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  • Zeek Receiver To Make Second Distribution, Explains ‘Rising Tide’ Method: [Also See Link To Business North Carolina Story On Kenneth D. Bell]

    EDITOR’S NOTE: (Updated 3:06 p.m. EDT U.S.A.) The information below is from Kenneth D. Bell, the court-appointed receiver in the Zeek Rewards’ Ponzi- and pyramid-scheme case. It is reproduced verbatim from an announcement by Bell dated June 18. Also, make sure you read the Comments thread below for the URL to a June feature on Bell by Business North Carolina. The story touches on the issue of certain MLMers proceeding from one fraud scheme to another. In addition, the publication reports that Bell, prior to his appointment as Zeek’s receiver, served as a federal prosecutor who investigated a Hezbollah terrorist cell. Many Zeekers perhaps already know about the Hezbollah prosecution. Business North Carolina is reporting that, during his career as an Assistant U.S. Attorney, Bell encountered a person who wanted to hire a hit man  . . .

    **___________________________**

    ANNOUNCEMENT FROM THE RECEIVER – June 18, 2015

    I am pleased to announce that we will be making a second partial interim distribution to all Affiliates who hold Allowed Claims on the next Court authorized distribution date (July 31, 2015), which, when combined with the first partial interim distribution and the amounts paid by Zeek Rewards before it was shut down, will return to victims 60% of allowed claimed losses due to the Zeek Rewards Ponzi scheme.

    There has been some confusion about how the amounts of distributions are calculated using the Court ordered “rising tide” method. The rising tide method of loss calculation is designed to make every recognized claimant equally whole (as a percentage of their investment). Take for example two recognized claimants, each of whom invested $10,000 into the Zeek Rewards Ponzi scheme. The first claimant received nothing back from Zeek Rewards while the scheme was operating. The second claimant received $4,000 out of Zeek Rewards before it was shut down. Under the rising tide method, the second claimant is deemed to have already received 40% of her investment back, while the first claimant has received nothing back. When we made the first partial interim distribution of 40% the first claimant received $4,000, but the second claimant did not receive a distribution check.

    When the second interim partial distribution is made, the first claimant will receive an additional $2,000, and the second claimant (who did not get a first distribution) will receive $2,000. This will ensure that both claimants have received 60% of the amounts they invested. While some Affiliates have complained about the rising tide method, I believe it is the most fair way to make the Zeek Rewards victims equally whole; two investors put $10,000 into the scheme and each will receive $6,000 total, whether it was received from the scheme itself, or from distributions from the receivership, or a combination of both.

    There also has been some confusion about our quarterly distributions. Some mistakenly believe that they will receive a distribution every quarter. There was a first partial interim distribution and will soon be a second. Each quarter we send distribution checks only to claimants who completed the claims process since the last quarter.

    Unfortunately, nearly 50,000 claimants with recognized claims have not received a first, nor will they receive a second, partial interim distribution. The only reason for this is that those 50,000 claimants have not electronically signed the Release and OFAC certification available through the claims portal. Many have called or emailed asking for personal assistance signing and submitting these forms. We will soon create and post on the receivership website an instructional video showing how to electronically sign and submit the Release and OFAC certification through the claims portal. The cost to create and post this video will be a minimal expense to the receivership.

    We have received calls and emails asking that we cut off the recovery rights of the 50,000 recognized claimants who have not completed the process and distribute their share of distributions to those who have. That day may come, but it has not yet. I will give each claimant with a recognized claim every opportunity to receive their share of the recovery. Nonetheless, I implore everyone to promptly complete the Court required process. Sometime before the end of the receivership I will have no option but to ask the Court for permission to distribute all remaining receivership assets to only those recognized claimants who have completed the process.

    If your contact information has changed, or the claims portal shows that you were issued a check that you have not received, or a check you were mailed was issued in the wrong name, please click on the following link to learn how to let us know: https://cert.gardencitygroup.com/zrwdet/fs/home.

    After this second partial interim distribution, the receivership will maintain sufficient funds to pay those claimants who have not yet, but hopefully will, electronically sign the Release and the OFAC certification, and sufficient funds to allow the receivership team to continue to pursue additional recoveries for the ultimate benefit of eligible Affiliates. We are not going to hold onto money that we could otherwise distribute to victims.

    We are in negotiations or litigation with financial services firms to recover tens of millions of dollars for Affiliates. The litigation against U.S and foreign net winners (those who took more money out of the scheme than they put in, essentially holding the victims money) is progressing. I remain confident that we will succeed in all of these efforts. Unfortunately, litigation is never quick, and once we have judgments against the net winners, in amounts exceeding $200 million, we will have to collect on those judgments. I don’t anticipate making a third partial interim distribution for quite some time because the funds for such a distribution will largely have to come from litigation recoveries that will take quite some time.

    I know and understand that recovering only 60% of your investment is not what you want. I have read letters from and spoken to many of you. I know the hardships that Zeek Rewards inflicted on thousands of people. It may be no comfort, but a 60% recovery by victims of a Ponzi scheme is unusually high, and I am proud that the receivership team spends less as a percentage of total recoveries than any receivership of which I am aware.

    I am entirely confident that when we are finished with our work on your behalf your total recovery will be more than the 60% we will distribute. I ask you for your patience, and thank you for your continuing support.

  • URGENT >> BULLETIN >> MOVING: Achieve Community’s Kristi Johnson Charged Criminally

    breakingnews72URGENT >> BULLETIN >> MOVING: (13th Update 1:43 p.m. EDT U.S.A.) After an investigation by the U.S. Secret Service, Kristi Johnson (Kristine Louise Johnson) of the “Achieve Community” has been charged criminally with wire-fraud conspiracy and has agreed to plead guilty, federal prosecutors said.

