UPDATED 10:37 A.M. EDT (U.S.A.) AdSurfDaily attorney Robert Garner has been served with a lawsuit alleging he engaged in racketeering with ASD President Andy Bowdoin and Golden Panda Ad Builder President Clarence Busby.
The RICO lawsuit had been pending since Jan. 15. In court filings, Garner acknowledged he was served with the complaint April 2. He has asked for time to respond.
Garner’s motion for enlargment of time to file was filed pro se, meaning it was filed by Garner himself and not an attorney representing Garner. The motion lists a P.O. Box in Greensboro, N.C., as Garner’s address.
Garner’s motion does not say where he was served the complaint. In a proposed order, he asked a federal magistrate judge to grant the motion to enlarge time, as opposed to asking Judge Rosemary Collyer, the district judge hearing the case. Garner wants until May 22 to respond.
Plaintiffs include Mike Collins, Frank Greene and Natures Discount Inc. — all members of ASD.
The RICO complaint alleged that Garner, Bowdoin and Busby were involved in “other†schemes beyond ASD, Golden Panda and LaFuenteDinero, and have “committed or aided and abetted in the commission of countless acts of racketeering activity,†including indictable offenses.
No attorney for either Bowdoin or Busby has entered an appearance notice in the racketeering case. It is unclear if they have been served. The lawsuit was filed Jan. 15. It has been the subject of delays, owing to the plaintiffs’ inability to perfect service on the defendants.
A federal judge has indefinitely extended the deadline for class-action certification in a racketeering lawsuit against AdSurfDaily President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby.
The plaintiffs in the case — all former ASD members — asked for the time extension last week because they have not been able to serve Bowdoin, Garner or Busby. The original deadline was April 15.
Judge Rosemary Collyer now will set the deadline during a scheduling conference once the defendants are served — or by issuing a future order. The case has been pending since Jan. 15.
Why the plaintiffs have not been able to perfect service of the complaint is unclear.
Plaintiffs include Mike Collins, Frank Greene and Natures Discount Inc.
The RICO complaint alleged the defendants were involved in “other†schemes beyond ASD, Golden Panda and LaFuenteDinero, and have “committed or aided and abetted in the commission of countless acts of racketeering activity,†including indictable offenses.
“The ASD Enterprise provides the RICO Defendants and other unnamed co-conspirators with a system by which to operate fraudulent schemes such as ASD, to hide the fraudulent nature of the schemes, and to profit from such schemes,†the plaintiffs alleged. “Each RICO Defendant agreed to perform services of a kind which facilitated the operation of the ASD Enterprise and facilitated the RICO Defendants and others in the operation of various fraudulent schemes, including ASD.â€
Collins, Greene and Natures Discount said they will seek discovery and try to get important questions answered about ASD, including questions about the interactions of ASD management and others.
Here is a preliminary list of what the plaintiffs intend to seek through discovery:
Representations made regarding the individuals associated with ASD.
Nature of ASD’s business and the opportunity to earn money.
Types of services offered.
Management and operation of ASD.
The relationship and interaction among employees, officers and other representatives of ASD and BOA, Bowdoin, Busby and Garner.
Facts and circumstances surrounding the opening, maintenance and account activity of BOA accounts in the names of ASD, Bowdoin, Busby and/or Garner.
Judge Rosemary Collyer has granted a motion by Jonathan Goodman and Michael Fayad of Akerman Senterfitt to withdraw as counsel for ASD President Andy Bowdoin.
The firm also was granted leave to withdraw as counsel in the civil-forfeiture case against tens of millions of dollars and real-estate tied to ASD amid allegations of wire fraud, money-laundering and operating a Ponzi scheme.
Goodman and Fayad filed the withdrawal motion April 2, saying they no longer could represent Bowdoin, AdSurfDaily Inc. and Bowdoin/Harris Enterprises Inc. effectively.
In asking for leave to withdraw, the attorneys said their representation of Bowdoin had become “unreasonably difficult.â€
“After this Court denied Claimant’s Emergency Motion for Return of Seized Funds [on Nov. 19, 2008], the client-lawyer relationship between the Firm and all three Claimants substantially deteriorated and has not improved thus rendering the representation unreasonably difficult,†the lawyers said.
The lawyers said the firm could not discuss specific issues, owing to the attorney-client privilege.
“Given the attorney-client privilege, the Akerman Senterfitt law firm cannot disclose the
specific issues underlying the problems with the client-lawyer relationship,†the firm said.
“However, without breaching the attorney-client relationship, and based on documents which Mr. Bowdoin publicly filed with the clerk’s office, it is obvious that Claimants have decided to represent themselves without consulting their counsel,†the firm continued.
