Jury finds Paul Burks guilty on all counts (Zeek Rewards)
Paul Burks trial has concluded, with a jury finding him guilty on all four indictment counts.
He faces up to 65 years in prison and a $1 million fine. U.S. District Judge Max Cogburn will sentence him at a later date.
After all those delays, all those nonsensical filings and all the weak arguments about Zeek Rewards not being a Ponzi scheme… turns out of course it is. And Paul Burks is wholly responsible.
After a trial lasting just over two weeks, it took a jury about three hours to return a unanimous guilty verdict.
Burks had only a few days ago filed a motion seeking acquittal on the tax fraud count, which is presumed to have been denied.
At 67, any sentence imposed by Judge Cogburn will see him spend the rest of his natural life behind bars.
A fitting end to the mastermind of one of the largest MLM frauds in history.
Over at the defense table, Burks sat low in his seat. He wore a dark gray suit and hearing aids.
While (the prosecutor) described him as “pretty slick” and “pretty smooth,” the partially bald and gray-haired businessman stared straight ahead.
Taking to the stand himself, Burks described Zeek Rewards as
a runaway train … with more activity and craziness than I could possibly even imagine.
As to the whole Zeek Rewards paid out 50% of its revenue argument, Burks’ attorneys argued
ZeekRewards paid out more than half the $939 million it generated.
Burks never intended to cheat anyone. Mistakes in judgment don’t make up fraud.
In his heart and in his mind, he must intend to defraud. That’s not what the facts show.
The prosecution however were having none of it.
Every fraud has a fairy tale. ZeekRewards (was) a “simple flim-flam” that, fueled by greed and the internet, “got out of hand.”
While ZeekRewards did pay out hundreds of millions in earnings, its actual obligations were more than $3.3 billion.
Burks and his co-conspirators had no choice other than to use the payments from new investors to pay off the old.
Meanwhile, ZeekRewards kept promising that “everybody wins. Only 12 percent of the investors did.
In a statement issued following the guilty verdict, U.S. Attorney Jill Westmoreland Rose said;
“For nearly two years, Burks used deceit and dishonesty to engineer an extensive Ponzi scheme that amassed millions of dollars from thousands of victims, many in the Western District.
This massive scam is one of the largest in breadth and scope ever prosecuted by this office. I want to remind the public to steer clear of ‘get rich’ schemes.
Here at BehindMLM we began tracking Zeek Rewards in 2011. In our September 21st review of Zeek Rewards, I concluded that there was little about the scheme’s business model that made sense.
A followup published two days later examined the investment nature of the business. As far as I know, BehindMLM was the first to go public with a detailed synopsis identifying Zeek Rewards as a Ponzi scheme.
And boy was the backlash from the MLM industry turbulent…
Five years, one hundred and sixty-seven articles and thousands of reader comments later, the closure Paul Burks’ guilty verdict brings is certainly satisfying.
As at the time of publication a sentencing date has yet to be scheduled. Burks remains free on bond in the interim.
Stay tuned…
So, another owner of a ponzi scheme gets convicted and will probably end up serving time in prison.
What will happen to all of the MLM players who brought in all of the money? Other than claw-back action against the ones who didn’t settle already at about half the money they stole, there is no criminal action against them.
It is my opinion this will not be the case with OneCoin promoters here in the USA. I believe the regulators are taking all the time they need to prove their case against the promoters in an attempt to make an example out of them.
In addition to the typical claw-back action, the regulators will file charges (similar to that of Paul Burks) against the top promoters of OneCoin in the USA.
And with this we have a full vindication of your views. Way to go, Oz.
Let the claw backs begin in earnest.
that was bloody quick work! hope the transcripts of the trial are available at some point, to fully understand how the case was argued.
up to 65 years! that is way tooo excessive in my view. i find the sentencing guidelines draconian, and IIRC there was some reform to these guidelines last year. i sincerely hope punishment meted out to burks will be rational and humane.
not sure, but i think this finding of guilt in the criminal case will enable the judge to make a summary decision in the civil case.
many congratulations to oz for his unrelenting coverage of zeek over the years. this has been a very interesting journey.
Sadly, there will always be those who will still argue for the legitimacy of ponzis. And many will never learn.
Judges rely heavily on the PSIR (pre-sentencing investigative report) prepared by the Probation Department. The Probation Dept. is not judicial in nature but is considered to be “law enforcement” and they have input into sentencing.
As I recall the statutory max on three counts was 20 years each, and the tax fraud conspiracy charge carried a five year max.
Between the Probation Department and the Judge, mitigating and aggravating factors will be considered. One of the two biggest mitigators are acceptance of responsibility and remorse so Burks must take on a whole new posture with the authorities now that he has been convicted or he will get hammered.
Regardless, Burks will never get 65 years. The prisons are bursting at the seams already.
I actually agree with you that the sentencing seems tough. The issue here is that this became such a huge and harmful scam and hurt so many that while his actions on their face seem minor, they had great effect.
What we really need is laws and authority for regulatory agencies to act more quickly in cases like this. I know, I know — too much government oversight, too much regulation and so forth, but this stuff is rampant these days.
65 years is the maximum he could get if the judge takes the extreme view and gives him the full sentence but its usually somewhat below that. If he had taken a plea deal, he probably would have looked at 10 years.
