AdViewGlobal (AVG) has announced the suspension of cash-outs and a decision to make an 80/20 program mandatory. AVG members should ask the “management team” if there is any possibility that any of the following three things happened.
1.) Money paid to AdSurfDaily members by ASD ended up in the AVG system. (For example, a member got paid by ASD, and then later moved the money to AVG. Or, alternatively, an ASD member sold ad-packs directly to ASD downline members, deposited the money in his personal bank account, and later moved the money to AVG.)
2.) “Founders” and insiders of AVG used fictitious paper profits that once existed in ASD as their capital contribution to AVG.
3.) Founders/insiders of AVG took a disproportionate share of AVG’s early revenue and cashed out their fictitious ASD profits — in whole or in part — through AVG .
Here is why these questions are important:
1.) ASD’s visible cash and other assets were frozen by the U.S. government in a wire-fraud and money-laundering investigation, but other cash that once resided in ASD’s bank accounts had made its way into the bank accounts of ASD members. It also is known that some ASD members collected money directly from customers for the purchase of ad-packs, and then deposited the money in their personal bank accounts and used ASD’s internal system to move the ad-packs to the purchasers. Money from No. 1 (above) is money laundered twice, which means it is doubly dirty. If it was unclean when it resided in ASD, it is doubly unclean inside AVG.
2.) Money from No. 2 above doesn’t really exist, which means AVG created value where none existed and had non-founders/non-insiders fund the value — as ASD allegedly did with its ASD Cash Generator iteration.
Looking at it another way, AVG could have used the theoretical value of money now held by the government in the ASD case — and also the fictitious paper profits — to fund the launch of the company, passing the real cost off to non-insiders/non-founders.
3.) Money from No. 3 above would mean founders/insiders paid themselves disproportionate shares before anyone else got paid, thus plundering the company.
The autosurf landscape is littered with stories about plundering. To explain suspended cash-outs, ASD President Andy Bowdoin once claimed script problems were to blame. Meanwhile, Bowdoin claimed Russian “hackers” had stolen more than $1 million from the company.
Bowdoin never filed a police report — not even to report a purported theft in excess of $1 million, prosecutors said.
The reason one has to consider each of the possibilities above is that AVG suspended cash-outs after collecting money for 5+ months, then made 80/20 mandatory, while also changing the maturity dates for “page impressions” from 150 to 180 to 210 days.
As one of our readers pointed out, the situation AVG currently confronts is like the situation a bank would confront if it advertised CDs and couldn’t fund redemptions on their maturity dates.
Customers would buy the CDs, expecting a return in 150 days. On cash-out day, the bank would tell customers that it couldn’t fund the redemptions, hoped to be able to fund them by adding two months to the maturity date in anticipation of new revenue — but, in any case, when customers went to cash-out two months later, they could take only 20 percent of the money they were owed and were told they must keep 80 percent of their money in the system.
Financier Allen Stanford faced a similar problem with CDs earlier this year on the Caribbean island nation of Antigua, and has been indicted on Ponzi and fraud charges. Prosecutors said he created the mirage of value by employing a series of accounting tricks.
There is a fourth possibility to consider with AVG: Not all founders/insiders were created equally and that the people closest to the money cherry-picked some of it for themselves, and then told the other founders/insiders that AVG simply wasn’t generating enough revenue or that “bad members” had siphoned off cash.
Putting it in the context of the ASD case, did Russian “hackers” really steal more than $1 million — or was it simply more convenient to blame them to cover up theft and insider dealings?
Here is another possibility: No one at AVG stole anything, no one paid themselves early, the founders/insiders kept all their money in the company — and AVG simply flopped because it couldn’t generate enough cash.
A few things could be in play in this scenario. AVG, for example, could have relatively few customers willing to pay for its “advertising” services — and that the existing base of AVG’s “advertisers” willing to spend money is too small to support the weight of the liabilities or even a break-even line.
It also is possible that the banking system “caught” AVG early and choked off its access to wires and the money supply, thus starving the company.
UPDATED 4:40 P.M. EDT (U.S.A.) Before AdViewGlobal (AVG) even shared what it described as a members-only, “Breaking News” announcement that it was suspending cash-outs, the embattled surf firm threatened media outlets with copyright-infringement lawsuits if they published the announcement.
Members almost immediately shared the news outside the confines of the AVG “private association,” despite the firm’s bid to compartmentalize its announcement. Members said they had grown increasingly frustrated by AVG’s ham-handed efforts to operate in an environment of secrecy and the predisposition of some promoters to scold participants for asking questions about the company in public.
AVG informed members that cash-outs would be suspended for at least 30 days. An 80/20 program that further separates members from their money would be made mandatory. At the same time, AVG claimed it had solved payment-processing and banking problems that had dogged it for months.
The firm did not explain how it had solved the problems.
Recently, though, the firm entered into a partnership with a new company based in Canada. Members said AVG now was selling a debit card that could be used for “page impression” purchases through PayPal, whose Acceptable Use Policy expressly forbids the company’s services to be used for pyramid schemes and Ponzi schemes, two things associated with the business model AVG employs.
The debit card is offered through Texas-based Secure Cash Network Inc. (SCN), which says in its Terms of Service that the card cannot be used for the purchase of illegal products and services. Many jurisdictions consider the autosurf business model to be illegal, and the U.S. government has successfully prosecuted a number of surf firms in recent years.
AVG also said it was hiring “new management” within two weeks, but did not say whether it was firing old management — or even identify its current management team. Incongruously, the surf promised to identify its new management team, members of which may be stepping into a hornet’s nest. AVG engages in an industry frequently linked with wire fraud and money-laundering, and is closely associated with a firm under investigation for those crimes.
As is typical of AVG announcements, the company suggested members were responsible for the firm’s problems.
In this post, the PatrickPretty.com Blog listed the Top 5 reasons to avoid AVG, which purports to be a professional “advertising” and communications firm headquartered in Uruguay. There now is a sixth reason: The news AVG hoped to compartmentalize within its organizational walls — news that now is being talked about openly in forums — may be evidence of a crime in progress.
Could the AVG announcement become an important piece of evidence in an ongoing wire-fraud, money-laundering and Ponzi scheme investigation involving Florida-based AdSurfDaily Inc. (ASD) and unnamed others?
There is good reason to believe AVG is part of the ASD probe.
Two of AVG’s trustees — George Harris III and his wife, Judy Harris — are named in a federal forfeiture complaint as beneficiaries of illegal conduct by ASD. George Harris is the stepson of ASD President Andy Bowdoin. The Tallahassee home Harris shared with his wife — and an automobile registered to the couple — were named in the forfeiture complaint as the proceeds of a crime.
AVG trustees George Harris and Judy Harris are named in a federal forfeiture complaint as beneficiaries of illegal conduct by AdSurfDaily Inc., a surf firm with close ties to AVG.
Bowdoin is described in court filings as a target of a federal criminal investigation. AVG graphics once appeared on a website controlled by ASD, and AVG listed its street address as 13 S. Calhoun Street, Quincy, Fla., in the graphics. That is the same mailing address ASD listed, and federal prosecutors said it is bogus, which may signal ASD also is part of a mail-fraud investigation.
AdViewGlobal says Quincy is its home, but also says Uruguay is its home.
Moreover, prosecutors said in court filings that Bowdoin signed a proffer letter in the ASD case before firing his paid attorneys and proceeding as a pro se litigant. Bowdoin told ASD members that he decided to represent himself in court after consulting with a “group.”
His first pro se pleading was dated Feb. 25. The following day, AVG introduced members to Pro Advocate Group, which says it helps businesses form “private associations” and individuals practice specialties such as law and medicine without a license.
Karl Dahlstrom was accused of using investors' funds to purchase new vehicles and pitching the opportunity to church groups.
Pro Advocate Group is associated with Karl Dahlstrom, who was convicted in the 1990s of securities fraud and sentenced to 78 months in federal prison. Prosecutors said Dahlstrom bought automobiles with investors’ money, an assertion also made against Bowdoin and George and Judy Harris, the AVG trustees.
