zeekrewardsIn the aftermath of the Zeek Rewards Ponzi scheme, Robert Craddock (right) self-styled himself as a major player in hustling of disenfranchised investors into new reload schemes.

Craddock did this through his entity Fun Club USA. Initially the operation was used as a front to solicit funds from Zeek investors under the guise said funds would be put towards helping those who contributed keep their ill-gotten gains.

robert-craddockIn reality, Craddock (right) amassed an email list of those who had invested in Zeek Rewards and profited. Armed with this, he then approached several reload scams that closely modeled Zeek’s Ponzi points compensation plan.

Craddock’s offer saw him demand off-the-table reimbursement for promoting an opportunity to his Zeek Rewards investor list. Whether or not those who were on the list were ever aware of Craddock’s conduct is unclear.

Two of the companies Craddock approached were OfferHubb and Bids That Give (now BTG180). In both instances the questionable schemes have since turned on Craddock and filed legal action against him.

Today we take a look at the two respective cases Craddock is currently battling out in court.

BTG180 initially launched as Bids That Give, and sought to pair Zeek’s penny auction Ponzi points model with charity. Owner Randy Jeffers placed much emphasis on “helping kids” in Bid That Give’s marketing efforts, despite Zeek’s underlying principle of investors being rewarded with newly invested funds remaining intact.

Filed in the Nevada District Court, BTG180’s lawsuit against Robert Craddock and his wife Sylvia sheds light on what Robert has been up to following the shutdown of Zeek Rewards.

On or about August 12, 2013, BTG180 entered into a contract with Defendants Craddock and Fun Club in which Craddock and Fun Club agreed to perform marketing services for BTG180.

A written contract was prepared but never signed by the parties.

Nonetheless, the terms and conditions set forth in the written document were mutually agreed upon by the parties and, in reliance, thereon, BTG180 paid Craddock and Fun Club and Craddock and Fun Club received and accepted payment from BTG180 of the sum of $50,000.

Why BTG180 paid Craddock without the contract between them having been signed is not clarified.

The “consulting agreement” contract in question is attached to the complaint as an exhibit.

In it, what BTG180 and Randy Jeffers wanted of Craddock is explicitly referenced:

(Craddock) agrees to perform the following services:

1.1 Assist in the development of locating and encourage top experienced network marketing, affiliate marketing, and multi-level marketing leaders that were involved in an affiliate marketing company called, Zeek Rewards (“Zeek”) … to assist in growing and adopting (BTG180’s) program as well as maximum early revenue.

1.2 Contact everyone on (Craddock’s) email list of affiliates from Zeek … for which (Craddock) has contact information.

(Craddock) shall make contract with all of his contacts, via email, phone, mail, or any other mode of communication (Craddock) sees fit to use. (Craddock) will share with all his contacts (BTG180’s) program.

(BTG 180) also understands that (Craddock) has continued a relationship with many thousands of people overseas that were involved in Zeek and are awaiting a new opportunity.

Knowing this (Craddock) shall share company (BTG180’s) program to all his international contacts as well.

(Craddock) will do this on a consistent and continuous basis understanding that time is of the essence and momentum is very important.

(BTG180) shall pay to (Craddock) a monthly fee of twenty-thousand dollars ($20,000), for the term of Consultant period.

(Craddock) also understands to obtain monthly fee (Craddock) must bring in to (BTG180) a new minimum monthly equal to or greater than (Craddock’s) monthly fee.

What you’re looking at there is the systematic targeting of Ponzi investors to re-invest in a scheme that closely resembles that of the shutdown Zeek Rewards, with the understanding that “time is of the essence”.

Abhorrently disgusting doesn’t even begin to describe Craddock and BTG180’s proposed agreement.

And seemingly oblivious to the regulatory action that saw Zeek Rewards shut down, calm as you like BTG180 openly cite their intentions to continue where Zeek left off in their lawsuit:

BTG180 engaged Craddock and Fun Club to market the BTG180 network marketing opportunity to former affiliates of the Zeek Rewards network, which had provided products (read: Ponzi bids) similar to those provided by BTG180.

