UPDATED 1:56 P.M. ET U.S.A. TelexFree figure Sann Rodrigues could have been sentenced to 10 years for immigration fraud. Instead, he was sentenced yesterday to time served. The office of U.S. Attorney Carmen Ortiz of the District of Massachusetts said early this afternoon that Rodrigues ended up spending 57 days behind bars after his May 2015 arrest on the immigration charge.
A citizen of Brazil, according to court filings, Rodrigues presented his U.S. “green card to Customs and Border Protection Officers on May 3, 2015, at Logan Airport [in Boston], knowing that he obtained that document based upon false statements to immigration officials,” prosecutors said.
Rodrigues was not charged criminally for his involvement in TelexFree, perhaps the largest combined Ponzi- and pyramid scheme in history. SEC civil charges brought against him in April 2104 remain intact, as does other TelexFree-related civil litigation.
A veteran huckster who once claimed “God” invented MLM and “binary,” Rodrigues potentially faces large financial judgments for his TelexFree behavior, which followed earlier behavior in a scheme known as Universo Fone Club prosecuted by the SEC in 2006.
U.S. criminal prosecutors said Rodrigues was freed after sentencing in Massachusetts yesterday and will be on supervised release for two years.
During his period of supervised release, he is “required to comply with any immigration-related orders, the U.S. Attorney’s Office said.
Because Rodrigues, a Brazilian national, now has been convicted of a felony, he is subject to “administrative immigration proceedings” by the U.S. Department of Homeland Security, the U.S. Attorney’s Office said.
Such actions potentially could lead to deportation.
(4th Update 7:23 p.m. ET U.S.A.) TelexFree, IFreeX and DFRF Enterprises’ figure Sann Rodrigues has been found in contempt of court in the SEC’s Ponzi- and pyramid case against TelexFree and a federal judge in Massachusetts has threatened to jail him.
The SEC alleged Rodrigues, a recidivist securities offender, violated an asset freeze imposed in 2014. U.S. District Judge Nathaniel M. Gorton today agreed.
“His arguments are unconvincing,” Gorton ruled. “Rodrigues was subject to a very similar temporary restraining order and preliminary injunction in a 2006 civil enforcement action also brought by the SEC. Thus, however complex were the requirements of the orders in this case, they were not unfamiliar.”
The judge also rejected a contention by Rodrigues that he could not provide an accounting as ordered because providing the requested financial information would violate his Fifth Amendment right against self-incrimination. Gorton ruled that Rodrigues already had waived his right in dealings with the SEC
From the Dec. 18 order by Gorton (italics added):
Rodrigues argues that providing a full accounting of his assets and transactions would require him to disclose information that could incriminate him in several potential or actual criminal proceedings. Rodrigues is currently the subject of a criminal prosecution in a separate federal visa fraud case, U.S. V. Rodrigues (15-10227). He reports that he is also being investigated by the Massachusetts Attorney General with respect to another of his business ventures. In addition, he contends that he may still be under investigation for potential criminal charges related to the specific conduct that underlies this civil enforcement action.
Whether defendant has made a sufficient showing to invoke the Fifth Amendment is, however, irrelevant. Rodrigues waived his right against self-incrimination by consenting to the Order. . . . In that proceeding, Rodrigues explicitly agreed to provide the very information he is now claiming to be privileged . . . Defendant was represented by counsel, who negotiated the language of the order with the SEC. In exchange for agreeing to provide the required accountings, Rodrigues received a carve-out of his frozen assets to pay for his bail in the separate criminal visa fraud case.
By Jan. 15, Rodrigues must restore more than $334,000 removed in violation of the asset freeze, Gorton ruled. He also is required to “obtain the reconveyance” of real estate transferred in violation of the freeze or “remit funds equal to the market value thereof or provide the Court with a detailed plan as to how he will otherwise cure his contempt in relation to the transfer of those properties.”
Rodrigues violated the freeze by “removing cash from accounts or selling cars,” the judge found.
The penalty for not meeting the conditions of the order is bail revocation, Gorton ruled.
