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  • DEVELOPING STORY: Is It All Over For Surf’s Up? Pro-AdSurfDaily Forum Shows Same Message Former AdViewGlobal Forum Displayed When It Vanished

    UPDATED 5:25 P.M. ET (U.S.A.) Has the Pro-AdSurfDaily Surf’s Up forum followed in the footsteps of a Pro-AdViewGlobal forum and disappeared for the ages?

    The URL for Surf’s Up — http://asdmembers.ning.com — is displaying the same message the AVG forum displayed when it vanished last summer after the controversial autosurf with close ASD ties stopped paying members. Surf’s Up also is known as the ASD Member Advocates Forum.

    Surf’s Up received the official endorsement of ASD in November 2008, just days after a pivotal court ruling went against ASD.

    “This social network has been taken offline by its owner,” the Surf’s Up site now says. Although there is an additional note that “It’s likely that the owner will bring it back online shortly,” the AVG site had the same note and never returned.

    Other autosurfing-related sites hosted on ning.com have displayed the same message — never to return.

    The note on Surf’s Up began to appear at some point today today. A “Page Not Found” message is found in the upper-left corner of the screen. The precise time the site went offline is unclear.

    Also unclear are why the site went offline and who took it offline.

    At one point, Surf’s Up had moderators in common with the AVG site. Recently, though, the Surf’s Up Mods who maintained the AVG forum have made few — if any — appearances on Surf’s Up.

    The AVG forum debuted in the early days of AVG’s existence. References to AVG began to appear online in December 2008, less than a month after a Nov. 19, 2008, ruling by U.S. District Judge Rosemary Collyer that ASD had not demonstrated it was a lawful business and not a Ponzi scheme at an evidentiary hearing it requested.

    AVG said it was headquartered in Uruguay. Members promoted it as a safe, offshore alternative to ASD that was outside the jurisdiction of U.S.-based regulators and law-enforcement agencies. Some participants later said Bowdoin was the silent head of AVG.

    AVG suspended members cashouts in June 2009.

    Surf’s Up made news during the Christmas holiday by publishing holiday greetings from ASD President Andy Bowdoin, implicated in an alleged $100 million Ponzi scheme. The forum also published a third-party note in which Bowdoin purportedly asked members for help in obtaining video of ASD “rallies” that might be helpful to his case.

    Some ASD members said they were shocked that Bowdoin appeared to be addressing members as though it was business-as-usual for the embattled firm, which may owe members millions of ad impressions. Federal prosecutors said the surf engaged in wire fraud, money-laundering and the sale of unregistered securities — all while operating a massive Ponzi scheme.

  • Better Business Bureau Revokes Accreditation Of Speed Of Wealth After SEC ‘Green’ Ponzi Action; Firm Experiences ASD-Like PR Disaster In Wake Of Allegations

    The accreditation of a Colorado company implicated in an alleged $30 million “green” Ponzi scheme by the SEC has been revoked by the Denver/Boulder branch of the Better Business Bureau.

    BBB now gives Speed of Wealth a rating of “F” — the worst possible score on a scale of “A+” to “F” — and says the accreditation was revoked because the company did not comply with BBB standards.

    Speed of Wealth’s BBB accreditation was revoked on Dec. 16, precisely one month after the SEC accused the firm of selling a Ponzi scheme for Philadelphia-based Mantria Corp. A rating for Mantria was not immediately available. The BBB of the Mid-Atlantic region, Metro Washington, D.C., and Eastern Pennsylvania says on its website that the organization is in the process of updating its report on Mantria.

    Under “Government Actions” in Speed of Wealth’s BBB listing, the organization summarizes the SEC allegations against Speed of Wealth and Mantria and provides links to the SEC’s charging document and news release in the case (emphasis added):

    On November 16, 2009 the U.S. Securities and Exchange Commission “SEC” filed a complaint with charges against Mantria Corporation, Troy B. Wragg, Amanda Knorr, Speed of Wealth LLC, Wayde M. McKelvy, and Donna M. McKelvy alleging that they are involved in perpetrating a $30 million Ponzi Scheme, which they persuaded more than 300 investors nationwide to participate in purported environmentally- friend[ly] investment opportunities.

    Click below view the entire press release and the complaint from the “SEC”:

    http://denver.bbb.org/Storage/33/Documents/9-16-09%20SEC_Complaint_Speed%20of%20Wealth.pdf

    http://www.sec.gov/news/press/2009/2009-247.htm

    PR Disasters Mark Speed Of Wealth, AdSurfDaily Cases

    Speed of Wealth’s website now throws a server error and appears to have been disabled. In a column in the Denver Business Journal last month, reporter Renee McGaw said she attempted to email Wayde McKelvy, a Speed of Wealth principal, to get his comments on the SEC action.

    McGaw reported that her email to McKelvy resulted in a steady stream of pitches to join wealth-building programs.

    “YOU MUST START YOUR OWN BUSINESS Renee!” McKelvy exclaimed to McGaw in one email. “What You Have Been Taught About Building Wealth is DEAD WRONG!”

    The Denver Post also wrote about the Trump Network emails from McKelvy in the wake of the SEC action. A college professor interviewed by the newspaper said words such as “amazing,” “unbelievable” and “phenomenal” used by McKelvy to describe the Trump Network should be considered red flags.

    The emails demonstrated that a crisis affecting one company can bring an unwanted spotlight on wholly separate brands. Indeed, the Denver Post reported that it contacted the Trump Network for comment on McKelvy’s emails. The calls were not returned.

    Even the names of President Obama, former President Bill Clinton and Secretary of State Hillary Clinton became part of the Mantria/Speed of Wealth story. The companies used a video that included images of Obama, the Clintons and other politicians and media figures in promotional materials.

    Meanwhile, the McKelvy emails were reminiscent of the experiences reporters had when they tried to contact Florida-based AdSurfDaily for comment after federal prosecutors seized tens of millions of dollars from the firm amid Ponzi allegations in August 2008.

    Like Speed of Wealth, ASD also has a rating of “F” from the BBB, which cites government actions against the autosurf firm. Unlike Speed of Wealth, ASD has unresolved consumer complaints, according to the BBB.

    Reporters who called ASD got a recording featuring the voice of ASD President Andy Bowdoin. Bowdoin, whom prosecutors later said had “followers,” intoned in the recording that that God was on the company’s side.

    Thirteen months later, Bowdoin told an audience listening to a conference call that his ongoing legal fight against the government was inspired by the story of a former Miss America who now operates a Christian organization. The PP Blog contacted both the Miss America Organization and the Christian organization for comment.

