PatrickPretty.com

Tag: Trudy Gilmond LLC

  • BULLETIN: Court Orders $2.1 Million Judgment Against Trudy Gilmond, Key Zeek Rewards’ Clawback Defendant

    breakingnews72UPDATED 9:35 P.M. EDT U.S.A. Saying that Zeek Rewards’ clawback defendant Trudy Gilmond of Vermont “refused” to appear in North Carolina federal court on May 27 as directed, Senior U.S. District Judge Graham C. Mullen has entered a judgment against Gilmond for $2,129,522.27.

    Mullen’s ruling is a significant win for Zeek receiver Kenneth D. Bell. Bell alleged in April that Gilmond and fellow Zeek clawback defendant Jerry Napier of Michigan had failed to defend the actions against them and had missed depositions in Vermont and Detroit, respectively.

    Bell sought default judgments against both Gilmond and Napier and asked Mullen to make them appear in federal court for the Western District of North Carolina to show cause why judgments should not be entered against them.

    “On May 11, 2015, the Court entered an Order directing Trudy Gilmond to personally appear before the Court on May 27, 2015 at 11:00 a.m. to show cause why judgment should not be entered against her as requested by the Receiver,” Mullen wrote in an order dated yesterday. “Ms. Gilmond failed to appear as directed. Indeed she advised the court by letter that she refused to do so.

    “IT IS THEREFORE ORDERED that the Receiver’s Motion is GRANTED and judgment is hereby ENTERED against Defendants Trudy Gilmond and Trudy Gilmond LLC in the amount of $2,129,522.27,” Mullen wrote.

    The news was better for Napier, from whom the receiver is seeking more than $2.041 million.

    Bell informed the court that “Mr. Napier has appeared for a deposition and is cooperating in the production of documents,” Mullen wrote in a separate order dated yesterday.

    NOTE: Our thanks to the ASD Updates Blog.

  • BULLETIN: Receiver Seeks Default Judgments Against Key Zeek Rewards’ Clawback Defendants

    breakingnews72BULLETIN: (6th Update 8:34 p.m. EDT U.S.A.) Zeek Rewards’ receiver Kenneth D. Bell has gone to federal court in the Western District of North Carolina, seeking default judgments against key clawback defendants and alleged “winners” Trudy Gilmond and Jerry Napier, a figure in the AdSurfDaily Ponzi-scheme story.

    Bell is seeking more than $2.129 million from Gilmond. He is seeking more than $2.041 million from Napier.

    Both Gilmond and Napier failed to defend the actions against them — with Gilmond missing an April 3 deposition in Vermont and Napier missing an April 2 deposition in Detroit, Bell wrote in a court filing.

    In the alternative, Bell is asking Senior U.S. District Judge Graham C. Mullen to force Gilmond and Napier to appear in Mullen’s North Carolina courtroom no later than May 15 to “show cause as to why default judgment should not be entered against” them.

    This is from Bell’s assertions against Gilmond (italics added/light editing performed):

    In granting the Receiver’s Motion for Class Certification, the Court held that all Named Defendants, including Ms. Gilmond and her company, would need to “provide the Receiver with any and all evidence of their financial status and the location of all net winnings received from ZeekRewards, including deposition testimony as to the same.” . . .

    Pursuant to this Order, the Receiver noticed Defendants’ deposition for April 3, 2015 in Vermont, Ms. Gilmond’s state of residence, in compliance with the Federal Rules of Civil Procedure. See Ex. 1, Notice of Deposition of Trudy Gilmond and Trudy Gilmond, LLC. The Notice was served on Defendants’ counsel via U.S. mail, hand delivery and email on February 27, 2015. Id. And, after Defendants’ counsel withdrew from the case, the Notice was also sent directly to Ms. Gilmond via email at an email address provided by her now former counsel.

    In spite of the Court’s Order and repeated notice, Ms. Gilmond has refused to appear for her noticed deposition.

    Largely the same assertion was made against Napier.

