Thursday, August 16, 2012

SEC Shuts Down Zeek Rewards and the Owner Paul Burks for Running Ponzi Scheme

Everything I wrote below was based on rumors and speculation as of yesterday, but the situation for Zeek Rewards and owner, Paul Burks, has escalated to the SEC coming down on Paul Burks personally. He is in serious trouble. He's accused of running a $600 million dollar Ponzi scheme. Here's the CNN Money story:
 
http://money.cnn.com/2012/08/17/technology/zeek-rewards-ponzi-scheme/index.html

 The SEC post on the closing of Zeek Rewards: http://www.sec.gov/news/press/2012/2012-160.htm
 
The biggest challenge appears to be the daily commissions were coming from new recruits rather than the daily profit sharing on their penny auction site. There are two chances Zeek Rewards will reopen: slim & none.

At this point, the is a civil action and not a criminal action.



The following was written the day of the news where I'm trying to make sense of the breaking story. It's still worth reading even after the breaking news update above.
 
I just got a call from a friend involved in the Zeek Rewards business that runs the Zeekler penny auction site and he said that the SEC has shut them down. No other details were offered. They were closed on the afternoon of Thursday, August 16th, 2012. I'll put up more details as I learn them.

Seems like it's too early to say the SEC is involved, seems like this is a North Carolina matter, so forgive the title of this blog post.

The rumor is that the North Carolina Department of Justice, the NC DOJ,  has simply started an investigation. No charges or specific accusations have been officially made, rather it seems like they are simply doing an investigation because they've received 8 formal complaints and 23 inquiries over the past year, so they probably just want to open the books and see what's going on because Zeek has been so secretive about the actual numbers with the field. Sounds like this action is a Civil Investigative Demand, rather than a specific finding.
 
More thoughts from Troy Dooly, an mlm advocate:




If you are involved with the Zeek Rewards business, probably the best thing to do is to sit tight and wait to find out what the specifics are.

Will they make it through this? It's way too early to tell. They are probably well funded and they have worked hard in the compliance area for the last 6 months to avoid their current challenge. Amway's been around for nearly 60 years and they are still getting lawsuits to this day, so it doesn't mean that it's the end of the road, only that there is a hurdle that must be crossed.

It's interesting to note recently Zeek's COO, Dawn Wright-Olivares, has been replaced. She has worked with the owner, Paul Burks, for many years, so it's hard to make anything of it except that it does shake things up a little. An new temporary COO has come on Board as a replacement.

I saw the following on the BusinessForHome.org site:

Update R. S. Foreman :

I took the initiative to CALL Roy Cooper's office (the North Carolina AG, whoose office issued the CID), I spoke with Gloria in Consumer Affairs, who said their switchboard has been lit up since opening their doors at 8:00 AM. She spoke on behalf of the AG and their office, and emphatically stated that in no way did they shut down Rex Venture Group, Zeekler, or ZeekRewards; that their office did NOT confiscate computers, nor did they issue a Cease and Desist Order. They have not scheduled the administrative hearing yet, and are at this stage simply awaiting a reply from Zeek and Rex Venture Group.

My contacts say North Carolina has a history of attacking mlms. They say that they know that they can get money out of any rising star company so they go after them in a shake down hoping the company will simply settle and give them some cash. That's sad if it's true. 8 formal complaints in a year seems like small potatoes to me. Also, there is plenty of turnover at all State Attorney General offices, so what was done in the past doesn't mean that their present staff has the same modus operandi.

Troy Dooly says that a Supreme Court Justice was an affiliate of Zeek Rewards, so in seems wise to lay off your friends with ridicule if they were involved with the company.

With our country and states being broke, nothing surprises me in this hyper regulatory environment. Obama states repeatedly if you are successful in business, you did it because government was your partner and that you owe your success to the collective. Frightening words to a person raised with the American Spirit of pulling yourself up by your own bootstraps. His words roll out with Marxist overtones that scare the hell out of entrepreneurs. He basically says that he's going to punish success.

Little girls lemonade stands are being shut down countrywide saying they have to be approved by the governement and health codes. After the relentless raids of businesses throughout the United States with government SWAT teams coming in with guns drawn on innocent workers, a chill is in the air for small businesses.

Just one look at the videos on YouTube were Obama's goons raided Gibson Guitar with guns drawn on the peaceful workers just quietly making guitars which they have done for over 100 years and it reminds of the horrors of other free countries when taken over by those that promise a brighter future by playing Robinhood.
 

 
Watch this terrifying raid with guns drawn at a health food company called Rawsome Foods:
 
 
Now, even little girls aren't allowed to sell lemonade without a business license:
 

 
Obama's Administration has called for Executive Privilege to coverup Eric Holder and his Department of Justice's involvement in shipping guns to Mexican drug lords while making the false claim that his is the "most transparent Administration" ever. To date, no one has been fired for running guns to Mexico's drug cartels.
 
Other shocking stories came out this week where the Obama Admin says they will not go after criminal charges for Jon Corzine who can't account for nearly 2 billion of losses for gambling with investors' money. Not only that, but they said there would be no criminal charges for Goldman Sachs taking junk mortgages and repackaging them and selling them as AAA paper around the world. Fraud is written all over that, but if you are tight with Obama as a bundler or supporter, you are above the Law.

One last example that is alarming...Wachovia Bank was caught red handed laundering billions in Mexican drug cartel money and even purchasing commercial jets to help them transport into the United States tons of cocaine. The Obama Administration said there would be no criminal charges, only a slap on the wrist of a small fine. Bankers are above the Law in the Obama Administration though he campaigned on cleaning up Wall Street. Right.

http://www.guardian.co.uk/world/2011/apr/03/us-bank-mexico-drug-gangs

So, bottom line, let's wait for the details to come out in the Zeek Rewards - Zeekler investigation. It appears that the closing of the doors of Zeek Rewards and Zeekler was a voluntary action of the company and not a government takeover. It is only an investigation at this point.

 
A Zeek Rewards alternative is this new Penny Auction Affiliate Program.
 

9 comments:

Anonymous said...

Is this an investigation or is it the end of Zeek????

Anonymous said...

People dont panic, CID is Civil Cease and Desist which means they have to Cease everything while they conduct there investigation. When Zeek passes and the attorney general is fully satisfied everything will be up and running as usual. Dont Panic have faith!!!!!!!
39 seconds ago · Like

Anonymous said...

It was the North Carolina Attorney General, not the FTC. Troy has posted a video. http://www.youtube.com/watch?v=s2w841icVBg&feature=em-uploademail

Pops said...

Glleeeennnnn,
You are my hero! Were you in Zeek and BTG?

money said...

hope you right...

Anonymous said...

There's a lot of confusion.....a lot of people are passing off there opinions or what they love to see happen (some people love to hear bad news about others - they get off on it) as fact. In time we will know what will happen to Zeek.

Glen Woodfin said...

Yes, the mob mentality is disappointing.

Maxolla Cheeseball said...

Ya don't panic. Uncle zeek just needs to take some time off to regroup.

Anonymous said...

Iam sure Mr Burks has been doing some collective thinking and will regain his zeek affiliates trust by compensating his affiliates monitarily($$$$). I have not given up on zeek...Zeek will prevail through it all!