UPDATED 10:37 A.M. EDT (U.S.A.) AdSurfDaily attorney Robert Garner has been served with a lawsuit alleging he engaged in racketeering with ASD President Andy Bowdoin and Golden Panda Ad Builder President Clarence Busby.
The RICO lawsuit had been pending since Jan. 15. In court filings, Garner acknowledged he was served with the complaint April 2. He has asked for time to respond.
Garner’s motion for enlargment of time to file was filed pro se, meaning it was filed by Garner himself and not an attorney representing Garner. The motion lists a P.O. Box in Greensboro, N.C., as Garner’s address.
Garner’s motion does not say where he was served the complaint. In a proposed order, he asked a federal magistrate judge to grant the motion to enlarge time, as opposed to asking Judge Rosemary Collyer, the district judge hearing the case. Garner wants until May 22 to respond.
Plaintiffs include Mike Collins, Frank Greene and Natures Discount Inc. — all members of ASD.
The RICO complaint alleged that Garner, Bowdoin and Busby were involved in “other†schemes beyond ASD, Golden Panda and LaFuenteDinero, and have “committed or aided and abetted in the commission of countless acts of racketeering activity,†including indictable offenses.
No attorney for either Bowdoin or Busby has entered an appearance notice in the racketeering case. It is unclear if they have been served. The lawsuit was filed Jan. 15. It has been the subject of delays, owing to the plaintiffs’ inability to perfect service on the defendants.
A federal judge has indefinitely extended the deadline for class-action certification in a racketeering lawsuit against AdSurfDaily President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby.
The plaintiffs in the case — all former ASD members — asked for the time extension last week because they have not been able to serve Bowdoin, Garner or Busby. The original deadline was April 15.
Judge Rosemary Collyer now will set the deadline during a scheduling conference once the defendants are served — or by issuing a future order. The case has been pending since Jan. 15.
Why the plaintiffs have not been able to perfect service of the complaint is unclear.
Plaintiffs include Mike Collins, Frank Greene and Natures Discount Inc.
The RICO complaint alleged the defendants were involved in “other†schemes beyond ASD, Golden Panda and LaFuenteDinero, and have “committed or aided and abetted in the commission of countless acts of racketeering activity,†including indictable offenses.
“The ASD Enterprise provides the RICO Defendants and other unnamed co-conspirators with a system by which to operate fraudulent schemes such as ASD, to hide the fraudulent nature of the schemes, and to profit from such schemes,†the plaintiffs alleged. “Each RICO Defendant agreed to perform services of a kind which facilitated the operation of the ASD Enterprise and facilitated the RICO Defendants and others in the operation of various fraudulent schemes, including ASD.â€
Collins, Greene and Natures Discount said they will seek discovery and try to get important questions answered about ASD, including questions about the interactions of ASD management and others.
Here is a preliminary list of what the plaintiffs intend to seek through discovery:
Representations made regarding the individuals associated with ASD.
Nature of ASD’s business and the opportunity to earn money.
Types of services offered.
Management and operation of ASD.
The relationship and interaction among employees, officers and other representatives of ASD and BOA, Bowdoin, Busby and Garner.
Facts and circumstances surrounding the opening, maintenance and account activity of BOA accounts in the names of ASD, Bowdoin, Busby and/or Garner.
AdViewGlobal (AVG), an autosurf with close ties to AdSurfDaily, is getting more insidious by the hour.
An AVG forum set up by some of the Mods and members of ASD became a den of infighting among AVG members yesterday. One poster started a thread begging the Mods to intervene, which is to say the poster wanted the Mods to delete reasonable questions and criticism from other members about AVG’s operations.
The Mods complied. The thread had been titled “Moderators…please moderate this private forum!!”
At issue were slashed AVG payout rates after it had run a mind-boggling, 200-percent, matching bonus program for weeks — for both new members and their sponsors. AVG’s published payout rate yesterday was “only 0.056%,” according to posters.
Some AVG members said they expected much higher payout rates. The mere fact that autosurfs promise or suggest a return, however, is problematic. Regulators view the surfs as sellers of unregistered securities disguised as advertising programs.
The return is one of the central issues in the case against ASD — and has been the central issue in all previous autosurf prosecutions, including the CEP Ponzi scheme. The government long has been wise to the wink-nod nature of the business model and attempts by operators and promoters to sanitize it by drafting participants into a verbal conspiracy and scolding people for not using precise language to sustain the deception.
ASD President Andy Bowdoin said he went through $800,000 in his bid to claim tens of millions of dollars seized by the government last August. Now, months later, Bowdoin still is facing litigation by the government on three fronts, and a racketeering lawsuit filed by ASD members seeking class-action status.
