Vemma critic Truth In Advertising has posted a transcript of the Sept. 15 battle in Arizona federal court between Vemma and the Federal Trade Commission over the preliminary injunction, asset freeze and appointment of a receiver. Vemma hopes to undo these things or at least to modify them in a way that would put the company back in business. (Link to transcript below.)
Truth In Advertising — TINA, for short — is a witness against Vemma and has been investigating the company since at least 2013. TINA says its mission is to empower consumers to protect themselves and one other from false advertising and deceptive marketing.
As a preliminary matter, the PP Blog observes that the transcript shatters the myth advanced by some Vemma supporters that the firm — alleged by the FTC last month to be a pyramid scheme — has been denied due process.
At least five attorneys appeared for Vemma. Two others appeared for Vemma CEO B.K. Boreyko, a charged FTC defendant. Still two others appeared for Tom Alkazin and his wife Bethany. (Tom is an alleged promoter charged by the FTC; Bethany is a relief defendant alleged by the agency to have profited from the scheme.)
Vemma cross-examined FTC witnesses and advanced witnesses of its own.
The transcript consists of 228 pages. The FTC claims that Vemma was a pyramid scheme through which Vemma told its own distributors they effectively could buy commissions. Vemma, meanwhile, accuses the FTC of gross overreach, orchestrating a sneak attack against a legitimate business and cherry-picking facts to make it appear as though the only appropriate way for the court to deal with the company is to kill it through the imposition of an asset freeze and the installation of a court-appointed receiver.
The judge is expected to issue a key order by 2 p.m. Arizona local time tomorrow.
2ND UPDATE 4:16 P.M. EDT U.S.A. Former Herbalife President’s Team member Anthony Powell is referenced in a report by the court-appointed receiver in the Vemma pyramid-scheme case filed by the FTC last month.
The mention is potentially embarrassing to the MLM trade, which has a reputation for recruiters dragging financially strapped prospects from scheme to scheme.
Powell, an MLM recruiter, joined Vemma after leaving Herbalife in 2013 and has been a subject of scorn by activist-investor and Herbalife short-seller Bill Ackman. Herbalife is under investigation by the FTC. Ackman has claimed since 2012 that Herbalife is a pyramid scheme.
With the FTC calling Vemma a pyramid scheme, Vemma receiver Robb Evans says a firm operated by Powell was the subject of at least 16 complaints to Vemma and that Vemma appears disingenuously to have tried to distance itself from Powell.
At least one such complaint about Global Pro Systems or GPS — the Powell firm — was submitted to the Arizona Attorney General, according to the report by Evans.
Trying to play dumb about Powell could constitute a material misrepresentation by Vemma, the receiver opines.
From the receiver’s report dated Sept. 4 (carriage returns added/formatting may not be precise):
The Temporary Receiver has made reference to GPS several times in this report. The Temporary Receiver located a document at the premises that stated GPS is operated by Anthony Powell. In a letter to the Arizona Attorney General dated August 29, 2013 wherein the Field Compliance Manager attempted to distance themselves from GPS by stating that, “Global Pro Systems is not owned or operated by Vemma Nutrition Company or BK Boreyko.”
Similar statements were made by the company in all of the responses sent to the Arizona Attorney General and the Arizona BBB regarding complaints that also involved GPS. While these statements on their face are true and may not be a misrepresentation, they are not completely forthcoming. In an email communication from the field compliance
manager to the BBB, the company stated, “Unfortunately, since Global Pro Systems (GPS) is not owned or operated by Vemma Nutrition Company or BK Boreyko, we do not have any control over their marketing tactics (emphasis added).”
The Temporary Receiver has determined that Anthony Powell is in fact a Star Ambassador with Vemma. Assuming Mr. Powell had to sign an Affiliate Agreement like every other Affiliate, he and his business practices would be subject to the same terms and conditions as any other Affiliate. The company made a material misrepresentation when they claimed that they had no control over GPS’ marketing tactics.