Dahlstrom also pitched his program to church members — yet another assertion made against Bowdoin.
Meanwhile, an AVG forum operated by some of the Mods and members of the Pro-AdSurfDaily Surf’s Up forum appears to have gone dark. It is unclear if content from the forum has been deleted.
** UPDATE 4:40 P.M., June 25: The website of a firm closely associated with AVG — eWalletPlus — also has gone dark. The site has been throwing a server error for at least 24 hours. eWalletPlus provided certain money services for AVG and once operated from the Phoenix area. As is the case with AVG’s servers, the servers for eWalletPlus now resolve to Panama.
EWalletPlus stopped accepting registrations from new members during the same spring time frame in which AVG announced its bank account had been suspended. ** END 4:40 P.M.UPDATE **
AVG launched after federal prosecutors seized tens of millions of dollars from Bowdoin, whom prosecutors said had a history of taking money from customers and moving it from one company to another when his enterprises encountered difficulties and could not pay members.
Like AVG, Bowdoin suspended member cash-outs and announced retrenchment plans, which fundamentally shifted the burden of paying participants from one group to another within the organization.
AVG appears to be doing the same thing, but appears also to still be collecting money from prospects who visit the firm’s main website. AVG’s retrenchment plan is not mentioned on its sales site, even though the site has a “Breaking News” banner. AVGÂ also does not inform prospects about the ties to ASD on its sales site.
New members may not learn about the retrenchment plan until after they join the organization.
Lack of disclosure is one of the allegations against ASD, which prosecutors said also engaged in the sale of unregistered securities.
AVG’s announcement of the retrenchment program raises new questions about whether the company is engaging in the sale of unregistered securities while operating an unregistered money-services business.
UPDATED 11:07 A.M. EDT (U.S.A.) AdViewGlobal (AVG) members have asked the company to produce a photograph of the company’s purported headquarters building in Uruguay. Meanwhile, members are complaining about slow payouts or no payouts from the autosurf and requesting photographs of the company’s management team.
At the same time, they are complaining about a lack of communication from the company, which purports to be headquartered in Uruguay but recently issued a news release with a dateline of Tallahassee, Fla.
As tensions build, AVG members say they are being left in the dark. And they question why queries do not get answered and why the surf’s payout rate is so “low.”
Although some promoters have suggested the company is conducting an internal “audit” to determine how much fraud occurred within the system because of misuse of a member-to-member cash button, the company itself provided the button.
How the company will determine what constitutes fraud is unclear. Some members acquired millions of page impressions by taking advantage of 200 percent — and even 250 percent — matching-bonus programs that ran virtually continuously for months.
In May, AVG announced a deal that permitted members to wire money to an offshore bank to acquire page impressions (ad-packs). Within days, however, one of the companies AVG identified as a facilitator of the wire transfers denied it had any business relationship with AVG and said it believed it had been targeted in a scam.
AVG withdrew the announcement after the company issued the denial, which raised the prospect that AVG had attempted to route money to itself by using the account of a separate company located in Florida.
A debit card that costs $30 — and permits people to pay AVG for “advertising” but not to withdraw “earnings” — also has led to questions. Members said the company was selling the debit card through PayPal, even though PayPal’s Acceptable Use Policy expressly forbids the company’s services to be used for pyramid schemes and Ponzi schemes.
The company that provides the debit card, Secure Cash Network Inc. (SCN), says in its Terms of Service that the card cannot be used for the purchase of illegal products and services. Many jurisdictions consider the autosurf business model to be illegal, and the U.S. government has successfully prosecuted a number of surf firms in recent years.
It is unclear if AVG has its own PayPal account or if a third-party account is being used to collect the money for the debit card, with the money somehow routed to AVG later. The utility of the debit card itself also is in question, since SCN says the card cannot be used to purchase illegal products or services.
More than 70 percent of AVG’s web traffic originates in the United States, according to one web service.
Many of you are familiar with “Pistol,” one of the posters here. In recent days, Pistol repeatedly sent us communications we deem harassing through our Comments form and our Contact form. When we didn’t submit to his hectoring, he published a video about us on YouTube.
The message, of course, is that if we don’t do as he says, he’ll dial up the harassment to extract the result he seeks.
Pistol has been banned at other sites for antisocial behavior. Some of it was mildly antisocial — steering threads off-topic in ways that squelched productive discussion and shifted attention to himself, for instance.
Some of it, however, was more than mildly antisocial — publishing videos that treated human beings like soulless, unfeeling objects incapable of redemption or even of having a teachable moment, for example.
Early on, we made a mistake by extending to Pistol the maximum benefit of the doubt that he would exercise some restraint and not disrupt things here. The early disruptions were somewhat minimal — Pistol occasionally promoted his videos by spamming in threads, for example.
Eventually, though, the disruptions grew in number, accompanied by an increase in toxicity. Despite his obvious intelligence, Pistol began to pose a daily maintenance problem for this Blog. If this were high school, he would be the brightest kid in the class, but also the most disruptive. Teachers would marvel out loud at his brain one moment, and want to march him to the principal’s office the next.
You knew that kid, right? He was the one who knew the difference between “innumeracy” and “illiteracy” and couldn’t wait for the teacher to confuse the terms so he could scold her for not being as smart as he — or to hold her out as a case study in hypocrisy for presuming even to be a teacher when she could not demonstrate perfect vocabulary at all times.
The problem with Pistol is that he licenses himself to walk into a house and, ultimately — sorry about this, readers — vomit all over the floor.
If you ask him politely to stop, he feigns obtuseness and then engages in sarcasm or passive-aggressive posturing, all the while insisting it’s all justifiable because he doesn’t suffer fools gladly. We recognized our own role in the insanity a few weeks ago, when we found ourselves asking this grown man not to vomit on our floor.
If you’re going around asking an adult not to vomit on your floor, well, you’re the problem. We were wrong to think we could finesse this. An adult who presumes the right to soil your floor needs to be dispatched to the curb, not to be coddled. We should have dispatched him weeks ago.
Pistol has a score to settle with us now — and now we have joined a long line of people he has pilloried on YouTube and elsewhere. Last week we deleted a few posts in which he was being deliberately obtuse, disruptive, disingenuous, baiting and just plain mean to other posters here.
As is his way, Pistol now wants the discussion to digress into a discussion over the meaning of the word “mean.” Other posters also are guilty of meanness, he suggests, and yet their meanness is tolerated so long as it is directed at, say, Pistol or autosurf promoters.
In other words, “Johnny did it! Why can’t I!” This from a man who purports to detest foolishness while using the playground arguments of a child. It’s Pistol’s way of letting us know we haven’t achieved perfection in moderating a Blog, rather like the teacher who confuses innumeracy and illiteracy.
A small number of our posters are less thoughtful in their responses to autosurf supporters than we’d prefer them to be. At the same time, some ASD and AVG posters are less thoughtful to autosurf critics than we’d prefer them to be. No matter what side of the issue these posters are on, however, they do not pose the maintenance challenge Pistol presents — and, of course, he knows this.
One of our posters — one Pistol has pilloried in video — used some choice language after being provoked by Pistol here — and Pistol responded by dialing up the provocation, essentially arguing that posters also must be etymologists.
Pistol, of course, understands the roots of language and the power of words, which is why he uses the handle “Pistol.”
We did not publish Pistol’s responses to the poster’s response to Pistol. Pistol started the problem, provided the fuel for it to escalate, and now asserts disingenuously that this Blog is engaging in censorship.
In other words, Pistol is a victim.
Two days ago it simply became too much work to deal with the maintenance problems Pistol creates. On one hand, Pistol purports not to suffer fools gladly. On the other, he subjects this Blog regularly to his own foolishness.
So, we adjusted our software settings to direct everything Pistol submits to a holding queue. Pistol responded by subjecting us to even more foolishness
We soon heard from “Pistol’sPal,” for example — more foolishness from a man who says he cannot suffer fools gladly.
