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Tag: Zeek

  • Grand Jury Was Meeting When Some Zeekers Waged Misinformation Campaign; Prosecutors Question Veracity Of Burks’ ‘Handwritten Notebooks’

    Paul Burks
    Paul Burks

    New filings by federal prosecutors in the criminal case against Zeek’s Paul Burks reveal that a grand-jury investigation was under way within days of the SEC’s Aug. 17, 2012, shutdown of the “program” and confirmation by the U.S. Secret Service that it also was investigating Zeek.

    Burks was subpoenaed by the grand jury on Aug. 24, 2012, and testified before the panel less than a month later, on Sept. 20, 2012, according to prosecutors. He ultimately was indicted by the grand jury in October 2014, more than two years after the August 2012 subpoena and his subsequent appearance the following month.

    Whether others within Zeek also had been subpoenaed or had knowledge of Burks’ appearance is unclear. What is known is that a group of Zeek members — during the same 2012 time period — embarked on a fundraising campaign while accusing the SEC of misleading a federal judge and admitting it had a weak case.

    One of the members of the group was Todd Disner, a former winner in the AdSurfDaily Ponzi scheme later identified as a major winner in the Zeek scheme. Zeek receiver Kenneth D. Bell has raised the issue of serial promoters moving from one fraud scheme to another.

    Bell specifically has referenced ASD. Federal prosecutors have, too.

    Given that ASD operator Andy Bowdoin is in federal prison for running a Ponzi scheme and Zeek’s “program” was similar to ASD in key ways, events at ASD could be problematic for Burks. How did Disner, for example, end up at Zeek?

    Despite knowing about ASD in 2011, Burks nevertheless moved forward with Zeek, prosecutors contend.

    The government is arguing that the ASD fraud put Burks on notice of his own fraud and that evidence pertaining to ASD should be admissible.

    Precisely what the government intends to introduce about ASD is unknown. But as part of his defense, Burks is asking U.S. District Judge Max O. Cogburn Jr. to exclude evidence about ASD.

    “This case is about Paul Burks, Rex Venture Group, Zeekler.com, and ZeekRewards.com,” Burks advised Cogburn in a June 28 trial brief. “It is not a referendum on direct selling or multi-level marketing programs. The trial of this case is not the time, or the place, for a jury to render a verdict on these types of companies or programs, which are perfectly legal yet regularly criticized.

    “It is also not about corporate malfeasance or wrongdoing by others, which is precisely what the Government seeks to convey to the jury by referencing ASD. Accordingly, the Government should be barred from any reference ASD, or any other entity whose conduct is completely irrelevant to the facts of this case. Even if there is some limited relevance to ASD (it is mentioned in government witness interviews), the Court should bar any mention of ASD since the limited probative value of such evidence is substantially outweighed by a danger of unfair prejudice, confusion, being grossly misleading, and inviting a trial-within-a-trial.”

    Burks’ trial on charges of wire fraud, mail fraud, conspiracy to commit both and conspiracy to commit tax fraud is scheduled to get under way July 5.

    We’re working on a story that will cover other elements of his defense.

    In a development yesterday, the government contended Burks withheld “purported” handwritten notebooks from the grand jury during his September 2012 appearance and didn’t turn them over until April 2016.

    Burks now wants to use the “unauthenticated” notebooks as a trial exhibit and as the basis for the opinions of expert witnesses he intends to call, prosecutors argued.

    “Defendant’s failure to produce these documents in response to the Grand Jury testimony, his testimony that he had produced all responsive documents, and the production of these Handwritten Notebooks on the eve of trial, without explanation, all raise serious concerns about the legitimacy of the Handwritten Notebooks,” prosecutors argued to Cogburn.

    NOTE: Thanks to the ASD Updates Blog.




  • BULLETIN: FEDS: Burks Ran Scam Prior To ZeekRewards

    breakingnews725BULLETIN: (4th Update 9:13 p.m. EDT U.S.A.) Accused Ponzi schemer Paul Burks ran a “pyramid scheme” known as FollowMe1X2 that was a precursor to ZeekRewards, federal prosecutors say.

