One year ago today, the U.S. Secret Service arrived in the small town of Quincy, Fla., and changed history. By executing a search warrant at the headquarters of AdSurfDaily Inc. — and going about their business in very public fashion — agents sent the message that the so-called autosurf “industry” no longer had a safe haven anywhere on U.S. soil.
In all of 2008, the Secret Service issued exactly six national news releases. One of them dealt with AdSurfDaily. Given the special nature of the work the Secret Service performs and the extreme competence of the men and women who serve their country in this unique fashion — and the fact that ASD merited a news release — well, connect the dots.
The wink-nod days are over for the surfs.
Promoter? “Industry” expert? “Team” organizer? Good luck. You’re going to have to work twice as hard for your ill-gotten gains (with the prospect of getting busted always in play), and your forum spiel and YouTube videos are becoming less and less effective. They make you look like a person who will do anything — up to and including pretending the Secret Service never visited Quincy — to pocket a commission.
Agents exposed the “industry” for exactly what it is: a poison field laced with land mines and trip wires and occupied by schemers and liars and criminals and money-launderers.
UPDATED 3:40 P.M. EDT (U.S.A.) A federal judge said she will not recuse herself from the AdSurfDaily forfeiture case and has denied a motion by Curtis Richmond to disqualify herself. Meanwhile, the judge also denied motions by other pro se litigants in the ASD case.
Richmond filed the motion to disqualify Judge Rosemary Collyer, claiming the judge had displayed “extreme bias.” But Collyer denied the motion this afternoon in a Memorandum Opinion. Richmond is associated with a sham Utah “Indian” tribe and has a history of filing 11th-hour motions to force judges to recuse themselves from cases.
“Mr. Richmond is not a party entitled to seek disqualification,” Collyer said. “Mr. Richmond further contends that he can seek this Court’s recusal under Rule 63 of the Utah Rules of Civil Procedure, erroneously referring to the Utah Rule as a federal rule. The Utah Rules of Civil Procedure do not apply in this Court. Even if Mr. Richmond had attempted to proceed under the applicable federal statute governing disqualification, 28 U.S.C. § 455, he would be barred from proceeding because he is not a party to this case.”
Collyer also denied a motion by Richmond to unseat the judge that accused her of treason, declaring the matter moot.
Other pro se litigants whose motions were denied today include Christian Oesch, Jeffrey Robinson and Joan Hughes.
“Movants here are not the first to attempt to intervene in this case and seek its dismissal,” Collyer said. “The Court addressed previous motions to intervene in a July 16, 2009, Memorandum Opinion, wherein it found that the motions to intervene must be denied because the movants did not have a cognizable interest in the defendant properties, and therefore did not have standing to contest this forfeiture action.”
“The movants here are in the same position,” Collyer said. “Since these movants are ineligible to intervene and seek dismissal, they are not parties to the case and their motions to set aside forfeiture will also be denied.”
Collyer denied seven pro se motions to intervene July 16.
A firm Vana Blue Inc. said is owned by its treasurer was sanctioned by the Illinois Department of Professional Regulation for practicing public accounting without a license.
Michael Reis and M.R. Reis & Co. of Naperville were ordered by the state to “cease and desist the unlicensed practice of public accounting” in 2000, according to IDPR.
Reis was identified in a March 31 document as treasurer of Vana Blue, a Pinksheet stock that trades under the symbol VBLU. The firm’s web domain — vanablue.com — vanished two days ago and now resolves to a GoDaddy.com page that beams advertisements.
“Mr. Reis currently is the proprietor of M.R. Reis & Co. Naperville, IL Bookkeeping and Tax Firm,” Vana Blue said in the March 31 document.
Vana Blue said it was publishing the information “to Conform with the Provisions of
Subparagraph (a)(5) of Rule 15c2-11 Promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934.”
News releases by Vana Blue identify it as the owner of Karveck International and TMS Corp. TMS Corp. also is known as TMS Association, an Arizona-registered entity purported to own eWalletPlus, a money-exchange business associated with the AdViewGlobal (AVG) autosurf.
