PatrickPretty.com

Category: The Economy

  • So, You Want To Push An Autosurf And Tell Your Prospects You’ve Performed ‘Due Diligence’ On The Operator?

    “Due Diligence” is a phrase that gets tossed around a lot in the autosurf trade. People posing as “industry” authorities — all while denying they’re pushing an “investment” — routinely tell prospects they’ve done their homework on a company.

    Such was the case in the earliest days of AdSurfDaily, a Florida company federal prosecutors said was selling unregistered securities, engaging in wire fraud and money-laundering and operating a $100 million Ponzi scheme.

    Screen shot of claim 'due diligence' had been performed on ASD.
    Screen shot of claim 'due diligence' had been performed on ASD.

    Today a New York company involved in mainstream investing agreed to pay more than $814,000 to settle charges that it did not perform adequate due diligence on a firm it recommended. The company it pushed turned out to be a colossal fraud.

    It is a case with far-reaching implications — one that puts both Wall Street traders and people pushing illegal, underground investment programs such as autosurfs on notice that the phrase “due diligence” is not to be taken lightly.

    <!–adsensestart–>The SEC said that the Hennessee Group skipped steps while subjecting Samuel Israel’s infamous Bayou fund to due diligence, relied on Bayou’s claims rather than performing independent research — and failed to spot obvious deceptions.

    Bayou collapsed in 2005, costing investors more than $400 million. Even though only 40 Hennessee clients joined the fund based on the firm’s recommendation, the clients lost “millions of dollars,” the SEC said.

    Not only will Hennessee have to pay $814,000 to settle false due-diligence claims, it also has to tell clients for the next two years about the settlement and provide clients and prospects copies of the settlement agreement, according to the settlement terms.

    Hennessee neither admitted nor denied wrongdoing in the settlement.

    “Forewarned is forearmed — investment advisers must make good on their promises or face the consequences of vigorous SEC enforcement action,” said Robert Khuzami, director of the SEC’s Division of Enforcement.

    “Instead of analyzing Bayou’s results and processes through a review of Bayou’s historical trading methods to determine whether the fund was, in fact, successfully executing its purported day-trading strategy, Hennessee Group and [Charles] Gradante decided not to perform any analysis after Bayou refused to produce its trading data,” the SEC said.  “They relied entirely on Bayou’s uncorroborated representations about its strategy and its purported rates of return.”

    One of the deceptions Bayou used was to end a relationship with a top auditing firm and create a bogus auditing entity to sustain the fraud — something Hennessee missed during due diligence, the SEC said.

    Hennessee dealt above ground, of course. But what happened to this Main Street firm sends a strong message to the autosurfing “industry,” which is infamous for recruiting prospects by making false claims of due-diligence.

    Look at the screen shot above. Not only are there claims that due diligence had been completed, there are claims that ASD provided shelter from the FTC and the SEC — and that ASD deposits were insured by the FDIC.

    In addition, there are claims that ASD had top management, was well-capitalized and had a powerful parent company and financial stability.

  • BREAKING NEWS: Garner Served With RICO Complaint Filed By ASD Members; Asks Court For Time To Respond

    Robert GarnerUPDATED 10:37 A.M. EDT (U.S.A.) AdSurfDaily attorney Robert Garner has been served with a lawsuit alleging he engaged in racketeering with ASD President Andy Bowdoin and Golden Panda Ad Builder President Clarence Busby.

    The RICO lawsuit had been pending since Jan. 15. In court filings, Garner acknowledged he was served with the complaint April 2. He has asked for time to respond.

    Garner’s motion for enlargment of time to file was filed pro se, meaning it was filed by Garner himself and not an attorney representing Garner. The motion lists a P.O. Box in Greensboro, N.C., as Garner’s address.

    Garner’s motion does not say where he was served the complaint. In a proposed order, he asked a federal magistrate judge to grant the motion to enlarge time, as opposed to asking Judge Rosemary Collyer, the district judge hearing the case. Garner wants until May 22 to respond.

    Plaintiffs include Mike Collins, Frank Greene and Natures Discount Inc. — all members of ASD.

    The RICO complaint alleged that Garner, Bowdoin and Busby 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.

    No attorney for either Bowdoin or Busby has entered an appearance notice in the racketeering case. It is unclear if they have been served. The lawsuit was filed Jan. 15. It has been the subject of delays, owing to the plaintiffs’ inability to perfect service on the defendants.

    Read Robert Garner’s motion.

