UPDATED 6:59 A.M. ET (DEC.29, U.S.A.):The OneX site now is resolving to a server, although the site still appears to be down. (UPDATE 6:25 P.M. ET DEC. 29: The OneX site now appears to be back online after an absence of days. Whether is is fully functional is unclear.) Web data now suggest OneX is using a server in the United States. It previously used a server in Europe. Here, below, our post that reflected earlier events . . .
At the time of this post, the website for “OneX” — a “program” pushed by AdSurfDaily President Andy Bowdoin — will not resolve to a server.
Nor will the site return a ping. The ping returns “Timed out” error messages. Because the site will not resolve to a server, a message that the site “will be available in the next 24 hours” no longer appears at the URL for OneX.
The development means that some or all OneX members and prospects are in an even greater information vacuum. The site has been inaccessible for days, although the PP Blog has learned OneX conducted a conference call yesterday and assured listeners the site would return after server problems caused by “inexperience” were solved.
The call featured various cheerleaders, including a man identified as “J.C.,” apparently a company official.
“J.C.,” explaining that he did not enjoy hype, assured listeners that “God” was on the side of OneX and that he anticipated 2.5 million riders on the OneX train by March.
It was revealed during the call the OneX is using Canada-based Solid Trust Pay (STP).
STP was one of the payment processors used by ASD and has a reputation for fueling Ponzi and fraud schemes. STP was among the processors used by alleged international swindler Nicholas Smirnow of Pathway To Prosperity, which the U.S. Postal Inspection Service said last year had defrauded tens of thousands of people from 120 countries.
During the OneX conference call, J.C. explained that many members were showing “unbelievable tolerance” for the website problems.
“Those who are not being patient do not understand what’s there,” J.C. asserted.
Among other things, J.C. appealed to callers not to send in support tickets.
“We’re having some — it’s load problems,” J.C. asserted, calling the development “teething problems.”
J.C. also assured listeners that the company was “a thousand times” more frustrated than OneX members who cannot access the site.
The OneX IT team was inexperienced in the area of “load testing” and wished to apologize for its lack of experience, J.C. said.
“. . . We don’t know how to do heavy load-testing,” J.C. asserted.
That the OneX website was being “slammed” by traffic was a “good thing,” J.C. asserted.
“Hey,” he insisted, “these are pioneering days.”
“We’re on a mission from God,” J.C. asserted.
Bowdoin, who is facing trial on criminal charges of operating a Ponzi scheme through ASD that gathered at least $110 million, told conference-call listeners in October that God created OneX to help him win his criminal case.
Although J.C. apparently agrees with Bowdoin that God is steering the OneX ship, J.C. told listeners that they should expect no support from their sponsors.
Bowdoin has claimed that he is providing “leads” to his OneX recruits and that enrollees could make nearly $100,000 by paying $5.
A woman on yesterday’s OneX call, which apparently was organized by a downline group with access to OneX management, claimed there were plenty of reasons to be excited about OneX.
“In three months, we can look back . . . and laugh,” the woman claimed, later asserting the company started out “on horseback.”
“You’re pioneers,” J.C. asserted. “This is huge.”
OneX “leadership” will “roll up their sleeves” to solve problems, another woman asserted.
J.C. said the firm would provide a “paved road” for members one day.
UPDATE: “OneX,” the mysterious “program” AdSurfDaily President Andy Bowdoin claimed in October would pay for his criminal defense and help former ASD members “earn $99,000 very quickly,” has been offline for days.
The reason for the extended outage, which coincided with the run-up to the holidays and now has extended beyond Christmas, is unclear. Messages viewed by visitors to the OneX site have varied. The most recent message claims the site “will be available in the next 24 hours.”
But the site has beamed that message for days. The message is signed, “OneX/Qlxchange Administration” — without naming the operators of OneX.
Bowdoin, 77, claimed in October that God had led him to his strategy of using OneX to pay for his criminal defense.
“I believe that God has brought us OneX to provide the necessary funds to win this case,” Bowdoin said in a conference call. Bowdoin was charged with wire fraud, securities fraud and selling unregistered securities in December 2010. His trial is scheduled for September 2012.
OneX, which uses a domain extension assigned to the European country of Montenegro and a webserver apparently positioned in the Irish Sea nation of Isle of Man, is described in MLM-style web promos as a 4X4 matrix feeder program for a Panamanian investment firm and commodities enterprise known as QLxchange.
Bowdoin has participated in multiple OneX pitchfests, using a presentation that appears to have been scripted heavily.