But fighting this, he has lost his chance and usually the government comes down harshly on those who try to fight them, and chances are Mr Burks is done being free in this life time and probably going to spend the rest of his life incarcerated.
You know, people said the same thing when Andy Bowdoin of ASD/AdCashGenerator was sentenced, also for running a Ponzi scheme.
He, too, had a long history of scamming people, just like Paul Burks. And just like Burks, he was past retirement age when he got caught and sentenced.
I don’t really have any sympathy for either one of them, they ruined a lot of people’s lives and probably did laugh all the way to the bank.
Their only true regret is that they got caught and now face what can be called a life sentence in federal prison. Both knew what they were doing was wrong, but they did it anyway.
i suppose one mitigating factor will be that he shut down zeek voluntarily and handed the key to the SEC?
IIRC burks has no previous criminal record either. he was out on bond throughout the zeek case and not considered a flight risk, and that may indicate to the judge that he is not a very ‘dangerous’ person.
An aggravating factor could be that he demanded a trial instead of admitting guilt. but i would disagree with this stance, as i believe everyone has the right to a fair trial and cannot be ‘punished’ for demanding one.
A big winner in this verdict was the Receiver. Several of the big winners in this were fighting giving back their winnings as they said Zeek was not operating illegally. This verdict took that defense away.
It is going to be interesting to see just how many rush to settle now and how many will still take it to court.
Personally I hope Trudi Gillmond does go to court, as I want to see her explain just how hard she worked for her money as she has claimed.
With this trial result, hopefully the Receiver will be able to get all the money back by the end of this year to be able to make the final payouts the first of the new year to the victims.
In sentencing, the judge will take a lot of things into consideration. His age, his wife’s health, his degree of remorse, how many victims tell their story of how Zeek ruined them financially and their only hope is the Receiver getting most of their money back, how much time the prosecutor is seeking, and of course how many character references he receives that are favorable.
My guess is he will get 10-15 years due to the sheer size of Zeek, which was 9 times bigger than ASD Cash Generator/Andy Bowdoin who did a plea deal and got over 7 years. Andy was also older and also was said to have an ailing wife.
The only reason why he was not a flight risk was because of his wife’s health, but so far I do not seem to feel he has shown any remorse for his actions.
One of his more caustic statements was when he said it wasn’t his fault people put their life savings into Zeek. He didn’t tell them to do that.
Didn’t go over well with his victims, and showed his arrogance. It was Paul’s Bernie Madoff moment as Bernie said the same thing when he was interviewed in prison.
The sentencing hearing will be his chance to show remorse or not. If he doesn’t then it could be 20 years. It is definitely going to be an interesting hearing.
You don’t get punished for demanding a trial. You get a lighter sentence in exchange for not demanding one.
uh, same difference?
also the difference in sentencing for an admission of guilt or demanding a trial can be huge.
IIRC in some older discussions about sentencing, the same crime could get you approx 5 years if you admitted guilt, and go up to 50 years if found guilty at trial.
this huge margin of difference makes it seem that demanding a fair trial will lead to excessive ‘punishment’.
Lose at trial = standard sentence.
Guilty plea (saving taxpayers time and money when you’re obviously guilty) = reduced sentence.
Where does “excessive punishment” come into it?
the criminal case charged burks with mail/wire/tax fraud and he was not charged with running a ponzi scheme and/or securities fraud.
the civil case of the net winners against the receiver is based around the argument that ‘zeek was not selling securities’.
burks being found guilty of mail/wire/tax fraud does not necessarily prove that zeek was selling ‘securities’.
i’m not sure if this a valid argument or whether the net winners will pursue this, but it is a thought.
The trial brief used by prosecution used “investment” no less than 10 times.
The only rebuttal defense had was “but they read the disclaimer…” which actually proves that Burks operated a scam.
In a way, this is a lot like Herbalife… HLF consented to reforms due to alleged violations of the FTC act… while it’s not literally a pyramid scheme, it was definitely fraudulent.
Paul Burks was not convicted of operating a ponzi scheme or illegal securities, merely fraud and conspiracy. They got him on the more general charge, rather than the specific type of scam.
Ah, but I do point out that the Feds did call it a ponzi scheme. Their title of press release was
Former ZeekRewards CEO Is Convicted Of Federal Charges For Operating $900 Million Internet Ponzi Scheme
So DOJ definitely thinks it’s a ponzi. Any one denying so is merely splitting hair.
a convict should be punished in accordance to the ‘crime’ and not on the basis of ‘saving time and effort’.
sentencing for the same crime cannot be so disparate, that a sentence can range from 5 years to 50 years depending upon whether an accused pleads guilty or chooses trial.
if the difference was a couple of years no one would would complain, and an accused could make his choice based on his confidence in the strength of his case [even a couple of years is a long time for an accused confronting jail time]
if the difference is a couple of decades, an accused who is financially weak or underconfident about ‘proving’ his case or is rattled by the prosecutions ‘threats’, could opt for a guilty plea, because the sentencing guidelines would lead to ‘excessive’ sentences and he is afraid of the ‘risk’.
all crimes are not ‘obvious’. an accused may be in ‘doubt’ about the strength of his case, in say a tax matter or a securities charge, where a lot depends on ‘interpretation’ of the law, but the disparity in the sentencing takes away his right to a risk free trial.
