Home MLM News Breaking Zeek Rewards News: Zeek Receiver Files Preliminary Liquidation Plan With Updates on Asset Recovery, Clawbacks, and Claims Process

Breaking Zeek Rewards News: Zeek Receiver Files Preliminary Liquidation Plan With Updates on Asset Recovery, Clawbacks, and Claims Process

by Troy Dooly
Zeek Rewards News

Jordan Maglich of PonziTracker.com and contributor at Forbes reported today today on what Kenneth D. Bell’s Liquidation Plan for Rex Venture Group, LLC, aka Zeek Rewards means for the former Zeek Rewards affiliates… Victims and Promoters.

All Court Documents Can Be Found By Clicking Here

Breaking Zeek Rewards News: Zeek Receiver Files Preliminary Liquidation Plan With Updates on Asset Recovery, Clawbacks, and Claims Process

The court-appointed receiver overseeing the $600 million ZeekRewards Ponzi scheme has filed a preliminary liquidation plan providing the most detailed look thus far of ongoing efforts to recover assets for victims, as well as the implementation of a claims process and “clawbacks” against certain investors. Kenneth D. Bell, with Charlotte law firm McGuireWoods LLP, was appointed by a North Carolina federal court on August 17, 2012 in the wake of an emergency action filed by the Securities and Exchange Commission (“SEC”) to halt what it called a “massive Ponzi scheme.” The scheme has been pegged as one of the most complex Ponzi schemes to date in light of the estimated millions of victims. In the Preliminary Liquidation Plan (the “Plan”), Bell provides updates on assets recovered, the claims process, and efforts to recover funds from investors who profited from the scheme.

Since assuming control, Bell has retained several third-party forensic and data consultants to assist with re-constructing Zeek’s financial records. His investigation thus far has revealed that there were approximately 2.2 million unique users in Zeek, with 1 million of those users having paid money into the ZeekRewards program. While Bell disclosed at an earlier press conference that the initial damage estimate of $600 million was likely low, an updated estimate of investor losses was not contained in the Plan.

To date, the Receiver has recovered approximately $293.7 million for the benefit of defrauded investors. This includes nearly $200 million in domestic financial institutions including Global E Telecom, First Premier Bank, and Bank of America. Additionally, nearly thirty million dollars were seized from foreign accounts and payment processors. The Receiver also disclosed that he had presented nearly 61,000 non-negotiable financial instruments (such as cashier’s checks and/or money orders) totaling approximately $100 million for deposit. However, over 10,000 items totaling approximately $30 million were unable to be deposited, with Bell disclosing that a majority had been returned following the issuance of stop payments. The issue has since been resolved.

While the Receiver has primarily focused on locating and securing assets since his appointment, he has indicated that he intends to begin focusing on “recovery efforts to include claims against officers, employees, participants, professionals, and others who benefited from the Scheme.” The “professionals” the Receiver alludes to include individuals or entities that provided services to Zeek and helped to facilitate its operation, such as banks, law firms, or accountants. Additionally, Bell issued his strongest statement to date that he intends to pursue those “net winners” who profited from the scheme, stating that

These claims will include common law claims and “clawback” claims under applicable fraudulent transfer statutes against those who ran the operations and “net-winner” participants, i.e. those who received back more (of other Affiliate-Investor’s money) than they paid into the [Scheme].

As I wrote back in August, any clawback efforts are likely to be expensive and complex due to the estimated tens (or even hundreds) of thousands of potential clawback targets, and I had hinted that Mr. Bell would possibly consider “pre-litigation” efforts to allow the return of profits without instituting litigation. This speculation is seemingly confirmed in the Plan, with Mr. Bell stating that he plans “to offer those who are required to return money to the Receivership Estate the opportunity to do so cooperatively in an effort to avoid costly litigation for all concerned.” In similar receivership proceedings, this offer is often accompanied by a small “discount” to encourage settlement and avoid litigation expenses.

