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Analyzing ZeekRewards and Zeekler, is Zeek Rewards a legal business? Who is Paul Burks? Detailed Investigation here

Updated on March 3, 2015

Introduction

There are a ton of income opportunities on the Internet and all of them promise long-term legal and viable income. One of the most recent to be popular is known as "ZeekRewards", run by Paul Burks of "Rex Venture Group".

In this hub, I will go through all the publicly available information about Paul Burks, Rex Venture Group, and Zeekler / Zeek Rewards. I will separate the facts from the analysis, and detail the source of information. This is so you can make up your own mind.

I am not going to tell you what to think. In fact, I question anyone who want you to think a certain way, on why they would want to do so. And I would suggest you think about why would any one want you to think a particular way, instead of giving you information so you can make up your own mind.

Instead, I am going to pose a couple questions that you *should* have already asked BEFORE you joined (and if you already joined, it's not too late to ask now...)

I am not going to sugarcoat the analysis as I am NOT trying to sell you anything. If this comes across as "negative", consider how much "positive" propaganda you have been exposed to , and how much information they did NOT tell you. Think about that as you read through this hub.

NOTE: This hub is in chronological order. The most recent updates are at the very end.

Latest updates:

  • 30-OCT-2012 Receiver sent out 1200 subpoenas in preparation of clawbacks from people who benefited from this Ponzi scheme
  • 27-SEP-2012 Receiver announced he had secured over 300 million that will be returned to victims, will continue to do his job
  • 27-AUG-2012 Receiver appointed by court to shut down Zeek and return money to victims
  • 17-AUG-2012 ZEEK REWARDS SHUT DOWN BY SEC
  • 04-AUG-2012 ZeekRewards parent company claims to have contact North Carolina credit union and "shut down misinformation" at the source
  • 03-AUG-2012 Upcoming "qualifiers" and Zeebates worries affiliates
  • 02-AUG-2012 Rex Venture Group / ZeekRewards BBB rating back to F
  • 02-AUG-2012 Reports surface about North Carolina Credit Union warning members about Zeek being possibly fraudulent
  • 02-AUG-2012 Keith Laggos, MLM consultant to ZeekRewards, revealed he is an affiliate, as well as consulting for ZeekRewards, AND published favorable articles about it on his magazine. After reveal, he no longer consulted for ZeekRewards, claimed credit for pushing payment solutions offshore, predicted FTC will hit Zeek in less than a year
  • 27-JUL-2012 Consultant who claimed to work for Zeek parent company sent takedown notice and knocked this hub offline, but did not follow up with details on how this hub is violating trademarks and libel.
  • 27-JUL-2012 Randy Schroeder, MLM veteran and head of big MLM, calls ZeekRewards a Ponzi scheme, predicts swift end and grief to any one who joined

About Zeekler

According to a Zeek "training" website, Zeekler started its life in March 2010 as "FSCAuction". FSC was a part of Rex Venture Group called "Free Store Club". In June the auction was renamed Zeekler, and for a few months, it was also known as a different auction under Rex Venture Group called MyBidShack, but was made a separate auction in December 2010.

NPros, however, had a different story. It claimed that Zeekler didn't start until they acquired a Georgia Penny Auctioneer called iTicketBid, in September 2010. iTicketBid had a history of failing to deliver promised items. Georgia had ruled that penny auctions must be licensed by the state auction commission and drove "Wavee" out of business as of July 2010.

It seems the truth is a combination of the two: Rex Venture Group did start FSCAuctions in April 2010 (some remnants can still be found on Facebook and such via Google search), FSC Auctions was renamed Zeekler in June 2010, and some time after that it acquired or merged with MyBidShack. For a while both are living together, but with different comp plans. Zeekler bought iTicketBid in September 2010 and merged it into Zeekler. In December 2010 the two separate websites (Zeekler and MyBidShack) are merged again with a new affiliate plan and relaunched as merely Zeekler. MyBidShack remained active but is a portal into Zeekler.

If you search MyBidShack's DNS you'll see its registrar is indeed Zeekler, handled by Paul Burks, and shares same address as Zeekler / ZeekRewards. What's really interesting is MyBidShack was owned in early 2011 by Darryl Douglas, who's now one of the top three at Zeekler.

UPDATE: North Carolina Auctioneer Board confirms that Rex Venture Group holds Auction Firm license #9401, issued in March 2012. Zeekler operated for almost TWO full year without obtaining the proper auction license.


MyBidShack was owned by Darryl Douglas, now one of top three at Zeekler
MyBidShack was owned by Darryl Douglas, now one of top three at Zeekler

About ZeekRewards

ZeekRewards claims to be a "rewards program" for Zeekler, a "penny auction" website where bidders purchase bids, to be spent on items. Zeekler / ZeekRewards is a part of Rex Venture Group, which is run by Paul Burks, who has a pretty long history in MLM, spanning over 14 years as of early 2012. However, his history was hardly spotless. The current Better Business Bureau rating for Rex Venture Group is "F", or FAIL (as of 07-MAY-2012). This was changed to "No Rating" as of 14-JUL-2012, but a recheck at 01-AUG-2012 shows it's back to F again.

NOTE: Zeekler has NOT been in business for 14-15 years. Rex Venture Group has been in business for 14-15 years. Zeekler name was only used since June 2010, and ZeekRewards since 2011.


What is Zeekler?

Zeekler is a penny auction site, where people pay for bids (each of which cost about a dollar or less), which they submit for various items up for bidding, using one bid at a time. The last person to get a bid in "wins" the item. Then they can pay for the item and have it shipped to them, or choose to "cash out" the item and receive the difference between the MSRP and the "bid price".

Here's a sample auction: Item for bid is a cheap Android tablet with MSRP of $100. A "premier 5" auction means you need to use up 5 bids to start bidding. Each bid raises the cost of the item by 1 penny. Let' say you win the item at 12.50 (being the last person to submit a bid), which would suggest that 1250 bids had been submitted by various bidders, each of whom also paid extra 5 bids to join the process. You likely spent 200 bids or more to win (probably closer to 400). As the winner, you can then pay $12.50, and shipping, and the item will reach you in a few weeks.

How much can Zeekler clear? Each bid is 65 cents or so. Assuming there are 100 bidders, 1250 bids would net $812.5 on bids alone, plus another 5 bids per bidder (it's a premier 5 auction) which would add 325. Then there's $12.50 for the item itself. Total revenue for one item: $1150. This is not counting the cost of running the whole thing or the cost of the item, of course. (Or shipping and handling)

Let's assume you spend 200 bids to win this item (a bit on the low side if total bids exceed 1000), that's $130, plus $12.50 for the item, plus $10 in shipping and handling... You actually paid $152.50 for an item with MSRP of $100, even though you "felt" you paid only 12.50. And we are using optimistic numbers (rather minimal number of bids). This is so dangerous, the Federal Trade Commission actually put out a consumer alert specifically warning all people about penny auctions.

There are some anomalous patterns. Some people are using ridiculous amount of bids, such as over 1400 bids (valued at approximately $910) for $100 cash. And that's just ONE PERSON, not overall number of bids (that's believed to be over 5400 bids) That makes absolutely no sense from the bidder's POV. This leads to some to suspect that there be shill bidding bots just to bid up the prices, but there is no proof.


What is Zeek Rewards?

ZeekRewards is the "invitation only advertising division" of Zeekler. It was started in late 2010 (perhaps as late as January 2011).

ZeekRewards itself does NOT make money, based on the official explanation. Members are simply given a share of the profits (from Zeekler) for doing some promotions and putting money INTO the system by purchasing and "giving away" bids, and for NOT taking profits out of the system.

ZeekReward members do need to pay a monthly subscription fee. There are "free affiliates", but they are not eligible for the profit sharing.


ZeekRewards Compensation Plan

In any income opportunity, you perform some activities for the company, and in return, you get paid for performing that activity. This is called the compensation plan, and determines the viability and the legality of the business.

Regarding ZeekRewards, you get paid six different ways, which is listed on their website under "Get Paid". Instead of regurgitating their verbiage, I'll just tell you the bottom line:

  • ZAP Commission -- get paid when you refer people who buy "bid packs"
  • Retail Store -- sell stuff from your "retail store" and pocket profits
  • Retail Points Pool (previously known as Profit pool ) -- post ads elsewhere, one a day, and make sure you have people (who paid to join) under you (see EDIT below), "give away" the bids to select customers, and you can get a share of the "retail points pool" (described as 50% of daily revenue or profit).

    EDIT: The requirement "have people under you" was removed in March 2012. Thanks to Georgi for spotting this mistake.
  • Retail subscription -- get commission off people who "subscribed" to Zeek (i.e joined as affiliate)
  • Shopping Daisy -- earn commission by giving away this shopping browser toolbar (also recruits people, but at least it cost nothing)
  • Matrix Commission -- you also get paid for people under you... who paid into the system by buying bids either with their own money, or with proceeds obtained from Retail Points Pool share as explained above.

There are no statistics or chart that explains how much an average affiliate earned in the past from each of the six ways to earn. Out of the six ways to earn, four involves recruiting people, instead of selling things. The "income disclosure statement" released in March 2012 does not shed any light on this situation. However, the "median" earning of an affiliate, according to their 2011 Income Disclosure Statement, is ZERO. Though they claim to have 15000 "active" affiliates in the US, and paid out over 58.5 million.

Based on study of various forum postings, people are mainly interested in the "retail points pool", which uses a very peculiar system to calculate how much profit you can "share", which we will explain in the next section. But basically, your "share" of the profit is mainly dependent on how much money you have spent into the system and how long you are keeping it in and NOT taking it out.

(Thanks to Joe for nitpicking about "penny auction" vs. "reverse auction")

Q: Is ZeekRewards rewarding affiliates for the work they did, or for the amount of money they spent on Zeek? (The former is a job, the latter is an investment.)


Profit Sharing... how does it work?

In ZeekRewards, to "share" in the profit pool, you need to give away at least 10 bids (i.e. you have to buy them first), and post an ad every 24 hours. You, of course, need to be a paying affiliate as well. Prior to a major change in early 2012, you were required to have at least two paying affiliates under you (silver, gold, or diamond, $10, $50, or $99 per month respectively) as well. This was removed.

For every bid you buy and give away, you earn one "VIP ProfitPoint" in your pool. At the end of every day, ZeekRewards will declare a profit share, which averages about 1.4%.

Let us assume you had previously purchased 1000 bids, and thus, gained 1000 VIP points. 1.4% of 1000 is 14, so that's your "profit share" of that day, $14. You can choose to spend all $14 on repurchase of bids, which is added to your total (so you now own 1014 points). Or you can choose 100% cashout, which means you will receive 14 dollars and $14 is added to your cash balance. Or you can do a mix of whatever proportion you wish between repurchase and cash out.

Each point has a life of 90 days, including the points earned on "profit share". If you bought 1000 bids, and got 1000 points, at end of day 1 you will have 1014 points, 1000 of which expires in 89 days, and 14 expires in 90 days (if you choose full repurchase). In the meanwhile your points are entitling you to additional shares of the profit.

The payment is usually sent by check, with a lag of 15 days plus transit time. Though ZeekRewards made a push to use payment processor such as AlertPay and Solidtrust Pay starting 2012. Zeek have also added NxPay. All three have continued to experience glitches for many months, as of end of July 2012 (see updates below).

NOTE: Free affiliates can get "bonus points", which is basically a way for your points to remain when you choose to convert your points into VIP points by upgrading your membership later.

Q: Where does the profit come from? Do they come from the customers you supposedly will recruit? Or are they from the bids YOU PURCHASED?


Is ZeekRewards paying out too much money?

According to ZeekRewards, the daily profit share is calculated by a proprietary formula using figures that are business secrets and will NEVER be released. However, the number is known to vary from 0.9% all the way to 2.0%, with an average of 1.4% or 1.5%. To put it into perspective, a noted scam prosecuted by the SEC and US Secret Service, "Ad Surf Daily", offered "rebate" of 1% on weekdays and 0.5% on weekends.

Furthermore, in April, after they announced banning of several countries (see below), there were several outages of Zeekler for up to 14 hours. Yet the profit share for the outage days remain virtually unchanged. Many critics have questioned how is this "profit share" actually calculated. Burks have previously stated that this formula is a proprietary business secret and will never be revealed. Critics on multiple websites charged that it is far more likely that Burks simply made up the numbers in his head without regard to reality.

Many members and critics have constructed spreadsheets to model theoretical returns based on investment amount, profit share percentages, reinvestment amount, and so on. Models show that if the "profit share" is larger than 1.1% 100% reinvestment would just barely offset any expiring points. Thus, one can withdraw "profit" as long as the average profit share exceed 1.1%.

Q: How is Zeek generating well beyond 1.1% profit based on total amount of VIP Profit points, which is likely in the TENS OF MILLIONS nowadays?

Based on the ZeekRewards 2011 Income Disclosure Statement, using number of affiliates at each level, and average income of such users, the total payout to members in 2011 is estimated to be 58.5 million dollars. Which comes out to be $160,000 profit PER DAY shared.

UPDATE: In the end of May 2012, ZeekReward put in one day profit share of 8.9%, then immediately posted a correction that they had a "manual decimal point misplacement". This is the full quote from their news website:

A manual decimal placement error occurred tonight when starting the RPP. Adjustments will be made to all accounts affected shortly. All unaffected accounts will run normally. Thanks, Zeek.

Clearly, the daily profit share is NOT calculated, but rather, MANUALLY ENTERED. How else can they mistakenly typed in 8.9% instead 0.89%?

Q: Do you believe that ZeekRewards, holding only a few hundred auctions a day, is earning over $320,000 (and increasing) per day, probably well over 400,000 DAILY now? (Remember, they share "up to 50% of daily profit") And can consistently earn grow such to outpace point growth in the foreseeable future?


