An Arkansas woman and her stepson pleaded guilty to masterminding what the government called an $850 million Ponzi scheme tied to the prospects of their penny auction website, ZeekRewards.com, which was shut down last year.
They reaped $11.5 million in illicit gains from the fraud, the U.S. said. Dawn Wright-Olivares and Dan Olivares were charged with investment fraud and tax fraud, according to court papers filed today by the U.S. attorney in Charlotte, North Carolina.
The U.S. Securities and Exchange Commission settled civil allegations against both individuals. The regulator alleged that the pair’s website was a scheme in which 98 percent of the revenue came not from sales but from new investors.
Dawn Wright-Olivares agreed to pay at least $8.2 million and Dan Olivares agreed to pay at least $3.3 million to settle the SEC claims, amounts that represented the entirety of their ill-gotten gains plus interest, according to the regulator.
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