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Tag: Andy Bowdoin

  • Purported Transcript: Bowdoin Pushed ASD ‘Stock’ In 2007; Other Records Show Bowdoin Gave Campaign Donations In Names Of Two Firms

    UPDATED 2:26 P.M. EDT (U.S.A.) A purported transcript of remarks in March 2007 by AdSurfDaily President Andy Bowdoin paints a picture of a startup company with serious problems Bowdoin tried to solve by offering “stock” in the firm.

    The “minimum purchase” of the stock was set at “$10,000,” and the the money would be used to help the company get back on its feet, according to the transcript, which was dated March 12, 2007, and posted in the asamonitor forum.

    ASD had been operating only a few months at the time of Bowdoin’s remarks and already was in over its head, according to the purported transcript and other records.

    AdSurfDaily also would undergo a name change to “AdSalesDaily,” according to the transcript.

    Just two weeks earlier — on Feb. 27, 2007 — the Federal Election Commission recorded a $250 donation from “Mr. T. Bowdoin” in the name of “AdSalesDaily Inc.” The FEC recorded another $250 donation from “Mr. T. Bowdoin” in the name of “AdSalesDaily Inc.” on March 27, 2007, two weeks after the purported stock offering.

    Screen shot of Federal Election Commission record showing 'Mr. T Bowdoin' was the 'owner' of 'Adsalessaily, Inc' and made a political donation under that name in 2007.
    Screen shot of Federal Election Commission record showing 'Mr. T. Bowdoin' was the 'owner' of 'Adsalesdaily, Inc' and made a political donation under that name in 2007.

    Both donations were targeted to the National Republican Congressional Committee (NRCC) and used an address — 13 S. Calhoun Street, Quincy, FL 32351 — federal prosecutors later said was bogus.

    Although the donations listed Bowdoin as the “owner” of AdSalesDaily Inc., the corporation appears not to have been registered in Florida. Records in Georgia list “Ad Sales Daily, Inc.” as a corporation that initially was registered in Georgia May 8, 2007, more than two months after Bowdoin identified himself as the owner in federal campaign records.

    The Georgia entity does not list Bowdoin as an owner, officer or filer for the corporation — or as a person involved in any capacity. Rather, “Ad Sales Daily, Inc.” is listed as a Delaware foreign corporation, with J. Heardy Myers listed as the corporate filer and Myers (of Marietta, Ga.) and Otis Whitcomb (also of Marietta) listed as officers.

    AdSalesDaily Inc. was incorporated in Delaware on March 22, 2007, according to filings.

    In posts from March 2, 2007 at a forum known as stacontact.myfastforum.org, Myers is referred to as “Executive Vice President” and “Chief Information Technology Officer” of Ad Sales Daily Inc., with Bowdoin listed as “president.”  A “write-up” that resembled a news release on Bowdoin and Myers was published in the forum.

    Within the same thread later in the month, however, a poster said Myers had resigned as executive vice president to “focus on getting the other website completed. He will continue to be a member of the President’s Circle.”

    A person who identified himself as a member of an ASD downline group known as “oneteam” started the forum thread. “oneteam” used free hosting at homestead.com to promote ASD. At one time, “oneteam” displayed an ad that said ASD deposits were insured by the FDIC and that ASD provided “shelter” from the SEC and the FTC.

    On March 22, 2007, a forum poster quoted Bowdoin as saying, “We should have all the stock money coming in this week.”

    On July 17, 2008, a Blog known as “Otitis’s Weblog” (sic) included a denial that Ad Sales Daily Inc. had been affiliated with Bowdoin, saying “Any Bowdin (sic) has made false public statements in late 2006 to beginning 2007, that he had a company named Ad Sales Daily. Andy Bowdin (sic) has never done business as Ad Sales Daily, or incorporated this name or filed for a business license in Florida where he resides.”

    The denial on “Otitis’s Weblog” appears to be the only post on the Blog.

    Why Bowdoin would claim to own a company he did not own — and make two campaign donations recorded by the FEC in the name of AdSalesDaily Inc. — is unclear.  The federal filings recorded in February and March 2007 specifically list Bowdoin as the “owner” of AdSalesDaily Inc. (See the screen shot above of the February 2007 FEC record.)

    Bowdoin, according to the transcript at asamonitor, had been in Atlanta in March 2007 to get “input” from “leaders” on the company’s problems. It is unclear if Bowdoin actually sold any stock in ASD. There does not appear to have been any public filings concerning an offering, although an offering could have been conducted privately.

    “Hi Folks,” the transcript began. “My name is Andy Bowdoin, President of AdSurfDaily. We are not having an opportunity call tonight, but it will be an update call instead.

    “I am in Atlanta Georgia tonight and I have been up here this afternoon meeting with some of our leaders getting some input on some of the issues we have,” Bowdoin continued, according to the transcript.

    The transcript did not identify the leaders.

    “We have known that we should have shut down the site for a long time, because of the issues we continually have with the site, but we have been putting band aids on it to keep it going until the new site was ready,” Bowdoin said, according to the transcript. “We have been using a lot of our programmers time to repair it and keep it going. That is expensive and wasting money and prolonging the development of our new site. But now the existing AdSurfDaily site is beyond repair.”

    Script problems “drained” money from ASD, according to the transcript.

    “[T]he mathematical formula that governs the payouts are wrong,” Bowdoin was quoted as saying in the transcript. “The site has been paying out 63%, 67% and 72% instead of the normal 60%. This has drained the money we had for pay outs. Therefore all pay outs are on hold at this time.”

    Bowdoin did not say if people who benefited from extra payout amounts were asked to return the money, according to the transcript. Instead, ASD stopped payouts altogether.

    “We have frozen all accounts,” Bowdoin said, according to the transcript. “We have disabled the ability to make upgrades and purchase new ads. You can still view ads and earn credits to show your site. You can still look at you history and referral page. You can print out your information in your History page and Referral page. We will use this information to make everyone whole when we launch the new site. Our goal is to launch the new site during the month of May and make everyone profitable.”

    Bowdoin next pitched a stock offering, according to the transcript (emphasis added).

    “We will be selling stock in the new corporation AdSalesDaily to finish paying for the development of the new site and make the current payouts. The minimum purchase for the stock is $10,000. We are looking for people who share our vision, and are willing to invest toward the continued development and completion of the new AdSalesDaily website. If you are interested in purchasing some of the stock or if you know someone that might be interested in listening to the stock presentation, call the home office at 850-627-2206.”

