In this frame from a cash-gifting video dated May 3, 2008, then-AdSurfDaily pitchman Hank Needham opens an envelope from a cash-gifing scheme — and five $100 bills purportedly from "George" spill out. The date on the video coincides with a period of time in which Needham's image appeared in an ad for ASD. Needham later would emerge as a Club Asteria principal and purported owner of the "program," which suspended cashouts earlier this year and caught the attention of regulators in Italy.
Is anybody at home at Club Asteria and the purported Asteria Philanthropic Foundation? And where, precisely, is home?
The Club Asteria Blog on a .US domain has not been updated since Oct. 15. In the recent past, the Blog had been updated approximately every three (or so) days, according to the date notations on the site. Updates were posted on Oct. 15, Oct. 12, Oct. 9, Oct. 6, Oct. 3, Sept. 30, Sept. 27, Sept. 24, Sept. 21, Sept. 16.
Fifteen full days have passed since the most recent update.
Separately, the Club Asteria “News” page on its .com domain has not been updated since Sept. 12, a period that encompasses more than a month and a half.
Although the American Red Cross sent the Asteria Philanthropic Foundation a cease-and-desist letter six days ago amid concerns of brand leeching, Club Asteria continues to publish the Red Cross logo and name in its October house organ. The firm uses the publication, an emagazine, for recruiting.
It is common for fraud schemes to plant the seed they are affiliated with a legitimate entity.
Meanwhile, the Asteria Philanthropic Foundation, which also is known as the Asteria Foundation and uses street addresses in the United States and Hong Kong, also continues to publish the Red Cross name and logo on the foundation’s .org site.
Before suspending member cashouts earlier this year, Club Asteria issued payments via wire from a purported Hong Kong entity known as Asteria Holdings Limited, according to “I Got Paid” posts on infamous Ponzi scheme forums.
Last month, Club Asteria removed from its house organ an image and purported “interview” with actor Will Smith. A “JOIN NOW” button had been placed near the Smith-related content. In this month’s house organ, a “JOIN OUR MISSION” button was placed inside a quotation from Mahatma Gandhi, the slain Indian champion of freedom. Gandhi’s name was misspelled in the promo.
Virginia authorities said on Oct. 20 that Club Asteria was not registered as an issuer of securities in the state. They declined to say whether a Club Asteria probe was under way.
In May, CONSOB, the Italian securities regulator, banned promos for the firm in Italy.
In a video dated May 3, 2008 — prior to the apparent formation of Club Asteria and the Asteria Foundation but during a period of time in which Club Asteria principal Hank Needham’s image appeared in a promo for AdSurfDaily — Needham appeared in a video for cash gifting, the PP Blog has learned.
Needham is seen in the cash-gifting video opening an envelope from a courier service that contained a smaller envelope. The package purportedly was sent by “George.”
When Needham opened the smaller envelope, five $100 bills spilled out.
“Thank you, George, ” Needham said.
Needham then fanned the bills in front of the camera.
In August 2008, the U.S. Secret Service seized tens of millions of dollars in the ASD case, amid Ponzi allegations. It is known that some ASD members also were cash-gifting enthusiasts. After the ASD-related seizures, some ASD members sought to recruit others for cash-gifting, autosurf and HYIP schemes, claiming the schemes were excellent ways to make up for ASD losses while highlighting the purported “offshore” locations of some of the “programs.”
History was made yesterday. “Wink-nod” marketing deceptions — the use of disingenuous language supplemented by willful blindness in the cancerous autosurf and HYIP trades to create plausible deniability — were pronounced dead by a grand jury sitting in the District of Columbia.
Members of the insidious trade can thank ASD President Andy Bowdoin for the much-anticipated pronouncement.
The grand jury, which began meeting in May 2009 and returned an indictment against Bowdoin that was unsealed yesterday, repeatedly referred to Bowdoin’s alleged wink-nod wordplay and incongruous claims to hide his massive international Ponzi scheme.
Want to position yourself as a man of God from a stage in Las Vegas (or in any city or home office) and tell your audience that you are a “money magnet” — and then plant the seed that audience members can become “money magnets” just like you if they turn over their cash to you?