“By way of example only, Mr. Bowdoin has recently filed, on a pro se basis, a series of motions. Mr. Bowdoin filed these motions without consulting with counsel and without bothering to advise counsel that he would be submitting motions on his own. Under these circumstances, the Akerman Senterfitt Law Firm cannot render effective assistance of counsel.â€
Charles A. Murray, a Florida attorney with privileges in the District of Columbia, filed an appearance notice on behalf of Bowdoin and his corporations last week. Collyer had informed Bowdoin, through Akerman Senterfitt, that the corporate entities could not proceed pro se.
Bowdoin began to file pro se motions in February, saying he had fired Akerman Senterfitt. At the same time, AdViewGlobal, an autosurf with close ASD ties, introduced members to Pro Advocate Group, which says it can help people practice law without a license.
In one of Bowdoin’s pro se pleadings, he acknowledged ASD was operating illegally at the time of the seizure, potentially adding to his problems and creating problems for ASD insiders and top promoters.
Citing an email from her AdSurfDaily downline, a member of the Pro-ASD Surf’s Up forum has advised other members that a federal judge has ordered prosecutor William Cowden to “charge Andy Bowd[o]in or end it and return the money.”
There are no documents in the public record to substantiate the claim. Judge Rosemary Collyer appears not to have issued such an order.
On April 3, Collyer issued an order to show cause, ordering prosecutors to respond to certain Bowdoin pro se pleadings by April 24. The judge acknowledged in the order that “uncertainties surrounding the status of [Bowdoin and associated corporations’] counsel” had contributed to a delay in filing responses to Bowdoin pleadings.
Bowdoin himself contributed to the confusion by filing motions on his own behalf even though the record of the case showed that he still had paid counsel. On March 26, Collyer ordered Bowdoin’s attorneys to state whether they intended to proceed as Bowdoin’s counsel or withdraw, and also to instruct Bowdoin on critical matters of law.
The Akerman Senterfitt law firm, Bowdoin’s paid counsel, now has sought leave to withdraw, saying its representation of Bowdoin had become unreasonably difficult and advising the court that Bowdoin hadn’t consulted with the firm before he filed a series of motions on his own behalf.
Last week, Florida attorney Charles A. Murray filed an appearance notice on Bowdoin’s behalf, although Collyer has not yet granted Akerman Senterfitt’s motion to withdraw as Bowdoin’s paid counsel.
Murray’s entry in the case, however, suggests that Bowdoin’s days as a pro se litigant have come to an end.
Meanwhile, the Surf’s Up post that quoted from the member’s downline and passed along confusing information urged ASD members to begin yet another letter-writing campaign on Bowdoin’s behalf.
Here is the downline information being circulated at Surf’s Up (italics added):
Once again, seems we might be on the cusp of getting our money return to the rightful owners – you and I. Recently the Judge has ordered Cowden to charge Andy Bowdin or end it and return the money.
Now is a great time to put on the pressure. Write another letter today expressing your need for your money return and how you feel about them taking our money in the first place.
Don’t give up. If we don’t act, apathy could cost us our money. Bad succeeds when good stands down.
If you are writing from Panda point of view, keep in mind that is a separate company from out point of view. Write your letters accordingly.
Don’t write a book. Succinctly write the wrongness of the gov taking our money, keeping it and creating the victims they claim they were protecting. Please use your own words and be brief. Just get your side counted.
Include copies to:
William Cowden/Jeffery Taylor
United States Attorney’s Office
555 4th Street, NW
Washington, DC 20530
Also write and send copies to the Ombudsman of the DOJ. This is the office that’s charge with protecting us from abuse from within the DOJ. File a complaint in regards to any perceived wrong-doing by the attorney generals in this case. http://www.usdoj.gov/usao/eousa/vr/
Despite the claim in the email that the money seized by the government belonged to the members, Bowdoin has argued in court that the money belonged to him and his companies.
Both Bowdoin and the prosecution agree that the members do not own the seized funds.
UPDATED: 11:40 A.M. EDT (U.S.A.) AdSurfDaily President Andy Bowdoin has a new paid attorney: Charles A. Murray of Bonita Springs, Fla.
Murray filed an appearance notice today in the civil-forfeiture cased filed in August against money and other assets tied to ASD.
The appearance notice says that Murray will represent Bowdoin and two corporate entities: AdSurfDaily Inc. and Bowdoin/Harris Enterprises Inc.
This may mean an end to Bowdoin’s pro se pleadings in the case. Bowdoin began to act as his own attorney in February. Judge Rosemary Collyer informed him, through his prior counsel, that the corporate entities could not proceed pro se.
Michael Fayad, one of Bowdoin’s original attorneys, filed a motion today to correct an appearance notice from August that erroneously listed Bowdoin and his firms as “Defendants,” rather than “Claimants.”
