Introduction
Ad Surf Daily is a convicted Ponzi scheme that ran in the US that started in 2006, and was shut down in 2008. It is also known as "ASD Cash Generator", "Golden Panda", and "La Fuente Dinero" ("Money Generator/ Spring" in Spanish) Its principal owner is Thomas Anderson Bowdoin Jr., a.k.a. "Andy Bowdoin". When it was shut down in 2008, government seized large amounts of assets belonging to ASD and Andy Bowdoin. Of those assets, $79 million have been forfeited by Federal Judge's order and returned to victims mostly by 2011. Some additional assets are still tied up in litigation.
Andy Bowdoin plead guilty to wire fraud in 2012.
Most of the following information will be summarized from the Federal Indictment documents.
The Beginning of Ad Surf Daily (ASD)
Andy Bowdoin was a member of 12DailyPro founded by Charis Johnson, which is the first "auto-surf" Ponzi scheme. It's called 12 daily as it promised 12% return for 12 days, if the members surfed other member's websites. It was shut down by the Securities and Exchange Commission (SEC) in February 2006. SEC determined that the old investors are paid by money from the new investors, making it a Ponzi scheme.
Roughly six months after the demise of 12DailyPro (late August / early September), And Bowdoin started up Ad Surf Daily (ASD). This is how ASD is advertised to work:
As a member, you buy "ad package" from ASD for $1 each, which makes YOUR website viewable to other members of ASD on their custom "rotator". You can get "rebate up to 150%" by viewing other member's website(s) for merely a few minutes per day. ASD takes 60% of that days "sales" and divides that among all the members who had viewed certain amount of ads, in proportion of the ad units they have purchased. Members are recommended to re-purchase ad units with any "rebates" they have received to earn more rebates in the future.
To buy the ad packages, you can mail a check, money order, or cashier's check to the ASD office, or make a deposit in Bank of America account and fax a copy of deposit slip to ASD.
Bowdoin will let you join even if you don't have any business or website to advertise. You can advertise two companies that you had nothing to do with.
Bowdoin was very careful in avoiding any terms that is related to investment. People who joined are "members", not investors. Money paid out are "rebates", not return or interest or dividend. You don't invest, you "purchase ad packages". In email addressed to members, and in a presentation in Las Vegas, he even stated that the authorities do not like those words, so they won't use them. Later, he put on a cap of 50000 dollars, claiming that his SEC lawyer told them to make SURE that you don't treat it as investment, they will limit the amount of money you put in.
In January 2007 Bowdoin paid a member to audit the firm, and the member told Bowdoin that ASD is a Ponzi scheme. There is no independent revenue other than member input, and even if Bowdoin had put in a disclaimer about "not an investment" and "no return guaranteed" it will be judged as an investment and thus get hit by the SEC. Bowdoin then allowed the member to take out all the money he and his family put in and a little more to keep his finding a secret.
ASD, slightly revised
In May 2007, Bowdoin changed the cap to only 125% for all the new members that join. Old members can keep the 150% promise. And the "60% sales" promise before was changed to "50% of gross revenue". However, there was no change in the fundamental model or any new sources of revenue.
In December 2007, ASD hired an Internet marketing firm, USHBB, and made a series of videos promoting ASD, which started to appear on Youtube in March 2008, where Bowdoin and members told everybody that a lawyer (later identified as Robert Garner) had vetted the firm, it's not a Ponzi, but a safe and profitable opportunity. The lawyer then appeared on the video proclaiming the same thing.
Bowdoin also started various "rallies" (actually seminars held at hotels across the country, actually recruitment drives) where he repeated the sales pitch, along with some of the earliest members, telling everybody how much money they made and they should join. They even offered a 50% bonus for any one who put in their money right there at the rally.
Bowdoin also heavily donated to the Republican party and have received "Congressional Medal of Distinction", which is a donation award for contribution to the National Republican Congressional Committee in 2008. However, he had told (or implied) members that it was awarded by the President of the United States for outstanding business acumen. This is but one of dozens of fraudulent representation he committed, some with help, others by himself.
Some members had suspected something is wrong and unless they get their money they will go to the authorities. One member later recounted to authorities that Bowdoin pled with the member, claiming that if the authorities come in "a lot of good people will be hurt".
Bowdoin have hired famous MLM attorney Gerald Nehra to conduct a compliance review on itself. This famous lawyer pronounced the firm to be clean and not a Ponzi.
End of ASD
US Attorney's Office was apparently well aware of Andy Bowdoin's activities, and at least two agents joined Ad Surf Daily as members to gather evidence. As a result, enough evidence was gathered, and authorities moved in on the ASD office in August 2008 after obtaining a judge's seizure order. IRS, Secret Service, US Marshall's Service, local police, and more moved in and froze all of ASD's assets, and carted off boxes after boxes of documents. Over 50 million was in ASD's bank accounts at the time. Additional assets were seized later.
Bowdoin was charged with wire fraud, securities fraud, conspiracy to defraud, and selling unregistered securities. An grand jury found there is enough for the trial to proceed in 2009 where Gerald Nehra, who had claimed ASD was not a Ponzi was called as an expert witness. Judge eventually discarded the testimony as it was contradicted by the data provided by company's own lawyer. Another noted MLM personality that contribued his own opinion that ASD was not a Ponzi was Keith Laggos.
Bowdoin refused to back down, and soon emerged as a spokesperson for another suspect Ponzi called OneX, where he claimed he is going to make lots of money to help with his defense of ASD. OneX was later named by US prosecutors as another suspect scheme.
