Douglas deposition reveals Dawn Wright-Olivares used crack cocaine
Back in March Darryle Douglas was arrested for failing to comply with a September 2015 court order.
The September 2015 order in question saw Douglas required to
- return any copies of the Zeek Rewards database he has in his possession
- appear for a deposition by the Receiver and
- produce all financial records from November 1, 2011 to the present for his personal and business-related accounts (prior to being deposed)
In April the Zeek Rewards Receiver indicated that Douglas had been or was about to be released, meaning he’d complied with the order above.
In a recently filed motion for summary judgement against Zeek’s top net-winners, Douglas’ deposition is confirmed to have taken place recently (the deposition document states the deposition took place on August 30th, 2016, which is obviously a typo).
While we only have excerpts of the full deposition (the complete transcript is over 100 pages long), what the Receiver has included in his motion is still pretty eye-opening.
Darryle Douglas (right) announced Auction Attics, a new MLM opportunity, mid last year.
In addition to similarities between Zeek Rewards’ penny auction platform, of concern was Douglas’ claim he was going to use a “business database” with “over 2 million plus contacts” to promote the opportunity.
This database is believed to have been the Zeek Rewards affiliate database.
Douglas’ claim caught the attention of the Zeek Receiver, who demanded Douglas hand over any copies of the Zeek Rewards affiliate database he had in his possession.
In his deposition with the Receiver’s attorney, Douglas appears to have been caught out lying about whether he had the database or not.
Q. There’s a database or there is not a database?
A. No sir.
Q. All right. So I mean, I’m looking at something here that’s posted, all right, that appears very clearly to talk about a database, all right? And you’re telling me the database doesn’t exist?
The “posting” the Receiver’s attorney is referring to is Douglas’ pitch for Auction Attics, which explicitly referred to a “business database”.
As many of you are aware, in my business database we have over 2 million plus contacts. These are not just any contacts, these are over two million previous product purchasers.
Here is the opportunity: We will invite as many of these proven contacts as possible to join us as early customers.
When pressed however, Douglas, on the record, confirmed that he had no such database.
Q. All right. Well, that’s fine. I’m trying to understand then, I mean, if this is just made up, then it’s just made up. You need to tell me that.
If it’s not made up and there is some database, then you need to turn it over, or we’re going to go back to the judge and tell him that you got the database but you haven’t turned it over.
A. I would never —
Douglas’ Attorney: Do you understand the question?
A. Yes. This — no, there is no database like this. No, not at all.
Q. All right. Then what — so this is just made up?
A. Okay, then —
Q. Well, I mean, I’m asking you the question. I mean, that…
Unfortunately the Receiver’s filing doesn’t contain the rest of that line of questioning.
Whereas Douglas didn’t produce the business database he claimed to have in his Auction Attics pitch, he did produce a “one-page document” containing a list of 36 names.
This, Douglas claimed, was a list from 2010 of “people who were involved in MyBidShack (an MLM opportunity launched by Paul Burks that preceded Zeek Rewards).
Q. Mr. Douglas, you’ve been handed … a one-page document that you produced this morning. Can you describe what it is?
A. Yes. This is a listing of people who were involved in MyBidShack in 2010.
Q. Okay. I counted this quickly. There’s 36 names on this list?
A. Yes, that’s probably correct.
Q. Is there a longer list than this?
Q. Is it just a one-page list?
A. This was just a one-page list.
Q. So it’s 36 people?
A. Yes. This is — yes.
A. Yes. You asked if we had anything compiled.
Q. Okay. This is the only thing you’ve got, a list of 36 names?
A. That’s compiled, yes.
Q. And you said this dates from 2010?
Q. Any other list or database or collection of email names or prospects or customers that you have?
A. I’m thinking. We — I will — I thought this was in reference to the Zeekler database, and that is the reason I gave you this.
I may have a listing of people that I have communicated with. I’d have to go through and make sure, ever, but it’s not — it’s more — it would be more this than that. It would not be anything close to 2 million, not even, but I will get everything else.