Murray says in his filing that he is taking over for Fayad’s firm, Akerman Senterfitt. Akerman Senterfitt filed a motion last week, asking the court to resign as Bowdoin’s counsel, saying its representation of him amid the circumstances was unreasonably difficult.
Bowdoin did not consult with the firm before proceeding as a pro se litigant, Akerman Senterfitt said.
In one of Bowdoin’s pro se pleadings, he acknowledged that ASD was operating illegally at the time of the August seizure of tens of millions of dollars. He advised the court, however, that he had been denied “fair notice” that his conduct was illegal.
Prosecutors responded by saying ignorance of the law is no excuse and that the government had no duty to inform Bowdoin that fraud is illegal.
Another Bowdoin pro se filing seeks to reverse his January decision — while working with paid counsel — to submit to the forfeiture and not raise the issue again. Collyer advised Bowdoin that he had not raised points of law to supplement his argument, in essence telling him that the motion alone might not be enough for her to grant his motion to reopen the forfeiture litigation.
Using her discretion, Collyer had to construe a meaning for Bowdoin’s pro se motion — a somewhat common occurence when pro se litigants are filing papers. Pro se pleadings often are vague, sometimes making baffling leaps of logic and tortured arguments.
In late February, AdViewGlobal (AVG), a surf firm with close ties to ASD, introduced Pro Advocate Group to members. Pro Advocate Group says it can help people practice law without a license.
Karl Dahlstrom is associated with Pro Advocate Group. Dahlstrom was sentenced to 78 months in federal prison in the 1990s for securities fraud. Bowdoin’s pro se pleadings began at the same time AVG was introducing Pro Advocate Group to members.
UPDATED 12:30 P.M. EDT (U.S.A.) eWalletPlus, a money-exchanger associated with a surfing company that has close ties to AdSurfDaily, no longer is taking new registrations, according to its website. The site does not explain why.
At the same time, AdViewGlobal (AVG) — the firm with close ASD ties — sent members a newsletter encouraging them to use the so-called “80/20 Rule,” a sign the company may be desperate to keep money in the system.
AVG’s newsletter led with the 80/20 pitch, despite all of the news it could have led with. AVG again did not fully explain its banking problems or an apparent inability to process some or all ACH transactions. The newsletter was said to have originated in Phoenix, the purported home of eWalletPlus.
“One of the strategies to have your advertising with AVGA pay for itself besides watching the 24 required sites is to use the 80/20 rule,” AVG said in its newsletter. “Simply stated you use 80% of your daily earnings to purchase[] additional page impressions and cash out 20%.
“This will create additional income by creating more probabilities of sales because of increase[d] advertising of your site. And second by purchasing more page impressions every day this increases sales that directly affect your VIP.”
“VIP” is AVG’s term for what ASD called “rebates.”
“If you have any questions about the 80/20 rule your up line should be able to give you additional details,” AVG continued. “The AVGA business model is sound and will work to promote your business and help pay for the advertising bill.”
Just below the 80/20 pitch was an announcement that AVG’s 200-percent, matching-bonus program had been extended until April 10. The company has been promoting the 200-percent program, which applies to members and their sponsors, for weeks.
One promoter claimed a $5,000 purchase turned into $15,000 “instantly!” The promoter making the claim was Shad Foss, who has been linked to the CEP Ponzi scheme. ASD once advertised that it accepted payments from CEP Trust, the failed payment processor run by the operators of the CEP Ponzi scheme.
Although AVG used the newsletter to announce its “Future Is Very Bright,” it has never fully explained the March 20 departure of Gary Talbert, its chief executive officer and a former ASD executive.
On March 23, the company announced it had a banking problem, but did not fully explain what the problem was and how it was affecting operations. The March 23 annoucement blamed the problem on AVG members who’d sent too many bank wires in excess of $9,500.
AVG has a history of not identifying the corporate authors of specific communications to members. Some correspondence has been signed by the “AVG Management Team,” which has led to questions about who is running things and why no one has emerged as the public face of the company.
Prosecutors have responded to ASD President Andy Bowdoin’s pro se claim that he was denied fair notice that the conduct of ASD was illegal, saying ignorance of the law is no excuse.
At the same time, prosecutors asserted Bowdoin’s own past as a criminal defendant turned his argument that the case should be dismissed on its ear.
“In this case, Mr. Bowdoin’s motion to dismiss on vagueness grounds is all the more
remarkable because he was previously arrested for having used money he took from individuals who invested in a new opportunity he had been promoting to repay debts he owed to individuals who lost money after investing with him in a different venture,” prosecutors said, referring to Bowdoin’s arrest in Alabama in the 1990s.
“Mr. Bowdoin even acknowledged that he lost money in a similar auto-surf ‘Ponzi’ scam that the government closed before he started ASD,” prosecutors said. “The ‘I forgot what I knew’ inference Mr. Bowdoin would have this Court draw certainly provides no basis for dismissing the government’s wire fraud allegations on vagueness grounds.”