“Tonight we’ll be talking about a financial bailout program for the average person,” Bowdoin said during an October pitchfest.
ASD’s own site was chronically offline before the U.S. Secret Service brought Ponzi scheme allegations in 2008. When Bowdoin’s 10 personal bank accounts were seized on Aug. 1, 2008, the message on the ASD site was signed, “ASD Management.”
During the extended outage, the OneX site has been using this strange headline: “Under A Little Maintenance.”
A tagline below the logo for QLXchange on the site reads, “Investing To Achieve Your Dreams.”
Screen shot: The logo for Qlxchange is appearing in a maintenance message on the OneX site. The site has been inaccessible for days.
EDITOR’S NOTE: Any number of ventures have tied themselves to claims of remarkable returns made possible by purchasing “advertising” products and services or agreeing to watch or receive “advertisements” in a closed environment. Longtime readers will recall that AdViewGlobal (AVG) came out of the gate in late 2008 and early 2009 by claiming what it did was the equivalent of what the NBC television network does. The claim was pure hogwash.
Here is a story about more pure hogwash involving a purported “advertising” opportunity . . .
An investment scheme involving claims about outsized returns from a purported “advertising” business gathered $6.2 million and has resulted in the guilty plea of its operator, federal prosecutors in Maryland said.
Edward J. Lawson, 67, of Silver Spring, Md., pleaded guilty last week to wire fraud after an investigation by the FBI and IRS uncovered evidence that Lawson was running a scam through companies known as Automated Revenue Creation LLC and Guaranteed Results Advertising LLC (GRA), prosecutors said.
Lawson and the firms purported to be in the business of beaming “Narrow Cast television commercials” to LCD television monitors at gas stations and convenience stores. The scheme operated at least between May 2006 and September 2008, prosecutors said.
“Edward J. Lawson’s promises of ‘automatic revenue’ and ‘guaranteed results’ were entirely fraudulent,” said U.S. Attorney Rod J. Rosenstein of the District of Maryland.
“In financial fraud schemes the promoter eventually runs out of other people’s money and the scheme collapses like a house of cards,” added Jeannine Hammett, acting special agent in charge of the IRS Criminal Investigations Unit in Washington, D.C.
Lawson positioned himself as an entrepreneur with 30 years’ experience, encouraged GRA investors to roll over their purported earnings amid assertions the screens were generating “so much revenue” and explained checks had bounced “due to conditions beyond [his] control,” prosecutors said.
At least 60 investors plowed money into the scheme, initially lured by claims that a screen purchased for $15,800 would lead to “a monthly return over a 10 year period that began at $3,000 and escalated to approximately $30,000 after 15 months,” prosecutors said.
As the scheme advanced, the price of the screens kept going up and the purported returns they’d fetch kept changing, prosecutors said.
“Later in the scheme,” prosecutors said, “an investor who purchased a screen for $23,800 was guaranteed a monthly return of $3,000 and escalated to approximately $15,000 after 12 months. In GRA’s final phase, an investor who purchased a screen for $89,800 was guaranteed a monthly return of $13,950 over a five or 10 year period.”
Lawson pitched the scheme from metro Washington hotels and at GRA’s office in Rockville, Md., prosecutors said.
U.S. District Judge Roger W. Titus scheduled sentencing for April 6 , 2012.
Various investment schemes involving “advertising” have been on the radar screens of federal investigators.
Andy Bowdoin, 77, the president of Florida-based AdSurfDaily, was arrested by the U.S. Secret Service a year ago this month and is awaiting trial. Prosecutors said Bowdoin positioned himself as a successful entrepreneur and was at the helm of an “autosurf” advertising fraud that had gathered at least $110 million by operating as a Ponzi scheme and dangling suggestions of huge returns.
ASD and AVG had promoters and members in common, according to online promos. Among the bizarre claims associated with AVG was that members who advertised in AVG’s closed system with about 20,000 members would achieve a conversion rate of 37 percent of their sales copy didn’t “totally suck.”
Based on the claim, a member who advertised a doughnut for free and a doughnut priced at $10,000 each would achieve the same conversion rate of 37 percent, an utterly preposterous assertion.
The rate would be achieved within the same closed universe of prospects, according to the claim.
UPDATE: On Dec. 1, 2010, AdSurfDaily President Andy Bowdoin was arrested on charges of wire fraud, securities fraud and selling unregistered securities. Sixteen days later — on Dec. 17, 2010 — federal prosecutors filed a forfeiture complaint against certain ASD-related bank accounts, including an account in Bowdoin’s name and accounts allegedly controlled by ASD members Erma Seabaugh of Missouri and Robyn Lynne Stevenson of Florida.
