Zeek Rewards: NXSystems Files Motion for Partial Relief from June 1st Order

NXSystems is asking the Court to reconsider its June 1st Order “directing NxPay to pay $9,069,446.52zeekrewards to the Receiver within 5 days to be frozen in a segregated account pending final disposition of the dispute.”

The Motion goes on to say that NXSystems has voluntarily turned over around $22 Million dollars to the Receiver, does not have possession of any the claimed additional funds, and are financially unable to meet the Order of the Court.

In order to “comply” with the Court’s Order, they have made arrangements to transfer $1 million dollars to the Receiver’s account today.  Sounds a bit short of $9 million dollars to me, but NXSystems believes it to be “substantial”, and that they still believe there are no funds owed to the receivership. They also say this payment presents a significant financial hardship for them because their business has declined steadily since being associated to the Zeek case and RVG’s wrongdoing.

They included a Declaration from Michael Busher, Chairman of the Board of NXSystems, Inc. in an effort to buttress the Motion for Partial Relief. Additionally, he repeats their interpretation for not owing any more money and that they merely acted as a go-between, that RVG deposited money into an account holder’s account, so they are therefore not the guilty party, RVG is. Good luck with that.

Many more claims are made in this Declaration, which you can read on the Files website, ZeekDoc368-1.

We also have a “Memorandum In Support” of this Motion, stating that NXSystems in incapable of paying the $9 million dollars. It is also on the Files website.

 

Zeek Rewards: Orders Granting Defaults and Order to Show Cause

Today we have 2 Orders from Senior Judge Graham C.Mullen, in which he Grants the receiver’s Motionzeekrewards for Default Judgments against Jerry Napier and Trudy Gilmond, and also Orders both individuals to appear and Show Cause why judgment should not be entered. I would guess that neither one will show for this either.


 

ORDER
THIS MATTER is before the Court on the Receiver’s Motion for Default Judgment for Failure to Defend or, in the Alternative, Motion for Order Requiring Jerry Napier to Personally Appear and Show Cause.
For good cause shown, it is ORDERED that the Receiver’s Motion is GRANTED and Defendant Jerry Napier is hereby ORDERED to personally appear in court in the Western District of North Carolina on May 27, 2015 at 11:00 AM and SHOW CAUSE as to why judgment should not be entered against him as requested by the Receiver. If Defendant does not personally appear at such hearing, judgment will be immediately entered against him in the amount of $$2,041,356.19.
SO ORDERED.


ORDER
THIS MATTER is before the Court on the Receiver’s Motion for Default Judgment for Failure to Defend or, in the Alternative, Motion for Order Requiring Trudy Gilmond to Personally Appear and Show Cause.
For good cause shown, it is ORDERED that the Receiver’s Motion is GRANTED and Defendant Trudy Gilmond is hereby ORDERED to personally appear in court in the Western District of North Carolina on May 27, 2015 at 11:00 AM and show cause as to why judgment should not be entered against her as requested by the Receiver. If Defendant does not personally appear at such hearing, judgment will be immediately entered against her and Trudy Gilmond, LLC in the amount of $2,129,522.27.
SO ORDERED.


Zeek Rewards: Receiver Issues First Quarter Status Report for 2015

RECEIVER’S STATUS REPORT FOR THE FIRST QUARTER OF 2015

Here are a few of the high points, you can see the full Report here:

The Receiver currently maintains six bank accounts on behalf of the Receivership Estate for holding Receivership Assets: the “Affiliate Account,” the “Seized Asset Account,” the “Pre-Filing Account,” the “Settlement Account,” the “Withholding Account,” and the “Holdback Account.”

Excluding earned interest and transfers between accounts, the Receiver made the following deposits into these accounts during the first quarter of 2015:

  •  $1,577,043.06 into the Settlement Account from settlements with non-affiliate third parties;
  •  $520,250.00 into the Affiliate Account from payments from various financial institutions relating to previously dishonored cashier’s checks, teller’s checks, official checks, and bank money orders.

As of March 31, 2015, the Receivership Estate held approximately $91.3 million in the Affiliate Account, approximately $89.3 million in the Seized Asset Account, approximately $293,000 in the Pre-Filing Account, approximately $6.3 million in the Settlement Account, $0 in the Withholding Account, and approximately $1.1 million in the Holdback Account.


