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Tag: AVGA

  • BULLETIN: FTC, Canadian Competition Bureau Take Down Alleged ‘Yellow Pages’ Scam; Case Reminiscent Of Failed 2009 Bid By AdViewGlobal Autosurf To Launch New Website With Purported ‘Listing Service’

    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.

     

  • PARTIAL LIST: Gold Nugget Invest (GNI) Just Latest Failed Scheme Promoted By AdSurfDaily Members; One Program After Another Pushed By Promoters Has Collapsed

    EDITOR’S NOTE: This list summarizes several programs pushed by members of AdSurfDaily, a Florida company implicated in an alleged $100 million Ponzi scheme. In some cases, the programs were pushed prior to the seizure by the U.S. Secret Service in August 2008 of 15 bank accounts linked to ASD or Golden Panda Ad Builder, one of the companies implicated in the ASD scheme. Each of the programs listed below came to a dubious end or continue to exist in an unclear, shadowy form. This list is presented in no particular order and does not include every HYIP/autosurf pitched by ASD members.

    UPDATED 3:16 P.M. ET (U.S.A.)

    Gold Nugget Invest (GNI): Collapsed Friday. HYIP. Government of Belize issued warning in November. Ownership hidden behind proxy. Business model unclear. Presented as betting arbitrage, but perhaps was involved in forex. Advertised payout of 7.5 percent per week. Possibly linked to European banking investigation. Changed rules on the fly. Still collecting money after “Re-organization.” Purportedly launched in October 2006, the same month ASD was preparing for launch.

    Genius Funds/Cash Tanker/Saza Investments: Pushed by ASD member “joe” in a post on the ProASD Surf’s Up forum just prior to collapse of GNI. CashTanker, which used a graphic depicting Jesus, now has tanked after advertising payouts of 2 percent a day. “joe” pitched GNI, Genius Funds, Cash Tanker and Saza Investments in an egg-themed promotion in which the word “egg” was used in domain names that redirected to the HYIPs. “joe’s” egg-themed domain that redirected to Cash Tanker now redirects to a program called PTV Partner, an HYIP that bills itself “The Ultimate High Yield Asset for your Financial Portfolio!” “joe’s” egg-themed pitch was based on the screaming notion that “ALL MY EGGS ARE NOT IN ONE BASKET. I MAKE $2000.00 A WEEK.” A street address for the egg-themed domains corresponds to an address in a federal lawsuit involving cell-phone trafficking.

    Regenesis 2×2: Matrix in Seattle area. Records seized by U.S. Secret Service in July 2009. Operators kept under surveillance for five weeks. Multiple search warrants issued. Discarded records found in Dumpster. Sold “commission centers” for $325. Touted itself the “THE ECONOMIC STIMULUS PLAN FOR YOU.” Site appears to have been registered behind a proxy in Europe. Jeffrey William Snyder, one of the individuals kept under surveillance, was a convicted felon on probation for a previous securities scheme.

    GoldenPandaAdBuilder: So-called “Chinese” version of ASD. Assets seized in two forfeiture complaints in ASD case. Operated by Clarence Busby of Georgia. Records in now-dismissed RICO lawsuit against Busby identified him as “Rev.” at least 120 times. Busby was implicated by SEC in 1990s in three prime-bank schemes that promised enormous payouts. Purportedly became Golden Panda president after going fishing with ASD President Andy Bowdoin in April 2008. Federal judge ordered forfeiture of more than $14 million from Golden Panda in July 2009. Busby now purported “chief consultant” of BizAdSplash (BAS). Ceased payouts in July 2009, after declaring “crisis” and claiming members were overpaid. Went offline. Returned online. Went offline again for about two weeks during 2009 Holiday season. Now back online.

    BizAdSplash (BAS): (Also see GoldenPanda entry above.) BAS launched in aftermath of seizure of assets in ASD/GoldenPanda case. Assets seized in civil complaints in ASD/GoldenPanda case total about $80.52 million. Clarence Busby purported to be chief consultant of BAS. BAS touted purported offshore registration in Panama. Georgia corporation records show version of surf’s name used address of UPS Store No. 2644 in Kennesaw, Ga.

    Noobing: Pitched as alternative to ASD after seizure. Noobing targeted deaf people. Deaf member says she reported Noobing to FBI and sheriff’s department in California. There are recent suggestions that deaf members also reported Noobing to SEC. FTC and attorneys general of Minnesota, Kansas and North Carolina joined in suing Affiliate Strategies Inc. (ASI), Noobing’s parent company, in alleged scheme offering guaranteed government grants from economic stimulus funds. Illinois now has joined the FTC action. Original lawsuit filed in July 2009. Like ASD, ASI owned a jet ski. Court-appointed receiver sold it at auction. Receiver performed a preliminary exam of Noobing’s records and determined surf was upside down by approximately $550,000. Noobing gathered money in aftermath of seizure of ASD’s bank accounts. Surf slashed payouts in early 2009, citing unclear ruling in ASD case. Site offline since FTC lawsuit, which did not name Noobing.

    DailyProSurf (DPS): DPS is a largely unknown and mysterious surf site registered by ASD President Andy Bowdoin in August 2006, about two months prior to the formal birth of ASD. Records suggest DPS operated prior to registration, although its ownership was unclear. (NOTE: The story in the DPS link in this paragraph also contains information on 12DailyPro and PhoenixSurf, two surfs sued successfully by the SEC.)

