Florida Drops State-Level Pyramid Case Against AdSurfDaily; Says It Has Supplied Victims’ List To Claims Administrator For Restitution From Assets Seized By Secret Service In Federal Case
UPDATED 7:40 P.M. EDT (U.S.A.) Certain members of Florida-based AdSurfDaily began crowing last week that the office of Florida Attorney General Bill McCollum had dropped the pyramid-scheme case it had filed against ASD in August 2008.
“The State of Florida has dropped all charges against Ad Surf Daily, Inc. This is wonderful news!” an email received by some ASD members exclaimed.
Florida prosecutors, however, tell a different story.
Although McCollum’s office confirmed today that the pyramid case has been dropped “without prejudice” — meaning it can be refiled — it noted that state investigators have forwarded a list of Florida victims of ASD to a federal claims administrator “for processing and reimbursement purposes.”
Florida initially had sought restitution for victims, along with the dismantling of ASD. ASD essentially dismantled itself in September 2009 by not filing required forms with the state, which revoked its corporate registration. Less than four months later, in January 2010, the federal government was awarded title to more than $65.8 million seized in the case. The government earlier had been awarded title to more than $14 million. In March 2010, the government was awarded title to more than $600,000 that had been seized in a separate forfeiture action filed against ASD connected assets in December 2008.
All in all, the federal government was awarded title to more than $80 million seized in the ASD case, gaining a clean sweep in the forfeiture proceedings.
The U.S. Secret Service raided ASD on Aug. 5, 2008.Â Florida followed up with a lawsuit of its own a day later, but federal prosecutors later said they intended to form a restitution pool from seized assets. That process now has begun, although ASD President Andy Bowdoin is appealing the January 2010 forfeiture order entered by U.S. District Judge Rosemary Collyer.
In its paperwork to dismiss the pyramid case, McCollum’s office pointed to Collyer’s forfeiture order, saying ASD victims from Florida and elsewhere had been provided an opportunity for restitution by the federal government.
On Sept. 28, 2009 â€” three days after Florida revoked ASDâ€™s corporate registration and dissolved the registration of a shell company known as Bowdoin/Harris Enterprises â€” federal prosecutors filed a U.S. Secret Service transcript of a conference call ASD had recorded Sept. 21.
In the call, Bowdoin told members that the government had seized their money. In his court filings, however, Bowdoin claimed the money was his.
Federal prosecutors said the recording was evidence that Bowdoin could not keep his stories straight, arguing that he had told members one story and a federal judge another. Collyer issued the forfeiture order for more than $65.8 million less than four months later.
Although an email some ASD members received in recent days claimed that “It looks like things are moving in the right direction” with the Florida dismissal, the email urged members to “only share this with those whom you trust.
“Do not post on forums or blogs,” the email urged.
Federal prosecutors noted last month that the U.S. Court of Appeals for the District of Columbia Circuit had dismissed one of two appeals Bowdoin had filed in the forfeiture cases, noting his second appeal was pending before the same court.
The court should reject that appeal as well, prosecutors argued.
With the federal procedure for restitution established, ASD victims now have a remedy for reimbursement, McCollum’s office advised a state judge.
In late 2008, Bowdoin told ASD members that Florida had dropped “Ponzi scheme” allegations against the firm. McCollum’s office immediately countered with a statement that it never even had accused ASD of operating a Ponzi scheme, noting that it had alleged a pyramid scheme only.
When Bowdoin made the 2008 claim, some ASD members raced to forums and websites to spread the news, which turned out not to be true. He later tried to sell members a VOIP telephone service, explaining the price he offered was a gift to his loyal supporters.
Even as Bowdoin was telling members in September 2009 that he had big plans for ASD, he did not explain why he had permitted its corporate registration to lapse or explain that the state had revoked the registration.
Instead, Bowdoin told members that the government had seized their money — a claim in opposition to his own court filings that advised a federal judge the seized money belonged to him.