DISCLOSURE: Gregg Evans, a longtime member of the antiscam community, is a longtime PP Blog contributor. He was not compensated for this column, and his views are not necessarily the views of the PP Blog.
Who are these “Experts” anyway?
By Gregg Evans
Troy Dooly is the latest “expert” to look like an utter fool in the wake of the Zeek Rewards collapse. For months the apparently respected MLM guru has been defending Zeek against all logic, common sense or demonstrated knowledge of mathematics.
It turns out that — even though in Troy’s “expert opinion” and based upon his “inside knowledge” that he couldn’t share because he wanted to respect a “non disclosure agreement” — Zeek, Zeekler and Rex Venture Group was just another garden-variety Ponzi scheme.
This one added up to $600 million if you’re keeping score. And you should be. That’s more than half a billion dollars.
A few years ago, I decided to not actively hide my identity, but not advertise it either when 12DailyPro collapsed in a heap of scandal based solely on the figures being tossed around about how much money Charis Johnson had drawn in. It occurred to me at the time that there are people out there who will in fact kill you for that kind of coin, and more than a few of them I knew were involved in the scam. I had never received a death threat before, or at least not one I took seriously.
Here we have again a figure that frankly boggles the mind being funneled into a rather transparent Ponzi scheme by a collection of ref whores, financial illiterates and flat-out criminals posting with glee “I got paid” at all the familiar places these kind of folks hang out. As the late Everett Dirksen once said, “A billion here, a billion there, and soon you’re talking real money.”
And here again we have a list of supposed “experts” whose opinion proved that “this time, it’s legit.” I just have to ask, by what standard are these people experts at anything, beyond herding the suckers to the spend button?
I, modestly, consider myself an expert in matters of investing, accounting and how money and banking work. Not just because I think so, mind you, I have an earned PhD in International Business, a MSci in Economics, an MBA and a BBA in Finance (with a shared major in Mathematics, btw).
But honestly, if you’re taking my word for it advice-wise, you’re still a sucker, because anyone can try to impress you with what they say, you have to at least look at the motivation. My motivation is to perhaps save a few people who don’t have my background from falling for the siren song of the pimps like Ken Russo, Troy Dooly and others.
Longtime HYIP huckster "Ken Russo," also known as "DRdave," helped lead the "I Got Paid" cheers for Zeek on the TalkGold Ponzi forum.
You see, I’m not asking you to spend your hard-earned money on anything. I’m not encouraging you to inform your friends, relatives and co-workers about the latest sure-fire-get-rich-with-passive-income scheme. I’m just asking you to think a bit, and trying to explain how real money and business works. I happen to some pretty spiffy credentials, but it’s more important that I’m just making common sense.
You see, some people with credentials as good as or better than mine are blinded by the easy pickings to be had if they sell out their fancy titles and initials after the name. Gerald Nehra is licensed attorney and all indications I have seen are he’s not a bad lawyer, as lawyers go. Gerry’s problem, and potentially yours, is that he’ll suspend his common sense, legal knowledge and objectivity if the check clears
Hey, I hate to judge the man, and everyone deserves good legal representation, but Mr. Nehra has not impressed me so far. I am only familiar with two companies with which he has been publicly associated with in the last few years: ASD Cash Generator and Zeek. The operator of one is in jail waiting to find out he’s going to serve what is likely going to be a life sentence based upon his age, the other one just got their offices locked up by some combination of the Secret Service, the Securities and Exchange Commission and the North Carolina Attorney General.
Our “expert” lawyer, one of the best reputations in MLM law around, testified that ASD wasn’t a Ponzi, and from the looks of it told Zeek that if you tell the suckers not to call it an investment, it’s Okie Dokie legally speaking. Good advice there.
Do I think Gerald Nehra believes this? Well, as much as any lawyer believes the legal theory he’s pursuing he may, but I doubt he had a lot invested in Zeek, if you get my drift. He had, over the years built a reputation, and whether he deserved it or not (and I think not) when ASD needed to show a Federal Judge that paying old investors with new investors money wasn’t a Ponzi scheme, Nehra was right there, willing to lend his expert opinion in a Federal Court that black was white, up was down and Andy Bowdoin of ASD was a business visionary who could somehow pay 1% a day legally.
If he’s trying to represent a defendant in a court of law, that’s his job and I have no problem with that, but if he believes it, well, a friend I once had used to say it was never a good idea to believe your own bar stories or “smoke your own dope” as he put it.
ASD was a cheap Ponzi scheme and anyone not blinded by greed with had enough sense to tie his own laces could see that. A few “MLM Experts” and the “All Star Team of Stupid” ASD cheerleaders, sovereign citizen nutcases and Arby’s Indians couldn’t, but that’s just the kind of people loose on the streets since they changed the laws about involuntary mental patient commitment. The Indians, Sovereigns and pimps I won’t comment on here, but the lawyers did it mostly because it paid pretty well. And Ken Russo isn’t doing it because he likes people either, for what it’s worth, he just lacks the credentials to sound like much more than a crooked used car salesman. People like Troy Dooly should know better, and I suspect they do, but they have no trouble overlooking their own knowledge as long as the check clears.
UPDATED 4:05 PM EDT (U.S.A.): It’s MoneyMakerGroup’s fault that JSS Tripler 2 (T2) — also known as T2MoneyKlub — has collapsed.
And it’s also the fault of “Elmer,” a forum poster who apparently committed the unpardonable sin of questioning the legitimacy of a scheme that advertised a return of 2 percent a day — after naming itself after another scheme that advertised 2 percent a day and after T2 gave birth to itself in a forum referenced in U.S. court filings as a place from which massive HYIP Ponzi schemes such as Legisi and Pathway to Prosperity were promoted.
The bizarre assertions were made by T2 Admin “Dave,” a self-described newlywed apparently fully recovered from a recent bout with Dengue Fever but no longer able to ward off a case of Ponzi topplitis fatalis.
“CLOSED UNTIL FURTHER NOTICE!!” the T2 site screamed last night in all-caps and red type. “DUE TO INCESSANT UNDERMINING BY THE STAFF AND A SELECTION OF ‘STAFF ASSISTED’ MEMBERS OF MONEYMAKERGROUP.COM.”
Only days before, “Dave” announced that members who plowed money into the scheme would begin receiving payments to make them whole and put them in profit. Whether those payments were made remains an open question. Serial scammers and willfully blind Ponzi recruiters who populate the Ponzi boards and organize their public and private sales pitches to speed the flow of cash to the schemes as a means of harvesting commissions as illegal broker-dealers may be the only winners — other than “Dave” himself.
Whether “Dave” assigned himself a Ponzi “rake” is unclear. In the AdSurfDaily online Ponzi case, federal prosecutors said ASD President Andy Bowdoin and a “silent partner” who was Bowdoin’s sponsor in the 12DailyPro online Ponzi scheme agreed to a rake of 10 percent of ASD’s “gross sales.”
The U.S. Secret Service said ASD had gathered at least $110 million. Bowdoin was charged in 2010 with wire fraud, securities fraud and selling unregistered securities. He faces a Ponzi trial in September and a bond-review hearing May 18. Investigators say he continued to scam after the Secret Service raided ASD in August 2008.
Ponzi-board posts suggest “Dave” had access to hundreds of thousands of dollars sent in by T2 members, beginning late last year and at least into the early part of 2012. But a problem with an offshore (from a U.S. perspective) payment processor purportedly developed, a situation that purportedly led to a freeze on cashouts. “Dave” claimed he was operating the program from both Britain and Thailand, while also venturing to countries such as Cambodia.
The collapse of T2 occurred just days after the conclusion of a conference in Israel at which INTERPOL President Khoo Boon Hui described two recent online scams operating in Asia that had gathered billions of dollars and resulted in 220 arrests.
Some of the suspects were trying to make a fast getaway at an airport, Hui said, describing the purveyors as transnational criminals.
“[Eighty] per cent of crime committed online is now connected to organized gangs operating across borders,” Hui said, citing figures from a study by London Metropolitan University. “Criminal gangs now find that transnational and cybercrime are far more rewarding and profitable than other riskier forms of making money.”
MoneyMakerGroup is referenced in both the Legisi and Pathway To Prosperity cases as a place from which Ponzi and fraud schemes are promoted. The combined hauls of those schemes exceeded $140 million, according to court filings.
The combined hauls of ASD, Legisi and Pathway To Prosperity exceeded $250 million, according to court filings. Like Legisi, Pathway To Prosperity and T2, ASD also was promoted on the Ponzi forums. Federal prosecutors now say that OneX — yet another “opportunity” promoted on the forums — is a “fraudulent scheme” and “pyramid.”
Bowdoin now is accused of promoting OneX.
Although the closure announcement on the T2 site did not reference Elmer, remarks attributed to “Dave” (as Peakr8) on MoneyMakerGroup made it plain that “Dave” holds Elmer equally accountable for the collapse of the T2 scheme, which recently started a Ponzi feeder program known as “Compound150.”
Here’s “Dave” as Peakr8 yesterday on MoneyMakerGroup (italics added):
I got an email from [MoneyMakerGroup Admin] Yippee some months back. Included in it was one line I will never forget.
Elmer and his friends will NEVER be banned from MMG, the owner wants them there. To create ‘interesting discussion’.
My kids found this doing a search about T2MK… The youngest is 9 years old, the oldest is 13… they cried.
Hope you feel great about that Elmer and friends.. Hope you all feel great!!