    A quote about FollowMe1X2 that appears in a prosecution filing today also appears verbatim in a post on the MoneyMakerGroup Ponzi forum dated Sept. 4, 2010, by “charlieone.”

    From the quote: FollowMe1X2 is “a fast-paced network advertising program that was designed to maximize your ad budget, increase your businesses exposure and your bank account exponentially!”

    FollowMe1X2 collapsed and participants were ported into ZeekRewards, prosecutors said.

    Zeek also had a presence on MoneyMakerGroup and other boards referenced in federal court filings as places from which Ponzi schemes are promoted.

    Today’s prosecution filings against Burks, who faces trial next month on charges of wire fraud, mail fraud. conspiracy to commit both and conspiracy to commit tax fraud, come in the form of a “Notice of Intent to Introduce Evidence and Memorandum of Law in Support of its Admissibility.”

    The document is similar to filings against now-convicted Ponzi schemer Andy Bowdoin of AdSurfDaily, another Ponzi board “program.” In the ASD cases, prosecutors tied Bowdoin to scams both before ASD (DailyProSurf) and after (AdViewGlobal and OneX).

    ASD, another Ponzi-board “program,” collapsed in 2008. Like Zeek, ASD used vendors such as SolidTrustPay and AlertPay and purported to have an “advertising” function.

    Like Burks, Bowdoin was accused of porting participants from one scam to another.

    BehindMLM.com reported today that Burks is seeking to have the tax-fraud conspiracy charge against him dismissed prior to trial, scheduled to begin July 5. Prosecutors have not yet responded to his argument.

    But in their notice today, prosecutors argued that the jury should be able to hear evidence that Zeek parent Rex Venture Group LLC had not filed corporate tax returns between 2003 and 2011.

    It also should be able to hear evidence about the FollowMe1X2 scheme, prosecutors contended.

    NOTE: Our thanks to the ASD Updates Blog.

  • Certain International Zeek Members Due Distribution From Receiver Eligible To Receive Wire Transfer — But There Are Restrictions

    In a May 6 announcement, Zeek Rewards’ receiver Kenneth D. Bell shares important news with international Zeek members who have been unable to cash checks from the U.S.-based receivership estate.

    “Many foreign Affiliates have reported that they are unable to deposit or cash their distribution checks due to local banking fees and regulations. We filed a motion with the Court seeking a remedy for this problem so that all Affiliates, could receive their distributions,” Bell wrote.

    “On April 27, 2016, the Court entered an Order that permits the Receiver to pay certain foreign Affiliates by wire transfer in US Dollars. I sought this relief because various foreign Affiliates that were eligible to receive distributions contacted me to alert me to the fact that they were unable to cash the physical checks denominated in US Dollars that they had received. This relief will allow me to pay those foreign Affiliates who complied with the Court mandated process, but were otherwise unable to recover on account of their Allowed Claim because of their location.

    “If you are eligible to receive your distribution by wire transfer, my team will be sending you an email explaining how you may exercise the option to receive your distribution by wire transfer,” Bell continued. “However, if you are eligible to receive your distribution by wire transfer and you choose to do so, all of the fees and costs associated with the payment of the wire will be deducted from your Distribution (including without limitation the fees and costs associated with the sending of the wire by the estate, the receiving of the wire transfer by your bank, any currency conversion fee associated with converting the wire transfer from US Dollars to your local currency, any bank charges, and any canceled check fees incurred on account of any uncashed check which was previously issued to you. In addition, you agree to pay any costs associated with canceling uncashed checks previously issued to you). If you request a wire transfer and it is determined that the cost of the transfer will be greater than your Distribution, your Distribution will be sent by check.

    “In order to receive the wire transfer, you must submit all of the requested banking information via the Claim Portal. You must also give the estate a release in regard to any misdirected wire transfer caused by the entry of any incorrect banking information.

