A promotional email sent today by the AdViewGlobal (AVG) autosurf hotlinks to servers from Forbes.com, the Washington Business Journal and The Business Review.
The email reproduced logos of the publishing companies, pulling the images off the companies’ individual servers and creating the impression that the companies were endorsing the controversial surf firm. URLs that identify the servers are contained in code hidden on the page. The code is visible when viewing the properties of the email.
Separately, individual AVG members used a Forbes logo and links to Forbes to promote the surf. AVG issued a news release through PR Newswire today, and Forbes published the PR Newswire feed. Forbes’ logo also appeared on a forum frequented by AVG members.
It was not immediately clear if Forbes, the Washington Business Journal and The Business Review had authorized use of their logos or the hotlinking, which consumes bandwidth at the expense of the companies.
In the email, AVG did not link to the PR Newswire URL for the news release. Instead, the surf linked to a Forbes URL that republished the PR Newswire feed.
AdSurfDaily (ASD), a surf firm with close ties to AVG, was accused last year of operating a $100 million Ponzi scheme from a former flower shop in Quincy, Fla. Promoters claimed that ASD President Andy Bowdoin had received a special award from the White House for business achievement, but Bowdoin actually was a convicted felon who received an award from the National Republican Congressional Committee for campaign contributions, prosecutors said.
Some ASD members also claimed Google had entered into a partnership with ASD, but the claim proved to be a click-fraud attempt in which ASD members were encouraged to click on ads so ASD could earn fees.
Meanwhile, AVG announced that it was ending a 200-percent, matching-bonus program on June 5, twenty-four days earlier than advertised. The surf previously told members the promotion would end June 29.
AVG has advertised matching bonuses as high as 250 percent. During a 200-percent promotion, a promoter claimed $5,000 spent with AVG turned into $15,000 “instantly!”
The surf purports to be headquartered in Uruguay, but today’s PR Newswire release carried a dateline of Tallahassee. The promotional email AVG sent said the email originated in Uruguay.
EDITOR’S NOTE: There are plenty of reasons to avoid the AdViewGlobal (AVG) autosurf, not the least of which is that the government views the autosurf business model as foundationally corrupt. Autosurf operators and promoters are subject to prosecution under federal securities, wire-fraud, mail-fraud, money-laundering and racketeering statutes, and the surfs typically operate as Ponzi schemes. They also are subject to prosecution under state laws.
Readers should not infer that numbered items in the Top 5 list below are ranked in order of importance. Some of the information below is being published for the first time today.
1. AVG may be operating as a “ghost” enterprise. Research suggests that AVG, which purports to be headquartered offshore, may be using at least one U.S.-based company to funnel money to itself through complex wire transfers. The owner of the company filed a corporate bankruptcy petition in 2004 for a separate company he owned. In 2005, the owner filed a personal bankruptcy petition, listing nearly $1.4 million in liabilities and only $3,500 in assets.
The 2005 bankruptcy petition listed the owner’s address as an apartment, specifically using the abbreviation “Apt.” The apartment address, however, appears to have been the address of a UPS Store that once operated as a Mailboxes Etc.
A former business partner of the owner committed suicide in 2002, after members sued the former partner amid concerns that a large sum of money was missing from a co-op venture. Prior to taking his own life, the man made inquiries about banking in Switzerland and the Caribbean, according to court filings.
One of the key selling points of AVG is its purported offshore location. The company claims to be headquartered in Uruguay. Its servers resolve to Panama. Regardless, the company has used “gmail” addresses from U.S. based Google to communicate with members and perform certain customer-service functions.
A company with ties to AdViewGlobal uses the address of this U.S. office building.
Research suggests a company with which AVG has a close association is headquartered in a modern office building in the United States. The building was constructed in 2003. Office functions and conferencing can be rented by the hour. Two large airports are nearby, and a major Interstate highway is situated one mile from the building.
We are declining to publish the address of the building or identify its specific geographic location. We have confirmed through public records and other sources, however, that the company lists an address at the building, that the business has made inquiries about international wire transfers and that two international financial-services companies have established a tie to AVG and blocked wire transactions because of the AVG tie.
2. Two forfeiture cases against AdSurfDaily and a RICO case are still active. AVG launched in the wake of two forfeiture actions brought by the government against assets tied to AdSurfDaily and a racketeering lawsuit brought against ASD by individual members. AVG has close family, management and promotional ties to ASD (see No. 3 below), and the multiagency federal probe into ASD’s business practices is ongoing.
It is known that the U.S. Secret Service, the Internal Revenue Service and the U.S. Department of Justice are involved in the investigation, and it is believed that the Federal Bureau of Investigation, the U.S. Postal Inspection Service and the Securities and Exchange Commission have at least peripheral involvement. At the same time, it is known that the office of Florida Attorney General Bill McCollum is involved in the probe, and it is believed that other Florida agencies also are involved.
It also is known that various state attorneys general, state banking regulators and state securities regulators have knowledge about the ASD case.
