As expected, Judge Mullen has approved the Class Counsel as requested by the Receiver. The actual Order is rather lengthy, so here is a link to it – 125
Tag Archives: SEC
The deadline to file a claim is November 9, 2015.
For more information on this matter, please contact the Claims Administrator at:
|Write:||Krista L. Freitag, Receiver
c/o SEC v WCM777 Claims Administrator
PO Box 3775
Portland, OR 97208-3775
Please ensure that you include your name and your return address on all correspondence.
Kenneth Bell has filed a “Proposed” Consent Order Appointing Class Counsel, which refers back to the February 10th Order granting the motion to Certify a Defendant Class. In certifying the Defendant Class, the Court noted that “Defendants and their counsel can and will adequately represent the class”, but also noted that “the Receiver will be required to help fund the defense of the Class”. “Since the entry of the Order a number of the named defendant’s counsel have withdrawn their representation and the Court has entered Judgment against certain named defendants.”
The Court is now advised by the Receiver and Kevin Edmundson, counsel for Aaron and Shara Andrews,Innovation Marketing, LLC and Rhonda Gates that they have reached agreement on proposed terms for the partial funding of the Class Counsel by the Receiver. Accordingly, with the consent of the Receiver, Kevon Edmundson and the parties he represents and, after providing the opportunity for objections to the terms as described below, the Court ORDERS as follows:
- Kevin Edmundson it hereby appointed Class Counsel for the Net Winner Class, which includes all persons or entities which received at least $1000 from Zeek Rewards.
- The class issues before the Court relate to the alleged liability to the Net Winners to return money won in the alleged Zeek Rewards Ponzi and or pyramid scheme.
- Mr. Edmundson shall serve as Class Counsel until further order of the Court.
- Class Counsel is authorized to communicate with the Net Winner Class as he deems reasonable and necessary through such means that he believes to the most efficient and cost-effective.
- Class Counsel is authorized and instructed to explain to the Winner Class that in the event that liability on one or more of the Receiver’s claims is established, the Receiver intends to seek a process to determine the net winnings of each Net Winner Class member will notify the net winner of the amount of his or her net winnings according to the RVG records.
- The Court has previously ordered the engagement of BRG Group as an expert for the Net Winner Class to complete “Phase 1” of their work as set forth in the proposal.
- Class Counsel believes that to adequately represent the Net Winner Class, he should be permitted to depose the Receiver’s financial expert, at the receiver’s expense, and defend any deposition of the expert for the class. receiver has agreed to pay $35,000 of such reasonable fees, subject to the approval of the Court.
- The Court finds that these efforts, if pursued in good faith, will adequately represent the Net Winner Class and approves the receiver’s limited agreement to pay for such efforts subject to Court approval.
- In the event that the Receiver files a separate dispositive motion against any named defendant other than Aaron and Shara Andrews, Innovation Marketing, LLC and Rhonda Gates then those defendants are responsible for paying for their own response, should they choose to file one.
- Class Counsel is hereby appointed to serve without bond and shall have full power and authority to act int he best interests of the Net Winner Class.
- This Court shall retain jurisdiction over any action filed against Class Counsel based upon acts or omissions committed in his representative capacity.
- Should the Class Counsel decide to resign, he shall first give written notice of his intention and the resignation shall not be effective until the Court appoints a successor.
- The Receiver has expressed a willingness o consider voluntary settlements on claims against the Net Winner Class, and notwithstanding the appointment of the Class Counsel, members of the Class and the Receiver are still permitted to discuss potential settlement of claims against them.
- The Receiver and Class Counsel are instructed to provide a copy of this order on their respective websites.
This is still a Proposed Order. Once the Judge signs it, we will post it.
Around the end of August, Zeek alleged winner, Darryle Douglas, was the subject of a :”MOTION for Order Requiring Return of Receivership Property, Deposition, and Production of Financial Records “, because of a new scam he is involved with and that he plans on using the Zeek database to recruit and fill his pockets once again. Douglas has already received a default judgment against him in the amount of $2,271,239.20.