IIRC andy bowdoin made a plea deal just before his trial was scheduled, the prosecution had already put in most of the time and effort, and the actual trial could not have drained the federal treasury. yet he got approx 7 years whereas a guilty verdict at trial would have got him a much longer sentence.
so, its not even only about saving ‘time and effort’ but more about prosecutorial power and avoiding the ‘risk’ of the ‘excessive’ sentencing guidelines.
if burks was not charged or found guilty of running a ponzi/securities fraud, then how is it proved?
what am i missing? i need a better answer chang!
If they go to trial, they are.
If they want to save taxpayers time and effort because they’re guilty, they get a reduced sentence.
If they’re innocent they can have their day in court. No crying if you lose though and are given a standard sentence.
How much money was wasted indulging Burks in a criminal trial when it was obvious to all and sundry he was going to be found guilty? All those bullshit motions over the years, all that discovery production… it goes on and on.
And for what, a few hours of jury deliberation to conclude the obvious? Yeah, no sympathy here whatsoever.
what if they are ‘doubtful’ about their innocence or guilt.
should people who are ‘doubtful’ give away a few years of their life to a guilty plea, and not have their chance in court? should their ‘doubt’ cost them a gazillion years of their life, if they choose trial and are found guilty?
what does ‘justice’ have to do with ‘time money and effort’ anyways? you cant cut corners in dispensing justice.
Doubtful people don’t go to trial. There is no such thing as a doubtful plea, either you plead guilty or not guilty.
Legal resources are not infinite. If you’re guilty and save time and money, you get a reduced sentence.
If you’re guilty and go to trial, you get a regular sentence.
If you’re found to be innocent of the accused crime, you pay your legal bills and get on with life.
Sounds fair to me, I’m not the one suggesting Burks will in any way be punished for wanting a trial.
so where do they go? they can either take a guilty plea or get hammered by the ‘standard’ sentence because they ‘dared’ to doubt.
okay, fair enough.
i’m hoping burks doesn’t get punished in any way for wanting a trial and wasting ‘time effort and money’ and not taking a guilty plea.
i mean, what if he could be allowed to repay the state for the ‘time effort and money’ it had to expend? he could get a lighter sentence then and not the ‘standard’ sentence! same as a guilty plea!! that would be a neat solution to the ‘time effort money’ problem!!
More like ‘hopeful’ of a not guilty verdict.
Is it Canada where they use ‘not proven’ instead of not guilty. I wish they’d start using that in the US.
Nevertheless, I’m with Anjali on the sentence length much as I despise recruitment based opps. We are dealing with ‘willing victims’ and Burks wasn’t holding a gun to anyone’s head.
I also place some blame with the government themselves for not warning its citizens adequately about recruitment based schemes.
We need a prime time massive campaign, billboards, something equivalent to ‘Smoking kills’ and ‘Just say no to drugs’. Adding up the astronomical financial losses from Amway to Zeek et al., it surely warrants the attention.
When it comes to endless chain recruitment based opportunites, I see guilt as a collective effort under the current conditions. If I were the judge, I would consider this a mitigating factor.
As you point out the Receivership benefits from this verdict.
Only a few weeks ago, Bell motioned for summary judgment in the civil clawback suit citing the fact that court approved forensic expert hired on behalf of the net winner class found there was no defense he could assert.
Bell also mentioned that the named defendants had been defaulted for failure to respond. In other words neither the class nor the named individuals were going to, or were even capable of mounting a defense.
Combine that with Burks’ convictions for fraud … and summary judgment (based on North Carolina fraudulent transfer statutes) is virtually assured against the class.
Should summary judgment come as I expect named individuals, such as Trudy Gilmond, who decided not to defend (relying on the class to make their case for them) will be given no further consideration by the court and she may not argue otherwise. The money judgement against her will stand.
Under the circumstances, it probably take years for the Receiver to recover even a minor percentage of funds transferred to the net winners and so (in my estimate) any “final payout” to the net losers is years in the future and must ultimately represent only a fraction of the total claims they have against the estate.
The notion that criminals doubt whether or not they committed a crime is an absurd concept to me.
Life behind bars for the rest of his natural life should be a suffice sentence.
So the guy that axe murders 10 people and demands a trial should get a lighter sentence – just because he demands one?
And
The person that says he is innocent of killing his wife and demands a trial should get a light sentence because he demanded one yet gets proven guilty.
How does that work?
please allow me an example to show that accused being ‘doubtful’ is not an absurd concept.
some cases are simple – did you poke xyz with your knife?
tick the correct answer:
Yes/No
here^^ the accused hardly has room to be ‘doubtful’. he either poked his knife into someone or he didn’t.
some cases can be more complex – did you sell illegal securities?
tick the correct answer:
Yes/No
here^^ the accused may not be ‘absolutely sure’ of his guilt as securities laws are complex.he may feel he has a strong argument he wants to place before the court and has a fair chance of winning.
can he risk say 10 years of his life for trying to win this ‘fair chance’, or should he take a guilty plea for say 3 years of his life?
if i was doubtful, i would take the guilty plea, because guilt at trial would result in excessive punishment, just for not being ‘absolutely sure’ of my guilt.
crime justice and punishment, are much more complex than simple Yes/No questionnaires. when you are taking away a persons freedom, you have to give him a right to risk free trial, so he can do his damnest to defend himself with whatever slim chance he has.
if ‘money and time’ are your priority, save it all by not prosecuting him. either do justice or don’t do it, there is no room for halfbaked justice.
we have no way to ascertain for sure whether an accused is ‘doubtful’ or merely ‘hopeful’.
even if he is merely ‘hopeful’, he should have the right to a risk free trial.