AVG suspended member cashouts last month, saying it was conducting an audit of itself, making an 80/20 program mandatory should cashouts resume on a date uncertain and exercising its version of a “rebates aren’t guaranteed clause” that permits it to keep money sent in by members.
The surf firm identified its owners as George and Judy Harris. George Harris is the stepson of AdSurfDaily President Andy Bowdoin. Judy Harris is the wife of George Harris. A Florida home and a car owned by George and Judy Harris are named in a December forfeiture complaint filed by federal prosecutors as the proceeds of illegal conduct by ASD.
ASD’s assets — including tens of millions of dollars — were seized nearly one year ago by federal prosecutors amid allegations of wire fraud, money-laundering, selling unregistered securities and operating a Ponzi scheme from Quincy, Fla. Prosecutors seized automobiles and marine equipment in December.
ASD and AVG have close family, management and promotional ties. AVG purports to be headquartered in Uruguay and launched after the seizure of ASD’s assets.
Vana Blue said it was involved in the oil and gas business in Utah, the VOIP business in the Caribbean and in the international advertising business through Karveck International.
This news release, dated Feb. 21, 2008 — a year and a half ago — vaguely announces a name change for Vana Blue (from what to what isn’t clear) and announced the acquisition of TMS Corp.
Meanwhile, this news release, dated Jan. 30. 2009 — just a few days before the formal launch of AVG — announced the acquisition of “Karveck Corporation” had been finalized.
Vana Blue did not use AVG’s name in the news release. Instead, it described Karveck International as a company that “specializes in internet advertising and promotion in a search engine and ad clicking type environment.â€
UPDATED 9:17 A.M. EDT (U.S.A.) The website for Vana Blue Inc., the purported parent company of Karveck International, has gone offline and now is resolving to a parked GoDaddy.com page that beams advertisements.
Vana Blue is a penny stock that trades under the symbol VBLU. No shares have traded hands since July 23, according to Yahoo Finance.
Why the vanablue.com site now resolves to GoDaddy is unclear. A series of news releases from Vana Blue in the past year and a half placed the company in diverse fields from oil and gas in Utah to Caribbean VOIP telephone service and international “internet advertising and promotion in a search engine and ad clicking type environment.”
Among other things, VanaBlue said it had acquired TMS Corp., an Arizona-registered business also known as TMS Association. TMS Association was the purported parent company of eWalletPlus, a payment processor associated with the AdViewGlobal (AVG) autosurf.
The website for eWalletPlus also now resolves to a page filled with ads. EWalletPlus appears to be for sale on sedo.com. Meanwhile, the website for AdSurfDaily Breaking News also is resolving to a page filled with ads.
ASD and AVG have close family, membership and promotional ties. ASD’s assets were seized in a federal forfeiture complaint last year, and a racketeering lawsuit against ASD President Andy Bowdoin later was filed by members of ASD.
Bowdoin has not responded to the racketeering lawsuit. AVG’s name was mentioned in RICO lawsuit filings that pointed out common ties between the surf firms, but AVG has not been named a defendant.
Last year, ASD announced that it expected a revenue infusion of $200 million from Praebius Communications, another Pinksheet stock. ASD made the announcement while it was awaiting a court ruling on issues pertaining to revenue streams in a Ponzi scheme case.
ASD’s Breaking News site pulled the Praebius announcement after doubting members said they intended to contact Praebius to confirm ASD’s story about the $200 million revenue infusion.
Vana Blue used an address of 4757 E. Greenway Rd Suite 107B-105 in a news release. It is an address that resolves to a PostNet outlet in Phoenix, the home state of TMS Association. PostNet describes itself as a “Mailbox Rental, Fax, Passport Photos, Copies, Notary, UPS, DHL, FedEx, USPS†service.
At a minimum, the information suggests AVG had strong ties in Arizona, particularly in the Phoenix area.
In February, Vana Blue announced that Karveck International posted $1.8 million in revenue in January. That’s when AVG was in prelaunch. Vana Blue did not name AVG in the news release.
AVG was said to have registered in Uruguay as Karveck International, although that information has not been independently confirmed.
