Zeek Receivership updates for first quarter 2017
On May 1st the Zeek Receiver filed his first quarter Status Report for 2017.
The report covers settlements received, US and foreign net-winner clawback litigation, various insider lawsuits and the aggregate amount paid out to Zeek affiliates thus far.
During the first quarter of 2017 the Zeek Receivership received $289,736 ‘from settlements with various third parties who were holding Receivership Assets or against whom the Receiver asserted claims‘.
US Net-winner Clawbacks
To date 226 out of the 9000 Net Winner Class have filed a response in agreement with the Receiver’s calculation of how much they stole. 152 net-winners disagreed with the Receiver’s calculations.
186 out of the 226 affiliates who agreed with the calculations have requested a settlement negotiation.
With respect to the named top net-winners;
The Receiver Team also continued collection efforts against the named net winners against whom the Receiver had previously obtained default judgment.
Further, the Receiver’s counsel engaged in discussions with third parties regarding the collection and/or sale of potential future judgments against
U.S. net winners, including the Net Winner class.
Sounds like the more difficult net-winner collections might be sold off to debt agencies.
Foreign Net-winner Clawbacks
The Receiver continued litigation in the U.S. lawsuits against foreign-based net winners.
The Receiver prepared and filed motions for summary judgment against the remaining defendants based in Canada, British Virgin Islands, France, Israel, and Sweden.
As of the end of the first quarter, the Court had granted the Receiver summary judgment in three of the five actions, with the motions in the Canadian and Swedish defendant lawsuits still pending resolution.
In addition, the Receiver Team continued to pursue fraudulently transferred assets from foreign net winners against whom the Receiver has already obtained judgments.
Payza, PaymentWorld & VictoriaBank
Attempts to recover $13.1 million dollars in stolen investor funds continues. Unfortunately most of the recent filings in the case have been sealed, so I haven’t been able to report anything concrete.
Looking forward however, VictoriaBank’s Motion to Dismiss will be decided at a hearing on May 3rd.
To recap, the Receiver is attempting to recover $13.1 million from Payza, PaymentWorld and/or VictoriaBank.
I’m expecting the Judge’s decision will provide some clarity as to where the case is currently at.
Note that the decision might not be available on May 3rd itself but I will publish an update when it’s available.
Dawn Wright-Olivares’ House
As part of her settlement with the Receiver, Dawn Wright-Olivares’ family home was surrender.
There’s currently a lien on the property which the Receiver is working to remove, after which it will be sold off.
Sam Adlerman and S.T. Eagle, Inc.
Sam Adlerman and S.T. Eagle Inc. were named defendants in the Gary Bessoni Peak Leads USA litigation.
Bessoni has since settled for $175,000 with Sam Adlerman opting to defend the matter in court.
The lawsuit was still in the discovery phase during the first quarter of 2017.
In addition to engaging in discovery, the Receiver Team evaluated the next steps in proceeding toward the close of discovery in the case.
Tax attorney Howard Kaplan was sued by the Zeek Receiver back in 2014.
Kaplan doesn’t think he is obligated to return stolen funds he received in exchange for giving Zeek Rewards “bad legal advice“.
The matter is slowly playing out in court, with settlement negotiations to take place over the next few months.
In a subsequent Order dated February 23, 2017, the Court directed the parties to confer and devise more narrowly focused search terms than originally requested by Kaplan for searching the database of the Receiver.
In addition, the Court ordered the parties to proceed to mediation within 60 days, by April 24, 2017.
SHBB and owners James Moore, Oscar Brown and Robert Mecham, assisted in the promotion of Zeek Rewards at a corporate level.
The Receiver sued them for $750,000 in June of 2015.
In the lawsuit against USHBB and its principals, the Receiver evaluated the next steps in proceeding toward the close of discovery.
Money In and Out
To date the Zeek Receivership has recovered approximately $363 million of stolen investor funds, $320.3 million of which have been disbursed to victims.
The Receivership returned $47.2 million dollars to Zeek Rewards victims during the first quarter.
Remaining funds yet to be distributed stand at about $43.5 million.
As of March 31, 2017, the Receivership Estate held approximately $42 million in the Affiliate Payments Account and approximately $1.5 million in the Holdback Account.
A copy of the Zeek Receiver’s “Quarterly Status Report Q1 2017” and accompanying exhibits are available from the Zeek Receivership website.
