URGENT >> BULLETIN >> MOVING: Ira Lee Sorkin, Bernard Madoff’s Attorney, Files Motion For Clients Who Are Potential Clawback Targets For More Than $1.56 Million In Zeek Case

URGENT >> BULLETIN >> MOVING: (3RD UPDATE 11:33 P.M. ET (U.S.A.) Famed defense attorney Ira Lee Sorkin is seeking pro hac vice admission to practice in U.S. District Court for the Western District of North Carolina on behalf of two prospective clawback targets in the Zeek Rewards Ponzi scheme case.

Sorkin is with Lowenstein Sandler PC in New York. He perhaps is best known as Ponzi schemer Bernard Madoff’s defense counsel. Sorkin also is the former head of the SEC’s New York regional office.

Sorkin’s clients are Zeek affiliates Trudy Gilmond and Kellie King, and Sorkin is arguing that Zeek did not sell securities and that the receivership should be dissolved.

Gilmond is the prospective target of a clawback action for more than $1.364 million, with receiver Kenneth D. Bell asserting she put in only $3,105, according to Sorkin’s motion. King potentially faces a claim from Bell for more than $205,180 after paying in only $1,492, Sorkin said in the filing.

Sorkin, according to a separate motion, also contests how the receiver issued subpoenas and is opposing a motion late last month by Dallas attorney Michael J. Quilling to be appointed “examiner.”

Quilling sought “to represent the collective interests of the Affiliates and all creditors of the receivership estate” and desired to “be compensated out of the receivership estate,” Sorkin argued.

But that should not be permitted to happen, Sorkin contended.

From Sorkin’s motion (italics added):

It is quite clear from the Receiver’s Preliminary Liquidation Plan and the defective subpoena issued to Ms. Gilmond that Qualified Affiliates have inherently conflicting positions as to one another, and thus cannot be jointly represented. To illustrate, it is in the interests of a Qualified Affiliate who is a “net-winner” to challenge the Receiver’s authority to clawback funds because the Receiver intends to use the “net-winner’s” money to pay net-losers. To the contrary, it is in the interests of a Qualified Affiliate who is a net-loser to support the Receiver’s efforts because the Receiver will take money from the “net-winner” and distribute it to the “net-loser” Qualified Affiliate. As such, an Examiner cannot be appointed to represent all of the Qualified Affiliates because the Examiner would have clients with inherently contradictory positions as to one another.

The motion by Sorkin potentially puts Gilmond and King at odds with positions taken by Quilling clients and potential Zeek clawback targets Dave Kettner, Mary Kettner and David Sorrells. The Kettners and Sorrells, for example, moved to have Quilling appointed examiner.

The Kettners and Sorrells potentially have a combined clawback exposure of nearly $2 million, according to court filings.

Zeek records, according to letters from Bell cited by the trio, suggest Sorrells received $945,539 from Zeek while paying in only $1,695. Dave Kettner received $537,577.95 while paying in only $1,378, and Mary Kettner received $465,866.67 while paying in only $1,495.

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9 Responses to “URGENT >> BULLETIN >> MOVING: Ira Lee Sorkin, Bernard Madoff’s Attorney, Files Motion For Clients Who Are Potential Clawback Targets For More Than $1.56 Million In Zeek Case”

  1. Just two more parasites/profiteers that want to keep stolen money.Unfortunately for them the noose is coming and one size fits all. I just hope they spend much money on attorney fees before the noose hangs them. The Messiah warned about the love of money. Nothing has changed, but justice will prevail. Judge Mullen and Mr. Bell have my full support.

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  2. Trudy Gilmond seems to have promoted a cash gifting “program” called “Cow Frinzi Club” back in 2010.

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  3. bob mercer: Just two more parasites/profiteers that want to keep stolen money.Unfortunately for them the noose is coming and one size fits all.I just hope they spend much money on attorney fees before the noose hangs them.The Messiah warned about the love of money.Nothing has changed, but justice will prevail.Judge Mullen and Mr. Bell have my full support.

    I bet if the table were turned your tone would not be the same.

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  4. Tony H: Trudy Gilmond seems to have promoted a cash gifting “program” called “Cow Frinzi Club” back in 2010.

    More than just promoted, Tony. Her long-time partner Kala Taylor was handling the money there for the owner, Ponzi-style, in the “Cow-Op” that developed out of Cow Frinzi. And both of them were involved in the gifting pyramid Connecting Us All.

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  5. Zeek Rewards Ponzi participant: “Where’s my money???”

    Zeek records, according to letters from Bell cited by the trio, suggest Sorrells received $945,539 from Zeek while paying in only $1,695. Dave Kettner received $537,577.95 while paying in only $1,378, and Mary Kettner received $465,866.67 while paying in only $1,495.

    There it is.

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  6. Oz: Zeek records, according to letters from Bell cited by the trio, suggest Sorrells received $945,539 from Zeek while paying in only $1,695. Dave Kettner received $537,577.95 while paying in only $1,378, and Mary Kettner received $465,866.67 while paying in only $1,495.

    Hi Oz,

    Here is what we know about the approximate math. The receiver has sent out about 1,200 subpoenas to a first subset of alleged winners.

    To date, six of the alleged winners publicly have revealed their names. Those individuals allegedly received a combined sum of about $4 million — on average, about $666,000 apiece.

    The receiver has said that the subset of 1,200 winners averaged about $100,000 each, so the first subset pot may be about $120 million. [Sum edited by Admin on Dec. 19, 2012, to correct error.]

    A much larger subset of winners — perhaps numbering 100,000 — appears to exist. I’d venture that one or more of the winners from either subset had ancillary, Zeek-related businesses — selling “leads” or “customers,” for instance.

    Patrick

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  7. Oz: Zeek Rewards Ponzi participant: “Where’s my money???”

    Test plugin.

    Patrick

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  8. I do not think Paul Burks operated alone when ZeekRewards was formulated. I hope Paul sings loud and clear so if there are others involved, they can be dealt with accordingly. This is going to be a long hard battle (right vs wrong), but very, very interesting.

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