Home MLM News Zeek Rewards News: What And When Did Insiders Know About The SEC Investigation And SNR Denton NOT Representing Fun Club USA

Zeek Rewards News: What And When Did Insiders Know About The SEC Investigation And SNR Denton NOT Representing Fun Club USA

by Troy Dooly
Truth & Justice

Oz over at BehindMLM.com did an editorial last week titled Did Zeek Rewards management know about the SEC? After reading it a few times I started going through some notes and reaching out to some folks to verify some of what I had in my notes.

Zeek Rewards News

Also, before I get into the answers to some of Oz’s questions I need to let folks know. I did talk with Robert Craddock a few days ago, and he informed me that SNR Denton would NOT be representing Fun Club USA, but that he had hired a new law firm. He would not answer all of my questions, but did say that “hopefully by Friday” a lawsuit or press release would go out. It is still early so we will see what happens by days end.

Ok, to Oz’s editorial. I am only covering the few things I have information on, so to read the full editorial you will be to visit the links above to read all of it.

[quote] With many of Zeek Reward’s executive management holding affiliate accounts to participate in the company’s Ponzi scheme, one of the most pressing queries has been the question of how aware of the SEC investigation were Zeek Rewards corporate executives, if at all.[/quote]

June or July, I received a call from an MLM Attorney who had shared with me the SEC was investigating some companies which had appeared on a specific blog. Many of the penny auctions were listed on the site along with some other companies with similar pay plan. I know from reviewing my notes I had asked Dawn and Greg about any investigations around May or June and at that time they did not know of any that were directed specifically at Zeek from any regulator. There were some issues with the Montana filing, but I was told the paperwork had been turned in.

From what I have been told, is that when Dawn anf Greg had asked Paul of any investigations Paul was very clear, the SEC was asking questions about each of the companies listed on the site and that Noell Tin had it handled and the SEC “was satisfied”. In the June or July Red carpet Day I also heard Paul make it clear the regulators (I assumed the NC AG) was asking questions but everything was under control.

[quote]Knowing full-well that Zeek Rewards was a Ponzi scheme and being aware of the SEC investigation and a resulting shutdown is vastly important, as such knowledge (and the suppression of it) put Zeek’s management in a conflictingly advantageous position as investors.[/quote]

The above was not a question but the more I read it I did think it deserved some kind of response. If Oz’s statement was true, I’d agree. But as-yet it is an unproven supposition that (1) this was a Ponzi scheme and (2) everyone knew about it. I know that in talking with several of the legal team, Chief Compliance Office (a former AG investigator), Greg Caldwell, Keith Laggos, and the CFO, did not believe it was a ponzi.

It was my understanding that when the SEC did ask questions they were focused on the RPP which based on the complaint they considered to be an unregistered security. This was a fixable issue, and one that was being looked at and reviewed by many over the last few months by many of the top executives and outside consultants.

[quote]Whilst regular affiliates continued to re-invest the bulk of their daily ROIs and encourage new investors to come on board, continuing on unawares right until the precise moment Zeek Rewards was shut down, Zeek’s executive management, aware of the SEC situation and what was occurring, could have easily been quietly cashing out as much as possible from their personal affiliate accounts.[/quote]

Could have, yes. But did they? ONLY a few long term executives (and perhaps system admin in Florida) could manipulate the system like that. I was told by one insider that several top executives who were inside the compensation plan did receive what was called large payouts in the form of checks. And had their point ratio set lower than 80/20, which would lead one to believe they were drawing down larger than normal funds. But, I do not know when this started or if it would be called a normal business practice, for these three or four executives.

I have did confirm that after Greg Caldwell was instructed by the attorneys from the SEC not to inform anyone of the pending shut down just a few days before it became public because the SEC did not want anything that would tip the field off because it might cause a run on funds.

[quote]Former COO Dawn Wright-Olivares all but vanished from the public eye after informing affiliates Zeek Rewards would not be able to pay them unless they “deposited more money” into Zeek’s e-wallet accounts (June 26th). [/quote]

Again this is not a question, but clarity might be good. A statement was issued on Dawn’s comments that were due to the fact affiliates were buying bids through one eWallet and asking for commissions through another eWallet. And at the time the new bank accounts had just been set up and funds were still being deposited. A bad phrasing of the words by Dawn I agree.

Dawn, was out of the country in the first two weeks of July on vacation, but during that time she continued to hold her training calls. In August she and the marketing team were doing calls the first week and were in Nashville the weekend before the closure finalizing the convention plans for November. The week before the closure, all calls were stopped, then the Red Farpet Day was cancelled, then the company was closed. That was the last two weeks of August. her “vanishing” in August (when she was in Nashville).

[quote]A week later Zeek Rewards Sales Director Darryle Douglas disappeared off the face of the planet for “personal matters” on July 30th. Such “personal matters” were never elaborated on by the company and following the official announcement, Douglas was never publicly heard from again.[/quote]

Daryl Daniels on the other hand did disappear from Mid-July and has not publicly been heard form since. Dawn, did not drop off the map until the week of the closure.

[quote]In it, Caldwell claims he ‘was not allowed to participate in meetings with the SEC or the attorneys‘. What attorneys Caldwell is referring to is unclear (Paul Burks personal attorneys or Zeek Rewards’ own?), however the key piece of information Caldwell reveals is that he was aware of a dialogue existing between the SEC and Zeek Rewards.[/quote]

It was not under August 6th 2012 that Greg Caldwell became aware of the current SEC situation. Before that the only mention of the SEC was to ask Paul Burks if the SEC were asking questions based on the above mentioned website. As I mention above Paul made it clear the SEC had asked questions and were “satisfied”. And from the information I have gathered, Caldwell requested that Paul Burks personal attorney Noell Tim allow the corporate legal team to help out since that is what they are paid for. This request was not accepted.

[quote]Largely fuelled by nonsensical lawsuits filed by Zeek Rewards affiliates claiming the SEC had no idea about Zeek Rewards when they filed their complaint and Troy Dooly’s updates on MLM Helpdesk, it’s being heavily pushed that Paul Burks acted alone in his dealings with the SEC – with this ultimately resulting in a closed-door deal involving a $4 million fine and surrendering of Rex Venture Group (Zeek Rewards’ parent company) to the SEC.[/quote]

Sadly this is apparently is true! What I do know is that Paul had Danny Wright establish a VPN (Virual Private Network) connecting him to the corporate computers so he could work from home while taking care of his wife. The only reason I know a little about this is because the whole VPN Australia scene is pretty intense and when I was there I had to wrap my head around a lot of stuff I didn’t know.