Attempts to force autosurf participants to use specific phrasing — such as insisting the word “advertsing” be used instead of “investing” — are commonplace. The attempts alone show consciousness of guilt. The wink-nod nature further is exposed through deletions of posts that don’t adhere to the company line.
Deletions often are defended as an attempt to keep the company discussions “positive.” Regardless, it’s easy to view them as bids to force everybody to lie in the name of the company, so the deception can continue. Virtually all autosurfs operate as Ponzi schemes.
Also at issue at the AVG forum yesterday was a pattern of confusing information from the company.
AVG announced the sudden resignation of Chief Executive Officer Gary Talbert March 20; Talbert is a former ASD executive. On March 23, the surf announced its bank account had been suspended. Problems with eWalletPlus.com, a money-exchanger, followed. One AVG member now says the company was using a U.S. bank, despite promoting itself as an “offshore” opportunity.
Banking problems led to the demise of ASD.
In late March, Shad Foss, an autosurf promoter against whom the receiver in the CEP Ponzi scheme case sought to claw back ill-gotten gains, sent an email to promote AVG. The email advised prospects that $5,000 in AVG would turn into $15,000 “instantly!”
ASD once advertised that it accepted CEP Trust, the failed payment processor run by the operators of the CEP Ponzi scheme.
On Tuesday, two payment processors used by AVG — SolidTrustPay of Canada and StrictPay of Panama — were offline for hours. Both surfs simultaneously were experiencing the same problem: the inability to load secure pages. Why the problem was occurring is unclear.
What is clear is that such disruptions demonstrate just how vulnerable surfs are to unexpected events. AVG is behaving like an operation starved for cash. It is having management, banking and payment-processing problems simultaneously — while still running bonus promotions.
Judge Rosemary Collyer has granted a motion by Jonathan Goodman and Michael Fayad of Akerman Senterfitt to withdraw as counsel for ASD President Andy Bowdoin.
The firm also was granted leave to withdraw as counsel in the civil-forfeiture case against tens of millions of dollars and real-estate tied to ASD amid allegations of wire fraud, money-laundering and operating a Ponzi scheme.
Goodman and Fayad filed the withdrawal motion April 2, saying they no longer could represent Bowdoin, AdSurfDaily Inc. and Bowdoin/Harris Enterprises Inc. effectively.
In asking for leave to withdraw, the attorneys said their representation of Bowdoin had become “unreasonably difficult.â€
“After this Court denied Claimant’s Emergency Motion for Return of Seized Funds [on Nov. 19, 2008], the client-lawyer relationship between the Firm and all three Claimants substantially deteriorated and has not improved thus rendering the representation unreasonably difficult,†the lawyers said.
The lawyers said the firm could not discuss specific issues, owing to the attorney-client privilege.
“Given the attorney-client privilege, the Akerman Senterfitt law firm cannot disclose the
specific issues underlying the problems with the client-lawyer relationship,†the firm said.
“However, without breaching the attorney-client relationship, and based on documents which Mr. Bowdoin publicly filed with the clerk’s office, it is obvious that Claimants have decided to represent themselves without consulting their counsel,†the firm continued.
“By way of example only, Mr. Bowdoin has recently filed, on a pro se basis, a series of motions. Mr. Bowdoin filed these motions without consulting with counsel and without bothering to advise counsel that he would be submitting motions on his own. Under these circumstances, the Akerman Senterfitt Law Firm cannot render effective assistance of counsel.â€
Charles A. Murray, a Florida attorney with privileges in the District of Columbia, filed an appearance notice on behalf of Bowdoin and his corporations last week. Collyer had informed Bowdoin, through Akerman Senterfitt, that the corporate entities could not proceed pro se.
Bowdoin began to file pro se motions in February, saying he had fired Akerman Senterfitt. At the same time, AdViewGlobal, an autosurf with close ASD ties, introduced members to Pro Advocate Group, which says it can help people practice law without a license.
In one of Bowdoin’s pro se pleadings, he acknowledged ASD was operating illegally at the time of the seizure, potentially adding to his problems and creating problems for ASD insiders and top promoters.
Citing an email from her AdSurfDaily downline, a member of the Pro-ASD Surf’s Up forum has advised other members that a federal judge has ordered prosecutor William Cowden to “charge Andy Bowd[o]in or end it and return the money.”
There are no documents in the public record to substantiate the claim. Judge Rosemary Collyer appears not to have issued such an order.