Yesterday we were hit by this foolishness:
'Pistol' skewers PP on YouTube
Pistol wrote to us Saturday morning through our Contact form, presenting the URL for a YouTube video he had created to skewer us.
After Pistol used the Contact form, he submitted another post headlined “THE THIRD ATTEMPT.”
The strategy, if it can be called that, appeared to be to nuisance this Blog into publishing his comments. When that didn’t work, the strategy shifted to producing a YouTube video — basically, publish my comments or expect to see yourself pilloried on YouTube.
When that didn’t work, the strategy reverted back to haranguing: “THE THIRD ATTEMPT” means that two prior attempts to get a comment published failed: The message: Play my game or you might not like the consequences. It is, among other things, both extortive and foolish.
All this foolishness . . . from a poster who purports not to suffer fools gladly.
What Pistol seems unwilling to do is forgive any human foibles. Some of our posters, for example, are former ASD members who have “seen the light” and now post here and elsewhere to help people steer clear of scams. Pistol has pilloried some of them in videos.
Beyond that, though, Pistol regularly skewers them here, while at once insisting he opposes scams. He is attacking people who are trying to help, using flaws and imperfections he perceives to demean their worth as human beings.
The message: How can they now presume to be teachers — or to have any worth at all?
Other posters here never had anything to do with ASD or AVG, but work to educate and inform the public about scams. Pistol skewers them, too, dismissing or ignoring the value they add and focusing on what he perceives to be their imperfections as human beings.
Every appeal we’ve made to the greater angels of his nature has been met with hostility and obtuseness.
Ever wonder why there are relatively few Blogs and forums that cover autosurf scams? One of the reasons is that there is no money in it. Another is that you pay a price — from the scammers themselves, and from the Pistols of the world, who purport to detest scams while derailing the efforts of people who are trying to do something about them.
Here is the math:
In April, we paid a bill for $153.52 for our PACER subscription. In January our PACER bill was $62. There are other expenses associated with running this Blog, including the enormous investment in time. This story, for example, took two weeks to research and report, and we had to pay for certain documents. We reviewed hundreds of pages of records.
This Blog has generated $448.22 in total revenue year-to-date. May revenue was $70.70. Our “pay” is pennies per day — if that.
And now Pistol, who purports not to suffer fools gladly and to detest autosurf scams and scammers, has joined with them in spreading the lie that this Blog is lining its pockets with advertising fees.
With respect to Pistol and his participation on the PatrickPretty.com Blog, we gave him way too much latitude.
We apologize to readers for doing so.
This Blog is not written for people who agree with our point of view; it is written for the “CORRECTIONs” of the surf world, even though we know CORRECTION and other surf supporters never may agree with us.
But we also know we have made a difference in the lives of people once immersed in the convoluted world of the autosurf, and watching their thought processes evolve has provided joy.
UPDATED 11:04 A.M. EDT (U.S.A.) Plenty of AdViewGlobal (AVG) members are quick to criticize the U.S. government and the Federal Reserve for propping up sick companies.
Under pressure from “advertising” participants, however, the autosurf firm may be on the verge of implementing its own bailout plan for rank-and-file members who are sick of “low” payout rates.
The plan appears to feature accounting tricks and a redistribution scheme of the same ilk some AVG members accuse the government of foisting on the American people. If implemented, it may go down in history as the first example of Autosurfism, an economic theory that apparently holds wealth can be created by taking away vast holdings from some members so other members with smaller stakes can enjoy higher daily payout rates from the company’s advertising rotator.
AVG members say the company is considering a plan that would reduce the maximum number of “page impressions” (ad-packs) an individual member may hold to 250,000. Some members reportedly have more than 1 million page impressions on the books. Their holdings would be reduced to 250,000 by fiat, with the excess placed off the books in a nonearning state of suspended animation for at least 30 days.
After 30 days, members said, AVG would try to place the excess holdings back on the books. It is unclear how the system will be able to sustain the excess then if it cannot sustain it now.
One promoter, with hopeful words, said AVG expected to record multimillion-dollar sales soon by offering a suite of communications services. AVG announced the new services earlier this month, about five months after the surf launched.
Smoke And Mirrors?
Capping the page-impression ceiling at 250,000 may raise serious concerns about solvency, an issue frequently associated with the autosurf trade. Liabilities typically cannot be erased simply by pretending they don’t exist or by hiding them until it is more convenient to own them, anymore than assets can be created by divining them into the system. (See Enron.)
In the autosurf trade, liabilities accrue the instant a member completes a paid-to-surf session. If a surf has thousands of members, liabilities due each surfer accrue daily. A company is insolvent if its liabilities exceed its assets or if it cannot pay liabilities as they mature.
AVG members said the company was considering a scheme by which the maturation dates of liabilities would be pushed back to 210 days. The initial maturation date, members said, was 150 days. In other words, members who expected to receive back 100 percent of their advertising expenditure, plus profit for clicking on ads in AVG’s rotator, would have to wait two more months to get their payouts — while clicking every day during the two extra months to qualify for the maximum payout.
Members said AVG may place millions of page impressions in a state of suspended animation, something that could be construed as a bogus accounting practice. One of the principal accounting tricks of the autosurf trade is to pretend liabilities don’t exist by saying “rebates (payouts) aren’t guaranteed.” This infamous line is what permits autosurfs, in effect, to wipe away liabilities by fiat or to disguise liabilities by treating them as assets.
Despite the plan, which promoters are positioning as a means by which AVG can improve the daily payout rate from its current state of near 0 percent to 1 percent, members insisted AVG has a healthy balance sheet. AVG, however, does not publish audited and certified financials and largely operates in an environment of secrecy, saying it is a “private association” headquartered in Uruguay.
Promoters have said the Uruguay location was chosen to insulate the company from agencies such as the U.S. Securities and Exchange Commission.
Did The 200 Percent Promotions And AVG Cash Button Backfire? Members Complain About Manipulation And Abuse
AVG created conditions that enabled some members to acquire vast numbers of page impressions, in part through an almost nonstop series of 200-percent, matching-bonus promotions for prospects and sponsors. At the same time, the company provided a member-to-member cash button that reportedly was rife with abuse by promoters who “stacked” friends and family members within their organization to maximize daily earnings within individual downline groups.
The member-to-member cash button — coupled with the matching-bonus promotions — heightened concerns about wire fraud and money-laundering, but some members said their colleagues simply were taking advantage of a service AVG provided. Others disagreed, describing “stacking” as unethical.
Upon the launch of a new website earlier this month, AVG quickly did away with a whopping, 250-percent, matching-bonus program it had implemented to celebrate the website launch. Although the 250-percent program was advertised to last through June 29, AVG moved the expiration date back to June 5.
The surf removed the cash button after a member shared a strategy by which sponsors could gather payments directly from prospects, deposit them in the sponsors’ banks, send checks by overnight mail to processors in Canada and Panama or use the banks’ wire facilities to route the money to the offshore processors, and then cause the processors to wire the funds to AVG.
Under the strategy, sponsors would fund their own AVG accounts with prospects’ money, and then use the AVG system to transfer the money back to prospects’ accounts so they could quality for the 250-percent matching bonuses. The bonuses alone created astronomical liabilities.
Some members, though, described the convoluted, money-transfer process as all in a day’s work for helpful sponsors committed to the success of their downlines. Others called it wire fraud and money-laundering.
A number of AVG members have called for the company to identify members who abused the system and to claw back ill-gotten gains from them. AVG, however, may encounter difficulty defining what constitutes abuse, since the company itself provided the means that made the purported abuses possible.
Moreover, some members favored by management could have benefited from the same practices other members described as abusive.
Processor Problems And New Debit Card
Meanwhile, members are reporting that AVG — which purportedly is based in Uruguay — is having trouble with SolidTrustPay, a payment processor based in Canada. At the same time, members say, AVG is recommending that members cancel current payout requests through SolidTrustPay and route the requests through StrictPay, a payment processor based in Panama.
