On August 17, 2012, the Securities and Exchange Commission (“SEC”) filed a Complaint in United States District Court, Western District of North Carolina, Charlotte Division, against Rex Venture Group, LLC (“Rex Venture”) d/b/a ZeekRewards.com (“ZeekRewards”), and Paul R. Burks. The SEC alleges that Rex Venture and Burks offered and sold unregistered securities in a combined Ponzi and pyramid scheme.
On August 17, 2012, Judge Graham C. Mullen issued an Order appointing Kenneth D. Bell of McGuireWoods LLP as temporary receiver (“Receiver”) for Rex Venture Group, LLC d/b/a ZeekRewards.com. The August 17th order directs the Receiver to, among other things, take control and possession of and to operate the Receivership Estate, and to perform all acts necessary to conserve, hold, manage and preserve the value of the Receivership Estate.
At this time there is no claims process and no distribution. The Receiver is currently gathering ZeekRewards investment history and harmed investor information from the Defendants in an effort to facilitate the claims process and subsequent distribution to harmed investors.
This website will be the Receiver’s primary means of communicating with customers and the public. Please check back periodically for additional information.
Click here to see a press release from the Receiver.
Agreed Order Approving Temporary Receiver and Freezing
Assets of Defendant Rex Venture Group, LLC
Complaint: SEC v. Rex Venture Group, LLC d/b/a ZeekRewards.com, and Paul R. Burks
Kenneth D. Bell Press Release
Frequently Asked Questions
What Is This Lawsuit About?
The SEC alleges that online marketer Paul Burks of Lexington, N.C. and his company Rex Venture Group have raised money from more than one million Internet customers nationwide and overseas through the website ZeekRewards.com, which they began in January 2011.
According to the SEC’s complaint filed in federal court in Charlotte, N.C., customers were offered several ways to earn money through the ZeekRewards program, two of which involved purchasing securities in the form of investment contracts. These securities offerings were not registered with the SEC as required under the federal securities laws.
The SEC alleges that investors were collectively promised up to 50 percent of the company’s daily net profits through a profit sharing system in which they accumulate rewards points that they can use for cash payouts. However, the website fraudulently conveyed the false impression that the company was extremely profitable when, in fact, the payouts to investors bore no relation to the company’s net profits. Most of ZeekRewards’ total revenues and the “net profits” paid to investors have been comprised of funds received from new investors in classic Ponzi scheme fashion.
The SEC’s complaint alleges that the scheme is teetering on collapse with investor funds at risk of dissipation without its emergency enforcement action. Last month, ZeekRewards brought in approximately $162 million while total investor cash payouts were approximately $160 million. If customers continue to increasingly elect to receive cash payouts rather than reinvesting their money to reach higher levels of rewards points, ZeekRewards’ cash outflows would eventually exceed its total revenue.
I was enrolled in a ZeekRewards monthly subscription plan, purchased ZeekRewards “VIP Bids,” or otherwise invested in ZeekRewards. Will I receive back all of my money that I invested in ZeekRewards?
According to the SEC’s complaint, ZeekRewards has paid out nearly $375 million to investors to date and holds approximately $225 million in investor funds in 15 foreign and domestic financial institutions. Those funds will be frozen under the emergency asset freeze granted by the court at the SEC’s request. Meanwhile, Burks has personally siphoned several million dollars of investors’ funds while operating Rex Venture and ZeekRewards, and he distributed at least $1 million to family members. Burks has agreed to relinquish his interest in the company and its assets plus pay a $4 million penalty. Additionally, the court has appointed a receiver to collect, marshal, manage and distribute remaining assets for return to harmed investors.
How Will the Claims Process Work?
At this time there is no claim form available nor has a formal claims process been established and approved by the Court. However, the process of verifying and validating or rejecting claims typically involves comparing the information submitted by the Claimant to the information available to the Receiver, and reaching a conclusion in light of the available information and the applicable law.
What if I have additional questions?
If you have any additional questions, please contact the Receiver by email at: info@ZeekRewardsReceivership.com
You may also contact the Receivership using the contact information listed below. Please note that at this time the preferred method of contacting the Receiver is via e-mail.
Mr. Bell works in the firm’s rapidly growing Government, Regulatory and Criminal Investigations Department, where he represents clients on a variety of matters involving white collar crimes and business-related investigations. As part of his practice, he routinely represents Fortune 500 companies facing federal and state grand jury investigations.
Named a “Leader in the Field,” Litigation: White-Collar Crime and Government Investigations, North Carolina, Chambers USA, 2012
Named the Best Lawyers “Charlotte Criminal Defense: White Collar Lawyer of the Year,” 2010
Named One of the “Best Lawyers in America,” Woodward/White, Inc., 2007-2012
Named a North Carolina “Super Lawyer,” 2010-2012
Named One of North Carolina’s “Legal Elite,” Business North Carolina
U.S. Attorney General John Marshall Award for Trial of Litigation
Partner, Hunton & Williams LLP, 2006-2009
Partner, Mayer, Brown, Rowe & Maw LLP, 2003-2006
First Assistant U.S. Attorney, 1993-2003
Assistant U.S. Attorney, Western District of North Carolina, 1990-1993
Republican Nominee, U.S. House of Representatives, North Carolina Fifth Congressional District, 1990
Womble, Carlyle, Sandridge & Rice, PLLC, 1988-1990
Assistant U.S. Attorney, Western District of North Carolina, 1983-1988
North Carolina Bar Association’s White Collar Crime Spring Program, Cary, North Carolina, May 2009
“Challenges in Disclosing and Using Intelligence in Criminal Prosecutions,” Canadian National Conference on Public Safety, Montréal, Canada, November 2008
Faculty, 27th Annual National Trial Advocacy College, University of Virginia School of Law, 2008
“Recent Developments in North Carolina’s Confrontation Clause Jurisprudence,” Wake Forest University School of Law, September 2006
International Association of Financial Crimes Investigators, Chicago, Illinois, September 2004
National Organization of Black Law Enforcement Executives, Dallas, Texas, July 2004
Law Enforcement Intelligence Unit, San Antonio, Texas, May 2004
Intelligence Agencies Legal Advisors Conference, Vancouver, British Columbia, September 2003
International Law Enforcement Academy (Money Laundering, Financial Crimes and Terrorism), Budapest, Hungary, July 2003
Federal Reserve Bank of New York (Money Laundering Symposium), New York, New York, July 2003
Money Laundering Alert Annual International Conference, Miami, Florida, March 2003
Terrorist Financing, Money Laundering and High Risk Money Laundering and Related Financial Crimes Area (HIFCA) Conference, U.S. Virgin Islands, March 2003
National Forensic Auditor Conference, San Francisco, California, September 2002
Forfeiting the Proceeds of Terrorist Organizations International Seminar, London, United Kingdom, September 2002
International Conference on Illicit Tobacco Trade, United Nations, New York, New York, July 2002
Department of Justice Anti-Terrorism Regional Conferences, Atlanta, Chicago, Dallas, Denver, July/August 2002
North Carolina State Bar Association
District of Columbia Bar Association