As anticipated, the government has filed papers to finalize the forfeiture of more than $14 million seized from Bank of America accounts controlled by Golden Panda Ad Builder President Clarence Busby and his daughter, Dawn Stowers.
Busby surrendered claims to the funds in September. Earlier today the government set the official total of funds seized from Golden Panda at $14,045,598.07.
Golden Panda’s largest account contained exactly $6 million, prosecutors said. Another account contained more than $3.007 million. A third account contained more than $2.282 million. A fourth account contained more than $1.642 million. Golden Panda’s smallest account contained more than $1.112 million.
Unofficially, Golden Panda operated only eight days.
Other than to formalize official amounts seized from AdSurfDaily in the same case, the government has not sought an entry of default and litigation continues. Prosecutors seek more than $65.8 million seized from ASD President Andy Bowdoin.
Prosecutors, however, included a footnote in this afternoon’s Golden Panda filing that said it intended to oppose any attempts for nonparties to intervene in the ASD case.
“Some former participants of the ASD operation have sought to challenge the government’s forfeiture case against ASD funds,” prosecutors said. “These would-be interveners maintain that some of ASD’s funds belong to members who were exercising ‘a constitutional right to contract with ASD’ for the wealth ASD promised to them — regardless of the source of the payments.”
Bowdoin has conceded that ASD was operating illegally at the time of the forfeiture. Prosecutors said last month he signed a proffer letter in the case.
Golden Panda Seizure Numbers
Prosecutors certified these Golden Panda seizure amounts:
(1) $2,282,999.72 seized from account #[deleted by this Blog] at Bank of America, in the
name of Clarence Busby Jr. and Dawn Stowers, DBA Golden Panda Ad Builder Deposit Account;
(2) $1,112,978.42 seized from account #[deleted by this Blog] at Bank of America, in the name of Clarence Busby Jr. and Dawn Stowers, DBA Golden Panda Ad Builder Operating Account;
(3) $1,642,039.08 seized from account #[deleted by this Blog] at Bank of America, in the name of Clarence Busby Jr. and Dawn Stowers, DBA Golden Panda Ad Builder Cashout Account;
(4) $6,000,000.00 seized from account #[deleted by this Blog] at Bank of America, in the name of Golden Panda Ad Builder;
(5) $3,007,580.85 seized from account #[deleted by this Blog] at Bank of America, in the name of Golden Panda Ad Builder.
AdSurfDaily President Andy Bowdoin still hasn’t responded to a Jan. 15 racketeering lawsuit filed against him by three ASD members seeking class-action certification.
Meanwhile, Bank of America, a non-RICO defendant accused in the complaint of aiding Bowdoin and others in a fraudulent scheme, has added two additional attorneys who specialize in complex financial litigation to its legal team.
At the same time, Steven Berk, an attorney for the plaintiffs, has notified U.S. District Court for the District of Columbia that he has left the law firm of Chavez & Gertler and has started his own firm, Berk Law LLC of Washington, D.C.
Berk filed papers yesterday to ask the court to delay the due date until May 26 for the plaintiffs’ response to a motion to dismiss Golden Panda Ad Builder President Clarence Busby as a defendant in the case. The response had been due May 11, but Busby’s attorneys have agreed to a 15-day delay.
Like Bowdoin and ASD attorney Robert Garner, Busby was named a RICO defendant, amid allegations he engaged in racketeering with Bowdoin, Garner and unnamed others. Bowdoin is the sole named RICO defendant who hasn’t responded to the complaint.
Although he is an attorney, Garner filed a pro se pleading asking to have until May 22 to respond to the complaint. It is unclear if he intends to continue to represent himself or if he’ll retain counsel.
Busby, through his attorneys, said he should be dismissed from the RICO case because he already has settled a separate case filed by the government in August 2008.
Why Bowdoin hasn’t responded to the RICO complaint, which was filed in January and amended April 27, is unclear. He filed at least four pro se motions in the government forfeiture case in February and March and authored a special statement to ASD members released through the pro-ASD Surf’s Up forum that said other filings he planned “should really get” the attention of prosecutors.
Prosecutors, however, said Bowdoin had signed a proffer letter in the case and had acknowledged to law enforcement that ASD had been operating illegally. Proffer letters sometimes mean that the one who proffers is trying to minimize exposure while providing information that may help in the prosecution of others.
Bowdoin’s pro se litany began at the same time the AdViewGlobal (AVG) autosurf introduced members to Pro Advocate Group, a company that says it can help people practice law without a license. Pro Advocate Group is associated with Karl Dahlstrom, who was sentenced to 78 months in federal prison in the 1990s for securities fraud.
Securities fraud is one of the allegations cited in the government’s August forfeiture complaint against assets tied to ASD and Golden Panda. Both Bowdoin and Busby have had previous run-ins with securities regulators. In separate cases in the 1990s, Bowdoin was almost jailed in Alabama, and Busby was ordered in Georgia not to break securities laws after the SEC alleged he had pushed three fraudulent prime-bank schemes.
AVG has family and promoters’ ties to ASD. Bowdoin’s stepson, George Harris, is listed as an AVG trustee. The government filed a second forfeiture complaint against assets tied to ASD in December, implicating Harris and his mother — Edna Faye Bowdoin, Andy Bowdoin’s wife — in the ASD scheme.
Also in March, Andy Bowdoin appeared in a video for an upstart surf firm known as PaperlessAccess, which he positioned as a company that could help ASD members earn back funds seized by the government in August.
Bowdoin’s PaperlessAccess video went missing after only a few days, and Surf’s Up reported he had been misled by the company. While all this was happening, AVGÂ announced the sudden resignation of Gary Talbert, its chief executive officer and a former ASD executive.
Talbert’s March 20 resignation was followed three days later by an AVG announcement that its bank account had been suspended. Earlier this week, AVG announced that it had struck a deal that would enable customers to wire money for advertising purchases to an offshore bank, but a company AVG identified as the beneficiary of the funds — KINGZ Capital Management Corp. — issued a denial that it had any business relationship with AVG.
Michael P. Krywenky, president and chief executive officer of KINGZ, said the company was “very shocked” and “appalled” by the claims, noting that attorneys for KINGZ were monitoring the situation.
Krywenky said KINGZ believed a scam of some sort was under way at AVG.
AVG yesterday ignored Krywenky’s denial, instead issuing a statement that advised members it was looking at other wire “options” and expected to announce “additional funding solutions within the next 2 weeks.”
Late last month, the plaintiffs in the RICO case alleged that ASD had hired the “majority” of the staff of Bank of America’s branch in Quincy, Fla., as ASD employees, paying the Bank of America employees more than other ASD employees doing the same work.
One of the plaintiffs’ arguments was that Bank of America knew its employees also were working for ASD and should have detected that the company was up to no good.
Bowdoin promised ASD members in March that he would have a conference call to update members. The call never occurred, and Bowdoin has not explained why he has not responded to the RICO complaint.
“But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition. For the love of money is the root of all evil.” — From 1 Timothy 6:9-10
He was hailed a Christian “genius,” and AdSurfDaily President Andy Bowdoin often invoked God during his sales pitches.
“We need to have an attitude of gratitude with God,” Bowdoin told an ASD gathering in Las Vegas last year. “And I always say, ‘Thank you, God, for developing me into a money magnet.’ And I see myself as a money magnet in attracting money and, I say, attracting large sums of money.”
