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Tag: bank failures

  • AdSurfDaily/Golden Panda Figure Clarence Busby Jr. Filed Pro Se Lawsuit Against Bank, 1,000 ‘Does’; ‘Plaintiff Has No Knowledge Of The True Names And Identities Of Any Or All Of The Real Lenders’

    Even as bank failures and  foreclosures were piling up in Georgia last year, a man associated with at least four failed autosurf companies was filing lawsuits against mortgage companies and 1,000 “Doe” defendants amid claims he did not know the “true names” of the “real lenders.”

    Clarence Busby Jr. of Acworth, Ga., advised a Cobb County judge that it was “long standing black letter Mortgage law” from the 19th century that he should receive foreclosure relief from Quicken Loans, OneWest Bank, a service company and the “Does.”

    In January 2011, the defendants moved to have the cases removed to federal court in Northern Georgia and filed for dismissal. The dismissal was granted in March.

    A street address for Busby that appeared in both the county and federal filings corresponds with an address used by Biz Ad Splash NA LLC (BAS) in Georgia corporate filings dated May 13, 2009. BAS was an autosurf associated with Busby that went missing last year. Busby also was the president of Golden Panda Ad Builder, yet another autosurf, and a onetime business partner of Thomas A. “Andy” Bowdoin, the operator of the Florida-based AdSurfDaily autosurf.

    The address BAS used in the Georgia filings was a mail drop, according to records.

    Bowdoin was arrested in December 2010. The U.S. Secret Service said he had presided over an international Ponzi scheme that had gathered at least $110 million. Assets tied to both Bowdoin and Busby were seized as part of the ASD/Golden Panda probe, which also involved an autosurf known as LaFuenteDinero.

    Busby was implicated in three prime-bank schemes by the SEC in the 1990s and was enjoined from violating securities laws by a federal judge. An FDIC-insured bank that once held Golden Panda funds failed in April 2011.

    Georgia leads the United States in bank failures, with Florida nipping on its heels. Both states also are high on the list of mortgage foreclosures. Foreclosures tend to lower the value of surrounding properties.

    Busby has described himself in court filings as a minister and real-estate professional. The actions in Cobb County that were removed to federal court were filed pro se, meaning Busby acted as his own attorney.

    The defendants in the cases claimed Busby was seeking to “invalidate and/or void” in its “entirety” a $120,000 security instrument held on a property in Marietta, Ga.

    Records suggest the property has been bought and sold twice in recent months for wildly different prices.

    Among Busby’s claims in the Cobb County lawsuit was that the “true names and identities of any or all” of the “real” lenders, investors and others involved in his mortgage “were hidden from the plaintiff.”

    BAS, which purported to be headquartered offshore, entered the autosurf world in January 2009 — after the ASD, Golden Panda and LaFuenteDinero-related asset seizures.

    The entry of BAS began with the stern bang of a drum and a dire message in a promotional video: “The World Is In Crisis,” the video warned. “Turn On The News, And You’ll See. The Stock Market Is At A Record Low. Foreclosures Are At An All-Time High. Thousand’s (sic) Are Losing Their Jobs. Banks Are Closing. There Has To Be A Solution!”

    The dire bang of the drum faded, replaced by a riff from an organ. The riff grew frantic, building toward a crescendo. The video never said the tones were from a 1999 work by Fatboy Slim: “Right Here, Right Now.”

    Messages flashed in front of viewers’ eyes for more than a minute before the video announced the company’s name — BizAdSplash — and positioned the surf as the cure for all the economic misery in the world.

    “Biz Ad Splash Has The Answer,” it said. “The Plan Is Simple. Advertise Your Business, A Product Or Service, Introduce Others To The Value Of Advertising. View A Few Ads For A Few Minutes A Day. Earn Profits. It’s That Simple!”

  • Readers Digest To Declare Bankruptcy

    UPDATED 9:24 A.M. EDT (U.S.A.) “Life in These United States” now means that staid Reader’s Digest, hamstrung by debt during a recession and competing in an era unfriendly to print publications, will declare bankruptcy.

    The news comes on the heels of an announcement Friday by the FDIC that five more U.S. banks had failed, bringing the unofficial year-to-date total to 77. Only three banks failed in 2007.

    One of Friday’s failed banks — Dwelling House Savings & Loan — told the Pittsburgh Business Times that fraudulent automated transactions had drained $3 million (more than 21 percent of deposits) from the small institution. The bank had been warned after an inspection by regulators in 2004 to tighten its anti-money laundering practices in the era of cyber crime.

