“Don’t blame me” – Burks breaks silence on Zeek
Harmless old small-town magician or devious mastermind behind the $600M Ponzi scheme that has devastated the MLM industry’s reputation?
Despite a the secret recording of a detailed discussion with initial investors laying out in detail the history of the Zeek Rewards’ Ponzi scheme, the debate surrounding the extent of Burks personal involvement and awareness he was running a Ponzi scheme has almost been as hotly debated as the opportunity being a Ponzi scheme itself.
Breaking his silence to the Associated Press for the first time since the SEC fined him and shut down Zeek Rewards, Burks had little to say to those that invested in Zeek.
Remorse and an apology?
Oh hell no. Fuck all y’all and the horses you rode in on!
Asked if he had anything to say to victims, he shook his head.
“I never told anyone to invest more money than they could afford,” Burks snapped. “I didn’t tell them to do that. Never.”
He said if they lost money, “it’s their fault. Not mine. Don’t blame me.”
If there was any remaining doubt that Paul Burks (photo right) was ignorant of his own conceived business model, surely the above statement is the last nail in the coffin for any such arguments professing so.
Burks evidently knew exactly what he was doing and having fleeced millions from those that invested with him asserts that they only have themselves to blame.
If only Burks had been so candid in the many events and communications he engaged in with Zeek Rewards’ affiliates before the SEC moved in.
Meanwhile the other ringleaders of Zeek Rewards remain MIA.
- ex-COO Dawn Wright-Olivares and husband Alex DeBrantes (who was also involved in Zeek Rewards) are now focusing their efforts on selling e-cigarettes under the brand “Savage Smokes”.
- “Acting” COO Greg Caldwell, who infamously proclaimed ‘all our critics (are) self-appointed with no standing in the professional community (and are) behaving unprofessionally by acting on false information‘ just weeks before the SEC moved in is MIA
- Robert Craddock, self-described sidekick of Caldwell who managed to convince a bunch of investors to kick thousands of dollars in towards his own personal legal fund and that of 12 top Zeek Rewards earners (the “Craddock 12”), hasn’t been seen or heard from now in months
- Sales Director Darryle Douglas disappeared just weeks before the SEC shut Zeek Rewards down, he hasn’t been publicly seen or heard from since
Unfortunately for the MLM industry, the fallout of the Zeek Rewards Ponzi scheme isn’t contained within management circles of the company itself.
Well known MLM industry figure Keith Laggos boasted he was making “$40,000 a month” in Zeek Rewards just weeks before the SEC moved in. He hasn’t been publicly seen or heard from since.
At the Association of Network Marketing Professional’s (ANMP) annual 2012 convention held in March, they claimed Zeek Rewards’ business model was ‘ the model of legal compliance‘.
This was most likely due to the heavy involvement in Zeek Rewards by then Executive Vice-President, Peter Mingils. Whether Mingils is still involved with the ANMP is not clear.
Ted Nyuten’s popular MLM blog, “BusinessForHome”, ran a poll in 2012 that saw Zeek’s ex-COO Dawn Wright-Olivares crowned the “Direct Sales Leader in the World” for that year.
I’m sure many regular BehindMLM will agree that in its heyday, Zeek Rewards created an environment within the industry that verged on the surrealy unbelievable. Not because of Zeek’s business model but rather simply due to the sheer amount of people Paul Burks, his management team and figures many looked to as “leaders” within the MLM industry were able to suck into the scheme.
Somewhat indicative of the need of a review into how Ponzi schemes are investigated by US authorities at a local level, along with Burks response yesterday it was also revealed that the
In a Nov. 23, 2011, complaint filed with the North Carolina Attorney General’s office, Wayne Tidderington of Florida called ZeekRewards an “illegal” Ponzi scheme. He said a relative had invested $8,000 and the company guaranteed a return of 125 percent every 90 days.
The attorney general’s office can ask a judge to shut down a business because of deceptive trade practices. But it forwarded Tidderington’s complaint to the secretary of state’s office because it looked like it might involve securities.
The secretary of state’s office, however, declined to take action because it didn’t believe it had the jurisdiction, spokeswoman Liz Proctor said.
The complaint died.
“I put it all together,” Tidderington told the AP. “I gave them the roadmap. I said, ‘Here’s a snake. Here’s the gun. Here’s the bullets. Shoot the snake.’ But they ignored me.”
Jurisdictional issues or not, even the lightest of due diligence should have revealed to any law enforcement agency the true nature of the Zeek Rewards beast.
It wasn’t until July 2012, seven months after Tidderington’s complaint, that the NC AG ordered Burks ‘turn over all Zeek-related documents‘ by the end of the month.
An order Burks failed to comply with.
Amidst a vast sea of marketing bullshit, claims by ex-affiliates vowing the legitimacy of Zeek Rewards and participating in myself and moderating eleven months of furious debate here on BehindMLM, it’s refreshing to see Burks come clean and tell the world what he really thinks.
Looking at the bigger picture, those who continue to participate in and promote “revenue sharing” MLM opportunities would do well to perhaps pause and take stock.
Too many MLM companies today are running compensation plans identical or near identical to that of Zeek Rewards and what’s worse, far too many in the MLM industry keep falling for them.
Good article especially for those that didn’t live through the eleven month drama. The only thing I’d add to this is Troy Dooly’s involvement and how MLM Help Desk endorsed Zeek in every way possible without actually being an affiliate, sans a few caveats Troy would throw out here and there.
Almost every major affiliate who had a prospect that was in doubt used Troy’s videos and participation as Zeek consultant to convince the prospect Zeek was legitimate and low risk.
Troy was much less directly involved than Peter or Keith, but he went to the ends of the earth to endorse them both.
Troy also replied on his blog several times to questions from critics (who pointed out some glaring impossibilities using math, such as auction revenue vs. point balances), to which Troy several times stated unequivocally: “in my professional opinion, Zeek Rewards is not a ponzi.”
To his credit, he is the only one of the well known MLM industry Zeek protagonists still around publicly and has reversed his opinion on Zeek.
What about criminal charges? Will there be any?
That’d be up to the secret service (who handles financial crimes) and the state attorney generals.
What advice does the tax expert (not a CPA) Howard Kaplan have now ?. He gave mealy mouth advise on a zeek webcast about taking deductions for a home office, yet he fail to see Zeek was a ponzi.
The fact that Burks said that he didn’t tell anyone to invest, meaning Burks knew from the beginning this is an investment, using second guy money to pay for the first guy, and his argument of sharing profits based on advertising works done is just a disguise.
I wonder how Troy would interpret and feel about Burks’ first ever public statement, a guy with a good heart of Troy and many others, including my relatives.
The beautiful thing about Ponzi plus Pyramid scheme is that they are building an empire of scammers (and of course victims, but they never accept the fact anyway.) So, they all try to protect each other because if they admit that the first guy scam them, then they are too scammers since they have people under them as well.
I have strong doubts any criminal charges will be filed. Sad, but I think these people will get away with theft.
I wouldn’t go that far.
PPBlog said it best… “I didn’t tell anyone to invest more money than they can afford” was the SAME excuse Dennis Bolze tried in a different state, when he tried to have his sentence reduced for cheating seniors in a Ponzi scheme. He claimed that his victims “knew what they were doing”, i.e. “I didn’t defraud them”
http://www.patrickpretty.com/2013/03/30/ap-via-yahoo-news-zeeks-paul-burks-says-participants-at-fault-for-losing-money-in-alleged-600-million-ponzi-scheme/
It’s the same thing as the “slut defense” in rape trials… the victims DESERVED / WANTED to be raped/defrauded.
Where is the video? All I see is MLM writing about Zeek again. Where is Paul on a new video saying this?
Paul didn’t defraud anybody. He just set up the business and investment scheme in which people were defrauded.
I really hope they start filing criminal charges soon. The fact that this guy is still walking around free is an affront to justice. Especially since he apparently has no guilt or shame for people losing money in his illegal ponzi scheme.
His “general advise” was probably useful for some people. “Run your business as a business, keep track of income, expenses and work, organise your documentation in a folder, understand how your business works so you can explain it to an advisor”.
His specialised tax advise about how to post the 1099 wasn’t very useful. He tried to solve RVG’s tax problems there rather than the taxpayers’, so the method he recommended was rather “constructed”.
I would have preferred to make the 1099 for 2011 become CORRECT (filing a 1040x or something?). I’m not a tax expert.
We had a tax discussion in another thread in February, but it became slightly “theoretical”. People are normally not very interested in taxes in February.
@Mary
Why does it have to be on video? Are you in the habit of not believing anything unless you see it on video?
The comments were made by Burks to AP.
Would you believe Yahoo and Associated Press, Mary ???
Here’s the story on Yahoo News:
http://news.yahoo.com/authorities-600m-scheme-incubated-nc-town-135809168.html
You’ll find Paul Burks’ comments about half way down right next to the Twitter logo
Some Zeek affiliates should get together and sign a petition to have Paul Burks prosecuted criminally, as opposed to the silly petitions that were circulating to have Zeek re-instated.
Uh, Paul Burks is on the run?
Apparently his house is for sale and “he and his wife moved out about a month ago”:
Unconfirmed: The Zeek Rewards story might appear on CNN’s Anderson Cooper 360 tonight (US).
The following text appeared briefly on The Dispatch website around 8 hours ago:
However the article has since been removed from publication (no cache either). Not sure what’s going on there.
Will be interesting to see what happens with the Receiver and net winners that aren’t the top 100 or whomever that have been targeted so far in clawback negotiations.
While the Receiver published a letter on his website, none of the affiliates I have worked with have received an email or letter about anything Zeek related. So the Receiver is giving a 60 day ultimatum (or grace period depending on your view) to voluntarily initiate settlement discussions, yet I bet the vast majority of Zeek affiliates who were net winners but not large winners (say $10k USD or less), have not been contacted by the Receiver.
When the lawsuits hit I expect to see a wave of outrage from those that just went on with their lives after Zeek shut down and isn’t following Zeek news on the 2 or 3 websites that are reporting on it.
I suspect the receiver is going to be hearing lots of “but but but I already re-invested the money in JubiRev/Bidify/GoFunRewards/(insert similar Ponzi points scheme here)”.
Should be interesting to watch unfold indeed.
Any affiliate that is actually unaware of the Receiver’s Website must be a true rarity.
I might remember it incorrectly, but the total number of net winners was around 80,000 USERNAMES (some affiliates had multiple usernames).
The number of identifiable PEOPLE in the U.S. who received a 1099 for 2012 was around 25,000, some of them were not net winners.
Clawback letters were sent to 1,200 affiliates in the U.S., and the Receiver has also identified net winners in other countries.
Net losers USERNAMES per 12-31-2012 was around 800,000.
Bold numbers are from memory, the two other numbers are from the Quarterly Report Q4-2012.
They will first receive an email about it, or mail. If they don’t receive anything then he won’t file any claims against them either.
He can’t just post a general message on his website and ask people to voluntarily pay back money. He has to TELL each and everyone directly that he has claims against them, and what the claims are about. And they have the right to make corrections or objections to his claims, and THEN they can start to negotiate about it.
E-mail can be used if the court is willing to accept that method, but the normal method is to send claims by mail. The court should normally not accept e-mail as a method, but the rules might have changed in the last few years.
Zeek was first and foremost a HYIP ponzi, and only one of several (hundred ??) thousand similar HYIP ponzis on the ‘net today, with the only material difference being its’ size and reach.
HYIP ponzi players don’t use real names, real bank accounts or legitimate payment processors, neither do HYIP ponzi frauds require such information.
In fact, they actively DISCOURAGE any sort of traceable transactions, just as they deliberately keep a minimum amount of traceable “accounts”
These guys are criminals, not simply a few good ol’ boys whose business grew faster than they anticipated.
I doubt this is correct. Given spam filters and the inattention to detail of the general population the delivery/open read rate of bulk e-mails is very poor (even with white listings) and even if EVERY e-mail address was correct (which they will not be), based on my experience less than 60% of the e-mails would be received and/or read.
That provides no universal notice to the affiliates (as the website presumably can) and if its not universal then what is the point? Some have an opportunity to deal and others don’t depending on their spam filter setting??
Postal Mail is way too expensive and does not constitute service either so its hard to see what net benefit there is the estate by doing this.
Has Bell mailed anything thus far? Jimmy say not. I personally do not know but I have not heard of it. Bell indicated the website was his method of communication.
If affiliates have chosen to disregard Bell’s website, not read the newspapers, or blogs, or discuss among themselves that they are subject to clawback (and what to do about it,) then they will find out when they are served with a summons.
Bell does not need to accommodate every Tom Dick and Harry who can’t keep up, or willfully remains ignorant of his offer of a compromise.
His actions have been reasonable under the circumstances and that is all that is required. He does not need to bend over backwards
I covered that.
The court will probably allow e-mail notifications to net losers, but claims against net winners should normally be sent by physical mail.
If he’s able to find them and drag them to a court, then he has no excuses for not sending them a mail, has he?
A court can’t normally be the first step. He has to do SOMETHING to solve the case outside court first, something MORE than publishing info on a website. He has to INFORM the other party about the claim in a correct way.
The website doesn’t contain anything about the individual claims against the net winners, e.g. a “My account” solution where people can log in and check his individual claims against them. He COULD have offered a solution like that on a voluntarily basis, but the correct way is to inform people by mail (or use a method ordered by the court).
He has to do something to solve it, and the “something” has to be something correct.
The Court is well aware of the scope of this thing and will give Bell the necessary latitude to deal with it. It will not require e-mailing and letter writing to 800,000 individuals before Bell move forward. There is more than one way to afford the net winners their due process rights.
At some point Bell will file an Omnibus motion with exhibits that will include all the net winner names and the amounts claimed against each person. This Motion will be mailed to the individual net winners along with an accounting of what they owe.
The recipient will have the right to contest the validity of the claim and if they do not they will have a judgment entered against them. This is what due process requires. It does not require personal correspondence by the Receiver ahead of time.
FYI, Rod “MLMWatchdog” Cook claimed that ANMP was NOT as favorable to Zeek as the article seem to indicate. According to Rod Cook, Keith Laggos tried to promote Zeek there (did he say he was an affiliate at the time?) then president of ANMP tried to shout him down and ban him from speaking. Other members booed them both, and the president resigned soon after.
http://www.mlmwatchdog.com/BEST_MLM_CONSULTANT_ZEEK_REWARDS_AP.html
I will ask him to clarify that comment, but the gist of it still seem to be that ANMP didn’t do jack about Zeek, and failed to “discipline” Laggos and the other people involved in any way.
I think if the President of ANMP shouted down a Zeek Rewards presentation and then felt compelled to resign after not being re-elected, that speaks volumes about the support the ANMP was giving Zeek Rewards.
I don’t recall Peter Minglis resigning and he was neck deep in Zeek Rewards.
Zeek Rewards seemed to have been bumped on AC360 due to the developments in North Korea. It didn’t feature on the 8pm broadcast.
There’s another AC360 at 11pm which I presume is a repeat of the 8pm slot (?). No indication on the AC360 blog yet if the Zeek story will air tommorow (or at another date).
Update: The 11pm was a repeat so it appears Zeek Rewards did get bumped for North Korea coverage. The AC360 site is displaying a non-Zeek related story for Thursday so not sure if their Zeek story will be aired at a later date.
And he’s now hosting a radio show with… Dawn “Burger Analogy” Wright-Olivares.
I don’t agree with this. I know several who joined including senior citizens others who simply “invested” and cashed checks.
While many in the top 1200 may be regular ponzi/HYIP promoters, many of the 25000 who received 1099’s who were ordinary folk. Is it not unreasonable to think that many simply moved on and are not checking the Receiver’s website daily for the one or two announcements out of the last year that may apply to them?
The first thing the Receiver should have done was setup a voluntary opt-in email system. At a minimum, the Receiver should be sending updates to the Zeek email list even if there are fakes/bounces, they are guaranteed to hit every email for all the net winners, as you needed a legitimate email in order to have conduct Zeek business.
From a legal perspective, there’s a big difference in being aware that the site exists, and the legal requirement for offer/notification of a settlement option.
The argument around cost of traditional service of a complaint may be reasonable, however, we are not at the stage of filing a complaint. We are at the stage of the Receiver notifying net winners of the settlement offer.
Even a postcard sent to the 25000 addresses that received 1099’s (which also went out by US mail) would not cost very much. Just think, the cost of ONE net winner’s claw back could easily pay for the mailing costs.
What are the odds that notification by US mail would result in higher settlement revenue than not mailing?
Just sounds silly to me. I get notified by postcard for class action lawsuits where I may own be entitled to a few dollars and they have to send out millions of postcards in some cases.
Now, there is one possible answer here, which is that the Receiver may not intend to go after every net winner but just focus on the top X. At some point you start hitting a point of diminishing returns and higher cost.
For example, filing 10,000 lawsuits vs. 2000 lawsuits is a significant difference, not just “5x more work” as there are bottlenecks inherent within a single Receivership handling all claims and coordination with all the sub-contracted law firms.
If the Receiver does not intend to go after all net-winners, but just some, that could explain the website announcement tactic. Some net-winners who have NOT been notified yet now have to gamble on whether they should voluntarily settle or take the chance that they may be a small enough net-winner that the Receiver ignores them.
There weren’t 800,000 net-winners. The scope of “notification to the net-winners” is much smaller.
Looking at only the US, Zeek sent out 25,000 1099’s by US mail. The scope isn’t that large as far as cost to notify. The costs are quite small relative to the amounts being recovered.
This seems the most reasonable scenario to me… So what do you guys think the odds are of the Receiver going after net-winners in the $500, $1000, or $2000 range?
Bell does not have to file multiple lawsuits. He will file one with thousands of defendants. He will submit some diskettes into the record with the data that will contain the names and amount he thinks is owed by each defendant.
Anyone can hire a lawyer or show up in North Carolina pro se and contest his findings. Small winners will not. The odds that a $500 winner will have a judgment entered against him is about 100%.
In relation to net winners, will that set the stage for a future of bogus names of participants in new schemes?
Certainly after Zeeks drama, any folks thinking about participating in any new schemes would think twice before putting in their real bonifide details.
Sorry perhaps the number was 80,000 vs 800,000. Even the smaller number represents an expenditure of nearly $200,000 in what I contend are superfluous costs if the reason for mailing is to reiterate what is already on the Receiver website.
Bell indicates he will file suit after the 60 days has gone by, he is not going to spend the estate’s money to inform Joe Blow how much he owe’s now only to have to mail and serve the exact same information two month’s from now.
My guess is that he will file a multi defendant lawsuit and mail Notice or a Summons via Certified Mail to each defendant individually in about 90 days.
Don’t the defendants have a right to have the hearing in the state in which he or she lives?
I know exactly what you are saying. The reality is that no one can ever provide enough communications, mailings and explanation to keep every member of a large group in the loop.
There is always a percentage that is unreachable because they are constitutionally incapable of following along, decide they have better things to do, or just stick their heads in the sand.
This type of person does not pay attention until the Summons arrives…which is generally when they wake up, panic, and demand to know why nobody told them what they needed to know earlier, as if it was someone else’s responsibility to wipe their noses.
If you know someone who is senior and out of the loop then refer them to the Receiver’s website. There really is no excuse for them not knowing.
This is pretty simple probability math here:
Are we really to believe that:
X * Y < A + B ??
I don’t believe it. In fact, forget the math, if just ONE net winner was willing to voluntarily settle for $10k that otherwise could not be recovered, wouldn’t that easily cover the cost of mailing?
Looking at it from a different perspective – have you ever received a tough worded letter from a lawyer? I have many times both personally and for my profession and despite me knowing the legal issues in these situations, I still have that ‘oh shxt’ wince when I receive one.
A notice on a website that may or may not be read published almost a year after ZeekRewardsNews.com shut down isn’t likely to cover 100% of the 1099 recipients, whereas US mail would.
I don’t understand the logic if the intent is to 1) recover as much for the Receivership as possible, AND 2) sue every net winner who doesn’t settle.
It’s just common sense… the cost to notify by US mail is tiny relative to the net benefit.
If you analyze the Receivership tactics here and with ADS, it gives a blueprint for Ponzi scammers to avoid claw backs.
The “big boys” already know how, but undoubtedly there are new people to the scene who can preempt future claw backs.
No. The action is in Federal Court and jurisdiction extends to all other Federal Districts that have been noticed of the action.
Bell filed Notice in all 22? Districts about two months ago and even included Guam and Puerto Rico. Every state is covered.
And as we debate this, the Receiver sent all affiliates an email. He must be reading this. 🙂
You assume that this proposed mailing would be effective because it might reach those who are completely oblivious to the website offer AND who after receiving the letter will also settle for a substantial percentage of the Receiver’s claim.
If this is true then the Receiver will send letters. If in his opinion it will not have the effect you suggest, he won’t. So far he hasn’t.
He is going to get judgments against these people anyway so a negotiated settlement has more value and impact on the net winner than on the estate. Bell will sell the judgments for cash and the affiliate will still owe the whole bill Plus interest to a debt collector, and they may end up with a judgment on their credit report.
That’s just the way it is. Nobody has time to chase down 80,000 people. They are going to get herded through the legal chute and if they are oblivious to their own self interest and too busy to read the Receiver’s website they will pay a price for it.
That’s fair minded. I think its a good thing but only he knows how effective the delivery was. It shows good faith but was it legally required?
So if that’s the case, a chapter 7 bankruptcy would solve the problem, am I correct?
Yes, a judgement as a result of Receivership action is eligible for discharge/reorganization via bankruptcy.
Of course, you have to prove your BK case if that is what one wants to do. It is possible that a large net-winner seeing impending doom lives high on the hog and then declares BK post-judgement.
There is also a chance the judgement holder will seek to show that you wishfully spent all your money knowing you were subject to clawback, and therefore, that amount should not be discharged in the BK.
The best strategy if you are going to declare BK is to wait for the judgement to be assigned to a creditor. Usually at that point the creditor puts forth little if any effort in fighting the BK as they either buy the paper for pennies on the dollar or have a contractual arrangement that pays them pennies on the dollar at no risk.
If this is a more substantial dollar amount, say over $25k which would move it out of most “limited civil” cases, a legal firm that is really a glorified debt collector but are lawyers may take it as they can then press for attorney’s fees.
In most states, collection cases under a certain threshold has fixed rates that can be recovered in attorney fees. The legal firm will move the court to force you to produce documents such as bank accounts, payroll statements, etc. and can ask for liens against your property or paycheck. This is usually the point to declare BK if you were considering it to save on court costs/pain on judgement recovery.
I’ve seen $25k deals go through the courts but I’ve also seen $80k judgments just go to run-of-the-mill debt collection. The difference between judgment and any other debt, however, is that with a judgment you can move to court to compel documents and liens, whereas a normal debt being held by a debt collector is pre-judgement.
Now if you were one of the key players or officers and there is fraud involved, that would make the judgement inelligible for discharge. The key is the judgment itself and whether fraud was in the original complaint (lawsuit) that resulted in the judgment.
If no fraud was cited, it will be very difficult for the judgment holder to cite fraud after the fact.
Great insight and tips there Jimmy, thanks! I’m certainly not anywhere near that $25k amount, and haven’t been living high in the hog…
The BK thing for me is something I’ve been trying my best to avoid – I really don’t want to screw the banks, but now hearing from this receiver guy is the straw that broke the camels back. Thanks again.
Maybe, but didn’t they pass laws to make bankruptcy much more difficult a few years back?
Then the company can’t pay them. You need a SSN or EIN in the US to get paid for almost ANYTHING. Sure, they can go to STP and Payza and those eWallet places and get paid there, but then it’s caveat emptor as they ain’t in the US, so if they get ****ed over don’t expect US courts to save them.
The discussion about net winners, mail/email, and so on …
A court can normally not be the first step in civil claims against anyone because of “jurisdiction issues”. The party making economical claims will first have to try to solve it OUTSIDE court in a normal way (standard procedures), and first THEN a court can accept a case.
A court’s jurisdiction is normally limited to “disputes and cases” (or something similar). There can’t be any dispute about claims before he has actually presented his claim to the other party, can it? 🙂
The Receiver already has the judgment he need to send claims, but he has to SEND them. He can’t just “assume” that people KNOW he has claims against them and the size of it. He can’t “assume” it will be disputes about claims either.
The Receiver’s rights to perform clawbacks are limited to “cost effectively” claims. If small net winners haven’t received any claims they probably won’t receive any, either. And it will certainly not go directly to court, or directly to a debt collector lawfirm.
You make valid points that doubtlessly apply in a typical money dispute where a demand for payment foments an actual disagreement over whether the demand is accurate or that money is owed at all.
In the present case the fact that money is owed by “net winners” will be readily established using previous SEC vs Rex rulings which provide ample evidence that there were fraudulent transfers to affiliates. That payments received by affiliates were fraudulent only has to be proven once and it will apply to all net winners.
The second issue that needs to be dealt with is how much each net winner received by fraudulent transfers and therefore owes the estate.
Bell has indicated that he will seek approval of a procedure that permits each net winner to object to and attempt to reconcile the amount that Bell demands from them. My guess is that this will be done through a negative notice because it simplifies the process of dealing with large numbers of people.
It is at this point that affiliates will find out how much Bell demands from them (if they do not already know because they contacted him to work out a settlement) and this is where an actual judicable issue could arise. If a net winner can not reconcile himself to Bell’s numbers he can drive down to North Carolina and appear pro se or hire a lawyer to argue his case in court.
Very few will and that is why this procedure is cost effective and why Bell need not make any demand by mail, e-mail or personal phone call at this time. That he has chosen to advertise or send e-mails that invite settlement talks for the next 60 days is a cost effective way to recover for the estate and serves the net winners well since they may get some discount.
Bottom line the demand for payment will be clearly transmitted to each net winner at the appropriate time and in the appropriate way as approved by the Court.
That’s a pretty extreme solution to dealing with this situation. If you have a hardship call the Reciever’s staff and negotiate a reduction and a payment plan.
I am told in any lawsuit you must be contacted by the party that wishes to take you to court, period. There fishing to save leg work and money.
Can they prove everyone knows about the website ? ( besides the 1200 that actually got the package ) No.
I filed my 1099 cause the IRS is a whole different animal, I was told to sit tight until contacted directly by the reciever, am I wrong ??
Sitting tight is probably the worst thing you can do since you will get no discount that way and may be charged pre and post judgement interest to boot.
You will be brought under the jurisdiction of the court. You can not hide.
The Receiver’s website is to inform and its existence or usage is for convenience and economy of communication. There is absolutely no necessity to prove that even one person read it. Bell is not fishing although he would like to make it as easy and economical as possible for himself and you by settling.
You can count on one thing. If you are a net winner and have not settled he will serve you notice and he will sue you, and you will lose because under the law you received the fraudulent transfer of Rex funds. You can not prove otherwise.
By this time next year you will have a judgment against you for the full amount of what the Receiver calculates you owe, and he may also ask for and receive pre and post judgment interest on top of that. Cha ching. How’s your credit rating? It just got worse.
Its up to you now. The Receiver has made his overture. The next contact you will have that is initiated by him will be in the form of a notice that you have been sued, which will also inform you that a default will be taken against you unless you contest the amount demanded by appearing in a North Carolina Court Room.
The noose is tightening and you have sixty days to pull your head out of it. Hope is not a strategy.
I would probably have used that method, “sit tight until contacted”. If you are in the lower groups of net winners, you probably won’t receive any claims.
I would probably also have accepted to contact the Receiver voluntarily. I have already accepted the idea of “illgotten gains”, so I wouldn’t have felt it as a loss. The experience of negotiating a solution is worth something.
First of all I would have felt relatively relaxed about both those two solutions. I can both accept “illgotten gains” in a situation like this, but I can also accept to return it to a Receiver.
Those who HAVE received a claim are in a different situation. Some of them don’t have much other options than trying to fight the claim, a battle they already have lost in court (partially). But the right type of resistance can probably work for some.
The net winners who already have negotiated have made relatively good deals, in the range 40-80% of the claims. The idea “I want to get FINISHED in my part of the case” has worked OK for some. The Receiver is eager to FINISH his work too, the parts that are relatively easy to solve.
The worst idea here is to fight for something you can’t win, e.g. the idea that you can convince the court about the idea that the money has legally been earned and rightfully belongs to you, or the idea “if I hide the money they won’t find it”. The second idea might work, but I’m pretty sure it will have some negative side effects.
But past cases, including ASD, has shown that net-winners below a certain threshold are often NOT sued. Even if it is a slam dunk case, the dinimishing returns for limited civil cases, the quantity of them, and their relative value to the Receivership as a whole could indeed mean that not everyone gets sued.
So there is a gamble. I don’t believe your statement that every Zeek net-winner in US jurisdiction that can be served will be sued. To take a silly example, if you are a net $100 net winner, you won’t get sued. $1000? $10000?
The calculus for small and medium net-winners is simply this:
What is the probability that the Receiver will sue me?
vs.
If I voluntarily settle now, how much would I have to pay in claw back?
One will assume that if the Receiver sues he will win. He will receive the full amount. He may win some legal fees, though in limited civil cases those fees are not outrageous and capped by most states.
This analysis does not take ino account agony/stress related to dealing with a lawsuit which could be a motivator for some to settle ‘be FINISHED’ per your comment above.
One also would incur some cost to defend the lawsuit, even if going pro per there are filing costs, time off work, lots of time to research, etc. In most cases I think as soon as a net-winner is sued he then settles.
He won’t save much settling a complaint as he would voluntarily, but he would avoid court process and most lawyer fees.
I didn’t focus on MATH in my comment, e.g. the mathematical probability for someone to receive a claim or not.