  • UPDATE: Guest Columnist Relates Conversation With Lawyer On Matters Pertaining To Free Speech And Subpoena In Larry Friedman Libel And Slander Lawsuit Against Jack Arons

    Editor’s Note: This is a follow-up column by Roxy Lewis, a member of ASD and the ASD Members Business Association (ASDMBA). Lewis is a self-described member of the “AARP generation” and a grandmother.

    Her initial column was published April 18. It dealt with her thoughts and feelings about seeing her name in a subpoena in the slander and libel lawsuit by Dallas attorney Larry Friedman against Florida resident Jack Arons, a pro se defendant who draws Social Security and lives in a manufactured home. The initial Lewis column also included her take on email exchanges with Friedman’s law firm in her bid to receive a refund for her $100 contribution to ASDMBA.

    This column addresses her discussions with an attorney about these matters. It is published in her own words. The references to the “Ning Nine” below are references to individuals about whom Friedman sought information via subpoena to ning.com, the host of the ASD-Biz forum.

    For additional background, see reports on this Blog pertaining to Bob Guenther, the de facto head of ASDMBA. Guenther introduced Friedman to potential ASDMBA contributors last summer as a lawyer interested in protecting their interests in the civil forfeiture case against AdSurfDaily Inc., a Florida company federal prosecutors said was selling unregistered securities, engaging in money-laundering and wire fraud and operating a Ponzi scheme. Some ASDMBA members are unhappy with Guenther, saying he has not provided transparent accounting that detailed  how ASDMBA spent money collected from contributors to protect their interests in the ASD case. ASDMBA members also complained about verbal bullying and threats from Guenther. Friedman is the attorney for the ASDMBA Trust.

    Of Subpoenas, Speech and the Attempt to Silence

    By Roxy Lewis

    After writing the guest column on this blog [April 18], I was finally able to speak directly with a local Minnesota attorney who specializes in internet law, regarding my name appearing on Larry Friedman’s subpoena in his case against Jack Arons. I also wanted to know the legal ramifications of that, as well as my options and possible legal exposures. I would recommend everyone else who is curious do the same with an attorney local to their area.

    Based on what I was told, I am even more convinced that naming the “Ning Nine” in the subpoena was a move intended solely to intimidate and silence us, and anyone else who reads about the ASDMBA, and possibly to fish for further information about the anonymous posters in the group.

    First I asked whether I have any legal exposure based on being on the subpoena. The reply was no, as the subpoena was not directed to me personally, nor have I posted anything that could be considered libelous or defaming.

    Next I asked, after reading the thoughts of others that the Ning Nine group members should sue Larry Friedman for defamation, whether this would be possible.  In a word, no. Larry Friedman has not defamed or issued libelous statements regarding any of us. The fact that he listed our names on a subpoena is not actionable.

    Third, I asked if I were to file a complaint with the Texas bar or shared information with the Citizen Media Law Project site, as some have suggested, would I have an exposure to suit there. His response was very interesting.

    What he said was, “The best defense for a claim of defamation is the truth. If what you say in the complaint or share with the Project is the truth, and you can show that, you have an excellent defense.”

    Then, just out of curiosity I asked this: Suppose Larry Friedman decides, since he has my real name and address, to sue me and schedules a deposition in Texas as he did with Jack Arons. Can he compel me to go to Texas, which would be as big a financial hardship to me as it is to Jack Arons?

    His answer was very enlightening. He said, “Generally speaking, the answer is no.  Generally speaking, a person being deposed cannot be forced to travel more than 100 miles for the process.”

    So, there you have it. Ning has said it isn’t going to respond to the subpoena. None of us on the subpoena other than Jack have personally been subpoenaed or sued at this point. We have no cause of action against Larry Friedman for our names being included in the subpoena. Those of us who have said nothing negative or untrue about Larry Friedman and/or Friedman and Feiger, have the best defense should he ever decide to come after us in an attempt to silence his critics and/or the entire internet.

    We have the facts, which often come from Larry Friedman himself, and in his own words, no less.

    However, there is another option for the Ning Nine. I was told there is no reason to refrain from making truthful reports to the appropriate bar associations and other public groups, such as Citizen Media Project about this entire matter, as has already been suggested in multiple online venues.

    As long as the information is truthful and the assertions can be proven and documented, there is no reason not to proceed. In my case, as well as several others of the Ning Nine, I have not posted anything false about Larry Friedman or his firm, or the methods he has employed regarding the ASDMBA. His own company emails have done the damage, both those from himself and his employee. And as one of the comments to my guest column says, I am not the only one to receive such threatening responses via email when a simple refund request was made.