Not when it comes to MLM.
Selling points on the promise of a passive ROI? It’s a security.
Not registered with the SEC? It’s an unregistered security.
If 12 laymen jurors can unanimously decide Burks was guilty of four indictment counts in under three hours, obviously it’s not complicated.
That they get. And cop the regular sentence if they lose (assuming there are no mitigating circumstances to warrant additional penalties by way of sentencing).
Still not seeing what the problem is here.
“Willingness to join opportunities” is a major part of the problem, but I don’t think you should use it as an argument for reduced sentences.
All the personal greed, stupidity, gullibility, etc. that exist out there is a different type of problem. It’s probably easier to set up a profitable fraud than it is to set up a profitable, legitimate business. But you cannot reduce a sentence based on how easy it was to defraud people.
If Paul Burks want to reduce his sentence, then he should argue that he did something to reduce damages to victims. He shouldn’t argue that they were “willing victims, easy to defraud”. He shouldn’t try to blame the government either.
Priority, no. Necessity, yes.
If you ever find that perfect world you wish to live in, let me know.
There is a need for a significant difference between the punishment for taking a plea deal versus the punishment for being found guilty at trial.
Otherwise, what would the guilty have to lose by wasting time and money taking a chance that they can get themselves acquitted somehow?
IMO, the system here in the U.S. often protects the rights of criminals more than victims.
I’d be perfectly fine if Burks received the maximum on every charge he was convicted of.
This wasn’t his first rodeo. He saw firsthand the failure rate of people in MLMs and then used that knowledge to create a fraudulent “business” where everyone would succeed, selling false hope to the naive and desperate as well as providing a tool for MLM heavy hitters to suck money from their lists.
The system will never be perfect.
Hey Anjali,
Are you willing to put up your money to backup your beliefs?
You, and everyone one else that believes in this “justice” can volunteer to pay extra taxes. The funds can go towards paying the increased expenses incurred by doing away with plea deals.
the ‘regular sentence’ is so high in accordance with the sentencing scale, that a trial becomes a very ‘high risk’ proposition.
a ‘doubtful’ or even ‘hopeful’ accused cannot risk his freedom by requesting a trial. over 90% accused make guilty pleas, and who knows how many of them were really guilty or just not ‘sure’ about their guilt.
thus high risk trials are unfair and do not serve justice well.
that’s okay. i see the problem here, and have explained it the best i can.
You’re splitting hair, Anjali.
Burks was convicted of four counts of fraud and conspiracy which resulted from him running a ponzi scheme.
The fact that he wasn’t convicted of a SECURITIES fraud is irrelevant. Securities fraud is a SUB-TYPE of wire/mail fraud. While it has its own separate section under Securities Act and Securities Exchange Act, DOJ/SEC didn’t have to use them to convict Burks.
Burks is now a CONVICTED SCAMMER as a result of being operator of ZeekRewards, which operated as a Ponzi scheme.
As explained in court, while Zeek did pay out about half a billion, it accumulated obligations of more than three billion dollars doing so. It’s a ponzi scheme by taking in money with false promises and used it to pay those who joined early.
It’s a bit like a murderer arguing he’s not a “killer” because he didn’t get his hands dirty (but used some other indirect methods).
or maybe ‘convenience’? or maybe the inertia of ‘habit’?
not possible to find such stuff. we only get the world we create.
the very large majority of judicial systems in the world do not have the plea bargain system. how do they manage to ‘waste’ so much time and money on trials?
IIRC paul burks has no previous convictions.
of course. but this doesn’t mean we have to suffer systems which have room for improvement.
Advocating that the US should abandon plea bargaining and provide “risk free” trials sounds great and fair (not really) until one also considers that the only way to do that is by VASTLY expanding the court system and allocating resources to it that might better be used elsewhere.
Insofar as I have read countries like Pakistan and India that have abandoned plea bargaining, arrest and charge much fewer criminals and only risk going to trial when the evidence is OVERWHELMINGLY in favor of the government (and where prosecuting is politically approved).
There are clearly economizing extra-judicial considerations at play in that which you disregard but which are tradeoffs the US is disinclined to make.
I ask you what country affords the style of mass “free risk” trials you advocate and still maintains the same level of public safety and procedural safeguards that the US does? What practical model are you looking at?
Nah. 60 years or whatever it is for a $900 mil Ponzi scheme sounds about right.
i am not advocating that the US should abandon plea bargaining altogether. every system has its strengths and weaknesses, and it is possible to increase the strengths and reduce the weaknesses by reform and improvement.
for example plea bargaining can be restricted to less serious crimes [brazil, india] which can be resolved via probation or community service or short prison terms etc, and help clear the dockets of the courts.
at least cases where the accused is charged with serious crimes and faces long prison terms, should be afforded the full due process of law and a risk free trial.
when a plea bargain or trial can lead to sentences as disparate as 5 or 50 years, there appears to be a visible imbalance in the system. the sentence seems to be disconnected from the crime.
so, you feel 60 years is sufficient punishment for a $900 mil ponzi scheme.
if burks had made a guilty plea and bargained for 7 years, would you feel he was sufficiently punished for the same $900 mil ponzi scheme?
you cannot possibly believe that either 7 years or 60 years are BOTH sufficient punishment for a $900 mil ponzi scheme.
