PatrickPretty.com

Tag: Clarence Busby

  • 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.

  • NO AUTOSURF ENVY: Newspaper Circulation Plunges; Top Publications Hemorrhage Print Readers As Industry Looks To Harness Power Of Internet Advertising

    EDITOR’S NOTE: If you’ve been approached by individuals or a downline “team” and invited to join an online “surfing” program that purports to be an “advertising” company, this column may be of some value to you. Extremely well-known publishing companies — companies that produce titles you know and love, and companies that know advertising and business inside and out and through and through — are having trouble keeping readers’ eyes glued to print publications. Many of the famous companies have experienced serious revenue declines. Almost all of them have experienced spectacular print circulation declines even as actual readership was increasing. These famous companies are struggling to find ways to compete online and monetize their hugely popular websites, almost all of which get tremendous traffic.

    And yet none of them has turned to the so called “autosurf” model — even though the companies could crush “advertising” firms such as Florida-based AdSurfDaily, which is confronting allegations that it engaged in wire-fraud and money-laundering while operating a $100 million Ponzi scheme.

    Despite the fact these famous publishing companies have professional talent, audited readership, audited financials and the economies of scale to destroy so-called “advertising” firms such as ASD or BizAdSplash or AdViewGlobal — and scores of others — these companies do not position themselves against the surfs.

    Some of the surfs are collecting millions of dollars — if not tens or hundreds of millions of dollars — during a time the traditional publishing/advertising business is awash in a sea of red ink. All of the traditional companies could use the money autosurf participants are throwing at the surfs.

    Autosurf promoters would have you believe traditional publishing/advertising companies are struggling because the famous brands don’t understand the autosurf business model. Surf promoters position people such as ASD President Andy Bowdoin as vastly misunderstood geniuses and visionaries being picked on by the government. The surfs are positioned as cash cows for both the operators and members, and the “new” way to advertise.

    Promoters would have you believe that these celebrated publishing/advertising companies just don’t “get it” — and that the people promoting autosurfs in the hyped-up style of MLMs are the modern-day Henry Fords and Thomas Edisons — people who do get it.

    Surf promoters are unable to explain rationally why famous companies that could crush the surfs and take away all of their business — while delivering content that gives people a nonfinancial reason to visit highly professional sites and later share in hundreds of millions of dollars in revenue — have not leveraged their marketplace advantages and enormous volume of website traffic to make the companies and their readers rich by opening an autosurf.

    The reason is simple: The model as practiced in the so-called autosurf advertising “industry” is plainly illegal. It flouts securities laws, wire-fraud laws, mail-fraud laws, racketeering laws, banking laws, money-services laws and other laws — and the surfs try to sanitize it all by saying “rebates aren’t guaranteed,” which is just a contractual disclaimer designed to legalize theft.

    When reading the story below, keep in mind that each of the companies mentioned has advantages none of the surfs can offer, including some of the most highly talented writers, editors, designers and advertising-sales executives in the world — people who can deliver millions of eyeballs to websites and produce good results for advertisers both in product sales and branding.

    And yet these companies have not turned to Andy Bowdoin of ASD or Clarence Busby of BizAdSplash for guidance.

    Now, after this lengthy introduction, the story . . .

    Circulation at USA Today plunged 17.15 percent in the six-month period ending in September, compared to the same period in 2008, according to figures released today by the Audit Bureau of Circulations (ABC).

    Circulation losses experienced by the San Francisco Chronicle (-25.82 percent), the Star Ledger of Newark (-22.22 percent), the Dallas Morning News (-22.16 percent), the Boston Globe (-18.48 percent) and the New York Post (-18.77 percent) were even steeper, ABC reported.

    Elsewhere, the Houston Chronicle lost 14.24 percent of its print circulation during the period, and The Daily News (New York) lost 13.98 percent.

    Meanwhile, the Arizona Republic (-12.30 percent), the Cleveland Plain Dealer (-11.24 percent), the Los Angeles Times (-11.05 percent), the St. Petersburg (Florida) Times (-10.70 percent), the San Diego Union Tribune (-10.05 percent), the Chicago Tribune (-9.72 percent), the Detroit Free-Press (-9.56 percent) and the Pittsburgh Post-Gazette (-9.50 percent) also lost significant print circulation, ABC reported.

