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Tag: TelexFree

  • Individual Linked To Payment Processor For ‘MyAdvertisingPays’ Scheme Listed In Panama Papers

    breakingnews725Roger Alberto Santamaria Del Cid, an apparent nominee director for offshore companies who is listed as a corporate “subscriber” for VX Gateway in Panamanian business records, is referenced at least three times in the “Panama Papers.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     




  • TelexFree’s Sann Rodrigues Pushing ‘WowApp’ For ‘Every Day Gains,’ Promo Says

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

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

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

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

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

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

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

    From the WowApp Terms and Conditions (italics added):

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

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

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

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

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

    NOTE: Our thanks to a reader.




  • SEC, Trustee, Defense Attorneys Mum On Possible Deeper Ties Between TelexFree And DFRF Schemes

    Daniel Fernandes Rojo Filho in a YouTube promo for the alleged DFRF Ponzi- and pyramid scheme.
    Daniel Fernandes Rojo Filho in a YouTube promo for the alleged DFRF Ponzi- and pyramid scheme.

    The SEC declined Friday to say whether two individuals named prospective defendants in a massive class-action lawsuit brought by the Trustee in the 2014 TelexFree bankruptcy case were the same two persons charged with securities fraud last year by the agency in the DFRF Enterprises/Daniel Fernandes Rojo Filho Ponzi- and pyramid-scheme case.

    On June 30, 2015, Gaspar C. Jesus, 54, of Malden, Mass., and Eduardo N. Da Silva, 40, of Orlando, Fla., were among the nine named civil defendants in the DFRF/Filho case. Jesus allegedly received $56,000 from DFRF; Da Silva allegedly received $221,000.

    Filho, also charged criminally, “orchestrated” the DFRF scheme with the “assistance” of Jesus, Da Silva and others, the SEC alleged at the time. The agency also has referred to Da Silva as simply “Silva.”

    Promoters who move from one online investment fraud scheme to another and help scammers grease HYIP Ponzi wheels have posed a longtime problem. Both TelexFree and DFRF largely were aimed at Spanish- and Portuguese-speaking communities, the SEC has alleged.

    And that’s not all they had in common. Investors in both MLM-style “programs,” according to court filings, sometimes paid their sponsors directly, rather than paying the companies.

    “The amount of checks and cash that the individual defendants collected directly from investors is currently unknown,” the agency said about DFRF and how money entered the system last year.

    Such mechanics can led to secret deal-making and the siphoning of funds by insiders, creating smaller frauds inside of larger ones.

    On April 4, 2016, TelexFree Trustee Stephen B. Darr asked Chief Bankruptcy Judge Melvin S. Hoffman for permission to amend a defendant class-action case to include dozens of additional defendants alleged to be “winners” in the scheme.

    Among the proposed additional defendants were “Gaspar Jesus” of Lynn, Mass., and “Eduardo N. Silva” of Orlando, Fla.

    As noted above, the SEC declined to say whether the individuals were the same ones named in the DFRF/Filho case.

    Jonathan Shapiro, a Boston defense attorney representing Gaspar C. Jesus in the DFRF/Filho case, said on Friday he “cannot confirm that the person named in the [TelexFree] bankruptcy matter is the same person I represent in the DFRF matter.”

    On Saturday, Martin R. Rosenthal, a Boston attorney representing Eduardo N. Da Silva in the DFRF/Filho case, said he had “no comment” on whether his client was the same individual named in the Trustee’s proposed amended class action.

    Darr has alleged Eduardo N. Silva received more than $2.4 million from TelexFree. Gaspar Jesus was alleged by Darr to have received $882,936. The Trustee did not return a request for comment on whether the individuals were the same ones named in the SEC’s fraud case against DFRF and Filho.

    The SEC previously tied DFRF/Filho to TelexFree defendant Sann Rodrigues.

    Both DFRF and TelexFree spread in part on YouTube.

    The surname “Filho” also is referenced among the alleged “winners” in Darr’s proposed amended class action, though not specifically Daniel Fernandes Rojo Filho.

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

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

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

    Her alleged TelexFree haul was not known at the time.

