In the movie “The Sting,” accomplice J.J. Singleton read from a surplus tickertape wire into a microphone to create the impression that horse races that already were over were being run live on the radio.
J.J.’s bogus radio calls from the back room helped Henry Gondorff and Johnny Hooker fleece Doyle Lonnegan of $500,000 in an elaborate scheme.
The movie won seven Oscars.
The Securities and Exchange Commission now says Bernard Madoff had a back room of his own — and that Frank DiPascali made sure it was staffed in an elaborate bid to sustain the world’s largest Ponzi scheme should customers or regulators ever drop by unexpectedly.
“Madoff and DiPascali even went so far as to develop a phantom computer trading platform that would appear to reflect real trading,” the SEC said. “In the event of a surprise visit from outsiders requesting to observe real-time trading activity, one BMIS employee was to enter trades on a computer screen and another employee was to go into an office nearby and play the role of a counterparty trader in Europe.”
The SEC filed numerous civil charges for securities fraud against DiPascali, Madoff’s chief financial officer, yesterday.
And DiPascali, 52, pleaded guilty yesterday in New York to numerous criminal charges brought in a separate complaint by the FBI, the IRS and other agencies. He faces up to 125 years in prison.
DiPascali pleased guilty to conspiracy, securities fraud, investment adviser fraud, falsifying records of a broker-dealer, falsifying records of an investment adviser, mail fraud, wire fraud, international money laundering, perjury and attempting to evade federal income taxes.
Unlike Gondorff, Hooker, Singleton and other fictional characters in “The Sting,” it did not pay in the end to be an accomplice of Madoff, prosecutors said.
“[DiPascali] also subject to mandatory restitution and faces criminal fines up to twice the gross gain or loss derived from the offense,” prosecutors said. “Additionally, the criminal information to which DiPascali pleaded guilty includes forfeiture allegations that would require DiPascali to forfeit the proceeds of the charged crimes, as well as all property involved in the money laundering offenses and all property traceable to such property.”
In the SEC case, the agency said DiPascali “helped generate bogus annual returns of 10 to 17 percent by fabricating backdated and fictitious trades that never occurred.”
To sustain the deception, which dated back to the 1980s, “DiPascali helped Madoff cover up the fraud by preparing fake trade blotters, stock records, customer confirmations, Depository Trust Corporation (DTC) reports and other phantom books and records to substantiate the non-existent trading.”
Not a single share of Vana Blue’s penny stock has traded hands since July 30, a period of seven full trading days, according to Yahoo Finance. In news releases, Vana Blue identified itself as the owner of eWalletPlus, a payment processor later linked to the AdViewGlobal (AVG) autosurf.
Vana Blue, which used mailing services in Phoenix and Las Vegas as its address, is a registered corporation in Nevada. Its website now resolves to a server that beams ads from GoDaddy.com, but until recently resolved to a server from which the company told its story.
The company has claimed to own a company that variously has been described as TMS Corp. and TMS Association, which purportedly developed eWalletPlus. In January, Vana Blue also claimed to own a company that variously has been described as Karveck Corp. or Karveck International, a purported advertising and media company.
In February, Vana Blue reported that Karveck had posted $1.8 million in revenue in January — the month AVG was in prelaunch.
Among other things, Vana Blue also had said it signed an agreement with a company known as Native Express Inc. “to develop oil and gas resources” in Utah. Vana Blue also has said it had an agreement with a firm in Jamaica known as Internet Mobile & Caribbean Network Ltd. to “facilitate the sales of the Compass Pre Paid debit card throughout Jamaica and the Caribbean.”
Meanwhile, Vana Blue also has said it had an agreement with a company known as Net Auction Plus, an eBay alternative, “to provide online, affordable, and flexible payment services.” The NetAuctionPlus.com domain name is registered to Michael Austin and uses the same Phoenix mail-service address as Vana Blue.
The NetAuctionPlus.com domain throws a server error. Austin’s name was mentioned in an announcement last week by AVG that it had reported a theft of $2.7 million to unspecified law enforcement agencies. AVG, which purports to be headquartered in Uruguay, did not explain when the alleged theft occurred and did not provide details.
Austin’s name also has been associated with eWalletPlus, but is only one of several names associated with the payment processor and money-services business. AVG promoters have claimed that eWalletPlus was AVG’s in-house payment processor. At one time, the eWalletPlus domain resolved to the same server in Panama that hosted AVG, but the domain now resolves to a parked page and appears to be offered for sale on sedo.com.
In a purported public filing dated March 31, Vana Blue identified its officers as Donald Rex Gay, Leonard Capelli and Michael Reis, saying it owned TMS Corp and Karveck International.
Only days later, a man associated with both the AdSurfDaily and AVG autosurfs — Gary Talbert — registered an entity known as TMS Corp. USA LLC, according to records. Talbert’s U.S. registrations occurred within days of a March 20 announcement by AVG that he had resigned as its chief executive officer and a March 23 announcement that AVG’s bank account had been suspended because too many members had wired transactions in excess of $9,500.
