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  • EDITORIAL: Members Turn On Each Other As 11th Hour Dawns For Andy Bowdoin And AdSurfDaily Inc.

    The coming hours and days may mark the end of AdSurfDaily. Fragmentation, fractiousness and bitterness are marking ASD’s final descent into infamy.

    Steve Watt of TheJoyLuckClub, for instance, is accusing the Mods at the Pro-ASD Surf’s Up forum of covering up for Andy Bowdoin and AdViewGlobal (AVG), an offshoot of ASD.

    We wish we could applaud Watt’s actions. We cannot.

    Steve Watt is promoting yet another surf site at TheJoyLuckClub, despite everything that has happened and despite announcing that he was out of the surf-promoting business. He also has contributed to the delay of the government’s proposed restitution program by being an early champion of Curtis Richmond’s pro se pleadings, and doesn’t seem to understand that TheJoyLuckClub’s message is at odds with itself.

    At one time, Watt announced a denial by U.S. District Judge Rosemary Collyer of a Richmond pro se pleading would lead to a “Major Criminal Complaint that will be filed with the U.S. Atty. General.” Watt encouraged members to join a nonprofit organization he and other Surf’s Up members formed — ASD Members International (ASDMI) — to litigate against the government even if it was behaving legally.

    One of ASDMI’s co-founders was Patrick Moriarty, currently under indictment for federal tax fraud. In 2006, Moriarty started a nonprofit for a Missouri man accused of murdering a woman in cold blood, shooting a police officer four times and shooting another man eight times.

    Richmond, meanwhile, is associated with a Utah “Indian” tribe a federal judge ruled a “complete sham.” The “tribe” became infamous for becoming embroiled in vexatious litigation against public officials, and the oddities did not end there.

    Some people who used a sham tribal “arbitration” panel known as the Western Arbitration Council (WAC) to do their bidding against the government were jailed for tax crimes, including Bruce Robert Travis. Among other things, Travis is the self-published author of “My Past Life As Jesus” and “The Messiah For Hire.”

    Travis, associated with tax denier Royal Lamarr Hardy, now reportedly is working on a book in which he’ll describe what it’s like to be Jesus behind bars.

    Dale Stevens, “chief” of the sham Utah tribe to which Richmond belonged — the Wampanoag Nation, Tribe of Grayhead, Wolf Band — was arrested for child pornography and anounced his intention to marry two underage girls.

    One of the girls was 12. Stevens, 69, said he’d hoped to enter into marital bliss with her in exchange for half a cooler of “energy bars.”

    Despite all the information at their disposal about entities and individuals with whom they were associating themselves on the periphery, neither Watt nor Surf’s Up divorced themselves from the circus.

    Regardless, Watt now writes that he is unhappy that the Mods refused to send an email blast to encourage Surf’s Up members to cooperate in a story proposed by Mike Mason, who once worked as a television journalist in Florida and has started a Blog.

    The Mods at one time sent blasts if Bowdoin or favorite sons cleared their throats. They used the forum to champion ridiculous, pro se pleadings after Bowdoin declared his paid attorneys incompetent and fired them — and even after a federal judge in a separate case had ruled that Curtis Richmond and others had engaged in racketeering and mail fraud in a bid to destroy the credit of public officials in Utah by placing enormous, fraudulent judgments against them for having the temerity actually to do their jobs.

    Richmond was hailed a “hero” on Surf’s Up. Never mind that he once signed a fraudulent “award” issued by WAC against a family-services worker in Utah for $300,000.

    A family-services worker who was doing the good work of protecting children.

    Good grief.

    And never mind that Bowdoin and Richmond’s drivel delayed for months the government’s plan to implement a restitution program for participants who certified under oath they were crime victims. Surf’s Up almost never missed a chance to rally the troops to hate the government, even if it meant dispossessed widows caught up in the scheme had to wait even longer for their chance to get some money back.

    At Surf’s Up, the widows always could wait.  It’s a plain fact that some of the Mods and members started a forum to promote AVG after receiving ASD’s official endorsement just days after a key ruling went against Bowdoin in November, just weeks after Bowdoin took the 5th Amendment in his own case.