For some people, the money will mean less than what they FEEL about their own decisions. A voluntarily solution where “illgotten gains” are returned to the Receiver can be a good solution for some. They will probably be “rewarded” by a discount. “Your willingness to settle this is valuable, and you surely deserve a solution partly in your favour”. 🙂
The court has already set some limitations to where and when involuntarily clawbacks can be performed, by clearly identifying the principle of “cost effectiveness” as a major condition.
If you don’t receive any claims then it has indirectly been decided by the court. The court has solved potential moral issues for you. You don’t have to feel “guilty” about keeping “illgotten gains”. 🙂
The court has decided “This is not about morality, but about recovering money for some of the victims (the net losers and other creditors)”. It’s about recovering what reasonably can be expected within reasonable time, without overloading the judicial system with costly and time consuming cases.
The “60 day / May 31st” deadline is probably for claims already sent out, for the ones who haven’t responded to it or have had objections to it, the ones he CAN offer a voluntarily solution. Some people have been TOO involved, so it can’t be solved voluntarily.
Well, you are right. Its not 100% predictable, but aside from preparation, mailing and serving expenses the incremental cost of obtaining a judgment against any one person is nearly cost free to the estate.
The Receiver will be obtaining judgments in blocks of a thousand or even tens of thousands by default, and to get the default he will only have to show the person was noticed and afforded the right to a hearing. It will be very streamlined and quick once it begins.
In fact the lawsuit will be over before most people realize its even begun. They will get a letter, they will see there is nothing they can do except shrug their shoulders and in a month or two they will be defaulted out.
The trade off is between how much it costs a person to to settle out now, at a discount, versus the price they think they will pay post judgment to a commercial debt collector.
The cost of defending against the Receiver’s actions however noble that may sound after a couple of drinks should not even be considered. It would be wasted money. The facts and the law are all on his side.
Well at some threshold even a judgment is worthless if it can not even be sold to a debt collector for a few pennies.
Why would the estate pay $100 to mail and serve only to obtain a judgment that can’t be monetized anyway? They would not. If we are addressing denominations that piddling then its not even worth discussing.
Lets not wring our hands over whether its better to settle with the Receiver or fight to the death over $100
Here is a great read. Thanks for all the input but it looks like a 50/50 mix of opinion. I will speak to a lawyer, then decide what to do.
http://www.scribd.com/doc/86801588/Righting-Others-Wrongs-A-Critical-Analysis-of-Clawback-Suits-in-the-Wake-of-Madoff
They have not received a “claim,” If anything they have received a “demand” based on the Receiver’s claim.
Anyway…resistance was futile, the battle is lost and the handwriting is on the wall. The only true issue remaining is whether the net winners of all denominations will negotiate a discount or have a judgment lodged against them (and what the true price of that is, post judgment.)
The 1200 did not receive legal demands (or claims if you prefer) The Receiver merely suggested WHAT his demands would be if he had to press them and offered to negotiate…an offer which no doubt contained an implied threat since it came with a subpoena that attempted to delve into all all financial dealings, correspondence etc etc. these people had pertaining to Zeek.
It had the desired effect. He definitely got their attention…. but what has been discovered is unknown and whether any of the big hitters have settled is anyone’s guess. Probably some have since they have some culpability they would like to avoid.
So for now, Bell has yet to take action or initiate a clawback suit against anyone. He has asserted no formal “claim.” or “demand” and in this respect the only legal status that is different between one of the 1200 and any other affiliate is that the 1200 have received a subpoena and Tom Dick and Harriet haven’t.
Give it another sixty days and anyone who has not settled will be noticed (sued) and if they do not make an appearance in court and win their argument (fat chance) a judgment will be rendered against them.
If you are going to make the arguments stated in that article you must be prepared for a long drawn out and expensive battle with an uncertain outcome. Make it if you can afford to, or can not afford not to, and then get down to serious negotiation.
If anything this is what the big winners should band together and do but only if there is a consensus between them. This does not apply to small fry, they will be cooked either way.
Good Luck
That’s a wise idea. Please post something about it when you get an answer?
We don’t offer any “expert answers” here, and answers will normally point you in different directions. But often they will fill in some important parts.
He already has that general judgment about clawbacks, in document #4 “Appointment of temporary Receiver”. The order is not about individuals but about Receivership Assets.
But objections to any claims will be individual. A court can normally NOT solve individual cases in blocks.
Clawback letters were sent to around 1,200 net winners. They have been properly informed about the claims, and have been offered an option for voluntarily settlements. Any objections from them will either have to be solved outside court or in a court on individual basis.
Sorkin represents some big winners. His arguments are technical and mostly BS but and if he is even heard by the court he will lose, but at that point he will appeal and buy time for his client. At least that’s the plan.
He suggest he can obtain a stay on appeal concerning any clawback judgments. Maybe he can or maybe he can’t but its the only approach that I have seen that stands a chance of benefitting any net winner since his clients may not have to pay the money back until the appeal is final and that could be years from now.
His approach is to challenge the SECs jurisdiction in the case and if upheld he will argue that the Receivership be dissolved. Low probablility of success on the merits but whatever the judge decides he will be appealed and a stay requested. Are you up for that?
It authorizes him to clawback. He has not instituted any lawsuits to do so. Big difference
Yes it can and its done all the time since you can default the whole world if they do not show up to defend themselves…which is what is going to happen here.
Those were invitations to negotiate coupled with a subpoena. No lawsuits have been commenced. Count on it
That article is 59 pages, if you skip down to page 52 to 59 it sums it up. Could this article be used to defend ones self in court ??
If all a person owes back is a measly 100 bucks, and they don’t think it is necessary to return it because they haven’t been sent anything…I think they should be dogged by debt collectors the rest of their life until they pay it just on the principal alone.
As far as that goes, 1000 bucks. I would think it would be easier to get the smaller amounts back.
Contact the flipping receiver and work out a deal, Zeus f*king %^&* shaking my head.
I skimmed through the last pages very superficially. I wouldn’t have used that strategy in court.
She is analysing something theoretically. The court system has rules to prevent innocent winners from being harmed by clawbacks, e.g. a 4-year rule and other time related rules.
* Winnings more than 4 years old (or 5) can’t be clawed back.
* Claims have to be presented within 12 months (before August 17 2013)
Madoff probably had mostly innocent victims, but ZeekRewards had many signs of being a scam. You will not feel very comfortable trying to defend yourself in court as an innocent victim.
The role as “innocent victim” has a place here, e.g. in negotiating with the Receiver. Most net winners are clearly victims of the same fraud as the net losers. It can be used to get a better deal. But it shouldn’t be used as a defense system for “no deal”.
Her analysis covered a broader aspect of “net winners” than ZeekRewards, e.g. shareholders and others who indirectly could become victims of a clawback. The court will have to solve cases like that when they occur, but it can’t be used a a general defense, “since SOME can be innocent victims, then ALL will be innocent victims”.
That strategy is about to be tested in the court.
* 80 Sordells, Kettner, Kettner.
* 84 Trudy Gilmond, Kellie King.
The numbers refers to the court documents in the ZeekRewards case.
Last I heard, no jurisdiction filed charges based on signed petitions. They file charges when they have evidence of wrongdoing, which may yet happen.
His case is technically an appeal in itself. It’s about dissolving the appointment of a temporary Receiver, and allow ZeekRewards to restart.
His clients have been harmed by the “unlawfully shutdown of ZeekRewards”, where they legally earned an income by WORKING, e.g. driving customers to the auctions and recruiting other marketing people to expand the business. 🙂
For the record – I signed onto Zeek trusting a friend, I needed extra money, I never did this before, I got a 13 page explenation of how it worked, place an ad, share earnings from an auction that seemed to be making a lot of money, why not ?
So it turns out to be a scam, my fault ? I spent the money on bills, food etc., 20,000, I don’t have it, it’s gone. I still have about 18,000 credit card debt, a 200,000 dollar mortgage I have been paying on since 1993, re-financed 4 freakin times, spent all my savings and retirement over the last 8 years, business not doing good, got 5 kids to take care of.
I’m just asking questions, I’m not trying to get out of giving money back, I do not have money to give back, so I will wait and see, if and when I am contacted I will negotiate like any other lawsuit that is brought on a person.
I have not been properly contacted from what I have been told, so I will wait and I don’t think I will have to spend a penny on a lawyer, I will negotiate like any other defendant would. So say what you will, I will go by the book if and when.
You and 1000’s of other people. Who have contacted the receivership, presented their situations such as you have done here on this forum, and worked something out accordingly.
And every penny you can spend on a lawyer, can be a penny put towards your repayment agreement.
At least you spent the money and get to enjoy SOMETHING. Imagine all the people who came after you that didn’t get to spend a dime AND get their dreams shattered.
And just imagine someone less scrupulous than you, who rolled their “winnings” into some OTHER illegal scheme to hide it and claim that they too, “spent it, it’s gone”.
The money was given to you fraudulently. You will have to pay it back, even if it’s just on principles.
@Bouncin Betty
The court have already solved the moral issues here.
You’re at the high end of the low end debtors, but you’re not within the same group as the 1,200 who already have received a claim. You probably were lucky this time.
A creditor or a Receiver should normally present his claims as soon as possible without unnecessary delays. The claim has to be presented within 12 months, but normally it should be presented within the first few months.
The first 1,200 claims were presented October 30 2012, if I remember it correctly. Any next block of claims would probably have followed relatively rapidly, e.g. within 1 or 2 months (and now it’s 5 months later).
August 17 – October 30 = 2.5 months
August 17 – April 5 = 7.5 months
August 17 – May 31 = 9.5 months
If he haven’t managed to organize a second block of claims until now, he probably won’t do it either. And I’m pretty sure he won’t start organizing it in June/July.
I just sent an email to the Receivership inquiring about the matter. It stated as follows:
I’ll wait and see what comes of it.
This time was the only time, I trusted someone I know, there won’t be a next time. Time will tell, I will hold onto this until the time comes………..
But I am a victim of this fraud, and if you get to keep your thousands of dollars, and I can only manage to get back just a portion of mine, because I never withdrew any money then I am the true victim here, and you owe that money back.
Dude, did I ever say that I was not going to try and give back what I could when the time comes. You trying to help or what.
I have a friend who borrowed 10,000 from a relative and lost it beleiving the same story I was told, they knew nothing about MLM or any other programs they where just looking for extra income. You don’t think I feel bad about everyone who lost money?
I did not do this intentionally, I am not a thief, I understand “now” that it was a scam, give me a break.
@Bouncing Betty
Anything you received over your initial investment should be returned so that people who did not get any back will be provided as much help as possible. That is the whole purpose of the receivership.
You are one of approximately 80,000 net winners. The Receiver said he would keep his negotiating team available for another 60 days and shortly thereafter file the clawback suit.
When you finally receive notice (in about 90 days) how successful do you think you will be in negotiating a deal at a time when 80,000 other people are potentially doing the same thing and when there is no staff left to negotiate with? You’ll be on hold for the rest of your life.
The time is approaching when you will not be able to negotiate anymore, so while there is still time you may want to at least call and explore what they will do for you. You do not have to agree to anything.
In about two months Bell will file a Declaration with the Court stating that he held conference calls, provided a website, maintained a negotiating staff, and did all he could do to answer questions and invite settlements and that in his judgment everyone has had an opportunity to settle and that everyone who wanted to settle has settled.
He will then file the Complaint necessary to compel your payment and yes it will include a demand but it will not be a discounted number.
Also, he is under no compulsion to negotiate anything with you at all. Where did you get that idea? He can simply apply for a judgment. Nothing in the law says he has to offer you a discount. He will just attest to the fact that you owe the estate the amount he claims.
If you think the demand is incorrect then you will have to document why and failing resolution show up in court and prove that you are right and he is wrong…except you won’t show up.
You have a compelling story but there won’t be anyone to listen to it when the 60 days are up.
Don’t go for theoretical solutions. “Innocent victim of a fraud” works better if it’s the real thing rather than a theoretical idea. So your own story is better than her ideas.
Uh not really. Nobody receives a claim. They receive a demand. The 1200 were not sued, they recieved a informal letter inviting negotiatiated settlements accompanied by a subpoena.
Since nobody has been sued, at this point it can not be said that anyone is any luckier than anyone else.
I don’t completely agree based on probability math. Contrast these two classes of people:
1. Those in the top 1200 who received a demand letter.
2. Those who have not received a demand letter; only the Receiver’s comments on the website and recently an email blast to all affiliates.
In #1, you have high certainty that you will be sued. You know that the relative value of recovery of your net-winnings to overall recoverable sum is high compared to other net-winners.
In #2, you have less certainty than #1 that you will be sued.
The demand letter is usually the start of the legal process. An email blast is not the same, and the big question is will the Receiver initiate a lawsuit without sending an individual demand letter which is usually when most debtors “gets scared” and capitulate.
The demand letter is also a very effective lawyer intimidation tactic and saves cost of lawsuit and is almost always used, even in large cases like this.
I also do not see how the Receiver can get judgments en masse by listing multiple defendants in a single complaint. If this happened with the ASD case, perhaps some can provide link to the court docs?
This is a key point because if you are sued individually, the entire probability analysis and M. Normway’s comments on “high end/low end debtors” is completely relevant.
The Receiver must make a risk vs. rewards vs. cost vs. time analysis on all lawsuits. I would bet that a $1k net winner will not be sued by the Receiver. $10k or $20k net-winner the probability starts increasing.
The discussion here with Hossy really boils down to: how would the Receiver get a judgement en masse without filing individual complaints? I don’t think it’s possible.
“Presented” rather than “received”? 🙂
The receiver presented his claim in a letter following the subpoena.
Doc81 – Exhibit A (pdf) – Exhibit 2 (the first letter, before the subpoena itself, to David Sorrells)
The first rule in Code of Ethics = “Apply the CORRECT Code of Ethics”. In this case it will be the Court’s Code of Ethics rather than the personal one.
We can’t “project” our personal belief system onto a court. It doesn’t work that way. A court will not solve each and every moral issue.
We can assume that the Court and the Receiver are able to identify the correct ethical standard themselves. It might be in conflict with our own, but it will probably be correct.
I should also add those in the top 1200 also received a subpoena requiring very detailed production of documents about their entire financial history, bank accounts, credit cards, securities, all liquid assets, etc.
It is obvious those in #1 that received the subpoena and demand letter are very likely to be sued if they don’t settle.
I don’t agree that “everyone else” (those in #2) have the same probability of getting sued just based on an email blast and the Receiver’s blog post.
Again, I say that if you are a net-winner of $1000 I don’t see any lawsuit resulting. Just doesn’t make economic sense. Now change that number and you can create a probability spectrum of increasing likelihood as the $ increases.
Some additional info related to clawbacks can be found in the Quarterly Report, Q4 2012, page 10-11.
3. Analyzing the Operations of the Receivership Entity
a. Investigating and Validating the Receivership Defendant’s Electronic and Financial Data
Source:
http://mlmhelpdesk.com/wp-content/Docs/Zeek/ZeekDoc120-main.pdf
He paid a Forensic Investigation company $85,000 to solve the worst problems in analysing transactions.
He HAVE the data he will need to file more claims, but the job will be too time consuming and costly to be worth it.
Bouncin Betty can probably relax.
I am not familiar with how the ASD case was handled. Did they do clawbacks?
Step 1. Court finds that money received by “net winners” is a fraudulent transfer and recoverable by the estate. (applies to all net winners)
Step 2. Under authority granted in #1 Bell files a complaint listing all winners as defendants and the amount he is seeking from each.
Step 3. Bell serves the Complaint (including applicable pages to each net winner showing defendant’s name and the account activity upon which the demand is calculated.
Included is a Notice outlining court approved procedures for correcting and amending the demand amount via binding arbitration or mediation (maybe) or the Notice will contain an acknowledgment that the net winner has the right to contest the Receiver’s findings if the reconciliation process can not resolve the issue.
The Notice will state that the net winner has the right to appear in court to contest the final amount demanded by the Receiver.
Step 4. Hearings will be scheduled to hear disputes over the final amount demanded. Very few will show to contest unless the numbers are wildly disparate.
In this way the Complaint is served and each person receives a demand in the most economical way I can think of. Its very much like the procedures used in bankruptcy proceedings.
I do not think any affiliate has standing to intervene and argue at Step 1, which cleans up the business quite a bit. They can argue all they want at step 2….but they won’t…very much.
You continue to assume the Receiver has to individually prove scienter or liability when by suing 80,000 net winners, which, if it were true, would be a very high cost, high energy endeavor and take a decade, but its not true.
One Complaint with thousands of defendants accomplishes the same thing, but much more economically.
The dollar amounts change for each individual but not the findings of fact and law that underly the Complaint…. the Remedy for which is a money judgment in favor of Estate in the amount of the fraudulent transfers (individually calculated. See?
Not necessarily, although he may not sue certain people because there are no records available prove they were net winners at all.
This assuredly will happen given in some cases due to the state of the records but Bell will still sue where he is certain of his data and can prove the amounts he claims. He is not going to use guesswork. If he does not have the evidence he will let it slide.
Bouncin’ could be lucky but it will not be because its not worth the effort, Bell just won’t have the proof. By the way Betty if you call the Receiver I suggest you first ask them what they demand from you. They may not know or it may be lower than you think. If so, use that to your advantage
If we did not receive a 1099 can we make any assumptions?
I recieved a 1099, I claimed the amount and paid the taxes, they have my info, so far two lawyers told me I must be contacted by the reciever and he must let me know why I may be sued, if that happens the negotiations begin.
They said it’s no different than a slip and fall, you sue, the insurance company negotiates an offer with you if not satisfied it goes to court. Posting a letter on a web sight that someone may or may not have seen is no legal subpeona.
Mr. Bell, can you prove beyond a shadow of a doubt Betty saw your letter on line ? No your honor. PS I am not a woman.
Hoping that there records are similar to the way they managed the company.
You can assume Burks and company are a joke. However, the receiver and his lawfirm, who’s actually managing the company’s estate now, won’t be.
According to new guidance from IRS, you *can* declare clawback “losses” either at the year you paid off the clawback, or file an amended return for the year you were PAID the money, whichever was more advantageous to your finances.
I know some good people who did make money in this, so I am spreading this great news!!! Lots of people are going to be sleeping better tonight!!
Thank you SO much, M_Norway!!!
Read between the lines in his Quarterly Report? He’s not analysing the records from a well managed and well organized company, but from a Ponzi scheme set up to confuse people.
He already has that order, but about the Receivership’s Assets rather than against individuals.
He filed individual claims to 1,200 affiliates. Since we already know the procedure used here, we shouldn’t replace it with an imaginary one?
The logic fails when you replace reality with imagination. You will need a NPOV Neutral Point of View when analysing something like this.
I’m not 100% sure about my own conclusions, but I have tried to make them as correct and neutral as possible.
It’s an on going discussion. You should read both types of arguments, not only the ones supporting what you WANT to read.
Sleep with one eye open.
“Read between the lines?? !!! ” Its practically in bold print. My point is that there are some net winners that will not be sued (maybe even our “lucky” Bouncin’ Betty) because Bell can not determine or prove that they are winners at all.
Jeez man…It very obvious that there are gaps in the records. Is it obvious to you that this is exactly why Bell may not be able to prove his case in some instances?
If you think he has an Order that is sufficient then you can skip to Step 2., but I think Bell will ask the court to specifically rule that the transfers RVG made to affiliates were fraudulent and are therefore recoverable to the estate.
Bell needs to pin this down or every net winner defendant can seperately argue their own pet theory of why they do not have to pay any money back . Do it once and settle the issue. Go to Step 2….
In point of fact I do not believe you have any idea of the procedures used or you would not write the things you do. However, I know for a fact, because I follow the dockets, that none of these 1200 people or any other affiliate has been named in a lawsuit filed on behalf of the RVG estate.
In so far as clawbacks and money demands are concerned there is no difference between the 1200, the Bouncin Bettys and Naabos of the world. The sheer size of the 1200’s net winnings and that they may have had information of particular usefulness to the Receiver is why they recieved immediate attention.
Otherwise, every affiliate, including the 1200, the Fun Club 12, Bouncin’ and Naabo are in the same leaky, not yet, but soon to be sued, row boat.
Bell explicity stated that his efforts to recover money from the 1200 was just the beginning of his efforts and that there would be more subpoenas and demands to follow (undoubtedly there will be.)
So my problem is this: You go around here telling people too rest easy and their conscience’s should be clear if they have not received a “claim letter” yet.
This is the pinnacle of fanciful thinking and its potentially injurious to people’s best interests because it imparts a false sense of morality and well being that does not exist. Its nothing but rationalization and hopium.
Rather than sleeping easy net winners should keep in mind that they are going to be sued (do they think Bell is lying to everyone?) and that they will almost certainly lose and have a judgment + accruing interest lodged against them… unless they use the next 60 days to do something about it.
I have laid out the steps I think the Receiver can use to maximize the recovery to the estate which involves suing EVERY net winner. Of course there may be better ways ro accomplish that end than I have imagined.
Something to consider here is that its well established that a Receiver or Trustee has to treat all estate creditors/debtors of a particular class the same. Keeping that premise in mind how could Bell arbitrarily decide to sue some net winners and not others?
Is it ok to sue the man who owes $10,000 but disregard the man who owes $9,999 or less? No matter what cutoff you choose this inequity exists because the man above the cutoff will always be disadvantaged (he is forced to pay back $10,000 while the $9,999 man pays back nothing?).
The argument is bound to be advanced by the $10,000 man that if $9,999 man pays nothing then neither should he since there is no qualitative difference between the two.
For this reason I believe Bell has to sue every net winner. He can not establish arbitrary cutoffs. Yes, his mandate is to recover the maximum for the estate but he has to do that within existing law. Destroying his ability to collect from higher net winners by giving a free pass to lower net winners leads to a legal quagmire that is contrary to his purpose.
The “normal” criteria is:
amount owing vs cost of recovery vs likelihood of recovery vs amount which is actually recoverable
Of course it is.
But if giving the $9,999 person a free pass provides the $10,000 person a perfectly plausible, logical and lawful defense against clawback then the likelihood of recovery in the greater scheme of things has deteriorated to zero. Not only will the $9,999 not be recovered but arguably the $10,000 will not either.
If Bell wants discount everyone by 50% then fine but he can not hope to recover 50% by charging some 100% and others nothing to reach that point.
I reserve the right to withdraw my previous assertion. All creditors need to treated alike, but that may not be true for all debtors. The decision to pursue a monetary claim could very well be elective.
Back to the drawing board.
Take a look at all the other work he has to do there, all of it within reasonable time. Take a look at all the delays, e.g. motion for extension of time.
If he add more time consuming work to it now, he will probably become less effective, e.g. unable to follow up important parts.
Doc4 “Appointment of temporary Receiver” IS that order, about recoverable assets and groups of people (and entities) rather than about individuals.
Subpoena + letter = presentation of claim (so the claim can be accepted, corrected, negotiated or objected outside court).
He has presented 1,200 claims, and will PROBABLY present some more, but the “weight of different factors” indicates he won’t do it.
There’s ONE difference. The 1,200 HAVE received claims, the others HAVEN’T (in 7.5 months, or 5 months after the first claims were sent).
That should normally have followed ASAP, not more than 1-2 months after the first 1,200. It hasn’t followed in 5 months.
I will almost always tell people to relax, to act rational and to use their own head. Normally that’s the best way to solve something.
When it comes to conscience, I gave some different alternatives designed for specific types of situations. All of them ended up with “good conscience”, but a couple of them ended up with “not so smart idea”.
You and some others had already filled in some other alternatives, so I only expanded the range of options a little. People will normally find their OWN solutions anyway, and they will probably use some different combinations.
One of my options was about voluntarily settlement, even if they haven’t received any claims. I believe that MIGHT be a good idea for some people. But they will have to FIND that solution themselves, choose it themselves among the other options.
I used a little “sales technique” in that part, but it’s actually correct described and correct from a psychological point of view.
The court WILL actually solve the moral issues here. It might be in conflict with people’s personal sense of morality, but we do need to respect other ethical rules than our own.
Morality and ethics works best when we’re using them on ourselves. It doesn’t work so well if we’re trying to “project” it onto others, e.g. the Court and the Receiver will have different professional ethics than most of us. I just expanded the range of “ethical options” a little, quite correctly.
Sleeping well doesn’t have anything to do with morality or ethics. It’s normally necessary for most people to sleep well.
Jimmy and I have calculated the risk for claims to be relatively low using completely different methods. It would have been misleading if I had pretended something else. I have checked many different aspects of the case, and it points in the direction of “no more organized blocks of claims” (some random claims may occur, but that’s not very likely).
We have just filled in different options. It will give your own options more “weight” when they can be compared to something different, and people prefer them anyway. But some people will prefer the other set of options.
“Recoverable assets” is a very inexact term. What is a recoverable asset? You just read Bouncin Betty’s 67 page argument that her assets were not recoverable because of one particular theory of law.
There are probably hundreds of more theories as well. Doc 4 is a general enabling Order but Bell still has to assert that Betty’s money is a recoverable asset of the estate and she has the right to argue otherwise.
We went all through this in the NX Pay discussion we had. Bell needs the Court to affirm that Betty’s money is in fact a recoverable asset. As you know, Betty says it isn’t. So does Fun Club and Gilmond and King and etc, etc.
There’s a simple explanation for that.
1. The data bases were a mess.
2. He needed to subpoena the big hitters to send a message that he was serious about pursuing them and to obtain the fullest possible picture of the Zeek operations via subpoena.
3. In the intervening months Bell has been working on reconciling the gaps.
4. The gaps are pretty much filled so far as he can get them and now and he is ready to proceed to the next steps which will include further demand letters and potentially more subpoena’s which will fill in even more gaps.
Dealing with 1200 is hard enough. Did you expect that he would subpoena 80,000 people?
I’m sorry. What does this mean?
I think M_Norway was referring to the expression “sleep well at night” (i.e. no guilty conscience)
Something in post #100, the last few sections of it. I used “sleep well” rather than “rest easy / sleep easy”.
I have analysed different aspects of the case, and they point in the direction that he won’t send out more claims or subpoenas in blocks. So I don’t see any logical reasons for people to worry about it either.
Bell’s team will be overloaded with work in the next 4 months (or more), handling claims from the net losers.
Your theories contains some hypothetical elements.
1. The data bases were a mess.
He spent $85,000 on a Forensic team to fix most of that problem. The biggest problem now is how time consuming it will be to analyse and verify a huge number of user accounts.
2. He needed to subpoena the big hitters to send a message that he was serious about pursuing them and to obtain the fullest possible picture of the Zeek operations via subpoena.
A subpoena isn’t meant for that use, e.g. “show people how serious you are about something”. It’s typically about getting insight into the other party’s side of the case, and preventing new evidence from popping up “randomly” during a trial.
3. In the intervening months Bell has been working on reconciling the gaps.
He didn’t mention anything about that in the Quarterly Report. Most main parts of his work were listed there. So from here it becomes too hypothetical.
You have focused too much on your own theories here. You have tried to confirm your own theories rather than analysing the actual case. Some of the elements are purely hypothetical, in that you have “invented” solutions to fit within your own theories.
The letter following the subpoena was presentation of the claim, a necessary legal step before a case can be sent to court. We shouldn’t “invent” other hypothetical solutions there, or “invent” other motives for the subpoena than the normal legal ones. It’s not a tool to show people how tough and serious he is.
IMHO, the 1200 are the most egregious net winners that serves as test cases for Bell, as they are the most likely to respond with petty retaliations, such as those done by Craddock and company. Sun Tzu’s art of war states that when attacking, go after the leader/general, thus, you go after the tip of net winners, and let the news media coverage do the rest.
I would disagree on that. There’s a difference between what’s owed (i.e. ALL of the fraudulently transferred money, i.e. ALL the winnings) which is what the court will agree with, vs. that can be practically expected to be recovered.
The court already gave Bell the power to recover all the money he can. He doesn’t need court to reaffirm his duty.
Let’s take Betty for example. It’s Bell’s duty to recover as much money from, say, Betty, as possible. Thus, his “ideal position”, what the court ALREADY approved, is the FULL AMOUNT (i.e. every dollar), though he *could* settle for less.
Thus, I do NOT believe Bell needs the court to reaffirm that Betty owes that money. The court is not going to set a limit, like “if your net winnings is less than X, Bell can’t touch you.” That would make no sense. That would be up to Bell and negotiation with the clawback recipient.
Folks – we have something in this country called due process and the court systems have something called civil procedure. Okay, I know you know that I just wanted to call out the obvious.
The Court has only given Bell authority to go after the net-winners, but that means Bell still must sue each net-winner (that doesn’t voluntarily negotiate).
This means Bell will do one of the following:
1. Initiate with a demand letter to a net-winner
2. Initiate with a subpoena for production of financial documents, similar to what was already been sent to the top 1200. The authority for this subpoena is the original order from the Court giving Bell authority to seek claw backs. Note this is just to gather information and a lawsuit has to follow for any individual to have a judgment filed against them.
3. Initiate with a complaint (i.e. being served papers for the start of a lawsuit).
Even within a complaint, the defendant has rights under due process. For example, what if Zeek’s database is incorrect? What if the defendant received one of the canceled checks and could not cash it? What if the defendant purchased retail bids instead of compounding bids (for the BOGO offers), but the Receiver’s calculation of amount of net-winnings is only compounding bids purchased?
In other words, the lawsuit process is not just about getting claw back from net-winner, but also providing a process for the defendant to challenge the amount itself. A lawsuit has to happen. A judgement won’t just magically appear.
OK you admit that the data bases were such a mess that he hired FTI to sort them out. Don’t go any further than that and start guessing about what the “biggest problem” is. Given that that Bell’s team and FTI have had nearly eight months to straighten out the records, I strongly suspect they have already analyzed and verified all the user accounts. If you choose to believe that this “biggest problem” still exists then I would like you to provides some plausible reason why in eight months they have not been able to solve this problem. they are preparing to begin the proof of claim process. This seems pretty indicative that they have a handle on who is who and who owes what.
