9th UPDATE 9:01 P.M. EDT U.S.A. Indianapolis-based USHBB Inc. and three of its principals — James A. Moore, Robert Mecham and Oscar H. Brown — have been sued by the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case.
Receiver Kenneth D. Bell alleges USHBB, a producer of videos, also did work for the AdSurfDaily Ponzi scheme “and one or more other failed MLM operations.”
Though not referenced specifically in the complaint, one of those operations was “NarcThatCar,” a bizarre pyramid scheme that collapsed in 2010.
Not only did USHBB and its principals mine $676,848 from Zeek for producing videos and marketing materials that duped vast numbers of Zeek participants, Moore, Mecham and Brown piled up hundreds of thousands of dollars in illicit profits as Zeek affiliates, Bell charged.
Brown, better known as O.H. Brown, used “ushbb” as his Zeek affiliate name and amassed $168,642.70, Bell alleged.
Moore scored $109,130.64 under multiple usernames, including “geniweb” and “ttm,” Bell alleged.
Mecham piled up “at least $868,542.17 through his shell companies Five Star Marketing, LLC and The End Media, LLC, under multiple usernames, including ‘napier2’ and ‘theend,’” Bell alleged.
Moore resides in Indianapolis, according to the complaint. Mecham is a resident of Bountiful, Utah, and Brown lives in Mount Pleasant, S.C.
Mecham and Brown received transfers of $25,000 each from a Zeek “insider” in August 2012, the same month Zeek collapsed, according to the complaint.
Brown, according to the complaint, potentially knew that the SEC was looking at Zeek in June 2012 and dashed off a panicked email to Zeek executive Dawn Wright-Olivares.
What appears to have happened, according to the complaint, was that a technology company with which USHBB did business was contacted by the SEC, prompting Brown to tell Olivares:
“Heads up!!!! Our IT partners, RMR development received a telephone call from the SEC today regarding yougetpaidtoadvertise and what organizations were associated. This was a very short call I am told. Not sure what will come of this but this is an alarm at least that the government is looking. We need to get squeaky clean and quick!”
Olivares, charged civilly by the SEC and criminally by federal prosecutors in the Western District of North Carolina in 2013, allegedly shared inside information with USHBB and Brown.
From the receiver’s complaint (italics added):
Further, the Defendants were involved in the Zeek scheme’s operation and the Insiders’ decisionmaking. For example, in August 2011, ZeekRewards adjusted some of the terminology it used publicly in an attempt to disguise the “Compounder” as a legitimate retail profit sharing mechanism. The Compounder’s name was changed to the “Retail Profit Pool,” but the substance of this investment vehicle did not change. USHBB was or should have been fully aware of this deceitfulness in which it participated.
In a June 24, 2011 email, Dawn Wright-Olivares wrote to O.H. Brown regarding a webinar that USHBB had created for Zeek: “I started to do minor edits . . . ([Y]ou’ll see them where I started to say Retail Profit Pool) lol instead of Compounder . . . . ” She further wrote to Brown: “the silent cap [for bid expiration] reality will be 125% but we can’t SAY it as you know.”
Wright-Olivares pleaded guilty to investment-fraud conspiracy and tax-fraud conspiracy in February 2014.
Consistent with USHBB’s “dubious track record” in ASD and other schemes, the company and its principals “assisted the ZeekRewards scheme by creating multiple videos that served as promotional tools for ZeekRewards,” Bell alleged.
Titles included:
“One Penny Billionaire.”
“You Get Paid to Advertise.”
“Got 20 Seconds.”
“The Dog Gone Truth.”
“Spin the Wheel.”
“The videos were carefully produced to mislead and deceive victims into participating in the scheme, convincing victims that with minimal effort they could earn significant financial returns from the Zeek scheme,” Bell alleged.
And, he alleged, “These videos assisted the Insiders in promoting the alleged ease with which affiliates could earn passive profits by investing in the scheme and selling membership in the scheme to others. Affiliates were told to mention the ZeekRewards program to a prospective affiliate or advertise it on a web page, and then email or otherwise provide them a link to the USHBB videos, which upon information and belief convinced other unwary victims to sign on . . .
“The videos were a key component in proliferating the RVG Ponzi scheme, causing significantly more victims and financial loss than otherwise would have occurred absent Defendants’ actions.”
RVG stands for Rex Venture Group, the alleged operator of Zeek. It was controlled by Paul R. Burks of Lexington, N.C. Burks also has been charged criminally.
ASD was a $119 million Ponzi scheme broken up by the U.S. Secret Service in 2008. NarcThatCar was a “program” that purported to pay MLM “program” members to recruit other members and to record the license-plate numbers of vehicles parked at restaurant chains, big-box retailers, universities, doctors’ offices and throughout neighborhoods from coast to coast.
The information purportedly would be entered into a database that could assist the U.S. Department of Homeland Security locate terrorists and lenders repossess automobiles. The bizarre scheme disappeared after it caught the attention of the Better Business Bureau and investigative journalists.
Bell is seeking treble damages and the return of ill-gotten gains from the USHBB defendants.
EDITOR’S NOTE: One way to read a report filed yesterday by the court-appointed receiver in the Zeek Rewards Ponzi-scheme case is as a warning manual that brings to life the kind of vexing problems HYIP schemes create for operators, vendors and participants — including “insiders.” Kenneth D. Bell’s report to Senior U.S. District Judge Graham C. Mullen of North Carolina strongly hints that the receivership has identified “key insiders.” Their names have not been published in court filings . . .
UPDATED 4 P.M. EDT (U.S.A.) Although early filings last year in the Zeek Rewards Ponzi scheme case suggested that offshore payment processors Alert Pay (Payza) and Solid Trust Pay held more than $40 million connected to Zeek, the court-appointed receiver has advised a federal judge that the two processors may hold even more than originally believed.
Both AlertPay and SolidTrustPay operate from Canada. Their names appear constantly in Ponzi-board promos for fraud schemes. The companies’ names also have appeared in court filings related to various HYIP schemes, including the alleged $72 million Pathway To Prosperity fraud in 2010 and the $119 million AdSurfDaily fraud in 2008.
In 2009, while the ASD case was still in the courts, some members of AdSurfDaily received mysterious “final refunds” from SolidTrustPay through an STP-connected email address of oceannamusic@xplornet.com. The purported pro rata refunds led to questions about whether some ASD members were benefiting at the expense of others while the case still was in the U.S. courts and whether ASD actually had money in SolidTrustPay under the name of a different company or a user other than President Andy Bowdoin. (See July 2009 post by PP Blog guest columnist Gregg Evans here.)
Later, an emerging scam known as JSSTripler/JustBeenPaid purportedly operated by former ASD pitchman Frederick Mann began to use the offshore processors — amid claims from JSS/JPB pitchmen that they not only were recruiting for JSS/JBP, but also managing both the JSS/JBP accounts of their sign-ups and the payment-processor accounts of the sign-ups.
Because HYIP schemes proliferate in part through the willful blindness of promoters and serial con artists, a situation has evolved over the years in which fraudulent proceeds circulate between and among scams and their individual promoters. “Alan Chapman,” a Zeek pitchman, also was promoting JSS/JPB and a follow-up scam known as “ProfitClicking,” for instance. Serial huckster “Ken Russo” also promoted Zeek and JSS/JBP — and many more schemes, including ASD and Profitable Sunrise, which the SEC described last month as a scam that may have gathered tens of millions of dollars.
But a new filing by Kenneth D. Bell, the Zeek receiver, suggests that the receivership may seek to foreclose any after-the-fact opportunities for offshore processors to duck their responsibilities to the receivership estate and for holders of the offshore accounts to benefit from Zeek after the SEC brought spectacular allegations of Ponzi- and pyramid fraud against Zeek in August 2012.
