The Zeek Rewards receivership has recovered 56.7% of initial return-on-investment payouts from net winners, according to the Receiver's fourth quarter 2013 report. This report, filed January 30, 2014, detailed ongoing efforts to reclaim funds from the $600 million Ponzi scheme.
The Zeek Rewards Receiver proposed a settlement conference for January 27, 2014. The court approved the date, but no public information emerged regarding its outcome. The Receiver's report filed January 30, 2014, made no mention of the conference.
But the report did provide updates on clawback litigation. On December 11, 2013, the Receiver sought court permission to file clawback lawsuits. Eight days later, the court granted this request. Nearly eighteen months into the receivership, the first legal actions against affiliates are set to begin.
Some affiliates who profited from the scheme believe their returns are legitimate. They plan to challenge the Receiver in court. They are expected to lose. Other net winners opted to settle during the fourth quarter of 2013.
The Receiver reached agreements with 10 additional net winners in Q4 2013, raising the total number of settlements to 179. These 10 agreements alone recovered $545,300 from $892,549 in net winnings, a 61.09% recovery rate. While a 61% recovery rate from individual settlements may seem modest, it contributes to overall victim restitution. The Receiver has now clawed back 56.7% of the total net winnings from Zeek's top earners.
Throughout Q4 2013, the Receiver continued to investigate Zeek's finances and track down assets. The team collaborated with the U.S. Secret Service, pursuing funds held by e-wallet vendors, payment processors, and banks.
On November 8, 2013, the Receiver deposited $855,532.84. The Secret Service had seized this money from LST Financial, a processor for the e-wallet provider NxSystems. On December 18, 2013, $5,374.32 from gift cards found at the Rex Venture Group facility went into the account. On December 24, 2013, the Receiver deposited $1,181,253.29. This sum