ASDUpdates.com

My Journal of Internet Schemes/Scams and things that really annoy me

TelexFree: Defendants File “Joint Statement and Proposed Discovery Plan”

Posted by ASDUpdates on August 28th, 2014

We have a rather lengthy filing in the TelexFree civil case, complete with proposed schedules. I will let you read the full document on the Files website.

JOINT STATEMENT AND PROPOSED DISCOVERY PLAN

Pursuant to Fed. R. Civ. P. 26(f) and Local Rule 16.1(D), counsel for plaintiff Securities and Exchange Commission (“Commission” or “Plaintiff”) and counsel for defendants TelexFree, Inc., Telexfree, LLC and Relief Defendant Telexfree Financial, Inc. (collectively, “Telexfree”) as well as defendants James M. Merrill (“Merrill”), Carlos Wanzeler (‘Wanzeler”), Steven Labriola (“Labriola”) Joseph Craft (“Craft”), Sanderley Rodrigues de Vasconcelos (“Rodrigues”), Santiago De La Rosa (“De La Rosa”), Randy Crosby (“Crosby”) and Faith R. Sloan (“Sloan”) (collectively “defendants”) submit this Joint Statement and Proposed Discovery Plan.

Each defendant makes a “statement” and then they offer “proposed plans” for the Court to consider.

 

Tags: , , , , , ,
Posted in HYIP, MLM, Money Laundering, Online Marketing, Other Ponzi Scams, Payment Processors, Pyramid Schemes, Scams, TelexFree, TelexFree SEC Case | No Comments »

Zeek Rewards: Receiver Wants to File a Surreply

Posted by ASDUpdates on August 27th, 2014

In his Surreply, Kenneth Bell asks the Court to consider the following in his proposed Surreply: (surreply: : An additional reply to a motion filed after the motion has already been fully briefed.)

  • Defendants continue to mischaracterize the Receiver’s position in pursuing their own argument regarding the Court’s subject matter jurisdiction. What is more, in their Reply in Support of Motion to Dismiss, they now, for the first time, request a stay of this case for “expedited jurisdictional discovery on the issue of whether the enterprise involved securities” and ask the Court to “allow the parties to brief the specific question of whether the SEC Action involved a security.” (Doc. No. 75 at 9). These requests should be denied because they would waste judicial resources and Receivership funds on an irrelevant inquiry.
  • No expedited jurisdictional discovery is needed, and the Court need not determine whether the SEC Action involved a security.
  • This issue of subject matter jurisdiction has continued to be muddled by the Defendants’ insistent and erroneous focus on the question of whether or not the ZeekRewards scheme involved the sale of “securities,” which is not at all relevant to this action (which seeks the return of fraudulent transfers to the Defendants regardless of whether the scheme involved securities) and not determinative of jurisdiction in the underlying SEC Action.
  • And, there is no dispute that pursuing claims seeking the return of fraudulent transfers from the ZeekRewards Ponzi scheme is at the core of this Receiver’s authorized duties. Rather, the Defendants claim that the Court did not have the authority to appoint the Receiver in the first place because the Court allegedly lacked jurisdiction over the SEC Action. Defendants’ argument – focused on the definition of a “security” – confuses the difference between the grounds for jurisdiction and proof of the elements of a claim.

I have uploaded the Motion and this proposed Surreply onto the Files website.

Tags: , , , , , , , , , ,
Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Payment Processors, Pyramid Schemes, Scams, Serial Promoters, Tax Dodgers, Zeek Clawbacks, Zeek Crazy Stuff, Zeek Rewards Federal Court Cases | No Comments »

Zeek Rewards: Receiver Replies in Support of Consolidated Motion to Dismiss

Posted by ASDUpdates on August 27th, 2014

Today, Kenneth Bell, through his attorneys, filed a Reply in support of his Consolidated Motion to Dismiss the Defendants’ Counterclaims. In this reply, he states (in part):

