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  • FLORIDA — AGAIN: Man Arrested Amid Allegations He Swindled Investors In ‘Yogurt-Based Product To Re-Grow Hair’; Joseph P. Fox Of Telogenesis Inc. Was Recidivist Offender, State Says

    A Florida man who served jail time in an earlier scheme in California has been arrested by the Miami Beach Police Department and agents from the Florida Office of Financial Regulation (OFR), amid allegations he swindled investors in a “yogurt-based product to re-grow hair,” OFR said.

    Joseph P. Fox, president of Telogenesis Inc. of Miami Beach, was charged with Grand Theft and Organized Scheme to Defraud in his sale of Telogenesis stock.

    Beginning in 2007, Fox sold Telogenesis stock for $1,000 a share to at least 59 investors. All in all, he gathered $380,000 in the scheme and used most of the money to support his lifestyle, OFR said.

    In 2002, OFR said, Fox was charged with grand theft in California and served 270 days in jail.

    The Telogenesis scheme was similar to the California scheme, OFR said.

    Fox made “false representations” about the financial soundness of Telogenesis and its development of the yogurt-based hair product, positioning it as “a breakthrough in the cosmetic industry,” OFR said.

    A website from which a Telogenesis product was pitched as being available “very soon” for $1,999 included links to medical journals that appeared to have no tie to the product — and also to Oprah Winfrey’s website.

    Winfrey’s site also appeared to have no tie to the Telogenesis product, which was advertised on IGrowHair.com

    It is not uncommon for hucksters to try to create the appearance that prominent medical organizations, celebrities and the government endorse products when they do not.

  • Like MPB Today And Data Network Affiliates’ Promoters, TVI Express Pitchmen Used Images Of Warren Buffett And Donald Trump; Government Of South Africa Reportedly Opens Criminal Probe Amid Pyramid Allegations

    TVI Express, an MLM company whose pitchmen have used images of business titans Warren Buffett and Donald Trump to plant the seed they backed the firm, has come under criminal investigation in South Africa, according to web records and a media site.

    Buffett and Trump are believed to have no ties to the firm.

    News of the TVI criminal probe first was reported Dec. 30 by The New Age. The publication quotes a spokesperson for the South Africa Department of Trade and Industry, noting the TVI matter has become a “police case” involving pyramid-scheme allegations.

    TVI, purportedly based in London, also is under fire in Australia. Meanwhile, there are reports the company has come under fire in the U.S. state of Georgia. Reports that Georgia officials have issued a cease-and-desist order could not be confirmed immediately.

    It was not immediately clear if South Africa would seek to determine why TVI promoters sought to plant the seed that Buffett and Trump backed TVI, which purports to be in the travel business. An image of Buffett appears on the TVI home page — and images of Trump and former President Bill Clinton appear on an internal page.

    A number of MLM schemes have produced photos or made references to Clinton, who once delivered remarks to tout the direct-selling industry. Clinton did not endorse a specific company, and the Code of Conduct of the Direct Selling Association (DSA) specifically prohibits “Deceptive or Unlawful Consumer or Recruiting Practices.”

    In its Code of Conduct, DSA specifically requires member companies to provide information that is “accurate and complete.” At the same time, DSA says member companies “shall not present any selling opportunity to any prospective independent salesperson in a false, deceptive or misleading manner.”

    TVI Express is not listed as a DSA member on the organization’s website.

    Even as news about the TVI criminal probe was appearing online in South Africa, news that Buffett’s name allegedly had been used to sanitize elements of the George Theodule Ponzi scheme in Florida was appearing in the United States.

    Images of Buffett and Trump also have been used by promoters of a purported “grocery” MLM in Florida known as MPB Today. Separately, images (and references) to Trump and television icon Oprah Winfrey have been used in promotions for Data Network Affiliates (DNA), an MLM company purportedly in the business of building a database to help the U.S. government and the AMBER Alert program rescue abducted children.

    DNA now appears to have morphed into a company known as OWOW, which has positioned its products as cancer cures or treatments and even as a means of preventing the surgical amputation of limbs and growing tomatoes twice the size of ordinary tomatoes. DNA has a rating of “F” from the Better Business Bureau, the organization’s lowest.

    During the summer of 2010, DNA changed the name of an offering known as the Business Benefit Package (BBP) to the “BBB,” the acronym used by the Better Business Bureau. The BBP package debuted in March. The name change appeared to be an effort to cloud search-engine results and confuse prospects who were searching for BBB information about DNA online.

    Eventually websites bearing DNA’s name began to resolve to the OWOW site. DNA also used names such as TagEveryCar.com and LockInYourFreeSpot.com. Those sites also now resolve to the OWOW site.