Your AVG sponsor or his or her upline sponsor could be a target of the ASD investigation, which means you could be doing business with a person the government views as a participant in a criminal enterprise. Forfeiture complaints were filed against assets tied to ASD in August and December. The government views ASD as a criminal enterprise. All money collected by ASD and all “profits” derived from ASD are viewed as the proceeds of a crime.
Meanwhile, the RICO complaint brought by ASD members in January alleged that ASD was engaged in racketeering with unnamed co-conspirators. Some of the alleged co-conspirators may have ties to AVG.
3. AVG’s “association” structure does not insulate it from prosecution. AVG has shifted to an “association” structure, apparently on the theory that the “association” approach can immunize members from prosecution for violations of state and federal law. Such associations may say their power is derived from the U.S. Constitution. They may publish statements that resemble a loyalty oath and frequently are associated with tax schemes. Even by the incongruous standards of the surf world, AVG is setting a new standard for weirdness.
The AV Global Association (AVGA) is now listing Judy Harris as its “First Trustee.” Harris, the wife of George Harris, replaces Gary Talbert in the role of “First Trustee.” George Harris, the stepson of AdSurfDaily President Andy Bowdoin, is the “Successor Trustee.”
What this means, literally, is that AVG is linking itself to Bowdoin family members identified by the federal government as the beneficiaries of illegal conduct by ASD, after earlier disclaiming any affiliation with ASD and during an active criminal investigation. What it means as a practical matter is unclear because the situation is so bizarre it almost defies description.
Talbert, who is not a Bowdoin family member but is a former ASD executive who filed a sworn affidavit on ASD’s behalf in the August forfeiture case, resigned suddenly March 20 as AVG’s chief executive officer. Three days later, on March 23, AVG announced its bank account had been suspended. AVG has never provided a clear explanation of either event. Talbert’s name now has been removed as an AVG “Trustee.”
Property owned by George and Judy Harris, including a car and a home in Tallahassee, Fla., was seized in the December forfeiture complaint, which alleged the $157,000 mortgage on the Harris home was retired with illegal proceeds derived from ASD.
There has been no public action in the December forfeiture case since the filing of the complaint. Neither George nor Judy Harris has filed a claim to their home. Neither George nor Judy Harris has filed a claim to a car prosecutors alleged was purchased with illegal proceeds derived from ASD.
4. At least one proffer letter exists in the ASD case. In April, in their final response to a series of responses to Andy Bowdoin’s pro se pleadings in the forfeiture case brought in August, prosecutors revealed that Bowdoin had signed a proffer letter. Proffer letters sometimes mean that the one who proffers is willing to provide the government information that is helpful in the prosecution of others.
Bowdoin never told ASD members about the proffer letter. Nor did he tell them about the December forfeiture complaint, which includes extremely specific allegations. Bowdoin waited until March to tell members he had decided in January to submit to the forfeiture of tens of millions of dollars seized in the August complaint.
Bowdoin’s first public comments on his January decision to submit to the forfeiture came in the form of a Bowdoin letter published in March on the pro-ASD Surf’s Up forum. In the letter, Bowdoin triumphantly announced he had changed his mind about submitting to the forfeiture — while ignoring the fact that he never told members about the December complaint or his January forfeiture decision. In essence, Bowdoin blamed his former paid counsel for the trouble he was in and said the federal government was prosecuting ASD illegally.
In his letter, Bowdoin chided federal prosecutors, saying his pro se pleadings “should really get their attention” and urging members to write to President Obama, members of Congress and Fox News personality Glenn Beck.
At 74 — and a convicted felon from a 1990s securities scheme in which 89 separate instances of fraud were alleged in Alabama — Bowdoin urged his supporters to tell anybody who cared to listen that he was a victim of an out-of-control government. In July 2008, just days before the government seized tens of millions of dollars from ASD, Bowdoin plunked down nearly $50,000 to purchase a new Lincoln, according to the December forfeiture complaint.
A month later he sent his Alabama victims a check for $100, according to the St. Petersburg Times, a Pulitzer Prize-winning newspaper. The Lincoln alone cost more than the remaining restitution due the Alabama victims.
Even though Bowdoin told ASD members in March that he would hold a conference call soon to explain what was going on, the conference call never materialized. And Bowdoin still has not told members about the proffer letter he signed.
5. General confusion about AVG. One AVG member observed that the firm’s explanations about its business practices have been about as clear as “mud.” Among the current issues are a failed attempt last week by the company to launch a new website, a denial by a company AVG said was facilitating offshore wire transfers that it had any business relationship with AVG, confusion about AVG debit cards and why some AVG members seem predisposed to cheer for the company as though members were taking part in a religious revival.
Loyalists, meanwhile, continue to maintain that AVG members have a duty not to talk about the company in public, insisting that members adhere to “association” rules.
Some AVG members say they want to use a spreadsheet to educate prospects about potential earnings, but others say spreadsheets are one of the things that led to trouble for AdSurfDaily. At the same time, members are trying to stop other members from using the word “investment” when discussing AVG, apparently believing that calling AVG an “advertising” company instead of an “investment” company somehow would insulate AVG from the prying eyes of the government.
