URGENT >> BULLETIN >> MOVING: (UPDATED 6:23 P.M. EDT U.S.A.) AdSurfDaily President Andy Bowdoin — the confessed author of a $110 million online Ponzi scheme — was jailed at the conclusion of a bond-revocation hearing in Washington today.
Bowdoin is being detained at a local Department of Corrections facility in the District of Columbia, the jail confirmed this evening. No other information was immediately available.
Federal prosecutors in the District of Columbia say Bowdoin was detained after the proceeding before U.S. District Judge Rosemary Collyer.
In April, prosecutors said Bowdoin continued to promote scams after the ASD Ponzi probe began in July 2008 and after his December 2010 arrest by the U.S. Secret Service on Ponzi-related charges. Prosecutors identified those scams as “OneX” and AdViewGlobal, an ASD-like autosurf.
Bowdoin, 77, pleaded guilty to wire fraud in the ASD case last month. His formal sentencing has been set for Aug. 29 before Collyer.
Bowdoin faces up to 78 months in federal prison, when sentenced by Collyer. He has been banned from multilevel marketing, Internet programs and mass marketing.
UPDATED 12:27 P.M. EDT (JUNE 12, U.S.A.) Paul R. Burks, the chief executive officer of Rex Venture Group LLC, has made four contributions to the GOP Presidential campaign of Rep. Ron Paul since July 2011, Federal Election Commission records show.
Rex Venture is the purported parent company of Zeek Rewards, a North Carolina-based MLM program that plants the seed that returns of more than 1 percent a day are possible, and Zeekler, a penny-auction site that is auctioning sums of U.S. currency and curiously says it pays successful bidders through offshore payment processors such as AlertPay (now Payza) and SolidTrustPay.
Some Zeekler bidders now claim they have not been paid for their winning bids on U.S. currency for weeks or even months. They’re also complaining about slow, absent or circular customer support.
The Ron Paul 2012 Presidential Campaign Committee Inc. recorded a $500 contribution from Burks on July 19, 2011, another $500 contribution on Aug. 20, 2011, a $1,000 contribution on Sept. 17, 2011 and a $500 contribution on Jan. 14, 2012, according to Federal Election Commission records.
Rex Venture has scored an “F” rating from the Better Business Bureau, the BBB’s lowest score.
Zeek insists it is not offering an investment product and has preemptively denied it is operating a pyramid scheme.
In 2008, an MLM company with a business model similar to Zeek — AdSurfDaily — preemptively denied it was operating a Ponzi scheme. Federal Election Commission and other records showed that ASD President Andy Bowdoin was making campaign donations to the National Republican Congressional Committee in 2007 even as ASD members were complaining about not getting paid.
In August 2008, the U.S. Secret Service moved to seize $65.8 million from Bowdoin’s bank accounts, saying he was presiding over a massive online Ponzi scheme. Federal prosecutors later accused Bowdoin of making the campaign donations with Ponzi money.
Bowdoin pleaded guilty to wire fraud in the ASD Ponzi case last month.
A Blog targeted at senior citizens is recruiting affiliates for Zeek Rewards, JSS Tripler/JustBeenPaid and other online "programs" that suggest they can create riches. (Redaction by PP Blog.)
EDITOR’S NOTE: As the PP Blog was researching matters pertaining to the Zeek Rewards MLM “program” and preparing the post below for publication, it encountered a subdomain of the ZeekRewards.com website styled “zeeksupport.” A page on the subdomain purports to identify 16 Zeek “employees,” although is was unclear whether the workers received a wage or salary or were independent contractors.
Here is the full URL: http://zeeksupport.zeekrewards.com/zeeksupport/people
Included among the “employees” listed were Terralynn Hoy and Catherine Parker, both of whom were affiliated with AdSurfDaily, which the U.S. Secret Service alleged was a Ponzi scheme that had gathered at least $110 million. Hoy, at least, also was affiliated with an ASD knockoff known as AdViewGlobal.
In April, federal prosecutors in the District of Columbia said they’d tied ASD President Andy Bowdoin to AdViewGlobal. Bowdoin, 77, pleaded guilty to wire fraud last month after being charged criminally in 2010 for his role in the ASD Ponzi scheme. As part of a plea agreement, Bowdoin has been banned from MLM, Internet programs and mass marketing.
Although the story below does not report on the Zeek claims that Hoy and Parker are Zeek employees, a link on the Zeek subdomain leads to a page in which “Catherine Parker” is responding to Zeek customer-service issues, including one titled, “TO BE PAID FOR OUTSTANDING AUCTION WINNINGS, POST HERE.” Within the customer-service thread is a post from an individual who claimed to have won an April 12, 2012, Zeekler auction for $100 in U.S. cash with a winning bid of $16.28 — but never received his money. Other posters also claimed not to have been paid . . .
UPDATED 5:27 P.M. EDT (U.S.A.) A detailed post from December 2011 on an affiliate Blog that publishes information in German and English instructs affiliates of the Zeek Rewards MLM “program” how to wire funds to Zeek and have them deposited in its account at NewBridge Bank in North Carolina. The Blog, which targets senior citizens, is hosted on Google’s free Blogspot platform at a subdomain styled “getlucky2011.”
Zeek announced suddenly last week that it was ending its relationship with NewBridge. It also announced it was ending its relationship with BB&T, a second bank based in North Carolina. Zeek plants the seed that affiliates can earn a return of between 1 percent and 2 percent a day, but the “program” insists it is not offering an investment opportunity.
