Did Zeek Rewards management know about the SEC?
All our critics (are) self-appointed with no standing in the professional community (and are) behaving unprofessionally by acting on false information.
-Gregory Caldwell, “Acting” COO of Zeek Rewards on August 4th, 2012
Whilst much is still currently unclear regarding the specifics of Zeek Rewards CEO Paul Burks’ dealings with the SEC in the lead up to Zeek being shut down, bits and pieces are finally (albeit slowly) starting to trickle out into the public sphere.
With many of Zeek Reward’s executive management holding affiliate accounts to participate in the company’s Ponzi scheme, one of the most pressing queries has been the question of how aware of the SEC investigation were Zeek Rewards corporate executives, if at all.
Knowing full-well that Zeek Rewards was a Ponzi scheme and being aware of the SEC investigation and a resulting shutdown is vastly important, as such knowledge (and the suppression of it) put Zeek’s management in a conflictingly advantageous position as investors.
Whilst regular affiliates continued to re-invest the bulk of their daily ROIs and encourage new investors to come on board, continuing on unawares right until the precise moment Zeek Rewards was shut down, Zeek’s executive management, aware of the SEC situation and what was occurring, could have easily been quietly cashing out as much as possible from their personal affiliate accounts.
Indeed, if you look at the actions of some of Zeek Rewards’ more prominent executive management in the last few months of Zeek Rewards, a distinct pattern emerges.
Former COO Dawn Wright-Olivares all but vanished from the public eye after informing affiliates Zeek Rewards would not be able to pay them unless they “deposited more money” into Zeek’s e-wallet accounts (June 26th).
A week later Zeek Rewards Sales Director Darryle Douglas disappeared off the face of the planet for “personal matters” on July 30th. Such “personal matters” were never elaborated on by the company and following the official announcement, Douglas was never publicly heard from again.
Although not Zeek Rewards corporate, it’s worth noting that around the same time as Wright-Olivares’ and Douglas’ departures into obscurity, Keith Laggos, a paid consultant of Zeek Rewards, claimed that the FTC were going to shut down Zeek Rewards. He also began to promote Lyoness to his Zeek Rewards affiliate downline as a ‘Plan B’.
For his efforts, Laggos was terminated as a paid Zeek Rewards consultant on or around July 24th. To date it remains unclear whether or not Laggos also lost his “$40,000 a month” Zeek Rewards affiliate account.
Three of Zeek Rewards’ previously prominent top public figures went underground within the space of a month. And just under three weeks later, the SEC shut the company down for being a Ponzi scheme.
Hindsight analysis would indicate the witnessing of a typical Ponzi scheme pre-planned exit strategy. With everyone involved appearing to have lawyered up and refuse to make any public statements though, it appears we’re going to have to wait to get any further clarification on the matter.
In the meantime, a recently leaked email from Greg Caldwell certainly suggests that Zeek’s executive management had at least some idea of what was happening.
The email exchange in question occurred between Zeek Rewards COO Gregory Caldwell and Diamond Zeek Rewards affiliate ‘Duane DeFrees’.
On August 17th Zeek Rewards pulled the plug on their Ponzi scheme and on the 18th it was revealed that the SEC had shut them down.
Amidst these events, over a million Zeek Rewards affiliates scrambled to make sense of what was going on. Naturally many were anxious about the future of the daily ROI payments they’d been enjoying from Zeek and sought information from anyone within the company who would speak to them.
One such affiliate, Duane Defrees, reached out to Greg Caldwell (photo right) through his White Hat Solutions ‘web enquiry’ form:
Did you or did you not work to make sure Zeek was not a Ponzi scheme? I do not like to think I was so dupped and caused others to be taken in?
Can you give us any ray of hope here to pass on to our many affliates who tursted you and your imput into Zeek Rewards. Along with many others we still have Faith in first of all God and also in the counsel that seemed to be given by all in this matter.
Thank you for your answer.
I’m not sure exactly when DuFrees initial email was sent, however Caldwell (photo right) wrote back a lengthy reply on August 19th.
In it, Caldwell claims he ‘was not allowed to participate in meetings with the SEC or the attorneys‘. What attorneys Caldwell is referring to is unclear (Paul Burks personal attorneys or Zeek Rewards’ own?), however the key piece of information Caldwell reveals is that he was aware of a dialogue existing between the SEC and Zeek Rewards.
Date wise there’s no indication as to when the SEC began their investigation into Zeek Rewards, with Caldwell only confirming that Zeek Rewards ‘was ultimately shut down but not before the SEC began their investigation into Rex Venture Group‘.
One indication as to the length of the investigation was revealed yesterday by Patrick Pretty, who, through court documents filed by CEO Paul Burks’ attorney, learnt that
Paul R. Burks, the operator of Zeek Rewards, was cooperating with the SEC.
That “period of cooperation” resulted in the production of “hundreds of thousands of documents, including financial records, e-mails, and all manner of electronic files,” according to the filing by Noell P. Tin, an attorney for Burks.
“Hundreds of thousands of documents” passed between Zeek Rewards and the SEC, no doubt forming the basis of their analysis and court filings against the company. Again, when the SEC began investigating Zeek Rewards is unclear but the scope of the investigation is what’s relevant to analysis of whether Zeek’s corporate management knew of it.
Largely fuelled by nonsensical lawsuits filed by Zeek Rewards affiliates claiming the SEC had no idea about Zeek Rewards when they filed their complaint and Troy Dooly’s updates on MLM Helpdesk, it’s being heavily pushed that Paul Burks acted alone in his dealings with the SEC – with this ultimately resulting in a closed-door deal involving a $4 million fine and surrendering of Rex Venture Group (Zeek Rewards’ parent company) to the SEC.
Whilst the former might very well be true (and I’ll give Caldwell and the rest of Zeek Rewards’ management the benefit of the doubt on it), does anybody honestly believe hundreds of thousands of documents were exchanged between Zeek Rewards and the SEC with executive management left completely unaware?
I have no idea if Greg Caldwell had a Zeek Rewards affiliate account but the timing of Dawn Wright-Olivares and Darryle Douglas’ disappearances and Keith Laggos suddenly pushing ‘Plan B’ onto his Zeek downline certainly paint the picture of rats (metaphorically speaking of course) deserting a sinking ship.
Why would they do that unless they’d sniffed something was up? The finer details might have been kept from them but “Ponzi scheme + SEC investigation + requests for hundreds of thousands of Zeek Rewards documents” is an equation anyone even remotely familiar with Zeek should be able to work out. Let alone those running and who were directly involved in the day to day running and management of the scheme.
In his defense, Caldwell claims that it was the “idiots” and “morons” in the Zeek Rewards affiliate pool that not only incited the SEC to investigate Zeek Rewards, but also led to the closure of the company.
I never (got) involved with the compensation plan or the finances of the company. That job was left to the new CFO (also an innocent bystander; there less than a month) and the much respected outside CPA firm.
The compensation plan had been reviewed by no less than six or seven attorneys before I got there. Not one blessed it as perfect nor could they, given the unique nature of the program.
Most of the changes that were suggested were initiated, including those by an SEC attorney. Still other changes were underway and not yet announced.
That said, I know that Paul Burks would have done everything in his power to tweak it or adjust it to conform to any known laws if he had been allowed.
There are a lot of stunned people, including myself and some of the attorneys, that the SEC or anyone would suggest this is a Ponzi scheme. That fact was not litigated and I don’t believe can ever be proven.
More important (sic), had I ever thought the company was doing something illegal, I wouldn’t have been there.
Whether it’s post Ponzi-scheme damage control or sheer ignorance on the behalf of someone who claims to have ‘30 years experience as a licensed private investigator‘ and founder of a company that ‘provides assistance in corporate investigations, security, risk management and compliance assessment‘, I have no idea how Caldwell can claim to be “stunned” that the SEC, upon examination of hundreds of thousands of Zeek Rewards documents, came to the conclusion Zeek Rewards was a Ponzi scheme.
Caldwell attempts to play down his role as COO in the immediate period before Zeek Rewards was shut down, claiming that he
volunteered to take the operational roll as “acting COO” on a very temporary basis and had only held that for less than a month.
I never “got promoted” to COO, which would imply I became an employee of the company.
To take Caldwell at face value here is to play into the linguistic pseudo-compliance that has plagued Zeek Rewards ever since he was brought onboard as a paid compliance consultant.
In an utterly bizarre and completely destructive reflection of the MLM industry’s open willingness to embrace the absurdity of believing that the mere renaming of banning of terminology is what constitutes legal compliance, to deliberate on whether or not Caldwell was indeed Zeek Rewards’ COO is to be sidetracked.
Zeek Rewards put out a press release on July 30th, declaring publicly that
Greg Caldwell has accepted the role of acting COO for RVG where we are confident he brings all of the skills, experience and strengths required to take the RVG operation to the next level.
In accepting this role, it begs utter disbelief that Caldwell, an investigator with 30 years experience, would have blindly signed on directly under Paul Burks as Chief Operating Officer, “acting” or otherwise.
More importantly, it also begs the question as to what authority Greg Caldwell made the very public statement that all Zeek Rewards’ critics were unprofessionally spreading false information with. The statement in and of itself lends to the fact that Caldwell himself would have verified financial information proving Zeek Rewards wasn’t a Ponzi scheme before making such a statement.
One would certainly not expect anything less from someone at the helm of a field of investigators working for a firm that specialises in corporate investigations, security, risk management and compliance assessment. Yet that’s precisely what Caldwell is expecting everyone to swallow.
And just how easy would it have been for Caldwell to conduct the most basic of due diligence on a company he “accepted” an executive management position at?
“How much of the money we take in daily is from affiliates, and how much of this money is then paid out each day to affiliates?”
Paul Burks repeatedly deflected answering this question citing “proprietary information”, but in order to facilitate the running of the business one would certainly imagine this information would be made known upon request to those residing in the upper echelons of the scheme.
To suggest that this thought never crossed Caldwell’s mind, nor was the question raised between Caldwell and Burks prior to Caldwell getting on board and accepting his COO position, leaves me at a complete loss.
Well, at least it did until I read Caldwell’s offered explanation to DeFrees on why the SEC shut Zeek Rewards down:
One of my mantras, when talking to company CEOs is it doesn’t matter if the company has the best compliance department in the world or the most stringent Policies and Procedures, if you don’t know what the field is saying.
In other words, are they using the approved message the company puts out, or have they reinvented the wheel because they think they are smarter and know better than the company (or its attorneys)?
(Caldwell then includes an example of a Zeek Rewards affiliate using investment terminology)
As you can clearly see, this idiot, like so many others, was representing it as an investment.
The entire SEC investigation began because of another moron’s website in which he listed a bunch of companies where people could earn daily “interest” on their “investments”.
This coming week, a Case Management program was ready to be installed so the hundreds of compliance cases per day could be better tracked.
The company spent upwards or $40K on that program alone. Doesn’t much suggest no one cared or was promoting a Ponzi scheme, does it?
I know that Paul Burks would have done everything in his power to tweak it or adjust it to conform to any known laws if he had been allowed.
The company had numerous people “scrubbing” the Internet every day and getting Affiliate websites and blogs taken down for those who were portraying the opportunity for something other than what it was.
As fast as they were taken down, new ones sprung up, all talking about “investments” and compounding interest on the investments.
Thus when ANY regulatory body gets a whiff of a company, the first thing they do is search the internet. Guess what they found?
And, now you see how fast affiliates can get a company taken down by misrepresenting the opportunity.
As per Greg Caldwell, the SEC didn’t shut Zeek Rewards down because Paul Burks sat in his office inventing the daily ROI percentage paid out to affiliates, or that mechanically Zeek Rewards operated like an investment scheme with 90% of the money coming into Zeek Rewards being invested affiliate money, and 98% being paid out in daily ROIs also being invested affiliate money.
No, Zeek Rewards was shut down because “idiots” and “morons” were running around the internet referring to the investment opportunity as well, an investment.
And Caldwell wasn’t an employee of Zeek Rewards because, you see, he “accepted” the position of COO as opposed to having been promoted as an existing employee of the company.
This is the idiotic linguistic psuedo-compliance battle that has raged between Zeek Rewards affiliates and its critics on BehindMLM over tens of articles and now thousands of comments.
Fuelled by ringleaders like Caldwell enforcing the “a Ponzi scheme is not a Ponzi scheme if nobody refers to it as such” angle, ultimately and as repeatedly predicted what you call your Ponzi scheme doesn’t matter. What matters is whether or not you are indeed running a Ponzi scheme.
And that, Paul Burks through Zeek Rewards was.
Just like we were supposed to believe that Zeek Rewards wasn’t a Ponzi investment scheme because affiliates weren’t able to use investment terminology, so too are we now expected to believe the Caldwell and the rest of Zeek Rewards management had no idea what was going down between Burks and the SEC.
Hundreds of thousands of documents passed between the two entities, Caldwell claims he wasn’t allowed to sit in on SEC meetings and one by one, executive management slipped off quietly into the abyss.
Believe me when I say it is with no pleasure that I point out the fallacies of the multitude of MLM “authority figures” Zeek Rewards had on their payroll. Looking forward I can only hope that in documenting the catastrophic engulfment of stupidity that has gripped the throats of such a large cross-section of the MLM industry over the last two years, that the industry of linguistic compliance and wordsmithing is truly an era left behind us.
No matter who you hire, no matter what experts you get to sign off on your compensation plan and business model and no matter what your members refer to your business as, at the end of the day all that matters is the mathematical mechanics of your business. Or in layman’s terms, the flow of money.
Practically speaking in the truest sense of the words Zeek Rewards was a Ponzi scheme, with the company and its money flow having been thoroughly discussed and analysed long before the SEC got involved and shut them down.
I personally hope it’s a long time before I find myself having to enter into discussions with people to dismiss the idea that what you refer to something defines it, rather than what it is itself.
And the sooner the Greg Caldwells, the Keith Laggos’ and all the MLM attorneys, consultants and trainers who willingly participated in this nonsense and signed off on it (you know who you are) acknowledge and accept this, the better for the MLM industry at large.
Footnote: The email exchange cited in this article between Greg Caldwell and Duane DeFrees was first published on BehindMLM by reader ‘Getting Educated’ on September 1st.
*sigh* Apparently NOBODY learned ANYTHING from Ad Surf Daily.
Andy Bowdoin forbade EVERYBODY from EVER referring to ASD as an investment, or use anything like “return”, “interest” and so on. They got busted as an Ponzi, unregistered securities, etc.
You can’t preach AFFILIATE COMPLIANCE when the company itself is NOT COMPLIANT WITH THE LAW! That’s HYPOCRISY!
SEC didn’t bust Zeek because of affiliate non-compliance! SEC busted Zeek because it’s a PONZI!
Caldwell is in as much denial as Dooly.
I was trying to explain the basis of the whole linguistic psuedo-compliance issue with the girlfriend today.
I broke it down by explaining that if you were manufacturing shorts in a country where shorts were illegal, calling them “half leg pants” wasn’t going to make a difference.
In some MLM circles stuck in bizarro world for the past year or so however (whenever Caldwell brought his linguistic compliance to Zeek), this has pretty much what they’ve been pushing.
I wasn’t blogging about MLM back when ASD went down but I sincerely hope for the industry that the coverage Zeek Rewards has received means it’ll never happen again on such a wide scale involving so many MLM authority figures.
Ideally it’d never happen again but we of course don’t live in an ideal world.
On a side note, when trying to break down the whole international Ponzi fraud ring conspiracy theories, I borrowed Wright-Olivares’ hamburger analogy and told her that it’d be like me and some people trying to turn McDonalds into a mechanic auto-shop. Utterly impossible because they sell fast food.
As such if the SEC or anyone else rocked up to investigate, they’d come away quietly because no matter what we claimed, McDonalds don’t fix cars.
The only time you need to worry about the authorities investigating your business for being a Ponzi scheme is if you are indeed running a Ponzi scheme. How your members describe it is irrelevant as they cannot dress up what is not there.
Nor can the authorities shut you down for running someting you’re not. Ponzi scheme is a very specific definition and when you’re paying out a daily ROI that’s 98% newly invested affiliate money, you’re pretty much neck deep in that definition, with anything you were planning to do thus being completely irrelevant.
You also have to keep in mind that Caldwell is answering questions with what he knows, which may or may NOT be the truth.
He claims that SEC is after Zeek because that alleged website is comparing all the programs (including Zeek) as “investments”. Does he have proof? Did SEC tell him this? Or did he just SUSPECT?
How did he know that other companies are also getting investigated? Or did he just ASSUME because that’s the “most obvious reason” to him?
Even when you think about it, the idea that “we just need to make all the affiliates compliant with Zeek-speak to make the SEC stay away” makes no sense.
That actually means Zeek is living on borrowed time, that ANYBODY who used the “i-word” is going to trigger Zeekapolypse. “It only takes one”, hah.
Now we know where Troy Dooly got that “SEC is also investigating several other companies” factoid.
Seems SEC have been in contact with Zeek for several weeks. Why else would they know to cancel those training calls and the Red Carpet Event?
Quantifying the amount of time the SEC have/had been investigating based on “hundreds of thousands” of documents being requested is somewhat of a difficult task.
No idea how fast they process the information they request or how long it takes for analysis to manifest itself into court documents. They did provide specfic numbers in their complaint though so I suppose a few weeks (if not longer) is a fair enough guess.
In the article I was driving home the point that I find it quite unbelieveable that Burks managed to keep all this under his belt, in that nobody had any idea the SEC were carting off copies of hundreds of thousands of documents but Burks himself.
Voldemort
Here’s a perfect lesson in spindoctoring aka fraudspeak
Compare:
The business model/compensation plan had been reviewed by no less than six or seven attorneys before I got there
with
six or seven attorneys have been right over the companies’ accounts before I got there
Compensation plan = intangible
companies’ accounts = tangible
Compensation plan = theory
companies accounts = fact
Greg Caldwell / White Hat Solutions have probably been hired for the specific task of fronting the company during a period like this. “You need different type of leadership on the way down than on the way up” strategy.
Dawn, Darryl and the others would have failed miserably in a situation like this, with all the fake positivity and the need for self motivation.
Greg Caldwell is also using the strategy “there’s a difference between being open and incriminating yourself”, meaning that he has to stick to the story about not knowing anything. But if he was hired for that specific task of fronting the company during a shutdown, then he also knew all the important facts in detail.
Zeek’s management probably knew they were in trouble already in December 2011 or January 2012, but decided to play the game for as long as possible with the same strategy as they had used all the time. Greg Caldwell is probably part of an exit-solution, having someone more “neutral” (not so involved) to represent them during the last stages.
Part of his strategy seems to be “blame other affiliates for not being compliant, so you don’t blame us”. It means he tries to direct some of the blame away from the other leaders, placing the cause of the problem “out there” where nobody is able to identify it.
I’ll guess Greg Caldwell also may have been a part of the SRN Denton lawsuit, part of the idea behind that lawsuit. That lawsuit will also direct blame away from the leaders.
Affiliates in general are being fooled. The real cause of the problems is the company itself and its leaders. But they are fooled to direct the blame in all other directions.
And Troy Dooly is a part of this problem, with all his misleading theories about “intl Ponzi ring” and similar theories. He has been a major part of the problem all the time, as a “perfect tool for any conman”.
Troy’s specific problem is his trust in authorities and “experts”, or any other that are able to act in roles similar to those. This makes him a perfect tool for a conman, because he will repeat all you want him to say, and even add his own details to it.
For MLM-leaders, Greg Caldwell’s strategies can probably be interesting to study. Most leaders seems to have very limited repertoir of strategies, and you will need different strategies in different situations.
Greg Caldwell tries to direct blame away from the company and the leaders in Rex Venturee Group, using the tools that are available to him.
I’ll guess we can find a connection between him and Robert Craddock if we dig deep enough, but I don’t believe it will be too difficult too find.
The blame can be directed against:
* the SEC, other governmental agencies
* the court system
* the affiliates themselves (YOU)
* the other affiliates (THEY)
* the critics
* the newspapers, and other media
* the competitors
Making up one or two clear enemies will direct the blame away from the company, and away from the leaders there. It’s even better if you can unite people into groups, since people in groups are more willing to believe in something (and they will add lots of stuff on their own).
A similar strategy is to add confusion to the situation, make it more unclear who is to blame and for what, with misleading theories pointing in all possible directions (but away from the real cause).
Troy has used a strategy like that several times, like in the OFAC issue with 6 banned countries, the “unique bid auction niche”, “gaming theories” and in other theories.
So I have identified two possible strategies so far, and both of them are performed by people that probably have connections to Greg Caldwell.
* Robert Craddock is directed against a known “enemy”, the SEC and the court system.
* Troy Dooly adds confusion to the picture.
The question is whether they’re acting from their own motives or are simply “doing a job” for someone, or both? And whether they are “knowingly actors” or “willingly tools”.
I’ll believe it’s time to check the connections between Robert Craddock and Greg Caldwell / White Hat Solutions, e.g. if they have acted in similar roles before.
Well, Oz, I’m still trying to figure out if the skeptics on this website are “idiots” or “morons.” IS this not the reason why Zeek is gone today?
Let’s ask Bill Clinton how he feels about the situation:
Oz, again…another brilliant article on this Bizarro World (using your perfect term) of Zeek. Wow, there’s a lot to digest…I’m following the thread with great fascination. But there’s a lot of things to catch up on from the night before.
Obviously, you must have taken a working vacation because I know it took a lot of time to write this article. Thank you!!!!
Is anyone keeping track of how many of Troy Dooly’s “friends” and “mentors” are/were involved in scams like Zeek.
He sure seems to love a lot of people that are either idiots or outright criminals.
Anyway, I don’t see “linguistic psuedo-compliance” going away anytime soon. Hell, even Fred Mann’s JSS Tripler scam does it on occasion.
Unfortunately, in this age of easily created digital “products” and “services”, we’ll continue to see this for years to come from the ponzis/pyramids that really want to try and pretend not to be ponzis/pyramids.
If Greg Caldwell really wanted to pretend to be bringing Zeek into compliance, his first logical steps would have been to attempt to get Zeek Rewards removed from sites like MoneyMakerGroup and TalkGold.
But that might have slowed momentum a bit too much. 😉
@ZeekNoMore
Back from vacation now so expect a more regular publishing schedule. This article was actually penned on Saturday, after the last Bidify article I didn’t write anything till today.
Burks had accounts at Charles Schwab…WHAT? He could have been getting 1.5% daily, rather than a lousy 3-5% annually.
Should that give the Zeeksters a clue?
Oh wait, that would be unethical for him to have invested in his own company right? Surely he wouldn’t have ever done anything unethical.
They have. Troy Dooly replied on his website that he said came directly from Craddock, that said Craddock helped shut down a FHTM whistleblower called Joe Isaacs who launched 3 FHTM related websites. And Troy Dooly is the one who told me that Craddock works for Caldwell.
Here’s a screenshot of that comment
i.imgur.com/XHiDn.png
Man, I hate Troy’s comment system.
Apparently I got one comment through to his SNR Denton post, but then got the stupid expired session message when trying to comment on his recent Top 4 Penny Auctions post where he mentions JSS Tripler as a ponzi.
I was trying to get him to clarify, but I guess that won’t happen because I just don’t have the patience to fight his comment system.
Here’s what I had hoped to get a response to:
@Chris Bailey,
That’s brilliant. You should fight Troy’s comment system and post it. I’d like to see his explanation of the hypocrisy.
I’ll be damned.
I just tried again and it apparently went through.
I am starting a new topic called “Caldwell and Craddock’s Greatest HITS” on RealScam.
http://www.realscam.com/f16/caldwell-craddocks-greatest-hits-1555/
Prospective contributors may want to go there.
I know I was on the receiving end of one of Craddock’s hits, and apparently so was Joe Isaacs of FHTM (who’s not as innocent as he portrays himself to be).
Which makes Craddock, while operating a feeder scam, goes after a critic of the scam that he’s feeding… makes perfect sense. Did he tell Caldwell he’s doing it though?
Okay, here’s the summary of Craddock vs. Joe Isaacs of FHTM. As this is NOT Zeek, I’ll be very brief.
* Joe Isaacs was a FHTM rep, pretty good at it too
* Joe Isaacs started marketing “tools” to help FHTM reps (lead generation, email blasting, that sort of thing). I think it was characterized by folks over at Quatloos as “feeder”.
* Craddock helped FHTM sue Joe Isaacs for trademark infringement.
* Isaacs decided to turncoat, start class action against FHTM
* Isaacs eventually lost, but kept the domains up
* Craddock helped FHTM really shut down the websites
So isn’t ironic that Craddock operated a “feeder” for Zeek (that ZTeamBiz thing) while claiming critics of Zeek violated trademark?
Thanks. “Close ties to Greg Caldwell” and “worked for him”, even with a description for where and when that happened.
I’m trying to identify some of the motives behind some of the actions, whether people are protecting their own interests or are “just doing a job for someone else”, or both. It can make huge difference.
If Robert Craddock works for Greg Caldwell, and both of them works for Paul Burks (indirectly), then the SNR Denton lawsuit is probably part of a strategy.
Greg Caldwell is a “problem solver” for businesses in trouble, mostly MLM related businesses. It means he tries to solve some of Paul Burks’ problems, and he has been paid for the job. The same goes for Robert Craddock, he’s probably been paid for the job, too.
When someone pays you, then you’ll have to take care of THEIR interests, too. It means the class action lawsuit can only continue as long as it doesn’t come in conflict with other interests — the interests of Paul Burks (if he’s the one who has paid them for the job).
I’ll have to analyse the different roles here, to see if I can cause some “conflict of interest” somewheree. 😉
No surprise, Troy’s usual non-answer in reply.
What I wanted to reply if his comment system didn’t hate me.
But honestly, neither Troy or his comment system are worth dealing with at this point. If someone is able to post there and wants to ask him to answer the question, feel free.
I have one more exchange with him that I’ll post here, and then I’m done. 🙂
This was my post to Troy on his SNR Denton post.
I meant class of twelve, but missed my omission before submitting on his site.
Troy’s reply.
And finally the reply that I am unable to post there and no longer give a damn about it. 🙂
The explanation being given by zeekler promoters in Florida is the SEC made a mistake and very soon zeekler will be given a clean bill of health.
Part of their story is the SEC barged into Paul Burks office, threaten him with jail and would not even allow him to speak to an attorney.
I asked if the penny auction made enough money to fund the affiliates commissions, and was told it was absolutely profitable.
I’m out very little, so there is no sour grapes here. But these otherwise sensible people seem to be in denial. Or maybe this is a classic “Stockholm syndrome” reaction.
@Chris B — just start a new post instead of hitting reply. If you do “new post” the posts go through, but not the “reply”. At least that’ been my experience.
don’t know if this should be a new topic but this is the latest news for a future for the affilites.
Team leaders have been in conference to find something for their downlines. All in secret..now there are 2 options…quite unbelievable…
#.1…Lyonness…..has Lagos anything to do with this?
#2. should have launched last week but was delayed due to server problems…deja vu
anyway…it’s supposedly going to be a cross between the old zeek and the , soon to be launched, zeebates!
Are they for real? !
Thanks K. Chang, but that only works occasionally.
It’s truly not worth dealing with Dooly at this time.
Did anybody capture a recording of that conference call where Robert Craddock lied through his teeth about the SEC rushing in after Paul Burks’ attorney allegedly told Paul he would go to jail unless he signed everything over?
I wonder if Noell Tin has any idea that Robert Craddock may be slandering him.
The team leaders make money off their “team”. They have to keep the team together, so they have to raise the team’s hopes with SOMETHING, even if it’s bogus.
No way to tell. They may have latched on because Laggos himself had described Lyoness as “plan B” for Zeekheads. I personally find Lyoness VERY suspicious, but we can discuss that over in that review’s comments.
Maybe, maybe not, but then, it’s something to keep their downlines hoooked.
Beware the “excess of hope”.
They already banned me 🙁
I love how people are so impressed by law firms.
Locally to me, attorney Scott Rothstein headed a large, politically-connected law firm, Rothstein-Rosenfeldt-Adler.
The firm is now dissolved and Rothstein is doing 50 years for running a huge Ponzi scheme. His law partners and investors are facing/have faced clawback actions from the receiver as well as massive public humiliation when Scott squealed their dirty laundry to the feds to lighten his sentence.
And these people were/are part of the regional hoi-polloi, the people who regularly appear in the local society pages for various charity balls, etc.
A large firm doesn’t necessarily mean anything, unless you’re really easily impressed.
Scumbags can wear Armani, too.
Oz-I respect your work immensely, and it is an earned respect as I was sucked in by the Kook-Aid of Zeek and vigorously defended them to the end.
I have a doctorate degree and have made plenty of money in my lifetime, but I also know when to admit I’m wrong. I ventured into territory I didn’t understand, and I have a lot of egg on my face. Never again.
You may have covered this, but I haven’t seen it. Do you or anyone here have any idea how to handle income made from this mess. Yes, as guilty as I feel, I show a net profit this year of about 50k.
I don’t expect to keep it and I never spent it so it sits, waiting an official clawback. If it doesn’t come, I’ll gladly write checks to my friends. I would’ve done it by now, but I don’t know where this is all going. But because I have money “earned”, it will need to be reported to the IRS.
Do you have any insight on how that is handled, or can you refer me back to an earlier posts. Whether you made or lost, this sucks and it doesn’t feel any better to be sitting on money you don’t deserve and I just want to do the right thing, but in the right way since I don’t know how it will unfold.
Thanks for any insight from anyone.
The SEC don’t send people to jail, courts do.
Furthermore with Burks lawyered up and hiding, unless they had a live cam feed into Burks office they’re just making up shit.
As a standalone entity, sure. Attached to a Ponzi scheme paying out an implied >100% ROI over 90 days? Not a chance.
The Florida Zeeksters are smoking crack.
@Gregster
Sorry to hear about your situation, unfortunately I don’t feel I know enough about tax and income laws in the US to be giving out any advice on the matters.
I believe with the SEC shutting Zeek down for being a Ponzi that the IRS have some provisions for that but you’d be best served checking with an accountant.
As for paying your friends, probably best to see how this receivership stuff plays out first (uncharted territory for me so I have no idea or much of an interest seeing as it falls outside of MLM).
Hey Oz,
I just listened to that audio earlier and what Craddock actually said was that the after the NC DOJ told Noell Tin what Burks was doing, and this is quoted from the audio
Craddock claimed, of course, that all the NC DOJ had was speculation and innuendo gathered from the web and presented as facts to the attorney.
@Gregster,
the IRS has sections on its’ website for just this situation:
Theft Losses from Investments in “Ponzi” Schemes: Tax Treatment of Distributions Received From a Trustee/Receiver
http://www.irs.gov/uac/Theft-Losses-from-Investments-in-%E2%80%9CPonzi%E2%80%9D-Schemes:-Tax-Treatment-of-Distributions-Received-From-a-Trustee-Receiver
and
http://www.irs.gov/Businesses/Corporations/Reporting-Losses-Resulting-from-Ponzi-Schemes
Well the SEC had access to anything they wanted from Zeek, which according to Burks lawyer constituted hundreds of thousands of documents. That’s not speculation or innuendo.
Run a Ponzi scheme, go to jail. Sounds about right to me.
@Gregster
Here is a little more reading on the subject of clawbacks and what may be coming down the road. Jordan Maglich is an attorney whose practice includes white-collar crime and securities and financial litigation.
http://www.forbes.com/sites/jordanmaglich/2012/08/27/up-next-for-zeekrewards-ponzi-scheme-victims-clawbacks/
The only “frozen” e-wallet for zeek is NxPay. Solid trust pay and payza are paying zeek affiliates, albeit in their normal slow manner. This info can be verified easily.
Dawn wright olivares once described NxPAay as Zeek’s “white label” e-wallet. I do not know what that means, but the distinction and the subsequent “special treatment by the receivership” does not seem coincidental.
Is it irresponsible to conclude that NxPay may have been a Rex Venture Group asset? If so, is the next consideration reasonable, that there was a money laundering operation in place?
Looking forward to your insight
@Getting Educated.
Not according to the announcement on Solid Trust Pays’ front page:
http://solidtrustnews.com/2012/08/26/zeekrewards-update/
@littleroundman
Thanks for the link.
I am not quite sure why there has been money sent by STP this past week that was zeek related revenue. I can only say that the facts and the announcement on the sight are at odds.
They don’t make income opportunities like they did back in the good old days, “when a man was a man and a horse was a horse”. So all new opportunities have a Laggos or something similar included. 🙂
We have analysed Lyoness. I can link to a neutral description from one of the members, a factual description for some of the system.
I’m not very neutral in that thread. From a neutral viewpoint, Lyoness can be difficult to shut down (because authorities have problem understanding the system).
It is already facing some pyramid charges in Europe, and that can heavily affect the situation in the U.S., too. So there WILL probably be some problems, but I don’t know WHEN it will happen.
“half leg pants”, that was good. Very analogous to the crap Zeek was peddling.
Like you, I can’t believe so many so-called experts, analysts and attorneys looked things over at Zeek but not one told Paul that his willy was going to be in the ringer if he didn’t change things beyond just tinkering with 3 or 4 words.
Maybe one or some of them did tell him. It’s had to believe he could have or did just ignore all of them. But, I guess that is just what he did.
How would a lawyer not advise Burks that obfuscating the obvious would not fool anyone and would never hold water when the authorities came knocking?
Forget Troy, he claimed some inside knowledge but quite obviously is more amazed with crap like individual names of so-called high esteem and years “in the trade” than opening his beady eyes. I don’t think they’re open yet. The ROI is still Greek to him.
How did that work out for ya Troy? Your name in the mud and not an ounce of credibility left?? jfc
White-label… that basically means Zeek owns or controls NxSystem / nxPay. That *would* explain why nxPay, ostensibly HQ in Oregon, would use a small NC bank to hold its money (and do debit cards?)
Charles Ponzi bought a bank and basically lent himself money to keep the Ponzi going. You think Burks is doing something similar?
Maybe they did, and Burks replied: that doesn’t help, the “business” is running fine. What can we do the minimize the risk of of government investigation instead?
And that is where Caldwell comes in: affiliate compliance, everybody start talking Zeekspeak.
You need to talk to a tax attorney ASAP. This is beyond the expertise of most CPAs.
My personal GUESS (I don’t even do my own taxes… I have an accountant to do it) is you need to report it as if it’s legit, then when the clawback comes, pay it, and report it as loss due to Ponzi scheme (and report the taxes you paid on the lost money, unless you want to file a revised return, which is also possible).
Again, check with a tax attorney.
On the subject of stuff Zeek Rewards owned or might have owned, at this point in time I think it’s safe to say the ‘Paul Burks just bought a MLM company with eleventy billion retail customers’ was pure horseshit right?
I mean, surely by now we’ve had heard of members complaining that their company operations were frozen as a result of the Zeek closure fallout?
Not a peep, because it never happened.
LOL Oz, I’m sure that it was just because the deal hadn’t been finalized yet. 🙂
The SEC had to be talking to Burks (and other top employees I’m sure) and getting files for at least a couple weeks.
I’m guessing that when Zeek management realized that the end was near is when they decided to cancel all training calls & the red carpet event, which as we all know occurred right before Zeek was shut down.
Now the thing which leads me to have nothing but contempt for Paul & the others in management was that they didn’t put a hold on all recruitment.
According to an article I read, they were having recruitment meetings in Montana the very night hours after Zeek was shut down. Nobody ever told Zeekers to stop recruiting new people to invest their money into the ponzi.
Now maybe they might have thought that the SEC wouldn’t shut them down or something, but they (or at least Paul) would have to know the jig was up since they knew where the money was coming from and where it was going.
I know the official Zeek line was always positive positive positive, but with something as serious as knowing that they were likely to be shut down they should have told affiliates to stop recruiting at once.
Read the “consent by Paul Burks” document over at ASDUpdates file section is very illuminating, and explains Burks complete silence.
Basically, the consent decree, which was signed by Burks, in front of notary, and cosigned by his attorney, has an item 16 that say, essentially, “You cannot plead to us no contest and make any public comments that claims you’re innocent”. Presumably, this also applies to Zeek employees.
That would explain why Craddock is leading the charge. He was never officially employed by RVG, despite he claimed to be one.
Wonder SEC had seen that “takedown” letter Craddock sent to me? 🙂
I think you guys are w-a-a-y too nice and w-a-a-a-a-y too charitable when it comes to discussing Zeek and Burks.
This was a fraud from the get go. Which means EVERY member and EVERY dollar was part of the fraud.
After, what was it, 2 years and $600+ million, why would one of the fraudsters have a sudden attack of conscience and refuse new members ??
Let’s be clear here, this was no accident. It’s not a like couple of good ol’ boys made a little mistake or two and lost focus or direction.
These guys were bloody criminals who set out to defraud as many people as they bloody well could. It’s not like they woke up one morning and found themselves in trouble over some technicality.
Well, that depends. As for the gain, a tax advisor will likely tell you it’s regular income. When the clawbacks come, if you have to pay it back it may not be considered a loss at that time, and you will have a hard time taking a deduction for a court ordered restitution.
I do feel a little bad for Troy, I’m sure as a person he is probably a really decent guy.
However there is a threshold in terms of mistakes you can make when you have a privileged position such as his and the amount of faith his sheeple have the Zeek thing is just beyond “REDEMPTION” as he has on shirt often.
He seems to be attacking any and everything at will without proper investigation! Would we ever see an article from Oz without reasonable grounding…… We know the answer to that.
Commenting on his site is next to impossible I have a rebuttal to his reply as usual it’s the same smoke in mirrors that requires an “EXACT” reply and I can’t get the darn thing across to him!
He did investigate… it’s just that, as M_Norway said, he has a different priority than us.
With us, we use modified scientific method: we start with null hypothesis (it’s neither legal nor illegal), and then ask a question, then look for data to prove or disprove it, data that can be sourced, and is divorced from emotional attachments and biased sources.
I don’t know what’s in Troy’s head, but it seems he prefers data FROM biased sources, i.e. people he talks to on a regular basis or have professional relationships with. People like Caldwell, Nehra, Thompson, and when he got to meet Zeek, Dawn and Burks, are the people he believe told him the truth.
Then he doesn’t look any further for corroboration, but instead, look for stuff from his own experience to reinforce what he’d been told. It’s foot-in-door technique used on him, then his own confirmation bias took over.
He didn’t follow the Reagan principle: trust, but verify. He trusts, but he doesn’t verify.
Then, when other people point out that he doesn’t verify, and turned out to be wrong, he then goes into “I didn’t really say that” mode (ad hoc rescue fallacy).
(Either that, or he knew he lied all along, and had carefully worded every statement so nobody can pin it on him, but that’s almost idiotic conspiracy)
Yeah your right Kschang the Reagan Principle nicely sums him up in a nutshell “Trust, But Verify”. I think I might inscribe that right next to my pin board! 🙂
Ever since the Zeek scam this world has really got me invested in online debate I certainly enjoy the analysis.
Absolutely a favorite quote of mine…and one I apply in life 99.9% of the time. Zeek was the .1% lapse.
In fact, I just told a friend yesterday who met “the man of her dreams” on match.com that I was happy for her…however, “trust, but verify,” ie background check. Seriously….
Well, FWIW, I forwarded the audio recording of Craddock making him out to be the Lou Costello of attorneys to Noell Tin.
Naturally, he couldn’t comment on what he did or didn’t say to Paul Burks, but I only felt it fair that he should be made aware of how Craddock is using him as a tool to mislead Zeek affiliates.
Thanks for the thoughts interspersed on tax treatment and obligations regarding income derived from ZeekRewards. If anyone else is interested in this, I found an excellent source of information and may contact him further.
But this article is extremely helpful and provides a lot of solid information regarding ponzi schemes and tax treatment:
http://www.lehmantaxlaw.com/pdf/BNA_9_2011.pdf
Hit the nail on the head, K. Pretty much my thoughts and feelings as well.
I suppose in Troy’s mind, any negative news about the industry is inevitable, but outweighed by the successes of the representatives in successful, legit companies. So he opts to maintain a positive outlook regardless of the hits, misses, lashes, and bashes.
I’m sure he’ll be much more careful and slower to glorify and tout the “awesomeness” of the next big promising company.
I could also be mistaken.
I would imagine they called it “Project: Great Big Money Grab And Scram” before they launched it.
I could see the principle players behind the scenes on a much anticipated conference call listening to Paul saying: “I got this wild and crazy idea … and when it’s all over, we’ll be sippin’ on Martini’s way past retirement. ”
@LRM — I’ll take a slight different view as to how did Zeek end up that way. I personally think that Burks didn’t set out to create a Ponzi, at least not when he started RVG. After all, he did go 15 years flying under the radar, so to speak, with one forgettable offer after another, and pretty honest living, until 2 years ago.
On my Zeek timeline, they started FSC Auctions in March 2010, renamed it to Zeekler in June 2010, and also ran mybidshack (previously owned by Daryl Douglas, merged into Zeek) in like August. They ran the two side by side as they said “tweak the comp plan”.
Sometime between that and the launch of ZeekRewards in January 2011, they made the decision to turn it into an ASD-style Ponzi, and made the decision to “license” the ZeekRewards name from Ebon Research (which we assume to be the case).
I am going to make a prediction: link between Ebon Research (owner of ZeekRewards name and logo) and Zeek is also going to turn out to be Daryl Douglas. Why? I think owner of Ebon Research is probably gonna be a friend or relative or idol of Daryl Douglas.
As for WHO made the decision to turn it that way, that’d be a group effort, but Burks will take the fall for it, as he’s the managing partner. The question is who will Burks finger next.
Match.com ???
I thought most of them visited “BehindMLM.com” and similar sites, following the idea “hunt them down in their own environment”? 🙂
Don’t quite get your comment. Then again, sometimes I don’t get jokes and they have to be explained. Sometimes I think I may be a bit of an airhead. 🙂
The friend who went to match.com isn’t remotely connected to Zeek. I was just making the point that the “Trust but verify” principle which in the past is usually automatic for me, had a severe lapse in Zeek, which has now put my caution and suspicion in overdrive.
After posting that comment, I realized too that even though I gave her that advice, she wasn’t that receptive to it. I saw clearly the need for protecting herself, but she wants to believe she can have happiness.
Perhaps that’s what precipitated my lapse…I wanted to believe there was an easy way to make up for the losses in our business due to the economic downturn…I wanted to believe we could still retire sooner rather than later.
So, even if I had found this site and other sources of unbiased information, maybe I just had to learn the hard way.
That’s how scammers get you… you don’t actually believe in the scam. You believe the “goodness” that you somehow associated with the scam (with a lot of prompting / priming by the scammers).
It’s basically faith (believe, not verify), and it has no place in business or income opportunities. It may have a place in love and religion, but that’s for a different topic. 😀
K. Chang:
I really believe that the NxPay connection is the “smoking gun” for investigators to consider the breadth of this organized scheme.
By reviewing the actions taken by leaders in zeek with regards to NxPay, it can be determined who was knowledgeable and responsible besides the “isolated mastermind – Paul Burks” that many leaders are deflecting their culpability to.
We know that the company stopped issuing paper checks at the end of May. They told reps to cash by June 1 or checks would not be honored.
So, reps went to e-wallets for pay. Up until this point, only STP and AlertPay (Payza) were available. That is when NxPay shows up. Because fees are relatively low most people request payment thru NxPay.
Well, that works for about a week or 2 and then “claw back”. Yep, that was the term in the back offices next to the payment method for NxPay. Freudian slip, I am guessing, for what is to come, but I digress.
So now those payment requests need to be re-submitted to STP or Payza. This becomes a nightmare. But yes, many get paid money over a period of about 5-6 weeks.
Here is where the “smoking gun” is. In late July word spreads on a Wednesday that NxPay is back up and running. Even better, the normal 2 week drag (time delay – for “security”) is going to be lifted. So, if you want a check quickly all you have to do is toggle to 0% for a couple of days and request payment on Sunday and the proceeds would be in your account Monday with no 2 week wait.
This was not posted on ZeekRewardsNews yet. Looking back, I thought this was just an attempt by zeek to help all those who endured STP and Payza delays.
Why was the word out before released by the company? I believe it was because there was a massive cash out by those with knowledge about what was coming.
Why was the 2 week drag not implemented? I believe that the clock was ticking. The 2 week drag would mean the money could not be accessed in time.
My suspicion is that the word leaked about the quick payout wednesday that week. The company released the info late wednesday like it was news, to spin it.
But, if the investigators, whoever they might be, look at that one weeks transactions and see who cashed out big early that week (Monday, Tuesday, Wednesday), then I feel they can have a good understanding as to how organized this was.
I am diligently looking for the e-mails and press releases that support the timeline above. Following this forum, I am sure others can verify or correct me.
Most assured, the quick NxPay payout was after the NC DOJ CID on July 6.
NxPay relationship with zeek….something no smell so good.
Zeek rewards news issued release on 7-18 that NxPay would process payment requests with no 2 week drag for payments requested by Sunday 7-21. “Powers that be” had already “phoned” some of their people early in the week. No e-mails…..hmmmm.
The normal 2 week drag would have payments processed on 8-6-2012. That might have been too late for those who new what was coming.
P.s. how do those green boxes get done, so I can acknowledge what comment I am responding to
A couple of things stood out for me in this saga of Zeek. Paul truly believed that my the mere hiring of Gerald Nehra, the government would not touch them.
He made the comment in the video that when the government saw Gerald Nehra’s name, they knew a company was in compliance and to leave them alone; or words to that effect as I am paraphrasing here.
Then we had Dawn metioning clawbacks in one of the conference calls when discussing the E-Wallet situation if my memory serves me correctly. Look at the date of that call and you have a good idea of when the SEC was talking with Paul.
My personal belief is that the SEC started talking to Paul towards the end of May and that is what prompted the “switching of banks” using the line they had outgrown their two local banks.
They were fearing the insiders would not be able to get enough of their money out before the SEC took action. They knew the banks would be required to report all large transactions to the feds, and this would raise alarms with the SEC to possibly move faster.–
It seems that everything started changing at that point in time, and people shortly thereafter started disappearing from the scene. Just my theory as to when the SEC got involved. One day we just might find out for sure.
Why oh why didn’t I take the blue pill.
Time will tell but I suspect the purchase of the great friggen big warehouse is just as bogus. I’m sure when the initial reports from the receiver are made public we’ll have the answer.
I tired to get Troy to verify the “they bought an mlm” story, pointing out that if the sale was real and already went through then there’s a MLM company out there which is now owned by the court appointed receiver. But it seems he’s just a little backed up on reading his e-mails.
Quote from a comment:
1. Highlight the text you want to quote (with the mouse)
2. Click “Quote”
Manual method, for other quotes:
<blockquote> and </blockquote> tags (but I don’t know how to show it to you).
Thanks.
Well, Troy did post my response, although he then answered a question I didn’t ask, and again complained about RVG not getting a “day in a court of law”.
Troy, for the love of all that is good, RVG did indeed get a day in fount of a court of law. And they very meekly said “yeah, its all true” and were then found guilty.
May this be a lesson to all people that if something is too good to be true then it is.
A friend of mine who is not to business savvy got me to attend a Zeek’s presenttion. I immedatley susupected foul play when I asked the the host what percentge of revenue came from subs vs selling actual products fom the auction.
The host said he did not know the exact numbers but he knew the subs comprised a greater portion of the revenue. I then told him that it was inappropriate to not disclose this glaring fact during the presentation. I then told them it was a scam.
Then the host tried to make me look like a diifficult person in front of the group by rattling off the names of his spiritual oriented and highly evlolved friends, some of who were making 4 times their money.
I advised my friend not to put in any money and thank God he didn’t.
Last I heard the host of the event has boasted that he already has found a new MLM scam. Some people either never learn or don”t care as they hope to cash in before the jig is up.
Pretty awful people who claim they are “spiritual” while knowingly deceiving their friends.
Actually, what they said is “no comment, but I’ll accept plea deal”.
@Chang
Nxpay is indeed a smoking gun, as much as Dooly is a $20,000 red herring. That’s about all that redneck got out of the deal, but his efforts were more focused on the finder’s fee for helping set up ZeeBates.
I don’t think Dooly is dishonest as others believe; I believe he is maybe naive or simply a dumbass tool. I do think he knew about that CID before he started blogging about it, but he was in an awkward situation.