  • The Defendants seek to save their breach of contract claims by arguing the false premise that the Court cannot somehow consider its own prior orders in determining a motion to dismiss. However, their position ignores the well-established case law to the contrary.
  • Pursuant to the relevant Order, the Defendants are barred from asserting their breach of contract claims.
  • The Defendants suggest that the Receiver wishes to rely upon the stay of litigation to avoid the adjudication of their counterclaims. This is incorrect. The Receiver is seeking immediate dismissal of the Defendants’ counterclaims as a matter of law.
  • As explained in the Receiver’s initial memorandum, Defendants’ non-contractual counterclaims are all barred by the Court’s previous Order requiring NxPay to return Receivership funds to the Receiver. Ignoring this Order, Defendants ask the Court to wear blinders and view only the four corners of their pleadings. However, as explained above, the Supreme Court and Fourth Circuit have instructed that relevant matters of public record should be judicially noticed and considered in determining a motion to dismiss.
  • Defendants have mischaracterized what the Receiver obtained from NxPay pursuant to the Court’s Order. As this Court held, “the Court Orders the RVG funds being held by NxPay® to be turned over to the Receiver.” (Id. at 4). As made clear by the Order and by the Affidavit of Kenneth Mitchell-Phillips of NxPay (SEC Action, Doc. No. 129-1), not all funds frozen in affiliates’ NxPay accounts were RVG funds.
  • Again in this response as they have repeatedly done elsewhere, Defendants oppose the
    Receiver’s requested relief on the grounds that the Receiver was supposedly wrongfully appointed and thus this Court does not have subject matter jurisdiction over the Receiver’s claims. This issue of subject matter jurisdiction has continued to be muddled by the Defendants’ insistent and erroneous focus on the question of whether or not the ZeekRewards scheme involved the sale of “securities,” which is not at all relevant to this action (which seeks the return of fraudulent transfers to the Defendants regardless of whether the scheme involved securities) and not determinative of jurisdiction in the underlying SEC Action.
  • Defendants do not (and cannot) challenge a federal equity Receiver’s right to bring federal actions or the Court’s jurisdiction to hear claims brought by a duly appointed Receiver within the scope of his appointment. And, there is no dispute that pursuing claims seeking the return of fraudulent transfers from the ZeekRewards Ponzi scheme is at the core of this Receiver’s authorized duties. Rather, the Defendants claim that the Court did not have the authority to appoint the Receiver in the first place because the Court allegedly lacked jurisdiction over the SEC Action.

I have uploaded this filing onto the Files website.

Tags: , , , , , , , , , , , , , , ,
Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Payment Processors, Pyramid Schemes, Scams, Serial Promoters, Tax Dodgers, Zeek Clawbacks, Zeek Crazy Stuff, Zeek Rewards Federal Court Cases | No Comments »

Zeek Rewards: Receiver Posts Link to Check Claim Status

Posted by ASDUpdates on August 26th, 2014

From the Receiver’s website:

Claimants are able to check the status of their claim by accessing the following Status Check Link https://cert.gardencitygroup.com/zrwdet/fs/home. The Status Check Link allows you to log in to a webpage using the Registration ID and Password you selected when you registered on the Claims Portal.

Tags: , , , ,
Posted in Zeek Rewards Federal Court Cases | No Comments »

Zeek Rewards: 2 New Developments Yesterday

Posted by ASDUpdates on August 26th, 2014

It seems the saga will never end; at least not any time soon.  The documents we are all awaiting, the settlement agreements with Burks and the both of the Olivares have not popped up on the docket as yet.

Yesterday’s developments are these:

  • Howard Kaplan, former Zeek accountant, has filed a Motion to Dismiss the case brought against him for malpractice by Kenneth Bell, Court appointed Receiver. (14-cv-352). In his Motion to Dismiss, Kaplan states the following:
    • Plaintiff’s Complaint is barred by the doctrine of in pari delicto (A descriptive phrase that indicates that parties involved in an action are equally culpable for a wrong.) I guess he think that the receiver is equally guilty??  Let’s see how the Judge feels about this.
    • Kaplan also filed a Memorandum of Law in support of the Motion to Dismiss, both of which have been added to the Files website.
  • Kenneth Bell, as Court Appointed Receiver has filed several motions aimed at Preferred Merchant Solutions:
    • SEALED MOTION for Order Holding Preferred Merchants in Contempt (with 20 Exhibits)
    • Sealed Document : Memorandum in Support of the Receiver’s Motion to Find Preferred Merchants Solutions, LLC and Jaymes Meyer in Contempt of the Court’s Order Appointing Temporary Receiver and Freezing Assets of Defendant Rex Venture Group, LLC
    • RECEIVER’S MOTION TO SEAL MOTION TO FIND PREFERRED MERCHANTS SOLUTIONS, LLC AND JAYMES MEYER IN CONTEMPT OF THE COURT’S ORDER APPOINTING TEMPORARY RECEIVER AND FREEZING ASSETS OF DEFENDANT REX VENTURE GROUP, LLC
    • RECEIVER’S OPPOSITION TO PREFERRED MERCHANTS SOLUTIONS, LLC’S MOTION TO LIFT STAY AND REQUEST FOR LEAVE TO COMMENCE LAWSUIT AGAINST KENNETH D. BELL AS RECEIVER OF REX VENTURE GROUP, LLC

I have uploaded these (unsealed) documents onto the Files website as well (12-cv-519)

Tags: , , , , , , , , , , , , ,
Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Payment Processors, Pyramid Schemes, Scams, Zeek Clawbacks, Zeek Crazy Stuff, Zeek Rewards Federal Court Cases | No Comments »

Ponzitracker: A New Ponzi Scheme Uncovered Every 118 Hours??

Posted by ASDUpdates on August 22nd, 2014

PZ logo

Ponzi Schemes Remain Prevalent In 2014; Over $1 Billion In New Schemes Uncovered

Jordan D. Maglich Thursday, August 21, 2014 at 9:26AM

Nearly six years after the word “Ponzi scheme” became a household name thanks to Bernard Madoff, Ponzi schemes continue to proliferate and leave a trail of financial destruction in their wake as demonstrated by newly-compiled data showing more than $1 billion of newly-uncovered schemes and over 600 years in prison sentences handed down in the first half of 2014.  In the first six months of 2014, at least 37 Ponzi schemes were uncovered, with a total of more than $1 billion in potential losses.  This equated to the discovery of a Ponzi scheme (1) more than once per week, (2) every 4.9 days, or (3) every 118 hours. Included in this list are at least three Ponzi schemes with estimated losses of at least $100 million or more, with the estimated $300 million in losses in the alleged TelexFree Ponzi scheme ranking as the largest Ponzi scheme exposed in the first half of 2014.

The data, permanently housed in this database and also displayed below, is presented as a reminder that Ponzi schemes remain rampant in the United States and worldwide despite mounting government and regulatory efforts.  Indeed, the 37 schemes discovered during the first half of 2014 suggest that at least 74 schemes will be discovered in 2014 – approximately 10% more than the 67 schemes unearthed in 2013.

Read the rest of the story here

Tags: , ,
Posted in HYIP, MLM, Online Marketing, Other News, Other Ponzi Scams, Scams, Securities/Bonds, Serial Promoters, Tax Dodgers | No Comments »

Zeek Rewards: Defendants File Reply in Support of Motion to Dismiss

Posted by ASDUpdates on August 20th, 2014

As if this case could get any more odd, we have this filing (ZeekDoc75) in which defendants:

Trudy Gilmond, Trudy Gilmond, LLC, Jerry Napier, Darren Miller, Durant Brockett, Rhonda Gates, Innovation Marketing LLC, Aaron Andrews, and Shara Andrews (“Defendants”) file this Reply in Support of Defendants’ Motions to Dismiss in response to the Receiver’s Consolidated Response in Opposition to Defendants’ Motion to Dismiss (“Response”)(Doc. No. 67) and in further support of Defendants’ Motions to Dismiss Pursuant to Rules 9, 12(b)(1) and 12(b)(6) (Doc. No. 21) (“Motion”) and Memorandum in Support of Defendants’ Joint Motions to Dismiss Pursuant to Rules 9, 12(b)(1), and 12(b)(6) (Doc. No. 25) (“Brief” or “MTD Brief”).

