On Aug. 17, the SEC filed spectacular allegations of Ponzi- and pyramid-scheme fraud against Zeek Rewards, which claimed it was not selling securities and members were not making an investment. Zeek operator Paul R. Burks was charged with selling unregistered securities as investment contracts.
Zeek abused the power of the Internet and raised $600 million from more than 1 million participants, the SEC charged
In August 2008, the U.S. Secret Service filed similar allegations against AdSurfDaily, a company with a 1-percent-a-day “program” similar to Zeek. Like Zeek, ASD claimed it was not selling securities and members were not making an investment. ASD operator Andy Bowdoin was indicted in November 2010 on charges of selling unregistered securities, securities fraud and wire fraud.
Bowdoin later acknowledged he was presiding over a Ponzi scheme that had gathered at least $110 million.
On Aug. 16 — just one day before the SEC went to court to halt the operations of Zeek — a “program” known as JSS Tripler/JustBeenPaid was clinging to its Zeek- and ASD-like cover story that it was not selling securities and members were not making an investment. JSS/JBP effectively has advertised a return of 2 percent a day: 730 percent a year.
“I just want to know — in the amount of money that I do invest . . . use to buy positions, is that . . . the investment that I’m doing?” a caller quizzed Frederick Mann, JSS/JBP’s purported operator.
“Dale,” JSS/JBP’s female conference-call host, then sought to set the caller straight on the wordplay of JSS/JBP.
“Well, first of all, we’re not investing here. We’re purchasing and we’re repurchasing. So, you need to get that verbiage clear.”
The SEC moved against Zeek the very next day. The U.S. Secret Service also is investigating Zeek.
Mann was a former pitchman for ASD’s scheme. Any number of Zeek members also promoted JSS/JBP.
Bowdoin pleaded guilty to wire fraud in May 2012. He is scheduled to be sentenced Aug. 29.
Like Zeek, JSS/JBP says it has more than 1 million members. Like Legisi, another HYIP scam broken up by the SEC and the Secret Service, JSS/JBP makes members affirm they are not with the government.
Legisi operator Gregory McKnight pleaded guilty to wire fraud earlier this year. He faces sentencing Sept. 11.
UPDATED 4:06 P.M. EDT (U.S.A.) It happened after the collapse of AdSurfDaily in 2008 — and it’s happening now in the aftermath of the collapse of Zeek Rewards amid spectacular allegations by the SEC Friday of Ponzi and pyramid fraud.
The office of North Carolina Attorney General Roy Cooper issued a warning minutes ago about “reload scams” aimed at taking advantage of Zeek victims.
Here is the warning in its entirety (italics added):
Reload scams hit consumers when they’re down, offering to help them make back money they lost to a previous scam or bad business decision. These scams have been popular for years with telemarketing fraud rings but can also follow other types of fraud.
We’re now seeing reload scams seeking to recruit consumers who were members of Zeekler, a penny auction website headquartered in North Carolina that shut its doors last week and entered into a settlement with the U.S. Securities and Exchange Commission. The SEC determined that Zeekler was a Ponzi scheme, using money from later investors to pay back earlier investors until the scheme started running out of money. The Attorney General’s Office is continuing to investigate Zeekler.
Blogs, news releases online, and individuals leaving comments in articles about the Zeekler shut down are already touting opportunities “for those that are looking for something that can help them replace the income they were receiving from Zeek Rewards.” If you’ve been a part of a scheme such as Zeekler that collapsed, or if you lost money to another recent scam, don’t fall for a reload scam. Better to cut your losses than lose even more.
The exact phrase quoted by Cooper’s office in the paragraph above appears in a news release for something called TheMayDayReport.
The SEC called Zeek a $600 million Ponzi- and pyramid scheme that had affected more than 1 million investors. Cooper’s office opened a probe into Zeek in July, and the U.S. Secret Service also is investigating Zeek.
Over the weekend, the PP Blog received multiple spams aimed at Zeek threads. Purportedly from “Briant,” those spams promoted a “program” called Ultimate Power Profits. Like Zeek, Ultimate Power Profits has a presence on well-known Ponzi scheme forums such as MoneyMakerGroup.
Zeek’s former head cheerleader at MoneyMakerGroup — “mmgcjm” — also is the head cheerleader for Ultimate Power Profits at the forum.