    The Miss America Organization did not return the call; the Christian organization, Salem Family Ministries, responded by saying it had no comment, except to say it did not recognize Bowdoin’s name. The Secret Service transcribed Bowdoin’s remarks in the conference call and presented them to the federal judge hearing the forfeiture cases against the firm.

    Companies in legal crisis can lose the PR war quickly if their initial actions lead to more questions than answers. Within days of the federal action against ASD, Bowdoin invoked “Satan,” comparing the U.S. Secret Service to the 9/11 terrorists who killed nearly 3,000 people.

    In a Nov. 19 conference call with participants, McKelvy described the SEC allegations as “ridiculous,” but at the same time acknowledged he possibly sold securities without a license, according to the Denver Business Journal.

    But in the same conference call — just days after the SEC action — McKelvy also said he was turning his attention to the Trump Network, an MLM opportunity. The comment — and the emails Speed of Wealth sent out to promote the Trump Network — led to more headlines in newspapers, forums and Blogs.

    Read Speed of Wealth’s BBB report.

    Read ASD’s BBB Report.

  • 2009 Ends With Ponzi Clawbacks In Nadel Case, Demands By Fleeced Investors In Bolze Case For Politicians To Return Tainted Campaign Donations

    EDITOR’S NOTE: There is a link at the bottom of this story to a report filed by Burton Wiand, the receiver in the Arthur Nadel Ponzi case in Sarasota, Fla. We encourage readers to read the document in its entirety. The Nadel case is not yet a year old. Nadel, who turned 77 today and is  a onetime attorney, was disbarred in 1982 for taking money from a trust fund to pay off a loan shark, a fact allegedly hidden from investors. Nadel allegedly also employed an unlicensed accountant.

    Among other things, the Wiand document shows that unwinding a Ponzi scheme is a monumental undertaking. At the same time, the document may leave some readers scratching their heads and asking how on earth any person actually could advocate for Ponzi schemes — and yet such advocacy occurs on a daily basis in the bizarre world of autosurf and HYIP Ponzi schemes, where so-called “leaders” get paid for recruiting people into Ponzis.

    Here, now, the story . . .

    Arthur Nadel turns 77 today. He is jailed in New York.
    Arthur Nadel turns 77 today. He is jailed in New York.

    Burton Wiand, the court-appointed receiver in the alleged Arthur Nadel Ponzi scheme involving at least $350 million, has identified at least 85 investors who received more than they paid in and is working to identify more.

    Clawbacks have begun in earnest, with the winners offered a choice of settling for 90 percent of the total they received and returning the money or being sued for 100 percent and paying lawyers to defend them in the lawsuits.

    Meanwhile, fleeced investors in a separate Ponzi case in Tennessee are demanding that politicians who received campaign donations from the Dennis Bolze Ponzi scheme return the money so it can be used to compensate victims.

    Bolze, 61, of Gatlinburg, Tenn., pleaded guilty Nov. 10 to all counts against him, and is awaiting sentencing. He was accused of wire fraud and money-laundering in a $21.5 million scheme.

    WATE reported that Bolze gave money to a number of politicians.

    Beyond the Bolze case, it is clear that substantial sums of Ponzi money made its way into the coffers of local, state and national politicians in various jurisdictions. It is equally clear that there is no uniform approach to returning the money. Some politicians have said they’ve spent the money. Others have said they donated it to charity after Ponzi allegations surfaced. Still others have returned money.

    Unlike fleeced Ponzi investors who receive tainted largess directly, politicians’ ill-gotten gains may come indirectly from a polluted money stream linked to a Ponzi. There are allegations in Florida, for instance, that disbarred Fort Lauderdale attorney Scott Rothstein provided campaign donations from Ponzi proceeds, while at the same time paying lawyers in his now-shuttered, 70-attorney firm from Ponzi proceeds. It is possible that some of the Ponzi money paid to attorneys also made its way into the political process.

    Elsewhere in Florida, there are allegations that Andy Bowdoin, president of Quincy-based AdSurfDaily — itself implicated in a Ponzi scheme — donated at least $5,500 to the National Republican Congressional Committee (NRCC) — before the alleged ASD Ponzi scheme was exposed in August 2008.

    Meanwhile, the Miami Herald reported that Allen Stanford, implicated in an alleged $7 billion Ponzi scheme, also donated to politicians prior to the scheme being exposed. Like the Rothstein case, politicians in both major U.S. political parties received donations.

    Nadel Clawbacks

    In the Nadel case, Wiand estimated that the winners received at least $39 million in fictitious profits — ill-gotten gains from the scheme. He has settled with 26 investors to date, meaning that at least 59 potential clawback cases remain to be resolved. The number could increase because Wiand still is working to identify winners.

    The Sarasota Herald Tribune reported that six of the 26 settled clawback cases were settled in the final two weeks of 2009. One investor agreed to return $207,000 in fictitious profits by making four payments over the next three years.

    This chart from Burton Wiand's court filings in the Arthur Nadel case shows that the hedge funds purported to have recorded more than $272 million in gains between 2003 and 2008, then the funds actually lost more than $18 million. In 2007, the funds purported to have gained more than $54 million, but actually lost nearly $25 million.
    This chart from Burton Wiand's court filings in the Arthur Nadel case shows that the hedge funds purported to have recorded more than $272 million in gains between 2003 and 2008, when the funds actually lost more than $18 million. In 2007, the funds purported to have gained more than $54 million, but actually lost nearly $25 million.

    The SEC approved the 90 percent settlement figure, Wiand said. He added that the window was closing on the discount deal.

    In a November court filing, Wiand said that “those who do not settle with the Receiver should anticipate that litigation will be commenced in the immediate future” and that the discount “will no longer be available.”

    It appears as though two groups of clawback targets exist: a group of 85 who received letters and were offered the discount, and a group of an unknown size that will receive settlement letters soon.

    Wiand said the group of 85 represented about $16.2 million in fictitious profits from the scheme. The other group represents about $22.8 million.

    Read Wiand’s interim receivership report in the Nadel case.

    See Nadel story in Sarasota Herald Tribune.

    See Bolze story from WATE.

  • SENIORS HARMED: Judge Issues Findings In CFTC Case Against Matthew B. Pizzolato; Says Investors Lost Retirement Savings In Scheme

    A Louisiania man charged criminally in an alleged Ponzi scheme and sued civilly on the same day last month lied to investors, some of whom liquidated retirement savings and annuities only to suffer massive losses by entrusting funds to Matthew B. Pizzolato, a federal judge has ruled.