Compliance Enforcement

ZeekRewards started operating in 2011, and at one time promised an ROI (return on investment) of guaranteed 125%. This was advertised all over the Internet by its affiliates. That all changed in Early 2012, when ZeekRewards hired a lawyer and a MLM consultant (among several other people) to make sure their business is compliant with all applicable laws. After a few weeks, policy update was pushed out to all affiliates:

STOP REFERRING TO ZEEKREWARDS AS INVESTMENT IMMEDIATELY

All US based members are required to pay $10 for a "compliance package" and confirm that they understand these limitations, or their membership will be terminated immediately.

There are other misc changes, but that is the one that affected the most members. Hundreds, perhaps thousands of Youtube videos and websites, articles, and postings, advertising ZeekRewards disappeared almost overnight.

ZeekRewards hired several prominent lawyers and attorneys as well as MLM expert Laggos to check for compliance. One such lawyer is Gerald Nehra of Nehra and Waak. Mr. Nehra is an MLM expert, having served as head of Amway's legal division for 9 years before making it his primary business as both consultant and MLM attorney and is well known in the industry. However, Gerald Nehra was also known for filing an affidavit (after checking Ad Surf Daily for compliance) telling a Federal Court that "Ad Surf Daily" is NOT a Ponzi scheme, something the Federal Court disagreed with. Ad Surf Daily was sued and shut down by FTC in 2008 and 55 million dollars forfeited and refunded to participants in 2011.

UPDATE: It has been brought to my attention that MLM Expert Keith Laggos, who was hired by Zeek as consultant, also filed an amicus brief with the court telling the judge that ASD is NOT a Ponzi. Clearly, he was wrong as well. Please also see news update at the end when Laggos was caught promoting something else and promptly no longer consults for Zeek.

UPDATE: Compliance package was finally published as of 07-MAY-2012, and initial reaction by members is mixed, as it is a generic MLM compliance course, NOT customized for Zeekrewards. It appears to be the same generic compliance course at mlmcompliancevt.com.

Q: What exactly was the MLM compliance course supposed to teach? That ZeekRewards is not an investment? The actual business model determines whether the business is an investment with application of the Howey test. So is the compliance course meant to correct a misunderstanding by the affiliates, or to propagate a mirage?


International Controversy

In April 2012, ZeekRewards abruptly terminated many international affiliates. To date, ZeekRewards refused to list the countries that are affected, or how many affiliates were affected. However, by comparing the country list before and after the change, six countries were found to be absent in the latter version. ZeekRewards have not confirmed the list of banned countries, nor explained why this was done.

Speculations were rampant, with at least one MLM supporter speculating that this had to do with FTC Warning about Penny Auctions (except this makes no sense as FTC is an American agency dealing with American law, so why ban international affiliates?) One Zeekreward support response claimed this is due to actions / policies from those countries, NOT ZeekRewards. Members in those countries will be only refunded their monthly membership fees and initial bid purchases. All VIP points earned are lost.

One week later, on ZeekRewardNews, Paul Burks, CEO, claimed that countries that were banned were done to comply with US Department of Treasury, Office of Foreign Asset Control (OFAC) who maintains a list of sanctions. Burks only referred to "banned countries" and offered no specifics.

Request to OFAC for comment and study of OFAC list of sanctions shows that there are currently NO sanctions against those six countries that would cause blanket ban of those six countries.

ZeekRewards currently has no comment or clarifications, leading to outcry among other international affiliates, both in and out of the affected countries. There are also reports on how the company is only using a free Gmail address to process refunds, and is very slow or just flat out not responding to queries. This however, cannot be confirmed. Many of those complaining from the affected countries have been members for over a year and is believed to have significant VIP point balances.

Q: Clearly the Paul Burks explanation is NOT CONSISTENT WITH FACTS. So why was it offered? What was the REAL story?


Problem with Profit Sharing System

In a true business where you work for the money, your compensation should depend on how hard you work and what results you were able to achieve with that work.

In Zeek Rewards, the profit sharing system encourages people who have very low balance to NOT withdrawn any money, while people who have large point balances can withdraw plenty of money. In other words, you are NOT being rewarded for the amount of work you do, but for amount of money you put into the system and keeping it there, and for recruiting other people who do the same.

Assuming 1.5% compound daily, and 100% repurchase, 100 points will become 244 points in 60 days. However, this is all "virtual growth". No actual money has reached your pocket. Instead, you have paid in at least 100+10+10 dollars into the system. If you spend the next 30 days (before the first 100 points expire) doing 100% withdrawal, you can draw about 3.5 dollars per day (steadily decreasing). which should mean you will make back your $100 and a bit more so it's a zero-sum game. If you play a longer term game you may actually make some money.

This points to three fundamental problems:

  1. They say this is not an investment, when it works just like an investment
  2. Business model makes no sense, as ZeekReward is a pure loss center with no gain (it pays out money, but has no income to match, as it needs to take profit from Zeekler)
  3. People who put in a little money gains virtually nothing, people who put in a lot of money (and allow the money to compound for more than 90 days) gains LOTS of money

First problem... this very much FEELS like an investment, despite every attempt by it to NOT refer to itself as an investment. In fact, in February and March 2012, the new compliance team at ZeekRewards had a crackdown on all affiliates forcing them to take down any mention of ZeekRewards as "investment". They even formed a volunteer "Zeek Squad" to go after non-compliant affiliates.

Second problem... this business model makes no sense. ZeekRewards, if it is indeed paying out a ton of $$$ to the affiliates, what are they GETTING out of the affiliates? There's a) membership fees, b) posting of ads, and c) recruitment. All three have problems.

If you pay to join a program, then get paid by recruiting other people who also pay to join, what you have is a pyramid scheme. This is very clear from FTC past rulings. (See FTC vs. Koscot,) Having a free affiliate level is irrelevant.

Paying people to post ads is fine, but why would Zeek pay someone who had more points (i.e. put more money into the system) more money, when he or she did the SAME amount of work as someone who had less points? People who have 10000 points are paid 100 times more than people who have 100 points, who did the same work. The difference is how much money they paid into the system, NOT what they did for the company. Clearly, the ad placement is NOT the real benefit to ZeekRewards.

Finally, if you study the system, you will realize that the most "points" an affiliate has, the more that affiliate benefits. And how *do* you get more points? by doing two things:

  • Put money into the system (buy bids for giveaway)
  • Keep the money in system (repurchase bids as much as possible), take nothing out

The more you do these things, the better you are supposedly rewarded through this "profit share" thing. This is an investment. So why would they insist it is NOT an investment? What sort of investment that only encourages people to keep putting money IN, and never take any out?

At least one member speculated that this profit sharing is simply for placing advertisements. However, this makes no sense. The going rate for paying someone to post ads on Craigslist and such is a mere 50 cents per ad. ZeekRewards does NOT publish total paid out but the rate itself is dependent on how many points you have. If you only have 10 points, then you are paid pennies. If you have 10000 points, you are paid 150. dollars (assuming 1.5% profit share). Both for doing THE SAME WORK DAILY.

Furthermore, in the international controversy above, the international members, many of whom have been with ZeekRewards for over a year, is ONLY getting back the money they put in (monthly fees and bids purchased). All the work done during that year? Completely worthless.

When you add the two facts together, conclusion is inevitable: ZeekRewards is NOT after your work, but is ONLY AFTER YOUR MONEY. Work is an afterthought.

Furthermore, those who were already in, and have amassed a ton of VIP points, will be getting most of the profit. Late joiners are getting virtually nothing.

-----

Q: Why would they say they are not an investment, when they really want your money?


Is ZeekRewards an Investment?

In the US, it is illegal to offer up investment contracts for sale to the public without registration with the Securities and Exchange Commission (SEC), a federal financial regulatory agency. Many companies, including Ponzi schemes, were investigated by the SEC and charged with selling "unregistered securities", and for disguising the fact that they are doing so. The fact that ZeekRewards started this "compliance movement" in February 2012 to deliberate stop referring itself as an investment would suggest it could be construed as an investment contract in some circumstances. Is it really an investment contract though?

According to American University's course on financial regulations (PDF file), the Federal test on what is a "financial contract" has four elements (established in SEC vs. Howey, also known as the "Howey Test"):

  1. investment of money
  2. in a common enterprise
  3. w/ expectation of profits
  4. solely from the efforts of others

As you buy bid from Zeek, trade it for VIP Profitpoints, then expect profit share, it appears that Zeekrewards at least conforms to elements 1, 2, and 3. So the main question is element 4... Does the additional requirements, such as "post one ad per day" negate element 4?

While a strict interpretation of the word "solely" would appear to support the position that the additional requirements ZeekRewards would mean it is NOT an investment contract, historically the Federal Courts have ruled that "solely" is interpreted rather loosely. Generally speaking, element 4 is a test on how much control do the participant have over day-to-day operations.

The fourth element of the Howey test, “to be derived solely from the efforts of others,” requires an examination into the level of control retained by the investor. Courts will examine the investor’s involvement in the day-to-day operations or management decisions of the business enterprise to determine whether the investment depends solely on the efforts of others. Here, the courts are more interested in substance over form.
http://businesslaw.ncbar.org/newsletters/nbinov2010/security.aspx

Example 1: In the case SEC vs. Glenn Turner Enterprises, Turner argued that participant have to recruit in order to get a return, thus the return is NOT "solely" from efforts of other. The court rejected the argument. The "efforts" in element 4 are regarded as essential managerial decisions that affects the success of the scheme, and recruiting is NOT such a decision.

Example 2: In the case SEC vs. Ad Surf Daily, Boudwin, head of ASD, and his lawyer argued that because they require participants to click on ads, to get the profits, the return is NOT "solely" from the efforts of others. The court rejected the argument for the same reason.

Is posting of ads "critical operation" required for success or failure of Zeekler and Zeekrewards? Logically the answer is "no".

As the additional requirements does NOT defeat element 4 "effort of others", Zeekler fits all four elements of "investment contract" and "securities", and thus, ZeekRewards may in fact be guilty of selling unregistered securities.

ZeekRewards supposedly had hired former-SEC lawyers for compliance, thus, observation above is only valid for the current business model, as of April 2012. If they change their business model, a new analysis will be performed.

Q: Why would ZeekRewards insist they are not an investment, even hired lawyers and consultants teaching so, when they are, according to Federal definition, an investment?


Is ZeekRewards a Ponzi Scheme?

Many people have wondered whether ZeekRewards is a Ponzi scheme, as it is paying out almost usurious rates (1.5% daily for 90 days!) To answer that, we need to first define what exactly is a Ponzi scheme.

“A ‘Ponzi scheme’ typically describes a scheme where earlier investors are paid from the investments of more recent investors rather than from any underlying business concern, until the scheme ceases to attract new investors and the pyramid collapses.” Eberhard v. Marcu, 530 F.3d 122, 132 n.7 (2d Cir. 2008)

Noted MLM Attorney Gerald Nehra (one of those hired by ZeekRewards for compliance) used the following three criterias in his expert testimony given in the Ad Surf Daily case.

  1. the promise of a return on investment to induce the participant to put money into the program;
  2. the lack of any underlying legitimate product or service or asset sufficient to sustain the promised payouts; and
  3. the necessity of a continuing flow of new investors/participants to fund the payouts

Do these three criteria fit ZeekRewards?

A1. Does Zeek Rewards promise return on investment? Before 2012 they sure did, when Zeek Rewards actually guaranteed 125% ROI (which, incidentally, is also the number used in Ad Surf Daily) After the compliance review, the word "investment" disappeared from almost all advertising. However, the fundamental business model did not change. You put money in to buy bids, which you give them away to trade for VIP points, and you earn return on VIP points. Thus, it is still behaving like an investment.

Furthermore, analysis (see above "Is Zeekrewards an investment?") shows that ZeekRewards conforms to the 4-element "Howey test" that determines whether something can be considered an "investment contract". A simple disclaimer "not an investment" may not be sufficient to stop an SEC investigation.

A2. Does Zeek Rewards have an underlying product that is legitimate? Or merely fraudulent disguise? DEBATABLE. Zeekler does have a legitimate product: bids. You can buy bids to be spent on the "penny auctions". Indeed, in a different paper, Mr. Nehra suggested that the product must have "intrinsic value" that people would buy it for its own sake, instead of just to participate.

However, affiliates don't buy bids for the bids. They buy GIVEAWAY bids (not retail bids) to get VIP points, and returns are earned on VIP points, not bids. This is Thus, people who join ZeekRewards are NOT after the bids for their intrinsic value. That the bids can be used in penny auctions is completely incidental for the participants. Indeed, the official story is that the bids are "given away".

A3. Does Zeek Rewards require continuous influx of new members to provide payout to old members? DEBATABLE People would be buying bids in hopes of winning items, which would give Zeekler a profit to be shared with members of ZeekRewards. However, people are using bids very strangely. The cases where people used like 1400 bids (worth $900) to win $100 in cash are actually quite frequent. People who use bids to actually bid would not do that (makes no sense). However, people who don't actually need the bids would do that, as they are not after winning the item, but merely to get rid of the bids so they can buy more, trade them for VIP points, and get the return from the VIP points. The real question is, are there enough RETAIL customers who buy bids to provide that much profit to the ZeekRewards affiliates? Or are the ZeekRewards affiliates generating the profits themselves by buying those giveaway bids, thus paying themselves?

Mr. Nehra explained in his affidavit and testimony that there needs to be a dividing line between "members" and "customers", and a Ponzi would have very little distinction between members and customers. Basically, the members are paying each other, instead of sharing "profits" from customers, and thus, require continual influx of new members, not customers.