The Receiver continues to work towards implementing a claims process, noting that he is working to enhance the receivership website and has not yet decided on the appropriate method to accept claims. He notes that he has received communications regarding the claims from various creditors, including “organized groups of affiliate-investors of the receivership defendant.” While the Receiver has taken note of those needs, none of that information will function as a valid submission of a claim until a formal claims process has been established. Once a decision has been made on the claims process and the appropriate basis to calculate the allowed amount of claims, the Receiver will then seek court approval and permission to distribute forms to investors. These issues, as well as the types of allowed claims, will be fully addressed in a to-be-filed Plan of Liquidation. It remains to be seen what method the Receiver will adopt to calculate claims, though it is highly likely that the “net investment method” will be used. That method deducts any withdrawals from the total amount contributed to arrive at a calculated amount.

Finally, the Receiver informed the Court that it was unlikely he would seek to convert the receivership proceeding into a bankruptcy filing. According to Bell, a receivership provides more efficiency and cost savings than a bankruptcy, which would also result in substantial transition costs and no real advantage in recovery of assets compared to a receivership. While the Receiver indicated this decision remains under consideration, it seems highly unlikely that Zeek would be converted to a bankruptcy proceeding.

In closing, the Receiver reiterated that the investigation remained ongoing, and that he was facing a “time-consuming” process in reconstructing over 18 months of “missing or incomplete” financial information. The scheme’s complexity, coupled with the high number of transactions and investors, will “require additional and significant investigatory efforts.” Bell expects to file a quarterly status report by October 30, 2012.

The Liquidation Plan Can Be Found Here!

Jordan Maglich is an attorney at Wiand Guerra King P.L. in Tampa, Florida whose practice includes white-collar crime and securities and financial litigation. He also covers Ponzi schemes on his blog, PonziTracker. Follow him at @PonziTracker.

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37 comments

Brad October 31, 2012 - 11:31

The Zeek Rewards Receivership had on update on their website. http://www.zeekrewardsreceivership.com/pdf/10-30-12%20-%20Letter%20from%20the%20Receiver.pdf

Ron October 19, 2012 - 10:09

Troy,

Given that about $300m has been recovered, and this has been called a $600m ponzi scheme, would you like to take an educated guess as to what percentage victims can hope to recover. Thanks.

Troy Dooly October 19, 2012 - 15:21

Ron,

The numbers from looking at the documents is closet to $400 million, and the total was over $1 billion dollars.

Now there were 2.2 million people who were involved, but only 1 million who ever paid any money. So now the question comes down to how many are classified victims and how many are classified promoters? The promoters have already made their money, so this now brings us under 1 million.

The Receiver has been clear he is going after the Attorneys, CPAs, and Banks for clawback before the affiliates.

So based on this information, I would say on the low end 70% and the high end 100%. But this is just a calculated guess at this point.

Madison Wu October 19, 2012 - 04:29

Dear Sir

As one of the victims from Taiwan, I just hope to know:

(1) Will I be able to get my money back as a foreign investor in Zeek?
(2) If the answer is YES, then how people like me outside the USA can claim such money and how long it is going to take?

Troy Dooly October 19, 2012 - 07:33

Madison,

Although it is not in the Mission Statement of the SEC to protect foreign citizens, I have no reason to believe you will not be getting your money back if you are entitled. SO far the Receiver has only two classes, promoters and victims. I will keep you posted as I learn more.

The Receiver will be creating a template that all former affiliates of Zeek Rewads will use. As soon as it is up we will also put it up on the document post.

Barry Webber October 13, 2012 - 03:03

In all of this the only reason anyone will loose money is because of the SEC. If they would have step in & if Zeek was willing to work with them this could have worked . It would be a win win situation for the country. The trick here is put a reasonable limitation on what people take. If that upsets the few let them go else where. We all put in knowing there was so risk. But that risk shouldn’t be the SEC. Hope they get this court case over & let’s get Zeek Rewards back on schedule & let it be bigger than Quiz Bids.

Troy Dooly October 13, 2012 - 21:49

Barry,

I do agree that if Paul and his attorneys had been willing to work with the SEC, and the SEC would have accepted their willingness to work things out, things might have been different.

So the question we should be asking is WHY DIDN’T this happen?

Bobby Gladman October 14, 2012 - 21:06

Maybe the question should be can this still happen. Can things be made right if both sides come to a solution that would benefit all affiliates and the government. In a country where more money is going out than coming in. A company like Zeek can pull in some much needed revenues, also create tax dollars, and jobs. Sounds like a win win win. I vote Zeek for president. I am always on the side of a solution rather than a litigation. No one wins when our friendly lawyers start gauging away at the assets.