    AdVentures4U (ADV4U): Surf tanked in August 2009. Reportedly had more than 60,000 members. Members identified Steve R. Smith as owner. Smith also purported owner of venture called TradingGold4Cash. In confusing note to ADV4U members, Smith purportedly said his family received threats. Used ASD-like “rebates aren’t guaranteed” excuse upon payout suspension. Urged members not to contact payment processors. Site reportedly conducted business with hotmail address.

    CEP: Judicially declared Ponzi scheme. Smashed by SEC. ASD once advertised it accepted funds through CEP Trust, the payment processor associated with the CEP Ponzi scheme.

    MegaLido: Pushed by ASD members in aftermath of seizure of ASD’s assets and positioned as a safe, “offshore” alternative, MegaLido tanked late in 2008, during the Christmas season, a few months after the ASD seizure. MegaLido purportedly had 27,000 members. MegaLido might have had a tie to Instant2U, another surf that tanked during the 2008 Holiday season. “MegaLido Rocks!” one ASD promoter blared, noting excitedly that it paid 12 percent a day and “It’s Offshore!” Instant2U advertised 14 percent a day.

    Frogress: Pitched by ASD members in aftermath of seizure. Frogress tanked in January 2009, just after the Christmas holiday in 2008.

    DailyProfitPond: Another surf pitched by ASD members in aftermath of seizure. DailyProfitPond tanked in December 2008, in the days leading up to Christmas. One DailyProfitPond promoter said it was possible to start with $12 and turn it into $12,000. The “return” was listed as 150 percent over 30 days.

    AdViewGlobal (AVG or AVGA): Surf with ASD/Bowdoin ties. Formally debuted in February 2009, with a push from the now-defunct Pro-ASD Surf’s Up forum and ASD members. Tanked in June 2009 after collecting untold millions of dollars.

    Perhaps one of the most bizarre autosurfs ever to enter the “industry.” Switched to “private association” structure after reportedly meeting with felon convicted in a 1990s securities scheme. Cited U.S. Constitutional protection despite purported headquarters in Uruguay.

    AVG disclaimed any ties to ASD, despite fact its CEO was a former ASD executive who submitted a sworn affidavit in the ASD case. Issued news release disclaiming ASD ties; release was signed by an ASD employee who had testified in federal court for ASD in 2008. Said the fact AVG’s graphics appeared on ASD-controlled website was “operational coincidence.”

    Announced bank account “suspension” in March 2009, blaming it on members who wired too many transactions in excess of $9,500. Announced CEO resignation, saying CEO would remain in “accounting” department. Announced new wire facility as done deal in May 2009. Company it identified as wire facilitator issued public denial, suggesting AVG was trying to funnel money to itself through a shell company.

    Shell company operated by man with two large bankruptcy filings, including one in which an address listed as an apartment was the address of a mail drop. Purported AVG “compliance” department head was sued twice in 2008 for noncompliance with federal law. AVG claimed to own eWalletPlus payment processor. Actual eWalletPlus ownership far from clear. At least two people close to AVG money had spectacular bankruptcy filings. Andy Bowdoin, whom members later said was AVG’s silent head, was arrested for felony securities violations in the 1990s and entered guilty pleas.

    AdGateWorld (AGW): Now-defunct surf launched after ASD seizure. Later purportedly sold to interests in the “Middle East.” Claims cannot be verified. AGW linked to ASD member Jack Schrold, a Florida attorney once suspended from the Florida bar for misconduct. Schrold was sued successfully by the FTC for the actions of his credit-repair firm, and also was convicted separately of knowledge of the commission of conspiracy and wire-fraud. AGW announced its death as “End of Dream.” Blamed members in announcement: “This honest and legitimate approach using the advertising rebate model apparently did not meet the expectations of the herd mentality.”

    PaperlessAccess: Mysterious upstart surf. ASD President Andy Bowdoin appeared in a video for Paperless Access in 2009, after the ASD seizure. Video appeared online in March 2009 — during time frame in which AVG was announcing bank-account suspension and the departure of its CEO. PaperlessAccess positioned as way for ASD members to regain money seized by the government. Bowdoin did not identify the owners of Paperless Access, describing them only as a small group of people. Nor did Bowdoin mention that the government was establishing an ASD refund program.

    PremiumAdsClub (PAC): Tanked in February 2009. Members said it collected money right up to the end.

    AggeroInvestment: Had PAC ties. Advertised 60 percent a month, plus bonuses. Collected money to the bitter end.

    QBusinessSolution: Surf with purported ties to former ASD executive Juan Fernandez, who took the 5th Amendment in the ASD forfeiture case. # # #

  • UPDATE: Another Parallel To ASD/Golden Panda/AVG Emerges In Canadian Probe Of Manna Trading Corp. Ltd.

    Yesterday we reported that the British Columbia Securities Commission (BCSC) ordered penalties and disgorgement totaling $42 million in the case against Legacy Capital Inc., Legacy Trust Inc., Manna Trading Corp Ltd. and Manna Humanitarian Foundation.

    We reported several parallels to the ongoing investigation in the United States into the business practices of AdSurfDaily/Golden Panda Ad Builder and the AdViewGlobal (AVG) autosurf.

    Another parallel has emerged, and it is a significant one: Two of the principals in the Canadian scheme previously had been disciplined for banking or securities violations.

