Victims File Lawsuit Against Zeek Rewards

5:00 PM, Aug 23, 2012   |    comments
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Greensboro, NC-- WFMY News 2 has been telling you about Zeek Reward since June 2012.

It was a company was a web based penny auction site located in Lexington, NC.  See original story here

Last week, the NC Attorney General's Office confirmed to WFMY News 2 that they had requested documents from the owner, Paul Burks about its business. The Attorney General's office said they were receiving complaints about the company.

Friday, WFMY learned that the popular auction website based in Lexington shutdown its website and closed the company's doors. The Secret Service and US Securities and Exchange Commission are investigating the company according to Special Agent Glen Kessler.

According to a news release posted late Friday on the SEC website, "The Securities and Exchange Commission today announced fraud charges and an emergency asset freeze to halt a $600 million Ponzi scheme on the verge of collapse. The emergency action assures that victims can recoup more of their money and potentially avoid devastating losses. The SEC alleges that online marketer Paul Burks of Lexington, N.C. and his company Rex Venture Group have raised money from more than one million Internet customers nationwide and overseas through the website, which they began in January 2011."

Thursday, Cal Cunningham stopped by the station to talk about the lawsuit he filed on behalf of almost 100 people against Zeek Rewards.


WFMY: How many victims are you representing?

Cunningham: " About 90 individuals yesterday (Wednesday) filed a lawsuit against Zeek Rewards for an alleged ponzi scheme an Pyramid scheme that was perpetrated on alot of folks here in the Triad who invested money in a company that was really not a functioning company."

WFMY: What is Zeek?

Cunningham: " The Business started out as an auction website where you could go on buy a camera bid on consumer electronics, just everyday consumer electronics...what was created to help drive traffic and market to that penny auction site was a system called Zeek Rewards. And by investing in Zeek Rewards you could get what would be some of the profits from the Penny auction business but the penny auction business wasn't genuinely returning profits it appears. Instead new investors in Zeek Rewards were simply giving their money to old investors that were supposedly increasing there investments by 1.7 percent per day.

That may not sound like a lot but if you let it run for 3 ..4.. 5 months.. compounding 1.7 percent per day many people thought they had 50 , 60 and 70 thousand dollars coming to them from their investment... instead that money was never really there that money was pocketed by others ... some folks have tried to take that money out of this company and were going to chase those leads and make sure they get there money back."

WFMY: What's in the lawsuit?

Cunningham: "The allegations that is in our lawsuit is that a gentleman named Paul Burks that was running which is the penny auction website and Zeek Rewards which is the affiliated program in which investors put their money....we have reasons to believe there were others in cahoots and we're following those leads we're interviewing witnesses and we'll follow were the fact go and if were find that others were in cahoots we'll certainly peruse them as well."

"For the smallest amount of money put in based on the clients we are representing 150 dollars... the largest investing that could be put in was 10,000 dollars...the 90 people that are reflected in this lawsuit who want to speak for and represent others that have also lost money in this Ponzi scheme so ... the amount of money represented in the suit that has been filed is small compared to what the federal Authorities have estimated over 600 million dollars that may have been taken from investors."

Click here to see copy of lawsuit

WFMY News 2

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