In today’s Zeek Rewards filings, we have several Defendants/affiliates who have responded to the original Complaint and filed a Counterclaim against Kenneth Bell, the court-appointed Receiver.
The first of three (3) Counterclaims was filed by one Durant Brockett, in which he asserts the following five (5) Claims For Relief:
Breach of Contract
RVG and Brockett had an enforceable contract pursuant to which Brockett performed services for the benefit of RVG. In return, RVG was obligated to compensate Brockett as RVG had promised for the services Brockett performed.
The Receiver, acting as RVG, and by confiscating the funds in Brockett’s RVG NXpay account, has failed and refused to pay Brockett for the services that Brockett performed.
The conduct of the Receiver, acting as RVG, constitutes a breach of contract. Brockett has been damaged in an amount to be determined at trial for the Receiver’s/RVG’s breach of contract.
A valid contract existed between Brockett and NXpay relating to Brockett’s RVG NXpay account. That contract gave Brockett the exclusive right to withdraw funds from his RVG NXpay account.
On information and belief, the Receiver had knowledge of Brockett’s contractual relationship with NXpay.
The Receiver intentionally induced NXpay not to perform its contract with Brockett and, in violation of the contractual agreement between NXpay and Brockett, either (i) to deliver the funds in Brockett’s RVG NXpay account to the Receiver or (ii) not to pay the funds to Brockett as NXpay’s contract with Brockett obligated it to do.
The Receiver’s conduct described above was willful and undertaken on behalf of RVG. Brockett is entitled to punitive damages against the Receiver and RVG in accordance with N.C. GEN. STAT. § 1D-1, et seq.
Money Had and Received
The Receiver is in receipt of funds which do not in equity and good conscience belong to him.
Brockett is the rightful owner of the funds the Receiver received from Brockett’s RVG NXpay account.
Brockett is entitled to an order compelling the Receiver to turn over to Brockett all funds the Receiver received from Brockett’s RVG NXpay account.
Civil Action Pursuant to 42 USC Section 1983 for Deprivation of Constitutional Rights, or, Alternatively Common-Law Claim for Violation of Fourth Amendment Rights
The Receiver was acting under the color of law when he caused NXPay to refuse to honor the terms of its contract with Brockett and when he caused NXPay to turn over to the Receiver Brockett’s funds in his RVG NXpay account.
As a result of the Receiver’s conduct, Brockett has been wholly deprived of the value, use and benefit of the funds in his RVG NXpay account.
Pursuant to 42 U.S.C. § 1983 and the Fourth Amendment of the United States Constitution, the Receiver is liable to Brockett for redress for Brockett’s damages resulting from the loss of use of his funds.
Unfair Trade Practices
RVG’s and the Receiver’s conduct described above and in the Complaint constitutes unfair methods of competition, unfair trade practices, and deceptive trade practices in violation of the North Carolina Unfair and Deceptive Trade Practices Act, N.C. GEN. STAT. § 75-1.1, et seq.
The conduct was illegal, offends public policy and is immoral, unethical, oppressive, unscrupulous, and deceptive.
As a result of the conduct, Brockett has suffered damages.
The use by RVG and the Receiver of unfair methods of competition and unfair and deceptive trade practices entitles Brockett to recover (a) three times his actual damages and (b) attorneys’ fees and costs pursuant to N.C. GEN. STAT. § 75-16.1.
The almost identical Counterclaims have been brought by Innovation Marketing LLC, Shara Andrews, Aaron Andrews and Rhonda Gates. Mr. Brockett is using noted legal mouthpiece Rodney Alexander.
As some of you will recall, Rodney Alexander was previously retained by Robert Craddock, of “Fun Club USA” and “Zteambiz” infamy, in a half-hearted and highly questionable attempt to intervene in the RVG case (it didn’t work out as he planned, of course). Craddock accepted donations of which no one is sure how or where they were used, similar to the “ASD Justice” group of Todd Disner and Dwight Schweitzer who gathered money for a legal bid to intervene in the ASD/AdSurfDaily federal civil case, which also amounted to absolutely nothing.
