Zeekrewards Shuts Down: Zeekler.com and Zeek Rewards Closed in $600 million Ponzi Scandal, Hotline Now Open
Aug 20, 2012 01:52 PM EDT
After the Security and Exchange Commission filed an order to freeze all assets of ZeekRewards over a $600 million ponzy scheme on Saturday, the attorney general has opened a telephone hotline for victims who invested between $1,000 to $10,000, others can contact email@example.com.
On Friday the, SEC said that it discovered the private investment company, along with its parent company Rex Venture Group was running a con scheme, which was worth $600 million announcing that the company was "on the verge of collapse," as reported by Business for Home.
According to the SEC, ZeekRewards owner and head, Paul Burks channeled over one million dollars from investors to family members and other cronies.
SEC's Stephen Cohen told CNN Money, "The obligations to investors drastically exceed the company's cash on hand, which is why we need to step in quickly, salvage whatever funds remain and ensure an orderly and fair payout to investors," adding that ZeekRewards and Rex Venture engaged in "classic Ponzi scheme fashion."
The SEC, which has made civil charges against the company, said that Rex Venture has agreed to make a settlement by paying a $4 million fine and relinquishing its entire stake in ZeekRewards. But it will do so without admitting or denying any role in the fraud.
SEC filed a complaint in a federal court in North Carolina after receiving a number of complaints at the beginning of August.
According to the agency, ZeekRewards still possesses nearly $275 million of investor funds and has paid off around $375. Burks has agreed to settle, without admitting to the charges.
As of now there is no news whether or not Burk will face criminal charges.