TelexFree’s Name Appears In Federal Court Filings In The SEC’s Pyramid And Ponzi Case Against WCM777

TelexFree's name is referenced on Page 14 of Exhibit 3 in an SEC affidavit filed as part of the WCM777 pyramid- and Ponzi prosecution. Information in the exhibit was gleaned from the California Department of Business Oversight's investigation into WCM777.

TelexFree’s name is referenced on Page 14 of Exhibit 3 in an SEC affidavit filed as part of the WCM777 pyramid- and Ponzi prosecution. Information in the exhibit was gleaned from the California Department of Business Oversight’s investigation into WCM777. Red highlights by PP Blog.

UPDATED 8:51 P.M. EDT (U.S.A.) Already under investigation in Massachusetts, is TelexFree destined to encounter trouble from state regulators in California and perhaps the U.S. Securities and Exchange Commission (SEC)?

At least by Nov. 14, 2013, the California Department of Business Oversight (DBO) was asking questions about the TelexFree MLM scheme, according to filings in federal court. The filings, which appeared in affidavit form and included exhibits, were docketed March 27 after being submitted by the lead investigator in the SEC’s case against WCM777, an alleged $65 million Ponzi- and pyramid fraud.

Some pitchmen in HYIP schemes promote multiple purported opportunities simultaneously and use money from one scheme to join another, a situation that may put banks and payment processors in possession of tainted proceeds from interconnected and ongoing frauds. A federal judge has frozen at least 54 bank or vendor accounts linked to WCM777 or accused operator Phil Ming Xu.

California investigators asked Stanley Stephan Huntsman, who identified himself as a “spokesman-ambassador” for WCM777 with Xu as his “employer,” whether he had any “relationship” with “TelexFree,” according to the SEC filings.

It may be the first reference to TelexFree in a federal court filing, albeit one that is not a charging document. At a minimum, however, it demonstrates that both the California DBO and the SEC are aware of TelexFree and believe that the Massachusetts-based “program” has promoters in common with WCM777.

“I have no relationship with TelexFree,” Huntsman responded.

The SEC announced the WCM777 prosecution on March 28, one day after its lead WCM777 investigator submitted the documents and exhibits from California’s WCM777 probe. Huntsman was not named a defendant in the SEC’s WCM777 action.

WCM777 was targeted at Asians and Latinos, the SEC alleged.

In addition to identifying himself as a “spokesman-ambassador” for WCM777, Huntsman told California investigators that he “was required to read power points prepared by WCM, which was also displayed on the WCM website,” according to an SEC affidavit.

TelexFree is creating tensions in Massachusetts which, like California, banned WCM777.

NOTE: Thanks to the ASD Updates Blog.

 

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9 Responses to “TelexFree’s Name Appears In Federal Court Filings In The SEC’s Pyramid And Ponzi Case Against WCM777”

  1. Patrick,

    Where can I go to read this document?

    Thanks,

    LB

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  2. Telex is deff on the radar screen. Thank God!
    Thank you for all the time that you spend researching and writing your articles. I’m one reader that appreciates your hard work.
    Thank you Patrick

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  3. Dorothy: I’m one reader that appreciates your hard work.

    Thank you, Dorothy. Much appreciated.

    Patrick

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  4. LB: Where can I go to read this document?

    Hi LB,

    ASD Updates files website:

    https://sites.google.com/a/asdupdates.com/files-website/sec-v-wcm777

    Info in story above is from Doc 6 and Doc 6-3.

    Patrick

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  5. Patrick, do you have anything on lucrazon global?They are about to launch this event in California with some powerful figures. How can these people tag their names in something similar to Telexfree?

    Any input will be helpful!

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  6. Eddy: do you have anything on lucrazon global?

    I’d say caution is warranted.

    We’ve received some notes that members of the alleged $65 million WCM777 Ponzi- and pyramid scheme were trying to port downline members to Lucrazon and get them to buy in at $8,000:

    http://patrickpretty.com/2014/01/25/update-dallas-group-may-be-trying-to-port-wcm777-members-to-lucrazon/

    This potentially raises questions about the sale of unregistered securities and whether money from WCM777 and TelexFree has flowed into Lucrazon, given that WCM777 and TelexFree had members in common. And because Lucrazon also has a presence on the Ponzi boards, the offer is being presented to the HYIP crowd.

    Lucrazon members also might benefit from some research on Utah-based Merrick Bank, one of Lucrazon’s advertised vendors.

    I’m aware that Lucrazon is advertising appearances by Carlos Gutierrez, Mitt Romney and Vicente Fox at “the 2014 Lucrazon Global Celebration” confab in LA. (I’m not sure why Fox was given third billing. It seems he should have merited top billing, given that the other two distinguished men never served as President of a nation and Commander-in-Chief of its military.)

    It’s great, though, that all three men are champions of upstart commerce. But with the WCM777 stench still wafting around LA, they might be well advised to exercise prudence when posing for photographs. In WCM777, of course, Ming Xu made sure he got photographed with Al Gore and Steve Wozniak, something that must have been mortifying to both men once the SEC action became public.

    I’m also thinking that Lucrazon has a TelexFree- and WCM777-like approach to PR, given that it is promoting “Luxury Car Giveaways” at its LA confab and, on its website, is using a word long associated with the HYIP sphere — i.e., “payout.”

    The Lucrazon site even presents an asterisk: “*Payout details below.”

    Mind you, Lucrazon isn’t just giving away any old cars. No, it’s “luxury” cars — and this after some of the WCM777 folks now pitching Lucrazon were asking for $8,000 at a time. That is epically bad PR.

    One can only wonder whether folks chasing WCM777 losses plunked down that sum (or more OR less) at Lucrazon and whether any of it helped stimulate “Luxury Car Giveaways” and/or pay for speaking fees charged by distinguished politicians/business leaders.

    Patrick

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  7. Eddy: do you have anything on lucrazon global?

    You can get some confusing information from me.

    When I checked Alex Pitt (the founder of Lucrazon), I didn’t find ANY MLM background, only some payment processor / merchant service provider background. You can also look at comment #19 “John”.
    http://behindmlm.com/companies/lucrazon-global-review-ecommerce-revenue-share/#comment-197733

    I did however find an Alex Pitt blog showing him as a “True believer” in the network marketing idea, repeating some beginner level statements found among true believers.
    http://alexpitt.com/business-development/network-marketing

    I found some similar true believer ideas for Hector Barreto.

    There’s very little doubt that investment based MLM is illegal in the US. Their intentions might be good, but their actions are most likely illegal. “The road to hell is paved with good intentions”.

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