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Tag: Zeek

  • UPDATE: See Copy Of Letter From Zeek Receiver To Northern California Federal Court In Advance Of Possible Clawback Actions

    Below is a copy of a letter sent by counsel for the court-appointed receiver in the Zeek Ponzi scheme case to U.S. District Court for the Northern District of California. The PP Blog obtained a PDF of the letter from a publicly available source and took a screen shot of the PDF. The redactions were added by the PP Blog to obscure a specific phone number for an attorney and the name of a paralegal and a specific number for her. The Blog redlined the information in an abundance of caution because it could not immediately determine if was intended only for court personnel. The letter is otherwise unchanged.

    The letter and accompanying filings set the stage for the receiver to pursue clawback lawsuits against Zeek winners. You’ll note from the letter that the receiver paid a $46 filing fee. The same fee is referenced in filings in other federal districts. As of today, the receiver appears to have filed in 68 districts. That number is an estimate by the PP Blog and is unofficial.

    Receiverships act to gather money for distribution to victims of fraud schemes. They come with costs, such as professional fees, filing fees and delivery fees (such as mail fees and courier fees). Such fees are not unusual.

  • The Incredible Reach Of Zeek: Receiver Files In Guam

    This filing in Guam by the court-appointed receiver in the Zeek Rewards Ponzi scheme case may be the first in a U.S. territory.

    In yet another indicator of the incredible reach of the alleged Zeek Rewards Ponzi scheme, the court-appointed receiver has filed court paperwork in Guam.

    Guam is a U.S. island territory “approximately 3,300 miles West of Hawaii, and 1,500 miles east of the Philippines and south of Japan,” according to the website of Naval Base Guam.

    Whether U.S. military members in Guam bought into Zeek is unclear. Zeek was based in North Carolina, home state to four military installations.

    In August, the SEC said Zeek “raised money from more than one million Internet customers nationwide and overseas.” In July, the PP Blog reported that an article on Google News by an apparent Portuguese-speaking affiliate of Zeek claimed that the MLM “program” had more than 100,000 members in Brazil alone. Haaretz.com reported in August that Zeek may have had 20,000 members in Israel.

    In recent days, Zeek receiver Kenneth D. Bell has been posting notice of the August SEC complaint and his appointment as receiver in federal courts in multiple states.  The filing in Guam appears to be the first in a U.S. territory, as opposed to a state. The filings set the stage to consolidate Zeek-related court actions in the Western District of North Carolina before Senior U.S. District Judge Graham C. Mullen.

    Bell has said he’ll pursue clawback litigation against Zeek “winners.”

    Some military members were victims of the infamous “3 Hebrew Boys” Ponzi scheme in South Carolina, another state that includes multiple military installations.

    Some promoters of AdSurfDaily, a Zeek-like “program” that planted the seed it provided a return of 1 percent a day, deliberately targeted military members and their spouses.

    From a May 2008 pitch for ASD targeted at military families. ASD collapsed in August 2008.

  • UPDATE: Receiver Sets Stage For Clawbacks In Zeek Ponzi Scheme Case: Filings Provide Clues About U.S. States In Which Fraudulent Transfers Allegedly Occurred

    These filings related to the alleged Zeek Rewards Ponzi scheme operated by Rex Venture Group LLC are appearing in federal court dockets in multiple states today. There are 94 federal judicial districts in the United States, and such a filing is possible in any district in which the court-appointed receiver believes Zeek Ponzi proceeds reside.

    UPDATED 11:02 P.M. ET (U.S.A.) PP Blog reader “Tony” posted comments this morning about cases involving Rex Venture Group LLC popping up in federal courts beyond the Western District of North Carolina, home base of the SEC’s Zeek Ponzi scheme case and the court-appointed receiver. Rex Venture is the parent company of North Carolina-based Zeek.

    Tony initially observed that he’d seen case numbers for Rex-related filings such as this one on Justia.com, a site that tracks court filings. Tony noticed Justia references to filings in the Western District of Arkansas and in Arizona.

    It turned out that these two filings were only the tip of the iceberg. As the day proceeded, more and more references to filings began to appear on PACER, the public-access system for the federal courts.