Troy Dooly October 15, 2012 - 15:14

@Bobby,
Based on the fact, Paul Burks gave up any claim to Rex Venture Group, LLC and consented to surrendering these assets, that part of the situation is over. He was provided competent legal counsel, and they advised him this was his best move.

All that is left now, is to fight the clawbacks by those classified promoters.

Based on reading through the documents, it seems, both sides have been talking for months, and could not come to any agreement. It seems that from reviewing (hundreds of thousands of documents), that there was no way to save RVG, or maybe Paul decided he did not want to save it. That is an answer I would love to have.

I still believe the regulators will regulate penny auctions in the future.

Right now there has not been any lawsuits filed against the receiver to stop any of his actions, so it does cause me to wonder, if there is more in the sealed documents, than some might believe?

Richard Bliss Brooke October 11, 2012 - 06:32

But isn’t it going to open again in the EU soon. I sure hope so

Troy Dooly October 11, 2012 - 14:22

lol…

Jimmy B Brazier October 10, 2012 - 23:05

My understanding is the SEC can not prove anyone
lost money in Zeek. To say it is a ponzi because
some idiot members were calling it an investment
or some other improper name is only justification for
a socialist government regime to grab what it wants.
Then say owe the courts will sort it out. Sorry Chariie
but the receiver gets to spend it all. That’s the way it
works. It is a sad day when the govenment intrudes the
personal affairs of its citizens. By the way is Amway a ponzi. Didn’t Uncle Sam try to point its pistols at them.
Please explain something to me. If all members withdrew the profits when they wanted to and the balance of the money was on deposit wasn’t that legitimate. I personally left my points with Zeek and as with any company if the profits are not there you cannot get them later.I fully know this as a businessman. Another matter, I know people that have purchased government bonds or treasury notes. Uncle Sam is guaranteeing to pay a certain percent in the future. But I just learned that Uncle Sam has spend many Billions more than it has on deposit.
Lets’s get a receiver to seize what they can before it’s to
late for these investors.

Troy Dooly October 11, 2012 - 00:30

@Jimmy,

Many times people do not lose money in a Ponzi. However, when there is little or no consumption of a product or service, and large commissions are being paid out, then the SEC will step in and take control.

If you read through all 50 plus documents you can start to see some pretty big questions in things and may see why the SEC stepped in.

Dan Nguyen October 11, 2012 - 12:39

The only idiot members are the ones do not recognize this was a ponzi scheme. It has nothing to do with a socialist gov. old man!

Troy Dooly October 11, 2012 - 14:15

@Dan,

I understand where you are coming from, but many did not see it as a ponzi

Jim October 11, 2012 - 20:27

Amen to that, my 12yr old son told me it was a ponzi before I sent in my check lol

Morten October 11, 2012 - 19:38

@Jimmy B. Brazier

Your logic fails, because Zeek did NOT have the money needed. It was heavily under-balanced.

$225-$300 million in accounts can only support 100% payout for less than 10 days, if people had stopped investing and reinvesting. It would have ran out of money within a few weeks if it hadn’t been shut down by SEC.

To be in balance, Zeek would have needed additionally $2.5 billion more than they had, to be able to pay all the investors.

“If something seems to be too good to be true, it probably IS”. And Zeek appeared to be too good to be true, and it wasn’t true either. People were tricked by a trained magician to believe in ILLUSIONS rather than reality.

Whether people called it “investment” or “purchase bids” wasn’t really important. It was a fraudulent investment scheme all the time, anyway.

Most people have been able to return to reality now, and have realized they were scammed. There’s more than enough information available for people who are willing to accept reality. For others, most information will have very little effect.

james October 12, 2012 - 22:38

My understanding was that if there were no new sales, there were no payout. If that was the case, the company could never run out of money. But according to the SEC complaint, it assumed that the company kept paying a certain daily percentage even if everybody was withdrawing 100% and there were no sales coming in.

Troy Dooly October 12, 2012 - 23:17

James,

Your understanding is correct. However, since based on the evidence that all that was being bought was the bids, and nothing was being sold to outside customers (which I had warned about for months), the SEC decided to stop waiting for the company to implement the shopping mall and other measures needed to insure massive customers would be using the company services.

