URGENT >> BULLETIN >> MOVING: Lawsuits Against Zeek Insiders, Winners Believed Imminent; Paul Burks, Dawn Wright-Olivares, Darryle Douglas Among Alleged Insiders; AdSurfDaily Figures Todd Disner And Jerry Napier Among Alleged Winners; Prospective Defendants’ List Also Includes Legendary HYIP Hucksters T. LeMont Silver And Aaron/Shara

breakingnews72URGENT >> BULLETIN >> MOVING: (UPDATED 5:27 P.M. ET DEC. 16 U.S.A. ) The court-appointed receiver in the Zeek Rewards Ponzi scheme case has advised a federal judge that he intends to sue Zeek operator Paul R. Burks and five alleged insiders, amid allegations they developed and operated a colossal fraud, breached their fiduciary duties, converted and wasted corporate assets and enriched themselves unjustly.

Included with Burks as alleged insiders are former Zeek COO Dawn Wright-Olivares, Daniel Olivares, Roger Plyler, Darryle Douglas and Alexandre “Alex” De Brantes. De Brantes and Wright-Olivares are husband and wife.

Receiver Kenneth D. Bell suggested the lawsuit could be filed within days and has asked Senior U.S. District Judge Graham C. Mullen to approve the filing of the complaints.

And in a move that could send shockwaves across the HYIP Ponzi landscape, Bell advised Mullen that he intends to sue alleged net winners Todd Disner and Jerry Napier, both of whom were AdSurfDaily Ponzi pitchmen. Disner, Bell advised the court, is associated with an entity known as Kestrel Spendthrift Trust and will be sued in his individual capacity and in his capacity as trustee for Kestrel.

How a spendthrift trust somehow became involved in Zeek could not immediately be determined. Such trusts typically exist to protect the assets of individuals who may be irresponsible with money.

Also on Bell’s defendants’ list are legendary hucksters T. LeMont Silver, Aaron Andrews and Shara Andrews. The Andrews are known as “Team Aaron Shara.”

Other alleged Zeek winners Bell advised the court he intends to sue include Trudy Gilmond, Trudy Gilmond LLC, Darren Miller, Rhonda Gates, David Sorrells, Innovation Marketing LLC, Global Internet Formula Inc., Karen Silver, Michael Van Leeuwen, Durant Brockett, David Kettner and Mary Kettner.

Lawsuits will not be limited to just these 17 alleged winners, Bell advised the court. The plan, he said, was to sue “those who received at least $1,000 more from ZeekRewards than they paid in.”

Their profits “came from the scheme’s victims,” Bell said, proposing to the judge that they be treated as a “defendant class of the remaining ‘net winners.'”

The final list of defendants is expected to include many names. Bell has asked the court to impose the rules of complex litigation and to order an initial conference to be held as early as Jan. 13.

Gilmond’s clawback exposure may exceed $1.364 million, according to court filings in December 2012. Sorrells’ exposure may exceed $943,000. The Kettners may have exposure that exceeds $1 million.

How much exposure the other prospective defendants have was not immediately clear.

What is clear is that Zeek’s alleged $600 million Ponzi- and pyramid scheme that was popularized in part on infamous Ponzi forums could land promoters in court soon.

After the U.S. Secret Service exposed the $119 million ASD Ponzi scheme in 2008, Disner sued the United States — and lost. Disner’s lawsuit was filed even as he was promoting Zeek, a “program” that planted the seed it paid out even more than ASD’s 1 percent a day. Alongside the SEC, the Secret Service also is investigating Zeek.

Among Disner’s contentions when he sued the government over its ASD-related actions was that the Ponzi case was a “house of cards” and a “tissue of lies.”

ASD operator Andy Bowdoin, however, later admitted ASD was a Ponzi scheme and that his company never operated lawfully from its inception in 2006 through its collapse in 2008.