    The transcript and political donations in the name of AdSalesDaily may mean that ASD operated under three different names — not just two — between October 2006 and August 2008, the month certain assets tied to the firm were seized by the U.S. Secret Service. The assets were seized when ASD was operating as ASD Cash Generator.

    A second forfeiture complaint filed in December 2008 against assets tied to ASD cites at least one unidentified “silent partner.”  The December complaint references a purported theft of $1 million from ASD at the hands of “Russian” hackers, alleging that no police report ever was filed despite the loss of a magnificent sum.

    The complaint describes the transition from the name AdSurfDaily to ASD Cash Generator. It does not reference “AdSalesDaily,” but federal records show that Bowdoin gave two campaign donations in that name.

    “Mr.  Bowdoin told some individuals that he had to stop operating the program over the Internet as AdSurfDaily after one or more Russians hacked into his program and caused the ASD operation to issue approximately $1 million to one or more Russians,” prosecutors said.

    Bowdoin explained the money was taken “before [he] discovered that the Russians had not paid any money to ASD to secure for themselves a portion of its revenue stream (as so-called ‘rebates’),” prosecutors said.

    The December complaint also alleges that Bowdoin blamed the company’s problems on “cash reserves that had been drained because surfing commissions were overpaid” — a possible reference to Bowdoin’s remarks in the March 2007 transcript about script problems.

    But Bowdoin and ASD insiders, according to the December complaint, arranged for ASD money to be stolen.

    “Mr. Bowdoin and associates issued ad packages to friends and family (who paid nothing for the ad packages) as free investment, and compensation programs,” prosecutors said. “Mr. Bowdoin also gave free ad packages to a son and former daughter-in-law, by which they pulled funds out of ASD without paying any money to ASD. In his son’s case, he arranged for another employee to ‘surf’ the program in order to qualify for a share of the daily rebates.”

    Select individuals “were able to pull out considerable funds from the so-called rebate program even though in many cases they put little, if any, of their own money into the scheme,” prosecutors said.

    “For example, a former employee took over $30,000 out of ASD after putting in nothing. Another former employee pulled out over $300,000 after putting in about $10,000,” prosecutors said. “One ASD promoter pulled out almost $100,000 after putting in less than $1,000.”

    FEC records show that Bowdoin — under the name of “Mr. T. Andy Bowdoin, Jr” and “AdSurfDaily Inc. and AdSurfsDaily Inc. (the second “s” is an apparent typo) ” — gave $5,000 to the National Republican Congressional Committee in 2008. Two donations of $2,500 were recorded — one on June 6, 2008, and another on July 7, 2008.

    Bowdoin’s NRCC donations resulted in the issuance of a “Medal of Distinction,” which Bowdoin and ASD promoters positioned as an important award for business accomplishments from the White House. The “medal,” however, is issued for campaign donations and signfies only one’s ability to write a check for what amounts to the purchase of banquet tickets.

    Even as the FEC was recording the donation on July 7, undercover agents from an IRS/Secret Service task force based in Florida were beginning to scrutinize ASD.

    Prosecutors said last month that Bowdoin had signed a proffer letter and acknowledged to law enforcement that the material allegations in the government’s August complaint all were true. The government did not reveal the entire contents of the proffer letter or the date it was signed.

    Given the allegations in the December forfeiture complaint and direct quotations attributed to Bowdoin, it is possible that the December complaint itself is based at least in part on Bowdoin’s proffer.

    Read the purported transcript of Bowdoin’s 2007 remarks, as published in the asamonitor forum.

    View the PDF of the Georgia filing for Ad Sales Daily Inc.

    Read forum posts from March 2007 on Ad Sales Daily Inc from stacontact.myfastforum.org.

  • AdSurfDaily: Revisiting Our Early Coverage

    andybowdoinbw.gifIt is the story that won’t go away, driven as much by the personalities and people who support AdSurfDaily as it is by the legal issues that put the company in the national spotlight.

    On Aug. 1, 2008, an ambiguous note appeared on ASD’s website. The note suggested a government investigation was under way. In the weeks and months that followed, the story grew increasingly bizarre. ASD President Andy Bowdoin likened the seizure of funds tied to his company to the 9/11 terrorist attacks, saying the government’s actions were the work of “Satan.”

    Curtis Richmond, an ASD member, pro se litigant  and member of a sham Utah “Indian” tribe that once held an organizational meeting in an Arby’s restaurant and listed a meeting room attached to a doughnut shop as the address of its purported “Supreme Court,” eventually entered the fray.

    There were signs at the very beginning that the ASD case would not be ordinary. Here are some snippets from our earliest reports:

    ASD Cash Generator Under Scrutiny By U.S. Attorney

    Aug. 2, 2008

    So far the ASDCashGenerator website hasn’t gone dark, but the lights definitely are flickering . . .

    At the moment the page loads with this message:

    “Friday, August 1st 2008 afternoon update:

    “Upon direction from the U.S. Attorney’s Office in the District of Columbia, ASD will not be able to move funds into company accounts, or out of them. We will work to resolve this problem, and return to normal operation, as soon as we are permitted to do so.

    “ASD Management.”

    . . . As always is the case, sustainability is the issue. Can a company that promises a return for viewing advertisements generate enough revenue to sustain payouts? Will it have to dip into revenues from new members to pay older members, thus setting up the classic Ponzi situation?

    Assertions appear online that Andy Bowdoin was accorded a presidential honor known as “The Medal Of Distinction” and has been feted by President Bush and Vice President Cheney.

    Read an interesting Blog post by Matt Hurley on the “Medal of Distinction” at thenextright.com. Matt Hurley’s post isn’t about Andrew Bowdoin, but it’s still worth reading.

    Bowdoin And ASD Cash Generator Investigation Still Not Clarified; Information Sketchy Across Web As ASD Members Show Signs Of Viral Nervousness

    Aug 3, 2008

    ASD Cash Generator (ASD) still had an ambiguous note on its website as of late morning (EDT) in the United States, Sunday, Aug. 3, 2008. Andy Bowdoin’s ASD support page and page outlining ASD as a legal business still were redirecting to a message suggesting that the U.S. Attorney in Washington, D.C., now was involved in ASD’s business affairs.