Included on the same affiliate Blog are multiple pitches for JSS Tripler/JustBeenPaid, a “program” purportedly operated by Frederick Mann that does not disclose its base of operations, may have ties to the “sovereign citizens” movement and advertises a return of 60 percent a month. The deck of the Blog, which includes a Zeek affiliate link in the right sidebar, features these words (bolding added):
“Indefinitely sustainable second income seniors earn independent living, plan their retirement, meet seniors assisted living, meet seniors online, secure your pension, look for retirement services and retirement benefits”
The post provides a glimpse into how U.S. banks could come into possession of funds tainted by fraud as the funds circulate between and among various HYIP programs advertised online. Research by the PP Blog shows that NewBridge also was one of the banks that handled the business of a bizarre MLM “program” known as “Narc That Car” that effectively collapsed in 2010 after the Better Business Bureau raised pyramid-scheme concerns and American television stations and investigative reporters turned their sights on Narc.
How Narc, a Texas-based company that used at least two names and at least two banks when issuing checks to members, ended up using NewBridge in North Carolina as one of its banks is unclear. Narc issued checks under the names of Narc Technologies Inc. and National Automotive Record Centre Inc. The entity later became known by a third name: Crowd Sourcing International.
National Automotive Record Centre Inc., Narc’s purported parent company, is listed in Nevada records as a corporation in “default.” Zeek’s purported parent company, Rex Venture Group LLC, also is registered in Nevada. Like Narc, Rex has scored an “F” from the BBB. (See Rex listing. See Narc listing.)
Like Zeek, Narc relied on a company known as USHBB Inc. to produce video sales pitches for its opportunity. USHBB is based in Indianapolis. Among its listed officers is OH Brown of Mount Pleasant, S.C. Brown hosted this May 2012 call for the Zeek “program” and also is listed on Zeek’s website as a Zeek “employee” who simultaneously holds the title “Official Rep.” Whether Brown receives compensation from Zeek while also serving as the vice president of USHBB is unclear.
On March 15, 2010, the PP Blog published a story that reported that a video USHBB produced for the Narc “program” asserted that some affiliates were earning more money than the President of the United States.
As part of its reporting on Narc, the PP Blog visited a USHBB website in 2010 that claimed the company had done promotional work for MLM teams and companies such as Ad Surf Daily, AdGateWorld, BizAdSplash, Ad-ventures4U, TVI Express and Global Verge/Buzzirk Mobile. Virtually all of the enterprises listed were associated with get-rich-quick schemes or HYIP autosurfs. Some of the “programs” later went missing from the web or were accused of fraud.
Frederick Mann of JSS Tripler/JustBeenPaid was a promoter of both AdSurfDaily and Ad-ventures4U, according to records. Clarence Busby, a onetime business partner of ASD’s Andy Bowdoin, was the purported chief consultant and operator of BizAdSplash, an autosurf that vanished mysteriously in 2010. Erma Seabaugh, ASD’s purported “Web Room Lady,” also was affiliated with Ad-ventures4U.
On March 2, 2010, the PP Blog reported that a Narc affiliate known as “Jah” was seeking to drive business to Narc by producing his own videos and posting them on YouTube. “Jah’s” videos featured check-waving as a form of social proof that Narc “paid.” One of the videos, which later was removed, showed a Narc check drawn on NewBridge. Another “Jah” video that still appears online shows that Narc also had an account at a second bank.
“Jah” compared repping for Narc to working for the U.S. Census Bureau.
Some of “Jah’s” check-waving videos later were hidden from public view. Jah, however, was not the sole Narc affiliate to produce check-waving videos in which checks from NewBridge were displayed. Though Narc appears to be long gone, the PP Blog observed a video today on YouTube in which the name of NewBridge flashed on the screen.
Zeek has not provided specifics about why it ended its relationship with NewBridge.
Among the assertions on the German/English Blog that was targeting senior citizens and promoting both Zeek and JSS/Tripler/JustBeenPaid was that “SolidTrustPay is one of the worlds most trusted e-wallet providers.”
SolidTrustPay is a Canada-based payment processor that is handling business for both Zeek and JSS Tripler/JustBeenPaid.
The PP Blog reported on June 2 that JSS/JBP also was being promoted on a race-baiting and Catholic-bashing site known as VaticanAssassins. The VaticanAssassins site, among other things, asserts that ““Majority Savage Blacks were never taught to behave in civil White Protestant culture and thus have been released upon us Reformation Bible-believing Whites to further destroy our once White Protestant and Baptist American culture founded upon the Reformation’s AV1611 English Bible and a White Protestant Presbyterian Constitution with its attached White Baptist-Calvinist Bill of Rights.”
BULLETIN: Federal prosecutors have gone to federal court in the Southern District of Florida, asking a judge to delay discovery in the November 2011 lawsuit filed against the government by AdSurfDaily figures Dwight Owen Schweitzer and Todd Disner.
In cases in which plaintiffs sue the government in federal court, assistant U.S. Attorneys who ordinarily may assist in the prosecution of civil and criminal cases put on a new hat and become lawyers representing the government as a client.
An assistant U.S. Attorney is now the lawyer for the government because Schweitzer and Disner effectively sued the office of U.S. Attorney Ronald C. Machen Jr. in the District of Columbia for alleged misdeeds in the ASD case even as they accused the U.S. Secret Service of assisting in the government presentation of a “tissue of lies” against AdSurfDaily President Andy Bowdoin and ASD itself.
Schweitzer and Disner have not been accused of wrongdoing. Among the curious assertions in their lawsuit against the government was that undercover agents who had infiltrated ASD had a duty to report the agents’ alleged ASD Terms of Service violations to ASD management.
After their ASD days, Disner and Schweitzer moved on to become affiliates for Zeek Rewards, an MLM “program” that plants the seed that returns between 1 percent and 2 percent a day are possible and that Zeek does not constitute an investment opportunity. ASD planted the seed that it paid 1 percent a day and also claimed it was not offering an investment opportunity.
