When the Securities and Exchange Commission charged R. Allen Stanford Feb. 17 with operating a multibillion-dollar fraud scheme through his bank in Antigua, the news created banking pandemonium on the tiny Caribbean island and also in Panama.
In the days that followed, a surf known as BizAdSplash referenced the banking situation in Panama without referencing Stanford by name.
BizAdSplash: Trouble in Panama.
BizAdSplash was one of three surfs that came to life in the months following the seizure of funds tied to AdSurfDaily Inc., a surf registered in the United States and accused of running a $100 million Ponzi scheme.
One of the key sales points of BizAdSplash was its purported offshore location. Two other surfs — AdViewGlobal and AdGateWorld — also bragged about being offshore. Promoters for the surfs said the offshore locations provided protection from the SEC, the IRS and state attorneys general. Promotions for the new surfs repeatedly referenced ASD.
“We want to let you know that even though our banks in Panama are closed for the next day and half, the payment processors are NOT CLOSED,” BizAdSplash said on Feb. 24. “You can still buy Ad Packages through your chosen payment processor. You will get your 100% match today and will continue into next week.
“So,” BizAdSplash continued, “if you purchased new Ad Packages yesterday from outside your Cash Balance, you received a 100% matching bonus.
“This 100% matching bonus will continue on today, through the weekend and on through Friday, March 6th!!!” the surf exclaimed.
On Feb. 27 — just three days later — BizAdSplash told customers it was ending its affiliation with StrictPay, a payment processor with Panamanian ties, but again did not mention Stanford or refer to the regional banking crisis.
“We are suspending the use of the Strict Pay Payment processor,” BizAdSplash said. “This is due to Strict Pay having some technical difficulties at this time. If you have requested a cash out using Strict Pay this past week, please change this and any future cash out request to one of the following: Alert Pay, Solid Trust Pay or Bank Wire. Please note that using the bank wire, the minimum to cash out is $1,000. Until Strict Pay has corrected the problems we will not allow this processor to be available.”
Alert Pay and Solid Trust Pay are payment processors headquartered in Canada, and friendly to the autosurf trade.
AdSurfDaily is another surf with Caribbean ties. Federal prosecutors said ASD had more than $1 million on deposit in Antigua. After prosecutors made the claim, ASD President Andy Bowdoin told members that $500,000 of the sum was a deposit that enabled ASD to process credit-card orders.
Bowdoin never referenced Antigua until prosecutors referenced it first.
ASD said it relied on the expert guidance of attorney Robert F. Garner. The Feds now say Garner was a shill for ASD, and Garner has advertised his legal services to help companies establish a presence offshore.
The extent of the problem the alleged Stanford Ponzi has caused surfs is unclear. But several surfs that purport to be operating offshore have collapsed in recent days
An attorney accused of racketeering in a lawsuit by members of AdSurfDaily and accused by prosecutors of shilling for ASD President Andy Bowdoin once advertised his services in “Escape From America Magazine.”
The magazine is part of a website known as EscapeArtist.com.
Robert F. Garner identified himself a “[f]ormer General Counsel for major Miami-based securities firm with Latin and South American focus,” according to his ad. He listed the URL for his law office in Greensboro, North Carolina, saying he also specialized in “[r]ecoveries from scam.”
Garner is licensed to practice law in North Carolina. But web records show he has not informed the North Carolina bar this year whether he is in private practice or carries malpractice insurance — two things he is required to do.
“Each active member of the North Carolina State Bar is required to advise the State Bar annually whether he or she is engaged in private practice and whether he or she is covered by legal malpractice insurance,” the bar says on its website. Garner’s entries for 2009 are listed “no response.”
Garner’s magazine ad ran in Vol. 5, Issue 11, of Escape From America. It was published in November 2003, alongside ads for tax havens, financial, telephone and real estate services for expatriates, and pitches for people to move to Belize and elsewhere.
“YOUR OWN OFFSHORE BANK ACCOUNT IS WAITING FOR YOU,” promised one of the ads in the publication.
In December, federal prosecutors filed a second forfeiture complaint against assets tied to ASD, including a home and personal property acquired by Bowdoin family members.
Bowdoin’s wife, Edna Faye Bowdoin, and her son, George Harris, used ASD money to open an account in a separate bank. Harris used $157,216 of the opening deposit to pay off the mortgage on the Tallahassee home he shared with his wife, prosecutors said.
Garner shilled for Andy Bowdoin in an ASD video, prosecutors said.
“ASD actually [employed] Garner to participate in a marketing video that ASD crafted to reassure hesitant prospects of ASD’s lawfulness, not for his expertise in ensuring ASD’s compliance with applicable laws,†prosecutors said.
“Messrs. Bowdoin and Garner said that ASD’s operations had been reviewed carefully by a team of legal experts to ensure compliance with all applicable laws,†prosecutors said.
“Messrs. Bowdoin and Garner knew the representations made in the video were material to prospective participants, made-up, and false,†prosecutors said. “The misrepresentations led to a significant expansion of investment in ASD and related auto-surf investment programs.â€
In fact, prosecutors said, ASD didn’t hire compliance attorneys during the first 20 months of its existence, waiting until after it started to collect enormous sums at rallies last year to address compliance with federal securities laws and other laws.
A RICO complaint brought against Bowdoin, Garner and Golden Panda Ad Builder President Clarence Busby in January accuses the men of organized efforts to defraud. The lawsuit was filed by Mike Collins of Savage, Minn.; Frank Greene of Washington, D.C.; and Natures Discount of Aventura, Fla.
The 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€
One entity associated with ASD — a surf known as AdViewGlobal — lists former ASD executive Gary Talbert as its chief executive officer. Chuck Osmin, a former ASD customer-service representative who said he expected to earn $2,000 a day from ASD, also now works for AVG.
Meanwhile, AVG lists George Harris as a trustee. AVG has turned to a firm known as Pro Advocate Group for advice on becoming a private members’ association. Pro Advocate Group is associated with Karl Dahlstom. In 1997, Dahlstrom was sentenced to 78 months in federal prison for his participation in a securities scheme.
