Reporting Zeek: A story of talent, timing and truth

Here's a loaded question for you: Are you like me?

Well, heaven forbid on that one. What I meant to ask is, as the tale of  Zeek's alleged worldwide penny auction Ponzi/pyramid scheme unfolds, can you hardly wait for the next chapter of this surly saga to appear in The Dispatch?

You probably can't wait, and I think I know why. The subject matter is fascinating. It ropes us in. And because Zeek is headquartered right here in Lexington, it involves us, whether we were victims of the apparent scam or not. It's scandalous, it's rich, it's sad, it's engrossing. It's impossible to let go. It's our story.

And it's been extremely well-written and well-researched. That helps keep us interested, too. Despite how complicated the story has become, the local copy itself is clear, concise, informative and very, very readable. We can thank a young, personable, talented 23-year-old reporter for that.

Nash Dunn has covered the Zeek fiasco for The Dispatch.

A few months ago, Nash Dunn was working for The Observer News Enterprise, a five-day daily out of Newton-Conover in Catawba County. "I was a reporter, photographer, everything. It was a smaller staff, but it was a good starting point," said Dunn, who studied journalism at Appalachian State University where he worked the news beat for The Appalachian, the campus newspaper.

Then he arrived at The Dispatch, figuring to add to his résumé as a community reporter. Zeek, however, suddenly put him in a different realm. How did that story fall into his lap?

"About two months ago, right after I got here, I was driving home (he lives in Winston-Salem) and saw a line of people out the door at the building on Center Street," said Dunn. "At first, I thought maybe it was a homeless shelter or something like that.

"Then we'd gotten a few phone calls about what was going on," said Dunn. "So Chad (Killebrew, the executive editor of The Dispatch) and I sat down. I told him I wanted to go for it and see what it was all about.

"A few people tried to talk to me and get me into it," said Dunn. "But I guess I was suspicious of the company and what it was. And we just kind of started from there."

After a few weeks lag time to gather information and hone his work to crystal clarity, Dunn's centerpiece feature on Zeek (see here) appeared in The Dispatch on Thursday, Aug. 16. Events cascaded on top of each other after that. Later in the day, by sheer coincidence in timing, the North Carolina Attorney General's office confirmed that it was investigating Zeek. Shortly thereafter, seemingly within hours, the U.S. Security and Exchange Commission declared Zeek was an alleged Ponzi and a pyramid and shut the place down. Zeek CEO Paul Burks was fined $4 million by the SEC without admitting or denying guilt. The whole thing was stunning in how quickly it revealed itself in its online warp speed. The timing, from centerpiece story to Zeek closing its doors, was incredible.

"I knew they were being investigated," said Dunn, who added that he never expected events to turn as fast as they did.

And the impact was immediate. By the time Dunn came back to work the next day, he was inundated with emails and voice mails — mostly from assorted Zeek affiliates from around the world, wanting to know what was happening.

"I've probably gotten over a 1,000 emails and a 1,000 voice mails," said Dunn, who suddenly went from manning the community desk to become the paper's international desk. "That part has been something new to deal with."

Many of the out-of-state interviews that show up in Dunn's subsequent stories are from people who originally called the paper to glean information about what was happening to Zeek. They ended up being part of the story — as, indeed, they really were. It's just that now they were on the record.

And for the most part, Dunn said the feedback has been mostly positive. "I think most readers," said Dunn, "appreciate what we've done."

The scope of the scandal apparently has grown. It was first estimated that a million people worldwide were victims of the $600 million scheme. But the receiver has indicated that as many as two million could be involved. That's far more than the infamous Bernie Madoff affair from just three years ago, a $65 billion scheme that victimized mere thousands of people. This might turn out to be the largest Ponzi scheme ever by the sheer number of its victims.

As a journalist, Dunn feels the excitement of reporting an important story.

"When I first got into (the story), it was interesting," said Dunn, a native of Raleigh. "But once I learned everything, and once it kept unfolding, it's definitely exciting. You want to keep being first in reporting stuff — that's always motivation to keep going. I never thought I'd get as involved with it as I did, but it's definitely exciting."

This story will continue for a while. Some of us might eventually grow weary of it, as we sometimes do in our sometimes overloaded, overzealous and overwrought society. That would make it our loss if that should happen.

But for now, Dispatch readers have been treated to exceptional journalism by a pretty darn good writer of the news.

And that makes us lucky to have him here.

Reload Lexington

Maybe it's time to take a little break from Zeek, the alleged worldwide Ponzi/pyramid affair that somehow reached daylight when it climbed up and out of the Lexington refuse pile a few weeks ago and started breathing the same air that all the rest of us do.

