BULLETIN: (4th Update 9:13 p.m. EDT U.S.A.) Accused Ponzi schemer Paul Burks ran a “pyramid scheme” known as FollowMe1X2 that was a precursor to ZeekRewards, federal prosecutors say.
A quote about FollowMe1X2 that appears in a prosecution filing today also appears verbatim in a post on the MoneyMakerGroup Ponzi forum dated Sept. 4, 2010, by “charlieone.”
From the quote: FollowMe1X2 is “a fast-paced network advertising program that was designed to maximize your ad budget, increase your businesses exposure and your bank account exponentially!”
FollowMe1X2 collapsed and participants were ported into ZeekRewards, prosecutors said.
Zeek also had a presence on MoneyMakerGroup and other boards referenced in federal court filings as places from which Ponzi schemes are promoted.
Today’s prosecution filings against Burks, who faces trial next month on charges of wire fraud, mail fraud. conspiracy to commit both and conspiracy to commit tax fraud, come in the form of a “Notice of Intent to Introduce Evidence and Memorandum of Law in Support of its Admissibility.”
The document is similar to filings against now-convicted Ponzi schemer Andy Bowdoin of AdSurfDaily, another Ponzi board “program.” In the ASD cases, prosecutors tied Bowdoin to scams both before ASD (DailyProSurf) and after (AdViewGlobal and OneX).
ASD, another Ponzi-board “program,” collapsed in 2008. Like Zeek, ASD used vendors such as SolidTrustPay and AlertPay and purported to have an “advertising” function.
Like Burks, Bowdoin was accused of porting participants from one scam to another.
BehindMLM.com reported today that Burks is seeking to have the tax-fraud conspiracy charge against him dismissed prior to trial, scheduled to begin July 5. Prosecutors have not yet responded to his argument.
But in their notice today, prosecutors argued that the jury should be able to hear evidence that Zeek parent Rex Venture Group LLC had not filed corporate tax returns between 2003 and 2011.
It also should be able to hear evidence about the FollowMe1X2 scheme, prosecutors contended.
EDITOR’S NOTE:First of two parts. Part Two will be published later tonight or tomorrow.
Even as AdSurfDaily President Andy Bowdoin was venturing to Washington in June 2008 to receive what his members and prospects were told was the “Medal of Distinction” from the President of the United States, he was harboring terrible secrets and knew full well his autosurf business was a Ponzi scheme that could collapse at any second and lay waste to thousands of investors, according to court records and an affidavit originally filed under seal by the U.S. Secret Service.
Much of the information from the affidavit, which was filed in February 2009, is being published today for the first time. Companion court documents in ASD-related litigation show that part of a third civil-forfeiture case brought in December 2010 against assets alleged to be owned by ASD and Bowdoin has been put on hold while Bowdoin is battling criminal allegations — and that some individual ASD members whose assets were targeted for forfeiture in the same case have not filed claims for money seized from their bank accounts. Although the forfeiture action against Bowdoin has been suspended, the cases against the assets of the individual ASD members remain active.
Just two months prior to his June 2008 Washington jaunt — in April 2008 — Bowdoin had flown at the prompting of a “North Carolina lawyer” to Panama and Costa Rica with his wife and the lawyer. The purpose of the trip, according to the affidavit, was to incorporate ASD Cash Generator and an entity known known as La Sorta Trading outside of U.S. jurisdiction to create wiggle room if U.S. regulators came knocking.
ASD Cash Generator was the replacement name for the original ASD autosurf business, which was known simply as AdSurfDaily. The first scheme collapsed in 2007, leaving Bowdoin’s first set of investors holding the bag, according to the affidavit. Bowdoin’s later investors were not told about the firm’s dubious history.
La Sorta Trading, whose purpose was not immediately clear, never before has been referenced in the ASD case. La Sorta is the name of a city in Honduras, another country in Central America. It is not known if the firm was named after the city.
Bowdoin also was exploring the possibility that he and his wife would move from the small town of Quincy, Fla., to Costa Rica, the Secret Service advised U.S. District Judge Rosemary Collyer.
“Bowdoin’s wife did not like Costa Rica, however, and his plans to move ASD’s operations off shore were shelved,” according to the affidavit.
The February 2009 affidavit paints Bowdoin, now 76, as a man experiencing pressure from multiple points of contact — and as a man who made one disastrous decision after another. One of the things allegedly pressuring Bowdoin was fear that the Ponzi could come tumbling down before enough new members were recruited to keep cash churning and the facade of a successful and lawful business in place. Yet-another was fear that insiders, ordinary members and even employees could turn on him. Still-another was fear that a government intervention could occur at any time, according to the affidavit.
Of the millions of dollars that had flowed into ASD, “less tha[n] $25,000 was derived from independent revenue,” according to the affidavit. The rest had come from members and was being recycled in classic Ponzi scheme fashion, with Bowdoin initially empowering himself and a “silent partner” to rake 10 percent of ASD’s “gross sales” and split it evenly: 5 percent each.
But even as he was in Washington in June 2008 to receive an award he positioned as a Presidential acknowledgment of his business acumen, Bowdoin knew that his silent partner posed a risk to him, according to the affidavit.
That silent partner, according to the affidavit, was Bowdoin’s “sponsor” in 12DailyPro, an autosurf the SEC accused of running a massive Ponzi scheme more than two years earlier.