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

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

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

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

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

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

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

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

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

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



  • Tax Problems Mount For TelexFree In Brazil, As Criminal Investigations Continue

    Carlos Wanzeler of TelexFree allegedly fled from the United States to Brazil while U.S. investigators were closing in on the company in 2014.
    Carlos Wanzeler of TelexFree allegedly fled from the United States to Brazil while U.S. investigators were closing in on the company in 2014.

    It’s easy enough to forget that TelexFree and its principals have epic legal problems outside the United States, where the company has been found a Ponzi- and pyramid scheme and alleged operators James Merrill and Carlos Wanzeler are under criminal indictment.

    History shows, however, that the problems began in the Brazilian state of Acre in 2013. That’s when the state government seized millions of dollars tied to the MLM “program,” amid pyramid-scheme allegations. In Brazil, TelexFree operated through a company known as Ympactus.

    Certain U.S. TelexFree promoters who allegedly pushed the “program” after the Acre action have been charged with fraud in the United States by the SEC.

    Now, GazetaOnline (Brazil) is reporting in Portuguese that TelexFree may owe billions of reais in back taxes to Brazil’s federal government. (See translation to English by Google Translate.)

    At the same time, the publication is reporting that two criminal probes into TelexFree by Brazil’s government for “suspicion of tax evasion, money laundering, and to act without authorization in the financial and capital markets” continue, according to a Google translation.

    Brazil’s government may have a claim to a large portion of the money seized in Acre. For starters, it appears to be going after about R$130 million (roughly $36 million U.S.) of the R$600 million seized. If the federal government is successful, the $36 million would be transferred from state court in Acre to federal court in Espirito Santo.

    NOTE: Our thanks to Mikaella Campos of GazetaOnline.




  • SEC, Lawyer Clash Over Representation Of TelexFree Figure Sann Rodrigues; Lamborghini Once Owned By Accused DFRF Enterprises’ Ponzi Schemer Daniel Fernandes Rojo Filho Was Used To Pay Sann’s Legal Fees

    In court filings, the SEC says it has traced the ownership of a 2008 Lamborghini once owned by TelexFree figure Sann Rodrigues and determined the car once was owned by accused DFRF Enterprises' Ponzi schemer Daniel Fernandes Rojo Filho. This was the check Filho used to purchase the vehicle. Source: Federal court fililes. Masking by PP Blog.
    Small world between accused scammers: In court filings, the SEC says it has traced the ownership of a 2008 Lamborghini owned by TelexFree figure Sann Rodrigues and determined the car once was owned by accused DFRF Enterprises’ Ponzi schemer Daniel Fernandes Rojo Filho. This, according to an SEC exhibit, was the check Filho used to purchase the vehicle and, apparently, a 2006 Ferrari. Source: Federal court files. Masking by PP Blog.

    3RD UPDATE 9:36 AM EDT MARCH 17 U.S.A. This one features highly questionable dealings between an alleged MLM securities fraudster (TelexFree’s Sann Rodrigues) and an alleged Ponzi schemer (Daniel Fernandes Rojo Filho of DFRF Enterprises). Filho also has been linked to the alleged 2010 Finanzas Forex/Evolution Market Group Ponzi scheme, a Ponzi-board “program” that allegedly had ties to the narcotics trade.

    Suffice to say, this developing story has a lot of moving parts. Here’s our distillation:

    On March 14, the SEC alleged that Rodrigues — whose assets are frozen — had transferred two expensive cars to Florida attorney Robert Eckard. Eckard is representing Rodrigues in the SEC’s civil case against him and other TelexFree figures and also in the Justice Department’s criminal case against him for immigration fraud.

    The transfers potentially created a conflict of interest for Eckard, given that Rodrigues currently is jailed for civil contempt for violating the asset freeze and has not purged that contempt, according to the SEC. Getting out of hock with the court will cost the huckster at least $334,000, perhaps more. Rodrigues claims he cannot pay and that the court should free him and put him on a payment plan.

    U.S. District Judge Nathaniel M. Gorton of Massachusetts is hearing the case.

    Why didn’t Rodrigues apply the two cars to purge the contempt?