    “Too honest” to testify, a Surf’s Up poster ventured. A $50,000 Lincoln was parked in Bowdoin’s driveway when the remark was made, having been purchased for cash with ASD “rally” money diverted to another Bowdoin enterprise. Meanwhile, victims of a Bowdoin securities scheme a decade ago got a check for $100.

    Not to worry. If Bowdoin could not produce an audited balance sheet certifying ASD’s solvency and the courts could not see the beauty of ASD’s business plan, the widows always could make up their losses in AVG, which purportedly was headquartered in Uruguay and immune from all the meddling by the evil U.S. government.

    Here is a plain fact — and it is a fact no matter what you read on Surf’s Up: ASD was catastrophically insolvent. It ignored the liabilities side of the ledger and hid behind “rebates aren’t guaranteed.”  As a practical matter, ASD had no means even to deliver all the “ads” it sold. If you joined ASD, you gave Andy Bowdoin a license to keep your money.

    The government intervened to give you a shot at getting some of your money back before the Ponzi scheme collapsed. The reason the restitution program hasn’t started is because the government has been unable to perfect its title to the money because of pro se pleadings by Bowdoin and others. No restitution program can begin until the government has clear title to the proceeds seized from ASD.

    AVG, for its part, announced in June that it was suspending cashouts and exercising its version of a “rebates aren’t guaranteed” clause. In effect, AVG seized the money — the exact same thing Surf’s Up railed against the government for doing last year. The AVG forum started by some of the Surf’s Up Mods and members went missing after AVG suspended cashouts.

    Two of the Surf’s Up Mods announced yesterday that no email blast urging members to cooperate with Mason would be forthcoming. It first was explained that one of the Mods had been sick and that the proposal couldn’t be addressed immediately. Then it was said the Mods had to consult by phone to approve any blast. Finally, it was said that two of the Mods had communicated with Mason, but a decision had been made not to bring the matter to the attention of the full Surf’s Up membership.

    In essence, the Mods explained that Mason was an unknown commodity and might slant his coverage to the government’s point of view.

    For all intents and purposes, the ASD forfeiture case will end soon. It will be a clear, clean win for the public officials who prevented this contemptible Ponzi scheme from mushrooming globally and sucking wealth from 84 percent of members so 16 percent could enrich themselves.

    We’d like to give Steve Watt credit for calling out the Surf’s Up Mods and regret that we cannot — and we sincerely hope that Steve will see the light.

  • BERNIE’S ‘STING’: Frank DiPascali Jr. Pleads Guilty In Madoff Case; Officials Say He Developed Phony Computer Platform That Appeared To Reflect Real Trading

    In the movie “The Sting,” accomplice J.J. Singleton read from a surplus tickertape wire into a microphone to create the  impression that horse races that already were over were being run live on the radio.

    J.J.’s bogus radio calls from the back room helped Henry Gondorff and Johnny Hooker fleece Doyle Lonnegan of $500,000 in an elaborate scheme.

    The movie won seven Oscars.

    The Securities and Exchange Commission now says Bernard Madoff had a back room of his own — and that Frank DiPascali made sure it was staffed in an elaborate bid to sustain the world’s largest Ponzi scheme should customers or regulators ever drop by unexpectedly.

    “Madoff and DiPascali even went so far as to develop a phantom computer trading platform that would appear to reflect real trading,” the SEC said. “In the event of a surprise visit from outsiders requesting to observe real-time trading activity, one BMIS employee was to enter trades on a computer screen and another employee was to go into an office nearby and play the role of a counterparty trader in Europe.”

    The SEC filed numerous civil charges for securities fraud against DiPascali, Madoff’s chief financial officer, yesterday.

    And DiPascali, 52, pleaded guilty yesterday in New York to numerous criminal charges brought in a separate complaint by the FBI, the IRS and other agencies. He faces up to 125 years in prison.

    DiPascali pleased guilty to conspiracy, securities fraud, investment adviser fraud, falsifying records of a broker-dealer, falsifying records of an investment adviser, mail fraud, wire fraud, international money laundering, perjury and attempting to evade federal income taxes.

    Unlike Gondorff, Hooker, Singleton and other fictional characters in “The Sting,” it did not pay in the end to be an accomplice of Madoff, prosecutors said.

    “[DiPascali] also subject to mandatory restitution and faces criminal fines up to twice the gross gain or loss derived from the offense,” prosecutors said. “Additionally, the criminal information to which DiPascali pleaded guilty includes forfeiture allegations that would require DiPascali to forfeit the proceeds of the charged crimes, as well as all property involved in the money laundering offenses and all property traceable to such property.”