Vana Blue’s name has been associated with Donald Rex Gay. Federal records show that Donald Rex Gay was sued by the U.S. government in a tax case that claimed unpaid taxes in the amount of $252,717.12.
Gay said in pro se court filings that he did not owe the taxes and had no means to pay them.
In June, AVG announced it was suspending member cashouts, making an 80/20 program mandatory if and when payouts resume and exercising its version of a “rebates aren’t guaranteed” clause that permits it to keep all money sent in by members.
UPDATED 1:43 P.M. EDT (U.S.A.) Friday was a day unlike any previous day in the so-called autosurf “industry.” A federal judge issued orders on two fronts: a forfeiture case brought by the U.S. government against AdSurfDaily Inc. and a racketeering lawsuit brought by ASD members against ASD President Andy Bowdoin and others.
Capsule Review
For good measure, BizAdSplash (BAS) announced a financial “crisis,” saying it was suspending cashouts until at least Sept. 1 and conducting an audit of itself. BAS says Clarence Busby, the former president of Golden Panda Ad Builder and a central figure in the ASD prosecution, is its “chief consultant.” Incongruously, Busby also claims to run the company — something consultants normally don’t do.
Busby’s video announcement of the BAS crisis appears to have occurred on July 24, the one-year anniversary date of the formal launch of Golden Panda.
Meanwhile, AdGateWorld (AGW), still another surf that began operating at a purported offshore location after the seizure of ASD’s assets, announced it was selling itself to unnamed interests in the Middle East.
All of this came on the heels of announcements that AdViewGlobal (AVG), yet another surf purportedly headquartered offshore, was suspending payouts, conducting an audit of itself and making an 80/20 program mandatory should payouts ever resume.
So, three surfs that launched after the ASD seizure — AVG, BAS and AGW — all announced important developments in the days leading up to the one-year anniversary (Aug. 1) of the date ASD was notified its bank accounts were being seized.
Yes, all of these things happened just shy of the ASD anniversary date.
New Name Surfaces: Who is Karveck International?
Lost in the blizzard of news Friday was a report that AVG had fired its staff in Uruguay, and that owners George and Judy Harris and other Bowdoin/Harris family members are or were in Uruguay and had rented homes and acquired automobiles.
These reports have not been confirmed.
At the same time, a person who uses the handle “Luisa” and may be in position to have some knowledge about AVG, said the company initially registered in Uruguay as Karveck International.
Some things about Karveck International can be confirmed. The company, for instance, is listed as an acquisition of Vanu Blue Inc., which trades as a pinksheet stock (VBLU.PK). Vana Blue issues news releases. One of the news releases referenced the acquisition of TMS Corp., also known as TMS Association, which was the purported owner of eWalletPlus.
This news release, dated Feb. 21, 2008 — a year and a half ago — vaguely announces a name change for Vana Blue (from what to what isn’t clear) and announced the acquisition of TMS Corp.
Meanwhile, this news release, dated Jan. 30. 2009 — just a few days before the formal launch of AVG — announced the acquisition of “Karveck Corporation” had been finalized.
“Karveck will be offering increases in affiliate incentives and payouts coming up in March to maintain momentum,” Vana Blue said.
eWalletPlus once worked side by side with AVG. In March, after AVG announced its bank account had been suspended because too many members had wired transactions in excess of $9,500, eWalletPlus quickly faded from the stage.
At the same time in March, an AVG member posted an ad for AVG on a small-business website Bank of America provides as a free service.
“All of you who were associated with ASD. Do not link this to AVGA!” the poster warned March 27, just a few days after AVG announced the suspension of its bank account. The poster also shared news about TMS.
“We are happy to inform you that TMS Corporation has been dissolved and a new association,TMS Association, has been formed which is a member of AV GLOBAL ASSOCIATION,” the poster wrote.
The eWalletPlus website once resided on the same server that powered AVG, according to web records. The eWalletPlus site now appears to have been listed for sale on sedo.com. The site simply beams ads now.
Vana Blue used an address of 4757 E. Greenway Rd Suite 107B-105 in a news release. It is an address that resolves to a PostNet outlet in Phoenix, the home state of TMS Association. PostNet describes itself as a “Mailbox Rental, Fax, Passport Photos, Copies, Notary, UPS, DHL, FedEx, USPS” service.
