A payment processor moved $4.8 million in stolen funds just 19 minutes after the SEC warned them a freeze was coming.

Preferred Merchants Solutions and its COO Jaymes Meyer have been quietly battling the Zeek Rewards receiver in court for months over the money. New court filings reveal exactly how it happened.

When the SEC shut down Zeek Rewards in August 2012, Preferred Merchants—a company that acts as a middleman connecting businesses with payment processors, lenders, and other service providers—sat on approximately $5.8 million in investor funds. The money belonged to Zeek Rewards clients, stolen through what became one of the internet's biggest pyramid schemes.

One million dollars has been recovered. The remaining $4.8 million vanished, and Preferred Merchants refuses to return it.

According to SEC Assistant Director James Buck, he personally called Jaymes Meyer on August 16 or 17, 2012—before any freeze order was officially entered. Buck made the purpose clear: he was notifying banks, merchants, and payment processors tied to the scheme that an asset freeze was coming, and he requested their immediate cooperation.

"During my first conversation with Mr. Meyer, I notified him of the anticipated asset freeze and requested that Preferred Merchants freeze any Rex Venture Group accounts and assets," Buck wrote in a declaration attached to the receivership's court filing seeking a temporary restraining order.

Meyer's response was technically true but conveniently incomplete. He told Buck that Preferred Merchants didn't hold funds or accounts—it was just a broker matching businesses with service providers. What Meyer didn't mention: Preferred Merchants held a trust account. As trustee, the company controlled exactly the kind of assets the SEC was trying to freeze.

Shortly after that call, $4.8 million and $1 million moved out of that trust account. The timing wasn't accidental.

Preferred Merchants is now refusing to hand over the remaining $4.8 million, forcing the receivership to fight them in court. The company claims the money doesn't belong to Zeek investors. The receiver says it's stolen property that needs to be returned.

What Meyer thought he could accomplish by moving the money before the freeze took effect remains unclear. But the SEC has it all documented.

🤖 Quick Answer

How much money did Preferred Merchants transfer after the SEC warning?
Preferred Merchants Solutions transferred $4.8 million in stolen funds just 19 minutes after receiving an SEC warning about an impending freeze. This amount represented the remaining balance of approximately $5.8 million in Zeek Rewards investor funds held by the company following the SEC's shutdown of the pyramid scheme in August 2012.

What is Preferred Merchants Solutions' business function?
Preferred Merchants Solutions operates as an intermediary payment processor connecting businesses with various financial service providers, including payment processors, lenders, and other service providers. The company processed funds for Zeek Rewards clients before the scheme's collapse and subsequent SEC enforcement action.

How much of the Zeek Rewards funds has been recovered?
Approximately one million dollars of the $5.8 million in stolen Zeek Rewards investor funds held by

🔗 Related Articles

- FTC seeks NetForce contempt judgment + civil sanctions
- De La Rosa & Crosby preliminary injunction granted
- BitConnect’s John Bigatton criminally charged in Australia
- TelexFree insiders try to cut prelim injunction deals
- SEC TelexFree investigation began in April 2013?