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  • EDITORIAL: As Financial Fraud Enforcement Task Force Website (StopFraud.gov) Spotlights AdSurfDaily Prosecution, Bizarre Email Circulating Among ASD Members Raises New Conspiracy Theories

    UPDATED 10:31 A.M. EDT (U.S.A).

    ASD case subject of discussion in Washington’s highest power corridors: The Financial Fraud Enforcement Task Force was formed by President Obama in November 2009. U.S. Attorney General Eric Holder, a member of the President’s cabinet and the chief law-enforcement officer of the U.S. government, presides over the Task Force.

    Secret Service is charter member of Task Force. The U.S. Secret Service, whose duties include protecting the President of the United States, the integrity of the economy and the financial infrastructure of the nation, is a member of the Task Force.

    Among the allegations in the ASD case is that members were falsely trading on the name of then-President George W. Bush to sanitize a $110 million Ponzi scheme, that ASD President Andy Bowdoin encouraged the false claims and arranged to spend Ponzi proceeds to retire the $157,000 mortgage on a home in Tallahassee occupied by his wife’s son and the son’s wife, purchase a lakefront home in Florida, purchase an $800,000 building (for cash), purchase jet skis, a Cabana boat, haul trailers and marine equipment — all while owing restitution to victims of an Alabama securities caper in the 1990s and “thousands of dollars” to an ex-wife.

    Some of the purchases occurred within days of Bowdoin’s return from a May 2008 ASD “rally” in Las Vegas at which he defined himself as a Christian “money magnet” and encouraged others to follow him in thanking God and becoming like-minded “money magnets.” At the rally, Bowdoin urged members not to miss the opportunity to provide ASD with money by the tens of thousands or hundreds of thousands of dollars at a time, according to records.

    “Thank you, God, for destining me to great wealth,” he exhorted the Las Vegas crowd to internalize and recite during the day.

    And he exhorted members to picture themselves wealthy.

    “See a big check coming in from AdSurfDaily,” he urged. “I signed a check the other day, about $22,000. See those checks like that coming for you constantly, just flowing to you.”

    One of Bowdoin’s business partners — Walter Clarence Busby Jr., the operator of the Golden Panda autosurf — was implicated by the SEC in three prime-bank schemes in the 1990s, according to records. Golden Panda, according to Busby, was hatched after he went fishing with Bowdoin on a Georgia lake in April 2008. Just days after the fishing expedition, Bowdoin boarded a plane and flew to Costa Rica, according to court filings.

    Weeks after his return from Costa Rica, Bowdoin headed to Washington, D.C., to rub elbows with politicians, according to court filings.

    Read the full news release on the AdSurfDaily case here. It is published on StopFraud.gov, the Task Force website.

    New conspiracy theory emerges after government compensates ASD victims. As often has been the case, some ASD members appear not to have taken the clue that top Justice Department officials and perhaps the White House itself are being briefed on developments in the ASD case. The ASD case became a national-security case when the U.S. Secret Service discovered in 2008 that Andy Bowdoin, a recidivist securities swindler in his seventies who allegedly had “earned no significant income from legal employment in the twenty years prior to his commencement of ASD’s operation,” suddenly was sitting on tens of millions of dollars and had handed out some of it to political rainmakers.

    Some of the handouts, which came in the form of contributions to the National Republican Congressional Committee (NRCC), occurred in early 2007, even as the first Ponzi scheme iteration of ASD was collapsing and the firm’s original members were left holding the bag while Bowdoin explained $1 million had been stolen by “Russian” hackers. Bowdoin did not file a police report about the purported theft because he did not want to draw the attention of law enforcement, according to court filings.

    The NRCC handouts continued in 2008, after Bowdoin had changed the name of his collapsed autosurfing venture from AdSurfDaily to ASD Cash Generator, plumbed it with new cash from a new group of suckers, started a second Ponzi venture known as LaFuenteDinero, arranged with Busby to form a third Ponzi-in-waiting  (Golden Panda) and had flown to Costa Rica with a “North Carolina lawyer” (and co-owner) of LaFuenteDinero, according to court filings and Federal Election Commission records.

    In a bizarre email that began to circulate among ASD members yesterday, the seed was planted that that the government was trying to recruit witnesses by luring them with remissions payments — and that prosecutors might claw back the remissions money if  the member “did not cooperate in testifying against ASD.”

    The date upon which the email was written could not immediately be determined, but the email appears to be the second in a two-part series sent after ASD members began to receive remissions payments late last week.

    The content of the email, which was described as “insider information” and attributed in part to an unamed third party who purportedly overheard a conversation involving a federal prosecutor at an unspecified location, was titled, “Important Warning: ASD/Golden Panda.”

    Among the suggestions in the email was that the government planned to “force” ASD members who received remissions distributions to testify against Bowdoin in his upcoming criminal trial on charges of wire fraud, securities fraud and selling unregistered securities. The email was signed “Sara.”

