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Banners Broker – Real Or Smoke And Mirrors

February 22, 2013 By Leave a Comment

First The Overview

Banners Broker is a program that launched the middle of November 2010.  At the time of its launch, it was billed as the first straight line cycler doubler, a new way to double your money. As with many of these programs, Banners Broker launched on the major Ponzi financial forums, many HYIP Monitor websites, blogs and the minor Ponzi financial forums.

It was posted by Banners Broker to confirm this was the “first” straight line cycler doubler as follows:

First, let’s clarify the claim:

“There are MANY Straightline Programs out there;
There are MANY Cyclers out there; and
There are MANY Doublers out there.

However there is NO OTHER PROGRAM that combines these three concepts together to deliver a powerful, sustaining, MEGA PROGRAM! In addition, the manner in which we seamlessly have these three popular trends working in unison is a work of art. In fact, if you can show us another program that is a Straightline Cycler Doubler will roll-up Panels, we will transfer $10,000 into your AlertPay Account! (We are expecting copy-cats, so any program you find must be operational prior to November 2010)

All Banners Broker marketers can feel proud repeating our claim; we are TRULY THE WORLD’S FIRST STRAIGHTLINE CYCLER DOUBLER! And Second to NONE.”

1. The office address for the headquarters of Banners Broker was initially:

Banners Broker Canada
100 King St W, Suite 5700
Toronto, ON – M5X 1B8
Phone: (702) 605-7410

This is a business executive suite with a central receptionist for multiple companies renting an executive office space.

2. Then it was changed to
1019 Nelson St., Unit 8
Oshawa, ON L1H 8A7

…which was an office above an auto repair/body shop.

3. Registration:

Banners Broker International was registered in Belize initially, and then was changed to the Isle of Man in August of 2012.

May 2011 – Banners Broker tries to recover from their failed marketing efforts

In May of 2011, to help gin up support for Banners Broker, they made a major pitch on all their forums, blogs and other advertising outlets to obtain more members.  It was obvious their previous marketing efforts had fallen way short of expectations.

This was their new marketing campaign (and I did not change anything from their announcement):

“We have Launched the Banners Broker Doubler more than 6 months! Many have already doubled their money.  Promote any program you wish, and we blast out your affiliate link. 

What is Banners Broker all about?  Did you guess that it has something to do with Banners? Well you are right! Banners Broker is a marketplace to BUY and SELL Banner Ad Impressions.

When you BUY a Banner Ad Panel Package, you get to paste your Banner Link to ANY program you are promoting! Are you in a Travel Program? Health and Wellness? Discount Savings? Has the company provided you with Banners to promote with but you are not sure what to do with them? Well think no more… all you need to do is paste your Banner Link into our backoffice and we will virally blast your link over the Internet.   

You can promote up to 10 different Banners. If you don’t have Banner Links, then just simply add the text link with a caption.  You are buying impressions, so whether you are promoting 1 program or 10, it doesn’t matter. They all go towards your impression count. (“Impressions” means the number of times your banner is displayed on unique viewers’ computers. When Joe sees your banner, that is 1 impression, when Sally sees your banner, that is a second impression, and so on).  

The Compensation Plan!

Simply put that you can and will double any amount you paid for your Banner Ad Panel Package, there is a small requirement to double your money which is to generate two sales which is equivalent to 2 referrals but if you want you can Test the Waters; and they will allow you to double your money Twice without having to get any referrals or sales.  You can double your money Twice without having to Refer anyone or make any else. 

There are 6 different entry packages as shown below: 

*Time Frame for Cycle Doubling: 

Yellow Panel 7-10 days. 

Purple panel 14-18 days 

Blue panel 30-35 days   

Green panel 60-70 days   

Black panel takes about six months for 1 double. 

* These are Approximation to the time it would take to complete a cycle. It can take less or longer.” 

Banners Broker Fails Again

The growth rate for Banners Broker was very dismal for 2011. Towards the end of 2011, there were payment processing issues, system issues that caused a lot of consternation with its affiliates as to its sustainability and viability as a real business.  They continued to limp through the first few months of 2012, and then they decided they needed to revise what Banners Broker really was all about as a business model.