An attorney named Robert F. Garner — with ties to Florida and North Carolina –Â is referenced in documents published by the U.S. Senate pertaining to a 2001 investigation into international money-laundering.
UPDATED 12:56 A.M. EST (Feb. 28, U.S.A.) Documents filed by federal prosecutors in the AdSurfDaily case pointedly refer to Andy Bowdoin’s wife as “Edna Faye Bowdoin.”
But other documents on file with the Florida Department of State refer to her as “Faye S. Bowdoin.” Other documents in the Florida Department of State and elsewhere in Florida refer to her as “Faye S. Harris.”
“Harris” is the last name of a man to whom she once was married and also the name of her son, George Harris III.
Adding to the mystery is the building in Quincy, Fla., that once was home to “Faye’s Florist” and later became home to AdSurfDaily. Documents from 1996 list the shop’s address address as 11 S. Calhoun Street, Quincy, Fla. 32351.
AdSurfDaily, however, listed its address as 13 S. Calhoun Street, even though it was in the same building once occupied by Faye’s Florist. Adding yet another layer of mystery is that Faye S. Bowdoin is listed in state records as the sole board member of Bowdoin Harris/Enterprises Inc., which became a corporation in Florida in June 2008, about two months before the seizure of ASD’s assets.
Like ASD, Bowdoin/Harris Enterprises used the 13. S. Calhoun address — but 12 years earlier, Faye S. Harris listed the corporate address for “Faye’s Florist” as 11 S. Calhoun Street.
Federal prosecutors said the 13 S. Calhoun Street address listed for ASD was bogus. In December, prosecutors filed a second forfeiture complaint against assets linked to ASD, including property purchased by Bowdoin/Harris Enterprises using ASD money.
Adding yet another layer of mystery is a name that appears on documents Faye’s Florist filed with the state in 1996. The name “Thomas, Andrew” of 7. West Washington St., Suite 4, Quincy, Fla. 32351, appears as the name of the registered agent for Faye’s Florist.
Andy Bowdoin’s given name is Thomas Anderson Bowdoin Jr. ASD members knew him as “Andy.” The appearance of the name “Thomas, Andrew” — with the last name first, meaning the actual name is “Andrew Thomas” — on the 1996 documents from Faye’s Florist suggests that Andy Bowdoin could be “Andrew Thomas.”
That is not for certain, of course. What is for certain, however, is that law enforcement would find such a name on a document entirely too coincidental not to investigate thoroughly.
There has to be a reason why both ASD and Bowdoin/Harris Enterprises used a nonexistent address — 13 S. Calhoun St. — in public records. And unless Edna Faye Bowdoin and Faye S. Bowdoin are two separate people, there has to be a reason why Mrs. Bowdoin is using two separate names and two addresses for the same building.
Prosecutors said that Bowdoin/Harris Enterprises was a bid by Andy Bowdoin and Edna Faye Bowdoin to hide assets. What’s unclear, however, was what motivated the need to hide assets.
If “Andy Bowdoin” is the “Andrew Thomas” listed in the 1996 documents for Faye’s Florist, however, it suggests an elaborate attempt to hide assets dating back at least 12 years. The document just as easily could have carried the name “Thomas Anderson Bowdoin” Jr. if Andy Bowdoin and Andrew Thomas are one in the same.
The question is why did it not if they are one in the same.
Andy Bowdoin was charged with defrauding customers in an Alabama securities scheme in the 1990s, and was still making incremental payments to victims even as ASD was generating tens of millions of dollars last year.
At the time of the August seizure, he still owed the victims about $45,000. Just a few days prior to the seizure Bowdoin paid nearly $50,000 for a new Lincoln. A month later he sent his Alabama victims a check for $100.
Edna Faye Bowdoin’s son, George Harris, is listed as the registered agent for Bowdoin/Harris Enterprises. Prosecutors said he and his mother used nearly $180,000 in ASD funds from Bank of America to open an account at Capital City Bank on June 10, 2008, just days after Bowdoin/Harris Enterprises was formed.
On June 23, 2008, George Harris used $157,216 of the money in the new account to pay off the mortgage on the Tallahasse home he shared with his wife, Judy Harris, prosecutors said.
Here, below, some screen shots of documents:
1.
Corporate filing from 1996 showing address of Faye's Florist as 11 S. Calhoun Street.
2.
Signature of Faye S. Harris in 1996 filing for Faye's Florist.
3.
Document signed Faye S. Bowdoin in 2008 corporate filing for Bowdoin/Harris Enterprises that shows the address as 13 S. Calhoun Street. When Faye's Florist was open, it used 11 S. Calhoun Street as its address.
4.
Document from June 2008 showing George Harris as registered agent for Bowdoin/Harris Enterprises.
5.
Andy Bowdoin lists 13 S. Calhoun as ASD's address in 2008 filing with Florida Department of State.
Today mostly was a day for thinking, not writing. Maddy the Wonder Puppy accompanied me this morning on a drive to my sister’s house.
Maddy, at 11 months, hasn’t gotten any better in automobiles. She started whining the moment I backed out of the garage. Not even her favorite blankets — a blue one and a tan one — provided her any comfort. Maddy is like Linus when it comes to her tan blanket, which is to say it’s virtually her constant companion.
As it turned out, the journey proved equally unkind to the blankets; I’ll spare you the details, except to say the blankets are clean again.
My sister, brother-in-law and niece fussed over Maddy, and she soon returned to fine form. Then we took care of family errands, including an unplanned errand. By earlier arrangement, dinner was set for 5 p.m., and I had some time to work when we finished our running around. My niece let me use her computer, and I was able to keep track of ASD and other scam developments.
Work normally is a joy, but it just wasn’t to be today. It was hard to concentrate at a foreign computer, especially when I knew Maddy was showing off upstairs. The girl loves spectators, especially when they’re doling out the treats.
But the unplanned side trip to the BIG DRYER at the coin-operated laundry did pay a dividend.
