The lawsuit against the U.S. government filed by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer now appears on the court docket in the District of Columbia, meaning the case formally has been transferred from U.S. District Court for the Southern District of Florida.
U.S. District Judge Rosemary Collyer has been assigned the case, which was ordered transferred July 23 by U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida. It will be at least the fifth ASD-related case Collyer has overseen. The judge has presided over at least three forfeiture cases, a racketeering lawsuit filed by some ASD members against ASD President Andy Bowdoin — and the criminal case against Bowdoin.
Disner and Schweitzer — who went on to become affiliates of the Zeek Rewards MLM “program” that now is the subject of an examination by the office of North Carolina Attorney General Roy Cooper — sued the United States in November 2011. The ASD duo alleged their Constitutional rights were violated when the government seized ASD’s database in 2008. The pair also alleged that undercover agents who joined ASD had a duty to inform ASD management and that the government had gone shopping for a friendly forum in the District of Columbia when bringing the civil forfeiture case against tens of millions of dollars in the personal bank accounts of Bowdoin.
Meanwhile, Disner and Schweitzer — relying in part on a purported expert opinion by purported MLM expert Keith Laggos that ASD was not a Ponzi scheme — accused the government of presenting a “tissue of lies” when bringing the ASD Ponzi case. Disner and Schweitzer contended that ASD was not a Ponzi scheme and had been conducting business lawfully before the federal seizure.
Only months after Disner and Schweitzer presented the Laggos’ opinion to Judge Altonaga in Florida, Bowdoin pleaded guilty in the District of Columbia before Collyer to a Ponzi-related charge of wire fraud.
In a statement of offense, Bowdoin acknowledged ASD was a Ponzi scheme and had never operated lawfully from its 2006 inception.
Laggos was hired as a “consultant” by Zeek, but the firm appears to have dumped him last month. Details surrounding Laggos’ departure from Zeek remain unclear.
Litigation surrounding the ASD case has been marked by bizarre events. ASD is known to have ties to the so-called “sovereign citizens” movement. ASD figure Curtis Richmond, a purported “sovereign” being, once accused Collyer of “TREASON.” Meanwhile, ASD figure Kenneth Wayne Leaming is jailed near Seattle on charges of filing bogus liens against at least five public officials involved in the ASD case, including a federal judge, three federal prosecutors and the lead U.S. Secret Service agent on the ASD case.
Leaming also is accused of being a felon in possession of firearms, harboring two federal fugitives from Arkansas involved in a massive mail-fraud scam centered around a home-based business and uttering a false “Bonded Promissory” note. Leaming now is seeking to sue President Obama and U.S. Attorney General Eric Holder. Earlier, Leaming and ASD figure Christian Oesch sought unsuccessfully to sue the United States, apparently for the staggering sum of more than $29 trillion.
URGENT >> BULLETIN >> MOVING: A federal judge has granted the government’s request to transfer from Florida to the District of Columbia a lawsuit against the United States filed by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer.
The ruling today by U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida deals a blow to Disner and Schweitzer, who earlier argued that federal prosecutors had gone shopping for a “frendly [sic] forum” in the District of Columbia when bringing the ASD Ponzi case in 2008 after an investigation by the U.S. Secret Service.
Altonaga’s ruling may mean that U.S. District Judge Rosemary Collyer — whom ASD President Andy Bowdoin and purported “sovereign” being Curtis Richmond tried unsuccessfully to have removed from the case for alleged bias — will preside over the Disner/Schweitzer complaint.
Disner and Schweitzer, who raised the prospect they could be charged with tax evasion, argued to Altonaga that their Constitutional rights were violated when the government seized the ASD database in 2008.
” . . . the Court finds that Plaintiffs can litigate their claims in the District of Columbia without undue inconvenience or prejudice,” Altonaga ruled. “The public interest factors also favor transfer, given the District of Columbia’s extensive familiarity with the forfeiture proceedings that gave rise to this action. In view of that familiarity, the District of Columbia is in a better position to efficiently judge whether Plaintiffs’ case warrants dismissal or whether the Government’s actions constituted an unreasonable search and seizure of Plaintiffs’ property in violation of the Fourth Amendment and other statutory requirements.”