I am closing both programs down as of NOW, and i will leave it to the processors to distribute the funds.
Yippee said hogwash.
“This is a BOLD FACED LIE!” Yippee exclaimed.
Elmer said “Dave’s” Ponzi experienced a meltdown and that “Dave” had become the “newest member of the ‘Crazy admin excuses’ club.”
“Why don’t you just tell the truth Dave? Elmer quizzed. “Your ponzi imploded. It ran out of cash to pay with.”
As part of its fraud, T2 maintained its own fraud forum. In a moment of almost-perfect fraud symmetry, legendary fraudster “Ken Russo” made the last “I got paid” post in T2s subfraud forum for its Compound150 fraud.
Whether “Ken Russo” had plowed into Wealth4All any of his purported May 11 net payout of $535.95 from “Dave’s” multifaceted T2 Ponzi venture is unknown.
“Ask About My Matching Loan Offer,” “Ken Russo” prompted in his ad for Wealth4AllTeam at “Dave’s” forum for the combined T2 frauds.
In March, “Dave” asserted that the PP Blog and “all your lackies” had “completely undermined your credibility . . . from the word go” in stories and comments about T2.
The T2 death notice followed about two months after “Dave’s” assertions on the PP Blog.
A few weeks prior to the Aug. 1, 2008, seizure of tens of millions of dollars in the personal bank accounts of AdSurfDaily President Andy Bowdoin, Bowdoin apparently believed it prudent to plant the seed that the ASD autosurf had amassed a giant pot of cash and would use it to “hammer” critics. His willfully blind followers helped spread the word on forums that ASD detractors soon would feel the sting of being sued back to the Stone Age.
Here, according to federal court filings, is what Bowdoin told ASD members at a company rally in Miami on July 12, 2008:
“These people that are making these slanderous remarks, they are going to continue these slanderous remarks in a court of law defending about a 30 to 40 million dollar slander lawsuit. Now, we’re ready to do battle with anybody. We have a legal fund set up. Right now we have about $750,000 in that legal fund. So we’re ready to get everything started and get the ball rolling.” (Emphasis added.)
Bowdoin thuggishly suggested that ASD had hired a law firm and that the firm was experienced at “bringing the hammer down on people that need it.” It is worth noting that federal prosecutors included the remarks attributed to Bowdoin in a document labeled “Government Exhibit 5.”
Meanwhile, it’s also worth noting that “Government Exhibit 1” consisted of the 2006 SEC complaint against 12DailyPro that accused the firm of operating an autosurf Ponzi scheme. It was the government’s way of showing that autosurfs such as ASD rely on willfully blind promoters to proliferate. “Government Exhibit 2,” meanwhile, was the SEC’s 2007 complaint against the PhoenixSurf autosurf. The inclusion of this exhibit was another way to show willful blindness.
One of the interesting things about the PhoenixSurf complaint was that it referenced Virtual Money Inc., which federal prosecutors in Connecticut later linked to alleged money-laundering by a narcotics cartel in Medellin, Colombia.
Robert Hodgins, the operator of Virtual Money, is an international fugitive wanted by INTERPOL. ASD also used Virtual Money, according to promos for the firm. In December 2010, federal prosecutors said ASD also had a tie to E-Bullion, a shuttered California payment processor whose operator was accused (and convicted) of arranging the brutal slashing murder of his wife in a Greater Los Angeles parking garage. ASD also had a link to E-Gold, a processor convicted in a money-laundering conspiracy case. So did PhoenixSurf.
“Government Exhibit 4” in the August 2008 ASD Ponzi case consists of surveillance photos taken in ASD’s hometown of Quincy, Fla. The date upon which the photos were taken is unclear, but it is known that the U.S. Secret Service began to investigate ASD on July 3, 2008, a little more than a week before the Miami rally.
The entry of the Secret Service in the ASD case fundamentally sent two signals: The U.S. government believed its financial infrastructure might be under attack by an organization — ASD — that was trading on the name of the President of the United States. The SEC has said nothing about the ASD case — at least not in public. Bowdoin was indicted on criminal charges in December 2010. If he is convicted on all counts, the man who once claimed to have a giant pot from which he could draw to “hammer” critics could face up to 125 years in federal prison, fines in the millions of dollars and forfeiture orders totaling at last $110 million.
In the earliest days of the ASD probe, at least three media outlets — including a local newspaper, a Blog and a regional publication — were threatened with lawsuits. Bowdoin ended up suing no one. In fact, within months he was consumed by litigation directed at him from virtually all fronts. Multiple civil-forfeiture complaints were filed, as was a racketeering lawsuit. These things occurred as a criminal investigation was unfolding slowly.
For all these reasons and more, Bogdan Fiedur — and members of the AdLandPro online “community” — should perform a sober assessment of Fiedur’s recent threat to sue RealScam.com, an antifraud forum.
Threats to sue journalists, media outlets, forums, Blogs and other websites that publish information about online schemes are bids to chill speech. These bids are occurring as an epidemic of white-collar crime and securities fraud is sweeping the globe during a period in which government budgets are strained and literally thousands of fraud investigations are under way that reach into all corners of the world.
It is clear that online fraud is responsible for billions of dollars in global losses. These worlds are exceptionally murky. No one knows for certain where the money goes when fraud schemes disappear — as they so often do. It is equally clear that criminal puppeteers behind the schemes are taunting investigative agencies. From the standpoint of the U.S. government, the government and financial institutions are facing attacks of thousands of tiny cuts.
Lanny Breuer, the head of the U.S. Department of Justice’s Criminal Division, testified on Capitol Hill yesterday that the “convergence of threats” posed by transnational organized crime is “significant and growing. ”
“Transnational organized crime is increasing its subversion of legitimate financial and commercial markets, threatening U.S. economic interests and raising the risk of significant damage to the world financial system,” Breuer told the Senate Judiciary Subcommittee on Crime and Terrorism.
Despite worldwide headlines of one massive fraud scheme after another — and despite the fact that the financial lives of real human beings in all corners of the world are being reduced to rubble by serial Ponzi schemers and scammers — Bogdan Fiedur is threatening to sue RealScam.com.
At a minimum, it is a PR blunder of the highest magnitude. Bowdoin made the same mistake. So did Data Network Affiliates (DNA), a purported business “opportunity” associated with serial huckster Phil Piccolo, who once planted the seed that, if lawsuits didn’t work, he knew the type of people willing to break legs to silence critics. One apologist for Piccolo and DNA planted the seed that a former federal prosecutor, federal judge and director of the U.S. Department of Homeland Security was a suspect in the 9/11 terrorist attacks.
It doesn’t get much more bizarre than that — unless one is willing to consider that Bowdoin now is trying to raise funds for his criminal defense on Facebook and claiming that God established a program known as OneX to help him do just that.
OneX is among the “programs” promoted by members of the AdLandPro “community” — as were ASD and Finanzas Forex (and many others) before it.
And yet Fiedur apparently believes he can chill RealScam.com into stop doing what it does by registering a domain titled “RealScamClassActionSuit.com.”
Inverting reality, the purported class-action site ventures that “RealScam encourages cyber-bullying and cyber-stalking by allowing the creation of anonymous accounts and by allowing the users to present of (sic) unproven accusations towards individuals of their targeted organization. The RealScam.com turns out to be just a harassment and bashing site with no verification of facts and indiscriminate attacks at anyone who looks like an easy target.”
It’s easy to imagine Andy Bowdoin or Phil Piccolo saying the same thing — while doling out accolades to the AdLandPro “community” for its excellent judgment about the types of “programs” the world’s masses should be joining.
“The wealth generated by today’s drug cartels and other international criminal networks enables some of the worst criminal elements to operate with impunity while wreaking havoc on individuals and institutions around the world,” Breuer of the Justice Department observed yesterday. “Generating proceeds often is only the first step — criminals then launder their proceeds, often using our financial system to move or hide their assets and often with the help of third parties located in the United States. Indeed, international criminal organizations increasingly rely on these third parties and on the use of domestic shell corporations to mask crimes and launder proceeds under the guise of a seemingly legitimate corporate structure.”
And then Breuer asked the Senate panel to enact legislation that would strengthen money-laundering and asset-forfeiture laws and broaden the federal RICO statute.
Whether the Senate — and the Congress as a whole — will listen is unclear. What is clear is that, at least in the context of online fraud schemes, victims are piling up in numbers that America’s largest sports stadiums cannot accommodate. Losses are in the billions. Vast sums of wealth have been taken from rightful owners and placed in the hands of criminals.
It is simply beyond the pale that Fiedur asserts that RealScam.com is a menace, when it is one of the few sites in the world that tasks itself with exposing the menace of international mass-marketing fraud that occurs over the Internet.
One final thing worth mentioning: A few weeks before Breuer ventured to Capitol Hill to testify before the Senate panel, he carried out another important public duty.
On Sept. 26, Lanny Breuer joined U.S. Attorney Ronald C. Machen Jr. in announcing that ASD victims who filed successful remissions claims in the civil Ponzi case were getting $55 million back.
“We will continue to use every tool at our disposal to bring justice to the citizens defrauded by these insidious schemes,” Breuer said.
CenturionWealthCircle (CWC) appears to be moving from the ridiculous to the absurd, fueled in no small measure by serial, wink-nod scammers on the Ponzi boards. Members of Club Asteria, an “opportunity” that suspended cashouts weeks ago amid reports its PayPal account had been frozen, were among CWC’s early cheerleaders.