Update 4th May 2017 – A hearing on VictoriaBank’s Motion to Dismiss was held as scheduled on May 3rd. The matter has been taken under advisement.
Update 24th May 2017 – Howard Kaplan and the Receiver held a Mediated Settlement Conference on April 24th, the outcome of which was an “impasse”.
Pending a settlement later on, looks like Kaplan wants to take the matter to trial.
The latest on the case docket is an amended answer to the Receiver’s initial complaint filed by Kaplan on May 18th.
Update 7th June 2017 – Howard Kaplan’s case continues toward trial.
An order made on June 2nd has set discovery due January 2nd, 2018, motions due January 30, 2018 and a trial to be scheduled sometime after February 28th, 2018.
Thanx again for the updates…I really appreciate knowing what’s going on with these crooks, people we trusted…they need to be forced to give back…
Keep up the good work…
I am wondering where all the big Zeek net winner are hiding form Great Briton like, Kalpesh Patel, Ash Camplell and others like Alex Moody from Scotland.
Are they getting away with murder?
Other notable net winner from the UK was Shaun Smith… I do hope that catch these guys.
Article updated with news of VictoriaBank dismiss motion decision taken under advisement.
All I want to say is I was finally happy to mail that money order to the receiver and put this nightmare behind me.
I think making a deal was the best choice and the ones who ignored the option will have to deal with this for years to come still.
When did you make a deal with the receiver and how much were you able to negotiate? How much in %?
They only take money order? They don’t take card payment or paypal?
Is it better to communicate with the receiver via email or phone? Also, after you mail the money order, they will never bother you ever again?
1. You negotiate a settlement amount – you can do it all by email.
2. The Receiver will send you a settlement contract to sign.
3. You sign it and fax or scan and send PDF via email.
4. You obtain MONEY ORDER or CASHIER’S CHECK for the agreed amount and mail that along with the signed settlement.
5. Receiver will deposit the check and when it clears + court approves settlement (they have approved all the Receiver proposed settlements thus far), Receiver will sign the contract and send you a copy with both signatures.
You can also negotiate payments over time. Sometimes the Receiver will want an upfront deposit and then some monthly payment over 12 months if you really can’t pay it back all at once.
If you have credit card or paypal, you just need to convert it to cash and get a cashier’s check or money order.
@tom I made deal before the portal was closed. I was able to negotiate to pay back 50% of earnings and they took all pending NxPay funds. I had to sign court documents. I had to pay back in money order or certified check.
Since portal closed I would assume you not be able to make deal but try to contact them and see.
Yes, now I paid they leave me alone, but per agreement they could come after me again within 1 year if they feel I lied about being able to pay back.
@Erik what do you mean by if they feel you lied about being able to pay back? Do you mean if you lied about your negotiation that you can only afford to pay 50% back? What do they mean if you lied about being able to pay back?
So I’m kind of leaning towards paying back, but in my situation its a little more complicated and i’m not sure if i’m able to appeal this, as they seem to not be willing to hear anything out since the appeal window closed.
And I want to mention that why do they only accept money order? Isn’t that ridiculous? Money order is non trackable, they could be like I didn’t pay them or something.
So in my situation, the receiver is after me and they think I am the person who netted the claim amount because my name is on the registration.
They failed to look deeper that I only registered for the account and don’t realize that the person who netted and SSN on the account is another person whom I gave the account to after I decided to not deal with Zeekrewards and save the convience of another person in creating a zeekrewards account.
I may be willing to settle with the claimed amount but will the account settle? That means, will they leave me and the person I gave my account to also settle and not bother her too?
When you pay and settle. Does the account settle? I mean does all information on that specific account settle? Regardless of the non matching names and wrong info on the account? Because the receiver has my information mixed up with the actual name who netted on that account.
I netted $0, but they are after me and not after the person who actually netted. My name is on the registration of the account but the person who netted is the one who netted the claimed amount by the receiver and it has her SSN on the account and not mine.
Pay up and learn your lessons.
1. Don’t invest in Ponzi schemes.
2. Investing in Ponzi schemes and trying to game the system with bogus accounts is expensive when you’re caught.
Oz, if you couldn’t tell… I netted nothing from Zeekrewards… And if you still couldn’t tell, I was unaware about the situation because I gave up in trying to join or believe these types of programs.
If you could maybe provide assistance with my concerns would be great.
Is there a more recent list of net winners list?
I’ve already told you, I refuse to believe this is the first email you received from the Receiver (if your “friend” deleted/ignored emails that’s still on you).
