Haskell Knight, higher recognized within the MLM business as Trey Knight, has been indicted on three felony counts of wire fraud.
Trey Knight (proper) appeared on BehindMLM’s radar in 2020, as founder and CEO of Navan World.
Knight made a reputation for himself within the Fortune Hello-Tech Advertising pyramid scheme.
Previous to the FTC shutting down FHTM, Knight left and joined Limu in 2011.
Knight, alongside together with his spouse Emily Knight (aka Emily Ricciardelli and Emily Fryer), had been indicted on Might sixth, 2021.
The sealed indictment particulars one depend of conspiracy to commit wire fraud and 4 counts of wire fraud.
As alleged in Trey and Emily Knights’ indictment, the fees stem from the formation of Udoxa in 2016.
Udoxa LLC was established on paper as a Wyoming restricted legal responsibility firm based mostly in Fort Value, Texas, that presupposed to promote dietary dietary supplements by community advertising, although the corporate by no means performed any precise gross sales.
The Knights funded Undoxa with help from an investor from Louisiana, recognized within the indictment as “JR”.
The Knights accepted $50,000 from JR ‘to start out Udoxa in change for a promise to repay that quantity plus curiosity’.
The Knights by no means paid Udoxa again, or any of the corporate’s different buyers.
Based on the DOJ, Trey Knight solicited
loans or funding capital for Udoxa … instantly or by third events, in phone conversations, e-mail conversations, and private conferences.
Haskell Knight would encourage such loans or funding by false and fraudulent representations that Udoxa had more cash available than it really did and {that a} rich businessman had pledged to take a position $3.2 million within the firm.
The checking account utilized by Knight to solicit funding was held in his spouse Emily’s title.
Haskell would supply falsified Udoxa checking account information with inflated balances and different falsified firm paperwork to potential lenders or buyers as assurance that Udoxa was an actual firm in wonderful monetary form.
To additional representations that Udoxa was a profitable MLM firm, Knight leased workplace house and arranged “firm paperwork”.
Haskell Knight, as a way to safe the lease for Udoxa’s workplace house, would submit falsified checking account information purporting to point out that the corporate had sufficient capital afford the lease every month.
When the payments got here he did not pay for both.
As a substitute of utilizing funds invested to construct Udoxa, the Knights used
the funds from Udoxa’s purported checking account largely to pay for items and companies unrelated to Udoxa and to cowl private bills equivalent to restaurant meals and bank card payments.
As time went on and promised returns did not eventuate, Knight’s buyers naturally grew to become anxious.
Haskell Knight would falsely inform involved lenders or buyers … that they’d obtain further returns on their Udoxa mortgage or funding or, in the event that they wished, an entire refund.
Emily Knight would write and signal unhealthy checks from Udoxa’s purported checking account, for which there have been inadequate funds, and place strop orders on checks after they’d been written, in order that payees wouldn’t obtain their cash.
Different techniques employed by Trey Knight to fend off buyers included
citing a non-existent lawsuit for management of Udoxa and different false and fraudulent excuses for nonpayment.
In April 2018 the Knights filed for chapter. Settlements had been reached with their buyers for “pennies on the greenback”.
These settlements nevertheless had been by no means honored.
After declaring chapter, Trey Knight continued to make “false and fraudulent excuses for nonpayment and lack of communication.
Knight informed one investor ‘he had been arrested and hung out in jail, although that was not true’.
The DOJ allege Knight grew to become conscious of an FBI investigation into him in March 2019.
The investigation prompted Knight to launch Navan World. Income raised by Navan World was used to pay Udoxa buyers.
In or about June 2020, after studying that the FBI investigation into his actions was ongoing, and in an try to cowl his tracks and cease the investigation with the false look of an trustworthy enterprise dispute, Haskell Knight lastly paid DD, JR, and WG in full for his or her Udoxa fraud losses.
Sadly for Knight you may’t undo wire fraud, even in case you handle to ultimately repay these you stole from.
Evaluate of Knight’s prison case docket reveals he was arrested in Louisiana on Might 18th.
Knight was appointed a federal public defender and was launched underneath situation he:
- give up his passport;
- is restricted to journey between the Center District of Tennessee and Center District of Louisiana;
- should keep away from all contact together with his victims and/or witnesses;
- is prohibited from possessing a firearm or different kind of weapon;
- “shall not institute any new enterprise enterprise or solicit any new enterprise investments with out approval of pretrial companies; and
- shall not get hold of any new line of credit score, together with enterprise loans, bank cards and so forth. with out permission of the court docket.
Sadly there may be a hiccup on following Knight’s prison case. On Might nineteenth Knight’s case was transferred to the Center District of Louisiana.
As I write this a brand new case hasn’t proven up on Pacer. Sometimes there may be just a few days delay however a complete week is odd.
I’ll examine again in every week and see if the transferred new case has proven up.
In the meantime, outdoors of Knight’s prison case, there are some attention-grabbing filings from NewAge Inc., father or mother firm of Knight’s previous MLM firm Limu.
In the present day NewAge Inc. personal Noni by NewAge and Ariix.
Ariix acquired Limu and related rights in 2019. In mid 2020 Ariix acquired MaVie.
NewAge Inc. wolfed up Ariix two months later in August 2020.
NewAge Inc. is a publicly traded firm. In a filed December 2020 10-Okay submitting, NewAge particulars enterprise transactions with Trey Knight by Ariix.
The primary is a secured promissory observe for $1.1 million between Trey Knight, cited as “100% shareholder of Verdure Holdings USA, dba Navan World” and Ariix LLC.
The secured promissory observe pertains to Ariix’s buy of property from Knight and Nevan World.
The secured promissory observe was issued on July twenty ninth, 2020, giving NewAge till July twenty eighth, 2021 to pay Knight.
The asset buy settlement isn’t filed however we do have a December 2020 signed royalty settlement between Knight and NewAge.
As per the settlement, NewAge Inc. bought what was left of Nevan World (together with its affiliate database) for $500,000.
The royalty settlement stipulates Knight will obtain a lower of Navan World affiliate gross sales of “NewAge merchandise” for 3 years.
Knight’s royalty lower is decided by how a lot in gross sales income former Navan World associates make:
- if the Navan World associates promote lower than $3 million yearly, Knight’s royalty lower is 0%;
- if the Navan World associates promote between $3 million and $8 million yearly, Knight’s royalty lower is 3%; and
- if the Navan World associates promote over $8 million yearly, Knight’s royalty lower is 4%.
Knight’s whole royalty lower is capped at $1,250,000.
There’s additionally this ambiguous settlement clause, referencing a “Matching Bonus”;
As well as, Knight shall have the chance to earn a bonus based mostly on Gross sales as detailed in that sure Matching Bonus Settlement between the Events of even date.
This implies Knight may additionally be given an affiliate place inside NewAge.
The date of the secured promissory observe is simply after Knight repaid his Udoxa buyers and lenders.
Thus it appears unlikely NewAge funds had been used, no less than indirectly.
Keep in mind on the time Knight was totally conscious of the FBI investigation into him.
Whether or not he disclosed that to NewAge is unclear. Additionally unclear is whether or not Knight, who had a penchant for doing so, misrepresented the present standing of Nevan World previous to reaching agreements with NewAge.
One thing for NewAge’s attorneys to chew over I’m positive.
Within the meantime keep tuned for my case examine subsequent week. Hopefully the Louisiana case pops up by then, in any other case I may not be capable to monitor the case going ahead.
Replace sixteenth June 2021 – Haskell Trey Knight and his spouse Emily have plead not responsible.