A subpoena that asks for the location of all real and personal assets, a description, their location and account numbers has very little to do with “the other party’s side of the case.” It has everything to do with coming after and getting into the other parties’ wallets. The subpoena items that included all correspondence, contracts, e-mail accounts and passwords was to gather information on both the activities of the individual and the other people intimately involved in the Zeek operation. If you do not think that is threatening and pursuant to potential legal action, both civil and criminal then you live on a different planet than I do.
What do you think FTI was paid $85,000 to do if it was not to “reconcile the gaps?” What do you think Bell’s in house team has been doing for eight months if it was not to fill in the gaps? You seem to think that FTI was paid for doing nothing? and that Bell’s team has done nothing? so that now they are just approaching the “biggest problem” which you wierdly seem to believe is analyzing user names. Chee-rist man catch up. Six months has passed, the proof of claims procedure is ready and in front of the Court, Bell is negotiating with up to 80,000 net winners and is prepared to file tens of thousands of clawback lawsuits within a few months and think its still day one and the biggest problem is analyzing user names.
I Believe the Court needs to affirm (not reaffirm) that Betty owes the money. If this is not so then Betty never gets the opportunity to object to the demands that are placed upon her and that would deprive her of property without due process.
I am leaning toward the viewpoint that the Reciever can, with Court approval and subject to objection by the creditors and beneficiaries of the estate choose not to pursue net winners where the costs outweigh the benefits.
No property has been deprived for Bell to make a “demand” upon, say “Betty”.
Bell has stated that if you’re a net winner, you need to talk to him BEFORE June 2013, else he’s going to assume that you’re NOT going to negotiate and thus he’ll SUE you.
IMHO, Bell will likely start sending out “intent to sue” warnings (with a dollar amount, presumably) sometime in June, which can be seen as a demand, to every net winner who has NOT responded / negotiated.
Betty’s essentially betting that her winnings are small enough that even if she does NOT respond Bell won’t sue her for clawbacks. That is, IMHO, not a smart bet. And that is our only difference in opinion, I think, in when does Bell need his authority reaffirmed by the court.
Bell certainly has the authority to demand the money from the net winners. It is when they do NOT cooperate that we differ in our opinion.
The court has already given the receiver control over any and all “receivership assets” including:
“those assets held or possessed by receivership defendant”
and
“held in constructive trust for the receivership defendant”
and
FRAUDULENTLY TRANSFERRED BY THE RECEIVERSHIP DEFENDANT”
IOW, every cent that has passed through Zeek.
The “Asset freeze” section of the same document goes on to state:
“All receivership assets AND RECOVERABLE ASSETS are frozen until further order of this court.
Zeek was fraudulent from the moment it accepted it’s first “payment”
Whether or not “members” were aware they were being defrauded or whether they had an “honest belief” Zeek was legitimate is completely irrelevant.
Your post is well considered. Bell has already indicated that there will be a court approved procedure for reconciling the amounts due.
If the amount can not be reconciled between the Receiver and net winner then a mediation, or a hearing will be scheduled. (he has not said if this “hearing” could be a binding arbitration or will be an adjudication in front of the judge) So yes there will be a process for the defendant to challenge the amount.
With the amount determined in this way, the only other issue is whether the estate is entitled to the money or not.
So I ask you, and considering the concept of due process, can one action, one finding of fact and law determine who the money belongs to or does Bell have to prove his case over and over and over again using the same facts and the same law for every single person. If you agree that it is needlessly redundant to do this then I must ask why one Complaint can not include many thousands of these exactly situated individuals.
Each one could be served with a demand (and the opportunity to reconcile the amount,)the complaint and whatever other notice or subpoena that might be desired. Each individual, (or groups of individuals represented by a single attorney) would have the right to object and defend themselves.
The beauty of this from the Receiver’s and Court’s perspective is that most individuals will not contest anything and will be defaulted out simplifying everything.
I really think such a procedure covers all the due process elements in a very streamlined way. The defendant receives a demand, a complaint, and an opportunity to object…not only to the amount claimed by the Receiver but also whether the amount is recoverable by the estate at all. What else is there? Countersuit? Crossclaim? have at it.
Contrast this with the cost of filing tens of thousands of individual complaints with the court. What a traffic jam that would be. I am not certain but I think it also costs around $175 to $300 to file each suit. Given the number of net winners the filing fees might be many millions of dollars That does not include service, its just the court’s fee.
The Receiver will figure out a way to streamline this process, and provide due process so that the court can approve. I only suggest one way it might be done without the need for 80,000 individual complaints.
You are correct in every detail. None the less the 4th and 15th amendments to the US Constitution provide that a person may not be deprived of property without due process of law. That being the case the net winner is entitled to his day in court and can assert what he believes is relevant (at least until the judge cuts him off)
It’s already been established.
Zeek was a fraud from the getgo.
EVERYTHING that passed through Zeek was fraudulently obtained.
Anyone who received ANY of it can be obliged to return it.
The receivers’ primary function is to ensure ALL recoverable assets are realized and returned to the estate.
In practical terms, however, while the receiver CAN recover ALL assets, should he so choose, common practice is for a receiver to determine if the cost/s of such recovery outweighs their value to the estate and limit the recovery effort to those amounts he/she could reasonably expect to recover for less cost than the actual money amount.
Witness the number of “innocent” charity organizations bankrupted by their involvement with Bernard Madoff.
The receiver is mandated by the court/s to treat the interests of the estate as his/her first priority, NOT those of the “victims”
I am not sure I understand why you included this statement. The protection of the victims (and creditors) is the very reason RVG was placed into Receivership to begin with. The victims will have a beneficial interest in the assets of the estate via the Proof of Claim process.
They also have standing to sue the receiver if they do not agree with his administration of the estate. The whole thing in the final analysis is for the benefit of the victims. (and the lawyers)
Here’s my logical reason:
Bell and the Court can’t reasonably be expected to handle more individual cases than they already are handling / have as potential upcoming cases.
There’s a TIME-aspect in the case, too. There’s an “upper limit” for what they can handle within reasonable time. By going after the ones with toughest resistance first, he effectively limited the number of cases he would be able to handle.
He CAN add more voluntarily settlements, cases easy to solve outside court. But he can’t send out random claims without knowing whether or not they will be easy to solve.
Jimmy has summed it up. Bell has to go through the correct procedures to have a valid case in court.
Bell’s next Quarterly Report will probably tell us more about the status of the case. Quarterly reports should normally be published within 45 days, if he’s following normal accounting principles.
I can sum it up even more succinctly.
Bell is.
Try refuting that
Agreed. My contention is that this can, and should be done using a single Complaint with multiple defendants. The complaint used for more culpable parties would be a little different from that issued to the rank and file
No. How long do you give them to pay the demand? Weeks? Months? Years? This just delays the inevitable. If this were the intention the demands would already be sent.
No. Very limited use. Long delay in production, Motions to Quash, Motions to Compel. Its a quagmire and most of the important information that Bell seeks is possessed by the 1200 who have already been subpoenaed. May be delivered concurrently with a Complaint under some circumstances but not generally.
Bingo. This moves the ball forward. The amount demanded will be included with the Complaint in a separate exhibit.
Bell will obtain court approval for a reconciliation process. approved Court.
He haven’t exactly said so himself?
“Bell will do this, Bell will do that” isn’t reflected in the court documents. It was reflected in his initial intentions, but not in how the case has evolved.
The next major upcoming event on his “to do list” is the claims process, e.g. how to inform affiliate creditors, how to inform other creditors, how to collect claims, how to validate claims, final date for claims.
Clawback claims against net winners looks more like they’re in the final stages than in upcoming stages. He has even set a final date for when the cases can be solved outside court.
I am sure that I read that Bell intends to seek approval for a reconciliation procedure…. Mention of it is probably in the Preliminary Liquidation Plan and it certainly makes sense to do it as part of the clawback litigation.
Elsewhere, I have seen many Complaints which request unspecified damages, not that I suggest that will be done here, but it is not unusual to see a complaint filed this way.
Doc132 “Second interim report for fees and expenses” contains SOMETHING about it, but it can’t be interpreted clearly in any direction.
It contains “something” pointing in both directions, e.g. both about on going efforts and about time/cost issues related to the work.
What we DO KNOW is this:
* the first 1,200 claims were sent out October 30 2012, 2.5 months after the shutdown.
* any second and third block of claims should normally have followed relatively rapidly, e.g. within 1 or 2 months, unless there have been some unsolved problems with the first block of claims that also will affect following blocks.
* now it’s 5 months after the first block, or 7.5 months after the shutdown. May 31st will be 9.5 months after the shutdown, with only 2.5 months left to keep it within the 12 months deadline.
* he has a major event in his “to do list” for the next 4 months (or more), the claims from the net losers.
I simply don’t find it very likely that he will add extra time consuming work to it now. There’s some upper limits to what he reasonably can be expected to handle within reasonable time.
Your timeline seems accurate. I recall Bell seemed to believe he could wrap up the Receivership in under two years, but I have no recall that any deadline exists. Who imposes a deadline on something like this. It takes as long as it takes.
Additionally the claims process is going to be open for ? months 3? 6? and its very automated.
Personally I do not see the claims being any kind of bottleneck and apparently neither does Bell or he would not have said the Receivership would be done in two years. Its not as if Bell has to look over every claim himself. He has all the money in the world to hire workers.
Clawback claims can not be more than 4 or 5 years old, and has to be presented within 12 months (vaguely described from memory). The information derives from an actual clawback case, probably from a link posted in a comment here or from other Ponzi articles.
The claim period for net losers is suggested to be 120 days.
He can of course hire 500 people from a “short time employment agency”, and give them 12-16 cases each to handle within a couple of days. Add 3 more days to it, and they will have finished the negotiations too, “1 case per hour”. 🙂
16 cases * 500 people = 8,000 cases solved. But 500 people is an upper limit, throwing in more manpower will only cause chaos. So he’ll have to repeat it for 5-10 weeks, with some new workers each time.
if that is accurate then its not an issue.
Solved
I quick listened to Bell’s conference call thinking maybe he mentioned something relavant to this discussion. He stated that there were 840K usernames who lost money and 77K usernames who made money.
He mentioned twice that he and his team had struggled to “get their arms around” the financial situation at Zeek.
In the context of this discussion, ATM there are no “victims’ as yet.
There are “members” there are “paidup members”there are identified “winners” and there are identified “losers” and there are a great many unidentifiable identities.
That is all the information to which WE are privy ATM.
As it stands, ALL winners are potentially liable to return any “winnings” to the estate.
The question of how the receiver and courts decide to handle the situation is entirely in their hands.
In fact, the receiver himself has indicated more “winners” can expect to be contacted.
On a strictly personal level, I have observed a gradual hardening of attitudes to US based HYIP ponzi frauds and fraudsters, PARTICULARLY since the introduction of the Presidents’ task force.
It would not surprise me in the least if in the near future more and more “winners” will find themselves coming under close scrutiny following the collapse of US based frauds.
It should be remembered also, a large number of the participants in the Zeek fraud were nothing more than fictitious identities who used untraceable payment processors, considerably reducing the number of potential victims eligible for any rebate.
For those interested, AC360 have rescheduled their headline Zeek Rewards story for Monday night US time (8pm/11pm).
Zeek Document 121 page 6 — Final Liquidation Plan — states
KEY WORDS for anyone who believes they can “sleep easy” or thinks its a good idea to “wait and see” ——“DEFENDANT CLASS ACTION” —– this means every single net winner (no matter how large or small,) who is not otherwise being sued as an individual or as a member of a group (Fun Club 12 for example) is going to be sued as a member of a class.
Its all above in black and white. Anyone with eyes to see and a mind to think can piece this together
1.) Bell will seek a finding of the existence of a Ponzi/pyramid scheme which will affirm that net winners were the recipients of fraudulent transfers,
2.) He will sue net winners en masse (class) and
3. there will be a reconciliation procedure for amounts.
No need to sue 80,000 net winners individually. Nobody gets a free pass.
Sound Familiar?
What about all the net winners from outside of the US?
Another keyword there is LITIGATIONS, “how to solve the possible disputes in court”. Similar judicial disputes e.g. about the ownership of the money can be solved in classes. Technical disputes, e.g. about what the affiliates have paid in vs. what they have received will clearly be individual.
Cases will have to be “solvable in court” rather than “solvable in theory”. The court can’t solve all types of disputes and cases.
A third keyword there is POTENTIALLY, “may have been fraudulently transferred to net winners and potentially subject to fraudulent transfer claims (“clawback” claims)”.
WHERE TO FIND THE COURT DOCUMENTS?
ZeekDoc121-main.pdf was missing in Troy Dooly’s list, it was only updated to March 29 2013. Updated list can be found in Don Ryan’s list, ASDupdates.com:
https://sites.google.com/a/asdupdates.com/files-website/home/zeek-rewards-sec-case
Troy Dooly’s list of documents are mostly gathered from Don Ryan’s list. It can be found here (link disabled):
mlmhelpdesk.com/zeek-rewards-court-documents/#.UQrMPacueM4
He will include them in the domestic litigation based on their contact with Zeek Rewards in the United States if doing so does not delay his case against the domestic winners. Most winners are in countries with established legal systems that recognize the Hague Convention for international service of process.
Very Generally he will obtain judgment in US, transfer it to the foreign country where a local debt collector will attempt to collect on the US judgment.
I have no idea on Earth what you are talking about.
And I have no idea what the Receiver is planning when he’s talking about the Hague Convention. It CAN be used to serve judicial documents through foreign courts, but it wasn’t exactly what I expected to be used. 🙂
“Solvable in Court” is about the types of cases that normally can be solved in court, i.e. about valid cases within the court’s jurisdiction.
So far he has an order about the Receivership’s Assets, and about groups of individuals or entities. He has initiated a pre-trial disclosure procedure against 1,200 individuals, where he informed them about the potential upcoming lawsuit. He has settled some cases outside court. And that’s all.
He will need to send out individual claims to have valid cases against other individuals. There’s probably a “minimum requirement” there, e.g. he will have to serve the original complaint (Doc4) or something to have a valid case. But normally he’s probably required to disclose much more information in a pre-trial procedure.
What did you think would be used? Stealth bombers that would leaflet the countryside?
Not all countries are signatories to the Hague Convention, just as not all countries abide by the Geneva Conventions, but most do.
I would have thought he would have used a local lawyer in the other country, and the local court system there.
Stealth bombers are normally about other types of cases, less “solvable in court”.
“Solvable in court” can be about many different things, e.g. the lack of valid case, the lack of correct jurisdiction, incorrect or illegal procedures, conflict between court cases. A case can BECOME unsolvable for a court.
It looks like Anderson Cooper 360 will try once again to report on Zeek – ac360.blogs.cnn.com
Very Good. Funny.
The Hague Convention binds countries to a pact wherein one signatory recognizes (in certain instances) the judgements of another subject to the normal safeguards afforded its own residents in its own courts.
There will be foreign courts and attorneys involved but they will not re-try the case, they will only be asked to confirm the validity of the US judgment.
I will go out on a limb and guess that should Bell choose to do so, he will almost always be able to confirm the validity of his judgments in foreign jurisdictions, but like any judgment, anywhere, it gives him only the right to collect.
Actually collecting on the judgment is another whole level of effort and uncertainty that plays out at the local-foreign level…right down to the local constabulary knocking on someone’s door.
Once he establishes the validity of the judgments I think he discounts them and sells them in bulk to various foreign debt collection companies.
Lol, bumped again for Margaret Thatcher’s death and Beyonce’s Cuba trip.
I’m not a regular viewer but is the AC360 blog schedule ususally this unreliable?
Update: The AC360 blog is now showing the Zeek story scheduled for Tuesday night.
Not the right to collect, but the right to send out the claim and initiate the process.
“Send out the claim” is about sending out Doc4 “Appointment of Temporary Receiver” and a disclosure letter, typically through a local lawfirm. Normally we use a lawfirm before we use a court.
It will prevent a defense strategy like “But Zeek was never found to be illegal in my country!”, or “I have never in my life done business with an entity like that!”. It will show the VALIDITY of his claim in general, but not about the exact amount.
Your mentioning “his judgment” a couple of times, but I’ll guess that’s a typo? He’s at the beginning of a process rather than near the end.
All will be Class Action Defendants. Bell will get a judgment against every single one of them.
Bell does not yet have the judgments.
Doc 4 appoints the Receiver and grants him the authority to act on behalf of the estate. By itself it is not a demand for payment, nor a complaint against any affilliate. Bell must bring a plaintiff’s suit on behalf of the estate to recover fraudulent transfers. he will of course reference Doc 4 as his authority to do so.
Doc 4 was SEC (the plaintiff) vs. RVG (the defendant.) Don’t confuse that action with the future clawback suits, the parties to which will be the RVG Receivership vs John Does, as individuals, and/or RVG Receiver vs a Defendant Class.
I believe he will file the names of the putative class members once this 60 day settlement window closes. The fact is, that’s probably why he has set a deadline. He needs to know who has settled and who will be sued as a member of the class.
Doc4 is the original complaint, the document that gives the Receiver his powers to act on behalf of “someone”, and specifies his powers and duties.
It has been served to each and everyone affected by this case so far, e.g. financial institutions, the 1,200 net winners, employees and contractors, third party companies.
It can be served to parties in foreign countries using the Hague Convention, first of all to show the VALIDITY of his claim. Showing the validity of a claim is one of the initial legal steps, but from there he will have to follow a correct procedure against the individual parties.
Your plan is missing some of the normal legal steps, e.g. the pre-trial steps. You assume he can skip those steps and still have a valid case, that some of the procedures can be replaced or omitted?
I simply can’t find the “class action” type of solution you’re talking about in normal legal procedures? It will skip some of the normal legal steps. Can you point to ONE example where a similar solution has been used in a similar case?
I’m not talking about some initial stages of cases here, where several “John Does” are listed among known defendants in a case, for later to be identified as individuals. That’s not about “class action”, but about individuals who haven’t been identified when the case was initially filed.
I believe we will have to WAIT AND SEE. His plans have been rather vague, and it’s impossible to draw any conclusions from them. It isn’t possible to read anything from the court documents showing a clear plan for how to solve remaining claims against net winners.
The Hague Convention is clearly related to citizens or entities in foreign countries. He will probably only go after the BIG money there.
I will not say this again….Doc 4 does not show or prove the validity of the claim . It freezes assets and empowers the Receiver to act.
Validity (not the amount) of the demand will be proven in the next phase when Bell asks the judge for a finding that Zeek was a ponzi/pyramid and that money paid to affiliates was a fraudulent transfer.
Look at Doc 4. There is not one word concerning fraudulent transfer or how much a person might owe. It is completely insufficient to the purpose you suppose that it has.
The way you use “served is a misnomer. There has been no service of process that included Doc 4. Its an Order that provides Bell authority to act on behalf of the estate. Of course it accompanied his initial correspondence when attempting to recover and freeze bank assets.
If you were a banker wouldn’t you want to know who you were dealing with and that he had authority? Doc4 is like a badge that Bell flashes when he needs to show his capacity and authority to act.
I think he will find a way to combine the Complaint with the demand OR send demand letters out within the next sixty days. I do not know the requirements of a class action suit to recover fraudulent transfers but obviously Bell does and he has not sent out demand letters so far.
That alone tells you something….like maybe he doesn’t need to for reasons we do not yet understand.
That is what Bell said he was going to do and it makes perfect sense.
In law, a class action, a class suit, or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued.
If you have not been able to find anything on Class actions you cam look a little harder. I suggest you start with Wikipedia.
Do not discount the power of the Court to fashion a Class Action that meets all the due process elements in an expedient way. There is no reason I can see that a person can not be joined in a class that also has a demand for money folded into the lawsuit.
The right to dispute the amount or negotiate a settlement still exists doesn’t it? You keep insisting that it has to be done first and separately but why? ?????
You have no answer other than its always done this way, but its not always done with 80,000 people at once. That is why I think it will be done differently via the Class action route than you can imagine.
That doesn’t exactly bring any clarity?
It tells us that Class Action Defendants IS possible, but not very common solution.
“Commonality” = They all owe “SOME” money? That’s not a very common factor.
“Adequacy” = Normally a Defendant-initiated class would have been easier to use?
“Numerosity” = OK.
“Typicality” = That could work, if he’s limiting his claims to a certain amount from each of the Defendants in that class, or to a certain percentage of something (e.g. if each of the Defendants owned shares in RVG, claims could indirectly be directed against the shares).
CLARK KENT RATHER THAN KENNETH BELL?
The first one would probably have been able to solve it within reasonable time. The second one is only human.
I don’t think a Class Action lawsuit like you have described will be the solution here. It might be A solution to something, but not THE solution.
None of the court documents are indicating any type of actions like that, and we can’t just add new types of actions from our imagination.
Are you effing kidding me? I just posted the passage from the Final Liquidation Plan where Bell said that a Defendant Class Action was exactly what he intended to use. You are hopeless
Post #135? Yes, he’s mentioning something there, but not enough to be defined as any identifiable solution to the remaining claims.
The Hague Convention can be a partial solution to something, and we can also identify appr. WHAT it can solve. Class Action lawsuits can probably be part of a solution too, but his plans are rather vague. I analysed it against Wikipedia, but that didn’t make it become any clearer.
The court documents don’t have much more than “vague plans”, with too little information to draw any conclusions from. We don’t know whether those plans are aimed towards the existing 1,200 claims or towards new groups?
Bell has INITIATED 1,200 clawback claims against net winners, by presenting the claims and related documents. The 60 day period will typically refer to claims already initiated, not to all other potential claims.
The discussion here have mostly been about OTHER claims than the 1,200 claims already presented. I’m not able to find any identifiable plans CLEARLY related to those other claims.
The correct method if you don’t have enough information to draw any clear conclusion is normally “wait and see”, or “try to bring in additional information yourself”. You can also analyse the information you already have to see if it points in certain directions.
I read what’s available and the outline of what is to come is crystal clear to me. You read the same information and see murky fog.
The material posted in #153 shows me exactly what Bell’s intentions are. The same material appears vague and unintelligible to you. There is nothing more I can say. If you don’t see it, you don’t see it.
By your own admissions you have no idea how Bell intends to proceed, so may I suggest you cease advising people such as Naabo or Bouncin’ Betty that they have no clawback exposure. You quite obviously can not know that, since you claim not to understand what Bell intends to do.
This illustrates how service of process may be effected in a defendant class action suit. Note the word OR in the instructions. OR
When submitting any Service of Process documents, summonses/complaints, notice to redeem, etc., please make sure that you submit one original of the process, notice, or demand and two copies of the process, notice or demand for each defendant.
Please note that the only exception to the above is with regard to a class action suit in which all defendants are to be served with the same process, notice or demand, service may be made by filing with the Secretary of State the originial process, notice or demand and one copy for each named defendant.
Bell could initiate a class action suit against the net winners by serving each with an Order to Show Cause (order to appear and argue against a proposed order) as to why the class should not be formed and why they should not be included as a defendant.
Next to nobody will appear and argue and once the Judge rules the Class is appropriate it will be formed. Certain Net Winners can be excluded from the class if Bell wants to focus particular attention on them The 1200 will either become part of the class, sued individually, or sued in groups. The amount Bell claims against each person will be folded into the greater class action and rightfully so since each will be given the opportunity to contest, or resolve the amount demanded within the framework of the class action. Done deal
There is more than one way to skin a cat.
But you can’t know the opposite either?
My analysis don’t contain ideas about “Bell can potentially do”. He has to clearly make statements about it, or it has to be reflected through something he already have done. I don’t “construct” ideas to make them point in specific directions if they’re poorly supported in the material.
Vague information is treated exactly as it is, as “vague information” rather than as “facts”. I will probably mislead myself if I’m too eager to fill in missing parts of it to make it become “understandable”.
At some point the information will mostly be based on my own ideas rather than the actual material. I’ll consider methods like that to be FLAWED.
August 17 2012:
“Appointment of Temporary Receiver” is the original complaint, the document that gives the Receiver his authority to send out claims to net winners. It also limits his rights for how to solve it, e.g. by emphasising the principle of “cost effectiveness”.
October 30 2012:
Claims are sent to 1,200 net winners, the original complaint + a subpoena disclosure + a letter identifying the individual claim.
April 1 2013:
A 60 day “deadline” for voluntarily negotiations is set, without specifying clearly which groups of net winners the deadline applies to. Binding deadlines can normally only be applied to existing cases in progress.
Kenneth Bell either has a communication problem or the 60 day deadline applies only to the existing 1,200 cases, or he’s using vague communication as a strategy to make people fill in their own ideas about it.
The correct counter strategy against a strategy like that will be to ask him to clarify what he really means, by asking specific questions about it.
Filling in missing parts from imagination or other sources is a rather poor strategy.
When information is vague, it’s either by accident / poor skills or by purpose. I don’t believe in the idea of filling in too many parts on my own. I will rather prefer to ask direct questions about it, or wait until the information becomes clearer.
Yes, I can. He has said he will attempt to recover from ALL net winners. The only way he could possibly do that is by class action since never in a million years is Bell going to sue ALL net winners individually.
He clearly stated that he would sue Class Action Defendants, individuals and groups in the Liquidation Plan. It is no secret.
There is no complaint filed against the 1200. There has been no summons issued to the 1200. You can not find them , cite them, or post them. You can not tell me the docket number. You can’t do it because none of them exist.
Now, do not tell me for the half dozenth time that (ZeekDoc 4) is a complaint against The 1200. Doc 4 is not even a Complaint to begin with, its an Order to Freeze Assets and Appoint a Temporary Reciever. Its so boilerplate that Bell’s name is inserted into a blank space in pencil.
You do not understand what you are looking at. The only complaint in the is entire case is the complaint by the SEC vs RVG, Burks, and Zeek Rewards that led to Burks stepping down in favor of the Receiver.
The 1200 receieved subpoenas as non parties appertaining the SEC v RVG action. They received a letter indicating that Bell believed they were the recipients of estate assets and informing them that he had been empowered to recover money for the estate.
Since in his opinion (NOT a Court ruling) the 1200 had estate funds, he, Bell expressed his willingnes to negotiate (likely at a discount) the return of the funds without recourse to litigation.
That’s all that has happened. They have not been sued, summoned, complained or formally noticed and neither has anyone else.
60 days is an arbitrarily selected deadline that applies to all net winners. Those who have not settled on a repayment plan (including most of the 1200) in the next two months will be herded into the Defendant Class. AT THAT TIME there will be a summons and complaint issued to all net winners enmasse (the Class) which will include the 1200.
It will be cost effective compared to filing 80,000 individual lawsuits and it will yield more money for the estate than just suing the largest winners. Everyone will be sued and everyone will have a judgment entered against them or repay their obligation before judgment is entered.
A few active net winners key people will not be joined in the class because they will be singled out for special consideration, damages, liabilities and penalties and thus sued individually.
I should probably have specified it, “Doc4 is the result of the original complaint, the order derived from it”. It’s that document that gives Kenneth Bell his powers as a Receiver, and has instructions to parties affected by the order. The complaint itself is another type of document.
Doc4 has been served directly or indirectly onto most parties affected by the order. “Indirectly” means it can have been replaced by another document describing only the relevant parts, but signed by the court. “Another document” means something that clearly identifies the case and what it is about.
The subpoena is a document like that.
mlmhelpdesk.com/wp-content/Docs/Zeek/ZeekDoc81-01.pdf
The 1,200 net winners have received a court document clearly describing the case, with a demand for disclosure of information, with a letter identifying the individual claim. For me, that looks very similar to a legal procedure, one of the initial steps in a civil case against individuals. It looks like pre-trial procedures.
I’m missing procedures like that in your ideas, or they are too vague or too “constructed”.
@Hossy
Wikipedia can probably give some answers.
http://en.wikipedia.org/wiki/Federal_Rules_of_Civil_Procedure#Title_V_-_Discovery
I will normally not dive too deep into “the pool of laws”. It’s too easy to overfocus on something or misinterpret what a rule actually means.
Is it me or are you guys just arguing over minor procedural issues? 😉
The issues may be minor looking at the big picture but they are important in that they signal what the Receiver’s likely actions are.
I don’t think you can assume that the Receiver will attempt to recover from every net-winner (where they are reachable by the Receiver and jurisdiction). A look at all past Receiver actions is empirical evidence; and a common sense example is that if you had $100 net-winnings is very unlikely that the Receiver would initiate legal action.
Even with defendant class action lawsuits there is still a cost decision to be made on what level of net-winnings is worth litigation.
Defendant class action suits save costs of individual action and allows the Receiver to prove similarities in the case one time – i.e. it is a ponzi, it is a fraud, the money can be recovered. But litigation is still required to verify identities, amounts, and other issues that will be different for every individual, including what checks were not cashed, what was purchased as retail bids vs. investment bids, etc.
In short, the Receiver’s actions to date can be ‘handicapped’ so that if you are a net-winner, ethical issues aside, you can make a probability decision on whether you should proactively settle or wait for the possible lawsuit.
So what?
A pretrial procedure could include the judge clearing his throat or an attorney visiting the lavatory, making a phone call, sending a letter. It could include a settlement, a demand for payment or a negotiation, the combined effect of which could just as readily result in a negotiated settlement as the filing of a lawsuit.
BUT At this point there is NO lawsuit that has been initiated against any member of the 1200. There’s been no summons, and no complaint. There has been no judicial notice and no Order to Show Cause. In short there is nothing filed with the Court that indicates a lawsuit has commenced.