However, Craddock and Fun Club failed to provide the marketing services and, instead, attempted to induce BTG180 to promote and incorporate into its product line a so-called checking account draft processing system known as BTM.

It’s probably worth pointing out that by August of 2013 (a year after Zeek’s shutdown), the Fun Club legal defense debacle had already played out. Any good-will Craddock might once have carried with “thousands” of Zeek investors had long since evaporated.

Craddock had to have known that going into the BTG180 contract. All he was sitting on was an email database.

Craddock is the founder of a corporation known at BTM Check Draft Inc. which he and Sylvia Craddock operate and which provides the BTM service.

Without Jeffers’ consent, Craddock sent promotional material about BTM by email and/or phone to BTG180 affiliates, falsely telling them that BTG180 had approved BTM and was incorporating BTM as one of BTG180’s products.

When informed of this, Jeffers stopped Craddock from sending out more such emails and/or making these phone calls and required him to send retractions to those who had received the original emails and/or phone calls.

During this time, there were other confrontations between Craddock and BTG180 executives as Craddock attempted to induce BTG180 to market other products for him.

Craddock continued to defy (Jeffers’) requests to stop these actions; therefore, BTG180 stopped paying Craddock and Fun Club.

When exactly BTG180 stopped paying Craddock is unclear. But in December, four months after the contract between Craddock and BTG180 was drafted (it remained unsigned), he turned on them.

On or about December 10, 2013, (Craddock) sent out an email to BTG affiliates in which the subject line read “BTG Fraud. Email on Legal” and they addressed the affiliates as “BTG Victims”.

In this email, (Craddock) stated, among other things, that Jeffers had failed to act “in an honest and ethical manner” in operating BTG180.

(Craddock) asked for monthly donations of twenty-five ($25.00) dollars a month from BTG180 affiliates so that (Craddock) could seek to get money returned which they had paid to BTG180 to become affiliates.

Exactly how many thousands of dollars Craddock fleeced from Zeek Rewards investors is unclear. But he was obviously looking to replicate his efforts now that his relationship with BTG180 had soured.

On or about December 14, 2013, (Craddock) sent out a second email to BTG180 affiliates in which (he) falsely stated, among other things, that BTG had been classified as a Ponzi scheme, that BTG180 would be investigated over the next 30 to 60 days, and that reports have been filed with the North Carolina Attorney General.

As these events played out, we covered both Craddock’s initial email, BTG180’s response to it and Craddock’s second email live.

Evidently Craddocks relationship with BTG180 investors (most of which were likely to be ex-Zeek Rewards investors) wasn’t much better than that of his with Zeek’s.

Barely twenty-four hours after it was announced, Craddock then abandoned the campaign.He cited a “lack of participation” as the primary reason.

In this email, (Craddock) also “issued” a cease and desist edict, ordering BTG180 affiliates not to sign up any new affiliates because, if they did, they would be legally liable for inducing others to participate in a Ponzi scheme.

The email also stated for all currently active affiliates to immediately close their accounts with BTG180 or they would face “clawbacks” and “chargeback fees.”

The email further asked affiliates to register to complete the legal process (read: add more named to Craddock’s database).

The email also encouraged affiliates to contact an ABC news reporter with the subject of the email being “They Took My Money and Used Kids to Lure me In..” and requesting affiliates to reference Randy Jeffers and BTG180.com, the website and how false promises were made over and over.

