BULLETIN: Zeek Receiver Issues More Than 90,000 Checks

breakingnews72BULLETIN: Kenneth D. Bell, the court-appointed receiver in the Zeek Rewards pyramid- and Ponzi-scheme case, says he has issued and mailed 90,297 checks “to Affiliates that hold Allowed Claims as their first interim, partial distribution.”

The SEC has decribed Zeek as a fraud scheme that gathered hundreds of millions of dollars.

The first round of checks are described as an “interim, partial distribution,” and total about $134.2 million, Bell said in a statement dated today on the receivership website.

About $23 million of the $134.2 million is required by law to be withheld for tax purposes, Bell said.

From the receiver’s statement (italics/bolding added by PP Blog):

This first interim, partial distribution represents, with certain limited exceptions, an amount equal to 40% of the Allowed Claims of all Affiliates holding Allowed Claims as of August 15, 2014, using the “rising tide” method of calculation previously approved by the Court.

Affiliates that are being mailed checks on account of the first interim, partial distribution have each filed a claim, had such claim determined by the Receivership Team, accepted that claim determination, and provided the required release and OFAC Certification to the Receivership team. These items are all required by the Court in order to have an Allowed Claim. If you met these criteria as of August 15, 2014, and your first interim, partial distribution is in excess of $100, you will receive a distribution check via mail.

If, as of August 15, 2014, you had not received a claim determination, had not accepted a claim determination, or had not provided the required release and OFAC Certification to the Receivership team, you did not hold an Allowed Claim on August 15, 2014, and were not eligible to receive a first interim, partial distribution. Additionally, if you held an Allowed Claim, but you would have received a distribution of less than $100, no first interim, partial distribution will be paid to you. You will be paid on account of your Allowed Claim in the future.

Additionally, approximately 70,000 Affiliates hold claims that will be allowed against the Receivership Estate if and when any of those Affiliates provide the required release and OFAC Certification to the Receivership team. All of these 70,000 Affiliates (or any additional Affiliates that receive and accept their claim determination prior to December 31, 2014) will be issued their first interim, partial distribution on January 30, 2015 if that Affiliate provides the required release and OFAC Certification to the Receivership Team by December 31, 2014. Affiliates whose claims become Allowed Claims after December 31, 2014 will receive their first interim, partial distribution on a subsequent distribution date.

We have 7,000 more claims to review. If you have not received your claim determination, please be patient; it is coming shortly. If you have already received a claim determination, or when you do, I encourage you to respond as soon as you are able and provide all the required information so that we can mail you your first interim, partial distribution on the next distribution date on which you are eligible.

If you have questions regarding whether your claim determination has been issued, the general status of your claim or to provide the required release and OFAC certification, please log into the following website: https://cert.gardencitygroup.com/zrwdet/fs/home.

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6 Responses to “BULLETIN: Zeek Receiver Issues More Than 90,000 Checks”

  1. Quick note: BehindMLM.com, currently offline in the aftermath of a DMCA takedown notice filed last week by TelexFree figure Faith Sloan, did a yeoman’s job covering Zeek Rewards.

    Sloan also promoted Zeek Rewards.

    All of BehindMLM’s Zeek coverage is inaccessible, owing to BehindMLM’s offline status.

    Patrick

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  2. Ponzi Tracker has this:

    Victim Lawyers Seek Lien On Ponzi Victim Distributions To Satisfy Contingency Fees
    http://www.ponzitracker.com/main/2014/9/30/victim-lawyers-seek-lien-on-ponzi-victim-distributions-to-sa.html

    A Louisiana law firm that signed up hundreds of victims in the aftermath of the $600 million ZeekRewards Ponzi scheme has now filed notice in a North Carolina federal court that it intends to assert charging liens against over $130,000 in interim distributions mailed out today by the court-appointed receiver. Marc Michaud, a New Orleans lawyer in the firm of Patrick Miller LLC (the “Law Firm”), filed a Notice of Attorney’s Charging Liens asserting “attorney’s charging liens and other privileges for legal services performed and costs incurred by Attorney in connection with the representation of the 404 Class 3 Claimants listed on Exhibit ‘A’.” According to the Notice, the Law Firm is owed $134,042.78 – constituting 25% of the interim distribution made to those claimants pursuant to contingency fee contracts entered into between victims and the lawyers.

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  3. It’s funny how the government withholds 30 percent tax on the payout. This money was basically stolen and the government is treating it like income. I am not saying it wasn’t a Ponzi scheme by any stretch of the imagination, but the government is taking advantage of the situation by taxing 30 percent on hundreds of millions of vested dollars. If I invested 100,000 dollars in a company on the stock exchange and the company was charged with fraud, would the government take 30 percent on all returned money to the victims. Would they, the government, actually care about the victims if they just did their jobs and got the money back by using the tax dollars already allocated from all the other taxes we pay? I am thinking not! I think they have their agenda’s and know they can get away with anything including siphoning off their cut of the cash regardless of it being taxable income.