I’ve also told you, you need to go and speak to a lawyer if you want legal advice regarding your situation. Jimmy has been kind enough to provide you with some information and suggested you do your own research.
Which you appear to have ignored because a few comments later you asked “Who is the Receiver?”
If you had one Zeek account or responded within the ample time net-losers were given to file claims, you could show you are a net-loser. Because you got greedy and tried to game a system gaming you, you reinvested your ROI over multiple accounts with bogus details.
Them’s the breaks.
I really don’t care if you believe me or not. I’m not forcing you to believe me. And I never even asked you to believe me so im not even sure why you’re brining this up.
Never once tried and convinced you to believe me. I’m just bringing up my situation because you seem to kind of asked and just telling my story. It’s up to you to believe or not which you stated multiple times that you don’t believe me. Fine.
And yes, I am in the process in speaking with a lawyer. I didn’t mention it, doesn’t mean I havent.
And yes, I have been doing research. Otherwise, I wouldn’t have these questions.
No comments to your other insane speculations.
You’ve been helpful too.
Dang OZ… why you being so hard on Tom? I understand it’s your website and all but seems like you taking it personal.
I don’t know Tom so it’s nothing personal.
Probably a bit of frustration on my part after having written 192 articles over six and a half years extensively covering the clawback and victim claim process, only to have a net-winner rock up at the eleventh hour and go “I don’t know anything, tell me everything”.
I just found out about the whole situation less than a week ago and that I had to pay.
Believe it or not.
I’m still researching but I’m 5 years late, trying to catch up on everything
Hmmm, a Ponzi that’s able to pay back 75% of the money invested… not much of a Ponzi… can anybody say railroad.
Zeek Rewards the Ponzi was shut down in 2012. Had it of continued, a few thousand affiliates would have continued to receive the majority of funds invested at the expense of hundreds of thousands of victims.
75% recoveries for victims with valid claims only happened because the Ponzi was shut down and clawbacks.
Can anybody say scammer trying to manipulate the facts?
Only due to diligent efforts of the receiver in suing all the net winners AND settlements from the various banks and institutions that rather pay a fine than admit guilt… AND care to guess how many victims didn’t file any claims or had their claims disallowed due to various problems?
Let’s set some scope and see how your commentary was so off the mark it’s clear you’re in la-la land.
So far, receiver was only able to marshall, as of 3/31/17, about 360 million. That’s including all the settlements, and there are still tens of millions out there having been shuffled in Eastern Europe such as VictoriaBank.
We all know 363 million wasn’t CLOSE to 75% of the money that went through Zeek during the few years it was in operation. It’s less than 50%. Probably closer to 40%. The judgment against Paul Burks said 939 million fraud.
Furthermore, consider the fact that only 122000 claims were paid out. Against 2.2 million “customers” of Zeekler/ ZeekRewards.
The “75%” figure is meaningless once you know the context.
I wouldn’t go that far. It’s by far the best victim recovery I’ve seen in an MLM Ponzi.
Using the percentage to justify a Ponzi scheme is sustainable though is disingenuous (because of context).
Why couldn’t the executive at seem just pay for all the damages. They were broke and had no assets?
Because millions had been paid out to the top scammers of the scheme, plus what was seized.
Although Paul Burks, Wright-Olivares etc. received the most money per individual connected to Zeek, it was still a small percentage of the total amount invested.
I am curious if the receiver does turn collections over to a third party, how much force will the third party have in getting the monies.
It would seem a third or a private party collector would not have the same enforcement power as what is in place now, as there are laws to protect consumers from some collections, and even may be easier to have the debt discharged.
If the receiver is unable to collect all the $$$ then how they going to pay back the remainders?
They should take all of paul burks assets and pay everyone back then go after the net winners to pay off the remaining money.
The debt collectors will have the full force of civil litigation. They will likely start with phone calls and emails, perhaps even incentivize you to settle for a lesser amount than what is owed. But keep in mind by not settling, the debtor will owe the final judgment amount which includes pre-judgment interest.
Dealing with the Receiver is much simpler than debt collection. You are probably referring to FDCPA and how most county superior courts have special rules for debt collection cases (to streamline them, because there are so many of them). But there are a few differences in dealing with a final judgment than just a bill that you owe.