AVG also is pushing a debit card, which members say costs $30 and one day is envisioned as the preferred payout method. The card currently can be used to pay AVG, but cannot be used for cash-outs.
The card comes with this fee structure:
Monthly fee: $7.95
ATM fee: $2.00
International ATM fee: $5.00
International inquiry/decline fee: $1.50
ATM declined fee: $1.50
ATM inquiry: $1.50
Point-of-sale purchase fee: $1.50
Point-of-sale purchased declined fee: $1.50
Pinless transaction: Free
ACH inbound to card fee: $7.00
U.S. wire inbound to card fee: $10.00
International wire inbound to card fee: $15.00
Moving money from AVG account to card fee: $3.00
ACH outbound fee: $7.50
Domestic wire outbound fee: $25.00
International wire outbound fee: $35.00
Other fees may apply.
The card is known as First Debit Gold, and is issued by a company in Texas known as Secure Cash Network Inc. (SCN). In its Terms of Service, SCN says the card may not be used to purchase illegal goods or services. Many governments view the autosurf trade as an illegal enterprise.
Amounts members place on the card are stored in SCN’s computer system are are not insured by the FDIC, according to SCN’s Terms of Service. The amount members can place on the card is unclear. Some members said $10,000; others said $1,000.
Some members said AVG was selling the SCN card through PayPal. PayPal’s Acceptable Use Policy expressly prohibits use of its services for pyramid schemes and Ponzi schemes. It is unclear if the PayPal account used by AVG is in AVG’s name, but the advertising-rotator facet of its business frequently is associated with Ponzi schemes.
AdSurfDaily, a company with close ties to AVG, was accused by federal prosecutors last year of operating a multimillion-dollar Ponzi scheme and by state prosecutors in Florida with operating a pyramid scheme.
Some members of the AdViewGlobal (AVG) autosurf say they received no paper profits for surfing yesterday. For weeks, members have complained about “low” payouts, not “no” payouts.
Concern now is spreading about the complete absence of payouts yesterday. Some members, however, are saying that complainers have to understand that payouts never were “guaranteed.”
AVG is awash in a sea of incongruities. On one hand, the surf has released a forward-looking promotion that suggests members can earn back the money they spend on “advertising” — plus a profit of 10 percent — in the first six months of membership.
On the other hand, however, current members are grumbling about minuscule payouts — and, now, no payouts at all.
The no-payout development came on the heels of a PowerPoint presentation AVG released that advertised a conversion rate “in the neighbourhood of 37 percent,” a claim that implied the rate could be achieved across-the-board, regardless of the nature of the product, the quality of the audience, the state of the economy, pricing and other variables.
Under the conversion claim, an “advertiser” who pitched free doughnuts could expect 192 conversions out of each 519 AVG visitors. An “advertiser” who sold doughnuts for $10,000 each also could expect 192 conversions out of each 519 visitors.
“Advertisers” could expect to “garner” the rate as long as their sales copy didn’t “suck,” AVG said in the presentation.
The presentation included a “case study” that incorporated events that had not happened and concluded with an AVG surfer “on the beach” two years from now enjoying his success.
One AVG promoter complained that this Blog’s reporting on the PowerPoint presentation was unfair, saying the promotion was “not complete and is still being polished.” The member explained that the presentation was released because promoters were eager to have a new sales tool, but did not explain why AVG ever would release a tool prematurely, especially when the tool paints a rosy picture despite the fact current members are complaining about major problems within AVG.
AVG provided no context and no proof of its 37 percent conversion claim — a claim that was at odds with a separate claim of a “10%” conversion rate elsewhere in the presentation. The 10 percent claim was punctuated with an exclamation point, even though it was 27 points lower than the incredible, 37 percent claim.
Any person who achieved the lower conversion rate reasonably could ask why he hadn’t achieved the higher one — and why the 10 percent rate was something to celebrate with an exclamation point when the advertiser’s ad had underperformed the standard claim by a misery factor of nearly four to one.
Conversion rates vary wildly, as does the definition of a successful conversion rate. Depending on the nature of the product, pricing, market conditions and other variables, some advertisers would celebrate a conversion rate of 1 percent or even lower. A 37 percent conversion rate — especially if the implication is that it can be achieved across-the-board — is absurd on its face.
AVG Members Want Thieves Identified
Meanwhile, amid reports that some members had stolen from the company by abusing a member-to-member button AVG had provided, some members have called for AVG management to identify the thieves.
Earlier this month, an AVG promoter described a strategy by which prospects could pay upline sponsors directly for the purchase of ad-packs, which AVG calls “page impressions” or “viewer impressions.”
Under the strategy, the prospect would pay the sponsor directly, instead of paying AVG. The sponsor, in turn, would deposit the money into his private bank account. In the next step, the sponsor would send a check by overnight mail to payment processors either in Canada or Panama.
Alternatively, the sponsor could use his bank’s wire facility to route his prospect’s money to the offshore processors.
Once the processors received the money, the sponsor would instruct them to wire it to AVG. Once the money reached AVG, the sponsor would use it to fund his own account, and then use AVG’s internal system to distribute it back to the prospect.
The approach raised serious questions about mail fraud, wire fraud, tax evasion, money-laundering, selling unregistered securites and acting as a securities broker-dealer without a license.
AVG now has removed the member-to-member button.
At the same time, members have complained that promoters were misusing the button to siphon windfall profits through a process known as “stacking” — thus the call for AVG to identify the cheaters.
There were calls yesterday for AVG to reclaim the money promoters who cheated were paid. How the surf intends to proceed is unclear.
Some members pointed out that AVG itself provided the member-to-member button, saying that members who used it to their advantage had done nothing wrong and simply were taking advantage of a tool the surf had provided.
AdSurfDaily, a Florida company with close ties to AVG, which purports to be based in Uruguay, had problems with massive internal theft, federal prosecutors said in December.
In one case outlined by prosecutors, more than $1 million purportedly was stolen from ASD by Russian “hackers.”
ASD President Andy Bowdoin never filed a police report, despite the huge theft, prosecutors said. In fact, they added, Bowdoin ignored other thefts, too, because he knew that calling the police could expose ASD to the scrutiny of law enforcement.
Prosecutors said Bowdoin had set up ASD so family members and insiders actually could benefit from theft. In one instance, prosecutors said, ASD paid an employee to surf for Bowdoin’s son, who received rebates for having performed no work.
Bowdoin and family members later set up a separate company, using ASD proceeds to do so, prosecutors said. The separate company was used to retire the $157,000 mortgage on the home of Bowdoin’s stepson, who is a trustee for AVG.
Whether AVG will call the police to report the purported thefts by insiders is unclear.
And the company may face another problem: If AVG tries to reclaim money from promoters who took advantage of a member-to-member button the company itself provided, it is possible that the promoters themselves would consider the action a matter for law enforcement to investigate.
Jurisdiction also is fuzzy. AVG purports to be based in Uruguay, but recently issued a news release with a dateline of Tallahassee, Fla.
UPDATED 10:23 A.M. EDT (U.S.A.) AdViewGlobal (AVG) autosurf members again are complaining about “low” payout rates, confusion about debit cards and how best to fund accounts. They also are grousing about an absence of comprehensible guidance from the top.
Meanwhile, some members are grumbling about a culture of super-secrecy, a preoccupation by some leading advocates with spies and “plants” and passive-aggressive lectures from insiders who blame the company’s problems on members.
Some members have been clamoring for more “tools” to sell AVG’s surf and the “VIP” payout “opportunity,” viewing the “advertising” rotator as the Main Event and saying nonsurf products and services AVG recently introduced have little appeal to the surf crowd, despite claims AVG has “fortune 500” (sic) clients.
Other AVG members continue to complain about vague messages from the company.
A PowerPoint presentation produced by the company claims that 519 page views “should garner you in the neighbourhood of 37% conversion if not higher,” adding a strange disclaimer: “Given your sales copy doesn’t totally suck.”
The presentation includes charts and graphs, including one that speciously boasts of a “400% increase in Traffic!”
