From an SEC exhibit filed last week in the SEC’s case against eAdGear, an alleged international pyramid- and Ponzi scheme that gathered $129 million. Redactions by PP Blog.
EDITOR’S NOTE: eAdGear, which had entities in California and Hong Kong, “primarily” targeted “investors in the U.S., China, and Taiwan” and gathered $129 million in a combined pyramid- and Ponzi scheme that engaged in brand-leeching, the SEC alleged last week. An MLM scam known as WCM777, which allegedly gathered more than $80 million, also engaged in brand-leeching while targeting Asian communities, according to court filings. The SEC sued WCM777 in March 2014. Among the SEC’s alarming allegations against WCM777 was that it planted a false seed that it had partnerships “with more than 700 major companies such as Siemens, Denny’s, and Goldman Sachs.”
“This new approach to Internet advertising has businesses of all sizes, from small home based businesses to large corporations such as Google, Starbucks, Kodak, etc., joining ASD,” a 2008 promo for ASD read. “Not only are there over 75,000 small businesses advertising with ASD, but now major corporations are as well. Remember, a part of the daily rebate comes from the revenue corporations pay to advertise with ASD.”
It was all a crock. The U.S. Secret Service, which opened an undercover probe in July 2008, went on describe ASD as a “criminal enterprise.” ASD President Andy Bowdoin was convicted of wire fraud in the ASD Ponzi case. He is serving a lengthy term in federal prison.
Even while it was operating, ASD talked about a nascent “Chinese” arm known as Golden Panda Ad Builder. In retrospect, it now appears that plans to involve Asian populations in HYIP schemes were well under way at least by 2008 and since have evolved into frauds that were even larger than ASD. (ASD gathered $119 million and has been eclipsed in dollar volume by at least three Internet-based investment scams since then: TelexFree (possibly $1.2 billion); Zeek Rewards (c. $850 million); and eAdGear ($129 million). Falling just short of making this list were Zhunrize (allegedly $105 million) and WCM777 (allegedly $80 million). It is clear from court filings that Zeek also had a presence in Asian communities.)
There also was a tertiary scam inside the ASD scam. Indeed, promos for an entity known as ASD Offer Universe encouraged members to click on Google ads so ASD would earn fees of up to $5 a click. Here’s now that promo began (italics added):
“ASD ENTERS INTO AGREEMENT WITH GOOGLE FOR NEW CONSUMER SITE. Months ahead of schedule, Google and ASD Offer Universe are now teaming up to show Google ads on the site. Google, after seeing all of the major advertisers already being shown on ASD Offer Universe agreed to enter into a relationship with ASD.”
Did the eAdGear “program” channel long-ago events at ASD to help its massive pyramid scheme grow?
ASD was a purported “advertising” firm that operated a “rotator.”
Let’s compare what happened at ASD in 2008 to what the SEC now says happened at eAdGear, accused by the agency last week of operating a $129 million pyramid- and Ponzi scheme and positioning itself as an advertising company and an SEO firm.
By at least March 2014, the SEC says in court filings, investigators learned of a promo for eAdGear that read, “Google and Yahoo are partnering up with eAdGear for SEO services!!”
In the land of serial promoters of MLM or direct-sales HYIP scams, it’s as though the ASD case never happened.
The name-dropping and toxic disingenuousness associated with eAdGear hardly were limited to the abuse of the names of Google and Yahoo, according to SEC exhibits filed in the eAdGear case. It appears there were at least 253 incidents of brand-leeching associated with eAdGear. Indeed, eAdGear appears to have planned its ascent to the upper echelon of the fraud sphere by deliberately placing bogus ads for famous companies into its ad “rotator” to create a false sense that its “program” was legitimate.
Target Corp., the famous retailer, had its brand leeched, the SEC alleged. So did Lbrands, the Columbus, Ohio-based company that owns Victoria’s Secret
Now, let’s look at some of the behind-the-scenes investigative work performed by the SEC. Court filings by the agency show that, on July 1, 2014, the SEC issued a subpoena to Yahoo to check on the eAdGear-associated claims.
Yahoo responded on July 10 by advising the SEC that it had “identified no contracts or agreements with eAdGear[].”
Meanwhile, according to court filings, the SEC made an inquiry at Google on June 30. Google responded on July 22, advising the agency that it “is not aware of any commercial relationship between [eAdGear] and Google.”
Because ads for famous companies, including Target, Gap Inc. and Victoria’s Secret, had appeared in the eAdGear “rotator,” the SEC contacted those companies. (The response by L Brands Inc., owners of Victoria’s Secret, is shown above.)
Target responded by searching its database of vendors to which it had issued payments. No records surfaced for eAdGear, according to the SEC. Gap, similarly, informed the SEC that it had no record of doing business with eAdGear.
What else does the SEC have? Well, according to court records, it has internal eAdGear email correspondence that shows an employee was instructed to place 253 links to famous companies in its rotator.
These companies included Avon, Sears, Nordstrom, eBay, QVC, HSN, J.C. Penney, Banana Republic, Dillard’s, Kohl’s, Macy’s, Amazon.com, Men’s Wearhouse, Kmart, New York magazine and more.
These are among BCSC’s assertions — under a subheading titled “False impression of paid advertisements and advertising revenue”:
Bossteam described itself on its websites, in documents and in presentations as an online advertising business having huge growth potential and ready to become a leading global online advertising company. It referred to well-known online businesses such as Google, Amazon and eBay, and to the fast-growing advertising revenues of these businesses.
Although hundreds of “ads” appeared on the advertising platforms, the majority of the ads posted on Bossteam’s websites were associated with Bossteam’s own administrative accounts (accounts accessible by those controlling its systems) and not to accounts for advertisers or members who had paid to post links to their websites on Bossteam’s websites.
Ads associated with Bossteam’s administrative accounts included webpages for well-known local and international businesses.
Local businesses whose webpages appeared on Bossteam’s websites included a restaurant, a security systems company, a heating company and a private career college. Websites of well-known businesses and personalities included World Wrestling Entertainment, Miriam Webster and Britney Spears.
Posting the websites of local and international businesses on Bossteam’s websites without payment created a false impression that such businesses were advertising on Bossteam’s websites and paying Bossteam to do so.
Because Bossteam and eAdgear were similar businesses and appear largely to have targeted members of the Asian community, one has to wonder whether the schemes had promoters in common. For now, at least, the answer is unclear. What is clear is that some promoters simply move from one fraud scheme to an another when the “program” of the moment craters or encounters regulatory scrutiny.
Serial HYIP huckster and Zeek figure T. LeMont Silver currently is in name-dropping overdrive for BitClub Network, one of his latest “programs.” Silver’s name has surfaced in private lawsuits involving eAdGear and an interconnected enterprise known as Go Fun Places, which is referenced in the SEC’s eAdGear case. (For one instance, see the reference to Go Fun Places within the letter from L Brands to the SEC in the graphic above.)
EDITOR’S NOTE: The PP Blog is back — after its most recent brush with death led to a suspension of publishing that lasted through all or parts of six days. You’ll read more in the days ahead about certain changes the Blog plans to implement to safeguard its right to publish, to improve revenue, to make it less reliant on a small group of dedicated readers to put out fires and to keep its archives open to the people who can benefit most.
As for the editorial below: Some of it is based on “Government Exhibit G” and other government exhibits in the criminal prosecution of AdSurfDaily Ponzi schemer Andy Bowdoin. Exhibit G was filed on Aug. 13, 2012, four days before the SEC went to federal court in Charlotte, N.C., and alleged that the Zeek Rewards MLM “program” was a $600 million Ponzi- and pyramid fraud that had victimized hundreds of thousands of participants. Among other things, Exhibit G addressed Bowdoin’s participation as a silent partner in the AdViewGlobal reload scam. Another court document filed by prosecutors on the same day addressed Bowdoin’s participation in OneX, which prosecutors described as yet-another MLM-style scam in which Bowdoin had participated after the U.S. Secret Service moved against ASD in August 2008 and eventually seized more than $80 million.
