Panel re. Zeek

There. Welcome to the hangout where we're going to talk about Zeek Rewards and the liquidation process that's happening right now. We've assembled a really good panel of people, people with diverse professional experiences. We're trying to cover both sides of the equation. We're covering the perspective of the net winners, people that made more money than what they put in. I know there's a lot of questions out there. I know a lot of people were recently served subpoenas. We're also covering the angle from the people that actually lost money, where they spent more money than what they were able to take out of the system. We're going to try to explain what the claims process looks like and what those people can expect going forward. So here we're just having a discussion. And before we dive into it, I kind of want to take a few minutes for our panel here. And just a disclaimer. It's sort of new technology, so we're going to have some technical glitches. Be patient. Right now, Len Clements is working on his audio. And Jordan Maglich over at Ponzi Tracker, he's an early adopter, apparently, and he has himself an iPad mini and Google does not work on the iPad mini. So who knew? So, that being said, I'm Kevin Thompson, the MLM attorney. You can read about myself and what I do over@themlmatorney.com I specialize in working with startup network marketing companies, young and old, big or small, it doesn't matter. I love the space. I love working with the people in the space. I like the unique products and it's fun for me. It's unfortunate that arguably one of the largest pyramid Ponzi schemes in history happened under the umbrella of the network marketing arena. So that's unfortunate. We're dealing with it, but that's my expertise. With that being said, we'll go down the line here. And Philip Young, why don't you tell folks sort of what you do?

Sure. I'm Philip Young. I'm an attorney with Garfinkel, McLemore and Young in Nashville, Tennessee. I really specialize in bankruptcy and receivership work. A lot of my work is serving as receiver or serving as counsel for receivers or counsel for the trustees, which is really why I got involved in this, because of my experience in those arenas. I'm really on here mostly, again, not to give legal advice. And I'll do that disclaimer that I'm not creating an attorney client privilege with anyone, nor am I giving legal advice. I'm really just Going to share my opinions on what's going on here, especially as it relates to net winners, as I've been engaged by a number of net winners to represent them with regard to receivership.

Great. Thanks for the introduction, Troy. We lost Walt briefly. Why don't you go ahead and tell a little bit about yourself? Everybody knows Troy Dooley, but go ahead and say a little bit of stuff about yourself.

Oh, my gosh. You know, I think I've covered this story deeper than anybody else in network marketing. We started back in December 2011. We carried it forward. Sometimes. We were true advocates wanting to see Zeke make it. You always go for the underdog, whether it's sports or in business. We saw that. But a lot of times people would mistake that as trying to cover up and give too much credit, and that wasn't the goal. That's why we've continued to cover this story, even though it didn't turn out the way I thought it should. I'm still confused with the Ponzi side. I will never debate the pyramid side. We knew that, but we were concerned because I don't understand Ponzi stuff. So we've continued to cover that. We want to get the right information out, and the more evidence that has come out has caused me concerns. I love the people that I met at Zeek from the corporate offices down, but in law. And the one thing that I've learned, because I'm not an attorney, but I surround myself obviously with them, is that I've learned that the letter of the law is a letter of the law. It doesn't matter if I think it makes sense or not. At the end of the day, that's what regulators go with is what is the law. And sadly, Zeke is gone. It's not coming back. And I'm glad, Kevin, you put this hang out together with these guys, because I think it truly will help us all understand more before the night's out.

Yeah, we should get a lot of good information out of it. And for you folks at home, we're not implying that the people that started or ran Zeke are bad people. I've never met them. Maybe they thought that this was a legitimate way to run a penny auction program, and it just didn't work out. The bottom line, though, is that Zeek Rewards is in receivership and that money will be distributed to the victims, the people that lost money. So what we're here today to discuss is what that process looks like. What kind of power does the receiver have if you've been served a subpoena should you respond to it? Those are the issues. And so we're not here to debate whether or not Paul Berks was a bad guy or the folks at Zeke were bad people. Real quick, before we go further, Lynn, is your audio working? We don't have Lynn right now. Okay, so let's go ahead and get started. First of all, I'm with Thompson Burton and my partner Walt here didn't get a chance to introduce himself. Walt, why don't you go ahead and introduce yourself Real quick.

Yeah, Walt Burton here. I'm not sure how much I'll have to offer today. I'm certainly not an expert on Ponzi schemes or, or direct sales. I'm defer to Kevin and Jordan and Philip on those issues. But to the extent I can offer anything on what's going to happen if the receiver proceeds to get a judgment and starts pursuing assets and recording those judgments and exercising on the lien, I think that's where I'll be able to add some value here as a commercial real estate lawyer.

Good deal. Okay, let's get started. So first of all, Thomson Burton is not affiliated with Jordan Maglich's law firm. The same is true with Phillips Young. Phillips Young's law firm were all separate entities, separate firms. We're not sharing fees. So far, Thompson Burton has taken zero clients in this matter. And I understand Philip Young has accepted a few clients from the people that have recently been served subpoenas. Real quick, we're not trying to. This does not form an attorney client relationship. Obviously we're sharing this publicly. So there's no attorney client privilege with what we're saying. But what we're doing is we're just putting our heads together to provide you with information to answer some of the common questions. But it should not be construed as legal advice per se. So real quick, before we get into the net losers versus net winners, one of the things that one of the hurdles that you have to get over is the fact that Zeke is not coming back. I know there's a sect of people out there that are arguing or fighting really hard to say, look, Zeke was not a bad program. It's coming back. Therefore the fraudulent transfers were not fraudulent. Therefore you don't have to pay it back. That's sort of the argument. Essentially there was three arguments with the downfall of Zeke. Number one, there was the pyramid issue. And with pyramid scheme, the issue is the main issue. And Lincoln talk about this and so can Troy is why are people buying the product? If people are buying product for the true value, then that's indicative of a legitimate program. In this case with zeek, you had 10 billion bids sold. 0.25% of those bids were actually used. And so it's pretty clear that the bid was really a subterfuge product. The main thing was the compensation plan. Now, pyramid scheme analysis is a little bit more complicated than that, but I think that's a no brainer in this matter. Then there's the issue of a security. What makes a security? Of course, Zeke went to great lengths to say that they were not a security, but every single unregistered security out there, they'll say that. But a security is essentially an investment contract with the expectation of receiving passive returns. So if my earning potential increases by spending more money, that could be construed as a security. In Zeke's case, I could spend $10,000 in the early days, as much as $25,000, I think maybe even more. Bought a whole lot of bids. And if the company did well, I got a piece of the profits. The more money I spent, the bigger share of the profits I got. Now here's the thing, though, that separates legitimate network marketing from unregistered security. In the legitimate network marketing program, if I'm an Amway and I sell 10 boxes of soap, my pay is pretty well set. If Amway does poorly that month, my pay is still consistent in this. When it comes to profit sharing, I can't really influence the payout up or down, which means it's really the returns are dependent on the work and efforts of other people. So I think the security issue is a no brainer in the Zeke case. Now there's this third issue which we just have. Jordan just joined us. Who is the Ponzi expert. The issue is whether or not Zeek was a Ponzi scheme. And I understand that's debatable. In my opinion, the first two issues are so clear cut. Pyramid security. The court has authority to or the SEC had proper authority to shut the program down. We can argue over whether or not it was a Ponzi scheme. You know, you're never really going to know unless you look in the specific numbers. So with all that being said, Zeek is down. It's not likely to come back. Actually, I'm 99.99% sure Zeek rewards is not coming back. And so what happens going forward? So, Jordan, why don't you go ahead and introduce yourself real quick. 30 second elevator pitch, and then we'll start fielding some questions.