In the December 2010 forfeiture case, Bowdoin filed a claim for nearly $500,000 in assets he allegedly controlled. But Seabaugh and Stevenson did not, and federal prosecutors in the District of Columbia filed motions for default judgments in August 2011, according to court records.
The motions for default against more than $153,000 allegedly controlled by Seabaugh and more than $96,000 allegedly controlled by Stevenson are pending.
Seabaugh, Florida-based ASD’s purported “Web Room Lady,” is listed in Oregon records as the operator of a purported Missouri-based “religious” nonprofit firm known as Carpe Diem.
Stevenson operated a company known as Robyn Lynn LLC, according to court filings.
Bowdoin, 77, is free on bail. His criminal trial is scheduled for September 2012.
Separately, ASD figure and purported “sovereign citizen” Kenneth Wayne Leaming remains jailed near Seattle. The FBI accused him last month of filing false liens against five public officials involved in the ASD case, including U.S. District Judge Rosemary Collyer.
Collyer is presiding over the forfeiture case against money in the bank accounts allegedly controlled by Seabaugh and Stevenson. Collyer also is presiding over Bowdoin’s criminal trial and two related forfeiture cases involving ASD assets. Those cases were filed in August 2008 and December 2008.
The portion of the December 2010 forfeiture case involving assets allegedly controlled by Bowdoin has been placed on hold because of the criminal trial, but the cases against the assets allegedly controlled by Seabaugh and Stevenson are active.
Prosecutors have scored a clean sweep in ASD forfeiture-related litigation, with Bowdoin losing appeals to funds seized in the August 2008 and December 2008 cases. The U.S. Secret Service brought all of the ASD-related forfeiture cases.
The December 2010 case involving Bowdoin, Seabaugh and Stevenson traces its roots to February 2009, when Bowdoin — who’d initially submitted to the August 2008 forfeiture a month earlier — sought to undo his forfeiture decision and reenter the case as a pro se litigant. The AdViewGlobal (AVG) autosurf, which came to life after the August 2008 and December 2009 forfeiture cases were filed and after Bowdoin was sued by members amid allegations he had engaged in racketeering, was morphing into a so-called “private association” as Bowdoin was morphing into a pro se litigant, according to records.
AVG, which members said had close ASD ties, purportedly operated from Uruguay. Members positioned it as an offshore, safe alternative to the post-seizure ASD, but AVG appears to have gone belly-up in June 2009, less than a year after the first sound of seizures began in the ASD case.
EDITOR’S NOTE: A passage from a May 2011 email allegedly written by Kenneth Wayne Leaming appears in the story below. The passage, which appears to contain electronic clutter — specifically the string “#39;” — is reproduced verbatim, meaning the string also appears in the court document from which the passage was taken.
An FBI agent assigned to the Tacoma Resident Agency Joint Terrorism Task Force advised a judge last week that Kenneth Wayne Leaming — now jailed at a federal detention facility near Seattle on charges he filed bogus liens against public officials involved in the AdSurfDaily Ponzi case — referenced the young children of U.S. Chief Justice John Roberts and their “school.”
The reference appeared in a email that Leaming allegedly sent to David Carroll Stephenson on May 14, 2011. Stephenson, whom the agent described as Leaming’s former business partner in Washington state, is a convicted felon serving a 96-month sentence in federal prison for tax crimes.
“This week I will ‘flood’ the USSC with the habeas, one to each justice and resend the one to the Chief Justice, and maybe one to his kid#39;s school to be given to the parents,” Leaming allegedly wrote. “One way or another he is going to get it in his hands and I#39;ll start working on off duty locations for the remaining justices as well.”
Roberts and his wife have two preteen children.
The email clearly became a source of concern for the FBI.
“In this email,” the FBI agent who sought Leaming’s arrest wrote, “I believe that LEAMING is offering to file documents on Stephenson’s behalf, including sending them to the Chief Justice, via his minor children.”
But the alleged email to Stephenson was hardly the FBI’s only concern about Leaming, who appears to have no law degree but has been depicted in online ads as a practicing attorney. (The ads were removed last year.)
Investigators discovered a paperwork trail that linked Leaming and Stephenson to a purported $10 million lien against Harley Lappin, the former director of the Federal Bureau of Prisons, and a purported lien for $20 million against Dennis R. Smith, the warden of the Federal Correctional Institution in Phoenix.
