On February 14th the Zeek Rewards Receiver filed his Status Report for the fourth quarter of 2016.

Nothing much new in the report, but it does give us a current status update as to where everything’s at.

I’ve included the more interesting parts of the report below under respective headings.

Flow of money

During the 2016 fourth quarter, the Receiver deposited

  • $439,315 from settlements with third-parties and
  • $500,000 from the liquidation of Preferred Merchants CEO Jaymes Meyer’s forfeited Napa, California property

As of December 31, 2016, the Receivership Estate held approximately $89 million in the Affiliate Payments Account and approximately $1.5 million in the Holdback Account.

To date Zeek Rewards victims with allowed claims have recovered a minimum of 60% of funds invested.

$13.1 million VictoriaBank, Payza, PaymentWorld case

The $13.1 million dollar saga between the Receiver, Payza, PaymentWorld and VictoriaBank began a year ago and remains unresolved.

During the third quarter of 2016, the Receiver had issued subpoenas to BNY Mellon, which holds Victoriabank’s correspondent bank account, and Deutsche Bank Trust Company, which was involved in certain wire transfers as part of the Payza/PaymentWorld processing relationship.

These entities produced responsive records to the Receiver during the fourth
quarter of 2016, and the Receiver team has begun analyzing these records in preparation for briefing the jurisdictional issues before the Court.

Considering the timing of additional discovery, the Court ordered an extended briefing schedule regarding the jurisdictional challenge of Victoriabank.

As set forth in the Order, the Receivers supplemental brief in opposition to Victoriabank’s Motion to Dismiss is due on March 24, 2017; Victoriabank’s response is due on April 7, 2017; and the hearing will be conducted during the week of May 1, 2017 if the Court has availability during that week.

Preparing Dawn Wright-Olivares’ house for sale

The Receiver team worked to maintain a residential home in Clarksville, Arkansas through the engagement of local contractors.

This property was surrendered to the Receiver as part of a settlement with Defendant Dawn Wright-Olivares.

The Receiver’s local counsel in Arkansas continues work to remove a lien from the property’s title that was filed by a general contractor who had worked on the home.

In the interim, the Receiver has worked to prepare the property for sale.

Notification to US net-winners about clawback amounts

Last November Summary Judgement was granted against Zeek Rewards’ top net-winners.

The Receiver has conferred with counsel for the net winner class and presented to the Court a proposed plan that will provide notice to the net winner class and a process to determine the amount of judgment owed to the Receivership by each of the class members.

This process is expected to take several months.

In addition, the Receiver Team worked with collections counsel to pursue collection efforts regarding the named net winners against whom the Receiver had previously obtained default judgment.

Further, the Receiver’s counsel engaged in discussions with third parties regarding the collection and/or sale of potential future judgments against U.S. net winners, including the net winner class.

Foreign net-winner clawbacks

The Receiver continued litigation against the remaining defendants in the U.S. lawsuits against Canadian, Israeli, British Virgin Islander, Norwegian, French, and Swedish defendants.

The majority of these actions were stayed pending the Court’s resolution of the Receiver’s summary judgment motion in the U.S. net winner lawsuit.

Since summary judgment was decided in that action, the Receiver team has prepared and filed motions for summary judgment in many of these lawsuits, with additional summary judgment motions being prepared in others.

In addition, the Receiver Team continued to pursue fraudulently transferred assets from foreign net winners against whom the Receiver has already obtained judgments.

Peak USA (Gary Bessoni)

Gary Bessoni sold bogus leads to Zeek Rewards affiliates, as part of the “spam the internet” ruse daily ROIs were pegged to.

Bessoni has settled but his partner in crime, Sam Adlerman, is still holding out.

The lawsuit is still in the discovery phase with respect to defendant Sam Adlerman, who received commissions on the leads the Bessoni defendants provided to RVG.

Howard Kaplan

As alleged by the Receiver, Howard Kaplan provided “bad legal advice” to Zeek Rewards. The Receiver sued Kaplan for legal negligence in June, 2014.

Rather than settle and acknowledge was part of a $937 million dollar Ponzi scheme, Kaplan is fighting the lawsuit.

In the lawsuit against attorney Howard Kaplan, the Receiver engaged in early discovery with the Defendant, and the Court issued a Scheduling Order setting forth the dates and parameters of discovery for this case.

USHBB

USHBB and owners James Moore, Oscar Brown and Robert Mecham, assisted in the promotion of Zeek Rewards at a corporate level.

The Receiver sued them for $750,000 in June of 2015.

In the lawsuit against USHBB and its principals, the matter was stayed until the Court’s Order on summary judgment in the U.S. net winner lawsuit.

The Receiver is evaluating the next steps in proceeding with this case.

 

A copy of the Zeek Receiver’s 4th quarter 2016 Status Report is available from the Receivership website. We’ll keep you updated as each of Receiver activities above progresses.