Many of his admirers portrayed him as the forward-thinking inventor of a miraculous business system for “good Christian people.” To prosecutors who had seen it all before, however, he was neither a genius nor an inventor.
Bowdoin, they said, was nothing more than a felonious imitator who had modeled his business on at least one multimillion-dollar Ponzi scheme that had traded on dreams before regulators reduced it to ruins.
AdSurfDaily almost wasn’t called AdSurfDaily. “Initially,” prosecutors said, “Mr. Bowdoin had intended to operate” under a different name.
It is little known, but on Aug. 24, 2006, Andy Bowdoin registered that name with the state of Florida. It used two of the three words that comprised the title of the infamous 12DailyPro autosurf Ponzi scheme — and, as it turned out, one of two words that comprised the title of the infamous PhoenixSurf autosurf Ponzi scheme.
The highly imitative name Bowdoin selected for his venture was “DailyProSurf,” according to records in Florida.
In a widely publicized case, 12DailyPro had been accused just six months earlier by the Securities and Exchange Commission of operating a $50 million Ponzi scheme from Charlotte, N.C. The allegations against 12DailyPro were brought on Feb. 20, 2006.
Two days later — on Feb. 22, 2006 — PhoenixSurf launched from the Atlanta suburb of Marietta, Ga. The surf collected more than $41.9 million before flaming out three months later, in May 2006. In 2007, it became the subject of yet another SEC Ponzi scheme investigation.
During its brief run, PhoenixSurf averaged nearly $14 million a month in revenue. Like 12DailyPro, PhoenixSurf purported to be an “advertising” service and was charged with the sale of unregistered securities as investment contracts.
SEC Introduces World To The Autosurf Ponzi . . .
The SEC’s prosecution of 12DailyPro in 2006 made headlines. The context of the case was alarming, and the numbers were jaw-dropping. A woman operating out of an apartment in North Carolina had managed to disguise a securities business as an advertising service, collecting more than $50 million on the Internet in only eight months’ time while allegedly siphoning $1.9 million into her own bank account and paying old customers with money received from new members.
The SEC announced the 12DailyPro prosecution on Feb. 27, 2006, issuing a news release on the SEC website and providing a copy of the complaint. Perhaps like no Internet fraud case before it, the 12DailyPro case demonstrated it was possible for hucksters to deploy technology to collect staggering sums quickly and convert all or part of the proceeds to their own use.
12DailyPro and PhoenixSurf took in a combined amount of at least $91.9 million in only months of operation, prosecutors said. Bowdoin’s ASD, at its peak, collected tens of millions of dollars weekly. Federal agents conducted a raid in August 2008 and found at least $93.5 million. After a slow start, ASD had surpassed both 12DailyPro and PhoenixSurf as a cash machine.
What new ASD members by the thousands didn’t know, prosecutors said, was that they were paying for abuses Bowdoin had built into the system and for liabilities he had accrued when at least one previous iteration of the surf had gone bust.
To explain slow or absent ASD payouts during the many dark days before ASD took off, Bowdoin at one point told some members that $1 million had been stolen from ASD by “Russian” hackers, but he never filed a police report, prosecutors said.
Naturally the claim led to questions about whether hackers actually had stolen the money — or whether it had been stolen by somebody else.
Bowdoin deliberately set up his program so ASD insiders effectively could steal from the company and pass along the cost of the thefts to the latest crop of recruits, prosecutors said in December.
DailyProSurf Domain Appears Online During Height Of 12DailyPro Craze, Then Vanishes Mysteriously
It is unclear if Bowdoin ever registered a website in the name of DailyProSurf, operated a forerunner to ASD under that name or benefited from from an operation that used the DailyProSurf name.
What is clear is that someone registered .com and .net sites in the DailyProSurf name — and that DailyProSurf references continue to appear alongside references to 12DailyPro in search results even to this day. It also is clear that DailyProSurf graphics were ordered and delivered by a company that catered to surf sites — including autosurf script sales — and autosurf promoters pushed traffic to the sites in early 2006, during the height of the 12DailyPro craze and while PhoenixSurf was just getting off the ground.
The presence of DailySurfPro raises an intriguing question: Did ASD have a predecessor site?
The DailyProSurf domain name was operational — and affiliates were pushing the site — at least eights months before Bowdoin registered the DailyProSurf name with the Florida Department of State.
Bowdoin registered the DailyProSurf name in Florida in August 2006. But references to DailyProSurf.com from as early as January 2006 appear online. References later in 2006 include a report about members not getting paid and a theory the surf was a “scam” that had ceased operations and gone offline. One web service captured a screen shot of a “suspension” notice from the hosting company for DailyProSurf.com. Both the .com and .net domain names now appear to be available for repurchase.
It also is known that both DailyProSurf and ASD used the same format to create affiliate links — the domain name, followed by a slash and then followed by code in this format: ?ref=[affiliate ID number]
In early 2006, the affiliate ID numbers for DailyProSurf were low numbers such as 30 and 75, which means the program was just getting started, likely using the same script that powered other autosurf sites. (Type dailyprosurf.com/?ref= into Google to see some of the search results. You’ll also see 12DailyPro affiliate links using the same format in the search results.)
Within a month of Bowdoin’s October 2006 launch of AdSurfDaily –Â just two months after Bowdoin had registered the DailyProSurf name in Florida — members complained about not getting paid by ASD. ASD provided a number of excuses, according to members, telling participants that script problems were at fault.
By February 2007, ASD was coming apart at the seams. Bowdoin announced the formation of a new corporation that would be known as “AdSalesDaily” — as opposed to “AdSurfDaily” — and he offered “stock” in the company to buyers willing to pay the minimum price of $10,000, according to participants.
A similar pitch had almost landed Bowdoin in prison in Alabama in the 1990s; investigators attributed 89 separate instances of fraud to Bowdoin, including an assertion that he had used money from new investors to pay off older ones, the central element of a Ponzi scheme.
Feeling the heat from early ASD members in February and March 2007, Bowdoin sought to keep them at bay. Bowdoin ventured from Florida to Atlanta to speak with unnamed “leaders” and work on solutions, he told members.
The solution he ultimately arrived at, prosecutors said, was to relaunch the surf under the name of ASD Cash Generator, port old accounts to the new surf — and not tell new members that they were paying for liabilities racked up by the original ASD.
The Beginning Of The End
During the months of February and March 2007 — a full year before ASD began to rake in the kind of money 12DailyPro and PhoenixSurf had raked in — Bowdoin made a catastrophic mistake that ultimately would come back to haunt him and lead to ASD’s undoing: He started donating money to the National Republican Congressional Committee (NRCC), even as ASD members were complaining about not getting paid.
In 2008, a false story pushed by ASD members that Bowdoin had received a special award from the White House for a lifetime of business achievement began to circulate online, prosecutors said. What members pushing the story did not know — because Bowdoin did not tell them — was that the award was for NRCC campaign contributions, not business achievement, and that there was a paper trail to prove it.
It is a virtual certainty that Bowdoin’s NRCC contributions came from the proceeds of a Ponzi scheme.
Because of his political donations and business filings, Bowdoin’s name and address appeared in both federal and state databases accessible to any person with an Internet connection.
