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  • Data Network Affiliates’ CEO Warns Critics: ‘They Better Be Very, Very Careful’

    UPDATED 10:31 A.M. ET (U.S.A.) The chief executive officer of Data Network Affiliates (DNA) has come out swinging against critics, threatening to take legal action.

    “There are some distractions I’m hearing about out there,” said CEO Dean Blechman.

    An audio recording of Blechman’s remarks is posted on DNA’s website. Two DNA pitchmen warmed up listeners by exchanging compliments with each other and lauding Blechman for nearly seven minutes before he offered his remarks.

    Blechman described DNA as his “unbelievable vision” — for which he had come out of retirement to make come true. “I have a chance to make that really happen,” he said.

    “My 30 years of my reputation in business stands for itself, no matter what distractions are out there towards Data Network Affiliates,” Blechman said, after mentioning his background in the natural-products industry with a company known as TWIN LAB.

    Without specifying the distractions and what the critics have gotten wrong, Blechman suggested he’ll sue, targeting his remarks at “everyone that’s a distraction out there and anyone that’s printing stuff on the Internet or anywhere.”

    “I’ll tell you one thing,” he warned in the recording. “They better be very, very careful of what they write . . . [b]ecause I have every intention of policing and pursuing every legal ramification . . . against anybody that’s reporting any information inaccurate to try to tear down what I’m trying to build here.”

    DNA’s domain lists a Cayman Islands address, as does a companion domain: TagEveryCar.com. A “Contact Us” link at the bottom of the DNA website resolves to a page that says, “Contact Data Network Affiliates[:] Information is coming soon!” The TagEveryCar domain redirects to the DNA website.

    DNA has delayed the program launch twice this month, and now says it will launch March 1. DNA says it is building a database of license-plate numbers.

    In recent days, critics have raised issues ranging from propriety, affiliate training, safety and privacy to the ownership of the company and why the domains listed offshore addresses. A multilevel-marketing firm, DNA says it has signed up more than 37,000 participants to gather license-plate numbers.

    Pitchmen for the company have identified the parking lots of Walmart, Target, churches, doctors’ offices and “anywhere” cars are parked as sources of plate data.

    Promoters have provided little instruction on matters such as whether DNA members are required to obtain the permission of store managers, church pastors and physicians before recording the plate numbers of patrons or congregants or patients, whether members should obtain additional insurance protection or consult with an attorney before entering the license-plate number recording business and how members are required to behave if confronted by store managers and patrons, church pastors and congregants, doctors and patients and police.

    Lionel Cesaire, one of the DNA pitchmen who introduced Blechman in the recording, previously described DNA as a company with members who would record the license-plate number of a hypothetical “red corvette” parked at Walmart at noon, a “doctor’s office” at 1 p.m. and “somewhere else” at 4 p.m.

    Privacy advocates may take a dim view of the approach, raising concerns about both propriety and legality. Some DNA members have recommended that affiliates record plate numbers with video cameras. Such information easily could end up on the Internet, exposing people to invasions of privacy and triggering lawsuits. At the same time, DNA members who collected information for the company could stockpile it and offer it for sale to other companies.

    Blechman thanked Cesaire for his introductory remarks, but did not reference Cesaire’s remarks in a previous conference call about recording numbers at churches, store parking lots and doctors’ offices.

    In a promotional video on YouTube, Florida-based DNA promoter Jeff Long — whom DNA says has recruited more than 700 members — suggested prospects should behave “inconspicuously” when snapping photographs of license plates at stores such as Walmart with iPhones, Blackberrys and notepad computers.

    Cesaire also has used the word “inconspicuous” when describing the recording of plate numbers, suggesting that members might want to be seated in their cars when writing down plate numbers in retailers’ parking lots.

    Describing his own experience collecting plate numbers at Walmart by taking pictures of them while strolling through the parking lot, Long said in a DNA promo on YouTube that store patrons looked at him “weird.”

    “People looked at me kinda weird. But I didn’t care. You kind of do it inconspicuously. . . . because . . . you know, everybody, ‘Why are you taking a photo of my car?’” Long said.

    As Long’s video narration continued, he said, “Who cares what people think? Who cares what people are going to . . . look at you weird? Whatever. Because as you do this, and you record 20 license plates, the company’s going to pay you $25.”

    The video promo continues to appear on YouTube. A similar video featuring Long in which the words referenced in the paragraphs above appear to have been edited out was removed from YouTube “by the user” in the past several hours, according to the YouTube site.