Mr. Alexander also filed a “Motion to Dismiss for Failure to State a Claim / MOTION to Dismiss for Lack of Jurisdiction” for Defendants Aaron Andrews, Shara Andrews, Durant Brockett, Rhonda Gates, Trudy Gilmond, Innovation Marketing LLC, Darren Miller, Jerry Napier, and Trudy Gilmond, LLC.
The other two “Answers to Complaint/Counterclaims” were filed by attorney James Edmundson on behalf of Defendants Innovation Marketing LLC, Shara Andrews, Aaron Andrews and Rhonda Gates.
I will keep an eye on these filings; it will be interesting to see how the Judge deals with them. Mr. Bell filed in every Federal District in the land so that he DID have jurisdiction to pursue clawbacks; how the Defendants now believe Bell does not have jurisdiction to sue them is likely just a matter of legal posturing and trying to get out of a bad situation.
Zeek Rewards Ponzi, closed by SEC last year, is the largest Ponzi scheme in the US, involving up to 2 million victims (due to some people having multiple accounts, the actual number is closer to 1 million) for 700 million dollars. How did it get so big? Don’t people care about the warning signs? Are they all so blind? These aren’t the smartest people in the world (we are talking the average Joes, not the elites like those Madoff soaked) but surely there are SOME smart people in that million victims?
It is a combination of factors, and it had everything to do with psychology, by taking advantage of your cognitive biases.
Your brain, due to millions of years of evolution, tends to form thoughts in certain ways, and a successful scammer can take advantage of that.
Think about magic. A lot of magic relies on misdirection. The magician tosses the ball up and down, up and down, followed it with his eyes. Then he tossed the ball up… and it vanished.
No it didn’t. He didn’t actually throw the ball up, but his eyes went up as if he did. And you, expecting him to do the same thing again, didn’t actually look at his hand with the ball.
In other words, you were “trained” by the magician to follow his eyes, not the ball itself, so you were amazed at the ball vanishing into the air… when it never left his hand.
Zeek did the exact same thing… It showed the victims enough of a legitimate business that the victims never bothered to follow the IMPORANT item… the money.
In previous conversations with Nash Dunn, he had told me they were doing a piece on the one year anniversary of the closure of Zeek Rewards; he did not disappoint. Below is the first page of the article, followed by a link to the rest of the 6 pages. Enjoy!
Zeek one year later
Receiver projects ‘substantial’ returns
Charlotte attorney Ken Bell discusses the collection of Zeek Rewards money during an interview in his office recently.
Last Modified: Friday, August 16, 2013 at 4:26 p.m.
As cars whiz by on West Center Street in Lexington, nearly every driver takes a glimpse of the small brick building with large windows.
The old blue-and-white sign that once pictured a large “Z” has long been gone, as are the winding lines of anxious investors who used to frequent this place, but passersby still know what the building represents.
It’s been one year since the federal government shut down Zeek Rewards, the penny-auction based company that attracted nearly 2.2 million users in 100 different countries from the one-story structure that connects to a Laundromat. In less than two years — 19 months — the company’s rapid rise and promising payouts gave hope to millions of people who looked to earn a quick buck — “affiliates” who would only later be immersed in what some claim to be the densest Ponzi scheme of all time.
“Lexington has always been known for barbecue. Whoever thought so many people would be coming to Lexington for a penny auction company?” said Randy Jarvis, a former Lexington resident and Zeek Rewards user who met hundreds of affiliates while working at the Holiday Inn Express next to Childress Vineyards.
Jarvis, 48, who now lives in Pennsylvania, said upper-level affiliates would nearly book the entire hotel, some staying for weeks to attend “Red Carpet Events” run by the program’s former chief officer, Davidson County resident Paul Burks.
He said affiliates from Australia showed him how they were making $200,000 a day through the program while another couple from Vermont, who eventually talked him into signing up, showed him actual checks to validate the thousands they were making.
I received an email today that originated from the user name “Zeek Diamond Updates”, one of the several cheerleaders of Zeek and who was against the “evil gub’ment”.