    I did find one other interesting tidbit in my research. Larry Friedman’s biography on the Friedman and Feiger site says he is licensed to practice in Texas, Florida and Minnesota.  From what I found online today and confirmed by calling the Judiciary directly, this is not the case, at least in Minnesota. While he is a member of the Minnesota Bar, lawyer license #0032165, by virtue of having paid the fees on March 5, 2009, he is not authorized to practice here. The following information about his Minnesota status comes from this link:  http://www.courts.state.mn.us/mars/AttorneyDetail.aspx?id=0032165

    Sscreenshot reduced to fit within borders.
    Screen shot reduced to fit within borders.

    Since I was unfamiliar with the meanings of “Not authorized-Non-Resident” and “Involuntarily Restricted (by Court Order), I called the Bar office at 651-296-2254 and asked for clarification. I was told that the “Not Authorized-Non-Resident” is a choice the individual attorney makes, and is not mandatory simply because they are out of state.

    The “Involuntarily Restricted (By Court Order) is because of Larry Friedman’s CLE status. Since he has not reported his CLE (Continuing Legal Education) record to the Minnesota Judicial System, his license to practice was involuntarily put in a “non-authorized” or “on-hold” status. I find it very interesting that his biographical information on the Friedman and Feiger site says he is licensed to practice in Minnesota, when he is not, according to our State Judiciary. Licensed? Yes. Licensed to practice? No.

    The same information can be found by searching the Minnesota Courts Lawyers for Public Discipline site at http://www.mncourts.gov/lprb/SearchLawyer.aspx.

    So, I invite all of you to do your own checking with an attorney local to your area, to see if you get different answers than I did. For the present, there are no grounds on which the Ning Nine can sue Larry Friedman as he’s done nothing actionable.

    Ning isn’t going to respond to the subpoena request, according to Paul Levy, particularly since they don’t even gather all of the information included in the subpoena. What each person decides to do after talking to a local attorney regarding their personal interactions with Larry Friedman and/or his staff, is clearly up to them.

    But as the attorney I spoke with said, as long as you are being truthful and can substantiate and document the facts of what you say, you have the best defense against any defamation claim from anyone, including other attorneys, wherever they may reside. That would apply to any group of persons, such as the 300 ASDMBA members located in Florida, who may choose to take this further as a group, as well as it would to individuals.

  • St. Petersburg Times Wins Two Pulitzer Prizes Today

    The St. Petersburg Times, which has done some fine reporting on the AdSurfDaily case, today won two Pulitzer Prizes and was a finalist for a third.

    Our warm congratulations to this leading-edge newspaper and to Lane DeGregory, who won the Pulitzer for Feature Writing; the Times’ PolitiFact team, which won the Pulitzer for National Reporting; and John Barry, a Pulitzer Finalist in the Feature Writing category.

    These are extraordinary accomplishments. DeGregory won for her feature titled “Girl in the Window,” an incredible story about a child who had grown feral from a lack of nurturing.

    The PolitiFact team website won its Pulitizer for its efforts to separate fact from fiction during the 2008 Presidential election in the United States.

    Barry garnered his Finalist nod for “Winter’s tale,” the story of a dying baby dolphin.

    The Times was the first newspaper to report in January that ASD President Andy Bowdoin had given up his fight for tens of millions of dollars seized by the U.S. Secret Service in a raid last summer. It also was the first newspaper to report that that federal prosecutors had filed a second forfeiture complaint against assets tied to ASD. The second complaint was filed in December.

    Bowdoin now says that he is attempting to undo his January decision to submit to the forfeiture.

    The Times also was the first newspaper to interview victims of an Alabama securities scheme that led to Bowdoin’s arrest in the 1990s.

  • GUEST COLUMNIST: ‘Shocked’ And ‘Scared’ To See Her Name In Friedman Lawsuit Paperwork; Says She Was Told To ‘Examine Your Finances’; Sees Move By Dallas Lawyer As ‘Intimidation Tactic’ And Says She Won’t ‘Roll Over’

    UPDATED 3:45 P.M. EDT (U.S.A.)

    Editor’s Note: This is a guest column by Roxy Lewis, a self-described member of the “AARP generation.” Lewis was a member of ASD and the ASD Members Business Association. This column is in her own words. In the column, Lewis tells her story about various email interactions concerning her attempt to get a refund for her contribution to ASDMBA.