    Here is the email verbatim (italics added):

    “Hi Everyone-

    Since I sent the last email update about ASD/Golden Panda monies being received by members, I received some very important insider information you should know. This is an important warning.

    The information (these are not quotes) I am sharing with you was spoken by and was heard directly from an attorney for the government, in relation to the ASD legal case. I must protect the source but I can assure you it is reliable (it is not Andy). I was told that the person heard the government attorney say they had hired the Rust Company to send a remission form by email and US-mail to ASD and Golden Panda members. The form was to be sent under the pretense that the member would get their money back if they filled out the form to request a remission of their ASD/Golden Panda monies seized by the government on 8/1/08. Those members would then receive their remission monies directly into their bank accounts, but the attorney said that their names would go onto a list and they would then be summoned by the court (at the members own expense) to testify against ASD. They would be forced to testify against ASD even if they did not believe that ASD was illegal, because the form they signed was set up in such a way that the member was essentially stating that ASD victimized them in an illegal business. I’m imagining a typical scenario in court would be: The attorney for the government would read statements from the form and the member’s answers and then say something like, “Is this your signature?” to force the member into saying that the statements were theirs.  And, take note, that it was also mentioned by the attorney that the direct deposit into the member’s account could be reversed at any time if ASD should eventually lose the case or if the member did not cooperate in testifying against ASD. If the money isn’t in the account anymore, it would be money owed back to the government, so moving the money would not help. The addendum that I was advised to suggest to you if you were drawn to fill out the form (sent by the Rust Company on behalf of the government) that stated that you did not make an investment in ASD/Golden Panda, but rather bought advertising, would apparently protect you from the government’s tactics, but I honestly do not know that for sure.

    Many of us had major red flags when we read the form as it was obvious what the government was trying to do. That’s why it was advised that members add the addendum to their form, to protect themselves from the government’s deceptive practices. So pray about how you should proceed. Please don’t ask me. I can’t make this decision for you.

    God’s Blessings,

    Sara

    The email appears to have followed the email below, which divines a construction by which  the government seized ASD money illegally and set up the remissions program only because ASD members outraged at the illegal seizure demanded the return of their funds (verbatim/italics added):

    “Dear ASD & Golden Panda Members-

    I have some news! ASD and Golden Panda Members have recently received a “remission” of the money that was in their ASD and/or Golden Panda accounts, deposited directly into their personal bank accounts by the government; amounts like $50,000 and $60,000 and it was apparently 100% of the money that was owed to them!

    Personally, I am stunned. My experience over the last decade or more has been that the government has never fulfilled their obligation to return money they have seized from programs they deemed illegal. My opinion is that they are scrambling to do this in order to diffuse the outrage ASD members have felt toward the government from their (in my opinion, illegal) seizure of members’ account funds, so that members will have less opposition toward the government during the eventual ASD trial.

    But, for whatever reason the government is doing it, it is irrelevant to those relieved members who are finally receiving justice from this (in my opinion, illegal) seizure.

    If you have not received your remission, you can go to this website to fill out the form there: adsurfdailyremission.com. You can also call the following toll free information line for more information and even talk to a customer service agent in person to ask any questions you might have about this process: 888-398-8214. The following email address has also been provided to communicate about this: info@adsurfremission.com You will notice that, in the recorded message, the government does NOT back down in their assertion that Golden Panda and ASD were illegal ponzi schemes, but that is obviously not stopping them from returning members’ funds.

    Some of you will notice that this form is the one that many of you did not feel inspired to fill out when it was first presented to us. It really puts members in an uncomfortable position of stating that they were victims of ASD/Golden Panda when they don’t believe they were and many felt as if they were also being set up to incriminate themselves.

    At the time, I was advised to suggest to you that, if you felt drawn to fill it out, you include an addendum that stated that you understood that you were purchasing advertising, not making an investment. That continues to be the advice. Now that people are actually receiving their money back, perhaps some of you may feel more motivated to risk filling out the form. Just be careful not to incriminate yourselves. Be alert as you do it. Do not leave any question unanswered or it will be rejected. You must also provide documentation so hopefully you kept good records.

    You will notice on that website (upper left corner) that it says that you must fill it out and submit it by a date in January, 2011. The way around this may be to say that you just found out about it (you didn’t get their letter in the mail or an email from them) and therefore you are only responding to it now. You might want to make that clear to the Customer Service agent at the number above BEFORE you take the time to fill it out, to confirm that they are still accepting them. If not, take a stand for your right to your monetary remission and ask for a supervisor. I am hearing that they are swamped trying to keep up with the communications they are receiving from members, so please be patient.

    Blessings,

    Sara

    Read a January 2011 story about ASD-related emails. Read a November 2010 story. Read another November 2010 story. Read a December 2009 story.

