TelexFree Trustee Hopes Merrill’s Guilty Plea And Sentencing Will Spark More Claims; Darr Asks Judge To Extend Filing Deadline Until March
UPDATED DEC. 22, 2016: The court has extended the claims deadline until March 15, 2017. Earlier story below . . .
With the Dec. 31 filing deadline for TelexFree claims fast approaching, court-appointed Trustee Stephen B. Darr has asked the court to extend the deadline until March 15, 2017.
Chief Bankruptcy Judge Melvin S. Hoffman has scheduled a hearing Dec. 21 to consider the request.
Darr advised the judge yesterday that about 121,000 claims had been filed. He added that the guilty plea of TelexFree’s James Merrill, Merrill’s agreement with prosecutors to forfeit tens of millions of dollars and publicity surrounding Merrill’s sentencing set for March 2 and 3 might encourage more participants to file claims.
Hoffman already has granted one extension — from Sept. 26 until Dec. 31. The scheme, which the judge ruled a combined Ponzi- and pyramid, may have created hundreds and hundreds of thousands of victims worldwide.
As things stand now, the claims-filing deadline remains Dec. 31 at 4:30 p.m. Prevailing Eastern Time.
The process of making participants as whole as possible has been “extraordinarily complex,” Darr advised the judge.
Challenges have included the number of victims, the geographic dispersion of victims throughout the world, the magnitude of losses, language barriers and the complexity of TelexFree itself, Darr advised the judge.
Criminal prosecutors said in Merrill’s plea agreement that his role in the TelexFree scheme created at least $550 million in losses.
Codefendant Carlos Wanzeler fled to Brazil, prosecutors said.