Motions to Show Cause have been filed against:
- NXPay (NXSystems) who were later ordered to pay the amount of $9,069,446.52 to the Receiver
- BBVA Compass Bank, which was later withdrawn following an undisclosed agreement
- Peoples Bank of Alabama – Cashiers Checks around $30,000
- Chino Commercial Bank – later withdrawn after undisclosed agreement
- BankFinancial FSB – Cashiers Checks around $3,500
- Valley National Bank – Cashiers Checks around $29,000
- Northwest Georgia Bank – Cashiers Checks around $11,500
- M&T Bank – Cashiers Check around $41,900
- Newton Federal Bank – Cashiers checks around $7,000
- Bank of Alapaha – Cashiers Checks around $6,000
Ah, the story writes itself. I suppose serial promoters just cannot help themselves from promoting illegal and probably immoral schemes for the sole benefit of their own financial gains. Most swear words do not properly describe these individuals. Perhaps we need to make new ones?
Kenneth Bell has filed the below as a “MOTION FOR ORDER REQUIRING RETURN OF RECEIVERSHIP PROPERTY, DEPOSITION, AND PRODUCTION OF FINANCIAL RECORDS”
1. Darryle Douglas was a key member of Zeek’s senior level management involved with affiliate communications and relations. Prior to Zeek, Douglas worked closely with Paul Burks in other multi-level marketing businesses. Mr. Douglas received more than $1,975,000.00 from the scheme, and the Receiver has obtained a default judgment against him in the amount of $2,271,239.20.
2. It has come to the attention of the Receiver that Mr. Douglas has begun promoting a new investment scheme known as “Auction Attics” and intends to use a copy the ZeekRewards affiliate database to solicit investors into this new scheme. The Facebook page promoting Auction Attics requests that all funds be sent to Darryle Douglas via wire to an account in the name of Domonique Douglas, presumably Mr. Douglas’s wife. See Exhibit A. (ZeekDoc392-1)
3. In addition, the Facebook page contains a long statement from Mr. Douglas which reports he will use his “business database” which contains “over 2 million plus contacts,” of which “[o]ver 90% . . . have already bought bids before!” See id.
4. Considering the large debt he owes to the Receivership Estate, and in light of his current activity in promoting a new scheme in an attempt to collect funds from the same victims he previously deceived, the Receiver requests an order requiring Mr. Douglas to submit to a deposition in the Western District of North Carolina and produce to the Receiver all financial records from November 1, 2011 to the present for his personal and business-related accounts.
5. The Receiver’s concurrently filed Memorandum in support of this Motion sets
forth more fully the justification for the requested order.
You can read the Memorandum in Support here> ZeekDoc393
ANNOUNCEMENT FROM THE RECEIVER – August 5, 2015
On July 31, 2015 we mailed 112,374 distribution checks to eligible claimants in the total amount of $89,200,834.29. Including that distribution, we have made distributions totaling $246,048,079.29.
Distribution checks have not been mailed to 9,394 claimants because the amount of each distribution check would have been less than $100. Due to cost efficiencies, the Court orders provide that distribution checks below $100 will not be mailed until the end of the receivership and payment of final distributions. We have created a reserve to insure those claimants will be paid at the same rising tide distribution percentage as all other claimants. If a claimant’s distribution amount reaches an amount in excess of $100.00 before the final distribution, the claimant will be paid.
Unfortunately, approximately 35,400 claimants were not mailed a distribution check on July 31 because they still have not electronically signed the release and OFAC certification required by Court orders. Had these claimants done so we would have mailed an additional $46,237,165.62 in distributions. We have posted an instructional video on this site showing how these forms can be electronically signed. You may review that video by following this link: http://www.zeekrewardsreceivership.com/OFACandRelease. Those who do so before October 20, 2015 will be mailed their interim partial distribution representing 60% of their allowed claim (calculated using the rising tide method) on October 31, 2015.
Efforts to recover additional funds for the benefit of claimants continue. I fully expect that we will recover tens of millions of additional dollars that we can then distribute to claimants. It is not possible to project with any certainty, but I believe that total recovery by eligible claimants will exceed 70% by the closing of the receivership case.
I greatly appreciate your continued support and patience as we work on your behalf.
Litigation Release No. 23310 / July 23, 2015
Securities and Exchange Commission v. DFRF Enterprises LLC, et al., Civil Action No. 1:15 cv 12857-PBS (United States District Court for the District of Massachusetts)
United States v. Daniel Fernandes Rojo Filho, Criminal Action No. 1:15-mj-07163-JCB (United States District Court for the District of Massachusetts)
Authorities Arrest Fugitive Operator of Pyramid/Ponzi Scheme Based in Massachusetts and Florida
The Securities and Exchange Commission announced today that, on July 21, 2015, federal authorities arrested Daniel Fernandes Rojo Filho of Orlando, Florida, after he was criminally charged with defrauding investors. The U.S. Attorney for the District of Massachusetts charged Filho on June 30, 2015, with wire fraud in connection with an investment fraud he operated under the name DFRF Enterprises. Filho was arrested in Florida after evading arrest for more than two weeks.