In May of 2012, Banners Broker re-defined their Straight Line Cycler Doubler and how Banners Broker worked as follows:

“Banners Broker (hereafter referred to as BB) buys ad space from ad networks with the understanding that they’re going to package that ad space up and resell it to their network of affiliates. These packages contain panels, each panel has a certain value and each has a specific time period it will take for that panel to mature, some as little as 2-3 weeks and some take 5-6 months or more. Each panel also requires a specific amount of traffic to mature. Each panel also has 2 values, what BB paid for it and what it’s charging the affiliate for it.

As BB sells the panels through their packages, they require traffic for these panels to generate revenue, which BB purchases in order to service the traffic needs of the panels. In return for purchasing the panels, BB pays a dividend to the affiliate once the panel matures, however, that panel is generating live revenue as the panel is running from the ad network. So BB is generating revenue from the sale of packages to affiliates, as well as from the ad network for serving ads. The ads appear on the ad space BB has purchased from the Broker in the blind network, as well as on publisher sites BB has attracted. Whether BB has 1 site, 100 sites or 100,000 sites in their network , they’ve already purchased ad space through their affiliation with the ad network, and that ad space rests on sites within the ad blind etwork. So no matter what, there’s advertising that will satisfy the panel needs. Since BB is paid every 2 weeks from the ad networks they do business with, and the panels mature at staggered intervals, BB is constantly serving ads and generating income. Now, it’s understood no business will pay on its products what it gets paid to sell them, so BB reduces the amount it’s paid by the ad networks for that advertising so it can afford to pay its affiliates and generate a profit.

Now since it takes traffic to generate ad revenue, BB purchases bulk traffic from the ad networks as well, which generate upwards of 3 Billion impressions per day. Again, since no company will sell a product for what it pays, it marks up the cost of the traffic to resell to the affiliate, the difference of course is profit for BB, and as BB owns the space and ads keep running, this revenue flows to BB. As it takes impressions to activate panels, and impressions for panels to mature, those impressions or traffic must be purchased up front. Now, an affiliate isn’t required to use all their traffic up front, but they must purchase it up front, like a variety store can’t buy individual cans of soda, it must buy cases. Since the purchased traffic represents a specific amount, and since each panel requires a different amount to activate, traffic purchases are constantly being made, and since BB only pays for what it uses, there’s always going to be a surplus, which represents profit for BB.

BB generates revenue from the banners placed in the space it purchases, and through the amount of time it takes for the panels (which is a virtual representation of an ad space BB purchased in the blind ad network) to mature, it generates revenue from the sale of traffic that it takes to activate those panels, and since it only pays for the traffic it actually uses, that’s where the revenue BB generates comes from. Since it pays less to the affiliate than what it earns from the ads, and (to use an analogy) it pays on the cans of soda used not the cases bought, there’s a surplus of revenue that represents profit that it can now turn around and pay its affiliates with while maintaining profitable growth.

Any advertising generated either through the site or through affiliates is passed through to the ad networks, BB takes a commission on that sale, and passes 10% to the affiliate for bringing in the business. When it comes to publishers (people looking to monetize their websites with ad revenue), those sites are added to the BB internal or “choice” network, and leveraged with the ad blind network to get better pricing deals. The affiliate is paid 10% of the revenue generated by the ads revenue to the publisher with BB and the publisher splitting the balance.”

Please note the major changes from when this first launched back in November of 2010 to what Banners Broker now is claiming they were all about in May of 2012.

I mentioned that Banners Broker had limped along from its inception in November of 2010 until the middle part of 2012.  We know this as it was announced on the blogspot that Banners Broker only had 50,000 affiliates at the end of May 2012.

In the middle of July 2012, came this bombshell announcement from Banners Broker:

“IMPORTANT INFORMATION 

Dear BB Affiliates, 

There comes a time in business where difficult decisions have to be made for the betterment and longevity of the organization. Kuldip Josun, our VP of Corporate Sales has been relieved of his duties and is no longer affiliated with Banners Broker or any Banners Broker partner companies. It has become apparent that the direction Mr. Josun wanted to proceed with is not the same vision of Banners Broker. Banners Broker is an online advertising company and will grow in the direction of providing online sales and marketing tools. 