Zeekrewards does NOT publish statistics on how many paying customers (who only buy bids) that are NOT members of ZeekRewards.. Thus, it is impossible to say whether Zeekler actually have significant number of real customers providing real profit to be shared among the ZeekReward members, instead of just ZeekReward members putting money into the system as bids which is transferred to older members (those with more VIP points). However, the anomalous bid behavior would seem to indicate that these bidders are NOT customers (nobody's THAT stupid), but rather members or shill accounts controlled by members.

In all Ponzi schemes, any sort of withdrawal is discouraged, and all participants are encouraged to "roll over" their gains as "reinvestment" to keep the money in the system instead of taking it out. ZeekRewards has a built-in mechanism of "90 day expiration" to encourage you to keep the money in for at least 60 days, and preferably longer. Furthermore, it recommends 80/20 repurchase, thus keeping 80% of the payout in the system. That is same as rollover.

Furthermore, Ponzi schemes have three more characteristics: abnormally consistent returns, secrecy, and bogus product/business. ZeekRewards has the abnormally consistent returns and secrecy (as explained above), and its product is a bit on the iffy side, due to its "dual use' capability. So it has 2.5 out of 3 signs.

There is no proof that there are significant number of people actually buy retail bids when compared to the number of bids affiliates bought, and continue to buy EVERY DAY as repurchase, thus generating the profits in Zeekler that are being shared by ZeekRewards. Affiliates buy the bids to "play", i.e. share in the profits, but as it's the bids that generates the profits (and repurchase of more bids daily), the affiliates are essentially paying themselves by buying bids and generating the profits to be shared, then share the profits. That makes it a Ponzi scheme.

It is also very interesting to note that ZeekRewards is heavily populated by refugees from a Ponzi scheme called "Ad Surf Daily" ran by Andy Bowdoin. Among publicly identified members that belonged to both are listed below.

  • Terralyn Hoy
  • Todd Disner
  • Dwight Owen Schweitzer
  • Jerry Napier
  • Trudy Gilmond

Disner and Schweitzer have filed lawsuit against the Federal government for prosecuting the ASD Ponzi scheme, claiming wrongful prosecution and various other malfeasance. The others have been identified as top earners at Zeek by ZeekRewards, and/or acting as "employees" for Zeek in online forums and/or operate their own websites touting Zeek.

One more item of note: Dawn Wright-Olivares, CMO of Zeek, is an affiliate by the handle of HippieDiva. It is unknown how many VIP points does she have, but she's been there since the beginning.

-----

Q: Why does ZeekRewards look like a Ponzi scheme from various angles?

Q: What are the various elements, like bids, profit share, and so on? Are they genuine profit sharing mechanisms, or just obfuscation and disguise?

Q: Why does ZeekRewards look so much like Ad Surf Daily, a convicted Ponzi scheme?


Any other Zeekreward "problems"?

There may be additional problems with Zeekrewards.

ZeekRewards may be an illegal lottery

As mentioned previously, some Zeekler penny auctions are for $100 cash. This raises potential legal liabilities as it could be considered an "illegal lottery". In the US, only governments can run lotteries where you pay for a chance to win. Private lotteries are illegal.

What is considered a lottery? Three elements:

  1. Prizes
  2. Winners Chosen by Chance
  3. Consideration

So far, the penny auction genre, where you buy bids to play, have not been challenged in court to be a lottery, as they contend that winners are NOT chosen by chance, as one must use some sort of a skill to determine whether to submit a bid or not for the item. However, with automated bidding, does such a skill actually exist? Can you even say that someone spending 1410 bids (at $0.65 each) for $100 cash actually have any skill in bidding?

Keep in mind that states have shut down saving plans that has a lottery attached to it (it's a "no loss lottery", where you keep the money you play, as you only earn less interest), even though it seems to be a great solution to solve the low savings rate of Americans. What will they do to penny auctions, if it ever attracts their attention?

Q: Penny auctions are legal, but rather dangerous, according to the FTC. However, is auctioning off money legal?


Zeekler Bids as Business Expense may not be the whole story

ZeekRewards got Kaplan, the tax advisor, to say that for those who bought bids and gave them away, the bids may be tax deductible. While that may be true, how do you report those VIP points that you get when you gave away the bids? Are they income? Asset? Other?

They are not asset as they are worth nothing in themselves. You can't trade them for money. It's just a number somewhere in Zeek's computer system.

They are not income as you haven't actually received any money. It's not dividend or interest as they claim it's "not an investment".

If you don't report them, then you got a huge net loss and that may trigger an audit.

So what do you report it as?

ZeekRewards interview with tax expert Howard Kaplan gave a VERY confusing answer:

Q: I understand that I will receive a 1099 for VIP bids on a “Constructive Receipt.” Therefore, I should be able to deduct from my 1099 the points that expire as an expense…Correct?
A: Assuming that you operate as a sole proprietorship, your Zeek business is reportable on Schedule C. See Part I, line 2.

A form "1099" is prepared by a business to "contractors and non-employees" as proof of income. A "constructive receipt" is a form of income that has not been actually received, but still must be reported, such as stock options. The answer seem to IMPLY that whatever was asked is true: VIP Bids are considered income. However, it is not VIP Bids that are income, but "profit share" per day.

A theoretical example, assuming 100 VIP bid purchase on January 1, 80% reinvestment, 1.4% average profit share, show that at end of the year, the pool ended up with over 5700 profit share (only 1100 is in cash), and over 2500 points "expired". So what do you report as income, and what as expenses, and what as other?

Profit of 5700 is obviously income, even though you only received 1100 in cash, having reinvested the rest.

Membership fees are obviously expense (10 per month is 120)

What about... expired points, as in the Q&A?

Checking the IRS documentation shows there is no listing for "line 2" on official IRS instructions for Schedule C on how it should be filled out. Search of IRS website shows that there is a "guidance" that line 2 is not to be used except in case of "returns and allowances". Searching the IRS website revealed that "returns and allowances" are only used for cost of rebates and returns off sales price of actual products. As VIP Bids are NOT products sold by affiliate for revenue, it does not seem appropriate to list "expired points" on line 2 of Schedule C at all as "allowances" to be discounted off your income. In this scenario, you only bought 100 bids. You can't really deduct 2500. So where does the expired points go, if you can't count it under "allowances", and it's not an expense?

Also, are you really coming out ahead if you have only received 1100, but have to report income on 5700? Assuming your income bracket is 25%, your taxes on 5700 is 1425... which is MORE than the money you actually pocketed (1100).

Even if you deduct the 2500 expired points (assuming your deduction is allowed, which we don't know yet), so your "net income" is 3200, tax is $800, so your "net" income is merely $300 (after tax). You paid tax on $3200, even though you only got $1100 into your pocket. If your tax bracket is higher, this scenario will be even worse.

Some ZeekRewards affiliates want to deduct ALL bid purchases, including "reinvestments" as business expense. This makes a little more sense. Using the same numbers as above, 5700 points gained in the year, 1100 in cash, and 4600 as reinvestment/ bids repurchase. So you are claiming the business "made" 5700 but "expenses" are 4600 for "net" profit of 1100, for tax liability of 275 (25% tax bracket)

There is one more possibility: gift expenses. However, gift expenses do not apply to "new" customers, and furthermore, gift expense deductions are limited to $25 PER PERSON. If you can't prove how many individuals were your bids given to, your deduction may not be allowed. And if majority of your business expense consists of gift deductions, which exceeds your income, you will likely trigger an audit.

Seems your best bet is with "business expense" deduction. So what do you do with the 2500 expired points? If you deduct *that* as well, you end up with -1400 net income, even though you actually pocketed 1100. Clearly, that can't be right. Apparently, the 2500 expired points cannot be deducted. It is simply lost.

IRS rules are clear: there are "purchases", and there are "expenses". The "official" line from Zeekrewards is that the bids you purchases are "expenses" because they are given away as promotion and thus counts as direct business expense. That would go on line 8 of your tax return as expenses. Remember, get documentation in case you got audited.

Q: Why was the tax advice so confusing? Why can't Zeek's tax expert just give clear advice on what is deductible and what isn't?


Analyzing Zeekreward 2011 Income Disclosure Statement

In March 2011 ZeekRewards published "income disclosure statement" for 2011, and some very interesting numbers emerged. For compliance reasons, I am not allowed to link to it, but it is easily found if you search for "ZeekRewards Income Disclosure Statement" on Google. Here are some highlights for 2011

  • Total number of active members is 15318
  • Calculating the total income by their average revealed total payout to be $58.5 million
  • Average daily payout is $160000 to all members (above divide by 365)
  • As ZeekRewards pay out half of profit, so total profit is 320000 DAILY
  • 15318 is 23.99% of total members, so total members is 63852
  • average payout per member turns out to be roughly $170
  • Yet the highest paid affiliate earned 700000 (yes, that's seven hundred thousand dollars)
  • Zeek claims to give out HALF their profit to members, so Zeek gross annual profit is 117 million

While these numbers are no doubt impressive (perhaps somewhat less impressive than you suspect), there are some anomalies.

  • ZeekRewards doesn't act like a company that EARNED 58 million in 2011. Website problems, auction problems, server outages, and so on are quite frequent. Customer service had been described by some as atrocious.
  • This *huge* gap between lowest paid (zero) and highest paid (700000) affiliates would suggest that unless you have a HUGE network of downlines and/or huge number of VIP points, you have little chance of earning huge income in ZR. Helping ZR to sell bids actually will NOT make you rich.
  • Do you really believe they are making $320,000 daily in gross profit?
  • Roughly 75% of members are not "active", which may indicate members who joined then quit. This would suggest a huge 'churn' rate, as people are quitting to be replaced by fresh members (and their bid purchases).

Q: The "average" income per affiliate for 2011 is $170 for ENTIRE YEAR... So why are so many people claiming they made "thousands"? Where are the rest of them?

Q: If those people quit, what made these people joined, then stopped participating (and thus considered not "active")? Posting one ad per day can't be hard work...

Q: Will ZeekRewards continue to post great profits (probably over 400000 DAILY now), as other penny auctions websites are reaching the US?


End of May Banking Controversy

During the Memorial Day Weekend (end of May 2012), ZeekRewards made an announcement urges all affiliates to deposit their checks as they are shifting banks. And any checks NOT deposited by June 1st, 2012 is considered VOID. The new bank was never named.

There any explanation on why they can't leave enough money to cover the checks.

A later update claimed the credit card processor is in Hong Kong. It is also not named. And that all affiliates will be paid into their eWallets, not checks. While there was talk that ZR was going to go to "eWallets" back in March 2012, the "why" was never mentioned.

This lead to rampant speculation among the affiliates, as well as many statements from other affiliates that offered no answers other than "trust in Zeek". Questions about what bank is Zeek using was often shouted down by other affiliates with the rhetoric: "Why do you want to know? Do you want to call them about Zeek? Call Zeek if you want to ask questions about Zeek!" See screenshot of support forum below.

The "official" reason offered by ZeekRewards is that their existing two banks cannot handle them. Critics of ZeekRewards point out there are plenty of other US banks in North Carolina that CAN handle any sort of reasonable transactions, and speculated that the reason to move payment processor out of the country is to avoid US law, much like Full Tilt Poker Ponzi scheme did until they were shut down in 2011. The critics also speculated that perhaps ZeekRewards was declared PNG by the two banks it had used, and this "cannot handle" is merely PR spin, but this had no proof and thus cannot be considered reliable. However, it does explain why Zeek cannot leave enough money in the account to cover the checks.

Q: Why is Zeek so vehemently trying to keep their bank's identity a secret?

UPDATE: Zeek Support is apparently also banning speculations on the bank, with other members taking the side of Zeek in NOT answering what bank was Zeek using. Here's a screenshot of their support board, with the 4 "removed comments" highlighted:

ZeekRewards Support Forum screenshot (Zeek Logo removed by request)
ZeekRewards Support Forum screenshot (Zeek Logo removed by request)

Update: Zeek Support board is suggesting that a recent "training call" told Zeek affiliates to accept charges from South Korea. (it clearly can't be North Korea...)

NOTE: ZeekRewards logo was removed per request.

Compared to the previous "Please accept charges from ZonaLibre1" (which is obviously Panama) this is even MORE bewildering.

Q: So where is ZeekRewards credit card processor? Didn't ZeekRewardsNews say Hong Kong previously?


End of May Retail Profit Point Controversy

End of May 2012 Zeek posted a daily profit share (RPP) of 8.9%, then abruptly announced that they made a decimal point data entry mistake and will recalculate everybody's points.

This lead to critics pointing out that this only confirms speculation that the profit share is not calculated, but manually entered (from what?). Please see "Is Zeek Rewards paying out too much?" section above to see full perspective.


ZeekRewards Red Carpet Event charges $$$ to shake hands with Zeek Execs

Zeek Affiliates are reporting that the Red Carpet Event prices keep going up and up.

On ZeekRewardNews, the event cost was reported to be $25. And they are keeping the exact location a secret, as they claim the venue was overwhelmed by callers.

ZeekRewardNews says Red Carpet events are $25. And they are keeping the location a "secret".
ZeekRewardNews says Red Carpet events are $25. And they are keeping the location a "secret".

However, Zeek affiliates report that instead of a 300 attendee event, Zeek expanded the event for up to 1000 tickets, and is apparently charging extra $$$ if you want to dine and shake hands with the Zeek execs like Burks and Dawn and so on.

(Previously the line was misread as the event costing $1000, the error has been fixed)

ZeekSupport forum Screenshot
ZeekSupport forum Screenshot

Search of Clemmons NC shows that there are only two suitable venues in Clemmons: Holiday Inn Express, and VIllage Inn Event Center. The Holiday Inn Express has a 550 sq ft Hospitality Room that may be suitable. Some members have reported that it seems to be used in prior Red Carpet Events.