The paper trail led to the campaign donations — and it also led to what prosecutors called a fraudulent address: 13 S. Calhoun St., Quincy, Fla. It was the address Bowdoin had used for AdSurfDaily, AdSalesDaily and DailyProSurf in public filings. Crucially, however, it was not the actual address of the former flower shop owned by Bowdoin’s wife that went on to become Bowdoin’s headquarters for various businesses, including ASD.
Older filings in the Florida Department of State database listed the address of the building as 11 S. Calhoun, but newer filings in the Florida database and the Federal Election Commission database listed the address as 13 S. Calhoun.
ASD also used the 13 S. Calhoun address on its website.
“[T]he address listed on ASD’s webpage is not a valid mailing address,” prosecutors said. “The address 13 S. Calhoun Street, Quincy, Florida does not exist. A building located at 11 S. Calhoun Street is a now defunct flower shop that used to be run by Bowdoin’s wife. It appears that Bowdoin or one of his associates merely posted the number 13 on another door attached to the same building.
“ASD has been receiving mail there.” (Emphasis added).
Bowdoin, a man who registered a hybrid surf that borrowed from the names of two infamous Ponzi schemes that had raked in nearly $100 million practically overnight, found himself in a trap of his own making because of the allegations he had fabricated a mailing address.
ASD told members it was impossible to operate because the government seized its money and its computers, but prosecutors returned the computers at ASD’s request and did not object to a hearing the company requested to have some of its money unfrozen. ASD lost the hearing because it could not demonstrate it was operating legally. Its clear route out of the Ponzi thicket was to produce an audited balance sheet that demonstrated solvency. ASD did not do so.
Why did ASD not restart after its computers were returned if it truly was an “advertising” business? One of the reasons is that it knew its audience would flee unless it was getting paid to surf, prosecutors said.
But there could be another reason that is equally revealing.
Because Bowdoin allegedly had used a bogus address to set up ASD, had publicized the address on the ASD website and had received mail at the address, any further business activity from the former flower shop involving mail could be construed as additional evidence of mail fraud.
If prosecutors are correct that 13 S. Calhoun was a bogus address, count after count of mail fraud could have piled up had Bowdoin reopened ASD and continued to use the address. Changing the address could have been construed as an acknowledgment that mail fraud had occurred earlier.
Although ASD owned another building in Quincy outright after having paid $800,000 cash for it, prosecutors said the building had been acquired with the proceeds of a crime. Moving wasn’t a good option because it could not undo the damage that had been done by using the 13 S. Calhoun mailing address.
Federal Election Commission (FEC) records show that Bowdoin, using the name “AdSalesDaily” and the address of 13. S. Calhoun, made the first of his political donations on Feb. 27, 2007, even as ASD members were clamoring for their cash. His first donation was for $250. He matched it in March 2007, with another $250 donation. In 2008, using the name “AdSurfDaily” and the address of 13 S. Calhoun, Bowdoin donated $5,000 to the NRCC.
Missing Dreams Now, ‘See Those Checks’ Then
As was the case with 12DailyPro, many ASD dreams have gone missing.
Although the DailyProSurf domain name also went missing, the public filing Bowdoin made in Florida using the 13 S. Calhoun address did not. And neither did records pertaining to his campaign donations in the names of “AdSalesDaily” and “AdSurfDaily,” both of which also used the 13 S. Calhoun address.
Andy Bowdoin, indeed, demonstrated a remarkable capacity to attract money.
“Thank you, God, for destining me to great wealth,” he exhorted the Las Vegas crowd to internalize and recite during the day.
And he exhorted members to picture themselves wealthy.
“See a big check coming in from AdSurfDaily,” he urged. “I signed a check the other day, about $22,000. See those checks like that coming for you constantly, just flowing to you.”
On Feb. 27, ASD President Andy Bowdoin — acting as his own attorney — filed a motion to rescind a decision he made in January to submit to the forfeiture of tens of millions of dollars and real estate seized by the government in a wire fraud, money-laundering and Ponzi scheme investigation.
Federal prosecutors, on April 24, filed a memorandum asking U.S. District Judge Judge Rosemary Collyer to deny Bowdoin’s motion to rescind the forfeiture. Prosecutors argued that the law wasn’t on Bowdoin’s side, and advised the court that Bowdoin had acknowledged the government’s material allegations all were true and that Bowdoin had signed a proffer letter.
Bowdoin, according to prosecutors, had:
“confirmed to law enforcement officials that he modeled his enterprise on another’s failed fraud schemeâ€
“acknowledged that there was almost no revenue independent from what he secured from the ‘members’â€
“confirmed that the revenue figures of the enterprise were managed to make it appear to prospective members that the enterprise called Ad Surf Daily was a consistently profitable, and brilliant, passive income opportunityâ€
Charles A. Murray, whom Bowdoin retained as paid counsel in April after Bowdoin earlier had filed one pro se motion after another, now has asked Collyer to let Bowdoin withdraw his self-filed motion to rescind his decision to submit to the forfeiture “without prejudice.”
Murray advised the court that, as Bowdoin and ASD’s new paid corporate counsel, he intended to “resubmit this Motion to Rescind on or before May 15, 2009″Â — only with a lawyer’s touch, not the amateur legal prose of a pro se litigant.
“Good cause exists for permitting Mr. Bowdoin et al, Claimants’ to withdraw the pro se
pleading and refile it upon consultation with counsel,” Murray argued.
“Unrepresented at the time Mr. Bowdoin, et al, Claimants’ filed the original motion, Mr.
Bowdoin et al, Claimants’ were not aware of the legal standards applicable to the motion and, so, did not present all facts germane to decision.”
In a March 13 letter to ASD members published at the Pro-ASD Surf’s Up forum, Bowdoin chided prosecutors by saying his pro se filings “should really get their attention.
“Watch for the filings,” Bowdoin instructed. “I will be speaking out on a conference call as soon as the filings are completed. We will notify you of the call. I look forward to talking to you then.”
Bowdoin, however, never filed another pro se motion (the last one was filed March 9, four days before Bowdoin had turned to Surf’s Up to reinvigorate support and taunt prosecutors).
And Bowdoin never conducted the promised conference call.
Even before news of Bowdoin’s pro se filings broke on March 4, Surf’s Up had been hinting something special might be coming. Bowdoin’s pro se move coincided with an announcement by the AdViewGlobal (AVG) autosurf, which has close ties to ASD, that it was moving underground and forming a private association.
AVG introduced members to a company known as Pro Advocate Group, which says it can help people practice law without a license. Bowdoin’s three initial pro se filings were signed and dated by him Feb. 25, one day before AVG introduced Pro Advocate Group. Bowdoin’s filings did not become a matter of public record until March 4.
Best-laid plans?
It is possible that an order from Collyer that Bowdoin didn’t anticipate short-circuited his pro se litigation plan. On March 26, the judge ordered Bowdoin’s previous paid counsel to inform Bowdoin that corporate entities that had filed claims in the ASD case — AdSurfDaily Inc. and Bowdoin/Harris Enterprise Inc. — could not proceed pro se. Collyer also ordered the lawyers to request permission to withdraw from the case if that was their intent.
Akerman Senterfitt, Bowdoin’s previous paid counsel, complied with the judge’s order and was granted leave to withdraw from the case.