The Temporary Receiver also viewed a video posted by the company showing the defendant, Boreyko personally welcoming Anthony Powell to Vemma. Anthony Powell claims that he made millions with Herbalife and decided to bring his team to Vemma. The video indicated that Mr. Powell was a Star Ambassador. The Temporary Receiver is not aware of any disciplinary action taken against Mr. Powell or any of the other Affiliates associated with GPS. This would indicate that the most successful Affiliates are not subject to the same level of scrutiny as the less successful Affiliates.
UPDATED 6:44 P.M. EDT U.S.A. The Federal Trade Commission voted unanimously (5-0) to charge Vemma Nutrition Co. with operating a pyramid scheme. So much for the absurd proposition that Republicans on the commission are like hapless “Wheel of Fortune” contestants who couldn’t form the term “pyramid scheme” if spotted 12 of the 13 letters that comprise it.
Want to put yourself on the FTC radar? Develop a scheme. Target college students. Plant the seed that a higher education in an academic setting is a waste of time and perhaps even a conspiracy to keep students and their parents chained to college-loan debt. By all means make sure your CEO and most visible figure (Benson K. “B.K.” Boreyko) has a history such as this.
The PP Blog encourages readers to pay careful attention to the wording of today’s FTC announcement about the Vemma action. Make no mistake: the agency clearly is calling Vemma a “multilevel marketing company” that is operating a “pyramid scheme.” That’s important because it speaks directly to an absurd claim from practiced hucksters that no MLM can operate as a pyramid scheme because the two terms — MLM and pyramid scheme — are mutually exclusive.
Put another way: Not all MLM is legitimate.
Meanwhile, the FTC is seeking a permanent injunction that would prohibit Vemma from continuing to operate a pyramid scheme. As of Aug. 21, the company is in receivership. A federal judge has ordered an asset freeze.
Vemma is a member of the Direct Selling Association. DSA, notably, did not come out today with word daggers aimed at the heart of the FTC. Such a muted response by the DSA will hardly be a source of comfort to Vemma’s cheerleaders in the field.
“Earlier today, the Federal Trade Commission (FTC) announced action against Vemma Nutrition Company alleging violations of federal law, which, if true, would also constitute violations of DSA’s Code of Ethics.
“Every member of our Association, including Vemma, is required to abide by our Code as a condition of membership. All companies which use the direct selling model must uphold the highest ethical business standards, including polices that protect consumers and members of the salesforce against unrealistic earnings, lifestyle and product claims.
“The Code’s independent administrator will be alerted to the action and will review the FTC’s allegations against Vemma. If they are proven to have merit, the administrator may pursue punitive measures to ensure that appropriate standards of consumer protection are enforced.
“The allegations against Vemma have yet to be proven, and the company is entitled to due process of law. Any consumers or salespeople who have concerns regarding any DSA member, including Vemma, should contact the Code Administrator.”
“Consumer losses are inevitable because Vemma is an illegal pyramid scheme that rewards affiliates for recruiting participants rather than for selling products, the FTC alleges. The defendants provide affiliates little guidance for selling products, but instead teach them to give away products as samples when recruiting new participants. Vemma offers no meaningful discounts or incentives to encourage retail sales, according to the complaint.
“In addition to allegedly running an illegal pyramid scheme, the defendants are charged with making false earnings claims, failing to disclose that Vemma’s structure ensures that most people who join will not earn substantial income, and furnishing affiliates with false and misleading materials to recruit others.”
NOTE: This post originally was published June 30 at 8:41 p.m. EDT U.S.A. It was republished in this slot on July 2, July 20, July 29 and July 30.
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Daniel Fernandes Rojo Filho exits a gold Lamborghini in the area of Pine Street in Orlando, Fla. Source: DFRF promo on YouTube, c. March 2015.
UPDATED 8:41 A.M. EDT U.S.A. DFRF Enterprises’ and Platinum Trade Bancorp figure Daniel Fernandes Rojo Filho this morning is listed as an inmate at FDC Miami, a federal detention facility.
