TelexFree Trustee Seeks Approval Of Settlement With PricewaterhouseCoopers

newtelexfreelogoBig Four accounting firm Pricewaterhouse Coopers posted more than $115,000 in fees from the TelexFree Ponzi/pyramid scheme and will pay it all back under the terms of a stipulated settlement with TelexFree Trustee Stephen B. Darr, according to court filings.

PwC admits no liability in the settlement, which requires the approval of Chief Bankruptcy Judge Melvin S. Hoffman of the District of Massachusetts.

In January 2014 — just three months before TelexFree collapsed in a pile of Ponzi rubble — the firm hired PwC to provide “tax consulting and tax structuring advice,” according to a stipulation filed by Darr and PwC.

PwC issued three invoices in the coming weeks, and TelexFree paid them all, according to the stipulation. These totaled $115,335.66. The document suggests TelexFree may have made a $50,000 payment to PwC in advance of the receipt of an invoice and in the final hours before the bankruptcy filing.

This invoice was dated April 15, 2014, but TelexFree paid it on April 11 of that year. Two days later, according to records, TelexFree filed for bankruptcy in Nevada.

Darr contended that payments made by TelexFree to PwC were preferential and thus recoverable. The trustee also “raised issues regarding the value of the services that were provided by PwC to TelexFree, LLC and whether such payments could be recovered as fraudulent transfers.”

Read the stipulation.

About the Author

Comments are closed.