Faith Sloan’s Alleged TelexFree Haul: $710,319

UPDATED 3:32 P.M. EDT U.S.A. Faith Sloan received $710,319 from the TelexFree Ponzi- and pyramid scheme, according to filings by TelexFree bankruptcy Trustee Stephen B. Darr.

Sloan, whose address was listed as Virginia Beach, Va., is a longtime Illinois HYIP huckster on Ponzi boards and social media. She and three other TelexFree promoters were charged in April 2014 with securities fraud by the SEC. The state of Illinois later barred her from the securities industry and warned her that violating the ban could result in a felony charge.

Her alleged TelexFree haul was not known at the time.

Darr, who has been investigating TelexFree for nearly two years, now wants to add Sloan and dozens of other alleged major winners as named defendants in a proposed class-action lawsuit filed in February that would return the winnings to the bankruptcy estate. Another proposed defendant is Randy Crosby, charged alongside Sloan by the SEC two years ago. His alleged haul, according to Darr, was $487,621.

An individual identified as Sonya Crosby at the same address received $541,450, according to Darr. She, too, has been named a proposed defendant in the class action.

As of April 4, no adequate class representative had been found, Darr advised Chief Bankruptcy Judge Melvin S. Hoffman of the District of Massachusetts.

Sloan previously had complained that the SEC was picking on her, given that others in TelexFree had received more from the scheme and were not charged by the agency. As investigations evolve, however, the SEC sometimes files amended complaints or brings individual actions against defendants not charged out of the gate.

Such as the case with HYIP huckster Matthew John Gagnon in 2010. He also was sued by a court-appointed receiver and charged criminally by the U.S. Secret Service.

Alleged Zeek Rewards’ winner Trudy Gilmond wasn’t originally charged by the SEC. But as the probe continued, Gilmond was sued by both the agency and the receiver.

Zeek receiver Kenneth D. Bell has expressed concerns about promoters moving from one fraud scheme to another. In March, SEC Enforcement Director Andrew Ceresney commented on the “whack-a-mole” nature of online pyramid schemes.

Sloan has not been charged criminally. On the civil side, she is defending against the action filed by the SEC and also is named a defendant in multiple TelexFree fraud actions brought by private plaintiffs. If Hoffman approves Darr’s motion to file an amended complaint naming Sloan a “winner,” it would open a new litigation front against her.

It is unclear if the SEC will name any additional TelexFree defendants.

Darr’s motion to amend the complaint to include Sloan and additional defendants is available on the Trustee’s website. The proposed complaint is included as Exhibit A.