We wish Mr. Josun the best of luck in his future endeavours.   

To address some important points, first and foremost, it is business as usual for all Affiliates, Leaders, Resellers and Independent Contractors.  Chris Smith is the sole owner of Banners Broker International since inception and is the sole signing officer for the Banners Broker International bank accounts.  As we continue to grow, Rajiv Dixit will be handling corporate sales for the interim, and we will be hiring a new on-the-road sales and presentation specialist for long term. Due to a breach of contract, Mr. John Rock is no longer assisting Banners Broker Canada with compliance and is no longer affiliated with Banners Broker or any Banners Broker partner. All decisions that have been made are final. 

We are extremely excited about the 2nd convention on Sunday, July 15th and we are expecting a huge crowd. This convention will be bigger and better than the first. Looking forward to seeing all of you there! 

Sincerely, 

Chris Smith, CEO Banners Broker International”   

Now what made this news even more newsworthy was Mr. Josun was listed initially as one of the owners of Banners Broker.

Banners Broker Secures A MasterCard. Affiliates Get Scolded.

In mid-July, Banners Broker announced they had secured a MasterCard that was issued through Vector Services. The purpose of the card was to offer another method of payment to pay their affiliates which would be faster than using the payment processors.  With this news, many of the affiliates began touting the fact that if Banners Broker had a MasterCard that meant that Banners Broker was being endorsed by MasterCard proving its legitimacy. This was to counter the growing voices claiming that Banners Broker was a Ponzi. It seems MasterCard did not appreciate this claim and this lead Banners Broker to release this announcement:

“TO: All Valued Banners Broker Affiliates 

October 1, 2012 

RE: Non Compliant Website & Marketing Verbiage 

URGENT NOTICE 

Hello all, 

We need your help and attention to this matter immediately.  Recently we have been informed by Vector Card Services, the providers of our Prepaid MasterCard, that there are numerous websites that have been promoting the Banners Broker program and its unique Prepaid MasterCard with verbiage and images that have not been approved by either MasterCard, Choice Bank Limited or Vector Card Services. 

We have been officially warned by MasterCard International and sanctions against our program may be imposed if our affiliates do not remove all unauthorised verbiage of the Prepaid MasterCard card. 

We take the promotion and marketing of our program very seriously and require every affiliate to adhere to our polices and guidelines. Communication and promotion of our products, services, and program needs to be reviewed by the Banners Broker corporate office before posting live. 

Our web compliance team actively scours websites for compliance adherence and we will immediately suspend your membership and all payments; until these impacted websites are removed or approved. 

Please help us by removing all mention of the Prepaid MasterCard program from your website until you have submitted it for approval. It’s a simple process, please send to Banners Broker’s corporate office (or your regional leader) the layout of any websites, marketing campaigns and/or brochures that you wish to utilise for the promotion of the program. We will endeavour to have these documents approved by MasterCard as quickly as possible. You can then officially post these documents back to your website. 

If you are not sure whether your website is compliant, please follow the same procedures to get it approved officially by MasterCard and Choice Bank Limited. Vector Card Services has committed to the quickest turn around for these approvals to reduce the impact to your business.

Your attention to this matter is urgent and vital to the success of our program.

Regards,

BannersBroker”

July 31, 2012. BannersBroker Limited Shuts Down

On July 31, Banners Broker announced that Bannersbroker Limited had shut down operations as a Reseller for Banners Broker International.  They also announced:

“Stellar Point Inc has been contracted to handle the support for Canada and Internationally. We welcome them aboard as our new Canadian Partner. All support services will remain unchanged.”

Banners Broker using its new definition of what kind of business Banners Broker was and how it worked soon ran into more payment issues.  In mid-September they also announced that any affiliate saying anything negative about Banners Broker would have their accounts closed and they would not get their money back.

In October 2012, Banners Broker announced a new comp plan with their release of BB version 2.6. Here is their announcement:

BB version 2.6:

“1) Traffic pack qualified panels will give 1/2 sales credit to inviter upon completion rather than full credit.