A subpoena is not a lawsuit. A letter is not a lawsuit. Lawsuits are filed with the clerk of the court. This has not occured. There is nothing in the dockets. NADA. ZIP. SQUAT. Only your complete misunderstanding of the process would ever convince you that a lawsuit is underway against these people
I am familiar with what a subpoena looks like.
“The case” The current case is SEC vs RVG. The 1200 are not parties to that “case.” The are not defendants in that “case” They have no standing in that “case” They can only be brought into court by a cross complaint that brings them in as parties but that has not(for the 1000th time) been done yet, and it will not be done until after the next 60 days.
Its
Irrelevant to the current discussion.
I get your drift. Its too much.
No. The future course of the litigation. What method to recover the most money for the estate. At least that is my emphasis.
There is very little incremental expense in obtaining judgments against one hundred or one hundred thousand persons in a class action. With the cost spread out over so many people even a small judgment might be a break even deal. Plus there is the matter of equity. The whole concept of class is that everyone is treated the same.
At some point the Receiver reports his findings, asserts his right to a certain amount against a certain person and its up to the defendant to appear in court, to dispute it and win. That is how these things get handled. People lose by default. Its the way the system works. If it didn’t the whole thing would clog up with petty squabling over nickels and dimes.
If you are going to calculate probabilities don’t you have to start with valid assumptions? If the Receiver says he is going to attempt to recover from ALL net Winners and then elsewhere says he is going to file a Defendants Class Action what weight do you give those two items?
Math aside, I measure it as pretty certain that he will include ALL net winners as Class Action Defendants. Maybe I am conflating the two statements but I think its justifiable under the circumstances. (after all we have to assume something in calculating the probabilities.
You’re arguing from an emotional viewpoint rather than from a rational one now, so it’s time to end the discussion.
I was trying to identify the case within the framework of normal legal procedures like the Federal Civil Procedure rules. The subpoena can be identified within those rules.
Correct procedure is essential to have a valid case, to make the case become solvable in court. The clawbacks are actually individual cases against the net winners, to be solved outside court by settlements or to be solved in a court by trials.
If you want to continue the discussion, keep yourself rational rather than emotional, and don’t lock yourself onto one specific target.
“Bell has said …” is a rather weak argument if it isn’t reflected in what he has done. I have pointed out the vagueness in Bell’s statements, and we’ll need to get some clarifications before they can be interpreted 100% correctly.
Bell will follow the correct procedures.
A demand letter shows serious intent, particularly when coupled with a subpoena asking for financial records. A demand letter demonstrates good faith, particularly when it also expresses a willingness to resolve the parties’ differences out of court (Judges like to see that). A demand letter often results in payment or a settlement but not always.
However, A demand letter is not evidence or proof that a claim is valid. A demand letter expresses one parties belief, i.e., “You owe me.” The counter party is under no compulsion to pay, nor does he/she even have to respond and if so the response could well be, “No I don’t.
This correspondence, both written and verbal, normally precedes the filing of a lawsuit but it is not essential to the validity or non validity of the claim.
Bell has shown his good faith to the 1200 and more broadly to the total universe of Zeekers by advertising, e-mails, conference calls, and a website.
A demand letter is not a summons, or complaint, or Notice or Order to Show Cause. Nobody has been sued. When Bell does file suit the Defendants will be accorded all their due process rights. They will have an opportunity to object to the validity of Bell’s demands before judgment is rendered. That is all the law requires.
The clawback suits for the most part will not be individual cases but a massive Class Action suit encompassing nearly every Zeeker. Its the most cost effective way of handling large numbers of defendants. Bell will get the judgments, though not all will be enforced nor enforceable.
There is little doubt that a relatively minor dispute over payment would normally involve a demand letter. Any Judge would want to know if the parties had attempted to settle their issues before dedicating the Court’s time.
A Judge might very will ask what steps had been taken to resolve the issues, if none, he would very likely tell the parties to attempt to work it out and come back later. A Judge wants to see that good faith attempts at resolution have been exhausted prior to taking up the issues.
The present case is much broader than the simple example above. This case involves 80,000 potential good faith negotiations. Bell has demonstrated his willingness to resolve.
He can file at the expiration of 60 more days as announced and convincingly prove to the Court that he has exhausted all reasonable efforts to reach an accomodation with the defendants. He does not need 80,000 demand letters individually wrapped and mailed to show the Judge he made a good faith effort to resolve the issues.
If an individual claims he did not “get the word” the response will be …you know now.
The subpoena and the letter identifying the claim was part of a formal pre-trial process. It wasn’t about showing how serious he was. Why would anyone do that?
Wikipedia (around 70% of the subtopic “Title V”):
The subpoenas and the demand letters can be identified within that framework, rather than as an attempt to show how serious he was.
Doc4 gives the Receiver the authority to perform clawbacks. The subpoenas and the demand letters are documents derived from that order, following specific procedures.
I’m trying to identify the case within a framework like that, and certain other types of logics makes very little sense.
It is actually a formal part of the pre-trial process, and I have just identified it as that.
Why would would anyone want to show they are serious? To show resolve? Because it focuses people’s attention on the consequences of their actions of course. They are confronted….as in I am willing to negotiate but if you do not take me seriously I will sue your butt into the next century, turn your financial life upside down, take your money and charge you for the court costs to boot.
Obviously you have never received a subpoena. They are by their very nature intrusive. They do not respect what you consider to be your private business and as such they are discomforting at a minimum, and pose a significant threat to one’s well being if one has a reason to hide something….such as the location of assets or the involvement in an illegal scheme. You must be incredibly naive if you do not understand this.
A subpoena is not a lollipop. Plus even if a person thinks he has nothing to hide, compliance can be a MAJOR pain in the butt, could easily take hundreds of hours of effort and provide information that will be used against the person providing the discovery.
The very fact that a subpoena has been issued can be the incentive a person needs to think seriously about settling.
It does both.
We are not Pre-trial. We are pre law suit. You are completely jumping the gun unless you define pretrial as everything that preceeds trial…like the Big Bang is pre-trial.
More broadly it directs him to marshall assets belonging to the estate for redistribution to the creditors. If a threat of discovery or of an eventual lawsuit results in settlement at very little cost to the estate then Bell is certainly authorized to use such techniques.
He does not have to sue if the threat to sue is sufficient to induce settlement. The subpoena is part of that process. In this case discovery also fills blanks in Bell’s understanding of the dynamics of Zeek and certain individual’s role in it.
The long posting of Subpoena Rules and Discovery deadlines are beside the point. Clearly Bell can subpoena and when and if he does he must follow the guidelines. Nobody is disputing that. I could just as readily post the Rules of Evidence, but I won’t because, like the Rules regarding subpoena’s they irrelevant to the discussion.
Most normal lawyers won’t use ideas like that. If they’re using them, they won’t admit it in public.
It’s time to stop the discussion and make some conclusions out of it, e.g. a summary of the different viewpoints. If we continue the discussion, someone will probably start talking about “Energizer Bunny” (“Duracell Bunny” in Europe), “it can go on and on and on and on …”. 🙂
I will consider Doc4 “Appointment of Temporary Receiver” to be the most central order, the order that gives the Receiver his authority to perform clawbacks. The subpoenas are documents deriving from that order. Most of the other documents derives from the same order.
I will consider the subpoenas + demand letter + claim to be a formal legal step, a method used for pre-trial purposes, both to inform people affected by it about the claim and to collect information (disclosure). It will also initiate negotiations about the claim.
The Receiver initiated 1,200 clawback cases against individuals on October 30 2012, a relatively low number compared to the number of net winners. Additional cases should normally have followed relatively rapidly, e.g. within 1 or 2 months. They CAN have been delayed for some reasons, but so far the 1,200 are the only clawback cases initiated.
The 60 day deadline is probably related to the 1,200 existing cases. Federal Rules Civil Procedure has several specific types of deadlines, typically 30 or 60 days. Subpoenas and demand letters are part of the same “framework” of rules.
The court documents contains lots of vague information. I haven’t been giving that type of information much weight. If people don’t communicate their intentions clearly I will certainly not add more than a minimum from my own imagination.
Statements about collecting ALL claims might as well refer to “ALL 1,200”. Those are the ONLY claims initiated, the others are “potential claims, not formally initiated”.
That was my summary. I can add something about the morality aspect too, but I don’t consider that to be very important.
Noted–
My forecast.
After passage of 60 days Bell will file a Motion to Approve Settlements (those that have settled)
He will Motion for a Finding declaring Zeek a Ponzi/Pyramid and a ruling that all net winners received fraudulent transfers recoverableto the RVG Estate. There may be some Opposition by the Fun Club 12 or other True Believers. The Motion will be approved anyway.
Bell will Motion to Form a Defendant Class. There will be some Opposition by the Fun Club 12. The Motion will pass.
Class will form. Notice, Summons and Complaint will be served on ALL net winners.
Summons and Complaint and further discovery as needed to sue central figures/large net winners individually.
Judgments entered in US and transferred as needed to foreign jurisdiction
Sale of all but the largest judgments to commercial debt collectors in USA and other countries.
I’ll bookmark this page, comeback later and see if this was accurate.
Right. And there’s a tooth fairy that lives on the moon. Who cares if they admit it. Its what they do.
@Hossy
I didn’t close normal updates, only the on going discussion. It started with Jimmy’s post #16, April 3rd, and have mostly been about the same topic all the time. If we had continued for more than a few posts, people would have started to make jokes about it (“Energizer Bunny”, etc.).
A long lasting discussion can be defended as long as it brings in something new, and I was about to run out of new arguments. I have limited my conclusions to the specific time period August 17 2012 till now, “what WILL happen should normally be reflected in what HAS happened”.
I can not answer for what other people say in public but when I hire an attorney to collect money on my behalf I expect him to use every bit of leverage that he can muster. Threats are fine with me. The deadbeat debtor is threatening my livelihood so turnabout is fairplay in my book.
Debt collection is not a pillow fight. If you want someone to write you a check its usually necessary to get their undivided attention first. Subpoena’s and depositions have a way of focusing the debtor’s mind.
Bell is asking the 1200 to cough up a minimum of $100,000 each and in some cases much much more. They are not going to even consider writing him a check unless they feel threatened.
For that to make any sense, you’ll have to define what to check it for, something more specific and measurable than “accuracy”. That’s why I identified som “key points” in my summary, to make it become specific.
Here’s my “key points”:
* Doc4, what that is about
* Subpoenas, what those are about (pre-trial procedures)
* 1,200 clawback procedures INITIATED correctly
* 60 day deadline, what that is about
* Vagueness in information (so I won’t use it either)
* Basic idea 1 = “use a framework to identify the details”
If I had been potentially affected as a net winner, I would have preferred to get some clarity about the vague information (e.g. by asking a set of direct questions about it to the Receiver). That part is an unknown risk, but it can easily be solved.
Key points look good. Very specific. Of course you will need to identify the details and disregard those things that are vague. I totally agree.
Here’s some information about jurisdiction:
Source:
http://www.uscourts.gov/FederalCourts/UnderstandingtheFederalCourts/Jurisdiction.aspx
NOTE:
The information was cherry picked from the article. I was looking for different limitations to the court’s jurisdiction, looking for examples rather than for a complete set of rules.
The $75,000 limitation there is not meant as a conclusion to anything.
Additionally…
Plaintiff SEC or Plaintiff Receivership is a citizen of all States or No State?
I used it only as an example, not as a rule for this case. I haven’t even identified the TYPE of case here, “diversity” or “federal law”.
BTW, I have identified a possible reason for Class Action Defendants. That type of case can be used against all those who haven’t responded to the Subpoena, have completely ignored it or have ignored most of it.
I have also found a potential reason for why only 1,200 have received Subpoena + claim, in a 120 day deadline rule (Rule 4m in Federal Rules for Civil Procedure).
Since the SEC is the plaintiff in the SEC v RVG case and the SEC is a Federal agency enforcing Federal Securities Law it would seem that this case is based on the Court’s jurisdiction over Federal matters (not diversity of citizenship.
Since Bell as the Receiver is an officer of the Court (a Federal Court, I would suggest that all actions he brings are also within the Federal Court’s jurisdiction.
This pretty much covers the Defendant Class Action at the Federal Level. Particularly note Rule 23(b) (3)
Rule 23 of the Federal Rules of Civil Procedure, which provides for class actions, is plaintiff/defendant neutral. However, as a practical matter almost all certified classes are plaintiff classes.
Typically, the action of one or a group of defendants is asserted to have caused the same injury to a very large body of consumers, shareholders, or others. The situations in which a very large body of people or entities causes the same injury to a single party have heretofore been rare. (The INJURED SINGLE PARTY HERE IS THE RVG ESTATE) However, this may be changing in the information economy.
Rule 23(a) provides that
Rule 23(b) then requires that for a class to be certified, all of the requirements of Rule 23(a), and one of the prerequisites enumerated in Rule 23(b), must be satisfied.
Rule 23(b) lists the following:
Rule 4 applied to the SEC’s Complaint. The SEC attorneys had 120 days to serve defendant’s Paul Burks and Rex Ventures, which of course they did. Bell has not filed a complaint against any affiliate. a Demand letters and a subpoena are not a Complaint.
Time of service applies after a complaint is filed with the Court. The Receiver said he would file complaints in June, presumably at least against those in the group of 1200 net-winners who received subpoenas but did not settle; and possibly against more than the initial group of 1200.
Even if service was defective, the complaint can be refiled. The only issue is if the complaint is time barred due to statute of limitations.
In general, if a complaint was filed service will occur even if the defendant hides, substituted service by mail can happen. What will happen if defendant doesn’t reply in the case is a default judgment will occur. The defendant can later file motion to vacate default judgment saying that service was defective, at which time the plaintiff will just serve papers again.
Calculation of whether the claim is time barred at this stage depends on the claim, but courts have allowed cases to continue saying that during the time the default judgment was issued and until it was vacated, the clock was not ‘ticking’.
I have read the preceding posts, but I have checked something completely different. So I’ll have to focus on that first …
The Subpoena looks very similar to a “Service of Process”, the legal notice a party / non-party (e.g. witness) will receive as a formal legal step (required by 5th and 14th Amendments).
en.wikipedia.org/wiki/Service_of_process
en.wikipedia.org/wiki/Legal_process
I believe we clearly can identify the Subpoena to be a “Service of Process”? It meets all the requirements.
RVG, RVG Estate or Receivership Defendant is not the injured party here. That logic is flawed?
The Receiver is performing clawbacks on behalf of the creditors, not on behalf of RVG.
The COMPLAINT in this case is “SEC vs. Rex Venture Group and Paul Burks”, dated August 17 2012. Doc4 is the order derived from the complaint, giving the Receiver his authority. The Subpoenas has derived from that order, a correct “Service of Process” sent to 1,200 net winners within territorial jurisdiction within 120 days.
I doubt the Receiver will send any more warnings to any of the 1,200 net winners. He has already sent them the required notice and allowed for negotiations of the claims, and offered them a 60 day final deadline.
* those who haven’t responded properly can be solved as Class Action Defendants, with default judgment as a result. They have decided NOT to fight the claim.
* Many have probably solved it by negotiations.
* Some cases have probably been unsolvable by negotiations, and have to be decided by a court (probably as individual cases).
I have checked jurisdiction requirements. There’s 3 types of jurisdictions for a court:
A: Subject matter jurisdiction (REQUIRED)
B: Personal jurisdiction
C: Territorial jurisdiction
Subject matter is about the facts in the case and about correct laws, “the right to handle that type of cases”.
B and C can be handled by a court in another country. The court in the US can handle the case itself against net winners in other countries, and let foreign courts execute any order (and other necessary steps).
I’m pretty sure the use of foreign courts will be relatively limited, e.g. only used if the amount involved is more than $75,000 (because there will still be some potential jurisdiction issues involved).
NOTE:
We’re not lawyers, so you should probably do some research on your own.
Why on earth are people continuing to try and second guess an experienced court appointed receiver and ignore history in this matter ??
The receiver will get all the co- operation he needs from the court, whether or not a handful of bloggers can dig up the requisite regulations.
Perhaps it would be of more value to research previous similar situations and see exactly how any eventualities were handled, rather than engage in endless speculation.
Recognize also, long time observers of the HYIP ponzi scene have noted there has been a gradual hardening of attitudes to online HYIP ponzi fraud within the U.S.A. over the past few years, particularly since the advent of the various task forces involved in money laundering.
Yes a subpoena requires service of process. The subpoena is issued by authority of the Court and once served brings the recipient under its jurisdiction. In the case of a subpoena the document demands information(subject to objection) from the recipient ….or face contempt.
A Summons also requires service of process. It is issued by the Court and upon service also brings the recipient under the jurisdiction of the Court, but in this case the document requires the appearance of an individual to answer a complaint…or face default.
Both the the Summons/Complaint and Subpoena require service but they are not the same things. A Subpoena can be issued to ANYONE that may have knowledge the Court deems pertinent. A Summons/Complaint is issued to the Defendant in a law suit.
Since no Summons has been issued to the 1200 it follows that none of them have been sued.
The creditors file a proof of Claim which upon approval, gives them a beneficial interest in the assets of the RVG estate. The Receiver is recovering assets for the RVG estate which will then be distributed prorata to the estate’s beneficiaries.
I for one do think we are second guessing the Receiver. No one has criticized Bell in all these many posts.
I agree. Nobody here is going to influence one thing the Receiver does. It merely a matter of interest between us.
Since every case is inherently different, knowing how things were handled somewhere else might be edifying but would not put an end to speculation. Just because Reciver A did X in Y does not mean Bell will do X in Z.
@LittleRoundman, You have been around. Its my first. Its a good time to change up the topic.
Hug it out bitches.
Which is my whole point.
To gain a better understanding requires looking at multiple sources, rather than zeroing in on one particular field.
IM(very)HO, Rather than researching the letter of the law, those affected would be far better served by considering precedents AND plot the evolution of how similar cases are being handled.
You’re correct, of course, the fact something has “been done” does not mean Mr Bell will do the same,
HOWEVER,
the fact something HAS been done means he CAN do it.
If he has publicly stated he WILL engage in a particular course of action, and precedent says he CAN do it, then why is anyone muddying the already contaminated waters with speculation ??
IM(very)HO, Zeek prudent members will assume Mr Bell is going to do exactly as he has foreshadowed and take whatever steps necessary to protect themselves and their interests as soon as is possible, including NOT attempting to dispose of any of their gains.
I’m doing it for experience and insight. I have also pointed out that as a possible motive for net winners to voluntarily make settlements even if they haven’t been sued, even if they feel the risk is low (in post #53).
I’m not analysing laws, I’m analysing “good and bad strategy”. So I haven’t been very eager to dive too deep into some of the topics here.
Exactly
And some strategies works. The overly broad and burdensome subpoena was heavily reduced (for the future, including the existing subpoena from October 30 2012).
“Signed Order Granting Motion to Compel”
mlmhelpdesk.com/wp-content/Docs/Zeek/ZeekDoc117.pdf
It’s part of the Kettner, Kettner, Sorrells case + FunClub USA, Robert Craddock case. It was the only part of their strategy I predicted would have any chance when I analysed it 3 months ago.
“Kettner, Kettner, Sorrells” and “Kellie King, Trudy Gilmond” have probably co-ordinated some of their strategy. Both have “bad cases”, impossible to win but they can be used to establish some points that can be useful later. Both cases were used as arguments to reduce the subpoena to almost nothing (from 25 burdensome points to 7 easy points).
Doc 117 states “without restricting the Receiver’s right to seek additional documents from non-party Movants at a later time….”
There is no limitation to 7 items. That is just the number of items that are going to be produced at this time.
Doc 117 does not apply to Gilmond and Kelly King.
Note that this is directed at NON-PARTY movants not defendants. That should tell you something.
That strategy failed here, more or less completely. It worked on some people, but it also brought him into very deep shit.
Bell lost much of his powers because of that strategy, “trying to show how serious he was” rather than focusing on what he actually needed of information.
The law allow for a so broad disclosure procedure, but that doesn’t mean it should be used unnecessarily. Bell was stripped for most of his investigative powers because of that idea.
mlmhelpdesk.com/wp-content/Docs/Zeek/ZeekDoc114-1.pdf
The new subpoena will now have 7 points:
1. Money paid IN to RVG, specified in groups.
2. Money received from RVG
3. Information about eWallets (account number, amount)
4. Information about Zeek user accounts (back office)
5. Work done for RVG
6. Marketing material, including attachments but not emails
7. RVG’s “Terms and Conditions”, and similar material.
If he need more information, he will have to ASK FOR IT rather than demanding it. He has agreed not to collect any personal information, other than what’s directly related to RVG. Gone are all the detailed information he initially demanded.
He also had to agree to a Protective Order, allowing people to remove non RVG information from documents (e.g. bank records), and clearly limiting the use of the material.
mlmhelpdesk.com/wp-content/Docs/Zeek/ZeekDoc119.pdf
Doc 117 (or 114) and 119 applies to all non parties, indirectly. Non parties are all the affiliates, all the net winners who received the subpoena.
I have a post waiting for moderation about that.
Bell has failed to ask the court for permission to file an overly broad and burdensome subpoena, asking for much more information than what is relevant for the case. The law allows for that type of disclosure, but not to misuse the right.
Disclosure is for collecting information relevant to a case, to prevent new “evidence” from popping up unexpected during a trial. It’s not intended to harass people or to show them how serious you are, “show some muscles just to impress people”.
Well you finally said it. “Non parties are all the affiliates.” I hope you understand that.
@Hoss
Doc4 has been amended by Doc117. New subpoenas will only contain those 7 points. The Court has heavily restricted the Receiver’s rights to perform “investigative disclosure” (against net winner affiliates in general), other than for information directly related to RVG.
Some of the material he is allowed to collect is simply marketing material (point 6) and other “standard documents from RVG” (point 7).
I made some comments about “Show some muscles” strategies, e.g. in post #179:
You made some comments about it too, e.g. in post #174:
The disclosure procedure isn’t designed for that purpose. The legislators didn’t design it as a tool for lawyers to get attention from people, showing how serious they are, or visualizing by example all the trouble they intend to get you in if you don’t co-operate.
Bell seems to have used the Subpoenas in that way. The Court has now seriously limited his rights to use strategies like that against non-parties (affiliate net winners).
Doc17 was a stipulation concerning the Motion to Compel production of documents. It no more amends Doc 4 than does Page 14 of the Cat in the Hat.
That’s totally incorrect. At this time Bell has only agreed to accept less than he originally asked for from Sorrel, Kettners, and Craddock (the Movants.)
The only thing he relented on was the disclosure of the whereabouts of assets they possess He will pick that up later when he sues them on the clawback.
The parties stipulation extends no further than this temporary limit and nothing restricts Bell from demanding more from those three parties (or anyone else) at a later date.
It does not matter what the legislature intended. A subpoena has the effect I described.
Are you a 13 year old girl? I never imagined an adult could be so naive. A subpoena is serious stuff. It can open up incriminating evidence, the whereabouts of hidden assets. Personal relationships that are otherwise secret.
If forces people to choose between lying and telling the truth, disclosing or hiding, perjuring or not, shredding documents and deleting e-mails. The Court can send the police into your home or business and retrieve all hard drive information. The can subpoena your e-mail account at Google.
The legislators are mostly attorneys. They know very well the effect a subpoena has on people. Its damn threatening and anyone who has ever recieved one can tell you that.
Why do you think people avoid service? Attempt to Quash or limit them. Bell does not have to make a subpoena threatening. Its threatening by its very nature.
mlmhelpdesk.com/wp-content/Docs/Zeek/ZeekDoc117.pdf
I might of course have interpreted that in a too broad sense, both
(1) the range of the amendment and
(2) the range of non-parties it will affect.
But the main counter argument was that the subpoena was monumentally broad and burdensome, and exceeded the Receiver’s rights into areas where he hadn’t asked the court for permission to extend the disclosure procedure, in conflict with a lawyer’s normal duties under “the Rules” (he referred to several of them).
That argument can be applied to each and every subpoena (of the 1,200).
Ad Hominem isn’t a very wise strategy here. Most of us are able to see right through them, looking for the facts rather than for personal opinions.
I analysed the stuff late at night, and I will probably have to correct something. But as far as I can see, the Receiver has been stripped for most of his investigative powers in that Order.
But why would a lawyer use a strategy like that, when the main objective is to recover money? People will normally receive the respect they deserve anyway, they don’t need to “show some muscles” for that.
You are correct in pointing out that the Stipulation regarding the Motion to Compel (Doc 117) AMENDs the “Agreed Order” (collectively Doc 4 and Doc 121) I stand corrected. It is a technical distinction that I missed.
That “Agreed Order” granted the Receiver the broadest possible discretion in recovering Estate Assets. Accordingly he issued subpoenas with the broadest possible scope. There is nothing unusual in this. Nor is it unusual for the recipient to file an objection alleging the subpoena is overly broad. Its all very typical.
The Stipulation (Doc117) address both the form and the service of process regarding subpoenas issued to the Movants. It is specific to them. The Parties to the action (the Motion to Compel) have agreed on a method of process and reserve all rights as to form.
Accordingly the Court has Ordered the production of the 7 items from the Movants without restricting the Receiver’s rights to seek additional documents at a later time. This is consistent with the broad scope of the Reciever’s powers granted in Document 4 balanced with the privacy rights of the Movants.
Maybe your right Norway. Instead of subpoenas Bell could have sent them Hallmark Cards with a note requesting they write him a check for a few hundred thousand dollars.
Normally, if the non-party Movants has privacy rights, other non-parties of the same group has similar rights. The principle of “Equality before the Law” can probably be applied.
The counter arguments weren’t about how burdensome the subpoenas were for those specific people. They only added some general details to it.
It was contested on a wide range of arguments, some of them very serious, e.g. the lack of jurisdiction for investigative disclosure against non-parties (e.g. for potential fraudulent wire transfers), misuse of Rule 26, violation of Rule 45.
The Receiver has agreed to “I will accept an absolute minimum of documentation, including stuff I’m not interested in”.
The amendment has generally denied the Receiver to send similar types of subpoenas as the ones he sent in October 2012 (e.g. demanding disclosure of people’s personal finances unrelated to RVG, or people’s personal e-mails).
As soon as I posted it occurred to me that the recipients privacy rights had nothing to do with it. They may have claimed the subpoenas are needlessly obtrusive, requested privileged information, are overly broad, burdensome and blatantly threatening but those are only unproven allegations.
The Judge did not rule on any of those objections. Both sides stipulated to the handling of the subpoena and the Judge signed an Order based on those stipulations. There is no effect on anyone except the movants.
So the recipients threw every argument they could think of in their objection. What do expect? Its what lawyers do. They hope the Judge might buy one of them. Its typical lawyer stuff, and Bell would have had an answer for every one of them. Its pretty obvious as well that his answers were pretty damn good, or the Movants would not be giving up the 7 items at all and still be subject to additional discovery.
Look, Quilling took a risk when he Motioned for the Unfreezing of e=-wallet funds on behalf of his clients. Bell countered that he could not answer that Motion without discovery. It was damn certain that the Judge would agree with Bell’s Motion to Compel…and it was much broader than this stipulation. That is what led to this compromise. Bell forced them to answer up on 7 items. When he actually sues them he will get a lot more.
I suppose you made that up from whole cloth. Its BS
This is completely incorrect. It was a stipulation between specific parties in a collateral action not a RULING by the judge. It has no universal applicability. It does not restrain Bell from demanding additional documents (or depositions) from the Movants in the future and it pertains only to the subpoenas issued to Sorrels, Craddock and the Kettners. They MUST comply with the 7 items, they may still have to comply with all 25.
Under what logic you believe a judge would completely gut Bell’s ability to collect pertinent information which is at the core of the very purpose of the Receivership I do not know but your understanding is wrong.
Let me take this one step further: Under what logic and simple reasonable common sense can you believe that Bell would stipulate (agree) to such conditions?
* The lawyer is representing 300 of the net winners, including Craddock/FunClub USA and Sorrells/Kettner/Kettner.
* Doc4 was amended, “to govern the Receiver’s future subpoenas in this action”. That’s a key point here.
I analysed it late at night, and I will probably need to correct something. But other than that, the Order reflects a settlement heavily in favor of the non-party Movants and others in the same group (not limited to THAT specific group).
That’s partly why I tried to invite Erin into the discussion, e.g. in case she had heard something about it through her husband.
We make settlements like that when we have a very weak case, when the opposing party is holding most of the winning cards. The Order is the opposite of what Bell asked for in the type of documents. He had to eat some crows there.
The Court is expected to be NEUTRAL, not favorising any of the parties (or non-parties). That’s the core principle.
A court is expected to deliver Justice, but not the philosophical version of it, or the built-in sense of Justice people have. If you’re focusing on your own sense of Justice, you will probably miss the target. A court will not deliver that type of Justice.
You have offered no plausible answer to this question. Indeed you can not, for Bell would never have submitted to such blanket restrictions on his powers of subpoena without a hearing (no doubt supported by the SEC) before the Judge.
He would have demanded a ruling on a matter of such significance not stipulated to it.
It does but not the way you contend it does.
Its not a settlement by a long long way. Its a stipulation. The only reduction in the scope of the subpoena that Bell has acceeded to, temporarily, are the whereabouts, amounts and account numbers of the recipient’s assets which even I will acknowledge are more appropriate to post judgment discovery. That is all.
In addition to which the plain wording of the Order states that it “does not restrict the Receiver’s rights to seek additional documents at a later time.”
The Court did not RULE on anything. It was neither neutral or biased. it merely signed an Order that the Movants and the Receiver stipulated to. The Court was not asked to adjudicate anything, so whatever we expect of the court is immaterial. It never decided any issues.
Answer:
Other than that, it’s meaningless to analyse other people’s motives in detail. I’m not even sure about the facts here.