    “By the time the scheme collapsed in February 2015, the conspirators owed victim-investors at least $51 million in purported investment returns, yet Johnson, her conspirators and TAC had available only 4% or approximately $2.6 million,” the office of Acting U.S. Attorney Jill Westmoreland Rose of the Western District of North Carolina said.

    The SEC charged Johnson, 60, civilly in February 2015 with operating a combined Ponzi- and pyramid scheme that allegedly had gathered at least $3.8 million. She resided in Aurora, Colo., the agency said. The securities regulator also charged Troy A. Barnes, 52, of Riverview, Mich.

    Barnes disclosed in February that he was a target of a federal criminal investigation. A charge sheet (known as an “information”)  filed by prosecutors yesterday against Johnson described an alleged co-conspirator as “CC#1.” The information also suggested there were other co-conspirators “known and unknown to the United States Attorney.”

    These individuals were not named.

    The conspiracy prosecution brought by the Secret Service and federal prosecutors appears to have upped the Ponzi dollar sum to $6.8 million. Prosecutors said Achieve “defrauded more than 10,000 investor victims” worldwide.

    Prosecutors called Achieve a “sham internet company.” The case against Johnson was brought in the venue — the Western District of North Carolina — that is the center of action in the 2012 Zeek Rewards’ Ponzi- and pyramid scheme.

    Achieve and Zeek are known to have had promoters in common. Both schemes instructed prospects and recruits not to call the respective programs “investment” programs in bids to skirt securities laws. Such disingenuousness dates back to at least 2008 and the AdSurfDaily Ponzi scheme, also broken up by the Secret Service.

    Here’s how prosecutors described the alleged verbal gymnastics of Achieve and its bids to dupe investors, payment processors and law enforcement (italics/bolding added):

    According to court filings, as the scheme grew in size and scope, Johnson and her conspirators concealed the true nature of the scheme through multiple misrepresentations.  According to court records, when the conspirators became concerned that the use of the term “investment” would draw scrutiny from regulators, they instructed victim-investors that “We ARE NOT an INVESTMENT program, please don’t use that term when you speak or post about our re-purchase strategy.”

    According to court records, Johnson and her conspirators also lied about the company’s “business model” to the third-party payment processors which processed TAC’s money transactions.   When one payment processor concluded that TAC was operating a Ponzi scheme and terminated TAC as a client, court records show that Johnson and her conspirators falsely told victim investors that it was because the payment processor was unable to handle the large amount of money TAC paid to its investors.

    As indicated in court documents, the investment scheme began to crumble when payment processors stopped processing the Ponzi payments to victim-investors.  By the time the scheme collapsed in February 2015, the conspirators owed victim-investors at least $51 million in purported investment returns, yet Johnson, her conspirators and TAC had available only 4% or approximately $2.6 million.

    Prosecutors said “a signed plea agreement was also filed [Thursday], and Johnson is expected to appear before a U.S. Magistrate judge in the coming days to formally accept the plea. The wire fraud charge carries a maximum of 20 years in prison and a $250,000 fine. As part of her plea agreement, Johnson has agreed to pay restitution, the amount of which will be determined by the Court.”

    In January 2015, Achieve promoter Rodney Blackburn produced an ad that featured nearly six minutes of continuous footage from the website of the SEC. The ad suggested the SEC did not have jurisdiction over “programs” such as Achieve and “Unison Wealth.” At the time, the SEC declined to comment on the Blackburn promo.

    Blackburn promoted several recent Ponzi-board scams that tanked. Included among them were “Daily-Earnings,” plus “Moore Fund” and “Trinity Lines” and “Rockfeller Asset Management Limited” and “Bring The Bacon Home” and “Automatic Mobile Cash.”

    Zeek receiver Kenneth D. Bell has raised the issue of MLMers proceeding from one fraud scheme to another.

    In December 2014, the PP Blog reported that Achieve boosters were parroting each other and circulating a promo that read, “We are not investing in a stock or buying shares in a company. We are using our God given universal right to spend our money the way we want. We choose not to sell out to the banking system for their tiny little 1% annual return.”

    Prosecutors described Achieve’s purported 700 percent return as “bogus.” The SEC described Achieve as a  “pure Ponzi and pyramid scheme” whose revenue “has consisted entirely of investor-contributed funds.”

    Claims of that a “triple algorithm” made such outsized returns possible also were bogus, authorities said.

    From an Achieve promo playing on YouTube. Masking by PP Blog.
    From an Achieve promo playing on YouTube. Masking by PP Blog.

    Achieve offered a 700 percent ROI, according to the SEC and federal prosecutors.

    NOTE: Our thanks to the ASD Updates Blog.

  • SOUTH CAROLINA: 9 Attending Bible Study At Historic African American Church Slain

    Photo of suspect. Source: Charleston Police Department, via Facebook.
    Photo of suspect. Source: Charleston Police Department, via Facebook.

    There has been another mass shooting in the United States — this one killing nine people during a Wednesday evening Bible study at the historic Emanuel African Methodist Episcopal Church in Charleston, S.C.

    Among those feared dead is the Reverend Honorable Clementa C. Pinckney, the church pastor and a member of the South Carolina Senate. In a terrible footnote, Pinckney, who led a church at which the Rev. Martin Luther King Jr. spoke in 1962 prior to receiving the Nobel Peace Prize in 1964, was a member of the Senate Corrections and Penology Committee, according to his Senate bio.

