ASDUpdates.com

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

Zeek Rewards: Reply in Support of Motion for Class Certification

Posted by ASDUpdates on September 18th, 2014

In the case entitled “Bell v Disner, et al” (14-cv-00091) we have this:

REPLY IN SUPPORT OF RECEIVER’S MOTION FOR CLASS CERTIFICATION

The Receiver, through the undersigned counsel, provides the following Reply in support of his Motion for Class Certification. In their response, Defendants all but concede that a class action is the only means to reasonably and efficiently resolve the Receiver’s claims against the more than 9,400 Net Winners at issue, but argue – primarily based on arguments related to the irrelevant individual details of each Net Winners’ participation – that the rules do not allow this beneficial class to be certified. For the reasons set forth below, the Court should reject Defendants’ arguments, grant the Receiver’s Motion and certify a defendant class pursuant to Federal Rule of Civil Procedure 23.

…..

Instead of arguing that the core Ponzi scheme and fraudulent transfer issues are not common to the class, Defendants argue there may be differences in the Net Winners’ “relationships with insiders,” potential counterclaims related to funds in electronic accounts,1 possible reliance on the advice of counsel, potential third party claims or other issues related to the details of each net winner’s participation in the scheme. However, Defendant’s Response cited little to no case law in support of their argument and, as discussed above, even if there were some individual issues that does not mean that the core common class issues do not satisfy the “commonality” requirement.

……

Defendants further suggest that individual counterclaims might defeat class certification, but the facts and case law do not support their argument. First, as a factual matter, Defendants argue that the named Defendants’ counterclaims might somehow be different from the potential counterclaims of the other class members. However, the counterclaims asserted so far focus on common issues involving NxPay funds and breach of contract issues.3 Second, as a matter of law, the Fourth Circuit has recognized the effect of a counterclaim in and of itself “simply does not create the kind of conflict” that would defeat class certification.

I have uploaded this filing onto the Files website, Doc 82.

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Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, PIMPs, Pyramid Schemes, Scams, Serial Promoters, Tax Dodgers, Zeek Clawbacks, Zeek Rewards Federal Court Cases | No Comments »

Zeek Rewards: TRO Aimed at ‘mynetworkingpro’

Posted by ASDUpdates on September 18th, 2014

This is the first many of us have heard about “mynetworkingpro.com” and Mr. Weber.  Also, I cannot find anything on the docket regarding Doc 249, so I am guessing it is sealed. Here’s the gist of the filing:

Kenneth D. Bell, as the Receiver for Rex Venture Group, LLC (“Receiver”), and through his undersigned counsel, moves this Court for a thirty (30) day extension and modification of the Temporary Restraining Order Enforcing the Court’s Asset Freeze (the “TRO”) (Doc No. 249). Mr. Weber and mynetworkingpro.com, as the adverse parties to the TRO, consent through counsel to all relief requested herein. See Fed. R. Civ. P. 65(b)(2).

Pursuant to the Court’s directives in the TRO, the Receiver communicated with Wells Fargo regarding the account into which the $2 million of RVG funds was originally transferred, account number XXXX-XXXX. While only $18,000 remained in this account, Wells Fargo informed the Receiver that a separate Wells Fargo account related to Mr. Weber contained approximately $1.35 million. Pursuant to the Asset Freeze in the Court’s Agreed Order, Wells Fargo has “restricted” the account pending further direction from this Court.

The Receiver believes this money came from the original $2 million transfer of RVG funds. In addition to the above thirty-day extension, the Receiver therefore respectfully requests that the Court modify the TRO to specifically freeze the funds located in this second Wells Fargo account, which is related to or controlled by Mr. Weber and/or mynetworkingpro.com. The Receiver also requests that the TRO be modified to freeze funds in any other financial account to which money was transferred from that account or the original Wells Fargo account.

The same day, Judge Mullen issued this Order:

ORDER
IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED that:
The Receiver’s Motion for Extension of the Temporary Restraining Order Enforcing the Court’s Asset Freeze is GRANTED

This could prove interesting; I will follow developments with this new party and post things as I find them.

