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Tag: ASD. AdSurfDaily

  • BREAKING NEWS: Two Madoff Computer Programmers Charged With Conspiracy For Enabling Massive Ponzi Scheme

    Federal prosecutors and the FBI demonstrated again this morning that people who enable Ponzi schemers are subject to arrest and prosecution.

    Today’s announcement that two computer programmers for Bernard Madoff have been charged with serious felonies could send shockwaves across the so called autosurf “industry,” which relies heavily on computers and programming tweaks to fleece participants.

    Charged in New York were programmers Jerome O’Hara, 46, of Malverne, N.Y., and George Perez, 43, of East Brunswick, N.J. If convicted, they each face up to 30 years in prison and fines that could total in the millions of dollars.

    O’Hara and Perez were charged with conspiracy, falsifying books and records of a broker-dealer, and falsifying books and records of an investment adviser.

    “Jerome O’Hara and George Perez allegedly helped construct Bernie Madoff’s house
    of cards,” said U.S. Attorney Preet Bharara of the Southern District of New York. “The computer codes and random algorithms they allegedly designed served to deceive investors and regulators and concealed Madoff’s crimes. Today they have been charged for their roles in Madoff’s epic fraud, and the investigation remains ongoing.”

    An FBI official said Madoff could not have pulled of his Ponzi scheme without the aid of programmers, adding that Madoff bought their silence for a a price.

    “O’Hara and Perez are charged with being instrumental in facilitating the Ponzi scheme that was the Bernard Madoff investment advisory business,” said Joseph M. Demarest Jr., assistant director-in-charge of the FBI’s New York field office.

    “Their subterfuge was designed to conceal the fraud from regulators and others, and when they told Madoff they would no longer lie for him, their continued complicity was bought for a price,” Demarest said.

    It is common knowledge in the autosurf “industry” that the operators install scripts to make the programs functional online and that the scripts are tailored by programmers to the specifications of the operators.

    bowdoinmadoffart2Today’s charges against O’Hara and Perez give surf operators — and their programming employees and contractors — something else to worry about, beyond being forced to give up ill-gotten gains in forfeiture proceedings and being charged with crimes such as wire fraud and money-laundering.

    By charging the programmers who helped Madoff carry out the scheme, the Feds sent a clear message that they view Ponzi-enablers as co-conspirators.

    The website of AdSurfDaily, a Florida company accused of operating a $100 million Ponzi scheme, was offline for much of July 2008, amid reports that programmers were tweaking the website and programming the system to enable it to accommodate higher volumes of traffic and perform more database functions.

    ASD President Andy Bowdoin repeatedly relied on programmers to tweak systems, members said.

  • BREAKING NEWS: Prosecution Says It Will Seek Default Judgment Against ASD Assets Named In December 2008 Complaint; Asserts Bowdoin, Others Were Served ‘Direct Notice’ In January 2009, But Did Not File Claims To More Than $1 Million In Property Paid For By Members

    UPDATED 8:09 A.M. ET (NOV. 7 U.S.A.) Easy come, easy go?

    ASD President Andy Bowdoin and unnamed others were served “direct notice” in January 2009 of a forfeiture complaint filed in December 2008 but did not file claims to property the government intends to seize as proceeds of a crime, federal prosecutors said this morning.

    Bowdoin’s failure to file claims to less-valuable items seized in the December complaint are in stark contrast to his aggressive bids to reassert claims to tens of millions of dollars seized from bank accounts in Bowdoin’s name in an August 2008 forfeiture complaint.

    The notice of the December complaint was given “very promptly to known potential claimants in January 2009,” and yet none of them acted to assert an ownership interest over cars, marine equipment, computer equipment and real estate name defendants in the December complaint, prosecutors said.

    The total value of property to which neither Bowdoin nor family members asserted claims exceeded $1 million, according to court filings. Prosecutors said all of the property was paid for by members who participated in Bowdoin’s autosurf Ponzi scheme.

    One of the seized items was a building ASD had paid $800,000 in cash to acquire, prosecutors said. ASD said it planned to move its operations — and its dozens of employees to the building — but never filed a claim for the building, according to records in the December 2008 case.

    How Bowdoin intends to explain to employees and members that an $800,000 building paid for by participants was not worth fighting for is unclear. In a September conference call transcribed by the U.S. Secret Service, Bowdoin said ASD wanted to reopen — and yet never filed a claim to the building, prosecutors said.

    Bowdoin had described the marine equipment — including two jet skis, a Cabana boat and other property — as recreational items for members who came to visit him in Quincy, Fla. — members said.

    Regardless, neither he nor any other ASD insider staked a claim to the items, prosecutors said.

    “In keeping with the likely outcome of this notification [of the December complaint], plaintiff also is preparing a motion for default judgment and a final order of forfeiture,” prosecutors said. “As things now stand, plaintiff expects that the Court will be in a position to grant such a motion, which should result in the dismissal of this case, by approximately January 15, 2010, that is, in 70 days.”

    Today’s filing by prosecutors Barry Wiegand and Deborah Connor may prompt ASD members to question why Bowdoin, who has positioned himself as a champion to participants, is fighting hard for cash seized in August 2008 — but not at all for less-valuable property named in the December 2008 complaint.

    It also raises questions about why Bowdoin’s wife, Edna Faye Bowdoin, and her son, George Harris, are not fighting for property seized in the December 2008 complaint. At the same time, it raises questions about why Judy Harris, the wife of George Harris, also is not fighting for the property.

