Tag Archives: receiver

Zeek Rewards: Receiver’s Announcement for February 2

ANNOUNCEMENT FROM THE RECEIVER – February 2, 2017

As I previously announced, I continue to pursue Final Judgments requiring each member of the Net Winner Class of those who won at least $1000 in ZeekRewards to repay their net winnings to the Receivership for distribution to victims of the scheme. On January 27, 2017, United States District Judge Graham Mullen entered an Order on Process for Determining the Amount of Final Judgments Against Net Winner Class Members, which sets forth the process for determining the amount of the net winnings received by each member of the Net Winner Class. That amount plus prejudgment interest will then become the amount of the Final Judgment to be entered against the net winner. I intend to pursue collection of these judgments vigorously, and expect the ultimate amount collected, while uncertain, will be a substantial sum.

The Court’s Order, which describes the process in detail, may be viewed by following this link. The first step in the process – notifying each Net Winner of the amount of their net winnings – is expected to begin next week. After notification, each Net Winner is required to provide a response stating whether he or she accepts or disagrees with that amount within 60 days of the notification using a website Net Winnings Determination Response Portal. More information and links to the Response Portal will be sent to the Net Winner Class members in the notification email. If a Net Winner does not receive their notification by February 13, 2017 then he or she should email netwinningsresponse@zeeknetwinnerclass.com to receive instructions on how to obtain the notification.

Throughout the Receivership, the Receiver has expressed a willingness to consider voluntary final settlements with ZeekRewards’ Net Winners to efficiently resolve the claims against them. Hundreds of settlements have been negotiated with Net Winners and approved by the Court. If a Net Winner wants to discuss a settlement of the Receiver’s claims prior to Final Judgment being entered, please communicate with the Receiver at zeeksettlement@mcguirewoods.com.

Zeek Rewards: Receiver Proposes Final Judgment Process For “Net Winners”

Zeek Receiver, Kenneth Bell, has filed a Motion to Enter and Order for determining the amount of Final Judgment against the “Winner Class” members. The Court had entered an Order granting a Summary Judgment and Partial Summary Judgment against the Net Winner Class on November 29, 2016. The Court found that the Net Winner Class received “fraudulent tranfers” that must be repaid to the Receiver.

The only issue now remaining before the Court with respect to the Net Winner Class is how to fairly and efficiently determine the amount of the Final Judgment (ZeekRewards net winnings plus pre-judgment interest) to be paid by each of the over 9000 members of the class.

Attached to the Motion is an Exhibit containing the proposed process

that will give each class member individual notice of the amount of his or her “net winnings” according to RVG’s records, an opportunity to respond to that amount with evidence of a different amount and access to a fair and expedient process to resolve any cases in which the Receiver and Net Winner cannot agree on the amount of the Final Judgment. Counsel for the Receiver has conferred with Counsel for the Net Winner Class, and Counsel for the Net Winner Class has stated that the Net Winner Class has no objection to the Receiver’s proposed process.

Part of the proposal is notification “on or before January 31, 2017” of the amount of “Net Winnings” as indicated in RVG’s records and the records of the Receivership.

The amount of net winnings shall be calculated by the Receiver (through his expert witness) in the same manner as the Final Judgments entered against the named Net Winners in this action.

The process proposed is rather lengthy, so here is a link to it on the ASDUpdates Files website. Also listed is the Proposed Order.

Zeek Rewards: Announcement From Receiver

 

 

ANNOUNCEMENT FROM THE RECEIVER – January 12, 2017

I am pleased to announce that we will be making a third partial interim distribution to all Affiliates who hold Allowed Claims on March 15, 2017. When made, combined with the first and second partial interim distributions and the amounts paid by ZeekRewards to such Affiliates before it was shut down, the third partial interim distribution will have returned to victims with Allowed Claims a total of at least 75% of their losses using the rising tide method.

If you previously have received payment from the Receivership, or receive a payment for the first time during the January 31 distribution, you will be issued another payment on March 15, 2017. If you had recovered more than 60% from ZeekRewards prior to its shutdown, but less than 75%, you will receive a distribution as part of the third partial interim distribution.

The funds used to make the third partial interim distribution will be taken from the reserves that I previously held for those Affiliates whose claims were disallowed and forfeited pursuant to the Court’s November 16, 2017 Order that required these claimants to provide their Release and OFAC certification by December 31, 2016. Their failure to do so has permitted me to release these reserves and to pay the third partial interim distribution to Affiliates that hold Allowed Claims.