    Hal (Mick) Allan McLeod was disciplined by the British Columbia Superintendent of Financial Institutions in 2003 for violations of the Financial Institutions Act and ordered to “cease carrying on a trust or deposit business,” BCSC said.

    Citing the superintendent’s order, BCSC said two companies with which McLeod had served as a director — First Capital Trading & Financing Corp. and First Capital Credit Corp. — “took and kept funds from the public, and engaged in conduct that was deceptive and misleading.”

    David John Vaughan, meanwhile, “was disciplined by this Commission [in 1999] for engaging in an illegal distribution that had many features in common with the Manna scheme,” BCSC said. “Orders against him from that misconduct remain in force today.”

    In the 1990s, both ASD President Andy Bowdoin and Golden Panda Ad Builder President Clarence Busby had run-ins with securities regulators.

    Bowdoin pleaded guilty to felonies in Alabama and was sentenced to a year in prison. The sentence was suspended when he agreed to pay restitution. In August 2008, he sent his victims a restitution check for $100. One month earlier, in July 2008, nearly $50,000 in ASD funds were used to purchase a luxury Lincoln sedan registered in the name of Bowdoin/Harris Enterprises, prosecutors said.

    Florida now has revoked ASD’s corporate registration and dissolved the registration of Bowdoin/Harris Enterprises. Although both companies are involved in serious litigation that potentially affects thousands of people, neither company submitted required annual reports to maintain their corporate standing. Florida provided the companies a five-month buffer to file the required paperwork. Neither firm complied.

    In May 1998, a federal judge permanently enjoined Clarence Busby from violations of the Securities Act of 1993 and the Securities Exchange Act of 1934. Busby was ordered to pay $15,000 in disgorgement for ill-gotten gains he had received “from sales of interests in three prime bank schemes,” the SEC said.

    The SEC waived the penalty because Busby certified he was unable to pay, the SEC said.

    Busby and Bowdoin went on a decade later to form Golden Panda Ad Builder after discussing the surf on a Georgia fishing lake in April 2008. In July 2008 — just prior to the seizure of tens of millions of dollars from the bank accounts of ASD and Golden Panda — Bowdoin distanced himself from Busby after Busby’s run-in with the SEC became known publicly.

    The “cause and effect” of Bowdoin’s actions with Golden Panda never has been clear. For example, was Bowdoin really too busy to run Golden Panda with Busby — as Bowdoin suggested — or did Bowdoin distance himself from Golden Panda because he learned about Busby’s alleged SEC violations and feared the allegations could lead to a probe of ASD?

    Golden Panda surrendered its claim to more than $14 million in the U.S. Secret Service probe. Busby now is listed as the “chief consultant” to BizAdSplash (BAS), another surf — one that purports to be operating offshore.

    BAS suspended payouts earlier this year, and then announced a relaunch. The firm, according to its website, now is selling tiered “charter memberships” for as much as $10,000.

    A “Presidential” charter membership is priced at $10,000; an “Executive” charter membership is priced at $5,000. Two other tiered charter memberships — “Visionary” and “Pioneer” — are sold at $2,500 and $1,000, respectively.

    BAS has not updated the news on its website since Oct. 7, nearly three weeks.

    Canadian officials say the whereabouts of three of the respondents in the Manna probe who were ordered to pay huge financial penalties is unknown. McLeod, Vaughan and Kenneth Robert McMordie (also known as Byrun Fox) “have fled the jurisdiction,” BCSC told The Globe and Mail, in a story published this morning.

    The Royal Canadian Mounted Police have opened a criminal investigation, BCSC said.

    Like ASD/Golden Panda, AVG and BizAdSplash, the Canadian Ponzi schemers pushed debit cards to offload profits, BCSC said.

    “Manna fraudulently used the investments of later investors to fund the promised returns to earlier investors, to pay commissions to the affiliates and consultants, to invest in an online gaming business, and to buy real estate in Costa Rica,” BCSC said.

    Other traits the Canadian scheme and the alleged U.S. scheme involving Bowdoin, Busby and offshoot companies had in common include:

    • Secrecy. AVG, for instance, did not identify its executives, morphed into a “private association” and advised members not to share information outside association walls.
    • False information. Some ASD members repeatedly have asserted that the U.S. government has admitted ASD was not a Ponzi scheme. Other members have sent emails that suggest participants should not cooperate with the U.S. Secret Service.
    • Offshore venues. Both AVG and BAS, for example, claim connections to South America and Central America, leading to fears that money could be hidden.
    • Use of ‘common law’ in various writings. Some ASD pro se litigants have cited common law in court filings in defense of the surf. One apparent argument of the litigants is that all commerce is legal as long as there is is contract between two parties. In the Canadian case, some purveyors of the scheme pushed what authorities described as a “private common law spiritual trust.”
    • Efforts that can be viewed as intimidation tactics. AVG, for example, threatened to sue members who shared information and to file abuse complaints with the Internet Service Providers of participants who complained on online forums.
    • Purported ties to charitable entities. AVG, for instance, advertised that it supported the World Rain Forest Movement. In Canada, Manna advertised the Manna Humanitarian Foundation.
    • An MLM-style sales structure. All of the Canadian and U.S. entities sold the programs as multilevel marketing opportunities.
    • Earnings “compounding.” Both the Canadian schemes and the alleged American schemes encouraged members to keep money in the systems and employ compounding strategies to maximize earnings.