    Prosecutors said Edna Faye Bowdoin and George Harris opened a bank account in June 2008, less than two weeks after a May 31, 2008, ASD rally in Las Vegas had concluded.

    The account was funded with an opening deposit of more than $177,000 from illegal proceeds from ASD, prosecutors said.

    The Tallahassee home of George and Judy Harris was seized in the December 2008 complaint, which followed on the heels of an August 2008 complaint against other ASD-connected assets, collectively including huge sums of money in 10 Bank of America accounts in Andy Bowdoin’s name. Prosecutors said the Harris mortgage of more than $157,000 was paid off with criminal proceeds from ASD, from the account opened by Edna Faye Bowdoin and George Harris in June 2008.

    Also seized in the December 2008 complaint was a 2008 Honda automobile registered to George and Judy Harris. Prosecutors said the car also was acquired with criminal proceeds from ASD.

    George and Judy Harris later emerged as the purported owners of the AdViewGlobal (AVG) autosurf, which formally launched in February 2009 — after two forfeiture complaints had been filed against ASD and after Andy Bowdoin had been named a defendant in a separate racketeering lawsuit.

    Bowdoin never responded to the racketeering complaint, which also names ASD attorney Robert Garner a defendant.

    Although Andy Bowdoin eventually submitted (in January 2009) to the forfeiture of the money seized in August 2008, he changed his mind in February and began to file as a pro se litigant to reassert his claims.

    Some members of the Pro-ASD Surf’s Up forum championed Bowdoin’s reemergence as a pro se litigant in the August 2008 case, offering prayers and well-wishes but never asking why Bowdoin and family members appeared to be ignoring the December 2008 forfeiture case and why Bowdoin was ignoring the January 2009 racketeering case.

    Bowdoin chose not to assert an ownership interest in the less valuable marine equipment, computers and other assets seized in the December 2008 complaint, prosecutors said this morning.

    In recent weeks, however, he has aggressively reasserted claims to the tens of millions of dollars seized in August 2008 case, according to court records in the August case.

    But Bowdoin and family members did nothing at all to secure the return of the water equipment, the $800,000 building, the Harris automobile, a model-year 2009, $50,000 Lincoln luxury sedan for presumptive use by Bowdoin and his wife, and a 2009 Acura automobile acquired in the name of a former ASD employee, according to court records in the December case.

    The automobiles had a combined value of more than $110,000, according to court filings. The combined value of the water equipment totaled nearly $44,000. Based on the value of the cars, the water equipment, the building — and the Harris home — neither Bowdoin nor family members filed claims to more than $1 million in property.

    Prosecutors said all of the property was acquired from money directed at ASD by members.

    Prosecutors said they had expected a “global resolution” of both forfeiture cases in 2009, based on assertions by Bowdoin. Early in the year, Bowdoin met in person with prosecutors and admitted ASD had been operating illegally, according to court filings.

    In August 2009, Bowdoin announced in court filings that he was reentering negotiations with prosecutors. Bowdoin asked for at least two extensions to continue negotiations, according to records. U.S. District Judge Rosemary Collyer granted extensions from Aug. 7 to Sept. 14.

    On Sept. 14, Bowdoin filed motions that reasserted his claims to the seized millions, triggering blistering motions by the prosecution that Bowdoin was trying to lie his way back into the case, while also lying to members.

    In September — for the first time — prosecutors made a veiled reference to the AVG autosurf, saying, “Maybe Bowdoin thought that before the government brought its charges he (like some of his family members) could move to another country and profit from a knock-off autosurf program that Bowdoin funded and helped to start.”

    Prosecutors suggested today that, when negotiations broke down, they sought seizure warrants to take possession of the assets named in the December complaint.

    “Promptly when it appeared that a global resolution of all related litigation had become much less likely, the government applied to this court in late October for seizure warrants for several of the defendant properties.” prosecutors said. “Within days of the Court issuing the warrants, federal law enforcement agents had swiftly executed them, and all defendant items of personal property are in the custody of an agency of the U.S. government.”

    All of the property seized in the December complaint now is advertised for forfeiture on the government’s official forfeiture website: forfeiture.gov. Along with the building, boats, cars and other real estate, the government also advertised formal notice of forfeiture of “[a]pproximately Six Hundred Thirty Four Thousand, Two Hundred Sixty Six Dollars and Thirteen Cents ($634,266.13), in U.S. funds previously deposited at the Bartow County Bank, Account #xxx-602, in the name of Golden Panda Ad Builder.”

    Read today’s filing by the prosecution in the December 2008 forfeiture case.

  • Important Filing Deadline In ASD Prosecution Nears

    Andy Bowdoin
    Andy Bowdoin

    Tomorrow is the deadline for prosecutors to advise U.S. District Judge Rosemary Collyer how they plan to proceed with the December 2008 forfeiture complaint filed against assets of AdSurfDaily Inc.

    A month ago Judge Rosemary Collyer pointed out that no person or entity had filed claims to property seized in the complaint, the second tied to ASD-connected assets. The first complaint was filed in August 2008 and was nearly litigated to conclusion in January 2009, with ASD President Andy Bowdoin’s submission to the forfeiture of tens of millions of dollars “with prejudice.”

    Bowdoin, 74, changed his mind about giving up the money in February, and reentered the August case as a pro se litigant after meeting with a mysterious “group” of ASD members.

    Prosecutors now say Bowdoin is a “delusional” con man who “cannot manage to keep his stories straight,” arguing that he is telling Collyer one thing and members another. On Sept. 28, the U.S. Secret Service filed a transcript of a conference call Bowdoin held with members Sept. 21.