Rodrigues has become at least the second figure associated with a Ponzi-board “program” to be found in contempt this month.
Darryle Douglas, an alleged Zeek Rewards’ insider, was ordered arrested on Dec. 10. That order was issued by Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina. Whether Douglas has been taken into custody is unclear.
Has a globetrotting serial huckster facing a civil-contempt proceeding in the SEC’s pyramid- and Ponzi case against TelexFree, key executives and promoters set the new standard for vomitous MLM?
Accused of repeatedly violating U.S. court orders, Brazil native, TelexFree promoter and two-time accused securities fraudster Sann Rodrigues now effectively is hoping to convince a federal judge that spokenwords don’t mean things. In the face of multiple videos showing him speaking English, Rodrigues is claiming through attorneys that he “does not speak English” and that he “is almost completely unable to read English and has between no proficiency and an elementary proficiency in speaking in English,” according to the SEC.
And, Rodrigues contends, he “did not understand the asset freeze orders because he can barely speak English,” the SEC contends.
The claims amount to “nonsense,” the SEC argued in a memo to U.S. District Judge Nathaniel M. Gorton. The memo included links to two videos showing Rodrigues speaking English. (One of them is below.)
Whether Rodrigues will be able to convince the judge that spoken words don’t mean things is a question likely to be answered in the days immediately ahead — and the task perhaps just got harder.
That’s because the SEC today filed an affidavit from a Florida banker who says he spoke with Rodrigues in person approximately every two weeks from August 2014 to May 2015.
Rodrigues had eight corporate accounts, and all of them were closed by the bank, according to the banker.
Moreover, all the conversations took place “entirely in the English language,” the banker said.
And, the banker said, all of the forms “filled out and signed by Mr. Rodrigues were entirely in the English language.”
BULLETIN: (2nd Update 9:46 p.m. EDT U.S.A.) The SEC has gone to federal court in Boston, alleging that “the DFRF fraud is much larger than it first appeared.”
The agency also alleges that at least one DFRF investor told investigators that he first heard of DFRF in May or June 2014 from TelexFree Ponzi- and pyramid figure Sann Rodrigues, who attended the same church. If the information is correct, it would mean that Rodrigues had knowledge about DFRF within weeks of becoming a defendant in the SEC’s April 2014 action against TelexFree.
Filho, described by federal prosecutors in Boston as a fugitive, was arrested July 21 in Boca Raton, Fla. on a DFRF-related charge of wire fraud. The FBI is leading the criminal investigation.
From an SEC investigator in a July 23 filing in the agency’s civil case against DFRF Enterprises, Filho, Wanderley M. Dalman of Revere, Mass.; Gaspar C. Jesus of Malden, Mass.; Eduardo N. Da Silva of Orlando, Fla.; Heriberto C. Perez Valdes of Miami; Jeffrey A. Feldman of Boca Raton; and Romildo Da Cunha of Brazil (italics and bolding added/light editing performed):
Another investor (hereafter “Investor B”) told me that he and his spouse invested a combined $61,000 in DFRF. He first heard about DFRF in May or June 2014 from Sanderley Rodrigues de Vasconcelos (“Rodrigues”). (Rodrigues is the subject of a 2007 consent judgment in a Commission enforcement action concerning the “Universo Foneclub” pyramid scheme and a defendant in the Commission’s pending action concerning the “TelexFree” pyramid scheme.) Investor B knew Rodrigues from his participation in TelexFree and as a fellow member of his church.
Rodrigues told Investor B that the minimum investment in DFRF was $50,000. Investor B decided not to invest at that time.
Investor B told me that in July or August 2014, defendants Dalman, Jesus and Silva approached him about investing in DFRF. He knew the three men through TelexFree, because when TelexFree was operating, he would meet with individuals involved in the company on a weekly basis at a hotel in Revere.
Dalman, Jesus and Silva told Investor B about DFRF, explaining that Investor B could earn up to 15% per month. They also told him that he could earn a 10% commission for referring others to DFRF.
Investor B told me that Dalman, Jesus and Silva invited him to meet with Filho at a hotel in Boston, Massachusetts in July or August 2014, which he did.