I have also found out through insiders that Paul Burks was meeting Noell Tin outside the office and would not allow Greg Caldwell or anyone else to join them. This happened once or twice per month.

Sure if folks had been carrying out “hundreds of thousands” of documents with no one seeing them, then it would seem strange that no one knew what was happening with the SEC. But with Paul Burks having access to the system though his VPN, it was easy to transfer the aforesaid documents without anyone knowing that the SEC was actively investigating RVG and not just the NC DOJ. And for that matter since no one was around the office at night or on the weekend, there is also the possibility that folks could have carried out documents duing those hours.

Since RVG has always been an internet based eCommerce company, it was easy to remove these documents without anyone realizing it because not a single ream of paper needed to be printed. From info gathered so far, I would say Paul used his VPN. And, for the record based on the info I have gathered, Greg Caldwell was never given administrative access to anything.

And since the LLC is a pass-through, single-member LLC only one person takes the risks, gets the rewards and pays the taxes on those rewards… Paul Burks! So for 15 plus years Paul burks is the only one with full access. He had a gal that cut the checks when he told her to cut checks, but he as the one who signed them and as on the bank account. Until 2012 RVG never had a long-term CFO and/or CPA firm watching over the business. Like most small businesses there were no checks-and-balances or Board of Directors.

From info I gathered, it was right around the time Caldwell accepted the “Acting COO” position that the audited 2011 financials had been completed and presented to the CFO. Which, based on the professionals who have reviewed them, don’t suggest a Ponzi was being run.

By the way, it is also my understanding that only three people in-house had total access to the websites and compensation structure. But… There is now evidence that up to five top level Zeek Rewards Affiliates “leadership Liaison” also had full access to the compensation structure and could see total point values and who requested what checks and when those checks were issued.

[quote]Why would they do that unless they’d sniffed something was up? The finer details might have been kept from them but “Ponzi scheme + SEC investigation + requests for hundreds of thousands of Zeek Rewards documents” is an equation anyone even remotely familiar with Zeek should be able to work out. Let alone those running and who were directly involved in the day to day running and management of the scheme.[/quote]

One very important point here. When Greg Caldwell and other executives knew the shutdown was coming they were specifically instructed NOT to change anything and not to tell anyone because the SEC didn’t want a “run on the accounts”. And during the first two weeks of August when I was talking to these executives they never let on of any pending closure.

And remember Dawn flew the marketing team which included several 3rd party consultants to Nashville the weekend before to finalize the convention plans. During this weekend trip, I was called and asked to use my connections in the Biking world to find the cost of having a custom bike (chopper) build by Jessie James for the convention.

In talking to the 3rd party consultants who were present on that trip, they have all stated they knew nothing and were totally taken be surprise with the closure.

[quote]Whether it’s post Ponzi-scheme damage control or sheer ignorance on the behalf of someone who claims to have ‘30 years’ experience as a licensed private investigator‘ and founder of a company that ‘provides assistance in corporate investigations, security, risk management and compliance assessment‘, I have no idea how Caldwell can claim to be “stunned” that the SEC, upon examination of hundreds of thousands of Zeek Rewards documents, came to the conclusion Zeek Rewards was a Ponzi scheme.[/quote]

Oz’s conclusion would be correct if hundreds of thousands of documents had walked out the front door. Without a doubt the staff in Lexington would know something was going on; but that didn’t happen.

And in talking to Greg Caldwell many times I can say he was stunned because Paul Burks and his personal attorneys, up to August 6th lie to Greg Caldwell stating all is good with the SEC.

From doing some due diligence I have found Greg Caldwell was still dealing with the people (bankers, attorneys, IT people) that he was working with trying to fix the company’s infrastructure.

It seems Noell Tin never once told anyone anything about a problem. And maybe that is part of the problem. I wonder what would have happened if Greg Caldwell had not been used as a pawn in all of this also? If he had been told by Paul Burks or Noell Tin NOT to hire the CFO, CTO, Communication Director etc., because of a closure, I doubt he would have taken the job.

Just my thoughts, but it does look like maybe Paul Burks or his attorneys decided it would be a great cover to hire Greg Caldwell as “acting CEO” and allow it to look as if he was being allowed to clean up the company so the affiliates would not get wise and start pulling out their money.

I know that if I would have known about any investigation I would have reported it. I am sure others realized I would also report on the hiring of Caldwell and the new executives. And with the NC AG CID becoming public (although it was not published until after the SEC closure) causes one to ponder if that was leaked to also throw off the fact a more serious issue was taking place?

And, again my thoughts… But why was Noel Tin ONLY representing Paul Burks but no one was allowed to represent the company? Although that might be a legal issue since the LLC is a single-member LLC, but, Kevin Grimes is on retainer as were other very reputable attorneys who have dealt with regulatory agencies for many years and they are completely shut out by Noell Tin and Paul Burks.

I know based on personal conversations that Greg Caldwell was flat out told at the end, when he tried to insist Tin and company to talk to these other attorneys, “We don’t care about the employees; we don’t care about the Affiliates, we only care about keeping Paul out of jail.”

[quote]In an utterly bizarre and completely destructive reflection of the MLM industry’s open willingness to embrace the absurdity of believing that the mere renaming of banning of terminology is what constitutes legal compliance, to deliberate on whether or not Caldwell was indeed Zeek Rewards’ COO is to be sidetracked.[/quote]

I think it might be good to explain what Greg Caldwell’s agreement was when he accepted the “Acting COO” role. This was to be a very temporary and very specific role which would run until Dec 31, 2012 from my understanding. He was there to hire the internal staff and turn RVG into a functioning business. After hiring the CTO and his team, those issues were getting addressed. He specific objectives were (1) Get the Affiliates Paid; (2) Hire Management Staff (3) Establish Solid Banking Relationships; (4) set up Functional Debit Cards for the field and (5) begin unwinding all the ewallet systems like Payza, STP, etc. And I should also include that he was also looking for a competent and experienced CEO to take over so Paul could be the Director.