On April 3, Collyer issued an order to show cause, ordering prosecutors to respond to certain Bowdoin pro se pleadings by April 24. The judge acknowledged in the order that “uncertainties surrounding the status of [Bowdoin and associated corporations’] counsel” had contributed to a delay in filing responses to Bowdoin pleadings.
Bowdoin himself contributed to the confusion by filing motions on his own behalf even though the record of the case showed that he still had paid counsel. On March 26, Collyer ordered Bowdoin’s attorneys to state whether they intended to proceed as Bowdoin’s counsel or withdraw, and also to instruct Bowdoin on critical matters of law.
The Akerman Senterfitt law firm, Bowdoin’s paid counsel, now has sought leave to withdraw, saying its representation of Bowdoin had become unreasonably difficult and advising the court that Bowdoin hadn’t consulted with the firm before he filed a series of motions on his own behalf.
Last week, Florida attorney Charles A. Murray filed an appearance notice on Bowdoin’s behalf, although Collyer has not yet granted Akerman Senterfitt’s motion to withdraw as Bowdoin’s paid counsel.
Murray’s entry in the case, however, suggests that Bowdoin’s days as a pro se litigant have come to an end.
Meanwhile, the Surf’s Up post that quoted from the member’s downline and passed along confusing information urged ASD members to begin yet another letter-writing campaign on Bowdoin’s behalf.
Here is the downline information being circulated at Surf’s Up (italics added):
Once again, seems we might be on the cusp of getting our money return to the rightful owners – you and I. Recently the Judge has ordered Cowden to charge Andy Bowdin or end it and return the money.
Now is a great time to put on the pressure. Write another letter today expressing your need for your money return and how you feel about them taking our money in the first place.
Don’t give up. If we don’t act, apathy could cost us our money. Bad succeeds when good stands down.
If you are writing from Panda point of view, keep in mind that is a separate company from out point of view. Write your letters accordingly.
Don’t write a book. Succinctly write the wrongness of the gov taking our money, keeping it and creating the victims they claim they were protecting. Please use your own words and be brief. Just get your side counted.
Include copies to:
William Cowden/Jeffery Taylor
United States Attorney’s Office
555 4th Street, NW
Washington, DC 20530
Also write and send copies to the Ombudsman of the DOJ. This is the office that’s charge with protecting us from abuse from within the DOJ. File a complaint in regards to any perceived wrong-doing by the attorney generals in this case. http://www.usdoj.gov/usao/eousa/vr/
Despite the claim in the email that the money seized by the government belonged to the members, Bowdoin has argued in court that the money belonged to him and his companies.
Both Bowdoin and the prosecution agree that the members do not own the seized funds.
UPDATED: 11:40 A.M. EDT (U.S.A.) AdSurfDaily President Andy Bowdoin has a new paid attorney: Charles A. Murray of Bonita Springs, Fla.
Murray filed an appearance notice today in the civil-forfeiture cased filed in August against money and other assets tied to ASD.
The appearance notice says that Murray will represent Bowdoin and two corporate entities: AdSurfDaily Inc. and Bowdoin/Harris Enterprises Inc.
This may mean an end to Bowdoin’s pro se pleadings in the case. Bowdoin began to act as his own attorney in February. Judge Rosemary Collyer informed him, through his prior counsel, that the corporate entities could not proceed pro se.
Michael Fayad, one of Bowdoin’s original attorneys, filed a motion today to correct an appearance notice from August that erroneously listed Bowdoin and his firms as “Defendants,” rather than “Claimants.”
Murray says in his filing that he is taking over for Fayad’s firm, Akerman Senterfitt. Akerman Senterfitt filed a motion last week, asking the court to resign as Bowdoin’s counsel, saying its representation of him amid the circumstances was unreasonably difficult.
Bowdoin did not consult with the firm before proceeding as a pro se litigant, Akerman Senterfitt said.
In one of Bowdoin’s pro se pleadings, he acknowledged that ASD was operating illegally at the time of the August seizure of tens of millions of dollars. He advised the court, however, that he had been denied “fair notice” that his conduct was illegal.
Prosecutors responded by saying ignorance of the law is no excuse and that the government had no duty to inform Bowdoin that fraud is illegal.
Another Bowdoin pro se filing seeks to reverse his January decision — while working with paid counsel — to submit to the forfeiture and not raise the issue again. Collyer advised Bowdoin that he had not raised points of law to supplement his argument, in essence telling him that the motion alone might not be enough for her to grant his motion to reopen the forfeiture litigation.
Using her discretion, Collyer had to construe a meaning for Bowdoin’s pro se motion — a somewhat common occurence when pro se litigants are filing papers. Pro se pleadings often are vague, sometimes making baffling leaps of logic and tortured arguments.