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

TelexFree: Today’s Filings in SEC Civil Case

Posted by ASDUpdates on September 18th, 2014

There was a flurry of Response filings today in the original SEC case, 14-cv-11858, concerning Doc 253 entitled, Motion of the United States (Department of Justice) For Leave To Intervene And For A Stay Of Discovery Pending Resolution Of Parallel Criminal Proceedings, and Memorandum In Support  and here are the Responses from the affected parties:

  • James M. Merrill – “he does not oppose the government’s motion to stay discovery (or its request to intervene). For the record, however, Mr. Merrill believes many of the government’s arguments to be without merit and his lack of opposition at this time should not be construed as an agreement with the arguments advanced by the government.”
  • The SEC – “plaintiff Securities and Exchange Commission states that it does not oppose the motion to stay discovery.”
  • Faith R. Sloan – “opposes the Motion to Stay Discovery filed by the United States Department of Justice; so long as she is a Defendant in the above entitled action, she must pay and continue to pay her attorney for representing her at a time when she is unable to support herself financially.”
  • Joseph H. Craft – “hereby agrees that the Department of Justice’s Motion to Stay Discovery is appropriate and, therefore, he has no opposition to the allowance of the motion.”
  • Sanderley Rodrigues De Vasconcelos – ” without waiving any rights, hereby notifies the Court that he does not oppose the government’s motion to stay discovery, or its request to intervene in the above-captioned matter.”
  • Stephen B. Darr as Trustee of the Chapter 11- “states that he does not oppose either the motion to intervene or to stay discovery”
  • Randy Crosby – “assents to the U.S. Department of Justice Motion to Stay Discovery (only) pending resolution of a federal criminal case that addresses the same alleged misconduct.”
  • Santiago De La Rosa – “assents to the U.S. Department of Justice Motion to Stay Discovery (only) pending resolution of a federal criminal case that addresses the same alleged misconduct. De La Rosa also requests that his pending Motion to Dismiss (Document 180) be similarly stayed pending resolution of the federal court case.”

I have uploaded the full documents onto the Files website.

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Posted in HYIP, MLM, Money Laundering, Online Marketing, Other Ponzi Scams, Pyramid Schemes, Scams, Serial Promoters, Tax Dodgers, TelexFree, TelexFree SEC Case | 1 Comment »

Zeek Rewards: Non-Party “Preferred Merchants Solutions” Files Combined Response and Reply

Posted by ASDUpdates on September 15th, 2014

NON-PARTY PREFERRED MERCHANTS SOLUTIONS, LLC’S
COMBINED RESPONSE AND REPLY

Preferred Merchants Solutions, LLC (“Preferred”) seeks to lift the stay of litigation in order to file a declaratory judgment action against the Receiver, Kenneth D. Bell (the “Receiver”), to determine the parties’ respective rights to certain funds in a plenary proceeding. Apparently lacking a principled basis from which to oppose Preferred’s request, the Receiver has filed a Motion for Contempt 1 and opposed Preferred’s request on the grounds that ownership over the funds can be decided in a summary contempt proceeding—despite Preferred’s claim of right, which it has described in its proposed complaint. Put simply, the Court cannot decide this question in any type of summary proceeding, much less a contempt motion.

1 The Receiver’s Contempt Motion also alleges that Jaymes Meyer, Preferred’s Chief Operating Officer, violated the Receivership Order. The Contempt Motion, however, includes no allegations that Mr. Meyer acted in an individual capacity and thus offers no basis for finding him in contempt. [See Contempt Mem. at pp. 2-3, 10-11, 13.] Accordingly, Mr. Meyer is not appearing before this Court.

Preferred transferred funds before the Court entered the Receivership Order and it did so pursuant to the Funds Transfer Management Agreement, which allowed it to transfer funds without prior notice to Rex Venture Group, LLC d/b/a Zeek Rewards.com. 2 Because Preferred acted before the entry of the order freezing assets and has a claim of right as to the assets it transferred, the Receiver has to pursue his claim in a plenary proceeding, in the same manner he would have to pursue a so-called net-winner. Since it will require a plenary proceeding to resolve the competing claims of the Receiver and Preferred, the Court should grant Preferred’s Motion to Lift Stay and deny the Receiver’s Contempt Motion.

2 The Receiver has mocked Preferred for referring to this agreement as something other than the “Declaration of Trust.” A thorough reading of the document demonstrates why Preferred has used Funds Transfer Management Agreement to describe this document: it sets up the framework for Preferred to manage all funds transfer issues for RVG and to be compensated for such management. The agreement does not, as the Receiver asserts, simply require Preferred to manage a trust account and receive compensation accordingly.

