Zhunrize settle with SEC, fines incoming and a Receiver

zhunrize-logoWe initially reported on the SEC shutdown of Zhunrize back in late September.

Over the last few months the case has slowly progressed, culminating in a settlement agreement reached yesterday. [Continue reading…]

FDA demand Herbalife pull misleading marketing video

herbalife-logoOn the back of a Herbalife millionaire claiming that retail sales to customers don’t matter, now comes a letter from the FDA concerning what they describe as a misleading marketing video.

In a letter dated December 17th to Herablife CEO Michael Johnson, the FDA’s Michael R. Taylor, Deputy Commissioner for Foods and Veterinary Medicine, writes [Continue reading…]

Achieve Community sign Global Cash Card, co-founder bails

achieve-community-logoAfter Payoneer terminated Achieve Community’s payment processor services in early November, the opportunity has been in limbo for over a month.

Deposits into Achieve were re-instated two weeks ago via Asian processor iPayDNA, with members reporting unrelated companies showing up on credit card statements shortly thereafter.

Now it appears withdrawals are poised to start up again, with co-founder Kristi Johnson announcing today that Achieve has signed up with Global Cash Card. [Continue reading…]

Receiver files default judgements against Canadian net-winners

zeekrewardsClawback litigation was filed against Zeek Reward’s top net-winners in Canada back in early November.

With the twenty-one day deadline to file a response well and truly past, the Receiver has now filed for default judgement against several non-responsive defendants. [Continue reading…]

Sorrells appeal denied, $1.19M dollar default judgement stands

zeekrewards“It’s like watching the blind lead the blind…”

Having likely colluded with fellow defendant Todd Disner, David Sorrells sought to escape the default judgement rendered against him back in July.

Like Disner, Sorrells figured if he ignored the clawback litigation filed against him, that he wouldn’t have to return the Ponzi funds he stole from Zeek Rewards victims.

Like Disner, yesterday Sorrells’ actions caught up with him. [Continue reading…]

TelexFree Criminal Case Interim Status Report (Dec 2014)

telexfree-logoAs per the local rules of the District Court of Massachusetts, the James Merrill’s attorney and the US Attorney’s Office (DOJ) have filed an interim status report.

The report, filed ahead of today’s hearing (December 18th), provides some updates and insight into the status of the Wanzeler/Merrill criminal case. [Continue reading…]

Avon fined $135 million for bribing Chinese officials

avon-logoShedding light on what the MLM industry gets up to in China, comes news today that Avon has plead guilty to conspiring to violate the Foreign Corrupt Practices Act (FCPA) and the Securities Exchange Act.

Two separate cases were filed by US regulators, one by the SEC and another the result of joint-investigation by the US Attorney’s Office, the Department of Justice and the FBI. [Continue reading…]

Millionaire Earner: “Herbalife not based on customer purchases”

herbalife-logoIn what looks like a hotel conference room, Stephan Gratziani delivers a training presentation to a crowd of a hundred or so Herbalife affiliates.

The Herbalife business model at this point in time is not based on customers purchasing, it’s based on distributors purchasing volume.

Several Herbalife executive managers are in the audience, including then Vice-President Mike McKee, Senior Vice-Presidents Rob Levy and Bruce Peters, and Board Member Leslie Stanford.


Yet nobody makes a move to interrupt Gratziani. Instead, with Herbalife executives sitting in the audience, he continues…


That is the Herbalife business model, that is the way it works.

Gratziani’s frank assessment of Herbalife’s business model was made during a three-hour long closed-door training presentation. The presentation was given back in 2005, the same year Gratziani made $1.75 million as a Herbalife affiliate.

Needless to say nobody knows better how Gratziani made his money that year. And from the sounds of it, it had nothing to do with the selling of Herbalife products to retail customers. [Continue reading…]

PCI collected $9.7 million from Zeek, claim to be victims

zeekrewardsThe ongoing battle between the Zeek Rewards Receivership and Plastic Cash International (PCI) has seen the Receivership demand the company return an outstanding $8.9 million in fees collected from Rex Venture Group (Zeek’s parent company).

Plastic Cash International provided Rex Venture Group with access to payment processor services, permitting them to continue defrauding investors to the tune of $850 million dollars.

Yet despite this relationship, PCI’s involvement in Zeek was only discovered after PCI had the gall to demand lodge a claim with the Receiver in mid-2013.

In addition to the $9.7 in fees they’d already collected, Plastic Cash have since demanded a further $14.9 million in stolen investor funds.

Initial contact between the Receivership and PCI saw the company attempt to hide its involvement with Rex Venture Group.

PCI conducted all business with Zeek through a bank account in the name  of “SecureNet”, an unrelated direct payment processor.

Investigation by the Secret Service resulting in $812,433.96 seized from a PCI bank account.

At the time PCI failed to disclose that they held any additional RVG funds. It wasn’t until forensic accounting revealed that a further $8.9 million had been stashed in an account with the  Los Angeles Firemen’s Credit Union, that the full of extent of PCI’s involvement with Zeek was uncovered.

While the Receivership was tracking down these funds, PCI withdrew the money. To date the whereabouts of the funds are unknown.

In the face of PCI refusing to cooperate, the Receiver recently filed a motion asking the court to order PCI to hand over the funds and hold PCI in contempt of court.

A 25 page response to the Receiver’s filing was filed by PCI yesterday. In it, Plastic Cash claim that, despite profiting to the tune of almost $10 million, they are “a victim” of Zeek Rewards.

Seriously? [Continue reading…]

Disner appeal denied, $2M dollar default judgement stands

zeekrewardsIn analyzing court filings by Ponzi investors, a common thread of assuming the judiciary and regulators involved in the case are complete morons can be observed.

Whether this stems from the bubble-world such investors live in, a carry-over from treating the everyone they encounter as gullible morons (critics of the schemes they invest in are also often treated with similar contempt), a simple lack of education – who knows. But it’s definitely there.

A recent example was Faith Sloan in the SEC’s TelexFree case. Named as a defendant in the SEC’s civil case, which alleges TelexFree to be a billion dollar Ponzi, Sloan was quick to cry poor in court filings.

Simultaneously, Sloan was also openly advertising her qualification for thousands of dollars in recruitment commissions on Facebook.

Today we take a look at another example, Zeek Rewards investor Todd Disner. [Continue reading…]