Wednesday, August 26, 2009
Judge grants Ad Surf Daily & Federal Prosecutors more time to negotiate 'ponzi' case
US District Judge Rosemary Collyer granted 'Ad Surf Daily's' president, Andy Bowdoin, more time to continue negotiations in the federal case against him. Last week Bowdoin's attorney said he needed an extension based on the fact that negotiations were still taking place and "more time is needed to come to a solution."
Last year Federal officials seized millions of dollars in ASD funds after determining the company was a ponzi scheme. Several months after the seizure prosecutors say Bowdoin voluntarily 'walked away' from the money when he reviewed the federal charges against him. Soon after, Bowdoin changed his mind and decided to fight for the money. He and his attorney must now convince Judge Collyer why he, and ASD, should be allowed to stay 'in the case'.
Judge Collyer ordered Bowdoin to "show Cause no later than September 14, 2009," her previous deadline was August 28th.
Bowdoin's business model for ASD required its ‘members’ to purchase 'ad packs' in order to participate in the program. Members then received a profit each time they clicked on websites of businesses that advertised with ASD. The US Attorney General’s Office contends the company was a ‘ponzi’ because it could only generate revenue by having new members pay to participate in the program.
The government's confiscation of the funds netted $53M (fifty three million dollars) which Bowdoin had deposited in several Bank of America accounts. He claims the accounts were designated to maintain ASD revenue and, subsequently, Bank of America has also been named as a defendant in the federal case against Bowdoin and ASD.
Last week Bowdoin and his attorney, Charles A. Murray, spoke for several hours as they mapped out their next move. Since the seizure, Bowdoin has maintained he would find a way to "give the money back to the people." ASD is estimated to have had upwards of 125,000 members nationwide.
Officials with the United States Department of Justice are hoping Bowdoin will release his claim on the assets and allow the government to assume ownership of the funds. Officials contend the government could then distribute the money to ASD members using carefully controlled methods.
US Justice officials have posted an online form for ASD members who wish to recoup any money they lost while doing business with ASD. Members can fill out the form by going to the government's website:
or contact the DOJ by emailing information to the Department at 'email@example.com'.
US Department of Justice Senior Trial Attorney William R. Cowden says the government is now ready to begin distribution of $14M it seized from Golden Panda (GP), another similar company they say was controlled by Bowdoin. In late July, 2009 the US Attorney General’s office completed its investigation into GP and officials say they were able to convince Bowdoin to release GP’s assets to the government. Cowden maintains Bowdoin voluntarily ‘walked away’ from his claim on the money after reviewing the Government’s evidence against him. Cowden asserts Bowdoin was never offered any deals in exchange for his cooperation and is still subject to criminal charges.
Some ASD members question the government's motives and refuse to post a claim on funds they have lost. They fear potential legal implications if they disclose their involvement with the embattled company. Many still remain hopeful charges will be dropped against Bowdoin so ASD can get back in business. Cowden says it has been difficult for ASD's members to face the facts, "Every time there's one of these cases the victims and people are disappointed to find out it's a fraud."