The title of this email is “After 1 year and really looking back I conclude “ZEEK WAS A SCAM” & The Zeek Management Team should all go to PRISON ! ! !”
Here is the body of the email:
This is coming from a MILLION DOLLAR LOSER
Why do I say this?
#1 When the government agents asked ZEEK to see their customers they really had NONE. None that would warrant 40 million bids monthly being purchased. I purchased over 1 million bids 3 weeks prior to them shutting down and every customer they assigned my bids to was a 100% FAKE.
#2 ZEEK discouraged any of us agents to use our own bids. They said if we did we would get only 50% point credits. But give them to a made up ID Number with a phoney name attached to it and you get 100% point credits.
#3 In hindsight their penny auction was a joke with stupid items like $50 and $100 bid certificates. Along with crap that you would find at a garage sale. I guess all that money made so many leaders including me BLIND TO THEIR SCAM.
#4 Not the employees like customer service but the real management team you know who I am talking about they should be in PRISON. They designed this con and managed it. Some of us may of uncovered it but the FALSE REPORTING FROM THE SELF APPOINTED CRITIC “Troy Dooly” gave all of us a lot of hope. With their bullshit interviews and fireside chats. Troy knows better why did he not say let me see the customer database. He knows and knew what to look for. Personally I think someone got paid real good to put out a positive light on ZEEK. I have no proof but if it Walks, Talks and Looks like a DUCK it is probably a DUCK.
It was actually Troy Dooly’s positive interviews with the company that made me trust them enough to put more than a million dollars into it just 3 or 4 weeks befor they had their doors shut.
Well I licked my wounds long and hard enough and really needed to get on with my life again. I said no to 30 plus JUST LIKE ZEEK deals in the last 12 months and I am glad I did since out of the 30 about 35 went out of business.
This is actually my 2 year anniversary from saying yes to ZEEK back in August of 2011. It is right about here that I am suppose to pitch you on a new deal that I am into but it would destroy all that I have written here with a sincere heart. So I will not put my link in this e-mail.
I will say one thing however. Nine months ago I almost said yes to something but I got side tracked and did not do it. Since then they built a Billion Dollar System and if you really need to save face with so many who you got into ZEEK like I did.
My children for over $50,000
My mother-in-law for over $30,000
My dad for over 25,000
My ex-wife for over $10,000
My UPS Store owners for $10,000
Along with over 100 more that I personally sponsored and they all lost money.
I had one friend he put all that his mom left him in the deal like $150,000
IT JUST SUCKS… Like I said ZEEK management should go to PRISON…
And if you are getting this e-mail and you are a leader and say BOO HOO it was the stupid government who shut them down.
You really need to take your head out of the sand and that is a very polite place from where I really think you got you head…
I will say if you do want to know what I am doing right now to save face with all that I have hurt via ZEEK REWARDS just hit reply and if I have the time I will communicate with you.
Kenneth Bell has filed the First Quarter report for the receivership and included in the report financials is an entry stating that the Settlement Account contains $36,000 so far. Not a lot, considering the vast sums of money some Zeek Affiliates siphoned out of the scam while it was running. I didn’t find any earth-shattering stuff in the report but I’m still awaiting issuance of yet more Subpoenas.
In the Report, Bell lists the actions being taken by the Receivership which include:
Investigating the Receivership Defendant’s Financial Information – this includes a forensic audit to validate Zeek database records, analyzing payments and transfers to and from “key insiders”, and locating assets not already seized by the US Secret Service
Marshaling and Preserving Receivership Assets – Receivership is maintaining 4 Interest Bearing accounts on behalf of the Estate; the Receiver Team is finalizing the analysis of Cashiers Checks improperly returned; Investigating recoverable third-party payment processors assets including NXPay, Payza and STP, all believed to hold additional receivership assets; additional recovery of $291,000 from an American Express Merchant account; Receiver is still seeking a foreign account that holds ~$12 million
Analyzing the Operations of Receivership Entity –
Investigating and Validating The Receivership Defendant’s Electronic and Financial Data – reconstruct and analyze financial records, approximately 1.6 Billion records across 406 tables; identifying and validating transactions; reconstruction of the financial accounts from Jan 1, 2011 to August 17, 2012 is substantially complete;
Investigate the Receivership Defendant’s Operations – Continuing the investigation into the operations of Zeek Rewards, and have identified numerous entities and individuals believed to have information about assets and operation of RVG; continue to negotiate necessary production of documents and pursue compulsory means as needed
Privilege Review Team – continuing to analyze RVG documents and data; Paul Burks has asserted attorney-client privilege and work product protection over communications ans electronic documents; The Receiver has waived RVG’s attorney-client privilege and work product protection for pre-receivership records and intends to waive such privileges as to corporate communications; once the privilege dispute is resolved, document review will proceed.