Looking at clues, I’m guessing the SEC was talking to Burks before July 6, and we are going to ultimately see the evidence of Dawn, Douglas, and the other rats cashing out as you addressed above.
I think that was GE, not me, pointing out the NxPay cashout.
I have to give credit where it’s due, so I’d like to say that I’m carrying on a dialogue of sorts with Troy Dooly and while I do not agree with his positions at all, the man has been more than fair with me after I had some pretty harsh comments about him on his site.
Comments he could have just ignored and not published but that he chose to not only allow but to address them with good faith arguments of his own. We have vastly different points of view but I have come in the last 24 hours to have a lot of respect for his character.
GBE
Kind of sort of. He did have to admit the facts alleged in the complaint, which is the essence of “no contest” pleas.
Those facts are going to be hard to explain when he faces criminal charges.
I read and listened to Dooly everyday since March of this year. I never doubted his character, still don’t. However I view him about the same way I view most MLM characteristics: Cheesy, hokey, often redneck, gimmicky tabloids.
Troy was always going to get back with you answers. Things are always “crazy,” “wow!” ” you hear my cell phone going off.” But you rarely got an answer nor much info of substance. Like the breaking news of Zeek in Europe-hogwash.
“Get skin in the game!”
I’ve heard other clowns use this bullshit terminology because most mlm people I meet are FOLLOWERS, they just copy cult like terminology like that because they heard someone else say it.
These type of people are always looking for the next big thing, jumping around from one gimmick to the next. Toss them a T-shirt and you’ ll make them **** in their pants from excitement.
Troy fits right in with this crowd. Look at the picture of those hayseeds in at the Lexington Holiday Inn eating off paper plates, nodding and clapping like a bunch of flapping seals on valium and Zeek crack. Troy fits right in with this crowd.
Again, I don’t doubt his character. However, it is difficult for me to have respect for what he says based on the genre he represents. There is never ending b.s., or as Oz defines it, “…linguistic psuedo-compliance and wordsmithing.” Troy does it constantly.
He is a product of his environment: wearing redneck t-shirts that look like Ed Hardy vomited on, staying dangerous, staying strong, and definitely acting like he is in network marketing.
LOL, it’s maddening, isn’t it? 🙂
In addtion to the whole “day in court” thing, Troy keeps on claiming how upcoming changes to the RPP could have/would have made everything compliant. He states:
It was Paul Burks’ method of calculating the RPP that made it a ponzi in the first place.
Burks obviously knew that he had to keep the RPP payments at a level that would give investors over 100% ROI or it would all start to unravel more quickly. That’s why he just made up the numbers to keep it at or around a 1.5% daily average.
If Burks had run the RPP in a legitimate and legal fashion from the start, there would have been no SEC shutdown, Oz’s initial review would have looked a hell of a lot different, and we wouldn’t be having any of these discussions.
Of course, if Burks had run the RPP legitimately, Zeek Rewards would not have gained a foothold on ponzi promotion sites like TalkGold and MoneyMakerGroup and would not have exploded like it did.
Instead, Paul Burks would have just been running a legitimate MLM where reps would have actually needed to find real customers who were truly interested in penny auctions.
Perhaps Paul Burks just got tired of running the everyday MLM that never really attained any great traction and wanted to be big dog in the MLM world before he retired.
I’ve never been able to find statements directly from Burks about his “Exact Method Marketing”, but anything that tells people there can be a 95% success rate is selling lies.
Paul Burks’ EMM nonsense has been around for a number of years, so he has been building up to this ponzi for quite some time.
It just took him a while to find the perfect ponzi product and have everything fall into place.
Saw this comment on mlm helpdesk from someone who clearly wasn’t happy with Troy signing off with.
“Living In Epic Delusion”
Christ I nearly fell off my chair ROFL
To all the people who think Zeek would have been fine had the SEC just waited a few weeks until the new programs kicked in I present a perfect analogy.
Say you robbed a bank every day for a period of time, and then got a lawyer who said you can’t rob banks anymore. So you start calling them “emergency withdrawals” How do you think that would work out for you?
That’s what zeek did.
But even going a step further and assume you didn’t call them emergency withdrawals, you really did quit doing them, and you just went to the bank, waited in line and made a regular withdrawal.
That’s what “waiting for the new compliance program to kick in” would have been. DO you think that you are home free on the banks you robbed to begin with?
LOL, how about this guy admitting that he and other MLM promoters knew exactly what Zeek Rewards was. His first admission is at about 1:58:
Guys like this should be locked up on principle alone. 🙂
That dude’s avatar looks familiar… I think he might have posted here on one of the Zeek threads.
After reading all on here about Zeek I have my antennae up, thank you for opening my eyes and feeding the information about these types of businesses.
Another ‘investment’ business has just crossed my email, (Ozedit: investment opportunities aren’t MLM and thus fall outside of the scope of this blog).
I know he was posting a good bit in one of the Bidify threads.
Mostly arguing it was legit because he was making money.
The George Foreman Grill comment was funny. Todd Hirsch has commented here. Didn’t agree with most of his video, but interesting to see the Ponzi scammers all calling Troy out “how could you NOT have known it was a Ponzi?”
Todd Hirsch mostly participated in the Bidify threads here. I had to start culling his comments because they increasingly were outright spam.
He then tried to publish a mountain of off-topic abusive commentary directed at myself (whilst simultaenously singing the praises of Bidify) and has remained in the spam bin since.
He hasn’t tried to publish anything since the SEC and Bidify both took his Ponzi points away.
Wow, the entertainment value of that video makes it a MUST SEE!!
Would really like to know what’s in that cup he hits at about 8:33. Clearly he’d been hitting it quite a bit before he turned the camera on!! Funny stuff!
Todd Hirsch is a longtime player. Search MMG for the Payusforward dot com thread. It was Todd’s stupid little one by three cycling matrix pyramid scheme that seems to have lived longer in prelaunch than it did post launch.
He’s another longtime small timer who should thank Troy for the publicity he gave them.
And these are exactly the people the authorities need to start targeting.
Without ponzi promoters like him, it would be a lot more difficult for these types of scams to gain traction.
I really don’t see Troy going to prison unless the authorities can actually prove that Troy was getting paid to promote Zeek while knowing it was a ponzi scheme.
If he was getting paid it was under the table. Perhaps that’s why he’s still professing ignorance and saying that he doesn’t believe it was a ponzi, but I think actually getting a conviction would be hard at this point.
LOL, Todd apparently pulled his video stating:
One would also have to assume he might have figured out it was unwise to admit he was deliberating promoting a ponzi on video.
Agreed Joe Mama.
Unless they dig up some documentation that he was involved in a more significant way than just getting his expenses reimbursed for Red Carpet Events and things like that, I doubt they would pursue him.
For Troy to be charged, he would have to do something really stupid like admitting he thought it was a ponzi on video. 😉
Hirsch took the video down because in it he quite clearly states he knew Zeek Rewards was a Ponzi scheme all along and promoted it that way. Any other reasons he come up with are just the usual Hirsch brand of marketing bullshit.
He probably did the same with Bidify till they pulled the Ponzi points plug.
IMHO Hirsch decided to use Troy Dooly for some free publicity, though he did start pretty early. Here’s his own post on the subject… dated May 2012.
https://behindmlm.com/companies/co2-rewards-review-selling-carbon-offset-units/#comment-76479
Which most likely is what he’s pissed off about in the first place. No way he’ll sell bids on a commission basis so all the hype he put into biddify is for naught. Now he needs to find another passive income opportunity to spam the web about.
Wait… what exactly did he say? I think he said Zeek and Bidify are the same! What the heck… Argh! That’s what I get for posting before breakfast… 😛
Does this sound familiar to anyone here? Kind of like the “good old days”, except for the fact that it is going on as we speak. Wow, people really kill me!!
Form the “Zeek Rewards Affiliates United Against the SEC” FB page, 2pm EST 9-4-2012:
…”Paul,,Brooks”, Books, Burkes, yeah, he had an UGLY BACK OFFICE (prison worthy all and in of itself)
Yeah, that quote came at about the time that last hit on his drink was getting into his blood stream. Clearly some strong stuff in that cup.
That whole thing was some funny stuff. Hope somebody made a copy.
Not sure if this has been posted in any of the Zeek-related articles but just found this article at the Dispatch. It was published 8/31 and offers background on the reporter that’s been covering the Zeek story, 23-year-old Nash Dunn.
I must say I’m in that group of folks waiting for more.
http://mywritestuff.blogs.the-dispatch.com/10330/reporting-zeek-a-story-of-timing-talent-and-truth/
Yes, one of my facebook friends made a mini rant about how the evil government shut down a legal and profitable business for no reason and hoped that the legal system would work so that Zeek could go back into business. You have to be kidding me.
If anyone thinks that there’s even a chance that Zeek will go back into business, all they have to do is read the “Consent of Defendant Rex Venture Group” located here:
https://sites.google.com/site/asdupdatesfiles/documents/other-asd-cases/12-cv-00519-zeek-rewards-sec-case
Read paragraphs 5 and 6, especially 6. Zeek is never coming back.
Drinking tends to cloud one’s judgement somewhat and makes us say things better left unsaid. Good thing he wasn’t driving too.
I’m assuming that there is no other place to view the video that was taken down. If it can be viewed someplace, I’d love to see it. Thanks!
I can give you a visual description.
The video was around 13-14 minutes long. The main actor was Todd Hirsch’ T-shirt (black, with “Bidify” printed), with Todd Hirsch wearing that T-shirt (you didn’t actually see HIM, only the T-shirt).
In the background there was a suspension bridge at night, with some “rolling lights” light-effects. Probably a premade bluescreen-video.
I tried to identify the bridge without any success, so I hope you can accept the video “Driving through the Laerdals tunnell, 8 times the normal speed”, as a replacement? It has a little more content than the other video.
M_Norway: Thanks! Just before reading your message, I found it on the other site and listened to it. Your description is quite accurate. Just confirms the fact that I will never ever be in MLM of any sort in the future.
Well, I’m glad Troy or someone else captured it and posted it back on Troy’s site.
I would like to see that video. Any chance someone has a link to it?
Courtesy of MLMHelpdesk I’ve replaced Hirsch’s deleted video with an alternative stream to the initial comment (#85) mentioning it.
If you have seen ONE “T-shirt video”, you have seen them all.
Visually they’re comparable to “Driving through the Laerdals Tunnell”, without the 6-13-20 kilometer caves, and without the sequence when you come out on the other side of the tunnell.
Hirsch . . . Dooly . . . both are representative of the “pond scum” that permeates the MLM industry.
Here’s some more fun from a few days ago on the “Affiliates United” FB page. Sounds like someone was on to them. Response from the Admin/Moderator sounds like the Admin/Moderator is a true blue Zeekhead. Maybe it’s Dawn. Hard to believe this stuff is real, but it is!!
Yes, it means the game is over. Especially when you consider that he was talking to the SEC for probably a couple months at least before RVG was shut down and handed over to the government on August 16th.
Oh and I should also mention that the forms Paul signed, which are readily available online, also state that he forfeits his right to a jury trial and any appeal to the agreement that he signed.
He also agreed to not run any more investment schemes in the future. So it’s a done deal. Zeek is never coming back, despite what all the Kool Aid drinkers want to think. They’ll have to find another get-rich-quick scheme to throw their money into.
Jordan Maglich has a new article on his PonziTracker.com site:
http://www.ponzitracker.com/main/2012/9/5/zeekrewards-update-banks-report-account-balances-receiver-ta.html
Not much “new” info, but it’s well-written and explains some issues surrounding unprocessed cashier’s checks and Burks’ personal assets.
Interesting new update from PPBlog, ZTeamBiz no longer able to take PayPal:
http://www.patrickpretty.com/2012/09/07/bulletin-zteambiz-site-purportedly-raising-funds-to-defend-zeek-affiliates-no-longer-has-access-to-paypal-site-weaves-conspiracy-theory-that-ebay-didnt-want-zeek-to-survive/
Looks like the whole SNR Denton facade was bullshit and they are going to use someone else Troy has just added a new article to his site in which Craddock confirms this.
Also seems he wasn’t to forthcoming with all the answers to Troy’s questions. So there we have it more backhanders for the Zeek heads while they fund the scumbags.
In fact it’s pretty much aimed at you OZ might wanna have a look.
Already replied. Comment in moderation.
What the people on the Zeek Rewards payroll believed is irrelevant. Mechanically the compensation plan was an investment Ponzi scheme.
End of story.
Of course they were, because at the end of the day that made Zeek Rewards a Ponzi scheme and was the core of the business. Its existance made everything else irrelevant.
What’s there to manipulate? Set your ROI to 0% re-investment and away you go.
Of course they did. Regardless of what Burks might have been tellin them they all knew SEC + obvious Ponzi scheme = disaster.
Cash out quietly whilst the sheep continue to re-invest and attract new sheep to invest.
Coming from company management this is simply dispicable.
This would (and most likely did) set off alarm bells within managment and prompted the ramping cash outs that occured prior to Zeek Rewards shutting down.
They were the only ones that knew (or had information to accurately suspect something was up), and kept it secret, quietly cashing out while the rest of the affiliate base re-invested, attracted new investors.
The VPN still connected to the Zeek Rewards backend and activity would have been easy to monitor from that end.
VPN just means snooping on the connection would have been difficult. If the VPN is connecting to systems you have access, it’s a moot point.
Please don’t waste my time asserting executive management didn’t have access to Zeek’s IT dept or weren’t in communication with them (of which, most likely most of them had paying affiliate accounts too and would have been been completely aware of hundreds of thousands of document requests being sent through the VPN connection).
Which, based on the professionals who have reviewed them, don’t suggest a Ponzi was being run.
Or that, when presented with the prospect of earning bajillions of dollars, they decided the compensation plan mechanics were irrelevant and thought telling people to not call it an investment mostly funded by newly invested money from members meant it wasn’t.
Well I had access to the compensation plan and I’m pretty sure I wasn’t in-house.
Come to think of it anyone with an internet connection had access to Zeek Rewards’ compensation plan. Exactly how big are you proposing Zeek Reward’s “house” was?
But why was Noel Tin ONLY representing Paul Burks but no one was allowed to represent the company?
Because like all Ponzi scheme operators, Paul Burks only cares about Paul Burks.
Contrary to popular belief he wasn’t Jesus Christ or Santa Clause reincarnate and knew full well what he was doing.
As evidenced by the cashouts some of his buddies knew what he was up to, and as per some of the statements you’ve received, allegedly some did not.
How it was promoted is ultimately irrelvant is and is just linguistic psuedo-compliance bullshit that I addressed in the article.
Mechanically Zeek Rewards was a Ponzi scheme, how it was promoted or desribed was irrelevant.
As for Greg Caldwell,
Yet he took on the position of COO anyway.
Caldwell dismissed and and all criticism of Zeek Rewards of his own accord and an official capacity as COO of Zeek Rewards.
Based on his knowledge something was up and what he knew about Burks off-location liasons’ and the repeated alleged denials of access to information that was needed for basic due diliegence into the company he just accepted an executive management position at, things don’t add up.
Either Caldwell was talking out of his arse (knowing full well the SEC were involved and that they didn’t give two rats about their being 8 complaints or not, they were there to investigate the Ponzi scheme operating on a massive scale), or he was doing his best to encourage new investors to come on board and keep existing investors re-investing their daily ROI.
Quite clearly, in order to arrive at such a conclusion it has to be presumed he’d done his own due diligence and investigation.
If that didn’t extend past “I asked Paul Burks and he said “we’re good”, that is inexcusable professional failure on Caldwell’s behalf and he needs to be held accountable for it. No excuses, no “but but I didn’t know” bullshit.
The SEC only barred him from going public in the last few days, he had every opportunity to look into the company he was being paid by and at the end of the day wound up working for, supporting and proclaiming the legitimacy of a Ponzi scheme.
That is probably going to be Caldwell’s greatest achievement legacy wise in MLM and it’s something that will follow him around for the rest of his career. And it’s on him, nobody else.
Honestly Troy, I don’t know why you’ve got such a hard-on for the guy.
then Zeek Rewards would have ceased to exist.
People were in it for the Ponzi scheme and nothing else. Wake up Troy.
First time poster here. My cousin tried to interest me in Zeekler; I told her it was too good to be true. She told me that though I did not understand it some “really smart businessmen” she knew had put up $10,000 (proving beyond a doubt that smart people invest in Zeekler) and that I should join and “Earn while I learn” like she/they were doing.
My cousin is an irresponsible idiot.
Thanks for all the good information you have been providing.
Good News About Zeek Rewards. Oz contact Troy to see if this is real.
https://www.facebook.com/pages/Zeek-Rewards-Affiliates-United-Against-The-SEC/465061326857478
@Anthony, it’s bull crap of the highest order. To save me the time in retyping I’ll thank Oz for his indulgence in linking to my opinion of this:
http://www.realscam.com/f10/zeek-rewards-how-get-3k-month-starting-free-member-642/index39.html#post27972
Note, I was replying to Dave’s e-mail and not Mary’s facebook post but they deal with the same issues.
@Anthony — come on, you really believe in tabloid style reporting? Just because someone SAID SO doesn’t make it true.
All that information is HEARSAY that allegedly came from Robert Craddock, a guy with UNKNOWN ties to RVG, except once he presented himself as a CONSULTANT to RVG. When Troy called him up, it’s “can neither confirm nor deny”.
This is no different than the tabloids reporting “XYZ is illegitimate son of Elvis”. Who said so? They quoted someone saying so. Is he credible? Can he prove it? Who the f___ cares, just print it!
I am starting to lose a lot of respect for Troy Dooly I had previously. This is pure rumor and hearsay, and thus, completely worthless as “news”.
Those who studied the Ad Surf Daily Ponzi will recall the EXACT same thing was claimed by ITS supporters, that Secret Service didn’t have a case and was “pushing” the prosecutors too proud to drop the case, and so on and so forth.
I hate to repeat myself, but here’s that quote again:
“Those who do not remember history are doomed to repeat it.” — George Santayana
And you’re about to see the SAME thing again, folks. I’ve LONG since pointed out Zeek is ASD 2.0. They are even following the same post-collapse playbook. Makes you wonder who is REALLY running the game, since it can’t be Burks?
Not to mention that we, here, at BehindMLM, have called out all of these issues early on. Including:
– What’s to prevent insiders from cashing out when they see signs of the collapse?
– The very likelihood that Robert Craddock is just enriching himself by appealing to affiliates to fight against the evil SEC, and that claims of legal representation are likely false or heavily misrepresented, and the lack of accounting & transparency will just mean a pay day for Craddock, and more money fleeced from affiliates.
– Everything Oz replied above, except we did it in real-time, and without access to the “insiders” that Troy Dooly had.
Is it necessary to insult people….or are you just trying to proof to your self you are smart?
In some cases jojangles, people are venting at those who tried to get them involved and then mocked, ridiculed, or insulted them when they refused.
People are people and do what they do.
As for the update from Dave Kettner, this is definitely looking more and more like ASD 2.0
I think Troy Dooly really needs to read up on how things played out after ASD went down.
It’s almost like these guys are using form letters, just changing the names and dates.
Why should they vent if they lost nothing? Would be better to maybe offer some condolence. Anyway, not fighting about it , just don’t agree personal insults should arise in a place like this…..
The definition for the audience here is “normal people, without any specific profession” (like lawyers, accountants, or nannies), so you can expect relatively “normal” behaviour.
And the information about “My cousin is an irresponsible idiot” seemed like factual information rather than rumours. 🙂
still an unecessary personal insult….
@Anthony
The SEC don’t discuss active investigations. With no provided source other than “our attorneys”, I’ll not the claims but am not taking any of them seriously.
I imagine SNR booted them because it’s a dud case, you don’t become top lawyers taking on dud cases. As for the SEC claims, without a credible source it’s just some guy trying to convince people to invest in the 12 top earners legal defense.
Despite cashing out whilst everyone else lost their investments, these guys continue to bleed investors getting them to fund their legal defenses because they don’t want to give any money back.
All a bit tragic really.
jojangles, were you on the receiving end of any of that? Most of us here were at some point over that past months.
Some of us with multiple Zeekheads, and we got that after giving them clear, reasoned and (as it not surprisingly turned out) accurate assessments of what they were so enthusiastically promoting.
“irresponsible idiot” was pretty mild really after being on the receiving end of some of the Zeekheads mindlessness.
Why, being bamboozled isn’t enough of a reason to vent? As in “how can you be dumb enough to drag me into this?”
That B.S. letter is also loaded with conflicting statements.
If the SEC was admitting that it was wrong, why would it be considering clawbacks at all?
And do you really think that a government agency would not go after what it considered ill gotten gains just because it couldn’t get money from others out of their reach? That’s like saying they would arrest U.S. based members of a drug cartel because the majority of the cartel lived outside of their jurisdiction.
Do you really believe that the SEC would actually recommend a law firm to do an opinion letter so that they don’t make such a “HUGE mistake” again?
Yeah, that’s what government agencies say and do.
Oops, our bad. We’ll fix it all up for you so we don’t have to bother you again.
LOL.
Question still remains, was Zeek legit? It doesn’t matter who’s who, or what has transpired, what matters is whether or not Zeek’s model was legit and the SEC’s claims of which neither have been proven.
They weren’t bamboozled….they didn’t join
Cannot the SEC consider clawbacks even while/if it’s claims were false? Well, why not? What corruption stops at government level?
No, that question only remains for those who want to desperately cling to false hope.
Paul Burks, the man who claimed he spent over a decade creating and fine tuning a system that almost everybody could be successful in, had the opportunity to go to civil trial and prove Zeek’s legitimacy.
He chose not to do so, effectively throwing in the towel on better than 15 years of running online “opportunities”.
He chose to plead no contest in the hopes of saving his own hide from the same fate as Andy Bowdoin.
Sure Red, the SEC is going to state that they were wrong in shutting down Zeek and then still pursue clawbacks.
More of the same B.S. that Disner and crew spewed in the post ASD stupidity.
What is alarming is that a US goverment department can now say it can’t prove a couple of issues it shut Zeek down for. That’s if you can believe the latest allegation of this.
Well, if you track the history of what the people claiming this have been involved in, you would know quite easily how likely it is to be true.
It’s far more likely that Hollywood will be calling me for a leading man role in the next summer blockbuster.
What’s alarming is the amount of sh__ someone who’s not involved directly (i.e. no skin in the game) can say about the US government that shut down a scam.
Who appointed him leader any way?
“IT” didn’t shut down anything.
“IT” complained to a Federal court that, in “ITS” opinion, Zeek Rewards was an illegal operation and presented evidence to support “ITS” complaint.
The Federal Court judge then gave Zeek And Paul Burks the opportunity to challenge the complaint.
An opportunity both Burks and Zeek chose to refuse to take.
The Federal Court Judge then accepted the evidence presented by the S.E.C. and HE (the Federal Court judge) issued the order and HE appointed the temporary receiver.
Now, if you want to claim the S.E.C. is corrupt, fine.
HOWEVER you have to then accept the Federal Court judge is also corrupt AND Paul Burks on behalf of Zeek is also corrupt AND Paul Burks gave away his money and company based on nothing more than a conspiracy AND the receiver is also part of the conspiracy.
If you believe all of that, then, I’m sorry, but you’re in for a very long and very painful period of time until all is revealed in the criminal case.
Who’s not directly involved and who was appointed leader and leader of what?
Is this likely to be true..the 2 ‘mistakes’ SEC supoosedly made..
The SEC acknowledged that there are a couple of problems with the case against Zeek Rewards and Rex Venture group. Here are the problems:
We (the SEC) are not able to find a victim in this case. We are not able to find anybody at this time that has been harmed by Zeek Rewards.
We (the SEC) are having a hard time finding a security.
@ jojangles
Neither statement is likely to be true.
They are both likely to be lies made up by Kettner and/or Craddock.
Reread what littleroundman stated above.
Reread what Kettner is claiming and ask yourself how much sense it makes and how realistic it sounds.
Note also that Craddock was apparently unwilling to confirm any of this with Troy Dooly and that this is all supposedly coming from an as yet unnamed law firm.
And that is the whole problem.
It simply doesn’t matter whether or not the “model” was legitimate.
What matters is what was actually happening.
In fact, the S.E.C. complaint spends a considerable amount of time explaining exactly how the “model” differed from what Zeek was really doing.
People seem to be conveniently overlooking the fact the S.E.C. wasn’t guessing when it presented the complaint to the court.
The S.E.C. was “inside” Zeek.
It has hundreds of thousands of documents and emails.
It has the accounts, it has the databases.
In short, it had EVERYTHING it needed to make the complaint stick and, what’s more, it had them BEFORE it lodged the complaint.
Why on earth do you think made Paul Burks meekly accept the penalty and give up and walk away ??
Do you have proof as to SEC being ‘inside’ Zeek, to them having thousands of documents and emails, the accounts and databases?
Have you not been following along?
Perhaps you should take some time and review the numerous filings that are posted at https://sites.google.com/site/asdupdatesfiles/documents/other-asd-cases/12-cv-00519-zeek-rewards-sec-case
Burks was busy cutting a deal with the SEC prior to everything getting shut down.
Whoever’s spreading this “SEC don’t know anything” info, of course.
There was no mistake. If there was one, do you really think Burks would not take his chances in a jury trial? Remember, Noell Tin is one of the best attorneys in N.C, despite the bullsh__ spread by that same “leader”.
How about a statement in a court motion filed by Burks’ attorney?
https://docs.google.com/viewer?a=v&pid=sites&srcid=ZGVmYXVsdGRvbWFpbnxhc2R1cGRhdGVzZmlsZXN8Z3g6NzQ3MjkzZDMzODVkNzhmMA
But who is this ‘leader’ spreading the bs….u have a name?
They would be Dave Kettner and Robert Craddock.
Yes, it’s in Paul Burk’s own motions filed in court. The Zeek conspiracy theorists don’t have a leg to stand on when Paul Burk’s own motion to the court points out the hundreds of thousands of documents shared with the SEC.
To quote the PPBlog which references the legal filings:
Ok…thanks to both of the above replies
Sure do.
you can download the .pdf of DEFENDANT PAUL BURKS’ RESPONSE TO RECEIVER’S MOTION here: https://sites.google.com/site/asdupdatesfiles/documents/other-asd-cases/12-cv-00519-zeek-rewards-sec-case/ZeekDoc20.pdf?attredirects=0&d=1
section (2) states: “On August 17, following a period of co operation between Mr Burks and Rex Ventures Group, LLC and the S.E.C., co operation that included the production of hundreds of thousands of documents, including financial records, emails and all manner of electronic files – the defendants entered into a consent agreement with the S.E.C.Immediately after these filings took place, the court, inter alia, entered the agreed order”
Remember, the document was “DEFENDANT PAUL BURKS’ RESPONSE TO RECEIVER’S MOTION” it was NOT a S.E.C. or government document and was written and submitted by Burks’ attorney.
1. Unsubstantiated: adj, not established as valid or genuine unsubstantiated allegations.
2. Naive: adj, lacking developed powers of analysis, reasoning, or criticism a naive argument
To believe this unsubstantiated statement is extreemly naive. The sorce is vague and unsubstantiated. You can to choose to accept this as truth or look deeper into the possible motives of the person makeing the statement.
The facts are verifiable and just a google search away. Like others have already stated start with ASD……. I did. No goverment conspiracy, just a ponzi that sounds alot like zeek.
ASD went through the same death throws that zeek is now going through. If zeek already got you once don’t let it happen again, ASD’s down fall is the roadmap to zeek’s end.
Um… I really think that Behind MLM is being monitored by the leaders of Zeek, or at least by the ZTeambiz. The Zteambiz has removed the info about SEC acknowledged problems with shutting down Zeek from their official website.
And the email which is circulated around has the sentence “Robert Craddock, founder of Fun Club USA could not admit or deny the following information.”
I can assure you the email I received did NOT have this opening…..
So where did that come from….
Probably someone added it after reading Troy Dooly’s update.
So, why wasn’t the email re sent with that opening ‘disclaimer’? When and where was it added? Seems very underhanded practice
There has been a lot of underhandedness by various self – proclaimed lovers and leaders of their teams in an effort to lure people into the next best thing. Attempting to steal down lines from friends being the biggest one.
Quite sad really how the true colours have come through and disillusioned the trusting.
When dealing with a $600million PLUS fraud, underhanded is what you’d expect, isn’t it ???
You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.
Abraham Lincoln
Re Jimmy’s earlier response to this, here’s the full quote from the court filing by Paul Burks:
The quote above is from page 2 of the court filing shown as “ZeekDoc20.pdf”, “DEFENDANT PAUL BURKS’ RESPONSE TO RECEIVER’S MOTION” which is available at:
https://sites.google.com/site/asdupdatesfiles/documents/other-asd-cases/12-cv-00519-zeek-rewards-sec-case
So YES, there is proof in Paul Burks own court filing that the SEC was “inside” Zeek prior to them filing their complaint in Federal court.
Ha, reading some of the comments over on Troy’s site is amusing. The strident self-delusion amazes me!
“Wahh, the critics were right, and I hate them! It’s all their fault!”
*shakes tiny, ineffectual fist*
“To be, or not to be, that is the question:
Whether ’tis Nobler in the mind to suffer
The Slings and Arrows of outrageous Fortune,
Or to take Arms against a Sea of troubles,
And by opposing end them…”
a horse! a horse! my kingdom for a horse!
then i can get the eff outta here!
@Red
That question was first answered almost a year ago, with that answer remaining consistent ever since.
When you pay out a daily ROI funded my member investments you’re never going to be legit, move on son.
and there goes Troy…whipping the ass of his mare
@jojangles
As I see it the only person involved in Zeek with less credibility with Paul Burks is Robert Craddock and his silly lawsuits.
…and only just, with Greg Caldwell not too far behind.
If the SEC didn’t make a public statement it didn’t happen. What bizarro world is this where the SEC are making statements to lawyers retained by parties threatening to sue them.
Hope I’m not violating any rules here and not sure if this means anything but just got this email this morning…Not sure who the Zeek Core Group is…?????
Anyway, I have wondered who the generals and lieutants are in this thing. I’m unable to tell who forwarded what to whom (I know you guys will figure out where it originated), but it appears that this came down from Dave to Todd and Robert and one other person who’s name/email address I deleted.
I also put asterisks in place of phone # for call as I don’t want to advertise for them….also probably nothing at all. But more than anything, I’m wondering who the “Zeek Core Group” is.
Could that be the name they’ve given to the new generation of Kool-Aid Drinkers or was this meant for distribution to a smaller group of Founders Club folks? I think it’s the New Zeek Version sheeplings. Would like to hear your thoughts…
Here’s the email
I beieve the “core group” are the top Ponzi players who have bandied together and are now attempting to get Zeek Rewards affiliates to fund their legal attempt to not have to pay back their Ponzi profits.
This is being done under the guise of “hay guyz if we don’t have to pay back our profits neither will you!
…what’s that? You didn’t cash anything out? HAY LOOK OVER THERE IT’S THE SEC ADMITTING STUFF!$! OMG GIVE US YOUR MONEY!11!”
Who sent you the email? If it’s so secret to a core group, how did you get it?
I never said it was secret. It was from my upline sponsor sent to his group.
THat’s my thinking,too. I just can’t wait to see who that Core Group is. For all the naysayers who think these guys/gals are out of the woods…far from it. The SEC investigation is only one layer.
The most interesting thing to watch unfold is when the Secret Service and law enforcement put the cuffs on those who are in the Founders Club/Core Group whatever you want to call them.
Can’t wait!!!!!!!
Note to K.Chang – I feel like I moved through all the stages of grief on this Zeek thing in about one day….except the anger phase. I can’t seem to let go of that one from time to time. But it’s only while I’m reading the blogs or emails. It’s definitely not consuming my life.
Perhpas it’s not so much anger as it is wanting to see justice done.
Absolutely agree with that….I hope they get hammered
Hope for the best and plan for the worst ZeekNoMore.
Up to this point, very few major promoters have been taken down in these scams.
Most of us are hoping that the authorities are finally coming to their senses and realizing that they need to routinely pursue more than just the owners/admins if they hope to make even the slightest dent in the online poniz/HYIP industry.
Why should they re-send the email with the disclaimer? Clearly Craddock did not admit nor deny. So, it is up to the readers to believe it or not. In fact they want the readers to believe it, that is why my upline still sent it to me despite the fact that there was a disclaimer inserted at that time. And when I checked the official website of Zteambiz, the information was removed too.
I know you are right. Realistically, maybe only a few will face criminal charges, but I will keep hoping… 🙂
Thankfully, the MLM World is one I can avoid, except for following this Zeek story. Since there will always be criminals to seek victims and victims who are all too willing to participate, this will go on and on and on.
yep…it’s BS. Have questioned one of the leaders as to where the SEC admission is of their 2 errors of judgement. There is no place to find an admission of this from SEC because it was ‘insider’ info given by the lawyers after their conversation with SEC.
Now…any professional/legit lawyer would be au fait with not disclosing such information that could be relayed to the public as it would be a ‘conflict of interest’ to the case.
Can that new report on Troy Dooly’s blog be accurate and if it is how long would something like that take unfold before this part takes place:
They already have decided on another law firm where our attorneys would write an opinion letter which is something we have been told should have been done a long time ago with Zeek and had not been done.
What this opinion letter will do is go to all regulatory agencies which will put them all on notice as to how this business, “Zeek Rewards 2.0″ operates.
Furthermore, if there should ever happen in the future like what happened with the SEC emergency injunction against Zeek, there will be a process that will have to be done first where they would have to go through a series of steps going through the law firm first that fully understands the business model.
In other words, what happened to Zeek Rewards on August 16 which was a major mistake by the SEC, will never happen again.
Thank you
IMHO it’s all a smoke screen. Got an email from a friend that had the info about the call and the SEC being clueless. I think the so called Zeek “leaders” are simply trying to set up the faithful band of lemmings and accomplices to go with them to the next Zeek-type program.
All they need is a little time to start or take part in the next big thing, get their followers to follow and the money rolls in so fast (as we saw in Zeek) they make a big quick pile of bucks before it falls as well.
They know exactly what they are doing. Using gullible people.
@Jangles
So jangles, I take it from the bitterness in your post that you are an irresponsible idiot also. Got suckered into Zeek right? And lost all your money?
Lose the attitude and learn from you mistakes and quit being a blind sheep.
Darrell, you missed the point. Get over it…
Many thanks to Norway, Chris, Chang, Oz and others for your insights.
After getting another update from the up team here in Florida, I’m scratching my head. Are these people trying to raise money for legal protection in case they become targets, or do they actually believe Zeek will be vindicated and they’ll be making big commissions again?
Supposedly the SEC has admitted to FunClub USA, LLC’s new but unnamed legal firm they may have jumped the gun. These unnamed lawyers told Robert Craddock that the SEC is looking for a way to back out of it.
The Florida group also advises not to listen to the talking heads because they are trying to “drive up controversy” to get more views on their websites.
Uplines/downlines can be very nasty, just received a nasty email full of name calling just because I declined to be a part of any company that doesn’t promote retail and have tangible products.
My days of ‘pie in the sky’ MLM’s is done. My belief that it takes hard work to make money is back and there’s no easy road to millions.
Thank you again to Oz for providing this site and helping everyone to open their eyes to the truths and to recognize scammers as they come along. Listen to your gut and if it says ‘red flags’ listen to it and don’t listen to anyone telling you otherwise.
The more they are try to be convincing the more I suspect untruths in their words.
And they’re not talking heads themselves? Or even “Craddock” guy is not a talking head trying to drive up controversy”?
What’s more controversial than “restart something government called biggest Ponzi (in terms of victims) ever in the US”?
Yeah, right, like SEC would just randomly drop hints on outside lawyers who hadn’t even taken on the case that “go ahead and sue us, our evidence sucks”.
If SNR Denton knows the case’s that weak, why didn’t they go ahead and sue SEC, eh? Why did they return the retainer?
The two stories don’t even fit together!
Think about it: they said only the “12 reps” will meet with the lawyers (if ever).
There happens to be 12 people who’s earning a million a month in Zeek announced at the June RCE. Coincidence?
The ONLY thing this lawsuit will do is delay the restitution process… if they EVER get into court… and they’ll get tossed out because they have no standing.
And the ONLY one who benefits from delaying the restitution are the top earners.
And any one who donates to this lawsuit is basically PAYING for the privilege of DELAYING their own restitution.
Zeek is dead, and it will never rise again.
The purpose of the fundraising is unclear, but they collect both money and downline information. The new money donation link leads to dreambiz.net/registration
Tood Disner –> Dave Kettner was part of the core network in Zeek, with more than 500,000 members in downline. They will first of all protect themselves and others in the same group. When it comes to HOW Zeek was run, the core network had probably similar rights as Paul Burks.
Robert Craddock? I believe he works for Greg Caldwell, for Caldwell’s company White Hat Solution or its’ division Direct Sales Compliance Management.
Caldwell is a Private Investigator and “general problem solver” with different ypes of security as his main field of expertise, with NWM/MLM businesses as typical clients.
Craddock has the same type of clients, and works mostly with IT/Network Security (since late 1990’ies or something). I’m not 100% sure about Craddock, whether he is self employed or employed by Caldwell.
I believe Craddock works for Caldwell, and Caldwell probably still works for Paul Burks AND the core network, directly or indirectly. Caldwell and Craddock were hired by RVG around February 2012.
I believe Craddock’s role as a top networker in Zeek was fake, that they created a position for him in the network to allow him to “blend in” with other affiliates. He also worked as an independant consultant for RVG/Paul Burks.
In my opinion, Dave Kettner isn’t very skilled when it comes to making up stories, but it’s possible his stories works better on a group of people than on individuals.
I have read a couple of his emails to people in downline, and he clearly has a lack of talent for factual details. I believe they have lost many supporters because of that.
White hat my left buttock.
The fact that such a lying, self-serving so-and-so can use the term “white hat” in his company name is irony of the first degree.
*blows raspberry at Caldwell*
*not saying from whence that raspberry is emerging*
Exactly. It seems so clear to all of us but it is just unbelieveably how many affiliates are delusional.
Case in point…Friday was the first time I’ve seen the guy who was our sponsor two levels up, really nice man, and since we are in the same business, our paths will be crossing frequently.
I again stressed to him the damage he’s doing by perpetuating this lawsuit promotion. He thinks he’s just keeping people informed.
I told him he may be opening himself up to lawsuits, etc. if he continues to do this. He feels confident that won’t happen because he said the #1 thing he’s gotten asked, “Hey, do you know of another opportunity we can get involved in?” W-H-A-T?????
This is shocking, esp in light of the fact that one of the people he told me said this was a guy who had put in $10,000 three weeks before the collapse, and the guy is no whacko, a very sound businessman, man with an excellent reputation in the community, etc.
So, I give up on trying to “inform” people. They’re on their own.
Kettner was promising 1.2% daily return on Zeek Rewards back in July 2011. Before then, he was involved in TVI Express pyramid, and its clones like Diamond Holidays and Club Seabreeze, and sells vitamin chews.
http://2.bp.blogspot.com/-QDoGEP0fR-M/T9rAVQdaNmI/AAAAAAAAB30/Yx8wgM83aBo/s1600/100+In+Free+Bids+.png
Thanks again gentlemen, your rational explanations are convincing. I continue to be amazed these top people, the “core network”, are still perpetuating this hoax.
It does make sense they’re trying to delay the restitution process. But persuading their downlines to contribute to a delay is simply mind boggling.
A friend who had over 3000 affiliates in his downline told me he was making over $4,000 a day. I think and hope he believed the money was coming from the penny auctions and not the new members.
But he repeats every excuse,like the (SEC didn’t understand the business model. And every week he says, Zeek will be back in business in just a few more days.
Do guys like him have something to worry about? I can’t believe he hasn’t seen the light yet.
littleroundman,
Paul didn’t seem the type to be a scammer. Have you seen his meek house? Have you seen the way he meekley dresses? And his wife as been very ill. And what about his age, and the way he carries himself? It never appeared to me that he was the type to scam, lie, take the money and run.
Then I heard that he was distraught over getting s speeding ticket recently. Distraught over a speeding ticket?
Apparently Paul Burks is a kind of soul that won’t battle the big guns. That’s a theory anyway, just a possibility.
His means of living sure doesn’t add up to the type of guys who scams, then takes the money and runs. Point is ultimately, WHO REALLY KNOWS?
If he made more than he put in, he’s gonna see a clawback. The real kind (like Bernard Ponzi’s trustee Irving Piccard, who clawed back BILLIONS of dollars), not the wishy-washy misuse as by Dawn.
The problem here is you’re mixing up a fact and an opinion.
It is true that Burks lived rather humbly. However, using that as evidence that he doesn’t “seem” a scammer is bad logic.
Nobody believed Madoff was a Ponzi schemer either. He was head of NASDAQ for a while! He pioneered electronic trading! He had been in business for most of his life!
This is hearsay. Where did it came from? The same upline who told you Zeek is not a scam? Or did it came from Craddock?
Or Burks is playing part of a meek businessman shamed on the advice of his attorney, whose record indicates he’s one of the best attorneys in NC.
Or Burks was bamboozled by Darryl Douglas and Dawn Wright-Olivares into turning the whole thing into a Ponzi, and he’s taking the fall for the other two, and is now cooperating with the SEC and other Feds to make sure EVERYBODY goes down with him.
There are PLENTY of theories that makes as much, if not more sense than “Burks is innocent but meek old man don’t wanna fight the evil government.”
How “recently” was this any way?
You did read the part that his lawyer claimed he had a “period of cooperation(with the SEC)” before August 17th, 2012, right?
The SEC knew about this scam for a while. He can’t hide.
Deal with FACTS first, then extrapolate based on facts.
“Presumed innocence” is moot when defendent already plead no contest.
@Red,
You have to understand one simple point, con artists who seem shady and disreputable either aren’t doing their job or will soon be looking for a new one.
It’s less an issue of hiding how much of a dirt bag you are than highlighting the ways you aren’t a dirt bag. It’s sorta like holding in your beer gut when a pretty girl walks by, only for money.
I’m sure Paul has many fine qualities but he also lacks the willingness to not run a ponzi scheme. He’d been using his slow southern charm to run just below the radar pyramid schemes for better than 14 years before Zeek Rewards launched him into the spotlight.
I don’t think he was ever comfortable being on the big stage. Spotlights bring attention and he knew sooner or later the wrong kind of people would be looking at him.
He started cooperating with the SEC well before the websites went dark, what that tells me is that he had far fewer illusions than many of his loyal followers. Cutting a deal at lightning speed only seems to confirm that.
@Jim
No. Craddock and friends just made it up, that’s why they removed it shortly after initial publication.
Turns out making up porkies about the SEC isn’t a smart idea. Whodathunkit?
I am new here, so sorry if I do not follow the rules. The big question I have is based on your post. I have heard it in other places (forums). Could the Soverign citzen movment be the “International ponzi” Group?
If this is correct, the FBI has has said they are a domestic Torrorist group. Do we really want to be involved with some group who is anit-america and anti-world?
@Red
Having a “meek house”, your “means of living” or worrying about speeding tickets doesn’t define you as a scammer.
Telling people your company pays out a daily ROI from penny auction profits when it’s just you sitting in an office fudging the figures up each day from newly invested member money does.
Why enter a battle you can’t win. There is no justfication for being at the helm of a $600M Ponzi scheme.
@therondo
Ah, no. And for more than the two reasons I’ll give you.
First off there isn’t “A” international ponzi ring, more like a number of small groups that sometimes join the same scheme but usually are running their own games competing for the same money.
With all due apologies to Mr. Dooly, anyone who says otherwise is being rather fanciful.
And sovereign citizens are even worse at working with each other. Their “gurus” all want to be the one unquestioned leader but their dogma is built on the notion that each and every person is their own sovereign.
A small yet not insignificant percentage of them are violent lunatics but by and large they have a hard time organizing, well near anything.
From time to time I check in on “President” Tim Turner’s Republic for the united States just for comic relief. I assure you that anyone claiming to have restored the “de jure” United States but who can not maintain an organization in the “Republic of Texas” isn’t worth his weight in UCC-1 liens.
I did not ask for an attack. I m only aksing a question based on the facts. If you would like for me to provide them I shall. But dont attack me, I dont know you and would not like to respond in kind. Thank you. 🙂
(Ozedit: no idea what publishing links to information on the Sovereign citizens movement without any specific commentary or reference was supposed to achieve, links removed)
So, There is “no” International Ponzi schme’s?
http://www.fbi.gov/scams-safety/fraud/fraud#419
What a sheltered world you live in! Sorry, but i had to add that in. I really felt insulted for just making a comment on a post. I have more information that I collected and would share as long as no one would attack me over it.
Sorry but any person who was involved with zeek or ASD is someone that was scammed! But I was also a zeek supporter for about 3 days until I realized that 2 + 2 did not equal 1,000,000.00
That link shows direct persons related to ASD who are also involved in Zeek. If you would, like tomorrow I can provide you a more detailed investigation of those persons as well as there link to the Fun Club USA.
By all means do that, so long as it’s related to Zeek Rewards.
One was a Wikipedia link however, which had nothing to do with ASD, ZR or Fun Club USA. No reference or commentary was provided accompanying the links.
If you want to publish links incorporate them into the discussion and explain why you’re publishing them.
Doubtful. They appear to be localised to the US. The term “international Ponzi group” refers to players operating in a co-ordinated effort from multiple international locations. Not just a bunch of people based outside of the US.
No doubt there are Ponzi groups (long-time ringleaders with downlines) that jump from Ponzi to Ponzi. Usually they make a bit of money and then jump onto the next horse, wash rinse and repeat.
What seems to have happened with Zeek (and ASD) is that a few of them made too much virtual Ponzi profits to walk away from. Now for whatever reason they seem to be under the impression that legally they can keep ZR going.
Of course they’re not confident enough to fund it with their own money, so they’re appealing to their downlines to cough up. Money makes people believe stupid things…
@therondo
I’m not sure what you took in my post as an “attack” but I am sorry if you took it as one.
I am aware of sovereign citizens who were involved in ASD, more than one in fact. Curtis Richmond is the one who best springs to mind, he filed some sovereign gibberish motions with the court and charged people only a modest sum for blank copies of his complaint so they could file them too.
The Judge dismissed them en mass but Curtis doesn’t give refunds.
Scams are coin of the realm in sovereign circles. The “gurus” usually ask for money to teach you the magic words which make you immune to courts of law only it never works out that way.
Gullible and sometimes desperate people fork over hard earned money for nothing more than mythology. And when the magic doesn’t work they usually blame themselves for not performing the ritual correctly.
I’m not sure how much interest there is in this room for a more detailed discussion of sovereigns and their scams, but there is a message board called Quatloos which is fascinated by them.
That being said I am very interested in any information you care to share about sovereigns involved with Zeek. And again, sorry if my previous post came across the wrong way.
You can’t “turn” a business into a Ponzi unless you’re actually running it.
The only people capable of “turning” Zeek into a Ponzi are the people who decided its business model, and that would be Paul Burks, Dawn Wright-Olivares, and Darryl Douglas.
Unless Troy want to explain how someone he posed photo with cheek to cheek is member of Intl Ponzi Ring, I’d say his theory needs… further refinement.
Thus, there is no “Intl Ponzi Ring”.
Furthermore, sovereign citizen folks couldn’t care less about the government… UNTIL they did something to rip people off. Then their victims went to the gov, then it’s “I have rights and government is trampling on them!” (trans: my rights are what I say they are, none of “your” laws applies to me!)
From what I can tell on Troy’s videos, he thinks there is an international Ponzi ring, and that there would be RICO charges coming soon, based on a single fact – that the SEC’s counterpart in Canada (the CSA) was involved in the Zeek takedown.
This was addressed previously as follows:
In reply:
Denial is an incredibly powerful force.
Paul Burks is clearly a conman himself. They come in all shapes and sizes, and will usually use their own style rather than following a “Conmen’s 101” recipe.
I have had ONE indirect dialogue with Paul Burks through Troy Dooly, on a topic where Troy needed assistance from Paul Burks to answer some questions, and Paul Burks clearly tried to mislead me in different ways. He used methods worthy an experienced conman.
There isn’t much doubt about it. He’s clearly trained in misleading people, and it’s also possible to recognize known conman methods from time to time. It’s possible to identify changes in strategy during the dialogue, when one strategy fails he immediately comes up with another. That requires experience far beyond normal business experience.