    The case against Pizzolato is proceeding on separate tracks: a criminal prosecution by U.S. Attorney Jim Letten with the help of the FBI, the IRS, the U.S. Postal Inspection Service and the State of Louisiana Office of Financial Institutions, and a civil prosecution brought by the Commodity Futures Trading Commission.

    U.S. District Judge Mary Ann Vial Lemmon of the Eastern District of Louisiana now has extended an asset freeze, enjoined Pizzolato from breaking commodities laws and issued some findings in the civil case.

    Pizzolato is  26. He formerly resided in Tickfaw.

    Among Lemmon’s findings were that Pizzolato and his co-defendants in the civil case — William Guidry, 35, of Plano. Texas, and Jacksonville, Fla., and Capital Funding Consultants LLC of Covington, La. — ripped off senior citizens. Guidry and Capital Funding’s assets also have been frozen, and they have been enjoined from breaking the law.

    “Specifically, the order finds that Pizzolato, as part of a broader scheme in which he solicited $19.5 million, obtained more than $3.1 million from 24 mostly elderly investors, which he gave to Guidry to invest,” CFTC said.

    “Despite representing to these elderly investors that their funds would be invested in safe, secure investments with guaranteed rates of return, Pizzolato gave the funds to Guidry to trade high risk commodity futures, among other things,” CFTC continued. “The order also finds that Guidry and Capital Funding misappropriated more than $221,815.53 of investor funds for personal purposes, and used some of those misappropriated funds to trade commodity futures in accounts owned by Capital Funding. The investors were not told about Guidry’s commodity futures trading losses. The order further finds that Guidry and Capital Funding commingled commodity pool participants’ funds with the funds of other persons.”

    In the criminal case, which is being heard by U.S. District Judge Lance M. Africk, Pizzolato was charged with 52 counts of mail fraud, two counts of wire fraud, seven counts of money laundering, and single counts of securities fraud, obstruction of justice and witness tampering.

    He faces more than 1,100 years in prison and a fine of more than $16 million, if convicted on all counts. As many as 160 people were duped, prosecutors said.

    Prosecutors said Pizzolato attempted to silence employees with bribes of $20,000 and get them to destroy records to cover up the scheme. Meanwhile, they said Pizzolato obstructed justice by stealing documents that could incriminate him from the home of a client.

    Among the luxury items Pizzolato purchased with investors’ money were a BMW 750LI, a Mercedes Benz S430V, a Range Rover Sport and a Chevrolet Corvette, prosecutors said. He also bought sports tickets, a $35,000 engagement ring, a $500,000 home in Ponchatoula, La., and spent $35,000 on Carnival cruises.

    All in all, Pizzolato took about $19.5 million from clients and spent “nearly all” of it, prosecutors said.

  • Trevor Cook Allegedly ‘Refused’ To Cooperate With Ponzi Receiver; Security Guards Posted At Van Dusen Mansion In Minneapolis

    A Minnesota man accused of operating a Ponzi scheme with Christian radio host Pat Kiley is not cooperating with the court-appointed receiver in the case and might have spent $30,000 on “gift cards” after the SEC and CFTC brought twin actions last month, according to the receiver.

    The receiver, R. J. Zayed, described efforts to locate and claim assets tied to the alleged $190 million fraud as an international paper chase.  On Dec. 21, Zayed said, the Ontario Superior Court of Justice recognized his appointment by a U.S. federal judge and granted him power over receivership assets in Canada.

    Zayed said he was able to take control over a Cook property in Rainy River. Some investors said Cook had purchased a two-person submarine on eBay for $40,000 to access the island property, but Zayed did not mention the submarine in his initial receivership report to U.S. District Court Chief Judge Michael J. Davis.

    “Based on the Receiver’s Canadian authority, the Receiver obtained a Certificate of Pending Litigation that has been filed against the property in Canada to prevent its transfer without the authority of the Receiver. In addition, the Receiver is in the process of obtaining the three necessary appraisals to sell the property.”

    The situation involving land in Panama upon which a casino was planned is less clear because of litigation filed against receivership assets in the Central American country by Oxford FX Growth, one of the relief defendants named in U.S. litigation.

    “Prior to the appointment of the Receiver, Relief Defendant Oxford FX Growth, L.P. secured Panamanian counsel and filed a lawsuit in Panama in an effort to prevent the sale of the real estate in Panama that was acquired with funds of the Receiver Estates,” Zayed said. “The Receiver has taken control of the Panamanian lawsuit, including the costs of litigation.”

    Zayed said he had been in contact with legal counsel for Oxford FX Growth, and learned that four of five pieces of property had been “successfully attached” and secured by a bond in the amount of $200,000.

    He also learned that Oxford FX Growth had filed a local claim in Panama against Cook, Gary Saunders and Holger Bauchinger for $12 million and that lawyers in Panama are attempting to perfect service.

    The Cook/Kiley investigation is among a number of Ponzi probes in Minnesota. Like other Ponzi cases, it has included spectacular allegations that investor funds were diverted to acquire expensive automobiles and real-estate. Among the assets frozen in the case is the landmark Van Dusen Mansion at 1900 LaSalle Ave. in Minneapolis.

    Zayed said he took control of the mansion and secured its furnishings and equipment on Nov. 24, with the assistance of the U.S. Marshal’s Service and the Minneapolis Police Department.

    “Trevor Cook, Patrick Kiley, Graham Cook and Marc Trimble were found on and escorted from the premises without being allowed to remove any property (except for Patrick Kiley who was allowed to take his personal clothing and toiletries with him),” Zayed said.  “All exterior locks were changed and security guards were posted to safeguard the property.”

    He added that he found 41 computer hard drives and other media at the mansion and that they were “forensically copied.” Meanwhile, 21 computer hard drives and other media were found at a separate property at 12644 Tiffany Court in Burnsville, Minn. The data was copied, the premises and furnishing were secured, locks were changed and guards were posted.

    To date, Zayed said he has seized six cars — a 1989 Rolls Royce; a 1985 Pontiac Fiero;  a 1989 Mercedes 420 SEL; a 1998 BMW Z3; a 2000 Lexus; and a 2004 Audi RS6 — and “has identified additional vehicles that may be subject to the Receivership.”

    Cook, he said, “has asserted the Fifth Amendment privilege and refused to cooperate with the Receiver.” Zayed also asserted that Cook might have depleted receivership assets after the SEC and CFTC brought their respective cases.

    “In December, the Receiver received information that Mr. Cook had been purchasing gift cards in large denominations,” Zayed said. “As a result of this information, Mr. Cook turned over approximately $30,000 in gift cards and now faces Motions brought by the SEC and CFTC for a Rule to Show Cause as to why he should not be held in contempt of the Court’s asset freeze orders.”