Thanks, Kevin. My name is Jordan Maglich. I'm an attorney with Weingar King in Tampa. As Kevin alluded to, I also run Ponzi Tracker, which tracks the proliferation of Ponzi schemes around the US Internationally. And I also write for Forbes in a column called White Collar Corner.

So it's pretty clear that you've got a lot of experience tracking Ponzi schemes. You actually.

Yeah, I guess I should add in there that I also serve as counsel to the receiver in a $400 million Ponzi scheme in Florida.

Now, counsel to the receiver. Can you explain what that really means?

Well, similar to Zeke with Kenneth Bell was appointed as the receiver, he now has a team of attorneys who write on his behalf. Essentially, he is their client. They draft all motions to the court. Obviously, there are papers that the receiver must make, such as interim reports. He may file declarations and such in support of some of these motions. But his attorneys are basically his voice to the court. So we act as our receiver's voice to the court.

Okay. All right, let's start. Let's start with the net winners. Now, Philip, a lot of people are asking, hey, I've been served with a subpoena. Should I throw it away? And if I disregard it, what's going to happen? Can you address that question?

Sure.

Yeah.

I think there's been a lot of confusion about this, and the first thing I would say is, it's never a good idea to throw away a subpoena. It's treated like a court order. You need to respond to it. The questions that I fielded from various people, and I've talked to, I don't know, maybe 40 or 50 net winners. And the common questions are, can they serve me a subpoena without it being signed by a judge? The answer to that is yes. Any lawyer that's licensed in that district can serve a subpoena. There was a question about whether the Hundred Mile Rule. Some people may be familiar with the 100 mile rule, whether the 100 mile rule applies here. That only applies if they're calling you to give a deposition. In this case, they're asking for. For documents. There's no doubt that this subpoena requested documents that are. I mean, it was a very, very broad, probably overreaching subpoena as far as what it asks for. That being said, I would never run into someone to throw away a subpoena. My advice to people has been to be very proactive. The fact of the matter is, even if you were successful in having the subpoena quashed, that is having A successful objection to the subpoena. The question that I was led to in thinking about this is, so then what? The answer, like Jordan, I represent frequently receivers and bankruptcy trustees. And the answer that I kept coming back to as far as then what is, I would, putting myself in the shoes of the receiver, I would then just initiate lawsuits against people, whether or not they responded to the subpoena. I would just file lawsuits, ask the same questions through formal discovery after I filed a lawsuit. So that's where I really got to.

Can we start with the. Let's go back to the basics here, because a lot of the folks that are watching this, maybe they're not familiar with the process as we are. And when you reference lawsuit, does the receiver have the power to file lawsuits? And if so, why? Why would the receiver file a lawsuit against participants in Zeke? Let's explain the whole clawback deal.

Sure. And in his letter, for those of you who receive subpoenas, the receiver references clawbacks. What that really means are fraudulent transfers. And the way this works, if the receiver is successful in proving that this was a Ponzi scheme or a pyramid scheme or any kind of illegal scheme, if the receiver can successfully prove that, then every dollar, essentially, the post Madoff law says that every dollar transferred after that basically is a fraudulent transfer. Fraudulent transfer law does not depend upon, does not focus on what the recipient of that transfer knew or should have known. It doesn't matter. What it depends upon is whether or not the money that in this case came into Zeek was legitimate money or illegitimate money. If the receiver can show that it was illegitimate money, then all of that is going to be recoverable in a fraudulent transfer lawsuit.

Okay, so if the receiver can demonstrate that Zeke was a fraudulent program, then all the money that people gain from the scheme has to be turned over. Now, my understanding is that Zeek already surrendered itself to the receiver, so they're not contesting the allegations made in the lawsuit. Is that right?

Yeah, that's my understanding. And that's one of the real challenges here. How are you going to prove if individual recipient, if individual net winner wants to prove that this is a legitimate business, how does he or she do that when the people at the top have gone into the night, they have not contested it? I think that's one of the real challenges in this case for someone who wants to challenge the thought that this is a legitimate business.

Real quick. And that's a good summary. Len Clements, are you there?

Yeah, can you hear me?

Perfect way to figure it out. That's Great.

I didn't figure it out. I just did the same thing that I did 15 times before. 16th time was the charm.

You're not having Good luck with tech this week.

Ok, welcome to the world of a Mac versus everything that's not Mac.

Okay. Hey, why don't you take 30 seconds, give a brief introduction about yourself and then we'll bring you in the discussion.

Well, my name is Len Clements. I founded market wave about 22 years ago that's acted as sort of a consumer advocacy or watchdog type organization. I've done a lot of commentary and so forth, have a radio show and a book and everything called Inside Network Marketing and followed the Zeek Rewards situation pretty closely and produced a very lengthy 35 page report that I completed one day too late, but worked on that for about three months and that's been published and is out there. And so I'm pretty knowledgeable kind of with what was going on internally there with them.

Now you also serve as an expert witness and you're one of the best in the business. You were one of the first people that had a discussion with me where you sensed some problems with Zeke and you teed up an interview with Paul Berks and one of Zeke's lawyers, Kevin Grimes. Kevin's a competitor of mine, he's a good lawyer. And that interview obviously never happened because it was right towards the end. What was it about their program that triggered your suspicion?

Well, the first thing of course was the way it was being promoted as sort of more like a security. They were using a lot of the, you know, originally they were using a lot of the terms like compounding and reinvesting and things like that, which were never completely cleaned up even at the end. But the main two points that I had with them more related to pyramid scheme issues. This is obviously way before the SEC took any action. I still to this day I'm not convinced they're a Ponzi scheme. And there is a difference between the two. But on the pyramid angle, just real briefly because obviously it's going to be pretty complex. There are two completely different aspects of their program that either one of them individually could have made them a Ponzi or a pyramid scheme rather, one is, and I think you probably touched on this a little bit already, but the FTC and various state regulators, they don't really care what percentage of your products are purchased by distributors. There is no 50% rule, 70% rule, nothing like that. They care about motive. The FTC specifically said this. Are you buying the product because you actually want it and you would have bought it anyway even if there were no income opportunity. Or are you buying it just as an act to participate in the income opportunity? Clearly. Way before the SEC said 98% of the affiliate bid purchases weren't being used for bidding, we already knew that the vast majority were not being used for bidding. In fact, corporate members of Zeek had even specifically stated that they're not allowed to use them for bidding. So they were only being purchased to give away a sample bids, which makes them a sales aid which only distributors would purchase. The entire one.

Oh, I froze Lynn. I opened my mouth and he's frozen. Is he frozen for you guys?

Yeah.

My goodness. We just melted down Google.

Well, I think that's Lynn. Lynn melted down Google. That boy is about as techless as they come.

He's very.

This was commissionable in their three by at one time.

You're back. I can hear you now. You cut out for about 10 seconds.

