URGENT >> BULLETIN >> MOVING: (UPDATED 5:20 P.M ON SEPT 4.) AdSurfDaily President Andy Bowdoin has been sentenced to the maximum term in federal prison under his plea agreement: 78 months.
The sentence was handed down minutes ago by U.S. District Judge Rosemary Collyer of the District of Columbia. ASD was a $119 million Ponzi scheme operating over the Internet between 2006 and 2008 and creating thousands of victims.
Separately, Collyer issued an order that authorized the U.S. Department of Justice to reopen remissions, meaning that ASD victims who missed the January 2011 filing deadline will have an opportunity to gain a pro rata share of the remainder of ASD proceeds seized by the U.S. Secret Service in 2008.
“Thomas Bowdoin was a master of fraud and deception, cheating victims out of their hard-earned money and savings with his get-rich scheme,” said U.S. Attorney Ronald C. Machen Jr. of the District of Columbia. “His actions cost his victims millions of dollars and now they will cost him his freedom. This sentence will protect the public from Mr. Bowdoin’s scams and hold him accountable for his crimes.”
A top U.S. Secret Service official said the agency is using a variety of tools to bring scammers to justice.
“Capitalizing on the strength of our financial task force partnerships, we aggressively pursue criminals using computer experts, forensic specialists, investigative experts and intelligence analysts,” said Dennis Ramos Martinez, special agent in charge of the Orlando Secret Service office.
Machen’s office declined to comment today on whether the ASD probe was ongoing.
Bowdoin is 77.
In November 2011, ASD figure Kenneth Wayne Leaming was arrested by the FBI on charges of filing false liens against at least five public officials involved in the ASD case. Two of the officials were federal prosecutors. One was the lead Secret Service investigator.
Machen’s office — without referencing the FBI allegations against Leaming — today praised the work of former Assistant U.S. Attorneys William Cowden and Vasu B. Muthyala. And Machen’s office also praised U.S. Secret Service agent Roy Dotson. All three men allegedly were targeted with false liens from Leaming, a purported “sovereign citizen.”
Leaming, 56, is jailed near Seattle.
Bowdoin’s sentencing today occurred against the backdrop of the collapse of Zeek Rewards, which was accused by the SEC Aug. 17 of operating a $600 million Ponzi- and pyramid scheme that potentially affects more than 1 million people. Zeek’s business model was similar to ASD’s business model. The U.S. Secret Service also is investigating Zeek.
Here’s what prosecutors in the District of Columbia said today about ASD’s business model (italics added):
ASD’s business model promised members the opportunity to earn 125 percent (initially 150 percent) on each dollar paid into ASD, as long as the members viewed other members’ websites for a few minutes each day on ASD’s Internet page, commonly referred to as the ASD “rotator.” Bowdoin also promised members commissions for recruiting other members into the program.
While a small percentage of ASD members who invested early in the program could earn the extraordinary rates of return, the promised opportunity was illusory for the vast majority of ASD members. Indeed, due to the fact that ASD’s pyramid-style business model relied entirely on an ever increasing influx of new money to fund the debt owed to earlier members, the vast majority of members could never earn the promised rates of return, making the promised opportunity fraudulent.
EDITOR’S NOTE: A passage from a May 2011 email allegedly written by Kenneth Wayne Leaming appears in the story below. The passage, which appears to contain electronic clutter — specifically the string “#39;” — is reproduced verbatim, meaning the string also appears in the court document from which the passage was taken.
An FBI agent assigned to the Tacoma Resident Agency Joint Terrorism Task Force advised a judge last week that Kenneth Wayne Leaming — now jailed at a federal detention facility near Seattle on charges he filed bogus liens against public officials involved in the AdSurfDaily Ponzi case — referenced the young children of U.S. Chief Justice John Roberts and their “school.”
The reference appeared in a email that Leaming allegedly sent to David Carroll Stephenson on May 14, 2011. Stephenson, whom the agent described as Leaming’s former business partner in Washington state, is a convicted felon serving a 96-month sentence in federal prison for tax crimes.
“This week I will ‘flood’ the USSC with the habeas, one to each justice and resend the one to the Chief Justice, and maybe one to his kid#39;s school to be given to the parents,” Leaming allegedly wrote. “One way or another he is going to get it in his hands and I#39;ll start working on off duty locations for the remaining justices as well.”
Roberts and his wife have two preteen children.
The email clearly became a source of concern for the FBI.
“In this email,” the FBI agent who sought Leaming’s arrest wrote, “I believe that LEAMING is offering to file documents on Stephenson’s behalf, including sending them to the Chief Justice, via his minor children.”
