Kevin L. Perkins of the FBI tells the Senate Judiciary Committee that the agency is investigating 1,500 cases of securities fraud and that 314 of them involve HYIP fraud in various forms.
And to think that only months ago — in February 2009 — various members of AdSurfDaily wrote to the Senate Judiciary Committee trying to elicit support for Ponzi schemes. The letter-writing campaign was spearheaded by “Professor” Patrick Moriarty and pushed by the Pro-AdSurfDaily Surf’s Up forum.
But now the FBI has told the committee, led by Sen. Patrick Leahy, D.-Vermont, that it has registered a 105 percent increase in HYIP fraud and opened 314 investigations in 2009, up from 154 in 2008.
“[M]any [had] losses exceeding $100 million,” said Kevin L. Perkins, assistant director of the FBI’s Criminal Investigations Division.
Perkins said the probes cover the gamut — from the massive Ponzi scheme fraud of Bernard Madoff to smaller variations of the Ponzi scheme.
“These schemes use money collected from new victims, rather than profits from an underlying business venture, to pay the high rates of return promised to earlier investors,” Perkins told the Committee. “This arrangement gives investors the impression there is a legitimate, money-making enterprise behind the fraudster’s story; but in reality, unwitting investors are the only source of funding.”
During his testimony, Perkins also referenced “prime-bank schemes” in which victims are told that “certain financial instruments such as notes, letters of credit, debentures, or guarantees have been issued by well-known institutions such as the World Bank, and offer a risk-free opportunity with high rates of return.”
In August 2008, in a forfeiture complaint against the assets of AdSurfDaily and Golden Panda Ad Builder, federal prosecutors revealed that Golden Panda President Clarence Busby had been sued civilly by the SEC in the 1990s after he was implicated in three prime-bank schemes. At the same time, prosecutors revealed ASD President Andy Bowdoin had been arrested for felony securities fraud in Alabama during the same decade.
Despite the Ponzi allegations against ASD and the histories of Bowdoin and Busby, Surf’s Up urged the Judiciary Committee to investigate the prosecutors who brought the forfeiture cases against ASD and Golden Panda in August 2008.
“We each need to explain [to Leahy] how thousands of innocent Americans have suffered and continue to suffer because of these incredible and despicable acts” by prosecutors, Surf’s Up urged members.
Law enforcement is investigating a stunning number of securities-fraud cases, the FBI revealed.
“The FBI continues to aggressively investigate this criminal threat, and currently has more than 1,500 related securities fraud investigations,” Perkins said.
UPDATED 7:19 P.M. ET (U.S.A.) A recording posted on a public website of a Feb. 12 conference call by the AdViewGlobal (AVG) autosurf suggests an unnamed male member of the surf qualified for a $10,000 cashout within days of the company’s formal launch.
The recording leads to questions about how a participant could qualify for a large payout so soon after launch and whether others also could have benefited from early cashouts funded by members in Ponzi scheme fashion. AVG appears to have had virtually no income streams beyond fees paid by members when it launched earlier in the month.
The Feb. 12 call featured a giveaway of money-earning AVG page impressions to both members and their sponsors. One of the bonus-winning sponsors was identified as David Meade, whose bonus-winning enrollee came on the line and jokingly asked whether the bonus he received qualified for an additional matching bonus of 50 percent.
AVG relentlessly pitched bonuses to enrollees and their sponsors before announcing in June that it was suspending cashouts, making an 80/20 program mandatory and exercising its version of a “rebates aren’t guaranteed” clause.
Another sponsor who qualified for a bonus because he had enrolled a member whose name was called for a bonus was identified as Larry Alford, the husband of Barb Alford, a Moderator at the Pro-AdSurfDaily Surf’s Up forum. Yet another member whose name was called for a bonus was Joey Shiver, the brother of Judy Harris, identified during the summer as one of AVG’s owners.
Meanwhile, the call highlighted AVG’s purported “offshore” location in Uruguay, stressing that the company planned to fly high-quality servers to Uruguay on a date uncertain after the call was held.
Web records show AVG’s servers resolved to Panama, suggesting the company never completed installation of servers in Uruguay. AVG had been collecting money for weeks at the time of the Feb. 12 call, which leads to questions about whether the company was selling unregistered securities from inside the United States or selling unregistered securities illegally to U.S. residents from offshore servers, all while engaging in wire fraud and acts of money-laundering.
The conference call, hosted by Terralynn Hoy, a Moderator at both the Pro-AdSurfDaily Surf’s Up forum and a ning.com forum set up to promote AVG, did not disclose how the member amassed a large sum in only days and qualified for a cashout. But another participant in the call announced that the man excitedly expected to receive a check for $10,000.
Neither Hoy nor any other AVG official or representative who participated in the call referenced a racketeering lawsuit that had been filed less than a month earlier against ASD President Andy Bowdoin and ASD attorney Robert Garner. At the same time, no official or representative in the call referenced a second forfeiture complaint that had been filed against ASD-connected assets in December 2008, a month after Surf’s Up received ASD’s official endorsement.
In August 2008, prosecutors accused both ASD and Golden Panda Ad Builder of not disclosing information members needed to make informed decisions about joining the companies. The allegations were spelled out in a forfeiture complaint formally filed Aug. 5, 2008.
Among the assertions were that Bowdoin did not disclose his arrest in a felony securities case in the 1990s, and that Golden Panda did not immediately disclose an SEC action against its president, Clarence Busby, in the 1990s. ASD members later said Bowdoin was the silent head of AVG, which began to solicit money in December 2008, a month after a major court ruling went against ASD.
News about the December forfeiture complaint, which painted a jaw-dropping picture of insider dealings, special favors, a “silent†ASD partner, people getting paid large sums for doing virtually nothing and a claim that Russian hackers stole more than $1 million, broke on Jan. 15.
The AVG conference call, dubbed the “first” official call, was conducted Feb. 12, about 10 days after AVG’s formal launch and within 30 days of the revelation that the government had filed the December forfeiture complaint and identified members of Bowdoin’s family as beneficiaries of ASD’s illegal conduct.