    Reader’s Digest said its filing will come in the form of a Chapter 11 pre-pack and that a majority of senior lenders already had approved the plan. Reader’s Digest said it elected not to make a $27 million interest payment due yesterday, but will emerge from the filing swiftly, having pared its debt from $2.2 billion to $550 million with the cooperation of lenders.

    “This agreement in principle with our lenders follows months of intensive strategic review of our balance-sheet issues to financially strengthen the company,” said Mary Berner, president and chief executive officer of the Reader’s Digest Association.

    After the company emerges from protection, it will be owned by senior lenders.

    Reader’s Digest now joins a long list of print publishers battered by circulation and advertising declines as the public’s appetite shifts from turning pages to clicking on a mouse for news and entertainment.

    Most Americans — and readers from all parts of the world — are familiar with the Reader’s Digest approach of condensing features and publishing staples such as “Life in These United States,” “All in a Day’s Work,” “Humor in Uniform,” “Quotable Quotes” and “Laughter Is The Best Medicine.”

    The company recently slashed payroll by 8 percent, but ad pages and circulation continued to decline even as the magazine was reducing costs.

    Despite the recession and unprecedented financial challenges, no prominent media brands and print titles have ventured into autosurf waters to boost revenues to save themselves or avoid a trip to bankruptcy court.

    Even though self-styled “professionals” who run surf sites insist is it possible to generate tens of millions of dollars of legitimate “advertising” sales practically overnight by installing a surf script and promising “advertisers” they’ll receive back all of their money and emerge with a profit by clicking on “ads,” legitimate companies won’t involve themselves in such schemes.

    Media companies with famous brands and enviable web traffic could crush amateur competitors by installing surf scripts and showcasing awards they’ve received from advertising and journalism societies — and even produce a roster of Pulitzer winners to woo prospects — but have chosen not to do so.

    It’s because business ethics actually exist — and it’s because they aren’t willing to lie to readers and advertisers or involve them in wink-nod ventures and Ponzi schemes.

    Not even to save themselves or to avoid a date with a bankruptcy judge.

    Federal prosecutors seized more than $65 million from Florida-based AdSurfDaily last year, a self-described professional advertising company operated by Andy Bowdoin.

    Prosecutors said ASD was engaging in wire fraud and money-laundering while operating a massive Ponzi scheme. Virtual Money Inc., a company that once provided debit cards for ASD, has been indicted on charges of helping a Colombian drug operation launder money in Medellin.

    The news means that some ASD members were using the same cards Colombian drug lords allegedly were using to launder money at ATMs in Medellin.

  • Two Friday Bank Failures Will Cost FDIC $212.5 Million

    Some of our readers have been following the AdSurfDaily case, which involved the seizure of nearly $100 million by the U.S. Secret Service amid allegations that ASD was running a Ponzi scheme while calling itself an advertising company.

    One of the roles of the Secret Service is to protect U.S. economic health and the health of the banking system. Some ASD members have been harshly critical of the agency for seizing the money.

    The criticism, however, is short-sighted, particularly in an environment in which banks are failing and personal wealth is plunging. The U.S. banking system is in troubled waters, a point driven home yesterday in twin actions by the FDIC.

    Two bank failures Friday in Georgia and Texas will cost the FDIC insurance fund a combined $212.5 million and bring the number of U.S. bank failures this year to 25. There were seven failures in 2007.

    The Georgia Department of Banking and Finance closed Haven Trust Bank yesterday. The FDIC was named receiver. Haven Trust was headquartered in Duluth, Ga.

    “To protect the depositors, the FDIC entered into a purchase and assumption agreement with Branch Banking & Trust (BB&T), Winston-Salem, NC, to assume all of Haven Trust’s deposits, including those that exceeded the insurance limit [of $250,000],” the FDIC said in a statement.

    Haven Trust was the fifth Georgia bank to fail this year. Its failure will cost the FDIC insurance fund $200 million.

    Meanwhile, the Texas Department of Banking closed Sanderson State Bank of Sanderson, Texas. The FDIC was named receiver. The agency entered into a purchase and assumption agreement with The Pecos County State Bank, Fort Stockton, Texas, to assume all of Sanderson State Bank’s deposits, including those that exceeded the deposit insurance limit.

    Sanderson State Bank was the second bank failure in Texas this year. Its failure will cost the FDIC insurance fund $12.5 million.