  • HYIP/AUTOSURF SHOCKWAVES: Regulators Order Canadian Ponzi Schemers To Pay Penalties Totaling $26 Million And To Disgorge Illegal Profits Of $16 Million; Case Has Parallels To AdSurfDaily And AdViewGlobal

    The British Columbia Securities Commission (BCSC) has ordered four respondents in a civil action to pay penalties of $26 million for operating a Ponzi scheme and to surrender $16 million in illegal profits.

    In forceful findings that may echo throughout the HYIP and autosurfing universe, BCSC said the schemers tried to skirt securities laws by selling a fraudulent HYIP currency-trading program in Canada through an MLM-syle operation while hiding behind “non-disclosure” agreements and operating in an environment of secrecy.

    AdViewGlobal (AVG), an autosurf firm with close ties to the alleged AdSurfDaily (ASD) Ponzi scheme in the United States, created a similar structure in which participants were advised to keep news within “association” walls and not to disclose information to outsiders.

    BCSC also found that the companies named in the Canadian complaint disseminated false information and used intimidation tactics in a bid to prevent participants from cooperating with authorities.

    “Because of those [non-disclosure] agreements, and because of false but intimidating statements made to them by the respondents, many investors refused or were reluctant to cooperate with the Commission’s investigation,” BCSC said.

    In recent weeks, some ASD members have circulated emails that suggested participants should not cooperate with the U.S. Secret Service in the ASD probe. During the summer, AVG, which had suspended member cashouts, threatened to sue members for sharing information with outsiders and also threatened to contact the Internet Service Providers of participants who complained on a company forum.

    In yet another similarity to the ASD case, some of the purveyors of the Canadian scheme also pushed what Canadian authorities described as a “private common law spiritual trust.”

    Some of ASD’s and AVG’s most ardent supporters have used similar phrasing and referenced common law in defending the surfs.

    BCSC minced no words as it laid out the penalties against Hal (Mick) Allan McLeod, David John Vaughan, Kenneth Robert McMordie (also known as Byrun Fox) and Dianne Sharon Rosiek.

    BCSC pegged losses at $13 million, saying the respondents “fraudulently distributed securities and made misrepresentations” through Legacy Capital Inc., Legacy Trust Inc. and Manna Trading Corp Ltd.

    The Canadian respondents also cited a tie to an entity known as the Manna Humanitarian Foundation.

    AVG, in promotional material, cited a tie to the World Rain Forest Movement in what some observers saw as a bid to sanitize the AVG business by linking it to a worthwhile cause.

    “At AVGlobal Association we believe we should go beyond the basics of ethical business practices and embrace our responsibility to people and to the planet,” AVG said on its website. “We believe this brings sustained, collective value to our members, our employees, our customers and society.”

    AVG announced a suspension of payouts June 25. It is unclear if any worthwhile cause ever received money from the company.

    A BCSC panel fined McLeod $8 million. Vaughan, Rosiek and McMordie were dispensed penalties of $6 million each. The panel also ordered each respondent, including the companies, to disgorge the $16 million the scheme obtained from investors.

    The suggested payout percentages of the Canadian entities actually were significantly lower than the suggested payout percentages of both ASD and AVG.

    “Manna promised investors 7 [percent]  monthly returns (later reduced to 5 [percent]), sometimes compounded,” BCSC said.

    ASD and AVG both promoted compounding. Some ASD members promoted returns of 365 percent a year, claiming $100,000 in ASD returned $1,000 a day.

    Similar to ASD and AVG, investors who became “affiliates” or “consultants” of the Canadian companies could bring in new investors.

    “When they did so, they earned a commission on the amount invested and a continuing share of the return on the new investment,” BCSC said.

    The private, common-law spiritual trust “was a mechanism Fox concocted ostensibly to avoid the application of tax and securities laws to investments in the Manna scheme,” BCSC said.

    BCSC pegged losses in the Canadian scheme at $13 million, saying as many as 800 people lost money.

    “They created a multi-level marketing structure to maximize distribution of the Manna securities,” BCSC said.

    “The respondents knew exactly what they were doing when it came to dealing with securities laws,” a BCSC panel said. “They were well aware of the requirements of the Act, and of the role of the Commission in enforcing the Act. They took numerous actions calculated to escape detection. They attempted, unsuccessfully, to construct the Manna scheme in a form that would fit within a specific exemption in the Act.”

    Authorities said the scheme was inexcusable.

    “Nothing strikes more viciously at the integrity of our capital markets than fraud, and this case represents a particularly aggressive and flagrant assault on the public’s confidence in our markets,” BCSC said.

    BCSC’s announcement followed on the heels of announcements Oct. 15 by the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission that they were targeting a Florida company that allegedly tried to hide behind a corporate registration in Panama.

    The actions by the SEC and CFTC expose the vulnerability of autosurfs that register as corporations offshore and arrange web-hosting overseas, but do not comply with securities laws of the United States and foreign countries in which they have a paper footprint or are not regulated in the foreign countries.

    The moves also demonstrate that U.S. securities regulators — no matter where a company arranges webhosting — intend to treat American owners who flout laws as issuers of unregistered securities, unregistered investment advisers and operators of unregistered foreign investment companies from inside the United States

    Named defendants in emergency actions filed Oct. 15 in U.S. District Court for the Middle District of Florida were David F. Merrick, Traders International Return Network (TIRN), MS Inc., GTT Services Inc., MDD Consulting Inc. and Go ! Tourism Inc.