Club Asteria promoters also have been linked to Florida-based autosurf purveyor AdSurfDaily. ASD President Andy Bowdoin was arrested in December on charges of wire fraud, securities fraud and selling unregistered securities. He potentially faces decades in prison, if convicted.
Bowdoin now is seeking to raise $500,000 to pay for his criminal defense, according to a video featuring Bowdoin released last month.
CWC began to emerge as a Ponzi darling in mid- to late June, after Club Asteria’s problems had become known. By late July, however, CWC’s website appears to have been suspended for spamming — and the site disappeared. The site appears to have switched servers, even as members were complaining about low or absent payouts.
In an apparent bid to re-plumb a collapsed Ponzi that already had been the subject of spam complaints, CWC now appears ready to suck up more cash by implementing a “feeder” program that at least one Club Asteria cheerleader (manolo) is describing on the TalkGold Ponzi forum as a “Mini cycler” or “The Tornado.”
Among other things, manolo claims that “more exciting updates are coming on top of the above news.”
Various incongruities dot various posts about CWC on both TalkGold and the MoneyMakerGroup Ponzi forums, where some posters have declared in public that CWC is in need of new money to survive.
CWC has not said whether it is confident that its income stream is not polluted with proceeds from various Ponzi schemes. The nature of the cycler business itself is to recycle money from one group of members to another. One of the allegations against ASD was that it was a classic Ponzi scheme that recycled funds.
These words (see next paragraph) appear in a February 2009 affidavit originally filed under seal by the U.S. Secret Service in the ASD Ponzi scheme forfeiture case. (NOTE: The document identifies certain ASD promoters and was used to seize their ASD-related funds.)
“Based on his experience with 12daily Pro, and his review of the SEC’s filings against it, Bowdoin knew that a paid auto-surf program that promised returns of that magnitude and recycled (emphasis added) member funds was a business model that was both unsustainable and illegal. He also knew that selling an unregistered investment opportunity to thousands of investors was illegal. Nevertheless, after the collapse of 12daily Pro, Bowdoin agreed with his 12daily Pro sponsor to start a similar autosurf program. Both individuals were aware that, before its collapse, 12daily Pro had taken in millions of dollars from its members.”
Among the other allegations against ASD is that it formed a new autosurf Ponzi to address a collapsed, old autosurf Ponzi — and later launched more autosurf Ponzis to sustain the deception that legitimate commerce was under way.
CWC appears to be doing the same thing — only with cyclers, as opposed to autosurfs.
UPDATED 1:46 P.M. EDT (U.S.A.) AdSurfDaily “paid out millions of dollars to operators and insiders,” according to a U.S. Secret Service affidavit originally filed under seal in February 2009.
But ASD President Andy Bowdoin changed the subject when people told him that what Florida-based ASD was doing not only was illegal, but also was “not mathematically possible,” according to the affidavit.
What he was trying to do, according to court filings, was establish at least three autosurfs that would generate Ponzi-extending cash while Bowdoin positioned them as legitimate “advertising” businesses.
And Bowdoin also wanted to persuade members that he had discovered a formula that purportedly made it possible for ASD to set aside 50 percent of its daily revenue and pay participants 125 percent of what they paid in — all while planting the seed that members could expect a return of 8 percent a day on some days.
Investigators saw things a different way, saying ASD was creating a minimum liability of $1.25 for every dollar it took in.
“Try it — it works,” Bowdoin simply told the doubters, changing the subject instead of addressing the mathematical realities, according to the Secret Service.
There was too little profit in operating legitimately, Bowdoin told a consultant, according to the Secret Service.
As ASD was facing a Ponzi abyss, a consultant told Bowdoin there was a way for ASD to clean up its act, according to the Secret Service.
“Bowdoin, however, was dissatisfied with the consultant’s revenue sharing proposal and with the limited revenue a legitimate business would produce,” the Secret Service alleged in the February 2009 affidavit. “Bowdoin rejected the consultant’s plan and terminated his relationship with the consultant.”
Bowdoin had arrived at his 50-in/125-out formula after an earlier formula in which ASD purportedly had set aside 60 percent of its revenue to pay participants 150 percent of what they paid in had brought on a Ponzi collapse that caused the company to cease operations and leave investors in limbo for weeks in 2007, according to the Secret Service.
ASD’s original formula was concocted by Bowdoin and his “silent partner,” a man who recruited Bowdoin into the 12DailyPro autosurf Ponzi scheme, according to the Secret Service.
Both of ASD’s formulas were just a means of hiding ASD’s true nature as a financial beast with a fatal disease, according to court filings.
Despite the spectacular collapse of 12DailyPro amid Ponzi allegations filed by the SEC in early 2006, Bowdoin and his silent partner ruminated that 12DailyPro simply had promised to pay out too much money on a daily basis, according to the Secret Service.
Upstart ASD, Bowdoin and his silent partner speculated, could take regulators out of play and avoid the Ponzi fate of 12DailyPro by telling investors that the firm would pay out less money and by introducing verbal sleight-of-hand to disguise the true nature of the business, according to the Secret Service.
ASD also speculated that it could circumvent the Ponzi problem and law-enforcement scrutiny by suggesting that ASD’s payouts, which the firm called “rebates,” were not “guaranteed,” according to the Secret Service.
Despite telling members to “Try it — it works,” Bowdoin had no confidence in his business model and knew it was still a Ponzi despite the post-12DailyPro tweaking. In the end, according to court documents and other records, ASD still was telling investors they’d get back more than they paid in and, on a yearly basis, would receive a return of 365 percent at a “rebate” rate of 1 percent a day.
Even as ASD was playing in the post-12DailyPro fields and grew eventually to suck in tens of millions of dollars a week, less than 2 percent of its revenue came from external sources. More than 98 percent came from members and was simply being recycled to other members to keep the Ponzi afloat, according federal prosecutors.
At a certain point in time, Bowdoin did away with unlimited purchases and limited the amount investors could pay ASD to $12,000 “because he did not want members to lo[]se too much money should ASD collapse,” according to the February 2009 Secret Service affidavit.
The import of the claim is that prosecutors can argue to a jury that Bowdoin himself was worried about the imminent demise of ASD — a demise Bowdoin brought on through the use of various mathematical concoctions, linguistic fantasies and fabrications designed to separate people from their money to keep the Ponzi afloat.
Meanwhile, the claim sets the stage for prosecutors to tell a jury that Bowdoin anticipated a catastrophe and sought to insulate himself from prosecution by suggesting that ASD did not guarantee rebates and that customers were purchasing “advertising,” as opposed to entering into an investment contract with ASD.
“[T]o ensure that no individual investor monopolized the rebate pool, and to reduce the
likelihood that any individual investor would suffer a catastrophic loss, Bowdoin placed a limit on the amount of ‘advertising’ members could purchase,” the Secret Service said. “Of course, it would have made no sense to impose such limitations if ASD was actually selling, and members actually were purchasing, Internet advertising.”
Bowdoin’s various stories were at odds with themselves, the Secret service alleged. Even as Bowdoin was telling members ASD was not in the investment business and instead was a provider of advertising “rebates,” ASD’s computer systems described member payouts as “ROI” — for Return on Investment.
And even as he positioned himself as a Christian “money magnet” and merchant who’d been recognized by the President of the United States — and even as he purportedly was enforcing a $12,000 purchase ceiling to minimize the chance an individual investor would become engulfed in a calamity — Bowdoin told attendees of company “rallies” in U.S. cities that ASD would match the money they plowed into the firm 50 cents on the dollar.
“At the rallies, to raise more money, Bowdoin concocted the idea of running ‘rally-only promotions,’” the Secret Service alleged. “New members were told they would receive a 50% bonus for joining at the rally. For example, if a new member purchased $500 in ‘ad packages’ as a bonus she would be credited $750 to her account. Representatives of ASD stated this was a ‘World Wide Wealth’ program that was available to anyone with Internet access.”
In early 2008, Bowdoin became a participant in a scheme with a “North Carolina” attorney to assure prospects that ASD had been vetted and was operating lawfully. ASD’s 26-minute legality video and the rallies caused tens of millions of dollars suddenly to flow into the firm, according to the Secret Service.
Just a year earlier, the company suspended operations because it was starved for cash flow and faced a collapsed Ponzi, according to the Secret Service. ASD’s response to the collapse was to launch a new autosurf Ponzi under a new name — and to port the accounts of its original set of victims into the new scheme, where the payouts early loyalists had expected would be funded by incoming participants who did not know their money was being distributed to Bowdoin’s orginal victims.
Later in 2008, as spring and summer warmth returned to northern climes, ASD found people throwing money at it. Some of the people who threw money at ASD did so at rallies in Iowa, according to the Secret Service.
Affidavit For Seizure Targeted At At Least 7 Iowa Bank Accounts
The PP Blog reported in December 2010 that funds traced to Bowdoin and two other ASD members had been targeted in yet-another forfeiture action in the District of Columbia. The action was filed less than three weeks after Bowdoin’s Dec. 1 arrest by federal agents in Florida on Ponzi-related charges of wire fraud, securities fraud and selling unregistered securities.
Prosecutors’ December civil-forfeiture action was at least the third targeted at assets owned by Bowdoin. Assets of two other ASD members — Erma “Web Room Lady” Seabaugh and Robyn Lynn Stevenson (also: Robyn Lynn) of Florida — also were targeted.
