56.7% of Zeek Rewards ROI payouts recovered
In the Zeek Rewards Receiver’s third quarter report for 2013, a “settlement conference” was proposed for January 27th, 2014. This date was later granted, however as of yet there’s been no word on how it went down.
Filed on the 30th of January 2014, the Receiver’s fourth quarter report for 2013 makes no mention of the conference, however there is an update on pending clawback litigation and ongoing settlement negotiations with Zeek’s top affiliates.
The Receiver filed a Request for Leave to Institute Actions and For Order Setting Initial Conference on December 11, 2013. The Court granted the Receiver leave to institute clawback actions on December 19, 2013, allowing the Receiver to file clawback actions at an appropriate time in the coming weeks.
Nearly eighteen months into the life of this Receivership, the Receiver is on the brink of filing the first legal actions.
Whereas it seems those affiliates who believe their Ponzi returns are rightfully theirs will battle it out in court (and eventually lose), other net winners chose to settle with the Receiver in the fourth quarter:
The Receiver entered into settlements with 10 additional net winners during the fourth quarter, bringing the total number of settlements to 179.
These additional 10 settlements total $545,300 on $892,549 in net winnings (61.09%).
A 61% recovery might seem a bit low, but for affiliates who lost money it’s at least some funds that will ultimately be returned to them. In total, the current recovery percentage from Zeek’s net winners stands at 56.7%.
Also clarified is the current status of the Receiver’s efforts to recover funds held by payment processors:
The Receiver continued during the fourth quarter to investigate the financial information of the Receivership Defendant and to marshal, identify, and secure potential assets of the Receivership Estate.
Coordinating with the United States Secret Service (“USSS”), the Receiver Team continued to work with various e-wallet vendors, payment processors, and financial institutions.
On November 8, 2013, the Receiver deposited $855,532.84 seized by the USSS from LST Financial, a payment processor for e-wallet provider NxSystems, Inc.
On December 18, 2013, the Receiver deposited $5,374.32 from the return of gift cards that were found at the Rex Venture Group facility.
On December 24, 2013, the Receiver deposited $1,181,253.29 seized by the USSS from First Premier Bank, which had been holding the funds for check processor Western Clearing Corporation.
The Receiver also deposited a net total of $2,414,294.84 into the Affiliate Account during the fourth quarter, which is comprised of payments from various financial institutions for checks and other instruments on which payment had previously been stopped.
Specifically singled out later in the report are NxPay, Payza and SolidTrustPay:
The Receiver obtained additional information, including detailed transactional data, from NxPay and Payza to allow FTI to reconcile the flow of funds and confirm any outstanding amounts, including any improper transfers or withdrawals of Receivership Assets.
With respect to NxPay, the Receiver Team identified an outstanding amount of approximately $12 million, which includes a previously-unaccounted for $6.7 million transfer to NxPay’s account and additional funds that were not turned over after the Freeze Order was entered.
In addition, as discussed in the section on Foreign Accounts below, the Receiver Team has analyzed the additional information received from Payza, updating its reconciliation to determine an outstanding amount of approximately $13 million.
The Receiver Team obtained detailed transactional data from Payza to assist in the
reconciliation of the outstanding funds associated with the previously reported foreign account.
Based on our records and analysis to date, the funds outstanding that are being held in this foreign account total approximately $13 million in Receivership Assets.
The account holder is the foreign affiliate of the payment processor that facilitated the flow of funds. The Receiver continues to investigate the relationships and flow of funds between these entities and to work with these entities and government officials to recover these funds.
The Receiver Team (also) continues to investigate Solid Trust Pay to determine whether there are outstanding funds to pursue.
The mention of Payza is of particular interest, as they recently cut off their US clients from their funds under particularly murky circumstances. To date nobody US government agency or Payza themselves have clarified exactly what led up to Payza’s business operations being abruptly halted in the US.
The hard numbers closing out 2013?
As of December 31, 2013, the Receivership Estate held approximately $89.7 million in the Affiliate Account, approximately $230.9 million in the Seized Asset Account, approximately $466,000 in the Pre-Filing Account, and approximately $2.1 million in the Settlement Account.
No additional word on when affiliates will start to see their funds returned to them, but I imagine after the Receiver has wrapped up its payment processor and clawback litigation finally begins, that it won’t be much more of a wait.