At a minimum, the information suggests AVG had strong ties in Arizona, particularly in the Phoenix area.
Vana Blue did not use AVG’s name in the news release. Instead, it described Karveck International as a company that “specializes in internet advertising and promotion in a search engine and ad clicking type environment.”
News releases associated with many penny-stock companies tend to be vague. Many such companies speak in broad generalities. News releases sometimes are employed as a means of generating buzz about the companies, and they often leave more questions unanswered than answered.
Vana Blue’s entry into the AVG story is not the first time a pinksheet stock has been associated with an autosurf. ASD, for example, announced last year that it was expecting $200 million in revenue from the penny-stock company Praebius Communications. ASD withdrew the news release from its Breaking News site after members said they intended to call Praebius to confirm or deny the deal.
And, speaking of the ASD Breaking News site: It is no longer there. It has been replaced by a site that beams ads.
A federal judge has ordered Andy Bowdoin, AdSurfDaily Inc. and Bowdoin/Harris Enterprises Inc. to show cause by Aug. 7 why a series of motions filed by Bowdoin as a pro se litigant should not be denied.
Judge Rosemary Collyer noted in the order that Charles A. Murray, a paid attorney Bowdoin had hired after Bowdoin was advised months ago that a corporation could not proceed pro se, has not followed up on initial pleadings.
“Eventually, [Murray] entered an appearance for all three claimants (Dkt. ## 59 & 60), and then filed a First Motion to Withdraw Notice (Other) For Leave to Withdraw Notice of Rescission (Dkt. # 66). In this First Motion, counsel explained that he ‘require[d] time to evaluate the facts and circumstances of the matter but that all claimants, through counsel, ‘intend to resubmit this Motion to Rescind on or before May 15, 2009.’”
Using stark language, Collyer said she has heard nothing from Bowdoin or his lawyer since May.
“It is now July 24, 2009, and nothing further has been heard from counsel, Mr. Bowdoin, ASD, or Bowdoin/Harris Enterprises, Inc.,” Collyer said.
“THEREFORE, Mr. Bowdoin, ASD, and Bowdoin/Harris Enterprises, Inc. are ORDERED TO SHOW CAUSE no later than August 7, 2009, why the Court should not DENY all pending motions and ORDER this civil forfeiture matter to proceed based on their release of claims and consent to forfeiture,” Collyer concluded.
Federal prosecutors say more than $65 million was seized from ASD last year.
UPDATED 6:04 P.M. EDT (U.S.A.) Could BizAdSplash (BAS), a surf site associated with Golden Panda Ad Builder President Clarence Busby, be following Golden Panda, AdSurfDaily and AdViewGlobal (AVG) into the great autosurf graveyard?
Busby recently ceded $14 million to the U.S. government as part of the ASD investigation.
There are reports today that BAS is behind on payments to members. In the recent past, the BAS surf site has been offline for an extended period of time. The surf also urged members not to contact vendors associated with its use of MasterCard with any questions about the BAS program.
On May 13, BAS, which purports to be registered in Panama, registered Articles of Organization as a Limited Liability Company (LLC) in Georgia. The surf used an address at UPS Store No. 2644 in Kennesaw, Ga., as its mailing address.
Why the company purports to be headquartered in both Panama and Georgia is unclear. Some BAS promoters advised customers to send checks and money orders to the Georgia address and to note their BAS usernames and member names on the checks and money orders.
Joyce Haws, listed in court documents as one of the founding members of Golden Panda Ad Builder, recently was involved in pro se litigation in the ASD/Golden Panda forfeiture case.
A federal judge ruled last week that the pro se litigants who tried to intervene in the forfeiture case had no standing.
Although BAS said it recently did away with bank wires, it says it accepts personal checks, business checks and money orders, along with accepting money from offshore processors AlertPay, StrictPay and SolidTrustPay.
On its website, BAS does not identify its management team. But its Georgia filings identify Clarence Busby as registered agent.
