A small town North Carolina is the center of one of the largest investment scams in history.
The town of Lexington, N.C. — which has a population of 19,000 and is located southwest of Greensboro — was the home of the website Zeekrewards, reports the Associated Press.
The site — through its founder Paul Burks — allegedly ran a Ponzi-styled scam with more than a million people sending in money. In a ponzi scheme, investors get returns through the money paid in by newer recruits without any real investments being made. Eventually, the size of the scheme grows too large to manage and the whole thing collapses from its own weight.
And that is what happened to Zeekrewards and Burks recently. Burks had run Zeekrewards until it had more than $600 million invested by its more than 1 million subscribers. The company was closed in August by Securities and Exchange Commission investigation, and Burks has agreed to pay a $4 million penalty for his actions.
Investors might have more to complain about shortly. The SEC is considering asking those who did receive payouts through Zeekrewards to return the money.