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The evidence sticker from “Government Exhibit G” in the criminal prosecution of AdSurfDaily Ponzi schemer Andy Bowdoin. (Red bar added by PP Blog.)
Let’s talk about pollution and how it may be flowing to a bank near you:
AdSurfDaily Ponzi schemer Andy Bowdoin used a secret hushmail address in 2009 to discuss a bank wire for $38,750 that was to be sent to an account at Regions Bank in Fort Lauderdale, Fla., to pay for servers and programming required by AdViewGlobal.
AVG, as it was known, was an ASD reload scam that began to unfold in October 2008, just two months after the U.S. Secret Service began the process of seizing more than $65.8 million from at least 10 Bank of America accounts linked to ASD, according to government records.
The Secret Service, according to court filings, also had its eyes on separate Bank of America accounts linked to an ASD-connected enterprise known as Golden Panda Ad Builder. Golden Panda was operated by Rev. Walter Clarence Busby Jr., a Bowdoin business partner and Georgia grifter implicated by the SEC 11 years earlier in three prime-bank swindles, including one that promised to pay interest of 10,000 percent. Some of the Golden Panda money also made its way into Bartow County Bank, a small Georgia bank that later failed, costing the Federal Deposit Insurance Corp. an estimated $70 million, according to government records.
From this fact set, one can plainly see that ASD and related scams had caused polluted money to flow to Bank of America and Bartow — and that the noxious and ever-evolving ASD enterprise now had its sights on causing polluted money to flow to Regions. That’s three banks put in harm’s way by what effectively was an evolving ASD criminal enterprise.
There were more.
At least $413,018 in ASD-infected funds also had made their way into accounts at First National Bank in Ames, Iowa. Another $96,525 in polluted proceeds flowed to two accounts at Wachovia Bank. (The U.S. state in which Wachovia was used to stockpile $96,525 in fraudulent proceeds directed at an ASD member is unclear. What is clear, according to federal court filings, is that the ASD member allegedly was using ASD to promote a “multi-level marketing site that listed classified job postings” and that 17 checks from ASD were deposited into the Wachovia account on a single, fateful day.)
That day was July 31, 2008.
History shows that the Secret Service moved against ASD the very next day, Aug. 1, 2008, as a means of stopping the ASD Ponzi monster from sucking in any more cash and from polluting any more banks. The ASD member with the Wachovia accounts had “sponsored 6-8 people to get into the ASD system,” and somehow had managed to receive nearly $100,000 in tainted proceeds after paying ASD only $500 and working as a “consultant” to ASD “for a brief period,” according to court records.
Because ASD used infected proceeds to pay members with accounts at banks across the U.S. spectrum of hundreds of institutions, each of those institutions became places at which wire-fraud proceeds were deposited. The total flow of fraudulent proceeds linked to Bowdoin and follow-up scams exceeded $120 million, according to federal court files.
But it gets worse . . .
At Least 2 Swiss Accounts Discussed In Exchanges Over Hushmail And Gmail
Why not infect Europe with American Ponzi proceeds?
This is the clincher, the one event that — in the context of other ASD-related events — shows the rampant criminality within the ASD enterprise and this particular wing of MLM. This criminality caused federal prosecutors to describe Bowdoin as a man who roped in at least 96,000 people in part by asserting that his “programs” reflected “God’s will.”
Bowdoin, prosecutors said, indeed was the personification of a con man and affinity fraudster who “boldly continued or expanded his criminal conduct” even after the Secret Service raid in August 2008.
Just two months later, in October 2008, Bowdoin and a former ASD insider held discussions aimed at launching AVG, the ASD reload scam that allegedly sucked in millions of dollars — in part by targeting ASD members all over again. The sources for this information are a government sentencing memo and “Government Exhibit F,” filed on Aug. 13, 2012, four days before the SEC’s Zeek action and confirmation by the Secret Service that it also was investigating Zeek.
Exhibit F is styled “Summary of AdView Global by T. Andy Bowdoin, Jr.” Precisely when and how the government obtained the document is unclear, but prosecutors say Bowdoin drafted it in “memo” form. Agents are known to have seized ASD-related computers. It also is believed that the government seized at least one AVG-related computer.
The undated document features a narrative in which Bowdoin, despite the Secret Service raid of ASD and ongoing civil and criminal investigations, suggests he was still sticking to a cover story that ASD was an “advertising” company, not an investment company offering securities that paid a preposterous interest rate of 1 percent a day while magically constituting neither a Ponzi scheme nor an investment firm. In fact, according to the document, AVG hoped to ward off the U.S. government by establishing some sort of presence in Uruguay.
Another part of the AVG launch plan was to attract “30 founders” in December 2008. In the Exhibit F document, Bowdoin also planted the seed that the nascent AVG MLM program had been vetted by “attorneys.”
These unidentified “attorneys” purportedly had advised Bowdoin that prosecutors would not be interested in establishing whether the AVG upstart “was OK,” even if Bowdoin submitted an AVG business plan, according to Exhibit F. Bowdoin then moved forward with AVG, despite all that had happened at ASD. Both before and after the ASD debacle, according to assertions by prosecutors, Bowdoin claimed he had acted “on the advice of counsel” and therefore had done nothing wrong.
“Bowdoin’s reliance on the ‘advice of counsel’ defense became a theme in both the civil and criminal litigation,” prosecutors advised a federal judge.
It was a defense that failed miserably, as various entries on the public record show. And when Bowdoin got in trouble again — this time for promoting an alleged pyramid scheme known as “OneX” while out on signature bond in the ASD criminal case even as he asserted the OneX “program” had been vetted by attorneys and passed muster and that recruits could earn to the limits of their imaginations — Bowdoin again defaulted to an advice-of-counsel defense.
This time, however, Bowdoin appears to have merely repeated false assertions that he’d heard from OneX or someone within OneX. The government responded by producing an affidavit from an attorney who’d performed work for OneX but never had drawn a conclusion the “program” was lawful and had never examined the actual business practices of OneX. The attorney swore in an affidavit filed under pain of perjury that the law firm through which he represented MLM clients “has never represented” Bowdoin. (The PP Blog is declining to identify the attorney, a partner in a Southern California law firm.)
Back to AVG, the scheme Bowdoin helped launch before later trying to sanitize the alleged OneX pyramid scheme by claiming it had been scrubbed clean by attorneys: Bowdoin was to own two-thirds of AVG; the former ASD insider would own the remaining third, according to Exhibit F.
Among other things, the document shows some of the fractured thinking and incongruities so often associated with HYIP scams. Despite the purported need for an offshore presence to ward off U.S. investigators, for instance, the document asserts that Gary D. Talbert, identified elsewhere as an ASD insider and one-time executive, had hired AVG “customer service people in the U.S.” (Bolding added by PP Blog.)
Web records show that AVG had come out of the gate with two impossible (if not insane) propositions: The first was that AVG was just like the NBC television network, an absurdity on its face in that NBC doesn’t pay its advertisers to watch ads. Moreover, NBC, unlike the collapsed AVG, doesn’t operate a closed network in which only NBC’s advertisers and not the public at large can view ads. Nor does NBC try to recruit advertisers by telling them they’ll receive a dividend of 125 percent (or more) on their ad spend within a few months and that its advertisers can earn downline commissions two levels deep by recruiting competitors to advertise on NBC’s closed network.