    In the transcript, Bowdoin repeatedly told members the government had seized money from them. He specifically used the phrase “your money” four times in the short recording.

    Prosecutors said Bowdoin’s words to members were at odds with his own court filings in which he claimed ownership of the seized assets — and also at odds with the filings of Charles A. Murray, one of Bowdoin’s attorneys.

    Prosecutors quoted from a September filing by Murray, who has been arguing that Collyer should permit Bowdoin to change his mind after advising the court in January that he was giving up the money and did not intend to reassert his claims in the future.

    “Mr. Bowdoin’s release in the above-captioned case is illogical,” prosecutors quoted Murray as saying. “He received nothing of value for the release. Bowdoin has consistently demonstrated an intent to aggressively defend ownership of his property in the civil in rem forfeiture proceeding.”

    Prosecutors were quoting from Page 2 of this Sept. 14 filing on Bowdoin’s behalf by Murray.

    One week later — on Sept. 21 — Bowdoin held the conference call, using the phrase “your money” four times to describe to members the assets he had told Collyer belonged to him,  prosecutors said.

    Bowdoin’s official court claims to the property date back to Aug. 15, 2008, less than two weeks after the seizure. No claims to any of the assets seized in the December forfeiture complaint that followed appear in the record of the case.

    Potential December claimants included Bowdoin, his wife, Edna Faye Bowdoin, George Harris, Judy Harris and Hays Amos. Judy Harris is married to George Harris, the son of Edna Faye Bowdoin and Bowdoin’s stepson. Hays Amos is a former employee of ASD.

    ASD money was used to buy a car registered to Amos, and also a car registered to George and Judy Harris, prosecutors said. It also was used to buy a car for Bowdoin/Harris Enterprises Inc., which prosecutors said was set up by George Harris and Edna Faye Bowdoin to help Andy Bowdoin and Edna Faye Bowdoin hide assets.

    At the same time, prosecutors said, more than $157,000 in ASD money was used to retire the mortgage on the home Judy and George Harris shared in Tallahassee, and to purchase a Cabana boat, jet-skis, haul trailers and other marine equipment. Bowdoin also spent $800,000 cash to purchase a building in Quincy — initially to the delight of the Gadsden County Chamber of Commerce, but later to its embarrassment.

    The Gadsden Chamber went on to contact the FBI about ASD, questioning whether the company was legitimate, prosecutors said.

    George and Judy Harris emerged later as the purported owners of the AdViewGlobal (AVG) autosurf, which launched in the aftermath of two forfeiture complaints filed against ASD’s assets and a separate racketeering lawsuit filed against Bowdoin and ASD attorney Robert Garner.

    Florida now has dissolved both ASD and Bowdoin/Harris Enterprises for failure to file required annual reports. The state gave the firms nearly a five-month window to file, but neither firm — both of which purport to be legitimate — followed through.

    Within hours of the breaking news about Florida’s actions against the firms, a poster on the Pro-ASD Surf’s Up forum described it as a conspiracy between the federal government and state authorities in Florida.

  • UPDATE: Another Parallel To ASD/Golden Panda/AVG Emerges In Canadian Probe Of Manna Trading Corp. Ltd.

    Yesterday we reported that the British Columbia Securities Commission (BCSC) ordered penalties and disgorgement totaling $42 million in the case against Legacy Capital Inc., Legacy Trust Inc., Manna Trading Corp Ltd. and Manna Humanitarian Foundation.

    We reported several parallels to the ongoing investigation in the United States into the business practices of AdSurfDaily/Golden Panda Ad Builder and the AdViewGlobal (AVG) autosurf.

    Another parallel has emerged, and it is a significant one: Two of the principals in the Canadian scheme previously had been disciplined for banking or securities violations.

    Hal (Mick) Allan McLeod was disciplined by the British Columbia Superintendent of Financial Institutions in 2003 for violations of the Financial Institutions Act and ordered to “cease carrying on a trust or deposit business,” BCSC said.

    Citing the superintendent’s order, BCSC said two companies with which McLeod had served as a director — First Capital Trading & Financing Corp. and First Capital Credit Corp. — “took and kept funds from the public, and engaged in conduct that was deceptive and misleading.”

    David John Vaughan, meanwhile, “was disciplined by this Commission [in 1999] for engaging in an illegal distribution that had many features in common with the Manna scheme,” BCSC said. “Orders against him from that misconduct remain in force today.”

    In the 1990s, both ASD President Andy Bowdoin and Golden Panda Ad Builder President Clarence Busby had run-ins with securities regulators.

    Bowdoin pleaded guilty to felonies in Alabama and was sentenced to a year in prison. The sentence was suspended when he agreed to pay restitution. In August 2008, he sent his victims a restitution check for $100. One month earlier, in July 2008, nearly $50,000 in ASD funds were used to purchase a luxury Lincoln sedan registered in the name of Bowdoin/Harris Enterprises, prosecutors said.

    Florida now has revoked ASD’s corporate registration and dissolved the registration of Bowdoin/Harris Enterprises. Although both companies are involved in serious litigation that potentially affects thousands of people, neither company submitted required annual reports to maintain their corporate standing. Florida provided the companies a five-month buffer to file the required paperwork. Neither firm complied.

    In May 1998, a federal judge permanently enjoined Clarence Busby from violations of the Securities Act of 1993 and the Securities Exchange Act of 1934. Busby was ordered to pay $15,000 in disgorgement for ill-gotten gains he had received “from sales of interests in three prime bank schemes,” the SEC said.