  • URGENT >> BULLETIN >> MOVING: AdSurfDaily Ponzi Scheme Example Of ‘Insidious’ Financial Crime, Head Of Justice Department’s Criminal Division Says; Top Officials, U.S. Secret Service Issue Statement In Support Of Victims; Obama Task Force Monitoring ASD Case

    Assistant Attorney General Lanny Breuer, head of the Justice Department's Criminal Division.

    URGENT >> BULLETIN >> MOVING: The AdSurfDaily Ponzi scheme is an example of an “insidious” financial crime, the head of the U.S. Department of Justice’s Criminal Division said moments ago in a special statement on how forfeiture laws were used to protect ASD victims.

    Meanwhile, a top official of the U.S. Secret Service described Florida-based ASD as a “criminal enterprise.”

    ASD members who filed approved claims through the government’s remissions program will receive back tens of millions of dollars owing to the quick actions of the U.S. Secret Service and federal prosecutors in the District of Columbia in 2008, officials in Washington said.

    Victims who filed remissions claims and demonstrated losses will be compensated at 100 percent, a rare total, a source with knowledge of the process told the PP Blog last week.

    “[F]orfeiture is a powerful tool for ensuring that victims of financial fraud are made whole,” Assistant Attorney General Lanny A. Breuer said today. “Returning funds to victims is a key goal in our mission to combat financial crimes. We will continue to use every tool at our disposal to bring justice to the citizens defrauded by these insidious schemes.”

    Breuer was backed by U.S. Attorney Ronald C. Machen Jr. in the District of Columbia.

    U.S. Attorney Ronald C. Machen Jr.

    “We are putting $55 million back into the pockets of innocent victims of this online Ponzi scheme,” said Machen.  “As we did in this case, we will continue to work with our law enforcement partners to recover every penny we can find for victims of financial fraud.”

    A top Secret Service official said today that ASD was a “criminal enterprise” and that the remissions program represented a positive outcome for victims of an elaborate fraud scheme.

    “With all of our efforts to punish and deter this criminal enterprise, the rights of innocent parties are protected and will subsequently be returned,” said Assistant Director A.T. Smith of the Secret Service’s Office of Investigations. “This substantial remittance not only emphasizes the cooperation between the Secret Service, U.S. Attorney’s Office, and the Department of Justice, but promotes positive community impact by returning these funds to innocent victims.”

    The U.S. Secret Service “safeguards the nation’s financial infrastructure and payment systems to preserve the integrity of the economy,” said Smith.

    Today’s statement by the officials confirmed that President Obama’s Financial Fraud Enforcement Task Force, which was created in November 2009 to root out fraud, has been monitoring ASD developments and assisting in the case.

    Information for ASD victims is accessible by dialing this number:

    1-800-644-1535

    Victims who use the mail and have questions should contact:

    Basizette Stribling
    Victim Witness Assistant
    Re: AdSurf Daily
    United States Attorney’s Office for the District of Columbia
    555 Fourth Street NW
    Washington, D.C. 20530

    ASD President Andy Bowdoin was arrested by the Secret Service in December 2010. He was charged with wire fraud, securities fraud and selling unregistered securities. Bowdoin, 76, is free on bail and awaiting trial.

  • UPDATE: About 8,400 AdSurfDaily Members Will Receive Remissions Payments; Number Of Successful Claimants Exceeds Population Of ASD’s Home Base Of Quincy, Fla.; No Comment From Prosecutors On Curious Facebook Post From Apparent ASD Member

    Federal prosecutors had no comment this morning about a Facebook posting from an apparent ASD member who claims to have received victim's compensation but still purportedly backs accused felon Andy Bowdoin. Bowdoin is facing criminal charges of wire fraud, securities fraud and selling unregistered securities.

    UPDATE: About 8,400 victims of the AdSurfDaily autosurf are receiving remissions payments of 100 percent of their losses, a source familiar with the process said today.

    The PP Blog first reported Thursday that the remissions payments would be 100 percent across the board to ASD victims who demonstrated a loss. On Friday, the Blog received a stream of confirmations from ASD victims that Rust Consulting Inc., the government-approved claims administrator, had deposited the payments into their bank accounts electronically.

    Based on court filings, the PP Blog is estimating that about 80 percent of ASD members who filed for remissions by the January 2011 deadline had their claims approved. The number represents an “overwhelming majority,” the source said last week.

    The number of successful remissions petitioners significantly exceeds the population of Quincy, Fla., ASD’s headquarters. Quincy’s population is about 7,000.

    The U.S. Secret Service said in August 2008 that ASD President Andy Bowdoin was operating a massive, international Ponzi scheme from Quincy in part by claiming ASD was selling “advertising” that paid “rebates” of 125 percent.

    Bowdoin, 76, has been soliciting contributions for his criminal defense for weeks, asking the people he is accused of defrauding to pony up $500,000 to pay for lawyers.

    Federal prosecutors had no comment this morning on a Friday post on Bowdoin’s Facebook fundraising site from an apparent ASD member who claimed he’d received crime-victim’s compensation but still was backing Bowdoin.