Apparently cameras and other recording devices are PROHIBITED at the Red Carpet event, according to the "official" May event presentation.

Q: Just how much does the Red Carpet event REALLY cost? How much to shake hands with Paul Burks, Dawn, and so on?

Q: Why so much secrecy? (No camera, no exact address, etc.)


Why is ZeekRewards telling everybody NOT to ask questions?

An official rep of ZeekRewards is telling affiliates on official support forum that they should stop asking questions, and if they need to ask such questions they should leave the company.

Brett Gurney (Official Rep) wrote: this (asking questions) needs to stop and if it doesn't those people who have to know this information maybe should just not be in zeek
Brett Gurney (Official Rep) wrote: this (asking questions) needs to stop and if it doesn't those people who have to know this information maybe should just not be in zeek

The only recent episode that I can think of that is similar is how Bernie "Biggest US Ponzi Scheme" Madoff reportedly told people who asked too many questions to leave.

The businessman continues to quiz him — that’s his style, as his accountant can attest. He pokes and prods until he gets answers.

Abruptly, Mr. Madoff becomes firmer. “Listen,” he says. “You ask a lot of questions. I just want to make one thing clear: With all due respect, once you invest, you can’t call me. You’ll deal with someone else.”

The businessman smiles — his accountant knows the comment has shut the door on any possibility of a deal. Perhaps that’s what Mr. Madoff intended.

As much as he needs this man’s cash, he cannot afford this relentless curiosity. After a few more pleasantries, they rise, exchange handshakes and walk toward the double glass doors leading to the elevators.

Consider the questions for yourself:

Q: is asking "Who does Zeek bank with" a reasonable question? If not, why not? If so, what is Zeek hiding?

Q: Why does an OFFICIAL Zeek Rep, on support forum, suggest that questions are NOT tolerated?

UPDATE: An explanation has surfaced recently, through unofficial channels, that Zeek is hiding the identity of their new bank because their old banks were getting calls from irate affiliates who wants to know why their check sent to Zeek had not been posted into their Zeek account. This both answers some questions, but create new ones, if this is true.

Q: If the explanation was true (see above), it's clearly a support issue with Zeek, so they need to fix the support issue. Why are they behaving like dictators, i.e. "shut up or leave"?

Q: If the explanation was true (see above), then their claim about their banks cannot "handle them" is PR spin. They were "politely asked" to bank elsewhere. Why do they not admit so, but instead, tried to whitewash the situation?


Why is a member conspiring with others to "game" ZeekRewards? UPDATE: Website has been removed, no info about whether Chapman was disciplined

When ZeekRewards request that you post ads to promote Zeekler, clearly, you are supposed to take it seriously and post in a place where they are expected to be read by people who are actually interesting in reading such stuff.

Would a ZeekReward "fan site" qualify as such? Surely not! People there already know about Zeekler!

How about a comment section of a blog? Surely not! Do you read the comments when you go to some random website for the ads?

So why is a member called Alan Chapman (whose long history in MLM I will not go into here), opened a Zeekrewards fan site (where it's obviously attracting people who know about Zeekler and ZeekRewards), and is encouraging other members to post their ad in his comments section? Who are supposed to read these ads?

UPDATE: I've been informed by a reliable source that the website is gone. However, I have not received word on fate of Mr. Chapman, whether he remained a Zeek affiliate.

The questions below remained though.

Alan Chapman's website says: just post your "daily ad" here. Will anybody read it?
Alan Chapman's website says: just post your "daily ad" here. Will anybody read it?

Some questions for you to ponder...

  • Does Zeek actually *check* if the ads are posted?
  • Do they care about where the ads are posted? It could just be in some random comment somewhere, like on this guy's Zeek fansite! (or even your own free blog)
  • Do you really want to work for a company where its members are violating at least the spirit, if not the body of the work, and encouraging others to do so?
  • If Zeek doesn't really care about the ads being posted, then what *are* you getting paid on?


Montana Flag. Is Zeek having problems there?
Montana Flag. Is Zeek having problems there?

UPDATE: Is ZeekRewards having problems in Montana?

In June 4th 2012 "leadership call" hosted by Dawn Oliveiras, at about the 18 minute mark she mentioned that 700 affiliates in Montana was affected, without specifying the problem, only that Zeek has "hoops to jump through", about how they jumped through the hoops, flaming or otherwise, in North Carolina and they will do so in Montana as well.

UPDATE: There are now reports on Facebook and ZeekSupport forum that both new member signup as well as bid purchases in Montana have been suspended by Zeek, no reasons were given as of 10-JUN-2012.

Considering that Zeek is headquartered in North Carolina, but had recently abandoned the two banks (Zeek claims the banks can't handle them any more) in North Carolina and moved an unspecified bank (in unknown area), one speculates whether this unspecified problem (or problems) may be related to legal issues. Consider that Montana is one of the first states to sue FHTM as a pyramid scheme, this may be an very interesting development.

Q: Is ZeekRewards having problems in Montana? If so, what sort of problems? Are they LEGAL problems? And why are they being so secretive about this problem?


ZeekrewardsNews -- banking issues topic... out of 65 comments, only 6 are shown. Where are the rest of them?
ZeekrewardsNews -- banking issues topic... out of 65 comments, only 6 are shown. Where are the rest of them?

UPDATE: ZeekRewards hides dirty laundry from public view

Previously ZeekRewards's support forum is available for public view. However, started this Wednesday 13-JUN-2012 they are going "private", i.e. only ZeekRewards member can login and view the issues and/or post them. This is their announcement:

On Wednesday June 13, 2012 this community will be going through transition.

With this migration from a public community to a private community we have some caveats that will take place, all the content in this current community will migrate over.

How does hiding all your dirty laundry from public view provide "better service"? It does NOT.

It also hides all issues being suffered by affiliates from potential affiliates, thus creating the illusion that everything is fine, until that affiliate runs into a problem and was directed to the support forum.

ZeekRewards is already famous for not tolerating dissent. Official rep of that support forum posted message that whoever keep asking questions should shut up or leave Zeek. (see above).

The ZeekRewardsNews website is also notable for hiding VAST MAJORITY of the comments, as the screenshot shows. Out of 65 comments, only 6 are shown. And this is typical of almost all topics on the website.

This is very typical of all ZeekRewardsNews website: only cheerful or neutral comments are published. All "negative", "critical", or "questioning" comments are hidden.

Q: What else are they hiding from public view?


Zeek recommends leads generator with suspect leads

Currently, ZeekRewards no longer supplies leads, but instead, refers all affiliates who needs leads to give away some bids to, to contact and purchase leads from ZCustomers

However, ZCustomers has this very interesting item in their FAQ:

Q: Do the prospects know that they are being signed up for Zeekler auctions?

A: No. They are informed about the Zeekler when they receive their first email from Zeekler with information about how to use their free bids. They only know they are going to receive at least 25 free bids.

This "customer" lead you supposedly got doesn't even know what s/he has signed up. Yet they appear in your "customer list" with accounts and passwords and such already created.

Q: Who created them, if they don't even know they have signed up?

Q: Do you really expect such "leads" to buy any bids after trying your free bids?

Tracing the owners behind ZCustomers revealed that they may actually be ZeekRewards members, yet they claim they are NOT affiliated with Zeekler or ZeekRewards.

Q: Are they really worth $2.00 each if you buy in lots of 200?

UPDATE: A person claiming to be Bessoni, owner of ZCustomers, posted two comments at BehindMLM that denies any wrongdoing, promised to answer questions, then never reappeared.


North Carolina AG's office did NOT say Zeek is legal

Recently a local TV station to Zeekler did a segment on penny auction industry and generally portrayed Zeek in a positive light. However, a statement was read by the reporter at the end that seem to imply that Zeekler and Zeekrewards have been vetted by North Carolina Attorney General's office and have been deemed legal. This turned out to be a mistake, as no such statement appeared in the written version, and when queried, the NC AG's office spokesperson replied that they have contacted the TV station to make a correction, that AG's office has NOT made any determination on whether Zeekler and ZeekRewards are legal or not.

This did not stop ZeekRewards News, the official Zeek News channel, from immediately blogging about their "success", and its affiliates to spam comments at the TV station website with recruiting links. Some even went as far as claiming that Federal Trade Commission and Securities Exchange Commission had "cleared" the company, even though no such thing had happened.

Q: Is the report a genuine report by the local news, or is it a "fluff piece", essentially an advertorial?


MORE ZeekRewards problem with credit card? (Fourth or fifth time?)

There are repeated reports of credit card problems at Zeek, about the monthly charges through credit card billed NOT by Zeek or Zeekler, but with very odd names and merchants not in the US!

In May we already heard that there was at least one incident involving charges for "Zonalibre1", which is Panama, that were supposedly charged by Zeek.

In end of May we heard another incident, confirmed by ZeekRewardsNews that there were some charges by Zeek that were labelled as Korea.

Now in June we just heard that there was a charge by Zeek labelled as Lucky Star Design, but actually originated in Costa Rica.

Now we are getting reports that Zeek told affiliates to accept charges from Lamda EC out of Cyprus, and CCBILL based out of Malta.

Clearly whoever Zeekrewards went to after their departure from the two North Carolina banks is NOT handling their load properly. Or Zeek's own IT is putting the wrong data in the fields.

Q: What is going on over there that they KEEP having these problems?

Zeek stopped taking checks

According to Zeek News, from June 6th 2012 on, they ONLY accept cashier's checks, money orders, credit cards (when they work), and eWallet transactions.

Q: Is this meant to improve customer service? Or reduce their own risk? None of the payment methods here can be stopped except credit card, which can be "disputed".


Zeek COO Dawn-Olivares blundered on leadership call about how eWallet works

In a June Leadership Call, (available on Youtube as a secret listing), Dawn Wright-Oliveras, COO of Zeek, has prepared a 20 minute pre-recorded statement. Very interestingly, at about the 4:15 mark, she claimed that Zeek's NxPay account has no money, and it's NOT a bank account, and affiliates have to PAY things to Zeek through NxPay so other affiliates can take money OUT of NxPay. Why Zeek cannot transfer more money into their NxPay account is a mystery, and indeed many affiliates are now getting very fed up with all these excuses... They fulfilled their part of the agreement and they want to get paid.

Following is an exact quote (except the "uhs" and "okay") from the June 5th 2012 leadership call (bold added for emphasis)

When you take out your wallet out of your purse or your backpocket whatever money you have, you personally put in there, is the only money you have you can use to pay for your groceries with. You may have some cards in there, you may have some checks in there, but if we are taking about cash, which is how an eWallet works, whatever you guys would use, to go ahead make purchases from us with, is what's in the eWallet, is what we can turn around and pay payroll with. It's not a depositing bank account.

However, this explanation DIRECTLY CONTRADICTS what NXSystems says on their website:

Your company establishes an NxPay® account whereby you deposit your payroll / commissions funds (by check, wire transfer or ACH). Then each of your independent representatives establishes an NxPay® account as well. Once all of the accounts have been set-up, your company creates a spreadsheet (within your NxPay® account) that tells NxPay® how you want to distribute the funds deposited.

You *do* deposit funds to eWallet provider and distributes them to people you want to pay, who also have eWallet accounts with the same provider. Everybody works this way, including AlertPay, SolidTrust Pay, Payza, Liberty Reserve, even PayPal, the granddaddy of them all.

Dawn Wright-Olivares is ABSOLUTELY COMPLETELY WRONG about how eWallet works.

Which begs the follow-up questions:

Q: how can a COO not understand how the system works?

Q: If she *does* understand it, why would she lie?

UPDATE: Apparently Dawn Wright-Olivares now suggests that Zeek is NOT paying money into eWallet, and affiliates have to feed money into Zeek's eWallet so other affiliates can get paid. Following is another transcript of June "training call", with some BOLD sections added.

What you put in it is what you can take out and hand to somebody else. Okay, now picture that electronically and you’re going to understand what NxPay is. Okay. It is a global payroll eWallet. It is a lump of leather in your hand. And what we put into the Zeek lump of leather – what the affiliates purchase form Zeek through NxPay, is what they put into the lump of Zeek leather

And whatever is in there, is what Zeek can turn around and give out during commission runs. It is not a bank. It is not Fort Knox. It is not a well that is spring fed from the earth and makes money. It is just a lump of leather, it is a container, and it holds everything that you guys put in it by making purchases, okay.

It doesn’t have any spring fed well. It doesn’t have a magical power to manifest money. And it is not a bank that we can deposit oodles of cash into from other resources. Because eWallets recycle cash.

Q: If Zeek cannot pay people from the profits they are making from Zeekler, then how are ANY of the people getting paid?

From another June "leadership call"

Whatever you guys have purchased from Zeek with, is what we can then turn around and pay commissions with. We can’t just go in there with bags of money and just go ‘here’, no way. The more you go ahead and convert your purchasing to Zeek Rewards through NxPay, the more we can afford to pay out in commissions through NxPay.

Apparently, Zeek COO Dawn Wright-Olivares just admitted that affiliates are paying other affiliates. That would make Zeek a Ponzi scheme.


UPDATE: Zeek COO insist that Zeek affiliates caused NxPay problems

Zeek COO Dawn Wright-Olivares made an update on ZeekRewardNews, less than a day after her own leadership call where she told all affiliates that if you don't pay Zeek with NxPay you are not getting PAID with NxPay either, implying that Zeek (for unknown reasons) is NOT putting more money into its own NxPay account. Affiliates have to pay themselves.

In the update, Dawn insists that the eWallet provider explained it to her that way, so it can't be her fault:

It was explained to me (Dawn) by the owner of an eWallet company (unnamed) whom we are in the process of building a new relationship with…that the model is built to ‘recycle money being spent by each company’s affiliates – to be paid back out to the affiliates in the form of payroll. That it’s not a “deposit account” at a bank.