    “Wire payments will follow the same schedule as check Distributions and will not be made until the Release and OFAC have been submitted,” Bell wrote.

    Bell also announced that he will ask Senior U.S. District Judge Graham C. Mullen “this summer” for an order against more than 9,000 alleged Zeek winners sued in a class-action case for the return of their winnings.

    “We remain confident of success in that litigation, and that it will result in the collection of tens of millions of dollars for distribution to qualified claimants,” Bell wrote.

    The receiver also expressed hope that litigation against Payza, Payment World and Victoria Bank will conclude this summer and result in a recovery for the estate. (See Feb. 21, 2016, PP Blog Special Report that questions whether some of the Zeek money ended up in one or more collapsed Russian Banks after being transferred from Moldova.)

    “The bottom line is that we expect additional recovery of tens of millions of dollars for distribution in this year or next,” Bell wrote. “I’m sorry I can’t be more precise; litigation is slow and uncertain. You now know as much as I do.”

    Read Bell’s full statement, dated May 6, 2016, on the receivership website.




  • Battling Zeek-Related Malpractice Claim, MLM Attorney Kevin Grimes Now A New Partner At Thompson Burton

    “It is the biggest announcement I’ve ever made in my career.” — MLM attorney Kevin Thompson on the hiring of Kevin Grimes, Jan. 9, 2015.

    2nd UPDATE 5:35 p.m. ET U.S.A. Zeek Rewards receiver Kenneth D. Bell accused Idaho MLM attorney Kevin Grimes last year of providing “substantial assistance” to Zeek’s Ponzi scheme and, in effect, attempting “to put lipstick on the ZeekRewards pig.”

    Grimes, formerly of the now-defunct Grimes & Reese law firm, is battling Bell’s contentions that he engaged in legal malpractice, created a “bogus ‘compliance course’” and participated in “leadership calls” that helped sanitize Zeek.

    It is against this backdrop that Grimes, whom Bell is suing for $100 million, has landed at suburban Nashville’s Thompson Burton as a new partner after being flown in to discuss joining the firm. The announcement was made by managing partner Kevin Thompson in both text and video forms. The news appears first to have been published elsewhere on the MLMHelpDesk Blog of Troy Dooly.

    Dooly also encountered trouble owing to alleged Zeek ties.

    Thompson appears only to make an allusion to Zeek in the 4:28 YouTube video announcing the hire. But he mentions it directly in a Blog post at the Thompson Burton site.

    Grimes, whose qualities include experience and depth, is a good person and good lawyer who fosters at-risk teens and is “very open about his faith” and “very passionate about serving people,” Thompson said.

    A well-known MLM lawyer in a field often associated with PR blunders, Thompson appears not to be concerned that his 16-member firm whose practice isn’t limited to MLM could take a hit by bringing on Grimes with Zeek matters still unresolved. Three Zeek executives were charged with federal crimes in the aftermath of SEC civil actions in 2012 and 2013.

    “I’m excited for what this means,” Thompson said of the hiring of Grimes. “I think in the industry, iron sharpens iron. He can make me better; I can make him better. There’s some things that he’s not doing very well, such as communicating. He’s hasn’t communicated at all.  Most of you don’t even know who he is. We’ve got to fix that. So, you’re going to get to know him better. He’s going through some issues right now, and he’s dealing with them.  And there going to be a day when he’s not dealing with them and he can focus on doing what he does best. He’s been practicing for close to 25 years without any single bar complaints. So, he knows what he’s doing.”

    Grimes has not been named a defendant in the SEC’s civil actions and has not been charged with a crime. But Bell, the Zeek receiver, has alleged in court filings that Grimes missed important clues that something was seriously amiss at Zeek.

    The SEC has described Zeek as a combined Ponzi- and pyramid scheme that gathered hundreds of millions of dollars. Zeek insiders Paul Burks, Dawn-Wright-Olivares and Daniel Olivares have been charged criminally, with Wright-Olivares and Olivares already entering guilty pleas.

