DOJ seek to exclude Nehra’s Zeek settlement from Merrill trial
A year ago the Zeek Rewards Receiver sued disgraced Ponzi lawyer Gerry Nehra for $100 million.
Two months later Nehra settled with the Receiver for $100,000 and acknowledged Zeek Rewards was a Ponzi scheme.
In their case against TelexFree co-owner James Merrill, the DOJ have called Nehra up as a government witness.
In a motion filed late last week, the DOJ claim Nehra’s Zeek settlement is “not relevant to Nehra’s credibility”.
The regulator is requesting an order preventing Merrill from bringing up Nehra’s settlement at trial.
The DOJ argues that Nehra’s Zeek settlement ‘entirely unrelated to TelexFree and the charged defendants in‘ the case against Merrill.
The settlement does not constitute proper impeachment, and if admitted, would amount to confusing and timely side-show.
Among other reasons, the DOJ claim
while Nehra’s firm represented Zeek, it was Nerha’s partner Waak who primarily represented Zeek, not Nehra. Waak was called as witness, not Nehra.
For this Nehra’s connection to Zeek was more tangential and, for that reason, is less relevant.
If the DOJ’s motion is granted Merrill will still be able to reference Nehra’s involvement in Zeek Rewards, just not the settlement.
To what extent Nehra is vital to the DOJ’s case against Merrill I can’t say, but personally I think he’s a terrible choice for a witness.
Nehra went in to bat for the AdSurfDaily Ponzi scheme. And while you’d think one major Ponzi bust would have been enough to bring Nehra to his senses, you’d be wrong.
Nehra went on to represent Zeek Rewards and TelexFree, two of the biggest MLM Ponzi busts in history.
In my opinion it’d be hard to take any testimony the disgraced Ponzi lawyer presented in court, without consideration of a self-serving motive.
In the clawback lawsuit filed against Nehra by the TelexFree Receiver, Nehra has demanded a jury trial.
Purely from the perspective of discrediting Nehra, I think Merrill should be entitled to call his legal reputation into question.
Nehra’s settlement with the Zeek Receiver is very much a part of that, as it demonstrates continued negligence when it comes to identifying illegal Ponzi schemes.
The question is how would Merrill discredit Nehra without admitting TelexFree is a Ponzi scheme?
The only way I can see it being done is to attempt to shift blame for TelexFree onto Nehra. Acknowledge TelexFree is a Ponzi scheme but claim it’s not your fault because your lawyer gave you terrible legal advice.
Although not explicitly mentioned in their motion, I believe this is actually what the DOJ are actually seeking to quash.
Whether the Judge grants the motion remains to be seen.
Footnote: Our thanks to Don@ASDUpdates for providing a copy of the DOJ’s “Motion in Limine to Exclude Evidence of a Civil Settlement Agreement” (filed October 13th).
if merrill can reference nehra’s involvement in zeek, then i dont understand why the DOJ wants to keep the settlement out?
in it’s telexfree brief, the DOJ has painted nehra in a positive light by referencing several emails sent by nehra to merrill asking for customer numbers, recommending sales to [retail] customers, asking not to allow high investments into telexfree etc.
in light of this^^, it makes sense that the DOJ would like to call nehra as a state witness to establish that merill Intentionally continued to run telexfree in it’s then avatar inspite of legal advice to the contrary. establishing ‘intent’ is a major part of proving fraud.
in zeek the receiver hit nehra with a 100 million clawback suit, but settled for merely 100,000 [0.1% of the demanded sum].
further, nehra’s ‘admission’ [in the settlement] that zeek was a ponzi scheme was not an admission that he had known that it was a ponzi scheme all along but rather, that based on information now available to him, he admitted it was a ponzi scheme.
the very favorable settlement nehra made in zeek in fact shows that the receiver did not have enough material to prove that nehra was liable for zeeks ponzi scheme to the tune of 100 million.
if the zeek settlement is left out in the telexfree trial, nehra will look all the more disreputable for having legally advised zeek, because burks was found guilty on all counts in the zeek scheme. this will harm the DOJ’s case IMO.