It’s time for autosurf purveyors to anticipate that a grand jury just might have something to say about it on a time and date uncertain. Bowdoin’s grand jury handed him back his “money-magnet” line repeatedly. Federal agents arrested Bowdoin yesterday in Florida. His booking and bail status still are unclear hours after his arrest. The government previously argued that Bowdoin was a flight risk who had moved money offshore and now says he faces up to 125 years in federal prison.
And what if you’re an autosurf aficionado and want to use wordplay to tell the troops that they’re not purchasing an investment in the form of an unregistered security — but instead are purchasing “advertising” in the form of “ad packages” (or a similar phrase) you’ve concocted to mask the nature of your “program?”
Well, the grand jury had an answer for that one, too: Charge the fraudster with felonies.
Want to tell the troops that your “program” has passed muster with the SEC and does not need to concern itself with registering when the claims are untrue? The grand jury had an answer for that one, too: Charge the fraudster with felonies.
Among the grand jury’s conclusions was that Bowdoin, who’d previously been charged twice with securities offenses and modeled ASD after the 12DailyPro securities, fraud and Ponzi scheme, was blowing smoke to tens of thousands of people at a time.
KABOOM! “Wink-nod” was blown to bits yesterday.
Want to create an incongruous condition in which people are standing in line for hours at “rallies” to purchase “ad packages” that pay “rebates” of up to 150 percent and an “instant bonus” on top of the “rebates” just for signing up?
The grand jury had an answer for that one, too: Charge the fraudster with felonies.
Want to counsel members on how they should refer to the “program” and what words to avoid when presenting the “program” to others? Want to be like Bowdoin and send an email that says, “[L]et’s don’t (sic) use the words investment and returns. Instead, lets (sic) use ad sales and surfing commissions. The Attorney Generals in the U.S. don’t like for us to use these words in our program?”
The grand jury had an answer for that one, too: Charge the fraudster with felonies.
KABOOM! “Wink-nod” was blown to bits yesterday.
Will autosurf forum life ever be the same? Not a chance, except among a core group of serial criminals. The grand jury signed off on a document that neatly exposes “wink-nod.” The next time a forum “expert” cautions posters not to call a surf program an investment, autosurf critics can point out that Bowdoin said the same thing — and that his words got him indicted.
At the very same Saturday “rally” in Las Vegas at which Bowdoin called himself a “money magnet” and encouraged others to become “money magnets” by giving him their cash, Bowdoin implored members not to miss a fabulous opportunity to hand him a virtually unlimited sum in the final hours before the company would enforce a $50,000 “cap” beginning on Monday, according to the grand jury.
Handing him any more than $50,000 beyond Monday might bring out the regulators, Bowdoin ventured, pointing out that “there are so many people that want to come in now and want to purchase two hundred thousand, three hundred thousand, half a million and a million dollars . . .”
The grand jury pointed out that Bowdoin, incongruously, was selling advertising to people who did not even own businesses to advertise in the ASD “rotator.”
After observing any number of incongruities associated with ASD and its use of wordplay to skirt securities laws, the grand jury had a message for the whole of the autosurf and HYIP worlds: Charge the fraudsters will felonies.
It was the beginning of the end for wink-nod promoters — and it occurred in no small measure due to the efforts of the U.S. Secret Service, an agency Bowdoin and his apologists compared to “Nazis” and “Satan” after telling a Las Vegas crowd to plunk down unlimited sums on Saturday because he was lowering the limit to $50,000 on Monday.
Bowdoin’s theory behind enforcing a cap was that $50,000 might be a low enough sum to keep ASD under the radar, according to the grand jury.
Only in the incongruous world of the autosurf could someone sell himself on the notion that limiting purchases to $50,000 on Monday somehow created a safety buffer for others who plunked down higher sums two days earlier. Only in the incongruous world of the autosurf could someone instruct members to “act fast” and plunk down more than $50,000 on Saturday because the safety buffer would be enforced two days later.
And wink-nod also began its race to the Internet graveyard in no small measure due to the efforts of William Cowden, now in private practice — but once a federal prosecutor and the chief of the Asset Forfeiture Division in the U.S. Attorney’s Office in the District of Columbia.
Cowden was the man some ASD members loved to hate. They called him “Gomer Pyle” on the pro-ASD Surf’s Up forum. They called him a “goon.” They called him “Crowden.” They called him “Cow-dung.” They called for a “militia” to storm Washington. They said Cowden should be placed in a torture rack. They “prayed” for God to strike Cowden and other federal prosecutors dead.
And then they called themselves Christians.