     

  • BULLETIN: Zeek Receiver Sues Nearly 2 Dozen Aussies

    breakingnews72BULLETIN: (10th Update 11:20 p.m. ET U.S.A.) Zeek Rewards receiver Kenneth D. Bell has sued nearly two dozen Australians, alleging they were “winners” in the Zeek Ponzi- and pyramid scheme and that money they received came from victims.

    Bell previously sued winners in the United States and Canada.

    One Aussie is alleged to have received nearly $827,000 through Zeek, a sum on par with some of the alleged top U.S. winners.

    All in all, the top Australian winners allegedly received a combined sum of more than $3.14 million.

    Here is a list of Australian defendants and their alleged winnings:

    Gert Bjerring, Gold Coast, Queensland, though a shell company known as Dancon Pty. Ltd., $826,801.73 under one or more usernames, including “globalvision1.”

    David Mitchell, Tyalgum, New South Wales, $298,802.10 under one or more usernames, including “davemitchell.”

    Nicola Holloway, Hope Island, Queensland, $273,009.36 under one or more usernames, including “globalnetworks.”

    Sam Fawahl, Melbourne, Victoria, $232,564.55 under one or more usernames, including “TeamUnited.”

    Warren Hickey, Hope Island, Queensland, through a shell company known as Health and Success Pty. Ltd., $159,757.73 under one or more usernames, including “GlobalProfitShare.”

    Lars Frederiksen, Willetton, Western Australia, $139,365.49 under one or more usernames, including “perth.”

    Paul Mandelt, Hillarys, Western Australia, $128,913.02 under one or more usernames, including “sunray.”

    Kelvian Hansen, Gold Coast, Queensland, $111,799.43 under one or more usernames, including “Kellil.”

    Anni Thompson, Yandina Creek, Queensland, $95,566.00 under one or more usernames, including “teamliberty.”

    Ann Audrey Hickey, Hope Island, Queensland, $83,487.05 under one or more usernames, including “GlobalProvenPattern.”

    R&J Thumm Family P/L as Trustee for Thumm Investment Trust, (R&J), a proprietary limited company organized under the laws of Australia, $80,130.26 under one or more usernames, including “GlobalWealthSystems.”

    David Cane, Hope Island, Queensland, through a shell company known as Karanda Holdings Pty. Ltd., $77,296.57 under one or more usernames, including “GlobalCashFlow.”

    Donna Walton, Beaudesert, Queensland, $76,730.36 under one or more usernames, including “Candyamore.”

    Michael Georghiou, Cheltenham, Victoria, $74,968.93 under one or more usernames, including “4ever.”

    Thomas von Eitzen, Brisbane, Queensland, $74,854.07 under one or more usernames, including “tomve.”

    Bradley Ferries, Hope Island, Queensland, $72,325.96 under one or more usernames, including “GlobalAdvantage.”

    Robin Reid, Hope Island, Queensland, $61,114.41 under one or more usernames, including “Globalstar.”

    Linda Welch, Lower Beechmont, Queensland, $60,274.22 under one or more usernames, including “DailyReward.”

    Maureen Fisher, Dicky Beach, Queensland, $55,797.49 under one or more usernames, including “Globalsuper.”

    Barry Goodsell, Bertram, Western Australia, $53,650.26 under one or more usernames, including “barryandsue.”

    David Joseph, Mount Claremont, Western Australia, $52,581.70 under one or more usernames, including “dkjoseph.”

    Birthe Seaton, Goulburn, New South Wales, $52,477.31 under one or more usernames, including “jobiperry.”

    NOTE: Our thanks to the ASD Updates Blog.

     

    More . . .