Judy Harris was among those the government identified in the filing, as were her husband, George Harris, and his mother, Edna Faye Bowdoin. Edna Faye Bowdoin is Andy Bowdoin’s wife.
Two weeks after the Feb. 12 conference call, on Feb. 26, AVG announced it was shifting to a “private association” structure. One day prior, on Feb. 25, Bowdoin signed the first of several sworn court documents as a pro se litigant in the ASD case, attempting to set aside the forfeiture of tens of millions of dollars and reverse a decision he made in January to surrender his claims to the money, which had been seized by the government in August 2008 from his 10 bank accounts.
Less than a month after Bowdoin signed the court document, AVG announced the resignation of Chief Executive Officer Gary Talbert, a former ASD executive. On March 23, AVG announced its bank account had been suspended, blaming the suspension on members who wired too many transactions in excess of $9,500.
Talbert was a participant in the Feb. 12 conference call. He was introduced by Hoy. Talbert, in turn, passed the the call back to Hoy, who then introduced a person identified as marketing consultant Kathy Robertson. Robertson made the claim about the $10,000 check.
“I just talked to a friend tonight,” Robertson said in the call. “He’s cashing out and he’s gonna get a $10,000 check into his bank account. He’s more excited than he’s ever been.”
Robertson urged AVG members to take notes of her remarks, according to the recording.
“Many of you have wondered, ‘Are we a United States’ business or are we another country[‘s] business?’” Robertson said in the recording. “I gotta tell you we’re based in Uruguay. We’re definitely an offshore business, and we’ll be moving very robust servers — we’ll actually be flying them on a plane to land in Uruguay. So, even the servers that host all of the websites are going to be offshore, so go ahead and write that down as a note. We are truly an offshore business.”
Robertson said AVG members should “feel secure” in the knowledge the company was operating offshore. She did not explain how the purported offshore venue made AVG’s venture, which targeted U.S. residents and former ASD members, legal. Robertson acknowledged in the recording that AVG had gotten off to a rocky start and that some members who could not fund accounts had had a disappointing experience.
But she urged members to look to the future and see a well-honed enterprise capable of producing a seamless experience for huge numbers of participants.
Federal prosecutors said ASD was operating a $100 million Ponzi scheme from inside the United States, while engaging in the sale of unregistered securities to U.S. residents and committing acts of wire fraud and money-laundering.
Later in the call, during the page-impression giveaway, Meade came on the line to accept his bonus for sponsoring a member whose name was called for a bonus.
“Thanks a million. Appreciate it,” Meade said.
Less than two weeks after the Feb. 12 conference call, reports circulated among ASD members that the U.S. Secret Service had seized the bank accounts of unidentified ASD members. AVG announced Feb. 26 that it was switching to a “private association” structure after consulting with a company known as Pro Advocate Group.
Pro Advocate Group is associated with Karl Dahlstrom, a convicted felon who served time in federal prison in a case involving securities fraud.
UPDATED 5:24 P.M. ET (U.S.A.) Is the “joe” who posted here before being blocked for showcasing an utter lack of restraint the same “joe” who pitched four HYIPs on the Pro-AdSurfDaily Surf’s Up forum two days ago?
We don’t know.
We do know, however, that both “joes” have pushed Ponzi programs and displayed an astonishing and unsettling amount of gumption. The Surf’s Up “joe,” for instance, used egg-themed, .info URLs that redirected to HYIPs, despite the fact state or federal prosecutors have brought racketeering charges against three alleged Ponzi schemes this week alone and ASD President Andy Bowdoin and ASD attorney Robert Garner have been sued by members for racketeering.
Meanwhile, our “joe” — who as recently as three days ago still was pelting us with nuisance communications under multiple identities even after his access to posting here was blocked in September and he was warned publicly to cease — insisted we’d restore his posting privileges or else. He then embarked on a smear campaign against this Blog on Scam.com, using multiple posting identities there, too.
Scam.com banned our “joe,” who has purported to have been a Prisoner of War in Vietnam, to have served harder time than the late Mafia figure John Gotti — and also to have been a graduate of MIT, whose curriculum is heavy on mathematics.
Our “joe” hurt himself with the MIT claim. It’s highly unlikely that any MIT graduate could leave the campus without a core understanding of the math of Ponzi schemes. In the unlikely event “joe” did graduate from MIT, he’d be hard-pressed to explain to prosecutors he didn’t understand he was promoting illegal programs such as AdViewGlobal and AdVentures4U.
He’d be equally hard-pressed to explain to POWs how pushing Ponzi schemes, which nowadays are getting widespread, constant publicity for the massive damage they cause, was a noble pursuit.
Our “joe’s” most recent effort to stalk this Blog occurred Dec. 2, under yet another user identity. He used the wires to tell us that he’d be paying attention to our reports about the notorious cyberstalker “unclefesta26,” who is pillorying this Blog on YouTube and also stalking people who post here by publishing videos about them on YouTube.
“By the way I can make excellent videos and have,” our “joe” suggestively told us Wednesday over the Internet. “Ole Festa doesn’t hold a candle to me.” Our “joe” called himself “Jake” in Wednesday’s reminder he was stalking us.
“joe” has sent us dozens of illegitimate communications designed to harass since September. “joe leaves when joe wants to leave,†he said as the U.S. summer was beginning to transition into fall.
â€You’ll be scrambling to put out fires,” our “joe” promised.
“joe” no more has the right to do what he tries to do here than he does, say, to keep messaging his hometown newspaper with harassing communications (or any business) after being warned to cease and desist.
Another thing we noticed about our “joe” during the summer was that he was sensitive to the word “racketeering” and the acronym RICO. He railed against this Blog in June, after it reported that the AdViewGlobal (AVG) autosurf had been mentioned in a racketeering lawsuit against Andy Bowdoin of AdSurfDaily. Indeed, some ASD members sued Bowdoin for racketeering. (See the comments in the thread for the link above.)