    Pinckney was 41.

    Charleston police have described the shooting rampage as a hate crime.

    “There is no greater coward than a criminal who enters a house of God and slaughters innocent people engaged in the study of scripture,” said NAACP president and CEO Cornell William Brooks. “Today I mourn as an AME minister, as a student and teacher of scripture, as well as a member of the NAACP.”

    The suspect (photo above) alleged to have fled the scene is described as a white man in this twenties who mixed with parishioners prior to opening fire and carrying out the massacre. He appears to have been carrying something on his back when entering the church.

    The Post and Courier of Charleston is reporting that the victims include six women and three men.

    Photo of suspect vehicle. Source: Charleston Police Department, via Facebook.
    Photo of suspect vehicle. Source: Charleston Police Department, via Facebook.

    UPDATE 10:36 A.M. EDT U.S.A. ABC News, citing the FBI, is identifying the suspect as Dylann Roof, 21.

    UPDATE 11:05 A.M. EDT U.S.A.

    UPDATE 11:45 A.M. EDT U.S.A. Charleston police have confirmed the arrest of Dylann Roof. UPDATE 11:59 A.M. EDT U.S.A.

    UPDATES 12:40 P.M./3:50 P.M. EDT U.S.A. The President of the United States addresses the American people, says he knew Pastor Pinckney:

    UPDATE 1:01 P.M. EDT U.S.A. A news conference on a Medicare fraud takedown was scheduled at the U.S. Department of Justice this morning. Attorney General Loretta Lynch, FBI Director James Comey and other officials were on hand. Prior to the fraud announcement and the police announcement that Dylann Roof had been arrested, the Attorney General made these remarks on the church shootings (italics added):

    Good morning. Before we begin today’s announcement, I want to take a moment to address the heartbreaking and deeply tragic events at Emanuel AME Church in Charleston, South Carolina – a crime that has reached into the heart of that community. The Department of Justice has opened a hate crime investigation into this shooting incident. The FBI, ATF, U.S. Marshals Service, Civil Rights Division and U.S. Attorney’s Office are working closely with our state and local partners, and we stand ready to offer every resource, every means and every tool that we possess in order to locate and apprehend the perpetrator of this barbaric crime. Acts like this one have no place in our country. They have no place in a civilized society. And I want to be clear: the individual who committed these unspeakable acts will be found and will face justice.

    As we move forward, my thoughts and prayers – and those of our entire law enforcement community, here at the Department of Justice and around the country – are with the families and loved ones of the victims in Charleston. Even as we struggle to comprehend this heartbreaking event, I want everyone in Charleston – and everyone who has been affected by this tragedy – to know that we will do everything in our power to help heal this community and make it whole again.

    I encourage the people of Charleston and the wider area to continue circulating the photos of the alleged perpetrator and report any tip, no matter how minor, to the tip line, which can be reached at 1-800-CALL-FBI.

    UPDATE 3:39 P.M. EDT U.S.A. Charleston County Coroner Rae H. Wooten identifies the victims:



    Broadcast live streaming video on Ustream

    UPDATE 3:55 P.M. EDT U.S.A.

    UPDATE 4:55 P.M. EDT U.S.A.

  • SPECIAL REPORT: MyAdvertisingPays, Zeek Figures Sued In TelexFree Class Action; AdSurfDaily And Zeek Cases Cited Repeatedly; Alleged ‘Private Jet’ Also Referenced In 200-Page Complaint

    MyAdvertisingPays logo
    MyAdvertisingPays logo

    EDITOR’S NOTE: Certain reports by the PP Blog that are available to any person with an Internet connection are referenced in a consolidated, amended prospective class-action complaint that makes claims against various defendants with an alleged association with TelexFree. Information from other publicly available sites, including BehindMLM.com, RealScam.com and others, also is referenced.

    The purpose of the PP Blog is to make information available to a wide audience interested in Ponzi schemes, pyramid schemes, securities-fraud schemes and concerns about the interconnectivity of such schemes. The Blog was not consulted about the inclusion of its links or quoted material from the Blog. Nor was the Blog compensated. The PP Blog has no association with the class-action attorneys, who obviously are readers of the Blog and the other online publications.

    **__________________________**

    Still promoting MLM HYIP schemes in the face of evidence they cause intractable financial, legal and emotional pain that sometimes mushrooms to involve hundreds of thousands of people?

    On March 9, 2015, the PP Blog reported that the name of “MyAdvertisingPays” was referenced in a TelexFree-related proposed class-action lawsuit filed in U.S. District Court for the Southern District of New York in December 2014.

    The filing appeared to mark the first time MyAdvertisingPays, known in shorthand as MAPS, was referenced in a federal-court filing.

    History shows that such references are closely watched by law enforcement. Indeed, they sometimes serve as unofficial triggering actions and presage federal regulatory action by civil authorities such as the SEC and even actions by agencies empowered to enforce criminal laws.

    When the California Department of Business Oversight was investigating the WCM777 scam in 2013, for instance, TelexFree’s name popped up in the context of the cross-promotion of MLM HYIP schemes.

    This was months before it became known that the SEC and the U.S. Department of Homeland Security were investigating TelexFree, alleged to have gathered at least $1.6 billion in a combined pyramid- and Ponzi scheme.

    MyAdvertisingPays, a purported advertising “program” similar to the 2008 AdSurfDaily Ponzi scheme and the bizarre Banners Broker scheme alleged in Canada to be a criminal enterprise, was not named a defendant in the proposed December 2014 TelexFree class action.