  • ZEEK RECEIVER: No More Tax Withholdings On Distribution Checks; Prior Money Withheld By Receivership For Taxes Will Be Returned By Receivership To Affiliates In Mailing On Dec. 23

    This just in from Kenneth D. Bell, as published on the receivership website and dated Dec. 19, 2014 (bolding added):

    ANNOUNCEMENT FROM THE RECEIVER – December 19, 2014

    The Receivership will no longer withhold taxes from distributions paid to affiliates. If the Receivership previously withheld taxes from a distribution, we will issue a new check on December 23, 2014 to distribute the previously withheld funds to that affiliate. As I have said before, so that we do not expose the receivership to potential fines and penalties that would dramatically decrease the amount of money available to those claimants eligible for a distribution, we have sought assurance from the United States Internal Revenue Service that no withholding is required. We have not been able to get such assurance. However, I have received a tax opinion from a professional that persuades me that tax withholding is not necessary.

    On December 23, 2014 we will mail approximately 58,000 checks to claimants that were mailed a distribution on September 30, 2014 from which a withholding was made. Those checks will be in the amount of the taxes previously withheld for tax purposes from that affiliate’s distribution. On that day we also will mail checks to those individuals who requested (through a formal request on the claim status portal) that their September 30 check be reissued because the original check out was not properly delivered, was lost or was made payable to the wrong name through inadvertent error of the claimant.

    In late January 2015, we also will send distributions to those qualified affiliate claimants who completed the online claim allowance requirements after August 15, 2014 and have not yet received a check. Somewhat frustratingly, there are nearly 62,000 affiliate claimants that have received a letter of determination but have not yet accepted (or objected to) the recognized claim. We have the funds on reserve to make a distribution to all these claimants in the same manner we did for approximately 90,000 affiliate claimants in September. But, unless a claim is accepted (or has had an objection resolved) and the affiliate claimant completes the release and OFAC certification, a distribution check cannot be mailed. I encourage all of these affiliate claimants to go online and complete the process to be eligible for a distribution check in late January 2015. For cost efficiency reasons, we will issue checks only quarterly, so if an affiliate claimant has not completed these steps by December 31, 2014 the next opportunity to receive a distribution check will not be until late April 2015. I would much rather send all qualified affiliate claimants a check than hold those funds in a bank account.

    Finally, we are making great progress in recovering and marshalling additional funds which, together with the funds we currently hold, will be later distributed to all qualified claimants.

     

  • BULLETIN: Extraordinary Drama Playing Out In Zeekland; Credit-Card Processor Says It Has Been ‘Rendered Insolvent’ Through Misconduct Of Paul Burks And Rex Venture Group

    breakingnews72BULLETIN: (8th Update 10:09 p.m. ET Dec. 18 U.S.A.) Payment vendor for a Ponzi-board “program?”

    More than two years after the shutdown of Zeek Rewards by the SEC, Plastic Cash International, a credit-card processor and would-be debit-card vendor for Zeek, said it has been “rendered insolvent as a result of the misconduct of [Rex Venture Group] and [Paul] Burks,” the operator of the Zeek scheme.

    PCI also says its onetime attorney in California who advised the company on Zeek matters has been disbarred and that the attorney stole $800,000 in funds that originated in transactions it processed for Zeek.

    Filings today by PCI identify the attorney as Scott Mehler. Details on the alleged Zeek-related theft were not immediately clear.

    On Sept. 3, 2014, Judge Donald F. Miles of the California State Bar Court issued an order recommending Mehler’s disbarment to the California Supreme Court.

    Filings in the case say Mehler misappropriated $1.4 million from two businessmen who sold their sheet-metal business to a company in Canada. In the papers, Mehler is accused of spending “all” the money entrusted to him, creating bogus screen shots to dupe the businessmen, ducking them for months and blaming his unresponsiveness to their demands for payment on mistakes with decimal points, miscalculations, a son who was ill, a wife who was out of town and an “injured dog.”

    In November 2014, Zeek receiver Kenneth D. Bell asked for an order directing PCI to turn over more than $8.3 million that he believes are receivership assets. PCI now contends that it is insolvent, that it is a victim of Zeek and that its very business relationship with Zeek triggered a series of epic disasters that led to its demise.