[quote]Greg Caldwell has accepted the role of acting COO for RVG where we are confident he brings all of the skills, experience and strengths required to take the RVG operation to the next level.[/quote]

Well since Caldwell was only on the job for around 16 days, he could not accomplish much, even if he had been IronMan! It would have been nice to see if he could have turned this ship around by hiring the right people and working with the SEC and AG to eliminate any issues.

[quote]“How much of the money we take in daily is from affiliates, and how much of this money is then paid out each day to affiliates?”[/quote]

From info I have gathered, this was a query Caldwell tried to get run for the Noell Tin and his firm to give to the SEC but they refused. It does seem like a basic question and a good one. But that information was NEVER provided to anyone, Caldwell or it seems the SEC based on the fact their numbers were low in the complaint.

[quote]As per Greg Caldwell, the SEC didn’t shut Zeek Rewards down because Paul Burks sat in his office inventing the daily ROI percentage paid out to affiliates, or that mechanically Zeek Rewards operated like an investment scheme with 90% of the money coming into Zeek Rewards being invested affiliate money, and 98% being paid out in daily ROIs also being invested affiliate money.[/quote]

I have found that the SEC had a very specific concern about the RPP being an unregistered security. Executives had very specific talks about doing away with it completely to appease them.

And although I can’t put words in Caldwell’s mouth, I do know that when a company gets on the radar screens of any regulatory body, the very first thing they do is begin to search the web for supporting information to their suspicions (remember the above mentioned website.) And as we all know many of the affiliated were promoting Zeek as an investment ponzi.

I know that the RVG compliance director was a former AG investigator and worked daily yo find anyone who was promoting Zeek Rewards illegally. But with plenty with websites out there for the SEC to find in spite of very specific efforts by compliance to find them and terminate the persons behind them.

[quote]No, Zeek Rewards was shut down because “idiots” and “morons” were running around the internet referring to the investment opportunity as well, an investment.

And Caldwell wasn’t an employee of Zeek Rewards because, you see, he “accepted” the position of COO as opposed to having been promoted as an existing employee of the company.

This is the idiotic linguistic psuedo- [sic] compliance battle that has raged between Zeek Rewards affiliates and its critics on BehindMLM over tens of articles and now thousands of comments.

Fuelled by ringleaders like Caldwell enforcing the “a Ponzi scheme is not a Ponzi scheme if nobody refers to it as such” angle, ultimately and as repeatedly predicted what you call your Ponzi scheme doesn’t matter. What matters is whether or not you are indeed running a Ponzi scheme.[/quote]

Caldwell might not have been an employee because his Agreement to accept the “Acting COO” role was done as an independent contractor and was just standard C-level title was used that folks would recognize. Not a huge deal, but important when it comes to court issues.

In talking with Caldwell his point above was more focused on the fact an unregistered security does not make a Ponzi scheme. But more importantly months before Noell Tin was dealing with the possibility of an unregistered security concern but “everything was okay”. A week before shutdown, Caldwell was still being told this.

Now, in reading through all of Oz’s editorial and through my notes and gathering more information I have come up with an interesting scenario.

There is a possibility that Noell Tin was told by the SEC several months before RVG to eliminate the RPP, and this was never relayed to any of the other executives. Or that those executives who were told to change it decided to drag their feet since they were part of the compensation structure.

Had the customer qualifiers, and other changes taken place, and the RPP was eliminated and the commissions inside the compensation plan were just raised, then maybe the SC would not have closed down Zeek Rewards… But then again its to little to late.

related posts

37 comments

dan September 15, 2012 - 17:02

I guess a peon gets knocked off the blog for asking a simple question about being paid from the ewallets and bids

Troy Dooly September 15, 2012 - 18:24

@Dan,

We do not knock anyone off the blog for asking any question. Feel free to comment anytime.

Mlm Company Review | MLM Help Desk September 12, 2012 - 20:06

[…] By forcing Robert Craddock and crew to remove false information about SNR Denten representing them to hurting Zeek Rewards Affiliates, Craddock feels that I have in some way capitalized on the […]

Mlm Company Review | MLM Help Desk September 12, 2012 - 18:42

[…] Breaking Zeek Rewards News: SRN Denton To Represent Zeek Affiliates United Against What is Believed to be Unlawful Action by the SEC Robert Craddock who leads this effort on behalf of “ZEEK AFFILIATES UNITED AGAINST WHAT IS BELIEVED TO BE UNLAWFUL ACTION BY THE SEC“, contacted me today to notify me this group of Zeek Affiliates have retained one f the top 25 law firms in the world SNR Denton. Update Added Below On August 27th, 2012 Update Added On September 7th, 2012 – Robert Craddock Reveals SNR Denten Returns Retainer […]

Joseph September 11, 2012 - 19:54

This was all good ,and informative.

gold account September 9, 2012 - 03:05

Please note that some of the email sent by Dave Kettner contradicts the statement on their own website, which appears below. Kettner claimed that if you contribute you are a part of the lawsuit. Read the section below, then confirm it on their website, and decide who is lying.

Paul Moore September 9, 2012 - 01:02

I do apologize

I meant @ Morten

You see, when I’m wrong I admit it.

Unlike Oz!

Paul Moore September 9, 2012 - 01:00

@ Morton

First of all, you don’t know what I posted. Therefore,
you have no idea about the relevance of it

Secondly, the point I am trying to make
is that I have never ever seen an article by
Oz that was positive about any MLM

Unlike Troy, objectivity is not in Oz’s vocabulary.

Clearly he has an agenda that reeks of National Enquirer
“journalism”!

Since my taxi-driver just dropped me
off at home, I’ll get back to Zeek.

Should we find that the SEC truly has not found anything wrong with Zeek, the allegations upon which Troy
has reported, then we’ll see if Oz mentions that on his website.

Until then, it is your right to keep on being an Oz apologist!