As the probe that led to Leaming’s arrest proceeded, agents found bogus liens filed in Pierce County, Wash., against other public officials, including at least five officials involved in the ASD Ponzi case. Liens against Mary Peters, the former U.S. Secretary of Transportation, and Cutler Dawson, president and CEO of Navy Federal Credit Union, also were discovered.
At least some of the bogus papers linked to Leaming were found in July 2011 — during the execution of a search warrant at the Yelm, Wash., home of purported “sovereign citizen” Raymond Leo Jarlik-Bell, according to the FBI.
Whether Jarlik-Bell was a member of ASD is unclear.
The U.S. Secret Service has described ASD as a “criminal enterprise” led by Andy Bowdoin, a 77-year-old recidivist felon and securities huckster. Bowdoin, who was arrested in the Gulf Coast area of Englewood, Fla., in December 2010, operated ASD from the small town of Quincy in northern Florida, near Tallahassee. He has described himself as a “money magnet” and man of God.
The FBI said “one of the specific documents” recovered in the search of Jarlik-Bell’s home sought the staggering sum of $225.4 billion and listed “Kenneth Wayne, sovereign man” as “grantee,” and the public officials as “grantors.”
“Kenneth Wayne” is a name used by Leaming.
Navy Federal, which serves members of the military, is the largest credit union in the world.
So-called “sovereign citizens” have been known to file vexatious liens against public officials and courtroom opponents, including financial institutions. The practice has been described as “paper terrorism” and “mailbox arbitration.” Among other things, it can cause both the lien targets and the government to expend money and resources to defend against the nuisance claims, which can affect the credit histories of the individual targets and the efficiency of the court system.
Named in the liens in in addition to Peters and Dawson were U.S. District Judge Rosemary Collyer; former U.S. Attorney Jeffrey A. Taylor; former assistant U.S. Attorney William Cowden; current assistant U.S. Attorney Vasu B. Muthyala; and Roy Dotson, a special agent of the U.S. Secret Service.
Collyer, Taylor, Cowden, Muthyala and Dotson have had roles in the ASD Ponzi case. Why Peters and Dawson were targeted with liens is unclear.
Jarlik-Bell, who has been linked with Leaming to “sovereign citizen” groups known as the “County Rangers” and the “Assemblies on the County,” was arrested in July on tax charges. He was jailed pending trial, according to the FBI complaint against Leaming.
More Alleged Leaming Correspondence
In June 2011, according to the FBI, Leaming sent an email to Stephenson that referenced a letter that had or would be sent to Roberts, America’s top judicial officer. The letter strangely described the chief justice as “FIDUCIARY.” The email followed on the heels of other Leaming emails that suggested Leaming had spent part of the month of May conducting financial research on Roberts and his wife and trying to find a street address through which he could cause Stephenson-related writs to be delivered to the couple’s home — instead of the Supreme Court.
Other Leaming email correspondence in May suggests he sent a “certified,” Stephenson-related letter to the residence of Associate Justice Ruth Bader Ginsburg and was trying to find a home address for Associate Justice Stephen G. Breyer — instead of sending Stephenson-related correspondence to the Supreme Court address.
The letter that had or would be sent to Roberts asserted that Stephenson was being “restrained” and “concealed” in a federal prison under a under a “fictitious name.” It further asserted that the government had assigned Stephenson an “inventory control number,” according to the complaint against Leaming.
As the letter proceeded, it painted a picture that Roberts had been part of a conspiracy with the Federal Bureau of Prisons to “evade the habeas corpus process.”
Because Stephenson was in federal custody, his communications were being monitored, according to the complaint against Leaming. In a phone call between Stephenson and Leaming, Leaming spoke about “$10m” allegedly owed to Stephenson by a public official employed by the Bureau of Prisons and suggested that “$20 million” would be sought from a prison warden.
Leaming told Stephenson that the city of Puyallup, Wash., was in receivership because of Leaming’s paperwork maneuverings, according to the complaint against Leaming. (Records show that Leaming filed liens against affecting at least two communities in Washington state, including Puyallup. Records also show that he filed a lien for more than $9 billion against a Franciscan hospital in Lakewood, Wash., and tried to put the facility in involuntary bankruptcy. At the same time, records show that Leaming also sought to put the Washington State Bar Association in involuntary bankruptcy. See this story. See this story.)
During phone conversations with Stephenson, Leaming talked about escalating his paperwork maneuverings against the courts if “they don’t straighten up soon” and the potential need to “have a little liability correspondence with Eric Holder himself.”
Eric Holder is the Attorney General of the United States.
Leaming also told Stephenson that “someone has suggested we go after body odor in the White House,” an apparent veiled reference to President Obama.