On Friday — the same day of the Zeek collapse — an MLM “program” known as Vi-Tel Wireless (Vi-Tel) issued a news release to announce it was sponsoring a “Zeek Rescue Program.” Affiliates busied themselves heralding the purported rescue program across the web.
Vi-Tel called itself a “safe refuge.” Vi-Tel affiliates aimed sales pitches at websites carrying information on Zeek, leading to questions about whether reps were circling like vultures. It was remarkably awful PR.
In other post-Zeek news, an auction “program” known as Bidify now is offine. The company says it is trying to retool itself in the aftermath of the Zeek collapse.
Like Zeek prior to the collapse, Bidify denies it is an investment program.
Zeek, Rex Venture Group LLC and operator Paul Burks were charged Friday with selling unregistered securities as investment contracts.
DISCLOSURE: Gregg Evans, a longtime member of the antiscam community, is a longtime PP Blog contributor. He was not compensated for this column, and his views are not necessarily the views of the PP Blog.
Who are these “Experts” anyway?
By Gregg Evans
Troy Dooly is the latest “expert” to look like an utter fool in the wake of the Zeek Rewards collapse. For months the apparently respected MLM guru has been defending Zeek against all logic, common sense or demonstrated knowledge of mathematics.
It turns out that — even though in Troy’s “expert opinion” and based upon his “inside knowledge” that he couldn’t share because he wanted to respect a “non disclosure agreement” — Zeek, Zeekler and Rex Venture Group was just another garden-variety Ponzi scheme.
This one added up to $600 million if you’re keeping score. And you should be. That’s more than half a billion dollars.
A few years ago, I decided to not actively hide my identity, but not advertise it either when 12DailyPro collapsed in a heap of scandal based solely on the figures being tossed around about how much money Charis Johnson had drawn in. It occurred to me at the time that there are people out there who will in fact kill you for that kind of coin, and more than a few of them I knew were involved in the scam. I had never received a death threat before, or at least not one I took seriously.
Here we have again a figure that frankly boggles the mind being funneled into a rather transparent Ponzi scheme by a collection of ref whores, financial illiterates and flat-out criminals posting with glee “I got paid” at all the familiar places these kind of folks hang out. As the late Everett Dirksen once said, “A billion here, a billion there, and soon you’re talking real money.”
And here again we have a list of supposed “experts” whose opinion proved that “this time, it’s legit.” I just have to ask, by what standard are these people experts at anything, beyond herding the suckers to the spend button?
I, modestly, consider myself an expert in matters of investing, accounting and how money and banking work. Not just because I think so, mind you, I have an earned PhD in International Business, a MSci in Economics, an MBA and a BBA in Finance (with a shared major in Mathematics, btw).
But honestly, if you’re taking my word for it advice-wise, you’re still a sucker, because anyone can try to impress you with what they say, you have to at least look at the motivation. My motivation is to perhaps save a few people who don’t have my background from falling for the siren song of the pimps like Ken Russo, Troy Dooly and others.
Longtime HYIP huckster "Ken Russo," also known as "DRdave," helped lead the "I Got Paid" cheers for Zeek on the TalkGold Ponzi forum.
You see, I’m not asking you to spend your hard-earned money on anything. I’m not encouraging you to inform your friends, relatives and co-workers about the latest sure-fire-get-rich-with-passive-income scheme. I’m just asking you to think a bit, and trying to explain how real money and business works. I happen to some pretty spiffy credentials, but it’s more important that I’m just making common sense.
You see, some people with credentials as good as or better than mine are blinded by the easy pickings to be had if they sell out their fancy titles and initials after the name. Gerald Nehra is licensed attorney and all indications I have seen are he’s not a bad lawyer, as lawyers go. Gerry’s problem, and potentially yours, is that he’ll suspend his common sense, legal knowledge and objectivity if the check clears
Hey, I hate to judge the man, and everyone deserves good legal representation, but Mr. Nehra has not impressed me so far. I am only familiar with two companies with which he has been publicly associated with in the last few years: ASD Cash Generator and Zeek. The operator of one is in jail waiting to find out he’s going to serve what is likely going to be a life sentence based upon his age, the other one just got their offices locked up by some combination of the Secret Service, the Securities and Exchange Commission and the North Carolina Attorney General.