Zeek, the SEC said last year, was a $600 million fraud scheme that used at least 15 foreign and domestic financial institutions.
A forensic accounting has led Bell to believe that “both Payza and SolidTrustPay may have additional Receivership assets.”
In a report to Senior U.S. District Judge Graham C. Mullen, Bell said he is working “to investigate and seize these funds.”
And, Bell advised Mullen, “[t]o the extent these entities allowed affiliates to withdraw funds after receiving notice of the Receivership, the Receiver may seek reimbursement of indemnification for the funds from the payment service providers.”
If Bell somehow is able to foreclose chicanery involving serial Ponzi pitchmen and the scamming insiders with offshore accounts, it could go a long way toward minimizing the spread of fraud schemes over the Internet.
Bell’s April 30 filing also reveals that the receivership has recovered $291,000 from a “merchant services account reserve” that had been held by American Express for Rex Venture Group, Zeek’s parent company. At the same time, it reveals that Bell — to date — has recovered $36,000 from Zeek net winners in prelitigation settlements. That number may grow. The deadline to enter into negotiations for a prelitigation settlement is May 31.
More than anything, though, Bell’s report to the court showcases the enormous problems created by HYIP schemes. Among the problems outlined in the filing:
Potentially costly and time-consuming litigation disputes for all parties. Zeek operator Paul Burks is claiming privilege on certain matters. Some Zeek “winners” have filed motions that could slow down the refund process for Zeek victims at large.
Taxes: Zeek appears to have misclassified certain employees as independent contractors, which has tax ramifications.
Incomplete records. Because of poor records at Zeek, some members who received 1099 tax forms from the receivership received forms that showed earnings either higher or lower than actual earnings. The receivership has prepared amended 1099s for certain Zeek members.
Possible disputes with vendors. Bell’s report noted that USHBB Inc. asserted it was owed $878,856 by Zeek. USHBB produced video promos for Zeek. In September 2012, the PP Blog reported that Zeek once listed USHBB executive OH Brown as an employee. Meanwhile, USHBB once produced videos for a collapsed MLM scheme known as Narc That Car.)
Clawback litigation: In the absence of settlements, the receiver potentially could file actions that involve thousands of Zeek affiliates in possession of ill-gotten gains from the scheme.
Check-waving is used as a form of “proof” that an “opportunity” that “pays” is not a scam.
“Giddy up,” intoned Trudy Gilmond of Vermont. “Get involved. [It’ll] be the best decision you ever made.”
Gilmond, according to the video she narrated while waving two checks from Regenesis 2X2 totaling $1,200, sent by Priority Mail and drawn on Bank of America, was “fired up.”
She’d been in Regenesis 2X2 only since May 1, and already had received a nice payout, Gilmond explained.
“Knew this company would work,” she said, before alluding to a Biblical tale of an apostle who insisted on proof of the resurrection of Jesus.
“A lot of people are nonbelievers, doubting Thomases, didn’t believe it,” Gilmond said. She then presented checks as a form of proof that Regenesis 2X2 paid.
About two months later — in July 2009 — the U.S. Secret Service applied for search warrants in federal court in Washington state, the purported home of Regenesis 2X2. From a PP Blog story on Aug. 3, 2009 (italics added):
Agents, according to court filings, observed complaint letters directed at the firm being discarded into a Dumpster that was kept under constant surveillance. Also found in the Dumpster were copies of checks sent in by customers, other documents that included customers’ names and information to identify them personally, complaint faxes sent by customers and a letter from a law firm complaining about false, misleading and deceptive advertising.
In one case in which agents were observing one of the adult principals in the case, they observed a youth described as a teenager exiting a vehicle and “struggling with a large arm full of opened business and UPS Priority Mail envelopes,” the Secret Service said in court filings.
The juvenile entered a building and “then immediately came back outside and discarded the materials into an alley [D]umpster,” agents said.
Agents identified the adult under surveillance as a person “arrested by the Internal Revenue Service out of Las Vegas, Nevada[,] for felony violations related to Illegal Money Laundering from Securities Fraud and Wire Fraud” in a previous case.
How the Regenesis 2X2 probe proceeded is unclear.
What is clear is that Zeek eventually came to the fore. In court filings, Sorkin has noted that Gilmond has potential clawback exposure of more than $1.364 million from the court-appointed receiver in the Zeek Rewards Ponzi scheme case.
Gilmond once was listed on a Zeek website as both an “Employee” and “Official Rep.” So, too, was Zeek pitchman OH Brown of USHBB Inc., which produced ads for both Zeek and the collapsed Narc That Car pyramid scheme. For a while, at least, Zeek and Narc That Car appear to have used the same North Carolina-based bank: NewBridge.
Checks displaying the name of NewBridge showed up in independent affiliate promotions on YouTube in 2010. After one Narc affiliate quit the program, he moved to another one. The check-waving for the new “program” began at the one-second mark. Literally.
BehindMLM reported yesterday that Brown may have a tie to a burgeoning “opportunity” known as Offer Hubb. AdSurfDaily and Zeek promoters Todd Disner and Jerry Napier also appear to be in the communication chain of Offer Hubb. The U.S. Secret Service has described ASD as a “criminal enterprise.” The U.S. Department of Justice has described ASD as “insidious.”
A source told the PP Blog last week that Zeek figure Robert Craddock now was pitching Offer Hubb. Craddock is a purported Zeek “consultant” raising money to contest elements of the SEC’s Ponzi-scheme complaint and the court-appointed receivership. In July, Craddock sought to have the website of Zeek critic K. Chang removed from the Internet. Craddock was successful briefly, but the “K. Chang” Hub at HubPages returned.
For years, questions have been raised about whether fraud schemes within the MLM sphere were recycling money between and among schemes and putting banks and other financial-service companies in possession of tainted funds. Purported “Wiring Instructions” of Offer Hubb imply that the Wyoming-based entity is soliciting sums of up to $10,099 from prospects and is using City National Bank.
From a section of the BehindMLM report that describes an address used by Offer Hubb (italics added):
As mentioned in the introduction of this review, “1712 Pioneer Avenue” is the headquarters of “Corporations Today”. The address is apparently so well-known in tax haven circles that Reuters used the 1712 Pioneer Avenue building itself for a 2011 article on corporate secrecy in the United States.
UPDATED 4:20 P.M. EDT (U.S.A.) Unsolved mysteries remain in the Zeek Rewards Ponzi scheme case. Among the unanswered questions are these:
How many members did Zeek have in common with AdSurfDaily, a predecessor 1-percent-a-day scam to the Zeek scheme?
Why do some Zeek “defenders” appear to be engaged in bizarre bids to harass and menace Zeek critics?
Why did Zeek list certain ASD members or story figures as employees on its website — and why does some of the employee information published on Zeek’s website in June appear to be at odds with employee information contained in court filings by Zeek last week?
How much connectivity did Zeek have with scams such as NarcThatCar, AdViewGlobal, OneX and JSSTripler/JustBeenPaid, a “program” that may have ties to the “sovereign citizens” movement?
On June 7, the PP Blog reported that a Zeek Rewards MLM “program” website was listing the names of 16 Zeek “employees,” including the name of Terralynn Hoy, a mainstay in the AdSurfDaily Ponzi scheme story. Also included was the name of OH Brown, an executive at a company (USHBB Inc.) that produced ads for the NarcThatCar pyramid scheme. This information is reflected in screen shots Nos. 1 and 2. Notes by the PP Blog also are included.
Hoy participated in at least one conference call for Zeek, as did Brown. Zeek’s 1-percent-a-day-plus business model was very similar to the business model of ASD, which the U.S. Secret Service described in 2008 as a massive online Ponzi scheme that had gathered tens of millions of dollars. Zeek launched after the collapse of ASD and had members and/or figures in common with ASD and AdViewGlobal, a collapsed 1-percent-a-day “program” federal prosecutors linked in April 2012 to ASD.
