Zeek Receivership’s 4th Quarter 2014 Fees & Expenses report
Intended to be a summary of the financial status of the Zeek Receivership as of December 31st 2014, the Reciever’s latest fees and expenses report nonetheless provides us with some new tidbits of information.
The report comes in at thirty-one pages in length, with much of what is presented having already been reported on here at BehindMLM (check our Zeek Rewards archive articles between October and December 2014).
Due to the size of the report, for simplicity’s sake I’ve broken it down into new information under various subheadings below.
One of the long-running issues in the Zeek Ponzi cleanup has been that of cashiers checks sent in by affiliates.
Prior to the shutdown, Zeek Rewards held a large number of uncashed checks. After the Receiver was appointed these became property of the Receivership (Rex Ventures Group).
Trouble is a number of investors panicked following the SEC shutdown, and had their banks dishonor the checks.
In the quarter ending December 31, 2014, the Receiver’s conflicts counsel, Erwin, Bishop, Capitano & Moss, P.A. (“EBCM”) continued working to resolve claims against financial institutions arising from dishonored cashier’s checks, teller’s checks and bank money orders.
As of December 31, 2014, EBCM had resolved six claims pending completion of settlement documentation, and continued work on thirty-two active claims with a gross adjusted value of $465,668.
Discussions with responsible parties on the thirty-two remaining claims are at impasse such that litigation will be required to resolve these claims.
In an effort to resolve these issues, a claims process was set up to initiate a dialogue between the Receivership and financial institutions who dishonored the checks in question.
EBCM also assisted the Receiver by preparing and administering claim stipulations for eligible banks and related parties that paid money to the Receivership to resolve claims for dishonored instruments after the court-authorized extended December 1, 2013 claims deadline for certain financial instruments.
As of December 31, 2014, claim stipulations are complete or in process for thirty-two financial institutions.
Thirty financial institutions that are potentially eligible to file claims against the estate did not respond to the Receiver’s invitation to enter into a claim stipulation.
The Receiver is at an impasse in negotiations with several banks over the cashier’s check claims.
As a result, the Receiver has decided to pursue those claims through turnover / civil contempt motions under the freeze order.
Expect those lawsuits to hit sometime later this year.
Payza currently hold $13.2 million in Zeek Rewards funds, which the Receiver continues to negotiate the return of.
With regard to the approximately $13.2 million outstanding from Payza and/or Payment World, the Receiver Team met and conferred with Payment World’s counsel, seeking the production of outstanding information and documents responsive to the Receivership’s subpoena and information about individuals who may have information to assist in recovering the assets from VictoriaBank in Moldova.
The Receiver Team also continues to pursue avenues of communication with and options to recover assets directly from VictoriaBank in Moldova and will continue to explore all available options in its efforts to recover the outstanding funds.
In November 2014 the Receiver sued the top Zeek Rewards Canadian net-winners.
The Receiver worked closely with Canadian counsel and an investigation firm to locate and serve the defendants with legal process.
The Receiver obtained entries of default against eight Canadian net winners. Two of these net winners subsequently
settled with the Receiver.
The Receiver is pursuing default against the remaining defendants who have failed to answer the Amended Complaint and will file these motions in the first quarter of 2015.
BehindMLM reported on default judgement granted against Canadian net-winners in early January.
Settlement with Zeek Rewards insiders
The Receiver has now settled with each of the defendants named in the lawsuit against insiders of the ZeekRewards scheme other than Darryle Douglas, against whom the Receiver has obtained a default judgment.
Other Zeek Rewards insiders first named back in March of 2014 include Paul Burks, Dawn Wright-Olivares and Roger Pyler.
Lawsuit against Kevin Grimes and Grimes & Reese (now R&R Law)
In June 2014 the Zeek Receiver sued Kevin Grimes for “legal malpractice”.
Grimes, a well-known MLM attorney, was paid almost a million dollars to assist Zeek Rewards.
In the Receiver’s action against attorney Kevin Grimes and his former law firm and business entity, the defendants filed motions to dismiss.
The Receiver filed responses in opposition to these motions to dismiss, and the Court is in the process of resolving these motions. The parties are now discussing the prospects of a settlement conference, which may occur during the first quarter of 2015.
I’m not sure whether that conference has as of yet taken place.
Lawsuit against Howard Kaplan
Filed around the same time as the Kevin Grimes lawsuit, the Zeek Rewards Receiver also went after Howard Kaplan for “legal negligence”.
In the Receiver’s lawsuit against attorney Howard Kaplan, the Court is in the process of resolving the defendant’s motion to dismiss.
The Receiver will pursue discovery in this matter during the first quarter of 2015.
The Receiver seems pretty confident that Kaplan’s Motion to Dismiss will be denied.
For anyone interested, here’s the financial status of the Zeek Rewards Receivership as of December 31st, 2014:
$323,592.12 (was deposited) into the Settlement Account from settlements with net winners.