    In the SEC case, the agency said DiPascali “helped generate bogus annual returns of 10 to 17 percent by fabricating backdated and fictitious trades that never occurred.”

    To sustain the deception, which dated back to the 1980s, “DiPascali helped Madoff cover up the fraud by preparing fake trade blotters, stock records, customer confirmations, Depository Trust Corporation (DTC) reports and other phantom books and records to substantiate the non-existent trading.”

  • UPDATE: Receiver In ASI Case Launches Website

    Larry Cook, the receiver in the Federal Trade Commission case against Affiliate Strategies Inc., Brett Blackman and several co-defendants, has started a website to inform interested parties.

    Visit the receiver’s website in the ASI case.

    The FTC said the defendants were involved in a fraudulent scheme that promised “guaranteed” grants of $25,000 from economic-stimulus funds provided by the government. State attorneys general from Kansas, Minnesota and North Carolina joined in the lawsuit.

    Blackman is ASI’s president, chief executive officer and founding partner, and also president of Noobing, a surf site. Noobing was not named in the FTC complaint, but the site is offline. Noobing targeted members of the deaf community.

    U.S. District Judge Julie A. Robinson issued a temporary restraining order (TRO) and asset freeze July 24.

  • UPDATE: Vana Blue Website Still Offline; No Pinksheet Stock Activity For Seven Trading Days Amid Maze Of Claims

    Not a single share of Vana Blue’s penny stock has traded hands since July 30, a period of seven full trading days, according to Yahoo Finance. In news releases, Vana Blue identified itself as the owner of eWalletPlus, a payment processor later linked to the AdViewGlobal (AVG) autosurf.

    Vana Blue, which used mailing services in Phoenix and Las Vegas as its address, is a registered corporation in Nevada. Its website now resolves to a server that beams ads from GoDaddy.com, but until recently resolved to a server from which the company told its story.

    The company has claimed to own a company that variously has been described as TMS Corp. and TMS Association, which purportedly developed eWalletPlus. In January, Vana Blue also claimed to own a company that variously has been described as Karveck Corp. or Karveck International, a purported advertising and media company.

    In February, Vana Blue reported that Karveck had posted $1.8 million in revenue in January — the month AVG was in prelaunch.

    Among other things, Vana Blue also had said it signed an agreement with a company known as Native Express Inc. “to develop oil and gas resources” in Utah. Vana Blue also has said it had an agreement with a firm in Jamaica known as Internet Mobile & Caribbean Network Ltd. to “facilitate the sales of the Compass Pre Paid debit card throughout Jamaica and the Caribbean.”

    Meanwhile, Vana Blue also has said it had an agreement with a company known as Net Auction Plus, an eBay alternative, “to provide online, affordable, and flexible payment services.” The NetAuctionPlus.com domain name is registered to Michael Austin and uses the same Phoenix mail-service address as Vana Blue.

    The NetAuctionPlus.com domain throws a server error. Austin’s name was mentioned in an announcement last week by AVG that it had reported a theft of $2.7 million to unspecified law enforcement agencies. AVG, which purports to be headquartered in Uruguay, did not explain when the alleged theft occurred and did not provide details.

    Austin’s name also has been associated with eWalletPlus, but is only one of several names associated with the payment processor and money-services business. AVG promoters have claimed that eWalletPlus was AVG’s in-house payment processor. At one time, the eWalletPlus domain resolved to the same server in Panama that hosted AVG, but the domain now resolves to a parked page and appears to be offered for sale on sedo.com.

    In a purported public filing dated March 31, Vana Blue identified its officers as Donald Rex Gay, Leonard Capelli and Michael Reis, saying it owned TMS Corp and Karveck International.

    Only days later, a man associated with both the AdSurfDaily and AVG autosurfs — Gary Talbert — registered an entity known as TMS Corp. USA LLC, according to records. Talbert’s U.S. registrations occurred within days of a March 20 announcement by AVG that he had resigned as its chief executive officer and a March 23 announcement that AVG’s bank account had been suspended because too many members had wired transactions in excess of $9,500.