Outside the laundry it struck me that the recent reports of follow-up seizures in the ASD case very well could be true. Such seizures would follow the general outline of the e-Gold prosecution, a money-laundering case, like ASD. Basically the prosecutors are calling home dirty money from autosurfs and HYIPs that used e-Gold. Autosurfs and HYIPs are criminal enterprises, and the prosecutors alleged in the ASD case that ASD President Andy Bowdoin was the head of a criminal enterprise.
As is the case with e-Gold, prosecutors might be calling back dirty ASD money. I haven’t found any paperwork on it yet, but that doesn’t mean paperwork doesn’t exist. It could be slow to enter the system.
It’s funny what occurs to you when you’re standing on a sidewalk outside a coin-operated laundry waiting for a BIG DRYER to refluff a blue blanket and a tan blanket.
One of the things that occurred to me was that some ASD members were actively discouraging other members from filling out the government form. The problem with that, of course, was that it looked like an attempt to obstruct justice. It also occurred to me that some people decided on their own that the government form wasn’t good enough and created their own form, telling people not to use the government form because it was a trick.
And it also occurred to me that some ASD employees and volunteers were getting paid in “ad packs” as opposed to wages, which means the rank-and-file members were shouldering the burden for the compounding and additional deficits Bowdoin created — and further means that money-laundering likely was taking place at multiple points in the banking system.
Meanwhile, it occurred to me that some ASD members were selling “ad packs” for cash and then transferring the value of the “ad packs” by using ASD’s internal system, which means they had the ability to use ASD itself to launder money.
But what occured to me most was that prosecutorial clawbacks COULD BE A SIGN THAT THERE ARE SEALED CRIMINAL INDICTMENTS IN THE ASD CASE.
We feel for the residents of North Salem, N.Y., and the residents of Quincy, Fla. Fate has put them in the media glare. Talk at Westchester County lunch counters is not about how the Mets or Yankees or Red Sox will do this year. It’s about how Paul Greenwood, the town supervisor of North Salem, got arrested for fleecing universities and public-employee pension funds out of perhaps hundreds of millions of dollars.
Meanwhile, in Gadsden County, the talk in Quincy is less about how Florida State will perform on the football field this fall in nearby Tallahassee and more about how Andy Bowdoin was accused of running a $100 million Ponzi scheme.
Dozens of people in Quincy are out of work because of Bowdoin. Some of them weren’t even earning wages. They were being paid with what Bowdoin called “ad packs.” Prosecutors called them unregistered securities.
Greenwood and Bowdoin have embarrassed their communities, putting on a show before their fraud was exposed. Greenwood declined to take a salary for overseeing the town. Bowdoin, for his part, let the local Chamber of Commerce do his bidding — never telling local executives about a previous felony conviction for securities fraud.
Paul Greenwood.
Local merchants were stunned when prosecutors announced Bowdoin was the head of an international wire-fraud and money-laundering operation disguised as an advertising service. He’d secreted away money on the Caribbean island nation of Antigua — now in the news because of Allen Stanford — while at the same time paying $800,000 cash for the old Masonic Hall in town, prosecutors said.
Quincy viewed him as a savior; North Salem viewed Greenwood as a leader. Prosecutors now say he spent up to $80,000 on individual Steiff Teddy bears. Carnegie Mellon University, the University of Pittsburgh, the Iowa Public Employees Retirement System and pension funds in Sacramento and North Dakota now might have to insist that stuffed animals be sold to be made whole.
If “whole” is possible, that is.
Imagine what it’s like to have to rely on the sale of Teddy bears at auction to offset pension-fund losses. Such are the ugly incongruities of the times.
UPDATE: 4:59 P.M. EST (U.S.A.) The Surf’s Up Forum now says the government has seized or frozen two bank accounts of ASD members. It did not provide the source, and it encouraged members not to identify the owners of the accounts. Here, below, our earlier post . . .
EDITOR’S NOTE: It’s getting harder and harder to write about the levels of absurdity surrounding the AdSurfDaily case. Along those lines, it’s getting harder and harder to track all the conspiracy theories. The madness of all things ASD is on full display for all the world to see, and there’s no sense trying to sugarcoat it. It is what it is. Make sure you read the caption under the second screen shot below.
Here, below, our main post . . .
Let’s start with some autosurf news — or, more precisely, the lack of autosurf news.
Yesterday a poster at the Pro-AdSurfDaily “Surf’s Up” forum said the government was in the process of seizing bank accounts from individual ASD participants. Surf’s Up, at first, appeared to confirm the reports — and then a Mod quickly deleted the post. The issue was re-posted, and was deleted again. It got posted a third time as an entry in a separate thread, and Surf’s Up then said it was checking on the reports because it didn’t want to spread a panic by publishing unverifiable information. It then got posted again as a separate thread, and again was deleted.
Our longtime readers might want to laugh out loud or perhaps even hurl right now at the thought that Surf’s Up didn’t want to publish unverifiable information. It’s enough to make you want to call Letterman or Leno, considering that Surf’s Up routinely publishes unverifiable information, accepts paid advertising from unverifiable surf programs, and openly promotes AdViewGlobal (AVG), which is desperately trying to keep its ownership structure a secret.
AdViewGlobal says Quincy is its home.
It’s already too late for AVG should the government wish to make an example of it. The surf exposed itself out of the gate because greedy racketeers are in charge and because people who admire greedy racketeers are doing their bidding. AVG couldn’t get this genie back in the bottle if it tried — and it has tried — thus opening itself up to even more civil and criminal charges.