Eleven claims for relief against Craddock were filed by BTG180, including

  • Cybersquatting – BTG180 argue Craddock’s registering of the domain “btglegal.com” is cybersquatting (BTG180 demand $1000 to $100,000 in damages)
  • Trademark Infringement – the registering of the “btglegal.com” domain was trademark infringement of BTG180’s own trademarked name
  • Wrongful Use Of Computer – Craddock’s use of BTG180’s computers to “access and download and/or retain contact information of BTG180’s affiliates”
  • Misappropriation Of A Trade Secret – BTG180 claim the affiliate list Craddock allegedly obtained is a trade secret “protected under the Nevada Uniform Trade Secrets Act”
  • Wrongful Interference With Economic Relations – BTG claim Craddock “intentionally interfered” with BTG180’s “economic relationships” with their affiliates (specifically inducing them to “terminate their relationship with BTG180”)
  • Breach Of Contract – despite the contract never being signed, BTG180 allege Craddock breached his contract with them
  • Unjust Enrichment – BTG180 claim Craddock has been “unjustly enriched” because he accepted the $50,000 BTG180 paid him and failed to deliver what was specified in the contract
  • Defamation – BTG180 claim all of Craddocks statements in relation to regulatory matters regarding BTG180 and owner Randy Jeffers are false
  • “Piercing The Corporate Veil – Alter Ego” – Citing Craddock’s soliciting of donations after Zeek was shutdown, BTG180 claim Craddock kept the money raised both in that instance and when they again tried to solicit donations from BG180 affiliates

Fun Club has no employees, Craddock and Sylvia Craddock are the only persons who ever undertake to act in the name of or on behalf of Fun Club, and Craddock exercises complete control over the activities and operations of Fun Club.

Craddock and Sylvia Craddock never capitalized Fun Club and … they have failed to adequately keep funds received by Fun Club separate from their own money and have treated all such funds as their personal money.

Furthermore … Craddock and Sylvia Craddock have not maintained corporate records, complied with corporate governance or kept adequate books and records for Fun Club.

In all particulars, Fun Club has existed as a non-capitalized shell corporation with no identity independent of Craddock, which he has used solely as a shield for himself and his wife to shake-down affiliates of multilevel marketing networks such as Zeek Rewards, OfferHubb and BTG180 to get donations from such affiliates, promising to use the money to take legal action on their behalf againt the multi-level marketing companies.

However, Craddock and Sylvia Craddock have never used Fun Club for any legitimate business purpose and have pocketed for themselves the money raised using Fun Club to solicit donations.

The complaint is signed February 5th 2014, however we have only recently become aware of it.

An amended complaint was filed on the 7th of July, adding a “Theodore F. Zentner” to the list of defendants.

BTG180 identify Zentner as a “business associate” of Craddock’s.

Of note in Craddock’s replies to both complaints (in which he mostly denied BTG180’s claims), is the mention of

a “binding contract entered into by the parties on November 29, 2012, outlining that “[a]ny disputes hereunder shall be subject to binding arbitration under the rules of the American Arbitration Association”.

There is no mention of this contract in BTG180’s complaint, nor does Craddock provide a copy of it in his response.

If any such contract exists, it reveals that BTG180 and Craddock’s business relationship dates back far closer to the shutdown of Zeek Rewards than BTG180’s complaint alleges.

Shortly after BTG180’s amended complaint was filed, Craddock’s attorney withdrew from the case. Craddock and his wife are currently without representation.

At the time of publication, Craddock had been given a deadline of October 3rd to either have an attorney file a notice on their behalf or indicate that they would continue on representing themselves.

There is no mention on the case docket of any such reply being filed.

Theodore Zentner had requested an extension of time to reply to BTG180’s amended complaint. This was granted and a deadline set for October 3rd.

Again, there is no indication on the docket of whether or not Zentner filed a reply in time.

Moving on, the mention of OfferHubb in BTG180’s complaint brings us to the second half of this article.

Leveraging his efforts to whore out his list of Zeek Rewards investors to the highest bidder, Craddock approached OfferHubb.

OfferHubb was a Zeek Rewards reload scheme that, evidently with the help of Robert Craddock, also sought to prey on Zeek Rewards’ victims.

