This may be old news to some of you, but I’m finally getting around to writing about it. In June 2014, the receiver in the Zeek Rewards Ponzi scheme case sued the infamous MLM lawyer Kevin Grimes (and his law firm) for legal malpractice, negligence and breach of fiduciary duty. The lawsuit initiated by receiver Kenneth Bell names Kevin Grimes and the law firm Grimes & Reese PLLC, and alleges damages of $100 million. (A separate lawsuit against Howard Kaplan also makes similar claims.)
The lawsuit alleges that Grimes knew or should have known that Zeek Rewards “…was perpetrating an unlawful scheme which involved a pyramid scheme, an unregistered investment contract and/or a Ponzi scheme.”
The Securities and Exchange Commission sued RVG Venture Group, LLC (dba ZeekRewards) in 2012, alleging that it was a $600 million Ponzi scheme (also called pyramid scheme). Of course, up until that point, participants in the multi-level marketing industry were claiming that ZeekRewards was a legitimate and legal MLM. (That’s what the lawyers said, anyway!) The company was forced into receivership later that year, with the receiver seizing assets to attempt to pay back victims of the scheme.