This means that anyone you have introduced who qualifies their panels using traffic packs you as the inviter, will only get half the sales credit. This is to encourage people to work with their teams to help them build their business and even help them with referring people

Currently if someone qualifies for example a yellow panel using their traffic pack you as the inviter get 2500 in credits. After upgrade to BB version 2.6 you will get 1250 (half)

In the future BB are bringing out an additional way to qualify panels alongside TPs

2) Traffic pack subscriptions will be automated

75% of your highest months TP purchases will be your monthly commitment

3) Auto admin fee charging – they have noticed that this has not been working correctly and they will be bringing it up to date The admin fees will be taken on the same date that you activated your package.

For brand new people joining if they activate their pack for example on the 15th September, there subscription will be taken on the 15th of October

4) Security layer – transaction pins and locked pages etc will be put in place

5) Automatic rollup Details are for Version 2.6 only. This will change in BBv3 it will be a bit different but for now it is as follows

If you have 10 or more unqualified panels of same colour dated older than 8 days, the system

Will automatically find them and roll them up when you visit the view panels page.

The panels need to be at least 8 days old for the auto-roll up to happen.

Example: if you have 100 unqualified yellow panels and you go to the view panels page It will automatically roll-up three yellow panels to one purple (if older than 8 days)

This will then leave you 97 yellow panels, if you then go to another page and come back to the yellow view panels page It will roll-up another 3 yellow panels to 1 purple

To avoid roll-up, DO NOT visit the view panel page.

Automatic rollup, will not roll-up panels that have already been rolled up from a lower colour

So if you have rolled 9 yellows to create 3 rolled up purples, the system will not roll those three purples to blue

Why 10 panels? next version BBv3 will have countdown timer and things will be slightly different and roll up will happen when you have 6 unqualified panels. This current version will roll up 3 out of 10″

Banners Broker Helps Themselves, Not The Affiliates

So basically they cut the earnings in half, which only benefited Banners Broker, not the affiliates. It also did not help their payment issues.  These continued up through the end of the year, but all was promised to be fixed with the release of their next new software come the first of the year.  Not only did they have payment issues, but the rotation of the panels had slowed to a crawl. If the panels do not cycle, the affiliates were not making money. They also made a lot of promises they did not keep and set deadlines to “fix” the payment and panel cycling that were not met. All of this adding to the confusion as to what was going on with Banners Broker.

Payment Problems Continue

They kept promising that the payment issues were being worked on and would soon be caught up. They made a big announcement that all affiliates who had submitted a withdrawal request by December 5th, would be paid by December 20th.

They also announced that Friday December 21st 4PM EST would be the last day the offices would be open and that they would reopen January 2nd. Support ticketing system would be offline during this time.

They claimed that the site would be monitored every day and that IT would be on top of things – and that if there were an issue with the site, they would still be here and this will be resolved.  They said that Banners Broker started 2012 with 1,000 members and had grown to 250,000+ members by the end of 2012.

Banners Broker Releases Another Bombshell In Their Last Update Of 2012

Another bombshell of a statement was also made in their last update of 2012, and it was this:

Banners Broker announced that Ian Driscoll’s UK’s independent contract had not been renewed, but the UK would have a new office in January located in Manchester. Now what was stunning about this announcement is that Ian Driscoll was touted as one of Banner Broker’s millionaires.  While they claimed there was nothing to be concerned about with this announcement, it still sent shockwaves through the Banners Broker affiliates.

Banners Broker’s Goa, Indian Office Gets Raided By The Authorities At The End Of Decemeber, 2012

But that was not the end of Banners Broker unsettling news for 2012. At the end of December it was announced that their Goa, India office had been raided by the authorities and the person in charge had been arrested and had charges filed against her. These charges still have not been resolved, and no word on a court date.

This is the end of the “overview” of Banners Broker, and next will be an in-depth review of Banners Broker, their claims of their business model and why it does not stand up to critical analysis.