    A hearing on the motions is set for Jan. 8.

    Zayed said he has been receiving “30 to 60” calls from investors each day. He established a website for information.

    See Cook/Kiley Receivership website.

    U.S. District Court for the District of Minnesota also has established a Cook/Kiley website.

  • BizAdSplash Website Offline For ‘Upgrades,’ But Surf Says It Is ‘Excited’; BAS Also Was ‘Excited’ After Announcing Meltdown In Summer

    BizAdSplash, one of the so-called AdSurfDaily autosurf clones, always is “excited” about something.

    This time it’s “excited” about 2010. The surf, however, says it will be offline for the first four days of the new year — and a note on the site suggests members could not log in for the final eight days of 2009.

    BAS said the site was down “For Server Upgrades and other changes in our system.”

    Known for going heavy on the syrup, BAS said “We are excited and look forward to a tremendous 2010. God Bless You All.”

    BAS, which lists its “chief consultant” as former Golden Panda Ad Builder President Clarence Busby, also was “excited” after it crashed and burned last summer. In July, reports surfaced that BAS was behind on payments to members. On July 24, Busby, who is listed in Georgia corporation records as the surf’s registered agent, announced BAS was in a “crisis situation.”

    BAS also says it is registered in Panama. Its Georgia address is UPS Store No. 2644 in Kennesaw.

    Busby blamed the July crisis on overpayments to members — one of the excuses AdSurfDaily used in March 2007 to explain why it was not paying members. With Busby at the helm, Golden Panda’s assets were seized in 2008 as part of the ASD probe.

    BAS launched after the federal action against ASD and Golden Panda in August 2008.

    After BAS suspended payouts in July 2009, Busby announced the company was performing an audit. In August, the planned launch of a new site was delayed, but Busby explained exciting developments were in the offing.

    By the middle of August, he promised, the company would show members how to make “instant money, very, very quickly.”

    “We need you to believe in us,” Busby said. “You’ll see why we’re excited. You’ll see why it’s important to hang on.”

  • FINRA Issues Alert On ‘Green Energy’ Scams In Wake Of SEC’s Ponzi Allegations Against Mantria/Speed Of Wealth

    As the year of the Ponzi scheme comes to a close, the Financial Industry Regulatory Authority has issued an Investment Alert warning the public about a relatively new form of fraud: “green energy investments” that trade on investors’ affinity for keeping the planet clean.

    Such schemes “promise large gains from investing in companies purportedly involved in developing or producing alternative, renewable or waste energy products,” FINRA said.

    Among the companies it cited in its fraud alert was Philadelphia-based Mantria Corp., accused by the SEC last month of operating a Ponzi scheme pushed by Colorado-based Speed of Wealth LLC.

    “Right now there are a lot of legitimate stories in the news about green energy initiatives, and con artists want to leverage people’s interest in green energy to make a quick buck at investors’ expense,” said John Gannon, FINRA senior vice president for Investor Education. “There is a lot of interest in companies that claim to provide green energy, but we issued this Alert to remind investors to be vigilant about avoiding investment scams, no matter how they are packaged.”

    Citing the SEC’s Mantria case, FINRA said environmentally conscious investors should pay strict attention to how they’re approached in sales presentations. Language and hype used in pitches can provide important clues that a “fashionable hook” is being used to pick investors’ pockets.

    “[T]he Securities and Exchange Commission alleges that promoters of purported eco-friendly investment opportunities lured 300 investors into a $30 million Ponzi scheme, encouraging participants to finance such ‘green’ initiatives of Mantria Corporation as a supposed ‘carbon negative’ housing community in rural Tennessee and a ‘biochar’ charcoal substitute made from organic waste,” FINRA said.

    “Investors were falsely promised returns ranging from 17 percent to ‘hundreds of percent’ annually, FINRA continued, citing the SEC allegations. “The scammers encouraged investors attending seminars or online webinars to liquidate their traditional investments such as retirement plans, stocks, bonds, and mutual funds. Investors also were urged to borrow as much as possible against their home or business so that they could invest in Mantria. But, according the SEC’s complaint, Mantria did not generate any income from which such extraordinary returns could be paid.”

    FINRA also cited other examples of alleged “green” fraud.

    “One solar panel stock, for example, was touted as ‘set for a 200% gain,’” FINRA said. “A different stock in a China-based wind-power company was extolled as a ‘one in a million’ opportunity that could quickly climb to ’51X its current level.’

    “In another instance,” FINRA continued, “an investment-related blog praised a company with a hydrogen-based solution, claiming the stock ‘soared 500% in one week’ and suggesting a nexus between federal energy research and the company’s prospects for growth. Specifically, the blogger noted: ‘The U.S. Government has a hydrogen initiative. Billions are being spent on hydrogen technologies. [The company] is again at the right place at the right time.’”

    FINRA’s alert advises investors “to ignore unsolicited investment recommendations and to question the source of investment information. Investors should also be wary of investments that claim to be the next big thing and promise exponential returns.”

    Read the FINRA Investment Alert on “green” schemes.

  • Alleged Jeffrey Mowen Ponzi Creates Storage Problem For U.S. Marshals Service; Huge Auction Scheduled In Utah

    This 1986 Panther Kallista and at least 239 other vehicles are on the auction block in Utah.A Utah man arrested in Panama on Ponzi charges, brought back to the United States to stand trial and later implicated in a murder-for-hire plot owned so many cars and motorcycles that the U.S. Marshal’s Service has been given permission to sell them prior to the trial.

    Jeffrey Lane Mowen had acquired more than 200 vehicles through his Ponzi, real-estate and forex scheme, federal prosecutors said. The Salt Lake Tribune reported that the U.S. Marshal’s Service had been paying $20,000 a month just to store the seized assets and that a judge agreed that the storage costs were depleting the amount of money victims would receive.

    Mowen was indicted under seal in February 2009. When the indictment was unsealed April 21, authorities said Mowen was “living outside of the United States.”

    That changed quickly. He was arrested just three days later in Panama “by Panamanian authorities in conjunction with the FBI Legal Attache office,” the FBI said.

    Mowen was jailed in Davis County, Utah. In November, a new indictment was issued, charging him

    Jeffrey Lane Mowen

    with wire fraud, solicitation to commit a crime of violence, witness tampering and retaliating against a witness.

    Prosecutors said Mowen, 47, of Lindon, Utah, hatched a plot while jailed to hire a fellow prisoner to kill four witnesses in the Ponzi scheme case upon the inmate’s release from prison.