Shirley Crawford September 8, 2012 - 22:31

>
> Hey Zeek Samurai Kazoku,
>
> We just got off the phone with Robert Craddock in response to news
> going on around the Internet of rumors and other misrepresentations of
> the truth. So here is what we found out directly from Robert…
>
> On Monday, August 27, the retainer was sent directly to SNR Denton to
> represent ALL Zeek Rewards affiliates who donated and joined the
> protected group through Fun Club USA, LLC. It was announced many times
> to not contact SNR Denton directly as they were going to work directly
> through Robert Craddock and the group can have all questions answered
> directly by Robert. What happened was people did not listen. SNR
> Denton begin getting tons of calls from across the globe with people
> asking them questions that they could not answer and disrupted not
> only the progress of our legal filing that they were trying to do, but
> also interfered with their entire law firm operations.
>
> Due to this, SNR Denton told Robert on Friday, August 31 that they
> would no longer be able to represent us and sent back the retainer
> funds to Robert. They did however share a few law firms that they
> believed would be successful in representing us and Robert this past
> week has been able to retain another powerful law firm moving forward
> and has already made significant progress this week. Due to what
> happened with SNR Denton since people do not listen, the name of this
> law firm and our representing attorneys will not be announced until
> the filings are done early next week. At this time, the court filings
> will be made public.
>
> Again, we ask that when the law firm is announced, DO NOT CONTACT
> them! If you want things to proceed, then take a step back and let
> them proceed. People that want more information delay the work that is
> happening including sending Robert, myself and other emails, calls and
> Skype messags asking us how are things going with the Zeek fight.
> Please people, trust in the fact that as we know things, we will
> announce them. Please be patient and know that if you do these things
> that we are asking you not to do, all you are doing is hindering the
> operation. If you want to help, then spread the word of the fight,
> spread the word of how you can help, and pray for the best and for
> justice to prevail.
>
> Here is the great news…The law firm has already talked to the SEC
> and the NC DOJ. On Thursday, Robert got a call from one of our
> attorneys regarding the conversation that he had with the SEC. Here is
> what he said:
>
> The SEC acknowledged that there are a couple of problems with the case
> against Zeek Rewards and Rex Venture group. Here are the problems:
>
> We (the SEC) are not able to find a victim in this case. We are not
> able to find anybody at this time that has been harmed by Zeek
> Rewards.
> We (the SEC) are having a hard time finding a security. In the
> complaint, it said that Zeek was selling securities and was an
> investment scheme.
>
> Based on their (the SEC) new knowledge of the Zeek Rewards business
> model, they are having a hard time moving forward in making their
> case. And they are now looking for a path or way to back out of this.
>
> What are attorneys will be doing next week is filing a motion of
> appearance that they are now representing Fun Club USA, LLC. and the
> people that are now associated with them (the protected group). The
> receiver, Kenneth Bell, has now also realized that 2/3 of the Zeek
> Rewards affiliates are international which makes for the use of
> federal clawback laws being used to recover more funds impossible as
> they cannot collect them from the international affiliates and would
> not hold the 1/3 of US affiliates liable for the entire company.
>
> You may have noticed that on the site, http://zteambiz.com and
> http://zteambiz.net had to pull down the PayPal donation button. This
> had to be done because PayPal found out that we were working to defend
> Zeek Rewards and since PayPal had to stop working with Zeek in the
> past due to the fact that Zeek is an MLM and PayPal does not work with
> MLM’s, they decided that they could no longer work with Fun Club USA,
> LLC. either. So, if there is anyone that has made a donation to Fun
> Club USA, LLC for their donation to the legal fight against the SEC
> and needs a refund for any reason, you can request that through Robert
> directly by sending an email to zeeklegal@gmail.com. If more donations
> are needed for the law firm, these directions will be forthcoming.
> Please realize that all funds that have been received have been sent
> directly to the law firm and more news will be announced next week as
> the filings are made with the courts.
>
> In the conversation with the SEC, our attorney’s have already put
> forth the direction with moving forward with what they are calling
> “Zeek Rewards 2.0”. They already have decided on another law firm
> where our attorneys would write an opinion letter which is something
> we have been told should have been done a long time ago with Zeek and
> had not been done. What this opinion letter will do is go to all
> regulatory agencies which will put them all on notice as to how this
> business, “Zeek Rewards 2.0” operates. Furthermore, if there should
> ever happen in the future like what happened with the SEC emergency
> injunction against Zeek, there will be a process that will have to be
> done first where they would have to go through a series of steps going
> through the law firm first that fully understands the business model.
> In other words, what happened to Zeek Rewards on August 16 which was a
> major mistake by the SEC, will never happen again.
>
> It has also been our goal to fight the SEC allegations to prove that
> what they accused Zeek and Rex Venture to be false, and then to get
> Zeek Rewards back into operation. The SEC, since we have basically
> called them out to prove their allegations and put their feet to the
> fire, they now have to own up to this HUGE mistake on their part. They
> can no longer sweep this mistake under the carpet and are now going to
> be forced to assist us in getting our business back up and running
> more then likely stronger then ever. The SEC were the ones that
> actually have recommended how to set up the opinion letter with the
> law firm that they recommended to be sure that the new Zeek is
> protected from this ever happening mistakenly again.
>
> Ok, well that is a wealth of information…Please be sure to share
> this news with everyone. Do know that these steps still need to play
> out in the court system and it will take time. But the most important
> thing to know from all of this is that we have already succeeded in
> showing that the proof that we have fully proves that EVERYTHING the
> SEC accused Zeek and Rex in their August 16 complaint was gravely
> mistaken as they did not fully understand the Zeek business model and
> that it now looks very positive that there WILL be a Zeek Rewards
> business moving forward. Again, please be patient and allow for the
> court system and our attorneys to do their job. Please also do not
> listen to the “talking heads” that claim they know everything online
> as the only thing that they are trying to do is drive up controversy
> which builds their own followers and gets more views to their
> websites.
>
> I hope you all have a Blessed weekend…Keep the faith and look for
> further announcements from us a we get them.
>
> God Bless,
>
> Dave Kettner
>

Paul Moore September 8, 2012 - 18:11

Shiva,

Since the Great All Knowing Oz has blocked my comments from his website, I would like to add to your
wonderful comments:

How about the stock market – e.g. the poor souls
who bought Facebook at $ 40 and now it’s at $19?

How about Casinos – never seen one go out of business yet – but, if someone is winning, that means someone else has to be losing!

