Zeek Rewards a Ponzi Scheme or Scam?



Looks like the they information is really flying about Zeek Reward although not sure if what they are saying is what was truly being represented by Zeek reps.  Sure some Zeek reps might have used words like “investing” and “return on investment” or ” interest” but I have heard a Zeek rep or the company use words like “Purchasing Securities”. Perhaps it was insinuated .


Either way it looks as if the$225 Million dollars in assets have been frozen by the SEC and this thing will more than likely be tired up for years in court cases.  Here is an except of what I just read form the SEC site


On Friday, The Securities and Exchange Commission shut down Zeek Rewards and its parent company, Rex Venture Group, filing a complaint in federal court in Charlotte and freezing the approximately $225 million in investor funds in the company’s bank accounts.

According to the SEC’s complaint, Zeek Rewards affiliates were offered the oppportunity to make money by purchasing securities in the form of investment contracts.”


Best to take on a new approach with a better run Penny Auction Site 


More news below ….



Zeekler.com, penny auction site, closes headquarters in Lexington, NC


By Nash Dunn
The Dispatch (Halifax Media Group)
Published: Friday, August 17, 2012 at 9:42 a.m.
Last Modified: Friday, August 17, 2012 at 9:42 a.m.

Rex Venture Group, which operates the online penny auction site Zeekler.com and affiliates program Zeek Rewards, has closed its headquarters for the remainder of the week for undisclosed reasons.

The company, known to most as Zeek, posted three signs on the windows of its headquarters at 803 W. Center St. in Lexington by about 4 p.m. on Thursday that stated the office will be closed, telling visitors to “check the website for more information.” As of 6:22 p.m., there was no further information available on Zeekler.com or zeekrewards.com.

Zeekler.com and zeekrewards.com were offline as of 9 p.m.

The company also announced it is canceling its upcoming “Red Carpet” event, scheduled for Wednesday. The announcement, made on zeekrewardsnews.com, also advised readers to continue to monitor its websites for more information to be forthcoming.

On Monday, the company also advised Zeek Rewards affiliates there would be no training, recruitment and leadership calls during “the next few days while planning is going on,” according to a message on zeekrewards.com.

Both Zeekler.com and Zeek Rewards have recently come under the scrutiny of the North Carolina Attorney General’s office, after dozens of users filed complaints and inquiries in the past six months. The company, which is rooted in its penny auction website, has expanded in the past year to let users buy in through an “affiliates program.” Some say the company is a good way to make a little more cash while others condemn it as the makings of a pyramid or Ponzi scheme.



My heart goes out to all those who may have been hurt with  this program.  I too have experinced the loss on moneies back when ASD Closed Down many Years age and it took me many years to recouple my loss.  If you had ever spoken to me hopefully you took my advice and not put in  more than you could afford to lose and have recouple all you inital monies.  Zeek did lay the foundation for a  better program to evolve out of this that are more in the standard of the currently MLM Laws.  Bidify has done an excellent job at creating this with their Lawyers Setting All the Proper Criteria to make an Online Penny Auction site along with a MLM Opportunity work.     Check out this review on Bidify


This Also Just in from Attorney :  Kevin Thompson – The MLM attorney speaks out about the Zeekrewards situation

The Law Office of Kevin Thompson specializes in providing legal services specializes in providing legal services for startup direct sales organizations.

Named as one of the top 25 most influential people in direct sales, Kevin Thompson has extensive experience and helps entrepreneurs launch their businesses on secure legal footing.

Disclaimer: This article contains my opinions. I’m not stating with certainty that Zeek is fraudulent; however, in my opinion, I believe that to be the case.  I think the investigation is timely and will serve a valuable function.    

It’s official.  Zeek Rewards has recently closed its doors.  Literally.  In fact, the SEC and U.S. Secret Service are now involved. This is what we know: the doors are locked and the website is down.  It’s not looking good.  Was this done voluntarily?  Were they required to do this by the SEC?  This all has occurred recently after the North Carolina AG’s office expressed “concern” over the Zeek model.

