Haskell Knight, better known in the MLM industry as Trey Knight, has been indicted on three felony counts of wire fraud.
Trey Knight (right) appeared on BehindMLM’s radar in 2020, as founder and CEO of Navan Global.
Knight made a name for himself in the Fortune Hi-Tech Marketing pyramid scheme.
Prior to the FTC shutting down FHTM, Knight left and joined Limu in 2011.
Knight, along with his wife Emily Knight (aka Emily Ricciardelli and Emily Fryer), were indicted on May 6th, 2021.
The sealed indictment details one count of conspiracy to commit wire fraud and four counts of wire fraud.
As alleged in Trey and Emily Knights’ indictment, the charges stem from the formation of Udoxa in 2016.
Udoxa LLC was established on paper as a Wyoming limited liability company based in Fort Worth, Texas, that purported to sell nutritional supplements through network marketing, though the company never conducted any actual sales.
The Knights funded Undoxa with assistance from an investor from Louisiana, identified in the indictment as “JR”.
The Knights accepted $50,000 from JR ‘to start Udoxa in exchange for a promise to repay that amount plus interest’.
The Knights never paid Udoxa back, or any of the company’s other investors.
According to the DOJ, Trey Knight solicited
loans or investment capital for Udoxa … directly or through third parties, in telephone conversations, email conversations, and personal meetings.
Haskell Knight would encourage such loans or investment through false and fraudulent representations that Udoxa had more money on hand than it actually did and that a wealthy businessman had pledged to invest $3.2 million in the company.
The bank account used by Knight to solicit investment was held in his wife Emily’s name.
Haskell would provide falsified Udoxa bank account records with inflated balances and other falsified company documents to potential lenders or investors as assurance that Udoxa was a real company in excellent financial shape.
To further representations that Udoxa was a successful MLM company, Knight leased office space and organized “company documents”.
Haskell Knight, in order to secure the lease for Udoxa’s office space, would submit falsified bank account records purporting to show that the company had enough capital afford the lease each month.
When the bills came he failed to pay for either.
Instead of using funds invested to build Udoxa, the Knights used
the funds from Udoxa’s purported bank account largely to pay for goods and services unrelated to Udoxa and to cover personal expenses such as restaurant meals and credit card bills.
As time went on and promised returns failed to eventuate, Knight’s investors naturally became anxious.
Haskell Knight would falsely tell concerned lenders or investors … that they would receive additional returns on their Udoxa loan or investment or, if they wanted, a complete refund.
Emily Knight would write and sign bad checks from Udoxa’s purported bank account, for which there were insufficient funds, and place strop orders on checks after they had been written, so that payees would not receive their money.
Other tactics employed by Trey Knight to fend off investors included
citing a non-existent lawsuit for control of Udoxa and other false and fraudulent excuses for nonpayment.
In April 2018 the Knights filed for bankruptcy. Settlements were reached with their investors for “pennies on the dollar”.
These settlements however were never honored.
After declaring bankruptcy, Trey Knight continued to make “false and fraudulent excuses for nonpayment and lack of communication.
Knight told one investor ‘he had been arrested and spent time in jail, though that was not true’.
The DOJ allege Knight became aware of an FBI investigation into him in March 2019.
The investigation prompted Knight to launch Navan Global. Revenue raised through Navan Global was used to pay Udoxa investors.
In or about June 2020, after learning that the FBI investigation into his activities was ongoing, and in an attempt to cover his tracks and stop the investigation with the false appearance of an honest business dispute, Haskell Knight finally paid DD, JR, and WG in full for their Udoxa fraud losses.
Unfortunately for Knight you can’t undo wire fraud, even if you manage to eventually repay those you stole from.
Review of Knight’s criminal case docket reveals he was arrested in Louisiana on May 18th.
Knight was appointed a federal public defender and was released under condition he:
- surrender his passport;
- is restricted to travel between the Middle District of Tennessee and Middle District of Louisiana;
- must avoid all contact with his victims and/or witnesses;
- is prohibited from possessing a firearm or other type of weapon;
- “shall not institute any new business venture or solicit any new business investments without approval of pretrial services; and
- shall not obtain any new line of credit, including business loans, credit cards etc. without permission of the court.
Unfortunately there might be a hiccup on following Knight’s criminal case. On May 19th Knight’s case was transferred to the Middle District of Louisiana.
As I write this a new case hasn’t shown up on Pacer. Typically there might be a few days delay but a whole week is odd.
I’ll check back in a week and see if the transferred new case has shown up.
Meanwhile, outside of Knight’s criminal case, there are some interesting filings from NewAge Inc., parent company of Knight’s old MLM company Limu.
Ariix acquired Limu and associated rights in 2019. In mid 2020 Ariix acquired MaVie.
NewAge Inc. gobbled up Ariix two months later in August 2020.
NewAge Inc. is a publicly traded company. In a filed December 2020 10-K filing, NewAge details business transactions with Trey Knight through Ariix.
The first is a secured promissory note for $1.1 million between Trey Knight, cited as “100% shareholder of Verdure Holdings USA, dba Navan Global” and Ariix LLC.
The secured promissory note pertains to Ariix’s purchase of assets from Knight and Nevan Global.
The secured promissory note was issued on July 29th, 2020, giving NewAge until July 28th, 2021 to pay Knight.
The asset purchase agreement isn’t filed but we do have a December 2020 signed royalty agreement between Knight and NewAge.
As per the agreement, NewAge Inc. purchased what was left of Nevan Global (including its affiliate database) for $500,000.
The royalty agreement stipulates Knight will receive a cut of Navan Global affiliate sales of “NewAge products” for three years.
Knight’s royalty cut is determined by how much in sales revenue former Navan Global affiliates make:
- if the Navan Global affiliates sell less than $3 million annually, Knight’s royalty cut is 0%;
- if the Navan Global affiliates sell between $3 million and $8 million annually, Knight’s royalty cut is 3%; and
- if the Navan Global affiliates sell over $8 million annually, Knight’s royalty cut is 4%.
Knight’s total royalty cut is capped at $1,250,000.
There’s also this ambiguous agreement clause, referencing a “Matching Bonus”;
In addition, Knight shall have the opportunity to earn a bonus based on Sales as detailed in that certain Matching Bonus Agreement between the Parties of even date.
This suggests Knight might also be given an affiliate position within NewAge.
The date of the secured promissory note is just after Knight repaid his Udoxa investors and lenders.
Thus it seems unlikely NewAge funds were used, at least not directly.
Bear in mind at the time Knight was fully aware of the FBI investigation into him.
Whether he disclosed that to NewAge is unclear. Also unclear is whether Knight, who had a penchant for doing so, misrepresented the current status of Nevan Global prior to reaching agreements with NewAge.
Something for NewAge’s lawyers to chew over I’m sure.
In the meantime stay tuned for my case check next week. Hopefully the Louisiana case pops up by then, otherwise I might not be able to track the case going forward.