Such attempts at forced wordplay not only provide no protection, they also provide evidence of what investigators call “consciousness of guilt.” Indeed, there would be no reason to insist on the forced use of language if promoters didn’t recognize the legal danger they were in — and calling AVG an “advertising” company does nothing to change the simple fact that AVG and surfs that use similar models are vulnerable to charges of selling unregistered securities as investment contracts. The surfs cannot pass a simple test (“The Howey Test”) that became a threshold securities test and litigation benchmark 63 years ago, in 1946, when Harry Truman was President of the United States. The Howey case was on the books 15 years prior to the 1961 birth of Barack Obama, the current President, and 23 years prior to the first moon landing in 1969.
In recent days, some AVG members have been reluctant even to mention the name “AdSurfDaily,” instead referring to the embattled surf with close AVG ties as the “company.” The paranoia is palpable.
One problem with paranoia — and it is a problem AVG is experiencing — is that it does not translate well among people who have no reason to be paranoid. Many entry-level surf participants, for example, don’t understand that they’re being recruited into a wink-nod enterprise. They ask reasonable questions, but are met with paranoid responses and prompts to be less open and more secretive, which only accents the paranoia among those who know there actually is something to be paranoid about — chiefly, that virtually all autosurfs operate as Ponzi schemes and that the government could shut them down without warning at any moment.
One AVG member instructed “international” members of AVG to insert “NA” in a debit-card application when prompted to supply a Social Security number, an instruction that only heightens concerns about money-laundering and wire fraud.
A triumphant AVG announcement about a new debit card the surf intends to offer was met with a thud when some members found out later that the card came with a $30 fee. Loyalists, however, said members should embrace the fee because it creates a new profit center for the company. Other members are complaining that at least one of AVG’s debit cards seems to limit withdrawals to $100.
AVG promoters, meanwhile, continue to lean heavily on exclamation points — rather than straightforward speech — to make their case for the company. An announcement about an AVG conference call was accompanied by three exclamation points:
AdViewGlobal website launch scrubbed. Amid much fanfare, the AdViewGlobal (AVG) autosurf announced it would launch a new website Saturday — and to celebrate AVG would provide what it deemed an “unprecedented” 250-percent matching bonus for members and a corresponding 200 percent match for sponsors.
Problems dogged the launch and members grumbled. The new site appeared online briefly, but members said passwords no longer worked and that data seemed to be missing from the back office.
At least one graphic on the new site — a “walking fingers” logo to which the acronym “AVGA” had been added — potentially raises international trademark and intellectual-property concerns.
Beyond that, however, the use of the “walking fingers” logo commonly associated with “Yellow Pages” sometimes signals a scam. Selling “Yellow Pages” listings on the Internet to create the impression that customers have purchased an ad in well-known, local print publications is one variant of the scam.
Another variant is to send businesses a bogus bill for “Yellow Pages” listings. Because firms frequently purchase such listings and associate the “walking fingers” logo with legitimate print and online publishers, they often pay the bill without looking.
Yet another variant of the scam is to send what appears to be a small “refund” check to businesses for overpayment of a “Yellow Pages” bill. When recipients endorse the checks, they actually are entering into a contract and agreeing to be automatically billed for advertising purchases.
Although it has been reported that the “walking fingers” logo has fallen into generic use in the United States, companies that use it invite scrutiny from state attorneys general simply because there are so many scams involving the sale of “Yellow Pages” listings.
Moreover, “Yellow Pages” is a registered trademark of Telstra, an Australian communications giant. Telstra, as a means of protecting its brand, has been known to zealously enforce its intellectual-property rights and employs attorneys to guard against misuse on the Internet.
Unable to pull off its website launch, AVG reverted to its old site. Some members now say the 250-percent, matching-bonus offer has been replaced by a 200-percent offer that will run through June 29.
AVG and its members have engaged in some curious marketing practices. At least one promoter advertised AVG on a business-exchange website operated by Business Week magazine, by posting a link to a YouTube video for AVG.
In an article last year, Business Week reported on the seizure of AdSurfDaily’s assets, noting that video was one of the things that contributed to the expansion of ASD’s membership roster, before federal prosecutors seized the assets of ASD President Andy Bowdoin amid Ponzi allegations.
The AVG video on YouTube referenced in the promoter’s Business Week ad has been removed, but the ad itself remains.
A Florida man identified as a “Compliance” employee of the AdViewGlobal (AVG) autosurf was sued twice last year for not complying with federal laws in a business he owns.
Gerald Castor and his company, 1st Credit Solutions LLC of Bradenton, Fla., settled one of the cases last month. The lawsuit was brought in June 2008 by an employee who accused Castor of federal labor-law violations, alleging that workers were not paid wages at “time and one-half” for work in excess of 40 hours per week.
In a joint dismissal motion April 6 by the plaintiff and the defendants, the parties said the plaintiff had received “payment in full for all of her claims, including claims for overtime, liquidated damages and attorney’s fees and costs.”
