Judge Approves Settlements With Zeek Receiver, Says Agreements Are In ‘Best Interests Of The Zeek Victims’
“The Court has reviewed Receiver’s brief and proposed settlement and finds that the proposed settlement is fair and equitable and is in the best interests of the Zeek victims.” — Senior U.S. District Judge Graham C. Mullen, July 26, 2013
UPDATED 9:43 P.M. EDT U.S.A. If you’re from the camp that claims Zeek Rewards victimized no one, a federal judge set you straight today.
Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina has approved a motion by the court-appointed receiver to settle with certain Zeek winners at discounts. The judge deemed the agreements “fair and equitable” and “in the best interest of the Zeek victims.”
Mullen’s order applies to at least 136 winners who entered successful prelitigation settlement negotiations with receiver Kenneth D. Bell, who said the agreements provided immediate and concrete benefits to the receivership estate. The order is expected to cause about $1.8 million to flow into the Zeek estate over time, some of it immediately. Bell listed the “Settlement as % of Winnings” at 56.12 percent in a June 28 filing.
Bell is marshaling Zeek assets for return to victims.
Zeek “winners” of $1,000 or more who bypassed the springtime opportunity to settle now face the prospect of clawback litigation beginning sometime this summer. Records show that even some winners of less than $1,000 settled with Bell
In August 2012, the SEC described Zeek as a $600 million pyramid and Ponzi scheme. The purported Zeek “opportunity” operated through Rex Venture Group LLC, a North Carolina MLM firm.
Rex and Rex/Zeek operator Paul R. Burks duped members into believing that payouts averaging about 1.5 percent a day were legitimate, the SEC alleged.
Zeek’s business model was similar to AdSurfDaily, which the U.S. Secret Service and federal prosecutors described as a $119 million Ponzi scheme operating from Florida. The Secret Service raided ASD in 2008.
The Zeek scam created hundreds of thousands of victims, according to Bell. In April, he warned winners of ill-gotten gains that the time for court action is drawing closer.
See June 29 PP Blog story and Comments thread.
NOTE: Our thanks to the ASD Updates Blog.
