VictoriaBank’s Zeek Rewards Ponzi funds to remain frozen
A decision to grant VictoriaBank a Motion to Dismiss back in May potentially placed $13.1 million dollars of stolen Zeek Rewards investor funds on the line.
While the court granted VictoriaBank a dismissal, it maintained a freeze order pending conclusion of the Receiver’s anticipated appeal.
The Receiver did indeed file an appeal, which will and slowly play out and reexamine the case in the Fourth Circuit.
In the meantime VictoriaBank filed a motion seeking to vacate the original freeze order, granting them access to the disputed Ponzi funds.
The Receiver filed a response in opposition and a decision on the matter was made on July 12th.
The basis for granting the Motion to Dismiss was the court’s finding that it had a “lack of personal jurisdiction” over VictoriaBank.
In his order Judge Mullen acknowledges
the Fourth Circuit may well disagree, in which case the Receiver will have been irreparably harmed in the likely event Victoriabank’s assets are no longer accessible due to a prematurely vacated Freeze Order.
Victoriabank is a foreign corporation whose account with BNY Mellon is its only domestic tie, making those funds the only sure means of repayment for the victims of the ZeekRewards Ponzi scheme should the Receiver prevail on appeal.
A stay order correctly preserves the status quo and possibility of relief when “no other adequate remedy at law exists.”
Subsequently Judge Mullen denied VictoriaBank’s motion.
At least for now, pending the outcome of the Receiver’s appeal, the $13.1 million dollars at issue will remain put.
Good news for Zeek Rewards victims. Bad news for VictoriaBank, who probably anticipated moving the funds offshore had their motion prevailed.
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