  • TEA LEAVES: AdSurfDaily Case About To Come To A Head?

    EDITOR’S NOTE: Reading the tea leaves in court cases often is an iffy proposition, and there often is no way to know what will happen when. Readers are advised to keep those thoughts in mind when considering the information in this story.

    UPDATED 7:03 P.M. EDT (U.S.A.) Recent court filings suggest — although it is far from clear — that dramatic events could occur soon on at least three fronts in the AdSurfDaily case.

    Consider:

    • The government today added two prosecutors to its roster in the main civil-forfeiture case against tens of millions of dollars and real estate seized in August 2008 from ASD President Andy Bowdoin. Both new members of the team are experienced in criminal prosecutions, including appeals. One of the prosecutors has served in complex cases involving international banking and money-laundering, as well as cases involving the Federal Bureau of Investigation and the Drug Enforcement Administration.
    • A federal judge, noting that no claimants have stepped forward in a second forfeiture case filed in December 2008 and targeted at assets tied to ASD, now has ordered prosecutors to state their intentions by Nov. 6 on how they intend to proceed in the December case. Potential claimants included Bowdoin and his wife, Edna Faye Bowdoin, and her son, George Harris. Judy Harris, the wife of George Harris, also was a potential claimant, as was Hays Amos, a former ASD employee.

    The Harris home in Tallahassee was seized in the December complaint, as was a car registered to George and Judy Harris. Prosecutors said a mortgage of more than $157,000 on the Harris home was retired with illegal proceeds from ASD, adding that Edna Faye Bowdoin and George Harris worked together to establish a bank account into which ASD funds were deposited and quickly wired to a third bank to pay off the mortgage.

    Prosecutors said the account was opened June 10, 2008, at Capital City Bank, less than two weeks after ASD concluded a rally in Las Vegas at which Andy Bowdoin exhorted the crowd to internalize the thought of acquiring large sums of money.

    The account was opened in the name of Bowdoin/Harris Enterprises Inc. and was funded with an opening deposit of $177,900.12 from two ASD accounts at Bank of America.

    Less than two weeks later, the lion’s share of the money was used to retire the mortgage on the Harris home — a home for which the couple has not filed a claim.

    (Emphasis added in the paragraph below.)

    “On or about June 23, 2008, George Harris requested via a telephone call that an electronic wire for $157,216.79 be sent from his Capital City Bank account to Citi Mortgage Inc.,” prosecutors said. “The reference that Mr. Harris provided was ‘REF: PAYOFF JUDY HARRIS #XXXXXX2292.’”

    The clear implication from the language of the complaint was that money from ASD — money prosecutors said Andy Bowdoin had acquired through a wire-fraud and money-laundering scheme — had been used a second time to commit wire fraud, this time by George Harris with help from his mother, Bowdoin’s wife.

    Four members of the Bowdoin/Harris family were involved in one way or another in the transaction, with George Harris becoming a supplemental beneficiary and Judy Harris becoming the final beneficiary. The mortgage on the property was recorded in Leon County, Fla, as paid on July 11, 2008, with the filing of a “satisfaction of mortgage.”

    Another way to look at the transaction is that it put each of the principal members of the Bowdoin/Harris family at great risk of getting arrested and, upon conviction, going to prison.

    George and Judy Harris later emerged as “Trustees”  — and then the purported owners of the AdViewGlobal (AVG) autosurf. Bowdoin was the silent head of AVG, members said.

    AVG purported to he headquartered in Uruguay. It launched in the wake of the filing of both forfeiture complaints, and also the filing of a racketeering lawsuit against Bowdoin and ASD by individual members. The racketeering lawsuit first was filed in November 2008 in Florida — in the immediate aftermath of a major court ruling against ASD in which a federal judge said ASD had not demonstrated it was a legal business and not a Ponzi scheme at an evidentiary hearing last fall.

    Attorneys for the plaintiffs dismissed the case in Florida, and refiled it in the District of Columbia in January 2009. AVG formally launched in February 2009, despite all the litigation that had piled up around Bowdoin and the Bowdoin/Harris family.

    On Sept. 25, prosecutors made a veiled reference to AVG in a court filing in which they accused Bowdoin of trying to lie his way back into the August 2008 civil-forfeiture case after he had already submitted to the forfeiture in January 2009.

    Here, in its entirety, is the Sept 25 reference: (Italics added.)

    “Maybe Bowdoin mistakenly thought that he could con the government into believing that he was just a harmless, foolish old man. Ironically, after telling thousands of investors that he intended to build the world’s preeminent advertising company for them, in order to make them 100,000 millionaires, Bowdoin tries to con this Court, telling it that because he’s 74 and has a heart condition, any incarceration amounts to a death sentence. See Document #132 ¶8. Was he lying then, or now?

    “Or, it may be the case that Bowdoin never intended to plead guilty when he agreed to debrief, and was just buying time while searching for a different exit strategy that failed to materialize. Maybe Bowdoin thought that before the government brought its charges he (like some of his family members) could move to another country and profit from a knock-off autosurf program that Bowdoin funded and helped to start.

    “Or, maybe other attorneys Bowdoin employed, or ASD’s other promoters convinced Bowdoin that if he paid some of the fraud proceeds the government had missed to them (the money laundering as Mr. Murray reports), they could help to circle the wagons or otherwise do a better job than Akerman Senterfitt did when it tried to prove that free advertising was a true profitable sale and not a poorly disguised, and unsustainable, investment opportunity.