The civil case against Bowdoin’s assets is on hold because of the criminal allegations against him. But the cases against the assets of Seabaugh and Lynn remain active. Neither Seabaugh nor Lynn had filed a claim for the money as of Friday.
In the case against Seabaugh’s assets, the government was authorized to seize $213,693 from a bank account, but found only $153,097 in the account. The Secret Service seized $96,525 from two bank accounts linked to Lynn.
Some of the money Seabaugh plowed into ASD originated at E-Bullion, a shuttered California money-services business operated by convicted murderer James Fayed, who ordered the execution of his estranged wife in 2008.
Pamela Fayed, a potential witness against her husband on matters pertaining to E-Bullion and an associated business known as Goldfinger Coin & Bullion, was slashed to death in a Los Angeles-area parking garage on July 28, 2008.
On Aug. 1, 2008, the Secret Service seized tens of millions of dollars from Bowdoin’s bank accounts. The December 2010 claim by federal prosecutors that Seabaugh had used E-Bullion to fund one of her ASD accounts was the first public tie between ASD and E-Bullion, which has been linked to multiple Ponzi schemes.
Seabaugh had multiple ASD accounts with multiple email addresses — and appeared to be “selling her own investment ‘ad packs’ to clients and representing herself as ASD,” the Secret Service alleged.
The PP Blog learned on June 10 that the Secret Service, in February 2009, also targeted proceeds in seven bank accounts belonging to ASD members in Iowa for forfeiture. In an affidavit, the agency said the accounts contained at least $413,018.
How the cases are evolving was not immediately clear. The Secret Service, according to the affidavit, identified the assets as proceeds of an ASD-related wire-fraud scheme.
Acting as pro se pleaders and using a litigation template associated with ASD participant Curtis Richmond, one of the so-called Arby’s Indians, two of the individuals associated with the Iowa accounts cited by the Secret Service in the February 2009 affidavit later attempted unsuccessfully to intervene in the main civil-forfeiture case against Bowdoin’s assets.
The February 2009 Secret Service affidavit identifies the individuals as Joyce and Michael Haws.
“Joyce Haws was an active participant in and large promoter of the ASD wire fraud
scheme,” the Secret Service alleged in the affidavit. “Ms. Haws was one of several people who requested and facilitated one of the first rallies within ASD, in Ankeny, Iowa, on about March 15th, 2008.”
Haws recruited her mother and others into the scheme, according to the affidavit.
Walter Clarence Busby Jr., a Georgia minister and Bowdoin’s alleged business partner in Golden Panda Ad Builder, identified Joyce Haws and her “spouse” in 2008 as “founders” of Golden Panda.
In the same Busby affidavit, filed on Aug. 29, 2008, Busby identified Robyn Lynn as the person who introduced him to ASD.
Curtis Richmond was an early mainstay in the ASD story. He has a contempt-of-court conviction for threatening federal judges, has been banned from the practice of law in Colorado even though he is not an attorney and has been sued successfully under the federal racketeering statute for harassing public officials and participating in schemes to place bogus financial judgments against them.
Richmond, who proclaimed himself a sovereign being answerable only to God, was a member of a Utah “Indian” tribe a federal judge ruled a “sham.” The “tribe” got its derisive name — the Arby’s Indians — because it once held a meeting in an Arby’s restaurant.
The “tribe” also used the address of a Utah doughnut shop as the address of its “Supreme Court,” while threatening public officials with arrest and detention for carrying out their official duties.
EDITOR’S NOTE:First of two parts. Part Two will be published later tonight or tomorrow.
Even as AdSurfDaily President Andy Bowdoin was venturing to Washington in June 2008 to receive what his members and prospects were told was the “Medal of Distinction” from the President of the United States, he was harboring terrible secrets and knew full well his autosurf business was a Ponzi scheme that could collapse at any second and lay waste to thousands of investors, according to court records and an affidavit originally filed under seal by the U.S. Secret Service.
Much of the information from the affidavit, which was filed in February 2009, is being published today for the first time. Companion court documents in ASD-related litigation show that part of a third civil-forfeiture case brought in December 2010 against assets alleged to be owned by ASD and Bowdoin has been put on hold while Bowdoin is battling criminal allegations — and that some individual ASD members whose assets were targeted for forfeiture in the same case have not filed claims for money seized from their bank accounts. Although the forfeiture action against Bowdoin has been suspended, the cases against the assets of the individual ASD members remain active.
Just two months prior to his June 2008 Washington jaunt — in April 2008 — Bowdoin had flown at the prompting of a “North Carolina lawyer” to Panama and Costa Rica with his wife and the lawyer. The purpose of the trip, according to the affidavit, was to incorporate ASD Cash Generator and an entity known known as La Sorta Trading outside of U.S. jurisdiction to create wiggle room if U.S. regulators came knocking.
ASD Cash Generator was the replacement name for the original ASD autosurf business, which was known simply as AdSurfDaily. The first scheme collapsed in 2007, leaving Bowdoin’s first set of investors holding the bag, according to the affidavit. Bowdoin’s later investors were not told about the firm’s dubious history.
La Sorta Trading, whose purpose was not immediately clear, never before has been referenced in the ASD case. La Sorta is the name of a city in Honduras, another country in Central America. It is not known if the firm was named after the city.
Bowdoin also was exploring the possibility that he and his wife would move from the small town of Quincy, Fla., to Costa Rica, the Secret Service advised U.S. District Judge Rosemary Collyer.
“Bowdoin’s wife did not like Costa Rica, however, and his plans to move ASD’s operations off shore were shelved,” according to the affidavit.
The February 2009 affidavit paints Bowdoin, now 76, as a man experiencing pressure from multiple points of contact — and as a man who made one disastrous decision after another. One of the things allegedly pressuring Bowdoin was fear that the Ponzi could come tumbling down before enough new members were recruited to keep cash churning and the facade of a successful and lawful business in place. Yet-another was fear that insiders, ordinary members and even employees could turn on him. Still-another was fear that a government intervention could occur at any time, according to the affidavit.
Of the millions of dollars that had flowed into ASD, “less tha[n] $25,000 was derived from independent revenue,” according to the affidavit. The rest had come from members and was being recycled in classic Ponzi scheme fashion, with Bowdoin initially empowering himself and a “silent partner” to rake 10 percent of ASD’s “gross sales” and split it evenly: 5 percent each.
But even as he was in Washington in June 2008 to receive an award he positioned as a Presidential acknowledgment of his business acumen, Bowdoin knew that his silent partner posed a risk to him, according to the affidavit.
That silent partner, according to the affidavit, was Bowdoin’s “sponsor” in 12DailyPro, an autosurf the SEC accused of running a massive Ponzi scheme more than two years earlier.
Through his sponsor, Bowdoin had invested $100 in 12DailyPro. The money was lost quickly because the SEC shut down 12DailyPro soon after Bowdoin joined. But Neither Bowdoin nor his silent partner took the clue from the SEC’s action, according to the affidavit. Instead, they worked on ways to channel 12DailyPro-like revenue to themselves and disguise what they were doing.
“Based on his experience with 12daily Pro, and his review of the SEC’s filings against it, Bowdoin knew that a paid auto-surf program that promised returns of that magnitude and recycled member funds was a business model that was both unsustainable and illegal. He also knew that selling an unregistered investment opportunity to thousands of investors was illegal. Nevertheless, after the collapse of 12daily Pro, Bowdoin agreed with his 12daily Pro sponsor to start a similar autosurf program. Both individuals were aware that, before its collapse, 12daily Pro had taken in millions of dollars from its members.”
Under Bowdoin’s agreement with his silent partner, Bowdoin was responsible for managing ASD’s operations. The partner, meanwhile, was responsible for marketing ASD.
In December 2006, about a year and a half prior to Bowdoin’s June 2008 trip to Washington amid claims he was receiving a Presidential award for business smarts, Bowdoin arbitrarily slashed the silent partner’s cut of the upstart ASD business from 5 percent of the gross to 1 percent, according to the affidavit.
Despite the fact Bowdoin had been a 12DailyPro member recruited into that SEC-smashed Ponzi scheme by the same person who’d later emerge as his silent partner in ASD, Bowdoin explained to the silent partner that he — meaning Bowdoin — “was performing most of the work, and bearing most of the risk in operating ASD,” according to the affidavit.
With those words, Bowdoin imposed a pay cut on the silent partner, who later asserted Bowdoin had ripped him off, according to the affidavit.
In August 2008, during a search of Bowdoin’s home in Quincy less than two months after the Washington jaunt and the Presidential claims, the Secret Service found Bowdoin’s handwritten notes from December 2006 that “show his and his silent partner’s awareness of the risks of the auto-surf program they were conducting,” the Secret Service said in the affidavit.
“Bowdoin’s notes indicate that he told his silent partner that the partner should have made him better aware of those risks ‘knowing regulators were on the prowl for surfing sites,’” the Secret Service alleged.
It is known from other documents that the Secret Service opened the ASD probe after becoming aware of the company on July 3, 2008, about 17 days after Bowdoin had ventured to Washington amid claims he’d be be receiving a Presidential award and dining with President George W. Bush and Vice President Dick Cheney.
One of the documents is a 57-page evidence exhibit that includes surveillance photos taken in Quincy prior to the seizure of tens of millions of dollars from Bowdoin’s 10 personal bank accounts, one of which allegedly contained more than $31.6 million. The Secret Service was alarmed as it began the process of peeling back layers of the onion, according to court records
Before July had come to a close, the agency — confronted with a murky fact set and trying to figure out how a man who claimed to have had a remarkable business career that had captured the attention of the President of the United States — had assigned multiple undercover agents to the ASD case.