Yeah, for about 10 seconds. I couldn't hear you. So there's. But they have the three tiered system. It's 10, 50 and $99 a month. And the commissions on that went into this three by five matrix. And what you got for the 10, 50 and 99 were entirely a package of distributor centric material. There weren't even bids in those packages. Everything in there was something only a distributor would purchase back. Office material, lead generation things, training, things like that. So literally 100% of these purchases were being made by participants in the income opportunity. They had no value outside of the income opportunity. So in a separate, completely separate way, they were a pyramid scheme. So although it may be debatable if they're a Ponzi, and some can even still argue that they're not an unregistered security, I would argue they are. But as far as the pyramid aspect, the sec, all they got to do is be right in one out of three for it to be a righteous kill. And in this case, there's no question on the pyramid side that they were absolutely operating as such right up to the very end.

And the same is probably true with the security issue. Let me bring Jordan in on this discussion. And Jordan, so your counsel for a receiver currently in a $400 million deal that's in receivership. Can you talk about the economics of clawback litigation? Let's suppose somebody, and I understand these are opinions. You're not giving legal advice. None of us are. At what point is it not cost effective for a receiver to pursue one of the net winners.

That's a good question. At the end of the day, the possibility of your future recovery weighed against one what it could theoretically cost you to bring that litigation to fruition. And by fruition, I mean getting a judgment, executing on that judgment, collecting assets. The unfortunate part about that is the receiver really doesn't have much of a choice. Obviously, he has to certify that there's a net economic benefit, but he's given little to none discretion by the court. You could sue someone getting kicked out of their home, and you hear all the extenuating circumstances, and ultimately that's up to the court, not to the receiver. So the receiver's job is to identify as many assets as he can for victims, try to recover them, and the court will give him further guidance or stop him or tell him, go ahead, Phil.

You've served as a receiver in certain cases, and you've actually initiated some callback actions against people. You've told me before that you have a number in your head as far as what, you know, what the net winner needs to have. What number, in your opinion, is it?

Well, this is my opinion having, and in one case, I filed 1250 lawsuits.

1250?

Yeah. That's about the scale we're talking about with regard to these subpoenas. Right. And in that case, my bottom was $10,000. Anyone who received more than $10,000 was going to get a lawsuit. The simple reason was because whether I had to file 1100 or 1200 didn't really make much of a difference to me because the work was really the same for 1100 or 1200. There's a law of diminishing cost. The more you get these. Putting myself into Kenneth Bell's position, as long as I'm going to file a large number of lawsuits, something over 100, it becomes easier and easier to file one more over that or 100 more over that. So in these cases, when I'm talking to people that received 50,000 and up, I just don't think I agree with what Jordan said. I don't think that the receiver has much choice, this case, but to pursue those. And the letter that he sent out with the subpoena basically alludes to that.

Okay, let me. Troy, do you have any thoughts right now as far as anything you'd like to cover? I feel like we're kind of heavy on the legal side right now.

You said something early on, and I want to. I want to bring this out, and then I'm going to cover something. I think that Lynn said you mentioned the fact that 10,000 bids were sold.

10 billion.

10 million or billion billion with a B. 10 billion bids were sold. Only 2.5 billion were used. That 10 billion bids. And this is something everybody needs to realize. Those were bids to be given away. There's no way. Well, there probably is. I just don't think the receiver is going to try to figure out how many of these bids were given away. But what I want people to understand is in the pyramid side, a lot of times we hear internal consumption, everybody's buying something. In this case, they really were. They were buying bids, but even the affiliates were not using the bids. There was nobody bidding in the auctions. And although that looks from the outside, I know from attorney side, you guys look at that and say, well, nobody's over there. But we still don't know what effect that the not being able to use credit cards, how it affected those auctions. Anybody that would have gone over there used their free bids if they wanted to buy bids, they didn't just get to put in PayPal or put in their credit cards. They would have had to go through that cockamamie process of setting up an E wallet. So, you know, whether or not some of that was purposely done, let's get rid of credit cards. We'll slow down. You know, the international. I don't know all that, but I do know that affected some of this at the height of Zeek Rewards, which was in June and July, and Lynn said something, and I'm pulling up an archive about all the memberships did not come with anything that was being able to be used out there. And that's not right. Every membership, the paid membership level came with bids to be given away at the top level. I think you had 100 bids or 200 bids, something like that, all the way down to the 10. Now, whether that was like that in the very beginning, I can't debate that. But at the end, every one of those membership levels, somewhere, when one of the legal attorneys got involved and said, you got to make changes, they threw free bids in there to be given away at those levels. Or you could buy the additional bids, which sadly, that's kind of why we're on this call tonight, is because so many people turned in $10,000 bids is what they did.

Yeah, that's the main issue. It's not so much the enrollment process. I mean, the enrollment process might be busted. Certainly you earn more by spending more. And we lost Troy. I don't know how that happened.

Well, if I could respond to that, just to make it Clear.

Hold on now, Lyn, before you do that. I know your style and I know your blood's boiling right now because he disagreed with it.

I wanted to get it in there before he got back. No, but seriously, I was going to agree with him, actually, but I'll wait until he comes back until I agree with him.

Okay? He likes it when you guys agree. Jordan, this one's yours. We covered a little bit for the net winners, and I'm going to dive a little bit deeper there. But as far as the people that have, let's say they've lost money and they're sitting there waiting, I published a document to everybody. I don't know if you guys got it. Of various questions that have been sent in, it's disheartening because people are anxious for the holidays. We've had a message from somebody who's going through chemotherapy, and they've got no money and they need this cash. Any insights or any gut feeling on your part as far as how long it's going to take for these people to see some money come back? And before the money comes back, what information are they going to need to produce?

Well, obviously, before you get to distributions, you've got to have a claim form. So that entails filing a motion with the court, getting a claim form approved, setting a period of 2, 3 months in order for people to fill out the claim form, to turn the claim form. The receivable then has to review all those claims, which, as we know, there's the victim's number in the hundreds of thousands. Comparable Ponzi scheme cases. You usually can.

You're muted right now. Oh, there you go.

Am I good?

You're good now.

Okay.

Comparable Ponzi scheme cases. I'm not sure you can call this a comparable Ponzi scheme just because of the sheer number of victims, but at least a year. You know, the one benefit that Mr. Bell may have for him in this case is the fact that he has several hundred million dollars in the bank. And as he alluded to in his previous letter, he may be able to do a partial distribution sooner rather than later. But like I said in the beginning, before he can do that, he's got to have a list of all the people, all the claims, and he's got to make a determination as to each claim, each proof of claim he's received, whether that qualifies as an allowed claim when you reference the holidays, certainly not before the holidays. You know, he'll have to file to get approval of a claim form. Who knows? How long that'll take. And like I said, usually it'll take a few months for him to receive the claim, set a deadline, and review them. I know that's not the most heartening news, but that's likely the reality.

Yeah. So just sit tight and wait. In your opinion, because you deal with this a lot. Do you think the receiver is being unfair? Because there's some rumblings out there he's abusing his power. Somebody even said he's not credible, which I find that hard to believe because he was in the DOJ for 20 years. What's your perspective on how he's doing?

I mean, unfair? I'm not really sure I can liken that to anything. I don't know where you're alluding to him being unfair or fair, but I think he's taken the course that anyone else in his position would have to do. He came into this not really knowing anything about the scheme. He's got to comb through 18 months of millions of pages of financial documents. He's got to put together some kind of database showing what he thinks are losses, what he thinks people put in took out. So he's got a huge task ahead of him. And do I think he's being unfair? Absolutely not. You've got to remember that he answers to the court and his primary job, as stated in the orders of pointing receivers to marshal and recover assets for the benefit of victims. That's it.