    The video also was removed from a webpage operated by an individual DNA affiliate believed to have spammed the PP Blog Thursday.

    A link to the now-removed YouTube video was sent to the PP Blog in a pure spam post Thursday at 10:05 p.m. The sender targeted a DNA discussion thread, but attempted to post an ALL-CAPS sales pitch (italics added):

    “WANT TO JOIN DNA’s TOP TEAM AND LEARN THE TRADE SECRETS OF BUILDING A HUGE ORGANIZATION FAST AND FREE?

    TO QUALIFY YOU MUST REGISTER TO BECOME A FREE AFFILIATE AT
    [**SPAMMING LINK REMOVED BY ADMIN**]

    SEE YOU AT THE TOP!

    Later, a possible shill entered the thread, saying he was “tryin to sign up.” After that, a third poster left a sales URL in the same thread. The PP Blog attempted to contact DNA through its website to report the spam, but the site did not have a contact form.

    In the recorded conference call, Blechman said members should be confident in the program.

    “I am leading this company; I’m the CEO. I’m in charge. Every big decision is made by me and my partner, Arthur Kurek.

    Kurek is president and chief financial officer of DNA, Blechman said.

    In the call posted on DNA’s website, Blechman did not address any of the issues raised by critics. It is unclear if he approves of the Jeff Long video and Long’s plate-number collection method. Long has been identified in a DNA conference call as the company’s top recruiter.

    Long recorded a similar video to recruit members for Narc That Car. The headline on the video now says, “NARC That Car – Don’t Join!” In the upper-right corner of the YouTube site, this message appears:

    “This video talks about NARC That Car… IF YOU ARE PLANNING ON MARKETING THIS BUSINESS ON THE INTERNET DO NOT JOIN!!!!! NarcThatCar CANCELED AND DISABLED My distributorship because I put this video on YouTube…I’m now the #1 leader and sponsor in their BIGGEST COMPETITOR’S BUSINESS…DataNetworkAffiliates. Again…don’t join NarcThatCar if you plan on marketing on the internet!!!!!!”

    Narc That Car is a Dallas-based business. Like DNA, Narc That Car says it is in the business of gathering license-plate data.

  • Canadian Regulators Attack ‘Pay It Forward’ Scheme; Many Autosurfs, Cash-Gifting And MLM Schemes Use Similar Marketing Approach

    Trading off a popular phrase, Kerry John O’Neill’s “pay-it-forward” scheme has landed him in trouble with Canadian securities regulators, wiped him out financially and implicated an associate who helped him sell the scheme.

    O’Neill even named his scheme the “Pay It Forward Program” (PIF), according to the British Columbia Securities Commission (BCSC), which accused him of collecting $9.6 million from 943 investors by telling them they could expect returns ranging from 100 percent to 300 percent in 90 days.

    “Pay it forward” is a marketing buzzword phrase. The phrase often is associated with autosurf, cash-gifting and MLM schemes that recruit affiliates. The “pay-it-forward” sales approach has emerged as a potential marker of a financial fraud.

    Broke and living in public housing, O’Neill now has become the subject of an investigation by the Alberta Securities Commission (ASC). Like BCSC, ASC is seeking sanctions against O’Neill, who was banned in September 2009 from the securities business in British Columbia.

    BCSC accused O’Neill of selling unregistered securities as investment contracts. Although Pay It Forward was not an autosurf, similar prosecutions have been brought against autosurf operators in the United States.

    “Between November 2005 and December 2006, O’Neill solicited investors to join the PIF Program and enter into investment contracts (the PIF Securities) with him,” BCSC said. “No prospectus was ever filed for the PIF Securities and none of the exemptions under the Securities Act . . . applied to their distribution. O’Neill was not registered under the Act when he distributed the PIF Securities.”

    Banned along with O’Neill by BCSC was Renee Marie Helmig, also known as Nisha Helmig.

    Helmig, of North Vancouver, admitted she “used false information provided by O’Neill to make misrepresentations to investors and potential investors to convince them to invest in Pay it Forward,” according to BCSC.

    O’Neill’s particular brand of “pay-it-forward” involved a scheme by which investors were told that “their funds would be used to buy and sell distressed merchandise,” BCSC said.

    Here is how money invested in the scheme was distributed, according to BCSC:

    • $6.4 million to pay amounts owed to other investors.
    • $1.1 million to purchase merchandise.
    • $213,000 for “other investment opportunities.”
    • $56,000 for O’Neill’s personal expenses.

