The new receiver for ZeekRewards.com has agreed to sell a set of judgments in the defunct Lexington Ponzi scheme for $10.3 million to a debt buyer and collector.

The decision by receiver Matthew Orso moves the legal case that began in August 2012 a step closer to its conclusion. The agreement was reached July 3 and posted Friday.

Big Sky Research Bureau Inc. of Boise, Idaho, could acquire a total of 6,638 judgments against ZeekRewards net winners worth a combined $178.6 million. Orso asked for a 21-day upset bid period in which a debt-collection group could bid more than Big Sky.

Former receiver Kenneth Bell defined the net winners in ZeekRewards as those participants who had a net gain of at least $1,000. He said there are about 9,400 net winners worldwide. He resigned as receiver as part of being named in May as a federal judge in the Western District of North Carolina.

ZeekRewards operated from January 2011 to Aug. 17, 2012 with global participation. At $939 million and at least 2.2 million customers, ZeekRewards was one of the largest Ponzi schemes in U.S. history, federal prosecutors said.

As of June 30, 2018, Bell had recovered $374.8 million and disbursed $344.9 million to eligible victims for a nearly 80% victim-reimbursement rate.

Of that amount, $18.1 million has come from 2,514 net winners as of June 30. That represents 44.2% of their collective $40.98 million in winnings.

Orso served as Bell’s counsel in the ZeekRewards case and had been responsible for the quarterly legal updates. Bell said in December 2017 he would pursue court permission to sell the net-winner judgments to debt-collection firms.

“Since beginning my term as successor receiver (in May), I have continued the analysis of how to best monetize the judgments we have obtained to date in the net-winner class action,” Orso said.

“The options were to either sell these judgments in a lump sum to obtain funds to pay to the victims of the Zeek scheme, or seek to collect the judgments and make a final distribution after such collection efforts have ceased.

“I believe that the sale of the judgments to Big Sky is in the best interests of the receivership estate.”

There are 100 remaining net winners who are disputing the claims against them.

For the 14-county region of the Triad and Northwest N.C., a combined $2.04 million was won by 73 net winners, along with a combined $701,703 in prejudgment interest. The interest is based on the N.C. statutory rate of 8% a year from the time ZeekRewards was shut down by federal regulators.

Orso said there are 100 domestic net winners “for whom we do not yet have a final judgment amount determined. These pending judgments were not included in the sale, and the receivership team is working to finalize those remaining judgments in the coming months.”

Prosecutors claimed ZeekRewards founder Paul Burks received at least $10.1 million from the scheme. In 2015, a federal jury found Burks guilty on four charges. In May 2017, he began serving three concurrent prison sentences of 14 years and eight months for his lead role in the scheme.

In March 2016, a federal judge approved a settlement in which NewBridge Bancorp was responsible for paying $10 million to the receivership if Bell agreed to release the bank from further claims.

Bell said he could have pursued up to $31 million from NewBridge on what he called “the high end” of a potential judgment.

On April 25, the Fourth Circuit Court of Appeals affirmed a lower court decision that allows the receivership to recover $13.2 million in assets from three traditional or online financial institutions — Payza, PaymentWorld and VictoriaBank of Moldova.

The receivership continues to work on recovering funds from foreign net winners.

Bell said $25 million remains in a reserve account that could be dispersed to victims who complete their required release and tax statements.

rcraver@wsjournal.com; 336-727-7376; @rcraverWSJ

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