UPDATED 3:07 P.M. EDT U.S.A. Darren Miller, an alleged winner of more than $1.635 million in Zeek Rewards and one of the lead defendants in a civil class-action clawback lawsuit filed by Zeek receiver Kenneth D. Bell, repeatedly has invoked his Fifth Amendment right not to incriminate himself, according to new court filings by Miller.
In response to Bell’s 2014 clawback action in which the receiver seeks return of the winnings plus interest, Miller, of Coeur d’Alene, Idaho, also marked “sic” next to mentions of himself as a defendant. Bell is suing Miller and more than 9,000 alleged Zeek “winners.” The case is styled Bell v. Disner.
Miller appears to have invoked the Fifth Amendment 41 times in response to 41 inquiries from Bell — 14 questions and 27 requests for documents.
His response provides an overview of the sorts of questions Bell asked alleged “winners” through interrogatories. It also provides an overview of the type of documents sought from defendants by the receiver. Zeek was part of Rex Venture Group or RVG, alleged by the SEC and federal prosecutors to have been a North Carolina-based Ponzi- and pyramid scheme that gathered hundreds of millions of dollars before the SEC shut it down in August 2012.
The Zeek clawback litigation itself shows the perils of pushing MLM schemes authorities deem to be fraudulent. Not only is money received from a “program” at great risk of clawback, expensive and emotionally draining legal proceedings on multiple fronts may ensue. Some defendants even may fear criminal prosecution.
At the same time, the Zeek clawback actions may provide something of a preview of what’s in store for tens of thousands of TelexFree “winners” pursued by the trustee in that Massachusetts case for return of their gains. TelexFree also was an MLM scheme.
Pictured below is the first of 14 interrogatories advanced by Bell, according to Miller’s response:
As you can see above, Bell not only asked about Miller’s involvement, he also asked about the involvement of others, potentially including upline sponsors. Here’s how Miller answered Question 1 and 13 others. (Only minor variations such as the Interrogatory number were present.)
For years now, the SEC has expressed concern about scams spreading on social media. Bell also had a question about that — in this case, in Interrogatory 14 (as show below):
In the interrogatories, Bell wanted to know when an individual’s participation began and when it ended. The receiver also was interested in dates and sums and outcomes — such as when money was paid to Zeek and when money was received from the “program” and how it was spent or kept.
Individuals also were asked to name people who had information “related to your defenses or claims,” according to Miller’s response. Meanwhile, they were asked if they contended Zeek was not a Ponzi or pyramid scheme and to provide the names of individuals who could back up the claim.
Bell previously expressed concern that some MLMers were moving from one fraud scheme to another in serial fashion.
On the document front, Bell had 27 specific requests for production, according to Miller’s response. Here is how Miller answered a request to produce documents used “in connection with recruiting persons to participate” in Zeek.
Miller’s response to the 26 other requests for documents was substantially similar.
Also see PP Blog editorial from July 1, 2014: On The War In Zeekland And HYIP Rabbit Holes.
NOTE: Our thanks to the ASD Updates Blog.
URGENT >> BULLETIN >> MOVING: (6th Update 8 p.m. EDT U.S.A.) TelexFree Trustee Stephen B. Darr has sued MLM attorney Gerald Nehra and the Nehra and Waak law firm, alleging they were “actively involved” in promoting TelexFree’s Ponzi scheme and “duping” participants.
