Zeek Reciever sues USHBB & operators for over $750,000
Narc That Car, AdSurfDaily, Zeek Rewards and OfferHub.
Other than being scams, what do these MLM opportunities all share in common?
They all solicited the promotional services of marketing firm USHBB.
Owned and operated out of Indiana by James Moore, Oscar Brown and Robert Mecham, USHBB provided marketing services to the MLM underbelly.
Now for their efforts in assisting the promotion of some of the most prolific MLM scams to date, the Zeek Receiver has taken USHBB and its operators to court.
At the center of the litigation is the funds USHBB made from Zeek Rewards, including profits made by Moore, Brown and Mecham through direct participation in the $850 million dollar Ponzi scheme.
From January 2011 until August 2012, RVG operated a massive Ponzi and pyramid scheme through ZeekRewards.
USHBB, Inc. (“USHBB”), James A. Moore, Oscar H. Brown, and Robert Mecham profited from their role in promoting and sustaining the scheme, collectively receiving more than $1.5 million from RVG.
For creating promotional videos that were used to lure new investors into the scheme, USHBB was paid $675,000.
Oscar Brown (commonly known as “OH Brown”) used USHBB to sign up to Zeek Rewards itself, and managed to steal $168,642 from investors before the scheme was shut down.
Both James Moore and Robert Mecham also signed up as Zeek Rewards investors, stealing $109,130 and $868,542 respectively.
Brown and Mecham also each received a separate (and unexplained) $25,000 payment from a Zeek insider, transferred the same month the SEC shut the scheme down (Aug 2012).
All up the trio made off with no less than $1.8 million dollars in stolen investor funds.
The Defendants have previously provided assistance to suspect schemes, including the Ad Surf Daily Ponzi scheme and one or more other failed MLM operations.
Simply put, the Defendants knew or should have known that affiliates were rewarded merely for recruiting new investors without regard to any efforts by the Affiliates to sell bids or products or otherwise materially support the Zeekler retail business.
Bearing in mind USHBB’s past involvement with scams, the picture painted by the Zeek Receiver is that of conniving scamsters exhibiting calculated intent.
Consistent with this dubious track record, the Defendants assisted the ZeekRewards scheme by creating multiple videos that served as promotional tools for ZeekRewards.
These videos included the titles “One Penny Billionaire,” “You Get Paid to Advertise,” “Got 20 Seconds,” “The Dog Gone Truth,” and “Spin the Wheel.”
The videos were carefully produced to mislead and deceive victims into participating in the scheme, convincing victims that with minimal effort they could earn significant financial returns from the Zeek scheme.
These videos assisted the Insiders in promoting the alleged ease with which affiliates could earn passive profits by investing in the scheme and selling membership in the scheme to others.
Affiliates were told to mention the ZeekRewards program to a prospective affiliate or advertise it on a web page, and then email or otherwise provide them a link to the USHBB videos, which upon information and belief convinced other unwary victims to sign on.
The videos were a key component in proliferating the RVG Ponzi scheme, causing significantly more victims and financial loss than otherwise would have occurred absent Defendants’ actions.
So entrenched were USHBB’s promotional services within Zeek’s marketing agenda, that the company was permitted to market directly at official Zeek events.
USHBB directly promoted their videos to Affiliates.
For example, in June 2012, Defendant Mecham personally promoted the USHBB “video system” to Affiliates at a ZeekRewards “Red Carpet” event in Lexington, NC.
Through USHBB, Moore Brown and Meecham also worked directly with Zeek corporate to mask the fraudulent Ponzi activity taking place.
in August 2011, ZeekRewards adjusted some of the terminology it used publicly in an attempt to disguise the “Compounder” as a legitimate retail profit sharing mechanism.
The Compounder’s name was changed to the “Retail Profit Pool,” but the substance of this investment vehicle did not change. USHBB was or should have been fully aware of this deceitfulness in which it participated.
In a June 24, 2011 email, Dawn WrightOlivares wrote to O.H. Brown regarding a webinar that USHBB had created for Zeek:
“I started to do minor edits . . . ([Y]ou’ll see them where I started to say Retail Profit Pool) lol instead of Compounder . . . . ”
She further wrote to Brown: “the silent cap [for bid expiration] reality will be 125% but we can’t SAY it as you know.”
Long time BehindMLM readers will of course instantly recognize Wright-Olivares channeling Gerry Nehra’s unique brand of “see no Ponzi, hear no Ponzi, speak no Ponzi” MLM compliance.
Furthermore, it appears USHBB were one of the first Zeek related entities to become aware of an SEC investigation into the scheme:
O.H. Brown wrote to Dawn Wright-Olivares in June 2012:
“Heads up!!!! Our IT partners, RMR development received a telephone call from the SEC today regarding yougetpaidtoadvertise and what organizations were associated.
This was a very short call I am told. Not sure what will come of this but this is an alarm at least that the government is looking.
We need to get squeaky clean and quick!”
That same month Troy Dooly revealed that answering whether or not Zeek Rewards’ incoming revenue was mostly from affiliates would be “out of compliance“.
Zeek Rewards also announced that they would be “migrating” their affiliate-base to a closed private forum. Previously these forums had been open and were used as a promotional tool to further market the scheme.
For their efforts in assisting Zeek Rewards perpetuate an $850 million dollar Ponzi scheme, as well as directly profiting from said scheme, USHBB, James Moore, Oscar Brown and Robert Mecham now face six claims of relief:
- fraudulent transfer of RVG funds in violation of the North Carolina Uniform Fraudulent Transfer Act
- common law fraudulent transfer
- aiding and abetting breach of fiduciary duty
- unfair and deceptive trade practices
- unjust enrichment and
- constructive trust
The court-appointed Receiver’s lawsuit, filed on the 26th of March, requests the defendants pay back the money they received through USHBB. It also requests an amount equal to ‘all damages and losses suffered by RVG and the Defendants’ unjust enrichment in an amount to be determined at trial.‘
Prejudgement interest and attorney’s fees have also been sought.
This lawsuit is one of several steps the Receiver is taking pursuant to his court-ordered duties to the Receivership Estate to recover fraudulent transfers and damages for the harms incurred by RVG.
Who will be next?
Footnote: Our thanks to Don@ASDUpdates for providing a copy of the Zeek Receiver’s March 26th lawsuit.
Update 15th July 2015 – Following a failure to respond to the Receiver’s lawsuit, default judgement was entered against USHBB ($675,000 plus interest) and James Moore ($109,130 plus interest) on the 8th of July.