The criminal charges against Filho relate to the same conduct charged in a civil enforcement action filed by the SEC on June 30, 2015, against Filho, DFRF Enterprises, and others. Those charges were filed under seal, in connection with the Commission’s request for an immediate asset freeze. That asset freeze, which the federal court in Boston, Massachusetts, ordered on June 30, secured approximately two million dollars of funds and prevented the potential further dissipation of investor assets. After the SEC staff implemented the asset freeze, at the SEC’s request the Court lifted the seal on July 2, 2015. On July 13, 2015, the Court extended the asset freeze as to all defendants [Filho; two DFRF Enterprises companies based in Massachusetts and Florida; Wanderley M. Dalman of Revere, Massachusetts; Gaspar C. Jesus of Malden, Massachusetts; Eduardo N. Da Silva of Orlando, Florida; Heriberto C. Perez Valdes of Miami, Florida; Jeffrey A. Feldman of Boca Raton, Florida; and Romildo Da Cunha of Brazil]. A hearing on the SEC’s motion for preliminary injunction is scheduled for July 28, 2015 in the federal court in Boston.
The SEC alleges that DFRF Enterprises, named for its founder Daniel Fernandes Rojo Filho, claimed to operate more than 50 gold mines in Brazil and Africa, but the company’s revenues came solely from selling membership interests to investors and not from mining gold. According to the SEC’s complaint, with the help of several promoters, DFRF lured investors with such false promises as their money would be fully insured, DFRF has a line of credit with a Swiss private bank, and one-quarter of DFRF’s profits are used for charitable work in Africa. The SEC alleges that the scheme raised more than $15 million from at least 1,400 investors by recruiting new members in pyramid scheme fashion to keep the fraud afloat, and commissions were paid to earlier investors in Ponzi-like fashion for their recruitment efforts. The SEC further alleges that Filho has withdrawn more than $6 million of investor funds to buy a fleet of luxury cars, among other personal expenses.
The SEC alleges that Filho and others began selling “memberships” in DFRF during 2014 through meetings with prospective investors primarily in Massachusetts hotel conference rooms, private homes, and businesses. According to the SEC’s complaint, DFRF promoted the investment opportunity through online videos in which Filho falsely claimed that the company had registered with the SEC and its stock would be publicly traded. As DFRF’s marketing reach widened, membership sales dramatically increased from under $100,000 in June 2014 to more than $4 million in March 2015 alone.
For further information, see Litigation Release No. 23296 (July 2, 2015).
This comes from the SEC Complaint regarding DFRF Enterprises, indicating Sann Rodrigues is neck deep in very many schemes: (emphasis added)
81. In addition, Filho has caused DFRF to pay more than $310,000 for the benefit of Sanderley Rodrigues de Vasconcelos (“Rodrigues”). Rodrigues is the subject of a 2007 consent judgment in a Commission enforcement action concerning the “Universo Foneclub” pyramid scheme, and he is a defendant in the Commission’s pending enforcement action concerning the “TelexFree” pyramid scheme. On March 21, 2015, Filho caused DFRF to pay $50,000 to a business belonging to Rodrigues. (The payment was made less than one month after Filho publicly denied any link between DFRF and TelexFree.) On March 30, 2015, Filho caused DFRF to pay $100,000 to the same business. On April 2, 2015, Filho caused DFRF to supply more than $160,000 so that another business belonging to Rodrigues could purchase a 2008 Lamborghini sports car. There is no evidence that Rodrigues provided any services or other benefit to DFRF.
Litigation Release No. 23296 / July 2, 2015
Securities and Exchange Commission v. DFRF Enterprises LLC, et al., Civil Action No. 1:15 cv 12857-PBS (United States District Court for the District of Massachusetts)
SEC Halts Pyramid/Ponzi Scheme Targeting Spanish and Portuguese-Speaking Communities
The Securities and Exchange Commission today announced fraud charges and an asset freeze against the operators of a pyramid and Ponzi scheme falsely promising a gold mine of investment opportunity to investors in Spanish and Portuguese-speaking communities in Massachusetts, Florida, and elsewhere in the U.S.