    Brian Newberry is the president, CEO and principal owner of PCI.

    From a filing by PCI today (italics added):

    Immediately upon discovering that RVG had been operating an alleged Ponzi Scheme, PCI directed PCI’s processing partner, without qualification, to honor all chargeback requests made by Customers, including those to whom monthly services had been rendered . . . To date, PCI has paid out at least $2,000,000 on Customer chargeback requests and related fees.

    Severe fines and penalties have been imposed on PCI because PCI contracted with RVG, which has since been exposed for various fraudulent and unlawful practices. Such fines and penalties continue to accrue. To date, PCI has paid an aggregate of at least $1,100,000 in fines based directly on PCI having processed transactions related to RVG . . .

    Furthermore, PCI has paid, to date, an aggregate of at least $600,000 in legal fees incurred by PCI, PCI’s processing partner and PCI’s merchant bank specifically related to handling the ZeekRewards fallout . . . Under the Agreement, these legal fees are RVG’s responsibility . . .

    Based on the advice of PCI’s (now disbarred) attorney, Scott Mehler (“Mehler”), that the funds in dispute belonged to PCI and not RVG, PCI used the funds PCI received from processing monthly memberships that remained after payment of the aforementioned chargebacks, fees, fines and penalties in an attempt to mitigate the damages resulting from RVG’s conduct . . .

    In addition to fines and legal fees, PCI and one of PCI’s principals, Brian Newberry, were themselves placed on the “MATCH List” based on the transactions processed for RVG . . . As a result, PCI’s processing partner, SecureNet, immediately ceased doing business with PCI altogether, thereby cutting PCI off from all sources of cash . . . Without any cash, PCI could not service the financial obligations imposed by contracts with other parties or otherwise meet operating expenses as they became due. PCI has asserted a Class 2 secured claim against the Estate, which claim is concurrently being pursued in accordance with the claims determination procedures established applicable to this SEC Enforcement Action, as ordered by this Court.

    NOTE: Our thanks to the ASD Updates Blog.

    UPDATE DEC. 18 7:32 P.M. ET: The PP Blog is working on an update to the story above.

    UPDATE DEC. 18 10:09 P.M. ET. See related story here.

  • URGENT >> BULLETIN >> MOVING: Court Denies Zeek Winners’ Motions To Dismiss Clawback Actions, Upholds Jurisdiction

    breakingnews72URGENT >> BULLETIN >> MOVING: (3rd Update 10:03 a.m. ET Dec. 10 U.S.A.) The federal judge presiding over clawback cases against alleged Zeek Rewards “winners” has dismissed jurisdictional challenges and a claim by the winners that Zeek was not selling securities under the Howey Test.

    The rulings mean that clawback claims seeking millions of dollars from the winners remain intact.

    Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina also has ruled that the receiver’s request to impose a constructive trust against the winners to prevent further dissipation of Zeek winnings was proper.

    The clawback defendants, including Trudy Gilmond, Trudy Gilmond LLC, Jerry Napier, Darren Miller, Durant Brockett, Rhonda Gates, Innovation Marketing LLC, Aaron Andrews, Shara Andrews, Global Internet Formula Inc., T. Lemont Silver and Karen Silver, had contended the fact they performed some work to score their winnings took a Howey prong out of play because they did not expect profits based solely upon the efforts of others. Absent this prong, the winners argued, receiver Kenneth D. Bell could not prove Zeek was selling unregistered securities as investment contracts.

    “Defendants’ emphasis upon the long hours they worked to recruit . . .  others is misplaced,” Mullen ruled. “Without the essential managerial efforts of [Zeek President Paul] Burks and [Zeek operator Rex Venture Group], no profits would have been generated at all.”

    And, Mullen added, “As the Court finds that it clearly has subject matter jurisdiction, it is unnecessary to address the Receiver’s ancillary and supplemental jurisdiction argument or his argument that the Court also has diversity jurisdiction.”

