MLM Ponzi pimp updates, July 16th 2014
Two brief updates today in the ongoing battle between MLM Ponzi pimps and regulators.
Neither really had enough weight for a separate writeup though, so I’ve combined them together below.
TelexFree’s top Ponzi pimps got together and filed a bunch of Motion to Dismiss claims, citing a lack of a stated claim by the SEC. Evidently the pimps believe that asking them to return the money they stole from victims doesn’t constitute a valid claim.
Anyway, a joint-hearing has been scheduled for September the 5th. Barring and unprecedented legal technicalities, I’m tipping every motion will be denied. Also on the bill for the hearing is the setting of ‘a discovery and trial schedule for all defendants‘.
Sounds like after September 5th the gloves come off and we get this show on the road…
In making the scheduling order, Judge Gorton also took the opportunity to remind TelexFree, James Merrill (who is currently busy trying to wrangle $4 million in stolen Ponzi funds from seizure) and Joseph Craft that ‘their responses to the amended complaint are now overdue‘.
How much slack they are given in regards to the standard deadline I’m not sure, with Gorton only “directing” them to ‘submit responsive pleadings forthwith‘ at this stage.
Meanwhile Zeek Rewards Ponzi pimp Todd Disner has asked the North Carolina District Court to set aside a default judgment entered against him on July 2nd.
Disner thus far had failed to respond to the clawback litigation filed against him. Ignoring proceedings against them appears to be a common theme among MLM Ponzi pimps, who often wait until the last possible minute to file a response.
Disner argues the court should set aside the default judgement entered against him because
he does not have access to electronic filings. He was unaware that the time within which he had to reply had arrived, as he had not received any responsive pleadings from his co-defendants.
Disner believed that before a default would be entered against him, he would receive notice of the (Receivership’s) intention to seek a default if needed.
Disner also claims that he
was unable to determine whether he had a valid defense… and as a result, attempted to seek the advice of counsel.
From the date Disner was served to date thereof, he diligently attempted to obtain the advice of an attorney but was informed by all of the lawyers he contacted that he needed to pay an amount in excess of what he could afford.
Disner has (since) been saving to enable him to have the benefit of the advice of counsel, however as of the date of the (Receivership’s) application for default, has been unable to do so.
In addition to citing his own legal incompetence as the reason he missed his response deadline, Disner’s claims that he can’t afford representation are certainly interesting.
According to Zeek Rewards’ financial records, Disner personally invested $11,810.49 into Zeek Rewards, and withdrew around $1.8 million. In seeking default judgment against Disner, the Recievership added $279,720.82 in interest which brought the total to $2,079,757.88.
Disner makes no clarification in his pleading as to how much of the $1.8 million he stole from Zeek Rewards investors is left. Nor does he explain why attorneys are potentially asking he pay them nearly $2 million for “advice”.
Disner claims that after default judgement was granted, he personally contacted the Receivership and asked that they “reopen the default” so that he might be able to file a response. He states however that his request “was denied”.
That might sound a bit harsh, but given clawback litigation was first filed against Disner back in March, and thus far he’s completely ignored requests by the Receivership to pay back his victims and now the litigation proceeding against him, not surprising.
I suspect the Receivership is looking forward to Disner explaining to the court how his feigned legal negligence justifies a reversal of the default. Ditto a more detailed explanation as to why, after withdrawing $1.8 million dollars of stolen Ponzi funds, he’s now crying poor.
Stay tuned as the TelexFree and Zeek Rewards sagas continue…
Footnote: Our thanks to Don @ ASDUpdates for providing a copy of Judge Gorton’s scheduling order and Todd Disner’s “I can’t afford lawyers” Motion to Set Aside Default.