The second proposition was even more absurd: that AVG had nothing to do with ASD. The absurdity of this obvious lie was exposed before January 2009 even had ticked off the calendar. Indeed, after earlier asserting that AVG had no ties to ASD, the company — using a U.S.-based AVG customer-service rep who’d actually testified on ASD’s behalf in federal court — announced that ASD’s Talbert was its CEO. If this weren’t absurd enough, AVG insisted through the former ASD member now working as a AVG spokesman that the appearance of AVG graphics in an ASD-controlled webroom was an “operational coincidence.”
AVG went on to pile on the absurdities, according to court filings. In Exhibit F, the document prosecutors say was Bowdoin’s draft memo of his AVG reflections, members of Bowdoin’s family who allegedly benefited from ASD Ponzi proceeds are described as heroes who tried to save AVG from the thieves.
With ASD’s Bowdoin’s knowledge, Talbert, according to Exhibit F, also purchased an Arizona “company named TMS” that owned a payment processor named “eWallet.” (Other records strongly suggest that the payment processor actually was named “eWalletPlus” and was operating from servers AVG was using in Panama.)
“TMS used a bank in the Caribbean,” according to the document. The signatory on the Caribbean account somehow never was changed after the asserted change in ownership at TMS, and two former TMS associates allegedly stole nearly $2.7 million from AVG. The theft of nearly $3 million led to the collapse of AVG, according to the telling attributed to Bowdoin in the document.
To date, the PP Blog has been unable to ascertain the truthfulness of the assertions about the thefts allegedly committed by the alleged former TMS insiders.
What is clear, however, is that as much ASD money that could be found in August 2008 was seized. AVG then launched with cash that hadn’t been seized, and in part was targeted at ASD members. AVG members then were left holding the bag, with the blame placed on former TMS associates.
And something else is clear, which brings us to “Government Exhibit G”: AVG, the follow-up scam to ASD that involved Bowdoin and ASD insiders and alleged thefts of millions of dollars by outsiders, had at least two Swiss bank accounts.
One of AVG’s Swiss bank accounts allegedly was discussed in this email between Andy Bowdoin and Gary Talbert. Bowdoin was ASD’s operator; Talbert was an ASD insider who allegedly became Bowdoin’s business partner in the AVG Ponzi scheme that sucked away millions of dollars. (Red lines inserted by PP Blog.)
On Jan. 28, 2009, just days before AVG’s scheduled launch date in early February and less than six months after the Secret Service raid on ASD’s headquarters and Bowdoin’s home in Quincy, Fla., Gary Talbert used a Gmail address to email Andy Bowdoin at a hushmail address, according to Exhibit G.
Talbert advised Bowdoin that an individual — presumptively one of the 30 AVG founders — had conducted a “Wire Transfer to AVG Swiss Bank Account” and needed assurances that it had posted. The inquiry about the asserted wire transfer appears to have been initiated by another AVG insider who’d emailed Talbert from his Gmail address to Talbert’s Gmail address. Through Gmail, Talbert then checked with Bowdoin at Bowdoin’s hushmail address, instructing the ASD patriarch that someone wanted to “verify that a bank wire hit the Swiss bank account.”
Upon verification, the customer would make “another large wire,” Exhibit G suggests.
Another email within the January 2009 chain says that AVG had at least two Swiss accounts.
What It Means
Walking this back and assuming the Exhibit G communications were truthful, what it means is that the ASD enterprise — this time in the form of AVG — had set up a banking operation in Switzerland, a secrecy haven. At the same time, it means that the ASD enterprise did this after it earlier had polluted U.S. banks in multiple states with fraudulent proceeds and now was taking its act not only to Switzerland, but also to South America, Central America and the Caribbean.
Less clear is whether ASD had a preexisting banking network in Switzerland before effectively morphing into AVG. Regardless of when the Swiss accounts were opened, however, the mere presence of them suggests that ASD and AVG insiders had the means to move fraudulent proceeds from U.S.-based crimes offshore and perhaps tap into them later.
And this brings us to Zeek Rewards, which also used domestic and offshore facilitators and the same fundamental business model of ASD and AVG. It also brings us to Profitable Sunrise and other MLM “programs” such as Better-Living Global Marketing. The now-disappeared Profitable Sunrise scheme allegedly used U.S. bank wires and offshore facilitators to drive tens of millions of dollars to the scheme. BLGM, still active, clearly has U.S. promoters and facilitators while purportedly operating from Hong Kong.
Meanwhile, BLGM, like ASD, AVG, Profitable Sunrise and Zeek Rewards, has Stepfordian “defenders” running interference online.
One of those “defenders” is over at the BehindMLM.com antiscam Blog asserting that he “met a guy online. I know him well now. I deposited $6500 into his Bank Of America account at my local branch.”
Another BLGM defender is at BehindMLM.com asserting that (italics added):
Got my Hongkong wire/remittance of 6,000 USD at Bank of America, have all my questions and concerns answered by Luke Teng, the teleconference helped a lot, disregard all the unnecessary comments of non-members.
Get all your transparent answers from Luke Teng, or else you will die of stress reading all the negative comments of people who are not engaging, and guys remember this is our freewill and our own money, our decision, our own risk.
TelexFree, a scheme more or less operating globally that has U.S. footprints in Massachusetts and Nevada and is under investigation in Brazil, also used Bank of America, according to members. Some TelexFree promoters instructed recruits to walk deposits meant for TelexFree into a Bank of American branch in Massachusetts or TD Bank locations elsewhere. TD Bank, of course, was the bank of Florida Ponzi schemer and racketeer Scott Rothstein. Four years after Rothstein’s $1 billion-plus scam brought great shame to the banking community, it’s still causing ripples.
The PP Blog previously reported that a former Zeeker who also was associated with Profitable Sunrise — an alleged international pyramid scheme that funneled tens of millions of dollars to Europe, China and Panama amid the murkiest of circumstances — also was pushing BLGM.
All of these “programs” are operating or have operated within the MLM sphere, the same sphere that produced the incredibly toxic ASD/AVG Ponzi schemes. All of the “programs” either have or had access to the wire facilities of various nations around the globe while using Ponzi- and pyramid schemes as their business model.
The Piggybackers
Various destructive forces are piggybacking on the scams, including attack bots and spambots that are keying on the names of HYIP enterprises and HYIP story figures to promote other scams or to drive traffic to other highly questionable “opportunities.”
Even after the PP Blog announced the temporary suspension of the publication of new stories last week, it continued to be targeted by resources-draining bots. One wave knocked the Blog offline for about an hour two days ago. During the involuntary outage, legitimate readers and researchers could not access the Blog.
One of the spammers left the signature of an IP associated with the country of Indonesia. A spam bid from the specific IP keyed on a PP Blog story about ASD figure and purported “sovereign citizen” Kenneth Wayne Leaming, now in federal prison for targeting U.S. federal officials and a Secret Service agent in an abuse campaign, harboring fugitives and possessing firearms as a convicted felon. Records in Washington state show that a Leaming-connected enterprise once traded on the name of JPMorgan, a famous banking concern. (“Sovereign citizens” are becoming increasingly infamous for harassing banks.)
Another spammer — one that left an IP signature from Belarus — also targeted a Leaming story thread at the PP Blog.
In recent weeks, the Blog has recorded data that plainly show that botnets, spambots or human spammers are circling antiscam sites and attempting to execute command strings that — if enough volume is applied — can cause databases to malfunction or even cause the sites to go offline.
This creates an atmosphere that affects the publishing of information not only on current scams, but also on emerging scams and scams of the past. The downstream effects are potentially ruinous — and yet it continues.
ASD and AVG were discredited long ago. But scams that use their core business model not only are launching, but in some cases thriving. Serial promoters are racing from one fraud scheme to the next. This sets the stage for schemes to fill up the world’s largest sports stadiums eight or 10 times over with victims. In 2008, ASD could have filled the Rose Bowl to capacity with victims one time. By 2012, Zeek could have filled the Rose Bowl with victims 10 times.