Through his sponsor, Bowdoin had invested $100 in 12DailyPro. The money was lost quickly because the SEC shut down 12DailyPro soon after Bowdoin joined. But Neither Bowdoin nor his silent partner took the clue from the SEC’s action, according to the affidavit. Instead, they worked on ways to channel 12DailyPro-like revenue to themselves and disguise what they were doing.
“Based on his experience with 12daily Pro, and his review of the SEC’s filings against it, Bowdoin knew that a paid auto-surf program that promised returns of that magnitude and recycled member funds was a business model that was both unsustainable and illegal. He also knew that selling an unregistered investment opportunity to thousands of investors was illegal. Nevertheless, after the collapse of 12daily Pro, Bowdoin agreed with his 12daily Pro sponsor to start a similar autosurf program. Both individuals were aware that, before its collapse, 12daily Pro had taken in millions of dollars from its members.”
Under Bowdoin’s agreement with his silent partner, Bowdoin was responsible for managing ASD’s operations. The partner, meanwhile, was responsible for marketing ASD.
In December 2006, about a year and a half prior to Bowdoin’s June 2008 trip to Washington amid claims he was receiving a Presidential award for business smarts, Bowdoin arbitrarily slashed the silent partner’s cut of the upstart ASD business from 5 percent of the gross to 1 percent, according to the affidavit.
Despite the fact Bowdoin had been a 12DailyPro member recruited into that SEC-smashed Ponzi scheme by the same person who’d later emerge as his silent partner in ASD, Bowdoin explained to the silent partner that he — meaning Bowdoin — “was performing most of the work, and bearing most of the risk in operating ASD,” according to the affidavit.
With those words, Bowdoin imposed a pay cut on the silent partner, who later asserted Bowdoin had ripped him off, according to the affidavit.
In August 2008, during a search of Bowdoin’s home in Quincy less than two months after the Washington jaunt and the Presidential claims, the Secret Service found Bowdoin’s handwritten notes from December 2006 that “show his and his silent partner’s awareness of the risks of the auto-surf program they were conducting,” the Secret Service said in the affidavit.
“Bowdoin’s notes indicate that he told his silent partner that the partner should have made him better aware of those risks ‘knowing regulators were on the prowl for surfing sites,’” the Secret Service alleged.
It is known from other documents that the Secret Service opened the ASD probe after becoming aware of the company on July 3, 2008, about 17 days after Bowdoin had ventured to Washington amid claims he’d be be receiving a Presidential award and dining with President George W. Bush and Vice President Dick Cheney.
One of the documents is a 57-page evidence exhibit that includes surveillance photos taken in Quincy prior to the seizure of tens of millions of dollars from Bowdoin’s 10 personal bank accounts, one of which allegedly contained more than $31.6 million. The Secret Service was alarmed as it began the process of peeling back layers of the onion, according to court records
Before July had come to a close, the agency — confronted with a murky fact set and trying to figure out how a man who claimed to have had a remarkable business career that had captured the attention of the President of the United States — had assigned multiple undercover agents to the ASD case.
One of the earliest puzzles to solve, according to court documents, was that Bowdoin had left behind a string of dissolved companies in Florida and professed to be wealthy — but had “earned no significant income from legal employment in the twenty years prior to his commencement of ASD’s operation.”
As the investigation progressed, according to court documents and the February 2009 affidavit, agents discovered that ASD had “special” members who provided Bowdoin start-up capital to varying degrees. These “special” members were grouped as members of ASD’s “President’s Circle,” “President’s Advisory Board” and “President’s Advisory Counsel,” and also knew about the 12Daily Pro Ponzi.
At least “some” of them, according to the affidavit, counseled Bowdoin not to use the name he initially contemplated in 2006 for the upstart enterprise: DailyProSurf.
Some of the special members, who were entitled to higher compensation than ordinary members, “complained” that DailyProSurf sounded too much like 12DailyPro. In response to the concerns, the enterprise abandoned the DailyProSurf name and used the name AdSurfDaily as a means of avoiding “law enforcement scrutiny,” according to the February 2009 affidavit.
The document did not name the “special” members. It was filed under seal on Feb. 26, 2009, during a period in which an autosurf known as AdViewGlobal (AVG) was launching. AVG may represent the fourth iteration of ASD, one launched months after the seizure of Bowdoin’s bank accounts by the Secret Service in August 2008.
AVG’s name is not referenced in the February 2009 affidavit. In June 2009, however, AVG’s name surfaced in a racketeering lawsuit brought against Bowdoin and North Carolina attorney Robert Garner. In September 2009, the government made a veiled reference to AVG in court filings.
Lawyers Referenced In Secret Service Affidavit As Bowdoin’s Partners In LaFuenteDinero, The ‘Spanish’ ASD
NOTE: The PP Blog became aware in 2010 that the government had subpoenaed at least three North Carolina attorneys, including Robert Garner, in the ASD case. The other two attorneys were husband and wife. The husband, who was sentenced to a year in federal prison in 2006 for lying to the FBI in a real-estate case, was disbarred in 2009. Bowdoin challenged the subpoenas, arguing that his communications with the lawyers were privileged. A federal judge ruled that the attorneys had to testify.
The Blog, which previously has published stories that reference Garner, is doing so again today. Garner is listed in Nevada records as a “director” of AdSurfDaily Inc., with Bowdoin as the president, secretary and treasurer. However, the Blog is choosing today not to publish the names of the husband-and-wife attorneys, but reserves its right to do so in the future.
