URGENT >> BULLETIN >> MOVING: Zeek Rewards, the multilevel marketing program married to the penny-auction site Zeekler, is under investigation by the U.S. Secret Service and the Securities and Exchange Commission, the Secret Service confirmed at 4:14 p.m. EDT today.
“There will be no further comment,” said Max Milien, a spokesman for the U.S. Secret Service in Washington.
The Secret Service leads a multiagency electronic crimes Task Force in Charlotte, N.C. The Charlotte Task Force is known by the acronym CMECTF.
Zeek, part of Rex Venture Group LLC, is based in Lexington, N.C. Paul R. Burks is Zeek’s chief executive officer.
The Zeek probe is not the first investigation of its sort in which the Secret Service and the SEC looked into the business practices of online schemes that suggest or promise outsize investment returns. A probe of the Legisi HYIP began in 2007 with an undercover investigation by the Secret Service and state securities regulators in Michigan.
That probe later led to civil charges brought by the SEC and criminal charges brought by the Secret Service.
Legisi operator Gregory McKnight pleaded guilty to wire fraud earlier this year. He is scheduled to be sentenced next month. Legisi gathered more than $72 million.
The Secret Service also led the AdSurfDaily Ponzi probe. ASD President Andy Bowdoin is scheduled to be sentenced Aug. 29.
ASD was a 1-percent-a-day Ponzi scheme that gathered at least $110 million. Zeek Rewards has a similar business model.
With a headline of “Red Carpet Wednesday – URGENT,” the Zeek Blog is reporting that a Red Carpet event scheduled Aug. 22 has been canceled.
Zeek, the operator of the Zeek Rewards MLM “program” and the Zeekler penny auction, provided no explanation for calling off the event. Zeek is a purported arm of Rex Venture Group LLC.
The office of North Carolina Attorney General Roy Cooper said last week that it had opened an “examination” into Zeek’s business practices.
Earlier this week, some members of the AdSurfDaily Ponzi scheme announced a plan to “flood” a federal judge with letters of support for former ASD President Andy Bowdoin, who pleaded guilty to wire fraud in May in the ASD Ponzi case. An email circulating among ASD members that called for the judge to be flooded included two ads for Zeek.
Some Zeek promoters also are known to have promoted ASD, a 1-percent-a-day Ponzi scheme. Two Zeek promoters — Todd Disner and Dwight Owen Schweitzer — sued the United States in November 2011. As part of the lawsuit, Disner and Schweitzer presented a federal judge an opinion from Laggos that ASD was not a Ponzi scheme.
Like ASD, Zeek plants the seed that a return of 1 percent or more per day is possible. And like ASD, Zeek denies it is offering an investment program.
The Dispatch newspaper of Lexington, N.C., published a story today that included a July 31 photograph of Zeek prospects waiting in line, apparently to get a chance to turn over money to the company.
At least one apparent Zeek supporter left a comment that the newspaper’s website that asserted that The Dispatch had printed untrue things about the company and that the reporter who wrote the story had not gone through Zeek “compliance training.”
Some Zeek supporters appear to hold the curious belief that reporters are required not to use the word “investment” when describing the Zeek “program.”
Zeek advises its members not to use the language of investments when describing the “program.” ASD did the same thing.
The U.S. Secret Service raided ASD in 2008, alleging that ASD has a massive Ponzi scheme that sought to avoid the use of the language of investments to keep its 1-percent-a-day program under the government radar.
Bowdoin later was indicted on charges of securities fraud, selling unregistered securities as investment contracts and wire fraud. The 77-year-old ASD patriarch pleaded guilty to wire fraud and faces up to 78 months in federal prison.
Federal prosecutors have asked that Bowdoin be sentenced to the maximum term despite his age, alleging he started a new 1-percent-a-day fraud just two months after the August 2008 Secret Service raid.
We regret to inform you that Red Carpet Wednesday, scheduled for Wednesday, August 22, 2012 has been cancelled. Please continue to monitor our websites for more information to be forthcoming.
“Well we have been dealt a setback today…the judge here agreed with the government to transfer us to the District Court in Washington DC… The same judge who railroaded Andy. I will make a motion for her to recuse herself and if she will not (and she will not) I will take an appeal.” — Remark attributed to Dwight Owen Schweitzer that is contained within email by former AdSurfDaily spokeswoman Sara Mattoon that discusses plan to “flood” a federal judge with letters of support for jailed ASD Ponzi schemer Andy Bowdoin, Aug. 13, 2012
Thomas A. "Andy" Bowdoin
Former AdSurfDaily member Dwight Owen Schweitzer — later to join former ASD colleague Todd Disner as a pitchman for the Zeek Rewards 1-percent-a-day-plus MLM scheme — is quoted in an email circulating among ASD members that ASD President Andy Bowdoin was “railroaded” by a federal judge.
The quotation attributed to Schweitzer was contained within an Aug. 13 email forwarded by Disner after being assembled by former ASD spokeswoman Sara Mattoon. Mattoon has a history of packaging communications friendly to ASD, adding her purported insights to the communications and emailing them to members. The Aug. 13 email calls for ASD members to “flood” a federal judge with letters of support for Bowdoin. The ASD patriarch and veteran securities swindler is scheduled to be sentenced Aug. 29 in the District of Columbia by U.S. District Judge Rosemary Collyer.
Previous Mattoon emails have quoted Kenneth Wayne Leaming, a purported “sovereign citizen” now jailed near Seattle after a 2011 investigation by an FBI Terrorism Task Force. Leaming was accused of filing false liens against at least five public officials involved in the ASD Ponzi case, harboring two fugitives wanted in a separate home-business scheme, being a felon in possession of firearms and uttering a bogus “Bonded Promissory Note” for $1 million.