    The Post-Gazette explained today that much of its loss is attributable to an April decision to quit delivering the newspaper to certain outlying areas. The Post-Gazette says its website “remains the region’s most visited site.”

    Between the site and the print publication, the Post-Gazette reaches more than 1 million people every week, the newspaper reported.

    ABC’s numbers do not mean that actual readership of the publications is plunging. Many print-publishing companies have the dominant websites in their regions. And because the Internet has introduced the sort of immediacy once available only to TV and radio stations — and because print publications generally have larger news-gathering operations than their local competitors — the websites of newspapers and magazines have become enormously popular.

    What has not followed — at least not across the board — is an increase in revenues. Some famous print publications have declared bankruptcy, switched to an online-only model or a combination of online and print — or even folded.

    Print, in general, is struggling in every corner of the United States — and yet readership and reach never have been higher.

    Despite the advantages of readership, reach and talent pools autosurf companies only could dream about, there continues to be great stress in the worlds of publishing and advertising.

    No famous publishing house has adopted the autosurf model, even though promoters of the model would have would-be members/advertisers believe it is the magic cure.

  • BREAKING NEWS: AdGateWorld Announces ‘End Of Dream’; Surf Suspends Operations, Blames Members

    The AdGateWorld (AGW) autosurf has gone offline and has issued a statement that blames members for having unrealistic expectations.

    “The original developers of the AdGate network never created false expectations or gave rebates that were not completely justified by revenues,” AGW said. “This honest and legitimate approach using the advertising rebate model apparently did not meet the expectations of the herd mentality.”

    AGW did not explain why it felt the need to defend the purported previous ownership group, while blaming participants for the surf’s fate.

    AGW announced weeks ago that it was selling itself to an unnamed ownership group in the Middle East, although there was no way to confirm a sale had taken place. The announcement of AGW’s demise was equally vague, claiming that the surf had changed hands about 60 days ago, but not identifying either the new owners or the old ones.

    Jack Schrold, a Florida attorney and member of AdSurfDaily, was instrumental in the launch of AGW. Schrold once was suspended from the Florida bar for misconduct, has been prosecuted by the Federal Trade Commission for the actions of his credit-repair firm, and was convicted separately of knowledge of the commission of conspiracy and wire-fraud.

    The adgateworld domain name was registered Aug. 18, 2008, less than two weeks after the formal seizure of ASD’s assets. The adgateworld site at one time included ASD’s name in its Terms of Service. Schrold pitched ASD to members of the military.

    “Our ownership group purchased the AdGateWorld properties approximately 60 days ago,” AGW said in its shutdown announcement. “At that time we knew we were getting involved with a fluid situation and a very unique business model.  Unfortunately, we did not realize that other ‘similar’ sites continued to operate fly by night operations and dangle unreasonable bonuses and returns.”

    AGW appeared to make a veiled reference to AdVentures4U (ADV4U) or perhaps MegaLido — another failed autosurf – in its shutdown announcement.

    “No one cared because some other site was giving a ridiculous 14% a week until they collapsed after their supposedly record weeks!” AGW said.

    AGW did not explain how its model, which featured advertised payouts roughly in line with the 1 percent daily advertised by ASD, whose assets were seized last year by the U.S. government in a wire-fraud, money-laundering and Ponzi scheme probe, was any more legal. Nor did AGW explain how a relatively “low” payout percentage in comparison with other surfs was any more legal than a higher payout rate when the issues are the sale of unregistered securities in a Ponzi scheme environment, with wire fraud and money-laundering also potentially in play.

    Federal prosecutors view the lower payout percentage of some surfs as a bid to sustain the deception for a longer period of time so the “low” percentage surfs can rake in more money and fleece more people.

    AGW also did not explain how its purported offshore location made the surf any more legal when selling “advertisements” to U.S.-based customers when the government plainly views the product as securities sold as investment contracts.

    Two of the three so-called ASD “clones” — AGW and AdViewGlobal, which had close ties to ASD — now have failed.

    A third so-called clone, BizAdSplash, operated by ASD/Golden Panda Ad Builder figure Clarence Busby, has encountered severe difficulties and is conducting a relaunch, according to videos featuring Busby.

