constitution.
Editor’s Note: At the time of publication, this document was published at:
An autosurf known as “Premium Ads Club” has tanked. A poster at the ASA Monitor forum said he invested money for his child’s chemotherapy treatment in it.
Premium Ads Club advertised a payout of 135 percent over 15 days. Members said the surf was collecting money as late as this weekend and had just come off a series of 15 percent bonus promotions.
Other surfs in bonus mode now include AdViewGlobal and BizAdSplash, both of which surfaced in the weeks following the government seizure of nearly $100 million from AdSurfDaily Inc. amid allegations of selling unregistered securities and running a Ponzi scheme.
Email To Members
Members say they received this email (below) from the surf, which used SolidTrustPay, the same processor to which ASD was transferring money last summer prior to the seizure. Incredibly, the surf said it collected money from 500 members in the past four days to try to make the Ponzi go away.
The Ponzi did not go away, of course. Premium Ads Club also said it was not blaming anybody, but then proceeded to blame the members for panicking and bringing down operations.
We have not edited this note, except to add italics:
We are truely sad and sorry to send this…
Dear Members,
It is with really heavy hearts that we send this update to you. We are truly sorry and sad to inform you that PAC is officially closed as of now.
The Deposits have been disabled.
There are a few events that have led to this untimely event.
Our Cashflow got seriously affected from when we implemented the PinCode and the recent site accessibility issues.
Sadly members chose to go into Panic mode and stop despositing into PAC. Withdrawals took a huge upswing and in the past 7-9 days and we have had to use up our reserve to supplement payouts to the tune of 10-15K daily. We will need at least another 30K (as of now) to meet today’s payouts.
We have been upfront with you that while we have a business plan, we would still be dependent on member spends to make payouts and would have been at least for 6-9 months minimum.
We also have had 2 of our Private Programs being under investigation so, some of our funds are frozen there.
We hoped by using up our reserve fund, the situation could be turned around. With over 500 new members in the last 4 days, we were almost sure PAC would come through. Unfortunately it hasn’t happened and we are forced to make this decision.
It is not all over. We are still going ahead with the IBC and will continue to do business.
We have a long term investment that will start paying a steady income in some months.
How will this affect you? We are conducting an audit and all members who are not in profit will be refunded. We will do right by you all.
We will begin by refunding AP and LR as soon as the audit is over, because we have those funds.
STP and SP are running on a huge deficit and it will take some time.
We truly understand how disappointing this is and there are just no words for us to express how disappointed we are too.
AggeroInvestment and Scotia Ads are unaffected and will continue to run as normal.
However, we feel that it is best that Roger takes over the day to day operations of AI and he has agreed.
We ask for your understanding and hope that you will trust that we had not forseen that simple technical matters would undo the hard work we all put in together.
We are not blaming anyone.
It is just a sad fact that needs to be pointed out.
We had the very best of intentions and were unable to fulfil them. There are no words to tell you how truly sorry we are.
Hats off to Houston Chronicle writer Loren Steffy, who explained economically why cons work.
A con, Steffy explained, works because the con weaves “a tapestry of believable lies.” It’s a pointed, short, highly memorable line that deserves special mention because it puts readers “right there.”
Steffy detailed some of disgraced financier Allen Stanford’s lies in this column. Lots of things in the column reminded us of the Andy Bowdoin case. Bowdoin is the head of AdSurfDaily Inc., a Quincy, Fla.-based company accused of operating a $100 million Ponzi scheme.
Here are some Stanford/Bowdoin parallels:
Friends in high places. Stanford went around saying he’d been knighted by Prince Phillip. Bowdoin went on a tour to showcase a special award he’d received for business acumen from President Bush. It turned out that Buckingham Palace called Stanford on his lie; in fact, he’d been given the title of “Sir” by the prime minister of Antigua, a Caribbean Island nation of 85,000 known for lax banking standards and money-laundering.