Among Silver’s OneX claims was that OneX positions being given away were worth $5,000. Bowdoin declared OneX an excellent “program” for college students.
Even though Zeek claimed Silver, Hoy, Catherine Parker, Brown, Trudy Gilmond and Marie Young Cain as “employees” in June, they are not referenced as “EMPLOYEES, OTHER PERSONNEL, ATTORNEYS, ACCOUNTANTS & OTHER AGENTS/CONTRACTORS” in a Sept. 17 court filing by Rex Venture Group LLC/Zeek operator Paul R. Burks.
Also absent from Burks’ Sept. 17 list of Rex/Zeek employees/contractors is Robert Craddock, who identified himself in July as a Rex “consultant.” In July, prior to the SEC’s Ponzi allegations against Zeek, Craddock sought to disable the Hub of Zeek critic “K. Chang” by filing a complaint for purported copyright/trademark infringement and libel with HubPages.com. Craddock was successful briefly, but HubPages eventually restored the “K. Chang” Hub. Craddock later became involved in a purported effort to raise funds to “protect” Zeek affiliates from the SEC and/or the court-appointed receiver in the Zeek Ponzi case.
Gilmond once pitched Regenesis2x2, a “program” that became the subject of a U.S. Secret Service investigation in 2009. The Secret Service also is investigating Zeek. The SEC described Zeek last month as a $600 million Ponzi- and pyramid scheme.
Precisely how and when Rex/Zeek hired or replaced/dismissed employees is unclear. The names of a number of individuals listed by Zeek as employees in June do not appear on the list Burks filed in court last week.
NarcThatCar effectively collapsed in 2010, after coming under scrutiny by the Better Business Bureau and investigative reporters. Narc operated from Texas — and yet did part of its banking in North Carolina at one of the banks used by Zeek. Both Narc and Zeek used USHBB Inc. to produce ads for their respective “programs.” Both Narc and Zeek scored “F” grades with the BBB — and when the BBB published negative information about the respective “programs,” some affiliates of the respective “programs” claimed the BBB was a fraud.
Zeek ‘Defender’ Stalks PP Blog, Starts Disinformation Site After HubPages Restores ‘K. Chang’ Site Targeted By Craddock
The PP Blog is reporting today that, after the SEC described Zeek as a $600 million fraud and after HubPages restored the “K. Chang” Hub critical of Zeek and targeted by Craddock, a purported Zeek “defender” used the Internet repeatedly to send harassing communications to the PP Blog. Dated Aug. 28, one such communication was an announcement that the PP Blog and “K. Chang” had been targeted in a retaliation campaign for their respective reporting on Zeek.
3.
4.
The Blog’s stalker created more than a dozen bogus usernames and email addresses to send harassing (and bizarre) communications to the PP Blog.
Here is one from Aug. 31 (italics added):
Watch out for the Romney lover namely KSChang!!!! He was saw holding hands with Mitt, caressing the presidential candidate, while surfing PatrickP’s amazing, smart, funny, and romantic blog.
Mitt Romney is the Republican nominee for President of the United States.
For reasons that remain known only to the PP Blog’s cyberstalker, the individual also sent a one-word harassing communication — “Pussy” — to the thread below this Aug. 29 PP Blog guest column by Gregg Evans. Separately, the cyberstalker sent a communication that planted the seed Evans would get sued for his Aug. 29 PP Blog column.
“Are you willing go toe to toe with a lawyer on your claims and back up this article?” the cyberstalker wrote.
On Aug. 31, the cyberstalker — who’d been banned under multiple identities — sent this harassing communication to the PP Blog:
“What happened to your face dude, looks like you got ran over by an ugly truck.”
“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!
Our assertion: Were he alive today and desperately needed cash, famed daredevil Karl Wallenda would find Zeek’s tightropes too dangerous to walk.
Purported MLM “expert” sent to woodshed: Zeek “consultant” and former SEC defendant Keith Laggos reportedly gets the Zeek boot after using phrases associated with the investment trade and after suggesting that gambling regulations could be used to derail the Zeek train in the near future.
Train wrecks and pom-poms: To his credit, MLMHelpDesk Blogger Troy Dooly reports the Laggos news and dubs an incendiary audio recording featuring Laggos into a Dooly-produced video. But known for his ability to find something “positive” in an MLM train wreck, Dooly goes on to suggest Laggos used Zeek-banned words because he was distracted and wasn’t concentrating. Dooly later declares that an examination into Zeek’s business practices by North Carolina Attorney General Roy Cooper is “exciting” news.
Only in Stepfordian MLM: Zeek cheerleading video with Dooly presented as centerpiece and Laggos presented as key answer man remains online, even after Zeek cans Laggos and Dooly questions the ethics of Laggos while at once making excuses for him.
Cluelessness: No guidance from Zeek on whether affiliates should avoid using the video when introducing Zeek.
More cluelessness: No guidance from Zeek on whether affiliates should continue to use marketing props published by Laggos’ Network Marketing Business Journal, a previous subject of gushing from Dooly.
Plan B: Laggos heralds Lyoness.
Stepfordian MLM vomit: Lyoness trades on name of former South Africa President Nelson Mandela, a recipient of the Nobel Peace Prize.
Why lots of people are fed up with Stepfordian MLM: As Lyoness uses an image of Mandela in a marketing campaign, AdSurfDaily’s Andy Bowdoin awaits sentencing in case in which ASD was accused of trading on the name of then-U.S. President George W. Bush to sanitize $110 million Ponzi scheme.
Whatever “works” is OK in Stepfordian MLM: As nascent penny-auction site and upstart Zeek competitor known as Bids That Give prepped for launch and positioned itself as a company that would aid charities for children, early promos traded on the name of the White House and Chelsea Clinton, the daughter of former President Bill Clinton and U.S. Secretary of State Hillary Clinton.
Oddities: Narc That Car/Data Network Affiliates/Phil Piccolo/Text Cash Network.
More . . .
** ______________________________ **
EDITOR’S NOTE: While performing a high-wire stunt in Puerto Rico in 1978, legendary daredevil Karl Wallenda fell to his death. He was 73, a risk-taker to the end.
UPDATED 11:39 P.M. EDT (AUG. 14, U.S.A.)
This is one of those “only in Stepfordian MLM” stories, a story that features not one, but two tightropes over a treacherously windy gorge Karl Wallenda would judge too dangerous to walk even if the daredevil business were in a sustained slump and he desperately needed cash. These are the tightropes over the Zeekler/Zeek Rewards Gorge, a man-made gulch in Lexington, N.C., potentially MLM’s next Quincy, Fla.
Quincy was the home of AdSurfDaily, a company that did an almost inconceivable amount of damage to MLM’s already-suffering reputation — first by creating an obvious, five-alarm Ponzi scheme and trying to disguise it as a “revenue-sharing” program and, later, by trying to “save” itself by comparing the U.S. Secret Service to “Satan” and the 9/11 terrorists.
Like the ASD story (and far too many MLM tales), the Zeek story is one that mixes the incongruous with the bizarre and only reinforces negative stereotypes about multilevel marketing.
Keith Laggos, a figurative tightrope-walker and purported MLM expert who once opined that AdSurfDaily’s 1-percent-a-day “program” was not a Ponzi scheme and later became a consultant whose image appeared repeatedly in a cheerleading video for the Zeek Rewards 1-percent-a-day-plus “program” after ASD was raided by the U.S. Secret Service in a Ponzi scheme case, is out, the company reportedly told Blogger Troy Dooly. (Link below.)