The “defenses” for these various schemes range from the bizarre to the utterly mindless — and they absolutely must be decimated with the full, combined weight of the various world governments.
It is in the interest of the worldwide public to connect the dots of these schemes and to eradicate them through the maximum application of the force of law. Left unchecked, they will erode the very foundations of freedom and permit the criminal underworld of MLM to thrive.
With federal prosecutors in the District of Columbia now saying AdSurfDaily President Andy Bowdoin was involved in multiple fraud schemes after the U.S. Secret Service seized $65.8 million from his personal bank accounts in August 2008 in a Ponzi probe, the ASD patriarch now faces a bond-review hearing in Washington.
U.S. District Judge Rosemary Collyer has scheduled the hearing for May 8.
Prosecutors pointedly asserted on April 17 that Bowdoin, 77, was promoting a “fraudulent scheme” known as “OneX,” informing Collyer that Bowdoin’s OneX pitches began in 2011 –after Bowdoin was indicted in 2010 on charges of wire fraud, securities fraud and selling unregistered securities in his operation of ASD.
Collyer now has ordered prosecutors to present “all evidence (written and testimonial) regarding Defendant’s alleged involvement in OneX or any other alleged Internet scheme since the Indictment in this case.”
Bowdoin’s OneX pitches, which mixed in commentary about his criminal case, began in October 2011. The ASD-related indictment against him was unsealed in November 2010 and announced publicly on Dec. 1, 2010.
Prosecutors also say Bowdoin was involved in AdViewGlobal, an autosurf that came to life in late 2008 and early 2009 — after the August 2008 Secret Service seizure. At the same time, prosecutors say Bowdoin, Clarence Busby and “others” were involved in the operation of the Golden Panda Ad Builder autosurf, the so-called “Chinese” version of ASD.
Money from at least five Golden Panda bank accounts was seized as part of the ASD probe in 2008. All in all, the combined sums seized from ASD and Golden Panda totaled about $80 million.
Compound150 says it is a spinoff of T2MoneyKlub, while targeting "compounding lovers" like a sandwich joint targets lovers of cheeseburgers.
The ink was barely dry on the most recent civil judgments for millions of dollars against serial HYIP pitchman Matthew J. Gagnon when Compound150 launched yesterday. On Tuesday, the SEC announced $4.2 million in new court-ordered assessments against Gagnon, who’d earlier been hit with more than $2.5 million in assessments in a related case and became the subject of a criminal complaint filed by the U.S. Secret Service.
Gagnon was a web-based pitchman for the Legisi HYIP Ponzi scheme and other high-yield “opportunities,” including a “program” in which his alleged partner was a twice-convicted felon. The SEC essentially charged Gagnon with turning a blind eye to obvious fraud schemes — repeatedly.
Apparently not taking the clue that HYIP promoters are at risk of both civil and criminal prosecution, the operators of JSS Tripler 2 have launched the Compound150 feeder scam, a companion to the original JSS Tripler 2 scam. After suspending member payouts in December 2011 amid reports of an AlertPay freeze, JSS Tripler 2 — also known as T2 — gave itself a new name: T2MoneyKlub.
The addition of the Compound150 scam means that the entity — purportedly operated by “Dave” from locales ranging from Britain to Cambodia to Thailand — means that the original JSS Tripler 2 entity now has a third entry in its scam lineup.
But the strangeness does not end there: Indeed, JSS Tripler 2 reportedly based its original name on JSS Tripler, a purportedly unrelated “program” whose affiliates became the subjects in January of a probe by CONSOB, the Italian securities regulator. Compound 150 reportedly launched during a period in which “Dave” was building prelaunch buzz while simultaneously battling (or recovering from) a bout with Dengue fever.
In the fraud sphere, it is common for “opportunities” to refer to illnesses, server problems or catastrophes such as typhoons. In upholding the 20-year prison sentence of pyramid schemer Seng Tan, the U.S. Court of Appeals last month pointed out that Tan — who targeted the scam she ran with her husband at Cambodian émigrés in the United States — blamed the scam’s inability to make payouts on Hurricane Katrina.
Tan’s husband — James Bunchan — ultimately received sentences totaling 60 years because he discussed murdering witnesses and the federal prosecutor who brought the case.
How strange could the JSS Tripler2/T2MoneyKlub/Compound150 “opportunity” get? The answer, perhaps, is that the sky is the limit. Perhaps positioning itself as a category creator, Compound150 says “compounding lovers” are among its target audience.
Compound150 apparently believes it is to multilevel marketing (MLM) what a fast-food chain is to lovers of cheeseburgers
Compound150 opened its doors amid a weekend flap at the MoneyMakerGroup Ponzi forum in which “Dave” — posting as Peakr8 — protested the forum’s description that the emerging opportunity was an HYIP, not an MLM opportunity.
“So are we a HYIP?” Dave asked.
“Hell no!” he answered himself, even as Compound150 was claiming on its website that it pays participants “1% daily for 150 days up to 150%.”
In effect, Compound 150 is advertising a (precompounding) annualized return of 365 percent, about the same purported ROI that led to the 2010 indictment of AdSurfDaily President Andy Bowdoin amid allegations he was operating an international Ponzi scheme.
If convicted on all counts in his September 2012 Ponzi trial, Bowdoin, 77, faces up to 125 years in federal prison and fines in the millions of dollars. As part of the ASD Ponzi investigation, the U.S. Secret Service seized the bank accounts of some individual ASD promoters.
Ten of Bowdoin’s personal bank accounts were seized — and five bank accounts allegedly involved in the operation of Golden Panda Ad Builder, a companion autosurf, were seized.
“Dave” was joined in his protest by JSS Tripler2/T2MoneyKlub/Compound150 shill “lolalola,” who insisted that Compound150 was an MLM.
In the civil portion of the ASD case, ASD also insisted it was an MLM. A federal judge was unmoved, ordering the forfeiture of more than $80 million, including more than $65.8 million from Bowdoin’s personal bank accounts.
An “opportunity” can at once be both an HYIP and an illegitimate MLM “program.” (Simply calling a program an ‘MLM” does not cure a program of legal defects, and some scams mix-and-math elements of both pyramid schemes and Ponzi schemes. Such programs may be described by investigators as pyramid-style Ponzi schemes.)
Compound150 appears to have a confluence of payout schemes very similar to the schemes that led to at least FOUR ASD-related forfeiture actions, the filing of a racketeering (RICO) lawsuit against Bowdoin, the seizure of tens of millions of dollars, millions of dollars in ASD-related civil judgments — and the ultimate filing of wire fraud and securities- fraud charges against Bowdoin.
Bowdoin also was charged with selling unregistered securities.
Like Bowdoin, Seng Tan also insisted her “opportunity” was an MLM.
BULLETIN: A Florida jury found that TD Bank assisted now-disbarred and imprisoned attorney Scott Rothstein in his epic Ponzi scheme and has found the bank liable for $67 million in damages.
The victorious attorney in the civil case is David S. Mandel, who represented the plaintiffs against the bank.
If Mandel’s name seems familiar to PP Blog readers, it’s because he also is the court-appointed receiver in the Commodities Online LLC fraud case brought by the SEC last year.
Separately, a company known as SSH2 Acquisitions Inc. had sued Commodities Online figure James C. Howard III on Sept. 15, 2010, alleging that Howard and others were running a massive Ponzi scheme into which SSH2 had plowed $39 million.
Records in Nevada show that former AdSurfDaily member and “Surf’s Up” forum moderator Terralynn Hoy was a “director” of SSH2.
Hoy has not been accused of wrongdoing.