    The ASDUpdates Blog has been tracking the filings today. As of the time of this post, there appears to be more than 40 such filings in various federal districts in various states. That number could increase because there are 94 federal districts and the filings will occur in districts in which the Zeek receiver has traced assets linked to the scheme.

    Receiver Kenneth D. Bell has said he intends to pursue clawback litigation against Zeek net winners in order to make victims of the alleged Zeek fraud scheme as whole as possible. The early math of Zeek suggests there were about eight losers for every Zeek winner.

    The filings now appearing on the dockets today in various federal districts are yet another indicator of the massive scale of the alleged Zeek fraud, believed to be the largest Ponzi scheme in U.S. history based on the number of victims. That number is estimated in the neighborhood of 1 million.

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

    Today’s filings are not lawsuits against individual Zeek promoters; those will come later, if the receiver and the promoters cannot negotiate a deal that will result in the return of sought-after funds. Today’s filings — in effect — are formal notifications to court officials in the various districts that the receiver may be operating in their districts under the authority of the federal court for the Western District of North Carolina.

    Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina is presiding over the SEC’s Zeek case and the receivership.

    Despite the SEC’s Zeek action, the HYIP universe continues to serve up wantonly destructive fraud schemes, thus potentially creating victims by the tens of thousands at a time. In many cases, the schemes are advanced by willfully blind hucksters, including hucksters who populate Ponzi scheme boards such as TalkGold and MoneyMakerGroup and race from scheme to scheme to scheme.

  • BULLETIN: Proposed Class-Action Against Zeek In Louisiana Transferred To North Carolina

    BULLETIN: A federal judge has transferred from the Eastern District of Louisiana to the Western District of North Carolina a proposed class-action lawsuit against Rex Venture Group LLC, Zeek Rewards and Paul R. Burks.

    The ruling by U.S. District Judge Carl J. Barbier  in New Orleans likely paves the way for Senior U.S. District Judge Graham C. Mullen of Charlotte to issue a specific order to stay the case. Both Burks and Kenneth D. Bell, the court-appointed receiver in the Zeek Ponzi scheme case brought by the SEC on Aug. 17 in Mullen’s courtroom, have sought the stay.

    In August, Mullen issued an order that “[a]ll Ancillary Proceedings are stayed in their entirety, and all Courts having any jurisdiction thereof are enjoined from taking or permitting any action under further Order of this Court. . . .”

    The prospective class action was filed in Louisiana on Aug. 24, a week after Mullen issued the stay in North Carolina.

    Burks has contended that the Louisiana plaintiffs tried to circumvent the Aug. 17 stay issued by Mullen by bringing an action in another federal district.

  • EDITORIAL: The ‘Zeek-Step,’ The Stepfordian Shuffle And The Stalinist HYIP

    On Jan. 22, 2011, nearly two years ago and long before the SEC brought the Zeek Ponzi scheme case in August 2012, the PP Blog proposed a new term in an effort to distill the economic and logistical nightmares of viral Internet crime to their essence: fraud creep. This followed our Dec. 12, 2010, post, which explained that America’s largest sports stadiums may not be large enough to accommodate all the victims of a single, web-based crime.

    Today the Blog is proposing another new term: Zeek-step, also known as “The Stepfordian Shuffle.” Zeek-step gets its name from the collapsed Zeek Rewards “program,” a 1.5.-percent-a-day ROI abomination (with accompanying recruitment commissions) boosted in part by serial MLM racketeers and Ponzi-forum criminals who pretended the 2008 AdSurfDaily Ponzi case never happened.

    To do the Zeek-step is to pretend the ASD Ponzi case brought by the U.S. Secret Service more than four years ago is meaningless. At the same time, the Zeek-step is characterized by post-complaint efforts to demonize the SEC and the receiver — and to paint Zeek as a noble enterprise, the sender of a high tide that would lift all MLM boats. The trouble with that claim is that the purported high tide appears to have sunk more than 80 percent of vessels that sought to navigate the Zeek waters.

    If you’re a Zeek victim — and if you’re unfamiliar with the ASD case — you should acquaint yourself with it right away. “Programs” such as ASD and Zeek were cancers on the global marketplace. The math of such schemes is approximately this: 86 percent of participants will become “losers” who subsidize enormous “profits” for a super-class consisting of about 14 percent — the “winners.”

