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.

Today, the receiver has filed several Motions for Orders to Show Cause for Cashiers Checks as follows:

• moves the Court for an Order directing Peoples Bank of Alabama (“Peoples Bank”) to turn over $30,000.00 in funds that are proceeds of three (3) Peoples Bank cashier’s checks payable to RVG drawn on bank account #*****8498, routing #620XXXX which were on August 17, 2012 and are today Receivership Assets, or, alternatively, directing Peoples Bank to appear and show cause why Peoples Bank should not be charged with contempt for violation of the freeze order.
• moves the Court for an Order directing Chino Commercial Bank, N.A. (“Chino Commercial”) to turn over $10,000.00 in funds that are proceeds of one (1) Chino Commercial cashier’s check payable to RVG drawn on bank account #***0075, routing #12224XXXX, which was on August 17, 2012 and is today a Receivership Asset, or, alternatively, directing Chino Commercial to appear and show cause why Chino Commercial should not be charged with contempt for violation of the freeze order.
• moves the Court for an Order directing Valley National Bank (“Valley National”) to turn over $29,000.00 in funds that are proceeds of five (5) Valley National cashier’s checks payable to RVG drawn on bank account #*****7490, routing #02120XXXX which were on August 17, 2012 and are today Receivership Assets, or, alternatively, directing Valley National to appear and show cause why Valley National should not be charged with contempt for violation of the freeze order.
• moves the Court for an Order directing Northwest Georgia Bank (“Northwest Georgia”) to turn over $11,500.00 in funds that are proceeds of four (4) Northwest Georgia cashier’s checks payable to RVG drawn on bank account #*****8990, routing #06110XXXX which were on August 17, 2012 and are today Receivership Assets, or, alternatively, directing Northwest Georgia to appear and show cause why Northwest Georgia should not be charged with contempt for violation of the freeze order.

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

True to form, Zeek receiver, Kenneth D. Bell, is pursuing a group of banking institutions who have failed to transfer Receivership assets, including cashiers checks.

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

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:

1. 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.
2. 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.
3. Mr. Edmundson shall serve as Class Counsel until further order of the Court.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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.
10. 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.
11. This Court shall retain jurisdiction over any action filed against Class Counsel based upon acts or omissions committed in his representative capacity.
12. 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.
13. 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.
14. 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.

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

I will just post it here. Why she thinks that telling a Court Clerk not to enter documents into the record would actually work is mind-gobbling.

The Order below originates from a posting on Facebook. I have no idea why people post things on the internet without realizing that one day, it may come back to haunt you, and never goes away even if you delete it. Sometimes, braggadocio doesn’t work out so well. And, it’s a bit silly to think the Feds are not watching the serial promoters. Here’s what the receiver had to say:

“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.”

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!”

Judge Mullen agreed with the Receiver and issued the Order:

THIS MATTER is before the Court on the Receiver’s Motion for Order Requiring Return of Receivership Property, Deposition, and Production of Records. The Court has considered the Receiver’s Motion and finds in its equitable discretion that the measures requested are appropriate.
It is, therefore, ORDERED, that Darryle Douglas shall:

1. return the ZeekRewards affiliate database along with all copies of such database to the Receiver  and cease using it;
2. submit to a deposition by the Receiver at a mutually convenient time and location no later than September 24, 2015; and
3. produce to the Receiver all financial records from November 1, 2011 to the present for his personal and business-related accounts prior to such deposition.

Wow, that’s a lot of money!!

Yep, you heard me… Kenneth Bell has filed a civil suit with Gerald Nehra and Richard Waak named as defendants; the Law Offices of Nehra and Waak are also named as defendants.  This suit was filed on September 21, 2015.

The Complaint begins by stating that Nehra and Waak “served as legal counsel to RVG from June 2011 until August 2012, when RVG was placed into receivership. This lawsuit is one of several steps the Receiver is taking pursuant to his court-ordered duties to the Receivership Estate to recover damages for the harms incurred by RVG.”