Of course, all that is ok with Oz –

Like most dictators, he knows what’s best for all!

Morten September 8, 2012 - 22:25

@Paul Moore

The reason why your comment was blocked is being reflected in your comment here. You’re off-topic from the main topic, trying to discuss Facebook shares, Casinos and similar stuff instead of Zeek.

Stuff like that is better to discuss with the taxi-driver on the way home from a bar late Saturday night, or other people with the same professional experience in listening to all types of problems.

Dan Nguyen September 8, 2012 - 15:55

It is very hard for me to believe that the entire executives team didn’t know what Paul Burks and his cronies had been doing for all these years ??? it is accounting 101 guys … you were either got paid by Paul Burks or allowed to cash out big time … to keep your mouth shut… plain and simple … I knew for sure some of the top affiliates in a group called VietZeek had a deep connection with Darryl Douglas and other top leaders (probably top 5 as you referred to) did simply just that before the shut down…

Shiva the Destroyer September 8, 2012 - 15:28

If we have to wait on this b.s. to unravel on who knew what and a he said she said to be tried in court before we can get our money back….

Its going to be hard for some but a guy like me is just a tad bit irritated…just a tad

OZ, you can sit their and say how your right all day long. #1 whilstler…Yeah like your a vigilante hero knowing whats best for all… but in the end it comes down to the INDIVIDUAL and where one CHOOSES to place his or her Money and they need to take responsibility and do their own due diligence. I know that might sound absurd to you but its a freedom of choice and people do the stupidest things with their money all the time. Sometimes the best way for people to learn is to let them lose.

If one was prepared to lose everything they had put into Zeek like I was. If it crashed, that was my risk. My gamble. I was prepared for that because I made peace with that possibility already….it was MY CHOICE….

no one forced me to do this…

But losing my money to this SEC under the idea that THEY Are doing ME a favor??? yah…thanks a lot

So again when will I see my money because I didn’t get to profit? How long will that receiver take Oz? years perhaps?

Maybe the lawyers involved in this are reading all this Balogne you and Dooley are parsing out since you two are SO CLOSE to the story…

See most people who looked at Zeek understood its a ponzi scheme or at least understood there was something very fishy about it. How could one not? Everything from the company’s behavior towards affiliates to the actual business model itself. If they didn’t, they’re not being serious with themselves. Its just common sense but for the love of money, because of the pressures of our own society within this economy, they chose that path and it became easier when they started seeing it pay off. They quickly saw what they wanted to see…

And Oz you are correct about ZR being Ponzi. You talk about this so much you must find this topic pleasurable like shooting fish in a barrel.

But you know what? I got a bigger Ponzi for you to investigate because you sound like a guy that likes a big challenge!

The Us Govt sanctions ponzi schemes everyday. What do you think fractional reserve banking is?

Can all the customers of a banking branch go to that branch at once and all withdraw the money they have in their accounts in cash? Of course not that’s absurd. They have set limits on withdrawals because everyone knows the branch does not have that much cash and can not take care of everyone. See how well they have us trained making us feel sorry for them and then citing security issues for it being this way? Like sheep we accept this as being correct but tell me that’s not a ponzi scheme?!?

In Ancient times a money changer could lose his life if he issued too many reciepts and didn’t have enough gold on hand to honor the customers past deposits.

And just because you see an FDIC sticker on the bank’s window does that really mean they can actually insure EVERY American bank account holder for up to 250,000 dollars? Where are the hard assets to do that?

The only way the FDIC can say this is because like the Federal Reserve they are completely absolved of any real responsibility in our economy as they can never go bankrupt because their job is to make sure we keep creating money ie DEBT out of THIN AIR with compounding interest passed on to the commoner!! And its backed by nothing just like Zeek Reward Bids with all that compounding interest except that program benefited the commoner!!

But if you don’t like that as a challenge, maybe that’s a little big for you since the US Dollar is a reserve currency that every nation in the world uses to give value to their own worthless currencies….

There are other challenges like Social Security and Medicare in the U.S. The younger working class paying into a system that takes care of our elderly and the way it is now, the younger workers are LITERALLY paying to take care of the elderly and its accepted as being legal…

New money in to pay older investors right? over and over and over?? Am I right?

There ya go Oz, why don’t you take up the challenge about investigating and writing on any of these programs that display Ponzi characteristics. You can call it in and maybe do us another GREAT favor and get one of those over turned…

Yes OZ thank you so much for being the wonderful all knowing protector for internet humanity! What would we do without you?

I hope to god you trip over someone’s chair leg and fall onto a steak knife suffering a minor wound.

Frikken JERK!!

Morten September 8, 2012 - 20:02

@Shiva

AFAIK, Oz only does reviews on companies if they have an MLM compensation plan, and Social Security, Medicare, Fractional Reserve banking and the Receiver uses a different pay plan, with no multi level payouts.

Rocket man September 9, 2012 - 10:16

Well said Shiva and how true!
It’s nice to read something from some one with some common sense that tells it how it is.

You are so correct there are so many big ponzi’s out there in this big old world and people just accept it as being normal because it doesn’t seem too good to be true!

Barry September 9, 2012 - 19:06

Right on Shiva. My sentiments exactly. I like Ponzi schemes. Life is a Ponzi scheme. And your comments about the Fed and SS etc are very true. Bankers make money by manipulating money. They have learned to create it out of thin air. See the Wizard of Oz. They hate anyone else who uses there scheme, especially us average joes and jills.

Anthony Rivera September 8, 2012 - 15:25

SEC can’t find any hurt victims in Zeek Rewards and Giving bids away is not a security.

facebook.com/pages/Zeek-Rewards-Affiliates-United-Against-The-SEC/465061326857478

Paul Moore September 8, 2012 - 13:59

Troy,

It’s no use arguing with OZ

He and his Partner in Sadism, Chang, KNOW EVERYTHING!

By the way, OZ has blocked my comments from his website!

So much for free speech!

He would make an excellent dictator!

Troy Dooly September 8, 2012 - 14:53

@Paul Moore,

I was not trying to argue 🙂 I thought I was helping to provide more info. But at times I can see that writing does come out sounding different. I just had Robert Craddock write on his website I had betrayed him.