    Today marks the third day a message that suggests an ASD investigation is under way has appeared at the Andy Bowdoin site.

    Elsewhere across the web discussion about ASD Cash Generator was taking place in forum after forum, and on Blog after Blog. ASD members continue to cling to hope that the U.S. Attorney is going to give ASD Cash Generator a clean bill of health, something members appear to view as a potential new endorsement.

    In essence, some ASD members are arguing that a government investigation of ASD is a good thing. Should ASD pass muster with agents from the U.S. Attorney’s office in the District of Columbia, so the thinking goes, it can only mean good things for the company.

    It’s unsettling to read these sorts of posts. One person even posted a link to an audio, claiming it was proof that all is well at ASD and that the alleged U.S. Attorney investigation is just a bump in the road. The poster talked about how negativity about any company could be found online — true enough.

    The ASD audio is not proof of anything. It’s a third-party report that consists of vagaries. A speaker in the audio even made the claim that “one of the negatives of the Internet is just freedom of speech, and people can go on there and say what they want.”

    Freedom of speech a negative? Hardly. The speaker at once was condemning freedom of speech and then taking advantage of his right to speak freely. It’s just another in a long line of tortured defenses of ASD Cash Generator. Some ASD members appear to want to sue anybody who dares offer an opinion contrary to their own, yet another reason why it’s a good thing that ASD is under scrutiny.

    Responsible commentary on ASD is exactly what the public needs to make informed decisions. There are reports online that ASD is taking in millions of dollars and that people are writing cashier’s checks for thousands and thousands of dollars and directing money toward the program. The public has a vested interest in the outcome.

    Investigation Mystery At ASD Cash Generator Remains

    Aug 4, 2008

    Today marks the fourth day a message that suggests federal investigators are looking into the business practices of ASD Cash Generator is posted on the ASD website.

    Meanwhile, ASD members continue to wait for information to flow into the ASD information vacuum. The message on the ASD site is ambiguous, meaning it can be interpreted in multiple ways . . .

    Web commentary on ASD Cash Generator continues to be active. Some of the commentary is rational and cautionary in nature. Some of it, however, is irrational. Politics and religion have entered the discussion in some places. This creates the impression that some ASD members are blind followers. It’s a nasty business problem to have because it undermines credibility.

    One ASD member thought it prudent to post an ASD Affiliate link in a third-party news story about ASD. The member also posted a link to another autosurfing opportunity in the same news story. It’s being sold as ambassadorship of the opportunities, as though all news accounts and opinion pieces on ASD that are contrary to ASD sales materials are inherently fatally flawed.

    Yesterday I noted that some ASD members were condemning free speech and freedom of the press, while reserving for themselves the same rights they’d deny others. If a writer suggests that people should be very cautious when considering ASD Cash Generator, some ASD members are quick to jump in with threats of ASD lawsuits and threats of litigation.

    One ASD member told me yesterday that I should be writing about Social Security. The thinking was that Social Security is a Ponzi scheme and that anybody who writes about ASD is giving the government a pass at the expense of continued negative publicity for ASD . . .

    David Arnett has taken some more heat for his Tulsa Today reporting on ASD.

    It’s impossible to imagine that some people actually believe the best way to make their “value case” for ASD is to pick fights with people who buy ink by the barrel. There are threats of multimillion dollar lawsuits and rumors of multimillion dollar lawsuits. Meanwhile, the ASD Cash Generator website continues to beam the ambiguous message suggesting a federal investigation is under way.

    Hey, companies are entitled to have cheerleaders. When the cheerleading takes on a cult-like appearance, however, the public should ask some very tough questions.

    Right now some ASD devotees are making the Andy Bowdoin company look very bad indeed.

    Autosurfing Programs: Why The Feds And Investigators Have An Interest, And Why The Public Does, Too

    Aug. 4, 2008

    People seem very willing to throw money at autosurfs. The appeal is a high return on investment with minimal responsibility and virtually no work. Buy advertising credits, view ads by others, and get paid.

    Life is not that simple. Business is not that simple. It’s easy for well-intentioned people to believe that it is — at least at first. The lure of easy money is as old as commerce itself.

    Spend a few minutes peeling back layers of the autosurf onion if you’re contemplating joining one. Federal investigators, regulatory agencies and state attorneys general have an interest in monitoring the autosurf business. So does the public at large.

    People have “invested” millions of dollars in autosurf companies. Some of them have taken on a cult-like following. People are fascinated by the idea of “earning” money by viewing ads. Some people “invest” their life savings in autosurfs . . .

    At what price to individuals, families and society as a whole?

    The mere fact the technology to create an autosurf advertising program is readily available should be of great concern to law-enforcement agencies and regulatory authorities such as the SEC and FTC.

    Some people view autosurfs as a license to print money. News about a new autosurf program can help the program go viral. It’s easy to imagine teams of MLMers, for example, spreading the word about new autosurf programs to downline members. And it’s easy to imagine those downline members spreading the autosurf news to even more people.

    It is possible for millions of dollars to pour into an autosurf site. The SEC cautions against autosurfs. Accounts aren’t insured or protected. Beyond that, however, there are very good reasons for the government to investigate and monitor autosurfing. What if the autosurf “opportunity” is offshore and exists as a means of escaping taxation? Want to be part of that?

    And there is a “worst-case scenario,” too. Criminals and terrorists do exist in this world. They pay close attention to the U.S. culture and have access to technology that can be used in ruinous ways.

    Think it hasn’t occurred to people who are criminally or terroristically inclined that they could use autosurfs to fund enterprises that would bring harm to a great number of people? . . .

    But this theory doesn’t address the core problem with autosurfing: the classic Ponzi set-up. New money is being used to pay old members, a shell game. People are very susceptible to the argument that autosurfing is nothing more than a new advertising model and is in no way connected to the sale of securities.

    Prodigious, unfettered income streams are needed to make an autosurf “work” mathematically, if a percentage of revenue is returned to members in the form of a “rebate.” Some autosurfs advertise returns that are unsustainable on the face of the promise. Secondary revenue streams can’t be mythological or exist only in theory.

    Phrases such as “We’re working to create revenue streams,” for example, is one of the possible signposts for failure.