    The SEC waived the penalty because Busby certified he was unable to pay, the SEC said.

    Busby and Bowdoin went on a decade later to form Golden Panda Ad Builder after discussing the surf on a Georgia fishing lake in April 2008. In July 2008 — just prior to the seizure of tens of millions of dollars from the bank accounts of ASD and Golden Panda — Bowdoin distanced himself from Busby after Busby’s run-in with the SEC became known publicly.

    The “cause and effect” of Bowdoin’s actions with Golden Panda never has been clear. For example, was Bowdoin really too busy to run Golden Panda with Busby — as Bowdoin suggested — or did Bowdoin distance himself from Golden Panda because he learned about Busby’s alleged SEC violations and feared the allegations could lead to a probe of ASD?

    Golden Panda surrendered its claim to more than $14 million in the U.S. Secret Service probe. Busby now is listed as the “chief consultant” to BizAdSplash (BAS), another surf — one that purports to be operating offshore.

    BAS suspended payouts earlier this year, and then announced a relaunch. The firm, according to its website, now is selling tiered “charter memberships” for as much as $10,000.

    A “Presidential” charter membership is priced at $10,000; an “Executive” charter membership is priced at $5,000. Two other tiered charter memberships — “Visionary” and “Pioneer” — are sold at $2,500 and $1,000, respectively.

    BAS has not updated the news on its website since Oct. 7, nearly three weeks.

    Canadian officials say the whereabouts of three of the respondents in the Manna probe who were ordered to pay huge financial penalties is unknown. McLeod, Vaughan and Kenneth Robert McMordie (also known as Byrun Fox) “have fled the jurisdiction,” BCSC told The Globe and Mail, in a story published this morning.

    The Royal Canadian Mounted Police have opened a criminal investigation, BCSC said.

    Like ASD/Golden Panda, AVG and BizAdSplash, the Canadian Ponzi schemers pushed debit cards to offload profits, BCSC said.

    “Manna fraudulently used the investments of later investors to fund the promised returns to earlier investors, to pay commissions to the affiliates and consultants, to invest in an online gaming business, and to buy real estate in Costa Rica,” BCSC said.

    Other traits the Canadian scheme and the alleged U.S. scheme involving Bowdoin, Busby and offshoot companies had in common include:

    • Secrecy. AVG, for instance, did not identify its executives, morphed into a “private association” and advised members not to share information outside association walls.
    • False information. Some ASD members repeatedly have asserted that the U.S. government has admitted ASD was not a Ponzi scheme. Other members have sent emails that suggest participants should not cooperate with the U.S. Secret Service.
    • Offshore venues. Both AVG and BAS, for example, claim connections to South America and Central America, leading to fears that money could be hidden.
    • Use of ‘common law’ in various writings. Some ASD pro se litigants have cited common law in court filings in defense of the surf. One apparent argument of the litigants is that all commerce is legal as long as there is is contract between two parties. In the Canadian case, some purveyors of the scheme pushed what authorities described as a “private common law spiritual trust.”
    • Efforts that can be viewed as intimidation tactics. AVG, for example, threatened to sue members who shared information and to file abuse complaints with the Internet Service Providers of participants who complained on online forums.
    • Purported ties to charitable entities. AVG, for instance, advertised that it supported the World Rain Forest Movement. In Canada, Manna advertised the Manna Humanitarian Foundation.
    • An MLM-style sales structure. All of the Canadian and U.S. entities sold the programs as multilevel marketing opportunities.
    • Earnings “compounding.” Both the Canadian schemes and the alleged American schemes encouraged members to keep money in the systems and employ compounding strategies to maximize earnings.

  • BREAKING NEWS: Bowdoin’s Attorney Files Motion To Permit New Attorney To Appear In DC Federal Court

    UPDATED 7:51 P.M. EDT (U.S.A.) An attorney for AdSurfDaily President Andy Bowdoin has filed a motion to permit another attorney to appear in U.S. District Court for the District of Columbia, the venue of the civil-forfeiture complaint against ASD’s assets.

    The attorney was identified as Michael R.N. McDonnell of Naples, Fla.

    Murray’s motion was dated Oct. 1. An accompanying affidavit from McDonnell was dated Sept. 30. Ironically the dates on the documents coincided with the one-year anniversary of the dates upon which an evidentiary hearing was conducted at ASD’s request last year.

    Why the documents dated Sept. 30 and Oct. 1 of this year appeared on the docket only today was not immediately clear.

    On Nov. 19, 2008, U.S. District Judge Rosemary Collyer ruled that ASD had not demonstrated at the hearing that it was a lawful business and not a Ponzi scheme.

    Bowdoin submitted to the forfeiture on advice of counsel in January 2009, and then emerged as a pro se litigant in February, saying he’d changed his mind and wanted to rescind his decision to forfeit tens of millions of dollars.

    In July, Collyer ordered Murray, who had become Bowdoin’s paid counsel, to follow-up on motions filed in May. Collyer initially gave the Bowdoin side until Aug. 7 to file arguments. She extended the deadline until Aug. 28 — and then again until Sept. 14 — after Murray advised her Bowdoin was negotiating with prosecutors.

    Bowdoin met the Sept. 14 filing deadline on the last possible day. On Sept. 15, he filed a corrected affidavit. His initial affidavit appeared to have lines and an entire paragraph missing.

    The Sept 15 filing had 23 paragraphs, as opposed to the previous day’s 22. The Sept. 14 filing jumped from paragraph 3 to 5, skipping paragraph 4. Meanwhile, it also had two paragraph 16s, one apparently complete and one apparently incomplete.