    The Utah vehicle auction is billed by Erkelens & Olson Auctioneers as the “Largest collection of Muscle, Collector & Exotic vehicles ever [offered] in Utah! Over 240 Units to be sold in 2 auctions.”

    See a Nov. 19 story on Mowen.

    Visit the auctioneers’ website.

    Visit the Salt Lake Tribune.

  • POLL: As 2009 Draws To A Close, Cast Your Vote For The Most Interesting Figure In The AdSurfDaily Story

    EDITOR’S NOTE: Included in this post is a year-end poll to determine “The Most Interesting Figure” in the long-running AdSurfDaily story. Five of the seven choices are individuals who’ve been an intriguing part of the story. The remaining two choices are intriguing entities consisting of individuals.

    The individuals include Andy Bowdoin (the only individual in our ASD poll against whom prosecutors have asserted allegations of wrongdoing — and so far just civil allegations); Curtis Richmond; “Professor” Patrick Moriarty; Bob Guenther; and Poster “joe,” also known as “little joe.” The entities are the Pro-ASD Surf’s Up forum and a less public group we’ve deemed the “Conspiracy Theorists.”

    Brief memory-refreshers appear below the poll. Some readers perhaps will want to read the memory-refreshers before voting. You may make only one selection.

    Here, now, the story and the poll . . .

    From the date upon which federal prosecutors filed the first of two forfeiture complaints against Florida-based AdSurfDaily in August 2008, the ASD story and accompanying black comedy quickly became less about the Ponzi and more about the intriguing personalities.

    ASD President Andy Bowdoin has had two birthdays since then; he’s now 75 — and one of several U.S. senior citizens implicated in Ponzi schemes of national and international significance. On Aug. 1, 2008, the U.S. Secret Service filed a 37-page affidavit under seal in the case. The affidavit was accompanied by 57 pages of evidence — enough to persuade a federal magistrate judge to order more than a dozen bank accounts to be frozen.

    In its affidavit, the Secret Service said it feared Bowdoin had become aware of scrutiny into his business affairs and planned to flee the country.

    “I have not included every detail of every aspect of the investigation for this affidavit,” the agent who prepared the affidavit said. “Rather, it only includes the information necessary to prove that probable cause exists for a seizure warrant to be issued for property constituting proceeds of a wire fraud scheme.”

    U.S. Magistrate Judge Alan Kay agreed the Secret Service had made a compelling argument. Kay issued 13 orders directing the Secretary of the U.S. Department of Homeland Security “and any Authorized Officer of the United States” to seize 10 Bowdoin bank accounts and three accounts tied to Golden Panda Ad Builder, a closely-connected autosurf purportedly born on a Georgia fishing lake in April 2008 after Bowdoin had spent the day casting lines with Rev. Walter “Clarence” Busby Jr., who would later emerge as GP’s president.

    Aug. 1, 2008, was a Friday. Almost instantly ASD members spun the seizure of the bank accounts as a positive development, claiming the government would see the beauty of ASD’s business model after taking time to listen to the company’s story and that ASD would return quickly to the business of paying “advertisers” profits of 30 percent a month.

    Agents were planning a friendly “visit” in the days ahead, members claimed, again positioning the purported “visit” as a net plus because ASD’s business model was legally sound.

    What the vast, vast majority of the members making the initial claims did not know at the time was that the Secret Service had conducted surveillance in the case in multiple locations and gathered damning evidence from records and interviews with members.

    No criminal charges have been filed to date against Bowdoin or ASD, although the prosecution asserts in civil filings that ASD operated as a criminal enterprise.

    What had been positioned as a friendly “visit” in the earliest hours after the seizure proved to be the execution of search warrants at Bowdoin’s home and at ASD’s headquarters in a former floral shop in Quincy, Fla. The warrants were executed on Aug. 5, a Tuesday, four days after the Secret Service stopped the scheme from mushrooming any further by seizing the bank accounts.

    By Aug. 12, according to members, Bowdoin was comparing the actions of the Secret Service to the actions of the 9/11 terrorists who killed nearly 3,000 people, with Bowdoin saying “Satan” was at work. The allegations contained in the August forfeiture complaint, which was a public filing with several evidence exhibits attached, created a significant PR problem for Bowdoin in addition to the legal problem.

    The vast, vast majority of ASD members learned for the first time in the Aug. 5 civil filing by prosecutors that Bowdoin had been arrested in Alabama in the 1990s in a felony securities-fraud case and had entered guilty pleas. As a result of the filing, many members also learned for the first time that Rev. Busby had been implicated by the SEC in a prime-bank scheme in the 1990s and that Busby had declared bankruptcy.

    This information had been shielded from ASD and Golden Panda members as they were throwing money at the surfs, the Secret Service said. Agents went on to seize two more GP accounts. After reconciliations, the 15 accounts linked to ASD and Golden Panda contained just shy of $80 million, according to records.

    As strange as it sounds, a core group of ASD members pooh-poohed the allegations. Instead of considering that perhaps they had been conned by two individuals who previously had been central figures in serious securities litigation, the core group set out to demonize the government.

    In the months after the federal seizure — and in the months after Florida Attorney General Bill McCollum filed a fraud lawsuit against ASD — federal prosecutors released more information drip-by-drip. The information was part of follow-up filings in the August 2008 case. By December 2008, prosecutors had filed a second forfeiture complaint against ASD-connected assets.

    Several intriguing personalities have emerged since the initial filing in August 2008. Bowdoin, for example, initially contested the forfeiture. In January 2009, however, he submitted to it after meeting with prosecutors over a period of at least four days.

    But before February 2009 had come to a close, Bowdoin reentered the case — this time as a pro se litigant who’d purportedly fired his paid attorneys.

    Curtis Richmond, an ASD member, also emerged as a pro se litigant. He accused the prosecutors of crimes, suggesting a federal judge was operating a “Kangaroo Court” and was guilty of treason. For good measure, he accused a second federal judge of operating a “Kangaroo Court.” Dozens of pro se litigants would follow, some using a Richmond litigation blueprint and others using a blueprint that had been provided by an ASD upline.

    “Professor” Patrick Moriarty, who advanced Richmond’s theories of the case, embarked on a certified-mail campaign to discredit the prosecution. He also wrote a letter to Sen. Patrick Leahy, asserting that Leahy, the head of the Senate Judiciary Committee, should set the committee’s investigative sights on the prosecutors who brought the ASD case, not the alleged wrongdoers who operated ASD.

    Bob Guenther, de facto head of the ASD Members Business Association (ASDMBA), also emerged as an intriguing personality. Guenther led a campaign to raise money so ASD members could hire an attorney to protect their legal interests in the case, and was criticized for not providing transparent accounting of how the money was spent and for bullying members verbally.