Moving on . . .
One of the most stunning allegations in the February 2009 Secret Service affidavit, which became a public record when the seal was lifted in May 2009 and which the PP Blog is reporting on for the first time today, was that two of the North Carolina lawyers were proposed as Bowdoin’s business partners in LaFuenteDinero (LFD). LFD was ASD’s so-called Spanish autosurf. The proposal was made by one of the lawyers, who described the other lawyer as his “law partner.”
The section below is verbatim from the February 2009 Secret Service affidavit:
“In approximately September or October 2007, ASD’s North Carolina lawyer suggested to Bowdoin that they should start a new site that was in Spanish. In addition, the North Carolina lawyer suggested that the company associated with this site should be set up off shore because when these type of companies raise too much money the government comes in and shuts them down. The North Carolina lawyer recommended that he, his ‘law partner’ and Bowdoin would each share ownership of the Spanish site (as 1/3 share partners). In return for the others’ ownership interests, the North Carolina lawyer and his associate would handle the incorporation work and all of the work needed to move operations offshore.”
By early 2008, with nearly a year and a half of troubled operation under its belt and a Ponzi collapse that had caused ASD to cease operations for weeks in 2007 as it tooled up for a second try under the ASD Cash Generator brand, Bowdoin was growing “suspicious” of at least one of the North Carolina lawyers, according to the affidavit.
“In February 2008, Bowdoin, the North Carolina lawyer and an ‘Internet marketer’ discussed expanding ASD by beginning a new site in Chinese, which would be called Golden Panda Ad Builder,” according to the affidavit. “The North Carolina lawyer suggested a person that would be well suited to run the site offshore, but Bowdoin was beginning to get suspicious of the lawyer. Bowdoin decided, instead, to split the Chinese site with the Georgia minister. Bowdoin told the Georgia minister that ASD had no outside income sources and that ASD’s survival was depend[e]nt on an ever growing base of new contributors. The Georgia minister began working on developing the Chinese auto-surf site.”
‘Georgia Minister’ Allegedly Caught Stealing By ASD Employees; Bowdoin Allegedly Stays Silent About Theft
Bowdoin, according to the affidavit, confronted trouble from any number of fronts. One of his colleagues — the “silent partner” who had been Bowdoin’s 12DailyPro sponsor whose rake Bowdoin allegedly had slashed after they started ASD — told Bowdoin he believed he was owed $20,000 and threatened to expose ASD’s new operation.
“Bowdoin agreed to compensate the sponsor” after initially balking, according to the affidavit.
And Bowdoin also was under pressure from the “North Carolina lawyer” to move the ASD operation offshore — counsel Bowdoin earlier had resisted but agreed to explore in April 2008, despite his suspicions about the lawyer, according to the affidavit.
During the first half of 2008, with Golden Panda still not off the ground during a period in which the “Georgia minister” had access to ASD’s computer system, ASD employees began to complain that the minister was “padding” his ASD account by “secretly using his access to the computer system to increase his/relatives’ number of ad packages,” according to the affidavit.
Bowdoin personally investigated the complaints, comparing the “Georgia minister’s” account with banking records.
Bowdoin “confirmed for himself that the Georgia minister was in fact stealing money from ASD by creating free ad packages,” according to the affidavit. “When confronted, the Georgia minister denied the allegations and asserted that he had proof that the ad packages he created flowed from legitimate deposits of funds into ASD’s bank accounts. The Georgia minister never showed Bowdoin this proof, however, and each time Bowdoin or someone else inquired about the evidence of deposits, the Georgia minister created an excuse to explain why he did not then have it.”
Instead of firing the Georgia minister and ending the relationship, “Bowdoin did not pursue the matter,” according to the affidavit.
Things took a dramatic turn “in about June 2008,” when ASD employees discovered that “the Georgia minister had been permanently enjoined by a court from committing violations of the federal securities laws.
“When ASD employees disclosed this information to Bowdoin, they told him that ASD needed to distance itself from the minister,” according to the affidavit. “Bowdoin agreed to severe his ties to the Golden Panda operation after several ASD employees indicated that they were unwilling to work with the Georgia minister.”
Walter Clarence Busby Jr. of Acworth, Georgia, has been identified by the government in other court filings as Bowdoin’s Golden Panda partner. Separate court documents describe Busby as a minister and real-estate professional, and the SEC described Busby in 1997 as a prime-bank swindler.
In court filings in the ASD case, Busby advised Collyer that he had prevailed upon another minister to assist him in arranging a relaxing day of fishing with Bowdoin in April 2008. During that same month, according to the February 2009 Secret Service affidavit, Bowdoin ventured to Central America with his wife and a “North Carolina lawyer.”
The fishing excursion took place in Brunswick, Georgia, on April 11, 2008, according to court filings by Busby. Five days later, according to the February 2009 Secret Service affidavit, Bowdoin was in Panama and Costa Rica, discussing ASD business and the formation of the La Sorta Trading firm.
Coming later: Government moves against money in ASD-related bank accounts in Iowa and other states.