    The remainder was used for “expenses related to the distressed merchandise business,” BCSC said.

    “[M]ost investors did not earn any return on their investments, but rather lost some or all of their investment capital,” BCSC said. “[T]he payments O’Neill made to investors did not come from profits he made from buying and selling distressed merchandise. Instead, O’Neill paid investors with other investors’ funds.”

    “O’Neill has been unemployed since the PIF Program ended” in April 2007, BCSC said. “He lives in subsidized housing and his only income is a monthly disability benefit.”

  • ANOTHER FLORIDA FRAUD CONVICTION: Michael J. Muzio Ran ‘Pump-And-Dump’ Scheme In Case Tied To Ponzi And Affinity-Fraud Scheme Targeting Haitian-Americans

    A Florida man implicated in a pump-and-dump scheme tied to a Ponzi- and affinity-fraud scheme has been convicted and faces decades in federal prison.

    Michael J. Muzio, 46, of Tampa, was convicted on six counts of securities fraud, two counts of substantive wire fraud, two counts of lying to the SEC and the FBI and one count of conspiring to commit wire fraud.

    Muzio’s pump-and-dump scheme is linked to the alleged Home Pals Investment Club Ponzi and affinity-fraud scheme involving Ronnie Eugene Bass Jr., Abner Alabre and Brian J. Taglieri.

    Bass, Alabre and Taglieri were accused civilly and criminally of targeting Haitian-Americans in a $14.3 million scheme.

    Alabre, 33, of Miramar, Fla., and Taglieri, 39, of Jupiter, Fla., already have pleaded guilty to criminal charges, which were brought in October 2009. Bass and Alabre were accused by the SEC of fooling investors by saying Taglieri was Home Pals’ attorney, but Taglieri is not an attorney, according to records.

    Muzio defrauded Haitian-American and other investors in South Florida and elsewhere “by manipulating” the stock price of International Business Ventures Group (IBVG), a Florida shell company “with no assets and virtually no business activities,” prosecutors said.

    IBVG purportedly was operated from Palm Beach Gardens. Last month, U.S. Attorney General Eric Holder described the Palm Beach area as the “ground zero” of financial fraud. Holder ventured to Palm Beach to make a speech and introduce the Obama administration’s Financial Fraud Enforcement Task Force.

    The manipulation scheme was carried out through “coordinated stock purchases and sales designed to artificially impact share prices,” the FBI said.

    “To induce investors to purchase the stock, [Muzio] created a false impression that an active market for the stock existed by engaging in illegal ‘wash trades’ in which he simultaneously entered buy orders through one brokerage account under his control and offsetting sell orders at the same price through another brokerage account under his control.

    “These trades had no real economic effect, but the defendant’s brokers unwittingly reported the trading activity and potential investors who saw the online reports were misled into believing that the stock was actively traded at the quoted prices,” the FBI said.

    As often is the case in pump-and-dump schemes, Muzio “issued false and misleading press releases” claiming that the company had profitable business dealings.

    Muzio claimed IBVG “had deals to provide and offer prepaid debit cards in Haiti,” as well as prepaid calling cards and “exclusive rights to market prepaid electric meters in Haiti,” the FBI said.

    “Investors were offered the chance to purchase free-trading shares of stock, but then received certificates for restricted shares which could not be traded and ultimately proved to be worthless,” the FBI said.

    Home Pals advised website viewers that the company was “honest” and adhered to “uncompromising ethics,” the SEC said.

  • Former Attorney Sentenced To 99 Years In Prison For Ponzi Scheme; Edward S. Digges Jr. Was Recidivist Offender

    The Texas State Securities Board and the district attorney's office of Collin County, Texas, prosecuted Edward Digges Jr. A jury imposed a 99-year-prison sentence.

    A Texas jury has thrown the book at Edward S. Digges Jr., sentencing the Collin County man to 99 years in prison for fleecing 130 investors in a securities-fraud and Ponzi scheme.

    Digges, 63, formerly was an attorney in Annapolis, Md. He was disbarred in an overbilling scheme, convicted of mail fraud in 1990 and spent two years in federal prison. After his release from prison, he continued to clash with law-enforcement agencies, including the SEC, regulators in Maryland, Ohio and Pennsylvania, and the Texas State Securities Board (TSSB).

    Most of Digges’ victims were “elderly,” prosecutors said.

    The 99-year sentenced imposed in Texas evolved from Digges’ operation of an entity known as the Millennium Terminal Investment Program, which sold securities that purportedly generated profits from point-of-sale terminals used by merchants to process credit and debit transactions.