Visitors to the BAS website read that it is “an international corporation which functions by utilizing a team of business professionals who are using their expertise and experience to build a successful company. Many of our professionals have additional involvements so to avoid conflicts of interest we do have some non disclosures in place to protect their privacy.”
In the recent past, the surf has used matching bonus programs to entice new business.
AVG, which debuted online after the BAS launch, recently announced the suspension of member cashouts and mandatory participation in an 80/20 program should cashouts resume. Like BAS, AVG also used matching-bonus programs. AVG said it lost at least one wire account because members had wired too many transactions in excess of $9,500.
UPDATED 10:23 A.M. EDT (U.S.A.) A federal judge should grant Bank of America’s motion to stay a case in which the bank is alleged to have aided and abetted a racketeering scheme because the plaintiffs already have a remedy and their argument is fatally deficient, the bank argued yesterday.
Moreover, the bank argued, the government is in possession of certain information about AdSurfDaily Inc. — information outside the scope of the bank’s relationship with ASD — and that a stay is appropriate because prosecutors in a forfeiture case separate from the RICO lawsuit are compiling information.
“[I]n addition to seizing all of ASD’s assets, the Government seized evidence as well, and thus a brief stay is necessary until resolution of the Forfeiture Proceeding to avoid compromising the proceedings here,” the bank said.
“[T]he DOJ is currently in the process of determining who among the former ASD members have losses,” the bank said.
And, Bank of America suggested, there may be reason to believe that a restitution pool envisioned by the government could increase as its probe into ASD continues.
Federal prosecutors have seized about $80 million to date, according to records.
“It is also entirely plausible that some former ASD members made money from the alleged scheme and the DOJ’s individualized claims process under the civil forfeiture laws is the best venue to investigate and address such issues,” the bank argued, using bold type to highlight the words “made money.”
“Accordingly, a brief stay is necessary to permit the process to run its course,” the bank argued.
The bank said the government already has announced a process by which it intends to provide restitution to alleged victims of ASD.
“Plaintiffs do not (and cannot) dispute that the DOJ’s asset distribution process in connection with the Forfeiture Proceeding aims to accomplish the same result as the purported claims in this litigation — i.e., to reimburse Mike Collins, Frank Greene, Natures Discount, Inc. and others for money allegedly lost as a result of their involvement with ASD,” the bank said.
“If the named Plaintiffs in this case have no damages, then they cannot pursue their claims here, let alone act as lead plaintiffs for a class of other similarly situated plaintiffs,” the bank said.
Bank of America was not named a RICO defendant in the case. Rather, the plaintiffs alleged the bank aided and abetted ASD President Andy Bowdoin, ASD attorney Robert Garner and others in a fraudulent scheme.
Bowdoin has not responded to the RICO complaint, which was filed in January and amended in April.
Both the RICO case, which was brought by private litigants, and the forfeiture case, which was brought by the government, are being argued in U.S. District Court for the District of Columbia.
Judge Rosemary Collyer is presiding over both cases.
UPDATED 12:47 P.M. EDT (U.S.A.) His promoters said he was a hugely successful businessman, a visionary who entered technology markets and made money before others even had recognized the opportunities. Andy Bowdoin, they said, had cleaned up in the communications business and, for good measure, old-fashioned markets such as dry cleaning. He’d trained thousands of successful salespeople over the years, they said, and now was setting his sights on the online advertising business.
Google, they said, had entered into an agreement with his company, AdSurfDaily, and even the President of the United States had singled out Bowdoin as a man of genuine distinction.
Federal prosecutors and a task force consisting of agents from the U.S. Secret Service and the Internal Revenue Service, however, said in court filings that the adjectives associated with Andy Bowdoin in promotional materials for ASD often contradicted the nouns.
Bowdoin, they said, had left behind a string of failed businesses. And despite reports about his remarkable record of commercial achievement, Bowdoin was a felon who’d fleeced people in a previous securities scheme — and hadn’t told his members about it. And Bowdoin had not reported any significant income for two decades.
“Bowdoin earned no significant income from legal employment in the twenty years prior to his commencement of ASD’s operation,” prosecutors said. “But, no information about Bowdoin’s record of business failures and fraud accusations is contained on ASD’s website.
