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Alleged TelexFree Winner Tries To Sue Trustee For ‘Emotional Distress’; Separately, U.S. Judge Asks Dominican Court For Assistance

It may be a first in MLM clawback cases.

Dwayne Jones, an alleged winner of more than $561,000 in the judicially declared TelexFree Ponzi- and pyramid scheme, is trying to sue Trustee Stephen B. Darr for “Emotional Distress and Anticipated Attorney & Court Costs.”

In a proposed defendant class-action, Darr sued Jones and dozens of other alleged winners earlier this year for return of their gains. Jones was sued at a New York address. Acting pro se, he appears to have responded to Darr’s adversary complaint filed in Massachusetts federal bankruptcy court with a kit pleading from Maryland federal bankruptcy court in which he denied he was a TelexFree winner, raised jurisdictional claims and asserted the emotional-distress counterclaim against Darr.

Darr responded on June 6, saying he “denies in full the sole allegation in the defendant’s Counterclaim, that the defendant is entitled to unspecified damages for emotional distress and anticipated attorney and court costs arising out of this litigation.”

The trustee also entered affirmative defenses.

Class-action cases filed by Darr against alleged TelexFree winners potentially affect nearly 100,000 participants globally who gained more from TelexFree than they paid in. The scheme allegedly created hundreds and hundreds of thousands of losers.

Chief U.S. Bankruptcy Judge Melvin S. Hoffman of Massachusetts is presiding over the cross-border TelexFree case and adversary proceedings.

On May 24, Hoffman asked judicial authorities in the Dominican Republic for assistance in serving process on more than a dozen clawback defendants located there.

Darr contends TelexFree generated more than $3 billion in illicit business worldwide and that winners must return their gains.

Kenneth D. Bell, the receiver in the Zeek Rewards case, also has brought clawback claims against alleged domestic and international winners in that scheme. Zeek is alleged to have gathered on the order of $897 million.

Jun 9, 2016
PAYZA TO ZEEK RECEIVER: Don’t Blame Us

Payza, an HYIP-friendly payment processor that recently bragged on Twitter about its attendance at an event for the teetering TrafficMonsoon scheme, has advised a federal judge that it is not responsible for millions of dollars that allegedly went missing in the Zeek Rewards’ scheme taken down by the SEC in 2012.

Zeek receiver Kenneth D. Bell alleged in February that Payza and an outfit known as Payment World “facilitated” the epic cross-border Zeek Ponzi- and pyramid scheme. The PP Blog reported on Feb. 21 that the money at issue — about $13.1 million — may have ended up in one or more collapsed Russian banks after being transferred out of VictoriaBank in Moldova.

Payza acknowledged it was a business partner with Payment World, but maintained the account in Moldova was Payment World’s alone and that it has sued Payment World for more than $20 million because it, too, had been ripped off.

In response to Bell, who is seeking a contempt sanction and to hold Payza jointly liable with Payment World and VictoriaBank for return of the cash, Payza says it never had “dominion and control” over the money and thus should not be held liable.

Payza, which operates out of Canada as part of a company known as MH Pillars of the United Kingdom, further contends with worked cooperatively and proactively with Bell and U.S. authorities tracking the money. The defense filing by Payza was docketed yesterday in the Western District of North Carolina and also claims Payza performed due diligence on Rex Venture Group, the operator of Zeek. The filing contained a declaration by MH Pillars Executive Vice President Firoz Patel.

In a May 15 Twitter post, Payza said Patel was a speaker at a May 15 event in New York for the Traffic Monsoon program.

Come meet #Payza Executive VP @Firoz_Patel_ who will be speaking on Saturday, May 15, at the Traffic Monsoon Event! https://t.co/zdjCB4wr6J

— Payza News (@Payzaofficial) May 13, 2016

The Tweet made no due-dilignce claims about Traffic Monsoon, which reportedly is under investigation by PayPal and has been blocked from a sum totaling on the order of $60 million.

NOTE: Our thanks to the ASD Updates Blog.

Also see TaraTalks site.