Federal prosecutors later made a veiled reference to AVG in court filings in the ASD forfeiture case. Both the August 2008 and December 2008 forfeiture filings against ASD cite a racketeering statute in the body of the complaints. Regardless, plenty of ASD members went on to promote AVG, which formally launched in February 2009 — after two racketeering mentions in forfeiture complaints and after Bowdoin was sued by members for racketeering.
Jaws dropped among people who pay attention to such things. The purveyors of AVG might as well have taken out an ad in the New York Times that read, “Yes, we are racketeers — and here’s how you, too, can harvest hefty profits from our racketeering scheme, especially if you belong to a Christian denomination!!”
It’s clear that law-enforcement agencies with the power of arrest — the U.S. Secret Service, the FBI and state-level strike forces led by attorneys general and local prosecutors and police officers, for example — have had it up to their ears with Ponzi and affinity-fraud schemes and are treating purveyors like mobsters. They’re using both state and federal racketeering statutes to bring down the schemes.
It’s also clear that the SEC, which does not have the power of arrest but can sue Ponzi scheme operators back to the Stone Age and works proactively with agencies that do have the power of arrest — also has had its fill of Ponzi and affinity-fraud schemes.
How could it not? There now are allegations that Trevor Cook, implicated with Christian radio host Pat Kiley in an alleged $190 million Ponzi scheme in Minnesota, bought a private island in Canada with his loot and a submarine to access the island. Cook reportedly told his investors he discovered after purchasing the submersible craft on eBay that the waters surrounding the island were too dark to navigate by submarine, but that he planned to move his two-passenger sub to Panama, a country be believed to have clear waters.
You can’t make this stuff up. It is an embarrassment to free enterprise, an embarrassment to the United States and the rest of the world. The word “Ponzi” has become positively nuclear as more and more senior citizens in their 80s have been fleeced out of their retirements by schemers and go to bed at night wondering how they’ll ever make ends meet.
Basically, the U.S. law-enforcement and regulatory communities have been responding to the schemers’ crimes with nukes. Rarely a day passes without a detonation.
Despite major undertakings by U.S. law-enforcement and regulatory entities such as the SEC, CFTC and state-level attorneys general and securities regulators to destroy Ponzi schemes — and despite racketeering, wire-fraud and money-laundering prosecutions — the “joes” of the Ponzi world apparently continue to believe there is something honorable about banking Ponzi profits earned while banks are failing in the United States, the foreclosure rate is surging in certain areas of the country, people of faith are being fleeced in Ponzi schemes, deaf people are being targeted in Ponzi schemes and 90-year-old men and women are looking for jobs to keep a roof over their heads.
We don’t know if our “joe” is Surf’s Up’s “joe” — but we do know that “joe” is all about greed and the wanton disregard of the rules of a civilized society.
Fact is, we did scramble to put out the fires promised by our “joe.” He did affect our ability to publish and asserted a nonexistent right to harass.
“What I’m saying is get ready for the return of joe and then you can block all of these people from your site,†our “joe” said.
He suggested that, although he is Uncle Festa’s superior in video production, he won’t use YouTube to harass this Blog or its readers.
It’s our “joe’s” way: He dangles a suggestion, and then wraps it in words designed to create plausible deniability. It escapes him that the words alone constitute a crime because they are designed to chill recipients and put them in the position of scrambling to protect their property.
That’s exactly what racketeers do. They suggest. They chill. They let you know there are consequences for not playing ball with them.
“It would be fun [to make videos] but I don’t hate you like [Uncle Festa] does,” our “joe” said three days ago. “[I]n fact i don’t hate you at all. I’ll bet everyone misses me.”
In a final bit of intrigue, it’s possible that the “joe” on Surf’s Up comes from Erie, Pa. That would be ironic indeed if it proved to be true. Erie is the birthplace of Harry Markopolos, the mathematician and financial analyst who exposed the $65 billion Ponzi scheme of Bernard Madoff.
Erie has some fine high schools. Harry Markopolos was a graduate of one of them and went on to become a world-class student of math and authority on Ponzi schemes. The Surf’s Up ” joe,” on the other hand, perhaps left Erie schools and went on to become a cell-phone trafficker facing a $5 million judgment — and a purveyor of Ponzi schemes who said it was important not to have all of your Ponzi eggs in one Ponzi basket, that you should branch out into other Ponzi schemes.
“ALL MY EGGS ARE NOT IN ONE BASKET,” the Surf’s Up ‘joe said. “I MAKE $2000.00 A WEEK.â€
And the Surf’s Up “joe” said it after Erie’s Harry Markopolos made the phrase “Ponzi scheme” impossible to ignore and kick-started the nuclear responses of the state and federal governments to those who would sell financial peril so they could own a Rolls-Royce or a submarine — or even make $2,000 a week on the Ponzi misery of others.
UPDATED 2:22 P.M. ET (U.S.A.) A poster using the handle “joe” at the Pro-AdSurfDaily Surf’s Up forum advertised four egg-themed domain names that redirected to four high-yield investment programs yesterday, saying in all-caps, “ALL MY EGGS ARE NOT IN ONE BASKET.
“I MAKE $2000.00 A WEEK.”
It is unclear if the poster has a license to sell securities or act as an investment dealer or broker. The domains to which the .info domains redirected were for programs titled “Gold Nugget Invest” (7.5 percent a week); “Genius Funds” (6.5 percent a week); “Cash Tanker” (2 percent a day); and “Saza Investments” (9 percent a week).
The domains — all of which used .info extensions, the word “egg” and a numeral in their URLs — are registered to a man with the last name of “Stablein” in Erie, Pa. The spelling of the owner’s first name in domain-registration data was “Jeffrery.”
An Erie man named “Jeffrey Stablein” — note the slightly different spelling of the first name from the domain-registration data — was sued in U.S. District Court for the Western District of Pennsylvania in June and identified by attorneys as a co-conspirator in a scheme to defraud TracFone Wireless Inc., a prepaid cell-phone provider.
The Erie street address associated with Stablein in the TracFone lawsuit is the same address listed in registration data for the egg-themed .info domains. Stablein was enjoined by a federal judge from a practice TracFone attorneys described as “cell-phone trafficking.”