“Nor was Bowdoin’s true past mentioned to prospective members during the ASD rally at which he spoke . . . or during the conference calls that he, or others promoting ASD on his behalf, participated in during ASD’s operations,” prosecutors said.
Bowdoin In The 1980s
It is possible that investigators knew a lot about Andy Bowdoin before they began early last July to subject ASD to scrutiny.
Andy Bowdoin had a lien placed against him in Perry, Fla., in 1982, for failure to pay $2,559.65 in taxes due the IRS, records show. The lien reflected a time period in which Bowdoin was associated with a failed energy-saving business.
In 1984, a local credit union sued Bowdoin for $2,759.78 — an amount about $200 above the amount owed on Bowdoin’s unpaid tax bill from 1982 — although it is not clear if Bowdoin borrowed from the credit union to pay his taxes.
What is clear is that the tax lien was not removed until 1994, 12 years after it was filed. In the intervening years, six other Bowdoin ventures were dissolved, including five involuntary dissolutions by the state of Florida because Bowdoin had not filed required paperwork.
In the 1980s, Bowdoin was sued by a Florida television station for an unpaid bill of $3,494.66. He also was sued by a local building-supply company for an unpaid bill of $510.05, and the Florida Department of State involuntarily dissolved Bowdoin’s energy-saving business. (The August forfeiture complaint listed 12 failed Bowdoin business ventures, including six between 1983 and 1987, but not the energy-saving business.)
The name of the corporation not listed in the federal complaint was Energy Saving International Inc. (ESI), which was dissolved immediately prior to Bowdoin’s launch of six other businesses between 1983 and 1987, including the five that Florida dissolved involuntarily for Bowdoin’s administrative oversights.
ESI began operating in Florida in 1978; the involuntarily dissolution occurred in 1981, after about four years of operation. Bowdoin filed annual reports in 1978, 1979 and 1980, but did not file one in 1981, the year before the IRS filed the tax lien.
Bowdoin’s tax trouble dated back to 1978, when he failed to pay $2,349.48 due the IRS. In 1981, he failed to pay $210.77, and in 1982 the IRS placed the lien, records show. The records are public documents and are on file in Taylor County, Fla.
The records also show a mortgage foreclosure, which appears to have been connected to a Trust set up to manage the affairs of Bowdoin’s mother, who was nearing the end of her life. It appears as though the home was spared in the end.
Although he was hailed a visionary by his supporters, Andy Bowdoin seems to have forgotten that he’d told investigators one story and a federal judge another. ASD asked the judge last year for emergency release of funds seized by the government because the firm could not pay its rent or hosting bills.
Bowdoin, however, appears to have asked for the relief while not initially disclosing that ASD had more than $1 million sitting in a bank in Antigua.
“Bowdoin tells this Court that ASD is out of money,” prosecutors said last year. “But he told the Secret Service that an Antigua account (in another name), holds over one million ASD dollars.”
Yes, prosecutors said, the account was “in another name.”
What name could it be, when records show that Bowdoin used at least 15 corporate names between 1978 and 2006? It’s one of the enduring mysteries of the ASD case.
A federal judge should deny Bank of America’s motion to be dismissed as a defendant in a case that alleges it aided and abetted racketeers operating a massive Ponzi scheme from a former floral shop in Quincy, Fla., the plaintiffs argued yesterday.
Bank of America is not named a RICO defendant in the case, which was filed by three members of AdSurfDaily. The plaintiffs seek class-action status and treble damages.
The bank said in court filings that it has done nothing wrong, and argued that the plaintiffs had made vague assertions and not stated a proper claim.
Attorneys for the plaintiffs disagreed, filing a lengthy response to the bank’s dismissal motion — a response that cites suspicious wire transactions ASD routed through SolidTrustPay, a payment processor based in Canada.
Meanwhile, the plaintiffs said the bank ignored ASD President Andy Bowdoin’s felony criminal record, his ties to a previous securities scheme and his history of operating multiple failed businesses. The plaintiffs made a veiled reference to ASD’s efforts to promote an 80/20 program — something that is occurring now in the AdViewGlobal (AVG) autosurf, which has close ASD ties.
