Zeek Receiver demands Payza turn over $13 million
The ongoing battle between the Zeek Rewards Receiver and Payza looks set to heat up, with the filing of a contempt motion on February 12th.
The motion requests the court order Payza, Payment World and VictoriaBank turn over stolen Ponzi funds, or in the alternative they be found in contempt.
As claimed by the Zeek Receiver,
Payza and Payment World are payment processing companies that facilitated the Zeek Rewards Ponzi scheme in furtherance of their own financial interest.
Together, Payza and Payment World processed affiliates’ credit card transactions to deposit money in Zeek Rewards for Zeek Rewards affiliates worldwide.
VictoriaBank, which is based in Moldova and holds correspondent bank accounts worldwide to facilitate its business, including at The Bank of New York Mellon in New York, also facilitated the payment processing of RVG transactions.
Thirteen million dollars invested into Zeek Rewards through Payza and Payment World was ‘held on reserve at VictoriaBank for a period of time to cover any potential chargebacks, reversals, or other potential risks‘.
The current status of the funds and/or their whereabouts is unknown.
In direct violation of the Freeze Order, and despite repeated requests from the Receiver, the Respondents refuse to pay the Receivership Estate the outstanding assets.
And, based on recent developments in the Receiver’s investigation, there is an open question as to whether the Receivership Assets held on reserve at VictoriaBank remain or were transferred from the account.
With negotiations between the Receivership, Payza, Payment World and VictoriaBank having broken down, the Receiver has asked the court to freeze $13.1 million dollars in VictoriaBank’s Bank of New York Mellon account.
How much is in the New York Mellon account is unknown, but in the event it isn’t enough to cover the full $13,174,015.48 sought, the Receiver has asked the court order Payza, Payment World and VictoriaBank deposit the difference into a segregated account.
The Receiver’s motion was filed ex-parte and under seal on February 12th. In an effort to prevent Payza, Payment World and VictoriaBank from “dissipating assets”, the Receiver also requested the New York Mellon bank account be frozen entirely.
Judge Mullen granted the Receiver’s motion on February 12th itself:
Given the Respondent’s failure to comply with the Agreed Order, lack of cooperation with the Receiver, and significant risk of the dissipation of assets, the Receiver requests that the Court order the immediate freeze of $13,174,015.48 at VictoriaBank’s domestic correspondent bank account or require Respondents to pay this amount to be held in a segregated account pending final resolution of the Motion.
It is hereby ordered that VictoriaBank’s correspondent bank account at the Bank of New York Mellon in New York be frozen immediately.
It is further ordered that, in the event VictoriaBank’s correspondent bank account does not contain the entire $13,174,015.48, Respondents are hereby ordered to deposit an amount equal to the deficiency with the Receiver.
A motion to unseal the ex-parte motion was filed on February 16th and granted the same day.
Separately, Patrick Pretty reported yesterday that Payza is the subject of a continuing criminal investigation in the US.
Update 18th February 2016 – The Receiver’s supporting Memorandum was unsealed today, providing further insight into Payza, PaymentWorld and VictoriaBank’s shenanigans.