And Bowdoin was tilting at windmills when he asserted that the government was required to warn him that wire fraud, money-laundering and running a Ponzi scheme were illegal.
“Mr. Bowdoin’s assertion that he ‘did not know or realize that his conduct was illegal’ cannot survive a moment’s analysis,” prosecutors said. “The central claim underpinning the government’s forfeiture action is that Ad Surf Daily (ASD) and Golden Panda (GP) were unlawful, fraudulent ventures operating over the Internet.
“The government’s complaint alleges that ASD and GP operators falsely stated that they were offering legitimate business opportunities in which ‘members’ could invest and expect a profitable return of at least 125%, at the rate of about 1% per day, on each dollar invested,” prosecutors continued.
“But, as the two related forfeiture complaints show, ASD and GP had no actual independent operations and, thus, earned no profits from which to pay out the returns they promised to their members-investors. Rather, in a classic ‘Ponzi’ style scheme, money from investments by later ‘members’ was (and would have been) used to redeem promises of fantastical returns made to earlier member-investors.”
Bowdoin Piled Lies On Lies, Prosecutors Claim
Andy Bowdoin is only pretending to be ignorant, prosecutors said.
“At bottom, Mr. Bowdoin’s protestations of ignorance are yet another lie: he not only knew that he lacked sufficient revenue to pay the returns he promised, he knew the revenue numbers he posted were made-up. With such knowledge, and given that Mr. Bowdoin does not deny having used the Internet to publicize his false promises and misrepresentations, his argument for dismissal on void-for-vagueness principles is meritless,” prosecutors said.
In walking back Bowdoin’s pro se pleading, prosecutors said that Bowdoin appears to be arguing that he should be permitted to lie with impunity and keep money he collected as a result of his lies.
“To examine Mr. Bowdoin’s proposition, at the outset, the Court should recall precisely
what the government has alleged in seeking forfeiture in this civil action: the defendants in this case, several parcels of real property and millions of dollars — were amassed through a wire fraud. In particular, the government asserts that Mr. Bowdoin ran a ‘Ponzi’ style scam that made false promises to deceive investors into sending their money off to Mr. Bowdoin and his associates.
“The government asserts that Mr. Bowdoin and his associates failed to tell the investors that ASD was merely shuffling their money — that it had no true profits with which to
pay the profitable returns it promised them. In light of the government’s allegations here, Mr. Bowdoin seems to be asserting (1) that he did not know that it was illegal for him to lie to investors in order to cause them to send him their money in the first place, and (2) that he should therefore get to keep all of the money he secured by lying. He offers, not surprisingly, no authority for his proposition.”
Prosecutors cited law and precedent to back their claims, arguing that Bowdoin was making vague, disingenuous claims, including the claim that he is a “defendant” in a criminal prosecution when the forfeiture case resides in civil court.
“This is a civil forfeiture action, not a criminal prosecution, so Mr. Bowdoin’s references to himself as the ‘defendant’ are miscast,” prosecutors said.
“Thus, citations to precedent dismissing criminal prosecutions are not strictly apposite to this case. Properly speaking, the defendants in this case are not Mr. Bowdoin or his confederates at Ad-Surf Daily or Golden Panda, but the real properties and many millions of dollars garnered in a ‘Ponzi’ style fraud.
“Ironically, even on its own terms, Mr. Bowdoin’s pro se filing cites only fatally vague generalities. Examples include: ‘[i]n criminal prosecution, unclarity alone is enough to resolve the doubt in favor of the defendant’ (citation omitted); ‘[t]he ‘rule of lenity’ is a principle of statutory construction which provides that criminal statutes must be narrowly construed, and any ambiguity be resolved in favor of lenity’ (citation omitted); and, ‘vice of vagueness in criminal statutes is treachery†(citation omitted),” prosecutors said.
We’re about to engage in some speculation on the AdSurfDaily case — and we’ll readily concede it’s exactly that: speculation. None of this should be taken as high truth or an assertion we are “right.” It should be taken as an exercise in critical reasoning.
This is a long post. Care to come along for a ride whose purpose is to explore possibilities?
The first thing you’ll need to do is suspend your disbelief and accept the premise that AdSurfDaily Inc. actually is capable of telling the truth — perhaps not the whole truth, but something that may amount to a convenient truth. This will be a leap for many of our readers, but if you want to accompany us on this ride you’ll have to willing to make this leap.
One of the reasons this requires a leap is because ASD President Andy Bowdoin’s words and actions strain credulity virtually across the board. After insisting for months ASD was perfectly legal, he now says it was illegal — but that ASD was denied “fair notice” of its illegal business practices.
At the moment, Bowdoin is leading yet another charge to have ASD members pummel the government with letters of support for a business he concedes is illegal. Bowdoin also encouraged members to contact talk-show host Glenn Beck.
