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Tag: Virtual Money Inc.

  • SPECIAL REPORT: Like AdSurfDaily And OneX Before It, Alleged TelexFree Pyramid Scheme May Be Engaging In Game Of Payment-Processor Roulette

    “While reviewing the ASD website in the District of Columbia, [an undercover agent] found a posting within ASD’s News section, apparently posted by ASD on July 2, 2008. The title of the posting was, “Alert Pay & Direct Deposit are being phased out July 31, 2008.” According to ASD’s posting, “We have notified BOA not to accept cash or personal checks for deposit account – English or Spanish.” ASD further stated, “Please remember that the preferred method of purchasing Ad Packages is by mailing a Check or by Solid Trust Pay . . . Solid Trust Pay is a Canada based money transmitting and payment company that, like the e-Gold system, operates over the Internet. It appears that beginning August 1, 2008, Solid Trust Pay will be ASD’s preferred method for receiving funds from members, and for paying rebates and commissions to members . . . Within the past two weeks, ASD has wired several million dollars to Solid Trust Pay from its BOA Accounts. A TFA also learned that earlier in July 2008, a bank other than BOA closed the last account that was controlled by Bowdoin or family members after that bank determined, and explained to them, that an investigation by the bank determined that Bowdoin appeared to be operating a Ponzi scheme.” — AdSurfDaily Ponzi scheme forfeiture complaint, August 2008

    TelexFree affiliate promos encouraging participants to register for International Payout Systems (I-Payout) began to appear online in recent hours. Just last month, TelexFree affiliates were encouraged to register for Global Payout Gateway, another e-Wallet vendor that supposedly would solve TelexFree's payment problems. There now are reports online that GPG has dumped TelexFree, leading to questions about whether TelexFree is trying to port its alleged fraud scheme to yet another vendor -- I-Payout.
    TelexFree affiliate promos encouraging participants to register for International Payout Systems (I-Payout) began to appear online in recent hours. Just last month, TelexFree affiliates were encouraged to register for Global Payroll Gateway, another e-Wallet vendor that supposedly would solve TelexFree’s payment problems as a pyramid-scheme probe moved forward in Brazil. There now are reports online that GPG has dumped TelexFree, leading to questions about whether TelexFree is trying to port its alleged fraud scheme to yet another vendor — I-Payout. Source: Google search results.

    In 2008, the U.S. Secret Service effectively accused the AdSurfDaily MLM “program” of playing a game of payment-processor roulette as U.S. law enforcement put the squeeze on certain money-movers, the willfully blind enablers of online fraud schemes.

    ASD, a $119 million HYIP Ponzi scheme that led to a 78-month prison sentence for operator Andy Bowdoin, started out by accepting “e-Gold and Virtual Money,” according to a Ponzi-scheme forfeiture complaint filed in federal court in August 2008.

    But ASD, according to the complaint, realized e-Gold had come under investigation for enabling the laundering of money, something that could put the heat on ASD.

    “Shortly after publicity surrounding the government’s investigation into e-Gold appeared, ASD discontinued using the e-Gold system as a means for receiving member funds,” the complaint alleged.

    And even as these events were occurring, according to court filings in the ASD case and in other cases, Robert Hodgins, a supplier of debit cards and the operator of Virtual Money Inc. — now listed by INTERPOL as an international fugitive — came under investigation in Connecticut amid allegations he was assisting in the laundering of narcotics proceeds in Medellin, Colombia, and prepping himself to assist in the laundering of funds in the Dominican Republic.

    Virtual Money, whom some ASD members said was supplying debit cards to ASD, also was linked to the PhoenixSurf Ponzi scheme, according to court filings.

    In December 2010, federal prosecutors alleged that ASD also had accepted money from e-Bullion, a California firm that processed payments for Ponzi schemes, including the $72 million Legisi HYIP scheme in Michigan that led to prison sentences for operator Gregory McKnight and pitchman Matthew John Gagnon. E-Bullion operator James Fayed has been sentenced to death for ordering the brutal contract slaying of his wife, a potential witness against him. Pamela Fayed’s throat was slashed repeatedly in the shadows of a Greater Los Angeles parking garage, her husband seated on a nearby park bench “like he doesn’t have a care in the world.”

    ASD, according to court filings, also used AlertPay and SolidTrustPay, money-movers based in Canada that have been linked to multiple Ponzi schemes, including the alleged $600 million Zeek Rewards Ponzi scheme broken up by the SEC last year.

    Not even Bowdoin’s arrest in 2010 stopped him from pitching fraud schemes, according to court filings. Facing serious criminal charges for his actions in ASD, Bowdoin (in 2011) became a pitchmen for the OneX “program,” which federal prosecutors later alleged to be a pyramid scheme recycling money in ASD-like fashion. Among Bowdoin’s fellow OneX pitchmen was T. LeMont Silver, later of Zeek and later of  JubiMax and GoFunPlaces, two MLM “programs” that are suing each other amid allegations of financial fraud.

    At one time, OneX claimed to have a relationship with SolidTrustPay. It then claimed to have ended that relationship and to have started a relationship with I-Payout. Earlier, I-Payout had listed the uber-bizarre TextCashNetwork MLM “program” with ties to the Phil Piccolo organization as a “selected client.” TextCashNetwork now appears to have disappeared, but still is operating with the acronym “TCN” — this time as TrueCashNetwork. How the “new” TCN is processing payments is unknown. What is known is that someone associated with the “new” TCN has sent emails to “winners” in the Zeek scheme in an apparent bid to get them to flog for the new iteration, an apparent investment arm of which is being promoted as an opportunity to earn an interest rate of 50 percent.

    Now — as incredible as it seems — promoters of the alleged TelexFree pyramid scheme operating in Brazil and the United States now are claiming that TelexFree is using I-Payout, known formally as International Payout Systems Inc. Equally incredibly, this is happening less than a month after TelexFree promoters advised TelexFree participants to register with Global Payroll Gateway (GPG), another eWallet company and supplier of debit cards, as a means of getting paid after payouts to Brazilian members of TelexFree were blocked in Brazil.

    Just last month, TelexFree affiliates were encouraging prospects to register with Global Payroll Gateway (GPG). In recent hours --0 and amid reports GPG has given TelexFree the boot -- TelexFree affiliates have been urged to register with I-Payout.
    Just last month, TelexFree affiliates were encouraging prospects to register with Global Payroll Gateway (GPG). In recent hours — and amid reports GPG has given TelexFree the boot — TelexFree affiliates have been urged to register with I-Payout. Source: Google search results.

    There are reports online, including on Facebook from self-identified members of TelexFree, that GPG gave TelexFree the boot in recent days. No sooner did those reports surface than videos went up on YouTube encouraging TelexFree members to register for I-Payout.

    One of the reports that TelexFree suddenly had shifted from GPG to I-Payout is published on the MoneyMakerGroup forum. MoneyMakerGroup’s name appears in U.S. court files as a place from which Ponzi and fraud schemes are promoted. Both FINRA and the SEC have warned that HYIP schemes spread in part through social-media sites such as forums, YouTube and Facebook.

    Because international MLM HYIP fraud schemes often have promoters in common — and because the schemes are promoted on Ponzi cesspits such as MoneyMakerGroup and TalkGold —  proceeds from the schemes can flow into banks at the local level, putting them in the position of becoming warehouses for the ill-gotten gains of participants, including winners and insiders. The use of stored-value debit cards such as those in play in HYIP schemes can lead to the quick dissipation of assets, meaning that victims of an HYIP scheme may have limited hope (or even no hope) that a recovery can be made for their benefit.

    The most recent incongruous events involving TelexFree are occurring even as at least one judge and one prosecutor involved in the TelexFree pyramid probe in Brazil reportedly have been threatened with death. And, as was the case with ASD, some promoters of TelexFree have claimed an ability to expedite the flow of money to the scheme — perhaps through back-office transactions within the TelexFree system.

    Also see report on BehindMLM.com.

     

     

  • REPORTS: Ice Cream Flavor Named After TelexFree, An Alleged Pyramid Scheme; Separately, TelexFree Affiliates May Be Crossing National Borders To Keep The Money Flowing — Even As Purported Opportunity Turns To New Payment Method

    telexfreegpgThe HYIP world is known for promoters’ bids to change the storyline, but this one may take the cake — or at least be a sweet complement.

    There are reports in Brazilian media that a promoter of the TelexFree MLM scheme — alleged to be a massive pyramid — has named an ice cream after TelexFree to show support for the embattled firm.

    “The ice cream is not a pyramid,” a person was quoted as saying in DiarioDigital, according to a translation — and neither is its namesake.

    Here is a link to the story in Portuguese; here is a link to the English translation by Google Translate.

    Recruitment by TelexFree is banned in Brazil while investigations by at least seven Brazilian states proceed. Payments to Brazilian participants by TelexFree likewise are blocked. The purported “opportunity,” however, still is operating in other countries and apparently gathering money and issuing payments.

    Separately, Veja.com is reporting that undercover investigators in Brazil have noticed that some Brazilian promoters of TelexFree have crossed national borders into Bolivia and Paraguay to keep TelexFree investment money flowing. Here is a link to the story in Portuguese; here is the link to the English translation by Google Translate.