    THE IRONY OF INFORMATION TRANSFORMED
    INTO THREATS IN THE ARONS/FRIEDMAN CASE

    By Roxy Lewis

    When I saw my name in Exhibit A of the “Notice to Take Deposition” issued by Carter Boisvert to Jack Arons in the ongoing suit by Larry Friedman, I was frankly shocked at first and then scared. After all, I am a member of the AARP generation living in Minnesota, who never posted anything defamatory, slanderous or libelous about Larry Friedman or the legal firm. Yet here, buried in the middle of Larry Friedman’s suit against Jack, I found not only myself, but the names of 8 other users of the ASD-BIZ.NING.com forum. I was concerned, felt this was purely an intimidation tactic, and had no idea where to go next.

    However, I am not one to just roll over and play dead based on legal documentation from some unknown person in a remote location. One of the ironies in this subpoena is the request for information on the 8 of us. The subpoena states they are asking for:

    “Any and all documents regarding the following members of the “ASD Business Information Zone” social network site, located at the Internet web address http://asd-biz.ning.com, including but not limited to each member’s full name, address, telephone number, all e-mail addresses, all IP addresses and any other contact information within your possession, custody, or control.”

    Why is this ironic? Because in my case, Larry Friedman already had all of that information, and had it for months. In December 2008 I had an email exchange with Bob Guenther, who referred me to Larry Friedman, regarding a refund of my ASDMBA “contribution.” His final reply is noted below:

    “Roxy. I am not avoiding any issue. There is no issue. You are not our client and never have been. Your dispute, if any, is with the organization that you purportedly joined not with me or my firm. You did not hire my firm. You are not a client of my firm. We don’t even know who you are. The only mistake I made was being nice to you in the first place, and I won’t make it again. If you take any frivolous action against me or my law firm we will defend it vigorously and pursue all of our lawful remedies against you. We know exactly how to deal with people like you in the Texas courts. Do not contact me again. -Larry Friedman”

    It’s interesting to me that Mr. Friedman moved immediately to threat mode, “we know exactly how to deal with people like you in the Texas courts.” Given that I am a private citizen, not an attorney, not financially wealthy as Mr. Friedman and his firm are, this was definitely perceived by me as a threat directed specifically at me. I decided to bide my time and do some research as things unfolded.

    In March, I read that Larry Friedman’s firm had begun authorizing refunds. Laura Tripp was named as the contact person. I contacted her, restating my December request. I received a very nice reply, with the instructions and questions they required to be answered in order to obtain a refund. I found the last one particularly interesting: “Source of information for refund request” as it could be taken as asking “how did I learn about the fact that the firm was refunding monies.”

    I submitted my request and waited. The response from “Laura” was swift and as hostile and threatening as the December exchange with Larry Friedman, saying I would not be getting a refund. However, this time there was an added twist. This time “Laura” made disparaging remarks about the others on the ASD-Biz.ning.com board, the very thing Larry Friedman accuses Jack of doing! The tone moved from the pleasant information-giving exchange of earlier emails to what I perceived as a hostile threat as well:

    Ms. Lewis,

    This firm will not refund any money that was not paid directly to Friedman & Feiger. It has no obligation to do so. The money it has refunded has been strictly voluntary. The information you received from J. D. Sullivan a/k/a Wayne Tidderington a/k/a Bob Sterling is false and misleading. The statements that you have made are unsupportable. That is why Mr. Sullivan/Tidderington/Sterling does not make them himself, use his own name or file his own complaints. Mr. Friedman and the firm have recourse and will file suit against anyone who makes false, misleading or disparaging remarks against them or files a baseless complaint — as they have already. Rendering legal advice without a license is a crime in Texas; filing false complaints is actionable. The firm takes your threats very seriously and any complaint you file will be considered spurious and will be vigorously defended. Your should investigate Mr. Sullivan/Tidderington/Sterling’s background and history very carefully before you get involved with him or do his bidding. The last person he used for similar purposes got sued in Texas, after which he abandoned them and left them to fend for themselves with the problem he created. Ask Mr. Sullivan/Tidderington/Sterling what his real name and address is, what he does for a living, how many times he has been sued for interfering in other people’s businesses, what his wife’s real name is and where she works. If he will give you all of that information truthfully (which he won’t) you will know who you are really dealing with. Then you can determine for yourself who is leading you around. And, by the way, ask Mr. Sullivan/Tidderington/Sterling what his relationship is to Andy Bowdoin and what Mr. Sullivan/Tidderington/Sterling’s motives were to divert your attention from the  real cause of your concern. If you want all of your money back start looking for it under Mr. Sullivan/Tidderington/Sterling’s rock.