Yeah. I think that I share the same sentiment that you share. He's communicating as much as he can. I mean, he's. I'm not trying to pick on him, but he's a little bit older, so all this technology and all the social media, he's a little bit slow to communicate, but he's starting to communicate more and issue more letters, and he seems sincere. It seems like he's taking his job seriously. His job is to make the pot of cash as large as possible so people recover as much money as possible.

Right. And I'll add one thing. You have to understand that Ponzi schemes are. Are governed by principles of equity. In situations like these, there are no real winners. The receiver's job is to make sure that those who recovered zero do not sit around and recover zero at the end of it, while the people who recovered more than they put in are allowed to use those gains, which in reality are other people's principal contributions.

Okay, so speaking of using the gains, I want to kick it back to Philip real quick. Bill, you've seen some of these subpoenas and you've talked to some of these folks. Some of the questions asked by the receiver was, okay, tell me about any boats that you've purchased, any homes, any cars. Let's suppose somebody ignores a subpoena and they get sued. What happens? Can the receiver take their assets?

Yeah, let me sort of address that. First. Let me start by saying when I said that the subpoena was overreaching, that's the sort of stuff I'm talking about. That, in my opinion, is overreaching. That's more like what we lawyers call post judgment discovery. That is, I get a judgment against you, and now I'm trying to collect it. And so I'm going to ask a lot of questions about your assets so that I'll know whether I can collect it or not. So when I said it was overreaching, that's where I meant. It was overreaching. But to answer your question, I mean, that's exactly why he's asking the question. Of course he's trying to determine if he gets judgments against these 1200 people. If he files lawsuits and goes through all that process and gets judgments against these 1,200 people, what's he going to collect? At the end of the day, is it going to be worth his time and trouble? What's he got that he can get a hold of, Whether that be houses or boats or cars or bank accounts or whatever, that's his end game. That's why he's asking that question. And that's frankly what makes me nervous about this, because I do think he intends to go after and get judgments against people. And that's why. Just not to interrupt, but that's why I've encouraged people to be very proactive about this, not to let it get to a point of. Of having a judgment against you and trying to protect your assets.

Well, speaking of assets, let me bring my partner in this, Walt Burton. Walt, you specialize in commercial real estate. Suppose the receiver gets a judgment. What does he do with it? How does he collect on a home? And then Troy asked earlier about Florida. Those people, obviously there's a separate statute for people in Florida. What's the deal there?

Well, it's my understanding that most of these lawsuits will be filed in the state of North Carolina.

So.

So presumably the receiver would get judgments against the net winners based on the fraudulent transfers. And then once he had the judgments in hand, he would either sell them off to someone who specializes in debt collection for 10, 20 cents on the dollar, and then it would be out of his hands. He would collect his proceeds for the, you know, to be paid out to the net losers, and that would be the end of it for him. But for those who ignore those, you know, for those who ignore it and, you know, those. Those judgments are going to then be taken to the various states or countries where, you know, the net winners may reside, and they're going to be recorded. And then just based on whatever the local laws are, you know, the collection company is going to start trying to collect on the debt, and that may be seizing a vehicle, probably, you know, where probably the thing the most obvious to me, real estate is very public. I can easily determine every asset that someone owns in any jurisdiction with a simple title search. So it's very easy to collect on a judge, particularly if someone owns real estate in the laws. Again, it's going to vary by state, but you've heard the term foreclosure. You can foreclose a judgment lien. So I think there'd be numerous ways that one could collect on a judgment assuming someone had assets.

That's a good answer, Jordan. So we've got these people that have been sent a subpoena, and is it in their best interest to negotiate with the receiver and pay a reduced amount? Let's suppose somebody gained $100,000. Should they negotiate now and let's say pay 80, or do they wait and see if the receiver sues them and then start negotiating? The question I'm trying to get at is, is there an incentive for me to try to resolve the case early as opposed to making the receiver come and get it?

Well, I think the first thing you have to consider is whether you actually have the money. You know, I know a lot of people in all Ponzi schemes. It's not like they put away their winnings and put them in a pot and save them for use down the road. So a lot of it has to do with whether you have money on hand, whether you want to spare yourself the expense and the time of going through litigation. Clawback suits will last several years. Assuming you fight them out, the legal expenses as well will mount up. But there are several advantages to settling. Not only to possibly have this off your plate and not have to worry about it around the holidays, but if I'm the receiver and I'm suing the clawback victim or clawback recipient, I'm going to ask for prejudgment interest. I'm going to ask for payment of my legal fees. If I can get them. You start doing prejudgment interest. On a suit that was filed several years ago with several hundred thousand dollars, you may be looking at doubling the principal amount just in the amount that I'm asking for.

So what I'm hearing is basically it's in people's economic best interest to resolve the matter and pay and negotiate.

I said one thought, just based on what Jordan said and what Philip had said earlier. Even if someone doesn't have any money, there's still a way you could potentially settle with the receiver. And Philip, you and I talked about this previously, how one would go about proving to the receiver he didn't have any money to pay back.

Yeah, I mean, that's the issue, because I'm hearing from a lot of people that their sole source of income, or pretty close to the sole source of income, and that most of this money is gone. And my recommendation to people has been to show the receiver that improve how much, prove to the receiver how much they can actually pay. The danger of not doing that, the danger of saying, because I have so little, I'm going to just ignore this and let him get a default judgment. The danger again, in my experience, is that if I were to get those default judgments, I could then sell them. Even if I didn't want to pursue that judgment by putting a lane on houses and selling vehicles and things like that, I, as the receiver, could sell that judgment to someone who's willing to do that. If I'm the receiver in this case, I've got to be thinking about doing that. I could get some of these judgments, these default judgments, and sell them for 5 or 10 cents on the dollar to someone who was willing to chase these.

I'm going to put this out to everybody because I don't know who the appropriate person is, and maybe nobody knows the answer. But people are asking about the international folks. A large majority of ZEEK participants were from people overseas. If they made money, does the long arm of the law reach over the ocean and can it touch those people? Anybody?

I'm happy to talk about this. I'm sure Jordan's had the same experience. The answer to that is yes. I've sued people internationally for clawbacks. It's much more difficult, as I'm sure Jordan would tell you, because you have to get the judgment and serve it through something called the Hague Convention, which I won't bore people with at this point, but it's very difficult. It's very expensive. But if you have net winners overseas that got upwards of $200,000, I just can't imagine that the trustee would choose not to pursue those, even having to go through the Hague Convention. Jordan, do you have any thoughts on that?

I agree with you 100%. We've had private investigators look for people. We've instituted litigation in Europe. We've also had to try to serve through the Hague, which is cumbersome, to say the very least. Again, it comes down to a cost benefit analysis. Most people, when they realize what they're facing, and some of them may accept service through their attorney. But we have definitely commenced legal proceedings in other continents where the cost benefit is there for the victims.

One of the questions that I've gotten and I share with you all were these administrative fees. A lot of these folks paid a lot of money in administrative fees. Is that recoverable? So what's the distinction between the investment, what they spent for sample bids, and the admin fees, the fees that they paid just to participate? Are those. Is that part of the loss? Anybody?