    TMS Corp. USA LLC is registered in Nevada, and lists Gary D. Talbert of 2601 E Thomas Rd, Ste 220-A Phoenix, AZ 85016, as its manager. A company by the same name also is listed as a foreign LLC in Arizona, with Gary D. Talbert of 13. S. Calhoun Street, P.O. Box 109, Quincy, FL 32351, as its manager.

    The S. Calhoun Street building address is the same address AdSurfDaily Inc. used.

    In a forfeiture complaint against ASD last year that alleged wire fraud, money-laundering, the sale of unregistered securities and a Ponzi scheme, federal prosecutors said the building address was bogus.

    One of the officers of Vana Blue is named a defendant in a counterclaim by the U.S. government that alleges more than $252,000 in federal income tax is unpaid. The same individual — Donald Rex Gay — is listed in Louisiana records as a person who has been involved in a number of businesses.

    Gay denied in pro se court filings that he owed the taxes.

    Records in Illinois note that Michael Reis, also listed by Vana Blue as an officer, was ordered in 2000 to cease and desist from the practice of public accounting without a license.

  • AdGateWorld Joins AVG, BAS In No-Pay Surf Lineup

    Members of AdGateWorld (AGW) are complaining today that the surf is not paying rebates. AGW now joins AdViewGlobal (AVG) and BizAdSplash (BAS) in the nonpaying lineup.

    All three surfs launched in the aftermath of the seizure of tens of millions of dollars last year from Florida-based AdSurfDaily Inc., amid allegations of wire fraud, money-laundering, engaging in the sale of unregistered securities and operating a Ponzi scheme. The surfs quickly became known as ASD clones, with promoters that touted offshore locations as a safety buffer between participants and U.S.-based regulators and law-enforcement agencies.

    At one point, the acronym ASD appeared in the Terms of Service on the AGW website.

    In recent weeks, AGW said it had new owners in the Middle East. Those reports could not be confirmed.

    Members today, however, said that AGW announced yesterday it had no money to pay rebates this week.

    The surf did announce that it would provide members a new splash page to create interest in the program, members said. The idea was to create an “AdGateWorld awareness campaign.”

    AGW recently took bonuses away from members, members said. Yesterday’s announcement was simply signed “AdGateworld.”

  • DEVELOPING STORY: Sheriff’s Department, Deputy, County Attorney Sued For Not Accepting Bids In Gold And Silver At Foreclosure Sale In Pennsylvania

    EDITOR’S NOTE: We previously have reported that some members of AdSurfDaily Inc. and AdViewGlobal are part of a subculture that views the Federal Reserve and banking in general as illicit operations. Some members, for example, have been involved in the credit-repair industry and have been parties in lawsuits against the government and/or individual banks and bankers. Part of the Utah “Indian” litigation grew out of banking lawsuits, for instance. We also have reported on a case in which a member sued a bank to reverse a mortgage foreclosure, filing a bond purportedly consisting of “twenty one dollars in silver coinage.”

    Some of the elements in the story below will sound familiar to readers who have been following the ASD case. The plaintiffs in the case cited below said their bids to purchase properties with gold and silver at a Sheriff’s sale in Pennsylvania were rejected, and they now seek more than $1 million in damages against public officials.

    A county solicitor, sheriff’s department and deputy have been sued in federal court in the Eastern District of Pennsylvania amid allegations they defamed three bidders at a sheriff’s sale who wanted to pay for properties with gold and silver.

    Meanwhile, the wives of two of the plaintiffs have joined the lawsuit, saying stress caused by libelous remarks by the county have or will cause them “to lose the companionship, consortium, society and services” of their husbands.

    One of the husbands/co-plaintiffs — Michael Proetto — “requries psychiatric care,” according to the lawsuit.

    Victor Balletta, another husband/co-plaintiff, “purchased firearms for protection,” according to the lawsuit.

    Michael Reis is another co-plaintiff in the case.

    Named defendants were Karl Longenbach, solicitor of Northhampton County — although Longenbach’s name was not specifically referenced in the complaint caption; Christopher Spadoni, the assistant county solicitor; the Northhampton County Sheriff’s office; and Dave Ruberry, a deputy sheriff whom the plaintiffs said presided over the October 2008 Sheriff’s Sale.

    The county has denied wrongdoing.