In her ruling today, Altonaga noted that Disner and Schweitzer already have claimed they’d try to have Collyer removed from the case if made its way from Florida into her courtroom.
Disner and Schweitzer sued the government in November 2011, bringing their action in the Southern District of Florida and arguing that ASD was not a Ponzi scheme and that prosecutors and the Secret Service had authored a “tissue of lies” in the District of Columbia. About seven months later — in May 2012 — Bowdoin pleaded guilty to wire fraud before Collyer, who’d earlier ordered the forfeiture of more than $80 million in the civil portion of the case.
In a statement of offense, Bowdoin acknowledged ASD was a Ponzi scheme that never operated lawfully from its 2006 inception. He remained free after his guilty plea, but Collyer ordered him jailed in June 2012, after prosecutors presented evidence that Bowdoin continued to foist scams (AdViewGlobal and OneX) on the public even after the seizure of tens of millions of dollars in the ASD case and even after he was arrested on Ponzi charges in December 2010.
Bowdoin has been held at a local jail facility in the District of Columbia since last month. His formal sentencing on the Ponzi-related charge of wire fraud is set for Aug. 29 before Collyer.
After their ASD days, Disner and Schweitzer became pitchmen for the Zeek Rewards “program,” which has an ASD-like compensation scheme. In arguing that ASD was not a Ponzi scheme, Disner and Schweitzer relied on an opinion from purported MLM expert Keith Laggos, whom Zeek now claims as a consultant.
BULLETIN: (UPDATED 8:06 P.M. EDT U.S.A.) A federal judge in Florida has denied a motion by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer that, if granted, could have made the duo privy to information on the identities of any ASD participant who filed a claim for remissions in the ASD Ponzi case, their financial stake in ASD and how much money was returned to them by the government through the remissions claims process.
U.S. District Judge Cecilia M. Altonaga said no today, ruling that Schweitzer and Disner had not shown why they were entitled to the information and that the government was not compelled to produce it.
The flap started when Disner and Schweitzer asserted earlier this month that a certificate of interested parties filed by the government in the Disner/Schweitzer lawsuit was “inadequate as a matter of law” because it didn’t include the information on individuals who filed remissions claims. Court records show that about 11,000 ASD members filed claims in the case.
The government countered by arguing that Disner and Schweitzer were confusing the ASD forfeiture case filed in the District of Columbia with their own lawsuit filed in Florida.
Altonaga sided with the government today, ruling that the government certificate as it stands “is not necessarily incomplete for failing to list those who have a financial interest in other forfeiture proceedings.”
“Plaintiffs fail to explain in their Motion why unnamed parties who may have a financial interest in other forfeiture proceedings also have an interest in Plaintiffs’ declaratory judgment action,” Altonaga ruled.
And the judge further pointed out that Disner and Schweitzer had not complied with her order to file their own certificates in the case. She now has given them until July 6 to do so, warning that “[f]ailure to comply will result in the entry of an order of dismissal without prejudice without further notice.”
Federal prosecutors went to court in the Southern District of Florida today, saying AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer were confusing their November 2011 lawsuit against the government with two forfeiture actions filed in the District of Columbia by federal prosecutors and the U.S. Secret Service in the ASD Ponzi case.
An assistant U.S. Attorney serving under U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida is serving as the attorney for the United States in the case because Disner and Schweitzer sued the government. Although the ASD Ponzi case was brought in the District of Columbia, Disner and Schweitzer sued the government in Florida. They later claimed that prosecutors had gone forum shopping in Washington to bring the Ponzi forfeiture case.
Among other things, Disner and Schweitzer claim that undercover agents who joined ASD had a duty to identify themselves to ASD management and that the ASD Ponzi case is a “house of cards” despite ASD President Andy Bowdoin’s guilty plea and public acknowledgment he presided over a Ponzi scheme.
In a puzzling motion stamped June 20 and entered on the docket of U.S. District Judge Cecilia M. Altonaga on June 21, Schweitzer and Disner claimed they had personally determined that a certificate of interested parties filed by the government in response to an order was “inadequate as a matter of law.”
Disner and Schweitzer, according to Disner and Schweitzer, had a right to know the identities of any ASD participant who filed a claim for remissions in the ASD Ponzi case, how much money they put into ASD and how much was returned to them by the government through the remission claims process.