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The Rise And Fall Of Zeek Rewards

September 15, 2012 By Leave a Comment

PAUL BURKS – BEFORE ZEEK

To understand Zeek Rewards/Zeekler, we need to go back to the beginning of its founder Paul Burks, and the companies he started prior to forming Zeek Rewards/Zeekler.

Early Paul Burks Companies (see story for details)
January 1991 – Burks founds Ages, Inc.
June, 1997 – Burks founds Signed and Numbered International, Inc.
2003 – Ages, Inc. is suspended by Secretary of State
May, 2005 – Signed and Numbered International, Inc. is dissolved
Lighthouse America announced in YouTube video

In January 1991, Burks founded Ages, Inc., which was described as an “Advertising Media” company, according to state records. Burks was the only employee listed on an annual report filed with the N.C. Secretary of State in 1991, and the business’ address was a residential home on Maegeo Drive. The entity was suspended by the secretary of state in 2003 after failing to comply with reporting requirements.

In June 1997, Burks founded Signed and Numbered International Inc., which was described as a general wholesale and miscellaneous retail company. Burks was the only employee listed on an annual report filed in 1998, and the business’ address was listed as a residential home on Fairview Drive. The company was dissolved in May 2005 after failing to report to the secretary of state.

Burks said Lighthouse America replaced Signed and Numbered International, Inc. in a YouTube video, describing the business as a telephone calling card business.  Lighthouse America, which has a sign in front of Burks’ property at 121 W. Center St. Ext., was not registered with the North Carolina or Nevada Secretary of State.

THE BIRTH OF REX VENTURE GROUP

Paul Burks Founded Rex Venture Group
January 2003 – Burks founds Rex Venture Group

In January 2003, Burks founded Rex Venture Group, a limited liability company. While Rex Venture Group’s headquarters is at 803 W. Center St. in Lexington, North Carolina the business’ principal office is listed in Las Vegas, Nev., according to Nevada state records. In North Carolina, Rex Venture Group also has an office listed at 121 W. Center St. Ext., according to North Carolina state records. The company was issued a “certificate of existence with status in good standing” from the state of Nevada in November 2011.

Burks launched multiple programs before the inception of Zeek Rewards and Zeekler.com, including an email service called New Net Mail and an online business store company called Free Store Club. In the YouTube video, Burks said Free Store Club was very successful, adding that it had a user base of more than three million people around the world.

THE BIRTH OF ZEEK?

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 sometime after that it acquired or merged with MyBidShack. For a while both were operating 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) were merged again with a new affiliate plan and re-launched as merely Zeekler. MyBidShack remained active but it was a portal into Zeekler.

If you search MyBidShack’s current whois record you’ll see its registrant is indeed Zeekler, handled by Paul Burks, and shares same address as Zeekler/ZeekRewards. MyBidShack was owned in early 2011 by Darryl Douglas, who became one of the top three at Zeekler.

Early Red Flags (see story for details)
Rex Venture Group/Zeekler operated for almost TWO full years without obtaining the proper auction license.

To conduct auctions, one must have a license. North Carolina Auctioneer Board confirms that Rex Venture Group holds Auction Firm license #9401, issued in March 2012.  This means that Rex Venture Group/Zeekler operated for almost TWO full years without obtaining the proper auction license.  Zeek Rewards/Zeekler is a subsidiary of Rex Venture Group.

ZEEK REWARDS – EARLY RED FLAGS

Early Red Flags (see story for details)
Zeek Rewards offers 125% ROI when launched.
125% ROI is cloned from ASD Cash Generator (shut down in 2008)
Zeek Affiliates use term “Investing”

When Zeek Rewards was launched, it was offering a 125% (ROI) rate on investment to all affiliates.  This was a carbon copy of what ASD Cash Generator offered to its members before it was shut down by the Secret Service on August 1, 2008.  Many of the top players of ASD became part of Zeek Rewards. Thus what we believed to be the influence for the 125% rate of return to its affiliates.