    Plenty of laws of math — as well of laws of the land — apply to insurance companies and investment companies. They have to demonstrate through public filings that they are able to absorb losses and continue as ongoing concerns.

    Many autosurf opportunities are do different than an insurance company that would advertise hurricane protection and not have the means actually to protect customers in the event a hurricane actually flattened their homes.

    There are good reasons for the government to scrutinize autosurfs and monitor them with the same sort of zealousness directed at insurance and securities firms. The public interest is huge.

    ASD Cash, Golden Panda Investigations Enter 5th Day

    Aug. 5, 2008

    . . . All is not well in the autosurf business. Some members of ASD even are trying to quash forum and Blog discussions by threatening lawsuits. They’re making themselves look silly, like members of a cult. It’s understandable that some people are trying to find a silver lining in all of this, but many of the ruminations are just clutching at straws.

    No U.S. Attorney or member of an investigative agency is going to appear at a lectern and give any autosurf program that pays a rebate or dividend a clean bill of health. To do so would be to endorse a business model that has the capacity to do great harm.

    Even if a program owner’s motives are entirely pure, it is inconceivable that the government is going to endorse the paid-to-surf model — tacitly or explicitly. Advertising is a cost center, not a profit center. The argument that autosurfs are the equivalent of Google Adwords or newspaper classified ads is a loser. One of the problems with autosurfs is that the “opportunity” is more valuable than the advertising itself.

    Here you have a captive audience, one that wasn’t lured by the chance to see exciting new products scroll across the page, but by the opportunity to become part of the members’ pool and earn payouts over and above the actual cost of advertising.

    Golden Panda Ad Builder yesterday was urging members to send in reports that they actually bought some products as a result of viewing the ads. This, presumably, will become fodder to show to investigators to demonstrate once and for all that the products themselves are the attraction and not the rebate opportunity.

    It is an argument that seems destined to fall on deaf ears — in other words, clutching at straws.

    Florida TV Station Reports Agents Executing Search Warrant At ASD Cash Generator In Quincy; Details Unclear

    Aug. 5, 2008

    WCTV is reporting that agents are executing a search warrant at ASD Cash Generator headquarters in Quincy, Florida.

    Details are sketchy. WCTV serves Tallahassee, Thomasville and Valdosta., and is a CBS affiliate.

    http://www.wctv.tv/news/headlines/26280459.html

  • Plaintiffs, Bank of America Ask Judge For More Time; Golden Panda’s Clarence Busby Updates Motion To Dismiss

    UPDATED 5:28 P.M. EDT (U.S.A.) Attorneys for three plaintiffs who accused ASD President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby of racketeering have asked a federal judge for more time to prepare.

    The plaintiffs were joined in the motion by Bank of America, a non-RICO defendant in the case.

    If the motion is granted, it would extend the time for responses between the plaintiffs and Bank of America until July 30 — two days short of the one-year anniversary federal prosecutors informed ASD that assets tied to ASD and Golden Panda were being seized.

    The forfeiture case was brought by the government in August. The RICO case was brought in civil court Jan. 15 as a separate case by three members of ASD. Bowdoin, Garner and Busby are accused of racketeering in the RICO case. Bank of America is accused of aiding and abetting a fraudulent scheme.

    Citing court records in their joint motion, the plaintiffs and Bank of America said the bank moved to dismiss the plaintiffs’ initial complaint on March 20. But the plaintiffs filed an amended complaint April 27, “thereby mooting Bank of America’s motion to dismiss the initial complaint.”

    Under a new proposed timeline, Bank of America would have until June 10 to move to dismiss or otherwise respond to the plaintiffs’ amended complaint. The plaintiffs, meanwhile, would have until July 10 to file an opposition to a motion to dismiss,  and Bank of America would have until July 30 to file a reply in support of a motion to dismiss.

    ASD President Andy Bowdoin is the only named defendant not to have responded to the lawsuit.

    UPDATE 3:04 P.M. Attorneys for Golden Panda Ad Builder President Clarence Busby have filed a supplement to their motion to dismiss the case against Busby. The supplement advised the court that the motion to dismiss applies to both the Jan. 15 initial complaint and the April 27 amended complaint filed by the plaintiffs.

    “The amended complaint contains no substantive change in the substance of claims against Rev. Busby as would warrant either the withdrawal of Rev. Busby’s motion to dismiss or amendment thereto,” Busby’s lawyers said.

    “Counsel to Rev. Busby received the amended complaint on April 29, 2009, one day after submitting Rev. Busby’s motion to dismiss the original complaint,” the lawyers said. “The amended complaint contains substantively the same content as the original complaint as that content pertains to Rev. Busby; the amended complaint’s substantive modifications pertain to Defendant Bank of America, N.A.

    “In their amended complaint, Plaintiffs have pled facts with greater specificity concerning Defendant Bank of America’s relationship and involvement with Defendant AdSurfDaily,” the lawyers said. “The factual allegations against Rev. Busby, however, are unaltered from Plaintiffs’ original complaint.

    “Under the original and amended complaints, the Plaintiffs’ claims against Rev. Busby are barred by the doctrine of res judicata; the plaintiffs lack standing to sue Rev. Busby; the plaintiffs have failed to plead facts sufficient to state a prima facie case that Rev. Busby owed a fiduciary duty; and the plaintiffs have failed to plead facts sufficient to state a prima facie case that Rev. Busby has violated the civil RICO statute. ”

    “Accordingly,” Busby’s lawyers said, “under both complaints, the plaintiffs have failed to state a claim upon which relief can be granted and the amended, as the original, complaint should be dismissed.”

    See our original post on Busby’s motion to dismiss.

    See our post on the amended complaint.

    UPDATE 5:28 P.M. Judge Rosemary Collyer has granted the joint motion by the plaintiffs and Bank of America for more time.

    MINUTE ORDER granting . . .  Bank of America’s unopposed Motion for Extension of Time. Bank of America shall answer or otherwise respond to the Amended Complaint . . . no later than June 10, 2009. If Bank of America files a motion to dismiss or for summary judgment, Plaintiffs shall respond no later than July 10, 2009; and Bank of America shall reply no later than July 30, 2009. Signed by Judge Rosemary M. Collyer on 5/1/09.