    The United States long has warned about cross-border fraud such as was present in PathwayToProsperity, an alleged $70 million Ponzi scheme whose operator is listed by INTERPOL as an international fugitive. P2P, as the “program” was known, made its way across multiple continents and 120 countries, according to court filings.

    Meanwhile, U.S. promoters of TelexFree have been busy watching a promoter’s Aug. 16 YouTube video titled, “How to register your GPG account with TelexFree.”

    GPG, according to the video, stands for Global Payroll Gateway.

    The company, according to its website, provides services such as loading payrolls onto debit cards. TelexFree, according to the affiliate’s video, is now a GPG client and TelexFree affiliates must “connect” their account to GPG to get paid.

    A screen shown in the TelexFree affiliate’s video shows an apparent executive of TelexFree announcing that the changeover to GPG’s services “is causing a delay in our payment process for the first run.”

    The FBI long has warned that certain types of debit cards can be abused and that a “shadow banking system” is playing a role in fraud schemes that affect national security.

    If TelexFree is adjudicated a scam, it may be difficult for the governments of the world or the receivers/trustees they may appoint to gather proceeds for victims. HYIP money may dissipate quickly, perhaps particularly quickly if it is offloaded with debit cards. In a money-laundering case brought in 2008, federal prosecutors in Connecticut said that millions of dollars in narcotics proceeds were offloaded at ATMs in Colombia.

    Robert Hodgins, a Canadian currently listed by INTERPOL as an international fugitive in the Connecticut money-laundering case, reportedly supplied the debit cards through a firm known as Virtual Money Inc. and had ties to the HYIP world and schemes such as PhoenixSurf and AdSurfDaily.

    Another screen in the TelexFree affiliate’s video shows folders with titles such as “telexfree,” “Banner[s] Broker, “hyip monitors,” “forex”and “Passive peeps.”

    The context of the folders shown in the video is unclear. Banners Broker, however, is a bizarre HYIP scheme. HYIP monitors are websites that monitor whether a particular HYIP site is “paying.” Meanwhile, the word “passive” often is used in HYIP scams that promote tremendous returns for investors inclined to sit back and wait for the payments to flow in, instead of recruiting other investors to earn downline commissions from a “program.”

    TelexFree has been promoted on well-known Ponzi scheme forums such as TalkGold and MoneyMakerGroup. The names of both forums appear in U.S. court filings as places from which fraud schemes are advanced.

    From a promo for the alleged $600 million Zeek Rewards Ponzi- and pyramid scheme.
    From a promo for the alleged $600 million Zeek Rewards Ponzi- and pyramid scheme.

    Zeek Rewards, an alleged $600 million Ponzi- and pyramid scheme that had a Ponzi-forum presence and became the target of an SEC action last year, was promoted as a “passive” program. Like Zeek, TelexFree purportedly has a requirement that participants post ads for the “program” online.

    There have been reports in Brazil that a judge and prosecutor involved in the TelexFree case have been threatened with death.

    But not even those disturbing reports were enough to cause TelexFree to cancel a rah-rah event in California last month. The company says it also plans an “at sea” event in December. Earlier, some TelexFree pitchmen provided AdSurfDaily-like coaching tips to enrollees, especially on matters of how to speed the flow of money to the company.

    ASD was a $119 million MLM Ponzi scheme broken up by the U.S. Secret Service in 2008. Like Zeek and TelexFree, the ASD “program” also had a Ponzi-forum presence and was promoted as an opportunity for “passive” participants.

    Some TelexFree promoters in Brazil appear to believe that TelexFree has been deemed legal in the United States by the U.S. government. This errant belief may in part have been instilled by promoters of TelexFree who worded MLM HYIP pitches to suggest that the U.S. government had authorized the “program.”

    Some TelexFree promoters have claimed a payment of $15,125 to the firm will fetch a return of more than $42,000 in a year. Even the cautious “Aunt Ethels” of the world will grow to become keen on TelexFree, according to a promo.

  • EDITORIAL: Bogdan Fiedur Of AdLandPro’s Deplorable Bid To Chill RealScam.com In The Age Of International Mass-Marketing Fraud

    A few weeks prior to the Aug. 1, 2008, seizure of tens of millions of dollars in the personal bank accounts of AdSurfDaily President Andy Bowdoin, Bowdoin apparently believed it prudent to plant the seed that the ASD autosurf had amassed a giant pot of cash and would use it to “hammer” critics. His willfully blind followers helped spread the word on forums that ASD detractors soon would feel the sting of being sued back to the Stone Age.

    Here, according to federal court filings, is what Bowdoin told ASD members at a company rally in Miami on July 12, 2008:

    “These people that are making these slanderous remarks, they are going to continue these slanderous remarks in a court of law defending about a 30 to 40 million dollar slander lawsuit. Now, we’re ready to do battle with anybody. We have a legal fund set up. Right now we have about $750,000 in that legal fund. So we’re ready to get everything started and get the ball rolling.” (Emphasis added.)

    Bowdoin thuggishly suggested that ASD had hired a law firm and that the firm was experienced at “bringing the hammer down on people that need it.” It is worth noting that federal prosecutors included the remarks attributed to Bowdoin in a document labeled “Government Exhibit 5.”

    Meanwhile, it’s also worth noting that “Government Exhibit 1” consisted of the 2006 SEC complaint against 12DailyPro that accused the firm of operating an autosurf Ponzi scheme. It was the government’s way of showing that autosurfs such as ASD rely on willfully blind promoters to proliferate. “Government Exhibit 2,” meanwhile, was the SEC’s 2007 complaint against the PhoenixSurf autosurf. The inclusion of this exhibit was another way to show willful blindness.

    One of the interesting things about the PhoenixSurf complaint was that it referenced Virtual Money Inc., which federal prosecutors in Connecticut later linked to alleged money-laundering by a narcotics cartel in Medellin, Colombia.

    Robert Hodgins, the operator of Virtual Money, is an international fugitive wanted by INTERPOL. ASD also used Virtual Money, according to promos for the firm. In December 2010, federal prosecutors said ASD also had a tie to E-Bullion, a shuttered California payment processor whose operator was accused (and convicted) of arranging the brutal slashing murder of his wife in a Greater Los Angeles parking garage. ASD also had a link to E-Gold, a processor convicted in a money-laundering conspiracy case. So did PhoenixSurf.

    “Government Exhibit 4” in the August 2008 ASD Ponzi case consists of surveillance photos taken in ASD’s hometown of Quincy, Fla. The date upon which the photos were taken is unclear, but it is known that the U.S. Secret Service began to investigate ASD on July 3, 2008, a little more than a week before the Miami rally.

    The entry of the Secret Service in the ASD case fundamentally sent two signals: The U.S. government believed its financial infrastructure might be under attack by an organization — ASD — that was trading on the name of the President of the United States. The SEC has said nothing about the ASD case — at least not in public. Bowdoin was indicted on criminal charges in December 2010. If he is convicted on all counts, the man who once claimed to have a giant pot from which he could draw to “hammer” critics could face up to 125 years in federal prison, fines in the millions of dollars and forfeiture orders totaling at last $110 million.

    In the earliest days of the ASD probe, at least three media outlets — including a local newspaper, a Blog and a regional publication — were threatened with lawsuits. Bowdoin ended up suing no one. In fact, within months he was consumed by litigation directed at him from virtually all fronts. Multiple civil-forfeiture complaints were filed, as was a racketeering lawsuit. These things occurred as a criminal investigation was unfolding slowly.

    For all these reasons and more, Bogdan Fiedur — and members of the AdLandPro online “community” — should perform a sober assessment of Fiedur’s recent threat to sue RealScam.com, an antifraud forum.

    Threats to sue journalists, media outlets, forums, Blogs and other websites that publish information about online schemes are bids to chill speech. These bids are occurring as an epidemic of white-collar crime and securities fraud is sweeping the globe during a period in which government budgets are strained and literally thousands of fraud investigations are under way that reach into all corners of the world.

    It is clear that online fraud is responsible for billions of dollars in global losses. These worlds are exceptionally murky. No one knows for certain where the money goes when fraud schemes disappear — as they so often do. It is equally clear that criminal puppeteers behind the schemes are taunting investigative agencies. From the standpoint of the U.S. government, the government and financial institutions are facing attacks of thousands of tiny cuts.

    Lanny Breuer, the head of the U.S. Department of Justice’s Criminal Division, testified on Capitol Hill yesterday that the “convergence of threats” posed by transnational organized crime is “significant and growing. ”

    “Transnational organized crime is increasing its subversion of legitimate financial and commercial markets, threatening U.S. economic interests and raising the risk of significant damage to the world financial system,” Breuer told the Senate Judiciary Subcommittee on Crime and Terrorism.

    Despite worldwide headlines of one massive fraud scheme after another — and despite the fact that the financial lives of real human beings in all corners of the world are being reduced to rubble by serial Ponzi schemers and scammers — Bogdan Fiedur is threatening to sue RealScam.com.

    At a minimum, it is a PR blunder of the highest magnitude. Bowdoin made the same mistake. So did Data Network Affiliates (DNA), a purported business “opportunity” associated with serial huckster Phil Piccolo, who once planted the seed that, if lawsuits didn’t work, he knew the type of people willing to break legs to silence critics. One apologist for Piccolo and DNA planted the seed that a former federal prosecutor, federal judge and director of the U.S. Department of Homeland Security was a suspect in the 9/11 terrorist attacks.

