BULLETIN: (UPDATED 2:04 P.M. EDT U.S.A.) The office of North Carolina Attorney General Roy Cooper told the PP Blog this morning that it never said the Zeek MLM or auctions programs were legal.
The agency said it had asked a local television station to issue a corrected report, and the station has removed a video report that Zeek was linking to from its Blog this morning.
“We do have concerns about [Zeek],” said Noelle Talley, a spokeswoman for Cooper.
Zeek has two arms: an MLM program known as Zeek Rewards, and a penny-auction site known as Zeekler. Zeek Rewards plants the seed that participants can earn a return of between 1 percent and 2 percent a day. The Zeekler arm is auctioning sums of U.S. currency and advertising that successful bidders can receive their winnings through offshore payment processors.
Zeek has denied it is operating either an investment program or a “pyramid scheme” through its Zeek Rewards’ MLM arm. It also claims to run clean penny auctions through Zeekler. Some customers, however, have complained they had not received their winnings of auction cash.
The TV station — WFMY Channel 2 — aired a video report that focused on a “penny auction craze.” The report, which made a passing reference to Zeek’s MLM arm, focused on Zeek’s Zeekler arm while explaining the concept behind penny auctions and the potential pitfalls. A Blog version of the station’s report references both company arms and notes that “a court has not yet ruled whether this operation is legal or illegal.”
WFMY’s video version, however, suggested that Cooper’s office had received a handful of complaints about the Zeek arms but had determined Zeek was conducting business legally.
No determination that Zeek is operating legally has been made, Talley stressed this morning.
The PP Blog learned this morning that Zeek’s news Blog was linking to the broadcast version of the WFMY report. The TV station now has removed the video, Cooper’s office said.
In another strange development, at least two Zeek affiliates have spammed the TV’s station’s website with offers for Zeek. One of the spams appears to have originated with Barbara Alford, a promoter of the AdSurfDaily Ponzi scheme and a former moderator of the pro-ASD “Surf’s Up” forum that mysteriously disappeared in 2010 after shilling for accused ASD Ponzi schemer Andy Bowdoin around the clock for more than a year.
Bowdoin pleaded guilty to wire fraud in the ASD Ponzi case last month. He is jailed in the District of Columbia. Zeek’s business model is similar to the model employed by ASD.
Cooper’s office supplied the PP Blog with a list of complaints the state has received about Zeek. (Note: The paragraphs below do not take into account all of the complaints Cooper’s office has received about Zeek. There are at least 10 complaints on file.)
One complaint that originated in Utah on May 16, 2012, alleged that a customer had given Zeek $20,000 in April but never received credit and was unable to get any satisfaction from customer service.
“The customer service is non existent and I am beginning to think Zeekler is a pyramid scam,” the customer told Cooper’s office.
Zeek responded to the complaint by informing Cooper’s office that it believed the Utah complainant wasn’t actually a Zeek customer. Rather, according to Zeek, the complainant was the father of two sons who were Zeek affiliates and had contacted the attorney general out of “personal curiosity.”
Another complaint received by Cooper’s office from a Florida man in November 2011 was forwarded to the Securities Division of the North Carolina Secretary of State’s office for review, according to the correspondence trail. No final outcome is noted.
Another complaint Cooper’s office received on May 8 originated in the District of Columbia after being sent to the Office of the Attorney General of District of Columbia by an individual in Oregon four days earlier. The District of Columbia forwarded the complaint to Cooper’s office, which opened a file.
“This is a Huge Ponzi scheme,” the sender complained. “If not [looked] at carefully and stopped by the US AG, [t]his would be a tremendous task to [sort] out to pay back the consumer. This is [n]o different tha[n] AD Surf Daily ([i]f you remember the [c]ase).”
Meanwhile, a Zeek customer in Miami contacted Cooper’s office and told the agency that he had sent U.S. Postal Service money orders totaling $1,000 to Zeek in April and that the sum never was credited to his Zeek account.
Yet another Zeek customer — this one from California — told Cooper’s office that he had wired more than $2,000 in March from his account at Bank of America to Zeek’s account at NewBridge Bank in North Carolina. Although the complainant said he’d confirmed both through his bank and NewBridge that Zeek had received the money, the money never got credited to his Zeek account.
The California customer also told Cooper’s office that Zeek closed his support ticket without providing a resolution, a circumstance that forced the aggrieved customer to open a second ticket.
Zeek announced suddenly on May 28 — Memorial Day — that it was closing its NewBridge bank account.
Another individual who contacted Cooper’s office suggested she’d also contacted her member of Congress, the IRS, the FTC and the SEC about Zeek and questioned whether a “whistleblower” award might be available if Zeek proved to be a scam. That communication identified several purported Zeek promoters, including former AdSurfDaily promoter Todd Disner.