The over 50 million of the seized funds were returned to identified owners in 2010 and 2011 through the Federal forfeiture program.
In 2011 both sides filed motions as per standard legal procedures.
In April 2012, US Attorney introduced additional evidence to the court, detailing Bowdoin's involvement on suspect schemes since the end of ASD.
In May 2012, not long before his trial is scheduled to go on, Bowdoin plead guilty to wire fraud, and is currently awaiting final sentencing while staying in jail.
Aftermath
Bowdoin was later found to be part owner in an ASD clone called Ad View Global, which also ended quickly after death of ASD.
ASD members Schweitzer and Disner (one is a former lawyer, disbarred) filed lawsuit alleging government wrongful prosecution of ASD. Their lawsuit was dismissed by Federal court in June 2012.
Many of the ASD members migrated to other suspect schemes. Schweitzer, Disner, and many others ended up in ZeekRewards. Some ended up in OneX like Bowdoin himself.
ASD and its own inspiration, 12DailyPro, inspired tons of clones with similar names, like 7DailyMoney, and may be inspiration for a scheme in Brazil called MisterColibri.
What were ASD's warning signs?
ASD's primary problem is it cannot document ANY external revenue. From the way the business was explained, members are paying each other. So how can there be a profit, much less 60% to be shared, AND the members are making MORE than they put in? Money does not magically multiply.
Andy Bowdoin himself also perpetrated much of the fraud, in portraying this investment (it passes the Howey Test) as NOT an investment. Furthermore, Bowdoin is fond of displaying that "Medal of Distinction" which is a donation medal, and claimed he worked with Napoleon Hill and Dale Carnegie, when in fact he sold courses and books based on those two authors. So he's basically padding his resume with bogus entries.
ASD is a classic Ponzi scheme, in that people who take their money out are paid by other members, so someone must be losing money, even though they think they are winning. It relies on the same factors: secrecy, facade as disguise, and way too reliable returns on investments. It disguised the entire operation as internet ad network, does not explain how the money moves (the story they tell is the disguise itself), and it always paid 1% on weekdays and 0.5% on weekends, every day, without fail.
ASD is interesting in that it essentially admits that it is a Ponzi, but insist it's NOT an investment but a business. How does merely WATCHING ads create money? Yet as long as the members get paid (with someone else's money) they don't care. It also paid compliance teams to go over it, and declare it clean, only to get raided soon after by the Federal government.
Does ASD reminds you of any current scams?
Based on the above report, it sure looks like Paul Burkes will be behind bars soon. Tell me I am way off base! Anyone?
ReplyDeleteYou have not named any of the main players, the top sponsors who got so many of their friends involved in this scam by telling them over and over it was a legitimate business.
ReplyDeleteWhy are these people being protected and will they also have to do some clawbacks?
Because they are not listed in the government documents and were not indicted along with Bowdoin.
DeleteI know plenty of them are serial MLMers / Ponzi-ers. Names like Napier, Gilmond, Disner, etc. just move from one scheme to another. But they were not indicted. I already identified a bunch in my ZeekRewards investigation.
One of these days I'll write a Zeek vs. ASD, compare and contrast article.
Two words: Banners Broker
ReplyDeleteYea..on BannersBroker...looks the same
ReplyDeleteUpdate: US Attorney's office is considering a second round of remissions (i.e. return money of victims) as there's assets left over. If you have been cheated by Andy Bowdoin, stay tuned.
ReplyDeleteThe only reason there's money left over is because everyone got their money back you... in a Ponzi scheme there's supposed to be losers. How can it be a ponzi when all debts are paid, the prosecutors have lived off it and there's money left there still?
DeleteBecause some people are too embarrassed to file a claim for their rightful share, of course.
DeleteThe US$ appears to be a ponzi scheme to my mind. They just keep printing more and more to dilute the value of debt already issued.
ReplyDeleteThey're the government. They stand behind their money... Our money. And it's not really relevant regarding Ad Surf Daily. You don't put money into the government hoping to get more out later.
DeleteIncidently I have no vested interest in the case in the event you are wondering. I do agree that the other programs you mentioned were ponzi/scams, however I feel ASD was not.
DeleteAnd what makes you think ASD was not a Ponzi, since it really did simply took Peter's money to pay Paul, with no proven external sources of revenue to pay the "profits"?
DeleteI beg to differ darling... I put in 49 years hard labour paying taxes into the government (approximately 36% of my lifes earnings), on the promise I would be supported in my retirement.
ReplyDeleteWhen I was 16 that 36% amounted to $1.60 a week, when I retired at 65 it amounted to a hell of a lot more. I now receive an age pension of $1,850 a month, $1,105 of which goes to pay my accommadation alone. With electricty, gas, telepone and internet amounting to another $400 I'm expected to run my car and feed myself on $450 a month. Fat chance that with me paying $1.60 a litre for fuel (about $6 a US gallon).
The government DOES NOT stand by their money, they purposefully and diligently debase it in an effort to evade paying their debts.
The US$ IS A PONZI scheme, and we are the victims.
You do have freedom of movement. Plenty of Americans have moved out and became ex-pats after renouncing their citizenship.
DeleteBut you don't get Social Security if you do that. On the other hand, since you're using Litres... Sounds like you're north of the border?
Quick correction: 12dailypro was not the first online autosurf Ponzi scheme. That honor belongs to StudioTraffic which collapsed under its own inability to pay (and due to the Stormpay freezing) not long before 12dailypro's demise.
ReplyDeleteThanks for the correction.
Delete