In Bowdoin’s case, the U.S. Secret Service called Bowdoin on his friends-in-high-places lie. It turned out that the award he received was an award for writing checks to the National Republican Congressional Committee. Basically, Bowdoin wrote a check for banquet tickets and called it a special honor from the President of the United States. Bowdoin, by the way, had more than $1 million on deposit in Antigua. The Sunday Times reports today that $8 billion is missing from Stanford’s bank and that regulators suspect a Ponzi scheme.
Charities and sports. Stanford “sold” clients on his benevolence. So did Bowdoin, who once gifted 100,000 ASD “ad packs” to a charity. Stanford was big on sports sponsorships. Bowdoin told his faithful that ASD soon would become a sponsor for professional auto racing. Members claimed ASD would have a car in the Indy 500.
Holes in the resume: Stanford claimed to be related to the founders of Stanford University. The school exposed the lie and sued him for trademark infringement. Bowdoin claimed to have operated a string of highly successful businesses. Turned out that one of his highly successful enterprises was at the center of a securities-fraud investigation in Alabama and that Bowdoin and co-scammers had fleeced investors out of hundreds of thousands of dollars. He pleaded guilty to a felony, was sentenced to a year in prison, but the sentence was suspended when he agreed to make restitution.
In August 2008, he still owed the Alabama victims $45,000. Just a month before, he paid $50,000 for a new Lincoln. In June, ASD cash was used to retire the $157,000 mortgage of his wife’s son and daughter-in-law, and about $28,000 was used to buy them a new car. At the time, Bowdoin owed his ex-wife more than $162,000.
Nothing out of the ordinary. As Stanford’s empire was collapsing, he told investors that the SEC investigation they were reading about in the newspaper was a “routine” look into the business. He also said he was cooperating fully, which the SEC said was a lie when it later alleged a multibillion-dollar, international fraud scheme.
Bowdoin told members that his business had been approved by regulators and was perfectly compliant. It turned out that ASD didn’t even have a compliance attorney and knew in 2007 — months before it started gathering tens of millions of dollars from members at company “rallies” — that the business was illegal. In the hours after the August seizure of ASD’s assets by the government, people with close ties to Bowdoin sought to assure members that the matter was a temporary blip that would be settled within days.
For good measure, Bowdoin later told ASD members that Ponzi allegations against ASD hand been dropped in Florida. People flooded forums to share the good news — except it wasn’t true. As recently as last week, some ASD members continued to make the claim that Ponzi allegations had been dropped, despite the fact that the office of Florida Attorney General Bill McCollum specifically refuted the claim months ago.
By coincidence the words appear in the 13th paragraph of a Chicago Tribune story invoking investors’ sustained lack of luck and reporting on a new series of Ponzi schemes the U.S. Commodity Futures Trading Commission is investigating.
The words were spoken by Gregory Mocek, former CFTC enforcement director, and are the most important words spoken to date during the financial meltdown. They should be the new “Shot heard ’round the world.”
Ponzi schemes involving foreign currency trading have been so rampant they could “eat up all of the commission’s investigation and litigation resources, and there will be nothing left to protect the integrity of legitimate markets,” Mocek told the newspaper.
It’s the problem in a nutshell. With great economy and not an ounce of hyberbole, Mocek defined the problem. As always, the question is, “Will anybody listen?”
Give Them Big Guns And A Camera
Regulators need the financial equivalent of automatic weapons provided the DEA when drug dealers switched from 38s to Uzis. They need bigger budgets, more enforcement staff, more computers, more laptops, more training, more undercover agents, more political support, less criticism and tools that work. At the same time, they need better PR skills, more news savvy and the power of arrest. They need cameras to take mugshots, a website that publishes the mugshots, and the ability to explain the arrest in nontechnical terms.
To the best of our knowledge, no federal law-enforcement agency provided photos of Bernard Madoff or R. Allen Stanford, despite the extraordinary allegations against them. The public needs those photos. The media need those photos. Bloggers need those photos. Webmasters need those photos. It’s a key step in getting this cancer under control. The Sarasota County Sheriff’s office provided a photo of Arthur Nadel. Why can’t federal agencies do the same?