Leaming, who is not an attorney, was said to be performing legal work on behalf of some ASD members.
In May 2012, Bowdoin pleaded guilty to wire fraud in the ASD Ponzi case and acknowledged that ASD was a Ponzi scheme and that his company never operated lawfully from the inception of its 1-percent-a-day (or more) “program” in 2006. Bowdoin, 77, originally remained free on bond after his guilty plea, pending formal sentencing.
But Bowdoin was jailed in June 2012, after prosecutors presented evidence that Bowdoin continued to promote scams after the U.S. Secret Service seized more than $80 million in ASD-related proceeds in 2008 and after Bowdoin was arrested on ASD-related Ponzi charges in 2010. Prosecutors identified those scams as “OneX,” and AdViewGlobal (AVG).
Like ASD, AVG was a 1-percent-a-day “program.” AVG, which launched in February 2009 after the seizure of ASD-related bank accounts in 2008, vanished mysteriously in the summer of 2009 after issuing threats to members and journalists. AVG was referenced in a lawsuit filed by ASD members who accused Bowdoin of racketeering.
Contained within the forwarded email dated Aug. 13 are at least two ads for the Zeek Rewards’ MLM which, like ASD, plants the seed that a return that corresponds to an annualized return in the hundreds of percent is possible. Precisely why the Zeek ads appeared in the email is unclear. They are attributed to a Zeek affiliate known as “Compassion Ministries” and display Zeek videos produced by USHBB Inc., a company that once produced ads for the Narc That Car pyramid scheme that collapsed in 2010 after the Better Business Bureau raised concerns about Narc and investigative reporters began to write about Narc and produce television reports about the “program.”
Even as the Mattoon email solicited support for Bowdoin as his Aug. 29 sentencing date approaches, it cautions ASD members to “be careful” if they write to Bowdoin in jail because “they read his mail.”
Disner and Schweitzer sued the U.S. government in November 2011, claiming the seizure of ASD’s database was unconstitutional. The lawsuit originally was filed in the Southern District of Florida, but a judge there granted a request by the government to transfer the case to the District of Columbia. The case now appears on the docket in U.S. District Court for the District of Columbia and has been assigned to Collyer.
The Aug. 13 email from Mattoon quotes Schweitzer as saying, “Well we have been dealt a setback today…the judge here agreed with the government to transfer us to the District Court in Washington DC… The same judge who railroaded Andy. I will make a motion for her to recuse herself and if she will not (and she will not) I will take an appeal.”
When suing the United States in November 2011, Disner and Schweitzer relied in part on a purported expert opinion from Keith Laggos that ASD was not a Ponzi scheme. Like Disner and Schweitzer, Laggos also has been linked to the Zeek Rewards’ scheme.
Laggos reportedly was fired as a Zeek “consultant” last month. Details surrounding the reported firing remain unclear.
Zeek is now the subject of an “examination” by North Carolina Attorney General Roy Cooper.
Zeek’s news Blog published this baffling message yesterday (italics added):
Hello Fine People:
The team wanted to let you know there won’t be any training, recruitment or leadership calls for the next few days while planning is going on. Standby for some important announcements. Thank you for your patience!
“The complaints generally seek refunds and say the company has not lived up to its promises.” — Office of North Carolina Attorney General Roy Cooper, Aug. 7, 2012
BULLETIN: The Zeek “program” that marries an MLM scheme (Zeek Rewards) to a penny-auction site (Zeekler) is the subject of a state examination by the office of Attorney General Roy Cooper, the agency said this morning.
Cooper’s office did not provide specifics on what the examination would entail, but Zeek has been asked to provide “documents,” said Noelle Talley, a spokeswoman for Cooper.
“I can tell you that we continue to have concerns about Zeek Rewards and have asked the company to provide us with documents so we can examine its business practices,” Talley said.
Cooper’s office first expressed those concerns publicly in June, after Zeek’s Blog linked to a television station’s report that suggested Zeek had been deemed legal. No such determination had been made, Cooper’s office said at the time.
Meanwhile, Talley said Cooper’s office had set up “a recorded message about Zeek Rewards.”
Such recordings typically are made “when we get a high volume of calls about a particular issue or company,” Talley said.
News about the Zeek examination occurred against the backdrop of a Saturday (Aug. 4) Blog post by Zeek that blasted unspecified “North Carolina Credit Unions” for expressing concerns about the company to Zeek customers. Zeek is a a purported arm of Rex Venture Group LLC. Paul R. Burks is the chief executive officer of Zeek.
Talley declined to comment when asked about whether Cooper’s office was aware of Saturday’s post on the Zeek Blog, which accused the credit unions of slander and implied Zeek would penalize members who questioned the company in public.
But Talley did note that Cooper’s office had received complaints about Zeek and that “[t]he complaints generally seek refunds and say the company has not lived up to its promises.”
Zeek plants the seed that participants can receive a daily return of between 1 percent and 2 percent, but denies it is offering an investment program. The company also denies it is operating a “pyramid scheme.”
“Programs” such as AdSurfDaily have made similar claims and have had a similar payout scheme. ASD was accused in 2008 by the U.S. Secret Service of operating a massive online Ponzi scheme that had gathered $110 million and operated across national borders. ASD President Andy Bowdoin pleaded guilty to wire fraud in May 2012. Zeek is known to have promoters in common with ASD, a company that became engulfed in both civil and criminal litigation.
In 2009, Bowdoin was sued by some of his own members under the federal racketeering statute. That lawsuit was placed on hold because of all the other litigation piling up around ASD, which was named in at least three federal forfeiture actions and was the subject of a federal grand-jury investigation in the District of Columbia that led to the indictment of Bowdoin on charges of wire fraud, securities fraud and selling unregistered securities.
