Filing period ends for victims in Ponzi scheme

Sep. 06, 2013 @ 05:25 PM

More than 170,000 victims of the Zeek Rewards pyramid scheme have filed restitution claims, but it's not clear how much they will get or when they will be paid.

The High Point Enterprise reports the receiver overseeing the fallout from the scheme provided an update Friday, prompted by the end of the period for victims to submit claims to U.S. District Court for western North Carolina.

Charlotte attorney Kenneth Bell said 173,782 individual claims were filed for more than $550 million. Bell previously said he's secured more than $300 million in assets from Zeek Rewards.

When the U.S. Securities and Exchange Commission seized the assets of Zeek Rewards and its parent company in August 2012, it termed Zeek Rewards a $600 million Ponzi scheme on the verge of collapse.

Bell said the final tally of claims and money sought by victims could change as the claims are audited.

"We will provide updated data regarding the claims submitted and the claims process in the receiver's status report for the third quarter of 2013. That status report is due on Oct. 30," Bell reports.

Bell said he can't provide a time when victims will receive their first reimbursement.

"It is still my intention to make an interim distribution to claimants who hold allowed claims as soon as possible. The amount available for distribution, the timing of the distribution, the distribution reserves and the method of distribution all must be approved by the court," Bell said, adding that he continues to seek money from people who made money from Zeek Rewards, arguing that those gains should be paid to victims.