Gary Talbert was an ASD executive and submitted a sworn affidavit in the ASD case. AVG, a surf that came to life in the aftermath of the government's seizure of Andy Bowdoin's assets, identified Talbert as its CEO in a news release earlier this month in which it also made the self-defeating claim to have no ties to ASD. The news release was issued by a former ASD customer-service representative now working in the same capacity for AVG, while also serving as an AVG spokesman. The rep, Chuck Osmin, was a witness for ASD at an evidentiary hearing last fall. He lost money as a result of the government's seizure of ASD's assets. Osmin sent this Blog an email on Jan. 28, prior to the formal launch of AVG, suggesting ASD was OK because it was a "manual" surf, as opposed to an "autosurf." AVG launched a few days later. Osmin then issued a news release on behalf of AVG, identifying Talbert and himself as employees of AVG. The "no ties" claim is demonstrably false. So is any suggestion that ASD or AVG are legal business models because participants have to click on a prompt to get the next ad to load — a "manual" surf. The issue is the sale of unregistered securities via wire in a Ponzi environment. "Manual" surf doesn't get ASD or AVG off the hook for that and is a ridiculous attempt to cloud the issues. On the date of the the AVG launch, we received another email from an ASD supporter who also wanted to educate us on the difference between "manual" surfs and "autosurfs." The sender told us he was asked to contact us.
One thing the owners could do — if they get boxed in by investigators — is to rat out fellow insiders. It is obvious that AVG and ASD have common ties and common management. It’s so right-in-plain-sight obvious that it wouldn’t surprise us at all if the government itself is simply waiting to find the rat of highest value or already is dangling the cheese.
Perhaps by coincidence, Surf’s Up also deleted information a reader had posted from this Blog — a story we had done about the failure of the Premium Ads Club autosurf. Surf’s Up management doesn’t like this Blog and accuses it of bias against ASD.
Our bias is in favor of all the people ASD President Andy Bowdoin ripped off by using a Ponzi scheme model to sell unregistered securities and drafting participants into a conspiracy to commit money-laundering, wire fraud and racketeering — while invoking God to sanitize the “opportunity.”
Surf’s Up is doing the same thing. It’s basically just Bowdoin’s alter ego, perhaps with a degree of separation, but not one that will save the Mods from prosecution should the government decide to reduce the surf “industry” — man, how it pains us to use the word “industry” to describe this criminal business — to its constituent electrons.
In any event, we were unable to confirm the reports that the government was seizing additional bank accounts from ASD members. Given that Surf’s Up at first appeared to confirm the reports and then shifted gears, it is possible that something like this is going on behind the scenes.
It would make sense for the government to do that — and, in January, the government filed reams of additional paperwork in the e-Gold case. Prosecutors appear to be in the process of liquidating ill-gotten gains linked to e-Gold though HYIPs and autosurfs. Nine separate e-Gold actions were filed on Jan. 8 and Jan. 9. They were the prosecutorial equivalent of a clawback.
ASD once used used e-Gold, which was indicted and convicted of facilitating money-laundering — by the very same prosecution team involved in the ASD case, along with other prosecutors. A Secret Service agent in the ASD case is playing a prominent role in the clawback cases and has demonstrated exceptional investigative skills. He clearly knows how to follow the money and has help from people equally skilled in reverse-engineering financial schemes.
“Shortly after publicity surrounding the government’s investigation into e-Gold appeared, ASD discontinued using the e-Gold system as a means for receiving member funds,” prosecutors said in the August forfeiture complaint against assets tied to ASD.
AVG is toast. It will fail even if the government doesn’t take it down. At a minimum, it is conducting customer service for an illegal enterprise from the United States. Wires that run through the United States are being employed to conduct business, and the business model itself is illegal. The only question is when the failure will occur. AVG is running a promotion right now in a bid to collect cash to sustain itself, but it is at the precipice.
So is BizAdSplash, which is no more legal and makes up new rules whenever it sees fit. Like AVG, it fundamentally is drafting customers into a conspiracy to commit wire fraud, money-laundering and racketeering.
The operators underestimated the level of anger non-crackpot members of ASD have at Bowdoin. And they made their market even more narrow by peddling their non-product to the antigovernment crowd, which is a small crowd despite the noise it makes.
Indeed, the ASD case never was about the abuse of government power or politics. Claims to the contrary are smokescreens by people who need to find a scapegoat other than Andy Bowdoin or themselves.
Very few members of the public have any tolerance for Ponzi schemes in these post-Madoff days, and potential participants are seeing themselves on the evening newscast, perhaps wearing handcuffs or being chased by reporters and camera crews. It’s harder to sell Ponzis in this environment. Besides, people are angry at Bowdoin for using God to sanitize theft on a grand scale.
The new surfs can’t collect the type of money Bowdoin collected in this environment, and they can’t prevent panic among members. Panic leads to a run on the bank. The new surfs are trolling for cash in particular odious ways, and you can bet your bottom dollar that the operators are going to take their cut before they worry about sustainability issues.
They’ll do just what Andy Bowdoin did — and what Surf’s Up wants you to do. At this very moment Surf’s Up is trying to rally the troops by telling them to “Expect The Unexpected!”
When Surf’s Up says things such as that, you can bet that something criminally stupid is certain to follow or that ASD will declare an impossibly tortured victory of some sort.
Hats off to Houston Chronicle writer Loren Steffy, who explained economically why cons work.
A con, Steffy explained, works because the con weaves “a tapestry of believable lies.” It’s a pointed, short, highly memorable line that deserves special mention because it puts readers “right there.”
Steffy detailed some of disgraced financier Allen Stanford’s lies in this column. Lots of things in the column reminded us of the Andy Bowdoin case. Bowdoin is the head of AdSurfDaily Inc., a Quincy, Fla.-based company accused of operating a $100 million Ponzi scheme.
Here are some Stanford/Bowdoin parallels:
Friends in high places. Stanford went around saying he’d been knighted by Prince Phillip. Bowdoin went on a tour to showcase a special award he’d received for business acumen from President Bush. It turned out that Buckingham Palace called Stanford on his lie; in fact, he’d been given the title of “Sir” by the prime minister of Antigua, a Caribbean Island nation of 85,000 known for lax banking standards and money-laundering.
In Bowdoin’s case, the U.S. Secret Service called Bowdoin on his friends-in-high-places lie. It turned out that the award he received was an award for writing checks to the National Republican Congressional Committee. Basically, Bowdoin wrote a check for banquet tickets and called it a special honor from the President of the United States. Bowdoin, by the way, had more than $1 million on deposit in Antigua. The Sunday Times reports today that $8 billion is missing from Stanford’s bank and that regulators suspect a Ponzi scheme.
