BULLETIN: A federal judge in Florida who says she was accused of “abusing” her discretion and “trampling” the Constitutional rights of a man implicated in an alleged multimillion-dollar commodities fraud by the SEC has ordered the defense attorney who made the assertions to explain himself and substantiate claims that his client had been denied due process.
U.S. District Judge Patricia A. Seitz ordered attorney Horecia I. Walker to respond in writing no later than Sept. 9 and explain what kind of investigation he conducted prior to asserting that James Clark Howard III and his counsel present at an Aug. 23 evidentiary hearing did not have adequate time to prepare for the hearing.
Howard, who appeared at the hearing, was represented at the hearing by attorney Mark C. Perry, according to records. Both Howard and Perry had 11 days to prepare for the hearing, Seitz wrote.
In an order issued on the same day as the hearing, Seitz directed Howard and Sutton Capital LLC to turn over $1.45 million to attorney David S. Mandel, the court-appointed receiver in the Commodites Online LLC fraud case filed in April by the SEC.
Seitz gave Howard and Sutton, another firm associated with Howard, until yesterday to turn over the money. It was not immediately clear if either party complied with the order.
What is clear is that Seitz was not amused by an emergency motion filed by Walker on behalf of Howard and Sutton to stay the Aug. 23 order to turn over the money pending an appeal of the order.
“Walker has accused this Court of trampling Howard’s constitutional rights and abusing its discretion in entering the turnover Order,” Seitz wrote. “The factual underpinnings for these accusations are that Howard and Perry had insufficient time to prepare for the August 23, 2011, hearing. To avoid running afoul of Rule 11, Walker should have investigated these factual circumstances before relying on them to accuse the Court of a constitutional affront.”
The judge added that “it appears to the Court that no such investigation occurred.”
Seitz took issue with Walker’s characterization of the Aug. 23 hearing as an “apparent ‘evidentiary hearing,’” according to an order she issued yesterday denying the stay.
“Walker posits that the hearing ‘was not an evidentiary hearing at all’ and the Court’s Order requiring disgorgement amounts to an abuse of discretion,” Seitz wrote. “Lost in all of his hyperbole is the simple fact that Howard and Perry received notice of the hearing eleven days before the hearing commenced.”
Neither Howard nor Perry asked for a continuance, Seitz wrote.
The Commodities Online case has a link to the AdSurfDaily Ponzi scheme case brought by the U.S. Secret Service in August 2008.
SSH2 Acquistions, a Nevada company that listed former ASD member and pro-ASD Surf’s Up moderator Terralynn Hoy as a director, sued Howard and others in September 2010 amid allegations he was part of a massive Ponzi scheme into which SSH2 had plowed $39 million. The lawsuit was filed about six months after the Boca Raton Police Department filed felony charges against Howard in an alleged financial scam that targeted Haitian Americans.
Surf’s Up was a cheerleading site for ASD, and Hoy later became a moderator of a cheerleading forum for the collapsed AdViewGlobal (AVG) autosurf.
While SSH2 claims to be a Ponzi victim of Howard, the Surf’s Up and AdViewGlobal forums both claimed that ASD and AVG were conducting legitimate commerce. With Hoy as a moderator of Surf’s Up, the forum conducted an October 2008 online party complete with images of champagne and fireworks for ASD President Andy Bowdoin.
The U.S. Secret Service described Bowdoin as an international Ponzi schemer and recidivist felon who’d gathered tens of millions of dollars in the ASD caper — most of it in ASD’s final weeks of life in the late spring and summer of 2008. At least $65.8 million was seized from Bowdoin’s 10 personal bank accounts, according to court records. One account alone contained more than $31.6 million. Three accounts contained the exact same amount: $1,000,338.91.
It is unclear if ASD members beyond Hoy had any business ties to Howard and invested any money with the accused schemer. Hoy has not been accused of wrongdoing.
SSH2 said in court filings that it plowed $39 million into the alleged Howard scheme, and received back about $19 million in “fake and fraudulent ‘profits.’” Sutton, Rapallo Investment Group LLC and Patricia Saa also were named defendants in SSH2’s lawsuit.
Howard was sentenced to 57 months in federal prison in the 1990s on narcotics and weapons charges, according to records. ASD’s Bowdoin, meanwhile, narrowly avoided jail time during the same decade when he was implicated in Alabama in a securities swindle, according to records.
Clarence Busby Jr., one of Bowdoin’s alleged business partners, was implicated by the SEC during the 1990s in three prime-bank schemes, according to records.
Some ASD members have been identified as members of the so-called “sovereign citizens” movement. Cheerleading for Bowdoin and ASD continued on the Surf’s Up forum even after it was revealed that Curtis Richmond, one of the purported “sovereign” beings associated with ASD, had a contempt-of-court conviction for threatening federal judges in California and once claimed a federal judge from Oklahoma sitting by special designation in Utah owed him $30 million.
Richmond was a member of the so-called “Arby’s Indians,” an “Indian” tribe that targeted public officials with vexatious litigation. U.S. District Judge Stephen Friot ruled the “tribe” a complete sham.
U.S. District Judge Rosemary Collyer of the District of Columbia is presiding over the ASD Ponzi case. Both Richmond and Bowdoin tried unsuccessfully to have her removed from the case. Richmond accused Collyer of “TREASON” and claimed she may be guilty of 60 or more felonies.
A federal judge in Florida has ordered a convicted narcotics and firearms felon who emerged as a central figure in a Ponzi scheme case after his release from prison to disgorge $1.45 million.
The order, signed Aug. 23 by U.S. District Judge Patricia A. Seitz, applies to James Clark Howard III and Sutton Capital LLC.
Howard, a co-managing member of Commodities Online LLC, “directed” that $1.3 million in investor funds from Commodities Online be wired to Sutton Capital, “his wholly owned limited liability company,” Seitz found.
In the 1990s, Howard was sentenced to 57 months in federal prison on cocaine and weapons charges. He also was implicated last year in a separate fraud scheme targeting Haitian Americans.
The SEC sued Commodities Online in March, alleging that the firm was selling unregistered securities and operating an international commodities fraud from South Florida.
Seitz found that the $1.3 million transaction was recorded on the books of Commodities Online as a “loan” to Sutton, “even though no evidence has been found establishing a promissory note, interest rate or terms of repayment.”
The $1.3 million transaction occurred on Feb. 9, 2010, Seitz found.
On Feb. 18, 2010, Howard directed another $150,000 be transferred from Commodities Online to Sutton, Seitz found. She now has ordered Howard and Sutton to return the entire amount of $1.45 million from both transactions, saying they “remain in possession and control of these investor funds.”
Separately, David S. Mandel, the court-appointed receiver in the Commodities Online case, said aspects of his investigation have been “severely delayed and impeded by the noncooperation of the majority of the former officers of the Defendants.”
Although Commodities Online may own iron ore in Mexico, efforts to get at the truth have been hampered “due to the current nature of business in Mexico, and in particular, the iron ore business, which at times can be unsafe, unreliable and uncertain,” Mandel said.
In court filings, Mandel said that he has “received information that others have been purporting to act on the Defendants’ behalf in Mexico.” Mandel hired local counsel in Mexico, an attorney who is a citizen of Mexico and an international security firm to peel back layers of the onion and to protect receivership assets.
A forensic accounting of Commodities Online and thousands of transactions is ongoing, Mandel said.
One phase of the forensic accounting involved 9,500 transactions and 35 bank accounts “maintained at various financial institutions,” Mandel said.
An updated analysis of records shows that Commodities Online gathered nearly $12 million from “insiders and related parties” between January 2010 and April 2011, and paid the insiders and related parties more than $20.2 million.