Jun 1, 2016
Sept. 26 Deadline Set For Filing TelexFree Claims; Claims Portal Opens As James Merrill Fights Evidence In Criminal Case

UPDATED 11:53 A.M. EDT U.S.A. Sept. 23, 2016: The claims deadline has been extended until Dec. 31, 2016, at 4:30 p.m. Prevailing Eastern Time. Claims must be filed through TelexFreeClaims.com. Our earlier story is below . . .

**____________**

TelexFree participants and others who may have a claim against the estate should read this important notice from bankruptcy Trustee Stephen B. Darr. It is styled “Notice of Deadline for Filing Electronic Proofs of Claim and Claims Procedures” and appeared on the docket yesterday.

The electronic claims portal has been established at TelexFreeClaims.com and is operational, according to Darr’s notice. The deadline to file claims is Sept. 26, 2016, at 4:30 p.m. prevailing Eastern time.

BMC Group Inc. is administering the electronic proof of claim (ePOC) form and its name appears on the TelexFree claims portal.

Chief Bankruptcy Judge Melvin S. Hoffman of the District of Massachusetts has ruled TelexFree a Ponzi- and pyramid scheme.

In a separate case, TelexFree principals James Merrill and Carlos Wanzeler were indicted in 2014 on charges of wire fraud and wire-fraud conspiracy. Wanzeler allegedly became an international fugitive by fleeing the United States for Brazil.

Merrill this month sought to suppress evidence obtained as a result of a search of TelexFree headquarters in Marlborough, Mass., on April 15, 2014, two days after TelexFree’s bankruptcy filing, according to defense court filings in the criminal case.

Through attorney Robert Goldstein, Merrill argued that the search by the U.S. Department of Homeland Security was “unconstitutionally overbroad and unparticularized” in that it targeted “all computers” and “all records.”

Among other things, agents seized a laptop computer that day from TelexFree “consultant” Joseph Craft, according to the defense. Merrill argues that Craft’s laptop and all other evidence seized that day should be excluded.

In 2014, the SEC alleged that Craft was TelexFree’s CFO and was in possession of nearly $38 million in TelexFree-related cashier’s checks on the date of the search.

As the PP Blog reported on April 17, 2014 (italics added):

“The Deputy Sheriff told Craft he could not take the laptop and bag and that these items would be subject to the search,” the SEC said in the affidavit. “[Homeland Security Investigations] Agents searched the bag and identified ten Wells Fargo Bank, N.A. cashier’s checks totaling $37,948,296.”

Nine of the checks were dated April 11, 2014, just two days before TelexFree petitioned for bankruptcy in Nevada, according to the SEC affidavit and other court filings.

The nine checks were “remitted to” James M. Merrill, TelexFree’s co-owner and former president. Of the nine, five were made out to TelexFree LLC “totaling $25,548,809, and one was made out to Katia B. Wanzeler,” believed to be the wife of TelexFree co-owner and treasurer Carlos Wanzeler,” the SEC asserted in the affidavit.

The Katia Wanzeler check was for the sum of $2,000,635, the SEC alleged.

A check dated April 3 was “remitted to” Carlos Wanzeler and made out to “TelexFree Dominicana SRL in the amount of $10,398,000,” the SEC alleged in the affidavit.

TelexFree Dominicana SRL’s relationship to TelexFree was not immediately clear.

On April 15, two days after the TelexFree bankruptcy filing and apparently just hours before the raid, Merrill “submitted an unsolicited order to sell $1,150,000 of his mutual fund holdings” and to have the money transferred to a bank in Massachusetts, the SEC said in the affidavit.

“Bank statements show that two companies controlled by Craft received more than $2,010,000 between November 19, 2013 and March 14, 2014,” the SEC said in its complaint.

NOTE: Our thanks to the ASD Updates Blog.

May 28, 2016
Alleged Zeek ‘Winner’ Repeatedly Invokes Fifth Amendment In Clawback Case

UPDATED 3:07 P.M. EDT U.S.A. Darren Miller, an alleged winner of more than $1.635 million in Zeek Rewards and one of the lead defendants in a civil class-action clawback lawsuit filed by Zeek receiver Kenneth D. Bell, repeatedly has invoked his Fifth Amendment right not to incriminate himself, according to new court filings by Miller.