    In truth, investigators said, Millennium operated in the red out of the gate, was in deep “financial turmoil” not disclosed to investors, was making payments to old investors with money from new investors and lied about having a “reserve fund” to shore up the program.

    Digges collected at least $10 million in the scheme by promising investors annual returns of 12 percent, prosecutors said.

    “Edward Digges has a long history of defrauding some of our most vulnerable citizens, and this sentence ensures he will never again do so,” said Texas Securities Commissioner Denise Voigt Crawford.

    She noted that victims will not be made whole.

    “The conviction will not return money to investors,”  she said. “This case highlights the importance of checking the background of any financial professional you choose to do business with, and the importance of obtaining full disclosure before investing.”

    Digges deliberately targeted senior citizens in newspaper ads, prosecutors said. At the same time, he did not disclose his criminal conviction and did not tell clients about a $3.6 million civil judgment against him in the overbilling case.

    TSSB and the district attorney’s office of Collin County prosecuted Digges on the criminal charges. Collin County is a suburban county in the Dallas/Fort Worth metropolitan area.

    SEC civil charges against Digges were brought in Florida.

  • Narc That Car Video From Downline Group Known As Team Trinity International May Use Content Lifted From Public Service Announcement Put Out By Actor Leonardo DiCaprio

    UPDDATED 2:26 P.M. ET (March 5, U.S.A.) A YouTube video promotion for the Narc That Car multilevel-marketing (MLM) program appears to use celebrity footage produced by Appian Way Productions, a production company owned by actor Leonardo DiCaprio.

    The PP Blog attempted to contact DiCaprio for comment through the Screen Actors Guild Friday night. The office was closed for the weekend.

    The Narc That Car You Tube promotion references a downline group known as Team Trinity International, and appears to splice in content from a Public Service Announcement (PSA) produced by Appian Way in 2008 that urges Americans to vote.

    It was not immediately clear if DiCaprio, his production company or the other celebrities in the PSA approved of the use of the footage in what effectively was a commercial for Narc That Car. Several celebrities appear in the Narc That Car promo.

    At the moment, the Team Trinity promo is at this URL:

    http://www.youtube.com/watch?v=XgLFHH6TaaA&feature=related

    The PSA can be seen in this 2008 story from Reuters:

    http://blogs.reuters.com/fanfare/2008/10/02/leonardo-dicaprio-other-celebs-pump-up-youth-vote/

    The PSA has nothing to do with MLM. The footage potentially at issue in the Team Trinity video begins at about the 3:40 mark in the PSA and the 0:11 mark in the Narc That Car promo. The PSA’s theme is passing along to friends the worthwhile message of going to the polls, but the Team Trinity video applies the theme to passing along info about Narc That Car.

    “I need you to take this and send it to five people,” Oscar-winning actress Halle Berry says in the PSA, referring to sharing the message of going to the polls.  Berry says the same thing in the Team Trinity Narc That Car video, but in the context of sharing the Narc That Car message.

    Other celebrities who appeared in the PSA are spliced into the Team Trinity MLM message for Narc That Car. The Team Trinity video fades to the Team Trinity logo after comedian-actress Sarah Silverman appears.

    In an earlier video, Team Trinity used the logos of 30 famous retail companies, positioning their parking lots as good places to capture license-plate data.

    Team Trinity also has referenced the AMBER Alert program administered by the U.S. Department of Justice. The Justice Department denied that Narc That Car had any affiliation with the famous child-protection system.

    Narc That Car, which says it is building a database for companies that repossess automobiles, is the subject of inquiries by the Dallas BBB and the district attorney of Henderson County, Texas.

  • Data Network Affiliates (DNA) Promoter Describes Program As ‘Cause’; References Walmart Parking Lot; Says Members Should ‘Snap’ License Plates With iPhones, Blackberrys

    UPDATED 12:15 P.M. ET (U.S.A.) Without raising the issues of propriety, safety and legality, a promoter for the Data Network Affiliates (DNA) multilevel-marketing (MLM) program has produced a sales video that instructs members to “snap photos” of the license plates of cars.

    The video is 8:40 in length, and appears to be an upline promotion that is available to DNA downline members in a specific group. A “Join For FREE Right Now” button appears below the video, and the link resolves to a DNA registration page that may be on an insecure site. The sign-up link is on an “http” page, as opposed to an “https” page, although the URL includes the word “securesite.”