EDITOR’S NOTE: This list summarizes several programs pushed by members of AdSurfDaily, a Florida company implicated in an alleged $100 million Ponzi scheme. In some cases, the programs were pushed prior to the seizure by the U.S. Secret Service in August 2008 of 15 bank accounts linked to ASD or Golden Panda Ad Builder, one of the companies implicated in the ASD scheme. Each of the programs listed below came to a dubious end or continue to exist in an unclear, shadowy form. This list is presented in no particular order and does not include every HYIP/autosurf pitched by ASD members.
UPDATED 3:16 P.M. ET (U.S.A.)
Gold Nugget Invest (GNI): Collapsed Friday. HYIP. Government of Belize issued warning in November. Ownership hidden behind proxy. Business model unclear. Presented as betting arbitrage, but perhaps was involved in forex. Advertised payout of 7.5 percent per week. Possibly linked to European banking investigation. Changed rules on the fly. Still collecting money after “Re-organization.” Purportedly launched in October 2006, the same month ASD was preparing for launch.
Genius Funds/Cash Tanker/Saza Investments: Pushed by ASD member “joe” in a post on the ProASD Surf’s Up forum just prior to collapse of GNI. CashTanker, which used a graphic depicting Jesus, now has tanked after advertising payouts of 2 percent a day. “joe” pitched GNI, Genius Funds, Cash Tanker and Saza Investments in an egg-themed promotion in which the word “egg” was used in domain names that redirected to the HYIPs. “joe’s” egg-themed domain that redirected to Cash Tanker now redirects to a program called PTV Partner, an HYIP that bills itself “The Ultimate High Yield Asset for your Financial Portfolio!” “joe’s” egg-themed pitch was based on the screaming notion that “ALL MY EGGS ARE NOT IN ONE BASKET. I MAKE $2000.00 A WEEK.†A street address for the egg-themed domains corresponds to an address in a federal lawsuit involving cell-phone trafficking.
Regenesis 2×2: Matrix in Seattle area. Records seized by U.S. Secret Service in July 2009. Operators kept under surveillance for five weeks. Multiple search warrants issued. Discarded records found in Dumpster. Sold “commission centers†for $325. Touted itself the “THE ECONOMIC STIMULUS PLAN FOR YOU.†Site appears to have been registered behind a proxy in Europe. Jeffrey William Snyder, one of the individuals kept under surveillance, was a convicted felon on probation for a previous securities scheme.
GoldenPandaAdBuilder: So-called “Chinese” version of ASD. Assets seized in two forfeiture complaints in ASD case. Operated by Clarence Busby of Georgia. Records in now-dismissed RICO lawsuit against Busby identified him as “Rev.” at least 120 times. Busby was implicated by SEC in 1990s in three prime-bank schemes that promised enormous payouts. Purportedly became Golden Panda president after going fishing with ASD President Andy Bowdoin in April 2008. Federal judge ordered forfeiture of more than $14 million from Golden Panda in July 2009. Busby now purported “chief consultant” of BizAdSplash (BAS). Ceased payouts in July 2009, after declaring “crisis” and claiming members were overpaid. Went offline. Returned online. Went offline again for about two weeks during 2009 Holiday season. Now back online.
BizAdSplash (BAS): (Also see GoldenPanda entry above.) BAS launched in aftermath of seizure of assets in ASD/GoldenPanda case. Assets seized in civil complaints in ASD/GoldenPanda case total about $80.52 million. Clarence Busby purported to be chief consultant of BAS. BAS touted purported offshore registration in Panama. Georgia corporation records show version of surf’s name used address of UPS Store No. 2644 in Kennesaw, Ga.
Noobing: Pitched as alternative to ASD after seizure. Noobing targeted deaf people. Deaf member says she reported Noobing to FBI and sheriff’s department in California. There are recent suggestions that deaf members also reported Noobing to SEC. FTC and attorneys general of Minnesota, Kansas and North Carolina joined in suing Affiliate Strategies Inc. (ASI), Noobing’s parent company, in alleged scheme offering guaranteed government grants from economic stimulus funds. Illinois now has joined the FTC action. Original lawsuit filed in July 2009. Like ASD, ASI owned a jet ski. Court-appointed receiver sold it at auction. Receiver performed a preliminary exam of Noobing’s records and determined surf was upside down by approximately $550,000. Noobing gathered money in aftermath of seizure of ASD’s bank accounts. Surf slashed payouts in early 2009, citing unclear ruling in ASD case. Site offline since FTC lawsuit, which did not name Noobing.
DailyProSurf (DPS): DPS is a largely unknown and mysterious surf site registered by ASD President Andy Bowdoin in August 2006, about two months prior to the formal birth of ASD. Records suggest DPS operated prior to registration, although its ownership was unclear. (NOTE: The story in the DPS link in this paragraph also contains information on 12DailyPro and PhoenixSurf, two surfs sued successfully by the SEC.)
AdVentures4U (ADV4U): Surf tanked in August 2009. Reportedly had more than 60,000 members. Members identified Steve R. Smith as owner. Smith also purported owner of venture called TradingGold4Cash. In confusing note to ADV4U members, Smith purportedly said his family received threats. Used ASD-like “rebates aren’t guaranteed” excuse upon payout suspension. Urged members not to contact payment processors. Site reportedly conducted business with hotmail address.
CEP: Judicially declared Ponzi scheme. Smashed by SEC. ASD once advertised it accepted funds through CEP Trust, the payment processor associated with the CEP Ponzi scheme.
