URGENT >> BULLETIN >> MOVING: (3RD UPDATE 6:11 P.M. EDT U.S.A.) On virtually the eve of the criminal trial of Paul Burks, receiver Kenneth D. Bell has asked the court presiding over a huge class-action lawsuit against 9,400 alleged Zeek “winners” for a finding the MLM program was a Ponzi scheme. Such a finding would mandate […]
The post URGENT >> BULLETIN >> MOVING: Zeek Receiver Moves For Summary Judgment Against Class-Action Clawback Defendants; Kenneth Bell Says Defense Expert Witness Has Found No Evidence That ‘Disproves That The Business As A Whole Operated As A Ponzi Scheme’ appeared first on PatrickPretty.com.
BULLETIN: Zeek Rewards members are being targeted in a new scheme with ties to the Phil Piccolo organization and are being solicited for sums ranging from $600 to $60,000 “in return for ” . . . “guaranteed 50 percent interest” from a purported “unique and legal loan system” over an unspecified time period, the PP Blog has learned.
The offering, which hints of some sort of falling out with Zeek’s management, has been styled on YouTube as “The Diamond Club by TRUE CASH.” The emerging “program” was the subject of an email pitch yesterday that appears to have been targeted by an unknown party at former Zeek “Diamond” affiliates, potentially including some of Zeek’s largest “winners” who have exposure to clawback lawsuits filed by the court-appointed receiver and who previously have been solicited to make contributions to a purported defense fund for Zeek affiliates. Zeek “losers” also could be targets.
Previous schemes linked to Piccolo include the uber-bizarre Data Network Affiliates (DNA) “program” and One World One Website (OWOW), an equally bizarre money grab. (Use the PP Blog’s search function for information on those “programs.”) (read Full Bulletin At PatrickPretty.com)
Any entity or person (including, without limitation, persons, partnerships, corporations, joint ventures, estates, trusts, and governmental units) that believes that it holds a Claim* (each a “Claimant”) against Rex Venture Group, LLC d/b/a ZeekRewards.com and Zeekler.com (collectively “ZeekRewards”) should submit a Claim (a “Claim”) by completing the series of questions relating to its claim by following the links below (a “Claim Form”) if it would like to receive a distribution on account of its Claim.
All Claimants must submit a Claim Form to Kenneth D. Bell (the “Receiver”) on or before 11:59 p.m. prevailing Eastern Time on September 5, 2013, the deadline established by the District Court for the Western District of North Carolina (the “Court”) for the submission of all such Claims.
Failure to timely submit a Claim Form, submitting an incomplete Claim Form or submitting a Claim Form without supporting documentation may result in the complete disallowance of your Claim.
The Claim submitted on the Claim Form remains subject to a determination of the allowable amount, if any, of the asserted Claim. The requests for information on this Claim Form do not constitute and shall not be considered the basis for the determination of any Claim or distribution.
All affiliate Claimants (an “Affiliate”) who participated in ZeekRewards should submit a separate Claim for each ZeekRewards UserName that it registered and/or used in regard to ZeekRewards.com.
Points accumulated, awarded or otherwise held by Affiliates will not be considered in an Affiliate’s Claim and should not be provided.
* The term Claim means any (a) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; or (b) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured.
Receiver’s Message to Net-Winners Regarding Settlement Opportunity
April 1, 2013
Since I was appointed Receiver of Rex Venture Group, LLC d/b/a ZeekRewards.com (“Zeek”) I have tried to make clear to those who profited from Zeek that I intend to pursue claims against “net-winners” – regardless of amount – to recover their winnings which came at the expense of Zeek’s victims. Yet, I recognize that many of the net-winners also see themselves as victims of the scheme and are anxious to resolve their participation in Zeek without being drawn into court proceedings and the further cost and time involved in the legal process.
So, on several occasions, I have encouraged net-winners to come forward to discuss settlement of their claims. A number of net-winners have done so, and we have successfully negotiated payments which will, subject to Court approval, result in the release of the Receiver’s claims against those winners. The settlements take into account the amount of the affiliate’s winnings, the nature of their involvement and their involvement of others, their cooperation, their ability to repay the money (and the time period in which the repayment can reasonably be made) and other individual factors and circumstances. The amounts of the settlements have ranged from approximately 40% to 80% of the affiliate’s net winnings. However, not all net winners have
been or will be offered discounted settlements and the amounts of future settlements may vary from this range. The amount of the settlement offered to each net-winner will be based on the affiliate’s particular circumstances and ultimately must – in both my and the Court’s opinion – be in the overall best interests of the victims, considering the costs associated with the legal process.
