In this Feb. 28, 2013 photo, Sarah Chavez stands on the porch of her home in Lexington, N.C. Desperate to raise money for their 6-year-old daughter’s cancer treatments last summer, friends told Jose and Sarah Chavez of a way to quickly turn their meager savings into a small fortune. But what the Chavez family and many others didn’t know was that state and federal regulators for months had received complaints that ZeekRewards was a scam. (AP Photo/Chuck Burton)
LEXINGTON, N.C. (AP) — In the hardware store on South Main Street, the owner pulled Caron Myers aside to tell her about the best thing to happen in years to this once-thriving furniture and textile town.
Did she hear about the online company ZeekRewards? For a small investment, she could make a fortune. He had invested. So had his grandsons. And so were more and more people in Lexington, including doctors, lawyers and accountants.
Skeptical at first, Myers drove a few blocks to the company’s one-story, red-brick office and spotted a line of people circling the building. She was sold, and plunked down several thousand dollars. But months later, Myers, like hundreds of thousands of others, discovered the truth: ZeekRewards was a scam.
“I was duped,” Meyer said. “We trusted this man. The community is still in shock.”
Authorities say owner Paul Burks was the mastermind of a $600 million Ponzi scheme — one of the biggest in U.S. history — that attracted 1 million investors, including nearly 50,000 in North Carolina. Many were recruited by friends and family in Lexington, a quintessential small town where neighbors look out for each other.
But what investors didn’t know was that regulators had received nearly a dozen complaints about ZeekRewards and the related site Zeekler.com, but failed to take action for months, leaving the company free to recruit tens of thousands of new victims.
The Securities and Exchange Commission, which closed the operation Aug. 17, said Burks was selling securities without a license. The Ponzi scheme was using money from new investors to pay the earlier ones.
Burks Login to read more