Communicating with Affiliates and Creditors – establish a website through which Affiliates-Investors and other claimants may access information
Issues Concerning federal Taxes and Tax Filings – Receiver Team determined it would be necessary to file and issue 1099’s to certain Affiliates-Investors; amounts used in these 1099’s were calculated from information contained in RVG databases and from financial institutions; hundreds of 1099 recipients have responded to Receiver regarding amounts on the 1099 forms; FTI is reviewing these responses; FTI identified failed electronic transactions and will issue corrected 1099 forms by April 30, 2013
Issues Concerning Employees – worked with payroll company to issue W-2 forms; during this process, Receiver Team gained access evidence that caused them to believe some individuals classified as “independent contractors” were misclassified pursuant to IRS regulations; the receiver Team reclassified these individuals as “employees”, issued W-2 forms and paid past payroll taxes; Receiver Team is also responding to former employees regarding unpaid wages
Litigation in the SEC Enforcement Action – Receiver opposed efforts of some net winners to appoint an “Examiner”, said motion was denied on February 7, 2013; Receiver has also responded in opposition to Motion to Intervene and Motion to release Third Party Funds; also, Receiver has been engaged in a number of discovery disputes with various Net-Winner Affiliates/Investors, which sill increase costs and cause delays
Work to Establish Claims Process – Claims Process motion filed March 29, 2013; Online claims process determined to be most accurate and cost efficient
I have uploaded the documents onto the Files website.
Just when you thought that the “Deluded Duo” had finally realized the utter futility in their Quixotic cause, here they go again. A recently filed “APPELLANTS’ PETITION FOR PANEL REHEARING AND EN BANC DETERMINATION” is requesting a hearing before Appellate Judges Garland, Henderson and Tatel, who summarily affirmed Judge Rosemary Collyer’s (my all time favorite District Judge) decision on their ludicrous and laughable legal lamentations attempting to get the entire ASD Civil Forfeiture case overturned. Right……..
I suppose someone should give them credit for their tenacity, but I am not anyone who would do that. It is just another reminder of the skewed “logic” and belief in internet nonsense as seen in Kenneth Wayne Leaming’s filings; Leaming had been in communications with Todd and Dwight to gift them with his vast legal knowledge; after all, Leaming is a self-professed “Private Attorney General”. However, it should be noted that Leaming is in Federal Custody following his Pro Se representation of himself and subsequent conviction on 7 Felony counts. His sentencing hearing is scheduled in May. So much for his brilliant legal mind, eh?
As part of the reasoning behind this Petition, they reference a Youtube video that supposedly details the rapid changes in technology:
“It is axiomatic that we live in exponential times where technology is growing faster than our ability to integrate it into the systems meant to manage it, and take it into account 1
1 http://www.youtube.com/watch?v=pMcfrLYDm2U at minute 5:00 through minute 5:05
They go on to mention the archaic tactics used in the Civil War and how they were repeated for 5 years, then add this:
A famous Law Professor once observed that the ‘Law’ is the grease on the gears of civilization and went on to say that a lawyer’s job is to teach. As was pointed out in the decision, the use of summary affirmance should be restricted to those cases where the merits are so clear that expedited action is in fact, justified. Taxpayers Watchdog, Inc. v. Stanley, 819 F.2d 294,297 (D.C. Cir. 1987) (per curiam). The merits of the Appellees motion for summary affirmance however, are far from clear, and for the same reasons that kept General Picket from objecting to the sending of his troops to the slaughter. The decision to grant summary affirmance is not justified by the reasoning employed to grant it.