MegaLido: Pushed by ASD members in aftermath of seizure of ASD’s assets and positioned as a safe, “offshore” alternative, MegaLido tanked late in 2008, during the Christmas season, a few months after the ASD seizure. MegaLido purportedly had 27,000 members. MegaLido might have had a tie to Instant2U, another surf that tanked during the 2008 Holiday season. “MegaLido Rocks!†one ASD promoter blared, noting excitedly that it paid 12 percent a day and “It’s Offshore!†Instant2U advertised 14 percent a day.
Frogress: Pitched by ASD members in aftermath of seizure. Frogress tanked in January 2009, just after the Christmas holiday in 2008.
DailyProfitPond: Another surf pitched by ASD members in aftermath of seizure. DailyProfitPond tanked in December 2008, in the days leading up to Christmas. One DailyProfitPond promoter said it was possible to start with $12 and turn it into $12,000. The “return†was listed as 150 percent over 30 days.
AdViewGlobal (AVG or AVGA): Surf with ASD/Bowdoin ties. Formally debuted in February 2009, with a push from the now-defunct Pro-ASD Surf’s Up forum and ASD members. Tanked in June 2009 after collecting untold millions of dollars.
Perhaps one of the most bizarre autosurfs ever to enter the “industry.” Switched to “private association” structure after reportedly meeting with felon convicted in a 1990s securities scheme. Cited U.S. Constitutional protection despite purported headquarters in Uruguay.
AVG disclaimed any ties to ASD, despite fact its CEO was a former ASD executive who submitted a sworn affidavit in the ASD case. Issued news release disclaiming ASD ties; release was signed by an ASD employee who had testified in federal court for ASD in 2008. Said the fact AVG’s graphics appeared on ASD-controlled website was “operational coincidence.”
Announced bank account “suspension” in March 2009, blaming it on members who wired too many transactions in excess of $9,500. Announced CEO resignation, saying CEO would remain in “accounting” department. Announced new wire facility as done deal in May 2009. Company it identified as wire facilitator issued public denial, suggesting AVG was trying to funnel money to itself through a shell company.
Shell company operated by man with two large bankruptcy filings, including one in which an address listed as an apartment was the address of a mail drop. Purported AVG “compliance” department head was sued twice in 2008 for noncompliance with federal law. AVG claimed to own eWalletPlus payment processor. Actual eWalletPlus ownership far from clear. At least two people close to AVG money had spectacular bankruptcy filings. Andy Bowdoin, whom members later said was AVG’s silent head, was arrested for felony securities violations in the 1990s and entered guilty pleas.
AdGateWorld (AGW): Now-defunct surf launched after ASD seizure. Later purportedly sold to interests in the “Middle East.” Claims cannot be verified. AGW linked to ASD member Jack Schrold, a Florida attorney once suspended from the Florida bar for misconduct. Schrold was sued successfully by the FTC for the actions of his credit-repair firm, and also was convicted separately of knowledge of the commission of conspiracy and wire-fraud. AGW announced its death as “End of Dream.” Blamed members in announcement: “This honest and legitimate approach using the advertising rebate model apparently did not meet the expectations of the herd mentality.â€
PaperlessAccess: Mysterious upstart surf. ASD President Andy Bowdoin appeared in a video for Paperless Access in 2009, after the ASD seizure. Video appeared online in March 2009 — during time frame in which AVG was announcing bank-account suspension and the departure of its CEO. PaperlessAccess positioned as way for ASD members to regain money seized by the government. Bowdoin did not identify the owners of Paperless Access, describing them only as a small group of people. Nor did Bowdoin mention that the government was establishing an ASD refund program.
PremiumAdsClub (PAC): Tanked in February 2009. Members said it collected money right up to the end.
AggeroInvestment: Had PAC ties. Advertised 60 percent a month, plus bonuses. Collected money to the bitter end.
QBusinessSolution: Surf with purported ties to former ASD executive Juan Fernandez, who took the 5th Amendment in the ASD forfeiture case. # # #
The Justice Department has opened a probe into the political donations of R. Allen Stanford, according to the Miami Herald.
Stanford is jailed in Texas amid allegations he presided over a $7 billion Ponzi scheme on the Caribbean island nation of Antigua.
Among the first names to surface were the names of the National Republican Congressional Committee (NRCC) and its chairman, Rep. Pete Sessions, R-Texas. The names of Democratic politicians also have surfaced, according to the newspaper.
NRCC is the organization to which AdSurfDaily President Andy Bowdoin — himself implicated in a Ponzi scheme by the Justice Department — donated money in 2007 and 2008 as the purported head of two companies and received the Congressional “Medal of Distinction.”
Despite its important-sounding name, the medal is part of an NRCC marketing plan and signifies only an individual’s ability to write a check for what amounts to the purchase of banquet tickets.
In a story apt to embarrass Sessions and others, the Miami newspaper reported yesterday that, on Feb. 17, the date Stanford was indicted, Sessions sent an email to Stanford.
“I love you and believe in you,” the newspaper quoted Sessions as writing. “If you want my ear/voice — e-mail.”
Today the newspaper reported that Rep. Gregory Meeks, D-N.Y., traveled to Venezuela in 2006 after Stanford asked him to carry a message to President Hugo Chávez.
Stanford was concerned that a former employee in Venezuela who had been accused of fraud was questioning whether Stanford’s operation itself was a fraud, the newspaper reported. A year after Meeks carried the message to Chavez, the Stanford employee was indicted by Venezuelan prosecutors and charged with swindling money.