Bowdoin, now 79, was sentenced in August 2012 to 78 months in federal prison. He pleaded guilty to wire fraud in May 2012, after prosecutors produced evidence that Bowdoin had participated in at least two other MLM fraud schemes while out on signature bond and awaiting trial in the ASD Ponzi case.

NOTE: Our thanks to the ASDUpdates Blog.

 

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22 Responses to “URGENT >> BULLETIN >> MOVING: Lawsuits Against Zeek Insiders, Winners Believed Imminent; Paul Burks, Dawn Wright-Olivares, Darryle Douglas Among Alleged Insiders; AdSurfDaily Figures Todd Disner And Jerry Napier Among Alleged Winners; Prospective Defendants’ List Also Includes Legendary HYIP Hucksters T. LeMont Silver And Aaron/Shara”

  1. Hm, I wonder why they did not mention Dwight Owen Schweitzer, infamous Ponzi cohort of Todd Disner?

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  2. Global Internet Formula Inc – there is a thread from 2009 on MMG promoting “Global Internet Formula Premier Membership” by someone with the user ID “invciccarello”. This might be a “Ellen Ciccarello”. Back then this person appears to have also been promoting Club Asteria.

    “Ellen Ciccarello” may also use the user ID “invhyip”, and may live in Lutz, Florida.

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  3. Does the 2 lists of named defendants (insiders & net winners) include any Non-US resident?

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  4. Gary: Does the 2 lists of named defendants (insiders & net winners) include any Non-US resident?

    Not sure right now, Gary.

    The receiver has said, however, that he’ll pursue clawbacks from non-U.S. residents.

    Patrick

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  5. admin: Not sure right now, Gary.

    Patrick

    Usually the receiver’s motion or any litigation document includes the defendants’ address (probably not the full details though), doesn’t it?

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  6. Gary: Usually the receiver’s motion or any litigation document includes the defendants’ address (probably not the full details though), doesn’t it?

    The receiver’s motion for court approval to file the lawsuits against the alleged insiders/winners does not include addresses for the prospective defendants.

    The SEC and attorneys for Paul Burks were copied at their addresses, however.

    And, to the best of my knowledge at this moment, the receiver has not yet filed the lawsuit. Until the court grants approval to file and the receiver files the actual complaint/complaints, it looks as though things will be in a sort of holding pattern.

    More details on the specific allegations should become clear after the receiver files the complaint/complaints.

    After that, we may know what attorneys are representing defendants other than Burks. I suppose its possible that some of them won’t have attorneys and will try to represent themselves, as was the case with some of the ASD promoters.

    A corporation, however, cannot represent itself pro se, meaning that any corporate defendants will have to hire a lawyer.

    Patrick

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  7. admin: I suppose its possible that some of them won’t have attorneys and will try to represent themselves, as was the case with some of the ASD promoters.

    I suppose you re referring to court hearings etc though, did the ASD case include overseas defendant? If so, how dit it work?
    Given the personal jurisdiction issue, overseas defendants should be sued in their own country or in case the defendant’s country acknowledge US judgement via Hague convention etc. then it looks unrealistic that the defendant will fly to the US to attend the court here when he doesn’t have any representative.
    I’m just wondering how the Zeek’s receiver is trying to manage if the current named defendants include non-US residents.

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  8. Gary: Hague convention

    The receiver has referenced the Hague Convention in various documents, including this one, dated Oct. 30, 2013:

    http://www.zeekrewardsreceivership.com/pdf/Quarterly%20Status%20Report%20Q3%202013.pdf

    SNIPPET (bolding added):

    ________________________________________

    The group of net winners identified to date includes numerous individuals residing outside of the United States, with the largest foreign winners living mainly in countries with established legal systems which are signatories to the Hague Convention for international service of process.

    While the pursuit of “clawback” claims against these foreign net winners raises various challenges, the Receiver intends to include these winners as parties to domestic litigation based on their contacts with the ZeekRewards Program in the United States so long as doing so will not delay the litigation against domestic winners. The Receiver will also pursue cost effective foreign litigation to establish the repayment obligation and/or to collect judgments where necessary and appropriate.