    It doesn’t get much more bizarre than that — unless one is willing to consider that Bowdoin now is trying to raise funds for his criminal defense on Facebook and claiming that God established a program known as OneX to help him do just that.

    OneX is among the “programs” promoted by members of the AdLandPro “community” — as were ASD and Finanzas Forex (and many others) before it.

    And yet Fiedur apparently believes he can chill RealScam.com into stop doing what it does by registering a domain titled “RealScamClassActionSuit.com.”

    Inverting reality, the purported class-action site ventures that “RealScam encourages cyber-bullying and cyber-stalking by allowing the creation of anonymous accounts and by allowing the users to present of (sic) unproven accusations towards individuals of their targeted organization. The RealScam.com turns out to be just a harassment and bashing site with no verification of facts and indiscriminate attacks at anyone who looks like an easy target.”

    It’s easy to imagine Andy Bowdoin or Phil Piccolo saying the same thing — while doling out accolades to the AdLandPro “community” for its excellent judgment about the types of “programs” the world’s masses should be joining.

    “The wealth generated by today’s drug cartels and other international criminal networks enables some of the worst criminal elements to operate with impunity while wreaking havoc on individuals and institutions around the world,” Breuer of the Justice Department observed yesterday. “Generating proceeds often is only the first step — criminals then launder their proceeds, often using our financial system to move or hide their assets and often with the help of third parties located in the United States. Indeed, international criminal organizations increasingly rely on these third parties and on the use of domestic shell corporations to mask crimes and launder proceeds under the guise of a seemingly legitimate corporate structure.”

    And then Breuer asked the Senate panel to enact legislation that would strengthen money-laundering and asset-forfeiture laws and broaden the federal RICO statute.

    Whether the Senate — and the Congress as a whole — will listen is unclear. What is clear is that, at least in the context of online fraud schemes, victims are piling up in numbers that America’s largest sports stadiums cannot accommodate. Losses are in the billions. Vast sums of wealth have been taken from rightful owners and placed in the hands of criminals.

    It is simply beyond the pale that Fiedur asserts that RealScam.com is a menace, when it is one of the few sites in the world that tasks itself with exposing the menace of international mass-marketing fraud that occurs over the Internet.

    One final thing worth mentioning: A few weeks before Breuer ventured to Capitol Hill to testify before the Senate panel, he carried out another important public duty.

    On Sept. 26, Lanny Breuer joined U.S. Attorney Ronald C. Machen Jr. in announcing that ASD victims who filed successful remissions claims in the civil Ponzi case were getting $55 million back.

    “We will continue to use every tool at our disposal to bring justice to the citizens defrauded by these insidious schemes,” Breuer said.

    Get a clue, Mr. Fiedur.

    Visit RealScam.com.

  • Forex Ponzi Schemers Who Targeted Deaf Investors Hit With $6.2 Million In Sanctions; ‘Billion Coupons’ Case Drew Comparisons To Defunct Noobing Autosurf

    A Hawaii man and his company were hit with sanctions totaling $6.2 million in a case that alleged they targeted people with hearing impairments in a Forex Ponzi scheme.

    Both the SEC and the CFTC filed actions against Marvin Cooper and his Honolulu-based firm, Billion Coupons Inc. (BCI). The CFTC announced the judgment against Cooper and the company.

    Investigators said Cooper and BCI “solicited funds from deaf American and Japanese individuals for the sole purported purpose of trading forex,” luring them with payout promises of up to 25 percent per month.

    For his part, Cooper took “more than $1.4 million of customer funds for personal use, including for flying lessons and to purchase a $1 million home,” investigators said.

    He was ordered to pay $3.9 million in restitution to customers and more than $2.3 million in penalties. The company is liable for the same amounts.

    The “Billion Coupons” case drew comparisons to the now-defunct Noobing autosurf, which also targeted the deaf. Noobing became popular in the aftermath of the August 2008 federal seizure of tens of millions of dollars in the AdSurfDaily Ponzi scheme case.

    Despite the federal seizure, some ASD members promoted Noobing. Noobing effectively went bust in July 2009, when the FTC charged its parent company — Affiliate Strategies Inc. — with pushing a scheme that promised “guaranteed” government grants of $25,000 from economic stimulus funds.

    Noobing later was named a receivership defendant in the case. Receiver Larry Cook sold the company’s assets lock, stock and barrel — right down to a lavatory wastebasket. Like ASD, Noobing’s parent firm also owned a jet ski. Cook sold that, too.

    Despite dramatic asset seizures and the federal actions against ASD and Noobing’s parent — and despite previous actions against autosurfs, including 12DailyPro, PhoenixSurf and CEP — some ASD members have continued to promote autosurfs.

    This has occurred against the backdrop of a racketeering lawsuit against ASD President Andy Bowdoin and public filings in which prosecutors claimed Bowdoin had signed a “proffer” letter in the case and met with members of law enforcement over a period of four days in December 2008 and January 2009.

    It also is known that Interpol is seeking the arrest of Robert Hodgins, whose Dallas-based debit-card company, Virtual Money Inc., is alleged to have agreed to launder drug money in the Dominican Republic and assist a Colombian drug operation launder money at ATMs in Medellin.

    ASD members said Hodgins’ company supplied debit cards to AdSurfDaily, and web records suggest that Hodgins or a Virtual Money designate attended an ASD function in the Orlando area in late 2006.

    Even though Bowdoin acknowledged in court filings that he had given information against his interests to the government, some ASD members continue to promote autosurfs and HYIPs. After signing the proffer letter and surrendering his claims to more than $65.8 million seized from his personal bank accounts, Bowdoin later reentered the case as his own attorney.

    One of Bowdoin’s 10 personal bank accounts contained more than $31 million, according to court filings. Another contained more than $23 million. Three other bank accounts contained the exact same amount — a little over $1 million.

    After submitting to the forfeiture in January 2009, Bowdoin fired his attorneys without notice and attempted to reenter the case weeks later as his own attorney. This set in motion a series of bizarre pleadings from Bowdoin, including one in which he claimed he had not been provided “fair notice” of his illegal conduct by the government. ASD members by the dozens then filed their own bizarre, pro se pleadings. U.S. District Judge Rosemary Collyer ruled against each of the filers, saying they had no standing in the case.

    Collyer since has ruled against Bowdoin, awarding title to more than $80 million seized in the case to the government, which said it intends to implement a restitution program. Bowdoin is appealing Collyer’s forfeiture decisions.

    Court filings show that Bowdoin told Collyer the seized money belonged to him. In September 2009, the U.S. Secret Service presented Collyer a transcript of a conference-call recording in which Bowdoin told members the money belonged to them. Although Bowdoin insisted he had big plans for ASD, records show that he let the firm’s registration lapse in the state of Florida — even as he was telling members they should be excited about the company’s future.

    In the recording, Bowdoin claimed his fight against the government was inspired by the compelling personal story of a former Miss America.

  • UPDATE: Robert Hodgins Still Wanted By Interpol; Co-Defendant In Narcotics Probe With Link To AdSurfDaily Case Sentenced To Prison; Colombian Drug Business Used Same Debit Card As ASD

    Robert Hodgins of Dallas-based Virtual Money Inc. is wanted by Interpol in an international money-laundering case that allegedly involves proceeds from the sale of narcotics. Virtual Money Inc.'s name is referenced in the AdSurfDaily autosurf Ponzi scheme case brought by the U.S. Secret Service and the PhoenixSurf autosurf Ponzi scheme case brought by the Securities and Exchange Commission. The case against VM and Hodgins was brought by the U.S. Drug Enforcement Administration and the IRS. PHOTO SOURCE: Interpol.

    A Colombian national implicated in an international conspiracy to launder drug money has been sentenced to 45 months in prison, federal prosecutors announced.

    Meanwhile, another figure in the alleged scheme — Robert Hodgins, the operator of Dallas-based Virtual Money Inc. (VM) — remains at large, prosecutors said. Hodgins is wanted by Interpol on a warrant issued by a federal judge in Connecticut.

    Hodgins is Canadian by birth and lived in the Oklahoma City area of the United States, according to records.

    VM’s name is referenced in the forfeiture allegations in the AdSurfDaily autosurf Ponzi scheme case brought by the U.S. Secret Service in the District of Columbia in August 2008. It also is referenced in the PhoenixSurf Ponzi prosecution brought by the SEC in Los Angeles in July 2007.

    Juan Merlano Salazar, 36, of Medellin, Colombia, was sentenced to 45 months Aug. 9 by U.S. District Judge Mark R. Kravitz of the District of Connecticut. Salazar is among five defendants convicted so far in the money-laundering case, which allegedly involved the use of debit cards provided by VM to launder drug proceeds at ATMs in Colombia, according to court filings.

    Hodgins also is alleged to have accepted $100,000 to launder drug proceeds in the Dominican Republic.

    The Colombian narco business used “stored value cards” to enable drug proceeds to be withdrawn from banks in Medellin as Colombian pesos, prosecutors said.

    Medellin was home base to the late drug lord Pablo Escobar.