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  4. Jason: It’s funny how the government withholds 30 percent tax on the payout.

    I’ve seen the 30-percent figure cited by one Zeeker, but it’s unclear whether it applied across the board. The discussion seems to suggest that no percentage was withheld from some Zeekers and that the average withholding in the first round of distributions was on the order of 17 percent.

    This may mean the distributions were based on profiles of the individual recipients as compared to Zeek tax records analyzed by the receivership.

    Please note this is guesswork on my part. Also please note that, if you received money from the receivership, you received a “distribution,” not a “payout.”

    Jason: This money was basically stolen and the government is treating it like income.

    There is no doubt it is a complicated mess, made worse by the alleged poor record-keeping at Zeek. The receivership, however, is not the government. At the same time, the receivership has to operate in a manner that addresses any tax concerns the government may have. In my view, Zeek was a quagmire that the receiver necessarily had to slog through.

    Dawn Wright-Olivares pleaded guilty to tax-fraud conspiracy. The very nature of the charge implies there were co-conspirators. So far, she is the only named member of the conspiracy.

    Jason: Would they, the government, actually care about the victims if they just did their jobs and got the money back by using the tax dollars already allocated from all the other taxes we pay? I am thinking not!

    I’m thinking the government stopped an investment-fraud and tax-fraud conspiracy in its tracks, thus demonstrating it cared for victims. The unfortunate reality of Ponzi schemes is that they cause emotional AND financial pain, and the victims end up sharing that pain.

    Why some AdSurfDaily members later would join Zeek after all the pain ASD created is one of the head-scratching mysteries of our time. Zeek was ASD — with a different mask.

    Jason: I think they have their agenda’s and know they can get away with anything including siphoning off their cut of the cash regardless of it being taxable income

    One of their agendas is to cut off international money-laundering operations before the cash disappears down the darkest of ratholes and ends up buying things such as human beings for the exploitation trades, vessels to transport narcotics and bombs and missiles (and such).

    Zeek was an HYIP, which may mean it was being used by money-launderers and racketeers external to the enterprise itself.

    You might want to think about that.

    Patrick

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  5. Quick note: Oct. 22, 2014. Receiver issues statement on the tax-withholding issue:

    ANNOUNCEMENT FROM THE RECEIVER – October 22, 2014

    I want to address the question many of you are asking about why a percentage was withheld from some distribution checks.

    On September 30, 2014 we mailed more than 90,000 checks to claimants as part of the first partial interim distribution. These payments were calculated to equal 40% of an accepted claim using the rising tide method of distribution previously ordered by the Court. For those claimants to whom checks were mailed that did not provide an IRS Form W-9 (for US residents) as requested on the claims portal we withheld a certain percentage for tax purposes. For non-US claimants a percentage was withheld whether or not an IRS Form W-8 was provided. I have heard from many of you that this withholding should not have been made because these distributions are not taxable. The tax laws on this issue are not entirely clear. We have attempted to get a definitive opinion from the IRS but have not yet been able to do so. Given this uncertainty we acted on the side of caution and made the withholding.

    If and when we receive assurance that withholding from distributions to Affiliates is not necessary we will send additional checks to those claimants from whom a withholding was made in the first interim partial distribution in the amounts that were withheld. For US residents, online completion of an IRS Form W-9 will allow us to send an additional check in the amount that was initially withheld. Click here to provide tax form.

    While I am gratified that we were able to send 90,000 Affiliates a distribution, there were approximately 48,000 claimants to whom I wanted to send a check but was not permitted to pursuant to the Court’s orders. If you have received a letter of determination, in order to be sent your first partial interim distribution, you must accept the determination (or have had an objection resolved) and complete the release and OFAC certification provided on the claims portal. At the end of January 2015 we will make a first partial interim distribution to those claimants with allowed claims who were not mailed a distribution check on September 30, if these steps are taken by December 31, 2014.

    Approximately 12,000 Affiliates with approved claims were not mailed a check because the amount would have been less than $100. It was not cost efficient for the receivership to mail these checks at this time. At the end of the receivership Affiliates holding approved claims due a payment of less than $100 will be mailed a distribution check.

    If you have questions regarding whether your claim determination has been issued, the general status of your claim or to provide the required release and OFAC certification, please log into the following website: https://cert.gardencitygroup.com/zrwdet/fs/home.

    I want to re-emphasize that these distributions are the first, and partial, distributions I believe you will receive. We continue to pursue and recover additional funds that will be distributed on later dates.

    Kenneth D. Bell
    Receiver

    Source: http://www.zeekrewardsreceivership.com/

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