    Balletta, Proetto and Reis said they attended a Sheriff’s sale in Easton, Pa., on Oct. 10, after registering and advising the county “they had gold and silver currency that they wished to bid,” according to the lawsuit.

    The plaintiffs “bid successfully on approximately nine (9) properties,” they said in the lawsuit, but Ruberry “ignored Plaintiffs’ bids, instead accepting other bids predicated on credit. In contrast, Plaintiff’s were prepared to pay their entire bid at the sale, with gold and silver.”

    Proetto brought his gold and silver in a “bulging sandwich bag,” according to The Morning Call of Allentown.

    Bids were refused, according to the plaintiffs. They seek damages of more than $1 million for alleged civil-rights violations and other violations.

    Balletta, Proetto and Reis claimed the defendants made libelous remarks about them, falsely linking them to anarchist groups, extremist groups and “paper terrorism.”

    The Morning Call, which was not named a defendant, “printed the defamatory statements made by the Deputy and Solicitor,” the plaintiffs said.

    Subsequently, the plaintiffs were “threatened; approached by extreme/radical groups mentioned in the Article; have lost business opportunities; have had their [families endangered]; Proetto  requries psychiatric care; and Balletta purchased firearms for protection,” the plaintiffs said in the lawsuit.

    Read the lawsuit.

  • And The Ponzis Will Die As One . . .

    Dear Readers,

    Two days ago we received a note from a woman who identified herself as a member of AdViewGlobal (AVG). The note was intended for publication, but we declined to publish it.

    The woman described herself as angry about developments at the surf. We would have published the note, except for one thing: The woman included two URLs, along with an appeal for readers to click on PTC  ads on her website.

    So, in one breath, she was condemning AVG. In the next, she was encouraging people to engage in click fraud so she could earn a fee. There was virtually no editorial content on the site.

    Bids to commit click fraud were an element of the ASD case, of course. Despite all that has happened, some people continue to show annoyance that their favorite surf or surfs aren’t paying, and yet try to line their own pockets with fraudulent fees.

    Screent shot of pitch last year for ASD members to commit click fraud.
    Reduced screen shot of pitch last year for ASD members to commit click fraud.

    It’s hard to imagine that anyone actually joined AVG, given the events at ASD. But it’s even harder to imagine that a person bitter about suspended AVG payouts then would arrive at the conclusion that she could make up for lost money by taking money out of the pockets of PTC advertisers.

    And, speaking of the word “imagine,” we offer this — with our apologies to the late John Lennon.

    Imagine there’s no Surfing
    It’s easy if you try
    No Ponzi below you
    Nothing above you to deny
    Imagine all the Surfers
    Saying no to pay to play

    Imagine there’s no Cashouts
    It isn’t hard to do
    Nothing to shill or ply for
    And no soiled commissions too
    Imagine all the Surfers
    Saying no to clicking for a fee

    You may say that he’s a schemer
    But he’s not the only one
    He hopes someday you’ll join him
    And the Ponzis will be as one

    Imagine no rebate schemes
    I wonder if you can
    No appeals to greed or hunger
    A brotherhood of anti-scam
    Imagine all the Surfers
    Respecting the nobility of the working man

    You may say that he’s a schemer
    But he’s not the only one
    He knows now you won’t join him
    And the Ponzis will die as one

  • UPDATE: Noobing Surf Site Offline As FTC Fraud Case Against Affiliate Strategies Inc. Proceeds; Receiver Appointed And Expected To File Preliminary Report Soon

    A receiver has been appointed in the case against Affiliate Strategies Inc. (ASI) and Brett Blackman, ASI’s president, chief executive officer and founding partner. Noobing, a surfing site, is in the ASI fold, but has not been named a defendant.

    Regardless, the Noobing site is offline. A federal judge has granted a freeze of ASI’s assets. Noobing, based in Kansas, launched in the aftermath of the seizure of tens of millions of dollars from Florida-based AdSurfDaily Inc. last year and was promoted by some ASD members.

    YouTube videos and other records show that the site was targeted at people with hearing impairments.

    Late last month, the Federal Trade Commision sued ASI; Blackman; Landmark Publishing Group (d/b/a G.F. Institute and Grant Funding Institute); Grant Writers Institute LLC; Answer Customers LLC; Apex Holdings International LLC; Jordan Sevy, individually and as a manager of Landmark Publishing Group; James Rulison, individually and as president of Answer Customers LLC; Real Estate Buyers Financial Network LLC (d/b/a Grant Writers Research Network); Martin Nossov, individually and as a manager and member of Real Estate Buyers Financial Network LLC; and Alicia Nossov, individually and as a manager and member of Real Estate Buyers Financial Network LLC.

