FAITH SLOAN: Blame TelexFree, Merrill, Wanzeler, Labriola And Nehra, Not Me

Faith Sloan in a TelexFree promo. Source: YouTube

Faith Sloan in a TelexFree promo. Source: YouTube.

UPDATED 8:55 P.M. EDT U.S.A. Veteran HYIP huckster Faith Sloan told a federal judge presiding over the SEC’s TelexFree case that she is a victim of the company and was duped by TelexFree executives James Merrill, Carlos Wanzeler and Steve Labriola.

And, the former Noobing, Zeek Rewards and Profitable Sunrise pitchwoman asserted, she also was duped by MLM attorney Gerald Nehra, a lawyer for TelexFree.

Sloan was among four TelexFree promoters charged with fraud by the SEC. Four executives also were charged.

“Sloan believed what Defendants Carlos Wanzeler, James Merrill, Steve Labriola and their attorney, Gerald Nehra, had told her, until TelexFree continued to miss the deadlines for the launch of its new products, which were to be the foundation of TelexFree’s growing business going forward into 2014,” Sloan said in court filings through her attorney.

Those new products, Sloan said, included “MyFinancialAdvantagePlan,” “Mobile App,” “TelexCommerce” and “TelexMobile.”

Taking a swipe at Nehra, Sloan contended that she and fellow promoters were “excited” about TelexFree after Nehra “had stood on the stage and publicly announced that TelexFree was ‘on a solid legal ground’, because they were selling a real product.”

Nehra made the remark at a TelexFree rah-rah fest in Newport Beach, Calif., in July 2013, according to YouTube videos. The remarks followed a June 2013 action in Brazil in which certain TelexFree assets were frozen and new registrations were suspended, amid pyramid-scheme allegations.

Sloan did not say why she continued to promote TelexFree with serious pyramid allegations on the table, except to suggest that Nehra’s remarks paved the way for her to continue with TelexFree. Nor did Sloan say whether her experience promoting Noobing, Zeek and Profitable Sunrise provided her any clues that something could be amiss at TelexFree.

MLM attorney Gerald Nehra offering remarks about TelexFree; Source: YouTube.

MLM attorney Gerald Nehra offering remarks about TelexFree; Source: YouTube.

Sloan was not charged in the Noobing, Zeek and Profitable Sunrise cases. Regulators say Noobing, an HYIP that targeted people with hearing impairments, was attached to a government-grants swindle. It effectively was shut down by the FTC.

Zeek, meanwhile, was an $850 million pyramid- and Ponzi scheme, and Profitable Sunrise was a cross-border securities swindle effectively run by a ghost that potentially raked in tens of millions of dollars. Both “programs” collapsed after SEC actions.

In April 2014, the SEC described TelexFree as an epic, billion-dollar cross-border pyramid and Ponzi-swindle that engaged in securities fraud and the sale of unregistered securities. All four of the “programs” offered returns that bested Bernard Madoff on orders of between 20 and 70 to one on an annualized basis.

Regulators have been warning about HYIP schemes for years, saying they offer returns that are too good to be true and make cosmetic tweaks to dupe the masses.

Many such schemes proliferate because serial promoters turn blind eyes to obvious markers of fraud such as preposterous interest rates, a presence of a “program” on Ponzi-scheme forums, the presence of other serial fraud promoters and fractured relationships with payment vendors during the course of the fraud. The schemes pay commissions to unlicensed promoters to sell securities to recruits and typically have an illegal investment arm attached.

When a scheme collapses, serial promoters disingenuously point fingers of blame back at management. Though the blame is deserved, it ignores the promoters’ roles in driving dollars to scams.

Sloan also today accused Merrill and Labriola of threatening to boot her from the “program” after she made unflattering remarks about it — after she’d been in the “program” for a year or so and suddenly realized something was wrong at TelexFree.

“In response to her public complaints, Labriola, with the approval of the Defendant, Merrill, threatened to terminate Sloan’s relationship with TelexFree shortly before they filed for bankruptcy protection on April 13, 2014,” Sloan contended in a “verified” memorandum of law filed by her attorney. The document seeks to have the charges against Sloan dismissed.

From Sloan’s motion (italics added):

Sloan became a “promoter” of TelexFree early in 2013. Sloan attended public webinars (web-based seminars) along with thousands of other TelexFree “promoters”. During those webinars, Sloan was told by TelexFree leaders that they were growing a company based on remarkable new products such as the “MyFinancialAdvantagePlan” (MFA), “Mobile App” “TelexCommerce” and “TelexMobile”, which was built on the backbone of Sprint, Verizon, and T-Mobile. All these products were due to be launched during the last quarter of 2013. The Mobile App was touted as being on a par with “WhatsApp”, which had been purchased by Facebook for 19 billion dollars. Based on what she was told by her fellow Defendants, Sloan and her fellow “promoters” were excited about the future of TelexFree, especially after the companies’ lawyer, Gerald Nehra, had stood on the stage and publicly announced that TelexFree was “on a solid legal ground”, because they were selling a real product.

