BULLETIN: Special Master Compares Zeek Case To Madoff, Stanford And Enron
BULLETIN: With the MLM world only now coming to grips with the alleged $1.2 billion TelexFree Ponzi- and pyramid fraud, the special master in the Zeek Rewards criminal action has compared the Zeek case to the Bernard Madoff and Allen Stanford Ponzi schemes and the notorious Enron securities swindle involving former CEO Jeffrey Skilling.
Special Master Kenneth D. Bell made the comparison as a means of bringing some logistical efficiencies to the criminal case in which former Zeek executives Dawn Wright-Olivares and Daniel Olivares were charged in December 2013.
Like TelexFree, Zeek operated as an MLM HYIP “program.”
Bell, who also is the court-appointed receiver in the SEC’s civil case against Zeek, has proposed in his role as special master that the court impose electronic noticing procedures on the criminal side of things to keep victims informed.
The Madoff swindle, Bell noted, included “thousands” of victims. Stanford’s swindle, meanwhile, included “tens of thousands” of victims. So did the Enron case.
In each case, Bell noted, judges approved electronic noticing procedures because of the impracticality or downright impossibility of dealing with so many victims on an individual basis.
“In light of the vast number of potential victims spanning the globe in [the Zeek] case, it is difficult to envision a better candidate” for electronic noticing, Bell advised the court.
And, Bell noted, “[b]y many counts, the ZeekRewards scheme created more victims than any other Ponzi scheme in history. As a consequence of its internet-based focus, the scheme generated more than 700,000 victims in over 150 countries.”
Wright-Olivares and Olivares turned blind eyes to Zeek’s massive fraud, which gathered more than $850 million, according to court filings.
It is possible that the alleged TelexFree Ponzi/pyramid is even larger than Zeek in terms of both victims and dollars consumed, a circumstance apt to trigger alarm in the law-enforcement community because of the relentlessness and brazenness of the cross-border schemes. Until final TelexFree numbers become known, Zeek continues to hold the title of of the largest HYIP swindle in U.S. history.
As special master, Bell is proposing that the court permit noticing on both a U.S. Department of Justice website and the website of the Zeek receivership. Many Zeek victims already are familiar with the receivership website.
TelexFree figures James Merrill and Carlos Wanzeler were charged criminally last week. They’re also defendants in an SEC civil action.
The SEC charged Zeek in August 2012. TelexFree may have surpassed it in raw fraud volume less than two years later.
NOTE: Thanks to the ASD Updates Blog.
