Burks and his conspirators induced more than , victims — including over 1, victims in the Charlotte area — to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from its penny auctions, and that the public could share in such profits through investment in ZeekRewards.
Burks and his conspirators did not keep books and records needed to calculate such daily figures. In addition to promising massive returns on investments, Burks and his conspirators used a number of ways to promote Zeek to current and potential investors.
For example, the conspirators hosted weekly conference calls and leadership calls, where participants could call in listen to Burks and others make false representations intended to encourage victim-investors to continue to invest money and to recruit others to invest in Zeek. During these events, Burks and his conspirators made false representations about the massive retail profits generated by Zeek.
They also used electronic and print media, including websites, emails and journals, to make false and misleading statements about the success of Zeekler to recruit victim investors. Burks also failed to file corporate tax returns or to make corporate tax payments for his companies, among other things. A jury expected to be selected Tuesday will have to decide whether Paul Burks intended to mislead investors five years ago with fanciful promises of percent returns at a time the economy limped out of the Great Recession.
Burks is charged with mail fraud, wire fraud and conspiracy to commit tax fraud in one of the biggest cases of the past decade involving alleged Ponzi schemes. The trial could run four weeks. From a small, brick building in Lexington, North Carolina, Burks ran an online auction site. To drive customers to his auction site, Burks in launched a complicated online vehicle called ZeekRewards.
It offered people who invested money, promoted the company on other websites and recruited other participants a share of auction profits. Some mortgaged homes to raise their investment. More information and links to the Response Portal will be sent to the Net Winner Class members in the notification email.
If a Net Winner does not receive their notification by February 13, then he or she should email netwinningsresponse zeeknetwinnerclass. Hundreds of settlements have been negotiated with Net Winners and approved by the Court. The sentencing hearing is open to the public and will be held at the Federal Courthouse at W. Trade Street, Charlotte, NC.
Victims of these offenses are entitled to be heard at sentencing. If a victim would like to have a letter describing the impact that ZeekRewards had on them submitted to the Court please send an email to HearingLetter zeekrewardsreceivership. In particular, the Court would like to hear about any of the below circumstances:. I will be attending the hearings on behalf of all ZeekRewards victims and will present your letters to the Court. I am pleased to announce that we will be making a third partial interim distribution to all Affiliates who hold Allowed Claims on March 15, If you previously have received payment from the Receivership, or receive a payment for the first time during the January 31 distribution, you will be issued another payment on March 15, Their failure to do so has permitted me to release these reserves and to pay the third partial interim distribution to Affiliates that hold Allowed Claims.
Finally, we do not have authority to accept new claims and are not considering further requests to amend previously allowed claims.
The time to file claims or to amend claims has passed. I ask you for your patience, and thank you for your continuing support. All claimants who fall into this category received emails on October 1, November 1 and December 1 asking them to complete the process. They received another email from the Receiver today making a personal appeal for them to sign the forms online. These claimants must follow these steps:.
Failure to complete this process by December 31, will result in forfeiture of claim, meaning a distribution check will never be issued. Those affiliates have already completed the required process. This is not a new opportunity to file a claim. The time to make a claim ended on September 5, by order of the Court.
Please do not attempt to file a claim now. The opinion may be viewed by following this link. As I have previously stated, the next step will be for the Receiver and counsel for the Net Winner Class to confer and then ask the Court to approve a process to determine the amount of judgment, or money owed, by each of the class members other than the named defendants who have already been found liable for the full amount of their net winnings to the receivership.
This process is expected to take several months, but the entry of summary judgment is a significant event for the receivership and claimants. How much of that we will be able to collect for distribution to claimants with allowed claims is uncertain at this time. However, we will pursue collection of these judgments vigorously, and expect the ultimate amount collected will be a substantial sum.
A copy of the motion is available at this link. By this Motion, the Receiver requests that the Court enter an order affirming that the Receiver has the authority to deem any claim of a Subject Affiliate who has failed to submit the Required Information by p.