    “But what is clear from Bowdoin, himself, is that neither the government, nor Bowdoin’s experienced criminal defense counsel, ever told Bowdoin that it was reasonable for a defendant convicted of operating a $100 million wire fraud scheme to expect probation.”

    Three days later, on Sept. 28, prosecutors returned to court, filing a supplemental brief and a U.S. Secret Service transcript of an audio recording Bowdoin or a person who aided him posted online.

    (Italics added.)

    “Remarkably, Bowdoin even suggests to those members participating in the conference call that the money taken from his bank accounts and, supposedly, never constituting an investment, belongs, not to Bowdoin, but to the membership. It is clear that this con man cannot manage to keep his stories straight,” prosecutors said.

    Bowdoin’s claim in the transcript of the audio recording is at odds with his own court filings — filings in which he claims to be the owner of the seized funds. It is clear from the language prosecutors used in their supplemental filing that they now have the option of arguing that Bowdoin’s statement to the membership was tantamount to a confession that he was selling unregistered securities as investment contracts, not advertisements as he had claimed.

    In the hours that followed, some ASD members appeared to suggest in various emails that ASD members should not cooperate if contacted by the Secret Service.

    Given the nature and the content of recent filings from parties on both sides of the case, the ASD prosecution could be building to a crescendo. Prosecutors have many options, and appear to be preparing to use them — up to and including acting on the December forfeiture complaint at the moment that best suits their strategy.

    There could be dramatic developments — and surprises — ahead.

  • U.S. Employment Numbers Worst Since 1983; Social Security Takes A Hit From Discouraged Early Retirees; FDIC Seeks To Recapitalize In Wake Of Nearly 100 Bank Failures In 2009

    When the AdViewGlobal (AVG) autosurf — now failed — was in prelaunch phase in December 2008, it positioned itself as an offshore cure for what ails the U.S. and world economies.

    Less than two years earlier, promoters of the AdSurfDaily autosurf — which has close ties to AVG — implied that the individual surf accounts of ASD members were insured by the FDIC and that ASD provided “shelter” from the FTC and the SEC.

    ASD’s assets were seized by the U.S. Secret Service in August 2008, amid allegations of wire-fraud, money-laundering and selling unregistered securities via a Ponzi scheme. Only months later AVG began its ignoble task of encouraging members to move cash offshore and permit it to be managed by unknowns, thus separating participants from even more wealth.

    The result was a colossal failure AVG announced in June, before it disabled its forum to prevent members from asking uncomfortable questions. AVG even threatened members who shared the news with copyright-infringement lawsuits. Indeed, AVG went from a much ballyhooed cure to a thuggish disease that attacked its own participants in only weeks.

    Neither ASD nor AVG created any new wealth or cured anything. About the only thing the surfs managed to do was siphon wealth from one group and transfer it to another, all during a time a global recession was rearing its ugly head and putting jobs and lifetimes of hard work in harm’s way.

    The U.S. economy shed 263,000 jobs in September, and the unemployment rate edged up to 9.8 percent, the Labor Department said yesterday.

    Unemployment virtually has doubled since December 2007. The number of persons looking for work now totals 15.1 million, and the unemployment rate is the highest since June 1983.

    When discouraged workers and workers who’ve accepted part-time jobs in the absence of full-time employment are factored into the numbers, the so-called “real” unemployment rate is 17 percent. The number could be distorted — meaning the true employment numbers could be masked to a degree — because older workers separated from their jobs have been applying for Social Security, rather than continuing their struggle to find work when the odds are against them.

    The Social Security Administration told Bloomberg News that it had expected an increase of 315,000 applications for the one-year period ending Sept 30, but instead received 465,000, an increase of 150,000 applications.

    Meanwhile, regulators seized three more U.S. banks yesterday, bringing the year-to-date total to 98. Because the FDIC  is close to operating in the red, the agency is in the process of recapitalizing and has proposed a plan that would force banks to pay insurance premiums early to protect customer deposits, rather than pass along the cost of the recapitalization to taxpayers.

    “First and foremost, bank customers should know that their insured deposits have and always will be 100 percent safe, no matter what,” said FDIC Chairman Sheila Bair. “This commitment to depositors is absolute. The decision today (Sept. 29) is really about how and when the industry fulfills its obligation to the insurance fund. It’s clear that the American people would prefer to see an end to policies that look to the federal balance sheet as a remedy for every problem. In choosing this path, it should be clear to the public that the industry will not simply tap the shoulder of the increasingly weary taxpayer.”

    At risk, however, are banking profits when the industry already is struggling, but the FDIC insists that “banks overall have enough liquid assets to make the proposed prepayment.”

    U.S. regulators have not confronted a challenge of this magnitude since the late 1980s and early 1990s, when the savings and loan industry recorded 745 failures, in no small part due to fraud, mismanagement and regulatory laxity.

    Here is the bank-failure list so far in 2009:

  • AdViewGlobal Domains Offline

    UPDATED 8:09 P.M. EDT (U.S.A.)

    Two domains for the AdViewGlobal (AVG) autosurf will not resolve to a server.

    The domains are:

    • adviewglobal.com
    • startavga.com

    Why the domains will not resolve is unclear. The domains normally resolve to a server in Panama.