Like ASD, Zeek has a presence on forums referenced in federal court filings as places from which Ponzi schemes are promoted. Some Zeek members are promoting JSSTripler/JustBeenPaid, a “program” that claims it provides a return of 60 percent a month and may have ties to the “sovereign citizens” movement.
Consumers can access the state’s recorded message about Zeek by calling 919-716-6046.
Talley provided this transcript of the recording (italics added):
Thank you for calling the North Carolina Attorney General’s Consumer Protection Division about Zeek Rewards. We cannot tell you whether or not to invest or participate in Zeek Rewards or any other company.
If you would like to file a complaint with our office, you can either leave a message with your name and address after the beep and we will mail you a complaint form, or you can visit our website at www.ncdoj.gov for an online complaint form.
Specific questions about how Zeek Rewards works should be directed to the company itself. Again, the Attorney General’s Office cannot give you investment or legal advice, and we do not endorse any program or business. However, we always encourage people to do their own research before investing in any business. Many people have asked if we have received complaints about Zeek Rewards, and we can confirm that we have received several complaints. Thank you again for contacting our office.
Zeek has gone viral and is being pitched by some promoters of JSS Tripler/JustBeenPaid, an "opportunity" that purports to provide a return of 60 percent a month.
BULLETIN: The Zeek Rewards MLM “program” that is married to a penny-auction site known as Zeekler and plants the seed that an annualized return in the hundreds of percent is possible has declared that “all” Zeek criticism has been “unprofessional” and based on “false information.”
Some Zeek affiliates have said that Zeek provides a payout that averages about 1.4 percent a day, a figure higher than the AdSurfDaily Ponzi scheme.
Zeek has preemptively denied it is an investment program or “pyramid scheme.” Regardless, Zeek has a presence on HYIP forums referenced in federal court filings as places from which Ponzi schemes are promoted. The company has used offshore payment processors linked to numerous fraud schemes and employs business model similar to the $110 million AdSurfDaily Ponzi scheme.
Zeek, which has members in common with ASD, gathers sums of up to $10,000 from members. Like ASD, it claims it is not offering an investment program. But Zeek now is blasting unspecified “North Carolina Credit Unions” for circulating a purported “internal memo” that allegedly was “at once unfavorable to Zeek Rewards and false.”
The Zeek Blog post was attributed to acting COO Gregory J. Caldwell, who replaced acting COO Dawn Wright-Olivares. While acting COO, Wright-Olivares once suggested that, if Zeek instructed members to change their preference in dispensing toilet paper in their private bathrooms (top-rolling vs. bottom rolling), they should do it.
Wright-Olivares now is Zeek’s “Chief Marketing Officer,” with Caldwell holding her former job, according to the company.
Caldwell, according to the Zeek Blog post, now is warning Zeek members to stick with the company line or face the consequences. The post did not spell out those consequences.
“It’s counter-productive for Affiliates to fan the flames of issues that are the proper responsibility of Zeek Corporate…and it’s a violation of the Zeek Policies and Procedures for which violators will be held responsible,” the post attributed to Caldwell and dated today read in part.
A North Carolina credit union had slandered Zeek, according to the post attributed to Caldwell on the Zeek Blog (italics/bolding added).
Zeek Rewards policy is to act quickly to support the Zeek reputation and the future of your business. Upon learning of the memo slandering Zeek, I called the head of Risk Management to track down the origin of the memo. Upon being discovered, the person responsible admitted he really didn’t know anything about the laws regarding direct selling or how to identify a legitimate network marketing company or opportunity. Like all our critics, he was behaving unprofessionally by acting on false information.
We intervened, shut down the misinformation at its source, and that would have been that…were it not for the inappropriate action of one of our own Affiliates who posted the memo online where it has been picked up and is now being used by our critics.
Prior to being arrested on Dec. 1, 2010, by the U.S. Secret Service amid allegations he was at the helm of an Internet Ponzi scheme that planted the seed affiliates received a return of 1 percent a day but were not making an investment, ASD President Andy Bowdoin also complained about slanderous critics. Bowdoin pleaded guilty in May 2012 to a Ponzi-related charge of wire fraud.
Although Bowdoin posted bond and remained free after the Secret Service brought its case, he is now jailed in the District of Columbia, amid allegations he continued to promote fraud schemes after the Secret Service seized more than $80 million in the ASD Ponzi case in August 2008 and after Bowdoin was arrested on Ponzi charges in December 2010. Federal prosecutors identified those schemes as AdViewGlobal and OneX.
Bowdoin, 77, is scheduled to be formally sentenced in the ASD case on Aug. 29.
Some Zeek members also have promoted OneX, which reportedly used at least one of the same offshore processors as Zeek (SolidTrustPay).
Zeek members also have been linked to a “program” known as JSS Tripler/JustBeenPaid and purportedly operated by Frederick Mann, a former ASD pitchman who may have ties to the so-called “sovereign citizens” movement. ASD also had ties to “sovereign citizens,” including the now-jailed Kenneth Wayne Leaming (false liens/harboring fugitives/possessing firearms illegally after prior felony conviction/false uttering) and Curtis Richmond, who once accused the federal judge overseeing the ASD case of “TREASON” and as many as 60 felonies.
JSS/JBP purports to provide a return of 730 percent a year. JSS/JBP uses at least two of the same offshore processors used by Zeek (SolidTrustPay and AlertPay, now Payza).
Meanwhile, Zeek promoters also have been linked to a “program” known as Regenesis 2×2, which came under Secret Service scrutiny in 2009 and also had a presence on the Ponzi boards.
Before the ASD Ponzi raid by the Secret Service in 2008, ASD had moved “several million” dollars into SolidTrustPay, according to court records. AlertPay also is referenced in filings in the ASD Ponzi case. Both firms are referenced in filings in the Pathway to Prosperity HYIP Ponzi case brought in 2010 by the U.S. Postal Inspection Service.