Clean Up The Internet
It is a mistake of grand proportions to assume the Ponzi problem and the financial skullduggery exist only in the brick-and-mortar world, that the practitioners exclusively wear suits, read the Wall Street Journal and shuttle from appointment to appointment in fine rides like Madoff or Stanford.
Indeed, many of the most egregious offenders don’t have well-known names, spend much of the day in their underwear, read Internet boards as opposed to the Journal, don’t have appointments that even resemble anything traditional and don’t even leave their homes — not even to go to the bank.
They are destroying wealth. They are sucking hundreds of millions of dollars out of the economy, perhaps even billions of dollars. Their ability to accumulate wealth at the expense of others has nothing to do with skill and has everything to do with timing: They read High Yield Investment Program (HYIP) and “autosurf” boards on the Internet, send email to their followers when they spot an opportunity, fund their purchases via wire transfer through Canada and, when it’s time to take their “profits,” they take them by wire transfer and deposit them in banks via ACH.
At this very minute, hundreds of HYIPs and autosurfs are selling unregistered securities to U.S. residents and are using virtually pure Ponzi models to do it. They’re advertising huge returns — 30 percent a month and even 144 percent in 12 days — while stressing in U.S. English that they are safe opportunities and outside the reach of U.S. law enforcement in places such as Panama and Uruguay.
Because they use U.S. English and their websites can be copied, nonEnglish-speaking criminals and people who speak limited English as a second language are simply cutting and pasting content, starting their own HYIPs and autosurfs, paying off members to instill early trust — and then vanishing with U.S. dollars when they’ve met their criminal target.
And then starting all over again.
They need only about $400 to steal tens of millions of dollars. If they already own the php script, their investment shrinks to the price of a domain name, a hosting account for a month or two and their time.
Canadian companies used by the criminals include AlertPay and SolidTrustPay. These companies are permitting money-laundering by turning a blind eye to it. If they do take an overt step to instill client discipline, they get targeted by DDOS attacks that knock their servers offline.
PayPal won’t touch this business. Much of it went to Canada when the United States put an end to eGold’s love affair with customers who laundered money through the system.
A surf known as “MegaLido” is a case in point. No one other than the operator knows for certain where MegaLido was located. It came to life in the aftermath of the government seizure of nearly $100 million from Florida-based AdSurfDaily Inc. amid Ponzi allegations, and even was promoted by ASD members. MegaLido used AlertPay and SolidTrustPay, recruited an estimated 27,000 members, collected money from the members — and then simply vanished.
It looks as though it had a partner in the crime — a surf known as Instant2U — which also fled with money it collected. AlertPay and SolidTrustPay reportedly are providing partial refunds from money the criminal surfs left in the system, but it wasn’t enough to make “investors” whole.
AlertPay suffered a DDOS attack during the process and was knocked offline.
Forex scheming also is a big part of these games. CFTC, the SEC, the FBI, the IRS and prosecutors need tools. They need political clout behind them. It is clear that the American people have had it with Ponzi schemes and massive financial fraud. There never has been a better time for politicians to curry favor with voters by blasting these schemes back to the Stone Age.
The new “Shot heard ’round the world’ should be plugged into one of the bailout packages because it provides exceptional value for taxpayers, exquisite headlines for politicians and exceptional tools for law enforcement to nuke these operations and stem the flow of poison.
At the moment, advocates for Ponzi schemes — yes, the schemes have advocates and even crackpots who want to sue the government for enforcing existing laws — are sending letters to Sen. Patrick Leahy.
They want Leahy, chairman of the Senate Judiciary Committee, to investigate the prosecutors and the U.S. Secret Service for breaking up the ASD Ponzi scheme. Some of the very same people are promoting offshore scams in Panama and Uruguay.
It is time to nuke these miserable businesses. Gregory Mocek laid out the problem, and he couldn’t be more right.
