Despite fervent followers, 'AdSurf' Ponzi schemer Andy Bowdoin pleads guilty to wire fraud
Wake up and good morning. The struggling tiny town of Quincy in Florida's Panhandle probably still isn't sure what's up or down since Andy Bowdoin (above, in a sales video) and his AdSurf Daily multilevel marketing scheme hit the town five years ago and developed a quick cult following of get-rich-quick converts.
It didn't last. Bowdoin pleaded guilty to wire fraud last week after authorities say he duped thousands of investors and misled them about his background in running an Internet Ponzi scheme that raised more than $110 million. Bowdoin (pronounced Bowden), 77, faces a possible maximum sentence of six and a half years and fines up to $175,000.
This was a curious case. When the Tampa Bay Times began covering this financial scheme, Bowdoin had a strong following and unusually fervent support that what he was doing was both legitimate and enriching. The Times sent reporter Richard Danielson to Quincy in 2008 to look at the AdSurf Daily (known as ASD) phenomenon and Danielson talked extensively face to face with many people involved.
At first, Bowdoin's Internet advertising concept was met with applause. "It's the best thing that's happened to me since Grandma's apple pie," Foriest McNeil, then 47, told the Times after his $7.50 pay as a substitute teacher bounced to $12 an hour as an ASD customer service rep.
Then federal agents in August 2008 raided ASD offices and froze company accounts holding nearly $94 million. The company was accused of running a huge Ponzi scheme. Read Danielson's story here. One couple, Glen and Betty Yancey (right), said they and their four sons invested $454,000 in a Bowdoin business called Mobile International and lost it all. They sold a family farm to make that investment. (Photo: Richard Danielson, Tampa Bay Times.)
Prosecutors say Bowdoin pitched himself as a "money magnet" and held rallies to promote his business. But, authorities say most investors never saw big returns since the money taken in was used to pay earlier investors and cover Bowdoin's personal spending of more than $1 million on things like a boat, a lake house and luxury vehicles. Nor did Bowdoin disclose to investors that he had been convicted in the 1990s of three securities-related felonies in Alabama. Read more from this AP story.
According to government evidence, AdSurf operated on several online sites promising investors 125 percent paid into AdSurf as long as they viewed other members' websites for a few minutes each day on AdSurf's Internet page. Bowdoin's pyramid-style business model depended on increasing inflows of new money to fund the debt owned earlier investors, so most AdSurf members never received the promised returns, the Department of Justice said. Read more in this Wall Street Journal coverage.
Check out WCTV's video report on the scam and one investor, Gene Sutton, who nearly lost thousands of dollars.
-- Robert Trigaux, Business Columnist, Tampa Bay Times