On or about November 29, 2012, OfferHubb entered into a contract with Defendants Craddock and Fun Club in which Craddock and FUn Club agreed to perform marketing services for OfferHubb.

In reliance on the covenants made by Craddock and Fun Club in said contract, OfferHubb paid Craddock and Fun Club and Craddock and Fun Club received and accepted payment from OfferHubb of the sum of $50,000.

Later, OfferHubb paid Craddock and Fun Club additional compensation in the amount of $70,000.

OfferHubb engaged Craddock and Fun Club to market the OfferHubb network marketing opportunity to former affiliates of the Zeek Rewards multi-level marketing network … for which Craddock and Fun Club had contact information.

However Craddock and Fun Club failed to conduct their marketing efforts in an ethical and honest manner.

Among other things, Craddock and Fun Club

(a) misrepresented the nature of OfferHubb’s business, making guarantees to prospective affiliates about potential earnings in the business;

(b) to benefit themselves, Craddock and Fun Club induced new affiliates to breach OfferHubb’s terms and conditions for affiliates, including by making side deals and taking kickbacks from affiliate; and

(c) Craddock and Fun Club sought to cross-sell other multi-level marketing opportunities to OfferHubb’s affiliates other than OfferHubb.

The contract between OfferHubb and Craddock “expired on May 31, 2013”, after which OfferHubb made a “decision not to renew (the) contract.”

Immediately upon receipt of notification from OfferHubb of its decision not to renew a contract with Craddock and Fun Club, (Craddock) began a campaign to disparage (OfferHub).

The primary method used by (Craddock) to impugn and revile (OfferHubb) was to contact OfferHubb’s affiliates by telephone or email.

In doing this, (Craddock) used contact information for said affiliates which (he) had obtained from OfferHubb and which is considered and treated by OfferHubb as confidential information.

(Craddock) falsely claimed that a primary owner of OfferHubb was a convicted felon; (Craddock) falsely stated that OfferHubb was based on an unsustainable business model and would never launch with all planned services and compensation for affiliates; and (Craddock) falsely asserted that OfferHubb was going out of business and affiliates would lose their money paid to OfferHubb or not get paid compensation owed to them by OfferHubb.

Prior to executing the contract with OfferHubb and continuing through the present, (Craddock has) operated a website called “internetclowns.com”.

Shortly after July 11, 2013, (Craddock) set up and began operating a website called “offerhubbtookmymoney.com”.

On these websites, (Craddock) impugned and disparaged (Offerhubb), making many false statements about them.

As a result of (Craddock’s) disparagement of Offerhubb to Offerhubb’s affiliates, many such affiliates cancelled their participation in OfferHubb, demanding refunds from OfferHubb.

The total amount of refunds paid by OfferHubb to affiliates who cancelled exceeded $100,000.

What follows are a series of claims for relief that are near identical to that in the BTG180 case. Hardly surprising considering both companies have used the same attorney to file their respective cases.

OfferHubb’s complaint was also filed on February 5th, the same day BTG180’s was.

An equally predatory November 2012 contract between OfferHubb and Craddock is attached to their complaint:

(Robert Craddock) agrees to perform the following services.

1.1 Assist in the development of a Multi-Level compensation plan design to have rapid adoption and maximum early revenue.

1.2 Contact (Craddock’s) email list of affiliates from Zeek Rewards … for which (Craddock) has contact information directly or indirectly through (Craddock’s contacts and notify the affiliates of (OfferHubb’s) program.

1.7 Assist with the removal of negative content published on the web to disredit, defame and confuse potential customers, vendors and business associates about the business practices of OfferHubb Inc. and provide (OfferHubb) with the use of Internet Clowns website services to combat any negative activity online against (OfferHubb).

Nowhere on Craddock’s Internet Clowns website is it disclosed that the website was set up as a personal service to Ponzi schemes to combat online criticism of their business models.