The diaølogue happened around July 27th or 28th, and was about the tax issue for 2011 and the RPP / “Cash available”. He clearly used different methods trying to mislead me, so the dialogue was very confusing.
The dialogue can be found in another thread, but it’s clearly confusing and not worth reading unless you’re interested in analysing methods for misleading people. I was focusing on the tax issue itself, not the methods.
Paul Burks is a tough opponent rather than a meek business man. He is clearly skilled in misleading people, with years or decades of practice. And he clearly knows what he’s doing.
There still could be RICO charges… for the top shills.
A Ponzi is a lie. They say they work a certain way, but behind the scenes they do something else, often, nothing at all. It’s fraud on multiple levels.
A business can BECOME a Ponzi… but only if the leader choose to deceive the public and lie.
Charles Ponzi claimed to arbitrage International Reply Coupons. He did not do so.
Bernard Madoff claimed to manage 100+ billion dollars for the riches people in the world for no fee… as long as his name doesn’t appear anywhere. He didn’t invest or manage, but sent fake statements to everybody claiming he did.
Only someone IN CHARGE of the business can make the FUNDAMENTAL DECISION to lie to the public about how the business actually operate (or not operate at all). Thus, the external influence theory makes no sense at all.
Furthermore, how does external influence benefit? Ponzi scheme is fraud that doesn’t move money much. By paying out more than they should, the net balance can only increase if they bring in more new people who put in money than they pay out.
The only way for “external Ponzi ring” to benefit is for them to join very early and take out money early.
In other words, Troy’s theory only works if you count all the ex-ASD as part of a conspiracy to restart ASD by convincing Burks to run ZeekRewards as a Ponzi just like ASD. It ain’t international.
I have pointed out that Paul Burks is an experienced con artist himself in another comment, currently waiting to be moderated. That impression derives from an indirect dialogue with Paul Burks himself, through Troy Dooly as a middleman, but on a topic where Troy needed assistance to handle the questions.
But to make Zeek work as a Ponzi scheme, he needed lots of assistance from experienced Ponzi riders, from people much more qualified than his own team. So I wouldn’t be surprised if some of the former ASD-players are partners rather than participants.
There’s little doubt about Paul Burks being experienced. I’m experienced myself, e.g. in how to detect when other sales people tries to mislead me.
Burks clearly knows how to handle a situation and mislead people, and he’s also able to rapidly change or improve his own strategies when it’s needed, and that requires years of experience to master.
I have published a comment on Troy Dooly’s website, where I’m pointing out his lack of “quality checking” before publishing materials that potentially can be misleading to the audience.
He has a long history of publishing misleading articles and comments about ZeekRewards, and he continues to use the same strategy after the shutdown.
He will usually try to cover his ass by publishing some opposite info, e.g. both “Good news” and a statement about “Zeek is dead”.
In my next post there, I’m asking Robert Craddock to make comments himself rather than hiding behind Troy Dooly, to avoid more misleading information.
I am not familiar with Troy’s track record since I have only been following this site, his and several other of the contributors here, since the Zeek shutdown in mid August.
Having followed both sides, pro and con, it has become very clear to me that Troy’s articles have no real foundation in fact when it comes to the really important bottom lines.
Also – M-Norway, excellent response on Troy’s site, BTW.
The point that stands out to me through all of my reading of the blogs over the past few weeks is that Troy’s articles seem to be knee-jerk reactions to something, with very little foundation. On the other hand, the “skeptic sites” basis is factual, of course, sprinkled with opinions and comments, of course. But for someone like me who is trying to sort out this mess – Give me facts!!!
As an ex-affiliate, that’s what I want for the friends who are affected by this. Troy does not get the benefit of the doubt as far as I’m concerned. He’s a so-called professional, who should know that you don’t publish a copy of an e-mail of someone else and then publish it with no huge disclaimer that it’s totally hearsay. side.
That’s exactly what my upline people are doing when forwarding this garbage to “our team”…hiding behing the lame excuse that they are trying to keep people informed. No….keeping people informed is present both sides, but present neither until you are sure of the facts.
Heck, even I knew that yesterday when I was careful to edit excerpts of an email I got, because I knew it was hearsay, and worse, hearsay based upon lies. It gets no worse than that.
Troy seems to think that he’s been responsible because the comment section finally gets around to presenting the “other side.” What about the folks who only watch the videa or read the main points in the article, thinking those wild accusations are fact?
You all say he has a track record for this behavior. If indeed that’s true, I can’t imagine how the guy has the supposed great reputation he has.
At this point, I don’t care except I do know that people listen to him…two of my friends signed up in Zeek because of his cheerleading. I didn’t even know who Troy was till my friend told me.
I would speculate that 99% of people won’t get in and dig around like I did to try to get answers. They are just going to continue following the Pied (Sp?) Piper off the cliff. Thankfully I’m not on that path. And honestly, I’m pretty much over worrying about anyone except myself and the few close friends I got into this.
When I first started visiting this site, I thought, geez Louise, guys, give Troy a break! Now I see what the fuss was all about.
And sometimes we vent when we hear stuff like this (from the “Affiliates United” FB page this morning by a Rob VanPelt):
It appears the admin/moderator on that FB page was having a bit of a meltdown this morning, likely because of the amount of legitimate concerns being expressed after their Saturday update. The above quote was in response to the admin/moderator’s little pity party.
Personally, if I were in a jam and needed someone I could depend on I’d feel much more confident with 10 Home Depot associates on my side than 100 delusional Zeekheads in my corner!!
Yesterday in comment 173 I posted copy of email from my upline about a conference call that was going to be done today (Mon 9/10), and that email was addressed to the Zeek Core Group. I raised the question, who is the Zeek Core Group?
At first I thought maybe they were referring to those who donated or were following the TeamBiz site, but after thinking it through and reading Oz’s comment later, it was apparent the Core Group is the little Founders Club, ie the 12 who are the Plaintiffs in the suit against the SEC, being represented by the Law firm of Who The Heck Knows Who we Are, Esq.
Anyway, guess we know now who the Core Group is. Just opened my email this morning from my upline and it’s an email from Todd Disner saying, ooops, I sent the email to the entire group by mistake. I only meant it for my partners in crime. (Paraphrased of course).
Well, you read it…you decide… here it is.
You know, the so-called “leaders” are worse than the corporate heads. People like Burks and his 2 sidekicks ran the scam but those at the top that made a killing and had the big downlines have a criminal mentality.
They know how to participate in this type of scam, get rich and probably dodge prosecution knowing all along they are stealing with a Ponzi program.
As some of you have so well stated, I hope the government goes after them from the highest earner down for a while seizing whatever cash and assets they can and placing liens and judgements on what they bought with the stolen funds.
They must know this is potentially coming and that is the reason to get others to chip in for some pricey lawyers. Using other people again.
Jim, in total agreement with you. All I can say is I’m beginning to see how incompetent they really are. As an ex-affiliate, I know I was very frustrated with the lack of news coming from the corporate level as to how to do this and that. All updates were either from Todd or Dave.
Towards the end, my frustration was turning to “something ain’t right here”, and then the collapse.
Hopefully they will get more desperate and make more mistakes, like sending out confidential emails enmasse, enough mistakes that they will hang themselves.
Seriously, though, these guys are unbelieveably incompetent. Which is why I don’t get how they’ve been able to evade the law this long. Maybe cause the other schemes fell below the radar of the general public’s scrutiny because they were on a relatively small scale.
Whether they like it or not, because of the sheer size of the Zeek Ponzi, it’s getting public scrutiny and no doubt way more Secret Service scrutiny.
Side note – Todd needs to proofread and be careful before hitting the “send” button. Another Todd, Congressman Todd Weiner, made the same mistake and it was his undoing. 🙂
Correction – it was Anthony Weiner…. not Todd Weiner… same principle, though. Don’t hit “send” till you are sure. All of us have done it, of course.
ZeekNoMore, I think they are that sloppy because they have no fear of consequences. A few years ago there was this superphone coming out and everyone was foaming at the mouth to jump into the program.
I called the North Carolina AG office and asked about it when the complaints were starting to come in. This staff person said flat out that there were so many MLM type programs out there and starting up every day that they simply did not have a fraction of the resources they need to keep up. That has to be the way it is in most states.
That’s why the government needs to make a serious example out of these new schemes like Zeek. Fear or arrest and loss of money is the only thing that could slow these things down to any great extent.
I have a question. I have posted maybe a dozen times on the various Zeek discussions and wanted to see how to use a quote from another post when I want to reference it and reply. It’s in Green background. Do I simply click on quote? Thanks for the help.
I highly doubt that Disner’s “errant” email was a mistake. More like an intentional leak to maintain momentum.
I will acknowledge that I have nothing to base that opinion on other than Disner’s past record and my own healthy skepticism.
Yes, it’s called consequences. As the mother of two adult children, and three grandchildren, it’s a necessary lesson to learn in life. If you don’t discipline, you get brats who do whatever they want, when they want. These “brats” get away with it because there are no consequences.
As to the quote, being new I had to ask the same thing a few weeks ago. First, highlight the material you want to quote, then click on “quote” and it magically appears in the text box. 🙂
Have a look at the following. Especially the symptoms. When you hear all the phony edification on opportunity calls it just fits right in.
The part about no empathy is what is so disturbing because they have no remorse for who they screw, such as the Zeek top earners. I call them “Business Scam Narcissists”.
Thanks!!!! You-Da-Man!!!
“They” weren’t incompetent at all.
In fact, on the contrary.
“They” collectively managed to trick a million plus people into giving them over $600million for something which never existed in the first place.
Sounds pretty competent to me.
What’s more, until people accept the fact Zeek was a fraud from the start, then “they will continue to be able to find more victims for their fraud/s.
Actually, I may be one of the few females who post here, so technically I’m “Da Woman” or “Da-Grandma”. 🙂
Oops!!!! Sorry. By the way, I really do like and appreciate intelligent women. They’re so much more interesting. Please keep posting.
The most serious point is his publishing of the NMBJ review in February or March 2012, with information he clearly should have known was misleading.
NMBJ = Network Marketing Business Journal, published by Keith Laggos. The review was a marketing attempt by Zeek, trying to “outweight” negative information.
It was probably written by Dawn in most parts, and Zeek paid for it by ordering $100,000 worth of copies of NMBJ (according to Dawn/rumours).
Troy published it as an article and a video, quoting NMBJ directly, but without adding his own knowledge about how misleading some of the information was.
I have later found that article/video on several Zeek affiliate sites (among other misleading articles/videos from Troy Dooly), used as an important marketing tool to convince people about the legitimacy of ZeekRewards.
We all know by now that Keith Laggos also had a role as an affiliate himself, but Troy failed to reveal information about that.
I have considered Troy’s responsibility as a publisher to be the main issue here. The material was clearly misleading when it was published, not because of the content it had but because of the missing information (e.g. doing a quality check, and publishing it in the same article/video).
“Quality check” means doing a check of the content itself, rather than checking the sources, and checking it for misleading information (e.g. fake customers) before publishing. Troy fails miserably on that point.
“QUALITY CHECK”
I have done some kind of a quality check here, “checking different sources”:
* I saw the review when it was published, and I have also made comments about the content.
* I have read comments on MlmHelpDesk, from people who were misled by it by Zeek affiliates.
* I have googled and found affiliate websites where the material has been used in a misleading way.
Normally we are expected to do SOME kind of quality check, and checking different sources with different viewpoints is ONE of the methods that can be used. Checking a person’s status or reputation is NOT a very good method if it isn’t combined with more qualified methods.
As an example, I would have improved the quality of this comment if I had linked to the sources, but I will probably have to spend around one hour finding them. And you asked for information rather than “proof” and sources.
OTHER ISSUES:
I have a long list in memory for where he has acted misleading in articles, videos or comments.
A couple of examples, from my own experience:
* Insisting on “Unique bid auction niche” for ZeekRewards and other penny auction MLM. In normal business logic we should usually define a company from its’ core. The penny auctions was only a minor part of Zeek, not the core itself. The core was the network part and the “compounder”, with all the money coming in from affiliates.
* The focus on “Gaming theory” and “Gaming addiction theories”, to explain why the penny auction was able to support payouts to a huge number of affiliates. The theories becomes meaningless when a company doesn’t have much customers that can get addicted. Normal logics would have worked better than theories, but he ignored normal logics when I tried to explain it to him.
Since Zeek already has collapsed / been shut down, it’s easy to establish that his theories were misleading when he published them in articles, videos and/or comments. He is no longer covered by the uncertainty about it, that his theories COULD have been meaningful.
*******
This time I have separated different actions from each other. It means I have ignored his attempts to cover his ass by publishing statements pointing in other directions. I have only focused on whether or not the published material is misleading, and whether or not it has been used by others to mislead people.
It means I have partly analysed Troy’s strategy in previous comments, where he frees himself for responsibility by showing that he has covered his ass in some way or another, like in quoting other sources (e.g. using NMBJ as a source).
Most publishers will do MORE than that when it comes to verifying material before publishing, so his strategy doesn’t really cover his ass.
This type of analytical breakdown is way out of my field of expertise, so I’m always appreciative of those of you who have that ability because many times in the past few weeks I’ve seen where my knee-jerk, emotional response to things has been flawed and frankly, I enjoy being proven wrong if I learned something in the process.
The main point I’m drawing from your response is anyone who is in Troy’s position has the tools, the background and experience to conduct an analysis of biz models, etc…in fact, it’s what he’s supposed to do.
Furthermore, when he doesn’t utilize those tools, it’s a great disservice to folks who rely on him. It’s a great responsibility. Sadly, responsibility isn’t always dealt with responsibly.
LOL, as if you need to pay an outside company to set up a “support” forum.
Basically, he turned himself into the equivalent of ‘tabloid news’ in the US, publishing things like ‘Elvis is an alien’, ‘(insert celebrity name) on deathbed due to drug habit’ and so on.
When questioned, they conveniently point at some other source, and claim “I just printed what he said.”
http://en.wikipedia.org/wiki/The_National_Enquirer
Wow, that about sums it up. Well said. And according to that, Troy Dooly has then clearly been a waffling, floundering, obvious failure in regards to Zeek Rewards.
Just playing devil’s advocate here…
Is it not possible that Troy Dooly is just “a guy with a blog” to whom a sizable number of people give an unwarranted amount of credibility or authority? And if people grant him that authority, is that his fault?
I’ve seen this happen in quite a number of industries. If you look at the Bio page on his site, he claims to be an “influencer” but not an “expert”. He says:
None of those aforementioned things indicate that he claims to offer unbiased analysis or expert opinions. He is a guy with his own perspective and set of experiences that throws stuff on the wall as a “publisher”.
Don’t get me wrong, I’m not necessarily trying to defend Troy. His publishing style, communications skills, and incoherent arguments drive me insane. But sometimes I wonder how much of his apparent influence over certain people is the result of his own efforts vs poor decision making on theirs?
I had never heard of Troy prior to this whole Zeek saga. But from the moment I started reading/viewing his stuff, my impression was much more along the lines of “crackpot” than “expert”.
Trying to be fairly kind…I don’t think MLM overall attracts the cream of the crop in the first place.
As reported by Jordan Maglich (attorney/expert on Ponzi schemes and white collar crimes/contributor to Forbes magazine):
http://www.ponzitracker.com/main/2012/9/10/sec-admissions-of-weakness-in-zeek-case-inaccurate-tactics-a.html
It’s a combination of both factors. Many of the people who felt mislead by him were actually mislead by their upline, with Troy Dooly as an additional tool to convince them — by linking to some of his videos from other websites.
Troy has tried to mislead me several times, but now it’s better to put a stop to it rather than continue to accept it. For me, his role as an “influencer” is more like a bad habit than something useful.
Mr. Dooly thinks of himself as neutral even though he’s actually pro-Zeek, repeatedly endorsed Zeek as “honest people”. However, his words can be interpreted by people seeking confirmation as endorsements.
It’s a lot like playing politics: each side will seek the message they’re looking for in Dooly’s words. However, most of his words are playing toward the “affiliates”, who are looking for approval / endorsement, not dismissal / condemnation.
Mr. Dooly’s problem is he got a bit too close to the players, and is no longer an objective observer that he thinks he is.
His involvement with Dawn, Burks, and later Caldwell (and by extension, Robert Craddock) lead him to continue his pro-Zeek stance even AFTER SEC shut Zeek down where he offered his own theories like “Intl Ponzi Ring” with little proof to back them up, and all the theories basically fits his own stance (i.e. Zeek… was a fine company.)
It takes NO imagination to say that SEC is NOT happy with the amount of rumors flying around out there, spread by Craddock / Kettner, and further reprinted by Troy Dooly and spread by desperate affiliate spammers hoping for support. (At least three attempts to spam my hubs were observed, always presented as “please comment, here’s the link”)
Jordan Maglich has access to SEC, and he’s a lawyer, so you have to take his written words with a grain of salt. When he wrote “disagree”, “false”, what he probably meant was SEC guy read the sort of sh__ wrote about them by Craddock and Kettner, and was either angry, or act bemused, as in “so that’s the sort of sh__ they’re writing about us, hmmm?”
Don’t forget the first real warning sign that we saw that proved dishonestly from Zeek / Paul Burks – the non-existent OFAC sanctions.
From that point forward, Troy Dooly should have “trusted but verify” the data coming from Zeek. The fact that he accepted the lame non-answer from Zeek on the OFAC sanctions for months, and then eventually just capitulated and said “I don’t know what that was about” shows that he is NOT neutral and NOT objective.
There were many signs before the OFAC sanctions that the information Zeek was telling the public was not representative of the truth. But the OFAC sanctions was the first concrete evidence that should have led Troy down a different path of analysis.
All the information afterwards (such as bank account closures, credit card processing woes, etc.) could have been vetted by Troy with the proper objective viewpoint if he assumed they could also be lies like the OFAC sanctions were lies.
Not the least of which was that Zeek was able to pay 1% or 1.5% per DAY ROI.
I mean, c’mon now, what self respecting MLM guru could get past any program he/she is reviewing offering ANY percentage per DAY ROI without choking on his/her cornflakes ??
Talk about Mr Dooly ignoring the elephant in the room.
Forget about all the minutia, THAT’S where the problem always was
That, and one other thing.
I’ll never forget the first “in depth” conversation I had with a Zeek Affiliate. A nice, meek fellow who was genuine in his excitement and belief in the “opportunity”.
I’d read up on the scheme by the time we met, and I guardedly listened to his pitch. After the usual “this is different”, “you don’t have to recruit”, “so and so is making $XXXX, he showed us his check”, “I’m up to $XXXX and I’ve only been in for two months”, I slipped in a question.
I said “But what do you do?”.
Insert the sound of Crickets here.
The fellow looked at me like I’d asked the question in a foreign language. So I asked again, and helped him this time. I said “What do you DO? Don’t you have to place an ad, give some stuff away? You know, what do you do to earn this money?”.
He replied “Oh, well yeah, but they have a service that you can pay them to place your ad each day for you. And I’m busy and kind of forgetful so that was perfect for me. And the bids we give away, we can let the company give them away for us.”
I told him “Oh, I understand”. And I did, in an even broader sense than before our little chat.
To add to litteroundman’s thought, “Zeek was able to pay people 1% or 1.5% per DAY ROI., FOR DOING NOTHING”.
THAT’S where the problem always was.
And that’s why the Zeekers want Zeek to come back. They were “making money” for doing nothing and want the big payout.
My question is, what are Craddock & friends going to say after their lies about the SEC admitting they “made a mistake” and are “trying to find a way to back out” of the investigation are shown to not come to fruition?
After time goes on and the receiver is still investigating and sorting things out, they’ll eventually have to come up with a new lie to explain why the SEC hasn’t dropped the case and let Zeek go back into business.
They’ll have to say something to keep the gullible idiots to keep pouring money into their “legal fund.” It’s not like they can use the constant mantra of “growing pains” like Zeek management & faithful lackeys always did.
I keep thinking we have the makings of a great country music song here. Something along the lines of “My Cash Cow Up and Died”.
Troy admited the bids were not used in the auctions in a comment on his site. That alone proves the business model is a Ponzi if true.
They will say it is all the faults of affiliates and critics who kept calling the SEC and pushed them (the SEC) to admit publically about their wrong doing. SEC must save their face, so they are now forced to fight until the end and cannot back down now.
So, folks thanks a lot for not trusting us, and calling the SEC to get verification, now we have to fight even a harder battle now. But we stilll can do it because we still have many of you out there who are truly blieve in us and who truly want to protect this business.
Something along that line will be pulished soon, and those who choose to believe will always believe no matter what excuse Craddock and his gang come up with.
@lane
What are you talking about, the complaint clearly states 0.25% of the bids given away (the bids purchased by affiliates) were actually used.
I think you’re confusing consuming with purchasing. “Self-consuming” = affiliates purchasing the bids, as opposed to retail sales to genuine customers.
@Oz
That second paragraph was from Troy not me. I didn’t block quote, sorry. He was admitting that the bids were not used.
Well Troy needs to go back and read the SEC complaint again then.
Even now I don’t see how Zeekers can claim with a straight face that Zeek Rewards wasn’t an investment when they were putting money in, doing nothing (by paying someone else to post their daily ad and give bids to customers) and expected monetary returns on the money they put in.
This is what the SEC was talking about when alleging (true allegations, as it turns out) that Zeek was selling unregistered securities (investments).
Oh but the SEC got the number of affiliates and the amount of Zeek’s various bank accounts wrong. They couldn’t possibly be right about the percentage of bids being used.
I heard they also used slightly off-white paper to print the complaint at one point too.
QUICK BURN THE COURTHOUSE TO THE GROUND DOWN WITH THE SEC$!!%!55111
I looked at the bidding and saw about one third of the items on the screen that were bid way over their retail value. Therefore, it was obvious there was some fake auto-bidding going on to give the illusion of the affiliates money being spent as they promised they would.
One concept I have not seen anyone talk about at all is what do the Zeek internal records have (I hope the SEC reports this)as to the actual amount of product that was bought, paid for and delivered from the auction site? I’m sure those numbers are a joke and would clearly expose the other half of this scam.
If the SEC didn’t nail Paul Burks, you wonder if someone on the inside may have done some whistle blowing if the scheme grew larger?
http://www.washingtontimes.com/blog/inside-politics/2012/sep/11/irs-pays-104-million-whistleblower/
Hi Oz,
In the ASD case, some of the cheerleaders argued that:
* ASD could not be a Ponzi scheme so long as it has as little as $1 in external revenue.
* That ASD could not be a Ponzi scheme because the world’s birth rate exceeded the death rate.
* That the presiding judge was operating a “Kangaroo Court” and that the chief judge in the same district also was operating a “Kangaroo Court.”
* That the prosecutors admitted secretly that ASD was not a Ponzi scheme and were clinging to the case in a bid to save face.
* One ASD story mainstay recently has argued that his arrest must be invalidated because his name appeared in ALL CAPS in court citations.
PPBlog
New Zeek 2.0 The reciever wont be able to confiscate any payouts from the two third affiliates from outside the U.S.A. Which does not matter because the sec told craddock that they cant find any securities and or one lonely victim and might of improperly closed zeek.
This will change the mlm industry for ever and zeek will come back better than ever blah blah blah blah nonsense.
I think I’ll call that “martyrdom defense”, a close relative to the “heretic defense”.
In “heretic defense”, they insinuate that they look like a scam, but they are actually the exception, and there were a lot of “heretics” that turned out to be right.
In “martyrdom defense”, they they blame the affiliates for not trusting them (which was the theme all along, from the toilet-paper to the hamburger analogies) and they are not a scam despite everybody says they are (but they’re really an exception), and of course, “a lot of heretics turned out to be right”. 🙂
Exactly. Everybody saves money by cutting out the middleman. Why can’t Zeek go straight to AdSmartz or whatever to post the ads directly, and save MILLIONS a month?
In fact, Jimmy and I and others have long pointed out that you can hire people in say, Philippines to post ads for pennies a day. This ad posting thing is busywork and a disguise. It’s OBVIOUS to someone who’s outside, NOT swept up by the emotions, to see through this non-sense.
To use Daniel Kahneman’s explanation, victims are afflicted with “attribute substitution”. Your mind has halves: an intuitive side, and a logical/reflective side. Intuitive side makes snap decisions, based mostly on emotion, but some logic based on prrior knowledge.
The logical side is mostly logic, but requires knowledge to extrapolate decisions. When forced to make a quick decision, a victim can be “lead” to make decision with the intuitive side INSTEAD of the logical side, and the decision would be WRONG, because the mind solved the wrong problem, that sounds CLOSE to the problem that should be solved, but really isn’t.
http://amlmskeptic.blogspot.com/2012/09/cognitive-bias-attribute-substitution.html
This is a favorite claim of the “sovereign citizen” movement. Most courts put the defendants’ names in all caps, and somehow the sovereigns claim that this means court papers don’t apply to them because they don’t spell their names in all caps.
I don’t remember exactly what the reasoning is, but it’s just another (unsuccessful) dodge they try to use to get out of trouble.
Would Zeek have been “legal”…if?
1. there were real customers
2. the daily payout was not manually manipulated
3. the daily payout was based on bid consumption only
The reason for this question is that if these are the only major things necessary for an MLM penny auction to be legal, then there will be a second iteration of Zeek.
Different owners, different logos….but same players.
IMO, it could possibly still run into some issues with being considered an unregistered security.
Any legal/legit version of a penny auction MLM will definitely NOT have the same players. The ponzi/HYIP crowd has no interest in real business.
A legit penny auction MLM would require affiliates to actually acquire real retail customers that paid for and used their own bids.
As Oz has pointed out in his reviews on various auctions, so far we haven’t seen one that has succeeded on it’s own merits.
Although currently lucrative and relatively popular, penny auctions are still a niche product that will be hard for most affiliates to find customers for.
I’ll guess that any penny auction structured “legally” will probably be along the same lines as many technology MLMs like ACN, Vitel, etc. requiring a monthly membership fee where in the end most of the commissions earned come from recruiting bonuses instead of retail sales.
Like many MLMs, people will make more money selling the dream instead of the product.
Well, Troy Dooly has posted his thoughts on Jordan Maglich’s article.
http://mlmhelpdesk.com/breaking-zeek-rewards-news-sec-admissions-of-weakness-in-zeek-case-inaccurate-tactics-and-motivations-of-zeek-victim-group-questioned/
if there were real customers, what do they need you (and your money) for?
Possibly the same reason that many companies run affiliate programs.
Just another avenue for customer acquisition.
Actually, he didn’t. He just reposted it.
So they only need you (and your WORK or webspace for ads), not your money.
In other words, “kinda” like Bidify Mk. II.
Well, traditional affiliate programs don’t need your money.
Naturally, MLMs also theoretically want their reps to believe in and use the products.
For whatever reason, I like the idea of MLM.
Unfortunately, I hate the reality of most MLMs.
I just glossed over the recent Bidify changes, but if new reps aren’t part of that old Ponzi Points Pool and are just paid on sales and, unfortunately, monthly membership costs, then yes.
LOL, by post, I’m referring to the video.
Troy often does not write out his thoughts in his initial posts.
Instead, he makes us view those videos.
I mean I have to *watch* the video? (Argh!) 😉
Chris Bailey and Norway, I have to say your posts to Troy Dooly are clear, concise and very well written. Although he claims he’s not an expert at anything, he’s quite expert and dodging and spinning. I picture him with him hands over his ears saying, I can’t hear you, I can’t hear you 🙂
Even though I’ve been exposed second hand to MLM and ponzi schemes and any number of other online “businesses” for over 20 years, this Zeek thing is amazing and so appalling. It’s so sad and now pathetic that people actually believe it can come back, with their imaginary points still intact, or there will be Zeek 2.
The scam within a scam to get the sheeple to pay for a lawyer to help the the top 12 keep THEIR (sheeples) money. Yes, please I’d love to give you some money to help you screw me…again. Please just give me my beloved points back.
In case some of you read this blog…People would you walk into a lawyers office and give him money without a signed contract to represent you? So you are willing to give people you don’t know some amount of money to supposedly hire some unknown law firm to represent you without anything in writing?
The same people that hold your real invested Zeek $$$ in their hands and are trying to keep them for themselves, in hope the receiver will not be able to clawback from them, so you will receive less in the future? That will help you how?
Zeek will not return in any way, shape, form or number. Time to admit that to yourself.
Thanks Erin.
Trying to get through to him can be maddening. 🙂
I dont know if you can but you are probably helping others “get it”
Here’s something else to consider, another “sign of the Ponzi”.
When Full Tilt Poker went under and investigated as a Ponzi, it had basically did not cash checks or randomly debiting / not debiting people’s accounts for their play balances, because apparently it learned to shuffle offshore credit card processors (hey, isn’t that what Laggos taught Zeek?) and didn’t do that well, and was stiffed out of millions when one of their credit processors went under.
Now that Zeek’s closed and all the sorry details started coming out, one check processor said they have like MILLIONS AND MILLIONS worth of checks UNPROCESSED. At least 3 mil has processing errors, and I wasn’t talking about “funds in transit”.
So clearly having payment (inward or outward) problems is one such warning signs for Ponzi-ness…
This article had a nice shout out to K. Chang about the bizarre Craddock Hubpages takedown attempt, and also this bit:
This is nothing new to those following, but I did have a few relative late comers to Zeek ask me about the K. Chang/Craddock history. So let me rephrase Jordan’s sentence above:
Not only did Craddock not represent Zeek, and not only was the copyright claims wrong due to fair use, and not only did Zeek not own those copyrights (even if Craddock was acting on Zeek’s behalf as an employee, officer, or agent)…. BUT, the Hub’s assertions were correct all along.
Add in Caldwell’s condemnation of all skeptics, though primarily aimed at Oz, and you have a digital fantastic pie-in-face scenario.
Well said.
This is the precise situation contemplated by wire/mail fraud and money-laundering laws. It happened in the days/weeks leading up to the AdSurfDaily raid by the U.S. Secret Service on Aug. 1, 2008.
ASD almost certainly died prior to the raid in the sense that it feared that depositing cashier’s checks would lead to a seizure of bank accounts, so it sat on them while looking for alternatives. ASD was using two banks at the time. At least one of them closed an Andy Bowdoin-related account in the days leading up to the raid, citing Ponzi fears, according to court files.
Just prior to the raid, Bowdoin moved “several million” dollars into SolidTrustPay, according to court files. He’d basically been playing payment-processor roulette throughout ASD’s operation and at one time was using eGold, which became the subject of an investigation and criminal charges by some of the very same agencies/individuals who later brought down ASD.
ASD also advertised that it used CEPTrust, the payment processor linked to the CEP Ponzi scheme. One of ASD’s insiders allegedly was running an Oregon “religious” organization from Missouri while she maintained multiple ASD accounts. One of them allegedly was funded by money from e-Bullion, whose operator later was convicted of arranging the brutal contract slaying of his wife in a Greater Los Angeles parking garage. James Fayed was sentenced to the death penalty. His wife Pamela was a potential witness against him.
E-Bullion was linked to multiple Ponzi schemes, including the infamous Gold Quest International Ponzi scheme in Las Vegas in which a bogus attorney now in federal prison tried to sue the SEC for $1.7 TRILLION.
In any event, all of ASD’s loose checks reportedly were seized. As is the case now with Zeek, some of the members were unhappy about the check seizures, reasoning that they should have been able to stop payment. The Zeek receiver has addressed this issue under the “Frequently Asked Questions” tab on his website:
http://zeekrewardsreceivership.com/FAQ.html
The sad reality is that Ponzi = Pain. The law recognizes that, which is why court-appointed receivers seek to make sure the victims are treated equitably. Some Zeek members already are seeking to poison the well against the receiver.
PPBlog
What never ceases to amaze me is post after post after post goes into the similarities of ASD, Zeek and other Ponzis. I get it that they copycat each other because they continue to get away with it. I say “they” meaning the minions, so-called Founders Club members and the like. Seems the Presidents and CEO’s go down but the worker bees keep on keepin’ on, just move to a different hive.
My question to you experts here: Do you think Zeek will be any different because of the size of the operation? Will the law enforcement agencies, whether it be Secret Service, FBI, seek indictments for the worker bees?
I haven’t seen in any of your examples where those guys/gals have ever been arrested or had any consequences whatsoever.
Given many are the same players, maybe this time around the net can be tightened. Until such time that these people are given jail time, there will be no changes.
Clawbacks, no matter how large, is meaningless relatively speaking because they have learned how to hide accounts, offshore, etc. Sharing cells with Bubba ought to scare some of them a bit.
I’ve outlined before what I thought Zeek needed to do to become legal. First, sell bids to affiliates for a certain price, say 50 cents each. Then, have the affiliates find customers to sell the bids to at $1 apiece. Then they can also recruit other people in their downlines to sell under them which would make it a typical MLM, though they’re selling an intangible product.
Then, Zeek would need to have a decent penny auction site with actual items that people want to bid on, no cash out option, and good IT. They’d also have to make sure they sent the won items on time.
Then Zeek should use real advertising, not online classified ad spam. Help the affiliates by buying commercials on TV & radio as well as internet banner ads.
Of course, there’s not really any need for an affiliate program after all this is done, and there’s also no guarantee that Zeek or any of the affiliates would be successful. Since most people who joined Zeek only wanted a passive investment opportunity, it’s highly likely an affiliate program would fail anyway, since finding actual customers to sell bids to in what would be a highly competitive market would be actual work.
And then, of course, if someone wanted to do all this to restart Zeekler and Zeek Rewards, they’d have to completely change the name since the Zeek name is now poison. Before August 16th, if you googled “Zeek Rewards” you’d find nothing but tons of websites about how great a money making opportunity it is (with maybe a link here to behindmlm thrown in), but since August 16th if you google the same thing you get tons of news articles talking about ZR being a massive ponzi scheme. The Zeek name is poison.
This is, of course, all hypothetical because nobody wants to bring Zeek back except the gullible idiots who have convinced themselves that it wasn’t a ponzi and want their passive income opportunity back. But they don’t have the power to bring it back. Since Paul signed Zeek over to the SEC’s receiver while giving up his right to appeal, nobody does.
I have no reason to believe the ASD case is over, despite the Aug. 29 sentencing of Andy Bowdoin. Bowdoin was debriefed by the government over a period of at least four days in late 2008 and early 2009. I do not believe they were talking about the weather in Florida.
My personal view is that Bowdoin was a crook being manipulated by other crooks. Suddenly and mysteriously in February 2009 — AFTER Bowdoin had submitted to the forfeiture “with prejudice” under advice of counsel a month earlier — Bowdoin reentered the case as a pro se litigant and tried to reverse the forfeiture decision.
This reentry bid coincided with a meeting Bowdoin had with a “group” of ASD members. After that meeting, Bowdoin filed a series of pleadings that best can be described as magical thinking. The cheerleaders brought out their pom-poms and painted Bowdoin a hero standing up to the evilGUBment.
Many — probably most — of the cheerleaders didn’t know about the December 2008/January 2009 debriefing because Bowdoin never told them.
In April 2009 — after all the cheerleading and after Bowdoin was celebrated like a rock star — the prosecution went to federal court and dropped a bombshell: Indeed, Bowdoin already had admitted the government’s material allegations were “all true” and even had signed a proffer letter.
Some of Bowdoin’s principal cheerleaders later ended up at Zeek — this while an active criminal investigation into ASD still was under way and after Bowdoin was sued by some of his own members in a complaint that alleged racketeering.
It is my belief that some of the people who ended up at Zeek potentially have unresolved criminal and civil liability for events that happened at ASD and, later, at an ASD 1-percent-a-day knockoff known as AdViewGlobal.
These are the folks who turned a blind eye to the ASD fraud scheme, the AdViewGlobal fraud scheme and the Zeek fraud scheme.
PPBlog
So, if ASD isn’t over, then Zeek is only beginning or in some ways a continuation of ASD criminal investigation. I hope you are right.
What’s that saying, “It ain’t over till the fat lady sings.” I think I can hear her doing warmups backstage at the moment. 🙂
The Zeekler penny auction business is/was possibly legal as it was (I have always thought all the penny auctions were flirting with gaming laws and may be proved right on that yet, but as of now, they’re legal)
Zeek Rewards and the MLM on the other hand was a ponzi scheme, just like thousands of other ones on TalkGold, Moneymakergroup and like sites. The only way that both could be legal, is if Zeek Rewards was splitting up only the profits made from the auctions, which we know now was less than 2% of the revenue. As Bidify is now in the process of proving, pimps and whores from the ponzi scheme industry aren’t interested in leading the downline suckers into opportunities based upon reality. Reality doesn’t offer 1% a day or more, the going rate of false dreams and huge referrer commissions.
All the talk about bringing Zeek back or making it legal misses one important point, the supposedly legal spect of Zeek, a penny auction site, was just a facade put up to provide a backstory for the real business, which was an illegal ponzi scheme. RVG had a dozen employees handling (mishandling) affiliates in the MLM, and one person more or less running a clunky and poorly executed penny auction site, which in the end was having issues just sending out anything sold at auction.
Have a quick peep at The Presidents’ Financial Fraud Enforcement Task Force (FFETF)website:
http://www.fincen.gov/fraudenftaskforce.html and see if you can find any reason to suspect there won’t be further prosecution/s.
@ ZeekNoMore
It might also be good to note that this type of crime has really just started to balloon in scale and effectiveness over the last few years.
Generally speaking, most governments/authorities aren’t exactly noted for instituting changes to handle new challenges at lightning speed.
ASD was considered to be pretty large and just 8 years later it is dwarfed by Zeek.
Another ponzi that I followed around the same time as ASD crumbled and closed up before it ever hit the radar of the major authorities. That was YMMSS run by Kim Inman and that one took in an estimated $30-$60 million.
Who knows how much the JSS Tripler ponzi has taken in?
All we can hope is that the authorities will soon start knocking on the doors of the ponzi pimps.
Many of them have well established and easily documented histories of playing and promoting the HYIP/ponzi programs.
Well, I’m not sure what to think. It looks like there have been some prosecutions, but it’s also possible it’s politically charged since it’s a new Task Force under the Obama Administration. If it’s under one of the many Czars created in the past few years, who knows what the agenda or longevity of the Task Force is? I’m trying very hard not to be political here and would like to give them the benefit of the doubt.
FYI, it’s the same task force which took down AdSurf Daily.
Personally, I see no reason to assume the Zeek prosecution is not being handled through the same task force, given the fact the S.E.C. and the Secret Service are both task force members.
Then that’s very encouraging. Tending to get a wee bit more cynical in my old age.
In one of my blog posts, I identified FOUR levels of Ponzi participants: mastermind and cadre, core shills, judas goats, and sheeple.
By “worker bees” I assume you mean the “core shills”, the initial players brought in by the mastermind, not the judas goats.
In the Burnlounge case, FTC indicted two or three of the top “affiliates” along with the top execs. One of them made the news as he was supposed to be this all-American guy former college football star, blah blah. So there are signs that the “core shills” are getting noticed by the government taking down the scams.
We shall see if SEC takes notice.
http://amlmskeptic.blogspot.com/2012/08/how-to-stop-or-at-least-slow-down.html
According to SEC website:
http://www.sec.gov/spotlight/enf-actions-ponzi.shtml
Second item on the list (as of 12-SEP-2012) is Zeek.
Just read the blog you wrote…excellent, excellent, in fact printed it for future reference. I think I’m going to have to branch out and participate in some of the other “skeptic” sites likes yours. Good stuff all around. If only there were more hours in the day.
Yes, “worker bees” would be the “core shills.” And, yes, I agree that they need to be prosecuted as diligently as the mastermind and cadre.
The part I hate about your descriptions is I’m a lowly sheeple, a term that’s hard to swallow for a strong-willed person like myself. But it is what it is. Oh, well…
I guess I fall under the category of “All MLM’s are scams and should be shut down.”
You took the words right out of my mouth, if I had seen what Troy had to say before agreeing to take a look at Zeek I would have ran the other way as fast as my feet could take me.
As it was the powers that be prevented me from being involved in Zeek, for some reason I just couldn’t get any of the payment processors to work for me and then the customer service rep on the help line was so rude and abrupt my 1st and 2nd opinion on this company went in the toilet.
Too bad many others didn’t pay attention to all the red flags that I saw.
I agree, because I hate, hate, hate them, BUT then again if we want to live in a free society should people be allowed to do dumb things if they want?
Within reason of course, your not injuring or hurting anybody else, or it’s not blatantly illegal, but then MLM does hurt others on some level most of the time, since pretty much everybody loses money. It’s kinda complicated if you think about it.
Maybe Ponzi’s should be illegal, and the top guns prosecuted, but if you get involved in one, that’s on you, too bad. I’m not sure it’s the governments job to hold your hand after and get your money back. Using taxpayer money to go through the whole after process doesn’t really seem right to me.
I bet people would learn a lot faster and word would spread quicker if people had to learn the REALLY hard way. I can’t think of too many other scams or bad decisions where the government will try and get your money back for you.
I lost a lot of money in a Ponzi years ago, but I didn’t have any expectation of the government or anybody else getting my money back for me, I did get some $ returned, and I’m grateful, but I was dumb and if I lost it, it was all my own fault. But I sure did learn not to do it again.
I guess I’m wondering off topic, and the government didn’t ask for my opinion anyway 🙂
Even though I’m an ex-Zeek affiliate, I think you are right. Sure, I’d love to get some of the money back but the fact of the matter is, no one held guns to our head, no one held our children hostage in order to get us into Zeek.
In fact, use of the word “victim” doesn’t even seem to fit..somehow minimizing true victims in other criminal activity. Don’t know what you’d call us, other than naive, foolish, dumb, hopeful to get out of the financial mess we are in… “victims” just doesn’t seem to be proper.
Of course, from the criminal standpoint, there are Plaintiffs and Defendants, prosecutors and defense attorneys, perpetrators and victims, so I guess that’s why the term is being used in this situation.
You were victims of FRAUD, plain and simple. Money is taken from you with false promises, with fake business model.
There’s an editorial in “The Dispatch”, the NC newspaper that was covering Zeek as it’s in their town. There’s a comment there that “SEC is the one that froze our money! There was no victims until the Feds moved in!”
The problem here is if a victim doesn’t even know he’s a victim, does his opinion count?
K.Chang, I do see your point about victimization. So, I guess in the legal sense, we are victims. The point I was trying to make is the fact that we did have choices in whether to join or not places some responsibility on us.
There were purportedly more than a million Zeek members.
What are the chances the collective WE applies to all million people.
Just as with every HYIP ponzi, there are different categories of participant, of which genuine victims is but one.
I was, but I still blame myself for believing, when I wondered to myself how that could possibly make sense, and then told myself it’s probably just something I don’t understand in the business world. After all others had been in for years and years and it was all good. I ignored my own common sense.
I don’t know…is that like a tree falling in the forest question? LOL
Dude(ette)… you just blew my mind.
(trying to add some levity here)
Marley…I know, Deep thoughts LOL
That is a major problem. 🙂
He feels like a victim, and identifies the SEC as the perpetrator, and the scammers as the “good guys”.
I seriously hopes he hasn’t got a driver’s licence, because of the very shortsighted focus he seems to have. I’ll guess he had his eyes focused on the “speedometer” each day — the RPP, “Cash available” and the VIP balance — the information that told him all he needed to know about how fast his money was growing.
From that viewpoint (with the nose touching the “speedometer”), the sudden and violent stop of his journey was clearly caused by the SEC.
Actually, when reading through the court documents, it seems like Paul Burks shut it down himself. RVG was shut down the day before the court hearing, on August 16th. Other parts of Zeek were shut down 2-4 days before, e.g. cancelling conference calls and cancelling Red Carpet Event. Paul Burks already had a qualified lawyer in place to represent him, and they had already prepared most of the details in the agreement.
It becomes visible in document #1, “Motion to Seal”:
In other words, Paul Burks seems to have been well prepared for the shutdown, and to have initiated the actual shutdown himself, in the days before Zeek was shut down by authorities.
This will probably give the guy with his nose attached to the “speedometer” a major shock, and remove most of his faith in humanity (or something similar). 🙂
You learned after the first time, that’s good. Believe it or not there are people that do this (ponzi, mlm) over and over and over for years and years thinking one is finally going to be “the one”.
Of course they truly believe every one is the one… until it’s not.
Ruhroh, there’s trouble in paradise:
Anyone with half a brain should be able to look at what happened with the ASD case and the silly cases launched when they were shutdown, and appreciate that they were all thrown out/dismissed.
That and it was only a few years after ASD was shut down that the criminal side of things came to a conclusion (Bowdoin, ASD’s “Paul Burks”) is currently awaiting sentencing.
I’ll report when there’s something worth reporting on, till then Zeek Rewards was a Ponzi scheme and the SEC shut them down and that’s where I’ll leave it.
Sorry but Troy reminds me of darth vader who just can give up the darkside and admit zeek is a ponzi.
Burkes is the empourer and handed over the deathstar and craddock and the stormtroppers are turning on Troy. Connection on video kept letting me down so had to make my own plot.
maybe i am delusional too, but it sure beats listening to darth vader word for word.
The latest from The Dispatch:
You should read the first comment: “there was no victims until the SEC froze our money!”
Perhaps assumptions are necessary,
1. The viral nature of MLM creates massive exposure at little cost to the company owners
2. The zeek model was that the bids were “product”
3. “needing” money is not usually the requirement for aspiring to acquire it
My concern is this:
Penny auction mlm X is going to come along, it is going to be set up similar to zeek with the 3 key issues addressed
1. No manual manipulation of daily payouts
2. “real customers”, which will exist because they are required to be found by affiliates to be qualified
3. Payment based on bid usage not purchases
When it happens will that be legit?
Actually, I think Troy is starting to turn around. I would say the latest video is a “slight” concession that Zeek was a Ponzi.
He said it wasn’t DESIGNED as a Ponzi, which I’ll disagree with, but I think that’s a positive step from “it is not a Ponzi”.
Of course he also claimed that “give time, Caldwell would have fixed it”, but that’s almost another concession in itself.
(Carrying on with Marley’s levity theme.)
Deep Thoughts (by Jack Handy):
If trees could scream, would we be so cavalier in the way we chop them down?
Well maybe. If they screamed all the time. And for no good reason.
——–
I’m amazed that Robert Craddock is getting into a pissing match with Troy. I don’t see an upside for him in this.
Yea, look at the Alexa numbers, a lot of people tune in to hear what Troy has to say and most of Robert’s potential donors are among them. Can he be this stupid?
As a decompression tactic they are “temporarily” no longer soliciting donations. Oh, the donation page is still active, unsecured and unencrypted but still active, but “no thanks, we got enough money for now”.
This isn’t stupid, the reason to complain about these guys is they’re asking for money and telling lies, now we can only complain about the lies they will be telling.
Last week they were promising to file something or another by Monday or Tuesday of this week. That’s been changed to “sometime this week.” Well they need to file something and do it soon to give the donors something to cheer about.
But they know they are being watched, not just by people like us but by people with the keys to those shiny interlinking bracelets. I think Robert is just getting a notion of how big the stage he’s standing on really is, and who some of the people in the audience are.
@Getting educated
That’s a bit like asking “what happens if an investment scheme comes out that isn’t just money being shuffled around between members?”
Zeek Rewards wasn’t a MLM company with problems, it was a Ponzi scheme. If a penny auction launches with a MLM style compensation plan that’s legit, it isn’t a Ponzi scheme anymore is it.
Q1: If there are already “real customers”, then that means the business model works WITHOUT MLM. Why would they then add MLM to it? MLM has a certain “stigma” to it, that it’s always seen as “off-mainstream”.
Q2: The Zeek model is fake. it is a MIRAGE. A mere facade, a Hollywood / Bollywood set. It’s NOT REAL. Thus using it as a basis for comparison to a “real” business would be comparing your life to life in Star Trek or Mordor.
Q3: Wait, are you saying this hypothetical company needs MONEY? Then that would just get them in trouble with the SEC again, wouldn’t it, selling unregistered securities?
—-
This will be a long-winded lecture on MLM theory.
Let’s for a moment, work backwards. Let’s say the plan indeed is to share 50% of bid sale profits with the affiliates. So what would the affiliates actually *do* to deserve that 50% share?
FTC guidelines are clear: you can only pay on SALES (in this case, of bids). Paying multiple level down is not a problem, as long as you pay on SALES of bids, not on recruitment.
So you work out a MLM comp plan that is based on sales… And you end up with something very much like Bidify’s current plan.
