In 35 years of handling bankruptcy cases, Stephen Darr has seen plenty of ugly. He has doled out funds to creditors of an asbestos company and a machine gun maker and to victims of several Ponzi schemes.
But nothing comes close to the scale of the TelexFree Inc. bankruptcy. Never in history has a trustee been responsible for divvying up the assets of a company that prosecutors say defrauded 2.1 million people, from Boston to Uganda.
Darr, an accountant by trade and senior managing director at Mesirow Financial Consulting in Boston, is the court-appointed trustee charged with paying out claims to victims who believe they are owed more than $1 billion in the case. TelexFree was purportedly a long-distance phone company, but in reality generated most of its money by luring a stream of small investors from 2012 until it was shut down earlier this year, according to prosecutors.
Many Brazilian immigrants risked — and lost — large portions of their savings, in hopes of reaping the generous returns that were promised.
“I feel very sympathetic toward these people,’’ Darr said. “They lost a lot of money. They deserve to get it back, and it’s my job to get it back to them as
Tag Archive for Ponzi
Hot Business News Today
Paul Burks – ZeekRewards President Charged For Operating $850 Million Ponzi Scheme
by Ted Nuyten • • 0 Comments
The president and founder of ZeekRewards, Paul Burks, has been indicted on federal charges for operating an Internet Ponzi scheme that took in more than $850 million dollars, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, USA
The criminal indictment was returned on 24 October 2014 by a federal grand jury sitting in Charlotte, charging Burks, 67, of Lexington, N.C., with wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy.
Russell F. Nelson, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) join U.S. Attorney Tompkins in making today’s announcement.
According to allegations contained in the indictment, from January 2010 through August 2012, Paul Burks was the owner of Rex Venture Group, LLC (RVG), through which he owned and operated Zeekler, a sham Internet-based penny auction company, and its purported advertising division, ZeekRewards (collectively “Zeek”).
The indictment alleges that Burks and his conspirators induced victims – including over 1,500 victims in the Charlotte area – to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from
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SEC Action Against Zhunrize May Effect Dubli
by Ted Nuyten • • 0 Comments
Recently the SEC alleges Zhunrize to drive a Pyramid Scheme and the SEC’s argument is “substantially all of Zhunrize revenue has comes from the sale of memberships (referred to as stores)”.
Dubli is a larger MLM with a simular e-commerce program and cashback shopping mall and has been expanding to the USA.
Dubli’s strategy is very open as it is a public company and has warned in its own report:
“Continuing analysis of the customer subscriptions, the inherent danger Dubli faces is that, in bundling so many subscription vouchers with paid affiliate memberships, there won’t be a significant amount of customers purchasing subscriptions”.
And:
We are subject to the risk that, in one or more markets, our network marketing program could be found not to be in compliance with applicable law or regulations.
Regulations applicable to network marketing organizations generally are directed at preventing fraudulent or deceptive schemes, often referred to as “pyramid” or “chain sales” schemes, by ensuring that product sales ultimately are made to consumers and that advancement within an organization is based on sales of the organization’s products rather than investments in the organization or other non-retail sales-related criteria.
Affiliate membership to Dubli is available at three price-points:
Business License – $594 ($99 +
Hot Business News Today
SEC Action Against Zhunrize May Effect Dubli
by Ted Nuyten • • 0 Comments
Recently the SEC alleges Zhunrize to drive a Pyramid Scheme and the SEC’s argument is “substantially all of Zhunrize revenue has comes from the sale of memberships (referred to as stores)”.
Dubli is a larger MLM with a simular e-commerce program and cashback shopping mall and has been expanding to the USA.
Dubli’s strategy is very open as it is a public company and has warned in its own report:
“Continuing analysis of the customer subscriptions, the inherent danger Dubli faces is that, in bundling so many subscription vouchers with paid affiliate memberships, there won’t be a significant amount of customers purchasing subscriptions”.