Filings in the Pathway to Prosperity case also reference the TalkGold and MoneyMakerGroup forums — forums on which Zeek, JSS/JBP, ASD and the Legisi HYIP Ponzi scheme had a common presence. SolidTrustPay, meanwhile, was mentioned in filings in the Eagle Trades LTD fraud case. Terrance Osberger of Eagle Trades was indicted last month by a federal grand jury in Ohio on one count of wire fraud and 48 counts of money-laundering.
Eagle Trades also had a presence on the Ponzi boards.
The Blog post attributed to Caldwell came on the heels of a report yesterday by BehindMLM.com that the North Carolina State Employee’s Credit Union (NCSECU) had concerns about Zeek. (Link to BehindMLM story below.)
In June, the office of North Carolina Attorney General Roy Cooper said it had concerns about Zeek. Cooper’s office expressed those concerns after a North Carolina television station suggested Cooper’s office had determined Zeek to be operating legally. Zeek’s Blog linked to the TV station’s report, but the TV station later removed the report. Cooper’s office said that no determination that Zeek was operating lawfully had been made.
EDITOR’S NOTE: In Ponzi Land, HYIPs that suggested returns of 1 percent (or more) per day “worked” to line up lambs for the slaughter. So did autosurfs that planted the 1 percent a day (or more) seed. Now, 1 percent a day (or more) “auction” sites are “working.” Will they mushroom globally like HYIPs and autosurfs, setting the stage to fleece participants in unprecedented numbers?
Apparently now fully recovered from his purported bout with Dengue fever, legendary HYIP huckster “Dave” is back — this time with something called “DailyCashMania” (DCM) that appears to be married to a nascent penny-auction site known as “HawkPay” that is luring affiliates amid DCM promises it will offer a “mega-prize” of a $10,000 cash voucher.
One MoneyMakerGroup Ponzi forum promoter of DCM declared it “The ONLY Matrix supported by a [sic] Auction site.”
HawkPay says it will offer “scratch” auctions. A graphic for a “test listing” (Canon camera) on the site reads “SCRATCH TO SEE YOUR PRICE.” When that graphic is clicked, this message loads: “Your scratch will cost 1 bid and the product price will be lowered with $.10.”
ASD’s chatter about the Presidency quickly brought out the U.S. Secret Service, which discovered ASD affiliates were being paid with money from other affiliates: a classic Ponzi scheme. The Secret Service also discovered that political donations made by ASD President Andy Bowdoin came from Ponzi money.
Other prelaunch hype for BidsThatGive claimed that affiliates of the “program” could get filthy rich, so rich the company would pay to name a hospital or orphanage after them.
Meanwhile, the Zeek Rewards MLM “program,” which is married to a penny-auction site known as Zeekler, has announced a new slate of officers at Rex Venture Group, the purported parent company of the Zeek businesses. Even as the company was making the announcement, posters on the MoneyMakerGroup Ponzi board were sharing “I Got Paid” posts. Another poster placed a link to something called ZeekCalc, a purported earnings calculator apparently created by a Zeek fan.
“This is a online FREE Zeekrewards Profit Calculator that allow [sic] you [to] predict your profit from the Zeekrewards Program,” the calculator site claimed. “With this tool it’s easy and fast [to] calculate your future income or future earnings of the new people who join the program.”
Among the apparent Zeek affiliates bragging about their Zeek payouts at MoneyMakerGroup in the run-up to Zeek’s announcement about its new officers yesterday was legendary Ponzi promoter “strosdegoz,” a former cheerleader for “Dave’s” scams, along with the OneX scam and the ClubAsteria scam — and many others. “strosdegoz” has claimed to be a member of 35 HYIP boards.
Among other things, Club Asteria traded on the names of the World Bank and the American Red Cross. Hank Needham, one of Club Asteria’s purported managers, was a former AdSurfDaily pitchman and cash-gifting enthusiast shown on videotape opening packages of cash from at least two countries.
“Just received two payments now,” “strosdegoz” posted of Zeek on MoneyMakerGroup on July 29. He simultaneously was promoting Bidify, yet another emerging penny-auction site. Others joined “strosdegoz” in the Zeek “I Got Paid” cheerleading chorus on MoneyMakerGroup, including a poster known as “jumpin.”
“You’ve got cash!” a post yesterday from “jumpin” began. “Rex Venture Group LLC . . . just sent you money through Payza.”
The post went on to claim a July 30 Zeek payment of $23.98 from Rex Venture, Zeek’s purported parent company.
“Ken Russo,” another Ponzi forum legend, also has made “I Got Paid” posts that cited payments from Rex Venture. In May, “Ken Russo” claimed on the TalkGold Ponzi forum that he’d received $34,735 from Zeek since Nov. 14, 2011. “Ken Russo” posts on Talk Gold as “DRdave.”
Just plain “Dave” of the emerging DCM scam perhaps is most infamous for a “program” known as JSS Tripler 2, which appears to have based its name on the JSS Tripler/JustBeenPaid “program” purportedly operated by Frederick Mann, a former ASD pitchman. JSS Tripler 2 soon morphed into something called T2MoneyKlub and launched a companion scam known as Compound150.
T2 Money Klub and Compound150 appear to have collapsed after “Dave” purportedly was battling back from a bout with Dengue fever.
But now “Dave” appears to be back with DCM and its work-in-progress “scratch” auction.
The new Rex Venture Group officers announced yesterday, according to Zeek’s news Blog, include Greg Caldwell as “acting COO”; Josh Calloway as CTO; Clifton Jolly “to head up PR”; Angie Fiebernitz as CFO; and Alex de Brantes as executive director of training and support services.