I have uploaded the full 13 page document onto the Files website.

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Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, PIMPs, Pyramid Schemes, Scams, Serial Promoters, Zeek Clawbacks, Zeek Crazy Stuff, Zeek Rewards Federal Court Cases | No Comments »

Zeek Rewards: Kenneth Bell Responds to Kaplan’s Motion to Dismiss

Posted by ASDUpdates on September 11th, 2014

ZeekRESPONSE IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS

Kenneth D. Bell (the “Receiver”), through the undersigned counsel, provides the following Response in Opposition to the Defendant’s Motion to Dismiss. For the reasons set forth below, the Defendant’s Motion should be denied.

Summary of the Argument

Howard Kaplan is an attorney who was hired by RVG to provide accurate legal advice to RVG concerning tax matters. Instead of fulfilling this important fiduciary duty, he gave RVG bad legal advice and actively participated in promoting a Ponzi and pyramid scheme that caused RVG enormous harm. As a result, RVG’s Receiver has brought this action against him. In response, Kaplan argues that despite his wrongful conduct he is effectively immune from liability because the court appointed Receiver for the company cannot bring claims against him. However, Kaplan’s claimed defense of “in pari delicto” does not bar a federal equity Receiver from asserting claims on behalf of the company he is appointed to oversee. Indeed, there is a public policy exception to “in pari delicto” defenses in North Carolina law that does not allow those – like Kaplan – who failed their fiduciary duty and assisted company insiders in harming the company to evade justice.

Further, the Receiver has adequately stated a claim for each of the causes of action asserted against Kaplan. Accepting as true the facts alleged in the Complaint that Kaplan failed to give accurate legal advice, Kaplan was at least negligent in providing legal services to RVG and thus committed professional malpractice / breach of fiduciary duty under North Carolina law. Also, under the law of Nevada, RVG’s state of incorporation, (which applies to RVG’s internal corporate duties under North Carolina’s choice of law rules) Kaplan aided and abetted RVG’s insiders’ breach of their fiduciary duties by giving RVG and its victims bad legal advice as a cover for the Ponzi scheme and otherwise assisting in promoting the unlawful scheme. Finally, the Complaint states a claim for constructive trust against Kaplan because it would be inequitable for Kaplan to retain the funds that he received for his participation in promoting the Ponzi scheme and prolonging its existence. Because Kaplan has received property which he “ought not, in equity and good conscience, hold and enjoy” a constructive trust should be imposed on the funds Kaplan received.

Therefore, Kaplan’s motion to dismiss should be denied in all respects.

I have uploaded the 24 page document onto the Files website.

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Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, PIMPs, Pyramid Schemes, Scams, Serial Promoters, Zeek Crazy Stuff, Zeek Rewards Federal Court Cases | 1 Comment »

TelexFree: New Filings in Criminal Case

Posted by ASDUpdates on September 11th, 2014

telexfree-logoOn September 9th, District Judge Timothy S Hillman entered an  ELECTRONIC ORDER granting 115 Motion to Unseal Documents as to Carlos Nataniel Wanzeler (1) and James Matthew Merrill (2).

Today, Magistrate Judge David H. Hennessy filed :

ELECTRONIC ORDER entered denying 105 Motion to Excludable Delay from September 10, 2014 to December 10, 2014 as to Carlos Nataniel Wanzeler (1), James Matthew Merrill (2); granting 105 Motion for Complex Case Designation as to Carlos Nataniel Wanzeler (1), James Matthew Merrill (2).

“The opposed motion of the United States for complex case designation and exclusion of time is granted in part and denied in part. Defendant concedes that given volume and scope of discovery in this case that the case is complex. Further, as noted by the United States, the case involves documents and witnesses outside the United States. Accordingly, I designate the case complex under 18 U.S.C. Section 3161(h)(7)(B)(ii). However, the motion of the United States for a 90-day exclusion of time is denied. On the consent of Defendant Merrill, time is excluded for 45 days from September 10, 2014, and a separate order will issue. Given the complex case designation, the Court will consider motions for an exclusion of longer periods of time in the future as requested by the parties, where circumstances warrant such an exclusion.”

The above are Clerk’s entries on the docket with no documents. However, there are 2 documents added today,  a Report after the Status Conference, and an ORDER on Excludable Delay. I have added these (119 and 120) onto the Files website.