There are 9 pages of this nonsense in the Petition, none of it seems to make sense to anyone but Dwight Schweitzer. I have uploaded this document onto the Files website.
I have received many requests for an update on our efforts to maximize the recovery of Rex Venture assets and establish a plan to refund as much money as possible to the victims of Rex Venture and ZeekRewards. The complete, detailed reports of our activities can be found in two recent court filings, the “Quarterly Status Report – Q4, 2012,” and the “Final Liquidation Plan,” both of which are available for review on this website under the heading “Case Documents.” However, for the many of you that would prefer to read a shorter summary, I have tried to provide that below.
We have spent a great deal of time designing what we hope will be an efficient and accurate claims process. I understand this is imperative to providing the victims and creditors of the Receivership Defendant with the greatest possible recovery on their claims. With more than two million usernames registered on ZeekRewards.com, this has been a significant undertaking. We have been working diligently on this issue, and are in the process of finalizing the plan. We attached screen shots of a draft claim form to the Final Liquidation Plan.
While I had hoped to be able to do so earlier, I will file a motion with the Court seeking approval of our proposed claims process no later than March 31, 2013. We will notify affiliates that the claims process has begun within fourteen days of the Court’s approval. If approved by the Court, the notices will be sent electronically, using email addresses provided by the affiliates and other creditors to the Receivership Defendant. We will also post the notice on this website. The notice will detail the procedure for submitting claims. Generally, subject to Court approval, the process will be as follows:
With few exceptions, the claims process will be carried out electronically. Affiliates and other creditors will be provided with a website address where they will be able to fill out and submit a claim form.
The Receiver team will review each submitted claim and compare it to our records for the purpose of determining whether the team agrees with the claim and then will notify the claimant of its initial determination.
The claimant will have 30 days to respond to our determination. If no objection is received by the team, we will accept the amount determined by the team to be a valid claim. If the claimant timely objects to our determination, we will work with the claimant to resolve the claimant’s objection. If we are not able to resolve the claimant’s objection, we will use a court-approved process for resolution.
This does not mean that all of an approved claim will be paid. Even with more than $300 million recovered already, and hopefully with more to come, we likely will be able to pay only a percentage (but we hope a significant percentage) of approved claim amounts.
The claims submission period will most likely end 120 days after the Court’s order approving the process. After that date, no further claims will be accepted.
We will evaluate and reconcile claims submitted throughout the submission period. If it is practical and cost effective, I will ask the Court for permission to make a partial, interim distribution on approved claims after the close of the claims submission and review process. The final distribution will be made after we have recovered, in a cost effective way, all assets possible.
I have received many emails asking why some affiliates are already receiving “refund checks.” I assure you that I have not issued checks to any affiliates, and will not be doing so until the claims process has been completed. The “refund checks” you are hearing about are the result of our efforts in December and January to assist affiliates and their financial institutions in refunding affiliates whose cashier’s checks, made payable to Rex Venture but never received or deposited, are being credited to affiliates.
Potential Litigation Claims
Although we have already recovered more than $300 million for return to victims and other creditors, we want to recover everything we can while staying cost effective in our efforts. In the next few months we will sue “net winners” (those who withdrew more than they invested in ZeekRewards) in what you have heard called “claw back” litigation. We are in active
negotiations with many “net winners” for the return of their winnings, which is really just other peoples’ money. Before bringing this suit we will continue to negotiate with “net winners” to settle the claims against them, and I encourage any net winner interested in agreeing to a settlement prior to litigation to contact my team at email@example.com. I estimate that nearly $300 million was fraudulently transferred to “net-winners.” It is simply too early to estimate the potential amount that will ultimately be recovered in these “claw back” claims.