    Laura Tripp
    AR Manager
    Friedman & Feiger, LLP

    Just to be sure I had been clear, I sent one last email to “Laura” :

    Dear Ms. Tripp,

    Thank you for your reply.

    Please confirm for me that you (and Attorney Friedman) understand that his solicitation of funds to be sent to ASDMBA and mailed to Bob Guenther, still means he solicited them, received them and then did no service for them.  As such, if he will not reconsider and refund my $100.00 I will have no recourse other than to immediately file a complaint with the Texas Bar Association and advise others who have asked my opinion on the matter to do the same.

    Please reply by midnight on 4/7/09 CDT.  Thank you.

    Roxy Lewis

    “Her” reply was swift and again perceived as threatening:

    Ms Lewis

    You have my response.  I would strongly recommend that you consult with an attorney in Minnesota and stop getting your legal advice off the internet from non-attorney bloggers.  As stated, any baseless complaint filed with the Texas Bar will be vigourously defended by this law firm. Also, I might recommend that you examine your finances to be sure you have the means to defend yourself against any actions that may be brought against you as a result of your actions.

    That’s the second irony in this exchange. Clearly she had NO information about my December email exchange with Larry Friedman and assumed I was “getting my legal advice off the internet from non-attorney bloggers,” the same bloggers she disparaged in the prior email, rather than realizing this was a repeat request.  Still, this threat against my finances compared to those of “this firm” felt very much like a second threat against me.

    Those of you who have been following the case from Larry Friedman against Jack Arons know that many people believe, and have posted online in multiple forums, that this is really a first amendment, freedom of speech case. Considering that fact, I began to search for information on the internet regarding first amendment rights and came upon cyberslapp.org. I’d never heard of a “cyberslapp” before, but the definition on their home page was exactly what I was looking for:

    “A new form of lawsuit called a “CyberSLAPP” suit is threatening to overturn the promise of anonymous online speech and chill the freedom of expression that is central to the online world. CyberSLAPP cases typically involve a person who has posted anonymous criticisms of a corporation or public figure on the Internet. The target of the criticism then files a frivolous lawsuit just so they can issue a subpoena to the Web site or Internet Service Provider (ISP) involved, discover the identity of their anonymous critic, and intimidate or silence them.”

    Because I was named in the subpoena, I contacted them via their “contact us” link on the home page. This put me in touch with a Mr. Paul Levy. I told him of the subpoena and my name being there, along with 8 others. He advised that Ning, being located in California, would likely not respond to a Texas subpoena at all, but he would verify this with them. Yesterday he confirmed this is indeed the position [Ning] has taken, and authorized me to share this information. You can view the posting on the ASD-Biz.ning.com forum.

    So, to all of us named in that subpoena, it appears we don’t have much to worry about. Some of the online bloggers speculated early that this would be the case. Personally I needed a greater assurance than that, and the feedback from Ning to Mr. Levy gave me that assurance.

    I am still not convinced Larry Friedman or the Texas courts and Judges have any jurisdiction over those of us in other states, including the subject of the suit, Jack Arons of Florida. I am now more convinced than ever that we all need to be diligent in guarding our first amendment rights against those who would try to intimidate, threaten and silence us, no matter where they are located.

  • BREAKING NEWS: Judge Extends Time For Class Certification In RICO Lawsuit Against Bowdoin, Busby, Garner

    Andy Bowdoin
    Andy Bowdoin

    A federal judge has indefinitely extended the deadline for class-action certification in a racketeering lawsuit against AdSurfDaily President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby.

    The plaintiffs in the case — all former ASD members — asked for the time extension last week because they have not been able to serve Bowdoin, Garner or Busby. The original deadline was April 15.

    Judge Rosemary Collyer now will set the deadline during a scheduling conference once the defendants are served — or by issuing a future order. The case has been pending since Jan. 15.

    Why the plaintiffs have not been able to perfect service of the complaint is unclear.

    Plaintiffs include Mike Collins, Frank Greene and Natures Discount Inc.

    The RICO complaint alleged the defendants 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.”

    Collins, Greene and Natures Discount said they will seek discovery and try to get important questions answered about ASD, including questions about the interactions of ASD management and others.