One of the earliest puzzles to solve, according to court documents, was that Bowdoin had left behind a string of dissolved companies in Florida and professed to be wealthy — but had “earned no significant income from legal employment in the twenty years prior to his commencement of ASD’s operation.”
As the investigation progressed, according to court documents and the February 2009 affidavit, agents discovered that ASD had “special” members who provided Bowdoin start-up capital to varying degrees. These “special” members were grouped as members of ASD’s “President’s Circle,” “President’s Advisory Board” and “President’s Advisory Counsel,” and also knew about the 12Daily Pro Ponzi.
At least “some” of them, according to the affidavit, counseled Bowdoin not to use the name he initially contemplated in 2006 for the upstart enterprise: DailyProSurf.
Some of the special members, who were entitled to higher compensation than ordinary members, “complained” that DailyProSurf sounded too much like 12DailyPro. In response to the concerns, the enterprise abandoned the DailyProSurf name and used the name AdSurfDaily as a means of avoiding “law enforcement scrutiny,” according to the February 2009 affidavit.
The document did not name the “special” members. It was filed under seal on Feb. 26, 2009, during a period in which an autosurf known as AdViewGlobal (AVG) was launching. AVG may represent the fourth iteration of ASD, one launched months after the seizure of Bowdoin’s bank accounts by the Secret Service in August 2008.
AVG’s name is not referenced in the February 2009 affidavit. In June 2009, however, AVG’s name surfaced in a racketeering lawsuit brought against Bowdoin and North Carolina attorney Robert Garner. In September 2009, the government made a veiled reference to AVG in court filings.
Lawyers Referenced In Secret Service Affidavit As Bowdoin’s Partners In LaFuenteDinero, The ‘Spanish’ ASD
NOTE: The PP Blog became aware in 2010 that the government had subpoenaed at least three North Carolina attorneys, including Robert Garner, in the ASD case. The other two attorneys were husband and wife. The husband, who was sentenced to a year in federal prison in 2006 for lying to the FBI in a real-estate case, was disbarred in 2009. Bowdoin challenged the subpoenas, arguing that his communications with the lawyers were privileged. A federal judge ruled that the attorneys had to testify.
The Blog, which previously has published stories that reference Garner, is doing so again today. Garner is listed in Nevada records as a “director” of AdSurfDaily Inc., with Bowdoin as the president, secretary and treasurer. However, the Blog is choosing today not to publish the names of the husband-and-wife attorneys, but reserves its right to do so in the future.
Moving on . . .
One of the most stunning allegations in the February 2009 Secret Service affidavit, which became a public record when the seal was lifted in May 2009 and which the PP Blog is reporting on for the first time today, was that two of the North Carolina lawyers were proposed as Bowdoin’s business partners in LaFuenteDinero (LFD). LFD was ASD’s so-called Spanish autosurf. The proposal was made by one of the lawyers, who described the other lawyer as his “law partner.”
The section below is verbatim from the February 2009 Secret Service affidavit:
“In approximately September or October 2007, ASD’s North Carolina lawyer suggested to Bowdoin that they should start a new site that was in Spanish. In addition, the North Carolina lawyer suggested that the company associated with this site should be set up off shore because when these type of companies raise too much money the government comes in and shuts them down. The North Carolina lawyer recommended that he, his ‘law partner’ and Bowdoin would each share ownership of the Spanish site (as 1/3 share partners). In return for the others’ ownership interests, the North Carolina lawyer and his associate would handle the incorporation work and all of the work needed to move operations offshore.”
By early 2008, with nearly a year and a half of troubled operation under its belt and a Ponzi collapse that had caused ASD to cease operations for weeks in 2007 as it tooled up for a second try under the ASD Cash Generator brand, Bowdoin was growing “suspicious” of at least one of the North Carolina lawyers, according to the affidavit.
“In February 2008, Bowdoin, the North Carolina lawyer and an ‘Internet marketer’ discussed expanding ASD by beginning a new site in Chinese, which would be called Golden Panda Ad Builder,” according to the affidavit. “The North Carolina lawyer suggested a person that would be well suited to run the site offshore, but Bowdoin was beginning to get suspicious of the lawyer. Bowdoin decided, instead, to split the Chinese site with the Georgia minister. Bowdoin told the Georgia minister that ASD had no outside income sources and that ASD’s survival was depend[e]nt on an ever growing base of new contributors. The Georgia minister began working on developing the Chinese auto-surf site.”
‘Georgia Minister’ Allegedly Caught Stealing By ASD Employees; Bowdoin Allegedly Stays Silent About Theft
Bowdoin, according to the affidavit, confronted trouble from any number of fronts. One of his colleagues — the “silent partner” who had been Bowdoin’s 12DailyPro sponsor whose rake Bowdoin allegedly had slashed after they started ASD — told Bowdoin he believed he was owed $20,000 and threatened to expose ASD’s new operation.
“Bowdoin agreed to compensate the sponsor” after initially balking, according to the affidavit.
And Bowdoin also was under pressure from the “North Carolina lawyer” to move the ASD operation offshore — counsel Bowdoin earlier had resisted but agreed to explore in April 2008, despite his suspicions about the lawyer, according to the affidavit.
During the first half of 2008, with Golden Panda still not off the ground during a period in which the “Georgia minister” had access to ASD’s computer system, ASD employees began to complain that the minister was “padding” his ASD account by “secretly using his access to the computer system to increase his/relatives’ number of ad packages,” according to the affidavit.
Bowdoin personally investigated the complaints, comparing the “Georgia minister’s” account with banking records.
Bowdoin “confirmed for himself that the Georgia minister was in fact stealing money from ASD by creating free ad packages,” according to the affidavit. “When confronted, the Georgia minister denied the allegations and asserted that he had proof that the ad packages he created flowed from legitimate deposits of funds into ASD’s bank accounts. The Georgia minister never showed Bowdoin this proof, however, and each time Bowdoin or someone else inquired about the evidence of deposits, the Georgia minister created an excuse to explain why he did not then have it.”
Instead of firing the Georgia minister and ending the relationship, “Bowdoin did not pursue the matter,” according to the affidavit.
Things took a dramatic turn “in about June 2008,” when ASD employees discovered that “the Georgia minister had been permanently enjoined by a court from committing violations of the federal securities laws.
“When ASD employees disclosed this information to Bowdoin, they told him that ASD needed to distance itself from the minister,” according to the affidavit. “Bowdoin agreed to severe his ties to the Golden Panda operation after several ASD employees indicated that they were unwilling to work with the Georgia minister.”
Walter Clarence Busby Jr. of Acworth, Georgia, has been identified by the government in other court filings as Bowdoin’s Golden Panda partner. Separate court documents describe Busby as a minister and real-estate professional, and the SEC described Busby in 1997 as a prime-bank swindler.
In court filings in the ASD case, Busby advised Collyer that he had prevailed upon another minister to assist him in arranging a relaxing day of fishing with Bowdoin in April 2008. During that same month, according to the February 2009 Secret Service affidavit, Bowdoin ventured to Central America with his wife and a “North Carolina lawyer.”
The fishing excursion took place in Brunswick, Georgia, on April 11, 2008, according to court filings by Busby. Five days later, according to the February 2009 Secret Service affidavit, Bowdoin was in Panama and Costa Rica, discussing ASD business and the formation of the La Sorta Trading firm.
Coming later: Government moves against money in ASD-related bank accounts in Iowa and other states.
BULLETIN:UPDATED 9:29 P.M. ET (U.S.A.) Prosecutors have advised a federal judge that AdSurfDaily President Andy Bowdoin and unnamed “others” traveled to Costa Rica in the spring of 2008 to get the lay of the land for an offshore autosurf that would be “another version” of ASD.
The alleged trip occurred less than two years after the SEC accused 12DailyPro, an autosurf based in North Carolina, of selling unregistered securities in the form of investment contracts, prosecutors said.
The explosive claim Bowdoin ventured offshore to pursue the creation of an ASD satellite may signal that the government views ASD not only as a Ponzi scheme, but as a business that deliberately sought to dial up its efforts to circumvent U.S. laws and create an even greater Ponzi war chest by establishing a footprint outside the United States.
Since at least February 2006, the SEC has described the autosurf business model as anathema and a form of obvious securities fraud. Bowdoin was well aware of the SEC lawsuits and scrutiny domestic autosurfs such as 12DailyPro, PhoenixSurf and CEP had sparked in 2006 and 2007, prosecutors said.
Meanwhile, investigators have evidence that shows ASD’s internal software system described payments to members as “ROI,” an acronym that that means “return on investment,” prosecutors said.
The assertions by prosecutors — if proven true — may undermine ASD’s defense strategy of arguing it was an “advertising” program, not an “investment” program.
Prosecutors did not identify by name the surf allegedly contemplated for Costa Rica. In late 2008 and early 2009, a surf with close ASD ties known as AdViewGlobal (AVG) debuted. The launch occurred about four to five months after the U.S. Secret Service seized $65.8 million from the personal bank accounts of Bowdoin in August 2008.
Bowdoin’s trip to Costa Rica occurred before the ASD seizure, prosecutors said. If true, the claim could be used to prove ASD was seeking an exit plan even before the Secret Service raid. In 2008, prosecutors asserted that Bowdoin had moved millions of dollars offshore and talked about purchasing a home in another country.