    The first clawback claims are now imminent, and a lawsuit against multiple named defendants along with a class of net winners will be filed during the fourth quarter of 2013.

    ________________________________________

    Gary: I’m just wondering how the Zeek’s receiver is trying to manage if the current named defendants include non-US residents.

    These matters may come into better focus in the days ahead.

    Patrick

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  9. What I’m most interested to see from a non US resident perspective is how the receiver will deal with Zeek affiliates who “earned” money in Zeek while domiciled in the US but later relocated to Costa Rica. I have to imagine that the government has had occasion to ponder the possibilities and implications on a far deeper and more practical level than some recent, so to speak “emigres.”

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  10. I just found the receiver’s motion and am surprised that ALL the defendants (both insiders & net winners) are basically individuals (& their small entities). I was curious as to inclusion of overseas individual because according to your article each of them got around 1 million dollar over which might satisfy minimum amount to pursue but I originally thought the receiver already included big institutions such as global banks or brokers claiming tens of million dollars return each in the motion.
    The industry specialist describes clawback as “While the courts go through the tedious process of determining who owns what and how they got it, trustees typically “grab the low-hanging fruit first,” Henning added — “the Lamborghinis and the yachts. “All of which raises the question: How much of what gets clawed back will ultimately be left to distribute to victims? Sometimes pennies on the dollar, if that. “Unfortunately, a lot of these bankrupt estates can eat up an awful lot of resources,” said Painter. “. Well, the Zeek receiver stressed a lot about its efficient litigation consolidating numerous small cases in class action that can only be done in this $600 million size with huge number of net winners, relatively big for Ponzi and pyramid scheme.
    However, read this http://www.publicintegrity.org/2013/10/10/13515/majority-funds-recovered-stanford-ponzi-scheme-spent-receiver , even $7.2 billion case doesn’t look encouraging progress.

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  11. Gary: I was curious as to inclusion of overseas individual because according to your article each of them got around 1 million dollar over which might satisfy minimum amount to pursue

    Gary,

    The article above references the potential clawback exposure of only four of the alleged winners from a universe of roughly 75,000-80,000 net winners:

    “[Trudy] Gilmond’s clawback exposure may exceed $1.364 million, according to court filings in December 2012. [David] Sorrells’ exposure may exceed $943,000. The Kettners [David and Mary] may have exposure that exceeds $1 million.”

    These four are all U.S. domestic. At this point, I can’t say for certain if any of the earliest identified alleged net winners are non-U.S. residents.

    Taking Mary Kettner as an example: Court filings show she received a letter from the receiver dated Oct. 30, 2012. The letter asserted that preliminary records showed she received $465,866.67 “but paid in only $1,495.”

    In the receiver’s view, that meant she received “$464,371.67 of the money lost by victims that must be returned to the Receivership estate.”

    Adding in what Zeek records showed about her husband’s alleged winnings, the potential exposure of the Kettners is in the $1 million range.

    So, a husband and wife promoting Zeek potentially have combined exposure of $1 million. I’m not sure what the average is among the named alleged winners so far. Regardless, the receiver is going to argue that all of the winners — including winners of much smaller sums — are profiteers at the expense of hundreds of thousands of victims.

    Here’s one way to look at this: Zeek, an internally corrupt enterprise, just handed an enormous legal and PR problem to its own affiliates. The affiliates will have to address these issues at their own expense. Some of those affiliates are magnifying the problem by demonizing the receiver and the SEC.

    The blame for this nightmare, however, is at Zeek’s door, not the doors of the receiver and the SEC. In XXXX number of cases, the blame also is at the doors of willfully blind promoters. In the case of Todd Disner, for example, it’s at least his second tour through these corrupt enterprises. He also was in ASD and, very likely, Themco Co-op, plus one or more of the reload scams that followed Zeek.