Due to their knowledge of RVG and Zeek, and their legal expertise, Nehra and Waak “knew or should have known that RVG was perpetrating an unlawful scheme which involved a pyramid scheme, an unregistered investment contract and a Ponzi scheme.”

It goes on to say that “Despite this knowledge, Nehra and Waak encouraged investors to participate in the scheme by knowingly allowing their names to be used in providing a false façade of legality and legitimacy and gave improper legal advice that allowed the scheme to continue far longer than it would have without the Defendants’ support. Nehra and Waak’s improper and negligent actions, which breached their fiduciary duties to RVG and assisted RVG’s Insiders to breach their fiduciary duties, caused significant damage to RVG.”

I have added this new case to the Files Website, click here to see the Complaint.

Kenneth Bell, Receiver for RVG, “respectfully submits this Motion for Order Requiring Darryle Douglas To Personally Appear and Show Cause.”

Mr. Douglas has refused to make himself available for a deposition and provide related documents, despite the Court’s specific Order of September 14, 2015, requiring him to do so. The Receiver respectfully requests that the Court order Mr. Douglas to personally appear in court no later than November 6, 2015, and show cause as to why Mr. Douglas should not be held in contempt for failure to comply with a Court order.

On September 14, 2015, the Court ordered that Darryle Douglas (right) do the following:

1. return the ZeekRewards affiliate database along with all copies of such database to the Receive and cease using it;
2. submit to a deposition by the Receiver at a mutually convenient time and location no later than September 24, 2015; and
3. produce to the Receiver all financial records from November 1, 2011 to the present for his personal and business-related accounts prior to such deposition.

Pursuant to the Order, the Receiver’s council contacted Mr. Douglas’ purported counsel, Patrick Roberts, to ensure that Mr. Douglas had received the Order

On September 18, 2015, counsel for the Receiver had a call with Mr. Roberts to discuss compliance with the Order and sent a follow-up email with the Order.

 
On September 24, 2015, counsel for the Receiver sent another email notifying Mr. Roberts that Mr. Douglas had not yet submitted to a deposition or turned over the records as ordered by the Court. Counsel for the Receiver further advised that the Receiver would need to notify the Court of Mr. Douglas’ non-compliance with the Order. Mr. Roberts indicated he had provided the Order to Mr. Douglas along with contact information of Receiver’s counsel for setting up the deposition.

But wait, it gets even better: (emphasis added)

In October, counsel for the Receiver was contacted by attorney Sam Randall, Douglas’ new attorney. Mr. Randall notified the Receiver’s counsel that Mr. Douglas was arranging to travel to Charlotte, NC for the deposition. October 20 and 21 were the agreed dates.

 

 

Then, on October 19, 2015, counsel for the Receiver learned from Mr. Randall that Mr. Douglas would not be in Charlotte for the deposition as agreed. Mr. Randall indicated that the reason Mr. Douglas would not appear is that “[h]is driver’s license was taken and he cannot get on the plane.”

 

 

This excuse is dubious at best because a simple search of the U.S. Department of Homeland Security, Transportation Security Administration’s (TSA) website, states that “[i]n the event you arrive at the airport without proper ID, because it is lost or at home, you may still be allowed to fly,” and then details alternate forms of ID.

OMG, are you serious?? “My dog ate my homework” is almost more believable!

As of the time of filing this motion, Mr. Douglas has failed to comply with the Court’s Order to submit to a deposition, produce the financial records, and return the ZeekRewards affiliate database. Accordingly, the Receiver is left with no choice but to move the Court for a motion for an order requiring Darryle Douglas to personally appear and show cause as to why he should not be held in contempt for violating the Court’s Order.

I saw this listed on the Bell v Parker case, 3:14-cv-00444, a civil suit against the Canadian alleged “net winners”. Kenneth D. Bell, receiver for RVG, LLC, has filed a request for extension of time within which to file a Motion for Summary Judgment in the Bell v Parker case.