Our “expert” lawyer, one of the best reputations in MLM law around, testified that ASD wasn’t a Ponzi, and from the looks of it told Zeek that if you tell the suckers not to call it an investment, it’s Okie Dokie legally speaking. Good advice there.
Do I think Gerald Nehra believes this? Well, as much as any lawyer believes the legal theory he’s pursuing he may, but I doubt he had a lot invested in Zeek, if you get my drift. He had, over the years built a reputation, and whether he deserved it or not (and I think not) when ASD needed to show a Federal Judge that paying old investors with new investors money wasn’t a Ponzi scheme, Nehra was right there, willing to lend his expert opinion in a Federal Court that black was white, up was down and Andy Bowdoin of ASD was a business visionary who could somehow pay 1% a day legally.
If he’s trying to represent a defendant in a court of law, that’s his job and I have no problem with that, but if he believes it, well, a friend I once had used to say it was never a good idea to believe your own bar stories or “smoke your own dope” as he put it.
ASD was a cheap Ponzi scheme and anyone not blinded by greed with had enough sense to tie his own laces could see that. A few “MLM Experts” and the “All Star Team of Stupid” ASD cheerleaders, sovereign citizen nutcases and Arby’s Indians couldn’t, but that’s just the kind of people loose on the streets since they changed the laws about involuntary mental patient commitment. The Indians, Sovereigns and pimps I won’t comment on here, but the lawyers did it mostly because it paid pretty well. And Ken Russo isn’t doing it because he likes people either, for what it’s worth, he just lacks the credentials to sound like much more than a crooked used car salesman. People like Troy Dooly should know better, and I suspect they do, but they have no trouble overlooking their own knowledge as long as the check clears.
URGENT >> BULLETIN >> MOVING: (UPDATED 6:25 P.M. EDT (U.S.A.) The SEC has filed an emergency action in federal court in Charlotte, N.C., that alleges Zeek Rewards is a $600 million Ponzi and pyramid scheme.
“The obligations to investors drastically exceed the company’s cash on hand, which is why we need to step in quickly, salvage whatever funds remain and ensure an orderly and fair payout to investors,” said Stephen Cohen, an associate director in the SEC’s Division of Enforcement. “ZeekRewards misused the power of the Internet and lured investors by making them believe they were getting an opportunity to cash in on the next big thing. In reality, their cash was just going to the earlier investor.”
In its emergency filing, the SEC described Zeek as a classic Ponzi scheme. The agency charged that “approximately 98% of ZeekRewards’ total revenues, and correspondingly the purported share of ‘net profits’ paid to current investors, are comprised of funds received from new investors.”
Records show that the AdSurfDaily Ponzi scheme which, like Zeek, suggested that investors would receive a return on the order of 1 percent a day, also received only about 2 percent of its revenue from sources other than members. Zeek had members in common with ASD.
Zeek, the SEC alleged, “is teetering on collapse.”
Zeek CEO Paul R. Burks has been charged with selling unregistered securities as investment contracts, the SEC said. Burks presided over Rex Venture Group LLC, Zeek’s purported parent company. Rex Venture also has been charged. The SEC said it was aided in the probe by the Quebec Autorite des Marches Financiers and the Ontario Securities Commission.
Burks’ program holds “approximately $225 million in investor funds in approximately 15 foreign and domestic financial institutions, and those funds are at risk of imminent dissipation and depletion,” the SEC charged, noting that the Ponzi potentially could affect more than 1 million people globally.
A federal judge has ordered an emergency asset freeze and a receiver will the appointed, the SEC said.
“Through the ZeekRewards program, Defendants offer affiliates several ways to earn money, two of which involve the offer and sale of securities in the form of investment contracts: the ““Retail Profit Pool” and the “Matrix,” the SEC charged.
And, the agency said, the “compounding” effect has created a condition under which 3 billion Zeek “Profit Points” are outstanding.
“Based on the ZeekRewards current outstanding Profit Point balance, the company would be obligated to pay out approximately $45 million per day if all Qualified Affiliates elected to receive their daily award in cash,” the agency charged.
Amid Zeek claims that it paid out 50 percent of its daily net and that its business model was “proprietary,” investigators discovered that Zeek delivered an unusually consistent return of about 1.5 percent a day.