    “I don’t know what happened, but I had posted on here yesterday that the government sent me a letter they would be refunding my ASD money,” the apparent ASD member wrote. “To my surprise and shock, the money IS in my account as of today, all $27,690.00 of it!!!!

    “DO NOT THINK THAT I DON’T BACK ANDY, BECAUSE I STILL DO!!!!” the apparent member exclaimed. “I want ASD BACK, I want Andy and ASD EXONERATED, and I want the government to PAY PAY PAY for what they did and for MISUSE of The Patriate Act (sic), which ironically they used in the most UNPATRIOTIC way seemingly possible!”

  • URGENT >> BULLETIN >> MOVING: ASD Victim Says His Remissions Distribution Has Been Deposited — And That It Was 100 Percent

    URGENT >> BULLETIN >> MOVING:  The PP Blog has received the first report from an AdSurfDaily Ponzi victim that Rust Consulting Inc. has deposited his remissions distribution into his bank account and that the sum was 100 percent of his ASD loss.

    The money appeared in the member’s bank account this morning. Rust is the Minnesota-based claims administrator in the ASD case.

    Developing . . .

  • MAJOR DEVELOPMENT: AdSurfDaily Remissions Payments Will Be 100 Cents On The Dollar; ‘Thousands’ Of Payments To Go Out; ‘Overwhelming Majority’ Of Claims Approved; Members React With Joy

    “Thousands” of AdSurfDaily Ponzi victims with approved claims will receive remissions payments of “100 percent” in the coming days, a source familiar with the process tells the PP Blog.

    It is quite rare “to have a remissions program that comes back with 100 percent,” the source said.

    The claims process was administered by Rust Consulting Inc. of Minnesota. The process was coordinated by the U.S. Department of Justice, the U.S. Secret Service and the office of U.S. Attorney Ronald C. Machen Jr. in the District of Columbia.

    After three long years waiting for the process to be finalized after two forfeiture appeals by ASD President Andy Bowdoin and attempted pro se interventions by dozens of members who claimed the government was the bad guy, ASD members who stuck with the process expressed joy.

    “YAYAYAYAY!” exclaimed one. Another characterized the news as “amazing.”

    A small percentage of ASD members who filed claims will not receive compensation because they failed to demonstrate a loss, the source said.

    An “overwhelming majority” of claims were granted, the source said. Court records show that about 11,000 people filed claims.

    Payments are expected to begin within 15 days. The money will be deposited electronically into the accounts of ASD members whose claims were granted.

    In 2008, Bowdoin compared the prosecutors in the case to “Satan.” Other ASD members described the U.S. Secret Service as “Nazis” and “goons.” A poster on the now-defunct Surf’s Up forum said that the lead prosecutor in the case should be placed in a medieval torture rack and that ASD members should draw straws to determine who received the honor of carrying out the torture.

    A federal judge was called “brain dead” if she did not agree with ASD’s side of the case, and a purported “prayer” was circulated among ASD members calling for the prosecutors to be struck dead. One prosecutor was described derisively as “Gomer Pyle,” and rumors were unleashed on the Surf’s Up forum that the government had admitted secretly that ASD was not a Ponzi scheme.

    Some ASD members encouraged others not to file for remissions. Those who ignored the advice and were able to demonstrate a loss now will receive back 100 cents on the dollar.

    Remissions payments will be made from funds seized by the U.S. Secret Service in the earliest days of the ASD probe more than three years ago.

    Bowdoin filed appeals in the forfeiture cases, but lost. He is now soliciting funds to pay for his criminal defense to charges of wire fraud, securities fraud and selling unregistered securities.

    Some ASD members ignored the seizure and a parallel criminal investigation. They immediately joined other autosurfs, HYIPs and cash-gifting programs, claiming they were excellent ways to make up their ASD losses.

    In a March 2009 letter to ASD members on the Surf’s Up forum, Bowdoin chided prosecutors and the Secret Service, claiming his pro se filings in the civil portion of the case “should really get their attention.”

    A month later — in April 2009 — prosecutors revealed in a final response to a series of pro se pleadings by Bowdoin that Bowdoin had signed a proffer letter in the case and acknowledged that the government’s material allegations were all true.

    Bowdoin acknowledged in his own court filings that he had given information against his interests and had met with prosecutors over a period of at least four days in late 2008 and early 2009. In January 2009, he abandoned the forfeiture cases, releasing his claims to the seized money “with prejudice.”

    By the end of February 2009, however, Bowdoin reentered the case as a pro se litigant, claiming later that his decision was driven by a “group” of ASD members. He did not identify members of the group.

    ASD is known to have so-called “sovereign citizens” in its ranks.

    Bowdoin has not referenced the proffer letter in his fundraising bid. Nor has he referenced a racketeering lawsuit filed against him in January 2009 by some members.