Sloan’s troubles aren’t limited to the SEC case. She’s also a defendant in at least three prospective class-action lawsuits that allege fraud and racketeering.

Nehra is accused in the class-action complaints of turning a blind eye to TelexFree’s fraud to line his own pockets and dupe the masses.

In the Legisi HYIP Ponzi case, HYIP figure Matthew John Gagnon tried a defense similar to Sloan’s defense in the SEC civil case. It didn’t work.

Gagnon was held civilly liable and eventually was charged criminally for making a secret deal with Legisi to promote its scam, which had payouts similar to TelexFree, Noobing, Zeek and Profitable Sunrise. He was sentenced to five years in federal prison.

Like the criminal side of the TelexFree case, the Legisi case was brought after an undercover investigation.

NOTE: Our thanks to the ASD Updates Blog.

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11 Responses to “FAITH SLOAN: Blame TelexFree, Merrill, Wanzeler, Labriola And Nehra, Not Me”

  1. From BehindMLM.com: “Sloan files “I knew nothing!” Motion to Dismiss”

    http://behindmlm.com/companies/telexfree/sloan-files-i-knew-nothing-motion-to-dismiss/#more-18131

    Patrick

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  2. She’s not the only one who has filed the Sgt Schultz defense claim. She now joins De La Rosa and Crosby in the Sgt Schultz defense claim.

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  3. people with their scamming background really shouldn’t poke the bear.

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  4. Maybe Sloan’s lawyer need to look up “justifiable reliance” (i.e. due diligence).

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  5. But, Faith, who do we blame for Cell-C Fund? And whose at fault in TVI Express, Royal Cruise Matrix, Millionaire Cycler, JSS Tripler and JSS Tripler II, EZ Wealth Solution, Club Asteria?
    Tell me Faith, you proclaim on your CV
    Masters of Business Administration (MBA) Finance, Argosy University, Dallas,TX – 2008-2009
    Master of Science(MS) Systems Management, Concentration: MIS, University of Southern California (USC) – 1991
    Bachelor of Science(BS) Quantitative Methods, Concentration: Statistics, University of Illinois at Chicago (UIC) – 1983

    How can someone with degree in Q-Methods and an MBA in Finance possibly be so obtuse as to not detect some smidgen of implausibility in Profitable Sunrise, Zeek Rewards, Affordable Affiliates, HCI, Imperia, Oceanside (one and two) ASD Cash Generator, Noobing, were you in PIPS? Hell, did you buy postal coupons from Charles Ponzi himself?

    You brag about what a business expert you are, you have led untold thousands into losing money in these programs, you have pimped them at African American Business ROundtables at the University of Chicago, at your mother’s church and at countless seminars and rally like meetings around the world. Typing in your name and “scam” to a search engine generates more hits than typing the name of the CEO of General Motors (it does, try it) and now you say…

    wait for it…..

    “I didn’t know it was a scam!” ????

    I am speechless….

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  6. okay, but admit, you DID look, because it was as plausible as any “program” she’s pimped…:)

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  7. Gregg Evans: Hell, did you buy postal coupons from Charles Ponzi himself?

    This question deserves special recognition as an instant classic. In terms of putting folks “right there” when distilling bizarre incongruities to their essence, it ranks alongside d_b’s long-ago assertion that some of the HYIP pimps describe severed limbs as merely flesh wounds.

    Memory Lane:

    http://patrickpretty.com/2009/06/30/breaking-news-adviewglobal-cited-as-extension-of-adsurfdaily-in-rico-complaint-against-andy-bowdoin/comment-page-1/#comment-4275

    Keen insight, Gregg. Thanks for sharing it.

    Patrick

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  8. On an historical note, long after Ponzi was sent to prison, he had many defenders much like programs today, who railed against the government for shutting down his money making schemes. For several years after his collapse scams were marketed in US cities as “genuine Ponzi Business Methods”

    Some things never change.

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  9. Gregg Evans: you have led untold thousands into losing money in these programs,

    And, most importantly, accepted money for doing so.

    By her own actions, Sloan has moved herself into an entirely different category than someone who has just passed on a tip.

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  10. Carlo Ponzi was not the first to use money circulation masked as investing. Wiki says he ‘was probably inspired by scheme of William F. Miller, a Brooklyn bookkeeper who in 1899 used the same scheme to take in $1 million’.

    Carlo Ponzi was remembered because of the much bigger scale his schemes were. His first was called the ‘Securities Exchange Company’. Ponzi’s rapid rise naturally drew suspicion. When a Boston financial writer suggested there was no way Ponzi could legally deliver such high returns in a short period of time, Ponzi sued for libel and won $500,000 in damages

    I wonder had Miller’s schemes been much bigger, such things would be known as ‘Miller schemes’ instead of Ponzi schemes.

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