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EDITOR’S NOTE: There are plenty of reasons to avoid the AdViewGlobal (AVG) autosurf, not the least of which is that the government views the autosurf business model as foundationally corrupt. Autosurf operators and promoters are subject to prosecution under federal securities, wire-fraud, mail-fraud, money-laundering and racketeering statutes, and the surfs typically operate as Ponzi schemes. They also are subject to prosecution under state laws.

Readers should not infer that numbered items in the Top 5 list below are ranked in order of importance. Some of the information below is being published for the first time today.

1. AVG may be operating as a “ghost” enterprise. Research suggests that AVG, which purports to be headquartered offshore, may be using at least one U.S.-based company to funnel money to itself through complex wire transfers. The owner of the company filed a corporate bankruptcy petition in 2004 for a separate company he owned. In 2005, the owner filed a personal bankruptcy petition, listing nearly $1.4 million in liabilities and only $3,500 in assets.

The 2005 bankruptcy petition listed the owner’s address as an apartment, specifically using the abbreviation “Apt.” The apartment address, however, appears to have been the address of a UPS Store that once operated as a Mailboxes Etc.

A former business partner of the owner committed suicide in 2002, after members sued the former partner amid concerns that a large sum of money was missing from a co-op venture. Prior to taking his own life, the man made inquiries about banking in Switzerland and the Caribbean, according to court filings.

One of the key selling points of AVG is its purported offshore location. The company claims to be headquartered in Uruguay. Its servers resolve to Panama. Regardless, the company has used “gmail” addresses from U.S. based Google to communicate with members and perform certain customer-service functions.

Research suggests a company with which AVG has a close association is headquartered in a modern office building in the United States. The building was constructed in 2003. Office functions and conferencing can be rented by the hour. Two large airports are nearby, and a major Interstate highway is situated one mile from the building.

We are declining to publish the address of the building or identify its specific geographic location. We have confirmed through public records and other sources, however, that the company lists an address at the building, that the business has made inquiries about international wire transfers and that two international financial-services companies have established a tie to AVG and blocked wire transactions because of the AVG tie.

2. Two forfeiture cases against AdSurfDaily and a RICO case are still active. AVG launched in the wake of two forfeiture actions brought by the government against assets tied to AdSurfDaily and a racketeering lawsuit brought against ASD by individual members. AVG has close family, management and promotional ties to ASD (see No. 3 below), and the multiagency federal probe into ASD’s business practices is ongoing.

It is known that the U.S. Secret Service, the Internal Revenue Service and the U.S. Department of Justice are involved in the investigation, and it is believed that the Federal Bureau of Investigation, the U.S. Postal Inspection Service and the Securities and Exchange Commission have at least peripheral involvement. At the same time, it is known that the office of Florida Attorney General Bill McCollum is involved in the probe, and it is believed that other Florida agencies also are involved.

It also is known that various state attorneys general, state banking regulators and state securities regulators have knowledge about the ASD case.

Your AVG sponsor or his or her upline sponsor could be a target of the ASD investigation, which means you could be doing business with a person the government views as a participant in a criminal enterprise. Forfeiture complaints were filed against assets tied to ASD in August and December. The government views ASD as a criminal enterprise. All money collected by ASD and all “profits” derived from ASD are viewed as the proceeds of a crime.

Meanwhile, the RICO complaint brought by ASD members in January alleged that ASD was engaged in racketeering with unnamed co-conspirators. Some of the alleged co-conspirators may have ties to AVG.

3. AVG’s “association” structure does not insulate it from prosecution. AVG has shifted to an “association” structure, apparently on the theory that the “association” approach can immunize members from prosecution for violations of state and federal law. Such associations may say their power is derived from the U.S. Constitution. They may publish statements that resemble a loyalty oath and frequently are associated with tax schemes. Even by the incongruous standards of the surf world, AVG is setting a new standard for weirdness.

The AV Global Association (AVGA) is now listing Judy Harris as its “First Trustee.” Harris, the wife of George Harris, replaces Gary Talbert in the role of “First Trustee.” George Harris, the stepson of AdSurfDaily President Andy Bowdoin, is the “Successor Trustee.”

What this means, literally, is that AVG is linking itself to Bowdoin family members identified by the federal government as the beneficiaries of illegal conduct by ASD, after earlier disclaiming any affiliation with ASD and during an active criminal investigation.  What it means as a practical matter is unclear because the situation is so bizarre it almost defies description.

Talbert, who is not a Bowdoin family member but is a former ASD executive who filed a sworn affidavit on ASD’s behalf in the August forfeiture case, resigned suddenly March 20 as AVG’s chief executive officer. Three days later, on March 23, AVG announced its bank account had been suspended. AVG has never provided a clear explanation of either event. Talbert’s name now has been removed as an AVG “Trustee.”

Property owned by George and Judy Harris, including a car and a home in Tallahassee, Fla., was seized in the December forfeiture complaint, which alleged the $157,000 mortgage on the Harris home was retired with illegal proceeds derived from ASD.