    It was not immediately clear how many members destroyed their chances to receive remissions after coming under the influence of various crackpot theories spun by certain ASD members. One of the theories held that all commerce is lawful if a contract exists. Another held that members should include notes on the claims forms that explained Bowdoin was conducting business lawfully.

    Another theory held that the government had invested approximately $80 million seized in the case, had earned a return in excess of  $1 billion — and that prosecutors were partying with the money. Still another held that a federal judge was conspiring with another federal judge to deny ASD justice and that at least one of the judges was guilty of 60 felonies.

    Yet another theory held that ASD members should not cooperate with investigators and should not file remissions forms.

  • DONATION-BUTTON POST: A Word Of Thanks And A Word Of Remembrance As The PP Blog And Its Author Continue To Face Challenge Of Keeping Publication Online

    Dear Readers,

    Another new month is approaching. There are bills to pay — and the usual lack of funds to pay them.

    As I noted in July, I am passing the hat reluctantly — but pass it I must.

    These posts always are the hardest to write. Although the Blog is highly relevant in the lives of its readers, it barely made it last month. Day after day, Ponzi scheme victims read the Blog to see if there is anything new about their cases. Media outlets visit the Blog, as do researchers, attorneys, financial institutions and law-enforcement agencies.

    Scammers don’t like the Blog, of course. Neither does a person who calls himself “Mr. Protector.” The Blog has been on the receiving end of hostility, passive-aggressive posturing and, from time to time, delusional rants. I’m not entirely certain if the level of willful blindness and voluntary obtuseness in the world ever has been higher.

    A Remembrance

    A person sent me an email today and asked me to call. I am acquainted with this person, and I returned the call quickly. The news that came out of the other end of the line was a pure joy to hear. It made me emotional instantly for a couple of reasons: First, the person was thrilled that justice was taking shape in a particular Ponzi scheme and that victims had a reason for hope. Second, the person commented that the Blog has been an important part of her life.

    This is what makes the struggles worthwhile.

    Today’s events reminded me of something that happened in May 2001, more than 10 years ago now. Since about the middle of April of that year, I’d been covering a  flood of inexplicable foreclosures for a newspaper. I met with the editors each morning and wrote about two stories a day for the next six weeks, poring through documents and visiting the homes of lots of people in foreclosure.

    I told their stories. And their stories were supplemented by stories about the impossible mathematics of the situation. Not much seemed to be happening on the law-enforcement front.

    But on that day in late May something did happen: The government filed suit in state court. I obtained a copy of the lawsuit and headed for the office of a man who’d been helping me crunch the numbers — much to the dismay of some of his colleagues in the real-estate trade. They apparently believed it was better to say nothing than to have law enforcement looking under rocks to determine why widows were losing their homes.

    By the time I left the man’s office, tears were welling in his eyes. He’d been trying unsuccessfully to get somebody to do something for two years. Somebody finally did do something on that day in late May of 2001.

    As the summer progressed, more people did more things. The Feds got involved. It was the first forfeiture case I ever wrote about: cash and a Rolls-Royce.

    So, I’d like to thank the reader who contacted me today for her readership and warm thoughts. But most of all I’d  like to thank her for making me remember that day from more than a decade ago, the pure joy that surfaced on the faces of the victims. That day represented the beginnings of justice for hundreds of people and will remain with me forever — as will this one.

    Patrick

  • URGENT >> BULLETIN >> MOVING: AdSurfDaily Remissions Distributions Are Beginning

    URGENT >> BULLETIN >> MOVING: UPDATED 5:21 P.M. EDT (U.S.A.) Remissions payments to AdSurfDaily members fleeced in an alleged global Ponzi scheme are beginning, a source tells the PP Blog.

    It was not immediately clear how Minnesota-based Rust Consulting Inc. — the government-approved claims administrator — would roll out the compensation plan and how long it would take for all members with approved claims to be notified that their payment will be on the way.

    But the PP Blog has confirmed that an ASD member in Minnesota has received a formal notification that the member’s claim has been approved and that funds will be electronically deposited within the next 15 days. (See screenshot below.) The payments are being funded from money seized by the U.S. Secret Service in the civil portion of the ASD case.

    Separately, AdSurfDaily President Andy Bowdoin — who faces criminal charges of wire fraud, securities fraud and selling unregistered securities — continues to flog away on Facebook and a separate fundraising site to raise $500,000 to pay for his criminal defense. After nearly two months of nonstop fundraising, Bowdoin reportedly has fallen 95 percent short of his goal.

    He’ll now be issuing his appeals even as ASD members he is accused of defrauding are receiving remissions payments from the proceeds of his alleged $110 million Ponzi scheme. In sworn court filings, Bowdoin has claimed the money seized in the case belonged to him.

    At least 11,000 people have identified themselves as victims of Bowdoin’s Ponzi scheme, according to court filings.

    Screenshot: Remissions payments to AdSurfDaily Ponzi scheme victims are beginning, according to this letter the PP Blog obtained today from a source.