In late February, AdViewGlobal (AVG), a surf firm with close ties to ASD, introduced Pro Advocate Group to members. Pro Advocate Group says it can help people practice law without a license.
Karl Dahlstrom is associated with Pro Advocate Group. Dahlstrom was sentenced to 78 months in federal prison in the 1990s for securities fraud. Bowdoin’s pro se pleadings began at the same time AVG was introducing Pro Advocate Group to members.
UPDATED 7:12 P.M. EDT (U.S.A.) Facing an April 15 deadline to seek class-action certification in a racketeering lawsuit against AdSurfDaily President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby, three members of ASD have asked a federal judge for more time.
Meanwhile, the plaintiffs have informed U.S. District Judge Rosemary Collyer that they intend to use the discovery process to seek facts concerning ASD’s management and operations, including how ASD interacted with employees, officers and “other representatives” of ASD.
Mike Collins, Frank Greene and Natures Discount Inc. — all former ASD customers — said they have not been able to serve Bowdoin, Garner or Busby.
The lawsuit was filed Jan. 15.
“Because Defendants AdSurfDaily, Inc., Thomas [Andy] Bowdoin, Clarence Busby and Robert Garner failed to respond to the Notices of Waiver of Service sent by Plaintiffs, Plaintiffs issued summons for these Defendants and are still in the process of attempting to perfect service on these Defendants,” Collins, Greene and Natures Discount said.
Other filing deadlines have been pushed back because of the plaintiffs’ inability to serve the RICO defendants. Bank of America, a non-RICO defendant in the case, joined the plaintiffs’ in a motion last month to extend time on other issues created by the inability to serve Bowdoin, Garner and Busby.
Bowdoin, Busby and Garner were accused in the lawsuit of conspiring with unnamed parties in organized efforts to defraud.
The RICO complaint alleged the men were involved in “other†schemes beyond ASD, Golden Panda and LaFuenteDinero, and have “committed or aided and abetted in the commission of countless acts of racketeering activity,†including indictable offenses.
“The ASD Enterprise provides the RICO Defendants and other unnamed co-conspirators with a system by which to operate fraudulent schemes such as ASD, to hide the fraudulent nature of the schemes, and to profit from such schemes,†the plaintiffs alleged. “Each RICO Defendant agreed to perform services of a kind which facilitated the operation of the ASD Enterprise and facilitated the RICO Defendants and others in the operation of various fraudulent schemes, including ASD.â€
Why the complaint hasn’t been served is unclear. What is clear is that the plaintiffs’ have notified the court that they intend to ask for discovery, “which will focus on a few key factual areas necessary to establish the elements of certification.”
Here is a preliminary list of what the plaintiffs intend to seek through discovery:
Representations made regarding the individuals associated with ASD.
Nature of ASD’s business and the opportunity to earn money.
Types of services offered.
Management and operation of ASD.
The relationship and interaction among employees, officers and other representatives of ASD and BOA, Bowdoin, Busby and Garner.
Facts and circumstances surrounding the opening, maintenance and account activity of BOA accounts in the names of ASD, Bowdoin, Busby and/or Garner.
Prosecutors have responded to ASD President Andy Bowdoin’s pro se claim that he was denied fair notice that the conduct of ASD was illegal, saying ignorance of the law is no excuse.
At the same time, prosecutors asserted Bowdoin’s own past as a criminal defendant turned his argument that the case should be dismissed on its ear.
“In this case, Mr. Bowdoin’s motion to dismiss on vagueness grounds is all the more
remarkable because he was previously arrested for having used money he took from individuals who invested in a new opportunity he had been promoting to repay debts he owed to individuals who lost money after investing with him in a different venture,” prosecutors said, referring to Bowdoin’s arrest in Alabama in the 1990s.
“Mr. Bowdoin even acknowledged that he lost money in a similar auto-surf ‘Ponzi’ scam that the government closed before he started ASD,” prosecutors said. “The ‘I forgot what I knew’ inference Mr. Bowdoin would have this Court draw certainly provides no basis for dismissing the government’s wire fraud allegations on vagueness grounds.”
And Bowdoin was tilting at windmills when he asserted that the government was required to warn him that wire fraud, money-laundering and running a Ponzi scheme were illegal.
“Mr. Bowdoin’s assertion that he ‘did not know or realize that his conduct was illegal’ cannot survive a moment’s analysis,” prosecutors said. “The central claim underpinning the government’s forfeiture action is that Ad Surf Daily (ASD) and Golden Panda (GP) were unlawful, fraudulent ventures operating over the Internet.
