Dawn Wright-Olivares Of Zeek Rewards Sentenced To 7.5 Years In Federal Prison
Dawn Wright-Olivares.
BULLETIN: Dawn Wright-Olivares, the former COO of Zeek Rewards, has been sentenced to seven and one-half years in federal prison. The sentence was imposed by U.S. District Judge Max O. Cogburn Jr. of the Western District of North Carolina. The office of U.S. Attorney Jill Westmoreland Rose prosecuted Wright-Olivares for investment- and tax-fraud conspiracy.
Daniel Olivares, the stepson of Wright-Olivares and Zeek’s key programmer, also was sentenced today. Cogburn imposed a two-year prison term against Olivares, who was charged with investment-fraud conspiracy.
Both defendants had agreements with prosecutors and pleaded guilty in February 2014, more than two years in advance of the trial of Zeek operator Paul Burks. Burks, 69, was convicted by a jury in July 2016 on charges of mail fraud, wire fraud, conspiracy to commit both and tax-fraud conspiracy. No sentence date has been set.
Prosecutors said Zeek was a cross-border fraud that had gathered hundreds of millions of dollars operating over the Internet. Hundreds of thousands of victims were defrauded. Only TelexFree, another cross-border MLM “program,” may be larger when measured by the number of persons fleeced.
In addition to the criminal charges, Wright-Olivares, 48, and Olivares, 34, both of Clarksville, Ark., faced serious civil litigation from the SEC and from the court-appointed receiver in the Zeek case. The SEC accused them of keeping Zeek participants in the dark about a federal investigation and Zeek’s “imminent collapse” while accepting “substantial sums of money from the scheme.”
In the end, Wright-Olivares and Olivares ended up with nothing.
Before its August 2012 collapse in a pile of Ponzi rubble, Zeek tried to dupe people into believing they were not making an investment. Any number of current schemes are doing the same thing.
Among other things, the Zeek case shows that key executives aren’t the only people who risk prosecution for pushing online fraud schemes. In December 2015, the SEC charged alleged Zeek promoter Trudy Gilmond with fraud.
Separately, Kenneth D. Bell, the Zeek receiver, has been pursuing hundreds of millions of dollars in clawback claims against alleged net winners globally. Bell said he’d be in court today to present the sentencing judge letters from Zeek victims.
Jaymes Meyer, a Zeek payment vendor, last month was sentenced to 15 months in prison for obstruction of justice.
Full statement by prosecutors on the sentencing of Wright-Olivares and Olivares:
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ZeekRewards’ Former Chief Operating Officer And Former Senior Technology Officer Sentenced In Federal Court
CHARLOTTE, N.C. – U.S. District Judge Max Cogburn, Jr., sentenced Dawn Wright Olivares, 48, and Daniel C. Olivares, 34, both of Clarksville, Ark., to 90 and 24 months in prison, respectively, for their involvement in an $850 million Internet Ponzi scheme that promised victims a bogus return on investments, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.
The two Arkansas residents were associated with the Lexington, N.C. based Rex Venture Group, LLC (RVG), which owned and operated Zeekler and ZeekRewards. In addition to the prison term imposed, Judge Cogburn also ordered each defendant to serve three years under court supervision. The restitution amount will be set at a later date.
Michael Rolin, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) join U.S. Attorney Rose in making today’s announcement.
According to filed court documents and today’s sentencing hearings, from January 2010 through August 2012, Dawn Wright Olivares, her step-son, Daniel Olivares, and Paul Burks, the owner of RVG, conspired with each other and engaged in Ponzi scheme that raised more than $850 million through a sham internet-based penny auction company named “Zeekler” and its purported advertising division “ZeekRewards” (collectively “Zeek”). According to court records, the conspirators induced more than 900,000 victims – including over 1,500 victims in the Charlotte area – to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from its penny auctions, and that the public could share in such profits through investment in ZeekRewards. Court documents indicate that, at one point, the conspirators claimed that investors would be guaranteed a 125% return on their investment.
Court records show that the co-conspirators represented that victim-investors in ZeekRewards could participate in the Retail Profit Pool (RPP), which supposedly allowed victims collectively to share 50% of Zeek’s daily net profits. The co-conspirators did not keep books and records needed to calculate such daily figures. Instead, Burks simply made up the daily “profit” numbers. Contrary to the conspirators’ claims, the true revenue from the scheme did not come from the penny auction’s “massive profits.” Instead, approximately 98% of all incoming funds came from victim-investors, which were then used to make Ponzi-style payments to earlier victim investors.