I can address that? Obviously, I can't speak for the receiver, but my understanding is these fees, I think it's the 10, 25 or 99amonth, are a prerequisite of participating. So if the receiver does a money in, money out analysis and that's part of making an investment, then I would consider it, yes.

Here's the problem with that, guys. They couldn't accept credit cards. So from the end of May till sometime in July, the fees were actually paid from money earned in the rpp, that cash available. So they weren't putting real money in. They were deducting that from gross commissions. Would that be different, Jordan?

In this case, no, that's. That would go with it.

At the end of the day, it's.

Money in and money out. If I put 5,000 in and I've got a pot of 10,000 that I'm using to pay my monthly fees, by the end of the day, I put 10,000 in and took out 50,000. I've still got a net gain of $40,000, even if I paid $6,000 in fees. So you're using your profits. You just haven't reduced them to cash and then put them back into the scheme.

Okay, gotcha.

Walt, would you agree with that? Or Kevin or Philip?

I mean, it's okay. It's all right.

Kevin, you want to take it?

No, I thought I was muted. No, I'm not going to take it. I think Jordan summed it up. Another question was the wisdom of instituting legal action against the receiver. You know, there's two class action cases right now. I think one out of New Orleans.

1.

I'm not sure where the other one's coming from.

North Carolina.

North Carolina. Philip, what's the wisdom of filing a class action against the receiver? Number one, is it effective? Number two, does the class really benefit? And then the third question, and if you forget, I'll remind you. Could that actually inhibit the entire process for everybody?

I'm going to start with your third question first. Yes, it would inhibit it and it would slow everything down. There's no doubt. And not to mention, we have to remember that every dollar that the receiver spends in legal fees is a dollar out of the common pot, if you will. And so that's an issue at some point, too. The time and the legal fees that the receiver is spending certainly are an issue. Do I think it would be effective? The answer that's no, not in my opinion. Receivers. People need to understand that receivers are given very wide latitude by the courts, and they're going to be given the benefit of the doubt. The court there in North Carolina is going to do its best to make sure that all the proceedings that relate to Zeke are there together. It'll do everything it can to do that. Again, someone, I think it was Jordan that touched earlier about whether or not the receiver was doing his job or whether he was being unfair. I don't see anything that has happened to date that leads me to believe that a class action would be successful. It's certainly not something I would recommend to my clients.

I got a question on that, Philip. The North Carolina case is the state case. The Louisiana case is a federal case. Do one of them take precedent over the other? Is it the date of filing or how does that work?

Well, the North Carolina case is actually in the federal court because the SEC filed it. So it's a governmental action.

No, I mean the class action. The class action was filed.

Yeah. The federal is going to trump the state.

Okay, now I got a question. Kevin, I know we've been on here for a while, but I've got a couple questions we haven't covered. And then. Well, actually, that's rude of me. Let Lynn go because you asked him to go first.

No, it's okay. Go ahead, Troy.

One thing I did a post a while back talking about money laundering. Got a lot of negative. But the more I've studied, the 8300 form that is supposed to be turned into the IRS every time $10,000 is given to a business was what prompted me to do that. And then we've started to see more and more where the participants of Zeek did not directly deposit their money to Zeek because they did not want to take the chance that it would, like we've already found, it would just lay around the office or it wouldn't get deposited. So they were cutting $10,000 checks to their upline. Their upline were depositing those checks and then funding the downline's accounts through their E wallets into Zeek Rewards. Now, this is a twofold question, guys. One, would some kind of IRS or money laundering statute be there that they would have to look at? And number two, are these people that did it that way? How do they show the receiver, hey, I actually did put money in. It didn't come from my upline. I wasn't some fake person that was running an extra account for my upline. How does all that work?

Can you rephrase that real quick? I understand you're asking about the IRS angle.

Yeah, let's look at number one. Number one is nobody filed an 8300 form. I've checked on this. And the nobody in the field was ever doing that. The companies weren't doing that. Probably the only people that did that were the banks. So you've got all these international funds that have flown into this company. No, 8300. There were no W8s filed. Really no way to track these people outside of maybe the account numbers, fictitious names, stuff like that? Some of those people were funding their downlines accounts because they were telling them, hey, you send us your money and then we'll fund your account. How does this all play out in the long run of both? Is there money laundering statutes that might come into play? Is there IRS rules that might affect the individuals? And number two, how do these people even file a claim if they can't prove that they actually gave money to Zeke Rewards?

Well, I'll answer your second part first. Obviously, in order to file a claim, the receiver is going to piece together all the financial records he has. He will then provide you with proof of claim. And if he's figured out an amount that he thinks is your loss, he'll tell you. He'll then give you an opportunity to say, if you disagree with this, please provide supporting documentation, and he'll review it and act accordingly. In terms of the irs, money laundering is. You see, people get sued for it civilly every now and then. But money laundering is a criminal offense, and I wouldn't anticipate any criminal actions directed towards people who are participants in the scheme. In terms of IRS forms, it all depends. I mean, the one interplay with the IRS that I see a lot is recently in the wake of Madoff, the IRS has let people deduct more and more of their losses as an actual loss rather than not allowing them to make a fraud claim. So we've seen the IRS come to us and ask us for information about some claimants based on their previous filing for a tax exemption.

Let me ask, and I don't know who to direct this to. We're actually getting some questions in real time right now. And somebody asked a really good question about taxes. They paid taxes on the gains last year. So can you explain the process as far as how is that factored in when they have to pay the money back? Philip, looking at you.

I was just about to let Jordan answer that question. I'm not a tax lawyer. I'll answer it this way then let Jordan tell you. I do know that post Madoff there are some Ponzi safe harbors I believe is what they call them where you can, you don't have to pay taxes on money that you have to disgorge. I've officially exhausted what I know about the Ponssi safe harbor under irs.

Jordan, you got anything to add?

Yeah, I mean obviously I'm not a tax lawyer either, but we've seen this and I've kind of followed. There was recently, a couple weeks ago or a couple months ago something that the IRS had unveiled that was favorable for people deducting losses from Ponzi scheme. But obviously I think you have three years to claim a refund. And we've actually worked with the IRS for people we've sued to get their tax returns because obviously if you paid taxes on income, that was an income and instead was a loss and you lost all your money, you would directly be entitled to a refund of that.

That's the answer.

Kevin, let me say I've got Sandy Botkin who is a well known former IRS attorney, worked out of Washington. He's very well known inside the home business arena. We're going to have him on a Google hangout in January specifically talking about the taxes. And Zeke, he wanted plenty of time to do his own research. But we're going to bring him on to another hangout just specifically on these tax issues because they have become so prevalent with some of the affiliates out there on both sides, the victim and the actual promoters.

That'll be a fantastic program. Yes, Sandy's a very well respected tax guy in the space. Lynn, I want to give you a chance to kind of chime in here and Part of your report that you published a day late, I remember you wrote it right when Zeke went down. You had the history of all the banking issues that these guys had. Why do you think banks kept closing these accounts with Zeke? Do you have an opinion on that? That was always bizarre to me.

Well, my issue really was never about the banks closing them.

That was the symptom of the problem. Right?