“The government’s complaint alleges that ASD and GP operators falsely stated that they were offering legitimate business opportunities in which ‘members’ could invest and expect a profitable return of at least 125%, at the rate of about 1% per day, on each dollar invested,” prosecutors continued.
“But, as the two related forfeiture complaints show, ASD and GP had no actual independent operations and, thus, earned no profits from which to pay out the returns they promised to their members-investors. Rather, in a classic ‘Ponzi’ style scheme, money from investments by later ‘members’ was (and would have been) used to redeem promises of fantastical returns made to earlier member-investors.”
Bowdoin Piled Lies On Lies, Prosecutors Claim
Andy Bowdoin is only pretending to be ignorant, prosecutors said.
“At bottom, Mr. Bowdoin’s protestations of ignorance are yet another lie: he not only knew that he lacked sufficient revenue to pay the returns he promised, he knew the revenue numbers he posted were made-up. With such knowledge, and given that Mr. Bowdoin does not deny having used the Internet to publicize his false promises and misrepresentations, his argument for dismissal on void-for-vagueness principles is meritless,” prosecutors said.
In walking back Bowdoin’s pro se pleading, prosecutors said that Bowdoin appears to be arguing that he should be permitted to lie with impunity and keep money he collected as a result of his lies.
“To examine Mr. Bowdoin’s proposition, at the outset, the Court should recall precisely
what the government has alleged in seeking forfeiture in this civil action: the defendants in this case, several parcels of real property and millions of dollars — were amassed through a wire fraud. In particular, the government asserts that Mr. Bowdoin ran a ‘Ponzi’ style scam that made false promises to deceive investors into sending their money off to Mr. Bowdoin and his associates.
“The government asserts that Mr. Bowdoin and his associates failed to tell the investors that ASD was merely shuffling their money — that it had no true profits with which to
pay the profitable returns it promised them. In light of the government’s allegations here, Mr. Bowdoin seems to be asserting (1) that he did not know that it was illegal for him to lie to investors in order to cause them to send him their money in the first place, and (2) that he should therefore get to keep all of the money he secured by lying. He offers, not surprisingly, no authority for his proposition.”
Prosecutors cited law and precedent to back their claims, arguing that Bowdoin was making vague, disingenuous claims, including the claim that he is a “defendant” in a criminal prosecution when the forfeiture case resides in civil court.
“This is a civil forfeiture action, not a criminal prosecution, so Mr. Bowdoin’s references to himself as the ‘defendant’ are miscast,” prosecutors said.
“Thus, citations to precedent dismissing criminal prosecutions are not strictly apposite to this case. Properly speaking, the defendants in this case are not Mr. Bowdoin or his confederates at Ad-Surf Daily or Golden Panda, but the real properties and many millions of dollars garnered in a ‘Ponzi’ style fraud.
“Ironically, even on its own terms, Mr. Bowdoin’s pro se filing cites only fatally vague generalities. Examples include: ‘[i]n criminal prosecution, unclarity alone is enough to resolve the doubt in favor of the defendant’ (citation omitted); ‘[t]he ‘rule of lenity’ is a principle of statutory construction which provides that criminal statutes must be narrowly construed, and any ambiguity be resolved in favor of lenity’ (citation omitted); and, ‘vice of vagueness in criminal statutes is treachery†(citation omitted),” prosecutors said.
One of the theories about ASD President Andy Bowdoin’s recent series of pro se legal filings in the August civil-forfeiture case is that he is trying to stave the filing of criminal charges by slowing the civil case to a crawl.
Could it be true? Sure. Bowdoin’s pro se pleadings, however, also could be a response to pressure applied by others.
Bowdoin, while still working with paid counsel in January, threw in the towel and submitted to the August forfeiture. He told the court that he did not intend to raise the forfeiture at a later time. Basically he ceded tens of millions of dollars to the government. Bowdoin did not tell the membership at large about his decision. He then vanished from the stage for weeks.
What happened during Bowdoin’s weeks of absence is not a matter of public record, but could be telling.
In late February, Bowdoin suddenly reemerged. He blamed his paid attorneys for poor lawyering, and then proceeded to act as his own attorney. Bowdoin says he now has rescinded his decision to submit to the forfeiture. His paid lawyers, who never withdrew from the case even as Bowdoin was filing pro se pleadings, now have asked the court to withdraw, saying their representation of Bowdoin had become unreasonably difficult. The court has not yet issued an order that permits the paid lawyers to leave the case.
The conventional wisdom that Bowdoin’s pro se reemergence was a bid to delay a criminal indictment could be true — but it could be that and more.
