Receiver updates Zeek probe

More than $300 million recovered in pyramid scheme
Nov. 09, 2012 @ 06:00 PM

Nearly 30,000 people from North Carolina were involved as affiliates or investors in the mammoth, global Zeek Rewards pyramid scheme based in Lexington that imploded earlier this year.
The receiver overseeing the investigation into Zeek Rewards, which federal authorities termed “a $600 million Ponzi scheme on the verge of collapse,” indicates that 29,681 people from North Carolina were tied into the supposed online multilevel marketing business. The number of North Carolinians involved is about 3 percent of the total affiliates and investors in Zeek Rewards, according to information from the receiver. There’s no breakdown yet of the Zeek Rewards participants by cities or counties in the state.
Since the U.S. Securities and Exchange Commission seized Zeek Rewards’ assets Aug. 17, the receiver – attorney Kenneth D. Bell out of Charlotte – has been trying to secure money that could be returned to the upward of 1 million people worldwide bilked in the pyramid scheme. Zeek Rewards operated out of a nondescript, small office building on W. Center Street in Lexington near the interchange with Interstate 85 Business Loop.
In a recent update on the investigation, the receiver indicates that losses will total between $500 million and $600 million for Zeek Rewards and its parent company, Rex Venture Group.
“We have already recovered more than $300 million and continue to pursue millions more held in financial institutions,” Bell writes in a letter on the receiver’s website, www.ZeekRewardsReceivership.com. “To fill the gap between what we have recovered and what victims lost, we will pursue recovery from those who took out of Rex Venture more than they put in.”
The receiver estimates there are more than 100,000 potential affiliates or investors representing hundreds of millions of dollars who netted money from the pyramid scheme.
The receiver is issuing subpoenas to about 1,200 affiliates who profited the most from Zeek Rewards. The subpoenas seek financial information, Bell indicates in the letter.
The receiver still doesn’t have a time frame for any reimbursement to victims of the pyramid scheme. But Bell indicates he’s working on an official claim form that, when approved by the federal court, could be posted on the receivership website.
When completed by victims of the pyramid scheme, the submissions of the forms would lead to “preliminary, partial distribution to qualified claimants from recovered funds,” Bell indicates.
Zeek Rewards billed itself through its website as a location for business opportunities and online auctions. But authorities say it was a classic Ponzi scheme in which new customers were paid with proceeds from earlier ones.
pjohnson@hpe.com | 888-3528