Let’s face it: no company is going to give up 50% of their daily revenue / profit without getting SOMETHING from the people who are getting it. In MLM, the company offloads most of the customer acquisition costs, affiliate recruiting costs, and training costs off to the affiliates. To get paid, affiliates need to sell, as it’s the only legal way for them to get paid.
So affiliates serve 3 roles, in order of importance:
1) Sales force, sells products to their circle
2) Recruiter, recruits prospective sales force members
3) Trainer, trains new sales force members
However, they are only PAID for doing 1).
So can you sell bids with MLM? Sure. Bidify’s doing it.
But it will NOT be “easy money” like Zeek was.
Penny auction MLM is rather meaningless, due to the constant need for replacing the customers with new ones.
Affiliates spending bids is rather meaningless, because that is a different type of “self consumption” than what is normal in MLM — the bids don’t cost anything to produce, and the affilate will bid in competition with normal customers and make the auctions become less attractive.
Normal MLM can use the self consumption among affiliates to generate a higher production volume (= lower cost per unit produced). It can also make the production quantity become more stable, more easy to calculate in a budget or in a production plan. BIDS as self consumpttion don’t offer the same excuses.
Penny auctions aren’t really that profitable, it’s mostly an illusion. But they are perfect to be used in a scam like Zeek, since people are highly willing to BELIEVE they are very profitable.
To earn $10,000 per month, the affiliate will have to recruit 2-3 times that amount in customers.
* 100 customers spending $200-$300 on bids
* or 50 customers spending $400-$600 on bids
Most customers will probably buy 50 or 100 bidpack, “just to try the auctions”. 60-80% of the customers will probably be one time customers, and will have to be replaced every month (but a few will remain loyal for a few months).
So the idea seems to be rather meaningless, don’t you agree?
Which is, in itself, more evidence Mr Dooly is in absolute denial.
$600 MILLION down the chute before he even starts ???
That makes 2 points Mr Dooly is still studiously avoiding:
1) name one, single, solitary business in the history of the planet which has been able to offer 1% per DAY on a repeated basis WITHOUT being a ponzi.
2) name one, single, solitary business in the history of the planet which has been able to be “turned around” after having been a $600 MILLION ponzi fraud.
There are certain “facts” which don’t need absolute confirmation.
a) Zeek was fraudulent from the first time it paid “ROI” from members’ fees while claiming it to be from “profit share”
b) Zeek was fraudulent from the first time it paid ANY percent per day ROI more than once.
c) Zeek was fraudulent from the moment its’ liabilities exceeded its’ assets. Once having announced a return for a specific day, it incurred a liability to each member, whether they “cashed out” the amount or not.
M_Norway is talking about viability of a product in the MLM space, which is something separate from the business model, but is influence by (and in turn influences) the product.
Most of those uber-juices and pills and whatnot have a very high profit margin for the company itself, and once you convince people to take them, they *want* to keep taking them due to various placebo effect, confirmation bias, false attribution of cause and effect, and so on and so forth.
That’s not the the point. The point is you get a repeat customer, who convince him/her-self that this is GOOD for himself/herself, and it’s money well spent. (Whether it is or is not is besides the point)
However, the same is NOT true for bids in penny auctions. Penny auctions are luxuries. You can’t convince people they NEED penny auction bids like they need pills and juices. So while bids are mostly profit, and it is a commodity that can be “used up”, it is not one that you can ascribe a NEED to.
As M_Norway pointed out, customer acquisition is going to be a PITA, because most customers will probably buy once or twice, and quit when they realize they are spending way too much bids and not getting stuff.
There will be an extremely high “churn” rate, and when the customers don’t stick around and buy bids repeatedly, you don’t have repeat customers and repeat business. Thus, your customer acquisition costs will be MUCH MUCH HIGHER than anticipated.
I had a friend who used to sell Quorum, those personal security devices like hotel door motion alarm, personal SOS beacon / flashlight / siren, and that sort of stuff. I told him it’s a deadend business because everybody only needs ONE and he has to look for new customers all the time instead of repeat business for stuff that gets “used up”.
As predicted, he quit after 2 months, having made no money at all.
And the penny auction market is likely to see something similar: people come in, try a bid pack or two, leaves. Virtually no repeat customer at all.
I just received this from the NCDOJ:
I’m not sure what this means regarding the status of the NCDOJ investigation into Zeek Rewards.
I’d say even earlier than that. I’d say it’s fraudulent the day they (that should be Burks, Dawn, and Darryl) picked the comp plan they “tweaked” by using Zeekler and MyBidShack since August 2010 through December 2010.
Someone needs to dig up what comp plan was on Zeekler and MyBidShack back in 2010 so we can see where did they go Ponzi. I haven’t been able to dig up anything yet.
My point was, there are a myriad of reasons/times when, without “proof” it was possible to say without fear of contradiction, Zeek was a fraud.
There’s no need to even consider the “comp plan”
In fact, it’s the “comp plan” discussions which have got Mr Dooly into the pickle he’s in.
There never was a “comp. plan”
For sure, there was something which had the appearance of a “comp. plan”, but it was window dressing.
1% per DAY is all Mr Dooly needed to know.
It’s not until the “Troy Doolys” of the world come to accept it was all smoke and mirrors and NOTHING was real that they’ll be able to move on.
Otherwise he’s condemned to a lifetime of supporting outright frauds simply because their “comp. plan” makes sense.
The nitpickers among the Zeeklers can argue, of course, that 2% of payouts coming from the Auctions and Paul Burks is the guys real name means that I can’t use the term “nothing”
In Zeeks’ case, however, I fail to see any material difference between “2%” being legit. and “nothing” was legit.
Just look for the first instance of any website collateral, T&C’s, or advertisement that mentions ROI, “compounding,” or “no recruiting”.
Even before it was a Ponzi, it was an illegal, unregistered investment.
It probably means that the Receiver is responsible for the investigation, the civil parts of it. NCDOJ will participate in HIS investigation, rather than that he will participate in THEIR investigation.
A court has already made a decision for how to handle the case on a federal level, and NCDOJ will simply follow that order.
If you haven’t checked out the 9/12 Zteambiz site update, you may want to read it…for laughs. If you don’t want to waste your time, here’s a summary…
1. We are no longer asking for donations (for now).
2. We will let you know who the mystery legal team is on 9/18.
3. We don’t want you calling them at that time because if you do, it will run up the legal bill even more which, of course, means we need more of your money.
And in closing, Robert Craddock has the audacity to write…
“Please don’t let people play with your emotions for their financial gain.”
Is he for real??????
Also, note to Robert – You may want to consult with someone who has a little background in writing and proofreading.
If I was going to ask people for donations like you, I would at least make sure there aren’t so many run-on sentences and misspelled words. Emails and blogs are one thing, but come on, something of this magnitude and you can’t even get a 7th grader to proof it???? You’re a lawyer???? Wow.
Saw some fun tidbits in Troy Dooly’s latest post.
This one speaks for itself. Everybody just smile and roll your eyes here….
Next, a combination of ego mixed with, maybe, delusion….
Here, a slightly inflated view of his influence. I suspect the firestorm of questions from former affiliates had just as much to do with “forcing Robert Craddock and crew to remove…” as Troy had to do with it……
Funny he couldn’t get this next one out of his mouth during that famous radio interview with himself and Dawn. This would have been more appropriate than him stepping in and saying her answering the question would be out of compliance…..
And of course there’s this final one. Sounds like he’s easing his way over, ever so slowly, to getting on the right side of the FACTS. Clearly it’s still waffling, floundering wordsmithing, but for him it’s still a slight improvement….
Ah, that’s the “pot calling the kettle black” fallacy. 🙂 Or as I call it “What I say (about your side) doesn’t apply to myself” fallacy.
http://amlmskeptic.blogspot.com/2012/09/whatever-i-say-about-your-side-doesnt.html
Exactly. This was one of the major red flags that made me suspicious of Zeek when I first read about how it was supposed to work.
Just dawned on me that if they had called this thing ZIRP Rewards they would have been home free!
Not only would the government not have shut them down, they would have promoted it! Ah, what might have been…
There have been a good number of stories about and updates from zTeamBiz in the last few hours. Forgive me for not wanting to retype everything and just giving a link instead:
http://www.realscam.com/f10/zeek-rewards-how-get-3k-month-starting-free-member-642/index40.html#post28165
Latest announcement from Receiver Ken Bell:
http://zeekrewardsreceivership.com/pdf/9-13-12%20-%20Letter%20from%20the%20Receiver.pdf
Wait a minute, the letter from the receiver clearly states that he intends to recover assets from people who took more money out of Zeek than they put in. But that’s impossible!! Dave told us on the 8th of this month that:
Someone better tell Mr. Bell that he can’t clawback Todd and Dave’s money. I guess he isn’t on Dave’s e-mail list.
Boy, you aren’t kidding about a good number of updates. Thanks for posting these.
These guys are running around like chickens with their heads cut off. It’s really very entertaining, especially knowing that things aren’t working according to plans, or so it appears.
They are really annoyed that people ask questions…that is obvious. Just wondering if they encountered the public opposition in the ASD scam after the scam like they are now.
So not surprisingly, as per Kenneth Bell, Dave Kettner and Robert Craddock have been full of shit this past week.
As per Kettner’s latest email:
Lololol. Craddock says it’s from Kettner, Kettner says it’s from Craddock and when Dooly asked Craddock he wouldn’t confirm or deny the information was from him.
Oh and this gem:
Sucks to be someone who donated money to the Fun Club 12, you’re going to be left completely in the dark whilst these top Ponzi players use your money to secure their own interests.
I hope Kettner isn’t suggesting affiliates ignore emails from the court-appointed receiver regarding fund recovery???
Todd was actually very late to the plate with his Ad Surf Daily suit. Not that his suit wouldn’t have been futile anyway but by the time he started passing the plate he could only come up with enough cash for his former attorney friend Dwight to argue the case.
But since Dwight no longer had a law license he couldn’t “represent” Todd so the two of them filed “pro se” which means they were both representing themselves.
There was a more timely false lawsuit effort. Robert Lee Guenther organized the Ad Surf Daily Members Business Association (ASDMBA) Trust. In theory all the donors were contributing to a trust fund set up to secure representation and protect the donor’s interests. It didn’t work out that way.
When the was first formed it was Pro ASD and Pro Andy Bowdion. But in what I will give credit to Robert (Guenther) for is realizing that there wasn’t much of a pitch to be made fighting for ASD, Andy had his own legal team after all.
So the ASDMBA pulled a fast 180 and was suddenly against ASD but ironically enough, used the same anti court appointed receiver rhetoric now being used by Robert (Craddock). One further irony, both Roberts (Craddock and Guenther) have the middle name of Lee.
Well the ASDMBA did secure legal representation by a Dallas law firm with whom Robert Guenther had a VERY long relationship. He used to own an auto dealership and had a string of civil suits against him longer than my arm and Larry Friedman or some other member of Friedman and Feiger was there for him for all of them. But for reasons I never discovered Larry F wasn’t there for Robert G when he was convicted of bank fraud.
Anyway, back to the story. lawyer Larry spoke on confrence calls both before and shortly after the ASDMBA pulled the 180 on ASD. I was never very satisfied with his explanation, from a legal perspective for the turn about. It wasn’t long after this that Larry stopped appearing on the calls.
Robert Lee Guenther was a well practiced with a sales pitch, but this wasn’t a good venue for him. When your selling a car you close the deal in an hour or so or you don’t close the deal. Suddenly he was called on to do weekly updates about a lawsuit that never got filed and was expected to answer questions on the ASDMBA forum.
This is where I sorta slipped my slimy little tendrils into the works. I’m a “forum guy” and the kind lady who did the day to day running of the place and I became pen pals.
Not to overstate my role, there were many other good people who started asking questions about Robert G, especially after we discovered that pesky little bank fraud thing but I did help her to decide to keep letting both sides get heard.
Well, Robert G was something of a rage-a-holic and was less than thrilled to discover that he didn’t really control the ASDMBA forum and the person who did was letting people ask uncomfortable questions.
There was a slow motion meltdown that needed to be seen to appreciate. Robert G started calling everyone the most vicious insult he knew, “Liberal.” “You must be a Liberal because you’re posting on the internet instead of watching football” was a personal favorite.
It wasn’t all laughs, a very kindhearted and dedicated anti-scam gentleman got sued by lawyer Larry to shut him up. This fine man was retired, living on social security and raising his grand daughter after his son had been murdered.
In the USA a social security check can not be garnished to a civil suit and the state this man lived in has what’s called a “homestead exemption” making it almost impossible to lose your home to a suit. Lawyer Larry knew that when he pressed the suit, he knew he’d never see a dime. He did it to shut that good man up.
Anyway, bring this already way to long story to a quick close, not a single document was ever filed by the ASDMBA with the court. But the fund raising effort likely generated $130k which was perhaps enough for Robert Lee Guenther to repay his downline the money they (and he) lost in ASD.
When people asked for a refund, Robert said “sue me.”
My comment:
People should probably include membership fees in their claims, and MAYBE other expences paid directly to RVG.
If I had used the method of buying retail bids through family member (to earn commission and VIP points), I would probably have included the NET amount used there, too. The method ws a part of the scam, like anything else.
People who followed Howard Kaplan’s “general tax advises” will have an advantage here. “Keep your own daily or weekly track of income, expenses, work related to this business”, and “organize your documentation in a folder”.
A voluntarily payback can probably be better than a clawback for some people, i.e. because the process will then be more under your own control. It’s possible to make a better deal, within some limits, e.g. get some claims like “retail bids purchase through family member” accepted.
The Receiver’s instructions is to recover assets in a cost effectively way, and that opens for some types of flexibility, but it must be within reasonable limits — applicable for a whole class of participants rather than for individuals.
The magical numbers for when he can perform a clawback is probably if you have received MORE THAN or LESS THAN your principal investment (plus membership fees, etc.).
More than: He CAN perform a clawback
Less than: He CAN’T perform a clawback (he can’t use YOUR money to pay other victims).
Less than: I doubt he can use money you already have recovered as part of the equation, e.g. if your total investment was $10,000, and you have received $7,000, then your NET INVESTMENT $3,000 should have similar rights as any other net investments.
Affiliates in foreign countries have probably similar rights as affiliates in the U.S., and most of them don’t have to fear clawbacks. Clawbacks CAN be done in foreign countries too in some cases, probably through the court system in the country in question.
This is a very interesting question and will be something worth paying attention to. I’m afraid I can only guess at how this might end up working and it would be only that, a guess.
From a mathematical perspective it’s likely that 9 out of 10 ZR members lost money. This would be true no matter what country you lived in.
So in most cases it seems likely that the counterpart agency to the SEC in each affected country would have a positive motive to cooperate with the receiver in administering clawbacks because the net money that get’s taken away will be less than the sum they’d stand to see returned if they did cooperate.
Of course there will be many variables, how friendly a given nation is with the USA and how corrupt that government may be. But I doubt you’d see many countries sending money into the receiver.
Probably more like they preform clawbacks on their citizens and report the amount. Then once the total refund to that countries citizens is calculated the receiver refunds the difference and leaves it to the locals to disburse the funds.
Again, I’ve seen several receivership being administered but this is the first one I’ll be watching where perhaps the majority of the money is from offshore.
It should prove to be informative.
GlimDropper: Thank you very much for the ASD Story…very, very interesting chain of events. The part about the “good man” who was sued by Lawyer Larry is heartwrenching. These people are such scums of the earth.
While I don’t think it always hold true, I believe most of the time what goes around comes around. The good man couldn’t have taken from him what is really important, his integrity and good conscience, and people who I’m sure loved him.
The Lawyer Larrys of this world are usually pretty miserable people, no matter how hard they try to act otherwise. They get what’s coming to them one way or the other.
Maybe some day someone will write a book about these characters…not that they deserve the publicity. Hey, maybe you faithful scam busters can be cast as the good guys who ended up being vindicated. 🙂
It will NOT go through any “SEC counterpart” in other countries (with a possible exception: CANADA).
The Receivership is a Trust, a civil entity rather than a government agency. In the U.S., some of the clawbacks were covered by the court order. Outside the U.S., he will have to use the court system (or other methods) in the correct jurisdiction.
The normal process in a foreign country will probably be something like this:
1. Present his claim to the other party
2. Wait for a response from the other party
3. Accept the response, or do something
4. Use a local lawfirm, trying to collect the money outside court
5. Use a local lawfirm, trying to collect the money through a court
I’m not sure I have covered ALL points, but point 1 and 2 are important. He can’t start on point 4, but he can use the same lawfirm as “assistance” in all of the points.
The solution can’t be very cost friendly if it’s used against ordinary affiliates, so I’ll guess it’s only meant to be used in “special cases”.
In some cases it’s possible to sue banks, e.g. if they have assisted their clients in some ways. I don’t think methods like that will be used.
I have already suggested this to Oz, and told him I would fight to be the first in line to buy it 🙂
I’ll help. 😀
I’m new to this site so it’s hard for me to tell if you guys are kidding me. I do have a gullible side. But seriously, I do think it could be a very interesting book/movie, whatever.
Also, given there are so many people who were involved in Zeek, there would be a market for it.
My advice is – Do it! If you don’t, someone else will, and it might be someone who doesn’t know the real story behind the story the way you all do.
Lawyers are only “actors” in a system. They act ON BEHALF of their clients, not on behalf of themselves. The client has to make the important decisions himself, e.g. whether or not to sue someone. So it’s the client’s decision that is the problem, not the lawyer’s.
So if you want to blame someone, blame the client rather than the lawyer.
For some reasons, the Goddess of Justice has always been pictured blindfolded, with weights to measure the facts in a case.
The problem here is what he considers as “fact” is that he “heard” Craddock said blahblahblah.
The actual information itself is “hearsay”, i.e. Craddock heard from SNR Denton who heard from SEC that “SEC case is weak”.
But he doesn’t say that. This is equivocation (or stupidity).
Thank you for the correction M_Norway.
I know the receiver is a non governmental agent and I do trust the rest of what you’ve shared with me. But ya know, these internet money games are getting more and more multinational with victims in many countries.
One of these days, at it may not be soon but there will mounting pressure for increased cooperation. These scams are evolving into more efficient predators.
Hell, Zeek might weigh in more than six times ASD’s damage toll once they pull it all above the surface and I ~think~ Zeek had a shorter run.
And there is a financial motive in countries cooperating. Why should US and Canadian victims receive an X% refund but citizens in Israel for example, receive nothing?
Thanks again for the fact check.
From what I understand Robert Craddock worked closely under Greg “all criticism of Zeek Rewards is false” Caldwell.
Is it any wonder that we’re now hearing “everybody is lying except us” from Craddock?
I just noticed the Zeek Rewards and Zeekler (parked) websites are now offline.
When did that happen?
Every time I read this I laugh so hard the wife thinks I’m losing it! I’m hoping Craddock keeps posting up his nonsense. With his shots at Troy and made up porkies I’m seriously laughing my ass off!
Just a quick question for those who followed the ASD case… Did the ASD Receiver have a website? I couldn’t search for anything regarding the ASD Receivership.
ASD receiver is called “Rust Consulting” if memory serves.
Check ASDUpdates.com
I didn’t really follow ASD that much, but the claims administration firm that handled remissions was Rust Consulting and the site was at adsurfdailyremission.com which doesn’t appear to be active any longer.
You can use the Wayback Machine to view what it looked like.
The ASD case was handled slightly unusually, in that The Department of Justice appointed Rust Consulting as a “remissions administrator”, rather than as a court appointed receiver.
But attorneys don’t have to take every case that comes their way. I worked for attorneys over the years…most were good, ethical guys, and there were cases some simply refused to take because of their own moral code.
So, just like I didn’t have to sign up as a Zeek affiliate, neither did Lawyer Larry have to take a case where an elderly man would be ruined.
Of course, the client is to be blamed…but I do blame lawyers who take cases that are obviously unethical. It’s not necessary.
PS – The comment in 332 wasn’t directed at lawyers at all. In fact, because I have known so many, I usually come to their defense when lawyer jokes are made. 🙂
It really was about the fact, from personal observations in life, people who live their lives screwing other people over end up geting paid back one way or another.
Maybe not in civil court, criminal court or any court. But the price is paid most of the time in lack of true friendships, lack of deep family ties, and lack of peace in your soul and heart…things that are really important in life.
Thanks for pointing out the difference. Now that I recalled, the Feds filed multiple “forfeiture” lawsuits to let the court legally take all of ASD’s assets, THEN assigned Rust Consulting to give them back. Part of that is because Andy Bowdoin chose to fight his charges.
In Zeek’s case, they simply gave all of THAT responsibility (grab the money AND give it all back) to the receiver.
Someone WILL have to be willing to take a case. So by having an ethical standard, they are simply pushing the case onto some other lawyer. It would probably have been better if they had taken the case, and influenced their client’s decissions with some of their own ethical standard.
Lawyers are an important part ot the Justice system, as “professional actors” acting on behalf of clients rather than on behalf of themselves (if they are “good”). A “good” lawyer will usually be willing to accept “problem-cases” where the client’s actions is in conflict with his own ethical standard (personal standard).
Even “better” lawyers are able to influence the client’s decissions, and bring it closer to “common ethical standard” than the client were in the first place, without harming his own client’s interests.
Noell P. Tin made Paul Burks make a decision about surrendering the company and pay a $4 million fine. From my viewpoint he did a great job both for his client and for other parties involved.
Some people will probably feel hurt about it, and some will partially be hurt in reality too. But he protected his own client’s interests, and the interests of the victims as a group (rather than on individual level).
The important point in the deal he made for Paul Burks was the one about $4 million fine. The fine will cover ALL civil penalties including tax penalties, probably for the last 10 years. And Paul Burks has several “tax issues”, where we probably only have seen a few of them.
From my viewpoint, Noell P. Tin made a difference for his client, and was also able to bring the case to a solution closer to “common ethical standard” than Paul Burks would have managed himself.
Many other lawyers would probably have harmed Paul Burks’ long term interests, trying to defend the wrong parts of the case (and lose the important point about possible tax penalties).
Your lawyers with the “high ethical standard” would probably have choosed a similar solution, rather than pushing the case onto some other lawyers? Ponzi schemes are NOT very ethical, but the lawyers’ work CAN become a very ethical part of a solution.
Very true!
The cases “my lawyers” refused to take were sexual abuse and child abuse cases, and eventually phased out of criminal defense altogether.
Although even with those cases, as you pointed out, justice is blind and the people charged with even the worst of crimes need to be defended.
That’s why I always kind of cringe at lawyer jokes because guess who you need if someone you know ends up in jail…or is going through a divorce…a good lawyer! Kind of like it’s minor surgery when it’s done on you…it’s major surgery when it’s done on me. A matter of perspective. 🙂
I’m glad they finally took the sites down completely. Maybe this will help stop giving Zeek true believers false hope that Zeek is going to go back into business.
And part of it was because Bowdoin had, in effect, ripped off AdSurf Daily itself.
He transferred a large amount of the money into accounts held in his own name, rather than ASD business accounts.
I stand to be corrected, but, from memory, there was around $80million in something like 10 different BoA accounts in his name.
There was a lot of conjecture at the time that the DoJ would have been within its’ rights to confiscate all the money and assets rather than do as it did and allow Rust Consulting to carry out the remissions.
I needed to refresh my memory before commenting but Larry Friedman did in fact sue Jack Arons on his own behalf. Patrick does a better job of explaining than I could:
http://www.patrickpretty.com/2009/03/06/jacks-arons-purportedly-sued-by-larry-friedman/
There are a wealth of links to many stories about this incident and Ad Surf Daily in general on Patrick’s site.
Apparently, from what my wife told me, that my in-laws are now getting involved with Blue Bird Bids (mentioned in the penny auction roundup article on this site).
I’m guessing they’re smarting from the loss of the money they put into Zeek and are looking for something else to comp that loss. I don’t know that much about Blue Bird Bids but guess it’s another cheesy penny auction/get-rich-quick investment scheme/ponzi.
I really think it’s a bad idea for them to get involved in another ripoff scam, but my wife doesn’t want me to say anything to them. I guess I’ll just sit back and watch, and will probably be hanging around behindmlm a bit longer.
I like the above hint from Kenneth Bell about “voluntary” returning of the ill-gotten gains. You can almost sense that he is laying the groundwork for what is yet to come while in his very subtle way letting the schemers know they have something to worry about. Ain’t it cool?
It has its’ own thread on both the Talkgold and MMG HYIP ponzi forums.
Nothing more needs to be said.
You should print out Oz’s preliminary review and mail it to them “anonymously”. 🙂
For anyone wanting to read behindmlm’s take on some of the prelaunch penny auctions. https://behindmlm.com/companies/mlm-penny-auction-opportunity-prelaunch-roundup/
The believers carp about the Receiver’s law firm soaking up tons of the money and leaving pennies on the dollar to go back out to the affiliates. Well, just wondering. Would the $4 million fine levied against Paul be enough to likely cover the Receivers bill?
If that worked out, it would be a nice thing to be able to say that the court covered the costs of the action out of Paul’s pocket, and NOT the affiliates. Yes, I know that any that $4 million Paul had probably came from affiliate money, but you get my point. Thoughts?
In other words… “we know who you are. If you cooperate we won’t sue you and make your name public. If not… we’ll make sure the whole world knows who you are.”
Remember in the second set of Star Wars movies Episode 1? Liam Neeson’s character was being chased under water by a large nasty fish that was eaten by one much larger. His comment?
“There’s always a bigger fish”.
Wouldn’t do any good. They didn’t heed my warnings that Zeek was a ponzi scheme and now think the SEC was wrong for shutting them down.
They’re blinded by dollar signs and are looking for any way to get rich quick.
About $65.8 million was in Bowdoin’s name in 10 BoA accounts. Slightly more than $14 million was in five DIFFERENT bank accounts linked to Golden Panda Ad Builder, the ASD knockoff and upstart ‘surf linked to Bowdoin and Clarence Busby Jr.
All of the approx. $80 million was decreed forfeited. Some of the Golden Panda money was in a Georgia bank that later failed — and Busby once was a pitchman for a prime-bank swindle that offered a return of 10,000 percent.
PPBlog
Likely there will be significant administrative costs associated with the RVG Receivership, but in accordance with the 2002 Sarbanes Oxley Act’s “Fair Funds Provision”), SEC fines such as the $4 Million Burks agreed to pay and any other disgorgements that are collected are to be distributed to the victims of a securities fraud.
Reference Investopedia
Welcome to my world
Well I’m definitely not going to feel sorry for them at all this time if/when they lose money. Especially if they happen to be as smug as they were when they were in Zeek.
Hopefully they will get it after a couple of losses. Be glad it’s not your spouse who’s a lifetime addict 🙂
Yes, but my wife thinks that her dad is always 100% correct about everything, but I think I scored a few points when Zeek got shut down.
She was always telling me that I was just being negative and I needed to be more excited about all the money they were making. But I’m going to put my foot down this time and tell her to not get involved in Blue Bird Bids even if she just plays with her dad’s money like she did with Zeek.
I was a bit worried about identity theft or other problems because she had to give Zeek her SSN to become an affiliate. At least all the computer files are in the hands of the SEC’s receiver now.
Oh and I might add that they’ve also fallen for other MLM’s in the past which came to town, ones where you actually had to sell products (Metabolife for instance) and ones where you supposedly get paid for using certain company’s products.
So have a lot of other people around town, but you’d think that they’d all eventually learn that nobody has ever actually gotten rich from any of the MLM’s that have come and gone. Yet when the next one comes around, they all fall for the same promises of quick, easy wealth.
Thanks Chris, lillt, and KC for the info about ASD case.
It’s not that “nobody” earns. It’s that the MLMs, with their “peer to peer” marketing, is very good at selling a dream, instead of reality, while hiding the “inconvenient truth”.
I recommend reading my little article here:
http://kschang.hubpages.com/hub/Networking-Marketing-is-doomed-to-failure-its-all-about-the-dream-not-reality
Your #1 on that list is exactly why I’ve always believed any MLM business is doomed to fail. Trying to sell a product and then recruit everyone you know to sell the same product is very much like opening a McDonald’s on every street corner. There will be so many to choose from that none of them will be able to turn a profit due to market saturation.
This is why most corporations limit the number of franchises they allow in any given area. However, MLM is exactly the opposite, they encourage more and more distributors, affiliates, or whatever they want to call them.
This is also why I believe that most MLM’s are like pyramid schemes. You only get success if you recruit, recruit, recruit, and nobody really cares about actually selling the product.
From what I’ve seen, a whole lot of the people that get in them are super excited, initially. When they realize this isn’t the product that the whole world has been waiting for, and the money isn’t raining down on them, they move on to the next exciting one, usually within a month or two, if that long. Some have multiple ones going at the same time. I haven’t ever seen anyone actually make a penny.
I can’t see why anyone would want to peddle some insanely priced, inferior product on their friends, family and strangers. And if it’s even marginally good, it’s gonna be for sale at Walmart shortly.
Husband has done this over and over and over for the 20 years I’ve known him, and I don’t know how long before that. Never made a cent, lost thousands and thousands, except for Zeek, and that looks like it will be going back. He still states he LOVES MLM. Go figure.
Now it’s Banners, straight up ponzi, I’m waiting for that one to die. I’m hoping he’ll learn and stop the ponzi thing anyway.
Hate to say it, but if he’s been doing this for 20 years and hasn’t learned that he hasn’t made any money, he won’t learn to leave the ponzis alone.
Yes, but I would hazard a guess that the SEC isn’t the only one out there with the affiliates’ personal info.
I know…wishful thinking…he leaves ponzis alone for a couple years, then goes and tries a couple more when they sound good. He seems to totally forget, been there done that. If the darn government would just leave the poor guys alone!
MLM or other things in between. I have realized he’s not ever going to change his ideas about ponzi, mlm or anything else that sounds like it might make him rich.
Another odd part of it is we don’t need the money, but we’d have a lot more if he’d stop 🙂 I think it’s partly the initial excitement, and the need to try to recoup what he lost in the last one…kind of like a gambler I guess.
I keep thinking someday he must figure all this is a huge waste of time, but I really have to admit to myself he’s not going to ever stop, BUT it’s just so hard to wrap my head around why he can’t or doesn’t want to understand what he’s doing.
He’s just completely obsessed. Our thought processes are just completely alien to each other.
I thought for a long time it was just him, but as he’s done this over the years he’s met others and they are just like him, amazing me even further.
You might want to get something like Lifelock for awhile. Who knows how Zeek took care of their files while they had them, stuff could have ended up in the trash or wherever.
I think we know they were sloppy in their business, and probably didn’t have the most honest people around.
HYIP ponzi databases and mailing lists are worth a fortune to the ‘net underworld.
Not only are the names pre qualified i.e. they’re people who are obviously susceptible to scams and ignorant of the risks involved in participating, many have also unwittingly given up their SS numbers, bank and payment processor details, addresses and phone numbers in order to be “verified”
As has been proven by recent events, they have no idea with whom they’ve been dealing, unlike HYIP ponzi “players” who ALWAYS use fake IDs and multiple processor accounts and NEVER, EVER reveal any personal details.
“True believers” on the other hand, who think they are dealing with legitimate businesses are like manna from heaven for the lowlifes which make up the HYIP ponzi “scene”
“True believers” almost fall over themselves in their eagerness to become identity theft victims as well as fraud victims.
Troy had some explanations in his “Gaming addiction theories”, the material he linked to. It involves the “reward center” in the brain.
First you aree rewarded by the IDEA of winning, then it’s partially confirmed over and over again. After a long time you will realize you actually have lost money, but the brain will prefer to repeat the same reward pattern.
Some types of gamblers will have logical methods to prevent themselves from being addicted to the game, e.g. having strict RULES they will have to follow (max amount, max hours per day/week, and so on).
In general, logical methods can act as a “counter poison” against emotional addictions. But other than that, I don’t study that type of material very deeply.
All kinds of behaviour that includes emotional rewards and is repeated very frequently can have the same effect. You can be addicted to work, shopping, internet use, mobile phones, gaming, gambling, MLM, Ponzi schemes, HYIPs, and so on and so forth.
I have pointed it out in one MLM-company I studied. “The owner seems to be too busy celebrating himself as a success, but he hasn’t had any success in the last 3 years”. Some people will desperately continue to reward themselves in their fantasies, even when the reality clearly fails. It’s a side effect of some selfdev bulls***.
JoeMama, Erin and whoever else:
In the past several weeks some practical advice has been given over how to protect identity. Here are several things to do ASAP.
1. Cancel/change any credit cards/bank accounts associated with the Zeek business.
2. Go to http://www.experian.com – and register an identity alert. They will automatically contact Experian and Equifax. This alert lasts for 90 days, at which time I will do it again…and again.
3. Get one of the identity theft protections. My husband and I have Lifelock and are going to upgrade to the one that even notifies if someone tries funny business in your checking accounts.
Anyway, the first two things are free…#3 will probably be a few hundred dollars, but well worth it considering what’s at risk.
Troy, used this “Gaming addiction theories” as his assumption for arguing that Zeek is not a Ponzi scheme. His arguement basically stated that in a ponzi scheme people expected to withdraw money, but in Zeek people are just happy to see their points grow and will not take out money.
He gave a flaw explaination that assuming Zeek take in 100 mil at the end of the day. Then base on Zeek formula, the pay out for that day is 150 mil, Zeek is down 50 mil…
He didn’t see any problem here, but move on to the next day because he believes that people will not withdraw their money but was just sitting there buying back and watching the points grow.
Troy couldn’t realize that his assumption is a flaw, so, I didn’t want to continue the conversation with him about Zeek business model any more. I, for one, am not in his formula of just watching the points grow.
If my sponsor didn’t misled me by telling me that I cannot do anything with my money until 90 days later, I would have withdrawn right from day one. And even if Zeek based on this assumption on his business model, Zeek then miss-represented its service/product to the people.
Any how, what need to be said already said by Zeek critics, so no point in continuing this conversation, especially with Troy.
Oh, in case you wonder about my experience with Zeek, here is what I posted in Troy’s forum. By the way, I like the critics’ site than Troy’s since you guys never asked me about “how long did I follow Zeek” in order to judge my knowledge about Zeek…. Another flaw arguement from Troy. But I don’t mind to let him know….
Troy can go ’round and ’round the Mulberry bush all day, it doesn’t change the fact that what the members did or didn’t do or thought they were doing has no bearing on what went on in Zeek internally.
THAT’S what made Zeek illegal.
Forget about what Zeek and Burks SAID they were doing, it’s what they actually did that got them into trouble.
The problem with that is that eventually Zeek would have had to pay out all that money, money that it didn’t have. It’s incredible that he couldn’t see that.
I suspected before the shutdown that Zeek didn’t have nearly enough money to cover everyone if they all decided to cash out 100%, which makes it a ponzi, but I had no idea that they had 3 billion outstanding points.
That, and the fact that you could rack up a million points in 2 years, and 25 [i]trillion[/i] points in 10 years should have shown anyone that it was a ponzi scheme.
True, people liked watching their points balances grow, but you can’t buy groceries or a new car using Zeek VIP points. Eventually people were going to want to get their money.
I used the theory in a different way, to explain one of the reasons for WHY people are attracted (or addicted) to MLM, Ponzi schemes, pyramid schemes, shopping, work, gambling, gaming, and any other areas. It will usually involve the brain’s reward center:
http://en.wikipedia.org/wiki/Pleasure_center
The opposite of “reward center” is probably “control center” or something. Those two and other “centers” needs to be balanced against each other to work properly together.
Troy got a scoop of sorts… Seems Craddock is contacted EVERYBODY who had EVER gone up against the SEC.
http://mlmhelpdesk.com/zeek-rewards-alert-sec-attorney-travis-wilson-tells-former-rex-venture-gorup-communication-director-clifton-jolly-stopping-clawbacks-slim-to-no-chance/
I think Zeek was relying on the fact that people CANNOT withdraw all their money at once. And this is how Troy and many people argue that Zeek is not a Ponzi scheme.
Yes, people may have 2 mil points, but it is meaningless, and they cannot cash out 2 mil points at once, like in a typical traditional ponzi scheme. People can only cash out the rewards of the 2 mil points for each day, i.e. $30,000/day (assuming 1.5% rate) max.
Now the 100 mil of Troy’s example, technically speaking, at the end of the day, Zeek only has to pay approx $1.5 mil at the end of the day, NOT $150 mil- assuming people set 100% withdrawal – as Troy put it in his example.
It will continue like this for the next 90 days, with the approx pay out of $130 mil in total. After, 90 days, the 100 mil points are gone.
So, with in the time frame of 90 day the profit from the Zeekler penny auction and other venue will add up the 30 mil difference – yes 90 days to make $30 mil is quite a challenge, but it is not impossible to start with.
Now that with MLM structure, having distributors consuming or using their own service/product is usual, the mission to have $30 mil extra at the end of the 90 days period to pay out is a bit easy to achieve. Thus, I guess Troy would not have any doubt about this math calculation when it was repsented to him.
Many other factors weighed in such as talking to insiders, and with this calculation, this is probably why Troy is confident that Zeek was not run as a ponzi, and that SEC probably was too quick in their judge, and that Troy hopes to see the case argued in court.
I too was hoping to see its case argue in court, buy was disappointed at Burks for surrender it immediately, and this says a lot about the conclusion of whether or not Zeek is a ponzi scheme.
Personally, I think Troy’s more miffed about how did his close circle of friends didn’t warn him (in private, or hinted) about how badly he was mislead, even though they may be under attorney-client privilege.
The “feed through a straw” idea is basically “forced reinvestment”, which is STILL a characteristic of a Ponzi. The less money leaves the system, the longer can a Ponzi scheme run.
Madoff managed to run his Ponzi for almost 20 years because he only matched S&P500, but very consistently. He did not promise miracle returns.
Zeek’s “unique” in that it sorta promised 1.5% a day, but in reality it was paying 1/5th of that due to point expiration (reinvest 80%). If it really were paying 1.5% a day it would have been an HYIP that collapsed in 3 months.
Oh, and another point that Troy made in his arguement that if the next day, there is no more $100 mil then the profit sharing on that day would be $0.
It sounds good on theory, but in reality Mr. Burks will have to keep put in the average of 1.4% each day to keep more people coming in because the company failed to warn people about this scenario of if no more people buying…
They just said you only need to place once ad per day. So, technically speaking, to keep their promise and their business running and achieve the extra $30 mil at the end of the 90 days period, they MUST continue to in put the average of 1.4% per day on the reward of the points each day.
This is where a big red flag was waving in front of my face when I tried to defend Zeek business model with myself. And this is where I part from Troy.
I agree with you in this point, KC. Another point which made me wonder is this 20% withdrawal max scenario from Zeek. They play on people pyschology of greed and fear.
Each person only has one chance to invest with Zeek to the max of $10,000. If you withdraw all 100% out, you are forever finished with Zeek. One person one account for life time. Plus, each time you buy back 100% or 80% your sponsor is also benefited from it too. So, your sponsor usually an acquaintance will try to convince you on behalf of Zeek.
In my case, when I told my sponsor, who happened to be our relatives, that I have reasons to suspect Zeek is running a ponzi scheme and I’m going to withdraw all 100% and call it a quit, he was furious at me. And until today, the relationship is still in a bad shape.
There’s no point in arguing the “hypothetical” scenario, because it did not happen.
AND the math doesn’t support it.
SEC complaint said in July 2% of revenue (172 million) did not came from affiliates. half of that (1%) is 1.7 million. Yet Zeek paid out 170 million.
It paid out 100 TIMES MORE THAN IT SHOULD.
That proves, beyond shadow of doubt that the daily profit share is FICTION. With 3 billion points, paying out 1.7 million daily would make the RPP as… 0.0019%.
Yet RPP averages 1.4%.
Enough said.
Oops, that should have said 1.7 million MONTHLY. 0.0019% is correct for RPP, roughly speaking, closer to 0.0015% if you compound daily.
I came across this link in my previous research. Maybe it’ll help:
http://freedomofmind.com/Services/help3.php
I found another interesting video there (MLM.com), where an MLM lawyer explains WHY Zeek was an investment and WHY it was a fraudulent investment scheme (“Ponzi”).
Oh, and this video may help too:
I finally found an online copy of that NMBJ advertorial published by Laggos to advertise Zeek
http://www.wogscoaching.com/wp-content/uploads/2012/07/Zeekrewards-Article-in-NMB-Journal-copy.pdf
Someone make a copy, please!
Did ANYBODY ever find that alleged lawfirm Bonefant & Weinburg that were supposedly SEC lawyers that’s gonna deal with SEC compliance? I can’t find such a lawfirm anywhere.
In one of the videos from MLM.com, he states that “Paul Burks was a novelty magician, and he even showed me some tricks. It was amazing all the thing he could do with his scarf”.
That didn’t exactly surprise me. He clearly had skill in creating illusions, directing people’s attention away from or towards something and similar skills.
I had an indirectly dialogue with him (through Troy) about the “tax issue for 2011”, on July 28th. He clearly tried to mislead me and direct my attention away from the RPP and repurchase of bids. And he clearly was experienced, too.
A copy of the dialogue was posted in another thread, “Zeek Rewards confirms $100,000’s in fraud occurring”, the thread where I placed most parts of the tax discussion. One of my conclusions was a red flag:
I have been trained to detect when other “sales people” tries to mislead me, e.g. when they try to direct my attention away from something or when they use other tricks. But Paul Burks could easily have fooled me if I hadn’t analysed the tax issue over and over again, in the weeks before that dialogue.
I have a suspiction that we can expect more illusions from Paul Burks. It wouldn’t surprise me if some parts are illusion, his lifestyle, “2 times cancer survivor”, “wife had a stroke”, “poor book-keeping”, “fooled by a Ponzi ring” or other parts are only illusions.
He’s very trained in misleading people, even Jimmy was convinced the “Cash available” was equal to real money for a long time. 🙂
For all we know, the guard outside his house can be part of an illusion, too. Paul Burks hasn’t been seen in public since the shutdown of Zeek, and hasn’t been willing to talk to anyone.
The guard outside his house clearly creates an impression of that there’s someone inside the house. I wouldn’t be surprised if it wasn’t. 🙂
Bless you kind sir and may I beg your indulgence in posting this over at RS?
It’s a bit too late on a Saturday or perhaps too early on a Sunday to offer an informed opinion. But you have to love the disclaimer beginning with:
Let me translate:
THEY wrote this. THEY paid me to publish it. And because they paid me I don’t even care if what this article says is true. If it’s not true, don’t blame me.
Why does anyone care what this pimp says?
Haha, thanks KC. I watched half way, sorry it was too long. But the proplem is I don’t want to engage in any conversation with him, and he doesnt care whether I talk to him or not.
He is now busy hypnotizing his downline with Craddock planning of bringing back Zeek. He has a big job to do since he has almost a hundred people under him – our family members were among them.
@M_Norway… Hahaha.. Good one about the guard. I think maybe you’re right. If I were Paul, I would move because I don’t trust that one security guy would be able to hold off the anger crowd of hundred of thousand affiliates.
What you didn’t know is Burks was trained as a magician. 🙂 It’s in that NMBJ article, i think.
Here’s proof of his performance:
http://news.google.com/newspapers?nid=2213&dat=19900317&id=ITIxAAAAIBAJ&sjid=CEUDAAAAIBAJ&pg=6790,5173142
Darn it, it’s NOT that NMBJ article…
I *knew* read it today. Someone met Burks and Burks even did some magic tricks. Was it Laggos?
Craddock just pissed off Ted Nuyten of businessforhome.org by sending a “takedown” letter to Ted’s ISP, after Ted came right out and said Craddock is telling lies:
http://www.businessforhome.org/2012/09/zteambiz-ripping-off-former-zeek-affiliates/
It was mentioned by Clifton Jolly, the host in the MLM.com video “ZeekRewards and SEC”, at around 11:00. Paul Burks was a former C&W singer and magician.
Paul Burks was clearly trained in tricking people, but he failed because I knew exactly what I was looking for. I’m also less willing to be “directed” than most people.
Gee, I wonder if the affiliates who donated to Craddock consented to their funds being used to wage war against anyone who calls him out on his bullshit…
Once, just once, I wish one of these blowhards got called out on his/her empty threats and the case actually made it into a courtroom.
Ain’t gonna happen, unfortunately.
Both Troy Dooly and Keith Laggos have lowered the values of their individual “main projects”:
* Troy Dooly: MlmHelpDesk and other projects
* Keith Laggos: NMBJ and other projects
The Zeek story will continue to stick to their names for years to come, just like dog poop under the shoe sole (but far more sticky).
Troy clearly failed in his presentation of the “NMBJ review” on April 15th 2012. His prsentation was clearly “marketing junk” rather than factual information. And Keith Laggos failed in a similar way.
Using NMBJ as a marketing method in a similar way as Zeek did isn’t very attractive anymore. The flaws in that method became too visible in the Zeek case.
Recommending a method like that will be like recommending a restaurant owner to use “Eat at Joe’s restaurant, it’s clearly recommended by 5,000 flies”.
Excellent video AT #393 above. Several things got my attention –
One, love the analogy about driving without a license: Even though you may be really careful and only run a stop sign that day, then get stopped by a cop, it won’t matter that you were a really good driver up to that point.
What matters is that not only did you run the stop sign, but more importantly, you were driving without a license. Running the stop sign is relatively minor compared to having no license.
Two, where Jolly says that when he met Burks, he found out that his background was country/western singing and magic tricks. Jolly said he performed some amazing things with a scarf. Who sees similarities here?
Three, at about 12:00 on the counter, Ron Pullman makes the statement about how to recognize good leadership in a company: A good leader recognizes his weaknesses and if he/she really wants to succeed and do things right, he/she will surround him/herself with people who are strong in the areas of his/her weakness. (This can be seen in politics as well.)
The fact that Paul Burks surrounded himself with the ragtag group known as Zeek Management, and knew that the Founders Club folks where less than ethical… well, doesn’t that say alot?
This would be great to recommend to fence-sitters to watch. The “Bring Zeek Back” zealots are a lost cause.
I see Troy has made a statement about the “NMBJ review” from April 15th, and admitted it to be misleading. I only had a quick look at the video, but that sure is some progress from his side.
When dealing with serious critique, one of the worst strategies is to be too defensive, or to “feel” something without checking the facts. Good strategies will usually require being able to identify the facts, and maybe the different viewpoints, too.
My friend who tried to convince me to join zeek is still a true blue zeek fan. Crazy. He is, however, willing to join me in an investment scheme.
He’s only willing to hand over 1,000.00 of his own money, just to see if it works. Nuts I say, NUTS!
hahaha! what a jewel 🙂
Looks like the clawbacks are about to begin. This morning, I read that the receiver is seeking profits of participants. http://www.bizjournals.com/triad/blog/morning-edition/2012/09/zeekrewards-receiver-to-seek-profits.html
Ken Bell says this “Among those from whom we intend to recover assets are those affiliates who took more out of Rex Ventures than they put in,” he writes.
“Many of you received little or nothing from this enterprise. In order to make everyone as whole as possible, those who profited from participating should surrender their gains.”
read more on the receiver’s website: http://www.zeekrewardsreceivership.com
That part will probably become very popular among lots of people, eagerly waiting for a chance to pay back money they considered to be their own. 🙂
I can clearly understand the ones who wants to put up a legal defence, but I haven’t been impressed by their methods yet. Their defence plans seems more to be related to emotional issues than to what they actually can have a chance to win. It’s more “We WANT …” than “We are able to …” in their plans.
An emergency motion to temporarily freeze the bank and brokerage accounts of the largest net winners and insiders should be filed very soon.
Illusionists will usually use methods very close to people’s own ideas for “how things works”, and I can find many such methods in Zeek.
Paul Burks probably knew alot about how people think and feel, and what they usually can be willing to believe in. And he probably knew about some psychological effects, e.g. how to make people fool themselves and believe in their own imaginations.
During the 9 months from January till now, I have read several theories from lots of different people where they clearly have fooled themselves.
Some examples:
* Theories about how the daily ad worked, how EFFECTIVE those ads really were. 🙂
* Made up stories about all the customers people had got from the daily ads, where they had started to believe in their own stories, but avoided questions about details.
* Penny auction theories, e.g. about addiction. But they usually didn’t have any customers that could get addicted.
All Paul Burks had to do was to provide people with a basic set of ideas, and some visual effects to confirm those ideas. Other than that, people were usually able to add their own ideas, theories and explanations to make it become even more believable.