It is a strange world at times. I agree I guess Freedom of Speech is sometimes put on the back burner so agendas can move forward.

Morten September 8, 2012 - 22:07

@Paul Moore

That’s probably WHY it was deleted.

Before using the concept of Free Speech, you’ll first have to know how it works.

Currently we are both off-topic to the main topic in this thread, so we’re both violating some of the principles for Free Speech. It isn’t an unlimited right to express whatever you want wherever you want to express it.

Rocket man September 9, 2012 - 10:21

Oz doesn’t need to be a dictator!
He’s a Dick Head and that’s similar.

Lookout OZ when Zeek returns bigger and better.

You are really going to look like a total wanker!

Mehva September 8, 2012 - 13:27

what about the coincidence???? of giving affliates interim tax statements on aug 13? any ideas of what tax forms we will now get?

Brendan Ginaugusawa September 8, 2012 - 13:06

Troy, you saw the announcement from the White House regarding the petition in favor of ZeekRewards and against the SEC?

What does it say about the White House no interest in dealing with this situation??

See the link >>> https://petitions.whitehouse.gov/petition/support-keeping-zeek-rewards-open-stop-sec-and-attorney-general-stealing-our-business/YTbTXj3q?utm_source=wh.gov&utm_medium=shorturl&utm_campaign=shorturl

Oz September 8, 2012 - 13:04

“1. You give way to much credit to this whole team. You make them out to be the smartest folks in the world”

You don’t have to be the smartest people in the world to realise something is up with the SEC, NCAG, Secret Service and whoever else is involved, have a look at what Burks is doing, see massive amounts of data leaving Zeek HQ and put two and two together.

“If the executive team had set at 0% and tried to walk away, the five outside field leaders could have seen this and asked questions”

Or, due to the fact they’re all more than familiar with participating in Ponzi schemes (most of them were from ASD after all), put 2 and 2 together and quietly cash out themselves.

Asking questions doesn’t pay them out, setting their re-investment to 0% does. Ponzi players only care about their ROI, questions be damned.

“You do make a point on the VPN, and I am sure Paul would also have FTP access and folks could have also monitored that.

You don’t have to monitor it, just check the server logs for abnormal activity once you’re aware the SEC and other authorities are investigating the company.

Standard due diligence when things don’t add up and it’d only take a few minutes (if that) to notice hundreds of thousands of documents being transferred out of Zeek HQ.

“So Oz, would you agree that if the RPP would have been removed when the SEC first brought up the fact they saw it as an “unregistered security”, that Zeek would have just been another shoddy internet based MLM penny auction?

To date a MLM penny auction that didn’t launch with a Ponzi points compensation plan has made any impact.

Bidify is the only other company to have launched with Ponzi points, however they changed the comp plan and business has since tanked.

I’m keeping an eye on it to see if things pick up again but without the Ponzi points the niche doesn’t seem viable at this point.

Zeek also wouldn’t have been viable without Ponzi points as that’s all people were joining it for.

No hard-on for Caldwell! But having been in a similar position in the past

Did you make an official statement dismissing any and all criticism when you knew at least two governemnt agencies were investigating the company, your boss was “stonewalling” you and the company was running a business model which, as anyone who went over it who wasn’t being paid by Zeek and/or had invested money into the company themselves could see, was a blatant Ponzi scheme?

Caldwell’s actions and blanket dismissal of criticsm stand by themselves and he alone is responsible for them.

sunny chilafoe September 8, 2012 - 10:57

Troy, How do I view the blogs that you always make reference to?

Troy Dooly September 8, 2012 - 14:59

@Sunny, seems like you are. Or if you are talking about inside the editorials click the links.

sunny chilafoe September 10, 2012 - 13:03

ok thanks

Oz September 8, 2012 - 01:57

Republished because blockquote tags don’t work here.

“If Oz’s statement was true, I’d agree. But as-yet it is an unproven supposition that (1) this was a Ponzi scheme and (2) everyone knew about it. I know that in talking with several of the legal team, Chief Compliance Office (a former AG investigator), Greg Caldwell, Keith Laggos, and the CFO, did not believe it was a ponzi.”

What the people on the Zeek Rewards payroll believed is irrelevant. Mechanically the compensation plan was an investment Ponzi scheme.

End of story.

“It was my understanding that when the SEC did ask questions they were focused on the RPP”

Of course they were, because at the end of the day that made Zeek Rewards a Ponzi scheme and was the core of the business. Its existance made everything else irrelevant.

“Could have, yes. But did they? ONLY a few long term executives (and perhaps system admin in Florida) could manipulate the system like that

What’s there to manipulate? Set your ROI to 0% re-investment and away you go.

“I was told by one insider that several top executives who were inside the compensation plan did receive what was called large payouts in the form of checks.”

Of course they did. Regardless of what Burks might have been tellin them they all knew SEC + obvious Ponzi scheme = disaster.

Cash out quietly whilst the sheep continue to re-invest and attract new sheep to invest.

Coming from company management this is simply dispicable.

“As I mention above Paul made it clear the SEC had asked questions and were “satisfied”.

And from the information I have gathered, Caldwell requested that Paul Burks personal attorney Noell Tim allow the corporate legal team to help out since that is what they are paid for. This request was not accepted.

I have also found out through insiders that Paul Burks was meeting Noell Tin outside the office and would not allow Greg Caldwell or anyone else to join them.

This would (and most likely did) set off alarm bells within managment and prompted the ramping cash outs that occured prior to Zeek Rewards shutting down.

They were the only ones that knew (or had information to accurately suspect something was up), and kept it secret, quietly cashing out while the rest of the affiliate base re-invested, attracted new investors.

“Sure if folks had been carrying out “hundreds of thousands” of documents with no one seeing them, then it would seem strange that no one knew what was happening with the SEC. But with Paul Burks having access to the system though his VPN”

The VPN still connected to the Zeek Rewards backend and activity would have been easy to monitor from that end.

VPN just means snooping on the connection would have been difficult. If the VPN is connecting to systems you have access, it’s a moot point.

Please don’t waste my time asserting executive management didn’t have access to Zeek’s IT dept or weren’t in communication with them (of which, most likely most of them had paying affiliate accounts too and would have been been completely aware of hundreds of thousands of document requests being sent through the VPN connection).