In response to Bell’s 2014 clawback action in which the receiver seeks return of the winnings plus interest, Miller, of Coeur d’Alene, Idaho, also marked “sic” next to mentions of himself as a defendant. Bell is suing Miller and more than 9,000 alleged Zeek “winners.” The case is styled Bell v. Disner.

Miller appears to have invoked the Fifth Amendment 41 times in response to 41 inquiries from Bell — 14 questions and 27 requests for documents.

His response provides an overview of the sorts of questions Bell asked alleged “winners” through interrogatories. It also provides an overview of the type of documents sought from defendants by the receiver. Zeek was part of Rex Venture Group or RVG, alleged by the SEC and federal prosecutors to have been a North Carolina-based Ponzi- and pyramid scheme that gathered hundreds of millions of dollars before the SEC shut it down in August 2012.

The Zeek clawback litigation itself shows the perils of pushing MLM schemes authorities deem to be fraudulent. Not only is money received from a “program” at great risk of clawback, expensive and emotionally draining legal proceedings on multiple fronts may ensue. Some defendants even may fear criminal prosecution.

At the same time, the Zeek clawback actions may provide something of a preview of what’s in store for tens of thousands of TelexFree “winners” pursued by the trustee in that Massachusetts case for return of their gains. TelexFree also was an MLM scheme.

Pictured below is the first of 14 interrogatories advanced by Bell, according to Miller’s response:

Question 1 of the Zeek interrogatories.

As you can see above, Bell not only asked about Miller’s involvement, he also asked about the involvement of others, potentially including upline sponsors. Here’s how Miller answered Question 1 and 13 others. (Only minor variations such as the Interrogatory number were present.)

Darren Miller’s answer to the first Zeek interrogatory.

For years now, the SEC has expressed concern about scams spreading on social media. Bell also had a question about that — in this case, in Interrogatory 14 (as show below):

The Zeek receiver asked about social-media accounts. There has been a longtime concern about scams spreading on Facebook, Twitter, YouTube and other sites.

In the interrogatories, Bell wanted to know when an individual’s participation began and when it ended. The receiver also was interested in dates and sums and outcomes — such as when money was paid to Zeek and when money was received from the “program” and how it was spent or kept.

Individuals also were asked to name people who had information “related to your defenses or claims,” according to Miller’s response. Meanwhile, they were asked if they contended Zeek was not a Ponzi or pyramid scheme and to provide the names of individuals who could back up the claim.

Bell previously expressed concern that some MLMers were moving from one fraud scheme to another in serial fashion.

On the document front, Bell had 27 specific requests for production, according to Miller’s response. Here is how Miller answered a request to produce documents used “in connection with recruiting persons to participate” in Zeek.

Miller’s response to a request for document production by the receiver.

Miller’s response to the 26 other requests for documents was substantially similar.

Also see PP Blog editorial from July 1, 2014: On The War In Zeekland And HYIP Rabbit Holes.

NOTE: Our thanks to the ASD Updates Blog.

May 20, 2016
URGENT >> BULLETIN >> MOVING: TelexFree Trustee Sues MLM Attorney Gerald Nehra

URGENT >> BULLETIN >> MOVING: (6th Update 8 p.m. EDT U.S.A.) TelexFree Trustee Stephen B. Darr has sued MLM attorney Gerald Nehra and the Nehra and Waak law firm, alleging they were “actively involved” in promoting TelexFree’s Ponzi scheme and “duping” participants.

Nehra and the firm have asked for more time to respond to the April 1 complaint, saying through court filings that they “anticipated participation in criminal proceedings related to the case.”

Chief Bankruptcy Judge Melvin S. Hoffman extended the response deadline until June 1. The original deadline was May 2.

Whether Nehra or the firm considered themselves potential TelexFree criminal defendants was unclear in the response. TelexFree principals James Merrill and Carlos Wanzeler are the sole criminal defendants to date.

Separately, prosecutors in the Zeek Rewards’ criminal case against Paul Burks said in court filings in the Western District of North Carolina Monday that Nehra and law partner Richard Waak may be called as witnesses in the case against Burks.