The payment amount and the date of the payment were not disclosed. Mediation for the case had been set for June and was canceled. A judge did not review the settlement because the plaintiff acknowledged it was not a result of a compromise and that “all” of her claims had been met.
A second labor-law complaint against Castor and 1st Credit Solutions filed by a different employee was dismissed by a federal judge in March when the plaintiff did not follow up on the claim.
On March 23, AVG announced in a statement signed “The AVG Management Team” that its bank account had been suspended because too many members had wired transactions in excess of $9,500.
In a March 25 announcement under Castor’s name as a member of AVG’s “Compliance” department, the surf reported its banking problem was on the way to being “rectified” without explaining how the company intended to fix the problem.
Regardless, the company used a three-exclamation point headline — “AVGA Breaking News: Thanks and Good News!!!” — to report sales were brisk despite the problem.
“Tuesday member purchases continued to be good thanks to those purchases made with cash balances,†Castor’s announcement said. “We appreciate your continued cooperation and purchases through cash balances through the end of the week.”
The company then cited unspecified banking regulations, claiming changes in the regulations limited online purchases to $2,500.
Castor owns another Florida company — Living Legacy One LLC. Court records show that a process-server in the lawsuit against 1st Credit Solutions initially had trouble serving Castor, but eventually located him at the Bradenton building that serves as headquarters for both 1st Credit Solutions and Living Legacy One LLC.
On May 4, AVG announced its banking problems had ended as a result of a deal that would enable customers to wire money to an offshore bank to pay for AVG “advertising” purchases. Three days later, however, one of the companies AVG named as a facilitator of the transfers issued a public denial that it had any business relationship with AVG.
The company, KINGZ Capital Management Corp., said it had discussed business matters with Living Legacy One — but not AVG — and that it believed it had been targeted in a scam. AVG did not inform members about the denial. Rather, the surf said the sudden absence of a wire facility it had just announced came as a result of “negotiations” that had failed.
See an October 2008 court record from a federal lawsuit against Castor and 1st Credit Solutions in which a process-server reported initial trouble locating Castor, but later found him at the building that serves as headquarters for 1st Credit Solutions and Living Legacy One LLC, according to records in Florida.
See our March 25 story in which AVG, which purports to be headquartered in Uruguay, identifies Gerald Castor as a member of the “Compliance” department.
See April 6 stipulated dismissal of lawsuit against Castor and 1st Credit Solutions in which the plaintiff acknowledged she had received payment in full on her claims on an unspecified date.
See the annual reports of both 1st Credit Solutions and Living Legacy One LLC that were filed with the Florida Department of State by Castor on the same day — April 29, 2009.
See May 5 report on AVG’s May 4 announcement that it had a deal by which customers could pay for “advertising” purchases by wiring money to an offshore bank. The surf announced the deal on the same day the Obama administration announced it was cracking down on offshore fraud.
See May 7 report in which KINGZ Capital Management, a company AVG announced was involved in wire transactions for AVG “advertising” purchases, denied it had any business relationship with AVG. KINGZ said it believed it had been targeted in a scam, noting it had discussed business with Living Legacy One, not AVG.
KINGZ said it acted immediately to ensure no money would get to AVG via wire transfer.
Signs of the apocalypse? Some members of the AdViewGlobal autosurf are openly fretting that the company’s behavior could be a signal that all is not well.
But one AVG loyalist insists things are just fine and that AVG’s problems are being caused by the “greed” of people who know that the surf poses “a threat to their income stream.”
AdSurfDaily made a similar claim last summer, just prior to the federal seizure of its assets.
Just this morning, an AVG forum operated by some of the Mods and members of the Pro-AdSurfDaily Surf’s Up forum went on a delete-fest, nuking posts in which members purportedly shared information AVG deemed private.
Wire Flap
On May 4, AVG, which also is known as AVGA, announced it had a deal with an offshore bank to accept member deposits for the purchase of “advertising.â€
Three days later, one of the companies AVG said was facilitating the transfers to The Bank of N.T. Butterfield and Son Ltd., issued a public denial that it had any business relationship with AVG and said it believed it had been targeted in a scam.
AVG did not inform members of the denial by KINGZ Capital Management Corp., instead explaining the sudden removal of a wire facility it had just announced was a result of failed negotiations.
KINGZ, however, said it had never discussed business with AVG, but had discussed business with a Florida company known as Living Legacy One LLC. Living Legacy One lists its managing member as Gerald Castor, whom AVG once identified as a member of its “Compliance” department.
The implication of KINGZ’ claim was that AVG tried to create a backdoor route to funnel money to AVG through Living Legacy One. KINGZ said it acted immediately to prevent AVG from receiving any money via wire through its systems.
“Nothing has ever been accepted from [AVG], nothing has been — and nothing will be,†said Michael P. Krywenky, president and chief executive officer of KINGZ. “We are very shocked, and we’re appalled [by the AVG claims].â€
AVG’s claims were “extremely bizarre,†Krywenky said, adding that the company had started an investigation and was consulting with its attorneys.