    See story on a major case brought by the FTC in August 2010. Among other things, the case alleged that images of Winfrey and Rachel Ray were used in sales promos without their consent in an acai-berry scam.

  • Georgia Fraud Case Had ASD-Like Elements; Woman Sentenced To 60 Years For Scheme; Cynthia O’Tyson Was Recidivist Offender; TV Camera Captures Sentencing

    Andy and Faye Bowdoin posed for a picture with a Gadsden County (Fla.) Chamber of Commerce official in 2008. Andy Bowdoin later was accused of operating a massive Ponzi scheme. In a separate case in Georgia this week, Cynthia O'Tyson was sentenced to 60 years in prison for a scheme in which she reportedly used contacts at her church and the local Chamber of Commerce to give her scheme an air of legitimacy.

    A Georgia woman with a history of stealing and being placed on probation after serving short stints in custody now has been sentenced to 60 years in prison.

    Cynthia O’Tyson’s sentencing was captured in Superior Court by WRDW-TV, the CBS affiliate in Augusta. The station led its 5 p.m. and 6 p.m. newscasts yesterday with reports about the sentencing, noting that O’Tyson had scammed friends and members of her own family and community into believing she was a supplier of discount electronics.

    Meanwhile, the Augusta Chronicle reported that O’Tyson even had scammed the families of local officials and used members of her church and the Columbia County Chamber of Commerce to give the scheme an air of legitimacy.

    The O’Tyson scheme was reminiscent of the alleged AdSurfDaily Ponzi scheme in Florida. Federal prosecutors said ASD President Andy Bowdoin traded on religion. On July 2, 2008, Bowdoin, who was implicated in securities swindles in Alabama during the 1990s and also had a business partner implicated in a separate swindle during the 1990s, addressed the Gadsden County Chamber of Commerce.

    Initially pleased that ASD, which positioned itself as a jobs-creator and economic turbine, had chosen the struggling small town of Quincy, Fla., as its home, the Chamber touted ASD and the company.

    But the Chamber later called the FBI when questions were raised about Bowdoin’s purported “advertising” firm, according to federal court records. The U.S. Secret Service later described ASD as a massive Ponzi scheme that had gathered at least $110 million. Bowdoin described himself as a “money magnet” and asked members to imagine ASD profits just “flowing” to them after purchasing “ad packs” from the company and committing themselves to have an “attitude of gratitude” with God.

    O’Tyson’s scheme also was reminiscent of the much-larger scheme operated in Minnesota by convicted Ponzi swindler Tom Petters. Petters’ investors believed he sold discount merchandise to Big Box retailers.

    Although Petters’ crime was much larger than O’Tyson’s merchandise scam, he was sentenced to 10 years fewer than the Georgia woman. O’Tyson called her bogus company “Wholesale Liquidators.”

    See the O’Tyson report (video/print) on WRDW-TV.

    Read the O’Tyson sentencing story in the Augusta Chronicle.

  • OH, FLORIDA! Spectacular New Allegations Raised In George Theodule Ponzi Scheme; Bank Sued For $68 Million Amid Accusation It Funneled Investors’ Cash To Fraudster Through ‘Drive-Thru’ Window

    The Miami Herald broke the story last night (see link at bottom of post) that Wells Fargo, which merged with Wachovia Bank in December 2008 and assumed its liabilities, has been sued for $68 million by the court-appointed receiver in the George Theodule Ponzi scheme in Florida. Theodule largely targeted the Haitian-American community in his scheme — in part by trading on religion, in part by routing money to the scheme through “investment clubs”  and in part by making investors believe a “regulatory agency” that later proved to be bogus was keeping their money safe.

    Allegations contained in the complaint by receiver Jonathan Perlman are both mind-numbing and stunning, perhaps especially given the fact that Wachovia was charged criminally in a separate case in March 2009 with willfully failing to establish an anti-money laundering program and opening its doors to an international cocaine cartel. Wachovia settled the criminal case by entering into a deferred prosecution agreement with the Justice Department and agreeing to pay $160 million.

    Now, with the filing of the complaint by Perlman, Wachovia’s allegedly lax standards have jumped up to bite it again.

