Charlotte, North Carolina - Hundreds of millions of dollars has been recovered so far in a massive Ponzi scheme that attracted more than 1 million investors from the United States and all over the world, according a court filing in the case.
The case involves Rex Venture Group, a Lexington, North Carolina-based company that operated several online ventures, including Zeekster.com, a penny auction site, and ZeekRewards, a business designed to drive traffic to the penny auction.
The Securities and Exchange Commission in August froze the company's assets, and a federal judge appointed a receiver - Charlotte attorney Kenneth Bell - to recoup money for the victims.
The SEC has said the company operated by Paul Burks of Lexington, North Carolina, was running a $600 million Ponzi scam - where money from new investors is used to pay out old ones. His company, ZeekRewards, was illegally selling securities.
The 66-year-old Burks has agreed to pay a $4 million penalty and cooperate with the SEC in trying to recover money. Though the SEC said Burks siphoned millions for his personal use, he has not been charged.
Bell on Thursday filed his latest report on the case in U.S. District Court in Charlotte.
As of Dec. 31, he said he had recovered $312 million, and incurred $1.6 million in fees and services for the investigation.
A forensic accounting team has spent more than 1 800 hours unraveling the company's finances, the filing said.
Bell told The Associated Press they are still trying to figure out how much money flowed into the company - and how much is missing. He said it may reach as high as $800 million.
“The obvious thing is trying to reconcile all money in and all money out to determine if any is missing and, if it is, where is it?” he said.
When the SEC closed Burks' company, it seized 115 boxes of hard copy records to help learn the inner workings of the company.
“The company records were not in good shape,” he said.
The SEC has said that Burks was cooperating with investigators. Bell said he couldn't comment on that except that his team has been using Burks to help decipher the data.
“Paul Burks had lots of MLM (multilevel marketing) ventures for well over a decade. And I think that the software was created on the fly to serve each and every one of those and patched to serve the next venture. It just sort of piled on each other without any of the systemic professional overlay that a business would normally use,” he said. - Sapa-AP