Laggos, though, appears not to have been fired for his ASD opinion. Indeed, Zeek may find comfort in that musing, which has been used by at least two ASD members (Todd Disner and Dwight Owen Schweitzer) who accused the U.S. government of presenting a “tissue of lies” to a federal judge when bringing the ASD Ponzi forfeiture case. Both of those ASD members also emerged as Zeek promoters. Curiously, the claim that the government had presented a “tissue of lies” was made longafter ASD had lost the case in both U.S. District Court and the U.S. Court of Appeals.
ASD and its apologists never were known for their impeccable timing. Neither was a 1-percent-a-day ASD knockoff known as AdViewGlobal (AVG), which incongruously announced a month after its February 2009 launch that its bank account had been “suspended” and that its CEO had resigned but would remain in the “accounting” department.
Two months later, AVG, which purported to operate from Uruguay while using U.S.-based Gmail to perform customer service, announced its banking problem had been solved by an offshore facilitator. AVG made this announcement on the same day the President of the United States announced a crackdown on offshore fraud. AVG was done weeks later. Before it exited the stage, it apparently thought it prudent to threaten to sue members who shared negative information and perhaps even have their Internet connections shut down.
Zeek is playing in this same bizarre field. Over the past couple of weeks, Dooly has ventured that Zeek might sue Randy Schroeder, an executive with the Mona Vie MLM company, for using words Zeek might find objectionable — “Ponzi” and “pyramid,” for example. And Dooly has suggested that a North Carolina credit union was risking a lawsuit from Zeek. Meanwhile, a Zeek critic known as “K. Chang” was informed by a purported Zeek “consultant” that Zeek might sue if its efforts to bring down “K. Chang’s’ site on HubPages.com failed.
Zeek now bizarrely claims that “all” criticism of Zeek has been unfair.
This claim was made just days after Zeek appears to have fired Laggos for casting his MLM line elsewhere while a Zeek “consultant” and while not sticking to the company line that Zeek does not constitute an investment opportunity. The other “program” is known as Lyoness, which Laggos has described as his “Plan B” and a “Plan B” for current Zeek members.
MLM ‘Mo’
To hear Laggos tell it on tape, the MLM business is the “momentum” business. One of the ways to maintain the momentum is to move certain banking operations offshore, say, to places such as Hong Kong. Laggos helped Zeek do that, according to Laggos. But Zeek might lose the mo and might not be far enough away to neutralize the regulators, he speculated.
No matter, Laggos ventured. There’s always another company with mo.
“Since last November, Zeekler has had the momentum,’ Laggos intoned in a recording now playing on Dooly’s Blog as part of a YouTube video and report on the sudden sacking of Laggos. “I believe they are going to lose the momentum shortly . . . The company now that’s gaining momentum — and I think it will be the momentum company over the next six months or a year — is Lyoness. And I’m suggesting that a lot of you guys consider Lyoness as your Plan B company now. Stay working with Zeekler. Keep promoting it. Don’t cross-sponsor it, but build a second income. Now, what’s nice about an ideal Plan B company is you would be able to work passively. Lyoness is that kind of company.”
In HYIP-speak, the word “passively” is code that tells participants that they won’t have to do much or anything at all to pile up cash (a/k/a “passive earnings”) by the boatload if they send in enough cash at the beginning of a scheme. Zeek is afraid of that word because it’s the type of word that can cause the SEC to come knocking. Lots of MLM scams that rely on willfully blind promoters to gain a head of steam use it in the early stages. When things get too hot, they try to take it off the table. The reason they try to take it off the table — sometimes by threatening affiliates — is it can lead to civil and criminal charges, seizures of bank accounts and investigations by multiple agencies.
Mixing the language of investments with references to Plan B didn’t do Zeek any favors, to be sure. Another thing that didn’t do Zeek any favors was Laggos’ reference to Zeek becoming the “momentum” company “last November.” In late September of 2011, the U.S. government released about $55 million in remissions payments to victims of the ASD Ponzi scheme.
This leads to questions such as these: How much of Zeek’s “momentum” was fueled by funds originally seized in the ASD Ponzi case and returned to victims in the form of remissions payments? How many ASD members turned around and plowed what effectively was their crime-victim compensation into Zeek, another 1-percent-a-day scheme? Why did Zeek promoters and former ASD members Disner and Schweitzer wait until November 2011 — the same month Laggos now says Zeek became the “momentum” company — to file their ASD-related lawsuit against the government and to present a federal judge an opinion from Laggos that ASD was not a Ponzi scheme?
“Plan B,” also known as “Don’t put all your eggs in one basket,” has a long and sordid history in HYIP Ponzi Land. AVG, for instance, was a de facto Plan B company set up after ASD, the Plan A company, got raided by the U.S. Secret Service on the Tuesday after the previous Friday’s seizure (Aug. 1, 2008) of ASD bank accounts. Lots of ASD members deluded themselves into believing that official company line that God was on ASD’s side. Some of ASD’s earliest post-seizure apologists told the troops that the seizure was a good thing because it would provide the government an opportunity to see how lawful and wholesome ASD truly was, that the government did not understand the business model and had made a monumental mistake.
The MLM vultures, though, had a slightly different take. In case the government didn’t see the ASD light, they speculated, ASD members could join other autosurfs, HYIPs and cash-gifting schemes. These Plan B schemes would enable ASD losses to be made up elsewhere. “Offshore” programs were positioned as the best.
Among the tips Laggos provided to listeners of the Lyoness conference call was this: “Don’t put no more than 70 percent back in [Zeek]. Take out 20 or 30 percent [on] a daily basis. [Unintelligible.] This would be a good place. But, by the same token, if you put $10,000 in Zeekler, if nothing happens over the next year, you’ll probably make $30,000 or $40,000, if that’s all you do without building the front end, the matrix . . . The same amount of money in Lyoness, you’re looking . . . and not doing anything else, without single sponsoring . . . you can probably make a quarter-million dollars.”
The threat to Zeek, according to Laggos, is the FTC and how U.S. gambling regulations could be applied to penny-auctions such as its Zeekler arm. His words on the tape suggest he is confident that Zeek has sufficient cover to ward off a Ponzi/securities investigation. But even as he’s suggesting Zeek has the securities angle covered, he’s using the language of investments.
We wonder: Can MLM really have sunk to these deplorable depths?
But it gets even worse.
Laggos then suggested Lyoness could be used as a hedge in case the FTC acted against Zeek.
“If I’m wrong about what’s gonna happen with the penny auctions — and if you look at my career, I haven’t been wrong often — then the worst-case scenario is we screwed up and we made two incomes . . . We’re making two great incomes with two great companies.”
Dooly, whom to date hasn’t found Zeek’s various claims altogether too much, now has decided that Laggos crossed the altogether-too-much line when he harrumphed for Lyoness and used certain words Zeek finds offensive.
While the featured speaker on the Lyoness call last month with Zeek members listening in, Laggos spoke about Zeek in “several” ways that were “way out of compliance,” Dooly ventured in his video report running on YouTube.
Laggos “talks about putting money into the game,” Dooly reports. “I mean, this is bad right here. You can’t put money in. OK? You either join the company and you’re buying memberships, you’re buying bids. But for Keith to be talking like this was an investment-type deal. This is just . . . and we all fall prey to this. But this is why you shouldn’t be doing public calls when you’re under fire and you’re not paying attention to what you say. And you can hear in Keith’s case — the phone [is] ringing, his assistant [is] coming in to talk to him, his mind is not in the game the way it should be. And that is just . . . it’s sad right now ’cause he’s no longer with [Zeek] . . .”
In short, according to Dooly, Laggos’ big sin was painting Zeek as an investment program in contravention of the Rules Of Zeek.