TMS Corp. USA LLC is registered in Nevada, and lists Gary D. Talbert of 2601 E Thomas Rd, Ste 220-A Phoenix, AZ 85016, as its manager. A company by the same name also is listed as a foreign LLC in Arizona, with Gary D. Talbert of 13. S. Calhoun Street, P.O. Box 109, Quincy, FL 32351, as its manager.
The S. Calhoun Street building address is the same address AdSurfDaily Inc. used.
In a forfeiture complaint against ASD last year that alleged wire fraud, money-laundering, the sale of unregistered securities and a Ponzi scheme, federal prosecutors said the building address was bogus.
One of the officers of Vana Blue is named a defendant in a counterclaim by the U.S. government that alleges more than $252,000 in federal income tax is unpaid. The same individual — Donald Rex Gay — is listed in Louisiana records as a person who has been involved in a number of businesses.
Gay denied in pro se court filings that he owed the taxes.
Records in Illinois note that Michael Reis, also listed by Vana Blue as an officer, was ordered in 2000 to cease and desist from the practice of public accounting without a license.
A federal judge has granted a motion by Bank of America to stay a case in which it was alleged to have aided and abetted racketeers operating a Ponzi scheme from a former flower shop in Quincy, Fla.
The bank was not named a RICO defendant in the lawsuit, which was filed by members of AdSurfDaily Inc. Rather, the bank was alleged to have aided and abetted RICO defendants Andy Bowdoin, Robert Garner and unnamed others in a fraudulent scheme.
“The Bank has shown good cause for a stay,” U.S. District Judge Rosemary Collyer said in an order late today.
“First, distribution of funds in the civil forfeiture case may moot at least a portion of Plaintiffs’ claims for monetary recovery here,” Collyer said. “Second, in the civil forfeiture case the government has seized numerous documents that are necessary for discovery in this matter.”
Among other things, Bank of America argued that some people made money in ASD and that the government is sifting through records and has a plan to provide restitution to victims of the alleged ASD scheme.
Collyer’s order stayed the RICO case indefinitely. A separate case against assets tied to AdSurfDaily filed by the government is proceeding on a separate track.
It was a busy day for Collyer. First, the judge ordered Andy Bowdoin, AdSurfDaily Inc. and Bowdoin/Harris Enterprises Inc. to show cause by Aug. 7 why a series of motions filed by Bowdoin as a pro se litigant should not be denied.
Collyer noted in the order that Charles A. Murray, a paid attorney Bowdoin had hired after Bowdoin was advised months ago that a corporation could not proceed pro se, has not followed up on initial pleadings.
Neither Bowdoin nor Murray has followed up since May, Collyer noted. Bowdoin initially submitted to the forfeiture, formally asking the court for permission to do so in January and saying he would not open a new challenge for the money. Collyer granted Bowdoin’s request.
About five weeks later, however, Bowdoin said he’d changed his mind about submitting to the forfeiture and began to file as a pro se litigant. In a letter published on the Pro-ASD Surf’s Up forum, Bowdoin blamed his initial group of lawyers for ineffective counsel, saying a “group” of members who had reviewed his case had recommended a different approach.
Bowdoin proceeded as his own attorney, signing his first pro se pleading Feb. 25. At the same time, the AdViewGlobal (AVG) autosurf — which has close Bowdoin family, membership and promoters’ ties — said it was transitioning into a “private association.”
Also today, Collyer issued an order that formalized the forfeiture of more than $14 million from Golden Panda Ad Builder, a firm associated with Clarence Busby. At one time, Busby was a RICO defendant in the lawsuit filed by the ASD members, but the plaintiffs dismissed the case against him.
In court filings, Busby said Bowdoin unexpectedly asked him to form Golden Panda Ad Builder during a fishing outing on a Georgia lake in April 2008. In only weeks of operation — including prelaunch — Golden Panda rocketed to nearly 20,000 members.
Just prior to the formal July launch of Golden Panda, members became aware that Busby had been implicated by the SEC in three prime-bank schemes that promised enormous returns during the 1990s. During the same time period, Bowdoin announced that he was too busy with ASD to serve as president of Golden Panda, saying Busby was uniquely in charge of Golden Panda’s operations.
I was four years old and wide-eyed, perhaps especially if snow was falling. Almost nothing was better than snow in my early years, and I whined until I was permitted to go outside and roll in it. I made no calculation about whether it was deep enough to roll in without getting muddy. Besides, what difference did a little mud make? Even a small accumulation of snow was a powerful, powerful magnet.
The magnet and all that whining finally drew me outside. I was doing what I did when my mother appeared on the front porch to call me back inside. She was crying. Even at four I knew something was wrong. Moms don’t cry unless there is a good reason.
The date was Nov. 22, 1963. It was the day I came to know that Walter Cronkite was a very important man and that there were other important men on two other channels.
President Kennedy had just been assassinated in Dallas, which I assumed was a faraway place. It was the first time I’d ever heard the word assassinated. At four, I knew that Kennedy was the president; I didn’t know what it meant for certain, but I knew that he was sort of like the maximum boss and always was to be treated with the utmost respect. My Grandma was there. She was crying, too.