In 2008, prosecutors said ASD was relying on wordplay to try to skirt securities laws. ASD President Andy Bowdoin pleaded guilty to wire fraud in the ASD case on May 18 and acknowledged he was at the helm of a Ponzi scheme and illegal money-making business that had defrauded members since its inception in 2006.
By the end of the business day on May 18, prosecutors asked a federal judge in Southern Florida — the venue in which Disner and Schweitzer brought their lawsuit — to take notice of Bowdoin’s guilty plea before U.S. District Judge Rosemary Collyer more than 1,000 miles north in the District of Columbia. Even as they pointed to Bowdoin’s guilty plea, prosecutors asked that the Disner/Schweitzer case be dismissed.
Prosecutors say their dismissal motion would eliminate the need for any discovery if approved by U.S. District Judge Judge Cecilia M. Altonaga in the Southern District of Florida. If Altonaga chooses not to dismiss the Schweitzer/Disner complaint, prosecutors said, the case should be moved to the District of Columbia, the venue in which at least three civil-forfeiture actions against ASD-related assets were brought in 2008 and 2009.
In their June 4 motion to delay discovery pending a ruling on the dismissal motion, prosecutors said they emailed Schweitzer and Disner on May 23 “seeking their positions on the defendant’s motion to stay” discovery, but that neither Schweitzer nor Disner responded to the emails.
Retooling as it hatches a plan to launch anew? Huddling with its mysterious lawyer because the U.S. Department of Justice called it a “fraudulent scheme” and “pyramid” pushed by an accused felon awaiting trial in his Ponzi scheme case?
The website of “OneX” has been displaying an “under maintenance” message for days. The development occurs against the backdrop of former OneX pitchman and AdSurfDaily President Andy Bowdoin’s guilty plea to wire fraud in the ASD Ponzi case May 18. In April, federal prosecutors said ASD stalwarts Rayda Roundy and Tari Steward had helped Bowdoin pitch OneX.
Those pitches began in October 2011, with Bowdoin saying he’d use his OneX earnings to pay for his criminal defense in the ASD Ponzi case. Steward is listed in court filings as a potential witness for Bowdoin in his trial on Ponzi-related charges.
Bowdoin, though, pleaded guilty prior to his trial date, which had been set for Sept. 24.
Just days before his guilty plea, a fellow OneX pitchman known as “Alan” asserted that Bowdoin was “our Mentor,” according to an email some ASD members received.
In at least one of the OneX pitches, Roundy asserted that OneX had a “top attorney.” She did not identify the attorney.
Bowdoin claimed “college students” were great prospects for OneX. But the ASD patriarch did not identify the operators or braintrust behind OneX or say where the “program” was operating from. Instead, he told prospects that they could earn $99,000 very quickly through OneX.
Federal prosecutors now say OneX was recycling money in ASD-like fashion. They also say they’ve linked Bowdoin to AdViewGlobal, an autosurf that launched after the seizure of tens of millions of dollars in the ASD Ponzi case in 2008 and disappeared in the summer of 2009 under mysterious circumstances.
Like ASD’s website during its Ponzi run, the OneX website has a history of going missing for days. It was offline and reportedly under maintenance during the 2011 Holiday season. Now, it’s under maintenance on the heels of Bowdoin’s guilty plea.
In 2009 — after the ASD seizure — Bowdoin also pitched a mysterious “program” known as Paperless Access. Much about Paperless Access remains mysterious. Its website also vanished.
As part of his plea agreement in the ASD case, Bowdoin has been banned from MLM, Internet programs and mass marketing.
After wrapping itself in the American flag on Memorial Day and authoring a vague announcement that it “will be closing our old accounts” at two named U.S. banks and transitioning to an unnamed bank “that can handle our growing needs,” the Zeek Rewards MLM “program” now says it experienced a problem with “mislabeled” credit-card purchases.
Zeek blamed a vendor for the problem, which resulted in Zeek purchases being mislabeled as purchases from a company named “Zonalibre1,” Zeek said.
“We have just been informed that our credit card processing mis labeled [sic] zeek purchases with the company name Zonalibre1 for the past 15 hours,” Zeek said on its news Blog last night. “This is currently being corrected on all billing statements. If you have purchased anything from zeek in the past 15 to 20 hours and have a ‘Zonalibre1’ charge for the same dollar amount as your zeek purchase, please do not dispute the charge.”
“Zona Libre” is a Spanish phrase that means “free zone.” Zeek did not say who informed it about the problem. Nor did it identify the vendor or say whether it was using a U.S. domestic or offshore processor to handle credit card transactions.
Zeek announced Monday that it was dumping two U.S. banks, adding a layer of mystery by saying it “is currently in the process of moving to a bank” — but not saying whether its new bank was U.S. domestic or offshore.
A Zeek-related business known as Zeekler is a penny-auction site. Among other things, Zeekler puts up for bid sums of U.S. currency, saying successful bidders can receive their winnings via the payment processors AlertPay (now Payza) and SolidTrustPay. Both firms are offshore from a U.S. perspective and have gained reputations as enablers of fraud schemes.
Among the many other Ponzi-forum promoted “programs” that use AlertPay and SolidTrustPay is JSS Tripler/JustBeenPaid, which purportedly is operated by Frederick Mann and may have ties to the so-called “sovereign citizens” movement. JSS/JBP purports to pay 2 percent a day. “Sovereign citizens” have an irrational belief that laws do not apply to them.
Promos in 2008 identified Mann as a pitchman for AdSurfDaily, which the U.S. Secret Service described as a “criminal enterprise” and Ponzi scheme that had gathered at least $110 million online. ASD is known to have had “sovereign citizens” in its ranks. ASD President Andy Bowdoin pleaded guilty to wire fraud last month, acknowledging that ASD was a Ponzi scheme that had defrauded participants from Day One of its operation, beginning in late 2006.