“In fact, the dividend bears no relation to the company’s net profits,” the SEC charged. “Instead, Burks unilaterally and arbitrarily determines the daily dividend rate so that it averages approximately 1.5% per day, giving investors the false impression that the business is profitable.
Similar allegations were made in 2008 against ASD operator Andy Bowdoin.
Zeek’s fabled Zeekler “bids” were described by the SEC as smoke-and-mirrors. From the complaint (italics added):
Despite encouraging affiliates to purchase and give away VIP Bids to promote and drive traffic to the Zeekler penny auction website, Defendants fail to disclose that almost none of the VIP Bids given away by Qualified investors are actually used on the Zeekler penny auction website. Of approximately 10 billion VIP Bids purchased by or awarded to investors, less than one-quarter of one percent have been actually used in auctions on the Zeekler penny auction website. Thus, the VIP Bids do little or nothing to actually promote the retail business.
Zeek operator Burks, meanwhile, “has withdrawn approximately $11 million while operating Rex Venture and ZeekRewards, of which approximately $4 million remains in his possession, custody or control.
Burks “distributed approximately $1 million of the funds garnered from ZeekRewards to family members,” the SEC said.
Amid high drama and confusing website reports from Zeek yesterday, including the virtual abandonment of its office in Lexington, N.C., and petition drives by Zeek affiliates to demand the return of Zeek, it turns out that “Burks has agreed to settle the SEC’s charges against him without admitting or denying the allegations, and agreed to cooperate with a court-appointed receiver,” the SEC said.
The U.S. Secret Service also is investigating Zeek, as is the office of North Carolina Attorney General Roy Cooper.
URGENT >> BULLETIN >> MOVING: Zeek Rewards, the multilevel marketing program married to the penny-auction site Zeekler, is under investigation by the U.S. Secret Service and the Securities and Exchange Commission, the Secret Service confirmed at 4:14 p.m. EDT today.
“There will be no further comment,” said Max Milien, a spokesman for the U.S. Secret Service in Washington.
The Secret Service leads a multiagency electronic crimes Task Force in Charlotte, N.C. The Charlotte Task Force is known by the acronym CMECTF.
Zeek, part of Rex Venture Group LLC, is based in Lexington, N.C. Paul R. Burks is Zeek’s chief executive officer.
The Zeek probe is not the first investigation of its sort in which the Secret Service and the SEC looked into the business practices of online schemes that suggest or promise outsize investment returns. A probe of the Legisi HYIP began in 2007 with an undercover investigation by the Secret Service and state securities regulators in Michigan.
That probe later led to civil charges brought by the SEC and criminal charges brought by the Secret Service.
Legisi operator Gregory McKnight pleaded guilty to wire fraud earlier this year. He is scheduled to be sentenced next month. Legisi gathered more than $72 million.
The Secret Service also led the AdSurfDaily Ponzi probe. ASD President Andy Bowdoin is scheduled to be sentenced Aug. 29.
ASD was a 1-percent-a-day Ponzi scheme that gathered at least $110 million. Zeek Rewards has a similar business model.
UPDATED 10:58 A.M. EDT (U.S.A.) Two new details have emerged in the mysterious shutdown yesterday of the office and websites of Zeekler/Zeek Rewards: The office of North Carolina Attorney General Roy Cooper told the PP Blog this morning that it has taken no action to shut down Zeek, the operator of an MLM and a penny-auction site.
“We have not taken action to shut the company down and are currently working to get more information so we can pass that along to consumers who may be impacted by this,” said Noelle Talley, a spokeswoman for Cooper.
But Cooper’s office did say that it had issued a Civil Investigative Demand (CID) to Zeek on July 6. That’s weeks earlier than initially believed and leads to questions about whether Zeek had known for five weeks that it had been under investigation and did not inform participants.
Without providing details, Zeek announced on its Blog yesterday that it had canceled its Aug. 22 “Red Carpet” event. By early evening, the Zeek Rewards and Zeekler sites began to publish this message: “Zeek Rewards is currently unavailable. More information will be available shortly on this website.”
Earlier in the week, Zeek announced that “there won’t be any training, recruitment or leadership calls for the next few days while planning is going on.”
With Zeek leaving affiliates in an information vacuum, many of them took to the Web. At least two petition drives appear to be under way demanding the government to reopen Zeek. As of the time of this post, the PP Blog has been unable to confirm that an action by any government agency — state or federal — was responsible for Zeek’s sudden absence.
