ZeekRewards Closed – Questions and Answers
by Ted Nuyten on August 19, 2012
As I receive hunderds of emails about ZeekRewards from all over the world I have compiled the next questions and answers as a service and in basic english.
If you want to comment or ask a question please use your facebook to comment, and please do not pitch here for an other opportunity.
I will delete such comments or ban you…
Q: Will ZeekRewards or Zeekler come back, open again?
A: No, Paul Burks, the owner, agreed to settle without admitting wrongdoing and agreed to cooperate with a court-appointed receiver, so the government is in control and I do not believe the government will run the Zeek penny auction….
Q: I invested in ZeekRewards, how do I get my money back and how fast?
A: The United States District Judge Graham Mullen has appointed Kenneth D. Bell as the temporary receiver, empowering him to take control of Zeek’s assets and begin an investigation. The Court’s Order gives the Receiver all powers, authorities, rights and privileges that were possessed by ZeekRewards and its officers, directors, members, managers and general and limited partners.
It will be a long procedure, months if not years. If you have invested in the last 30 days and you paid with a credit card you maybe can claim it back through your credit card company.
Q: How is the Receivership Process?
A: The Receiver is systematically obtaining control over the Receivership assets and records (1) by placing affected persons and the public on notice of the Complaint and the Order appointing a temporary receiver, and (2) by physically securing the place of business.
Receiverships generally involve putting into place people and procedures to preserve assets and to analyze the claims against the assets. After completing that, such receiver would file a motion with the court with a recommendation as to treatment of the assets and claimants. The proposal would generally be made available to all affected persons.
Such persons would be given an opportunity to object to the proposal and any continuing objections would be determined by the court. Finally, the assets and claimants would be treated as the Court would determine after reviewing the receiver’s recommendations and any objections to them.
Reports will be filed with the Court periodically and major reports will be posted on the Receivership’s website.
Q: How do I Contact the Receivership?
A: The Receivership may only be contacted in writing. Emails may be sent to: info@ZeekRewardsReceivership.com.
The Receivership’s website, which may be found at www.ZeekRewardsReceivership.com, will be the Receiver’s primary means of communicating with customers and the public.
Q: What would be an alternative to contact the receiver?
A: Kevin Thompson – The MLM Attorney is working on an action plan for ZeekRewards Victims, check this post.
The number of Zeek investors is on a magnitude that has never been dealt with before in a receivership or bankruptcy context.
Those who have not received any or part of their bid purchases will be seen as victims. Those who have made more than their bid purchases will MAYBE come under the "USA clawback" laws and could receive notification of the amount of funds they must surrender to the receiver.
Q: I have not taken any money out of my ZeekRewards account, will I get it?
A: Unknown at this point. $5 million a day in revenue came in in July, the receiver will simple not have enough money to pay all victims back.
Q: How much money is available for refunds?
A: About $225 million in 15 foreign and domestic financial institutions, minus government / administration costs.
Q: How many people invested in Zeek?
A: About 1 million.
Q: How many people will go for a refund?
A: A wild guess: 20,000 – 50,000+. A lot of people will not go for a refund as I will take a long time. Be prepared for a lot of questions from the receiver…..
Q: What is the SEC and can they just take over an USA Company?
A: If a judge accept the SEC's request it can. According to the SEC website:
The mission of the U.S. Securities and Exchange Commission (SEC) is to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. The laws and rules that govern the securities industry in the United States derive from a simple and straightforward concept: all investors, whether large institutions or private individuals, should have access to certain basic facts about an investment prior to buying it, and so long as they hold it.
Q: I did not invest in ZeekRewards, I bought bids!
A: Allthough Zeek was ordering affilliates not to use the word " Investment" the SEC and the judge had an other opinion.
Q: Was ZeekRewards a Scam?
A: In a scam you put your money in and the majority will never get a penny, up to closing ZeekRewards paid it's affiliates up to $375 million. Zeek had 8 complaints in the week they were closed, which is on 1 million affiliates very low. The SEC calls it a Ponzi did not use the word "Scam", however it is an academical discussion.
