- Associated Press - Saturday, February 1, 2014

CHARLOTTE, N.C. (AP) - Dawn Wright Olivares was the high-profile face of a North Carolina online company that promised big returns on a small investment.

She’d tout ZeekRewards at public events, and promote the business in interviews, calling it a great way for “the “little guy” to make money.

“We’re a real company,” she said during an interview nearly two years ago, adding that her business took great pains to follow the law.

Now the 45-year-old Olivares, the company’s former chief operating officer and self-professed “Hippie Diva,” is pleading guilty to securities fraud conspiracy and tax evasion stemming from an $850 million Ponzi scheme.

She will appear in federal court Wednesday, along with her stepson, Daniel Olivares, 31, the company’s senior technology officer, who is pleading guilty to securities fraud conspiracy.

U.S. District Court spokeswoman Lia Bantavani said prosecutors couldn’t discuss details of the case because it’s an ongoing investigation.

Olivares‘ attorney Brian Cromwell also said he couldn’t discuss the case.

But Dawn Olivares and her stepson are the first to plead guilty to criminal charges in the massive scam. Each faces five years in prison and a $250,000 fine. As part of their plea agreements, they will pay full restitution to their victims, the amount to be determined by the court at sentencing.

Victims say there are still questions that haven’t been answered, including whether the company’s founder, Paul Burks of Lexington, N.C., will face charges.

Authorities say Burks - a former nursing home magician and country music disc jockey - was the mastermind of the scam, which attracted 1 million investors, including nearly 50,000 in North Carolina.

Burks created several online companies, including Zeekler.com, a penny auction site, and ZeekRewards, a business designed to drive traffic to the penny auction.

The Securities and Exchange Commission, which closed the operation on Aug. 17, 2012, accused Burks in a civil complaint of fraud. The SEC said the scheme used money from new investors to pay the earlier ones.

Investigators also say Burks, 66, siphoned millions for his personal use, but he has not been charged with a crime. He has agreed to pay a $4 million penalty and cooperate with a federal court-appointed receiver to recoup money.

Burks has told The Associated Press he couldn’t discuss details, but said he never told people to invest more money than they could afford.

While Burks launched the online ventures, it’s clear that Dawn Olivares played a major role in the fraud, according to documents.

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