Nonsense, the government said today.
“The plaintiffs misapprehend the purpose and spirit of the court’s order requiring a certificate of interested parties,” the government said in its response to the Disner/Schweitzer motion. “The instant case is not a forfeiture case as the two forfeiture cases involving AdSurfDaily have already been resolved in the District of Columbia.
“The certificate of interested parties is not some kind of alternative discovery vehicle collateral to the discovery provisions in the Federal Rules of Civil Procedure,” the government continued. “Rather, the certificate of interested parties in both the federal district and appellate courts is designed ‘to assist judges in making a determination of whether they have any interests in any of a party’s related corporate entities that would disqualify the judges from hearing the [appeal].’”
Moreover, the government argued, Disner and Schweitzer “did not confer with the defense” as required by the local rules in the Southern District of Florida prior to filing the motion.
As many as 11,000 parties filed remissions claims in the ASD case, according to federal court records.
Disner and Schweitzer apparently want to know who all of them are and to ascertain “the financial interest of each[,] including those individuals, separately identified, who applied for remission and, as to each, stating whether the request was approved, approved in part, or denied.”
The government, however, advised Altonaga that neither Disner nor Schweitzer have filed their own certificates of interested parties in the case.
Separately, Altonaga today granted the government’s June 4 motion by default to stay discovery in the case, explaining that Disner and Schweitzer have “not filed an opposing memorandum of law to the Motion, nor have they sought an extension of time to do so.”
Disner is a co-founder of the Quiznos sandwich franchise. Schweitzer is a former attorney now living in Miami whose license was suspended in Connecticut.
Both men later became pitchmen for Zeek Rewards, an MLM firm whose business model closely resembles the ASD business model that ASD’s Bowdoin admitted was a Ponzi scheme. Bowdoin is jailed in the District of Columbia. A federal judge revoked his bond June 12 after prosecutors proffered evidence that he continued to promote fraud schemes after the U.S. Secret Service seized tens of millions of dollars in the ASD Ponzi case and after Bowdoin was arrested on Ponzi-scheme charges in December 2010.
Bowdoin pleaded guilty in May to wire fraud in the ASD Ponzi case. His formal sentencing is set for August. He has been banned from multilevel marketing, Internet programs and mass marketing.
Other ASD-Related News From The OneX Fraud Wing
In other ASD-related news, a conference call cheerleading session for the purported “OneX” program was canceled tonight after a rah-rah session that had been scheduled for last Thursday also was canceled.
Tonight’s cheerleading session was to be sponsored by a downline with ASD ties and was contemplated to be one that would build on the purportedly exciting announcement OneX said would be made last week to identify its new payment processor, a source told the PP Blog.
But OneX apparently canceled the Thursday conference call and never identified a new payment processor, so there was nothing for the OneX downline with ASD ties to cheer about tonight.
“It is not possible to move forward without the processor being in place,” the ASD downline group said, according to the source.
But the group held out hope that OneX would announce its new payment processor tomorrow, according to the source.
In April, federal prosecutors said OneX was a “fraudulent scheme” and “pyramid” that was operating in ASD-like fashion.
After the August 2008 seizure by the U.S. Secret Service of tens of millions of dollars in the AdSurfDaily Ponzi case, Dwight Owen Schweitzer became a pitchman for the Zeek Rewards "program," according to this ad. Schweitzer, a former attorney whose license was suspended in Connecticut, and fellow ASD figure Todd Disner sued the United States in November 2011 for alleged misdeeds in the ASD case, claiming the government had authored a "tissue of lies" in the ASD case and that ASD was a legitimate business. ASD President Andy Bowdoin admitted last month that ASD was a Ponzi scheme and that his business never operated legally from its 2006 inception, putting Bowdoin at odds with both Disner and Schweitzer and also purported MLM expert Keith Laggos, who curiously opined ASD was not a "Ponzie" scheme. Bowdoin is now jailed in the District of Columbia after a federal judge revoked his bond. The judge ordered Bowdoin jailed pending formal sentencing after the government proffered evidence that Bowdoin continued to promote fraud schemes after the seizure of $65.8 million from his personal bank accounts in 2008 and after Bowdoin was arrested in December 2010 on ASD-related charges of wire fraud, securities fraud and selling unregistered securities.