    Meanwhile, Mullen ruled that the winners’ claims that Bell could not pursue fraudulent-transfer claims under North Carolina law were without merit.

    “Defendants argue that this claim must be dismissed because neither the Receiver nor RVG  (in whose shoes he stands) is a ‘creditor’ as defined in the North Carolina Uniform Fraudulent Transfer Act (‘NCUFTA’) and therefore he has no standing to pursue fraudulent transfer claims. Defendants’ argument is without merit.”

    On the issue of the imposition of a constructive trust against the winners, Mullen ruled (italics added):

    “Defendants’ argument that they should not be subjected to the imposition of a constructive trust because their own fraud is not the subject of the complaint fails. The Complaint sets forth allegations sufficient to show that ‘some other circumstance’ makes it inequitable for these Defendants to retain the funds they received . . .  This ‘other circumstance’ is that Defendants received the funds from an admitted Ponzi and pyramid and that the funds are nothing more than other people’s money wrongfully diverted from RVG. Therefore, Defendants have received property which they ‘ought not, in equity and good conscience, hold and enjoy.’”

    Zeek figures Dawn Wright-Olivares and Daniel Olivares pleaded guilty to investment-fraud conspiracy earlier this year.

     

  • Some Zeek Claimants From Outside The United States Unable To Deposit Distribution Checks; Receiver Provides Guidance

    Kenneth D. Bell, the Zeek Rewards receiver, published an announcement last night that certain Zeek claimants from outside the United States who received a distribution check were unable to deposit it. Here is the announcement, dated Oct. 30, 2014 (italics/bolding added).

    ANNOUNCEMENT FROM THE RECEIVER – October 30, 2014

    Various foreign claimants have reported that their banks have refused to deposit the distribution checks I have sent to you. It is likely that these banks are mistakenly seeking to deposit the checks in the local currency instead of in United States dollars. ALL checks issued by the Receivership are issued in United States dollars. Please inform your bank when you are depositing your check that it is in United States dollars. I am unable to issue checks in any currency other than United States dollars.

    Visit the receivership website.

  • BULLETIN: Receiver Sues Zeek ‘Winners’ In Canada

    breakingnews72BULLETIN: New court filings today in the Western District of North Carolina show that the court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case has sued 26 alleged “net winners” in Canada.

    Each of the defendants allegedly received at least $50,000, according to filings by receiver Kenneth D. Bell.

    More . . .

  • URGENT >> BULLETIN >> MOVING: Zeek’s Paul Burks Indicted

    Paul Burks.
    Paul Burks.

    URGENT >> BULLETIN >> MOVING: (3rd update 9:15 p.m. EDT U.S.A.) Alleged Zeek Rewards operator Paul R. Burks has been indicted by a federal grand jury in Charlotte, N.C., on charges of wire and mail fraud, wire- and mail-fraud conspiracy and tax-fraud conspiracy.

    Burks, 67, of Lexington, N.C., is the third Zeek figure to be charged criminally.

    On the tax front, the grand jury charged that Zeek Rewards, the MLM arm, and Zeekler, the penny-auction arm, failed to file corporate tax returns. So did Rex Venture Group LLC, the parent company.

    Burks and “others” caused fraudulent 1099 forms to be issued for the 2011 tax year, which caused victim-investors to file false tax returns that reported “phantom” and “fictional ” income. Burks “engaged attorneys and tax professionals to legitimize the issuance of the 1099s,” the indictment alleged.

    Meanwhile, the grand jury alleged, “Burks and others paid themselves large salaries and other payments from victim-investors’ funds and did not keep accurate and complete records of the payments.”

    And, the indictment alleged, Burks and other used multiple bank accounts and offshore payment processors “to deposit funds from victim-investors and to make Ponzi payments” to them.

    Link to Department of Justice statement.

    More tomorrow on the PP Blog . . .