A federal judge has granted the Securities and Exchange Commission a default judgment against Trudy Gilmond, a top promoter for the ZeekRewards Ponzi scheme. Gilmond pocketed over $2 million from investors in one of the internet's most notorious investment frauds.
ZeekRewards, later confirmed as a massive Ponzi scheme, defrauded hundreds of thousands of investors globally. It promised daily returns through a "profit share" program tied to a penny auction website, requiring members to purchase "bid packs" to qualify for payouts. Gilmond worked directly with the company's founders from September 2011 until the scheme collapsed in August 2012. During that eleven-month period, she earned approximately $1.7 million in commissions and alleged profit-sharing payouts by convincing unsophisticated investors to buy into the program.
The SEC filed its lawsuit against Gilmond in 2015. She participated in the initial stages, filing an Amended Answer in February 2016. After that, Gilmond ceased all cooperation with the court.
She ignored repeated discovery requests from the SEC. She failed to appear for a deposition scheduled for November 7, 2016. Gilmond also made no initial disclosures, a requirement under federal law for civil litigants. Judge Richard L. Mullen set a series of deadlines for discovery between January and April 2017, but Gilmond missed every one of them.
Judge Mullen explicitly warned Gilmond that her continued failure to meet these deadlines would result in sanctions. She disregarded that warning as well.
On March 8, 2017, Mullen issued an order requiring Gilmond to explain why the court should not enter a default judgment against her. The deadline for her response was March 20. No explanation arrived from Gilmond.
By March 23, the judge had enough information to act. He granted the SEC's motion for default judgment.
This ruling means Gilmond lost the case without ever presenting a defense. The SEC no longer needs to prove its allegations at trial. The court decided against her based solely on her refusal to participate in the legal process.
Court records show the SEC made several attempts to contact Gilmond by email and phone. She responded at least once, acknowledging she knew about the scheduled deposition and had chosen not to attend or contest the case further.
Judge Mullen found Gilmond's obstruction particularly serious given her significant role in the ZeekRewards operation. She was not a minor participant. As a "senior field liaison," she worked directly with the founders and ranked among the scheme's most successful promoters.
Her refusal to cooperate prevented the SEC from completing its investigation into the fraud. It also hampered the agency's ability to understand any potential defense she might have mounted or to prepare necessary expert reports. She effectively forced the commission to litigate blind, then vanished when questioned.
Default judgments are rare in civil cases because they deny defendants their day in court. Courts typically enter them only when a party's obstruction becomes so severe that the legal process cannot continue without that party's participation. Gilmond's complete abandonment of her defense left Judge Mullen no realistic alternative.
The default judgment clears the path for the SEC to pursue recovery of the funds Gilmond obtained through the ZeekRewards fraud. She is now liable for these illicit gains.