    Busby is a minister. One court document refers to him as “Rev.” at least 120 times.

    “Today may be the end of one dream but all of us will succeed in the exciting projects that will be introduced shortly,” AGW said in its shutdown announcement.

  • BizAdSplash Site Relaunch Delayed; Clarence Busby Does Not Explain Why, But Says ‘Instant Money’ Available Soon

    Although BizAdSplash (BAS) said last week that its new website would be up and running yesterday, the launch did not come off as advertised.

    A video featuring BAS “chief consultant” Clarence Busby appeared on the old site today, but Busby did not explain the delay in launching the new site. The video opened with Busby watching what he described as the new site in a computer monitor, as piano music played in the background.

    Busby then greeted viewers with a Mister Rogers-like “Hello there,” and proceeded to explain that exciting BAS developments were in the offing.

    Clarence Busby turns to address video viewers. The content visible in the computer monitor purportedly is the new BizAdSplash website.
    Clarence Busby turns to address video viewers. The content visible in the computer monitor purportedly is the new BizAdSplash website.

    By the middle of August, he promised, the company would show members how to make “instant money, very, very quickly.”

    Busby, who ceded more than $14 million to the U.S. government in a forfeiture case last year involving Golden Panda Ad Builder, his previous company, and AdSurfDaily Inc., implored customers to continue to believe in BAS. Busby did not mention Golden Panda or ASD. Nor did he mention his run-in with securities regulators who accused him in the 1990s of pushing three prime-bank schemes by promising returns of up to 10,000 percent.

    “None of the investors earned the exorbitant returns promised by Busby, the SEC said in May 1998, after U.S. District Judge Thomas W. Thrash ordered Busby not to break securities laws.

    “I’m not going to let anybody have a loss” in BAS, Busby said in today’s video. He claimed BAS already had paid out “over $2 million,” but did not say how much the surf firm had collected from customers since its launch early this year.

    “We need you to believe in us,” Busby said. “You’ll see why we’re excited. You’ll see why it’s important to hang on.”

  • BREAKING NEWS: Bank Of America Granted Motion To Stay Case In Which Plaintiffs Said It Aided And Abetted Racketeers Running Florida Ponzi Scheme From A Former Flower Shop

    A federal judge has granted a motion by Bank of America to stay a case in which it was alleged to have aided and abetted racketeers operating a Ponzi scheme from a former flower shop in Quincy, Fla.

    The bank was not named a RICO defendant in the lawsuit, which was filed by members of AdSurfDaily Inc. Rather, the bank was alleged to have aided and abetted RICO defendants Andy Bowdoin, Robert Garner and unnamed others in a fraudulent scheme.

    “The Bank has shown good cause for a stay,” U.S. District Judge Rosemary Collyer said in an order late today.

    “First, distribution of funds in the civil forfeiture case may moot at least a portion of Plaintiffs’ claims for monetary recovery here,” Collyer said. “Second, in the civil forfeiture case the government has seized numerous documents that are necessary for discovery in this matter.”

    Among other things, Bank of America argued that some people made money in ASD and that the government is sifting through records and has a plan to provide restitution to victims of the alleged ASD scheme.

    Collyer’s order stayed the RICO case indefinitely. A separate case against assets tied to AdSurfDaily filed by the government is proceeding on a separate track.

    It was a busy day for Collyer. First, the judge ordered Andy Bowdoin, AdSurfDaily Inc. and Bowdoin/Harris Enterprises Inc. to show cause by Aug. 7 why a series of motions filed by Bowdoin as a pro se litigant should not be denied.

    Collyer noted in the order that Charles A. Murray, a paid attorney Bowdoin had hired after Bowdoin was advised months ago that a corporation could not proceed pro se, has not followed up on initial pleadings.

    Neither Bowdoin nor Murray has followed up since May, Collyer noted. Bowdoin initially submitted to the forfeiture, formally asking the court for permission to do so in January and saying he would not open a new challenge for the money. Collyer granted Bowdoin’s request.

    About five weeks later, however, Bowdoin said he’d changed his mind about submitting to the forfeiture and began to file as a pro se litigant. In a letter published on the Pro-ASD Surf’s Up forum, Bowdoin blamed his initial group of lawyers for ineffective counsel, saying a “group” of members who had reviewed his case had recommended a different approach.