1. The judgment is on your credit report, putting pressure on you to resolve it.
2. Traditional ways of removing derogatories by challenging the line item with the credit bureaus or sending rude letters to the collector threatening a violation of FDCPA won’t work because the judgment is final. It’s not an alleged debt that might become a judgment, it is a judgment.
3. Many consumer debt collection advocates will talk about how it is easy to remove a judgment. They are usually referring to a *default* judgment, such as when you ignore the debt collector. You can vacate a default judgment, but then you have to fight the lawsuit.
4. Usually, as the consumer/debtor/defendant you can fight a debt collection lawsuit because the plaintiff is a third-party company and they can’t establish proper foundation, i.e. they can’t prove that you owe the debt or that even if you owe the debt, that they have assignment rights to collect on it. This is how you normally fight a debt collection lawsuit.
The plaintiff will have some notarized documents, but they won’t be able to produce the original signatories as a witness. They will introduce evidence that can be challenged as hearsay, such as bank records. If you do not stipulate to genuineness and authenticity of documents, the plaintiff has to get the documents admitted through a custodian of records for the business.
But few debt collection lawyers will do this – they are bottom of the barrel litigators and just going after easy prey (fish in a barrel).
They won’t do all the legwork necessary to win vs. a vigorous defense, and generally, the cost to do so is not worth it – the debt collector is better off just selling the paper to another debt collector. But this requires you to be willing to represent yourself in court or hire an attorney.
5. But the debt collection defense strategy in #4 is not likely to work in the Zeek case because the Receiver has spent years compiling all of the foundation needed. (My speculation) the Receiver will likely deliver every to any third party debt collection all the paperwork needed for successful litigation.
6. Depending on what your net winnings amount is, it’s possible the Receiver could seek to sue you individually to recover money. (My speculation) the number is probably somewhere around $15-25k – if the amount you owe + pre-judgment interest is less than that, the Receiver might sell off to debt collectors.
But if the amount is in that $15-25k range, that’s where debt collection lawsuits with good foundation (paperwork, witnesses, assignment rights) are a positive ROI. Over $25k, you should expect a lawsuit (again, my speculation).
So the question you need to ask yourself is:
– Are you okay with having a judgment on your credit report?
– Are you okay with phone calls and letters to your home or work? (You can request the debt collector stop calling you, but this can also accelerate the path to litigation, and it doesn’t always work even if FDCPA requires them to stop calling.)
– What is the probability that you will get sued by the debt collector?
– Reminder, you will owe pre-judgment interest added on to the net winnings amount.
Victims with approved claims have already received up to 70% back. It’s not (and never was) going to be a 100% recovery.
Article updated with news of Howard Kaplan settlement “impasse”.
Is notice by email a legal way to notify someone of possible judgements against them?
From the judges’ order:
The court signed off on it in this instance, so yes.
Yes. I know many Net Winners who have the incorrect belief that since they weren’t served with a notice in person (like you would normally receive if someone were serving a complaint against you), that they would be exempt from judgment; or that they could challenge the judgment at a later date.
This was a class action. You know the number of times you are a party of the plaintiff class in a class action and receive a postcard in the mail? In some cases, you might see a radio or TV ad, or even receive an email.
Classes can be so large that individual service is not practical, so judges allow for substituted service, especially to class members who are not representatives of the class. The class representatives are individually named in the complaint are defending on the class’s behalf.
Even if you didn’t receive an email, if you are on the list published by the Receiver and submitted to the court, you will receive a judgment unless you settle.
All I know is I was more then happy to pay-up and put this to rest. Just waiting on my signed papers and never going to get caught up in one of these again.
Best thing anyone can do is settle with the receiver because it will only get worse for you later and you will wish you did. They (the receiver) was more than fair on the settlement. You won’t win this battle just pay and be done.
You are so right. Regardless what some may think, I don’t see you, or most of the “net winners” as scammers, but were caught up and had the same desires and goals as did the “victims,” juts some put in more effort or got in sooner.
Article updated with news of Howard Kaplan’s trial progress.
Let’s see, the court documents filed say that only 2% of the daily profits came from the penny auction. Really! Just one 100 cash card sold sometimes for more than $100. At $100/.01 =10000 bids @ .65 cent a piece, $1 if VIP. That’s at least 6500.00 for $100 card or $10,000 if $1 VIP bids, which most probably were.
Multiply this by the 100’s of items auctioned everyday…some of them 200 and 300 dollars.
Thing is, do these people, including the judge reviewing the case, understand how zeek worked? From my experience…the program was difficult to understand.