Cell-phone trafficking involves the “unauthorized resale and hacking” of prepaid mobile phones, TracFone attorneys said. Future violations by Stablein could result in a $5 million judgment being enforced against Stablein, according to court filings.
Attorneys described how the scheme works after a buyer acquires prepaid phones in volume.
“The phones are then passed to middlemen who alter or remove the prepaid software and resell the altered phones as new, often in counterfeit packaging, at a significant profit to unsuspecting customers domestically and abroad in Latin America, Asia and the Middle East,” according to attorneys James B. Baldinger and Steven J. Brodie of the Carlton Fields law firm.
In September, U.S. District Judge Sean J. McLaughlin handed down a stipulated judgment against Stablein and his Erie-based firm, 1st Premier Communications, banning them “from continuing to engage in the bulk purchase, sale, or unlocking/reflashing of TracFone’s wireless phones,” the attorneys said in a news release.
TracFone aggressively litigates against cell-phone traffickers, according to the company.
In 2008, Muhammad Mubashir, 28, of Sugar Land, Tex., was sentenced to 57 months in federal prison for trafficking in cell phones.
“TracFone will continue to aggressively pursue those who participate in prepaid mobile phone trafficking because it undermines our ability to provide affordable wireless phone service to our customers,†said F.J. Pollak, president and CEO of TracFone Wireless, in a statement.
The U.S. Customs Service seized a shipment of 1,300 TracFones that Mubashir was exporting to a known trafficker in Hong Kong, the company said. TracFone obtained documents proving Mubashir sold approximately 9,000 TracFones, representing more than $1 million in losses to the company.
“Schemes like those organized by Mubashir exist across the country and involve groups of ‘runners’ who purchase prepaid mobile phones from major retail outlets,” TracFone said. “The phones are then passed to middlemen who alter or remove the prepaid software and resell the altered phones as ‘new,’ often in counterfeit packaging, at a significant profit to unsuspecting customers domestically and abroad in Latin America, Asia and the Middle East.”
Some Surf’s Up posters criticized the post by “joe,” saying it was in poor taste given the serious allegations against AdSurfDaily. Tens of millions of dollars were seized from ASD President Andy Bowdoin in August 2008, amid allegations of selling unregistered securities and operating a $100 million Ponzi scheme.
Despite the allegations, some Surf’s Up posters continued to pitch autosurfs and HYIP programs, often using phrases such as “offshore” or “I got paid” as evidence of legitimacy.
One Surf’s Up poster agreed with “joe” that the programs he advertised by using the egg-themed URLs that redirected to HYIP sites were excellent.
“Your intentions are good but you are dead wrong about those particular four programs!” a Surf’s Up member exclaimed in a post directed at a member who had been critical of “joe’s” post advertising the HYIP programs.
“I also make a lot of money from those four and your remarks tell me you don’t know anything about them…..they are very reputable [companies] who have been around for years….and the money is NOT made from ‘new’ people’s money….google them and look at various forums and see what others have to say about them….I don’t even know Joe, but I can vouch for the programs!”
The government of Belize issued a warning Nov. 12 about the Gold Nugget Invest HYIP advertised by “joe” on Surf’s Up.
Surf’s Up eventually deleted “joe’s” egg-themed HYIP thread.
It is not clear if “joe” is Jeffrey Stablein, but the stipulated judgment entry in the TracFone case includes Stablein’s signature and the same address used in the domain-registration data for the egg-themed HYIP domains.
Read a document that shows that a Stablein street address in the lawsuit is the same Erie address used in the domain registration data for the egg-themed HYIP domains.
A year ago yesterday these words appeared on AdSurfDaily’s Breaking News site:
“All ASD Members are encouraged to join the ASD Members Advocate forum. The ASD Members Advocate forum should be your source for up-to-the-minute opinions and commentaries about ASD. We encourage you to join and get involved. Log on to http://asdmembers.ning.com/
“Surf’s Up, Baby!”
At about the same time, the AdViewGlobal (AVG) autosurf was preparing to set up shop — purportedly from Uruguay. The announcement by ASD that it had endorsed Surf’s Up occurred eight days after U.S. District Judge Rosemary Collyer issued a devastating ruling that ASD had not demonstrated it was a lawful business and not a Ponzi scheme that had gathered tens of millions of dollars from participants, placing the money in ASD President Andy Bowdoin’s personal bank accounts.
Some of the Surf’s Up Mods went on to start a forum for AVG. That forum went missing during the summer of 2009, after AVG announced it was suspending cashouts and exercising its version of a “rebates aren’t guaranteed” clause. At first AVG, which had promoted a series of 200-percent, matching-bonus offers virtually nonstop in 2009, blamed its lack of cash on the greed of members.
It later backed away from that position, saying it had been a victim of a $2.7 million theft. George and Judy Harris were AVG’s purported owners. George Harris is Bowdoin’s stepson. Bowdoin identified Harris as the head of ASD’s “real estate division” at an ASD rally in Miami on July 12, 2008. The company reportedly gathered millions of dollars at the rally.
Less than three weeks later, the U.S. Secret Service seized 10 Bowdoin bank accounts containing a total of about $65.8 million, according to court filings. Money from two of Bowdoin’s accounts was used to start a new account at a separate bank, and more than $157,000 of the opening deposit was used to pay off the mortgage on the Tallahassee home shared by George and Judy Harris, according to federal prosecutors.
Prosecutors made the announcement in a forfeiture complaint filed Dec. 19, 2008, exactly one month after Collyer’s November ruling went against ASD. Regardless, AVG launched in February 2009, in the wake of two forfeiture complaints and the filing of a racketeering lawsuit against Bowdoin.
AVG spent part of the month of December 2008 gathering money from prospects and all of the month of January 2009. By March 20, 2009, AVG was announcing its bank account had been suspended because too many members had wired transactions in excess of $9,500.
At the same time, AVG also announced the resignation of Gary Talbert, its chief executive officer. In January, AVG said it had no connection to ASD, despite the fact Talbert had been an executive at ASD and filed sworn court filings in the August 2008 forfeiture case against ASD.