    There may be 1 million or more victims of Zeek, according to court filings. Putting it another way, Zeek could fill the Rose Bowl to capacity with victims about 10 times over. The logistical challenges confronting the court-appointed receiver in the Zeek case may be unprecedented. So, yes, Zeek was an instance of fraud creep. The ASD case — large for its time four years ago with about 100,000 members — has been dwarfed by Zeek.

    Protecting The Super-Class

    Although the Zeeks of the world often are positioned as the byproduct of ingenious Democratic Capitalism even as critics incongruously are dismissed as Communists, Socialists, Nazis and enemies of the “free market,” the fact remains that “programs” such as Zeek are designed to channel huge sums to a super-class that largely is preordained. If Zeek were a political entity, this super-class would be seen as a Soviet-era Politburo. The rest of the field would consist of peasants who keep the uppermost Stalinists in fine liquor and cigars.

    One of the chief incongruities of “programs” such as Zeek is that “defenders” invariably position themselves as visionary Capitalists and rail against Statism — indeed, it’s axiomatic in HYIP schemes that a government agency that stops a scheme will be described as evil — and yet the “programs” being defended are all about keeping the Stalinists in their Chaikas and dachas.

    One way to view Zeek is as a for-profit enterprise that taxed 86 percent of its participants at 100 percent to create the “profits” for the elitist 14 percent. It is likely that some of the people among the 14 percent paid ZERO DOLLARS to Zeek. Zeek was particularly noxious because it planted the seed that MLMers without big lists still could profit by sending the company up to $10,000 and generating a profit over time from an abomination known as the Retail Points Pool.

    The SEC said Zeek manipulated the numbers to make that appear possible, to make it appear as though Zeek were a profitable enterprise capable of paying a return of 1.5 percent a day to potentially millions of people. The Secret Service said ASD did the same thing.

    Zeek was offensive at many levels, including the intellectual one. Most notable, in our view, is that purported Capitalists “defending” Zeek by railing against alleged Statism as practiced by the SEC don’t seem to make the connection that Zeek set things up to the maximum advantage of the Stalinists of the Electronic Age.

    A Ponzi-forum huckster with a big list and practiced in the art of turning blind eye to every HYIP fraud scheme that comes down the pike had a decided advantage over, say, an 85-year-old Florida widow who maxed out her credit card to join Zeek because the huckster caused her to believe she’d have more to leave to her children and grandchildren when God called her home.

    It is our hope that the SEC and the U.S. Department of Justice will act aggressively and quickly to oppose a motion filed Friday by certain members of the alleged Zeek Rewards Ponzi scheme to appoint an “examiner.”

    Jordan Maglich of PonziTracker has a fine story on Friday’s filing. Could it be true that some Zeekers actually want to further deplete the receivership estate of resources that should go to true victims?

    In the PP Blog’s view, embracing a story that Zeek was a legitimate Capitalist venture is to embrace a wicked myth. Hell, Stalin himself might have been the first in, seeing the beauty of how the profits could have propped up the Politburo. If the initial scheme that drove the vast majority of the profits to the elite Statists collapsed, he could simply have announced another five-year plan. PolitburoBids2.com?

     

  • Website Of MPB Today, Bizarre ‘Grocery’ MLM, Inaccessible

    From a 2010 affiliate promo for MPBToday.

    DEVELOPING STORY: The website of MPBToday — a Ponzi forum darling featuring a 2X2 matrix cycler in 2010 — has been inaccessible for at least 24 hours.

    Fabled Ponzi huckster “Ken Russo” — later of Zeek Rewards — was among MPBToday’s promoters.

    Although the MPBToday site returns this message — “Site temporarily unavailable. Connection timed out – please try again.” — it is returning a ping. MPBToday’s domain registration is not expired. The reason the site will not load is unclear.

    MPBToday, operated by Gary Calhoun and tied to a home-delivery grocery business known as Southeastern Delivery in Pensacola, Fla., was the subject of controversy since its inception.