    Among the dramatic allegations against the bank:

    • A Wachovia branch in Lake Worth, Fla., accepted Theodule’s business after Washington Mutual (WAMU), his original bank, rejected it after observing a pattern of suspicious transactions. The Wachovia branch that  opened multiple accounts for Theodule was “just down the street” from the WAMU branch — and Wachovia did not call WAMU to make any inquiries about Theodule.
    • Wachovia did not review Theodule’s website and did not verify the corporate standing of his business.
    • Wachovia initially misclassified Theodule’s business as a “Professional Service Provider with a business activity designation of ‘Money Service Business.’” The initial classification triggered an internal Wachovia review on the very same day he opened the accounts. Several days later, Wachovia determined that Theodule actually was a “financial advisor” in the “investment business” — and the bank changed the business designation to “Securities/Commodities.”
    • Wachovia’s own reclassification of Theodule’s business gave it the knowledge that Theodule owed a fiduciary duty to his clients. Regardless, Wachovia did nothing to confirm that either Theodule or his companies were properly licensed. A “simple inquiry” to licensing agencies would have shown they were not. Not even cursory Google research was performed. The Ponzi nature of the business “would have been self-evident” had even basic research been performed.
    • Wachovia missed suspicions about Theodule that had been raised online, including information that suggested he had lied about being the “finance director at several large companies” and truthful assertions that “investment clubs” were funding his operations.
    • Within five weeks of the opening of Theodule’s accounts at Wachovia, 36 “investment club” accounts suddenly were opened at Wachovia. The club accounts fed Theodule’s Ponzi scheme. During the first month alone, the club accounts fed $2.2 million to the Ponzi. Theodule’s sister, wife and the best man at his wedding all opened feeder accounts at Wachovia.
    • A large sum of cash — actual currency — from  trusting investors was deposited into the feeder accounts. Wachovia then transferred the deposits to Theodule’s business account. During the first month, Wachovia permitted Theodule to withdraw $235,000 in actual “greenbacks,” even though the bank knew the money belonged to investors.
    • Wachovia made “special accommodations for Theodule’s extraordinary cash withdrawals by agreeing to deliver large amounts of cash through the drive-thru window in order to reduce the risk of theft from having Theodule or a Creative Capital employee walk out of the branch carrying the large bags of cash Wachovia was providing.”
    • Wachovia noticed suspicious activity in a feeder account opened in the name of Wealth Builders Circle LLC, which was managed by Dorothy Delisfort, (who went on to become Theodule’s wife).  The bank froze the Wealth Builders Circle account but did not freeze Theodule’s accounts. The bank lifted the freeze on the Wealth Builders Circle account four days later — after it received a fax from a Theodule company. The fax purported to be a “business plan.” Among the assertions in the fax was that the Theodule company was following “the lessons learned by the great investing minds of our time . . . including Warren Buffet . . .”
    • Theodule and his cohorts laundered more than $10 million through Wachovia between May 9, 2008, and July 31, 2008. They withdrew from the bank nearly $5 million more than they deposited.

    Read the Miami Herald story from last night.

    (NOTE: At the moment, the complaint is available on the newspaper’s website. It is worth a full read. An exhibit from the SEC case attached to the complaint lists the names of the “investment clubs.” One of the names referenced is Crowne Gold Inc.  Many of the clubs had high-sounding names. It was not immediately clear if the Crowne Gold Inc. referenced in the Wachovia lawsuit was the same Crowne Gold Inc. referenced in court filings in the EMG/FinanzasForex case.  The alleged EMG/Finanzas scheme was yet-another scheme pitched from the ASA Monitor and TalkGold forums — and some of the money has been linked to the international narcotics trade. It also is worth noting that scammers routinely use the names of business titans such as Warren Buffet to pull off massive swindles. As noted above, the lawsuit against Wachovia in the Theodule case alleges that Buffet’s name was used to sanitize the Theodule caper.)

  • Missouri Man Banned From Investment Trade After Secretary Of State’s Office Discovers He Sold Unregistered Securities Of ‘Time-Share’ Resort To Senior Citizens In Their Eighties

    Missouri Sectetary of State Robin Carnahan

    A Missouri man who worked for a legitimate investment business near St. Louis sold unregistered securities in a Wisconsin-based, time-share “resort” business to elderly clients, Missouri officials said.

    The securities came in the form of “unregistered real estate investments,” the officials said.

    James McClellan Jr., of Chesterfield, never told 18 Missouri investors — at least six of whom were in their eighties — that the time-share business was experiencing financial difficulties and that the investments were not offered through his employer.

    McClellan was a managing member of the out-of-state time-share business, the state charged. Officials identified the business as Meadow Ridge of Door County LLC, of Egg Harbor, Wisc.

    McClellan now has been banned from the securities business by the state and assessed a penalty of $120,000. His former employer, Huntleigh Securities Corp., also was assessed a penalty of $120,000 for failure to supervise McClellan, who conducted “off the books” securities transactions, the state said.

    “It is unacceptable for financial professionals to misuse their clients’ trust,” Missouri Secretary of State Robin Carnahan said. “My office made sure that this broker won’t be able to work in the industry in Missouri again and that his employer knows how to better supervise its employees.

    Carnahan’s office called McClellan’s deal a “shady real estate scheme” into which investors had plowed more than $4.4 million.