Returning to the subject of the courts, Leaming told Stephenson that he would start “working” on the chief judge of U.S. federal courts in the Western District of Washington, according to the complaint against Leaming.
Leaming, according to the complaint, also ventured that “the Rothschilds” were hiding in a “bunker in India” while controlling the central bank of Iraq, according to the complaint against Leaming.
Banking conditions in Iraq are causing the Rothschilds to lose money, and the “inner circle” is “jumping ship,” Leaming allegedly told Stephenson, “just like body odor’s inner circle in the White House.”
Leaming has been under federal surveillance by both the Tacoma Resident Agency Joint Terrorism Task Force and the Seattle Division’s Mobile Surveillance unit since August 2011, according to the complaint. Agents have observed him driving a blue Ford Crown Victoria and visiting mailing spots in Spanaway, Wash., where he lives in an apartment, according to the complaint.
In October 2011, some ASD members received an email attributed to “Keny” — a Leaming nickname — that suggested they file “county recorder” papers against federal officials involved in the ASD case that would identify the officials as “DOJ thieves.”
The email encouraged the members to send a “notary certified copy” of the filings to the home address of Chief Justice Roberts.
At least two notaries public with ties to Leaming have lost their licenses in Washington state, according to records. One of the notaries — Kathryn E. Aschlea — was associated with an enterprise known as FAN NW LTD INC.
The name of FAN NW LTD INC. appears in the criminal complaint against Leaming, and the FBI says a telephone associated with the firm was used on calls between Leaming and Stephenson.
Federal court records in the ASD case in the District of Columbia reference a “Claim by Notary Presentment/Acceptance by Kathryn E. Aschlea.” Collyer denied Aschlea leave to file on June 11, 2010.
Kathryn Aschlea and “Kenneth Wayne” are listed in Washington state as officers of FAN NW LTD INC.
President Bush observes the 2006 swearing-in ceremony of incoming Transportation Secretary Mary Peters. Peters held the cabinet post between October 2006 and January 2009. Source: Wikipedia: White House photo by Paul Morse.
UPDATED 5:42 P.M. ET (U.S.A.) Public officials involved in the AdSurfDaily Ponzi case were not the only targets of bogus liens filed by Kenneth Wayne Leaming, according to federal prosecutors in Seattle.
Leaming, 55, also filed a lien against Mary Peters, the U.S. Secretary of Transportation under President George W. Bush during his second White House term, prosecutors said.
In addition, prosecutors said Leaming filed liens against U.S. District Judge Rosemary Collyer; former U.S. Attorney Jeffrey A. Taylor; former assistant U.S. Attorney William Cowden; current assistant U.S. Attorney Vasu B. Muthyala; and Roy Dotson, a special agent of the U.S. Secret Service.
Collyer is presiding over both the civil and criminal prosecutions connected to the ASD Ponzi case in the District of Columbia. The civil case, which led to the successful forfeiture of tens of millions of dollars in the personal bank accounts of ASD President Andy Bowdoin, was brought by Taylor’s office in August 2008.
Cowden and Muthyala assisted in the prosecution against ASD-related assets, including more than $65.8 million in Bowdoin’s 10 bank accounts and more than $14 million in other bank accounts linked to Golden Panda Ad Builder, a companion autosurf.
Dotson was a key investigator in the case, which was brought in part through the efforts of a Florida-based Task Force. Bowdoin was arrested in December 2010. He is free awaiting trial in the District of Columbia.
Taylor was succeeded as U.S. Attorney by Ronald C. Machen Jr. Machen’s office was sued pro se earlier this month by ASD members Todd Disner and Dwight Owen Schweitzer of Miami. Disner, a cofounder of the Quiznos sandwich franchise, and Schweitzer, a former attorney whose license was suspended in Connecticut, asserted that prosecutors engaged in “character assassination” against Bowdoin and that the forfeiture case consisted of a “tissue of lies.” They also claimed Dotson’s affidavit that led to the seizure of Bowdoin’s assets was flawed and that 4th Amendment violations had occurred.
Disner and Schweitzer also named Rust Consulting Inc., the government-approved claims administrator in the Ponzi case, a pro se lawsuit defendant. In September, Machen joined Assistant Attorney General Lanny Breuer in announcing that the government had returned $55 million to victims of the ASD Ponzi.
Collyer ordered the forfeiture of Bowdoin’s assets in January 2010. Her rulings were upheld by the U.S. Court of Appeals. Bowdoin, 77, is using Facebook and a website known as “Andy’s Fundraising Army” to raise money for his criminal defense on charges of wire fraud, securities fraud and selling unregistered securities.