If the Ponzi pimp wishes to insist they are innocent, go to trial and still be found guilty by a jury, then yep. They get the standard sentence.
Don’t like the standard sentence? Get it changed. As it currently is I have no problems with it.
He wouldn’t have got the same sentence as Bowdoin. But had Burks of admitted his guilt early on, shown remorse and co-operated with authorities, saving millions of dollars in DOJ, SEC and more importantly Receivership legal fees (with the ultimate aim of maximizing compensation to Burks’ victims), then yes a reduced sentence of 10 years or so give or take would have sufficed.
More hypotheticals from Anjalitroll ????
How unsurprising
* He didn’t plead guilty
* Hasn’t entered into a plea agreement
* hasn’t been sentenced,
* wasn’t charged with “running a ponzi”
* is “facing” UP TO sixty years imprisonment
Guys, gals, whoever…
Burks is only facing “up to” 60 years, and that’s only if he gets to serve the maximum for each of the four counts, and not simultaneously. He’s out on bail, so he’s not going to get any time served.
IMHO, he’s gonna get 10 years TOTAL, which means he may be eligible for parole in 5. Give him more and he’s gonna die inside. Give him less and people will be outraged.
i have no problems with an accused getting a ‘standard sentence’ if they wish to plead not guilty and want a trial.
BUT
the standard sentence should be Sensible, say 10% to 20% more compared to a plea bargain sentence, the difference cannot be a 5x or 10x multiple of the plea bargain sentence.
the risk of trial cannot be so ludicrously high, that an accused ‘effectively’ loses his right to a trial.
so yeah, ‘change’ the standard sentence and make it reasonable, and i’ll stop wailing and flailing.
You can’t only have 10% to 20% difference. Then every guilty tom dick and harry will roll the dice on a jury.
If you’re innocent, then have at a trial. If you’re a guilty SOB and you want to go to trial anyway then you accept the standard sentence.
A guilty plea sentence (with full co-operation) should make a guilty person risking trial unappealing. From the sounds of it this is currently the case, so working as intended.
burks handed over RVG to the SEC and the receiver, the receiver is funded from RVG assets, so i think burks duty there is settled.
if the net winners are litigating with the receiver, that is not burks responsibility. the SEC did not ‘prove’ securities violations, and settled with burks, and the net winner litigation is a product of that.
coming to his criminal trial, if burks had said ‘guilty’ and saved ‘time,money,effort’ 10 years is a reasonable sentence for his 900 mil ponzi scheme, in your view.
however if he commits the ‘second’ crime of blasphemy [says-Not Guilty M’lord!] and wastes ‘time,effort,money’ he can get 50 [!!] years More!!
logically speaking, it can be construed that the payment of the extra 50 years of his life are in lieu of of his ‘second’ crime of blasphemy and wastage of ‘time,effort,money’.
since the crime of wasting ‘time, money, effort’ is so bloody serious that it attracts 5 times the punishment of a 900 mil ponzi crime, it means that the resource of ‘time,money,effort’ is very very precious, and should be protected at any cost.
therefore, we must shoot the bastard.
i mean, really, you want to give burks Free lodging, boarding, medical aid, and hire a whole bunch of staff to look after him and keep him away till he dies? so much ‘time,money,effort’ wasted on waiting for a man to die? bah.
surely taxpayer money can be used for better things? if we can ‘effectively’ take away his right to defend his freedom via trial, we can take away his right to life also. why not walk the extra step, and save this terribly expensive resource of ‘time,effort,money’?
and you know what! before we shoot him we can force him to say “Guilty M’lord!’.
and, and, and, we can paint an upsidedown smile on his bloody face to reflect ‘Remorse’!!
hahaha.
You sound like you did some sort of crime and are planning your strategy to not make a plea.
Yet for what its worth it should be unappealing for a guilty person to want to drag this out in court and waste everyone time and resources to prove what everyone knows – THAT THE PERSON IS INCREDIBLY GUILTY.
Yet your so called risk free trial in favor of tiny tiny sentencing just because they decided to waste everyone time by rolling the dice and hope they win against all odds.
How is that fair to the guilty?
Punishment should suit the crime. Are you taking into account how many lives this person has affected because of his actions?
Just because the victims didn’t know it was a scam is no excuse for what he knew he was doing.
Stop trying to play this as a simple game of numbers against one person when its not.
Too many that are guilty abuse the system by trying to drag things out in court only to lose and need the sentence to prove just that you did the crime now get the time.
Since when does justice have to be fair – the criminals sure are not when they do the crimes.
Do you suppose that defendant’s will help clear the dockets out a sense of civic obligation?
No sane defendant, even for a “less serious crime” is going to plead guilty instead of going to a “risk free” trial. Its illogical and contrary to human nature to do that … unless there is some advantage (some form of relief) or benefit to the accused for doing so.
Your alternative “system” may be more informal or use a fixed discount rather than a bargained discount , but it must inevitably amount to the same thing… a lesser penalty for cooperation.
But didn’t enter a guilty plea, resulting in millions spent on a criminal trial and related SEC and Receivership lawsuits.
Not “more”. 60 is the full sentence, 10 is a reduction. There’s no “more” over the standard 60 year sentence.