    Bowdoin proceeded as his own attorney, signing his first pro se pleading Feb. 25. At the same time, the AdViewGlobal (AVG) autosurf — which has close Bowdoin family, membership and promoters’ ties — said it was transitioning into a “private association.”

    Also today, Collyer issued an order that formalized the forfeiture of more than $14 million from Golden Panda Ad Builder, a firm associated with Clarence Busby. At one time, Busby was a RICO defendant in the lawsuit filed by the ASD members, but the plaintiffs dismissed the case against him.

    In court filings, Busby said Bowdoin unexpectedly asked him to form Golden Panda Ad Builder during a fishing outing on a Georgia lake in April 2008. In only weeks of operation — including prelaunch — Golden Panda rocketed to nearly 20,000 members.

    Just prior to the formal July launch of Golden Panda, members became aware that Busby had been implicated by the SEC in three prime-bank schemes that promised enormous returns during the 1990s. During the same time period, Bowdoin announced that he was too busy with ASD to serve as president of Golden Panda, saying Busby was uniquely in charge of Golden Panda’s operations.

  • BULLETIN: Judge Orders Golden Panda Forfeiture

    UPDATED 3:23 P.M. EDT (U.S.A.) A federal judge has issued an order that formalizes the forfeiture of more than $14 million from Golden Panda Ad Builder to the U.S. government.

    The ruling means that $14,048,598.07 seized from five Golden Panda bank accounts in the names of Clarence Busby or Dawn Stowers now belongs to the United States.  The money was seized as part of the probe into the affairs of AdSurfDaily Inc., a Florida company prosecutors said was engaging in wire fraud, money-laundering and the sale of unregistered securities — all while operating a Ponzi scheme.

    One of the Golden Panda accounts contained precisely $6 million.

    See our June 2 story about prosecutors’ request for a formal forfeiture order.

    Read the judge’s forfeiture order.

  • Reports: BizAdSplash Slow On Payouts To Surf Members

    UPDATED 6:04 P.M. EDT (U.S.A.) Could BizAdSplash (BAS), a surf site associated with Golden Panda Ad Builder President Clarence Busby, be following Golden Panda, AdSurfDaily and AdViewGlobal (AVG) into the great autosurf graveyard?

    Busby recently ceded $14 million to the U.S. government as part of the ASD investigation.

    There are reports today that BAS is behind on payments to members. In the recent past, the BAS surf site has been offline for an extended period of time. The surf also urged members not to contact vendors associated with its use of MasterCard with any questions about the BAS program.

    On May 13,  BAS, which purports to be registered in Panama, registered Articles of Organization as a Limited Liability Company (LLC) in Georgia. The surf used an address at UPS Store No. 2644 in Kennesaw, Ga., as its mailing address.

    Why the company purports to be headquartered in both Panama and Georgia is unclear. Some BAS promoters advised customers to send checks and money orders to the Georgia address and to note their BAS usernames and member names on the checks and money orders.

    Joyce Haws, listed in court documents as one of the founding members of Golden Panda Ad Builder, recently was involved in pro se litigation in the ASD/Golden Panda forfeiture case.

    A federal judge ruled last week that the pro se litigants who tried to intervene in the forfeiture case had no standing.

    Although BAS said it recently did away with bank wires, it says it accepts personal checks, business checks and money orders, along with  accepting money from offshore processors AlertPay, StrictPay and SolidTrustPay.

    On its website, BAS does not identify its management team. But its Georgia filings identify Clarence Busby as registered agent.

    Visitors to the BAS website read that it is “an international corporation which functions by utilizing a team of business professionals who are using their expertise and experience to build a successful company. Many of our professionals have additional involvements so to avoid conflicts of interest we do have some non disclosures in place to protect their privacy.”

    In the recent past, the surf has used matching bonus programs to entice new business.

    AVG, which debuted online after the BAS launch, recently announced the suspension of member cashouts and mandatory participation in an 80/20 program should cashouts resume. Like BAS, AVG also used matching-bonus programs. AVG said it lost at least one wire account because members had wired too many transactions in excess of $9,500.