Yeah. My more issue was how they were explaining it away, making suggestions as if it was their choice to move to bigger banks because these banks were too small to handle us. But at the same time cash your checks within 48 hours because well, obviously that wasn't their decision to leave. Otherwise they'd leave enough funds in the account to cover outstanding checks. So there was more to it. Same with why they dropped the 5cc program. Their explanation for that wasn't accurate. Various explanations for why things were happening. If you were to dig it a little deeper, you know why the six different countries were suddenly cut out and banned. Their explanation for that wasn't entirely accurate. So it was more how they kept spinning things. Not so much the actual events that were occurring that I had some issues with. And as far as any final comments and we're about to wrap up, you may have spoke about this the first 10 minutes or something that I was out, but I want to just make it really, really clear. Zeek Rewards or anything remotely similar to it is not coming back or anything like it probably ever again. Zeek Rewards had aspects to it that in my opinion were irreparable. No matter what attorneys they hired or experts or how much time you give them. They would probably have had to have completely taken out the gold, silver, diamond 1050, 99 thing. And my reason for believing that leads weren't included in that is because Zeek, their website listed in detail all the components of those packages and they did not list leads. But I'm sure Troy knows that they are. So let's assume leads were in there free leads to give away, that would still be leads to give away as samples to attract new customers. That's still something that has no value to a non participant in the income opportunity. So that would have to have been removed completely. And the bids that are purchased by affiliates, some very large percentage of them would have to have been actually used for bidding to be commissionable. And once you do something like that, then the whole thing falls apart and you die a natural death of attrition. Yeah, it's not coming back. No matter what you hear out there, anybody asking you for Money to donate to a cause to sue the sec. That's a scam within a scam. They're not coming back.

Well, you had the courage to say it. I was thinking it.

Let me have one clarification, Kevin. Not leads. Bids. Bids were inside, along with the shopping Genie, along with the free shopping store. Not leads. Leads. They got totally away from. Those were third party vaers. Matter of fact, one of the guys leading a charge to bring this back sold leads to the distributors as a third party.

I misspoke. I didn't mean leads. I said leads, but I meant bids. But even if the bids again, were being purchased as a sales aid, and even if they were included in that package, that package still wouldn't have been purchased by someone who wasn't a participant in the income opportunity.

Yeah, the program's not coming back. The idea of sample bids was problematic. The idea of bonus points where you accrued more points by spending more money was problematic. And it's funny, a lot of network marketing companies, you have a hard time getting people to spend $50 a month on coffee. But in Zeek Rewards, people would gladly spend $10,000. It was just really bizarre. People really felt in their heart of hearts that this was a great program. And I hate using the word victim, but things didn't pan out. I'm not suggesting that the owners of Zeek were bad people. If you're a participant in Zeek out there and you put in your savings and you're really hoping it was a good program, it's not your fault. A lot of people really believed in the program. Zeek certainly surrounds itself with credible people, and a lot of people placed a lot of hope and time and money in the program, and it didn't work out. It doesn't mean that you made a terrible mistake or that you should have seen it coming. A lot of people were fooled by it. The main point of this hangout is to get people with a diverse set of experiences to chime in on these issues. In my opinion, and Lyn said this recently when he was just talking the idea of funding a legal effort and joining a. Here's the problem with that. Number one, who's handling the accounting. But number two, from an ethical standpoint, there really is a conflict, because if you're going to represent folks that made more money than they put in.

You.

Want to make sure they keep their money. That's just reality.

Let me ask you a question, though, on that. Isn't it true that you and Walt are leading an effort for victims and are you not charging them or what's the deal there? Because I've seen stuff.

Yeah, there's two tracks now for the people that made money, their interest, they want to hold on to that money. And those interests are not consistent with the people that lost money. So funding a legal effort designed to protect the net winners, it's not in everybody's best interest. Because if you lost more money than what you put in, you want that cash pot to be as big as possible. You want the receiver to go out there and initiate the clawback actions to make the money pool as large as it possibly can. So your distribution is as large as possible. So that's a conflicting track. So at Thompson Burton, we're not handling clawback work. Since Philip Young has served as a receiver, he's got a lot of experience with clawback litigation. He's agreed to take on that work again. We don't make any money from those referrals at all. No fee sharing. And that's not ethical. What we have said, Number one, we aggregated email addresses early for the ZeekRecovery.info site. We made a few promises. We said, we're never going to give away the list. We've honored that commitment. We said we're never going to try to sell you anything or sell you a book or upsell some junk. We're never going to do that. When the Zeek issue is over, that newsletter list disappears. We're not using it for the MLM Attorney site. We're just keeping it separate. That being said, we're going to provide information for people that have lost money when the claims form comes out. And I think Jordan Magnus is going to help us with this process. So when the claim. Claim form comes out, number one, we're going to provide information for people to help them fill it out themselves. If you want to do it yourself, you can certainly do it yourself, and we'll provide you with the information. If you want valet service, we're going to charge a couple hundred dollars, maybe $300 per participant and handle the claims process for these people. But you can't be a lawyer and sit on both sides of the fence. You can't represent the callback folks and you can't represent the net losers because those interests are not consistent.

Kevin, let me ask you one last question on this topic. I know enough about marketing now, and I know how networkers think and people that are in Ponzis. I think I got a little idea. You said that you won't give away the list. I know you, so I'm going to assume something, but I want to ask you the question publicly. Does that also mean you will not sell the list to somebody?

Oh, without question. Without question. So I've got, I've got three little kids, I've got a five year old, three year old and a one year old. And I would never do anything to jeopardize their well being. That would be stupid. And if I were to sell the list, the list is, in all honesty, not worth much. We just have a few thousand email addresses that we're using for the Zeek recovery website. I sort of, I'm a very passionate person. And you and I and Lynn as well, the three of us, we're committed to raising the standards in the industry. And we actually, I think we three are unique and there's a few of them out there too as well, other professionals, but we've actually submitted ideas on ways to make the space better. Now, we haven't been very successful, but I sincerely do feel a little bit responsible for the Zeke disaster because people never would have invested in Zeke if they didn't trust the people around Zeek. I knew it was a problem and I didn't say anything. Lyn had the courage to publish the 35 page report and I want to commend Lynn for that. There was a lot of people around Zeek that just didn't say anything. We kept our mouth shut with that umbrella of protection. People trusted the program and they spent a lot of money. They never would have spent but for that trust. I think the network marketing model was leveraged. It was abused and a lot of people got hurt because of it. So with that being said, you're either part of the solution or you're part of the problem. So my partner Walt and I, we talked about it. We said, look, let's compile a list, let's put up a website for free. Let's just put information out there, that's all. So we haven't solicited money from people, we haven't charged for the information. We certainly haven't sold or given away the list.

Just to drive home that point. When you're taking advice from people, think of what those people have to gain. We're giving this advice for free and we don't have any irons in the fire, so to speak. So I'll just leave it at that.

Yeah, fair enough.

And also, Kevin, I just want to make, just real quick, as I understand it, this effort to sue the SEC and raising these funds to do that. That isn't so much any legal effort to get anybody's money back. That's an effort to get Zeek Rewards back. So that's why you should really dismiss that, not give it a lot of credibility.

Jordan, I want to ask you something. You and Philip both, I mean, Walt, you've been in on this, and I know, Kevin, you attorneys got to get your suits off. But I got a question. If one of these class action suits gets heard or down the road in 2013, criminal charges get filed, would there at that time possibly be a court hearing to where we could actually see? Because I know a lot of the critics, or not critics, a lot of the supporters truly believe this wasn't illegal, wasn't a Ponzi, wasn't a security. Will there be more evidence that would be shown that maybe could change these people's minds, where they understood this is really a Ponzi? Paul Berks was presented this evidence or whoever. Is that feasible? Or is that null and void, just a fantasy?