Probe Still Under Way
The ASD case continues to be an active investigation. It is possible that investigators viewed Bowdoin’s March 13 Surf’s Up letter and that prosecutors made a veiled reference to it in their April 24 memorandum to Collyer asking her not to permit Bowdoin to change his mind about submitting to the forfeiture.
“Mr. Bowdoin says that after discussing this case with his supporters, and concluding that
they were smarter than his attorneys, he has changed his mind,” prosecutors said.
Are they referring to these words in Bowdoin’s Surf’s Up letter?
“About a month ago, several members introduced me to a group that studied what my attorneys did,” Bowdoin said in the letter. “The group said that my attorneys had taken the wrong approach. The group was very confident that they could help because the government had broken so many laws and had violated our rights as citizens of the United States.”
Nowhere in any of Bowdoin’s four self-filed pleadings does he discuss his rationale for becoming a pro se litigant after conferring with supporters. His only public statements on the matter have been made on Surf’s Up.
A New Clash?
Murray’s filing on Bowdoin’s behalf potentially sets up a new clash with prosecutors, who now have yet another document to address. At the same time, pro se motions filed by other litigants in the case have appeared on the record in recent days, and may require additional responses from prosecutors.
If Murray persuades Collyer to grant Murray’s motion to withdraw Bowdoin’s rescission motion and Murray files a new motion to rescind, it would mean that:
Bowdoin had submitted to the forfeiture on the advice of previous paid counsel.
Changed his mind more than a month later as a pro se litigant and tried to undo his forfeiture decision with a self-filed rescission motion.
Changed his mind again about his rescission motion under the advice of new paid counsel.
Withdrew his motion to rescind his forfeiture decision, only to have it reinstated on his behalf by a professional attorney.
On Jan. 13, Bowdoin asked the court to permit him to submit to the forfeiture. Collyer granted Bowdoin’s request Jan. 22, a hurdle that began to open a door for prosecutors to begin the slow process of liquidating ASD assets to provide refunds to customers.
Now, approaching four months later — and with pro se pleadings dominating the docket — prosecutors have not been able even to begin the liquidation process or implement a refund program.
UPDATED 12:43 P.M. EDT (May 7, U.S.A.) As often is the case in the tin-eared autosurf world, the timing was impeccable: On the day the Obama administration announced a crackdown on U.S. corporations and citizens who use offshore tax havens to hide income, autosurf company AdViewGlobal (AVG) announced it had a deal with an offshore bank to accept member deposits for the purchase of “advertising.”
U.S. regulators say autosurf companies sell securities but call themselves “advertising” companies to avoid scrutiny by agencies such as the SEC. In recent months, autosurfs have been highlighting purported “offshore” locations, and some promoters say the surfs can hide members’ income from the IRS and “shelter” them from the SEC, the FTC and state attorneys general.
“I’m asking Congress to pass some commonsense measures,” Obama said at 11:37 a.m. (EDT) yesterday. “One of these measures would let the IRS know how much income Americans are generating in overseas accounts by requiring overseas banks to provide 1099s for their American clients, just like Americans have to do for their bank accounts here in this country. If financial institutions won’t cooperate with us, we will assume that they are sheltering money in tax havens, and act accordingly.”
At 5:54 p.m. yesterday, a member of an AVG forum operated by some of the Mods and members of the Pro-AdSurfDaily Surf’s Up forum announced that AVG members now could wire money from the United States to The Bank of N. T. Butterfield and Son Ltd.
Butterfield has locations in Bermuda, the Bahamas, Barbados and the Cayman Islands, among other places.
Obama specifically referenced the Cayman Islands in his remarks announcing the crackdown.
“On the campaign, I used to talk about the outrage of a building in the Cayman Islands that had over 12,000 businesses — businesses claim this building as their headquarters,” Obama said. “And I’ve said before, either this is the largest building in the world or the largest tax scam in the world.”
Under a headline titled “BREAKING NEWS Fund your Advertising,” AVG members were told this (italics added):
“AV GLOBAL ASSOCIATION is pleased to announce
“Beginning Tuesday May 5, you will be able to purchase more advertising.
“There will be a form that you can access to arrange for your purchase.
“Specific information will be required in order to process your payment.
“You will need to provide your Name; A Number; email address used for your AVGA Account; phone number; and address.
“Wire transfers: These instruments usually clear within two business days. Although there are fees charged by your bank and our bank also assesses fees (usually our bank will charge $15) your account is credited immediately upon receipt and your advertising program begins immediately. Your purchase will be adjusted by the fees.
Review:
All funds must be accompanied by the correct identifying information:
* Name
* AVGA id number
* email address
*mailing address
*and phone number
Without this information your money will be returned to you through the originating bank.
Remember: The form will appear on the Website by Tuesday before midnight. If there is a change, you will be notified.
Please print the form and complete it so that your bank [h]as all of the pertinent information.
Transfer information:
The Bank of N. T. Butterfield and Son, LTD.
Via
J. P. Morgan Chase Bank
Bldg. F. Floor 8
4 Chase Metrotech Center
New York, NY,
USA, 11245
Swift # [Deleted by this Blog]
Account # [Deleted by this Blog]
Beneficiary: KINGZ Capital Management Corporation
Account # [Deleted by this Blog]
Reference: YOUR NAME & YOUR I.D.# & YOUR EMAIL ADDRESS
UPDATE:Â KINGZ Capital Management Corp. has issued a strong denial of AVG’s claims.Michael P. Krywenky, president and chief executive officer of KINGZ, said on May 7 that the firm had no business tie to AVG and had launched an investigation into the claims.
“KINGZ Capital Management Corporation nor any of its affiliates have any relationship with AdViewGlobal,†Krywenky said. “Also, I have already confirmed with our bank in Barbados that we are NOT accepting any funds from anyone at, or any clients of, AdViewGlobal.â€
AVG has close ties to AdSurfDaily (ASD), whose assets were seized in August after a joint investigation by the U.S. Secret Service and the IRS was opened in July. Federal prosecutors said ASD was engaging in wire fraud and money-laundering while selling unregistered securities and operating a Ponzi scheme from Florida.
Prosecutors alleged that ASD President Andy Bowdoin, who was arrested on felony securities charges in Alabama in the 1990s and pleaded guilty, claimed falsely that he had received a special award last year for business acumen from President Bush.
Now AVG appears to be courting trouble from the new occupant of the White House — after the Secret Service specifically refuted Bowdoin’s Bush claims.
George Harris, an AVG trustee, is the stepson of ASD’s Bowdoin. A Tallahassee home and a car owned by Harris and his wife were seized in December, after prosecutors filed a second forfeiture complaint against assets tied to ASD. The complaint alleged massive internal fraud at ASD, citing a litany of personal purchases made with corporate funds and a claim that $1 million had been stolen from the firm by “Russian” hackers.
No police report was filed.
AVG purports to be headquartered in Uruguay. Its servers resolve to Panama. Gary Talbert, AVG’s chief executive officer and a former ASD executive, resigned suddenly on March 20
On March 23, AVG announced that its bank account had been suspended, blaming the suspension on members who sent too many wire transactions in excess of $9,500. No AVG executive or employee signed the suspension announcement. It was signed “The AVG Management Team.â€
Problems with an Arizona-based, money-service business known as eWalletPlus followed. Servers for eWalletPlus now resolve to Panama, and the company claims now to be headquartered in Uruguay.