Finally, we do not have authority to accept new claims and are not considering further requests to amend previously allowed claims. The time to file claims or to amend claims has passed.

I am confident that we will make a further distribution in the future. I ask you for your patience, and thank you for your continuing support.

Zeek Rewards: Judge Orders “Final Judgments”

Based on Kenneth Bell’s Motion for Final Judgments for a group of “Net Winners”, Judge Mullen has issued an Order as follows:

THIS MATTER comes before the Court on the Receiver’s Motion to Enter Judgment and to Confirm Judgments as Final.

 
For good cause shown, the Motion is hereby GRANTED and the Final Judgments requested shall be entered as filed.

So far, three (3) Final Judgments have been entered today:

  • Final Judgment is hereby entered against Defendants David Kettner, Mary Kettner, Kettner & Associates, LLC and Desert Oasis International Marketing, LLC (The Kettner Defendants) jointly and severally, in the amount of $1,259,114.65 which is comprised of $937,529.27 in net winnings from the ZeekRewards scheme and $321,585.38 in prejudgment interest
  • Final Judgment is hereby entered against Defendants T. Lemont Silver, Sr., Karen Silver, and Global Internet Formula, Inc., (The Silver Defendants) jointly and severally, in the amount of $3,141,668.09, which is comprised of $2,339,267.35 in net winnings from the ZeekRewards scheme and $802,400.74 in prejudgment interest
  • Final Judgment is hereby entered against Defendant Durant Brockett in the amount of $2,312,129.25, which is comprised of $1,721,597.67 in net winnings from the ZeekRewards scheme and $590,531.58 in prejudgment interest

Zeek Rewards: Judge Enters Final Judgments Against 3 “Net Winners”

Judge Mullen has ordered Final Judgments against 3 of the “net winners”, with more likely to follow.

Kenneth Bell has also filed for Final Judgments against:

  • Defendant Rhonda Gates in the amount of $1,916,479.07
  • Defendants T. Lemont Silver, Sr., Karen Silver, and Global Internet Formula, Inc., jointly and severally, in the amount of $3,141,668.09
  • Defendant Durant Brockett in the amount of $2,312,129.25, and
  • Defendants David Kettner, Mary Kettner, Kettner & Associates, LLC and Desert Oasis International Marketing, LLC jointly and severally, in the amount of $1,259,114.65

As of today, only these Defendants have had Final Judgments ordered, as follows:

Final Judgment is hereby entered against Defendant Jerry Napier in the amount of $2,349,670.59, which is comprised of $1,749,550.73 in net winnings from the ZeekRewards scheme and $600,119.86 in prejudgment interest, calculated at the North Carolina statutory rate of 8% per annum from August 17, 2012, which is on or after the date of the last fraudulent transfer payment to each Defendant, to November 29, 2016, the date of the Summary Judgment Order in this action.

Final Judgment is hereby entered against Defendant Darren Miller in the amount of $2,198,738.44, which is comprised of $1,637,167.55 in net winnings from the ZeekRewards scheme and $561,570.89 in prejudgment interest, calculated at the North Carolina statutory rate of 8% per annum from August 17, 2012, which is on or after the date of the last fraudulent transfer payment to each Defendant, to November 29, 2016, the date of the Summary Judgment Order in this action.

Final Judgment is hereby entered against Defendants Aaron Andrews, Shara Andrews, and Innovation Marketing, LLC, (The Andrews Defendants) jointly and severally, in the amount of $1,359,897.50 which is comprised of $1,012,571.58 in net winnings from the ZeekRewards scheme and $347,325.92 in prejudgment interest, calculated at the North Carolina statutory rate of 8% per annum from August 17, 2012, which is on or after the date of the last fraudulent transfer payment to each Defendant, to November 29, 2016, the date of the Summary Judgment Order in this action.