When there is no internal consumption, and little to none external consumption, you move from a pyramid to a ponzi situation real fast.

Gordon October 16, 2012 - 11:29

The problem I have with all of this as stated, is that ZEEK never promised a payback, or a percentage, and VIP points weren’t dollars. If Paul needed to reduce the percentage to keep alive, he could have. We all agreed that whatever we bought and gave away was at our discretion and with full knowledge that it was non-refundable. We risked our money, buying sample bids to lure people in. What business doesn’t risk money on marketing? There are no guarantees of return there either. Every other penny auction makes money on bid purchases, whether or not those bids get used or not, and most don’t win, and there is no guaranty that the person who bought bids will ever return to buy more. I bought bids to give away. I used the auction. I bought bids every month as part of my subscription. We were all customers of our own auction site! That never seems to get recognized.

Troy Dooly October 16, 2012 - 19:27

@Gordon,

If you go back and watch my first video, you will see where, I did talk about the guarantee that Zeek launched with. It was what created all the early buzz, and what originally got them in the hot seat.

Paul did use a floating percentage, from .08% to 1.5% based on what folks have written here.

The laws are clear, if folks are not using or buying the products or services outside of those in the compensation structure, then the business model is flawed, and can come under the scrutiny of the regulators. Based on the numbers at hand, less than 2% of folks were buying bids and using them in the VIP Paid Auctions.

You did get one thing right… “We risked our money, buying sample bids to lure people in.” It is the “luring of people in” that has the SEC, NC DOJ, Secrete Service and others very concerned.

And, you have a point on the other penny auctions. Except… Those who sell bids with a comp plan, must show the auctions are generating more revenues than just selling bids inside the compensation structure. If not then they also could and may be under investigation. And if those are like Zeek, the affiliates may not know before one of them is closed down.

And, in the case of Zeek, the folks who received the FREE bids were not using them, let alone buying more.

Anderson October 10, 2012 - 18:12

Troy what i understand now that a preliminary liquidation plan was filed is he need the approval from the judge to put in action the claim procedure, right? and other thing is if the clawbacks would be forward for all the afiliate who earn more than their initial investments even if these amounts are ridiculously lows.

Troy Dooly October 11, 2012 - 00:32

@Anderson,

The Judge will have to approve the final plan. It may stay as is, or the Judge may exclude items. I am not sure if outside attorneys can file motions against it or not.

I am not sure I fully understand the second part of the question. Can you rephrase?

Morten October 11, 2012 - 20:53

@Anderson

The first rule for clawbacks is that they will have to be COST EFFECTIVE. So the Receiver will probably focus on high amounts first, and he will probably have to drop very low amounts.

A clawback is not a “punishment”, it’s more similar to an “administrative action” where illegal money will have to be returned (within reasonable limits) to the Receivership, and eventually be returned to its owners (minus expenses, minus money that is not possible to recover in a cost effectively manner).

Receiving illegal money doesn’t have to be illegal in itself, but the money will have to be returned to its rightful owners. It will first become illegal if people are making illegal attempts to prevent Justice from happen.

The first ones in the clawback list are probably some of the direct and indirect organizers, e.g. officers in RVG and affiliates with huge downlines (if they have withdrawn money).

Even third parties can risk clawbacks, if they directly or indirectly have participated in paid activities related to the fraud. If we use Keith Laggos as an example, he was involved as
* an affiliate
* a paid advisor
* his Network Marketing Business Journal was heavily involved in the marketing of Zeek (in April 2012)

He can probably risk clawbacks in all the 3 roles.

Affiliates who only have earned “ridiculously low amounts” will be placed very low in the list, and the Receiver will probably have to stop long before he reaches the end of that list. The first rule is “in a cost effectively manner”, and that rule has to be followed.

Anderson October 13, 2012 - 14:52

Thanks for your technical explanation. Now I read a report that until today the receiver has had the luxury of being unquestioned and the judge has had no one opposing his decisions and that his process is not going to continue and your proposals will be meet with correct and accurate information that addresses the lack of or miss information provided to the court.

It seems the legal war is going to continue. Remember always there are two contenders or parts involved in a conflict and each one has to be heard.