  • RICO Lawsuit Against Bowdoin, Busby, Garner Makes Veiled Reference To ’80-20′ Rule; Signals That ‘Surf’ Promoters Run Risk Of Being Named Defendants In Racketeering Actions

    A racketeering lawsuit against ASD President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby makes a veiled reference to what autosurf participants refer to as the “80-20” rule.

    The reference signals that both private litigants and the government are wise to methods autosurf promoters use to stem the outflow of cash and maintain the deception to encourage new money to flow into the system. Under the so-called 80-20 plans, participants remove 20 percent in cash and let 80 percent ride in the surf.

    Another unstated advantage the “80-20” plans bring autosurfs is to keep cash-out amounts below daily electronic-transfer limitations imposed by banks and payment processors. By discouraging cash-outs, the surf firms can hide the limitations from participants, meaning their inability to honor all cash-out requests also is hidden.

    Members of AdViewGlobal, a surf firm with close ties to ASD, have formed an “80-20 Club.” But the veiled reference in the RICO lawsuit, which was brought by ASD members, signals that such promotions ultimately may drag autosurf promoters in general into future racketeering litigation, with downline members hiring attorneys to file class-action lawsuits against both the surfs and upline sponsors under RICO statutes.

    “The RICO Defendants induce members to leave earned rebates in ASD as a cash balance by claiming that by doing so, members will significantly increase earnings,” the plaintiffs in the ASD RICO case said.

    “In this way, the RICO Defendants encourage members to continue to contribute to ASD’s scheme,” the plaintiffs said. “Furthermore, members do not learn that ASD cannot live up to its promises until members attempt to cash out. Members may watch their ASD accounts grow by delaying cash out, but the only real growth is of ASD’s pyramid.”

    ASD employed another deception — calling the amount in a member’s account a “cash balance” — to keep money in the system, the plaintiffs said.

    By referring to the amount as a “cash balance,” ASD “falsely represents that the account balance has the liquidity of cash.”

  • BREAKING NEWS: Plaintiffs In RICO Action Say AdSurfDaily Hired Bank Of America Employees, Paid Them More Than Others Doing The Same Work; Accuse Bank Of Turning A Blind Eye To Ponzi Scheme Involving Tens Of Millions Of Dollars

    Lawyers for three plaintiffs who accuse AdSurfDaily President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby of racketeering have filed an amended complaint that accuses Bank of America of turning a blind eye to a Ponzi scheme.

    Bank of America is not named a RICO defendant in the amended complaint filed today — as was the case with the original complaint filed in January. Rather, the bank is accused of aiding and abetting a fraudulent scheme — and the plaintiffs say that, rather than reporting unusual banking activities to authorities, Bank of America employees in Quincy, Fla., went to work for ASD while still holding down their jobs at the bank.

    “As the inflow of money increased rapidly after [ASD] rallies [in U.S. cities], Bank of America employees from the Quincy, Florida branch began paid work for ASD at the ASD office in Quincy, Florida,” the plaintiffs charged.

    On March 20, Bank of America said it had done nothing wrong and asked for the original complaint to be dismissed.

    Tens of millions of dollars connected to ASD, Golden Panda and LaFuenteDinero were seized by the U.S. Secret Service in August, amid allegations of wire fraud, money-laundering, selling unregistered securities and operating a Ponzi scheme.

    “Banks are not guarantors of their customers’ conduct,” BOA argued in its motion to dismiss. The bank further argued that the complaint was vague and speculative, lacking in facts to such a degree that U.S. District Judge Rosemary Collyer of the District of Columbia must dismiss BOA as a defendant.

    Today’s filing by the plaintiffs included allegations not listed in the original complaint, including the allegations that Bank of America employees had taken second jobs with ASD and that a “majority” of the employees of the bank’s Quincy branch also worked for ASD.

    “Among other things, these employees assisted ASD in processing incoming funds, including funds acquired through Visa transactions,” the plaintiffs said. “Bank of America management knew that its employees also worked as ASD employees. To say the least, this involvement of Bank of America employees in the day-to-day operations of ASD provided Bank of America with additional knowledge of the RICO Defendants’ financial transactions.”

    The bank helped “increase the scope” of damage done by ASD’s racketeering scheme by not seeing things for what they were, the plaintiffs charged.

    One of ASD’s employees also employed by Bank of America was the branch manager in Quincy, the plaintiffs said. They further asserted that a Bank of America vice president of business banking from Tallahassee visited ASD’s headquarters and reported nothing unusual.

    Bank of America workers who took second jobs at ASD were paid higher wages than other ASD employees performing the same work, the plaintiffs said.

    Attorneys for plaintiffs Mike Collins, Frank Greene and Nature’s Discount Inc. — all former ASD members — said the bank helped ASD carry out the scheme. The lawsuit was brought as a prospective class-action. Bank of America and Garner have responded to the lawsuit, which was brought in January. Bowdoin and Busby have not.

    ASD was having trouble processing payouts because of a $2 million daily limit on electronic transactions imposed by Bank of America, the plaintiffs said.

    “Bank of America subsequently modified the RICO Defendants’ accounts to provide ASD with the opportunity for a higher capacity of electronic transactions,” the plaintiffs said. “The Quincy, Florida branch office of Bank of America initiated this upgrade in the RICO Defendant’s account or accounts, and Bank of America management outside of the Quincy, Florida branch validated the upgrade after conducting an in-person investigation [that] included a visit by a Vice President to ASD’s offices.”

    The bank failed to spot problems at ASD, even with bank employees working for ASD, the plaintiffs said.

    Among other things, according to the plaintiffs, Bank of America failed to:

    • Recognize the illegitimacy of ASD.
    • Stop the RICO defendants from using the bank’s products and services in furtherance of illicit purposes.
    • Halt the bank’s atypical involvement in the scheme.

    Two other banks in Quincy refused to maintain back accounts for the RICO defendants, the plaintiffs said.

    “Bank of America did not,” the plaintiffs said, alleging that the bank had “teamed up with the RICO Defendants to perpetrate this fraud.”

    About $53 million remained in Bank of America accounts linked to the RICO defendants when the U.S. Secret Service seized the funds in August, the plaintiffs said — “and hundreds of millions of dollars had been dissipated.”