All in all, the scheme gathered more than $35 million, according to the analysis.
Howard was arrested by the Boca Raton Police Department in a separate scheme targeting Haitian Americans on March 5, 2010.
About six months later — in September 2010 — he was sued by a Nevada company that listed former AdSurfDaily member and Surf’s Up moderator Terralynn Hoy as a director.
The Nevada company — SSH2 Acquisitions Inc. — alleged that Howard was part of a Ponzi scheme that also involved Patricia Saa, Sutton Capital LLC and Rapallo Investment Group LLC.
Howard and the defendants, according to the lawsuit, told SSH2 it was trading in commodities and “would produce profits of 40% per month or more, while not risking any of the invested funds.”
In its lawsuit, SSH2 alleged that its dealings with Howard and the others began in “early 2009” and continued through March 2010.
If SSH2?s assertions against Howard and the others are true, it means the transactions occurred during a period in which Hoy, later to emerge as an SSH2 director, also was moderating cheerleading forums for ASD and the AdViewGlobal autosurf.
Surf’s Up became infamous for deleting commentary unflattering to ASD President Andy Bowdoin and links members left to outside sources of information. The forum mysteriously vanished in January 2010, after cheerleading for Bowdoin and ASD nonstop for more than a year.
AdViewGlobal, which collapsed in June 2010, purported to operate from Uruguay and enjoy protection from U.S. regulators because of a purported “private association” structure. ASD was implicated by the U.S. Secret Service in August 2008 in an alleged $110 million Ponzi scheme. Bowdoin was arrested on charges of wire fraud, securities fraud and selling unregistered securities in December 2010.
Former moderators of Surf’s Up, which unabashedly cheered for Bowdoin and received ASD’s official endorsement in November 2008, just days after a key court ruling in a civil-forfeiture case went against Bowdoin and ASD, largely have been silent since the January 2010 disappearance of Surf’s Up.
It is not known if individual ASD members also invested money with Howard. What is known is that many ASD members did not skip a beat after the Secret Service moved against ASD in August 2008. Within days, some ASD members were promoting other autosurf schemes, HYIP schemes and cash-gifting schemes, positioning them as a way ASD members could make up their ASD losses.
Hoy has not been accused of wrongdoing. Court filings and other records suggest that Hoy could have been conducting business with firms (ASD, Sutton and Rapallo) and individuals (Bowdoin, Howard and Saa) who were running separate Ponzi schemes involving at least $149 million and perhaps more.
SSH2, with Hoy as a director, alleged that it was scammed by Howard, Sutton and Saa, and plowed$39 million into their Ponzi. The firm accused the defendants of selling unregistered securities and causing at least $19 million in damages. It specifically accused Howard and the other defendants of not revealing that Howard was a convicted felon.
As a Surf’s Up moderator, however, Hoy presided over a forum that overlooked or pooh-pooed matters pertaining to the alleged ASD Ponzi, ASD’s alleged sale of unregistered securities to thousands of people internationally and Andy Bowdoin’s previous encounters with law enforcement in fraud cases.
In October 2008, at the conclusion of an evidentiary hearing, Surf’s Up held an online party for Bowdoin, who’d been charged with felonies in an Alabama securities caper in the 1990s and avoided jail by agreeing to make restitution to investors he defrauded. The party was conducted during an active criminal investigation into Bowdoin’s conduct at ASD.
A federal prosecutor was derided as “Gomer Pyle” on Surf’s Up. He also was described as a “goon” and a person who should be made to suffer in a medieval torture rack. Critics were described as “rats” and “maggots.”
The party was conducted despite the fact the Secret Service had alleged that one of Bowdoin’s business partners had been implicated by the SEC in the 1990s in three prime-bank schemes.
BULLETIN: The website of CenturionWealthCircle.com will not resolve to a server, and DNS data that appears in domain-registration info strongly suggest the site was suspended for spam and abuse.
The DNS data include this string on two nameservers: SUSPENDED-FOR.SPAM-AND-ABUSE.COM.
CenturionWealthCircle.com is a new darling of Ponzi scheme and criminals’ forums such as TalkGold and MoneyMakerGroup, both of which are referenced in federal court filings as places from which Ponzi schemes are promoted.
Some members of Club Asteria, an “opportunity” that traded on the name of the World Bank amid claims that members could experience a “passive” return on investment of 10 percent a week, also promoted Centurion Wealth Circle. Included among the Centurion Wealth Circle promoters was “Ken Russo,” who claimed on TalkGold (as “DRdave”) to have received $2,032 from Club Asteria during the month of June alone.
Club Asteria later suspended member cashouts and claimed its revenue had plunged “dramatically.” The firm, whose website appears to have been registered on or near the same date the AdViewGlobal autosurf suspended cashouts in June 2009, blamed members for its problems.
A photo of Hank Needham, Club Asteria’s purported owner, appears in a promo for ASD Cash Generator, which was implicated by the U.S. Secret Service is an alleged Ponzi scheme that gathered at least $110 million. ASD Cash Generator, also known as AdSurfDaily, was operated by Andy Bowdoin.
Bowdoin was indicted on Ponzi, securities and wire-fraud charges in December 2010. Two days ago — in a video soliciting $500,000 to pay for his criminal defense — Bowdoin blamed lawyers and a federal judge for his legal problems, claiming he had been “crucified” by federal prosecutors and the U.S. Secret Service.
See the Centurion Wealth Circle thread on RealScam.com, an antiscam site.
BULLETIN: The U.S. Federal Trade Commission and the Canadian Competition Bureau have taken down an alleged ‘Yellow Pages” scam in which businesses in the United States and Canada were deceived into paying for unwanted listings in online business directories.
The scam was centered in Europe, authorities from both countries said. The Competition Bureau said it is seeking $11.55 million in penalties.
U.S. targets received unsolicited faxes that included “a name such as YellowPage-Illinois.com, depending upon the location of the organization, and a ‘walking fingers’ logo similar to the one commonly associated with local yellow pages,” the FTC said.
In May 2009, the PP Blog reported that AdViewGlobal (AVG), an autosurf with close ties to Florida-based AdSurfDaily, sought to launch a new website. The launch ultimately failed, but not before it published a “Walking Fingers” logo and advertised the availability of a purported Yellow Pages directory service.
Whether AdViewGlobal was offering the purported service independently or through a vendor never was clear. What was clear is that regulators long have warned the public about Yellow Pages scams, which appear in various forms.
After AVG scrubbed its website launch and launched yet-another new site in the days following the failed launch, the Walking Fingers logo disappeared and the purported listing program that had existed only days earlier never again was referenced. Instead, AVG linked itself to a purported suite of new products and services and a purported bid to save the rain forest.
The appearance of the Walking Fingers logo on the AVG website and the purported directory program led to questions about whether AVG was immersing itself in yet another new scam.
U.S. officials said today that the most recent variant of the Yellow Pages scam operated from from Palma de Mallorca, Spain, and used “corporations based in England and the Netherlands.”
Named defendants in the case were Jan Marks; Yellow Page Marketing B.V., also doing business as Yellow Page B.V. and Yellow Page (Netherlands) B.V.; Yellow Publishing Ltd.; and Yellow Data Services Ltd., the FTC said.
“The FTC is committed to working with its law enforcement colleagues in Canada and around the world to stamp out international schemes that target U.S. consumers,” said David C. Vladeck, director of the FTC’s Bureau of Consumer Protection. “We applaud our friends in Canada for helping to coordinate this international effort.”
A top Canadian official called the alleged Yellow Pages scheme a “cross-border scam.”