Nehra and Waak have settled with Zeek receiver Kenneth D. Bell, who alleged they “encouraged investors to participate in the [Zeek] scheme by knowingly allowing their names to be used in providing a false façade of legality and legitimacy and gave improper legal advice that allowed the scheme to continue far longer than it would have without the Defendants’ support.”

Darr wants Nehra and the firm to return all legal fees paid to them by TelexFree between May 2012 and April 2014 — about $24,000. Hoffman has ruled TelexFree a Ponzi- and pyramid scheme, and Darr contends neither Nehra nor the firm provided any “compensable advice” during the two years they represented TelexFree.

The trustee further contends that Nehra appeared in a YouTube video promoting TelexFree.

MLM attorney Gerald Nehra at a TelexFree rah-rah event in California in 2014. Source: YouTube.

Representing Zeek and TelexFree created incredible problems for the two lawyers. At least three of their MLM clients have been charged criminally and a mountain of litigation has been filed against Nehra and the firm, including actions by Darr, Bell and class-action attorneys.

In the settlement with Bell, Nehra and Waak agreed to a confession of judgment for $100 million. They contended “that they acted in good faith as legal counsel,” but now “acknowledge and agree that, based on their current knowledge, during the period they served as counsel RVG in fact operated an unlawful Ponzi an pyramid scheme involving an unregistered investment contract that caused hundreds of millions of dollars in losses to innocent victims of the scheme,” according to filings from Bell.

Government attorneys handing the Burks’ criminal case quoted the settlement language in their May 2 filing. RVG, or Rex Venture Group, was the operator of Zeek.

Zeek and TelexFree combined allegedly gathered on the order of $3.9 billion while creating hundreds and hundreds of thousands of victims globally.

A TelexFree video featuring Nehra appeared on YouTube in August 2013, according to Darr’s complaint. That’s two months after authorities in Brazil called TelexFree a pyramid scheme.

Also in August 2013, MLM attorney Jeffrey Babener advised TelexFree that it was operating a pyramid scheme, Darr alleged in September 2014.

TelexFree nevertheless continued to gather money until it collapsed in bankruptcy in April 2014, Darr alleged. The last payment to Nehra and the Nehra and Waak firm was made on April 3, 2014, just 10 days before the implosion, according to Darr.

Read Darr’s complaint against Nehra and the firm.

NOTE: Our thanks to the ASD Updates Blog.

May 18, 2016
DEVELOPING STORY: Phil Ming Xu Of WCM777 May Be Under Arrest In China

UPDATED 3:11 P.M. EDT U.S.A. A report dated today at ShanghaiDaily.com says an individual “surnamed Xu” and associated with “World Capital Market Inc.” is “now in custody” after a police action against a “pyramid scheme” in China.

The PP Blog has contacted the U.S. Securities and Exchange Commission to determine if the person reportedly under arrest in China is “Phil” Ming Xu of the World Capital Market/WCM777 scheme from 2014.

If the individual proves to be the Xu in the SEC case, it would mean that Xu left the United States sometime after being charged civilly by the SEC in March 2014 with a fraud alleged to have gathered tens of millions of dollars. It also potentially means the scheme, which allegedly operated under different names and resulted in the appointment of a receiver by a U.S. federal court, continued offshore after the U.S. action.

Phil Ming Xu resided in Temple City, Calif., the SEC said in 2014.

From Shanghai Daily (italics added):

Last June and August, police received alerts from the People’s Bank of China and the Guangdong branch of China Securities Regulatory Commission that the company and its owners were not qualified to conduct public financing, and a criminal investigation began.

A U.S. criminal probe into World Capital Market and related companies or figures also is believed to be under way.

The WCM777 story in the United States has been consistently bizarre. MLM hucksters, for example, pitched the “program” in churches and claimed the company had given loans for spectacular sums to some top American businesses.

There also was a claim a former CIA operative was involved, that the appearance of “blood moons” in the sky would provide investors guidance, that Ming Xu had acquired a company that produced “Innocence of Muslims,” a film that has been described as anti-Islamic and denigrating to the prophet Muhammad, that Ming Xu was an educator at a purported university known as the Joseph Global Institute.

UPDATE 2:03 P.M. EDT MAY 17 U.S.A. The SEC said today that it didn’t have anything on whether the Xu reportedly under arrest in China is the Xu from the agency’s March 2014 case.