  • AVG Forum Warns Members Not To Call Purchases An ‘Investment’; Posts Citing ‘Return’ Or ‘ROI’ Will Be Deleted

    UPDATED 5:44 P.M. EDT (U.S.A.) A Mod at an AdViewGlobal forum set up by Mods and members of AdSurfDaily has warned AVG members not to refer to their purchases as “investments.”

    Rather, the Mod said, AVG members purchase “advertising” and are not “investing” or “investors.”

    Posts that used the terminology of investments would be deleted, the Mod warned.

    AVG members currently are stressing a so-called “80-20” strategy as a means of keeping the program viable for the long-term.

    Analysts, however, point out that the “80-20” plans — taking out 20 percent in cash and letting 80 percent ride with the companies — are just another way to keep cash within ready reach of autosurf Ponzi schemes to sustain the deception.

    There is not a single, documented case in the history of autosurf prosecutions in which the use of the word “advertising” to describe what the government views as an “investment” program involving the sale of unregistered securities has succeeded as a means of fending off a prosecution.

    In other words, the government has made it plain that you can’t avoid prosecution by using other terminology to describe an investment program.

    Regardless, many surf companies continue to insist that the use of the word “advertising” as a replacment for “investing” somehow insulates surfs from prosecution.

    Prosecutors cited the wink-nod nature of autosurfs — including bids to avoid the word “investment” — in the August forfeiture complaint against ASD.

    The complaint details an instance in which an ASD member insisted to an undercover agent from an IRS/Secret Service task force that bad things could happen if people joined ASD and started calling it an investment.

    “The [undercover agent] asked her about investing with ASD,” prosecutors said of the ASD member. “She immediately said, ‘Don’t call it investing, you know what I mean, we can get in trouble if we say that, we have to be careful.’”

    Prosecutors also made a veiled reference to “80-20” pitches in the August ASD complaint, again citing an undercover agent’s contact with an ASD member.

    “He said the best way to make money in the system is to keep putting your money back into the system as it accumulates,” prosecutors said of the ASD member’s pitch to the undercover agent.

    Some of the Mods and members of the Pro-ASD Surf’s Up forum set up the AVG forum after ASD gave the Surf’s Up forum its official endorsement after a federal judge ruled in November that ASD had not demonstrated it was a legal business and not a Ponzi scheme.

    Prelaunch buzz for AVG started shortly thereafter. On December 19, prosecutors filed a second forfeiture complaint against assets tied to ASD. The complaint did not mention AVG by name, but it outlined allegations against George Harris, the stepson of ASD President Andy Bowdoin.

    Harris is a trustee for the AVG association. AVG’s former chief executive officer — Gary Talbert — is a former ASD executive. On March 20, AVG announced Talbert’s resignation in an unsigned note to members. On March 23, AVG announced its bank account had been suspended.

    On April 24, prosecutors announced that Bowdoin — on an unrevealed date — had signed a proffer letter and acknowledged to law enforcement officials that the material allegations against ASD all were true.

    Proffer letters sometimes are used when prosecutors believe the one who proffers can aid law enforcement in an investigation.

  • Bowdoin’s Proffer Talk Of The Autosurf World

    In the end, prosecutors saved their best for last. Ordered by a federal judge April 3 to respond to a series of pro se motions filed by ASD President Andy Bowdoin in a federal forfeiture case involving tens of millions of dollars, prosecutors first addressed Bowdoin’s motion to dismiss the case for lack of fair notice.

    Then they addressed Bowdoin’s motion to set aside the forfeiture because the court lacked jurisdiction over him in the forfeiture action. The first two prosecution responses occurred between April 6 and early in the day on April 24.

    Finally, late in the day on April 24, prosecutors responded to Bowdoin’s motion to rescind a decision he made in January to submit to the forfeiture.

    That’s when prosecutors dropped a bomb, telling U.S. District Judge Rosemary Collyer that Bowdoin, prior to submitting to the forfeiture, had told “law enforcement agents that the material allegations that the government made in its forfeiture complaint in this case were all true.”

    Bowdoin even had signed a proffer letter, prosecutors told Collyer. Prosecutors used the words “confirmed” and “acknowledged” in their memo to help drive home their points (emphasis added).

    • “Mr. Bowdoin confirmed to law enforcement officials that he modeled his enterprise on another’s failed fraud scheme”
    • “[H]e acknowledged that there was almost no revenue independent from what he secured from the ‘members’”
    • “Mr. Bowdoin also confirmed that the revenue figures of the enterprise were managed to make it appear to prospective members that the enterprise called Ad Surf Daily was a consistently profitable, and brilliant, passive income opportunity”

    Web buzz over the weekend focused as much on what prosecutors did not say as what they did say: Prosecutors, for example, did not say precisely what else Bowdoin had told the government. They did not reveal if he had named names. They did note that the proffer letter Bowdoin signed “informed him that his proffered statements would not be used against him in the government’s case-in-chief in any criminal prosecution of him — other than a prosecution for perjury, giving a false statement, or obstruction of justice.” (Emphasis added.)

    But they added (emphasis added) that Mr. Bowdoin’s proffered statements could be used for “other” purposes.”

    Prosecutors did not reveal what “other” purposes they had in mind.

    Proffer letters sometimes are used when prosecutors believe the one who proffers can contribute to an ongoing investigation and perhaps even aid in the prosecution of others.

    In the end, prosecutors said that Bowdoin, who’d been hailed a business genius by supporters who engaged in one letter-writing campaign after another to clear his name, admitted that ASD had no meaningful revenue streams other than member payments and fudged its numbers to create the appearance of brilliance — something that takes arrows out of the quivers of his supporters and destroys the credibility of all those letters written on his behalf.

    Bowdoin himself had encouraged all the letter-writing, but he didn’t tell members about his confirmations and acknowledgments to the government. And he didn’t mention the proffer.

    Not even the Mods at the Pro-ASD Surf’s Up forum — grand central for Bowdoin apologists — had anything to say about Bowdoin’s confirmations and acknowledgements and proffer letter this weekend.

  • PROSECUTION BOMBSHELL: Bowdoin Signed Proffer Letter Prior To Submitting To Forfeiture And Told Investigators That Government’s Material Allegations Were ‘All True’

    Andy Bowdoin
    Andy Bowdoin

    Prior to submitting to the forfeiture of tens of millions of dollars in January, AdSurfDaily President Andy Bowdoin signed a proffer letter and told investigators that the government’s material allegations all were true, federal prosecutors said late this afternoon.