AVG, which had been promoting a 200-percent, matching bonus offer — an offer that caused one promoter to exclaim that $5,000 turned into $15,000 “instantly!” — said it was working to rectify its banking problem.
Its solution was announced yesterday: Wiring money to an offshore bank.
Promoters made AVG’s purported offshore location a big selling point since its inception a few months after the seizure of ASD’s assets.
It is the story that won’t go away, driven as much by the personalities and people who support AdSurfDaily as it is by the legal issues that put the company in the national spotlight.
On Aug. 1, 2008, an ambiguous note appeared on ASD’s website. The note suggested a government investigation was under way. In the weeks and months that followed, the story grew increasingly bizarre. ASD President Andy Bowdoin likened the seizure of funds tied to his company to the 9/11 terrorist attacks, saying the government’s actions were the work of “Satan.”
Curtis Richmond, an ASD member, pro se litigant and member of a sham Utah “Indian” tribe that once held an organizational meeting in an Arby’s restaurant and listed a meeting room attached to a doughnut shop as the address of its purported “Supreme Court,” eventually entered the fray.
There were signs at the very beginning that the ASD case would not be ordinary. Here are some snippets from our earliest reports:
ASD Cash Generator Under Scrutiny By U.S. Attorney
Aug. 2, 2008
So far the ASDCashGenerator website hasn’t gone dark, but the lights definitely are flickering . . .
At the moment the page loads with this message:
“Friday, August 1st 2008 afternoon update:
“Upon direction from the U.S. Attorney’s Office in the District of Columbia, ASD will not be able to move funds into company accounts, or out of them. We will work to resolve this problem, and return to normal operation, as soon as we are permitted to do so.
“ASD Management.”
. . . As always is the case, sustainability is the issue. Can a company that promises a return for viewing advertisements generate enough revenue to sustain payouts? Will it have to dip into revenues from new members to pay older members, thus setting up the classic Ponzi situation?
Assertions appear online that Andy Bowdoin was accorded a presidential honor known as “The Medal Of Distinction” and has been feted by President Bush and Vice President Cheney.
Bowdoin And ASD Cash Generator Investigation Still Not Clarified; Information Sketchy Across Web As ASD Members Show Signs Of Viral Nervousness
Aug 3, 2008
ASD Cash Generator (ASD) still had an ambiguous note on its website as of late morning (EDT) in the United States, Sunday, Aug. 3, 2008. Andy Bowdoin’s ASD support page and page outlining ASD as a legal business still were redirecting to a message suggesting that the U.S. Attorney in Washington, D.C., now was involved in ASD’s business affairs.
Today marks the third day a message that suggests an ASD investigation is under way has appeared at the Andy Bowdoin site.
Elsewhere across the web discussion about ASD Cash Generator was taking place in forum after forum, and on Blog after Blog. ASD members continue to cling to hope that the U.S. Attorney is going to give ASD Cash Generator a clean bill of health, something members appear to view as a potential new endorsement.
In essence, some ASD members are arguing that a government investigation of ASD is a good thing. Should ASD pass muster with agents from the U.S. Attorney’s office in the District of Columbia, so the thinking goes, it can only mean good things for the company.
It’s unsettling to read these sorts of posts. One person even posted a link to an audio, claiming it was proof that all is well at ASD and that the alleged U.S. Attorney investigation is just a bump in the road. The poster talked about how negativity about any company could be found online — true enough.
The ASD audio is not proof of anything. It’s a third-party report that consists of vagaries. A speaker in the audio even made the claim that “one of the negatives of the Internet is just freedom of speech, and people can go on there and say what they want.”
Freedom of speech a negative? Hardly. The speaker at once was condemning freedom of speech and then taking advantage of his right to speak freely. It’s just another in a long line of tortured defenses of ASD Cash Generator. Some ASD members appear to want to sue anybody who dares offer an opinion contrary to their own, yet another reason why it’s a good thing that ASD is under scrutiny.
Responsible commentary on ASD is exactly what the public needs to make informed decisions. There are reports online that ASD is taking in millions of dollars and that people are writing cashier’s checks for thousands and thousands of dollars and directing money toward the program. The public has a vested interest in the outcome.
Investigation Mystery At ASD Cash Generator Remains
Aug 4, 2008
Today marks the fourth day a message that suggests federal investigators are looking into the business practices of ASD Cash Generator is posted on the ASD website.
Meanwhile, ASD members continue to wait for information to flow into the ASD information vacuum. The message on the ASD site is ambiguous, meaning it can be interpreted in multiple ways . . .
Web commentary on ASD Cash Generator continues to be active. Some of the commentary is rational and cautionary in nature. Some of it, however, is irrational. Politics and religion have entered the discussion in some places. This creates the impression that some ASD members are blind followers. It’s a nasty business problem to have because it undermines credibility.
One ASD member thought it prudent to post an ASD Affiliate link in a third-party news story about ASD. The member also posted a link to another autosurfing opportunity in the same news story. It’s being sold as ambassadorship of the opportunities, as though all news accounts and opinion pieces on ASD that are contrary to ASD sales materials are inherently fatally flawed.
Yesterday I noted that some ASD members were condemning free speech and freedom of the press, while reserving for themselves the same rights they’d deny others. If a writer suggests that people should be very cautious when considering ASD Cash Generator, some ASD members are quick to jump in with threats of ASD lawsuits and threats of litigation.
One ASD member told me yesterday that I should be writing about Social Security. The thinking was that Social Security is a Ponzi scheme and that anybody who writes about ASD is giving the government a pass at the expense of continued negative publicity for ASD . . .
It’s impossible to imagine that some people actually believe the best way to make their “value case” for ASD is to pick fights with people who buy ink by the barrel. There are threats of multimillion dollar lawsuits and rumors of multimillion dollar lawsuits. Meanwhile, the ASD Cash Generator website continues to beam the ambiguous message suggesting a federal investigation is under way.
Hey, companies are entitled to have cheerleaders. When the cheerleading takes on a cult-like appearance, however, the public should ask some very tough questions.
Right now some ASD devotees are making the Andy Bowdoin company look very bad indeed.
Autosurfing Programs: Why The Feds And Investigators Have An Interest, And Why The Public Does, Too
Aug. 4, 2008
People seem very willing to throw money at autosurfs. The appeal is a high return on investment with minimal responsibility and virtually no work. Buy advertising credits, view ads by others, and get paid.
Life is not that simple. Business is not that simple. It’s easy for well-intentioned people to believe that it is — at least at first. The lure of easy money is as old as commerce itself.
Spend a few minutes peeling back layers of the autosurf onion if you’re contemplating joining one. Federal investigators, regulatory agencies and state attorneys general have an interest in monitoring the autosurf business. So does the public at large.
People have “invested” millions of dollars in autosurf companies. Some of them have taken on a cult-like following. People are fascinated by the idea of “earning” money by viewing ads. Some people “invest” their life savings in autosurfs . . .
At what price to individuals, families and society as a whole?
The mere fact the technology to create an autosurf advertising program is readily available should be of great concern to law-enforcement agencies and regulatory authorities such as the SEC and FTC.
Some people view autosurfs as a license to print money. News about a new autosurf program can help the program go viral. It’s easy to imagine teams of MLMers, for example, spreading the word about new autosurf programs to downline members. And it’s easy to imagine those downline members spreading the autosurf news to even more people.
