Monday, September 3, 2012

When Fearmongers Attack: Using fear as a propaganda weapon

Both fear and hope are powerful emotions, and in the hands of a manipulator, can have devastating results.

Scams usually prey on hope (and its relative, greed). Hope for a better life, more money, good mate, sympathy, etc.

And when the critics speak up, they were derided as "fearmongers", "negative people", and so on, by the scammers and their naive followers. This is very ironic, as scammers will use fear when it suits them.

In the aftermath of the $600 million ZeekRewards Ponzi scheme, some fearmongers have continued to play the victims for their own agenda. Take a look at the following example. In order NOT to give them any "link juice" I am NOT linking their website, but you can easily figure out by Googling some of the words.

Note that in the first paragraph, these folks alleged
"SEC mislead the judge in its claim" 
then in the next sentence, they wrote
"they (SEC) did this without even having to provide the judge proof"
So what did SEC mislead the judge with? Hmmm?

Also notice near the end:
HereWe cannot let this happen to us! 
There's a section that's missing between "Here" and "We".

The last sentence is about bringing PROOF to the courts. Clearly, that cannot be what they were talking about when they say "we cannot let this happen to us"... Care to guess what that section actually read before they erased it?

Turns out, there's an archive. It's a repeat of a notice from NxPay, then this:
That's right, a bunch of "abuse of government" stories, implying that government shut down "legitimate" businesses and steal people's property willy-nilly and people should fight the government.

Their message is clear: the evil government was out to steal their money and never give a penny. (and by implication, Zeek was an honest business)

This SAME GROUP then claimed "receiver will eat all the money" and such, by emphasizing the "funds in transit" problem. Here's a little quote from one of their emails sent to their "followers"...
I think you will see really quickly when reading this press release that the SEC and Kenneth Bell are NOT out for the best interest of the so call Zeek Rewards “victims” as it was announced that all of the uncashed checks that the receiver has in their possession WILL be cashed in order to get the funds to be able to pay back the “victims” at a later time. Huh? So they are cashing the “victims” checks instead of sending them back directly to the “victims” making them wait much longer? You tell me if this sounds right? 
Why is this fair? Consider this little factoid: they decided to use a single term "victims", to refer to TWO different groups out of these three groups. Care to guess which two?
  1. The people who ALREADY put in their money
  2. The people who are had already put in their money, but the money is still in transit
  3. The people who haven't put in their money
They claim "cashing the victim's checks instead of sending them back to the victims". Clearly, they mean to say group 2 is same as group 3. 

However, logically speaking, it's group 1 and 2 that are "victims". So why should you treat group 2 different from group 1? Group 2 sent in their checks, they are same as group 1. They should be treated the same.  And how big is Group 2 any way? A TINY percentage of people who had put money into the Zeek Ponzi. So far they can only identify maybe a few million. Remember, SEC estimated Zeek ponzi to be $600 million, and the number is like on the low side. So they want to give this tiny group special treatment? No. ALL that money belongs to ALL the victims. If you give group 2 special treatment, then you are no longer fair to group 1.

Makes you wonder who really are this group, doesn't it? That they are in favor of benefiting the few (group 2) so the bigger group (group 1) will suffer more losses? Keep that in mind, as we keep looking. 

Does a receiver really do his job? Here's a VERY recent report on distribution of funds by Irving Picard, the receiver for the Madoff Ponzi.  (I added the bold sections to prove a point)
A New York federal bankruptcy judge approved a request by the trustee liquidating Bernard Madoff's now-defunct brokerage to make a second distribution to victims that could be as high as $2.4 billion.  The ruling by United States District Judge Burton Lifland clears the way for victims holding approved claims to receive a payment representing approximately 33.5% of their net investment with Madoff.  The expected distribution will dwarf the roughly 4% payment made last year that saw Irving Picard, the court-appointed trustee, unable to distribute a majority of recovered funds due to pending legal challenges.  If the timetable of the previous distribution  serves as any guide, victims can expect to receive a payment sometime in early October.