Charities and sports. Stanford “sold” clients on his benevolence. So did Bowdoin, who once gifted 100,000 ASD “ad packs” to a charity. Stanford was big on sports sponsorships. Bowdoin told his faithful that ASD soon would become a sponsor for professional auto racing. Members claimed ASD would have a car in the Indy 500.
Holes in the resume: Stanford claimed to be related to the founders of Stanford University. The school exposed the lie and sued him for trademark infringement. Bowdoin claimed to have operated a string of highly successful businesses. Turned out that one of his highly successful enterprises was at the center of a securities-fraud investigation in Alabama and that Bowdoin and co-scammers had fleeced investors out of hundreds of thousands of dollars. He pleaded guilty to a felony, was sentenced to a year in prison, but the sentence was suspended when he agreed to make restitution.
In August 2008, he still owed the Alabama victims $45,000. Just a month before, he paid $50,000 for a new Lincoln. In June, ASD cash was used to retire the $157,000 mortgage of his wife’s son and daughter-in-law, and about $28,000 was used to buy them a new car. At the time, Bowdoin owed his ex-wife more than $162,000.
Nothing out of the ordinary. As Stanford’s empire was collapsing, he told investors that the SEC investigation they were reading about in the newspaper was a “routine” look into the business. He also said he was cooperating fully, which the SEC said was a lie when it later alleged a multibillion-dollar, international fraud scheme.
Bowdoin told members that his business had been approved by regulators and was perfectly compliant. It turned out that ASD didn’t even have a compliance attorney and knew in 2007 — months before it started gathering tens of millions of dollars from members at company “rallies” — that the business was illegal. In the hours after the August seizure of ASD’s assets by the government, people with close ties to Bowdoin sought to assure members that the matter was a temporary blip that would be settled within days.
For good measure, Bowdoin later told ASD members that Ponzi allegations against ASD hand been dropped in Florida. People flooded forums to share the good news — except it wasn’t true. As recently as last week, some ASD members continued to make the claim that Ponzi allegations had been dropped, despite the fact that the office of Florida Attorney General Bill McCollum specifically refuted the claim months ago.
UPDATE 2:49 P.M. EST (U.S.A.) At a gathering of creditors today, Irving Picard, the trustee overseeing the liquidation of Bernard L. Madoff Investment Securities, said he could find no evidence that Madoff even purchased securities for customers in the past 13 years. Cash came in — and immediately went out — to sustain the Ponzi, Picard said. We’ve added a Madoff Discussion Topic at the bottom of this post.
Here, below, our earlier post . . .
This is a discussion thread for readers to share their views on developments in the autosurf world. Offer your opinions on any of the discussion topics below — or even all of them.
First, however, some news:
The bankruptcy judge in the CEP Ponzi scheme case has ordered some large judgments against “winners” who were sued in adversarial proceedings by William Perkins, the CEP receiver.
Judge James E. Massey even ordered interest be paid on the judgment amounts. “Winners” who are now losers include:
Chris Barany: $225,702.90
Earl Reed: $146,677.50
Ginger Phillips Reed: $103,339.70
Jessica Phillips: $44,821.85
As a side note, our research suggests that AdSurfDaily President Andy Bowdoin was a participant in the CEP Ponzi scheme. ASD once advertised it accepted payments from CEP Trust, the failed payment processor owned by the operators of the CEP Ponzi scheme.
DISCUSSION TOPIC: If you’ve been following the ASD case, you’ve read that ASD was an exciting, new business model and Andy Bowdoin a genius. But how could that be true if ASD was a member of other autosurf Ponzi schemes?
Ponzis And The Deaf
As reported on PonziNews, the SEC has taken action against a Hawaii-based firm that allegedly ran a Ponzi scheme targeting the hearing-impaired communities of the United States and Japan.
Investigators say Billion Coupons Inc., run by Marvin Cooper, made affinity fraud part of a $4.4 million Ponzi scheme.
“A Ponzi scheme targeting members of the Deaf community is particularly reprehensible,†said Rosalind R. Tyson, director of the SEC’s Los Angeles Regional Office.
This week, a surf came under fire in forums for slashing payouts to customers. The surf, known as Noobing, targeted the deaf at Deaf Expo events in 2008 and in YouTube videos.
DISCUSSION TOPIC: Given customers’ claims of “bait and switch,” the fact Noobing launched after the government seized ASD’s assets, Noobing’s statement that people should be angry at the government — not Noobing — for its decision to slash payouts, and the targeting of deaf people, is an investigation warranted?
Andy Bowdoin
Two months have passed since prosecutors filed a second forfeiture complaint against assets tied to ASD. The complaint alleged that ASD funds were used to fuel big spending by Bowdoin family members. It further alleged that $1 million purportedly was stolen from ASD by “Russian” hackers and that Bowdoin didn’t file a police report. Meanwhile, it also alleged that money in addition to what “Russian” hackers took also was stolen — and that Bowdoin didn’t file a police report about those thefts, either.
ASD said it had more than $1 million on deposit in Antigua, which this week became the center of an international financial scandal involving billionaire Allen Stanford, the biggest banker on the Caribbean island. Customers flooded banks in the tiny nation to withdraw money, and the government of Antigua appealed for calm.
Last summer, Bowdoin told a federal judge that ASD needed money to operate and asked her to free up seized funds. But Bowdoin didn’t tell the judge about the money in Antigua until after prosecutors pointed it out. After prosecutors revealed the presence of the Antigua money, Bowdoin explained in a conference call that the cash — at least $500,000 of it — was a deposit so ASD could process credit-card orders.
But the account was in a name other than ASD.
DISCUSSION TOPIC: Did Andy Bowdoin get the money out of Antigua before the onset of the banking crisis? Why was the money in a name other than ASD’s if it was used to process credit cards for ASD? Why didn’t Bowdoin repatriate the money and use it to pay ASD employees and restart the company?
