A federal appeals court has handed Roman Balanko and VictoriaBank a major victory, allowing them to keep $13.7 million in stolen funds from Zeek Rewards victims based on a legal technicality that leaves defrauded investors with nothing.
The Fourth Circuit ruling upended years of effort by the court-appointed Receiver to trace and recover the money. The case traces back to 2016, when investigators began following the theft through an elaborate money-laundering pipeline. Zeek victim funds moved through Payza, then VictoriaBank, then Bank of New York Mellon, then through Balanko's company PaymentWorld. From there the money went to a Russian bank.
Three days after hitting Tusar Bank in Russia, the funds were routed again to an account for PaymentWorld Limited Russian Federation at Master Bank. Master Bank shut down shortly after, and the money effectively vanished—or so prosecutors believed it ended up in Balanko's hands.
The Receiver fought hard to recover the cash. VictoriaBank fought just as hard to keep it hidden. After VictoriaBank won a motion to dismiss once before, the Receiver appealed. The district court gave VictoriaBank another win on remand, ruling it lacked the power to order discovery into the bank's involvement because VictoriaBank wasn't technically a party to the original proceedings and the court had made no preliminary finding it had jurisdiction over the bank.
The Receiver's arguments crumbled on appeal. He claimed the court held jurisdiction because VictoriaBank used its Bank of New York Mellon correspondent account in New York to shield the stolen proceeds. The Fourth Circuit saw it differently. Even if New York's long-arm statute applied to VictoriaBank, the court reasoned, that jurisdiction couldn't extend to North Carolina—where the case was being heard. The Receiver made no effort to bridge that gap, and that failure proved fatal.
The Receiver's second argument, that VictoriaBank knowingly violated a 2012 freeze order, also collapsed. He conceded he never properly served VictoriaBank with the contempt charge. Without proper service, the freeze-order theory of jurisdiction failed entirely.
The Fourth Circuit affirmed the lower court's decision. In doing so, the judges acknowledged their ruling would hamper efforts to compensate Zeek victims. But they wrote that due process protections couldn't be sacrificed just to reach a desired outcome. The judgment stood.
Balanko walks away with millions. The victims get nothing. The money moved through enough jurisdictions and bank accounts that nobody could quite prove the final destination, and the law says you need proof to win in court. That's how a technicality becomes a payday for someone accused of theft.
🤖 Quick Answer
Who is Roman Balanko and what legal victory did he obtain?Roman Balanko is a defendant who, through a federal appeals court ruling, was permitted to retain $13.7 million in funds allegedly stolen from Zeek Rewards victims. The Fourth Circuit Court upheld the decision based on legal technicalities, preventing the court-appointed Receiver from recovering the money for defrauded investors.
How were the stolen Zeek Rewards funds laundered?
The money followed an elaborate international pipeline: from Zeek victims through Payza to VictoriaBank, then Bank of New York Mellon, subsequently through PaymentWorld, and finally to Russian banks including Tusar Bank and Master Ban, involving accounts under PaymentWorld Limited Russian Federation.
What was the role of VictoriaBank in this case?
VictoriaBank served as an intermediary financial institution
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