EDITORIAL: The ‘Zeek-Step,’ The Stepfordian Shuffle And The Stalinist HYIP

On Jan. 22, 2011, nearly two years ago and long before the SEC brought the Zeek Ponzi scheme case in August 2012, the PP Blog proposed a new term in an effort to distill the economic and logistical nightmares of viral Internet crime to their essence: fraud creep. This followed our Dec. 12, 2010, post, which explained that America’s largest sports stadiums may not be large enough to accommodate all the victims of a single, web-based crime.

Today the Blog is proposing another new term: Zeek-step, also known as “The Stepfordian Shuffle.” Zeek-step gets its name from the collapsed Zeek Rewards “program,” a 1.5.-percent-a-day ROI abomination (with accompanying recruitment commissions) boosted in part by serial MLM racketeers and Ponzi-forum criminals who pretended the 2008 AdSurfDaily Ponzi case never happened.

To do the Zeek-step is to pretend the ASD Ponzi case brought by the U.S. Secret Service more than four years ago is meaningless. At the same time, the Zeek-step is characterized by post-complaint efforts to demonize the SEC and the receiver — and to paint Zeek as a noble enterprise, the sender of a high tide that would lift all MLM boats. The trouble with that claim is that the purported high tide appears to have sunk more than 80 percent of vessels that sought to navigate the Zeek waters.

If you’re a Zeek victim — and if you’re unfamiliar with the ASD case — you should acquaint yourself with it right away. “Programs” such as ASD and Zeek were cancers on the global marketplace. The math of such schemes is approximately this: 86 percent of participants will become “losers” who subsidize enormous “profits” for a super-class consisting of about 14 percent — the “winners.”

There may be 1 million or more victims of Zeek, according to court filings. Putting it another way, Zeek could fill the Rose Bowl to capacity with victims about 10 times over. The logistical challenges confronting the court-appointed receiver in the Zeek case may be unprecedented. So, yes, Zeek was an instance of fraud creep. The ASD case — large for its time four years ago with about 100,000 members — has been dwarfed by Zeek.

Protecting The Super-Class

Although the Zeeks of the world often are positioned as the byproduct of ingenious Democratic Capitalism even as critics incongruously are dismissed as Communists, Socialists, Nazis and enemies of the “free market,” the fact remains that “programs” such as Zeek are designed to channel huge sums to a super-class that largely is preordained. If Zeek were a political entity, this super-class would be seen as a Soviet-era Politburo. The rest of the field would consist of peasants who keep the uppermost Stalinists in fine liquor and cigars.

One of the chief incongruities of “programs” such as Zeek is that “defenders” invariably position themselves as visionary Capitalists and rail against Statism — indeed, it’s axiomatic in HYIP schemes that a government agency that stops a scheme will be described as evil — and yet the “programs” being defended are all about keeping the Stalinists in their Chaikas and dachas.

One way to view Zeek is as a for-profit enterprise that taxed 86 percent of its participants at 100 percent to create the “profits” for the elitist 14 percent. It is likely that some of the people among the 14 percent paid ZERO DOLLARS to Zeek. Zeek was particularly noxious because it planted the seed that MLMers without big lists still could profit by sending the company up to $10,000 and generating a profit over time from an abomination known as the Retail Points Pool.

The SEC said Zeek manipulated the numbers to make that appear possible, to make it appear as though Zeek were a profitable enterprise capable of paying a return of 1.5 percent a day to potentially millions of people. The Secret Service said ASD did the same thing.

Zeek was offensive at many levels, including the intellectual one. Most notable, in our view, is that purported Capitalists “defending” Zeek by railing against alleged Statism as practiced by the SEC don’t seem to make the connection that Zeek set things up to the maximum advantage of the Stalinists of the Electronic Age.

A Ponzi-forum huckster with a big list and practiced in the art of turning blind eye to every HYIP fraud scheme that comes down the pike had a decided advantage over, say, an 85-year-old Florida widow who maxed out her credit card to join Zeek because the huckster caused her to believe she’d have more to leave to her children and grandchildren when God called her home.

It is our hope that the SEC and the U.S. Department of Justice will act aggressively and quickly to oppose a motion filed Friday by certain members of the alleged Zeek Rewards Ponzi scheme to appoint an “examiner.”

Jordan Maglich of PonziTracker has a fine story on Friday’s filing. Could it be true that some Zeekers actually want to further deplete the receivership estate of resources that should go to true victims?

In the PP Blog’s view, embracing a story that Zeek was a legitimate Capitalist venture is to embrace a wicked myth. Hell, Stalin himself might have been the first in, seeing the beauty of how the profits could have propped up the Politburo. If the initial scheme that drove the vast majority of the profits to the elite Statists collapsed, he could simply have announced another five-year plan. PolitburoBids2.com?