ZeekRewards Founder Faces Federal Charges in North Carolina for Ponzi Scheme

The president and founder of ZeekRewards, a penny exchange website, has been indicted by a grand jury in North Carolina for several federal charges, including wire fraud, mail fraud, and tax fraud, for creating the internet Ponzi scheme.

Paul Burks, 67, is a resident of Lexington, NC. On Friday, October 24th, a federal grand jury indicted Burks on charges of wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy.

According to the federal Ponzi scheme charges, between January 2010 and August 2012, Burks was the owner of Rex Venture Group, LLC, the company that owned and operated Zeekler, a sham internet-based penny auction website. ZeekRewards was the alleged advertising division. Burks stands accused of defrauding investors involved in his Ponzi scheme, 1,500 of which were in the Charlotte, NC area alone. He falsely reported that Zeekler generated huge profits from penny auctions, and if investors put money into ZeekRewards, then they would get 1.5 times their money back. At one point, Burks claimed that investors would receive as much as 125% of their money back, or 50% per day if they put money into the Retail Profit Pool (RPP).

Burks and his co-conspirators did not, according to the federal charges, keep books and records needed to calculate daily figures, and that Burks simply invented the daily profit numbers, regardless of actual money being made. As with any classic Ponzi scheme, Burks took money from investors to pay off earlier investors.

By August 2012, Burks claimed that the company had over $2.8 billion in profits, but the company actually possessed only $320 million, which all came from victims of the Ponzi scheme.

“In truth and fact, Zeekler’s purported profits were bogus and ZeekRewards operated as a fraudulent Ponzi scheme whereby the co-conspirators used monies from later victim-investors to pay fraudulent returns to earlier victim-investors and to personally enrich themselves,” the indictment says.

“As a result, individual victim-investors filed false tax returns reporting phantom income that they never actually received, and Burks and others were able to use the false tax notices to perpetuate the Ponzi scheme by making it seem legitimate,” the indictment continues.

The Strom Law Firm Can Help With South Carolina Federal Criminal Charges, Including Indictments for Ponzi Schemes

The South Carolina federal criminal defense attorneys at the Strom Law Firm, LLC will fight to protect your rights and your personal and professional future.

Whether you are charged with:

• a computer crime
• mail fraud, wire fraud, or bank fraud,
• a RICO violation
• a drug crime,
• tax fraud
• making a false statement to a federal agent,

or any other South Carolina Federal criminal charges, you are likely facing a personal, family, social, business, and/or financial crisis unlike any you have ever faced before.

It is also important that you speak with a competent federal criminal defense attorney before discussing anything with a Federal agent, as you may be prosecuted for any false statements made to a Federal agent. Remember, Martha Stewart did not go to prison for insider trading; she was convicted of making a false statement to a Federal agent. This is known as a 1001 violation.

For experienced Columbia, South Carolina criminal defense attorneys who will fight for your rights and work to have your charges reduced or even dismissed, contact the federal charges attorneys at the Strom Law Firm, today. We offer a no-cost, confidential consultation to discuss our experience and knowledge of the system can help you. 803.252.4800