It is possible for millions of dollars to pour into an autosurf site. The SEC cautions against autosurfs. Accounts aren’t insured or protected. Beyond that, however, there are very good reasons for the government to investigate and monitor autosurfing. What if the autosurf “opportunity” is offshore and exists as a means of escaping taxation? Want to be part of that?
And there is a “worst-case scenario,” too. Criminals and terrorists do exist in this world. They pay close attention to the U.S. culture and have access to technology that can be used in ruinous ways.
Think it hasn’t occurred to people who are criminally or terroristically inclined that they could use autosurfs to fund enterprises that would bring harm to a great number of people? . . .
But this theory doesn’t address the core problem with autosurfing: the classic Ponzi set-up. New money is being used to pay old members, a shell game. People are very susceptible to the argument that autosurfing is nothing more than a new advertising model and is in no way connected to the sale of securities.
Prodigious, unfettered income streams are needed to make an autosurf “work” mathematically, if a percentage of revenue is returned to members in the form of a “rebate.” Some autosurfs advertise returns that are unsustainable on the face of the promise. Secondary revenue streams can’t be mythological or exist only in theory.
Phrases such as “We’re working to create revenue streams,” for example, is one of the possible signposts for failure.
Plenty of laws of math — as well of laws of the land — apply to insurance companies and investment companies. They have to demonstrate through public filings that they are able to absorb losses and continue as ongoing concerns.
Many autosurf opportunities are do different than an insurance company that would advertise hurricane protection and not have the means actually to protect customers in the event a hurricane actually flattened their homes.
There are good reasons for the government to scrutinize autosurfs and monitor them with the same sort of zealousness directed at insurance and securities firms. The public interest is huge.
ASD Cash, Golden Panda Investigations Enter 5th Day
Aug. 5, 2008
. . . All is not well in the autosurf business. Some members of ASD even are trying to quash forum and Blog discussions by threatening lawsuits. They’re making themselves look silly, like members of a cult. It’s understandable that some people are trying to find a silver lining in all of this, but many of the ruminations are just clutching at straws.
No U.S. Attorney or member of an investigative agency is going to appear at a lectern and give any autosurf program that pays a rebate or dividend a clean bill of health. To do so would be to endorse a business model that has the capacity to do great harm.
Even if a program owner’s motives are entirely pure, it is inconceivable that the government is going to endorse the paid-to-surf model — tacitly or explicitly. Advertising is a cost center, not a profit center. The argument that autosurfs are the equivalent of Google Adwords or newspaper classified ads is a loser. One of the problems with autosurfs is that the “opportunity” is more valuable than the advertising itself.
Here you have a captive audience, one that wasn’t lured by the chance to see exciting new products scroll across the page, but by the opportunity to become part of the members’ pool and earn payouts over and above the actual cost of advertising.
Golden Panda Ad Builder yesterday was urging members to send in reports that they actually bought some products as a result of viewing the ads. This, presumably, will become fodder to show to investigators to demonstrate once and for all that the products themselves are the attraction and not the rebate opportunity.
It is an argument that seems destined to fall on deaf ears — in other words, clutching at straws.
Florida TV Station Reports Agents Executing Search Warrant At ASD Cash Generator In Quincy; Details Unclear
Aug. 5, 2008
WCTV is reporting that agents are executing a search warrant at ASD Cash Generator headquarters in Quincy, Florida.
Details are sketchy. WCTV serves Tallahassee, Thomasville and Valdosta., and is a CBS affiliate.
UPDATED 5:28 P.M. EDT (U.S.A.) Attorneys for three plaintiffs who accused ASD President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby of racketeering have asked a federal judge for more time to prepare.
The plaintiffs were joined in the motion by Bank of America, a non-RICO defendant in the case.
If the motion is granted, it would extend the time for responses between the plaintiffs and Bank of America until July 30 — two days short of the one-year anniversary federal prosecutors informed ASD that assets tied to ASD and Golden Panda were being seized.
The forfeiture case was brought by the government in August. The RICO case was brought in civil court Jan. 15 as a separate case by three members of ASD. Bowdoin, Garner and Busby are accused of racketeering in the RICO case. Bank of America is accused of aiding and abetting a fraudulent scheme.
Citing court records in their joint motion, the plaintiffs and Bank of America said the bank moved to dismiss the plaintiffs’ initial complaint on March 20. But the plaintiffs filed an amended complaint April 27, “thereby mooting Bank of America’s motion to dismiss the initial complaint.”
Under a new proposed timeline, Bank of America would have until June 10 to move to dismiss or otherwise respond to the plaintiffs’ amended complaint. The plaintiffs, meanwhile, would have until July 10 to file an opposition to a motion to dismiss, and Bank of America would have until July 30 to file a reply in support of a motion to dismiss.
ASD President Andy Bowdoin is the only named defendant not to have responded to the lawsuit.
UPDATE 3:04 P.M. Attorneys for Golden Panda Ad Builder President Clarence Busby have filed a supplement to their motion to dismiss the case against Busby. The supplement advised the court that the motion to dismiss applies to both the Jan. 15 initial complaint and the April 27 amended complaint filed by the plaintiffs.
“The amended complaint contains no substantive change in the substance of claims against Rev. Busby as would warrant either the withdrawal of Rev. Busby’s motion to dismiss or amendment thereto,” Busby’s lawyers said.
“Counsel to Rev. Busby received the amended complaint on April 29, 2009, one day after submitting Rev. Busby’s motion to dismiss the original complaint,” the lawyers said. “The amended complaint contains substantively the same content as the original complaint as that content pertains to Rev. Busby; the amended complaint’s substantive modifications pertain to Defendant Bank of America, N.A.
“In their amended complaint, Plaintiffs have pled facts with greater specificity concerning Defendant Bank of America’s relationship and involvement with Defendant AdSurfDaily,” the lawyers said. “The factual allegations against Rev. Busby, however, are unaltered from Plaintiffs’ original complaint.
“Under the original and amended complaints, the Plaintiffs’ claims against Rev. Busby are barred by the doctrine of res judicata; the plaintiffs lack standing to sue Rev. Busby; the plaintiffs have failed to plead facts sufficient to state a prima facie case that Rev. Busby owed a fiduciary duty; and the plaintiffs have failed to plead facts sufficient to state a prima facie case that Rev. Busby has violated the civil RICO statute. ”
“Accordingly,” Busby’s lawyers said, “under both complaints, the plaintiffs have failed to state a claim upon which relief can be granted and the amended, as the original, complaint should be dismissed.”
UPDATE 5:28 P.M. Judge Rosemary Collyer has granted the joint motion by the plaintiffs and Bank of America for more time.
MINUTE ORDER granting . . . Bank of America’s unopposed Motion for Extension of Time. Bank of America shall answer or otherwise respond to the Amended Complaint . . . no later than June 10, 2009. If Bank of America files a motion to dismiss or for summary judgment, Plaintiffs shall respond no later than July 10, 2009; and Bank of America shall reply no later than July 30, 2009. Signed by Judge Rosemary M. Collyer on 5/1/09.
A racketeering lawsuit against ASD President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby makes a veiled reference to what autosurf participants refer to as the “80-20” rule.