AVG “advertisers” pay to have their sites shown in what the company now describes as a “testing platform.” Because “advertisers” are paid incentives to view the ads of fellow “advertisers,” the quality of the traffic is dubious. The claim of a 37 percent conversion rate — and a claim elsewhere in the presentation of a 10 percent conversion rate — strains credulity.
The conversion rate claim of 37 percent implies it can be achieved across-the-board, regardless of the nature of the product, the quality of the traffic, the state of the economy, the demand for the product or the pricing of the offer. As the PowerPoint presentation stands, a doughnut priced free or a doughnut priced at $10,000 both could expect to enjoy a conversion rate of 37 percent, something absurd on its face.
Surf And Sun
AVG, which has been operating for about six months, also includes what it calls a two-year “Case Study of a BIG thinker.” Why a company that formally launched in February 2009 would choose to call events that have not happened a “case study” is left to the imagination. The “study” includes vague, speculative updates in six-month intervals, concluding with the subject of the two-year study “on the beach” and enjoying his autosurfing success.
As the “case study” subject is enjoying life at the shore and still doing his AVG surfing, the company challenges viewers to “do the math now” without providing any solid numbers that actually would permit members to do the math. The “case study,” for example, does not say how much the subject spent, describing his first purchase vaguely as an “initial quota of Advertising.”
Within six months, the subject — who appears not to do any recruiting — recovers “all of his costs + around 10 percent.”
Although AVG has released the PowerPoint presentation with the speculative, two-year “case study,” current members are grumbling that significant sums of money they sent the company for “advertising” are generating minuscule returns — chump change as opposed to beach money — and that downline members (and family members recruited into the program) are losing faith and having to square off against embarrassment for having joined.
Other Complaints
At the same time, members are complaining about the sudden removal of a member-to-member button that enabled them to move cash or cash-equivalents to other members. They also are complaining about a promotional video with a low-quality voiceover that smacks of amateurism and the company’s inability to solve problems that have dogged it for weeks.
Meanwhile, some AVG members have called for the company to make participation in a so-called 80/20 program mandatory, suggesting that trapping people’s money is the tonic AVG needs to succeed. If implemented, however, such a mandatory program could heighten concerns that AVG was trying to cover up a Ponzi scheme, selling unregistered securities and acting as a bank or financial-services company without a license.
Indeed, the mere existence of a nonmandatory 80/20 program is one of the hallmarks of an autosurf Ponzi scheme that is thumbing its nose at securities, wire-fraud and money-laundering laws. Such programs are designed to stem the outflow of cash — and outflow should not be an issue when a company claims it does not rely on funds from new members to pay older members.
The Accountability Equation
Perhaps the greatest AVG mystery of all is how the company, which purports to be a professional advertising and communications firm based in Uruguay, can send so many confusing messages.
Some of the incongruities border on the comic. Although the company purports to be operating from Uruguay, insiders routinely describe “international” members as those who live outside the United States. If AVG truly was operating from Uruguay, all members from any country other than Uruguay would be “international” members, including members who lived in the United States.
Stop Being So Stupid!
AVG promoters also have a curious habit of scolding fellow members. This habit is accompanied by awkward appeals for loyalty and aggressive, even paranoid appeals that stymie members who ask too many questions.
In March, AVG announced its bank account had been suspended. Incredibly, it blamed members in the very first sentence of its announcement for causing the problem.
“Due to people bank wiring too many transactions over $9500.00 each, the bank we were using for Bank Wires and ACHs suspended our account,” AVG said at the time.
Although AVG announced in May it had struck a deal that enabled members once again to wire money to the surf, one of the companies it identified as a facilitator of the wire transfers issued a public denial it had any business relationship with AVG.
AVG is engaged in a highly questionable “industry.” The U.S. government has destroyed several autosurf firms. Several government agencies have issued warnings about the autosurf trade in general, and the U.S. Secret Service issued a news release last year, noting that it had seized more than $93.5 million from Florida-based AdSurfDaily Inc.
AVG, which launched after the government seized ASD’s assets, has close ties to ASD. Unlike ASD promoters, however, AVG promoters used the surf’s purported offshore location to drive business to the company.
UPDATED 11:22 A.M. EDT (U.S.A.): An affiliate spammer entered PonziNews.com yesterday, leaving what was described as “my friends” (sic) affiliate link for AdViewGlobal (AVG) and an advertisement for AVG.
Seven minutes later, the same affiliate spammer left another ad for AVG, claiming that “I just watched as 2, yes 2 Attorney’s (sic) from D.C. decided that they wanted to advertise on the site, and be a member of the VIP program.”
Affiliate spam is a back-door way of gaining signups for a program or service. One form of affiliate spam is to monitor websites that publish criticism of an “opportunity” favored by the spammer and then post affiliate links as part of the defense of the opportunity.
It is possible (and easy) to defend an opportunity without leaving an affiliate link, thus taking any issue of spamming totally out of play. The affiliate spammer who claimed it was a friend’s AVG link yesterday used the username of “Jeffrey,” and the link resolved to the sign-up page of an AVG promoter who used the same name.
It was not clear if the affiliate spammer also was the AVG promoter “Jeffrey.”
Software employed by Ponzi News captured the affiliate spam. It was not published. A screen shot of the spam was made and reduced in size to fit within the borders of this Blog.
AVG enthusiast sends back-to-back spams, claiming Best Buy, Staples and other prominent companies are AVG advertisers.
The spammer declared that Best Buy, Staples, GoDaddy.com and Delta Air Lines were AVG advertisers. The affiliate link used the identifier 7916, and an email address left by the spammer suggested he was associated with a company known as GuardIt Technologies.
Although the email address used the GuardIt name, it was not tied to the GuardIt server. Rather, it was tied to a server at a free email-hosting company, so the address could have been used without the authority of GuardIt.
AVG, also known as AVGA, publishes an antispam policy:
“If you are found to have spammed, without warning, AVGLOBAL ASSOCIATION reserves the right to disable or terminate your account immediately,” the company said on its website.
“All funds will be forfeited. AVGLOBAL ASSOCIATION may impose a penalty for each spam policy violation. AVGLOBAL ASSOCIATION also reserves the right to determine what violates this policy, in which case, any violation that occurs will result in account termination without refund of any monies,” AVG said.
A website associated with Mark Simmons, whom AdSurfDaily intended to call as a witness at a Sept. 30-Oct. 1 evidentiary hearing in Washington, D.C., promotes both AVG and GuardIt. Simmons was sequestered at the hearing, but never took the stand.
Federal prosecutors say ASD engaged in wire-fraud, money-laundering and the sale of unregistered securities while operating a Ponzi scheme.
On Nov. 19, a federal judge ruled that ASD had not demonstrated at the evidentiary hearing that it was operating legally and not a Ponzi scheme. Within days of the ruling, ASD stop using its own Breaking News website, instead giving the Pro-ASD Surf’s Up forum its official endorsement as an ASD news outlet.
In December, prelaunch buzz began to appear online for AVG, and the surf formally launched in February. At least two forums that use ning.com as a host sprouted up to promote AVG.
Some of the Mods and members of Surf’s Up manage one of the forums, and Simmons started the second forum. One Simmons’ thread pitches members on a technology provided by a website known as ErasableEmail.com, which purportedly permits users to send email and video that “self-destructs” and cannot be forwarded or saved.
Simmons said the product was endorsed by “the better hobo bureau” — a play-on-words of the name of his ning.com forum: The Unemployable Hobo Lifestyle Forum.
Erasable email and video technology can be abused. A promoter for an illicit program, for example, could make false claims about a product or service and then erase the claims so they could not be forwarded to law enforcement.
The legal community has been debating the utility of erasable email for years, wondering aloud if it can be used to thwart the discovery process in litigation and to erase evidence of crimes and misconduct.
EDITOR’S NOTE:This story about filings in a racketeering lawsuit against AdSurfDaily President Andy Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby also includes an update on a lawsuit filed last year against ASD by Florida Attorney General Bill McCollum. The information is under a subhead below.