  • BULLETIN: National Institutes Of Health Says OWOW Multilevel-Marketing Firm Using Agency Press Release On Cancer Research Inappropriately; Separately, Piccolo Says ‘Magnetic’ Product Prevented Amputation — And Also Helps Tomatoes Grow

    Phil Piccolo, also known as "Mr. P.," strides the stage to hawk OWOW products. Piccolo claims the company's magnetic line assists in hair retention and even prevents the surgical amputation of limbs. The products also improve dairy production and help home gardeners grow tomatoes double the size of ordinary tomatoes, according to Piccolo.

    BULLETIN: The National Institutes of Health (NIH), a division of the U.S. Department of Health and Human Services, said this morning that the OWOW multilevel-marketing program was using agency materials on cancer research inappropriately.

    OWOW is associated with Internet Marketer Phil Piccolo. The company has positioned at least two products sold MLM-style as cancer cures or treatments, including a bottled water.

    On Dec. 26, the bottled-water product was touted on an OWOW affiliate’s website. The site included a link to a Dec. 21 news release by NIH about cancer research, specifically research pertaining to “a rare cancer of the digestive tract . . . linked to a shutdown in an enzyme that helps supply oxygen to cells.”

    The affiliate claimed that “OWOW Water Is THE ONLY WATER that brings Oxygen to the cell from within the cell.

    “Now check out this Article written almost on the day that OWOW received the exclusive marketing rights to our Oxyengenated Water,” the affiliate instructed, pointing prospects to the NIH website.

    “NIH does not endorse products and this promo is an inappropriate use of a press release that has a tenuous connection to this product at best,” NIH spokesman and senior science writer Michael J. Miller told the PP Blog this morning.

    How the agency would proceed was not immediately clear.

    See earlier story on bizarre events that ensued after OWOW made a cancer claim about a nonwater product.

    A “Non-Affiliated Support” link on the OWOW website includes no contact information for the company and no form through which prospects or members of the media can submit questions.

    OWOW appears to be the successor company to Data Network Affiliates (DNA), which purported to be in the business of creating a database to help the government and the AMBER Alert program rescue abducted children.

    No evidence has emerged that DNA had the capacity to help the government do anything.

    Separately — and on the same OWOW-connected website — a series of videos appears. Piccolo, also known as “Mr. P.,” is featured in a video that hawks purported magnetic products positioned as treatments for everything from bruising and hair retention to preventing the surgical amputation of limbs.

    Meanwhile, video viewers also are told that the magnetic products can be used to help tomatoes, vegetables and fruits grow “twice the size.”

    At the same time, the products also are positioned as helpful to dairy farmers.

    “Dairy farmers who feed their cows through this here unit right here produce more milk per cow,” Piccolo claims in the video.

    Family pets hearing a call from the grim reaper can extend their lives if their owners use the products, Piccolo instructs viewers.

    “Your pets? If you have a pet and your pet’s on its last leg[s], bring them a Magnetic Shower,” Piccolo coaches. “You won’t believe what it will do for your pet.”

    See Video

    “If it wasn’t for magnets, I really believe I’d be in a wheelchair right now,” Piccolo says in the video. Piccolo asserted he’d been bucked off a horse and suffered the worst bruise his doctors had ever seen — but used magnetic products to save the day quickly, heal bruising and maintain his ability to walk.

    One man who suffered a heart attack was able to avoid a leg amputation by using the magnetic shower head, according to the video.

    It perhaps was a good idea to purchase the product before “Monday,” because the price was going to increase, Piccolo tells the audience. The date upon which the OWOW video was recorded was not immediately clear.

  • BULLETIN: Salt Lake City Man Arraigned In Atlanta On Charges Of Running Ponzi And Fraud Scheme In Which Tens Of Millions Of Dollars Mysteriously Vanished Offshore; Canadian Also Charged In Alleged Caper

    BULLETIN: Two men — one from Salt Lake City, the other from Belleville, Ontario — have been charged by federal prosecutors in Atlanta with operating a Ponzi and fraud scheme in which tens of millions of dollars mysteriously disappeared overseas.

    Thomas Repke, 57, was arraigned today in Atlanta. Prosecutors said he worked with the Canadian man, James Jeffery, 58, to fleece more than $30 million from investors.

    “This indictment alleges a major international investment fraud scheme that defrauded over 100 victims around the country out of tens of millions of dollars, most of which has been transferred to overseas accounts,” said U.S. Attorney Sally Quillian Yates.

    The scheme began in 2006 and centered around a company known as Coadum Capital in which investors were told that they were purchasing shares in hedge funds and that their investment capital was kept in “escrow” accounts and thus not at risk. Participants expected to earn up to 5 percent a month.