Earlier he filed a petition for emergency relief that asked the government to return seized funds, saying the company couldn’t pay its rent or hosting bills, but didn’t mention ASD had more than $1 million parked offshore in Antigua. Only after prosecutors revealed the existence of the Antigua money did Bowdoin acknowledge it to members.
A few months after Bowdoin’s Antigua tie was exposed, the banking system on the Caribbean island nation was endangered with the exposure of the alleged Allen Stanford Ponzi scheme. The crisis rippled across the Caribbean and into Central and South America.
Back when Bowdoin still was saying ASD was legal, he demanded an evidentiary hearing to make the company’s case — and then took the 5th. Meanwhile, ASD’s fingerprints also are all over the AdViewGlobal autosurf, which recently announced its bank account had been suspended and yet extended a 200 percent, matching-bonus program — all while it was having trouble processing cash-out requests.
Bowdoin’s stepson is an AVG trustee. The company, which purported to be offshore, came to life after the ASD seizure. AVG employed former ASD employees and used the ASD webroom. A graphic showing AVG’s street address as the same street address ASD used appeared in the webroom. It was removed after Web reporters pointed it out. Incredibly, AVG insisted there were no ASD ties. Equally incredibly, the person making the announcement was a former ASD employee.
AVG claimed to be headquartered in Uruguay. Its servers resolved to Panama, one of the countries affected by the alleged Stanford Ponzi scheme.
Bowdoin recently appeared in a video — now taken offline — for Paperless Access, a new surf company. He said the company could help ASD members recapture money seized by the government. He did not identify the owners of Paperless Access. Nor did he explain how the company was legal and able to comply with securities laws — while not operating as a Ponzi scheme.
The Issue
Assertions have been made that the U.S. Secret Service mistakenly left behind “several piles” of undeposited cashier’s checks at ASD headquarters during the August raid last year. Upon recognizing this after the agents left, ASD dutifully notified the Secret Service about the checks. Over a period of days, the Secret Service was said to have accepted some of the checks after being notified by ASD, but not all of them.
Bowdoin’s Take
Our source for this claim is none other than Andy Bowdoin himself. Here is what he said during a conference call last summer (italics and bold emphasis added):
“Now, to show how inefficient they were in doing their search at the office, they overlooked several piles of cashier’s checks,” Bowdoin said of the Secret Service, according to a transcript of his remarks during an Aug. 12 conference call. ASD members circulated the transcript.
“There was one that was made out for several hundred thousand dollars. Federal agents were present at the bank, and one of our people turned them in and said, ‘Here, you overlooked these.’ They went ahead and made a deposit so that they could seize that money,” Bowdoin continued.
“The next day [employees] found a little over a million dollars in checks that [the Secret Service] had missed. And they took them to the Secret Service office in Tallahassee and gave that to them. Monday, back in the office, they found a few more checks at the office totaling about $40 thousand to $50 thousand. They took those to the Secret Service office in Tallahassee, and they said they didn’t want any more money. They said to send it back to the members.
“Now, why didn’t they send all the cashier’s checks back that they took, back to the members? Why didn’t they do that, if they were looking out for the people? If they had been concerned about the people, they would have. The government has done a great injustice to these people by taking those cashier’s checks and cashing those checks into the U.S. Treasury.”
Bowdoin’s assertion that checks the Secret Service missed during the raid kept popping up over a period of days after the raid may be important.
Golden Panda
There also have been assertions that not all checks sent to Golden Panda Ad Builder made their way into government accounts for later use in a restitution fund for victims. Bob Guenther, for example, claims that about $1.5 million was returned to Golden Panda members, in part through his efforts.
Among the people to whom money was returned were Joe Shoop, an ASD promoter; an unnamed “high-profile Dallas Cowboy executive”; and retired and active-duty police officers in Texas and California, Guenther said.
Who recruited the members into Golden Panda is unclear. Guenther said the government should have returned all seized checks to ASD and Golden Panda members.
The Exercise In Critical Reasoning
What could the claim that the Secret Service mistakenly left behind “several piles” of checks mean?
Well, it could mean the Secret Service actually did mistakenly leave behind the checks and decided to accept some of them but not all of them them after being notified by ASD. There could be sensible, logical reasons completely consistent with the aims of law enforcement for not accepting all of the checks.
Not accepting all of the checks also could be a bureaucratic blunder.
We highly doubt the Secret Service mistakenly left behind “several piles” of checks — as Bowdoin claimed — at ASD headquarters, but concede it’s possible. It’s also possible that ASD was telling the truth when it said it notified the agency about the checks and that the Secret Service eventually told ASD it didn’t want any more checks — what Bowdoin and others have painted as investigative/administrative incompetence.