The problem is this is directly contradicted by NXSystem's own webpage. Her attempt to deflect blame by "citing nameless authority" is "spin control".

Dawn then digress into why they cannot pay individual user's eWallets (something about it's a complicated process)

There are a ton of hoops to jump through for companies to be approved to “deposit/wire” funds into each individual eWallet provider and HOW MUCH is definiately something that is limited by the banks associated with them.

However, people have already been paid through NxPay for the past several weeks. So these hoops have been jumped LONG AGO!

This also does NOT explain why she implied that Zeek cannot or will not fund its own eWallet the previous day. Dawn saved the burger analogy for last:

...Continuing the analogy is like asking us to let you spend money at Burger King® and insisting you pick up your Big Mac® at Wendy’s®.

A more accurate analogy is you made an online payment to say, Best Buy, and you want to pick it up at a local store. On Best Buy's website, you can check whether the local store has the inventory for you to pick up. Given that Zeek has no indicator on which eWallet provider has money to request payment from, and has REFUSED to explain why they can't just transfer funds from one eWallet provider to another (ship to my closest store), or deposit money from their own bank (ship from warehouse), and insist on this DISASTROUS explanation about affiliates paying affiliates by 'recycling the cash' (wait for someone to return an item to the store), what impression do they expect all the affiliates to get?


More eWallet troubles at Zeek, may be fixed?

Just received reports that Zeek is having trouble with SolidTrust Pay as of June 27th, 2012. As they also had NxPay problems, that leaves only Credit Card and AlertPay (or Payza) as ways to pay Zeek. No idea how long this outage would last.

UPDATE: there are reports that it's fixed just before July 4th.

More IT problems at Zeek, lost logins and server errors?

Getting reports out of Zeek that various IT and server problems seem to be plaguing the site. Here are some of the reported problems during July 4th and subsequent days:

  • Lost login info after switching between ZeekRewards and Support website
  • Cannot create new users to receive bids
  • Random 500 Internal server errors
  • Cannot login or lost session

Zeekler owes business model to Ponzi scheme?

According to an e-mail obtained by Ponzi and Scam Reporter PatrickPretty.com, top ZeekRewards member stated that Zeek's business model is based on a convicted 100+ million dollar Ponzi scheme Ad Surf Daily. This email then uses this link to solicit donations to the originator of this scam, Andy Bowdoin, who only recently plead guilty and is sitting in D.C. area jail.

The specific e-mail was from Barbara Alford, a former ASD member and currently ZeekRewards member, though it is believed to have originated from Todd Disner, former ASD member and currently top ZeekRewards member. Other names attached to this request includes various former ASD members, such as Jerry Napier, a top ZeekRewards member highlighted as a success story on the ZeekRewardsNews website.

It is also interesting to note that Terralyn Hoy, a former ASD member, is listed as a ZeekRewards employee on ZeekRewards customer support website (which was subsequently taken behind a registration wall).

Below is an excerpt from the email. You can see the full e-mail at PatrickPretty.com. (Bold added for emphasis)

As you all are aware, Andy, is now sitting in a DC jail ward. He is in need of funds in his account so that he can purchase shoes, tooth brushes, toothpaste etc. the prison system charges ridiculous prices for this stuff. A pair of shoes alone in there costs 65.00.

You are also all aware that I believe those of us in Zeek and other programs that modeled themselves after the business model that Andy pioneered owe this man a great deal of gratitude and more. Please get in touch with your down lines as well.

I have received info where funds can be wired into his account to help him with his daily needs.


Rex Venture Group BBB rating changed from F to "no rating", then back to F

As previously checked (as of early May 2012), Rex Venture Group's BBB rating was a miserable F. However, it appears that a slew of solved issues has lead BBB to erase that rating. As of 14-JUL-2012 the rating now is "No rating".

Checking the BBB rating log for "Rex Venture Group" shows over a dozen resolved incidents from April to June 2012. Prior to May 2012 there were a dozen different complaints that were unresolved. Total resolved incident is now 26.

There are two interpretations to this fact, a good one and a bad one.

Good interpretation: customer service was improved dramatically and the BBB change of rating reflects that.

Bad interpretation: incidents were resolved solely to "game" BBB ratings, and now it no longer says F, complaints will magically cease.

Only prolonged observation will we be able to observe a pattern, and know which interpretation is correct. A business should usually receive complaints fairly sporadically, but consistently. Steady complaints for like years, then suddenly a dozen complaints in 3 months?

UPDATE: As of 02-AUG-2012 the rating is back to "F"


Zeek still processing credit cards through Korea?

Reports that ZeekRewards is processing membership fees through some random company names in Korea has resurfaced on Facebook. "Internet Paygate Seoul" and "Global Kamba" have been mentioned, and apparently Zeek has verified those to be genuine.

Previously we've covered that Zeek had been using credit card processors out of Malta (CCBILL), Cyprus (Lamda), Panama (ZonaLibre1), Costa Rica (Star Designs?), and more, all based on member complaints. Korea had also been mentioned at least once.

The member reported that in general US based credit cards do NOT allow charges from foreign countries as a security measure (unless you tell them you are going out of the country). Thus, allowing "foreign" transactions puts you at a higher risk of accepting fraudulent charges from abroad. Beware.

From Facebook capture, names and pictures blurred to protect members' privacy.
From Facebook capture, names and pictures blurred to protect members' privacy.

Randy Schroeder calls ZeekRewards a Ponzi scheme

I am not going to explain who Randy Schroeder is. You can look that up yourself. I'll just say he's offering a personal opinion, but he is also a head of a major international MLM. And on an Internet conference, he came right out and called ZeekRewards a Ponzi, and predicted it'll meet a fiery end, sooner than later.

Reaction among the crowd had been swift. Zeek defenders are quick to level the "sour grapes" excuse, and they *do* have some evidence... apparently several high level affiliates from that business jumped to ZeekRewards recently (and brought over quite a few downlines). While others made LONG explanations on why retaliating is wrong, it is bad for the industry, it has a chilling effect, blah blah blah. One noted supporter even invited Mr. Schroeder to visit ZeekRewards HQ and meet the ZR team face to face and settle their differences instead of taking it out on the affiliates.

It seems that Mr. Schroeder, in his attempt to NOT go off topic too much (he's there to coach his own people, not to discuss other businesses), simply told the listeners to trust him, as a long time veteran in the industry. He knows what he's talking about. It is an hour-long conference and he spent merely 3 minutes on this topic.

You can find the links elsewhere. I am not linking to it.

I present you evidence and logical analysis. I came to a particular conclusion, which agrees with Mr. Schroeder's conclusion.

Maybe we think alike, maybe we don't. I'll have to ask him, if I ever get the chance to.

But his words do carry a lot of weight.

So here's a question to all the Zeek defenders, who insist that my words lack "authority", that I am a nobody, a person behind a keyboard. To you, my evidence and logic are meaningless even if they are true and logical. Now that a MLM veteran, earning more than you can count, leading more people than you can meet, has called ZeekRewards a Ponzi, are you having some doubts to your conviction?


Consultant representing RVG sent notice to knock this hub offline

A consultant claiming to represent Rex Venture Group sent a notice to HubPages, host of this hub, demanding the hub to be taken offline. The notice was riddled with spelling errors, and claims that the hub is interfering in their business, violated their copyright, trademark, and have made untruthful and libel statements about Rex Venture Group and its businesses.

As a precaution, Hubpages took the hub offline while it investigated this person's claims as well as get in touch with me.

The complaint refers to trademarks NOT owned by Rex Venture Group (despite claims that they are), copyrighted terms that are covered by "fair use", while naming sections that are alleged to be "untruthful" and "libelous" without explaining what exactly is untruthful and libelous about them.

When I requested details from this person, he said he couldn't POSSIBLY create a list of what's untruthful or libelous and why about the hub by Monday. (I contacted him on THURSDAY). When I pressed for more details, he replied with veiled legal threats about "pursue all legal venues".

EDIT: The hub is back online on August 1st, 2012, 6 days after the complaint was sent in. The other party NEVER told me or Hubpages what exactly was untruthful or libelous, nor does he REALLY have authority to issue takedown notices. It is now over a week later and not a single word had been received.



Keith Laggos left ZeekRewards, revealed he joins companies he lauds on his magazine AND consults for

Keith Laggos, MLM Consultant, and publisher of NMBJ, an industry "journal", was found to be touting Lyoness, a suspect scheme that elements of frequent shopper card and pyramid scheme, to Zeek affiliates. While on a conference call, he claimed credit to have guided Zeek toward FTC compliance by moving their credit card processor offshore (this hub have previously identified at least 5 processors in 5 different countries used). However, he also revealed he is a Zeek affiliate with 40000 downlines, and is making $45000 a month, and is touting Lyoness as a "plan B" for all Zeek affiliates that listened in. Furthermore, Laggos predicted that FTC will STILL hit Zeek in a few months.

The shock is complete at both Zeek and MLM advocates. When Troy Dooly, industry insider attempted to verify this at Zeek, Zeek COO stated that Laggos no longer consults for them. Furthermore, Zeek affiliate rules specifically prohibits "poaching" (i.e. cross-recruiting).

Analysis and reaction

Mr. Laggos is in an extremely gray area both legally and ethically. One should not be allowed to be an affiliate in a business he consults for as well as publish articles lauding that business. This is a severe conflict of interest, on multiple levels. Yet it is clear he had done so with Rex Venture Group / Zeek Rewards. To have him turn around, violate affiliate rules, and push yet some other scheme is just... beyond the pale.

However, few people know that Mr. Laggos had a run in with the SEC back in 2002 when he published an article in a different journal lauding a different business (called "Converge") without disclosing that he's being paid to do so, and helped to perpetuate a stock scam.


North Carolina Credit Union warned members about Zeek being possibly fraudulent

Reports surfaced on BehindMLM that at least one Zeek affiliate received a call from a local credit union (in North Carolina, same as Zeek) , who noticed that the member is doing business with Zeek and wish to warn the member that Zeek may possibly be fraudulent. Since then several people have contacted the credit union through separate channels and have received somewhat different answers, that seems to stop short of calling Zeek an outright fraud, but warns all members to exercise additional due diligence.

We are awaiting clarification, which may or may not be forthcoming. It is not known what lead the credit union to such a decision, if indeed one was reached.

UPDATE 04-AUG-2012 ZeekReward News released a statement by new COO Caldwell that he contacted the credit union and tracked down the person who "like all our critics, he was behaving unprofessionally by acting on false information". Unfortunately, Caldwell failed to point out what exactly was false about the allegations. He claimed the person admitted to not knowing direct selling related laws, but failed to name the laws in question.

Caldwell turned around and blames the affiliates who spread the news, claiming that the memo is INTERNAL to the credit union and thus irrelevant, and claimed "sometimes, we are our own worst enemies", Furthermore, Caldwell pointed out that any affiliates who continues to "fan the flames of issues that are the proper responsibility of Zeek Corporate…and it’s a violation of the Zeek Policies and Procedures for which violators will be held responsible."

Analysis

Unfortunately for the affiliates, instead of addressing *what* would cause a Credit Union to circulate an internal memo called RVG and Zeek possibly fraudulent, the new acting COO continued to pay the "blame the affiliates and the critics" game like his predecessor.

By portraying the critics as "self-appointed critics with no standing in the professional community", he hopes to discredit all critics. Unfortunately, more and more MLM veterans consider RVG and Zeek to be a potential fraud. Schroeder was the first, and Laggos only a few days ago. Clearly, those are not people "with no standing in the professional community".

There is a Chinese saying, "those in the trap can't see the trap, those outside can see clearly." Mr. Caldwell is using one of the bad arguments I've identified, which I called "you can't judge us unless you're with us" argument. Apparently, by Mr. Caldwell's logic, only ex-Felons and ex-Cons can be prosecutors and cops. They would have "standing in professional community" of criminals.

The promise to go after Zeek affiliates who was spreading the info is also troubling. Instead of "Thanks for bringing this to our attention", it's "f*** you for spreading rumors!"

IMHO, Caldwell was brought in as the "bad cop" to counter Wright-Olivares's "good cop". Apparently, carrots are not enough to bring the affiliates in line, so they brought in the stick.


ZeekRewards BBB rating back to F

In Mid-July 2012 the BBB rating was temporary changed to no rating. However, it seems to be back to F, as it was before the "no rating" period.

Zeebates, mandatory ad package, and qualifiers

ZeekRewards is introducing multiple programs, which may or may not help it achieve compliance.

ZeekRewards appears to be introducing a "mandatory" $30 per month ad package made by their official video maker USHBB that is required for all affiliates of a certain level. Details from this is sketchy and will be updated as they become available. USHBB is known for making videos starring Andy Bowdoin and his Ad Surf Daily Ponzi scheme, and only makes videos for "internet marketing" companies.

ZeekRewards announced Zeebates, which is supposed to be some sort of a frequent shopper card that gives you money back. Details and participating merchants are sketchy. Some have compared it to a program called Lyoness, which was under suspicion in Europe as a pyramid scheme, and was sued as such by one ex-member. When details become available this will be updated.

Zeek have previously hinted at some major changes to the affiliate's qualifiers, and this was repeated at some websites, but few details have surfaced, only that big changes are coming. The word "qualifiers" is interesting, as it implies additional criteria to meet. Some affiliates are wondering if it's a way to pay less people, i.e. people have to do more things, like get customers before they get paid. When more details emerge this will be updated.


Zeek Shut down by SEC

On August 17th, Zeek Rewards and its related companies, Zeekler and Rex Venture Group, was shut down by SEC, in cooperation with Secret Service.