Q. But you don’t have any database or a list of people from FreeStore Club that has thousands of people on it or —
A. Oh, no. No.
Q. MyBidShack, any of those other MLM programs?
A. No. And I — want me to tell you why I don’t? Because we — I no longer had access to Paul’s information.
Q. What do you mean Paul’s information?
A. At one time, a long time ago, we had — we could log in but — (pause).
Q. Did you ever make a copy of the database?
In an attempt to downplay his role in Zeek Rewards, Douglas claims his position within Rex Venture Group was usurped by Dawn Wright-Olivares.
Q. You said earlier that you wanted to explain to me what your role was at Zeek, and you said it was — sort of suggested it was a longer story, if you will, than just being the sales director of the company, right?
And I said we’ll get to that in a few minutes. Why don’t you go ahead and explain to us what your role was at Zeek.
A. I had known Paul for many years and had developed a strong relationship.
When Dawn and Danny came on, that relationship fractured. Before Zeek, I was the sales director.
I kept the name only. Dawn took over the operations and we were not friendly.
Q. You were not friendly with Dawn and Danny?
A. No, just Dawn. Dawn controlled Danny. So my role changed dramatically after that point.
Q. When was that?
A. When the company became Zeekler, ZeekRewards. Before that it was FreeStore Club.
Q. Now, you still appeared on the podcast or the affiliate calls and promoted the compounder and promoted the scheme, did you not?
A. I had a conference call that had about 100 lines that I had owed or done for years.
You may already know this, once the company became ZeekRewards, they promoted and started a new call with Dawn that had thousands of lines.
Q. Did you participate in those new calls with Dawn?
A. Not very often, a handful of times.
Evidently Wright-Olivares created a schism of leadership behind the scenes at Rex Venture Group.
Douglas then goes on to reveal perhaps the most startling aspect of his deposition, as he continues to recount the deterioration of his professional relationship with Wright-Olivares.
Q. All right, go ahead and tell the rest of the story.
A. When Dawn and Danny came to the company years ago, long before Zeek, I lived in Lexington, North Carolina at that time. They moved in with me originally.
Q. Moved into the house you were living in or the place you were living in?
A. At the time, yes. And that’s where our separation began. Dawn was a crack cocaine user.
Q. I’m sorry?
A. Dawn used cocaine and was asked to leave the company eventually.
Q. What company was that?
A. This was FreeStore Club. She left but came back with the idea for a penny auction, which no one had ever heard of.
Because we had a fractured relationship, we created MyBidShack, they created Zeekler.
Eventually Paul decided to get rid of MyBidShack and that the company would only go under Zeekler, which made our rift expand.
It set up a war that we — that’s when I was no longer allowed to have access codes or key information from accessing the system.
To what extent, if at all, Dawn Wright-Olivares continued to use crack cocaine throughout Zeek Rewards’ operation is unclear.
The final point of interest in the excerpts of Douglas’ deposition, is his claim he wasn’t aware Paul Burks was making up Zeek’s daily ROI payout percentages.
Darryle Douglas responding to a question on the previous page: and the first question you ask is why would some of the largest attorneys in the world go along with them.
That was the first thing that didn’t make sense. But they did lots of things to change.
That’s where the, all of the — Dawn put together all of the names and the way it worked and based on customer sales. And so no, you don’t think that.
And you don’t think that because you think you know Paul Burks.
Q. But you knew from your own experience with MyBidShack that the money was not — that penny auctions wasn’t generating this kind of revenue to support tens and hundreds of millions of dollars payouts, you knew that, didn’t you?
A. No, no, no. See, the way you think as an entrepreneur in that situation is maybe they — and this is how they put it, you are not the only one with ideas.
Maybe other people have ideas that you don’t.
Q. But you had your own experience with this MyBidShack?
Q. You knew that these penny auctions didn’t generate that kind of income, right
A. MyBidShack didn’t, but you know, no, I didn’t.
Q. Were you aware that Paul was simply making up the profit share numbers?
Was Zeek Rewards the result of a misguided drug-induced epiphany?
Was Wright-Olivares alone in using crack-cocaine?
What compelled Paul Burks and the rest of Rex Venture Group management to go along and execute Wright-Olivares’ fatally flawed business model?
Dawn Wright-Olivares is expected to testify on behalf of the government at Burks’ upcoming criminal trial.
The trial itself is scheduled to kick off in just over forty-eight hours.