Why Peters allegedly was targeted by Leaming was not immediately clear. But court records suggest the FBI is investigating Leaming ties to a Washington state group of “sovereign citizens” known as the “County Rangers.”
Leaming was arrested on Tuesday. On Wednesday, he appeared before U.S. Magistrate Judge J. Richard Creatura in Tacoma. Creatura ordered Leaming’s detention to continue. The date of Leaming’s next court appearance was not immediately clear.
Leaming, according to prosecutors, was found Tuesday with two federal fugitives from Arkansas who were indicted in February on federal charges related to an alleged envelope-stuffing scheme. Prosecutors identified the fugitives as Timothy Shawn Donavan and Sharon Jeannette Henningsen.
Donavan and Henningsen have court histories that include declaring themselves “living breathing free” people to whom laws do not apply, according to records. Like Leaming, they are being held at the Sea Tac Federal Detention Center near Seattle.
Leaming has been charged with retaliating against a Federal judge or Federal law enforcement officer by false claim or slander of title, an obstruction of justice statute.
Among the government’s allegations against Bowdoin is that he falsely claimed to have received an important award for business acumen from President Bush in 2008. ASD members used Bush’s name in online promos, according to records.
In July 2008 — as the Secret Service and the Task Force were investigating ASD — Bowdoin threatened to sue critics, according to court filings. After the seizure of his assets, he claimed the government’s action was the work of “Satan” and compared the seizure to the 9/11 terrorist attacks, which killed nearly 3,000 people in New York, Washington and Pennsylvania.
Cowden, whose name was repeatedly misspelled as “Crowden” by pro se litigants in the forfeiture case, was derided as “Gomer Pyle” on the now-defunct, pro-ASD “Surf’s Up” forum. One ASD member opined that Cowden should be placed in a torture rack. Another said a “militia” should storm Washington. Still another issued a “prayer” that called for prosecutors to be struck dead.
ASD critics were derided as “rats,” “maggots” and “cockroaches.”
In December 2010, prosecutors linked ASD to E-Bullion, a defunct California payment processor operated by James Fayed. E-Bullion has been linked to several Ponzi schemes.
Earlier this month, Fayed was formally sentenced to death for arranging the contract slaying of his estranged wife, Pamela Fayed.
Pamela Fayed was slashed 13 times in a Greater Los Angeles parking garage in July 2008 while James Fayed sat on a bench within earshot of Pamela’s screams, according to records.
At least one ASD member used E-Bullion to send money to ASD, according to federal court records. That member — former ASD “trainer” Erma Seabaugh of Missouri — was operating a purported “religious” nonprofit in Oregon and using ASD to promote a pyramid scheme, according to records.
David R. Lewalski, the Florida man who ran a $30 million commodities Ponzi and fraud scheme known as Botfly LLC and persuaded at least one investor to pony up cash to pay for his defense, has been sentenced to 20 years in federal prison.
Elements of the Lewalski caper were reminiscent of elements of the alleged AdSurfDaily Ponzi scheme, which also operated from Florida. Vile language was directed at investigators in both cases, and Lewalski urged victims not to cooperate with authorities. One person gave Lewalski $50,000 to pay for a lawyer — after Lewalski jetted to Europe on a private Gulfstream IV a day after Florida investigators implicated him in a Ponzi scheme, according to court filings.
ASD President Andy Bowdoin also is asking his members to pony up for his defense to Ponzi charges. A number of ASD members have urged fellow members not to cooperate with authorities.
After his European junket, Lewalski eventually came back to the United States and ensconced himself in a swanky hotel suite overlooking Central Park in New York while pretending to be elsewhere, according to court filings.
The U.S. Postal Inspection Service alleged that Lewalski complained to investors he defrauded about “recent ‘Orwellian’ totalitarian tactics” employed by U.S. investigators in Ponzi scheme cases, instead of accepting accountability for his fraud.
Assistant U.S. Attorney General Lanny A. Breuer joined U.S. Attorney Robert E. O’Neill of the Middle District of Florida in making the announcement about Lewalski’s prison sentence.
In September, Breuer joined with U.S. Attorney Ronald C. Machen Jr. of the District of Columbia in announcing that $55 million had been returned to ASD victims. The U.S. Secret Service seized the money in August 2008.
Bowdoin called investigators “Satan.” Other ASD members called them “Nazis” and “goons.”
In the Botfly case, Lewalski described a victims’ advocate a “c[$%!]” and a “Nazi,” according to court filings. In one rant, Lewalski allegedly said, “So f[$%!] her what a bitch.”