PSYCHOLOGICAL INSIGHT
He also used some psychological insight. “The natural status” of people’s attention is to be focused on themselves, both literally and figuratively speaking. So people will focus on their OWN income from Zeek rather than the total payouts to ALL affiliates, making the idea of profit from penny auctions become more believable.
I haven’t analysed this very deeply, so this was just some examples. But Paul Burks was clearly trained in making people believe in illusions of their own ideas. And people filled in most parts of it themselves.
ANOTHER MYSTERY
It really makes me wonder about the guard outside Paul Burks’ house. People will usually fill in the details in a story where the guard is guarding someone inside that house, someone who wants to be guarded from unwanted visitors. But it can also be used as an ILLUSION.
So what can we expect from an illusionist? Is he INSIDE the house, guarded against unwanted visitors. Or is the guard hired to act as an important part of an illusion, to give the impression that Paul Burks is inside the house?
“That question and other important questions will be answered in the next episode of ‘Soap'”. 🙂
I think they have two motives. First, they are worried about clawbacks and their own legal bills and have duped the dupable into contributing to their own personal legal defense/clawback fund.
The other motive is to appear to be tough and loyal leaders that will put them into position to take their followers into the next Ponzi deal so they can repeat their Zeek performance. They know exactly what they are doing.
Something interesting I was reading this morning:
Money-Laundering Inquiry Is Said to Aim at U.S. Banks
I’m wondering if this will make things more difficult in the future for these various schemes.
To clarify, illusionist is very good at giving people the impression that something has happened, when it didn’t. That’ why it’s an illusion. It’s not real.
For example, I have a ball (wad of aluminum foil, to borrow Penn and Teller’s explanation) in my hand. I put the cup down, opening facing the table surface, but just before I put it all the way down I slip the ball under the cup. You were not expecting that, so you’re all surprised when I “reveal” the ball under the cup.
The ball didn’t magically “pass through” the cup, though I gave you the impression that it did.
Here’s an Youtube Video where Penn and Teller shows you exactly how it’s done:
Makes you wonder, doesn’ it?
It made the story become more interesting, more appealing to the imagination and the right side of the brain. I can clearly visualize Paul Burks on a remote island with a couple of margueritas, enjoying his luxury life under a new name. While the guard outside his house in Lexington ccontinues to act as an illusion. 🙂
And the worst part: I’m only partially joking. I’m pretty sure we will see some other illusions from Paul Burks, but I haven’t identified them yet.
Paul Burks is skilled in “pushing the right buttons”. He usually seems to know which buttons to push and HOW to push them. Most of the time, people have been manipulated into believing something that later turns out to be false. I don’t think that pattern has changed much.
Paul Burks knew about a potential problem already in December 2011 / January 2012, in the 1099’s and the company’s book-keeping. He knew it would become a high risk for auditing by the IRS around August / September 2012.
He has probably done something between December 2011 and the shutdown in August 2012 to prepare for the situation.
Being a “right brainer,” it’s the part of this whole Zeek thing that appeals to me most. While the Ponzi/biz model debates are very interesting and I try to follow you guys, I get way more interested when I read something about the behavior of the perpetrators.
My 8-year-old has been watching this show lately, “Breaking the Magician’s Code: Magic’s Biggest Secrets Finally Revealed”.
It’s rather fascinating stuff, IMO. It’s also a kind of a cool lesson for the kiddo to learn not to believe everything you see, by demonstrating in detail why you were fooled by the illusion.
On a lighter note – it’s always five o’clock somewhere, right?
Another Dispatch article by Nash Dunn, pretty much the same information in posts in the past day or so about the latest announcement concerning voluntary clawbacks.
Additionally, Dunn’s article confirms that the Secret Service confirmed that the investigation is progressing.
http://www.the-dispatch.com/article/20120916/NEWS/120919986/1005?p=3&tc=pg
ASDUpdates Don Ryan just got us some new Zeek court documents. Each of the payment processors have about 20 mil.
Burks signed a consent claiming that everything Ken Bell dug up are all the assets that exist for Zeek, and the court ordered Ken Bell to come up with a liquidation plan by October 8 of all Zeek assets such as corp HQ, warehouse, office equipment, and such.
THEN comes the clawbacks. 🙂
Does anyone have a list of RVG employees?
I just got something from someone claiming to be an ex employee, could be interesting. If it’s legit it’ll take me a few days to go through it.
Probably easier to give us the name. Apart from the ringleaders most of the other employees worked behind the scenes.
Found direct evidence of this pseudo-compliance.
Before August 2011, if you buy bids, you get RPP. You don’t even need to give it away.
Apparently, they hire Nehra and Waak then, and one of them approved of the change that if the the affiliates buy the bids, but “give them away” (to either sponsored customers or other affiliates) then they get RPP. Bids given away expire in 30 days.
http://webcache.googleusercontent.com/search?q=cache:wygB3_iQHzEJ:zeekrewardsnews.com/2011/08/bid-giveaway/+&cd=3&hl=en&ct=clnk&gl=us
It’s in the asset list on the ASDUpdates.com files site.
Gee, it’s a good thing Zeek had 4 attorneys, an accountant, a compliance officer, a compliance consultant and a law firm on board or they could have got themselves into trouble.
Yeah prior to August 2011 it was just a straight up 125% guaranteed ROI investment scheme.
You don’t launch something like that, let your group of 12 and executive management get rich and then try to go legit. Doesn’t work.
Doc #28… it’s a Florida attorney filing to represent Internet Dynamo, Inc., their “dedicated server farm” in Miami. (Sunbiz: MUJICA, ALBERTO, 16275 SW 88TH ST UNIT 136, MIAMI FL 33196). A quick search of that address also leads to a company called Reputation Technologies Inc.
From a 2007 press release: “About Reputation Technologies Inc. A Miami, Florida based firm founded by Tony and Alberto Mujica, and co-founded by David Meynarez and Michael VanBeneden, in January 2002 on the principles of quality, service and integrity. ”
Odd… the company “Reputation Technologies Inc.” seems to be based out of Redwood, California. I wonder if they’re even related, or if Mujica sold the business.
I agreed not to. The person is somewhat worried but I get the impression pretty pissed off, too. IN addition to losing a job there’s a loss of savings in the affiliate program
LOL… Yep, this was what we were hearing since March, wasn’t it? “There’s no way Zeek could be a ponzi. They hired LAWYERS!”
Even now, people like my in-laws are convinced that since they hired lawyers and “some guy from the SEC told them that their business was legal” that the SEC illegally shut down a legitimate business.
Hmm, well, it looks by the title that this is a legit source.
Wow, this could be a lot of fun.
I wonder what was in the warehouse….
“Larry Snow is currently renting a portion of this office building for a coin-operated Landromat” is the best answer I can give you, based on my parapsychological skills (= reading the footnotes). 🙂
What, no mention of the 10 story building that RVG bought in that document? Or was that supposed to happen right after Paul made the changes to bring in more retail revenue and make Zeek totally legit?
Kettner’s latest Plan C, D, or is it XYZ? Just got this email from the Samauri – I cannot tell you how excited I am to join this new venture!!!!! Here’s the pitch –
Had a phone call for something like this the first week Zeek collapsed…yesterday got an email from some woman I never heard of pitching another. No way would anyone have my phone number and email address unless insiders got ahold of it.
For sure our names/information have been sold to others in the MLM world…and probably worse.
Make sure to ASK where they have got your phone number from, for each of those calls (if you receive more calls).
The ones who have called you have probably bought name, number and email as “quality leads” from a company, bought in good faith. It’s nothing wrong in that, but somewhere in that system the “good faith” theory will fail.
The data can either be from Zeek’s database or from someone’s private database — probably someone in your upline.
If you are able to get the name of a company, e.g. “I have bought it as quality leads from company XX”, it can be possible to prevent further use of the whole database (if it is a copy of Zeek’s database).
I don’t understand “prevent further use of the whole database”. Are you saying that if I find out who the seller/provider of my e-mail and/or phone information, that I should report this to someone???
I emailed the woman yesterday asking how she got my email address. I haven’t heard back. She has her name, website, phone #.
What you do is you threaten to sue her under the Federal CANSPAM act and “Do Not Call” list (sorta, but she doesn’t know that…) unless she explains where she got the info, and NEVER call you again. If she hangs up, publicize her on the spam block lists.
It depends on what kind of database it is.
Zeek’s database had more information than a “personal use database” used by your upline. Zeek’s database should preferrably be stopped from sale or use.
If it’s a personal database then it’s not that important, it’s just a “contact list” for uplines/downlines. If it’s Zeek’s database then it’s more serious and probably illegal to use, sell or buy. I’m not familiar with the laws in the U.S., but the EU has very strict rules for databases.
Information can help you to identify whether it’s Zeek’s database or a personal one.
Zeek’s database belongs to the Receivership, including all the copies of it. It has been involved in a possible crime, so it should normally NOT be tradeable.
On my “to do” list tomorrow and/or Thursday. Thanks!
I’m thinking it’s Dave Kettner’s contact list. I won’t bore you with the why’s at this point. But am doing a little process of elimination, checking with others who may have gotten similar emails.
In any event, I never gave him permission to share my information with others. It ticks me off. Technically I’m not in his downline but subscribed to his newsletter so that I could stay apprised of what that group is up to. So, that means he’s giving away my info or selling it.
I’m gonna follow K.Chang’s advice with all of them…and would urge other Zeek affiliates to do the same. Dave and his cohorts are making it way too easy for these piranhas to feed off of us.
From Buddha: 🙂
1. Have the right view
2. Have the right intentions
You can CHOOSE between different viewpoints. When you want to get information from someone, you can’t have a “threatening” viewpoint or intentions.
So the best strategy is probably to RELAX, and start from a point where you don’t feel it is a problem, and try to get a little more information as best as you can.
The person who has called you or sent email is NOT the problem here, and shouldn’t be treated like it either.
Personally, I’m mostly CURIOUS about it. My guess is that Name and phone number has been bought as “quality leads”, from a company selling stuff like that. I’m curious about WHICH company, if it’s one of the fake customer companies connected to Zeek or another company.
Then I’m curious about what type of database it is, a copy of Zeek’s database or something else. So for the first 5 steps I’m only interested in factual information, and I have NO other intentions. Any intentions will come later, when I know what it’s all about.
With a viewpoint like that and the lack of negative intentions, it’s much easier to get answers from people.
Wow, you got my number. I will be very diplomatic and remember my grandma used to say “You catch more flies with honey than vinegar.” To which I have my own p.s. sometimes, “When the honey doesn’t work, bring out the flyswatter.”
.
I am curious, though, and that will be my mindset. Thanks!
🙂
You can always do both… If she doesn’t cooperate, then use the threat.
Remember, carrot and stick work together. 😀
Has anyone noticed all the Zeek copycats popping up? Bluebirdbids, Funkyshark etc.. All these are claiming a penny auction is the “Backbone” of the profits.
Most of them are in “Pre-Launch” offering founder positions from 500.00 to 1000.00. I was contacted by someone I know to join BBB. When I looked into the site I told him to bewere because there is no owner info.
a/k/a honey and flyswatter. 🙂
There are three I’m planning to contact…
Oh, yes. Oz has a special ’roundup’
https://behindmlm.com/companies/mlm-penny-auction-opportunity-prelaunch-roundup/
I’m penning my “genre review” soon.
SOP when a “next big thing” HYIP ponzi closes.
Believe it or not, there are still new “autosurf” ponzis being launched every week, 4 years after the very public collapse and subsequent prosecution of AdSurf Daily.
In practical terms, fraudsters see Zeek members as being “pre qualified” targets for their scams.
IOW, ex Zeeklers have already been conditioned to believe 1% a day is possible, Penny Auctions are uber profitable and the Ebil Gubmint is responsible for their losses.
Out of the rumoured million plus members of Zeek, they only need to pick up 100,000 or so new HYIP players and they’re happy.
The sad part is the person who contacted me about BBB, Was also big in zeek and they are not sure what to.
He has realized, with what I showed him about BBB, that they are being scammed again. He told me that some of the zeek higher ups are worried because they spent all the money they made and dont know how they are going deal with the clawbacks or just paying the bills.
I can see one flaw. You haven’t analysed the problem, or you have analysed in a similar way as when SpeakAsians drew the conclusion that negative news was the cause of the problem, why SpeakAsia was shut down.
People will focus on what they see right in front of their own eyes. So when someone calls with an MLM-offer, that person will be identified to be the real problem. But the cause of the problem is somewhere earlier in the chain, at the source of the information rather than where the symptom becomes visible.
STRATEGIES:
* Flyswatter? Legal threats is usually a bad strategy, and it can probably be confirmed by several people who have tried similar strategies here. You can find one of the examples under “Carbon Copy Pro”.
* Honey? Do you really FEEL like that? Most people are not THAT good in acting, so they send out a confusing set of signals rather than the real thing. Troy Dooly have failed using strategies like that, over and over again.
For the honey strategy to work, it will usually have to be REAL. Often people will only fool themselves rather than the other person if they try that strategy.
For the flyswatter strategy to work, you will usually need to have a solid foundation in facts, with no weak points.
Here’s an imaginary answer from me to a CANSPAM complaint:
“She has voluntarily signed up on a mailing list, with name, address, phone number and email-address. We have sent her lot of newsletters and updates during 3 or 4 months. And now she suddenly starts to complain when we call her, instead of just signing off?”
Experienced people can have lots of counter strategies, so legal threats are usually NOT a good idea. Suddenly you can end up with a very weak case.
Quite a few of them are of the “the evil gummint shut down our legitimate money making business” mindset, so it’s totally not out of the question that they’d join yet another ponzi which operates virtually the same.
I’m just glad that some people are seeing through the BS and recognize a new scam for what it is.
Seems like Craddock is suggesting people not to file out the claim form to get their money back. What a wicked man!
But I wonder how Zeek Receiver going to procceed the refund. I read from the last CEP case, the victims didn’t have to file out or do anything. The Receiver just put out a list with the victim names and the amount.
If it is not correct then the victims will have to file out a special claim form to prove their claim. If the amount is correct, then they don’t have to do anything, and the Receiver will automatically send them the check once the case is wrap up.
Receiver stated that soon he’ll put out a survey form (not a claim form yet). it’s in his updates on his website.
He has October 8 to present a liquidation plan to the judge. Once that’s in place, then comes the clawbacks. THEN you can talk about restitution.
About a week after Zeek was shut down, my credit card that I used to purchase bids through Solid Trust Pay, showed up with 34 fraudulent charges back to back of $19.99 each.
That card had never been used anywhere other than once at a local and trusted restaurant, and once at my grocery store I have done business with for years. The card was new.
I, of course put a lock down, shut down of everything. And now I will have to have my credit and my identity monitored for the rest of my life.
The problem is when they are surrounded by like-minded peole (all of who are also insane), they can’t get out of that little insane world. It’s called “communal reinforcement”.
http://amlmskeptic.blogspot.com/2012/09/bad-argument-communal-reinforcement.html
That’s not entirely correct.
The receiver required members to register with the receivership.
He then verified the claimant was eligible and in what amount.
Unfortunately (or fortunately) many members took the advice of the anti government people and didn’t register
Around 11,000 people did register of whom 8,400 were verified, each receiving 100% remission of their losses.
To date, the government has returned about $58.8 million of the approx. $80 million seized from AdSurf Daily and prosecutors have recently (August 2012) applied to the court for permission to re open the remissions process for members who may have missed the January 2011 remissions filing deadline.
Anyone being told otherwise by their Zeek contacts is being lied to.
That, BTW, was with regard to the latest big HYIP ponzi collapse, that of AdSurf Daily.
The CEP case was much smaller than either ASD or Zeek, coming in at around $12million in total.
Many long term observers of the HYIP ponzi scene know from experience that victims losing money is just one side effect of becoming involved with the underworld of get-rich-quick schemes and HYIP ponzi scams.
Most n00b members of Zeek would never have even been aware of non bank payment processors before becoming involved, yet they happily signed up and gave up personal details.
Many people just blindly took Zeeks’ word its’ “Hong Kong” and “Cyprus” banks were secure and legit.
I’m sure yours won’t be the last identity theft and credit card ripoff stories to come out of the Zeek fiasco.
The card I used to pay for my monthly subscription had 35 charges all back-to-back for the same amount. I disputed it but interesting to see someone else also had this anomaly.
If the scammer had just made one charge for $700 I might never have seen it.
Also am disappointed the bank didn’t stop it automatically after the 20th charge for the same amount within seconds of the last, they’d realize it was either fraudulent or some really bad web application submitting repeated transactions.
Ok, I think I have a little problem. A few final weeks before Zeek was shut down, I decided to pull out all money and quit as I suspected I might be in the middle of a ponzi scheme.
What I did was, I changed all my personal info in the back office to some fake info, including credit cards to prevent ID theft later on. The only thing was real was my name for the purpose of withdrawing money – I did the same for the entire family….
Ok now… I wonder what kind of info does the Receiver need to verify…. Oh great, I think we’re gonna have a difficult time with the registering process later on.
Worry about that bridge when you actually reach it. (Better if you remember what that “fake info” was, but it’s not essential)
And to Jimmy who also has had fraudulent charges… yes, we are all going to have to watch our backs a very long time.
I cancelled all credit cards associated with Zeek one to two days after the collapse, so I seem to be okay with that one. The Social Security # is the one that concerns me. I would recommend Lifelock, unless you know of another service that others have used. We’ve had it for years and get regular updates, etc.
We were notified several years ago that an application for credit was made… it was my app, so it proved itself to me then. We are upgrading to the deluxe package when our membership rolls around in a month or so which will protect checking accounts, etc.
We had considered getting a Zeek account in our business…thankfully we did not do it.
Also, thanks for sharing your bad experience with the fraudulent charges. I’m going to contact my little group of friends I got into Zeek and let them know to be sure to cancel their cards and check them carefully. I know several of them took my advice and cancelled right away.
So, what we can expect here is the Kettner/Disner types are going to tell people not to file in this case either. I guess the reasoning there is less people to have to be paid out of the receiver funds, which means more for them with less clawbacks, etc.
Carpe, you are right….what a wicked man!!!!!
Less claimants would surely mean a larger prorata distribution for those that do eventually have approved claims but I think the intention for now (given their legal posture) is not to acknowledge the authority and legitimacy of the Receivership in any way.
We’re all assuming here that those who were advising against submitting claims were not doing so themselves.
I don’t believe for one second that was the case.
By the time this is finished (Zeek, that is) most sensible people will have realized they have inadvertently walked into a criminal underworld the likes of which they could never have begun to imagine existed pre Zeek.
A world of scams within scams within scams, that is.
Count me as one of those people.
I was aware of these “opportunities” and knew to stay away, but I had NO IDEA the extent of and number of these things before my little hometown was caught up in the Zeek saga.
It is stunning how many of them there are, and how quickly more pop up. But most disturbing are the serial scammers who seem to live their lives in this world and live to perpetrate these mindless, soulless scams.
Back in late August, there were a lot of statements from Craddock/Kettner/etc. on the Affiliates United FB page about having “PROOF’.
AUGUST 23:
AUGUST 24:
AUGUST 26:
Now there are no statements on that FB page prior to August 27.
How’s all that “PROOF” working out for them now? It looks like if they had such strong “PROOF”, their efforts would have moved along a lot quicker than they have up to now?!?!??
I’m well aware of communal reinforcement. My in-laws are also very religious as are most of the other Zeek victims around here, so of course they’ll keep believing it when “everyone else” also keeps believing it.
It’s the reason a lot of MLM’s are compared to cults, because the mindsets are very similar. Surround yourself with like-minded people, don’t listen to any negativity, and shun or speak bad about any naysayers.
Anyone want to explain how they got all that “proof” from Zeek’s corporate office after the SEC took over the entire office along with all files, etc.?
I’m guessing this “proof” is nothing more than, “the lawyers told Zeek months ago that their business was legal.”
I share your basic cynicism as there is no doubt that people advise one thing and do another.
But if, as I believe, the Zteambiz “core group” is comprised entirely of Zeek’s net winners then it is hard to imagine what benefit that group gains by filing a claim for themselves no matter what the net losers do.
Its far more likely the “core” will be the object of clawbacks than receive any future payout from a claim against the estate.
But, as is often said nothing ventured then nothing gained.”
Jimmy, did you use Solid Trust Pay?
You have just described one of the main problems = people’s willingness to believe in something, extended to a “community” or a “group”.
People are usually relatively “rational” when they act as INDIVIDUALS, acting as “human beings” rather than in complicated “social roles” where they are most likely to follow some “group rules” or something.
I have seen several occasions where typical “groups” has been the main target for scams, probably because it’s more easy to identify how to convince them about something, and they will also react more slowly than individuals.
MLM and “schemes” can have an overweight of people in their 50’ies or 60’ies in some cases, while other schemes seems to attract younger participants. Or they can be directed towards some other factors than age, e.g. some belief systems (success orientated people, selfdev orientated people, and so on).
So being “too identifiable” will also make you become more vulnerable to some scams. And that’s a big part of the problem.
Your in-laws would probably have managed the situation better if they had become more flexible in their mindsets.
Sometimes I can clearly see WHY people become victims, in other cases than MLM and scams. Often it is related to a too onesided focus, and to the person’s own “core values”, e.g. the idea of honesty (believing all other people always will follow the same idea as themselves = being honest rather than being greedy).
“The road to hell is paved with good intentions”, and with beliefs that only works in other situations than where they have been applied.
The “LEGAL” page on the zteambiz website shows the following:
Why hasn’t anyone posted the details of yesterday’s announcement on here?
(come on, you guys can come up with some good ones on this one!)
Here’s something that will make some of you smile …
I checked the front page of MlmHelpDesk right now, to count the number of comments related to various types of articles:
TOTAL:
Zeek 199 comments / 4 articles = 49.75 per article
Other 5 comments / 4 articles = 1.25 per article
CONCLUSION:
* His “normal” articles doesn’t seem to be very popular.
* Zeek made the blog become more popular.
* but Zeek also attracted comments from critics, adding more “meaningful content” to the blog than what it had before.
So the final conclusion will be that his blog became more popular when other people started to add more meaningful content to it, making it become more useable. 🙂
Flexible they are not. Once they get an idea in their head, something they want to believe, they fall into true believer mode. They can also be very intolerant of differing beliefs.
I, personally, don’t consider myself much of a follower and tend to look at things from all points of view before making my mind up on it. I’m not saying I never let personal bias enter my thinking, but I at least try to limit it.
IMHO, they have NO proof other than “Grimes, Waak, Nehra, and Laggos looked it over”. None of them is going to talk to Craddock, who’s not with the company. Attorney-client privilege and all that.
So it was shoved under the carpet and never mentioned again. “It never existed.”
Compare all their announcements and you’ll notice a LOT of shifting objectives, i.e. “moving goalpost”.
What’s the bet these records are all of the people who made money in the scheme?
Hayyyyyho gooood-bye. Craddock is running around telling everyone the SEC is full of shit, meanwhile Burns is handing over financial records detailing the top players in the scheme.
Bring on the clawbacks already and name the “Craddock 12”!
http://www.patrickpretty.com/2012/09/19/zeek-update-thousands-of-records-filed-under-seal/
Let’s see.
One attorney for Creddock’s crew appears to be Michael J. Quilling of Quilling, Selander, Lownds, Winslett & Moser, P.C. at http://www.qslwm.com
Part his experience listed is:
So, according to Craddock, he’s just one of these attorneys that loves to run up billable hours like all receivers do. lol
Gotta love irony.
And the other appears to be Rodney E. Alexander of Alexander Ricks PLLC at http://alexanderricks.com/rodney-e-alexander/
Based out of Charlotte, NC for local flavor.
I do have admire his work in getting a puppy mill shut down. 🙂 Good for him.
Both he and Quilling seem to have a decent amount of relevant experience.
From memory on the MLM.com talk show it was evident Craddock had been running around pleading his case to anyone who had ever been legally engaged with or or against the SEC.
Seems like he found a few guys willing to get their hands dirty on this pointless crusade.
Well, if you have enough money, law firms will represent you.
After all, it’s their job and I don’t see a problem with the two attorneys mentioned. It doesn’t mean they have any standing in all of this or will have any measure of success.
What I’m most interested in knowing is whether or not and when it will be made clear exactly who they represent and what they are actually fighting for.
I guess we have to wait for more motions to get that info.
I thought it was a given they were representing Fun Club USA?
Fun Club USA = Craddock and the Craddock 12.
That’s what we figure.
But as someone who isn’t exactly well versed in all this legalese, I’m just curious if we eventually get to see for certain exactly who they are representing and what they are representing them for.
I suppose eventually their lawyers will file something stating their goals but until then it’s pretty obvious their primary goal is to stop the dialogue between Burks and the SEC which will lead to clawbacks against the Craddock 12.
A dialogue which appears to be progressing full steam ahead, regardless of Craddock’s email updates.
Or Craddock’s plan is simply to file a motion have it denied, then be done with it. “We tried, but the evil gummint conspired against us.”
Then Craddock quietly exits the scene having pocketed all the legal donation money and has a mailing list of guilible bizop victims.
I think this is the most likely scenario, because this is what I would do if I was a scamster.
IMHO, he’s gonna spend a little money on the PR firm taking out an ad or two somewhere proclaiming Zeek’s innocence as a publicity stunt after his motion got denied.
The “motion to appear” already contains a major mistake: there are NO PROPERTIES SEIZED THUS FAR.
So far the receiver merely identified all money that belongs to RVG. He hadn’t even transferred any of them to the special court receiver account yet, and all that money belongs to RVG/receiver thus far, and they were all transferred VOLUNTARILY by Paul Burks.
Amen! This is a very interesting development. Wish I could be a fly on the wall of these 12…and the others who are on the Secret Service radar right now.
Given they have been able to get away with these scams over and over again, and being they are sociopaths for the most part, they may not be worried.
Hopefully the noose will tighten, and then even the most arrogant of them will start to squirm.
Wow, and the pimps and pushers for these things like to claim that the “critics” speculate a lot.
Troy Dooly’s new post titled:
Perhaps Troy isn’t aware that this concern is already a major one that authorities and critics have about the entire online HYIP/ponzi world.
Not necessarily playing them, but running them.
And the link.. http://mlmhelpdesk.com/zeek-rewards-update-were-us-based-international-terrorist-groups-laundrying-money-through-zeek-rewards/
“Terrorism” is just smoke and mirrors and will just take some temporary heat off the Craddock 12.
There’s no mystery here, just a bunch of people trying to stop their Ponzi profits from being taken away (no I’m not suggesting Dooly is one of them).
Of course, given Troy’s obsession with a possible “international ponzi ring” infiltrating Zeek, it isn’t much of a surprise that he’s now trying to make this leap.
Now, if Mr Dooly came out and said organized criminal gangs, terrorists AND the Craddock 12 HYIP ponzi profiteers were under suspicion, perhaps he would regain some of his lost credibility.
I agree..and I don’t see why it’s far-fetched to believe that perhaps those in international rings could have in some way been using Zeek and any other companies they can to launder money.
Since the extent of my knowledge of money laundering is limited to dollar bills left in jeans going through the washing machine, I don’t presume to enough to intelligently comment.
But Troy does make a good point that it appears Kenneth Bell’s background equips him to filter through the many documents that are now sealed. In the end who knows what we are going to find out. The plot thickens…
And so now, Troy is trying to keep his site alive with this new “Terrorism” angle just posted. I think it’s called, “drumming up business/traffic.” And he knows that.
I’ll second and double that “Wow”.
Troy will get lonely at the mlmhelpdesk without some wild speculation to yak about.
Just when you think he’s starting to come around, he takes another turn.
Does Troy need to add another section to his site, ‘Excuses Forever for Zeek?’
I don’t see it as being far fetched at all.
On the contrary, I’d be asking what makes people think criminal gangs WOULDN’T or COULDN’T be involved.
Think about it.
We KNOW at least $600 million was involved.
We KNOW unregulated offshore banks and payment processors were involved.
We KNOW many of the participants used false names and addresses.
We KNOW it was all faked behind the scenes.
We can guess that unless Burks and co were really, really stupid, accurate records were not kept, but, in fact were deliberately NOT kept.
IOW, it was all set up for money laundering on a giant scale.
And that’s before even mentioning the possibilities for raking off millions of dollars as well.
Hey kids, Robert Craddock is so scammy he tried to file a Patent / Trademark with the United States Patent and Trademark office…. On the word “SCAM”.
Info right here, includes contact info..
http://tsdr.uspto.gov/#caseNumber=85543469&caseType=SERIAL_NO&searchType=statusSearch
I’ve been trying to get up to speed with who’s who in this Zeek thing and a little while ago I couldn’t remember who Fun Club USA is.
I found a good explanation on K.Chang’s site of not only Fun Club USA but many of the other players. Also, it’s a great source for Q & A for Zeek affiliates. I’ve read it before but forgot it had so much valuable info.
Thanks for your hard work, K.Chang, and all of you regulars here! Here’s the link to the page –
http://kschang.hubpages.com/hub/Zeek-Rewards-Recovery-QA-all-sourced-from-news-reports-and-experts
I know this is off topic but does anybody else think Troy is wearing eyeliner in this latest Zeek video?
Agreed. A guy named Soprano was my cousin’s upline.
We could surely speculate that criminal gangs had their fingers in the pie. After it was baked? Or at some point. And that is likely true.
We would need evidence that Burks and a group(s) were collaborating, and when this collaboration began. To jump from a thing starting as one thing and then becoming something with a specific intent. That being a money laundering enterprise.
Would this go back as far in time as the Free Store Club or just when the penny auction was added? Did they (these gangs) only become involved after Zeek gained traction or were they responsible for the traction overseas? Or, was it only when the offshore banks and payment processors came into play?
It would seem at this point that the Top Twelve stateside and a few in the UK were the big earners in this Zeek deal. I don’t think they were or would be involved in terrorist activity. But, who knows for sure.
Also, would a criminal group invest in a $10,000 maximum program? They would have to wait until there was a profit to draw (VIP point build up) and then could only withdraw a limited weekly amount. A very large criminal group or co-op maybe?
I guess in time (at least a year or two), the ploy (investment) would play out and provide a ton of money to fund something. But that is a real risk to take when the program/ponzi could be shut down any day.
Somewhere, there is a stretch.
All speculation. But have at it Troy.
There are three basic possibilities:
1) There are NO involvement between criminals and Burks
2) Criminals saw a good opportunity to make a bundle and used it
3) There is active collaboration between Burks and criminals.
1 and 2 are not mutually exclusive, and I don’t see evidence for 3 unless you count the serial MLMers / Ponzu’s (that’s my new pet name for people who keep getting involved in Ponzi schemes, though its a real word )
(Troy’s video)
Filing documents under Seal was requested by Paul Burks’ lawyer, to prevent “sensitive personal and financial information” from being published. SOURCE: ZeekDoc29.pdf
That was one of the points I told Troy in a comment. “When we have access to official court documents, then they should normally have a higher rank than any personal theories about something”. But he will very often give his own theories most attention, and ignore contradicting information.
Hmmm… thanks for the reminder to update that thing! A lot has happened since.
It would be MUCH easier to launder money in places like Cypress, Malta, and such where US regulations do not reach, then to do it with a US company, where you never know when it may be closed or monitored.
I give this “international crime ring” idea VERY low possibility. There are far better explanations… such as Hanlon’s Razor.
Lol good to see they knocked back Craddock’s attempts to patent “scam”. I particularly like the language, ‘protect companies from scams’.
I suppose in Craddock’s mind the SEC and clawbacks against the Craddock 12 constitute a “scam” against Zeek Rewards.
Somewhat ironic… and delusional.
Eh, if he’s wearing makeup, then it’s more likely to be powder to take off the shine (nothing wrong with that, camera lights emphasize a shine, especially if you have a shaved head).
I actually had to film an executive at a former employer of mine, and being as how I was roped into it with no experience with that sort of thing, I muffed it terribly.
It’s more difficult to make someone look good on camera than most people realize.
That being said, I don’t see any eye makeup, to be honest.
CEP was also legally a different kind of case. In that one, the Receiver took the corporation into bankruptcy, sued the winners under preferred payments and related transactions in the bankruptcy and paid the victims as unsecured creditors.
ASD was also legally very different in that there was no receiver, and all remissions were paid out of a victims fund of the Treasury Department, the paperwork and actual payments were done by an outside vendor, Rust Consulting.
The three cases are being handled in very different ways, from a legal point of view, but the underlying strategy is to shut down the scam, gather the money and repay the victims.
Does anyone know if the recent foreclosure listed in Florida court records is the same “Robert Craddock” are dealing with here ?
I mean, stuff like would go a long way to explaining a lot. If (and I do mean IF) he is facing foreclosures, then he does not have the money to survive any clawbacks.
Xorly
@G,
exactly.
What’s more I see no reason to assume the Zeek prosecution won’t follow the trend of increasingly harsh treatment of this kind of fraud.
This is exactly the reason the President found it necessary to establish the same Financial Fraud Enforcement Taskforce responsible for the taking down of AdSurf Daily and Zeek.
In spite of what a lot of people are saying about the money largely being overseas and unrecoverable, the stuff I’m looking at now tells a very different story.
28% of affiliates are outside North America
7% of payments from Zeek in the last 8 months went to accounts outside of North America
19% of ALL payments went to the top 15 affiliates.
I’m still working on this stuff. I suspect the files I’m working with are among the sealed records turned over this week.
How did you get information that’s now sealed? I’ve been really busy this past week and drop in and out of here when I have a little time, so I may have missed something.
Not that it’s any of my business how you’re getting the information. 🙂 You may be a regular poster here…and everyone else knows your background. I’m just curious.
I’m new here…a former Zeek affiliate just trying to put the puzzle together too.
I bet Kenneth Bell is getting ready to send out as a friendly reminder 15 custom T-shirts with big targets on the back. No wonder these guys are squirming.
I’m curious if you have any rough guesstimates how much all payments are…or how much in total the 15 people received.
Seems like that will be a lionshare of clawbacks to start with. Too bad, so sad!!!! 🙂
The numbers will surely be revised as the forensic accountants go through the records but initial estimates were that $225 was immediately frozen in various bank accounts in a “$600 million ponzi scheme.”
This suggested that $375 million had been distributed. Bell recently announced that $300 had been identified ( a revision) and I assume he was speaking to more funds having been identified in financial institutions rather than in the hands of individuals.
So if 15 people truly did receive 19% of the total distributions it indicates a large payout to comparatively few.
G received data from an insider and he is vetting it. This was before the document submission to the court and request to have it sealed.
Craddock tried probably to get a “weapon” against anyone using the word SCAM on the Internet. “Hey, you can’t use the word SCAM, I have trademarked it as my property”. 🙂
But he failed to meet most of the requirements for getting the trademark application approved. He’s obviously NOT very experienced in trademark protection, how it should be applied and what it can protect.
Trademarks can protect against commercial use of a name or expression, usually from competitors’ use of it — selling similar products in the same market or using the same marketing channels (e.g. Internet-marketing).
But it doesn’t protect against other uses of the word or expression. You can’t “reserve” the use of commonly used words or expressions for your own use, prohibiting others from using them.
Apple is a trademark, but they can’t prevent other businesses from using the word “apple” in other commercial settings, e.g. when selling apples. They can’t prevent people from a general use of the word, either.
His attempt to trademark SCAM would have been a rather weak strategy if he had used it.
Ok, so 19% of the estimated already paid out of $375 mil – est by SEC – is $71.25 mil. This means 71.25/15 = 4.74. So, each of the top affiliate received between 2-4 million dollar? This is kindda nice clawback! 🙂
Wonder how much will the Receiver allow the winner to keep as a lottery award? My in-laws took out just a few thousands more than the initial investment. Hope she will not face clawback as she was using it to pay off her credit card debts.
Don’t just look at top 15. Take the top 100. Take anyone that made over $20k profit (curious to know where you rank if your profit was >= $20k).
Go after them and you recover most of the money.
Think of the pain that will cause the “MLM Leaders” who backed this horse. They were certainly think twice before backing another Ponzi, so some good can come out of this, yet.
“Zeek is changing lives” alright.
LOL, I was wondering what the hell Oz was talking about.
I missed the comment that linked to Craddock’s attempt to Trademark the term scam. ROFLMAO.
Maybe he should also shoot for pimp, pusher, and shill.
That is absolutely hilarious.
Do you all have any knowledge from past ponzi’s, as to what happens to people that took out a lot of $, but spent it all? How does the legal system handle that?
I mean in reference to clawbacks
@Carpe
A Receiver is allowed to use business judgment in deciding if and how to pursue recoveries, therefore the cost required to recover is part of his decision matrix.
That being said a Receiver is allowed to file an “en masse” suit against all net winners (full listing of names and amounts required) and employ a negative notification scheme. This means that his claim against any party will be deemed accurate UNLESS the charged parties affirmatively and successfully contest his allegation.
Once the notice period has run and a hearing is had any money amount confirmed by the court becomes enforceable against any named party.
Normally this results in a judgement amount that accrues interest for the estate and facilitates eventual payment from the net winners. The Receiver takes whatever steps he deems appropriate to collect or compromise the judgments.
You are right about it affecting future “Plan B’s” for these people. My sponsor probably made $20,000 and put in $3,000 I think. His sponsor (really the guy we know best and reason we signed up) made about $100,000, having put in $7,000, and had a RPP balance of over $100,000.
Sadly, this guy doesn’t have much left. He like us had a business that was failing and used the money for paying down debt. He did buy a boat, but it was not extravagant, a small fishing boat which he now has up for sale. But I know there’s no way he can pay the money back at this point.
I would feel more sorry for him except he’s already in a Plan B that I believe he was in before Zeek collapsed. He doesn’t seem to have learned his lesson as of this point. However, if these clawbacks are drastic, I’m pretty sure he will be cured of the get rich quick ponzis.
When I talked to him for the first time in weeks recently, he said the number one question his downline was asking, “What else is there that we can get into?”
I have a feeling that will change once the clawbacks start happening.
The attempt itself reveals alot of details about Robert Craddock’s strategy, e.g. where and why it fails.
He has ONE successful attempt to take down a website, the FHTM case against Mr. Isaac, something I will consider to be “an easy opponent”.
You can clearly see that he has overestimated his own skills in the answer from the trademark attorney, e.g. “Scam is a commonly used English word, so you don’t have to translate it. The translation will be removed from the application”. 🙂
And the attorney actually advised him to use professional help, based on the number of mistakes in the application. Retelling it using my own words: “Your application has forced me to write nearly 40 pages of detailed refusals. Please use some professional help next time”. 🙂
If history is anything to go by, there won’t be another “Zeek” type HYIP ponzi for 2 or 3 years at least.
There’ll be some which last a few months, but none of them will be the size of Zeek nor have anywhere near its’ lifespan.
That is not surprising at all. One of the things that stands out most when you read his updates and website is the fact it looks like rough draft form.
Now, it’s one thing for blog posts, e-mails where we use more informal language, have a few run-on sentences and misspelled words here and there because it’s more like verbal communication. Whenever I have on my “professional hat,” though, as he should, I never let anything go out until I know it’s been proofed and edited.
Seriously, it looks like a 5th grader writes his stuff, if even a 5th grader. My 11-year-old granddaughter has better grammar and writing skills.
He may think he’s a big shot in the MLM world, but the guy would never survive as an attorney in the non-MLM world if he had to spar with most of the attorneys I know.
I don’t think so…if these people have the sickness…the addiction. They can justify anything. Trying to talk sense to them is just like talking to a wall.
I know…that’s what I’ve been doing just this morning, with not one tiny grain of success.
That probably isn’t true, unless you’re surrounded by income opportunity seekers. Most other people will NOT look for the next opportunity to join when another one has been shut down.
The next case on my radar is probably Lyoness, Keith Laggos’ “Plan B” that made him being kicked out of Zeek, a couple of weeks before the shutdown.
A general method for checking whether or not something is a scam is to check WHERE it is being marketed. MoneyMakerGroup.com and TalkGold.com is clearly a red flag.
Is that a question directed toward me? Since it’s right after my comment… If yes… Then…. I wish I have a rank in Zeek in term of making a net profit.
I only had two people in my downline, and none of them was putting in any money. They just lost their subscription fees, and thanks goodness Zeek was having problem with their credit card payment, so they didn’t do any auto withdrawal on my downline for 2 months. So, my downline only lost 1x subscription fees.
In other word, I’m at the bottom in the Zeek line. I didn’t have enough time even to recover my initial payment when I decided to quit Zeek business.
My sponsor took out 8K per week for the last two months due to a large downline, but I don’t think that he is among the top 100 people in Zeek. I think the top 100 must be making more than 10K per week.
@Hoss: thanks for your explanation. Based on what you said, I think the Receiver can still go after almost everyone in US and Canada regardless of the net amount. There is a credit bureau that the Receiver can always turn to, or he can sell the debt to the collection agency for 60% of the debt.
It is painful to read his news letters. He writes an entire paragraph that should be comprised of 5 or 6 sentences but instead he just stabs in a comma here & there and lots of ‘and’ words.
Run on sentences? OMG yes. And rambles all over the place.
Three words and styles he should embrace come to mind: succinct, concise and comprehensive.
Elementary level indeed.
That’s going to break the hearts of 1 or 2 million Zeeksters.
Hey…he’s trying to prevent his win fall from a crawl back. Give the dude a break 🙂
Actually, I think those of us who made zero are lucky. At least we know where we stand right now. We put in $6,000 and our RPP was about 25,000 when the collapse occurred. At 30,000 is when we planned to start the 80/20 withdrawal.
So many times my husband and I wished we had “gotten in” several months before we did. Our friend must have approached us five or six times about Zeek, and we kept telling him no. It was his flashing of a $1500 paycheck that got our attention, so we asked him to come by.
Well, knowing what a stubborn person I am, he showed up with two other affiliates in tow…he said he brought reinforcements because he knew I would be a hard sell.
Well, evidently not a hard enough sell. Anyway, we did it. It’s done. Losing $6000 is nothing compared to the thought of having to pay back three or four times that right now.
Plus had we been in longer, we would have had a bigger downline. As it is, the few friends that signed in under us have no hard feelings. We all agree that if we get anything back, we will consider ourselves lucky.
Erin – I am glad I don’t have a “win fall” that I have to protect from a “crawl back”!!!!! 🙂 Too funny….
A Receiver or Trustee generally obtains a judgment against the persons who the court rules must repay money. A demand for payment will be made which will inform you that interest is accruing at the legal rate. This is enough to induce many people to pay up if they can and to be fair about it they should, but most won’t.
From that point forward the debt owed to the estate becomes like any other legal judgment with the same means of enforcement.
However, a Receiver can often maximize the estate’s recovery in the least amount of time by selling all or some of the judgments obtained at a discount to a third party debt collector.
Since the Debt collector purchases these judgments at a DEEP discount its in his interest to accept less than the judgment amount from people just to move things along.
This is where you can try to make a deal but the collector may instead play hardball and place a judgment lien on something you own, wait until you sell it, or force a sale in order to collect. If it looks like you can pay, the collector is going to want to squeeze you.
In an extreme case involving a large sum of money the judgment debtor (you) might decide to declare bankruptcy in hopes of getting the judgment discharged. This is a rarity because in most jurisdictions a judgment lapses after the passage of time (7-10 years?) or people dissipate their assets and become judgment proof anyway.
Keep in mind that judgments can can be renewed or extended under given circumstances.
Regardless of the above inconveniences its far better to start out as a net recipient facing clawbacks than otherwise because the estate never retrieves all that its owed. This becomes particularly obvious after a couple of years when it decides to settle or discount the debt to move things along.
This unfortunately leaves the latecomers to the ponzi (your recruits and formerly much esteemed affiliates) in the position of sustaining even larger… or complete losses.
Precedent and case law indicates you will be allowed to retain your initial investment even though you must disgorge your ponzi gains. In other words you do not have to pay more than your initial investment to ensure the late comers get their principal back. If there is any good news to you that’s probably it.
Thanks Hoss. Husband didn’t spend any of the money he gained fortunately. Part is frozen in the e-wallets and part is sitting in our bank.
His argument to me was that if the receiver can’t get it back from other people who already spent it, then he shouldn’t have to give his back either. I assumed they receiver would have some way of dealing with those who spent it all.
@ZeekNoMore…. I rather on the pay payback side than on the restitution side. I can always pay back, but I’m sure I’m not loosing any money.
I lost 10K, but if I consider my family members, it’s 40K total. And none of us was under each other or stack up – Zeek language.
I thought it was like an MLM things since my sponsor has been involving many MLM for years. So, I didn’t do my own research, but trust in his words only. Till I realized, he misled me about Zeek – he said VIP points ate money and I can take out all of them any time I wanted after 3 months.
Well…. One beautiful day, I accidentally discovered that points aren’t $$, and no I cannot take back whatever I like. I started to learn about Zeek model just to say…. Oh no…. Oh shoot….. Holy crap…. And my final word to my sponsor was “I’m Out!” …
2 weeks later… The entire Zeek system was also OUT with me! …. Oh how perfect!
A person in my upline amassed 1 mil. VIP points in 11 months. She joined in August 2011 and was raking in $1800 a day in July 2012 which was when I last looked in her back office. The scroll bar in her back office was as thin as a piece of paper. She had 10 tons of commissions per day off of her downline. I’d hate to be her now.
I went all in on 2/19/2012. $10,000 plus the $99 and plus $10 for the 5cc rotator. $10109 total. I found this site in May and saw the light. I had 35,000 plus VIP points, set my percentage to 50/50 and took out $10,500.
I also spent about $50 on fake customers in the 6 months while I was in Zeek, so in total, I made $340. Not exactly a killing.
I was receiving interest income statements from my bank for tax purposes at that time and was not the least bit happy about how much my money was earning for me in my high-yield savings accounts and off of my CD’s. I wanted a better rate of return/interest.
An in-law told me about Zeek. She showed me her and some other people’s back offices, flashed a couple of checks, I watched a Troy video and I decided to give Zeek a try. That’s my story. And lesson learned.
Incedently, that $340 outpaced the money I earned from my bank by a mile. But… the savings accounts and CD’s were at no risk.
I just thank my lucky stars I found this site in time to get my money back.
Was that logic correct, “you don’t have to pay more than your initial investment …”?
The correct statement should probably be “you don’t have to pay more than your Ponzi gains”.
Initial investment = your own mone
Net Ponzi gains = other investors’ money
@M_Norway
Yes, yours is a clearer and more accurate way to express what I tried to say.
That would have been a relatively normal and sound argument, if the case had been normal.
When people tried to cancel their Cashier Checks, I considered that reaction to be completely sound and normal. The reaction would have been 100% correct in other cases, where an attempt to prevent money from being lost in a scam is a very rational reaction.
A problem in the Zeek case was that it didn’t feel like a scam. People had the feeling of making money legally, and many people will have problem in adjusting themselves to the reality. A part of their brain is still in conflict with reality, and clawbacks will feel like someone is stealing their rightfully earned money.
I don’t consider people’s normal reactions to be much of a problem. Most of them will gradually adjust themselves to the reality. But exaggerated reactions can be a problem, e.g. when people are completely in denial or something.
Another thing:
When Zeek was shut down, I assumed that the IRS would be involved automatically, but it doesn’t seem like they have been involved.
It can be wise to contact them and ask for information about how to handle the situation, e.g. if you need to send a revised tax return or something.
At the same time, ask if they can publish some general information on the Receivership’s website or their own website.
What people have been asking about:
* the 1099 for 2011, how to handle that
* will they receive 1099’s for 2012, and how to handle that
Both points contains 3 types:
A. Haven’t withdrawn any money
B. Have withdrawn LESS than initial investment
C. Have withdrawn MORE than initial investment, but will probably face clawbacks.
The method “ask for general information” is some sort of “tricks”. I like to collect information before I make any decision, and I will often try to find alternative methods.
Your husband is wrong. If you have equity in a house, cars etc… the receiver can make you liquidate assets to pay the estate.
His legal responsibility is to recover all he can and if he can get 100% from you he will, if he can only get 20% from someone else, he will and what he gets from anyone else has no bearing whatsoever on what he will get from you.
Bank what you have and just wait for him to send you a letter, and then pay him. If what you have to pay is less than he wants, you can negotiate, but what you have now is the minimum you’ll get away with.
