Zeek Rewards: Judge Signs Order Allowing International Net Winner Actions

BREAKING NEWS:

The receiver filed a “REQUEST FOR LEAVE TO INSTITUTE ACTIONS AGAINST INTERNATIONAL NET WINNERS” today and Judge Mullen granted it. Here is part of what Kenneth Bell filed:

The Receiver has previously filed actions against the insiders who created and operated ZeekRewards, the net winners who won more than $1000 (asserting claims against the largest net winners as individual defendants / class representatives and a defendant class of the remaining net winners) and certain attorneys involved in advising RVG and promoting the scheme. By this request, the Receiver seeks leave to file one or more actions in this Court and in foreign courts to pursue claims for the return of fraudulently transferred money and disgorgement of net funds received against significant “net winners” who reside outside the United States. The foreign “net winners” to be pursued all won at least $1000, the threshold previously approved by this Court. With due regard for the interests of efficiency, cost and judicial economy, the Receiver intends to consolidate cases against net winners from each foreign country and from more than one country when possible and appropriate.

Judge Mullen approved this action thus:

ORDER

THIS MATTER is before the Court upon the Receiver’s Request for Leave to Institute Actions Against International Net Winners. The Receiver alleges that these persons and entities won money in the ZeekRewards program and should be required to pay their net winnings back to the RVG for the benefit of ZeekRewards’ victims. For good cause, the Court will grant the Receiver’s request.

IT IS, THEREFORE, ORDERED that the Receiver is hereby granted leave to file the actions for which leave has been requested.

Zeek Rewards: Non-party “Preferred Merchants Solutions, LLC” Requests Leave to File Suit Against Kenneth Bell

Showing up on the docket recently in the original SEC case (12-cv-519) is a request from a non-party entity to “Lift Stay and Leave to Commence Lawsuit Against Kenneth D. Bell As Receiver of Rex Ventures Group, LLC”.  This filing has been uploaded onto the Files website, ZeekDoc230 and 230-1

In this filing, they ask the Court to:

lift the stay imposed in this action and grant Preferred leave to commence a declaratory judgment action against Kenneth D. Bell in his capacity as receiver of Rex Venture Group, LLC (“Receiver”). A copy of Preferred’s proposed declaratory judgment complaint is attached to this Motion as Exhibit 1. For the reasons detailed in the accompanying Memorandum in Support, which is hereby incorporated by reference, the Court should lift the stay for the limited purpose of Preferred’s declaratory judgment action against the Receiver and grant Preferred leave to commence its declaratory judgment action against the Receiver.

Here are a few tidbits from the filing, explaining their position:

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TelexFree: Joseph Craft Answers SEC Amended Complaint, Again?

I am not totally sure why there have been 3 recent filings by Mr Craft in which he answers the Original Complaint once and the Amended Complaint two times.  All the filings are precisely 20 pages long, and from outward appearances, they are little to no differences between them. One would think that one filing of his Answer would suffice.

One common thread among these three filings is this, he disavows any knowledge of wrongdoing: (emphasis added by me)

The Defendant did not know that the scheme described in the Complaint qualified as an illegal Ponzi scheme and was involved in the unregistered sale of securities when he became TelexFree’s accountant, and did not conclude that it was until approximately March, 2014. He admits that various individual defendants cited in Paragraph 1 appear to have been engaged in a multi-level marketing enterprise, which purported to be in the business of selling telephone service plans using Voice-over Internet Protocol (“VoIP”) technology. The Defendant admits the allegations in paragraph 1 that assert that the Debtors were headquartered in Marlborough, Massachusetts and that at least from April 2012, the owners of the defendant corporations were James Merrill and Carlos Wanzeler.

The Defendant denies that he was a principal or insider in the enterprise at any time, and says that he performed honest and legitimate accounting services for the corporations named in the Complaint. He denies that he assisted any wrongful activity. He was kept in the dark about the true nature of the enterprise’s activities and was a victim of misrepresentations for most of the time that he served as TelexFree’s accountant. He was not an insider, employee, owner, principal or promoter.

I have uploaded this new Answer onto the Files website (Doc 233)

Zeek Rewards: Judge Mullen Orders Interim Distribution

ORDER APPROVING MOTION TO AUTHORIZE
FIRST INTERIM DISTRIBUTION, ESTABLISH RECORD DATES
AND SET FIRST INTERIM DISTRIBUTION DATE

This matter is before the Court upon the Receiver’s Motion for an Order Approving his motion to (i) authorize an interim distribution on account of allowed class 3 claims, (ii) establish a record date for eligibility to receive the First Interim Distribution on the First Interim Distribution Date, (iii) set the First Interim Distribution Date, and (iv) establish Subsequent Record Dates and Subsequent Distribution Dates for making the First Interim Distribution to Class 3 Claimants whose claims are allowed prior to a Subsequent Record Date (the “Motion”).1 Non-party Plastic Cash International, LLC (“PCI”) filed a response objecting to the Receiver’s motion.