We watched TV pretty much for a week straight. I remember John-John, a boy even younger than I. And I remember the horses at the funeral. I was scared they might take off and ruin things. Horses do that sometimes, but they did not on this occasion.
Walter Cronkite later took me to the moon; the 40th anniversary of man as an extraterrestrial is Monday. Walter couldn’t believe it in 1969. Neither could I. I’m 50 now, and I’m still blown away by it. I never look at the moon without thinking people actually have been up there. Those same people are part of a species that ferried itself on foot, boat or horseback only decades earlier and made it possible for me to publish a Blog accessible virtually worldwide only decades later.
Cronkite and President Kennedy. Cronkite and the moon.
Next came Cronkite and Watergate — at least in terms of what is seared in my mind. Truth is, though, Walter is tied to history in so many ways that a person of a certain age group can pick and choose from many, many moments. Walter and Martin Luther King, for example. Walter and Vietnam. Walter and World War II. Walter and the Russians.
Walter and Ted Baxter.
Walter, associated with serious events, had a sense of humor.
The President of the United States dropped everything he was doing last night and issued a special statement on the life and the passing of Walter Cronkite.
An American treasure: Walter Cronkite. Nov. 4, 1916-July 17, 2009.
It sounds impossible, but could the buyer of a flagship business publication with a circulation of more than 900,000 pay only $1?
Business Week magazine could net McGraw-Hill only eight bits, according to The Financial Times.
Business publishing is in steep decline, and print publishing in general is suffering. Prominent titles are paring back or ceasing to exist as print ventures. They have the value of their brands and loyal, core audiences, but are expensive to produce. Many publications have cut staff amid both revenue and circulation declines, and yet the public’s need for news it can use has not gone away.
What has gone away is the advertising dollar. Print publications, in particular, have lost their appeal as the conduits through which advertisers reach their audience. The advertisers themselves have their own websites and brand identities — and, in some cases, their own financial problems.
Advertisers are riding out the same recession that has affected the global community of readers and viewers. You aren’t spending as much money with them, and they aren’t communicating with you as often, perhaps particularly through traditional channels.
Magazine and newspaper readers (consumers) no longer have to wait for the morning paper or the weekly or monthly print review of what essentially is old news to find out about what’s on sale or what company has the best deal or most appealing product or presentation. A reader (consumer) can go straight to the websites of Staples or Best Buy or the stock report or specialty retailer whenever the spirit moves him.
Print’s battle to survive largely is a battle for relevance. The audience still loves the stories and the insights only professional publishers can deliver, but would rather get its news online. There simply is no need to wait for the morning paper or the weekly newsmagazine. It’s far easier to visit a website that offers news you can use and includes a link to information from advertisers you can use.
Business publishing got hit earlier and harder than others forms of print media. The print recession basically is in its fourth year. The decline affecting the general economy is a relative baby at about two years old. What happened in print in 2005 — especially business print — was an indicator of what would happen later in the general economy.
Unemployment in the United States has more than doubled in 16 months. The bleeding in print started long before that.
So, today, we’ll again pose the question we posed months ago: Why haven’t the print publishers with famous brands, massive audiences and sparkling editorial content turned to the autosurf business model to save themselves?
Why haven’t the print brands that have equally famous website brands and millions of daily visitors turned to the surf model and started paying employees in “ad packs,” while passing off the cost off surfing redemptions to people who are told they can surf their way to riches?
It’s because the surf model is the province of hacks and pretenders and even criminals, some of whom will try to persuade you otherwise because the real product they are selling is not advertising; it is a Ponzi scheme. Most of them don’t even bother to create any type of editorial content. They know people will pay to play, with the insiders gorging themselves on illegal profits while sustaining the whole thing with a core deception, 80/20 programs, money-laundering and wire-fraud partners and a disclaimer that “rebates aren’t guaranteed.”
Here is how one AdSurfDaily promoter relying on corporate GIGO put it in February 2008:
“They have a former SEC attorney on staff as General Counsel. They are not a traditional Autosurf, they are an Advertising Company. They just added over 90 advertisers to increase revenue back to it’s members. Some of the advertisers include: Nike, Omaha Steaks, Petco, Starbucks, Delta airlines — just to name a few.”
Federal prosecutors seized tens of millions of dollars six months later.
“Ponzi scheme,” they said.
Business Week might end up selling itself for $1, but its soul will be intact upon the completed sale. It survived the Great Depression and economic downturns, and it figured out new ways to compete with the changing times and changing habits.
But a typo in a June 1 news release by AdViewGlobal (AVG) directed traffic away from a new website the firm was showcasing and caused it to land on a site registered in Europe.
The domain — adveiwglobal.com, in which the “e” and “i” are transposed — is registered in the Czech Republic. The Czech site, which appears to redirect to Los Angeles, is a search portal with advertisements for making money at home. It was registered in March.
None of the content on the site appears to be related to AVG, which defines itself as a professional advertising and communications firm based in Uruguay.
