BULLETIN: Zeek Asked To Supply ‘Documents’ To North Carolina Attorney General’s Office; ‘Concerns’ Over Zeek ‘Continue,’ Agency Says
“The complaints generally seek refunds and say the company has not lived up to its promises.” — Office of North Carolina Attorney General Roy Cooper, Aug. 7, 2012
BULLETIN: The Zeek “program” that marries an MLM scheme (Zeek Rewards) to a penny-auction site (Zeekler) is the subject of a state examination by the office of Attorney General Roy Cooper, the agency said this morning.
Cooper’s office did not provide specifics on what the examination would entail, but Zeek has been asked to provide “documents,” said Noelle Talley, a spokeswoman for Cooper.
“I can tell you that we continue to have concerns about Zeek Rewards and have asked the company to provide us with documents so we can examine its business practices,” Talley said.
Cooper’s office first expressed those concerns publicly in June, after Zeek’s Blog linked to a television station’s report that suggested Zeek had been deemed legal. No such determination had been made, Cooper’s office said at the time.
Meanwhile, Talley said Cooper’s office had set up “a recorded message about Zeek Rewards.”
Such recordings typically are made “when we get a high volume of calls about a particular issue or company,” Talley said.
News about the Zeek examination occurred against the backdrop of a Saturday (Aug. 4) Blog post by Zeek that blasted unspecified “North Carolina Credit Unions” for expressing concerns about the company to Zeek customers. Zeek is a a purported arm of Rex Venture Group LLC. Paul R. Burks is the chief executive officer of Zeek.
Talley declined to comment when asked about whether Cooper’s office was aware of Saturday’s post on the Zeek Blog, which accused the credit unions of slander and implied Zeek would penalize members who questioned the company in public.
But Talley did note that Cooper’s office had received complaints about Zeek and that “[t]he complaints generally seek refunds and say the company has not lived up to its promises.”
Zeek plants the seed that participants can receive a daily return of between 1 percent and 2 percent, but denies it is offering an investment program. The company also denies it is operating a “pyramid scheme.”
“Programs” such as AdSurfDaily have made similar claims and have had a similar payout scheme. ASD was accused in 2008 by the U.S. Secret Service of operating a massive online Ponzi scheme that had gathered $110 million and operated across national borders. ASD President Andy Bowdoin pleaded guilty to wire fraud in May 2012. Zeek is known to have promoters in common with ASD, a company that became engulfed in both civil and criminal litigation.
In 2009, Bowdoin was sued by some of his own members under the federal racketeering statute. That lawsuit was placed on hold because of all the other litigation piling up around ASD, which was named in at least three federal forfeiture actions and was the subject of a federal grand-jury investigation in the District of Columbia that led to the indictment of Bowdoin on charges of wire fraud, securities fraud and selling unregistered securities.
Like ASD, Zeek has a presence on forums referenced in federal court filings as places from which Ponzi schemes are promoted. Some Zeek members are promoting JSSTripler/JustBeenPaid, a “program” that claims it provides a return of 60 percent a month and may have ties to the “sovereign citizens” movement.
Consumers can access the state’s recorded message about Zeek by calling 919-716-6046.
Talley provided this transcript of the recording (italics added):
Thank you for calling the North Carolina Attorney General’s Consumer Protection Division about Zeek Rewards. We cannot tell you whether or not to invest or participate in Zeek Rewards or any other company.
If you would like to file a complaint with our office, you can either leave a message with your name and address after the beep and we will mail you a complaint form, or you can visit our website at www.ncdoj.gov for an online complaint form.
Specific questions about how Zeek Rewards works should be directed to the company itself. Again, the Attorney General’s Office cannot give you investment or legal advice, and we do not endorse any program or business. However, we always encourage people to do their own research before investing in any business. Many people have asked if we have received complaints about Zeek Rewards, and we can confirm that we have received several complaints. Thank you again for contacting our office.