The private lawsuit against Howard and the others became notable because of the clashing images: Although SSH2 was complaining about the alleged Ponzi scheme directed at it by Howard and others, it was doing so in the months after Hoy had helped lead cheers on Surf’s Up for accused ASD Ponzi schemer Andy Bowdoin, who was implicated by the U.S. Secret Service in an alleged Ponzi scheme even larger than Howard’s alleged scheme. Hoy also was a moderator on a forum that supported AdViewGlobal, an autosurf that vanished mysteriously in June 2009.
Now defunct, Surf’s Up was known for unapologetic, unabashed cheerleading for Bowdoin, whom federal prosecutors said had swindled investors in Alabama in a previous securities caper during the 1990s and took in at least $110 million through ASD. Clarence Busby, an alleged business partner of Bowdoin and the operator of the Golden Panda Ad Builder autosurf, swindled investors in three prime-bank schemes in the 1990s, according to the SEC.
More than $14 million linked to Golden Panda was seized as part of the ASD case — and yet the cheerleading for autosurf schemes continued on Surf’s Up. The forum labeled ASD pro-se litigant Curtis Richmond a “hero” after he accused the judge and prosecutors of crimes in 2009.
President Bush observes the 2006 swearing-in ceremony of incoming Transportation Secretary Mary Peters. Peters held the cabinet post between October 2006 and January 2009. Source: Wikipedia: White House photo by Paul Morse.
UPDATED 5:42 P.M. ET (U.S.A.) Public officials involved in the AdSurfDaily Ponzi case were not the only targets of bogus liens filed by Kenneth Wayne Leaming, according to federal prosecutors in Seattle.
Leaming, 55, also filed a lien against Mary Peters, the U.S. Secretary of Transportation under President George W. Bush during his second White House term, prosecutors said.
In addition, prosecutors said Leaming filed liens against U.S. District Judge Rosemary Collyer; former U.S. Attorney Jeffrey A. Taylor; former assistant U.S. Attorney William Cowden; current assistant U.S. Attorney Vasu B. Muthyala; and Roy Dotson, a special agent of the U.S. Secret Service.
Collyer is presiding over both the civil and criminal prosecutions connected to the ASD Ponzi case in the District of Columbia. The civil case, which led to the successful forfeiture of tens of millions of dollars in the personal bank accounts of ASD President Andy Bowdoin, was brought by Taylor’s office in August 2008.
Cowden and Muthyala assisted in the prosecution against ASD-related assets, including more than $65.8 million in Bowdoin’s 10 bank accounts and more than $14 million in other bank accounts linked to Golden Panda Ad Builder, a companion autosurf.
Dotson was a key investigator in the case, which was brought in part through the efforts of a Florida-based Task Force. Bowdoin was arrested in December 2010. He is free awaiting trial in the District of Columbia.
Taylor was succeeded as U.S. Attorney by Ronald C. Machen Jr. Machen’s office was sued pro se earlier this month by ASD members Todd Disner and Dwight Owen Schweitzer of Miami. Disner, a cofounder of the Quiznos sandwich franchise, and Schweitzer, a former attorney whose license was suspended in Connecticut, asserted that prosecutors engaged in “character assassination” against Bowdoin and that the forfeiture case consisted of a “tissue of lies.” They also claimed Dotson’s affidavit that led to the seizure of Bowdoin’s assets was flawed and that 4th Amendment violations had occurred.
Disner and Schweitzer also named Rust Consulting Inc., the government-approved claims administrator in the Ponzi case, a pro se lawsuit defendant. In September, Machen joined Assistant Attorney General Lanny Breuer in announcing that the government had returned $55 million to victims of the ASD Ponzi.
Collyer ordered the forfeiture of Bowdoin’s assets in January 2010. Her rulings were upheld by the U.S. Court of Appeals. Bowdoin, 77, is using Facebook and a website known as “Andy’s Fundraising Army” to raise money for his criminal defense on charges of wire fraud, securities fraud and selling unregistered securities.
Why Peters allegedly was targeted by Leaming was not immediately clear. But court records suggest the FBI is investigating Leaming ties to a Washington state group of “sovereign citizens” known as the “County Rangers.”
Leaming was arrested on Tuesday. On Wednesday, he appeared before U.S. Magistrate Judge J. Richard Creatura in Tacoma. Creatura ordered Leaming’s detention to continue. The date of Leaming’s next court appearance was not immediately clear.
Leaming, according to prosecutors, was found Tuesday with two federal fugitives from Arkansas who were indicted in February on federal charges related to an alleged envelope-stuffing scheme. Prosecutors identified the fugitives as Timothy Shawn Donavan and Sharon Jeannette Henningsen.
Donavan and Henningsen have court histories that include declaring themselves “living breathing free” people to whom laws do not apply, according to records. Like Leaming, they are being held at the Sea Tac Federal Detention Center near Seattle.
Leaming has been charged with retaliating against a Federal judge or Federal law enforcement officer by false claim or slander of title, an obstruction of justice statute.
Among the government’s allegations against Bowdoin is that he falsely claimed to have received an important award for business acumen from President Bush in 2008. ASD members used Bush’s name in online promos, according to records.
In July 2008 — as the Secret Service and the Task Force were investigating ASD — Bowdoin threatened to sue critics, according to court filings. After the seizure of his assets, he claimed the government’s action was the work of “Satan” and compared the seizure to the 9/11 terrorist attacks, which killed nearly 3,000 people in New York, Washington and Pennsylvania.
Cowden, whose name was repeatedly misspelled as “Crowden” by pro se litigants in the forfeiture case, was derided as “Gomer Pyle” on the now-defunct, pro-ASD “Surf’s Up” forum. One ASD member opined that Cowden should be placed in a torture rack. Another said a “militia” should storm Washington. Still another issued a “prayer” that called for prosecutors to be struck dead.
ASD critics were derided as “rats,” “maggots” and “cockroaches.”
In December 2010, prosecutors linked ASD to E-Bullion, a defunct California payment processor operated by James Fayed. E-Bullion has been linked to several Ponzi schemes.
Earlier this month, Fayed was formally sentenced to death for arranging the contract slaying of his estranged wife, Pamela Fayed.
Pamela Fayed was slashed 13 times in a Greater Los Angeles parking garage in July 2008 while James Fayed sat on a bench within earshot of Pamela’s screams, according to records.
At least one ASD member used E-Bullion to send money to ASD, according to federal court records. That member — former ASD “trainer” Erma Seabaugh of Missouri — was operating a purported “religious” nonprofit in Oregon and using ASD to promote a pyramid scheme, according to records.
In this Nov. 13 post, the PP Blog published a list of red flags concerning online promos for Text Cash Network (TCN), purportedly an emerging business “opportunity” involving text advertising and cell phones. A promo for TCN appeared — and then vanished — from a website linked to huckster Phil Piccolo, known online as “the one-man Internet crime wave.” Piccolo has been associated with other schemes that involved cell phones, namely Data Network Affiliates (DNA).
This post raises another red flag — and once again, the issue is about Piccolo’s potential TCN involvement or the involvement of Piccolo associates. In the DNA scam, the purported firm used generic YouTube videos to drive traffic to its purported opportunity. In 2010, for example, DNA incongruously posted a YouTube video known as “JK Wedding Entrance Dance” to its website, using the video to promote DNA.
The “JK Wedding Entrance Dance” video — a You Tube smash — had absolutely nothing to to with DNA. The video was designed in part to create awareness about domestic violence and to publicize the Sheila Wellstone Institute.
Sheila Wellstone was a human-rights advocate. She and her husband, Sen. Paul Wellstone, D-Minn., were killed in a plane crash in 2002. Their daughter, Marcia, died in the same crash.
After conducting a “prelaunch” event with much fanfare on Nov. 11 — Veterans Day in the United States — TCN now has added a You Tube video to its website. An all-caps line of “OFFICIAL LAUNCH 12/12/2011” appears below the video, which plays in miniature on TCN’s site.