The Receiver Team is awaiting a ruling on its Motion for an Order Directing NxSystems to Turn Over Receivership Assets and/or Find them in Contempt of the Court’s Order Freezing Receivership Assets regarding the approximately $9 million outstanding.


During the first quarter, the Receiver Team continued litigation against Preferred Merchants and Jaymes Meyer to recover the approximately $4.8 million they improperly transferred and failed to return in violation of the Freeze Order.

One property in the Turks & Caicos Islands has been frozen, and the Court has issued an order directing that it be transferred to the Receiver. The estimated value of this property is believed to be over $2 million. In addition, Mr. Meyer agreed to a lis pendens upon California real property that he purchased with Receivership Assets for over $400,000.


With respect to Solid Trust Pay, the Receiver Team has issued a demand to Solid Trust Pay for approximately $1.6 million in outstanding Receivership Assets and is awaiting additional information from Solid Trust Pay to evaluate its response to the Receiver’s Demand.


Litigation in the SEC Enforcement Action 

The Receiver Team litigated the following matters in the SEC Action:

  • The Receiver Team filed a response brief in the Fourth Circuit Court of Appeals regarding the Belsome movants’ appeal of the striking of attorney charging liens.
  • The Receiver Team continued litigation seeking the return of Receivership Assets from NxSystems.
  • The Receiver’s conflicts counsel filed a Motion for Order to Show Cause or Turn Over Receivership Assets Against Compass Bank.
  • The Receiver team continued litigation to recover Receivership Assets from James Meyer and Preferred Merchants Solutions, LLC.

(emphasis added)

To date, almost 121,000 Affiliate claimants have accepted their claim determinations and have been or will be issued a distribution in the near term. The next distribution date for claimants who have not already received a distribution is April 30, 2015. . However, in excess of 50,000 Affiliate claimants have failed to respond to their claim determinations. Each claimant is required to act further if they would like to receive a distribution from the Receivership Estate. Failure to act further may eventually cause a claimant to forfeit the distribution. 

The Receiver contacted each of the Affiliate claimants who failed to respond to their claim determination to request that such claimants respond to the claim determination by April 15, 2015 and notified them that, pursuant to authority granted by court order, they would be deemed to have accepted their claim determination if they failed to respond by that date.

Approximately 1,800 Affiliates have objected to the claim determination issued by the Receiver Team. The Receiver Team is continuing to address these objections in an effort to resolve such objections before intervention by the Special Master or the Court would be needed. The Receiver Team has been successful in resolving the majority of these objections to date.


Along with the Status Report are 2 Exhibits detailing financial information.  Exhibit A and Exhibit B

BehindMLM – uFun Club

These come from BehindMLM.com 


uFun Club ringleader wanted for pyramid scheme fraud

These days it’s getting more and more difficult to relaunch scams once your name is out there.ufunclub-logo

What with the speed with which news travels these days and just the sheer volume of information available to anyone with an internet connection, serial scamsters have to go to increasingly sophisticated lengths to launch their schemes.

Take for example uFun Club, which now increasingly starting to look like a Ponzi scheme heavily influenced by serial Chinese scammers. [Continue reading…]


uFun Club investigation to be handled by Thai police

Much nonsense has come out of the uFun Club camp these past few days, with claims on social media alluding to the dropping of the investigation currently taking place.ufunclub-logo

The claims, largely made on social media, primarily attempt to plant the seed that the Department of Special Investigation (DSI) are going to drop the uFun Club investigation any day now.

The good news for uFun Club investors still in denial?

The DSI did indeed decide to drop their own investigation into uFun Club.

The bad news?

DSI dropped the investigation in favor of letting the police continue to take the lead. [Continue reading…]


Zeek Rewards: Turks and Caicos Island Vacation Home Transfers to Receivership

On March 11, 2015, Mr. Bell filed this motion:

Kenneth D. Bell, the Court-appointed Receiver (“Receiver”) of Rex Venture Group, LLC d/b/a ZeekRewards.com (“RVG”), respectfully submits this Motion to Transfer Property to the Receivership Estate. The Receiver respectfully requests that the Court impose and enforce an equitable lien on a water-view vacation home in the Turks & Caicos Islands and related assets
(collectively, “Turks & Caicos Property”) that were purchased with RVG assets that Preferred
Merchants Solutions LLC (“Preferred Merchants”) and Jaymes Meyer improperly took from an
RVG trust account and order that the title and ownership be transferred to the Receivership
Estate for the benefit of the victims of the ZeekRewards Ponzi / pyramid scheme.