Some former ASD affiliates also are known to be promoting Zeek. Included among them are Todd Disner and Dwight Owen Schweitzer, who sued the United States last year for alleged misdeeds in bringing the ASD Ponzi case. One text ad for Zeek that includes a photo of Schweitzer includes this phrase (italics added):
“I earn 1%+ a day compounded & you can too!”
Schweitzer is a former attorney whose license was suspended in Connecticut. Disner is a co-founder of the Quiznos sandwich franchise.
Both Zeek Rewards and Zeekler say they are part of an entity known as Rex Venture Group. Rex operates in North Carolina, the same state in which the banks it announced it was dumping operate. On Monday, Zeek instructed customers to “Please be sure to deposit or cash any commission checks immediately so they clear before June 1st, 2012 or they will be returned to you with ‘account closed’ and will need to be reissued.”
Two days later — on Wednesday, during evening hours in the United States — Zeek issued a strange announcement that used the term “claw-back.” “Clawback” is a word often associated with Ponzi schemes. For instance, if investors in Ponzi schemes emerge as winners among a pool of losers, the government or court-appointed receivers may file clawback lawsuits that demand the return of funds from winners as a means of ensuring that all victims of a fraud scheme are treated equally.
Here, in one instance, is how Zeek used the term (italics added):
“As you know, we are currently in the process of transferring accounts to our new banks. While we will be able to resume check runs when the transfers are finalized, we do not want to cause any additional delay to our affiliates who are waiting for their May 21st or 28th commission checks. Therefore we are going to be issuing a claw-back of all requested checks into a special Zeek portal where any affiliate who is awaiting a physical check can instead choose their preferred eWallet for their commission payment. All three fully integrated eWallets (below) will be made available for this and future paydays.
SolidTrust Pay
AlertPay
Although Zeek initially said on Wednesday it had three eWallet providers, it now appears to be referencing only two — apparently editing its original news-Blog post. (In the original announcement Wednesday, Zeek also listed NXPay.)
Adding another layer of mystery to Wednesday’s announcement was Zeek’s use of the plural “banks” in the context of its transition to new service-providers. On Monday, Zeek used the singular “bank,” implying that it was selecting a single new bank to handle its needs.
Zeek affiliates have a presence on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup, forums whose members promote “programs” that purportedly offer returns that are both unusually consistent and outsize — typically at preposterous ROIs that exceed 1 percent a day.
Affiliates of Zeek say the Zeek “program” pays out between 1 percent and 2 percent a day, although Zeek claims it is not an investment program and has preemptively denied it is a pyramid scheme.
Among Zeek’s claimed consultants are the MLM law firm of Gerald Nehra, and purported MLM expert Keith Laggos. Both Nehra and Laggos ventured opinions that ASD was not a Ponzi scheme. Disner and Schweitzer pointed to those opinions when suing the United States in November 2011.
The government has moved for dismissal of the lawsuit, pointing to Bowdoin’s guilty plea and acknowledgement that ASD was a Ponzi scheme. Among other things, Disner and Schweitzer argued that undercover agents who joined ASD prior to the seizure of $65.8 million in the personal bank accounts of Bowdoin violated ASDs Terms of Service and had a duty to report their alleged violations to ASD.
Disner and Schweitzer also sued Rust Consulting Inc., the government-approved claims administrator in the ASD case. A federal judge dismissed Rust as a defendant weeks ago.
(UPDATED 10:56 A.M. EDT (U.S.A.) Frederick Mann, the purported operator of JSS Tripler/JustBeenPaid, acknowledged in a conference call last night that the program that advertises a return of 60 percent a month is not registered with regulators. The acknowledgement, which potentially puts promoters worldwide at risk of being drawn into both civil and criminal prosecutions for selling unregistered securities and participating in a global financial conspiracy, occurred near the tail end of a call that lasted nearly an hour and a half.
JSS/JBP may have ties to the “sovereign citizen” movement, a loosely knit confederation of individuals who have an irrational belief that laws do not apply to them. The enterprise does not say where it is operating from and is using a number of payment processors that are “offshore” from a U.S. perspective.
A caller who identified himself as “Brian” from California asked Mann straight out if JSS/JBP was “legally registered.”
“You may have it backward,” Mann replied. “If you are legally registered, then you’ve signed up to be a slave, part of the slave system, and then they have jurisdiction over you and can shut you down.”
Earlier in the call — in response to a question from “Ricky” about why the JSS/JBP member agreement makes enlistees affirm they are not employees or officials of the “government” — Mann said this:
“In general, government people are not welcome in JBP.”
And then Mann explained why.
“Well, they’re part of a criminal gang of robbers, thieves, murderers, liars, imposters.”
Mann also said this: “These people are much worse than the Mafia.”
He conceded that some government employees might be good people. Mann also implied that, if a government employee signed up for JSS/JBP and later became a witness against the company, JSS/JBP would be able to challenge the credibility of the witness because of the firm’s member agreement.
In February, Gregory McKnight, the operator of the $72 million Legisi HYIP Ponzi scheme, pleaded guilty to wire fraud. Legisi had member terms similar to JSS/JBP. The terms neither insulated Legisi nor McKnight from prosecution.
After Mann compared the government to the Mafia, a caller who identified himself as “Richard” from “Phoenix” described Mann as a “savior for the world.”
JSS/JBP purports to provide a preposterous daily return of 2 percent — twice that of AdSurfDaily, a $110 million Ponzi scheme that came under investigation by the U.S. Department of Justice and the U.S. Secret Service in 2008. ASD President Andy Bowdoin pleaded guilty last week to wire fraud.
