As the Criminal trial of Paul Burks approaches, the Government has filed a Notice today that says Zeek was not Burks’ first attempt at Ponzi scams. In this Notice, they ask the Court to allow the admission of evidence and argument that was not part of the Bill of Indictment, as they believe it to be “intrinsic evidence” and includes evidence of (1) Failure to File Taxes, and (2) a scam called “FollowMe1x2”.
In the Notice they lay out what they call a “Pertinent Factual Background” regarding Burks and his activities:
Defendant Burks established numerous multi-level marketing companies between 1997 and 2010, with various products, including signed and numbered art; phone cards; and “fireshakers,” and various names, including New Net Mail; FreeStoreClub; and GoGoHub. Each of these companies ultimately fizzled out.
In 2010, Defendant Burks launched two penny auction websites: Zeekler.com and MyBidShack.
The financial condition of RVG in 2010, the year the penny auctions launched, was dire. Defendant Burks was in a desperate financial condition. His co-defendants, Dawn Wright-Olivares and Dan Olivares, were looking for other work. RVG’s launch of the penny auctions (MyBidShack and Zeekler) with multi-level marketing compensation plans had not generated substantial income, and Defendant Burks needed cash. In approximately September 2010, Defendant Burks and his co-conspirators launched yet another MLM website: FollowMe1x2.
And then, they make a connection to the slimy slide into Zeek Rewards:
However, in reality FollowMe1x2 was a “chain letter company” that did not generate any product. FollowMe1x2, of course, failed to obtain the money necessary to continue to pay out funds to its new participants. Rather than dissipate FollowMe1x2 entirely, participants were given positions in the next iteration of the scheme: ZeekRewards. Participants in all of Defendant Burks’s prior businesses started in the ZeekReward’s compounder with $500 in compounding credits.
The document lays out a lot of things that do not bode well for Burks,and if allowed, could put another nail in the USA’s case against him. We’ll see if the Court allows this new evidence, which I bet they will.
I have uploaded the documents onto the Files website.