But the alleged email to Stephenson was hardly the FBI’s only concern about Leaming, who appears to have no law degree but has been depicted in online ads as a practicing attorney. (The ads were removed last year.)
Investigators discovered a paperwork trail that linked Leaming and Stephenson to a purported $10 million lien against Harley Lappin, the former director of the Federal Bureau of Prisons, and a purported lien for $20 million against Dennis R. Smith, the warden of the Federal Correctional Institution in Phoenix.
As the probe that led to Leaming’s arrest proceeded, agents found bogus liens filed in Pierce County, Wash., against other public officials, including at least five officials involved in the ASD Ponzi case. Liens against Mary Peters, the former U.S. Secretary of Transportation, and Cutler Dawson, president and CEO of Navy Federal Credit Union, also were discovered.
At least some of the bogus papers linked to Leaming were found in July 2011 — during the execution of a search warrant at the Yelm, Wash., home of purported “sovereign citizen” Raymond Leo Jarlik-Bell, according to the FBI.
Whether Jarlik-Bell was a member of ASD is unclear.
The U.S. Secret Service has described ASD as a “criminal enterprise” led by Andy Bowdoin, a 77-year-old recidivist felon and securities huckster. Bowdoin, who was arrested in the Gulf Coast area of Englewood, Fla., in December 2010, operated ASD from the small town of Quincy in northern Florida, near Tallahassee. He has described himself as a “money magnet” and man of God.
The FBI said “one of the specific documents” recovered in the search of Jarlik-Bell’s home sought the staggering sum of $225.4 billion and listed “Kenneth Wayne, sovereign man” as “grantee,” and the public officials as “grantors.”
“Kenneth Wayne” is a name used by Leaming.
Navy Federal, which serves members of the military, is the largest credit union in the world.
So-called “sovereign citizens” have been known to file vexatious liens against public officials and courtroom opponents, including financial institutions. The practice has been described as “paper terrorism” and “mailbox arbitration.” Among other things, it can cause both the lien targets and the government to expend money and resources to defend against the nuisance claims, which can affect the credit histories of the individual targets and the efficiency of the court system.
Named in the liens in in addition to Peters and Dawson were 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, Taylor, Cowden, Muthyala and Dotson have had roles in the ASD Ponzi case. Why Peters and Dawson were targeted with liens is unclear.
Jarlik-Bell, who has been linked with Leaming to “sovereign citizen” groups known as the “County Rangers” and the “Assemblies on the County,” was arrested in July on tax charges. He was jailed pending trial, according to the FBI complaint against Leaming.
More Alleged Leaming Correspondence
In June 2011, according to the FBI, Leaming sent an email to Stephenson that referenced a letter that had or would be sent to Roberts, America’s top judicial officer. The letter strangely described the chief justice as “FIDUCIARY.” The email followed on the heels of other Leaming emails that suggested Leaming had spent part of the month of May conducting financial research on Roberts and his wife and trying to find a street address through which he could cause Stephenson-related writs to be delivered to the couple’s home — instead of the Supreme Court.
Other Leaming email correspondence in May suggests he sent a “certified,” Stephenson-related letter to the residence of Associate Justice Ruth Bader Ginsburg and was trying to find a home address for Associate Justice Stephen G. Breyer — instead of sending Stephenson-related correspondence to the Supreme Court address.
The letter that had or would be sent to Roberts asserted that Stephenson was being “restrained” and “concealed” in a federal prison under a under a “fictitious name.” It further asserted that the government had assigned Stephenson an “inventory control number,” according to the complaint against Leaming.
As the letter proceeded, it painted a picture that Roberts had been part of a conspiracy with the Federal Bureau of Prisons to “evade the habeas corpus process.”
Because Stephenson was in federal custody, his communications were being monitored, according to the complaint against Leaming. In a phone call between Stephenson and Leaming, Leaming spoke about “$10m” allegedly owed to Stephenson by a public official employed by the Bureau of Prisons and suggested that “$20 million” would be sought from a prison warden.
Leaming told Stephenson that the city of Puyallup, Wash., was in receivership because of Leaming’s paperwork maneuverings, according to the complaint against Leaming. (Records show that Leaming filed liens against affecting at least two communities in Washington state, including Puyallup. Records also show that he filed a lien for more than $9 billion against a Franciscan hospital in Lakewood, Wash., and tried to put the facility in involuntary bankruptcy. At the same time, records show that Leaming also sought to put the Washington State Bar Association in involuntary bankruptcy. See this story. See this story.)
During phone conversations with Stephenson, Leaming talked about escalating his paperwork maneuverings against the courts if “they don’t straighten up soon” and the potential need to “have a little liability correspondence with Eric Holder himself.”