Troy Dooly October 13, 2012 - 21:48

@Anderson,

Do you realize that Paul Burks the single owner of RVG, was presented the evidence and decided to give up his company and pay a fine to the SEC? In America we can do as we wish with our assets. It doesn’t matter what you, me or any other person may think or want, Paul was well within his rights.

And, from what I have seen, NO ONE is fighting this fact. Some folks are wanting to get more money from him and have filed lawsuits. And at least one group is fighting the clawbacks, but many in this group also did this in the past, where the owner plead guilty to criminal fraud.

Right now there is NO legal war. Not one attorney or group has filed any motion to deny the liquidation plan. Maybe that will change if the judge approves the plan, but to date it has not happened.

By the way, in this case, the one side has already surrendered. All that is left, is for those who may get clawback notices to fight their clawbacks. Outside of that Zeek is gone and RVG will be liquidated to payback the affiliates owed money.

DON MORRISON(Canadaian Rockies) October 10, 2012 - 07:15

hi from Canada, while it is unfortunate and at times, unbelievable this could actually have been some kind of Ponzi scheme, it leaves me with an even deeper lack of trust in this human race. I thought i did my homework on this one. I look forward to just moving forward no matter the out come. It was a very good lesson learned.

Don newbie Zeek affiliate

nellie October 9, 2012 - 20:19

Maybe because this is a simple thought, and most probably because it would be the most EFFICIENT and least time consuming – would to be just start “backing up” and out what folks had put in. Most everyone had an NxPay or other account – so just utilize those to repay folks. No need to reinvent the wheel and spend untold amounts of money doing so. I personally don’t care if folks keep what they “made”, as long as anyone I shared it with is made as whole as possible.

Bully 4 U October 10, 2012 - 15:41

Yes nellie, that would be simple…
but the receiver is not looking for a simple solution, because that takes away from the very reason he took on this job to begin with… How to make the most money out of “protecting our interests”… by spending as much of our money as possible, to pay himself for creating as complicated a scheme as he can come up with, to justify all the “fees” he will be submitting to the court!!
By freezing our accounts in the first place, he stopped everyone who wanted to take back their original bid purchase, from doing just that. The money that is frozen belongs to all the Independent Contractors who worked for ZeekRewards by placing adds everyday, and then ether purchased more bids with their earnings or took it out in cash… A very simple “efficient” process that worked just fine for almost 2 years…
So where will all the money go that was earned daily by affiliates who placed adds and bought bids to be used for the Zeekler Penny Action?? That money ($300 million) should still be in their accounts where it was the day the SEC froze them… Right??? We shall see!!!

Bobby October 12, 2012 - 03:21

After reading all the available info. I think the sec has taken a long time to find out how much money, how many affiliates, how many money accounts, how many properties, and on ,and on. Should they have not known all the facts before they froze everything? What if they are wrong? What then. Many believe it was not a ponzi, many believe it was not a pyramid, many believe including Troy at one point depending on how the wind was blowing that this was a great company. Many did there homework and used Troy as a guide. Thy made decisions to go with Zeek because of the A team that was put together to make sure all was compliant. Troy told us on many occasions they are and were compliant. Seems to me the sec, and Troy are not even sure. I never saw a man make so many statements then apologize for his words. Eventually your word means nothing. The man parades himself at all kinds of events eating, and traveling on companies dimes to report as a man protecting the mlm industry. He is protecting his own agenda. I think he is a fake phony fraud. i confess i do not know the truth here but I think Zeek got the shaft. I think it could have been fixed if there were some questionable practices in a brand new business model. I thought it was an incredible concept. I feel the sec does not truly comprehend the business model. My gut feeling is they made a hasty move, and are now trying to prove they were right. Smarter minds then mine investigated and went with Zeek. Doctors, lawyers, business men and women. Were we all duped, and stupid? only time will tell. Lets see how this plays out. may the truth be revealed through this process. Everyone should do there own homework and not count on foggy bloggers, with ratings and or $$ on there minds. God bless us all.

Troy Dooly October 12, 2012 - 11:31

@Bobby,

If you have read all I have written then you should also realize the Receiver is known for uncovering money that has been hidden, used for illegal purposes etc.

In this case, it is very clear, there are many different hard drives holding different parts of the information, and more than likely based on the types of experts who have been brought in, also had deleted info, that had to be recovered.