(OfferHub) shall pay to (Craddock) a onetime fee of $50,000, for the first 6-monthconsultant period.

Company agrees that if consultant is retained for a second 6 month period, consultant will be paid $100,000 for each 6-month period.

(Craddock) will hold multiple weekly meetings designed to encourage and foster a sense of urgency to not miss the best offer ever.

(Craddock) will be paid a fee equal to 5% of funds raised during this time and will not extend past 6-months from official launch.

(Craddock) will promote the urgency because Founding Members for OfferHubb Inc. will enjoy special income advantages by coming in now and making history.

The estimated members to capture will be around 10,000 to 20,000 with a $2,500 purchase of goods and services providing Offer Hub (sic) $25,000,000 to $50,000,000 in working capital.

(OfferHubb) will provide accounting of weekly progress and pay weekly the 5% to (Craddock).

In addition to finder fees, (Craddock) will be paid a one time fee of $50,000 once (OfferHubb) has received $250,000 in funds.

As with the BTG180 case, OfferHubb’s suit against Craddock is ongoing. The latest entry in the case docket suggests sanctions against Fun Club and Craddock are pending:

09/24/2014 ORDER TO SHOW CAUSE. Defendant Fun Club USA, Inc. shall show cause, in writing, no later than October 6, 2014, why sanctions should not be imposed for the failure to complay with this Court’s prior order.

At the time of publication, no such filing by Fun Club USA appears on the docket.

In any event, bloody hell. Could you spell out the mechanical harvesting of victims of an $850 million dollar Ponzi scheme any clearer?

The sense of “urgency” raised in both OfferHubb and BTG180’s contracts is explained by the nature of their business models.

Ponzi schemes require an initial injection of funds to pay out early investors. These investors take to the internet and boast of their winnings, thus luring new investors in.

As with most reload schemes, with or without Craddock’s “help”, neither OfferHubb or BTG180 ever truly took off. Neither captured the “success” of Zeek Rewards they so desperately sought to emulate.

Whether or not this will translate into regulatory action in the future against one or both companies remains to be seen.

eAdGear (aka GoFunPlaces and GoFunRewards), another Zeek Rewards reload Ponzi, filed a lawsuit against JubiRev (yet another Zeek Rewards Ponzi still) back in early 2013.

The SEC formally shut them down last month. In their filing, the SEC revealed eAdGear to be a $129 million Ponzi scheme.

Spread out over the two filings, OfferHubb, BTG180, Craddock and Fun Club’s participation in investment fraud following Zeek Rewards is offered up on a platter.

I’m at a complete loss at the brazenness of Zeek Rewards reload Ponzis filing cases such as OfferHub’s and BTG180’s in court. That these schemes intentionally headhunted Zeek Rewards ex-investors betrays and notion that the schemes were different to Zeek.

Let alone both company’s business models with both rely on a constant influx of newly invested funds to pay out existing investors.

And as for Robert Craddock? You sir are an absolute disgrace to the MLM industry.

You knew, just as you did with Zeek Rewards, that these are nothing more than Ponzi games. Yet only when BTG180 and OfferHubb stopped paying you did you drop the facade.

The sooner you find yourself behind bars for the calculated preying on Ponzi victims the better.

 

Footnote: Our thanks to Don @ ASDUpdates for providing us a copy of both BTG180 and OfferHubb’s complaints and subsequent filings.

 

Update 17th October 2014 – An update in the OfferHubb case, Magistrate’s Judge George Foley has recommended

the Answer of Defendant Fun Club USA, Inc. should be stricken and its default entered based on Defendant’s failure to comply with this Court’s Order to obtain counsel.

A copy of his findings and recommendation has been mailed to Craddock.

I’d assume if no reply is forthcoming, the court will then act on the recommendation and enter a default judgement against Craddock.

 

Update 10th December 2014 – Defendant Theodore Zentner had filed a Motion to Dismiss which was heard on the 8th of December. Judge Mahan dismissed the motion.