May 16, 2016
Individual Linked To Payment Processor For ‘MyAdvertisingPays’ Scheme Listed In Panama Papers

Roger Alberto Santamaria Del Cid, an apparent nominee director for offshore companies who is listed as a corporate “subscriber” for VX Gateway in Panamanian business records, is referenced at least three times in the “Panama Papers.”

The PP Blog discovered the Del Cid listings today. On Monday, the International Consortium of Investigative Journalists made its database of Panama Papers listings searchable. (For additional background and reporting on the Panama Papers, visit ICIJ’s website.)

VX is a payment processor for the MyAdvertisingPays (MAPS) cross-border scheme that touts Anguilla registration after earlier operating from the U.S. state of Mississippi. MAPS purportedly pulled out of the United States last year, potentially leaving thousands of American affiliates expecting payouts holding the bag.

In April 2015, the PP Blog reported that MAPs, a purported “advertising” program similar to the AdSurfDaily Ponzi scheme, was trading on the name of President Obama after ASD previously had traded on the name of President George W. Bush. MAPS is known to have members in common with the judicially declared TelexFree Ponzi- and pyramid scheme, which also traded on the names of government officials.

It is somewhat common in the HYIP sphere for “programs” and their affiliates to drive traffic to schemes by suggesting the endorsement of government agencies or prominent government officials.

TelexFree, which may have generated $3 billion in illicit cross-border business, collapsed in 2014.

The Facebook site for the TaraTalksBlog, a MAPS critic, reported on May 7 that it had received “numerous reports that MAP has closed members accounts, with no redress, after members have requested payment withdrawals.”

In short, non-U.S. affiliates of MAPs also may be having trouble getting paid.

MAPS recently attempted unsuccessfully to sue TaraTalks. In 2012, a top official from the U.S. Department of Justice who was speaking at an event in Mexico warned about bogus libel lawsuits in the context of cross-border crime.

Then-Deputy U.S. Attorney General James Cole also said (bolding added):

“Because of the sophistication of the world economy, organized crime groups have developed an ability to exploit legitimate actors and their skills in order to further the criminal enterprises. For example, transnational organized criminal groups often rely on lawyers to facilitate illicit transactions. These lawyers create shell companies, open offshore bank accounts in the names of those shell companies, and launder criminal proceeds through trust accounts. Other lawyers working for organized crime figures bring frivolous libel cases against individuals who expose their criminal activities.”

As noted above, the Panama Papers database shows Del Cid’s name at least three times. On April 14, the PP Blog reported (italics added):

Del Cid’s name has appeared on the PP Blog a couple of times. On Feb. 8, 2011, the Blog reported that his name had appeared in court filings in a federal forfeiture case involving assets linked to the notorious EMG/Finanzas Forex scheme in the Middle District of Florida. (See Paragraph 10 of this affidavit by a Task Force investigator.)

Money from EMG/Finanzas was linked to the international narcotics trade. OpenCorporates lists del Cid here as a Finanzas “subscriber.” The site lists Tatiana Itzel Saldaöa Escobar as another Finanzas subscriber, and the same name appears alongside Del Cid as a VX subscriber.

As the PP Blog reported on Feb. 10, 2011, del Cid’s name also had appeared as the contact person for Perfect Money, another financial vendor purportedly operating from Panama. The SEC has linked Perfect Money to the incredibly toxic Imperia Invest IBC offshore scheme that targeted thousands of people with hearing impairments.

May 11, 2016
Certain International Zeek Members Due Distribution From Receiver Eligible To Receive Wire Transfer — But There Are Restrictions

In a May 6 announcement, Zeek Rewards’ receiver Kenneth D. Bell shares important news with international Zeek members who have been unable to cash checks from the U.S.-based receivership estate.

“Many foreign Affiliates have reported that they are unable to deposit or cash their distribution checks due to local banking fees and regulations. We filed a motion with the Court seeking a remedy for this problem so that all Affiliates, could receive their distributions,” Bell wrote.