Eric Holder is the Attorney General of the United States.
Leaming also told Stephenson that “someone has suggested we go after body odor in the White House,” an apparent veiled reference to President Obama.
Returning to the subject of the courts, Leaming told Stephenson that he would start “working” on the chief judge of U.S. federal courts in the Western District of Washington, according to the complaint against Leaming.
Leaming, according to the complaint, also ventured that “the Rothschilds” were hiding in a “bunker in India” while controlling the central bank of Iraq, according to the complaint against Leaming.
Banking conditions in Iraq are causing the Rothschilds to lose money, and the “inner circle” is “jumping ship,” Leaming allegedly told Stephenson, “just like body odor’s inner circle in the White House.”
Leaming has been under federal surveillance by both the Tacoma Resident Agency Joint Terrorism Task Force and the Seattle Division’s Mobile Surveillance unit since August 2011, according to the complaint. Agents have observed him driving a blue Ford Crown Victoria and visiting mailing spots in Spanaway, Wash., where he lives in an apartment, according to the complaint.
In October 2011, some ASD members received an email attributed to “Keny” — a Leaming nickname — that suggested they file “county recorder” papers against federal officials involved in the ASD case that would identify the officials as “DOJ thieves.”
The email encouraged the members to send a “notary certified copy” of the filings to the home address of Chief Justice Roberts.
At least two notaries public with ties to Leaming have lost their licenses in Washington state, according to records. One of the notaries — Kathryn E. Aschlea — was associated with an enterprise known as FAN NW LTD INC.
The name of FAN NW LTD INC. appears in the criminal complaint against Leaming, and the FBI says a telephone associated with the firm was used on calls between Leaming and Stephenson.
Federal court records in the ASD case in the District of Columbia reference a “Claim by Notary Presentment/Acceptance by Kathryn E. Aschlea.” Collyer denied Aschlea leave to file on June 11, 2010.
Kathryn Aschlea and “Kenneth Wayne” are listed in Washington state as officers of FAN NW LTD INC.
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.
Using the Curtis Richmond litigation blueprint, two new motions to intervene have been filed in the AdSurfDaily forfeiture case.
The motions were filed by Ronald Breckenfelder of Littleton, Colo., and John R. Moore of Ames, Iowa. The motions accuse U.S. District Judge Rosemary Collyer, U.S. Attorney Jeffrey A Taylor, and Assistant U.S. Attorney William Cowden of committing crimes.
In addition, the motions accuse the judge, the prosecutors and Chief Judge Royce Lamberth of conspiring to deny ASD members justice. Collyer and Lamberth specifically were accused of operating a “Kangaroo Court.”
As was the case in two previous motions to intervene, including a motion filed by Richmond himself, Collyer placed a hand-written note on the cover pages of the motions.
“Let this be filed,” she wrote. Collyer has used the exact same wording on each of four motions to intervene filed in the ASD case in recent weeks.
The documents order Collyer to set aside the ASD forfeiture within 30 days or face criminal or civil prosecution. At the same time, court documents filed with the motions include a list of demands made on prosecutors and Agent Roy Dotson of the U.S. Secret Service to produce “Legal Evidence” within seven days or face legal action.
Richmond is associated with a sham Utah Indian tribe that has been successfully sued under racketeering statutes for bringing vexatious legal proceedings against judges, prosecutors and police officers. He also has been convicted of contempt of court for threatening federal judges.
The tribe is known derisively as the “Arby’s Indians” because it once held a meeting in an Arby’s restaurant in Provo, Utah. A sham “Supreme Court” set up by the tribe used the address of a conference room attached to a doughnut shop in Utah as its chambers.
One prong of the “Indian” strategy is to place enormous judgments against public officials in a bid to extort a litigation result. Recent motions in the ASD case that have used the Richmond blueprint have said an ASD member by the name of Alana Holsted has been prevented from collecting on a $30 million judgment because of conspiratorial actions by the judge and prosecutors.
The Holstead claim appears to seek a total of $120 million in judgments for the alleged offenses of Interference With Commerce and Interference With Interstate Commerce.
UPDATED 12:21 P.M. EST (U.S.A.) Banks are failing. Unemployment is surging. Housing values are plummeting. Credit markets are tight. The economy is shrinking.
And “Professor” Patrick Moriarty wants the Senate to investigate the prosecutors and a Secret Service agent involved in the AdSurfDaily case, an alleged $100 million Ponzi scheme.
ASD President Andy Bowdoin, the operator of the scheme, already has ceded seized funds to the government “with prejudice.”