Mann, identified in 2008 promos as an ASD pitchman, said last night that ASD “basically operated as a sitting duck.”
Asked by a caller if JSS/JBP had lawyers to protect itself, Mann said this:
“Typically, lawyers are part of the slave system.”
And Mann speculated that the government could fire “cruise missiles” to take out a building in the Netherlands “where our servers are.”
Mann implied during the call that JSS/JBP had studied the ASD Ponzi case and had taken measures not to get swept into a Ponzi probe.
ASD was a “very badly managed business,” Mann said, adding that JSS/JBP had “much better security than the typical registered company.”
Zeekler, an arm of a U.S. company, frequently promotes auctions for sums of U.S. cash. Winning bidders can collect the sums via offshore payment processors linked to fraud scheme after fraud scheme. Zeek is adding to the incongruity by preemptively denying it is a "pyramid scheme" while planting the seed that the U.S. government is operating a pyramid scheme through the Social Security program.
UPDATED 11:12 A.M. EDT (U.S.A.) After the U.S. Secret Service seized tens of millions of dollars in the AdSurfDaily Ponzi case in 2008, some of ASD’s Stepfordian members advanced the bizarre theory that ASD should have been left untouched because Social Security — a U.S. government program — is a Ponzi scheme. The argument, which assumes Social Security is a Ponzi scheme, is disingenuous to its core. Even if it could be proven that Social Security is a Ponzi, it does not change the simple fact that private businesses are not permitted to operate Ponzi schemes.
With the Social Security argument providing disingenuous cover for ASD and scams across the web, some of ASD’s most reliable “defenders” instantly turned their attentions to other autosurfs, HYIPs, cyclers and cash-gifting schemes. They might as well have said, “If the government gets to run a Ponzi scheme, so do we.”
The Social Security argument is a deflection that gets trotted out in scam after scam. It is used so often in scams that feature an MLM or MLM-like component that it has become a cliché, a veritable signature of a scam. Some of the most robotic MLM Stepfordians can’t resist the urge to go heavy on the exclamation points when they’re “defending” the most recent “program” in their stable of scams. Many of the “defenses” are nothing more than antigovernment screeds.
Even ASD President Andy Bowdoin — who after preemptive denials now admits he was operating a massive Ponzi scheme and knew all along that ASD was “an illegal money making business” — could not summon the discipline required to put an end to his scamming ways and days after his arrest. The government now says it has tied Bowdoin to AdViewGlobal (AVG), an autosurf that launched after the Secret Service raid, and to “OneX,” an alleged “fraudulent scheme” and pyramid.”
After the ASD raid, Bowdoin embarked on a PR strategy that positioned the government as evil. The government, according to Bowdoin, was guilty of “wrong doing,” creating a “nightmare of injustices,” bringing “un-true charges” and the “suppression of all ASD members.”
Like the Social Security argument, it was just a way to change the subject.
It has become somewhat fashionable within the HYIP sphere for “program” operators to preemptively deny they are running Ponzi schemes. The up-front denials were an element in the ASD case. They are incongruous by their very nature because they typically occur even as the “program” plants the seed that it not only pays commissions on two or more levels, but also provides outsize returns of 1 percent or more per day — percentages that would make Bernard Madoff blush.
“Zeek Rewards” is an MLM “program” that is planting an ASD-like seed that money directed to the enterprise will produce a large return.
Given the lessons provided by the ASD case on both the legal and PR fronts, it is just plain bizarre that Zeek is preemptively denying it is a “pyramid scheme” — all while going heavy on the exclamation points and raising the issue of Social Security.
On its Zeekler.com penny-auction site, the “opportunity” is saying this (italics/bolding added):
Our parent company Rex Venture Group has been in business 13 years and has historically paid its representatives in the field every commission check earned since its’ [sic] inception. “Is this a Pyramid Scheme?” Of course not!! “Pyramids” or “Money Games” are illegal and ask its’ [sic] participants to wrap money in tin foil and FedEx it to “someone else” with no exchange for product or service!
For good measure, the site is saying this (italics/bolding added):
The pyramidal structure is actually the “model” structure of every corporation and even the U.S. Social Security system. Why then are pyramids illegal? Because there is no “exchange” of product or service for the money spent and the only ones who “collect” money are the people at the top of the pyramid. When there are no longer enough people coming and sending money “up” to move people thru the pyramid – the pyramid collapses. An example of a legal – yet collapsing pyramidal structure/system is what is happening to social security. The baby boomers are all coming of age to collect (at the top of the pyramid)- with not enough people paying in from the bottom!! The structure will then collapse. Every CEO is at the top of his/her company’s pyramidal structure. That’s why he/she makes so much more than a mailroom worker. At penny auction site Zeekler every person has the same opportunity to achieve the same income or out-earn the person who referred them into the program.
Whether Rex Venture Group historically has paid commissions is immaterial to the issue of whether the company is conducting a pyramid scheme through its Zeek arms. Like successful Ponzis, successful pyramid schemes pay. The payments are what keep new money flowing to the schemes. Web-based Ponzis/pyramids can be exceptionally dangerous because affiliates use the payments they receive as a disingenuous form of social proof that no scam is under way.
Zeek’s “tin foil” reference is an apparent allusion to obvious cash-gifting scams. But lawyered-up Zeek has to know that the pyramid issue is much more complicated that that, which is why the gifting allusion impresses us as a red herring. Ponzi/pyramid schemes come in many forms and often involve the issuance and sale of securities. Fraud purveyors may avoid the use of the language of investments, but a security described as something else is still a security.
And that’s one of the potential issues with Zeek: Is the company selling unregistered securities as investment contracts and trying to disclaim its way out of an encounter with regulators?
