URGENT >> BULLETIN >> MOVING: Charles Schwab Accounts Holding Nearly $18.6 Million In Name Of Accused Zeek Operator Paul Ray Burks Or Rex Venture Group Have Been Frozen

URGENT >> BULLETIN >> MOVING: (UPDATED 12:16 P.M. EDT (U.S.A.) The office of the corporate counsel for Charles Schwab in San Francisco has informed a federal judge that it is holding almost $18.6 million in two accounts linked to the alleged Zeek Rewards’ Ponzi scheme.

One of the accounts is in the name of Rex Venture Group LLC and has more than $10.3 million in cash and more than $4.94 million in securities, according to court filings. Rex Venture is Zeek’s purported parent company.

The second Schwab account, meanwhile, holds more than $2.3 million in cash and more than $1.3 million in securities, Schwab informed the court. The second account is in the name of Paul Ray Burks, Zeek’s alleged operator.

Schwab has “frozen” the assets in both accounts under court order, the firm said in a court filing.

Separately, North Carolina-based NewBridge Bank has certified in court filings that it is holding more than $11.64 million in an account under the name of Rex Venture Group LLC, Zeek’s purported parent company. Zeek announced suddenly on May 28 (Memorial Day) that it was closing its NewBridge account and advised members to cash checks before June 1 or they would bounce.

Why so much money remained in the account was not immediately clear.

Other court filings suggest that Rex Venture also had money on deposit at Four Oaks Bank & Trust Co. Inc., a bank in North Carolina. Four Oaks has asked the court to give it until Sept. 3 to comply with an order to specify precisely how much Rex had on deposit at the institution.

Extra time was needed because of the “complexity of the financial information that must be analyzed and the need to obtain relevant information from a third party,” the bank informed the court.

Four Oaks did not identify the third party.

When the U.S. Secret Service brought the AdSurfDaily Ponzi case in 2008, it was discovered ASD President Andy Bowdoin had more than $65.8 million in 10 personal bank accounts.

On Aug. 17, the SEC alleged that Zeek was a massive Ponzi- and pyramid scheme that had gathered about $600 million.

ASD operator Andy Bowdoin is scheduled to be sentenced tomorrow on a charge of wire fraud.

Zeek is known to have members in common with ASD. The U.S. Secret Service also is investigating Zeek.

 

 

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12 Responses to “URGENT >> BULLETIN >> MOVING: Charles Schwab Accounts Holding Nearly $18.6 Million In Name Of Accused Zeek Operator Paul Ray Burks Or Rex Venture Group Have Been Frozen”

  1. This story has some comments from some investors:
    http://www.goupstate.com/article/20120828/ARTICLES/120829700/1083/ARTICLES?Title=Receiver-Zeek-investors-could-tally-2-million

    Jesse Meyer, of Wisconsin, put in about $50 with Zeek Rewards and made about $500. Like most affiliates that profited, Meyer said he paid taxes on his earnings and filled out a 1099 miscellaneous income form.

    “I don’t see how they are going to take that back,” Meyer said. “I already paid taxes on it, and I don’t think I should have to pay it back.”

    Robin Snyder, a Zeek Rewards affiliate from Arizona, sent two cashier’s checks for $10,000 each to the company in mid-August. One of the check’s was deposited just two days before the company shut its doors, and the other has yet to be cashed.

    Snyder contacted her local bank to cancel the payments, but was informed she could not stop the transaction.

    “That check has been stolen from me,” Snyder said. “That is not their asset. It’s still my asset.”

    Snyder said she has also tried to file a “declaration of loss,” claiming her check was stolen.

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  2. Also, another lawsuit has been filed against Rex Venture Group LLC and Burks.
    http://www.ibtimes.com/articles/378254/20120828/zeekrewards-rex-venture-group-paul-burks-federal.htm

    The new class-action complaint was filed Friday by nine affiliates from Louisiana and Florida against Rex Venture Group LLC and Burks.

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  3. Just a note, a cashiers check is not the asset of the person who funded it, ever. The whole point of a cashiers check is that title to the funds separates from the person who bought it when the check is issued.

    So, sorry Robin Snyder, you’re wrong.

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  4. The Dispatch / Nash Dunn was first to cover this issue, and it’s covered in the Receivership FAQ as well.

    On another front, can someone look over my own “recovery Q&A” and see if there are more questions and answers to be added, as I am sure there are?

    http://kschang.hubpages.com/hub/Zeek-Rewards-Recovery-QA-all-sourced-from-news-reports-and-experts

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  5. Regarding cashiers checks, money orders, personal checks, in my opinion as an accountant/auditor, a person has the right to change his/her mind to make a stop payment as long as the checks/money orders/cashiers checks hasn’t been cashed yet….if the checks has been cashed already, then it is between zeekrewards and the Affiliates…..

