UPDATED 12:03 P.M. EDT (U.S.A.) One day after AdSurfDaily Inc. revealed in court filings that it was negotiating with federal prosecutors, the AdViewGlobal (AVG) autosurf announced it had been the victim of a $2.7 million theft.
AVG, which purports to be headquartered in Uruguay, said it reported the theft to state and federal authorities. If confirmed, it may mark the first time in history that a surf filed such a report. Autosurfs frequently are associated with Ponzi schemes and the sale of unregistered securities.
“Legal complaints have been filed in both cases and are currently being pursued by law enforcement authorities at both the state and federal levels,” AVG said in an announcement to members.
It was not immediately clear if the surf was conceding it was headquartered in the United States, rather than Uruguay. The surf did not identify the agencies to which it had reported the alleged theft.
AVG identified two suspects, saying they once were affiliated with the eWalletPlus payment processor. Some members had been clamoring for the surf to name suspects.
“We’ve been reluctant to share this information with you, because we were under the impression that the money would be returned within a fairly brief period of time. In the past 24 hours, however, we’ve learned that it could take 6 months to a year to get the money back to us,” AVG said.
AVG did not say how it got the impression that the money would be returned in “a fairly brief period of time.” Nor did it reveal how it learned it could take up to a year to recover the money or that the funds even were recoverable.
Federal prosecutors said in December that ASD President Andy Bowdoin never reported a $1 million theft at the purported hands of “Russian” hackers. The allegation is contained in a Dec. 19 forfeiture complaint that names George and Judy Harris as beneficiaries of illegal conduct by ASD.
Today is the one-year anniversary of the formal seizure of tens of millions of dollars from ASD by the U.S. Secret Service.
George Harris is Andy Bowdoin’s stepson; Judy Harris is the wife of George Harris. AVG announced last month that George and Judy Harris owned AVG. Since that time, a Pinksheet stock known as Vana Blue (VBLU.PK), which says it owns Karveck International and the associated eWalletPlus payment processor, has clouded the issue of what individual or company actually owns AVG.
In today’s announcement, AVG did not say if George or Judy Harris — or another management employee — contacted authorities to report the alleged theft.
AVG did say it was seeking a new chief financial officer, compliance officer and department heads for public relations, customer service and new projects. The surf did not say whether it had fired employees who held those jobs previously.
“We’re undergoing a complete overhaul of all management positions and procedural systems,” AVG said. The surf added that it was recruiting from within and that applicants are required “to sign a confidentiality agreement that will be strictly enforced.”
The surf did not say whether the successful candidates would be required to move to Uruguay.
AVG, which announced June 25 that it was suspending member cashouts and making an 80/20 program mandatory if and when payouts resume, said today that it was “evaluating the extent to which the inflated page impressions amassed by some members created artificial cash balances.”
Members said AVG’s frequent use of 200-percent, matching bonus programs for both recruits and sponsors — coupled with an in-house, member-to-member cash button — led to some downline groups and individuals owning millions of page impressions and creating untenable liabilities for the surf.
How AVG intends to deal with the liabilities it created through unchecked bonuses and purported abuse of the cash button is not clear. By suspending payouts June 25, the surf exercised its version of a “rebates aren’t guaranteed” clause.
Some members said they will not surf until cashouts resume because each advertisement AVG displays erodes profitability for individual members.
“We sincerely hope that you’ll continue to support us . . . and keep on surfing! AVG said today.
See July 23 story.
See July 27 story.