Zeek does not address this issue in its preemptive denial that it is operating a pyramid scheme and simultaneous argument that Social Security is a pyramid scheme. But it does touch on the securities issue at the bottom of the home page of ZeekRewards, the MLM arm of the Zeek “program” (italics added):
IMPORTANT: The following paragraph MUST BE READ ALOUD whenever the ZeekRewards compensation plan is presented verbally or by telephone, or included in it’s entirety when communicating in writing:
“If you make a purchase from ZeekRewards you are purchasing a Premium eCommerce subscription or you are purchasing bids to give away as samples. You are NOT purchasing stock or any other form of “investment” or equity. You MUST actually use the bids that you purchase or give them away as samples to help grow your business. Affiliates who present our products to others in a misleading manner or in a way that leads the buyer to believe he or she is making an investment or purchasing equities will be terminated and all commissions and awards will be forfeited. Buyers MUST read the entire How It Works and Get Paid pages on the ZeekRewards website and the Legal Disclaimers.”
At a minimum, this much can be said about Zeek: It has a tin ear for PR.
Zeek is preemptively denying it is a pyramid scheme even as its affiliates maintain a presence on well-known fraud forums such as TalkGold and MoneyMakerGroup, a circumstance that strongly suggests scammers are directing money to Zeek that they “earned” in other scams. The Social Security argument also is a loser because it is embraced by a sea of online scammers as a rationale for licensing themselves to commit crimes on a global scale.
ASD preemptively denied it was a Ponzi scheme. Its Stepfordian affiliates advanced the Social Security deflection even as they were racing to their next scams and positioning them as a way ASD members could make up their losses.
Almost all of the scams used the same offshore processors Zeek is using.
Under the terms of his plea agreement, AdSurfDaily President Andy Bowdoin effectively has been banned from multilevel marketing, Internet opportunities and businesses that employ mass marketing.
The agreement contains this provision, and Bowdoin consented to it in writing as a condition of release before he is formally sentenced: “Your client shall not participate in any business venture using the internet, multi-level marketing, or mass marketing.” (Italics added.)
Language in the agreement suggests the bans could last until Bowdoin is well into his eighties — until Bowdoin, now 77, serves any prison or probationary term imposed. No sentencing date has been scheduled. Bowdoin’s next court date is set for June 12 “to determine if he should be incarcerated pending his sentencing,” federal prosecutors said.
Bowdoin pleaded guilty yesterday to wire fraud for the web-based ASD scam. The information in the numbered entries (below) was confirmed by Bowdoin himself in a “Statement of Offense” that bears his signature. It is in stark contrast to earlier online claims by the ASD patriarch that he had been railroaded and that ASD members should send him money to pay for his criminal defense.
Second Key Win For Government
Bowdoin’s guilty plea marked the second recent win by the government in a major online HYIP case. Gregory N. McKnight, the operator of the Legisi HYIP and Ponzi scheme, pleaded guilty to wire fraud in February. The Legisi and ASD schemes fetched a combined haul of more than $180 million, according to court filings. Bowdoin’s scheme was a form of HYIP fraud known as “autosurfing” in which participants were promised enormous returns for viewing advertisements. The schemes spread in part through social networking and shilling sites such as the TalkGold and MoneyMakerGroup forums.
The U.S. Secret Service was involved in both the ASD and Legisi probes.
ASD Discussed In HYIP’s Conference Call Day Before Bowdoin Guilty Plea
A current HYIP scheme known as JSS Tripler/JustBeenPaid continues to make inroads online. Frederick Mann, the purported operator of JSS/JBP, was identified in 2008 promos as an ASD pitchman. Bowdoin’s legal problems were among the subjects of a JSS/JBP conference call Thursday that appeared to be heavily populated by U.S. residents, including some who expressed worry about the “program.” JSS/JBP purports to provide a daily return of 2 percent, twice that of ASD.
Less than 24 hours after Thurday’s JSS/JBP call ended, Bowdoin pleaded guilty in open court and subjected himself to a possible prison term of 78 months, along with three years’ supervised release. Under the terms of his plea agreement, Bowdoin potentially faces court supervision for the next 9 and a half years.
During Thursday’s call, Mann — an older man, like Bowdoin — did not rule out the possibility that his program could encounter an ASD-like intervention by the government.
“The slavemasters don’t want their slaves to escape,” Mann said, casting the U.S. government as wicked.
“What you need to realize is that the de facto U.S. Constitution is ‘anything goes’ that we can get away with. So, that’s how Obama operates. That’s how Romney would operate if he were elected President. That’s how George Bush operates.”
Like ASD, JSS/JBP may have ties or be sympathetic to the so-called “sovereign citizen” movement. “Sovereign citizens” have an irrational belief that laws do not apply to them. JSS/JBP is so secretive that the “opportunity” does not identify where it is operating from and makes members affirm they are not with the “government.”
After a caller asked Mann Thursday about ASD, Mann said this:
“If they want to arrest people and take their money, they will find some pretext.”
HYIPs operate as virtually pure Ponzi schemes. Victims can pile up by the tens of thousands in a single scheme. The schemes redistribute wealth from the masses and put it in the hands of a select few.
Bowdoin’s Statement
ASD's Andy Bowdoin
Before getting into some of the specifics of Bowdoin’s signed statement — a statement also signed by Bowdoin’s attorney Charles A. Murray and a federal prosecutor — it perhaps is worth noting that Bowdoin’s plea agreement contains this provision to which Bowdoin agreed in writing: “Your client represents to the Court that his attorney has rendered effective assistance.” (Italics added.)