    In a brief filed Sept. 14 by Murray, there was a reference to Bowdoin having found the fees accepted by defense counsel Steven Dobson “astonishing.” The reference cited was paragraph 17 from Bowdoin’s affidavit, but the word “astonishing” did not appear in paragraph 17 — or elsewhere in the document.

    Bowdoin’s Sept 15 corrected affidavit also did not include the word “astonishing” — in paragraph 17 or elsewhere.

    On Sept. 28, the U.S. Secret Service filed a transcription of a recording Bowdoin had made earlier in September. The recording was posted online.

    In a Sept. 28 filing that accompanied the Secret Service transcript of the recording, prosecutors said Bowdoin was “delusional.”

    Prosecutors argued that Bowdoin had told Collyer one story and members another to explain events, calling the recording evidence that “this con man cannot manage to keep his stories straight.”

    “Remarkably, Bowdoin even suggests to those members participating in the conference call that the money taken from his bank accounts and, supposedly, never constituting an investment, belongs, not to Bowdoin, but to the membership.”

    On Sept. 25, prosecutors said Bowdoin was trying to lie his way back into the case and that Murray was engaging in “fantasy.”

    Prosecutors’ Sept. 25 filing was blistering, and included a veiled reference to the AdViewGlobal autosurf.

    “[I]t may be the case that Bowdoin never intended to plead guilty when he agreed to debrief, and was just buying time while searching for a different exit strategy that failed to materialize,” prosecutors said Sept. 25. “Maybe Bowdoin thought that before the government brought its charges he (like some of his family members) could move to another country and profit from a knock-off autosurf program that Bowdoin funded and helped to start.”

    Murray, prosecutors asserted, had filed motions at odds with Bowdoin’s claims.

    “Mr. Murray’s apparent suggestion that Bowdoin made a mistake because he was ‘hoodwinked’ by his prior defense counsel is belied by Bowdoin’s own affidavits,” prosecutors said.

    Bowdoin agreed in January to submit to the forfeiture. In February, he began to file pro se motions in a bid to rescind his decision to forfeit tens of millions of dollars seized by the Secret Service in August 2008.

    In March, on the Pro-ASD Surf’s Up forum, Bowdoin explained in a letter to members that he had made the shift from paid attorneys to acting as his own attorney after consulting with a “group” of ASD members.

    “We will be filing papers in the next couple of weeks that should really get their attention,” Bowdoin said, chiding prosecutors in the letter.

    Murray, who became Bowdoin’s attorney after Bowdoin had filed several pro se motions, contends Bowdoin received poor advice from Dobson, a paid attorney previously employed by Bowdoin.

    Prosecutors disagreed.

    “Mr. Murray’s new accusations are, in any event, utterly inconsistent with Bowdoin’s own affidavit testimony,” prosecutors said.

    “Mr. Murray’s manufactured effort to fault Bowdoin’s prior counsel for Bowdoin’s decision to cooperate and his revised decision to profess ‘my belief in my innocence’ is laughable,” prosecutors said. “Bowdoin knew he should expect no leniency unless he stopped pretending that he honestly earned the millions of dollars that the government recovered from his bank accounts in 2008.”

    In April, prosecutors said Bowdoin had signed a proffer letter in the case and acknowledged ASD was operating illegally.

    Murray, however, says Bowdoin believes he is innocent.

    Read Murray’s motion.

    Read Bowdoin’s Sept. 14 affidavit.

    Read Bowdoin’s Sept. 15 affidavit.

    Read the motion from Murray that accompanied Bowdoin’s Sept. 14 affidavit.

    Read an Oct. 8 motion by Murray in response to prosecutors’ Sept. 28 motion.

  • BREAKING NEWS: Prosecution Says Bowdoin Trying To Recontest Forfeiture So He Can Use Case As ‘Get-Out-Of-Jail-Free’ Card; Calls Bowdoin’s Assertions Against His First Lawyer ‘Insidious’ Lies; Says New Lawyer Engaging In ‘Fantasy’

    UPDATED 12:38 P.M. EDT (U.S.A.) Andy Bowdoin is trying to lie his way back into the civil forfeiture case involving tens of millions of dollars seized from him last year and now has a lawyer engaging in “fantasy” to help his client pull it off, federal prosecutors said this morning.

    Meanwhile, prosecutors made a veiled reference to the AdViewGlobal autosurf, saying “it may be the case that Bowdoin never intended to plead guilty when he agreed to debrief, and was just buying time while searching for a different exit strategy that failed to materialize. Maybe Bowdoin thought that before the government brought its charges he (like some of his family members) could move to another country and profit from a knock-off autosurf program that Bowdoin funded and helped to start.”

    In a blistering memorandum to U.S. District Judge Rosemary Collyer, prosecutors said Bowdoin’s new attorney, Charles A. Murray, had filed motions at odds with themselves — and even at odds with various statements Bowdoin himself has made in affidavits.

    “This fantasy even Mr. Bowdoin fails to support,” prosecutors said of a recent filing by Murray.

    Prosecutors used italic type to stress their claim.

    “Mr. Murray’s apparent suggestion that Bowdoin made a mistake because he was ‘hoodwinked’ by his prior defense counsel is belied by Bowdoin’s own affidavits,” prosecutors said.

    “Bowdoin says (using more words) that he dismissed his claims in mid-January 2009 because he had decided to cooperate in either late December 2008 or early January 2009, after his attorney met with the government. Bowdoin explains that he understood that he was sitting down with agents in January 2009 in an effort to help himself, that he decided to withdraw his claims in this case as part of that effort, and that he eventually changed his mind,” prosecutors continued.

