BULLETIN: Nevada Public Utilities Commission Staff Recommends Denial Of TelexFree’s Telecom Application; ‘Financial Statements . . . Cannot Be Relied Upon At This Time’

newtelexfreelogoBULLETIN: The staff of the Nevada Public Utilities Commission has recommended that TelexFree’s telecom application be denied, saying the firm filed the application and then almost immediately filed for bankruptcy protection.

Based on the bankruptcy filing, the financial information provided by TelexFree during the application process “cannot be relied upon at this time,” the PUC staff said.

Records in the state show that TelexFree applied to be a Nevada telecom provider on April 1, but filed for bankruptcy only 12 days later. Class-action litigants who’ve alleged racketeering at TelexFree have said “massive discrepancies” exist in the firm’s accounting.

Meanwhile, the Nevada PUC staff said it was aware TelexFree had been charged civilly with fraud by the U.S. Securities and Exchange Commission and that its assets had been frozen. At the same time, the staff said it was aware TelexFree also is the subject of state-level civil action by the Massachusetts Securities Division.

Moreover, TelexFree did not provide the required “biographies for its company officers or other relevant information” to verify assertions that it possesses the necessary technical capability to provide interexchange services in Nevada, the staff said.

When the staff tried to call a toll-free number provided by TelexFree to verify the company had a working customer-service operation, “the call did not go through and Staff was unable to reach a company representative.”

Among other things, TelexFree says this on its website (italics added):

TelexFREE has suspended all business activity while we address certain issues in the Bankruptcy Court and address pending proceedings by the SEC and other government agencies. Since we are not currently in a position to support our network, it is likely Customers will experience either interruption or discontinuation of service. Independent Associates and Promoters should not be representing TelexFree on a going forward basis absent approval of a new compensation plan by the Bankruptcy Court.

TelexFree also may face licensing challenges in Minnesota, Alabama and other states.

MSD has alleged TelexFree was a combined pyramid- and Ponzi scheme that gathered more than $1.2 billion. The firm’s bankruptcy petition initially was filed in Nevada, but a judge there transferred the case to Massachusetts, which the SEC described as the company’s nerve center.

Alleged TelexFree co-owners James Merrill and Carlos Wanzeler have been charged criminally in federal court in Massachusetts with wire-fraud conspiracy.

See April 21, 2014, PP Blog story.

 

 

 

 

About the Author

2 Responses to “BULLETIN: Nevada Public Utilities Commission Staff Recommends Denial Of TelexFree’s Telecom Application; ‘Financial Statements . . . Cannot Be Relied Upon At This Time’”

  1. Thats not the only state. Contact Mr. Isaacs directly for more details . I am sure he would share in light of the situation.

      (Quote)

  2. We are well aware of Mr. Isaacs’ apology to almost every PUC in the country.

      (Quote)

Leave a Reply