“On April 27, 2016, the Court entered an Order that permits the Receiver to pay certain foreign Affiliates by wire transfer in US Dollars. I sought this relief because various foreign Affiliates that were eligible to receive distributions contacted me to alert me to the fact that they were unable to cash the physical checks denominated in US Dollars that they had received. This relief will allow me to pay those foreign Affiliates who complied with the Court mandated process, but were otherwise unable to recover on account of their Allowed Claim because of their location.

“If you are eligible to receive your distribution by wire transfer, my team will be sending you an email explaining how you may exercise the option to receive your distribution by wire transfer,” Bell continued. “However, if you are eligible to receive your distribution by wire transfer and you choose to do so, all of the fees and costs associated with the payment of the wire will be deducted from your Distribution (including without limitation the fees and costs associated with the sending of the wire by the estate, the receiving of the wire transfer by your bank, any currency conversion fee associated with converting the wire transfer from US Dollars to your local currency, any bank charges, and any canceled check fees incurred on account of any uncashed check which was previously issued to you. In addition, you agree to pay any costs associated with canceling uncashed checks previously issued to you). If you request a wire transfer and it is determined that the cost of the transfer will be greater than your Distribution, your Distribution will be sent by check.

“In order to receive the wire transfer, you must submit all of the requested banking information via the Claim Portal. You must also give the estate a release in regard to any misdirected wire transfer caused by the entry of any incorrect banking information.

“Wire payments will follow the same schedule as check Distributions and will not be made until the Release and OFAC have been submitted,” Bell wrote.

Bell also announced that he will ask Senior U.S. District Judge Graham C. Mullen “this summer” for an order against more than 9,000 alleged Zeek winners sued in a class-action case for the return of their winnings.

“We remain confident of success in that litigation, and that it will result in the collection of tens of millions of dollars for distribution to qualified claimants,” Bell wrote.

The receiver also expressed hope that litigation against Payza, Payment World and Victoria Bank will conclude this summer and result in a recovery for the estate. (See Feb. 21, 2016, PP Blog Special Report that questions whether some of the Zeek money ended up in one or more collapsed Russian Banks after being transferred from Moldova.)

“The bottom line is that we expect additional recovery of tens of millions of dollars for distribution in this year or next,” Bell wrote. “I’m sorry I can’t be more precise; litigation is slow and uncertain. You now know as much as I do.”

Read Bell’s full statement, dated May 6, 2016, on the receivership website.

May 7, 2016
After FBI Probe, Ju Ding Inc. (Juding) Exposed As Ponzi, Feds Say; Wenxing Huang Arrested

From Twitter.

A fraudster who used “fancy cars and parties” to dupe investors has been arrested after an FBI investigation, said Eileen M. Decker, the top federal prosecutor in the Central District of California.

Wenxing Huang, 33, of San Gabriel, has been charged with money-laundering and wire fraud in an alleged Ponzi scheme that gathered at least $6.9 million. He operated a Brea-based entity known as Ju Ding Inc. Huang also is known as “Di Peng” and “Fatty,” prosecutors said.

At one point, Huang “orchestrated a Ju Ding holiday party . . . at the Long Beach Convention and Entertainment Center in which luxury items, including a Mercedes-Benz automobile were raffled off,” prosecutors said.

“Records from the facility show that the event for 2,000 people cost more than $180,000,” prosecutors said.

Ju Ding Inc. was known simply as “Juding” on Ponzi boards such as MoneyMakerGroup. The “program” also had a presence on social media such as Twitter, Facebook and YouTube. The scheme, prosecutors said, traded on false promises that investors’ “money would be used to invest in and develop technology based on graphene, which is a layer of pure carbon that is only one atom thick.”

In November 2013, BehindMLM.com reported it had observed potential links between Juding and WCM777, a scam exposed by state regulators and the SEC in 2014. WCM777 purported to be in the cloud-computing business.

A news release yesterday from Decker’s office on the Juding scheme did not reference WCM777, although the U.S. government is believed still to be investigating that “program.”

From a statement by Decker’s office (italics added):

As part of the scheme, Huang allegedly offered compensation to investors who recruited others, according to the complaint, which alleges that many investors received little, if any, return on their investments. However, approximately $2.2 million appears to have been returned to clients in what were essentially Ponzi payments.