If you lost money to this scam, refer to the other hub:

http://kschang.hubpages.com/hub/Zeek-Rewards-Recovery-QA-all-sourced-from-news-reports-and-experts

Conclusion

To summarize the findings:

  • ZeekReward operated for over a year before deciding to check whether itself is compliant with law or not, and upon the conclusion, instituted huge changes in advertising, but little fundamental business changes.
  • ZeekRewards rewards you NOT for your work, but for the amount of money you put into the system, and keeping it IN the system as long as possible, and for recruiting other people who do the same
  • ZeekRewards pays usurious rates of average 1.4% daily profit (thousands of percent annually), which far exceeds profit share of scams, such as Ad Surf Daily and is only matched or exceeded by some HYIP Internet Ponzi schemes.
  • Despite the compensation package rewarding you for putting money in and keeping it in, and fits definition of "investment contract" as per "Howey Test" by SEC, ZeekRewards insists it is NOT an investment
  • ZeekRewards abruptly terminated hundreds (perhaps, thousands) of affiliates in multiple foreign nations with no proper explanation. Explanations thus far offered does not make any sense and changes from week to week.
  • ZeekRewards fits, at least partially, the three criteria MLM Attorney Gerald Nehra used to define a Ponzi scheme
  • ZeekRewards may be considered illegal lottery as winning seem to depend on chance instead of skill, and winning cash (in some cases).
  • ZeekRewards is extremely secretive, deletes/hides negative or questioning comments from public view, even revoking public viewing of its support forum.
  • ZeekRewards refused to discuss who are they banking with in the US, after leaving behind two banks in North Carolina, with official reps suggesting that any one who wants to know should leave the company.
  • ZeekRewards release vague statements about "hoops to jump through" in North Carolina and Montana, but gave no details.
  • ZeekRewards' top affiliates including many former members of Ponzi schemes such as Ad Surf Daily

Does ZeekRewards make sense? No. It claims it is NOT an investment, yet it behaves like an investment, rewarding you for giving it money and keeping the money in for as long as possible. Any work you do is purely incidental. Furthermore, it is behaving like a very poorly ran company, not one that supposedly earned millions and paid out millions in 2001. Its secrecy and attitude toward questions matches Bernie "Ponzi king" Madoff. Its customer service seems to be getting from bad to worse.

Can ZeekRewards be profitable? Yes, if you choose to give it money first (hundreds, perhaps thousands of dollars), and keep it in for several months or longer. But then, so can most scams, at least for the short term.

Would I join ZeekRewards? No. The business model makes no sense. One should not have to spend money to make money. The company's compensation model makes it clear it is after your MONEY, not your hard work. I am very suspicious of any company that wants money instead of work, then insist it is NOT AN INVESTMENT. Indeed, many critics have pointed out that this is basically a Ponzi scheme, where you are being paid with your own money (basically you gave it as free loan to Zeek, with promise of much future $$$).

Was I being negative? No, merely truthful.

Now consider this final question

Given the risk (all the unanswered questions, potential and actual legal problems, time delay in getting your money out, misrepresentation "not an investment", Zeek customer service problems, if it's a scam I'll be outcast from my friends and family, refusal to answer questions, and so on and so forth...)

And the amount of work (minimal, put some money in, post one ad a day, and maybe recruit a few more people to join)

Is the reward (possibly earn a LOT of money, thousands, perhaps tens or thousands or more, over some unknown period of time) worth it?

THAT is the question you have to weigh for yourself.

I hope you are more informed now regarding ZeekRewards, and make up your mind whether to join or not. If you have comments, please add them below. Keep in mind that I will deny comments that includes referral IDs, as well as frivolous "I made money! Join today!" type comments.


Reader Reactions

So far, reader reactions generally falls into the following types

A. ZeekRewards is a fine program and you are just stupid to bad-mouth it.

My reaction: The truth can hurt, sometimes, a lot.

B. ZeekRewards will make / made me money so I don't care what you say.

My reaction: then you are choosing with your heart, not with your head. And the heart is not the wisest of your organs.

C. ZeekRewards is indeed suspicious and I'm getting out as soon as I recoup my money.

My reaction: your decision is your own business, but thank you for sharing.

D. You have confirmed my suspicions in Zeekrewards and I'm glad I / friend / relative did not join

My reaction: I am glad my information was useful to you.


Epilogue

The Zeek Rewards Ponzi scheme turned out to be the largest ever in the US in terms of number of victims. This is unfortunate, as the warning signs had all been there.

Those who are looking for income opportunities should study this scam and note the warning signs that analysts have been pointing at all along, and WHY they are ignored... and make sure they don't repeat the mistakes of million people.

Comments

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    • profile image

      Odaine 3 years ago

      This is my review of a similar network marketing program with almost the same structure as ZeekRewards, let me know what you guys think https://www.youtube.com/watch?v=vOaEaeeKeyg

    • karenleecpa profile image

      Karen Lee 3 years ago from Bellevue

      Well it seems both Oz and I were both on the right track as to what was going on, however neither of us had it all down.

    • kschang profile image
      Author

      kschang 3 years ago from San Francisco, CA, USA

      You really think people are that stupid, hmmm? Don't they teach in Romania that money don't grow on trees? Guess that transylvania bloodsucking thing have evolved into sucking wallets instead. Hahaha.

    • profile image

      Jhileade 3 years ago

      Hello, friend!

      Did you know that you can smile again, a company with the same ZeekRewards back office. Now you are able to believe and we work together on Pay Of Rewards, a company based in Romania, free from the SEC / USA.

      Join now

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      Answered in the other hub. Probably not, but then it won't be profitable either.

    • profile image

      Kenneth 4 years ago

      Hey Chang

      What do u think about phone service Solavei that pay member for recruit customers. Do u think it a legit or will be collaspe like Zeek?

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      It's out of Hong Kong. it's a clone of a Zeek clone that was behind Go Fun Places.

    • profile image

      rsblue21 4 years ago

      all the Zeekers are now putting all their money into another penny auction site called Bidders Paradise or Better Living. They get their payouts in cash from others buying in. They conduct weekly meetings and are recruiting like crazy. It started in September of last year, and already has thousands of "investors". Problem is that its offshore and it is the most blatant ponzi scheme I have seen in years. Is there anyone we can notify????

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      BREAKING NEWS: New letter from the receiver states that the claims process will start very soon upon court approval.

      http://zeekrewardsreceivership.com/pdf/3-29-13%20-...

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      @RSBlue21-- the website's registered by a guy who sells miracle engine oil out of msp-power.com. You tell me if it's "reputable" or not.

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      @RSblue21 -- at first glance it appears to be a valid penny auction website in Hong Kong, then I started reading about "when you sign up you get 30 bids given away by one of our members", then in the "about us" it talks about "profit sharing", and that really reminds me of Zeek Rewards.

      I would not be surprised if this had something to do with eAdGear, which is based in Hong Kong, or one of its local competitors, which basically is Asia's Zeek Rewards.

    • profile image

      rsblue21 4 years ago

      have you ever heard of bidders paradise

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      Really, they don't use Lyoness US? How interesting. Of course, they don't call it investment, but "down payment on a gift card". You don't get the whole gift card unless you can convince OTHERS to also make "down payments" on gift cards. Ha-ha. But we're getting off topic. Suffice to say, suspicious, approach with extreme caution.

    • profile image

      Wondering 4 years ago

      Thanks. Wow what a long dizzying review at Behind MLM. (and comments) Cashback Living is a name that Lyoness is being marketed as in the US.

      I am being approached to join this but it is so clear how the free is largely a lure to get people to invest. It poses as a legal nice looking loyalty card which plays on peoples trust and then hooks people into a business where the real money to be gained is by investing and getting others to invest.

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      Lyoness is a suspect Ponzi being pushed by ex-Zeekheads, including former Zeek consultant Keith Laggos. You can find discussions on it over at BehindMLM.com.

      Never heard of "Cashback Living" but that already sounds suspicious. :D See if OzSoapbox at BehindMLM will add it to his review queue.

    • profile image

      Wondering 4 years ago

      Great write up and string of responses. I was wondering if you have any info on a company called Cashback Living or Lyoness that is attracting many people on the rebound from Zeek.

      My email if you don't want to post this is sumsstuff@gmail.com

      Thanks for your excellent work.

    • profile image

      Swen3 4 years ago

      Hey Chang I don't know why all these losers who have nothing good to say waste space on here. All your work is much appreciated my friend so keep it up! Take care mate.

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      @huh -- Ah, my ranting friend from Columbus Ohio... are you here to express your opinion of me, or to discuss Zeek? Seems like you're not really doing either. Your next opinion goes to the spam box if you can't stay on topic.

    • profile image

      huh 4 years ago

      it's you to the T------ A know-it-all or know-all is a person who obnoxiously purports an expansive comprehension of a topic and/or situation when in reality, his/her comprehension is inaccurate or limited. This display may or may not be directly expressed.

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      @rsblue21 -- no, but the name already sounds like a scam, to be honest. A lot of these schemes use tsunami, typhoon, etc. Why? Those are natural DISASTERS, are they not? I recommend a few of my hubs for reference:

      https://hubpages.com/money/7-Questions-to-Ask-When...

      https://hubpages.com/politics/How-an-Internet-Ponz...

      https://hubpages.com/money/9-signs-your-MLM-Opport...

    • profile image

      rsblue21 4 years ago

      have you heard of WHPT - work at home prospect tychoon?

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      @ColumbusOhio -- your troll rants are rather amusing to read. Maybe one day, "Sven", I'll gather them up and include them in my book I'm writing on Zeek.

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      @JJergy -- if you can only post stuff to insult me, instead of discussing Zeek, then you'll get your comments denied. Everybody needs to stay on topic, even me.

      @informed -- you will be bitterly disappointed as that's merely your delusion. Patrick and I live thousands of miles apart. Just because we talk about the same things doesn't mean we are the same people. Oh, and your next comment will be denied if you don't stay on topic, i.e. Zeek.

      Oh, and you two are the same person out of Columbus Ohio. And you're accusing me of sock-puppeting? Very funny.

    • profile image

      informed 4 years ago

      It will take me a few to figure out how I can let everyone know that you and PPretty are the same person.

    • profile image

      JJergy 4 years ago

      Kschang is a manager, so he is skilled in managing people. He sees you as his little worker bees and you listen to what he says because he is the manager. Chang, you are turning your blog into a circus. You are digging pretty deep to get people to believe that your so right. Stick with "arguments" based on the case. I can come out say, that you had a crush on a girl at one point in your life, so I could come out and say Kschang only has blogs to impress girls into thinking he's a journalist. Geez, I heard the national enquirer was hiring. Kschang, good fit.

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      NEWSFLASH: Clifton Jolley, the PR expert hired by Zeek in its final days, revealed that Paul Burks had performed as a novelty magician, and is skilled in distracting / deceiving people. This is confirmed by newspaper archives where he performed alongside Grand Ole Opry singer Sam Houston as "the singing magician".

    • profile image

      DMartelonline 4 years ago

      @kschang - that's why nearly all of the work at home schemes avoid PayPal like the plague - they are almost always Clickbank products. Not saying Clickbank is shady but if the shoe fits, wear it.

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      @AusAlex -- Paypal's Acceptable Use Policy does indeed prevent "shady businesses" using Paypal, which includes almost all MLMs as well as HYIPs, scams, and get-rich-quick schemes. The problem is that company the "donation" goes to is NOT an MLM. So their own explanation is, for lack of better word, bullsh__.

      They tried taking checks for a while if you type in your bank routing number and check number... but they don't even offer encryption on their website. (that's right, no SSL at all).

      Even the ZeekRewards Receiver noticed all the bullsh__ being spread about him and the SEC. There was a letter released on the 13th.

    • profile image

      AusAlex 4 years ago

      I got the Kettner email over last weekend, and one of the interesting thing I noticed (apart from the SEC admitted... b#*$$Sh^%) , was that they are no longer able to use PayPal to collect funds. According to tbiz.... PayPal does not work with MLMs (on his I cannot comment, as I have not asked PayPal), but what I did notices (as I do use PayPal for other online purchases) that they have introduced a new service .

      They will "pay for your purchase/donation" but not deduct it from your account/ccard for 30 days. At this point you will get a email, that unless you dispute the charge (can't remember exact wording) your account will now be credited. If you dispute the charge, either as you did not make it or you did not receive the item you purchased, they will not charge you and take up collection from the vendor.

      While I doubt that this was new "protection" was introduced because of zeekler and its spin-off idiocies, one of the first things I noticed was that you couldn't use PayPal to "buy VIP points" on Zeekler, which for me was very strange, and PayPal was the "grandfather" of all eWallets and probably the most respected (in my opinion).

      I am still fascinated and saddened by the number of people falling for the continuation of the same scam.

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      @NapoleonJames -- if you actually read the Troy Dooly's site, you should have seen the big disclaimer on top: the alleged speaker will neither confirm or deny.

      This is THIRD-HAND HEARSAY. Troy Dooly was citing someone who claimed to be relaying information from this Robert Craddock guy. When Dooly went to confirm this with Craddock, it's "neither confirm nor deny".

      In other words, this is about as reliable as "Elvis is an alien".

      Come on, put on your thinking cap... you really think any competent SEC attorney (one that got Burks and his attorney to fold and give up the whole company) will "let slip" something to lawyers from SNR Denton, who's supposedly suing them? And if SEC case is this weak, SNR Denton should not have any problems taking on the case. Why did they return the retainer, eh?

      There ain't no "mistake".

      For your information, Ad Surf Daily supporters did the exact same thing. You may have heard of Todd Disner? He may even been your Zeek upline. He said the same thing about Secret Service's evidence against Andy Bowdoin, head of ASD (yes, Disner was in ASD too). Disner had sued the Feds, claiming their evidence is "tissue-paper thin", that "US Prosecutors don't really have a case but to save face have to continue".