At the same time, the plaintiffs referenced a December forfeiture complaint in which federal prosecutors alleged that ASD money was used to retire the home mortgage of George and Judy Harris. George Harris is the stepson of Andy Bowdoin and the son of Edna Faye Bowdoin, Andy Bowdoin’s wife. Judy Harris is the wife of George Harris.
AVG, which previously had disclaimed any affiliation with ASD, now says it is owned by George and Judy Harris. Andy Bowdoin identified George Harris last summer as the head of ASD’s “real estate division.”
Attorneys for the plaintiffs also referenced Andy Bowdoin’s own acknowledgments that ASD was operating illegally.
“ASD was the brainchild of Thomas Bowdoin, a convicted felon with a history of securities fraud violations and failed business ventures,” the plaintiffs said. “Bowdoin admits that ASD operated [as] a Ponzi scheme.
“ASD sold no products or services, held no intellectual property rights, and had no successful business professionals in management or on its Board,” the plaintiffs continued. “ASD had no colorable legitimate means to generate the massive profits (365% per year) Bowdoin and his co-conspirators promised investors nor the tens of millions of dollars a month flooding its tiny office — a former floral shop — in the small town of Quincy, Florida.”
The bank missed key markers of a scam, the plaintiffs alleged.
“Indeed, when Bowdoin began his relationship with Bank of America, the illegal ‘AutoSurf’ schemes which ASD emulated were well known among banks, regulators and law enforcement authorities,” the plaintiffs said.
“It is no wonder that the two local banks in Quincy refused to even open an account for Bowdoin and ASD. Bank of America, on the other hand, welcomed Bowdoin with open arms, allowing him to open not one but ultimately 10 separate d/b/a accounts. In one month alone, $90 million dollars in cash, cashiers checks and Visa credit card charges were deposited in these accounts. Bank of America made it possible for victims throughout the country to deposit funds with the Ponzi scheme by simply completing a deposit slip and adding the ASD account number. Many of the deposit slips were even pre-printed with ASD’s account information.
“Bank of America also enabled unsuspecting victims to wire transfer contributions to ASD from anywhere in the world,” the plaintiffs said. “Bank of America willingly allowed ASD to falsely legitimize its operations using the Bank’s good name. Bank of America never once questioned or asked ASD to remove its name from its website or written materials that prominently featured Bank of America.”
Reference To Harris Mortgage
On Page 15 of their answer to the bank’s dismissal motion, the plaintiffs referenced the government’s assertion that ASD money was used to pay off the home mortgage of George and Judy Harris and in other unusual ways.
“By virtue of its active involvement in ASD’s business affairs, Bank of America was aware that funds flowed from the RICO Defendants’ accounts in a manner inconsistent with a legitimate business,” the plaintiffs asserted. “Bowdoin, in particular, used ASD business accounts at Bank of America with impunity to purchase personal luxury items, to pay off mortgages for family members, to buy property, and to otherwise dissipate business funds.”
The plaintiffs then referenced what they described as red-flag-waving transactions ASD routed to Solid Trust Pay, a payment processor based in Canada.
“ASD’s transfers of funds from Bank of America accounts also provided Bank of America with information about the suspicious nature of ASD’s operations,” the plaintiffs said.
“In a two-week period, the RICO Defendants wired several million dollars from their Bank of America accounts to an internet-operated, Canada-based money transmitting and payment company. Such a transaction is not consistent with a legitimate business enterprise.
“The RICO Defendants additionally used funds from the Bank of America accounts of one scheme, ASD, to seed the Bank of America accounts of another scheme operated by the RICO Defendants, Golden Panda. These transactions, too, were consistent with a fraudulent scheme, and inconsistent with legitimate business activity.”
On Page 25 of their answer to Bank of America, the plaintiffs referenced ASD’s efforts to get members to participate in an 80/20 program. Such programs are designed to stem the outflow of cash from an autosurf.
“The RICO Defendants counseled members on reinvesting rebates and commissions under the auspices of trying to help members maximize their financial gains,” the plaintiffs said.