Today, Senior Judge Mullen issued this order:

ORDER
IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED that:
1. The Motion to Transfer Property to the Receivership Estate is hereby GRANTED; and
2. Bella Vita Ltd., and any other party with ownership or other rights to the Turks & Caicos property described below, is hereby ORDERED to transfer to the Receivership Estate title and ownership of the Turks & Caicos Islands real property designated as Title #60609/24 / Norway & Five Cays Section / Providenciales Island along with all improvements, attachments and personal property within and related to the property (including but not limited to furniture, fixtures, a boat and scuba equipment).

It seems that those who purvey these Pyramid/Ponzi schemes like to have ill-gotten homes near some body of water, as ASD’s Andy Bowdoin had a lake house complete with the ubiquitous water toys allegedly for the members of the ASD scam to use if they were ever in the area. And just like the Jaymes Meyer, the home and all water toys were absorbed into the restitution accounts.

While this is not the actual property, it gives you an idea of what is involved:

60609 – Norway and Five Cays: Chalk Sound, Providenciales

Single Family Home
MLS # 1400565

 

Zeek Rewards: Receiver’s Notice Of Class Certification

NOTICE OF CERTIFICATION OF DEFENDANT CLASS ACTION

On February 10, 2015, Judge Graham C. Mullen, United States Judge for the Western District of North Carolina issued an ORDER granting the motion of Kenneth D. Bell, the court-appointed Receiver for Rex Venture Group, LLC (“RVG”), to certify a Defendant Class (the “Net Winner Class”) in this action comprised of all persons and entities who were Net Winners of more than $1000 in ZeekRewards. A copy of this ORDER is attached. This notice is being provided to notify you that according to RVG’s records you are a member of the Net Winner Class and inform you about certain important information related to the Net Winner Class and the legal process going forward.

1. In this lawsuit against the named Defendants and the Net Winner Class, the Receiver alleges that because ZeekRewards’ Net Winners “won” (the victims) money in an unlawful Ponzi and/or pyramid scheme, the Net Winners are not permitted to keep their winnings and must return the fraudulently transferred winnings to the Receiver for distribution to the ZeekRewards’ victims. Specifically, the Receiver has asserted claims for relief for: (1) Fraudulent Transfer of RVG Funds in violation of the North Carolina Fraudulent Transfer Act; (2) Common Law Fraudulent Transfer; and (3) Constructive Trust.

2. Net Winners are defined in the Complaint as those who received more money from ZeekRewards than they paid in. Therefore, the Net Winner Class includes all persons and entities who participated in ZeekRewards and received at least $1000 more in money from ZeekRewards than they put into the program. RVG’s records show that you are a member of the Net Winner Class. Your membership in the Net Winner Class depends solely on the amount of your net winnings. It does not depend on whether or not you believed ZeekRewards was lawful, your level of knowledge concerning the program or whether you still have the money you received.

3. The Court has not yet ruled on the merits of the claims in this lawsuit; however, when it does so, its orders will be legally binding upon you and all other members of the Net Winner Class. The Court has noted that the common questions related to the Net Winner Class are “whether ZeekRewards operated as a Ponzi and/or pyramid scheme and whether net winnings received by the Defendants should be returned to the Receiver.” The Court has further held that the details of each class member’s participation in ZeekRewards do not need to be addressed in answering these common and controlling questions. The ongoing legal proceedings in the case will answer these common questions.

4. You are not required to and there should be no need for you to participate in the legal proceedings related to answering the common questions for the Net Winner Class. The Court has determined that the named Defendants, who the Court noted collectively won more than $11 million in profits from ZeekRewards, “inevitably share the same defenses against liability for repayment of the alleged fraudulent transfers made to the class, which does not depend on the personal circumstances of particular affiliates” and that those Defendants and their counsel “are able to fairly and adequately represent the interests of the defendant class.” Also, all pleadings and other papers filed in this action are available for your inspection in the office of the Clerk of Court for the Federal Court in the Western District of North Carolina in Charlotte, North Carolina, and on the Federal Court PACER electronic public access service that allows users to obtain case and docket information online at https://www.pacer.gov/.