60 years (or whatever it is) is the benchmark. Stop considering the guilty plea reduced sentence as the benchmark of a standard sentence, it’s not.
The 65 Year number is the statutory max. He could serve all four counts concurrently, which means he would do 10. He could get time off for good behavior, which means he would actually serve about 6 of the ten. He could be eligible for early release which means he could be out in a few years, or be granted parole or be sentenced to some time in prison and then serve the rest on probation.
There is nothing hard and fast here, and the judge has considerable latitude in sentencing.
At some point in the future Burks will probably be eligible for release due to age and infirmity. The prison system and the taxpayers do not want to house care and bury this guy if he can be released into the care of his family.
I realize you are trying to make a point but you undermine yourself by insisting that Burks will do 65 years because he did not say Yes M’lord.
Its not true. He will never do 65 years, nor is it likely that a younger man would do so in identical circumstances, however where a person clearly feigns innocence, is convicted at trial and shows no remorse and has prior convictions, the sentence could approach the statutory max since that person might be regarded as a continuing danger to society.
I don’t think Paul Burks received any plea bargain offer. He didn’t have anything to offer himself.
He initially had something to offer in the civil case “SEC vs. Paul Burks & RVG”. But he didn’t have much to offer in the criminal case. That’s why he tried to delay it for as long as possible.
Every defendant in a criminal case has something substantial to offer during plea bargaining… namely a guilty plea that relieves the prosecution from having to prove its case at trial.
This is of substantial value to the government since trial preparation can take years, is very expensive, and the outcome is never 100% certain. There can be no doubt that the government offered Burks some kind of a deal. They always do.
Burks just didn’t take it.
Burks also probably thought his age and his smooth talking could convince a jury of his innocence. But what most dont realize is that when you go in front of a jury from an indictment, its almost like you are already guilty and you have to prove your innocence.
The preponderance of guilt from a juror’s perspective is that why would the government indict you if you were not guilty.
Again, most jurors probably being chosen from a jury pool of peers (no in depth knowledge) of ponzi schemes/online advertising schemes etc depend on the prosecutor and defense to lay it out in layman’s terms.
And in a case like this with 100s of millions of dollars of losses and victims, its pretty much a slam dunk case when you take it to trial that you are going to lose.
When this trial started in one of the earlier posts, I mentioned the same that this would take no time and not much evidence will be presented when its done and Burks will be found guilty.
Over 90% of jury cases end up with a guilty verdict.
Like Hoss said, Burks was definitely presented with a plea deal. Thats pretty much standard in most of these cases unless its something egregious like people have lost their lives etc and he choose to refuse.
Now he is going to pay the piper with a long jail sentence, possibly the rest of his natural life in prison.
So, had Herbalife not settled, do we think the CEO would’ve gone to prison?
oops.
don’t tell anyone.
please?
since your basic idea of justice is warped, i’m going to ignore your whole comment.
justice is based on the idea of fairness, and if you’re insisting that justice need not be fair, you are not talking about justice at all.
This from the person that says 10% or 20% tacked on to sentences is more than fair and just.
Some people just aren’t cut out for justice and being judge and jury too.
Welcome to the real world where everything isn’t always the way you want.
It is nice to dream but lets leave it at that and out of the justice system.
Was a civil case from memory, not criminal.
what i meant was, that since plea bargaining helps reduce the load on the judiciary, it can be put to limited use in less serious crimes like misdemeanors and low level felonies that attract sentences of 1/2/3 years.
the accused can be offered probation, or community service, or a fine, or reduced jail time[for repeat offenders], or a combination of these. the trial is Not risk free, it has jail time if found guilty.
the court docket can be cleared to some extent by these ^^ kind of cases.
the rest of the serious crimes that attract longer jail terms, should compulsorily be resolved by a finding on merits in a risk free trial. if this is not acceptable, at least make sure that the disparity in sentencing is reduced to 10-20%.
if it requires money to be spent or requires more courts to be set up, then So Be It. if it delays justice a bit, So Be It. human life and liberty are sacrosanct and cannot be subverted by silly excuses. we usually find the money and time, for things we set our hearts on.
particularly in the case of the US, the american bill of rights explicitly guarantees several safeguards to the accused, two of which are:
-the right not to be compelled to incriminate oneself
-the right to a speedy and public trial
yet the judicial system of over 90% plea bargains, is in direct contradiction to these guarantees. so something is broken and needs fixing, or the bill of rights needs some changing.
according to a study across federal courts, the average difference between a plea deal sentence and a trial sentence is one hundred percent [100%], and this is why over 90% cases are settled via pleas.
the disparate sentencing is a deterrent that steals the right of an accused to exercise his rights for a trial. this is unfair, and ‘fairness’ is the core principle of justice.
actually, this was from a person who is willing to ‘negotiate’ change.
plea bargaining has a long history and is firmly entrenched in the judicial system. it has supporters and it has detractors with strong views on both sides.
an approach of ‘give and take’ is a better way to resolve an impasse between two sides.
personally, i don’t like plea bargaining one bit, i view it as an infringement of human rights. but i am willing to make ‘concessions’ to at least initiate change.
You know more of the details than most, and certainly more than I, but I would say no. Here is why:
Absent a settlement any ruling against HLF, the company, would be based on a finding that a preponderance of evidence proved the government’s case.
On the other hand a criminal prosecution of the CEO would require a judge/jury to be convinced beyond a reasonable doubt (this is a higher standard of certainty) before convicting.