Court documents also allude to a woman who allegedly was called an “FDLE chick” and described by Lewalski as “nuts” and a “bitch.”
FDLE is the acronym of the Florida Department of Law Enforcement, which assisted in the state and federal probes of Lewalski.
BULLETIN: The Los Angeles Times is reporting (link below) that James Fayed has been formally sentenced to the death penalty for arranging the brutal slashing death of Pamela Fayed, his estranged wife and a potential witness against him.
James Fayed, 48, is an emerging figure in the AdSurfDaily Ponzi case. Federal prosecutors in the District of Columbia said in December 2010 that E-Bullion was used to forward money to ASD, which the U.S. Secret Service described as a massive international Ponzi scheme that used multiple payment venues to amass at least $110 million.
Erma Seabaugh, an ASD member who used E-Bullion, was an ASD trainer, according to the government. Records in Oregon show that Seabaugh, whose assets were seized in the ASD case, was operating a purported “religious” nonprofit firm from Missouri. The purported religious entity was known as Carpe Diem.
Seabaugh’s assets were seized in February 2009, during a period of time in which the AdViewGlobal (AVG) autosurf was launching and ASD President Andy Bowdoin was morphing into a pro-se litigant and trying to undo his January 2009 decision to submit to the forfeiture of $65.8 million seized by the Secret Service from 10 Bowdoin bank accounts in August 2008. AVG had close ASD ties, according to members.
E-Bullion has been linked to multiple Ponzi schemes, including Legisi, Gold Quest International and FEDI. The FEDI scheme has been linked to Abdul Tawala Ibn Ali Alishtari, also known as Michael Mixon. Ali Alishtari pleaded guilty in 2009 to financing terrorism and fleecing investors in the FEDI scheme.
FEDI participants could expect to receive payouts deemed “rebates,” according to documents obtained by the Ontario Securities Commission from a FEDI promoter who simultaneously was promoting a mysterious business known as the “Alpha Project.” ASD also used the word “rebates” to describe its payouts, according to court filings.
Ali Alishtari, like ASD’s Bowdoin, contributed money to Republican causes and heralded a purported GOP award for his business acumen, according to documents.
Seabaugh used ASD’s advertising “rotator” to promote an apparent “pyramid scheme” known as StreamlineGold.net, according to federal court filings. Like ASD, Legisi and GoldQuest International, StreamlineGold.net was promoted on Ponzi boards such as TalkGold and MoneyMakerGroup.
Pamela Fayed was stabbed 13 times in a Greater Los Angeles parking garage on July 28, 2008. The Times reported today that James Fayed was seated on a nearby park bench “texting” on his cell phone while his alleged accomplices carried out the slaying.
Los Angeles Superior Court Judge Kathleen Kennedy described James Fayed as “one cold, calculating human being,” according to the Times. Kennedy formally imposed the death sentence yesterday. The jury that convicted James Fayed in May recommended the sentence.
From the Times (italics added):
The only person within earshot who didn’t react was the victim’s estranged husband who was sitting on a nearby bench “texting on his cellphone, like he doesn’t have a care in the world,” Los Angeles County Superior Court Judge Kathleen Kennedy said Thursday, moments before sentencing James Fayed to death for the contract killing.
UPDATED 11:27 P.M. ET (U.S.A.) In May, an email attributed to AdSurfDaily member Todd Disner declared, “Let the games begin!” The remark was in the context of a lawsuit Disner and fellow ASD member Dwight Owen Schweitzer intended to file against the United States once ASD members chipped in enough money to fund the complaint.
Those games apparently have begun with the filing today of a pro se “complaint for declaratory relief” by Disner and Schweitzer in the Southern District of Florida against the United States and Rust Consulting Inc., the government-approved claims administrator in the civil-forfeiture portion of the ASD Ponzi case.
The lawsuit asks a federal judge in Florida to find that the seizure of assets and business records belonging to Disner and Schweitzer was “illegal and void” and demands their return. It also asks the judge to order Rust to “disclose all information in its possession or available to it pertaining to” Disner and Schweitzer.
Among the claims in the lawsuit are that undercover agents from a U.S. Secret Service/IRS Task Force who joined ASD prior to the seizure of tens of millions of dollars from the bank accounts of ASD President Andy Bowdoin violated ASD’s Terms of Service and had a duty to report their alleged TOS violations, including the insertion of an agent’s undercover “MySpace” page in ASD’s advertising rotator, to the company.
Rust is headquartered in Minnesota. Although the complaint named the United States a defendant alongside Rust, the address listed for the United States by Disner and Schweitzer was the address of the office of U.S. Attorney Ronald C. Machen Jr. in the District of Columbia.