    Well, according to the SEC, the cars — a 2008 Lamborghini Gallardo and a 2012 Fisker Karma — were transferred to Eckard after the agency moved for contempt against Rodrigues in August 2015.

    The SEC further suggested in its filings that Eckard paid far below book value for the cars. In the case of the used Lamborghini, the SEC said, the lawyer paid only $30,000 for a car that months earlier had sold for five times that sum.

    Eckard paid only $20,000 for the Fisker Karma, which months earlier had sold for three times that sum, the SEC said. Fisker Karma is an electric luxury vehicle whose operator declared bankruptcy..

    Reached by the PP Blog today, Eckard pointed to court filings in which he says Rodrigues — strapped for cash because of the freeze — paid him with cars, rather than cash. And, the lawyer contended, no conflict existed and the SEC had cleared the cars from the asset freeze.

    Because Rodrigues paid with cars, not cash, it created an unusual situation with vehicle taxes, Eckard said. He added that he consulted with authorities in Pasco County and with the Florida Department of Revenue when transferring the cars to his name.

    “I did not pay anything for the vehicle, but was required to put an amount down for tax purposes, since it was not a gift,” Eckard advised Gorton about the Lamborghini.

    The Fisker Karma was accepted from Rodrigues as payment for legal fees and proved to be a lemon with bad electrical parts and bad tires, Eckard contended.

    Eckard is moving to strike the SEC’s assertions from the court docket.

    Both Rodrigues and Filho are Brazilian by birth and Florida residents. How they came together remains unclear.

    The SEC linked Rodrigues to Filho last year.

    NOTE: Our thanks to the ASD Updates Blog.

    UPDATE 3:53 P.M. EDT U.S.A. MARCH 22: Looks as though Rodrigues will be released from jail, after coming up with a plan to purge the contempt. This matter is separate from the SEC’s securities-fraud case against him filed in April 2014.




  • TelexFree Trustee Seeks Approval Of Settlement With PricewaterhouseCoopers

    newtelexfreelogoBig Four accounting firm Pricewaterhouse Coopers posted more than $115,000 in fees from the TelexFree Ponzi/pyramid scheme and will pay it all back under the terms of a stipulated settlement with TelexFree Trustee Stephen B. Darr, according to court filings.

    PwC admits no liability in the settlement, which requires the approval of Chief Bankruptcy Judge Melvin S. Hoffman of the District of Massachusetts.

    In January 2014 — just three months before TelexFree collapsed in a pile of Ponzi rubble — the firm hired PwC to provide “tax consulting and tax structuring advice,” according to a stipulation filed by Darr and PwC.

    PwC issued three invoices in the coming weeks, and TelexFree paid them all, according to the stipulation. These totaled $115,335.66. The document suggests TelexFree may have made a $50,000 payment to PwC in advance of the receipt of an invoice and in the final hours before the bankruptcy filing.

    This invoice was dated April 15, 2014, but TelexFree paid it on April 11 of that year. Two days later, according to records, TelexFree filed for bankruptcy in Nevada.

    Darr contended that payments made by TelexFree to PwC were preferential and thus recoverable. The trustee also “raised issues regarding the value of the services that were provided by PwC to TelexFree, LLC and whether such payments could be recovered as fraudulent transfers.”

    Read the stipulation.




  • At Chicago Symposium, SEC Highlights Pyramid Scheme Task Force And Notes ‘Whack-A-Mole’ Nature Of Online Scams

    “These frauds are easily duplicated, and at times, we find ourselves playing ‘whack-a-mole,’ chasing the same set of fraudsters who, after feeling a bit of heat, simply close down one scheme and quickly set up a new one under a different name.” — Andrew Ceresney, SEC Enforcement Division director, March 2, 2016

    EDITOR’S NOTE: Type “whack-a-mole” into the PP Blog’s search box near the upper-right corner to find our stories that touch on frauds rising to replace other frauds. Examples include so-called “programs” that claim to be “advertising” companies or to have an “advertising” component — for example, Zeek Rewards, TelexFree, Banners Broker and AdSurfDaily. If you’re in an “advertising” program such as MyAdvertisingPays (MAPS) or TrafficMonsoon, you should asking some serious questions and thinking about whether serial fraudsters are whacking you.