1 Capitalized terms used, but not defined herein, shall have the meanings ascribed them in the Motion.

This Court, having reviewed and considered the Motion, and upon all of the proceedings had before this Court, and after due deliberation and sufficient cause having been shown, the Court hereby GRANTS the Motion in all respects. The Court specifically notes that this Order does not purport to determine the validity or priority of PCI’s claim. The PCI Claim will be addressed through the Claim Determination process and separate litigation.

IT IS HEREBY FOUND, DETERMINED, ORDERED, ADJUDGED, AND DECREED, AS FOLLOWS:
1. The notice of the Motion sent via electronic mail to all entities that fully submitted claims on the Claims Portal via the electronic mail address provided in the Claim submission process by such entity constitutes good and sufficient notice of the Motion and all the relief sought therein.

2. The Receiver is authorized, but not directed, to make the First Interim Distribution directly to the Claimants who hold Allowed Claims in Class 3 pursuant to the Distribution Plan.

3. The First Interim Distribution Record Date shall be August 15, 2014.

4. The First Interim Distribution Date shall be September 30, 2014.

5. The first Subsequent Record Date for the First Interim Distribution shall be December 31, 2014.

6. Additional Subsequent Record Dates for the First Interim Distribution shall occur on each of the last business days of each calendar quarter subsequent to the first Subsequent Record Date.

7. The first Subsequent Distribution Date for the First Interim Distribution shall be January 30, 2015.

8. Additional Subsequent Distribution Dates for the First Interim Distribution shall occur on the last business day of the calendar month that directly follows a Subsequent Record Date.

9. The methodology for determining the amount of reserves to be held by the Receiver for the holders of Class 3 Claims that are not allowed by the First Distribution Record Date, but have not been disallowed, is proper. The amount to be reserved by the Receiver for the holders of Class 3 Claims that are not allowed as of the First Distribution Record Date shall be determined and held in the manner set forth in the Motion.

10. The Receiver shall establish a reserve on account of Class 3 Claims that are not allowed as of the First Distribution Record Date in the aggregate amount of the First Interim Distribution Amount that would be necessary to pay such Class 3 Claimant based on the amount that such Class 3 Claimant asserted in the Claim Process, after applying Rising Tide to the First Interim Distribution Amount in accordance with the Distribution Plan.

Continue reading “Zeek Rewards: Judge Mullen Orders Interim Distribution”

TelexFree: James Merrill Release Conditions, Arrest Warrant in Abeyance, and more….

On the docket today were entries regarding Merrill’s Conditions of release, along with a signed “Arrest Warrant in Abeyance”.  I guess that it is good to be prepared for violating Curfew or any other condition. You may read the new documents here.

In addition, there is an entry regarding the $900,000 Bond secured by 3 properties, a Motion for Release of Funds and a record of Mortgage on one of the properties held for Bond.

The Motion to release Funds mentions that the Order to freeze assets on May 9, 2014 included:

  • Middlesex Savings Bank,  $10,643.00
  • Middlesex Savings Bank,  $104,988.64
  • Waddell & Reed,   $3,985,097.33
  • Waddell & Reed,   $79,684.28

Merrill is asking the Court to release funds so he can pay for his legal defense, since the Court found him to be “indigent” based on his money was frozen and inaccessible.  The Motion goes on to say that:

On or about June 18, 2014, with the assent of the Securities and Exchange Commission, Mr. Merrill moved for the release of certain accounts subject to a freeze order issued by Judge Gorton in the SEC litigation. Attorneys for the SEC assented to the release of the accounts, concluding that they did not contain a sufficient nexus to TelexFree. Judge Gorton has since allowed the motion. The following accounts have been ordered released by Judge Gorton, only the last of which is covered by the seizure warrants identified above:

Waddell & Reed,   IRA,  $33,851
Waddell & Reed,   Savings (for benefit of son)  $14,719
Waddell & Reed    Savings (for benefit of daughter),    $29,641

Waddell & Reed,   IRA  $91,692
Waddell & Reed    IRA   $158,289
Waddell & Reed   401K  $80,272

In the first group of numbers above, Merrill has around $4.1 million dollars in frozen assets and only has that little pittance set aside for his children’s education? And his “retirement” savings amount to around $ 375,000?