    Instead, the complaint alleged that TelexFree huckster Daniil Shoyfer was “the largest single Promoter” of TelexFree “in the greater New York area.” Web records showed that Shoyfer also was promoting MAPS alongside MAPS colleagues such as U.K. hucksters Simon Stepsys and Shaun Smith.

    Smith is alleged by the receiver in the Zeek Rewards Ponzi- and pyramid case to be one of the largest Zeek “winners” in the United Kingdom.

    Willfully blind and supremely disingenuous MLM HYIP promoters moving from one cross-border fraud scheme to another has been a longtime problem. Such promoters may have little of their own money invested, but contribute to a condition under which banks and payment processors become warehouses for fraudulent proceeds cycling between and among scams.

    New York is the financial center of the United States. The filing of the proposed TelexFree class action there contributed to questions about whether MAPS soon would be on the U.S. regulatory and enforcement radar.

    The answer to that question remains unclear. What is clear is that the New York complaint was transferred to Massachusetts, the U.S. home base of TelexFree. And it’s also clear that Shoyfer has been named a defendant in an amended TelexFree class-action complaint filed April 30 in Massachusetts federal court.

    Among the allegations against Shoyfer (italics added/light editing performed/formatting not precise):

    TelexFree changed its compensation plan on or about March 9, 2014, much to the fury of affiliates, noted below. Shoyfer, however, continued to promote it unremittingly, sending group text messages to his network with such as the following:

    Hey..my team Telexfree! ! And here we go again..Come to check out and learn about new compensation plan TF 2.0.. and how to grow it even faster and MUCH more aggressively and efficiently than the one we had before.…Here is this week’s schedule. . Monday 03/24 at Salon Delacqua (2027 86 str) at 8.00 pm (in English) ..Wednesday 03/26 at SOHO launch(2213 65th street) at 7.45 pm ( in Russian) and Thursday 03/27 at 7.30 pm at 63-112 Woodhaven Blvd in a real estate office. In my case, since I have started from absulute zero during this passed week Mon 03/17- Sun 03/23/14 I booked 11,500 from new one and 21,600 still coming from old plan..A total of 31,100 in 7 short days… Go Telex!!!

    After the institution of the new TelexFree compensation plan in March 2014, Shoyfer took part in a closed meeting with TelexFree’s directors and owners in Marlborough, Massachusetts, at which Shoyfer was instructed not to discuss the new TelexFree compensation plan with others and non-insiders, as the new compensation plan was detrimental to Promoters and was adopted to forestall [TelexFree] filing bankruptcy.

    So, a man who allegedly promoted TelexFree and had inside information detrimental to ordinary TelexFree affiliates allegedly kept it to himself, continued to promote the scheme — and then moved on to MAPS. This naturally leads to questions about whether Shoyfer has kept information from ordinary MAPS members.

    Purpose Of The Amended TelexFree Class Action

    The complaint is an effort to consolidate for the sake of efficiency various TelexFree-related class actions filed in various courts. Such actions were filed in multiple U.S. states.

    But that’s not the only news: The amended complaint also names TelexFree pitchman Scott Miller a defendant alongside Shoyfer and HYIP huckster Faith Sloan. In documents prepared by Zeek receiver Kenneth D. Bell, Miller’s name appears as an alleged winner in the $897 million Zeek scheme.

    In 2013, Miller promoted TelexFree through a publication known as Home Business Advertiser. Another advertiser promoted a cash-gifting scheme. A columnist described Jesus Christ as the person who inspired modern network marketers through his recruitment of 12 disciples.

    A Semacon cash-counting machine appeared as a stage prop in a cash-gifting video advertised in Home Business Advertiser. The promos appeared after two women in Connecticut were sentenced to federal prison for their roles in a cash-gifting scheme and tax fraud.

    Sloan, charged by the SEC last year with securities fraud for her alleged role in TelexFree, also promoted Zeek. She also harrumphed for Profitable Sunrise, an abomination taken down by the SEC in 2013, and Noobing, an HYIP targeted at people with hearing impairments that effectively was litigated into the ground by a court-appointed receiver.

    Also named promoter-defendants in the amended TelexFree class action are Sanderley Rodrigues de Vasconcelos (Sann Rodrigues), a two-time SEC defendant in pyramid-scheme cases who allegedly also claimed his actions were inspired by a deity; Santiago de la Rosa; and Randy N. Crosby.

    All three men, plus Sloan, also are defendants in the SEC action. Rodrigues, who pushed the IFreeX scheme after TelexFree, was arrested last month on a charge of immigration fraud. Tight bail conditions were imposed on him.

    How the promoter-defendants will pay for their defenses in the amended class action is an open question. One of the risks of promoting such schemes is to be left totally on your own if the government or class-action attorneys file lawsuits.

    Another open question is whether other shoes will drop in the government actions. The government probes are ongoing. Some of the class-action defendants conceivably could become defendants in amended or new actions filed by the SEC or agencies that have criminal enforcement power.

    The amended TelexFree class action asserts fraud claims under Massachusetts law against a slew of defendants, including financial vendors and MLM attorney Gerald Nehra, also a figure in the the Zeek scheme and the AdSurfDaily Ponzi-scheme story. ASD was a $119 million Ponzi scheme broken up by the U.S. Secret Service in 2008. ASD operator Andy Bowdoin was sentenced to federal prison in 2012, after authorities tied him to at least two other cross-border fraud schemes: OneX and AdViewGlobal.