I don’t like “Bell will do” logics or “Why would Bell do that?” type of logics. I won’t analyse it either other than briefly, and I will certainly not draw any main conclusions from factors like that.
Statement:
Answer:
Several factors are pointing in that direction, that he has agreed not to send too burdensome subpoenas as the standard solution, but rather ask for the information he need.
Statement:
Answer:
My MAIN answer here is that I haven’t analysed it completely, and I probably won’t do it either. It’s a “work in progress” or “temporary analysis” type of work.
I was filling in some missing parts of the picture when I found those documents. I had analysed parts of it briefly 3 months ago (before it was made into an order).
Another disclaimer …
Saying you do not know is a valid answer. Thank you.
Here’s what the original “Motion to Compel” asked for:
Here’s the stipulated order (short version, my words):
The Receiver has agreed to only demand information related to RVG, not including any personal material (e.g. e-mails), not including any personal financial information.
NOTE:
Most of the points in the agreed Order was related to Robert Craddock, the guy who filed a complaint on behalf of RVG against K. Chang’s hubpages articles, for copyright violation and some other stuff. So I’ll have to analyse his involvment a little deeper.
ROBERT CRADDOCK
He was the guy who …
He has done similar work for FHTM, filing complaints or copyright case against a website, around January 2012.
He was NOT listed in Paul Burks’ list for employees, contractors, third party agents, etc., and that was used as a defense against the broad subpoena in “Motion to Compel”. So he has been treated as an “only affiliate” (not required to answer tougher questions).
When analysing the different roles in Zeek, my guess was that he was hired through Greg Caldwell and/or Gerry Nehra, as an independent “problem solver” for RVG, handling problems a lawyer normally would stay away from.
I also guessed that his role as an affiliate either was an “under cover role”, payment for work, or both (e.g. you can pay people indirectly by giving them a position and a downline, rather than paying them directly as traceable “salary” or “invoices”).
That method can solve both payment for work and cover expenses related to the work, without the person showing up as an employee or contractor.
Paul Burks probably knew Zeek would fail already in May/June 2012. Most others were able to see the escalating problems, e.g. when the bank terminated RVG’s accounts in May, Zeek was banned in Montana, and other events.
Greg Caldwell’s company/companies was hired around March 2012, to solve some fraud problems. He replaced most of RVG’s front figures in late June 2012 (the others simply disappeared quietly from the picture). My guess is that it was part of a shutdown plan, “let a professional handle the upcoming trouble”.
Greg Caldwell formally replaced Dawn Wright-Oliveira as COO, but the other front figures disappeared quietly or was replaced around the same time.
Robert Craddock has made several different claims about his own involvment in Zeek, but I don’t remember them 100% correctly.
* He was inserted into the Sorrells/Kettner downline in May 2012,
* popped up officially in June 2012 in the complaint against K. Chang’s articles,
* popped up officially as organisor against clawback claims in August 2012
He should normally NOT appear in the list for top net winners, because May-August is a too short period to earn that amount in profit. He must have recruited like crazy to end up on that list.
I remember vaguely that he has mentioned something about Gerry Nehra, in the same context as when he mentioned WHEN he joined Zeek.
Greg Caldwell is a professional “problem solver”, with close connections to Gerry Nehra, Kevin Grimes and other MLM lawyers.
He has 2 companies (1 d/b/a ?):
whs-pi.com
direct-sales-compliance.com
Gerry Nehra:
Kevin Grimes:
Note:
Most of the information in this comment is from memory, from early September 2012 when I analysed it. Some of the information was collected from Craddock’s own website and from the conference calls he held.
I believe Bell’s team should analyse Robert Craddock’s role as an affiliate, e.g. for whether he has joined as an affiliate or has been “inserted” into an existing downline. It should normally show up in the back office transactions, e.g. in WHEN he started to earn something from his position, and WHEN people in his downline has joined Zeek.
When you’re “inserted” into a downline, people lower down in your downline will have joined earlier than you. That will typically be an indicator for bogus information.
When “inserted”, the invested amount will normally not show up in your normal transactions, e.g. it won’t be reflected through any transactions from the outside. A normal affiliate will have an initial transaction, while an “inserted” affiliate will have an artificially created balance of VIP Points right from the start. And that’s an indicator for fraud.
“Inserted” affiliates can have gradually increased VIP balances to make it look more “normal”, rather than one big initial VIP balance from the start.
I seriously believe Robert Craddock was “hired” (directly or indirectly) as a part of Zeek’s OWN shutdown plan, “hired” through Greg Caldwell or Gerry Nehra as one of the “problem solvers” required for a controlled shutdown.
Caldwell and Craddock’s involvments were discussed briefly on realscam.com (25 posts).
http://www.realscam.com/f16/caldwell-craddocks-greatest-hits-1555/index2.html
One correction:
I remembered something incorrectly. Craddock mentioned Kevin Grimes (not Gerry Nehra), in a conference call about clawback resistance. He was contacted by Kevin Grimes in May 2012, according to his own description.
Thanks for the background info. I have read Craddocks’ zteam biz web site and heard him speak on a couple of conference calls. I think he maintains he was an insignificant net winner and did not work for Zeek, yet apparently he still engaged the law firms of Quilling & Alexander on behalf of himself and others and has convinced many unsophisticated affiliates that he has some special knowledge and ability. He guaranteed that the e-wallet funds would be released by NX Pay and the other payment processors. Surprise! NX Pay froze the money.
As far as the official records show it was the Kettners and Sorrel who had money in NX pay and thus were the Movants that filed the Motion to Unfeeze the e-wallets not Craddock or the Fun Club although all those parties all seem to have used Quilling and Alexander for legal work of various types, including negotiating with Bell over the e-wallets and the subpoenas. There’s nothing in the record that shows Craddock has any money of his own in NX Pay.
Anyway, It was not until Bell filed his opposition to the Motion to Unfreeze that Craddock and Fun Club were mentioned in this action as Movants, though there were some contemporaneous exhibits filed by Quilling and Alexander attempting to show “good faith negotiations over the e-wallets and discovery limitations concerning Craddock. So in spite of the fact that Craddock and Fun Club USA Inc. were not officially movants, Bell seemed to view them as participants in the effort by Quilling and Alexander to get the funds unfrozen and oppose all efforts that Bell was making to recover funds to the estate. Its hard to see behind that curtain but Craddock was doing a lot of agitating, making bold representations and insinuating Bell was dishonest in order to inspire those who funded his legal efforts. No doubt Bell had a lot of curiosity as to the guy’s role in all of this.
As far as the Motion to Unfreeze went, Bell and the SEC argued that discovery must be had from Sorrel, Kettners, Craddock and Fun Club USA Inc. if Bell was to have an adequate opportunity to answer the Motion to Unfreeze (after all Quilling’s client’s represented they did not participate in a Ponzi) It was at this point Bell filed his Motion to Compel discovery, and the Judge looked it over and ruled that Bell did not have to Answer until five days after Quilling’s clients provided their discovery…. thus effectively compelling production from Quilling’s clients if they ever wanted to have their Motion to Unfreeze heard.
The Movants were stuck. They had to satisfy Bell one way or the other or they were never going to get their Motion heard.
This impasse was broken with the Stipulation and Protective Order. Bell got what he wanted (or at least enough to answer the Motion to Unfreeze, and Quilling’s clients got some temporary breathing room, some safeguards via the Protective Order and the prospect that they could at last have their Motion heard. Its been a long time coming so it is not clear if Bell has received the 7 items that were to be provided in the stipulation or not. They could still be fighting about what is adequate and what is not behind closed doors.
In the meantime the Proof of Claims, and 60 day negotiating window has taken front stage and the Motion to Unfreeze is on hold.
He claimed that he was authorized by no less than Caldwell to file a copyright takedown on my hubpages hub. When I ask for employee or such, he never was able to provide it. However, the letter he sent to Hubpages corporate was signed as Robert Craddock, Rex Venture Group LLC. So was his email.
Here’s a PDF of the letter he sent to Hubpages corporate.
https://anonfiles.com/file/ff8995fb30a4a34d065c057dbaa8f02c
This was in Late July, only weeks before the SEC shutdown.
Some of my theories from September 2012 were just that, “theories not backed up by facts”. And I haven’t added more facts now either, so you should consider them to be “vague theories”.
Robert Craddock first became visible when he filed a “copyright infringement” claim against K. Chang’s articles about Zeek, around late June 2012. There he sent a letter “on behalf of RVG” (at least so he claimed), forcing hubpages to take down the articles temporarily (for a week or so). Chang can probably fill in some details.
Logically he shouldn’t be among the top 1,200 net winners, unless he has been artificially inserted into an existing downline or has recruited as crazy.
Mathematically, a $10,000 investment would have grown to less than 28,000 VIP Points when Zeek was shut down in August, with a 100% reinvestment plan. He should normally have been among the net losers rather than among the net winners.
His involvment in Zeek should probably be reflected through his back office statistics, e.g. faked joining date, faked earnings, faked VIP balance, faked downline. It can be INDIRECTLY reflected rather than directly, e.g. by fake provisions from a downline.
…and that will be the type of thing Bell is looking for.
I have a reply but it’s stuck in the mod queue.
I have all his emails to me. If Bell wants a copy he can have them. 😀 Or subpoena Google. Craddock used gmail.
When I questioned him about how does he prove he works for RVG (heck, we both use free webmail) he avoided the question.
There’s a discussion of this on Quatloos as well.
I have used plain and simple logics (or math) on some of it, e.g. using a spreadsheet to check potential earnings.
10,000 VIP points in May 2012 will grow to around 28,000 VIP Points after 90 days (after the 10,000 retirement), with a 100% reinvestment. If he has followed that plan, he hasn’t been able to withdraw anything, so he shouldn’t be among the top net winners.
The 10,000 VIP points reinvested will generate around $5,700 in 10+5% commissions to his upline (in the same 90 days). If we reverse that idea, 100 directly recruited people in his downline can have generated around $38,000 in commissions (if he recruited them all at once when he joined, and each of them invested $10,000).
Robert Craddock has been placed among net winners who had $450,000, $550,000, $940,000 in net winnings (amounts from memory). I’m pretty sure he has been inserted into that position, and that it will be reflected in his back office statistics.
I described that method as a potential strategy to pay people for work, without having them to show up as employees or contractors. But a method like that will be fraud, both for the party offering that solution and for the party accepting it.
http://www.quatloos.com/Q-Forum/viewtopic.php?t=8637
He’s clearly identifying himself as an independant consultant for RVG (in late June 2012?). He’s also mentioning Kevin Grimes in a specific role.
From the Quatloos forum (quoted e-mails from Craddock):
But I have also miscalculated something.
100 directly recruited investors in downline, each with a $10,000 investment, will generate $380,000 in 10% commission in 90 days, not $38,000.
People will probably remember this date for several years, e.g. “He FINALLY made a mistake, April 16th 2013”. 🙂
No, what you will be remembered for Mr. Norway, is explaining line by line… blow by blow…. detail backed up by careful analytics and mathematics….how it is safe to get involved in a ponzi up to about 20,000 in profit, because the law will not make you pay it back, and heck, you don’t even have to feel guilty about it cos the court does not even take into consideration the ethical issues.
I once made a mistake. I thought I was wrong, but I wasn’t.
I heard Craddock on several conference calls. he claims to only be a net winner for about $2,000. That’s peanuts so something else is driving this man.
Both Greg Caldwell (White Hat Solutions) and Robert Craddock has probably been recommended through Kevin Grimes, as “problem solvers” for problems a lawyer won’t touch.
Kevin Grimes was a guess, but Robert Craddock said so himself more than once, so it’s probably true.
He’s probably doing a JOB as a “problem solver”, e.g. organizing resistance against lawsuits.
Caldwell is solving problems Grimes won’t touch, e.g. private investigation.
Craddock is solving problems Caldwell won’t touch, e.g. where he can be occupied for months in a legal battle (or end up on the losing side of a battle).
I tried to analyse it from a viewpoint like that in September 2012, but the environment where I discussed it was a little too narrow minded to be productive. “Being productive” is about creating some results, not about discussing for pleasure, practice, training or to strengthen a belief system.
Which heavily suggests some sort of organization / conspiracy.
Something we’ve seen before in Speak Asia and formation of AISPA (and Bahirwani as the spokesperson…) Both appeared late in the game, probably didn’t “win” much, but apointed himself “leader” of the “resistance” against authority yet claimed to help the “members”.
I’m sure PPBlog will enlighten us about how the SAME THING happened with ASD and how Schweitzer and Disner appointed themselves as “ASD Justice” and filed various frivolous lawsuits against the government.
I didn’t say exactly that.
1. You should be relatively NEUTRAL, not favorising a specific viewpoint. There IS a risk for clawbacks, and we’re trying to analyse it from different perspectives.
2. The Court has a different set of ethical rules than most people. Sometimes it will favorise you, and sometimes it won’t. The Court will act within its OWN sets of rules
“I have the morality of a salesman”, so you’ll have to see it from that viewpoint. “Good ethical behavior” in my profession is to try to find solutions to something for the customers, and be able to balance between multiple different viewpoints (my boss, myself, the customer).
I have clearly different sets of values than most people, e.g. flexible morality rather than strong (using multiple sets of ethical rules rather than strengthening a specific one).
So it was simply about offering some alternative solutions (exactly what sales people are expected to do), following the ethical rules in my own profession (rather than adopting other people’s rules), and presenting the solutions in a relatively neutral way (not “over selling”, let people find out for themselves).
Paul Burks and “the chosen twelve” must have known that Zeek was on its way to a collapse already in May/June 2012
Craddock immediately started to organize resistance when Zeek was shut down.
* putting up communication channels
* putting up a website
* using an existing company as “legal entity”
* contacting lawyers
* organizing the financing
* organizing and initiating lawsuits / actions
My POV in September 2012 was that he acted more like a professional problem solver than a professional scammer, an organized part of the shutdown “damage control” plan. I also guessed that he worked FOR Caldwell (as a part of Caldwell’s damage control), but I’m not sure about that anymore.
Realscam.com doesn’t work very well if you’re trying to introduce other viewpoints than the typical “It’s a scam!” POV (e.g. when discussing the potential motives for collecting money). Most nuances will be ignored if they’re not within a specific range, so discussions won’t be very productive.
Identifiable work Craddock did for Zeek or Caldwell before the shutdown was the takedown attempt on your articles. That attempt wasn’t very professional, the strategy must have been designed for a completely different type of opponents.
MUST HAVE ???
Here’s a perfect example of the danger of applying normal logic to what is a criminal enterprise.
If Burks and Co MUST HAVE known Zeeks’ collapse was imminent, then why on earth did he/they hang around and wait for the inevitable ??
With the greatest respect, M.Norway, it’s precisely this sort of “reasoned” argument that brings people into these things
HYIP ponzis are fraud.
The fraudsters’ job is to defraud, and he/she does it by doing whatever it takes to ensure he/she fools the greatest amount of people in the shortest and cheapest way possible.
They lie, cheat, steal, obfuscate, forge and conspire.
Ask Mr Dooly how successful a “reasoned” argument is at avoiding online fraud
1. To skim as much money as possible out of the scheme?
2. To perform a controlled shutdown (via SEC)?
3. What else could they do, other than “hang around” and try to cover some of their tracks?
A: You can’t flee your own country, it will only be a temporarily solution and cause lots of stress. So a controlled shutdown is the best solution. The longer you can delay it the better, but the shutdown has to be “controlled”.
B: Nearly all the people in Zeek’s management were replaced or disappeared from the picture in July 2012.
C: I find it hard to believe that Paul Burks believed it could last forever, that he didn’t see it come.
D: I have looked at the type of solutions Greg Caldwell and White Hat Solutions are offering their clients. It includes different types of damage control.
That description has very few nuances. You assume a certain type of behavior always will be dominant? From that perspective, hiring a damage control company should be unthinkable, and yet Paul Burks hired White Hat Solutions several months before the shutdown.
I can’t use ideas like that, i.e. believe people will fit into some certain types of simplified “standard models” like we see in old gangster movies. Do you believe in that idea?
No, but I’m a firm believer in Occams’ Razor.
Burks was offering 1% per DAY
Everything that came after that was irrelevant.
Without being inside a fraud, the type of “proof” you are seeking will never be available
While it may make for interesting conversation, when it comes to fraud, reasoned analysis benefits no one except the fraudster/s, simply because they are fraudsters, unconstrained by logic, reason or someone elses’ version of the “TRUTH”
If we were talking about “PEOPLE” in general, I would agree with your stance, but, we’re not.
We are talking about a very specific type of “PEOPLE” as in: criminal fraudsters.
Let’s not assume that those who speak out against fraud and fraudsters on blogs such as this assume EVERYONE is a fraudster.
I tend to be fairly agnostic when it comes to trying to account for what the Paul Burks and Andy Bowdoins of the world have done after anyone in their right mind should have realized that the light at the end of the tunnel is an approaching freight train.
It may be helpful to remember that both of them were long time small time serial scam artists moving from one meager failure to another until, more or less by accident they suddenly hit it very big. It isn’t like they had some brilliant revelation that transformed them from a crooked Barney Fife to Bernie Madoff, they just were running a scam that hit huge.
A stone cold pro like Profitable Sunrise’s “Roman Novak” had his exit strategy planned out before he launched his website. Not only did he not use his real name but even his top promoters didn’t know how to contact him.
I don’t know what % of the haul he was able to get away with, but he got away with it. Paul and Andy had never in their life needed to think that far ahead, when all of their previous scams fell apart their problem was always just to find a new scam.
Then there’s the ponzi hype echo chamber, when everyone was getting paid Paul was, for the very first time in his life lauded by near everyone he interacted with for being a brilliant businessman of legendary proportion. Decades of one failed effort after another were swept away in a tidal wave of money and adulation, it’s impossible to guess how far he got carried away on that wave.
There is not and will not be any rationally coherent explanation for what Paul (or Andy) did in the last few months of their scams. The rational thing was to either force an implosion ending the game before the government stepped in or just get the hell out of Dodge.
Or, if Paul is smarter than I give him credit for, he had a series of affiliate accounts set at an 80/20 cashout level pumping money into bank accounts in places like the Seychelles for more than a year.
Then he cooperates up a storm to remove/reduce any potential prison time and after the legal process unwinds he’s a millionaire again somewhere with white sand beaches and no banking treaties.
A couple observations:
1) Controlled shutdown would be even MORE of a conspiracy to manipulate the situation to avoid as much penalty as possible (and screw everybody else).
2) Shutdown via SEC action means Burks got off easy: cough up $4 mil he got (who knows how much he REALLY got) and give up a company that’s worth nothing, and let the Feds take care of the mess… AND he can let people like Disner/Craddock/Kettner blame the government for “ending a good thing”.
3) If he had run off it would be him that gets a bad rap, not the SEC.
4) Nehra was not stupid (AFAIK). He could NOT have missed the signs of Ponzi, not after being lambasted for Ad Surf Daily last time. Same with Laggos (who ALSO sent in a briefing for ASD that he also believed ASD was not a Ponzi).
Evidence seem to suggest they knew EXACTLY what they had been dealing with, with Laggos playing “credit card processor global roulette”.
5) The REALLY suspicious mind have to consider the possibility that Laggos’ split from Zeek may not be as hostile as it seem, but a part of the controlled shutdown, a strategy that had been in place since Caldwell was hired.
6) And that, points to Nehra taking the hit in reputation (failed to spot a Ponzi… again) not because he’s blind… but because he intentionally did not look that way (i.e. turned a blind eye)
7) I am uncertain of Kevin Grimes’ involvement. I was pretty sure Grimes and Reese was NOT on the creditors list from the receiver, but Nehra and Waak were. Grimes may be on retainer, but I doubt he reviewed the comp plan. I *think* Craddock was blowing smoke (but then, Craddock won’t say)
8) Then perhaps Caldwell was the “hatchet man” out to keep the affiliates in line, giving all sorts of PR statements that sounds good but says nothing, while having Craddock go after the critics, which seem to be something they did for FHTM. They probably expected me to be a Zeekhead and would kowtow to their demands.
IM(very)HO, to assume criminal charges will not follow the SEC civil action would be folly.
Simple research of recent similar HYIP ponzi history would indicate it will “probably” take around 18 to 14 months after the emergency civil action for the relevant agencies to bring criminal prosecution.
There is an extremely good reason for the clear delineation between “emergency CIVIL action” of the kind undertaken by the SEC and any eventual “criminal” action.
Due to the civil action the fraud was stopped in its’ tracks and the money was frozen.
Mission accomplished.
That, and the fact the SEC has power only to institute CIVIL action and/or impose administrative penalty/ies explain why there have not YET been criminal charges laid.
It should also be remembered the highly experienced and qualified receiver was appointed at the request of the SEC and he has clearly indicated his strategy for dealing with net “winners”
Prudence would suggest those effected don’t do as they have been doing and “gamble” that he is simply making idle threats, no matter what “logic” would seem to indicate.
Obtaining a judgment against every net winner is good public policy. IN THIS CASE it appears that the law provides a cost efficient way to do that.
You have pointed out one of the motives here, an important one. Paul Burks was motivated by network marketing ideas rather than scam ideas.
The ideas overlap each other, but they’re not similar. Network marketers will often believe they’re doing the right thing, creating profitable business opportunities for other people. They’re mostly blind for the fact that the so called “business” is a scam, and will cause more problems than gains for most people involved.
You will find some similar motives among the others, even among the experienced Ponzi riders / serial scammers. They will fit into a much wider cathegory, e.g. “ordinary people attracted to specific types of (something)”. The “something” is where the wide range comes in.
That’s one of the important nuances I missed in September 2012. People have VERY individual sets of motives and ideas, and they won’t easily fit into “general cathegories”.
The idea “We are talking about a very specific type of “PEOPLE” as in: criminal fraudsters” have already failed. It was introduced in September 2012, where it was accompanied by a conclusion that money was collected for fraud purposes (both ideas supported each other logically).
But we can clearly see the money was collected for defense purposes. The “fraudster cathegory” doesn’t open for organized defense strategies, it has only a limited set of motives mostly revolving around fraud methods.
Yeah, right.
Burks accidentally stole $600 MILLION because he was motivated by “network ideas”
M.Norway, mindreader extraordinaire
Is it any wonder the average man in the street falls for these things ???
Some company delivered the obligatory “compliance course”, the one they introduced around June/July 2012. Grimes and Reese can have been listed as third party agents (if it came from them). But the affiliates actually paid DIRECTLY for the “compliance course”.
Craddock probably told the truth, or something close to the truth, in most of the details. When he mentioned Kevin Grimes, it was probably very close to the truth. Other parts of his story are more likely to be untrue, e.g. his role as an “ordinary affiliate, harmed by the shutdown of a lawful business”.
You probably have something about “Liar’s 101” on your own website, about the strategies that works. One of them is about “half truths”. A good liar will avoid being caught up in a web of unimportant lies, when the truth will work just as well as a lie.
I personally think that Burks was fine with regular MLMs (that never really went anywhere) until someone (Darrel? Dawn? Alex?) had him tweaked the comp plan to introduce the truly Ponzi elements, and that made Zeek Rewards irressistable to the truly vulnerable population.
It could be an accident, or external influence. After that, Burks’ showmanship (magician training) ensured it ran for as long as possible.
That would be Grime’s mlmcompliancevt.com (VT= virtual training, i.e. online video and test)
Hmmm… this one? 😀
http://amlmskeptic.blogspot.com/2012/11/bad-argument-half-lie.html
His “core values” can probably be found within that area. His idea of success was probably about running a “successful” network marketing business for several years, and to perform a controlled shutdown. But Zeek didn’t follow his plan, it had several uncontrollable areas heavily affecting the longevity of the business.
His previous businesses have all slipped under the authorities’ radar, and they were possible to shut down in a controlled manner.
I don’t think my idea is too bad. The problem is that it’s unfamiliar to you, thinking outside a specific “box”. So you won’t add any ideas if they don’t fit within that “box”. And I will consider that to be a problem rather than a solution.
I can fill in much more details building up around that idea (the network marketing motivation idea), making it become much more believable.
ZeekRewards reflected network marketing ideas much more than scam ideas. Network marketing ideas (for the participants)are about “building a business”, i.e. recruiting a huge downline they can earn money indirectly from. They are literally blind to whether the core business is legal or illegal, what matter is whether it pays or not.
It was ENDORSED by the industry itself. Dawn was even elected to be the “MLM Leader of the Year 2012”, if I remember it correctly. 🙂
That was just some samples. I’m able to use visual effects too, e.g. linking to Troy Dooly’s “NMBJ review” from April 15th 2012 (to illustrate the “religious experience” some people had about it). 🙂
I don’t have to be a mindreader, or “invent” too many original ideas on my own. Most of the information is already out there. So you should probably drop mindreader arguments?
Now, now, M_Norway and LRM, you both are on the same side… You merely have different assumptions about Burks’ motivation. And frankly they are NOT that different.
I personally see two largely overlapping circles… one called MLM, and the other called “easy money”.
There are legal MLMs (rare, but they do exist, and they may not be good for the participants except those on top or rapidly rise to top) but that’d be the portion of MLM that’s NOT overllapped.
Within the overlapped section would be people who consider MLM to be “easy money”, as well as Ponzi schemes, pseudo-MLM pyramid schemes, and hybrids / chimeras.
Way over in the other circle, the portion of “easy money” that’s not overlapped, would be really illegal stuff like chain letter, Nigerian scam, HYIP, and so on.
Zeek Rewards is in that overlapped area… it’s easy money, and it’s attractive to the MLM fans, and Burks was able to use his MLM experience to market to that segment. How it got there… did it move in from the “easy money” side or the “mlm” side is almost irrelevant, and I think that’s the difference between your two opinions.
I go back to the fact Burks was offering 1% per DAY
The motivation is irrelevant, Zeek was a HYIP ponzi from the moment it accepted its’ first dollar.
There is simply no factual basis for “assuming” anything other than the fact Burks was running a ponzi and, as has been proven by the documents tendered in court, lying about almost every facet of the business.
“I think” or “it seems” or “in my analysis” have no relevance when compared to the cold hard facts presented to the court.
No one has contested the conclusion there. It’s a simplified conclusion. It will work in some cases and fail in others, but the conclusion itself is correct.
The brain would be occupied solving all sorts of unsolvable problems if it couldn’t use simplified conclusions, so the method has some rational uses. I used a similar method when I analysed some of the information available to be “too vague to draw any conclusions from, there will need to be added more information first”.
That was about arguments like “Bell will do this, Bell will do that”. They were clearly revolving around assumptions about other people’s intentions, and even if they were supported by some information the total amount of informetion were too vague to be conclusive (if we analyse it logically).
Simplified conclusions clearly have a function. It will allow people to make decisions based on partial information, and it will normally solve most situations where we have experience and knowledge.
It can also be the CAUSE of problems. Zeek used that method to trick people into believing in different ideas. It used people’s own simplified conclusions as the most important tool to get people on the hook.
Some of the arguments used by victims were about assumptions about other people’s intentions, e.g. “Why would a business man with 15 years in business run something illegal?”. I can probably list 20-30 other samples, but that one will have to do for now.
The typical “true believer” will use MANY simplified conclusions, and usually invent many of them himself/herself. Some of them will evolve into “strong believers” because they’re repeating the same sets of ideas over and over again. Most of them will avoid opposing information, or reject it as another simplified conclusion.
Fill in some more details into this picture yourself. Simplified conclusions can both be functional and dysfunctional. Wisdom is about knowing the difference, and to be able to make choices about it.
That is some serious meaningless bulls****right there.
It is becoming more and more apparent that every mlm op is, well, scammy. The auto ship the go to more functions the recruit recruit recruit all seem to lead to the same end.
Give us your money and that is the end game. Give me your dough and enter the show.
YIKES!!!
This might be the wrong forum but anyone tracking Oil of Asia? I put in a bunch of money so far. LOL. Can’t find the correct thread for that one. My Zeek buddy tried to get me into that one too. Good after bad money pitched into the pit.
ONE single, solitary example of anyone or anything paying out 1% per DAY WITHOUT being a ponzi and the rest of your post might make the tiniest bit of sense.
It’s already in the “Closed Programs and Scam Warnings folder on the usual suspect HYIP ponzi forums, so your mate is out of luck on this one
Now, now, I kinda get what he’s saying, but M_N simplified a bit too much to the point of being almost absurd.
Everybody make decisions based on what they ALREADY KNOW, mainly by making “connections” between the what they “learned” vs. what they already know. However, such knowledge is not always the “correct” understanding, probably closer to “rule of thumb” than anything else.
And that’s used for “snap judgments” when you need to make an almost instintive decision. It’s like the stuff discussed in Malcom Gladwell’s BLINK.
On the other hand, scammers are excellent in providing just enough clues of truthworthiness to goad people into trusting them (mistakenly, as it turns out).
We can pick holes every which way about “simplified conclusions”. That doesn’t mean the simplified conclusions is a failure, if it works “most of the time”. The trick is knowing what are the exceptions and thus, when to use the more complex conclusion instead of this simple thing.
Spot on.
It’s bad money… it’s a stupid HYIP. I believe LRM posted that one to Realscam’s topic “When times are tough, HYIPs get more ridiculous”.
There are some really stupid ones there. Air Cargo HYIP? 007 HYIP? Gungnam Style HYIP? (And of course, oil of Asia HYIP)
I understand the absurd. I find the rest of it incomprehensible
The problem (not really a problem, but more of a POV issue) is you and I are “seasoned” skeptics / scambusters and we know that 1% per day on a prolonged basis is impossible.
However, HYIPers / fanboys don’t see it that way. They see them as “opportunities”, like “I am early in, and I got paid, so it works (for me)” and they BELIEVE what they saw, and they don’t *care* about the longer time basis.