But the video also is playing in full size on YouTube’s site. Text on the YouTube site dubs it “THE OFFICAL TEXT CASH NETWORK (TCN) – RIGHT HERE – RIGHT NOW” site. The upload date of the video is listed as Nov. 15, 2011: yesterday.
The same video, however, appears elsewhere on YouTube — and its upload date is listed as Jan. 26, 2009, nearly three years ago. Despite the upload date, the video also is promoting TCN, whose website appears to have been registered just last month.
Both videos raise questions about whether YouTube is being gamed by TCN and affiliates. Meanwhile, the videos use the same soundtrack by Fat Boy Slim: “Right here, right now.”
Among other things, Piccolo is known to use all-caps presentations and to hype “prelaunches” and “launches” for weeks. He also is known to hype launches by publishing the names of top promoters — something TCN is doing — and to try to stay in the background of “opportunities,” as opposed to becoming the public face of them.
Joe Reid, a known Piccolo associate, has served as a conference-call host for TCN. Reid also hosted conference calls for DNA, which was linked to Piccolo last year and served up Theatre of the Absurd and a sea of incongruities.
DNA, for example, misspelled the name of its own CEO — and didn’t advise members that the CEO had left the company for nearly a week. The former CEO told the PP Blog last year that the firm was engaging in “bizarre” conduct and a campaign of “misinformation and lies.”
After the former CEO agreed to an interview with the PP Blog, a PR handler who described himself as a conflict-management strategist” sought to intervene. As the year proceeded, DNA appeared to have both entered and exited the cell-phone business in a matter of weeks — while planting the seed that it would pay enormous rates of return to customers who provided it money, even as it purportedly entered businesses such as mortgage writedowns and offshore “resorts” after apparently abandoning its purported core business of helping police recover kidnapped children.
At one point, DNA was urging members to record the license-plate numbers of cars in a purported bid to assist the AMBER Alert program — while it was selling a purported “protective spray” that would make it impossible for cameras placed by police at intersections to snap usable photographs of the plates.
In 2009, another purported “advertising” opportunity known as Biz Ad Splash (BAS) used the same Fat Boy Slim soundtrack. Walter Clarence Busby Jr., the purported operator of BAS, is a figure in the alleged AdSurfDaily Ponzi scheme and is the former operator of Golden Panda Ad Builder. Golden Panda surrendered more than $14 million in the ASD Ponzi case, and the SEC said that Busby was involved in three prime-bank schemes in the 1990s.
The SEC has not responded to requests for comment on the emerging TCN “opportunity.”
As of now, it can be said that two “advertising” schemes — BAS and TCN — are using the same music in what appears to be largely generic promos for business “opportunities.”
It also can be said that DNA, one of the “businesses” associated with Piccolo, also used generic videos and caused them to play in miniature on “prelaunch” and “launch” sites for “opportunities.”
It also seems possible — if not likely — that certain MLM promoters have found a way to edit YouTube sites to make the content appear “current” or to store generic videos and use them for multiple “opportunities.”
Questions
Why does one video for TCN show an upload date of January 2009 while the “official” site shows a video upload date of yesterday — when it is the same video and TCN purportedly is a “new” opportunity?
Did TCN exist in an earlier form as far back as 2009? If so, what happened back then — and why is it reemerging now?
Are certain MLMers simply using generic videos they uploaded earlier to YouTube — and then editing the YouTube sites when a new “opportunity” comes along, thus potentially maintaining a search-engine advantage no matter what “opportunity” comes along?
Why would a company that purports to be a market and technology leader use what appears to be a generic video as its “official” video?
Why did a promo for TCN that appeared on the website of OWOW — a site linked to Piccolo — suddenly go missing last week?
Why does TCN appear to be closely following “prelaunch” and “launch” strategies associated with purported Piccolo “opportunities?
Screen Shot 1
This YouTube video for Text Cash Network bears an upload date of Jan. 26, 2009, even though TCN claims it is a new company proceeding from a "prelaunch" in recent days to "launch." The video is a duplicate of a video dated Nov. 15, 2011 that claims to be TCN's "official" video.
Screen Shot 2
This YouTube video for Text Cash Network bears an upload date of Nov. 15, 2011, even though the same video for the purported TCN opportunity appears elsewhere on YouTube and bears an upload date of Jan. 26, 2009, nearly three years ago. TCN claims it is a new company proceeding from "prelaunch" to "launch." TCN claims the Nov. 15, 2011 video is its "official" one. Both video sites feature all-caps when addressing prospects and content that is virtually the same.
Screen Shot 3
This 2009 YouTube video for the purported Biz AdSplash "advertising" program used the music of Fat Boy Slim. An emerging "advertising" opportunity known as Text Cash Network is using the same Fat Boy Slim music: "Right here, right now." While BAS purported to deliver "advertising" to computers, TCN purports to deliver it to cell phones.
In a case that drew comparisons to AdSurfDaily because of recidivism, undisclosed bankruptcies and ties to Utah, the three principal figures of the Philip R. Lochmiller Sr. real-estate Ponzi scheme in Colorado will be going to federal prison.
Lochmiller Sr., 63, was found guilty in July after a 10-day trial in which the jurors returned the verdicts in three hours. He will be sentenced after a final computation of losses is completed. The case involved a company known as Valley Mortgage Inc. The case involved about $30 million.
Lochmiller Sr. was found guilty of conspiracy, money laundering conspiracy, money laundering and mail fraud.
His stepson, Philip R. Lochmiller Jr., 38 when charged, has been sentenced to eight years in federal prison for conspiracy to commit securities and mail fraud and money laundering. Business associate Shawnee N. Carver, 33 when charged, has been sentenced to two years for conspiracy to commit securities and mail fraud.
Prosecutors announced the sentences imposed on Lochmiller Jr. and Carver yesterday.
“Philip Lochmiller Jr. helped orchestrate an investment scheme which defrauded over 400 victims out of more than $30 million,” said James Yacone, special agent in charge of the Denver FBI office. “Several elderly victims were financially devastated. [The] sentencing sent a strong message that white collar criminals will not be tolerated. The FBI will continue to aggressively investigate and seek prosecution against the groups and individuals who defraud unwitting victims out of their earnings.”
Lochmiller Sr. was sentenced to three years in a California state prison in the 1980s after he was charged with 60 counts of securities fraud and pleaded guilty to about half of them. Investors in his new scheme at Valley Mortgage were not told of his history as a securities swindler, federal prosecutors in Colorado said.
Federal prosecutors in the District of Columbia said the same thing about ASD President Andy Bowdoin, who was charged with felonies in Alabama in a securities scheme in the 1990s.
Meanwhile, Lochmiller Sr.’s investors also were not told that both Lochmiller Sr. and Jr. had bankruptcies on their records. Federal prosecutors in the District of Columbia alleged in August 2008 that ASD members and members of a companion autosurf known as Golden Panda Ad Builder were not told about the bankruptcy of Golden Panda President Clarence Busby.
Nor were they immediately told that Busby had a run-in with the SEC in the 1990s and was accused of purveying three prime-bank swindles, according to records.
The Lochmiller case also has a tie to Vernal, Utah, a community to which ASD also has a tie. The Lochmiller case was in part about real estate in Vernal. Vernal is the community in which the so-called “Arby’s Indians” got their start.
ASD mainstay Curtis Richmond was a member of the bogus “tribe” based in Vernal. The tribe, which used the address of a Vernal doughnut shop as the address of its purported “Supreme Court” and was ruled a “complete sham” by a federal judge, got its derisive name because it once held a meeting at an Arby’s restaurant in Provo.