The Blog still is in the process of trying to piece together events in what has emerged as a bizarre and fluid situation. Sensing Zeek affiliates were vulnerable, some MLM opportunists raced to various sites such as The Dispatch newspaper in North Carolina and YouTube with offers to join their “programs.”
Zeek fans on the MoneyMakerGroup Ponzi forum almost immediately blamed critics for Zeek’s problems, with one poster declaring he’d already mined his profits from Zeek and was confident they could not be attached by prosecutors in the United States.
The Better Business Bureau said this morning that it was aware of reports that the doors at Zeek’s office in Lexington, N.C., were closed. The BBB added that it would publish more information as it became available.
Zeek is a purported arm of Rex Venture Group LLC, led by Paul R. Burks.
With a headline of “Red Carpet Wednesday – URGENT,” the Zeek Blog is reporting that a Red Carpet event scheduled Aug. 22 has been canceled.
Zeek, the operator of the Zeek Rewards MLM “program” and the Zeekler penny auction, provided no explanation for calling off the event. Zeek is a purported arm of Rex Venture Group LLC.
The office of North Carolina Attorney General Roy Cooper said last week that it had opened an “examination” into Zeek’s business practices.
Earlier this week, some members of the AdSurfDaily Ponzi scheme announced a plan to “flood” a federal judge with letters of support for former ASD President Andy Bowdoin, who pleaded guilty to wire fraud in May in the ASD Ponzi case. An email circulating among ASD members that called for the judge to be flooded included two ads for Zeek.
Some Zeek promoters also are known to have promoted ASD, a 1-percent-a-day Ponzi scheme. Two Zeek promoters — Todd Disner and Dwight Owen Schweitzer — sued the United States in November 2011. As part of the lawsuit, Disner and Schweitzer presented a federal judge an opinion from Laggos that ASD was not a Ponzi scheme.
Like ASD, Zeek plants the seed that a return of 1 percent or more per day is possible. And like ASD, Zeek denies it is offering an investment program.
The Dispatch newspaper of Lexington, N.C., published a story today that included a July 31 photograph of Zeek prospects waiting in line, apparently to get a chance to turn over money to the company.
At least one apparent Zeek supporter left a comment that the newspaper’s website that asserted that The Dispatch had printed untrue things about the company and that the reporter who wrote the story had not gone through Zeek “compliance training.”
Some Zeek supporters appear to hold the curious belief that reporters are required not to use the word “investment” when describing the Zeek “program.”
Zeek advises its members not to use the language of investments when describing the “program.” ASD did the same thing.
The U.S. Secret Service raided ASD in 2008, alleging that ASD has a massive Ponzi scheme that sought to avoid the use of the language of investments to keep its 1-percent-a-day program under the government radar.
Bowdoin later was indicted on charges of securities fraud, selling unregistered securities as investment contracts and wire fraud. The 77-year-old ASD patriarch pleaded guilty to wire fraud and faces up to 78 months in federal prison.
Federal prosecutors have asked that Bowdoin be sentenced to the maximum term despite his age, alleging he started a new 1-percent-a-day fraud just two months after the August 2008 Secret Service raid.
We regret to inform you that Red Carpet Wednesday, scheduled for Wednesday, August 22, 2012 has been cancelled. Please continue to monitor our websites for more information to be forthcoming.
The purported operator of a “program” that claims to provide a return of 60 percent a month cannot meet with participants because of “security reasons,” according to a recording of the Aug. 9 conference call for JSS Tripler/JustBeenPaid.
JSS/JBP’s Frederick Mann hinted to conference-call listeners that he could be arrested if he appeared at a prospective cheerleading session for JSS/JBP at a California hotel.
“The [government] people in power — they regard citizens as livestock,” Mann said, in declining an invitation to speak to the JSS/JBP troops in person. “They farm the livestock. They want the eggs that the chicken[s] produce. And if they think somebody tries to interfere with their farming operation, they don’t like that.”
Mann is a former pitchman for the AdSurfDaily Ponzi scheme. A “Frederick Mann” also is listed as an affiliate of the Zeek Rewards’ 1-percent-a-day scheme, but it is unclear if it is the same Frederick Mann who pitched ASD’s 1-percent-a-day scheme before the U.S. Secret Service raided ASD in 2008.