Not sticking to the script, however, is hardly an original sin within the Zeek sphere. In 2011, while speaking during a conference call to raise money for the Disner/Schweitzer ASD-related lawsuit against the government, Schweitzer, a one-time lawyer whose license was suspended in Connecticut, said he’d invested in ASD. Nevertheless, Disner and Schweitzer later presented a federal judge Laggos’ opinion that ASD was not a Ponzi scheme and that providing money to ASD did not constitute making an investment.
Nobel Peace Prize Used As MLM Stage Prop
Lyoness is an MLM company eager to let its participants and prospects know that it is building a school in the hometown of Nelson Mandela and that a Lyoness team recently was invited to the 1993 Nobel Peace Prize-winner’s home. It even publishes a picture to prove it and notes that a Mandela grandson is a Lyoness rep.
Back in the United States, meanwhile, former ASD President Andy Bowdoin will find out Aug. 29 how long he’ll spend in federal prison. Zeek’s business model and disclaimer language strongly resemble that of ASD, which the U.S. Secret Service described as a “criminal enterprise” that relied on linguistic sleight-of-hand to draft tens of thousands of people into an electronic Ponzi scheme. ASD traded on the name of then-U.S. President George W. Bush, in effect using the White House to sanitize a massive international fraud caper.
Welcome to the Highwire Wing of MLM.
While all of this is going on, a nascent penny-auction “program” and upstart Zeek competitor that claims it exists to elevate children out of poverty is getting ready to unleash itself on the consuming public.
That “program” is known as Bids That Give. One prelaunch promo claimed that a founding affiliate was an SEO expert once hired by a candidate for the U.S. Presidency. The first three minutes of the promo did not even reference Bids That Give. Instead, it dropped names linked to the White House, including the name of former First Daughter Chelsea Clinton and Doug Read, an adviser to two U.S. Presidents. For good measure, the promo dropped the name of NBC News anchor Lester Holt.
The most vomitous MLM “programs” are infamous for dropping names. It is typically the case that the individuals whose names are dropped have no affiliation whatsoever with the “program.” But name-dropping and brand leeching have proven to work time after time in MLM scheme after MLM scheme. (See screenshot.)
Did Mark Zuckerberg REALLY endorse JSS Tripler/JustBeenPaid. According to this Blog, the answer is yes. Facebook did not respond to a request for comment from the PP Blog last year on claims that Zuckerberg had endorsed JSS/JPB, which purports to provide a return of 60 percent a month.
MLM And Wordplay
In 2009, ASD’s Bowdoin was sued by some members of his own company under the federal racketeteering (RICO) statute. Looking at it another way, the ASD members came to believe that ASD was a criminal enterprise with a plan to expand while coming up with new and better ways to steal.
Because veteran MLM huckster Bowdoin also was a veteran securities swindler who’d been charged at the state level with fraud in at least three Alabama counties before launching Florida-based ASD in 2006, federal prosecutors said, Bowdoin tried to avoid the use of the language of investments as a means of keeping the 1-percent-a-day ASD scheme under the radar.
The linguistic cover Bowdoin chose — a cover the Feds stripped bare — was that ASD was an “advertising” company with a “revenue sharing” program, not an investment company selling “securities.”
Bowdoin tried to create additional cover by saying payouts were not guaranteed, according to federal court filings.
Now, four years after the ASD raid, Zeek is using the same type of disclaimer language and members are getting the same sort of instructions on what words to avoid.
Federal investigators became wise to this type of linguistic charade long ago. The charade was outlined in the 2010 criminal indictment against Bowdoin. The indictment quoted Bowdoin himself laying out the linguistic plot to hide the true nature of the 1-percent-a-day ASD program and 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.”
Wordplay to mask an investment scheme also was referenced repeatedly in the forfeiture complaints against more than $80 million in ASD-related bank accounts (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.” — Source: Federal forfeiture complaint, Aug. 5, 2008.
Only In MLM La-La Land
To be sure, the departure from Zeek of Laggos is a big story. But it’s not the biggest story. The biggest story is that the Paul Burks-led company already was walking a tightrope when it hired the tightrope-walking Laggos and now has cut his rope, casting him into the gorge without informing the membership at large and without pulling the tightrope-walking promotional material that references Laggos or was produced by his publishing company.
Some of that promo material features tightrope-walking Dooly, who’s now questioning the ethics of tightrope-walking Laggos.
How strange is the latest PR disaster to rock Zeekland? So strange it almost defies description.
As noted above, news of the Laggos departure was delivered by Zeek-friendly Blogger Dooly. And the news was delivered even as images of Dooly appeared online as a centerpiece in the same cheerleading video that features images of Laggos as centerpieces. The video largely consists of still photos taken at a Zeek “Red Carpet Day” event in Clemmons, N.C., on June 13. Incredibly, the video continues to appear online, despite the sudden and unexpected departure of Laggos last month.
On Aug. 4, Zeek used its Blog to accuse unspecified “North Carolina Credit Unions” of slander for expressing concerns to customers about Zeek. The post implied Zeek members who didn’t toe the company line would be penalized. Such members were “violators” of company policy, the firm said.
But Zeek has not addresed the Laggos issue on its Blog. Nor has it provided any guidance on whether members should stop using the Zeek cheerleading video that features both Laggos and Dooly, along with Zeek staffers, executives and members who showed up at the June 13 event in Clemmons. The Laggos-produced written materials also are out there, with no guidance from Zeek about whether members should continue to use them or to rely on them in any way.
Like ASD, Zeek plants the seed that participants will earn a return that corresponds to an annual return in the hundreds of percent but insists it is not offering an investment. The office of North Carolina Attorney General Roy Cooper said last week that it had asked Zeek to produce “documents” as part of an “examination” of its business practices. Dooly described that development as “exciting.”
Zeek is making MLM look ridiculous. Troy Dooly is making it look sillier yet. He should not be “covering” a company that is trading off his credibility as an MLM advocate to sell itself. Dooly now is questioning the ethics of Laggos even as Dooly permits Zeek to use his image in marketing promos that also feature images of Laggos.
Prior to opining that ASD was not a Ponzi scheme — only to be one-upped later by Bowdoin, who said that it was when entering a guilty plea to wire fraud in May 2012 — Laggos agreed to settle a 2004 case with the SEC that alleged he issued laudatory press releases and a laudatory article for a company that later become the subject of a securities investigation without disclosing he was being compensated for touting the purported opportunity.
Laggos neither admitted nor denied the SEC’s allegations, which involved a company known as Converge Global Inc. and a subsidiary known as TeleWrx Inc. The future Zeek consultant settled the SEC case by disgorging nearly $12,000, paying interest of nearly $2,000, paying a civil fine of $19,500 and agreeing to a five-year penny-stock ban.
In April, Network Marketing Business Journal, which lists Laggos as its president, published a laudatory article on Zeek. Dooly memorialized the article’s publication by publishing a special Sunday story about it on Dooly’s MLMHelpDesk. He memorialized it further by producing a gushing video in which he described Laggos as “my good friend and mentor.”
“He is breaking a story here that I thought was amazing,” Dooly said of the NMBJ Zeek article, which gushed that Zeek has a 25 to 1 customer to rep ratio. The claim is important because, if true, it could take Ponzi and pyramid concerns out of play. Some Zeek critics doubt that it’s true.
In April, Dooly noted that NMBJ was one of his favorite publications and that he picked it up on that particular Sunday while relaxing near his pool over a cup of tea.
But now — less than four months after Dooly’s April 15 gushing story and video on NMBJ’s gushing story about Zeek and less than two months after images of both Dooly and Laggos appeared in the Zeek video in which Zeek gushed about itself — Laggos is out at Zeek.
“Breaking MLM News: Zeek Rewards Officially Parts Ways With Dr Keith Laggos After Recorded Call Goes Public,” Dooly advised readers in a headline.