Maybe it’s just me but Merrill seems to need to reevaluate his priorities, especially since he can lose it all if convicted. Maybe it is not such a good idea to run a Ponzi/Pyramid scheme?

How long will these nimrods take to figure this out??

 

From BehindMLM: Rippln Sued For Copyright Infringement

(Note: I grabbed the Federal Docket file and put it on the Files website)

Rippln sued for trademark infringement

Jan.05, 2014 in Rippln

rippln-logo

When we last checked in on Rippln, we noted that the company had gone suspiciously quiet for a few weeks. I say suspiciously because prior to the silence it was a task in itself to sift through Rippln’s hype machine and keep track of the company.

brian-underwood-ceo-rippln

Firing back through Troy Dooly (who “works for some of the investors in Rippln”), CEO Brian Underwood (right) explained that the lack of communication was due to US holidays.

[2:38] I said Brian you’ve been silent, what’s happening?

 

He said “what are you talking about, it’s Thanksgiving. Some of us left down and went to Thanksgiving prior, some afterwards

We’re still conducting business. Matter of fact we do two calls a week, that isn’t being silent.

Now we haven’t done blog posts and stuff. I can’t win for losing, with you or these other critics.

If I make too much noise, you guys tell me I’m hyping this stuff. If I don’t make any noise cuz we’re working, then we’re “running” or we’re having a eulogy or some crap like that.

Shortly after Underwood’s response, Rippln released its long-awaited Communicator App… and then things went quiet again. A few posts popped up on Rippln’s Facebook page during December, with the last one a Christmas message dated December 25th.

Almost a fortnight later there’s been nothing from Rippln corporate, with affiliates once again left wondering what is going on:

rippln-affiliates-no-communication-facebook-january-2014

No doubt Underwood’s answer would be “well it’s Christmas and New Years, can’t we get a break”, and for that reason I was going to leave writing a followup till mid January or so.

I say “was” because yesterday news broke that this time around, there might be an entirely different reason for Rippln’s silence. One that strikes at and threatens the future of the company altogether… [Read the rest of this entry…]

From BehindMLM: Zeek Ponzi Winners Trying To Dodge Clawbacks

 

Zeek Ponzi winners trying to dodge clawbacks

Nov.07, 2013 in Zeek Rewards

zeekrewards

 

The first clawback claims are now imminent, and a lawsuit against multiple named defendants along with a class of net winners will be filed during the fourth quarter of 2013.

-Kenneth Bell, Zeek Rewards Receiver (October 2013)

With Zeek Rewards top net winners now staring down the barrel of pending clawback litigation, the race is on to hide assets and funds from the Zeek Receiver.

Whereas the full extent of the lengths Zeek Rewards’ top Ponzi profiteers will go to in an efforts to avoid paying back those they stole from is difficult to determine, some insight is provided by MoneyMakerGroup forum member, “HerculesUnchained”.

Seeking to join the MLM opportunity DS Domination, HerculesUnchained writes:

clawback-litigation-dodging-herculesunchained-moneymakergroup

I would like several people to contact the CEO of DS Domination to get an answer to this inquiry. I need for you to inquire since I do not have access to the CEO.

I have been looking at the MMG forums and I spotted a program called DS Domination that looks like it is a good replacement for Zeek and there is no chance of it being attacked by a desperate government because of how it is set up, so it looks to be a very good program.

But before I sign up I want to make sure that a person can sign up using a company as the member of DS Domination and I do not want to sign up using my own name.

The reason for this is because I may soon have an unjust lawsuit against me and I can legally protect the membership I have with DSD and the profits I get from DS Domination if I use a company to sign up since a company is a separate legal “person” from myself.

The profits earned by that company can not be easily attacked after the unjust lawsuit is issued against me.

If the admin allows members to sign up using a company then I will respect him for that since he is thinking of the welfare of the membership and not just the profits that his membership can bring to him.

Please find out if we can sign up with DS Domination in a company name or not. If not, then the admin will be forcing me to be exposed to possibly losing the profits I will be forced to personally earn through DSD because of that unjust lawsuit that may soon come my way.

I need to know if the admin. will allow us to PROTECT OURSELVES LEGALLY by SIGNING UP with DSD LEGALLY THROUGH A COMPANY that we own. Please find out and get back to me. Thanks.

Also, find out if we can have the option of being issued a check or not. I would prefer that the profits which are generated to my company be issued through a check that is sent to my company. 

Thanks for finding out this information for me since you are on MMG quite often. Thanks again.

That “unjust lawsuit” HerculesUnchained is referring to is the same pending clawback I quoted Kenneth Bell mentioning at the start of this article. Apparently HerculesUnchained believes ripping off people in a Ponzi scheme and being made to pay those who lost money back, is “unjust”.