Even as AVG was making its series of announcements about bad financial news, promoter Shad Foss sent out an email claiming that $5,000 spent on ASD turned into $15,000 “instantly!” according to recipients of the email.
In May 2009 — on the same day the Obama administration announced a crackdown on offshore financial fraud — AVG announced it had found a new company to facilitate offshore wire transfers. The surf provided members detailed wiring instructions. Three days later, the company AVG described as a facilitator of the wire transfers issued a public denial that it had any business relationship with AVG.
AVG never addressed the denial, choosing instead to say it had removed the new wire facility it had just announced because of a breakdown in negotiations. By June 25, AVG was announcing the suspension of cashouts. The AVG forum set up by the Surf’s Up Mods then went dark, as did a forum set up by AVG itself.
AVG threatened to sue members who spoke out about the firm, saying its communications were protected by copyright laws. The surf also threatened forum members that it would contact their ISPs and file abuse reports for questioning AVG in public.
Both Surf’s Up and the AVG forum operated by some of its Mods championed the pro se pleadings of Curtis Richmond in the ASD case. Richmond was convicted of contempt of court for harassing federal judges in a separate case, and was among a number of RICO defendants in a separate lawsuit ordered to pay more than $108,000 in damages and costs for engaging in racketeering and mail fraud by nuisancing public employees with vexatious lawsuits.
Surf’s Up has a history of deleting posts from members who attempt to raise the issue of AVG. The forum’s official explanation is that it is an ASD forum, not an AVG forum, even though its Mods started the AVG forum. Some Surf’s Up members said they joined AVG because of representations made by the Mods.
A number of Surf’s Up members participated in letter-writing campaigns on Bowdoin’s behalf. Surf’s Up sent an email to members in February 2009, speaking approvingly of the campaigns.
The email endorsed a mail campaign led by “Professor” Patrick Moriarty. One month later, Moriarty was indicted on tax-fraud charges in a separate case. Research showed that he once started a nonprofit organization for a Missouri man accused of murdering a woman in cold blood and shooting a police officer four times.
Dozens of Surf’s Up members congratulated Bowdoin in March 2009, after the forum published a letter from Bowdoin. The letter said Bowdoin was reentering the ASD case as a pro se litigant, even though he had given up his claims to tens of millions of dollars in January, assuring Collyer and the prosecutors that he never intended ever to reassert the claims.
In April 2009, in their final response to a series of pro se motions from Bowdoin to reenter the case, prosecutors revealed he had signed a proffer letter in the case prior to submitting to the forfeiture in January. Bowdoin, prosecutors said, had admitted ASD was operating illegally at the time of the August 2008 seizure and that the company made up numbers in a bid to keep new money flowing into the firm.
In the fall of 2008 and thereafter, Surf’s Up perpetuated a myth that the government had admitted privately that ASD was not a Ponzi scheme. The claim, which was cited on both the forum and in emails, sustained itself even through the summer of 2009.
Even after the government filed a second forfeiture complaint in December 2008 that accused ASD of operating a Ponzi scheme, Surf’s Up and some of its members continued to insist that prosecutors had said ASD was not a Ponzi scheme and were filing reckless motions in a bid to save face.
Surf’s Up has not sought to dispel the myth — and a year into its tenure as a Bowdoin-endorsed blather shop, members have raised questions about why it is improper to discuss AdViewGlobal.
Will the August 2008 forfeiture case against $65.8 million in the personal bank accounts of AdSurfDaily President Andy Bowdoin end before Christmas?
A federal judge suggested today that it might.
Bowdoin, 74, knew what he was doing when he submitted in January 2009 to the forfeiture of the cash and “knowingly and voluntarily” agreed never again to raise the claims, Judge Rosemary Collyer said in an order today.
Collyer added that the time to file claims has expired, thus agreeing
Andy Bowdoin
with an argument advanced by federal prosecutors earlier this month. But Collyer today left the door open for 30 more days before ordering the final forfeiture of the money to the government, issuing an order that any “potential claimant(s)” must “show cause in writing” before Dec. 20 why she should not grant the final forfeiture.
Earlier this month Collyer denied a bid by Bowdoin that began in February with his emergence as a pro se litigant to reassert claims to the money. Prosecutors said Bowdoin’s acts — and acts by dozens of other ASD members who had attempted to intervene in the case — were delaying the implementation of a restitution program for victims of the alleged ASD wire-fraud, money-laundering, securities and Ponzi scheme.
Collyer has denied dozens of bids by ASD members to intervene for money in the case, saying they had no standing and no “cognizable interest” because the money had belonged to Bowdoin alone at the time of its seizure.
On Nov. 10 alone, Collyer denied 13 such bids to intervene. All were filed by ASD members who shared a pro se litigation template. The judge repeatedly denied pro se attempts to intervene, denying the bids en masse in July, August, September and November. More than 70 such motions were filed in the case, dating back to February 2009.
Curtis Richmond, a California man, was one of the pro se litigants. Records show Richmond was a member of a Utah “Indian” tribe a federal judge in a separate case last year ruled a “complete sham” that tried to extort money from public officials to gain a favorable litigation result.
Richmond was hailed a “hero” on the pro-ASD Surf’s Up forum, even as thousands of ASD members were waiting to gain a share of a restitution pool the government is setting up for ASD victims.
Even though Andy Bowdoin and his family knew in January 2009 that the government intended to seize the Tallahassee home of his stepson George Harris and an $800,000 building purchased with cash in ASD’s home city of Quincy, Fla., the AdViewGlobal (AVG) autosurf proceeded with its launch in February 2009, according to an analysis of web records and new court filings.
Although a “Proof of Service” filed by federal prosecutors yesterday did not mention AVG, other records say that Bowdoin was given “direct notice” of a second forfeiture complaint that had been filed in December 2008 against ASD-connected assets. The initial forfeiture complaint against ASD was filed in August 2008.
Yesterday’s filing by the prosecution showed that the Harris home and ASD building in
Andy Bowdoin
Quincy were publicly posted for forfeiture on Jan. 8, 2009. AVG launched less than a month later, triggering a virtually relentless series of 200-percent, matching bonus offers to generate cash and events that ultimately led to its collapse after the Harrises were identified by AVG as the owners of the company.