AVG’s news release was issued through PR Newswire. The correct URL for AVG appears near the top of the release, but the transposed URL appears at the bottom. Some media outlets republished the news release and provided clickable links.
Any person who reads the news release from top to bottom and clicks on the link at the bottom is taken to the Czech site.
Here is an example of a site from which viewers who click on the bottom link are taken to the Czech site.
Some sites that republished the AVG news release did not provide clickable links — either in the top position or the bottom. Had visitors copied and pasted the URL near the top of the news release into their browser window, they would have arrived at the site AVG was showcasing. Visitors who copied and pasted the lower URL would have arrived at the Czech site.
It sometimes is a strategy to misspell words in web-based content to gain a search-engine advantage, although deliberately misspelling a URL and directing traffic away from a website launch promotion would not seem prudent. It is unclear if the typo that appeared in the June 1 news release was a deliberate mistake on AVG’s part or just a plain, old-fashioned typo.
It is possible that the Czech site hopes to gain visits from people who misspell the adviewglobal domain name. The practice is controversial — and potentially brings trademark issues into play — because it enables a site that may have no connection to a brand to leach traffic from the brand by registering a domain name that approximates the branded domain.
Whether adviewglobal.com is aware of adveiwglobal.com is unclear.
What is clear is that the Czech site could have benefited from the typo, whether it was deliberate or accidental. Visitors who landed on the page expecting to see a dynamic web portal of the sort AVG described in the news release could have been confused. Such visitors would have to take additional steps — such as returning to the news release and looking for the appropriate link or discovering for themselves that a typo had occurred, and then typing the correct URL into their browser windows — in order to visit the AVG site.
UPDATED 3:30 P.M. EDT (U.S.A.) It was utterly predictable: The AdViewGlobal (AVG) autosurf has blamed subcontractor Syndicate Digital for problems plaguing the firm, implying it might sue the Canada-based company.
In recent weeks, AVG has threatened to sue media outlets and even its own members, up to and including contacting their Internet Service Providers in a pathetic bid to mute criticism.
AVG’s record of blaming participants in the enterprise for its problems and accepting no accountability is rivaled only by AdSurfDaily. Syndicate Digital accepted work from AVG at great risk — and not simply a legal one: One of the biggest risks was that AVG would find a way to blame it for problems AVG itself created.
That’s what Bowdoin/Harris enterprises do: If Bowdoin-led ASD gets in a pickle and can’t pay out as advertised, he blames Russian “hackers” and script problems and changes the website’s name so he can fleece a new crop of victims — all while he is using a fraudulent address to donate money to the National Republican Congressional Committee in ASD’s name while telling members ASD has no money.
If the enterprise comes under fire by the government, he blames the government. When the enterprise gets stifled in bids to fight the government, he blames his paid attorneys and declares them incompetent. He then accepts advice from one or more felons and starts filing pro se pleadings, and when a federal judge tells him that a corporate entity can’t proceed pro se, he goes out and finds another paid attorney.
When Bowdoin got sued and nearly jailed in Alabama a decade ago for another securities scheme, it was somebody else’s fault.
AVG does the same thing. The surf announced in March that its bank account had been suspended. In the very first sentence of its announcement, it blamed members, saying they had wired too many transactions in excess of $9,500.
In May, after it announced it had secured a new wire facility and published wiring instructions and account numbers, a company AVG identified as a facilitator in the transfers issued a denial that it had any business relationship with AVG. The company issuing the denial explained that it had discussed business with a Florida-based firm, and announced that it believed it had been targeted in a scam.
The Florida-based firm was owned by an AVG insider. The clear implication was that AVG, which purports to be headquartered in Uruguay, had attempted to create a back-door route to funnel money to itself by using the banking connections of the Florida firm.
AVG ignored the denial by the company. Instead AVG blamed a breakdown in negotiations for the sudden removal of a wire facility it had just advertised and for which it had just provided detailed usage instructions.
Now AVG is saying negotiations with Syndicate Digital have broken down, implying it might sue for nonperformace.
“Negotiations between the owners of AVGA and Syndicate Digital broke down Thursday afternoon,” AVG told members.
“Syndicate Digital was a sub contractor hired to do a specific job and there is some dispute as to whether or not they have completed their contract with AVGA,” the company said.
Good grief.
Syndicate Digital entered the lion’s den when it accepted AVG business. Lions within the den now are circling to devour a subcontractor who used poor judgment and did not ask the right questions, and it just so happens the Lions-In-Chief are George and Judy Harris, members of the Bowdoin family and one-half of the Bowdoin/Harris brand.
This is a new low, perhaps an all-time new low. Donna Rougeau of Syndicate Digital should not have accepted work for AVG, and she should not have permitted her brand to become associated with AVG. Syndicate Digital and AVG became almost indistinguishable, and Rougeau was serving up the GIGO slop.
But Rougeau did not cause the core rot that is AVG and now is being served up as the fall guy by people who call themselves Christians. It was, sadly, utterly predictable.