“The [Competion] Bureau is pleased that the FTC has joined us in targeting the individuals and companies involved in this cross-border scam,” said Melanie Aitken, Commissioner of Competition. “International collaboration is key to cracking down on multi-jurisdictional scams.”
Churches, nonprofits, doctors’ offices and retailers were targeted in the scam, the FTC said.
The scam was designed to make fax recipients believe they had a preexisting relationship with the defendants and to dupe them into entering purported contracts and paying for listings. The Australian Competition and Consumer Commission also brought an action, the FTC said.
When AVG was claiming in 2009 that it had a listing service, promoters also were pumping purported “matching bonuses” of 200 percent and even 250 percent for autosurf enrollees and their sponsors.
AVG suspended cashouts about a month after displaying a Walking Fingers logo to which the acronym “AVGA” had been added.
This old ad for AdSurfDaily features an image of Hank Needham, the purported owner of Club Asteria. An ASD affiliate link in the ad summons ASD’s old ASDCashGenerator.com URL, which went dormant after the federal raid on ASD’s Florida headquarters in August 2008. In recent hours, however, the old ASDCashGenerator URL began to resolve to an apparent new business opportunity known as Ad Sales Daily International. Needham’s one-time tie to ASD leads to questions about whether Virginia-based Club Asteria, through Needham or ASD downline members, could have benefited from ASD cash prior to the federal seizure of tens of millions of dollars from the personal bank accounts of ASD President Andy Bowdoin nearly three years ago. The Club-Asteria domain name was registered in June 2009, the same month an autosurf with ASD connections known as AdViewGlobal collapsed. Club Asteria’s domain now is registered behind a proxy, but once was registered to Needham, according to web records.
BULLETIN: (UPDATED 9:36 P.M. EDT (U.S.A.) A website identified in a 2008 forfeiture complaint as the site of a major financial crime allegedly engineered by AdSurfDaily President Andy Bowdoin and unidentified co-conspirators is active again and appears to be redirecting traffic to an entity named “Ad Sales Daily International” (ASDI) and a second entity known as ASD2Day.
“Make $10 per direct referral & $5 for every 2nd level indirect!” the site exclaims. “Recieve (sic) $2000 Account Initiation Credits! Hurry, while we are in pre-launch.”
A spokesman for U.S. Attorney Ronald C. Machen Jr. in the District of Columbia declined to comment on the development, saying that ASD is part of an active investigation.
The ASDI site is accessible through an affiliate link to Bowdoin’s old ASDCashGenerator.com site, which appears to have been re-registered in the name of Barbara Cruz, whose name previously has appeared in the context of ASD. The PP Blog accessed the ASDI site by clicking on an old ASDCashGenerator affiliate link . The link was within an ASD ad from 2008 that featured an image of Club Asteria’s purported owner Hank Needham.
The ASD ad with Needham’s image positioned ASD as a “Perfectly Credible Business” and included a contact email address that used the characters “ptigold.” The ASD ad, however, does not load Needham’s name as an ASDI affiliate when the link is clicked. Instead, it loads the name of another individual. The reason was not immediately clear.
This page for ASDI, an apparent upstart, is accessible when a link is clicked in an old ad for Andy Bowdoin's ASD Cash Generator program. The old ASD ad features a photo of Hank Needham, the purported owner of Club Asteria, but the ad does not load Needham's name as an ASDI affiliate when the link is clicked. Instead, the ad loads the name of another person. The reason was not immediately clear. Bowdoin is under federal indictment for wire fraud, securities fraud and selling unregistered securities. Questions have been raised about whether Club Asteria also was selling unregistered securities as part of a purported "passive" investment program.
A separate link within the ad with Needham’s image forwards to a page that displays pornography ads.
All or part of the old ASDCashGenerator site appears to be redirecting to the domain name of ASD2Day.com. In 2009, the ASD2Day site was registered with Cruz listed as the contact person at an address in Florida that state investigators had tied to a major insurance scam. Although Cruz now is listed as the registrant of the ASDCashGenerator site, the ASD2Day site is registered in the name of another individual.
In October 2009, the PP Blog published a story about the ASD2Day site, which was making odd claims about the state of the ASD litigation a year after the federal seizure of Bowdoin’s assets and assets linked to Golden Panda Ad Builder, an autosurf implicated by the U.S. Secret Service in the ASD probe.
ASD2Day.com claimed, among other things, that ASD could not be a Ponzi scheme because the script employed by the autosurfing firm could not be programmed to permit a Ponzi scheme to occur. It also made a puzzling claim that U.S. District Judge Rosemary Collyer was on an Aug. 28, 2009, deadline “to determine if the US Attorney General’s case against ASD should move forward.” (Also see this story and comments thread.)
Collyer was on no such deadline. In January 2010, Collyer issued a forfeiture order that awarded $65.8 million seized from Bowdoin’s bank accounts to the U.S. government, which is using the seized money to compensate victims of ASD. In July 2009, Collyer issued a forfeiture order for more than $14 million linked to Golden Panda, ASD’s one-time purported “Chinese” option.
The ASD ad that featured Needham’s image also made a veiled reference to Golden Panda.
A section of the ad read, “OPENING IN CHINA[:] July 2008.”
Undercover agents from a Secret Service/IRS task force began to investigate ASD and Golden Panda on July 3, 2008, according to court filings. The court process of seizing cash linked to both entities began on Aug. 1, 2008, with the issuance of seizure warrants.
It appears to be the case that all old ASD Cash Generator affiliate links, including the links in the ad that featured Needham’s photograph, now load the new ASDI webpage at the old ASD Cash Generator URL.
Claims made about Club Asteria are under investigation by Italian authorities. Club Asteria first slashed payouts to members then reportedly suspended them for 60 days. The firm also reportedly has had its PayPal account frozen.
Like ASD, Club Asteria was promoted on Ponzi scheme forums such as TalkGold and MoneyMakerGroup.
In a video dated July 8, a Club Asteria executive claimed the firm had “a philanthropic foundation both domestically and internationally where we help causes all over the world.”
Among the claims in the video, which appeared online after Club Asteria reportedly suspended payouts, was this one:
“We donate cows and pigs and water buffaloes and camels to help families all over the world.”
Virginia-based Club Asteria trades on the name of the World Bank. Members said payments came from an entity known as Asteria Holdings Limited (Hong Kong) — before the payments stopped.
One of Club Asteria’s principal concerns, according to a new video, is children.
Investigators long have fretted that some promoters of online business “opportunities” simply race from fraud scheme to fraud scheme, collecting commissions for introducing others to “programs” that prove to be scams.
Like the now-collapsed AdViewGlobal (AVG) autosurf, Club Asteria has blamed its reported problems on members. AVG had promoters and members in common with Bowdoin’s ASD, which the Secret Service described as a massive international Ponzi scheme.
Among other things, AVG plucked the heartstrings of members by telling them that the company was interested in saving the rain forest.
A Virginia-based company that trades on the name of the World Bank and claims to help lift some of the poorest people on earth out of poverty by involving them in an income and MLM-like recruitment scheme has suspended member cashouts, according to posts on Ponzi scheme and criminals’ forums.
If the news about Club Asteria is true — and the company is not confirming it on its news webpage — then the firm may be following the AdViewGlobal (AVG) autosurf into the darkness virtually two years to the day after AVG suspended cashouts after collecting an unknown sum of money and declaring member payouts never were guaranteed.
Club Asteria, according to chatter on infamous Ponzi forums such as MoneyMakerGroup, did not call its decision not to pay members a suspension. Rather, the firm described it as a “decision to accumulate revenue share disbursements for the next 30 to 60 days.”
