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Florida Business, Whistleblower, & Securities Lawyers / Blog / Ponzi Scheme / $600 Million Ponzi Scheme Halted by SEC

$600 Million Ponzi Scheme Halted by SEC

The Securities and Exchange Commission (“SEC”) has charged Rex Venture Group, LLC (“Rex”) d/b/a ZeekRewards.com and its principal, Paul Burks of Lexington, North Carolina, with fraud in connection with an alleged $600 million Ponzi scheme.

According to the SEC’s Complaint, since January 2011, Rex and Burks raised more than $600 million from over 1 million U.S. and international investors using internet solicitations and advertising. The SEC alleges that investors were solicited to invest in unregistered securities through ZeekRewards.com in the form of Premium Subscriptions and VIP Bids. The SEC claims that ZeekRewards.com was a massive Ponzi scheme in which approximately 98% of its total revenues consisted of funds received from new investors.

According to the SEC, ZeekRewards.com’s investors were collectively promised up to 50% of the company’s daily net profits through a profit sharing system in which they traded accumulated rewards points for cash payouts. The SEC alleges that, in reality, the cash payouts to earlier investors were funded by investments from later investors, in typical Ponzi fashion. In addition, the SEC alleges that Burks misappropriated millions of dollars of investors’ funds for his personal use and has distributed at least $1 million to his family members.

The Court granted the SEC’s request for a freeze of the company’s and Burk’s assets and appointed a receiver to marshal and distribute the remaining assets to investors. Burks has agreed to relinquish his interest in the company and its assets, plus pay a $4 million penalty to the SEC.

Investors nationwide who have been the victims of a Ponzi scheme, may contact the Florida securities arbitration lawyers at Rabin Kammerer Johnson for a free and confidential consultation by calling toll free at 877.915.4040.

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