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  • Silent Coup? Regulators Confront False Nation-States In Burgeoning Battle Against Large-Scale Ponzi Schemes

    Have the brick-and-mortar media largely missed an important political, legal and financial story — one that features nation-states being declared within U.S. borders and satellite, U.S.-style democracies being declared on paper overseas in a bid to skirt securities laws and financial regulations and make Ponzi schemes “legal?”

    It seems so. There has been spot coverage in local newspapers, but no major, sustained coverage on a national scale — not even when bogus “Supreme Courts” were being founded in Utah doughnut shops, bogus “attorneys general” were being appointed in North Dakota and entities that did not submit to the authority of the U.S. government were attempting to force the U.S. Marshals Service to serve fraudulent court documents calling for the arrest of legitimate federal judges.

    A disturbing trend is emerging — and it is not easy to peel back layers of the onion despite the fact enormous sums of money are involved.

    In the weeks prior to the seizure of at least $79 million last year from Florida-based AdSurfDaily Inc. and related autosurf companies in a wire-fraud and Ponzi scheme probe, the Securities and Exchange Commission shut down a Las Vegas-based operation that thumbed its nose at U.S. law by falsely claiming it derived its Nevada powers from a sovereign “Indian” tribe based in North Dakota.

    Regulators claimed a fraud of at least $27 million was under way in the Nevada case.

    Gold-Quest International, which purported to be registered in Panama but was conducting operations from Las Vegas, was conducting a Ponzi scheme in the United States and Canada that promised a yearly return of 87 percent, the SEC said.

    “Gold-Quest and its owners claim they are not subject to the jurisdiction of the United States or Canada because they are members of the Little Shell Nation Indian tribe, purportedly headquartered in North Dakota,” the SEC said in May 2008, about three months prior to the seizure of ASD’s assets.

    “However,” the SEC continued, “the Little Shell Nation is not in fact recognized as a sovereign tribe or nation.”

    The Nevada litigation was bizarre, and featured the presence of a nonlawyer who had been appointed “attorney general” of the tribe, and a non-notary public who had “notarized” documents used by the tribe but had no legitimate credential to do so.

    “You are in an imaginary world where you belong to an unrecognized Indian group,” a federal judge advised Robert Neilson Baker, the nonnotary notary.

    It only got stranger from there.

    Despite the fact one of the uttered defenses in the case was that the tribe was immune to U.S. law and thus was permitted to sell unregistered securities, one of the defendants left the court room to feed a parking meter, according to the Las Vegas Review-Journal.

    Why even bother to plug a meter if your aim is to return to the court room to explain why the law does not apply to you?

    A common thread in recent securities litigation is that the U.S. government has no authority to act over anyone and that the government is guilty of interference with commerce even if the commerce is illegal.

    In November 2008, California resident Curtis Richmond attempted to intervene in the AdSurfDaily case, but his initial efforts to have court submissions docketed were unsuccessful. Richmond ultimately succeeded in having pro se submissions from his Utah-registered religious entity — Pacific Ministry of Giving International — entered into the record, but the filings did not tell the entire story.

    It turned out that Richmond, too, was associated with an “Indian” tribe — one a federal judge had declared a “complete sham” in a separate case  — and Richmond had purported to be a sovereign being who answered only to Jesus Christ.

    Richmond’s tribe was known as Wampanoag Nation, Tribe of Grayhead, Wolf Band. It had harassed public officials in Utah by filing enormous fraudulent judgments against them, including a judgment of $250 million against a county prosecutor. Richmond himself tried to force U.S. District Judge Stephen Friot to recuse himself from the Utah case, claiming the judge owed him $30 million and could not make a fair decision.

    Friot ruled that Richmond and other members of the bogus tribe had engaged in racketeering against the public officials, ordering them to pay more than $108,000 in damages and costs to the injured parties.

    Richmond appealed the decision in the Utah case, claiming poverty. Months later he filed court documents in the ASD case that declared Pacific Ministry of Giving International had $41,000 at stake in the autosurf.