Members have claimed in promos for months that Club Asteria provided a “passive” investment opportunity and that earnings were guaranteed. The company itself has implied as much, according to promotional materials. Club Asteria is under investigation by Italian authorities, and confirmed in May that its PayPal account had been frozen.
After the PayPal freeze, which involved an unspecified sum of money, Club Asteria slashed its weekly payout rate to less than 1 percent and urged members to use offshore payment processors.
Like AVG, Club Asteria blamed negative developments on its own members. The firm does not publish verifiable financial data, and members say payments come via wire from an entity known as Asteria Holdings Limited in Hong Kong.
Why a Virginia-based company would route money through an apparent Hong Kong-based subsidiary to both U.S.-based members and international members never has been clear. Some members have published spreadsheets and ads that state plainly or imply that Club Asteria members can count on earning $400 a week for a payment of $19.95 a month, with earnings projected at a rate of 10 percent a week.
Other members have claimed Club Asteria pays 3 percent to 4 percent a week, numbers that project to a return of between 156 percent and 208 percent per year. References to a “passive” earnings opportunity with guaranteed payouts gave rise to questions about whether Club Asteria and its members were selling unregistered securities as investment contracts.
Meanwhile, the presence of promotions and “I got paid” posts on infamous Ponzi forums led to questions about whether Club Asteria had come into possession of funds tainted by one or more Ponzi or fraud schemes.
When AVG collapsed two years ago this week, the firm said it was retooling and would make an 80/20 program mandatory upon relaunch. Club Asteria, whose domain name appears to have been registered on June 25, 2009, reportedly incorporated an 80/20 program into its business model upon its launch in 2010.
Club Asteria’s domain, according to web records, was registered on the very same day news about the collapse of AVG surfaced. On June 30, 2009 — five days after its collapse — AVG’s name was referenced as an iteration of Florida-based AdSurfDaily in a racketeering lawsuit filed against ASD President Andy Bowdoin.
Bowdoin was arrested by the U.S. Secret Service for wire fraud, securities fraud and selling unregistered securities in December 2010. In August 2008, prior to the launches of both AVG and Club Asteria, tens of millions of dollars were seized from Bowdoin’s 10 personal bank accounts by the Secret Service.
It is believed that ASD, AVG and Club Asteria had promoters and members in common.
In the online Ponzi world, 80/20 programs are used to minimize cash outflow and disguise the nature of the programs. Club Asteria members preemptively have claimed the firm was not operating a Ponzi, a highly dubious claim given that the company does not publish audited financial information and that members — perhaps particularly members from Third World countries, countries ravaged by war or countries governed by dictators or strongmen — likely lacked the means or ability to visit Club Asteria’s U.S. headquarters to examine the books in person.
NOTE TO READERS: Some of the evidence federal prosecutors have in the Ponzi scheme case against AdSurfDaily President Andy Bowdoin is coming into clearer focus. The PP Blog expects to publish a report within the next couple of hours.
Our report is based on an affidavit originally filed under seal by the U.S. Secret Service in February 2009, during a time in which some ASD members were promoting a purported “offshore” autosurf known as AdViewGlobal — even after the August 2008 seizure of tens of millions of dollars from Bowdoin’s bank accounts amid wire-fraud and securities allegations.
The affidavit builds on earlier affidavits and paints a picture of a worried Bowdoin at the helm of ASD — and of astonishing corruption and deceit within ASD leading up to the summertime seizure nearly three years ago.
Instead of pulling the plug on his crime before investors were ruined, Bowdoin ramped up the criminality and sought to sanitize it, going so far as to trade falsely on the name of the President of the United States and permit others to do so, according to the Secret Service affidavit.
Much of the information in the affidavit never before has been published, although it was previously known that Bowdoin allegedly tried to tie ASD to the White House to disarm skeptical investors and keep the firm’s money wheel greased.
Here is a verbatim snippet from the affidavit:
“Hand-written notes that Bowdoin prepared in about December 2006 (which were recovered in August 2008, during a search warrant at Bowdoin’s home) show his and his silent partner’s awareness of the risks of the auto-surf program they were conducting. Bowdoin’s notes indicate that he told his silent partner that the partner should have made him better aware of those risks ‘knowing regulators were on the prowl for surfing sites.’”
Translation: Bowdoin knew at least 18 months prior to his June 2008 trip to Washington to receive the “Medal of Distinction” that ASD was playing with fire.
The “medal” was not a presidential acknowledgment of Bowdoin’s business acumen. Rather, it was a “marketing” memento from the National Republican Congressional Committee, according to the affidavit.
And the affidavit also spells out other things Bowdoin allegedly knew while he was touting Presidential recognition of his business career. (We’ll write about those things in the upcoming story.)
The February 2009 affidavit was prepared in part to seize more than $413,000 held in the bank accounts of certain ASD members from Iowa — and also to seize more than $310,000 in the bank accounts of two other ASD members: one from Florida, the other from Missouri.
At least $10,510 of the amount the government moved to seize was traceable to E-Bullion, according to the affidavit.
E-Bullion is a shuttered California money-services business whose operator, James Fayed, was convicted last month of ordering the murder of his estranged wife, Pamela Fayed, a potential witness against him.
Fayed faces the prospect of execution for the murder. The jury recommended the death penalty earlier this month. Formal sentencing is scheduled for September.
Get ready for some prosecutorial bombshells in the ASD case . . .
This post begins with background because the autosurf world, which is dominated by serial scammers, financial fraudsters and shadowy criminals, is about as murky as it gets.
On Aug. 1, 2008, tens of millions of dollars in the bank accounts of AdSurfDaily President Andy Bowdoin were seized. Federal prosecutors went on to say that Bowdoin, a recidivist swindler in his seventies, was conducting an international Ponzi scheme involving at least $110 million from the small town of Quincy, Fla.
ASD allegedly had more than 100,000 members.
Bowdoin was running the massive scheme through his 10 personal bank accounts and trading on the name of the President of the United States to sanitize the fraud, prosecutors said in a forfeiture complaint.
A federal magistrate judge in the District of Columbia, the nation’s capital and center of power, ordered the money seized by the U.S. Department of Homeland Security after reviewing a 37-page affidavit by the U.S. Secret Service and a 57-page evidence exhibit. Incredibly, though, some ASD members didn’t take the strong clues that the U.S. government had come to view ASD and others like it as a threat to to the nation.
The government made sure that the allegations and certain information about Bowdoin, including the fact that ASD was not his first brush with securities felonies and that he was partnered with a man implicated by the SEC in the 1990s in three prime-bank schemes, were available for wide distribution. The forfeiture complaint was published on the Internet in multiple places and was made available at no charge by the government.
Bowdoin reacted to the seizure by describing it as an act of “Satan” and comparing it to the 9/11 terrorist attacks. A message from Bowdoin on ASD’s answering machine claimed God was on the company’s side. Within days of the breathtaking seizure and a follow-up raid of company headquarters caught on camera by a local TV station, ASD members started pitching other fraud schemes, positioning them as ways to make up for ASD losses. The disconnect of ASD members was stunning.
They hawked cash-gifting schemes, HYIP schemes, cycler matrices and other autosurf schemes — often using an appeal to religion in their pitches and claiming the “programs,” unlike ASD, operated outside U.S. jurisdiction and thus insulated the players from prosecution. They made the claims despite the fact the “programs” were targeted at U.S. citizens and players were paid in U.S. dollars after using U.S. dollars to join the “programs.”