The time for court action is drawing closer. I am sending this message to make sure that net-winners understand that there is an opportunity for settlement, but that the window for the opportunity is closing. To allow a reasonable time for all those who would like to pursue a settlement to do so, I am going to continue to make my team available to negotiate settlements for at least 60 more days. Therefore, if net winners want to pursue a settlement they should contact us by no later than May 31, 2013. After that date, I will assume that all
net-winners that want to avoid the legal process by discussing settlement have done so, and I will move forward with court action, likely in June 2013, against the remaining net-winners.
Again, my goal is to compensate Zeek’s victims and to the extent I can do that fairly without legal action against net-winners, all the better. So, I encourage any net winner interested in agreeing to a settlement prior to litigation to contact my team at firstname.lastname@example.org.
Jordan Maglich over at PonziTracker.com broke this news earlier today. I used his editorial to cover the most important parts of what this means for the victims and claimants of Zeek Rewards.
Troy’s Thoughts: It is clear from the filings that Kenneth Bell and his team are working to make the claims process, as cost effective for the estate as possible. But, it is the responsibility of those who are victims to pay close attention and make sure you fully understand what you must do to get your claims filed and accepted.
Should the Court approve the Motion in its current form, the Receiver proposes that he will provide notice to all interested parties via several methods:
Making the Claims Process publicly available on the Reeiver’s website at a soon-to-be-functional Claims Portal;
Emailing all known affiliates through email addresses obtained from Receivership records and collected at the Receiver’s website;
By U.S. Mail to trade creditors and other known, non-affiliate creditors; and
Publishing the Receiver’s Notice on the Receiver’s website, certain multilevel marketing sites, certain newspapers, and sending the Notice to certain trade groups in the financial industry.
Within 14 days of court approval of the Motion and included in the court-approved notice to claimants, the Receiver proposes to have a Claims Portal active on his website, www.zeekrewardsreceivership.com. According to the Receiver, the Portal is “designed to capture the claims of all Claimants…in the most cost effective way possible.” Thus, all claimants, whether affiliates or non-affiliates, should files claims at the Claims Portal. Indeed,
Failure to submit a validly completed claim on the Claim Portal (or by alternative means that are agreed to between such Claimant and the Receiver prior to the Bar Date) will preclude a Claimant from receiving a distribution from the Receivership Defendant regardless of the validity of the Claimant’s claims.
VIP Points Not Allowed
One issue of note is the Receiver’s proposal to omit any inclusion of “Retail Profit Points” or “VIP Points” in the calculation or determination of any claim. Akin to interest, the VIP Points were accrued by purchasing sample or VIP bids and then re-distributing them to retail customers or back to Zeek. The VIP Points then allowed the affiliate to participate in the daily percentage payout from Zeek, which averaged approximately 1.5%. As is universally understood in other receiverships, victims of Ponzi schemes are entitled only to their lost principal balance, and not to any fictitious interest (or, in this case, points) that they may have accumulated. Indeed, especially since the vast majority of Ponzi schemes are unable to accomplish a total return of victim losses, allowing interest as part of a valid claim would reward some victims at the expense of others. Source – PonziTracker.com
Last night’s public call where Rex Venture Group LLC., receiver Kenneth Bell answered the hard questions sent in by former Zeek Rewards affiliates (net losers and net winners), clarified the myths from the facts in the case. Instead of recreating what others have already written, I have included three different sources from the call.
UPDATE 5:18 p.m. A claims form for victims should be ready by the end of January, Bell said. It’s doubtful that victims can be made 100 percent whole.
UPDATE 5:21 p.m. There are some sad, Zeek-related stories of loss out there. Bell said he had emails from people who’d lost anywhere from $49 to $10,000.
UPDATE 5:25 p.m. Bell said some people have questioned whether he is dragging out the receivership to drive up legal fees. He asked listeners to trust him, and he denied foot-dragging. His “goal is to be the most cost-effective receivership in history,” Bell said.
UPDATE 5:33 p.m. Bell said he did not know if other people will be charged by authorities in connection with Zeek. (Zeek/Rex operator Paul R. Burks is the only person charged to date — civilly by the SEC.)
He added that he’ll be prepared to prove Zeek was a Ponzi scheme as he pursues winners in clawback litigation. A motion by Zeek winners to appoint attorney Michael Quilling examiner was “absurd,” he said. He did not reference Quilling by name.