EDITOR’S NOTE: The filing by Todd Disner and Dwight Owen Schweitzer to which the PP Blog refers in this story was in response to a May 18 government motion to dismiss a lawsuit filed by Disner and Schweitzer against the United States in the Southern District of Florida or to transfer the case to U.S. District Court for the District of Columbia. The government filed its motions on the same date ASD President Andy Bowdoin pleaded guilty to wire fraud and admitted that ASD was a Ponzi scheme . . .
BULLETIN: In a curious, 23-page narrative, AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer — who went on to become promoters of the Zeek Rewards MLM — have raised the prospect that they could be prosecuted for tax evasion because of the government seizure of ASD’s database in August 2008.
Neither Disner nor Schweitzer referenced Zeek in a filing stamped June 15 and entered today on the docket of U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida. But the filing includes the name of Zeek consultant Keith Laggos, positioning Laggos as an expert on Ponzi schemes who ventured an opinion that ASD was not a Ponzi scheme.
The Disner/Schweitzer filing does not mention that Laggos repeatedly misspelled “Ponzi” as “Ponzie” in his purported expert opinion in the ASD case. Nor does it mention that Laggos was prosecuted by the SEC in a 2004 case that alleged he issued laudatory press releases and a laudatory article for a company that later become the subject of a securities investigation without disclosing he was being compensated for touting the purported opportunity.
Laggos neither admitted nor denied the SEC’s allegations, which involved a company known as Converge Global Inc. and a subsidiary known as TeleWrx Inc. The future Zeek consultant settled the 2004 SEC case by disgorging nearly $12,000, paying interest of nearly $2,000, paying a civil fine of $19,500 and agreeing to a five-year penny-stock ban.
Laggos was permanently enjoined in the case from violating Section 17(b) of the Securities Act, which makes it unlawful to tout a stock without disclosing the nature and substance of any consideration, whether present or future, direct or indirect, received from an issuer, underwriter or dealer.
An image of Laggos now appears in a commercial for Zeek, and a publication owned by Laggos has issued laudatory coverage of the purported MLM opportunity, which plants the seed it provides a return of between 1 percent and 2 percent a day without being a “pyramid scheme” and without constituting an investment opportunity.
It is known that Zeek and ASD had common promoters and that, beginning in about July 2011, some well-known figures in the ASD story began to emerge publicly as Zeek boosters. Among them are former “Surf’s Up” moderator Terralynn Hoy and former ASD pitchman Jerry Napier.
Hoy, who has been listed as a “Zeek” employee and has hosted at least once conference call for Zeek, was a moderator of a defunct ASD cheerleading forum known as “Surf’s Up.” While “Surf’s Up” still was operating, Hoy became a moderator of a forum that led cheers for an autosurf known as AdViewGlobal, which federal prosecutors now say was a fraudulent scheme backed by ASD President Andy Bowdoin. Both Surf’s Up and the AdViewGlobal forum, which also now is defunct, described ASD figure and purported “sovereign citizen” Curtis Richmond as a “hero.”
Richmond has a contempt of court conviction for threatening federal judges and once was sued successfully under the federal racketeering statute for participating in a scheme in which enormous purported judgments were filed against public officials and the officials were threatened with arrest. ASD is known to have had ties to tax deniers and “sovereign citizens.”
Some Zeek promoters also are pushing a purported “opportunity” known as JSS Tripler/JustBeenPaid that may have links to the “sovereign citizens” movement. Frederick Mann, the purported operator of JSS/JBP, does not identify where the purported opportunity operates from and has speculated that the servers of JSS/JBP could be targeted in a “cruise missile” attack by the government.
JSS/JBP advertises a return of 2 percent a day, a percentage that Zeek sometimes says it has matched or exceeded — though Zeek generally stays between 1 percent and 2 percent a day when the purported payout is averaged over a week, Zeek promoters claim.
As a Zeek promoter, Napier was given a puff piece last summer by the purported Zeek opportunity. An individual with the same name appears to have signed a petition in December 2008 calling for the U.S. Senate not to investigate ASD and Bowdoin, but to investigate various federal prosecutors and the U.S. Secret Service agent who brought the ASD Ponzi case in August 2008. The petition showing the name of “Jerry Napier” appears to have been signed by “Jerry Napier” after federal prosecutors brought a second forfeiture case against ASD-related assets on Dec. 19, 2008. As was the case with the August 2008 forfeiture filing by the government, the December 2008 case alleged a Ponzi scheme.