Though boilerplate language, it is important in the context of Bowdoin’s history. Indeed, he has a history of publicly blaming lawyers for his problems. In 2011, for example, he appeared in a video solicitation in which he asked the people he now admits he defrauded to pay for his criminal defense. Bowdoin blamed his prior counsel, a federal judge, two federal prosecutors and three agents of the U.S. Secret Service for his predicament. The final page of the plea agreement contains this language to which Bowdoin agreed in writing:
“I have read this Plea Agreement and discussed it with my attorneys, Michael McDonnell, Esq. and Charles Murray, Esq. I fully understand this Plea Agreement and agree to it without reservation. I do this voluntarily and of my own free will, intending to be legally bound. No threats have been made against me nor am I under the influence of anything that could impede my ability to understand this Plea Agreement fully. I am pleading guilty because I am in fact guilty of the offense(s) identified in this Plea Agreement.” (Italics/bolding added)
Because of the plea agreement and the MLM/Internet/mass-marketing bans, Bowdoin’s role as an an online pitchman for a program known as “OneX” has ended.
In essence, because of what Bowdoin did in ASD — and allegedly what he continued to do even after being arrested for running a Ponzi scheme — Bowdoin has been banned from MLM, kicked out of the business side of the Web and barred from making mass solicitations in any form.
Prosecutors said last month that OneX was a “fraudulent scheme” and “pyramid” that was recycling money to members in ASD-like fashion. Bowdoin was arrested on ASD-related charges in December 2010. In October 2011 — 10 months after his arrest — he told OneX prospects that God had provided the OneX program and that he intended to use money from the scheme to pay for his criminal defense.
On Tuesday — just three days before Bowdoin pleaded guilty to a felony for his operation of ASD — a fellow OneX pitchman described Bowdoin as “our Mentor.”
Here, now, some highlights from Bowdoin’s signed “Statement of Offense” — along with editorial notes. Bolding added by the PP Blog . . .
1.) “Bowdoin called ASD’s operation a revenue-sharing advertising program . . .” (NOTE: All kinds of HYIP schemes use the phrase “revenue sharing” as a means of masking the Ponzi elements. The phrase, for example, appears on the website of JSS/JBP. It “works” because it sounds plausible. After all, many businesses share revenue legally. The connection many new HYIP enlistees do not make is that scammers have co-opted the term to sanitize their fraud schemes.)
2.) “But, contrary to its representations, the advertising packages sold by ASD generated insufficient revenue to fund the returns it promised to the members. Instead, ASD operated as a ‘Ponzi’ scheme.” (NOTE: ASD members Dwight Owen Schweitzer and Todd Disner sued the government last year, alleging that ASD was a legitimate business. Bowdoin now publicly disagrees with them, based on his admission that ASD was a Ponzi scheme.)
3.) “Throughout ASD’s operation, Bowdoin was aware that ASD was an illegal money making business, and that he was intentionally defrauding ASD members.”
4.) ASD, according to Bowdoin’s statement, actually gathered more than “$119 million” from members. (NOTE: This figure is about $9 million higher than the rough amount of $110 million cited by the government in previous filings. The PP Blog will check next week to see if it can confirm that the $119 million figure is the final sum identified after investigation. As things stand, both Bowdoin and the government agree on the $119 million figure.)
5.) ASD made more than $45 million in Ponzi payments and spent more than $10 million on operations. About $1.161 million was directed at Bowdoin or his family.
6.) During ASD’s initial iteration at AdSurfDaily.com, Bowdoin realized “[a]fter only a few months of operation” that ASD was in over its head “because he was not selling any independent products or services sufficient to generate an income stream needed to support the returns and commissions ASD was paying . . .” (NOTE: The JSS/JBP scheme has a commission-payout scheme (two tiers, one paying 10 percent the other 5 percent) that is virtually identical to ASD. Incredibly, JSS/JBP says it can pay double ASD’s daily return of 1 percent on top of the two-tiered commissions.)
7.) “In approximately March 2007, Bowdoin ceased ASD’s operations because it was paying out money to its employees and members faster than it was taking in new money.” (NOTE: Bowdoin’s concession proves the government’s longstanding theory that ASD collapsed in its original iteration because of the Ponzi pressure. At one point, according to court filings, Bowdoin blamed ASD’s inability to pay on script problems and a purported theft of $1 million by “Russian” hackers.)
8.) Bowdoin — instead of getting out of the Ponzi business — thereafter launched ASD under a new name at a new website: ASDCashGenerator.com. Bowdoin, according to his statement, admits he made some cosmetic tweaks — lowering the return from 150 percent to 125 percent, for example. “By not changing ASD’s business model in any meaningful way, Bowdoin continued to intentionally defraud members.” (NOTE: It is common in the HYIP fraud sphere for “admins” to claim they’ve employed tweaks to take Ponzi issues out of play. An obvious Ponzi scheme known as JSS Tripler 2 appears recently to have employed some Bowdoin-like tweaks, including a name change to T2MoneyKlub — while adding to its claims that the “opportunity” had income streams sufficient to pay an absurd return of 2 percent a day on top of referral commissions.)
9.) Bowdoin never told his second group of fraud victims that they were paying for the fraud Bowdoin committed against his first group of victims.
10.) “Bowdoin also intentionally failed to explain to old and new members that, in the 1990s, he was convicted in Alabama of three securities-related crimes, charged in Alabama in at least 13 additional indictments alleging securities fraud, and barred from ever selling securities in Alabama.”
11.) Bowdoin compounded lies told about his lack of a criminal record by permitting lies to be told about an award for business achievement purportedly given Bowdoin by President George W. Bush. The “award” actually was a memento from the National Republican Congressional Committee (NRCC) that was “entirely dependent” on a Bowdoin money contrbution to NRCC of $25,000 “and was not based on Bowdoin’s business acumen or any other evaluation of his prior business practices.”