    Zeek Rewards is believed to be one of the largest MLM/network-marketing Ponzi- and pyramid schemes in U.S. history. The “program” allegedly gathered $897 million.

    The SEC shut down Zeek Rewards in August 2012.

    Even being “flexible on the logistics” of the Gilmond and Napier depositions was not enough to get them to appear, Bell contended.

    From the receiver’s assertions against Napier (italics added):

    In sum, it seems clear that Mr. Napier does not intend to appear for a deposition or produce the related requested documents. He has offered no explanation for his refusal to appear or otherwise defend the action. Accordingly, it is appropriate for the Receiver to move the Court for judgment against Mr. Napier and the alternative relief requested.

    Largely the same assertion was made against Gilmond.

    In the earliest days of the SEC’s action, Gilmond litigated aggressively. She continued to do so as Bell pursued clawbacks from more than 9,000 alleged Zeek winners.

    Why she apparently isn’t doing so now is unclear.

    Bell has expressed concerns that some MLMers/network marketers are moving from one fraud scheme to another.

    NOTE: Our thanks to the ASD Updates Blog.

  • URGENT >> BULLETIN >> MOVING: Court Denies Zeek Winners’ Motions To Dismiss Clawback Actions, Upholds Jurisdiction

    breakingnews72URGENT >> BULLETIN >> MOVING: (3rd Update 10:03 a.m. ET Dec. 10 U.S.A.) The federal judge presiding over clawback cases against alleged Zeek Rewards “winners” has dismissed jurisdictional challenges and a claim by the winners that Zeek was not selling securities under the Howey Test.

    The rulings mean that clawback claims seeking millions of dollars from the winners remain intact.

    Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina also has ruled that the receiver’s request to impose a constructive trust against the winners to prevent further dissipation of Zeek winnings was proper.

    The clawback defendants, including Trudy Gilmond, Trudy Gilmond LLC, Jerry Napier, Darren Miller, Durant Brockett, Rhonda Gates, Innovation Marketing LLC, Aaron Andrews, Shara Andrews, Global Internet Formula Inc., T. Lemont Silver and Karen Silver, had contended the fact they performed some work to score their winnings took a Howey prong out of play because they did not expect profits based solely upon the efforts of others. Absent this prong, the winners argued, receiver Kenneth D. Bell could not prove Zeek was selling unregistered securities as investment contracts.

    “Defendants’ emphasis upon the long hours they worked to recruit . . .  others is misplaced,” Mullen ruled. “Without the essential managerial efforts of [Zeek President Paul] Burks and [Zeek operator Rex Venture Group], no profits would have been generated at all.”

    And, Mullen added, “As the Court finds that it clearly has subject matter jurisdiction, it is unnecessary to address the Receiver’s ancillary and supplemental jurisdiction argument or his argument that the Court also has diversity jurisdiction.”

    Meanwhile, Mullen ruled that the winners’ claims that Bell could not pursue fraudulent-transfer claims under North Carolina law were without merit.

    “Defendants argue that this claim must be dismissed because neither the Receiver nor RVG  (in whose shoes he stands) is a ‘creditor’ as defined in the North Carolina Uniform Fraudulent Transfer Act (‘NCUFTA’) and therefore he has no standing to pursue fraudulent transfer claims. Defendants’ argument is without merit.”

    On the issue of the imposition of a constructive trust against the winners, Mullen ruled (italics added):

    “Defendants’ argument that they should not be subjected to the imposition of a constructive trust because their own fraud is not the subject of the complaint fails. The Complaint sets forth allegations sufficient to show that ‘some other circumstance’ makes it inequitable for these Defendants to retain the funds they received . . .  This ‘other circumstance’ is that Defendants received the funds from an admitted Ponzi and pyramid and that the funds are nothing more than other people’s money wrongfully diverted from RVG. Therefore, Defendants have received property which they ‘ought not, in equity and good conscience, hold and enjoy.’”

    Zeek figures Dawn Wright-Olivares and Daniel Olivares pleaded guilty to investment-fraud conspiracy earlier this year.

     

  • 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.