NORTH CAROLINA ATTORNEY GENERAL WARNS: Watch For ‘Reload Scams’ In Wake Of Zeek Collapse

UPDATED 4:06 P.M. EDT (U.S.A.) It happened after the collapse of AdSurfDaily in 2008 — and it’s happening now in the aftermath of the collapse of Zeek Rewards amid spectacular allegations by the SEC Friday of Ponzi and pyramid fraud.

The office of North Carolina Attorney General Roy Cooper issued a warning minutes ago about “reload scams” aimed at taking advantage of Zeek victims.

Here is the warning in its entirety (italics added):

Reload scams hit consumers when they’re down, offering to help them make back money they lost to a previous scam or bad business decision. These scams have been popular for years with telemarketing fraud rings but can also follow other types of fraud.

We’re now seeing reload scams seeking to recruit consumers who were members of Zeekler, a penny auction website headquartered in North Carolina that shut its doors last week and entered into a settlement with the U.S. Securities and Exchange Commission. The SEC determined that Zeekler was a Ponzi scheme, using money from later investors to pay back earlier investors until the scheme started running out of money. The Attorney General’s Office is continuing to investigate Zeekler.

Blogs, news releases online, and individuals leaving comments in articles about the Zeekler shut down are already touting opportunities “for those that are looking for something that can help them replace the income they were receiving from Zeek Rewards.”  If you’ve been a part of a scheme such as Zeekler that collapsed, or if you lost money to another recent scam, don’t fall for a reload scam.  Better to cut your losses than lose even more.

The exact phrase quoted by Cooper’s office in the paragraph above appears in a news release for something called TheMayDayReport.

The SEC called Zeek a $600 million Ponzi- and pyramid scheme that had affected more than 1 million investors. Cooper’s office opened a probe into Zeek in July, and the U.S. Secret Service also is investigating Zeek.

Over the weekend, the PP Blog received multiple spams aimed at Zeek threads. Purportedly from “Briant,” those spams promoted a “program” called Ultimate Power Profits. Like Zeek, Ultimate Power Profits has a presence on well-known Ponzi scheme forums such as MoneyMakerGroup.

Zeek’s former head cheerleader at MoneyMakerGroup — “mmgcjm” — also is the head cheerleader for Ultimate Power Profits at the forum.

On Friday — the same day of the Zeek collapse — an MLM “program” known as Vi-Tel Wireless (Vi-Tel) issued a news release to announce it was sponsoring a “Zeek Rescue Program.” Affiliates busied themselves heralding the purported rescue program across the web.

Vi-Tel called itself a “safe refuge.” Vi-Tel affiliates aimed sales pitches at websites carrying information on Zeek, leading to questions about whether reps were circling like vultures.  It was remarkably awful PR.

In other post-Zeek news, an auction “program” known as Bidify now is offine. The company says it is trying to retool itself in the aftermath of the Zeek collapse.

Like Zeek prior to the collapse, Bidify denies it is an investment program.

Zeek, Rex Venture Group LLC and operator Paul Burks were charged Friday with selling unregistered securities as investment contracts.

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13 Responses to “NORTH CAROLINA ATTORNEY GENERAL WARNS: Watch For ‘Reload Scams’ In Wake Of Zeek Collapse”

  1. When is the government going to realize that cutting off the head of the snake does not kill the snake. When are they going to go after the big promoters that keep fueling these ponzi schemes?

    They need to start chopping the whole snake up and these big promoters like Robert G and Larry F. will find that they no longer can continue to promote these schemes and get away with it.

    These promoters with the large downlines are the fuel that makes the fire so its time for the Feds to turn off the fuel.

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  2. Ironically, my sister got into Zeek in order to make up losses from failing in an MLM venture not too long ago.

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  3. Jack Arons: When are they going to go after the big promoters that keep fueling these ponzi schemes?

    If you know the names of any of these “big promoters, then they are not the big promoters who are behind these things.

    Think Patricks’ “steroidal puppeteers”

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  4. littleroundman:
    If you know the names of any of these “big promoters, then they are not the big promoters who are behind these things.Think Patricks’ “steroidal puppeteers”

    Not sure I agree completely. There are insiders that do not need to promote because they are positioned so well in the comp plan or had early access.

