PatrickPretty.com

Tag: Nathaniel Woods

  • BULLETIN: Receiver Re-Serves Zeek Member Who Sought To Quash Subpoena

    BULLETIN: An apparent Florida member of the Zeek Rewards “program” who claimed last week that the court-appointed receiver situated in North Carolina had served a subpoena improperly from the Tar Heel state via U.S. Mail now has been served again — this time through a more expensive process that involved certified U.S. Mail, FedEx and a Florida federal district court.

    Receiver Kenneth D. Bell said in a court filing today in North Carolina that he had sent a revised subpoena to Nathaniel Woods of Ocala, Fla.

    This time, the subpoena was issued by U.S. District Court for the Middle District of Florida, as opposed to U.S. District Court for the Western District of North Carolina, Bell said.

    And it was sent by both certified mail and FedEx, Bell noted, adding that the subpoena “requires the requested documents to be produced at a location in Jacksonville, Florida, less than 100-miles from Mr. Woods’ residence in Ocala.”

    Jacksonville is approximately 85 miles from Ocala. The address at which the documents must be produced is the Jacksonville office of the McGuireWoods law firm. The firm is counsel for the receiver and also has an office in Charlotte, N.C.

    The implication is that Woods now will have to travel from Ocala to Jacksonville to comply with the second subpoena. In the initial process, he could have mailed the requested documents to North Carolina, the home base of the receivership.

    Senior U.S. District Judge Graham C. Mullen now should rule Woods’ objections to the manner in which he initially was served moot, Bell argued.

    Mullen is overseeing the Zeek case from the Western District of North Carolina.

    Bell’s earlier method of serving subpoenas was designed to save money, he advised the judge.

    From the receiver’s filing today (italics added):

    One of these subpoena recipients, Nathaniel Woods, admittedly received his subpoena, but has filed a motion to quash his subpoena on various procedural grounds. The Receiver’s initial investigation found that Mr. Woods may have received more than $500,000 in other people’s money in net winnings from this scheme. Thus, the documents sought by the Receiver from Mr. Woods are clearly relevant, and are at least likely to lead to relevant and admissible evidence. Indeed, Mr. Woods could simply have contacted the Receiver to discuss or object to the original subpoena or obtain more time to respond, as many other subpoena recipients have done. The Receiver has worked with everyone who has responded in good faith to obtain relevant documents on an agreed schedule. Many recipients are also pursuing the opportunity offered by the Receiver to reach a prompt settlement of the fraudulent transfer claims.

    Thus, Mr. Woods’ motion to quash only serves to delay – on the grounds of form, not substance – the production of documents to which the Receiver is undoubtedly entitled in his role as appointed by this Court.

    Bell also advised Mullen that the first batch of subpoenas that went out earlier this month were targeted at “approximately 1,200 of the largest net winners of the Zeek Rewards scheme.

    “On average,” Bell advised the judge, “these net winners made over $100,000 from the scheme’s victims.”

    From the initial mailing of “approximately 1,200 subpoenas,” the receiver said, “to date only 26 have been returned as undeliverable, confirming the Receiver’s belief that this initial method of delivery would accomplish the practical goal of actual notice.”

    And, he noted, “It would have cost more than five times as much to serve the subpoenas via certified mail or FedEx and taken far longer to issue them from numerous judicial districts and make arrangements for production of the documents within 100 miles of each address.”

    The goal of the initial mailing “was to implement a streamlined process that would most effectively begin the process of recovering Receivership Assets and initiating a dialogue with the net winners who are willing to cooperate with the Receiver in gathering information and discussing the return of fraudulently transferred funds,” Bell said.

    In August, the SEC described Zeek as a $600 million Ponzi scheme and pyramid fraud.