    In August 2009, the PP Blog reported that VM’s name appeared in advertising materials for ASD in 2007. Records suggest that Hodgins or a VM designate attended an ASD function in Orlando in November 2006, about a month after ASD began its rollout.

    This 2007 ad for ASD promoted the VM debit card.

    Some ASD members have said they observed large sums of cash and briefcases full of cashiers’ checks at ASD “rallies” in U.S. cities in the spring and summer of 2008, which led to questions about whether ASD was laundering money for a drug cartel and international criminals.

    If the allegations against VM and Hodgins are true, it means the company that provided the debit cards ASD used was in the business of laundering money for at least one international narco business.

    On Aug. 1, 2008, the U.S. Secret Service seized more than $80 million in the ASD case. The money allegedly was tied to at least three autosurfs: ASD, GoldenPandaAdBuilder and LaFuenteDinero.

    ASD, which had operated under at least one other name and perhaps as many as three or more, claimed in 2007 that one of the reasons it could not make payments to members was that $1 million had been stolen by “Russian” hackers.

    Prosecutors said ASD never filed a police report — not even to report the theft of a huge sum of money. ASD instead relaunched as ASD Cash Generator. By the summer of 2008, it was gathering tens of millions of dollars per week.

    One bank account in the name of ASD President Andy Bowdoin seized by the Secret Service contained more than $31 million, according to court filings. Another account in Bowdoin’s name contained more than $23 million. Bowdoin was referenced as the “Sole Proprietor” of the accounts.

    All in all, the Secret Service seized more than $65.8 million from 10 Bowdoin bank accounts, and more than $14 million from at least five bank accounts linked to Golden Panda, according to records.

  • KABOOM! Agents Tie Alleged ‘Evolution Market Group’ Ponzi And HYIP Fraud Scheme To Narcotics Case In Arizona; Tens Of Millions Of Dollars Seized; Firms Promoted On ASA Monitor, TalkGold Forums

    Kaboom! It has happened again. Explosive court filings by the government show that kneejerk apologists and defenders of High Yield Investment Programs (HYIPs) and autosurfs are quickly running out of cover when they assert that anything is noble or even real about the programs they relentlessly push for their share of purported profits from introducing others to the schemes.

    A law-enforcement task force consisting of the U.S. Secret Service, the IRS and veteran investigators from other agencies that specialize in reverse-engineering complex money-laundering networks have tied funds from a widely promoted online HYIP to the international narcotics trade and a murky money-services business. Research shows that the program and offshoots could have gathered between $100 million and $200 million before the wanton criminality was exposed after exhaustive investigations. The program was advertised as lucrative and harmless on the Ponzi-friendly ASA Monitor and TalkGold forums.

    Research by the PP Blog suggests the purported investment program was so sordid that promoters even claimed some of the funds were being used for the “humanitarian” purpose of assisting kidnapping victims in Colombia. In a sickening display of marketing theatrics, a claim was made that investors could “adopt” kidnapping victims for a payment of $1,000 and that the company would set aside $500 in corporate funds for each victim so that their families could have bright futures if the victims ultimately were released by their captors.

    The HYIP scheme allegedly was associated with an entity known as Evolution Market Group (EMG), which purportedly had a Forex component known as FinanzasForex. Investigators alleged in January  that there were schemes within schemes in a tangled web of domestic and international deception that featured dozens of bank accounts, shell companies and various fronts for money-laundering enterprises, including companies purportedly in businesses such as real estate and car washes.

    The scheme was so corrupt, according to court filings, that some investors were told that, in order to leave the program whole, they had to recruit new investors, have the new investors pay them directly — and use the proceeds from the new investors to “recover” their initial outlays.

    Members of the same Florida-based task force also are involved in the AdSurfDaily autosurf Ponzi scheme investigation. In the ASD case, records show that the company once advertised a debit card federal prosecutors in Connecticut say was offered by a Dallas-based firm that laundered money for a narco business in Medellin, Colombia. The Dallas firm, known as Virtual Money Inc. (VM), also agreed to launder purported drug proceeds in the Dominican Republic, according to court filings.

    Robert Hodgins, the operator of VM, is now an international fugitive wanted by INTERPOL.

    ASA and TalkGold are infamous for promoting international financial frauds, with posters routinely describing the programs as legitimate. The very first post about the alleged EMG scheme at ASA referenced yet another Ponzi scheme — 12DailyPr0 — and informed prospects that they could earn commissions by introducing the alleged Forex component of EMG to others.

    “I have been in internet business for 3 years now and in autosurf industry from 12dailypro,” an ASA poster began, while promoting EMG’s Finanzas Forex arm, which investigators now say was part of a grandiose scheme with tentacles in Central America, South America and Europe.

    “And the (sic) you can earn also money from people under you if you want, you get 0,5% (sic) from every one that you bring (0,5% (sic) from his investment),” the poster said in April 2008.

    Court filings in the EMG case paint a picture of an incredibly elaborate maze of companies and bank accounts set up to confuse both investors and law enforcement. At least 59 bank accounts, 294 bars of gold and nine luxury vehicles have been seized in the case. One of the cars was a 2008 Lamborghini Murcielago valued at more than $430,000.

    The EMG allegations are explosive because they showcase the now-undeniable fact that people who promote programs such as HYIPs and autosurfs because such programs may pay “commissions” to recruit new members may be operating as fronts or conduits for international drug dealers and money-launderers.

    Although ASD is not mentioned in a Task Force affidavit in the EMG case, forfeiture complaints against assets tied to both companies include similar allegations of wanton, relentless fraud. Compellingly, EMG allegedly sponsored “rallies” of members, an allegation in common with allegations in the ASD case. At the same time, research suggests that EMG touted offshore events in exotic locations.

    AdViewGlobal, an autosurf with close ties to ASD, also touted offshore venues and once sponsored at least one meeting on a ship at sea, according to members.

    Meanwhile, research suggests that both EMG and ASD went to great lengths to mask the schemes just prior to interventions by law enforcement and that both schemes had ties to narcotics traffickers and professional money-launderers.

    Both the alleged EMG and ASD schemes were operating during the same general time period, roughly between 2006 and 2008, according to court filings. Each of the schemes had components of investment fraud that targeted people who spoke Spanish or English. Task Force agents have been investigating entities and individuals linked to EMG since June 1, 2008, including a mysterious entity known as DWB Holding Co.

    “The conspiracy to commit wire fraud offenses that gives rise to this action is an international Ponzi/Pyramid scheme operated by Evolution Market Group (EMG) d/b/a Finanzas Forex, DWB Holding Company (DWB), Superior International Investments Corporation (SIIC), German Cardona (Cardona), Daniel Fernandez Rojo Filho (Rojo Filho), Pedro Benevides (Benevides) and others in which investors have been defrauded out of millions of dollars,” federal prosecutors said.

    Federal agencies, including the U.S. Drug Enforcement Administration (DEA), seized “financial accounts” in DWB’s name during a drug investigation in Arizona, according to court filings in Florida. One account seized during the drug probe contained more than $24 million. The money was seized on Aug. 22 and Aug. 26, 2008, about three to four weeks after agents seized more than $80 million in the ASD case.

    A section of U.S. law referenced in the EMG forfeiture complaint refers to “cocaine” and “marihuana,” among other drugs.

    As the investigation progressed, agents established additional money-laundering links — and other bank accounts were seized, according to court filings. The precise mechanism by which purported investment money ended up in accounts seized in the drug case was not immediately clear.

    Shameful Behavior By HYIP And ‘Surf Advocates

    Still promoting autosurfs and HYIPs? Still selling yourself on the delusional theory that they’re harmless and that only “Socialists” or “Nazis” would support the government’s efforts to destroy them? Still arguing that journalists who write about the cases are “liberal” lackeys, have no understanding of the “real” issues and won’t be pleased until every single American entrepreneur is assigned an individual bureaucrat to make their lives miserable?

    Still calling for federal prosecutors and Secret Service agents to be investigated because you love your downline commissions gleaned from Ponzi proceeds and the sale of unregistered securities, don’t want to part with them and figure that, if only you scream loudly enough and long enough, you’ll be able to persuade your fellow Americans that the cops are the real crooks?

    In August 2009, the PP Blog reported that members of ASD, which is implicated in an autosurf  Ponzi scheme involving tens of millions of dollars, advertised that the company used the debit-card services of VM in Dallas. Research suggests that Hodgins or a VM designate attended an ASD function in Florida shortly after ASD’s launch in late 2006.

    Prosecutors said that VM helped the Colombian drug operation offload at least $7.1 million in illegal proceeds at automated teller machines in Medellin. Medellin once was home base of the infamous Medellin Cartel, operated by drug lord and terrorist Pablo Escobar. Escobar was killed by Colombia National Police in 1993.

    Escobar was implicated in the assassination of Colombian presidential candidate Luis Carlos Galán and the bombing of Avianca Flight 203 over Colombia, which killed 110 people.

    Autosurf and HYIP promoters long have claimed that participation in the illegal enterprises is harmless. The indictment against VM — and the allegations that it laundered money for a Colombian drug organization — demonstrates the dangers of participating in murky businesses in which participants have no way of knowing what is in the hearts and minds of other participants.

