A Florida man pled guilty to operating an internet-based Ponzi scheme that took in $110 million from thousands of unsuspecting victims. Thomas A. Bowdoin, 77, of Quincy, Florida, entered a guilty plea to a single charge of wire fraud before a federal judge in Washington, D.C. He had faced a much stiffer possible sentence after being indicted in December 2010 on five counts of wire fraud, one count of securities fraud, and one count of unlawful sale of unregistered securities. While the charge carries a prison sentence of up to twenty years, Bowdoin will only face a maximum term of seventy-eight months under the terms of his plea agreement, as well as fines up to $175,000.
From September 2006 to August 2008, Bowdoin owned and operated AdSurf Daily Inc. ("AdSurf"), which held itself out as an online advertising company. Lauding himself as a "money magnet", Bowdoin stated that it was his goal to make "100,000 millionaires in three years". Through his scheme, Bowdoin promised investors a return of 125 percent on every dollar paid into AdSurf, with the onyl requirements being that each investors had to view other members' websites for several minutes each day. Investors were also paid commissions for recruiting new members to the scheme. Bowdoin held several rallies across the country in 2008 where he recruited potential members on the benefits of AdSurf. The audience was told that Bowdoin could be trusted because George W. Bush had personally given Bowdoin a medal of distinction, and a criminal background check revealed only a single speeding ticket. Overall, Bowdoin raised approximately $110 million from over 96,000 members.
However, Bowdoin's operation, like his background, was a lie. Bowdoin admitted that AdSurf was nothing more than a gigantic pyramid scheme, and approximately $45 million was paid out to members to service their investment and give the scheme an air of legitimacy. Bowdoin also spent $8 million to promote AdSurf, and over $1 million was used to sustain a lavish lifestyle that included the purchase of a Florida lake house, a boat, vehicles, and other items. Additionally, Bowdoin failed to disclose to investors that he had been convicted of three securities-related felonies in Alabama in the 1990s and had also been charged in at least thirteen other indictments in Alabama alleging securities fraud. As a result, Bowdoin had been was barred from selling securities in Alabama. And the "medal of distinction" allegedly personally bestowed by George W. Bush was also a lie, with the medal's true origin the result of donating $25,000 of investor funds to the National Republican Congressional Committee.
Ponzitracker previously covered the announcement by the U.S. Department of Justice that it had begun to distribute funds seized after the fraud to victims. These funds totaled nearly $80 million and came from several bank accounts used in the scheme. A total of approximately $55 million was distributed to roughly 8,400 victims through several distributions. According to the website established by the DOJ for victims here, the final distribution was made in March, and the recent termination of an email and phone contacts suggest that the remission process is complete.
Bowdoin is currently free on bail. A hearing is scheduled for June 12, 2012 to determine whether he should remain free until his sentencing.
The original indictment is here.