URGENT >> BULLETIN >> MOVING: New Filings By SEC Suggest Zeek Probe Began In April 2012 Or Earlier; Agency, Receiver Oppose Motions To Intervene By Possible Clawback Targets

breakingnews72UPDATED 9:46 A.M. ET (JAN. 13, U.S.A.) New court filings by the SEC in the Zeek Ponzi scheme case in the Western District of North Carolina strongly suggest that the Zeek probe was under way at least by April 17, 2012. On that date, according to the filings, an IT specialist for the SEC was tasked by the agency’s Division of Enforcement to “conduct Website/video capture” of ZeekRewards.com.

Four months to the day later — on Aug. 17, 2012 — the SEC alleged in federal court that Zeek was a $600 million Ponzi- and pyramid fraud operating from Lexington, N.C.  Left unanswered in today’s filing is the question about precisely when Zeek operator Paul R. Burks first was contacted by the agency and when he began to cooperate by providing records.

Burks consented to judgment in the case, without admitting or denying wrongdoing.

Separately, the SEC and court-appointed receiver Kenneth D. Bell both argued today that petitions to intervene and to dissolve the receivership by alleged Zeek “winners” Trudy Gilmond and Kellie King should be denied by Senior U.S. District Judge Graham C. Mullen.

Court filings suggest that Gilmond has clawback exposure of more than $1.364 million. King’s potential exposure may exceed $205,000.

“Gilmond and King seek to improperly interfere with a settled SEC enforcement action against defendants Rex Venture Group and Paul Burks to deny the Receiver the ability, as directed by the Court, to marshal the estate’s assets for the benefit of all aggrieved ZeekRewards investors,” the SEC argued. “The Motion to Intervene is a transparent attempt to obtain prospective relief in an improper forum with respect to clawback litigation the Receiver has yet to initiate.”

For his part, Bell said Gilmond and King were engaging in “delaying tactics.”

 

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8 Responses to “URGENT >> BULLETIN >> MOVING: New Filings By SEC Suggest Zeek Probe Began In April 2012 Or Earlier; Agency, Receiver Oppose Motions To Intervene By Possible Clawback Targets”

  1. “The Motion to Intervene is a transparent attempt to obtain prospective relief in an improper forum with respect to clawback litigation the Receiver has yet to initiate.

    A process known in non legal circles as attempting to re arrange the deckchairs on the Titanic

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  2. Another item of interest from the SEC’s response is footnote #2 citing “the confidential nature of the Commission’s ongoing investigation.” This harkens back to something Mr. Sorkin mentioned on the call he appeared on with Greg Baker, that the SEC is conducting an investigation and that his clients ~might~ potentially face a subpoena from that.

    I’m not sure if it makes sense for the SEC’s enforcement group to be investigating issues that the Zeek receiver is already or will investigate. Unless individuals involvement in Zeek is only part of what the SEC is looking at. Has the SEC seen the bigger picture here?

    We have the “usual cast of characters” moving from one fraudulent program to another bilking the innocent (and not so innocent) at nearly every turn. It is too soon to say this pattern of abuse is being targeted by the authorities, but it isn’t too soon to hope.

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  3. GlimDropper: Another item of interest from the SEC’s response is footnote #2 citing “the confidential nature of the Commission’s ongoing investigation.”

    It’s the second time the SEC has used that phrase in recent weeks. Here’s the first:

    http://patrickpretty.com/2012/12/18/urgent-bulletin-moving-sec-files-motion-in-zeek-case-to-oppose-appointment-of-examiner-in-blistering-memo-agency-accuses-robert-craddock-of-encouraging-affiliates-not-to-cooperate-with-the/

    GlimDropper: Unless individuals involvement in Zeek is only part of what the SEC is looking at. Has the SEC seen the bigger picture here?

    That’s a very good question.

    GlimDropper: We have the “usual cast of characters” moving from one fraudulent program to another bilking the innocent (and not so innocent) at nearly every turn. It is too soon to say this pattern of abuse is being targeted by the authorities, but it isn’t too soon to hope.

    I’m sure you’ve noticed, Glim, that the serial scammers now appear to have realized that something has changed, that something doesn’t feel quite so right — and so they’re flailing and trying to make the world believe that no action against them has any hope of success.

    Patrick

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  4. Oh Patrick, you only say things like this to drive traffic to your site from the controversy your words create. Robert said it, you read it now just don’t forget it. ;)

    My friend, we’ve been at this too long. We could create a bingo game where every ponzi promoter excuse filled a square on a card and depending on what order the same old lies were told one or the other of us would win a prize. “No victims till the SEC stepped in” well that’s B-6, BINGO.