THEIR “rule of thumb”, or “simplified conclusion” is “HYIPs work if you get in early”, while our “simplified conclusion” is “HYIPs eventually fail, are likely fraudulent form the start, and thus don’t touch with 10-ft pole”.
That’s why there’s forums, “monitors”, and such that announces “new” HYIPs… to fit their simplified conclusion that if you “time” HYIP you can make $$$ from it.
I saw one using “The Simpsons” graphics to advertise itself a few weeks ago. Then there was the “grandma” one.
It goes beyond that, Kasey.
Humankind could not navigate its’ way round the modern world without “making connections” or “assuming”
In fact, when the “making connections” mechanism goes wrong, we give it a name.
We call it “Obsessive Compulsive Disorder”
As you so clearly point out, professional fraudsters know this only too well.
My main points remain.
After a claim to be able to deliver 1% a day “ROI” everything else from there on was irrelevant.
Similarly, to second guess a professional, highly qualified, experienced and court appointed receiver is, at it’s best speculation and, at its’ worst, downright misleading.
Actually, I would call it “gullibility” and/or “prone to conspiracy theory” and/or “prone to superstition”. But your point’s taken.
Still, I think you and M_N are not that far apart, though I think your position can be summarized as “Burks created Ponzi intentionally”, whereas M_N’s position is “Ponzi evolved from prior failed attempts at MLM”. There is an overlap between the two superficially dissimilar ideas.
And let’s not get into “what will Bell do” too much. 🙂 Hoss and M_N already hashed that over umpteenth times. 😀
No Mas
To be clear, I’m saying
“we don’t know AND there is no reason to assume any other reason than that which is immediately apparent”
I prefer to leave the interpreting of known facts to the fraudsters and their apologists.
To suggest or imply Zeek COULD have somehow evolved from a legitimate desire to create an MLM plays right into the hands of those whose business it is to gain sympathy for Burks and divert attention away from the fact a 1% per day “ROI” is impossible to attain.
But technically that was what happened… Several auctions were combined under Zeekler flag and Darryle Douglas was brought in (with his own penny auction MyBidShack) and they “tweaked the comp plan” and out came Zeek Rewards.
There was no mention of profit sharing with bid purchases in the earliest hawking of FSC Auction, and earliest mention of Zeekler. Here’s some mumbo-jumbo from Dawn “burger” Wright-Olivares, i.e. “HippieDiva” herself:
http://www.pennyauctionwatch.com/forum/beta-testing/2317-fsc-auctions-wants-you.html
(Scroll down or just “find” HippieDiva)
Burks created a HYIP ponzi from day 1. The original version of the auction had no revenue. The original 1%/day ads were sccreaming HYIP ponzi. The attempt at polishing the toilet bowl didn’t come until after they hit momentum.
M_N may have one point right. Burks and crew knew it was a ponzi but didn’t expect the growth. The idea around controllable destruction makes sense. I.e. Burks knew it was a scam from day 1. It got out of control. He couldn’t kill it in time.
Also, where is DD? He had a convenient disappearance didn’t he?
Actually, technically that’s what they SAID happened.
To believe that story, one then has to say “everything” else turned out to be a lie, but THAT was the truth.
The idea will work in some cases and fail in others, depending on what you’re analysing. But the statement is true in itself when analysing scams like Zeek.
I haven’t exactly been analysing whether or not Zeek really was a scam. I thought most people already had agreed om that a long time ago? I came to that conclusion more than a year ago. I didn’t even know people were stuck at that type of analysing 7-8 months after the shutdown.
Simplified conclusions won’t give any meaningful answers if used in areas where you NEED to analyse different details.
I used the argument “Bell will do this, Bell will do that” as an example, for assumptions about other people’s intentions. When methods like that are being used, people will typically use their own confirmation bias and add factors as “truth” without really checking them against other factors.
“Strong believers” will typically repeat the argument over and over again rather than analysing it logically and from a neutral viewpoint, putting it into their “belief system” rather than putting it into a logical “box” (any type of thought system where things can be reorganized and sorted logically).
From my POV, his former business projects were also some type of network marketing scams. He was selling people’s own ideas about having an internet business to non-recruiters, and about “building a business” to recruiters. Both are ideas people can be willing to believe in.
As far as I can see, that was a simplified conclusion? You didn’t even have to back it up logically, it derived straight from your “belief system”? 🙂
Err, and that would be because we ARE talking about Zeek, which WAS a scam.
There is no point discussing whether “The idea will work in some cases and fail in others”
Again I say, anyone who offers to pay an “ROI” of 1% per day is a fraudster.
There is no need to indulge in mental masturbation discussing methodology for determining fraud or “what will work in some cases and not in others”
Readers who use the “1% a day is fraud” yardstick will have no need to be lectured on scientific research methods.
Likewise drawing ANY conclusion differing from the receivers’ public stated position is mere speculation ESPECIALLY when such speculation fails to take into account recent (and not so recent history)
I’m actually analysing the upcoming events, e.g. the chances for clawbacks. But that includes analysing the defense strategy too, or the details that potentially can be identified.
The Ponzi evolved from the “core value system” in network marketing, where people’s ideas about “success” revolves around recruiting huge downlines and “building a business”.
In that system, whether or not an opportunity is paying is more important than legality issues. People will gladly ignore common business logics like having customers. People can even be elected to “Network Marketing Leader of the Year 2012” in that system, while the business itself is shut down 3 months later as a scam.
The Ponzi scheme evolved from that system. It’s about a “belief system” rather than about a logical one.
Oh, for goodness’ sakes.
The ponzi did NOT evolve from “network marketing”. In fact, the that particular type of fraud didn’t even evolve from Charles Ponzi himself.
As for Zeek Rewards, which, after all is the subject under discussion, it was not a ponzi OR a pyramid/endless chain recruiting scheme, but included elements of both.
Which is precisely why we could expect any criminal charge eventually laid to be of “conspiracy, wire fraud, fraud and conspiracy to commit both” and NOT charges of “running a ponzi” or “running a pyramid”
“The Ponzi” was about the Ponzi element in ZeekRewards, not about some philosophical theories about where Ponzi schemes derives from.
It was about WHY do people add an element like that, but that is outside the area you are covering.
A business or a scam derives from someone making decisions about something, and people will usually repeat what they always have been doing or copy some other people’s ideas. Zeek was largely a copy of ASD in some central parts (according to people more familiar with ASD than I am).
“WHY” is a part of normal analysing. It’s not a scientific method or anything like that. It’s more typical for journalism than for science.
Prevarication is part of normal behaviour when someone is pretending to be an expert on a subject in which he or she has little or no direct knowledge or experience.
And ??
This may be the most excitement some of “us” will get in the course of day, so…
who all is “we’re” ?
Hoss and M-N?
Somehow I still think you two are NOT that far apart.
Ponzi is very much like a pyramid, except pyramid requires direct recruitment, and Ponzi does not. (i.e. Ponzi’s more passive).
Zeek’s disguised Ponzi is somewhere BETWEEN a pyramid (give us money, then recruit to get paid) and true Ponzi (just give us money, and you get paid [when more people join])
MLM is always on the edge of pyramid scheme in that they emphasize more recruitment than sales.
“Network marketing” can be “corrupted” to the point where it becomes a pyramid scheme, and if you corrupt a pyramid scheme by substituting busywork for recruiting, you end up with a Ponzi schemee.
*How* did Burks come up with the Ponzi scheme? We don’t know, but it *could* have evolved from normal MLM and Pyramid scheme. IMHO, of course.
I think your real question is did he just kept tweaking it and didn’t realized he crossed a threshold into Ponzi, or did he realized it’s a Ponzi but he just don’t give a ****?
It appears to me as if M-N and Hoss are coming at each other with differing points of view… not engaged in a pre- agreed arrangement to engage in a open forum to educate the general public on how to be open minded.
I didn’t realize that a Ponzi scheme is a rocket scientist type thing to refigure out how to”do”, each and every time it is figured out.
@Naabo — I think what I’m trying to say is that Burks didn’t wake up one day and say “Today I’m going to create the mother of all Ponzi schemes in terms of number of victims.”
@K.C. Maybe he was a woo woo law of attract believer, and said, every morning upon awakening, “Today I’m going to create the mother of all Ponzi schemes in terms of number of victims.”Or, maybe he just got lucky. You know that happens.
@naabo
I would have asked a lawyer, and let him estimate the different chances. It’s not possible to draw any clear conclusions here. A lawyer can normally be inexpensive if you use him as an advisor.
It’s also possible to ask the Receiver directly (info @ ZeekRewardsReceivership.com).
Logically, if they try to claw back too small amounts, the costs will exceed what they’re able to claw back, costing the estate money rather than restituting lost money.
Frome one law firm’s clawback page:
But I don’t know what they mean with “large profits”. In typical Ponzi scheme cases, net winners have often made millions in profit, hundreds of thousands or tens of thousands.
BTW, clawback is not a “punishment”. It’s simply about returning the victims’ money. It’s for restitutional purposes.
Exactly. The whole purpose of the receivership is to make everyone as “whole” as possible.
The only burr in my saddle is net winners like the guy who posted about knowing there was an open appeal to contact the receiver and work something out, but finding it acceptable not to based on not having personally received anything from the receivership.
To me, that just encourages people to join these things to make a profit on the low end, even though I think 20,000 is a lot of money. Jump into this ponzu, jump into another, pretty soon that low end profit adds up, and no fear at having to return any of it, and no ned to feel an guilt.
It sticks in my craw, and I won’t apologize for it.
That guy can claim ignorance all he wants, but its not a strategy that will profit him if Bell files a Defendant’s Class Action.
Hmmm… Can Bell separate out the victims into two classes, i.e the net winners and the net losers? And only represent the net losers? Had that ever been done before?
From the “Letter from the Receiver” dated 3-1-13 :
This seems to be implying that the receiverships purpose is to recover money in order to REFUND net-LOSERS.
Unless I am not understanding your question or the context of your question. One thing I like so much about Oz and his blog here is Oz’s ability to keep things simple. And stright to the point.
The case styling would probably be the RVG Receivership (Plaintiff) vs Every Net winner (“the Class Defendants”.) Meanwhile The “victims” (net losers) file proofs of claim. In this way the victims become creditors of the estate and are entitled to a pro rata distribution of whatever estate assets Bell has marshalled or can recover.
So in response to you…. the Receiver will be attempting to claw back funds from net winners on behalf of the creditors of the estate….who are the net loser victims.
Yes, it has been done before. Bankruptcies do this all the time and Receiverships operate similarly to Bankruptcy Trustees. In fact if Bell has any difficulty forming the Defendant Class he may take RVG into Bankruptcy where the rules are somewhat different and give the judge more latitude in formulating equitable remedies.
In effect yes. That is what he will be doing. He will attempt to recover money for the estate, which will be distributed to the creditors of the estate. It ends up permitting a partial refund of the net loser’s initial investment.
Bell informed the Court in his Preliminary Liquidation Plan that he did not anticipate the need to file for bankruptcy. This suggests he does not see any hard impediment to forming the Defendant Class.
The receiver in the case of the AdSurf Daily / Andy Bowdoin HYIP ponzi fraud refunded verified victims 100% of their losses, and has just received court permission to institute a second round of refunds to those victims who failed to enter a claim by the original cutoff date.
From what I could find there was no Receivership in ASD. Unlike Burks, Bowdoin did not step down voluntarily.
There were criminal siezure and forfietures that made up the bulk of recoveries but those were pursued against bank accounts not people. Bowdoin faced criminal charges right out of the gate. Also for reasons I can not adequately explain, people were told not to file proof of claims with the claim administrator by their uplines,,, and did not.
Since there were so few claimants the claim administrator named Rust Inc. (not a Receiver) was able to pay the first claimants 100% and that is also why there is a second round of proofs of claim and remissions.
The money was siezed by and forfeited to a government agency (FTC?) which is why this refund is called a remission. As far as I can tell there were no clawback lawsuits against any individuals. Why that should be so I do not understand except the FTC (?) was running the show not a Receiver.
That’s the story I got from ASDUpdates.com The way these two situations are being handled are by all appearances quite different.
This is where we run into difficulties comparing one fraud case against another.
Although you’re correct in that Bowdoin did not step down voluntarily, the original freeze and asset forfeiture in both cases were accomplished by means of a civil forfeiture, as opposed to criminal forfeiture and both of them took place before any criminal charges were laid.
In the ASD case the initial complaint was handled by the US Attorneys’ Office and the subsequent return to victims organized by The Department of Justice’s Asset Forfeiture and Money Laundering Section, the U.S. Secret Service and the U.S. Attorney’s Office for the District of Columbia established a program to return the fraudulently obtained money to victims.
It should be noted here:
* Bowdoin had transferred approx $80 million into accounts held in his own name
* The initial number of verified “victims” of the ASD fraud identified at the time was only around 8400, allowing their losses to be made whole
* The numbers net losers thus far identified from the Zeek membership lists currently stands at around 800,000 from memory.
As I understand it, at this stage there are no estimates of the number of that 800,000 who will eventually be accepted as being “genuine” and eligible for any sort of return of their losses.
At this stage, I see no sense in “assuming” Mr Bell will be anything but MORE diligent in his efforts or “assuming” he is being anything but candid in his very publicly stated intentions to pursue net winners of the Zeek fraud.
Well if this is the case then there has been no reason to pursue clawback litigation in ASD. Everyone who lost money and filed a claim was made whole. That is very different from the situation at Zeek and there is no adequate comparison that can be made between the two.
We can go ’round and ’round the mulberry bush discussing differences and similarities.
My original point remains:
other than pure conjecture, why would anyone assume Mr Bell intends to do ANYTHING other than what he has publicly announced and why would ANYONE not exercise prudence by either consulting a “real” lawyer or simply not spend any of their gains.
Mr Bell CAN demand clawbacks form anyone he deems (with the courts’ approval) to be a “net winner”
This is ESPECIALLY likely when you recognize the SEC involvement in this matter is as part of the same Presidents’ Financial Action Task Force on Money Laundering responsible for the ASD/Bowdoin prosecution.
The times are a changin’ when it comes to the way HYIP ponzi fraud/s are being handled.
IM(very)HO, anyone who underestimates the intent of the ALL of the authorities in this matter is setting themselves up for a massive shock.
I do not have any desire to circle the Mulberry bush, in fact I would prefer to bury it, but before I do I should point out that it was you who suggested that looking at other cases would be more fruitful than understanding and discussing Bell’s actions in Zeek.
I hoped your approach would be worthwhile, so I looked at ASD.
After doing so I conclude that the procedures used in dealing with the ASD siezures, forfeitures and remissions are completely different and largely irrelevant to what Bell indicates he will be doing in Zeekler… which is to say that if anyone wants to understand what Bell intends to do as far as clawbacks are concerned they must understand what is occuring with Zeekler, not what happened in ASD.
This might help clarify some of the discussion here:
http://www.digtriad.com/news/local/article/282613/57/2WTK-People-Loose-Zeek-Money-Even-After-Its-Closed
This is consistent with Bell’s stated intention of using a Defendant Class Action.
A “pretty low” threshold could be $500 or less. Legal and admin costs can be spread over tens of thousands of people, making those expenses negligible on a per capita basis.
What this means is that including a person in the Class is hardly more expensive than what it costs to print out a copy of the Summons and Complaint and serve it. Service cost varies in different locales but with a volume discount the average would be less than $175 per head.
Now he has released more specific info, and he has also contacted more of the net winners by e-mail?
That’s an important legal step. The party who has a claim has to inform the other party about it, and potentially try to solve it outside court before it can be handled in a court as a valid case about the individual claim.
Without that information, the case could only have been about more general aspects of the case, e.g. whether or not Zeek was a pyramid or Ponzi scheme, whether or not net winnings were fraudulently transferred to the net winners. That’s not “individual”, and can’t be used by a court to solve individual claims.
Right Norway. What does Bell do about the 10,000 undeliverable, unreceived and unopened e-mails? How do those get “solved” using your mis-logic.
Then comes snail registered mail, I suppose.
Well you guys seem to be sticking to your guns on this
Do you believe that print ads in trade magazines, the Receiver’s website, a conference call and 16,000 e-mails directed at the net winners shows the Receiver’s willingness to “solve” the issues? I do and I think the judge will also.
When the Complaint is filed a few months from now it will state a specific dollar demand for each net winner and state that good faith attempts to “solve” the issues were made by the Receiver…and that all who wanted to settle had a chance to settle and only those who refused to “solve” the issue ahead of time are now included in the Complaint. The Complaint will be against the Class.
The problem for any Joe Schmo is this. If he is in court arguing that he should not be part of the Class because he did not receive notice of the Receiver’s offer to settle he can then be apprised of the Receiver’s demands and offered the chance to settle.
Its circular and avails the net winner nothing to make such an argument. he will be included in the Class.
The passage’s attributed to Bell appear to have been transcribed from a conference call held four months ago so it is not new.
As far as the purported 16,000 e-mails go, I have heard no description of their content but I have heard that “something” was sent. Lets not assume there was a demand for a specific dollar amount.
The e-mails could just as well have been a restatement of the Receiver’s website information, which as we know is a simple invitation to correspond and settle or discuss repayment rather than face litigation.
Where did you find that information?
Before using e-mails as a communication method, the Court will normally have accepted it as an “acceptable method” based on the nature of the case (e.g. e-mails were the common methods used prior to the shutdown).
If you have added 10,000 undeliverable and unopened e-mails from your own imagination here, then we’re talking about hypothetical problems.
The method has probably been accepted by the court. People who don’t respond to that method will probably be contacted in other ways, e.g. by snail mail if the address is known.
“Mis-logic” is normally about using wrong types of information or applying the wrong types of logical rules.
I have used the logic that the Receiver will have to INITIATE claims against net winners on an individual basis, to make the individual cases become “solvable in court”. And now he HAS initiated 16,000 more claims.
That logic may or may not be flawed, but adding 10,000 hypothetical problems is certainly a flawed method.
Try to focus on your own logical methods first? 🙂
Its empirically derived. I have done this a hundred times and even with the best available technology for avoiding spam blockers, and even being white listed and having the freshest and most accurate e-mails available the open/delivery rate is no better than 56%.
Bell has e-mails that are six to seven months old which means that 10-20% of them will be bouncers. 10,000 opens out of 16,000 is approximatel correct for the received and opened rate.
You can adjust it up or down, but it still does not change the fact that NOT EVEN CLOSE to all the net winners will ever be notified this way.
That statement is complete horse manure and consists of a rank guesswork and a hopeful narrative that you concocted on the fly. work. In the present era, E-mail is not a form of court approved communication because it is too uncertain.
“Probably” is a weak word. Give me facts. Here’s one…Bell has sought no permission from the Court to communicate by e-mail.
Right. Whatever.
The number 10,000 +/- is valid and useable in the context of the discussion. You may use X +/- if large numbers distract you.
If X people out of 16,000 do not receive or open the e-mail and you have no way of knowing exactly who those people are and can not prove they received your correspondence and the delivery rate is so poor as to be no better than sky drops then bulk e-mails are completely inadequate to the purpose you ascribe to them.
Use X, Use 1,000, or 10 it does not matter. E-mail does not work to the purpose you suppose because a large percentage will not be received. How large? X Large.
He has sought permission to use e-mails and other methods to contact net losers and other creditors?
It wasn’t about the number of people, but about the METHOD. You immediately added problems from your own imagination, and considered it to be worth drawing conclusions from it.
Of course there will be unanswered e-mails here, but then we should normally check other methods available (or even better, check what the court documents can tell us).
Since you were pointing out what you saw as “mis-logic”, I gave you a similar response. There’s nothing wrong in that, is it?
I haven’t had time to check the details, but it can be found in ZeekDoc138-main.pdf
For other people …
The court documents can be found here:
https://sites.google.com/a/asdupdates.com/files-website/home/zeek-rewards-sec-case
Troy Dooly also have most of the documents collected, but I don’t have a link to that page right now. I can add it if people really are interested.
Are you asking a question or stating a fact? If you have proof of anything provide it. Otherwise.. the statement that Bell has sought permission is incompatible with Bell has already sent…
You do get that don’t you?
There is no misconnect when using an estimated quantity to compare two things, which in this case was the total e-mails Bell sent versus the magnitude of those that were likely to be undeliverable, i.e., 10,0000.
From your responses its obvious you have no idea what I am talking about. So ok. Lets move on.
I hate to break it to you sport but “net losers and other creditors” do not comprise the subset of net winners. Ergo even if the permission you say was sought was given it would not apply to net winners.
For the two hundreth time if Bell wants to bring suit against a net winner he must use normal approved methods, not e-mail.
The first step is to inform the other party about the claim. E-mail can be an “approved method” like any other methods, but not as the ONLY method.
We’re not talking about suing people here, but about INFORMING them about the claims, give them a chance to be heard and to solve it outside court. We will probably find something about it in the court documents.
Before you can sue people, you should normally have done some attempts to solve it outside court first. E-mail can be a “well calculated method” in this case. You can’t send a claim directly to court.
They don’t need to be in exactly the same subset, do they?
We’re talking about the communication methods here. If 2 different subsets have relatively similar rules, then allowing one of them will allow both.
Net losers and creditors are not net winners. What applies to net losers and creditors does not apply to net losers. View it however you like, call it whatever you want. Visualize it. Understand it.
You are making way to much of this aspect of things as if we are involved with a dispute under the Uniform Commercial Code and we have two entities arguing over payment for goods or services In such a case the judge will definitely want to know there has been an attempt to resolve the issue before he will hear arguments.
Its minor commercial BS. Every day stuff. Bell is not operating in that regime. This Receivership operates more like a BK Trustee and closer to bankruptcy rules. These give the Judge and the officers of the Court (Trustees and Receivers) far greater latitude to deal with the thousands of persons, claimants and debtors that are involved.
So long as the person whose property is subject to clawback is notified and afforded the opportunity to object before he becomes a class member and before a money judgment is taken the timing and form of the demand is pretty much discretionary.
The point is, will the net winners have an opportunity to know the exact amount the Receiver claims and have a chance to settle or pay before a judgment is entered. Yes they will.
No, it isn’t about that. It’s about whether or not the individual claims can be solved in court, or if the court only can make general decisions.
Individual claims will have to be SPECIFIC before a court can make any decisions. Both parties have the same right to be heard. Negotiations and disputes should normally be tried to be solved outside court first. Failed attempts to solve it can be solved in court.
Are you sure you’re using the correct logics here?
* The Judge should normally be NEUTRAL?
It seems like you’re using some kind of person-oriented logics here, e.g. “since the Receiver has been appointed by the Court, it will obviously rule mostly in his favor”.
You can’t expect a similar logic from me. It would have been rather meaningless to handle cases in court from that viewpoint, they could simply use a friendly Judge making all the necessary decisions in favor of the Officers of the Court.
I will consider that idea to be flawed. I have never shared the same idea or similar ideas, so I haven’t included them in any of my own viewpoints either.
What on earth does “M_Norway” logic have to do with the matter at hand ???
To quote someone who DOES know and is not relying on “logic”
Unlike bloggers, a court appointed, experienced, professional receiver deals in legal reality.
When he states publicly what he/she intends to do, he/she is not flying kites attempting to scare people.
He/she KNOWS what he/she can do.
You are speaking in Swahili. I have no idea what you are talking about.
More Swahili.
Whoever said he was not neutral? He will make sure that the process is handled according to law.
I never said any such thing. However a Judge very often relies on the representations of a Receiver as Officer of the Court.
If Bell represents that he has made a good faith effort to settle with the net winners the Judge will (subject to valid objections) take him at his word.
Swahili.
Bell and his attorneys knows this business. If there is the slightest question as to how he should proceed he will ask the Judge for guidance and approval. So far there has been little cause to ask for anything at all.
That’s probably because you’re REPEATING the same quote? I can’t solve that problem for you. 🙂
For a case to be solvable in court, it has to be a valid case within the Court’s jurisdiction. “Valid case” will normally include some procedures, e.g. make some reasonable attempts to inform the other party about the claim and some reasonable attempts to solve it outside court (if possible).
The 16,000 e-mails are probably an attempt like that.
We covered this earlier. Its as if you have time travelled backwards and have here repeated everything you said five hours ago word for word.
Do you even blink?
The court has made no formal finding that net winners were the recipients of fraudulent transfers. None. Before you drone on that Doc 4 proves the transfers were fraudulent stop…. It does not.
It freezes assets and generally empowers Bell to find and recover assets that belong to the estate. It does not name specific assets. To recover in a clawback suit, Bell must allege and prove (subject to objections) that net winners received fraudulent transfers.
So…. at present, even though there is a prevailing assumption that Joe Schmo and friends have received fraudulent transfers, there is not yet a finding by the Court that confirms this. It follows that there can be no bona fide dispute between them until Bell establishes this.
I believe this explains why Bell has only generally outlined the situation as he sees it and why he has only suggested that Joe Schmo and friends contact him and discuss returning some amount of money that both parties can agree to.
Until the Court finds that Joe Schmo and friends are recipients of fraudulent transfers Bell has no bona fide interest in funds that are in the possession of Joe Schmo and can no more demand payment from him than he can from you and I.
Let me amend that. He can demand anything he wants but he will not win if an objection is raised. He needs to 1. prove that net winners received fraudulent transfers and 2. the dollar amount of net transfers. Until #1 is achieved demanding payment is a waste of time.
I believe many of the net winners have solved it outside court without raising any disputes about it? And that’s the normal way to solve civil claims. Or there can have been disputes, but solved outside court.
It’s around here I’m losing you. From your viewpoint, the claims will first have to go to court and be solved in court? My viewpoint is that the claims should be presented and solved outside court (where that is possible), but they will have to be INITIATED by the Receiver. Unsolved claims can be solved in court.
I’m looking for what I consider to be “normal solutions”, and the 16,000 e-mails are one type of “normal solution”. It’s perfectly normal to use e-mail as an attempt to communicate with people, e.g. as the first attempt. Snail mail is another “normal solution”.
Well of course most disputes are resolved without ever going to court and when they do its still relatively rare that a case goes all the way to a trial and decision. They almost always settle but what is normal is relative. The courts are full of disputes that have not been settled which is normal as well.
“Solved” is a mathematical term, not a legal term and your use of it only confuses the issues. Courts do not solve anything. They administer the law. Courts hear evidence, rule on procedural matters and by the power vested in them sentence murderers to prison…. but they do not “solve” murders.
US Judges do not investigate as they do under legal systems derived from the Napoleanic Code. The US uses the adversary system and that process establishes the truth insofar as a Judge and jury can understand it by a dialectic.
You may need to solve a problem with a noisy neighbor and decide that the way to do that is to bring suit. You need some quiet! However the only thing that will bring you quiet is if the neighbor shuts his mouth.
That is what solves your problem. the Court does not solve your problem. The Court is not a problem solver. It either rules with you or against you. That is all it does.
Unless net winners communicate with the Reciever’s team and resolve the issue of how much they will return to the estate they will be sued. They have not been sued yet. They have received multiple invitations to contact the receiver and work out a discounted repayment plan. If they do not do so the Reciever will sue them.
First the Court will rule that net winners were the recipients of fraudulent transers. Second, the Court will rule on a motion to form a class. Third he will rule on the amount owed to the estate by each class member.
There may be a fixed discount offered along with the service of the Summons and Complaint, but if people do not avail themselves of the settlement opportunities offered and I do believe the early participants will get the largest discounts, then they will have a judgment entered against them.
That’s the way I see it.
No its not really normal at all. Its very abnormal. Normal is one plaintiff and one defendant. Abnormal is one plaintiff and 16,000 defendants.
The party who has a claim is normally the one who has to present the claim, INITIATE the process? Both parties CAN do it, but a creditor can’t expect a debitor to contact him. He has to initiate the claim himself in most cases, not by sending “invitations” but by sending specific info about the claim.
“Multiple invitations” is one letter posted on the Receiver’s website April 1st/2nd 2013?
Kenneth Bell hasn’t exactly impressed me with his communication skills, but he has actually started to improve them. The digtriad interview in post #317 was a step in the right direction.
I already explained this and do not trot out Doc 4 again. Bell can have no legal claim against anyone until the Court rules that net- winners are the recipients of fraudulent transfers.
Until this step is complete he has no ability to get a judgment and if he can not get a judgment then he will not waste time making formal demands.
Bell can advertise his willingness to settle at any time and in anyway he sees fit, and that is all that he has done. He can rightfully say we think you us $X, we can prove it and we are now offering to settle with you on the best terms you will ever get, but he can not at this point say “you owe me,” because the Judge has not ruled on the fraudulent transfer issue yet.
That’s all you may have seen but as you know he also sent letters and he also represents that he has put notices in ponzi/pyramid/MLM chatrooms, on websites and in various trade magazines. So yes he has and will continue to advertise his program and attempt to get voluntary responses.
In another 60 days he will go to court get a finding that net winners are the recipients of fraudulent transers. THEN he can make a claim/Demandthat they owe the estate a specific dollar amount. Get it yet?
Forget what you think you know. Its wrong.
He has already collected some of the fraudulently transferred money. The “fraudulent” part is about RVG, it used other people’s money to pay net winners, pretending to be a profitable income opportunity generating a daily profit share from the penny auction.
I believe you’re using wrong types of logics there? If money has been fraudulently transferred from RVG, he won’t need a judgment specifying that it also have been fraudulently received by someone? Most of the financial institutions responded to the “fraudulently transferred” argument.
U.S. lawyers seems to have a very complicated thoughtset? They must first “invite” other parties to negotiations, and first then they can reveal what the negotiations are about (the specific details)?
If I had been “invited” to negotiations, my response would have been something like this:
“Thanks for the invitation. Please send me some more info about what the negotiation is about, specifying the most important details?”
The method sounds too complicated to be real.
