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Unraveling financial fraud in ZeekRewards case

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CHARLOTTE, N.C. — Kenneth Bell knew he was facing a major legal challenge when he took his first step into ZeekRewards.com’s office in Lexington three days after federal regulators shut down the Internet company on Aug. 17, 2012, according to The Winston-Salem Journal.

The U.S. Securities and Exchange Commission had accused Rex Venture Group LLC, Zeekler andZeekRewards.com, and Paul Burks, their principal owner, of raising $850 million through unregistered securities. The companies were shut down and their assets frozen. The SEC had appointed Bell, a Charlotte attorney, as receiver of the company.

The companies raised the money from at least 2.2 million customers, including more than 230,000 in the United States and 47,000 in North Carolina. What made Bell realize the historic significance of unraveling the financial part of the Ponzi scheme was the cashier’s checks he found on the floor and in boxes.

Those checks came primarily from banks and Internet financial institutions that had quit doing business with ZeekRewards.com earlier in 2012. Those checks alone were worth combined about $80 million.

Read full story: The Winston-Salem Journal