I got tired just typing that….. but, I digress… One of the more moronic defense points made is this:

the real issue is this: must the Court finally consider whether the SEC Action1 involved a security? The only asserted basis for subject matter jurisdiction in the SEC Action was the SEC’s unsupported claim that the case was based on securities. No security; no jurisdiction. (I wonder if anyone else ever used this self-same argument??)

Since subject matter jurisdiction can be raised at any time and cannot simply be agreed to by the parties, the Court should consider now whether these cases are based on securities. At a July 23, 2013 hearing in the SEC Action, the Court said it would do so. See infra, Section II.B. At the same hearing, both the SEC and the Receiver (contrary to what he now claims) agreed that the issue could be considered now on the merits. See infra, Section II.B. Defendants attach the entire transcript of that hearing as Exhibit A.

I will refrain from going further with snippets from the filing; if you would like to read the Motion and the Hearing Transcript (Exhibit A) as mentioned above, they are both available on the Files website.

 

Tags: , , , , , , , , , ,
Posted in HYIP, MLM, Other Ponzi Scams, Payment Processors, Payza, PIMPs, Pyramid Schemes, Scams, Serial Promoters, Tax Dodgers, Zeek Crazy Stuff, Zeek Rewards Federal Court Cases | 3 Comments »

TelexFree: Government Motion to Use Alternative Potential Victim Notification

Posted by ASDUpdates on August 20th, 2014

Another motion filed on August 18th is a Motion for Authorization to Use Alternative Procedures to Notify Potential Victims, and requested to use these methods:

The alternative victim notification methods suggested by the government are the following:

a. Department of Justice Victim Notification System: To date, the government has ascertained the identities of some individual potential victims who bought into the TelexFree program. Typically, the government uses its Victim Notification System (“VNS”) to give individualized notice to such people and it will do so in this case, to the extent it is able, as a supplement to the notification methods discussed below. The VNS enables the government to inform victims entered in the system of scheduled court dates and the outcomes of significant court events.

b. TelexFree Information Web Site: Using a portal on the web site operated by the Federal Bureau of Investigation (“FBI”), the government has set up a web page for those who claim to be victims of the scheme alleged in the indictment. The site page 2 posts publicly available  information about the case and invites  alleged victims to enter basic information about their experience with TelexFree.

The site was included in the government’s press release in this case dated July 23, 2014, and it is the first unpaid site to come up on a Google search using the terms “TelexFree victim.” Undersigned counsel is informed that the Massachusetts Securities Division (“MSD”) maintains a similar site; 3 the government will request victim information provided to the MSD and reconcile it with data entered on the FBI’s site. Similarly, the U.S. Securities & Exchange Commission (“SEC”) has filed a civil enforcement action against James Merrill, Carlos Wanzeler and others. The government will seek from the SEC whatever information it has received on its tip line or otherwise from alleged victims.

c. Toll-Free Telephone Number and Victim Assistance Email Address: The U.S. Attorney’s Office has a toll free phone number potential victims can call to listen to a recorded message providing the status of the case and instructions on how to contact the U.S. Attorney’s Office by email. That information is also included on the U.S. Attorney’s Office website. Similarly, there is an email address for victim inquiries (USAMA.victimassistance@usdoj.gov), which was included in the government’s press release dated May 9, 2014. Alleged victims who contact that address are directed to the site hosted by the FBI.

2 http://www.fbi.gov/stats-services/victim_assistance/seeking-victim-information/telexfree-inc.-case
3 http://www.sec.state.ma.us/InvestorComplaint/telexfree.aspx

d. Press Releases and Newspaper Notices: As noted above, the U.S. Attorney’s Office has issued two press releases so far in this case, both of which have noted resources available to alleged victims. The government will also post notice in certain newspapers or other periodicals, alerting readers to the case and providing contact information if any reader believes he or she is a victim.

e.Outreach Efforts: The alleged victims in this case are concentrated in certain immigrant communities, primarily Brazilians and other Latin American immigrants. At least on a local level, the government will coordinate with organized groups in these communities to host informational meetings for people who are concerned about the case. During these efforts, the government will encourage concerned people to make use of the resources summarized above.

f. Depending on the case event for which the government is trying to give notice, the government may try to develop a system in which it can send “blast emails” to those alleged victims for whom it has email addresses.