    Here is a preliminary list of what the plaintiffs intend to seek through discovery:

    • Representations made regarding the individuals associated with ASD.
    • Nature of ASD’s business and the opportunity to earn money.
    • Types of services offered.
    • Management and operation of ASD.
    • The relationship and interaction among employees, officers and other representatives of ASD and BOA, Bowdoin, Busby and Garner.
    • Facts and circumstances surrounding the opening, maintenance and account activity of BOA accounts in the names of ASD, Bowdoin, Busby and/or Garner.

  • AdViewGlobal: More Insidious By The Hour

    AdViewGlobal (AVG), an autosurf with close ties to AdSurfDaily, is getting more insidious by the hour.

    An AVG forum set up by some of the Mods and members of ASD became a den of infighting among AVG members yesterday. One poster started a thread begging the Mods to intervene, which is to say the poster wanted the Mods to delete reasonable questions and criticism from other members about AVG’s operations.

    The Mods complied. The thread had been titled “Moderators…please moderate this private forum!!”

    At issue were slashed AVG payout rates after it had run a mind-boggling, 200-percent, matching bonus program for weeks — for both new members and their sponsors. AVG’s published payout rate yesterday was “only 0.056%,” according to posters.

    Some AVG members said they expected much higher payout rates. The mere fact that autosurfs promise or suggest a return, however, is problematic. Regulators view the surfs as sellers of unregistered securities disguised as advertising programs.

    The return is one of the central issues in the case against ASD — and has been the central issue in all previous autosurf prosecutions, including the CEP Ponzi scheme. The government long has been wise to the wink-nod nature of the business model and attempts by operators and promoters to sanitize it by drafting participants into a verbal conspiracy and scolding people for not using precise language to sustain the deception.

    ASD President Andy Bowdoin said he went through $800,000 in his bid to claim tens of millions of dollars seized by the government last August. Now, months later, Bowdoin still is facing litigation by the government on three fronts, and a racketeering lawsuit filed by ASD members seeking class-action status.

    Attempts to force autosurf participants to use specific phrasing — such as insisting the word “advertsing” be used instead of “investing” — are commonplace. The attempts alone show consciousness of guilt. The wink-nod nature further is exposed through deletions of posts that don’t adhere to the company line.

    Deletions often are defended as an attempt to keep the company discussions “positive.” Regardless, it’s easy to view them as bids to force everybody to lie in the name of the company, so the deception can continue. Virtually all autosurfs operate as Ponzi schemes.

    Also at issue at the AVG forum yesterday was a pattern of confusing information from the company.

    AVG announced the sudden resignation of Chief Executive Officer Gary Talbert March 20; Talbert is a former ASD executive. On March 23, the surf announced its bank account had been suspended. Problems with eWalletPlus.com, a money-exchanger, followed. One AVG member now says the company was using a U.S. bank, despite promoting itself as an “offshore” opportunity.

    Banking problems led to the demise of ASD.

    In late March, Shad Foss, an autosurf promoter against whom the receiver in the CEP Ponzi scheme case sought to claw back ill-gotten gains, sent an email to promote AVG. The email advised prospects that $5,000 in AVG would turn into $15,000 “instantly!”

    ASD once advertised that it accepted CEP Trust, the failed payment processor run by the operators of the CEP Ponzi scheme.

    On Tuesday, two payment processors used by AVG — SolidTrustPay of Canada and StrictPay of Panama — were offline for hours. Both surfs simultaneously were experiencing the same problem: the inability to load secure pages. Why the problem was occurring is unclear.

    What is clear is that such disruptions demonstrate just how vulnerable surfs are to unexpected events. AVG is behaving like an operation starved for cash. It is having management, banking and payment-processing problems simultaneously — while still running bonus promotions.

    AVG is getting more insidious by the hour.

  • Madoff Makes It Big-Time: Topps Co. To Feature Imprisoned Schemer In Special Series Of ‘Hoodwinks’ Trading Cards

    Bernard Madoff
    Bernard Madoff. (This is not from the Topps' series.)

    At one point in his career, Bernard Madoff largely was unknown outside of financial circles. His infamous Ponzi scheme changed all of that, but Madoff’s infamy may soar to new heights in June, with the release of a series of trading cards from Topps Co. Inc. of New York.

    Charles Ponzi  — the namesake of the Ponzi scheme — will accompany Madoff in the series.

    Topps has a history of following the popular culture.