With all the major players from ASD on board, Zeek soon began to explode in growth.  They continued this 125% ROI comp plan up until the end of 2011 when they were told this would get them in trouble with the federal authorities.  Zeek then hired Gerald Nehra as their legal advisor, and Keith Laggos as a MLM consultant to get them in compliance.  In early 2012, more legal advisors were added to strengthen their desire to become “legitimate” in the eyes of the federal regulators.  All of a sudden affiliates were warned they could not use the term investing when promoting Zeek Rewards/Zeekler, as this would get them in trouble with the federal  regulators.  This is when Zeek introduced their point program replacing the 125% ROI comp plan.  But the affiliates did not listen and YouTube video’s were everywhere touting Zeek as an investment opportunity and passive income.

REX WORLDWIDE – Donations Done Wrong
Rex Venture Group set up a charity program for Zeek affiliates to be able to help other charities.  It was called REX WORLDWIDE.  The problem was to fund the charity Rex Venture Group paid commissions on gift certificates to help these charities. This method of donating is illegal in almost every state in the US.  But another issue was the charity was registered in Switzerland and operated out of the Philippines.

ZeekRewards is the “rewards program” for Zeekler, a “penny auction” website where bidders purchase bids, to be spent on items.  People would pay for bids for various items up for bidding, using one bid at a time. The last person to get the bid in “wins” the item. Then they could pay for the item, or choose to “cash out” the item and receive the difference between the MSRP and the “bid price.”

In ZeekRewards, to “share” in the profit pool, you needed to give away at least 10 bids (you had to buy them first), and post an ad every 24 hours, and you needed to be a paying affiliate as well. Prior to a major change in April 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.  For every bid you bought and gave away, you earned one “VIP ProfitPoint” in your pool. At the end of every day, ZeekRewards would declare a daily profit share, which averaged about 1.4%.

I am not going to go into all the different ways Zeek claimed you could earn from being an affiliate, because the penny auction was the key to Zeek.  This is where they claimed all income to pay the affiliates came from, and Zeek was allowing you to share in this profit pool.  Zeek kept 50% and they paid out 50% to the affiliates from this daily profit.

MORE RED FLAGS EMERGE AS ZEEK CONTINUES TO GROW

New Problems Emerge For Zeek
- Processing problems
- Payment problems
- People complain of not receiving auction items
- Paul Burks terminates affiliates for reasons that don’t add up
- Zeek warns that checks might not be honored by banks
- Zeek starts using E-Wallet. Uses foreign banks to process payments

As hard as they tried to change their business model, other issues started cropping up that caused major problems for Zeek Rewards.  They had processing problems, they had payment problems, and people complaining they were not receiving the items they won in the penny auction. As their problems mounted their growth continued almost unabated despite these problems.

Suddenly Paul Burks announced that Zeek had terminated affiliates from six foreign countries claiming that these six countries were on the OFAC restricted list for American companies to do business. The only problem was according to OFAC, they did not have any sanctions against them and were not banned by American companies to do business with them. No further explanation was given by Paul or Zeek as to what really happened with the affiliates from these six countries.

Then at the end of May Zeek suddenly announced they had to switch from their two local banks as they were no longer capable of handling their tremendous growth.   But the problem was this announcement came over the Memorial Day weekend.  To further compound the problem, they told the affiliates they had only until June 1 to have the checks they were sent cleared or they would not be honored by the banks. They would need to have new checks issued if they did not clear by June 1.  In many instances this only gave the affiliates 2 days for their checks to clear, which was impossible to accomplish as most checks take up to 10 days to clear.  We are not talking about funds being made available in the account to use, but cleared through the ACH system.

But this sudden change also caused even more problems, as they would not reveal who the new bank Zeek was using to process their business.  Instead they announced an E-Wallet program that all payments and deposits had to be used by the affiliates. All of a sudden people were finding that their credit card payments were being processed from South Korea, Russia, China, Panama, Malta, Cypress and possibly several other countries causing even more confusion among the affiliates.  Rather odd that a mega-million dollar debt-free company as Zeek claimed could not maintain its own merchant account with banks in the U.S., but had to use foreign banks to process its credit card transactions.  When inquiries were made, Zeek refused to comment.