I’ve got mixed emotions.

I’m both angry and relieved.

Why am I angry?

I really think we lost our minds with this model. The MLM community took the bait and walked off a cliff like a herd of lemmings. Do you want to know what happened?  I’m going to be candid:

Zeek exploited the gray.  They took a bath in it.  They skinned it and made a coat out of it.  They hired the right people and adopted the right lexicon.  And who is going to pay the price?  The entire industry.  This is bigger than just the participants.  There’s an ocean of gray separating legitimate network marketing companies from pyramid schemes.  Instead of shrinking the gray, we fight like hell to obfuscate.  As an industry, we’re self-delusional.  It’s true.  We think it’s better to have vague standards.  But now we’re seeing first hand what happens when the inmates take over the asylum.

“Those are not investments, those are ‘samples’ given to ‘customers’ in an effort to entice them into buying more….it’s like Amway distributors giving samples of soap to customers.”

It’s not the same thing! Amway distributors are not spending $50,000 on soap, giving it all away to strangers while dramatically increasing their earning potential. Amway distributors have a direct, real connection with customers.  With Zeek, it’s just a combination of 1s and 0s on a computer screen.  Who in the hell were these customers?  Where were they coming from?  Were they real?  Were they ever asked to verify their accounts? Nobody knew and nobody seemed to care.  People knew the angle.  They read from the script, mastered the narrative and explained with eloquence why Zeek was “just like Amway, but with penny auctions.”  Zeek affiliates were essentially rewarded IMMEDIATELY after they bought the bids, regardless if they were ever used. This is not consistent with traditional MLMs.

I’m angry because they leveraged your credibility. They leveraged the credibility of my colleagues and competitors. They leveraged mine.  And we all look like idiots.

I’m angry because this recent news is going to be devastating for tens of thousands of people.  People that will likely associate this horrible experience with “network marketing.”  These were the people that cashed in on their 401(k)s because they were promised tremendous gains in a short amount of time.  These were the people that “invested” more money than they could afford to lose, hoping that maybe, for once in their life, they could get a decent ROI. If the money ends up being locked away in receivership, which is a possibility, it’s not coming out without a court order. Will everyone get their money out? I’m not sure.

I’m angry because this actually impacted my relationships with clients, current and former.  When I gave my candid advice, I was sometimes met with hostility.  I was considered “out of touch.”  I was told that Zeek was “spending countless dollars to be compliant” and I was just envious to be on the outside.

I’m angry because we allowed the cancer to infiltrate the host and spread.  We opened the door and welcomed it with open arms.  Zeek leadership took on top positions with trade associations, recruited top distributors from reputable companies and networked intelligently with industry influencers.  Have cash?  We’ll dance. We provided them with the semblance of legitimacy, and they ran with it. We empowered them.

Why am I relieved?

I’m relieved because the conversation is finally over.  I’ve been fielding calls at least twice a week with somebody else looking to launch their version of Zeek.  It’s hard to tell someone “no” when there’s someone across the street making a fortune with the exact same model.  Finally, it’s over.  We can resume normal business.

I’m relieved because this should mark the end for companies having to defend themselves from Zeek. Zeek was soaking up a lot of leaders from a lot of different companies, causing a considerable disruption in the space. Companies, trying to hold onto their people, found themselves in the cross hairs between zealous distributors looking for a quick buck and industry pundits, all defending the Zeek model. It put company executives in an awkward spot.

What did we learn?

Money Clouds Judgment

When people have a serious economic position with something, they’ll fight hard to protect it. They’ll go to great lengths to find a mental justification, even if it defies all logic and intuition.  There were a lot of distributors in Zeek that really should have known better.  They were around for the FutureNet, SkyBiz and Equinox cases. They knew better. And despite that experience, they really believed they were in the clear on this one.  I think their belief was genuine. They were just under a spell.  Once they got a taste of the enormous commissions, they were hooked and went to great lengths to defend the business.  Adults under the influence of serious cash are like teenage boys with girls…all logic goes out the door.