    When one scheme collapses, another quickly rises to replace it. Many such schemes operate simultaneously, drafting the unwary into multiple miseries. Ill-gotten gains or losses pile up in the billions of dollars. Yes, billions.

    Of course, “whack-a-mole” is not limited to “advertising” schemes. There are “cycler” schemes such as “The Achieve Community” and its Ponzi-board equivalents. Meanwhile, there are HYIP schemes such as “Profitable Sunrise” and its Ponzi-board equivalents. MoneyMakerGroup and TalkGold are examples of Ponzi boards. The scammers now have added social media such as YouTube, Facebook and Twitter to their arsenal. Vulnerable people and population groups are constant targets.

    Scams such as WCM777 that claim to have a “product” also are part of “whack-a-mole.”

    **________________________________**

    cautionflagLet’s begin by encouraging you to read Andrew Ceresney’s opening remarks at a joint symposium today sponsored by the SEC and the University of Illinois at Chicago. (Link at bottom of story. Also see Twitter links.)

    UIC promoted the event on its website, titling it “How to Detect and Combat Fraudsters Who Target Our Immigrant Groups and Affinity Communities Through Pyramid and Ponzi Schemes.” The institution notes it is “one of the most ethnically and culturally diverse universities in the country,” so it was a perfect place to host such a confab.

    Ceresney is the SEC’s director of enforcement. One of the things the PP Blog noted while reading the text of his remarks is that it included a subhead titled “Pyramid Schemes and Multi-Level Marketing.”

    This reflected on ongoing effort by the SEC to educate the public that the presence of a “product” in a scheme does not necessarily mean no scam is under way. Many MLMers erroneously believe that a “product” (or purported one) offered for sale cures all ills. That is simply not the case. A year ago in Congressional testimony, the director spoke about a “coordinated effort” to disrupt pyramid schemes.

    Ceresney today provided more details on a new Task Force that is combating pyramid fraud. Here is part of his remarks (italics/bolding added):

    After seeing an increase in complaints regarding pyramid schemes and affinity fraud, the SEC formed a nationwide Pyramid Scheme Task Force in June 2014 to provide a disciplined approach to halting the momentum of illegal pyramid scheme activities in the United States. The goal of the Task Force is to target these schemes by aggressively enforcing existing securities laws and increasing public awareness of this activity.

    The Division is deploying resources to disrupt these schemes through a coordinated effort of timely, aggressive enforcement actions along with community outreach and investor education. More than fifty SEC staff members are part of the nationwide Task Force, which is enhancing its enforcement reach by collaborating with other agencies and law enforcement authorities. We are also using new analytic techniques to identify patterns and common threads, thereby permitting earlier detection of potential fraudulent schemes.

    Collaboration with other regulators, including criminal authorities, is an important goal of the Task Force. To advance this goal, the Task Force has hosted an interagency summit attended by over 200 representatives from other federal and state agencies and has presented at local trainings and agency-specific conferences. And, of course, we have partnered with other regulators and criminal authorities to bring high-impact actions in this space. For example, one month after we filed our enforcement action against the operators of the TelexFree pyramid scheme, two of TelexFree’s principals were charged by the criminal authorities.

    Will the “program” you’re currently pitching become the subject of a “high-impact action?” Time will tell.

    In 11 SEC actions since 2012 involving pyramid operators, the damage resulted in ill-gotten gains or losses totaling more than $4.2 billion, Ceresney said today.

    Read his opening remarks at today’s Chicago symposium.

  • DEVELOPING STORY: TelexFree Rep Sued By Trustee Claims Herbalife ‘Executives’ And ‘Personnel’ Helped Sell Him On Alleged Ponzi/Pyramid Deal

    newtelexfreelogoDEVELOPING STORY: (Updated 9:23 p.m. ET U.S.A.) A TelexFree rep being sued by the court-appointed bankruptcy trustee for the return of more than $2.6 million in alleged winnings from the judicially declared Ponzi- and pyramid scheme claims that Herbalife “executives” and “personnel” attended a March 2014 TelexFree event in Boston and helped sell him on the ill-fated deal.