Although U.S. District Judge Rosemary Collyer yesterday granted a motion plaintiffs filed for more time to respond to Robert Garner’s motion to be dismissed as a defendant in a racketeering lawsuit, she advised the plaintiffs that they had missed a May 26 filing deadline to respond to Clarence Busby’s motions to be dismissed as a defendant.
Collyer ordered the plaintiffs to show cause why Busby’s motion should not be granted, giving them until June 19 to do so.
Busby was the president of Golden Panda Ad Builder. Garner was an attorney for AdSurfDaily.
The judge had denied a motion by the plaintiffs earlier this week for more time to respond to Garner’s dismissal motion for “failure to cite good cause.” The plaintiffs filed an amended motion, which Collyer granted yesterday.
A response to Garner’s dismissal motion now is due July 9. Attorney’s for the plaintiffs said they agreed to examine “whether or not to voluntarily dismiss [Garner] from the proceeding” prior to the new filing deadline.
Earlier in the week Collyer denied motions by the plaintiffs to formally add two attorneys to the case, for “failure to confer with all opposing counsel.”
ASD President Andy Bowdoin also is a RICO defendant. He has not responded to the lawsuit.
In a separate case filed by the government last year against assets tied to ASD and Golden Panda amid allegations of wire fraud, money-laundering, selling unregistered securities and operating a Ponzi scheme, prosecutors seized more than $65 million from Bowdoin-controlled bank accounts and more than $14 million from Busby-controlled accounts.
Busby, a minister who also is in the real-estate business and was implicated by the SEC in a prime-bank scheme in the 1990s, submitted to the forfeiture in September.
Bowdoin submitted to the forfeiture in January, but now says he changed his mind after meeting with a “group” and wants to re-contest it. Golden Panda amassed the $14 million sum in only days, and ASD amassed the $65 million sum in only weeks.
Busby’s attorney — Jonathan W. Emord of Clifton, Va. — said in court filings that claims against “Rev. Busby are precluded by the United States’ civil forfeiture action under the doctrine of res judicata.
“Plaintiffs are barred from relitigating issues resolved against Busby on behalf of the United States and all residents, citizens, and taxpayers concerning matters adjudicated which are of public interest,†Emord argued.
In essence, the argument holds that, since Busby already has submitted to the forfeiture of funds and the government is establishing a mechanism for refunds, the RICO litigants already have a remedy.
Garner, meanwhile, argued that the court lacks jurisdiction over him in the case. He is representing himself in the RICO action, although court filings suggest he also has paid professional counsel working behind the scenes.
Florida Case Against Bowdoin At Standstill
Why Bowdoin hasn’t responded to the RICO lawsuit is unclear. Also unclear is why there has been no public action since Jan. 6 in a lawsuit filed against Bowdoin and his wife, Edna Faye Bowdoin, by Florida Attorney General Bill McCollum.
Federal prosecutors said in April that Bowdoin had signed a proffer letter in the federal case and acknowledged that ASD was operating illegally. Proffer letters sometimes mean that the one who proffers has agreed to provide the government information that is helpful in the prosecution of others.
After signing the proffer letter, Bowdoin submitted to the forfeiture in January. Several weeks later, in late February, Bowdoin consulted with what he described as a “group” and began to file pro se court pleadings in the federal case.
One day after Bowdoin signed his first pro-se pleading on Feb. 25, the AdViewGlobal (AVG) autosurf introduced members to Pro Advocate Group, which says it can help people practice law without a license and help companies form “private membership associations.”
AVG now is operating as such an association.
Pro Advocate Group, which also pushes a “legal defense” for taxpayers and “private medical associations,” is associated with Karl Dahlstrom. Dahlstrom was convicted of securities fraud and sentenced to 78 months in federal prison in the 1990s.
Prosecutors said he bought automobiles with investors’ funds — something Bowdoin is accused of doing.
AVG has close family, management and promotional ties to ASD. Two of Bowdoin’s family members –Â George Harris and his wife, Judy Harris — are trustees of the AVG private “association.”
George Harris is the son of Bowdoin’s wife, Edna Faye Bowdoin.
AVG, which earlier had disclaimed any ties to ASD, now describes itself as a full-fledged advertising and communications company with a host of services.
But the company has not explained how having ties to Bowdoin family members, friends and promoters is helpful for business, given twin forfeiture cases by the government against assets tied to ASD, the RICO case filed by ASD members and McCollum’s Florida case.
In December — in an action separate from an August forfeiture filing by the federal government and McCollum’s August lawsuit — federal prosecutors filed a second forfeiture complaint against assets tied to ASD.
Among other things, the December complaint alleged that Edna Faye Bowdoin and George Harris opened a checking account with nearly $180,000 in illegal proceeds from ASD. George Harris used more than $157,000 of the deposit to pay off the mortgage on the Tallahassee home he shared with his wife, prosecutors said.
George and Judy Harris also acquired an automobile with illegal proceeds from ASD, prosecutors said.
Last year, Bowdoin announced to ASD members that “Ponzi” allegations in the Florida case had been dropped. The announcement caused ASD members to race to online forums to share the good news, but proved to be false.
McCollum’s office issued a statement denying Bowdoin’s assertions, saying Ponzi allegations hadn’t even been brought against ASD in Florida.
Rather, McCollum’s office said, the state had accused ASD of operating a Pyramid scheme.
EDITOR’S NOTE: We published a story Wednesday that some members of AdViewGlobal (AVG) assert is unfair. At issue — particularly from a poster who uses the handle “CORRECTION!” — is the headline that accompanied the story.
Another poster, “Pistol,” isn’t sympathic to the autosurf business and says he doesn’t suffer fools gladly on either side of the issue, but also raised a concern about the fairness of the headline. Meanwhile, other posters say the headline is fair. One of the issues is whether an AVG prospect can bypass AVG and purchase ad-packs directly from sponsors.
Here is some background, and our response to the concerns. We’ll start by republishing a comment Pistol made. Pistol’s reference to the “200% thingy” below is a reference to an AVG matching-bonus program.
The 200 percent program was advertised to have a June 29 expiration date, but AVG suddenly changed the expiration date to June 5. AVG members and prospects said they were concerned about not being able to get money to the company in time to qualify for the bonus, and an AVG promoter outlined a strategy by which members and prospects with “big bucks” could get the bonus by paying sponsors directly.
Pistol: It doesn’t seem to me that the sponsor in question is suggesting that sponsors should give/sell members adpacks/page impressions from them (the sponsors) but rather a quick and easy way that they can help new members get funds available so that they can buy adpacks directly from AVGA thereby qualifying for the 200% thingy.
OUR TAKE: During the first FOUR steps of what is described as the sponsor’s bid to provide a “quick and easy way” for prospects to buy ad-packs “directly” from AVG, the sponsor:
1.) Gathers money from the prospect and makes a private agreement with the prospect that the final recipient of the funds will be AVG and that the funds will be used to purchase ad-packs.
2.) Deposits the funds in the sponsor’s local bank.
3.) Causes a wire to be sent to an offshore payment processor or sends a check via overnight mail to the offshore payment processor.
4.) Waits for the payment processor to receive the funds and credit the sponsor’s account.
That’s FOUR steps — or FIVE, if you count the private agreement as a separate step — so an argument that positions this as a purchase made “directly” from AVG isn’t a very compelling one.
This deal cannot happen as the promoter describes, absent a private agreement between the sponsor and the prospect and subterfuge aimed at the local bank. Moreover, it can’t happen without use of the bank’s wire facility or use of a banking instrument, and it necessarily must involve the offshore processors because the prospect can’t wire funds to AVG directly.
There’s that word again — “directly.” With the exception of the prospect’s direct payment to the sponsor, there is virtually nothing direct about this transaction.
At this point, the prospect’s bank thinks he is doing business with the sponsor, the sponsor’s bank thinks he is doing business with the prospect, and the payment processor thinks it is doing business with the sponsor.