Today’s filing by Disner and Schweitzer advances a theory — even after Bowdoin’s guilty plea to wire fraud last month and public acknowledgment that he presided over a Ponzi scheme — that the government’s Ponzi claims constituted a “house of cards.”
It also plants the seed that prosecutors shopped the ASD case to a “frendly [sic] forum” in the District of Columbia to make it easier for the government to enlist “some of their Washington D.C. operatives to become members of ASD, thereby making them potential witnesses.”
Disner and Schweitzer claim that the seizure of ASD’s database in Florida was unconstitutional because it subjected them to an invasion of privacy and potentially a tax investigation.
“The plaintiffs have alleged that the information taken by the defendant places the plaintiffs in jeopardy of the defendant seeking to prosecute the plaintiffs for tax evasion as a result of the defendant having taken the plaintiffs records which are necessary to enable the plaintiffs to file accurate tax returns for the period covered by those records,” Disner and Schweitzer argued.
And Disner and Schweitzer further ventured (italics added):
As a result of the government’s action, the plaintiffs cannot file accurate tax returns, have lost both past and future business revenues, their reputations have been damaged to the extent that they recruited others to join in the program that the defendant alleged to be a Ponzi scheme, and by inference the plaintiffs have therefore enlisted others to participate in an illegal enterprise. The injuries suffered by the plaintiffs are not hypothetical or conjectural but are both finite and calculable. They have alleged that the actions taken against them were authorized without meeting the constitutionally guaranteed and statutorily increased requirements to establish probable cause and resulted in an illegal search and seizure of their property and effects.
Neither Zeek nor any of its executives or promoters have been accused of wrongdoing. Zeek, though, claimed last month that it was closing two U.S. bank accounts and looking to open an account with a bank it did not name.
Zeek is using offshore payment processors linked to numerous schemes that promote outsize returns. A Zeek auction arm known as Zeekler is auctioning sums of U.S. cash and telling winners it will pay them via offshore processors.
Components of the Zeek scheme are similar to components of the ASD Ponzi scheme.
In 2008, an HYIP scheme known as Legisi resulted in an an SEC civil prosecution. Court papers showed that the U.S. Secret Service and state regulators in Michigan were conducting an undercover probe of Legisi which, like JSS/JBP, sought to make participants affirm they were not government employees.
Like ASD’s Bowdoin, Legisi operator Gregory McKnight pleaded guilty to wire fraud. Records show that a tier of the purported Legisi program offered a daily return that was about one-fourth the daily return Zeek plants the seed can be realized through its purported opportunity.
Although Surf’s Up, which received ASD’s official endorsement as a news outlet with Hoy as a moderator, led cheers for ASD and Bowdoin until the forum mysteriously vanished in January 2010, Hoy appears to believe that Ponzi schemes actually can exist.
SSH2 Acquisitions, a Nevada company that listed Hoy as a director, claimed in 2010 that it had been defrauded in a Ponzi scheme.
If you’re keeping a list of the strange sidebars associated with the AdSurfDaily Ponzi case, here is another entry for your notebook: U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida has ordered onetime practicing attorney Dwight Schweitzer not to contact her by email.
The order was issued Monday, more than five months after Altonaga formally laid down the rules of decorum on how a lawsuit filed by Schweitzer and fellow pro se plaintiff Todd Disner in November against the United States and Rust Consulting Inc. would proceed.
On Nov. 9, 2011, Altonaga specifically advised Schweitzer and Disner that they were required to follow the rules, one of which was that “[n]o letters, pleadings, motions or other documents may be sent directly to the District Judge or Magistrate Judge’s chambers.”
The judge cautioned that “[e]very pleading, motion, memorandum or other paper required and/or permitted to be filed with the Court must be filed directly with the Clerk of the Court.”
Regardless, Schweitzer sent an email pertaining to a scheduling matter directly to Altonaga on Monday. The judge responded by reminding Schweitzer of the Nov. 9 order and ordering him not to send her any more emails.