Richmond went on to become a pro se litigant in the ASD Ponzi case, accusing the judge overseeing the case in the District of Columbia of “TREASON” and operating a kangaroo court. Richmond claimed the judge overseeing an unrelated case in Utah owed him $30 million. Other ASD figures later claimed government officials owed them sums ranging from the millions of dollars to the trillions.
Another parallel between the ASD case and the Lochmiller case is the presence of the IRS. ASD’s early deceptions were uncovered by a U.S. Secret Service/IRS Task Force operating in Florida, according to court filings.
“Investment fraud is like a ‘house of cards’; the underlying structure can fall apart at any time leaving many investors in financial ruin,” said Sean Sowards, a top IRS agent working the Lochmiller case.
Sowards is the special agent in charge of the IRS-Criminal Investigation unit in Denver.
“These sentences should remind us that defrauding investors is a serious offense and those who do will be held accountable,” Sowards said.
Both Lochmiller Jr. and Carver testified at the Lochmiller Sr. trial, prosecutors said.
After weeks of delays, a Facebook “Fan” page for accused Ponzi schemer Thomas Anderson “Andy” Bowdoin finally has launched. The site includes a link to “Andy’s Fundraising Army,” the web venue at which Bowdoin’s bid to raise $500,000 to pay for criminal lawyers has fallen 95 percent short of its goal.
Bowdoin, 76, was arrested in Florida in December 2010 and freed on bail. Federal prosecutors described him as a recidivist securities huckster who’d presided over Quincy-based AdSurfDaily.
ASD was an “autosurf” Ponzi scheme disguised as an “advertising company,” and Bowdoin used some of the money sent in by members to make campaign donations to the National Republican Congressional Committee, prosecutors said.
An early version of Bowdoin’s alleged $110 million Ponzi scheme collapsed in 2007, leaving members holding the bag, according to records. After weeks in limbo, ASD switched the URL from which the purported “program” operated and relaunched under the new name of ASD Cash Generator, sucking in a new crop of victims, prosecutors said.
The accounts and unpaid redemptions of participants active at the time of the 2007 collapse were rolled into the new scheme, and incoming members were not told about the original Ponzi failure and that members were getting paid with recycled cash, prosecutors said.
ASD eventually gained momentum by creating a video lie about the program’s purported legality and by arranging “rallies” in U.S. cities. In late 2007, Bowdoin added a second autosurf Ponzi known as LaFuenteDinero — Spanish for “the fountain of money” — to his criminal tool kit, and compounded his deception, prosecutors said.
In 2008, Bowdoin and Clarence Busby Jr. of Acworth, Ga., struck up a partnership that resulted in the creation of an autosurf known as Golden Panda Ad Builder, describing it as ASD’s “Chinese” option, according to records.
The SEC has described Busby as a prime-bank swindler implicated in three securities schemes in the 1990s. Busby has described himself as a minister and real-estate professional. Records suggest he has lost property in Georgia to foreclosure, was the operator of yet-another surf scheme known as BizAdSplash (BAS) and was on the receiving end of an IRS tax lien.
BAS went missing in early 2010, after positioning itself as a purported offshore business. Its web servers resolved to Panama.
Like Busby, Bowdoin also was implicated in securities schemes in the 1990s, according to records. He narrowly avoided prison time in Alabama by agreeing to make restitution to defrauded investors.
Bowdoin has asked Facebook members to “like” his site. The Facebook site does not mention that three ASD members filed a prospective-class action lawsuit against Bowdoin in 2009, accusing him of racketeering and disguising the nature of ASD’s business.
Nor does the Facebook site reveal that ASD and related businesses have been on the receiving end of at least three civil-forfeiture judgments totaling about $80 million. In August 2008, the U.S. Secret Service seized about $65.8 million from 10 personal bank accounts of Bowdoin through which he was operating the ASD business, according to records.
The seizure occurred after ASD members falsely claimed that Bowdoin had received an award for business acumen from then-President George W. Bush, prosecutors said. Bowdoin filed two appeals when forfeiture orders were entered against his assets, but lost both. His new appeals for cash are targeted at the people Bowdoin is accused of defrauding: the ASD membership base.
In the aftermath of the 2008 seizures, Bowdoin described federal prosecutors in the District of Columbia — the venue in which the forfeiture actions were filed — as “Satan.” Bowdoin’s use of the word “Satan” occurred just weeks after he described himself at a company “rally” in Las Vegas as a Christian “money magnet.”
Bowdoin also compared the seizures to the 9/11 attacks, saying the actions against ASD by the Secret Service were “30 times worse” in some ways than the terrorist attacks that killed nearly 3,000 people in New York, Pennsylvania and Washington.
One of the Washington victims of the 9/11 attacks was Barbara Olson, an author, television commentator and former assistant U.S. Attorney (AUSA) in the District of Columbia office. Olson was the wife of former U.S. Solicitor General Theodore Olson.
In commemoration of the 10-year anniversary of the 9/11 attacks, prosecutors in the District of Columbia dedicated a national-security conference room in Barbara Olson’s memory last week.
“As an AUSA in [the District of Columbia] office, and throughout her career, Barbara proved that her convictions ran deep, and that her fidelity — to the values she held dear, the principles she fought to defend, and the countless people whose lives she touched — was unshakeable,” U.S. Attorney General Eric Holder said last week.
ASD is known to have so-called “sovereign citizens” in its ranks. Two ASD figures — Kenneth Wayne Leaming and Christian Oesch — sought unsuccessfully to sue the government for its actions in the ASD case, apparently seeking the staggering sum of more than $29 trillion, more than twice the U.S. Gross Domestic Product in 2009.
Leaming was accused in Washington state in 2005 of practicing law without a license. Records show he also was involved in a lawsuit that sought more than $9 billion against a local hospital in Washington state. Filings in the case show that Leaming sought liens against the hospital and even sought to attach it water and mineral rights. At least two notaries public in Washington state with ties to Leaming have had their licenses revoked. The names of both notaries appear on the docket of U.S. District Judge Rosemary Collyer in the District of Columbia.
Collyer is presiding over the ASD-related forfeiture actions and the criminal case against Bowdoin. Bowdoin twice has tried to have Collyer removed from the case. Both efforts failed, and the U.S. Court of Appeals has upheld the forfeiture orders she issued in the case.
Sixty-two people (as of the time of this post) have “liked” Bowdoin’s Facebook fan page. It is unclear if Bowdoin’s fans have followed the ASD case closely.
EDITOR’S NOTE: Clarence Busby Jr., a figure associated with at least four autosurfs — AdSurfDaily, Golden Panda Ad Builder, LaFuenteDinero and BizAdSplash — has encountered a recent string of troubles, including a mortgage foreclosure and tax liens. Owing to his association with ASD President Andy Bowdoin, who operated ASD and LaFuenteDinero and once had a partnership with Busby in Golden Panda, Busby also was forced to spend an unknown sum on legal fees after the seizure of ASD- and Golden Panda-connected assets in 2008.
Bowdoin said in September 2009 that he’d spent more than $1 million on legal fees in the first 13 months of ASD-related litigation. He was arrested on federal charges on Dec. 1, 2010, and had to arrange a bond of $350,000. Sixteen days later — on December 17, 2010 — federal prosecutors filed yet another (the third) civil-forfeiture complaint against Bowdoin-connected assets. Bowdoin filed appeals in the first two forfeiture cases, losing both and driving up his legal costs.
Despite the costly troubles encountered by both Bowdoin and Busby — and the remarkable staying power of those troubles, which next month will enter their fourth year — promoters on TalkGold, MoneyMakerGroup and other Ponzi forums still are pushing autosurfs and HYIPs.
They’re pushing them even though Bowdoin and others potentially face long prison sentences and have lost significant dollar sums and property as a result of their infatuation with what prosecutors have described as serial lawlessness.