  • BREAKING NEWS: Busby Dismissed As RICO Defendant; Bank Of America Asks Judge To Stay Lawsuit Until Forfeiture Matter Is Resolved

    Three members of AdSurfDaily Inc. who sued Golden Panda Ad Builder President Clarence Busby amid allegations of racketeering have asked a federal judge to dismiss the allegations against Busby.

    Meanwhile, Bank of America has asked the judge to stay the case until a federal forfeiture proceeding invoving AdSurfDaily and Golden Panda is adjudicated.

    In essence, the bank is arguing that the forfeiture case provides a remedy for ASD members to gain refunds. The plaintiffs are expected to oppose the motion for a stay.

    Bank of America was not named a RICO defendant in the racketeering lawsuit against Busby, AdSurfDaily President Andy Bowdoin and ASD attorney Robert Garner. Rather, the plaintiffs alleged the bank had aided and abetted Busby, Bowdoin and Garner in a fraudulent scheme.

    The plaintiffs asked U.S. District Judge Rosemary Collyer to dismiss the complaint against Busby “with prejudice,” meaning they do not intend to bring it again.

  • BizAdSplash Surf Site Offline

    UPDATED 6:41 A.M. EDT (June 12, U.S.A.) BAS appears to have come back online overnight. The site now is resolving to a server. It returned briefly at 9 p.m. yesterday. At 9:05 p.m., the site went down again. Total downtime yesterday was at least 6 hours , perhaps as many as 14, based on reports elsewhere.

    The BizAdSplash (BAS) autosurf website has been offline for hours. The site will not resolve to a server.

    What is causing the problem is unclear.

    Clarence Busby, a central figure in the AdSurfDaily/Golden Panda Ad Builder case, is listed as “Chief Consultant” for BAS.

    Federal prosecutors have sought a final order to give the U.S. government control of more than $14 million seized from bank accounts Busby controlled for Golden Panda.

    UPDATE 4:38 P.M. The  BAS site continues to be offline. A mirrored copy of the BAS News Release page is accessible, although it does not explain the server issue or the downtime and appears not to have been updated for hours.

    It does, however, explain that the surf experienced a problem and that “transactions” are “missing” from accounts. The date and time of the posting are unclear:

    Notice:  We are aware of the account issues and will have them resolved shortly!!

    As some of you may have noticed already this morning, there are transactions missing from your accounts. This includes any rrsp, commission or ad package purchases made since the 15th of May. This is a known issue created while performing a data transfer last evening and will have them corrected shortly.

    UPDATE 6:41 A.M. June 12. The BAS site now is resolving to a server and appears to be back online.

  • Bank Of America Seeks Oral Argument In ASD Aiding-And-Abetting Claim; Files Dismissal Motion

    Andy Bowdoin: Still a no-show in RICO case
    Andy Bowdoin: Still a no-show in RICO case

    Bank of America has asked U.S. District Judge Rosemary Collyer to hear oral arguments in its bid to be dismissed as a defendant in a lawsuit that alleged it aided and abetted a Ponzi scheme operated by alleged racketeers associated with Florida-based AdSurfDaily Inc.

    Federal prosecutors seized at least $79.8 million from 15 bank accounts controlled by ASD President Andy Bowdoin or Golden Panda Ad Builder President Clarence Busby, saying the funds were the proceeds of a criminal enterprise that engaged in wire fraud, money-laundering and the sale of unregistered securities.

    Three ASD members sued Bowdoin, Busby and ASD attorney Robert Garner under federal RICO statutes, claiming the men had engaged in racketeering  — including indictable offenses — with unnamed others.

    Bank of America was not named a RICO defendant. Rather, the bank was accused of aiding and abetting the RICO defendants in a fraudulent scheme.

    The bank said the plaintiffs had failed to show that it had aided or abetted the RICO defendants in any way, repeating an earlier assertion that “banks are not guarantors” of their customers’ conduct.

    “No law holds that a bank could be held liabile for conducting legitimate business activities with an entity that, as it turns out, also happens to be committing a fraud against others,” the bank argued. “Nor can there be if banks are to conduct business.”

    The lawsuit was filed in January. In April, plaintiffs Mike Collins, Frank Greene and Natures Discount Inc. amended the complaint, alleging that Bank of America employees were moonlighting as ASD employees in Florida while ASD was commiting fraud in plain sight.