    The explosive revelation came in the form of a memorandum filed in response to a pro se motion by Bowdoin to rescind his decision to submit to the forfeiture.

    “In fact, when Mr. Bowdoin, through his counsel, filed his January 2009 “Motion to Withdraw Claims,” seeking to dismiss the August 2008 claims that provided his statutory standing, he had already admitted to law enforcement agents that the material allegations that the government made in its forfeiture complaint in this case were all true,” prosecutors said.

    “Mr. Bowdoin signed a ‘proffer letter’ that informed him that his proffered statements would not be used against him in the government’s case-in-chief in any criminal prosecution of him — other than a prosecution for perjury, giving a false statement, or obstruction of justice,” prosecutors said.

    “But the letter also explained that Mr. Bowdoin’s proffered statements could be used for other purposes,” they continued. “Mr. Bowdoin and the government never agreed that Mr. Bowdoin’s proffered statements were off the table in this civil case — which explains why, after consulting with his attorneys, Mr. Bowdoin decided, in January, to withdraw his claims.”

    Bowdoin asserted in his motion to rescind that “[t]he procedures used to search and seize [the] property in the forfeiture were nonexistent”; (2) the claimants “were greatly influenced by legal counsel that was ineffective”; (3) the claimants were illegally intimidated, threatened and coerced by government agents and attorneys concerning potential prosecutions and sanctions against them”; (4) the claimants acted under severe duress and true feeling of protest”; (5) “government agents used fraud, trickery and deceit to . . . convince the claimants that the withdrawal and release of claims was their only option”; (6) “government agents and prosecutors acted in bad faith in deciding to use a civil investigation and forfeiture to gain information and evidence for a criminal indictment and conviction” and (7) “government agents and prosecutors have willfully and intentionally used an illegal forfeiture to destroy the business enterprise that has affected thousands of innocent purchasers with de minimus or non-existent harm to the public to punish the claimants,” prosecutors said.

    Judge Rosemary Collyer should deny the rescission motion, prosecutors said.

    “Mr. Bowdoin offers no facts to support any of his accusations. Indeed, his accusations are inconsistent with the record. He offers no valid basis for this Court to permit relief from a final order, that he, through his counsel, requested, dismissing him from this proceeding.”

    At the same time, prosecutors said, Bowdoin appears to have arrived at his conclusions after consulting with nonexperts.

    “Mr. Bowdoin says that after discussing this case with his supporters, and concluding that they were smarter than his attorneys, he has changed his mind. But, ‘buyer’s remorse’ is not a basis for establishing that a mistake occurred when the Court issued the order to dismiss the August 2008 claims,” prosecutors said. “Mr. Bowdoin offers no facts to support that any mistake ever occurred.

    “Nor does ‘I changed my mind’ provide a basis under the catch-all provision in Rule
    60(b)(6) to relieve a party from his free and conscious choice regarding the conduct of litigation,” prosecutors said.

    The record of the case undermines Bowdoin’s assertions, prosecutors said.

    “Mr. Bowdoin also alleges that he was ‘illegally intimidated, threatened and coerced by
    government agents and attorneys concerning potential prosecutions and sanctions against them,’” prosecutors said.

    “But that protest is belied by his other statements in the record here. When this case was
    scheduled for a post-seizure hearing, at the request of the attorneys who Mr. Bowdoin retained in August 2008 to represent him in this civil forfeiture matter, those attorneys told this Court that Mr. Bowdoin would not be testifying at the hearing they had requested. Mr. Bowdoin’s attorneys explained that, if called to testify, Mr. Bowdoin would assert his right under the fifth amendment to the Constitution not to incriminate himself.”

    “In other words,” prosecutors continued, “his own attorneys, presumably in consultation with Mr. Bowdoin, concluded that Mr. Bowdoin faced potential prosecution for his conduct and should not testify. Mr. Bowdoin, through his attorneys, did invoke the fifth amendment. Mr. Bowdoin’s apparent assertion now, that his agreement to withdraw from this case hinged on a threat from the government that he was facing criminal culpability, is plainly dishonest. The multiple attorneys Mr. Bowdoin has fired presumably explained precisely as much to him. Nor can Mr. Bowdoin credibly assert that his decision to
    withdraw was tied to a prosecutor ever having misinformed his counsel.

    “Ultimately, whether Mr. Bowdoin’s awareness that he might face prosecution for criminal conduct came directly from his conversations with his own attorneys, or from conversations he had with some others, is irrelevant,” prosecutors said.

    Justice is being delayed for ASD’s many victims because of Bowdoin’s senseless pleadings, prosecutors said.

    Bowdoin claims the government “used an illegal forfeiture to destroy the business enterprise that has affected thousands of innocent purchasers with de minimus or nonexistent harm to the public to punish the claimants,” prosecutors said.

    “The government agrees that the enterprise ‘affected thousands of innocent’ people and it agrees that the enterprise caused ‘harm to the public,’” they continued. “Mr. Bowdoin complains about his lawyers and the government’s lawyers — but he does not maintain that the enterprise that affected thousands of innocent people was lawful. As he well knows, the evidence his attorneys produced demonstrated that fallacy of his supposed novel business.

    “Mr. Bowdoin secured funds from the public by promising to them safe, profitable
    returns,” prosecutors said. “To keep his fraud scheme afloat, Mr. Bowdoin paid apparent ‘profits’ to early entrants into the scheme, and to friends, family and employees. Mr. Bowdoin confirmed to law enforcement officials that he modeled his enterprise on another’s failed fraud scheme, and he acknowledged that there was almost no revenue independent from what he secured from the ‘members.’

    “No witness ASD produced at the emergency hearing disagreed,” prosecutors said. “No ASD official or representative testified that the enterprise secured revenue independent of what it derived from members to support the payments that were promised to the public and paid out to some participants.

    “Mr. Bowdoin also confirmed that the revenue figures of the enterprise were managed to make it appear to prospective members that the enterprise called Ad Surf Daily was a consistently profitable, and brilliant, passive income opportunity. Mr. Bowdoin knew that his conduct was indefensible when he withdrew his claims in January. Nothing material has changed, and nothing Mr. Bowdoin offers in his ‘Notice of Rescission, etc.’ begins to support the relief he seeks.”