Zeek has gone viral and is being pitched by some promoters of JSS Tripler/JustBeenPaid, an "opportunity" that purports to provide a return of 60 percent a month.
It appears North Carolina and ponzi scams go together like……anything that goes together repeatedly and well.
I wonder how Todd and Dwight feel about this inquiry? And when Dwight will file against the AG’s office….
The Ag’s recording uses the words invest, investing and investments concerning Zeek which I would think that is what they believe people are doing?
With this turn of events I believe the upper management will be looking for those cheap airline tickets out of the country and not do what Andy did and think they are above the law.
Aug 07 2012
Mr. Griffith,
Thanks for contacting WFMY News 2 with your inquiry about Zeek Rewards. We have not heard about the Attorney General’s request.
It is a story we will continue to look into.
Thanks for contacting WFMY News 2.
Devetta Blount
Executive Producer of News Assignments
dblount@wfmy.com
Office: 336.379.9316
Mobile: 336.706.4375
Twitter: @newsgodess
Don’t let them say this is just people who won auctions complaining, the report is about Zeek Rewards and NOT Zeekler.
Patrick,
Tory Dooly stated that Noelle Talley said Zeek Rewards had only 8 complaints, 23 inquires, and a number of phone calls asking about Zeek. However, Dr. Keith Laggos said something very different in the phone call Troy posted a few weeks back.
Beginning at 35:45 he says, “The State attorney’s may file a lawsuit against them for all of the complaints and this is a kick in the a**. The FTC caused problems for Zeekler by making sure they couldn’t get their credit cards open for a long time, their merchant accounts, by causing them discomfort using the bank accounts – they couldn’t process orders, couldn’t pay their commissions and that caused hundreds if not thousands of complaints (from affiliates) to state attorneys and the FTC.”
Is there a way to confirm eight complaints vs. hundreds or thousands of complaints.
The “eight” complaints in North Carolina shouldn’t be confused with the number of complaints files in other states or with any federal agency. That and last June there were nine complaints in North Carolina so I’m not sure how well founded either of those numbers are.
I’ve listened to Dr. Laggos’ Lyoness call a number of times and he’s clearly dissembling several things. He talks about the FTC taking actions against “penny auctions” and tries to imply that Zeek Rewards’ problems are the same problems a site like Quibids is facing which is clearly false. He says the FTC was trying to sever banking and credit card relations with all penny auction sites yet can use any card you like at Quibids (and Paypal to boot). He just wasn’t being honest enough to differentiate between the problems ZR is facing with banks from the regulatory issues of the industry as a whole (Troy does this as well to some extent).
I found it illuminating that Dr. Keith was making a $40k per month income as a ZR affiliate and while he didn’t state it directly but I doubt he purchased bids, he got staked as compensation for the glowing recommendation of the program he published in his Network Marketing Business Journal. It’s a good thing ZR isn’t any form of “investment” or else he might find himself in violation of section 17(b) of the Securities Act AGAIN.
I wish I could find myself being disappointed in how little difference there was between Keith’s Lyoness call and all the ponzi/pyramid calls I’ve listened to in the past, but I can’t. Incredible rates of return and nearly passive income is the common thread. But one of the things I took from his call is he is convinced that ZR will “lose momentum” and soon enough that he found this to be a good time to give up that cushy consulting gig.
With the way Laggo’s double-dipping for years (bendy morals) I wouldn’t trust his words too much.
However, “state’s attorneys” may refer to US Attorney’s Office, who is Federal and not state Attorney General’s office. Remember, it’s US Attorney’s office that went after ASD, though with help from AG’s office.
It’s also interesting that what “compliance” really means to Zeek.
For most, “compliance” regarding a company means how well company adheres to laws and regulations.
For Zeek, “compliance” actually means affiliates have to comply with their own rules, and NOT TO COMPLAIN when Zeek has problems, just wait for it to be resolved (if ever). Seems most of the “compliance” moves they came up with is aimed at the affiliates, NOT at themselves.