Surf’s Up
On Nov. 27, ASD offered the Surf’s Up forum its official endorsement. This was several days after ASD lost the evidentiary hearing and several days before major prelaunch buzz for AdViewGlobal (AVG) began.
With ASD’s endorsement in hand, some of the Surf’s Up Mods and members started a new site on ning.com to promote AVG. For its part, AVG says it has no ties to ASD, even though the two companies share a common executive, a common customer-service representative, and AVG’s graphics once appeared on a webroom operated by ASD — and AVG listed its street address as ASD’s street address in Quincy.
DISCUSSION TOPIC: Should Surf’s Up have accepted the endorsement? Does it make sense to promote yet-another surf, especially when the surf has clear ties to ASD?
BizAdSplash
Despite all the upheaval in the financial world — and despite the fact the Feds are working harder than ever to expose Ponzi schemes — BizAdSplash says things are going just fine. Yesterday it announced a new promotion: 100 percent matching bonuses for customers and sponsors.
Here is the announcement:
Over the past week we have had a number of you contact us about your initial deposit and that you only purchased a small amount of Ad Packages just to test the system. Now you are ready to make a larger purchase. Your question is can we get the 100% match or discount on the cost of a larger Ad Package. Biz Ad Splash has agreed to open a small window for this 100% additional match. Any new purchases made from outside the system will be given the same benefit as your initial purchase and will be given the 100% match along with the sponsor match. This is only on purchases made on February 23 through February 28. This is a tremendous opportunity for all our Biz Ad Splash advertisers.
Thank you for your patience while we are in our beta launch. We value your participation in Biz Ad Splash and we look forward to exceeding your expectations.
The Biz Ad Splash Team
DISCUSSION TOPIC: Is BizAdSplash, which launched only a short time ago, already hurting? Is it desperately trying to collect cash to survive? How can it possibly fund payouts for customers and sponsors when the 100 percent matching bonuses create so much extra liability?
Will the surf hide behind “rebates aren’t guaranteed” if things go South? If that happens, will surf participants still think “offshore” surfing is the ticket to prosperity?
And how can any of the new surfs — BizAdSplash, AdviewGlobal, AdGateWorld — expect to thrive when they are fundamentally competing for the same business in a world in which many governments are going after Ponzi schemes with exceptional vigor?
Bernard Madoff
Trustee Irving Piccard now says that Bernard Madoff didn’t even purchase securities for customers in the past 13 years, instead taking incoming money to pay off older investors in a virtually pure Ponzi scheme.
DISCUSSION TOPIC: Given that Madoff escaped detection for years — and given that Allen Stanford appears to have escaped detection for years — are you worried that other Ponzi shoes may drop?
UPDATED 1:22 P.M. EST (U.S.A.) Earlier this month a photo of Olympic swimmer Michael Phelps holding a bong sparked a firestorm, which ultimately led to a public apology from the celebrated gold medalist. Phelps subsequently was fired by Kellogg Co. because it cherished its brand and didn’t want the cereal- and snack-eating children of America to believe it endorsed smoking marijuana.
Phelps is one of the most important athletes in the world. He can help companies sell products by the truckload and further instill their brands in the consciousness of buyers. Despite Phelps’ extraordinary accomplishments (eight gold medals at the 2008 Olympics), his apology, his youth (he’s 23) and his magnetic drawing power, Kellogg’s said goodbye, issuing a special statement to do so.
A photo of an Olympian smoking pot is “not consistent with the image of Kellogg,” the company said.
Phelps was not charged with a crime and will not be. USA Swimming, the governing body for the sport in the United States, however, suspended him for three months.
“This is not a situation where any anti-doping rule was violated, but we decided to send a strong message to Michael because he disappointed so many people, particularly the hundreds of thousands of USA Swimming member kids who look up to him as a role model and a hero,” the organization said. “Michael has voluntarily accepted this reprimand and has committed to earn back our trust.”
Some Phelps’ sponsors stood by his side, while not marginalizing his conduct or making excuses for it. No company will risk its reputation by running interference for Phelps.
A Study In Contrast
Now, compare the actions of USA Swimming and Kellogg’s to the actions of the Pro-AdSurfDaily “Surf’s Up” forum. (It may seem like a stretch, but it’s not: The Surf’s Up forum says it is comprised of professional business people with professional advertising needs, and ASD says is is a professional advertising company.)
In August, ASD was accused of operating a wire-fraud and money-laundering operation whose central component was a $100 million Ponzi scheme that had money on deposit in at least three countries. Surf’s Up’s raison d’être — it’s reason for being — was to advocate for ASD and ASD President Andy Bowdoin, a convicted felon. Indeed, the site’s formal name is the ASD Member Advocates forum.
Rarely in U.S. business does a professional entity make unrestrained cheerleading for a convicted felon involved in possible new felonies its signature calling. Most entities would be afraid of the stain spilling over or perhaps being drawn into a criminal investigation themselves. As a practical matter, there is little upside for an entity that associates itself with felons.
Since its inception, Surf’s Up has been famous for deleting posts that painted ASD in an unflattering light. It also is famous for heckling and even banning posters who asked tough questions.
But the site’s strangest act to date was to accept ASD’s official endorsement, which the embattled company issued publicly Nov. 27 on its Breaking News site. While most entities on earth would repudiate the endorsement of a felon who has other felony charges possibly waiting in the wings, Surf’s Up embraced it. The endorsement came only days after a federal judge ruled that ASD had not demonstrated at an evidentiary hearing last fall that it was a legal business and not a Ponzi scheme.
Unlike Kellogg’s and USA Swimming — both of which issued special statements to distance themselves from a bong — Surf’s Up issued no such statement to distance itself from an alleged $100 million Ponzi scheme.
Within a couple of weeks of the endorsement, some of the Surf’s Up Mods were promoting AdViewGlobal (AVG), a new surf that shares an executive with ASD and a customer-service employee who testified for ASD at the Sept. 30-Oct. 1 evidentiary hearing.
One of AVG’s first formal acts was to claim it had no ties to ASD, despite the executive it shared with ASD and despite the shared customer-service rep, who also doubled as a spokesman for AVG.