UPDATED 5:44 p.m. Zeek’s database “is a real mess,” Bell said. He is studying a means by which victims could gain access to their back offices to gain access to information, but such a capability could be cost-prohibitive.
a proposed claim form will be submitted to the Court the end of January; people should begin accumulating their records for the upcoming claims process
Mr. Bell said he would like to have a Preliminary dispersal of funds as soon as the claims process begins and determinations can be made regarding records file vs money requested; this will have to be approved by the Court
He mentioned getting affiliates access to their back offices, the database is a mess and will have to be restructured; he is trying to get this done but with accurate information available; Zeek/Rex Ventures didn’t keep very good records
Clawbacks are coming soon; also mentioned several affiliates are cooperating and returning money to the Receiver
he thinks the Motion to appoint Examiner is absurd, conflict of interests since he represents 100′s of net winners
Briefly mentioned the motion filed to Dissolve the receivership, hopes the Judge doesn’t allow it
One of the most popular topics was the establishment of a claims process in which investors could eventually be permitted to receive distributions based on their loss amounts. Mr. Bell stressed that he is working strenuously to institute a claims process, which would first require the submission of a proposed claim form and procedure to United States District Judge Graham Mullen. According to Mr. Bell, he has set an internal deadline of submitting this information to Judge Mullen by January 31, 2013. Once the claims form and procedure receives court approval, the claims form will likely be posted to the website and distributed to victims, who will have until a court-imposed deadline by which to submit relevant requested information. The claim form will also specify what proof is required to substantiate claims. Upon the approval of claim forms and submission by victims, Mr. Bell also indicated his preference to proceed with an ‘interim’ distribution rather than waiting to make one final distribution at the end of the Receivership.
Another popular topic was the issue of “clawbacks” against those ‘net winners’ that were fortunate enough to profit off their investment by withdrawing funds in excess of their investment. The Receiver sent out a first wave of 1,200 subpoenas to those ‘net winners’ that were deemed to have profited most off Zeek. According to Mr. Bell, “scores” of investors responded in a cooperative manner seeking to pay back their false profits. However, a “whole lot” of recipients have fought back against the requests for information. If the Receiver is not able to reach an amicable resolution with each clawback target, he will likely proceed with the filing of a lawsuit. The Receiver took steps last week to ensure that he may properly bring clawback lawsuits in various federal districts around the United States by filing a copy of the SEC Complaint and the Order Appointing Receiver in districts where clawback suits are likely under 28 U.S.C. 754.
Mr. Bell also addressed the various recent filings that have sought to both contest his authority as receiver and challenge the SEC’s decision to shut down Zeek in the first place. This included the filing by Fun Club USA of a motion seeking the appointment of an examiner, as well as a filing by several clawback targets seeking to dissolve the Receivership. Mr. Bell saved his harshest words for these efforts, calling them “absurd” and disputing their accuracy. As to the motion for appointment of examiner, Mr. Bell pointed out (as Ponzitracker did here) the inherent conflict of interest that would present itself since the nominee for examiner currently represents “several hundred net winners,” as well as the implications of paying such an examiner our of receivership funds. Mr. Bell also indicated he will oppose the motion seeking the dissolution of the receivership, saying that the “receivership is here to stay,” and represented the only and best way to make victims whole. Read Jordan Maglich’s Full Editorial Here
Kenneth Bell’s team before & during the call filed the following Court Documents…
On November 14th, Nathaniel Woods, after contacting several attorneys and reaching out to me with some questions decided to protect his Rights, and sent Court a Motion to quash the subpoena sent by the Rex Venture Group receiver Kenneth Bell. Now after reading over the motion it does raise some additional questions…
Updated November 29th, 2012: Receiver Filed Motion Against Quashing The Subpoena… Worth Reading!!!
Woods is suggesting in his motion that the Receiver violated Rule 45 of the U.S. Code governing subpoenas.
However, since this was a “voluntary subpoena packet”, meaning the Receiver has not sued anyone specifically yet, and from my understanding the subpoenas were not signed by the court, then it seems these packets act as NOTICE that in the future anyone who doesn’t work with, or at least respond to the Receiver, will be sued, and there is nothing to quash.
If this is true, then although I support Mr. Woods for exercising his rights, I do not see that the Court will quash his personal subpoena or any of the others.
I do however, after talking with some of the attorneys, feel the judge might see the subpoena as over-reaching and have the Receiver tighten up some of his requests.
In other Zeek Rewards and Fun Club USA news, the attorney for Fun Club USA, Rodney E. Alexander, entered his appearance on behalf of David Kettner, Mary Kettner, and David Sorrells. Now we do not know if this is why Fun Club USA is now requesting additional donations for the legal fund, or if after months of promising action, their TX attorneys are about to file Motions, and have asked for additional funds.
There is some special call tonight for Fun Club USA, and more news will be leaked I am sure by morning.