Zeek Ponzi winners trying to dodge clawbacks
The first clawback claims are now imminent, and a lawsuit against multiple named defendants along with a class of net winners will be filed during the fourth quarter of 2013.
-Kenneth Bell, Zeek Rewards Receiver (October 2013)
With Zeek Rewards top net winners now staring down the barrel of pending clawback litigation, the race is on to hide assets and funds from the Zeek Receiver.
Whereas the full extent of the lengths Zeek Rewards’ top Ponzi profiteers will go to in an efforts to avoid paying back those they stole from is difficult to determine, some insight is provided by MoneyMakerGroup forum member, “HerculesUnchained”.
Seeking to join the MLM opportunity DS Domination, HerculesUnchained writes:
I would like several people to contact the CEO of DS Domination to get an answer to this inquiry. I need for you to inquire since I do not have access to the CEO.
I have been looking at the MMG forums and I spotted a program called DS Domination that looks like it is a good replacement for Zeek and there is no chance of it being attacked by a desperate government because of how it is set up, so it looks to be a very good program.
But before I sign up I want to make sure that a person can sign up using a company as the member of DS Domination and I do not want to sign up using my own name.
The reason for this is because I may soon have an unjust lawsuit against me and I can legally protect the membership I have with DSD and the profits I get from DS Domination if I use a company to sign up since a company is a separate legal “person” from myself.
The profits earned by that company can not be easily attacked after the unjust lawsuit is issued against me.
If the admin allows members to sign up using a company then I will respect him for that since he is thinking of the welfare of the membership and not just the profits that his membership can bring to him.
Please find out if we can sign up with DS Domination in a company name or not. If not, then the admin will be forcing me to be exposed to possibly losing the profits I will be forced to personally earn through DSD because of that unjust lawsuit that may soon come my way.
I need to know if the admin. will allow us to PROTECT OURSELVES LEGALLY by SIGNING UP with DSD LEGALLY THROUGH A COMPANY that we own. Please find out and get back to me. Thanks.
Also, find out if we can have the option of being issued a check or not. I would prefer that the profits which are generated to my company be issued through a check that is sent to my company.
Thanks for finding out this information for me since you are on MMG quite often. Thanks again.
That “unjust lawsuit” HerculesUnchained is referring to is the same pending clawback I quoted Kenneth Bell mentioning at the start of this article. Apparently HerculesUnchained believes ripping off people in a Ponzi scheme and being made to pay those who lost money back, is “unjust”.
Long-time readers of BehindMLM will observe this isn’t the first appearance HerculesUnchained has made on the blog.
Just over a year ago HerculesUnchained called on Bidify affiliates to launch a “recruitment strike“, following the company’s failure to pay out affiliates. Just last month, quoting “another person”, he then urged ex-Zeek Rewards affiliates to launch a lawsuit against the US government over the cost of the Obamacare website. Once this lawsuit was filed Zeek Rewards’ top affiliates would then
make a deal… that if they will drop the lawsuit against the Zeek people, then we will drop our lawsuit against them.
Meanwhile whilst I’m no expert on clawback litigation, one would hope that escaping it wasn’t as simple as registering a company and transferring all your Zeek Ponzi profits into said company’s bank accounts.
Anyone?
Meanwhile why HerculesUnchained thinks DS Domination “is a good replacement for Zeek” I have no idea.
Sure, under DS Domination’s business model the company pays out commissions on recruitment with 100% of the revenue generated via affiliate membership fees, but that’s a far cry from the $600M Ponzi investment scheme Paul Burks pioneered with Zeek Rewards.
This strategy avails him of nothing legally. His ownership interest in the new company is still an attachable asset of his person, and since he has notice of the pending RVG legal action, any attempt to avoid clawback in this way would in all likelihood be deemed an attempt to defraud his creditors.
Remember too that there is a freeze on assets of the RVG estate. Hercules appears to be in possession of RVG assets which is what Bell will be proving. Hercules in effect holds those assets in constructive trust for the RVG estate. Any attempt to break that trust is contemptuous of the court ordered freeze.
Once judgement is obtained against Hercules he is subject to a debtor’s examination where non disclosure of assets under his control is a crime.
This is a pipe dream. Noone can go up against Big Brother and expect to win. Especially this silly deal. You can’t bargain with the government.
These professional con-artist salesmen recruiters need to get a real job.
Let’s not forget about T Le Mont leaving the country!!!
The last time I saw a face like that, it had a hook in it.
__Rodney Dangerfield
I think what it sounds like he’s trying to do is set up an account in this new investment scheme under a “business name” so that if it gets shut down like Zeek did, then he won’t be subject to clawbacks, but his “business” will.
In other words, it sounds like he’s trying to use a fake name so that the clawbacks won’t be coming back to him. Perhaps if his “business” rented one of those virtual offices where you just pick up your mail and nothing more he might be able to pull it off.
Unfortunately with Zeek, affiliates weren’t allowed to use business names and had to provide their SSN.
If a clawback lawsuit defaults, it’s the perp that owes the amount.
Theoretically you can setup a LLC or a S-corp and let that be the participant, but a receiver has the court authority to order the examination and “pierce the corporate veil” to reveal the true owner, and if possible, seize the corp as assets.
Somebody or something is the owner of the business. Presumably that would be Hercules. There are many methods people use to try to hide ownership, but as you point out this brings the participants into conflict with the IRS.
The only way it’d work is if he uses a fake name when filling out the LLC papers and remains untraceable. But doing something like that is tantamount to admitting that you’re doing something wrong. I believe he’s just trying to justify it with “the government is filing unfair lawsuits against people like me.”
Untraceable seems like a rather anachronistic concept these days.
If he truly believes that the government cannot find where he has moved to, he is even more delusional than thinking Zeek Rewards was a legitimate business.
My first guess at his location was Costa Rica based on the scenery. The only question to me was which side of the country he is living, Pacific or Atlantic?
It must be the Atlantic, since there’s an iceberg in the background.
He represents that he is in the Dominican Republic
Receiver has requested leave to file a lawsuit. Putative Class Members are those with net winnings of $1000 or more.
At the same time he requested leave to file a second action against a few named insiders, Burks, Olivares etc.
He may file against others.
As discussed before judgments almost certainly will be entered against all class members (the dollar amount will be determined with specificity.)
I suggest these judgments will be auctioned en masse to a company like Portfolio Recovery Associates, Inc.
NASDAQ: PRAA who is equipped to pursue such judgments worldwide and domestically.