State investigators believe customers and investors in Maine may have fallen victim to a Ponzi scheme run through the website ZeekRewards.com.
In a press release, the state's Office of Securities and Bureau of Financial Institutions announced that federal regulators took action to stop the site, which was placed into receivership and had its assets frozen by a North Carolina district court on Aug. 17.
That move came after an action from the U.S. Securities and Exchange Commission for securities fraud against the site and the related Rex Venture Group LLC and internet marketer Paul Burks of Lexington, N.C.
The SEC complaint alleged that the defendants raised $600 million from more than 1 million Internet customers and international investors at the site, beginning in January 2011. The complaint alleges that the site promised customers profit-sharing rewards that were paid by the investments of new customers to the site, which investigators called a "classic Ponzi scheme."
"Some Maine financial institutions reported receiving requests for assistance from customers who invested in ZeekRewards.com, so, unfortunately, we have good reason to believe there may be a number of Maine victims of this scheme," said Lloyd LaFountain III, superintendent of Maine's Bureau of Financial Institutions, who encouraged any investors to contact their financial institution and stop any future payments to the site.
State officials reported that the receiver in the case has identified $225 million in investor funds from 15 foreign and domestic financial institutions and updates can be found about that receivership online. The SEC also maintains a website with updates in this case.