ZeekRewards founder pleads not guilty to fraud charges in $850 million investment scam

Associated Press

A North Carolina man who prosecutors say masterminded an $850 million Internet-based Ponzi scheme is pleading not guilty to charges of wire and mail fraud, conspiracy and tax fraud.

Paul Burks appeared Thursday in federal court in Charlotte, where he was released on $25,000 bail.

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Burks was president of ZeekRewards and the online penny auction site Zeekler.com. The company was shut down by the U.S. Securities and Exchange Commission in 2012. Prosecutors say Burks and his conspirators had used the promise of massive profits to lure more than 1 million investors, including nearly 50,000 in North Carolina.

Authorities say Burks diverted more than $10 million to himself. The former nursing-home magician told The Associated Press last year he never asked people to invest more money than they could afford.