      The difference is Andy Bowdoin chose to fight, and lost. Burks didn't even bother to fight. So who's really fighting, hmmm?

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      @Dannis -- I am doing some good in this world by analyzing potential scams. How about you, besides lame "get a life" remarks?

    • profile image

      Dannis 4 years ago

      Everyone needs a hobby Chang, but most people need a life. I guess, in your case, one of the two is all you get.

    • profile image

      AusAlex 4 years ago

      @angelamalkovics -- Igen, vege van! Tudom hogy most sokan penzt kuldenek az "ugyvednek" hogy ezzel a penzel be fogjak perelni az SEC-t, de ne hidjel nekuk. Ha tenyleg sikerul nekik akkor te is (es mindeki) vissza kapod a penzedet, ha nem akkor legalabb nem vessztetell megtobb penzt!

      (sorry about any of the typo's I haven't written in Hun since I was 7, and that was a WHILE ago :) )

    • kschang profile image
      Author

      kschang 4 years ago from San Francisco, CA, USA

      Of course it's over. Burks already signed away the company and accepted the judgment.

      https://hubpages.com/technology/ZeekRewards-shut-d...

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      angelamalkovics 4 years ago

      Hi everybody, I am writting from europa, hungary. Does anybody can tell the truth: zeekrewards game over? Because in Hungary many people say that "the news about zeekrewards are fake. The zeekrewards is going to work in a few days/month again." I think game over!

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      Your first warning sign about that is that you can't see who registered that domain. It's hidden by domain privacy. That should tell you this thing is likely bogus. I've also seen several "prelaunch" domains that fizzled and died on Behindmlm. Check over there.

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      unbelieveabler 4 years ago

      Hi Chang. I admire your analytic skills. Thanks for the best blog about ZR ponzi scheme on earth! However, if you have time, please help readers by keeping an eye for this getprelaunch.com. It sounds very similar to ZR.

      Best regards,

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      @JJ -- all that money are in account that belongs to Rex Venture Group, except for one bank in NC, who reported that it has money that is in account of "NxSystems", presumably that means NxPay. No word from NxSystem yet. As Dawn had previously called NxPay "our white-label eWallet", one wonders what exactly are the ties between RVG and NxPay?

      And I'm still researching the interest thing. Stay tuned.

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      JJ 4 years ago

      What does money found in different bank accounts and other companies have to do with Zeek being a ponzi? Also, I am still interested in the "interest".

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      @Jerry (i.e. JJ, JK, whatever) -- posting from work now? Sheesh. That ain't no residential ISP... But at least you're somewhat polite this time.

      @AusAlex -- the court did say money seized will go into a "interest bearing account", but did not specify where the interest goes. I'll ask around. As for that "lawsuit", I see a smokescreen. See my analysis here:

      https://hubpages.com/money/Zeek-Rewards-Recovery-Q...

      @Observers, DMartelonline -- while I thank you for your support, it's getting a bit off topic. :)

      NEWSFLASH: New court documents reveal Secret Service have also seized funds belonging to Zeek. See PatrickPretty website for details.

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      DMartelonline 4 years ago

      You know things are getting desperate when we're thinking that the reason that Zeek closed down is some vast right-wing (or left-wing) conspiracy. Sheesh what are people drinking (or smoking)? I want some ;)

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      Observers 4 years ago

      @kschang - JJ shows how ignorant people are about these pages designed for writers. You have no control over the ads that appear. Nor do you "own" the page. I'll bet JJ has never cultivated a garden. Cultivating takes you deep into the mystery of how things work and you can only receive insight and revelations pointing you to the truth.

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      AusAlex 4 years ago

      Although JJ does seem to be a bit of a conspiracy nutter, I know a few myself, he/she did raise one question: what does happen to the interest that accrues during the receiver's investigation? If ASD is anything to go by, this could take a few years, and the interest on a few hundred million (I don't know current rates in the US) will add up to a lot over 3 years.

      My second question is: can these funds be return to "investors" why there is a law-suit against the SEC that is (may be) filed soon?

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      Jerry you know who! 4 years ago

      I think everyone should be skeptical of everything. Websites, advocates of skepticism. Skeptics of Advocates. If someone offers you a job, do a background check on the company. Who cares if it's Google, Microsoft and it's 200,000 grand a year. Look at the offer, call them back and tel them that there is no way in he__ that someone could afford to pay so many people hundreds of thousands of dollars a year and still sustain. Turn down that offer and start a blog against companies willing to pay people a lot of money. J/K Have you ever seen that movie office space? Imagine me sitting in a cubicle making tons of money and doing less work that that guy. Life is truly sweet. People trully worked harder at Zeek in a day, than I work all month. :) For that reason Zeek is BS!!!! How dare people try to influence me to work for my money!!!! I don't have time to place silly ads between my time playing fantasy football, commenting on blogs, and 3 starbucks runs a day!!!!

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      @JJ -- Why should I answer your derail? You've been warned. Next comment from you is going into the spam bin. Have a nice day.

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      Jerry Kergenson 4 years ago

      @kschang, Don't deny your involvement with the Romney campaign. It's sad when it's posted all over you blog, but you are still unable to admit that fact. Money that is not reported is being pocketed by your lover Romney.

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      kschang 4 years ago from San Francisco, CA, USA

      @JJ -- ah, the shifting goalpost. First it's Romney campaign, then it's "next election". Any further retreat planned, JJ?

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      Jerry Jergenson 4 years ago

      The receiver is part of the conspiracy. duh. Money is not reported and given to the party. Also interest from hundreds of millions of dollars sitting in the receivers bank account accrues for the next election. Zeek.

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      @JJ (who apparently also posted as "Janet" from same IP address) -- How can money being held by receiver for a couple years stuck in a court mandated account win anybody a campaign? Your conspiracy is rather inventive though. Still, please discuss Zeek, else your next comment is gonna be marked as spam.

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      Jerry Jergenson 4 years ago

      It appears that zeek was shutdown by Romney supporters right before the election. It appears that hundreds of millions of dollars could win someone an election. Kschang, you wouldn't know anything about that would you? It's not like you don't reap advertising dollars from the Romney Campaign? Why don't you give up some of that cash to your boyfriend PPretty. He could use some support.

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      Janet Fergeson 4 years ago

      Communists

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      Izy1635 -- 庞氏骗局有什么好捍卫的?都被SEC锁门了!至少knoble 很有礼貌。其他的人,别提了!

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      lzy1635@126.com 4 years ago

      Knoble 谢谢你的头脑清醒的答案。我喜欢的专业和有礼貌的答复Zeek捍卫者,是合理和研究,即使是“有偏见”。我只得到很少的,如果你读通过的答复。

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      NEWSFLASH: Top Zeek Affiliates Todd Disner and Dwight Owen Schweitzer's lawsuit against the Feds for closing Ad Surf Daily ponzi had been dismissed.

      COMMENTARY: Disner is bankrolling an effort to sue the Feds for closing Zeek. You tell me how likely is that to succeed? AND they want YOUR DONATIONS.

      SUGGESTION: If you do send money, send it DIRECTLY TO SNR DENTON, attention the 2 lawyers named, with a printout of the solicitation, via REGISTERED MAIL. That way, it can't be diverted into other purposes.

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      kschang 4 years ago from San Francisco, CA, USA

      @dosborneo8 -- sorry, I'm not linking to that piece of spam. Not only it has NO chance of succeeding (in accepting the "final judgment" Paul Burks already waived ALL RIGHTS TO FUTURE APPEALS) it is soliciting DONATIONS by a man who claimed to represent RVG, but is at the same time selling customers to Zeek affiliates. It is also bankrolled by a person who has a LONG history of filing frivolous lawsuits against governments for prosecuting HYIP / Ponzi schemes he was involved in (and benefited from). I have explained my reasoning in my other hub

      https://hubpages.com/technology/ZeekRewards-shut-d...

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      AusAlex 4 years ago

      hey, sadly i did not do my research in time, and I am in Finance (how embarrassing), but there was always something that stopped me for putting more that $200 in. every time i sat down a the computer, either my internet was down, the server was down, did not accept my credit card... and many other occasions, so I guess the world was trying to save me from my self.

      What I find really sad, and in the log term dangerous (for themselves) is that there are still people out there who truly believe in Zeekler. I was reading another blog, where a guy was really proud of his wife for sending a letter to the SEC, about how they had no right to shut Zeekler down. (I will not post link as those who want to can find it)

      Another thing that is interesting is all those idiots (I don't mean all the affiliates, as i was also one of them (although these days I have been calling myself an idiot), bus the ones who post that the only reason Zeekler was shut down was because they did not want people to make money. I mean seriously!?!? I would like to laugh, but I just find it sad.

      For those people (much earlier in the discussion) who comment (these I will call idiots) essentially that: so what if it IS a Ponzi, we are making money, so it is a good think. I think this shows that it is a good think that one of things a government is supposed to do is save people from their own idiocy.

      I am not in the US, and am interest to know if it possible (how) will the receiver 'claw-back' money from overseas affiliates?

      Someone earlier mentioned a group of people forming a lawsuit against the SEC, as they have "proof" that Zeekler is not a Ponzi, and that the SEC lied (or only presented the info that suited them) and they say that they are likely to win the suit and need support (IE: your money). I have been to the site as I have been getting emails about this for the past 5-6 days (apparently the the lawsuit was started by one of my up, up, up.... up lines), the problem I have so far, as that again they are not say WHAT information they have, how this will exhortation ZR.... In fact my question would (I will not bother to ask, as it is unlikely that I will get a reasonable answer (yes I am cynical), is HOW they came by this information as ZR has not released ANY information about exactly how/where they make their money!

      Another this i have realised through this ( I learned it number of years ago, but in my greed I ignored my own misgivings), is NEVER invest more money than you are willing to lose! Again I thank the universe (my good karma) for not letting my put more money in.

      For those people who still believe: I have a bridge in NY city that I would like to sell you.

      I am not trying to kick anyone when they are down, and feeling bad about themselves (been there, done that), but any time in the future that someone says that "this is a sure-fire way to make lots of money for very little (or no) work, please remember what I said.

      If you truly believe that it IS a legal and viable enterprise, the only put in what you are willing to loose that DON'T build your future dreams on it. If IS a proper and viable business plan you will get there in the end (even if it takes you longer), and it isn't you can walk away (yes feeling fullish) but you will not be financially devastated. unless like Kchang said, you either inherit the money or win the lottery (luck UK couple and their 220m US winnings) the only way to make money is to work for it!

      Good luck to everyone in the future, and remember to always be skeptical, and never just BELIEVE something because they say its true!

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      skeptical 4 years ago

      I just found your blog and find the comments very interesting. A family member signed up as an affiliate in May and tried to convince me to sign up, as well. I listened to his spiel and immediately thought "Ponzi scheme", wished him well and declined to join. I remarked I truly believe the old addage "if it seems to good to be true, it is" and I stick by it. This is not the first Ponzi scheme I have been asked to take part in and I'm sure it won't be the last, but it has made me more determined to avoid any scheme that guarantees big rates of return.

    • profile image

      Call the Receiver! 4 years ago

      poo just called the receiver 14 times today!

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      @Yami Shogun -- can't you see that I already covered that above? Sheesh.

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      NEWSFLASH: Oh, and the receiver stated that please stop calling their office. If they have any news to share, it'd be on the website. Really. Answering phones takes time away from investigation and nailing down money to be return to you all.

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      NEWSFLASH: Receiver news conference stated that $600 million by SEC may be 'conservative' (i.e. it will get BIGGER), and he is now estimating that number of victims may be closer to TWO MILLION. All cashier's checks in Zeek possession belongs to ZeekRewards (and thus the receiver). Right now he's busy nailing down every last dollar in Zeek possession and tally up the total. He is obligated by court to go after every dollar, he stated. He did not say what that meant, but that presumably includes after any other assets in Burks possession, as well as possibility of clawback lawsuits. Any and all lawsuits against Zeek has been stayed by court order, and he needs more time to investigate the matter. it's too early to talk about distribution.

      http://www.forbes.com/sites/jordanmaglich/2012/08/...

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      wife 4 years ago

      THANK YOU kschang for all that you have done to save our $. I was being pushed by my husband and family to invest because of all the "money" they were supposedly making. I felt it was a ponzi scheme and because of this blog I said no.

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      Make sure you read my other hub: what should Zeek affiliates do now:

      https://hubpages.com/technology/ZeekRewards-shut-d...

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      mac 4 years ago

      I'm listening and I'm caught up on your blog finally :D. Thank you very much for your time and effort into researching this scam. You are very much appreciated and have become a major read for myself and others I have shared this site with along with BMLM. I'm off now to read archives on BMLM. A shame I didn't do enough due diligence and find these sites sooner. (Obviously, I couldn't find the store to buy my ammo from to shoot the duck) :D Thanks again.

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      @Observers -- Yeah, but who's listening besides a handful of you? :)

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      Observers 4 years ago

      @kschang - amazing, simply amazing. . .I hope people reading this will take to heart exactly what's going on and decide not to participate with cheesy, unprofessional business people. In addition, thank your lucky stars that KS Chang has an interest in exposing convoluted business practices. . .did I say "thank you yet?"

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      @DMartelOnline -- There's more to come. Lots more.

      NEWSFLASH: Top Zeek affiliates, backed by Disner (top Zeek earner), and Craddock (RVG consultant), are trying to sue the SEC, and claim to want to restart Zeek.

      Think about who's backing it: top affiliates want to keep it going. They are using YOUR money (that would have been clawed back by the receiver) to fight YOU who should be getting your money back.

