Judge approves first payouts for Zeek Rewards victims
A federal judge has approved the first payouts for victims of the mammoth Zeek Rewards pyramid scheme, which bilked people from the High Point area to 157 nations.
The judge in the U.S. District Court for the Western District of North Carolina on Thursday approved the motion to make the initial distribution, said attorney Kenneth Bell out of Charlotte. Bell is the receiver overseeing the effort to return money to Zeek Rewards victims.
The initial payments are supposed to be distributed in late September. Bell indicated earlier this summer that the first reimbursements could be for 40 percent of what victims lost.
The U.S. Securities and Exchange Commission shut down and seized the assets of Zeek Rewards in August 2012. From January 2011 to August 2012, Bell estimates that more than 700,000 people — known as affiliates — lost more than $700 million.
Also this week, Bell filed paperwork in court to group all the people who profited from the scam in one court class as he pursues his case.
In March, Bell filed his civil action in federal court to obtain money paid to net winners in Zeek Rewards, which purported to be a multilevel marketing business and penny auction site based in Davidson County. Instead, Zeek Rewards turned out to be a giant, classic Ponzi scheme, with initial members paid with winnings from later ones until the scam collapsed.
In his court filing, Bell contends that the net winners named in the class action motion won $940,000, “either individually or together with another family member or through their shell corporation.”
Bell’s motion’s reflects the massive scope of the pyramid scheme, which was based from a small, nondescript office on W. Center Street in Lexington near the interchange with Interstate 85 Business. More than 9,400 net winners who made at least $1,000 are listed on 237 pages of the court filing. The net winners appear to be from every state.
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