    It was not immediately clear how long ASD used the VM debit card, which was heavily promoted in early 2007 when ASD said it was having cash-flow problems. By 2008, ASD said it was generating tens of millions of dollars of revenue per week. Some members said they observed huge sums of cash and brief cases full of cashier’s checks at ASD rallies in Florida cities.

    Two Colombian conspirators “directed their agents in the United States to provide proceeds of sales of controlled substances to agents of VIRTUAL MONEY, INC. to be sent to Colombia so the proceeds could be made available to the clients,” according to the indictment against Hodgins.

    VM “stored value cards were used by the members of the conspiracy to make available at a Daviviendo Bank ATM in Medellin, Colombia the peso equivalent of US $2,430,810.24 in April 2006; US $2,437,023.53 in June 2006; and US $2,257,761.45 in August 2006,” prosecutors charged.

    VM and its president, Robert Hodgins, were indicted under seal in 2008 in a case brought by the DEA. The seal was lifted in September 2008, a month after the U.S. Secret Service seized 15 bank accounts in the ASD case.

    ASD was accused by the Secret Service of operating an international Ponzi scheme.

    One of the alleged components of the ASD scheme was an autosurf named LaFuenteDinero, which targeted people who spoke Spanish. Records show that one of the Secret Service agents involved in the ASD investigation formerly was a member of a DEA Task Force in Florida and was experienced in “investigating large criminal organizations that distributed and sold controlled substances.”

    In November 2009, the PP Blog reported that the Secret Service expressed a fear in court documents originally filed under seal that ASD President Andy Bowdoin had become aware of scrutiny into his business affairs in 2008 and planned to flee the United States.

    “Based [on] ASD’s indication that it intends to cease accepting funds into [Bank of America] at the end of July 2008, Bowdoin’s indication that he has relinquished his interest in Golden Panda [Ad Builder], and an indication that Bowdoin intends to establish his offshore presence, and the recent complaints governmental authorities have received, I believe that Bowdoin is aware of increasing scrutiny and that he intends to move himself, his proceeds, and, until it collapses possibly his operation, offshore,” the Secret Service wrote in an affidavit.

    Golden Panda was the purported “Chinese” arm of ASD, according to court filings.

    The agency said Bowdoin had moved millions of dollars into Canada just prior to the seizure of his assets.

    Read a warrant originally issued under seal Aug. 1, 2008, by U.S. Magistrate Judge Alan Kay, who ordered the U.S. Department of Homeland Security to seize a Bowdoin bank account that contained more than $31.6 million. The entire sum was in an account under Bowdoin’s name. Agents eventually seized at least nine other Bowdoin accounts that, in the aggregate, contained more than $34.2 million.

    In recent days, the PP Blog  reported that the alleged INetGlobal autosurf Ponzi scheme in Minnesota, which allegedly targeted Chinese prospects,  had ties to at least three other Ponzi cases, including ASD and a separate Florida case in which it was alleged that the same debit-card company that provided services for INetGlobal provided services for a company implicated in a $22 million Ponzi scheme with ties to Panama.

    Some INetGlobal members provided Chinese prospects instructions on how to offload profits onto debit cards that could be used to withdraw cash at ATM machines, according to promotional material for INetGlobal. About $26 million has been seized in the INetGlobal case.

    INetGlobal-related entities such as Cash Cards International (CCI) and V-Cash now have been linked to a fourth financial-fraud scheme known as Megafund. In the $13 million Megafund case, it was alleged that CCI and V-Cash provided services for certain participants in the Megafund HYIP scheme. At least $175,000 purportedly transferred by a mysterious entity known as MexBank S.A. de C.V. passed through CCC and V-Cash, according to court filings.

    The money was described in court filings as commission payments for the Megafund scheme. Authorities later determined that MexBank was “neither a bank nor a legitimate financial institution licensed” in Mexico, despite its official-sounding name.

    Bradley C. Stark, one of the defendants in the Megafund case, was convicted in 2003 of possessing counterfeit government securities. He was released from prison and was on probation while participating in the Megafund scheme, according to court records. The scheme targeted Christians, and investors were told money was being directed to humanitarian causes.

    Forbes magazine wrote about the Megafund case in July 2005, in a story titled “Too Good To Be True.”

    Less than four years later, the AdViewGlobal autosurf sent an email to members that included Forbes’ logo in a sales pitch. Research showed that the logo had been hotlinked from Forbes’ website and that AdViewGlobal members were attempting to create the appearance that the famous publishing company had endorsed the autosurf scheme. Like the Megafund and EMG schemes, participants in AdViewGlobal were told a portion of the money was devoted to humanitarian causes, including a purported fund devoted to preserving the rainforest.

    In the AdSurfDaily case, members said the company touted a contribution of 100,000 “ad packs” to a charity. The donation was used by promoters to position Bowdoin as a benevolent human being.

    At an ASD rally in Las Vegas in 2008, Bowdoin asserted that he thanked God daily for making him a “money magnet,” and he implored members to imagine themselves coming into large sums of money through rebates on ASD advertising purchases that not only would return 100 percent of the cost of the members’ advertisements, but also pay them at least 25 percent beyond that — more if they rolled over a percentage of their purchases.

    The payment-processing arm of INetGlobal also has been tied to a Ponzi scheme known as Learn Waterhouse, which purportedly advertised a presence in Mexico, according to court filings. Four people have been sentenced to lengthy prison terms in the Learn Waterhouse case, some of the underpinnings of which led to the successful prosecution of INetGlobal operator Steve Renner for income-tax evasion in December 2009.

    Filings in the Learn Waterhouse case assert that Renner, who operated both CCI and V-Cash, used customers’ funds as though they were his own.

    When the Learn Waterhouse receiver tried to reclaim the funds to make Ponzi victims as whole as possible, the money was not available because Renner had spent it on personal purchases, according to court filings.

    If you are playing the HYIP and autosurf games, the PP Blog suggests you read these documents from the alleged EMG Ponzi case.

    Task Force affidavit.

    Amended Forfeiture Complaint in U.S. District Court in Orlando.

    Still want to cheer for the HYIPs and autosurfs?

  • UPDATE: 5 Convictions To Date In Money-Laundering Cases Involving Colombian Drug Operation That Used Same Debit Card As AdSurfDaily Autosurf

    Federal prosecutors have announced five convictions in an international money-laundering case involving drug proceeds and the use of “stored-value” debit cards. (See subhead below.)

    The cases were brought by the Drug Enforcement Administration in 2008 as a result of an undercover operation. The debit cards used in the transactions were provided by Virtual Money Inc., according to court records in Connecticut.

    Records show that Virtual Money, known simply as VM, was the same company that provided debit cards to AdSurfDaily and other autosurf companies. VM’s operator, Robert Hodgins, also was indicted in the drug-related cases and “is being sought by law enforcement,” federal prosecutors said.

    News about the convictions in Connecticut was announced about two weeks after FBI Director Robert Mueller III testified before Congress that “stored value devices” such as reloadable debit cards increasingly were being used to move criminal proceeds through a “shadow banking system” that endangered the United States.

    The PP Blog reported in August 2009 that VM’s name appeared in advertising materials for ASD in 2007. Research showed that VM also provided cards to other autosurfs and HYIPs, including the PhoenixSurf autosurf Ponzi scheme.

    Records suggest that Hodgins or a VM designate attended an ASD function in Orlando in November 2006, about a month after ASD began its rollout.

    During that same year, according to the DEA court filings unsealed in September 2008 after a two-year investigation, VM cards were used in Medellin, Colombia, to withdraw millions of dollars in drug proceeds at ATMs between April and August.

    The drug-related, money-laundering indictments against VM initially were filed under seal in April 2008 and then superseded under seal in June 2008. The documents were made public in September 2008, about a month after the federal seizure of tens of millions of dollars from the personal bank accounts of ASD President Andy Bowdoin, amid Ponzi scheme, wire-fraud, money-laundering and securities allegations in an autosurf case.

    Some ASD members said they observed large sums of cash at ASD “rallies” and suitcases full of cashier’s checks.

    After purportedly operating in the hole throughout much of its existence and allegedly experiencing an unreported theft of $1 million at the hands of “Russian” hackers, ASD suddenly  came into possession of tens of millions of dollars in the first half of 2008, leading to questions about whether it was serving as a front to launder proceeds from criminal organizations.

    References to VM appear in ASD advertising materials dating back to at least February 2007, and other ASD references to VM date back to the fall of 2006, when ASD was just getting off the ground.

    In March 2008, according to records, a DEA informant gave Hodgins $100,000 in undercover funds, saying an uncle needed drug money laundered in the Dominican Republic. Hodgins allegedly agreed to perform the service for a fee of 10 percent of the amount, and the DEA alleged it has audio and photographic evidence of the transaction.

    If the allegations are true, it means the DEA has audio and photographic evidence of the man who provided debit cards to ASD and other surf enterprises accepting money to participate in international drug transactions and international money-laundering.

    Convictions In Drug/Money-Laundering Cases

    On March 30, 13 days after Mueller testified before Congress on the dangers of stored-value devices, Juan Merlano Salazar, 35, of Medellin, Colombia, pleaded guilty in U.S. District Court in Connecticut to 11 counts of money-laundering and one count of conspiracy to commit money laundering.