Investor B told me that, in September 2014, he and his spouse went to a meeting at DFRF’s offices at 60 State Street in Boston. Six to ten other potential investors attended this meeting, at which Dalman, Jesus and Silva spoke about DFRF. Filho later joined the meeting and gave a presentation about investing in DFRF. One of the other attendees asked Filho how DFRF could afford to pay 15% per month. Filho responded that he could take the investors’ money and grow it by a factor of six.
The Rodrigues tie to DFRF now brings the number of fraud schemes in which he has been involved at least to four: Universo, TelexFree, DFRF and IFreeX, described last year by Massachusetts investigators as a TelexFree reload scheme. By victims count, TelexFree may be the largest Ponzi/pyramid scheme in U.S. history, rivaled only by Zeek Rewards in 2012.
Rodrigues, a Brazilian, is not a U.S. citizen. He was arrested at a New Jersey airport in May 2015, upon his return from a trip to Israel. He was charged criminally with immigration fraud, amid allegations he lied to get a green card.
Like DFRF’s Filho, Rodrigues had addresses in Massachusetts and Florida. Filho also is a Brazilian.
Prosecution filings today in the criminal case against Filho assert that he is not a U.S. citizen. He has not been charged with an immigration crime and apparently has a driver’s license issued by a U.S. state, given that he has been seen driving a Lamborghini in Florida.
SEC: DFRF Fraud Numbers Rise
The SEC initially pegged DFRF last month as a fraud that had hauled about $15 million. But further investigation has led to higher numbers — in both total haul and the sum Filho is alleged to have siphoned.
Dealing with Filho first, who was alleged last month to have siphoned more than $6 million. From an SEC filing yesterday (italics added):
The documents we reviewed indicate that, since June 2014, Filho has taken more than $8.6 million from DFRF accounts for himself or his family: He has withdrawn more than $2.7 million in cash. He has used DFRF funds to pay more than $2.2 million of personal and family expenses. He has used DFRF funds to pay more than $2.5 million for luxury automobiles (a 2014 Rolls Royce, a 2015 Lamborghini, a 2014 Lamborghini, a 2013 Mercedes, a 2012 Ferrari, a 2006 Ferrari, a 2015 Cadillac, and a 2014 Cadillac) and automotive-related expenses. He has used DFRF funds to pay nearly $250,000 to members of his extended family. He has used DFRF funds to send more than $1.1 million to the IOLTA account of an attorney in Hollywood, Florida. On June 30, 2015, he used DFRF funds to wire more than $1.1 million to an entity in the Bahamas that is believed to be a law firm. Some of these figures are probably too low, because the documents we have received to date are insufficient to classify approximately $3.5 million of withdrawals from DFRF corporate accounts in June 2015.
Now, dealing with DFRF, alleged last month to have hauled $15 million. From an SEC filing yesterday (italics added/light editing performed):
The documents we reviewed indicate that, from June 2014 through June 2015, DFRF received approximately $22.8 million from more than 1,750 investors: The total may be slightly low, because the documents we have received to date are insufficient to classify approximately $160,000 of deposits to DFRF corporate accounts in June 2015.
The documents we reviewed indicate that none of the investors’ money has been used to conduct gold mining in Brazil and Mali, and that DFRF has received no proceeds from gold mining operations.
The documents we reviewed indicate that DFRF has received no proceeds from a line of credit with Platinum Swiss Trust and has had no banking transactions at all with that company.
The documents we reviewed indicate that DFRF has spent nothing on charitable activities in Africa or anywhere else.
The documents we reviewed indicate that, from June 2014 through June 2015, DFRF had no independent source of revenue except the money received from investors.
The documents we reviewed indicate that, from June 2014 through June 2015, DFRF paid approximately $1.94 million to approximately 250 likely investors for the return of investor principal or purported monthly payments.
Heriberto Valdes, who allegedly hauled $551,403 out of DFRF, has not been served the complaint, the SEC said.
“Valdes is the only defendant who has not been served and whose location is unknown,” the agency said.
Records suggest that Valdes, like Feldman, has a criminal record.
URGENT >> BULLETIN >> MOVING: (15th Update 4:43 p.m. EDT U.S.A.) The SEC has gone to federal court in Massachusetts, charging DFRF Enterprises and alleged operator Daniel Fernandes Rojo Filho with operating a combined pyramid- and Ponzi scheme targeted at “Spanish and Portuguese-speaking communities in Massachusetts, Florida, and elsewhere in the U.S.”
Six alleged promoters also were charged.
In its complaint, the SEC ties Filho to Sann Rodrigues, a figure in the TelexFree Ponzi- and pyramid-scheme case filed by the agency last year in Massachusetts.
A stunning allegation from the SEC complaint (italics added/light editing performed):
. . . Filho has caused DFRF to pay more than $310,000 for the benefit of Sanderley Rodrigues de Vasconcelos (“Rodrigues”). Rodrigues is the subject of a 2007 consent judgment in a Commission enforcement action concerning the “Universo Foneclub” pyramid scheme, and he is a defendant in the Commission’s pending enforcement action concerning the “TelexFree” pyramid scheme. On March 21, 2015, Filho caused DFRF to pay $50,000 to a business belonging to Rodrigues. (The payment was made less than one month after Filho publicly denied any link between DFRF and TelexFree.)
On March 30, 2015, Filho caused DFRF to pay $100,000 to the same business. On April 2, 2015, Filho caused DFRF to supply more than $160,000 so that another business belonging to Rodrigues could purchase a 2008 Lamborghini sports car. There is no evidence that Rodrigues provided any services or other benefit to DFRF.
All in all, according to the SEC, Rodrigues received more than $310,000 from DFRF’s fraud scheme. He has claimed he received at least $3 million from TelexFree.
After Rodrigues was arrested in the United States in May on charges of immigration fraud, he asserted his current income was $80,000 a year, according to court filings. He also claimed to own two homes — one in Massachusetts and one in Florida — free and clear.
The PP Blog reported on June 30 that a wanted notice on INTERPOL’s website said Rodrigues was being sought by Brazil for “Tax Evasion and not obey[ing] a Judicial Order.” Though granted conditional bail in the immigration case, Rodrigues now is being held in the United States on Brazil’s warrant.
He also is implicated in a scheme known as IFreeX, the subject of a warning by the Massachusetts Securities Division last year.
In the SEC complaint filed under seal June 30 and made public today, the agency described DFRF as an ongoing offering fraud and Filho as a thief who had siphoned investors’ outlays from the scheme.
“Filho has also used the investors’ money for his personal benefit,” the SEC charged in its 22-page complaint. “Since 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 scheme allegedly gathered about $15 million, the SEC charged.
“DFRF and its operators falsely claimed that they were running a lucrative gold mining business when in reality they were operating a Ponzi and pyramid scheme that preyed on investors in particular ethnic communities who stand to lose millions of dollars,” said John T. Dugan, associate regional director of the SEC’s Boston Regional Office. “Investors were not given the full story about the true value and security of their investments.”
Charged promoters include Wanderley M. Dalman of Revere, Mass.; Gaspar C. Jesus of Malden, Mass.; Eduardo N. Da Silva of Orlando, Fla.; Heriberto C. Perez Valdes of Miami; Jeffrey A. Feldman of Boca Raton; and Romildo Da Cunha of Brazil.
On Jan. 19, 2015, the PP Blog reported that DFRF was the apparent sponsor of an event in Florida that featured an appearance by Brazilian racing legend Emerson Fittipaldi. Sann Rodrigues — now jailed in the United States on a warrant from Brazil — also was seen with Fittipaldi.
The SEC alleges that DFRF Enterprises, named for its founder Daniel Fernandes Rojo Filho, claimed to operate more than 50 gold mines in Brazil and Africa, but the company’s revenues came solely from selling membership interests to investors and not from mining gold. With the help of several promoters, they lured investors with such false promises as their money would be fully insured, DFRF has a line of credit with a Swiss private bank, and one-quarter of DFRF’s profits are used for charitable work in Africa. The scheme raised more than $15 million from at least 1,400 investors by recruiting new members in pyramid scheme fashion to keep the fraud afloat, and commissions were paid to earlier investors in Ponzi-like fashion for their recruitment efforts.
Rodrigues is not listed as a codefendant in the SEC’s case against Filho and the other defendants.
But the agency alleged that DFRF also had paid those defendants. Since June 2014: “approximately $521,000 to Valdes, $252,000 to Feldman, $221,000 to Silva, $56,000 to Jesus, $51,000 to Dalman, and $33,000 to Cunha.”
As was the case with TelexFree, some investors paid their sponsors directly, instead of paying DFRF, the SEC alleged.
“The amount of checks and cash that the individual defendants collected directly from investors is currently unknown,” the agency said.
Included among a “a fleet of luxury automobiles” acquired by Filho from investors’ money were a 2014 Rolls Royce, a 2015 Lamborghini, a 2014 Lamborghini, a 2012 Ferrari, a 2006 Ferrari, a 2013 Mercedes, a 2015 Cadillac and a 2014 Cadillac, the SEC charged.
Sanderley Rodrigues [de] Vasconcelos. Source: INTERPOL.BULLETIN: TelexFree and IFreeX figure Sanderley Rodrigues [de] Vasconcelos (Sann Rodrigues) is the subject of an INTERPOL notice that says he is wanted by authorities in Brazil for “Tax Evasion and not obey[ing] a Judicial Order.”
Precisely when the notice was entered was not immediately clear. The notice drops the “de” portion of his last name, listing him as “Vasconcelos” as opposed to De Vasconcelos.
Sann Rodrigues (Sanderley Rodrigues de Vasconcelos).
EDITOR’S NOTE ADDED 10:10 P.M. EDT U.S.A.: About 16 minutes after the post below was published, PP Blog reader “Diego” sent a note and a link to an AP report dated today. The report says Rodrigues was arrested today in Boston at the request of Brazilian authorities. Our original story is below. The URLs to the AP story and a translation to English by Google are in the first two comments below . . .
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TelexFree and IFreeX figure Sann Rodrigues was released from the custody of the U.S. Marshals Service after meeting bail conditions June 26, according to the docket of the immigration-fraud case filed against him last month by federal prosecutors in the District of Massachusetts.
A person in Florida posted $200,000 cash, as part of the arrangement, according to paperwork in the immigration case.
Rodrigues, a citizen of Brazil who also has lived in the United States, was charged on May 16 with fraud and misuse of visas, permits and other documents, the office of U.S. Attorney Carmen Ortiz said on May 26.
He was arrested at Newark International Airport on May 16, after returning from a trip to Israel that began May 3 at Logan Airport in Boston, according to documents
Though prosecutors said Rodrigues initially was released on tight conditions May 21 from detention in New Jersey, the docket of the immigration case in Massachusetts suggests he was detained again on June 8 after not meeting all the bail conditions.
Those apparently now have been met.
In addition to requiring secured bail and other measures such as passport and driver’s-license surrender, U.S. Magistrate Judge Judge Marianne B. Bowler of Massachusetts ordered Rodrigues placed on home incarceration with electronic monitoring, to comply with a civil injunction in the SEC case against him and not to break any local, state or federal law while on release.
No trial date on the immigration-related charges has been set.
Sann Rodrigues is on the right in this TelexFree promo from 2014. Indicted TelexFree figures James Merrill and Carlos Wanzeler are on the left.
UPDATED 12:55 P.M. EDT JUNE 24 U.S.A. Once alleged by a class-action plaintiff to be part of an international racketeering enterprise, TelexFree and IFreeX figure Sann Rodrigues, on May 3, 2015, allegedly told U.S. Customs and Border Protection officers at Boston’s Logan International Airport that he was about to travel to Israel.
Rodrigues, charged civilly by the SEC with securities fraud 13 months earlier in a case that alleged TelexFree had targeted affinity populations, “stated that he was embarking on a trip to the holy land with a church group for a week visit,” according to a May 7, 2015, affidavit by Homeland Security Investigations (HSI). HSI is an arm of the U.S. Department of Homeland Security.
The asserted church group was not identified in the affidavit. Also unclear is whether Rodrigues conducted business in Israel while there. What is clear is that Rodrigues had been conducting business in the United States for years. On at least one occasion, he allegedly failed to disclose to U.S. immigration officials that the SEC had brought a fraud action against him.
“Aliens” is a term under U.S. immigration law to describe foreign nationals. Rodrigues is a citizen of Brazil. Under U.S. law, aliens who’ve engaged in acts of terrorism, narcotics trafficking or seek to engage in “commercial vice” are ineligible to enter or reside in the United States, according to the affidavit.
Commercial vice typically covers crimes such as prostitution, but immigration law also addresses a “serious criminal offense” such as “any felony.” If Rodrigues is charged criminally with any Ponzi-related or other felony, it almost certainly will further cloud his immigration status. Since Rodrigues was arrested last month in the United States on a charge of visa fraud, that status already is under the U.S. microscope.
Among the allegations against Rodrigues, whose full name is Sanderley Rodrigues De Vasconcelos, was that he had obtained his U.S. green card fraudulently, the office of U.S. Attorney Carmen M. Ortiz said on May 26. Green cards provide for lawful, permanent U.S. residency.
Prior to receiving his green card in 2011, Rodrigues, in 2009, lied to the U.S. Consulate in Rio de Janiero to obtain a “B2” tourist visa with the stated purpose of visiting Las Vegas for eight days, according to the affidavit.
Upon his May 16 return to the United States from Israel, Rodrigues was arrested at a New Jersey airport (Newark International). He initially was jailed, but later was released on tight conditions.
But Rodrigues now has been detained again, BehindMLM.com reported today. The issue? Rodrigues, now an alleged visa fraudster in addition to being an alleged cross-border securities fraudster, reportedly has not met his bail conditions.
From BehindMLM (italics added):
[An] 8th of June hearing saw Rodrigues ordered to remain in the custody of the [U.S. Marshals Service], ‘until an SEC accounting or alternate funds are made available for bail‘.
Put another way, Rodrigues may not have enough clean money to comply with bail conditions.
U.S. federal court filings link Rodrigues to the alleged $1.8 billion TelexFree cross-border pyramid- and Ponzi scheme broken up by HSI and the SEC last year and to a 2006 pyramid scheme known as Universo Fone Club. Massachusetts investigators, meanwhile, have linked him to the IFreeX scheme.
Court records suggest Rodrigues has been in the United States at least on and off since at least 2003. And, according to the records, Rodrigues claimed in the 2009 B2 U.S. visa application for the trip to Las Vegas that he previously had traveled to Brazil, Spain, Italy, France, Germany, Austria and Switzerland. The TelexFree huckster allegedly failed to disclose that he’d also traveled to the United States, had lived in the United States for years and was deposed in the United States by the SEC in the 2006 Universo Fone Club case.
In fact, according to court filings, Rodrigues claimed in 2009 never to have been in the United States — this allegedly despite the SEC deposition and his own claim that he had lived in the United States between 2003 and 2006.
Cross-Border Scamming MLM-Style
Precisely how long Rodrigues has been involved in MLM/network marketing is unclear. The SEC says it’s been since at least 2006, potentially meaning the huckster who reaches across borders via the Internet and allegedly claims to be a world traveler has been scamming recruits for at least nine years.
While pitching prospects, Rodrigues publicly claimed he hauled at least $3 million out of TelexFree. The SEC said that the Universo Fone Club enterprise gathered more than $3 million. (See June 2007 story in Forbes.)
Rodrigues was among TelexFree’s purported honorees at the Madrid confab. Whether he had a large TelexFree organization in Spain remains an open question. It has been reported that 50,000 Spaniards had become involved in the “program.”
Affinity fraud in the form of schemes targeted at people who have something in common — from common nationality and common religion to common financial problems and common political beliefs — is a growing menace. The Internet in large part drives the schemes across national borders. But cross-border travel also plays a role. Pitchfests are performed in grand hotels and in budget properties. Ships at sea also have been used.
If the visa and securities charges against Rodrigues are proven, it will mean that you can add immigration fraud to the mix of ways modern network marketers are duping the public.
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.
TelexFree and IFreeX promoter Sann Rodrigues has been released on “conditions,” including “the surrender of his passport and the passports belonging to his family members, a $200,000 secured bond, 24-hour electronic monitoring, and home confinement.”
A U.S. Magistrate Judge in the District of New Jersey imposed the conditions on Rodrigues, according to a statement today by the office of U.S. Attorney Carmen Ortiz of the District of Massachusetts. Here’s the headline of the release: “Pyramid Scheme Promoter Arrested on Visa Fraud Charges.”
At the same time, the release noted that Rodrigues had been charged by the SEC in 2006 with “owning and operating Universo Fone Club and defrauding investors of millions of dollars.” The SEC alleged that Universo Fone Club was a pyramid scheme.
Rodrigues, of Davenport, Fla., was arrested earlier this month at Newark International Airport on visa-fraud charges after returning from Israel, prosecutors said.
A citizen of Brazil, according to court filings, Rodrigues presented his U.S. “green card to Customs and Border Protection Officers on May 3, 2015, at Logan Airport [in Boston], knowing that he obtained that document based upon false statements to immigration officials,” prosecutors said.
TelexFree operated from Massachusetts. A court-appointed bankruptcy trustee has said TelexFree gathered on the order of $1.8 billion in about two years.
From a 2014 YouTube promo for iFreeX. Masking by PP Blog. In 2014, T-Mobile told the PP Blog that it was seeking to determine if IFreeX was misusing T-Mobile’s intellectual property.
The website of IFreeX.com is offline. The PP Blog could not immediately determine why. Visitors are seeing a GoDaddy.com page.
Google cache suggests IFreeX.com was online earlier today.
As part of its reporting, the PP Blog has reviewed certain documents pertaining to the criminal prosecution of TelexFree figures James Merrill and Carlos Wanzeler and documents pertaining to the immigration arrest of Rodrigues. The documents show that the same U.S. federal prosecutor is involved in both the Merrill/Wanzeler case and the immigration case involving Rodrigues.
At the same time, the documents show that the same Homeland Security Investigations (HSI) agent also is involved in both prosecutions. In addition to filing paperwork against Rodrigues in the immigration case, the agent filed paperwork that led to the 2014 arrest on a TelexFree-related material-witness warrant at JFK Airport in New York of Katia Wanzeler.
Katia is the wife of Carlos Wanzeler, who has been described by the United States as an international fugitive. Katia later was released. HSI, which conducted a TelexFree-related undercover operation beginning in 2013, is an arm of the U.S. Department of Homeland Security.
Merrill and Carlos Wanzeler were indicted in July 2014 on eight criminal counts of wire fraud and one criminal count of wire-fraud conspiracy. Earlier, in April 2014, Merrill, Carlos Wanzeler, Rodrigues and five others were charged civilly with fraud by the U.S. Securities and Exchange Commission.
TelexFree, which hawked a VOIP service, has been described in Bankruptcy Court filings by a court-appointed trustee as a cross-border pyramid scheme that gathered $1.8 billion in about two years.
Separately, BehindMLM.com is reporting in a story dated May 26 that a website known as 2PayNet also is offline. The site may be connected in some way with IFreeX.
Intellectual property rights theft is not a victimless crime. It threatens U.S. businesses and robs hard-working Americans of their jobs, which negatively impacts the economy. It can also pose serious health and safety risks to consumers, and oftentimes, it fuels global organized crime.
UPDATED 1:56 P.M. ET U.S.A. TelexFree figure Sann Rodrigues could have been sentenced to 10 years for immigration fraud. Instead, he was sentenced yesterday to time served. The office of U.S. Attorney Carmen Ortiz of the District of Massachusetts said early this afternoon that Rodrigues ended up spending 57 days behind bars after his May 2015 arrest on the immigration charge.
![Sanderley Rodrigues [de] Vasconcelos.](https://patrickpretty.com/wp-content/uploads/2015/06/sannrodriguesinterpol.jpg)