  • BREAKING NEWS: Judge Orders Offshore Assets Of Firm Associated With Noobing Autosurf Repatriated; Broadens Authority Of Receiver To Pursue Recovery

    In a ruling that may send shockwaves throughout the offshore autosurf “industry,” a federal judge has ordered the parent company of the Noobing autosurf to repatriate to the United States all assets and documents held on foreign soil.

    U.S. District Judge Julie A. Robinson also cleared the way for any safe-deposit boxes to be opened and inspected. Meanwhile, the judge gave Larry Cook, the receiver in the case against Affiliate Strategies Inc., Brett Blackman and other defendants, broad powers to exercise authority over individual and corporate assets of the defendants.

    At the same time, Robinson ordered assets not to be concealed or dissipated and records not to be destroyed.

    The defendants acknowledged no wrongdoing, but agreed to the order in a stipulation with the Federal Trade Commission and the attorneys general of three states. The order appears to apply to Noobing, which is registered both in the United States and the Caribbean island of Nevis, but is not named a defendant in the case.

    Noobing launched last year and was promoted by members of AdSurfDaily Inc., a surf firm from which the U.S. government seized tens of millions of dollars last year in a wire-fraud, money-laundering and Ponzi scheme probe.

    “[W]ithin 5 business days following the service of this Order, each Corporate Defendant and Individual Defendant shall (emphasis added):

    “A. Provide the Commission and the Receiver with a full accounting of all funds, documents, and assets outside of the United States which are (1) titled in the name, individually or jointly, of any Corporate Defendant or Individual Defendant; or (2) held by any person or entity for the benefit of any Corporate Defendant or Individual Defendant; or (3) under the direct or indirect control, whether jointly or singly, of any Corporate Defendant or Individual Defendant;

    “B. Transfer to the territory of the United States and deliver to the Receiver all funds, documents, and assets located in foreign countries which are (1) titled in the name, individually or jointly, of any Corporate Defendant or Individual Defendant; or (2) held by any person or entity for the benefit of any Corporate Defendant or Individual Defendant; or (3) under the direct or indirect control, whether jointly or singly;

    “C. Provide the Commission access to all records or accounts or assets of any Corporate Defendant or Individual Defendant held by financial institutions located outside the territorial United States by signing the Consent to Release of Financial Records attached to this Order as Attachment C.

    In an extraordinary warning titled “NONINTERFERENCE WITH REPATRIATION,” the judge ordered the defendants to walk the straight-and-narrow when repatriating offshore assets.

    She specifically banned “[s]ending any statement, letter, facsimile transmission, e-mail or wire transmission, or telephoning or engaging in any other act, directly or indirectly, which results in a determination by a foreign trustee or other entity that a ‘duress’ event has occurred under the terms of a foreign trust agreement, until all Assets have been fully repatriated . . .”

    And the judge took it one step farther, specifically ordering the defendants not to advise “any trustee, protector or other agent of any foreign trust or other related entities of either the existence of this Order, or of the fact that repatriation is required pursuant to a court order, until all Assets have been fully repatriated . . .”

    Robinson empowered Cook to assume full “control of the Receivership Defendants by removing, as the Receiver deems necessary or advisable, any director, officer, independent contractor, employee, or agent of any of the Receivership Defendants, including any Individual Defendant, from control of, management of, or participation in, the affairs of the Receivership Defendants.”

    Cook also was empowered to use his discretion to separate alleged perpetrators from alleged victims.

    The receiver “shall have full power to divert mail and to sue for, collect, receive, take in possession, hold, and manage all assets and documents of the Receivership Defendants and other persons or entities whose interests are now under the direction, possession, custody, or control of, the Receivership Defendants,” Robinson said.

    In her order for assets not to be dissipated and records not to be destroyed, Robinson defined documents as “equal in scope and synonymous in meaning to the usage of the term in Federal Rule of Civil Procedure 34(a), and includes, but is not limited to, writings, drawings, graphs, charts, photographs, audio and video recordings, computer records, and any other data compilations from which information can be obtained.”

    Read the judge’s order.

  • Ten More Motions To Intervene Appear On Docket

    UPDATED 4:57 P.M. EDT (U.S.A.) Ten more pro se motions to intervene in the federal forfeiture case against AdSurfDaily Inc. have just appeared on the docket of U.S. District Judge Rosemary Collyer.