    T. LeMont Silver has been feeding off these fraud schemes for years. He was a pitchman alongside ASD’s Andy Bowdoin in the OneX scam and has stated publicly that he was in at least one other Ponzi scheme before Zeek. He didn’t say which one, but if it’s ASD, it means that he’s in Disner’s class.

    Trudy Gilmond pitched the Regenesis 2X2 scam broken up by the U.S. Secret Service in 2009. She then gravitated to Zeek and perhaps others.

    Lots of Zeek victims are going to be offended by the longstanding actions of affiliates who enrolled them: The victims want as much of their money back as possible and are sickened by the prospect that serial fraud-scheme promoters appear to believe they’re entitled to keep their money.

    Gary: minimum amount to pursue

    The receiver has established that the minimum amount to pursue is $1,000. Many members of the antiscam community jumped for joy when seeing that number because it shows that relatively low-level players and serial scammers who’d been staying under the radar for years are going to be held accountable for their actions.

    Here’s something else to consider, Gary: Among many of these relatively small winners, those actions are ongoing. They involuntarily exited Zeek after the SEC action and simply moved to other scams.

    What they look for is a “program” with an operator who claims the program is operating lawfully and is in “compliance.” They’ll join even though they know it’s a bunch of flooey. (Serial disingenuousness.)

    When push comes to shove, they’ll do one of two things: (1) argue they were duped by the operator who asserted the program was lawful and compliant or, (2) create a magical construction by which a government agency or receiver/trustee is evil or otherwise demonic. Some of them might argue both 1 and 2.

    Gary: Well, the Zeek receiver stressed a lot about its efficient litigation consolidating numerous small cases in class action that can only be done in this $600 million size with huge number of net winners, relatively big for Ponzi and pyramid scheme.
    However, read this http://www.publicintegrity.org/2013/10/10/13515/majority-funds-recovered-stanford-ponzi-scheme-spent-receiver , even $7.2 billion case doesn’t look encouraging progress.

    I’d be very cautious about drawing comparisons between the Allen Stanford scheme and the Zeek scheme. For starters, Stanford’s scheme had far fewer victims — a number on the order of 18,000.

    In January 2013, the Zeek receiver said he had “identified over 800,000 net-loser usernames in the Receiver Defendant’s records.”

    Yesterday, in a new letter to investors, the Zeek receiver said that “More than 175,000 Claims were filed that total in excess of $590 million, which makes ZeekRewards one of the largest — if not the largest—Ponzi and pyramid schemes in history.”

    Source:

    http://www.zeekrewardsreceivership.com/pdf/ZeekRewards_Receiver_Update_December_13_2013.pdf

    Stanford’s fraud involved far more money, but Zeek created far more victims.

    My view is that the Zeek receiver has done an exceptional job and is worth every penny he’s received. He already has policed up more than $300 million and now is going after the winners allegedly holding about $283 million more:

    “As of September 30, 2013, the Receiver estimates that net winner Affiliate-Investors received over $283 million in fraudulent transfers from the Receivership Defendant.” — Source, Zeek Receiver’s Report to the Court, Oct. 30, 2013

    Patrick

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  12. IIRC, so far with all the work they’d done, receiver has only asked for about 1 million in laywer’s fees? (and another 300K for the other firm?)

    That’s CHEAP for lawyer work.

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  13. This is civil litigation, so punishing promoters is not primary scope although disciplinary effects might be anticipated.

    People who lost money have strong opposition to net winners and they blindly call for and welcome receiver’s clawback proposals, but it’s not always right because it’s cost often eats up the recovered money.

    From my perspective, the receiver’s value is assessed mainly by economic sense, and clawback litigation is a double-edged sword due to the involvement of hefty cost & time.