Perhaps equally predictable was that AVG’s Syndicate Digital announcement would go missing — and it has, according to a reader.
UPDATED 11:22 A.M. EDT (U.S.A.): An affiliate spammer entered PonziNews.com yesterday, leaving what was described as “my friends” (sic) affiliate link for AdViewGlobal (AVG) and an advertisement for AVG.
Seven minutes later, the same affiliate spammer left another ad for AVG, claiming that “I just watched as 2, yes 2 Attorney’s (sic) from D.C. decided that they wanted to advertise on the site, and be a member of the VIP program.”
Affiliate spam is a back-door way of gaining signups for a program or service. One form of affiliate spam is to monitor websites that publish criticism of an “opportunity” favored by the spammer and then post affiliate links as part of the defense of the opportunity.
It is possible (and easy) to defend an opportunity without leaving an affiliate link, thus taking any issue of spamming totally out of play. The affiliate spammer who claimed it was a friend’s AVG link yesterday used the username of “Jeffrey,” and the link resolved to the sign-up page of an AVG promoter who used the same name.
It was not clear if the affiliate spammer also was the AVG promoter “Jeffrey.”
Software employed by Ponzi News captured the affiliate spam. It was not published. A screen shot of the spam was made and reduced in size to fit within the borders of this Blog.
AVG enthusiast sends back-to-back spams, claiming Best Buy, Staples and other prominent companies are AVG advertisers.
The spammer declared that Best Buy, Staples, GoDaddy.com and Delta Air Lines were AVG advertisers. The affiliate link used the identifier 7916, and an email address left by the spammer suggested he was associated with a company known as GuardIt Technologies.
Although the email address used the GuardIt name, it was not tied to the GuardIt server. Rather, it was tied to a server at a free email-hosting company, so the address could have been used without the authority of GuardIt.
AVG, also known as AVGA, publishes an antispam policy:
“If you are found to have spammed, without warning, AVGLOBAL ASSOCIATION reserves the right to disable or terminate your account immediately,” the company said on its website.
“All funds will be forfeited. AVGLOBAL ASSOCIATION may impose a penalty for each spam policy violation. AVGLOBAL ASSOCIATION also reserves the right to determine what violates this policy, in which case, any violation that occurs will result in account termination without refund of any monies,” AVG said.
A website associated with Mark Simmons, whom AdSurfDaily intended to call as a witness at a Sept. 30-Oct. 1 evidentiary hearing in Washington, D.C., promotes both AVG and GuardIt. Simmons was sequestered at the hearing, but never took the stand.
Federal prosecutors say ASD engaged in wire-fraud, money-laundering and the sale of unregistered securities while operating a Ponzi scheme.
On Nov. 19, a federal judge ruled that ASD had not demonstrated at the evidentiary hearing that it was operating legally and not a Ponzi scheme. Within days of the ruling, ASD stop using its own Breaking News website, instead giving the Pro-ASD Surf’s Up forum its official endorsement as an ASD news outlet.
In December, prelaunch buzz began to appear online for AVG, and the surf formally launched in February. At least two forums that use ning.com as a host sprouted up to promote AVG.
Some of the Mods and members of Surf’s Up manage one of the forums, and Simmons started the second forum. One Simmons’ thread pitches members on a technology provided by a website known as ErasableEmail.com, which purportedly permits users to send email and video that “self-destructs” and cannot be forwarded or saved.
Simmons said the product was endorsed by “the better hobo bureau” — a play-on-words of the name of his ning.com forum: The Unemployable Hobo Lifestyle Forum.
Erasable email and video technology can be abused. A promoter for an illicit program, for example, could make false claims about a product or service and then erase the claims so they could not be forwarded to law enforcement.
The legal community has been debating the utility of erasable email for years, wondering aloud if it can be used to thwart the discovery process in litigation and to erase evidence of crimes and misconduct.
EDITOR’S NOTE: There are plenty of reasons to avoid the AdViewGlobal (AVG) autosurf, not the least of which is that the government views the autosurf business model as foundationally corrupt. Autosurf operators and promoters are subject to prosecution under federal securities, wire-fraud, mail-fraud, money-laundering and racketeering statutes, and the surfs typically operate as Ponzi schemes. They also are subject to prosecution under state laws.
Readers should not infer that numbered items in the Top 5 list below are ranked in order of importance. Some of the information below is being published for the first time today.
1. AVG may be operating as a “ghost” enterprise. Research suggests that AVG, which purports to be headquartered offshore, may be using at least one U.S.-based company to funnel money to itself through complex wire transfers. The owner of the company filed a corporate bankruptcy petition in 2004 for a separate company he owned. In 2005, the owner filed a personal bankruptcy petition, listing nearly $1.4 million in liabilities and only $3,500 in assets.
The 2005 bankruptcy petition listed the owner’s address as an apartment, specifically using the abbreviation “Apt.” The apartment address, however, appears to have been the address of a UPS Store that once operated as a Mailboxes Etc.
A former business partner of the owner committed suicide in 2002, after members sued the former partner amid concerns that a large sum of money was missing from a co-op venture. Prior to taking his own life, the man made inquiries about banking in Switzerland and the Caribbean, according to court filings.