On Nov. 19, 2008, ASD lost a key court battle. A federal judge ruled that ASD, which had requested an evidentiary hearing, had not demonstrated it was a lawful business and not a Ponzi scheme. Instead of exiting the autosurf Ponzi “industy,” some ASD members next turned their attentions to an upstart “offshore” surf known as AdViewGlobal.
Which brings us to the reason for this post . . .
A woman who said she believed she was an AdSurfDaily investor entitled to restitution through the government remissions program administered by Rust Consulting Inc. told the PP Blog yesterday that she gave $5,000 to her sponsor, who converted the sum to cashiers’ checks made payable to a murky enterprise known as TMS Association.
The PP Blog referred the woman to the office of U.S. Attorney Ronald C. Machen Jr. in the District of Columbia.
But her transaction, according to the woman, occurred in April 2009 — eight months after the August 2008 seizure of tens of millions of dollars by the Secret Service in the ASD Ponzi case. ASD ceased operations after the seizure.
Although the woman apparently believed she was investing in ASD, her story strongly suggests that she actually was investing in AdViewGlobal (AVG), one of the so-called ASD “clones” that launched in the aftermath of the ASD seizure. TMS Association was a murky Arizona business linked to eWalletPlus, which reportedly was the in-house payment processor for AVG.
The woman, saying she believed she was an ASD victim, also said she believed she was entitled to restitution through the remissions program set up for ASD victims through Rust. Her remissions claim, however, appears to have been rejected because the program is for victims of ASD, LaFuenteDinero and Golden Panda Ad Builder, not victims of AVG.
“I am having troubles with the Ad Surf Daily Remission Administrator on getting the information that my checks I sent in that were endorsed to TMS Association were ‘linked’ to the Ad Surf fraud suit that is going on,” the woman asserted.
Facts surrounding TMS, eWallet Plus and AVG are exceptionally murky, and there is no remissions program for victims. It is believed that the U.S. government has opened a probe into the companies, and AVG was referenced as an extension of ASD in a 2009 racketeering lawsuit filed against Bowdoin by a group of ASD members seeking class-action certification.
At least three companies, including a penny-stock firm known as Vana Blue, have claimed to own eWallet Plus, which AVG also claimed to own. Also adding confusion are the presence of company names such as TMS Corp. USA LLC, TMS Corp., Karveck International and Karveck Corp. — all of which haven been referenced in the context of AVG.
The woman said she contacted the PP Blog because of its reporting on TMS Association.
AVG, which had close ASD ties, announced it was suspending cashouts two years ago this month. The surf was positioned as a remedy for ASD losses, amid claims it operated in Uruguay outside of U.S. jurisdiction. Its servers resolved to Panama, as did the servers for eWallet Plus.
One promo for AVG claimed that $5,000 turned into $15,000 “instantly.” Some ASD members have claimed Bowdoin was a silent partner in AVG and fronted the money to purchase eWallet Plus.
Although AVG purported to have no ties to ASD, it listed George and Judy Harris as its owners. George Harris is Bowdoin’s stepson. The AVG incongruities did not end there. Indeed, AVG’s graphics once appeared on an ASD-controlled website, an event that was bizarrely explained away as an “operational coincidence.”
Even as AVG was disclaiming ASD ties in early 2009, the person disclaiming the ties was a former ASD employee, Chuck Osmin, who testified on ASD’s behalf at an evidentiary hearing in 2008. Despite the claims, AVG listed its first chief executive officer as Gary Talbert, a former ASD executive who filed a sworn court affidavit on ASD’s behalf in 2008.
The woman’s claims, however, lead to questions about whether some AVG members are trying to use the ASD remissions program to cover losses in AVG, perhaps with encouragement of their upline sponsors
Among other questions raised by the woman’s claims is whether ASD sponsors who promoted for AVG despite the ASD seizure told the truth about ASD to their recruits or shielded them from the news, thus denying recruits information they needed to make an informed decision about joining AVG.
At the same time, the woman’s story leads to questions about whether AVG recruits denied the facts by their sponsors about the ASD prosecution tried to pressure their AVG sponsors for refunds when the truth became known — and whether the AVG sponsors are trying to cover their tracks by pointing their recruits to the ASD remissions program without disclosing that it is reserved for ASD, LaFuenteDinero and GoldenPandaAdBuilder victims only.
It is likely that any bids to mask AVG losses as ASD losses will fail because the government requires ASD members to certify themselves as crime victims and provide paperwork as proof of investment.
Based on the woman’s claims, it also seems possible that some AVG members may have been serving as unlicensed brokers and investment advisers by collecting cash or negotiable instruments from recruits, converting the money to cashiers’ checks and then sending the money to AVG.
If transactions such as that occurred, it leads to questions about whether AVG investors ever could prove they’d actually joined the program. If the accounts were not opened in their names and instead were opened in the names of sponsors who collected their money, there may be no proof at all that the recruit was the source of the funding.
Even if the AVG accounts were opened in the names of the recruits, it may be hard for a recruit to prove they provided the funds if the money was converted to cashiers’ checks and submitted to AVG by the sponsors
The extent to which AVG sponsors may be trying to game the remissions system is unclear. What is clear is that the woman’s story is yet another reminder that the universe in which ASD and other autosurfs operated was dark and dangerous to the purse strings.
We’ve previously noted that the Financial Industry Regulatory Authority (FINRA) has described the HYIP sphere as a “bizarre substratum of the Internet.”
That substratum now is getting crazier yet.
Three weeks ago, Club Asteria was a great darling of the Ponzi boards. But weekly payout rates that purportedly have been slashed — coupled with a purported freeze of Club Asteria’s PayPal account — appear to have put the “program” in a death spiral.
Club Asteria stopped short of announcing it had placed a call to the coroner, but did announce a “downward spiral,” according to a post on the MoneyMakerGroup Ponzi scheme and criminals’ forum.
Not to worry, though: Some Club Asteria promoters on the Ponzi forums have turned their attentions to JSS Tripler, whose site appears to be accessible through multiple domains, including a site known as JustBeenPaid (JBP).
JBP appears to be tied to something called Synergy Surf, which appears to be another darling of the Ponzi boards.
“I buyed (sic) new 8 positions for that,” a MoneyMakerGroup poster announced.
JPB encouraged enrollees to “[s]et up your AlertPay account and fund it, or link your credit card to it,” according to web records.
These instructions also were provided.
Upgrade in JBP by making your $10 or $20 payments.
Enter your AlertPay email address in the JBP Member Area.
Buy and/or sponsor downline members.
Study and apply ‘Upgrade Your Brain’ and the ‘Big Success Breakthrough’ — see ‘Access Our Products’ in your JBP member area.
Make JBP’s Synergy Surf (JSS) your primary moneymaker.
In the spring of 2009 — as the AdViewGlobal (AVG) autosurf was in its death throes before a fatal gurgle — the AVG braintrust pointed the finger of blame at the membership.
Other surfs that launched in the aftermath of the seizure of tens of millions of dollars from Florida-based AdSurfDaily did the same thing. These included AdGateWorld, which once referenced ASD in what appeared to be a copy-and-paste lift from ASD’s Terms of Service, and BizAdSplash, whose purported “chief consultant” was ASD/Golden Panda Ad Builder figure Clarence Busby.
Fast forward two years, and Club Asteria, which lists Andrea Lucas as managing director, appears to be doing the same thing — along with serving up some Busby-like syrup for the soul:
“Greed is a very powerful motivation, but the kindness, generosity and goodness in all of us all are even more powerful,” Club Asteria is reported on MoneyMakerGroup to have intoned.
“The challenges that we are facing recently have been caused by a small percentage of our members misusing their membership privileges,” Club Asteria is reported to have told members. “As any good company would have done to protect their members and future members, we had to reinforce our Code of Ethics and Conduct, to ensure that our message of a better life for all of us is presented honestly and accurately.
