Zeek Rewards Ponzi paid Kevin Grimes $843,000
One of the recurring questions that arises whenever a shadier MLM company attempts to market itself on the reputation of their lawyer, is “what on Earth are they thinking?”
Often times these are individuals who have practicing law for decades, yet there their names are – intertwined with what are obviously business models bound to fail regulatory scrutiny.
It’s a question many of our readers ask and, not being an MLM lawyer, it’s one I really don’t have a concrete answer to. These are professionals who are supposed to know MLM regulation both inside and out, so why does this keep happening?
Well, from an amended complaint filed by the Zeek Rewards Receivership yesterday, here’s one reason:
Grimes and MLM Compliance received approximately $843,000 from RVG.
Kevin Grimes (right) is a well-known MLM attorney. In analysing the Receivership’s first legal malpractice lawsuit against him we’ve already covered the meat of the suit, so refer to that report if you’re after background information.
What was absent from the original complaint was the $840,000 figure, which simply boggles the mind.
A compliance attorney receiving nearly a million dollars from what was always nothing more than the most obvious of Ponzi schemes.
And affiliates wonder why I shrug off their claims of compliance “because our attorney said so”, no matter how black and blue they go in the face shouting it.
Is this really what MLM compliance has deteriorated into over the years?
What’s even more depressing than Grimes’ selling out his reputation for a Ponzi payday is the fact that he doesn’t appear to want to willingly return the stolen funds he was paid with.
Grimes knew or should have known that insufficient income from the penny auction business was being made to pay the daily “profit share” promised by ZeekRewards.
Grimes knew or should have known that the money used to fund ZeekRewards’ distributions to Affiliates came almost entirely from new participants
rather than income from the Zeekler penny auctions.
Further, Grimes knew or should have known that the alleged “profit percentage” was nothing more than a number made up by Burks or one of the other Insiders.
Grimes and MLM Compliance knowingly allowed Zeek to portray a false appearance of legality through their bogus “compliance” course.
Grimes appeared on ZeekRewards “leadership calls” with Dawn Wright-Olivares on three separate occasions, promoting ZeekRewards to Affiliate leaders
and furthering the false impression that the scheme was legitimate.
Grimes & Reese, Kevin Grimes, and MLM Compliance Played an Integral Role. Grimes knew or should have known that RVG, with his assistance, was promoting an unlawful unregistered security.
As a result, Defendant Grimes & Reese is liable for the tortious acts of its employee, Kevin D. Grimes.
In addition, Grimes and MLM Compliance are liable to repay to the Receiver the more than $840,000 they received from RVG for the bogus compliance course.
Come on man, you were paid nearly a million dollars for helping facilitate and promote one of the largest Ponzi schemes in US history… and then you got caught.
At least have the decency to pay back the stolen funds you were paid.
Footnote: Our thanks to Don @ ASDUpdates for providing a copy of the Receivership’s amended compliant.