International Law

AD Surf Daily Scam Exposed - Reprieve of 12 Daily Pro

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Catherine Holahan, writes at Businessweek, about AD Surf Daily: 

"Sonny Pham, 50, may have dismissed Ad Surf Daily (ASD) as just another online get-rich-quick scheme--if he hadn't seen the Web videos. YouTube had dozens. Some featured company founder, 74-year-old Thomas "Andy" Bowdoin, describing in a folksy twang how his "business opportunity" had helped thousands generate "excellent" profits.

...

On Aug. 5, federal investigators raided ASD's Quincy (Fla.) office and the Bowdoin home, and filed a civil complaint against the company.

The U.S. Attorney's office in Washington, D.C., alleges in the suit that ASD defrauded more than 100,000 people with promises of online riches.

Prosecutors, who seized more than $53 million in ASD assets from Bank of America (BAC), had been alerted to the alleged scam by numerous complaints, including many from children whose parents had been enticed by ASD's online promotional material.

"They called it an advertising company," says William Cowden, chief of the asset forfeiture unit for the District of Columbia U.S. Attorney. "Ad Surf Daily was a Ponzi [scheme]."

I have long thought that these ponzi schemes which are international in scope are probably money laundering schemes - they aren't intended to make the promoter money.

Since they operate over the internet, using money transmitters like E-Gold, who just recently pleaded to guilty to money laundering, these ponzi schemes allow someone to "invest" $2,000 in dirty money in Country A, having a confederate withdraw it in Country B, having it cleaned through a money transmittal like E-Gold.

The receiver in the 12 Daily Pro case puzzled over the fact that several hundreds of millions of dollars were apparently invested in the scheme by Indonesians.

As far as I could tell the FBI never investigated the money laundering angle.

Full post as published by Misleading Advertising Law on August 08, 2008 (boomark / email).