    “[A]lthough investors were instructed to and did transmit much of their funds to one or more supposed ‘escrow’ accounts, including one in Atlanta, the money did not stay in any such account,” prosecutors said. “Rather, unbeknownst to investors, Repke and Jeffery transferred over $20 million overseas to accounts in Switzerland and the Mediterranean island of Malta.

    “This money was supposedly invested in a series of hedge funds or other investments operated by a supposed Malta-based trader,” prosecutors said.

    But the investments “produced no earnings at all,” prosecutors said. “[B]y the end of 2007 only a fraction of the transferred funds remained deposited in these European accounts.”

    Regardless, Repke and Jeffery “continued to send account statements every month to investors continuing to represent that their funds remained intact, preserved in escrow accounts, and that monthly earnings of 3-5% continued to accrue,” prosecutors said.

    Both Repke and Jeffery had “no control” over the overseas accounts — accounts “about which they received little or no information,” prosecutors said.

    Investigators obtained correspondence that showed Repke and Jeffery both “were frustrated in their repeated requests to obtain information about where the funds were being held, how they were being used by the trader, and whether and to what extent earnings were being generated,” prosecutors said.

    The SEC referred the case for criminal investigation after bringing an administrative action and lawsuit against Repke and Jeffery in 2008, according to records.

    “Those who prey on the investing public in this way will continue to find themselves facing federal felony charges,” Yates said.

    The investigation was coordinated by the Financial Fraud Enforcement Task Force. prosecutors said Jeffery had not yet made his initial court appearance in the case.

    Repke potentially faces decades in prison, if convicted. He was charged with multiple counts of mail fraud, wire fraud and conspiracy.

    (NOTE: The SEC complaint references a Malta company known as “Exodus Equities Inc,”  which apparently was tied to an entity known as “Exodus Platinum Genesis Fund Ltd.” Also of note for additional case information/filings is the website of Pat Huddleston, the court-appointed receiver in the SEC case.)

  • UPDATE: MPB Today Now Says Gary Calhoun Was Selected As 2003 ‘Businessman Of The Year’ By National Republican Congressional Committee

    Members of the purported MPB Today “grocery” program now are touting company President Gary Calhoun as 2003’s “Businessman of the Year” in promotional news releases and articles online.

    The company itself is doing the same thing on its website, explaining that Calhoun “was chosen as ‘Outstanding Young Men (sic) in America 1982’ . . . and in 2003 was selected as ‘Businessman of the Year’ by the National Republican Congressional Committee’s [NRCC] Business Advisory Council.”

    None of the promos explains how one obtains either award. Regardless, the promos plant the seed that the awards are important.

    Various references to the NRCC “Businessman of the Year” award appear online. The award is linked to Republican fund-raising, although it is unclear if all people who’ve claimed the award actually have contributed funds. It was not immediately clear if Calhoun donated money to NRCC in either his name or the name of a company to receive the award in 2003.

    AdSurfDaily President Andy Bowdoin, accused of operating a Ponzi scheme that gathered at least $110 million and making NRCC donations with Ponzi proceeds, claimed a similar award known as the “Medal of Distinction.” Like the “Businessman of the Year” award, the “Medal of Distinction” is doled out by NRCC.

    The award can be obtained for writing a check for what amounts to the purchase of banquet tickets.

    MPB Today claims that members who pay $200 to the MLM company one time can receive free groceries for life. Promoters have claimed that liars and thieves exist within MPB Today, but that prospects nevertheless should join the company.

    At least one bank whose name has appeared in MPB Today promotions is operating under an FDIC consent agreement, according to federal records. MPB Today purports to have tens of thousands of members while enjoying an “unprecedented expansion.” Other promos show that MPB Today also has a relationship with a second bank.

    Calhoun was the subject of a 2006 inquiry by the Food and Drug Administration, amid allegations he was selling a product that purported to treat multiple diseases, including “Alzheimer’s, Parkinson’s, amyotrophic lateral sclerosis, axonal and other neuropathies, Down’s and other syndromes.”

    The MPB Today program has been hawked on Internet boards associated with Ponzi schemes. The program has been targeted at senior citizens, foreclosure subjects, Food Stamp recipients, people of faith, college students and victims of the ASD Ponzi scheme.

    Promoters of MPB Today have been linked to bizarre sales presentations, including one in which President Obama, First Lady Michelle Obama and Secretary of State Hillary Clinton were depicted as Nazis. One script for an MPB Today promo suggested the Obamas aspired to eat dog food and table scraps left by the family pet and emerge from the ranks of welfare recipients.

    “Hmm, I should prolly call my Food Stamp worker now that I’ve joined MPB,” the script read in part, depicting the First Family as welfare recipients. It also used the words “monkeys” and “Brown-noser” in the context of the Obama presidency.