I love this place. Best use ever of an old, once-forgotten building.

Maybe it's time to reflect on something good and decent about Lexington, if only for a moment. Just in case we've forgotten that about ourselves.

I'm talking about the Lexington Farmers' Market, which has become something of a looked-forward-to social event available to us all every Saturday morning, and to a lesser extent, Wednesday mornings, from May until October.

The thing has been in serious operation for about five or six years at the old (but beautifully renovated) Lexington freight depot on Salisbury Street. The place primarily offers fresh, in season vegetables, but also an assortment of bakery items, honey, blueberries, mushrooms, grass-fed and hormone-free cuts of meat, garden plants, and every now and then, scented soaps, painted pottery and uncommonly creative jewelry. Not bad when you consider these are the very items that not only help to sustain us, but humanize us, too. They help to give us balance and ballast as we make our way. All for reasonable prices.

The selection of fresh produce is nearly endless.

Aside from the neat stuff you can buy, there's also the anticipation of who you might see there. Yes, you'll likely bump into a neighbor or two. But you might also rub a shoulder with an acquaintance you haven't seen for a while, or even a classmate you haven't seen in years. Or perhaps an elected official — sometimes you can bend his ear while he's thumping a cantaloupe for ripeness.

Sometimes, you have to put conversations on hold as the 10:07 rumbles down the tracks less than a watermelon seed spit away. Boys and men wistfully eye the diesels as they rhythmically clack by. Women mostly keep shopping. It's like magic. All of it.

This probably isn't a great time to talk about the market. I mean, it's near the end of the season. Most of the seasonal produce is gone. I actually meant to blog about the market about a month or so ago but a few other things got in the way — like the heavy, distracting odor of Zeek.

On the other hand, maybe this is a great time to talk about the market after all: it's here where you can find fresh vegetables, fresh baked goods, fresh air. Ahh, yes. Fresh air.

Some just don't get it

On Sunday afternoon, my wife went to the laundromat next door to the Zeekler headquarters building on Center Street. She couldn't believe what she saw on the Zeek building's window

As we now know, Zeek, the penny auction that promised riches, has been shut down by the U.S. Securities and Exchange Commission as an alleged $600 million Ponzi/pyramid scheme that lured in perhaps as many as a million participants worldwide.

This message was posted at the Zeek HQ.

And yet, posted on the building's window, was a handwritten message on lime-green florescent posterboard with this message: "We forgive you. Please restructure and save our Dreams! (signed) Zeek affiliate."

Really?

In reading comments at the end of most online stories about Zeek's demise, the company's defenders have castigated just about everything and every government agency in sight, including the SEC.

Meanwhile, there's a willingness to forgive the very agency that takes their money, promises rewards with 1.5 percent daily interest that is funded mostly by its newest affiliates — the people most likely to be burned when the pyramid collapses.

Unbelievable. Zeek good. SEC (and therefore U.S. government) bad. Yikes.

Some folks, no doubt, were so enamored of the scheme that it's likely they even took out five-figure loans to buy into the program. But buy into what?

I'm trying not to be too hard on most of the people who bought into this. Several are my good friends and I hope they recoup their losses. This is, after all, a hard economy we're living in. The promise of a better financial future may have been too much to resist. I cannot fault what most likely is human nature.

But human nature sometimes includes fraud and deceit and that's where you have to be wary.

For an excellent analysis and overview of the whole sordid mess, see here. Checking the reader comments at the end of the Hub Pages review is interesting, too.

It's a sad story, indeed.

Sleek Zeek ends streak

I come into today's blog post with mixed emotions.

There's a part of me that is overjoyed that the mighty Zeek penny auction empire, headquartered right here in little ol' Lexington, has crumbled under its own weight (with a little help from the Security and Exchange Commission, the Federal Trade Commission, the FBI, the Better Business Bureau and the North Carolina Attorney General's Office).

On the other hand, a fair number of my friends, some of whom urged me to join in the apparently get-rich-quick program, were participants in what has allegedly turned out to be a massive global Ponzi-slash-pyramid scheme and stand to lose small to large amounts of money. (Some folks might get reimbursed for their losses from the receivership, but larger cash rewards recipients might suffer clawback, which really means payback. Don't spend your Zeek earnings yet.) I feel badly because I don't want my friends to be hurt, even though I do feel a need to suppress the urge to scold them and make them stand in a corner for an hour. Or a week. A Zeek week.

