WASHINGTON (AP) — A Florida man who authorities say duped thousands of investors and misled them about his background pleaded guilty Friday to running an Internet-based Ponzi scheme that raised more than $110 million.
Thomas A. Bowdoin Jr., 77, of Quincy, Fla., pleaded guilty to wire fraud in U.S. District Court in Washington and faces a maximum sentence of 6 ½ years.
Prosecutors say Bowdoin, who operated an online advertising company called AdSurf Daily Inc., marketed himself as a "money magnet" and even held rallies where he promoted his business model and promised investors huge returns. But authorities say most investors never saw big returns since the money taken in was used to pay back earlier investors and also covered personal luxuries for himself and his family, including a boat, a lake house and two luxury vehicles.
A lawyer for Bowdoin did not immediately return a call or email seeking comment.
No sentencing date was set. A June 12 hearing will determine whether he can remain free until his sentencing.
Bowdoin never revealed to investors that he had been convicted of three securities-related felonies in Alabama in the 1990s, instead claiming that his only background blemish was a speeding ticket in North Carolina, prosecutors say. He also directed a subordinate to tell investors that he had received a medal of distinction from President George W. Bush for his business achievements. Bowdoin had actually bought the medal from the National Republican Congressional Committee with investors' money.
His company, ASD, promised investors commissions if they recruited other members. Members who viewed other members' websites on the company's Internet site were promised the chance to earn 125 percent on each dollar paid in. The company operated at different websites from September 2006 until August 2008, when federal authorities seized its assets.
The Justice Department says more than $110 million was raised from more than 96,000 people. About $45 million was paid to members to cover their investments, and roughly $8 million was used to operate and promote the company.
Authorities say $55 million has been returned to 8,400 duped investors.