The Zeek Rewards Receiver reported total clawback recoveries reached $43.7 million by the end of the third quarter of 2017, according to a November 15th status report filed in the U.S. District Court for the Western District of North Carolina.
During the third quarter, the receivership secured an additional $2.6 million from individuals identified as net-winners of the defunct Ponzi scheme. These are participants who withdrew more money than they initially invested into the alleged penny auction and multi-level marketing platform. Many of these net-winners continue to contest final judgments in court, leading to ongoing litigation that is expected to extend into the fourth quarter. The Receiver's office has pursued these clawbacks as funds rightfully belonging to defrauded investors.
Meanwhile, $3.1 million was disbursed to victims of the Zeek Rewards scheme during the same three-month period. This brings the total distributed to victims to a significant sum since the receivership began its work in 2012. The distribution process aims to return a portion of the losses to the estimated 2 million individuals who invested in Zeek Rewards.
A critical ruling remains pending in the Receiver's appeal concerning the Payza case. This dispute involves an estimated $13.1 million in frozen funds held by the payment processor. The outcome of this appeal will directly affect the overall funds available for distribution to the defrauded investors, representing a substantial portion of potential future recoveries.
The lien on Dawn Wright-Olivares' residence has been settled. Wright-Olivares, the former Chief Operating Officer of Zeek Rewards, faced charges related to her involvement in the $600 million scheme. She pleaded guilty to conspiracy to commit wire and mail fraud. Her property is now expected to sell in the upcoming fourth quarter, with proceeds slated for the receivership estate as part of her restitution obligations.
Other complex legal actions continue to occupy the Receiver's office. Cases involving USHBB and Howard Kaplan are still active, with further developments anticipated in court filings. Howard Kaplan, a former attorney for Zeek Rewards, faces allegations of legal negligence in a separate suit filed by the Receiver, accusing him of facilitating the scheme's operations.
Zeek Rewards, operated by Rex Venture Group, LLC, was marketed as an online penny auction and multi-level marketing program based in Lexington, North Carolina. The U.S. Securities and Exchange Commission shut down the operation in August 2012, labeling it a massive Ponzi and pyramid scheme that defrauded over a million people worldwide. Founder Paul Burks was sentenced to 14 years in prison for his role in orchestrating the fraud. And the Receiver's ongoing mandate is to recover and distribute assets to these victims, a process that has involved extensive litigation and asset tracing across multiple jurisdictions.
The persistent efforts to recover assets from the complex financial web associated with Zeek Rewards continue, aiming to provide restitution for the millions of participants who lost money in the scheme. Victims can access updates and information regarding claims through the official receivership website.