And:
We are subject to the risk that, in one or more markets, our network marketing program could be found not to be in compliance with applicable law or regulations.
Regulations applicable to network marketing organizations generally are directed at preventing fraudulent or deceptive schemes, often referred to as “pyramid” or “chain sales” schemes, by ensuring that product sales ultimately are made to consumers and that advancement within an organization is based on sales of the organization’s products rather than investments in the organization or other non-retail sales-related criteria.
Affiliate membership to Dubli is available at three price-points:
Business License – $594 ($99 +
Hot Business News Today
SEC Alleges Zhunrize To Be A Pyramid Scheme – Assets Frozen
by Ted Nuyten • • 0 Comments
Zhunrize, launched in 2013 is a shopping and savings portal and offers affiliates a replicated storefront, which the company has branded “ZhunCity”. The shopping portal starts at $99 and $30 a month, up to $3,000 and $100 a month.
According to a SEC Press release:
“On September 22, 2014, the Securities and Exchange Commission filed a civil injunctive action in the Northern District of Georgia against Zhunrize, Inc. (“Zhunrize”) and its CEO, Jeff Pan (“Pan”). In connection with the filing of this action, the Commission obtained a temporary restraining order against the defendants and an order freezing all of defendants’ assets.
The Commission alleges that Zhunrize, an Atlanta-based multi-level marketing company, and Pan have been operating a fraudulent pyramid scheme that has raised over $100 million from investors worldwide.
According to the Commission’s complaint, Zhunrize purports to be a legitimate multi-level marketing business by which members purchase online stores and then sell merchandise through them, while earning commissions on products purchased by their customers and through store sales to other members and hosting fees paid by those members.
In fact, the company is operating as a pyramid scheme because its commission structure is based on the continual recruitment of new members, with the
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Vemma CEO Responds To Accusations In The Media
by Ted Nuyten • • 0 Comments
BK Boreyko, CEO Vemma, reponds to accusations in the media in the next statement to Vemma Elite members:
“Last year, together we accomplished something only 18 out of the thousands of networking companies in the world did – we GREW by $103 million to finish at $221 million! This marked the biggest, most successful company in my career. It just figures when you’re bigger than ever, you’ll receive more negative attention than ever. I don’t understand why success attracts negativity, but it always has and I guess it always will.
The recent media coverage on Vemma has been disappointing. Our strategy to move to affiliate marketing and improve our business model was designed to make our opportunity more attractive. Well, I learned early on to turn my disappointments into determination. I don’t know what fires you up, but hate towards what we do and who we help is my fuel for the future!
Let’s talk a bit about the media and their view on what we do. Recently, the producers from the Today Show asked for comments on these topics below and our answers were on point. Some of the topics made it into the show, some didn’t. Below I’ve expanded our responses
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Vox Media: Herbalife Science Is Definitely Garbage
by Ted Nuyten • • 0 Comments
Vox Media is one of the USA’s largest and fastest growing online publishers. Based in Washington DC, Vox owns and operates sites in distinct vertical categories: general news, sports, technology & culture, gaming, dining & nightlife, shopping & fashion, and design & real estate.
According to Vox:
On the Herbalife website, there’s a section dedicated to “science videos,” where various company stakeholders boast that they “guarantee the very best science” behind their products, which are all “science proven.”
Dig a little deeper, however, and it seems the evidentiary underpinnings of Herbalife’s wares boil down to only four very weak studies that can barely be called science, let alone the “very best science.” If this is Herbalife’s prime research and development, then the company’s science is definitely garbage and customers should question the health claims on its products.
A look at Herbalife’s clinical trials
On a dedicated science website, Herbalife cites four clinical trials to prove the safety and effectiveness of its products:
1) The first clinical study compares weight and fat loss in two groups of obese men and women: the first went on a diet involving protein enriched Herbalife meal-replacement shakes; the second dieted with a standard Herbalife shake. While the study shows that both groups