New, Matching Bonus Program
Last night, AVG announced that it was offering an astonishing, 250-percent, matching- bonus program. The program also provides a mind-boggling, 200-percent match for sponsors. Under the math of the program, a member who paid AVG $1,000 would be credited with a purchase (and the earning power) of $2,500, and the member’s sponsor would be credited with a purchase (and the earning power) of $2,000.
Although the company said the program was implemented to celebrate the upcoming launch of a new website, some AVG members now are openly questioning whether the firm is having cash-flow problems and is trying to raise money quickly to forestall a disaster.
AVG’s move came on the heels of reports that it paid out higher-than-normal paper profits over the weekend, a possible indication that it was trying to paint a picture that all was well so members would be more inclined to throw money at the surf when the new, matching-bonus program was announced.
The surf simultaneously is promoting an “80/20” program. Such programs are designed to minimize cash outflows and keep money in the system.
An explanation of the company’s behavior left at this Blog yesterday by a member named “Chris” sounded very much like defenses for AdSurfDaily that populated websites last summer.
Here is part of what what Chris said:
“We do have outside revenue and therefore we do not need to use members money to pay for the incentives,” Chris said.
“Kingz Corp stopped all realtionships (sic) with us because they were being threatened with bad publicity if they continued. Now this cannot be proven and I know that is what your (sic) going to say, but their (sic) are those who do not like our advertising model and they want to see us shut down.
“The reason they want us shut down is because of greed!” Chris said. “They know we are a threat to their income stream and they don’t like it.”
People who questioned AVG management were hurting the company, Chris said.
“The truth is ASD was doing very well before they were shut down and now we are doing well and you can continue to battle us that’s ok, we can take it! We are not going to give up the fight! Google can make millions every day and no one bats an eye lash (sic).”
Chris said the fact ASD President Andy Bowdoin is not in jail demonstrates the government has nothing on him.
“Why is it that Andy is not in jail right now?” Chris inquired. “Mr. Maddoff (sic) is heading there. Why don’t they arrest Mr Bowdoin if he indeed has done a ponzi and taken peoples money? Why? Please explain that to me? I will tell you why, because they can’t. They can take the money and possessions but not Andy becuase (sic) they don’t have evidence of a ponzi scheme plot, people were getting paid, money was being distributed slowly but getting to the people nonetheless.”
The government has published an official notice that it intends to seek the forfeiture of 8 Gilcrease Lane, Quincy, Fla. — the home AdSurfDaily President Andy Bowdoin last was known to be living in.
U.S. Secret Service agents completed a “post & walk” of the home last month, and the government now has advertised the pending forfeiture, according to documents.
Forfeiture.gov, the official government website for forfeitures, listed the property on Wednesday. It is unclear if Bowdoin was living in the home at the time. The Secret Service posting included a “Notice of Complaint” and a copy of the complaint against the property, according to court filings this week. The home was targeted for forfeiture in August. Prosecutors said it was part of the proceeds of a criminal enterprise.
Mystery Deepens As Pressure Mounts
Bowdoin has not responded to a racketeering lawsuit filed against him in January by three ASD members who seek class-action certification. The plaintiffs in the RICO case have said in court filings that they have been unable to perfect service of the complaint. Bowdoin’s former paid attorneys said in April court filings that his last known address was 8 Gilcrease Lane.
Why Bowdoin has not responded to the RICO complaint remains unclear.
The Gilcrease Lane home is in the name of Bowdoin/Harris Enterprises, which prosecutors said was a entity set up to permit Bowdoin and his wife, Edna Faye Bowdoin, to hide assets.
Prosecutors said George Harris, Edna Faye Bowdoin’s son and Andy Bowdoin’s stepson, helped his mother set up a bank account in the name of Bowdoin/Harris Enterprises last summer.
More than $177,000 in funds derived from ASD was deposited in the account on June 10, 2008. On June 23, 2008, Harris used more than $157,000 of the deposit to pay off the Tallahassee home he shared with his wife, Judy Harris, prosecutors said.
ASD Ties To AdViewGlobal
Harris is listed as a trustee for AdViewGlobal (AVG), a surf firm with close ties to ASD. The government filed a forfeiture complaint against the Harris home in December. Bowdoin never told members about the December complaint. In January, he submitted to the forfeiture of tens of millions of dollars seized in August, but again didn’t tell members.
In late February — at the same time Bowdoin resurfaced after more than two months of silence and began to file pro se pleadings in the August case without consulting with his paid attorneys — AVG introduced members to Pro Advocate Group, a company that says it can help people practice law without a license.
Bowdoin said in court filings that he changed his mind about submitting to the forfeiture. In March, he advised members through the Pro-ASD Surf’s Up forum that he had fired his attorneys and had changed his mind about giving up the money after consulting with a “group” to which he’d been introduced by ASD members.