AVG purported to operate from Uruguay, but had servers that resolved to Panama. Some ASD members have said Bowdoin was a silent partner in AVG.
Prosecutors described the “ROI” development as just another ASD incongruity, advising U.S. District Judge Rosemary Collyer that Bowdoin was well aware that a serious securities challenge could be made against his firm and chose to ignore the risk and misinform members.
Beginning as early as January 2007, “[O]thers warned Bowdoin that ASD was nothing more than an investment scheme and that the program needed to be changed if it were to operate legally,” prosecutors argued in a brief to Collyer. “Bowdoin did not heed that advice and continued unabated in offering members higher returns than banks or brokerage firms. Moreover, based on his prior criminal experience, Bowdoin was well aware of the securities regulations and knew he was offering a security.”
Any argument that ASD was not offering “investment contracts” as defined under the Howey Test should be dismissed, prosecutors said, arguing that ASD meets all three prongs of the Howey Test.
Bowdoin sought about three weeks ago to have the criminal charges filed against him dismissed, arguing that ASD met none of the three Howey prongs.
Nonsense, prosecutors said.
ASD’s advertising was “merely a cover for Bowdoin’s sale of a get rich quick scheme,” prosecutors said.
And prosecutors also cited other alleged proof that ASD was running an investment program — namely that some employees were being paid in ASD “ad packs.”
“Bowdoin and the employees of ASD treated the ‘ad packages’ as shares from which they could expect to earn returns,” prosecutors argued.
Prosecutors also pointed out a section of ASD’s Terms of Service that stated the firm “will” pay members 125 percent of the money they paid in. At the same time, prosecutors quoted video evidence of Bowdoin wooing members by focusing on ASD as a money-making opportunity.
Bowdoin, prosecutors said, eventually limited the amount of money investors could pay ASD “because he did not want any one member dominating the return pool.”
The prosecution’s assertions occurred against the backdrop of dozens of competing claims by ASD members who filed pro-se pleadings in the civil portion of the case that asserted the government had no “EVIDENCE.”
Members made the claim despite the fact that some of the evidence against ASD had been part of the public record for more than a year at the time the claims were made in 2009.
In a footnote to Collyer, prosecutors said they’d be happy to present the actual video of Bowdoin making various claims instead of simply quoting from a transcript.
“[T]he government’s review of ASD’s bank records revealed that of the approximately $31 million ASD paid out to early members, more than 98% of that money came from monies paid to ASD by other members,” prosecutors said.
Although ASD claimed to have funding sources beyond advertising payments made by members — things such as banner ad sales and ebooks — those outlets provided only de minimis revenue, prosecutors argued.
“Each night, there was nothing more than new members funds to divide among existing members,” prosecutors argued. “Moreover, Bowdoin himself admitted, on video, that members funds are pooled and they will share in the profits and losses equally.
“Specifically, Bowdoin, in the ‘New Member Success Video,’ claimed that “[w]hen sales increase, the rebates increase. When sales decrease the rebates decrease . . .”
“Clearly Bowdoin, through ASD, was pooling all of the member’s funds which allowed him to make the requisite return payments,” prosecutors said.
Prosecutors also argued that the ASD case should remain in Collyer’s courtroom in the District of Columbia. Bowdoin argued that the case should be transferred to Florida, in part because he and many witness live there.
Although prosecutors agreed that many prospective witnesses live in Florida, they argued that witnesses reside in multiple jurisdictions because of the national and international scope of the case.
In addition to Floridians, witnesses the government may present hail from the District of Columbia, North Carolina, Nevada, Oklahoma, Iowa and elsewhere, prosecutors asserted.
ASD also had members from at least 18 countries, and conducted “rallies” in Illinois and Minnesota, among other states, prosecutors said.
Read Bowdoin’s claims that the charges against him should be dismissed and that ASD did not meet any of the three Howey Test prongs.
The TalkGold Ponzi scheme and criminals’ forum has deleted a “sticky” thread reportedly paid for by InstaForex, a dubious company named a defendant in a registration sweep conducted by the U.S. Commodity Futures Trading Commission last month.
The PP Blog reported two days ago that InstaForex was using TalkGold to promote a scheme by which participants who sent InstaForex at least 1,000 U.S. dollars could qualify to win a Lotus Elise valued at more than $50,000. Although sweepstakes that require a purchase are illegal in the United States, InstaForex bizarrely instructed investors that they could improve their odds of winning the car by opening up to 100 accounts each.
Some of the InstaForex promoters used photographs of attractive women to promote the scheme. It was unclear whether the photos were actual pictures of the promoters or whether they were stage props designed to lure skeptical investors.
Why any investor from any country would open a single account — let alone 100 accounts — with a firm that advertises on TalkGold was left to the imagination. TalkGold and similar sites such as MoneyMakerGroup are referenced in multiple filings in U.S. federal courts as places from which international Ponzi and fraud schemes are pushed.
A separate ad for which InstaForex apparently paid TalkGold $95 remains operational on the forum. The ad shows an image of a red Lotus and claims the company is “THE BEST BROKER IN ASIA.” Directly below the ad is an ad for a company that claims to provide a return of 525 percent “After 1 Minute” and 9,860 percent “After 6 Hours.”
Just four of the thousands of schemes pushed on TalkGold — Imperia Invest IBC, EMG/Finanzas Forex, Legisi and Pathway to Prosperity — created tens of thousands of victims globally while gathering hundreds of millions of dollars, according to court records.
The precise time at which TalkGold deleted the paid “sticky” thread on InstaForex and the precise reason why the thread of at least 109 pages was deleted were unclear. Records suggest the thread was deleted in the past 24 hours. The once-massive thread now returns a “No Thread specified” error.
Among other things, InstaForex advertised that it accepted payments through Perfect Money, a murky money-services business purportedly operating from Panama. Imperia Invest, which the SEC accused in October of stealing millions of dollars from thousands of participants, also used Perfect Money, according to court filings.
Included among the Imperia Invest victims were thousands of Americans with hearing impairments, according to the SEC.
Meanwhile, the name of Roger Alberto Santamaria del Cid — the purported contact person of Perfect Money — appears in federal court filings in the EMG/Finanzas Forex forfeiture case.
A Florida-based task force that specializes in detecting and uncovering massive fraud schemes brought the EMG/Finanzas Forex case last year. Del Cid, Perfect Money’s purported contact person in Panama, is listed as EMG’s “Secretary” in court filings that allege that tens of millions of dollars seized in the probe were tied to the international narcotics trade.
EMG/Finanzas Forex was so corrupt that some participants were told the only way they could get their money out was to recruit new investors, have the new investors pay them directly — and use the proceeds from the new investors to recover their initial outlays, according to court filings.
The very first EMG post on the now-shuttered ASA Monitor Ponzi and criminals’ forum referenced yet-another widely promoted Ponzi scheme: 12DailyPro. The 12DailyPro case, brought by the SEC in February 2006, also is cited in the AdSurfDaily Ponzi prosecution brought by the U.S. Secret Service in August 2008. ASD also was promoted on TalkGold.
Writing on ASA Monitor, an EMG/Finanzas Forex aficionado claimed to have learned the ropes from 12DailyPro.
“I have been in internet business for 3 years now and in autosurf industry from 12dailypro,” the ASA poster began. He (or she) then proceeded to tell readers about how they could earn commissions by recruiting for EMG/Finanzas, which the Feds later described as an international menace with tentacles in Central America, South America and Europe.
Court filings in the EMG/Finanzas case paint a picture of an incredibly elaborate maze of companies and bank accounts set up to confuse both investors and law enforcement. At least 59 bank accounts, 294 bars of gold and nine luxury vehicles were seized.
The EMG allegations were explosive because they showcased the undeniable fact that people who promote programs such as HYIPs and autosurfs because such programs may pay “commissions” to recruit new members may be operating as fronts or conduits for international drug dealers and money-launderers.
InstaForex, a company accused by the CFTC last month of targeting U.S. customers to purchase unregistered offerings and paying through Perfect Money, says participants can win this Lotus — but they have to pay to play by depositing at least $1,000 USD. Sweepstakes that require a purchase by participants are illegal in the United States.
SPECIAL REPORT:UPDATED 2:27 P.M. ET (U.S.A., FEB. 9) Federal court and web records show that at least three of the 14 purported Forex dealers named defendants in a major sweep of unregistered firms last month by the Commodity Futures Trading Commission advertised that they accepted funds from Perfect Money.
Perfect Money is a murky money-services business purportedly based in Panama that allegedly was used by a company that defrauded thousands of deaf investors by promising Visa debit cards and returns of 1.2 percent per day, according to federal records. The name of a man purported to be Perfect Money’s contact person in Panama City is referenced in federal court filings that tie money from the alleged EMG/Finanzas Forex fraud scheme to an international narcotics probe that led to the seizure of at least 59 bank accounts in the United States and the companion seizure of 294 bars of gold and at least seven luxury vehicles.
The number of purported Forex dealers that allegedly accepted Perfect Money and were named defendants in the CFTC sweep could be higher than three because not all of the defendants publicly disclosed the precise mechanisms by which they accepted payments from U.S. customers.
According to court filings and web records, some of the companies also advertised that they accepted funds from Liberty Reserve, another murky offshore processor, and even PayPal. PayPal’s Acceptable Use Policy specifically bans the use of its services for “currency exchanges,” businesses that support Ponzi and pyramid schemes and businesses associated with “off-shore banking.”