Massive? Zeek's assets were said to be something like $600 million, which is peanuts compared to financier Bernie Madoff's famous $65 billion theft back in 2009. But Zeek (where did that name come from anyway, and what does it mean?) reportedly involved more than a million people worldwide, making it perhaps the biggest encompassing Ponzi scheme ever, if not one of the largest.

Oh my. In the 35 years I've lived here, Lexington has been put on the national map by the kissing first grader (see here), former Sheriff Gerald Hege and his pink jail and Spider car, and now the world's biggest Ponzi scandal. Kinda brings a tear to the eye, doesn't it? Well, we do have the Barbecue Festival...

Let me say right here, before I go any further, that I did not join Zeek. I was told long ago that if something sounds too good to be true, it probably is. That old saw is going to be bounced around a lot in the next few weeks, as it should be because no adage has ever been worth more than it is now. In the list of maxims, it should be classified "1-A" right under the Golden Rule (which, curiously, seem somehow connected to each other right now).

The scheme allegedly designed by Zeek owner/operator Paul Burks is complicated. Even after reading about it in The Dispatch (see here), it's still a little beyond me. Which was another reason not to join. Complication, knot-tying, and misdirection are all Ponzi red flags. If you don't understand it, or even if you think you do, it's best not to join it. But a lot of people did.

(The Dispatch, of which I served as a sports writer/editor for 30 years, has done an outstanding job reporting this fiasco. Although it didn't break the story, once it was handed the ball it ran with it, moreso than any other media outlet in the Piedmont. Reporter Nash Dunn has been superlative and his writing has been crisp, extremely readable and informative. This goes way beyond what you expect from a small community newspaper. Well done, Dispatch).

While I feel badly for my friends who were involved, and a little embarrassed that this whole thing has been hatched right here in Davidson County, I am more than a little put off by the continued Zeek defenders who seem to think the program was untouchable. Just glance at all the reader comments at the end of nearly any online story about Zeek's troubles. Holy smokes.

When the NC AG first confirmed that Zeek was being investigated for fraud, many Zeekers welcomed this because surely the office would find Zeek to be legitimate. When the SEC stepped in and closed the doors, charging that it was a Ponzi and a pyramid, and that Burks allegedly skimmed millions for his personal use, the yammering began: the SEC is corrupt, the BBB is corrupt, your mother is corrupt, this is another instance of too much government intrusion and it's another government conspiracy to keep you from being wealthy, that Social Security and Medicare are Ponzi schemes and why not investigate them (SS is not, see here), ad nauseum. The Zeekers' arrogance is both amusing and disturbing.

Any pyramid scheme is destined to fall eventually. Some people will make money off them, but it's money coming from those following behind. Eventually, people do get hurt. The trick, I guess, is to know when it's a pyramid in the first place. That indicator usually happens when you're encouraged to bring in others behind you. Another clue is that if all the money to be made sounds too good to be true in the first place.

My corrupt mother told me this years ago. I'm glad I listened.

Loving the Olympics, sort of

Did you enjoy the Olympic Games?

I think I did.

But I had to catch myself a couple times — there were moments when I had to reel myself in and remember where I was and who I am.

Who I am, for example, is not a big follower of, say, water polo. This sport is kind of like soccer in a swimming pool, where a number of players  — not quite sure how many — bob around in about eight feet of water and where one team tries to zip a nerf ball (or the waterproof equivalent — surf ball?) past an opposing team's goalie while everybody treads water.

I don't guess there are any professional water polo leagues around, but I could be wrong. I may google this to find out, if I decide I really care.

Anyway, here I was the other day, not really a water polo fan, yelling at my television, hearing myself scream in ever increasing octaves that the United States women were getting jobbed when Australia was given a potential game-tying penalty shot with one second left to play. Australia made the shot and sent the game (match? scrum? flotsam?) into overtime.

I was crushed. Until I remembered who I am. So wait a minute. I'm getting riled up over water polo? Not in this life, brother. Are you kidding me?

And yet...

Then there's the equestrian events. Why don't they give the medals to the horses? Seems to me they are the real athletes here. Nevertheless, I spent at least a half hour watching dressage the other day before I remembered who I am and switched channels. Usually, the only time I'm aware of dressage is when my wife is getting ready for work and she needs me to button the back of her dress or help tie a back bow. You know. Dressage. I think it's why husbands were invented.

