Two Ponzi Scammers Got Their Prison Sentences Handed Down...

Two ponzi scammers got their prison sentences handed down recently in early 2017.

Paul Burks, who was the head of the $939 million Zeek Rewards ponzi scheme with over 1 million victims around the world, got 14 years in a Federal prison, in addition to fines of $244 million in restitution (which he can't pay as he already gave up all his possessions) and 3 years probation. Given that Burks is already 70 years old and is believed to be not in the best of health, he may spend his final days in prison.

Two other top heads of the scheme, Daniel Olivarez (computer guru) and Dawn Wright-Olivares (VP of Operations and spokesperson) have been sentenced previously to lesser terms for their contributory roles in the scam that was shut down in 2012 by SEC and Secret Service. It was believed they were fined and have to give up their residence. There was no word on what happened to a restaurant Dawn allegedly operated, or what happened to her job at a different MLM company called iWowwe.

MLM Skeptic had been tracking Zeek Rewards for over a year before it was shut down and published several articles explaining how Zeek Rewards cannot be legitimate. Indeed, in the final days of their scam they tried to gag me with a "takedown request" to my content host by claiming MLMSkeptic had violated their trademark when it was quickly realized that the alleged trademarks was not even owned by them! Must be really desperate over there in their final days, as only a few weeks later when SEC and Secret Service stepped in.

In other news, co-leader of a smaller ponzi known as "The Achieve Community", Kristine Johnson, was sentenced to 21 months in Federal Prison. TAC, which is peanuts compared to Zeek, was shutdown in 2015 by SEC. It was a pretty simple Ponzi scheme that didn't bother to polish itself by hiring celebrity lawyers and experts and pretending to be legitimate. They mainly stuck to Facebook and such, by claiming "triple algorithm" that can multiply money... What utter nonsense.

MLM Skeptic had not been tracking TAC but it was identified early on by Oz of BehindMLM as a simple cycler ponzi scheme.

What do these two scams have in common? It's actually quite simple..

GREED.

OPINION: With HLF consenting to reforms, and Burks of ZeekRewards Guilty, justice prevailed, but work is never done

July 2016 has been a busy month.

On July 15, 2016, news was released that Herbalife has reached a settlement with the Federal Trade Commission where HLF agreed to a LONG list of reforms and pay a $200 million fine / reimbursement to the victims.

Then on July 22, 2016 Federal Court in North Carolina passed down the verdict... a Federal jury has convicted Paul Burks of ZeekRewards of all four counts of fraud and conspiracy to commit fraud.

MLMSkeptic has long criticized both schemes, both here on the blog, and on BehindMLM.com.

MLMSkeptic had analyzed the various comments, retorts, criticisms, and cheers of Ackman's epic short of Herbalife at end of 2012 and the subsequent PR war, and pointed out problems with such arguments.  Most of the critics of Ackman then believed that HLF was "too big to fail", or perhaps "not egregious enough to die, maybe fined".

So it is with much amusement and facepalming when "journalists" loudly proclaimed "FTC says Herbalife not a pyramid", when FTC said no such thing.

How did CNNMoney got it so wrong?
FTC never said HLF is not a pyramid scheme... 

You are welcome to search the actual FTC complaint and stipulation agreed to by HLF. "Pyramid scheme" was nowhere in the documents. Furthermore, when questioned by the press at the news conference, FTC Chairwoman Edith Ramirez was asked at least FOUR SEPARATE TIMES whether HLF is a pyramid scheme, and Ramirez repeatedly dodged the question (probably as a part of the settlement).

Q: I know that you’re not going to put any labels on this, but it seems to me if we look at the BurnLounge case, that while this complaint does not use the words “pyramid scheme”, would you agree that a prima facie case of a pyramid scheme is alleged with the allegations within the complaint?

A:  Again, I will leave it up to you to draw that conclusion. Our focus in this complaint was in addressing the core issues

When asked outright about HLF's own announcement... That FTC have determined HLF to be NOT a pyramid scheme...

Q: Did you review the language in their (Herbalife’s) press-release that sort of affirmatively said that they were not declared to be a pyramid scheme? Because they’re sort of having that as an outright headline.

A: I do not agree with that statement. The word “pyramid” does not appear in our complaint that is true, but um again the core facts that we’ve alleged, that we consider to be problematic with their compensation structure, are set forth in detail in our complaint. And again, I will leave it to readers to draw their own conclusions. But that they were determined to not be a pyramid… that would be inaccurate.

And indeed, checking the HLF website no longer shows any sort of language that claimed "FTC determined HLF not pyramid scheme"...

So you know which way the CNNMoney article was written... They were written from HLF's press release, not the FTC press release. It is... biased.  Shame, CNN. Shame on you for lazy reporting.

I am not listing all the changes that FTC managed to squeeze out of HLF. You can read the documents linked above yourself. It is a LONG list of reforms, and it will likely become a new standard much as Amway's settlement with FTC created the modern MLM back in 1979.  And that pretty much tells you the fact: HLF was a scam that required reforms so it is no longer operating as a scam. Any one who argues otherwise is simply denying reality.

I may do my own analysis later on these changes, but HLF is no longer the same company. They believe they can continue to thrive (or else they would not agreed to these changes), but we shall see.

Then we come to Zeek Rewards, and Paul Burks.

BREAKING NEWS: Fed Grand Jury Indicts Paul Burks of Zeek Reward Ponzi Scheme

Star Tribune (North Carolina) has reported that Federal grand jury has indicted Paul Burks, head of Rex Venture Group, parent company of Zeekler and ZeekRewards ponzi scheme, of wire and mail fraud, conspiracy, and tax fraud.

http://www.startribune.com/business/280347122.html

News Update 01-AUG-2014: Zeek Refund Coming 30-SEP-2014; More Zeek Winners Get Sued; Zeek Heads Reach More Settlements

Yep folks, this is turning into an all Zeek Rewards Ponzi aftermath update. And yes, I have links, which you should ALWAYS CHECK to make sure I'm reporting stuff accurately. (And if you don't see links, ask)


Zeek Refund Round 1 May Be Coming 30-SEP-2014

According to court documents as reported by ASDUpdates, Judge Mullens has approved the first distribution of refunds for Zeek Rewards, tentatively scheduled for 30-SEP-2014

Stay tuned to the Zeek Rewards Receivership website for actual announcement. Speaking of which...