    Read the proecution’s memo.

  • BREAKING NEWS: Curtis Richmond Files Motion To Intervene; Says AdSurfDaily Prosecutors Guilty Of Fraud Upon The Court

    Never mind that AdSurfDaily President Andy Bowdoin himself says ASD was operating illegally when the U.S. Secret Service seized tens of millions of dollars last summer amid allegations of wire fraud, money-laundering, engaging in the sale of unregistered securities and operating a Ponzi scheme.

    And never mind that Bowdoin — who initially insisted ASD was legal, then changed his mind, then fired his attorneys and started filing pro se pleadings before finally hiring a new attorney — has failed in every attempt to demonstrate the legitimacy of his business.

    In a motion just filed, ASD member Curtis Richmond has accused federal prosecutors of Fraud upon the Court, Perjury of Oath, Obstruction of Justice and Interference with Commerce.

    Richmond is associated with a sham Utah “Indian” tribe known for filing vexatious litigation. He was convicted of criminal contempt of court in 2007 in California for threatening federal judges, and last year was ordered to pay damages to prosecutors and others he had nuisanced in litigation.

    Richmond and other pro se litigants in the ASD case have asserted an “Innocent Owner” claim, which asserts that Judge Rosemary Collyer and the prosecutors have “defaulted” on demands made by certified mail and are violating the Constitutional rights of ASD members.

    At the same time, the pro se litigants appear to be suggesting that they’re entitled to do business with whomever they please, even if the business is illegal — all while suggesting the government has a duty not to interfere with commerce even if it is illegal commerce.

    One of the linchpins of this litigation approach is to send a list of demands via certified mail — and later make the claim that the recipient defaulted on the demands by not responding to them. Default judgments then are sought, sometimes for tens of millions of dollars.

    This is the second pro se filing this week in the ASD case, and the fifth involving ASD members using Richmond’s litigation blueprint. This number does not take into account Bowdoin’s pro se pleadings, which total four, bringing the unofficial grand total of pro se pleadings in the case to nine.

    Federal prosecutors have said such filings could lead to interminable delays in rank-and-file members of ASD getting refunds through a process the government intends to implement for crime victims.

    See today’s Curtis Richmond filing.

  • BREAKING NEWS: Prosecution Answers Bowdoin’s Claim D.C. Court Lacks Jurisdiction; Says ASD President’s Claim Has ‘No Reasonable Basis’ In Law And That ‘Serial’ Filings Could Result In Sanctions

    In what could be a day of multiple filings by the government in the AdSurfDaily case, federal prosecutors said in a memorandum that pro se claims by ASD President Andy Bowdoin that U.S. District Court for the District of Columbia has no jurisdiction over him in a civil forfeiture case have “no reasonable basis” in law.

    Meanwhile, prosecutors asserted that continued filings by Bowdoin on a bad-faith basis might subject him to sanctions.

    “In his pro se ‘ Motion To Dismiss, etc., Mr. Bowdoin suggests that this Court ‘does not have jurisdiction because although this may be filed as a civil action, it must be treated as quasicriminal with a standard of review or proof of clear and convincing evidence, not just preponderance of evidence,’” prosecutors said. “Alongside his opaque prose, however, Mr. Bowdoin offers neither one relevant argument, nor one pertinent citation in support of whatever relief he may here be urging.”

    Judge Rosemary Collyer should deny the motion because it simply has no force of law behind it, prosecutors said.

    “Mr. Bowdoin closes by asserting that ‘[t]here has been no probable cause determination
    in this forfeiture,’” prosecutors said.  “But he knows that statement is no more truthful than the representations he made to his investors. In this case a judge found probable cause for each seizure warrant this Court issued, and this Court found probable cause to support the forfeiture action again, after reviewing the government’s verified complaint and the additional evidence that Mr. Bowdoin’s former attorneys insisted be produced.”

    Bowdoin’s behavior could result in a request for sanctions, prosecutors hinted.

    “In this case, Mr. Bowdoin has filed an assortment of new motions after having already lost their earlier iterations,” prosecutors said. “Continued serial-filing might be rejected outright, and even sanctioned.

    “Rule 12(g) provides,’If a party makes a motion under [Rule 12] but omits therefrom any defense or objection then available to the party which this rule permits to be raised by motion, the party shall not thereafter make a motion based on the defense or objection so omitted….’” prosecutors continued.

    “In other words, with limited exception, Rule 12(g) requires all of the permitted Rule 12(b) defenses to be raised in a single, consolidated motion rather than in multiple or successive motions. See Skrtich v. Thornton, 280 F.3d 1295, 1306 (11th Cir.2002). Leading commentators on federal practice and procedure agree that Rule 12(g) generally bars successive pre-answer motions to dismiss.

    “Professors Wright and Miller state, ‘The right to raise these defenses by preliminary motion is lost when the defendant neglects to consolidate them in his initial motion,’” prosecutors said.

    Read the prosecution’s memo.

  • Judge Grant’s Garner’s Motion To Extend Time

    A federal judge has granted attorney Robert Garner’s pro se motion to respond to a racketeering lawsuit filed against him by members of AdSurfDaily Inc.

    As he requested, Garner will be given until May 22 to respond to the complaint. U.S. District Judge Rosemary Collyer issued the order, although a proposed order by Garner appeared to be directed to a U.S. Magistrate Judge.

    Collyer is the presiding judge in the case, which was filed Jan. 15. Also named RICO defendants were ASD President Andy Bowdoin and Golden Panda Ad Builder President Clarence Busby.

    Nothing in the record suggests Bowdoin and Busby have been served with the complaint. Neither man has filed a response, and no attorney has filed a response on behalf of Bowdoin or Busby.

    The plaintiffs in the case — Mike Collins, Frank Greene and Natures Discount Inc. — have said in court filings that they have not been able to perfect service of the complaint.

    Garner, after more than two and one-half months, was served earlier this month.

    The reasons for the delay in service are unclear.

    Bank of America is a non-RICO defendant and has responded to the complaint. Parts of the case have been on hold, pending service of the complaint.

    The RICO complaint alleged that Garner, Bowdoin and Busby were involved in “other” schemes beyond ASD, Golden Panda and LaFuenteDinero, and have “committed or aided and abetted in the commission of countless acts of racketeering activity,” including indictable offenses.