    Despite the claim that Calhoun was a top businessman, MPB Today has not issued a news release to distance itself from the bizarre promotion that pilloried the Obamas and Clinton, who was depicted as a drunken Nazi-In-Chief who received a left-handed salute from Obama and a greeting of “Heil Hitlary.”

    Michelle Obama was depicted in the ad as having been knocked out by Clinton a short time after the First Lady experienced an embarrassing gas attack in the Oval Office after sampling beans at a Sam’s Club store.

    MPB Today has not publicly disclaimed and disassociated itself from the ad, even though some members have insisted the firm is associated with Walmart and routinely have used Walmart’s intellectual property in sales promos. Hillary Clinton was the first woman to serve on Walmart’s board of directors.

    The company removed an image of a Walmart store from its website in September. It also removed images of business tycoons Donald Trump and Warren Buffet. Regardless, MPB today promoters continue to use the images in sales promotions, giving rise to questions about whether the company has come into possession of money tainted by serial deceptions.

    Agencies such as the Federal Trade Commission say it is not uncommon for fraudsters to use the names of famous people and entities when promoting scams. In September, the U.S. Department of Agriculture said it was investigating certain claims about the MPB Today program.

    MPB Today now appears to refer to Walmart as a “national grocery retailer.”

    Other promos from MPB Today have asked members to lay down their “pipe bombs” when contemplating doing business with Walmart. Still other promos have insisted that MPB Today is associated with the federal Food Stamp program.

    MPB Today now references the Food Stamp program on its website — in the context of Calhoun emerging from the ranks of Food Stamp recipients after lean times passed.

    “Gary has experienced his share of failures as well,” the site notes. “There’s a 2-picture frame on the wall in his office. In one of the picture openings, it states, ‘Remember Where God Brought You From” and in the other opening . . . his old Food Stamp card.

    “And as many successful business people have stated, it was adversity and failure that caused them to rise,” the site notes. “Gary firmly believes this. ‘Losing it all then getting up and going again brings a resolve like nothing else.

    “I really believe the success we are experiencing today is a direct result of the adversity I’ve been through[,]” Gary says.

    The NRCC “Businessman of the Year” award and the “Medal of Distinction” have been linked to scandals and bids to create legitimacy by establishing purported ties to prominent politicians.

    ASD members, for example, claimed that Bowdoin had received an important award for business achievement from the President of the United States. Meanwhile, Abdul Tawala Ibn Ali Alishtari, convicted of financing terror and fleecing participants in an investment scheme, also appears to have claimed to be a person whose counsel the Republican party valued.

    Earlier this month, the CFTC charged Ryan A. Nassbridges with operating a precious-metals scheme. A website registered in the name of Nassbridge’s wife purports that he was the recipient of both the “Medal of Distinction” and the “Businessman of the Year” award.

  • A ‘MONEY MAGNET’ AT WORK: Andy Bowdoin Wows Crowd With Photo Of Building Later Seized; Indicted Autosurf Operator Gives Gordon Gekko-Like Speech In Which Greed Is Recast As A ‘Positive’

    ASD President Andy Bowdoin wowed a "rally" crowd by showing a photo of this building in Quincy, Fla. The U.S. Secret Service later seized the building, saying it was purchased from the proceeds of a massive Ponzi scheme. Federal prosecutors said the scheme traded on religion and that Bowdoin emerged with "followers."

    EDITOR’S NOTE: Two videos of sales pitches by AdSurfDaily President Andy Bowdoin are linked below. Both are available at publicly accessible websites.

    The first video shows Bowdoin, in the summer of 2008, wowing a crowd by showing ASD rally attendees a photo of ASD’s new headquarters building in Quincy, Fla. The building later was seized by the U.S. Secret Service as the proceeds of a criminal enterprise. Also of note in the video is a claim by Bowdoin that George Harris is the head of ASD’s purported real-estate division. The video also references Judy Harris.

    George Harris is the son of Andy Bowdoin’s wife, Edna Faye Bowdoin. The Harris home in Tallahassee was seized in December 2008. Federal prosecutors said the mortgage on the home was retired with Ponzi proceeds. Neither George nor Judy Harris ever filed a claim to the home.

    The AdViewGlobal (AVG) autosurf, which launched after the seizure of Bowdoin’s assets, the Harris home and the filing of a racketeering lawsuit against Bowdoin, later identified George and Judy Harris as its operators. AVG purported to be a “private association” headquartered in Uruguay. The surf made the claim it was a private association in February 2009. The claim coincided with a decision by Bowdoin to reenter the ASD forfeiture case as a pro-se litigant.

    Weeks earlier, in January 2009, Bowdoin had submitted to the forfeiture of tens of millions of dollars seized from his bank accounts. Despite the fact that Bowdoin had advised a federal judge that he was withdrawing his claims to the seized money “with prejudice” — meaning he intended never again to reinstitute his claims — he nevertheless sought to reenter the case, acting as his own attorney.