Meanwhile, according to the Zeek Blog, Peter Mingils “is rockin’” over the “Certified Trainers course curriculum as Zeek’s Training & Incentives Coordinator,” and “Robert Mecham and OH Brown are banging out video after video and Zeek’s “FANTASTIC NEW BUSINESS CARDS!”
Dawn Wright-Olivares is Zeek’s new “Chief Marketing Officer,” after previously serving as “acting COO,” according to the Zeek Blog.
“We are writing you today and requesting your assistance. It has come to our attention that your website Hubpages.com is broadcasting and delivering content that is both copyrighted and, [sic] Trademark Protected. In addition, the content constitutes a tortuous [sic] interference with us and our 1.2 million independent advertising reps around the world.” — From communication dated July 22 and allegedly sent to HubPages. (Bolding added by PP Blog.)
UPDATED 10:23 A.M. EDT (U.S.A.) Using the pronouns “we,” “our” and “us” — while butchering a legal term and implying he had the authority to act on behalf of Rex Venture Group LLC — a purported Rex Venture “consultant” appears to have caused HubPages.com to disable a Hub written by “K. Chang” that is critical of the Rex-owned Zeek Rewards MLM “program.”
How long the “K. Chang” Hub will remain offline and whether it even will return are unclear. A Hub is an article on a specific topic. The “K. Chang” Hub questioned whether Zeek was a legal and viable business.
Zeek, which operates a penny-auction site known as Zeekler, plants the seed affiliates of the Zeek MLM “program” can earn a return in the hundreds of percent per year by sending it sums up to $10,000 and placing a daily ad for the company online. The firm has preemptively denied it is operating a “pyramid scheme.” And it claims it will ban members who describe Zeek as an investment program, despite the implication of a spectacular return and despite the fact Zeek’s business model closely resembles that of AdSurfDaily.
ASD, like Zeek, advised members not to describe the “program” as an investment program. Moreover, both ASD and Zeek had (or have) a purported “advertising” component. Zeek members place ads as part of the “program”; ASD members clicked on ads. The U.S. Secret Service seized more than $80 million from ASD-related bank accounts in 2008. ASD President Andy Bowdoin later was accused of operating a massive online Ponzi scheme that had ensnared tens of thousands of people globally.
Bowdoin faces sentencing on a Ponzi-related charge of wire fraud next month and has been banned from multilevel marketing, Internet programs and mass marketing. Zeek has listed some known ASD participants as “employees.”
In what is emerging as the latest bizarre drama involving Zeek, the “K. Chang” Hub about Zeek went missing earlier this week in the aftermath of a purported complaint for “Copyright, Trademark infringement” dated July 22 and submitted to HubPages.
The complaint, according to information “K. Chang” said he received from HubPages, was submitted by “Robert Craddock” and implied “Craddock” was acting on behalf of Rex Venture Group LLC, Zeek’s purported parent company.
Whether “Craddock” actually had the backing of Rex Venture/Zeek when submitting the complaint is unclear. “K. Chang” now says he’s trying to get the answer to that question.
The PP Blog was unable to reach Zeek for comment.
“Craddock,” according to the complaint, advised HubPages that the phrases “Zeekler; Zeek Rewards; Shopping Daisy” were protected by copyright and that “K. Chang” somehow was violating those purported copyrights. The complaint also alleged trademark infringement and libel.
Whether “Craddock” had the backing of Rex Venture/Zeek to make those claims also is unclear. Rex is not listed as the owner of any of the three trademarks allegedly cited by “Craddock” in the complaint to HubPages. “K. Chang,” meanwhile, says he’s willing to correct his Zeek Hub if there are errors of fact.
New Confusion Emerges
Screen shot: Source: Justia.com
Perhaps the biggest of the early issues surrounding the Hub flap is whether North Carolina-based Rex Venture or its Zeek arm even owns the trademarks “Craddock” allegedly brought to the attention of HubPages as part of a bid to bring down the “K. Chang” site.
Information on Justia.com, which tracks trademark applications, suggests the marks are owned by Ebon Research Systems LLC. A federal database maintained by the U.S. Patent and Trademark Office, meanwhile, references Ebon Research as “Owner” and “(APPLICANT).”
Ebon Research is a company based in Florida. The firm lists Dr. Florence Alexander and Stanley Alexander Sr. as its managing members, which leads to questions not only about whether “Craddock” had the backing of Rex Venture/Zeek to bring the complaint, but also whether he had any standing to complain to HubPages about any Zeek-related matter.
Reached by the PP Blog for comment yesterday and told about the “K. Chang” circumstance and the copyright/trademark complaint at HubPages, a woman who identified herself as Dr. Florence Alexander of Ebon Research said she had “no knowledge” of any trademark or copyright complaint filed at HubPages against “K. Chang.”
“I don’t even know what HubPages is,” she said. Alexander added that she “certainly” knew of Zeek, but declined to answer questions about whether Ebon Research had a business relationship with Zeek or Rex Venture. She then ended the call, explaining that a family matter required her immediate attention.
Compare the trademark numbers listed in this screen shot of a section of the infringement complaint attributed to Rex Venture Group to the numbers in the screen shot above.
The PP Blog reached Ebon Research by dialing a phone number published for the company on the website of a U.S. government agency that identifies the firm as an “interested vendor” of the U.S. Environmental Protection Agency. A separate, nongovernment website styled “EbonResearchSystems.com” uses the same phone number for Ebon Research published on the government website and the same street address for Ebon Research published in Florida corporation records.
The nongovernment website that uses the Ebon Research name to form its URL publishes the logos of several government agencies, including the U.S. Department of Justice, and the agencies are identified on the website as members of a “federal client list.” Ownership of the domain is unclear because it is registered through Domains By Proxy.
Whether Alexander will have additional comments later that could clarify the Zeek issues is unknown.