If you were to start transferring money now to attempt to hide it, that will come out and it pretty much assures you’ll end up paying everything you can up to an including losing your house etc… something about fraudulent transfers to avoid paying money you owe just right pisses off the courts, I really don’t advise trying.
Not going to try anything shady. Just waiting for contact from receiver as to what comes next. Its all been worrisome, but like others have said its better to pay back than to have lost.
How would a receiver typically contact those from whom he wants to collect funds from? Certified mail? Regular mail? Email??
Um… The Zeekrewards and Zeekler webpage are back with the same message on Augustb17, 2012.
Wonder what happened before? The filing of appearance from lawyers of Fun Club and the return of Zeek page seems to be coincident enough to claim the relationship between the two events?
Here is a best guess…
This will be effecting hundreds of thousands of people and while E-mail seems to be the obviously cheaper method of communicating it is not recognized by the courts as giving proper notice. The Receiver will use regular mail (not certified) in order to minimize postage costs.
Once notified by US mail that you have the right to contest the Receiver’s motion for recovery of funds, a hearing will be scheduled where the burden will be on you to prove you do not owe the money. Y
ou will not contest the Receiver’s Motion, in large part because it costs so damn much money to do so. (You would lose anyway (though the Fun Club group may try to disprove this.)
Therefore, a default Judgment will be entered against you and all others who do not respond…meaning nearly everyone.
Soon thereafter you will will receive a demand for payment letter via US Mail which will probably come directly to you from the Receiver because if you pay him as requested it recovers the max possible for the estate, and that is what he is supposed to do.
After one try I think the Receiver will discount and sell the judgments to a third party collection agency. (Receivers do not have the resources to track down and collect from hundreds of thousands of judgment debtors) Then the collection agency will use every means at their disposal to make good on their investment.
This will take a long time to play out.
There may also be a process between the demand letter/offer (where you are typically offered a discount of the full amount), and when/if the receiver files the lawsuit against you.
The reason for this step is because the receiver’s records may not be accurate or you may have other circumstances that require explaining. For example, you purchased retail bids for the VIP points… will that be included in the cost/profit calculation for you, or is that separate and if you purchased retail bids you are just screwed?
It won’t simply be a motion, the Receiver actually has to file a complaint and you can answer the complaint.
In some cases, receiver may contact the top beneficiaries of the ponzi scheme and offer them a “discount” if they disgorge most of their profit, as to avoid a lawsuit and their identity made public.
Clawbacks are legal under Federal law, even if you already spent the money, YEARS after the fact. Read this Federal Court decision regarding a real receiver clawback:
http://www.ca9.uscourts.gov/datastore/opinions/2008/06/30/0655544.pdf
Interesting, because it includes many theoretical principles I didn’t know about. “Actual fraud” and “Constructive fraud” reminds me of tax doctrines.
I’ll have to adjust a few of my own theories, but most of them seems to hold water.
“Initial investment = your money” FAILS, per definition rather than on how it is actually handled for good faith investors. The theory was close enough for ordinary investors, but fails when there’s a lack of good faith.
The court ALLOWS investors to receive payouts up to their initial “investment”. Ponzi schemes are “fraudulent investments” rather than real investment. You don’t have any money “invested” in them, you only have claims against them. And the claim is only valid if you have acted in good faith.
The best way here is to INCLUDE Zeekler as a part of a fraudulent scheme, in any claims or replies to the Receiver, whether or not you personally have used that method. It’s better to show him clearly that Zeekler was a part of the fraudulent activity than to claim something else.
The main motive for buying retail or VIP bids was the matching VIP points and the 20% commission, and the method was heavily used by some affiliates, with several different methods for how to do it (family members, friends, upline/downline, fake accounts, and so on).
I’ll guess 95-98% of the bids used in auctions were bought (PAID FOR) by the affiliates themselves. And the method was clearly meant to be used as a “cheat your upline” method, with several incentives to use it (extra commission, real bids rather than free bids).
RVG benefited from the method by getting better statistical data = the penny auction looked more profitable and “real” when affiliates used that method. So the method was an important part of the scam.
It’s no exaggeration to say the fallout from such frauds extends way beyond the immediate losses.
Let’s not forget, the responsibility for such potentially devastating effects on otherwise innocent peoples’ lives belongs SOLELY with the perpetrators and is NOT the fault of the receiver or courts.
The receiver has no choice.
Yes. You are correct. This is the stage where Fun Club LLC could make a difference for itself and its donor/supporters….which is why I think Craddock suggested no one file a claim…at least for now. Filing a claim consistent with an appropriate legal defensive posture could make a difference for them.
@Hoss – Thanks. Good information.
Off-topic (partly)
I need a “second opinion” in another thread, from someone relatively familiar with court orders, legal standing in a case and similar issues.
The case:
SpeakAsia Online (a Ponzi/pyramid hybrid with 1.8 million members, shut down in May 2011). The case itself is complicated, but my questions are rather simple — about whether or not a deal has been accepted by the court.
Short description:
Navniit Kkhosla was original complainant in a First Incident Report (FIR 60), the basic document in a criminal case against some of the leaders, where some of them has been arrested and released on bail.
Other leaders has filed a case against that complaint, trying to quash it. Respondents = Kkhosla and EOW Mumbai.
Navniit Kkhosla agreed on a deal with the Petitioners on March 15 2012, and filed an affidavit “I have received my $12,000 and are willing to withdraw my complaint”.
And here comes the problem:
The deal seems to have been stayed, since around March 21st, while the case itself has been postponed until now, with only some other issues being discussed in the hearings (stay in investigation).
Navniit Kkhosla is still Respondent no. 3 in the case.
He has been PAID, but the court have only verified the fact that he has been paid, and is willing to withdraw his complaint. They have NOT passed any orders where you can see the RESULT of the deal, so the deal seems currently to be “unofficial” (in my opinion), stayed by the court rather than verified.
The need here is to calculate the risk of losing the deal, getting the deal rejected by the court, and/or by the other party withdrawing it.
Here’s the link:
Note:
I’m relatively familiar with the case, and so is Navniit Kkhosla. We can fill in details when needed.
Exactly, only people who BENEFITED from the Ponzi have anything to fear from the receiver.
@Chang
I concur
How aggressive do you think K. Bell will be in pursuing affiliates overseas or out of country (Canada) to clawback assets?
I suspect that affiliates in English speaking countries may be under the most pressure to disgorge any profit than elsewhere around the world.
Most affiliates in the Philippines, Japan and some other Asian countries speak English quite well because they learn it in school. I’m not really sure about Russia or countries in the old Soviet block.
I don’t know how extent the law or jurisdiction might be beyond our borders nor do I know if the have the equivalent mechanism as third party collection.
I would also suspect that affiliates in the poorer countries were mostly Silver affiliates who didn’t ‘buy in’ with much money and thus didn’t earn much money. It would be a waste of time & money to pursue them.
@rdb
I really have no experience with the matters you bring up, but judging solely from what I know of Bell’s background and his own words I think he will be thorough in his efforts.
Reportedly, he has already identified liquid estate assets and has control over frozen bank accounts valued in the $225-$300 Million range Those funds are potentially available for his use in administrating the Rex/Zeekler estate.
Therefore it appears that he will be very well funded and will be able to afford to literally go to the ends of the earth in pursuit of money owed to the estate.
What treaties, laws and politics are involved in reaching across international boundaries is unknown to me but since the the world has become more financially connected and interdependent than ever before it seems likely it can be done.
Bell will have ample funds at his disposal and engage the relevant experts and international resources to handle the job but he will also be prudent and only attempt what is reasonably likely to benefit the estate.
I feel for you. My wife this weekend asked if she could get into Blue Birds because her parents were pressuring her to join up. She was upset because I emphatically refused, even after she KNOWS zeek was a ponzi and I explained my concerns about credit fraud/identity theft, she wanted to get into a new scam.
The main trouble is that she takes everything her father says as gospel, and I’m sure the more they work on her to join BBB the more she’ll get angry with my “negativity.” I swear it seems like I’m the only one around here who can recognize a scam for what it is, and everyone else has blinders on.
I only hope that Blue Birds collapses or gets shut down very soon so I won’t have this conflict.
I know… You are in a tough spot, at least I only have 1 problem person, you have 3.
Hubby just got in WCA, or whatever they call it now. He was already in Banners too before Zeek died. I think after earning money in Zeek, (even though it’s most likely going back, and he can’t see or admit that just yet), the ponzi thing has become very intoxicating for him.
Seeing those numbers of imaginary dollars building up on a screen apparently is super exciting. He won’t quit til he loses in a few of them now. He still believes they are “real”, refusing to read anything negative.
I guess I’m the one who will have to learn to change my thinking and try to cope without going nuts, because obviously he won’t ever change his. This is all really hard on a marriage and relationships…as you are probably finding out.
Problem is there is always another one. Hope after they lose enough times they quit?
If it’s inevitable, give your in laws the cash and let them use their CC to sign her up. Might keep the peace.
I guess those that are upwardly mobile, who have expendable cash, who have availability to interest free cash with no real expectation of needing to repay that cash, who were in Zeek and who have accepted their losses from just 5 weeks ago are straining-at-the-bit to get into another HYIP scheme.
I can’t remember if you said your wife made money or lost her dad’s money but she definitely doesn’t want to tell Mom & Dad no.
It is quite evident that they (mom & dad) want to game the ponzi by stacking and earn the commission off of their daughter -even at their own cost and potential loss.
K. Chang may be able to describe a behavioral disorder or provide explanation for a person not being able to say no when that is what the person should say -even if it is multifaceted and complex. It might just be called addiction.
I guess playing in high-risk schemes is the life & addiction of ponzi players and is a powerful impulse.
Good luck in trying to express sensible and rational thinking with your wife. It sounds like she is definitely trying to please her parents, but at the same time, dismiss your sound advice.
You’d think credit fraud and/or identity theft would be deterrent enough… but I guess not.
Also, she probably really feels like she is between a rock and a hard spot. Of course I don’t know all the details, but she doesn’t sound like she’d be getting into these things on her own.
She has to choose who to please…not fun for her at all. We grow up learning to obey our parents, and it’s not easy to just turn off just because we are grown up.
Yes, but didn’t many of us grow up with parents who would say things like, “If you’re friends all jumped off a bridge, would you?”
I think it’s time for you to call Dr. Phil. 😉
Repeat the mantra: think of Zeek… think of Zeek…
While it’s hard to break cycle of a lifetime of obedience, you have have to learn how to think for herself. Also, she need to learn art of “letting them down softly”, i.e. “art of polite refusal”.
Here’s a potential line: “Dad, I am a bit gun-shy from Zeek Rewards… and Blue Bird is just so much like it… You mind if I check it over a bit? I’ll get back to you…”
And of course, whenever they call again, you’re busy doing something else. 🙂
I’m not a psychiatrist… I don’t even play one on TV! 😀
The term you’re looking for is “conditioning”. You’ve been conditioned to obey your parents, and accept “my parents do know best when it comes to my affairs”.
It’s much like Pavlov’s experiment regarding ringing bell and dog salivating. You’ve learned to associate the cue with the event, and your response. Soon, you learn to perform the response on cue, without the event.
In this case, your mind automatically classified anything your parents said as “THE TRUTH”, because that’s the way it always “had been”.
Believe me I’ve thought it more than once.
Yeah but if our PARENTS told us to…different story 🙂
And, many parents have that special way of getting back at you if you don’t.
They didn’t make a dime. They joined in April but never did pull any money out. And yes, she definitely doesn’t want to tell her parents “no.” This is the same thing I’ve dealt with in the past with other MLM schemes they got involved in. They wanted us to join up, but I didn’t want to have anything to do with them since I know that most people don’t make any money at all with MLM. But my wife is totally afraid to go against her parents’ wishes, so MLM schemes like this cause a bit of friction between us.
Yes, definitely. Blue Birds looks to be another “recruit everyone you know to put money into the system but don’t bother trying to find actual customers” Zeek clone, complete with the daily spam ad requirement.
Yes, I think deep down she knows I’m right, but she’s also trying to convince herself otherwise.
When I mentioned that Blue Birds is destined to likely be shut down by the government like Zeek was, her reply is, “Well you can’t always trust the government.”
To which I replied that the SEC wouldn’t have shut Zeek down if it weren’t a ponzi, especially after they got thousands of documents from Paul Burks beforehand. But I think the threat of credit fraud and identity theft are keeping her from totally wanting to jump into this new scheme.
Yes, she does feel like she’s being torn between her parents and me. I don’t want her to feel that way, I just don’t want her to get involved in an illegal investment scheme.
The funny thing is that she complains that her personality makes her try to please everyone else but herself. I really think that if she wasn’t this way, she wouldn’t be constantly trying to please her parents.
That, and the cult-like characteristic of HYIP’s and MLM’s like this is making her parents insistent that she join.
The problem is that my in-laws have convinced themselves that Zeek was 100% legitimate and the evil gummint came in and shut them down for no good reason. So if she brings up Zeek that’s the line they’ll take.
That’s also why my wife brought up the “You can’t always trust the government” line.
I think I need to make her see it in a different light. The SEC shutting Zeek down for no good reason would be like the police going around town and shutting down various businesses for being illegal gambling parlors without any evidence.
It hasn’t happened because that’s not how the police operate, and if they did they would be out of jobs very quickly.
For a while I studied urban legends, and one of the common defenses was, “My mother told me this, and she wouldn’t lie to me.” No, she probably wouldn’t, but perhaps she was mistaken in the first place and passed on erroneous information.
Even my own mom has forwarded me urban legends via email, and I recognized them as either email hoaxes or being otherwise false. Doesn’t mean I don’t trust her judgement but I don’t believe everything she tells me just because she said it.
Unfortunately my wife hasn’t learned to develop this filter yet. Anything her parents say is taken as gospel truth.
Let’s see.
You show them the math behind the scheme that shows how unsustainable it is.
You explain how ponzis work and why Zeek is most likely a ponzi.
Shortly thereafter, government authorities come in, strike a deal with Paul Burks and shut it down as a ponzi.
The authorities then release some numbers that illustrate just how much of a ponzi it was.
I have to feel bad for those of you with spouses who have this addiction/infatuation.
Other than telling them that they either choose you or their addiction, what else can you do?
Yet another way that ponzis create victims, tearing families apart.
They’re pretty hard-headed so I don’t know that I could show them anything which would convince them that Zeek was a ponzi, or their new interest, Blue Bird.
I’ve come to the conclusion that they’re totally blinded by greed and are just trying to get rich from any investment scheme they can find.
If they continue to push my wife to join, I’ll have to use these tactics but right now they’re not bringing it up any more and I hope they’ll respect my wishes.
Well, if it’s a viable long term business, there’s no need to rush into it.
In-laws or not, I would probably be getting myself in hot water for the things I would be saying to people that kept pushing. And I’m not someone prone to flying off the handle. 🙂
Even without the ponzi aspects, penny auctions are under a lot of scrutiny.
There’s several “rewards” connected to that behaviour, other than money. So it isn’t about greed.
If you analyse it, they are rewarded through most of the process, basically with the feeling of doing something “smart” and “creating results”, e.g. recruiting a downline.
1. You can learn to live with it. That method means “solving it within the area where you have direct control yourself”, where you try to change your own reactions and mindset rather than other people’s behaviour.
2. You can try to change it. Please return to point 1, and make sure you understand the principle of “directly under your own control”. It means THEY will have to change it, voluntarily and from their own set of ideas.
Point 1 is usually necessary to make point 2 work. You can add knowledge, methods, training, change how you think, feel and act, train communication skills or whatever.
Focus on point 2 without doing anything with point 1 will usually not work. Problems are solved in that direction, the areas that are directly under our own control before the areas that are outside.
“I want my in-laws to change” has to be solved by “I will do some changes to my own methods and thoughtset, something that indirectly will make them change [the specific behaviour] voluntarily [over time, or an immediately change]”.
Really, I think it’s despicable of them to put such pressure on your wife. As in-laws ourselves, my husband and I had to learn when our daughter got married that leaving us meant she and her husband had to find their own way of doing things.
Early on, I had to be put in my place a few times by my daughter. It was hard for me but it ultimately made me respect her and her husband more.
This could be a good learning experience for you if you two can come to a mutual decision (hopefully sooner rather than later) not to make any important decisions, financial or otherwise, unless you are both in agreement.
And secondly, even if you are in agreement, have a cooling off period before acting on the “deal” or decision. That way, if you make a mistake, there’s no blame game going on. This can be carried over into every aspect of your marriage, not just financial decisions.
We have made some bonehead decisions in our 42 years of marriage, but thankfully early on we learned that whatever decisions we’d make would be done as a team.
That’s not to say we didn’t have some major disagreements over decision making, but by using that rule, I can look back and see countless times where it was good that we didn’t act on something. (Hate to admit it but usually he’s right).
The Zeek decision was mutual, therefore, it makes it way easier to get past.
Good luck!
Hmmm… Jordan “Ponzitracker” Maglich has an update on his website… Seems Robert Craddock is trying to HINT that he got a Federal Subpoena… from the SEC.
http://www.ponzitracker.com/main/2012/9/25/co-founder-of-zeek-victim-group-that-openly-challenged-sec-r.html
I didn’t get fully involved with Zeek for the only reason that I just couldn’t get the credit processors to work for me. I signed up with my credit card (one I rarely use) but it just wouldn’t go through.
I called my credit card company and it said it was in good standing since the card processor company told me to double check. Well, now I never use that card for anything else and now I’m getting attempts of small sales on it. I’m alerted by email everytime a transaction happens.
Yesterday I phoned my cc company and told them to cancel the card and issue me a new one. I suspect my number was on a list that made it into unsavory hands and it only could have come from a Zeek related entity.
Highly suspect and so disappointed to have been introduced to those crooks. The person who introduced me is still blaming the government for taking them down.
Judge just approved motion to appear pro vac hoc for lawyer of the Fun Club Inc.. It seems like many lawyers for both Rex and Receivers have filed motion to appear for the past few days. The Zeek case seems to be more interesting than the ASD case.
So now it seems like all that affiliate deposited money is going to go towards defending Craddock from the SEC, who are going after him for telling porky pies?
And my favorite part of the article:
While Craddock is certainly entitled to make the statements, according to Schamel, “it is not freedom of speech if you are obstructing an investigation.”
Did this happen to them in the ASD case, where they were called out for their scam after the scam? Just hoping the feds are treating this more seriously in every way so that it is an example.
Frankly I don’t care what they do as long as they quit trying to push my wife to get involved in dodgy investment schemes. But they have the mindset of “We’re doing X, so everyone else should do X as well.”
I personally have a “live and let live” philosophy toward life, and believe that people should live their lives how they want as long as it doesn’t harm anyone else.
So again, I don’t care if they lose their shirts or make tons of money in ponzi schemes, I just want us to stay completely out of them.
But that doesn’t mean that I won’t ridicule ridiculous beliefs like “The evil SEC shut down a perfectly legal and profitable business because people were making too much money.”
A fellow posted on the “Affiliates United” FB page today asking why people there didn’t get the fact that Zeek was a scam. A fellow named John Panella offered a long response. Among other things, Mr. Panella insists that:
That was interesting. Haven’t heard one of them discussing “proof” in about a month now (see post 469 above).
Here’s his entire response. I’m sure he’d never post such statements over here for open debate. Anyone want to take a crack at some of his points?
Um… I’ll leave it up to OZ and company to decide if that post merits any attention whatsoever. John contradicts himself over and over. This fellow needs to get a job in Washington where such blatent eyewash is commonplace. Yikes.
I’m betting the SEC knows far more than this yahoo where Zeek’s money was coming from, since they demanded (and received) hundreds of thousands of documents from Zeek.
Not if all the bids were being dumped into dummy accounts or just used by the affiliates themselves. Which, from all appearances, was exactly what was happening.
If you just took the number of daily auctions and the closing prices, it was obviously clear that the auctions weren’t producing enough revenue to cover everyone’s points, regardless if the money was coming from affiliates or actual customers.
Red herring. There’s no evidence they ever did. No massive warehouse was ever listed in the court document listing the assets of Rex Venture Group.
That’s why they stressed to everyone to do the 80/20 reinvestment, so it didn’t collapse the ponzi completely. With 3 billion points among the 2 million customers, there’s no way everyone could ever be paid. Which is exactly how a ponzi scheme operates and eventually collapses.
This guy is proving that Zeek was a ponzi without even knowing it.
There would have been soon enough. Zeek was running out of money.
No, they were watching their points balances increase. Points =/= actual money on hand. And being paid actual money doesn’t mean it’s not a ponzi.
Then why did people get paid $1 per point when they cashed out?
The only battle they’re fighting is for 12 people to keep the money they obtained in an illegal ponzi scheme.
Minor correction, they did purchase a warehouse at 4095 Old Salisbury Rd. in Lexington* with an estimated tax valuation of just under $755K but they reportedly paid $400k for it. But it was nothing but a prop.
They were running like what, 300 or so auctions a day, most were for giftcards and even if you won a real item most people just took cash value instead of paying shipping.
And for the few people who did want the physical item they won I find it impossible to believe that Rex Ventures wasn’t just using someone like Amazon dot com as their fulfillment center.
I don’t know what the real estate market in Lexington is like but the spread in the tax value verses what Clifton Jolley claims they paid for might mean it was a reasonable investment. And people did expect them to have a warehouse, so it was probably a pretty reasonable purchase.
And hey, now that the receivership owns it maybe they can use the storage space and loading docks to handle all the documents that Paul turned over to the SEC.
(* – It’s listed in document #30 on the Rex Ventures docket.)
John Panella (apparently a Zteambiz donor) states
I have been hearing this assertion for a month now and its completely specious. The receipt of a Miscellaneous 1099 by an affiliate proves nothing and confers no ligitimacy to the issuing entity.
Zeekler may have attributed these distributions to business expense but whether that was true or legitimate is no longer a question in the eyes of the SEC.. they weren’t.
As to the IRS, it only matches the Zeekler representations to the affiliates 1099 info. If the two match the IRS takes no immediate action unless their screens call for further scrutiny. No action by the IRS does not constitute a finding of legitimacy and there is no statute of limitations on fraud.
As of now the affiliates have paid a lot of taxes on false 1099 income and that is probably about all that can be said.
@Ground Zero
That “someone” is probably Caldwell, who only joined for a couple months.
And that data does NOT fit ANY of the real numbers we were able to pin down in the past year.
Multiple snapshots done in 2012 says the daily revenue in Zeekler is about 300-350K, AT BEST. That’s not enough to pay “12 people making a million a month” as in their July Red Carpet, much less paying any of the other 99.99% of other affiliates.
Even if SEC undercounted revenue from auction by 500% (i.e. it’s 5 times larger than it is). It’s STILL a Ponzi scheme.
This “massive warehouse”… So what? part of it was rented to a coin-op laundromat, according to Receiver’s filing. Here’s the sales brochure:
http://www.meridianrealty.com/gee/doc/4095_Old_Salisbury_Brochure-3.pdf
Was there actually merchandise stored at the warehouse? NONE was listed by the receiver. However, there’s also a separate 2 storage units rented by RVG as per receiver listing:
Who’s to say that merchandise wasn’t actually stored at the mini-stroage before the shutdown?
Those guys are grasping at straws, using “secret data”, and speculation. There’s no proof that the warehouse was purchased to store stuff for the auctions, it could be just for the office and disguise.
They then actually ADMITTED it’s a Ponzi, except they think it doesn’t mean what it does.
Exactly, affiliates bought the bids, which generated the revenue, which they got paid with. They paid themselves. Thus, Ponzi.
Then they had to repeat the “no victim until SEC came along”.
Hilarious, isn’t it?
@Ground Zero (quoting some delusional guy)
Robert Craddock’s buddy Gred Caldwell?
Paul Burks willing agreed to surrender up the company and not contest anything. That’s not default and there’s an obvious reason he did so.
Every business on the planet doesn’t pay you for putting money into the system though.
The SEC complaint was based on months of research and the analysis of hundreds of thousands of Zeek Rewards records. This guy is just presenting “what if” scenarios.
…so that people like this guy can run around the internet asking ‘how can Zeek Rewards be a Ponzi if they bought a warehouse’.
Buying a warehouse doesn’t determine whether or not your business a Ponzi scheme, the business model does.
No it doesn’t, that’s why the SEC shut down the Zeek Rewards Ponzi scheme. Another month and they’d have had an even bigger mess on their hands.
AdSurfDaily paid $800,000 cash for a building just prior to the U.S. Secret Service raid in 2008. After the raid, some ASD members claimed the building purchase was evidence that ASD was thriving and thus not a Ponzi scheme.
The ASDers also claimed that ASD’s purported 75 employees were evidence that ASD was thriving and thus no Ponzi scheme existed.
The thing to watch for now is whether the various “defenses” advanced by the Zeek supporters get more and more extreme. Some of the ASDers retreated into an infinite set of contingencies, with the “defenses” becoming more and more twisted and tortured.
PPBlog
Oh, I dunno,
If I was running a $600 millionplus fraud, laying out a mere $400,000 to keep people fooled and to keep the fraud running and gravy train rolling is probably what I’d do as well.
On the other hand, if I WASN’T running a $600 millionplus fraud, I sure as eggs wouldn’t sign away $4 million and all the assets of my business without at least putting up a teensy bit of resistance.
But, that’s just me, of course.
The similarities between the Zeek and ASD scams are amazing, right down to the purchase of the warehouse right before the demise of each.
Guess it’s safe to assume the principals figured, well, it worked for us last time, so let’s follow the same script. Sure, Andy went down…Burks is going down (pretty safe to assume criminal charges are coming). But the Founders Club made lots of money both times, so they are likely figuring the same will hold true again.
And THAT is the elephant in the room HYIPers would like to keep hidden.
The REAL money in these frauds is made by the “Founders Clubs” “insiders” and professional HYIPers who compose the 10% at the top of ponzis, pyramids and endless chain recruiting schemes.
Anyone who thinks Paul Burks and the public faces of Zeek Rewards had the wherewithal to pull off a fraud like this on their own merits really needs to get educated quicksmart before they lose even more than they have already.
Great comments from everyone regarding Mr. Panells’a statements. You all apparently thought what he had to say was as “interesting” as I thought it was.
I’ll throw in a thought or two myself.
Let’s say that they have their “proof’. In my opinion, that could only mean one of two things. One, they have the same documentation from the Zeek office that the SEC has. Or two, they have something different than the SEC has. Let’s see how each of those would work out.
In instance #1, they have all the same stuff that the SEC got from Paul Burkes. For that to be any good to them, their only hope would be to prove that the SEC was completely incompetent in analyzing the documentation that they got from Mr. Burkes and Zeek. Or prove that the SEC lied about what the documentation showed.
#1 doesn’t have a lot of potential for our “believer” friends.
In instance #2, they have something different than the SEC got from Paul Burkes. In this case, for the material to have come from Zeek itself, one would have to believe that Mr. Burkes kept two sets of books. One set that showed that everything was fine, and one set that made Zeek look like a Ponzi/Pyrimid.
The problem for Mr. Panella, Mr. Craddock, etc. in this situation is that for them to have a set of documentation that shows that everything is OK, you would have to believe that Mr. Burkes screwed up and gave the SEC the wrong set of books (the set of books that made Zeek look like a Ponzi/Pyrimid) and our “believer” friends somehow have the set that showed everything was fine.
This scenario won’t work out for our “believer” friends. The Judge isn’t going to care about the set of books that makes everything look fine.
And for our friends to come forward with something different than the SEC has would be a problem all it’s own. What is a Judge going do with documentation presented by an outside group that is in direct contradiction to what the SEC has seized directly from the company itself?
The Judge is probably going to believe that it’s something that the outside group has just made up, and consequently send the outside group packing.
So, even if our “believer” friends have their “proof”, it’s hard for me to see how it will really be very useful to them!!
I meant to add to that:
What would our friends have the Judge believe, that the set of books they have is the real deal and Mr. Burkes just happened to keep a second set of books just for fun in his spare time that depicted Zeek as a Ponzi/Pyrimid and the SEC mistook the “just for fun” set as being real??
Personally, I’d be genuinely fascinated to see evidence of a previous occasion where a business/person was accused by the S.E.C., agreed to and complied with the subsequent court rulings and penalties, then was proven to be “innocent” through evidence provided by a non involved third party.
At the minute, Burks and Zeek have coughed up in the vicinity of $300 million.
Maybe it’s just me, but it seems like a hell of a sacrifice when “evidence” supposedly exists to avoid any penalty at all.
Logic dictates if Mr Burks had taken an extra day or two and perhaps tried a little bit harder he too could have identified the same source/s as Mr Craddock and friends and for Zeek it would still be business as usual.
Who knows, maybe Mr Burks is an eccentric millionaire to whom $300 million is pocket change, he was simply tired of running a eleventy two billion dollar company day in and day out and the S.E.C. action was his way of retiring.
Actually, everyday in the back office they would say something like, today award is $400. If the Zeeker set the repurchase preference as 0% then that $400 would turn into Cash Available, and the Zeeker can request a cheque, and this is what people argue that everybody was being paid everyday, and no one was a victim.
They argue that instead of request out that $400 to th bank then use that $400 to buy back bids, Zeek make it easy for us to just buy back points right away internally, and continue to build our business fast and easy.
Zeek is wonderful and always cares for its affiliates in that way. (Of course if you use that $400 to buy another 400 VIP, then your $400 just gone, and you can no longer cash out that $400, and your newly 400 VIP will also be gone in the next 90 days.)
But here is the problem, and this problem was also asked by many affiliates one week before Zeek was shut down. First problem: if you initially put in $10,000, you cannot purchase any more VIP from the external fund, so the above arguement is false, if I request cheque for that $400 to the bank then the $400 becomes external fund.
There is no way I can continue to purchase another 400 VIP using that $400 from my bank. The system designed to force me to keep the money in it, and watching artificial money reward everyday and useless point growing.
Second problem, when Zeek put in the mandatory advertising and compliant package for $30.00, they did not allow people to use the internal cash available to pay for this package. People complainted, then Zeek allowed silver members for third world countries to use internal fund to purchase for this package only.
The reason Zeek said was that $30 is a lot for the people in those poor countries, so only those people will be able to use cash available to pay for the mandatory package. Many people started to question this explanation from the Zeek employees and leaders.
If cash available is real money then how it would help the people from third world countries, and not us? Why we can afford to pay $30 from our credit cards, but not from our cash available? And why people from third country can only afford to pay from cash available but not from credit cards?
If cash availble and the daily reward is real money from the real profit, then why is there a problem for me to use it?
No Zeek employees nor any leaders dared to answer those questions in the forum. Other faithful Zeek followers slamed the people who asked those questions, and there was heated arguement in the forum until the news of the NCDOJ broke out.
Those who use their head could easily see that it was a clear sign that Zeek was having problem with their cash flow, and could highly be in a verge of collapse as the SEC pointed out.
So, the arguement that everyone was being paid daily and had a choice of using it whatever he/she wanted is false! This is how Zeek fooled people.
And those who were in Zeek, and still use this arguement are those who – i think – have an agenda of fooling people for their own gain, or those who just use their head for a purpose of decoration only.
Here is another similarity: The first public document by federal prosecutors in the 2008 ASD seizure described the seizure of 15 bank accounts.
The first public document in the Zeek case included this line by the SEC:
“Defendants currently hold approximately $225 million in investor funds in approximately 15 foreign and domestic financial institutions . . .”
PPBlog
P.S. The building ASD purchased was not a warehouse; it was an old lodge in Quincy, Fla., that ASD claimed would be used for office space.
Either the Founders Club was following the script to a “T,” or these are some bizarre coincidences. Frankly, this thing is so weird that I won’t even try to speculate which it is.
And this “warehouse” Zeek bought comes with some nicely furnished office space too.
That is for sure. The SEC said that Zeek would have collapsed under its own weight within a month or two had they not stepped in.
With all the complaints on file with the NC DOJ, plus at the BBB and all of the software troubles Zeek was having in the last three weeks of operation, Zeek’s days of operation were very short.
I would guess that with all the mess that was going on that as high a number as 60% or higher of affiliates would have set their repurchase percentage to 0% and started cashing out. That would have collapsed Zeek within a month or two. I damn sure would have!
Even if Zeek implemented the ZeeBates program as was planned on 8/22, it would not have added enough appreciated external income to hold off the demise of Zeek. In essence, just another layer of obfuscation would have been added but would have only fooled a few affiliates for a while.
Also, once Zeek added qualifiers that would have to be met in order for the affiliates to receive their daily profit share, that would have set off a cash-out chain reaction because Zeek said in order to qualify for your daily profit share all you had to do was post your ad daily. Easy money.
Many affiliates would not have jumped through hoops to earn their money the hard way.
Caldwell’s attempts to scrub the internet of negative comments and bring affiliates within compliance would have failed and Zeek would not have been saved!
Whoever that poster on the Affiliates United FB page was, his post was definitely intended to advance the argument that a legal battle could be won, but it can’t be won. But he does have an audience.
It would seem to me that only an Appeal process could turn Zeek’s death penalty around, but that is not possible. Burk consented to surrender RVG and its assets plus pay the 4 million dollar fine. It stated in the documents that an appeal contest could not be brought and thus would not be allowed.
Put a fork in Zeek, its done. Craddock and the 12 don’t stand a chance. Their case will not have any merit, will be stayed and dismissed. So much for avoiding the clawbacks. The crying in the milk will begin.
Had the SEC not stepped in and shut Zeek down, things would have gotten far worse for the affiliates. Zeek would have collapsed and Zeek’s page would have just went black and I don’t think that there would be any chance of restitution. Just a complete loss for all the affiliates who had been in Zeek for only 3-4 months.
The founders and all who had made a killing with Zeek would have preferred that. No clawbacks would happen.
And here’s the listing itself:
http://www.meridianrealty.com/gee/doc/4095_Old_Salisbury_Brochure-3.pdf
3250 sqft of office space
There is a proof of claim process and a claw back mechanism (preferences) under the BK code which are not disimilar to the way a Receivership recovers money for an estate.
SEC intervention and Receivership was definitely the way to go here as it is a more autocratic path (“relatively” streamlined) and will prevent a lot of game playing and dissipation of assets that would have occurred had Zeek continued on and eventually collapsed under its own weight…plus it was illegal.
3250 sq. ft. is not really that big at all when you consider that there would need to be an area for receiving product and then an area where product is sorted and shelved.
There would need to be alleyways between rows of shelving. Maybe alleyways wide enough to maneuver a hyster (lift truck) for stacking products on pallets.
Minus out a small 8′ x 10′ office area and a small 8′ x 8′ rest room from the total storage area and that leaves only 3106 sq. feet. Then lets say another 30% of floor area would be lost to alleyways. That would leave only 2174.2 sq. feet of actual storage area.
Since a laundromat was renting part of that building, say an area 20′ x 30′, we would have to minus out another 600 squares leaving only 1574.2 sq. feet of storage area.
It was being said that Zeek bought a huge warehouse. That is not the case.
Deception is a huge part of sucessfully pulling off a Con game. Paul was good at deception, well at least until the SEC came along.
@ “Hoss”
Thanks for that correction Hoss.
3250 sf is only the office space amount.
Warehouse space is listed at 24,240 sf for a total of 27,490 sf.
But even that isn’t very big for what needed to be a multi-billion dollar penny auction company based on payouts.
3250 sq. ft. is the OFFICE. The warehouse part was 24,240 sq. ft., and the total area was 27,490 sq. ft.
The total building is appr. 52*52 meters, 170*170 ft.
It’s a typical “small production company” building, with up to 20-40 employees total. It’s not a typical warehouse, but it can act as an “all in one” solution for a small company (production, warehouse, local headquarter).
The building has probably been bought as an ILLUSION, to make it look like Zeek had some plans. It was a relatively cheap investment, only around $750,000. But the building is neither designed as a typical office building nor a typical warehouse.
Guys, I should have clicked on the link and read the total area of that building.
I was way off base. Thanks for pointing that out.
Disregard my post.
The warehouse is well suited for storing items purchased by straw buyers or fake accounts. Drop shipped items could be sent to this address, stored and resold at auction again and again I know it seems far fetched at first glance but maybe there was method to what seems like utter madness.
Aww… No more fun… Zeek affiliates united Facebook just got closed down by suggestion of Craddock’s attorney, and there will be no more update from Zteambiz to avoid making the SEC upsetting any further.
http://asdupdates.com/wordpress/
ASDUpdates.com posted the final announcenmnet from Kettener.
SUGGESTION ???
That would be the understatement of the year if it were true.
I mean, can anyone think of a more stupid thing for someone involved with a court certified $600 MILLION fraud to do than posting the sort of nonsense Mr Craddock and Co have shot themselves in the foot with almost daily ??
The “attorney,” should he or she really exist, must have been sh*****g bricks when he/she saw what was being said.
I would like to know what hammer the SEC has in such a situation. Do they suggest that a civil suit for libel might clear the air? Can a citizen even libel a government agency?
I saw a man convicted of criminal contempt against a Federal Bankruptcty judge a few years ago. He would not stop writing that the judge was a whore, the court a den of prostitution and the attorneys nothing more than her pimps.
He was sentenced to Anger Management classes and had to pay for it.
The S.E.C. is but one member of the same Financial Fraud Enforcement Task Force (FFETF)which took down and prosecuted Andy Bowdoin and AdSurf Daily in nearly the exact same manner.
I see absolutely no reason to suggest FFETF is not responsible for the Zeek prosecution.
Check out the members who make up the FFETF and you’ll soon see how and why Mr Craddock should shut his mouth and stop tugging on the tigers’ tail.
You will find a logical explanation for that in “Hustler Magazine, Inc. vs Jerry Falwell”.
For something to be libel / slander, it has to be BELIEVABLE for most “normal persons”. In the case you referred to, most normal people won’t believe in the idea of the Judge being a whore, the attorneys being her pimps and the court being a den of prostitution.
Anger management will mean each time he feels for using that strategy he will also have to pay for it, hurting himself financially rather than hurting the court. If he is publishing something similar again, the Judge can order him to get additional anger management lessons (because the first ones obviously haven’t worked).
Haha… I was just using their language… I miss them so much. Sometimes when I got bored, reading what posted on their facebook, and their updates just made me laugh so hard. And now, it is no more. Dang the “evil SEC.”….. 😀
You’re right that “normal people” or the average person would not perceive the “prostitution ring” at Court characterization as literally believable, but that is irrelevant. Contempt of Court was the issue there, not libel.
Nor have ZteamBiz group’s statements been the cartoonish lampooning of a public figure that set the Falwell case in motion. To the contrary the Zteambiz postings have gone far beyond satire and opinion to statements of fact, some of which have been expressly refuted by the Receiver (and one imagines by the SEC as well).
So, to me at least it appears that the Zteambiz postings have been pulled precisely because they were made in such a way that the “average man” (Zeek affiliates and general public) could find them believable.
This comes perilously close to libel in a civil context if they were false and if the statements were repeated under the color of a federal subpoena there is a chance that false statements were made to federal agents.
A really good time to shut up it would seem.
Oh darn, I will miss reading Craddock’s written work and his hyper-optimistic predictions of tearing the SEC a new one in court. His elementary grammar & run-on sentences were fantastic reading.
I really looked forward with Extreme amusement for his update reports to be posted. I guess all good things come to an end.
There’s always “obstruction of justice”, “impeding ongoing investigation”, and so on.
Yes, a citizen definitely *can* libel a government agency, and government rarely if ever hits back due to FoS concerns, but when it interferes with their JOB…
What really happened to Craddock / Kettner… my speculation is they got a “cease and desist” letter from the real SEC lawyers, and their own lawyer says “okay, I’ll tape my client’s mouth shut so they can’t put their own foot in it any more”.
Obstruction of Justice, Interference with a Federal Investigation, the possibilities are interesting, and those charges would be handed off to the DoJ, they’re criminal.
Sounds serious, but what have ZTeamBiz communications or its Facebook page done to obstruct justice or interfere with an investigation?
That’s what I’ve been saying for a while now. If these “bring Zeek back” people would only take the time to read the court documents and find that little nugget they’d know there’s no chance in heck of ever bringing ZR back to life.
Not that it would do any good, because even if they could bring it back there’s no way to recruit new suckers into it. You just have to google “zeek rewards” and up comes a bunch of news articles about how it was a ponzi scheme shut down by the SEC.
People aren’t going to want to put money into it unless they’re extremely gullible and stupid. And there’s no way it could last just on the penny auction income.
Well for one thing they were telling Zeek victims to not communicate with the receiver or fill out victim claim forms. This is definitely hindering the victims’ chances of getting their money back.
He spread lies and told people not to fill out the forms in hopes that with fewer people asking for their money, there’s a greater chance he’d get to keep what he illegally earned.
True, they’d have to be idiots to listen to anything he says, but quite a few of them are looking for hope that Zeek will come back to life and they’ll continue to “make money” for doing nothing. He knows this and is playing them.
Telling people NOT to cooperate with the receiver, that receiver will steal their money, that Zeek was “railroaded” by the SEC, that they should NOT register their losses…
That by registering with the receiver they “would be admitting they were VICTIMS, and they don’t want to do that when there were NO victims until the SEC shut ZEEK down” was another one of the pitches.
It sounds a lot like practicing law without a license.
There were no victims until the SEC shut Zeek down… I guess they’re forgetting all those people in other countries who had their accounts abruptly terminated and didn’t get the money they were promised after posting their daily ads.
You can be a victim without knowing you’re a victim.
Take second-hand smoke for example… If you don’t know what smoking is or what it does to your lungs, are you are victim of second-hand smoke?
Thus, this “no victim” pitch is horse____.
I am very late to the Zeek story. How long ago did the overseas accounts get terminated and what explanation was given? Internationl bank transfer “problems? ”
Here’s the article about it Hoss…
https://behindmlm.com/companies/zeek-rewards/zeek-rewards-ceo-paul-burks-lying-about-sanctions/
@ Hoss
Here is one thread regarding that. https://behindmlm.com/companies/zeek-rewards/zeek-rewards-exposed-ofac-ddos-and-compliance/
I didn’t start monitoring Zeek until shortly after the date of that post.
Here is an early post that Oz did regarding the subject.
https://behindmlm.com/companies/zeek-rewards/zeek-rewards-banning-members-due-to-politics/
It is dated April 5, 2012 and the one above is from May 18, 2012.
The “no victim” BS just kills me.
They go on about there were no victims because everyone was getting paid, there was money in the accounts, etc., all the while overlooking the elephant in the room, i.e. the whole thing was based on FRAUD.
They were VICTIMS of FRAUD because the whole premise that they were lured in on was totally fake, made up, smoke and mirrors gibberish.
They were lured into doing something with their money (and a tiny bit of their time) based on a decision to do so that relied on totally bogus information (the penny auction was making bazillions of dollars, Paul wanted to do something nice for people, 14 year old debt free company, etc., etc.). FRAUD people, FRAUD!!!
You were the victim of a deceitful, manipulative, intentional FRAUD. That’s the whole thing in a nut shell.
The irony here is the “no victim” quote is usually followed by “until the government steeped in.”
I’ve seen many people pointing to the numbers in the SEC’s complaint indicating that Zeek took in slightly more money in the month of July than it paid out as some sort of proof of sustainability. These people forget all about the claim that ZR only pays out “up to 50% of their profits” pitch.
Even before the “North Carolina CID” became public there were reasons the smart money would have been lowering their reinvestment percentages. All the slow pay, no pay, selective pay problems were a tip off to any experienced players. Zeek might have been in the black in July but raid or no raid they’d have been bleeding money in August and beyond.
The ironic thing? By far and away more of these sleazy online money games get closed by the laws of mathematics than by a court of law. If the SEC waited a month or two most of the same people blaming them for killing their golden goose would be blaming them for not stepping in to protect them when they had the chance.
Hi Glim,
You’re aware, of course, that the “no victims” line is straight out of the ASD narrative advanced by Todd Disner and others.
ASD, like Zeek, required organization. And ASD and Zeek had members in common.
After the fall of both companies, the narrative by some insiders keyed on demonizing the government. Disner and Dwight Owen Schweitzer — both formerly with ASD and later with Zeek — now have decided in their ASD-related lawsuit against the government to accuse a federal judge of “sophistry.”
Craddock was on a Zeek-related conference call with Disner — and Craddock also was on a Zeeki-related conference call with T. Lemont Silver. Silver, of course, also was a pitchmen for OneX, which federal prosecutors in the District of Columbia have described as an ASD-like fraud scheme and pyramid that was pushed by ASD’s Andy Bowdoin.
Of course, Craddock also put himself in the business of going after K. Chang’s Hub at HubPages. And Craddock also appears to have had the brainiac notion that he somehow could protect MLM “opportunities” by somehow gaining a trademark or service mark or patent on the word “SCAM.”
I haven’t spent much time contemplating that Craddock notion because of the various fires I’ve had to put out when my coverage of Zeek intensified.
But one thing I have contemplated is that it might be a good idea for the Feds to open a sweeping racketeering investigation and focus on companies such as ASD, AdViewGlobal, Zeek, NarcThatCar and MPB Today.
And I think it also would be a good idea to look intensely at TextCashNetwork, DataNetworkAffiliates and OWOW.
I’d bet that the databases of those companies would provide some revealing information if compared to the Zeek database.
My theory is that there is a securities fraud/penny- stock/racketeering train whose final U.S. domestic stop is in the Greater Miami region before it departs via electronic overwater transport for South America and, say, Israel.
I think this racketeering train also desperately wants to involve the good people of India and other developing nations.
If there is any “sophistry” going on, I’d submit it is in “expert” opinions by folks such as Keith Laggos and — I say this with a frown on my face — Gerald Nehra.
MLM has to stand for more than this. The national-security implications alone of “programs” such as ASD and Zeek are untenable — and the follow-up narratives by folks such as Disner and Schweitzer are creating a very dangerous condition.
PPBlog
@Chris Bailey
Thanks to you and others for the links to past discussions.
@Chris Bailey,
Thanks to you and others for the links, but as one link led to another and then to another I am not sure I understand where it ended. Were the foreign affiliates left to drift with no ability to access their funds only to find out months later that the SEC had stepped in? Thanks
Yep,
left high and dry, never to be heard from or spoken of ever again.
@Hoss
All affiliates in 6 countries were terminated “over night”, around March 28th or so. The first explanation came around 14 days later on ZeekRewardsNews, claiming OFAC sanctions to be the reason.
OFAC = Office for Foreign Assets Control, and is about Foreign Assets in the U.S., not about countries. It’s mostly about freezing assets belonging to war criminals. OFAC did NOT confirm they had any sanctions of the type where citizens in European / Balkan countries were banned in general. They stated “OFAC do not have any sanctions like that”.
Some received their initial investment after 8-10 weeks as a refund, after lots of waiting and failed attempts to get information from customer service.
I’ll guess most of them received refund of their initial investments within 10-12 weeks or so. They received nothing of the points “earned” in the daily profit pool or through recruitment.
All things considered that would seem to be a pretty good outcome for them. If OFAC had nothing to do with the shutdown…what did prompt Zeek’s actions?
@Hoss
The shutdown of 6 countries looked like a panic attack, like someone using drastic methods to solve a minor problem. It was NOT a well planned action.
We received some inside information “rumours”, suggesting it was related to credit card frauds or something similar, but it was never confirmed.
The ones who got their initial investment back in May / June were actually lucky. Zeek was shut down 10 weeks later, and it had escalating problems during that period.
It was speculated that those 6 countries were banned because affiliates there were joining as free members and putting very little in while getting daily returns. While the daily returns only amounted to a few dollars per person, combined they were taking a lot of money out while putting little in, which is very harmful for a ponzi. So the theory is that Zeek shut them out completely so they wouldn’t keep bleeding money out of the ponzi.
@Joe I suppose in a way it hardly matters now but I would still like to understand it for what it was. Thanks for the speculation which seems like a pretty well educated guess.
The credit card fraud angle is probably correct, as this cause them to be not trusted by the banks. That soon forced them to work without local banks, but use eWallets, and use international credit card processors (some of them are STILL charging cards, according to MLMWatchDog) on the advice of Keith Laggos.
I do believe that their switch from actual banks to ewallets occurred not long after they cancelled membership from those 6 countries.
Oh but why lie about OFAC sanctions when they could have just said that they didn’t want to do business with those countries any more because of massive credit card fraud? Though I think they did use both excuses, IIRC.