    Merlano was named in the same indictment that charged VM’s Hodgins and the company itself. Merlano was extradited from Colombia in June 2009, a year after he, Hodgins, VM and seven other defendants were charged in the superseding indictment. Merlano has been detained since his extradition and faces sentencing in June.

    He faces a maximum penalty of 240 years in prison and a maximum fine of $6 million.

    Four other defendants also have pleaded guilty to date to “charges stemming from this conspiracy,” prosecutors said.

    Guilty pleas were entered by Francisco Dario Duque, 49, of Medellin, Colombia; Gonzalo Bueno, 72, of Brooklyn, New York; Juan Chavarriaga, 45, of Fort Lauderdale, Florida, and Jose Manotas, 46, of New York, New York.

    Each of the defendants is detained and awaiting sentencing, prosecutors said.

    “[T]he [drug]organization employed operatives in the United States and funneled millions of dollars in drug proceeds from the U.S. to Medellin, Colombia,” prosecutors said.  “The investigation, which utilized a variety of traditional and sophisticated investigative techniques, including court-authorized interception of international e-mail, disclosed that the money laundering organization used direct deposits of cash into third-party bank accounts, as well as payment of third-party debt obligations to move cash drug proceeds from the New York metropolitan area out of the country.

    “The organization also used ‘stored value cards,’ which function like debit cards and enabled cardholders to deposit U.S. dollars into accounts locally, to be withdrawn later from banks in Medellin as Colombian pesos,” prosecutors said.  “The Government has alleged that the scheme resulted in the laundering of more than $7 million in drug proceeds.”

    Hodgins was president and chief executive officer of VM, a Texas-based business.

    “Hodgins is being sought by law enforcement,” prosecutors said.

    In addition to the DEA, the case is being investigated by the Criminal Investigation Division of the IRS, prosecutors said.

  • BREAKING NEWS: Secret Service Feared Bowdoin Would Flee Country After Moving Money Offshore And Relinquishing His Interest In Golden Panda Ad Builder

    The U.S. Secret Service feared AdSurfDaily President Andy Bowdoin had become aware of scrutiny into his business affairs and planned to flee the country, according to a 37-page affidavit originally filed under seal in the case.

    Meanwhile, the affidavit revealed that a key Secret Service investigator in the case formerly was a member of a Drug Enforcement Administration (DEA) Task Force in Florida and was experienced in “investigating large criminal organizations that distributed and sold controlled substances.”

    The Secret Service affidavit, however, did not list allegations of a drug crime. Instead the agency focused on what was described as a “wide-spread Ponzi fraud” and the crimes of wire-fraud and conspiracy to commit wire fraud, noting that the affidavit had been “submitted for the limited purposes of establishing probable cause.”

    “I have not included every detail of every aspect of the investigation for this affidavit,” the agent who prepared the affidavit said. “Rather, it only includes the information necessary to prove that probable cause exists for a seizure warrant to be issued for property constituting proceeds of a wire fraud scheme.”

    Accompanying the affidavit were government exhibits of evidence totaling 57 pages, all of which were reviewed by U.S. Magistrate Judge Alan Kay, who determined that the Secret Service had established probable cause to seize 10 Bowdoin bank accounts.

    In a series of 13 orders dated Aug. 1, 2008, Kay directed the Secretary of the U.S. Department of Homeland Security “and any Authorized Officer of the United States” to seize Bowdoin’s bank accounts and three accounts tied to Golden Panda Ad Builder.

    Bank of America, the financial institution in all 13 cases, was ordered to freeze the accounts.

    The documents are the first to reveal that a judge other than U.S. District Judge Rosemary Collyer had a role in the case. Meanwhile, the documents destroy myths advanced by some ASD members that the seizure was accomplished extrajudicially, that the government was not authorized to seize the funds — and even that agents were partying with the money.

    “Based [on] ASD’s indication that it intends to cease accepting funds into [Bank of America] at the end of July 2008, Bowdoin’s indication that he has relinquished his interest in Golden Panda [Ad Builder], and an indication that Bowdoin intends to establish his offshore presence, and the recent complaints governmental authorities have received, I believe that Bowdoin is aware of increasing scrutiny and that he intends to move himself, his proceeds, and, until it collapses possibly his operation, offshore,” the Secret Service wrote in the affidavit.

    The agency said Bowdoin had moved millions of dollars into Canada just prior to the seizure

    Read a warrant originally issued under seal Aug. 1, 2008, by U.S. Magistrate Judge Alan Kay, who ordered the U.S. Department of Homeland Security to seize a Bowdoin bank account that contained more than $31.6 million based on the government’s affidavit in the case.

    On July 22, prior to the seizure and during the early part of the investigation, the Secret Service listened to a Golden Panda conference call featuring Clarence Busby, according to the affidavit.

    “During the call, a person who identified himself as Busby said that Bowdoin approached him about running ‘Golden Panda,’” the Secret Service said in the affidavit. “Busby stated that he and Bowdoin were 50% partners but that Busby would be in charge of the daily operations of Golden Panda.”

    But Busby’s words ultimately conflicted with a note on Golden Panda’s website “purportedly written by Bowdoin advising that he was relinquishing his role as President, as well as his ownership rights in, Golden Panda,” the Secret Service said.

    A federal judge lifted the seal on the records in October 2008. Although the filings became public records upon the lifting of the seal, the information was difficult — though not impossible — to obtain though federal database searches.

    Records were filed under 13 different case numbers — one for each bank account — none of which could be accessed by searching under the names of Bowdoin, Busby, AdSurfDaily or Golden Panda.

    Agents had been probing ASD since early July, and increasingly gained knowledge about the firm by conducting surveillance in ASD’s home city of Quincy, Fla. Multiple agents joined the autosurf, the Secret Service said.

    Among the troubling developments in the earliest days of the probe were that a bank other than Bank of America had closed a Bowdoin account amid Ponzi scheme fears and that Bowdoin was moving money into Canada, where it could not be easily traced, according to the affidavit.

    Bowdoin’s behavior pointed to a plan to leave the United States, the Secret Service said.

    At the same time, the Secret Service said, the FBI was beginning to receive complaints about ASD, including an inquiry from the Gadsden County Chamber of Commerce about the legitimacy of the surf firm.

    Bowdoin proved to be an embarrassment for the Chamber, which initially lauded him for creating jobs but later found itself confronting troubling questions about the firm.

    Investigators “also learned that Bowdoin had purchased, or was seeking to purchase, a home in another country,” according to the affidavit.

    On July 12 in Miami, the Secret Service said in the affidavit, Bowdoin told attendees of an ASD “rally” that the company “was looking to purchase a South American call center, to purchase a credit card processing center, to purchase an interest in an international bank, and to profit from future investments in real estate.”

    All of the ASD bank accounts were in Bowdoin’s personal name, with a “D/B/A,” the Secret Service noted.

    A Dallas-based company with ties to ASD was charged in a sealed indictment in April 2008 with helping a Colombian cocaine operation launder money by providing debit cards that were used to convert drug proceeds to cash in Medellin.

    The company — Virtual Money Inc. — once provided debit cards to ASD. A grand jury in the Virtual Money case authorized forfeiture complaints totaling $7.12 million. The complaint was unsealed in September 2008, several weeks after ASD’s assets were frozen. The indictment names 10 defendants, including VM President Robert Hodgins, who is believed to have fled the United States.

    Prosecutors said that Virtual Money, known simply as VM, helped the Colombian drug operation offload at least $7.1 million in drug proceeds at automated teller machines in Medellin. Medellin once was home base of the infamous Medellin Cartel, operated by drug lord and terrorist Pablo Escobar. Escobar was killed by Colombia National Police in 1993.

  • EDITORIAL: Bowdoin’s Public Support Largely Has Vanished

    Andy Bowdoin
    Andy Bowdoin

    In 2006 and 2007, AdSurfDaily Inc. used the services of Virtual Money Inc., a debit-card provider accused last year of laundering money for a major narco business in Medellin, Colombia.

    ASD also has been linked to the CEP Ponzi scheme, the PhoenixSurf Ponzi scheme (which also used Virtual Money debit cards), the 12DailyPro Ponzi scheme and e-Gold, which was indicted and convicted of money-laundering.

    ASD President Andy Bowdoin also has been linked to a little-known (and now gone) enterprise known as DailyProSurf, which preceded ASD and used two of the three words that comprised the title of the infamous 12DailyPro Ponzi scheme — and, as it turned out, one of two words that comprised the title of the infamous PhoenixSurf Ponzi scheme.

    Earlier this year Bowdoin appeared in a video pitch for a purported surf known as PaperlessAccess. It was a way for ASD members to get their money back, he explained. The Pro-ASD Surf’s Up forum later explained that PaperlessAccess has misrepresented itself to Bowdoin. Some people observed that PaperlessAccess appeared to be using the same surf script ASD used — and the same database.

    Bowdoin’s public support largely has evaporated. Although he continues to have apologists willing to twist facts and conflate new realities to explain away every bit of bad news — including people who cling to a fantasy that ASD can demonstrate it was not a Ponzi scheme — his remaining loyalists long ago lost the PR battle. “Evil government” never was much of an argument, mostly because people generally support the police. Bowdoin himself exposed the fallaciousness when he acknowledged ASD was operating illegally.