The story raises questions about whether Meeks’ purported intercession with Chavez might have helped Stanford delay the inevitable exposure of the alleged Ponzi scheme and whether he was relying on politicians to run interference for him prior to the exposure of the scheme.
Stanford’s empire, which prosecutors and regulators said was a Ponzi scheme propped up by Certificates of Deposit that paid above-market rates and lured investors into unsafe, uninsured offshore banking instruments, collapsed less than two months after the Bernard Madoff Ponzi collapsed in December 2008.
Meeks traveled to Venezuela in April 2006, according to the newspaper.
The extent of prosecutors’ interest in linking Ponzi money to politics and determining if corrupt money influenced votes and policy is unclear. At a minimum, however, prosecutors are known to have peeled back layers of the onion in Florida.
In an announcement dripping with the word “co-conspirators” last month, Acting U.S. Attorney Jeffrey Sloman of the Southern District of Florida, the FBI and the IRS said that money from disbarred Florida attorney Scott Rothstein’s alleged Ponzi scheme was “used to make contributions to federal, state, and local political candidates.”
In the Rothstein case, investigators are seeking to determine if the scheme existed in part as a means to evade campaign-finance laws. Rothstein Ponzi money also was used “to provide gratuities to high ranking members of police agencies,” officials said.
In August 2008, prosecutors said that ASD’s Bowdoin had donated money to NRCC and that ASD members claimed the “Medal of Distinction” Bowdoin received for the donations was an important award from the White House.
Federal Election Commission (FEC) records show that Bowdoin gave money to NRCC and claimed to be the owner of two companies: AdSurfDaily and AdSalesDaily.
On Feb. 27, 2007, the Federal Election Commission recorded a $250 donation from “Mr. T. Bowdoin†in the name of “AdSalesDaily Inc.†The FEC recorded another $250 donation from “Mr. T. Bowdoin†in the name of “AdSalesDaily Inc.†on March 27, 2007.
Both 2007 donations were targeted to NRCC and used an address — 13 S. Calhoun Street, Quincy, FL 32351 — federal prosecutors later said was bogus.
Although the donations listed Bowdoin as the “owner†of Florida-based AdSalesDaily Inc., the corporation appears not to have been registered in Florida. Records in Georgia list “Ad Sales Daily, Inc.†as a corporation that initially was registered in Georgia May 8, 2007, more than two months after Bowdoin identified himself as the owner in federal campaign records.
The Georgia entity does not list Bowdoin as an owner, officer or filer for the corporation — or as a person involved in any capacity. Rather, “Ad Sales Daily, Inc.†is listed as a Delaware foreign corporation, with J. Heardy Myers listed as the corporate filer and Myers (of Marietta, Ga.) and Otis Whitcomb (also of Marietta) listed as officers.
AdSalesDaily Inc. was incorporated in Delaware on March 22, 2007, about 24 days after Bowdoin made his initial NRCC donation, according to filings.
FEC records show that Bowdoin — under the name of “Mr. T. Andy Bowdoin, Jr†and “AdSurfDaily Inc. and AdSurfsDaily Inc.” (the second “s†is an apparent typo) — gave $5,000 to NRCC in 2008. Two donations of $2,500 were recorded — one on June 6, 2008, and another on July 7, 2008.
Even as the FEC was recording the donation on July 7, undercover agents from an IRS/Secret Service task force based in Florida were beginning to scrutinize ASD.
Bowdoin has a tie to a bank in Antigua, although it is unclear whether the tie is to a bank controlled by Stanford because Bowdoin has not identified the bank. Prosecutors, however, said ASD had $1 million on deposit in Antigua in an account under a different name.
Records suggest that the alleged Bowdoin Ponzi scheme might have operated under as many as four names dating back to early 2006: DailyProSurf, AdSurfDaily, AdSalesDaily and ASDCashGenerator.
Litigation surrounding tens of millions of dollars seized from ASD in August 2008 has turned into Theater of the Absurd, with dozens of pro-se litigants attempting to enter the legal skirmish between the Justice Department and Bowdoin.
One of the great mysteries of the case is why Bowdoin suddenly started donating money to NRCC in 2007 — during a time in which the company was not making payments to members and said it needed to issue a stock offering in which shares would be sold for $10,000 to raise funds.
“But they that will be rich fall into temptation and a snare, and into many foolish and hurtful lusts, which drown men in destruction and perdition. For the love of money is the root of all evil.” — From 1 Timothy 6:9-10
He was hailed a Christian “genius,” and AdSurfDaily President Andy Bowdoin often invoked God during his sales pitches.
“We need to have an attitude of gratitude with God,” Bowdoin told an ASD gathering in Las Vegas last year. “And I always say, ‘Thank you, God, for developing me into a money magnet.’ And I see myself as a money magnet in attracting money and, I say, attracting large sums of money.”
Many of his admirers portrayed him as the forward-thinking inventor of a miraculous business system for “good Christian people.” To prosecutors who had seen it all before, however, he was neither a genius nor an inventor.
Bowdoin, they said, was nothing more than a felonious imitator who had modeled his business on at least one multimillion-dollar Ponzi scheme that had traded on dreams before regulators reduced it to ruins.
AdSurfDaily almost wasn’t called AdSurfDaily. “Initially,” prosecutors said, “Mr. Bowdoin had intended to operate” under a different name.