ONLY the prospect and the sponsor know that AVG is the intended final recipient — and they haven’t told anybody, FOUR or FIVE steps into the process.
Additional Steps
In the next step, the sponsor tells the offshore payment processor that AVG is the intended recipient, but the payment processor doesn’t know the prospect is hidden in the deal or is choosing not to know. The prospect’s role is to give money to the sponsor, so he can use the sponsor’s bank to get the money to the offshore processor in an environment that is conducive for AVG and most advantageous for the prospect.
The payment processor obliges the sponsor and wires the money to AVG, but the transaction still is at least TWO steps away from completion, because the money or the value thereof somehow has to get back in the hands of the real customer, the prospect.
So, the sponsor funds his AVG account, so he can use AVG’s internal system to get the money or the value thereof to the real customer, the prospect, for the purchase of ad-packs.
A sale made “directly” through AVG? Hardly. This process is at least SEVEN steps removed from a direct transaction with AVG and perhaps as many as EIGHT. This sale cannot occur — and the prospect cannot get the 200 percent bonus — unless the prospect pays the sponsor directly. The sponsor is getting paid directly for the purchase of ad packs.
Here, a person might want to ask why the prospect in search of a matching bonus before a deadline passes just can’t send the money to AVG directly and have it credited immediately. That’s the question some AVG members are asking right now. In fact, they asked it as soon as the sponsor laid out the strategy, and some AVG members are complaining out loud about money procedures that appear to be convoluted and complex.
A person also might want to ask why AVG isn’t using PayPal, and instead is using the offshore surfing favorites: SolidTrustPay and StrictPay. PayPal does not touch this kind of business because it is fraught with secret agendas.
Worth Noting
It’s worth pointing out that some of the government personnel involved in the AdSurfDaily (ASD) case also were involved in the successful prosecution of e-Gold, which basically was accused of looking the other way while it processed payments for people who were laundering money.
ASD, a Florida company federal prosecutors say once used e-Gold and engaged in wire fraud, money-laundering and the sale of unregistered securities, has close ties to AVG.
AVG, for example, lists ASD President Andy Bowdoin’s stepson — George Harris — as a “Trustee” of the AVG “private association.” Judy Harris, the wife of George Harris, also is listed as an AVG “Trustee.”
A home and a car prosecutors say George and Judy Harris acquired with money from ASD was seized as the proceeds of a criminal enterprise in a December forfeiture complaint filed by the Feds.
One of the issues in the e-Gold case was secret money transactions, and look what’s happening in the strategy outlined by the AVG promoter: The banks don’t know that the prospect and the sponsor just worked together to get funds to a final beneficiary unknown to the bank — AVG — and the processor doesn’t know the prospect is hidden in the deal or may be choosing not to know.
Incongruous Messages
AVG purports to be headquartered in Uruguay, has servers that resolve to Panama, receives money from offshore processors in Canada and Panama, but issued a news release this week with a dateline of Tallahassee.
Many of our readers probably noticed that AVG didn’t use the words “Uruguay” or “Panama” or “offshore” in its news release, but then immediately sent members an email purported to have originated in Uruguay — to celebrate a news release with a Tallahassee dateline.
It’s a message hopelessly at odds with itself. It is particularly incongruous because AVG also now claims it provides professional PR services — but just look at what is happening:
AVG can’t reconcile its own message. It is creating the appearance that it is in Tallahassee when it wants to look clean and proper — indeed, some people now say it is selling legitimate services priced from $30,000 to $200,000 — but it’s in Uruguay when it wants “advertising” rotator cash from folks who need to believe the Securities and Exchange Commission can’t touch them offshore.
How do those competing notions come into balance? And why would a company that says it can command legitimate fees of up to $200,000 from clients not be running like a man on fire to exit the autosurf business? Incredibly, one promoter said today that AVG’s plan is to remain in the surf business and use the fees it collects for legitimate services to fund the surf.
In the strategy outlined by the promoter, where is the money that started out at a local bank now? Uruguay? Panama? Florida? Elsewhere? And what routes will it take in the form of payouts to get back to members so it becomes spendable in their hometowns?
The Headline Flap
As many of our readers know, “CORRECTION!” is none too happy about this headline, which appears on this Blog.
AdViewGlobal Promoter Says Prospects Can Bypass Company And Purchase Ad-Packs Directly From Sponsors To Ensure They Get Credited With 200 Percent Match Before Deadline
CORRECTION repeatedly has demanded a retraction, although he has not identified himself as an AVG spokesperson or person in position of authority at AVG to bring a concern to our attention and ask for a clarification or a retraction. At the same time, CORRECTION will not answer basic questions about AVG’s business practices or provide evidence of verifiable income streams to refute concerns AVG is selling unregistered securities and operating as a Ponzi scheme.
Let’s take the headline sections one at a time:
/AdViewGlobal Promoter Says/
Yes, it was an AVG promoter who shared the strategy of prospects paying sponsors directly and engaging in a process that involves at least SEVEN steps and ultimately results in the purchase of ad-packs. (AVG calls ad-packs “page impressions” or “viewer impressions.”)
/Prospects Can Bypass Company/
Yes, the prospect bypasses the company and pays money directly to the sponsor, under the strategy outlined by the promoter. The only thing AVG does in this transaction is make sure the electrons settle in the proper places when told to do so.
/And Purchase Ad-Packs Directly From Sponsors/
Yes, the sponsor is selling ad-packs directly because he directly collects the money for the ad-packs, routes the money offshore, causes it to be delivered to AVG, funds his own AVG account with his prospects’ money, and then causes AVG to redistribute the funds or the value thereof to complete the sale. In this case, the sponsor is more directly involved in the sale of ad-packs than AVG itself.
/To Ensure They Get Credited With 200 Percent Match Before Deadline/
Yes, this whole strategy was published because someone wanted to know the quickest way a person with $10,000 could get the money to AVG before the deadline to qualify for the 200 percent match.
The promoter said it was a way to take care of the folks with “big bucks.”
EDITOR’S NOTE: There are plenty of reasons to avoid the AdViewGlobal (AVG) autosurf, not the least of which is that the government views the autosurf business model as foundationally corrupt. Autosurf operators and promoters are subject to prosecution under federal securities, wire-fraud, mail-fraud, money-laundering and racketeering statutes, and the surfs typically operate as Ponzi schemes. They also are subject to prosecution under state laws.
Readers should not infer that numbered items in the Top 5 list below are ranked in order of importance. Some of the information below is being published for the first time today.
1. AVG may be operating as a “ghost” enterprise. Research suggests that AVG, which purports to be headquartered offshore, may be using at least one U.S.-based company to funnel money to itself through complex wire transfers. The owner of the company filed a corporate bankruptcy petition in 2004 for a separate company he owned. In 2005, the owner filed a personal bankruptcy petition, listing nearly $1.4 million in liabilities and only $3,500 in assets.
The 2005 bankruptcy petition listed the owner’s address as an apartment, specifically using the abbreviation “Apt.” The apartment address, however, appears to have been the address of a UPS Store that once operated as a Mailboxes Etc.
A former business partner of the owner committed suicide in 2002, after members sued the former partner amid concerns that a large sum of money was missing from a co-op venture. Prior to taking his own life, the man made inquiries about banking in Switzerland and the Caribbean, according to court filings.
One of the key selling points of AVG is its purported offshore location. The company claims to be headquartered in Uruguay. Its servers resolve to Panama. Regardless, the company has used “gmail” addresses from U.S. based Google to communicate with members and perform certain customer-service functions.
A company with ties to AdViewGlobal uses the address of this U.S. office building.
Research suggests a company with which AVG has a close association is headquartered in a modern office building in the United States. The building was constructed in 2003. Office functions and conferencing can be rented by the hour. Two large airports are nearby, and a major Interstate highway is situated one mile from the building.
We are declining to publish the address of the building or identify its specific geographic location. We have confirmed through public records and other sources, however, that the company lists an address at the building, that the business has made inquiries about international wire transfers and that two international financial-services companies have established a tie to AVG and blocked wire transactions because of the AVG tie.