One of the key selling points of AVG is its purported offshore location. The company claims to be headquartered in Uruguay. Its servers resolve to Panama. Regardless, the company has used “gmail” addresses from U.S. based Google to communicate with members and perform certain customer-service functions.
A company with ties to AdViewGlobal uses the address of this U.S. office building.
Research suggests a company with which AVG has a close association is headquartered in a modern office building in the United States. The building was constructed in 2003. Office functions and conferencing can be rented by the hour. Two large airports are nearby, and a major Interstate highway is situated one mile from the building.
We are declining to publish the address of the building or identify its specific geographic location. We have confirmed through public records and other sources, however, that the company lists an address at the building, that the business has made inquiries about international wire transfers and that two international financial-services companies have established a tie to AVG and blocked wire transactions because of the AVG tie.
2. Two forfeiture cases against AdSurfDaily and a RICO case are still active. AVG launched in the wake of two forfeiture actions brought by the government against assets tied to AdSurfDaily and a racketeering lawsuit brought against ASD by individual members. AVG has close family, management and promotional ties to ASD (see No. 3 below), and the multiagency federal probe into ASD’s business practices is ongoing.
It is known that the U.S. Secret Service, the Internal Revenue Service and the U.S. Department of Justice are involved in the investigation, and it is believed that the Federal Bureau of Investigation, the U.S. Postal Inspection Service and the Securities and Exchange Commission have at least peripheral involvement. At the same time, it is known that the office of Florida Attorney General Bill McCollum is involved in the probe, and it is believed that other Florida agencies also are involved.
It also is known that various state attorneys general, state banking regulators and state securities regulators have knowledge about the ASD case.
Your AVG sponsor or his or her upline sponsor could be a target of the ASD investigation, which means you could be doing business with a person the government views as a participant in a criminal enterprise. Forfeiture complaints were filed against assets tied to ASD in August and December. The government views ASD as a criminal enterprise. All money collected by ASD and all “profits” derived from ASD are viewed as the proceeds of a crime.
Meanwhile, the RICO complaint brought by ASD members in January alleged that ASD was engaged in racketeering with unnamed co-conspirators. Some of the alleged co-conspirators may have ties to AVG.
3. AVG’s “association” structure does not insulate it from prosecution. AVG has shifted to an “association” structure, apparently on the theory that the “association” approach can immunize members from prosecution for violations of state and federal law. Such associations may say their power is derived from the U.S. Constitution. They may publish statements that resemble a loyalty oath and frequently are associated with tax schemes. Even by the incongruous standards of the surf world, AVG is setting a new standard for weirdness.
The AV Global Association (AVGA) is now listing Judy Harris as its “First Trustee.” Harris, the wife of George Harris, replaces Gary Talbert in the role of “First Trustee.” George Harris, the stepson of AdSurfDaily President Andy Bowdoin, is the “Successor Trustee.”
What this means, literally, is that AVG is linking itself to Bowdoin family members identified by the federal government as the beneficiaries of illegal conduct by ASD, after earlier disclaiming any affiliation with ASD and during an active criminal investigation. What it means as a practical matter is unclear because the situation is so bizarre it almost defies description.
Talbert, who is not a Bowdoin family member but is a former ASD executive who filed a sworn affidavit on ASD’s behalf in the August forfeiture case, resigned suddenly March 20 as AVG’s chief executive officer. Three days later, on March 23, AVG announced its bank account had been suspended. AVG has never provided a clear explanation of either event. Talbert’s name now has been removed as an AVG “Trustee.”
Property owned by George and Judy Harris, including a car and a home in Tallahassee, Fla., was seized in the December forfeiture complaint, which alleged the $157,000 mortgage on the Harris home was retired with illegal proceeds derived from ASD.
There has been no public action in the December forfeiture case since the filing of the complaint. Neither George nor Judy Harris has filed a claim to their home. Neither George nor Judy Harris has filed a claim to a car prosecutors alleged was purchased with illegal proceeds derived from ASD.
4. At least one proffer letter exists in the ASD case. In April, in their final response to a series of responses to Andy Bowdoin’s pro se pleadings in the forfeiture case brought in August, prosecutors revealed that Bowdoin had signed a proffer letter. Proffer letters sometimes mean that the one who proffers is willing to provide the government information that is helpful in the prosecution of others.
Bowdoin never told ASD members about the proffer letter. Nor did he tell them about the December forfeiture complaint, which includes extremely specific allegations. Bowdoin waited until March to tell members he had decided in January to submit to the forfeiture of tens of millions of dollars seized in the August complaint.
Bowdoin’s first public comments on his January decision to submit to the forfeiture came in the form of a Bowdoin letter published in March on the pro-ASD Surf’s Up forum. In the letter, Bowdoin triumphantly announced he had changed his mind about submitting to the forfeiture — while ignoring the fact that he never told members about the December complaint or his January forfeiture decision. In essence, Bowdoin blamed his former paid counsel for the trouble he was in and said the federal government was prosecuting ASD illegally.