In defending the CEO against criminal charges the defense would surely call Carl Icahn (legendary investor) and ask if he thought the CEO was instrumental in perpetrating a fraud when he invested millions into the stock.
I assume Icahn’s answer would be no.
This answer plus other confusing testimony and data would create such uncertainty in the jury’s mind that they would never be able to overcome reasonable doubt and convict the CEO of a fraud.
In addition, HLF is a long established US stock corporation with multiple layers of protection for the stockholders, board of directors and CEO and it is very difficult to pierce the corporate shield.
Not only did Burks perpetrate a fraud but he was an amateur in most other respects. By forming an LLC, he provided his company assets with some protection against civil suits but he did virtually nothing to protect himself as its manager. He neglected to provide a protective corporate structure for himself and ran Zeekler like a sole proprietorship. HLF and its CEO are not likely to have made the same mistake.
burks did not plead guilty, as he has a right to protect himself, and this is nothing to be frowned upon.
he did the next best thing by accepting the SEC offered choice of ‘neither admit nor deny’, which allowed the receiver to distribute RGV assets among zeek investors. he did his best to cooperate while protecting his self interest.
the disparity between a plea deal sentence and a trial sentence is so great, that the difference appears to be a ‘penalty’ for demanding a trial, rather than fair punishment for the crime committed.
IMO, the hideous lengths of the ‘standard sentences’, is an artificially raised bar, to chase accused into the plea bargain system.
the sentences offered by the plea bargain system, are more rational and are accepted as ‘sufficient’ punishment for a crime, which explains why over 90% of the accused accept this system.
if the plea bargain system was awarding unfairly low sentences, the collective conscience of the people would have caused the sentencing to move upwards. instead the opposite has happened, the ‘standard sentences’ awarded via trial have been forced down to make them more rational, by reforming the ‘sentencing guidelines’.
this^^ tells me, i have reasonable cause for arguing that the extreme sentences awarded as ‘standard sentences’ at trial, are illogical, irrational and function as ‘penalty’ for demanding a trial.
in fact, i would go so far as to suggest, that if the plea bargain system was dropped completely, and all cases were resolved via trial, these extreme ‘standard sentences’ would disappear, and the ‘new’ standard sentences would be very close to the plea deal sentences on offer today.
developed societies like the US would never accept such inordinately lengthy sentences as a standard punishment, because these sentences are immoral and cruel, and the human conscience is more inclined to fairness.
At the risk of a standard sentence if he’s found guilty.
That happened and so I still don’t see what the problem is. It’s not like the standard sentence changed after he was indicted.
Only if you start thinking the plea sentence is the standard sentence, which it isn’t.
Right. And instead of four years for a trial we’ll be waiting forty.
Black and white cases of Ponzi fraud like this should be settled via a guilty plea. There needs to be a significant difference between a plea sentence and guilty verdict sentence, otherwise every guilty person will roll the dice in court. Not because they believe they’re innocent but because “why not?”
That’s not how the legal system should work.
If you’re innocent, there’s nothing stopping you from going to trial and proving it. Someone being sentenced at trial only affects guilty people (strictly speaking, within the narrow context of obvious wire fraud).
That is no different than what the US already does, so the question is whether sentences meted out after conviction/post trial are so harsh that defendents are in effect forced to accept plea bargains to avoid the possibility of a conviction at trial.
At this point I don’t see any consistent way to ensure a plea bargain sentence is is within any given percentage of the statutory maximum sentence which is the starting point for sentencing post trial. In the plea bargain stage the DA negotiates a deal and submits it to the judge for approval. Mostly judges honor the will of the parties.
Conmversely, conviction at trial sees the judge consulting the sentencing guidelines and adjusting up or down after considering a myriad of factors.
At the point the DA is negotiating a bargain, nobody has even heard a victim impact statement, heard from character witnesses, from the victim or the families, the probation office … in other words almost everybody the judge hears from and considers before deciding the post trial sentence.
So how is anybody supposed to say the plea bargain is too high or low or within some arbitrary percentage when they have no idea what the post trial sentence will even be? There is no way to compare the two until the trial is over and sentence is passed.
Defendants with competent counsel receive all the evidence against them that will be presented at trial as well as any exculpatory material the DA possesses.
Any defendant should have a pretty good idea which way the wind is blowing before making a decision to bypass a plea bargain. Knowing the facts is the primary reason why so many plea bargains are accepted.
None the less, Nobody is going to deny the accused a trial, but most will be advised against it without a compelling reason because statistically 90%+ of those who go to trial will be convicted anyway AND thus face the statutory sentencing max.
In any event the Supreme Court said plea bargaining was Constitutional (with caveats) in Brady vs United States so this is what we have to work with.
I predict Burks gets 18 years in Federal Prison.
if this^^ the ‘correct way’ for the legal system to work, then how come only a handful of countries have adopted teh plea bargain system.
a concept like ‘democracy’ has been adopted mostly by the whole world, but a concept like the ‘plea bargain’ system has not received such support?
even the few countries that have adopted the plea bargain system, have done so very tentatively, through very limited use, and keeping the difference between plea bargain sentences and trial sentences at 20-25%.
the reason for the unpopularity of the plea bargain system lies in its inherent unfairness, IMO.
most of the world is comfortable with justice via a risk free trial, and things are chugging along just fine, if not perfectly. the imperfections are made up for, by the protection of human rights.
but boss, we seem to be at opposite ends of the spectrum here, and it would be polite to agree to disagree, to avoid repetition of our views.
