The court-appointed receiver in the Zeek Rewards Ponzi-scheme case is reporting “significant progress” in securing assets for return to victims and says the estate has gathered approximately $325.1 million since the receivership began in August 2012.
As of 5 p.m. on July 29, Zeek victims had filed claims seeking about $287 million. The claims portal accessible though the receivership website will close Sept. 5, meaning the number could grow even higher — potentially by the tens of millions.
An estimated $290 million in fraudulent transfers occurred at Zeek, and receiver Kenneth D. Bell says he intends to file clawback litigation against both Zeek’s U.S. domestic and “foreign winners,” beginning as early as this quarter.
Bell advised the court that, on June 28, he deposited about $2.5 million seized by the U.S. Secret Service from Solid Trust Pay, one of Zeek’s ewallet providers. Another $3.6 million from NxPay is expected to be deposited soon — “and the Receiver is working with [the Secret Service] to investigate and secure additional Receivership assets that NxPay identified and are being held by its payment processor, LST Financial, Inc.”
Moreover, Bell said, the receivership — working with the Secret Service — recovered about $5 million from ePaymentAmerica and about $800,000 from PlasticCash.
Meanwhile, a “foreign account” that may contain $9.5 million still is under investigation by the receivership, and two other foreign accounts that may hold Zeek assets were discovered in the second quarter, Bell said. Those accounts also are under investigation.
Zeek operated as part of Rex Venture Group LLC of North Carolina. Court filings suggest that Zeek money flowed through at least 16 domestic and foreign accounts, not including the accounts of individual participants. Those accounts may number in the thousands.
Bell said he also may have claims against certain Zeek “third party-advisors, vendors and other service providers that knew or should have known” about Zeek’s inappropriate activities “and yet faciliated those activities for their own gain.”
Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina is presiding over the Zeek case, which was brought by the SEC last year.