Long-time readers of BehindMLM will observe this isn’t the first appearance HerculesUnchained has made on the blog.

Just over a year ago HerculesUnchained called on Bidify affiliates to launch a “recruitment strike“, following the company’s failure to pay out affiliates. Just last month, quoting “another person”, he then urged ex-Zeek Rewards affiliates to launch a lawsuit against the US government over the cost of the Obamacare website. Once this lawsuit was filed Zeek Rewards’ top affiliates would then

make a deal… that if they will drop the lawsuit against the Zeek people, then we will drop our lawsuit against them.

Meanwhile whilst I’m no expert on clawback litigation, one would hope that escaping it wasn’t as simple as registering a company and transferring all your Zeek Ponzi profits into said company’s bank accounts.

Anyone?

Meanwhile why HerculesUnchained thinks DS Domination “is a good replacement for Zeek” I have no idea.

Sure, under DS Domination’s business model the company pays out commissions on recruitment with 100% of the revenue generated via affiliate membership fees, but that’s a far cry from the $600M Ponzi investment scheme Paul Burks pioneered with Zeek Rewards.



Less Than A Week Remains To Settle With Zeek Receiver!!

If you have not completed and fully submitted a claim through the Receiver’s online Claim Portal or through alternative means expressly authorized by me in writing prior to 11:59pm prevailing Eastern Time on September 5, 2013, your claim will not be counted and you will not receive a distribution on account of any amounts that Zeekrewards may owe you.

You may still request permission to submit your claim using a method other than the Receiver’s online Claim Portal by sending an email to claims@zeekrewardsreceivership.com. However, permission to submit a claim outside the Receiver’s Online Claim Portal will be granted only in rare instances, will be in my sole discretion, and will be evidenced by a written acknowledgment from me.

As always, thank you for your continued patience in this process. I continue to be dedicated to returning to you the greatest percentage of the amount of your claims as is possible.

Sincerely,

Kenneth D. Bell

Receiver for Rex Venture Group, LLC d/b/a ZeekRewards

Zeek Affiliates Motion To Release 3rd Party Assets is Denied!

ZeekNot completely unexpected, at least by most of us, the Motion has been denied by Senior Judge Mullen and was, posted on the docket today. The Order denying the motion starts off with this:

This matter is before the Court upon an “Emergency Motion for an Order Requiring Release of Third-Party Assets Frozen in Response to this Court’s August 17, 2012 Order and Request for Evidentiary Hearing” filed by non-party movants David Sorrells, David Kettner and Mary Kettner (“Movants”). Both the Receiver and the SEC have filed a response in opposition to this motion. No Reply has been filed.

Movants are each former affiliates of ZeekRewards.com and each an owner of an e-wallet account at NxPay® which has been frozen. Movants contend that similar to funds in a normal bank account, any funds in their NxPay® accounts are owned by them and that the Receivership Defendant does not have an interest in the accounts and has no right to access the funds by charge-back or otherwise.

Each individual who signed up with NxPay® entered into a user agreement (“User Agreement”) governing his or her relationship with NxPay®. The User Agreement describes the nature of the services provided by NxPay® as follows: “The Services are issued by and all funds are held by the Company for processing only. These are not bank held accounts. You acknowledge and agree your balance is not a deposit, does not bear interest and is not insured by any government agency.” Moreover, when funds are being processed through NxPay®, the party paying the money can still control those funds. The User Agreement states at Paragraph 5, “If your Card or Account is funded by a third party, you authorize us to reverse such payment upon request of the third party.”

Movants’ argument that funds in their NxPay® accounts were like funds in normal bank accounts is belied by the plain language of the User Agreement. The User Agreement establishes that RVG retained control over funds that it had placed in the Movants’ accounts which were not withdrawn by Movants. Accordingly, NxPay® properly froze the accounts and the funds determined to be RVG funds must be returned to the Receiver pursuant to the Agreed Order.

IT IS THEREFORE ORDERED that the “Emergency Motion for an Order Requiring Release of Third-Party Assets Frozen in Response to this Court’s August 17, 2012 Order and Request for Evidentiary Hearing” filed by non-party movants is hereby DENIED, and the Court Orders the RVG funds being held by NxPay® to be turned over to the Receiver.

And there you have it. I wonder why these 3 “Movants” never replied to the responses from the Receiver and the SEC. It gives the appearance that they knew it was a futile venture, or they gave up hope of it coming to fruition. Either way, they have until tomorrow to enter into a settlement or face certain litigation to recover Receivership assets.