    ASD’s name is referenced repeatedly in the amended TelexFree complaint, as is the name of Zeek. When the complaint will be heard is anyone’s guess. That’s because there are unresolved criminal matters against alleged TelexFree principals James Merrill and Carlos Wanzeler, both of whom are named defendants in the amended complaint and also are among the subjects of the SEC complaint.

    Katia Wanzeler, Wanzeler’s wife, also is named a defendant in the amended complaint. So is TelexFree figure Joe Craft, another defendant in the SEC action. Brazilian TelexFree figure Carlos Costa also is named a defendant in the amended class action.

    Also named a defendant in the amended class action is Jason “Jay” Borromei of Laguna Niguel, Calif. Along with a company known as Opt3, he is accused of “intentionally, knowingly, unfairly and deceptively set[ting] up TelexFree’s United States-based servers in Brazil with the intent of directly furthering, aiding or abetting their unlawful and fraudulent operation, including facilitating the placement of evidence of the Pyramid Scheme beyond the jurisdiction of the United States’ courts.”

    With TelexFree itself in bankruptcy court, the class-action plaintiffs contend that “Opt3 and Borromei have a history of providing technical services within the multilevel marketing industry and hold themselves out as having related specialized knowledge. For example, Borromei previously served as chief information officer of Joystar, Inc., later renamed Travelstar, a multilevel marketing company that collapsed in approximately late 2008, and subsequently entered involuntary chapter 7 bankruptcy.”

    Though not named a defendant in the amended class action, TelexFree and Zeek figure Tom More also is referenced in the 200-page complaint.

    ‘Private Jet’ Gets A Mention

    On March 9, 2014, the PP Blog reported that a person who took the stage at a TelexFree rah-rah fest in Massachusetts asserted that TelexFree had access to a “private jet” that recently had ventured to the Dominican Republic and Haiti.

    The “private jet” also was referenced in the class-action complaint. Details about it remain unclear.

    At the moment, the April 30, 2015, amended and consolidated complaint is posted here at the website of class-action attorney Robert Bonsignore.

  • Early Morning Attack On Dallas Police

    This police car was hit by a hail of gunfire outside of Dallas Police Headquarters this morning. Source: Dallas Police Departmenta, via Twitter.
    This police car was hit by a hail of gunfire outside of Dallas Police Headquarters this morning. Source: Dallas Police Department, via Twitter.

    DEVELOPING STORY: (2nd Update 1:22 p.m. EDT U.S.A.) An attack on Dallas police involving gunfire and bombs occurred early today at about 12:27 a.m. local time. The attack occurred outside Jack Evans Police Headquarters. The occupied building, which was hit by gunfire, is named after a former Dallas mayor and businessman.

    A police car outside was shot at and rammed by the suspect vehicle, which appears to be a blue van that may have the protections of armor and bullet-proof glass. One or more pipe bombs in a “bag” were found outside headquarters and exploded when picked up by a robot, police said.

    It initially was believed from witness statements that multiple suspects were involved in the attack, but developing information suggests it was a lone gunman/bomber. No police officer has been injured so far, authorities said.

    After being shot at, Dallas police shot back, and a chase ensued. The chase, police said, led “south of Dallas to the parking lot of a Jack in the Box at 121 South Interstate 45 Service Road in Hutchins.” Another gun battle occurred there, police said.

    At approximately 4:35 a.m., police fired a .50 caliber weapon into the vehicle to disable it, the department said. It is possible the suspect is dead, police said moments ago on Twitter.

    There is concern the van may be laden with explosives.

  • ‘Sovereign Citizen’ Suspected Of Murdering Edmonton Police Officer In Violent Attack: Was Home Booby-Trapped?

    “It is with deep sadness that I learned that Constable Daniel Woodall had been fatally shot in the line of duty, protecting the people of Edmonton. On behalf of all Canadians, Laureen and I offer our deepest condolences to his family, friends and colleagues. We also pray for the full and speedy recovery of Sergeant Jason Harley who was shot in the same incident. It is a very difficult reminder that police officers across our country put their lives on the line every day to serve and protect our communities and keep us safe. Constable Woodall’s service to Edmonton and to Canada will be remembered and honoured. We grieve his loss today with Alberta and the rest of the country.” — Stephen Harper, Prime Minister of Canada, June 9, 2015

    Constable Daniel Woodall. Source: Edmonton Police Service.
    Constable Daniel Woodall. Source: Edmonton Police Service.

    On Monday, 35-year-old Constable Daniel Woodall of the Edmonton Police Service went to the home of Norman Walter Raddatz at 7:50 p.m. to serve a bylaw warrant and new charges of criminal harassment against Raddatz. He was accompanied by other officers, including Southwest Division Patrol Sgt. Jason Harley, 38.

    Woodall, a husband and father of two, was a member of the EPS Hate Crimes Unit.

    From the National Post in a story dated June 11 (italics added):

    Edmonton Police Service spokesman Scott Pattison said Wednesday the criminal harassment file being investigated by Woodall and the hate crimes unit involved anti-Semitic harassment over more than a year.

    Grim Coincidences

    Woodall has things in common with Officer Wenjian Liu of the New York Police Department. Both men, for example, wanted to protect and to serve through a career in law enforcement. Liu came to the United States from China. Woodall came to Canada from England.

    Both men died violently and senselessly: Liu from gunshot wounds that also killed his NYPD partner Officer Rafael Ramos as they sat in their police vehicle in Brooklyn on an otherwise normal Saturday afternoon. Their ambusher/murderer was Ismaaiyl Abdullah Brinsley, who later killed himself.

    Woodall died on an otherwise normal Monday night in a hail of gunfire, apparently from a high-powered rifle fired by Raddatz, whose behavior was consistent with some so-called “sovereign citizens.”

