Back in late 2014, Paul Burks was
indicted
for running the
Zeek Rewards
Ponzi scheme.

Burks’ indictment has him facing four criminal counts:

conspiracy to commit wire and mail fraud

mail fraud

wire fraud and

tax fraud conspiracy

Just shy of two years from his indictment and a criminal trial just around the corner, Burks has objected to the fourth count of tax fraud.

For those that need a refresher, one of the pillars Zeek Rewards based its feigned legitimacy on was the issuing of 1099 tax forms to affiliates.

An example of this in action can be seen in Keith Laggos’ response to the
NC Credit Union warning
about Zeek:

I had one of my downline call me yesterday and tell me that the (NC) State Credit Union called his wife and told her (since she got her money order there) that they were giving her a call because it had come to their attention that Rex Venture Group, LLC was fraudulent.

His wife went on to tell the bank employee why Zeekrewards is not fraudulent!
Yearly 1099
, Compliance Testing, can not be a pyramid in the way it works. And the bank employee said she had no idea how Zeekrewards truly worked.

The problem with Zeek’s 1099 forms is that they were for the Ponzi balances in affiliate backoffices. In otherwords, Zeek Rewards was issuing 1099 tax forms on money they knew didn’t exist.

Despite the issue seemingly being a clear-cut case of tax fraud, Burks claims

the explanation for the apparent discrepancy is that the Forms 1099 issued to ZeekRewards’ affiliates were based on “all constructive income received.”

Under this doctrine, affiliates were subject to tax for all income they were entitled to claim, whether or not they actually claimed and received it.

Further, affiliates were also subject to tax for the value of bids they chose to repurchase in lieu of a cash payment.

Burks and his attorney seem to be of the opinion that claiming income that
literally
doesn’t exist is legal.

And they’re pulling out something called “constructive receipt” to prove so.

The doctrine of constructive receipt is codified in IRS and Treasury regulations, various administrative rulings, and a body of case law from the federal courts.

In simplest terms, it means that income is recognized at the point that a taxpayer has a vested right to receive immediate payment in money or property, even if the taxpayer’s actual receipt of the payment comes at a later date.

As the indictment acknowledges, ZeekRewards affiliates who deferred receipt of cash awards were issued Forms 1099 based on this doctrine.

Yep. And once again, the income declared on the forms 
didn’t exist.
It’s not a matter of affiliates receiving the income “at a later date”, it’s that the Ponzi funds Burks was issuing in the 1099 forms 
didn’t exist, period.

I mean Burks isn’t seriously going to get up in court and argue that, had Zeek Rewards been able to continue, the income reported on the 1099 forms would have  materialized (from new investment).

That’s a joke. And

🤖 Quick Answer

What criminal counts is Paul Burks facing in the Zeek Rewards Ponzi scheme indictment?
Paul Burks faces four criminal counts: conspiracy to commit wire and mail fraud, mail fraud, wire fraud, and tax fraud conspiracy. The indictment stems from his operation of the Zeek Rewards scheme, which issued fraudulent 1099 tax forms to affiliates to create an appearance of legitimacy.

🔗 Related Articles

- Daniel Filho criminal case moved back to Massachusetts
- Massachusetts charge TelexFree as “billion dollar Ponzi”
- Monarch Review: United token Ponzi from serial crypto scammer
- CryptoProgram’s Ed Zimbardi under investigation in Georgia
- Rich Net Global Review: 2.5% a day crypto Ponzi