    “Mr. Murray’s manufactured effort to fault Bowdoin’s prior counsel for Bowdoin’s decision to cooperate and his revised decision to profess ‘my belief in my innocence’ is laughable,” prosecutors said. “Bowdoin knew he should expect no leniency unless he stopped pretending that he honestly earned the millions of dollars that the government recovered from his bank accounts in 2008.”

    Federal filings — and a lack of activity in the state case against Bowdoin in Florida — suggest Bowdoin had fired as many as six attorneys before Murray was retained. Bowdoin also embarked on a pro se litigation strategy in February after surrendering his claims to the seized money in January — and after meeting with what he described as a “group” of members.

    During the same time period, the AdViewGlobal autosurf, which has close ASD ties and now has suspended cashouts, introduced members to Pro Advocate Group. Pro Advocate Group is associated with a convicted felon and purports to offer services for pro se litigants. The company also advertises the formation of “associations” that purportedly help people practice law and medicine without being licensed.

    AdViewGlobal, which purported to be headquartered in Uruguay, then shifted to an “association” structure in which it incongruously claimed its authortity derived from the U.S. Constitution, despite the fact the company said it was based on foreign soil.

    Bowdoin and his attorney were making it up as they went along, prosecutors said.

    “In the release he filed, Bowdoin acknowledged he knew that by withdrawing the claims, he was consenting to a forfeiture judgment in the government’s favor,” prosecutors said. “In his affidavit, Bowdoin acknowledges that, as part of his cooperation, he agreed to withdraw the claims he filed in this case. Clearly, Bowdoin now has decided he no longer wants to cooperate to resolve this matter or his potential criminal liability. Bowdoin can certainly change his mind –but he cannot change facts.

    “Bowdoin’s new attorney spends almost seventeen pages asking the Court not to enforce a supposed settlement agreement that Bowdoin acknowledges did not exist and which, not surprisingly, the government does not seek to enforce. Bowdoin’s new attorney insinuates that Bowdoin was ‘hoodwinked’ or misinformed (presumably by either his prior counsel, or the government, or both). But Bowdoin’s own affidavit proves otherwise.

    “Moreover, most notable is the fact that, nowhere does Bowdoin’s new attorney demonstrate that Bowdoin has even a remote possibility of prevailing against the government in this civil forfeiture case were he permitted to reassert a challenge,” prosecutors said.

    Bowdoin says in his own motions that he alone owns the seized money, prosecutors said, pointing out that large sums of  money were used prior to seizure to support personal purchases for Bowdoin, his wife and others — and that the purchases were made from funds submitted by ASD members.

    Assertions Against Former Counsel ‘Insidious’; Differences Between What Bowdoin Claims And New Attorney Claims ‘Disturbing’  

    “What becomes clear, from Bowdoin’s current motion, is that Bowdoin believes that if he gets back into this case he can try to negotiate a better deal,” prosecutors said.

    “He wants to trade his right to challenge the forfeiture for the get-out-of-jail-free card that, Bowdoin himself acknowledges, the government has never been willing to offer.

    “To achieve that end,” prosecutors continued, “Bowdoin makes a series of remarkable misrepresentations and insidious accusations, primarily against [former defense counsel Stephen Dobson], in an apparent effort to have this Court reject a settlement agreement that everyone agrees never existed.

    “Mr. Murray’s new accusations are, in any event, utterly inconsistent with Bowdoin’s own affidavit testimony,” prosecutors said. 

    “Likewise, reports Mr. Murray[,”] prosecutors said, “Bowdoin understood from Dobson that he was obligated to dismiss claims in the civil in rem forfeiture action if he was to receive leniency from the government.’

    “The accusations are also irrelevant to the relief Bowdoin here requests: to reappear into a lawsuit against which he cannot mount a successful defense, solely to leverage a better deal in resolving criminal charges. But, this is not an exercise in horse-trading,” prosecutors said.

    “The difference between what Bowdoin says happened, and what Mr. Murray suggests happened, is disturbing,” prosecutors continued. “In the ‘Renewed Motion to Rescind Release of Claims,’ Mr. Murray sometimes reports, consistent with statements Bowdoin makes in his affidavits, that ‘Bowdoin understood from Dobson that to possibly avoid prison time he had to release claims in the civil forfeiture proceeding and disclose facts concerning the operation of ASD to Government counsel.”

    “In other words,” prosecutors continued, “Bowdoin understood from his attorney, before he started cooperating, that he could help himself if he did cooperate. Sounds like a smart lawyer’s good advice.

    “Bowdoin acknowledges that he started cooperating, voluntarily dismissed his claims in this case as part of his effort to demonstrate his sincerity, and (as he himself acknowledges to this Court) began to provide information about his operation to federal law enforcement authorities.

    “But, almost mysteriously, Mr. Murray’s motion transforms from statements like those quoted above into: ‘Dobson represented that Bowdoin’s cooperation would preclude the possibility of imprisonment following criminal charges.’  

    “Mr. Murray also writes: ‘Bowdoin agreed to release his claims in the civil forfeiture matter believing first that such action would avoid the possibility of imprisonment.’

    “Through these subtle but significant revisions, Mr. Murray suggests, and hopes to convince this Court, that even though Bowdoin was told by his several different prior attorneys that his conduct was criminal, and even though he retained criminal counsel to assist him, and even though Bowdoin says he was told that cooperation might lessen the prison exposure Bowdoin was facing for his criminal conduct, Bowdoin really thought he had resolved the criminal matter in a way that would guarantee him no jail time (as if this were merely a regulatory matter) when Bowdoin released his challenge to the seized money.”