The Receiver could sue even without pre-notice. Generally speaking, notice before filing a complaint is the most effective path both at recovery sans lawsuit and to demonstrate in court that a demand for payment was made.
Posting on a website and sending out an email to all affiliates is a form of notice, but doesn’t address all cases. I know many affiliates who used a temporary email just for Zeek and have since shut it down. There is the usual issues of undeliverable emails / spam filters. There are cases of LLP’s and other business structues set up for an MLM business. There are cases of family & friend’s SSN’s being “borrowed” in order to build multiple positions.
All of these and other cases means that the correct way to send notice is to send a letter to all 1099 recipients. The cost is relatively small. IMHO, the likely reason the Receiver hasn’t done so is that he doesn’t intend to sue everyone.
The example I keep posting here is that it is unlikely someone who was a $100 net-winner will get sued. A $100,000 net-winner will undoubtedly get sued. $1000? $10,000? That is the question most are trying to ascertain.
Moral issues aside, this is a simple utility/probability theory issue at this point (both for Receiver and net-winners).
From the PPBlog regarding Bell’s Apr 30 filing:
Bell — to date — has recovered $36,000 from Zeek net winners in prelitigation settlements
Wow, that’s not a lot of settlement. Perhaps some are still in negotiation, but looks like the “top 1000 net-winners” (to pick an arbitrary number) are not giving up their $ voluntarily.
Wonder when we’ll see the individual lawsuits against the Zeek officers?
Not a Judgment (!) a FINDING.
Records show that all below received checks from Rex Ventures: A butcher. A baker. A candlestick maker. The IRS. The County Tax Commission. Zeekler’s Landlord. Sally the secretary. Bill the repairman. Trudi and Ralph. John. Janice. Rudi. Barbara’s Hair Salon. Acme Document Co. Bank of America. Landis Catering. Ky Cho.
Who received fraudulent transfers?
Pick the best answer and explain why?
Some people agree to pay back the estate. This proves they DID receive fraudulent transfers.
Some people refuse to pay back the estate? This proves they DID NOT receive fraudulent transfers.
“Fraudulent” is when RVG hasn’t received any equal value in return. Monies used to pay for goods or services are part of a normal business operation.
That will also answer your next post (wrong type of questions).
Some of the professionals more directly involved will potentially face disgorgements of fees, e.g. attorneys. The Water Boy and the Landlord will probably be considered to be “normal business activity”. Sally the secretary received salary from normal business activity, but some others were probably more directly involved.
Do you know the content of the e-mail Bell sent to the 16,000? My guess is it reiterated what is on his website. Do you know?
Not all 1099 recipients are net winners.
He may in most circumstances send Legally required Notices via US Post. He may correspond via any method available, including demands made by letter or e-mail. He must provide full blown legal service for Summons/Complaints and Subpoena’s.
He has not made hard demands at this point because there is no way to enforce a demand until the Court FINDS that net winners are recipients of fraudulent transfers. Right now he is playing softball and giving people a chance to settle voluntarily.
Hardball begins when the “60 days” are up. Bell has stated his intention of pursuing a Defendant Class Action.
For that reason A “pretty low” threshold for inclusin in the suit could be $500 or less. Legal and admin costs can be spread over tens of thousands of people, making those expenses negligible on a per capita basis.
What this means is that including a person in the Class is hardly more expensive than what it costs to print out a copy of the Summons and Complaint and serve it. Service cost varies in different locales but with a volume discount the average would be less than $175 per head.
Let’s be realistic, once served, people will not respond and they will have a judgment entered on them by default.
You did not answer the question.
Here’s the most correct answer to the Question: The net winners.
Everybody on the list can deny that they have received fraudulent transfers (some correctly and others incorrectly) but only Trudi, Ralph and John are net winner affiliates and they also contend that they provided goods and service in return for commissions and that the SEC illegally shut Zeek down… etc)
This is why Bell will ask the judge to FIND that by definition a net winner is the recipient of fraudulent transfers. It conclusively settles all at once the various potential arguments that could be raised by a so many net winners individually if done any other way. Such a finding is binding on ALL 16,000 net winners.
Once accomplished Bell can DEMAND net winners return funds because the Court will have conclusively found that they owe it (dollar amounts to be settled and resolved separately.)
There are two basic elements:
1. Does a net winner owe the estate money?
2. How much does he owe?
Issue #1 need only be decided once….and should be before Bell demands an amount.
The logics used in those statements were flawed.
The conditions in those statements don’t prove what you claim they do. None of the statements can be used as a valid answer.
“Fraudulent transactions” are about transactions from Rex Venture Group to other parties, under certain conditions. The fraudulent part for net winners (as victims of the fraud) will “normally” be the net winnings.
“Some people agree to pay back the estate. This proves they agree to pay back the estate”. It doesn’t prove anything other than that, does it? It can also “prove” they have been in contact with the Receiver about it, if you’re able to back that up with relevant information.
Are you referring to the “Trudy Gilmond / Kellie King” motion here?
From my viewpoint, that case is pure “strategy”. When people are playing more stupid than they can be expected to be, look for some other motives and intentions to explain their actions.
The strategy can later be used as a defense against being involved as “co-organizers”. They have voluntarily revealed what an investigation would have revealed anyway, as a proof of “good faith”. They are simply creating “evidence” they can use to effectively fight criminal charges.
Other than that:
* recruiting people to a Ponzi scheme is NOT an ordinary business operation, e.g. an exchange of values. Being paid for it is a fraudulent transaction.
* posting the daily ad had too insignificant impact on Zeek’s results to be counted as “value”.
* giving away sample bids or spending bids in auctions aren’t typical business activities.
If they can prove they added real paying customers to the auctions, that will have some value. But Zeekler wasn’t exactly very profitable, so the value will be very low. But it can be used to defend marketing expenses.
Defendant class action lawsuits save costs in proving the similarities of the case, i.e. Zeek was a ponzi, money transferred was fradulent, etc. However, the case against each individual as far as net-winnings received, etc. requires individual treatment. So the costs are still high to conduct a defendant class action against “everyone”.
What is more likely is there is a threshold, say $25k net-winners and above. We don’t know what that threshold is. Your comments here keep ignoring the utility factor that there is a threshold, we just don’t know what that is.
Also, if cost of service is low, cost of a US letter is even lower. Why hasn’t the Receiver sent the ‘intent to sue’ letter to everyone? Unless he doesn’t intend to sue ‘everyone’.
M_Norway: He has already collected some of the fraudulently transferred money.
Do I have to explain why your own statements are contradictory?
The Point is this. AS of now, when Bell collects money it is NOT because he has proven that an affilliate owes it. It is not because he has proven that they are in possession fraudulent transfers.
But let me refer you to a friend of mine who said “Some people agree to pay back the estate. This proves they agree to pay back the estate”. It doesn’t prove anything other than that” M_Norway.
Thanks for making my point.
Not to them particularly, but they illustrate the point. Anyone with money to pay a lawyer can come in into Court and slow or stall the effort Bell is making. Its irrelevant what Trudi argues, since John, Bill, Ed an Bill can argue something else, and Jennie can argue something else and on and on it could go.
Recall there are many millions of dollars out there among the net winners that can be marshalled to drag this out forever. If one argument loses, send up another in the name of another net winner. Its like a many headed Hydra and if Bell is going to be successful he has to put a stake in the heart of this thing.
The way to do that is to serve Notice, so that anyone who thinks that net winners are not subject to clawbacks can have their say and then let the Judge Rule.
Well lets face it. Printing and mailing has to be about $3 a head times many thousands of people so unless Bell thinks it will yield results he would not do it. He has not done it.
My thoughts would be, Why spend the money when the only people who are unaware of what is going on here are either willfully ignorant or too dim/old/sick to go to the mailbox anyway.
I mean suppose he sends out 50,000 envelopes how many people will he reach that are already unaware? and how many will settle anyway? Very low. Not worth it.
Don’t confuse the letter cost of a relatively informal correspondence from the Receiver demanding payment or threatening legal action with the much more expensive cost of legal service of the Complaint/Summons or subpoena.
I do not know who he has sent letters to other than the original 1200. I thought he had only sent e-mails to 16,000 people. What letters are you speaking of?
Whatever you say mate, but you just keep repeating yourself. If you can not imagine how all parties can be brought in under one umbrella then you are not trying very hard, or more probably do not want to believe it.
The ONLY thing that makes net winner A any different than B is the dollar amount of his winnings…and you really think there is no way for the American Justice system to deal with that except by having 80,000 individual lawsuits or hearings?
Bell said it is “pretty low” I speculate it could be as low as $500 given the economies of scale in the Class Action and Claim Resolution procedure Bell indicates he will use. If you think its $25,000 then of course you are entitled to that opinion.
Like I said processing the guy with a net win of a dollar costs nothing more than the net winner with $25. Its the internet baby and its scalable.
I would rather have tried to improve my own softball skills. That game has less experienced players than hardball, and should normally be easier to win.
“Winning” from his viewpoint is probably to get as many net winners as possible to accept voluntarily solutions. The 1,200 subpoenas was a hardball strategy, so it didn’t belong in the game. He received some penalties for that strategy rather than scoring valuable points.
He can improve his softball strategy in certain ways.
* Deliver clear, factual and truthful information to the people affected by potential clawbacks, what THEY need to know.
* Use different type of motivation. He has a mixture of softball and hardball motivation, and that will only confuse people.
The first step when playing softball is normally to open up communication channels. That will require social skills rather than a law degree. So he will need to ask someone qualified about “What can people be willing to reply to?”, rather than sending one-way communication letters.
Other than that, he will need to send specific info about his claim sooner or later, something people can use to analyse the consequences BEFORE they have to initiate a formal contact themselves.
And then he will need to add some presentation skills, e.g. direct the attention towards the positive outcome of a negotiation (for them, not for him).
It isn’t, but you’ree mixing 2 sets of ideas together.
You have the idea that Bell will need to PROVE the money has fraudulently been RECEIVED by the net winners, fraudulently transferred to THEM. He will also need to prove it in COURT.
My idea:
The money HAS been fraudulently transferred (FROM RVG), and it HAS been established by a court. Any objections to that has to be handled in court, but all other claims can be handled outside court (most of them).
If the court has established that money transferred from RVG has been fraudulently transferred (following the specifications for that), Bell’s proof will be RVG’s payment records and similar financial info (e.g. from eWallet to external accounts, eWallets to check, bank payouts).
“Fraudulently transferred” doesn’t include normal business payouts. If any of those are fraudulent, they will have to be handled separatedly.
“If the Court has established”?
People and institutions have actually responded to an idea like that.
Of course he does. How else would he get a judgment against them in favor of the RVG estate? AT some point Bell must prove that specific individuals received specific amounts of money. Before, or simultaneously with that, he must prove that they received fraudulent transfers that are recoverable to RVG. Unless he is able to do both of those things he will not be able to get a judgment against them.
Your ideas….not even sure what can be said except they miss the mark.
He won’t need a judgment (against them) if the case is settled outside court. He will need a judgment about the settlement.
That’s correct. It’s the evidence and documentation in the case, and it will have to be presented in court (if the case hasn’t been settled).
In case of settlements, he won’t need to present individual documentation in court.
Here you’re talking about cases NOT settled outside court. They will have to follow normal procedure.
If a case has been settled, he doesn’t need to prove all that. A judgment there will be about the settlement, not against “them”.
If a case has been settled, he won’t need a judgment against “them”. He will need a judgment about the settlement.
Absolutely nothing you just wrote makes any sense in the American legal system, nor probably any where else on planet earth, or the solar system, or in any other legal system….nor in the galaxy or in the universe. YOur ideas are completely incoherent,
How do you propose Bell reaches an out of court settlement (“solve” in your whacky terminology) with 16-80 thousand net winners who now possess multi-millions of dollars they do intend to give back? What do you think will induce those thousands of people to send this man a check?
Are you saying that any settlement Bell makes has to be approved by the Court? If so then that is true. That would not be called a “judgment about the settlement.” A Motion to Approve a Settlement would be filed and the Judge would here the Motion and after hearing any objections would rule for or against the Motion.
Naturally Bell will aggregate as many settlements as he can into a single motion, but to even think this will be the process followed for tens of thousands of unwilling net winners is fantasy of the highest order.
In all this time Bell has settled out…. What did you say? $36,000? If so, that means there’s only $350,000,000 more to go! And that means that there will be a clawback lawsuit over millions of dollars and tens of thousands of net winners.
I have no idea why there is all this to-ing and fro-ing about what the receiver and the court HAS to do or doesn’t have to do.
Zeek was a fraud.
It says so in the original complaint on which the court signed off and allowed.
Therefore EVERY transaction is subject to the receivership, including “normal trade transactions”
The question of how far and how hard Mr Bell is prepared to go in pursuit of recoverable monies is up to him and based largely on whether or not the cost/s outweigh the potential return to the receivership.
We are analysing it in another direction than you, forwards rather than backwards, what will happen / should happen rather than already known facts.
Court of Equity clearly defines several doctrines to use, e.g. “unclean hands”, “unjust enrichment”.
Without rules like that, “fraudulent transactions” would be rather meaningless. The Receiver would even have to claw back money from the IRS.
Nuances like that are rather important.
No, you’re not.
You’re simply making things up to suit your own view of reality.
Complicating things which are straightforward and inserting opinion where fact exists.
Again I say, Zeek was a ponzi FRAUD The court documents say so.
This is NOT a “normal” business receivership, if such thing should exist.
EVERYTHING which passed through Zeek and it’s accounts since its’ inception was as the result of that illegal activity.
The receiver is under no obligation to “unscramble the egg”
As unfortunate as it is for those concerned, it will be up to victims to prove they have not been “unjustly enriched” and/or have “unclean hands”
Receivers and/or auditors of criminal fraud activities don’t have the luxury of assuming anything is as the fraudster/s have made it appear.
Such a thing exists. Quite common.
While Bell is never going to put Humpty Dumpty back together again, he was appointed to unscramble things, which is why a large team of forensic accountants have been pouring over the books for the last seven months.
Without “unscrambling,” and by that I mean tracing money in and out of RVG LLC, there is no way to adequately identify and marshal assets for distribution back out to the RVG creditors.
As far as the “money out” side of things goes this accounting must determine which transactions were bona fide expenses and which were fraudulent transfers.This is the “unscrambling” and its at the heart of the Receivership.
While all RVG related parties and transactions are within the Receiver’s purview it is not accurate to say that “everything” is “subject to” him for he has no authority to claw back property that is not proveably an asset of the estate. (Bell of course considers money in possession of net winners as an asset of the estate)
Bona fide payments to vendors are not considered fraudulent transfers and therefore are not subject to his authority. For example Bell has no authority to recover correctly billed payments RVG made to an innocent third party.
By this point it is generally understood that large numbers of net winners are unwilling to concede they are recipients of fraudulent transfers, and even if they were Bell is not entitled to recover from them.
How Bell deals with those objections and the intransigence of 80,000 net winners so as to maximize the recovery for the creditors is the focus of these discussions, not whether Zeek was a fraud or not.
You seem to have a great deal of sympathy for the net winners. I am surprised. I would not have called a person who walked off with several millions of dollars in less than a year a victim but then that’s just me.
The case is a civil case, and I have identified it as a civil case. That’s not about “making things up”, it’s about trying to identify things correctly.
It’s relatively similar to a bankruptcy case, and will follow the same rules. And bankruptcy laws have definitions for “fraudulent transactions”, to be able to separate some of them from normal business activities.
Even a fraudulent business will have some normal business activities, e.g. paying out money to affiliate investors was only fraudulent for SOME of it. Returning an amount equal to a person’s principal investment isn’t fraudulent in itself, is it?
“Zeek was a ponzi FRAUD The court documents say so.” That’s a half truth, the type of truth used to mislead people. The argument in itself is relatively correct, but it doesn’t give a complete and correct picture.
Zeek WAS a Ponzi fraud. The Court documents SAY so. But thst doesn’t mean you can use that logic for all other types of conclusions. The court has NOT said that all transactions were fraudulent.
That was your own statement, so don’t blame me.
Now you’re being deliberately obtuse.
It was a ponzi, there WERE no legitimate transactions. The guy who was paid for cleaning the toilets was paid with tainted money. In fact, ANYONE who received ANY money from Zeek or RVG received tainted money.
As for your:
No matter how “relatively” “M_Norway” may consider the case to be it is NOT a bankruptcy case
Sorry, I can not agree with you here. I think if you research this issue you will find you are quite wrong. Transactions can very well be legitimate AS TO innocent third parties (who by the way have no obligation to check into the internal operations of a company before providing services.)
The third party (our toilet cleaner in this case) presumably had no specific knowledge of how RVG operated its business and provided fair value for the payment he received. This is a legitimate transaction. Even if he was paid with money Paul Burks stole from a vault at Fort Knox it would still be legitimate AS BETWEEN Toilet man and RVG. Remember for our purposes here the Receiver IS RVG and the toilet guy is not.
Also, you can make the following distinction between Toilet Guy being paid with RVG funds and the tens of thousands of net winner affiliates that likewise received RVG funds.
The difference under the law is this: Toilet Guy gave RVG fair value for what he received, while the net winner affiliates did not. Note that once funds were tendered they became the property of RVG, no longer the property of the investor.
Thus Toilet man was paid, legally speaking with RVG funds, not investor funds. Its a fine distinction but an important one.
And the receiver should therefore accept that “toilet guy” had provided a legitimate service and was not simply a stooge of RVG ????
Sounds like a plan.
Yes, there is no reason to believe he was a stooge of RVG from the facts at hand. Unless there is some irregularity in the billing or other reason you have omitted, there is nothing here that indicates
Toilet guy was complicit, therefore the payments he recieved would be legitimate and not subject to clawback. The same goes for many other types of vendors, employees, contractors and consultants. The basic premise is that if you work (provide fair value) you deserve to be paid.
P.S. the fact that real work performed provides a fair value defense against claw backs is why you hear net winners claiming to have “worked” eight hours a day placing ads and calling up prospects.
Money earned from actual work performed also provides an exemption from securities regulations that these ponzi types hope will excuse them from SEC jurisdiction.
If I were speaking solely about clawbacks, you would be correct.
I’m talking about the process which is taking part behind the scenes as we speak.
Auditors, receivers and their staff do not “assume” anything
EVERYONE who was or is involved with Zeek is scrutinized.
Receiver Bell recently filed a 22 page quarterly report. He describes his “behind the scenes” process for the Court. Its publicly available.
Auditors, receivers and their staff “assume” things all the time. They test their assumptions and if found wanting discard them and try again. Its central to science, forensic accounting and investigative work. Its often how we arrive at the truth.
By your own lights you have determined that our typical Zeek janitor was a “stooge.” Is that an objective fact? Or is it a subjective assumption? You have stated that all RVG transactions were fraudulent. Is that a fact or is it an assumption?
I’ll tell you what, “Hoss”
YOU volunteer to be the one to go and separate the “legitimate” funds from the proceeds of the ponzi/pyramid aspect of Zeek.
YOU be the one to tell the “legitimate” trade creditors of Zeek they will be paid within normal trading parameters.
Minimize it all you want.
This is NOT a “normal” receivership
Enlighten us all “Hoss”
When did this become a fraud and when was it a badly run legitimate business ??
When and where would you suggest the receiver and his staff start looking for the first signs of illegality ???
If an insider withdrew his/her “winnings” back in week 1 under the guise of it being a “normal” trading expense, would he/she, in your opinion be exempt from any possible recovery actions ???
Why not come right out and say it openly.
Tell potential future HYIP ponzi players not to worry, no one is taking any of this seriously.
Receivership is an Equitable Remedy, an emergency type of remedy ordered by a court in this case. It can be compared to Administrator and Liquidator, but a Receiver typically has a wider range of powers.
It’s actually a normal Receivership, but it’s not a normal bankruptcy procedure. A bankruptcy can normally be handled by a Liquidator (I’m not talking specifically here about different types of bankruptcies, e.g. Chapter 7 / 11 types of bankruptcies).
The Receiver has been appointed to replace Paul Burks as the owner of Rex Venture Group, in order to preserve assets, act as a Defendant and various other duties (I’m not specific).
His powers are limited to areas relevant for the case. He can make big and small decisions on a daily basis, but a summary of his work will normally have to be approved by the court.
The 1,200 subpoenas was an attempt to extend his powers, but he hadn’t asked the court for permission to do it. So we can clearly see that his powers are limited in some ways.
That example is from the fraudulent part of the business, and it’s about “investments” rather than “normal business operations”.
Withdrawing an amount UP TO the principal investment is normally NOT “fraudulent”. Paying out MORE than the principal investment is normally fraudulent (from Paul Burks’ side, making the net winners become victims of a fraud).
Some of the net winners are not really victims of a fraud, but the majority are. Some have been actively engaged in organizing and promoting the fraud knowingly or carelessly. The Receiver has some extended powers compared to a Liquidator.
Legitimate funds are anything that came into RVG from investors and customers. There is no need to separate them from the “proceeds of a ponzi/pyramid——- they are the proceeds.”
There is nothing atypical about it.
It’s impossible to distinguish “when,” and at the bottom it is only a matter of curiosity, but generally I would say it became a fraud at the moment investment capital was transferred out of the company under the guise of profit sharing. Profit is a financial return ON capital not the distribution OF capital.
Well creditors is the operative word. Those who have already been paid are not creditors. If a bona fide tradesman has not been paid then he must file a proof of claim to be recognized as a creditor.
Certain categories of creditors will be accorded priority of payment from estate assets. They will not be paid within normal trading parameters because they will be paid when distributions are approved by the Court.
I would not suggest it. As they reconstruct the accounting records the early instances will emerge. It could be as subtle as an account balance switching from black to red.
Illegal business don’t just do illegal things, but legal things as well. Probably every company is somewhere on the continuum between completely legal and completely illegal. (just look a Microsoft’s anti-trust suit for confirmation of this).
Wherever Zeek began it veered so far to the illegal side that the SEC stepped in but this does not mean that ALL it did as a company was illegal, not all of its employees were stooges and and not all payments it made were fraudulent transfers.
Not exempt. First off, if an insider withdrew money it would not be an expense to him. Neither would it properly be called an expense of the company….and since there was no actual profit to share the withdrawal could only have been from the companies capital base (money from other investors).
As such the insider received the funds fraudulently.. The company paid him with other investor’s capital which was a breach of trust by the company. I feel very certain the Reciever will make no distinction between a withdrawal in week 1 vs Week 725. A net winner is a net winner.
Tell that to Andy Bowdoin.
Lastly concerning clawbacks. It is the nature of the transaction not the nature of the business that determines whether a fraudulent transfer has taken place.
Subpoenas are usually issued by the clerk of the court (see below) in the name of the judge presiding over the case. Additionally, court rules may permit lawyers to issue subpoenas themselves in their capacity as officers of the court.
You are correct and “normally” is a worthwhile qualifier since this is not always the case, such as when the value of the original capital investment has declined.
Nonsense.
EVERY transaction is tainted
They don’t have to be “FRAUDULENT”
The “fraudulent” part was defined by the actions of RVG/Zeek.
Charities were put out of business by the collapse of Madoffs’ ponzi, despite the fact they were “innocent” victims doing “good works”
Whether he announces it publicly or not, the receiver and/or his staff will have examined EVERY transaction before he submits his findings and recommendations to the court for approval.
The receiver does NOT have to declare a transaction to be “FRAUDULENT”
The court has already recognized RVG/Zeek as being fraudulent.
“Innocent” net winners will be subject to clawbacks using exactly the same criteria as “fraudulent” winners.
Legitimate “creditors” will also be required to show their payments do not fall into the “preferential payment” category.
IOW, they too will be inconvenienced by the fact this was a fraud, despite any belief they may have had.
AND, on a purely speculative note:
We KNOW the same presidents’ task force involved in the ASD case is involved
We KNOW the handling of clawbacks is being addressed.
We KNOW the receiver has the resources to go “further” into finding net winners than in previous cases AND intends to do so.
There is absolutely no reason to assume that what the receiver has publicly stated is unlikely to happen and that ANY net winner should consider themselves exempt from clawback.
I think not.
If by tainted you mean every transaction was associated in some way with RVG, Zeekler and Burks then I agree.
Every transaction did take place within that framework, that culture and that scheme, but such a characterization, as true as it may be, leaves us with a dirty brown undigestible lump of indistinguishable transactions. Its not a very useful way to look at things or to deal with with them in the aftermath of Zeek’s downfall.
http://www.theponzibook.com/Loyola_V_Materials.pdf
Tainted is generally used to denote contamination or corruption. In legal usage its often associated with tainted evidence, meaning that evidence which is procedurally contaminated and is therefore unuseable in Court.
Are you saying that the Reciever’s evidence is being illegally obtained? If so Bell will be surprised to hear it.
Perhaps you mean that the data bases are so corrupted the Reciever will not be able to trace the flow of money? If so then Bell will be surprised to hear your opinion. OR, are you by a mental process peculiar to you concluding that since funds flowed through RVG that all subsequent transactions had to be corrupt and contaminated?
If so let me disavow you of that notion. The law can and will differentiate between right and wrong, legal and illegal, contaminated and not contaminated, bona fide and fraudulent.
The legal theory behind fraudulent conveyance or transfer is that a company (RVG) defrauds its creditors (the net losers-unpaid tradesman-vendors etc) when it unlawfully transfers company assets (the money paid out in false profit sharing) to third parties who have not provided bona fide services or goods at fair value (the net winners)
Yes RVG perpetrated the fraud that does not alter the fact that net winners are in receipt of the conveyed funds. The law provides a way for the Receiver to recapture those funds from net winners for the benefit of all creditors of the estate.
Also, as in the case of our janitor, the law excludes him from recapture as a provider of fair value goods and services to the company.
Its irrelevant to the discussion. Bad things happen to good people. The charities provided no value for the money they recieved and therefore have no defense against the fraudulent conveyance statutes.
Bell can not declare anything. He will present the evidence to the Court. It will be the Judge who declares that the net winners are in receipt of fraudulent conveyances.
This is false. This is not a bankruptcy.
Creditors by definition could not owe the estate for preferential payments. Creditors have not been paid. That’s why they are creditors.
No matter how many irrelevant case studies or references you provide “Hoss” you are ignoring the FACTS
The complaint http://www.sec.gov/litigation/complaints/2012/comp-pr2012-160.pdf states quite clearly the defendants raised $600 million dollars fraudulently between January 2011 and the date of filing, August 17 2012.
The court accepted the SEC complaint in it’s entirety and made no special provisions.
A court appointed receiver IS “the most powerful and independent of the judicially appointed managers.”
EVERY transaction which took place between those dates is subject to scrutiny by the court appointed receiver.
The receiver will NOT accept any transaction is “legitimate” without it being checked and verified.
I say again, any inference by you or any other armchair “receiver” that ANY net winner is not subject to clawback provisions available to a court appointed receiver is disingenuous at best and deliberately misleading at worst.
Similarly, legitimate “trade” creditors will NOT be exempt from scrutiny and can NOT expect to receive any payments within what could be considered “normal” trading terms.
The effects of a fraud of this size are not limited to immediate cash losses only and, IM(very)HO, readers of this and other blogs deserve to be made aware that, in this instance, the COURT APPOINTED receiver has quite clearly signaled his intentions to pursue net winners.
A quote from the Ponzi book:
That’s probably why so many Ponzi schemes have some types of “work” to make them look less like investments. The more it looks like real work, the more people will believe in it.
For heavens sake man, You reference point is a complaint by the SEC vs RVG and Burks, not not an action by RVG to recover funds from a specific individual or class.
Let him scrutinize to his hearts content, but he will not file suit for recovery of fraudulent conveyances against tradesman who provided fair value for goods and services. Scrutiny does not automatically imply any action will be taken.
Whatever. No one including the tradesman has to prove his payments are legitimate unless Bell alleges otherwise.
Bell is not going be taking depositions from janitors to find out if they provided fair value services to RVG when they cleaned the bathrooms on April 7, 2012.
You obviously are confused I never said anything like that.
Umm, he doesn’t have to “file suit” to inconvenience trade creditors.
The lives of EVERYONE involved in a court ordered shutdown of a ponzi fraud is affected and they can be required to provide documentary evidence of the legitimacy any/all transactions.
The time taken by a court appointed receiver is not because he/she is lazy or inadequately trained
EVERY transaction is scrutinized.
Again I say, NOBODY involved in any way with Zeek Rewards should “assume” he or she is exempt from scrutiny and, if he/she is a net “winner” prudence would dictate no assumptions should be made as to how “far down the line” clawback action may extend.
Can be, but for the most part will not be. As I said they are not going to quiz the janitor or allege fraudulent conveyance to the gardner.
Bell has a couple of billion transactions to look at, he is not going to be concerned with piddly small tradesman issues. The Big fishes are the net winners and insiders. Hopefully he will go after them.
Your preaching to the choir. As I said you obviously have me confused with somebody else.
What the heck does that mean ??? He has a staff who do just that.
Let me say it again real slow….Bell is not going going expend money on staff (creditors money) guizzing the janitor or alleging fraudulent conveyance against the gardner. Its costly, its time consuming, the net return to the estate would be inconsequential or negative. Its not worth pursuing.
Bell has a couple of billion transactions to look at. He has individuals who have copped millions and payment processors that may have been complicit. he has hundreds of items to deal with, all of which have a greater likelihood of returning money to the estate than directing his staff to contest payments made to a janitor.
He can go after the janitor if there is cause but he won’t unless he finds out the janitor was getting paid far, far, far, far more than what would be reasonable under the circumstances.
I am not talking about a couple of bucks either. They have to bring suit and prove he was paid an unreasonable amount to prevail. Not, repeat, not t=going to happen unless this is the richest janitor in America.
Bell says he is committed to making this the most efficient Receivership in history. That’s a big commitment but I do not doubt that he will make the attempt.