    It’s all fun and games till you remember how many people got screwed.

    I want people to remember something, a few things actually. The first is that none of the attorneys retained by Robert Craddock or Fun Club USA have ever issued any form of public statement to the donors of the Fun Club effort were Ira Sorkin is willing to talk to Zeek Rewards members and answer their questions.

    I think that’s kinda interesting.

    Please understand something, when Ira Sorkin appears on one of Greg Baker’s calls he chooses his words carefully and for good reason, even though the opinions he offers in no way create an attorney client relationship with the people he’s speaking with he is still most defiantly an attorney (and a good one)and because of that, he would be beyond stupid if he were to deliberately and demonstrably mischaracterize the facts in this case or misrepresent the laws as are being applied here. He may be doing nothing more than earning the money his client is paying him by advancing the arguments he makes but even if that’s all he’s doing he’s doing that to the best of his very well established abilities.

    Robert Craddock’s calls are a zebra of a very different stripe.

    Robert isn’t an attorney nor would he ever pretend to be one (and for many many very good reasons). In fact no one who’s ever appeared on any of Robert’s calls has been an attorney and in so much as I’d love him to prove me wrong on this I don’t think any member of any law firm the Fun Club has retained will ever appear on one of Robert’s calls.

    Why? Simple. If a licensed attorney were on any of Robert’s calls they (unlike Robert) might bare some professional responsibility for the crap Robert says, on each and every call.

    Robert likes to stamp his feet and make some noise pretending to be injured by what the people who question him say. So let me be proactive on a tangible issue. The cashier’s checks deposited by Ken Bell after Zeek was shut down. Robert insists that his attorneys (Micheal Quilling and Rodney Alaxander) were ~shocked~ that a court appointed receiver would ever do such a thing. It doesn’t seem to register with Robert that Ken Bell has in fact informed the Judge about this and the Judge has in no way indicated any form of disquiet as to the issue (almost and in fact entirely as if this was exactly what the receiver should be doing under the circumstances).

    I know it’s in Robert’s best interests to pretend he wont read this but because he mentioned Patrick by name on his last call I can hope some of his (potential) donors will be reading this:

    *** Call Robert’s Bluff ***

    He has said, repeatedly and continually that “the lawyers” can’t believe that Ken Bell cashed the cashier’s checks. He has presented to his potential donors the notion that the receiver doing so was, in the words of his attorneys (Michael Quilling and Rodney Alexander and the firms they are associated with) “not proper,” “not the way it should be done” and that “He (Ken Bell) stole the money.”

    Here’s where Robert’s bluff will fall apart. He (Robert) directly stated that his attorneys made those representations to him and that he was repeating them to his potential donors. But his attorneys (Michael Quilling and Rodney Alexander and the firms they are associated with) will never go on the record in any public forum to repeat and endorse what Robert Craddock has been saying about what they told him about the cashier’s check issue.

    Why, because unlike Robert they have a professional reputation which deserves to be protected.

    Mr. Craddock, you can prove me wrong and make me look like a fool by simply getting Michael Quilling and/or Rodney Alexander and/or the firms they are associated with to issue a very formal and very public statement that, in their very considered legal opinion Ken Bell was significantly, substantially and even illegally depositing cashier’s checks into the receivership estate.

    I’ll wait. I’ll wait till stars burn out. Ira Sorkin will come on Greg’s calls and tell us what he thinks but you’re attorneys are unwilling to face your donors. I wish I could pretend to wonder why, but I don’t so I can only hope your potential donors will start to wonder why.

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  5. GlimDropper: We could create a bingo game where every ponzi promoter excuse filled a square on a card and depending on what order the same old lies were told one or the other of us would win a prize. “No victims till the SEC stepped in” well that’s B-6, BINGO.

    Hi Glim,

    Tony dubbed it “Ponzi Buzzword Bingo” on Jan. 16, 2009, just three days shy of four years ago. I’m not sure if it’s the earliest “Bingo” reference:

    http://patrickpretty.com/2009/01/15/breaking-news-more-asd-connected-assets-seized-bowdoin-blamed-company-troubles-on-russian-hackers/comment-page-1/#comment-267

    Patrick

    EDIT: Corrected date and time above.

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  6. Being that Quilling has in the past acted as a receiver, I’m curious as to whether any cashiers checks and such were involved, and did he at the time do exactly what his client is jumping up and down about now. I may go did around a little and see….

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  7. Cannot wait until January 31, 2013.

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  8. My guess was the Secret Service started looking at Zeek when they froze accounts from members in six countries claiming that OFAC told them they were on the banned countries list, which was not true. Paul said they would be refunded their initial deposit, but never did.

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