It took close to two years to create the database and money trail, so to expect a team to uncover everything in 90 days or less, it a feat all in itself.

The SEC does not have to know all the facts, they just need to be able to prove motive. In this case, it was pretty simple once they got the info from Paul Burks. The majority of affiliates were not buying in the auctions. The fre bids were not being used by the majority of folks, and the SEC took this to show, there was no consumption by the general public or the affiliates… In other words no one was using the bids or buying more bids for the auctions. They were buying bids to gain money from the RPP etc.

ROFLOL… I never apologized for words. Just for a couple of editorials where I based the information on false or possibly fraudulent information.

I have never changed my position on the fact, Zeek was upside down since day one. In April I provided the basis of a plan to fict the situation, and it was accepted. However, it was not implemented when it should have been. Had it been implemented along with the mandatory compliance course faster, and REAl customers paying REAL dollars had come on board and slowed the growth of the company, then none of this might have happened.

However, if you read through all the comments here, you can quickly see NO ONE wanted the qualifiers, because it would have kicked everyone out of the RPP until they had real customers.

When people procrastinate for months, use the reason as being merchant account issues, and banking issues, and we later learn the very banks they said kicked them out still had millions of dollars sitting in the accounts, and checks were being cut from those accounts, it does cause one to question, what was truth and what was a fraud.

So, thanks for stopping by, I suggest you read each and every court document, then read through all the reporting, then maybe you will be educated enough to start to see the pattern the Receiver is following.

meir peleg October 29, 2012 - 02:07

typical to lawman the reciever first of all running to catch the
thieves (except the holy Paul Burks), instead of helping the victims. why not start paying the victims while gathering the assets?

Troy Dooly October 29, 2012 - 13:51

@Meir,

The Receiver has already determined that of the 2 million who were part of Zeek only 1.1 million ever paid money to Zeek. This in and of itself is good for you. Had he not continued to dig into the financial side of things, then your refund might be far smaller than it would have been.

He is not just going after criminals, he is working to try and get you back 100% of what you might be owed.

meir peleg October 29, 2012 - 02:12

Is there a law that says that the victims get their money back only from the money of the company and not from the government?

Troy Dooly October 29, 2012 - 13:49

@Meir Peleg,

This is a great question. I am not sure if there is a specific law. However, based on the circumstances, it would not be the Government’s responsibility to payback anyone who might have lost money out of the US Treasury or Victim’s fund.

In this case, the SEC pretty well knew (my opinion) that there would be plenty of funds to payback victims.

Since the former owner, surrendered his assets aka Zeek Rewards to the SEC for their to liquidate, their responsibility is to secure the assets, and determine how many victims there are and send them and equal percentage of refund. That could be up to 100% of the amount they invested.

Bobby October 13, 2012 - 16:55

Troy do you know the actual numbers generated from the penny auction site? were they the monies used to pay out the 1.5% daily? was the money also from the on line store with 3 million customers generating along with the auction site enough to justify the payout? Were the ads generating enough traffic to the penny auction site? These are the numbers that have not been challenged in court yet. Perhaps the fun club will help us all find out what is what. I hope to find the truth. Some feel they have the smoking gun that will prove the sec wrong. Do you think that is a possibility? Seems to me a complaint is not a conviction. You commented in your last answer to me that the receiver has uncovered money used for illegal purposes. Do you feel Zeek was using monies illegally? Right now I stand with Zeek. If found out they were liars and cheats i want to see all of them rot in jail. Paul Burkes, and all his accomplices. I think they are right at this point. I think the sec is going to have to start proving things soon. I have not seen hard evidence to convince me of Zeeks guilt. What are your beliefs as we stand now?

Troy Dooly October 13, 2012 - 21:43

@Bobby,

1. I reported on the numbers several times from what was shared publicly at the Red Carpet Days.

2. The total daily revenue of Rex Venture Group, LLC was what fueled the RPP. However, part of the issue as has been presented by the SEC, is the fact millions of dollars were collected daily, yet not deposited. Which causes an issue in how the formula was created for the daily payout. This is partly why the SEC has stated and Paul Burks agreed, that the daily .80% to 1.5% was just a figure Paul pulled out of the air. Although I am not sure the figure was just random, I do think it was not accurate in the end because of all the un-deposited funds.