    Collins, Greene and Natures Discount said that a “majority” of employees of Bank of America’s branch in Quincy, Fla., also worked for ASD, including the branch manager.

    Bank of America, however, said moonlighting was “lawful” conduct.

    “The alleged moonlighting activities of Bank of America employees did not occur within the scope of duty of the employees’ employment with Bank of America, and Plaintiffs do not allege that they did,” the bank argued.

    “This conduct, as lawful as it is, cannot be imputed to Bank of America,” the bank continued. “Regardless, Plaintiffs alleged no facts demonstrating which Bank of America employees knew that ASD’s conduct was fraudulent, how they learned this, when or how they intentionally aided the scheme in some way.”

    Bowdoin is the sole defendant in the RICO case not to have responded to the complaint. Prosecutors said he signed a proffer letter in the federal case and acknowledged ASD was operating illegally.

    In January, Bowdoin submitted to the forfeiture. He changed his mind in late February and began to file pro se motions, chiding prosecutors by saying his filings “should really get their attention.”

    Bowdoin promised to hold a conference call to update members nearly three months ago, but he has not done so. He also did not inform them of the proffer letter prosecutors said he signed or explain why he has not responded to the RICO complaint filed nearly five months ago.

  • News And Notes: Surf’s Up Poster Calls For ‘Militia’ To Rise Against Government; BizAdSplash Urges Members Not To Contact MasterCard Vendors

    NEWS: A member of the Pro-AdSurfDaily Surf’s Up forum says he is willing to “Bear Arms in line with the Bill of Rights” and storm Washington, D.C., if a “militia” can be formed.

    In a separate thread, the poster said the government ruined his life last year when it seized assets tied to the Florida autosurf firm and that he is ready to fight to the “DEATH.”

    “If anyone from the US Government reads this,” the poster said, “yes[,] look out because you are now my enemy. May God Bless Andy [Bowdoin] and all ASD members. I’m done with working within the system. I will destroy the entire US Government if that is what it takes to serve justice for ASD members.”

    The incendiary remarks were contained in two threads, one of which was titled “Letter from Andy.” A poster within the thread had criticized Bowdoin for not conducting a conference call he had promised nearly three months ago in a letter to members published at Surf’s Up, opining that Bowdoin should get “jail time.”

    In response to the post critical of Bowdoin, yet another poster appealed to the Surf’s Up Mods to cleanse the forum of “rats.” A Mod assured the poster that, if the purported rat again posted “negative garbage” about Bowdoin, the offending post would be deleted.

    The Mod said nothing about the “militia” post.

    NOTE: In court filings in a racketeering lawsuit against Bowdoin, ASD attorney Robert Garner and Golden Panda Ad Builder President Clarence Busby, one of Busby’s pleadings defines him as a minister of 30 years’ standing and uses the abbreviation “Rev.” at least 120 times.

    Golden Panda has ceded to the government more than $14 million it had gathered in only days last summer as the so-called “Chinese” version of ASD. In the months that followed, a new, Busby-connected surf known as BizAdSplash (BAS) opened, touting an offshore location.

    Early promoters identified Busby as the owner, but others defined him as a consultant.

    As a marketing proposition, identifying Busby in any capacity of authority at BAS was odd regardless of any title he held, in no small part because he consented to the forfeiture of Golden Panda’s assets in September, saying he had relied on ASD’s assertions that the program was legal.

    Only in the incongruous world of the autosurf could a man responsible for a stunning, $14 million loss of investor funds be positioned as a marketing plus.

    Work-around?

    One seized Golden Panda account contained precisely $6 million, according to federal prosecutors.

    Choosing his words carefully in a sworn court filing in August, Busby said none of the Golden Panda money came from Bowdoin or ASD, that Busby had provided an unspecified amount of “seed” capital from his real-estate business and that Golden Panda “obtained all other start up money from 34 founders.”

    Amounts Busby provided personally or obtained from the “founders” weren’t disclosed in Busby’s filing.

    Busby’s filing, however, did not rule out the possibility that one or more “founders” provided capital from “profits” paid to them by ASD and deposited in their individual bank accounts and that “profits” then were forwarded to Golden Panda.