His inmate registration number is 08217-104 and he is listed in federal Bureau of Prison records as “Daniel F Rojo Filho.” Some apparent DFRF apologists reportedly have claimed in recent days that Filho, 47, had been released from federal custody and that the DFRF “program” alleged to have gathered nearly $23 million would resume business as usual.
Filho was arrested July 21 in Boca Raton, Fla., on a warrant from federal court in Massachusetts. He is accused of wire fraud in his alleged operation of DFRF, which the SEC has described as a pyramid- and Ponzi scheme that targeted “Spanish and Portuguese-speaking communities in Massachusetts, Florida, and elsewhere in the U.S.”
Daniel Fernandes Rojo Filho. Source: DFRF promo on YouTube.
Filho is expected to be taken to Massachusetts by the U.S. Marshals Service to face the charge there. It is unclear whether a bail sum has been set for the accused scammer. He is a citizen of Brazil, according to U.S. court filings.
Scheduling details are unknown. The FBI is leading the criminal probe, with the SEC heading up the civil investigation. DFRF is alleged to have gathered on the order of $23 million fraudulently, putting investors who may speak Spanish or Portuguese in harm’s way.
Records at the Federal Election Commission show a 2012 donation from Filho to the reelection campaign of President Obama. Those records list his then-employer as Platinum Trade Bancorp.
DFRF began selling “memberships” last year, the SEC said on July 2.
“DFRF promoted the investment opportunity through online videos in which Filho falsely claimed that the company had registered with the SEC and its stock would be publicly traded. As DFRF’s marketing reach widened, membership sales dramatically increased from under $100,000 in June 2014 to more than $4 million in March 2015 alone.”
Filho has piled up an assortment of expensive automobiles by siphoning millions of dollars from DFRF investors, according to the SEC. At least one of them is a gold Lamborghini that was seen cruising the streets of Boca Raton earlier this year.
UPDATED 6:55 A.M. EDT JULY 30 U.S.A. In the SEC’s civil case against DFRF Enterprises, a federal judge in Massachusetts has issued an order that freezes accounts at at least 13 banks and enjoins DFRF from soliciting or accepting any more money or opening any new accounts.
Dated July 28, the order by Chief U.S. District Judge Patti B. Saris also directs DFRF to “take such steps as are necessary to repatriate and deposit into the registry of the Court any and all funds or other assets that were obtained directly or indirectly from any investors in connection with the activities described in the Complaint and that are presently located outside of the United States.”
At the same time, the order prohibits DFRF from withdrawing, paying, dissipating, selling, encumbering, assigning and transferring assets wherever such assets may exist or diminishing their value “in any way.” The order further prohibits DFRF from charging on or drawing from any credit arrangements it may have.
In short, the order lays to waste claims from DFRF and certain individual promoters that the purported opportunity would simply conduct business outside the United States — despite the gravity of the pyramid- and Ponzi allegations the SEC filed last month and the arrest in Florida last week of accused operator Daniel Fernandes Rojo Filho.
The order applies to DFRF, Filho and six promoters charged by the SEC June 30. The case was announced July 2. The SEC’s case is ongoing, and the order is not limited to the 13 identified banks.
The 13 identified in the order are Bank of America, Central Florida Educators Federal Credit Union, Citibank, Citizens Bank, Eastern Bank, First Bank of Puerto Rico, JPMorgan Chase Bank, Regions Bank, Santander Bank, Suncoast Credit Union, SunTrust Bank, TD Bank and Wells Fargo Bank.
It was not immediately clear whether any of the banks halted DFRF-related account activity prior to the SEC action. The identities of the individual account-holders also was unclear.
In its complaint last month, the SEC tied Filho to TelexFree figure Sann Rodrigues, a defendant in the agency’s April 2014 civil case that alleged TelexFree was a massive Ponzi- and pyramid scheme.