    “The company’s going to pay you $25 to do this,” the narrator said in a YouTube video. He recommended Walmart parking lots as a source of plate numbers, and also “malls, shopping malls, shopping centers, grocery stores, banks” — and “anywhere” there is a group of parked vehicles.

    The PP Blog became aware of the video after the link for it was used in an ALL-CAPS sales-pitch spam attempt at the Blog. It was not immediately clear if DNA, whose domain is registered in the Cayman Islands, had a policy that prohibited affiliates from spamming to drive business to the company.

    Also unclear is the process by which recipients of email and forum spam from DNA promoters would contact the company to report affiliate spam. A “Contact Us” link at the bottom of DNA’s website says, “Information is coming soon!”

    DNA has been in a state of prelaunch for weeks, twice postponing launch dates in February and moving the launch date to March 1, according to a countdown clock on its website.

    The link to the video was at a URL of a domain registered in Myrtle Beach, S.C. The narrator said he had “personally sponsored” more than 400 DNA members in two days.

    Screen shot: This DNA sales pitch was sent to the PP Blog at 10:05 p.m. (ET) yesterday. It included an ALL-CAPS promo and a link to a video by a DNA promoter. The video site included a link to register for DNA.

    In the video, the narrator described DNA as a “cause” that sought to involve “millions of people” and put “millions of eyeballs” in the business of recording license-plate numbers. In various audio recordings by DNA, pitchmen have referenced the AMBER Alert program, although a recent recording by the company says DNA is not affiliated with the national child-protection system administered by the U.S. Department of Justice.

    In this story, the PP Blog describes a DNA audio recording in which a pitchman shared a vision of an America in which DNA members would record the plate numbers of cars as they moved from destination to destination during the day.

    A hypothetical “red corvette” could be spotted at Walmart at noon, at a “doctor’s office” at 1 p.m. and somewhere else at 4 p.m. — with DNA members recording the plate number at all three locations, according to the recording. Meanwhile, in this story, the PP Blog reported on a DNA audio pitch that described “church” parking lots as a source of license-plate numbers.

    In the YouTube video posted on the Myrtle Beach domain, the narrator instructed viewers to “stop whatever you are doing.”

    “This is huge,” he said. “This is truly the wave of the future.” During the video, the promoter described his experience of recording plate numbers. He motioned as though he were snapping photographs, while instructing prospects to do the same.

    “Now, there’s  people out there that will pay big, big, big bucks for this data, OK? ” he said. “And that’s the reason that these people (DNA) are willing to pay big bucks.”

    He did not disclose the names of any companies for which DNA was collecting data. Nor did he describe whether permission needed to be obtained from retailers to snap photos of their patrons’ license numbers or how DNA members should behave if confronted by retailers, patrons or police.

    Many retails chains have policies that limit or prohibit solicitation on their properties. The video provided no guidance on whether individual DNA members should increase their insurance protection or advise local authorities that they were canvassing the parking lots of doctors’ offices, churches and stores to record license-plate data.

    A Dallas-based MLM business — Narc That Car — has a similar program involving the capture of license-plate numbers for entry in a database.

    UPDATE 11:59 A.M. (See comment below that explains there are two versions of the DNA promo video on YouTube, one that is 8:40 in length and one that is 8:48. The longer version includes this narration about DNA promoter Jeff Long’s experience recording license-plate numbers in a Walmart parking lot:

    “People looked at me kinda weird. But I didn’t care. You kind of do it inconspicuously. . . . because . . . you know, everybody, ‘Why are you taking a photo of my car?’”

    The narration in the 8:48 version continues:

    “Who cares what people think? Who cares what people are going to . . . look at you weird? Whatever. Because as you do this, and you record 20 license plates, the company’s going to pay you $25.”)

  • DEVELOPING STORY: Plane Hits 7-Story Building In Austin; Injuries Reported; IRS Said To Have Office In Building

    UPDATED 12:54 P.M. ET (U.S.A.) An airplane reported to be “small” has crashed into a seven-story building in Austin, the state capital of Texas.

    NBC affiliate KXAN is reporting that at least two people have been injured, that the FBI and the Bureau of Alcohol, Tobacco, Firearms and Explosives are on the scene, and that an office of the Internal Revenue Service is located in the building.

    The building is known as the Echelon Building. Firefighters are on the scene. The crash occurred in North Austin.

    MSNBC has a live feed of KXAN’s coverage. The station is reporting that the plane was flying “very low” at a high rate of speed.