But what if it wasn’t an investigative/administrative error at all? What if the Secret Service made a tactical decision to leave a limited number of checks in the former flower shop that once housed ASD to see what would happen after agents left?
Such an approach could lead to clues that would enable the government to better fund a restitution account for victims.
In our view, no private citizen had any business working as an intermediary or third-party collector to gather money sent to ASD or Golden Panda. We’re not aware of any assertions that a third party collected money from ASD, but we are aware of a report that at least one ASD downline sponsor was pressured by a third party to return money the sponsor accepted directly from a recruit to pay for ASD “advertising.”
At the same time, we are aware of assertions that money was collected by a third party or parties and was returned to Golden Panda members.
The return of the money could have affected the government investigation and hindered its efforts to create the biggest resitution pool possible.
This is a money case. One of the ways to solve a money case is to follow the money. Even if the Secret Service mistakenly left the checks behind at ASD, not accepting some of the checks later might have created an opportunity for it to follow the money and produce new leads.
Now, understand: We have no insider’s knowledge from investigators — and, as noted above, this column is engaging in speculation. But what if the Secret Service, say, wasn’t satisfied at the time of the raid that it had identified all of ASD’s financial conduits?
It might make sense to leave some checks behind and then follow those checks if and when ASD acted on them. If higher crimes were suspected, leaving some money behind might help expose the tentacles of a criminal enterprise and lead to resources that could be used for victim compensation.
The same thing could be said about checks delivered to Golden Panda in Georgia. It is possible that the Secret Service wasn’t certain that it had located all of Golden Panda’s financial conduits and permitted Golden Panda to exercise some control so agents later could follow the money.
Want to add another layer?
What if ASD had what amounts to a banking slush fund set up offshore (or domestically) and kept uncashed checks in a secret domestic location, which is to say not at the headquarters building that was searched?
Are you ready to say for certain that ASD kept all undeposited checks at its headquarters? Are you ready to say for certain that the Secret Service missed “several piles” of checks when the man making the claim is a known fraudster who wouldn’t take the witness stand at his own evidentiary hearing?
What if ASD didn’t have an offshore or domestic slush fund but was in the process of setting one up, perhaps contemplating that it could fund the account with some of the undeposited checks? It would make sense for ASD to stash some checks outside the headquarters building until they could be used to fund the secret account.
Are you ready to rule that out?
And what if, after the raid, ASD considered the dramatic criminal consequences of such deception, and then created a cover story that the agents had left behind “several piles” of checks during their search?
One way to explain the sudden appearance of checks that had been stashed is to say the Secret Service missed them during the headquarters raid.
What if an ASD insider came to the building late at night — hours after the raid, while people were sleeping — and planted stashed checks inside for employees to find in a bid to create the appearance agents had done sloppy work in missing “piles” of checks?
What if ASD feared the Secret Service might suspect ASD had a slush fund offshore or elsewhere and knew any stashed checks effectively had become worthless? In other words, the mere act of depositing them in the slush fund would demonstrate the criminality. Holding onto checks that had been stashed could lead to uncomfortable questions from customers. So could depositing them in a secret bank.
ASD indeed could have notified the Secret Service about checks the company still had in its possession. It could have created a cover story that agents had “missed” the checks, when agents hadn’t missed them at all because they were not at the locations searched at the time of the search.
Mind you, we are not saying ASD created a cover story. What we’re saying is that it is common for criminals to create cover stories and for co-conspirators to agree to the stories. If ASD kept checks at a secret location, those checks would pose a problem that ASD could “solve” with a cover story that agents had missed “several piles” of checks.
An Ongoing Probe
The ASD case was (and is) an investigation by the Secret Service, the IRS and perhaps other law-enforcement agencies. It was (and is) an ongoing conspiracy investigation, and no agency involved is about to share the prongs of their investigative techniques and prosecution strategy.
This is why any efforts from individuals and groups post-seizure to force, say, Golden Panda to return funds to specific individuals very well could be problematic. It’s the prosecution’s case.The prosecution is empowered to investigate and prosecute the case without interference. Its theory of the case is that the assets of ASD and Golden Panda are the proceeds of a criminal enterprise and that a conspiracy existed.
For the purposes of this prosecution, the Feds effectively view ASD and Golden Panda as one in the same because of their native ties. The assets were seized in an “all funds” forfeiture complaint. It is highly possible that prosecutors view the individual entities as components of a larger racketeering and money-laundering enterprise.
Racketeering. Money-laundering. Wire fraud. Mail fraud. Perhaps other types of criminal fraud.
If you’ve been paying attention, you know that private litigants have sued ASD President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda President Clarence Busby in a civil RICO complaint. The theory is that businesses and individuals known and unknown were engaged in a racketeering enterprise.
The pool of money to compensate victims is now smaller because of private interventions by individuals and a group during an active investigation by authorities.
