The Zeek Rewards Receiver collected an additional $2 million from net-winners during the first quarter of 2018, bringing the total funds secured by the Receivership to $27.8 million. This ongoing recovery effort aims to reclaim money for the thousands of victims defrauded by the massive online penny auction scheme.
Zeek Rewards, officially Rex Venture Group LLC, operated a fraudulent "profit-sharing" program that promised daily returns to participants. The Securities and Exchange Commission (SEC) shut down the North Carolina-based operation in August 2012, labeling it a $600 million Ponzi scheme that had defrauded over one million people globally. The appointed Receiver has since been tasked with liquidating assets and distributing recovered funds to those who lost money.
The Receiver is currently managing several complex legal fronts. These include a major class-action lawsuit targeting U.S. net-winners, individuals who withdrew more money from Zeek Rewards than they initially invested. These clawback actions are a standard part of Ponzi scheme liquidations, based on legal principles that define such payments as fraudulent transfers.
Another significant effort involves pursuing foreign net-winners who received payouts before the scheme's collapse. Recovering funds across international borders presents unique legal and logistical challenges, often requiring coordination with foreign courts and regulatory bodies. The Receiver also continues to litigate the USHBB lawsuit and the protracted VictoriaBank saga, both of which represent distinct avenues for asset recovery.
Victims awaiting an interim distribution of funds should not expect one soon. While the Receivership holds sufficient cash to issue checks, the Receiver's strategy prioritizes maximizing the final recovery. Processing and administrative costs associated with multiple small distributions would significantly reduce the total amount ultimately returned to victims.
The current plan is to consolidate all collections and legal resolutions into a single, comprehensive final payout. This approach aims to minimize overhead and ensure a larger percentage of recovered funds reaches the victims. The Receiver's office believes this method yields the most equitable outcome for those who suffered losses.
Current estimates suggest victim recoveries could range between 80% and 85% of their documented losses. This figure is notably higher than the typical recovery rates seen in many large Ponzi scheme liquidations, which often fall well below 50%. The projection, however, depends on the Receiver's continued success in ongoing litigation, the effective clawback of additional funds, and the diligent management of administrative expenses through the conclusion of the case. The final percentage will become clear once all legal actions are resolved and all assets are fully liquidated.