A couple of days over the last week or two, I’ve been covering the the penny auction scam and in particular one company’s version, Zeekler. Those articles, particularly the Zeekler one, were building up to the article that I wanted to get to write about on Friday, ZeekRewards. However, I’m going to publish this very incomplete article right away, Thursday evening, due to recent events. If time warrants, I’ll go back and complete it.
A couple of weeks back, I wrote about how MonaVie turned to thought control to prevent a mass exodus from it’s program. A few of the very top distributors were going to something called ZeekRewards. It was an email my friend at Amthrax that asked if I had heard of it. I had heard something a few months before, but every couple of days I get an email about a new MLM scam. Soon after Amthrax’s email, a friend from college emailed me and asked if I had heard about it. Clearly something is going on here.
In the world of MLM, popularity is king. Since most of the real money is made by recruiting and being at the top, you need to pitch a company that is always popular and growing. And ZeekRewards is on a growth tear. The most popular MLM that I’ve written about is MonaVie and according to Google Trends, ZeekRewards is way more popular than MonaVie ever was. See the exponential growth in ZeekRewards (the blue line)?
And this is where I’d move on to the news of the night…
I just received a tip that Zeekler and ZeekRewards is being shut down by the North Carolina Attorney General. I did a little Google News search and it looks like it might be more than rumor and indeed the websites are down. It sure looks like the question in the title is getting a definitive answer from law enforcement.
[Update 8/17/2012]
There’s lots of information on the Internet now of the SEC shutting down the Zeek for running a 600 Million dollar Ponzi scheme. As most people know lots of people lose lots of money in Ponzi schemes. However, there’s a small segment of people who are sucked in and truly believe they are a way to make money. One example of that is this petition to keep Zeek in business. Lots of people pleading that they need the scheme to continue to afford taking care of themselves and their family. Depending on a Ponzi scheme that’s barely been in business for a year is not a solid financial foundation and one that wasn’t going to last anyway.
Since we now know that it is has been shut down by the SEC, let’s get back to the scam. It’s interesting to watch this video with MLM advocate Troy Dooly with the Chief Operating Officer of Zeekler. He makes a point to say that they’ve done all the right things to proactively stay out trouble including hiring ex-members of the SEC. How’d that work out:
The SEC is all over this:
http://money.cnn.com/2012/08/17/technology/zeek-rewards-ponzi-scheme/index.html?iid=Lead
Good to see that the SEC is doing something while they ignore the Herbalife pyramid scheme – http://www.lazymanandmoney.com/herbalife-scam/
What’s your take on bitcoins? There is so much discussion going on about whether or not they are a ponzi scheme but few conclusions supported by facts. Are you familiar with them? Thanks!
I wrote an article about bitcoins here: Bitcoins: The Future of Money or End of the World? It was awhile ago, and I wasn’t thinking about Ponzi schemes much back then.
I am pretty sure that they aren’t Ponzi schemes, because no one has to pay to get into the program or anything like that. It seems to be supply and demand based like Beanie Baby dolls from the late 1990s. When there were few and the demand was high the value skyrocketed. When the demand was low and there were tons of them the value dropped. It may be possible that the creator of bitcoins set aside a lot of them for himself really early, but I don’t know enough about the history to speculate on that.
http://www.accountingtoday.com/news/SEC-Shuts-600M-Online-Pyramid-Ponzi-Scheme-63686-1.html
because if it sounds too good to be true some accountant somewhere is figuring out the tax effect!