    With the motions docketed yesterday, the grand total filed in the past two days now stands at 12. Previously 10 motions were filed, bringing the overall grand total to 22. All of the motions appear to use the same litigation blueprint.

    Collyer denied the first 10 motions in a two-paragraph ruling. She has not ruled on the most recent 12 motions, which appear to have been in transit when she ruled against the initial 10.

    Today’s docketed filers include Barbara J. Bowles; Robert Bowles; Dawn Starling; Eva Cater; Sara Lehman; Christopher Blake Scott; Harold L. Shaffer; Daniel N. Reams; James Richards; and John Deminico.

    4:57 P.M. EDT UPDATE: An 11th motion was docketed late this afternoon. The filer was Thomas M. Shearer. As of this update, the grand total of motions docketed today stands at 11. The overall grand total now is 23. (This figure includes pro se filings since Aug. 24 and does not take into account earlier pro se filings by ASD President Andy Bowdoin, Curtis Richmond and others. The unofficial total of earlier pro se filings is 16.)

    The unofficial grand total of all pro se filings is 39.

  • More Motions To Intervene Appear On Court Docket

    Two more pro se motions to intervene in the AdSurfDaily federal forfeiture case have appeared on the docket of U.S. District Judge Rosemary Collyer.

    The motions appear to use the same litigation blueprint used by 10 previous pro se filers. Collyer denied all 10 motions yesterday for lack of standing, issuing a two-paragraph ruling.

    Today’s docketed filers include G. Stan Ketchum, who says the U.S. government owes him $5,700, and Lucia M. Ruggeroni, who makes a claim for $500. It is unclear if other motions remain to be docketed or if others are in the mail.

    What is clear is that today’s motions use the same arguments Collyer has repeatedly rejected.

  • BREAKING NEWS: Judge Denies Stream Of Pro Se Filers

    Motions to intervene filed last week by 10 pro se litigants in the AdSurfDaily federal forfeiture case have been denied.

    U.S. District Judge Rosemary Collyer denied the motions late today, saying the petitioners had no standing in the case.

    Collyer’s opinion was brief, consisting of only two paragraphs. The pro se pleadings had been styled as motions “to Intervene and Petition to Return Wrongfully Confiscated Funds.”

    Denied were Jacqueline Poggioreale, Joseph Poggioreale, Lisa Koehler, Carol L. Rose, Bruce Disner, Pablo G. Camus, Todd C. Disner, Georgette Stille, Alfredo Perez-Cappelli, and Gallagher and Sons Inc.

    Read the denial.

  • An AdSurfDaily Imponderable: ‘Ad-Packs’ As Currency

    All sorts of incongruities dot the AdSurfDaily landscape. Perhaps none is odder than this:

    Some ASD members say currency issued by the U.S. government is fraudulent, that the Federal Reserve is a fraud, that Federal Reserve Notes are a sham and not “money” because gold and silver coins are the only real money — and yet they seem to have no problem at all with the concept of “ad-packs” as currency.

    Andy Bowdoin was not paying them in silver and gold — and they nevertheless were happy to receive their money, which they incongruously claim elsewhere to be Unconstitutional.

    “Ad-packs” always have made news, but perhaps particularly when prosecutors revealed ASD was paying certain employees in “ad-packs.” There was no hue and cry from the Federal Reserve conspiracy theorists, even though “ad-packs” aren’t backed by silver and gold and have no street value, Constitutional or otherwise.

    They are not redeemable at, say, the neighborhood kid’s sidewalk Kool-Aid stand.

    A kid might take a silver coin or a gold coin — but he or she ain’t gonna take no stinkin’ “ad-packs.” You gotta show a kid the money, not a theory. Any money that spends at the Mall will do.

    Did you know a man who was paying employees in “ad-packs” any kid running a Kool-Aid stand would reject as unacceptably risky got an award from the President of the United States for business acumen? If not, consult the literature of ASD promoters, who helped a lie on the institution of the Presidency go viral because a trusting widow in Florida with $10,000 in her bank account meant they might score a commission of $1,000.

