Home Companies Scam Alert It’s Official: SEC Shuts Down Zeek Rewards, CEO Paul Burks Fined $4...

It’s Official: SEC Shuts Down Zeek Rewards, CEO Paul Burks Fined $4 Million


Here is the press release directly from the SEC:

Washington, D.C., Aug. 17, 2012 – The Securities and Exchange Commission today announced fraud charges and an emergency asset freeze to halt a $600 million Ponzi scheme on the verge of collapse. The emergency action assures that victims can recoup more of their money and potentially avoid devastating losses.

The SEC alleges that online marketer Paul Burks of Lexington, N.C. and his company Rex Venture Group have raised money from more than one million Internet customers nationwide and overseas through the website ZeekRewards.com, which they began in January 2011.

According to the SEC’s complaint filed in federal court in Charlotte, N.C., customers were offered several ways to earn money through the ZeekRewards program, two of which involved purchasing securities in the form of investment contracts. These securities offerings were not registered with the SEC as required under the federal securities laws.

The SEC alleges that investors were collectively promised up to 50 percent of the company’s daily net profits through a profit sharing system in which they accumulate rewards points that they can use for cash payouts. However, the website fraudulently conveyed the false impression that the company was extremely profitable when, in fact, the payouts to investors bore no relation to the company’s net profits. Most of ZeekRewards’ total revenues and the “net profits” paid to investors have been comprised of funds received from new investors in classic Ponzi scheme fashion.

“The obligations to investors drastically exceed the company’s cash on hand, which is why we need to step in quickly, salvage whatever funds remain and ensure an orderly and fair payout to investors,” said Stephen Cohen, an Associate Director in the SEC’s Division of Enforcement. “ZeekRewards misused the power of the Internet and lured investors by making them believe they were getting an opportunity to cash in on the next big thing. In reality, their cash was just going to the earlier investor.”

The SEC’s complaint alleges that the scheme is teetering on collapse with investor funds at risk of dissipation without its emergency enforcement action. Last month, ZeekRewards brought in approximately $162 million while total investor cash payouts were approximately $160 million. If customers continue to increasingly elect to receive cash payouts rather than reinvesting their money to reach higher levels of rewards points, ZeekRewards’ cash outflows would eventually exceed its total revenue.

Burks has agreed to settle the SEC’s charges against him without admitting or denying the allegations, and agreed to cooperate with a court-appointed receiver.

According to the SEC’s complaint, ZeekRewards has paid out nearly $375 million to investors to date and holds approximately $225 million in investor funds in 15 foreign and domestic financial institutions. Those funds will be frozen under the emergency asset freeze granted by the court at the SEC’s request. Meanwhile, Burks has personally siphoned several million dollars of investors’ funds while operating Rex Venture and ZeekRewards, and he distributed at least $1 million to family members. Burks has agreed to relinquish his interest in the company and its assets plus pay a $4 million penalty. Additionally, the court has appointed a receiver to collect, marshal, manage and distribute remaining assets for return to harmed investors.

The SEC’s investigation was conducted by Brian M. Privor and Alfred C. Tierney in the SEC’s Enforcement Division in Washington D.C. The SEC acknowledges the assistance of the Quebec Autorite des Marches Financiers and the Ontario Securities Commission.

Here is a copy of the SEC Complaint (Lawsuit) Against Zeek Rewards


  1. Once Paul Burks pays the 4 million dollars, how soon would the Zeek system be operational for all the registered affiliates? I think what I’m trying to ask is, ‘Would ZeekRewards be ever allowed to operate again, and how soon?’

  2. Apparently the firm never made legitimate profits that would support the level of payouts it was making?

    Why would it ever continue to operate with a losing system??

  3. Clinton, are you all right upstairs? It was a Ponzi scheme. I will tell you what give me $20,000 and i will give you 50,000 points and you keep sending me money and one day you will be rich. OK

  4. John, Zeek could not operate unless people put in more money, it would collapse….a tell-tale sign of a ponzi/pyramid scheme. It wasn’t about whether or not they had money to operate.

  5. Think about this if Paul Burks was really a con man why would he have hired the best lawyers, why would he have stayed in NC. Come on let’s get real people. This is not done until the investigation is over. We will see on the Monday call if it’s done or if we will be back in business. I know what the reports say and I also know what ratings or. So please for now until Monday night lets keep the faith and help how we can. Sign the petition at zrpetitiondotcom and get it out where ever you can. Thanks

  6. ATTENTION! Good News! Anyone that has purchased VIP BIDS from ZeekRewards in the past 30-45 days by money order (or) cashier check you may be in luck (Even if it showed Purchase Bids in your back office RPR). For the majority of Affiliates ZeekRewards has not officially proceeded them and you can call your finical institution or Money Gram and stop the transaction. SPREAD THE WORD!

  7. its over what sheep you sound like you got taken and you still think this will reopen..you wont get a dime back and if you do it will be 5 years from now… I lost $1000 that I put in 5 months ago,


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