What is clear is that some Zeek affiliates also are promoting JSS/JBP, which has acknowledged it has no registrations to sell securities and does not reveal it base of operations.
Like JSS/JBP and ASD, Zeek has a presence on known Ponzi scheme forums.
JSS/JBP may have ties to the so-called “sovereign citizens” movement.
“Well we have been dealt a setback today…the judge here agreed with the government to transfer us to the District Court in Washington DC… The same judge who railroaded Andy. I will make a motion for her to recuse herself and if she will not (and she will not) I will take an appeal.” — Remark attributed to Dwight Owen Schweitzer that is contained within email by former AdSurfDaily spokeswoman Sara Mattoon that discusses plan to “flood” a federal judge with letters of support for jailed ASD Ponzi schemer Andy Bowdoin, Aug. 13, 2012
Thomas A. "Andy" Bowdoin
Former AdSurfDaily member Dwight Owen Schweitzer — later to join former ASD colleague Todd Disner as a pitchman for the Zeek Rewards 1-percent-a-day-plus MLM scheme — is quoted in an email circulating among ASD members that ASD President Andy Bowdoin was “railroaded” by a federal judge.
The quotation attributed to Schweitzer was contained within an Aug. 13 email forwarded by Disner after being assembled by former ASD spokeswoman Sara Mattoon. Mattoon has a history of packaging communications friendly to ASD, adding her purported insights to the communications and emailing them to members. The Aug. 13 email calls for ASD members to “flood” a federal judge with letters of support for Bowdoin. The ASD patriarch and veteran securities swindler is scheduled to be sentenced Aug. 29 in the District of Columbia by U.S. District Judge Rosemary Collyer.
Previous Mattoon emails have quoted Kenneth Wayne Leaming, a purported “sovereign citizen” now jailed near Seattle after a 2011 investigation by an FBI Terrorism Task Force. Leaming was accused of filing false liens against at least five public officials involved in the ASD Ponzi case, harboring two fugitives wanted in a separate home-business scheme, being a felon in possession of firearms and uttering a bogus “Bonded Promissory Note” for $1 million.
Leaming, who is not an attorney, was said to be performing legal work on behalf of some ASD members.
In May 2012, Bowdoin pleaded guilty to wire fraud in the ASD Ponzi case and acknowledged that ASD was a Ponzi scheme and that his company never operated lawfully from the inception of its 1-percent-a-day (or more) “program” in 2006. Bowdoin, 77, originally remained free on bond after his guilty plea, pending formal sentencing.
But Bowdoin was jailed in June 2012, after prosecutors presented evidence that Bowdoin continued to promote scams after the U.S. Secret Service seized more than $80 million in ASD-related proceeds in 2008 and after Bowdoin was arrested on ASD-related Ponzi charges in 2010. Prosecutors identified those scams as “OneX,” and AdViewGlobal (AVG).
Like ASD, AVG was a 1-percent-a-day “program.” AVG, which launched in February 2009 after the seizure of ASD-related bank accounts in 2008, vanished mysteriously in the summer of 2009 after issuing threats to members and journalists. AVG was referenced in a lawsuit filed by ASD members who accused Bowdoin of racketeering.
Contained within the forwarded email dated Aug. 13 are at least two ads for the Zeek Rewards’ MLM which, like ASD, plants the seed that a return that corresponds to an annualized return in the hundreds of percent is possible. Precisely why the Zeek ads appeared in the email is unclear. They are attributed to a Zeek affiliate known as “Compassion Ministries” and display Zeek videos produced by USHBB Inc., a company that once produced ads for the Narc That Car pyramid scheme that collapsed in 2010 after the Better Business Bureau raised concerns about Narc and investigative reporters began to write about Narc and produce television reports about the “program.”
Even as the Mattoon email solicited support for Bowdoin as his Aug. 29 sentencing date approaches, it cautions ASD members to “be careful” if they write to Bowdoin in jail because “they read his mail.”
Disner and Schweitzer sued the U.S. government in November 2011, claiming the seizure of ASD’s database was unconstitutional. The lawsuit originally was filed in the Southern District of Florida, but a judge there granted a request by the government to transfer the case to the District of Columbia. The case now appears on the docket in U.S. District Court for the District of Columbia and has been assigned to Collyer.