No idea and don’t care.
Or not committed.
We’ve only discussed the guilty, but how about the innocent who get indicted?
Many innocent people have accepted pleas for fear of that lengthy sentence. False eye witness testimony and circumstantial evidence can be very compelling. Anjali, I get your point.
@Hoss
Thanks for that explanation re Herbalife, and I guess that’s the system at work. Surely HL has caused harm to more people than Zeek, but only Burks goes to prison. Talk about unjust.
One coin will be next. The big ponsi floathing around there at the moment. Suprised it’s still allowed to keep going.
Its gonna suck for him.
I hope somebody told Burks when he’s in the shower, don’t bend over.
according to judge jed rakoff, a federal judge who has been very vocal in his criticism of the plea bargain system, and the lengthy sentences thrown up by the sentencing guidelines, between 2% to 8% accused plead guilty, while being innocent of the crime.
the prosecutor has the weight of the state behind him, he can threaten to drum up extra charges against the accused which can lead to a lengthy post trial sentence, and the ‘imbalance of power’ between the accused and the prosecutor, leaves the accused with no choice but to accept the plea bargain offered.
even if this percentage was only 1%, with around 2 million americans in jail due to plea bargains, it puts the numbers of innocents pleading guilty at 20,000.
how can this^^ number be excused? is it collateral damage for the ‘greater good of the many’? 20,000 lives, reputations, futures and families irreparably damaged because we want ‘instant justice’ without expending ‘time, money, effort’.
what is the ‘value’ of these 20,000 lives?
nybooks.com/articles/2014/11/20/why-innocent-people-plead-guilty/
Have you ever heard of Brian Banks. He took a Plea
Ever heard of Brock Turner. He went to trial.
Search if curious.
if burks gets anything up to 10 years i wont be complaining. promise.
but i’m just worried about a recent sentencing precedent from the same north carolina court, where burks is due to be sentenced now.
in some old zeek threads we had discovered the case of keith simmons, who got a 50 year sentence for a ponzi scheme worth approx $35 mil. like burks, he did not plea bargain and opted for trial.
simmons took in about 35 million, paid out about 19 million, around 4 million worth of his properties were forfeited at the end, so the net loss of his ponzi run approximated around 12 million.
he was found guilty of all charges, and his sentence terms for the various counts were to run consecutively and not concurrently.
simmons had no prior convictions. at appeal his sentence was reduced to 40 years.
if simmons got it so bad, what hope does burks have?
None, hopefully.
Guilty Ponzi scammers aren’t supposed to have hope.
yeah. this case was debated quite hotly on social media here in india too.
its a pretty unique case, with the accused and the victim both being completely sozzled and no verifiable account of what really happened. i guess the judge gave the accused a sort of ‘benefit of doubt’.
but a study across federal courts have shown that trial sentences are at an average 100% higher than plea bargain sentences. so cases like turners may be far and few between and an exception rather than the rule.
yes sir, if simmons got 50 years for a 35 mil ponzi then burks should get around 1500 years for a 900 mil ponzi.
its all right, we’ll embalm him and ensure he does his time 🙂
I predicted 12 years before I saw the indictment, but I believe the $108 million tax fraud will add some extra to his sentence.
It’s not only about running a Ponzi scheme. It’s also about “conspiracy to defraud the USA”.
Well yes he did, but ONLY where sentencing was concerned and that’s the point.
You cite this fellow in North Carolina that received 50 years “because he went to trial” but its not that simple, and I’ll refer back to the way judge’s assess the aggravating and mitigating factors to explain why such an outcome was possible, and perhaps even just.
As I recall the North Carolina man who received 50 years (reduced) for running his fraud remained obstinate and exhibited no remorse or conciousness of guilt.
Turner, on the other hand went to trial and received, not only significantly less time than the statutory max but probably less time than if he had accepted a plea bargain.
I acknowledge that these two cases are outlyers which reflect the extreme limits of judicial discretion in sentencing but its seems to me that the Turner case illustrates that an accused can defend himself at trial, lose and still receive fair and humane treatment under the law.
if burks chooses to appeal his conviction, he has a window of 14 days to express his intent in writing.
i’m pretty sure he will appeal, as the conviction reversal rate [in part or full] is around 31% for defendant appeals.
the reversal rate of a conviction from a jury trial is higher than the reversal rate of a bench trial. this explains why burks opted for a jury trial and not a bench trial.
did the sentencing order mention simmons lack of remorse as an aggravating factor? i don’t recall if this happened in writing. i think we ‘assumed’ that simmons got a tough sentence because he probably did not express remorse.
simmons ponzi targeted the ‘elderly and vulnerable’, and this may have played a role in the tough sentence he got.
Man this is great news. Been away from the Zeek drama for quite a while, but glad to see this closure.
Did Dawn or any of the other higher-ups also get convicted?
Yes. Dawn and her son both plead guilty to something or other. Those three were the only one’s criminally charged though.
Shame, because it seemed like there were so many others involved in the scam. Oh well, as long as the major players got nailed.
Slowly progressing towards a sentence. Pre-sentence report was filed on October 13th (under seal).
Objections are due by the 27th so hopefully we’ll get a sentence in November.