    Some MLMers promoted the purported “opportunity” in bizarre fashion. In one promo, for example, President Obama and U.S. Secretary of State Hillary Clinton were depicted as Nazis — with First Lady Michelle Obama depicted as having experienced an embarrassing gas attack in the Oval Office after having sampled beans at a Sam’s Club store.

    In another bizarre pitch, an MPB Today affiliate claimed there were scammers within the company’s ranks, a circumstance that made it important for prospects to enroll in an honest downline.

    An investigation of MPBToday was said earlier this year to be under way. The website continued to appear online after vague reports of the probe surfaced. Now, however, the website is offline.

    In 2010, the U.S. Department of Agriculture said it was conducting a review of MPBToday.

    Questions also have been raised about whether MPBToday was conducting a pyramid or Ponzi scheme or both.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     

  • UPDATE: Sentencing For Legisi HYIP Ponzi Swindler Gregory McKnight Rescheduled For Feb. 5

    This grainy likeness of Legisi HYIP operator Gregory N. McKnight appears in U.S. court files.

    Sentencing for a Michigan man federal prosecutors accused of “semantic obfuscation” for the manner in which his “program” was promoted has been rescheduled for Feb. 5, according to the docket of U.S. District Judge Mark A. Goldsmith of the Eastern District of Michigan.

    The sentencing delay for Gregory N. McKnight, who conducted the Legisi HYIP Ponzi swindle, is at least the third. McKnight originally was scheduled to be sentenced Sept. 11. That date was delayed until Nov. 19 — and now has been delayed until Feb. 5.

    Prosecutors did not return a call seeking comment on the Legisi case, McKnight and the reason for the sentencing delay.

    But it is known that the court-appointed receiver in the Legisi case has moved for a contempt of court order against Paul Harary. Harary, 48, is a purported one-time FBI informant now in federal prison in Alabama for his role in a Boca Raton, Fla., investment fraud that occurred in 2004 and 2005.

    Receiver Robert B. D. Gordon (Corrected Aug. 22, 2013) alleges that Harary informed individuals who were researching McKnight for the purposes of selling him investments prior to the filing of the SEC’s Ponzi case in May 2008 that McKnight likely was operating a Ponzi scheme and offering impossible returns.

    Harary also allegedly consulted with at least one of the individuals about Legisi’s bizarre Terms of Service, including a provision that required investors to affirm they were not with the government, namely the IRS, the FBI, the CIA and the SEC. Harary, the receiver alleged, told the individual “that if Legisi was not doing anything wrong why would Legisi want these representations from their customers[?]”

    Despite Harary’s alleged misgivings about McKnight and Legisi and an acknowledgment by at least one of the individuals that McKnight likely was running a scam, the individuals allegedly decided to solicit money from McKnight for the purpose of investing in penny stocks and a real-estate limited partnership.

    McKnight allegedly turned over more than $20 million, beginning about a year prior to the collapse of his Ponzi, according to the receiver.

    But now Harary is ducking a deposition aimed at getting to the heart of the alleged fraudulent transfer, according to the receiver.

    HYIPs are infamous for using wordplay to try to duck securities regulators. An evidence exhibit in the Legisi case includes a transcript of McKnight interacting with undercover agents who’d infiltrated the purported “opportunity.”

    McKnight, according to the transcript, informed the agents that he was presiding over a “loan” program, not an investment program.

    The MoneyMakerGroup Ponzi forum also is referenced in court documents in the Legisi case.

    Zeek Rewards, another alleged Ponzi scheme, also was pushed on MoneyMakerGroup. Zeek, too, insisted it was not offering investments.

    McKnight pleaded guilty in February to wire fraud. Prosecutors have asked for a prison sentence of 15 years.

     

  • Firm Assisting In Zeek Receivership Probe Has Another High-Profile Case; New York Times Reports That Kroll Investigative Firm Discovered ‘Well-Concealed Ponzi Scheme’ At Kabul Bank And ‘114 Rubber Stamps For Fake Companies’

    A company retained by the court-appointed receiver in the Zeek Rewards Ponzi scheme case received a prominent mention in the New York Times yesterday.

    The company, the Kroll investigative firm, uncovered a massive Ponzi fraud at Kabul Bank in Afghanistan in which hundreds of millions of dollars were siphoned from depositors to benefit a “narrow clique” of people tied to the Afghan government, according to an audit report obtained the Times.