Mr. Bell is wanting to wait until the Court has made a ruling on the Motion for Summary Judgment in the related case of Bell v Disner, et al., 3:14-cv-00091.  The Receiver intends to file a Motion for Summary Judgment in Bell v Parker upon close of discovery in the Disner case.

The Court has issued an ORDER as follows:

Upon consideration of the Motion for Extension of Time to File a Motion for Summary Judgment until such time that the Court rules on a Summary Judgment in a related case, Bell v. Disner, et al., 3:14-cv-00091, and for good cause shown, IT IS ORDERED, ADJUDGED AND DECREED that The Receiver’s Motion is GRANTED

Darryle Douglas

US District Judge Graham Mullen has issued an ORDER today for Darylle Douglas to “personally appear in the Western District of North Carolina on December 3, 2015, at 3:30 PM and show cause as to why Mr. Douglas should not be held in contempt for failure to comply with the Court’s Order of September 14, 2015.”

Douglas was Ordered to appear in person on September 14th to do the following:

1. return the ZeekRewards affiliate database along with all copies of such database to the Receiver  and cease using it;
2. submit to a deposition by the Receiver at a mutually convenient time and location no later than September 24, 2015; and
3. produce to the Receiver all financial records from November 1, 2011 to the present for his personal and business-related accounts prior to such deposition.

Douglas’s lawyer put forth the excuse that his drivers license was “taken” and that he could not get on the plane to get to Court.

The Plaintiff responded: This excuse is dubious at best because a simple search of the U.S. Department of Homeland Security, Transportation Security Administration’s (TSA) website, states that “[i]n the event you arrive at the airport without proper ID, because it is lost or at home, you may still be allowed to fly,” and then details alternate forms of ID.

(See http://asdupdates.com/wordpress/archives/6772 for more information on this.)

Douglas was also the subject of another Court Order in early September 2015 related to the Receiver’s Motion for Default Judgment by Clerk of Court being Granted, thereby allowing Kenneth Bell to recover from Darryle Douglas the sum of Two Million Two Hundred Seventy-One Thousand Two Hundred Thirty-Nine Dollars and Twenty Cents ($2,271,239.20), which consists of One Million Nine Hundred Seventy-One Thousand Three Hundred Seventy-Four Dollars and Twenty-Seven Cents ($1,971,374.27) in principal and Two Hundred Ninety-Nine Thousand Eight Hundred Sixty-Four Dollars and Ninety-Three Cents ($299,864.93) in prejudgment interest from August 15, 2012 to July 10, 2014.

ANNOUNCEMENT FROM THE RECEIVER – November 5, 2015

On September 11, 2015, Judge Graham Mullin entered a Consent Order Appointing Class Counsel appointing Kevin Edmundson, counsel for several of the large named net winner defendants, to represent the Net Winner Class defendants previously certified by the Court in Bell v. Disner, et al., Civil Action No. 3:14-dv-91 (W.D.N.C.) (See Notice of Certification of Defendant Class Action). As instructed by the Court, Mr. Edmundson will be communicating with the Net Winner Class primarily through a website and collective emails. He has now set up a website for that purpose, which can be found at http://www.zeeknetwinnerclass.com.

Achieve Community

• Kristine Johnson – 15-cr-158 (WDNC) – The majority of docket entries are sealed by the Court. In June 2015, Johnson entered into a Plea Agreement (also sealed), sentencing was set for November 19. Forfeiture of moneys (over $7,301,255 ) and property ordered on November 10th.
• Troy Barnes – 15-cr-254 (WDNC) – Case filed October 22nd, 4 Felony Counts; Trial was originally set for 30 days following arraignment; Motion to Continue was granted, Trial set for January 19, 2016.
• SEC v Johnson, et al – 15-cv-299 (Colorado) – Trial set for December 5, 2016, at 8:30 a.m. United States Courthouse Annex, 901 19th Street, Denver, Colorado 80294

DFRF Enterprises, Inc.