Then visit the website of the remissions administrator in the EMG/Finanzas case. You will find that accounts linked to Filho were seized in that case and that a gold theme and expensive automobiles — elements in the DFRF case — also were elements in the EMG/Finanzas case.
You’ll also find that some of the money tied up in the EMG/Finanzas case also was linked to the narcotics business.
As was the case with TelexFree, the SEC said in court filings last month that some DFRF investors paid their sponsors directly, instead of paying DFRF.
“The amount of checks and cash that the individual defendants collected directly from investors is currently unknown,” the agency said last month.
Circuitous money flow is a core signature of an online securities scam. So are remarkable earnings tales, hotel pitchfests and sea cruises, all of which are elements in the TelexFree and DFRF cases.
The extremely pricy automobile is shown in at least two online videos that display the tag number and name of Prestige Imports/Lamborghini Miami in the rear license-plate holder. Filho is driving the car in a video that appears on YouTube. (Shown below.)
In a separate video that appears on Instagram, the car purportedly is being driven by Vic Beasley, the Georgia native and Clemson University (South Carolina) football standout who was the first-round pick of the Atlanta Falcons in this year’s NFL draft.
Neither the dealership nor Beasley has been accused of wrongdoing, and the car may be a marketing prop for the dealership on Biscayne Boulevard North in Miami Beach. The PP Blog left messages for comment today at both the dealership and the office of Five Star Athlete Management, the Atlanta-based agency that represents Beasley.
The Blog will include the comments if the calls are returned. The Blog also is awaiting the return of a call it made for comment to the office of U.S. Attorney Carmen Ortiz of the District of Massachusetts.
Both of the videos appear to have been made by happenstance by individuals who have no DFRF ties and simply shot footage when the eye-popping Lamborghini appeared when they were nearby.
The person who posted YouTube footage showing Filho in the car appears to be an automobile hobbyist and not to have recognized him at all. Separately, the person who shot the Instagram footage showing Beasley behind the wheel appears possibly to have recognized the football star, but the backdrop also is striking.
In the Beasley video, the car is seen driving at a slow speed across across a grassy area that includes a fire hydrant and low curb, making a right turn onto a side road, drifting through a stop sign and then making another right turn onto a different highway. A sign that briefly appears in the video appears to read “NW 13th St.”
There is a NW 13th Street in Miami, but the Blog could not conclusively determine that’s where the Instagram video was shot.
There also is a discussion thread about Beasley and the Lamborghini at the website of TigerNet, which covers topics pertaining to Clemson athletics. The first post is dated Feb. 18, 2015, weeks prior to the April 30 NFL draft. Another Feb. 18 post in the thread identifies the license number as DJBU10. Still another identifies it as a Florida tag.
As noted above, an apparent car hobbyist with a YouTube account (HAW.Photography) encountered the exceptionally flashy ride while shooting footage in Boca Raton. The YouTube upload date of this video is April 4, 2015. The headline is “GOLD Lamborghini Aventador LP700-4 in Boca Raton, Florida.” Most of the video appears to have been shot on U.S. Route 1, which passes through Boca Raton.
A female in the car shooting the video exclaims, “There’s another one!” Another female voice says, “A gold one!”
At one point the Lamborghini makes a right turn into a car wash. The videographers appear to be in a different traffic lane, but eventually make it into the same parking lot. When the video resumes in the parking lot, Filho is seen stepping out of the driver’s side door of the Lamborghini. A woman exits the vehicle from the passenger’s side door.
Whether either of the videos has evidentiary value in the Ponzi cases against Filho was not immediately clear. Federal prosecutors in Massachusetts described him yesterday as a fugitive who met arrest Tuesday while “coming out of a restaurant in Boca Raton.”
Filho is a citizen of Brazil. Prosecutors said Filho had evaded “arrest for more than two weeks” before being caught. The FBI had been seeking his arrest since June 25.