The reference signals that both private litigants and the government are wise to methods autosurf promoters use to stem the outflow of cash and maintain the deception to encourage new money to flow into the system. Under the so-called 80-20 plans, participants remove 20 percent in cash and let 80 percent ride in the surf.
Another unstated advantage the “80-20” plans bring autosurfs is to keep cash-out amounts below daily electronic-transfer limitations imposed by banks and payment processors. By discouraging cash-outs, the surf firms can hide the limitations from participants, meaning their inability to honor all cash-out requests also is hidden.
Members of AdViewGlobal, a surf firm with close ties to ASD, have formed an “80-20 Club.” But the veiled reference in the RICO lawsuit, which was brought by ASD members, signals that such promotions ultimately may drag autosurf promoters in general into future racketeering litigation, with downline members hiring attorneys to file class-action lawsuits against both the surfs and upline sponsors under RICO statutes.
“The RICO Defendants induce members to leave earned rebates in ASD as a cash balance by claiming that by doing so, members will significantly increase earnings,” the plaintiffs in the ASD RICO case said.
“In this way, the RICO Defendants encourage members to continue to contribute to ASD’s scheme,” the plaintiffs said. “Furthermore, members do not learn that ASD cannot live up to its promises until members attempt to cash out. Members may watch their ASD accounts grow by delaying cash out, but the only real growth is of ASD’s pyramid.”
ASD employed another deception — calling the amount in a member’s account a “cash balance” — to keep money in the system, the plaintiffs said.
By referring to the amount as a “cash balance,” ASD “falsely represents that the account balance has the liquidity of cash.”
Lawyers for three plaintiffs who accuse AdSurfDaily President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby of racketeering have filed an amended complaint that accuses Bank of America of turning a blind eye to a Ponzi scheme.
Bank of America is not named a RICO defendant in the amended complaint filed today — as was the case with the original complaint filed in January. Rather, the bank is accused of aiding and abetting a fraudulent scheme — and the plaintiffs say that, rather than reporting unusual banking activities to authorities, Bank of America employees in Quincy, Fla., went to work for ASD while still holding down their jobs at the bank.
“As the inflow of money increased rapidly after [ASD] rallies [in U.S. cities], Bank of America employees from the Quincy, Florida branch began paid work for ASD at the ASD office in Quincy, Florida,” the plaintiffs charged.
On March 20, Bank of America said it had done nothing wrong and asked for the original complaint to be dismissed.
Tens of millions of dollars connected to ASD, Golden Panda and LaFuenteDinero were seized by the U.S. Secret Service in August, amid allegations of wire fraud, money-laundering, selling unregistered securities and operating a Ponzi scheme.
“Banks are not guarantors of their customers’ conduct,†BOA argued in its motion to dismiss. The bank further argued that the complaint was vague and speculative, lacking in facts to such a degree that U.S. District Judge Rosemary Collyer of the District of Columbia must dismiss BOA as a defendant.
Today’s filing by the plaintiffs included allegations not listed in the original complaint, including the allegations that Bank of America employees had taken second jobs with ASD and that a “majority” of the employees of the bank’s Quincy branch also worked for ASD.
“Among other things, these employees assisted ASD in processing incoming funds, including funds acquired through Visa transactions,” the plaintiffs said. “Bank of America management knew that its employees also worked as ASD employees. To say the least, this involvement of Bank of America employees in the day-to-day operations of ASD provided Bank of America with additional knowledge of the RICO Defendants’ financial transactions.”
The bank helped “increase the scope” of damage done by ASD’s racketeering scheme by not seeing things for what they were, the plaintiffs charged.
One of ASD’s employees also employed by Bank of America was the branch manager in Quincy, the plaintiffs said. They further asserted that a Bank of America vice president of business banking from Tallahassee visited ASD’s headquarters and reported nothing unusual.
Bank of America workers who took second jobs at ASD were paid higher wages than other ASD employees performing the same work, the plaintiffs said.
Attorneys for plaintiffs Mike Collins, Frank Greene and Nature’s Discount Inc. — all former ASD members — said the bank helped ASD carry out the scheme. The lawsuit was brought as a prospective class-action. Bank of America and Garner have responded to the lawsuit, which was brought in January. Bowdoin and Busby have not.
ASD was having trouble processing payouts because of a $2 million daily limit on electronic transactions imposed by Bank of America, the plaintiffs said.
“Bank of America subsequently modified the RICO Defendants’ accounts to provide ASD with the opportunity for a higher capacity of electronic transactions,” the plaintiffs said. “The Quincy, Florida branch office of Bank of America initiated this upgrade in the RICO Defendant’s account or accounts, and Bank of America management outside of the Quincy, Florida branch validated the upgrade after conducting an in-person investigation [that] included a visit by a Vice President to ASD’s offices.”
The bank failed to spot problems at ASD, even with bank employees working for ASD, the plaintiffs said.
Among other things, according to the plaintiffs, Bank of America failed to:
Recognize the illegitimacy of ASD.
Stop the RICO defendants from using the bank’s products and services in furtherance of illicit purposes.
Halt the bank’s atypical involvement in the scheme.
Two other banks in Quincy refused to maintain back accounts for the RICO defendants, the plaintiffs said.
“Bank of America did not,” the plaintiffs said, alleging that the bank had “teamed up with the RICO Defendants to perpetrate this fraud.”
About $53 million remained in Bank of America accounts linked to the RICO defendants when the U.S. Secret Service seized the funds in August, the plaintiffs said — “and hundreds of millions of dollars had been dissipated.”
UPDATED 5:44 P.M. EDT (U.S.A.) A Mod at an AdViewGlobal forum set up by Mods and members of AdSurfDaily has warned AVG members not to refer to their purchases as “investments.”
Rather, the Mod said, AVG members purchase “advertising” and are not “investing” or “investors.”
Posts that used the terminology of investments would be deleted, the Mod warned.
AVG members currently are stressing a so-called “80-20” strategy as a means of keeping the program viable for the long-term.
Analysts, however, point out that the “80-20” plans — taking out 20 percent in cash and letting 80 percent ride with the companies — are just another way to keep cash within ready reach of autosurf Ponzi schemes to sustain the deception.
There is not a single, documented case in the history of autosurf prosecutions in which the use of the word “advertising” to describe what the government views as an “investment” program involving the sale of unregistered securities has succeeded as a means of fending off a prosecution.
In other words, the government has made it plain that you can’t avoid prosecution by using other terminology to describe an investment program.
Regardless, many surf companies continue to insist that the use of the word “advertising” as a replacment for “investing” somehow insulates surfs from prosecution.
Prosecutors cited the wink-nod nature of autosurfs — including bids to avoid the word “investment” — in the August forfeiture complaint against ASD.
The complaint details an instance in which an ASD member insisted to an undercover agent from an IRS/Secret Service task force that bad things could happen if people joined ASD and started calling it an investment.
“The [undercover agent] asked her about investing with ASD,” prosecutors said of the ASD member. “She immediately said, ‘Don’t call it investing, you know what I mean, we can get in trouble if we say that, we have to be careful.’”
Prosecutors also made a veiled reference to “80-20” pitches in the August ASD complaint, again citing an undercover agent’s contact with an ASD member.
“He said the best way to make money in the system is to keep putting your money back into the system as it accumulates,” prosecutors said of the ASD member’s pitch to the undercover agent.
