Zeek Rewards founder Paul Burks sentenced to 14 years in prison
Following a lengthy sentencing hearing today, Paul Burks has been sentenced to fourteen years and eight months in prison.
The sentence will likely see Burks spend the rest of his natural life behind bars, as acknowledged by Judge Cogburn during the hearing.
With the aid of co-conspirators, Burks masterminded the Zeek Rewards Ponzi scheme.
Launched in 2011, Zeek Rewards ripped off thousands of investors for around $939 million dollars. The SEC shut Zeek Rewards down in August, 2012.
Burks (right) was indicted two years later in October of 2014. Rather than plead guilty Burks opted to go to trial.
After numerous delays, Burks’ criminal trial finally kicked off last July. A jury convicted Burks on all counts.
Today’s hearing saw the DOJ ask for a sentence of between 188 to 235 months (15 and a half to twenty years).
Burks’ defense attorney, Noell Tin, countered with a sentence ‘of no more than 11.5 years‘.
According to Tin, Burks is currently suffering from ‘hypertension, diabetes, heart illness, chronic renal failure, prostate cancer, the removal of his esophagus and mild dementia.‘
Judge Cogburn compared Burks’ marketing strategy of capturing hundreds of millions of dollars to the Biblical story of Jesus of turning loaves and fishes into enough food to feed at least 5,000 individuals.
“The scheme got out of hand, more than Mr. Burks may have thought was going to happen,” Cogburn said.
“But anyone could have seen what was going to occur outside himself and his (marketing) cheerleaders.”
For me, Burks’ sentencing marks closure on a scam I began tracking way back in 2011.
BehindMLM first published a review of Zeek Rewards back in September, 2011. Ponzi fraud was front and center in a follow-up article published a few days later.
Including this article, over the years I’ve published 187 articles on Zeek Rewards. Next to TelexFree, Zeek Rewards is the second biggest MLM scam I’ve covered.
The MLM underbelly has evolved much since Zeek Rewards burst onto the scene in 2011. Cryptocurrency is now the preferred vehicle for fraud, but for the most part the fundamentally fraudulent business models behind the scenes remain the same.
We’ll have more for you when the court filings for Burks’ sentencing hearing are made public. Stay tuned…
Update 14th February 2017 – The Warner Cable News are reporting Burks intends to appeal.
After the sentencing, Burks had no comment. His attorney says they will appeal.
Good luck with that. A jury conviction, millions of dollars in clawbacks and a lengthy sentencing hearing at which all sides were heard.
Surely a sentencing appeal is an absolute waste of time?
Update #2 14th February 2017 – From the Zeek Rewards Receiver:
There is no parole available under the federal court system.
The Court also ordered Mr. Burks to pay $244 million in restitution to the receivership for distribution to victims holding allowed claims.
As a practical matter the Court’s restitution order will not result in any payments to victims because the receivership has already taken from Mr. Burks essentially all of his assets. For similar reasons the Court found that Mr. Burks has no ability to pay a fine and declined to enter a fine.
The Court allowed Mr. Burks to remain free on bond until instructed to report to a federal prison by the Bureau of Prisons. The process of designation to a federal prison usually takes 30-90 days.
There’s a minute-entry available on the criminal case docket but as of yet no filings for me to go over.
Update 3rd May 2017 – Paul Burks is now in federal custody.
Article updated with news of Burks intending to file an appeal.
Not sure about US law, but here in the UK, the length of jail time can be increased if the appeal judge thinks that the original sentence was too lenient
Cogburn made his ruling with full consideration of Burks’ health problems. He knows he’s not getting out so increasing the sentence would seem pointless.
But surely he will only do half his time, again not sure about US rules, but here in UK 14 yrs only means 7 years with half off for good behaviour thats if he is still alive
I’m ~pretty sure~ federal sentencing guidelines only allow for a 15% reduction in time served for good behavior. If so that would has Paul locked in for not much less than 12.5 years.
The injustice here is that Todd Disner, T. Lamont, Trudy and the rest of the big “winners” wont be joining Paul behind bars (for Zeek at least).
Added clarification from the Receiver regarding parole, additional fines and the current status of Burks.
In a nutshell he’s been stripped of every asset he owns and will die in prison.
Seems hardly worth it for a few years at the top of the MLM Ponzi game.
Guess when the money grabbing gets too good there’s no turning back.
He got what he deserved. The judge should have given him 20 years.
When is his accomplice Dawn going to prison? She deserves prison time too.
Dawn was sentenced last year, she’s already in prison serving seven and a half years.
NOLINK: behindmlm.com/companies/zeek-rewards/dawn-wright-olivares-stepson-receive-jail-time-zeek-rewards/
Pretty much.
Looks like there’s no parole available for federal prisoners, but they can earn 54 days per year off their sentences for good behavior per info at nolo.com/legal-encyclopedia/is-federal-parole-system.html
What has not been said is that Burks is out on ‘Bond’!
Why, and what ‘Bond’? It seems only the rich get this.
You can bet your life Burks will have assets somewhere and could then afford to be spirited away during the 30 – 90 days before he is called to prison; we’ll see.
Allan
Doubt it. He’s had five years to flee.
This is the end of the road.
Oz is right. If Burkes wanted to jump ship he would’ve pulled a Wanzeler out of his ass long ago and fled to Brazil 😛
Maybe spirited to the nearest hospital ’cause the man suffers from multiple health issues.
12.5 years is fair enough punishment to burks for zeek. thank god it’s not something weird like 50 years.
IIRC there was some reform in the sentencing guidelines for white collar crimes in 2015/2016. these reforms required judges to give more weight to the ‘history’ of the accused, and changed the way points were given [on the sentencing scale] for ‘loss’ in white collar crimes. loss would be calculated on the basis of ‘loss per victim’ rather than the total figure of loss, which can be high when there are many victims.
so, what is burks going to appeal? is he appealing the guilty verdict or the sentencing?
May he die in prison, good riddance to bad garbage. He deserves only as much mercy as he dealt out in planning fraud:
none
XORLY
Update: Paul Burks is now in federal custody.
So sad. Big government can allege a ponzi even though no a single person lost any money. My understanding is one must prove damages. Hard to do with no losses.
Totally socialist when (Ozedit: derails removed)
Zeek Rewards losses were pegged at $850 million. This was proven at least three times in court; the TRO hearing, the preliminary injunction hearing and in Paul Burks’ criminal case.
Based on the evidence proving that Zeek Rewards was a Ponzi scheme and investors lost hundreds of millions, both injunctions were granted and Paul Burks was sentenced to prison by a jury of his peers.
You having your head up your ass doesn’t change the facts. And if you want to rant about socialism, do it somewhere else.