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Tag: Grimes & Reese

  • 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 Rewards Was ‘Pig’ To Which MLM Lawyers Attemped To Apply ‘Lipstick’ — While One Of The Lawyers Participated On Massive Ponzi Scheme’s ‘Leadership Calls’

    EDITOR’S NOTE: Kevin Grimes, MLM Compliance VT LLC and the Grimes & Reese law firm have argued that the claims against them should be dismissed. Zeek’s receiver argues otherwise, saying a “bogus ‘compliance course’” advanced by Grimes helped dupe the Zeek masses. Zeek affected hundreds of thousands of people, the SEC has said.

    Legal malpractice and other claims against MLM attorney Kevin Grimes, his entity MLM Compliance VT LLC and the Grimes & Reese law firm should stand, the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case said in court filings yesterday.

    One of the reasons, receiver Kenneth D. Bell argued in a motion to Senior U.S. District Judge Graham C. Mullen, is that the defendants “in effect attempted to put lipstick on the ZeekRewards pig.”

    Another reason is that Grimes participated in at least three affiliate “leadership calls” with Zeek insiders and “actively assisted the Insiders in promoting and legitimizing the scheme,” Bell said.

    “Grimes allowed his name and his firm’s name to be used to promote the scheme,” Bell said.

    Mullen should reject bids by the defendants to have the claims dismissed, Bell argued.

    Read the receiver’s argument, courtesy of the ASD Updates Blog.

    Read the Grimes’ brief in support of his motion to dismiss. Read the Grimes & Reese brief in support of its motions to dismiss.

    The SEC has described Zeek as a massive securities fraud that gathered hundreds of millions of dollars in a combined Ponzi- and pyramid scheme.

     

  • BULLETIN: MLM Attorney And Companion Entity Received $843,000 Through Sale Of ‘Bogus Compliance Course’ That Served As ‘Window Dressing’ For Ponzi- And Pyramid Scheme, Zeek Receiver Says

    breakingnews72BULLETIN: (2nd update 9:54 p.m. EDT U.S.A.) MLM attorney Kevin Grimes and a companion entity known as MLM Compliance VT LLC received $843,000 from the Zeek Rewards pyramid- and Ponzi scheme through the sale of a “bogus compliance course,” receiver Kenneth D. Bell has alleged in an amended complaint.

    The amended complaint, filed yesterday, includes MLM Compliance as a defendant. The original complaint filed last month did not. Also new in the amended complaint is the figure of $843,000. The original complaint did not specify a specific sum.

    Co-defendants also include Grimes and the Grimes & Reese law firm.

    “In total, Grimes and MLM Compliance received approximately $843,000 from RVG for the bogus course,” Bell alleged. “The final payment from [Zeek operator Rex Venture Group] to Grimes and MLM Compliance was, upon information and belief, a check rushed to and indorsed 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. The SEC shut down Zeek on Aug. 17, 2012.

    Some MLMers immediately raced to other fraud schemes — after participating not only in Zeek, but in the AdSurfDaily MLM Ponzi scheme and other “programs.”

    Zeek gathered on the order of $850 million in a combined pyramid- and Ponzi scheme that operated for about two years. It was “an internet based so-called ‘MLM’ (multi-level marketing) program,” Bell said.

    Grimes and MLM Compliance engaged in “Unfair and Deceptive Trade Practices” by creating the course, which “served to bolster what they knew to be an unlawful scheme,” Bell alleged.

    Bell is suing Grimes and the Grimes and Reese firm for a sum in excess of $100 million, alleging they were unjustly enriched and engaged in Legal Malpractice, Negligence, Breach of Fiduciary Duty and Aiding and Abetting Breach of Fiduciary Duty.

    Our thanks to the ASD Updates Blog.

    See June 25, 2014, PP Blog story.