Misdirection. Never forget that Paul Burks is a magician by training. All the members are already conditioned to believe anything said by the company is the truth, as long as it doesn’t affect them. “Blame the government.”
Yes, never once was Zeek on the level. I guess when you’re lying about where the money is coming from, it’s easy to lie about everything else, too.
The Dispatch just published an article about the Zeek Receivership latest development. As of this time, the receiver’s site reflects no updates.
I’ve also written an article for Forbes detailing the Plan and providing a copy for download:
http://www.forbes.com/sites/jordanmaglich/2012/10/09/zeek-receiver-files-preliminary-liquidation-plan-with-updates-on-asset-recovery-clawbacks-and-claims-process/
The Forbe, Jordan Maglich just wrote an article explaning the Receiver’s plan.
http://www.forbes.com/sites/jordanmaglich/2012/10/09/zeek-receiver-files-preliminary-liquidation-plan-with-updates-on-asset-recovery-clawbacks-and-claims-process/
Looks like someone hit delete and cranked up the shredder….lots of missing transactions data.
Also Receiver Bell says he anticipates no particular litigation difficulties, meaning that Craddock’s Fun Club has been completely discounted as a factor in the administration of this estate.
NOW so all the dough i donated is gone. Great.
Maybe that’s why the filings Craddock mentioned in his Oct. 2 update (“We expect some additional filings this next week and this will be benefiting all.”) have not,in fact, been filed.
Imagine that!?!!
Two Zeek members in California filed something with the NC Federal Court:
http://www.patrickpretty.com/2012/10/10/2-california-members-tell-court-zeek-rewards-left-them-on-the-verge-of-financial-devastation/
Maybe. They should know the Reciever’s mind by now.
It doesn’t appear they are suing anyone in particular, unless I missed something. They are naming their upline folks as having pepetuated the biz model, but if it was filed in NC Fed Court, then I guess it was just like a petition with no Plaintiff and Defendants. ?????
I guess if that’s not what this is, then the day will come when individuals will sue their uplines to make them whole. Whew! Am I glad I didn’t promote Zeek more than I did. All of the friends and family who came in did so because we felt so sure about Zeek…didn’t have to “pitch” any of them.
What a nightmare for the people who were like us but were in a bit longer and took folks off the cliff with them. Sure, there were many sleazes who knowingly took others down, but I know plenty of people who are good folks that just got caught up in getting out of the spiderweb of financial ruin so many of us are in right now. Very sad….
I talked to someone yesterday that is coming on board my company that had got in Zeek late and only send in $100. They got a check back from the receiver for it already.
Hopefully they will be able to make a lot of people whole, or almost whole. Frankly though, I think that starting at the bottom of the pyramid and working up is smart… however I wonder how long it will be before they run out of money and have to heavily go after clawbacks.
I know several people who were doing Zeek full time.. they have spent all that money they made AND wasted 6 months of their time as well as damaging their reputation and credibility.
See.. the reason I got into the Zeek conversation is because I always fish around about that. Because of the damage people that are in Ponzi schemes do to their reputation – I don’t WANT them in my business.
With Ponzi’s the loss of CREDIBILITY is the “invisible damage” that can be even more devastating than the loss of money. Just think… “you can’t count what you don’t have” – so those people who damage their credibility don’t ever know BADLY they damaged it, or how MUCH they lost, because people are not going to tell them the truth.
They won’t come right out and say that they don’t TRUST them (their integrity or their common sense), but they don’t return their phone calls and they don’t get involved in their next “business venture.”
This seems unlikely as the Reciever is in no position to make distributions of estate assets at this early date. Probably your acquaintance recieved the check they provided to Zeek.
There were over 60,000 uncashed checks in the Zeekler offices when the SEC intervened and many of them could not be cashed.
What your are looking at here is a personal letter to a Federal District Court judge. Its emotional. It may be true or it may not be, but its not a legal pleading. It is considered an ex parte (apart) communication and in some instances might influence the judge.
Therefore the Code of Judicial Conduct demands that such letters be placed in the record (docketed) so that all parties to the case have an opportunity to read and respond. There is no special significance to this letter being placed on the docket.
Had these folks sent a cartoon caricature of their upline with horns the same thing would have happened and it would have had the same legal effect, i.e., None.
Mostly people write the judge because they have an emotional need or something to say but do not want to retain an attorney to say it. This does not fly in Federal Court.
If this happens too often the judge will make a blanket statement that he will not accept any more personal letters and his clerk will throw them away unread. With millions of Zeeksters you can imagine how out of hand this could get if the judge had to read and docket every letter.
Regardless, some of the Zeek uplines deserve to be sued, and there is a right way to do that.
FWIW the Zeek website is down again.
Totally agree on that one!
And thanks for clearing that up for me. I knew that statements and/or letters are filed pre-sentencing in criminal cases in an attempt to influence the Judge’s decision, but didn’t realize it was done in other phases of proceedings.
No doubt there will be others to follow given the bizarre nature of this whole thing. 🙂
Starting from the bottom of the pyramid is NOT a correct method.
The correct method is to identify different “classes”, with people with relatively similar rights in each class, and decide a rank order between different rights. The general rule is “Equality before the Law”, or “Equal type of rights gives equal percentage of restitution”.
People who have withdrawn amounts LESS THAN their principal investment will have relatively similar claims. They will probably receive the same percentage (but not the same amount).
Two examples:
1. A person who has invested $10,000 and has been able to withdraw $8,000 will have a claim for $2,000. If the percentage possible to recover for the whole class is 50% he will receive $1,000, and have a net loss of $1,000.
2. A person who has invested $10,000 and have not withdrawn any money will then have a claim for $10,000. He will receive $5,000 and will have a net loss of $5,000. Only the percentage will be distributed equally, not the amounts.
Some people may have more complicated claims, and they will have to be placed in other classes, where they partially have rights similar to the first group and partially have other possible rights (with lower or higher rank).
Claims of the highest rank will be paid first (in full if possible), and then the second highest, and so on and so forth until they only can pay a percentage of each claim. Claims with lower ranks than that will not receive anything.
Ponzi schemes do not pay any “rewards” of any type, so claims related to payment for “work” (e.g. posting daily ad, recruiting people) will not be valid claims. They do not pay any interests either.
Those who got conned may want to do a self-survey called the “Sucker Rumination Scale”, as in how hard are you on yourself for being suckered.
http://www.beyondthepurchase.org/dupedrum_irb.php?nextpage=dupedrum&title=Sucker+Rumination+Scale
This is NOT a joke, but a serious study by San Francisco State University.
It strikes me that there is a reward for being an early participant in these schemes.
1. They have the opportunity to make oversize returns, take distributions, spend, hide or gift the money, and monitor events.
2. When the scheme unravels a Trustee or Receiver must sue them for the return of net winnings and it is their choice whether to contest the clawbacks or not. Thus legal fees are by choice not by necessity. Usually a discount is offered for repayment.
3. Time is on the early participants side. They may get to keep the winnings interest free for years.
4. They may be assisted in keeping their winnings by missing or confused accounting data
5. If they have no other recourse they can disgorge their net winnings at a discount but still keep their principal.
There is no real penalty for the early participant who carelessly or even knowingly promotes the fraud, withdraws significant amounts of money and then gets to keep their principal after the scheme falls apart.
What am I missing? Unless the laws expose all participants to loss of principal (not just their net winnings) then there there are significant incentives to invest early, promote and hope for the best because the the worst it seems, may not be very bad.
Yes… which makes them unwitting accomplices, or to borrow a term… “judas goats”.
There’s several methods to keep the profit too, in some schemes. I was focusing on the general principle, “a Ponzi scheme do not pay salaries, interests or profits, it pays stolen money that has to be returned to the rightful owners”. The reality is often different.
The general principle can be applied to third parties too, e.g. consultants who have done some paid work for RVG. They have been paid with “stolen money”. But I’ll guess it will depend on WHAT they have been paid for and how connected the work has been to the Ponzi scheme itself.
“General principle” is not the same as an “absolute rule”. Other principles like “in good faith” can have a higher rank.
ZeekDoc30-1.pdf (the assets list) lists several of Zeek’s consultants along with the officers and employees, e.g.:
* Greg Caldwell, compliance consultant
* Lori Beck Clement, payroll consultant
* Kevin Grimes, attorney
* Keith Laggos, MLM consultant
* Peter Minglis, marketing consultant
* Richard W. Waak (Nehra & Waak), law firm
Yes understood. A Zeek affiliate will not be able to claim that net winnings were actually salary, profit, interest on money loaned or a form of remuneration for services rendered. A non-affiliate third party with clean hands is a different matter though. Yes? They are entitled to retain payments or deserve to be paid out of estate assets for work performed.
Conversely third party employees and consultants with dirty hands may find themselves in a situation similar to Burks, i.e., disgorging funds, and facing civil and criminal liabilities.
I still wonder why the law, as I understand it, affords an early affilate-participant the chance of oversize returns with relatively little risk to his principal while later arrivals will almost certainly lose big. Why should the early participant who induces others to invest (and lose) only be required to disgorge their net winnings?
Unless the law provides a mechanism to distribute the total loss over all participants these MLM schemes will continue to be incubators for exploitation and fraud.
I do not think an early participant/founder goat is as unwitting as you suggest. In fact their behavior is quite rational.
Nope, not necessarily. Use a different example – you are a legitimate third party business but you unknowingly do business with mafia or drug dealers. The profit that you earned can be confiscated.
I will go along with what you say because there are forfeiture laws where drugs are concerned but what you are in effect saying is that a Ford dealership that unknowingly sells a Mustang car to an unknown drug dealer is held responsible for an unknown act.
I agree. This is the reason why people are turning to another ponzi scheme one after another, hoping the government wont step in before they making money.
Some are professional enough to know how to time and sense the end is coming to get out before hand and turn to a plan B… 🙂 … And law firms and other government agencies will continue to have some work to do.
Logically speaking, it wouldnt make any sense to spend ten thousand dollar to acquire one thousand dollar. So, in a sense, those who made 1 thousand dollar in Zeek will not be facing any clawback. Just like they won a lottery. 😀 too bad, I’m a big loser! But I can’t do much besides accepting the fact and move on. Just glad that I didn’t drag anyone into it.
C’est la vie! We cannot depend on the laws to deliver a complete package of justice. Thus, justice is still a hot debating topic since the time of Plato until now.
@Carpe
We see eye to eye on this but I am not sure a net winner can take comfort that the Reciever’s cost of collection will shield them from a clawback. The right to collect will likely be auctioned off (in bulk) and transferred to a collection agency.
Its not uncommon that a provision for post judgment interest is included as well which tends to increases the value of the judgments to the estate and makes collection easier and more lucrative for third party agents.
The Reciever will begin this process by filing a clawback Complaint against all Net Winners, attaching a voluminous Exhibit with names and amounts due and following through by getting a judgment en grosse.
Fun Club Conference Call scheduled for Oct 17th was a washout. Less than a dozen callers and no moderator. All callers hung up, some in disgust.
Proving once again:
You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time
You’re right. There has to be a much closer relation between the parties (or between the actions). The Ford dealership must have “assisted” the drug dealer in his crimes in a more direct way than just selling a car to him.
I used the expression “general principle” rather than “absolute rule”. “Ponzi schemes do not pay rewards, they pay stolen money”.
The aftermath of ZeekRewards will probably provide us with some real examples after some time, so we don’t have to use imaginary ones.
One of the real examples I’m waiting for is Keith Laggos / NMBJ Network Marketing Business Journal. I’m also curious about whether or not Troy Dooly’s “assistance” will be subject to clawbacks.
NMBJ had a 6 pages marketing inlay from ZeekRewards / RVG in April 2012, mostly written by Dawn Wright Olivares (COO in Zeek), presented more like a “review” than marketing. Rumour says it was paid for by buying $100,000 worth of copies of NMBJ. It was heavily used in the marketing of ZeekRewards by affiliates.
So NMBJ has clearly “assisted” Zeek in publishing its marketing material. Keith Laggos also had a role as a paid consultant for Zeek, and a role as an affiliate. So he was clearly more “involved” in Zeek than what we can define as “normal business relationship”, e.g. the car dealer selling a car to a customer.
A publisher has both the right and the obligation to check the material he publishes and distributes (in some degrees). He’s also partially responsible for any marketing inlays, so technically speaking he COULD be facing a $100,000 clawback for the NMBJ Zeek inlay.
Not just drugs.
The U.S.A. and many/most other western countries have severe forfeiture of the proceedings of crimes /asset forfeiture legislation with provision for both civil and criminal action to enable such forfeiture/s
Goose gravy.
There was a Zeek conference call on Thursday with a big turnout of as many as 1700 callers. The legal strategy discussed seems sound.
Sound? The sound of one hand clapping perhaps. . .
Alleged email update from Craddock states that NO conference call was scheduled, and if there’s one, it’s from someone wanting to bait Zeekheads into new “opportunities”. 🙂
So what’s Hoss talking about then…?
I read the same email which was not very clear but meant that since no conference calls are scheduled with Fun Club attorneys, no one should be lured into attending anything that promises access or detailed legal updates. That being said, a call took place last night that was hosted by an affiliate and attended by Craddock who spoke very briefly, providing very limited information. Also, no Fun Club attorneys were in attendance.
Perhaps.
I just wish these “upline” zeeks would stop sending out emails sounding like they are on the edge of a breakthrough because of this or that (legal wrongs by receiver). That Zeek 2.0 (WT_?) is coming and all the money is going to start flowing again, because the penny auction was so profitable.
I don’t get to opt out, and I never asked to be spammed.
Also, KChang if you want my copy of the email let me know, I’ll forward it to you.
They just want you to donate to their “legal fund.”
They been taught by their own uplines that this is the way to keep a “group” together in “attraction marketing”. Just mark them as spam in your favorite email program, or find one of those “fake rejected email” services.
Feel free to print-screen it, then redact the sections that would reveal your identity, then upload the pix to IMGUR (no account needed) or even anonfiles.com
any words on money paybacks yet or clawbacks
Nothing new. The Receiver filed a Preliminary Liquidation Plan and is supposed to file an update to it next week.
Update as of 10/31/2012——Ken Bell posted letter on the Receiver website summarizing his efforts to recover assets. Subpoenas are being issued to about 1200 persons right away, and potentially to many more later.
Here’s the URL to the letter:
http://www.zeekrewardsreceivership.com/pdf/10-30-12%20-%20Letter%20from%20the%20Receiver.pdf
And here is Mr. Jordan “Ponzitracker” Maglich’s analysis on his website:
http://www.ponzitracker.com/main/2012/10/31/update-from-zeekrewards-receiver-claims-process-coming-poten.html
Receiver Kenneth Bell has put up a subpoena FAQ, which might be interesting reading for those with questions about their Zeek Ponzi earnings:
http://zeekrewardsreceivership.com/SubpoenaFAQ.html
I went to memegenerator.net and made this pix, seems very appropriate a while back…
http://s2.hubimg.com/u/7314149_f260.jpg
Maybe I should make one that use a different meme. 😀
Reading the subpoena, I don’t really understand the word, “winning”. Does the Receiver mean the winning from Zeekler penny auction?
I meant back there, when people in Zeek mentioned about the “winning” money, they meant the won money from the Zeekler penny auction, not the shared commission from the Zeekrewards.
Wonder if the Receiver is using Zeek language as he puts the word “winning” in the brackets. Or he just uses that word in general?
Sorry, but another question from reading the subpoena FAQ… What is the benefit to contact the Receiver ahead of time for the settlement instead of waiting for the subpoena letter?
I meant both way I still have to return the money at a discounted price. If I wait, then I will have longer time period to hold on the money without interest. After receiving the subpoena lettler, I still can negotiate for a settlement with the Receiver anyway, so why now?
Plus, the Receiver could make mistakes in calculating my profits, so why let him know exactly how much I made? Let the Receiver do the calculation himself, if it more than what I actually took out, I can always correct, if not, then it’s the Receiver’s mistake, and it will be my gain.
— I know that there is a low chance that the Receiver may may mistake in his calculation, but there is still a slim chance to an err in the calculation.
Obviously in that sense, “winnings” refer to profits made from the Zeek Rewards ponzi schemes. If you got back more than you put in, then you are a winner. If you put in more than you got back, then you’re a victim.
AS I see it the benefit to you would be knowing sooner what they calculate you owe.
Hubby received subpoena. A benefit of settling would be to not have to submit the large volume of info they want. Almost to what size undies you wear.
This is not good. I think the $ amount was higher than what he got but will have to check, lost track a bit after money went to payment processors.
IMO, it would be more likely that inaccurate records by Zeek would create a discrepancy.
Either way, that kind of talk sounds like you’re still hoping to profit off of other people’s losses by keeping some stolen money if you feel you can get away with it.
Perhaps not, but that’s how it sounds.
From memory Erin your husband was willingly wanting to jump onto the next big Ponzi scheme after Zeek. Perhaps now after receiving a subpoena he’ll realise what Ponzi schemes are all about.
One of the problems facing ex Zeeklers is that many of them will be left in the position of having to prove they did NOT receive the amounts the Zeek records show they did.
It has to be remembered that Zeek was a fraud from the start.
It is not and was not of any benefit to Zeek to maintain an accurate database or databases of what actually transpired.
Many Zeeklers will face a similar situation when it comes to tax time.
The fact Zeek sent out IRS form 1099s worked in that it convinced members Zeek was “legit” and in compliance with Federal tax laws.
Now, however, the taxpayer is faced with the problem of proving or disproving the legitimacy and accuracy of the 1099s.
The same applies to the clawback subpoenas.
The receiver has documentation that the Zeekler in question received an amount.
It is now up to the Zeekler to prove he/she did NOT receive that amount or prove that Zeeks’ records were as faked as its’ business model.
Many of Zeeks’ will find themselves in the position of having to payout additionally for legal and/or accounting advice before this is resolved.
As has been said before, the loss of money caused by Burks and Co will turn out to only be one of the problems they’ve left behind.
As an aside, I wonder how much Paul Burks (if he had an affiliate account), his family, Dawn Wright-Olivares and the rest of the executive management who had accounts will have to give back?
I imagine they’d top the Craddock 12 easily.
Dawn as HippieDiva is definitely a member. Her fiance, Alex deBrantes is definitely onboard as well.
No idea about the rest. Though those who did participate in Zeekler more often should be able to tell if they bid on stuff and/or appear in their genealogy.
Have you received ENOUGH information from the Receiver?
“Enough” is ALL the information he has about your husband’s transactions in and out, or the information you feel is needed (if you don’t need ALL information).
“Far too little” is if you only have received information about the total amount with no details at all, or too vague information.
They’re not relying on only the Zeek records, but also of the records of the banks and payment processors involved. Also, all those fees members paid to payment processors to move money both directions are considered money paid to you, no different if you used it to pay processors or buy Jack Daniels, or the odd half million dollar condo you had to show off on U Tube….
It would be normal that the reconstructed bank records are more accurate than Zeek’s member database, the company records can be a mess but the movement of money in the banking system is reliably traceable.
Last night Robert Craddock of Fun Club USA divulged that his attorneys have not gained access to the Paul Burk/Zeekler financial records (even though they have asked).
Presumably, the Receiver views Fun Club and the many “winning” affiliates as having no standing in the SEC vs Rex Venture Group lawsuit. If this is the Receiver’s legal position then he will not be likely to disclose his calculations or methodologies unless compelled to do so.
This also implies that Fun Club has no comprehensive idea what Burks & Co. were actually doing with the money; which means that their protestations of unfairness at the hands of the BBB, the DOJ, the SEC, the Reciever and the blogosphere are based on wishes, fear and greed rather than actual fact.
Retraction: Who knows what motivates their protests? I don’t. They are urging their members to resist the subpoenas and for the present at least, not to make any settlement.
Such an approach suggests that the the Receiver will have to fight his way through some discovery items and bring a clawback suit if he wants to recover money. This suit will give the Fun Club a chance to move for dismissal and/or view/contest the data that the Receiver is relying on.
Bell knows all of this and is prepared to deal with it.
Well we all know how shoddily Zeek ran its day-to-day business, with auction winnings not being paid for months, support tickets and emails going unanswered, no tech support help, deposited amounts not being credited to accounts or being put into the wrong accounts, etc. So I’m guessing they probably didn’t take very good care to make sure their records of money received or paid out were accurate.
If they were accurate I’d be very surprised, since it would be odd for a business to be run so shoddily yet take great care to make sure accounts are accurate.
And these are the *same* people who claimed to have “insider information” that will exonerate Zeek and Burks… TWO MONTHS AGO.
They are doing the SAME THING Schweitzer / Disner was doing with ASD: hoping to see what cards the authorities are holding so they can come up with some counter-tactics, by filing lawsuits and such and hope to force the Feds to reveal evidence through “discovery”.
@Joe Mama
I don’t doubt what you say is true. It’s partly why the subpoenas are being issued. Information obtained through this discovery process will help fill in the accounting gaps as well as confirm certain starting estimates and assumptions.
Since Zeek was not a cash business there are electronic money trails flowing in from banks, credit unions, brokerage accounts and credit cards and back out again to banks, e-wallet accounts and individuals. These independently maintained electronic records will make it obvious who received money, though perhaps less obvious who sent in money.
However, the voluntary claim process instituted by the Reciever will gather more transaction data and further reveal and confirm where most of the money came from.
Later on there will be a dispute resolution procedure put into place that will reconcile individual discrepancies.
Precisely.
Well…no, not yet. He’s been in several more since Zeek. Doubt he’ll quit until these close up shop with his money.
Zeek was a one time thing I think…where he actually got cash out. I’m fairly sure these others will disappear with it…then he will be soured on it for awhile, at least I hope. As long as he believes the evil government did it to Zeek, he still feels these other are legit. One is offering 6% a day.
I think for the true believers to ever get it, the Ponzi’s need to die by themselves. When they get shut down by authorities, the believers just think the authorities want to seize the money for themselves, or whatever other convoluted rationalizations they can come up with.
I think it just said something like, records show you have received XXX amount of dollars, while only contributing XXX amount of dollars (not exact wording). No details.
I’ll have to check the paperwork again, I don’t have access to it right this minute.
I wonder if they are going to let a person deduct the monthly fees, and any other little fees they managed to charge along the way. Although that’s really just a drop in the bucket, but it’s still money that could be lost.
During a recent conference call a woman asked Craddock, resistance leader of Fun Club fame what to do about a check that she felt had wrongly been cashed by the Receiver.
Perversely, curiously, and with a straight face (if I could have seen his face) Craddock answered that she should contact the FDIC. So much for mistrusting the evil government. It must be selective.
Erin, is you husband in Blue Bird Bids by chance?
The trouble with the true believers is that even if a ponzi collapses rather than is shut down by the govenrment, they’ll tend to just believe that it’s a one time scam rather than understand that all the investment schemes they’re getting involved in are similar.
Cashier’s check is a contract between the buyer (of the check) and the bank (who guarantees the funds in the check).
It’s not a deposit, therefore it’s not related to FDIC at all. Whoever said that is full of crap.
If allowed it would not be a deduction but money you paid into the scheme.
Yes, She did not say if if this involved a personal check, cashiers check, money draft from Walmart or whatever.
Rather than opine that the evil government agency (now savior) FDIC could help her out, Craddock could have given a more correct answer such as “the Receiver asked for guidance concerning the matter and the Court ruled that various types of financial instruments (including yours) are considered the rightful property of Defendant Rex/Zeekler…..in other words…..Lady, your out of luck (but send us a donation.)
MEMBERSHIP FEES
Membership fees ar part of the investment, if it has been paid with money from an external account (rather than using some internal points to pay).
THE SUBPOENA
Read the Subpoena FAQ? Point 4 – 8.
http://zeekrewardsreceivership.com/SubpoenaFAQ.html
As far as I can see, he’s asking for 3 things:
1. Financial documentation, showing transactions to and from RVG / payment processors / other transaction methods.
2. Corrections to the estimated amount in his letter.
3. IF you’re willing to accept a voluntarily negotiation. At this stage, this is not about any exact amount. It’s about “YES, I’m willing to accept an offer” or “NO, I prefer to have this dispute solved in court”.
Zeek’s different payment methods can be a problem here. It’s usually easier to provide documentation for electronically transactions than for checks.
I can see a problem in point 2. He has access to information you don’t have, e.g. transactions to and from the different payment processors. It’s nearly impossible to make corrections to something if you don’t have access to all the information.
My normal reaction to statements like “Our records shows” is “Please share them with me, rather than telling me you have them?”. You have a similar right to collect information from him as he has to collect information from you.
No, he missed that one somehow. Well hopefully the 4 he’s in will fade away and he’ll get it. He was in a few maybe 7 or 8 years ago and they all died by themselves, he quit the Ponzi thing until Zeek came along.
Although he never has called any of them Ponzi’s. I think he forgot about the old ones, selective memory.
Okay, I said it wrong, but the monthly fees were definitely not included in the receivers total contributed or invested or whatever you want to call it. All monthly fees were by credit card, I have copies fortunately.
Norway….there’s way more than those 3 things he wants. I will try to do a synopsis when I can get the paperwork back from wherever he hid it 🙂
This remains to be seen. It unimaginable that the Judge would order the Receiver to respond to potentially hundreds of thousands of subpoenas. More likely, the Receiver’s staff will informally share information over the phone or via email as a way to satisfy the curious and promote settlements.
Those that don’t settle will find themselves sued for what the Receiver calculates (and shows via filed exhibits) that they owe. In this way the burden and cost of defending a number will shift and land squarely on the shoulders of the affiliate/defendants who will have the opportunity to contest the Receiver’s methodology and numbers. 99,999 times out of 100,000 the affiliate/defendants will not hire an attorney or show up in North Carolina for their hearings. Thus a default judgment (with accruing interest) will be entered in favor of the estate and everyone will have been afforded their due process rights.
Its possible the Receiver has gaps in his data of course. Are you sure your fees were paid to Rex/Zeek and not to some independent third party.
Well, the charges on the credit card say Zeek Rewards. What they did with the money I have no way of knowing. Maybe Zeek didn’t enter that money in their accounting…which would be shocking 🙂
Erin – If you can, how much did your husband earn in order to get 1 of 1,200 subpoenas ? I made around 20,000 I have not recieved one, yet.
I’ve felt for a while now that one thing is probably certain, based on the way things went down. Paul most likely DID NOT go to the effort to keep a VERY GOOD set of cooked books, or he DIDN’T REALLY EVEN TRY to keep a cooked set at all.
I say this because of the way he apparently folded, and folded so quickly when the SEC came knocking.
I’m thinking that when the SEC arrived, he knew he didn’t have anything in place to cover ZEEK’s tracks, and what he did have on hand was actually a fairly accurate accounting and of course THAT would sink him in short order, so he just bit the bullet and folded instead of trying to fight.
I say that also because of how relatively quickly the Receiver has been able to move forward with the Subpoenas to the “big earners”.
You could assume that the Receiver has not had to waste time to dissecting a tangled, MADE UP layer of information to reach this point, since it has come pretty quickly.
That’s kind of the way I see it too. Considering the astronomic growth Zeek experienced Burk had to be just strapped onto a rocket and holding on for dear life. Max thrust. No guidance Flame out.
Yes, 100% agree. I really doubt he expected it to take on the “life of it’s own” like it did. By the time he realized the extent of what was happening, like you said he found himself “strapped onto a rocket and holding on for dear life”.
If he hadn’t planned early on that it would be big enough to need a cooked set of books, then it was way too late to start cooking some up by the time he really needed them!!
Another point worth considering is that, just like AdSurf Daily, Zeek was faced with a massive problem WRT disposing of the “loot”
Only a complete fool could have failed to realize that Suspicious Activity Reports had automatically been filed and further triggered after the US based banks refused to do business with Zeek.
In fact, such reports would have been made long before the final weeks/months of the investigation.
In practical terms Zeek/Burks had no option but to delay processing the what must have been massive amounts of money flowing in.
This would explain why there were so many uncashed checks at the Zeek business offices….. $5 Million in negotiable instruments and no bank would take their deposit. That’s a sad situation.
Exactly,
the same applied to AdSurf Daily
It had boxes and boxes of cash and cheques when it was busted.
Suspicious Activity Reports are a very real risk for US based fraudsters.
I don’t know if I should say exactly, but over 150k, under 200K. Although receive paperwork says over 200. Will need to clear that up of course. At this point I don’t know what hubby’s plan of action is…or if there is one.
Thank you Erin. My sponsor probably made between 600 and 800K, he has not said he got a subpoena, yet, sounds like he should have got one.
Given the dollar figures involved the only choice is it retain competent legal representation. And keep him the hell away from that lying jackal Robert Craddock.
Hubby will return his winnings, it’s only a matter of time. But a decent attorney will know how to get a hold of copies of any records hubby might need but didn’t retain to prove what the final dollar figure is.
The attorney will also, if hubby lets him, avoid the sort of stupid pig headed ploys that Craddock’s “Fun Club” is advocating. This means when the total is agreed upon, a reasonable payment schedule can be worked out.
Robert’s “keep poking the reviver with a stick” strategy if going to earn him and his followers much sterner treatment than the people who act in good faith.
Good luck Erin. I hope you wont need it but your husband is facing a situation with serious legal and financial consequences.
From the subpoena:
I’ve shortened up some of it, if you want to know more…ask
He just informed me that is his plan of action…they have a lawyer who can help, I guess that will be another $300 down the tubes.
I tried to keep good records, and none of the money got spent. I knew it was coming down. I am of course willing to settle and return it, but he will do what he will do. I just hope to get out of it without being too far in the hole, because that is most likely where it’s headed after the money goes back.
What a mess.
They are saying the subpoena had to be served by hand, so it’s not legal.
So I guess then they can arrange for you to pay their lawyer $300 to help you with an illegal subpoena? So…..?
It depends on the subpoena. If it is a subpoena for information, it can be sent by mail. If it is a subpoena to testify (Ad Testificandum) or for documents (Duces Tecum) they have to follow the normal process which requires two attempts before substituted or conspicuous service.
If they tried twice and could not hand serve you, they can serve it by mail.
Now here’s the problem – if you go to court and say service was faulty, the judge will ask “did you receive the subpoena?”. You will say “yes” and then the judge will say it doesn’t matter that failure of service does not matter since you received it.
You can get an extension on when to respond, but that’s about it.
The only time failure of service has any substantive impact in your favor is when there is a default judgement or other order against you, and you never received the subpoena or complaint (or you did but service was faulty and you took a chance and didn’t respond and will now lie to the court). Then you can go to court and say “I never received it” and get the judgement or order vacated.
If it’s something like a debt collector they usually won’t contest the motion to vacate. If it’s something more serious or significant dollar amount, they will show up in court, contest the motion to vacate, the judge will give it to you, then the other side will serve you with new papers in court. So you repeat the process all over again.
The only time this strategy works is if the other side won’t contest motion to vacate (doesn’t show up) or the new complaint is time barred due to statute of limitations.
One constant in all of this is that Craddock spouts much bovine based fertilizer. No motions have been filed, as of this hour. Nothing is ever done when Craddock says it will be done.
@Jimmy Thanks for your very relevant post. The $300 representation offer will probably appeal to many of those who receive a subpoena, and it does look like a bargain.
Do you think retaining the attorney en masse like this is a good strategic move for those who hope to retain MORE of their “winnings?”
Thanks Jimmy
I wrote up a summary of the subpoena. It’s waiting moderation. I’m also having trouble loading this page.
The problem here is, the same type of person who believes a 1% a day ROI is possible is also the type who would believe a court appointed receiver is “wrong” and Robert Craddocks’ advice is “right”
In a way, the remaining Zeeklers have been “pre qualified” to fall for this.
Any remaining skeptics were shaken out of the tree when the SEC moved in.
Cheerleaders, pimps, shills and regular HYIP ponzi players are long gone.
Anyone left is likely to be a “true believer” with logic having very little to do with what’s happening.
That’s true but until the Court orders these people to disgorge the money, they have indeed made their 1% a day ROI, have possession of the money, presumably having spent or hidden a good chunk of it, and are putting themselves in a position to negotiate a long term favorable pay back plan or a discounted immediate cash settlement offer.
It does not seem they are in such a bad of a position….legally speaking.
@Erin
Subpeona summary is up and on the note of loading problems I’ve been told “it’s being looked into”.
I too am getting the annoying 500 internal server errors and slow loading times/timeouts. Started happening a week and a half or so ago and I apologise for it profusely.
Someone should call up that lawyer and ask 1) whether he really did sent that email as relayed, and 2) what exactly does that $300 buy.
One of the problems is, there is a tendency to classify members of Zeek as being all the same or similar.
In my observation very few of the savvy HYIP ponzi players will be subject to clawbacks, or, indeed, will even be identified.
Theirs is a world of fake IDs, multiple anonymous payment processor accounts and careful attention to remaining under the radar.
It’s the “true believers” who are, IM(very)HO most likely to be hurt by the restitution process.
Some / many of them made no attempt to hide what they were doing, in fact, many of them were quite open, even proud about what they were doing.
It is they who are more than likely to be hit hard in the hip pocket.
I wouldn’t pay them $300 to file a motion to object to the subpoena. What are you going to do when the Receiver files a response? Are you then going to pay the lawyer more money to file the response to the response? Then what about an appearance if it is needed?
What if the Receiver sends a new subpoena after this one? Another $300 from you?
There’s no “what if” about it.
In the receivers own words:
Anyone who thinks he’s kidding or doesn’t have the backing of the court is in for a very rude shock
The $300 may indeed prove to be just a down payment for further legal needs (nothing is certain) but if everyone who has been subpoenaed joined up there would be $360,000 on account with one lawyer.
That one lawyer can argue, negotiate and appear for ALL of his clients simultaneously, and as many times as needed as they are all similarly situated (legally) and the subpoenas will be pretty much the same.
I doubt this will be handled on a case by case basis, although the Receiver may have specific persons that he is most interested in and focus his attention there. It seems to me that the $360,000 will be pretty effective in delaying, quashing or limiting the scope of this discovery process.
It would not be unusual for the Receiver to ask for more than he ever expects to get.
If these original 1,200 people collecte hundreds of thousands or even millions of dollars out of Zeek what concern is it to them whether they pay $300 or ten times that if they are getting the representation they want?
One might even speculate that a patsy took the fall while a hired provocateur started a legal bar fight to cover the tracks of the cosest insiders. Burk came from Vegas. Anything is possible.
“If God did not intend for us to sheer them, he would not have made them sheep.”
Wow.
That’s a pretty long subpoena… I guess they want to know if you benefited, how much money can you pull back out within reason… and can you prove your reasoning.
I can imagine a lot of Zeekheads with net gain spent quite a bit of that money, and will have to empty their savings / retirement accounts to pay for it. Too bad for them.
He definitely wants to find out what assets he can go after, and if there was criminal conduct.
May be designed as an encouragement to settle, to avoid as much of that as you can.
I agree with that. Some people have the stomach for litigation…others don’t. In the end, after all the saber rattling, most suits settle anyway.
The subpoena overreaches IMHO. Of course, that is a normal lawyer technique to ask for the moon and wait for the other side to object.
The sheeple have no idea what they are up against….
Wow, looks like they’re stopping just short of a rectal exam. I’m extremely glad my wife didn’t make any money at all in Zeek.
@Erin
The rules the Receiver is following are referred to in ZeekDoc4.pdf, the “Agreed Order of Appointing a Temporary Receiver”, points 12 and 13.
The rules = Federal Rules of Civil Procedure, except rule 26-d-1. http://www.law.cornell.edu/rules/frcp/
Important rules are 26-37, and 45 (Subpoena). You don’t have to read them all, but you’ll need the overview.
Wikipedia may be easier to use to get an overview:
http://en.wikipedia.org/wiki/Federal_Rules_of_Civil_Procedure
My impression is that the Receiver has the right to ask for disclusure of that information. He has probably sent a standardized letter to all 1,200 net winners, where some of them might have had multiple roles in Zeek. So some of the points might not apply to your husband’s situation, but most of them will.
The worst thing people can do is to ignore the subpoena about disclosure completely. A disclosure is THEIR chance to provide evidence or documentation, to present THEIR side of the story.
There are some rules about protection against unreasonable burden, where the court can modify or quash the subpoena. But I don’t think they will be applied here.
The net winners and others are individual PARTIES to the case. The Receivership has claims against them. Net losers have claims against the Receivership
The $300 is a waste of money. Quoted by ASDUpdates
The $300 is only to “buy” a generic response from the lawyer that you disagree with the initial subpoena. Then when the Receiver responds with a compelling note, you either pay more or you are on your own.
Well, I think the Receiver is asking for information in case you claim that you don’t have any money to pay back or paying back would leave you a financial desvatation. If you claim this, then you would have to prove by providing those documents. If you don’t want to provide any documents then pay it all back.
This is when you would have to pay more for the lawyer to fight for you to pay back less… But what is the point when you have to pay more for lawyer anyway.
This could also leave you with the fact that you pay to the lawyer more than what you would otherwise pay back to the Receiver. Or at the end the net saving is equal to zero anyway.
Paying $300 may indeed prove to be lost money but it will not neccesarily be a waste of money.
There is a lot of potential here for limiting the scope of the discovery, saving weeks of drudgery for people who otherwise would be digging through accounts and files to give the Receiver what he may not be entitled to and maybe lead to a favorable settlement.
The representation letter made it very clear that this could be just the beginning so anyone going forward should know this. I think they do know this.
Litigation is always a gamble but sometimes there are good bets. I think this is one. On a purely legalistic basis I think the generic response I read has merit.
I do not think the Receiver will get all he asked for, I’m not, but if I were a big winner in this thing I would risk $300 just to see the next card. That’s just me… not my call.
The subpoena is about DISCLOSURE of information, a formally legal step authorized by the court. It’s not a choice between sending information OR accepting a settlement.
The rules can be found in Federal Rules for Civil Procedure. I have posted link/info in post #763, currently waiting for moderation.
The correct response is:
* sending the requested information, and other information you might have and might want to add.
* OR contacting the Receiver to make an agreement about less information or more time needed.
* OR seeking the court about protection against unreasonable burden = modifying or quashing the subpoena.
* as an additional step, you can also meet it by contacting the Receiver and asking HIM to send you HIS information, e.g. the records he has used to calculate the estimated amount.
And THEN, after the pre-trial disclosure of information, the parties can make offers and agree on a settlement which has to be finally verified by the court. The Receiver can RECOMMEND a settlement, but he can’t decide it.
The subpoena is also about testifying. It’s like a sworn statement that can be used in court.
For Erin, I will recommend starting to organize the requested information as soon as possible, and don’t delay it any further. If needed, collect information from the Receiver. This step IS probably needed.
Send additional information where it’s needed, e.g. about 1099 tax returns for 2011. It’s better to PRESENT your side of the story in an understandable way than to let the opposite party analyse a bunch of raw materials and draw its own conclusions.
Robert Craddock’s strategy has several flaws. He is fighting the battles right in front of him rather than picking his battles carefully. His current strategy will not win the war.
“ORGANIZING THE MATERIAL”
This requires organizing yourself first, e.g. by setting aside 1-2 hours per day for the work, and setting up a plan for how to do it.
A plan will need two parts, how to keep an overview and how to organize the details. You will probably need two or more types of overview, e.g. an overview for your own work and one to send (as a “document list”).
While I agree, Ken Bell is too experienced to reveal his cards just because the other side decided he’s bluffing and decides to raise. (Lots of poker terms)
Receiver: I’ll start… 100.
Craddock (didn’t bother looking at his cards): I’ll see your 100. Show your cards.
Receiver: Not until everybody else join or fold, and then you only see one card… just like everybody else.
🙂
Here’s another interesting twist… Some receivers are known to have gone after those who benefited from Ponzi schemes with… usury laws
From Jordan “Ponzitracker” Maglich
http://www.forbes.com/sites/jordanmaglich/2012/10/23/ponzi-scheme-victims-may-owe-triple-damages-for-usury-in-clawback-lawsuits-a-new-tool-in-ponzi-scheme-litigation/
Unfortunately, the usury laws in North Carolina is rather vague, so no idea if Ken Bell will avail himself of this option, but it would surely be interesting for the “founder’s club” or the 1200 to squirm while wondering
Whether or not the usury laws come into play here, it should be noted, as Mr Maglich points out:
Observers of the HYIP ponzi scene have noted a gradual hardening of attitudes by lawmakers since the days of the 12 Daily Pro ponzi scam.
IM(very)HO, Mr Bell has signaled he has no intention to reverse this trend.
On the contrary, it appears from the outside he is well aware of the criminal nature of many of the Zeek “insiders” and intends to fully pursue all legal avenues open to his office in an effort to recover funds.
One finds it hard to imagine, given President Obamas’ very public formation of his Financial Action Task Force and it’s involvement in previous HYIP ponzi prosecutions, that the Zeek fraud and fraudsters will escape anywhere near as lightly as have insiders of previous HYIP ponzi schemes.
One needs on to contrast the $4.2 million civil against serial HYIP ponzi promoter, Matt Gagnon with what has(n’t) occurred in previous HYIP ponzi cases, and the Secret Service’ growing role in prosecutions to realize, “The times, they ARE a changin'”
When investors loan money to a company at a usurious rate (knowingly or not) the company may recover interest it paid to those investor-lenders, plus statutory penalties.
The article emphasizes that the recovery is sought from the VICTIMS of the ponzi not from those who benefited. ?
Receivers/Trustees are directed by the Court to recover assets and maximize the value of the estate. Paradoxically to do this it may be necessary to claim against some of the victims themselves.
This is because in many ponzis there are ONLY victims (unlike Zeek) and a Trustee/Receiver may decide that the only fair thing to do is recover funds from the lesser victims for redistribution to the greater victims, thus equalizing the losses.
If Bell want to equalize the losses between all Zeek participants he needs to do more than just clawback the “net winnings.” He must assert other theories (like usury) and find statutes that allow him to add penalties and fines for those who facilitated and profited from this scheme.
P.S.
K. Chang, thank your bringing the article to our attention.
Why would it be fair to only punish those who made profit, as in triple payback? Just because you didn’t make money doesn’t mean you weren’t equally at fault for participation in one.
Since it’s really just timing in these things, everybody is equally at fault as far as I’m concerned, just because you were in early…doesn’t make you any more or less wrong than the person in last.
If you could prove someone was knowingly promoting a ponzi…then yeah. But then that would have to be proven.
Unfortunately it’s not my call. He’s gonna do what he’s gonna do…as usual.
First of all the law does not view ponzi proceeds as profit but as money that a person has taken possession of from a pool of funds contributed by numerous people.
Those that got in early often take possession of more funds than they themselves contributed (perhaps this applies to you) while those who joined later may have contributed something but withdrawn nothing. They are net losers and you would be called a net winner.
The net winners are being asked to return funds in their possession back to the pool of funds (the REX estate in this case) while the net loser owe nothing to the pool.
In a perfect world where the net winners gave back what’s in their possession and the net losers owe nothing the pool would contain exactly what the aggregated parties contributed and there would be enough to give everyone back their original investment and everyone could just go home. That never is the case.
The pool will be short: because the overhead of administering the estate will diminish it by a significant percentage, because a Trustee or Receiver will not be able to recover everything from the net winners, or a promoter will withdraw and spend money that does not belong to him, or because a company taps into the pool to pay expenses, or borrows against it and owes interest and other creditors.
There is less to payback with than was put in.
Therefore, on a fully accounted basis EVERYONE will sustain a capital investment loss. Its just not apparent until the capital accounts are balanced.
The only way they can be made to balance, so that no one gains and everyone loses the same percentage in the pool (which the law might consider fair since everybody was defrauded alike though at different times) is by collecting funds from persons who, even after giving back their winnings, have not suffered the average capital loss of the entire pool.
For example: A late comer, before account balancing loses 90% of his net investment. You, a net winner and early participant on the other hand have lost none of your initial investment (you have merely been asked to give back excess money you took out of the pool, (which by the way was the late comers cash.)
It is not equitable that they should lose 90% of their invested capital while you should lose 0% when both of you were part of the same scheme. Your early participation does not earn that kind of advantage once the scheme is revealed. What the law says on this is not yet clear.
Current legal practices and legislation are attempting to address this imbalanced situation and allocate the losses more equitably. If that means that a person in your position must be forced to disgorge then the law may provide for just that.
As in earlier discussions concerning usury penalties, we saw that trustees have attempted to force the issue by claiming treble damages against some participants in an attempt to extract funds that will end up in the pool for subsequent pro rata distribution to all parties.
This way all unfortunate participants end up sharing the loss alike with the same percentage loss of capital. Is this good public policy? For the present it seems the answer is yes but how to obtain this outcome is an open question that Receiver Bell may be considering.
Presumably you invested in Zeek under the assumption it was legal and you would share in the company profits. So did the very last affiliate that tendered his check. What makes you any different than him. Is it not reasonable under the law that you both share the losses?
As painful as it may be, it could happen that you will be forced to come out of pocket in excess of your winnings. The Receiver has to be thinking of ways of addressing the imbalances.
The late comers, the net losers would certainly agree that something should be attempted and could rightfully try to force Bell to try in order to maximize the estate and the amount available for redistribution. This could mitigate their losses.
They understand that there are people who would have them absorb all the financial damage, up to 100% of their invested capital, while themselves having lost nothing. They are people who are not happy about it.
For now all suits against the Receiver are stayed but who knows what faction is biding its time and to what purpose.
IM(very)HO, the current scenario is not one that’s likely to change anytime soon.
By implementing what seems like a “fairer” way of recovering funds, it would serve to only further favour the criminal elements which make up a relatively large proportion of “members”
IOW, those who know/knew EXACTLY what they’re involved in and delibErately set out to avoid detection by using false identities, multiple payment processor accounts, multiple accounts under different names and addresses and who may be based offshore to the USA.
The “true believer” victim who genuinely believes he/she is participating in a legitimate enterprise and complies with the nonsensical “account verification” process would be immediately disadvantaged, and, such a policy would place the receiver in the position of having to be or employ detectives with statutory powers or have a specially assigned judge.
It’s all too easy to forget there is massive criminal involvement in a HYIP ponzi fraud such as Zeek Rewards.
These people are raking off millions, if not billions and are experienced in the avoidance of detection.
Hoss & LRM, I agree with you. The net winners shouldn’t come out to 0, while others are at a loss. I do agree you should pay back whatever you got out, and also whatever $ you put in initially, then perhaps from the pool you MIGHT get something back…just like everybody else.
I am not clear on what triple might mean. Triple your total “earnings” or triple what you initially invested.
If a person put in $2,000 and ended up getting out $100,000, you could probably hit them up for the $100,000 plus $6,000, but to expect anybody can cough up $300,000 seems impossible.
It doesn’t seem to me that it would be unreasonable to have that person return $102,000, and then they would be added to the pool for whatever refunds become available.
But it still seems to me that asking people who were in profit to return even just triple their initial investment isn’t right either. Why should they be hit so much harder than anybody else who was involved, and like LRM says, the criminal element that disappears would greatly benefit, while the true believer in profit gets left holding most of the bag.
I know it’s supposed to teach people a lesson, some will learn, and some will go right to the next one truly believing it’s real.
I guess for now this is all in theory anyway.
The idea needs to come from someone in his upline or downline, someone in a similar situation, or someone with relatively similar viewpoints as he has. Or atleast someone with a relatively similar way of thinking.
Communication is partly about “being on the same wavelength”. Not exactly the same wavelength, but about having lots of overlapping viewpoints. Without that, it will be like talking to a wall. 🙂
I have not been focusing on “communication problems”. I started with something that was more easy to identify = the subpoena and the related rules.
The basic idea is that every net loser will recover a similar percentage, the ones who have similar rights. It’s not about “everyone should share similar losses”.
The Receivership has claims against the net winners, claims that equals earnings minus investments = net winnings. He does not have any claims against investors who have withdrawn amounts EQUAL to their principal investments.
“Share the losses” will mostly reward the greedy ones. It can make people become less motivated to play it safe.
One example:
Investor “A” snd investor “B” both invests $10,000 at the same time. Investor A tries to play it safe, and is able to withdraw 80% ($8,000) before the scheme is being shut down. Investor B prefers to be “all in” with 100% reinvestment.
A’s remaining principal investment is $2,000, while B’s principal investment is $10,000. The Receiver is able to recover 50% of the money owed to investors. A will receive $1,000, and have a net loss of $1,000. B will receive $5,000, and have a net loss of $5,000.
