The fallout from the shutdown of an alleged $600 million online Ponzi scheme continues this week as the fate of investors’ money is now in the hands of a court-appointed receiver.
A U.S. district judge appointed a Charlotte, North Carolina lawyer Kenneth Bell as temporary receiver for Rex Venture Group and ZeekRewards.com.
As the receiver Bell assumes control of the operation and will work to recover and preserve any assets tied to the company. Once that process (which Bell says is a lengthy one) is complete he will then determine who will get funds back.
Here’s how the ZeekRewards receivership process will work:
- Kenneth Bell obtains control over the assets and records of the company, as the Receiver.
- The receiver will put people and procedures in place to preserve assets and analyze the claims.
- The receiver will then tell a judge what he thinks should be done with the assets he’s recovered.
- His proposal will be made public and all affected persons will have a chance to object.
- The judge will review the proposal and objections and make a decision about the assets from there.
ZeekRewards members who believe they are owed money will have to sit tight for now because there is currently no claims or distribution process. The receiver says he’s first working to gather information about ZeekRewards investment history and other information from the company and its founder Paul Burks.
ZeekRewards.com was shut down by the SEC on Friday on charges of fraud and because it was a Ponzi scheme on the verge of collapse, the regulator said.
The SEC says online marketer Paul Burks and his company raised more than $600 million from more than one million online customers through the website ZeekRewards.com since January 2011. Investors were promised up to 50% of the company’s daily net profits through a profit sharing system in which they accumulate rewards points that they can use for cash payouts, according to the agency.
“However, the website fraudulently conveyed the false impression that the company was extremely profitable when, in fact, the payouts to investors bore no relation to the company’s net profits. Most of ZeekRewards’ total revenues and the “net profits” paid to investors have been comprised of funds received from new investors in classic Ponzi scheme fashion,” the SEC claims.
The website was on the verge of collapse, according to the SEC, which added that last month ZeekRewards brought in approximately $162 million while total investor cash payouts were approximately $160 million.
But there seem to be plenty of ZeekRewards affiliates who are trying to fight back against the Ponzi claims. Close to 13,000 people have signed a petition to keep ZeekRewards alive saying they are “devastated” by the shutdown and that they are “behind Paul Burks, Rex Venture Group, Zeekler/Zeek Rewards and it’s affiliates 100%.”
“In no way that this company defrauded anyone. We believe that Zeekler/Zeek Rewards has given us the leadership and the freedom to support our families,”the petition reads.
Meanwhile, while ZeekRewards affiliates wait to find out the fate of their money, websites similar to ZeekRewards are marketing to them. Vitelpower.com for instance commented on an earlier story about the shutdown and offered ZeekRewards affiliates a chance to be “grandfathered into an equivalent position with our company.” The website claims to be the “Zeek rescue program.”
A message left for the VitelRewards commenter mentioned above has yet to be returned.
The North Carolina Department of Justice is warning ZeekRewards members about so-called reload scams.The Attorney General’s office says reload scams are popping up more frequently seeking to recruit consumers who were hit by the ZeekRewards shutdown. Says the North Carolina AG Office:
Reload scams hit consumers when they’re down, offering to help them make back money they lost to a previous scam or bad business decision. These scams have been popular for years with telemarketing fraud rings but can also follow other types of fraud…
Blogs, news releases online, and individuals leaving comments in articles about the Zeekler shut down are already touting opportunities “for those that are looking for something that can help them replace the income they were receiving from Zeek Rewards.” If you’ve been a part of a scheme such as Zeekler that collapsed, or if you lost money to another recent scam, don’t fall for a reload scam.