    Read the prosecution’s memo.

  • Did AdViewGlobal Insiders Know About Purported Bowdoin Indictment In May And Engage In Bizarre Summertime Cover-Up Bid?

    UPDATED 3:53 P.M. EDT (U.S.A.) The adviewglobal.com domain appears to be back online, with a renewed registration for one year. The domain name had expired Sept. 22, throwing the site offline and triggering questions and confusion from members.

    Here, below, our earlier story . . .

    AdSurfDaily President Andy Bowdoin now suggests he was indicted under seal in May. If true, does the Bowdoin indictment help explain the strange events at AdViewGlobal in May, June, July and August — events that culminated in September with AVG going offline?

    If you’re new to the PatrickPretty.com Blog, perhaps our archives can be of assistance in helping you understand more of the context of the ASD/AVG story.

    Here is a story from April that focuses on the prosecution’s bombshell announcement that Bowdoin had signed a proffer letter in the case.

    Prosecutors had responded to three of the four pro se pleadings by Bowdoin without divulging the existence of the letter. Only in their fourth and final response to the pleadings did they disclose that Bowdoin perhaps was assisting the government in unwinding the ASD mess, before Bowdoin suddenly changed his mind and morphed into a pro se litigant seeking to recast the civil-forfeiture case as a criminal matter and to undo his decision to cede tens of millions of dollars to the government.

    For additional background, see this story from March about apparent cash-flow problems that had developed at AVG, only weeks after its formal launch in February.

    Moving forward, perhaps this May story about AVG’s announcement it had secured a new wire facility to replace one that apparently had been suspended in March will add to your knowledge base.

    AVG made the announcement May 4, only hours after the President of the United States and the U.S. Treasury Department had announced a crackdown on international fraud.

    Three days later, a company AVG identified as a facilitator of the international wire transfers denied it had any business relationship with AVG. The firm suggested it had been targeted in a scam by which AVG would route money to itself by using a shell company.

    AVG ignored the denial, instead saying negotiations it already had announced as completed — up to and including precise wiring instructions for members to purchase “advertising” — had failed.

    An attempt by AVG to launch a new website about two weeks later failed. The website, which featured a Yellow Pages logo and suggested AVG perhaps was entering into even more businesses the government monitors closely, was withdrawn. AVG had announced an “unprecedented” 250 percent match to promote the website, a possible marker of severe cash-flow problems.

    Perhaps to send a signal all was well, the surf paid out higher-than-normal paper profits just prior to the introduction of the 250 percent bonus. An AVG forum run by some of the Mods and members of the Pro-ASD Surf’s Up forum went on a delete-fest when members began to ask uncomfortable questions.

    By June 1, AVG announced a new suite of products and services, apparently redefining itself only days after the purported indictment against Bowdoin.

    An email AVG sent to announce its new offerings hotlinked to the servers of three publishing companies, including Forbes. This led to questions about whether AVG was trying to create the appearance of legitimacy by piggybacking off the brands of legitimate companies — a practice associated with ASD.

    On June 3, a furious reaction ensued after we published a story on an AVG member’s plan to help prospects with “big bucks” qualify for matching bonuses before the June 5 deadline. The story questioned whether members who took the approach were committing wire fraud.

    Could AVG have been reacting to stress caused by the purported indictment against Bowdoin?

    One of our readers/posters, Entertained, the author of a “Black Box” mathematical method to prove/disprove Ponzi schemes, later composed some questions for AVG. (See story/comments thread.)

    AVG recast the questions. (See story/comments thread.)

    AVG suspended cashouts June 25. It explained that members had cheated the system by taking advantage of a cash button the surf itself had offered. AVG later changed its story, saying $2.7 million had been stolen from the firm.

    It has been very difficult to identify the actual owners of the eWalletPlus payment processor AVG said it owned. No fewer than three companies have claimed to own the payment processor, which now is offline.

    Now AVG itself is offline.

    UPDATE 3:53 P.M. Site appears to be back online, with the domain name renewed.

  • BREAKING NEWS: Judge Grants Bowdoin Request For More Time, As AdSurfDaily Negotiates With Prosecutors

    A federal judge has granted Andy Bowdoin more time to respond to an order to show cause.

    Judge Rosemary Collyer said Bowdoin and AdSurfDaily Inc. could have until Aug. 28 to show cause why its motion to reverse Bowdoin’s decision to forfeit tens of millions of dollars to the government should not be denied.

    The original deadline was Aug. 7. Bowdoin is the president of ASD. Prosecutors seized at least $65 million from Bowdoin bank accounts last year, records show.

    “It is hereby ORDERED that Claimants shall file a response to . . . [the] Order to Show Cause no later than August 28, 2009,” Collyer wrote in a minute order late this afternoon.

    ASD revealed in court filings yesterday that it had entered into negotiations with federal prosecutors.

    Charles A. Murray, Bowdoin’s attorney, advised Collyer yesterday that the negotiations “could result in an agreement resolving the matters in dispute either in part or whole.”

    A firm with a close family, membership and promotional ties to ASD — AdViewGlobal (AVG) — announced this morning that it had filed a theft report with state and federal authorities, saying $2.7 million had been embezzled from the firm.

    AVG identified two suspects, saying they once were affiliated with the eWalletPlus payment processor.