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      DMartelonline 4 years ago

      KS Chang, once again your Hub is linked in one of my blog posts. I saw all the whining and crying before I read your hub :) But here's the upshot. These people are seriously delusional: http://noscamworkathome.biz/ponzi-scheme-members-c...

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      @Mac -- you'll have to ask Craddock. He's the Consultant for RVG, not me. If he had insider info, he should have released it a week ago, or it's something not even head of the company, Paul Burks, and his lawyer(s) know about. And what are the chances of that, since Craddock wasn't ever mentioned as working for Zeek until end of July, which is only like a month ago?

      Or the worst case scenario: he has nothing, and he just want to pump dumb affiliates for more money.

      You decide which is more likely.

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      mac 4 years ago

      KC, can you maybe shed some light or thoughts on what "proof" these delusional ppl might have? (Following is the part that I was asking about earlier I guess);

      Over this past week, we have sought out to get the proof that was needed to prove that Zeek Rewards was not a Ponzi scheme and not an investment but rather a legal viable business that was thriving and paying out its affiliates daily profit sharing from the proceeds from the Zeekler auctions and Free Store Club and not that of the proceeds from purchasing of sample VIP bids by its affiliates. We now have the proof that we need to defend Zeek Rewards against the protective order by the SEC that froze the assets of Rex Venture Group, LLC. and to bring this proof before the courts to defend Zeek Rewards and all of our independent businesses as per our legal rights of due process.

    • profile image

      mac 4 years ago

      Thanks Kasey, I'm still reading your blog. I'm at "5 weeks ago" :)~

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      @Mac, see my own comment from about 2 days ago. Dave Kettner is a serial MLMer who belonged to at least one prior scam (and Zeek), and now he's backing a Rex Venture Group Consultant, Craddock, trying to restart Zeek, and they want YOUR money to do it. This stinks to high heaven. I consider this a "reload scam" and thus I am denying your comment.

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      kschang 4 years ago from San Francisco, CA, USA

      @Jaime Ramon -- it was the Feds that closed Zeek, not the state. Thus, your petition is going to achieve nothing. Furthermore, it will end up on spam lists as it proves anyone who signed it is gullible to support a scam already shut down by the government. Thus, I have to deny your comment.

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      Makkelijkgeld 4 years ago

      Zeek going to Europe?? same drama will take place...

      MLM Watchdog.com):

      Here is that message: ”This is to Inform you all that since we have to stop the Business for few Legal Issues in NC, We have paid the Fines and Penalties and We are shutting down Business for a few days and shifting our Main Office to Europe, since the Law is different there so we can resume our business from there, just keep Patience We’ll come back in the Business, Meanwhile we are launching another company (to keep your Passive Income) under Rex Venture Inc. You’ll be updated About it later Keep sharing the Blog we need your Help keep your Down lines Calm.”

      If rumor is true:

      1. Not a good idea. European regulators will not welcome a company that has been busted by the U.S. Securities Exchange Commission (SEC).

      2. Where is the money coming from? The SEC has first grabs on the $225 million which the SEC is freezing to give to the court appointed receiver for refunds. If the new company has no money, how are you going to get your money back?

      3. The SEC will be very upset about this and can declare any fund transfers between you and new Zeek illegal. You sure do not want to get your name or bank # on any list transferring illegal funds!

      4. Stay clear!

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      Richard Lehman 4 years ago

      Excellent write up kschang. If you know of any person(s) that needs information or help on recovering from their losses due to this theft, please refer them to my site, www.ponzischemetaxloss.com, as you see fit. There is also a webinar that provides very good information on saving taxes from Ponzi Scheme tax losses.

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      NEWSFLASH: Apparently the person who sent a takedown notice trying to knock this hub offline (so they can hide the truth about this Ponzi scheme) isn't done. I've got news that he started a website claiming SEC's action (signed off by a judge and all that) is illegal and is seeking donations. And he has help from various affiliates who had been defending Zeek as of 2 weeks ago.

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      NEWSFLASH: video surfaced (apparently a real one this time) where Paul Burks admits on audio (and video?) that he had been running a Ponzi scheme, and got a lawyer to sign off on it.

      http://behindmlm.com/companies/zeek-rewards/ceo-pa...

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      Observers 4 years ago

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      NEWSFLASH: Lexington Attorney established its own recruiting website for people to join in their lawsuit seeking class action status.

      For fairness' sake, he will NOT be linked, but his name is J. Calvin Cunningham.

      P.S. And Mr. Cunningham, spell Zeek correctly, please.

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      Unverified and all that, guess it ain't so "private", eh? After that Reddit hoax, I personally rate that reliability as low. We shall see. :)

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      rsblue21 4 years ago

      check out this messaging on facebook between Zeek schemers. Tim Silva was one the of the people who threw people off the Zeek Fb site for asking too many questions. "Tim Silvaposted toAlex de Brantes

      Yesterday

      Alex I just want to send this private message to you and Dawn. I DO NOT BELIEVE that YOU DAWN and Paul were trying to do ANYTHING WRONG in ANY WAY. I also hope that even though ZEEK will not reopen I hope that ALL of your names are cleared from ANY wrong doing.I met you I talked with you and what I saw were VERY GENUINE and REAL people. I believe If Paul would have fought he would have won. But the out come would still be the same.ZEEK would still be closed. The SEC and AG are FULLY IN THE WRONG. So with that being said I wish you and DAWN the best. And maybe some day we can meet again. I wish the both of you a happy marriage and a good life... "

    • kschang profile image
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      kschang 4 years ago from San Francisco, CA, USA

      NEWSFLASH: Alex deBrantes, fiancee of Dawn Wright-Olivares, and chief Internet marketer of Zeek, apparently still has his Facebook account active.

    • kschang profile image
      Author

      kschang 5 years ago from San Francisco, CA, USA

      NEWSFLASH: The "confession" on Reddit is probably a hoax.

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      ks4free 5 years ago

      it is too late! kschang, i had put 2,000 into zeekrewards before i found your blog. Thanks to the action of the SEC, if SEC did not take any action, i am afraid i would invest more money in this ponzi scheme and lose more! hope I could get back some money.

    • kschang profile image
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      kschang 5 years ago from San Francisco, CA, USA

      NEWSFLASH: Affiliates are trying to cancel any checks sent to Zeek but not yet cashed, dating almost to mid July. However, banks are NOT allowing such stop payments, due to multiple legal reasons.

      http://www.the-dispatch.com/article/20120821/NEWS/...

    • kschang profile image
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      kschang 5 years ago from San Francisco, CA, USA

      zeekrewardsreceivership.com is now up and running, but no new info is available.

      This is confirmed to be the real website, do NOT accept imitations.

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      DMartelonline 5 years ago

      Congratulations for calling this idiot out for who he really is! Nice job as usual.

    • kschang profile image
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      kschang 5 years ago from San Francisco, CA, USA

      Warning from North Carolina Attorney General: all victims of Zeek should watch out for "reload scams" targeting them!

      ----

      WATCH OUT FOR "RELOAD" SCAMS

      Monday, August 20, 2012

      Reload scams hit consumers when they’re down, offering to help them make back money they lost to a previous scam or bad business decision. These scams have been popular for years with telemarketing fraud rings but can also follow other types of fraud.

      We’re now seeing reload scams seeking to recruit consumers who were members of Zeekler, a penny auction website headquartered in North Carolina that shut its doors last week and entered into a settlement with the U.S. Securities and Exchange Commission. The SEC determined that Zeekler was a Ponzi scheme, using money from later investors to pay back earlier investors until the scheme started running out of money. The Attorney General’s Office is continuing to investigate Zeekler.

      Blogs, news releases online, and individuals leaving comments in articles about the Zeekler shut down are already touting opportunities “for those that are looking for something that can help them replace the income they were receiving from Zeek Rewards.” If you’ve been a part of a scheme such as Zeekler that collapsed, or if you lost money to another recent scam, don’t fall for a reload scam. Better to cut your losses than lose even more.

      ----

      http://www.ncdoj.gov/News-and-Alerts/Alerts/Watch-

    • kschang profile image
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      kschang 5 years ago from San Francisco, CA, USA

      @Nate -- NO RECRUITING! I don't care for which company!

      @Observers -- the comments and the reply are still there. I also have it archived on my blog, and so did RealScam.

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      Observers 5 years ago

      The Reddit post has been removed.

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      Jimmy 5 years ago

      If I were kimmzeek, I would have recorded some of those conversations with Dawn.

      There was mention that the SEC had asked Zeek for some information as of Feb 2012. I haven't made a big mention of it on the other sites as I'm trying to verify that data. If that were true, combined with Darryl Douglas's strange "leave of absence" and Dawn dropping off the map as the CMO (wouldn't the CMO be front and center to the public?), there could be something there with the timeline.

      My insider source, who was a peon so doesn't have any smoking gun data but can help corroborate some odds and ends, said there were major banking issues due to the large payments. The payments allegedly hit authorities radar because they were over 10k from the eWallets which the authorities were already watching. Zeek had banking issues because the banks were getting question from the authorities on large checks being deposited into personal accounts (Zeek should have made a rule and said only business accounts could receive more than 10k per check) and that was the impetus that triggered the banks to shut them off. So Zeek had no choice but to go "100% paperless" with the eWallets but they were already being watched for large deposits into US bank accounts.

      That's the story I heard about the finance issues, but am not sure how reliable it is as my source didn't have specific details, just 'water cooler talk.'

      But if the issues were close to being true, the tip-off to them could have been the immense banking problem + the SEC questions in Feb + NC AG CID in July.

    • kschang profile image
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      kschang 5 years ago from San Francisco, CA, USA

      FOLKS: DO NOT put down an URL or name ANY company for recruitment. I WILL BAN THE COMMENT!

      It is UNETHICAL to recruit a victim in their weakened state of mind. And yes, there are several that tried to post such comments already. I thought it was obvious from my tone in the hub itself. I was apparently wrong, or I am dealing with clueless and/or ignorant people, so here's the EXPLICIT WARNING:

      DO NOT POST ANY link to ANY OTHER schemes, opportunities, or WHATEVER, or even MENTION any other MLM or such that is recruiting, or your comment WILL BE BANNED as SPAM.

      @Dr.Kristi -- they are 95% identical to Zeek, and is headed by a guy who was head of scam called PlexPay. Go check behindmlm for Oz's review.

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      Drkristi 5 years ago

      I'm just now reading your blog again. Unfortunately, you were right about Zeek! It's really sad. There are 1000's of people in Lexington and in NC that are shocked! Just curious, what do you think of Bidify??? Lol

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      Jimmy 5 years ago

      @kschang - you should email the "consultant" and see if he's interested in sharing his insider story and you can publish it on your hub. Maybe he'll go turncoat on Zeek. It can't hurt. :)

    • kschang profile image
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      kschang 5 years ago from San Francisco, CA, USA

      @Manu -- you had one too many zeros on the last two examples. 5000 * 0.01 = 50, and 50000 * 0.01 = 500.

      The point is if you had a large balance in, it compounds a lot faster than a little amount compounding, esp. when you are compounding DAILY. And the point is about how they are basing their "return" or "profit share" on the amount of money you put in, not on the amount of work you do. Thus, work is a disguise, proving it's a Ponzi scheme.

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      Manu 5 years ago

      But third point is common in your statement.

      "People who put in a little money gains virtually nothing, people who put in a lot of money (and allow the money to compound for more than 90 days) gains LOTS of money"

      For example if I open an saving account with interest enabled if I put some money in my savings account I will get very little money from the interest and if I put lot of money I will get more money even the interest rate is same.

      Example

      1% of $500 = 5

      1% of $50000 = 50

      1% of $500000 = 500

      So I mean that does not look more like a problem but yes, remaining all are true... and especially Business Model does not makes sense if they are giving all for free.. then where all the money is coming from? Hence a Perfect Ponzi scheme.

      Correct me if I am wrong.

      Thanks

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      Jim 5 years ago

      I hope Burkes rots in prison, he has no clue the wrath of hell that is coming his way. The SEC is just toying with him to get him to cooperate to help retrieve funds and after the Gov't has no more use for his help other Gov't agencies, FBI, Secret Service, whomever will nail this thief and his minions to a cross. And I have a hard time believing Troy Dooley wasn't a paid shill, he as there to defend Burkes every step of the way, freaking crooks.

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      rwbadley 5 years ago

      Yes, kschang- I also located your site when approached by a Lady friend to join Zeekrewards. She (fortunately) only lost about $400, but it could have been much worse. She had just recieved a 35K inheritance and was tempted by her friend/upline to go 'all in' for the 10K in May. I convinced her not to, and said I would not join her due to doubts about the business model. I sent her links to this and another similar page. I suggested to her and her friend to not invest anything they couldn't afford to lose, and better not to at all. The siren call of free money is strong, and we all want to believe. Her friend now has his 10K tied up in recievership- money he didn't have to lose. A painful lesson. Thanks, kschang- very much appreciated

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      kschang 5 years ago from San Francisco, CA, USA

      NEWSFLASH: Federal Court appoints Ken Bell as receiver of all RVG assets. Process will take several months. Appointment order is here (thanks to Forbes report for the link)

      http://www.ponzitracker.com/storage/order.pdf

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      Observers 5 years ago

      @ksChang - I join everyone else here giving kudos to you and thank you for publishing your analysis of Zeek - a friend approached me in March to join, then several months later so I proceeded to do my due diligence. I found a lot of negative reviews. Yours is the most intelligent analysis with the best questions. I do hope you write a book. It can be used as a tool directed to people considering getting into MLM, Network Marketing, Biz Ops, etc. If I were inclined to be in this genre of business I would hand your book out to anyone interested in joining my team. An informed person is a powerful person. Thank you for taking an interest in this subject. . .you have done much good. . .