    Let me quote the comment of Jordan Maglich, a Florida attorney and expert on Ponzi schemes as below:

    “Clawback litigation is costly, can last for several years and does nothing more than both delay the claims process and deplete the potential funds available for distribution to victims,”, the calim process does seem to be being processed into real distribution though, it’s a good news for this case.

    “And 99 percent of the time, there is no allegation that those clawback targets were complicit in the fraud or somehow anything different than those victims who lost money.” , the named defendants this time are the rest of 1% though.

    My friend who is an associate professor specialized in bankruptcy used to explain “There are a few common traits in successful clawback law suit, firstly the target amount is material usually in the level of tens or hundreds of $million, secondary the large chunk of money comes from a few big organizations, thirdly the suit is processed after criminal conviction is established, lastly receiver is transparent and does throughout risk / reward calculation in every single case separately before starting clawback suit”

    He also specifically noted “I don’t have detail statistics but obviously any clawback targeting individuals is difficult and success rate is low because it involves a lot of uncertainties related with final money collection, and victims actually don’t know the reality & facts of past Ponzi clawback suits, the net recovery is often much smaller than they imagine.”

    I had a chat with this friend yesterday re Hague Convention application to overseas individuals, and his exact comment is “In short, even the receiver succeeds in this route, the process is still tedious and takes a long time, moreover it’s only a service process, the real impact / power of enforcement is often quite weak under Hague compared to US domestic enforcement practice and in many cases the receiver needs to employ local lawyer who has to learn the case from scratch to approach to the defendants, so needs a lot of additional fee. Besides, generally speaking, defendants will not easily surrender to overseas judgement but ignore unless strong debt collection process is employed which may involve another specialist means another cost.

    BTW, has the receiver already confirmed the defendants’ solvency? Imagine if the defendants finally turn out to be insolvent or don’t have enough money to pay, the receiver will not be able to get anything but only pay the huge fee and expense. Sadly, it’s often the cases in real world and such big net loss will never be clearly explained but comprehensively be buried in the total cost by the receiver”

    As long as I see the Zeek case, $283 million fraudulent transfer is in fact material and 80,000 net winners made the receiver take the unique complicated litigation approach which the receiver assert efficient.

    I am personally interested in this case and would like to keep an eye on how it will work.

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  14. Gary,

    Not sure if you submitted your Dec. 15, 2013 comment above as a large block of text without carriage returns or whether the system did not include your carriage returns for some reason.

    In any event, I added carriage returns to make it more readable.

    Patrick

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  15. Thanks, yes it’s more readable.

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  16. Clawbacks against the small-fry may not be so cost effective…

    But, think about the educational and deterrence aspects.

    I say, Hit enough people often enough to make it obvious to everyone that it is not worth while :)

    What I would REALLY like to see is the authorities go after some of the small scams that fly under the radar. Make an example of them to frighten the others.

    Thom

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  17. A few comments in general about Gary’s remarks above:

    In theory, clawback lawsuits should not be punitive, except perhaps within limited circumstances. But it’s not a perfect world in this area of the law. This very imperfection can create situations that are perceived as punitive or are de facto punitive. My shorthand for this is Ponzi = pain.

    Under the theory of equity, the victims of Ponzi schemes share the pain equally. Some of this is discussed here:

    http://patrickpretty.com/responses-to-comments/comment-page-1/#comment-33904

    And here:

    http://patrickpretty.com/responses-to-comments/comment-page-1/#comment-33876

    Some readers also may find this story informative:

    http://patrickpretty.com/2010/06/13/apologists-interrupted-two-court-rulings-show-that-hyip-operators-players-setting-stage-for-painful-downfalls-foreclosures-woman-loses-home-while-new-mom-loses-everything/

    Meanwhile, it is absolutely true that receiverships incur costs when reverse-engineering a fraud and that those costs may affect the final sums available to victims in the form of distributions from a receivership.

    It’s also absolutely true that some victims feel as though they’ve been gouged twice: first by the scammers, and later by a receiver trying to unwind a scam. I do not believe there is a “perfect way” for an equity receivership to go about its business because the circumstances surrounding a fraud scheme include many variables. These variables differ from scam to scam.