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

BehindMLM: TelexFree Laundered Money

Posted by ASDUpdates on September 8th, 2014

TelexFree laundered funds through shell companies

telexfree-logoWhere there’s smoke, there’s fire.

The connection between money-laundering and TelexFree has been a long-standing one.

A lot of the time Ponzi schemes launder stolen funds through offshore jurisdictions, that’s par for course. But with TelexFree, it always felt a bit more organised – cartel’esque even.

We first learned of the links above and beyond what you’d normally expect to find in a Ponzi scheme, when back in June 2013 Brazilian police announced they’d

opened an inquiry into whether the management of Telexfree committed crimes against the economy and money laundering.

That was a very specific inquiry that appeared to above and beyond that of TelexFree being an obvious Ponzi scheme.

That same month TelexFree was effectively shut down in Brazil, by way of a crippling injunction granted in the state of Acre. As Acre’s money laundering investigation continued, specific details as to what they’d found remained elusive.

In the interim, the Rwandan government would announce they’d found money laundering links to local cartels. And once TelexFree was shut down in the US, i-Payout then hinted at the scheme’s money laundering ties.

That TelexFree was being investigated for money laundering was frequently mentioned, but we never really knew just what investigators in Acre were up to, or what they’d thus far found.

The recent filing of a police report in Espirito Santo now changes that, with light being shed on the inner-workings of TelexFree’s Brazilian money laundering operations. [Continue reading...]

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Posted in HYIP, MLM, Money Laundering, Other Ponzi Scams, Pyramid Schemes, Scams, Serial Promoters, Tax Dodgers, TelexFree | No Comments »

Zeek Rewards: Clerk Enters Default Judgement Against Defendant Darryle Douglas

Posted by ASDUpdates on September 4th, 2014

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This is only the beginning, I hope, for all Zeek “net winners”…(emphasis added by me)

IT IS, THEREFORE, ORDERED that the Receiver’s Motion for Default Judgment by Clerk of Court is GRANTED, and the Receiver shall have and recover of Defendant Darryle Douglas the sum of Two Million Two Hundred Seventy-One Thousand Two Hundred Thirty-Nine Dollars and Twenty Cents ($2,271,239.20), which consists of One Million Nine Hundred Seventy-One Thousand Three Hundred Seventy-Four Dollars and Twenty-Seven Cents ($1,971,374.27) in principal and Two Hundred Ninety-Nine Thousand Eight Hundred Sixty-Four Dollars and Ninety-Three Cents ($299,864.93) in prejudgment interest from August 15, 2012 to July 10, 2014.

Postjudgment interest shall accrue on the entire Judgment, including the award of prejudgment interest, at the rate specified under 28 U.S.C. § 1961 from the date of entry of this Judgment until paid in full.

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Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Payment Processors, Pyramid Schemes, Scams, Serial Promoters, Tax Dodgers, Zeek Clawbacks, Zeek Rewards Federal Court Cases | 3 Comments »

Zeek Rewards: Judge Grants Extension of Time

Posted by ASDUpdates on September 4th, 2014

Senior Judge Mullen has granted Preferred Merchants Solutions, LLC’s Motion for Extension of Time to Reply and to Respond [Doc. No. 248].

“The Court has reviewed the record in this matter and finds and concludes that there is good cause to allow the Motion and extend the time within which Preferred may file and serve a reply to the 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, and a response to the Receiver’s Motion to Find Preferred Merchants Solutions, LLC and James Meyer in Contempt of the Court’s Order Appointing Temporary Receiver and Freezing Assets of Defendant Rex Venture Group, LLC.”

I have uploaded this Order onto the Files website.

 

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Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Pyramid Schemes, Scams, Zeek Clawbacks, Zeek Rewards Federal Court Cases | No Comments »

BehindMLM: Phil Ming Xu Sentenced in WCM777 Ponzi

Posted by ASDUpdates on September 4th, 2014

Phil Ming Xu sentenced in WCM777 Ponzi case

wcm777-logoIt’s game over for Phil Ming Xu, with court documents uploaded to the WCM777 Receivership website sometime over the last few days revealing his sentence in the WCM777 Ponzi case.

Neither confirming or denying the SEC’s allegations (which is code for “if I fight this I will lose” in Ponzi litigation), Xu has been “permanently restrained and enjoined from violating, directly or indirectly” various sections of the Securities Exchange Act.

[Continue reading...]

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Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Pyramid Schemes, Scams, WCM777 | No Comments »