DECEMBER 1, 2010, 7:10 P.M. ET
Florida Man Indicted For Fraud Linked To Online Ad Company
A Florida man was indicted on fraud charges linked to his online advertising company, which U.S. attorneys claim was actually a Ponzi scheme that garnered more than $110 million in investments.
Thomas A. Bowdoin Jr., also known as Andy Bowdoin, founded AdSurf Daily Inc. and operated it for about two years starting in September 2006 on such sites as adsurfdaily.com
The indictment alleges that Bowdoin referred to his investors as members, their investments as ad packages and their returns as rebates to avoid regulatory scrutiny. He promised to pay a high return--ranging from 125% to 150%--on each dollar invested if members agreed to view a couple of websites for a few minutes each day, and he also pledged commissions for referrals to other to join the scheme. The business drew a large number of investors across the U.S. and in other countries.
The Justice Department claims Bowdoin used more than $31 million to make payments to early members, more than $8 million to operate the company and promote it to subsequent members and more than $1 million for his own personal benefit or the benefit of his family. Of the $31 million he paid to early investors, 98% of it came from other investors' funds.
The indictment consisted of five counts of wire fraud, one count of securities fraud and another count for unlawful sale of unregistered securities.
The charges could result in a maximum sentence of 125 years in prison and fines worth up to $6.2 million.