I'll address that, and then Philip, you can fill in, or Walt after that. But I'll address your last point first. First, there's some preconceived notion out there that Mr. Bell didn't prove the Ponzi scheme. No one's proved the Ponzi scheme. And this is a crucial error. That's not true up to this proceeding. We have the complaint filed, we have the consent orders done. We have the allegations in the complaint, which in the consent orders, Paul Berks and Rex Venture Group explicitly say they won't deny them. Second, of all, the way, the only time, not the only time, but the time that you will see the receiver prove the existence of a Ponzi scheme is most likely in the clawbacks that will be when he has his burden, when he sues the victims to say, I want X amount of money back, they say, okay, prove it. He makes a motion with the court, it was actual intent to defraud, constructive fraud, et cetera. So there's no rule that the SEC has to lay all their evidence out for public view and in a square for everyone to look at it at the onset of the case. So to clear that up, and then as to your second point, the class actions, the receiver does not stand in line to private investors or private actions take away money from the scheme. What happens if there is an action that does go forth? The receiver would obviously take precedent. Because if you think about it, if you could encourage a small group of investors to go out and try to collect funds on behalf of themselves and in essence, enrich their gains or not gains, but basically enrich the money that they had lost disproportionately to the large group of investors. That would really defeat the purpose of a receivership. So I would see that obviously the receiver has already moved to stay those lawsuits, and any recovery, obviously would go to the receiver over private investors.

One last question on that, guys. And I just thought of this. If there are private groups, and I think there's a couple now, not just one, but if there's private groups and they are taking and donations for legal defense, and then they do not ever follow through on the legal defense, are there. Are there civil or criminal actions that the people that trusted them can then file against them, or is this like a political pact where you get your money and if your guy doesn't get in or you quit, you still keep it?

Good question.

Who wants to take that question? Philip, you want to take that one?

Not really.

My impression is that I've taken the approach.

I've taken the approach all along that I'd prefer not to talk about what anybody else is doing or saying. And I'm going to focus on the advice I've given people and not the advice that other people are giving. And one thing that Jordan just said I think is really important. That is, I've had a number of people ask me if they're going to get their day in court, if ultimately, like Troy asked, will there be some showing or not a showing that Zeke was a Ponzi or not a Ponzi. I think Jordan's absolutely right. It's going to happen probably first in the clawback litigation. My fear, honestly, is that by the time we get to that point, I'm afraid of what the clawback defendants will have spent in legal fees to get to that point. That's honestly my fear in that is, where are you if you spend 25,000 or $30,000 in legal fees, you get your day in court and you lose your day in court, and then you have a judgment against you for $150,000 that you don't have? And that's my very pragmatic fear here.

Phil, let me ask you a question then on that. If I'm a promoter and I'm a net winner and I decide, okay, I'm going to fight this, I'm going to file my subpoena, I'm going to fight this, is there a typical range of what that would cost me? I mean, is that 25, 30,000 typical or could it cost me more? Could it cost me less? Will it cost me a few hundred bucks?

Well, I don't think it'll cost you a few hundred dollars. No doubt. I think how much it would cost you probably depends on how many people you've got together in a group sort of fighting that if you were going it on your own, look to defeat a case like this, I don't know, 30 or $50,000. If you had 100 people, then it's going to be less than that. It's going to be several thousand, just any way you slice it, because it's going to be very document and fact intensive as to what you received, what you knew, your recoverability, all those sorts of things. So it's going to be. I just can't imagine, Troy, you being able to take this all the way to the end for less than $10,000. I just really can't see that.

And Philip, I guess on the other.

Side of that, the receiver has a virtually unlimited set of resources to fight you with.

Well, yeah, I mean, we know that he has several hundred million that are sitting in the bank, and he's going to argue that it's his responsibility to see these all the way through, to go after the net winners. And so, yeah, I mean, and like I said before, he's got to prove X number of facts, regardless of whether there's one defendant or 2,000 defendants.

Real quick, Troy, before you jump in, I've got two points. Number one, somebody asked if people raise money and they don't deliver, I think there's sort of an implied contract, and I think there is a civil remedy where people could sue because they gave money with the expectation of receiving a certain service and they didn't receive it. I think that's the obvious answer. Real quick, Troy, before you ask your question. And somebody said, please address the money frozen in E wallets. I'm not really familiar with the facts here about how the E wallets work, but I've gotten probably six or seven questions from people where they had money in NX something.

NXpay.

NXpay. And it was personal money, not even money that they were going to allocate for Zika, I think. And now it's frozen. Is that part of the receivership estate? Is the receiver going to take that money? Is Philip or Jordan? Are you guys familiar with that issue at all? I'll give you some facts.

I'm in. I can. I can give a little update and they can follow up. From the legal side, there was Question. In the very beginning, when the receiver and SEC and the Secret Service started grabbing assets, that NXPay was really a front company for Zeek Rewards and that Paul had funded that company because at least one of their accounts was in a bank that he had banked with in the past. That has since been proven not to be true. But they froze all. Not just, not at InXPay, they froze all of the E wallets. But in NXPay specifically, they're having to go through and separate out for the receiver what actually had been Zeke Rewards because there was a massive amount of money that had been put in there. The owner of that company had flown into Lexington to talk with Paul. That's taken a lot more. They froze the whole company asset in that one, not just Zeek money. Now, one of the other questions guys that people do have is what Kevin was alluding to. There were people that had the intent to join Zeek Rewards. So they had set up their Zeek Rewards free account. They had funded their e wallets, NXPay and others. They have never, ever made a purchase. They were a free person. They're one of the one.

Sa.

My opinion is yes, and I'll tell you why that is. The receiver has already asked for and attained court permission to cash checks that were in his possession when they filed. When the SEC came in and shut it down, there were cashier's checks, there were personal checks, things like that they were in waiting, had not been cashed. People tried to cut those off to stop payment on those checks. His latest report said that in fact he was able to come back and get permission to cash those checks. I don't know why E Wallet would be any different. I think he's going to treat that as money that was intended to come into Zeek and therefore is part of the Zeek receivership assets. That's my opinion.

Okay, one last question to Jordan because I know he's been on the road. One of the things that I keep hearing from the promoters and it's propaganda that just filters out, doesn't matter what Ponzi I saw it in asd, is that the receiver is going to suck all the money because you attorneys overcharge everybody, everything. So is there a set rule for receivers on what they get paid, how they get paid, that you can quickly just kind of let people know how that operates, how it works?

I mean, obviously the receiver is subject to the jurisdiction of the sec. When the receiver makes a fee request, the SEC usually has to support that fee. Request. The SEC will usually check the fees, see if they're reasonable in their opinion. I don't very often see the SEC objecting to fees. But you got to realize, if the SEC had let Zeke go on one more month, there would not be $225 million in the bank. There would be zero. The trustee for the Bernard Madoff Ponzi scheme has billed $250 million, something like that, and he has tens of almost hundreds of lawyers on the. But he's recovered almost $10 billion. So when there's a large scale fraud like this and you have, by the receiver's note admission, millions of people involved, it's going to take a lot of manpower to reconstruct it. But the way that this thing works is his recoveries will likely dwarf any fees that he does aggregate in the end.