PayPal says it requires “pre-approval” for any businesses “selling stocks, bonds, securities, options, futures (forex) or an investment interest.” Whether any of the businesses named in the CFTC Forex complaints received approval from PayPal to either use its name in promos or use its services to collect money is unclear.
Records show (see paragraph 17 of SEC complaint) that Perfect Money payments were accepted by Imperia Invest IBC, the mysterious offshore company accused by the SEC in October 2010 of pulling off a spectacular fraud that fleeced at least 14,000 people of millions of dollars. Included among the Imperia victims were thousands of Americans with hearing impairments, the SEC said.
Imperia was promoted on Ponzi scheme and criminals’ forums such as TalkGold, which also promoted at least two of the companies named defendants in the CFTC’s Forex sweep. One of the companies — InstaTrade Corp., doing business as InstaForex — is advertising on TalkGold that participants will have a chance in the months ahead to win a Lotus Elise, a sports coupe that carries a price tag of more than $50,000.
To win the expensive car, however, investors have to pay to play, according to InstaForex. Sweepstakes that require a purchase are illegal in the United States, according to the Federal Trade Commission.
InstaForex investors can qualify to win the Lotus by replenishing “the real trading account in InstaForex Company with 1000 USD or more during [the] Campaign period,” the company says in stilted English.
“Participant has a right to register in the Campaign more than 1 account and raise his/her chances for the victory,” InstaForex continues in stilted English. “However, in case contest administration detects more than 100 accounts registered by one person, it reserves the right to decrease the number of accounts till (sic) 100.”
Meanwhile, the name of Roger Alberto Santamaria del Cid — the purported contact person of Perfect Money — appears in federal court filings in the EMG/Finanzas Forex forfeiture case. The EMG/Finanzas case was brought last year by a federal task force based in Florida and alleges that tens of millions of dollars seized in Arizona as part of the probe were linked to the international narcotics trade. (See Paragraph 10 of the federal affidavit for the reference to del Cid, who is identified as the “Secretary” of EMG. Del Cid is referenced in domain-registration data for PerfectMoney.com as the contact person for Perfect Money Finance Corp.)
Elements of the prosecution against more than $100 million in assets linked to EMG/Finanzas were brought by members of the same task force that brought civil and criminal prosecutions against Florida-based AdSurfDaily. Some of the members of the task force have experience working with the U.S. Drug Enforcement Administration (DEA), the U.S. Secret Service, the IRS and other agencies to reverse-engineer fantastically complex financial crimes.
At least one of the investigators, according to records, was instrumental in bringing the successful money-laundering conspiracy prosecution against the e-Gold payment processor in 2007. The e-Gold case was brought in U.S. District Court for the District of Columbia. It resulted in guilty pleas announced on July 21, 2008.
About two weeks later, the U.S. Secret Service raided ASD’s headquarters in Quincy, Fla. Federal prosecutors later alleged ASD was operating a Ponzi scheme that had gathered at least $110 million — and had ceased using e-Gold “shortly after” the e-Gold indictments were announced in April 2007.
Federal prosecutors also alleged that 12DailyPro and PhoenixSurf — two autosurfs charged by the SEC with operating Ponzi schemes — also had used e-Gold. In December 2010, prosecutors said that ASD also had the ability to accept money from e-Bullion, yet-another processor accused of accepting and distributing Ponzi funds from various schemes.
James Fayed, the operator of e-Bullion, was accused of arranging the July 2008 murder of Pamela Fayed, his estranged wife and potential witness against him. Pamela Fayed’s body was found in a California parking garage just days before the ASD raid in Florida.
Erma Seabaugh, known among ASD members as the “Web Room Lady,” used E-Bullion in November 2007 to transfer $10,510 to ASD, according to a forfeiture complaint filed in December 2010.
On Jan. 26, the CFTC sued 14 purported Forex companies simultaneously, alleging that they were unregistered entities that were illegally targeting U.S. residents. At least three of the companies — ForInvest (Perfect Money reference appears online), InstaTrade Corp. (see Paragraph 21 of CFTC complaint for the Perfect Money reference) and Kingdom Forex Trading and Futures Ltd. (see Paragraph 17 of CFTC complaint for the Perfect Money reference) — accepted Perfect Money, according to records.
Two of the complaints — InstaTrade and Kingdom Forex — were brought in the U.S. District Court for the District of Columbia, the same venue in which the e-Gold case was brought in 2007. The case against ForInvest was brought in U.S. District Court from the Northern District of Illinois.
Perfect Money advertised a relationship with at least two of the defendants named in the CFTC cases: InstaForex and FXOpen, according to web records.
On its website, Perfect Money advertised its relationship with InstaForex and FXOpen, two companies accused by the CFTC of targeting Americans with unregistered Forex offerings. The FXOpen website now appears to be blocked from loading in the United States. It was not immediately clear if the site will load in other parts of the world.
Let’s start with the chaos in Egypt this week. Protesters have streamed into the streets to demand that President Hosni Mubarak step down after three decades of autocratic rule. The government initially reacted by shutting down the Internet. As tensions rose, protesters, activists and journalists covering the events were beaten. Some of the protesters were killed.
When a government shuts down the Internet and starts chilling its people and journalists, it’s for a reason: It does not want the world to witness events, and it wants journalists to know they’ll pay a price for trying to report anything other than the government line to the masses. State-run TV beamed images of tranquility, not images of unrest. When the chaos became impossible to sanitize or ignore, the government blamed events on impure thinkers and their media lackeys, planting the seed that “foreign agendas” were at work.
It was the cue the loyalists needed to start threatening journalists with death by beheading. Fearing for their safety, the journalists abandoned the immediate turf — but not the story. They started reporting from “undisclosed locations.” The word was still getting out, just not the pictures in the degree desired.
The immediate events in Egypt, of course, are much more serious than, say, the immediate events at the TalkGold Ponzi scheme and criminals’ forum. Even so, some of the parallels are striking.
The Egyptian government, for example, is trying to control the message. So is the TalkGold forum, which wants the Ponzi shills and criminals who’ve involved the worldwide masses in one catastrophic fraud scheme after another to know they have a safe haven. TalkGold also wants the critics to know the Mods regard them as naysayers and trolls who can be “banned” without notice, rather like the Mubarak regime regards those muckraking reporters and their “foreign agendas.”
It won’t work at TalkGold for the same reason it won’t work in Egypt: People still have eyes and ears and the ability to be discerning. There may be only one Tahrir Square in central Cairo to control, but “undisclosed locations,” voices, cell phones, cameras and reporters’ pads and tape recorders are in plentiful supply. They can’t be controlled.
Egypt’s bid to control the message has resulted in a catastrophic PR problem on top of a political crisis. Meanwhile, TalkGold’s ineptitude, ham-handedness and arrogance has set the stage for its own PR disaster. You can read about it on RealScam.com, which sides with the afflicted masses, not the people who’d afflict the masses.
While state-run TV in Egypt is airbrushing the dangers of autocratic rule and beaming images of tranquility as the country’s inhabitants try to figure out how they’ll get by for yet-another year on the wages of poverty, TalkGold is airbrushing the economic and security dangers of viral criminality and seeking to tranquilize (and recruit) the masses by using flowery language and even flattery to tell them that opening an account with an offshore payment processor and sending money to any one of hundreds of schemes is their ticket out of the ranks of hopelessness.
Poster “Ken Russo,” for example, would have the people of Egypt — and the poverty-stricken people of the United States and other countries — know that the latest “program” he is promoting is one of the “best” he has ever seen.
One of “Ken Russo’s” current favorites is Club Asteria, which claims to “care” and contends that its “100,000 PLUS MEMBERS CAN’T BE WRONG.” Meanwhile, Club Asteria further claims to “Empower our Members” and to “help expatriates and immigrants to become more successful in their personal and professional lives and enable them to send money home to their loved ones.”
Tugging at heartstrings, Club Asteria further claims that “[t]hrough our philanthropic efforts we make an immediate difference for struggling individuals, families and communities by focusing on improving nutrition, housing, health care and education.”
That performing legitimate due diligence on Club Asteria is virtually impossible doesn’t seem to compute with “Ken Russo” and other affiliates. The mere fact the “program” is being promoted on TalkGold is reason enough to avoid it. Any business the company generates from TalkGold likely is radioactive. Club Asteria, for example, could find itself in possession of money that has flowed from fraud scheme to fraud scheme. Even if Club Asteria were legitimate, the fact it is being promoted on TalkGold puts it at one of the principal intersections of crime and fraud.
About the only good thing about the Internet being down in Egypt this week while its people took to the streets was that “Ken Russo” and his fellow promoters couldn’t sell Club Asteria and other highly questionable “programs” to the disaffected Egyptian masses. (On a side note, one of the companies named in a Forex lawsuit by the U.S. Commodity Futures Trading Commission(CFTC) just days ago announced on TalkGold that the shutdown of the Internet in Egypt had disrupted its ability to interact with Egyptian clients and other clients in the region. A poster purporting to represent FXOpen — under an underlined heading of “Arabic Live Chat Disruption” — noted that “[o]ur hopes and prayers go out to the Egyptian people.”)
And even as the Egyptian government is inciting violence against journalists — to the degree that the U.S. Department of State issued a special statement on the matter — the TalkGold forum is banning posters who speak ill of Ponzi and fraud schemes that are gathering untold sums of money, channeling cash to some of the darkest corners of the Internet and keeping people in financial bondage.
