The receiver for defunct ZeekRewards.com said Thursday he has made a third distribution to victims of the Ponzi scheme, this time for $89.2 million.
Kenneth Bell said 112,734 checks were mailed July 31. The distribution raises to $246.05 million the amount that Bell has released from the ZeekRewards estate since September.
Bell said he was not able to distribute an additional $46.24 million because about 35,400 potential recipients still have not completed their eligibility requirements, such as electronically signing the legal release and certification required by court orders.
Bell said most victims who are qualified for reimbursement would get a check.
Bell raised his projection of what the average recipient should get from 60 percent reimbursement to approaching 70 percent. The next distribution, if possible, is set for Oct. 31.
In August 2012, the U.S. Securities and Exchange Commission accused Rex Venture Group LLC, Zeekler, ZeekRewards.com and Paul Burks, their principal owner, of raising $850 million through unregistered securities. The companies were shut down and their assets frozen.
The companies raised the money from at least 2.2 million customers, including more than 230,000 in the United States and 47,000 in North Carolina. Bell said he has recovered more than $336 million to date.
Burks pleaded not guilty on federal charges of wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy. He was indicted in October 2014 by a federal grand jury. His trial date has been set for May.
Another 9,394 claimants have not received a check to date because the amount of each distribution check would have been less than $100. “Due to cost efficiencies, the court orders provide that distribution checks below $100 will not be mailed until the end of the receivership and payment of final distributions,” Bell said.
Bell said www.zeekrewardsreceivership.com/OFACandRelease provides an instructional video for electronically signing the proper documents.
“Those who do so before Oct. 20 will be mailed their interim partial distribution, representing 60 percent of their allowed claim,” Bell said. “I fully expect that we will recover tens of millions of additional dollars that we can then distribute to claimants.”
“Sometime before the end of the receivership, I will have no option but to ask the court for permission to distribute all remaining receivership assets to only those recognized claimants who have completed the process.”
Bell said he is progressing with litigation against U.S and foreign net winners — those who took more money out of the scheme than they put in. Bell has defined net winners as those who had a net gain of at least $1,000 from the Ponzi scheme. He said the largest net winners each received more than $1 million.
In February, Bell gained U.S. District Court permission to certify about 9,400 net winners as defendants in a class-action lawsuit. The list contained 15 individuals from Forsyth County, 105 from the Triad and Northwest N.C., and 390 statewide.
Bell has said the potential recovery from the net winners could be as much as $283 million.
Judge Graham Mullen acknowledged much of the net winnings for some defendants may have been dissipated, and the receiver will be required to help the defendants pay for their defense costs.