A Nov. 6 filing by the prosecution states that Bowdoin was given “direct notice” of the December 2008 seizure in January 2009, as were “all known potential claimants.” Prosecutors noted in the Nov. 6 filing that they had “signed receipts” from Bowdoin and others.
Other records clearly show that AVG’s launch proceeded in February 2009, pushed by former members of ASD despite the filing of two forfeiture complaints against the firm and a racketeering lawsuit.
Cash and property seized by the U.S. Secret Service in the December 2008 forfeiture complaint against assets tied to Bowdoin, his wife, stepson and Golden Panda Ad Builder are being prepared for liquidation, according to yesterday’s filing in the December case.
The property includes $634,266.13 in cash seized from a Golden Panda bank account. It is being held in a U.S. Customs Suspense account in Indianapolis.
The $800,000 building ASD paid for in cash also is being prepared for liquidation. The building is located in Quincy, Fla. It was promoted by Bowdoin as the site to which the company intended to move to accommodate employees and customers, owing to ASD’s rapid expansion.
ASD’s growth was fueled by both video and written lies that its business was legal, the Secret Service said.
In only months last year, ASD morphed from a company that earlier said it could not afford to pay members because of a malfunctioning computer script that purportedly had overpaid members and an accompanying $1 million theft at the purported hands of “Russian” hackers to a purported cash turbine was was going to buy an interest in an “international bank” and a “call center” in South America, the Secret Service said.
In August 2008 — in the first forfeiture case filed against ASD’s assets — prosecutors told a federal judge that they believed Bowdoin was preparing to flee the United States. After reviewing a 37-page affidavit filed by the Secret Service and an additional 57 pages of evidence, including surveillance photos taken in Quincy prior to the filing of the application for seizure, a federal magistrate judge ordered Bank of America to freeze 13 bank accounts linked to ASD or Golden Panda and the U.S. Department of Homeland Security to seize the money.
Prosecutors later seized two additional Golden Panda accounts at Bank of America, as part of the August complaint, bringing the total of accounts seized in the August matter to 15 — 10 from ASD, and five from Golden Panda. Those accounts, after reconciliations, contained more than $79.88 million, according to court filings.
As the investigation continued, prosecutors established more links to ASD-connected assets. In December 2008, they filed a second forfeiture complaint, naming an additional Golden Panda account maintained by Bartow County Bank, rather than Bank of America. The Bartow County account is the one that contained the $634,266.13 now being held in Indianapolis.
Prosecutors also seized the Tallahassee home of George and Judy Harris in the December complaint, saying its mortgage of more than $157,000 had been paid off with illegal proceeds from ASD. Records show the mortgage was paid off about three weeks after a May 31, 2008, ASD rally in Las Vegas had concluded.
George Harris is the son of Bowdoin’s wife, Edna Faye Bowdoin. Judy Harris is the wife of George Harris. The AdViewGlobal (AVG) autosurf, which came to life four months after the August seizure of tens of millions of dollars from Bowdoin’s bank accounts and approximately one month after a key court ruling went against ASD in November 2008, later identified George and Judy Harris as its owners.
Bowdoin invoked God at the May 2008 Las Vegas rally, imploring members to imagine themselves wealthy and thanking God for providing him tremendous wealth.
“And I always say, ‘Thank you, God, for developing me into a money magnet,’” Bowdoin said at the rally. “And I see myself as a money magnet in attracting money and, I say, attracting large sums of money.â€
Within days of the conclusion of the rally, according to court filings, ASD money was used by Edna Faye Bowdoin and George Harris to open a bank account into which more than $177,000 of illegal proceeds were deposited. More then $157,000 of the opening deposit was used to pay off the Harris home, which was seized in the December complaint.
Neither George nor Judy Harris filed a claim to the home, prosecutors said. In September 2009, prosecutors made a veiled reference to the AVG autosurf in court filings.
“Maybe Bowdoin thought that before the government brought its charges he (like some of his family members) could move to another country and profit from a knock-off autosurf program that Bowdoin funded and helped to start,” prosecutors said.
AVG purportedly was headquartered in the South American country of Uruguay. Servers of the purported “advertsing” firm that operated in largely the same form as ASD resolved to Panama.
Also seized in the December complaint were three automobiles: a 2009 Lincoln luxury sedan that had been acquired in July 2008 for nearly $50,000; a 2008 Honda CRV registered to George and Judy Harris acquired in June 2008 for nearly $30,000 after the Las Vegas rally; and a 2009 Acura TXS registered to former ASD figure Hays Amos for nearly $34,000.
The check to acquire the Acura registered to Amos was signed by ASD Chief Executive Officer Juan Fernandez, prosecutors said.
Also seized in the December complaint were computer equipment, two jet skis and a hauling trailer that were purchased with $20,506 of ASD money; and a Triton Cabana boat, Mercury motor and trailer purchased with $23,445 of ASD funds, prosecutors said.
All of the property seized in December now is being prepared for liquidation, pending an order from U.S. District Judge Rosemary Collyer. Prosecutors said no one made a claim to any of the seized property.
Based on the lack of claims, it is possible that prosecutors may argue that none of the property was claimed because ASD already had a plan to replace it through AVG.
ASD’s seized computers are being held at Secret Service headquarters in Orlando, according to to the prosecution court filing. Meanwhile, the Lincoln luxury sedan registered to Bowdoin/Harris Enterprises and the Honda registered to George and Judy Harris are being held at a company in the auto-auction business in Lakeland, Fla.; the Acura registered to Amos is being held at an auto-auction company in Daytona Beach, Fla.; and the marine equipment is being held at auction companies in Fort Lauderdale and Pensacola, Fla.
The $800,000 building and the Harris home were posted for forfeiture on the same date — Jan. 8, 2009, according to the prosecution filing. Only 5 days later Bowdoin surrendered his claims to the millions of dollars seized in August 2008.