In addition to promising massive returns on investments, the conspirators used a number of ways to promote Zeek to current and potential investors. For example, the conspirators hosted weekly conference calls and leadership calls, where participants could call in and listen to Burks, Dawn Wright Olivares and others make false representations intended to encourage victim-investors to continue to invest money and to recruit others to invest in Zeek. Burks and Dawn Wright Olivares also organized and attended “Red Carpet Events,” where victim investors came to hear details of the scheme in person. During these events, Burks and his conspirators made false representations about the massive retail profits generated by Zeek. They also used electronic and print media, including websites, emails and journals, to make false and misleading statements about the success of Zeekler to recruit victim investors.
As the Ponzi scheme grew in size and scope it became unsustainable and it eventually began to unravel as the outstanding liability resulting from the bogus 125% return on investment continued to rise beyond control. By August 2012, the conspirators fraudulently represented to the collective victims that their investments were worth nearly $3 billion, but had no accurate books and records to even determine how much cash on hand was available to pay such liability. Contrary to representations made to victim investors, at that time, the conspirators had only $340 million available to pay out investors.
According to court records, Dawn Wright Olivares was closely involved in the strategic operations and ultimately served as the Chief Operations Officer of Zeek. Dawn Wright Olivares also owned 95% of Wandering Phoenix, LLC, a company that she used, among other things, to receive payments from Zeek and RVG. During the course of the conspiracy, Dawn Wright Olivares and Wandering Phoenix received approximately $7.2 million in victim funds.
Daniel Olivares was RVG’s senior technology officer and was responsible for, among other things, database design, management and operations for Zeek. During the course of the conspiracy, Daniel Olivares personally enriched himself with victim funds totaling approximately $3.1 million. Other unnamed co-conspirators also personally enriched themselves with millions of dollars of victim funds.
Dawn Wright Olivares and Dan Olivares previously pleaded guilty to one count of investment fraud conspiracy. Dawn Wright Olivares also pleaded guilty to one count of tax fraud conspiracy.
In July 2016, a federal jury convicted Paul Burks of wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy, following a three-week trial. Burks is currently awaiting sentencing.
In making today’s announcement, U.S. Attorney Rose thanked the U.S. Secret Service and IRS-CI for investigating the case, and the U.S. Securities & Exchange Commission, Division of Enforcement for its assistance with the investigation.
The prosecution is handled by Assistant United States Attorneys Jenny Grus Sugar and Corey Ellis of the U.S. Attorney’s Office in Charlotte.
Additional information and updated court filings about this and related cases filings can be accessed at the district’s website: http://www.justice.gov/usao/ncw/ncwvwa.html.
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Source: https://www.justice.gov/usao-wdnc/pr/zeekrewards-former-chief-operating-officer-and-former-senior-technology-officer
Patrick
Finally, justice is served. Have fun in jail pretty lady. Won’t be able to bring all of your make up and fancy items with you which was bought with all the money you stole from everyone else.
Statement from the receiver, dated today:
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ANNOUNCEMENT FROM THE RECEIVER – September 13, 2016
On September 13, 2016 United States District Judge Max O. Cogburn, Jr. sentenced Dawn Wright-Olivares to 90 months in prison and Dan Olivares to 24 months in prison for their roles in the Zeek Rewards Ponzi and pyramid scheme. The Court considered their cooperation with the government in the successful prosecution of Paul Burks in handing down the sentences. I appeared before the Court and argued on behalf of the victims of these crimes, and presented to the Court letters from victims describing the impact that Zeek Rewards had on their lives.
You can read the press release of the United States Attorney’s office at https://www.justice.gov/usao-wdnc/pr/zeekrewards-former-chief-operating-officer-and-former-senior-technology-officer.
The sentencing of Paul Burks has not yet been scheduled. If you would like to submit a letter for the Court’s consideration at Mr. Burks’ sentencing please email it to HearingLetter@zeekrewardsreceivership.com.
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Source: Zeek Rewards Receivership Website: http://zeekrewardsreceivership.com/
Patrick
Now if we could just get the FEDS to go after the major promoters of these Ponzi’s by charging them criminally, getting convictions and prison time, and these will begin the death spiral to oblivion. Once the FEDS send a message that if you play you pay dearly, Ponzi’s will never get to the sizes they get to today. Only the small programs will exist and die before hundred of millions and billions are stolen. Or course making the payment processors pay heavy fines would also go a long way to ending these huge Ponzi’s.
It is going to be interesting to see what happens in TM, especially with the major promoters from the UK. I do expect the Receiver to send a subpoena to I.M. Bigg/Lloyd Dotson and Frank Calabro, Jr; at least I hope so. It just might send a warning to other wannabe’s major promoters of Ponzi’s.
As for Dawn, she got what she deserved. She conducted seminars/conference calls where she blatantly lied, and she KNEW she was lying. It’s what got her where she is today.
Let’s hope the Feds finally go after Payza and Payment World. They seem involved in all the online Ponzi schemes