With the “share the losses” idea, the Receiver will have to collect $2,000 from A and give it to B, so both of them have equal losses. That sounds rather meaningless?
I used only 2 investors in my example, but the idea will have a similar effect if you add hundreds or thousands of investors = the most greedy ones will be rewarded on the expense of the more careful ones.
Triple does not apply in Zeekler. It applies to the treble penalty for usurious lending in the State of California and was only an example of the statutes that Trustees and Receivers are using to recover money for estates.
@Norway, i ask that you read again what I wrote previously as your example attempts to devise a method of sharing losses between two net losers while I was addressing a way to fairly apportion losses between net losers and net winners who conceivably could become net zeros after clawback/givebacks.
The method of sharing the estate’s assets prorata between victims (claimants) is understood and does not involve one net loser victim paying another. That is not what I said, nor should it be inferred that that is what I meant.
However, in the event the Receiver can recover only a percentage of his clawback claims the gap between net winners and net losers widens and there is less money in the estate to distribute to the victims.
In such an event my hope is that the Receiver is able to recover funds from the net winners under some alternate theory of liabilility (such has been tried in the California case where treble damages for usury was claimed against some of the participants in order to recover money for all claimants of the estate.
.
@Hoss
You will see why I used 2 net losers if you’re trying to calculate some examples yourself. It’s impossible to share a loss when one of the investors has ZERO principal investment.
When the Receiver has recovered the illgotten gains from the net winners, their principal investments will be ZERO. So any calculations will end up with ZERO.
Yes. This is what I have been saying. The court must order the persons with no basis (a zero capital account) to contribute to the estate.
Under what theory of tort or statutory liability this can be be achieved here I don’t know, but unless it is done there will be those who lose all or most of their investment (the latecomers) and those who lose little or nothing (the early participant who had a chance to withdraw funds)
This is why I mentioned the California usury statutes, not because they specifically apply here, but to illustrate that there are statutes and tort theories that can result in judgments against the Zeros and force them to pay restitution to the estate.
This is at least partially true since clawbacks would result in these people moving from “net positives” to “net zeros,” which of course is a great position to be in after having participated in one of the largest ponzi schemes of all time… and considering there a hundreds of millions of dollars worth of losses anticipated for people who are “net losers.”
I won’t repeat this again, but the only way to address such an inequitable outcome and disparity is for the court to force the “net zeros” to pay into the estate. Its either that or you concede that some people were connected, dishonest, had better attorneys, or were just lucky and others were not and leave it at that.
It seems like upline or whoever he’s talking to does have similar thinking…going with Craddock. Probably another $300 down.
This is it, I’ve used this expression a 100 times. Tried logic, crying, sadness, joking, threats, nothing can sway him from his firm and absolute belief in all these “business opportunities”, regardless of ALL the failures, and thousands and thousands of dollars wasted.
So I don’t say much anymore, however hard it is. It’s been 20 years I’ve known him, and even before that…he’s not gonna get it…ever.
He would be a great case study…were someone into that.
There is no way they can claw the money back from outside the USA, I know of people who earned lots of money who live in Oz and Europe, I hope the USA participants don’t take the brunt of it all. I did say stay away to a few friends who proceeded with Zeek.
Its more work and less certain to pursue money judgments outside the US but by no means is it impossible. The Reciever will obtain judgments in the US and sell them to a collection agency for 5-10% on the dollar.
The agency will let Fang the International Debt Collector and his attorneys chase the judgment debtors down. Where there is profit….there is collection, and especially where the gross proceeds of collection could be as high as 2000% plus accruing pre-judgment interest on invested capital.
Your friends should hope they are relative small fry and can stay off the radar. I am not sure what the path is to collection in Oz but in Europe its through the Hague, Netherlands.
Wasn’t there something in the SEC filings that in accepting the fine Burks wasn’t able to contest the allegations made against him and that of Zeek Rewards?
Uh, does that mean the deal’s off?
http://www.the-dispatch.com/article/20121127/NEWS/311279978/-1/news?p=all&tc=pgall
Not at all.
His “deal” as such was with the S.E.C. and very clearly stated he neither admitted nor denied anything.
The original court order also contained a clear “stay of litigation” clause to ensure the receivership doesn’t become mired in costly and time consuming litigation to the detriment of legitimate creditors.
IANAL, nor do I play one in a TV series, but, IM(very)HO, with criminal prosecution very much still on the table, Mr Burks would be stark, staring nutso to even hint at admitting anything even what size shoes he wore while in the Zeek offices.
Unless there’s some very compelling hidden reasons for doing so, I find it hard to imagine Mr Bell would even consider for 1 minute doing any sort of “deal” which would allow a select group of creditor/victims to queue jump the rest of Zeeks’ members.
People who are not guilty, and can prove it, don’t plea “no contest”. 🙂
So now we have the precarious situation where Burks is publicly denying the SEC’s allegations, but has coughed up 4 million in fines and plead no contest to the SEC’s allegations.
Where does this put Burks and the SEC?
The “no admission” clause in his agreement means just that.
He’s paid an administrative fine and penalties which is not the same as entering a plea of guilty.
The S.E.C. court action was a “civil” action, NOT a criminal action.
The fact Burks did or did not pay the administrative fine can’t be used against him in a criminal trial.
Rest assured, criminal charges will follow as sure as night follows day.
Ask Andy Bowdoin about the differences between civil and criminal charges.
Fair enough. I thought he wasn’t able to contest the allegations publicly, which he’s gone ahead and done in challenging the civil action brought against him by affiliates.
(this is why I leave the legal analysis to the lawyers and haven’t written anything on ZR since the collapse…)
From the Dispatch:
“Filed against him and his company”. His company was transferred to the Receivership, so the lawsuit will have to be against Paul Burks himself.
Cal Cunningham (the lawyer) received some critique from me about misleading his clients, when I checked the offer he had published on his website. He was not telling his clients in a clear and understandable way some important aspects of the case, e.g. about possible conflicts between a lawsuit and the current court order.
At the time when he released his offer, several court documents related to the shutdown of ZeekRewards were already available to the public. He knew about the Receivership and about the orders related to it, e.g. about stay in other cases. He didn’t inform his potential clients about issues like that.
FAILING TO INFORM CLIENTS
Cal Cunningham failed to inform his potential clients in a clear and understandable way about Chapter VIII in the court order, the chapter about stay in “Ancillary Proceedings”. Any possible conflicts between his case and other cases were only mentioned as a “possibility”, hidden within the agreement itself.
I checked his website offer for more than 3 weeks to see if he was willing to publish more detailed info to his potential clients, but no such info showed up.
MARKETING “A PLAN”
Cal Cunningham’s initial offer was “marketed” through the local newspaper “The Dispatch”, as a solution for victims to recover losses FASTER and more EFFECTIVELY than going through the Receiver. He pretended to have a PLAN that could work, but the details in that plan were rather vague.
I expected to find more details about his plan on his website, but I didn’t find anything. So my recommendation was to AVOID signing up with him until he had released a detailed plan.
3 RED FLAGS
I will certainly NOT recommend any solutions like that,
* where a lawyer seems to be too eager to sign up clients,
* combined with rather vague plans about the RESULTS he’s intending to offer his clients,
* combined with vague and misleading information in his offer.
These 3 red flags may be related to poor communication skills, e.g. “He does know what he’s DOING, he’s just not able to COMMUNICATE it properly”.
The individual red flag can be interpreted differently, e.g. some of them can be related to “he acted in good faith / didn’t know about certain issues like stay in Ancillary Proceedings”.
No, the deal is still on.
Burks and Rex Ventures LLC (as a company) have settled a civil enforcement action with the SEC. That “deal” is intact. Burks/Rex can not renege on it, but its limited in scope and does not enjoin or encompass every potential party that could bring an action against him or the company.
Burks and the Rex/Receivership may jointly, or separately take actions to protect or further their interests against third parties.
Actions, everywhere, against the Rex/Receivership have been stayed by court order, while Burks has been sued by some affiliates (in State Court.) He denies the allegations, requests dismissal, and further argues that the court ordered stay applies to suits directed at him because his is a case “related” to the Rex/Receivership case. They are certainly intertwined… though perhaps not inextricably….
which suggests that there could be cooperation between private party affiliates and the Rex/Receiver in pursuing tort claims against financial institutions, employees, consultants and officers of Rex Ventures LLC (including Burks.)
Presumably both the Rex estate and the Zeekler affiliates have been harmed by the same individuals/entities and the same acts. It is not uncommon for the estate and victims to contribute their causes of actions into a Litigation Trust that consolidates and pursues such actions on everyone’s behalf.
ASDUPDates File share website has the North Carolina Business Court Filings available.
Burks has asked for a stay and Bell the Receiver concurs.
The plaintiff attorney, Cunningham is styling the filing as on behalf of multiple named plaintiffs, a “proposed class.”
There is an outfit in Louisanna that is also attempting to form a class.
For now there is no class and not much likelihood of one being formed (though attorneys love the idea of representing a million or more clients) while a stay is in effect.
The other night my mother-in-law told me that she heard that Zeek Rewards was going to come back. I told her not in a million years. She said, “We’ll see.” I guess those old hopes & rumors are still alive out there.
What I didn’t bring up was the fact that due to Paul Burk’s agreement with the SEC, there’s absolutely no way he could ever bring Zeek back to life. He signed over all assets and according to the agreement, he waived any right to appeal the agreement. So Zeek is firmly in the hands of the SEC, and no supposed lawsuit against the SEC will ever bring it back.
Stick a fork in it. Bury it before it stinks. Zeek is done. Zeek is dead. It is no more. It has expired and gone to meet its maker. It has ceased to be. It has run down the curtain and joined the choir invisible. If the SEC hadn’t nailed it to the perch, it’d be pushing up daisies. It is an ex-MLM!
There are some trial balloons floated by Robert Craddock and Dave Kettner about them lining up some people to launch something in the spirit of Zeek.
PPBlog would remind you that this is an EXACT replay of the ASD scam, where they rebooted the scheme under the name AdViewGlobal after ASD got shut down.
Launching a new MLM ponzi in the spirit of Zeek is one thing, but reviving Rex Venture Group and the actual Zeek Rewards is never going to happen.
My mother-in-law was adamant that the actual Zeek Rewards was going to come back to life, like so many Zeekheads were claiming a couple weeks after Zeek was shut down.
More likely the Receiver will to be launching legal scud missles. He’s filed NOTICE of the SEC v Rex case in 44 Federal Districts so as to ensure that the Charlotte Court has jurisdiction over persons and property throughout the US and its possessions.
Oh and don’t think the SEC won’t be watching closely any clone of Zeek that former members launch. I’m sure after Zeek being the biggest ponzi in the history of the US, they will (or should at least) be keeping an eye on any new scheme former big players come up with.
UPDATE:
“Kenneth Bell Issues 4th Quarter Report On Rex Venture Group”
Troy Dooly has a 22 minutes video + an article about it.
http://mlmhelpdesk.com/zeek-rewards-news-court-info-kenneth-bell-issues-4th-quarter-report-on-rex-venture-group/
Ponzitracker.com has an article about it.
http://www.ponzitracker.com/main/2013/1/31/zeek-receiver-issues-quarterly-report-claim-form-expected-to.html
I haven’t found the actual report yet, but according to Troy Dooly it contained some important information about taxes, plus alot of other information.
Sooo… 1099’s are being issued for 2012 by Kenneth Bell. The amount was quite a bit more than hubby actually received. So if we pay taxes on this, then there won’t be full amount left to pay the receiver back, when it comes to it.
I guess he hopes this would encourage one to get this settled. The Zeek headache is becoming a migraine.
If the 1099’s are being calculated on what was “withdrawn” (not on the silly virtual points Zeek affiliates thought was real money), then if your husband has records it’s probably a good idea to get in touch with the receiver and clarify things.
The 1099 issue is one of the unfortunate side effects of the collapse of (US based) HYIP ponzi frauds.
Whether intentionally or not, those behind ponzi frauds are notoriously bad record keepers and, in many cases deliberately use fake 1099s as a means of convincing their victims of the legitimacy of their “business”
@Erin
I have browsed through some other court documents. Fun Club USA has actually managed to fight some points in the subpoena, as far as I could see. Kenneth Bell removed some of the points in a new subpoena to Sorrells, Kettner, Kettner.
That part of the case is still active, there hasn’t been any final conclusion yet.
Sorrells, Kettner and Kettner is fighting for “Unfreeze of third party accounts” (the e-Wallets), document 73 or something as the initial document. Trying to change the subpoenas is a part of their claims.
Their strategy has been “play stupid and don’t admit anything, but hire a skilled lawyer to fight for you”. They have managed to score a few points (as far as I could see).
The other intervening party is Trudy Gilmond and Kellie King, document 84 or something. Their strategy has been “attacking the appointment of the Receiver”, based on some basic logics.
* there wasn’t any “securities” in ZeekRewards
* that logic is supported by all the work connected to recruiting customers and affiliates (the work is poorly documented, but it can be believable)
* if there is real work connected to the payment, then it isn’t a passive investment (“securities”)
* if it isn’t “securities”, then SEC isn’t the right authority, and then the Receiver shouldn’t have been appointed
and so on.
I don’t think any of them will “win”, neither Sorrells/Kettner nor Gilmond/King. But they may score a few points, affecting the case in some ways. Both of them have factual flaws in their “play stupid” strategies, e.g. misinterpretation of important facts.
* Sorrells/Kettner has ignored some information from NxPay about the e-Wallets, information about “VIRTUAL funds”. They have misinterpreted what an e-Wallet is, and other related information.
* Gilmond/King are telling “believable stories”, but the stories are mostly backed up by their other stories. 🙂
Thank you Norway. I did read the quarterly report, interesting, but didn’t help my tax mess any.
My husband paid the $300 to the Fun Club to contest the subpoena. I would like to know the response to that. Probably another subpoena or wait…maybe a 1099 🙂
I was finally able to go through all his records, the 1099 is correct after all. I just didn’t know how much went into one of the payment processors, and it was quite a bit more than I knew. BUT that was seized and returned back into the Zeek receiver account.
So I’m not sure how that will be handled, since the 1099 was for all money received, but they didn’t deduct the seized (clawed back) money. I guess this is one for the accountant, or maybe should even have a tax attorney, I will see what the accountant advises.
He’s going to ask what the upline is going to do tax wise… might as well ask the idiots for more sage advice.
I’d like to throw my hands up and make him handle it… but you can imagine that might not be the smartest thing for me to do, with his record of decisions.
His response to the problem is that his other Ponzi’s are doing really good and he will make a lot of money there… even though I know they are both dead in the water already, but that falls on deaf ears.
And there is another problem… he used Zeek rewards money to buy into the other two, and he’s not going to get a penny out of them, so that’s going to end up lost money, out of pocket, because eventually he’s going to have to give Zeek money back.
BUT he assures me he is not doing this anymore… and he’s right, he won’t or he won’t have a wife. But then maybe he’d rather have Ponzi’s… who knows.
He still fully believes it was a legitimate business, the mean old jealous govt shut it down, oh and you blog people who get paid per click.
Gilmond was in the upline… I believe she is a serial ponzi player from what I’ve read. I probably shouldn’t say anything else about what I think about her.
Hey gang, just got my 1099 today, looks correct. Any ideas when we’ll be hearing from Bell about paying him back?
I was prepared to hear something like that, after reading through Sorrells, Kettner, Kettner.
Send information to the Receiver about it? “As far as I can see, the money clawed back from the payment processors have been included in the 1099”. You can correct the amount yourself when you’re filing
yourhis tax return for 2012. You can probably correct the 1099 for 2011 too, in the tax return for 2012.The money clawed back from the payment processors may also have been included in the other claims from the Receiver. He can’t clawback twice. Send him a mesage about it if he has included something that shouldn’t have been included.
Which two other programs? We have reviewed several other MLM penny auction programs here.
Honestly, I knew he had reinvested some of the Zeek money into other programs. When one program has rewarded you handsomely, it’s very tempting to try the same strategy in other programs.
The Receiver will normally offer a “discount” if people are willing to accept a voluntarily solution, 10% discount or something. I have seen that in other cases, but that was mostly for lower amounts (up to $50,000 or so).
There haven’t been many new programs to join after Zeek’s shutdown.
I posted something about a NEW Zeek clone 1 week ago in a Norwegian forum, as an answer to something about new programs.
It has the same “give away samples, and earn 1.25% profit share for 105 days”. It was clearly designed to attract former Zeek members.
It’s called JubiMax / JubiRev, and the penny auction has been replaced by giving away skin care samples and nutrition samples. 🙂
For victims of Zeek in the U.S.A. the I.R.S. has several pages specifically for the victims of ponzi fraud:
http://www.irs.gov/Businesses/Corporations/Reporting-Losses-Resulting-from-Ponzi-Schemes
http://www.irs.gov/uac/Theft-Losses-from-Investments-in-%E2%80%9CPonzi%E2%80%9D-Schemes:-Tax-Treatment-of-Distributions-Received-From-a-Trustee-Receiver
http://www.irs.gov/uac/FAQs-Related-to-Ponzi-Scenarios-for-Clawback-Treatment
http://www.irs.gov/uac/Help-for-Victims-of-Ponzi-Investment-Schemes
Just a sidenote before anyone asks, JubiMax and JubiRev are on my watchlist but as of yet no compensation plan has been made public (AFAIK).
Norway, Banners Brokers and Profitable Sunrise. Nothing to do with penny auctions. Reviews don’t matter…he just wholeheartedly believes.
Thank you LRM, I have forwarded the links to my accountant, but I hope we can get some conclusion regarding clawbacks before April.
@Erin
You can’t do anything with wholeheartedly believers, other than accepting them. It isn’t worth trying to change them, either.
What you CAN do is to meet them on the halfway, e.g. ask them to keep their own records for money IN/OUT (including internal transactions to/from payment processors), just like Howard Kaplan recommended. That will actually reduce many of the potential problems.
Trying to reduce potential trouble can clearly be worth the effort in some situations. Trying to “change” other people isn’t.
DOUBLE CLAWBACK OF SOME AMOUNTS?
I have a suspicion that the Receiver is trying to claw back some amounts TWICE, i.e. the money that were in the eWallets. I have only checked NxPay, how it was described in the court documents.
When the NxPay eWallets were frozen, the bank account was only ONE single account with $14,424,178.65 in it. And that was all, not many accounts for each and every eWallet.
When the big account was frozen, all the eWallets were frozen too. When the money in the big account was transferred to the Receivership, all the eWallets were automatically set to ZERO.
I believe money in the eWallets can have been counted as “paid out from RVG” to the owners of the eWallets. But the owners of the eWallets haven’t received the money, the Receiver clawed it back before they could receive it.
The eWallets only contained “VIRTUAL funds”, while the real money was stored in the main Rex Venture Group account.
The amounts people had in eWallets have probably been included in the claim from the Receiver, in the “The preliminary ZeekRewards records we have reviewed show that you received $xxx from ZeekRewards but paid in only $yyy. Therefore, you received $zzz of the money lost by victims that must be returned to the Receivership estate.”
I have interpreted the information I found in Case document #81, MEMORANDUM in Support re 80 MOTION FOR AN ORDER REQUIRING RELEASE OF FROZEN THIRD-PARTY ASSETS.
I have read David Sorrells description, NxSystem’s description and all other related descriptions. The Receiver’s viewpoint is that they haven’t touched any accounts belonging to the affiliates. The problem is that the affiliates’ money were stored in the main RVG account. When he emptied that account, he emptied all the eWallets too.
I have reason to believe that the virtual funds in the eWallets can have been counted as “paid out”.
It might be worth it sending an email to the Receiver with the information I have posted here. He will probably reduce the claim, with an amount similar to the amounts in the eWallets.
Taxes are due on both actual and constructive receipt of funds. Constructive receipt occurs when earnings are reinvested in more “shares” rather than distributed in cash. Many affiliates received 1099s that reflected earnings that were “reinvested” into the Retail Profit Pool even though they never received any cash.
The IRS treats the 1099 income as “paid out” by RVG and taxable in the year of receipt, Only when an individual returns all his net winnings to a Trustee or Receiver and files a Section 165 Fraud Loss Claim will the IRS become informed and recognize that the taxpayer rendered taxes on earnings that were returned to the estate under the auspices of the Court ordered Receiver.
When this takes place an adjustment or tax credit is available to offset previously paid taxes. If taxes are not paid on 1099 income for 2012 by April 15th of this year penalties and interest will accrue until paid or a Section 165 filing is accepted that stops the penalty and interest clock.
Net earnings, even after returning funds to the Receiver, are taxable and you may not receive a credit for taxes paid on false ponzi income unless you return net winnings to the estate and file for a tax credit or refund under under Section 165.
Unless you really believe that your Zeek income was legitimate profits from operations AND are willing to prove it, the best course of action is to pay taxes due by April 15th and then deal with the clawback demands as best you can. Once that is settled file a Section 165 claim.
Correction: There is no rationale for not paying taxes on the 1099 income by April 15th. If Zeek was legit you owe them and if Zeek was not legit you owe them…. but may recover the taxes paid.
Troy has an interview with Sandy Botkin about how to solve taxes for ZeekRewards, around 16 minutes into a 30 minutes video.
http://mlmhelpdesk.com/zeek-reward-court-tax-info-sandy-botkin-talks-about-1099-issues-and-much-more/
4 minutes intro with Troy
12 minutes Sandy Botkin promoting his “TaxBot” App. 🙂
… from 16 minutes there’s something about Zeek taxes.
Examples:
^People can send an amended tax return for 2011, if the 1099 showed more than they actually did withdraw.
* People can send an amended tax return for 2012, for the same reason. You’ll have to file the information, but you can correct it.
* Money lost in scam can be deducted from income (rather than as loss on investment), 2 years back in time and up to 20 years forward in time.
Both Troy and Sandy Botkin had heard from net winners having positive experience with making deals with the Receiver.
Applications for Extension of Time to File are granted automatically but the taxpayer MUST still pay any taxes due by April 15th to avoid penalties and interest.
Of course one may conclude for themself that no taxes are due, and if they are correct then paying nothing by April 15th does not matter, but if they are incorrect they will be penalized.
The burden of proof will be on the taxpayer to show that the 1099 was in error.
I believe that idea will fail the tests, it doesn’t meet the conditions for “Constructive receipt” or “Cash equivalence” doctrines.
People didn’t receive MONEY to their backoffices or eWallets, they receive non-taxable virtual currencies. They shouldn’t pay any taxes on investments in virtual currencies.
Money WITHDRAWN from eWallets are taxable, if they have received MORE than their own investments.
This is one area that requires close scrutiny and a sharp pencil. The statutes were pretty well settled until Madoff came along and then a flurry of new laws were passed that helped Madoff victims but confused things too.
Unless someone has lost a lot of money relative to current income it may be better to just take a capital loss rather than fool around with fraud losses. It is VERY individual so look before you leap.
Beware: There is an “Fraud Loss Recovery” industry out there that will gladly tell you stories and take your money (or a portion of any refund) to handle tax filings for you. Chances are very good that you do not need them or want them to handle your taxes.
The type of “experts” currently being introduced around are not necessary, nor are they neccessarily experts at all. Any H&R Block associate can do it for a simple flat fee or one can accomplish it for himself using Turbo Tax.
I have trouble loading threads with more than 600 posts, so we’ll have to move the discussion to another thread.
* The newest Zeek/Funky Shark thread has 4 comments, but they’re mostly about Funky Shark.
* This old ZeekRewards thread has 115 comments, and can be used for tax discussions and other discussions.
https://behindmlm.com/companies/zeek-rewards/keith-laggos-ftc-to-hit-zeekler-within-6-months/
TAXES
Net winners will have to pay taxes for their net winnings, but only for net winnings they have been able to withdraw.
* Money received to eWallets and withdrawn from eWallets = taxable, but can later be deducted. Only net winnings are taxable. Money returned to the Receiver will be deductible. Money withdrawn will meet the tax doctrines conditions.
* Money received to eWallets but not withdrawn = not taxable (the 1099 should be corrected). The eWallets contained only virtual funds, not real money. The eWallets will fail the two tax doctrines.
* Money received to the backoffice and reinvested = not taxable (the 1099 should be corrected). The backoffice contained only virtual currencies and no real money. The backoffice will clearly fail the two tax doctrines.
I haven’t analysed deductions for net losers. They should look at the links in post #809.
“Burden of proof” will be about proving what you have paid IN, what you have received OUT, and what you eventually will have to return to the Receiver.
Any other “Burden of proof” shouldn’t be any problem. The two tax doctrines clearly tells what’s taxable or not. Zeek has already been shut down, so there’s no doubt about whether or not it really was a Ponzi scheme. The IRS will probably respect the court order.
Many people are reporting that they are receiving 1099s, and yet they never withdrew anything. As you explain it they should not have gotten the 1099s….and yet they did.
RVG reported and is reporting Miscellaneous income to the IRS and its taxable until the taxpayer claims and proves otherwise.
You and I know that there is no constructive receipt or cash equivalence because it was all accounting entries and fraudulent transfers but the IRS doesn’t know it.
All they know is that the taxpayer’s Social Security number has reported Miscellaneous income. The Receiver does not even categorize it but its pretty obvious what he is reporting and how he derived the $ amounts (and it wasn’t from cash withdrawals).
Its up to the taxpayer to claim adjustments or file Fraud Loss claims to rectify the situation.
@Hoss
I’ll have to move the discussion to a shorter thread, the one with approx. 115 comments. Link can be found in post #820.
Tried a different browser? I have no problems loading larger comment numbered post, not even the 1000+ big boys.
(if you have, might be time for a new PC!)
Yes, I have tried Firefox and IE8. I’ll need to upgrade the computer (from 2Gb RAM) to be able to load threads > 800 posts within reasonable time. “Reasonable time” includes both loading and reloading after a comment has been posted.
April 15th and tax returns are an upcoming topic that CAN be very active. I preferred to move the discussion to a thread with fewer posts, linking in both directions between them.
There IS an upper limit for the number of comments in a thread, i.e. what the template is designed for to work properly. The days around Zeek’s collapse clearly showed the upper limits were reached.
A long term solution will probably be to divide threads into smaller parts, e.g. like they do with forum threads.
Hmm, my little crappy 5 year old EeePC (2gb ram) loads the pages fine in Chrome so not sure what’s going on there (<5 sec).
I've thought about enabling WordPress' multiple comment pages option (or installing a plugin) but I personally don't like having comments spread out over multiple pages. It becomes a PITA when referencing earlier comments (and increases pageloads when people are more inclined to read all the comments in a discussion as they are here).
@Erin
Profitable Sunrise received a temporary “Cease and Desist” February 27, from North Carolina’s Secretary of State.
http://www.patrickpretty.com/2013/03/01/urgent-bulletin-moving-north-carolina-orders-profitable-sunrise-to-cease-and-desist-state-calls-it-an-immediate-and-significant-danger/
Other source (link disabled to avoid moderation queue):
secretary.state.nc.us/sec/actions.aspx#
This news was posted by NHRA in another thread here.
Just thought I would let you all know that Dawn Olivaries Wright now is promoting an online radio show called The Dash (thedashradio.com) all about entrepreneurship.
Funny she doesn’t mention Zeek Rewards anywhere. Even more interesting is that Peter Mingils, head of one of the businesses hired by Zeek for compliance, (now THAT is funny) is a partner.
Both PS and BB, dead in the water. Shocking! 🙂 Lost all $ in both…I think he’s starting to get it, although he thinks they may still be okay, they just need a little adjusting 😉
Just wait until the “next big thing” comes along promising large returns for little work.
My in-laws are still in Blue Bird Bids for all I know, and they got into another ponzi-looking program called Triple A Marketing.
My wife signed up in that one under her parents, but I made her promise to keep any money she receives from them in a separate account and not spend it for a year just in case it’s a ponzi and there are clawbacks when it fails.
@Erin, may be time to have him “deprogrammed”.
This book may help:
http://www.amazon.com/gp/product/0892813113/ref=as_li_ss_tl?ie=UTF8&camp=1789&creative=390957&creativeASIN=0892813113&linkCode=as2&tag=ricdadtmobs-20
This guy used to be a moonie, then got out and started helping people who need to get out of cults. He’s the current expert on cult and exit counseling. He had pointed out many times before that MLMs are basically commercial cults. (search on huffpost, it’s there)
I would agree, but instead of promising enlightenment, eternal paradise, or personal fulfillment, they’re promising quick cash. And that can be an offer that’s hard to turn down to a lot of people.
@Erin
Most of us have moved over to newer Zeek threads. We have had tax discussion in one thread, and subpoena discussion in another.
One of Craddock / Kettner / Kettner / Sorrells strategies seems to have worked, heavily reducing the contents of the subpoenas to almost nothing.
Kenneth Bell has “voluntarily” restricted himself from collecting personal information not directly related to RVG. It’s old news (Jan 17 and 22), but it was new for me.
Here’s a link to the newer thread:
Bell got exactly what he wanted and needed in the stipulated Order. He is not limited to 7 but the Movants are compelled to produce the 7. He in no way restricted himself.
It was a big win for the Receivership. Look all that he got. He completely out maneuvered Alexander & Quinn who walked into a buzzsaw when they filed the Motion to Unfreeze the NX pay accounts. That allowed Bell to successfully argue that he must be allowed a minimum of the 7 items to Reply to their Unfreeze Motion.
We can take that discussion in the other thread?
My post here was just an update for Erin. I believe she has used the “Notify me about followup comments via e-mail” option in this thread. Any relevant discussion about the subpoenas will probably be of interest, if the discussion brings in anything important.
Thanks K Chang and Norway, I will move on over to the newer threads now.
@Erin
Some of us had a hyperactive tax discussion in that thread, more than 50 posts within a few days (the first few days in March). But we have moved on to other companies and other Zeek topics (in the newer threads).
Can someone please help? I’m not sure if I’m on the right thread but maybe someone could direct me to the proper place.
My husband and I joined ZEEK back in Sept. 2012 and we invested $100 because I told my husband I would divorce him if he put in a penny more! Well he recruited a friend who invested $5000!! The problem is that he received a 1099 stating that he earned $600, the man never withdrew a penny?
My husband of course asked me what he should do about it and I don’t have a clue, I wanted no part of this business after my husband spent 2 yrs in Amway and the only thing I had to show from that venture was a closet full of Amway products I didn’t want or need and a car that had an extra 100,000 miles on it from going to stupid Amway functions all across the east coast!
But I would like to help our friend out and that lead me to find Behind MLM. Any advice or info would be greatly appreciated.
IMHO, Your friend needs to contact the Receiver’s office, and hopefully they’ll give him a revised 1099 that stated he got nothing. However, the amount is small enough I’m not sure they’ll respond.
http://zeekrewardsreceivership.com/contact
The Receiver acknowledged that a computer glitch resulted in some inaccurate 1099s being issued. He reissued corrected forms about a month ago so if you friend has not received one by now it looks like there will be no further corrections for him. You can try calling the Reciever anyway.
A 1099 informs the taxpayer what the payor reported to the IRS, but not always what taxpayer actually received. If Your friend’s money was paid to an agent such as NX Pay it is taxable to him even if he never collects the money from the agent.
Your friend should contact his payment processor and check the status of his account. If its frozen or has been zeroed out then that may explain where the money is. Whatever you find out include 1099 amount in 2012 income to avoid under reporting income. You can make adjustments and explain whyat that time.
I posted this update at MoneyMakerGroup.com forum a few days ago, in the ZeekRewards thread.
We have had several tax discussions here, the last one in late February / early March 2013, but without coming to any clear conclusions (some discussions will NEVER reach a conclusion).
I recommended some people to check their 1099 or W2 tax forms for specific potential errors, and to report any errors to the Receiver. Some did it, and the Receiver has corrected the tax forms for several hundred people (sent directly to the IRS, scheduled to April 30th 2013).
The errors were:
1. Failed checks (e.g. checks sent out in the last few days before the shutdown, but cancelled by the Receiver)
2. Failed electronical transactions (I believe that was about the frozen eWallets)
MY ADVICE:
Follow K. Chang’s advice, but follow the IDEA about short and factual information (in the quote).
The Receiver HAS corrected some errors. SOME people reported errors, and he corrected all similar errors he found.
Note:
We’re not qualified to give advices, so I asked people to use their OWN brain.
Zeek Affiliates Motion To Unfreeze 3rd Party Assets is Denied.
To no one’s surprise Judge DENIES Sorrel and Kettner’s Motion to Unfreeze NX Pay Funds and a request for evidentiary Hearing.
Judge confirms that funds held by NX Pay are the property of RVG and orders they be transferred to the Receivership.
Yeah I just read over that order too. I hope the Ponzi points players are taking note.
Part of the desperation in promoting current companies like JubiRev and AddWallet by top promoters is because these guys are staring down the barrel of having to return every last dollar they made in Zeek Rewards.
Infact, you could even look at JubiRev’s recent changes as a simple money drive for top Zeek Rewards earners to raise enough money to pay off their Zeek clawback debts.
Now that they have, Beistle goes and shuts off the money fountain (referral commissions and all that nonsense about customers buying products of their own volition).
Ironically it’s the “big money” these guys were making in Zeek Rewards that’s used to lure people into these new reload schemes. If only they told these affiliates all that profit was imaginary…
It didn’t come as a surprise. But the main motive for that motion can have been to support the fight against the subpoenas, not to win the case itself.
That idea makes sense if Sorrells, Kettner, Kettner and Gilmond, King have participated in other Ponzi schemes between 2010 and 2012. The original subpoena covered the whole period 2010 – 2012, covering ALL financial transactions. It would have become rather problematic.
The fight against the subpoena can have been the main motive here.
Well, it was a lousy strategy wasn’t it.
If so, the space should be becoming increasingly risky for non-insiders.
The motion had always been a delay tactic, IMHO. They know they’ll get denied, but it was launched for several reasons
1) It has propaganda value, i.e. it *sounds* good to the sheeple: we are trying to get your money back!
2) It may delay the clawback if their lawyers can create enough doubt (not that there’s much chance of it)
3) It can be used as rallying point for fund raisers and such
4) It serves as distraction while the net winners focus on moving their money to offshore HYIPs and whatnot while negotiating with receiver on how to return the minimum amount possible.
It was always risky for people not in the “founder’s circle” or whatever the core members were called. If you get in early enough and got enough points you may make some profit, but it’s always been the “dregs” left by the top players.
As in the Verge “Scamworld” article, they’re the “social proof” that kept the scam going, as they’re the ones really out there pushing the various scams, hoping to get into the inner circle and make it big, but rarely if ever do.
This has always been a hyper risky area of commerce, but if as Oz suggested there is some sense of desperation at the top due to the Zeek clawbacks, I consider how “desperate people” respond under such circumstances.
My assumption is that they assume more risk in an attempt to acheive greater profits and to the extent possible, lay the risk of any failure off on their underlings.
That I believe leads to more total risk in the commercial space for everyone thats in it because there could be a cascade of failures if people lose confidence. I categorize much of what these companies do as a “confidence game” so I hope you get the connection.
For example, the recent Jubi moves are rather risky for that company as well as others in the niche since it calls into question the viability and legality of not only Jubi but similarly constructed programs. While Jubi seems to be trying to enhance revenue the recent changes may do just the opposite.
That’s risky and its risky for everyone in the space.
I respectfully disagree.
They were ardent in wanting that money released. The Fun Club I mean. They threatened NX Pay with a million man lawsuit if they would not release the funds but NX Pay froze them anyway which is why Fun Clubbers filed the suit.
They wanted/needed that money to pay for their clawback defense and they needed a win to maintain the support of their donors. Instead they came off as ill informed, poorly represented impotents who were compelled to produce documents only to find that they never got a chance to have an evidentiary hearing on the issues anyway.
They got totally pasted. Spanked and sent to bed without dinner. Demolished. Its rare to hear so much noise as Craddock and the Fun Club made to such inconsequential effect.
I think this is where we agree to disagree. IMHO, they should know that whatever money is in NX’s account for Zeek would belong to the receivership and there’s NO WAY it will be released for distribution by someone else.
NX System has two choices: SEC asset freeze order, or some affiliates that *may* sue them for the funds (that legally belonged to Zeek, and thus, receivership). The choice is clear. Thus, IMHO NX System knows the lawsuit from ZTeamBiz or “Save Zeek” is an empty threat, and can be safely ignored.
And whoever launched this lawsuit can read the tea leaves as well as you and I.
Thus, I conclude that the lawsuit is launched for the propaganda value, not for actual chances of success.
Actually, it’s not.
As similar tactic has been used following the collapse of most the “next big thing” HYIPs stretching back a number of years.
The names may have changed, but the tactics are almost identical.
If your sample group is limited to hair-brained HYIP defendants then you are likely correct.
“Motion to Compel” ended up in a heavily reduced subpoena, only covering basic information, e.g. about Zeek’s marketing and agreements. The two other cases were used to support the arguments there.
Both the two other cases had several flawed arguments, flawed enough for a lawyer to KNOW they wouldn’t work (when I can see that, so can a lawyer), but good enough to make up “believable stories” in support for “reasonable doubt” about something.
The MAIN strategy here can have been “Protect against the risk of being too involved in any criminal charges, by building up a defense system that later can be used for that purpose” and “Fight actions that potentially can expose you to criminal charges (or civil remedies)”.
“Motion to Compel” ended up in stripping the Receiver for investigative powers he BELIEVED he had, but where the counter parties pointed out flaws in his procedures and arguments, e.g. he didn’t have an automatic RIGHT to send out overly broad and burdensome subpoenas without asking the court for permission first.
Strategy is often about analysing your opponent’s strategy and find counter strategies that can work, several steps forward in the battle. It’s both about building up defense strategies and attack strategies. It’s often about leading your opponent to make some bad decisions rather making decisions yourself.
Strategy goes far beyond tactics. Tactics is the methods you use to fight the current problem right in front of you, or about making your opponent BELIEVE you’re fighting the problem right in front of you.
For a serial Ponzi player, the subpoena represented a much more serious problem than the frozen eWallet accounts. I believe ALL the different Motions were co-ordinated actions supporting a main strategy, rather than individual actions directed towards individual goals.
EXAMPLE FOR STRATEGIES IN DISCUSSIONS
We had someone posting an emotional post in a ZeekRewards thread about “how scary the reviews were”, clearly building up a strategy for some followup posts.
I didn’t manage to identify his strategy exactly, but I offered a possible solution for him where Oz could post a warning message in the beginning of the article, warning readers like him about scary contents and “do not read late at night if your easily affected by material found on the internet”. I also asked him to specify some of the scary parts so we could look into the problem.
I used JOKES as a first counter tactics, joking about his exaggerated focus on his own feelings (how “scared” he had been by reading the comments). He then tried “innocence abused” tactics, feeling abused about the jokes.
I countered that by pointing out the “Drama Queen” role he acted in. A “Drama Queen” is typically someone who tries to manipulate other people by using exaggerated “hurt feelings” and how other people are responsible for that, adding a whole story of unrelated details (e.g. about other people being exposed for similar “bad behavior”, being “ruined for life”). He HAD arguments like that.
He then tried the “Nitpicker tactics”. I pointed that out by linking to “Flame Warriors”, an internet site making parodies of different tactics/strategies commonly found on the internet. I believe Oz then deleted the whole discussion, it didn’t bring anything of value to the main topic.
My MAIN STRATEGY was not the problem right in front of me, he was a rather weak fighter anyway (using “school debate” techniques). The MAIN strategy was to tell other readers that “If you’re trying to use weird strategies like that, it will be countered and you will potentially feel hurt”.
Some of the money in NX Pay was not Zeek’s (RVG’s)because it was never used to buy bids. Those funds remained in transit, held by NX Pay at the time of the SEC action and returned to individual NX Pay clients. Admittedly, this was a special case but it illustrates that differentiations did exist.
Remember the Fun Clubber’s Motion was not only for the release of the funds but also for an Evidentiary Hearing. They wanted to lay out before the Court all of their pet theories and proofs of why Zeek Rewards was not a pyramid/ponzi scheme at all. Pretty obviously if the Court agreed with them about that, then the money rightfully belonged to the Fun Clubber’s not to RVG.
Unfortunately for the Fun Clubbers they mistakenly argued that NX Pay was “like a bank account.” In Opposition Bell proved by citing the NX Pay Terms and Conditions of Use that NX Pay operatd nothing like a bank at all because contractually RVG had a right to repossess money under NX Pay’s control at any time and or any reason before it was withdrawn by the NX Pay account holder (even if RVG were not in Receivership)
Based on that proof the Judge determined the money should be transferred to RVG and that there was no need for an evidentiary hearing.
The filings though separated by several months have not delayed anything, nor can I imagine they have been very time consuming to address. The issues were so cut and dried that after the Receiver filed his Declaration concering the NX Pay Terms and Conditions the Fun Club did not even bother to file a Reply to the Opposition. They were done.
I am not saying that the Fun Club would not have welcomed a delay but the overriding desire by the Fun Clubbers was to deprive the Receiver of assets frozen or transferred by ALL third party payment processors and gain their release.
The evidentiary hearing could have been time consuming but the court denied the motion.
We already discussed this ad nauseum. The Motion to Compel was resolved by a Stipulated Agreement and Order that limited the immediately discoverable items requested from the Fun Clubbers to what the Reciever agreed he would accept.
There was never a RULING. The Reciever reserved all rights to further discovery as to those individuals and none of it has anything to do with anyone that was not a movant in the Motion to Unfreeze.
Are you saying Disners’ efforts in the AdSurf Daily case were so “harebrained” as to be insignificant ??
Rather than being “harebrained HYIP defendants” I would argue that what is happening is calculated to ensure as many Zeek members remain faithful to the HYIP ponzi “industry” as is possible, and that all the pseudo legal huffing and puffing is NOT intended as any sort of delaying tactic as much as to keep the faithful on board for the “next one”
Disner and his cronies have been here before.
They KNOW with absolute certainty their arguments will hold no water.
Just as they KNOW by pushing the “ebil gubmint” line while Zeek members are still hurting, they will play on peoples’ natural distrust of the system, making them easy targets for the next “big thing” opportunity/ies
I am not familiar with it.
What I was/am saying is that the money raising campaign conducted by the Fun Club and the legal filings made by some its members were of inconsequential legal effect.
From a legal stand point they were hairbrained, bordering on the frivolous. In the wide range of possible commercial litigation this effort was laughably inadequate and inconsequential.
If you contend that some, any, legal action, no matter how misguided and ill conceived is all that is needed to convince the HYIP troops that their leaders are working for their interests then its a dimension I was not considering.
And that is the whole problem.
You are looking at this matter in isolation.
It’s not.
With extremely minor differences, this is an almost exact duplicate of the AdSurf Daily HYIP ponzi autosurf.
For “Fun Club” substitute “JoyLuck Club” and the whole setup, including court actions match.
I think these con men are dishonest immoral imbeciles and not worth even considering. You build monuments to them?
Who has the problem?
That would be “dishonest immoral imbeciles who stole upward of $600 MILLION“ which IS worth considering.
It’s not a matter of building monuments to them.
It’s a matter of learning the lessons history provides.
“Mistaken arguments” isn’t reflected in other parts of the case, e.g. in “Reply to Motion to Compel” (and the Order related to it). The lawyer didn’t have any “mistaken arguments” in that case.
I may over estimate people’s intelligence from time to time, but when I am able to find logical flaws in arguments in a Motion then I seriously will believe an experienced lawyer have found them, too.
I identified the flawed cases February 3rd, post #804 or something:
They DID score “a few points” in the related case about the subpoenas. A strategy doesn’t have to be about winning each and every “battle”, it’s much more rational to focus on the important ones. They HAVE affected the case in some ways.
You have added an imaginary scenario to your own interpretation of the case, where the parties desperately needed the money in the frozen eWallets to pay for the defense, making that case becoming highly important to win.
I have used a different interpretation, seeing all the different intervention Motions as part of one single strategy rather than as individual cases.
Lesson learned. Move on.
There is nothing imaginary here. I listened to Robert Craddock remarks on a conference call. He laid out the legal strategy Quilling and Alexander would pursue. It was as I have described it.
That will support K. Chang’s theories rather than your own? Not the fact that YOU listened to it, but the fact that the strategy was presented in a conference call to “the sheeples”.
The only part where they have achieved any significant results is in the subpoena part of the case. The subpoena was heavily reduced from 25 points, down to 13 points, down to 5 or 7 points mostly about general info.
“It’s nothing imaginary. I listened to Robert Craddock, and it was as I have described it”. That is very close to my description of “imaginary”, it’s only a variation of the same argument.
I don’t see any significant differences in adding something from own imagination and adding something from Robert Craddock’s presentation to the sheeples. Both methods will need to involve a belief system before they can be accepted by the brain. 🙂
God, you do babble on.
I just looked it up and yes they had no influence on the outcome of the case. The USSS still has the seized assets. The second round of remissions is in progress. Bowdoin is in jail and the scatterbrained efforts by Disner to overturn the seizure warrants went no where.
He did get some donations from gullible old ladies , which he then frittered away in quixotic legal attacks. So what big lesson from the past is this supposed to impart to me?
Wait I figured it out. The big history lesson here is……
Do not be a gullible old lady.
Don’t be gullible sheeple following judas goats.
Somebody should start a website for sheeple so they can learn not to follow goats.
wwww.dontfollowgoats.com
You have probably misinterpreted the history lesson. It’s not about old ladies, but about being gullible.
It will be rather difficult for you to become an old lady, but being gullible is probably much more easy to achieve. All you need is to convince yourself about “But Robert Craddock SAID so, their main strategy WAS about winning those 2 cases”. 🙂
How’s the view from up there in your ivory tower ??
I can go one better.
How about instead of “don’t be a gullible old lady” how about we simply say “just say no”
At latest count there were over a million “gullible old ladies” who signed up with Zeek and there’s one “HOSS”
I’d say your approach is falling a little short there when it comes to preventing further victims.
Which, after all, is why most of us are here, isn’t it ???
Not to crow about how smart WE are, but at least make an attempt to prevent further victims
Right, I must have missed the part where everything was revealed only to you. Quilling and Alexander did exactly what Craddock said would be done and what the 1800 persons on the conference calls expected e, but it is only you who understand the true motivations.
You are amazing.
No norway its about little old ladies.
Excellent.
Next time you post, just include a “only to be read by little old ladies” disclaimer
Disclaimer: ONLY TO BE READ BY LITTLE OLD LADIES
Unfortunately “HOSS” is one of those people who can spend hours and hours on academic discussion while ignoring the fact that in the real world, hundreds of thousands of people DO believe that because Robert Craddock said his strategy was about winning that was the main reason for the action.
Others with perhaps greater insight and a sense of history, point out the tactic has been used before in similar cases (and with great effect, BTW) and it’s REAL purpose is to keep as many of the million plus Zeeklers involved convinced there is hope of Zeek returning and, more importantly, pseudo MLM HYIP ponzis are a viable proposition.
I fail to see how going into court and getting your ass handed to you in a bucket convinces anyone that MLM HYIP ponzis are a viable proposition. It proves just the opposite. Check your assumptions.
That’s OK, Hoss.
You keep theorizing and the rest of us will keep pointing out the tactic has been used before.
As you pointed out in a previous post, you are not familiar with the AdSurf Daily case, the fact the same tactics were used then OR the fact it kept hundreds of thousands of victims “on board”
So be it.
For anyone who IS prepared to concede that perhaps Zeek is not a one off fraud and they perhaps COULD profit from the lessons of history, the similarities are blindingly obvious and understanding that fact will help some of them to avoid falling for the trap again in the future.
Insanity: doing the same thing over and over again and expecting different results.”
I did not “point out” that I was unfamiliar with ASD, I wrote that I was “unfamiliar” with your peculiar interpretation of what it had to do with the ass kicking the Fun Clubbers were receiving in Court. As a matter of fact I followed up with twenty five words or less summary of the government actions and unsupportable legal positions taken by the ASD promoters and apologists that wanted to perpetuate that scheme and protect their own skins.”
So? What does Disner or any other “icon” of the HYIP universe have to do with the asskicking that Quilling and Alexander have taken at the hands of the SEC and Receiver attorneys? None.
Different cases, different facts, different applicable laws. For you to write repeatedly, that “its just like ASD” is fine up to a point because there is some commonality amongst the players and methods but then there are significant differences too.
Its just plain inaccurate to say that since it was this way in ASD so it naturally follows that it must be the same in Zeek.