“[T]he Plaintiff shall file his e-mail and all future filings directly with the Clerk of the Court,” Altonaga told Schweitzer.
Her order was issued six days after she granted Rust’s motion to be dismissed as a defendant in the case, leaving the government as the sole defendant.
It was not the first time Schweitzer allegedly had cut corners and sent an inappropriate communication directly to a judge. On April 17, 2009, the Statewide Grievance Committee of the Connecticut Bar found that he had sent an improper, ex parte communication via fax in July 2008 to a state judge in Florida on the same day she made a ruling against Schweitzer in a case in which he was suing a defendant pro se.
The 2008 fax, according to the committee findings, inappropriately identified Schweitzer as a practicing attorney and was not copied to opposing counsel.
“On or about July 1, 2008, the Respondent (Schweitzer) sent correspondence via facsimile to the chambers of the Honorable Sarah Zabel of the 11th Judicial Circuit of the State of Florida requesting that the dismissal of his case be reopened sua sponte or a hearing be noticed on a motion to set aside the dismissal,” the committee found.
“The judge had made a ruling on the case that morning,” the committee continued. “The Respondent did not send, contemporaneously, a copy of the correspondence to opposing counsel. On the correspondence, the Respondent indicated that he was an ‘Attorney and Counselor at Law[,] licensed solely in the state of Connecticut.’ The Respondent was suspended from the practice of law on August 21, 2003, and his license has been inactive since that time. The Respondent did not indicate to the judge that his license in Connecticut has been suspended.”
In response to the committee’s allegations, Schweitzer wrote, “The purpose of identifying my licensure in correspondence to a judge in a case where I am suing the very same attorney . . . for malpractice and willful misconduct was to let the court know that I was not the typical pro se litigant and felt it completely appropriate to indicate my being licensed with all that it implies.”
But the committee begged to differ, finding that Schweitzer had violated the Connecticut Rules of Professional Conduct even as his license to practice law in the state was under suspension. Schweitzer has not filed papers to regain his license, saying he is retired from the practice of law and interested in other pursuits.
In his April 16 email to Altonaga, Schweitzer did copy opposing counsel, according to the address listed in the “To” line. Whether counsel received the email was unclear.
What is clear is that Altonaga received it — and ordered Schweitzer not to do it again.
On April 10, Altonaga dismissed Rust — the government-approved claims administrator in the civil portion of the ASD Ponzi case — as a defendant.
The claims by Schweitzer and Disner were hypothetical in nature and “far from the ‘definite and concrete’ dispute required for the maintenance of a declaratory judgment action,” Altonaga ruled.
The government has not responded to the complaint.
Among other things, Schweitzer and Disner have contended that the government seized their private information illegally in seizing ASD’s database in August 2008 and that undercover agents who had joined ASD had violated the firm’s Terms of Service.
ASD was running an international Ponzi scheme in which a securities business was disguised as an advertising company, according to the U.S. Secret Service.
U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida has dismissed a lawsuit by AdSurfDaily members Dwight Owen Schweitzer and Todd Disner against Rust Consulting Inc., the government-approved claims administrator in the civil portion of the ASD Ponzi case.
The claims by Schweitzer and Disner were hypothetical in nature and “far from the ‘definite and concrete’ dispute required for the maintenance of a declaratory judgment action,” Altonaga ruled.
And Schweitzer and Disner did “not explain how their allegations relate to their declaratory action against Rust,” Altonaga ruled.
“Indeed,” she continued, “the declaration Plaintiffs seek in this action relates to the government’s verified complaint for forfeiture . . . the Court cannot find — nor do Plaintiffs identify — anything in the Complaint indicating what declaration Plaintiffs seek with regard to Rust.”
Schweitzer and Disner sued Rust and the United States in November. A response by the U.S. Department of Justice is expected soon.
Rust moved for dismissal last month, arguing that Schweitzer and Disner were impermissibly seeking to relitigate the forfeiture action against tens of millions of dollars in the personal bank accounts of ASD President Andy Bowdoin.
Those issues already had been decided in the District of Columbia, where the forfeiture case was filed in August 2008, Rust argued.
In dismissing the claims by Schweitzer and Disner against Rust, Altonaga ruled that the Schweitzer/Disner complaint had presented a “conjectural, hypothetical, or contingent” controversy as it pertained to Rust.