Q: Was ZeekRewards a Ponzi?
A: Yes, according to The Securities and Exchange Commission (SEC) and the U.S. District Judge Graham Mullen in Charlotte, North Carolina. Paul Burks settled, in other words Paul gave up, he accepted the SEC deal.
Based on the average 1.5% daily dividend on 3 billion Profit Points outstanding, ZeekRewards would owe nearly $45 million per day in profit share awards to investors, if investors requested cash rewards instead of points. The company’s actual daily revenues, which in July 2012 averaged approximately $5 million per day.
Q: Suppose ZeekRewards was not closed down, when would it collapse?
A: According to the SEC complaint, ZeekRewards would quickly be insolvent, within a couple of weeks or months.
Q: How many VIP Bids were actually used?
A: Of approximately 10 billion VIP Bids purchased by or awarded to investors, less than 0.25% have been actually used in auctions on the Zeekler penny auction website. The VIP Bids did little or nothing to actually promote the retail business.…
Q: What was the major failure in the compensation plan or business model?
According to the SEC:
The (daily net profit distribution) bears no relation to the company’s net profits. Instead, Burks unilaterally and arbitrarily determines the daily dividend rate so that it averages approximately 1.5% per day, giving investors the false impression that the business is profitable.
Q: How much did ZeekRewards paid out to his affiliates?
A: About $375 million.
Q: Are Paul Burks and the former Zeek Management criminals?
A: The SEC did not play it hard on Paul Burks, only $4 million penalty….. It would be possible in the SEC's opinion he never intended to build up a Ponzi, penny auction compensation plans are complicated. He operated in a gray area and choose the wrong compensation plan and made the wrong decisions.
Q: How much money did Paul Burks earn or took out?
$7 million, out of $600 million revenue, Paul Burks has withdrawn approximately $11 million minus $4 million penalty. Paul Burks also paid $1 million to family members.
Q: Where is Paul Burks?
Paul Burks has a home in Lexington, USA. He is not arrested or in jail, part of the SEC deal is he agreed to cooperate with a court-appointed receiver.
Q: Who was the legal advisor(s) on the Zeek compensation plan and business model?
A: In June 2011 Zeek announced:
Zeek has hired top MLM Consultant Dr. Keith Laggos to make us bigger and better than ever before. You will begin to see a few transitional terminology changes throughout the sites first and foremost you will see new titles begin to appear on the top of your ZeekRewards and Zeekler websites.
MLM Law Firm, Gerald Nehra & Richard Waak, was involved as Howard Kaplan, Zeek’s IRS/Tax Attorney and Grimes and Reece. Noell Tin is Paul Burks lawyer in Charlotte, North Carolina.
Q: Why was the USA Secret Service involved?
A: According to sources because foreign money is involved.
"The mission of the United States Secret Service is to safeguard the nation's financial infrastructure"
Q: Do I have to blame my self for being a ZeekRewards affiliate?
A: Of course people will tell you "Told You So" but 1 million people were involved, and a lot of very experienced leaders did not see this disaster coming also. Nothing to be ashamed for in my opinion; bad luck, wrong decision.
Q: Was Ted Nuyten a ZeekRewards affiliate or endorsed the company?
A: No, I do not like penny auctions and running www.businessforhome.org is already a full time activity. I report facts and figures which is something else then whether or not a Direct Selling company is legit.
Q: How many people visited the Business For Home website Friday 17th and Saturday 18th August?
A: Over 100,000 unique visitors have been searching for Zeek information during those 2 days.
Q: What do you think about other penny auctions or can you advice me an other opportunity?
Penny auctions do have a credibility problem through this situation, as so many people are hurt. My advice is, as allways, to do your own due diligence. If you want little or no risk choose for a 5+ year old (public traded) company, like Nu-Skin, Herbalife, Avon, USANA, Amway ect.
If you can handle risk (No Guts, No Glory) take a startup, there are thousands. I am not endorsing any Direct Selling company through this website.