    Some examples:

    * The scammers-in-chief already might have dissipated some, most, virtually all or all of the proceeds before the scam was detected, reducing recoverability to near zero or zero. (This is not going to be the case with Zeek and was not the case with AdSurfDaily before it.)

    * Under many circumstances, the victims of fraud schemes may have no complicity at all — i.e., a reasonable argument cannot be made that they knew or should have known they were participating in a fraud scheme.

    * Clawback targets may come in all shapes, sizes and profiles: the poorest of the poor lured into a scheme by their desire to escape poverty — or the richest of the rich lured into a scheme by a desire to get even richer. A clawback action aimed at an impoverished person could be viewed as more punitive than one aimed at a person of means.

    As a hypothetical example, an impoverished person might have borrowed $2,000 from a relative, plowed it into Zeek, received $20,000 in return — and used the $20,000 to purchase a trailer in Florida to accommodate a struggling family.

    A wealthy person might have used $10,000 of his own funds to plow into Zeek and received $100,000 in return — and used the $100,000 to fund a gambling weekend in Vegas in which all the money was lost.

    One can argue that both individuals were fleeced by Zeek, but it’s easy enough to view the impoverished person more sympathetically. The roof over the head of the impoverished person potentially is at risk and that person has no other assets — unlike the Zeek winner who blew the money in Vegas and has been living in a mansion for years.

    Regardless of victims’ economic standing, however, Zeek created an atmosphere that potentially subjects persons of no means AND persons of means to clawback litigation. A person of means almost certainly is better-equipped to deal with the legal and economic fallout than a person of no means.

    I think the Zeek receiver has taken individual profiles into consideration when contemplating settlements or litigation. Regardless, some people have directed outlandish criticism at the receiver and, I believe, tried to obstruct his investigation.

    What some of these folks appear to have downplayed or ignored is the possibility that clawbacks won’t be their only concern. It is possible that some of them could be named defendants in an SEC action that alleges they committed securities fraud, sold unregistered securities, worked as unlicensed broker/dealers and engaged in other acts that put the investing public at risk. There also may be exposure at the state level for some Zeek promoters.

    It might not be a good thing to be, say, Team Aaron Shara.

    One of my personal concerns is that some of the remissions money from the ASD Ponzi scheme made it into Zeek. If this occurred, it means that a subset of ASD victims accepted their crime-victim compensation and plowed into into the very similar Zeek “program.”

    Lots of folks will read that as willful blindness, if it proves to be the case. If ASD organizations simply moved to Zeek, well, good luck to them if they try to persuade a judge that clawbacks are unwarranted and that they did not know something underhanded was going on.

    More generically, I’m not sure if the law has evolved quickly enough to contemplate the viral MLM fraud scheme as advanced over the Internet.

    One way to view Zeek is as a post-ASD scam that evolved to ensnare enough people to fill the Rose Bowl with victims 10 times over. In 2008, ASD perhaps could have filled the Rose Bowl one time.

    The social and economic consequences of Zeek are untenable, as are the security implications. “Programs” such as TelexFree and WCM777 are creating the same untenable circumstances.

    What’s truly disturbing is that the “programs” create a losing environment for 80 percent to 90 percent of participants before the criminality even is weighed in.

    “MLM” practiced in this fashion is one of the most dangerous things in the world. Under such circumstances, judicial economy is put at extreme risk and victims pile up by the stadium load.

    I think Kenneth D. Bell is doing a commendable job under extremely trying if not extremely toxic circumstances. He is trying to do the most good — and it sickens me to see some of the MLMers try to demonize him in the same fashion they demonized the Secret Service when it exposed ASD.

