Reimbursement edges closer for Zeek victims
Victims of the global Zeek Rewards pyramid scheme that was rooted in the Piedmont may receive a partial payback for what they lost in the coming months, an attorney overseeing the case said this week.
Zeek Rewards, which was based from a small, nondescript office in Lexington, billed itself as an online multilevel marketing business and auction site where affiliates could make extra money. But the U.S. Securities and Exchange Commission shut down Zeek Rewards in August 2012, terming it a $600 million Ponzi scheme on the verge of collapse.
Attorney Kenneth Bell of Charlotte, the court-appointed receiver for the Zeek Rewards case, said this week that he’s preparing to seek permission to make a partial reimbursement to victims through the U.S. District Court for the Western District of North Carolina.
“By the end of this year I still hope to ask the court for permission to make an interim partial distribution. We have recovered more than $300 million cash that I want to distribute to victims,” Bell writes in an update on the website www.zeekrewardsreceivership.com.
Victims of Zeek Rewards filed claims online from mid-May through early September. Bell said that he’s in various stages of verifying the claims and sending notification to people who would receive a reimbursement. Approximately 175,000 total claims were made in excess of $590 million — Bell has been candid in the past by saying that victims won’t receive back all the money they lost in Zeek Rewards.
“We expect to begin sending determination letters by email to tens of thousands of claimants in the next few weeks. These letters will inform claimants whether we are able to accept the claim as filed or whether we need to discuss a discrepancy between the claim and what our records support,” Bell says.
In other instances, Bell and his legal staff are trying to clear up confusion from the information submitted by some Zeek Rewards victims.
“Many thousands of claims were made without providing a Zeek Rewards user name, or provided a user name that does not appear in the Zeek Rewards data base,” Bell says. “We are sending emails to all these claimants asking that they follow a link in the email to the claims portal and provide the user name used while an affiliate of ZeekRewards. If we don’t have an identifiable Zeek Rewards user name, we may not be able to validate your claim ...”
Some people have contacted Bell and asked him to fully reopen the claims process to provide more time for some victims. But Bell said that while he appreciates the hardship of some victims who didn’t file claims by the Sept. 5 deadline, he won’t restart the process.
Reopening the claims period would cost an estimated $500,000, Bell says, and would further delay the time in getting money to victims.
“If we accepted additional claims after Sept. 5, 2013, it would dilute the recovery of all those who timely filed claims
by increasing the claims pool,” he says. “This prejudices the claimants that complied with the court’s order approving the claims process to the benefit of those claimants that did not comply with that order.”
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