Sophisticated Ponzi Scheme Case Study
The Ad Surf Daily / ASD Cash Generator
Ponzi Scheme, CEO Andy Bowdoin
One of the most popular groups of Sophisticated Ponzi Schemes that has rapidly grown in the past few years is known as the "Autosurf."
What exactly is an Autosurf?
For example... let's say you have a friend who introduces you to an internet program that claims to specialize in website advertising. Let's also suppose that the company claims to offer you a 20 - 40% ROI (return on investment) in 30 days in the form of gradual "rebates." All you have to do to take advantage of this opportunity is purchase "advertising packages" and then "surf" (or view) about 10 - 20 website each day to qualify for the daily rebates.
Sound attractive? Of course it does! If you only earned 20% of your initial investment (often referred to as "rebates" instead of "principle" in autosurfs) each month, you could turn $1,000 into nearly $9,000 in just 1 year (12 month period), assuming that you continue to "compound," i.e. re-purchase advertising packages each month.
This model was used by Thomas Anderson Bowdoin, aka "Andy" Bowdoin, CEO of Ad Cash Daily / Ad Surf Daily (ASD) / Ad Cash Generator, a sophisticated ponzi scheme investigated by the State of Florida and ultimately shut down by the United States Attorney General, U.S. District Court for the District of Columbia.
The ASD Mechanics and Operations
Andy Bowdoin's ASD / Ad Cash Generator offered it's participants up to 25% ROI in 1 month for all "advertising packages" purchased. This abnormally high return was gradually paid out 0.5 - 2% a day until 25% ROI was achieved, requiring its members to surf through 24 websites for 15 second intervals each day. "Rebates" were accumulated by taking a portion of the company's total daily advertising package "sales."
ASD also offered incredible commissions and temporary upgrade bonuses to it's members and recruiters. New advertising package upgrades would qualify the purchaser's "sponsor" for a 25% commission, also taken directly from the company's advertising package cashflow.
During some special events in which Bowdoin and associates would fill seminar halls and arenas, ASD offered new members immediate 100% matching bonuses on all advertising packages; furthermore, the new member's sponsor would also receive 100% matching commission into his ASD account! In other words, a value of $100 was instantly credited as $300 on paper / in the company's information system. (Sound familiar to any other popular "schemes"... particularly those that took a nasty dive at the beginning of the 21st century?)
Why is the ASD Model illegal?
The ASD "rebate" system paid former "advertising package" purchasers strictly from the sales of new advertising packages. The company did nothing to create legitimate, extra revenue that could be used to pay "rebates" producing a positive ROI to it's "advertisers." With this model, the promise of 125% of member's "purchases" could not be returned by the company unless other members also purchased "advertising packages."
Keep in mind- selling advertising in the form of website views and rotations is perfectly legal. However, once the company sells an "advertising package" promising a 25% ROI to an ASD member and then turns around and pays this member from the sale of multiple "advertising packages" from other people under the same "25% ROI promise," the program has officially turned into an illegal ponzi scheme model. This is because #1) no additional revenue is created to pay the initial ASD member, and #2) successful payment of 25% ROI to the new "purchasers" will demand even more purchases from additional members.
Also- Remember those commissions for referral "purchases" and the ridiculous matching bonuses? Since "new purchases" was ASD's only source of substantial revenue, ever dollar paid out in the form of commissions and other rewards also came from the "advertising package" money pool.
Don't let ASD's terminology game fool you! The terms "advertising packages" (investments) and "rebates" (returns) are essentially erroneous within an Autosurf complex, and they involve a mirror image of a standard ponzi scheme structure used in false investment opportunties.
As with all ponzi schemes, ASD's system was not permanently capable of withstanding the test of time. If the government had not intervened, eventually the ASD membership levels would have grown too large and the monthly, exponential growth would have died down. If that had occurred, the company would not have had enough money to resume paying the promised "rebates." Although many members may have made a profit, the majority would have been left with a significant loss.
The Truth about Autosurf (ASD's) "Advertising"
As with all Autosurf programs, ASD's "advertising services" through the sale of "advertising packages" was most likely just an effort to mask the company's "rob Peter to pay Paul" model. Although several protesters following the demise of ASD self-righteously claimed they were "in it for the advertising," ASD's cost per rotation (through "advertising packages") was priced extremely high for randomized, untargeted traffic. The equivalent quality of website exposure can be obtained through a variety of free services called "traffic exchange." Why would people pay top-dollar for poor quality traffic, unless the 25% ROI was more important?
Furthermore, many prospects without websites or internet materials were originally led to join ASD. Several ASD members in late 2008 admitted that they noticed a variety of crude, pointless websites and free internet spaces (such as individual blogs and social pages) which demonstrated that many members were not interested in purposeful advertising; rather, they were looking for anything they could find to display in the ASD rotator. If ASD was truly "all about the advertising" and not the promise of 25% ROI, why were the rotators flooded with personal webpages and Myspace profiles?
The Bottom line - whether all ASD participants are willing to accept it or not- without the 25% ROI opportunity, ASD's temporary "success" would never have existed. Whether Andy Bowdoin used the bogus Autosurf "advertising" concept to intentionally accumulate "get-rich-quick" returns for himself (and his partners) at the expense of future members is debatable. However, the true nature of his sophisticated ponzi scheme and it's future inability to sustain itself is not.
Therefore, since the vast majority (if not ALL) members upgraded in ASD for the sole purpose of earning profit through rebates and the "rebate" payout model itself involved a ponzi scheme structure, eventually ASD would have been unable to continue it's promised payouts and many ASD members would have felt deceived, cheated, and robbed. This is why the U.S. Government shut ASD down in August of 2008. The sooner a ponzi scheme is shut down, the less people that eventually suffer a loss.
What can YOU learn from this example?
- Autosurfs are bad news - They may come in different shapes and forms, but all of them are composed of some form of sophisticated ponzi scheme model. Every single Autosurf program previously in existence has either dissolved and run off with people's money or been shut down by the U.S. Government.
- Look out for tricky terminology - Just because an internet program does not include the traditional terms "investments" or "returns" in its business model description does not necessarily mean it is incapable of fitting an illegal ponzi scheme mold.
- "If it sounds too good to be true..." - "Then it probably is." Make sure either you or someone qualified completes the necessary due diligence before you even think about involving yourself with a program offering high returns. It is ultimately YOUR responsibility to make sure you spend / invest your money wisely.
Links and Resources
- ASD Court Documents - http://tallahassee.com/assets/pdf/CD11468785.PDF
- ASD's "Second Birth," AVG / Ad View Global, Dissolves -
http://ponzischemealert.com/blog/avg-ad-view-global-scam-crumbles...
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