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Column: Scams worthy of gold medals

And the Olympic gold medals in conniving schemes best able to take your money goes to …

Scamsters based in Quincy and Miami. From a small North Florida town comes a major Internet-driven Ponzi scheme. And from a South Florida metropolis, a giant hacker attack on credit cards.

Sorry, Beijing. You've got the creme de la creme in athletes for now, but Florida's apparently home to today's best big-buck ripoff artists.

At least our state is doing its part for the economy: keeping the feds fully employed.

Why do we care? Because these scams are whoppers.

Quincy's case raises questions about the extraordinary pace at which a word-of-mouth Internet scheme — fueled all the more by online video testimonials — can spread.

And in Miami's case, it suggests major retailers may be woefully underprepared to defend customer data against more sophisticated hackers.

The Quincy scam, allegedly orchestrated by one Thomas A. "Andy" Bowdoin Jr., is still running low under the radar of major media, even though the feds say the amount of money filched is near $100-million while the people defrauded may approach 100,000.

In the past week or so, federal investigators seized a home in Quincy, a second home in South Carolina and froze close to $53-million in accounts at Bank of America. The feds say the property is tied to the Internet wire fraud scheme that Bowdoin and others allegedly operated out of a ex-flower shop in Quincy near Tallahassee.

Many scam victims are Floridians who invested after hearing pitches made at big conventions held in Tampa and Miami.

The federal complaint says Bowdoin, through a company called AdSurfDaily (ASD), operated a Ponzi scheme posing as an advertising company.

Here's how the feds say it worked. ASD operated an online advertising program that claimed to generate revenue by automatically rotating advertised Web sites into investors' Internet browsers on their computers. To wow investors, ASD agreed to pay a return of between $1.25 to $1.50 from every dollar handed over to ASD, as long as investors agreed to view a couple of Web sites for a few minutes each day.

The federal complaint says ASD did not really operate as a seller of ad services and there was no legitimate product being sold to support the profits ASD promised to pay. In other words, the feds say ASD paid off early investors with the money of new investors. That's what makes it a Ponzi scheme.

The Miami scam operated on an even grander scale.

The feds cracked a major case involving the theft and sale of more than 41-million credit and debit card numbers kept by such retailers as TJX Cos., BJ's Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW.

Chances are good thousands of plastic-carrying Times readers were affected, even if funds were not (yet) lost. Watch your credit card statements!

Eleven people were charged, including three Miami residents and others from Estonia, Ukraine, Belarus and China.

A grand jury indictment charged Albert Gonzalez with computer fraud, wire fraud, access device fraud, aggravated identity theft and conspiracy while operating out of a South Beach hotel. Gonzalez operated under aliases ranging from "Cumbajohny" to "Soupnazi."

"So far as we know, this is the single largest and most complex identity theft case ever charged in this country," said U.S. Attorney General Michael Mukasey.

For such epic misdeeds and for shame, gold medals all around.

Information from Times wires was used in this column. Robert Trigaux can be reached at trigaux@sptimes.com.

Column: Scams worthy of gold medals 08/09/08 [Last modified: Friday, August 15, 2008 3:07pm]
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