Which, based on the professionals who have reviewed them, don’t suggest a Ponzi was being run.

Or that, when presented with the prospect of earning bajillions of dollars, they decided the compensation plan mechanics were irrelevant and thought telling people to not call it an investment mostly funded by newly invested money from members meant it wasn’t.

“By the way, it is also my understanding that only three people in-house had total access to the websites and compensation structure.

Well I had access to the compensation plan and I’m pretty sure I wasn’t in-house.

Come to think of it anyone with an internet connection had access to Zeek Rewards’ compensation plan. Exactly how big are you proposing Zeek Reward’s “house” was?

But why was Noel Tin ONLY representing Paul Burks but no one was allowed to represent the company?

Because like all Ponzi scheme operators, Paul Burks only cares about Paul Burks.

Contrary to popular belief he wasn’t Jesus Christ or Santa Clause reincarnate and knew full well what he was doing.

As evidenced by the cashouts some of his buddies knew what he was up to, and as per some of the statements you’ve received, allegedly some did not.

I know that the RVG compliance director was a former AG investigator and worked daily yo find anyone who was promoting Zeek Rewards illegally.”

How it was promoted is ultimately irrelvant is and is just linguistic psuedo-compliance bullshit that I addressed in the article.

Mechanically Zeek Rewards was a Ponzi scheme, how it was promoted or desribed was irrelevant.

As for Greg Caldwell,

“From info I have gathered, this was a query Caldwell tried to get run for the Noell Tin and his firm to give to the SEC but they refused.”

Yet he took on the position of COO anyway.

Caldwell dismissed and and all criticism of Zeek Rewards of his own accord and an official capacity as COO of Zeek Rewards.

Based on his knowledge something was up and what he knew about Burks off-location liasons’ and the repeated alleged denials of access to information that was needed for basic due diliegence into the company he just accepted an executive management position at, things don’t add up.

Either Caldwell was talking out of his arse (knowing full well the SEC were involved and that they didn’t give two rats about their being 8 complaints or not, they were there to investigate the Ponzi scheme operating on a massive scale), or he was doing his best to encourage new investors to come on board and keep existing investors re-investing their daily ROI.

Quite clearly, in order to arrive at such a conclusion it has to be presumed he’d done his own due diligence and investigation.

If that didn’t extend past “I asked Paul Burks and he said “we’re good”, that is inexcusable professional failure on Caldwell’s behalf and he needs to be held accountable for it. No excuses, no “but but I didn’t know” bullshit.

The SEC only barred him from going public in the last few days, he had every opportunity to look into the company he was being paid by and at the end of the day wound up working for, supporting and proclaiming the legitimacy of a Ponzi scheme.

That is probably going to be Caldwell’s greatest achievement legacy wise in MLM and it’s something that will follow him around for the rest of his career. And it’s on him, nobody else.

Honestly Troy, I don’t know why you’ve got such a hard-on for the guy.

“Had the customer qualifiers, and other changes taken place, and the RPP was eliminated

then Zeek Rewards would have ceased to exist.

People were in it for the Ponzi scheme and nothing else. Wake up Troy.

Troy Dooly September 8, 2012 - 08:41

@Oz,

As always thanks for taking time out of your own community to respond.

Only a couple of things that come to mind from your comment.

1. You give way to much credit to this whole team. You make them out to be the smartest folks in the world and that they would be monitoring the VPN. Think about it my friend, they did not even have security on the website for months, which is what got them banned by the Gateways and Merchant Accounts. Don’t expect anyone to monitor Paul’s activity. (Although, the new CTO when he came on board might have raised flags, asked questions, and that caused the SEC to move a little faster before everyone caught on.) But one path to follow might be the fact, Danny the lead programmer was Dawn’s son and based on Dawn’s own words the both of them had been programming together for years.

2. If the executive team had set at 0% and tried to walk away, the five outside field leaders could have seen this and asked questions as to why those executives were not following the 80/20 rule themselves.

3. Oz, you could be right on “setting off alarms”… I do think Dawn hired an outside attorney right around the time she returned from Europe.

4. You do make a point on the VPN, and I am sure Paul would also have FTP access and folks could have also monitored that. But outside of the new CTO, I will not give anyone else that much credit. Think about it Oz, the system was unstable period from a software standpoint. Do you really think a team of thee people (Danny and Alberto) have time to do anything but keep tweaking the code to keep it running? And the CTO was also connecting via VPN and FPT because he was not located in Lexington either.

I know you are far more versed in the type of folks who mastermind Ponzi schemes, but you truly give these folks way to much credit. Heck they could not even keep the banks rolling until outside professionals came on board.

5. So Oz, would you agree that if the RPP would have been removed when the SEC first brought up the fact they saw it as an “unregistered security”, that Zeek would have just been another shoddy internet based MLM penny auction?

Either way, I believe we are on the same page that the RPP was always the issue, which was why since April I had been pushing the company to make changes. Knowing NOW that the SEC was questioning it also, it has raised concerns in my mind as to WHY the procrastination of making the changes I had pushed for to eliminate any type of interpretation of “unregistered security”. But little by little I am starting to get a new picture as to why 🙂

6. No hard-on for Caldwell! But having been in a similar position in the past, and having been told one thing, shown financials that later turned out to be false, I am willing to give him far more credit than you at not knowing all that was taking place. Plus I know Greg was working to eliminate ALL issues surrounding the RPP and was also at times was stonewalled.

It is easy to cast light on Zeek from the outside, you and I both have done that for months. However, when a person is hired for a specific job, and that job has a mountain of points that must be completed ASAP, including answering a NONE AG CID, you don;t have time to do much else.

7. I am not sure Zeek would have disappeared. However, I do think many of the folks would have left the company. I do know we will both know if your deduction is right by watching what happens to those penny auctions which, since the ZEEK closure have changed their comp plans to keep the SEC from shutting them down.

If they all collapse and get to keep folks money without any regulatory control, then we will know you were 100% right and once again people will be screwed. Only this time with over chance of getting their money back.

Again, thank you for coming by.

tom September 8, 2012 - 13:36

Zeek Rewards Affiliates United Against The SEC

Aug 30th SNR Denton…hired on to represent us aka Fun Club USA:

We need to give you an update, last Friday SNR Denton, quit and gave back the retainer…..why?