There has been no public action in the December forfeiture case since the filing of the complaint. Neither George nor Judy Harris has filed a claim to their home. Neither George nor Judy Harris has filed a claim to a car prosecutors alleged was purchased with illegal proceeds derived from ASD.

4. At least one proffer letter exists in the ASD case. In April, in their final response to a series of responses to Andy Bowdoin’s pro se pleadings in the forfeiture case brought in August, prosecutors revealed that Bowdoin had signed a proffer letter. Proffer letters sometimes mean that the one who proffers is willing to provide the government information that is helpful in the prosecution of others.

Bowdoin never told ASD members about the proffer letter. Nor did he tell them about the December forfeiture complaint, which includes extremely specific allegations. Bowdoin waited until March to tell members he had decided in January to submit to the forfeiture of tens of millions of dollars seized in the August complaint.

Bowdoin’s first public comments on his January decision to submit to the forfeiture came in the form of a Bowdoin letter published in March on the pro-ASD Surf’s Up forum. In the letter,  Bowdoin triumphantly announced he had changed his mind about submitting to the forfeiture — while ignoring the fact that he never told members about the December complaint or his January forfeiture decision. In essence, Bowdoin blamed his former paid counsel for the trouble he was in and said the federal government was prosecuting ASD illegally.

In his letter, Bowdoin chided federal prosecutors, saying his pro se pleadings “should really get their attention” and urging members to write to President Obama, members of Congress and Fox News personality Glenn Beck.

At 74 — and a convicted felon from a 1990s securities scheme in which 89 separate instances of fraud were alleged in Alabama — Bowdoin urged his supporters to tell anybody who cared to listen that he was a victim of an out-of-control government. In July 2008, just days before the government seized tens of millions of dollars from ASD, Bowdoin plunked down nearly $50,000 to purchase a new Lincoln, according to the December forfeiture complaint.

A month later he sent his Alabama victims a check for $100, according to the St. Petersburg Times, a Pulitzer Prize-winning newspaper. The Lincoln alone cost more than the remaining restitution due the Alabama victims.

Even though Bowdoin told ASD members in March that he would hold a conference call soon to explain what was going on, the conference call never materialized. And Bowdoin still has not told members about the proffer letter he signed.

5. General confusion about AVG. One AVG member observed that the firm’s explanations about its business practices have been about as clear as “mud.”  Among the current issues are a failed attempt last week by the company to launch a new website, a denial by a company AVG said was facilitating offshore wire transfers that it had any business relationship with AVG, confusion about AVG debit cards and why some AVG members seem predisposed to cheer for the company as though members were taking part in a religious revival.

Loyalists, meanwhile, continue to maintain that AVG members have a duty not to talk about the company in public, insisting that members adhere to “association” rules.

Some AVG members say they want to use a spreadsheet to educate prospects about potential earnings, but others say spreadsheets are one of the things that led to trouble for AdSurfDaily. At the same time, members are trying to stop other members from using the word “investment” when discussing AVG, apparently believing that calling AVG an “advertising” company instead of an “investment” company somehow would insulate AVG from the prying eyes of the government.

Such attempts at forced wordplay not only provide no protection, they also provide evidence of what investigators call “consciousness of guilt.” Indeed, there would be no reason to insist on the forced use of language if promoters didn’t recognize the legal danger they were in — and calling AVG an “advertising” company does nothing to change the simple fact that AVG and surfs that use similar models are vulnerable to charges of selling unregistered securities as investment contracts. The surfs cannot pass a simple test (“The Howey Test”) that became a threshold securities test and litigation benchmark 63 years ago, in 1946, when Harry Truman was President of the United States. The Howey case was on the books 15 years prior to the 1961 birth of Barack Obama, the current President, and 23 years prior to the first moon landing in 1969.

In recent days, some AVG members have been reluctant even to mention the name “AdSurfDaily,” instead referring to the embattled surf with close AVG ties as the “company.” The paranoia is palpable.

One problem with paranoia — and it is a problem AVG is experiencing — is that it does not translate well among people who have no reason to be paranoid. Many entry-level surf participants, for example, don’t understand that they’re being recruited into a wink-nod enterprise. They ask reasonable questions, but are met with paranoid responses and prompts to be less open and more secretive, which only accents the paranoia among those who know there actually is something to be paranoid about — chiefly, that virtually all autosurfs operate as Ponzi schemes and that the government could shut them down without warning at any moment.

One AVG member instructed “international” members of AVG to insert “NA” in a debit-card application when prompted to supply a Social Security number, an instruction that only heightens concerns about money-laundering and wire fraud.

A triumphant AVG announcement about a new debit card the surf intends to offer was met with a thud when some members found out later that the card came with a $30 fee. Loyalists, however, said members should embrace the fee because it creates a new profit center for the company. Other members are complaining that at least one of AVG’s debit cards seems to limit withdrawals to $100.

AVG promoters, meanwhile, continue to lean heavily on exclamation points — rather than straightforward speech — to make their case for the company. An announcement about an AVG conference call was accompanied by three exclamation points:

“Join Us For Exciting Updates!!!”