URGENT >> BULLETIN >> MOVING:(5TH UPDATE: 5:54 P.M. EDT) Andy Bowdoin has pleaded guilty to wire fraud in the AdSurfDaily Ponzi case.
A bond-review hearing for the 77-year-old ASD patriarch had been scheduled for 2 p.m. today. Instead, the proceeding turned into a plea hearing.
“The Internet now allows swindlers to perpetrate fraud on a much larger scale than Charles Ponzi could have imagined 100 years ago,” said U.S. Attorney Ronald C. Machen Jr. of the District of Columbia. “Andy Bowdoin’s online Ponzi scheme took in $110 million from thousands of people across the United States and other countries. His guilty plea today is another milestone in our efforts to protect the public from being ripped off over the Internet. This case is a healthy reminder that the public should be skeptical when evaluating investment opportunities: If it sounds too good to be true, it probably is.”
Bowdoin, who was arrested in Florida by the U.S. Secret Service on Dec. 1, 2010, has been free on bond since his arrest. He will remain free at least until June 12, when another hearing is scheduled.
U.S. District Judge Rosemary Collyer is presiding over the case.
Bowdoin admitted today that he knew ASD was a fraud — but nevertheless continued to operate it between 2006 and 2008. He also admitted that he siphoned more than $1.16 million from the scam, using it to enrich himself and his family.
Under the terms of a plea agreement, Bowdoin faces a maximum sentence of 78 months in federal prison. How soon he would begin any sentence handed down remains unclear. It is believed that Bowdoin — who’d initially began negotiating with prosecutors in late 2008 — reentered negotiations after prosecutors accused him last month of pitching a “fraudulent scheme” and “pyramid” known as OneX.
Prosecutors also say they tied Bowdoin to an autosurf known as AdViewGlobal.
Larry M. Myers, a self-described “sovereign citizen” and fugitive who remained on the lam for 14 years before his August 2011 arrest, has been sentenced to 78 months in federal prison.
Myers, 63, was found guilty by a jury on Valentine’s Day of conspiracy, mailing threatening communications in a bid to extort and obstructing justice.
In March, the office of the Treasury Inspector General For Tax Administration (TIGTA) described Myers as member of a bogus entity known as “The Constitutional Court of We The People In and For The United States of America.”
The entity also was known as the “Constitutional Common Law Court” and “The Supreme Court of the Constitutional Court of We the People — In and For the united [sic] States of America.”
Known informally as CLC, the confabulations were “pseudo-judicial, non-governmental, and unofficial enterprise[s], created and established in 1992 in Tampa, Florida,” TIGTA said.
“Myers and his co-conspirators mailed a CLC arrest warrant to a Chief Judge of a Florida State court,” TIGTA said. “They also issued a CLC contempt of court order and ‘militia’ arrest warrant to a District Judge. By use of threats and threatening communications, Myers and co-conspirators attempted to influence, intimidate, obstruct, and impede jurors and officers in and of the Courts of the United States. For instance, they endeavored to intimidate a jury panel with a CLC ‘contempt of court order,’ in which they threatened arrest by ‘militia’ for alleged acts of treason.”
The office of U.S. Attorney Robert E. O’Neill of the Middle District of Florida described Myers as president of the so-called “Pinellas Patriots” in the Tampa region.
“He claimed that he was not a citizen of the United States, but a so-called sovereign citizen who was not subject to U.S. statutory laws,” O’Neill’s office said. “Myers participated in a sham ‘Common Law Court’ in a number of capacities, including as a ‘judge’ and a ‘militia enforcement officer.’ Between March 1994 and March 1996, Myers participated in a conspiracy with others, to obstruct justice by conveying threatening communications to state and federal judges, petit and grand jurors, and others, in order to obtain federal rulings in criminal cases, dismissals of indictments and release from incarceration for individuals who had been lawfully convicted.”
U.S. District Judge Steven D. Merryday ordered the 78-month sentence.
TIGTA and the FBI led the probe.
Curtis Richmond, a mainstay in the AdSurfDaily Ponzi scheme story, was a member of a similar sham entity in Utah.
A website linked to an emerging HYIP known as JSS Tripler/JustBeenPaid has showcased videos of purported Alaska “sovereign citizen” and “militia” leader Francis Schaeffer Cox. Cox and others are on trial amid allegations they hatched a plot against government officials.
Cox allegedly participated in a so-called common-law court that operated at a Denny’s Restaurant.
The sham entity with which Richmond was associated was known derisively as the “Arby’s Indians” because it once held a meeting at an Arby’s restaurant in Utah. Richmond was sued successfully under the federal RICO statute, and once was found guilty of contempt in California for threatening federal judges.
In a Utah case involving Richmond, a bogus lien for $250 million was placed against a county attorney and a false claim for $300,000 was made against a Family Services worker in the state. The bogus “tribe” conducted a “Supreme Court” that used the address of a Utah doughnut shop and also relied on a bogus “arbitration” panel to make mischief in the state.
Richmond repeatedly sought to intervene in the ASD case, at one time accusing the judge overseeing the case of “treason” and suggesting she and federal prosecutors were guilty of dozens of felonies.
Richmond’s theory of the ASD case was that the government was guilty of interfering in commerce. The U.S. Secret Service described ASD as an international Ponzi scheme that had gathered at least $110 million from the small town of Quincy in northern Florida.
Kenneth Wayne Leaming, another ASD story mainstay and purported “sovereign citizen,” is jailed near Seattle on charges of filing bogus liens against at least five public officials involved in the ASD case.
URGENT >> BULLETIN >> MOVING: (UPDATED 6:23 P.M. EDT U.S.A.) AdSurfDaily President Andy Bowdoin — the confessed author of a $110 million online Ponzi scheme — was jailed at the conclusion of a bond-revocation hearing in Washington today.