Watch Out For Name Dropping

People relied heavily on the credibility of Zeek’s lawyers: Gerald Nehra and Kevin Grimes.  They said “These are guys are good; therefore, we’re good.”  I can speak on this first hand: hiring an attorney by itself does not legitimize a program.  At the end of the day, we MLM attorneys explain the boundaries for our clients and provide advice.  It’s on them to follow the advice and stay within the lines. I can guarantee you of one thing with 110% certainty, Zeek is not surprised by recent events. Grimes and Nehra are both good attorneys and good competitors. I’m confident Zeek was fully informed of these potential issues. MLM attorneys can lead horses to water…we can never make them drink.

Commissions Must Be EARNED

If someone promises you easy, run fast!.  We can do better.  Any measure of success in life requires hard work. Really, really hard work.  In the network marketing industry, we need to stand for meritocracy: as you perform, so shall you bonus.  We work hard to ensure the pay plans are fair and that reps are rewarded commensurate with the work they do.  With Zeek, the general tone was that people could make money with minimal effort. There was very little effort involved in reaping the rewards from the penny auction platform (with the exception of buying some customers and placing ads online). I understand that measures were taken to strengthen the program i.e. the compliance course, eliminating the customer co-op, etc; however, rewards were still allocated immediately upon purchases, regardless if the bids were ever used. This was a problem. There must always be a direct connection between the rewards received and work performed.

With modern technology, there seems to be more “make money while sitting on your rear-end.” And as typical Americans, we’re drawn to it! As network marketers, we need to promise VALUE instead of promising EASE.

If It Looks Like a Duck….

Richard Brooke recently said, “If it quacks like a duck, it may not be technically a duck but duck hunters WILL KILL IT!”  Zeek just looked too much like a security. I understand that there are countervailing arguments, but the bottom line is simple: Zeek fought hard to train people to NOT call it an investment opportunity because that’s exactly what it looked like.  People, when they were pitching the program as an investment opportunity, were just following their instincts.  Why?  Because it looked like a duck….


There are a number of issues that will likely come to light during this investigation.  Is it a Ponzi scheme?  Is it a pyramid?  Is it an unregistered security?  Is it all of the above?  Will criminal charges follow?  Who knows…

As an industry, I think it’s time to tighten up the skates.  This should serve as a wake up call. This is embarrassing.  Absolutely embarrassing.  Zeek flew under the banner of protection provided by US, the network marketing community.  They danced in the gray and profited. We need to stop drinking our own kool-aide and shrink the gray. When I first started practicing, I wrote an ebook that has been “read” (according to scribd.com) over 12,000 times). It’s titled, Pyramid Schemes: Saving the network marketing industry by defining the gray. I propose some ideas on ways to make the space better. I think it’s time. Otherwise, this WILL happen again. And at the pace of technology, it will happen soon.

As for my representation of Bidify, which I’m sure will be an issue, they’re paying attention to this situation. Since retaining me, they’ve made a number of difficult decisions. I’m not going to comment further on their business other than to say they’re working hard to stay within the lines. Their recent decision to reduce the max cost to 5,000 euros forever is proof of it. If you want to park a lot of cash, Bidify is not the spot for you.

If you learned something, please hit the +1 or “Like” button above and get it out there. Thanks.

This Original article found here: http://www.businessforhome.org/2012/08/zeekrewards-closing-down-the-mlm-attorney-speaks-out/

So will the Attorney General shut down Zeek Rewards for being  a Ponzi Scheme?

I have been listening to a few Zeek Rewards reps lately describing the Zeek Rewards opportunity and what they do.  When they explained  what they do,  and talked about their compensation plan it brings back  a recollection of the program I was involved in many years ago with this company called Ad Surf Daily (ASD) out of  Florida .

