Government Announces Return of $55M from Alleged Ponzi Schemes

Though the alleged mastermind behind several Internet-based Ponzi schemes has pleaded not guilty and is awaiting trial, Justice Department officials announced Monday that they'll be distributing $55 million in forfeited funds to "victims" in the meantime.

Thomas Anderson Bowdoin Jr. was indicted by a federal grand jury in November on multiple counts of wire and securities fraud. Bowdoin is accused of generating millions of dollars by promising consumers high rates of return for investing in his company's advertising ventures. Prosecutors allege Bowdoin was running Ponzi schemes and personally made off with more than $1 million.

According to a release today from the Justice Department, about $55 million in forfeited funds were recovered by the U.S. Secret Service during the criminal investigation into Bowdoin’s case. The assets came in the form of “bank accounts, real property, luxury vehicles and watercraft.”

Bowdoin has pleaded not guilty. U.S. District Judge Rosemary Collyer denied his motion to dismiss the case in mid-March, and also denied Bowdoin’s request to have the trial moved to his home state of Florida. A status conference is scheduled for Oct. 21.

One of Bowdoin’s lead attorneys, Michael McDonnell of Naples, Fla., said the Justice Department is wrong to label the recipients as “victims.” If Bowdoin were to win an acquittal at trial, McDonnell said that his client could not recover any funds distributed through the forfeiture.

“I don’t know why they’re calling them victims. They were purchasers of advertising and no one lost a dime until the government stopped it,” McDonnell said. “This is hotly contested, there’s going to be a criminal trial and we are confident there was nothing illegal.”

Co-lead counsel Charles Murray of Bonita Springs, Fla., did not immediately return a request for comment.

The Justice Department and Secret Service intend to distribute the funds to about 8,400 victims of the alleged schemes. In a statement, U.S. Attorney for the District of Columbia Ron Machen said that the return of funds, known as “remission,” will put “$55 million back into the pockets of innocent victims of this online Ponzi scheme.”

“As we did in this case, we will continue to work with our law enforcement partners to recover every penny we can find for victims of financial fraud,” Machen said.

Also in a statement, Assistant Attorney General Lanny Breuer said the remission in Bowdoin’s case shows that “forfeiture is a powerful tool for ensuring that victims of financial fraud are made whole.”

Comments

[JET]

Vladimar Putin would approve, no doubt