UPDATED 12:35 P.M. EDT (U.S.A.)
They’re Gumby, dammit!
Some AdSurfDaily supporters now claim that the company could not have been operating as a Ponzi scheme — and therefore cannot be guilty of wire fraud and other crimes — because it had a “flexible” business plan.
Under this theory, “flexible,” in part, means ASD did not guarantee rebates. It also means that ASD planned to build a membership base, and then use that base to become attractive to Main Street, big-budget advertisers that would find people who were being paid to click on ads an attractive audience.
Prosecutors anticipated this argument in August 2008, and refuted it in the original seizure complaint filed Aug. 5, 2008, more than a year ago. ASD later asked for an evidentiary hearing to demonstrate it was not a Ponzi scheme.
Prosecutors viewed the “flexible” business-plan argument as a bid for ASD to insulate itself from scrutiny by regulators and law-enforcement agencies — in short, a bid to legalize Ponzi schemes by calling them something else.
The hearing was held Sept. 30-Oct. 1. ASD did not produce an audited balance sheet, thus failing to take advantage of an opportunity to blow the prosecution’s case out of the water. Nor did the surf produce a witness to support claims that it was operating with government approval.
Nor did ASD produce a major corporate advertiser to explain how it possibly could derive any benefit from having its brand associated with a fraudster-led firm that was using a garden-variety autosurf script that had been used by other surf companies destroyed by the government.
Imagine if such a major corporate witness existed — and if such a witness extolled the virtues of the autosurf universe on direct examination by the ASD side.
Now, imagine the witness being cross-examined by the government. If the witness said pitching its product to ASD members was good enough and that the company did not intend to participate in ASD’s rebate plan that implied a return of 365 percent a year was possible, the government then could ask why the company was shirking its duty to stockholders to become more profitable.
If ASD truly was a dynamic advertising service, there would be no reason not to participate in all three facets of the earning spectrum — profits derived from advertising, profits derived from recruiting and profits of 365 percent a year derived from surfing.
Not to participate in all three would be the height of corporate irresponsibility to stockholders. In fact, the government could ask the major advertiser on the witness stand why it was not recruiting its own stockholders to join ASD, thus bolstering the advertiser’s bottom line and the bottom lines of individual stockholders.
Any corporate stockholder who joined the corporate advertiser’s downline in ASD would have more money to invest in stock, more money to invest in other companies, more money to jumpstart the world economy, buy cars and real estate and gifts for family and friends — and more money to set aside for retirement.
NBC, which was claimed in a promo for ASD to have been one of the major advertisers, could have been summoned to testify. Why didn’t NBC show up to defend the model? Why didn’t USA Today, another claimed advertiser, show up? Why didn’t Google or Starbucks or Kodak or Toshiba or Macy’s or Farmer’s Insurance show up? All of them (and more) were claimed to have been ASD advertisers.
Any chance they weren’t really ASD advertisers and that the claims about them were made up?
No matter. Some of ASD’s current Gumby apologists would have you believe the advertisers would have shown up one day — had the government not interfered with ASD’s “flexible” plan.
What’s most flexible about the plan is the ASD advocates’ ability to spin it, even though ASD President Andy Bowdoin himself no longer is doing the same.
A federal judge ruled Nov. 19 that ASD had not demonstrated it was a legal business and not a Ponzi scheme. The judge said evidence ASD presented conflicted with “come on” statements on its own website.
Moreover, the judge said testimony by an ASD expert witness that ASD was not a Ponzi scheme was not credible because it conflicted with observable information, the testimony of other ASD witnesses and relied exclusively on information ASD provided, not an independent investigation.
In January, ASD President Andy Bowdoin submitted to the forfeiture, thus taking a trial against the money and property off the table. Bowdoin has acknowledged multiple times that ASD was operating illegally.
A scheduling conference that had been set for Jan. 30 was canceled because of Bowdoin’s request to a federal judge to release his individual and corporate claims to the seized money and property.
Regardless, the “flexibility” arguments cited above continue to surface — even though Bowdoin no longer is protesting his innocence. Bowdoin, rather, has attacked prosecutors, his own attorneys and, now, a “group” of members from whom he accepted legal advice and embarked on a strategy of pro se legal filings.
A federal judge has rejected three of Bowdoin’s four pro se arguments, which sought to cast him a criminal defendant in a civil case against money and property. Bowdoin was not arrested in August: The money and property were.
A ruling is pending on Bowdoin’s fourth pro se argument — that he should be permitted to change his mind about submitting to the forfeiture, after previously asking the judge to release his claims “with prejudice,” meaning he would not assert them again.
Bowdoin’s new counsel, retained only after Bowdoin had embarked on a pro se strategy that put him at odds with his previous claims, has supplemented his client’s motion, and Bowdoin has filed two affidavits to support his bid to renew claims he once released.
It’s a strange case, indeed. Bowdoin has been the equivalent of Gumby in his court filings — and ASD advocates have been even more flexible, bending their views to support fact sets that even Bowdoin himself no longer is challenging in the civil case.