It is little known, but on Aug. 24, 2006, Andy Bowdoin registered that name with the state of Florida. It used two of the three words that comprised the title of the infamous 12DailyPro autosurf Ponzi scheme — and, as it turned out, one of two words that comprised the title of the infamous PhoenixSurf autosurf Ponzi scheme.
The highly imitative name Bowdoin selected for his venture was “DailyProSurf,” according to records in Florida.
In a widely publicized case, 12DailyPro had been accused just six months earlier by the Securities and Exchange Commission of operating a $50 million Ponzi scheme from Charlotte, N.C. The allegations against 12DailyPro were brought on Feb. 20, 2006.
Two days later — on Feb. 22, 2006 — PhoenixSurf launched from the Atlanta suburb of Marietta, Ga. The surf collected more than $41.9 million before flaming out three months later, in May 2006. In 2007, it became the subject of yet another SEC Ponzi scheme investigation.
During its brief run, PhoenixSurf averaged nearly $14 million a month in revenue. Like 12DailyPro, PhoenixSurf purported to be an “advertising” service and was charged with the sale of unregistered securities as investment contracts.
SEC Introduces World To The Autosurf Ponzi . . .
The SEC’s prosecution of 12DailyPro in 2006 made headlines. The context of the case was alarming, and the numbers were jaw-dropping. A woman operating out of an apartment in North Carolina had managed to disguise a securities business as an advertising service, collecting more than $50 million on the Internet in only eight months’ time while allegedly siphoning $1.9 million into her own bank account and paying old customers with money received from new members.
The SEC announced the 12DailyPro prosecution on Feb. 27, 2006, issuing a news release on the SEC website and providing a copy of the complaint. Perhaps like no Internet fraud case before it, the 12DailyPro case demonstrated it was possible for hucksters to deploy technology to collect staggering sums quickly and convert all or part of the proceeds to their own use.
12DailyPro and PhoenixSurf took in a combined amount of at least $91.9 million in only months of operation, prosecutors said. Bowdoin’s ASD, at its peak, collected tens of millions of dollars weekly. Federal agents conducted a raid in August 2008 and found at least $93.5 million. After a slow start, ASD had surpassed both 12DailyPro and PhoenixSurf as a cash machine.
What new ASD members by the thousands didn’t know, prosecutors said, was that they were paying for abuses Bowdoin had built into the system and for liabilities he had accrued when at least one previous iteration of the surf had gone bust.
To explain slow or absent ASD payouts during the many dark days before ASD took off, Bowdoin at one point told some members that $1 million had been stolen from ASD by “Russian” hackers, but he never filed a police report, prosecutors said.
Naturally the claim led to questions about whether hackers actually had stolen the money — or whether it had been stolen by somebody else.
Bowdoin deliberately set up his program so ASD insiders effectively could steal from the company and pass along the cost of the thefts to the latest crop of recruits, prosecutors said in December.
DailyProSurf Domain Appears Online During Height Of 12DailyPro Craze, Then Vanishes Mysteriously
It is unclear if Bowdoin ever registered a website in the name of DailyProSurf, operated a forerunner to ASD under that name or benefited from from an operation that used the DailyProSurf name.
What is clear is that someone registered .com and .net sites in the DailyProSurf name — and that DailyProSurf references continue to appear alongside references to 12DailyPro in search results even to this day. It also is clear that DailyProSurf graphics were ordered and delivered by a company that catered to surf sites — including autosurf script sales — and autosurf promoters pushed traffic to the sites in early 2006, during the height of the 12DailyPro craze and while PhoenixSurf was just getting off the ground.
The presence of DailySurfPro raises an intriguing question: Did ASD have a predecessor site?
The DailyProSurf domain name was operational — and affiliates were pushing the site — at least eights months before Bowdoin registered the DailyProSurf name with the Florida Department of State.
Bowdoin registered the DailyProSurf name in Florida in August 2006. But references to DailyProSurf.com from as early as January 2006 appear online. References later in 2006 include a report about members not getting paid and a theory the surf was a “scam” that had ceased operations and gone offline. One web service captured a screen shot of a “suspension” notice from the hosting company for DailyProSurf.com. Both the .com and .net domain names now appear to be available for repurchase.
It also is known that both DailyProSurf and ASD used the same format to create affiliate links — the domain name, followed by a slash and then followed by code in this format: ?ref=[affiliate ID number]
In early 2006, the affiliate ID numbers for DailyProSurf were low numbers such as 30 and 75, which means the program was just getting started, likely using the same script that powered other autosurf sites. (Type dailyprosurf.com/?ref= into Google to see some of the search results. You’ll also see 12DailyPro affiliate links using the same format in the search results.)
Within a month of Bowdoin’s October 2006 launch of AdSurfDaily –Â just two months after Bowdoin had registered the DailyProSurf name in Florida — members complained about not getting paid by ASD. ASD provided a number of excuses, according to members, telling participants that script problems were at fault.
By February 2007, ASD was coming apart at the seams. Bowdoin announced the formation of a new corporation that would be known as “AdSalesDaily” — as opposed to “AdSurfDaily” — and he offered “stock” in the company to buyers willing to pay the minimum price of $10,000, according to participants.
A similar pitch had almost landed Bowdoin in prison in Alabama in the 1990s; investigators attributed 89 separate instances of fraud to Bowdoin, including an assertion that he had used money from new investors to pay off older ones, the central element of a Ponzi scheme.