#1. The sheer number of affiliates and other people demanding to talk with, know about and meet with the lawyers on cell and email were too much for the film to handle. They were not prepared for all of those who did not listen to the request that we made. #2. because they and their staff were threaten with physical harm when most of those who called and email couldn’t talk to the lawyer and were not given any information. With those two factors and the huge disruption to the firm by the very people that they were going to help they quit us. I am not often mean….but way to go all of you who just had to throw a monkey wrench into the engine.

From there we had to work fast….and we did.

Two different law firm were referred by SNR and three others interviewed. A day and a half we went with a firm from Dallas TX. … And NO I WILL NOT DISCLOSE , they have talked to the SEC and DOJ…comments from the SEC so far.

Thursday Sept. 6th 2012 What the lawyer found was this:

1. SEC does not see a victim in the Zeek model. DID YOU HEAR THAT? They are finding trouble finding anyone that was harmed by Zeek Rewards. NO VICTIM.

2. The SEC are finding and seeing that Zeek Rewards is not a security. DID YOU HEAR THAT…SEC is now saying that paying for bids is not a security not an investment scheme , they are having a hard time proving what their claim said because they now have true knowledge of how our business works and are trying to find a graceful way to back out. BACK OUT.

3. Also because of 1/3 of the people are out of the country it would be next to impossible to do claw backs. The courts will not punish only the people in America alone. Legally they can’t just claw back only those living here in the US and punish us and not all the affiliates worldwide and other countries will not allow a claw back.

NOW ….we are now moving forward to start a negation with the SEC on the exit stagey for us to take back our businesses. DID YOU HEAR THAT? If we wouldn’t have come forward and challenged the SEC this would never have happened. They would have gone forward with accounting our money and charging whatever an hour and then returning pennies on the dollar to the non victims.

Where are we now, if there is going to be a Zeek 2.0 ..AND YES THIS IS GOING TO HAPPEN….A formal letter will be sent out to all regulatory agency to put them on notice of our great and unique business model so that this doesn’t happen again. Because we are cutting new ground no one understands just how powerful this business is.

Again we will need to hire a law firm, and yes we do have one in mind and NO I WILL NOT DISCLOSE IT TO YOU YET, they will do a recommendation they will give a formal opinion letter on what this unique business model is to all those agencies also they will stay retained to further guide us in all decisions and therefore before any negative allegation happen we will have high ground… this law firm and those that stepped forward will say how this business is going to be restructured and reworked. The old management will not be a part of this Zeek 2.0 at all. But the business model will be copied, with some changes and we will get paid to advertise again.

Also we are in contact with a media community that will be in place shortly with online forums and positive input moving forward so that all people can be in touch with what is happening. This way the masses can get answers. Now I have a question and a statement to all of you…..Do you realize that there have been a handful of people working day after day to get this done? and how many about 16, and how many affiliates are on this fb page. Do you think we are able to do it all?…Statement: We have done a great thing here….with little to no help. With allot of complaints. In the end if this helps those who still want a profitable home business and those that are counting on us to help them help their selves….then I will sleep.

Sheron September 8, 2012 - 01:46

This answered quite a bit of my questions, but if Dawn and the rest of them did not know and were not guilty in some form why are they hiding? Why have they not tried to reach out and clear their names?

The SEC claims that the money being paid out was the money of new investors because the profits from the penny auctions were not enough to pay out up to 50% of the daily profits. They had to know they were paying out more than they were taking in, didn’t they? They had to know what the profits were from the penny auctions.

I know you said a week before hand that Dawn was still making plans for the Red Carpet Event, which leads one to believe that she had no idea the scene was erupting. Honestly part of me believes some of the details listed in that fake confession and that some people knew something. Bids that gives came out at convient time and suggestions to move there by up lines or join there just makes me now suspicious more than ever.

I just want my money back and I want to move on with my life, I want to see the guilty pay for their mistakes, and I just want to know the truth.

They only way to get money is to work for it, if it sounds to good to be true it definitely is.

Troy Dooly September 8, 2012 - 08:54

@Sheron,

I am not sure Dawn is hiding anywhere. I know she has been visiting her attorneys at time in Florida. Preparing for her marriage and living her life as normal as she can waiting to receive subpoena from one of the lawsuits or an indictment which might still be handed down from the DOJ or from a Grand Jury which might be meeting reviewing all the documents in this case.

She like everyone else involved in this case, (well except for Roger who is fighting inoperable cancer) have all been told by their legal teams NOT to make any public statements. And I only know of one person who is actually in hiding at this time.

Since I do not know all the numbers the SEC is using, I can’t answer that. But at no time did they payout more than they were taking in. According to the SEC complaint they were within $2 million dollars of the company collapsing on itself. But numbers I have been told, the SEC was off by tens of millions on the amount of money the company was taking in monthly. Without reviewing the evidence I can’t say for sure.

If it is a fact Paul did pull the numbers out of his butt daily, and if it is true they were within $2 million of collapsing, then it would make sense someone should have realized we need to do something.

Alex September 8, 2012 - 12:12

You can find Dawn here: blog at http://www.hippiedivamemoirs.com/ or want to contact her http://www.savagetraders.com/contact.htm

Troy Dooly September 8, 2012 - 14:58

@Alex,

The blog has not been updated since May of 2011 and the emails are old at the Savage Traders site.

Dan Nguyen September 8, 2012 - 13:50

It is hard to believe that Dawn and other executives didn’t know the scheme that Paul had been doing for all these years. This is purely accounting 101. It just makes me wonder what the hell they were doing??? They were probably bought out by Paul to shut up…

tom September 8, 2012 - 01:37

Oh so lets get something right here, so the government was telling the company to keep it cool so no-one would pull there money out, why is that, so they could put all these extra millions of dollars in there pocket, but there protecting us, give me a break, our gov. is so corrupt!!!

Troy Dooly September 8, 2012 - 08:57

@Tom,

I gave this some thought. And if this turns out to be 100% true, then I believe the SEC should not cash any of the checks or money orders they received from the time they purportedly told Caldwell not to do anything that would cause people to get scared.

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept The Rest Of The Story