AVG, which announced that it was suspending payouts to members, advised members that participation in an 80/20 program would be mandatory should the surf resume payouts on a date uncertain.
AVG’s name was mentioned in a previous filing by the plaintiffs, although the surf firm has not been named a RICO defendant.
Andy Bowdoin, a RICO defendant along with ASD attorney Robert Garner, has not responded to the complaint, which was filed in January and amended in April. Garner answered the complaint, saying U.S. District Court for the District of Columbia did not have jurisdiction over him.
AdSurfDaily attorney Robert Garner “was one of the architects of the ASD Ponzi scheme,” plaintiffs suing Garner for racketeering said yesterday.
Garner was “a director of ASD and outside counsel for ASD,” the plaintiffs said. “He appeared on various Internet videos where he attested to the bona fides of the ASD, among other numerous false statements, in an effort to fabricate a veil of legitimacy for ASD.”
In addition, the plaintiffs alleged, Garner “not only was involved in the development of the ASD program, serving as a director of AdSurfDaily, Inc., but he also held himself out in a position of trust, confidence and superior knowledge by issuing a statement regarding ASD’s legality.”
Garner is representing himself in court. The plaintiffs’ claims came in response to a motion by Garner to be dismissed as a RICO defendant because U.S. District Court for the District of Columbia had no jurisdiction over him.
“Not so,” the plaintiffs said. “[O]ne of the named Plaintiffs ensnared in the ASD scheme, Frank Greene, is a resident of the District of Columbia.”
And, they added, “[O]ne of the special agents who investigated the related forfeiture proceedings opened an ‘upgraded member’ account with ASD from a location in the District of Columbia via the Internet, and made a direct deposit into ASD’s account with defendant Bank of America by delivering a check to the Bank of America branch at 700 13th Street, NW, Washington, DC.”
Garner, the plaintiffs said, was “identified in ASD materials as outside counsel, and he is a
director of AdsurfDaily, Inc., and a manager of T. Andy Bowdoin, LLC.”
Claim: ASD Rose From The Ashes Of 12DailyPro, PhoenixSurf
“Mr. Garner was present at the creation of the ASD Ponzi scheme,” the plaintiffs alleged. “The concept for ASD was borne out of the collapse in early- to mid-2006 of two other confirmed Ponzi schemes – 12Daily Pro and Phoenix Surf – which were targets of investigations and subsequent litigation by the Securities [and] Exchange Commission.
Garner and Bowdoin were aided in their racketeering scheme by “other co-conspirators,” the plaintiffs said. They are seeking treble damages in the case.
The RICO defendants and co-conspirators “sought to improve upon the core Ponzi business model with the goal of developing the largest Internet auto-surf program in operation,” the plaintiffs said.
Wordplay was part of the conspiracy, the plaintiffs said.
“In customizing their Ponzi scheme, the RICO Defendants coined new (or slightly revised) terms for old concepts and made a few adjustments to the model and its operation not in an effort to create a legal business, but rather to ‘fix’ areas that contributed to the collapse of the prior schemes and to shield the Ponzi scheme from increased scrutiny by regulators or law enforcement personnel.”
The plaintiffs also said Bowdoin, Garner and co-conspirators banned the use of certain words in a bid to stay under the radar.
They “implemented some adjustments to the program such as forbidding the use of the term ‘investment’ in connection with the sale of ad packages to ASD members and instituting an open-ended time period for earning the ‘promised’ maximum rebate on purchased ad packages.”
Using video was a key part of the plan, the plaintiffs alleged.
“One of the key innovations that Bowdoin and Garner contributed in an effort to improve
the core Ponzi business model was to create a cloak of legitimacy about it, through video
presentations posted on the Internet promoting ASD,” the plaintiffs said.
Among false claims that appeared online about ASD, the plaintiffs said, were claims that “ASD would sign up over one hundred Fortune 500 companies; that ASD has a contract for the placement of three advertisements on its homepage that would generate at least $13 million per year; that ASD’s rebate program is a ‘loss leader’ that enables ASD to grow its member participation and pay members’ rebates with revenue from large commercial advertisers,” the plaintiffs said.