    As an example, I issued several checks for donation for a substantial amount years back. However, before it was cash, I discovered that the person in charge together with some officers of the organization were stealing a large amount of the organization’s funds… After the discovery, I immediately made a stopped payment at my bank…. Some checks were cashed, the others were stopped by my bank… Now, does that mean that
    my check is owned by the receiver of my check?…. These people have been stealing from the organization, so why should I let them keep my money?…. Don’t I have a right to change my mind?….

    Sorry Greg, but I certainly don’t agree with you….

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  6. Read the court order, Winnie.

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  7. lol. winnie slinging the pooh. irony.

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  8. Winnie, winnie, winnie… You are thinking of recipient, not receiver.

    http://en.wikipedia.org/wiki/Receivership

    Your assignment, should you chose to accept it, is to figure out how you confused the two very different things.

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  9. You are right Mr. K.Chang….. I was under the understanding that Mr. Greg was talking
    About recipient in general… I have not read the court order, my apology…

    There’s one item that was missing and not submitted to the court, the retiring of VIP points which is missing in item # 58-SEC complaint.

    VIP points are being retired every 90 days… Daily share of the profit pool is being retired every 90 days and everyday VIP points earned 90 days ago is retired… There is NO way affiliates can or will cash out their balance points… ZR will not run out of money because there is no withdrawing of funds on the total point balance… Many people don’t understand fully well how the compensation plan works… You want proof?… Let me know, I will scan it and email it…. One thing I am very sure, not everything we read in the papers are true and correct… I know how the government works…. I don’t believe that they will return the money to the people. If they do, it may be ten cents to the dollar, and it may take 5,10, 15 years….

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  10. the retiring of VIP points which is missing in item # 58-SEC complaint. IP points are being retired every 90 days

    The problem with that idea is majority of affiliates are “rolling over” 80% and cashing out only 20% of their RPP. Thus, points will NEVER decrease, ONLY increase.

    But you are missing the main point.

    There is no “profit” from the auctions (only 2% of revenue is not from affiliates). Affiliates are being paid with their own money. You keep saying “There is NO way affiliates can or will cash out their balance points”. PLENTY of people have taken out much more than they put in. It’s in the newspapers and announced by Zeek in their red carpet events. Some are supposedly earning ONE MILLION DOLLARS a month. If the cap is only 10000, how are they earning 1 million a month?

    As for your distrust in government, go look at the track record of receivers in Ad Surf Daily and even Bernard Madoff. What you believe is simply not even close to the truth.

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  11. Winnie Pijuan: There’s one item that was missing and not submitted to the court, the retiring of VIP points which is missing in item # 58-SEC complaint.

    No, Winnie, it’s not missing, at all.

    The S.E.C. complaint rests on the fact the whole thing was fake.

    There WERE NO “points”

    What there was, however, was a computer program which made it look like there were points.

    The payout was never based on the amount of “points” it just looked like it was.

    Mr Burks admitted he arbitrarily “made up” the daily payout percentages AND, what’s more he admitted <2% of Zeeks' money came from "outside" as in, the auctions and 98% of the payouts came about by returning members' money to them while pretending it was ROI.

    IOW, Zeek was nothing more than a couple of simulator programs.

    Even to the extent many of the "bids" were, in fact, a Zeek run computer script which simulated bids and simulated members' names.

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  12. And I bet of that <2% of "non-affiliate money" the majority of it came from affiliates buying retail bids as their own customer (use family, friend, or create a fake identify with a VISA gift card).

    On paper, this looks like external revenue source, but if it weren't for the matching VIP points, 20% commission, and ability to use a credit card, most of this 2% would never have happened.

    So the 2% is actually overstating the real revenue.

    It is almost impossible to associate retail bids made on behalf of or sponsored by an affiliate because the records show a different name/address/credit card. If Zeek wanted to extend the Ponzi, they should have done more 2x matching VIP points offers. They could have done all kinds of promo to inch up the real retail revenue… "when one of your retail customers wins an item, YOU WIN IT TOO! This is our 'they win, you win' promo. Yes, even if they win the new Mustang or Superbowl trip, YOU WIN IT TOO!". Think about the real and/or fake retail customers this would generate?

    Even Troy Dooly is now moving away from the "growing pains" line and agreeing with the skeptics at how inept and dumb the exec team was. Remember OFAC sanctions? A multi-million dollar company using freeconference.com and unable to mute all. Adsense blocks on the blog ("it's not enough we steal $600M, we want the inadvertant click revenue too!").

    If I lived in a parallel universe where ethics didn't matter, I would be really interested to see how far a group of anti-scam experts could take a Ponzi as an intellectual exercise. Zeek had the potential to be ginormous, but instead, they petered out at between $600M (or whatever the updated number is).

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