The Aug. 13 email from Mattoon quotes Schweitzer as saying, “Well we have been dealt a setback today…the judge here agreed with the government to transfer us to the District Court in Washington DC… The same judge who railroaded Andy. I will make a motion for her to recuse herself and if she will not (and she will not) I will take an appeal.”
When suing the United States in November 2011, Disner and Schweitzer relied in part on a purported expert opinion from Keith Laggos that ASD was not a Ponzi scheme. Like Disner and Schweitzer, Laggos also has been linked to the Zeek Rewards’ scheme.
Laggos reportedly was fired as a Zeek “consultant” last month. Details surrounding the reported firing remain unclear.
Zeek is now the subject of an “examination” by North Carolina Attorney General Roy Cooper.
Zeek’s news Blog published this baffling message yesterday (italics added):
Hello Fine People:
The team wanted to let you know there won’t be any training, recruitment or leadership calls for the next few days while planning is going on. Standby for some important announcements. Thank you for your patience!
The lawsuit against the U.S. government filed by AdSurfDaily figures Todd Disner and Dwight Owen Schweitzer now appears on the court docket in the District of Columbia, meaning the case formally has been transferred from U.S. District Court for the Southern District of Florida.
U.S. District Judge Rosemary Collyer has been assigned the case, which was ordered transferred July 23 by U.S. District Judge Cecilia M. Altonaga of the Southern District of Florida. It will be at least the fifth ASD-related case Collyer has overseen. The judge has presided over at least three forfeiture cases, a racketeering lawsuit filed by some ASD members against ASD President Andy Bowdoin — and the criminal case against Bowdoin.
Disner and Schweitzer — who went on to become affiliates of the Zeek Rewards MLM “program” that now is the subject of an examination by the office of North Carolina Attorney General Roy Cooper — sued the United States in November 2011. The ASD duo alleged their Constitutional rights were violated when the government seized ASD’s database in 2008. The pair also alleged that undercover agents who joined ASD had a duty to inform ASD management and that the government had gone shopping for a friendly forum in the District of Columbia when bringing the civil forfeiture case against tens of millions of dollars in the personal bank accounts of Bowdoin.
Meanwhile, Disner and Schweitzer — relying in part on a purported expert opinion by purported MLM expert Keith Laggos that ASD was not a Ponzi scheme — accused the government of presenting a “tissue of lies” when bringing the ASD Ponzi case. Disner and Schweitzer contended that ASD was not a Ponzi scheme and had been conducting business lawfully before the federal seizure.
Only months after Disner and Schweitzer presented the Laggos’ opinion to Judge Altonaga in Florida, Bowdoin pleaded guilty in the District of Columbia before Collyer to a Ponzi-related charge of wire fraud.
In a statement of offense, Bowdoin acknowledged ASD was a Ponzi scheme and had never operated lawfully from its 2006 inception.
Laggos was hired as a “consultant” by Zeek, but the firm appears to have dumped him last month. Details surrounding Laggos’ departure from Zeek remain unclear.
Litigation surrounding the ASD case has been marked by bizarre events. ASD is known to have ties to the so-called “sovereign citizens” movement. ASD figure Curtis Richmond, a purported “sovereign” being, once accused Collyer of “TREASON.” Meanwhile, ASD figure Kenneth Wayne Leaming is jailed near Seattle on charges of filing bogus liens against at least five public officials involved in the ASD case, including a federal judge, three federal prosecutors and the lead U.S. Secret Service agent on the ASD case.
Leaming also is accused of being a felon in possession of firearms, harboring two federal fugitives from Arkansas involved in a massive mail-fraud scam centered around a home-based business and uttering a false “Bonded Promissory” note. Leaming now is seeking to sue President Obama and U.S. Attorney General Eric Holder. Earlier, Leaming and ASD figure Christian Oesch sought unsuccessfully to sue the United States, apparently for the staggering sum of more than $29 trillion.
“The complaints generally seek refunds and say the company has not lived up to its promises.” — Office of North Carolina Attorney General Roy Cooper, Aug. 7, 2012
BULLETIN: The Zeek “program” that marries an MLM scheme (Zeek Rewards) to a penny-auction site (Zeekler) is the subject of a state examination by the office of Attorney General Roy Cooper, the agency said this morning.
