by Gwen Moritz
Posted 1/3/2014 01:15 pm
Updated 7 months ago
A Clarksville woman and her stepson are scheduled to plead guilty next month to their roles in an Internet Ponzi scheme that federal agents believe collected nearly $900 million from at least a million victims in two and half years.
Dawn Wright-Olivares, 45, and Daniel C. Olivares, 31, were identified as the chief operating officer and senior technology officer of a scam called Zeekler and ZeekRewards. In a simultaneous civil case, they have also agreed to pay restitution — at least $8.18 million from Wright-Olivares (PDF) and at least $3.27 million from Daniel Olivares (PDF).
On Dec. 20, federal prosecutors in North Carolina charged both Wright-Olivares and Olivares with one count of investment fraud conspiracy and Wright-Olivares with one count of tax fraud conspiracy. Plea agreements with both defendants were filed under seal the same day. A plea hearing is scheduled for Feb. 5 in Charlotte, N.C.
A statement from Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina, is available here.
Zeekler and ZeekRewards were shut down in August 2012, when the U.S. Securities & Exchange Commission filed a civil complaint in North Carolina against their parent company, Rex Venture Group LLC, and its owner, Paul Burks of Lexington, N.C.
The information (PDF) — a criminal complaint filed directly by federal prosecutors, as opposed to an indictment issued by a grand jury — alleges that Wright-Olivares and her company, Wandering Phoenix, were "personally enriched" by about $7.2 million, while Olivares collected some $3.1 million.
An unindicted co-conspirator called "P.B." — presumably Paul Burks — was personally enriched by $10.1 million, prosecutors said.
According to the information, Zeekler was an auction website that the conspirators claimed was "generating massive profits" from penny auctions, and investors were led to believe that they could share in those profits by investing in its advertising division, ZeekRewards.
Between January 2010 and August 2012, according to the charges, the conspirators collected some $800 million by selling investments called "VIP Bids" with a promised return of 125 percent and collected another $97 million by charging monthly subscription fees.
"In truth and fact," prosecutors allege, "Zeekler's purported profits were bogus and ZeekRewards operated as a fraudulent Ponzi scheme whereby the co-conspirators used monies form victim-investors to pay fraudulent returns to earlier victim-investors and to personally enrich themselves."
There were more than 1,500 victims in the Charlotte area alone, according to prosecutors, and the receiver in the civil case has received more than 170,000 claims.
The tax conspiracy charge alleges that P.B. and Wright-Olivares used offshore bank accounts to hide income from the Internal Revenue Service and that no federal income tax returns were filed for Rex Venture Group, Zeekler or ZeekRewards.
What's more, it alleges that P.B. and Wright-Olivares tricked victim-investors into filing false tax returns by sending them Form 1099s reporting income that the investors never actually received.
KFSM-TV, Channel 5, in Fort Smith reported Thursday that the Olivares family owns a Clarksville restaurant called The Healthy Hog. The phone number listed for the restaurant was not working on Friday afternoon. The U.S. District Court in North Carolina has not identified any attorneys of record representing Dawn Wright-Olivares and Daniel Olivares.