2. Two forfeiture cases against AdSurfDaily and a RICO case are still active. AVG launched in the wake of two forfeiture actions brought by the government against assets tied to AdSurfDaily and a racketeering lawsuit brought against ASD by individual members. AVG has close family, management and promotional ties to ASD (see No. 3 below), and the multiagency federal probe into ASD’s business practices is ongoing.
It is known that the U.S. Secret Service, the Internal Revenue Service and the U.S. Department of Justice are involved in the investigation, and it is believed that the Federal Bureau of Investigation, the U.S. Postal Inspection Service and the Securities and Exchange Commission have at least peripheral involvement. At the same time, it is known that the office of Florida Attorney General Bill McCollum is involved in the probe, and it is believed that other Florida agencies also are involved.
It also is known that various state attorneys general, state banking regulators and state securities regulators have knowledge about the ASD case.
Your AVG sponsor or his or her upline sponsor could be a target of the ASD investigation, which means you could be doing business with a person the government views as a participant in a criminal enterprise. Forfeiture complaints were filed against assets tied to ASD in August and December. The government views ASD as a criminal enterprise. All money collected by ASD and all “profits” derived from ASD are viewed as the proceeds of a crime.
Meanwhile, the RICO complaint brought by ASD members in January alleged that ASD was engaged in racketeering with unnamed co-conspirators. Some of the alleged co-conspirators may have ties to AVG.
3. AVG’s “association” structure does not insulate it from prosecution. AVG has shifted to an “association” structure, apparently on the theory that the “association” approach can immunize members from prosecution for violations of state and federal law. Such associations may say their power is derived from the U.S. Constitution. They may publish statements that resemble a loyalty oath and frequently are associated with tax schemes. Even by the incongruous standards of the surf world, AVG is setting a new standard for weirdness.
The AV Global Association (AVGA) is now listing Judy Harris as its “First Trustee.” Harris, the wife of George Harris, replaces Gary Talbert in the role of “First Trustee.” George Harris, the stepson of AdSurfDaily President Andy Bowdoin, is the “Successor Trustee.”
What this means, literally, is that AVG is linking itself to Bowdoin family members identified by the federal government as the beneficiaries of illegal conduct by ASD, after earlier disclaiming any affiliation with ASD and during an active criminal investigation. What it means as a practical matter is unclear because the situation is so bizarre it almost defies description.
Talbert, who is not a Bowdoin family member but is a former ASD executive who filed a sworn affidavit on ASD’s behalf in the August forfeiture case, resigned suddenly March 20 as AVG’s chief executive officer. Three days later, on March 23, AVG announced its bank account had been suspended. AVG has never provided a clear explanation of either event. Talbert’s name now has been removed as an AVG “Trustee.”
Property owned by George and Judy Harris, including a car and a home in Tallahassee, Fla., was seized in the December forfeiture complaint, which alleged the $157,000 mortgage on the Harris home was retired with illegal proceeds derived from ASD.
There has been no public action in the December forfeiture case since the filing of the complaint. Neither George nor Judy Harris has filed a claim to their home. Neither George nor Judy Harris has filed a claim to a car prosecutors alleged was purchased with illegal proceeds derived from ASD.
4. At least one proffer letter exists in the ASD case. In April, in their final response to a series of responses to Andy Bowdoin’s pro se pleadings in the forfeiture case brought in August, prosecutors revealed that Bowdoin had signed a proffer letter. Proffer letters sometimes mean that the one who proffers is willing to provide the government information that is helpful in the prosecution of others.
Bowdoin never told ASD members about the proffer letter. Nor did he tell them about the December forfeiture complaint, which includes extremely specific allegations. Bowdoin waited until March to tell members he had decided in January to submit to the forfeiture of tens of millions of dollars seized in the August complaint.
Bowdoin’s first public comments on his January decision to submit to the forfeiture came in the form of a Bowdoin letter published in March on the pro-ASD Surf’s Up forum. In the letter, Bowdoin triumphantly announced he had changed his mind about submitting to the forfeiture — while ignoring the fact that he never told members about the December complaint or his January forfeiture decision. In essence, Bowdoin blamed his former paid counsel for the trouble he was in and said the federal government was prosecuting ASD illegally.
In his letter, Bowdoin chided federal prosecutors, saying his pro se pleadings “should really get their attention” and urging members to write to President Obama, members of Congress and Fox News personality Glenn Beck.
At 74 — and a convicted felon from a 1990s securities scheme in which 89 separate instances of fraud were alleged in Alabama — Bowdoin urged his supporters to tell anybody who cared to listen that he was a victim of an out-of-control government. In July 2008, just days before the government seized tens of millions of dollars from ASD, Bowdoin plunked down nearly $50,000 to purchase a new Lincoln, according to the December forfeiture complaint.
A month later he sent his Alabama victims a check for $100, according to the St. Petersburg Times, a Pulitzer Prize-winning newspaper. The Lincoln alone cost more than the remaining restitution due the Alabama victims.
Even though Bowdoin told ASD members in March that he would hold a conference call soon to explain what was going on, the conference call never materialized. And Bowdoin still has not told members about the proffer letter he signed.
5. General confusion about AVG. One AVG member observed that the firm’s explanations about its business practices have been about as clear as “mud.” Among the current issues are a failed attempt last week by the company to launch a new website, a denial by a company AVG said was facilitating offshore wire transfers that it had any business relationship with AVG, confusion about AVG debit cards and why some AVG members seem predisposed to cheer for the company as though members were taking part in a religious revival.
Loyalists, meanwhile, continue to maintain that AVG members have a duty not to talk about the company in public, insisting that members adhere to “association” rules.
Some AVG members say they want to use a spreadsheet to educate prospects about potential earnings, but others say spreadsheets are one of the things that led to trouble for AdSurfDaily. At the same time, members are trying to stop other members from using the word “investment” when discussing AVG, apparently believing that calling AVG an “advertising” company instead of an “investment” company somehow would insulate AVG from the prying eyes of the government.
Such attempts at forced wordplay not only provide no protection, they also provide evidence of what investigators call “consciousness of guilt.” Indeed, there would be no reason to insist on the forced use of language if promoters didn’t recognize the legal danger they were in — and calling AVG an “advertising” company does nothing to change the simple fact that AVG and surfs that use similar models are vulnerable to charges of selling unregistered securities as investment contracts. The surfs cannot pass a simple test (“The Howey Test”) that became a threshold securities test and litigation benchmark 63 years ago, in 1946, when Harry Truman was President of the United States. The Howey case was on the books 15 years prior to the 1961 birth of Barack Obama, the current President, and 23 years prior to the first moon landing in 1969.
In recent days, some AVG members have been reluctant even to mention the name “AdSurfDaily,” instead referring to the embattled surf with close AVG ties as the “company.” The paranoia is palpable.
One problem with paranoia — and it is a problem AVG is experiencing — is that it does not translate well among people who have no reason to be paranoid. Many entry-level surf participants, for example, don’t understand that they’re being recruited into a wink-nod enterprise. They ask reasonable questions, but are met with paranoid responses and prompts to be less open and more secretive, which only accents the paranoia among those who know there actually is something to be paranoid about — chiefly, that virtually all autosurfs operate as Ponzi schemes and that the government could shut them down without warning at any moment.
One AVG member instructed “international” members of AVG to insert “NA” in a debit-card application when prompted to supply a Social Security number, an instruction that only heightens concerns about money-laundering and wire fraud.
A triumphant AVG announcement about a new debit card the surf intends to offer was met with a thud when some members found out later that the card came with a $30 fee. Loyalists, however, said members should embrace the fee because it creates a new profit center for the company. Other members are complaining that at least one of AVG’s debit cards seems to limit withdrawals to $100.
AVG promoters, meanwhile, continue to lean heavily on exclamation points — rather than straightforward speech — to make their case for the company. An announcement about an AVG conference call was accompanied by three exclamation points:
