Let’s begin by pointing out that Daniil Shoyfer and Scott Miller have not been charged by the SEC in its 2014 TelexFree action. There are asset freezes aplenty in that government-brought case, including freezes against alleged promoters Sann Rodrigues, Faith Sloan, Randy Crosby and Santiago De La Rosa.
The asset restraints imposed yesterday by U.S. District Judge Timothy S. Hillman against Shoyfer (of New York) and Miller (of Indiana) flow from an altogether different case: a proposed class-action brought by plaintiffs last year.
Indeed, private plaintiffs represented by private attorneys — as opposed to government plaintiffs represented by government attorneys — have now managed to persuade a judge to block the flow of funds alleged to be tainted by fraud.
This is horrible news if you’re a serial promoter of MLM fraud schemes or Ponzi-board “programs” because it demonstrates that the government no longer is your singular worry. Put another way, even if the SEC or some other agency “misses” you, aggressive class-action attorneys may not.
They even may be tracking you as you move from scheme to scheme — and, of course, agencies such as the SEC follow court filings in related actions closely.
Even though the private lawyers did not get everything they sought in yesterday’s order by Hillman, they got enough to seriously complicate the lives of their targets. Although the judge did not restrain assets with no nexus to the alleged $3 billion TelexFree Ponzi- and pyramid scheme, both Shoyfer and Miller now must make monthly financial reports to the court.
From the order:
“Each Individual Defendant shall file a statement of accounting with the Court, under seal, on the last day of each month by 5:00 p.m. EST, setting forth all monetary expenditures and the sale and/or transfer of all assets made in the prior month . . . To the extent that any Individual Defendant seeks to expend money or to sell, transfer dissipate, assign, pledge, alienate, encumber, diminish in value, or otherwise dispose of any funds or other assets which they would not be permitted to do under the terms of this Order, such defendant may file a motion with the Court setting forth, in detail the nature of the transaction.”
And, the judge continued, “The Individual Defendants may petition the Court to exempt from this Order any fund or other assets in any bank, brokerage or other financial institution accounts and any other assets held by of for the benefit of such defendant on the grounds that such assets are not traceable to monies received by him in connection with his involvement with TelexFree. The Individual Defendants shall submit detailed financial statements and/or other documentary evidence to establish the funds held or assets in question are funds or assets were acquired independently. The Individual Defendants shall also submit an accompanying affidavit signed under the pains and penalties of perjury attesting to the authenticity and truth of the evidence submitted in support of their motion to exempt. All filings made pursuant to this section shall be filed under seal. After reviewing the filing, the Court will determine whether notice to the Plaintiffs, discovery and/or a hearing will be required.”
So, under the terms of the order, it would appear that, if Shoyfer wants to keep any MAPS income that flowed to him on the grounds it did not originate with TelexFree, he would have to petition the court to do so.
Miller, known for telling a “Carlos Danger” joke to a TelexFree audience and pitching the program to Americans while it was under investigation in Brazil amid reports of threats against a judge and prosecutor, was part of an effort to solicit sums as high as $15,125 from TelexFree prospects. Viewers were told their $15,125 would return at least $1,100 a week for a year.
In restraining the assets of Miller and Shoyfer, Hillman found that the plaintiffs likely would prevail on the merits. Unlike Shoyfer. Miller did not seek to block the preliminary injunction.
But Hillman also cautioned the plaintiffs that more work was needed and that the “depiction of Shoyfer as a ‘Top Level Promoter’ who swindled TelexFree victims out of millions of dollars is, on the current record, nothing more than unsupported rhetoric.”
BULLETIN: (6th update 7:23 p.m. ET U.S.A.) Class-action lawyers pursuing claims against TelexFree promoters have called the My Advertising Pays (MAPS) “program” a Ponzi scheme and described MAPS promoter Simon Stepsys as a “Ponzi mogul.”
The case itself is not against MAPs. Even so, the lawyers now have made repeated references to MAPs and are lambasting the serial promotion of MLM fraud schemes. The newest reference to MAPS occurred in federal court filings in Massachusetts today. As the PP Blog reported last year, MAPS initially was mentioned in a proposed TelexFree-related class action filed in the Southern District of New York in December 2014.
Daniil Shoyfer, an alleged promoter of TelexFree, plowed nearly $9,000 into MAPS a month after TelexFree filed bankruptcy in April 2014, according to attorney Alexander D. Wall. Shoyfer promptly was heralded by Stepsys, Wall contended.
Stepsys, Wall alleged, “is an Internet Ponzi scheme mogul” currently promoting MAPS. He previously promoted the bizarre Banners Broker scheme that led to two arrests in Canada last month.
Moving from one fraud scheme to another is a serious problem in MLM.
A Stepsys-connected website includes “a paragraph, together with a photograph of Defendant Daniil Shoyfer, congratulating Mr. Shoyfer for reaching the ‘1200 Diamond level’ for his promotion of the MyAdvertisingPays scam,” Wall alleged.
“This webpage also indicates that in May 2014 – the month following TelexFree’s declaration of bankruptcy – Mr. Shoyfer purchased ‘177 Credit Packs’ from MyAdvertisingPays. Upon information and belief, as well as research I have performed, [a] MyAdvertisingPays ‘Credit Pack’ costs $49.99,” Wall alleged. “Thus, Mr. Shoyfer invested at least $8,848.23 in a second Ponzi scheme in the month after TelexFree’s bankruptcy filing.”
The class-action lawyers have been seeking a preliminary injunction against Shoyfer and an asset freeze that would prohibit dissipation of assets. Shoyfer has contended he believed TelexFree was legal and that there is a vendetta against him.
Now, a year later, a member of the TelexFree MLM scheme shut down by the SEC and other agencies last year is telling a federal judge that it appears TelexFree engaged in accounting fraud that caused him to pay taxes on income he never actually received.
Unlike Zeek’s Paul Burks and Dawn Wright-Olivares, alleged TelexFree operators James Merrill and Carlos Wanzeler have not been charged criminally with tax offenses. But the assertion by Shoyfer gives rise to questions about whether they and others could be as the federal probe of the enterprise continues. Merrill and Wanzeler currently face charges of wire fraud.
Shoyfer, through attorneys from two Boston law firms, says U.S. District Judge Timothy S. Hillman should not permit the plaintiffs to amend the complaint to make him the class-representative. He further contends that “TelexFree has engaged in what appears to be fraudulent accounting practices intending to show that it paid Mr. Shoyfer in excess of $750,000 – however this is simply false.”
“Although TelexFree credited Mr. Shoyfer with large amounts to his TelexFree account, he never withdrew or had access to the vast majority of these funds,” he contended through counsel.
Shoyfer did not identify who might have helped TelexFree hatch a bogus accounting scheme. The SEC, in 2014, charged former TelexFree CFO Joseph H. Craft of Boonville, Ind., with securities fraud. Craft is an accountant. In its civil complaint, the SEC alleged Craft “has been the chief financial officer of other multi-level marketing companies” in addition to his work for TelexFree.
From Shoyfer’s argument (italics added/light editing performed):
Mr. Shoyfer worked with TelexFree from March of 2013 through April of 2014 . . . Over the course of those thirteen months, Mr. Shoyfer received a total of $122,000 from TelexFree . . . However, Shoyfer also spent many thousands of dollars in expenses in order to make this money from TelexFree . . . Mr. Shoyfer estimates that he paid nearly $60,000 to TelexFree in order to be a part of the MLM (including dozens of purchases of the $1,425 AdCentral Family packages, . . . plus other expenses . . . Contrary to the allegations in the proposed amended complaint, Shoyfer never earned $300,000 per week . . . Mr. Shoyfer cannot afford to be the class representative in this lawsuit: it would almost certainly bankrupt him (again), and it would work an immeasurable hardship on his wife, his daughter, his unborn daughter, his two sons, his father, his sister and others that depend on him.
The argument describes Shoyfer as a teenager when he fled the Soviet Union for America years ago with his mother to escape “persecution because of their Jewish heritage.”
Living in the United States, Shoyfer, now believed to be in his forties, eventually became a full-time occupational therapist who started a staffing business in that profession and also dabbled in MLM, according to the argument.
Shoyfer asserts that he believed TelexFree to be legitimate.
“Prior to TelexFree closing down and being charged with fraudulent acts, Mr. Shoyfer had no knowledge that TelexFree was engaged in any unlawful, unfair, or improper practices,” his lawyers argued. “To the contrary, Mr. Shoyfer relied upon the statements of TelexFree’s officers and legal representatives that TelexFree was a fully legitimate and legal enterprise . . . Mr. Shoyfer had no reason to believe otherwise (nor did he) until TelexFree and its officers were charged.”
More from the argument (italics added/light editing performed):
The defense costs Mr. Shoyfer would have to absorb as the named defendant for the putative defendant class would easily exceed the amounts he received from TelexFree and he, therefore, has no incentive to pay the defense costs of being the named defendant . . . If a defendant class is certified, Mr. Shoyfer intends to opt out of the class . . . Mr. Shoyfer has no interest in being lumped together with 20,000 or so other defendants, some of whom may have known more than he did about TelexFree’s activities and the purported pyramid scheme, and some of whom liked caused Mr. Shoyfer to suffer damages himself.
The argument further contends Shoyfer is a good son and sibling who sends between $200 and $300 each month to both his father in Russia and his sister in Lithuania. He also has paid support of about $2,000 a month since 2008 for two children from his first marriage. Shoyfer now has a child with his second wife, with another child on the way.
In June 2015, The PP Blog reported that Shoyfer also was promoting a scheme known as MyAdvertisingPays — or MAPS, for short. MAPS resembles the AdSurfDaily Ponzi scheme, a $119 million fraud uncovered by the U.S. Secret Service in 2008.
Kenneth D. Bell, the Zeek receiver, has raised questions about MLMers moving from one fraud scheme to another.
BULLETIN: Class-action attorney Robert J. Bonsignore has asked a federal judge for permission to file a third amended consolidated complaint that effectively would sue at least 20,000 “net winners” in the TelexFree scheme shut down by the SEC last year.
The proposal would name alleged TelexFree promoter Daniil Shoyfer the lead class-action defendant, effectively making him the Todd Disner of TelexFree-related court actions. Disner is a Zeek Rewards figure sued by Zeek receiver Kenneth D. Bell in clawback actions aimed at more than 9,000 alleged winners in the Zeek scheme shuttered by the SEC in 2012.
Disner also promoted the AdSurfDaily Ponzi scheme broken up by the U.S. Secret Service in 2008.
The PP Blog reported in June 2015 that Shoyfer also was promoting a scheme known as MyAdvertisingPays — or MAPS, for short.
If the judge approves the proposal by Bonsignore, it would appear to mark the first time alleged TelexFree winners have been targeted en masse for the return of their alleged winnings from a scheme the SEC has described as a massive pyramid- and Ponzi fraud. Up to $1.8 billion flowed through TelexFree, now in the hands of a court-appointed trustee who has called it a pyramid scheme.
Web records showed that Shoyfer also was promoting MAPS alongside MAPS colleagues such as U.K. hucksters Simon Stepsys and Shaun Smith.
Bonsignore’s proposed amended complaint on the TelexFree front may lead to similar questions. At a minimum, the development highlights the dangers of fraud schemes that spread at least in part though the Internet to involve hundreds of thousands of participants. Victims can pile up in extraordinary numbers, and a fraction of participants who emerge as winners can end up confronting lawsuits and expensive, emotionally draining litigation.
MAPS, a purported advertising scheme similar to AdSurfDaily, continues to operate.
EDITOR’S NOTE: Certain reports by the PP Blog that are available to any person with an Internet connection are referenced in a consolidated, amended prospective class-action complaint that makes claims against various defendants with an alleged association with TelexFree. Information from other publicly available sites, including BehindMLM.com, RealScam.com and others, also is referenced.
The purpose of the PP Blog is to make information available to a wide audience interested in Ponzi schemes, pyramid schemes, securities-fraud schemes and concerns about the interconnectivity of such schemes. The Blog was not consulted about the inclusion of its links or quoted material from the Blog. Nor was the Blog compensated. The PP Blog has no association with the class-action attorneys, who obviously are readers of the Blog and the other online publications.
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Still promoting MLM HYIP schemes in the face of evidence they cause intractable financial, legal and emotional pain that sometimes mushrooms to involve hundreds of thousands of people?
On March 9, 2015, the PP Blog reported that the name of “MyAdvertisingPays” was referenced in a TelexFree-related proposed class-action lawsuit filed in U.S. District Court for the Southern District of New York in December 2014.
The filing appeared to mark the first time MyAdvertisingPays, known in shorthand as MAPS, was referenced in a federal-court filing.
History shows that such references are closely watched by law enforcement. Indeed, they sometimes serve as unofficial triggering actions and presage federal regulatory action by civil authorities such as the SEC and even actions by agencies empowered to enforce criminal laws.
When the California Department of Business Oversight was investigating the WCM777 scam in 2013, for instance, TelexFree’s name popped up in the context of the cross-promotion of MLM HYIP schemes.
This was months before it became known that the SEC and the U.S. Department of Homeland Security were investigating TelexFree, alleged to have gathered at least $1.6 billion in a combined pyramid- and Ponzi scheme.
Instead, the complaint alleged that TelexFree huckster Daniil Shoyfer was “the largest single Promoter” of TelexFree “in the greater New York area.” Web records showed that Shoyfer also was promoting MAPS alongside MAPS colleagues such as U.K. hucksters Simon Stepsys and Shaun Smith.
Willfully blind and supremely disingenuous MLM HYIP promoters moving from one cross-border fraud scheme to another has been a longtime problem. Such promoters may have little of their own money invested, but contribute to a condition under which banks and payment processors become warehouses for fraudulent proceeds cycling between and among scams.
New York is the financial center of the United States. The filing of the proposed TelexFree class action there contributed to questions about whether MAPS soon would be on the U.S. regulatory and enforcement radar.
The answer to that question remains unclear. What is clear is that the New York complaint was transferred to Massachusetts, the U.S. home base of TelexFree. And it’s also clear that Shoyfer has been named a defendant in an amended TelexFree class-action complaint filed April 30 in Massachusetts federal court.
Among the allegations against Shoyfer (italics added/light editing performed/formatting not precise):
TelexFree changed its compensation plan on or about March 9, 2014, much to the fury of affiliates, noted below. Shoyfer, however, continued to promote it unremittingly, sending group text messages to his network with such as the following:
Hey..my team Telexfree! ! And here we go again..Come to check out and learn about new compensation plan TF 2.0.. and how to grow it even faster and MUCH more aggressively and efficiently than the one we had before.…Here is this week’s schedule. . Monday 03/24 at Salon Delacqua (2027 86 str) at 8.00 pm (in English) ..Wednesday 03/26 at SOHO launch(2213 65th street) at 7.45 pm ( in Russian) and Thursday 03/27 at 7.30 pm at 63-112 Woodhaven Blvd in a real estate office. In my case, since I have started from absulute zero during this passed week Mon 03/17- Sun 03/23/14 I booked 11,500 from new one and 21,600 still coming from old plan..A total of 31,100 in 7 short days… Go Telex!!!
After the institution of the new TelexFree compensation plan in March 2014, Shoyfer took part in a closed meeting with TelexFree’s directors and owners in Marlborough, Massachusetts, at which Shoyfer was instructed not to discuss the new TelexFree compensation plan with others and non-insiders, as the new compensation plan was detrimental to Promoters and was adopted to forestall [TelexFree] filing bankruptcy.
So, a man who allegedly promoted TelexFree and had inside information detrimental to ordinary TelexFree affiliates allegedly kept it to himself, continued to promote the scheme — and then moved on to MAPS. This naturally leads to questions about whether Shoyfer has kept information from ordinary MAPS members.
Purpose Of The Amended TelexFree Class Action
The complaint is an effort to consolidate for the sake of efficiency various TelexFree-related class actions filed in various courts. Such actions were filed in multiple U.S. states.
But that’s not the only news: The amended complaint also names TelexFree pitchman Scott Miller a defendant alongside Shoyfer and HYIP huckster Faith Sloan. In documents prepared by Zeek receiver Kenneth D. Bell, Miller’s name appears as an alleged winner in the $897 million Zeek scheme.
In 2013, Miller promoted TelexFree through a publication known as Home Business Advertiser. Another advertiser promoted a cash-gifting scheme. A columnist described Jesus Christ as the person who inspired modern network marketers through his recruitment of 12 disciples.
A Semacon cash-counting machine appeared as a stage prop in a cash-gifting video advertised in Home Business Advertiser. The promos appeared after two women in Connecticut were sentenced to federal prison for their roles in a cash-gifting scheme and tax fraud.
Also named promoter-defendants in the amended TelexFree class action are Sanderley Rodrigues de Vasconcelos (Sann Rodrigues), a two-time SEC defendant in pyramid-scheme cases who allegedly also claimed his actions were inspired by a deity; Santiago de la Rosa; and Randy N. Crosby.
How the promoter-defendants will pay for their defenses in the amended class action is an open question. One of the risks of promoting such schemes is to be left totally on your own if the government or class-action attorneys file lawsuits.
Another open question is whether other shoes will drop in the government actions. The government probes are ongoing. Some of the class-action defendants conceivably could become defendants in amended or new actions filed by the SEC or agencies that have criminal enforcement power.
The amended TelexFree class action asserts fraud claims under Massachusetts law against a slew of defendants, including financial vendors and MLM attorney Gerald Nehra, also a figure in the the Zeek scheme and the AdSurfDaily Ponzi-scheme story. ASD was a $119 million Ponzi scheme broken up by the U.S. Secret Service in 2008. ASD operator Andy Bowdoin was sentenced to federal prison in 2012, after authorities tied him to at least two other cross-border fraud schemes: OneX and AdViewGlobal.
ASD’s name is referenced repeatedly in the amended TelexFree complaint, as is the name of Zeek. When the complaint will be heard is anyone’s guess. That’s because there are unresolved criminal matters against alleged TelexFree principals James Merrill and Carlos Wanzeler, both of whom are named defendants in the amended complaint and also are among the subjects of the SEC complaint.
Katia Wanzeler, Wanzeler’s wife, also is named a defendant in the amended complaint. So is TelexFree figure Joe Craft, another defendant in the SEC action. Brazilian TelexFree figure Carlos Costa also is named a defendant in the amended class action.
Also named a defendant in the amended class action is Jason “Jay” Borromei of Laguna Niguel, Calif. Along with a company known as Opt3, he is accused of “intentionally, knowingly, unfairly and deceptively set[ting] up TelexFree’s United States-based servers in Brazil with the intent of directly furthering, aiding or abetting their unlawful and fraudulent operation, including facilitating the placement of evidence of the Pyramid Scheme beyond the jurisdiction of the United States’ courts.”
With TelexFree itself in bankruptcy court, the class-action plaintiffs contend that “Opt3 and Borromei have a history of providing technical services within the multilevel marketing industry and hold themselves out as having related specialized knowledge. For example, Borromei previously served as chief information officer of Joystar, Inc., later renamed Travelstar, a multilevel marketing company that collapsed in approximately late 2008, and subsequently entered involuntary chapter 7 bankruptcy.”
Though not named a defendant in the amended class action, TelexFree and Zeek figure Tom More also is referenced in the 200-page complaint.
‘Private Jet’ Gets A Mention
On March 9, 2014, the PP Blog reported that a person who took the stage at a TelexFree rah-rah fest in Massachusetts asserted that TelexFree had access to a “private jet” that recently had ventured to the Dominican Republic and Haiti.
The “private jet” also was referenced in the class-action complaint. Details about it remain unclear.
At the moment, the April 30, 2015, amended and consolidated complaint is posted here at the website of class-action attorney Robert Bonsignore.
EDITOR’S NOTE:Part 1 of this two-part PP Blog series covered allegations against an alleged New York City-based TelexFree promoter . . .
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2ND UPDATE 9:42 A.M. EDT U.S.A. Though not charged as a defendant, the emerging “MyAdvertisingPays” (MAPS) scheme is referenced in a proposed class-action lawsuit filed against multiple TelexFree figures and financial vendors in U.S. District Court for the Southern District of New York in December 2014.
Because both New York’s Southern District and Eastern District are key centers of prosecutions against U.S. financial fraudsters, the proposed TelexFree class-action — now transferred to Massachusetts federal court — leads to questions about whether other “programs” such as MAPS could become the subjects of prosecutions.
Those odds might increase because Staten Island-based Daniil Shoyfer, alleged by the TelexFree plaintiffs “to have been the largest single Promoter in the greater New York area,” also is promoting MAPs, according to a YouTube site in his name.
Beyond that, Shaun Smith, alleged by the receiver in the Zeek Rewards Ponzi- and pyramid case to be one of the largest Zeek “winners” in the United Kingdom, also is promoting MAPs. Receiver Kenneth D. Bell is suing Smith and other alleged U.K. Zeek promoters for return of the funds, alleging they are Ponzi proceeds that came from Zeek victims.
Bell has expressed concern about MLMers or network marketers moving from one fraud scheme to another.
The TelexFree-related class action describes MAPS as a “120% ROI advertising-based Ponzi scheme.”
MyAdvertisingPays (MAPS) is referenced in this TelexFree-related class-action complaint. Red highlight by PP Blog.
Using the familiar advertising credit + Ponzi scheme business model, MyAdvertisingPays simpl[y] shuffle new affiliate money around to pay off existing investors.
The business model of MAPS is similar to the $119 million AdSurfDaily Ponzi scheme broken up by the U.S. Secret Service in 2008. MAPS purports to operate from George Hill, Anguilla, a British overseas territory in the Caribbean.
In the proposed TelexFree class action, the reference to MAPS appears in a section that alleges various TelexFree financial vendors enabled the fraud. Some of the vendors are alleged to have engaged in racketeering activity.
On its website, MAPS claims it does not accept PayPal because PayPal “has a bad habit of freezing or limiting members accounts for little or no reason at all.” Instead, it encourages prospects to use SolidTrustPay, a vendor used by both the Zeek and ASD schemes.
MAPS also says it uses something called “VX Gateway,” which purports to operate out of Panama.
“Because that’s where the money is.” — Classic rejoinder attributed to Brooklyn-born criminal Willie Sutton, reportedly after he was asked why he robbed banks. The often-quoted line may or may not be apocryphal. (Also see “Sutton’s Law” on the need to consider the obvious and “When you hear hoofbeats, think of horses not zebras.”)
UPDATED 5:26 P.M. EDT U.S.A. If you had the means to throw down $140 for “Chocolate Body Therapy” or $260 to get the “Prince or Princess for a Day” treatment, would you also have the means to direct some cash to an MLM “program” purported to double or triple your money?
Daniil Shoyfer of Staten Island perhaps thought so. In a proposed class-action lawsuit against various TelexFree figures, the plaintiffs accuse Shoyfer of holding TelexFree pitchfests at Salon Delacqua, a beauty shop that offers moderately priced and upscale services on 86th Street in Brooklyn. The meetings appear to have occurred at 8 p.m., near or at the shop’s published closing time.
These pitches included promises of “fabulous wealth,” according to the plaintiffs. The salon also advertises a “Brazilian Karatine” hair-strengthening treatment that takes three hours and begins at $250.
And when Shoyfer wasn’t at the salon, he allegedly was at the Marriott Hotel Grand Ballroom at 102-05 Ditmars Blvd. in the Queens neighborhood of East Elmhust near LaGuardia Airport, pitching the “program” in a room that hotel says on its website can be configured to seat 400.
The demographics from the neighborhood (2010) suggest that 30 percent of its residents were born outside of the United States, with a Latino population on the rise. TelexFree was accused last year by the SEC of targeting immigrants.
Shoyfer pitchfests also were hosted elsewhere in the Greater New York City region, and allegedly were conducted in English and Russian. The sites included the SOHO Lounge in Brooklyn and a real-estate office in the Rego Park neighborhood of Queens.
Accused TelexFree executive Steve Labriola was a co-host at a Shoyfer Marriott pitchfest, dubbed a “Superweekend in NY,” according to the plaintiffs.
Shoyfer allegedly took his marching orders from Labriola and other TelexFree “founders,” including accused Ponzi schemers James Merrill, Carlos Wanzeler and Carlos Costa. Also within the alleged den of financial impropriety were accused TelexFree securities fraudster Joe Craft, an accountant, and Katia Wanzeler, the wife of Carlos Wanzeler.
Along for the ride in the TelexFree swindle, according to the plaintiffs, were Sann Rodrigues, Faith Sloan, Randy Crosby and Santiago de la Rosa, all four of whom were accused by the SEC last year of securities fraud and named defendants in the proposed class action. It is one of several tied to the alleged TelexFree Ponzi- and pyramid scheme.
“Defendant Shoyfer was the creator and leader of a large network of TelexFree Promoters based primarily in New York City, but extending into other states as well, including Massachusetts, and he is believed to have been the largest single Promoter in the greater New York area,” the plaintiffs alleged. “Under any view, Shoyfer funneled a portion of his ill-gotten gain up the food chain to TelexFree, its masterminds and other Defendants.”
The complaint includes alleged passages from Shoyfer text messages to his TelexFree group. These suggest he was gathering cashier’s checks from his downline, and included a claim that he had made “$142,320 in a single week in February 2014” from TelexFree.
According to the complaint, in December 2013, prior to TelexFree’s Sunday night bankruptcy filing in April 2014, Shoyfer told his group this on behalf of himself and TelexFree “founders” (italics added):
From my upper line “Happy New Year everyone!!! 2014 is gonna be the best year for Telexfree$$$! TelexMobil is about to be launched in January! ! And, on Thursday January 23rd at 6.30 pm I will be doing my first Telexfree Superweekend in NY with Steve Labriola (director of international marketing TF) at Marriott Hotel Grand Ballroom by La Guardia Airport at 102-05 Dimars Blvd, Flushing NY 11369 (parking available). Now is the time to meet with top corporate representative..and my top leaders in my rapidly growing team.. You MUST invite your people (forward this msg to them), especially those who r still sitting on sidelines, debating about legibility [sic] and future of this company. .Trust me after this event, all negativity will disappear. .and you will double and triple you earnings in this busine$$ venture in 2014…”
On Feb. 26, 2014, about two days before the Massachusetts Securities Division made public the news that TelexFree was under investigation, Shoyfer allegedly told his group this on behalf of himself and TelexFree “founders” (italics added):
I just received checks from everyone but will wait for u to bring it until 2 p.m… then I’m going to FedEx.
Bring me certified checks now I will send them to ewallet by federal express and they will post it immediately.
TelexFree is alleged to have changed its compensation plan on March 9, 2014, much to the fury of affiliates. Shoyfer, however, continued to promote it, according to the plaintiffs (italics added):
Hey..my team Telexfree! ! And here we go again..Come to check out and learn about new compensation plan TF 2.0.. and how to grow it even faster and MUCH more aggressively and efficiently than the one we had before.…Here is this week’s schedule. . Monday 03/24 at Salon Delacqua (2027 86 str) at 8.00 pm (in English) ..Wednesday 03/26 at SOHO launch(2213 65th street) at 7.45 pm ( in Russian) and Thursday 03/27 at 7.30 pm at 63-112 Woodhaven Blvd in a real estate office. In my case, since I havestarted from absulute zero during this passed week Mon 03/17- Sun 03/23/14 I booked 11,500 from new one and 21,600 still coming from old plan..A total of 31,100 in 7 short days… Go Telex!!!”
The import of this, according to the plaintiffs, is that [a]fter the institution of the new TelexFree compensation plan in March of 2014, Shoyfer took part in a closed meeting with TelexFree’s Directors and Owners in Marlborough, Massachusetts, at which Shoyfer was instructed not to discuss the new TelexFree compensation plan with other, non-insiders, as the new compensation plan was detrimental to Promoters and was adopted to forestall filing bankruptcy.”
In short, the plaintiffs accuse Shoyfer of working in concert with TelexFree management to dupe people into enrolling “right up until TelexFree’s bankruptcy filing.”
Filings in the TelexFree bankruptcy case suggest Shoyfer received nearly $88,000 from TelexFree in two separate payments just prior to the April 13 bankruptcy filing. The first, for $9,902.37, occurred on March 21, and the second, for $78,037.33, occurred on March 28.
NOTE: Part 2 of this two-part PP Blog series on the class-action lawsuit, which was filed in U.S. District Court for the Southern District of New York, will be published later. Part 2 will cover other allegations from the complaint, filed Dec. 12. A copy of the complaint is available through TruthInAdvertising.org. (Link to complaint temporarily disabled by PP Blog at 9 p.m. EDT March 9, 2015.)
Let’s begin by pointing out that Daniil Shoyfer and Scott Miller have not been charged by the SEC in its 2014 TelexFree action. There are asset freezes aplenty in that government-brought case, including freezes against alleged promoters Sann Rodrigues, Faith Sloan, Randy Crosby and Santiago De La Rosa.
BULLETIN: (6th update 7:23 p.m. ET U.S.A.) Class-action lawyers pursuing claims against TelexFree promoters have called the My Advertising Pays (MAPS) “program” a Ponzi scheme and described MAPS promoter Simon Stepsys as a “Ponzi mogul.”
