UPDATE: A judge sentenced Paul Burk to more than 14 years in prison Monday for operating a $900 million internet ponzi scheme.
According to a release, Burke, 70, was sentenced to 176 months in prison, three years supervised release, and ordered to pay $244 million as restitution. Burke was found guilty in July 2016 of Wire and Mail Fraud Conspiracy, Wire and Mail Fraud, and Tax Fraud Conspiracy.
Officials say Burke ran the scheme from January 2010 through August 2012. In that time, Burke and his conspirators convinced more than 900,000 people to invest in their fraudulent scheme, according to the release. 1,500 of those victims were from the Charlotte area.
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[Post from September 13, 2016]
CHARLOTTE, N.C. — Two of the conspirators in the ZeekRewards internet ponzi scheme, which generated more than $850 million, were sentenced on Tuesday for their roles in the scheme.
Dawn Wright Olivares
Dawn Wright Olivares, 48, and her step-son Daniel C. Olivares, 34, were sentenced to 90 and 24 months respectively for their part in a scheme that fraudulently promised investors a return on their investment.
The two must also serve three years under court supervision and pay a yet to be determined amount of restitution.
Dawn and Daniel Olivares conspired with Paul Burks, of Lexington, the owner of Rex Venture Group, LLC, the parent company of ZeekRewards, from January of 2010 until August of 2012 to defraud over 900,000 victims through the ponzi scheme. Burks has not been sentenced yet.
Court reports indicate that Burks along with Dawn and Daniel Olivares told investors the internet based penny auction site Zeekler was generating large profits and guaranteed 125% return on investment. In fact, the vast majority of funds the company held were a result of new investors and not retail sales.
The scheme became too big to maintain and the defendants did not have the proper accounting to balance their assets and liabilities, nor the revenue to pay its debts.
Dawn Olivares was Zeek’s Chief Operations Officer and received over $7 million from victims of the scheme. Daniel Olivares was Zeek’s senior technology officer and gained over $3 million from the scheme.