Just as they were recovering from all these problems, new problems struck Zeek.  In June, a TV station ran a story about Zeek and said the North Carolina Attorney General had said that Zeek was legal.  This prompted the North Carolina Attorney General to hold a press conference saying they had not said Zeek was legal, and contacted the TV station to issue a corrected report. Of course all the Zeeksters had run to promote that the North Carolina Attorney General had reviewed Zeek and said it was legal ignoring the station had to retract the story and had took their story down.  Zeek managed to make it through most of the month of July without any more major problems hitting them, but it was to be short-lived.

THE BEGINNING OF THE END

Zeek – Final Warning Signs – July/August, 2012
- July 24th – Zeek terminates Keith Laggos without explanation.
- August 3rd – North Carolina State Employee Credit Union warns that Zeek is fraudulent
- August 7th – North Carolina Attorney General publicly expresses concerns about Zeek.
- August 13th – Zeek cancels training/recruiting sessions
- August 15th – Zeek cancels red carpet event
- August 16th – Zeek shuts down office – followed by website, FaceBook & forum going offline. All payments stop.

Then on July 24th, 2012, a bombshell was announced by Zeek.  Their paid MLM consultant Keith Laggos was terminated abruptly and Zeek would not comment on it.  When Keith left, he made a statement that Zeek would be hit by the FTC within six months.  This news set off a firestorm with Zeeksters.  Before they had recovered from that bombshell, on Aug 3, the North Carolina State Employee’s Credit Union was warning its members that Zeek was fraudulent.  A new firestorm swirled around this news for the next few days.

Then just as everything was settling down, on August 7, the North Carolina Attorney General announced that they were concerned about Zeek, and had requested information (CID-Civil Investigative Demand) from Zeek about their business practices.  What no-one knew at the time was this request had been made on July 6, but Zeek had not informed any of its affiliates about this request until the North Carolina AG made it known on the 7th.

Closed ForeverThen the Zeek management team and Zeeksters went into overdrive claiming this news would be great for Zeek as they would prove they were a legitimate business; and make them grow even more. But before Zeek could recover from this latest bombshell, another one was to befall Zeeksters. On Monday, August 13 Zeek announced their training and recruiting sessions were being cancelled for the week and no explanation given or discussion allowed. This followed on the 15th that the red carpet event that was scheduled for the following Wednesday had been cancelled, and again no discussion allowed.  Before the dust settled on this news, on the afternoon of the 16th, Zeek abruptly shut down their office and put a sign in the window that the office would be closed for the rest of the week.  Later that afternoon Zeek’s website went offline as did its Facebook page and forum. Then it was reported that employees were seen leaving out the back door with boxes of office supplies and the locks on the office had been changed.  Speculation ran wild as to what was happening and had happened. Of course all payments were stopped when the website went offline.

FINAL BOMBSHELL ANNOUNCED

SEC SealThen on Friday morning the final bombshell was announced.  The SEC/Secret Service had shut down Zeek as a massive Ponzi, and Paul Burks had entered into a plea deal paying a $4 million dollar fine, turning the company over to the court, and all assets of Zeek had been frozen by the court.  A Secret Service agent was at Zeek headquarters interviewing Zeek affiliates that had come to the office to see if it was open.

Just like in the ASD case, immediately everyone blamed the SEC for shutting down a legitimate company, Zeek could not possibly be a Ponzi, they had no proof it was a Ponzi, the government wanted the money, too many people were becoming rich and the rich did not want that to happen, Paul was railroaded into turning over the company with the threat of prison if he didn’t cooperate, he was denied to have an attorney to advise him, and the list of complaints, gripes, and innuendo’s all directed at the “evil” government continued unabated on all the financial forums and blogs.

What is known now is that Paul Burks had been providing the SEC hundreds of thousands of documents, financial and electronic records, and had been doing so for some time.  He did have legal counsel advising him every step of the way, and was not forced into any plea deal.

SO WHAT IS THE STATUS OF ZEEK NOW?

Zeek is closed and will never come back. The court has appointed a temporary receiver that will oversee all the assets of Zeek and will be responsible for returning all the money he can retrieve to the true victims of Zeek. No-one knows how long this will take.  There was over $375 million dollars paid to affiliates and Zeek employees and executives.  It is reasonable to assume that the receiver will institute clawbacks against the major winners of Zeek, and those same winners will do everything in their power to keep as much of their ill-gotten gains as they can.  It will depend on how long this process takes before any restitution can be made to the victims.