Knowing how much money was flowing through the auction everyday, 24/7, first hand, it is hard to comprehend a statement , by an official of the court(the receiver), that only 2% in profits were being made everyday.
Where do they say that?
VIP bid ROIs meant neither Zeek Rewards or Zeekler was ever profitable. There was no “daily profit”, each dollar spent generated a greater than 100% ROI liability.
Apparently the filing did not consider the bid purchases of affiliates, who then went to the auction and used those bids, in their calculation.
You’re either misreading or misinterpreting the actual SEC complaint.
That’s just it…They are saying the bids were not used, but who was bidding on all the products at a 1 to 100 ratio.
I mean do the math…Funds going through zeek 985,000,000 times 2% 19,700,000. How many products were sold on the auction at this 1 to 100 ratio in a day.
Even a conservative 100,000 dollars a day produces 36,000,000, just one year. And that would be from just 10 products at 100 dollars each per day. It was more like 100+ products a day @ more than 100 dollars (10,000 dollars profit).
The point, which you seem to be missing, is MAJORITY of the money was redistributed per Ponzi scheme. The penny auction was profitable, but nowhere CLOSE to being as profitable as portrayed, because 99.75% of the bids were NEVER USED (thus pure profit for Zeek)
So 985 million * 0.0025 = 2.46 million bids, used over… oh, how long was Zeekler operating? 2 years? That’s what, 3300 bids a day?
Bids purchased != bids used.
99.75% of bids purchashed/invested in went unused.
Whatever bids were purchased by retail customers was utterly dwarfed by affiliates investing in VIP bids, which through the daily ROI quickly swallowed up any profits.
Again, neither Zeek Rewards or Zeekler was profitable.
$6.3 million doesn’t even cover what the top three Zeek Rewards affiliate owners stole. Let alone the thousands of other net-winners.
You’re taking factual figures and mixing them with malarkey made up estimates of how many auctions you think Zeekler processed each day.
Every retail dollar spent on bids in Zeekler was used to pay off existing liabilities through the Zeek Rewards daily ROI scheme. There was no profit.
Ponzi schemes don’t generate profit. They generate ever-increasing liabilities until they either collapse or are shut down.
How does a Ponzi scheme repay 75% of the money invested into it?
Notice that the filings only speak scantily about the Auction, because the Auction will defeat the Ponzi Theory. And frankly, I think you know nothing of the auction, you are using the events of Zeek to popularize your site.
When you bid on a penny auction, you must use bids. Bids, which you purchase BEFORE, you bid. These bids do not “Profit” you anything, because if you don’t win, you get nothing in return for your bids. (Ozedit: Snip, see below.)
Now if these (points) were stocks, how do stocks expire in 90 days? Stocks are an intangible, transferrable asset that keeps it value depending on the underlying value of the company they are connected to.
These points were not transferrable, had no value, except something used to determine your share of daily profits for the next ninety days.
Nobody cared about the Zeekler penny auctions. They were a joke.
Affiliates pumped $850 million dollars into VIP bids on the promise of a greater than 100% ROI.
Affiliates had to give the bids away, which made up the majority of bids used 0.25%. There was only a tiny percentage of auctions where VIP bids couldn’t be used IIRC.
The rest of the 99.75% of bids were dumped on dummy accounts created by affiliates to qualify for ROI payouts.
If you don’t understand how Zeek Rewards ROIs were tied to Zeekler VIP bids, it’s you who doesn’t understand the compensation plan.
It doesn’t. Zeek Rewards victims have been compensated up to 75% of their losses from stolen Ponzi funds seized by the authorities and recovered by the Receiver.
Zeek Rewards was on the verge of collapse when the SEC shut it down (enough money left to run for 1-1.5 months more IIRC). At that point the majority of affiliates had lost money, so it only turned a profit for a tiny fraction of affiliates.
As all Ponzi schemes are wont to do.
(Ozedit: All your questions are answered in the SEC complaint. I’m not interested in debating the merits of a Ponzi scheme five years after the fact. Kthxbye.)
Please don’t rehash defeated net-winner garbage arguments and expect a response here.
Zeek Rewards was a Ponzi scheme by virtue of its business model. Proven in court against the net-winners and the owner and several executives have been sentenced to jail for wire fraud.
But oh no, some random scammer knows “the real story”. Bitch, please.
Edit: Aaaaaand you’re a sovereign citizen religious nutjob to boot. On ya bike chief.