URGENT >> BULLETIN >> MOVING: (UPDATED 8:05 P.M. EDT U.S.A.) From the standpoint of avoiding financial accountability, it may have become more difficult for serial scammers who foist HYIP scams on the international public to thumb their noses at law enforcement and the courts. The court-appointed receiver in the Zeek Rewards Ponzi scheme case has revealed the threshold dollar number used to determine who received emails offering a settlement: That number, according to filings by receiver Kenneth D. Bell, was only $1,000.
The lowness of the number could send shockwaves across the HYIP Ponzi universe. On well-known Ponzi-scheme forums such as TalkGold and MoneyMakerGroup, serial HYIP scammers routinely pooh-pooh court actions and claim that neither the government nor receivers will bother to seek recoveries from low-level players and “winners” in scams.
Confident that they’ll never be held accountable, some purveyors move from one HYIP fraud scheme to another.
In August 2012, the SEC described Zeek as a $600 million Ponzi- and pyramid scheme. Both the SEC and the receiver quickly were demonized on the Ponzi boards.
Docketed in the Western District of North Carolina yesterday, Bell’s filing makes it plain that he expects any net winner who received $1,000 or more to pay up — and there is no guarantee that the number could not go lower in the future. Beyond that, a provision of the settlement agreement frees the receiver effectively to force net winners who may have money frozen in NxPay “and/or any other payment processor” or bank to make those funds payable to the receivership estate.
Zeek used NxPay, AlertPay and SolidTrustPay. AlertPay (now Payza) and SolidTrustPay are longtime favorites of Ponzi purveyors and their shills on the fraud forums. Zeek was based in Lexington, N.C.
If the Zeek settlement stipulations as outlined by the receiver are approved or accented by the court, it would mean that Zeek’s serial HYIP players and their recruits could not hope to stymie law-enforcement agencies and the receiver by waiting them out and removing “profits” from the payment processors or banks at a later date.
At least 136 Zeek winners have agreed to settlements after being approached by the receiver, Bell said. Virtually all of the settlements have included a substantial discount on the order of 40 to 50 percent. The discount amounts, Bell has said, will enable the receivership to collect some money for Zeek victims without going to the additional expense of filing lawsuits.
Winners who cooperated early with the receivership may stand to gain much better deals than stragglers who potentially could be held accountable for more lucrative dollar sums if successfully sued. Zeek had more than 2 million user IDs, Bell has said. About 1 million affiliates paid money to Zeek, which may have a universe of tens of thousands of “winners.”
The $1,000 threshold in the early settlement emails was established after the receivership consulted with the SEC, according to a filing yesterday by Bell.
Here are a several examples of the existing settlement agreements, according to the June 28 filing (bolding added):
- A Zeek winner of $1,254 has agreed to a settlement of $600 “to be paid within 7 days of the effective date of this agreement.”
- A Zeek winner of $9,249 has agreed to a settlement of $4,500 “to be paid as follows: $375 a month for 12 months beginning in April 2013 (to be paid by the 25th of each month).”
- A Zeek winner of $28,909 has agreed to a settlement of $22,000 “to be paid as follows: $6,000 within 15 days of the effective date of the agreement and then eight payments of $2,000 due on the 15th day of each following month.”
- A Zeek winner of $114,000 has agreed to a settlement of “$47,500 to be payable on or before May 31, 2013.”
- A Zeek winner of $170,440 has agreed to a settlement of “$84,981 to be payable in one payment of $23,165 on or before June 15, 2013 with the remainder ($61,770) to be paid by July 15, 2013 or in 10 equal consecutive monthly payments of $6,177.60 beginning on or before July 15, 2013 and to be paid by the fifteenth day of each following month.”
- A Zeek winner of $176,000 has agreed to a settlement of “$88,000 to be paid within 7 days of the effective date of this agreement.”
As things stand, Bell has settled with winners of more than $3.2 million for better than $1.81 million. The “Settlement as % of Winnings” is listed as 56.12 percent in the June 28 filing.
NOTE: Our thanks to the ASD Updates Blog.