    Beginning in June, its Allen & Ginter brand will include an insert that features the “world’s biggest hoaxes, hoodwinks and bamboozles,” the company said.

    All in all, the series will feature “20 perpetrators of some of the most notorious pranks, dubious claims, and outright frauds of the last two centuries,”  Topps said.

    Enron, D.B. Cooper and The Run Away Bride also will be featured. The cards will be found in one out of every 12 packs, the company said.

    “Topps has a long and detailed history of chronicling pop culture through trading cards. From President Kennedy and Man on the Moon cards to Jesse James and Jack the Ripper, newsworthy events have been captured through Topps’ trading cards since 1950,” the company said.

    The company had the idea for its “world’s biggest hoaxes, hoodwinks and bamboozles” series before the Madoff scandal, Topps said.

  • BREAKING NEWS: Judge Grants Motion By Bowdoin’s Paid Counsel To Withdraw From AdSurfDaily Forfeiture Case

    Judge Rosemary Collyer has granted a motion by Jonathan Goodman and Michael Fayad of Akerman Senterfitt to withdraw as counsel for ASD President Andy Bowdoin.

    The firm also was granted leave to withdraw as counsel in the civil-forfeiture case against tens of millions of dollars and real-estate tied to ASD amid allegations of wire fraud, money-laundering and operating a Ponzi scheme.

    Goodman and Fayad filed the withdrawal motion April 2, saying they no longer could represent Bowdoin, AdSurfDaily Inc. and  Bowdoin/Harris Enterprises Inc. effectively.

    In asking for leave to withdraw, the attorneys said their representation of Bowdoin had become “unreasonably difficult.”

    “After this Court denied Claimant’s Emergency Motion for Return of Seized Funds [on Nov. 19, 2008], the client-lawyer relationship between the Firm and all three Claimants substantially deteriorated and has not improved thus rendering the representation unreasonably difficult,” the lawyers said.

    The lawyers said the firm could not discuss specific issues, owing to the attorney-client privilege.

    “Given the attorney-client privilege, the Akerman Senterfitt law firm cannot disclose the
    specific issues underlying the problems with the client-lawyer relationship,” the firm said.

    “However, without breaching the attorney-client relationship, and based on documents which Mr. Bowdoin publicly filed with the clerk’s office, it is obvious that Claimants have decided to represent themselves without consulting their counsel,” the firm continued.

    “By way of example only, Mr. Bowdoin has recently filed, on a pro se basis, a series of motions. Mr. Bowdoin filed these motions without consulting with counsel and without bothering to advise counsel that he would be submitting motions on his own. Under these circumstances, the Akerman Senterfitt Law Firm cannot render effective assistance of counsel.”

    Charles A. Murray, a Florida attorney with privileges in the District of Columbia, filed an appearance notice on behalf of Bowdoin and his corporations last week. Collyer had informed Bowdoin, through Akerman Senterfitt, that the corporate entities could not proceed pro se.

    Bowdoin began to file pro se motions in February, saying he had fired Akerman Senterfitt. At the same time, AdViewGlobal, an autosurf with close ASD ties, introduced members to Pro Advocate Group, which says it can help people practice law without a license.

    In one of Bowdoin’s pro se pleadings, he acknowledged ASD was operating illegally at the time of the seizure, potentially adding to his problems and creating problems for ASD insiders and top promoters.

  • News And Notes For April 15

    UPDATED 2 P.M. EDT (U.S.A)

    Here is a summary of items in the news:

    Filings expected in AdSurfDaily civil forfeiture case. Judge Rosemary Collyer earlier gave prosecutors until April 24 to respond to some of ASD President Andy Bowdoin’s pro se pleadings. Prosecutors have responded to some of them, but not all of them.

    Collyer may have to issue additional orders on matters concerning Bowdoin’s representation. His paid counsel, Akerman and Senterfitt, asked the court to withdraw. Collyer, to date, has not granted the request. (Updated 2 P.M. EDT (USA) Judge Collyer has granted the request.)

    Meanwhile, attorney Charles A. Murray has filed an appearance notice on Bowdoin’s behalf.

    In a separate lawsuit by former ASD members against Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby, Collyer has not issued an order in response to a motion by the plaintiffs to extend the deadline for class-action certification. The motion was filed April 8. The lawsuit accuses Bowdoin, Garner and Busby of racketeering, and the plaintiffs say they have not been able to serve the lawsuit on the trio. The lawsuit has been pending since January 15.