Anybody still investing in MLM Ponzi schemes (you know who you are), and the payment processors handling money for the companies would do well to take note. If your scheme manages to take off and break into the mainstream, this is what happens.
Update 3rd February 2014 – More of an aside than an update, Zeek’s COO Dawn Wright-Olivares and stepson Daniel will be appearing in court this Wednesday.
(Wright-Olivares) will appear in federal court Wednesday, along with her stepson, 31-year-old Daniel Olivares, who’s pleading guilty to securities fraud conspiracy.
U.S. District Court spokeswoman Lia Bantavani says prosecutors couldn’t discuss details of the case because it’s an ongoing investigation.
Both Dawn Wright-Olivares and Daniel Olvares have already plead guilty for their part in the operation of Zeek Rewards.
here’s something we didn’t know… Paul Burks used to hawk Amway, and Dawn used to be a Mary Kay girl.
http://www.charlotteobserver.com/2014/02/01/4657316/850-million-ponzi-scheme-player.html
Still waiting for the receiver to notify me to pay back my winnings. Would have thought that he would’ve gotten around to it by now..
From the Receivers’ 2013 third quarter report:
You must initiate that contact yourself. If you have net winnings > $1,000 you should have received a general e-mail to the same address as you used as a Zeek affiliate, telling you that May 31st 2013 was a deadline for voluntarily settlements. But he will still accept settlements after that date.
Settlements were typically in the range 50%-80% of net winnings. “Money in hand” settlements typically had better conditions than “pay it down over 12 months”.
In the current situation, the claims will first need to be handled in court before you will receive a personal claim, e.g. to prove the existence of a Ponzi scheme and fraudulent transfers. It will be handled as a class action lawsuit, the Receiver vs unnamed defendants of a class.
It should normally not be about specific amounts, but about whether the claims are valid. That will prevent individuals from filing individual lawsuits about the validity of the claims.
Then you will probably receive a claim for the specific amount, probably for the full amount, supported by a court order stating the validity of the claim itself (the specific amount can still be disputed). Then you can dispute the amount but not the claim itself, and you can settle the amount.
If you want to get finished with the case, a voluntarily settlement can be recommended. That is if you will accept the claim itself as valid, if you don’t want to dispute the claim in court.
Most people will probably want to dispute the specific amount, the specific claim against themselves. But I don’t think many will dispute the validity of the claim itself.
AMOUNTS THAT CAN BE DISPUTED
* If he has included the false taxable amounts for 2011 in the full amount, the amounts stated in the false 1099.
* Payouts to frozen e-Wallets. That was corrected in 2013, but there may still be some incorrect amounts.
* Other incorrect amounts.
* Money paid in taxes CAN be exempted from the claim, but I don’t think the Receiver will agree to that.
* If you didn’t know Zeek Rewards was a Ponzi scheme before it was shut down, and already had spent the money when it was shut down. That argument CAN be used to some degree to partly reduce the settled amount, but the argument must be 100% true, and you should be able to document that the winnings were used to support livelihood.
Some additional info can be found in the court documents, e.g. the list of settlements posted in June 2013, ZeekDoc150-2.pdf.
https://sites.google.com/a/asdupdates.com/files-website/zeek-rewards-sec-case
The different “Quarterly Reports” also have some info about the progress of the case, e.g. what type of questions people have asked and where potential incorrect amounts can be found. I mentioned the 1099 for 2011 as an example in post #4.
The purpose of settlements is to reduce the risk of additional losses / additional costs for BOTH parties, and to resolve potential disputes and finish the case.
You must normally have something to OFFER, and the other party must have something too. “Money in hand” is a more valuable offer than “pay it down over 12 months”.
The earliest settlements seemed to have used the idea “go for 80% of the claim, but accept 67% to close the deal”. That range was later expanded down to “accept 50% to close the deal”.
The amount involved may affect the settlements.
* Too high to be settled at a favorable rate.
* In the right range, worth negotiating.
* Too low, not worth negotiating.
Does anyone know what percentage of requests for refund the current seized assets are?
Have losers that filed over 10,000 been notified yet?
I know someone with smaller claim that has but I have received nothing, mine was somewhat over due to fees but not alot. thanks everyone.