    Among other things, Guenther also was criticized for not revealing he had pleaded guility to a felony count of bank fraud in the 1990s and for responding to his critics by asserting they were “wusses” or “liberals.” Some ASDMBA members now say they see the organization as an entity that collected money and dissipated it while taking no effective action.

    Poster “joe,” meanwhile, emerged as an intriguing personality when he rationalized the so-called autosurf “industry” as just another business pursuit akin to gambling. He blasted autosurf opponents, saying he did not care if autosurf Ponzi schemes were illegal as long as they paid.

    “joe,” who described himself as a former Vietnam Prisoner of War, apparently decided eventually that the best way to express his point of view was to become chronically disruptive and abusive. He then morphed from Ponzi promoter to cyberstalker, threatening to set “fires” to disrupt the PP Blog’s operations.

    Since the fall of 2008, Surf’s Up has been a constant presence — and an intriguing personality — in the ASD story. Among the forum’s notable contributions was an assertion that Bowdoin, despite his felonious history, was “too honest” to testify at a hearing ASD asked a federal judge to conduct. The “too honest” explanation came in response to Bowdoin’s decision to take the 5th Amendment at a proceeding his company specifically requested.

    Surf’s Up also has urged members to take part in various letter-writing campaigns in support of Bowdoin, including Moriarty’s campaign. Moriarty was indicted on federal tax charges about a month after his February 2009 campaign to Leahy had begun, although the Moriarty prosecution and the ASD prosecution do not appear to be related.

    Research showed, however, that Moriarty, who started a nonprofit company to advocate for ASD, also had started a nonprofit company in the name of a Missouri man who had been accused of murdering a woman in cold blood and shooting a police officer four times.

    Federal prosecutors alleged that Moriarty, who at one time advertised tax expertise, had under-reported his income by an unspecified amount for the tax year 2002; claimed a false deduction of $30,000 for “legal fees” for the tax year 2003; and claimed a false amount of $23,533 withheld for the tax year 2004 and a false amount of $23,433 withheld for the tax year 2005.

    No poll that did not include the ASD conspiracy theorists as a choice for the most interesting figure would be complete. We’re aware, of course, that there may be some crossover, as some of the other poll choices have shared one conspiracy theory after another and conflated one new reality after another in their zeal to lend support to Bowdoin.

    Readers inclined to select the “Conspiracy Theorists” option, however, should make an effort to divorce the other nominees from the theories. For the purpose of this poll, the “Conspiracy Theorists” are those intriguing ASD members who purport to believe that paper currency is a government plot, that President John F. Kennedy was assassinated because he was about to expose the overall government conspiracy pertaining to money and that U.S. lawmakers passed secret legislation in the 1990s in anticipation of a visit by reptilian aliens.

    The ASD Ponzi story is like none other. Will Bowdoin emerge as the most interesting personality? Will Moriarty, “joe,” Richmond, Surf’s Up or Guenther?

    Or will it be the “Conspiracy Theorists?”

  • REPORT: Feds Open Inquiry Into Allen Stanford’s Political Donations; Committee To Which Andy Bowdoin Donated Money Again Makes News In Ponzi Probe

    The Justice Department has opened a probe into the political donations of R. Allen Stanford, according to the Miami Herald.

    Stanford is jailed in Texas amid allegations he presided over a $7 billion Ponzi scheme on the Caribbean island nation of Antigua.

    Among the first names to surface were the names of the National Republican Congressional  Committee (NRCC) and its chairman, Rep. Pete Sessions, R-Texas. The names of Democratic politicians also have surfaced, according to the newspaper.

    NRCC is the organization to which AdSurfDaily President Andy Bowdoin — himself implicated in a Ponzi scheme by the Justice Department — donated money in 2007 and 2008 as the purported head of two companies and received the Congressional “Medal of Distinction.”

    Despite its important-sounding name, the medal is part of an NRCC marketing plan and signifies only an individual’s ability to write a check for what amounts to the purchase of banquet tickets.

    In a story apt to embarrass Sessions and others, the Miami newspaper reported yesterday that, on Feb. 17, the date Stanford was indicted, Sessions sent an email to Stanford.

    “I love you and believe in you,” the newspaper quoted Sessions as writing. “If you want my ear/voice — e-mail.”

    Today the newspaper reported that Rep. Gregory Meeks, D-N.Y., traveled to Venezuela in 2006 after Stanford asked him to carry a message to President Hugo Chávez.

    Stanford was concerned that a former employee in Venezuela who had been accused of fraud was questioning whether Stanford’s operation itself was a fraud, the newspaper reported. A year after Meeks carried the message to Chavez, the Stanford employee was indicted by Venezuelan prosecutors and charged with swindling money.

    The story raises questions about whether Meeks’ purported intercession with Chavez might have helped Stanford delay the inevitable exposure of the alleged Ponzi scheme and whether he was relying on politicians to run interference for him prior to the exposure of the scheme.

    Stanford’s empire, which prosecutors and regulators said was a Ponzi scheme propped up by Certificates of Deposit that paid above-market rates and lured investors into unsafe, uninsured offshore banking instruments, collapsed less than two months after the Bernard Madoff Ponzi collapsed in December 2008.

    Meeks traveled to Venezuela in April 2006, according to the newspaper.

    The extent of prosecutors’ interest in linking Ponzi money to politics and determining if corrupt money influenced votes and policy is unclear. At a minimum, however, prosecutors are known to have peeled back layers of the onion in Florida.

    In an announcement dripping with the word “co-conspirators” last month, Acting U.S. Attorney Jeffrey Sloman of the Southern District of Florida, the FBI and the IRS said that money from disbarred Florida attorney Scott Rothstein’s alleged Ponzi scheme was “used to make contributions to federal, state, and local political candidates.”

    In the Rothstein case, investigators are seeking to determine if the scheme existed in part as a means to evade campaign-finance laws. Rothstein Ponzi money also was used “to provide gratuities to high ranking members of police agencies,” officials said.

    In August 2008, prosecutors said that ASD’s Bowdoin had donated money to NRCC and that ASD members claimed the “Medal of Distinction” Bowdoin received for the donations was an important award from the White House.

    Federal Election Commission (FEC) records show that Bowdoin gave money to NRCC and claimed to be the owner of two companies: AdSurfDaily and AdSalesDaily.

    On Feb. 27, 2007, the Federal Election Commission recorded a $250 donation from “Mr. T. Bowdoin” in the name of “AdSalesDaily Inc.” The FEC recorded another $250 donation from “Mr. T. Bowdoin” in the name of “AdSalesDaily Inc.” on March 27, 2007.