On July 6, a federal judge ordered Gregory N. McKnight, the operator of the Legisi HYIP Ponzi scheme, to pay more than $6.81 million in disgorgement and penalties. Like ASD and countless schemes, Legisi was promoted on TalkGold and MoneyMakerGroup — and court filings in the Legisi case specifically reference MoneyMakerGroup.
Still pushing ‘surfs and HYIPs?
Apparently using a fill-in-the-blank litigation template, Clarence Busby Jr. sought foreclosure relief on a central Cobb County property in Marietta, Ga. Busby's filing also placed the property in Gwinnett County, which does not border Cobb County. (Graphic from Wikipedia.)
When former autosurf operator Clarence Busby Jr. filed a lawsuit last year last seeking relief from from a bank and other parties involved in a mortgage foreclosure against him, he’d already been put on notice by the Internal Revenue Service that the agency intended to collect thousands of dollars in back taxes from him, according to records in Cobb County, Ga.
The taxes were from 2009, according to records. During the same year, Busby launched an autosurf known as Biz Ad Splash — but the tax bill was for a different Busby entity.
On Aug. 11, 2010, the IRS prepared a federal tax lien against Busby and a company known as Freedom Achievement LLC for $15,481. The lien was formally recorded on Aug. 26, 2010. A note on the lien described Busby as “SOLE MBR” of Freedom Achievement, whose business purpose was not immediately clear.
About four months later — in December 2010 — Busby filed a pro se lawsuit demanding relief from Quicken Loans, OneWest Bank, MERSCorp and 1,000 “Doe” defendants in Cobb County Superior Court.
OneWest and MERS responded in January 2011 by moving to have Busby’s case transferred to federal court in the Northern District of Georgia because the lawsuit named defendants in multiple states and involved a controversy that exceeded the sum of $75,000.
Busby’s case was assigned to Senior U.S. District Judge Robert L. Vining Jr., who dismissed it for failure to state a claim. Beyond dismissing the lawsuit for failure to state a claim, Vining agreed with the defendants that Busby’s arguments had no legal merit. Busby’s pro se pleadings appeared to have come from a fill-in-the-blank legal kit.
These words appeared on the first page of Busby’s complaint: “COMES NOW, name here, as plaintiff” — and Busby did not insert his name in the “name here” space.
By contrast, some filings in the ASD/Golden Panda forfeiture case begin with these words, “COMES NOW, plaintiff United States of America, by and through its attorney.”
The Busby complaint also claims the Busby property in dispute is located in “Gwinnett County.” The document claimed elsewhere that the property was located in the city of Marietta in “Cobb County,” the venue in which Busby sued.
Marietta is situated in central Cobb County. Cobb County and Gwinnett County do not border one another. and the property is listed in Cobb County courthouse records, meaning it is possible that Busby used an existing legal template and never swapped out an existing reference to Gwinnett County — in the same manner in which he did not insert his name in the “name here” space.
Whether Busby’s apparent fill-in-the-blank oversights added to the defendants’ costs in successfully defending against the lawsuit is unclear. What is clear is that Busby came out on the losing end and that the defendants referenced the IRS tax lien against Busby in Cobb County in their response to his complaint.
Separately, the state of Georgia dissolved a Busby company known as Homeshare Investment Club Corp. The dissolution occurred on Sept. 13, 2010, less than a month after the IRS tax lien was filed against Freedom Achievement LLC, according to records.
Records pertaining to Homeshare Investment Club show that it used the same address used by Busby in the formation of Biz Ad Splash NA LLC.
BizAdSplash, or BAS, was an autosurf that ceased operating in January 2010. BAS launched in the aftermath of the ASD- and Golden Panda-related asset seizures. A separate address associated with the BAS filing in Georgia is the address of a maildrop in Kennesaw.
BAS purported to operate offshore. Its apparent U.S. domestic brand is listed in noncompliance by the office of Georgia Secretary of State Brian P. Kemp.
Members of BAS have complained to the PP Blog about not getting refunds from the autosurf. How much money the surf collected is unclear.
At the same time the state of Georgia was dissolving Homeshare Investment Club, it also was dissolving another Busby enterprise: Ocean View Enterprises Inc. Meanwhile, yet another Busby firm — Legacy Premier Properties Inc. — is listed in a state of noncompliance.
Even as bank failures and foreclosures were piling up in Georgia last year, a man associated with at least four failed autosurf companies was filing lawsuits against mortgage companies and 1,000 “Doe” defendants amid claims he did not know the “true names” of the “real lenders.”
Clarence Busby Jr. of Acworth, Ga., advised a Cobb County judge that it was “long standing black letter Mortgage law” from the 19th century that he should receive foreclosure relief from Quicken Loans, OneWest Bank, a service company and the “Does.”
In January 2011, the defendants moved to have the cases removed to federal court in Northern Georgia and filed for dismissal. The dismissal was granted in March.
A street address for Busby that appeared in both the county and federal filings corresponds with an address used by Biz Ad Splash NA LLC (BAS) in Georgia corporate filings dated May 13, 2009. BAS was an autosurf associated with Busby that went missing last year. Busby also was the president of Golden Panda Ad Builder, yet another autosurf, and a onetime business partner of Thomas A. “Andy” Bowdoin, the operator of the Florida-based AdSurfDaily autosurf.
The address BAS used in the Georgia filings was a mail drop, according to records.
Bowdoin was arrested in December 2010. The U.S. Secret Service said he had presided over an international Ponzi scheme that had gathered at least $110 million. Assets tied to both Bowdoin and Busby were seized as part of the ASD/Golden Panda probe, which also involved an autosurf known as LaFuenteDinero.
Busby was implicated in three prime-bank schemes by the SEC in the 1990s and was enjoined from violating securities laws by a federal judge. An FDIC-insured bank that once held Golden Panda funds failed in April 2011.
Georgia leads the United States in bank failures, with Florida nipping on its heels. Both states also are high on the list of mortgage foreclosures. Foreclosures tend to lower the value of surrounding properties.
Busby has described himself in court filings as a minister and real-estate professional. The actions in Cobb County that were removed to federal court were filed pro se, meaning Busby acted as his own attorney.
The defendants in the cases claimed Busby was seeking to “invalidate and/or void” in its “entirety” a $120,000 security instrument held on a property in Marietta, Ga.
Records suggest the property has been bought and sold twice in recent months for wildly different prices.
Among Busby’s claims in the Cobb County lawsuit was that the “true names and identities of any or all” of the “real” lenders, investors and others involved in his mortgage “were hidden from the plaintiff.”
BAS, which purported to be headquartered offshore, entered the autosurf world in January 2009 — after the ASD, Golden Panda and LaFuenteDinero-related asset seizures.
The entry of BAS began with the stern bang of a drum and a dire message in a promotional video: “The World Is In Crisis,” the video warned. “Turn On The News, And You’ll See. The Stock Market Is At A Record Low. Foreclosures Are At An All-Time High. Thousand’s (sic) Are Losing Their Jobs. Banks Are Closing. There Has To Be A Solution!”
The dire bang of the drum faded, replaced by a riff from an organ. The riff grew frantic, building toward a crescendo. The video never said the tones were from a 1999 work by Fatboy Slim: “Right Here, Right Now.”
Messages flashed in front of viewers’ eyes for more than a minute before the video announced the company’s name — BizAdSplash — and positioned the surf as the cure for all the economic misery in the world.
“Biz Ad Splash Has The Answer,” it said. “The Plan Is Simple. Advertise Your Business, A Product Or Service, Introduce Others To The Value Of Advertising. View A Few Ads For A Few Minutes A Day. Earn Profits. It’s That Simple!”
Even as bank failures and foreclosures were piling up in Georgia last year, a man associated with at least four failed autosurf companies was filing lawsuits against mortgage companies and 1,000 “Doe” defendants amid claims he did not know the “true names” of the “real lenders.”