    Meanwhile, Fox News is reporting that the incident is being investigated as an “intentional act.”

    CNN, quoting a “federal official,” is reporting that the suspect in the case set his home on fire this morning, stole the plane and crashed it into the building.

  • Warnings Appear On Craigslist In NarcThatCar Ads; Some Ads Targeted For Removal Day After FTC Announced Crackdown On Online Fraud

    UPDATED 9:47 A.M. ET (U.S.A.) Coincidence? Part of the new partnership the FTC announced yesterday with Craigslist that urges consumers to be on the lookout for scams when responding to job and business opportunity ads online?

    Messages urging caution are appearing in Craigslist ads for NarcThatCar, the Dallas-based company that says it is building a database for companies that repossess automobiles and is using a multilevel-marketing program to attract thousands of members.

    Warnings were observed at the top of NarcThatCar ads on Craigslist in several cities this morning. The warnings appear at the top of the pages of individual postings and are highlighted in yellow, with a red lead-in:

    “Avoid scams and fraud by dealing locally!” the lead-in warns. A “More info” link appears after a general warning about money scams, and the link resolves to a page that includes information on how to contact the FTC.

    Screen shot: This Craigslist ad for NarcThatCar in Baton Rouge was one of several that included a warning message that linked to information on how to contact the FTC.

    An Atlanta Craigslist ad for NarcThatCar with a headline of “Start Your Own Business! – $125 (Worldwide!)” includes the warning message. The ad calls NarcThatCar an ‘investment.”

    “Make over $5000.00 a month with a $125.00 investment! Go to jnelson.narcthatcar.com!” the ad reads.

    A NarcThatCar ad on Craigslist in Houston also includes the warning, which appears above a headline that reads, “Earn Extra Cash!… Collecting Data! (www.extracash4plates.narcthatcar.com).”

    Meanwhile, a Craigslist ad for NarcThatCar in Oklahoma City also includes the warning. Its headline is “Data Entry/Networking.”

    The warning also appears above a NarcThatCar ad in New York’s Craigslist, above a headline that reads “Make money by reporting license plate numbers” and a sales pitch that begins, “What would you do if you could get paid over $2 for every license plate number you write down?”

    What once was an ad for Narc That Car on Craigslist in Austin, Texas, does not include the warning. Rather, the ad includes this message, “This posting has been flagged for removal.”

    Elsewhere, a NarcThatCar Craigslist ad in Baton Rouge includes the warning, above a headline that reads, “The Simplist Homebase Marketing Job on the Planet! (Baton Rouge).”

    The body copy of the ad says (in part), “Learn how to turn information into income NARC (National Automobile Recovery Company) ThatCar.com

    “No Selling, No Products or Inventory

    “100% Return on Investment as fast as 24 to 48 hours.

    “Job Duty: Enter 10 random license plates per month to help create a National real time database that is used by: Police Department(criminal involvement), FBI(Amber Alert), Military(Terriorist), Banks, Car Rentals, Car Dealerships (RePo), and Major Business for marketing purposes.”

  • BULLETIN: New Affidavit Filed By Andy Bowdoin Appears To Be At Odds With Claims He Made In September

    Andy Bowdoin

    A sworn affidavit filed today by AdSurfDaily President Andy Bowdoin appears to make claims that are the polar opposite of claims he made in a sworn affidavit witnessed by a notary public and filed in federal court Sept. 15.

    Separately, Bowdoin’s lawyer, Charles A. Murray, filed a brief that may be the opening volley in a bid to challenge the Constitutionality of the government’s forfeiture case, suggesting the U.S. Secret Service had no “probable cause” to seize tens of millions of dollars from Bowdoin’s bank accounts in August 2008.

    Murray also said that Bowdoin had not received fair notice about court rulings and did not challenge the rulings previously because of an email glitch that affected Murray’s computer between Nov. 10, 2009, and “early January” of this year.

    “I experienced as yet unidentified computer/server issues, wherein multiple email messages apparently never loaded to the firm’s Inbox,” Murray said.

    Bowdoin, 75, now flatly claims he was told by a former defense attorney that, if he submitted to the forfeiture of tens of millions of dollars, he would face no jail time if criminal charges were filed in the ASD Ponzi scheme case.

    He did not name the attorney in today’s filing, referring to him obliquely as “prior counsel.” In an earlier filing, Bowdoin identified his counsel as Stephen Dobson.

