Receiver Estimates That $290 Million In Fraudulent Transfers Occurred At Zeek; Clawback Litigation May Begin In Third Quarter; U.S. Domestic And ‘Foreign Winners’ Will Be Pursued; Victims Already Have Filed Claims Seeking $287 Million — With More Expected To Follow Before Sept. 5 Deadline

breakingnews72The court-appointed receiver in the Zeek Rewards Ponzi-scheme case is reporting “significant progress” in securing assets for return to victims and says the estate has gathered approximately $325.1 million since the receivership began in August 2012.

As of 5 p.m. on July 29, Zeek victims had filed claims seeking about $287 million. The claims portal accessible though the receivership website will close Sept. 5, meaning the number could grow even higher — potentially by the tens of millions.

An estimated $290 million in fraudulent transfers occurred at Zeek, and receiver Kenneth D. Bell says he intends to file clawback litigation against both Zeek’s U.S. domestic and “foreign winners,” beginning as early as this quarter.

Bell advised the court that, on June 28, he deposited about $2.5 million seized by the U.S. Secret Service from Solid Trust Pay, one of Zeek’s ewallet providers. Another $3.6 million from NxPay is expected to be deposited soon — “and the Receiver is working with [the Secret Service] to investigate and secure additional Receivership assets that NxPay identified and are being held by its payment processor, LST Financial, Inc.”

Moreover, Bell said, the receivership — working with the Secret Service — recovered about $5 million from ePaymentAmerica and about $800,000 from PlasticCash.

Meanwhile, a “foreign account” that may contain $9.5 million still is under investigation by the receivership, and two other foreign accounts that may hold Zeek assets were discovered in the second quarter, Bell said. Those accounts also are under investigation.

Zeek operated as part of Rex Venture Group LLC of North Carolina. Court filings suggest that Zeek money flowed through at least 16 domestic and foreign accounts, not including the accounts of individual participants. Those accounts may number in the thousands.

Bell said he also may have claims against certain Zeek “third party-advisors, vendors and other service providers that knew or should have known” about Zeek’s inappropriate activities “and yet faciliated those activities for their own gain.”

Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina is presiding over the Zeek case, which was brought by the SEC last year.

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5 Responses to “Receiver Estimates That $290 Million In Fraudulent Transfers Occurred At Zeek; Clawback Litigation May Begin In Third Quarter; U.S. Domestic And ‘Foreign Winners’ Will Be Pursued; Victims Already Have Filed Claims Seeking $287 Million — With More Expected To Follow Before Sept. 5 Deadline”

  1. Looking forward to the clawback action. Mr. Bell has been more than generous with Zeek profiteers. Yet the vast majority of profiteers seem to think the receiver is toothless. My fervent hope is that Mr. Bell pursues these people to the fullest extent of the law.

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  2. They *have* to believe that the receiver is toothless in order to keep their world view that what they do is “legal and profitable”. AND they have people like Kettner and Craddock and the rest leading them along by the nose (or the flute, if you prefer the pied piper version)

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  3. I live in Burlington, N.C. and just came by the former Zeek sales office which is now for lease. The Zeek office was operated by a woman who had been in previous ponzi/pyramid schemes. Her Zeek business, at one time, was so popular she charged $5.00 just to get in the door. Her profits from Zeek were very handsome so I am told.

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  4. Good news tonight. I understand within the next few months Mr. Bell, Zeek Receiver, intends to sue thousands of Zeek profiteers. Ever wonder how it would feel waiting to be shot?

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  5. “Bell said he also may have claims against certain Zeek “third party-advisors, vendors and other service providers that knew or should have known” about Zeek’s inappropriate activities “and yet faciliated those activities for their own gain.””

    Well if the HYIP defenders still dont take note of Mr. Bell’s comments, they have only themselves to blame. They are the enablers of all the HYIP and other ponzi schemes and Mr. Bell knows that.

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