Hello Brad,
The eight complaints in AG Cooper’s office, I believe, is a reliable number. It’s also a relatively meangingless number, although I’ve noticed that some Zeekers already have seized on the number and are seeking to minimize it against the purported hundreds of thousands of members of Zeek.
This is supposed to cause the Zeek loyalists to think: “only” 8 out of 1.2 million — no big deal. Troy Dooly notes that he is “truly surprised” at the low number.
History shows, however, that the ASD probe by the Secret Service began with fewer than 12 complaints, including a few that came in to the FBI right before the Secret Service applied for the seizure warrants in August 2008.
One of the inquiries the FBI received was from the Gadsden County Chamber of Commerce, which earlier had lauded Andy Bowdoin as a jobs-creator but then began to question the math.
From Paragraph 60 of the first of the three known forfeiture complaints in the ASD case:
_______________________________________________________________
On or about July 24, 2008, a [Task Force Agent] received information from the Tallahassee Field Office of the Federal Bureau of Investigation (“FBI”) regarding complaints related to ASD. According to an FBI representative, the FBI had received three inquiries within the last two weeks in reference to ASD. An anonymous person called to say that he/she had sent money to ASD, but the ASD account was never credited. This person indicated that ASD customer service
does not answer the phone. A second individual said that his/her parents had deposited $4,000 into the ASD program and that he/she was worried because he/she believed it was a Ponzi scheme.”
_______________________________________________________________
From Paragraph 61:
“On July 25, 2008, a TFA received additional information from the FBI Internet
Crime Center (“IC3″) in reference to several complaints filed against ASD. At that time, IC3 had five (5) complaints on file from victims in Florida, Wisconsin, Pennsylvania and New York. The individual in Florida believed that Ad Surf Daily, Inc., a.k.a. ASDcashgenerator.com, was a Ponzi or pyramid scheme because it met all of the criteria based on the SEC’s website. The caller said he/she was aware of the 12dailyPro.com investigation and believed ASD was
conducting the same type of business.”
_______________________________________________________________
Paragraph 61 goes on to reference SolidTrustPay and AlertPay — mind you, this was FOUR years ago.
Here is a snippet from Paragraph 62:
_______________________________________________________________
“While reviewing the ASD website in the District of Columbia, a TFA found a
posting within ASD’s News section, apparently posted by ASD on July 2, 2008. The title of the posting was, “Alert Pay & Direct Deposit are being phased out July 31, 2008.” According to ASD’s posting, “We have notified BOA not to accept cash or personal checks for deposit account – English or Spanish.” ASD further stated, “Please remember that the preferred method of purchasing Ad Packages is by mailing a Check or by Solid Trust Pay.”
_______________________________________________________________
I personally doubt whether the the complaint number in the “hundreds of thousands” (allegedly cited by Laggos) is true. But — for the sake of discussion — let’s say it is true. He’d be both repping and consulting for a company he knew had been the subject of more complaints than certain well-known U.S. cities have people.
Brad, if you study HYIPs, you’ll soon learn that they are not known for internal consistency. It is a world in which the adjectives often contradict the nouns. It’s often next-to-impossible to catalog all the incongruities — and the players ultimately retreat into an infinite set of contingencies that are designed to confuse matters even more.
Patrick
Thank you for the response.
I believe Laggos said “hundreds OR thousands” and not “hundreds OF thousands”. Just wanted to clarify.
Which brings up an interesting question: how come Fitzpatrick of PyramidSchemeAlert haven’t weighed in on this yet? He’s in NC, isn’t he?
How long do you think it will be until the NC AG reports their findings? What is your opinion on what those findings could be?
Patrick:
Have you looked at the bidify.com system?
They seem to be essentially identical to Zeek and a lot more slick and professional.
However, they appear to be distributing cash rewards that in a fashion that has all the indicators of being an unregistered security.
Just curious about your take.
ARWR
ARWR