Old habits die hard

Aug27
by David Lawson on August 27, 2012 at 10:23 am

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Bernie Madoff, is often the first person that comes to mind when you mention the words Ponzi scheme these days, in the midst of the ongoing financial crisis. The Madoff Ponzi scheme fabricated almost $65 billion of money that didn’t exist. The exponential relationship between finding new investors money to funding the old investors overzealous and unsustainable gains were bound to come crashing down as new investors were nowhere to be seen,having lost confidence in the markets in the aftermath of the 2008 crash. One would think that investors would have learnt their lesson on when returns are too high and can not be justified by any legitimate marketplace, but old habits die hard in the current financial crisis!

ZeekRewards.com, has an Alexa Traffic Rank of 128, attracting a huge online customer following through offering investors excessive Ponzi like returns. These returns proved too good to be true when company was shut down by the SEC on Friday 17 August 2012 suggested as a Ponzi scheme on the verge of collapse. Forbes.com reported:

The SEC says online marketer Paul Burks and his company raised more than $600 million from more than one million online customers through the website ZeekRewards.com since January 2011. Investors were promised up to 50% of the company’s daily net profits through a profit sharing system in which they accumulate rewards points that they can use for cash payouts, according to the agency.

“However, the website fraudulently conveyed the false impression that the company was extremely profitable when, in fact, the payouts to investors bore no relation to the company’s net profits. Most of ZeekRewards’ total revenues and the “net profits” paid to investors have been comprised of funds received from new investors in classic Ponzi scheme fashion,” the SEC claims.