In the months that followed, the Secret Service, Cowden and others at the Justice Department set the stage for the complicated nature of autosurfs and HYIPs to be both understood and rejected by a grand jury that assessed ASD’s wordplay and the sea of incongruities and decided that felonious self-indulgence needed to be dealt with by returning felony indictments and destroying wink-nod.
Indeed, history was made yesterday. It was the day “wink-nod” died, the day the music died for “money magnets” and autosurf scammers on stage and in home offices and online forums everywhere.
An undercover sting conducted by the FBI has resulted in fraud charges being filed against 20 individuals or companies. The sting was centered in southern Florida. Among those charged was Larry Wilcox, one of the stars of the long-running television program “CHiPs” in which Wilcox played the role of a California police officer, the SEC said.
Records suggest Wilcox agreed to become a government informant after becoming implicated in the probe.
Wilcox, 63, of West Hills, Calif., was among a group charged both civilly and criminally. The case was brought after the FBI conducted an undercover probe into penny-stock schemes.
“Securities fraud is an equal opportunity crime — it runs the gamut from very large to very small publicly traded companies,” said U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida.
Ferrer noted that “even microcap companies are plagued by fraudsters who seek to manipulate the stock market to line their own pockets.”
Separately, the SEC said the sting was conducted “in such a way that no investors suffered harm” — an announcement that could send shockwaves across the fraud universe because it demonstrates that investigators are infiltrating schemes and relying on informants to unmask the schemers.
Wilcox, for example, believed he was doing business with a “corrupt trustee,” according to court filings. Records suggest that Wilcox entered a deal with the government in July in which he would cooperate in an ongoing probe.
“These corrupt promoters meticulously planned their schemes down to the last detail, except for the possibility that they were walking into an undercover operation,” said Robert Khuzami, director of the SEC’s Division of Enforcement. “This joint law enforcement effort is a stark warning to those who embark on securities fraud schemes that we may be listening and we may be watching.”
Whether the SEC and FBI were performing similar stings in the corrupt worlds of HYIPs, autosurfs and 2×2 matrix cyclers as promoted on Ponzi forums was not immediately clear. The Justice Department, however, has made it clear in court filings that it is infiltrating criminal forums and is using undercover operatives.
The U.S. Secret Service also has made it clear that it is using undercover operatives in its investigations of corrupt enterprises such as HYIPs, autosurfs and 2×2 matrix cyclers.
A year ago, members of AdViewGlobal and AdSurfDaily asked Sen. Patrick Leahy, chairmain of the Senate Judiciary Committee, to endorse Ponzi schemes and investigate the prosecutors in the ASD case. This year, members of the failed Gold Nugget Invest (GNI) HYIP are doing most of the early season cheerleading for reprehensible "programs," while sabotaging debate in the ranks and continuing to argue there is something noble about fraud schemes. Fifteen U.S. banks failed while GNI members were singing the praises of the HYIP in the opening days of 2010. GNI tanked earlier this month. Thirteen U.S. banks failed while AVG/ASD members were conducting a letter-writing campaign to Leahy in the opening days of 2009.
The new year is starting out like the year that just passed. Banks are failing, unemployment is high, money is not trickling down to small businesses that need capital to expand and create new jobs — and the Ponzi pimps are still putting lipstick on pigs, pushing autosurfs and HYIPs and cheerleading for them even when they fail.
Gold Nugget Invest (GNI) quickly has become this year’s equivalent of last year’s early season favorite, AdSurfDaily (ASD), among the apologists. As was the case a year ago with ASD, the GNI faithful and delusional members of the failed HYIP have emerged to lead the cheers, make the excuses, confuse the issues, sabotage legitimate discussions and set the stage for even more people to lose tremendous sums of money to practiced online schemers.
Web records suggest that at least 57 percent of funds directed at GNI originated in the United States, and there are claims that GNI had 11,000 members. GNI tanked earlier this month, directly on the heels of an HYIP known as “Cash Tanker,” which used images of Jesus Christ in its marketing materials.
Yes, even an HYIP that called itself Cash Tanker and used a revered figure as though he were just another hamburger salesman on TV was able to collect untold sums from investors by relying on HYIP cheerleaders to spread the gospel of robbing Peter to pay Paul.
First, a brief look at the banking environment.