     

  • Nathaniel Woods Plants Seed That Zeek Receiver Issued ‘Bogus Subpoena’ And Committed Felony; Claims Reminiscent Of Assertions Made In AdSurfDaily Ponzi Case

    UPDATED 5 P.M. ET (U.S.A.) Various members of the Florida-based AdSurfDaily 1-percent-a-day Ponzi scheme advanced various theories that judges, prosecutors and investigators committed various felonies during the course of the probe and follow-up actions in court. The claims were absurd on their face and, when the arguments were rejected, they were replaced by conspiracy theories. Time after time the conspiracy theories expanded to accommodate unpleasant fact sets, with various “defenders” of ASD retreating into an infinite set of contingencies and conflating one artificial reality after another.

    Now, a Florida resident and apparent participant in Zeek Rewards has filed a document in federal court that accuses the court-appointed receiver in the Zeek Ponzi scheme case of committing a felony. The receiver, Kenneth D. Bell, is a former federal prosecutor who once successfully prosecuted a Hezbollah terrorist cell operating in the United States.

    The PP Blog contacted the Zeek receivership today to seek comment from Bell. The Blog’s message was not immediately returned.

    In separate filings that appear on the docket of Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina, Nathaniel Woods claimed Bell or Bell’s receivership team unlawfully mailed a “bogus subpoena” to him in Ocala, Fla., thus committing a felony under Florida law.

    Mullen is presiding over the Zeek Ponzi case. In August, the SEC accused Zeek of operating a $600 million Ponzi- and pyramid scheme. Zeek’s business model was very similar to the model of ASD. ASD’s business practices triggered both civil and criminal investigations by the U.S. Secret Service in 2008.

    The subpoena, Woods claims, was meant for the purposes of “intimidation and harassment” on the part of the receiver.

    And Woods further claims that sending a “bogus subpoena” from North Carolina to Florida through the U.S. Mail constitutes “simulated process” under Florida law, a “third degree felony.”

    An accompanying document filed by Woods as an exhibit claims that “preliminary Zeek Rewards records” reviewed by the the receivership show that Woods received more than $496,000 from Zeek but paid nothing (“$0.00”) into the purported program.

    Bell is seeking the return of the money, describing it as “money lost by victims,” according to the exhibit.

    Woods is seeking to quash the subpoena, which demands records of Woods’ interactions with Zeek dating back to January 2010. He also claims the subpoena was only an “alleged subpoena” and was improperly served.

    A domain styled “500FREEBIDS4U.COM” is registered in the name of Nathaniel Woods at the Ocala street address to which the subpoena was sent, according to records. Other domains listed with an email address that appears on the registration data attributed to Nathanial Woods include Mybidshack10k.com, Mybidshackhow.info, Mybidshack4u.com and Mybidshackearn.info.

    Daryle Douglas, a onetime purported Zeek executive, also has been associated with a MyBidShack entity, according to researcher “K. Chang.”

    Zeek was a purported “penny auction” company operated by Paul R. Burks through Rex Venture Group LLC in Lexington, N.C. The penny-auction site was known as Zeekler. Zeek’s MLM arm was known as Zeek Rewards. Burks has consented to a judgment in the case. He has neither admitted nor denied the SEC’s allegations, which include securities fraud and the sale of unregistered securities.

    On Aug. 17, the U.S. Secret Service said it also was investigating Zeek. The SEC has said Burks duped investors into believing the purported Zeek “program” was paying a legitimate return of about 1.5 percent a day.

    Bell has said that perhaps 1 million people sent money to Zeek. Viewed by the number of potential victims and the number of transactions, Zeek may be the largest Ponzi scheme in U.S. history.

    Earlier this month, Bell said the receivership had gathered evidence that nearly 1 billion transactions were conducted through Zeek in about 18 months.

    AdSurfDaily was a Ponzi scheme that promoted a payout of 1 percent a day. It has about 100,000 members and gathered about $119 million, also in about 18 months, according to records.

    Records suggest that Zeek, which launched after the Secret Service brought the ASD Ponzi case, did about five times the dollar volume of ASD and potentially had 20 times the user volume.

    The civil portion of the ASD case dragged out for all or parts of five years. ASD President Andy Bowdoin admitted in May 2012 that ASD was a Ponzi scheme. In August 2012, less than two weeks after the SEC brought the Zeek case, Bowdoin was sentenced to 78 months in federal prison.

    ASD and Zeek are known to have had members in common.