Advertising company Ad Surf Daily has filed a motion to re-open its door after being shut down by the Feds. But the U-S Attorney's office will now have extra time to respond to that request.
Attorneys for ASD asked the U-S Attorney to respond by Thursday.
But the court has given the U-S Attorney's Office until Monday to give an official response.
In the motion filed by A-S-D's attorneys, they say if the company isn't allowed to begin operating again, the company will soon collapse completely. ASD was raided by the Feds about two weeks ago. They say the company was operating a money-making scheme.
A Quincy Internet company raided by the Feds is now going to court to try to get back to business. Ad Surf Daily says it should be able to operate under court supervision until lawsuits filed by the US Attorney and Florida's Attorney General are resolved.
On Wednesday, about a half a dozen people were going in and out of ASD's main office in Quincy. They say they were moving files, and while they're busy doing that, ASD's lawyers are playing the waiting game.
Feds raided ASD about two weeks ago. The Secret Service has now seized $93.5 million and shut down the business.
ASD's attorneys have filed a motion saying ASD needs emergency relief. Without it, they say the company will soon collapse completely.
Tim Jansen has prosecuted and represented companies that were accused of being ponzi schemes. He says civil cases like the ones filed against ASD can take up to two years to resolve. He says when a company isn't allowed to continue operating, there's practically a presumption of guilt.
"Right now the way this has happened, they have already been found guilty of operating a ponzi scheme, and all their assets have been taken away," says Jansen.
Florida's Attorney General Bill McCollum says he wouldn't feel comfortable with the ASD operating again even with court oversight.
He says the company used advertising as a front for its money making scheme.
"At the end of the day that's the only way they could ever sustain themselves is by getting new members and that's an illegal pyramid scheme. And it's not right for them to go back and do it again. It just doesn't work that way," says McCollum.
"The court will have to look at a business and say if I don't grant you a remedy, business, you're out of business. And they may not have money to hire the lawyers to fight the litigation. So really it's a tough position for the business owners. It appears to me the motion is well founded," adds Jansen.
ASD's lawyers filed the motion on Monday and the U-S Attorney will have until Thursday to respond to this complaint. After that it's likely the judge will set a date for a hearing.
Attorney General Bill McCollum says anyone who's put money into ASD should log onto their website www.myfloridalegal.com and file a complaint. He says after the situation is resolved, people may be able to get some of their money back, provided the company is found guilty of operating an illegal scheme.
This is a press release issued by the Secret Service:
SECRET SERVICE INVESTGATION RESULTS IN $93.5 MILLION SEIZURE
Multi-Level Marketing Scheme Targeted
(Washington, D.C.) - Nearly two weeks after the Department of Justice
announced the seizure of approximately $53 million from a Florida
business involved in an online scheme, the U.S. Secret Service has
identified and frozen additional funds, raising the total of assets
seized to more than $93.5 million.
On August 5, 2008, agents from the Secret Service Orlando and
Tallahassee Field Offices executed a series of federal search and
seizure warrants on business locations, residences, and bank accounts linked to AdSurfDaily, Inc (ASD). The search and seizure follows an investigation initiated in July 2008 that revealed ASD was engaging in questionable business practices that operated on a pyramid or Ponzi scheme principle.
"Cooperation among investigators, including the private sector partners
who brought this case to our attention, allows us to combine not only
our resources, but also our expertise in order to more effectively
address evolving criminal methods, such as these online schemes," Secret Service Assistant Director of Investigations Michael Merritt commented.
Ponzi schemes promote allegedly lucrative business opportunities, when in reality there is in fact no underlying profitable business to support the payments promoters say they will make to the investors/participants.
The Internet is increasingly used as a vehicle to promote each of these
types of frauds and while Ponzi schemes have evolved with technology, the basic premise remains the same: later investors' funds are used to pay the earlier investors.
The version of the Ponzi scheme Secret Service investigators uncovered in the ADS investigation is referred to as an "auto-surf" program, a form of online advertising that claims to generate revenue from so-called "advertisers" who pay fees to have their websites displayed to
other viewers through the "host's" web-based operation. As part of the
program and to encourage more advertisers to pay the membership fee, the
host pays the advertisers a so-called rebate for viewing fellow
advertisers' web pages, while encouraging the recruitment of new
advertisers by paying a referral fee. In this Ponzi model, the host
generates most, if not all, of its funding from membership fees, and
therefore must use money received from later advertisers to pay rebates
and referral fees to earlier advertisers. These programs collapse when
new membership fees fail to cover the payouts promised to existing
On August 5, 2008, U.S. Attorney Jeffrey A. Taylor and Secret Service
Orlando Field Office Special Agent in Charge John Mrha announced a civil
forfeiture Complaint was filed in the U.S. District Court for the
District of Columbia against two homes located in Florida and South
Carolina, as well as the initial $53 million in funds. On August 6,
2008, the Florida Attorney General filed a lawsuit against ADS and its
president, Thomas A. "Andy" Bowdoin Jr., seeking civil damages and an
injunction against the company to prohibit them from engaging in future
deceptive marketing schemes. The Secret Service is currently
coordinating with the Department of Justice to identify victims that may
be entitled to a portion of the seized proceeds.
The United States Secret Service was originally founded in 1865 for the
purpose of suppressing the counterfeiting of U. S. currency. Over the
years it has grown into one of the premier law enforcement organizations charged with investigating financial crimes. The Secret Service has taken a lead role in the developing area of cyber crime, establishing working partnerships in both the law enforcement and business communities to address such issues as protection of critical
infrastructure, Internet intrusions and associated fraud.