Zeek Receiver Announcement for December 9th

ANNOUNCEMENT FROM THE RECEIVER – December 9, 2016

On November 10, 2016 the Court granted the Receiver’s motion to disallow and forfeit recognized claims if the claimant does not electronically sign the required Release and OFAC certification by December 31, 2016. All claimants who fall into this category received emails on October 1, November 1 and December 1 asking them to complete the process. They received another email from the Receiver today making a personal appeal for them to sign the forms online. These claimants must follow these steps:

  1. Log into the online claim portal at https://cert.gardencitygroup.com/zrwdet/fs/home. If you have forgotten your Registration ID and/or password, you can retrieve them by clicking on the link directly below the login box labeled “Click here if you have forgotten your Registration ID or Password.”
  2. Once logged in, click the button “Proceed with claim completion process” on the Claimant Summary page under the Claim Status section of that page (it is in the center of the page you reach upon logging in).
  3. Review the Declaration and Release. To complete and submit the Declaration and Release, check the box that states “I certify under penalty of perjury that the foregoing is true and correct” type your first and last name in the electronic signature of claimant box, and then click the “I Agree and Electronically Sign the Declaration and Release” button.
  4. Review the OFAC Certification. To complete and submit the OFAC Certification, check the box that states “I certify under penalty of perjury that the foregoing is true and correct,” type your first and last name in the electronic signature of claimant box, and then click the “Confirm Certification” button.
  5. Confirm or update your contact information for payment.
  6. Click the “Complete Claim Determination Process” button.
  7. You have now completed the submission of your Release and OFAC Certification. You may logout of the online claim portal or return to the Claimant Summary page.

For further assistance completing the OFAC Certification screen, please view the instructional video found here: http://www.zeekrewardsreceivership.com/OFACandRelease.

Failure to complete this process by December 31, 2016 will result in forfeiture of claim, meaning a distribution check will never be issued.

AFFILIATES WHO HAVE ALREADY RECEIVED A DISTRIBUTION DO NOT NEED TO DO ANYTHING FURTHER IN ORDER TO BE ELIGIBLE TO RECEIVE ANY SUBSEQUENT DISTRIBUTION THAT THE RECEIVER MAY MAKE. Those affiliates have already completed the required process.

This is not a new opportunity to file a claim. The time to make a claim ended on September 5, 2013 by order of the Court. Please do not attempt to file a claim now.

Zeek Rewards: Judge Mullen Grants Default Judgement in ‘Bell v Disner et al’

zeekrewardsIn case filed by the Zeek Receiver, Kenneth Bell, the receivership filed  civil suit against what were called “Net Winners” in the Zeek scam which garnered $1000 or more from the scheme. The list of Defendants included a large number of serial promoters of this type of pyramid/Ponzi scheme such as:

Todd Disner, Trudy Gilmond, Jerry Napier, Daren Miller, Rhonda Gates, David Sorrells, Aaron and Shara Andrews, T. Lemont Silver, Karen Silver, Michael Van Leeuwen, Duran Brockett, David and Mary Kettner and a “Defendant Class of Net Winners”.

Several of the individuals above were involved in ASD and other scams prior to promoting Zeek and bilking thousands of people on the false hopes of becoming rich with little or no effort. The majority of these defendants have already received judgments which resulted in them having to return monies to the receivership to be distributed to the victims.

The problem with scams like Zeek is the money was actually made from recruiting others, not from sales of products of services. Sadly, a new one pops up almost every day.

You can read the 27 page order, wherein the Judge details the reasons for his decision and a background on the scam by clicking the link. There is also a list of the “Net Winners” on the site.

Zeek Rewards: Judge Grants Motion to Disallow Incomplete Claims and Forfeit Distributions

zeekrewardsOn March 26, 2014, the Court approved the Receiver’s Motion for an “Order Approving Distribution Procedures and Certain Other Related Relief” (Doc 199) and issued that order. In it, the Court specified the manner that the Receiver had the authority to settle claims, establish claims procedures and also appointed a “special master”, retired Judge Frank W. Bullock, Jr., to oversee any objections by claimants, and a method to appeal the determination of the Special Master.

On November 3, 2016, the Receiver filed a Motion to Disallow claims that were not filed properly by the deadline of December 31, 2016. Today, Judge Mullen granted that motion:

THIS MATTER is before the Court upon the Receiver’s Motion to Affirm the Disallowance of Claims and Forfeit of Distributions on account of such Claims for the failure by Affiliates to submit an OFAC Certification and Required Release pursuant to the Order Approving Distribution Procedures and Certain Other Related Relief (Doc. No. 199) (the “Motion”). The Court, having considered the Motion, the proceedings that have occurred in this Case, and the relevant case law, and after due deliberation and sufficient cause having been shown, Grants the Motion in all respects.