    By April 2009, federal prosecutors said that, not only had Bowdoin submitted to the forfeiture and formally advised a federal judge of his decision to do so, but that Bowdoin also had signed a proffer letter and acknowledged the government’s material allegations in the case were all true.

    Bowdoin met with federal prosecutors in Florida in late 2008 and early 2009 for a period of at least four days, according to court filings.

    Of particular note in the second video is the timing: It was shot (presumably by a rally attendee) in Las Vegas on May 31, 2008. Bowdoin is shown in the video defining himself as a “money magnet” and encouraging ASD members to become the same. The federal grand jury that indicted Bowdoin began to meet in May 2009. Its indictment of Bowdoin was unsealed earlier this month and makes repeated references to the “money-magnet” line.

    The video shows Bowdoin making references to God in his Las Vegas sales pitch. It begins with a Gordon Gekko-like suggestion by Bowdoin that greed is a net positive. Gekko, of course, is the fictional character played by Michael Douglas in the 1987 movie “Wall Street.” Douglas won an Oscar for the role.

    “The point is, ladies and gentleman, that greed, for lack of a better word, is good,” the Gekko character memorably advised the movie audience. “Greed is right, greed works.”

    Here is what Bowdoin said from the stage 21 years later in Las Vegas:

    “Just like, you know, [the belief that] rich people are greedy. Turn that into a positive: Rich people are generous. All right. And you turn it into a positive like that, you repeat that — at least seven times, every time you think about it: Rich people are generous. Because you’ve got to reprogram that subconscious mind.”

    Bowdoin went on to inform Las Vegas rally attendees that he had a plan to create 100,000 millionaires in three years and that it was important for ASD members “to have an attitude of gratitude with God.”

    “And I always say, ‘Thank you, God, for developing me into a money magnet.’ And I see myself as a money magnet in attracting money and, I say, attracting large sums of money,” Bowdoin said.

    He exhorted ASD members to internalize his message and imagine riches “flowing” in from ASD, the PP Blog reported on May 7, 2009.

    About three weeks after the Las Vegas rally — a rally at which Bowdoin encouraged attendees to spend unlimited sums on ASD “ad packs” because a $50,000 ceiling on purchases would be enforced two days later — the $157,000 mortgage was retired on the Harris home.

    ASD’s spending binge actually began about 11 days after Bowdoin exited the Las Vegas stage and ultimately consumed more than $1 million, federal prosecutors said. Other post-rally purchases included jet skis, marine equipment, a Cabana boat, haul trailers, real estate and at least three automobiles, including a Lincoln. One of the automobiles was purchased for George and Judy Harris, according to prosecutors.

    The retired Harris mortgage and the car — a Honda — cost ASD members nearly $186,000, prosecutors said.

    Video One

    Video Two

  • UPDATE: E-Bullion, Firm Alleged To Have Provided Payment Services To ASD, Linked To Alleged Legisi Ponzi Scheme; Like ASD, FEDI Fraud Scheme Called Payments ‘Rebates’

    Andy Bowdoin

    UPDATED 2:25 P.M. ET (U.S.A.) Still pushing autosurf and HYIP frauds?

    Last week, the PP Blog reported that the U.S. Secret Service and federal prosecutors had established a link between California-based E-Bullion and Florida-based AdSurfDaily. E-Bullion is a shuttered payment processor whose owner, James Fayed, is awaiting trial on charges of murdering his wife, Pamela Fayed, whom prosecutors said wished to cooperate in the E-Bullion probe.

    It was the first public assertion by the government that ASD had a tie to E-Bullion.

    The Blog further reported that E-Bullion had been linked to at least three alleged Ponzi or fraud schemes: ASD, Gold Quest International (GQI) and Flat Electronic Data Interchange (FEDI), whose convicted operator, Abdul Tawala Ibn Ali Alishtari, was associated with convicted Ponzi schemer Brian David Anderson.

    Alishtari, also known as Michael Mixon, was convicted in 2009 of financing terrorism. Anderson, a FEDI pitchman, was sentenced to federal prison for his role in yet-another Ponzi scheme known as Frontier Assets. He also has been linked to a mysterious scheme known as the “Alpha Project.”

    Like ASD’s Andy Bowdoin, Alishtari donated money to the National Republican Congressional Committee, according to the Federal Election Commission database. Documents reviewed by the PP Blog show that payments from the FEDI scheme were referred to as “rebates.” ASD also called its payments to participants “rebates.”