3. The three million customers have not been verified. I reported those numbers, and later learned they were provided by the company or someone inside the company. From what I have gathered is that number is a total accumulated number over 15 years and were not active customers. Unlike a company like DubLi as an example who verifies their active customers.

4. Based on the numbers now being presented, there were very little affiliates and customers “buying” additional bids to use in the VIP auctions. It seems that when the merchant issues hit, and Zeekler could not take credit cards, they dropped the amount of daily auctions, and even if there had been folks using the auctions, there would not have been enough revenue being generated to justify the daily payout. So not the ads were not generating revenues.

This was common knowledge and way back in April I had brought to RVG a solution which was to finally be launched in August.

5. The numbers you bring up were challenged for months, and the company did not deny any of the issues. However, due to the slowness at getting the shopping mall up and other qualifiers that could have slowed growth, and might have righted the ship. The company felt there were other priorities which had to be handled first.

Some of those I believe were very important. Others, like the banking issues I am not sure about now, because it has been made public that some of the banks purported to have kicked RVG out, had not and that millions of dollars were still there on deposit.

6. The fun club based on the current documentation, is focused on fighting clawbacks. They have yet filed anything with the courts outside of the appearance of their attorneys. The same thing has taken place by some of the 12 leaders of Fun Club at their previous company Ad Surf Daily, where the owner plead guilty to fraud.

Now that the liquidation plan has been filed, if it is approved by the Judge, maybe the Fun Club attorneys will earn their money and file motions against it. However, every time there is a motion filed, it does seem to slow down folks from getting their refunds.

7. Now as for proving the SEC is wrong. What folks do not seem to realize is that Paul Burks owned 100% of Rex Venture Group, LLC. As an American, he has the right to do as he wants with his company. When the SEC presented to him their evidence of a crime against 2.2 million affiliates, 1 million who had paid to be part of his company, he, through his attorneys decided to accept the SEC’s findings and agreed to pay a $4 million dollar fine.

Even if it can be proven the SEC acted prematurely, the 54 pages of evidence and facts does seem to prove that there was more going on behind the scenes than was told to me and others.

Although the numbers in the original complaint were low (as I had reported), the main fact is very clear, and even I have come to accept this fact. Since there was very little purchasing of bids outside of the affiliates buying “sample bids”, and the fact those who were given sample bids, were not buying additional bids to use in “paid VIP auctions”, Zeek Rewards and Zeekler, had issues. And if this evidence proves to be accurate, then instead of Zeek Rewards looking like a pyramid, it will truly fall under the definition of a Ponzi because less than 2% of folks were generating outside revenue from any of the income streams.

8. The complaint is NOT a conviction. First of all it is a civil issues, and NO criminal charges have been filed… YET! But the fact Paul Burks did consent to the complaint, for whatever reason, and did not allow his corporate legal and compliance team to fight it, does bring closure to the fact, the SEC was given the company to liquidate as the Receiver and court sees fit.

9. When a company is found to be a Ponzi and their owner of said company accepts those finding, then funds collected by said company are deemed to be illegal funds, and the use of them can be deemed illegal use. If any organization inside of the company in the field is found to an organized group promoting said ponzi, and it can be proven they have done this more than once, then it will also raise the question of criminal RICO violations, and this can bring criminal charges against folks inside the corporate offices and in the field if it is found they are working together.

With the disclosure of more offshore funds that were not first disclosed, and the fact the Receiver has stated he is now looking at clawing back moneys from the Banks, CPAs and Attorneys, there may be additional illegal use of funds that will be disclosed in the future.

10. There are some facts that have been made public through the court documents that do contradict what I was told at Red Carpet Days and what was purported from the stage. If that proves accurate, then lies and fraud did take place. Since there are hours of video recording from these events I pray those videos are made part of the evidence and can help deliver more answers than questions.

I stand by the fact Zeek was upside down and needed the shopping mall to bring in outside customers. I am also leaning towards the fact, that based on all the documents I have read, that I was not told the whole true, and that many facts were covered up, or denied, and if those facts deem to be part of a organized attempt to defraud millions of people, then it will be clear to me Zeek was a ponzi and people need to serve time in prison.

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