It’s not a stretch to think that some ASD members — perhaps particularly insiders and people who view Bowdoin as a person who owes them a pile of money — were unhappy about his decision to submit to the forfeiture and then keep the news of his decision to himself. Some of these people may view themselves as being at risk of indictment and see Bowdoin’s move as the move of a turncoat.
By pressuring Bowdoin to climb back on the horse, they could be trying to stave off indictments against themselves. There is no doubt that criminals were involved in ASD. What’s not known is just how much leverage criminals could apply to Bowdoin.
For the sake of discussion, let’s say ASD had 50,000 paying members. With an organization of that size, Bowdoin would know very little about the motivations of individual members — and the people who sponsored them into the program. One of the core risks of running an autosurf is not knowing who your neighbors are and how they are capable of behaving.
One piece of wishful thinking often shared by ASD members was that ASD was just one, big, happy family. This notion always struck us as fanciful. If ASD’s paid members were assembled in a 50,000-seat stadium, there is no reason to believe they wouldn’t reflect the best and worst of society — as is typical of large crowds, whether the sport is baseball, football or autosurfing.
Bowdoin is 74. There is a chance that he believes he has more things to fear than just what the government can do to him personally. It is possible that Bowdoin family members could be indicted, for instance. At the same time, it is possible that Bowdoin perceives a threat from some ASD members and has safety concerns.
Would you fear for your safety if you were the public face of a $100 million Ponzi scheme that collected money from all over the world — and you knew only a very small fraction of the people who were sending you all that money? Bowdoin has no real way of knowing if he’s doing business with thugs unknown, criminal gangs or even terrorists.
No one seems to know why Bowdoin hasn’t been served a lawsuit filed in January that alleges racketeering. If it’s a clerical snafu of some sort, it would have to be one that also is affecting the plaintiffs’ ability to serve Bowdoin’s two RICO co-defendants, attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby.
With large sums of money involved, it’s not a stretch to believe that some people owed large sums would not be inclined to accept “rebates aren’t guaranteed” or “the evil government took the money” as excuses.
“Pay up” could be the policy in certain circles.
The conventional wisdom also has held that only traditional autosurf players and people new to Web commerce were players in ASD. That could be largely true, but not universally true. ASD was gaining a head of steam as the U.S. economy was going into steep decline. Legitimate securities brokers could have been using the company to generate cash to hide losses.
We’re not saying that occurred, mind you. At the same time, if legitimate brokers had been stealing from clients and knew those clients were due redemptions, they could have turned to ASD to generate cash flow. If such a group exists, it means clients of legitimate brokers also lost money in ASD — without their knowledge, as was the case with Bernard Madoff.
Some of the amounts reportedly directed at ASD were huge amounts for an ordinary autosurf player. It is possible that investment combines and criminal brokers were using ASD to stave off a Madoff-like day of reckoning.
You’ve likely noticed that AdViewGlobal, a surf with Bowdoin family ties and management in common with ASD, was promoting a 200-percent, matching-bonus program. It very much looks like a cynical bid to raise cash in volume to pay off ASD insiders and strategic shills. ASD did the same thing when it morphed into ASD Cash Generator.
Bowdoin has engaged in behavior that suggests he’ll do almost anything for cash. In the fall, after a judge ruled ASD hadn’t demonstrated it was a legal enterprise, Bowdoin pitched VOIP service to members.
Recently he appeared in a video for Paperless Access, which appears to be an upstart surf firm. Bowdoin told viewers they could use Paperless Access to recapture money seized by the government last year in the ASD probe.
There obviously is no arm’s-length distance between ASD and AVG, despite AVG’s tortured claims to the contrary. What’s less clear is the precise reason AVG exists.
One reason might be as a means to pay off debt racked up by ASD. Another reason might be because the people who are running it are monumentally stupid. It launched while an active criminal investigation and a RICO probe were under way, with Bowdoin and other ASD insiders, including Bowdoin family members and ASD executives, as likely targets.
AVG’s launch happened in full public view. Known ASD participants were pushing it. Suggestions were made that ASD accounts might get ported over to AVG. Bowdoin might as well have taken out an ad in the New York Times to announce he had decided to commit himself to a life of crime.
So much about ASD boggles the mind — and yet so much is not known.
What is known is that tens of millions of dollars are involved. And it’s also known that large sums of money can make people do crazy things.
UPDATED 1:45 P.M. EDT (U.S.A.) Language federal prosecutors used in a December forfeiture complaint against assets tied to AdSurfDaily might help explain the emergence of AdViewGlobal (AVG), a surf firm with common management and close ties to ASD.
