Some hope for Zeek Rewards victms

Apr. 08, 2013 @ 09:27 AM

Victims of the mammoth Zeek Rewards pyramid scheme soon may have a route to some restitution as a federal judge considers a plan to allow them to file financial claims.
The receiver overseeing the effort to recoup hundreds of millions of dollars for Zeek Rewards victims is awaiting word from the judge on a claims procedure proposal. Once the judge in the U.S. District Court for Western District of North Carolina signs off on the plan, Zeek Rewards victims could begin filing claims for the first time since federal authorities shut down the pyramid scheme eight months ago. The claims process would open two weeks after the judge OKs the proposal, said receiver Kenneth Bell, an attorney based in Charlotte. 
“With more than 2 million usernames registered with ZeekRewards, the establishment of this process has been a significant undertaking,” Bell writes in a recent update on the receivership website. “It has taken longer than I had hoped, but we had to be sure that the claim process we proposed to the court was in the best interests of the hundreds of thousands of potential claimants while remaining as cost effective as possible.”
When the U.S. Securities and Exchange Commission shut down Zeek Rewards Aug. 17, the federal agency termed it “a $600 million Ponzi scheme on the verge of collapse.” Operating from a nondescript, small office building in Lexington, Zeek Rewards promoted itself for more than a year as a multilevel marketing business. But authorities say it was the classic pyramid scheme in which the operators enriched themselves with proceeds from early customers by propping up the scheme with money from later customers.
Bell previously indicated that he’s recovered about $300 million in assets that can go toward restitution. But Bell has been candid in saying that Zeek Rewards victims — spread across the world — won’t recoup all the money they lost.
“One of the greatest challenges in this matter has been to design a claims process and notice procedures so that affiliates could efficiently assert their claims without causing the receiver to expend all the assets he marshaled,” Bell indicates in a motion submitted to the court. “The challenge of providing cost-effective notice is caused in large part by the large number of affiliates generally, the large number of affiliates located in foreign jurisdictions and the large number of affiliates with missing or incomplete mailing addresses.”

pjohnson@hpe.com | 888-3528

 

The court-appointed receiver in the Zeek Rewards pyramid scheme recently indicated that he has submitted a  claims process to a judge so victims can have a way to seek restitution on their losses. No claims can be filed, though, until the judge in the U.S. District Court for the Western District of North Carolina approves the receiver's plan. Claim requests can be sent:
By email to the address claims@zeekrewardsreceivership.com
By mail to ZeekRewards Receivership, c/o GCG, PO Box 9964, Dublin, OH 43017-5964
For more information, check the receivership website at http://www.zeekrewardsreceivership.com/