    “I was assured by my prior counsel that, if I released my claims in this [civil-forfeiture] action, I would not be facing any incarceration,” Bowdoin claimed today. “My January 2009 motion to withdraw my claim . . . was solely based upon prior counsel’s unilateral mistaken belief that my release of claims would unequivocally assure that any subsequent criminal sentence entered would not include any prison time.”

    Today’s filing was witnessed by Florida notary public Joe B. Cox of Lee County.

    But in a sworn affidavit Bowdoin signed Sept. 15 before a different notary public — Patricia C. Sanson of Lee County — Bowdoin repeatedly said Dobson had said only that there was a possibility Bowdoin would not be sentenced to prison if criminal charges emerged.

    In the Sept. 15 affidavit, Bowdoin repeatedly swore that Dobson had not promised him no jail time.

    These are among the phrases Bowdoin swore to in the Sept. 15 affidavit (emphasis added):

    • Dobson represented to me that I could possibly avoid prison or get a reduced sentence if I agreed to disclose details concerning ASD and releasing the assets.
    • I also signed a document stating that I would release my claims in the abovecaptioned civil in rem forfeiture proceeding, again thinking that necessary for a possible avoidance of a prison term.
    • I did all of this on the understanding that by cooperating I could possibly avoid a prison sentence.
    • I agreed not to exercise my rights in the civil forfeiture proceeding, anticipating from representations made by Dobson that this could possibly keep me out of prison.
      Dobson lead [sic] me to believe that if I cooperated there was a possibility that I would not be incarcerated or imprisoned.
    • I believed that my cooperation would still result in a criminal sentence that could possibly not include imprisonment or incarceration.
    • I slowly came to understand what I understood from Dobson not to be the case: that my agreement to cooperate provided me no benefit in the criminal matter except the possibility of a reduced sentence if the judge desired which would still be a life sentence.

    Bowdoin’s filing today leads to questions about whether he deliberately chose to appear before a different notary to swear to the affidavit. At the same time, it leads to questions about whether Bowdoin somehow was unaware that U.S. District Judge Rosemary Collyer already had cited Bowdoin’s Sept. 15 sworn affidavit in a major ruling that Bowdoin no longer had standing in the case.

    On Nov. 10, Collyer noted Bowdoin’s repeated use of the words “possibly,” “possible” and “possibility” in the Sept. 15 affidavit when referring to the advice Dobson had given him on the matter of jail and and finding that Dobson had behaved responsibly while representing Bowdoin.

    “Such an approach from counsel could be seen as the norm when the Government’s evidence is strong,” Collyer said. “What Mr. Bowdoin hoped to gain from his release of claims/early acceptance of responsibility and his debriefing with the Government was a promise of no jail time. When that was not forthcoming from the Assistant United States Attorney, Mr. Bowdoin balked and tried to back up, as if he had not already released his claims and talked to the Government.”

    Read the sworn affidavit Bowdoin filed today after appearing before notary Joe B. Cox.

    Read the Sept. 15, 2009, sworn affidavit Bowdoin filed after appearing before notary Patricia C. Sanson.

    Read a story from earlier today on a possible split in the Bowdoin/Harris family.

  • FEDS: Florida Man Operated Telephone ‘Cramming’ Scheme From Prison; Willoughby Farr Indicted; Already Faces $34.5 Million Civil Judgment

    Willoughby Farr: Source: Florida Department of Corrections

    An inmate operated a collect-call “cramming” scheme from a Florida state prison by hiding his ownership of three firms, federal prosecutors said.

    Willoughby Farr, 46, of West Palm Beach, has been indicted on six counts of mail fraud and two counts of wire fraud. He faces a maximum prison sentence of 160 years, if convicted on all counts.

    Farr already faces a $34.5 million judgment in a civil case filed by the FTC. Customers were billed for calls they never placed, and many callers paid the charges because information about the calls was buried on the last page of their telephone bills.

    “This type of scheme steals from hundreds of thousands of

    Assistant Attorney General Tony West

    consumers who inadvertently pay toll charges that appear on their phone bills without authorization,” said Assistant Attorney General Tony West. “We will not hesitate to prosecute financial crimes of this nature, but this case stresses the need for consumers to carefully review their telephone bills to make sure fraudulent charges are not included.”

    It has been a busy day for West. Earlier today, he participated in an FTC news conference announcing a crackdown on employment and work-at-home fraud.

    The indictment in the cramming case against Farr was unsealed today.

    Prosecutors said he used three West Palm Beach firms — Nationwide Connections Inc., Access One Communications Inc. and Connect One Communications — to fleece customers.