Regardless, the AVG autosurf proceeded with its formal launch in February 2009 — less than a month after the Harris home in Tallahassee and the ASD building in Quincy were posted for forfeiture.
By the end of February, Bowdoin attempted to reenter the August case, acting as his own attorney and saying he’d changed his mind about submitting to the August seizure. Coinciding with Bowdoin’s pro se filings was an announcement by the AVG autosurf that it was becoming a “private association” based offshore.
During the same time period, a poster at the Pro-ASD Surf’s Up forum told members that the Secret Service had seized the bank accounts of ASD promoters. The poster warned members to remove money from their bank accounts before it could be seized.
By June 25, 2008, AVG announced that it was suspending cashouts. After initially blaming its inability to pay members on the greed of some members, it later changed its story and said $2.7 million had been stolen from the firm.
The story was remarkably similar to the story the Secret Service said ASD had told about the purported “Russian” hackers to explain why it couldn’t pay members.
Federal prosecutors have asked a federal judge to order the formal forfeiture of more than $65.8 million seized from 10 bank accounts in the personal name of AdSurfDaily President Andy Bowdoin.
Prosecutors also asked for a forfeiture order covering Bowdoin’s residence at 8 Gilcrease Lane in Quincy, Fla.
“Plaintiff applies for a default judgment and final order of forfeiture because these eleven defendants in rem were properly served, and no timely paper, pleading, or other claim to the defendant properties remain properly filed that permits any person to challenge their forfeiture,” prosecutors said.
They added that a default notice to the property had been requested, and entered by the Clerk of
Court Nov. 16. Prosecutors said all of the property — the proceeds of the bank accounts and the
Andy Bowdoin
residence — had been advertised for forfeiture beginning on Nov. 15, 2008, more than a year ago.
Court documents unsealed in the case show that the U.S. Secret Service feared Bowdoin had become aware of scrutiny into his business affairs last year and planned to flee the country.
Prosecutors filed 13 separate applications for seizure warrants to trap money connected to ASD on Aug. 1, 2008. A federal magistrate judge ruled that the agency had established probable cause to seize the money, and ordered Bank of America to freeze the accounts.
On the same day, a message appeared on ASD’s website that it was unable to move money in and out of its accounts. Prosecutors said Bowdoin had been talking about South America and planned to stop using Bank of America in July 2008, choosing instead to switch to offshore service-providers, including Canada-based Solid Trust Pay.
Because Bowdoin had suddenly relinquished in July 2008 what had been described as a 50 percent ownership interest in Golden Panda Ad Builder and investigators determined that Bowdoin either had bought or was planning to buy a home in another country — and because a bank other than Bank of America had closed a Bowdoin-connected account just prior to the seizure amid Ponzi concerns — investigators said Bowdoin was setting the stage to flee.
UPDATED 12:29 P.M. EDT (U.S.A.) A default notice to real estate and more than $65.8 million seized from the bank accounts of ASD President Andy Bowdoin has been docketed in U.S. District Court for the District of Columbia.
A clerk entered the notice this morning in response to an affidavit from the prosecution last week. The notice is dated Nov. 13. Today’s filing means the government is one step closer to perfecting title to the property and money, which were seized in an August 2008 forfeiture complaint.
“[I]t is this 13th day of November, 2009, declared that the defendants . . . are in default,” the clerk’s notice reads.
Judge Rosemary Collyer will have to issue a formal order of forfeiture for the government to exercise permanent control of the assets. The timeline for such an order is unclear, but prosecutors say the time for filing claims has expired.
Last week, Collyer rejected a bid Bowdoin launched in February to reassert claims to the money. She also has rejected dozens of bids by pro se litigants to gain standing in the case, including a denial of 13 motions on a single day last week.
In August, pro se motions to gain standing in the case — all of them featuring a legal template shared by members of ASD — began to flood the courthouse. Collyer rejected the arguments of each of the prospective litigants.
EDITOR’S NOTE: This is the story of Shannon Allison, an Idaho widow with five children. It is in her own words. Only light editing has been performed.
My name is Shannon Allison and I’m a widow with 5 children. My husband, 5 kids, and I were involved in a horrific car accident in July of 2003. A driver fell asleep at the wheel on the highway and hit our camper trailer, which resulted in our SUV rolling 8 times into the median. My husband was killed and me and my children suffered numerous injuries.
In a matter of seconds, my entire life had become a nightmare and it took many years to physically and emotionally recover from the accident. At times, I wanted to die myself until finally, one day I realized that my children and I survived for a reason and I needed to learn to live life again. We were given a second chance at life and I knew my husband would want us to be happy!
After all was said and done, I received a lump sum of money from insurance and settlement funds. I tried to make sound financial decisions and invest my money wisely. I even hired a financial planner and invested in various developments and projects. I bought some real estate and looked for ways to start my own business at home so I could spend more time with my kids.
I was a registered nurse but needed a change in my life. I started marketing a product I really believed in and set up my own website through the product I sold. I was introduced to the product by a good friend’s brother-in-law who was an oral surgeon in California. During that time he also introduced me to ASD.
No Early Reason To Doubt
He, my friend’s brother-in-law, had wonderful things to say about ASD! He himself had earned thousands over his original investment and really believed the rebates were legal and everything was on the up and up, so to speak. He loved the fact he could advertise his business through ASD and make money! In fact, he was so excited about it that he shared the site information with all his family and friends.
He had originally been introduced to the site by his Aunt, I believe, who didn’t invest a lot of money in the beginning but was making substantial returns. He said at first he was skeptical but once he got into ASD, he started making money right away.
A 20K Leap: Sent Check To One Of The ‘Top Guys’
I was always looking for ways to advertise my new product. This seemed like an easy way plus make money at the same time! He showed me his own site and his returns. He got me so excited about the site that I decided to take the risk and put 20k into it. In fact, I was given a name and address to one of the top guys in the company to send my certified check to overnight and I would start making money right away since he could set up my account personally. Basically, there would be no delays since sometimes it could take up to a month to get going or so I was told. I was nervous but the pressure to get going took precedent.