In his letter, Bowdoin chided federal prosecutors, saying his pro se pleadings “should really get their attention” and urging members to write to President Obama, members of Congress and Fox News personality Glenn Beck.
At 74 — and a convicted felon from a 1990s securities scheme in which 89 separate instances of fraud were alleged in Alabama — Bowdoin urged his supporters to tell anybody who cared to listen that he was a victim of an out-of-control government. In July 2008, just days before the government seized tens of millions of dollars from ASD, Bowdoin plunked down nearly $50,000 to purchase a new Lincoln, according to the December forfeiture complaint.
A month later he sent his Alabama victims a check for $100, according to the St. Petersburg Times, a Pulitzer Prize-winning newspaper. The Lincoln alone cost more than the remaining restitution due the Alabama victims.
Even though Bowdoin told ASD members in March that he would hold a conference call soon to explain what was going on, the conference call never materialized. And Bowdoin still has not told members about the proffer letter he signed.
5. General confusion about AVG. One AVG member observed that the firm’s explanations about its business practices have been about as clear as “mud.” Among the current issues are a failed attempt last week by the company to launch a new website, a denial by a company AVG said was facilitating offshore wire transfers that it had any business relationship with AVG, confusion about AVG debit cards and why some AVG members seem predisposed to cheer for the company as though members were taking part in a religious revival.
Loyalists, meanwhile, continue to maintain that AVG members have a duty not to talk about the company in public, insisting that members adhere to “association” rules.
Some AVG members say they want to use a spreadsheet to educate prospects about potential earnings, but others say spreadsheets are one of the things that led to trouble for AdSurfDaily. At the same time, members are trying to stop other members from using the word “investment” when discussing AVG, apparently believing that calling AVG an “advertising” company instead of an “investment” company somehow would insulate AVG from the prying eyes of the government.
Such attempts at forced wordplay not only provide no protection, they also provide evidence of what investigators call “consciousness of guilt.” Indeed, there would be no reason to insist on the forced use of language if promoters didn’t recognize the legal danger they were in — and calling AVG an “advertising” company does nothing to change the simple fact that AVG and surfs that use similar models are vulnerable to charges of selling unregistered securities as investment contracts. The surfs cannot pass a simple test (“The Howey Test”) that became a threshold securities test and litigation benchmark 63 years ago, in 1946, when Harry Truman was President of the United States. The Howey case was on the books 15 years prior to the 1961 birth of Barack Obama, the current President, and 23 years prior to the first moon landing in 1969.
In recent days, some AVG members have been reluctant even to mention the name “AdSurfDaily,” instead referring to the embattled surf with close AVG ties as the “company.” The paranoia is palpable.
One problem with paranoia — and it is a problem AVG is experiencing — is that it does not translate well among people who have no reason to be paranoid. Many entry-level surf participants, for example, don’t understand that they’re being recruited into a wink-nod enterprise. They ask reasonable questions, but are met with paranoid responses and prompts to be less open and more secretive, which only accents the paranoia among those who know there actually is something to be paranoid about — chiefly, that virtually all autosurfs operate as Ponzi schemes and that the government could shut them down without warning at any moment.
One AVG member instructed “international” members of AVG to insert “NA” in a debit-card application when prompted to supply a Social Security number, an instruction that only heightens concerns about money-laundering and wire fraud.
A triumphant AVG announcement about a new debit card the surf intends to offer was met with a thud when some members found out later that the card came with a $30 fee. Loyalists, however, said members should embrace the fee because it creates a new profit center for the company. Other members are complaining that at least one of AVG’s debit cards seems to limit withdrawals to $100.
AVG promoters, meanwhile, continue to lean heavily on exclamation points — rather than straightforward speech — to make their case for the company. An announcement about an AVG conference call was accompanied by three exclamation points:
A poster at the Pro-AdSurfDaily Surf’s Up forum has just made brief posts in 11 separate threads in a period of only minutes. The effect of the posts was to knock a post pertaining to this Blog’s coverage of the indictment against ASD mainstay “Professor” Patrick Moriarty off the front page at Surf’s Up.
The poster punctuated his burst of activity by starting a thread titled, “Overrun With Rats, Bed Bugs, Maggots, Cockroaches And Everything Else.”
In the thread, he advised readers about what he had just done.
“This is what happens when you leave a forum go on by itself,” he said. “What would you do if this forum was shut down[?] Would you miss it????”
The move came on the heels of recent deletions at Surf’s Up that referenced our reporting on the ASD case. Surf’s Up announced Friday that it had a “poof!” policy with respect to this Blog.
Mention the Patrick Pretty.com Blog at Surf’s Up and your post may go “poof!” It even may go “poof!” if you do not mention the name of this Blog, if the Mods can ascertain that the information might have originated here.
Two such threads on prosecutors’ recent actions in the ASD case went “poof!” over the weekend, and yesterday an individual post that referenced our reporting Sunday on the Moriarty indictment went “poof!”