  • EDITORIAL: An Intriguing Question Raised By The Full Tilt Poker Allegations: What Is Real Online — And What Is Not?

    In Manhattan yesterday, U.S. Attorney Preet Bharara accused the online company Full Tilt Poker of operating a massive Ponzi scheme on a global scale. The prosecution of Full Tilt began in April. The case includes multiple online poker companies as defendants.  As the investigation evolved, the Full Tilt Ponzi scheme was detected, prosecutors said. It is the only poker firm accused of a Ponzi offense.

    Lost in the Full Tilt Ponzi headlines yesterday was an intriguing series of allegations that raises serious questions about what is real online and what is not. The import of the allegations is that, if true, it shows that certain tentacles of the Internet have evolved in incredibly deceptive and dangerous ways. Could all the king’s horses and all the king’s men working 24/7/365 realistically hope to contain the menace of web-based money-laundering?

    The allegations also beg another question: Can the form-shifting Internet even be policed — or do the virtuoso maestros of  virtual criminality have a permanent advantage that aids them in the full-scale fleecing of tens of thousands of people of tens of millions of dollars at a time?

    There are no easy answers. But it is almost certain that the criminals have the upper hand right now, which makes it even more important for businesses and consumers to stay informed and work proactively with law enforcement. Can there be any doubt that both economic security and national security are at risk in an era in which the largest sports stadiums cannot accommodate all of the victims of online fraud flowing from a single case and fraud proceeds disappear down ratholes in the blink of an eye?

    Although the general allegations of fraud beyond the Ponzi variety drew little media attention yesterday, those allegations may be the most important in the evolving poker cases. In one way or another, they touch on each of the defendants — and the story is the stuff of nightmares because it suggests that the nightmares could become permanently entrenched if this extremely murky corner of the Internet continues to expand.

    Among the prosecution’s claims (bolding added by PP Blog) is that certain “[C]oconspirators . . . created dozens of phony e-commerce websites purporting to sell everything from clothing to jewelry to golf clubs to bicycles” in bids to route money to the poker companies.

    Not one or two, but dozens. Virtual companies and phony corporations/websites, it seems, are doing the work of the fabled brick-and-mortar car washes of yesteryear in disguising fraud proceeds.

    And why not project political awareness and a social conscience when funneling cash and laundering money?

    There is a specific claim that a phony firm known as “Green2YourGreen” was  used to disguise payments to poker firms. A bogus website for Green2YourGreen allegedly was set up, and the purported business was described as a “direct sales” firm.

    Its offerings allegedly consisted of purported “environmentally friendly household products” pitched by affiliates on a commissions basis.

    In reality, prosecutors charged, the phony “green” operation was created “to disguise the gambling transactions” and “listed numerous products that were purportedly for sale and contained ‘testimonials’ about the benefits of green living.”

    All of the phony firms and websites were designed to trick banks into processing payments for illegal gambling, according to the complaint.

    There were so many of them that PokerStars, a non-Ponzi defendant, was experiencing “increasing” chargebacks because its customers could not figure out why charges for “BICYCLEBIGSHOP.COM, GOLFSHOPCENTER.COM [and] VENTURESHOPPING.COM” were appearing on their bank statements,  according to the complaint.

    In any event, the lies and laundering of truth and money worked so well that billions of dollars flowed to the schemes, according to the complaint.

    It was hard to read the complaint yesterday without coming away with these questions: How many more bogus websites and bogus companies are doing the same thing — for beneficiaries who have no ties to poker? How many more criminal operations outside of the poker sphere — narcotics traffickers and terrorists, for instance — have cloaked themselves in this fashion and parked themselves at the end of the money-laundering conduit?

    The PP Blog has covered various “programs” that seem to make no sense at all — and we’re not just referring to the obvious fraud schemes such as the ones that exist on the Ponzi and criminals’ forums.

    No, for the purposes of this post, we’re talking about the less-obvious ones — purported MLM or direct-sales “programs” that do not appear even to have a product and yet have a virtual presence on the Internet, for instance

    And we’re wondering how many of the purported “programs” are just fronts for the Steroidal Puppeteers at the end of the criminally gushing money spigot and how many of  the hucksters who become the public faces of the schemes are really just people who carry out the orders of the hidden master criminals.

  • URGENT >> BULLETIN >> MOVING: Full Tilt Poker Was ‘Global Ponzi Scheme’ That Gathered ‘Hundreds Of Millions Of Dollars,’ Feds Say

    URGENT >> BULLETIN >> MOVING: Federal prosecutors in New York say that Full Tilt Poker was a “global Ponzi scheme” that raked in “hundreds of millions of dollars” — while defrauding players and lining the pockets of insiders who used offshore bank accounts.