Prosecutors countered by saying Bowdoin had signed a proffer letter in the case and had acknowledged to law enforcement that ASD had been operating illegally. The government did not disclose the contents of the letter or the date upon which Bowdoin had signed it.
Proffer letters sometimes mean the one who proffers seeks to minimize exposure while providing information helpful in the prosecution of others.
AVG’s prelaunch was under way on Dec. 19, the date prosecutors filed the second forfeiture complaint against assets tied to ASD. The assets included the Harris home, a building in Quincy for which Bowdoin had paid $800,000 cash, three automobiles (including one registered to Harris and his wife), an assortment of marine equipment and personal computers.
The December forfeiture complaint does not reference AVG, but a large section of the complaint details how Bowdoin allegedly started one autosurf site (ASD) and ported members owed money when the surf failed to a new site (ASD Cash Generator) — without telling new members their money was being used to pay off members of the original site.
One of the early promoters’ suggestions about AVG was that ASD accounts could be ported to AVG. If this occurred, in whole or in part, it would have reflected the process ASD used when morphing into ASD Cash Generator.
Although AVG expressly denied any affiliation with Bowdoin and ASD in a disclaimer published on its website, the company later announced in articles of association that Harris was a trustee. A previous announcement identified Gary Talbert as its chief executive officer. Talbert is a former ASD executive. AVG also listed Nate Boyd, whom ASD members described as a former ASD employee, as “protector” of the AVG association, which also is known as AVGA.
Meanwhile, the company issued a news release identifying Chuck Osmin, a former ASD employee who had testified on behalf of ASD last fall, as an AVG employee. Some Mods and members of Surf’s Up started a forum for AVG.
On March 20, AVG issued an announcement that Talbert had resigned as chief executive officer. On March 23, AVG announced that its bank account had been suspended. On May 4, AVG announced it had a deal that would enable members to pay for “advertising” via international wire transfer. Three days later, on May 7, one of the companies AVG had cited as being a participant in the transfers denied it had any business relationship with AVG and said it believed it had been targeted in a scam.
Oddity One: As first reported here yesterday, Andy Bowdoin had the exact same amount on deposit in three separate Bank of America accounts: $1,000,338.91.
Such an oddity seems impossible, if not deliberate. Could the $338.91 tacked on the end of all three sums be interest on individual deposits of exactly $1 million each all made on the same day — not long before the Aug. 5 formal seizure?
If so, why would ASD need three accounts containing precisely $1 million each opened on the same day?
Oddity Two: Back in January, this Blog made a video of AdViewGlobal graphics appearing in a webroom operated by ASD and then disappearing. Yesterday the YouTube system emailed us about a comment left at the video site by a person who identified himself as “AVGACompliance” and “Juan.”
Here is the comment left by “AVGACompliance” and “Juan” (italics added):
Please remove this video ASAP as you are using unauthorized material and this is part of our terms & service. If you don’t remove this information your account will be terminated.
Thanks
Juan
We did a quick search of videos about the AdViewGlobal autosurf, and found that the exact same comment signed by “AVGACompliance” and “Juan” had been left elsewhere at YouTube. We also noticed that AVG now appears to have its own officially endorsed video.
Assuming “AVGACompliance” and “Juan” have a real tie to AVG and that their aim is to make sure only the officially endorsed video gets shown on YouTube under the threat of an account termination at AVG, we have to wonder if “AVGACompliance” and “Juan” actually even watched our video.
We don’t have an account at AVG for Compliance to terminate. The title of our video is, “Ad Surf Daily Ponzi Scheme Tie To Ad View Global.”
So much about AVG is hard to explain. At one time, the surf said it had no ties to ASD, after prelaunch promoters for weeks did their best to tie together the two firms, even suggesting that ASD credits could be transferred to AVG.
AVG and ASD have common ties, common management and common promoters. Just last week AVG said it had a deal that would enable customers to wire money offshore to pay for “advertising.” Trouble was, a company AVG said was involved in the transfers said it had no business relationship with AVG, said the surf’s claims were false and added that it was conducting an investigation because it believed it had been targeted in a scam.
AdSurfDaily President Andy Bowdoin still hasn’t responded to a Jan. 15 racketeering lawsuit filed against him by three ASD members seeking class-action certification.
Meanwhile, Bank of America, a non-RICO defendant accused in the complaint of aiding Bowdoin and others in a fraudulent scheme, has added two additional attorneys who specialize in complex financial litigation to its legal team.
At the same time, Steven Berk, an attorney for the plaintiffs, has notified U.S. District Court for the District of Columbia that he has left the law firm of Chavez & Gertler and has started his own firm, Berk Law LLC of Washington, D.C.
Berk filed papers yesterday to ask the court to delay the due date until May 26 for the plaintiffs’ response to a motion to dismiss Golden Panda Ad Builder President Clarence Busby as a defendant in the case. The response had been due May 11, but Busby’s attorneys have agreed to a 15-day delay.