A different member, however, started a new Moriarty thread later yesterday in which another Surf’s Up member referenced our Sunday and Monday reports — and it survived for hours, before being knocked to the second page this morning in a furious burst of posts.
Surf’s Up management, so far, has chosen to say nothing about the Moriarty indictment or even inform members about it.
Here is the official explanation for the “poof!” policy from Surf’s Up Mod Barb McIntyre. McIntyre announced the policy Friday night.
“[P]osting PP BS is nothing but stirring trouble so I am calling the other mods and don’t be surprised if it goes ‘poof!’” McIntyre said.
McIntyre, along with Moriarty, was one of five co-founders of a defunct organization known as ASD Members International (ASDMI). The organization registered as a Missouri nonprofit in October, making the strange claim that it would litigate against government entities involved in the AdSurfDaily case — even if they were behaving legally. If lawsuits didn’t work, then perhaps ASDMI would see about having prosecutors charged with crimes.
ASDMI existed for less than 90 days — Oct. 30, 2008 through Jan. 26, 2009. The process of dissolving the entity actually began on Dec. 10, about 41 days after its founding. Formal papers were signed Jan. 21, and the dissolution was recorded Jan. 26.
ASDMI gathered contributions from at least 167 ASD members before dissolving itself. No lawsuit was filed. Even after ASDMI ceased business, Surf’s Up continued to promote Moriarty. McIntyre sent an email to members, announcing an important letter Moriarty had written to Sen. Patrick Leahy, chairman of the Senate Judiciary Committee.
Despite the fact ASD’s assets were seized as the proceeds of a criminal wire-fraud, money-laundering and Ponzi-scheme operation, Moriarty advised Leahy that the Senate should set its sights on the prosecutors who prevented the scheme from mushrooming globally — not Andy Bowdoin, the person responsible for organizing the scheme
“Over 50 individual and notarized DEMAND[S] FOR LEGAL EVIDENCE were sent to Jeffrey Taylor, US Attorney; William Cowden, Assistant US Attorney; and Roy Dotson, Special Agent, US Secret Service,†Moriarty said in the February letter to Leahy.
“Not once did any of these three Government Servants respond,†Moriarty said.
“Innocent Americans have suffered and continue to suffer because of these incredulous and despicable acts†by prosecutors, Moriarty said.
Yesterday this Blog reported that, in 2006, Moriarty set up a nonprofit in the name of a man accused of breaking into a woman’s home and murdering her. The man also shot a police officer four times and another man eight times. The man pleaded guilty to first-degree (premeditated) murder last month.
The Power Of ‘Poof!’
If you have some money — and if you believe anything you read on the PatrickPretty.com Blog — McIntyre will sell you a bridge in Arizona, she said.
“Comes with ocean frontage,” McIntyre added.
Posting a reference to PatrickPretty.com is an act consistent with “trouble makers” and inconsistent with adult behavior, McIntyre advised.
“We fixed the forum so that the trouble makers could not harass and most of you are not troublemakers and do not need babysitting…or so we thought,” she said.
Oddity One: As first reported here yesterday, Andy Bowdoin had the exact same amount on deposit in three separate Bank of America accounts: $1,000,338.91.
Such an oddity seems impossible, if not deliberate. Could the $338.91 tacked on the end of all three sums be interest on individual deposits of exactly $1 million each all made on the same day — not long before the Aug. 5 formal seizure?
If so, why would ASD need three accounts containing precisely $1 million each opened on the same day?
Oddity Two: Back in January, this Blog made a video of AdViewGlobal graphics appearing in a webroom operated by ASD and then disappearing. Yesterday the YouTube system emailed us about a comment left at the video site by a person who identified himself as “AVGACompliance” and “Juan.”
Here is the comment left by “AVGACompliance” and “Juan” (italics added):
Please remove this video ASAP as you are using unauthorized material and this is part of our terms & service. If you don’t remove this information your account will be terminated.
Thanks
Juan
We did a quick search of videos about the AdViewGlobal autosurf, and found that the exact same comment signed by “AVGACompliance” and “Juan” had been left elsewhere at YouTube. We also noticed that AVG now appears to have its own officially endorsed video.
Assuming “AVGACompliance” and “Juan” have a real tie to AVG and that their aim is to make sure only the officially endorsed video gets shown on YouTube under the threat of an account termination at AVG, we have to wonder if “AVGACompliance” and “Juan” actually even watched our video.
We don’t have an account at AVG for Compliance to terminate. The title of our video is, “Ad Surf Daily Ponzi Scheme Tie To Ad View Global.”
So much about AVG is hard to explain. At one time, the surf said it had no ties to ASD, after prelaunch promoters for weeks did their best to tie together the two firms, even suggesting that ASD credits could be transferred to AVG.
AVG and ASD have common ties, common management and common promoters. Just last week AVG said it had a deal that would enable customers to wire money offshore to pay for “advertising.” Trouble was, a company AVG said was involved in the transfers said it had no business relationship with AVG, said the surf’s claims were false and added that it was conducting an investigation because it believed it had been targeted in a scam.