The SEC alleges that DFRF Enterprises, named for its founder Daniel Fernandes Rojo Filho, claimed to operate more than 50 gold mines in Brazil and Africa, but the company’s revenues came solely from selling membership interests to investors and not from mining gold. With the help of several promoters, they lured investors with such false promises as their money would be fully insured, DFRF has a line of credit with a Swiss private bank, and one-quarter of DFRF’s profits are used for charitable work in Africa. The scheme raised more than $15 million from at least 1,400 investors by recruiting new members in pyramid scheme fashion to keep the fraud afloat, and commissions were paid to earlier investors in Ponzi-like fashion for their recruitment efforts. The SEC further alleges that Filho has withdrawn more than $6 million of investor funds to buy a fleet of luxury cars among other personal expenses.
According to the SEC’s complaint filed June 30 and unsealed today in federal court in Boston, Filho is a Brazilian native who lives in Winter Garden, Fla., and he orchestrated the scheme with assistance from six promoters also charged in the case: Wanderley M. Dalman of Revere, Mass., Gaspar C. Jesus of Malden, Mass., Eduardo N. Da Silva of Orlando, Fla., Heriberto C. Perez Valdes of Miami, Jeffrey A. Feldman of Boca Raton, and Romildo Da Cunha of Brazil.
The SEC alleges that Filho and others began selling “memberships” in DFRF last year through meetings with prospective investors primarily in Massachusetts hotel conference rooms, private homes, and businesses. DFRF promoted the investment opportunity through online videos in which Filho falsely claimed that the company had registered with the SEC and its stock would be publicly traded. As DFRF’s marketing reach widened, membership sales dramatically increased from under $100,000 in June 2014 to more than $4 million in March 2015 alone.
The SEC’s complaint alleges that all defendants violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and registration provisions Section 5(a) and 5(c) of the Securities Act.
The SEC’s investigation was conducted by Caitlyn M. Campbell, Mark Albers, John McCann, Frank C. Huntington, and Michele T. Perillo of the SEC’s Boston Regional Office, and assisted by Carlos Costa-Rodrigues in the agency’s Office of International Affairs.
The SEC appreciates the assistance of the U.S. Attorney’s Office for the District of Massachusetts, the Boston field office of the Federal Bureau of Investigation, the Massachusetts Securities Division of the Massachusetts Secretary of Commonwealth’s office, the Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico, the British Columbia Securities Commission, the Swiss Financial Market Supervisory Authority, the Financial Services Commission of Barbados, and the United Kingdom Financial Conduct Authority.
On June 16th, US Magistrate Judge Shaffer issued 2 Orders to Show Cause, the first was aimed at “Work with Troy Barnes, Inc.”, “Achieve International, LLC” and the second at Defendant Troy Barnes. These Orders are a result of Barnes failing to appear through counsel at the Status Conference held on June 3rd. Here’s a grab from the first Order:
“The court’s records indicate that neither WWTB’s nor Achieve International’s copies of the Minute Order were returned to the court as undeliverable. The court held the Status Conference on June 3, 2015 at 11:10 a.m. Defendant WWTB and Relief Defendant Achieve International did not appear and have not contacted the court to explain their failure to appear.”
“Accordingly, IT IS ORDERED that Defendant Work With Troy Barnes, Inc. and Relief Defendant Achieve International LLC shall show cause in writing on or before Thursday, July 2, 2015 why a default judgment or other sanctions should not be imposed against them for failure to comply with a court order and the Local Rules of Practice for the United States District Court for the District of Colorado. Defendant Work With Troy Barnes, Inc. and Relief Defendant Achieve International LLC are hereby warned that failure to respond to this Order to Show Cause on or before Tuesday July 2, 2015 may result in a default judgment or other sanctions against them without further notice.”
The second Order issued states:
“The court’s records indicate that Mr. Barnes’s copy of the Minute Order was not returned to the court as undeliverable. The court held the Status Conference on June 3, 2015 at 11:10 a.m. Defendant Barnes did not appear and has not contacted the court to explain his failure to appear.”
“IT IS ORDERED that Defendant Troy A. Barnes shall show cause in writing on or before Thursday, July 2, 2015 why he should not be held in contempt for failure to comply with the court’s order setting the Status Conference.”