    Also in limbo is a second forfeiture case filed in December by prosecutors against assets tied to ASD. The property named in the forfeiture complaint includes the Tallahassee home of Bowdoin’s stepson, George Harris, a trustee in AdViewGlobal (AVG). Three automobiles, marine equipment and computer equipment also were named in the complaint.

    How the December case will proceed is unclear. No attorney has entered an appearance notice on behalf of Bowdoin, a Bowdoin family member or any person who could make a claim to the property. Bowdoin filed a pro se pleading that referenced the December case, but the filing was entered into the record of the August case.

    Larry Friedman lawsuit against Jack Arons. Dallas attorney Friedman is suing Florida resident Arons for slander and libel. Friedman has sought an order to gag Arons; Arons continues to post on the Internet about the case, saying Friedman is burying him in an avalanche of paperwork.

    The case sprouted from the affairs of the ASD Members Business Association (ASDMBA) Trust. Friedman is the attorney for the Trust. He is seeking information on the identities of posters at the ASD-Biz forum through ning.com, the forum hosting company. Some of the posters appear to have changed their forum identities to protest Friedman’s move.

    Yesterday a new website appeared. It is called, “Drop the Lawsuit, Larry: How can you sue the entire internet and violate Free Speech?” Friedman also is getting bad press on other forums.

    Bob Guenther harassment case. Guenther, de facto head of the ASDMBA Trust, was scheduled to make a court appearance yesterday in Arizona on felony charges of continuing to harass an Arizona company after being warned not to do so. A docket entry in the case now says the appearance has been rescheduled for May 12. Guenther has two more court appearances scheduled in Arizona this month for other cases: April 27 and April 29.

    One of the Arizona cases is a photo-radar traffic case. Guenther, in a Blog Comment here, said he was not behind the wheel and would handle the matter by writing a letter. The second case was a misdemeanor case.

    Guenther, in a Comment here, described it as “a duplucate filing of the other two ‘bogus’ filings scheduled to be heard on April 14.. All will be tossed, just like the one before..”

  • Affinity Fraud Cases In New York And California Fleece Investors Of $35 Million, SEC Says; Ordained Minister Charged In New York Scheme Targeting Elderly Parishioners

    Eight people have been charged in unrelated affinity-fraud cases in New York and California that bilked investors out of $35 million, the SEC said.

    In the New York case, seven members of a Queens church were charged, including a minister. The scheme targeted “mostly elderly” members of the church, fleecing them of $12 million, the SEC said.

    The California case resulted in charges against a woman who coupled affinity fraud with a Ponzi scheme to fleece investors of $23 million, the SEC said. The scheme targeted members of the Hispanic-American community.

    Charged in New York were Isaac I. Ovid, 28, an ordained minister in the church and a citizen and resident of Trinidad & Tobago; Aaron Riddle, 34, of Narvon, Pa.; Bob Riddle, 59, the father of Aaron Riddle and a resident of New Holland, Pa.; J. Jonathan Coleman, 40, of Astoria, N.Y.; Stephen Cina, 32, of Westbury, N.Y.; Cory A. Martin, 31,of Westbury, N.Y.; and Timothy Smith, 35, of Ephrata, Pa.

    Also charged in New York were Jadis Capital Inc., Jadis Investments LLC and Logos Multi-Strategy Hedge Fund I LP.

    Charged in California were Clelia A. Flores and Maximum Return Investments Inc. (MRI) of El Segundo.

    “As we allege in our complaint, Flores violated the trust of her own community by falsely promising high returns and no risk,” said Rosalind R. Tyson, director of the SEC’s Los Angeles Regional Office. “When she couldn’t deliver, she resorted to paying off early investors with money from unsuspecting newcomers.”

    Flores misappropriated investors’ funds to pay her personal expenses “and finance a lavish party for MRI to celebrate the company’s alleged financial success,” the SEC said. About 150 investors from seven states were affected by the scheme, which began in late 2006.

    Meanwhile, the defendants in the New York case bought expensive watches and a luxury Bentley automobile with investor funds, the SEC said.

    Robert Khuzami, director of the SEC’s Division of Enforcement, didn’t mince words when describing the New York scheme.

    “Affinity fraud is a particularly sinister scam that exploits investors in close-knit communities,” he said. “The SEC has recently brought enforcement actions against fraudsters who have deceived members of the deaf community, religious groups, and various minority groups. Today’s action is especially egregious, as church leaders targeted their own parishioners and betrayed the sincere trust placed in them.”