“We are working very hard to make sure that any benefit from Club Asteria and all of our products and services are accurately represented. Any company, no matter how good their products and services are, can be destroyed with misleading information, bad publicity, false rumors and inactivity of their members/customers.”
Two years ago, AVG’s death spiral began as the ASD grand jury was meeting in the District of Columbia. The surf first slashed payouts — something Club Asteria reportedly is doing right now — and then eliminated them altogether, while at once announcing an 80/20 program would become mandatory after AVG completed an audit of itself.
One of the issues complicating matters for AVG was the purported misuse of a member-to-member cash button. Club Asteria members also purportedly misused a money-transfer facility.
“Bizarre substratum of the Internet” just about covers it — except for the heartache and myriad nightmares created by the various HYIP darlings, of course.
Thinking Outside The Box
Our friends at RealScam.com report another nightmare in the making. It’s bizarrely called Insectrio — and it bizarrely has an “Egg” plan purported to pay 103 percent after one day, a “Larva” plan purported to pay 120 percent after five days and other plans advertised to pay even more.
The sales pitch for Insectrio, apparently an emerging HYIP, touts MoneyMakerGroup, TalkGold and DreamTeamMoney.
Given JBP’s prompt for enrollees to “upgrade” their brains — which we view as a prompt to think outside the box — the PP Blog concludes this post by providing readers an outside-the-box way to look at the Insectrio offer:
InSECtrio.
Indeed, the three letters centering the HYIP’s name are real attention-getters.
James Clark Howard: Source: Boca Raton Police Department
UPDATED 2:25 P.M. EDT (U.S.A.) In a complex case unfolding in Florida, the SEC has filed fraud charges against two companies that allegedly sold unregistered securities and conducted a $27.5 million “investment scheme” involving “purported commodities contracts.” A receiver has been appointed to marshal the assets of the murky businesses, which are known as Commodities Online LLC and Commodities Online Management LLC.
Millions of dollars generated in the scheme were moved to Mexico and the Netherlands even as the SEC was issuing subpoenas in the case last month, according to court filings. The agency described the transactions as “extremely suspicious.”
Although the SEC successfully halted the alleged Commodities Online scheme on April 1, the only defendants named to date are the companies themselves. The agency described the individuals presiding over the scheme — a former managing member and a vice president — as convicted criminals.
One of the individuals, according to the SEC, was a “convicted felon who was, in March 2010, charged with grand theft and organized scheme to defraud in conjunction with an unrelated Ponzi investment scheme.”
The other, according to the SEC, was an individual who “pled guilty to bank fraud and narcotics charges in 2005 and to transmitting a threat to injure charge in 2007.”
The PP Blog confirmed that, on March 5, 2010, the Boca Raton Police Department arrested James Clark Howard, who is listed as a “managing member” of Commodities Online LLC in documents filed with the Florida Department of State on Jan. 26, 2010.
Howard was charged with grand theft and organized scheme to defraud in a Ponzi case that may involve as many as five companies and their associates acting in concert to scam investors. Boca Raton authorities said the Florida Office of Financial Regulation also was conducting an investigation.
On Feb. 11, 2011, Louis Gallo was identified as a manager of Commodities Online Management LLC in records filed with the Florida Department of State. The Sun Sentinel newspaper reported that Gallo is “on probation for bank fraud and a cocaine charge out of New Jersey federal court.”
AdSurfDaily Member And Surf’s Up Mod Emerges As Figure In New Florida Flap
Other records show that, on Sept. 15, 2010, a Nevada-based company that listed former AdSurfDaily member and Surf’s Up moderator Terralynn Hoy as a “director” sued Howard and others in federal court in Fort Lauderdale. The Nevada company — SSH2 Acquisitions Inc. — alleged that Howard and the others were running a Ponzi scheme into which SSH2 had plowed $39 million.
Hoy, who has not been accused of wrongdoing, was a member of Florida-based AdSurfDaily, which the U.S. Secret Service said in August 2008 was conducting an international Ponzi scheme involving tens of millions of dollars. After the ASD seizure, Hoy became a moderator at the pro-ASD “Surf’s Up” forum, which mysteriously vanished in January 2010 after cheerleading nonstop for ASD President Andy Bowdoin for more than a year.
Bowdoin was the target of a federal criminal probe the entire time Surf’s Up operated, according to court filings. In November 2008, just days after a key court ruling went against ASD, the firm endorsed Surf’s Up as its mouthpiece.
By February 2009, Hoy became a conference-call host and moderator of a now-defunct forum that promoted the now-defunct AdViewGlobal (AVG) autosurf. AVG, which had close ties to ASD, launched in the aftermath of the federal seizure of more than $80 million in ASD-related assets, the filing of two forfeiture complaints against ASD-related assets and the filing of a civil racketeering lawsuit against Bowdoin.
On June 30, 2009 — one day after Bernard Madoff was sentenced to 150 years in federal prison for his colossal Ponzi scheme — lawyers suing Bowdoin for racketeering alleged that AVG was an extension of ASD. In September 2009, federal prosecutors made a veiled reference to AVG in court filings in the ASD case.
AVG disappeared in June 2009, about a month after the grand jury that ultimately indicted Bowdoin for wire fraud, securities fraud and selling unregistered securities as investment contracts began to meet. The indictment against Bowdoin was unsealed in November 2010, and Bowdoin was arrested in Florida on Dec. 1, 2010.
Surf’s Up was known for unapologetic, unabashed cheerleading for Bowdoin, whom prosecutors said had swindled investors in Alabama in a previous securities caper during the 1990s. Clarence Busby, an alleged business partner of Bowdoin and the operator of the Golden Panda Ad Builder autosurf, swindled investors in three prime-bank schemes in the 1990s, according to the SEC.
More than $14 million linked to Golden Panda was seized as part of the ASD case — and yet the cheerleading for Bowdoin continued on Surf’s Up. The forum labeled ASD pro-se litigant Curtis Richmond a “hero” after he accused the judge and prosecutors of crimes in 2009.
Richmond was associated with a Utah “Indian” tribe a federal judge in a separate case ruled a “complete sham” after it filed enormous judgments against public officials in performance of their duties. Regardless, the cheerleading on Surf’s Up continued — even after it was revealed that Richmond had a contempt-of-court conviction for threatening federal judges and had been sued successfully under the federal racketeering statute by the Utah public officials and was ordered to pay nearly $110,000 in penalties and damages.
Federal prosecutors now say they have linked ASD to E-Bullion, a shuttered California payment processor whose operator — James Fayed — is accused of arranging the contract murder of his wife, a potential witness against him in a fraud case. E-Bullion has been linked by investigators in the United States and Canada to multiple Ponzi schemes.
SSH2, the company that listed Hoy as a director, alleged in September 2010 that Howard was part of a Ponzi scheme that also involved Patricia Saa, Sutton Capital LLC and Rapallo Investment Group LLC.
Howard had been arrested by the Boca Raton Police Department in March 2010, about six months before SSH2 accused him in the September 2010 lawsuit of operating a Ponzi scheme. In the lawsuit, SSH2 said it had conducted business with the defendants from “early 2009 through March 2010,” and ultimately turned over $39 million.
Howard and the defendants, according to the lawsuit, told SSH2 it was trading in commodities and “would produce profits of 40% per month or more, while not risking any of the invested funds.”
SSH2 did not say in the complaint how it had come to believe that a return of 40 percent a month with no risk was possible. Nor did the company describe its efforts to conduct due diligence on Howard and the other defendants.