Cooper’s office did not provide specifics on what the examination would entail, but Zeek has been asked to provide “documents,” said Noelle Talley, a spokeswoman for Cooper.
“I can tell you that we continue to have concerns about Zeek Rewards and have asked the company to provide us with documents so we can examine its business practices,” Talley said.
Cooper’s office first expressed those concerns publicly in June, after Zeek’s Blog linked to a television station’s report that suggested Zeek had been deemed legal. No such determination had been made, Cooper’s office said at the time.
Meanwhile, Talley said Cooper’s office had set up “a recorded message about Zeek Rewards.”
Such recordings typically are made “when we get a high volume of calls about a particular issue or company,” Talley said.
News about the Zeek examination occurred against the backdrop of a Saturday (Aug. 4) Blog post by Zeek that blasted unspecified “North Carolina Credit Unions” for expressing concerns about the company to Zeek customers. Zeek is a a purported arm of Rex Venture Group LLC. Paul R. Burks is the chief executive officer of Zeek.
Talley declined to comment when asked about whether Cooper’s office was aware of Saturday’s post on the Zeek Blog, which accused the credit unions of slander and implied Zeek would penalize members who questioned the company in public.
But Talley did note that Cooper’s office had received complaints about Zeek and that “[t]he complaints generally seek refunds and say the company has not lived up to its promises.”
Zeek plants the seed that participants can receive a daily return of between 1 percent and 2 percent, but denies it is offering an investment program. The company also denies it is operating a “pyramid scheme.”
“Programs” such as AdSurfDaily have made similar claims and have had a similar payout scheme. ASD was accused in 2008 by the U.S. Secret Service of operating a massive online Ponzi scheme that had gathered $110 million and operated across national borders. ASD President Andy Bowdoin pleaded guilty to wire fraud in May 2012. Zeek is known to have promoters in common with ASD, a company that became engulfed in both civil and criminal litigation.
In 2009, Bowdoin was sued by some of his own members under the federal racketeering statute. That lawsuit was placed on hold because of all the other litigation piling up around ASD, which was named in at least three federal forfeiture actions and was the subject of a federal grand-jury investigation in the District of Columbia that led to the indictment of Bowdoin on charges of wire fraud, securities fraud and selling unregistered securities.
Like ASD, Zeek has a presence on forums referenced in federal court filings as places from which Ponzi schemes are promoted. Some Zeek members are promoting JSSTripler/JustBeenPaid, a “program” that claims it provides a return of 60 percent a month and may have ties to the “sovereign citizens” movement.
Consumers can access the state’s recorded message about Zeek by calling 919-716-6046.
Talley provided this transcript of the recording (italics added):
Thank you for calling the North Carolina Attorney General’s Consumer Protection Division about Zeek Rewards. We cannot tell you whether or not to invest or participate in Zeek Rewards or any other company.
If you would like to file a complaint with our office, you can either leave a message with your name and address after the beep and we will mail you a complaint form, or you can visit our website at www.ncdoj.gov for an online complaint form.
Specific questions about how Zeek Rewards works should be directed to the company itself. Again, the Attorney General’s Office cannot give you investment or legal advice, and we do not endorse any program or business. However, we always encourage people to do their own research before investing in any business. Many people have asked if we have received complaints about Zeek Rewards, and we can confirm that we have received several complaints. Thank you again for contacting our office.
Zeek has gone viral and is being pitched by some promoters of JSS Tripler/JustBeenPaid, an "opportunity" that purports to provide a return of 60 percent a month.
UPDATED 4:06 P.M. EDT (U.S.A.) It happened after the collapse of AdSurfDaily in 2008 — and it’s happening now in the aftermath of the collapse of Zeek Rewards amid spectacular allegations by the SEC Friday of Ponzi and pyramid fraud.
Troy Dooly is the latest “expert” to look like an utter fool in the wake of the Zeek Rewards collapse. For months the apparently respected MLM guru has been defending Zeek against all logic, common sense or demonstrated knowledge of mathematics.
URGENT >> BULLETIN >> MOVING: (UPDATED 6:25 P.M. EDT (U.S.A.) The SEC has filed an emergency action in federal court in Charlotte, N.C., that alleges Zeek Rewards is a $600 million Ponzi and pyramid scheme.