    Today the PP Blog is reporting that federal investigators also have established a link between E-Bullion and Legisi, a company whose operator, Gregory N. McKnight, was accused by the SEC in May 2008 of operating a massive Ponzi and fraud scheme based in Michigan. During the same month, the SEC also accused GQI of operating a massive Ponzi and fraud scheme from Las Vegas. Investigators likewise established a GQI link to E-Bullion.

    Documents reviewed by the PP Blog show that records maintained by E-Bullion were the subject of a subpoena issued on Aug. 6, 2008 — five days after tens of millions of dollars were seized by the U.S. Secret Service from bank accounts controlled by ASD’s  Bowdoin. The subpoena was issued in the Legisi case.

    As the PP Blog previously reported, the Secret Service, which used undercover operatives in the ASD case, also used an undercover operative in the Legisi case. In fact, the Blog reported, the Secret Service undercover operative and an undercover operative from the state of Michigan, had a face-to-face meeting with Legisi’s McKnight in his office.

    Legisi later began to act in a fashion that only can be described as bizarre, allegedly morphing into a sort of super-secret enterprise that was exhibiting clear signs of paranoia. Investors, for example, were asked to submit to a loyalty oath and pledge that they weren’t government investigators or informants.

    The AdViewGlobal autosurf, which has close ties to ASD, later began to operate in a similar fashion, morphing into a so-called “private association,” scolding members for asking questions in public and exhibiting paranoia.

    “This Association of members hereby declares that our main objective is to protect our rights to freedom of choice regarding our advertising and marketing information and conduct, through maintaining our Constitutional rights,” AVG announced on its website in February 2009.

    Court records show that the Secret Service also employed undercover operatives in the investigation of the INetGlobal autosurf. An affidavit in the case notes that at least two operatives were present at an INetGlobal function in New York earlier this year and that one undercover agent had been introduced to INetGlobal by an ASD member.

    ASD President Andy Bowdoin was indicted earlier this month on federal charges of wire fraud, securities fraud and selling unregistered securities. Prosecutors alleged he was operating a Ponzi scheme that had gathered at least $110 million. The indictment accused Bowdoin of making campaign donations to the National Republican Congressional Committee with proceeds from the ASD Ponzi scheme.

    Six days ago, prosecutors alleged in a forfeiture complaint that ASD member Erma Seabaugh used E-Bullion in November 2007 to transfer $10,510 to ASD. The alleged transfer occurred about six months before E-Bullion’s name surfaced in the GQI and Legisi cases brought by the SEC.

    When investigators later searched the home of James Fayed in the murder investigation, they found “approximately $60,000 in cash wrapped in plastic material; approximately $3,000,000 in gold; and approximately 31 firearms, including one with a long-range night vision scope, along with thousands of rounds of matching ammunition,” prosecutors alleged.

    Pamela Fayed was stabbed to death in a California parking garage on July 28, 2008. The Secret Service, which had begun its investigation of Bowdoin less than a month earlier, seized his assets three days later, on Aug. 1, 2008.

    The agents said Bowdoin was moving large sums of money outside the United States and had talked about buying a home in another country. In September 2008, the month after ASD’s assets were seized, an indictment was unsealed in Connecticut that accused Robert Hodgins of Virtual Money Inc. of helping a Colombia narcotics operation launder money at ATMs in Medellin.

    Virtual Money Inc. once provided debit cards to ASD, according to an ASD downline group.

    CLOSING NOTE: Read this chilling document from the case against Fayed in California.  Also see this 2007 report from CBS News. CBS reported FEDI operator Alishtari claimed to be “[National Republican Congressional Committee] New York State Businessman of the Year. ASD members later would make similar claims about Bowdoin.)

  • BULLETIN: Now, An Investment-Fraud Scheme Targeted At Indian-Americans And Members Of The Hindu Faith; SEC Says Amit V. Patel Of Minnesota Poses ‘Danger To The Investing Public’

    BULLETIN: The SEC has obtained an asset freeze against a Minnesota man in an alleged investment- and affinity-fraud scheme targeted at Indian-Americans and followers of the Hindu faith.

    Amit V. Patel of Shoreview raised “at least $2.5 million from at least five individuals that he met in the Indian-American community and Hindu temples in Minnesota,” the SEC charged.

    He also “received millions of dollars more from dozens of other individuals.,” the SEC said, alleging that “Patel took advantage of his cultural affinity and shared religious heritage with his victims, and exploited their trust in his standing in the community.”

    Patel was deemed “a danger to the investing public” by the SEC.

    U.S. District Judge Joan N. Ericksen of the District of Minnesota has issued a temporary restraining order against Patel and an order freezing all assets under his control.

    Patel, whom the SEC described as an unemployed engineer, employed a strategy known as Iron Condor that led to a loss of almost all of investors’ money.

    Shoreview is in Ramsey County, in the Minneapolis/St. Paul region.

    Read the SEC complaint.