 
IT IS, THEREFORE, ORDERED that pursuant to Paragraph 37 of the Order, the Receiver may deem any claim of a Subject Affiliate that has failed to submit the Required Information by11:59 p.m., Eastern time, on December 31, 2016, as disallowed and the distribution to be made on account of any such claim as forfeited.

 
IT IS FURTHER ORDERED that the Receiver shall release any amounts held in reserve on account of a disallowed claim to the general pool of assets from which distributions will be made to holders’ of Allowed Claims.

 
IT IS FURTHER ORDERED that the Receiver may make limited exceptions to the disallowance of a claim and the forfeiture of the distributions on account of such claim for cause, in his sole discretion, at any time prior to making a final Distribution, but only in the event that such Subject Affiliate also provides the Required Information.

 
Signed: November 10, 2016

 

Zeek Rewards: Announcement from Receiver

 

ANNOUNCEMENT FROM THE RECEIVER – October 5, 2016

More than 41,000 claimants have a claim recognized by the ZeekRewards Receivership, but have failed to electronically submit an OFAC certification and release. The ZeekRewards Receivership cannot pay a claimant with a recognized claim unless the claimant submits an OFAC certification and release. Failure to submit an OFAC certification and release may result in these claims being forfeited.

The Receiver anticipates filing a motion to obtain confirmation from the Court that, subject to certain limited exceptions, any claimant that has not electronically submitted its OFAC certification and release by December 31, 2016 will be deemed to forfeit his/her claim in the ZeekRewards Receivership. Once approved by the Court, the funds held in reserve for the forfeited claims will be released from the reserve for payments to claimants with allowed claims in this case.

The Receiver has and will continue to contact all claimants that hold one of these more than 41,000 claims regarding the forfeiture of their claim.

Zeek Rewards: Receiver Asks for Summary Judgment Against Class of “Net Winners”

Filed on the virtual eve of the Burks criminal trial which begins on July 5th, the Receiver has filed a ZeekMotion for Summary Judgment in Bell v Disner, et al, along with a supporting memorandum of Law and a group of Exhibits.  The Motion lists the “Named Defendants” like this:

The named defendants in this action are among the largest net winners of the ZeekRewards scheme, with winnings for each reaching as high as $1,875,000. The Court already has entered Judgments against several of these named defendants – who either failed to answer or cooperate in the action. See supra at n.1 and Doc. Nos. 76, 93, 95 and 119. Two defendants, Lori Jean Webber and P.A.W.S. Capital Management LLC, have reached a settlement with the Receiver.

 

 

The remaining named defendants are: Jerry Napier (Owosso, Michigan; a “net winner” of more than $1,745,000); Durant Brockett (Las Vegas, Nevada; a “net winner” of more than $1,720,000); Darren Miller (Coeur d’Alene, Idaho; a “net winner” of more than $1,635,000); Rhonda Gates (Nashville, Tennessee; a “net winner” of more than $1,425,000); T. Le Mont Silver Sr. (Orlando, Florida / Dominican Republic; a “net winner” of more than $773,000; Mr. Silver also used Global Internet Formula, Inc., which is, upon information and belief, incorporated in Florida, as a shell company through which he was a ZeekRewards “net winner” of more than $943,000); Karen Silver (T. Le Mont Silver’s wife; a “net winner” of more than $600,000); Aaron and Shara Andrews (Lake Worth, Florida; the Andrews used Innovation Marketing LLC, a Florida shell company to win more than $1,000,000) and David and Mary Kettner (Peoria, Arizona; “net winners” of more than $930,000 using the shell companies named Desert Oasis International Marketing, LLC and Kettner & Associates, LLC as nominal payees). See Exhibit C (Expert Report of David S. Turner) (hereinafter “Turner Report”)at Ex. F.

Default judgments have already been ordered against:

    • Michael Van Leeuwen – $1,617,444.99
    • Todd Disner – $2,079,757.88
    • David Sorrells – 1,197,241.12
    • Trudy Gilmond – $2,129,522.27

 

Also listed are the “net Winner Class” which was already certified by the Court.

On September 14, 2015, the Court appointed Kevin Edmundson as class counsel and subsequently the Court authorized the defendant class to engage an expert witness,
Berkeley Research Group (“BRG”), at the primary expense of the Receivership. See
Doc. Nos. 117, 125.