    The investigation isn’t complete, but some purported “sovereigns” have been alleged to have booby-trapped their homes — perhaps by rigging them with explosive devices as was an alleged case in Ohio last year.

    After 53 bullets allegedly were fired in the direction of Woodall, Harley and the other officers, the Raddatz home went up in flames. Woodall suffered a catastrophic gunshot wound, his death ruled a homicide. Harley was struck in the back and wounded. He survived.

    If the incident proves to be a murder-suicide, it will be something else Woodall and Liu had in common: two officers killed by men who killed themselves.

    “A body believed to be that of Raddatz, was recovered in the charred basement ruins,” according to the Hatewatch Blog of the Southern Poverty Law Center.

    From the Hatewatch Blog (italics added):

    Norman Walter Raddatz, the 42-year-old unemployed mechanic who fatally shot a Canadian hate crimes investigator this week, was not only an antigovernment “sovereign citizen,” but also a regular poster of anti-Semitic messages on the Internet.

    For the past 18 months, the cop killer was involved in a “lengthy campaign of anti-Semitic hatred and violence” against a Jewish family in Edmonton, Alberta, bombarding them with escalating threats of violence, various media outlets reported today.

    Raddatz also was homophobic, using Facebook accounts to call gay people “sodomites” alongside crude jokes about the film “Brokeback Mountain.”

    “This is a tragic night for the Edmonton Police Service and our city,” EPS Chief Rod Knecht said in a statement late Monday. “I am extremely saddened to have to announce the death of one of our officers and the serious injury to another officer this evening.”

    In Canada, “sovereign citizens” sometimes are known as “freemen on the land.” There have been various strange occurrences in Alberta. (Read about one here. Read about another here.)

    In the video below, Chief Knecht says 53 bullet holes were found in the house and garage across the street from the Raddatz residence. They were from the fusillade fired at the officers.

  • Court Approves Zeek Receiver’s Settlement With MLM Attorney Kevin Grimes, Law Firm

    A "Certificate of Completion" for a compliance course Zeek receiver Kenneth D. Bell alleged to be bogus. Source: Federal court filing.
    A “Certificate of Completion” for a compliance course Zeek receiver Kenneth D. Bell alleged to be bogus. Source: Federal court filing in 2012.

    UPDATED 10:44 A.M. EDT U.S.A. In an amended complaint filed in August 2014, Zeek Rewards’ receiver Kenneth D. Bell sued MLM attorney Kevin Grimes, the Grimes & Reese law firm and a Grimes-related entity known as MLM Compliance VT LLC.

    Among other things, Bell alleged that Grimes and MLM Compliance received $843,000 from the Zeek pyramid- and Ponzi scheme through the sale of a “bogus compliance course.”

    Bell further alleged that “[t]he final payment from [Zeek operator Rex Venture Group] to Grimes and MLM Compliance was, upon information and belief, a check rushed to and [e]ndorsed by Kevin D. Grimes for $342,510, which posted on August 13, 2012, less than a week prior to ZeekRewards’ shutdown.”

    The course, Bell alleged, served as “window dressing” for the Zeek fraud.

    By April 2015, Bell and the defendants had entered settlement talks through mediation, according to court filings. In late May, there was news of a definitive settlement agreement. The sum was not immediately known.

    On June 2, the sum became known: $1.175 million. How the figure was arrived at was not immediately clear. The number, however, appears to absorb the entire $843,000 Grimes and MLM Compliance allegedly received through sales of the compliance course alleged to be bogus. It also appears to erase virtually all of the $342,510 Grimes and MLM Compliance allegedly received via a “rushed” check in Zeek’s closing days and hours.

    As part of the settlement agreement docketed June 3, Grimes and the other defendants “do not admit to any wrongdoing or liability to the Receiver and the Receiver does not admit that the Defendants should be exonerated from liability for the wrongdoing alleged by the Receiver in the Grimes lawsuit.”

    Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina has approved the settlement.

    The parties specified in the settlement that they wished to enter the agreement “for the purposes of resolving these disputed matters and to avoid the cost and expense of litigation.” All parties will bear their own attorneys’ fees and costs.

    Mullen ruled that the settlement was “in the best interest of the Zeek victims.”

    NOTE: Our thanks to the ASD Updates Blog.

  • RECEIVER: Zeek Winner ‘sovlife’ Created 80 Victims In Cross-Border Ponzi/Pyramid Scheme

    recommendedreading1UPDATED 11:45 P.M. EDT U.S.A. David Ian MacGregor Fraser, a New Zealand resident who used the handle “sovlife” and is challenging a U.S. court’s jurisdiction over him in Zeek Rewards’ clawback actions, enrolled 96 paying members — 80 of whom were “victims,” according to court-appointed receiver Kenneth D. Bell.

    Those 80 victims lost a total of $131,063.95, Bell alleged, citing calculations by FTI Consulting Inc., a forensic and litigation firm assisting the receivership.

    It is unclear from filings whether MacGregor Fraser also created a small subset of winners among his alleged 96 recruits and whether those people are being sued for the return of Zeek hauls. Bell has sued thousands of alleged winners with U.S. addresses and dozens of individuals with overseas addresses.

    In court filings last month, MacGregor Fraser said he joined Zeek in “November 2011″ while he was a “resident of Malaysia” and maintaining “a Post Office Box in New Zealand.”

    Eleven of the alleged 80 MacGregor Fraser victims have filed claims and received a distribution from the receivership estate, Bell asserted. He further alleged that MacGregor Fraser hauled $89,722 out of Zeek, but “invested only $828.00 USD.”