Here is an idea for the Department of State and Secretary Hillary Clinton: Warn Americans — and other peoples of the world — about sites such as TalkGold. Mention them at a Congressional hearing. Instruct U.S. diplomats the world over to inform their host governments about the security and economic dangers posed by TalkGold and a sea of similar sites. Tell elected officials that the State Department is serious about monitoring sites that are keeping people in human bondage by spreading financial misery globally. Define Talk Gold as a global pariah, an enterprise without a state that would be proud to claim it. Inform the world regularly that the only form of diplomacy on TalkGold is robbery without a gun.
TalkGold has been named repeatedly in court filings that identify it as a place from which fraud schemes are openly pushed. The ink on recent CFTC lawsuits that identify two of TalkGold’s paid Forex advertisers as the purveyors of unregistered offerings targeted at U.S. citizens is barely dry, and yet the unabashed cheerleading continues.
The alleged AdSurfDaily Ponzi scheme, which also was pushed from TalkGold, gathered at least $110 million. It caught the attention of the U.S. Secret Service and resulted in civil and criminal probes that could put people in prison for decades, and yet the unabashed cheerleading continues.
All the autosurfs prominently touted on TalkGold are just recycled forms of ASD, which itself allegedly was a recycled form of 12DailyPro, which the SEC smashed five years ago this month.
It’s the same thing with Pathway To Prosperity, yet-another alleged scheme promoted on TalkGold that gathered tens of millions of dollars and could put people in jail for decades. All of the HYIPs promoted on TalkGold are just recycled forms of Pathway to Prosperity, which was busted by the U.S. Postal Inspection Service, and Legisi, which was busted by the SEC after the U.S. Secret Service infiltrated its operations by using an undercover operative. The state of Michigan also used an undercover operative in the Legisi probe.
The best way to deal with TalkGold and similar sites is to tell the world that they promote global criminality and rank illicit profits above human rights and common human decency.
Like Egypt in its current state, TalkGold is not about freedom — financial or political. It is about the institutionalization of corruption. If TalkGold were an oncological hospital, its doctors would be cheerleading for the cancer to spread and its nurses would be rooting for the highest death rate because intervening to cure the disease and comfort the afflicted would be bad for institutional and personal profits.
A purported Forex program known as FxPowerPro currently has a 20-page thread on TalkGold. Among other things, FxPowerPro is claiming that “YOUR STABILITY IS OUR PURPOSE.” Its website appears to come from an editable script kit used by hundreds of sites globally, and it says it will accept any sum between $5 and $20,000. FxPowerPro proudly displays a link the the TalkGold forum.
A few days ago an eagle-eyed PP Blog reader passed along some information about yet-another incongruous program known as “Disaster Club.” Disaster Club appears to be a new wrinkle on cash-gifting schemes. It purports to arrange member-to-member “grants,” asking visitors if they’d like to turn a “One-Time $100 into $17,700.”
Bizarrely, Disaster Club uses a presentation by which it names four hypothetical members: “Job,” and “Cain, Abel and Eve.”
“After joining the Club you will receive the name of your assigned member, and each week on Monday you are to send a grant in the amount shown in the grant schedule directly to that assigned member,” Disaster Club says.
“Should you join the Club between Tuesday and Sunday, send your grant as soon as you receive your assigned name, do not wait until Monday,” Disaster Club coaxes. “Every grant thereafter will be sent according to the Monday schedule. To create a cash explosion from your home three members will each be given your name to send their $100 grants to ($100 X 3 = $300) and each stage you will keep the stated amount shown from the amount you received from the 3 members $100 + $100 + $100 = $300 you keep $50. Then according to the grant schedule shown, you are to send your grant directly to the same member (Job), and the same three members (Cain, Abel and Eve) will each send their grants directly to you.”
Disaster Club purports to be headquartered in Florida and claims to be a “club that allows like minded members to pool their resources together to help the hurting and homeless victims of any Disaster in any State, or even help others anywhere in the world.”
The “opportunity” does not appear to have its own thread at TalkGold yet, but there are plenty of disasters already waiting there for its readers. Just don’t expect to get a warm reception if you have a “foreign agenda” — you know, like those muckraking enemies of the Mubarak regime in Egypt.
Although it’s not likely you’ll be threatened with beheading at TalkGold, you might get deleted if you tangle with “Ken Russo” and others and challenge readers to use their heads for something other than a hat rack.
There is nothing decent about Talk Gold and its cancer-spreading cousins worldwide. Only the broadest public-awareness campaign can succeed against the threats they pose to the governments of the world and billions of Internet users globally — and the U.S. State Department could make a difference by describing the criminal forums as places from which human rights are set up to be trampled 24/7/365.
Any true diplomat from any country worldwide who spent so much as 15 minutes on TalkGold could see the danger to countries, governments and citizens worldwide. The world’s diplomatic corps are uniquely positioned to do something the world’s law-enforcement corps cannot do: be at all places at all times.
A sustained effort by the world’s diplomats to identify and monitor the fraud sites — and openly share the information with the people of the world — could go a long way toward containing a plague that only will mushroom into a catastrophe if left alone.
A Hawaii man and his company were hit with sanctions totaling $6.2 million in a case that alleged they targeted people with hearing impairments in a Forex Ponzi scheme.
Both the SEC and the CFTC filed actions against Marvin Cooper and his Honolulu-based firm, Billion Coupons Inc. (BCI). The CFTC announced the judgment against Cooper and the company.
Investigators said Cooper and BCI “solicited funds from deaf American and Japanese individuals for the sole purported purpose of trading forex,” luring them with payout promises of up to 25 percent per month.
For his part, Cooper took “more than $1.4 million of customer funds for personal use, including for flying lessons and to purchase a $1 million home,” investigators said.
He was ordered to pay $3.9 million in restitution to customers and more than $2.3 million in penalties. The company is liable for the same amounts.
The “Billion Coupons” case drew comparisons to the now-defunct Noobing autosurf, which also targeted the deaf. Noobing became popular in the aftermath of the August 2008 federal seizure of tens of millions of dollars in the AdSurfDaily Ponzi scheme case.
Despite the federal seizure, some ASD members promoted Noobing. Noobing effectively went bust in July 2009, when the FTC charged its parent company — Affiliate Strategies Inc. — with pushing a scheme that promised “guaranteed” government grants of $25,000 from economic stimulus funds.
Noobing later was named a receivership defendant in the case. Receiver Larry Cook sold the company’s assets lock, stock and barrel — right down to a lavatory wastebasket. Like ASD, Noobing’s parent firm also owned a jet ski. Cook sold that, too.
Despite dramatic asset seizures and the federal actions against ASD and Noobing’s parent — and despite previous actions against autosurfs, including 12DailyPro, PhoenixSurf and CEP — some ASD members have continued to promote autosurfs.
This has occurred against the backdrop of a racketeering lawsuit against ASD President Andy Bowdoin and public filings in which prosecutors claimed Bowdoin had signed a “proffer” letter in the case and met with members of law enforcement over a period of four days in December 2008 and January 2009.
It also is known that Interpol is seeking the arrest of Robert Hodgins, whose Dallas-based debit-card company, Virtual Money Inc., is alleged to have agreed to launder drug money in the Dominican Republic and assist a Colombian drug operation launder money at ATMs in Medellin.
ASD members said Hodgins’ company supplied debit cards to AdSurfDaily, and web records suggest that Hodgins or a Virtual Money designate attended an ASD function in the Orlando area in late 2006.
Even though Bowdoin acknowledged in court filings that he had given information against his interests to the government, some ASD members continue to promote autosurfs and HYIPs. After signing the proffer letter and surrendering his claims to more than $65.8 million seized from his personal bank accounts, Bowdoin later reentered the case as his own attorney.
One of Bowdoin’s 10 personal bank accounts contained more than $31 million, according to court filings. Another contained more than $23 million. Three other bank accounts contained the exact same amount — a little over $1 million.
After submitting to the forfeiture in January 2009, Bowdoin fired his attorneys without notice and attempted to reenter the case weeks later as his own attorney. This set in motion a series of bizarre pleadings from Bowdoin, including one in which he claimed he had not been provided “fair notice” of his illegal conduct by the government. ASD members by the dozens then filed their own bizarre, pro se pleadings. U.S. District Judge Rosemary Collyer ruled against each of the filers, saying they had no standing in the case.
Collyer since has ruled against Bowdoin, awarding title to more than $80 million seized in the case to the government, which said it intends to implement a restitution program. Bowdoin is appealing Collyer’s forfeiture decisions.
Court filings show that Bowdoin told Collyer the seized money belonged to him. In September 2009, the U.S. Secret Service presented Collyer a transcript of a conference-call recording in which Bowdoin told members the money belonged to them. Although Bowdoin insisted he had big plans for ASD, records show that he let the firm’s registration lapse in the state of Florida — even as he was telling members they should be excited about the company’s future.
In the recording, Bowdoin claimed his fight against the government was inspired by the compelling personal story of a former Miss America.
Troy Dooly is the latest “expert” to look like an utter fool in the wake of the Zeek Rewards collapse. For months the apparently respected MLM guru has been defending Zeek against all logic, common sense or demonstrated knowledge of mathematics.
CenturionWealthCircle (CWC) appears to be moving from the ridiculous to the absurd, fueled in no small measure by serial, wink-nod scammers on the Ponzi boards. Members of Club Asteria, an “opportunity” that suspended cashouts weeks ago amid reports its PayPal account had been frozen, were among CWC’s early cheerleaders.