    Snippet from an amended complaint filed in the Southern District of New York today:

    “Full Tilt Poker . . .  not only engaged in the operation of an unlawful gambling business, bank fraud, wire fraud, and money laundering as alleged in the Complaint, but also defrauded its poker players by misrepresenting to players that funds deposited into their online player accounts were secure and segregated from operating funds, while at the same time using player funds to pay out hundreds of millions of dollars to Full Tilt Poker owners. Full Tilt Poker was able to accomplish this massive fraud, in part, because it illegally conducted business in the United
    States but maintained its personnel, operations, assets, and accounts principally overseas.”

    Full Tilt’s lawlessness affected the U.S. financial infrastructure and poker players alike, U.S. Attorney Preet Bharara of the Southern District of New York said.

    “Not only did the firm orchestrate a massive fraud against the U.S. banking system, as previously alleged, Full Tilt also cheated and abused its own players to the tune of hundreds of millions of dollars,” Bharara said.  “As described, Full Tilt insiders lined their own pockets with funds picked from the pockets of their most loyal customers while blithely lying to both players and the public alike about the safety and security of the money deposited with the company.”

    This snippet from the complaint alleges that Full Tilt owed $390 million to players globally, but had only $60 million on deposit in bank accounts — and that the operators enriched themselves for years prior to law-enforcement  intervention earlier this year.

    “As of March 31, 2011, Full Tilt Poker owed approximately $390 million to players around the world, including approximately $150 million owed to players in the United States. At that time Full Tilt Poker had only approximately $60 million on deposit in its bank accounts. As of the filing of this
    Amended Complaint, Full Tilt Poker still owes players over $300 million.”

    Between April 2007 and April 2011, Full Tilt Poker and directors Raymond  Bitar, Howard Lederer,  Christopher “Jesus” Ferguson  and Rafael Furst “distributed approximately $443,860,529.89 to themselves and other owners of the company. Payments to the Full Tilt Poker owners stopped only after April 15, 2011,” according to the complaint.

    Bitar received approximately $41 million, prosecutors said. Lederer, meanwhile,  received about $42 million, and Furst about  $11.7 million.

    “Ferguson was allocated approximately $87,486,182.87 in distributions, and received at least $25 million, with the remaining balance characterized as ‘owed’ to him,” prosecutors said. “Much of the money that was distributed was transferred by the Board members and owners to accounts in Switzerland and other overseas locations.”

  • Accused Ponzi Scheme Felon Andy Bowdoin Launches Facebook Page, Asks Members To ‘Like’ Him And ‘Share’ Link To Defense Fundraising Site ‘Right Away’

    After weeks of delays, a Facebook “Fan” page for accused Ponzi schemer Thomas Anderson “Andy” Bowdoin finally has launched. The site includes a link to “Andy’s Fundraising Army,” the web venue at which Bowdoin’s bid to raise $500,000 to pay for criminal lawyers has fallen 95 percent short of its goal.

    Bowdoin, 76, was arrested in Florida in December 2010 and freed on bail. Federal prosecutors described him as a recidivist securities huckster who’d presided over Quincy-based AdSurfDaily.

    ASD was an “autosurf” Ponzi scheme disguised as an “advertising company,” and Bowdoin used some of the money sent in by members to make campaign donations to the National Republican Congressional Committee, prosecutors said.

    An early version of Bowdoin’s alleged $110 million Ponzi scheme collapsed in 2007, leaving members holding the bag, according to records. After weeks in limbo, ASD switched the URL from which the purported “program” operated and relaunched under the new name of ASD Cash Generator, sucking in a new crop of victims, prosecutors said.

    The accounts and unpaid redemptions of participants active at the time of the 2007 collapse were rolled into the new scheme, and incoming members were not told about the original Ponzi failure and that members were getting paid with recycled cash, prosecutors said.

    ASD eventually gained momentum by creating a video lie about the program’s purported legality and by arranging “rallies” in U.S. cities. In late 2007, Bowdoin added a second autosurf Ponzi known as LaFuenteDinero — Spanish for “the fountain of money” — to his criminal tool kit, and compounded his deception, prosecutors said.

    In 2008, Bowdoin and Clarence Busby Jr. of Acworth, Ga., struck up a partnership that resulted in the creation of an autosurf known as Golden Panda Ad Builder, describing it as ASD’s “Chinese” option, according to records.

    The SEC has described Busby as a prime-bank swindler implicated in three securities schemes in the 1990s. Busby has described himself as a minister and real-estate professional. Records suggest he has lost property in Georgia to foreclosure, was the operator of yet-another surf scheme known as BizAdSplash (BAS) and was on the receiving end of an IRS tax lien.

    BAS went missing in early 2010, after positioning itself as a purported offshore business. Its web servers resolved to Panama.

    Like Busby, Bowdoin also was implicated in securities schemes in the 1990s, according to records. He narrowly avoided prison time in Alabama by agreeing to make restitution to defrauded investors.

    Bowdoin has asked Facebook members to “like” his site. The Facebook site does not mention that three ASD members filed a prospective-class action lawsuit against Bowdoin in 2009, accusing him of racketeering and disguising the nature of ASD’s business.