    Nor does it rule out the possibility that Golden Panda seed money from one or more “founders” flowed to the company after the “founders” deposited checks from individual ASD downline members in the “founders’” private bank accounts, shifted a corresponding amount of “ad-packs” to ASD downline members by using ASD’s internal system, and then forwarded the desposit amount or portion thereof to Golden Panda, instead of ASD.

    Busby said a prosecution claim that a “majority” of Golden Panda’s funds came from ASD was “false.”

    There have been numerous reports that ASD prospects paid sponsors directly for ad-pack purchases, that the sponsors deposited the money in their individual checking accounts at their local banks and then used ASD’s internal system to transfer ad-packs to the individual prospects.

    The approach was pitched as a work-around, because ASD was having trouble posting payments from individual members and getting them started in the “rebate” program, which was purported in advertisements to pay 1 percent a day or 30 percent a month.

    Given this scenario, it is possible that huge sums paid by ASD “rally” attendees were deposited into the private bank accounts of individual ASD promoters and that the deposits were routed directly to Golden Panda, instead of ASD.

    “Neither Bowdoin nor ASD provided any capital,” Busby said.

    Busby’s claim about Golden Panda’s seed money would be true — at least in a technical sense — if any of Golden Panda’s “founders” also were ASD promoters who deposited money from ASD downline members directly in the promoters’ back accounts, transferred a corresponding amount of ad-packs to the members using ASD’s internal system, and then forwarded the funds to Golden Panda, instead of ASD.

    It is known that at least one of Golden Panda’s “founders” was a highly visible ASD promoter who helped the company organize rallies at which millions of dollars were collected. It also is known that some ASD prospects who attended the rallies paid sponsors directly for “ad-pack” purchases and that the sponsors deposited the money in their individual checking accounts and transferred a corresponding amount of “ad-packs” to the prospects by using ASD’s internal system.

    It is possible that a significant chunk of the money seized from Golden Panda originated with one or more “founders” who initiated private ad-pack transactions with individual ASD downline members, deposited the sums in their personal checking accounts and forwarded the funds to Golden Panda.

    ‘Chief Consultant’

    Busby now has officially been declared the “Chief Consultant” of BAS, in a news released marked a “must read” at the BAS website.

    Unlike Busby’s court filings in the RICO case, the BAS news release does not identify him as a minister or use an abbreviation such as “Rev.” It simply identifies him as “Clarence Busby.”

    Busby was enjoined by a federal judge in the 1990s from breaking securities laws, after he was implicated in three prime-bank schemes by the Securities and Exchange Commission. The government took mercy on Busby, waiving certain financial penalties and not interfering in a bankruptcy petition he filed.

    In the BAS news release, Busby assured members that BAS had “spent a tremendous amount of time and thousands of dollars on economists, attorneys and other professionals and with their advice have built this company in a very responsible manner.”

    Busby did not identify the economists, attorneys or other professionals. Nor did he mention the past encounter with the SEC or the current litigation involving ASD and Golden Panda Ad Builder. Busby did, however, provide an inspirational quotation from auto tycoon Henry Ford.

    Mum’s The Word

    Elsewhere on the news pages of BAS, the company urged members not to contact vendors associated with its use of MasterCard with any questions about the BAS program. The information appeared under a bright red headline titled, “URGENT INFORMATION FOR MASTERCARD USERS.”

    “At Biz Ad Splash, we have worked very hard to develop great relationships with some of the finest international banking services available,” BAS said. “We continually strive to maintain a good standing with these institutions in order to provide the best services possible to the Customer/Associates of Biz Ad Splash.”

    Last year, ASD announced that it was finalizing a deal with a company known as Praebius Communications that would result in a cash infusion of $200 million. ASD withdrew the news release after members responded by contacting Praebius in a bid to confirm or deny the deal.

    Some ASD members were infuriated that other members actually questioned the claim, describing even rational doubts as an act of disloyalty.

    In its MasterCard news release, BAS openly discouraged members from contacting any vendors to get answers to questions.

    “[W]e strongly urge our Biz Ad Splash Customer/Associates not to contact these vendors with questions concerning withdrawal requests or Biz Ad Splash card deposits,” BAS said.