Okay, one last question, Kevin. I promise. But to me, this is an asinine move on the receiver's part and I have been an advocate of his, but this is something that frustrates me as an advocate for network marketing. They shut down the Zeek Rewards website instead of making it the receivers website. And to me that means that there's going to be because I get these emails every day. I get comments every day. Hey, how do I find out what's going on? Nobody goes to the Zeek Rewards receivership website. Is that common practice or why didn't they just make Zeek Rewards the receiver site?

In my opinion, we're dealing with a law firm that's not used to this kind of visibility. I think it was a simple mistake. The idea in the past, they used to mail claim forms and people would actually write it out on a piece of paper and mail it back. Now it's all digital. I think he's new to this stuff, but he's hitting his stride. What is the URL for the receivership official website?

Zeke rewardsreceivership.com I'll make sure I can.

Post that underneath this video. Zeke rewardsreceivership.com he also needs to have a newsletter list. If you're out there listening, Ken, get yourself a list and blast this stuff to an email list. That way nobody misses it. Guys, it's been, I think, a great, great hangout. I think we've covered a lot of topics. I want to give everybody 30 seconds to a minute to close out final thoughts as far as your impression of this matter and what you think and where we are and where we're going. We'll start with you, Jordan.

Okay, thanks for the Opportunity, guys, appreciate it. Hopefully we can do one of these in the future as obviously as the current events call for. But the one thing I would kind of leave everyone with is obviously you kind of have a dead time right now that the receiver's accumulating records, going through the documents, putting together a timeline, you'll probably see a motion to approve a claims form in the next few months, I would guess. But I would make an effort now to start gathering documents that may evidence how much you put in, how much you took out. Because when you do receive a claim form, it's likely going to receive or it's likely going to contain what the receiver thinks is your loss. If you think the loss is much bigger and all you have is your word, unfortunately that's not going to get you very far in the court system. So take the time, now that you're not under the gun to respond to anything and start collecting your bank records, possibly even some taxes, checks, etc.

Lyn, any closing thoughts?

Just that this, you know, this really does have a little bit of an upside to it. And that is it's a great educational process. You know, we've got something here that can be used as a case study for years to help people really understand, like what's a pyramid, what's not, what's a Ponzi, what's not, etc. Etc. So, you know, let's take advantage of this upside and really use it as educational process, which is exactly what we're doing right now.

Yeah, that's a good point, Philip.

Yeah. Well, thanks for letting me participate. What I would encourage people to do, and again, I'm sort of talking to net winners here. What I would encourage people to do is to be proactive about these subpoenas. Do not ignore a subpoena. Whether you respond to it on your own, whether you hire another lawyer, whatever it is, please don't ignore a subpoena. Please be proactive about it. At least reach out to the receiver and communicate with him. I just can't stress that enough that this is not something you want to ignore. I do not believe that the receiver is simply going to go away if you take the ostrich with the head in the sand approach. So I would just encourage people to be proactive about that.

And you're not going to promote yourself. So I'll promote yourself for you folks. I'll provide Philip's contact information underneath this video. Well, Philip, if people want to reach you, let's say they're a net winner. They've been served with a subpoena and they want to contact you. How would you recommend they contact you?

Probably the best way to do that is by my email address. That email address is pyoung p y.

O u n gmylaw.com p youngmylaw.com Troy any closing thoughts?

Yeah, I'm a blogger. Don't go to any of their websites. Just come to mind. Everything's fine. No, seriously, a couple of things that come to mind as we close this out. Number one is like, Kevin, I got drawn into this. I saw some of the greatest legal and consulting minds in network marketing that had come together to put the compliance to do everything. And I think, as one of my friends, Richard Brooks, said, you got too close to the forest to see the trees. And I want to thank Jordan, especially as somebody that continually hit my blog, continually gave me thoughts. I kept going over and looking at his and was able to work through my, I think, my own emotional connection. I met all these people. I really came to like them. I thought they were a cluster when it came to running a business. And because of that, I mean, obviously with 60,000 uncashed documents laying around, I didn't think they were smart enough to run a Ponzi. But looking at the evidence and going back to the fact that the law is the law, if the law says something is a Ponzi and we are riding such a gray area or over into the red line that we don't care. The money is so fast and it's coming in so big that we don't want to stop it, then we're to blame. And I think in this case, that's probably kind of what happened. These. These folks saw money like they'd never seen before. They didn't stop it. It was propagated by leaders that were telling them how great they were. And it did. It really did work that way. And people would bow down to them. It was the most weird thing you've ever seen. So, folks, listen to what these guys have to say. Do your due diligence. I don't care what attorney you use. You don't have to use any of these. But get legal counsel, whether you're a victim or whether you're a promoter, you need to know what your rights are and don't give up those rights. Make sure that you don't throw the subpoena in the trash or anything else. Do what's right. And that's all I've got to say.

Kevin. I really appreciate it. Troy. Walt, you got any closing Thoughts? Oh, your audio's gone.

Can you hear me now?

Yeah.

There you are.

The laws are generally creditor friendly in every state. So to kind of follow up on what Philip had said, if you think you can put your head in the sand and ignore a supp subpoena or a lawsuit in the future, eventually that will catch up with you and it is very likely that it will have severe consequences. So I think in the alternative, I think what I would say is, and this is mostly based on some of the conversations we've had this week, if you're faced with two sets of alternatives of a course of action that you can choose right now, I think I would just make sure you're asking the questions of what is the probability of success and what happens next? Even if we are successful with step one, step two, step three, because I think, I suspect what is going to happen is there's going to be a cascading of fees and at the end of the day, you're not going to be any better off. But you will have spent a lot of money and not gotten anything for it.

That's good. And guys, I want to thank everybody. Jordan, Lynn, Philip, Troy and Wal. This has been a fantastic program. The silver lining, as Lynn alluded to, is that the space will improve and it will get stronger. I think people are more sophisticated now. I think a lot of the vendors are more sophisticated now as far as who they do business with. They're asking more questions. They're trying to understand models better. It's not as easy as it used to be to get a merchant account. For those of you that lost money in the program and you truly believe that this was your big opportunity, don't lose hope and don't get too disenchanted. There are some great companies out there in the industry that offer wonderful products and services, but just try to manage expectations. If it seems too good to be true, it probably is. Definitely avoid programs where the more you spend, the more money you can possibly make. Get behind a product that you really believe in that's unique. And yeah, the industry can definitely do better. Now with that being said, definitely don't ignore the subpoena. Now, there are some conflicting thoughts out there as far as how to handle this. We've given our opinions. Feel free to get other opinions, talk to other lawyers. The benefit of this is, number one, this video is going to be out there forever. And we've all made some pretty bold predictions. Somebody will be proven right and we're going to know without a doubt who's right. In my opinion, I think it's pretty clear the receiver is serious in this case. He's supposed to be serious. And if you lost money in this matter, you want him to be serious. So this thing ain't going away, so we just got to deal with it in a responsible manner. So, guys, thanks again, and feel free to promote this on your websites. Again, I'm the MLM attorney, the mlmatorney.com and we're with Thompson Burton. So you guys take care. Thanks so much.

Thanks, bud.

Thank you.