Locals face subpoenas in pyramid scheme

Nov. 28, 2012 @ 05:02 PM

The court-appointed receiver investigating a mammoth pyramid scheme that was based in Lexington recently issued subpoenas to 14 people in the greater High Point area who most profited from the online scam that billed itself as a multilevel marketing business.
Last month, receiver Kenneth Bell, an attorney based in Charlotte, updated his probe into the Zeek Rewards pyramid scheme that may involve upward of 1 million people worldwide. On Aug. 17, the U.S. Securities and Exchange Commission took “an emergency asset freeze to halt a $600 million Ponzi scheme on the verge of collapse” in the Zeek Rewards case. The receiver has been trying to secure and recover assets during the past several months that could lead to a reimbursement of victims of the fraud.
The most recent step that Bell took involves issuing subpoenas to approximately 1,200 Zeek Rewards affiliates who profited the most from the scheme.
Bell told The High Point Enterprise that he’s not releasing the names of the people who were issued subpoenas. However, 79 subpoenas were sent to people with addresses in North Carolina, and 14 are individuals in and around the greater High Point area, Bell told the newspaper.
The subpoenas seek financial information, as well as the person’s dealings with Zeek Rewards and its parent company, Rex Ventures.
“... We will pursue recovery from those who took out of Rex Venture more than they put in,” Bell indicates in the most recent public letter on the case posted on the receiver’s website, www.ZeekRewardsReceivership.com.
Zeek Rewards, for more than a year, billed its online site as a way to make extra income through marketing opportunities and so-called penny auctions. However, authorities say Zeek Rewards, which operated out of a nondescript small office on W. Center Street near the interchange with Interstate 85 Business Loop, was the classic Ponzi scheme in which earlier customers were paid with proceeds from newer ones.
In its legal action, the SEC indicates that “approximately 98 percent of Zeek Rewards’ total revenue, and correspondingly the purported share of ‘net profits’ paid to current investors, are comprised of funds received from new investors.”
pjohnson@hpe.com | 888-3528