Their own expert witness, BRG concluded the following:

In its initial report dated January 18, 2016, BRG agreed that it was able to “replicate the exhibits in the Turner Report, within a reasonable margin of difference.” Then, in its “Phase II” report, BRG reached two conclusions (bolded in the report):
a) [B]ased upon a preliminary analysis, it does not appear that the magnitude
of profit from the auction business would materially impact the assessment of
whether or not the business, taken as a whole, operated as a Ponzi scheme.
b) As a result of our testing in Phase II, we have not found evidence that
definitively disproves that the business as a whole operated as a Ponzi scheme.

Addressing the Burks and his not so successful endeavors, the receiver had this to say:

Beginning at least as far back as 2000, Paul Burks operated a number of generally
unsuccessful multi-level marketing businesses through Rex Venture Group, LLC (and
related entities) with names such as Go-Go Hub, Free Store Club, My Bid Shack, New
Net Mail and Signed and Numbered International. See, e.g., Bell Aff. at Ex. 2, 3;
Douglas Dep. at pp. 50, 54-55, 71, 78; Exhibit D (Excerpt of Durant Brockett Deposition)
(hereinafter “Brockett Dep.”) at pp.18-19, 30. In 2010, RVG launched Zeekler.com, a
so-called “penny auction” website where items ranging from personal electronics to cash
were auctioned to bidders. See id.

 

However, bids bought through ZeekRewards rather than as retail bids were more valuable because purchasing those bids gave the affiliates “points” that supposedly entitled Affiliates to a portion of the profits from the business. This was the real (and only) reason Affiliates would pay $1 for auction bids they could buy for $.65. See Brockett Dep. at 77-78. As one Affiliate told Burks, “I know how the system works mathematically and you know I know. Whether you call the bids bids or hamburgers makes no difference. People are not joining Zeek to get hamburgers, orauction bids; they are joining Zeek to make money….” Bell Aff. at Ex. 6.

Also mentioned are the Wright-Olivares and how they knew what they were doing:

From the beginning, RVG intended to use “bids” in ZeekRewards not as a product but as a proxy for money deposited into the program. Dawn Wright-Olivares was very clear about the plan, telling Danny Olivares on January 21, 2011: “We’re just going to use bids as currency.” Bell Aff. at Ex. 9(a). On another occasion, Dawn Wright-Olivares referred to the compounding bids as “Monopoly money.” Bell Aff. at Ex. 9(b). Quickly, RVG’s focus changed from Zeekler to ZeekRewards, which was the source of nearly all the company’s income. Relative to ZeekRewards, little or no money was made in the Zeekler “penny auction” business.

Burks and the other Insiders were aware that the payouts to Affiliates would be funded by new participants rather than retail profits from the penny auctions. Dawn Wright-Olivares excitedly told Burks early in the scheme, “I think we can blow this OUT together- we’ve already attracted a great many big fishes.” Bell Aff. at Ex. 4.

As you go farther down the Memorandum, it details the “Compensation Plan”, the “Compounder” and how the money magically multiplied. And it seems everyone at the top knew all along that it was not exactly above board and could not really explain the voodoo behind the ROI and how it was calculated:

Burks deliberately evaded affiliate questions asking how the RPP was calculated. In a Skype chat with an affiliate, he said: “[a] proprietary system is used to determine the amount of profit sharing that is done each day. We do not divulge the details of how those numbers are determined. Our stated target of minimum of 1% weekdays (Mon-Thur) and .5% weekends (Fri-Sun) has always been met and exceeded. It is clearly not directly tied to the number of auctions in a particular day. It is the overall average that counts.” Bell Aff. at Ex. 9(d).

Behind the scenes, the Insiders were not even subtle about the fake earnings numbers. Often, the company simply used the previous week’s daily RPP percentages. For example, on one occasion, Danny Olivares sent a text message to multiple insiders stating, “Need a % for rpp when you can.” Dawn Wright-Olivares responded, “Do whatever was last Monday.” Bell Aff. at Ex. 40. Or, from Paul Burks: “Hey Dan. Sorry about last night. What percent did you use?” Danny Olivares: “Same as last Friday. 0.009.” Bell Aff. at Ex. 23.

There are a ton more revelations in this filing, too many to detail here. You can click here to look at the 139 page filing, including all of the Exhibits.

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