When the SEC busted the $600M Ponzi scheme Zeek Rewards, one of the myths busted was that the daily ROI Zeek paid out was based on ‘up to 50% of (the) daily net profits‘ the company brought in.

This was a key component of Zeek’s affiliate’s marketing efforts, with many investors brought into the scheme on the impression that what the ROI they were being paid daily was generated via legitimate sales to actual customers.

Of course those customers didn’t exist (or those that did weren’t buying anything with their own money), and after going over “hundreds of thousands” of Zeek Rewards documents, the SEC revealed that

In fact, the dividend bears no relation to the company’s net profits.

Instead, Burks unilaterally and arbitrarily determines the daily dividend rate so that it averages approximately 1.5% per day, giving investors the false impression that the business is profitable.

In essence, Paul Burks sat in his office and manually entered in a daily ROI percentage, that had nothing to do with sales revenue and everything to do with keeping his investors happy.

And by happy, we of course mean ensuring they were paid enough over 90 days to sustain their Ponzi point balances.

It is this disconnect from Zeek Rewards’ net profits (which was 98% affiliate funded), that resulted in Zeek Rewards paying out $162M and only receiving $160M in during its last month of operation (July 2012).

Given a few more months no doubt the money out would have eclipsed new investment money coming in and the scheme would have collapsed organically – most likely why Zeek’s CEO, Paul Burks, chose to settle with the SEC rather than deny he was running a blatant Ponzi scheme.

For those of us analysing Zeek Rewards for months prior to the SEC shutdown, it was evidently apparent that the daily ROI had nothing to do with the company’s revenues.

Time and time again it was observed that during time of outages (of both Zeek Rewards and their penny auction Zeekler), the daily ROI paid out to affiliates never wavered.

Logically, if Zeekler and Zeek Rewards were down for over 24 hours, no revenue (bid sales or otherwise) would enter the company. Yet miraculously, the daily ROI paid out to affiliates never missed a beat and remained relatively consistent (within a few decimal percentage points).

On other occasions it was observed that the daily ROI paid out to affiliates was literally double of what should have been paid, strongly indicating that manual-entry of the daily ROI percentage was occurring, as opposed to it being tied algorithmically into Zeek’s daily profits, as claimed by the company.

This was an ongoing observation, with any mention of it to Zeek Rewards management returning the familiar claim that how they generated the daily ROI was a “proprietary secret”.

As such when the SEC revealed Zeek’s daily ROI was just Paul Burks sitting in a room punching a slightly different percentage to pay affiliates each day (in an attempt to make the daily ROI percentage appear random), it came as no big surprise.

Perhaps also not so surprising comes the observation that JubiRev, touted by management as “the standard-bearer” of the MLM revenue-sharing niche in wake of the Zeek Rewards Ponzi aftermath, is now also experiencing abnormalities with the daily ROI it pays out affiliates.

Shortly after JubiRev paid out its affiliate their daily ROI yesterday, those paid began to discuss the abnormally high return:

Has anyone seen the DLB today? Holy cow!!!!!!!

IT’S A WHOPPING 0.02414 RPP. In another foreign language I think it reads 2.41%

What an absolute great shocker!

Typically JubiRev affiliates have been paid an average of between 1.3%-1.4% daily, resulting in the suspicion that perhaps the company had “accidentally” paid them two days worth of returns.

Is this a glitch lol? I am happy with 0.013 – 0.014, This is way too high.

Within two hours of being paid out the ROI paid out was retracted by the company with a more “believable” ROI percentage recorded as being paid out. The JubiBucks paid out to affiliates however remained unchanged and as I understand it, at the time of publication, has not been rectified.

Some affiliates automate the whole dumping of JubiBucks on customer accounts so retracting given away JubiBucks can pose logistical difficulties if enough affiliates gave away the incorrectly paid out JubiBucks.

Similar to Zeek Rewards, JubiRev claim their daily ROI is ‘based on the company’s Daily Commissionable Sales Volume and other metrics‘, with the company paying affiliates ‘up to 50% or more of this bonus through our JubiRev Daily Leadership Bonus system daily‘.

On the few occasions errors appeared with Zeek Rewards’ daily ROI the company either quickly retracted the payout as JubiRev has done, or let it slide and reduced the ROI paid out over the following day(s) (the “Paul Burks sitting in his office and daily making up the numbers” effect).

Is JubiRev’s daily ROI actually tied into their “Daily Commissionable Sales Volume” (suspected like Zeek Rewards to be mostly affiliate-funded), or it there somebody sitting in JubiRev HQ simply entering in an arbitrary figure each day?

The crux of the revenue-sharing model is a company’s ability to pay out a high enough return over a specified number of days (85-105 in the case of JubiRev), to ensure affiliates who are 100% re-investing their ROI can grow their points balance before said points expire (85-105 days).

If we use the minimum expiry period for JubiPoints, at 85 days this calculates into a minimum daily ROI average of 1.17% to be paid out.

Paul Burks worked with 90 days but the concept was the same, punch in a number above the required daily average (or adjust if you want to pay out numbers below that average and above to give the impression the figure is tied to sales volume), and pay out your affiliates enough that they can grow their point balances and skim a bit off the top. Zeek Rewards strongly recommended affiliates re-invest 80% of their daily ROI and withdraw 20%.

Is the term “other metrics” JubiRev use simply code for an employee manually entering in the daily ROI paid out to ensure 100% re-investment JubiPoint growth over 85 days?

All we need to see now is the JubiMax website go down for a day or more and if the JubiRev ROI remains consistent we’ll literally be witnessing history repeat itself.

But, as the similarities between Zeek Rewards and JubiRev continue to pile up – the company maintains that it indeed differs from Zeek Rewards and can not be fairly tarred with the same Ponzi scheme brush.