“K. Chang” noted yesterday that “Craddock” had identified himself in an email as a Rex Venture Group “consultant” interested in obtaining “K. Chang’s” phone number to discuss Zeek-related matters.
“I’m following up about the content you published on HubPages, regarding Zeek Rewards and companies connected with or believed to be connected with,” “Craddock” wrote, according to “K. Chang.” If you would respond with a number so I can discuss this matter with you.”
“K. Chang” added that “Craddock” used a Gmail address when contacting him, not an address linked to any of the Rex Venture domains.
That communication was signed “Robert Craddock” on one line, with the name of “Rex Venture Group LLC” appearing on the next line, according to “K. Chang,” who posts on the PP Blog in addition to maintaining the now-missing HubPages site.
After “K. Chang” received that communication, “K. Chang” received another one from “Craddock” that introduced the specter that a “corporate attorney” for Zeek “will also want to weigh in on this discussion if that is what it takes to keep your posting from being re-published on Hub Pages or anywhere else, as we believe and know this story contains false information and is disruptive to our affiliates.”
Like the actual complaint to HubPages by “Craddock,” the emailed communication to “K. Chang” also used pronouns such as “we” and “our.”
The actual complaint to HubPages, according to “K. Chang,” ended with these words (italics added):
“Rex Venture Group LLC has not given authorization, past or present, for any use, [sic] of its trademarks, [sic] copyrighted phrases. Nor does it allow, or has authorized any publication of material that is defaming and causes a business disruption for is [sic] affiliates around the world. Again I would like to thank you for your prompt attention to this matter.
EDITOR’S NOTE: Just when you thought AdSurfDaily-related events could not get any stranger . . .
** _____________________________ **
Kenneth Wayne Leaming
Jailed near Seattle and awaiting trial in September on charges he filed false liens against at least five public officials involved in the AdSurfDaily Ponzi case, purported “sovereign citizen” Kenneth Wayne Leaming has sued “Barrack Hussein Obama” and U.S. Attorney General Eric Holder in federal court in the Western District of Washington.
The complaint was written in longhand and names Leaming business associate and fellow federal prisoner David Carroll Stephenson a co-plaintiff. In addition to Obama and Holder, the complaint names as defendants “J. Doe #1 (U.S. Atty)” and “John Does 2-10.”
It is believed that “J. Doe” refers to U.S. Attorney Jenny A. Durkan of the Western District of Washington. Durkan’s office has been involved in the prosecution of a number of purported “sovereign citizens,” including David Russell Myrland. Myrland was convicted last year on charges of threatening the mayor and officials of the Seattle suburb of Kirkland.
Obama, according to the Leaming/Stephenson complaint, is not a U.S. citizen and therefore is ineligible to be President. And because an ineligible President appointed Holder, it follows that Holder is “Personating [sic] the Attorney General of the United States” and therefore “cannot lawfully appoint or delegate authority to “Any United States Attorney.”
It further follows, according to the complaint, that the charges against Leaming and Stephenson brought by the U.S. Attorney for the Western District of Washington should be declared “VOID For FRAUD” because the U.S. Attorney also is “personating” [sic] a federal officer.
In court filings after Leaming’s arrest, the FBI cited a passage from an alleged Leaming email that referenced the children of U.S. Chief Justice John Roberts and their “school.”
“In this email,” the FBI agent who sought Leaming’s arrest wrote, “I believe that LEAMING is offering to file documents on Stephenson’s behalf, including sending them to the Chief Justice, via his minor children.”
Investigators discovered a paperwork trail that linked Leaming and Stephenson to a purported $10 million lien against Harley Lappin, the former director of the Federal Bureau of Prisons, and a purported lien for $20 million against Dennis R. Smith, the warden of the Federal Correctional Institution in Phoenix.
As the probe that led to Leaming’s arrest proceeded, agents found bogus liens filed in Pierce County, Wash., against other public officials, including at least five officials involved in the ASD Ponzi case. Liens against Mary Peters, the former U.S. Secretary of Transportation, and Cutler Dawson, president and CEO of Navy Federal Credit Union, also were discovered.
Leaming and Stephenson are demanding 100 “ounces of .999 fine silver” from each defendant as “compensatory damages ” for each day the government allegedly holds them unlawfully. In addition, they are demanding 1,000 “ounces of .9999 fine gold” from “each defendant” for “Punitive and Exemplary damages.”
Screen shot: From the Stephenson/Leaming complaint.
With two defendants formally named and 10 “Does,” it appears as if Leaming and Stephenson are demanding 12,000 ounces of gold. Gold is trading at roughly $1,600 an ounce, meaning the duo is asking for about $19.2 million at today’s approximate rate.
Leaming was arrested in November 2011, after an investigation by an FBI Terrorism Task Force. Stephenson — already a federal prisoner at the time of Leaming’s arrest — later was indicted with Leaming on a charge of retaliating against a federal judge or federal law enforcement officer.
In addition to the charges of filing false liens, Leaming also faces charges of harboring two federal fugitives, being a felon in possession of firearms and uttering a bogus “Bonded Promissory Note” with a purported face value of $1 million.
The U.S. Secret Service has described AdSurfDaily as a $110 million Ponzi scheme and a “criminal enterprise.” ASD President Andy Bowdoin is jailed in the District of Columbia, pending formal sentencing Aug. 29 in the ASD Ponzi case.
One of the individuals against whom Leaming allegedly filed false liens is the Secret Service agent who led the ASD investigation. False liens also allegedly were filed against three federal prosecutors who worked on the ASD case and the federal judge who presided over it.
Leaming has a prior federal felony conviction for piloting an aircraft without a license.