    As reported previously, a third domain associated with AVG — advglobal.com — also won’t resolve. This domain appears to have resolved to the United States at one time and appears to have been suspended for spam and abuse.

    AVG suspended cashouts June 25. In August, it said it had reported a theft of $2.7 million to state and federal authorities. AVG’s announcement about the purported theft occurred one day after AdSurfDaily President Andy Bowdoin announced in court filings that he was negotiating with federal prosecutors.

    AVG and ASD have close family, promoter and membership ties.

    UPDATE 11:55 A.M. The AVG domains still are offline. Their IP cluster in Panama is in the same range as the server that powers BizAdSplash (BAS), yet another controversial surf firm. The BAS domains are resolving.

    UPDATE 8:09 P.M. The adviewglobal.com domain and the startavga.com domain now are resolving to a server, although the members’ login page and the “Join” page are throwing a database error.

    The advglobal.com domain is not resolving to a server.

  • BREAKING NEWS: Judge Grants Bowdoin Request For More Time, As AdSurfDaily Negotiates With Prosecutors

    A federal judge has granted Andy Bowdoin more time to respond to an order to show cause.

    Judge Rosemary Collyer said Bowdoin and AdSurfDaily Inc. could have until Aug. 28 to show cause why its motion to reverse Bowdoin’s decision to forfeit tens of millions of dollars to the government should not be denied.

    The original deadline was Aug. 7. Bowdoin is the president of ASD. Prosecutors seized at least $65 million from Bowdoin bank accounts last year, records show.

    “It is hereby ORDERED that Claimants shall file a response to . . . [the] Order to Show Cause no later than August 28, 2009,” Collyer wrote in a minute order late this afternoon.

    ASD revealed in court filings yesterday that it had entered into negotiations with federal prosecutors.

    Charles A. Murray, Bowdoin’s attorney, advised Collyer yesterday that the negotiations “could result in an agreement resolving the matters in dispute either in part or whole.”

    A firm with a close family, membership and promotional ties to ASD — AdViewGlobal (AVG) — announced this morning that it had filed a theft report with state and federal authorities, saying $2.7 million had been embezzled from the firm.

    AVG identified two suspects, saying they once were affiliated with the eWalletPlus payment processor.

    In other news, the government announced it had perfected the forfeiture of more than $14 million from Golden Panda Ad Builder, another firm associated with ASD. Prosecutors said they intended to implement a restitution program for members who certified under oath that they were victims of a crime.

  • UNCONFIRMED: Harris Family In Uruguay, AVG Staff Fired

    Comments on this Blog from a poster who uses the username Luisa are working their way around the web, but we have not been able to confirm the claims.

    Among other things, Luisa said George and Judy Harris, whom AdViewGlobal (AVG) identified as its owners, are or were living in Uruguay and fired the Uruguay-based AVG staff of eight or nine employees July 20.

    “A fact: they moved to Uruguay with Judy’s mom (Barbara), brother (Joey) and his wife April,” Luisa said. “Rented house in a private neighborhood, bought cars, hired employees/rented office space, fired employees . . . what is going to be next step?”

    The AVG staff is owed money and was told the company was broke and that George and Judy Harris were not the owners — even though employees reported to George, Judy or Judy’s mother Barbara, Luisa said.

    “George and Judy claimed to be broke and no longer working for AVGA because of too many wrong doings on them,” Luisa claimed. “They went as far as saying they were not the owners AVGA . . .  As you see too many contradictions . . . ”

    No second source has emerged to confirm or deny Luisa’s claims.

    Luisa writes in comprehensible, slightly broken English, suggesting English is her second language. She may be in position to have specific knowledge about AVG, although her initial reports have not been verified independently.

    The comments come on the heels of an announcement by AVG yesterday that “unethical” members who misused a member-to-member cash button AVG itself provided are responsible for the company’s inability to announce findings of an audit the company is performing on itself.

    AVG suspended member cash-outs last month, exercising its version of a “rebates aren’t guaranteed” clause and saying an 80/20 program would become mandatory if and when the surf resumed payouts. Earlier this month AVG’s name was mentioned in a racketeering lawsuit against AdSurfDaily President Andy Bowdoin, although the company has not been named a defendant.

    Plaintiffs’ attorneys described AVG as the next iteration of ASD, listing managers and employees the two surfs had in common. George Harris is the stepson of Bowdoin. Property owned by George and Judy Harris — including a home in Tallahassee, Fla. — was sued for forfeiture by federal prosecutors in December.

    Prosecutors said the property was the proceeds of illegal conduct by ASD. Neither George nor Judy Harris has filed a claim to the seized property, according to federal court records.

    AVG has a history of blaming members for its problems and deflecting accountability from management to the rank-and-file. In the past, it has blamed members for the suspension of a bank account and threatened to sue members who shared information outside association walls — and even to contact their ISPs to suspend service of people who asked pointed questions about the company in forums.

    Yesterday’s announcement by AVG also blamed the delay in audit findings on unspecified “complications created by changes in payment processors.”

    “[D]on’t expect the ‘audit’ to be finish any time soon,” Luisa said. “[I]f you hear somewhere of a ‘staff’ in Uruguay, well as far as July 22, there is NONE.”