“With prejudice” means that Bowdoin intends to submit to the forfeiture and never reassert the claims to tens of millions of dollars seized. Meanwhile, the government is establishing a process by which ASD members can apply for refunds.
Despite the fact the money was seized as the proceeds of a criminal wire-fraud, money-laundering and Ponzi-scheme operation, Moriarty says the Senate should set its sights on the people who prevented the scheme from mushrooming globally — not Bowdoin, the person responsible for organizing the scheme.
“Over 50 individual and notarized DEMAND[S] FOR LEGAL EVIDENCE were sent to Jeffrey Taylor, US Attorney; William Cowden, Assistant US Attorney; and Roy Dotson, Special Agent, US Secret Service,” Moriarty said in a letter to Sen. Patrick Leahy, D.-Vermont. “Not once did any of these three Government Servants respond.”
Leahy is chairman of the Senate Judiciary Committee.
“Innocent Americans have suffered and continue to suffer because of these incredulous and despicable acts” by prosecutors, Moriarty said.
Moriarty was a founder and former board member of ASD Members International (ASDMI), which registered as a Missouri nonprofit in October and threatened to litigate against the government because of its actions in the ASD case. Moriarty resigned from the ASDMI board in December, citing ill health. The entity now has dissolved.
ASDMI recruited members from within the membership ranks of the ASD Member Advocates Forum, a Pro-ASD site also known as “Surf’s Up.” At least three ASDMI board members also were members of “Surf’s Up.”
Last week, Curtis Richmond filed a motion to intervene in the ASD case, accusing U.S. District Judge Rosemary Collyer and the prosecutors of crimes and threatening prosecution and lawsuits under federal racketeering statutes.
Moriarty, on his website, touted Richmond’s approach to litigation. Richmond is associated with a sham Utah Indian tribe that has attempted unsuccessfully to have prosecutors and federal judges jailed. At least two people who employed the tactics of the tribe have been sent to prison, and Richmond himself was convicted of criminal contempt of court in California in 2007.
In his letter to Leahy, Moriarty discloses none of this. He also did not inform Leahy that a class-action lawsuit alleging racketeering has been filed against Bowdoin and alleged co-conspirators.
Court filings by Richmond last week claim that an ASD member named Alana Holsted was prevented from “Collecting on an Entry of Default Affidavit for $30 million for each Defendant.”
The Utah tribe routinely placed huge, fraudulent judgments against officers of the court or litigation opponents in what victims described as extortion bids. Victims sued under racketeering and mail-fraud statutes. U.S. District Court Judge Stephen Friot ruled the tribe a “complete sham” and ordered members to pay damages and costs of more than $108,000.
Records show that Richmond tried to force Friot to recuse himself from the “Indian” case by claiming the judge owed him $30 million. Friot refused to step down.
“I hope your office can review this situation and lend their support,” Moriarty told Leahy.
Surf’s Up Asks Members To Contact Leahy
Here is an email Surf’s Up members received today, alerting them of Moriarty’s letter-writing campaign to Leahy. The email was signed by Barb McIntire, a Mod at the Surf’s Up forum, and a former ASDMI board member. The email accuses the prosecutors of committing a “legal travesty” and of “incredible and despicable acts.” (Emphasis added):
A message to all members of ASD Member Advocates – Surf’s up Baby!
Hello ASD Members,
If timing is everything, then maybe our time for some type of justice has arrived. On February 8, Senator Patrick Leahy proposed a “Truth Commission” for the Department of Justice.
Mr. Leahy heads the Senate Judiciary Committee. According to the Washington Wire, he has proposed an independent commission to investigate allegations of wrongdoing by the DOJ during the Bush administration. As ASD members know, the warrantless wiretapping, the politically motivated firing of some US attorneys, and the highly controversial memos on treatment of detainees are not the only things the new administration must examine to find out what went wrong with the DOJ.
Please take the time and make the effort to write Senator Leahy about the “legal” travesty that was committed against the 100,000-plus members of ASD by US attorneys Jeffrey Taylor and William Cowden. Explain how they used the DOJ to seize $93-million under forfeiture procedures reserved for drug- trafficking crimes. Explain in your own words how our Constitutional rights were trampled on so the DOJ could control the millions in bank accounts, deposits, and property. We each need to explain how thousands of innocent Americans have suffered and continue to suffer because of these incredible and despicable acts.
If you can, send your letter via USPS certified mail and request a return receipt. It will be the best $5 you’ve spent. Please don’t wait. The timing is right. Just do it!
Emails and phone calls to the Senator’s office are fine, but only after you send that first letter.
If we don’t do this now, we’ll have no one to blame but ourselves.
Please email me back and let me know you will do this. I’m counting on you for this support.