More than 41, claimants have a claim recognized by the ZeekRewards Receivership, but have failed to electronically submit an OFAC certification and release. The ZeekRewards Receivership cannot pay a claimant with a recognized claim unless the claimant submits an OFAC certification and release. Failure to submit an OFAC certification and release may result in these claims being forfeited.
Once approved by the Court, the funds held in reserve for the forfeited claims will be released from the reserve for payments to claimants with allowed claims in this case. The Receiver has and will continue to contact all claimants that hold one of these more than 41, claims regarding the forfeiture of their claim. The Court considered their cooperation with the government in the successful prosecution of Paul Burks in handing down the sentences.
I appeared before the Court and argued on behalf of the victims of these crimes, and presented to the Court letters from victims describing the impact that Zeek Rewards had on their lives. The sentencing of Paul Burks has not yet been scheduled. The sentencing hearings are open to the public and will be held at the Federal Courthouse at W. On August 23, Jaymes Meyer was sentence in federal court in Charlotte, NC to 15 months imprisonment followed by 2 years of supervised release on charges of obstruction of justice.
Meyer caused millions of dollars of RVG assets to be transferred to accounts under his personal control. During the last four years the Receiver Team has traced these funds all over the world and through several overseas shell companies and offshore trusts.
On Thursday July 21, , following a three week trial, a federal jury in the Western District of North Carolina found Paul Burks guilty of mail and wire fraud, and conspiracy.
Burks was allowed by the Court to remain on bond pending sentencing, which has not yet been scheduled. Victims of Mr. We will post the date, time and location of his sentencing hearing when it is scheduled by the Court. The trial is open to the public. We will be monitoring the trial and will keep you updated. The indictment against Mr. Burks can be viewed at this link. Also, yesterday we filed a motion for summary judgment, a memorandum in support of the motion and exhibits in the litigation against named defendants and the defendant class of net winners in the United States.
By this motion we are asking the Court to rule as a matter of law that ZeekRewards operated as a Ponzi and pyramid scheme, and to find that the net winnings received by the net winners must be returned to the receivership for distribution to claimants with recognized claims.
The motion, memorandum and exhibits may be viewed at this link. The defendants will have an opportunity to respond to this motion. Thereafter, the Court may schedule a hearing. If the Court rules in our favor and grants our motion, the liability of the named defendants and class members will be established. We will then ask the Court to approve a process to determine the amount of judgment, or money owed, by each of the defendants to the receivership.
This process will take several months, but the filing of this motion is a significant event for the receivership and claimants. How much of that we will be able to collect for distribution to claimants with recognized claims is uncertain at this time. Many foreign Affiliates have reported that they are unable to deposit or cash their distribution checks due to local banking fees and regulations.
We filed a motion with the Court seeking a remedy for this problem so that all Affiliates, could receive their distributions. I sought this relief because various foreign Affiliates that were eligible to receive distributions contacted me to alert me to the fact that they were unable to cash the physical checks denominated in US Dollars that they had received. This relief will allow me to pay those foreign Affiliates who complied with the Court mandated process, but were otherwise unable to recover on account of their Allowed Claim because of their location.
If you are eligible to receive your distribution by wire transfer, my team will be sending you an email explaining how you may exercise the option to receive your distribution by wire transfer.
However, if you are eligible to receive your distribution by wire transfer and you choose to do so, all of the fees and costs associated with the payment of the wire will be deducted from your Distribution including without limitation the fees and costs associated with the sending of the wire by the estate, the receiving of the wire transfer by your bank, any currency conversion fee associated with converting the wire transfer from US Dollars to your local currency, any bank charges, and any canceled check fees incurred on account of any uncashed check which was previously issued to you.
In addition, you agree to pay any costs associated with canceling uncashed checks previously issued to you. If you request a wire transfer and it is determined that the cost of the transfer will be greater than your Distribution, your Distribution will be sent by check.
In order to receive the wire transfer, you must submit all of the requested banking information via the Claim Portal.
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