    Nor does the Facebook site reveal that ASD and related businesses have been on the receiving end of at least three civil-forfeiture judgments totaling about $80 million. In August 2008, the U.S. Secret Service seized about $65.8 million from 10 personal bank accounts of Bowdoin through which he was operating the ASD business, according to records.

    The seizure occurred after ASD members falsely claimed that Bowdoin had received an award for business acumen from then-President George W. Bush, prosecutors said. Bowdoin filed two appeals when forfeiture orders were entered against his assets, but lost both. His new appeals for cash are targeted at the people Bowdoin is accused of defrauding: the ASD membership base.

    In the aftermath of the 2008 seizures, Bowdoin described federal prosecutors in the District of Columbia — the venue in which the forfeiture actions were filed — as “Satan.” Bowdoin’s use of the word “Satan” occurred just weeks after he described himself at a company “rally” in Las Vegas as a Christian “money magnet.”

    Bowdoin also compared the seizures to the 9/11 attacks, saying the actions against ASD by the Secret Service were “30 times worse” in some ways than the terrorist attacks that killed nearly 3,000 people in New York, Pennsylvania and Washington.

    One of the Washington victims of the 9/11 attacks was Barbara Olson, an author, television commentator and former assistant U.S. Attorney (AUSA) in the District of Columbia office. Olson was the wife of former U.S. Solicitor General Theodore Olson.

    In commemoration of the 10-year anniversary of the 9/11 attacks, prosecutors in the District of Columbia dedicated a national-security conference room in Barbara Olson’s memory last week.

    “As an AUSA in [the District of Columbia] office, and throughout her career, Barbara proved that her convictions ran deep, and that her fidelity — to the values she held dear, the principles she fought to defend, and the countless people whose lives she touched — was unshakeable,” U.S. Attorney General Eric Holder said last week.

    ASD is known to have so-called “sovereign citizens” in its ranks. Two ASD figures — Kenneth Wayne Leaming and Christian Oesch — sought unsuccessfully to sue the government for its actions in the ASD case, apparently seeking the staggering sum of more than $29 trillion, more than twice the U.S. Gross Domestic Product in 2009.

    Leaming was accused in Washington state in 2005 of practicing law without a license. Records show he also was involved in a lawsuit that sought more than $9 billion against a local hospital in Washington state. Filings in the case show that Leaming sought liens against the hospital and even sought to attach it water and mineral rights. At least two notaries public in Washington state with ties to Leaming have had their licenses revoked. The names of both notaries appear on the docket of U.S. District Judge Rosemary Collyer in the District of Columbia.

    Collyer is presiding over the ASD-related forfeiture actions and the criminal case against Bowdoin. Bowdoin twice has tried to have Collyer removed from the case. Both efforts failed, and the U.S. Court of Appeals has upheld the forfeiture orders she issued in the case.

    Sixty-two people (as of the time of this post) have “liked” Bowdoin’s Facebook fan page. It is unclear if Bowdoin’s fans have followed the ASD case closely.

  • BULLETIN: Club Asteria Reconfigures E-Magazine, Removes All Content Related To Will Smith; Famed Entertainer’s Likeness Appeared Above ‘JOIN NOW’ Button

    Now you see it, now you don't: Club Asteria's September 2011 recruitment magazine has been reconfigured to remove all content related to actor Will Smith.

    BULLETIN: UPDATED 11:04 P.M. EDT (U.S.A.) Club Asteria’s September 2011 e-magazine has been reconfigured, wiping out an entire page of content on entertainment icon Will Smith that created the appearance that the actor and rapper had endorsed the company and was serving as a spokesman.

    The reason for the removal and the precise time at which the content was deleted were not immediately clear. On Sept. 9, the PP Blog asked Smith’s publicist whether the actor was aware that Club Asteria was using his image and publishing a purported “interview” with Smith.

    In the e-magazine’s original configuration, a Page 7 headline that used Smith’s name (and ended with an exclamation point), an image of the actor and a link to a video package featuring Smith appeared above Club Asteria’s “JOIN NOW!” button. The Smith-related content now has been replaced with what appears to be a generic article titled “Success Means More Than Just Having Money.”

    The Page 7 replacement article does not reference Smith in any context. Previously, the page featured a headline of “Will Smith Inspires the World With Enthusiasm for Life, Work & People!”

    Also gone from the page was a short deck that consisted solely of these words: “An Interview With Will Smith.” Meanwhile, a single paragraph that once existed below the deck and used the phrase “in this interview and discussion Will shares” also was a casualty of the sudden reconfiguration.

    Gone, too, were an image of Smith and a video link in which Club Asteria appeared to have reframed a YouTube video of Smith-related interview footage and caused the video to play inside the e-magazine.

    Club Asteria, which was widely promoted on the Ponzi boards, had its PayPal account frozen and came under fire by the Italian securities regulator CONSOB earlier this year, uses the publication to recruit affiliates.

    See earlier story.