In a civil case against Filho announced by the SEC on July 2, the agency describes him as having spent $2.5 million to acquire “a fleet of luxury automobiles,” including a 2014 Rolls-Royce, a 2015 Lamborghini, a 2014 Lamborghini, a 2012 Ferrari, a 2006 Ferrari, a 2013 Mercedes, a 2014 Cadillac and a 2015 Cadillac.
The SEC has linked Filho to Sann Rodrigues, a figure in the epic TelexFree pyramid- and Ponzi scheme case. TelexFree may have gathered as much as $1.8 billion. DFRF’s haul currently is estimated at $15 million.
Officials at the SEC today Tweeted news of the Filho arrest.
Federal authorities arrest fugitive accused of running pyramid/Ponzi scheme in Massachusetts & Florida. http://t.co/T5kIJuDem1
UPDATED 3:33 P.M. EDT U.S.A. Herbalife International of America Inc. has sued Twitter Inc. in a reported bid to out the identity of a person posting on Twitter as @AfueraHerbaLIES and then potentially sue that person for defamation, Reuters and other media outlets are reporting.
The PP Blog this morning identified the action as case No. 2015-L-007373. It was filed July 20 in the Law Division of the Circuit Court of Cook County, Ill. Dentons US LLP is listed as counsel for Herbalife. The complaint is styled a “Petition for Discovery.” It was not immediately clear if Twitter had been served.
From Reuters (italics added):
Herbalife said it wants Twitter to provide information such as IP addresses and account details of the user who vilified the company and its management as “thieves, pill pushing frauds and bullies”.
The @AfueraHerbaLIES Twitter site appears to have posts in both Spanish and English and to position Herbalife as a pyramid scheme that rips off Latinos. One post — apparently from yesterday — features an image of a space alien puffing on a cigarette (or weed) while flipping Herbalife the bird.
Another — dated July 14 — is positioned as a “Media Alert.” It tells readers “El Chapo” was seen entering Herbalife’s corporate office.
“El Chapo” is the reputed druglord Joaquin Guzman Loera, who escaped from a prison in Mexico on July 11, prompting the U.S. Department of Justice to issue a statement on a Sunday that offered assistance to Mexico in recapturing him.
Herbalife sued six days after the “Media Alert” post, which included a superimposed image of Guzman in a frame that also included an image of Herbalife CEO Michael O. Johnson outside an Herbalife office building.
“Wonder what he could be doing there? $$$,” the Tweet inquired (and answered) about Guzman.
Billionaire businessman, MLM aficionado and GOP Presidential hopeful Donald Trump last week reportedly declared he’d kick Guzman’s ass. Trump reportedly later called the FBI, when a Twitter account purportedly linked to Guzman was used to threaten him.
Herbalife has been under fire from activist investor Bill Ackman, who has called the company a pyramid scheme that targets vulnerable population groups. (See Nov. 13, 2013, PP Blog editorial: Herbalife And Polarization In The Latino Community. Use the Blog’s search function for other references to Ackman and Herbalife.)
Herbalife has hired former government officials as it seeks to stem the tide of attacks against the company, which faces investigations in multiple jurisdictions. As it gets more and more entrenched in politics, the MLM firm, which was ripe for parody before Ackman produced a serious analysis in 2012, now may be particularly ripe.
If Trump, displeased with the state of immigration in America, drops out of the Presidential race, for example, might the Herbalife braintrust consider hiring him to bolster the relationship between the company and Latinos? (It might not be a good idea.)
Might the company be in the market to hire the “two 20-week old, 48-pound” Thanksgiving turkeys President Obama pardoned last year — simply because they were available and potentially useful as part of Washington’s revolving door? Could those grossly overweight birds have benefited from a month or two on Herbalife weight-loss shakes? Will there be “before” and “after” pictures if Herbalife takes them on?
An opinion piece at ValueWalk this afternoon illustrates some of the PR dangers Herbalife faces with its action aimed at @AfueraHerbaLIES, an account that appears to have only 93 followers.