We are also considering claims against insiders including employees, contractors, other Receivership Defendant agents, and third-party advisors who played an active role in furthering the fraudulent scheme or facilitated the Receivership Defendant’s activities for their own gain.
Additionally, we are working with appraisers to determine the value of the Receivership Defendant’s personal and real property. Ultimately, I intend to sell those assets to collect more money to return to victims through the claims process.
Unfortunately, we have also spent a great deal of time, and money, fending off what we believe to be unnecessary and meritless motions brought before the Court by large “net winners.” We have also had to expend time and money to require various “net winners” to respond to legitimate subpoenas asking for financial and other information showing their role in, and liability to the victims of, this scheme. We have no choice but to respond to these attacks and delaying tactics, but we will continue to try to do so in the most appropriate and efficient ways.
I greatly appreciate your continuing support and patience. I know that for many of you this has been a trying and stressful ordeal. Please know that we are being vigilant in our court-appointed duties to reduce your losses as much as possible, while acting as quickly and cost effectively as possible.
As most of you know, I have little sympathy for the ASD Justice group, yet another group that took in donations so they could affect some legal outcome that no one but they could provide. Over the years I have been watching scams, there are always people who will promise the moon and accomplish absolutely nothing. There were only two people on the planet that held any hope of the D. C. Federal Court of Appeals ruling against Judge Rosemary Collyer’s dismissal of their ridiculous civil case, none other than prominent ASD, Zeek and other schemes Todd Disner and suspended attorney Dwight Owen Schweitzer.
The legal theory proposed in the lawsuit did not work in the original ASD civil forfeiture case, but they thought they could get donations from the ASD followers and file another case in which they question the original affidavit that secured the seizure warrant. (See Einstein’s definition of Insanity) I hope that this information makes its way to Fun Club’s attorney Rodney Alexander, who has had calls with Schweitzer and discussed legal strategies. In my opinion, it demonstrates that both Todd Disner and Rodney Alexander should find another source for legal theories.
O R D E R
Upon consideration of the motion for summary affirmance, the opposition thereto, and the reply, it is ORDERED that the motion be granted. The merits of the parties’ positions are so clear as to warrant summary action. See Taxpayers Watchdog, Inc. v. Stanley, 819 F.2d 294, 297 (D.C. Cir. 1987) (per curiam).
The dismissal of appellants’ Fourth Amendment claim is affirmed on the ground that appellants lacked a reasonable expectation of privacy in the records allegedly seized. See Minnesota v. Carter, 525 U.S. 83, 88 (1998) (“[I]n determining whether a [party] is able to show the violation of his (and not someone else’s) Fourth Amendment rights, the ‘definition of those rights is more properly placed within the purview of substantive Fourth Amendment law than within that of standing.’” (quoting Rakas v. Illinois, 439 U.S. 128, 140 (1978))). “[A] person has no legitimate expectation of privacy in information he voluntarily turns over to third parties,” Smith v. Maryland, 442 U.S. 735, 744-45 (1979), “even if the information is revealed on the assumption that it will be used only for a limited purpose and the confidence placed in the third party will not be betrayed,” United States v. Miller, 425 U.S. 435, 443 (1976). Appellants therefore had no reasonable expectation of privacy in records allegedly stored on a third party’s computer server.
Moreover, appellants have shown no abuse of discretion in the denial of their motion to recuse the district court judge. Appellants’ purported evidence of bias amounts to nothing more than their disagreement with the judge’s actions in presiding over a related matter, and “judicial rulings . . . virtually never provide a basis for recusal.” SEC v. Loving Spirit Found. Inc., 392 F.3d 486, 494 (D.C. Cir. 2004).
Pursuant to D.C. Circuit Rule 36, this disposition will not be published. The Clerk is directed to withhold issuance of the mandate herein until seven days after resolution of any timely petition for rehearing or petition for rehearing en banc. See Fed. R. App. P. 41(b); D.C. Cir. Rule 41.
