Kenneth D. Bell, the court-appointed receiver in the Zeek Rewards Ponzi scheme case, said in a statement today that he had recovered nearly $300 million and that “[t]here may be tens of millions of dollars more of recoverable assets.”
On Aug. 17, the SEC described Zeek as a $600 million Ponzi- and pyramid scheme that had affected more than 1 million people.
Securing receivership assets has been his “first priority” since his Aug. 17 appointment by Senior U.S. District Judge Graham C. Mullen, Bell said.
Bell’s statement appeared today on the receiver’s website. He noted that clawback actions may be in the offing, although he didn’t specify when.
“Among those from whom we intend to recover assets are those affiliates who took more out of Rex Ventures than they put in,” Bell said.
Rex Venture Group LLC is North Carolina-based Zeek’s parent company.
“Many of you received little or nothing from this enterprise,” Bell said. “In order to make everyone as whole as possible, those who profited from participating should surrender their gains.”
And Bell said he was aware that bogus information about Zeek was spreading online.
“Finally,” Bell said, “I read in many emails and web postings that some affiliates claim to have spoken to me or the SEC. False information is being circulated by these claimants. I have not spoken to any of those claiming to have done so. I will communicate with you through this web site. If I could answer all of the hundreds of thousands of emails and calls from you I would, but obviously I can’t. I also recommend that you consider only what the SEC posts on its web site for its position on this matter.”
In an Aug. 27 statement, Bell said that his “early investigation shows that the number of victims could be double” the SEC’s Aug. 17 estimate of 1 million.
“By sheer number of victims, this is one of the largest, if not the largest, Ponzi scheme to go into receivership in U.S. history,” Bell said in the Aug. 27 statement.
Screen shot: I-Payout website showing logos of "Global Strategic Partners." Ponzi-forum reports surfaced yesterday that the Wealth4AllTeam HYIP scheme was using I-Payout. In July, a scheme known as "OneX' that federal prosecutors previously described as a fraud and a "pyramid" announced that it was transitioning to I-Payout.
UPDATE: Wealth4AllTeam, one of the many HYIP schemes pushed by Zeek Rewards “I Got Paid” cheerleader “Ken Russo,” reportedly was using I-Payout as a payment facilitator, according to new Ponzi-forum reports.
Wealth4AllTeam appears to have suspended operations, leaving the Ponzi forums in an uproar amid claims that it is transitioning to a new business model that incorporates something called “Project Genesis.”
“I-payout quick links has been removed….all the attached bank account has been deactivated..there is no option left to deposit or withdraw…Looks like W4all have a hold on I-payout,” MoneyMakerGroup poster “jhakas22” claimed yesterday.
If the report is true — and MoneyMakerGroup poster Tobwithu claimed that he (or she) “can confirm that all links at i-payout are gone!’ — then it means that Wealth4AllTeam was using the same facilitator to which the mysterious “OneX’ scheme claimed it was transitioning.
In April, federal prosecutors described the purported OneX “program” as a “fraudulent scheme” and “pyramid” pushed by former AdSurfDaily President Andy Bowdoin. ASD was a $119 million Ponzi scheme. In August, Bowdoin was sentenced to 78 months in federal prison.
On July 19, the PP Blog reported that OneX claimed it had dropped SolidTrustPay — a Canada-based processor linked to fraud scheme after fraud scheme — in favor of I-Payout. That announcement was made by “J.C.,” later identified by federal prosecutors as James C. Hill.
I-Payout’s website publishes the logos of HSBC, Deutsche Bank, Barclays and other “Global Strategic Partners,” including Bank of America.
(Also see June 20 PP Blog report about OneX claim that it was working with a processor with a tie to Bank of America. Given events that occurred after the dropping of Bank of America’s name and the appearance of the bank’s name on the I-Payout site, it appears “J.C.” was alluding to I-Payout in June.)
Any number of ASD Ponzi-scheme pushers used Bank of America’s name to sanitize the ASD fraud. In raising Bank of America’s name in June and announcing the I-Payout transition in July, OneX appears to have been doing the same thing.
Name-dropping to sanitize fraud schemes is common in the HYIP sphere. So are lawsuit threats and other bids to chill websites that publish information critical of HYIPs.
In July, Robert Craddock, a purported “consultant” for Rex Venture Group LLC — the operator of the Zeek Rewards MLM scheme — sought to have a HubPages site operated by Zeek critic “K. Chang” removed from the web by filing a complaint with HubPages about purported copyright and trademark infringement and libel. Craddock’s efforts succeeded temporarily.
In a bizarre Blog post on Aug. 4, Zeek claimed that “all” criticism of Zeek was unfair and planted the seed that unspecified “North Carolina Credit Unions” were circulating a purported “internal memo” that allegedly was “at once unfavorable to Zeek Rewards and false.”
The Zeek post, attributed to then-acting COO Gregory J. Caldwell, complained the credit unions were slandering Zeek and warned Zeek members to toe the company line.
Thirteen days later, the SEC filed an emergency court action that described Zeek as a $600 million Ponzi- and pyramid scheme.
Craddock now is involved in a purported effort to defend Zeek affiliates from clawback actions by the court-appointed receiver in the SEC’s Zeek case. That effort began after the SEC’s actions against Zeek and also included name-dropping. During a pitch for Zeek members to send in money, Craddock dropped the name of former Florida Attorney General (and former U.S. Rep.) Bill McCollum.
McCollum, now a partner at the SNR Denton law firm, no longer is in public office. Precisely why Craddock mentioned McCollum’s name is unclear, although Craddock initially said that the Zeek affiliates were hiring SNR Denton. That effort appears now to have fallen through.
As Florida’s Attorney General, McCollum sued ASD for fraud in August 2008. Some ASD members countered that McCollum should be sued for Deceptive Trade Practices for holding the view that ASD was a fraud. Although McCollum’s office later dropped the ASD lawsuit, it said it had gathered names of ASD fraud victims and provided them to the U.S. Department of Justice, which had established a remissions process through which ASD victims could receive compensation from proceeds seized by the U.S. Secret Service in the ASD Ponzi case filed at the federal level in the District of Columbia.
Zeek is known to have members in common with the ASD Ponzi scheme. Some Zeek members also promoted OneX, the scheme promoted by ASD’s Bowdoin after his December 2010 arrest by the U.S. Secret Service on Ponzi-related charges of wire fraud, securities fraud and selling unregistered securities.
Bowdoin told prospects that OneX was good for “college students.”
Kenneth D. Bell, the court-appointed receiver in the Zeek Rewards Ponzi scheme case, said in a statement today that he had recovered nearly $300 million and that “[t]here may be tens of millions of dollars more of recoverable assets.”