Five U.S. banks failed Friday, bringing the year-to-date total to 15. That’s ahead of last year’s pace. Through Feb. 14, 2009, 13 U.S. banks had failed. Twenty-five failed in all of 2008, and only three failed in 2007.
By the time the banking bloodletting had ended in 2009, a total of 140 banks had failed. With 15 failures already this year, the United States is on pace to record 180 in 2010. The FDIC insurance fund fell into the red last year under the weight of the failures, and the agency is replenishing the fund by requiring banks to prepay fees for insurance.
A Year Ago
Most notable among the Ponzi pimps a year ago at this time were the promoters of ASD and its offshoot, the AdViewGlobal (AVG) autosurf. They hailed AVG as a cure for what ailed the U.S. economy, even though ASD had been implicated in a wire-fraud, money-laundering, securities fraud and Ponzi scheme that resulted in the federal seizure of tens of millions of dollars.
AdViewGlobal, which tanked in June 2009, formally launched a year ago this week. It was pushed by ASD members who positioned AVG as an “offshore” alternative.
Almost a year ago, the Pro-ASD Surf’s Up forum led a campaign to Sen. Patrick Leahy that sought the Senate’s endorsement of Ponzi schemes — it seems incredible, but it’s true — and also sought to have the Senate investigate the prosecutors and agents who were investigating the alleged ASD Ponzi scheme.
Incredibly, last year’s Surf’s Up campaign, which piggybacked off a campaign by ASD mainstay “Professor” Patrick Moriarty, came to the fore during a time in which 13 U.S. banks were failing in the opening days of the year; the Bernard Madoff Ponzi scheme ($65 billion) was still a fresh news item; the Tom Petters’ Ponzi scheme ($3.65 billion) was in the news; the alleged Allen Stanford Ponzi scheme ($8 billion) was in the news; the alleged Arthur Nadel Ponzi scheme ($350 million/$400 million) was in the news; the alleged Paul Greenwood/Stephen Walsh financial scheme ($553 million) was in the news; and the alleged Nicholas Cosmo Ponzi scheme ($370 million) was in the news. There were others, of course.
At the same time the events cited in the paragraph above were making fresh news, autosurfs and HYIPs also were falling like dominos and taking investors’ money with them. Notable among them were MegaLido, Noobing, Frogress, Daily Profit Pond, Premium Ads Club and Aggero Investment. All of them were pushed by promoters who also were pushing AVG (and had pushed ASD).
Some of the promoters simultaneously tried to sanitize the “industry” through the letter-writing campaign to Leahy, asserting, for example, that the schemes actually were legitimate opportunities and that the government did not understand the technology or the math behind the schemes.
Despite the headlines of spectacular Ponzi fraud in the mainstream press, despite the fact that it was impossible to miss news about Ponzi schemes unless you lived a life of blissful ignorance or had chosen to be willfully blind, despite the fact that sites such as Scam.com and WorldLawDirect and the PP Blog had published tons of information on autosurf and HYIP Ponzi schemes, despite the fact that the U.S. and other governments had published warnings about the frauds and had filed both civil and criminal cases against the fraudsters, despite the fact that no autosurf or HYIP ever has stood the test of time and survived, the schemers closed ranks and continued to shill and shill and shill and shill.
They’re still shilling a year later.
GNI Becomes The New ASD In Opening Days Of 2010
This year’s early season ASD is GNI. Instead of writing letters to Leahy, though, some of the apologists are saying that the HYIP critics and doubters in the GNI ranks should quit complaining and starting donating money to Haiti earthquake relief. As was the case with ASD, all of the cheerleading is occurring blindly. Not a shred of evidence has emerged that anything about GNI was real.