    No one raised a ruckus about Bowdoin treating “ad-packs” as currency — and the Federal Reserve conspiracy theorists presumably did not renounce the paper profits showing in their back offices because Bowdoin had not set aside a like amount in gold and silver to back his “ad-pack” notes.

    If  paper money not backed by gold is a conspiracy, how could electronic “ad-packs” not backed by gold not also be one? Their value might not survive even a strong thunderstorm.

    Call it the Bowdoin Standard.

  • RECEIVER: Firm Associated With Noobing Autosurf Charged Senior Citizen In Search Of Housing Grant $995 For Three Names And Addresses Of Providers; One Of The Addresses Proved To Be Regional HUD Office

    UPDATED 2:11 P.M. EDT (U.S.A.) A company associated with the Noobing autosurf charged a 70-year-old Philadelphia man on Social Security $995 for the names and addresses of three entities that possibly could help him secure a grant to repair his rapidly deteriorating home, according to the receiver in the fraud case against Affiliate Strategies Inc., Brett Blackman and other defendants.

    Noobing pitches itself to the deaf on YouTube.
    Noobing pitches itself to the deaf on YouTube.

    Noobing itself targeted people with hearing impairments, according to web records and YouTube videos. The Kansas-based surf came to life after the U.S. Secret Service seized tens of millions of dollars last year from Florida-based AdSurfDaily Inc., amid allegations of wire fraud, money-laundering, selling unregistered securities and operating a Ponzi scheme.

    Noobing was promoted by some ASD members after the government filed a forfeiture complaint against ASD in August 2008.

    Meanwhile, the Federal Trade Commission now says Blackman received more than $1.37 million from various entities under the ASI umbrella in 2008 and 2009 and also benefited from perks.

    “ASI paid personal expenses for cleaning services, landscaping services, and moving services,” the FTC claimed in court filings this week. “Plaintiffs believe, based on interviews with former employees, that these expenses were paid on behalf of Brett Blackman, and categorized as ‘executive expenses.’”

    Blackman and the other defendants said in court filings that the various business enterprises named in the complaint filed last month by the FTC and attorneys general from three states provided legitimate products and services and that no consumers were harmed.

    But the Philadelphia man said otherwise, providing the receiver three letters he had written to entities whose names and addresses were provided by the Grant Writer’s Institute for a fee of $995 as benevolent entities that could help him repair the home he shares with his wife.

    One of the addresses proved to be the address of the Philadelphia Regional Office of the U.S. Department of Housing and Urban Development, which had been misidentified by the Grant Writer’s Institute as a benevolent organization known as “World Changers,” according to court filings.

    Brenda M. Laroche, HUD’s deputy regional director, wrote a personal letter back to the man, explaining that HUD did not provide individual grants and pointing out where he could get free information on housing-assistance programs in Philadelphia and free information on a provider of weatherization assistance.

    Laroche, for free, even researched World Changers after receiving the letter from the man, who described himself as a recipient of only $185 a month in Social Security benefits and driving a cab at age 70 to make ends meet. In her letter to the man, Laroche provided the phone number and website address of World Changers, an entity of the Southern Baptist Convention.

    A second entity identified by the Grant Writer’s Institute — United Methodist Action Reach-out Mission by Youth (U.M. ARMY) — proved to be an organization that seeks grants, but does not provide them, according to court filings.

    Like Laroche at HUD, the executive director of the Christian organization wrote a personal letter back to the Philadelphia man, expressing concern that he had been duped and asking the man for the name of the company that duped him.

    “You are not alone,” said Brian Smith, executive director of the United Methodist mission, in the letter to the Philadelphia man. “[W]e would love to find out where you have learned this false information so that we can put away any artificial hope of funding from our organization to other individuals such as yourself.”

    At the same time, a third name provided to the Philadelphia man proved to be a website — netwish.org — which says it underwrites grants up to a maximum of $500 after people in need submit an essay that is compared to essays from other people in need to establish whose needs are most critical and can be funded. The maximum grant is $500, or $495 less than the amount the Grant Writer’s Institute charged the man.