If you filed a claim via the online portal and it is accepted and approved you may recieve roughly 50% of your net loss back within a few months. Much smaller percentages of net losses may be tendered to you over succeeding years. It could easily take another ten years before the Receivership is dissolved.
Net losers were required to file claims via the Receiver’s Claim Portal. I have seen no indication that notifications of claim validity are related to dollar amount.
Zeekrewardsreceivership.com has a January 18 update about it, e.g. about how to check the status yourself.
You’re probably in that group of “Additional affiliate claims”. They will be finished “in the next few weeks”, counted from January 18.
Zeek Receiver has filed Complaints against close insiders, Burks et al (actual and exemplary damages requested.) Bell informs judge that other culpable promoters and enablers will be sued as well
Also, a seperate Complaint was filed naming about 20 of the biggest net winners as class representatives as well as the defendant class itself, consisting of roughly 9000 individuals who profited by at least $1000.
The following is excerpted from the Defendant Class Complaint:
The interest clock is running.
Article is live: https://behindmlm.com/companies/zeek-rewards/clawbacks-filed-against-zeek-insiders-winners/
I still have not heard one word on zeeker. I lost over 4000.00 dollars. I did fill out the paper by the due date and it has almost been one year. They never return my emails. do you know what i can do. Thank you.
(Ozedit: email removed)
@Dennis
Double check how you’re getting in touch with the Receivership via their website. I hope you filled in your form correctly.
From memory the Receivership is still working through some of claims as they weren’t straightforward (missing data, fraud, incorrect dollar amounts etc.).
Correct, they don’t return e-mails or voice mails, because of the huge number of people involved.
Source: Claims FAQs, ZeekRewardsReceivership.com.
The Status Check Link can be accessed at the following address (disabled link):
cert.gardencitygroup.com/zrwdet/fs/home
Source:
ZeekRewardsreceivership.com – January 18 2014 update (currently listed on the Home page, as number 2 of 2 updates.
The newest update is from March, about Class action lawsuits against insiders and net winners.
claim deterimation says accepted? I was one of the ones that lost money. But I haven’t heard or recieved any email notification when I logged in it just says accepted.
So how does this process work are we recieving a form of a check in the mail since it was accepted soon? Or has that not been determined yet?
Now accepted means they approved my claim and I’m good? Or does that mean they just mean they recognize the claim and its on file? Its very confusing.
So I guess to sum up what I mean. I just want to know if this is something that is still being decided on my end or if it has been decided and I’m on the verge of recieving some (or all) of my funds.
@nater
If it’s been accepted then I think you’re waiting on the Receivership to secure as much funds as possible before they start paying people. I’d just sit tight.
Irritating that it takes so long but that’s Ponzi cleanup 101. Zeek’s records were horrible and their top winners are looking to fight the Receivership every step of the way. Already some have lawyered up for the upcoming meeting.
Your claim has been accepted (you’re good), but it will probably go a long time before you will see any money. You may receive it in portions.
The same website should normally keep you updated about the process. “Now accepted” was a rather short update, but an important one.
The best source for information is probably the Receiver’s own website zeekrewardsreceivership.com, e.g. the different FAQs and updates you can find there. That’s the MAIN site for more detailed information to the whole group of net losers / other people, but it won’t contain any individual info about your claim.
You will need to use BOTH those websites to keep yourself updated. You will probably also receive e-mails?
Don Ryan’s website have most of the court documents. The quarterly reports from the Receiver can be found there, and they can tell you about the case itself and plans for next steps.
We have updates from time to time = new articles if there’s anything to report (of general interest). We do not focus on the individual claims or the individual clawbacks. It’s not our PRIMARY focus, you will probably find other sources focusing more on that part.
Oz can better tell you about what he’s focusing on in articles, if you ask him. He can also tell you about blog functions (RSS, Email RSS). I’m not familiar with those functions.
People here are “contributors” = ordinary internet users sharing information about something (something related to the articles). The main focus is on reviews, and on “follow up stories of general interest”.
when is the next payout from the receiver to zeek victims?
Best to check the claims portal.
IIRC there’s still a large number of outstanding claims. Once they’re either classified defunct or paid out, I imagine we’ll see another payment round.