    Joining the FTC in the lawsuit were the attorneys general of Kansas, Minnesota and North Carolina. The case also appears in federal court dockets in Virginia and Utah.

    A preliminary report by Larry Cook, the court-appointed receiver, was due today. It is possible that the filing will be delayed until Aug. 20, because attorneys for the defendants asked for a delay.

    U.S. District Judge Julie A. Robinson issued a temporary restraining order (TRO) and asset freeze July 24. Based on filings by the defendants, Robinson granted a delay from Aug. 12 until Sept. 1 to conduct a hearing on the TRO. But Robinson denied a motion by the defendants to stay discovery in the case.

    Among other things, the defendants advised the court that they wished “to retain separate counsel for themselves” and noted they needed time to “sort out their financial affairs” and to determine how to pay for separate counsel, Robinson noted.

    And, Robinson noted, “[T]he defendants seek time to attempt to conduct settlement negotiations.”

    The FTC said the defendants were involved in a scheme that promised “guaranteed” grants of $25,000 from economic-stimulus funds provided by the government.

    Kansas Attorney General Steve Six said the alleged scheme was deplorable and that investigators intended to carve back any ill-gotten gains.

    “During this time of economic uncertainty, grant scams are taking advantage of people’s hope for financial assistance and scamming them out of hard earned money,” Six said. “There is no such thing as a guaranteed grant. But to consumers in financial trouble, the chance for extra income can unfortunately be a huge draw.”

    “Scammers like these are using the bad economy to try to get rich at your expense,” Six said. “Beware of anyone who promises to help you win a grant if you pay them first.”

    Blackman, 25, “began trading stocks and bonds at the age of 15,” according to ASI’s website. He also “is involved with numerous civic groups including Business Fellowship International (BFI), Young Life, and Campus Crusades. He also serves on the board of Where Are The Christian Men (WATCM).”

  • BREAKING NEWS: Judge Grants Bowdoin Request For More Time, As AdSurfDaily Negotiates With Prosecutors

    A federal judge has granted Andy Bowdoin more time to respond to an order to show cause.

    Judge Rosemary Collyer said Bowdoin and AdSurfDaily Inc. could have until Aug. 28 to show cause why its motion to reverse Bowdoin’s decision to forfeit tens of millions of dollars to the government should not be denied.

    The original deadline was Aug. 7. Bowdoin is the president of ASD. Prosecutors seized at least $65 million from Bowdoin bank accounts last year, records show.

    “It is hereby ORDERED that Claimants shall file a response to . . . [the] Order to Show Cause no later than August 28, 2009,” Collyer wrote in a minute order late this afternoon.

    ASD revealed in court filings yesterday that it had entered into negotiations with federal prosecutors.

    Charles A. Murray, Bowdoin’s attorney, advised Collyer yesterday that the negotiations “could result in an agreement resolving the matters in dispute either in part or whole.”

    A firm with a close family, membership and promotional ties to ASD — AdViewGlobal (AVG) — announced this morning that it had filed a theft report with state and federal authorities, saying $2.7 million had been embezzled from the firm.

    AVG identified two suspects, saying they once were affiliated with the eWalletPlus payment processor.

    In other news, the government announced it had perfected the forfeiture of more than $14 million from Golden Panda Ad Builder, another firm associated with ASD. Prosecutors said they intended to implement a restitution program for members who certified under oath that they were victims of a crime.

  • DID SURF FIRM JUST MAKE HISTORY? AdViewGlobal Says It Filed State, Federal Complaints About $2.7 Million Theft; Surf Wants New CFO, Compliance Officer, Department Managers; Asks Members To Keep Surfing

    UPDATED 12:03 P.M. EDT (U.S.A.) One day after AdSurfDaily Inc. revealed in court filings that it was negotiating with federal prosecutors, the AdViewGlobal (AVG) autosurf announced it had been the victim of a $2.7 million theft.