Zeek Rewards Scam or Ponzi Scheme

Can Zeek Rewards Be Shutdown Just Like ASD Did for Being a Ponzi Scheme

Unfortunately a lot of these programs come together and because many reps do not understand some of the terms they use to describe the program they end up making  false claims. They use terms which sound like investment terms which eventually get the MLM company in big trouble. Some of these claims may be true and some of these claims may not be true about  Zeek Rewards,  never-the-less we will have to see.

The way these few reps have described the Zeek Rewards program  sounds a lot like the transferring of money without a product or service. When money is transferred without a product or service, and an individual or corporations  receive a (ROI) return-on- investment,   without the exchange of a product or service   – this is considered a Ponzi scheme. Sometimes individual mis-use terminology which indicates  this is taking place –  although it may not be this case.

Zeek Rewards, whose parent company is called Zeekler,  operates a penny auction site and is considered a MLM company. The penny auction offers great deals while making Zeek a nice profit.  Sometimes these deals are so good that people can get addicted to the bidding process  similar to how one may become addicted to gambling.

The problem that has brought a lot of attention to Zeek Rewards has manifested because   some of their distributors are making some really outrageous  money claims along with saying things such as you can make money  with no recruiting or selling.   Many are still using term such as “invest”  which is a big no-no when talking about a business opportunity or a MLM company . Some reps are claiming that all you need to do is post ads around the Internet, on a billboards or just  talking to a friend. Doing this you will earn or get them credits for their auction site and/or  they can cash it in for money.

Because of some of these claims and the potential legality of the Zeek Rewards compensation plan

Zeek Rewards Illegal Ponzi Scheme?

You Don’t Want to be Involved With A MLM Who Has Legal PRoblems

Zeek Rewards is now getting themselves into a bit of hot water. On February 4  Zeek Rewards hired  two top MLM Law firms to get the company moving forward again. They are also looking closely at their compensation plan and have  hired a MLM compensation plan consultant  to make any necessary changes to make the Zeek Rewards compensation plan not at all resemble a Ponzi scheme.


They have also had to advise some distributors to pull many of the videos that were on the internet that stated things that  were not in compliance with a legitimate  Network Marketing  compensation plan. Some of what some reps claimed  could possibly have been used as evidence to prove that Zeek Rewards could be a Ponzi scheme.

Zeek Rewards is  acting quickly to address this problem and wants to make the system right.  Unfortunately  they are already under the eye of suspicion. Right now things are looking kind of crazy for Zeek and they will have to do a lot of work so that their MLM business does not look  like a Ponzi scheme.  They do not want to go down the road and be shut down as the  Attorney  General  shutdown  ASD back in 2008.

Zeek Rewards reps will have to help them with this challenge and stop making claims where people can get in, do nothing and have monies paid to them . This is basically a big red flag that will continue to call attention by the legal system and  further an investigated of a possible Ponzi scheme.

Regardless of whether  Zeek Reward it is or is not a Ponzi scheme, many times the government can still shut you down even if there’s a slight resemblance of any type of Ponzi scheme. In my mind ASD was not a Ponzi scheme but in the minds of the Attorney General and the US Government it was . They did shut them down and people lost a lot of money. So  just a word of caution to watch out and pay close attention  to this.  If you are a distributor for Zeek Rewards do not make claims that will make the

Zeek Rewards program resemble or  look like a possible Ponzi scheme.


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Some Update on Zeek rewards:  Since many people are contacting me about Zeek Rewards they are continually giving me updates. I have heard the Zeek Rewards Management team is doing the  right thing by having a mandatory test that all Zeek Rewards Distributor must take.  From what I am hearing this is a Compliance Test that all Zeek Rewards Distributor must pass.  It has been put in place so that Zeek reps explain the program correctly and do Not mis-represent the company or their compensation plan on how individuals make   their income.

This is a good move by the management team at Zeek.

I have also heard he they  are still experiencing growing pain since they are growing at a very fast pace.  We will still have to see how all this transpires


To Your Success


Douglas Paul Alp

602 714 2773

Unstoppable Entrepreneur

Douglas Paul Alp

134 Responses to Zeek Rewards a Ponzi Scheme or Scam?

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