    Loan books were “almost entirely fraudulent,” the Times reported, citing the Kroll forensic audit.

    “At one point, Kroll’s investigators found 114 rubber stamps for fake companies used to give forged documents a more legitimate look,” the Times reported, citing the audit.

    From the Times (italics/bolding added):

    What Kroll’s audit found is that on Aug. 31, 2010, the day the Bank of Afghanistan seized Kabul Bank, more than 92 percent of the lender’s loan portfolio — $861 million, or roughly 5 percent of Afghanistan’s annual economic output at the time — had gone to 19 related people and companies, according to the audit.

    Kroll is one of the firms retained by Zeek receiver Kenneth D. Bell. Its name is referenced in the Preliminary Liquidation Plan Bell filed Oct. 8.

    In the filing, Bell informed Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina that Zeek had “at least one foreign account” that had not been seized in the aftermath of the SEC’s Ponzi scheme investigation.

    It was “not clear” whether the funds would be recoverable despite the fact the bank that holds the account has been served with a freeze order, Bell advised Mullen in the filing.

    Bell did not name the bank or its home country in the filings. Nor did he say how he discovered the account.

    On Aug. 17, the SEC described Zeek as a $600 million Ponzi- and pyramid fraud operating from Lexington, N.C.

    Some Zeek members have worked virtually nonstop since that time to demonize Bell, a former federal prosecutor who once successfully prosecuted a Hezbollah terrorist cell operating in the United States.

    Zeek had “internet customers and contacts throughout the United States and internationally,” Bell advised Mullen.

    Kroll Ontrack has assisted the receivership “with the collection of electronically stored information obtained from” Zeek, Bell advised Mullen.

    In the case in Afghanistan, Kroll prepared the audit for the country’s central bank, according to the Times. Twenty-two people have been charged in the Afghanistan case.

     

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  • SPECIAL REPORT: AdSurfDaily/Zeek Pitchman Todd Disner Gave Thousands To Gingrich, Romney After Soliciting Money To Sue The United States; Records Show Tax Liens Of More Than $405,000 Dating Back To 1999

    EDITOR’S NOTE: ASD was a multilevel-marketing scheme that planted the seed it paid a return of 1 percent a day on top of two-tiered affiliate commissions totaling 15 percent for recruiters. Federal prosecutors described the purported “opportunity” as a Ponzi scheme based in the the small town of Quincy, Fla., and operated by recidivist securities felon Andy Bowdoin.

    UPDATED 9:46 A.M. ET (NOV. 18, U.S.A.) A Florida man who claimed in a November 2011 lawsuit against the United States that AdSurfDaily was not a Ponzi scheme doled out thousands of dollars to Republican candidates and organizations in the following months, records show.

    The man, ASD promoter Todd Disner of Miami, joined with fellow Miami resident and suspended Connecticut attorney Dwight Owen Schweitzer in suing the United States as pro se plaintiffs after soliciting donations from fellow ASD members to fund the lawsuit earlier in 2011, according to records. As the lawsuit proceeded, Disner and fellow ASD promoter Schweitzer raised the prospect in court filings that the seizure of ASD’s database in a 2008 case brought by the U.S. Secret Service and federal prosecutors in the District of Columbia could lead to the ASD duo’s prosecution for tax evasion.

    A federal judge tossed the lawsuit in August 2012, but Disner and Schwetizer are appealing. They have accused the judge of “sophistry.”

    Both Disner and Schweitzer have been engaged in continuous litigation against the United States for more than a year. Neither has been charged with a crime. After their days promoting ASD, Disner and Schweitzer went on to promote Zeek Rewards, an ASD-like,  1.5-percent-a-day “program” with accompanying commissions that triggered probes by both the SEC and the U.S. Secret Service. On Aug. 17, the SEC accused North Carolina-based Zeek of operating a $600 million Ponzi-and pyramid scheme that potentially swindled more than 1 million investors.

    Zeek operator Paul R. Burks did not contest the SEC’s civil allegations and consented to a judgment in the case. Records show that Burks gave $2,500 to the campaign of GOP Presidential hopeful Ron Paul between 2011 and early 2012.