The precise reasons for the departure of Laggos remain unclear. Also unclear is whether Laggos will retain a reported Zeek downline of about 4,500 members that he apparently was managing while at once being a paid Zeek consultant.
Produced by USHBB Inc., which once produced videos for the bizarre (and failed) Narc That Car license-plate recording scheme that claimed some affiliates were out-earning the President of the United States, the Zeek video heralding Laggos, Dooly and others shows Dooly mugging with Zeek executive Dawn Wright-Olivares and Laggos posing with Peter Mingils. The last names of both Laggos and Mingils are misspelled in the USHBB video.
Like Dooly, Mingils is a board member of the Association of Network Marketing Professionals. He’s also Zeek’s Training & Incentives Coordinator and is “rockin’ the Certified Trainers course curriculum,” according to Zeek.
Zeek, which at one time listed USHBB executive OH Brown as a Zeek employee, now says Brown is “banging out video after video.”
Some of the backstory surrounding the failed Narc That Car scheme is remarkably similar to the Zeek scheme. In addition to the presence of USHBB, Narc and Rex Venture LLC, Zeek’s purported parent company, both have scored the Better Business Bureau’s lowest rating: “F.”
Affiliates of both Narc and Zeek, meanwhile, have sought to turn attention away from the core issues surrounding both Narc and Zeek by suggesting that the BBB is a fraud.
But perhaps most compellingly, the now-failed Narc scheme once did at least part of its banking at NewBridge Bank, one of the banks that Zeek used before mysteriously announcing on Memorial Day that it was ending its relationship with NewBridge. Narc was based in Texas. How it ended up banking at NewBridge is unclear.
What is clear is that Narc was a pyramid scheme that planted the seed it existed to help the U.S. AMBER Alert system for locating abducted children and traded on imagery of the White House. Both the U.S. Department of Justice and the National Center For Missing and Exploited Children, which administers part of the AMBER Alert program, confirmed to the PP Blog more than two years ago that they had no affiliation with Narc.
A Narc Knockoff With Phil Piccolo As Background Player
Narc appears to have inspired a knockoff MLM scheme known as Data Network Affiliates, which was linked to longtime MLM huckster Phil Piccolo. In late 2011, DNA’s website — and the website of another a Piccolo-linked “program” known as OWOW — were used to drive traffic to an emerging MLM scheme known as TextCashNetwork (TCN).
In December 2011, the PP Blog reported that TCN had used the name of Rex Venture Group on its website in the context of a purported “ASSIGNMENT” clause. The Rex Venture reference later mysteriously went missing from the TCN site, a circumstance that could cause investigators to question Rex Venture about whether it was aware that its name appeared on the TCN site and whether it had any business relationship with TCN.
If this is modern MLM, MLM is in a lot of trouble. Karl Wallenda, who built a magical name in the daredevil business and made a career out of taking risks, wouldn’t do Zeek.
EDITOR’S NOTE: Our theory about Zeek Rewards is that it’s a slow-motion, pyramid-style Ponzi scheme being driven by any number of clueless affiliates who do not understand they are being influenced by steroidal puppeteers and MLM’s Great Wing of Willfully Blind Hucksters, Religious Frauds and Disingenuous Opportunists, PR Amateurs, Government Agitators and Unindicted Felons and Misdemeanants. We had a similar theory about AdSurfDaily. Read this document (courtesy of the ASD Updates Blog) and see if you agree that Zeek affiliates need to be asking some very serious questions about their “program.”
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UPDATED 1:39 P.M. EDT (U.S.A.) If you expected to be less confused about Zeek Rewards after listening to Jim Gillhouse and Troy Dooly chat up Zeek COO Dawn Wright-Olivares Friday night on ACES Radio Live, you’re apt to have come away disappointed — or perhaps even more confused. (Link to recording at bottom of editorial.)
The 86-minute show began with something that resembled a hopeful note: Gillhouse implied he’d hold Zeek’s feet to the fire and play “bad cop” to Dooly’s “good cop” because of various controversies swirling around Zeek. Co-host Dooly, though, seemed to bristle at the “bad cop” remark.
“Well, it ought to be interesting because I’m learning that bad cops don’t usually have all the facts,” Dooly said.
With that remark, the radio program more or less devolved into a session in which Wright-Olivares was permitted to ramble . . . and ramble . . . and ramble. The questions Dooly put to a top MLM executive who represents a company that plants the seed it offers a return of more than 1 percent a day without being the Bernard L. Madoff Investment Securities LLC of multilevel marketing were asked with sugary and/or leading preambles — with Dooly effectively stifling the worthy aims of his co-host and coming off as Zeek’s PR flack and spin doctor.
When Zeek’s story is compared to the tale of Madoff’s relatively modest (compared to Zeek) but unusually consistent returns of around 10 percent a year, Zeek is outperforming the notorious Ponzi swindler by a factor on the order of 30 to one. Zeek, though, insists it is not offering an investment. It also preemptively denies it is a “pyramid scheme” and plants the seed it will terminate any affiliate who suggests Zeek is offering an investment program.
Gillhouse tried. He deserves credit for that.
After not liking how Gillhouse framed a question to Wright-Olivares in the context of Zeek’s purported revenue-sharing program and recruitment efforts and how it purportedly spits 50 percent of its revenue with affiliates, Dooly behaved as though the question were asked of him and not the Zeek executive.
The information was “proprietary,” Dooly insisted.
He then bizarrely planted the seed that the ACES Radio Live show could get in trouble with a “regulator” for asking such a question and that Zeek itself could get in trouble for even responding to such a question. Dooly also implied that someone with dubious motives had set up Gillhouse by supplying him with bogus questions to make Zeek look bad. Such questions were offensive to American Capitalism, Dooly implied.
At one point in the “interview,” Wright-Olivares planted the seed that jealous competitors were after Zeek — in addition to the fraudsters and hackers who were making Zeek look bad in the eyes of its financial vendors, including offshore payment processors.
And there also was accidental comedy: Dooly called Zeek’s legal and compliance team the “crackpot team” when he meant the “crack team.”
We think he meant that, at least.
Gillhouse tried to make the show something other than a Zeek commercial and even caused Wright-Olivares to get snarky in one of her responses, but his own co-host made sure the Zeek executive had a cocoon into which she could retreat with no meaningful follow-up questions asked to tie up any of the incongruities about Zeek.
Although Dooly ventured that Zeek was “the most complex thing I’ve ever seen,” he did precious little to strip away any of the layers of complexity to show Zeek in the plain light of day.
“Proprietary” ain’t gonna cut it with Zeek — not with Zeek’s business model, not with criminals behind green curtains in the era of white-collar fraud relying on the word to coverup or sanitize massive fraud schemes, not after AdSurfDaily, not even if Zeek’s lawyers come on the show with the aim of turning on one of Dooly’s belt-high softball tosses in the middle of the plate and driving it into the upper deck of MLM La-La Land Stadium with the robotic Stepford fans rising to their feet in full Stepfordian awe. (Dooly’s suggestion that Gillhouse and/or the radio show itself could get in trouble for not being precise when asking questions is almost too strange to contemplate, so we are choosing not to contemplate it right now. Our plate is already filled with bizarre tales — JSS Tripler/JustBeenPaid, which has promoters in common with Zeek and plants the seed it can outperform Madoff on the order of 50 to one, for instance.)
It’s this simple if you are a Zeek affiliate and have questions about the company: Assume that Dooly is trying to wear two hats (at least) and therefore is not an independent voice. He is making personal appearances at Zeek Red Carpet events, posing for the camera with Wright-Olivares and even permitting his image to be shown in what effectively is a commercial for Zeek. Then, he’s “interviewing” Wright-Olivares on the subject of Zeek.