    But I know 4 of the so called “top 12 affiliates” and they were all aggressive promoters and they all have > 1 million VIP points. The numbers from the 2011 IDS, assuming that is accurate, fits with what I know of these 4 affiliates as of Dec 2011, meaning there were no other affiliates with significantly more points than these 4.

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  5. Jimmy: But I know 4 of the so called “top 12 affiliates”

    I would argue you, in fact, know the names of 12 people who have allowed themselves to be named as top 12 affiliates”

    IOW, front men for those behind the scenes who are REALLY making big money.

    Theory ???

    Yep.

    But I simply can not bring myself to accept Paul Burks / Andy Bowdoin / Charis Johnson et al came out of nowhere to carry out some of Americas’ biggest ever ponzis without massive amounts of behind the scenes manipulation.

    I look at the, what is the latest estimate, $600million ? and I can’t help but think of the hundreds, if not thousands of ways someone could rake off a lazy $10 million or so without a snowballs’ chance in hell of being caught.

    And that’s without being a criminal gang and is based solely on an amateurs observation of the “scene” over a relatively short period of time.

    It would take YEARS of investigation by highly qualified, dedicated team of investigators with unlimited powers and access to track down all the transactions made during the life of the Zeek fraud, if, indeed it were even possible to do so.

    It’s not likely, for example, a criminal would register under his/her name, use a traceable bank account or restrict him/herself to a single membership.

    Nah, I think I’ll stick with Patricks’ steroidal puppeteers being the “real” criminals here.

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  6. I think the point that LRM is making is that, although we know about the Ken Russos, Bob Guenthers, Todd Disners etc of this world, behind them, at the source of many illegal schemes are a group of discrete men and women who get these “industsry leaders” into the schemes along with their downlines, but they themselves rarely have much public exposure. They are the manipulators behind so many of these schemes – from whence comes Patrick’s description of them as Steroidal Puppeteers.

    In the event that the criminal sentencing of Andy Bowdoin is followed by further criminal charges against others who were instrumental in the “success” of ASD, I imagine we will all be suprised at the names that come up. They may well not be those who shouted loud!

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  7. Does not the U.S government have the greatest ponzi scheme called Social Security? Why are people not doing something about that? I fail to understand why some people get angry over people using their own money to get into something on the internet,but say nothing when the government doing something that will hurt everybody.

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  8. Brian: Does not the U.S government have the greatest ponzi scheme called Social Security?

    One of the oldest deflections on the books, Brian. It surfaces in scheme after scheme that has an MLM component — ASD and Zeek, for two examples.

    Brian: I fail to understand why some people get angry over people using their own money to get into something on the internet

    It’s because they’re getting paid from other people’s money in an illegal shell game that causes unqualified misery to tens of thousands of people at a time and potentially makes them defendants in court actions.

    Brian: but say nothing when the government doing something that will hurt everybody.

    If you want to rail against Social Security because you somehow believe that it is helpful to Zeek, have at it. This Blog, however, covers Ponzi schemes, securities fraud and online crime.

    Patrick

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  9. Great stuff thanks for keeping us up to date

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  10. admin: One of the oldest deflections on the books, Brian. It surfaces in scheme after scheme that has an MLM component — ASD and Zeek, for two examples.

    That is not a deflection it is putting things in perspective. The government ponzi scheme is going to hurt all of Americans when it comes crashing down.

    It’s because they’re getting paid from other people’s money in an illegal shell game that causes unqualified misery to tens of thousands of people at a time and potentially makes them defendants in court actions.

    And these are people who chose to do so with their own money as well…..they did not ask for the government to do anything. The government is like an uncontrolled elephant…it tramples friend and foe alike. People must learn to solve problems on their own without running to the government like a little child every time they see something they don’t like.

    The Federal Reserve does more harm than all ponzi schemes put together.

    If you want to rail against Social Security because you somehow believe that it is helpful to Zeek, have at it. This Blog, however, covers Ponzi schemes, securities fraud and online crime.

    Patrick

    Are you at least as expressive and more concern about the government’s ponzi scheme than the ones that this site discusses about even if you don’t discuss it here?

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