Money has been returned to private individuals by private individuals during a public investigation. We have seen no evidence that any person who intervened to return funds on behalf of another individual did so with the authority, support and encouragement of law enforcement.
We believe it best to let the prosecution handle its case as it sees fit. Freelancing by private individuals to return money never should have been part of this mix. The act alone created potential injustice for ASD and Golden Panda victims. Even before the forfeiture case has been litigated to conclusion, some victims have been made “whole” and have not been subjected to the haircut everyone else stands to get.
The money in the ASD and Golden Panda case was under arrest. Prosecutors have the authority to claw back all refunds that occurred as the result of the actions of an intermediary. At the same time, prosecutors can claw back money the Feds might have been monitoring or strategically permitting to enter the banking system to see where it eventually would land.
UPDATED 2:13 P.M. EDT (U.S.A.) A temporary restraining order against Florida resident Jack Arons by Dallas attorney Larry Friedman has been dropped.
Arons and Friedman are in mediation to try to settle a dispute that resulted in Friedman accusing Arons of slander and libel March 5. The mediation is occurring via telephone and will resume next week.
The lawsuit stemmed from the affairs of the ASD Members Business Association (ASDMBA) Trust.
Bob Guenther is the de facto head of the Trust. ASDMBA members said Guenther has not provided transparent accounting for the Trust and engaged in threatening behavior when his management was questioned.
Guenther is facing two felony charges of aggravated harassment in Arizona. A court date is set next month. Police alleged that he repeatedly violated a court order prohibiting him from threatening an Arizona company.
Friedman is an attorney for the Trust. ASDMBA members funded the Trust with contributions, expecting that their legal interests would be covered in the AdSurfDaily case. Some members said they filed complaints with the Texas Bar and the office of Texas Attorney General Greg Abbott.
Guenther said the Trust had an insurance policy and, if members had valid complaints, they should contact him to make a claim against the policy.
“If anyone has any VALID complaint about the administration of the ASDMBA, the disbursement or use of the funds, or any other questions not answered, then they should get a lawyer, file suit, and Ill turn it over to our insurance company,” Guenther said on March 26, in a Comment to this Blog.
Guenther did not say what process was in place to determine if a complaint was valid. He added that the Trust had a second trustee, Kenneth Devolpi.
“Hopefully Mr Friedman will continue to represent the ASDMBA, without compensation, as he has done for the last 90 days or so, and the other Trustee, Kenneth deVolpi, will not resign,” Guenther said in a Comment.
Devolpi lists members of Guenther’s family, including Guenther’s wife, as Facebook friends. Guenther’s daughter lists Devolpi as a friend, as does Guenther himself.
ASDMBA members have raised concerns in recent days that Guenther now seems to be backing away from claims that ASDMBA is a Trust.
“This association was not formed as a formal Texas ‘TRUST,’ Guenther said in a Comment to this Blog. “No representation to that effect have ever been made. It is a simple association, formed with a set of self imposed administration guidelines.”
The organization, however, was referred to as a Trust in recorded conference calls and online chat forums. The dispute now seems to center on the meaning of the word “Trust.”
Guenther also said in a Comment that about $1.5 million was returned to members of Golden Panda Ad Builder, acknowledging that the money did not become part of a federal pool to compensate victims of what prosecutors described as a $100 million Ponzi scheme involving ASD and Golden Panda.
This may lead to questions about whether some victims received preferential treatment and whether federal prosecutors will seek to have the money returned to the pool.
Money was returned to police retirees and active-duty officers in Texas and California, and to a “high profile Dallas Cowboy” executive, Guenther said. He acknowledged that he had a hand in the return of the money.
A five-figure sum was returned to Joe Shoop, an ASD promoter, Guenther said.
Guenther did not say under whose authority the money was returned. He ventured, however, that “The Feds who raided the ASD headquarters,upon finding over $35 Million in uncashed cashiers check, should have ordered the return of the uncashed checks to the rightful owners.”
The money returned to Golden Panda members was not seized in a raid by the U.S. Secret Service of ASD’s headquarters in Quincy, Fla., last year. The returned money, rather, had been sent to Golden Panda in Georgia.
Bank of America has filed a motion to dismiss claims against it in a class-action racketeering lawsuit against ASD President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby.
BOA was not named a RICO defendant in the lawsuit. Instead, former ASD members Mike Collins of Savage, Minn.; Frank Greene of Washington, D.C.;Â and Natures Discount of Aventura, Fla., accused the bank of aiding and abetting Bowdoin, Busby and Garner in an organized effort to defraud.
Tens of millions of dollars connected to ASD, Golden Panda and LaFuenteDinero were seized by the U.S. Secret Service in August, amid allegations of wire fraud, money-laundering, selling unregistered securities and operating a Ponzi scheme.