    The Grant Writer’s Institute is one of the co-defendants in the case, which alleges that Blackman and others were part of a scheme to make customers believe they would receive a “guaranteed” $25,000 grant from the government from economic-stimulus funds.

    Larry Cook, the receiver, also determined that chargebacks attributed to another company named a defendant in the case actually were Noobing chargebacks and that a customer complained in July that Noobing had drafted an unauthorized payment, according to court filings.

    The chargebacks were confusing even to the bank because of the interrelationships of the defendants’ companies, the FTC said. Cook previously said that the “ASI defendants have formed and operated eighteen additional Kansas LLCs as subsidiaries of Defendant Apex Holdings International LLC.”

    It had been difficult to get an early fix on finances because because “several thousand intercompany transfers” occurred and because other entities recently had been registered offshore, Cook said.

    Read the Receiver’s declaration.

    Read FTC Supplemental filing.

  • BREAKING NEWS: Pro Se Pleadings Pile Up In ASD Case

    Five more motions to intervene have been filed by pro se litigants in the AdSurfDaily federal forfeiture case.

    This morning’s filings came on the heels of five other pro se pleadings that appeared Tuesday on the docket of U.S. District Judge Rosemary Collyer. Like the previous motions, today’s filings appear to have used a litigation blueprint that has circulated among ASD members.

    Today’s filers — and the amounts they say they are owed by the U.S. government, not ASD President Andy Bowdoin, include:

    • Todd C. Disner ($53,000)
    • Pablo G. Camus ($1,000)
    • Georgette Stille ($10,000)
    • Alfredo Perez-Cappelli ($12,200)
    • Gallagher and Sons Inc. ($7,000)

    Todd Disner was one of the founders of the Quizno’s sandwich franchise. Disner also is listed as the owner of RebatesForAmerica.com.

  • BREAKING NEWS: AdVentures4U, New Darling Of Surf World, Says It Was Threatened; Note Says Cashouts Will Be Suspended Soon And Members Will Have To Make Do With Their ‘Advertising’ Purchases; Ponzi Forums In Uproar

    UPDATED 11:57 A.M. EDT (U.S.A.) There are widespread reports this morning that AdVentures4U (ADV4U), the new darling of the autosurf world, is suspending “revenue sharing” and that its owner was threatened.

    The reports come on the heels of various reports that the surf slashed payout rates and poured money into a gold-buying business known as TradingGold4Cash. ADV4U purportedly had more than 60,000 members and positioned itself as a “marketer’s dream.”

    These remarks were sent members today and were attributed to Steve Smith, the purported owner of AdVentures4U.

    Smith purportedly acknowledged that he put his family in danger by starting an autosurf.

    “We have been threatened and my family is more important to me than most will know,”  Smith purportedly said. “We Never (sic) ever said the revenue share was a set % and in order to move other income forward I made a decision that put my family in danger and I will not tolerate that.”

    “99% of the members understood where we were going but the small % that I am scared of I just cannot risk because we really are who we said we are and we really did intend to move us into the future,” Smith purportedly said. “We will not be answering scary support or answering the phone anymore until we have completed the cashout requests.”

    Smith purportedly urged members not to contact offshore payment processors to file complaints, saying any suspension of offshore accounts would result in members getting lower refunds.

    “We cannot control the Members so please give us to Aug 4th (sic?) to process all payments because if members complain to the payment proccessors (sic) and they Freeze our accounts we will not be liable for any of the cashouts and the Revenue Share monies will held by the payment processors and we will not have control and they will only pay a portion of the monies back to the members,” Smith purportedly said.

    It was not immediately clear why the message cited the Aug. 4 date — a date in the past.

    AdVentures4U purportedly conducted business with a Hotmail address. The gold site purportedly is a subsidiary.

    The ADV4U website appears still to be functional, although an audio message that once started up upon the loading of the page appears to have been disabled.

  • BREAKING NEWS: Bowdoin Asks For Extension; Lawyer Says ‘Entire Matter’ Could Be Resolved In Agreement

    UPDATED 5:06 P.M. EDT (U.S.A.) The attorney for AdSurfDaily Inc. President Andy Bowdoin has asked a federal judge to extend a key filing deadline until Sept. 21.