Below, we have the latest update from Craddock, as sent to me by one of my readers. This reader also sent me a screenshot of the information screen that Craddock is talking about and it shows us that in addition to Zeek information, Craddock wants to know if people have been contacted by Law Enforcement and which agency contacted them. He also wants Zeek members with multiple accounts to create a Zteambiz log-in for each of their Zeek usernames. Wasn’t it against the rule in Zeek to have multiple accounts??
News update, if you had multiple accounts with Zeek Rewards you need to list each account as a separate registration, this will have multiple benefits for you in the coming weeks, be sure to list the username, the sponsor username and the sponsors, sponsor username also for each account.
As you go to register each account you do need to use a different email address as that is the way you login to and create a new account under Zteambiz.net
If you are confused why get with your leaders and they will explain the reason and how this will affect you in a positive way.
I have asked others who are watching this case what they believe the “update” actually means. One said they thought that Craddock is gathering names for a new “opportunity”. Another thought that Craddock was trying to get a list of anyone who has spoken to Law Enforcement and could testify should this case ever see a courtroom in either a Civil or criminal matter. Another thought this was all another attempt to gather information and massage it to look like the receiver is “evil”, something they point to in many of their filings.
In the screenshot below, we see the 3 questions the are at the end of the information gathering; whether or not someone has spoken to Law Enforcement is immaterial, other than someone trying to quantify their own exposure might have an interest in. If this case has anything in common with ASD (and it does) the SEC is the least of their worries.
I wonder why he needs to know if an individual has retained their own lawyer. After all, none of the FCU lawyers realistically represents all Zeek members; their client is Fun Club USA and its members.
That last question sums up the agenda advanced by FCU and Craddock, in general. The government has financially harmed people, a position similarly put forth in ASD. “There were no victims until the SEC made them” is an echo of a phrase ASD also used; however, other data indicates that statement is false.
The victims in both of these scams were made by the leaders/sponsors/uplines of each program. They are the ones who profited most, fueled by money from recruiting others into the scheme, thus filling their own pockets.. And the “net winners” are the ones with the most to lose. But if Craddock only made a $200 profit, why is he so vocal? It makes no sense, none at all!
The USA has responded to Disner and Schweitzer’s latest opposition in their appeals case. They apparently still feel that somehow their “rights were violated” but seem unable to make much of a legal case to back up that position. Judge Rosemary Collyer (my favorite District Judge) saw the original filing for what it was, an attempt to somehow negate the entire ASD civil forfeiture case all in one swoop, by getting the initiating affidavit thrown out. So far, this has not proven to be successful and I doubt it ever will.
It is no secret that I have been certain of the failings of this venture since its inception, it boggles the mind that it was ever thought up, let alone actually filed. The legal theory put forth is one that could be best described far fetched/deluded, and I have not been afraid to advance that opinion. However, Schweitzer now have larger fish to fry, namely his and Disner’s involvement in Zeek Rewards as Diamond Affiliates. They have a much larger exposure with Zeek than they ever did in ASD. Let us also remember that Schweitzer is also supposedly in contact with Rodney Alexander and discussing “legal” stuff, as detailed in one of Craddock calls.
The USA has stated this jewel in their filing:
Notwithstanding the voluntary disclosure of their information to ASD, Appellants attempt, without any legal basis, to assert a Fourth Amendment challenge to the validity of the Government’s search and seizure of ASD property in connection with civil forfeiture actions. On appeal as below, Appellants have failed to meet their burden of demonstrating that their Fourth Amendment rights, rather than those of a non-party, had been violated. Moreover, Appellants’ continued attacks on the District Court’s rulings fall far short of establishing any valid basis for a recusal motion. Consequently, the District Court correctly granted the Government’s motion to dismiss for want of standing and properly denied Appellants’ motion for recusal, and its decision should be summarily affirmed.
They continue with the following points in support of their position:
Appellants Lack Standing to Challenge the Search and Seizure of ASD Property
Appellants’ Dissatisfaction With the District Court’s Rulings Fails to Present Any Valid Basis for Recusal
In the last topic mentioned, the USA said, “Offering nothing more than intemperate attacks on the District Court Judge, Appellants failed to raise any specific facts suggesting bias on the part of the District Judge.”