    Screen shot of Federal Election Commission record showing 'Mr. T. Bowdoin' was the 'owner' of 'Adsalesdaily, Inc' and made a political donation under that name in 2007.

    Both 2007 donations were targeted to NRCC and used an address — 13 S. Calhoun Street, Quincy, FL 32351 — federal prosecutors later said was bogus.

    Although the donations listed Bowdoin as the “owner” of Florida-based AdSalesDaily Inc., the corporation appears not to have been registered in Florida. Records in Georgia list “Ad Sales Daily, Inc.” as a corporation that initially was registered in Georgia May 8, 2007, more than two months after Bowdoin identified himself as the owner in federal campaign records.

    The Georgia entity does not list Bowdoin as an owner, officer or filer for the corporation — or as a person involved in any capacity. Rather, “Ad Sales Daily, Inc.” is listed as a Delaware foreign corporation, with J. Heardy Myers listed as the corporate filer and Myers (of Marietta, Ga.) and Otis Whitcomb (also of Marietta) listed as officers.

    AdSalesDaily Inc. was incorporated in Delaware on March 22, 2007, about 24 days after Bowdoin made his initial NRCC donation, according to filings.

    FEC records show that Bowdoin — under the name of “Mr. T. Andy Bowdoin, Jr” and “AdSurfDaily Inc. and AdSurfsDaily Inc.” (the second “s” is an apparent typo)  — gave $5,000 to NRCC in 2008. Two donations of $2,500 were recorded — one on June 6, 2008, and another on July 7, 2008.

    Even as the FEC was recording the donation on July 7, undercover agents from an IRS/Secret Service task force based in Florida were beginning to scrutinize ASD.

    Bowdoin has a tie to a bank in Antigua, although it is unclear whether the tie is to a bank controlled by Stanford because Bowdoin has not identified the bank. Prosecutors, however, said ASD had $1 million on deposit in Antigua in an account under a different name.

    Records suggest that the alleged Bowdoin Ponzi scheme might have operated under as many as four names dating back to early 2006: DailyProSurf, AdSurfDaily, AdSalesDaily and ASDCashGenerator.

    Litigation surrounding tens of millions of dollars seized from ASD in August 2008 has turned into Theater of the Absurd, with dozens of pro-se litigants attempting to enter the legal skirmish between the Justice Department and Bowdoin.

    One of the great mysteries of the case is why Bowdoin suddenly started donating money to NRCC in 2007 — during a time in which the company was not making payments to members and said it needed to issue a stock offering in which shares would be sold for $10,000 to raise funds.

  • SPECIAL REPORT: Alleged Colorado Ponzi Schemer Had Criminal Record For Securities Fraud, Previous Bankruptcy Record; Allegations Reminiscent Of ASD/Golden Panda Cases

    EDITOR’S NOTE: This story is about securities and fraud allegations leveled in Colorado against Philip R. Lochmiller and others. The case was brought amid assertions Lochmiller was operating a real-estate Ponzi, although the backdrop of the story is similar to the backdrop of the story on the “advertising” Ponzi allegations against Florida-based AdSurfDaily. Some of allegations against Lochmiller are strikingly similar to the allegations against ASD President Andy Bowdoin. Part of the story backdrop also shares a common venue: Vernal, Utah.

    Lochmiller had a real-estate development in Vernal, which also was home base to the so-called “Arby’s Indians,” a sham “tribe” of which ASD mainstay Curtis Richmond was a member. The “tribe” used the address of a Vernal doughnut shop as the address of its “Supreme Court,” and became known as the “Arby’s Indians” because it held a meeting at an Arby’s restaurant in Provo, Utah, in 2003.

    There are no assertions that the Lochmiller, ASD and “Indian” cases are in any way related or that Lochmiller had any ties to ASD or “tribal” figures. However, ASD members — as well as members of AdViewGlobal (AVG) and Golden Panda Ad Builder (GP) — may find the similarities in the Lochmiller and ASD cases instructive.

    Here, now, the story . . .

    This Rolex watch is an auction item in the Lochmiller case.A Colorado man sentenced to prison in California in the 1980s on state charges of securities fraud was indicted Dec. 15 in Denver on federal charges of securities fraud. Philip R. Lochmiller, 61, of Mack, settled in Colorado after his release from prison and started a new company, prosecutors said.

    That Grand Junction-based company, which first was called Valley Mortgage in the 1990s and is known today as Valley Investments, now is at the center of a new firestorm in a complex Ponzi scheme case that includes spectacular allegations of forgery and real-estate fraud in Colorado, Idaho and Utah.

    Investor losses could exceed $30 million. Also indicted and arrested for multiple felonies in the Colorado case were Philip R. Lochmiller II, 38, of of Olathe, Kansas, and Shawnee N. Carver, 33, of Grand Junction. If convicted, the defendants face dozens of years in federal prison. Each is free on bond, awaiting court appearances and trial.

    Lochmiller II is Lochmiller’s son.

    Certain assets, including a Rolex watch and a vintage 1955 GMC 450 American fire truck, already are being auctioned by a court-appointed receiver to raise money for an estimated 400 fraud victims.

    Family Fraud Affairs

    Records show that Philip R. Lochmiller was sentenced to three years in a California state prison in the 1980s after he was charged with 60 counts of securities fraud and pleaded guilty to about half of them.

    Also sentenced to prison in the California case were Lochmiller’s mother and brother. Jo Alice Lochmiller, Lochmiller’s mother, pitched the California scheme involving a Vista-based company known as Lochmiller Mortgage Co. on TV. She was sentenced to three years.

    Lochmiller’s brother, Stephen Lochmiller, was sentenced to four years, according to news accounts at the time.

    The 1980s scheme operated in the Greater San Diego area and resulted in 1,600 investors being bilked out of a total of $5 million. Jo Alice Lochmiller, who pleaded guilty to 10 counts and was sentenced to three years on the most serious one and given concurrent three-year sentences on the other nine, appealed her sentence.

    Jo Alice Lochmiller argued her intent was not to fleece customers but to raise money for Lochmiller Mortgage. She further argued that she should not be punished for each separate sale of unregistered securities and that her sentence was unfair because it subjected her to double punishment.

    A California appeals court consisting of a three-judge panel unanimously rejected her claim.

    “Because each unlawful sale [of unregistered securities] occurred at different times for different amounts of money to different victims, punishment for each separate sale is not prohibited by Penal Code section 654. A single object, to obtain money, does not bar multiple punishment for separate crimes,” the panel wrote.