• SEC v DFRF Enterprises, Inc – 15-cv-12857 (Massachusetts) – On October 10, 2015, the SEC filed a ‘Motion to Intervene and Stay Discovery’ pending the resolution of a parallel criminal investigation.  The case was Ordered as Stayed on October 23, 2015.
• USA v Filho – 15-cr-10214  (Massachusetts) – Case was filed August 5, 2015. Initial appearance was on September 3, 2015. Filho was remanded into custody. At the initial status conference on October 8, 2015, the defendant, represented by counsel, elected to voluntarily consent to detention without prejudice.  (the defendant was committed to the custody of the Attorney General for confinement in a corrections facility separate, to the extent practicable, from persons awaiting or serving sentences or being held in custody pending appeal)

eADGear / GoFunPlaces

• USA v Wang, et al – 14-cr-488 (NDCal) – Both Wang and Yuen pleaded Guilty, judgement was ordered on October 27th; both men were sentenced to 46 months, and 3 years of supervised release.

Profitable Sunrise / Inter Reef, Ltd

• SEC v Inter Reef, Ltd. – 13-cv-1104 (Northern Georgia) – This case has been static since July 2015. The last Order issued was for the repatriation of funds from a European Bank

TelexFree

• USA v. Wanzeler et al – 14-cr-40028 (Massachusetts) – Due to the complexities of this case, things are progressing slowly. So far, 6 status conferences have been held, with another one prior to the scheduled trial date set for April 4, 2016. Carlos Wanzeler is still outside of the USA.
• SEC v TelexFree, Inc., et al – 14-cv-11858 (Mass.) On October 8th, an Order was issued Granting the USDOJ’s Motion to Intervene and Stay Discovery pending the resolution of a parallel criminal proceeding. Fourth Status report was issued on October 15th.

USFIA

• SEC v. Steve Chen et al – 15-cv-7425 – (Central Cal) Preliminary Injunctions, Asset Freezes, Receiver Appointed, Restraining Orders and Required Accounting are issued on October 8th.

Vemma Nutrition Company

• FTC v. Vemma Nutrition Company et al – 15-cv-1578 (Arizona) On October 28th, an Order was issued Denying defendant’s Motion to Approve Revised Compensation Plan. The FTC is also opposing Vemma from using “Affirmative Defenses”.

Zeek Rewards

• SEC v Rex ventures, et al – 12-cv-519 (WDNC) – Currently, the receiver, Kenneth Bell is still marshaling funds he has collected from a portion of “net winners”. The claw backs continue. Checks have been issued twice to approved claimants.
• USA v Olivares, et al – 13-cr-335 *closed* – (WDNC) Dawn Wright-Olivares and Daniel Olivares pleaded guilty. Final judgements entered on February 28, 2014.
• USA v Burks, et al – 14-cr-208 (WDNC) – After 3 Motions to Continue, a Court for a peremptory trial setting was requested for November 2015. A fourth Continuance was granted, trial is now set for the May 2016 term.
• Bell v Burks, et al – 14-cv-89 (WDNC)  Default judgement entered against Defendant Darryle Douglas for $2,271,239.20
• Bell v Disner, et al – 14-cv-0091 (WDNC) –
  • Default judgment entered for Defendants Trudy Gilmond and Trudy Gilmond LLC in the amount of $2,129,522.27.
  • Default Judgment entered against Defendant Sorrells in the amount of $1,197,241.12.
  • Order approving Class Counsel for Net Winners,  Kevin Edmunson .
• Bell v Nehra, et al – 15-cv-437 (WDNC) – Malpractice lawsuit, Nehra was Zeek’s “Compliance Officer”, also a “prominent MLM attorney”.

USA v Sanderley Rodrigues de Vasconcelos (TelexFree and iFreeX)

• 15-cr-10227 – (Mass.) – Rodrigues is charged for Visa Fraud, falsifying documents in order to enter the USA. His first lawyer quit for non-payment. Rodrigues has a second attorney now, but for how long?

