UPDATE: Receiver Sets Stage For Clawbacks In Zeek Ponzi Scheme Case: Filings Provide Clues About U.S. States In Which Fraudulent Transfers Allegedly Occurred

These filings related to the alleged Zeek Rewards Ponzi scheme operated by Rex Venture Group LLC are appearing in federal court dockets in multiple states today. There are 94 federal judicial districts in the United States, and such a filing is possible in any district in which the court-appointed receiver believes Zeek Ponzi proceeds reside.

UPDATED 11:02 P.M. ET (U.S.A.) PP Blog reader “Tony” posted comments this morning about cases involving Rex Venture Group LLC popping up in federal courts beyond the Western District of North Carolina, home base of the SEC’s Zeek Ponzi scheme case and the court-appointed receiver. Rex Venture is the parent company of North Carolina-based Zeek.

Tony initially observed that he’d seen case numbers for Rex-related filings such as this one on Justia.com, a site that tracks court filings. Tony noticed Justia references to filings in the Western District of Arkansas and in Arizona.

It turned out that these two filings were only the tip of the iceberg. As the day proceeded, more and more references to filings began to appear on PACER, the public-access system for the federal courts.

The ASDUpdates Blog has been tracking the filings today. As of the time of this post, there appears to be more than 40 such filings in various federal districts in various states. That number could increase because there are 94 federal districts and the filings will occur in districts in which the Zeek receiver has traced assets linked to the scheme.

Receiver Kenneth D. Bell has said he intends to pursue clawback litigation against Zeek net winners in order to make victims of the alleged Zeek fraud scheme as whole as possible. The early math of Zeek suggests there were about eight losers for every Zeek winner.

The filings now appearing on the dockets today in various federal districts are yet another indicator of the massive scale of the alleged Zeek fraud, believed to be the largest Ponzi scheme in U.S. history based on the number of victims. That number is estimated in the neighborhood of 1 million.

In August, the SEC described Zeek as a $600 million Ponzi- and pyramid fraud.

Today’s filings are not lawsuits against individual Zeek promoters; those will come later, if the receiver and the promoters cannot negotiate a deal that will result in the return of sought-after funds. Today’s filings — in effect — are formal notifications to court officials in the various districts that the receiver may be operating in their districts under the authority of the federal court for the Western District of North Carolina.

Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina is presiding over the SEC’s Zeek case and the receivership.

Despite the SEC’s Zeek action, the HYIP universe continues to serve up wantonly destructive fraud schemes, thus potentially creating victims by the tens of thousands at a time. In many cases, the schemes are advanced by willfully blind hucksters, including hucksters who populate Ponzi scheme boards such as TalkGold and MoneyMakerGroup and race from scheme to scheme to scheme.

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6 Responses to “UPDATE: Receiver Sets Stage For Clawbacks In Zeek Ponzi Scheme Case: Filings Provide Clues About U.S. States In Which Fraudulent Transfers Allegedly Occurred”

  1. Looks like this negates the FCU position that Bell has no authority outside of North Carolina. I also like how Bell is addressing the “improperly served” Subpoenas by reissuing them and sending them 2 ways. I wonder if they ever expected that? What dill weeds they are!

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  2. Wizzard7: Looks like this negates the FCU position that Bell has no authority outside of North Carolina.I also like how Bell is addressing the “improperly served” Subpoenas by reissuing them and sending them 2 ways.I wonder if they ever expected that?What dill weeds they are!

    Yep,

    if I was going to take on a receiver, that’s not quite how I’d choose to do it.

    Announcing their intentions on a public forum just seems a little…..ah……bloody stupid, to me.

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  3. Good work Mr. Bell! Hopefully the parasites/profiteers will wake=up and smell the roses!

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  4. bob mercer: Good work Mr. Bell!Hopefully the parasites/profiteers will wake=up and smell the roses!

    …Or at least what is spread on the roses to get them to grow…!
    It is fascinating to watch Craddock, get everything wrong, all the time.A stopped clock is right more times than he is in any given period!

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  5. Story on The Dispatch:
    http://www.the-dispatch.com/article/20121207/news/312079984

    Bell said according to federal codes, he had 10 days to file case documents in any court district that could contain property he intends to recover.

    From this I think it is safe to assume that there are significant ponzi profiteers in all the places where he has filed these notices.

    On the subject of the subpoenas,

    “Some have objected to the subpoenas and have not provided anything so far,” Bell said. “We’ve had scores of people who have been very cooperative in providing documents and have entered into settlement negotiations.”

    “Eventually, we will be sending out more subpoenas to more people,” Bell said. “Obviously, on behalf of the vast majority of people, we are going to do everything we can to get money to share out to those who were victims of this.”

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  6. What’s been happening to overseas promoters?
    Has the receiver started clawback action / lawsuit to the ill-gotten Non-US people who made a reasonable profit?
    Any idea?

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