UPDATED 6:36 P.M. EDT (U.S.A.) To hear some folks in HYIP Ponzi Land tell it, “opportunities” can avoid the long arm of the law by preemptively prohibiting affiliates from using certain words — “investment” and “security,” for two examples. Regardless, court records show that hucksters who played linguistic games to mask their fraud schemes confronted investigators who neatly exposed their wink-nod wordplay.
The following is from a transcript of a May 2007 U.S. Secret Service recording in which undercover agents posing as prospects were talking to Gregory McKnight of Legisi inside Legisi’s office in Michigan. McKnight and Legisi later were implicated in a $72 million Ponzi scheme that in part was promoted on the MoneyMakerGroup forum:
McKnight: ” . . . it is not an investment.”
Agent 1: “Okay.”
McKnight: “I hope you have any idea — if you have any inkling of an idea that it is an investment, then you should really . . .”
Agent 1: “I’m sorry.”
McKnight: “This is a loan to my corporation.”
Agent 1: “Okay.”
“Agent 2: “What’s the difference?”
McKnight: “The difference is — if I am selling investments and I am not registered with the SEC, I am going to prison.”
Agent 2: “Oh.”
Outcome: McKnight, adjudicated liable civilly in a case brought by the SEC and ordered to pay millions of dollars in restitution and penalties, is scheduled to be sentenced on a criminal charge of wire fraud on Sept. 11. The U.S. Secret Service brought the criminal case.
The following is from Paragraph 43 of the August 2008 complaint for forfeiture that targeted tens of millions of dollars in bank accounts tied to the AdSurfDaily Ponzi scheme, which gathered at least $110 million. ASD also was promoted on the Ponzi boards (italics added):
“The [undercover agent] asked her about investing with ASD. She immediately said, ‘Don’t call it investing, you know what I mean, we can get in trouble if we say that, we have to be careful.”
Outcome: A federal judge ordered the civil forfeiture of more than $80 million, including the forfeiture of more than $65.8 million in ASD President Andy Bowdoin’s personal bank accounts and more than $14 million in bank accounts linked to Golden Panda Ad Builder, another autosurf. The U.S. Secret Service brought the civil case.
The following is from the November 2010 criminal indictment against Bowdoin. The prosecution quoted from an email from Bowdoin in which the ASD patriarch himself laid out the wink-nod nature of the 1-percent-a-day ASD program and explained his bid to skirt securities laws by coming up with naming conventions to keep the government at bay (italics added):
“[L]et’s don’t (sic) use the words investment and returns. Instead, lets (sic) use ad sales and surfing commissions. The Attorney Generals in the U.S. don’t like for us to use these words in our program.”
Outcome: Bowdoin, currently jailed amid allegations he pushed other fraud schemes after the seizure and after his arrest and posting of bond, is scheduled to be sentenced on a criminal charge of wire fraud on Aug. 29. The criminal charge was brought after an investigation by the U.S. Secret Service.
And what about AdViewGlobal (AVG), the alleged 1-percent-a-day knockoff of ASD that prosecutors now say they’ve linked to Bowdoin? From the PP Blog’s April 27, 2009, report about the AVG forum warning members not to call AVG an investment program (italics added):
A Mod at an AdViewGlobal forum set up by Mods and members of AdSurfDaily has warned AVG members not to refer to their purchases as “investments.”
Rather, the Mod said, AVG members purchase “advertising” and are not “investing” or “investors.”
Posts that used the terminology of investments would be deleted, the Mod warned.
AVG members currently are stressing a so-called “80-20? strategy as a means of keeping the program viable for the long-term.
Analysts, however, point out that the “80-20? plans — taking out 20 percent in cash and letting 80 percent ride with the companies — are just another way to keep cash within ready reach of autosurf Ponzi schemes to sustain the deception.
There is not a single, documented case in the history of autosurf prosecutions in which the use of the word “advertising” to describe what the government views as an “investment” program involving the sale of unregistered securities has succeeded as a means of fending off a prosecution.
In other words, the government has made it plain that you can’t avoid prosecution by using other terminology to describe an investment program.
Regardless, many surf companies continue to insist that the use of the word “advertising” as a replacment for “investing” somehow insulates surfs from prosecution.
Outcome: Unknown. The AVG forum mysteriously disappeared, as did AVG itself. In April 2012, federal prosecutors announced in court filings that they’d linked Bowdoin to AVG.
Virtually all of the material quoted above has been a matter of record for at least three years. In the case of Legisi, it has been a matter of record for more than four years.
Wordplay, though, still is in play among “programs” that purport to pay members outsized percentages that correspond to annualized returns in the hundreds of percent per year. In the past 24 hours on the MoneyMakerGroup forum, for example, these posts (below) appeared in the context of the Zeek Rewards “program.” The first post used the word “investment.” Perhaps ignorant of history (or maybe not), the poster quickly followed up in the second post by saying the use of “investment” was a mistake and that what really was meant was that he or she had purchased “Bids.”
It was hard not to hear the echoes of ASD and AVG members doing largely the same thing summers ago, sometimes after being scolded by the purported forum masters.
URGENT >> BULLETIN >> MOVING: A federal judge has granted the government’s request to transfer from Florida to the District of Columbia a lawsuit against the United States filed by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer.
The ruling today by U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida deals a blow to Disner and Schweitzer, who earlier argued that federal prosecutors had gone shopping for a “frendly [sic] forum” in the District of Columbia when bringing the ASD Ponzi case in 2008 after an investigation by the U.S. Secret Service.
Altonaga’s ruling may mean that U.S. District Judge Rosemary Collyer — whom ASD President Andy Bowdoin and purported “sovereign” being Curtis Richmond tried unsuccessfully to have removed from the case for alleged bias — will preside over the Disner/Schweitzer complaint.
Disner and Schweitzer, who raised the prospect they could be charged with tax evasion, argued to Altonaga that their Constitutional rights were violated when the government seized the ASD database in 2008.