As of December 31, 2014, the Receivership Estate held approximately $90.7 million in the Affiliate Account, approximately $118 million in the Seized Asset Account, approximately $294,000 in the Pre-Filing Account, approximately $4.7 million in the Settlement Account, $0 in the Withholding Account, and approximately $1.1 million in the Holdback Account.
Personally I’m looking forward to the conclusion of the Grimes and Kaplan lawsuits, as well as the check issue with the banks.
Whether or not the Receiver can get back the $14.2 million Payza are holding on to should also be interesting to watch.
One thing I hope we might see resolved by the end of the year is the US clawback litigation. Two of the designated Class Representatives are heading towards default judgement, will we see others settle if it’s granted?
As we barrel on towards the third anniversary of the Zeek Rewards Ponzi shutdown, as always – stay tuned…
Footnote: Our thanks to Don@ASDUpdates for providing a copy of the Zeek Receiver’s 2014 Fourth Quarter Fees and Expenses Report.
when is the next payout to zeek victims?
Please help me!!
I have not recived my payment as of yet > My name is Juan Ramos
I have lost $10,000, have filed a claim and have not received any monies.
Can anyone there please help me??
I have emailed about 10 -20 times to the receivership and may have filed the claim incorrectly.
My name is Juan Ramos
my Claim Id# (Ozedit: Personal information removed)
Please help me I have 2 disabled children under 18 years of age and my wife just lost her job. We need this money to survive. Please help us!
My address is (Ozedit: Personal information removed)
my phone is (Ozedit: Personal information removed)
Please let me know where else I can write call or email to get a response
Juan Ramos USA
IIRC The Receiver put out an update stating they are no longer responding to claim enquiries. They set up a claims portal which you’ll have to login to.
Login and check the status of your claim.
From zeekrewardsreceivership.com, from one of the newest updates on the front page:
“respond to your Letter of Determination” / “provide the release”. That’s the most common reason for why people haven’t received anything.
The claims portal on gardencitygroup.com is where you can log in and check the status of your claim, and where you will find the letter of determination.
Zeekrewardsreceivership.com is where you can find general info to the whole group of net losers.
Why should you receive you’re investment back when you knew it was a risk to become a member with Zeek rewards.
All these victims are BS everyone knew that this as a penny auction and a investment if you Earn money great if you lose to bad…. But everyone knew that this was an investment…
Bell is sitting on a mountain of cash, and hiring all his buddies!
This could easily go 10 more years in bells mind as he intends to bag the cash!
Like they want discovery on the business model (NOT!)
How can you call it, what they say it is… without a fair jury trial on the business model…RIGHT!
This is America! Demand Discovery on the business model!
Are their valid points for distributors? (Probably!)
Why is their not a class action suit place by distributors???
Were Bell / Mullens cherry picked for the ripe ($) tree???…sure looks like it!
Just like the stock market people knew there was risk involved, actually more! JHeez who puts more than 1k in a penny auction??…answer a idiot who dam well knew it was risky!…they lost money and ‘knew it was risky’ so quit crying!
Bell trying to recover all their money is BS!…your just billing up a storm going after the last of whats not there…
I lost money on more market trades and don’t cry either…well not long!
This needs to go away…I see no good in this for winners, losers etc…the only winner is Bell
I smell clawback ligitagion sour grapes!
Bell’s every move is watched over, approved and reported to the court overseeing the case. Millions have already been paid out to Zeek Rewards victims, destroying most of the fiction you presented.
Because a business model determines the existence of a Ponzi scheme.
Burks’s criminal trial is ongoing, his second in command has already plead guilty to numerous counts of fraud.
Say it with me, “Zeek Rewards was a Ponzi scheme”.
Demand what discovery? The SEC already have access to everything and revealed 0.25% of bid revenue was retail, the rest of it was investment fraud.
Zeek Reward’s business model is wholly known, Burks sat in a room and just paid everyone monopoly money at the end of each day.
So again I’ll ask, what’s left to discover?
Because there are established procedures for dealing with Ponzi investment fraud. Class-action lawsuits representing select investors is not in the interest of victims ad a majority.
Whether there was risk involved is immaterial to the fact that Zeek Rewards was an illegal Ponzi scheme.
So, how much did you have to pay back your victims? Here’s a tissue…
Because the risk was VASTLY understated. Fradulently so.
You’re basically reciting the Paul Burks excuse “I never told them to put in any money they can’t afford to lose. Don’t blame me.”
Not Bell’s 2nd in command, Oz. I think you mean Burks?
That I did, thanks for catching that.
News has been nuts this week, I haven’t been able to keep up. Going through the new clawback litigation docs now…
Guess that means no more reviews for this week!
Can you also fix up the blockquotes? 🙂
Son of a…