    On Dec. 26, 2011, only weeks after the Disner/Schweitzer lawsuit was filed against the government, Disner provided a donation of $1,000 to the GOP Presidential campaign of Newt Gingrich (Newt 2012), Federal Election Commission records show. The Gingrich donation by Disner appears to have been his first to a national candidate or organization. The FEC database, for example, shows no donations from Disner between Jan. 1, 1990, and Dec. 25, 2011.

    Disner matched the Dec. 26 donation with another $1,000 to Gingrich in January 2012, according to FEC records.

    Separately, records in Miami-Dade County show that the IRS filed a tax lien against Disner for $101,723 on Aug. 1, 2006. Included in that sum was $95,015.97 allegedly owed from 1999, and $6,707.77 allegedly owed from 2002.

    ASD, operated by the now-convicted and jailed Andy Bowdoin, launched just weeks after the IRS filed the lien against Disner. Two years to the day after the lien was recorded in Miami-Dade, the Secret Service seized $65.8 million from 10 Bowdoin bank accounts.  A raid of ASD’s headquarters followed four days later. Bowdoin later was charged criminally with operating a Ponzi scheme. Among the allegations against Bowdoin was that he had used money from the ASD Ponzi scheme to make a donation to the National Republican Congressional Committee.

    Bowdoin, 77, pleaded guilty to wire fraud in May 2012. In August, he was sentenced to 78 months in federal prison. Prosecutors said he was at the helm of a $119 million Ponzi scheme and promoted other MLM fraud schemes even after his December 2010 arrest.

    On Nov. 21, 2007, according to records, the IRS filed another lien against Disner in Miami-Dade totaling $294,940.89. This lien was for the 2003 and 2004 tax years. The IRS filed yet another lien against Disner on Oct. 22, 2008. This one sought $8,661.36 for the 2000 and 2001 tax years.

    All in all, records show three tax liens against Disner for the combined sum of $405,325.99.

    Whether Disner has cleared the IRS liens is unclear. What is clear is that, in June 2012, he raised the prospect in court filings that he could be prosecuted for tax evasion because of the seizure of ASD’s database in 2008. Records in the Zeek case, meanwhile, show that the Zeek database also has been seized.

    Records suggest that, with Gingrich out of the GOP Presidential race by May 2012, Disner switched his support to Mitt Romney, who went on to become the party’s nominee. Romney ultimately lost in the general election to President Obama, a Democrat seeking a second term.

    Gingrich, a former Georgia Congressman, is a former Speaker of the U.S. House of Representatives.

    On June 25, 2012, Disner gave $1,000 to Romney for President Inc., according to FEC records.

    Just days earlier — on June 18, 2012 — Disner and Schweizer claimed in federal court that the government’s Ponzi case against ASD was a “house of cards,” despite Bowdoin’s guilty plea and acknowledgment that he had operated a Ponzi scheme and that ASD never had operated lawfully after its 2006 inception.

    A month later — on July 17, 2012 — Disner gave $200 to the Republican National Committee, according to FEC records.

    Exactly a month after that — on Aug. 17, 2012 — the SEC filed an emergency action in federal court that accused Burks of presiding over a massive fraud scheme that effectively extended across the world.

    Within days of the SEC action, Disner — who previously solicited money to sue the United States for alleged misdeeds in the ASD Ponzi case — participated in a conference call with self-described Zeek “consultant” Robert Craddock, who himself was soliciting money for some sort of court action against the SEC or the court-appointed receiver in the Zeek case.

    Nothing has been filed by Craddock to date. During one call, Craddock dropped the name of former Florida Attorney General Bill McCollum, claiming McCollum as a “friend.” McCollum is a Republican. In 2008, while attorney general, McCollum accused ASD of operating a pyramid scheme.

    Some ASD members reacted by suggesting that McCollum and a Florida TV station that carried the news of the ASD lawsuit should be charged with Deceptive Trade Practices.

    Despite Craddock’s claim after the SEC action that McCollum’s law firm SNR Denton had become the attorneys for a Craddock and a group of Zeek members, SNR Denton appears to have decided not to represent Craddock or his group.

    FEC records show that Disner gave $1,500 to the Republican National Committee in September 2012.