NOTE ADDED AT 8:35 P.M. EDT U.S.A. See the first comment in the thread below, which includes a link to a report today in the Cook County Record. Herbalife appears to be bringing this action under Illinois Supreme Court Rule 224. The PP Blog has provided additional links below that contain information on Rule 224.
UPDATED 9:08 A.M. EDT JULY 21 U.S.A. Matthew G. Pruden, an attorney with the Tin Fulton Walker & Owen law firm, is a defense lawyer in the June 2015 criminal case against “Achieve Community” figure Kristine Louise Johnson (Kristi Johnson), according to the docket of the case.
Achieve, like Zeek, is alleged to have been a pyramid- and Ponzi scheme. Pruden was appointed by the court to represent Johnson, who has pleaded guilty to a charge of wire-fraud conspiracy.
Though bizarrely dismissed by some Zeek cheerleaders as country bumpkins in the early days after the SEC brought its civil case, Tin Fulton Walker & Owen is a distinguished law firm. (Read GlimDropper of the RealScam.com antiscam forum, posting at Quatloos, covering a 2012 Robert Craddock barb against the firm.)
Achieve’s Johnson pleaded guilty to wire-fraud conspiracy on June 30. She is free on bail. Though listed as a Colorado resident, she was charged criminally in the Western District of North Carolina — the same venue in which the criminal charges against Burks were filed.
Whether the cases against Burks and Johnson raise any potential conflicts for Tin Fulton Walker & Owen was not immediately clear.
Certain documents that appear to be related to Johnson’s passport have been sealed in the criminal action against her. Certain documents in the Zeek case also are sealed.
Pruden assisted Johnson when she appeared in court last month and pleaded guilty, according to documents in the case.
Daniel Fernandes Rojo Filho (left) and Jeffrey A. Feldman: Source: DFRF Enterprises’ pitch on YouTube.
As the PP Blog reported late yesterday, a federal warrant for the arrest of alleged DFRF Enterprises’ Ponzi- and pyramid figure Daniel Fernandes Rojo Filho has been issued. The FBI has brought a criminal charge of wire fraud against Filho, 47, a citizen of Brazil who has lived in the United States. The SEC lists an address for him in Winter Garden, Fla.
“He claims to be the U.S. representative of Accedium Insurance Company (“Accedium”), which is based in Barbados and London,” the SEC continued. “In July 2007, he filed for personal bankruptcy. In 1998, he was found guilty of fraud and forgery for having received $2.5 million in premiums from a rental car chain for insurance policies that he did not actually obtain. In 1996, the state of Florida revoked his license to sell insurance after he pleaded no contest to charges that he submitted false insurance claims for losses he supposedly suffered from Hurricane Andrew. He has made materially false and misleading statements about DFRF in public meetings and videos posted on the internet.”
Florida state records show that Feldman served time in a Florida prison between Dec. 28, 1998, and March 2, 2001, on charges of fraud and theft. The 2001 photo at the right, sourced from the Florida Department of Corrections, is his mugshot.
A June 24, 1993, story in the Lakeland Ledger reported that Florida state agents accused Feldman of faking “at least 15 clothing receipts from high-class stores for $76,661 and [turning] them in as part of his homeowner’s claim” after Hurricane Andrew.
One of the ways DFRF duped investors, according to both the SEC and the FBI, was to make them believe their money was insured through the Accedium firm. In an FBI affidavit, the agency described two alleged co-conspirators. One of them appears to be Feldman, referenced as “CC-2.”
From the FBI affidavit (italics added):
Bank records reviewed to date indicate that no money has been paid to any entity by the name of Accedium, the company that allegedly insured investments in DFRF. In a December 8, 2014 DFRF video, which was posted on the internet, an individual identified herein as Co-Conspirator 2 (“CC-2”) was identified as an “insurance executive,” and described as “the person responsible for the insurance company.” In a subsequent DFRF video, posted on the internet on December 10, 2014, FILHO represented that DFRF obtained its Accedium insurance through CC-2. CC-2’s license to sell insurance, however, was revoked in 1996.