Meanwhile, court filings by ASD President Andy Bowdoin continue to electrify some ASD members, but Bowdoin’s once-considerable support base is diminishing in size rapidly. Evidence continues to mount that fewer and fewer people are buying what Bowdoin is selling in his various pro se legal pleadings.
We’ve written about this before. Today we’ll do so again because Bowdoin’s filings never add clarity. They add only clutter. Even so, Bowdoin’s few remaining champions at the Pro-ASD Surf’s up forum always can be relied upon to cloud the issues further.
But clutter by Bowdoin and other pro se litigants in the ASD civil-forfeiture case is delaying justice for rank-and-file ASD members. The case involving money and property seized by the government in August nearly was litigated to conclusion in January, when Bowdoin formally submitted to the forfeiture. The government was on the cusp of implementing an orderly process through which ASD’s assets would be liquidated to create a restitution pool.
All of that is on hold now because of Bowdoin’s emergence in February as a pro se litigant.
Points To Ponder
A second forfeiture case filed in December against assets tied to ASD is proceeding on a separate track — one that appears to have been designed by prosecutors as leverage to make ASD members as “whole” as possible. Prosecutors asserted that some of Bowdoin’s family members, including his wife and stepson, had used ASD money to fuel extravagant spending, including the wholesale retirement of a $157,216 mortgage on the home of George Harris, Bowdoin’s stepson.
George Harris is listed as a trustee for AVG. Gary Talbert, a former ASD executive, was chief executive officer of AVG before resigning suddenly last month. The resignation was announced after Bowdoin acknowledged in a pro se pleading that ASD was operating illegally when agents seized tens of millions of dollars in August.
Nearly $30,000 also was used to buy a car for George Harris and his wife, Judy Harris. About $33,000 was used to buy a car for an ASD employee, and Bowdoin himself parked a Lincoln valued at nearly $50,000 in his driveway, prosecutors said.
The purchase of the Lincoln was telling. Bowdoin had an appetite for expensive cars when he was charged in Alabama in the 1990s with 89 separate counts of securities fraud, according to his victims.
Bowdoin never told ASD members about the Alabama fraud charges when he was busy collecting money from them. Nor did he tell his Alabama victims of his newfound ASD wealth. The money used to purchase the Lincoln would have been more than enough for Bowdoin to retire the remaining restitution due Alabama victims from more than a decade ago.
He chose the Lincoln instead.
In the end, though, it’s probably a good thing that Bowdoin chose the Lincoln over his Alabama victims. The government views ASD’s assets as the proceeds of an illegal enterprise. In theory, the government could claw back any ASD money sent to the victims, who’d then hold the unenviable distinction of having been ripped off by Bowdoin twice.
Contemplating that outcome is just plain sad — but there’s more. What’s left could explain the formation of AdViewGlobal and how close Bowdoin associates could be using it to line their pockets while Bowdoin files one pro se pleading after another in the ASD case.
The ASD/AVG Tie
Prosecutors say Bowdoin did not file a police report when more than $1 million went missing from ASD at the purported hands of “Russian” hackers. Nor did Bowdoin file a police report when other money went missing from ASD.
What Bowdoin did, according to prosecutors, was engage attorney Robert Garner to figure new and better ways to steal from ASD members. This led to the production of a video that sanitized the ASD business model. Before long, ASD couldn’t even get all of the cash it was collecting to the bank.
Those Pesky Details
Certain details from the December forfeiture complaint haven’t gotten much play on Blogs and forums. They may prove to be critical, however, because they may explain how AdViewGlobal (AVG) came into being.
Prelaunch promotions for AVG began to appear online during the second week of December. Early promotions suggested ASD members would be able to port their ASD earnings/expenditures to AVG. The government filed the second forfeiture complaint Dec. 19, just as AVG buzz was building.
Included in the December complaint were assertions that ASD had played the rebuilding card before, telling members that a renamed and reconstituted version of ASD would emerge because cash-flow problems had crippled the original enterprise. The renamed version would be called the ASD “Cash Generator.”
Screen shot of Page 21 from December forfeiture complaint against assets tied to ASD. Andy Bowdoin, while ASD was in failure mode, explains a process by which ASD accounts would be transferred to ASD "Cash Generator. Early promotions for AdViewGlobal (AVG), a surf with close ASD ties, suggested account balances from ASD Cash Generator might be ported to AVG.