  • Two More Attorneys Added In RICO Lawsuit Against Andy Bowdoin; Move Comes On Heels Of AdViewGlobal Mention

    Plaintiffs suing AdSurfDaily President Andy Bowdoin for racketeering added two more attorneys to their roster this morning and have added a total of four since June 24. The plaintiffs now have attorneys in Washington, D.C., Phoenix, San Francisco and Mill Valley, Calif., on their side, perhaps with more formal notices of appearance to follow.

    Today’s move followed on the heels of a filing last week that cited the name of the AdViewGlobal (AVG) autosurf, describing it as the next iteration of AdSurfDaily and naming executives and employees the two surfs have in common.

    AVG has not been named a RICO defendant. It is unclear if the plaintiffs plan to add the surf’s name, but they have used AVG to illustrate an alleged pattern of racketeering. The plaintiffs seek class-action certification and treble damages in the ASD complaint.

    AVG has identified George and Judy Harris as its owners. George Harris is the stepson of ASD President Andy Bowdoin and the son of Bowdoin’s wife, Edna Faye Bowdoin. Judy Harris is the wife of George Harris.

    ASD attorney Robert Garner also is named a RICO defendant in the lawsuit. Bank of America is alleged to have aided and abetted a fraudulent scheme, but is not a RICO defendant.

    In recent days, AVG has closed its forum — a move made after the company said members were confusing other members. An AVG forum established by some Mods and members of the Pro-ASD Surf’s Up forum also has been closed, and Surf’s Up recently has deleted posts and content concerning AVG.

    As many as 30 ASD members are believed to be founders of AVG, which says it is a “private association” based in Uruguay.

    AVG recently has threatened to sue its members for sharing information outside the confines of the AVG “private association,” and also has threatened to sue media outlets that publish information its members share.

    Yesterday AVG implied in an announcement that it also might sue a subcontractor for not carrying out its contractual duties. Donna Rougeau, the subcontractor with Syndicate Digital of Canada, advised AVG members last week that she was leaving the firm.

  • EDITORIAL: AdViewGlobal Blames Subcontractor For Problems

    UPDATED 3:30 P.M. EDT (U.S.A.) It was utterly predictable: The AdViewGlobal (AVG) autosurf has blamed subcontractor Syndicate Digital for problems plaguing the firm, implying it might sue the Canada-based company.

    In recent weeks, AVG has threatened to sue media outlets and even its own members, up to and including contacting their Internet Service Providers in a pathetic bid to mute criticism.

    AVG’s record of blaming participants in the enterprise for its problems and accepting no accountability is rivaled only by AdSurfDaily. Syndicate Digital accepted work from AVG at great risk — and not simply a legal one: One of the biggest risks was that AVG would find a way to blame it for problems AVG itself created.

    That’s what Bowdoin/Harris enterprises do: If Bowdoin-led ASD gets in a pickle and can’t pay out as advertised, he blames Russian “hackers” and script problems and changes the website’s name so he can fleece a new crop of victims — all while he is using a fraudulent address to donate money to the National Republican Congressional Committee in ASD’s name while telling members ASD has no money.

    If the enterprise comes under fire by the government, he blames the government. When the enterprise gets stifled in bids to fight the government, he blames his paid attorneys and declares them incompetent. He then accepts advice from one or more felons and starts filing pro se pleadings, and when a federal judge tells him that a corporate entity can’t proceed pro se, he goes out and finds another paid attorney.

    When Bowdoin got sued and nearly jailed in Alabama a decade ago for another securities scheme, it was somebody else’s fault.

    AVG does the same thing. The surf announced in March that its bank account had been suspended. In the very first sentence of its announcement, it blamed members, saying they had wired too many transactions in excess of $9,500.

    In May, after it announced it had secured a new wire facility and published wiring instructions and account numbers, a company AVG identified as a facilitator in the transfers issued a denial that it had any business relationship with AVG. The company issuing the denial explained that it had discussed business with a Florida-based firm, and announced that it believed it had been targeted in a scam.

    The Florida-based firm was owned by an AVG insider. The clear implication was that AVG, which purports to be headquartered in Uruguay, had attempted to create a back-door route to funnel money to itself by using the banking connections of the Florida firm.

    AVG ignored the denial by the company.  Instead AVG blamed a breakdown in negotiations for the sudden removal of a wire facility it had just advertised and for which it had just provided detailed usage instructions.

    Now AVG is saying negotiations with Syndicate Digital have broken down, implying it might sue for nonperformace.

    “Negotiations between the owners of AVGA and Syndicate Digital broke down Thursday afternoon,” AVG told members.

    “Syndicate Digital was a sub contractor hired to do a specific job and there is some dispute as to whether or not they have completed their contract with AVGA,” the company said.

    Good grief.

    Syndicate Digital entered the lion’s den when it accepted AVG business. Lions within the den now are circling to devour a subcontractor who used poor judgment and did not ask the right questions, and it just so happens the Lions-In-Chief are George and Judy Harris, members of the Bowdoin family and one-half of the Bowdoin/Harris brand.

    This is a new low, perhaps an all-time new low. Donna Rougeau of Syndicate Digital should not have accepted work for AVG, and she should not have permitted her brand to become associated with AVG. Syndicate Digital and AVG became almost indistinguishable, and Rougeau was serving up the GIGO slop.

    But Rougeau did not cause the core rot that is AVG and now is being served up as the fall guy by people who call themselves Christians. It was, sadly, utterly predictable.

    Perhaps equally predictable was that AVG’s Syndicate Digital announcement would go missing — and it has, according to a reader.