    AVG, which purports to be headquartered in Uruguay, said it reported the theft to state and federal authorities. If confirmed, it may mark the first time in history that a surf filed such a report. Autosurfs frequently are associated with Ponzi schemes and the sale of unregistered securities.

    “Legal complaints have been filed in both cases and are currently being pursued by law enforcement authorities at both the state and federal levels,” AVG said in an announcement to members.

    It was not immediately clear if the surf was conceding it was headquartered in the United States, rather than Uruguay. The surf did not identify the agencies to which it had reported the alleged theft.

    AVG identified two suspects, saying they once were affiliated with the eWalletPlus payment processor. Some members had been clamoring for the surf to name suspects.

    “We’ve been reluctant to share this information with you, because we were under the impression that the money would be returned within a fairly brief period of time. In the past 24 hours, however, we’ve learned that it could take 6 months to a year to get the money back to us,” AVG said.

    AVG did not say how it got the impression that the money would be returned in “a fairly brief period of time.” Nor did it reveal how it learned it could take up to a year to recover the money or that the funds even were recoverable.

    Federal prosecutors said in December that ASD President Andy Bowdoin never reported a $1 million theft at the purported hands of “Russian” hackers. The allegation is contained in a Dec. 19 forfeiture complaint that names George and Judy Harris as beneficiaries of illegal conduct by ASD.

    Today is the one-year anniversary of the formal seizure of tens of millions of dollars from ASD by the U.S. Secret Service.

    George Harris is Andy Bowdoin’s stepson; Judy Harris is the wife of George Harris. AVG announced last month that George and Judy Harris owned AVG. Since that time, a Pinksheet stock known as Vana Blue (VBLU.PK), which says it owns Karveck International and the associated eWalletPlus payment processor, has clouded the issue of what individual or company actually owns AVG.

    In today’s announcement, AVG did not say if George or Judy Harris — or another management employee — contacted authorities to report the alleged theft.

    AVG did say it was seeking a new chief financial officer, compliance officer and department heads for public relations, customer service and new projects. The surf did not say whether it had fired employees who held those jobs previously.

    “We’re undergoing a complete overhaul of all management positions and procedural systems,” AVG said. The surf added that it was recruiting from within and that applicants are required “to sign a confidentiality agreement that will be strictly enforced.”

    The surf did not say whether the successful candidates would be required to move to Uruguay.

    AVG, which announced June 25 that it was suspending member cashouts and making an 80/20 program mandatory if and when payouts resume, said today that it was “evaluating the extent to which the inflated page impressions amassed by some members created artificial cash balances.”

    Members said AVG’s frequent use of 200-percent, matching bonus programs for both recruits and sponsors — coupled with an in-house, member-to-member cash button — led to some downline groups and individuals owning millions of page impressions and creating untenable liabilities for the surf.

    How AVG intends to deal with the liabilities it created through unchecked bonuses and purported abuse of the cash button is not clear. By suspending payouts June 25, the surf exercised its version of a “rebates aren’t guaranteed” clause.

    Some members said they will not surf until cashouts resume because each advertisement AVG displays erodes profitability for individual members.

    “We sincerely hope that you’ll continue to support us . . . and keep on surfing! AVG said today.

    See July 23 story.

    See July 27 story.

  • EDITORIAL: The End Of Wink-Nod

    One year ago today, the U.S. Secret Service arrived in the small town of Quincy, Fla., and changed history. By executing a search warrant at the headquarters of AdSurfDaily Inc. — and going about their business in very public fashion — agents sent the message that the so-called autosurf “industry” no longer had a safe haven anywhere on U.S. soil.

    In all of 2008, the Secret Service issued exactly six national news releases. One of them dealt with AdSurfDaily. Given the special nature of the work the Secret Service performs and the extreme competence of the men and women who serve their country in this unique fashion — and the fact that ASD merited a news release — well, connect the dots.

    The wink-nod days are over for the surfs.

    Promoter? “Industry” expert? “Team” organizer? Good luck. You’re going to have to work twice as hard for your ill-gotten gains (with the prospect of getting busted always in play), and your forum spiel and YouTube videos are becoming less and less effective. They make you look like a person who will do anything — up to and including pretending the Secret Service never visited Quincy — to pocket a commission.

    Agents exposed the “industry” for exactly what it is: a poison field laced with land mines and trip wires and occupied by schemers and liars and criminals and money-launderers.