5. You will, however, have an opportunity to participate in the process if the Net Winner Class is found to be required to repay their net winnings. If liability is found, the Receiver intends to seek a court Judgment against each class member in the amount of their individualized net winnings plus interest at least from August 17, 2012, when ZeekRewards was shut down and the Receiver appointed. The final amount of each Net Winner Class member’s net winnings and any Judgment against them will be set later in the proceedings after the liability of the class has been established. While the specifics of the process for determining those amounts has not yet been decided, the Receiver intends

to seek a process that will notify you of the amount of your net winnings according to the RVG records, allow you a reasonable opportunity to provide a response (supported by relevant documentation if you disagree with the calculation) and then either reach an agreement on the amount or have the amount determined by a judicial process. It is likely to be several months or longer before this process begins so you do not need to take any action at this time either with the Receiver or counsel for the named Defendants related to determining the amount of your net winnings. This is true even if you believe that you are not a member of the Net Winner Class because you did not receive more than $1000 more from ZeekRewards than you put in (you will have an opportunity to make that argument at the appropriate time). However, if you have not already done so, you are advised to gather and preserve any documents or information (including electronic files) related to the amount you paid into and received from ZeekRewards so those documents and that information can be used in the later process to determine the amount of your net winnings.

6. CONTACT INFORMATION REQUIRED – This notice has been sent to the last known electronic address for each member of the Net Winner Class and published on the Receivership website, the Court’s docket and other forums. For purposes of future communications to the Net Winner Class it is important that the Court have updated contact information for all class members. Therefore, please provide your Name, Residential Street Address (or Business address for an entity), Email Address and Phone Number to:

Kenneth D. Bell
McGuireWoods LLP
ATTN: ZeekRewards Class Action
201 North Tryon Street, Suite 3000
Charlotte, North Carolina 28202
Or

zeekrewardsclassaction@mcguirewoods.com

Please be advised that the failure to provide current contact information will not allow you to avoid any liability or obligation related to this matter.

7. Since early in the Receivership, the Receiver has expressed a willingness to consider voluntary settlements on the Receiver’s claims with ZeekRewards’ net winners and others against whom the Receiver has claims. To date, there have been numerous settlements approved by the Court in which net winners and the Receiver agreed on an amount to be repaid, often with payment terms that allowed the net winner to repay the agreed amount over a number of months. Net Winners are still permitted to discuss a potential settlement of the Receiver’s claims against them even though they have become members of the Net Winner Class. If you desire to discuss a settlement of the Receiver’s claims against you, please communicate with the Receiver at zeeksettlement@mcguirewoods.com.

8. This notice is intended to inform you about the Net Winner Class and answer basic questions regarding the Receiver’s claims and the legal process.

PLEASE CONSIDER THIS NOTICE CAREFULLY BECAUSE YOU WILL BE LEGALLY BOUND BY FUTURE ORDERS OF THE COURT IN THIS ACTION. IF YOU ARE UNSURE OF WHAT COURSE TO FOLLOW OR IF YOU HAVE ANY QUESTIONS ABOUT YOUR SPECIFIC CIRCUMSTANCES, YOU MAY WISH TO CONTACT YOUR OWN ATTORNEY. PLEASE DO NOT CONTACT THE RECEIVER, THE COURT OR COUNSEL FOR THE NAMED DEFENDANTS WITH GENERAL QUESTIONS ABOUT THE NET WINNER CLASS OR YOUR PARTICULAR SITUATION OTHER THAN IF YOU WANT TO DISCUSS A POTENTIAL SETTLEMENT WITH THE RECEIVER AS DESCRIBED ABOVE.

Zeek Rewards: Robert Craddock, Zeek Figure, Indicted For Wire Fraud in BP Oil Spill Scam

Robert Craddock indicted for wire fraud

Before he became one of the prominent faces of the Zeek Rewards Ponzi scheme, before he solicited thousands of dollars from victims and then disappeared with the money, before he attempted to profit zeekrewards
further by writing a book about his Ponzi scamming, before he attempted to sell those who invested under him in Zeek to the highest bidder, before he ran campaigns of untruths and vicious accusations against those who called him out…

Before all of this… who was Robert Craddock?

Turns out he was a fraudster who attempted to fleece over $100,000 from a disaster relief fund.