    The court already has rejected one argument advanced by an ASD expert witness, ruling that attorney Gerald Nehra had “demonstrated the fallibilities of the professional expert witness, who was defensive on his client’s behalf rather than neutral in his expertise.”

    Among the problems with Nehra’s testimony at an evidentiary hearing last fall, the judge said, was that it contradicted the testimony of other ASD witnesses and “relied solely on the written words contained in the Terms of Service without independent investigation or review of ASD’s business records to ascertain how ASD operates in fact before opining.”

    Keith B. Laggos, another expert ASD reportedly has on its side, had problems with the SEC for publishing “laudatory” press releases and a “laudatory article” about a company without disclosing he was being compensated by the company.

    “[T]he final judgment entered against Laggos provides for disgorgement of $11,989.87, plus prejudgment interest in the amount of $1,996.77, for a total of $13,986.64; the imposition of a civil penalty of $19,500; and a five-year penny stock bar,” the SEC said in 2005.

    Moreover, some ASD promoters have been linked to any number of failed schemes, including MegaLido, Noobing and Regenesis 2×2, which now is under investigation by the U.S. Secret Service in Washington state. One of the purported Regenesis principals was released from federal prison only in January, after serving time in a previous fraud scheme.

    Larry Cook, the receiver in a fraud case against Noobing’s parent company, Affiliate Strategies Inc., said in court filings Thursday that the company and affiliated companies were broke.

    In the early stages, it has been hard to get a fix on finances because “several thousand intercompany transfers” occurred, Cook said, adding that “for at least all of 2009, Defendants operated only by signing up new victims faster than the old victims could obtain refunds.”

    Some ASD promoters, of course, also pitched BizAdSplash (BAS) — even though “chief consultant” Clarence Busby operated Golden Panda Ad Builder, whose assets ($14 million) were seized in the ASD probe. BAS currently is paying no one. Neither is AdGateWorld (AGW), another surf pitched by ASD members. ASD’s name once appeared in the AGW Terms of Service.

    If that were not enough, members now say that ASD President Andy Bowdoin was the silent head of AdViewGlobal (AVG), which suspended cashouts June 25, closed its forum, announced it was keeping all money sent in by members under a “rebates aren’t guaranteed” clause and conducting an audit of itself.

    AVG recently announced it had reported the theft of $2.7 million to state and federal authorities. The announcement was made one day after ASD announced in court filings that it was negotiating with federal prosecutors.

    Bowdoin, who also has been named a defendant in a racketeering lawsuit but has not responded to the complaint, even acknowledged in his own court filings that ASD was operating illegally, claiming the government had an extraordinary duty to inform him that what he was doing was breaking the law.

    AVG launched despite ASD’s unresolved legal nightmare, which leads to questions about whether Bowdoin also believed the government had an extraordinary duty to tell him that AVG was illegal.

    The ASD case is strange by any standard one chooses to apply, including the incongruous standards of the autosurf world. At various times it has featured court filings by Curtis Richmond, a man associated with a group that declared itself a sovereign Indian tribe and organized its own Supreme Court, using the address of a Utah doughnut shop. The group derisively became known as the “Arby’s Indians” because it once held a meeting at an Arby’s in Provo.

    Richmond and co-defendants in a Utah civil case were found by a federal judge last year to have engaged in racketeering in a scheme to destroy the credit of public officials involved in litigation against the tribe, which the judge ruled a “complete sham.”

    Even jailed racketeer and former U.S. Rep. James Traficant became a side note in the ASD case, after some ASD members circulated this PDF in sympathy of his views on what they view as a banking and Federal Reserve conspiracy.

    “Redeemable currency must promise to pay a dollar equivalent in gold or silver money,” Traficant was quoted as saying in 1993, before he was jailed.  “Federal Reserve Notes (FRNs) make no such promises, and are not ‘money.’”

    ASD-related litigation is not the only trouble that has dogged Bowdoin since the filing of the federal forfeiture case last August.  In December 2008 — in an unrelated case in Gadsden County, Fla. — a process server attempted unsuccessfully to serve Bowdoin with a lawsuit for an unpaid bill, and reported back to the court that “the address appears vacant.”

    Bowdoin’s last known address was 8 Gilcrease Lane in Quincy, according to April court filings by his former attorneys. Bowdoin fired his attorneys and proceeded as a pro se litigant, but later was ordered to hire a new attorney.

    Meanwhile, there has been virtually no public activity since early January in the case against Bowdoin filed last year by Florida Attorney General Bill McCollum, whom some ASD members said should be charged with Deceptive Trade Practices for suggesting ASD was illegal. The Florida case has been reassigned to different judges twice this year.

    Bowdoin claimed last year that Ponzi allegations brought by McCollum had been dropped, which triggered ASD members to race to forums to share the good news and caused McCollum’s office to issue a statement denying that Ponzi allegations even had been brought in Florida. The Florida prosecution was brought as a pyramid scheme.

    While it was awaiting a court ruling in October pertaining to the Ponzi allegations in federal court and the allegations that ASD had virtually no revenue other than fees paid by new members,  ASD suddenly announced it expected to receive a $200 million infusion from Praebius Communications, a penny-stock firm that publishes no financials.

    Members were skeptical and said they’d try to confirm the story through Praebius, and ASD quickly removed the announcement from its Breaking News website — but not until other members once again had raced to forums to share good news that turned out to be disappointing news.

    In the federal forfeiture case filed in August, Bowdoin ceded tens of millions of dollars to the federal government in mid-January, but signed a court document Feb. 25 saying he’d changed his mind and planned to continue to litigate as his own attorney.

    Reduced screen shot of Bowdoin's sworn certification in a pro se pleading. Feb. 25 was the recorded date of the signature. A day earlier -- on Feb. 24 -- reports circulated that the Secret Service had seized the banks accounts of some individual ASD members. On Feb. 26, AVG announced it was switching to an "association" structure.
    Reduced screen shot of Bowdoin's sworn certification in a pro se pleading. Feb. 25 was the recorded date of the signature. A day earlier — on Feb. 24 — reports circulated that the Secret Service had seized the banks accounts of some individual ASD members. On Feb. 26, AVG announced it was switching to an "association" structure.

    Bowdoin signed the document one day after reports surfaced that the U.S. Secret Service had seized other bank accounts in the ASD case. On Feb. 26, one day after Bowdoin signed the first of his pro se pleadings, AVG announced it had consulted with Pro Advocate Group and was switching to an “association” structure.

    Pro Advocate Group is associated with Karl Dahlstrom, who was convicted of securities fraud in the 1990s and sentenced to 78 months in federal prison. The “association” structure that emerged cited the U.S. Constitution as the document from which it derived its authority, but AVG said it was headquartered in Uruguay and its servers resolved to Panama.

    AVG used U.S.-based Google services for communications, even though it had its own server. The likely reason for that was to preserve an ability to communicate in case the company’s servers were shut down.

    ASD’s servers were shut down for spam and abuse last year. At least one domain associated with AVG — http://advglobal.com — has been shut down this year. A note in the domain data suggested the server was suspended for spam and abuse.

    Beyond that, there is confusion over precisely who owns eWalletPlus, the online payment processor associated with AVG. Bowdoin was said to have paid $75,000 for eWalletPlus in November — the same month a federal judge ruled ASD had not demonstrated it was a legal business and not a Ponzi scheme — but at least three other companies or individuals have claimed to own the firm.

    The situation is both a maze and amazing. A company known as Vana Blue Inc. that trades as a penny stock now has specifically disclaimed ownership of Karveck International — yet another name associated with AVG — and yet Vana Blue once boasted that it had acquired Karveck International, after earlier boasting it had acquired a company known as Karveck Corp.

    Vana Blue also claimed to own TMS Corp., which had claimed to own eWalletPlus. Meanwhile,  an entity known as TMS Association also claimed to own eWalletPlus. A third entity — TMS  Corp. USA LLC — also has become part of the AVG alphabet soup.

    Amid these bizarre circumstances, Andy Bowdoin’s support has collapsed — with the exception of a small universe of people eager to trot out a new conspiracy theory to deflect blame from the responsible parties.

  • BOMBSHELL: Drug Enforcement Administration Reportedly Has Photographic Evidence That Man Who Provided Debit Cards To AdSurfDaily And Other Surfs Accepted Cash To Launder Money Offshore In Narcotics Sting

    virtualmoneyUPDATED 10:56 P.M. EDT (U.S.A.) Autosurf participant? Fan of international “stored value” debit cards to offload your profits? You should have a lump in your throat about the size of, say, the Dominican Republic right now.

    The U.S. Drug Enforcement Administration (DEA) has audio and photographic evidence of Virtual Money Inc. President Robert Everett Hodgins accepting $100,000 and agreeing to launder drug money in the Dominican Republic for a fee of 10 percent of the amount, according to court documents cited by The Oklahoman (see link to story below).

    The transaction was part of a DEA sting last year known as “Operation Highwire.”

    Hodgins lives in Oklahoma, although his current whereabouts is unknown. Nolan Clay, the veteran, award-winning reporter who wrote the VM story, covered the Murrah Federal Building bombing in Oklahoma City that killed 168 people in 1995 and the execution of home-grown terrorist Timothy McVeigh in 2001.