The newest entry on the over 4 year old Civil Case was this:

Minute Entry: SHOW CAUSE HEARING held before Senior Judge Graham Mullen. Receivers attorneys: Matthew Orso, Irving Brenner, Ken Bell. Court reporter: Laura Andersen. (jde)

That’s all that was mentioned about this Hearing, which was a result of this Order from Judge Mullen:

For good cause shown, it is ORDERED that the Receiver’s Motion is GRANTED and Darryle Douglas is hereby ORDERED to personally appear in court in the Western District of North Carolina on December 3, 2015, at 3:30 PM and show cause as to why Mr. Douglas should not be held in contempt for failure to comply with the Court’s Order of September 14, 2015.

Perhaps there will be a more detailed entry early next week.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23421 / December 8, 2015

Securities and Exchange Commission v. Trudy R. Gilmond, U.S. District Court for Western District of North Carolina (Civil Action No. 3:15-CV-00591)

SEC Charges ZeekRewards Pyramid-Ponzi Scheme Promoter

On December 4, 2015, the Securities and Exchange Commission filed suit in the United States District Court for the Western District of North Carolina against Trudy R. Gilmond for her participation in the fraudulent unregistered offer and sale of securities through Rex Venture Group LLC d/b/a ZeekRewards.com, an internet-based combined Ponzi and pyramid scheme. According to the Complaint, from approximately January 2011 until August 2012, when the ZeekRewards website was shut down, Rex Venture Group raised more than $850 million from approximately one million internet customers nationwide and overseas through the website.

The Complaint alleges that Gilmond solicited investors through the Internet and other means to participate in the ZeekRewards program, a self-described “affiliate advertising division” for the companion website, Zeekler.com, through which the company operated penny auctions. The ZeekRewards program offered customers several ways to earn money, two of which – the “Retail Profit Pool” and the “Matrix” – involved purchasing securities in the form of investment contracts. These securities offerings were not registered with the SEC as required under the federal securities laws.

According to the Complaint, Gilmond and others lured investors to ZeekRewards by promising investors a share of the company’s daily net profits in the form of daily profit share awards. The company’s purported calculations consistently resulted in daily award averaging approximately 1.5 percent per day, fraudulently conveying the false impression that the company was extremely profitable. In fact, the daily award percentage was fabricated and investor payouts bore no relation to the company’s net profits. Approximately 98% of ZeekRewards’ total revenues and the “net profits” paid to investors were comprised of funds received from new investors in classic Ponzi scheme fashion. When the company was shut down in August 2012, it was teetering on collapse.

The Complaint further alleges that Gilmond was one of the most successful and prolific promoters of ZeekRewards. From at least September 2011 until ZeekRewards was shut down in August 2012, Gilmond worked closely with the company founders and served as a senior “field liaison” to promote the scheme, persuading scores of unsophisticated retail investors to buy ZeekRewards securities upon the promise of profit sharing. Gilmond also helped conceal from investors and regulators the true nature of the ZeekRewards scheme. She policed affiliate advertisements and communications to ensure they did not use investment-related terms that otherwise may have triggered regulatory scrutiny. Gilmond reaped more than $1.7 million in transaction-based commissions and bogus profit-sharing for her recruiting efforts.

The Commission alleged that Gilmond offered and sold securities in violation of the registration provisions of Section 5 of the Securities Act, acted as an unregistered broker-dealer in violation of Section 15 of the Exchange Act, and violated the antifraud provisions of the Section 17 of the Securities Act. The Complaint requests a permanent injunction, disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties.

The SEC’s investigation is continuing.

SEC Complaint

http://www.sec.gov/litigation/litreleases/2015/lr23421.htm

Douglas

Alleged “Net winner” Darryle Douglas is in some trouble with the Court following his failure to appear, as Ordered, at a Show Cause Hearing held on December 3rd. The Hearing was for him to show cause why he should not be found in contempt of a Court order issued on September 15, 2015 which required him to return to the Receiver the Zeek Rewards database in his possession, to produce certain financial records, and to submit to a deposition by the Receiver..