    “The situation here is analogous to that of the robber who commits several robberies and claims he had one objective, to gain money,” the panel wrote.

    Citing case law, the panel wrote, “[W]here there are consecutive robberies in several communities . . .  over a period of several hours, a defendant may not bootstrap himself into avoidance of additional penalties by claiming that the series of divisible acts, each of which had been committed with a separate identifiable intent and objective, composed an indivisible transaction.”

    Under Jo Alice Lochmiller’s logic, the panel wrote, a defendant could fleece millions of people and expect to be punished as though she had fleeced only one person.

    “Lochmiller, through her part in the unlawful scheme, took the life savings of a group of elderly citizens,” the panel wrote. “She did so by making separate sales to 11 individuals on 10 occasions over a 3-month period. This was not one act or one indivisible course of conduct. To accept her argument, she could have continued to take the savings of every citizen in San Diego County and be punished no more than if she had done so to one individual.”

    Parallels To ASD

    The Colorado Ponzi case against Philip Lochmiller, his son and Carver is drawing comparisons to the fraud case against Florida-based AdSurfDaily and Georgia-based Golden Panda Ad Builder, the so-called “Chinese” option for ASD members.

    Federal prosecutors said Philip Lochmiller did not disclose his previous felony conviction in a securities case to investors; prosecutors made the same assertion against Bowdoin, adding that Golden Panda President Clarence Busby did not reveal his previous run-in with the SEC in a securities case alleging that Busby was involved in a prime-bank scheme.

    At the same time, prosecutors in the Lochmiller case said both Lochmiller and Lochmiller II had bankruptcy filings that were not disclosed to investors. Busby also had a bankruptcy that was not disclosed to Golden Panda members, prosecutors in the ASD case said.

    At the same time, the AVG autosurf  — purportedly based in Uruguay and now collapsed –  appears to have close Bowdoin family ties and appears to have risen from the ashes of the alleged ASD Ponzi scheme. Prosecutors alleged Philip Lochmiller’s family scheme in Colorado surfaced after his previous scheme in California collapsed and that the Colorado scheme also collapsed.

    Company name changes also are present in both the alleged Lochmiller and ASD schemes, according to court records.

    Feds Outline The Lochmiller Colorado Scheme

    “Between November of 1999 through April 2008, Valley Investments acquired five properties purportedly to develop affordable housing subdivisions,” prosecutors said.  “To finance the properties, Lochmiller and Lochmiller II advertised and solicited investments from individuals by promising a short duration high percent interest rate to be paid monthly. The advertisements characterized the investment as a ‘solid security’ secured and recorded by a Deed of Trust in the investor’s name.”

    The properties were in Colorado, Idaho and Vernal, Utah. With respect to the Vernal property, prosecutors said, Lochmiller, Lochmiller II and Carver “secured at least 12 separate investments, all with purported first Deeds of Trust, on Lot 34, Country Living Park, a lot with a rental trailer.”

    Indeed, prosecutors said, the trio sold 12 “first” positions on the same Utah property. Similar shenanigans were pulled in Idaho and Colorado, and prosecutors alleged that some people bought “first” positions in properties that already had been sold.

    Despite the fact Lochmiller was warned in 2001 by the Colorado State Securites Commission to cease and desist from selling unregistered securities, the scheme continued unabated, prosecutors said.

    In January 2004, “[Philip] Lockmiller and others traveled by air to Cancun, Mexico,” prosecutors said. In February 2004, Philip Lochmiller “caused two wire transfers for $25,000.00 each, one from his Mesa National Bank account and one from his Community First Bank account, to be sent to a recipient in Mexico as a down payment on the purchase of a furnished condominium located in Puerto Aventuras, near Cancun, Mexico.”

    In April and May 2004, Philip Lochmiller made various wire transfers to pay for the condominium in the famous resort area of Cancun, prosecutors said, adding that Lochmiller and his son traveled to Mexico by air at least 18 times.

    “The Lochmillers and Carver continued to misrepresent to investors that the business was thriving, and did not disclose to new investors how their money was being used,” prosecutors said. “Also, because there were not sufficient funds, the defendants did not file all of the Trust Deeds on behalf of investors, and most of the filed Trust Deeds were not the first encumbrance of the properties named and were thus worthless.”

    Carver was charged with notarizing forged signatures of investors for fraudulent releases of Deeds of Trust.

    “Investors should always remember the old saying that if it looks too good to be true, it probably is,” said U.S. Attorney David Gaouette of the District of Colorado. “Unfortunately, there are many people out there who are unscrupulous and tempting potential investors with false claims. Law enforcement will investigate these criminals and our office will prosecute them, but the public needs to be wary and only invest after thoroughly checking out these claims of large profits.”

    A veteran FBI agent said the agency was pursuing financial fraudsters aggressively.

    “These arrests demonstrate the FBI’s continuing commitment to aggressively investigate complex financial crimes, especially when the targeted victims are vulnerable and elderly,” said James Davis, special-agent-in charge of the Denver FBI office.

    Davis lauded victims for their willingness to cooperate in getting to the bottom of the mess.

    “We are especially appreciative of the tremendous cooperation from the victims in this case. The success of this investigation to date is tribute to the combined efforts of our federal law enforcement partners, including the IRS-CID, U.S. Postal Inspection Service, and the U.S. Attorney’s Office in Grand Junction.”

    An IRS agent who specializes in financial crime said the agency was leaving no stone unturned in the case.

    “Money laundering creates an untaxed economy that uses legitimate businesses to conceal criminal activity,” said Christopher M. Sigerson, special-agent-in-charge of IRS Criminal Investigation Unit in Denver. “IRS-CI has the financial investigators and expertise to follow the money and deprive criminals of their gains.”

    He was backed by a colleague in the U.S. Postal Inspection Service.

    “Postal Inspectors partnered with fellow law enforcement agencies in this investigation to assure the arrest of individuals utilizing the U.S. Mail for fraudulent means,” said U.S. Postal Inspector In Charge Shawn Tiller. “This is an offense the Postal Inspection Service takes very seriously.”

    Philip R. Lochmiller faces one count of conspiracy to commit mail fraud and securities fraud, one count of conspiracy to commit money laundering, 20 counts of money laundering and 10 counts of mail fraud.

    Lochmiller II faces one count of conspiracy to commit mail fraud and securities fraud, one count of conspiracy to commit money laundering, eight counts of money laundering and 10 counts of mail fraud.

    Carver faces one count of conspiracy to commit mail fraud and securities fraud, one count of conspiracy to commit money laundering, and 10 counts of mail fraud.