I wish somebody would give the astounding U. S. women's gymnastics team some elocution lessons, and particularly Aly Raisman. The post-performance interviews done in droning monotone were a little grating. Any why did they change their team nickname from the Fab Five to the less friendly Fierce Five? Something about not wanting to be confused with the University of Michigan's Fab Five basketball team from back in the early 1990s. To tell you the truth, I really don't think I was ever going to confuse Jalen Rose with Gabby Douglas in this lifetime. Oh well. Those wacky fierce somersaulters, God bless them.

Then, of course, there's U.S. champion swimmers Ryan Lochte and Michael Phelps telling the world that everybody pees in the pool (see here). Yikes. Upon hearing this confession, a friend of mine noted wryly, "No wonder they wear goggles." As for myself, I just figured that the whole thing gives new definition to the term "Olympic Gold."

You know, I spent two whole summers in my youth dumping bags of alum and opening containers of chlorine into a public swimming pool trying to get the pH factor just right because of pee-ers (not peers) like Phelps and Lochte. Sheesh.

To be sure, watching some of these sports that I never knew existed has been somewhat refreshing. There's admittedly a certain amount of pride in pulling for athletes from your country, and I guess that's why I can get riled up every quadrennial over whitewater kayaking or quadruple sculls without cox rowing. USA, USA, USA.

It's why I can't wait for the next winter Olympics so I can cheer for curling. Man, a broom and a stone. What's more basic than that?

But when the Olympics start trending toward rhythmic this and synchronized that, I'm a little lost, a little out of my element. Really? Waving ribbons and hula hoops is an Olympic sport, and baseball and softball are not? To my mind, rhythmic gymnastics and synchronized swimming seem a little more like choreography than actual mano a mano (or womano a womano) competition, but what do I know?

Not much, apparently.

Hey, I've enjoyed these Olympics. But I'm ready to move on.

Thank God the Little League World Series is underway.

To ressurect a mockingbird

It pains me to confess this, but...

I am 61 years old, and I just finished reading Harper Lee's "To Kill a Mockingbird." For the first time. Ever.

Shame on me.

I don't know why it took me this long. Last weekend, I was on a road trip with some buddies, and somehow in our conversations of Civil War, food, women, beer, wine, travel, politics, Olympics and sports, the book was mentioned. It's not that we're a particularly erudite group of guys, but every once in a while we'll stumble onto something unexpectedly satisfying and must tell others about it. I don't know, maybe it's just simple bragging. It's like hitting a horrible hook off the tee that somehow still bends into the fairway. Maybe it's simply a miracle.

Anyway, I revealed to the boys that I hadn't read the book. It had just never popped up in any of my high school summer reading lists. That was on Saturday. By Wednesday, I was in the library. I took it home. I took it to work. By Friday, I'd finished the book.

I'm still in awe. How in the world did I ever miss this one?

Back up a minute. I'd seen the movie a thousand times, so I knew the storyline. The movie also gave me the visuals on Atticus and Jem and Scout, on Tom Robinson and Bob Ewell. Nobody, and I mean absolutely nobody else, could ever be Atticus Finch other than Gregory Peck. Not Jimmy Stewart, not Henry Fonda, not anybody. This movie, this book, this author and these actors are where a moment in time embraces perfection.

So the movie did not ruin the book for me. Instead, to my mind, they enhance each other. This is rare (like the hook shot that finds the fairway).

I'm not about to give a book report 53 years after it's publication, but while I'm reading it, I'm wondering about Southern literature and Southern authors, and what makes them what they are.

I googled Harper Lee and discovered she never had published another novel again. Why would she — how could she — after winning the Pulitzer Prize for Mockingbird? I mean, what's left after that? And yet, that talent... I also learned she grew up in Monroeville, Ala., where her neighbor and schoolmate was Truman Capote (who was the model for Dill in her book). Are you kidding me? How does a small southern town (pop. 6800) offer two astounding authors?

Was Harper Lee courageous to write this novel? It first appeared in the hot embers of the Civil Rights movement. A white southern female uncovering our blemishes in dangerous times. Wow. This all adds to the intrigue of the book.

So what is it about great Southern literature? (You can specifically google that, too. See here.) What's the extra influence, the soul-crunching burden, the drama and the irony that bubbles to the surface in good southern writing? Race relations? The Civil War? The sometimes oppressive climate? The fried-food and kidney-stone diet? William Faulkner, Pat Conroy, John Grisham, Eudora Welty, Thomas Wolfe, Fannie Flagg, Walker Percy, Shelby Foote, James Dickey...we can go on forever. More importantly, perhaps, is what makes us read them?

I don't know. For now, like Scout in the courthouse, I'm prompted to stand up. Greatness is passin.'