Dwight Owen Schweitzer and Todd Disner — the two AdSurfDaily members from Miami who filed suit against the Justice Department and Rust Consulting Inc. in November 2011 — never filed remissions-claims forms, Rust said in a motion to dismiss the complaint.
And Schweitzer and Disner are “impermissibly” seeking to relitigate the forfeiture action against tens of millions of dollars in the personal bank accounts of ASD President Andy Bowdoin before a federal judge in Florida, Rust asserted.
The original civil case was brought by federal prosecutors in the District of Columbia and decided against Bowdoin/ASD by a federal judge in the District of Columbia.
But Disner and Schweitzer now are seeking a Florida venue to “avoid or evade the earlier judgment in the Seizure Action, or to deny its force or effect,” Rust argued in its dismissal motion.
The Florida court “lacks subject matter jurisdiction,” Rust argued. But even if the court concluded that it could preside over the the lawsuit, Schweitzer and Disner have not stated “a claim upon which relief can be granted against RUST, on the grounds that it constitutes an impermissible attack on the orders, rulings, and judgment rendered in the Seizure Action.”
“Plaintiffs are effectively seeking to re-litigate the Seizure Action in this case,” Rust argued. “Their material allegations and demands for relief center on their desire for this Court to determine whether the USA presented sufficient evidence in the Seizure Action to justify the seizure and confiscation of property held by ASD, including and in particular Plaintiff’s alleged property . . . In other words, in this action Plaintiffs seek to challenge the court’s decisions rendered in the Seizure Action. This is impermissible.”
Moreover, Rust argued, “it cannot be ignored that Plaintiffs admit they were afforded means in the Seizure Action to submit claims for their alleged property, but elected not to do so.”
In bringing their case in November, Schweitzer and Disner claimed an affidavit filed in the forfeiture case by the U.S. Secret Service in the District of Columbia was flawed and that the government hired Rust to implement a remissions program “designed to collect evidence and coerced admissions from the plaintiffs to be used by the government” at the criminal trial of ASD President Andy Bowdoin.
Disner and Schweitzer also took issue with government agents joining ASD prior to the August 2008 seizure and allegedly violating the ASD membership agreement, including an undercover agent who placed his undercover “MySpace” page in ASD’s advertising rotator. In 2008, the government alleged that “ASD did not require, or even verify that the agent “had any product or service to sell.”
Had the agents “lived up to the obligations they took on by becoming members of ASD they should have reported their own violations of the ASD terms of service with the result that the sites they foisted upon ASD would have been removed and the benefits to them as advertisers’ would be forfeited as the ASD rules mandated,” Disner and Schweitzer argued.
As of yesterday, the government had not responded to the lawsuit, which was brought by Schweitzer and Disner in the form of a complaint for declaratory relief that alleged Constitutional violations.
Whether Schweitzer and Disner properly served the government in the case is an issue.
U.S. District Judge Cecilia M. Altonaga has given them an extension of five days — from March 7 to March 12 — to demonstrate the government has been properly served.
If Schweitzer and Disner have properly served the government, it is possible that the Justice Department may move for dismissal on grounds similar to the grounds cited by Rust.
Not only were final orders of forfeiture entered by U.S. District Judge Rosemary Collyer in the District of Columbia, her orders were upheld by the U.S. Court of Appeals months before Schweitzer and Disner turned to the Florida federal court.
In September 2011 — weeks before Schweitzer and Disner brought their complaint — the government returned about $55 million to ASD members who demonstrated a loss through the remissions process administered by Rust.
When the government announced the return of the money, the U.S. Secret Service described ASD as a “criminal enterprise.”
In their complaint, however, Schweitzer and Disner argued that ASD was a profitable venture, in stark contrast to assertions by the government that ASD was insolvent because it created a liability of $1.25 for each dollar it took in through the sale of purported “advertising.”
UPDATED 11:27 P.M. ET (U.S.A.) In May, an email attributed to AdSurfDaily member Todd Disner declared, “Let the games begin!” The remark was in the context of a lawsuit Disner and fellow ASD member Dwight Owen Schweitzer intended to file against the United States once ASD members chipped in enough money to fund the complaint.