AdViewGlobal says Quincy is its home.
And AVG made the “no ties” claim despite the appearance of AVG graphics on an ASD-controlled webroom, including a graphic that listed AVG’s address as 13 S Calhoun Street, Quincy, FL 32351, which also happens to be the street address for ASD.
Most entities shy away even from the appearance of impropriety. Surf’s Up didn’t even do that. In fact, it cheered anew for another controversial surf: AVG.
Could ASD’s endorsement of Surf’s Up been quid pro quo for its months-long loyal cheerleading and a reward for helping build a customer base for AVG?
It sure looks that way, especially when Surf’s Up embraced the endorsement instead of repudiating it. And it really looks that way, considering the fact that some Surf’s Up Mods and members created a site to cheerlead for AVG shortly after receiving ASD’s endorsement.
But it especially looks that way when Surf’s Up deletes posts such as this one (below) that appeared yesterday. The post was on the topic of a second forfeiture complaint that had been filed against assets tied to ASD (December) and Bowdoin’s decision (January) to give up his fight for assets seized in the first complaint in August (italics added):
Anyone else think the “kids” Barb believes Andy may have been nobly protecting when he gave the members money to the government refers to the adult son and daughter-in-law of Faye Bowdoin? The government “went after” the property (homes and cars) of Mrs. Bowdoin’s adult son and daughter-in-law because the Harris’ home mortgage was paid off, and a car and boat were purchased, with ASD funds and funds withdrawn from AdSurfDaily’s Bank of America accounts and deposited into newly established accounts at Capital City National Bank in the name of a business named Bowdoin/Harris Enterprises. Bowdoin/Harris Enterprises was incorporated in Florida in June of 2008.
Just in case Barb’s right, and she seems to have a close connection to the Bowdoin’s, if Andy was motivated to give up all claims to the members funds in order to protect George and Judy Harris, let’s see what the kids were up to, that caught the eye of the government:
June l0, 2008
George Harris and Faye Bowdoin opened a Bowdoin/Harris Enterprises bank account at Capital City National Bank (CCNB) using $l77,900.l2 withdrawn from AdSurfDaily’s Bank of America accounts.
June ll, 2008
Judy and George Harris purchase new car for $28,607.67 with funds in an ASD bank account at BOA; the vehicle owners are the Harris’s.
June 23, 2008
George Harris transferred $l57,2l6.79 from CCNB account to Citi Mortgage, to pay off the mortgage on the home he and Judy were buying.
“Kids” George and Judy took money that had been “paid to the order of AdSurfDaily” by the members and used it as if it was their own. They didn’t have to use what was left of their personal income after they paid federal income taxes and FICA, like you and I would have to do.
Andy may have been worried about those kids, but I’m saving my sympathy for the kids whose college funds were raided, or whose homes were foreclosed on.
None of these actions — the establishment of an ASD cheerleading site, the acceptance of ASD’s endorsement, the establishment of a cheerleading site for AVG — is consistent with the actions of a professional business entity.
All of the actions, however, are consistent with a pattern of misinforming and deceiving — of running interference for a criminal enterprise.
It is beyond loathsome, but it’s business-as-usual at Surf’s Up.
UPDATED 10:21 A.M. EST (U.S.A.) Tomorrow will mark an important anniversary in the AdSurfDaily Ponzi case: the passage of two full months since prosecutors filed a second forfeiture complaint against assets tied to the firm.
Neither ASD President Andy Bowdoin nor members of his family from whom property was seized has filed a claim. No attorney has entered an appearance notice. The lack of action is in stark contrast to what happened in August after the first seizure of ASD assets.
Amid much fanfare — and amid a strangely jubilant atmosphere fueled by people who refused to disengage from their trances — Bowdoin moved quickly in August to stake a claim to tens of millions of dollars and other assets seized. Some Bowdoin zealots predicted a slam-dunk win for ASD, especially after it advised the court that it would be willing to operate under monitoring and supervision if some of the Great Man’s money was returned.
What the ASD supporters didn’t see — what some of them refused to see — was that the money was seized as the assets of a criminal enterprise that had money on deposit in at least three countries and had been taking steps to get more and more money outside the United States. One of the countries — Antigua — is now front-and-center in a massive case of international financial fraud involving R. Allen Stanford and his companies.
It will be well worth your time to click on the link above. Read the story, and read the entire SEC complaint from a link at the bottom of the story. Some of the allegations — the tortured explanations by Stanford and his companies — will remind you of elements of the ASD case.
Also note that the money ASD had on deposit in Antigua was not in ASD’s name. Bowdoin, however, had control of the money and could have converted it to his own use at any moment in time. The amount was at least $1 million, according to court filings.
Andy Bowdoin was at the helm of the ASD enterprise and, by implication in the forfeiture complaint, was a criminal. He took the 5th prior to the evidentiary hearing because he knew of the possible criminal repercussions of testifying. The ASD monitoring plan was a bid to short-circuit a possible criminal prosecution by getting the government to agree that only highly technical violations of the law had occurred. In other words, a possible $100 million Ponzi fraud using the financial systems of at least three countries was no big deal.
Prosecutors never were going to accept a Bowdoin-provided remedy, especially one that attempted to sanitize criminality by treating wire fraud, money-laundering and a Ponzi scheme as minor offenses. An acceptance of such a deal would have sent a clear signal that the worst that could happen to a probable autosurf Ponzi scheme operator was court-supervised monitoring of the scheme — as it re-started with returned funds and attempted not to engage in wire fraud, money-laundering and the sale of unregistered securities.
Such an outcome would have marked a chilly day for U.S. jurisprudence, the day America’s courts provided wink-nod cover for probable Ponzi-pushing felons — and even handed them back money and turned a blind eye to abuses that occurred before the good guys arrived.