Of the $39 million directed at Howard and the other defendants, SSH2 received back approximately $19 million in “fake and fraudulent ‘profits,’” according to the lawsuit.
If SSH2’s assertions that it conducted business with Howard and the others beginning in “early 2009” and expected a return of 40 percent a month are true, it means that the business was being conducted in a period after which both the Bernard Madoff Ponzi scheme and the alleged AdSurfDaily Ponzi schemes were exposed.
Both Madoff and ASD bragged about returns that were far less than the monthly returns allegedly offered by Howard and the other lawsuit defendants.
Madoff’s fraud was exposed in December 2008, about four months after ASD’s alleged fraud was exposed.
And if SSH2’s assertions against Howard and the others are true, it also means the transactions occurred during a period in which Hoy, later to emerge as an SSH2 director, also was moderating forums for ASD and AVG and also was serving as a conference-call host for AVG, which purported to operate from Uruguay and enjoy protection from U.S. regulators because of its purported “private association” structure.
ASD’s Bowdoin initially ceded the money seized by the Secret Service in January 2009, dropping his claims to the cash “with prejudice.” By the end of February 2009, however, Bowdoin sought to reenter the case as a pro se litigant and renew his claim to the money, which totaled about $65.8 million.
Bowdoin’s sudden reappearance in a case he had abandoned coincided with a meeting AVG reportedly conducted with Karl Dahlstrom, a convicted felon. In March 2009 — in a letter posted on Surf’s Up — Bowdoin claimed he had decided to reenter the case after consulting with a “group” of ASD members. Bowdoin did not name the members, but chided federal prosecutors in his letter, writing that his pro se pleadings should “really get their attention.”
For the balance of 2009, Surf’s Up continued to cheerlead for Bowdoin, despite the fact he never told the membership at large about a second forfeiture complaint that had been filed against ASD-connected assets in December 2008. Bowdoin also did not inform ASD members that he had been sued for racketeering and had signed a proffer letter in late 2008 or early 2009 and acknowledged that prosecutors’ material allegations against ASD were all true.
Surf’s Up continued to operate even after prosecutors revealed the existence of the proffer letter. In Bowdoin’s own court pleadings, he had acknowledged he had given information against his interests to prosecutors. Bowdoin said he hoped to work out a deal by which he could avoid prison time, despite the fact prosecutors had alleged he was at the helm of a massive Ponzi scheme.
In October 2008 — at the conclusion of an evidentiary hearing ASD had requested — Surf’s Up conducted an online party for ASD members, complete with images of champagne and fireworks. Members were fed one-sided accounts of what had happened at the hearing, and a federal prosecutor was described derisively as “Gomer Pyle.” ASD’s lawyers were described as the “Perry Mason” team.
A month later — in November 2008 — U.S. District Judge Rosemary Collyer ruled at ASD had not demonstrated at the hearing that it was a lawful business and not a Ponzi scheme. The AVG forum led by some of the Surf’s Up mods, including Hoy, launched shortly thereafter, and the Surf’s Up forum soldiered on.
AVG was positioned as a way for members to make up their losses in the alleged ASD Ponzi scheme.
Surf’s Up became infamous for deleting comments and information unflattering to Bowdoin. The forum also was used to hatch a rumor that the prosecution secretly had admitted ASD was not a Ponzi scheme but was clinging to the case in a bid to save face.
As time progressed, dozens of pro se litigants attempted to intervene in the ASD case, claiming the government had no “EVIDENCE.” These filings occurred despite the fact that some of the evidence had been a matter of public record since August 2008.
Critics referred to Surf’s Up, whose formal name was the ASD Member Advocates Forum, as the AS[Delusional] forum. Various tortured explanations for Bowdoin’s conduct appeared on the forum, and there were calls for a “militia” to storm Washington, D.C., and for a prosecutor to be placed in a medieval torture rack. Prosecutors and federal agents were derided as “goons” and “Nazis,” and critics were derided as “maggots.”
The SEC’s Case Against Commodities Online
On April 1, the SEC filed an action against Commodities Online that alleged it was selling unregistered securities and operating a commodities fraud that had absorbed at least $27.5 million. Florida attorney David S. Mandel was appointed receiver.
“In connection with the unregistered securities offerings, the Defendants made numerous material misrepresentations and omissions regarding the nature of Commodities Online’s business model and operations, the risks and earnings associated with investing in its securities, and the background of its co-founder and vice-president,” the SEC charged.
“On December 15, 2010, Commodities Online announced on its website that ‘[t]o date, we have 32 contract offerings that have been completed for which our steadfast subscribers have been paid. The dollar total of these contracts is approximately $7.5 million and the payout was in excess of $8.5 million, producing an average earning of over 14.5%.’
“That statement was untrue,” the SEC charged. “There is no evidence to support this amount of investor return. In fact, Commodities Online’s bank records show a net loss for the companies associated with these promised contracts. Further, the company’s records show a net outflow of cash for each of these associated companies.”
By March 14, 2011, the SEC charged, Commodities Online had upped its number of purported successful contracts to 48. That claim also was untrue, the agency charged.
Referring to Howard but not naming him, the SEC said that the company “failed to disclose that in 1997, he was convicted of federal narcotics and firearms felonies and sentenced to 57 months in prison. The Defendants never disclosed his past criminal background to investors either through the Commodities Online website or any other company communication to investors.”
Referring to Gallo but not naming him, the SEC said that, in 2005, he “pled guilty in the United States District Court for the District of New Jersey to bank fraud and narcotics charges.
“In 2007, in the same court, he pled guilty to transmitting a threat to injure,” the SEC continued. “He is currently serving a three-year term of supervised release, which expires in July 2011.”
In a separate filing accompanying the complaint filed on April 1, the SEC said that Commodities Online “recently sent approximately $3.8 million to entities and individuals in Mexico and the Netherlands.”
Investigators deemed the transactions “extremely suspicious,” given that the transactions allegedly occurred between March 15, 2001, and March 25, 2011. The SEC said it issued subpoenas to the defendants on March 15, the same day the international transactions began to occur.
“[I]f this company doesn’t have sales, it’s not a viable company. Every company has to have sales that’s what makes this company work because the great business model, not because it has a lot of outside resources, but with that said we have a lot of things planned in the next weeks and months ahead. This will create lots more wealth for you.”— Federal prosecutors, quoting Golden Panda Ad Builder President Clarence Busby in August 2008 forfeiture complaint that seized $80 million in the ASD/Golden Panda Ponzi case.
“Our electronic wallet offered by our financial partners can make a great difference to you and your family. If you don’t utilize these programs and services and take advantage of everything that Club Asteria offers, you are not helping yourself. Our services are priceless — but only if you take advantage of them.
“We are privileged to work for you and we hope that you feel privileged to be part of our Club that is striving to make a real difference for you and the rest of the world. When the revenue sharing is announced each week, remember that we are doing our part to bring about the best services and products — you need to do your part as well to maintain the highest revenue sharing.”— Club Asteria announcement to members, April 2, 2011.
Members of Club Asteria, an online “opportunity” that trades on the name of the World Bank, purportedly issues member payments from Hong Kong and is promoted on Ponzi scheme and criminals’ forums as a “revenue sharing” business, now say that the club’s worldwide membership roster has swelled to more than 230,000.
A new wave of “I got paid” posts appeared on TalkGold and MoneyMakerGroup over the weekend, and promoter “manolo” announced that a “matching bonus” program had been extended through April. Separately, other Club Asteria members are seeking to drive business to the firm, which touts its relationship with offshore payment processors, by issuing press releases in multiple languages.