Those games apparently have begun with the filing today of a pro se “complaint for declaratory relief” by Disner and Schweitzer in the Southern District of Florida against the United States and Rust Consulting Inc., the government-approved claims administrator in the civil-forfeiture portion of the ASD Ponzi case.
The lawsuit asks a federal judge in Florida to find that the seizure of assets and business records belonging to Disner and Schweitzer was “illegal and void” and demands their return. It also asks the judge to order Rust to “disclose all information in its possession or available to it pertaining to” Disner and Schweitzer.
Among the claims in the lawsuit are that undercover agents from a U.S. Secret Service/IRS Task Force who joined ASD prior to the seizure of tens of millions of dollars from the bank accounts of ASD President Andy Bowdoin violated ASD’s Terms of Service and had a duty to report their alleged TOS violations, including the insertion of an agent’s undercover “MySpace” page in ASD’s advertising rotator, to the company.
Rust is headquartered in Minnesota. Although the complaint named the United States a defendant alongside Rust, the address listed for the United States by Disner and Schweitzer was the address of the office of U.S. Attorney Ronald C. Machen Jr. in the District of Columbia.
Disner, an unsuccessful pro se litigant in the ASD civil case brought by the government, is a co-founder of the Quiznos sandwich franchise. He lives in Miami. Schweitzer, a former attorney, also lives in Miami. The government’s case against ASD-related assets was filed in the District of Columbia in August 2008. Disner was denied standing in the District of Columbia on Aug. 31, 2009, more than two years ago.
Among other things, Disner and Schweitzer claim their private records as contained in ASD’s database were confiscated illegally by the government. They also claimed an affidavit filed in the forfeiture case by the U.S. Secret Service was flawed and that the government hired Rust to implement a remissions program “designed to collect evidence and coerced admissions from the plaintiffs to be used by the government” at the criminal trial of ASD President Andy Bowdoin.
Federal prosecutors in the District of Columbia — the venue in which both the criminal and the civil cases against Bowdoin and ASD-connected assets were filed — had a different take.
“The funds in this case were seized under properly issued judicial warrants,” Machen’s office said today. “Beyond that, the U.S. Attorney’s Office has no comment on the matter at this time. ”
Puzzlingly, the complaint filed by Disner and Schweitzer and recorded on the docket of U.S. District Judge Cecilia M. Altonaga today makes the assertion that “To date the plaintiffs are unaware of any remission payments having been made and specifically the plaintiffs were unable to get the information required for their submissions, all of which are still in the possession of the government.”
On Sept. 22 — more than six weeks ago — the PP Blog reported that thousands of ASD members who filed approved remissions claims would receive back 100 cents on the dollar. Members reported that the money was deposited electronically into their bank accounts beginning on Sept. 23. On Sept. 26, the government announced that $55 million was being returned, with the Secret Service describing ASD as a “criminal enterprise” and the Department of Justice describing the ASD scheme as “insidious.”
In a Sept. 28 email, even Bowdoin acknowledged that he was aware the government had returned money to members through the remissions process. Among other things, the ASD patriarch claimed the government had forced members to lie to receive compensation.
Disner and Schweitzer not only claim in their complaint that they are “unaware” of any money being returned, they also claim the remissions program was designed to “prevent, hamper and forestall the return” of funds.
Meanwhile, Disner and Schweitzer claim that ASD was a profitable venture, in stark contrast to assertions by the government that ASD was insolvent because it created a liability of $1.25 for each dollar it took in through the sale of purported “advertising.”
Disner and Schweitzer also took issue with government agents joining ASD and allegedly violating the ASD membership agreement, including an undercover agent who placed his undercover “MySpace” page in ASD’s advertising rotator. In August 2008, the government alleged that “ASD did not require, or even verify that the agent “had any product or service to sell.”
Had the agents “lived up to the obligations they took on by becoming members of ASD they should have reported their own violations of the ASD terms of service with the result that the sites they foisted upon ASD would have been removed and the benefits to them as advertisers’ would be forfeited as the ASD rules mandated,” Disner and Schweitzer argued.
The lawsuit against the U.S. government filed by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer now appears on the court docket in the District of Columbia, meaning the case formally has been transferred from U.S. District Court for the Southern District of Florida.