The screen shot at the top of this story showing Filho and Feldman is from a YouTube video dated Dec. 8, 2014.
10th Update 10 a.m. EDT July 14 U.S.A. Daniel Fernandes Rojo Filho, the alleged operator of the $15 million DFRF Enterprises LLC Ponzi- and pyramid scheme sued civilly by the SEC in late June, has been charged criminally with wire fraud and is wanted by the FBI. An arrest warrant has been issued.
Court filings show that the FBI was conducting a parallel criminal probe while the SEC was conducting its civil probe. The FBI filed a criminal complaint under seal on June 25, about five days before the SEC filed its civil complaint under seal.
The SEC announced its civil action on July 2. The complaint tied TelexFree Ponzi- and pyramid figure Sann Rodrigues to Filho. In terms of victims, TelexFree may be the largest Ponzi- and pyramid scheme in U.S. history. Having potentially gathered $1.8 billion, TelexFree may be among the largest Ponzi schemes of all time.
Filho, like Rodrigues, is a citizen of Brazil. Both men have used addresses in Massachusetts and Florida.
Federal prosecutors from the office of U.S. Attorney Carmen M. Ortiz of the District of Massachusetts moved to unseal the criminal complaint on July 8. U.S. Magistrate Judge Jennifer C. Boal lifted the seal on the same day, making the wire-fraud complaint and arrest warrant against Filho a public record.
In a July 10 filing, an SEC investigator said this (italics added):
“I have had several conversations with an FBI agent involved in the investigation and the recently-filed criminal proceeding against defendant Filho. I have been informed that the FBI has been unable to execute the arrest warrant issued for defendant Filho in this matter and that the FBI currently considers defendant Filho a fugitive. (A process server retained by the Commission has made several unsuccessful attempts to serve Filho at his residence.) I have been informed that the FBI is actively searching for Filho and has initiated a border watch.”
Filho is 47 and has an address in Orlando, Fla., according to an FBI affidavit. The SEC complaint gives his place of residence as Winter Garden, Fla., which Wikipedia says is 14 miles west of Orlando in Orange County.
The FBI affidavit alleges the FBI has received complaints about him from multiple individuals and that Filho has at least two co-conspirators.
At the same time, the affidavit alleges that DFRF opened “at least 19 bank accounts at different financial institutions” since 2014 and that Filho “is a signatory” on 17 of the 19 accounts.
Much of the FBI information is similar to the SEC’s allegations against Filho.
From the FBI affidavit (italics added):
Among other things, FILHO and others acting at his direction falsely represented that DFRF owned and operated gold mines in Africa and South America, that any investors’ money was 100% insured, and investors could withdraw their principal investments at any time. FILHO never invested the money as promised; instead, FILHO used the money for other purposes, including his own personal and other business expenses.
In its complaint last month, the SEC alleged that, “[s]ince June 2014, he has siphoned more than $6 million out of DFRF — approximately 40% of the total received from investors. This includes more than $1.8 million in cash withdrawals, approximately $1.8 million for personal expenses (including $500,000 for travel), and almost $2.5 million to acquire a fleet of luxury automobiles.”
The SEC further alleged that Filho caused more than $310,000 to flow to Rodrigues. Rodrigues, who once claimed to have hauled $3 million out of TelexFree, is not referenced in the FBI affidavit.
In December 2014, Filho issued a bad check for $10,000 to a DFRF investor, according to the FBI affidavit.
See PP Blog follow-up story dated July 14 here. The story discusses Jeffrey A. Feldman, one of Filho’s co-defendants in the SEC case. Feldman has an address in Boca Raton, Fla.
Vemma critic Truth In Advertising has posted a transcript of the Sept. 15 battle in Arizona federal court between Vemma and the Federal Trade Commission over the preliminary injunction, asset freeze and appointment of a receiver. Vemma hopes to undo these things or at least to modify them in a way that would put the company back in business. (Link to transcript below.)