    In other news, the government announced it had perfected the forfeiture of more than $14 million from Golden Panda Ad Builder, another firm associated with ASD. Prosecutors said they intended to implement a restitution program for members who certified under oath that they were victims of a crime.

  • DID SURF FIRM JUST MAKE HISTORY? AdViewGlobal Says It Filed State, Federal Complaints About $2.7 Million Theft; Surf Wants New CFO, Compliance Officer, Department Managers; Asks Members To Keep Surfing

    UPDATED 12:03 P.M. EDT (U.S.A.) One day after AdSurfDaily Inc. revealed in court filings that it was negotiating with federal prosecutors, the AdViewGlobal (AVG) autosurf announced it had been the victim of a $2.7 million theft.

    AVG, which purports to be headquartered in Uruguay, said it reported the theft to state and federal authorities. If confirmed, it may mark the first time in history that a surf filed such a report. Autosurfs frequently are associated with Ponzi schemes and the sale of unregistered securities.

    “Legal complaints have been filed in both cases and are currently being pursued by law enforcement authorities at both the state and federal levels,” AVG said in an announcement to members.

    It was not immediately clear if the surf was conceding it was headquartered in the United States, rather than Uruguay. The surf did not identify the agencies to which it had reported the alleged theft.

    AVG identified two suspects, saying they once were affiliated with the eWalletPlus payment processor. Some members had been clamoring for the surf to name suspects.

    “We’ve been reluctant to share this information with you, because we were under the impression that the money would be returned within a fairly brief period of time. In the past 24 hours, however, we’ve learned that it could take 6 months to a year to get the money back to us,” AVG said.

    AVG did not say how it got the impression that the money would be returned in “a fairly brief period of time.” Nor did it reveal how it learned it could take up to a year to recover the money or that the funds even were recoverable.

    Federal prosecutors said in December that ASD President Andy Bowdoin never reported a $1 million theft at the purported hands of “Russian” hackers. The allegation is contained in a Dec. 19 forfeiture complaint that names George and Judy Harris as beneficiaries of illegal conduct by ASD.

    Today is the one-year anniversary of the formal seizure of tens of millions of dollars from ASD by the U.S. Secret Service.

    George Harris is Andy Bowdoin’s stepson; Judy Harris is the wife of George Harris. AVG announced last month that George and Judy Harris owned AVG. Since that time, a Pinksheet stock known as Vana Blue (VBLU.PK), which says it owns Karveck International and the associated eWalletPlus payment processor, has clouded the issue of what individual or company actually owns AVG.

    In today’s announcement, AVG did not say if George or Judy Harris — or another management employee — contacted authorities to report the alleged theft.

    AVG did say it was seeking a new chief financial officer, compliance officer and department heads for public relations, customer service and new projects. The surf did not say whether it had fired employees who held those jobs previously.

    “We’re undergoing a complete overhaul of all management positions and procedural systems,” AVG said. The surf added that it was recruiting from within and that applicants are required “to sign a confidentiality agreement that will be strictly enforced.”

    The surf did not say whether the successful candidates would be required to move to Uruguay.

    AVG, which announced June 25 that it was suspending member cashouts and making an 80/20 program mandatory if and when payouts resume, said today that it was “evaluating the extent to which the inflated page impressions amassed by some members created artificial cash balances.”

    Members said AVG’s frequent use of 200-percent, matching bonus programs for both recruits and sponsors — coupled with an in-house, member-to-member cash button — led to some downline groups and individuals owning millions of page impressions and creating untenable liabilities for the surf.

    How AVG intends to deal with the liabilities it created through unchecked bonuses and purported abuse of the cash button is not clear. By suspending payouts June 25, the surf exercised its version of a “rebates aren’t guaranteed” clause.

    Some members said they will not surf until cashouts resume because each advertisement AVG displays erodes profitability for individual members.

    “We sincerely hope that you’ll continue to support us . . . and keep on surfing! AVG said today.

    See July 23 story.

    See July 27 story.

  • BREAKING NEWS: Andy Bowdoin Negotiating With Federal Prosecutors In AdSurfDaily Inc. Forfeiture Case

    UPDATED 1:23 P.M. EDT (U.S.A.) AdSurfDaily President Andy Bowdoin — through his attorney — is negotiating with federal prosecutors.

    Charles A. Murray, Bowdoin’s attorney, has advised U.S. District Judge Rosemary Collyer that the negotiations “could result in an agreement resolving the matters in dispute either in part or whole.”

    Prosecutors have consented to Bowdoin being granted a delay until Aug. 28 to respond to an order to show cause why motions he filed to reverse a previous decision he made to cede tens of millions of dollars seized last year should not be denied. Bowdoin’s response was due Aug. 7 by court order.

    Collyer has not ruled on the consent motion to delay the response to Aug. 28.

    Murray’s motion today was filed on behalf of Bowdoin and AdSurfDaily Inc. The motion did not reference Bowdoin/Harris Enterprises, another corporate entity for which Murray entered a notice of appearance in April.

    Why Murray did not list Bowdoin/Harris Enterprises in today’s motion is unclear.

    Members of the Bowdoin/Harris family — including Bowdoin’s stepson George Harris — have been identified as the owners of the AdViewGlobal autosurf, which suspended cashouts June 25 and later disabled its forum.

  • BREAKING NEWS: Plaintiffs In ASD RICO Case Ask Court To Extend Deadline For Class-Action Certification, Saying They Haven’t Been Able To Serve Bowdoin, Busby, Garner

    Andy Bowdoin
    Andy Bowdoin

    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.”

    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.