What you are observing, unfortunately, is Troy Dooly and a Zeek executive in MLM Radio La-La Land, a cheerleader quizzing a woman who apparently is committed to her own bizarre talking points and even running interference for her. Paul Burks is the purported boss of North Carolina-based Rex Venture Group LLC, Zeek’s purported parent company. Burks and Wright-Olivares go way back, Wright-Olivares says.
At the heart of the Zeek flap are questions such as these:
Does Zeek’s penny-auction arm (Zeekler) constitute a gambling operation and therefore put the entire Zeek enterprise at risk?
Does Zeek’s MLM arm (Zeek Rewards) make the company vulnerable to charges that it is selling unregistered securities as investment contracts because of the seed Zeek plants that a return of between 1 percent a 2 percent a day is possible — thus putting the entire enterprise at risk?
Are Zeek’s purported tens of thousands of affiliates exposing themselves to charges they are helping Zeek sell unregistered securities?
Given Zeek’s business mix, what agency is its principal regulator?
Because any number of Zeek affiliates also are promoting highly dubious opportunities or obvious scams on well-known Ponzi scheme forums such as MoneyMakerGroup and TalkGold, is Zeek coming into possession of funds tainted by fraud and depositing those funds in its own bank and payment-processing accounts?
Why is Zeek, a U.S. company, auctioning sums of U.S. cash and telling successful bidders it will pay them via offshore payment processors linked to fraud scheme after fraud scheme promoted on the Ponzi boards?
Why has Zeek had problems with at least two U.S. banks? (And why is Wright-Olivares now suggesting that the banks and affiliates are to blame?)
Why are Zeek customers openly complaining on a Zeek support forum that they have not received their auction winnings for weeks or even months?
Why is Zeek apparently closing itself to would-be prospects in Montana?
How is Zeek paying employees? How many employees — as opposed to independent contractors — does it have?
Why were/are some of the “employees” Zeek lists on its website participants in cash-gifting schemes, matrix-cycler schemes and autosurf Ponzi schemes such as AdSurfDaily?
Is Zeek relying on volunteers to catch up on a considerable backlog of customer-service issues — and calling the volunteers “employees?” Why would Zeek permit either volunteers or employees associated with various forms of online fraud effectively become spokespeople for Zeek? (Note: AdSurfDaily also relied on “volunteers.”)
Was Paul Burks or any Zeek executive, employee or volunteer involved in AdSurfDaily in any capacity? Did any Zeek executive, employee or volunteer receive any compensation from the remissions pool established by the government in the ASD Ponzi case? Did Zeek, whose business model is similar to ASD, come into possession of any money that flowed from the ASD remissions pool?
Is there a chance that Zeek’s growth was fueled in part by money originally seized in the ASD case and returned to participants last fall in the form of remissions payments?
Why is purported MLM expert Keith Laggos, who ventured an opinion that ASD was not a Ponzi scheme, a consultant to Zeek?
MLM attorney Gerald Nehra, an expert witness for AdSurfDaily, ventured an opinion that ASD was not a Ponzi scheme. Why is Nehra’s law firm purportedly doing work for Zeek?
While Wright-Olivares was rambling Friday night, she did say two attention-getting things. One was delivered almost as a throw-away line; the other was a butchered attempt to spin a major negative into a positive.
First, the butchered spin attempt: After Zeek implied on its Blog on May 28 that it voluntarily was closing two U.S. bank accounts, Wright-Olivares suggested Friday night that the closings were less than voluntary.
One of the banks simply was too small to handle Zeek’s rapidly expanding business, a circumstance that left the bank president “devastated,” Wright-Olivares said. But at the same time she was saying that, she also was implying that the bank booted Zeek because of all the problems associated with doing business with the firm. (Emphasis added.)
“Well, our bank of 15 years came to us and said, ‘You’re just way too big. We can’t handle this.’ This is like the small bank in Lexington, North Carolina, and the president of the bank was devastated . . .” Wright-Olivares said.
She went on to explain that Zeek had opened an account at a second bank, apparently after the multimillion-dollar MLM firm had approached a branch office to open the account instead of consulting with the main office. Although Zeek told the branch office what business it was in and apparently managed to get an account started, the matter got kicked upstairs and Zeek ultimately got booted, Wright-Olivares implied.
“They didn’t do their due diligence” at the branch office, she curiously explained.
Now, the throw-away line:
After Gillhouse asked her if Zeek’s profit pool is a “50/50 split” between Zeek and participating affiliates, Wright-Olivares said, “Yeah, the Retail Points Pool — the revenue shares . . . actually, [Zeek President and CEO] Paul [Burks] — Paul manages all that.”
Wright-Olivares went on to explain that Burks gives “us” up to 50 percent of Zeek’s daily net, an answer that strongly implied that she was both a Zeek executive and an affiliate sharing in the profit pool. Neither Gillhouse nor Dooly asked whether Burks made the revenue-sharing calculations in the plain light of day with other executives observing the process, whether Wright-Olivares also drew an executive’s salary from Zeek, whether her COO title was simply an in-house designation and whether she essentially was just an affiliate with a fancy title and more responsibilities.
The answer to those questions could be important because Zeek’s business model strongly resembles that of Florida-based AdSurfDaily, which the U.S. Secret Service said in August 2008 — nearly four years ago — was operating a massive online Ponzi scheme. Like Zeek, ASD positioned itself as a revenue-sharing program that split 50 percent of its daily receipts with affiliates, awarding them an unusually consistent gain of about 1 percent a day.
And like Zeek, some ASD executives held fancy titles. In the end, however, the titles that ASD handed out appeared to be simple naming conventions designed to create the appearance of legitimacy. No evidence has emerged that any purported executive with the possible exception of ASD President Andy Bowdoin was anything other than an affiliate who held a fancy title in ASD’s MLM la-la land. Bowdoin effectively was alleged to be a glorified affiliate of his own company, with federal prosecutors saying that he’d placed an ad for a failed, dissolved business in his own “advertising” rotator to qualify for a payout from ASD’s revenue pool.
Moreover, the Secret Service alleged that, contrary to assertions by Bowdoin that ASD was paying out to affiliates 50 percent of the daily revenue it generated from sales, ASD was not doing what it said it was doing.
“Rather, Bowdoin manufactured the revenue numbers to deceive members into believing that they could reasonably expect to receive an average daily return on their investment with ASD of at least 1%. This percentage in no way corresponded to the daily revenue that ASD was generating, but had been determined by ASD’s operators to be the amount needed to attract a steady stream of newcomers,” the Secret Service alleged in an affidavit originally filed under seal in February 2009, as the agency’s then-eight-month-old probe into ASD’s businesses practices continued.
In essence, the Secret Service alleged that Bowdoin was the man behind the colloquial green curtain and that he and unnamed others were fudging numbers and compartmentalizing information to keep the $110 million ASD scam afloat. Participants needed to hear a certain number or they weren’t apt to play, and Bowdoin and his coconspirators delivered that number — 1 percent a day — all while insisting ASD was not offering an investment product and giving themselves a further out by claiming revenue-sharing payouts were not guaranteed.
There have been no allegations of wrongdoing against Burks or Wright-Olivares or Zeek, but the remarks by Wright-Olivares are troubling.
“Paul manages all that?”
In closing, we present to you Paragraph 16 of a U.S. Secret Service affidavit filed on Feb. 26, 2009. This document was part of a seizure action that targeted the bank accounts of certain ASD members. We urge readers who may be members of Zeek not to listen to anyone who argues the document has no relevance in the context of the Zeek “program.” Indeed, you are about to read something that speaks compellingly about criminality — and steroidal puppeteers and Stepfordians — within the MLM universe:
16. Bowdoin and his [silent partner and 12DailyPro] sponsor knew that it was illegal to sell investment opportunities to thousands of individuals; thus, they were careful not to call participants “investors” but rather referred to them as “members.” Moreover, there were careful not to call payments to “members” “return on investments”; rather, they referred to the income program as a “rebate” program (A review of the ASD account database actually revealed ASD used the term “ROI” as a payment category for members). Although they were careful not to explicitly state that any income from ASD was guaranteed, both ASD founders intended that prospective members understood that they would receive better than market returns. Bowdoin and his sponsor were paying the stated 150% return and knew that ASD members expected that return. Bowdoin and the sponsor had discussed the need to pay at least one percent a day to members for members to promote the program to others.