All the payment processors are cooperating with the receiver to determine the monies in and out of the Zeek affiliates accounts for the accounting to be completed of all these funds.  If there are any buildings or other hard assets of Zeek, they will have to be sold to be added to the pool of funds for the victims.  There is no way a time-table can be established for how long all of this will take. But this is not going to be resolved any time soon.  It could take up to 2 years, maybe longer, before this is all settled.

As of this writing, there are two class-action lawsuits being filed against Paul Burks and Zeek. There is also a group considering filing a lawsuit against the SEC claiming they stopped a legitimate company and lied about Zeek being a Ponzi.  The only problem with all of these potential lawsuits:  None can go forward until the receiver has accomplished the task he has been assigned.  The only person who has standing in the Zeek case is Paul Burks, as he was the owner of Zeek/Rex Venture Group.  All the affiliates do not have any standing whatsoever in Zeek/Rex Venture Group.  This was tried in the ASD case, and there were over 90 lawsuits filed against the government for shutting down ASD.  All were denied for lack of standing in the case. Besides, the SEC did not shut down Zeek, the court did. So to overturn the verdict, they would need to sue the judge, not the SEC.

DUE DILIGENCE IN THE AFTERMATH OF ZEEK

What is truly sad is that there were a lot of really good people who have been hurt financially by the closure of Zeek. Many invested, and yes they were investing contrary to what Zeek tried to claim, far more than they could afford to lose.  There is no doubt many may lose their homes, cars or both, their retirement funds from their involvement in Zeek.  Many will also lose friendships and family members because they got them into Zeek. The problem is they did not do any real due diligence about Zeek or they would not have joined. There were many who were exposing Zeek for the Ponzi it was, but no-one wanted to listen. The information was out there, it was just ignored or they didn’t want to find it.  After all you could make $40,000 a month placing one ad per day and letting your points roll-over from each 90-day period until it would be paying you $40,000 a month.  At least that was the dream, it just wasn’t reality; as now too many have found out the hard way.

There never is any pleasure or satisfaction in being right about Ponzi, and Zeek is no exception.  We were doing all we could to warn people not to join, or if they were in Zeek to get out as fast as possible before the coming fall. All we can do is hope and pray the next time people will listen to us when we sound the warning; for the truth is we do know what we are talking about.

Lynn Edgington Founder/President of Eagle Research Associates, Inc., Author, Radio and Television Subject Matter Expert on Ponzi’s/Scams, guest columnist, and blogger.

Note: Some information came from KSChang and his Analysis of Zeek Rewards, and from Oz at BehindMLM.

Filed Under: Investments, Ponzis Tagged With: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

ExoticFX WARNING

March 7, 2011 By 3 Comments

A new Ponzi FOREX program is trying to gain traction on the usual suspect Ponzi forums Talk Gold and Money Maker Group. The name of the program is ExoticFX.

In the past, these type of Ponzi schemes claimed the principal was “guaranteed.” ExoticFX uses a new twist by saying that your return on investment is “guaranteed.” Contrary to what ExoticFX claims, you cannot “guarantee” the return on investment trading in FOREX.

ExoticFX says they are registered in Hong Kong. It is the only thing they say on their website that is true. But, they are not licensed and registered to trade FOREX anywhere as required by law.

This is just the tip of the iceberg regarding this bogus company. There is far more information, or I should say lack of information on their part, that screams that ExoticFX is a Ponzi. Will it pay? Of course it will in the beginning. All Ponzi’s do, but there are only two outcomes of this Ponzi. They will close and run with the money, or the feds will move in and shut them down. This is nothing more than robbing Peter to Pay Paul, which is nice if you are Paul. Too many will be Peter.

Lynndel Edgington (EagleOne) is is the author of Robbing You With A Keyboard Instead Of A Gun, the Founder of Eagle Research & Associates , and works with multiple Federal Law Enforcement Agencies.

Filed Under: Investments, Ponzis