Huang is charged with money laundering for allegedly using approximately $1.2 million in investor funds to purchase the Diamond Bar home, which has since been sold.

May 6, 2016
TelexFree’s Sann Rodrigues Pushing ‘WowApp’ For ‘Every Day Gains,’ Promo Says

Accused securities and immigration fraudster Sann Rodrigues of TelexFree now is pushing WowApp, according to this promo.

2ND UPDATE 2:22 P.M. EDT U.S.A. “WowApp,” which has a Facebook page that thanks the “deaf community” for joining, now is being pushed by TelexFree figure and alleged immigration fraudster Sann Rodrigues, according to a web promo.

WowApp says it is a communications platform. It further says it is based in Hong Kong and urges members to “Use your WowCoins to contribute to a cause of your choice or cash them out.”

WowCoins purportedly have a value of 1 U.S. cent.

A post pitching WowApp on the MoneyMakerGroup Ponzi forum claims “You Can Cashout To Paypal,BankWire Or CC / Donate To 2000 Charities In 110 Countries!”

“CEO Thomas C. Knobel Founder Nobel (company) Released WOWAPP!” the Oct. 30, 2015, MoneyMakerGroup post says.

WowApp is part of YouWowMe Limited of Hong Kong, according to its website.

From the WowApp Terms and Conditions (italics added):

In an effort to earn your loyalty and repeat business, YouWowMe offers you a 10% reward back (“Self-Earnings”) on all of your paid calls using the Service. Immediately following completion of each paid call, the Self-Earnings are credited to your WowApp Account as “WowCoins”, our own special currency. Starting from 100 Wow’s (or its equivalent $1.00), you may use Self-Earnings which are credited to your YouWowMe Account to place additional paid calls. Because you have this option of using your “WowCoins” to make future paid calls using WowApp, for which you will receive an additional 10% reward, our maximum reward for these call offering is 11.11% (“max self-earnings”).

Translated by Google Translate from Portuguese to English, The WowApp promo credited to Rodrigues reads, “It’s free. It is simple and gives every day gains! This application works better than whatapp and the coolest is that it generates every day gains. I believe this is the future. Free things that generate in earnings. USE EVERY DAY!”

Rodrigues has a history of hitching his wagon to “programs” that pitch communications devices.

The SEC, which charged Rodrigues with securities fraud in the TelexFree Ponzi- and pyramid case in 2014 and later linked him to alleged DFRF Enterprises Ponzi-schemer Daniel Fernandes Rojo Filho, did not respond immediately to a request for comment. (Update 2:04 p.m. The SEC declined to comment.)

Rodrigues also is charged criminally in a separate case that alleges he engaged in visa fraud to enter the United States from his native Brazil.

NOTE: Our thanks to a reader.

May 6, 2016
At Least 24 International TelexFree ‘Winners’ Allegedly Received More Than $1 Million Each

On April 20, the PP Blog reported that TelexFree Trustee Stephen B. Darr had proposed to add dozens of U.S. defendants to a class-action lawsuit that seeks the return of gains from alleged “winners” in the judicially declared Ponzi- and pyramid scheme.

Filings docketed on April 22 show that Darr also is seeking to add defendants to a class-action case against alleged international winners. Among other things, the filings show that at least 24 alleged TelexFree winners from outside the United States received at least $1 million each. Scores of others also allegedly received large sums of less than $1 million.

At least 10 people, for instance, allegedly received more than $900,000 each, but less than $1 million.

Residents of Portugal, China, Spain, Colombia, Dominican Republic, Mexico, United Kingdom, Canada, Peru and Ecuador are referenced on the list of alleged international winners.

As the PP Blog reported in January 2016, the class-actions could affect tens of thousands of alleged winners globally because the named winners effectively are stand-ins for unnamed ones. Rulings against the named winners could apply to the entire defendant class of about 93,000 individuals alleged to have received more from TelexFree than they paid in.

Hundreds and hundreds of thousands of people are believed to be TelexFree losers.

The U.S. Department of Homeland Security is actively involved in the criminal prosecutions of TelexFree figures James Merrill and Carlos Wanzeler, alleged by the United States to be an international fugitive.

May 5, 2016