Zeek Rewards: October 30th Receiver Announcement


Various foreign claimants have reported that their banks have refused to deposit the distribution checks I have sent to you. It is likely that these banks are mistakenly seeking to deposit the checks in the local currency instead of in United States dollars. ALL checks issued by the Receivership are issued in United States dollars. Please inform your bank when you are depositing your check that it is in United States dollars. I am unable to issue checks in any currency other than United States dollars.

PatrickPretty: SEC Official Speaks On TelexFree Case

“We know of at least one victim who borrowed, I think, $50,000 from his mother and gave it all to [TelexFree]. And it was her entire retirement.” Melissa Armstrong, assistant chief litigation counsel, U.S. Securities and Exchange Commission, Oct. 29, 2014


Read the story here.

Zeek Rewards: Receiver Files 3rd Quarter Status Report

The Receiver has filed his Status Report for the 3rd Quarter of 2014, and below are a few of the highlights from this filing:

Marshaling and Preserving Receivership Assets

a. Accounts for Holding Receivership Assets
In addition to the four interest-bearing bank accounts holding Receivership Assets that the Receiver has reported on in previous status reports (the “Affiliate Account,” the “Seized Asset Account,” the “Pre-Filing Account,” and the “Settlement Account”), the Receiver opened two new accounts during the third quarter: one for the purpose of withholding amounts that may be owed to the IRS on distributions made to affiliates (the “Withholding Account”), and another for the purpose of maintaining payments owed for professional services provided to the Receivership Estate (the “Holdback Account”).

Excluding transfers between accounts, the Receiver deposited the following funds into its accounts during the third quarter of 2014:
• $259,294.00 into the Affiliate Account from payments from various financial institutions relating to previously dishonored cashier’s checks, teller’s checks and bank money orders; and
• $1,868,251.77 into the Settlement Account from settlements with net-winners.
As of September 30, 2014, the Receivership Estate held approximately $90.7 million in the Affiliate Account, approximately $204 million in the Seized Asset Account, approximately $295,000 in the Pre-Filing Account, approximately $4.3 million in the Settlement Account, approximately $23 million in the Withholding Account, and approximately $858,000 in the Holdback Account.

b. Cashier’s Checks

During the quarter, EBCM collected payments on these dishonored instruments and transferred those payments to the Receiver, resulting in the deposit of $259,294.00.
As of September 30, EBCM was working thirty-nine (39) unresolved claims currently valued at $506,258.

c. Funds Held by E-Wallets

As stated in our prior report, the Receiver Team recovered approximately $3.98 million from NxPay.

It is likely that the Receiver will commence litigation against NxPay to recover the approximately $9 million in outstanding assets that should have been frozen and remitted to the Receiver.

d. Additional Asset Recovery

The Receiver Team, with FTI, continues to investigate and pursue the recovery of Receivership Assets from Preferred Merchants and its CEO Jaymes Meyer. The Receiver Team filed an opposition to this motion requesting that the Court maintain the litigation stay and decide the issues in a contempt proceeding to prevent Preferred Merchants from circumventing the Court’s claims process and the onslaught of similar suits.

The Receiver Team also moved for an order finding Preferred Merchants and Jaymes Meyer in contempt for violating the Court’s freeze order by failing to return the $4.8 million that Preferred Merchants fraudulently transferred to itself from an account held in trust for the benefit of RVG upon notice of the asset freeze and imminent shutdown of RVG.

e. Foreign Accounts

The Receiver Team is continuing its investigation and pursuit of outstanding funds from Payza, Payment World, Solid Trust Pay, and Cyber Profit. With respect to the approximately $13.2 million outstanding from Payza and/or Payment World, during the third quarter, the Receiver Team reviewed numerous documents that Payment World produced in response to the Receiver’s subpoena. The Receiver Team also continues to pursue avenues of communication with, and options to recover assets directly from, VictoriaBank in Moldova, the bank that purportedly holds these outstanding Receivership Assets. Finally, the Receiver Team is working with various United States and international government agencies in efforts to recover the outstanding funds.

This is a rather lengthy filing and these are but the pertinent parts from the beginning of the filing; you can read the full document and the 2 Exhibits on the Files website.

SEC and FINRA Warn Investors About Penny Stock Scams

10/30/2014 11:00 AM EDT

The Securities and Exchange Commission’s Office of Investor Education and Advocacy and the Financial Industry Regulatory Authority (FINRA) today issued an alert warning investors that some penny stocks being aggressively promoted as great investment opportunities may in fact be stocks of dormant shell companies with little to no business operations.

The investor alert provides tips to avoid pump-and-dump schemes in which fraudsters deliberately buy shares of very low-priced, thinly traded stocks and then spread false or misleading information to pump up the price.  The fraudsters then dump their shares, causing the prices to drop and leaving investors with worthless or nearly worthless shares of stock.

“Fraudsters continue to try to use dormant shell company scams to manipulate stock prices to the detriment of everyday investors,” said Lori J. Schock, Director of the SEC’s Office of Investor Education and Advocacy.  “Before investing in any company, investors should always remember to check out the company thoroughly.”

Gerri Walsh, FINRA’s Senior Vice President for Investor Education, said, “Investors should be on the lookout for press releases, tweets or posts aggressively promoting companies poised for explosive growth because of their ‘hot’ new product.  In reality, the company may be a shell, and the people behind the touts may be pump-and-dump scammers looking to lighten your wallet.”

The investor alert highlights five tips to help investors avoid scams involving dormant shell companies:

  • Research whether the company has been dormant – and brought back to life.  You can search the company name or trading symbol in the SEC’s EDGAR database to see when the company may have last filed periodic reports.
  • Know where the stock trades.  Most stock pump-and-dump schemes involve stocks that do not trade on The NASDAQ Stock Market, the New York Stock Exchange or other registered national securities exchanges.
  • Be wary of frequent changes to a company’s name or business focus.  Name changes and the potential for manipulation often go hand in hand.
  • Check for mammoth reverse splits. A dormant shell company might carry out a 1-for-20,000 or even 1-for-50,000 reverse split.
  • Know that “Q” is for caution.  A stock symbol with a fifth letter “Q” at the end denotes that the company has filed for bankruptcy.

For more information about how to avoid fraud, visit www.investor.gov.