A Blog targeted at senior citizens is recruiting affiliates for Zeek Rewards, JSS Tripler/JustBeenPaid and other online "programs" that suggest they can create riches. (Redaction by PP Blog.)
EDITOR’S NOTE: As the PP Blog was researching matters pertaining to the Zeek Rewards MLM “program” and preparing the post below for publication, it encountered a subdomain of the ZeekRewards.com website styled “zeeksupport.” A page on the subdomain purports to identify 16 Zeek “employees,” although is was unclear whether the workers received a wage or salary or were independent contractors.
Here is the full URL: http://zeeksupport.zeekrewards.com/zeeksupport/people
Included among the “employees” listed were Terralynn Hoy and Catherine Parker, both of whom were affiliated with AdSurfDaily, which the U.S. Secret Service alleged was a Ponzi scheme that had gathered at least $110 million. Hoy, at least, also was affiliated with an ASD knockoff known as AdViewGlobal.
In April, federal prosecutors in the District of Columbia said they’d tied ASD President Andy Bowdoin to AdViewGlobal. Bowdoin, 77, pleaded guilty to wire fraud last month after being charged criminally in 2010 for his role in the ASD Ponzi scheme. As part of a plea agreement, Bowdoin has been banned from MLM, Internet programs and mass marketing.
Although the story below does not report on the Zeek claims that Hoy and Parker are Zeek employees, a link on the Zeek subdomain leads to a page in which “Catherine Parker” is responding to Zeek customer-service issues, including one titled, “TO BE PAID FOR OUTSTANDING AUCTION WINNINGS, POST HERE.” Within the customer-service thread is a post from an individual who claimed to have won an April 12, 2012, Zeekler auction for $100 in U.S. cash with a winning bid of $16.28 — but never received his money. Other posters also claimed not to have been paid . . .
UPDATED 5:27 P.M. EDT (U.S.A.) A detailed post from December 2011 on an affiliate Blog that publishes information in German and English instructs affiliates of the Zeek Rewards MLM “program” how to wire funds to Zeek and have them deposited in its account at NewBridge Bank in North Carolina. The Blog, which targets senior citizens, is hosted on Google’s free Blogspot platform at a subdomain styled “getlucky2011.”
Zeek announced suddenly last week that it was ending its relationship with NewBridge. It also announced it was ending its relationship with BB&T, a second bank based in North Carolina. Zeek plants the seed that affiliates can earn a return of between 1 percent and 2 percent a day, but the “program” insists it is not offering an investment opportunity.
Included on the same affiliate Blog are multiple pitches for JSS Tripler/JustBeenPaid, a “program” purportedly operated by Frederick Mann that does not disclose its base of operations, may have ties to the “sovereign citizens” movement and advertises a return of 60 percent a month. The deck of the Blog, which includes a Zeek affiliate link in the right sidebar, features these words (bolding added):
“Indefinitely sustainable second income seniors earn independent living, plan their retirement, meet seniors assisted living, meet seniors online, secure your pension, look for retirement services and retirement benefits”
The post provides a glimpse into how U.S. banks could come into possession of funds tainted by fraud as the funds circulate between and among various HYIP programs advertised online. Research by the PP Blog shows that NewBridge also was one of the banks that handled the business of a bizarre MLM “program” known as “Narc That Car” that effectively collapsed in 2010 after the Better Business Bureau raised pyramid-scheme concerns and American television stations and investigative reporters turned their sights on Narc.
How Narc, a Texas-based company that used at least two names and at least two banks when issuing checks to members, ended up using NewBridge in North Carolina as one of its banks is unclear. Narc issued checks under the names of Narc Technologies Inc. and National Automotive Record Centre Inc. The entity later became known by a third name: Crowd Sourcing International.
National Automotive Record Centre Inc., Narc’s purported parent company, is listed in Nevada records as a corporation in “default.” Zeek’s purported parent company, Rex Venture Group LLC, also is registered in Nevada. Like Narc, Rex has scored an “F” from the BBB. (See Rex listing. See Narc listing.)
Like Zeek, Narc relied on a company known as USHBB Inc. to produce video sales pitches for its opportunity. USHBB is based in Indianapolis. Among its listed officers is OH Brown of Mount Pleasant, S.C. Brown hosted this May 2012 call for the Zeek “program” and also is listed on Zeek’s website as a Zeek “employee” who simultaneously holds the title “Official Rep.” Whether Brown receives compensation from Zeek while also serving as the vice president of USHBB is unclear.
On March 15, 2010, the PP Blog published a story that reported that a video USHBB produced for the Narc “program” asserted that some affiliates were earning more money than the President of the United States.
As part of its reporting on Narc, the PP Blog visited a USHBB website in 2010 that claimed the company had done promotional work for MLM teams and companies such as Ad Surf Daily, AdGateWorld, BizAdSplash, Ad-ventures4U, TVI Express and Global Verge/Buzzirk Mobile. Virtually all of the enterprises listed were associated with get-rich-quick schemes or HYIP autosurfs. Some of the “programs” later went missing from the web or were accused of fraud.
Frederick Mann of JSS Tripler/JustBeenPaid was a promoter of both AdSurfDaily and Ad-ventures4U, according to records. Clarence Busby, a onetime business partner of ASD’s Andy Bowdoin, was the purported chief consultant and operator of BizAdSplash, an autosurf that vanished mysteriously in 2010. Erma Seabaugh, ASD’s purported “Web Room Lady,” also was affiliated with Ad-ventures4U.
On March 2, 2010, the PP Blog reported that a Narc affiliate known as “Jah” was seeking to drive business to Narc by producing his own videos and posting them on YouTube. “Jah’s” videos featured check-waving as a form of social proof that Narc “paid.” One of the videos, which later was removed, showed a Narc check drawn on NewBridge. Another “Jah” video that still appears online shows that Narc also had an account at a second bank.
“Jah” compared repping for Narc to working for the U.S. Census Bureau.
Some of “Jah’s” check-waving videos later were hidden from public view. Jah, however, was not the sole Narc affiliate to produce check-waving videos in which checks from NewBridge were displayed. Though Narc appears to be long gone, the PP Blog observed a video today on YouTube in which the name of NewBridge flashed on the screen.
Zeek has not provided specifics about why it ended its relationship with NewBridge.
Among the assertions on the German/English Blog that was targeting senior citizens and promoting both Zeek and JSS/Tripler/JustBeenPaid was that “SolidTrustPay is one of the worlds most trusted e-wallet providers.”
SolidTrustPay is a Canada-based payment processor that is handling business for both Zeek and JSS Tripler/JustBeenPaid.
The PP Blog reported on June 2 that JSS/JBP also was being promoted on a race-baiting and Catholic-bashing site known as VaticanAssassins. The VaticanAssassins site, among other things, asserts that ““Majority Savage Blacks were never taught to behave in civil White Protestant culture and thus have been released upon us Reformation Bible-believing Whites to further destroy our once White Protestant and Baptist American culture founded upon the Reformation’s AV1611 English Bible and a White Protestant Presbyterian Constitution with its attached White Baptist-Calvinist Bill of Rights.”
9th UPDATE 9:01 P.M. EDT U.S.A. Indianapolis-based USHBB Inc. and three of its principals — James A. Moore, Robert Mecham and Oscar H. Brown — have been sued by the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case.
