Tag Archives: Dawn Wright-Olivares

A Closer Look at Zeek Rewards

Ever heard of Zeek Rewards? A closer look at this ‘flourishing’ company may be a good cautionary lesson, especially when you’re looking for investment opportunities.

    On the surface, it seemed unimpressive: a small, rather dusty office with “Zeekler.com” painted on the window. Its founder, Paul Burks, gave magic shows for nursing homes. He participated in a number of MLM (multi-level marketing) companies, but didn’t do that well.

     Enter Zeek Rewards, founded in 2011 as a “private, invitation-only, affiliate advertising division” of the penny auction site Zeekler.com. Affiliates who joined purchased a monthly subscription for $10, $50 or $99 monthly, as well as ast 10, but no more than 10,000 “VIP penny bids.” The latter cost $1 each.

     Ostensibly those penny bids could be used to purchase merchandise on Zeekler.com’s auction site. But — if the affiliates didn’t spend those bids, but gave them away to new affiliates they had recruited instead, then they would earn “Profit Points” that could be used to snag up to 50 percent of the company’s daily net profits.

     Would you spend your penny bids, in that situation? No… and many people didn’t. The SEC estimates that out of about 10 billion VIP bids purchase, less than one-quarter of a percent were ever redeemed. The merchandise offered on the penny auction site, however, made the program legal — o so it seemed.

     The program was wildly successful. Early investors in the program made a lot of money — fast. I know this from firsthand experience: a cousin made more than $30,000 in just the first year alone. On paper, that isthere were strict requirements for cashing in the mounting profits. Checks could only be requested after months of waiting. Meanwhile, you were expected to recruit your friends and neighbors to join in this wonderful program.

     Millions did.

     It’s estimated that at least one million people all over the world became Zeek Rewards affiliates, and the figure’s thought to be closer to two million. (Kenneth Bell believes that at least 700,000 people joined. Zeekler.com isn’t saying anymore.) And those daily net profits that were rolling in? Investors assumed they were coming from auctions on Zeekler.com. In reality, they were being funded by new people joining the program.

      Paul Burks and several of his fellow Zeek officers, including Dawn Wright-Olivares, his head marketing director, and her son, were the biggest “net winners:” it’s believed that they each cleared at least a million in profits. (Cold, hard cash, that is.) Burks took at least $10 million. And that worked fine — as long as new people were joining.

     The problem: in spite of company reassurances (and continuing marketing presentations) that all was well, Zeekler.com didn’t seem to be doing that many auctions. Not only that — daily returns were starting to run a little thin. No worries, company officials soothed. Those overdue profits would be returned to investors the first part of September 2012.

     The whole thing caved in August 2012. The SEC finally came to a conclusion that it was indeed a Ponzi scheme(i.e., an investment program not based on profits, but money put in by investors), and shut it down. (Paperwork suggests that the company was close to imploding at this point, anyway.) Then $700 million dollars invested in Zeek Rewards magically disappeared, leaving frustrated investors in its wake. Some had put in their entire life savings. (My cousin, who had initially made some money, lost the rest. Her brothers and sisters, recruited to join this wonderful new program, lost everything.)

     Now, more than a year later, not a cent of Zeekler.com’s money has reappeared. The court-appointed receiver, Kenneth D. Bell, filed two “clawback” lawsuits in February of this year against company officers, as well as at least 9,000 investors who received at least $1,000 from the program before it collapsed.

     Although Zeek’s company officers claim they had no idea that Zeek Rewards wasn’t operating successfully, paperwork filed shows a different story — a careful spiderweb of words that suggested at least a 1.6 – 1.8% dailyreturn on money invested. (Complaints filed suggest that these figures were ‘picked out of the air’ by company insiders, rather than based on fact. One official even called the numbers “Monopoly money.”)

     Dawn Oliveras and her son recently pled guilty to criminal obstruction and income tax evasion. Oliveras got 20 years in prison for it, which she protested vigorously about. She was also required to refund all of her profits. Paul Burks, the founder, returned $4 million, and promised to cooperate with authorities. So far, neither he or the other Zeekler.com officers have been prosecuted.

     The schemes didn’t stop when Zeekler.com was shut down. Several of the “net winners” began websites to challenge the SEC and Receiver’s actions, collecting yet more money for a class action lawsuit. (Those websites, including their funds, have also now disappeared.)

     Nearly two years later, the judge in the case has indicated that they will approve a refund. Former Zeek Rewards investors will get 40% of their original funds — maybe. (There’s still a question of how much can be recovered before the lawyers and researchers skim off their share.)  “This lawsuit is one of several steps the receiver is taking in his continuing effort to force those who were responsible to repay the losses caused by their unlawful conduct,” Bell says in his legal action.

     Paul Burks has been largely quiet about the whole thing. But when contacted at his home, shortly after the SEC shut Zeekler.com down, Burks told the Associated Press he couldn’t discuss details because of lawsuits by disgruntled investors. “Everything will come out in time,” he said. “I never told anyone to invest more money than they could afford,” he said. “I didn’t tell them to do that. Never.”

     “It’s their fault. Not mine,” he snapped. “Don’t blame me.”

These aren’t the only bubbles that burst!