And instead of Madoff, Nadel, Cosmo, Stanford and the other Ponzi notables cited above being the preeminent contextual backdrop a year after the Surf’s Up campaign, figures such these have replaced them: alleged Ponzi schemers Trevor Cook and Christian radio host Pat Kiley ($190 million); proven Ponzi schemer Scott Rothstein ($1.2 billion); proven Ponzi schemer Milton Retana ($62 million/$3.2 million in cash found in back of religious bookstore); proven Ponzi schemer Gold Quest International (about $29 million; ruled a Ponzi and a pyramid scheme by Canadian authorities); proven Ponzi schemer and former Christian clergyman Brian David Anderson ($4 million, link to Flat Electronic Data Interchange (FEDI), whose operator, Abdul Tawala Ibn Ali Alishtari, also known as “Michael Mixon,†was convicted in September 2009 of financing terror and fleecing investors in the FEDI scheme); alleged Ponzi schemer Arthur Leroy Heffelfinger ($2.02 million, including alleged theft from woman in 90s with dementia): alleged Ponzi schemer Mariana Montes (at least $682,000 in combo Ponzi and fraud case, including alleged theft from 90-year-old widow); proven schemer John Anthony Miller ($15 million, tried to flee United States by using identity of deceased Catholic school classmate); proven schemer Bradley L. Ruderman ($25 million, mostly from family and friends); alleged schemer Edmundo Rubi (operated $24 million “Knights Express†Ponzi scheme earlier in decade, sentenced to prison, emerged from jail with new scheme targeting original customers); proven Ponzi schemer Marcia Sladich ($15 million, scheme targeted churchgoers); alleged Ponzi schemer Steve Salutric (at least $1.8 million, including more than $400,000 from 96-year-old widow with dementia).
There are others, of course, and the names constantly change. What hasn’t changed is that the autosurf and HYIP shills continue to shill and shill and shill, even as one bank after another is failing and one Ponzi schemer after another is making one headline after another.
We can’t think of anything that matches the level of disconnect or demonstrates the same level of greed and wanton criminality — not even Rothstein’s Bugatti and collection of other fine automobiles purchased with Ponzi proceeds.
Our new poll asks a simple question: Do Ponzi Schemes Pose A Threat To National Security? You may vote only one time. Until voting closes, the poll also will be in the sidebar to the right.
Feel free to argue your points in the Comments section of this post.
In the days after the government’s August seizure of tens of millions in the AdSurfDaily probe amid Ponzi allegations, opportunists stepped in to fill the void by offering cash-gifting schemes.
Today, months later, opportunists trading on Ponzi pain are using the names of autosurfs and autosurf-related keywords to drive traffic to cash-gifting websites.
The Better Business Bureau (BBB) says gifting programs and gifting clubs are flourishing on the Internet, taking advantage of families struggling to make ends meet in the poor economy.
BBB has issued a warning “that cash gifting is not a legitimate way to make a few extra dollars, and in fact, is nothing more than a pyramid scheme.”
How widespread is the problem? BBB reports there are 22,974 cash-gifting videos on YouTube. The videos have garnered an “astounding 59,192,963 views,” BBB adds, citing statistics from TubeMogul, an online video analytics company.
Cash-gifting purveyors are “targeting people with some form of an affinity — such as women’s clubs, community groups, church congregations, social clubs and special interest groups, BBB says.
“Bernie Madoff isn’t the only guy with a Ponzi scheme,” says Steve Cox, a BBB spokesman. “Money-making opportunities promising big returns for little work are all over the Internet and are extremely enticing to millions of people struggling with today’s economy.
Run like there’s no tomorrow, warns Cox.
“Anyone tempted by slick cash gifting marketing appeals should run in the opposite direction, or they run the risk of being the next person ripped off by a pyramid scheme,†he says.
BBB said cash-gifting promotions typically are vague, adding that a video performer “might even open a FedEx envelope with cash inside to prove the effectiveness of the program.”
Scammers often tout the programs as fundraisers for a worthy cause or as “empowerment” programs to help people help themselves. Prospects may be asked to pay anywhere from $150 to $5,000 to join.
Money then is funneled to people farther up the pyramid, and participants then recruit more people to join in order to start making money themselves.
Beware of assertions the programs are legal and sanctioned by the IRS, BBB cautions.
“Almost every state has laws prohibiting pyramid schemes and/or assesses penalties on those who participate, and the Federal Trade Commission and many state attorneys general have issued warnings about cash-gifting clubs, BBB says.
Here are some questions consumers should ask, according to BBB:
Do I have to make an “investment†or give money to obtain the right to recruit others into the program?
When I recruit another person into the program, will I receive what the law calls “consideration†(that usually means money) as a result?
Will the person I recruit have to make an “investment†or give money to obtain the right to recruit and receive “consideration†for getting other people to join?
If the answers are “yes,†BBB warns people to steer clear of the scheme.
“Don’t give in to tempting claims online and never buckle under to high-pressure sales pitches, even when they come from the mouth of a trusted friend, co-worker, neighbor or church member,” BBB advises.
