Trustee Confirms TelexFree Did Not Own Building

Despite worldwide promos implying otherwise, TelexFree was neither the sole occupant nor owner of this Massachusetts building.

Despite worldwide promos implying otherwise, TelexFree was neither the sole occupant nor the owner of this Massachusetts building.

One of TelexFree’s alleged reality-distortion fields has been formally exposed.

Perhaps you saw the recruitment promos (both corporate and affiliate) that planted the seed TelexFree was the sole occupant of a large building in Marlborough, Mass.

Former President James Merrill was shown posing in front of the structure. A caption on TelexFree’s website read, “The Company HQ: United States.”

Using the building as a backdrop, one or more affiliates taped promos from the parking lot, creating the impression that TelexFree had a large physical presence in the United States.

And perhaps you noticed that the SEC viewed those promos as “materially false and misleading” because, as the agency put it in a May 2014 amended complaint (italics added):

(a) TelexFree, Inc. does not own or occupy the entire building; (b) TelexFree, Inc. originally shared a single suite (consisting of a receptionist, conference rooms, and cubicles) with many other companies; (c) only in December 2013 did TelexFree, Inc. move into its own suite in a portion of the first floor; and (d) TelexFree, LLC has no physical office at all, just a mailing address in Nevada. Despite being the company’s president, Merrill failed to take effective action to prevent or correct the misstatements.

In court filings in the TelexFree bankruptcy case today, the trustee confirmed that, in November 2013, TelexFree leased a first-floor office in the building (Suite 118) for $5,944 a month. The lease officially began on Jan. 1, 2014, and was set to run through March 2015.

Other records show TelexFree shared a second-floor office (Suite 200) in the same building with multiple companies. How much it paid for that office was not immediately clear.

What is clear is that Stephen B. Darr, the trustee, has negotiated the termination of the lease of the first-floor office, concluding he “has no continuing need for the Premise” and thus potentially saving the estate tens of thousands of dollars. The landlord has agreed to settle for a retention of a security deposit and certain furnishings and fixtures — and to let the trustee out of the lease.

As for the overall TelexFree morass?

“I’ve been involved in a lot of interesting cases,” Darr told the Wall Street Journal, in a Law Blog article published Aug. 11. “TelexFree is number one.”

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6 Responses to “Trustee Confirms TelexFree Did Not Own Building”

  1. There was also the shot of Merrill standing in front of the building with a Hummer behind him. Rented? or did someone just park it there and they snapped a shot?….Next, if I was Merrill’s lawyer I’d claim…”Hey if I take a picture of myself in front of the Disney castle ….doesn’t mean I’m saying I own it.” “It was just a nice back drop.” : )

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  2. Dorothy: There was also the shot of Merrill standing in front of the building with a Hummer behind him

    It’s widely believed that the Hummer belonged to Carlos Wanzeler.

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  3. It’s worth nothing that “suite 200” is actually the entire second floor, and is the “generic” suite number you get if you don’t lease one specific suite. In other words: virtual office. This is standard practice among virtual office providers.

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  4. I was invited to the initial office that the three hucksters shared. As I reported over a year ago, it was no bigger than a closet. They had shared access to a lunch room and confrence room. The Telex executives didn’t even spring for an office with a window. The “new” and “improved” office with a few cubicles and a reception desk and a couple of offices didn’t come in to being until the end of 2013.

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  5. all kinda shoots merrill’s claims of innocence.

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  6. Dorothy, most probably Wanzeler was the owner of that Hummer, not Merrill. Look for Wanzeler’s address on Google Maps and switch view to satellite photos. His address is 41 Mount Avenue Worcester, MA. You’ll see a Hummer H2 parked in front of the house, next to a red sports car. The Hummer is the exact same color as the one in Merrill’s photos. Notice also the two white bars on top of the car. Exactly the same model.

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