Zeek Rewards Payments To Begin Late September

Zeek Rewards


Two years after their entrapment in a mammoth Ponzi scheme became public, victims of the Zeek Rewards swindle finally may receive some restitution this autumn.

The attorney overseeing what may become one of the largest pyramid schemes in U.S. history — which was run from a small office next to a coin-operated laundromat in Lexington — said the first, initial payments to victims could be made in late September.

Receiver Kenneth Bell said last week that the first reimbursements could be for 40 percent of what victims lost in Zeek Rewards, which billed itself as an online multilevel marketing business but turned out to be a classic Ponzi scheme in which early customers were paid with proceeds from later ones.

“Let me emphasize that this is only a first distribution. I am entirely confident that we will make another distribution once we have recovered all assets possible,” Bell said.

Earlier this year, Bell sued former Zeek Rewards insiders, including ringleader Paul Burks of Lexington, and more than 9,000 individuals across the country who took more money out of Zeek Rewards than they contributed.

This money rightfully belongs to affiliates with allowed claims. Also, I believe we will recover several millions of dollars more from financial institutions still holding receivership assets,” Bell said.

Bell submitted a payment plan late last month to the U.S. District Court for the Western District of North Carolina, which must approve it. He said he expects the court to make a decision this month
The full impact of Zeek Rewards began to become apparent on Aug. 17, 2012, when the U.S. Securities and Exchange Commission seized its assets in an emergency action.

Bell has determined that more than 700,000 participants lost more than $700 million from January 2011 until August 2012, and victims range from people in the Triad to residents of 157 nations.

In a motion filed with the court, Bell said approximately 175,000 claims for reimbursement have been submitted so far to the receiver.

“As of the date of the filing of this motion, the receiver holds approximately $320 million in receivership assets that will be used to pay claimants and administrative fees in this case,” according to the motion.


Profile of a pyramid scheme

On Aug. 17, 2012, the U.S. Securities and Exchange Commission seized the assets of Zeek Rewards, which purported to be an online multilevel marketing business and penny auction site based in Lexington. Instead, investigators say it was a classic Ponzi scheme in which initial customers were paid with proceeds from later ones until the scheme collapsed.

An attorney out of Charlotte, Kenneth Bell, has said that Zeek Rewards may turn out to be the largest pyramid scheme in U.S. history to go through receivership in the federal courts. Bell, the court-appointed receiver, is trying to recoup assets to reimburse Zeek Rewards victims for part of their losses. The official website is www.zeekrewardsreceivership.com — the case is through the U.S. District Court for the Western District of North Carolina.

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