WHEREFORE, the United States respectfully requests that the Court (a) find that the procedures itemized in ¶ 4 above are a reasonable means of satisfying the government’s obligations under 18 U.S.C. § 3771, and (b) authorize the government to implement those procedures alternative methods for notifying potential victims in this case.

Tags: , , , , , , , ,
Posted in HYIP, MLM, Money Laundering, Online Marketing, Other Ponzi Scams, Pyramid Schemes, Scams, Serial Promoters, Tax Dodgers, TelexFree, TelexFree Criminal Case | No Comments »

TelexFree: Motion for Complex Case Designation and Exclusion of Time

Posted by ASDUpdates on August 20th, 2014

On Monday, August 18th, the government filed a motion (Doc 105) which contains these points:

The government hereby moves to have this matter treated as a complex case pursuant to 18 U.S.C. § 3161(h)(7)(B)(ii) and to have the Court enter an interim order of excludable delay pursuant to 18 U.S.C. ’3161(h)(7)(A).1 As grounds therefore, the government states that this case is sufficiently unusual and complex that it is unreasonable to expect adequate preparation for trial within the time limits established by 18 U.S.C. § 3161:

1. The Indictment in this case says in part that the defendants operated a company, TelexFree, Inc., and related entities (“TelexFree”), that sold telephone service based on a voiceover-internet (“VOIP”) protocol, but alleges that TelexFree was in fact a pyramid scheme. The company was global, with approximately 785,000 participants in dozens of countries. Telexfree also operated out of countries besides the United States, most prominently Brazil, where a TelexFree owner and several employees live.

……..

5. Because the evidence underlying this case is closely tied to certain foreign countries, especially Brazil, it is likely that the parties will need to review evidence in foreign countries and arrange for foreign witnesses and/or law enforcement officers to travel to the United States to testify at trial. If the parties require authenticated evidence from foreign countries, the process for securing that evidence by formal request is extremely time-consuming, including review of the request by U.S. authorities (locally and at the Office of International Affairs), review by authorities in the host country, collection and transmittal of the evidence, and certified translation.

WHEREFORE, the government respectfully moves the Court

a. To treat this case as a complex case pursuant to 18 U.S.C. § 3161(h)(7)(B)(ii), for purposes of Speedy Trial Act calculations; and
b. Pursuant to 18 U.S.C. § 3161(h)(7)(A), to enter an order of excludable delay of 90 days, commencing on September 10, 2014, after which either party may seek a further extension of the tolling period depending on their progress on the above issues.

So far, that Order has not been issued by the Court. I will keep an eye on this situation.

 

p5rn7vb

Tags: , , , , , , , , ,
Posted in HYIP, MLM, Money Laundering, Online Marketing, Other Ponzi Scams, PIMPs, Pyramid Schemes, Scams, TelexFree Criminal Case | No Comments »

Zeek Rewards: Net Winners Oppose Dismissing Their Counterclaims

Posted by ASDUpdates on August 15th, 2014

And the silliness continues….. it seems the civil suit entitled “Bell v Disner et al” has some recent activity from the people who took a ton of money out of Rex Ventures and who do not want to have to cough it up.

The Motions filed are “Oppositions to the Receiver’s Consolidation to Dismiss Counterclaims” that these defendants pieced together from bits of string, bird poop and other sources.

These defendants are Durant Brockett, Rhonda Gates, Aaron Andrews, Shara Andrews and Innovation Marketing, LLC., Trudy Gilmond, Trudy Gilmond, LLC, Jerry Napier and Darren Miller.

I have uploaded these nonsensical filings onto the Files Website.

 

Tags: , , , , , , , , , , , , ,
Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Pyramid Schemes, Scams, Tax Dodgers, Zeek Clawbacks, Zeek Crazy Stuff, Zeek Rewards Federal Court Cases | No Comments »