    In the 2006 FTC case, investigators said Farr billed for calls that never occurred, including “phony collect calls” and calls to telephone lines dedicated to modems and fax machines, and to homes and businesses where no one was present.”

    The calls typically cost unknowing customers “between five and eight dollars each,” the FTC said.

  • FTC Announces Major, Multiagency Sweep; Says Government Will Seize Assets Of Scammers; Heralds New Partnerships With Craigslist, Microsoft, Others To Combat Online Fraud

    David Vladeck, FTC.

    The Federal Trade Commission has announced a major sweep involving numerous companies and defendants — and a new partnership with Craigslist, Microsoft, Monster.com and CareerBuilder to combat employment and work-at-home fraud.

    Meanwhile, the agency said it was working with AARP’s Legal Counsel for the Elderly to keep America’s senior citizens’ pocketbooks out of the clutches of scammers.

    Dubbed “Operation Bottom Dollar,” the sweep includes seven new civil cases against the operators of deceptive and illegal job and money-making scams, 43 criminal actions by the Department of Justice and 18 actions by state attorneys general.

    A separate action by the U.S. Postal Inspection Service is part of the sweep, and the FTC announced updates in four previous cases. “Operation Bottom Dollar” specifically targets “con artists who are preying on unemployed Americans with job-placement and work-at-home scams,” the FTC said.

    “Employment and business opportunity fraud causes terrible hardship to those who are suffering the most in these difficult economic times,” said Assistant U.S. Attorney General Tony West. “The Justice Department is committed to prosecuting those who defraud through false promises of employment or financial success.”

    The days of getting away with posting bogus job and money-making offers online are coming to an end, said David C. Vladeck, director of the FTC’s Bureau of Consumer Protection.

    Using  terse language, Vladeck said scammers should not get too comfortable with the money they’ve stolen.

    “If you falsely advertise that you will connect people with jobs or with opportunities for them to make money working from home, we will shut you down,” Vladeck said. “We will give your assets to the people you scammed, and, when it’s appropriate, we’ll refer you to criminal authorities for prosecution.”

    Monster.com, Careerbuilder, Bing and Craigslist will display FTC consumer education material to people who are using the companies’ Web sites to look for jobs, the FTC announced.

    Charged in Operation Bottom Dollar were:

    Government Careers Inc. – Jon Coover; Richard Friedberg; and Rimona Friedberg. Abili-Staff, Ltd. – Pamela Barthuly; Jorg Becker; and Equitron LLC. Darling Angel Pin Creations Inc. – Shelly R. Olson and Judith C. Mendez; d/b/a/Angel Pin Creations.

    Entertainment Work Inc. – Jason Barnes and Racquelle Barnes; d/b/a Resource Publishing Co. Independent Marketing Exchange Inc. – Wayne Verderber, II, d/b/a National Data Management, N.D.M., Global Mailing Services, G.M.S., Independent Mailing Services, Independent Mailing Services Inc., I.M.S., Independent Shoppers Network, Independent Shoppers, Success At Home, Success-At-Home Mailing, IMEX, IMEX, Inc., and Continental Publishing Company.

    Preferred Platinum Services Network – Rosalie Florie; d/b/a Home Based Associate Program and PPSN, LLC. and Philip D. Pestrichello, individually. Real Wealth, Inc. – Lance Murkin; doing business as American Financial Publications, Emerald Press, Financial Research, National Mail Order Press, Pacific Press, United Financial Publications, Wealth Research Group, and Wealth Research Publications.

    “What makes job scams particularly insidious—and what makes today’s efforts so important—is that these scams most often exploit honest consumers who are trying to make an honest living,” said Ohio Attorney General Richard Cordray.

    “Instead of making money, victims end up losing hundreds if not thousands of dollars,” Cordray said.

    Other agencies involved in “Operation Bottom Dollar” include AARP’s Legal Counsel for the Elderly; the U.S. Postal Inspection Service, Tampa Field Office; Better Business Bureaus of Southern Arizona, West Florida, New Jersey, the Southland (Southern California), and Coastal, Central, & Southwest Texas; U.S. Attorneys offices for the Southern District of New York, New Jersey and Western District of Missouri; the attorneys general of Florida, New Jersey and Pennsylvania; Florida Department of Agriculture and Consumer Service; Washington State Department of Financial Institutions, Securities Division; Los Angeles County Department of Consumer Affairs; Ocean County New Jersey Department of Consumer Affairs; and the Tucson Police Department.