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Tag: Zeek receivership

  • Zeek Receiver To Make Third Distribution To Ponzi Victims, Says A Fourth Is Possible

    In an announcement dated Jan. 12, 2017, Zeek receiver Kenneth D. Bell said he’ll make a third distribution to Ponzi victims and that a fourth is possible.

    After the third distribution,  victims will have received about 75 percent of their losses, Bell said. The third distribution is set for March 15.

    Let us note here that these results are remarkable. Many Ponzi victims receive only pennies on the dollar, if anything at all. Quick action by the SEC and the U.S. Secret Service in 2012 no doubt benefited the receivership and, in turn, the victims.

    A series of clawback lawsuits and other actions initiated by Bell against Zeek net winners and others may return even more to the estate.

    Here is Bell’s Jan. 12 announcement in full (italics added):

    ANNOUNCEMENT FROM THE RECEIVER – January 12, 2017

    I am pleased to announce that we will be making a third partial interim distribution to all Affiliates who hold Allowed Claims on March 15, 2017. When made, combined with the first and second partial interim distributions and the amounts paid by ZeekRewards to such Affiliates before it was shut down, the third partial interim distribution will have returned to victims with Allowed Claims a total of at least 75% of their losses using the rising tide method.

    If you previously have received payment from the Receivership, or receive a payment for the first time during the January 31 distribution, you will be issued another payment on March 15, 2017. If you had recovered more than 60% from ZeekRewards prior to its shutdown, but less than 75%, you will receive a distribution as part of the third partial interim distribution.

    The funds used to make the third partial interim distribution will be taken from the reserves that I previously held for those Affiliates whose claims were disallowed and forfeited pursuant to the Court’s November 16, 2017 Order that required these claimants to provide their Release and OFAC certification by December 31, 2016. Their failure to do so has permitted me to release these reserves and to pay the third partial interim distribution to Affiliates that hold Allowed Claims.

    Finally, we do not have authority to accept new claims and are not considering further requests to amend previously allowed claims. The time to file claims or to amend claims has passed.

    I am confident that we will make a further distribution in the future. I ask you for your patience, and thank you for your continuing support.




  • 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.