Like Bowdoin and ASD attorney Robert Garner, Busby was named a RICO defendant, amid allegations he engaged in racketeering with Bowdoin, Garner and unnamed others. Bowdoin is the sole named RICO defendant who hasn’t responded to the complaint.
Although he is an attorney, Garner filed a pro se pleading asking to have until May 22 to respond to the complaint. It is unclear if he intends to continue to represent himself or if he’ll retain counsel.
Busby, through his attorneys, said he should be dismissed from the RICO case because he already has settled a separate case filed by the government in August 2008.
Why Bowdoin hasn’t responded to the RICO complaint, which was filed in January and amended April 27, is unclear. He filed at least four pro se motions in the government forfeiture case in February and March and authored a special statement to ASD members released through the pro-ASD Surf’s Up forum that said other filings he planned “should really get” the attention of prosecutors.
Prosecutors, however, said Bowdoin had signed a proffer letter in the case and had acknowledged to law enforcement that ASD had been operating illegally. Proffer letters sometimes mean that the one who proffers is trying to minimize exposure while providing information that may help in the prosecution of others.
Bowdoin’s pro se litany began at the same time the AdViewGlobal (AVG) autosurf introduced members to Pro Advocate Group, a company that says it can help people practice law without a license. Pro Advocate Group is associated with Karl Dahlstrom, who was sentenced to 78 months in federal prison in the 1990s for securities fraud.
Securities fraud is one of the allegations cited in the government’s August forfeiture complaint against assets tied to ASD and Golden Panda. Both Bowdoin and Busby have had previous run-ins with securities regulators. In separate cases in the 1990s, Bowdoin was almost jailed in Alabama, and Busby was ordered in Georgia not to break securities laws after the SEC alleged he had pushed three fraudulent prime-bank schemes.
AVG has family and promoters’ ties to ASD. Bowdoin’s stepson, George Harris, is listed as an AVG trustee. The government filed a second forfeiture complaint against assets tied to ASD in December, implicating Harris and his mother — Edna Faye Bowdoin, Andy Bowdoin’s wife — in the ASD scheme.
Also in March, Andy Bowdoin appeared in a video for an upstart surf firm known as PaperlessAccess, which he positioned as a company that could help ASD members earn back funds seized by the government in August.
Bowdoin’s PaperlessAccess video went missing after only a few days, and Surf’s Up reported he had been misled by the company. While all this was happening, AVGÂ announced the sudden resignation of Gary Talbert, its chief executive officer and a former ASD executive.
Talbert’s March 20 resignation was followed three days later by an AVG announcement that its bank account had been suspended. Earlier this week, AVG announced that it had struck a deal that would enable customers to wire money for advertising purchases to an offshore bank, but a company AVG identified as the beneficiary of the funds — KINGZ Capital Management Corp. — issued a denial that it had any business relationship with AVG.
Michael P. Krywenky, president and chief executive officer of KINGZ, said the company was “very shocked” and “appalled” by the claims, noting that attorneys for KINGZ were monitoring the situation.
Krywenky said KINGZ believed a scam of some sort was under way at AVG.
AVG yesterday ignored Krywenky’s denial, instead issuing a statement that advised members it was looking at other wire “options” and expected to announce “additional funding solutions within the next 2 weeks.”
Late last month, the plaintiffs in the RICO case alleged that ASD had hired the “majority” of the staff of Bank of America’s branch in Quincy, Fla., as ASD employees, paying the Bank of America employees more than other ASD employees doing the same work.
One of the plaintiffs’ arguments was that Bank of America knew its employees also were working for ASD and should have detected that the company was up to no good.
Bowdoin promised ASD members in March that he would have a conference call to update members. The call never occurred, and Bowdoin has not explained why he has not responded to the RICO complaint.
After announcing Monday that it had a deal for members to purchase “advertising” beginning Tuesday through international wire transfers, the AdViewGlobal (AVG) autosurf now says it had no such deal.
Rather, the surf said in a note signed “AVGA Management,” negotiations were “ultimately unsuccessful.” AVG did not explain how a deal described as completed — up to and including instructions and account numbers for customers to use — had suddenly become the casualty of unsuccessful negotiations.
The explanation may not sit well with members — and it may not sit well with KINGZ Capital Management Corp., which expressly denied yesterday that it had any business relationship with AVG and said it believed it was a victim of a fraud attempt.
AVG announced Monday that customers could wire money to The Bank of N. T. Butterfield and Son Ltd. Customers were provided instructions to list KINGZ as the beneficiary and given KINGZ’ account number.
The AVG claim came to the attention of KINGZ President and Chief Executive Officer Michael P. Krywenky, who said yesterday the claim was false and that KINGZ was conducting an investigation.
“KINGZ Capital Management Corporation nor any of its affiliates have any relationship with AdViewGlobal,†Krywenky said. “Also, I have already confirmed with our bank in Barbados that we are NOT accepting any funds from anyone at, or any clients of, AdViewGlobal.â€
AVG did not address Krywenky’s denial or even tell members about it.