    VM was indicted last year under seal for helping a Colombian drug operation launder money at ATM machines. There was little media coverage of the indictment. We learned about it only yesterday by fluke. Within a short while, it became evident that VM had a considerable presence in the autosurf trade.

    Connecting The VM Autosurf Dots

    Virtual Money Inc., known simply as VM, is the company that provided debit cards to AdSurfDaily Inc. Research shows that VM also provided cards to other HYIPs and autosurfs.

    As part of our research into a separate matter yesterday — and before we learned of the VM indictment — we viewed the source code from an ad for ASD that appeared in early 2007. We observed a link to the VM website in the source code, tried to follow it and eventually arrived at a message that explained VM no longer was operating. At the time, ASD also advertised that it accepted CEP Trust and e-Gold as payment methods. CEP later was implicated in its own Ponzi scheme, and e-Gold was indicted for money-laundering.

    Screen shot: snippet of source code from 2007 ad for ASD showing URL for Virtual Money Inc.
    Screen shot: snippet of source code from 2007 ad for ASD showing URL for Virtual Money Inc.

    The VM hyperlinks caught our interest, and we researched the matter further. Eventually we came upon Clay’s story about the alleged VM drug ties. The story did not mention autosurfs.

    We obtained copies of the indictments against VM, which were filed in April 2008 in Connecticut under seal, superseded in June 2008 under seal and then made public in late September, about seven weeks after the forfeiture complaint was served in the ASD case. The VM indictments in the Medellin drug case got very little media attention.

    One outlet that did pay attention was The Oklahoman, which published Clay’s story about the drug and money-laundering allegations. Clay reported that the government believed Hodgins had been laundering money for a “major Colombian drug operation” for years.

    VM, which offered “stored value” debit cards, was accused in the indictments of laundering money for a drug enterprise in Medellin. Yes, that Medellin, a Medellin that once was home base for drug lord and terrorist Pablo Escobar.

    Genesis

    In addition to providing cards for ASD, VM also provided debit cards to the failed Phoenix Surf Ponzi scheme and other surfs and HYIPs, according to web records. VM’s name is mentioned in Paragraph 22 of the August forfeiture complaint against ASD, and also in Government Exhibit 2  in the ASD case, which cites the PhoenixSurf Ponzi prosecution.

    What this means is that autosurf and HYIP participants were using the same debit card a Colombian cocaine enterprise allegedly was using. It also means that VM recognized the utility its card would have in the autosurf world and that the autosurf world embraced the card.

    These development became even more troubling today. Research suggests that Robert Hodgins or a VM designate participated in an ASD function about a month after ASD began its rollout in October 2006.

    “Virtual money owner was there and ASD will be the only accepted autosurf by them,” a forum poster wrote Nov. 15, 2006. The post was a bit fuzzy, but seemed to suggest Hodgins or a designate participated on a conference call or an ASD physical function in Orlando.

    It’s now clear from reading the Ponzi boards that VM — despite the poster’s claim that ASD would be its exclusive customer — had developed a significant presence in the surf/HYIP worlds in 2006.

    During that same year, according to the DEA court filings unsealed in September 2008 after a two-year investigation, VM cards were used in Medellin to withdraw at least $7.1 million in drug proceeds at ATMs between April 2006 and August 2006.

    If the allegations are true, it means that the company that provided the debit cards ASD used was in the business of laundering money for at least one international narco business before ASD even launched. Because the drug investigation overlapped into 2008 and featured the handover of money by an informant to Hodgins (see below), it means that VM continued to be in the business of laundering drug proceeds after ASD’s launch.

    Ten names appear in the federal indictment against VM and Hodgins, including the names of alleged drug brokers and importers in Medellin.

    What can’t be ruled out now is that narco businesses also were using autosurfs to launder money — perhaps without the knowledge of the autosurf operators — owing to the VM ties and use of the VM debit card.

    A drug enterprise or exporters/importers could pose as autosurf customers, for example, to “hide” illegal drug profits in the surf, only to extract the drug profits (plus additional surf profits) later by reclaiming the money via wire, or offloading it from debit cards.

    The Bombshell

    Among other things, Clay reported in The Oklahoman Oct. 19, 2008, that the DEA infiltrated VM through a confidential informant who befriended Hodgins.

    “The informant claimed an uncle needed drug proceeds transferred overseas,” the newspaper reported, citing government documents. “Hodgins agreed to conduct this and other transfers for a fee of 10 percent of the amount.”

    In March 2008, the informant “gave Hodgins $100,000 in undercover funds and asked that the ‘drug proceeds’ be moved to a Dominican Republic bank,” the newspaper reported, citing government documents. “Hodgins agreed, while the informant secretly recorded him and surveillance agents photographed them.”

    What this means, if the allegations are true, is that the DEA has audio and photographic evidence of the man who provided debit cards to ASD and other surf enterprises accepting money to participate in international drug transactions and international money-laundering.

    There are many “What ifs” here — for example, What if the international drug trade has latched onto the illegal surf business to launder proceeds from the international sale of narcotics? What if the person standing in front of you at an ASD rally was an international drug trafficker who was using ASD to increase profits and launder the drug proceeds?

    Kneejerk autosurf defenders naturally will dismiss such questions, but they are important — and the DEA might have evidence that shows a known figure in the debit-card business, a figure with obvious ties to the autosurf business, was willing to launder proceeds for a Medellin cocaine operation for a fee. The autosurfs could have aided in the laundering.

    Feel that lump yet?

    If not, you should consider that Pablo Escobar — now dead — was implicated in the assassination of a Colombian presidential candidate and an airline bombing that killed 110 people.

    We always have been struck by how quickly the U.S. Secret Service entered the ASD case. It is not clear if the Secret Service and the DEA have shared information, but it could not be more clear that international criminals are well aware of the utility of “stored value” debit cards.

    Such cards are becoming a fixture in the autosurf trade.

  • DEVELOPING STORY: Firm That Provided AdSurfDaily Debit Card Indicted; Feds Say Virtual Money Inc. Helped Colombian Drug Operation Launder Money In Medellin

    virtualmoneyUPDATED 9:49 A.M. EDT (U.S.A.) A Dallas-based company and its president were charged in a sealed indictment in April 2008 with helping a Colombian cocaine operation launder money by providing debit cards that were used to convert drug proceeds to cash in Medellin.

    The company — Virtual Money Inc. — once provided debit cards to AdSurfDaily Inc., a Florida company accused in August 2008 of  money-laundering, wire fraud and operating an autosurf  Ponzi scheme.

    Prosecutors brought a forfeiture complaint for tens of millions of dollars in the ASD money-laundering case. A grand jury in the Virtual Money case has authorized forfeiture complaints totaling $7.12 million.

    Prosecutors said that Virtual Money, known simply as VM, helped the Colombian drug operation offload at least $7.1 million in drug proceeds at automated teller machines in Medellin. Medellin once was home base of the infamous Medellin Cartel, operated by drug lord and terrorist Pablo Escobar. Escobar was killed by Colombia National Police in 1993.

    Escobar was implicated in the assassination of Colombian presidential candidate Luis Carlos Galán and the bombing of Avianca Flight 203 over Colombia, which killed 110 people.

    Autosurf promoters long have claimed that participation in illegal surf enterprises is harmless. The indictment against VM — and the allegations that it laundered money for a Colombian drug organization — demonstrates the dangers of participating in murky businesses in which participants have no way of knowing what is in the hearts and minds of other participants.

    It was not immediately clear how long ASD used the VM debit card, which was heavily promoted in early 2007 when ASD said it was having cash-flow problems.

    Two Colombian conspirators “directed their agents in the United States to provide proceeds of sales of controlled substances to agents of VIRTUAL MONEY, INC. to be sent to Colombia so the proceeds could be made available to the clients,” according to the indictment.

    VM “stored value cards were used by the members of the conspiracy to make available at a Daviviendo Bank ATM in Medellin, Colombia the peso equivalent of US $2,430,810.24 in April 2006; US $2,437,023.53 in June 2006; and US $2,257,761.45 in August 2006,” prosecutors charged.

    The VM indictment, which was brought in Connecticut after a two-year investigation by the Drug Enforcement Administration, was unsealed in September. It names 10 defendants, including VM President Robert Hodgins.

    Debit cards with “stored value” have become an increasingly popular way for autosurfs to collect and distribute money.

    In 2007, members of an ASD downline team hailed the VM debit card as one of the key advantages of ASD membership. The same downline team claimed that ASD provided “shelter” from the Federal Trade Commission and the Securities and Exchange Commission

    ASD downline group pitches VM card in 2007.
    ASD downline group pitches VM card in 2007.

    The card “[c]an be used in over 210 countries and territories and growing!” a sales pitch by the downline group said. “Funds conversion to local currencies at local ATMs.”

    VM’s website now directs either to a “Forbidden” error or a message that explains the company is not operational, depending on what URL visitors use.

    “We have a dedicated team working around the clock to ensure that the advanced and trusted service that all Virtual Money Card Holders have been use to over the past years, will be back and available as soon as possible as we are currently updating our facilities and servers,” VM said in the message.

    Australia has banned the sale of the VM card.