Prosecutors very well may have a recording and/or a transcript of an ASD Cash Generator pitch given by Bowdoin because some quotations from the December complaint are attributed directly to Bowdoin andnotes from a transcriptionist appear to be contained within a document prosecutors are using. The information sounds very much like the early pitches for AVG, with references to transferring account balances from one entity to the other.
AVG may be nothing more than ASD history repeating itself in a different form, with insiders receiving benefits hidden from rank-and-file members.
Here is what prosecutors said in the December complaint (italics added to emphasize quotations from Bowdoin and bold added to emphasize what appears to be notes from a transcriptionist):
“To avoid regulatory scrutiny when ASD’s first iteration collapsed, Mr. Bowdoin explained that account balances of the prior operation would be transferred to the new operation, allowing the old program’s participants to share in the new revenue stream as new funds came into the new operation.
“In discussing the transferring of such account balances, Mr. Bowdoin explained:
‘You have heard us talk about not overwhelming the system by not transferring all of the ad packages from the old site at one time. If we did that it would never get off the ground. To avoid that from happening, we must transfer the balances in increments.
‘Here is the plan our Accountant suggested. Based on the sales that we now have, transfer over 150,000 ad packages which will be about 5%. Based on $3,000 per day in sales we can pay 1%. 50% of $3,000 is $1,500 which is 1% of the 150,000.
‘We have enough sales now to start at $3,000 per day for the first 5 days and the $1,500 on Sat. And [sic] Sun.
‘As our sales increase in increments of $3,000 per day we will transfer another 150,000 ad purchases.
‘In other words, when sales reach $6,000 per day we will transfer another 150,00 [sic] ad purchases [strike out “ad purchases”], when they reach $9,000 per day we will transfer over [strike out “over”] another 150,000. Then when they start expiring we will transfer more and we will continue this until we get all of the balances transferred.
‘All credits for surfing will be transferred. All pending cash outs will be paid from profits from the new cash generator site and then all cash balances on the old site will also be paid from profits. The time for paying pending cash outs and cash balances will be determined by Sales.’
“Mr. Bowdoin never told later participants with ASD that the funds they paid to ASD were being used to pay returns to participants with AdSurfDaily who failed to receive promised returns because one or more Russians had defrauded AdSurfDaily,” prosecutors said.
In essence, prosecutors are saying that ASD emerged as ASD “Cash Generator” because Andy Bowdoin owed participants a pile of money he couldn’t pay. He solved the problem by porting old obligations to the new company, but never told new members they were paying the freight for the original group of insiders and members who were not in the loop.
Bowdoin avoided getting sued by using this approach. He also avoided trouble from insiders to whom large sums were owed, in effect creating a new generation of victims so his original insiders could get paid.
Some of those insiders now appear to have become players in AVG — ASD history repeating itself in a different form.
The government is right about the ASD case. Its duty is to stop the “rebates aren’t guaranteed” madness before huge criminal combines begin to use it as a license to take money and keep it by hiding behind a disclaimer that gives them a license to steal.
UPDATED 8:33 P.M. EDT (U.S.A.) A federal judge said one of ASD President Andy Bowdoin’s pro se pleadings to reverse his earlier decision to submit to the forfeiture of proceeds seized by the government in a Ponzi scheme case cited no law.
Bowdoin’s pleading appeared to presume that the filing alone achieved the goal of reversing his decision to submit to the forfeiture, the judge implied.
“Mr. Bowdoin cites no law for the proposition that his ‘Notice of Rescission and Withdrawal of Release of Claims to Seized Property & Consent to Forfeiture’ ‘legally accomplishe[s]’ his goal of re-instituting Claimants’ claims to the defendant property which the Court ordered withdrawn on January 22, 2009 pursuant to Claimants’ own motion,” Judge Rosemary Collyer said.
In an order to show cause issued late this afternoon, Collyer said she construed Bowdoin’s filing as a “motion to vacate” a previous order she issued to permit Bowdoin to withdraw his claim to the seized proceeds.
It is not unusual for a judge to exercise discretion and construe the meaning of a motion filed by a pro se litigant. Pro se motions typically are prepared by nonexperts and sometimes make tremendous leaps of logic or do not include supporting law. Bowdoin, who is not an attorney, has been acting as his own attorney since late February.
Collyer ordered the prosecution to show cause why she should not reverse her previous order by April 24. She also ordered prosecutors to respond to Bowdoin motions to dismiss the case for lack of jurisdiction and lack of fair notice by April 24.
UPDATED 10:37 A.M. EDT (U.S.A.) AdSurfDaily attorney Robert Garner has been served with a lawsuit alleging he engaged in racketeering with ASD President Andy Bowdoin and Golden Panda Ad Builder President Clarence Busby.