Here is what AVG, which also is known as the AV Global Association or AVGA, told members (italics added):
“Wire Transfer Option: The wire transfer option in the member back office has been disabled. The negotiations were ultimately unsuccessful. We apologize for any inconvenience this may have caused our members. Please be aware that we have identified multiple options that will better serve our members and AVGA. These new options will be less cumbersome as well as more cost efficient. We expect to announce the additional funding solutions within the next 2 weeks.
“Thanks and have a wonderful weekend.
“AVGA Managementâ€
Krywenky said yesterday that KINGZ believed that a scam of some sort was under way at AVG.
KINGZ , he said, had discussed services with a firm known as Living Legacy One LLC.
Public records show that a corporation by that name was registered in Florida April 18, 2008, and filed an annual report on April 29, 2009. Living Legacy One LLC lists Gerald Castor as its managing member.
AVG, in a March announcement to members concerning the suspension of its bank account, identified Gerald Castor as an employee of its “Compliance†department.
U.S. regulators say autosurf companies sell securities but call themselves “advertising†companies to avoid scrutiny by agencies such as the SEC. In recent months, autosurfs have been highlighting purported “offshore†locations, and some promoters say the surfs can hide members’ income from the IRS and “shelter†them from the SEC, the FTC and state attorneys general.
Describing himself and KINGZ as astounded by AVG’s claims, Krywenky said yesterday that attorneys for the firm were monitoring the situation.
“It’s extremely bizarre,†he said.
AVG members are complaining about low rates of return after the company, which purports to be an offshore “advertising’ service, promoted a 200-percent, matching-bonus offer for weeks — even after its bank account had been suspended.
At the “low” rates of return, some AVG members now say they’ll neither earn back the money they spent on advertising by viewing ads nor emerge with a profit through rebates.
Members also have complained about unclear explanations from AVG.
UPDATED 2:59 P.M. EDT (U.S.A.) Claims by the AdViewGlobal (AVG) autosurf that KINGZ Capital Management Corp. is aiding AVG in offshore wire transfers are false, and KINGZ has launched an investigation, the company’s top executive said in an interview this morning.
“Nothing has ever been accepted from [AVG], nothing has been — and nothing will be,” said Michael P. Krywenky, president and chief executive officer of KINGZ. “We are very shocked, and we’re appalled [by the AVG claims].”
Krywenky said the company was “astounded” when it received a call from Europe about the AVG claims.
“KINGZ Capital Management Corporation nor any of its affiliates have any relationship with AdViewGlobal,” Krywenky said. “Also, I have already confirmed with our bank in Barbados that we are NOT accepting any funds from anyone at, or any clients of, AdViewGlobal.”
Krywenky said KINGZ believed that a scam of some sort was under way. He noted that KINGZ had discussed services with a firm known as Living Legacy One LLC, but said he did not have details about the company at his immediate disposal.
A corporation by that name was registered in Florida April 18, 2008, and filed an annual report on April 29, 2009. Living Legacy One LLC lists Gerald Castor as its managing member.
Gerald Castor has been identified in AVG announcements as an employee of AVG’s “Compliance” department.
No money would make its way to the autosurf firm from KINGZ, Krywenky said.
“It’s extremely bizarre,” he said. “I am absolutely astounded.”
On Monday, AVG announced in a forum set up by Mods and members of the embattled AdSurfDaily (ASD) autosurf that AVG had secured a deal for members to wire money offshore to pay for “advertising.”
KINGZ was mentioned in the AVG announcement as one of the companies that would be involved in the transfers. AVG provided a KINGZ account number in its announcement, along with instructions for members to facilitate wire transfers.
“We’re in discussion with our lawyers,” Krywenky said.
AVG’s announcement came on the same day that the Obama administration announced it was cracking down on offshore tax cheats.
AVG has close ties to ASD. The U.S. Secret Service seized tens of millions of dollars from ASD President Andy Bowdoin in August, amid allegations of wire fraud, money-laundering, engaging in the sale of unregistered securities and operating a Ponzi scheme from Florida.
AVG purports to be headquartered in Uruguay. Gary Talbert, AVG’s chief executive officer and a former ASD executive, resigned suddenly on March 20.
In a March 23 announcement signed by “The AVG Management Team,†AVG said its bank account had been “suspended.” It blamed customers, saying they had sent too many wire transactions in excess of $9,500.
On March 25, an AVG announcement signed by Gerald Castor said AVG’s banking problems were being rectified.
Problems with an Arizona-based, money-service business known as eWalletPlus followed. Servers for eWalletPlus now resolve to Panama. Like AVG, the company claims now to be headquartered in Uruguay.
Promoters made AVG’s purported offshore location a big selling point since its inception a few months after the seizure of ASD’s assets.
AVG, which had been promoting a 200-percent, matching bonus offer — an offer that caused one promoter to exclaim that $5,000 turned into $15,000 “instantly!†— said it was working to rectify its banking problem.
The solution AVG said it had found — wiring money to an offshore bank — was not going to work, said Krywenky of KINGZ.
“I think that we may be victims of a scam here,” he said.