Feeling the heat from early ASD members in February and March 2007, Bowdoin sought to keep them at bay. Bowdoin ventured from Florida to Atlanta to speak with unnamed “leaders” and work on solutions, he told members.
The solution he ultimately arrived at, prosecutors said, was to relaunch the surf under the name of ASD Cash Generator, port old accounts to the new surf — and not tell new members that they were paying for liabilities racked up by the original ASD.
The Beginning Of The End
During the months of February and March 2007 — a full year before ASD began to rake in the kind of money 12DailyPro and PhoenixSurf had raked in — Bowdoin made a catastrophic mistake that ultimately would come back to haunt him and lead to ASD’s undoing: He started donating money to the National Republican Congressional Committee (NRCC), even as ASD members were complaining about not getting paid.
In 2008, a false story pushed by ASD members that Bowdoin had received a special award from the White House for a lifetime of business achievement began to circulate online, prosecutors said. What members pushing the story did not know — because Bowdoin did not tell them — was that the award was for NRCC campaign contributions, not business achievement, and that there was a paper trail to prove it.
It is a virtual certainty that Bowdoin’s NRCC contributions came from the proceeds of a Ponzi scheme.
Because of his political donations and business filings, Bowdoin’s name and address appeared in both federal and state databases accessible to any person with an Internet connection.
The paper trail led to the campaign donations — and it also led to what prosecutors called a fraudulent address: 13 S. Calhoun St., Quincy, Fla. It was the address Bowdoin had used for AdSurfDaily, AdSalesDaily and DailyProSurf in public filings. Crucially, however, it was not the actual address of the former flower shop owned by Bowdoin’s wife that went on to become Bowdoin’s headquarters for various businesses, including ASD.
Older filings in the Florida Department of State database listed the address of the building as 11 S. Calhoun, but newer filings in the Florida database and the Federal Election Commission database listed the address as 13 S. Calhoun.
ASD also used the 13 S. Calhoun address on its website.
“[T]he address listed on ASD’s webpage is not a valid mailing address,” prosecutors said. “The address 13 S. Calhoun Street, Quincy, Florida does not exist. A building located at 11 S. Calhoun Street is a now defunct flower shop that used to be run by Bowdoin’s wife. It appears that Bowdoin or one of his associates merely posted the number 13 on another door attached to the same building.
“ASD has been receiving mail there.” (Emphasis added).
Bowdoin, a man who registered a hybrid surf that borrowed from the names of two infamous Ponzi schemes that had raked in nearly $100 million practically overnight, found himself in a trap of his own making because of the allegations he had fabricated a mailing address.
ASD told members it was impossible to operate because the government seized its money and its computers, but prosecutors returned the computers at ASD’s request and did not object to a hearing the company requested to have some of its money unfrozen. ASD lost the hearing because it could not demonstrate it was operating legally. Its clear route out of the Ponzi thicket was to produce an audited balance sheet that demonstrated solvency. ASD did not do so.
Why did ASD not restart after its computers were returned if it truly was an “advertising” business? One of the reasons is that it knew its audience would flee unless it was getting paid to surf, prosecutors said.
But there could be another reason that is equally revealing.
Because Bowdoin allegedly had used a bogus address to set up ASD, had publicized the address on the ASD website and had received mail at the address, any further business activity from the former flower shop involving mail could be construed as additional evidence of mail fraud.
If prosecutors are correct that 13 S. Calhoun was a bogus address, count after count of mail fraud could have piled up had Bowdoin reopened ASD and continued to use the address. Changing the address could have been construed as an acknowledgment that mail fraud had occurred earlier.
Although ASD owned another building in Quincy outright after having paid $800,000 cash for it, prosecutors said the building had been acquired with the proceeds of a crime. Moving wasn’t a good option because it could not undo the damage that had been done by using the 13 S. Calhoun mailing address.
Federal Election Commission (FEC) records show that Bowdoin, using the name “AdSalesDaily” and the address of 13. S. Calhoun, made the first of his political donations on Feb. 27, 2007, even as ASD members were clamoring for their cash. His first donation was for $250. He matched it in March 2007, with another $250 donation. In 2008, using the name “AdSurfDaily” and the address of 13 S. Calhoun, Bowdoin donated $5,000 to the NRCC.
Missing Dreams Now, ‘See Those Checks’ Then
As was the case with 12DailyPro, many ASD dreams have gone missing.
Although the DailyProSurf domain name also went missing, the public filing Bowdoin made in Florida using the 13 S. Calhoun address did not. And neither did records pertaining to his campaign donations in the names of “AdSalesDaily” and “AdSurfDaily,” both of which also used the 13 S. Calhoun address.
Andy Bowdoin, indeed, demonstrated a remarkable capacity to attract money.
“Thank you, God, for destining me to great wealth,” he exhorted the Las Vegas crowd to internalize and recite during the day.
And he exhorted members to picture themselves wealthy.
“See a big check coming in from AdSurfDaily,” he urged. “I signed a check the other day, about $22,000. See those checks like that coming for you constantly, just flowing to you.”
BULLETIN: (4th Update 9:13 p.m. EDT U.S.A.) Accused Ponzi schemer Paul Burks ran a “pyramid scheme” known as FollowMe1X2 that was a precursor to ZeekRewards, federal prosecutors say.