The Court was satisfied that Douglas (right) had received the September 15th Order and that he has violated that Order. The Court also found that: (emphasis added)

“the Receivership has suffered and will continue to suffer harm because of Mr. Douglas’ violation of the Order. Mr. Douglas was previously found liable for more than $2 million to the Receivership in the form of fraudulent transfers and prejudgment interest, and under the Agreed Order in this matter, these are Receivership Assets belonging to the Receivership Estate. Mr. Douglas’s failure to return the database and these Receivership Assets not only harm the Receivership, but they also violate the Agreed Order in obstructing the Receiver’s efforts.

It is, therefore, ORDERED, that Darryle Douglas is in civil contempt for violation of this Court’s Order.

It is further ORDERED that Mr. Douglas shall be incarcerated until he agrees to comply in full with the Court’s Order dated September 15, 2015.

The United States Marshal is hereby DIRECTED to issue and execute a warrant for Mr. Douglas’ arrest and incarceration until he can be brought before this Court and until he agrees to comply with the Order in question.”

Kenneth Bell, the Zeek Receiver, is asking the Court to approve a Settlement agreement to resolve the civil case filed against Gerald Nehra, paid legal compliance mouthpiece for sanitizing alleged Ponzi schemes. The Motion starts like this: (emphasis added)

“Following settlement discussions, the Parties have entered into a Settlement Agreement with the effective date of December 8, 2015 for the purpose of resolving this matter and to avoid the cost and expense of further litigation. The Receiver believes this settlement, which recovers $100,000 for the Receivership estate based on the defendants’ financial condition and includes a Confession of Judgment for $100 million and an acknowledgement that “RVG in fact operated an unlawful Ponzi and pyramid scheme,” is in the overall best interests of the victims of the scheme and in fulfillment of the Receiver’s duties.”

The Motion goes on to mention the “Likelihood of Success and Complexity of Litigation”, the “Difficulty of Collection”, and that “Settlement is in the Best Interests of Victims”.

Accordingly, the RVG Receiver respectfully requests the Court enter an order approving the Settlement Agreement attached as Exhibit 1, authorizing the RVG Receiver to perform according to the terms of the Settlement Agreement and granting such further and other relief as the Court deems just and equitable.

Respectfully submitted this 11th day of December, 2015

Here is a link to the Settlement Agreement  Exhibit 1 .

In much the same style as her previous “Pro Se” filing, in the form of “sovereign citizen” rhetoric, Katherine Parker of Ontario, Canada has filed her notice of “Fraudulent Process”. Yeah, it’s fairly standard nonsense used by these folks, and starts out like this:

This is an often used argument by these folks, ‘let’s stress whether words should be capitalized or not’, as it makes all kinds of difference to the actual meaning of the words, if only to them for the sake of arguing about it.

Yep, the Court Clerk always answers questions about his Oath of Office. If only tepidly arguing with a federal court actually worked.

Next, Parker asks yet another barrage of inane questions such as ‘Is this claim against me in my private capacity, or some representative capacity, or in the capacity of a trustee of an undeclared trust, or in the capacity as a beneficiary of an undeclared trust, or in the capacity of an agent of an undeclared trust?’  I wonder if she left anything out?

Then we have this added absurdity-

1. I do not consent to contract in the unrecognized at law court that you filed this matter in,
2. If you have a lawfully valid claim with a harmed man or woman in a lawful common law court and wish to bring me into a lawful court, I will accept and participate in a common law court process if it is a court where common law and equity is heard and recognized,
3. if you are trying to take me to a court other than common law or equity, I do not consent,
4. If you continue to pursue this matter which appears to be fraudulent then I will be compelled to file a formal complaint against you as Clerk, defined in 28 USC 751.

She gives the Clerk 3 days to contact her and to enter into “good faith discussions”.  The document was filed onto the docket on December 10th and was sent on December 7th.

I believe the 3 days are up, Ms. Parker. Let’s see what good going after the Court Clerk does for you.