Note the 2 facts:

1) Irving Picard managed to pay out 39.5% of the all money put in by the victims back to the victims of Madoff Ponzi, which is to the tune of TENS OF BILLIONS of dollars. There may be more to come. If he can't return 100%, that's because Madoff spent the rest or gave it away to other people who spent it.  Remember, Madoff spent the money down to the bone. Out of 100+ billion he handled, he's down to 200 million when he confessed. So getting 40% back is some pretty AMAZING performance by Irving Picard as a trustee/receiver doing clawbacks.

2) The trustee (same as receiver) could have paid sooner, if less people have sued him and Madoff AND the SEC!  At least 4 groups sued the SEC, though they sued claiming SEC should have caught Madoff's scheme sooner, not to help Madoff restart his scam. Some tried suing Madoff and all the employees and family, but that's part of bankruptcy court and SEC did sent many of Madoff's collaborators to jail. Finally, some of those on the receiving end of Picard's clawbacks sued Picard, trying to stop the proceedings. They lost, but they managed to delay the Madoff case restitution. Remember, Madoff confessed back in 2008. Receiver is just now paying a second round, 4 years later.

And what is this ZteamBiz group of folks doing? They wanna sue the SEC for shutting the scam down. Yep, they want to DELAY the victims from getting paid.

But what exactly are they promising? Here's another quote from of the same e-mail:
Again, as with everything that has happened since the SEC illegally shut down our Zeek Rewards business, we are all VICTIMS of what the SEC has wrongfully and criminally done and continues to do. This is why we ALL (US, international, affiliates who made profits, affiliates who lost money) Zeek Rewards affiliates need to fight back for our legal rights by banning together and joining the law suit that we have put together through SNR Denton. 
It says "Zeek Rewards affiliate need to ... join the lawsuit (against the SEC) through SNR Denton".

So why does their website says this near the very top?

That's right, "SNR Denton dos not represent and does not have an attorney-client relationship with affiliates of Zeek... or with any individual or party that chooses to provide funds to Fun Club USA."

So how exactly does Zeek affiliates "join the lawsuit" if the lawfirm says "does not have an attorney-client relationship with affiliates of Zeek" or any one donating money, hmmm?  The disclaimer says "you are NOT a part of the lawsuit. We don't represent you, just Fun Club USA".

So who's really benefiting from this alleged lawsuit?

They for one. You're giving them money. Right?

But consider, who really REALLY benefit from the lawsuit, if previous lawsuits only served to DELAY the payout to the victims?

The "victims" who were not victimized, of course. That's right, people who took more money out than they put in. At the minimum, that means the top affiliates who, according to Zeek's own red carpet event, took out "1 million a month". There's twelve of them.

Which perfectly fits their argument in the first part about "funds in transit", that the smaller group should get their money back, so the bigger group will get less compensation.

I have been informed that 12 people will be meeting with SNR Denton "representing the group". Coincidence?


They used fear to disguise their true motives, in both cases.

In the first case, they used fear to imply that receiver don't care about victims. In reality, the receiver has responsibility to ALL victims, not just those who handed in their money late.

In the second case, they used fear to imply the receiver will steal the money and waste the money and benefit from the money, when in reality, much of the money (every penny possible) will be return to the victims.

It is clear they are out to cause confusion for their own purposes, and one is likely to delay clawbacks and the overall restitution plan, which can only HURT most of the victims of a Ponzi scheme.

It is also IMPOSSIBLE for the lawsuit to succeed, as they lack standing. They have no ownership interest, and thus, they have NO standing to sue SEC as the only one who had standing, Paul Burks, already plea "no contest" for himself and RVG.

So anyone donating to this "cause" is giving their money away to an impossible cause presented as possible. That is fraud in itself. They *know* it won't work, but they want your money any way, by pretending it'll work just fine, because they hired a lawfirm that is quite big and offices around the world (but they are only hiring one attorney).

And these people are using fear to peddle their false hope to victims of a Ponzi, when in reality they are out to only benefit the people who will be affected by the clawbacks. 

that use lies to propagate fear and push their own agenda

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