” . . . the Court finds that Plaintiffs can litigate their claims in the District of Columbia without undue inconvenience or prejudice,” Altonaga ruled. “The public interest factors also favor transfer, given the District of Columbia’s extensive familiarity with the forfeiture proceedings that gave rise to this action. In view of that familiarity, the District of Columbia is in a better position to efficiently judge whether Plaintiffs’ case warrants dismissal or whether the Government’s actions constituted an unreasonable search and seizure of Plaintiffs’ property in violation of the Fourth Amendment and other statutory requirements.”
In her ruling today, Altonaga noted that Disner and Schweitzer already have claimed they’d try to have Collyer removed from the case if made its way from Florida into her courtroom.
Disner and Schweitzer sued the government in November 2011, bringing their action in the Southern District of Florida and arguing that ASD was not a Ponzi scheme and that prosecutors and the Secret Service had authored a “tissue of lies” in the District of Columbia. About seven months later — in May 2012 — Bowdoin pleaded guilty to wire fraud before Collyer, who’d earlier ordered the forfeiture of more than $80 million in the civil portion of the case.
In a statement of offense, Bowdoin acknowledged ASD was a Ponzi scheme that never operated lawfully from its 2006 inception. He remained free after his guilty plea, but Collyer ordered him jailed in June 2012, after prosecutors presented evidence that Bowdoin continued to foist scams (AdViewGlobal and OneX) on the public even after the seizure of tens of millions of dollars in the ASD case and even after he was arrested on Ponzi charges in December 2010.
Bowdoin has been held at a local jail facility in the District of Columbia since last month. His formal sentencing on the Ponzi-related charge of wire fraud is set for Aug. 29 before Collyer.
After their ASD days, Disner and Schweitzer became pitchmen for the Zeek Rewards “program,” which has an ASD-like compensation scheme. In arguing that ASD was not a Ponzi scheme, Disner and Schweitzer relied on an opinion from purported MLM expert Keith Laggos, whom Zeek now claims as a consultant.
Screen shot: I-Payout website showing logos of "Global Strategic Partners." In April, federal prosecutors described a murky enterprise known as "OneX" as a "fraudulent scheme" and "pyramid" that was recycling money to members in a fashion similar to the AdSurfDaily Ponzi scheme. Now jailed, ASD President Andy Bowdoin was a OneX pitchman, saying he intended to use his "earnings" from the "program" to pay for his criminal defense in the ASD Ponzi case. Like ASD, OneX conducted business with SolidTrustPay, an offshore payment processor linked to one HYIP fraud scheme after another. Mysterious OneX pitchman "J.C." now says the "program" is turning to I-Payout.
Back in April, federal prosecutors described the purported OneX “program” as a “fraudulent scheme” and “pyramid” pushed by former AdSurfDaily President Andy Bowdoin, the author of the $110 million ASD Ponzi scheme.
Bowdoin, 77, now is jailed in the District of Columbia — in part because of his OneX pitches. He’d initially been free of bond while awaiting his criminal trial in September 2012 on charges of wire fraud, securities fraud and selling unregistered securities in the ASD Ponzi case. Bowdoin was arrested by the U.S. Secret Service in December 2010.
The ASD patriarch pleaded guilty in May to wire fraud in the ASD Ponzi case, acknowledging that ASD was a Ponzi scheme and never operated lawfully from its 2006 inception. Bowdoin remained free after his guilty plea. But a federal judge ordered him jailed in June — pending an August 2012 sentencing date — after prosecutors linked Bowdoin both to OneX and a scam known as AdViewGlobal.
Bowdoin, according to prosecutors, chose to continue to commit crimes — even after the August 2008 seizure by the U.S. Secret Service of $65.8 million in his 10 personal bank accounts at Bank of America and even after he was arrested on Ponzi charges. In October 2011, Bowdoin told OneX conference-call listeners that they could make $99,000 very quickly and that he intended to use his profits from OneX to pay for his criminal defense in his ASD-related Ponzi scheme trial.
College students were excellent prospects for OneX, Bowdoin ventured.
Much remains murky about OneX, including the identity of its purported operator and precisely where the company operates from. A male referred to as “J.C.” presides over OneX conference calls, which occasionally continue to be held despite prosecutors’ assertions against the firm in April. “J.C.” has described himself as a “consultant,” even though he apparently is empowered to make financial decisions for the murky enterprise.
OneX has announced it no longer is using SolidTustPay, the Canadian payment processor linked to one HYIP fraud scheme after another.
But “J.C.” announced during a OneX conference call this week that the “program” was switching to I-Payout, according to a source.
Part of the presentation by “J.C.” in the conference call included the presentation of a screen shot that showed I-Payout’s name in the back offices of OneX members who’d been wondering if and when the company would find a substitute for SolidTrustPay, according to a source.
It is unclear if OneX has an actual account at I-Payout. What is clear is that it is encouraging members to register for I-Payout accounts, only three months after prosecutors described OneX as a scam that was recycling money to members in ASD-like fashion.
Among the clients I-Payout touts on its website is TextCashNetwork. (See Feb. 14, 2012, PP Blog story on TextCashNetwork.)
I-Payout’s website publishes the logos of HSBC, Deutsche Bank, Bank of America, Barclays and other “Global Strategic Partners.”
Bloomberg/Businessweek is reporting this morning that HSBC and Deutsche Bank employees are under investigation for alleged manipulation of the LIBOR interest rate in a growing scandal that also involves Barclays and other major financial institutions.
URGENT >> BULLETIN >> MOVING: Zeek Rewards, the multilevel marketing program married to the penny-auction site Zeekler, is under investigation by the U.S. Secret Service and the Securities and Exchange Commission, the Secret Service confirmed at 4:14 p.m. EDT today.
