Default judgments totaling $669,368 were entered on January 6 against eight Canadian investors in the Zeek Rewards Ponzi scheme. These orders, issued by a U.S. District Court Clerk, followed the investors' failure to respond to clawback lawsuits filed by the court-appointed Receiver.
The Zeek Rewards scheme, operating as a massive online penny auction and retail profit pool, collapsed in August 2012. It defrauded over one million investors worldwide, collecting more than $600 million before the U.S. Securities and Exchange Commission shut it down. The operation functioned as a classic Ponzi scheme, paying early investors with money from later participants.
Kenneth D. Bell serves as the court-appointed Receiver, tasked with recovering assets for distribution to victims. His office has pursued hundreds of clawback lawsuits against "net-winners," individuals who withdrew more money from the scheme than they initially invested. These recovered funds are considered ill-gotten gains, drawn from the principal investments of other victims.
Last November, the Receiver initiated clawback proceedings against twenty-five Canadian Zeek Rewards investors in the U.S. District Court for the Western District of North Carolina. These actions sought to reclaim profits paid out to those who benefited before the scheme's collapse. While some defendants chose to contest the lawsuits, others did not engage with the legal process.
Eight of these Canadian defendants did not respond to the legal filings within the required period. Consequently, the Receiver moved for default judgment against them in late December. The court clerk officially signed off on these judgments yesterday, January 6.
Catherine Parker now owes $213,953. This sum includes $179,656 in clawed-back winnings and an additional $34,297 in pre-judgment interest.
Leon Killam is liable for $129,464, comprising $108,690 in principal and $20,773 in interest.
Yong Sheng Wang faces a judgment of $105,917, split between $88,579 principal and $17,337 interest.
Brian Fussey's judgment totals $81,332, from $68,294 in winnings and $13,037 in interest.
James Macelwain owes $78,037, with $65,516 from the scheme and $12,521 in interest.
Mei-Ping Liang's judgment stands at $60,662, accounting for $50,863 in principal and $9,799 in interest.
The Clerk's orders specify that post-judgment interest will accrue on the entire awarded sum, including the pre-judgment interest, from the date of entry until paid in full. The meter for this compounding interest began running on January 6.
These judgments underscore that ignoring a court-ordered clawback lawsuit does not make the obligation disappear. Instead, it ensures a loss and allows the debt to increase through accruing interest. The Receiver's office continues its efforts to recover assets for distribution to the defrauded investors of Zeek Rewards.