Two of the top leaders of ZeekRewards, a massive Ponzi scheme that bilked hundreds of thousands of investors worldwide, were sentenced to prison Tuesday in federal court in Charlotte.
Dawn Wright Olivares, 48, and her stepson Daniel Olivares, 34, both of Clarksville, Ark., will serve terms of 90 months and 24 months, respectively. The punishments were handed down by U.S. District Judge Max Cogburn. Both face restitution payments that could soar into the millions of dollars.
The pair had pleaded guilty to one count of investment fraud conspiracy. Dawn Olivares also pleaded guilty to tax fraud conspiracy.
She served as chief operations officer of ZeekRewards, a market scheme on penny auctions that promised investors up to 125 percent returns. Instead, prosecutors say, the scheme – one of the largest of its kind in U.S. history – victimized some 900,000 participants worldwide, including more than 50,000 in North Carolina and 1,500 in Charlotte. A court-appointed receiver in a related civil lawsuit hopes to recoup almost $600 million paid out in the scheme. Prosecutors say nine out of 10 investors lost money.
According to court documents, Dawn Olivares received about $7.2 million from victims. Daniel Olivares, a senior technology officer with Rex Venture Group, the Lexington, N.C., parent company of ZeekRewards, pocketed $3.1 million.
Documents say the pair conspired with Rex Ventures owner Paul Burks to promise investors wildly inflated returns, when in fact the money paid out came from the payments of new participants.
The length of Dawn Olivares’ sentence is notable, given that she cooperated with prosecutors in the case against Burks. In July, Burks was found guilty of wire and mail fraud and conspiracy. His sentencing before Cogburn will come at a later date when the former retirement home magician faces the likelihood of an even longer prison term than his top assistant.
The maximum penalties for his crimes include up to 65 years incarceration and a $1 million fine.