TelexFree: Judge Denies Merrill’s Motion to Suppress Evidence
Back in May of this year, James Merrill filed for a motion for a Franks Hearing and also to
suppress all evidence derived from any and all search warrants issued pursuant to an affidavit of Special Agent John S. Soares, as the affidavit submitted in support of the search warrants contained false statements and/or reckless misstatements of fact, as well as material omissions of facts, all of which ultimately render the search warrants invalid, see Franks v. Delaware, 438 U.S. 154 (1978).
Just like other scammers caught in the act, he claims the search warrants were obtained through false statements, omitted material information, and that the search warrant affidavit does not establish probable cause to issue a warrant. Seems like many other Ponzi operators have made the same claim when they got caught; it did not work out well for them, either.
Today, Magistrate Judge Hillman denied these motions.
Zeek Rewards: Sentencing for the Dawn Wright-Olivares and Daniel Olivares
Here is the latest update from Kenneth Bell, Zeek Receiver. He has included an email address for victims to provide information that may be used at the Sentencing Hearing:
ANNOUNCEMENT FROM THE RECEIVER – August 29, 2016
On September 13, 2016 at 9:30 AM Dawn Wright-Olivares and Daniel Olivares will be sentenced in United States District Court for the Western District of North Carolina for their roles in the ZeekRewards Ponzi and pyramid scheme. The sentencing hearings are open to the public and will be held at the Federal Courthouse at 401 W. Trade Street, Charlotte, NC.
Victims of these offenses are entitled to be heard at sentencing. If a victim would like to have a letter describing the impact that ZeekRewards had on them submitted to the Court please send an email to HearingLetter@zeekrewardsreceivership.com. In particular, the Court would like to hear about any of the below circumstances:
- Becoming insolvent;
- Filing for bankruptcy under the Bankruptcy Code;
- Suffering substantial loss of a retirement, education, or other savings or investment fund;
- Making substantial changes to his or her employment, such as postponing his or her retirement plans;
- Making substantial changes to his or her living arrangements, such as relocating to a less expensive home; and
- Suffering substantial harm to his or her ability to obtain credit.
I will be attending the hearings on behalf of all ZeekRewards victims and will present your letters to the Court.
Zeek Rewards: Jaymes Meyer Gets 15 Years in Prison and $4.8 Million Judgment
According to the Charlotte Observer:
A federal judge in Charlotte delivered a message Tuesday to a Napa Valley financier:
What Zeek Rewards giveth, the federal government taketh away.
In Jaymes Meyer’s case, that includes his freedom.
The CEO of Preferred Merchants LLC in Napa, Calif., will serve 15 months in prison and pay a $4.8 million judgment for attempting to hide millions in assets connected to the Rex Ventures Group, the Lexington-based parent company of Zeek Rewards, which prosecutors describe as one of the largest Ponzi schemes in U.S. history.
Read more here: http://www.charlotteobserver.com/news/local/crime/article97429572.html#storylink=cpy
Zeek Rewards: Receiver Replies to Class Defendants
Just filed today, Kenneth Bell has replied to the Class Defendant’s (Rhonda Gates, Innovation Marketing, LLC, Aaron Andrews, Shara Andrews, and Durant Brockett) response to his initial Motion for Summary Judgment and Partial Summary Judgment against the Net Winner Class. It seems that Jerry Napier, Darren Miller, T. Le Mont Silver, Global Internet Formula, Inc., Karen Silver, and Dave and Mary Kettner did not respond to the Receiver’s motion.
Under “Summary of Argument”, the Reply states that after more than a year and considerable cost to the Receivership engaging a defense expert to investigate the question of whether or not Zeek operated as a Ponzi that the
Defendants have conceded—without a single reference to their own expert—that ZeekRewards was a Ponzi scheme which intentionally defrauded hundreds of thousands of victims out of hundreds of millions of dollars. Indeed, since the filing of the Receiver’s motion Paul Burks, the mastermind of the ZeekRewards scheme, has been found guilty by a Federal court jury of three counts of securities fraud and one count of tax fraud related to the Ponzi scheme. So, the fact that ZeekRewards was a Ponzi scheme has now been established as a matter of undisputed facts and law.
Despite this concession that Zeek was a Ponzi, the Defendants argue that they can avoid returning their “net winnings” based upon the TOS (Terms of Service) which
can limit the Receiver’s rights to assert claims and that they should be given credit for recruiting victims to the scheme. Defendants still act as if Zeek was a legitimate business and Defendants were “internet marketing specialists” entitled to be paid as employees rather than investors in the scheme, all of which is of course pure fiction.
The Court should resist Defendants’ invitation to create the dangerous loophole of allowing a fraudster to use the terms implementing a Ponzi scheme to limit the right of a subsequently appointed Receiver to recover funds paid to the winners of the fraudulent scheme. While such a rule would be a great recruiting tool for future Ponzi scheme operators, it is surely an unacceptable legal rule and public policy.
The Defendants urge the Court to rule that purchasing bids, posting online advertisements (which only took 5 minutes a day) and recruiting thousands of victims somehow means they provided “reasonable equivalent value” such that they get to keep the victim’s money.
Bell goes on to eviscerate the Defendant’s attempt to legitimize their actions:
In other words, Defendants claim that those Defendants who spent the most time successfully promoting the scheme and multiplying the number of its victims should be given the most credit against the Receiver’s claims to recover their fraudulently transferred winnings. In fact, in arguing that they were supposedly rightly paid for their “services,” Defendants stretch to compare themselves to the utility company, which among many other differences does not invest money in their customers’ businesses hoping to share in compounding profits of 125% every ninety days. Whether or not innocent third-party trade creditors of a Ponzi scheme could be subject to a clawback action is not at issue in this case. Here, Defendants—all active participants and investors in the scheme—provided no value to ZeekRewards as a matter of law and fact; instead, as a result of their efforts the company became liable for hundreds of millions of dollars in losses incurred by the victims they recruited to the scheme.
You can read the full Response, the Zeek Terms Of Service and the Purchase/Subscription Agreement here.