Back Office Showed 7K Profit In Weeks
Everything was set up right away as promised and I started building money right away, according to my ASD account. In the beginning, which was in June of 2008, I surfed my required pages and reinvested my rebate returns daily. By the beginning of July, my ad packs were worth 27k and I decided to start pulling out some money.
My gut told me to start taking out enough money every week until my original principal was returned. You could only get your rebates back on certain days. During this time, the site started having trouble. It would be unaccessible or it would freeze up often. It was nearly impossible to even get to your ASD account. Sometimes, it would take days before it was up and working again!
There would be a message on the site stating the site was down because of the increase in traffic and new software to handle the traffic was being installed. By the time I got back into my account and requested a check, the seizure of ASD assets by the govt. had begun. The first and only check for $1,800 sent to me by ASD bounced and that was it.
Finding Out Info From ASD ‘Nearly Impossible’
At that time, ASD members were promised daily that all would be cleared up and we would be back online in no time at all. Weeks turned into months and months into a year and a half! Finding out info. was nearly impossible and I had come to realize that I was a victim of a Ponzi Scheme.
I told you this story because I wanted you to know that many of us truly just got into ASD because it was a way to advertise and make money at the same time. We would spread the word because we were getting rebate returns and thought we were part of something legal. Yes, I should of known that some things are just too good to be true but I guess I thought if it was illegal, why did it continue on for so long before they were caught?
I trusted the system and had no idea it was a Ponzi. Apparently, I’m not the only one as many members lined up at numerous rallies in different states to give ASD money. I thought for sure if this was illegal there would be no way he would hold public rallies to increase revenue. Wouldn’t you think the govt. would of been suspicious after the first rally?
I have learned a lot since this whole ordeal started. I research and research before ever investing any money or what money I do have which isn’t much anymore. Unfortunately, I am so distrustful now that often I pass on good investments. It’s so frustrating. I feel there are more corrupt people out there than just plain good, honest folks.
What ever happen to having a conscience? How do these people live with themselves like Madoff and Bowdoin after they destroy good people and their families? We need to educate ourselves and make informed decisions, not ones based on impulsivity and making a quick buck! I feel if you don’t have the time to do the research, you don’t have the money to invest! Hopefully, things will change and these criminals will finally be punished for their illegal acts!
Federal prosecutors have filed an affidavit that seeks to give the government permanent control over more than $65.8 million seized from 10 bank accounts in the name of AdSurfDaily President Andy Bowdoin.
Prosecutors already have permanent control over money seized from the bank accounts of Golden Panda Ad Builder in the same case.
Today’s move against ASD’s bank accounts followed quickly on the heels of a ruling Tuesday by U.S. District Judge Rosemary Collyer that Bowdoin would not be permitted to reassert claims to the money. Prosecutors said they intend to implement a restitution program for victims of the alleged ASD Ponzi scheme.
“[T]he time for filing pleadings to intervene has expired,” said Barry Wiegand, one of the prosecutors handing the case, in today’s affidavit.
In all, the government seized $65,838,999.70 from Bowdoin’s bank accounts, according to court filings.
The largest Bowdoin account contained more than $31.6 million. Another Bowdoin account contained more than $23.7 million. A third Bowdoin account contained more than $4.99 million. (An additional $107 would have made it an even $5 million.)
Three Bowdoin accounts contained the exact same amount: $1,000,338.91. Three other accounts contained smaller amounts, and one additional account contained more than $1.088 million. Bowdoin’s smallest account contained $13,286, prosecutors said.
Bowdoin surrendered claims to the money in January. He attempted to reassert his claims in February. Collyer ruled Tuesday that he would not be permitted to reenter the case.
Today’s affidavit by the prosecution asks the Clerk of Court to enter a default notice. The default would become finalized with a formal order of forfeiture from Collyer, meaning the government would perfect its title to the money.
In July, Collyer signed an order of forfeiture against assets once held by Golden Panda Ad Builder, giving the government formal title to more than $14 million seized from Golden Panda. Golden Panda ‘s assets were seized as part of the ASD probe.
Golden Panda President Clarence Busby’s five accounts — some of which also included the name of his daughter, Dawn Stowers — contained $14,045,598.07 in total, prosecutors said. The largest account contained exactly $6 million. Another Busby account contained more than $3.007 million. A third Busby account contained more than $2.282 million. A fourth Busby account contained more than $1.642 million. Busby’s smallest account contained more than $1.112 million.
In May, prosecutors tallied the ASD money as follows:
(a) $1,088,246.48 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(b) $31,674,039.13 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(c) $937,470.18 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(d) $13,286.89 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(e) $403,791.04 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(f) $4,999,893.00 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(g) $23,721,256.25 from account #[deleted by this Blog] at Bank of America, in the name of
Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(h) $1,000,338.91 from account #[deleted by this Blog] at Bank of America, in the name
of Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(i) $1,000,338.91 from account #[deleted by this Blog] at Bank of America, in the name
of Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY;
(j) $1,000,338.91 from account #[deleted by this Blog] at Bank of America, in the name
of Thomas A. Bowdoin, Jr., Sole Proprietor, DBA ADSURFDAILY.
Golden Panda money was tallied as follows in May:
(k) $2,282,999.72 from account #[deleted by this Blog] at Bank of America, in the name of
Clarence Busby Jr. and Dawn Stowers, DBA Golden Panda Ad Builder Deposit
Account;
(l) $1,112,978.42 from account #[deleted by this Blog] at Bank of America, in the name of
Clarence Busby Jr. and Dawn Stowers, DBA Golden Panda Ad Builder Operating
Account;
(m) $1,642,039.08 from account #[deleted by this Blog] at Bank of America, in the name of
Clarence Busby Jr. and Dawn Stowers, DBA Golden Panda Ad Builder Cashout
Account;
(n) $6,000,000.00 from account #[deleted by this Blog] at Bank of America, in the name
of Golden Panda Ad Builder; and
(o) $3,007,580.85 from account #[deleted by this Blog] at Bank of America, in the name
of Golden Panda Ad Builder.
The government seized more than $79.88 million combined from the bank accounts of ASD and Golden Panda.