Some of the Mods and members of the Pro-ASD Surf’s Up forum set up the AVG forum after ASD gave the Surf’s Up forum its official endorsement after a federal judge ruled in November that ASD had not demonstrated it was a legal business and not a Ponzi scheme.
Prelaunch buzz for AVG started shortly thereafter. On December 19, prosecutors filed a second forfeiture complaint against assets tied to ASD. The complaint did not mention AVG by name, but it outlined allegations against George Harris, the stepson of ASD President Andy Bowdoin.
Harris is a trustee for the AVG association. AVG’s former chief executive officer — Gary Talbert — is a former ASD executive. On March 20, AVG announced Talbert’s resignation in an unsigned note to members. On March 23, AVG announced its bank account had been suspended.
On April 24, prosecutors announced that Bowdoin — on an unrevealed date — had signed a proffer letter and acknowledged to law enforcement officials that the material allegations against ASD all were true.
Proffer letters sometimes are used when prosecutors believe the one who proffers can aid law enforcement in an investigation.
Prior to submitting to the forfeiture of tens of millions of dollars in January, AdSurfDaily President Andy Bowdoin signed a proffer letter and told investigators that the government’s material allegations all were true, federal prosecutors said late this afternoon.
The explosive revelation came in the form of a memorandum filed in response to a pro se motion by Bowdoin to rescind his decision to submit to the forfeiture.
“In fact, when Mr. Bowdoin, through his counsel, filed his January 2009 “Motion to Withdraw Claims,†seeking to dismiss the August 2008 claims that provided his statutory standing, he had already admitted to law enforcement agents that the material allegations that the government made in its forfeiture complaint in this case were all true,” prosecutors said.
“Mr. Bowdoin signed a ‘proffer letter’ that informed him that his proffered statements would not be used against him in the government’s case-in-chief in any criminal prosecution of him — other than a prosecution for perjury, giving a false statement, or obstruction of justice,” prosecutors said.
“But the letter also explained that Mr. Bowdoin’s proffered statements could be used for other purposes,” they continued. “Mr. Bowdoin and the government never agreed that Mr. Bowdoin’s proffered statements were off the table in this civil case — which explains why, after consulting with his attorneys, Mr. Bowdoin decided, in January, to withdraw his claims.”
Bowdoin asserted in his motion to rescind that “[t]he procedures used to search and seize [the] property in the forfeiture were nonexistentâ€; (2) the claimants “were greatly influenced by legal counsel that was ineffectiveâ€; (3) the claimants were illegally intimidated, threatened and coerced by government agents and attorneys concerning potential prosecutions and sanctions against themâ€; (4) the claimants acted under severe duress and true feeling of protestâ€; (5) “government agents used fraud, trickery and deceit to . . . convince the claimants that the withdrawal and release of claims was their only optionâ€; (6) “government agents and prosecutors acted in bad faith in deciding to use a civil investigation and forfeiture to gain information and evidence for a criminal indictment and conviction†and (7) “government agents and prosecutors have willfully and intentionally used an illegal forfeiture to destroy the business enterprise that has affected thousands of innocent purchasers with de minimus or non-existent harm to the public to punish the claimants,†prosecutors said.
Judge Rosemary Collyer should deny the rescission motion, prosecutors said.
“Mr. Bowdoin offers no facts to support any of his accusations. Indeed, his accusations are inconsistent with the record. He offers no valid basis for this Court to permit relief from a final order, that he, through his counsel, requested, dismissing him from this proceeding.”
At the same time, prosecutors said, Bowdoin appears to have arrived at his conclusions after consulting with nonexperts.
“Mr. Bowdoin says that after discussing this case with his supporters, and concluding that they were smarter than his attorneys, he has changed his mind. But, ‘buyer’s remorse’ is not a basis for establishing that a mistake occurred when the Court issued the order to dismiss the August 2008 claims,” prosecutors said. “Mr. Bowdoin offers no facts to support that any mistake ever occurred.
“Nor does ‘I changed my mind’ provide a basis under the catch-all provision in Rule
60(b)(6) to relieve a party from his free and conscious choice regarding the conduct of litigation,” prosecutors said.
The record of the case undermines Bowdoin’s assertions, prosecutors said.
“Mr. Bowdoin also alleges that he was ‘illegally intimidated, threatened and coerced by
government agents and attorneys concerning potential prosecutions and sanctions against them,’” prosecutors said.
“But that protest is belied by his other statements in the record here. When this case was
scheduled for a post-seizure hearing, at the request of the attorneys who Mr. Bowdoin retained in August 2008 to represent him in this civil forfeiture matter, those attorneys told this Court that Mr. Bowdoin would not be testifying at the hearing they had requested. Mr. Bowdoin’s attorneys explained that, if called to testify, Mr. Bowdoin would assert his right under the fifth amendment to the Constitution not to incriminate himself.”
“In other words,” prosecutors continued, “his own attorneys, presumably in consultation with Mr. Bowdoin, concluded that Mr. Bowdoin faced potential prosecution for his conduct and should not testify. Mr. Bowdoin, through his attorneys, did invoke the fifth amendment. Mr. Bowdoin’s apparent assertion now, that his agreement to withdraw from this case hinged on a threat from the government that he was facing criminal culpability, is plainly dishonest. The multiple attorneys Mr. Bowdoin has fired presumably explained precisely as much to him. Nor can Mr. Bowdoin credibly assert that his decision to
withdraw was tied to a prosecutor ever having misinformed his counsel.
“Ultimately, whether Mr. Bowdoin’s awareness that he might face prosecution for criminal conduct came directly from his conversations with his own attorneys, or from conversations he had with some others, is irrelevant,” prosecutors said.
Justice is being delayed for ASD’s many victims because of Bowdoin’s senseless pleadings, prosecutors said.
Bowdoin claims the government “used an illegal forfeiture to destroy the business enterprise that has affected thousands of innocent purchasers with de minimus or nonexistent harm to the public to punish the claimants,†prosecutors said.
“The government agrees that the enterprise ‘affected thousands of innocent’ people and it agrees that the enterprise caused ‘harm to the public,’” they continued. “Mr. Bowdoin complains about his lawyers and the government’s lawyers — but he does not maintain that the enterprise that affected thousands of innocent people was lawful. As he well knows, the evidence his attorneys produced demonstrated that fallacy of his supposed novel business.
“Mr. Bowdoin secured funds from the public by promising to them safe, profitable
returns,” prosecutors said. “To keep his fraud scheme afloat, Mr. Bowdoin paid apparent ‘profits’ to early entrants into the scheme, and to friends, family and employees. Mr. Bowdoin confirmed to law enforcement officials that he modeled his enterprise on another’s failed fraud scheme, and he acknowledged that there was almost no revenue independent from what he secured from the ‘members.’
“No witness ASD produced at the emergency hearing disagreed,” prosecutors said. “No ASD official or representative testified that the enterprise secured revenue independent of what it derived from members to support the payments that were promised to the public and paid out to some participants.
“Mr. Bowdoin also confirmed that the revenue figures of the enterprise were managed to make it appear to prospective members that the enterprise called Ad Surf Daily was a consistently profitable, and brilliant, passive income opportunity. Mr. Bowdoin knew that his conduct was indefensible when he withdrew his claims in January. Nothing material has changed, and nothing Mr. Bowdoin offers in his ‘Notice of Rescission, etc.’ begins to support the relief he seeks.”