He has to use his talent and staff wisely and economically, and if that means not chasing janitors over toilet paper costs then he won’t…but he could if he thought the toilet paper costs were padded.
He has no choice, he HAS to do that as part of his duty. Otherwise, a fraudster could simply disguise transactions as “legitimate” expenses.
He and his staff HAVE to audit everything they can. NOTHING can be taken for granted.
Fine, let them audit until they run out of pencils. They can scrutinize every penny. But…
Your original statement was: littleroundman: they can be required to provide documentary evidence of the legitimacy any/all transactions.
Requiring someone to provide “documentary evidence of legitimacy” goes far beyond simple auditing and “scrutinizing.”
The Receivership can request information but if its not freely given, then a subpoena must be issued. Secondly the janitor can move to quash the subpoena and avoid discovery for months or perhaps altogether.
Even if and I do for a moment believe there is, some highly suspicious out of the ordinary transfers made to the janitor the Receiver would have to try and negotiate a clawback amount or sue the janitor for whatever amount Bell alleges he has received.
The janitor would have numerous defenses against Bell and could even counter sue the Receivership for something or another and thenn there would be hearings and perhaps a trial.
And then maybe Bell would obtain a judgment which would STILL provide no guarantee that the janitor has any money left and that any of this provides any net benefit to the estate. Likely it wouldn’t, which is why though it could be done it won’t be done. nst.
So if we are really talking about toilet paper size payment and not some massive transfer of money to a straw man the idea that the staff hours and cost necessary to document and prosecute the janitor for a great toilet paper theft is really quite implausible.
More exactly to the point is that our janitor is just that. He is a janitor doing a janitor’s job and RVG paid him for actual work performed. Bell can audit until forever, but based on the facts above Bell has no claim against the janitor at all.
Your “every transaction is tainted” ideas hold no water. If you would read the references I provided you, then you would understand that.
Every transaction IS tainted and IS scrutinized.
Whether or not the Receiver demands verification or not is beside the point, he CAN
Just as he CAN do many things outside of what could be considered “normal” practice in the case of a “normal” bankruptcy.
Unlike internet bloggers, receivers and auditors can NOT assume any transaction is “legitimate”
The only way the Receiver can demand anything from anybody is by subpoena (subject to objection) and to go to that route Bell would need strong suspicion that the janitor was more than just an hourly or contract worker.
Absent such suspicion AND proof AND finding by the court the wages paid to the janitor are not recoverable to the estate. The janitor, no matter what his actual role has no duty to prove anything. The burden of proof lies with the Receiver.
Whatever you say,,, the bottom line is that our janitor and everyone else who has received money from RVG does not have to volunteer any information and if Bell wants to clawback funds from them the burden of proof is entirely on him.
The idea that everything is tainted and is thus under control of the Receiver is the purest poppycock. The Receivership is only entitled to what someone grants him or that he can prove.
Does not apply. RVG is not in bankruptcy.
It’s in insolvency. The Receiver is actually a bankruptcy trustee with extended powers. That’s backed up by your own matherial, e.g. the Ponzi Book. It refers to the Bankruptcy Code §548 in a few sections.
For the discussion itself, it’s probably time to “agree to disagree” with a summary of the main points.
A discussion will be relatively fruitless when it starts to go in circles around the same “minor” details (e.g. the janitor). It will only bring in new valid points for a short period of time.
@LRM — there’s reasonable assumption and unreasonable assumption.
Paying USHBB racking up 800K just for making videos while its head was listed as “employee” by Zeek is NOT reasonable.
But secretarial staff, housekeeping, and such would probably be reasonable if they are within market rates and don’t seem to be overstaffed.
My point remains,
“Innocent” people are hurt by the collapse and appointment of a receiver to HYIP ponzi frauds, beyond “mere” monetary loss and no one should minimize the risks of ignoring the fact a court appointed receiver has stated he intends to go “deeper” into recovering assets than what has been the “norm” in previous similar cases.
IN THIS CASE to say “not likely or “probably won’t” is to ignore clues as to how THIS receivership is likely to be handled in light of who is behind the investigation and IT’S powers and aim.
IM(very)HO, people should NOT assume for a minute things are going to be run “like” any previous court appointed fraud receivership
A court appointed receiver CAN “go a lot harder” in his pursuit of recoverable funds than a “normal” bankruptcy receiver (if there is such a thing as a “normal” receiver) AND this receiver has already signaled his intentions to do so and the fact he has both the resources and technical capability to go “further” down the list of “winners” than previous cases.
The fact the original (court accepted) SEC complaint states quite clearly Zeek/RVG operated illegally from approx January 2011 until its’ closure also means ANY monetary transaction between those times used dirty/contaminate/tainted money UNLESS somebody would like to work out how much legitimately obtained money was used in the running of Zeek/RVG
IOW, prudence also dictates nobody who has EVER had dealings with should assume he/she is exempt from scrutiny and/or clawback action.
Your statement is completely misbegotten.
The SEC Complaint ALLEGED certain illegal and fraudulent actions by RVG and Burks and requested RELIEF from the Court. Concurrently Burks and the SEC agreed on terms which removed control of RVG from Burks in favor of the Court. ( It is the Court that actually “took possession” of RVG and Bell is an officer of the Court. )
The Relief granted was in the form of an AGREED Order Appointing a Temporary Reciever and Freezing the Assets of Defendant Rex Ventures. This document appointed Bell and empowered him to sue, defend, pursue, find, manage and marshall all assets belonging to the RVG estate for redistribution to the creditors upon approval of the Court.
It also specifically mentions that financial institutions are bound by the Agreed Order and it prohibits anyone anywhere that is in possession of RVG assets from dissipating them.
NOWHERE (repeat nowhere) in the Agreed Order does Burks admit any of the ALLEGATIONS made by the SEC, and NOWHERE in the AGREED ORDER does it identify who may or may not possess RVG assets. Nor is there any FINDING that there were fraudulent conveyances or a finding that any person had any culpability or “taint.”
In short, none of the allegations of fraud and SEC violations were proven against RVG, Burks, or any other entity or person associated with Zeek Rewards.
Your conception that the “court accepted” the SECs complaint is erroneous and there was no ruling on the allegations
Since there were so many misrepresentations by Zeek, its managers, promoters and affiliates there are virtually no legitimately OBTAINED funds. Zero.
Insolvency is not a synonym for bankruptcy, which is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency.
Let me amend that. The revenues of the penny auctions would probably be legitimately obtained funds, but even that bit was a pretty “scammy” business and very akin to gambling.
Still and all there’s no finding of fraud so the presumption should be that the revenues were legitimately obtained.
First, a general observation: Perhaps the biggest problem with HYIP schemes is that they poison the river of commerce and everybody gets paid from the poison stream. The scammers NEVER address this. Rather, they ADVOCATE for this insane structure.
If you want to put yourself “right there” in terms of the madness, think of Zeek as a company selling the financial equivalent of “Soylent Green.”
Zeek’s stream was positively glowing and yet people were drinking thirstily from it — like AdSurfDaily before it.
As a movie poster for “Soylent Green” says, “People are still the same. They’ll do anything to get what they need. And they need SOYLENT GREEN.”
http://en.wikipedia.org/wiki/Soylent_Green
As Hoss points out, Zeek’s legitimate vendors likely have nothing to fear from the receiver.
But my guess is that Hoss is new to the HYIP sphere and only now is beginning to gain insights/appreciation into just how polluted and diabolical it is.
I think LRM is speaking to this unbelievable mind pollution and the rampant criminality masquerading as legitimate commerce. Some of the con men ARE capable of saying or doing anything to sustain the deception and to keep “Soylent Green” in constant production, tweaking the production line along the way.
The receiver very well may have to check whether the hypothetical “janitor” is a legitimate vendor and whether his or her compensation reflects that or is a signal of a scam within a scam and or a scammy “silent partnership.”
I doubt he’ll get weighed down by that, but I suspect the look he’ll take will go beyond the cursory.
PPBlog
This is correct. Your description of the poisoned river of commerce is right on.
Here’s my summary:
1. Civil laws.
At this stage, the case is PRIMARILY about civil laws and civil procedures. For SOME parties, it can also be about criminal laws, but that will come later.
2. Type of laws.
The type of laws involved here are Bankruptcy Code (e.g. for defining “fraudulent transactions”, for clawbacks), Civil Procedure Code (for the procedures), Security and Exchange laws (for defining types of illegal activities). Other laws may be involved.
Civil actions are based on Court of Equity rather than Court of Law, i.e. Equitable Remedies plus a set of doctrines and other written rules.
3. Known clawback actions.
a. 1,200 subpoenas were sent to net winners October 30 2012
b. 16,000 e-mails were sent to net winners April 2013
A normal reaction to the last one should be “I can be willing to negotiate. I don’t have access to the data in the backoffice, so can you specify your claims?”. You can also verify that you can accept e-mail as communication method. Ask for all the information you need, e.g. about the negotiation procedure.
E-mail is more cost effective for both parties, and it makes it easier to upload documentation. If you received a letter rather than an e-mail, try to offer an e-mail solution?
4. Settle outside court
I believe the most normal method here is to settle the clawback claims outside court. There may be some disputes about the amount and other things, but that should normally be resolved outside court.
I don’t believe in the idea that the Receiver MUST prove illegal transactions in court first. He will have to prove something if the case can’t be settled outside court.
Oh, right, NOW I get it.
The court signed off on the SEC complaint, agreed to the confiscation of the remaining proceeds, allowed the freezing of payment processor and bank accounts and imposed administrative penalties but DIDN’T believe any of the allegations in the complaint.
GOTCHA
Makes perfect sense to me.
You and LRM have the same misconception and that is why we continue to go round and round. I can stop any time you two do. I have tried in numerous ways to explain it but neither one of you will believe me.
Look at the Complaint again. Look at the Agreed Order. Read them with fresh eyes and you will see that the Court has made no determination that RVG was a ponzi or did anything fraudulent. The SEC alleged and that resulted in Burks handing over his company to the Receivership. That is all.
As I have said to you several times…. Bell needs to have the Court actually FIND that RVG was a ponzi before he can file any clawback suits on behalf of the RVG estate. He can make no demand for return of funds on the basis of unjust enrichment or fraudulent conveyance until then, which is why he has made suggestions and offers to settle but has made no actual demands.
That the SEC alleged Zeekler was a ponzi, and you agree with them is not legally conclusive as to the persons and entities (net winners) that will eventually be the subject of Bell’s clawback suits. He has to prove it; not all over again but for the first time.
Very obviously not. Look at the Complaint. Nobody signed it except the SEC. The judge sure didn’t. The SEC can not unilaterally allege and try a case. The judge decide these matters as only a judge can.
The Judge signed the Agreed Order which was agreed to by Burks, RVG and the SEC. If you would actually read any of these documents you would know what they say. No funds were confiscated. They were frozen and they are still frozen subject to further findings and Orders.
The Judge did not impose any administrative penalties on anyone. Burks AGREED to pay the SEC a fine of $4,000,000.
He will never ever in a million years settle with 80,000 net winners or even a significant number of them out of court. You must be on crack if you think this is even plausible.
In all this time he has settled out $36,000. ???? These offers to settle are real but they are mostly to show good faith before he uses the hammer. The first hammer stroke will be to ask the judge to find Zeek was a ponzi/pyramid.
Read it for yourself.
We don’t share the same ideas.
I know perfectly well that the Receiver will need orders against the individuals. An order against Paul Burks and RVG can’t be used against other individuals.
But I don’t agree in that he will need an order if a case is settled outside court, that he will have to prove “fraudulent transfers” and prove ZeekRewards was a Ponzi/pyramid hybrid.
The appointment of a temporary Receiver is a judgment against Paul Burks and RVG, not against anyone else. It allowed the Receiver to freeze certain assets, e.g. assets still in possession of RVG or Paul Burks (and all the other definitions, e.g. “held i constructive trust”). I’m not specific here.
Assets in the possession of other individuals can’t be frozen involuntarily without a court order against the individual. But the claims against individual debtors should normally be possible to resolve voluntarily outside court.
My first response to a creditor would have been to ask him to specify his claims, up to a level of “send me ALL information related to your claim against me”. Before the debtor has received any specified claim stating the exact amount, there’s no room for negotiations either.
I’m not very familiar with the type of creditors who don’t specify their claims, and rather is trying to “invite” me to negotiations. Negotiations will have to start from somewhere, from specific amounts rather than from vague “invitations”.
The vague “invitations” might have been because of uncertainty about using e-mail as a communication method. He only sent a standardized letter without any personal information (as far as I have seen). People should respond to it by accepting e-mail as a communication method.
Maybe not but it would be nice if we at least shared the same facts.
settlements.
There is an Order. Its called the Agreed Order Appointing a Temporary Reciever and Freezing Assets of Defendant Rex Ventures. Its signed by the Judge. It freezes all assets of RVG wherever they are situated and in whomever’s possession they reside. That covers everybody.
Once Bell proves that Zeek was a ponzi and that the net winners received RVG assets (the fraudulent conveyances) the net winners will perhaps realize that the Agreed Order applies to them.
If they have dissipated, or spent the money to avoid a clawback after that Agreed Order took effect they will find that they are in contempt of the Order. Its another hammer Bell can use.
This Order takes in rem jurisdiction over the assets of RVG. In rem means “over the thing’ and in this instance the thing is RVG assets wherever they may be found. So the judge does not have to name individuals because the Order applies to whomever it applies to. It does not apply to me because I hold no asset or RVG.
Bell has no claim until the judge finds Zeek was a ponzi and the net winners were the recipients of fraudulent transfers. Only then.
First off Bell/RVG is not a creditor of the net winners. Secondly Bell will specify his claims when he has a ruling that says these net winners owe him something. Third, he is only at this time inviting them to discuss what they may owe after the Court finds in his favor.
If they can not understand this then the wheels of justice will just roll on and they will wonder what happened.
The invitations are vague because Bell does not yet have a Finding that shows that net winners owe anything at all. His “invitation” is to contact him, find out what he thinks they will owe and negotiate a deal that he represents will be better than if it goes all the way to a judgment.
Everyone has to decide for themselves. He’s made the offer and the ball is in their court.
He won’t, but 80,000 people are not going tp settle out of court. So far Bell has only settled $36,000. Bell will ask the Court to approve all settlements.
He has settled $359,000, as far as I can remember. Or maybe $36,000 (cash) plus $359,000 (Affiliate Investors financial instruments).
Could be you’re right, I will check. It still seems like a drop in the bucket given the multimillions he’s trying to recover from the net winners.
You have derailed from the main point in my comment, and have over focused on small details. The normal response to my comment could be something like “Oops, I see there is a difference”. That was the main point, I was simply pointing out some of the differences in viewpoints (to “You and LRM have the same misconception …”).
AGREE TO DISAGREE
That method can be used to prevent endless discussions, e.g. when a discussion goes in circles or have derailed from a main track.
The main track here should normally be about the clawbacks from net winners, whom it will affect and how it will be performed (trying to predict the future). The discussion STARTED from that point.
So, how about everybody go and actually download and READ the Agreed Order Appointing a Temporary Receiver and Freezing Assets of Defendant Rex Ventures here: http://www.zeekrewardsreceivership.com/pdf/Order.pdf
Then come back and tell us all what the court appointed receiver CAN’T do should he or the court decide.
Not what is “normal” or “usual” but what that specific agreed order specifies.
He obviously can’t use that order directly against individuals not specifically mentioned in the order (e.g. to freeze assets). He can use it as a fundament for his claims against them, e.g. to send out claims and initiate individual settlements or lawsuits.
He COULD freeze the NxPay eWallets, or they were actually automatically frozen when the main account was frozen. It had to be defended in court by the NxPay Terms and Conditions, showing the eWallets were controlled by RVG.
To see if you have interpreted court documents correctly, look for whether or not the interpretation is being reflected in other court documents.
“Unfreezing of Third Party Accounts” was defended by the fact that monies paid from RVG to the eWallets were “unfulfilled transactions”, similar to uncashed checks.
Source: ZeekDoc129-main.pdf
RECEIVER’S RESPONSE IN OPPOSITION TO MOTION FOR AN ORDER REQUIRING RELEASE OF THIRD-PARTY ASSETS
Link to documents:
https://sites.google.com/a/asdupdates.com/files-website/home/zeek-rewards-sec-case
You don’t need to read all of “129-main”, just scroll down to page 5 and read the headlines for each point.
We can draw the conclusion here that the order is limited in certain ways. He can not use it directly against other individuals, e.g. to freeze assets in their possession.
If you scroll down to page 4:7 there is no need to “draw conclusion” about anything
@LRM
Please refer to BOTH logic and the document?
“Appointment of temporary Receiver” (Doc4) AND NxPay’s user agreement were used to defend the frozen eWallets. Whether or not Zeek was a Ponzi/pyramid was not at issue there (can be found in point E, right before the conclusion).
Doc4 gives wide but also limited powers.
* It can’t be used directly against other individuals to freeze assets in their possession.
* It can be used against financial institutions to freeze RVG’s assets.
By the terms of the Agreed Order the Court took possession of RVG and appointed a Receiver who is an officer of the court.
The court also ordered a freeze of all RVG assets wherever situated. “Freezing “all RVG assets” means that the Agreed Order pertains to “things” (in this case RVG’s financial assets.) This is known as in rem jurisdiction (jurisdiction “over the thing”) which can be distinguished from in personem jurisdiction which is “over the person.
If a person or entity has RVG funds in his bank account then the Court has jurisdiction over those funds and upon proper findings can order them returned to the estate (what we call a clawback) It logically follows that the Court’s in rem jurisdiction extends worldwide because RVG assets are in the possession of persons all over the world.
That’s nice Hossy, but what’s the point?
Its this. The court has frozen the assets. This indirectly, but legally enjoins any person or entity (think net winners and insiders) in possession of such assets from spending, transferring or dissipating them.
If a person or entity does, then they are in contempt of Court and penalties can be imposed. In rem jurisdiction is what permits Bell to follow the money trail wherever it leads. Clawbacks are an action in rem.
@Hoss
Derail attempt, but it added something to the general knowledge here. The description I gave was more than good enough.
Having read the aforementioned Agreed Order it is apparent that the Receiver has no dominion over property which does not belong to the estate and can not demand its repayment without further orders of the Court.
What does 4:7 mean? Page 4? Paragraph 7? Subheading 7? Line 7? Romans 4:7. The Lord is my shepard I shall not want or what?
I hate to “derail” this kiddy ride but the document you are citing and drawing conclusions from is an Opposition to a Motion. It is not an Order approving or denying the Motion. There is a HUGE difference between the two and for this reason none of your conclusions have any basis in fact.
Oh, the old “deliberately obtuse” strategy, Eh ??
OK, then, I’ll play your silly game:
https://sites.google.com/a/asdupdates.com/files-website/home/zeek-rewards-sec-case
“Agreed order appointing temporary receiver and freezing assets of defendant Rex Venture Group LLC
page number 4, at the bottom, starting with point number 7
Beginning with:
“subject to the specific provisions in sections III through XIV, below, the Receiver shall have the following additional powers and duties”
@Hoss
Derail attempt. You’re not following the logic for why I referred to that document (in post #432).
If you want to introduce a general rule about “Only Court ORDERS can be used”, then most of your “Bell has said” and “Bell’s intention are” arguments will fail.
Your said to read 4;7 of document 129 now you are “quoting a different document. So get your head on straight before criticizing others.
Ummn, no I didn’t Mr Obtuse.
MY post reads:
And THAT is the document to which I was and am referring
The Agreed Order Appointing a Temporary Receiver and Freezing Assets of Defendant Rex Ventures
I see. I do not care what kind of collosus of logic you think you are when you can not even distinguish a Motion from an Order then your logic is not based on facts its is based on misunderstanding. Its worthless drivel.
Get the fact right first and then draw logical conclusions.
You need to differentiate Orders from Motions or you have no clue what Bell is bound to do versus what he asks for.
This is an adversary legal system. Just because the Sorrels and Kettners made a Motion does not mean it becomes binding on anyone. Just because the Receiver answers the Motion does not mean its binding on anyone.
They are in adversary roles and arguing in front of the judge. There has been no ruling on the Motions! You can not “draw the conclusion here that the order is limited in certain ways. He can not use it directly against other individuals, e.g. to freeze assets in their possession.” That is nonsensical.
The fact is, is that this whole conversation has gotten nonsensical.
That is the document you are referring to NOW but earlier you certainly seemed to be refering to Doc 29
And I quote.
Source: ZeekDoc129-main.pdf
RECEIVER’S RESPONSE IN OPPOSITION TO MOTION FOR AN ORDER REQUIRING RELEASE OF THIRD-PARTY ASSETS
Link to documents:
https://sites.google.com/a/asdupdates.com/files-website/home/zeek-rewards-sec-case
You don’t need to read all of “129-main”, just scroll down to page 5 and read the headlines for each point.
We can draw the conclusion here that the order is limited in certain ways. He can not use it directly against other individuals, e.g. to freeze assets in their possession.
littleroundman#433
May 7th, 2013 at 7:27 pm (Quote)
If you scroll down to page 4:7 there is no need to “draw conclusion” about anything
I’ve read it several times. It enumerates the powers of the Receiver. He can do blah blah IN REGARDS TO ASSETS OF THE ESTATE. If you are ever to understand what is going on here you must first understand that the net winners have and will continue to argue that the funds they received ARE NOT ASSETS OF THE ESTATE.
Find anything in 4:7 that empowers Bell to JUDGE what is an asset of the estate. You can’t. Only the Judge can. Virtually all of the funds so far recovered were tendered voluntarily by banks not from opposing net winners.
To clawback money from net winners Bell must prove that they possess assets of the estate. He is empowered to prove, but not to judge.
SEEM
you’re really good at this deliberate obfuscation thing, aren’t you ??
Once again:
is what “I” said in “MY” last post
It has, and that’s why I identified it as a derail attempt.
I can’t give you any answers to “I believe you believe” logic, e.g. when you’re introducing an idea yourself and believe it was my idea, and start to criticise the logics found there.
You will first have to build up a logical link between the idea in post #432 / #434 and your own arguments.
That’s fair enough, but it’s off-topic from my point. You’ll need to post it as a stand alone comment rather than as an answer to a previous comment.
You’re actually having a heated discussion with yourself there, so I can clearly understand why it feels nonsensical. 🙂
What exactly do you think I am trying to obscure? In the context of a discussion about Doc 129 you said go read 4:7. You may have meant to go read Doc 4:7 but that is not what you said, and or not what I read.
So educate me, what is it you think I am trying to obscure or is that the only word you know to describe what you do not understand.
Right. I think I will go look in the mirror and ask myself why I am wasting time discussing legalities with a person who does not know the difference between a Motion and an Order. That pretty much sums up this thread.
did you say that with your hands on your hips while you were stamping your foot on the floor ??
I’m sure you know the difference. You introduced the point yourself.
My post #434 is following the logic from post #432, referring to the same document ZeekDoc129-main.pdf.
Your post #435 is off-topic from that.
My post #436 points out a derail attempt (your comment was off-topic from the logic in post #432).
Your post #439 introduces the “Motion vs Order” idea.
My post #441 points out yet another derail attempt.
Your post #444 are talking about the idea you introduced yourself in post #439, without any inputs from me. You were simply discussing your own idea with yourself. I have not been involved in that discussion, other than pointing out derail attempts.
No, I would not do that. It would taint EVERY floor in the universe from the beginning of time until today and then not even the Universal Receiver with his vast God-like powers could “unscramble” all of the billions and billions of stains and scratches that populate these innumerable galaxies, not even if his entire Quantzar of Forensic Floor Janitors worked for an Astral Year could this be done, for no power in the Universe can separate a galactic mass of tainted floors.
Hoss Solo (hands not on hips) from Uranus
I read over your recap and I do understand (at least in part) that you were referring to the Doc 4 Agreed Order as the enabling source for freezing the NXPay funds mentioned and argued about in Doc 129, the Motion to Unfreeze. I apologize for not being able to discern that earlier.
As you know from our past discussions, it has always been my contention that NX Pay after being contacted by both Qilling&Alexander and the Receiver thought it prudent to hold onto the funds pending the Court’s determination of who the funds belonged to.
I could not tell you if the funds are frozen as per the Agreed Order or simply held by NX Pay pending a determination of whether they are subject to the Order at all but Sorrels and Kettner obviously do not believe they are, and have argued in their Motion that the Funds should be released to them.
Bell filed an Opposition to their Motion and submitted a Declaration by NX Pay’s counsel which explained the Terms of Use and the “folder on the counter” concept. This substantiated Bell’s version of why the funds are property of the estate, subject to the freeze, and why they should be transferred into his possession.
As I think you are aware, there has been no ruling on the Motion to Unfreeze, and no Order directing the release of the funds either to the Receivership or to the Sorrel Kettner group. The funds have been de facto frozen for the time being and that is assuredly due to the Agreed Order Doc 4.
LRM@ I likewise apologize to you. You were suggesting that we read Doc 4 when Norway used Doc 4 as the starting point for his discussion of Doc 129, The Motion to Freeze.
At that point as I now understand it, you told him that 4:7 contained all he needed to know. So you were in fact referring him to Doc 4, the Agreed Order Appointing the Receiver.
I think it might be in all of our best interests to wait and see what the Receiver does next.
The discussion here doesn’t seem to be going anywhere in particular.
The discussion brought in something of interest in post #388, the link to “the Ponzi Book”. The last comment where I have brought in “something” was in post #432 / #434. I also brought in the suggestion about “agree to disagree” in post #411 / #419 (a solution when discussions start to go in circles).
I have already decided to reduce my involvment in this discussion, before anyone starts to talk about Duracell Bunny (“it can go on and on and on, lasts up to 4 times longer than …”). 🙂
Here’s the next chapter in the saga:
http://www.patrickpretty.com/2013/05/08/urgent-bulletin-moving-zeek-rewards-claims-process-approved-by-federal-judge/
yay!
Claimants and potential claimants should be aware
Which means they should NOT wait for email confirmation their claim has been recognized and will need to be proactive in the matter.
Sorta tip here… If any one suspect that they have put money into a Ponzi scheme, or have friends in one, contact the SEC and your state level regulator. This guy did when he came across one.
http://www.forbes.com/sites/edwardsiedle/2013/05/06/slow-blow-blowing-the-whistle-at-sec-on-yet-another-ponzi-scheme/
The passage you quoted does does not even mention e-mails.
However the content of the full Order indicates that unless an exception is made ALL affiliates can only enter their claims via the Receiver’s Electronic Claim Portal, after which the Receivership will make a determination and contact the claimant by electronic means (e-mail).
I do not see how, once the claim has been entered via the Portal there is anything to do but wait.
Hey, Hoss,
there’s some nits over there,
why don’t you go and do some nitpicking over there instead of here??
Those are some jumbo nits your passing out. Yeah. Mumbo Jumbos.
Talk is..a high profile ponzi scheme/ investment fraud involving a group out of Europe will be exposed later in the year.
A list of settlements can be found at ASDupdatefiles.
https://sites.google.com/a/asdupdates.com/files-website/home/zeek-rewards-sec-case
Doc150-1 Agreement
Doc150-2 List of settlements, 136 total
Doc150-main Proposed Order
Highest amount (rounded):
Initial – reduced to
$568,000 – $455,000 (80%)
$176,000 – $88,000 (50%)
$170,000 – $85,000 (50%)
Total amount (rounded):
$3,241,000 – $1,819,000 (56%)
The list is a little too time consuming for me now to analyse, so I just posted the basic information.
It’s interesting to note the receivers’ sending of emails to winners of over $1000, putting to rest the idea only “big winners” will be subject to clawbacks.
Of note also is the fact that of the 135 settlement agreements thus far entered into, the receiver is reporting settlements of $1,819,472 on winnings of $3,241,837, an approximate 56.12% return
Interesting that the names of the 135 have been withheld to forestall harassment from other affiliates.
Bell mentions twice that he will be seeking a judgment for “at least” the amount of a person’s net winnings.
In the footnotes he cites SEC v. George as a precedent case where a receiver obtained judgments that included net winnings as well as capital invested.
Will Bell attempt to obtain judgments for more than a person’s net winnings? It looks like he is considering it.
Question is if the receiver has a limit for litigation. He could have a different limit for cases where money is frozen with a third party payment processor because getting money transferred post judgment will be very quick and simple.
The vast majority of lawsuits against the lower threshold net winners will result in default judgments which take longer to collect depending on the state.
There is a Motion to Intervene and Dissolve the Receivership by Gilmond and King that will be heard in few weeks, but barring any surprises there, the issue of who owns the e-wallet funds has been confirmed. The estate is entitled to them and is already in possession. Clawbacks are only required to recover funds not in the possession of the estate.
I still believe the Receiver will mop up nearly every net winnner with a class action suit. Individual suits will be used to pursue special or non-generic situations.
The fact that Bell consulted with the SEC before sending e-mails to individual’s with net winnings over $1,000 suggests that this may be the low end threshhold for being named as a defendant in the class action. IN other words, everyone over $1,000 will be.
Bell does not have to go from state to state to recover funds from the small fry. If he obtains a $1,000 judgment he can sell it to a debt collector for $250. That is mostly what he will do. The estate itself will only pursue the very largest denomination judgments.
Excerpt from Receivers 3rd Quarter Report Oct 2013
Such proceedings will establish the key findings applicable to most, if not all, recipients of fraudulently transferred funds (findings such as the existence of a Ponzi and/or pyramid scheme).
Confirmed today as the Reciever has asked the court for permission to file Class Action. All above $1000 are included.
Where is info regarding this?
Article will be up shortly.
And we’re live – https://behindmlm.com/companies/zeek-rewards/zeek-rewards-top-ponzi-winners-named-shamed/