    Although MacGregor Fraser argued last month that he had “no specific knowledge that ZeekRewards was initiated from the United States” and that he was was “unaware that ZeekRewards originated in North Carolina,” Bell disputed those contentions in court filings yesterday.

    From the receiver’s argument that Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina should reject MacGregor Fraser’s jurisdiction claims and motion to dismiss (italics added/light editing performed/formatting not precise):

     

    [Zeek operator Rex Venture Group] made known to anyone interested in the ZeekRewards program that the company was based in North Carolina, in the United States of America. At the top of the ZeekRewards homepage, where Defendant Fraser logged in every day, there was a conspicuous “About Us” link.  . . .  A single click on the “About Us” link disclosed the following:

    Zeekler and ZeekRewards are owned by Rex Venture Group LLC, a subsidiary of Lighthouse America, US (NV) company. The company was established on June 24, 1997 and adopted the d/b/a Lighthouse America later that year.

    Our headquarters is located in the beautiful town of Lexington, NC, USA on the I- 85 corridor connection [sic] Charlotte and Raleigh . . . .

    . . . The “About Us” page further stated:

    Office Hours & Location

    Home office is located at 803 West Center St., Lexington, NC 27292
    Zeekler & ZeekRewards primarily operates online with skype and email support.
    Office hours are 9:30AM to 5:00PM EST Monday – Friday . . .

    . . . And, there was no question that the company not only was headquartered in but also operated in the USA. The ZeekRewards homepage stated:

    Here’s How It Works:

    Each night after the close of the business day (east coast USA time) the company tallies its sales and shares up to 50% of its net profits with its qualified affiliates . . .

    Moreover, on the “How It Works” section of the ZeekRewards website, there is an image of United States currency at the top of the page . . .

     

    “From the day he signed up with ZeekRewards, Fraser actively directed efforts and attention to ZeekRewards, in North Carolina, every day until the scheme’s collapse in August 2012,” Bell argued. “Starting on November 4, 2011 and continuing through August 16, 2012, when ZeekRewards was shut down, Fraser logged into his ‘back office’ page to report his having met the so-called daily ‘advertising’ requirement. . . . . In addition, on a frequent, often weekly basis, Defendant Fraser logged in to the ZeekRewards site to request a cash-out payment from them scheme. These payments came from ZeekRewards’ account at a bank in North Carolina and all the money Defendant Fraser requested and received from ZeekRewards was stated in US dollars . . .

    “. . . Moreover, Defendant Fraser also directed his actions to North Carolina through the ZeekRewards site by frequently changing the allocation of his daily ‘Retail Profit Pool’ (‘RPP’) payouts between the repurchase of VIP bids and ‘available cash.’ . . .

    Exhibits submitted by Bell include several screen shots. That MacGregor Fraser used a computer overseas should not be a barrier to holding him accountable to return his winnings, Bell contended.

    “Fraser knew or should have known that if he purposefully availed himself of an opportunity to make money in North Carolina (whether or not he cared to find out the location of the scheme) that any claims related to his participation might be brought in a court in North Carolina,” Bell argued. “To hold otherwise would be to allow individuals outside the state to intentionally come to North Carolina electronically and engage in conduct that subjects them to claims but effectively avoid liability because of the distance and cost of pursuing them outside of North Carolina.

    “Fraser even falsely claims that there was supposedly no ‘injury’ from his actions – the 80 victims he recruited to the scheme would undoubtedly disagree. Accordingly, it is both fair and just for this Court to exercise jurisdiction over Defendant Fraser based on his intentional, repeated and extensive participation in the ZeekRewards scheme in North Carolina.”

    NOTE: Our thanks to the ASD Updates Blog.

  • WCM777 Claims Process Proposed: RECEIVER

    wcm777WCM777 claims will be accepted in the not-too-distant future, under a proposal by Krista L. Freitag, the court-appointed receiver in the SEC’s pyramid- and Ponzi-scheme case.

    The proposal, which includes time guidelines but no specific date upon which claims will be accepted, was submitted to U.S. District Judge John F. Walter of the Central District of California on June 3.  Walter must approve the plan. The dates will become clear once the plan, which is subject to objections and amendments, is approved.

    EDITORIAL NOTE: IMPORTANT: There is no way to file claims right now, but it perhaps is best to assemble your documentation now — before the filing date and deadlines are announced. As is typical in HYIP scams, WCM777’s books and records allegedly were a mess. In formulating the plan, Freitag says she also has taken the cross-border nature of the scheme into account, but budgeting also is a concern.

    Says the receiver, “The notice, the physical claim form, the claim form website and call center will be presented in six languages – English, Spanish, Mandarin, Portuguese, Taiwanese and Japanese. While this does not cover all languages for known investors (because the cost of translation is significant), these six languages account for nearly 90% of investors who received and opened my October 2014 e-blast notification.”

    Read the plan and the supporting motion.  Read other documents at the receiver’s website.

    Freitag says in court filings that she has gathered about $20 million since she was appointed receiver about 14 months ago.  WCM777 and associated entities are alleged to have hauled $80 million or more through 77 domestic bank accounts and 23 foreign ones.

    Up to 96,000 claimants could come forward, according to an estimate by Freitag. She has nominated Epiq Systems — Class Action & Mass Tort Solutions. Inc., to be the claims administrator.