Disner, an unsuccessful pro se litigant in the ASD civil case brought by the government, is a co-founder of the Quiznos sandwich franchise. He lives in Miami. Schweitzer, a former attorney, also lives in Miami. The government’s case against ASD-related assets was filed in the District of Columbia in August 2008. Disner was denied standing in the District of Columbia on Aug. 31, 2009, more than two years ago.
Among other things, Disner and Schweitzer claim their private records as contained in ASD’s database were confiscated illegally by the government. They also claimed an affidavit filed in the forfeiture case by the U.S. Secret Service was flawed and that the government hired Rust to implement a remissions program “designed to collect evidence and coerced admissions from the plaintiffs to be used by the government” at the criminal trial of ASD President Andy Bowdoin.
Federal prosecutors in the District of Columbia — the venue in which both the criminal and the civil cases against Bowdoin and ASD-connected assets were filed — had a different take.
“The funds in this case were seized under properly issued judicial warrants,” Machen’s office said today. “Beyond that, the U.S. Attorney’s Office has no comment on the matter at this time. ”
Puzzlingly, the complaint filed by Disner and Schweitzer and recorded on the docket of U.S. District Judge Cecilia M. Altonaga today makes the assertion that “To date the plaintiffs are unaware of any remission payments having been made and specifically the plaintiffs were unable to get the information required for their submissions, all of which are still in the possession of the government.”
On Sept. 22 — more than six weeks ago — the PP Blog reported that thousands of ASD members who filed approved remissions claims would receive back 100 cents on the dollar. Members reported that the money was deposited electronically into their bank accounts beginning on Sept. 23. On Sept. 26, the government announced that $55 million was being returned, with the Secret Service describing ASD as a “criminal enterprise” and the Department of Justice describing the ASD scheme as “insidious.”
In a Sept. 28 email, even Bowdoin acknowledged that he was aware the government had returned money to members through the remissions process. Among other things, the ASD patriarch claimed the government had forced members to lie to receive compensation.
Disner and Schweitzer not only claim in their complaint that they are “unaware” of any money being returned, they also claim the remissions program was designed to “prevent, hamper and forestall the return” of funds.
Meanwhile, Disner and Schweitzer claim that ASD was a profitable venture, in stark contrast to assertions by the government that ASD was insolvent because it created a liability of $1.25 for each dollar it took in through the sale of purported “advertising.”
Disner and Schweitzer also took issue with government agents joining ASD and allegedly violating the ASD membership agreement, including an undercover agent who placed his undercover “MySpace” page in ASD’s advertising rotator. In August 2008, the government alleged that “ASD did not require, or even verify that the agent “had any product or service to sell.”
Had the agents “lived up to the obligations they took on by becoming members of ASD they should have reported their own violations of the ASD terms of service with the result that the sites they foisted upon ASD would have been removed and the benefits to them as advertisers’ would be forfeited as the ASD rules mandated,” Disner and Schweitzer argued.
Captured In Hong Kong: Former TV analyst and accused Ponzi schemer Brian Kim.
UPDATE: On the lam for 10 months, accused Ponzi-scheme fugitive Brian Kim was arrested last month and returned to the United States from Kong Kong, authorities said yesterday.
Kim, 36, is a former analyst who appeared as a CNBC commentator on issues such as the Dubai debt crisis and so-called “dark pools.” Investigators said he was involved in at least two fraud schemes while holding forth on TV. Kim high-tailed it out of the United States before he could be tried in early January on state charges of stealing $430,000 from Christadora House, the New York condominium complex at which he resided, authorities said.
Even as the theft matter was being investigated and prosecuted, Kim was at the helm of a separate, $6 million Ponzi scheme, said Manhattan District Attorney Cyrus Vance. The CFTC also charged Kim in the alleged Ponzi caper, which operated through a firm known as Liquid Capital Management LLC.
Vance next brought a state grand-jury indictment against Kim for bail-jumping, and federal prosecutors charged him with passport fraud.
Authorities did not say when Kim was caught in Hong Kong. Vance said the U.S. Marshals Service, the U.S. State Department, the U.S. Consulate in Hong Kong and Chinese officials cooperated in bringing Kim back to the United States to face justice.
In April, a federal judge ordered Kim to pay restitution and civil penalties of more than $12.5 million in the case brought by the CFTC.
Like accused Ponzi schemer Andy Bowdoin of AdSurfDaily, Kim will face a civil judgment while battling criminal Ponzi charges.
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.