    UPDATE 5:06 P.M: Judge Rosemary Coller, in a minute order just issued, has approved an extension until Sept. 14, not Sept. 21, as Bowdoin had requested.

    Charles A. Murray, Bowdoin’s attorney, said in a court filing today that he had “engaged in continuing negotiations with the Government and it appears that these negotiations could result in an agreement resolving the entire matter.”

    Bowdoin had been ordered to show cause by Aug. 7 why his motion to undo a decision he made in January to forfeit tens of millions of dollars seized by the U.S. Secret Service in a wire-fraud investigation last year should not be denied. The prosecution agreed to an extension until Aug. 28, and Judge Rosemary Collyer granted the extension.

    Today’s Bowdoin pleading was filed as a stipulated motion. Prosecutors did not object to Bowdoin’s requested delay until Sept. 21, but Collyer approved a delay only until Sept. 14.

    Read Bowdoin’s motion.

  • BREAKING NEWS: Did AdViewGlobal Cancel Florida Registration By Fax From Hotel In Uruguay?

    UPDATED 7:53 P.M. EDT (U.S.A.) AdViewGlobal (AVG), which also is known as the AV Global Association (AVGA), registered the association name as a fictitious entity in Florida in April, canceled and re-registered it in May — and canceled the registration again July 21 in a transaction that involved a hotel fax machine in Montevideo, Uruguay, according to records.

    AVGA’s name initially was registered by Gary Talbert April 21 and used the same address AdSurfDaily used — 13 S. Calhoun Street, Quincy, Fla. — according to documents on file in Florida. Federal prosecutors said last year that the S. Calhoun address was bogus.

    Talbert, once an ASD executive and later the chief executive officer of AVG before resigning in March, was listed as the owner in the April filing, which was dated a month after AVG had announced Talbert’s resignation.

    AdViewGlobal claimed to have no ties to AdSurfDaily, but this document lists ASD's address in Quincy, Fla., as AVG's address.
    AdViewGlobal claimed to have no ties to AdSurfDaily, but this document lists ASD's address in Quincy, Fla., as AVG's address.

    It was not immediately clear why the filing occurred in April and included Talbert’s name after he had resigned a month earlier, but Talbert’s name and purported signature appear in the document. The surf announced a shift to an association structure in February, one day after AdSurfDaily President Andy Bowdoin signed the first of his pro se pleadings in the ASD forfeiture case and two days after reports circulated that the U.S. Secret Service had seized the bank accounts of some individual ASD members.

    On May 29, the surf reregistered the name, this time listing Judy Harris as the owner and using the address of the Harris home in Tallahassee as its address. The reregistration occurred two days prior to the issuance of a news release by AVG through PR Newswire that used a Tallahassee dateline.

    AVG sent a follow-up email announcing its news release to members on the same day. The email hotlinked to servers at Forbes Magazine and other publishers, pulling the publishers’ logos off their servers and creating the impression that the companies had endorsed AVG. The email purported to have originated in Uruguay.

    By June 25, a little more than three weeks after the issuance of the June 1 news release, AVG announced it was suspending cashouts.

    Federal prosecutors said in December that the mortgage on the Harris home had been paid off in June 2008 with more than $157,000 in illegal proceeds from AdSurfDaily Inc., a Florida company accused last year in a forfeiture complaint of wire fraud, money-laundering and operating a Ponzi scheme.

    The name of the Montevideo hotel appears at the top of the faxed document, as do the fax number and international dialing identifier. The document suggests the fax might have been sent to another company in the United States before being forwarded to the Florida Department of State — or the opposite, faxed from the United States to Uruguay.

    The timing of the registration cancellation coincides with an unconfirmed report that AVG had fired employees in Uruguay on July 20.

    Members later said that Bowdoin was the silent head of AVG.

    In early February, after AVG’s graphics were seen Jan. 31 in an ASD-controlled webroom that showed AVG’s street address as the same S. Calhoun address ASD used, AVG explained the appearance of the graphic was an “operational coincidence.”

    Regardless, AVG used the address in April in filings in Florida.