[Continue reading…]

Zeek Rewards: Judge Approves Class Certification Notice

Below is the text of this Order:

ORDER

THIS MATTER comes before the Court upon the Receiver’s Motion to Approve Notice of Class Certification (Doc. No. 103). For the reasons set forth in the Receiver’s Motion, the Court finds that in the interests of keeping the defendant class members apprised of the certification and definition of the class, the nature of the action and claims against them, and preemptively and efficiently answering common questions that the class members may have about the litigation, the Court will approve the proposed Notice of Class Certification attached as Exhibit A to the Receiver’s Motion.

IT IS, THEREFORE, ORDERED that the Receiver’s Motion to Approve Notice of Class Certification is hereby GRANTED and the proposed Notice of Class Certification attached as Exhibit A to the Receiver’s Motion (Doc. No. 103-1) is approved by the Court. It is further ORDERED that the Receiver shall send the Notice to the class members using their email addresses registered with ZeekRewards or the Receivership and that he shall also post the Notice of Class Certification on the Receivership website at http://www.zeekrewardsreceivership.com.

Signed: March 11, 2015

Zeek Rewards: Receiver Files Suit Against UK “Net Winners”

Hot off the presses, we have this new claw back litigation aimed at UK participants in the Zeek Rewards saga just filed today in the Western District of North Carolina, 3:15-cv-108.  Zeek

Named in this suit are a number of UK residents believed to be “Net Winners”:

12. Shaun Smith is, upon information and belief, a resident of Bridgnorth, United Kingdom. Smith is a former ZeekRewards “affiliate” and was a “net winner” of $262,900.31 under one or more usernames, including “topincometeam.”
13. Peter William Bennett is, upon information and belief, a resident of Wokingham, United Kingdom. Bennett is a former ZeekRewards “affiliate” and was a “net winner” of $257,573.30 under one or more usernames, including “orchard.”
14. Mark Anthony Ferrie is, upon information and belief, a resident of Abergavenny, United Kingdom. Ferrie is a former ZeekRewards “affiliate” and was a “net winner” of $212,072.60 under one or more usernames, including “maferrie.”

15. Gary Bryan Morris is, upon information and belief, a resident of Abergavenny, United Kingdom. Morris is a former ZeekRewards “affiliate” and was a “net winner” of $342,405.01 under one or more usernames, including “everychance.”
16. Kalpesh Patel is, upon information and belief, a resident of Newham, London, United Kingdom. Patel is a former ZeekRewards “affiliate” and was a “net winner” of $140,842.47 under one or more usernames, including “international.”
17. Parvis Parvizi is, upon information and belief, a resident of Macclesfield, United Kingdom. Parvizi is a former ZeekRewards “affiliate” and was a “net winner” of $90,518.83 under one or more usernames, including “globalpartners.”
18. Cathal Lambe is, upon information and belief, a resident of Omagh, United Kingdom. Lambe is a former ZeekRewards “affiliate” and was a “net winner” of $90,311.21 under one or more usernames, including “luckoftheirish.”
19. Adrian John Hibbert is, upon information and belief, a resident of Sully, United Kingdom. Hibbert is a former ZeekRewards “affiliate” and was a “net winner” of $82,103.51 under one or more usernames, including “ade.”
20. John Noakes is, upon information and belief, a resident of Croydon, London, United Kingdon. Noakes is a former ZeekRewards “affiliate” and was a “net winner” of $59,850.62 under one or more usernames, including “syfgroup.”

Zeek Rewards: T. Lemont Silver’s Lawyer Requests Removal for Non-Payment

Say it isn’t so!!  T. Lemont Silver, Ponzi Pimp/Profiteer and Serial Promoter, has just lost legal representation for not paying the $5,000 retainer his attorney required. It would seem that Mr. Silver, his spouse and the entity he operates had agreed to pay $5,000 plus all related expenses and legal fees at normal hourly rates.

The attorney, James Jonas, had started working, garnered some expenses, but Mr. and Mrs. Silver reneged on repeated promises to pay. Not only that, but the Silvers have made themselves “unavailable” and were not even bothering to cooperate with their attorney, and the attorney believes he cannot properly or reasonably represent clients who fail to pay, reply, or provide information to further their case.

Adding insult to financial injury, the Silvers would not even reply to the request to be removed as Counsel of Record.

According to the receiver’s information found in the original Complaint in this case, the Silvers collected the following personally or by entity:

  • more than $773,000
  • more than $943,000
  • more than $600,000

That’s over $2.3 Million, folks…. and they cannot pay their attorneys??