CEP Receiver Settles With 14 Ponzi Scheme Participants

The receiver in the CEP Ponzi scheme case has filed court papers to settle adversary proceedings against 14 participants who profited in the scam.

In court since July 2007,  the case is not fully settled. Litigation against other participants is ongoing. Dozens of lawsuits were filed against CEP members.

Settlement terms for the group of 14 appear to be generous.  Although each of the participants must hand over cash earned from the scheme, the proposed settlement amounts are only a percentage of what the receiver sought initially.

The receiver, forensic accountant William Perkins, has been working on the case since the beginning. CEP was accused by the Securities and Exchange Commission of running an autosurf Ponzi scheme that collected millions of dollars.

One CEP participant, for instance, will pay  $18,400 to settle a claim of $57,806, under the terms of the proposed settlement. Another will pay $20,000 to settle a $45,736 claim.

Settlement amounts were reached after negotiations with individual participants. No universal formula was applied, meaning some participants will pay a higher percentage of their gains and some will pay a lower percentage. One person who received $140,612 from CEP, for example, will pay $10,000 under the settlement.

Liberally viewed, the proposed settlement amounts seem small. But some CEP participants have declared bankruptcy. Others have had to sell their homes to return ill-gotten gains. All of them were thrust into a prolonged court battle because of their CEP participation.

AdSurfDaily, itself an alleged Ponzi scheme, once advertised it accepted payments from CEP Trust, the failed payment processor operated by the principals in CEP, Trevor Reed and Clayton Kimbrell.

View the proposed CEP settlement.

Under the proposed settlement, any person who fails to pay the settlement amount will be subjected to a judgment in the amount of their ill-gotten gains from CEP. Perkins sued to recover “preferential and fraudulent transfers” — in other words, the “profit” participants received from the Ponzi scheme.

About the Author

8 Responses to “CEP Receiver Settles With 14 Ponzi Scheme Participants”

  1. I’m outraged at at least two of the proposed settlements and almost want to file an Amicus curiae protesting the proposed settlements with Troy Winters and Shad Foss. Both are getting ready to walk away with very generous settlements and both are notorious ponzi fund promoters responsible for millions in losses to other people in various scams. ‘Pastor’ Tory Winters is local to me and the mischievous imp in me is half tempted to drop by church this Sunday and put a copy of the order under the wipers on every windshield in the parking lot. I have heard he pimps these scams in the sermon on Sunday, and if I had good proof of it I’d be bringing that to the attention of the IRS. (by the way, I certainly hope someone informs the IRS about the forgiven debts here, that’s taxable income) Mr. Foss, on the other hand has a website where he brags about how much he makes in the various programs he pimps, and yet he’s crying poverty to Mr. Perkins. I believe Foss was mentioned in relation to ASD as well as Oceanside Wealth among others. Have we sunk so far that the Federal Courts are giving breaks to people who openly brag about committing felonies online?

    Glad to see some money going back, but all in all, these settlements sicken me for the lost opportunity they represent.

      (Quote)

  2. I couldn’t agree with you more Gregg. From early reports it seemed they were going to take a hard line against these promoters. Now it seems that is not the case. I hope those who were in CEP promoting it, and also were promoting ASD get the book handed to them in the ASD case. Until someone has to pay, and pay dearly for these crimes, they will continue to proliferate unabated. Heck, almost all of the promoters in ASD were either in Megalido, joining AVG, AGW or BSD, or all of them.

    Maybe we need to get some tough receiver’s appointed in these cases and ones who will not settle for peanuts but real dollars.

      (Quote)

  3. “Ditto” to both of you.
    It is an unfortunate thing that between the court system being bogged down to the point of untimely justice, if any is exacted at all,….and the receiver apparently not aggressively interested in “receiving”,…if example is any lesson to learn from, another travesty is in the making – and about to leave tens-of-thousands in it’s wake.

    Personally, I do not find it surprising that a large majority of the “winners” have NOTHING to show for themselves. They pursued fast money and spent it with equal speed. They are not “business professionals” they just want to ‘get-rich-quick’. Easy come, Easy go.

    I am sure the reason behind the LOW settlement is not “complacency” as much as it is the old…”you can’t get blood out of a turnip”..philosophy.

    And, in all fairness, there ARE some “winners” in scams,..that didn’t know THEY were part of a scam until it all fell apart. And they never intended to profit on the pain of others. They were also victims, but victims who benefited. Unfortunately, ignorance in such cases is not bliss, and does not absolve them from the consequences. Just as they embraced the benefit of winning – they must embrace the hardship of losing.

      (Quote)

  4. I agree with Gregg. Those settlements are far too low. I hope that the judge rejects the settlements and that those who have profited the most will be forced to pay back every penny in some way or another. If the money is not available, they should be made to do community service and/or should be deducted from any future wages.

    Those settlements are hardly a disincentive to promote these fraudulent and criminal ponzi schemes. The likely hood of these ponzi pimps getting caught is low, and when they do get caught they only have to pay back a fraction of their illegal profits.

    Gregg, the mischievous imp may want to consider writing a letter to the local press. A local paster promoting illegal activity and being mentioned in court documents could be just the local interest story that would appeal to the local press.

      (Quote)

  5. Well, as disappointing as this settlement is, at least in the ASD case the recovery fund is starting at $93 MM, if the government chooses that path. Other large winners are VERY publicly known, such as Mindy Bales in Des Moines, IA. The various forums also are good sources of information. I am pretty sure the government will have a pretty good handle on where to look. Gregg/Lynn, are there many known instances of the folks in CEP suing their uplines successfully? Will we see much of that in ASD? It seems like the government’s approach thus far is strongly encouraging that tactic, while holding their criminal charges for later.

      (Quote)

  6. I’m a victim of asd. a simple family man that got taken. i’m searching the web for any inormation on how to recover my stolen, siezed, (or whatever anyone is calling it),money i have lost in this mess.nothing but witnessing “volley” with my money. does anyone know of where i can get help, or where/who to turn to that is on the “victims” side?
    This is sounding like a coop money game that the courts and scam artists are in together to just steal everyone’s money, split it, and continue on to the next. over and over……
    good lord i hope i’m wrong, and there are still some fair, honest people left in this world.
    sorry to be so dark, but i really need some help, along with some 120,000 others, in how to handle this.

      (Quote)

  7. What about Fred Damron who received $443,484.00 profit from the scam? He isn’t mentioned!

      (Quote)

Leave a Reply