Google News has picked up a number of the releases in recent days, including one dated March 28 that touts a Miami-based promoter and claims “Club Asteria is exploding in every corner of the world.”
When clicked, a URL in the press release takes visitors to a text and audio pitch for Club Asteria. “Some members are making in excess of $20,000 US Dollars per month,” the promo claims in bold. Prospects who pay Club Asteria a fee of $20 to join as a “GOLD Member” are offered a coaching program that promises the “best tips and tricks that you WILL need to succeed with Club-Asteria!” according to the promo.
Google rejected an application by the PP Blog in June 2010 to become part of its Google News service. The PP Blog covers online fraud schemes and is written by a journalist with more than 20 years’ experience.
“[W]e’re unable to include it in Google News at this time,” Google advised the Blog. “We don’t include sites that are written and maintained by one individual.”
Some Club Asteria members say the company is based in the United States. Why payments purportedly are issued from Hong Kong is unclear.
Forum posts that declare “I got paid” have been associated with Ponzi schemes that spread virally on the Internet. Such schemes have used press releases to sanitize the business “opportunities,” and also have made use of “matching bonus” programs and offshore processors.
A March 30 sales pitch from a Club Asteria promoter claims the program “ia (sic) a basically (sic) Human Development Program.”
The pitch continues with an all-caps paragraph that purportedly defines what the program is not and includes 15 exclamation points.
“A CHANCE TO CREATE INCOME FOR LIFE…!!! YES…!!! INCOME FOR LIFE FINANCIAL FREEDOM…!!! CLUB ASTERIA EARN AND SHARE, NO SCAM, NO HYIP, NO PONZI, NO GET RICH QUICK SCHEME. EARN $ 400 EVERY WEEK FOR LIFE LONG. JUST A TRUE INVESTMENT AND A GREAT WAY TO EARN AND SHARE THE WEALTH WITH ALL THE PEOPLE OF THE WORLD. RUN BY FORMER DIRECTOR OF THE WORLD BANK ANDREA LUCAS. NOW CLUB-ASTERIA IS PRELAUNCH PHASE. GET ON NOW TO GRAB PRELAUNCH OFFERS…!!! JOIN NOW…!!!”
Preemptive claims that emphasize what a program is not also have been associated with Ponzi schemes.
The World Bank said last month that it once employed a person named Andrea Lucas, but that she left her job as a department head in Washington, D.C., in December 1986, nearly 25 years ago. Lucas was not a member of the World Bank’s board of directors, as hundreds — and perhaps thousands — of promotions for Club Asteria have implied.
Some Club Asteria members have identified Lucas as a former World Bank “Vice president” and “Chairman.”
Although Club Asteria has been promoted as a “passive” investment opportunity in which customers would simply register, pay a fee and earn money from the efforts of others, Club Asteria now appears to be trying to distance itself from those claims — while keeping the “matching bonus” program intact.
Claims that members can make money passively by simply paying a fee and relying on Club Asteria to generate profits leads to questions about whether the company and its army of affiliates are selling unregistered securities as investment contracts. On March 17, the company said that members who registered for its program and paid a fee were in position to “help the people of Japan” after last month’s devastating earthquake.
About two weeks later, Club Asteria suggested that members were overselling the earnings program and making false claims.
“The revenue will go up or down depending on how many members actively take advantage of utilizing and/or selling any one of our programs or services,” Club Asteria said in an April 2 note on its website. “If anybody has told you something different, they are mistaken and incorrect. We share our revenue that is earned by our membership. There is no guarantee. It would be impossible to guarantee this.”
Club Asteria members earned a payout of 4.01 percent last week, according to “akledba,” who was posting on the MoneyMakerGroup Ponzi forum in 36-point type.
“Wow, that is great,” replied MoneyMakerGroup member “strosdegoz.”
“I didn’t realize it was higher than last week,” strosdegoz noted. Below the post was a link for a program called “Exotic FX,” which bills itself a “PRIVATE ASSET HAVEN.”
MoneyMakerGroup is referenced in U.S. federal court filings as a place from which the alleged Pathway to Prosperity and Legisi Ponzi schemes were promoted. The schemes gathered more than $140 million, according to court filings.
Club Asteria did not say how much money it had collected as a result of purported misrepresentations by members or how members could be assured that the firm’s money stream was free of Ponzi and scam proceeds. The company does not publish verifiable financial data. Because the “opportunity” is being promoted on well-known Ponzi forums, it is possible that serial fraudsters have polluted Club Asteria’s revenue stream with proceeds from autosurf fraud schemes, HYIP fraud schemes, MLM fraud schemes, Forex fraud schemes, “arbitrage” fraud schemes and other forms of online fraud.
“Matching bonus” programs have been one of the hallmarks of online Ponzi schemes, some of which swelled to victimize tens of thousands of participants. AdSurfDaily, an “autosurf” firm that also was promoted on the Ponzi boards, routinely used matching bonuses to attract prospects. ASD’s membership ranks swelled to 120,000, according to promos for the firm, which now is accused of operating an international Ponzi scheme that gathered at least $110 million.
In 2009, a firm known as AdViewGlobal (AVG), which is said to have recruited 20,000 members in only weeks after the seizure of ASD-related assets, also used matching bonuses. One promoter claimed that $5,000 sent to AVG turned into $15,000 “instantly.” AVG also was promoted on the Ponzi boards.
AVG collapsed in June 2009. Private attorneys suing ASD President Andy Bowdoin in a racketeering case have referenced AVG in court filings. Federal prosecutors who brought both civil and criminal charges against ASD have made veiled references to AVG in court filings.
Recent promos for Club Asteria have made claims such as these (below): (NOTE: These are verbatim and are from multipe websites, all of which could be driving money to Club Asteria.)
“Earn a realistic $400 a week… PASSIVELY!”
“Discover How You Can Earn $400 Per Week Passively With No Sponsoring Requirement And How To Make Money Starting Now!”
“We help you become financially secure, YOU help others become financially free. We are restoring balance of financial equality.”
“Join Our TEAM and Earn $400 weekly for $20”
“Club Asteria” A site of “World Bank’s former Vice president Andrea Lucas”
“We all can be millionaires in 2 years if we can afford to invest N15,300 ($100). Thanks to ANDREA LUCAS, a former World Bank Director who established the investment outfit, CLUB ASTERIA.” (Continued below graphic.)
This Club Asteria promo, which trades on the names of Google, Yahoo, MSN and America Online, claims Club Asteria members earn $400 a week "passively." Such claims lead to questions about whether Club Asteria members are selling unregistered securities as investment contracts.
“Be 100% passive and still earn $400 weekly from Real/Legal/Safe Co.”
“Hi, club Asteria is founded by former world bank Chairman. running in 141 countries worldwide,21 years experience,its main aim is to eradicate poverty by giving micro-loans.If u pays $20 monthly for life-long by taking gold membership,you earn weakly $400 for lifelong from 19 th Month.No-referrals.But,If u refer one member, U get $9 monthly for lifelong.”
BULLETIN: The website of CenturionWealthCircle.com will not resolve to a server, and DNS data that appears in domain-registration info strongly suggest the site was suspended for spam and abuse.
BULLETIN: The U.S. Federal Trade Commission and the Canadian Competition Bureau have taken down an alleged ‘Yellow Pages” scam in which businesses in the United States and Canada were deceived into paying for unwanted listings in online business directories.
A Virginia-based company that trades on the name of the World Bank and claims to help lift some of the poorest people on earth out of poverty by involving them in an income and MLM-like recruitment scheme has suspended member cashouts, according to posts on Ponzi scheme and criminals’ forums.