“Banks are not guarantors of their customers’ conduct,” BOA argued in its motion to dismiss. The bank further argued that the complaint was vague and speculative, lacking in facts to such a degree that U.S. District Judge Rosemary Collyer of the District of Columbia must dismiss BOA as a defendant.
The bank filed the motion on its behalf, not on behalf of the RICO defendants. Neither Bowdoin nor Garner nor Busby has responded to the lawsuit, which was filed Jan. 15, more than two months ago. The court reissued the summons last week to the trio of RICO defendants.
“All told, Plaintiffs’ allegations merely describe Bank of America as having engaged in legitimate banking services without pleading any facts that Bank of America engaged in any wrongdoing whatsoever,” BOA said in its motion.
The plaintiffs, however, said BOA ignored red flags that should have signaled the bank that surf-operators Bowdoin and Busby were using it to launder money and conduct a criminal enterprise.
“From ASD’s inception in November 2006, Defendant Bank of America played an integral role in ASD’s operations and success,†the plaintiffs charged. “While other financial institutions and payment processors refused to facilitate ASD’s fraud, Bank of America, even in the face of significant banking best practices ‘red flags’ and likely violations of the Bank Secrecy Act and relevant anti-money laundering statutes, not only conducted business with ASD and the RICO Defendants, but it also substantially assisted the expansion of the ASD scheme.â€
When Curtis Richmond began filing pleadings in the ASD case, the Surf’s Up forum hailed him a hero. Prosecutors see things a different way.
A federal judge should not permit Richmond and three others to intervene in the AdSurfDaily forfeiture case because the pleadings “will cause either manifest injustice, unconscionable delay, or both,” federal prosecutors said late yesterday.
“Movants are but an unhappy few of the many thousands of victims of the fraud schemes
described in the complaint,” prosecutors said of Richmond and three other men who used Richmond’s pro se litigation blueprint. “They seek to muscle aside their fellow sufferers, and cannot even pretend to be acting in the best interests of the other [ASD] victims.”
Prosecutors said the government is establishing a mechanism to provide refunds to ASD victims and that Richmond’s filings essentially create a small, special class of victims and could result in interminable delays for rank-and-file ASD members.
Absent in the prosecutors’ response to Richmond were direct references to assertions by Richmond and the others that the government had committed crimes. Some ASD members treated Richmond’s assertions as red meat for the masses, using them to feed dissent against the government and build support for ASD President Andy Bowdoin.
Prosecutors virtually ignored the assertions. Richmond was convicted of contempt of court in 2007 for threatening federal judges. He also was ordered by a federal judge to pay damages and costs to Utah public employees targeted by vexatious legal filings. The employees sued Richmond, a member of a sham Utah “Indian tribe,” under federal racketeering statutes.
The Four-Corner Offense?
It is NCAA “March Madness” basketball tournament time in the United States. Sometimes basketball teams try to slow down the game by employing the “four-corner offense,” situating players in a square and simply passing the ball around the square, rather than advancing it toward the basket.
Prosecutors may be anticipating a four-corner offense from Bowdoin and others to slow down the ASD case. They referenced Bowdoin’s own pro se pleadings in the case, but did not respond to them directly in their response to motions by Richmond and the others.
It would not be surprising if the government later takes the stand that Bowdoin’s filings are designed to delay justice. Pointedly, prosecutors described Bowdoin as “apparently proceeding pro se,†a possible sign of developments to come.
For scale, consider that the first filing in one of the Utah cases involving Richmond was entered on Aug. 11, 2004 — four and a half years ago. By Jan. 14, 2009, the case file had grown to include 321 separate entries, not taking entries that don’t qualify as formal filings into account.
In January, Bowdoin, acting under advice of paid counsel, submitted to the August forfeiture of tens of millions of dollars seized from him. But Bowdoin now says he has changed his mind about submitting to the forfeiture, even though he also concedes ASD was operating illegally at the time of the seizure — exactly what the government contended all along.
The ASD case was nearly litigated to conclusion when pro se pleadings began to pour in. In their response to Richmond, prosecutors streamlined their pleadings — addressing Richmond’s filing and three similar ones by other pro se litigants in the same document, rather than producing an individual response to each of the four motions.
Individual motions might have required to court to act on four more documents, thus slowing down the case even more.
If history is a guide, though, ASD members should not be surprised if the case slows to a crawl, thus delaying refunds. In the past, Richmond has filed pro se document after pro se document — and then turned to appeals courts for remedies when denied by district courts.
He even has named judges defendants in his pleadings.
UPDATED 10:37 A.M. EDT (U.S.A.) AdSurfDaily attorney Robert Garner has been served with a lawsuit alleging he engaged in racketeering with ASD President Andy Bowdoin and Golden Panda Ad Builder President Clarence Busby.