    Also see June 2011 post on “fraud creep”:

    http://patrickpretty.com/2011/01/22/fraud-creep-the-two-word-term-that-explains-how-crime-expands-on-the-internet-to-affect-tens-of-thousands-of-victims-at-a-time/

    Patrick

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  18. One thing that seems to have been overlooked is that the receiver contacted all the net winners and offered them a period of time to settle with him. He made it very clear he would work with them, but if they refused to settle, he would file the very actions he is now about to undertake.

    There were many net winners who did settle with him, and they did not have to pay it all back. Each case was determined on its own merits as to what was in the best interests of both parties to settle. Those that refused either thought the receiver was bluffing, or they could win in court if challenged.

    Don’t forget that Trudy Gilmond and Kellie King hired Bernie Madoff’s attorney, Ira Sorkin, to file an action claiming that the Zeek action by the SEC and Secret Service was unlawful and therefore they were not subject to clawback. They lost. They claimed they would appeal, but the appeal was never filed. Kind of makes you wonder how much of their ill-gotten gains they used to pay Ira Sorkin to file their frivolous lawsuit. It is my understanding they also had to pay the court costs for filing the motion since they lost.

    There is no doubt in my mind that by the time the Zeek case is fully over, there will be many new precedents set in this case. If history is any indication, we have at least another 2 years before this is all done, and could be longer if criminal charges are filed.

    It is going to be one interesting case to watch.

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  19. The problem with Gary’s analysis is there is not going to be dozens of clawback lawsuits, like Irving Piccard doing for Madoff case. AFAIK, Bell is going to give them one last chance to settle by asking for a conference. Any one who don’t settle before then is going to get sued as a CLASS. Judgment may be individual, but there’s going to be ONE lawsuit. IMHO, the insiders gets a different one as they may get punitive damages too.

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  20. don’t see how you can sue “winners” as a class when they all would have taken different amounts.

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  21. Don’t think Receiver will sue all as a class as he will have more leverage suing individually named defendants per the motion. Not sure what the threshold is, maybe anyone with winnings over $100k?

    Will be curious if the Receiver names additional defendants individually not mentioned in the motion.

    It’s also possible the judge will not allow Receiver to combine both the class and individual to allow for separate calendaring.

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  22. Any positive influence to prevent future unethical defendants’ move we can expect from the receiver’s lawsuits is surely welcome as far as it is Side-effect.
    Any affirmative attempts or initiatives to transform social norm of MLM industry with punitive demonstration should be the role of law enforcement agencies and regulators funded by the tax of general public.

    The equity receiver’s common duties in this kind are usually control & preserve the receivership estate and protect the customers (victims) interests, therefore the receiver’s work must be primary gauged by monetary value within the framework of respective case as said before.

    I had another chat with the same associate professor, and he repeated strongly that any clawback targeting individual is very risky because many empirical studies validate failure of net recovery viz. total cost exceeds final collection, and such losses are often covered by massive recovery from large institutions (if they sue big companies simaltaneously) which allows the receiver to adjust the balance out of their book.

    In the first place victims barely object to clawback action because they hate winners, and nobody tries to analyse the detail profit & loss of each single case separately, that’s why people are not aware of real risk of pursuing individual person.

    Actually, any bankruptcy lawyers who work for contingency fee or lump sum payment hardly go after individuals due to the huge uncertainties of final collection, remember the risk is not only insolvency but also concealment of assets.

    When it comes to threshold, my friend is reluctant to comment since it really depends on each condition, but just as an indicative purpose, he supposes the aforementioned lawyers never take risk or even not consider if the amount at stake in each case is less than $200,000 for US domestic and $500,000 for international.

    I understand the Zeek’s receiver works hourly fee, means the receiver will be compensated based on the physical working hours no matter the litigation results will be.
    Under the circumstances, the more the suits the longer the judgements & enforcements, so the more the receiver’s fee.

    I’m just commenting general theory and no idea about how the Zeek receiver came to the conclusion that this clawback is financially viable.

    Hope we will know the receiver’s exact tactics to achieve the efficiency they claim.

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