    Snippet From The Proposal

    We highly recommend you read the receiver’s plan to gain an understanding of the specifics before the claims process begins. The information below is from the plan and speaks to the difficulties scams such as WCM777 present (italics/bolding added):

    3. In formulating procedures for the administration of claims, my goal is to find an efficient and cost effective means to verify and validate investor and creditor claims. In a best case scenario, a receiver transmits the receivership entity’s estimated claim amounts to claimants as part of the proof of claim form and simply seeks confirmation of the claim information. In other cases, a receiver requests claim information and matches the information received from claimants with information found in the records of the receivership entities or backup information provided by investors. Here, these approaches are simply not feasible because there are not reliable, detailed records reflecting who invested and how much was invested.

    4. Three additional factors impact the claims review process in this case. First, a significant number of investors did not invest directly with the Receivership Entities, but rather invested through other individuals and entities. That is, many investors gave their money to another individual who pooled the money from multiple investors for a lump sum deposit with the Receivership Entities. This makes the process of matching claims to deposits far more complicated as the Receivership Entities’ records do not accurately reflect each individual investor’s payment.

    5. Second, there are many thousands of investors from many countries around the world and the records indicate that the majority of these investors speak at a minimum six different languages. This makes the cost of all phases of the claims process, including manually reviewing claims, extremely expensive.

    6. Third, there is the issue of “points.” As the Court will recall from the Commission’s filings, WCM, the third parties involved in pooling, and some insiders issued or sold points to investors. These points were not formally ascribed any particular value. However, the records show that an extensive marketplace for points developed that was independent of the WCM enterprise. While there was no value ascribed to such points by the Receivership Entities, investors and others purchased, sold, traded and valued the points as if they could be exchanged for cash or goods. As such, the expectation is that many investors will provide claim information based on misconceptions related to the value of their points as well as their cash investment in the Receivership Entities. This issue may also dramatically impact the estimated number of ‘known’ investors as those who traded or otherwise sold points may not have ‘registered’ themselves in the company databases.

     

  • BULLETIN: Bulgarian Responsible For Avon Stock Manipulation Last Month, SEC Charges

    breakingnews72The SEC has gone to federal court in the Southern District of New York, alleging that a Bulgarian is responsible for the manipulation of Avon’s stock price last month though a false filing in the agency’s EDGAR database.

    Avon, an American network-marketing company famous for cosmetics, was only one of the companies targeted, the SEC said.

    Bulgaria is a former Soviet bloc country in Southeast Europe. Its capital is Sofia. The incident effectively turned the SEC’s website into a crime scene and led to questions about whether fraudsters were reaching across continents and oceans to carry out their criminal whims in the U.S. marketplace.

    Named defendants in the SEC’s action are Nedko Nedev, who allegedly used an address in Sofia; Strategic Capital Partners Muster Ltd.; Strategic Wealth Investments Inc.; PTG Capital Partners LTD; and PST Capital Group LTD.

    Each of the companies is described in the SEC complaint as highly dubious, with purported bases of operation in places such as London, the British Virgin Islands and Henderson, Nev.

    PST “allegedly made a false EDGAR filing in a 2012 scheme involving the stock of Rocky Mountain Chocolate Factory,” the SEC said. “The defendants also are charged with a similar scheme in 2014 involving Tower Group International Ltd., which involved a false press release instead of an EDGAR filing.

    “The schemes followed similar patterns where the accounts had substantial holdings in a company that had been losing value and the companies’ stock values substantially increased after a false filing or press release originating from Bulgaria,” the agency said.

    From the SEC's complaint against Nedev and several purported companies.
    From the SEC’s complaint against Nedev and several purported companies.

    A federal judge has approved an asset freeze that will protect about $2 million in brokerage accounts, at least one of which has been linked to Nedev, the agency said.

    “We used parallel trading analysis to connect the dots and track down these defendants,” said Daniel M. Hawke, chief of the SEC Enforcement Division’s Market Abuse Unit. “Even when traders attempt to hide behind proxy servers, false filings, and phony foreign entities, we are able to quickly identify patterns and relationships to focus our investigation and identify who is behind the manipulative trading.”

    Read the SEC’s statement.

    Read the complaint against Nedev and the purported companies.

  • Office Of U.S. Trustee Says It Will Challenge Fee Applications In TelexFree Bankruptcy Case

    newtelexfreelogoUPDATED 12:32 P.M. EDT U.S.A. A component of the U.S. Department of Justice has informed U.S. Bankruptcy Judge Melvin S. Hoffman that it will object to fee applications filed by two firms assisting Stephen B. Darr, the court-appointed trustee in the TelexFree bankruptcy case in Massachusetts.

    In court filings yesterday, the office of U.S. Trustee William K. Harrington did not say precisely why it intended to challenge the billings. The two firms assisting Darr are Mesirow Financial Consulting LLC and Murphy & King, Professional Corporation, a law firm.

    Harrington’s office said it will file a formal objection tomorrow with the assent of both Mesirow and M&K. Hoffman approved the request of Harrington’s office to file on June 5, instead of the original deadline of June 3. A hearing is scheduled June 10 to consider the applications and objections to them.

    Mesirow is seeking $1,629,430, plus $20,942.56 in expenses incurred from June 5, 2014 through Feb. 28, 2015. M&K is seeking $1,307,858.50, plus $36,116.25 in expenses from June 6, 2014 through March 31, 2015. Both firms have said in court filings that they have assisted Darr in the recovery of more than $17 million so far.

    Read the motion by Harrington’s office to object to the fee applications.

    Read other filings in the TelexFree bankruptcy case. (The fee applications are Court Docket Nos. 0599 and 0598, both filed May 5, 2015.)

    Visit the website of the U.S. Trustee.