Investigators went on to discover that Bowdoin told insiders that $1 million had been stolen from ASD by “Russian hackers.” He didn’t even file a police report, but he did tell Judge Rosemary Collyer that ASD couldn’t operate and needed her to free up money to pay employees and bills. What Bowdoin didn’t tell the judge up front, as he asked her to release seized funds, was that ASD had more than $1 million on desposit in Antigua, under a name other than its own. And he also didn’t tell the judge about the earlier alleged theft of $1 million by “Russian hackers.”
As a PR ploy, however, the offer to operate under supervision was a masterstroke. It kept members’ hope alive and enabled ASD supporters to paint the prosecutors and even the judge as unreasonable if they couldn’t see the beauty of the monitoring plan.
At ASD’s request, an evidentiary hearing was held Sept. 30 and Oct. 1. ASD insisted it was not a Ponzi scheme, called an expert witness to knock down the government’s assertions, and summoned three other witnesses to help make its case. At the conclusion of the hearing, some members of the Pro-ASD Surf’s Up forum, drunk on fantasy, partied long into the night. They were certain that ASD had won and dismissed all reports that didn’t validate their delusions.
In November, Judge Rosemary Collyer ruled that ASD had not demonstrated it was a legal business and not a Ponzi scheme at the evidentiary hearing. She found nothing of merit in the expert’s argument, pointing out holes through which one could drive a convoy of earth-moving machines. Some ASD members instantly claimed the fix was in. Such claims, of course, should be seen for what they are: self-validating drivel.
With a fresh win, prosecutors filed a second forfeiture complaint on Dec. 19. It is the most important document so far, the one that dealt ASD a crushing blow and signaled a nuclear development to come.
Prior to the December complaint, ASD could fit its remaining credibility in a thimble. Now it could fit it on the head of a pin. A quark, believed to be the smallest part of an atom, could accommodate ASD’s credibility at the conclusion of the case — with room to spare.
This case will be marked by a complete absence of ASD credibility, one of the reasons some ASD supporters and Surf’s Up members are furiously trying to change the subject and get people to take their eyes off the ball.
This case has a high probability of reducing the cheerleaders to emotional rubble and undermining the good works of their lives. Goodness exists in all people. A person can be stubborn and completely wrong-headed — and still be a good person. The line gets drawn, however, where wrong-headedness morphs into deliberate attempts to deceive and misinform.
Some Surf’s up members now are promoting AdViewGlobal (AVG), a company that shares a common executive with ASD and a common customer-service employee operating from Florida — even though AVG claims to be registered in Uruguay and running things out of Panama. Yesterday, in the wake of the SEC’s allegations against Stanford, banking customers in Panama and other countries in Central America, South America and the Caribbean were lining up to get their money out of local banks.
The ASD case is no more about the abuse of government power than it is the Easter Bunny. ASD is an international racketeering enterprise. If you’re carrying its water, you are a racketeer — and your quark awaits before nothingness finally settles in.
Four more U.S. banks failed yesterday. Three failed on the previous Friday. Thirteen have failed year-to-date. To say this is unsettling is to grossly understate the severity of the banking problem and the drag on the U.S. and world economies.
Stories about Ponzi schemes and mortgage fraud are in the news daily. The obvious fear among regulators is that more Bernard Madoffs and Arthur Nadels will emerge. The situation is ripe for Ponzi schemes to be exposed because people need cash and actually fear Ponzi fraud now, meaning they’re predisposed to request redemptions just in case. Ponzi operators won’t be able to fund the redemptions, and the fraud will be exposed at the revulsion of the world.
And yet some members of the Surf’s Up forum, which is associated with the AdSurfDaily Ponzi operation, are writing incredibly brazen letters to Sen. Patrick Leahy. These letters are a bid to get the Senate Judiciary Committee to investigate the prosecutors who prevented the ASD Ponzi from mushrooming. Sen. Leahy is committee chairman.
Make no mistake about it, Sen. Leahy: ASD is a $100 million Ponzi scheme and every bit as dangerous as the Madoff and Nadel schemes. ASD thrived for months and collected tens of millions of dollars — now subject to forfeiture because of quick action by the U.S. Secret Service, the IRS and the Justice Department — and tried to cover its tracks by drafting investors into a contract that provided no consumer protections at all. The contract was nothing more than an inartful, cynical bid to legalize Ponzi schemes and skirt securities laws by calling an investment program an “advertising” program.
Members of the Judiciary Committee should pay close attention to the ASD contract, which appears starting on P. 68 of this document, an Aug. 5 forfeiture complaint against assets tied to ASD. The Justice Department filed a second forfeiture complaint on Dec. 19, outlining even more ASD abuses and highlighted by a claim that “Russian” hackers stole $1 million from ASD.
ASD President Andy Bowdoin did not even file a police report, which raises even more questions — questions such as “Why not?” and “Did a theft actually even occur?”
Members of the Judiciary Committee also should know that Bowdoin already has surrendered claims to money and property seized in the August forfeiture complaint.
The Surf’s Up members’ bid to misinform the Judiciary Committee and sanitize Ponzi schemes is reprehensible, an insult to hard-working and underfunded law-enforcement agencies, the highly capable men and women who staff the agencies, and dedicated prosecutors at all levels of government.
And it is a slap in the face to hard-working Americans who are living through lean times, struggling to make ends meet and are stunned beyond words at the devastation wrought by the Ponzi economy.
We call on Sen. Leahy, a former prosecutor, and the Judiciary Committee to fully investigate so-called “autosurf” Ponzi fraud and propose legislation that will help federal and state prosecutors combat it. A law that specifically codifies the crime and spells out penalties would be a good first step.
We suggest that Sen. Leahy and members of the Judiciary Committee work closely with Attorney General Holder and SEC Chairman Schapiro in crafting legislation that specifically addresses autosurf and HYIP Ponzi fraud.
This insidious business is sucking wealth out of the economy and creating an environment in which criminals and even terrorists can thrive. Mini-Madoffs exist far and wide across the autosurf landscape. They are engaging in the sale of unregistered securities, wire fraud, money-laundering, mail fraud and racketeering, and they are being aided by people who are doing everything in their power to change the subject and sanitize what amounts to organized theft on a global scale.