    In January, Trustee Stephen B. Darr sued Jose Neto of Worcester, Mass., in one of two proposed defendant class actions that includes thousands of other alleged TelexFree “winners” globally. Neto was one of 23 named winners with U.S. addresses. The other lawsuit is against 33 named winners with addresses outside the United States. All in all, the cases could affect nearly 100,000 TelexFree members who allegedly received fraudulent transfers.

    Neto responded to the lawsuit in a filing docketed Feb. 16. Among other things, he claims he believes TelexFree was a legitimate business and that executives from both TelexFree and Herbalife showed proof of TelexFree’s legitimacy.

    From the body of Neto’s response (italics added/light editing performed):

    TelexFree was presented to me as a multi-level marketing network, similar to Herbalife . . . (as a matter of fact, executives of Herbalife gave us several lectures and workshops about this topic). As such, it is intrinsic to the nature of this business that the highest level members, meaning the ones that started to work with the product before and built a stronger network, will have higher gains compared to the others.

    From an affidavit by Neto (italics added):

    In March 2014 at the International Love Event in Boston (ON YOUTUBE), TelexFree announced that it would be launching its own credit card, and people could no longer use money order or cashier’s check to buy more “partnership shares”, but solely the “TelexFree Card”. On this same, held for over 4,000 people, Carlos Wanzeler and James Merrill asserted to us once again that the company was 100% in compliance with the laws and along with the Herba Life personnel, he showed us on a PowerPoint presentation the certificates from the Secretary of State.

    The filing by Neto does not name the Herbalife “executives” or “personnel” on hand at the Boston TelexFree event. Wanzeler and Merrill are TelexFree executives who were charged criminally by the office of U.S. Attorney Carmen Ortiz of the District of Massachusetts after an investigation by the U.S. Department of Homeland Security. The SEC has sued Wanzeler and Merrill.

    Herbalife, which is confronting a Federal Trade Commission probe over its business practices, did not immediately respond to a request for comment from the PP Blog on Neto’s claims. The claims raise new questions about whether MLM firms may be targeting vulnerable population groups and the extent to which Herbalife reps also were involved in TelexFree.

    Neto claims in his filing that he recruited 24 participants for TelexFree. Many members of his downline appear to have Hispanic names. The SEC has said TelexFree targeted Spanish- and Portuguese-speaking communities.

    Activist investor and short-seller Bill Ackman has claimed Herbalife targets vulnerable population groups and is a pyramid scheme. Herbalife had denied the allegations.

    Neto claims he has paid taxes on TelexFree money he earned legitimately and that Darr is trying to hold him accountable for money he never removed from the program.

     

     

  • TELEXFREE CLASS-ACTION: Judge Restrains Assets Of 2 Alleged Promoters, Including Scott Miller And ‘MyAdvertisingPays’ Pitchman Daniil Shoyfer

    ponzinews1Let’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.”

    The class-action lawyers already have accused Shoyfer of promoting “MyAdvertisingPays” on the heels of TelexFree. They alleged MAPS, as it is known, is another Ponzi scheme.

    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.”

    NOTE: Our thanks to the ASD Updates Blog.




     

     

  • TelexFree’s Merrill Concerned About Internet ‘Spectacle’

    EDITOR’S NOTE: This is a follow-up to our Feb. 4 article that reported TelexFree figure James Merrill potentially could be forced to take the Fifth Amendment in front of a large audience at a music hall in Worcester, Mass., on Feb. 10.

    **____________________________**

    James Merrill
    James Merrill

    Forcing him to take the Fifth Amendment tomorrow at Mechanics Hall in front of an expected large crowd at a meeting of TelexFree creditors could affect his right to a fair trial in the criminal case against him in October, James Merrill argued yesterday in bankruptcy court.

    Through attorney Robert Goldstein, Merrill argued that a “spectacle” easily could ensue and that all of it could end up on the Internet.

    Trustee Stephen B. Darr’s plan to hold the meeting at the hall may set the stage for news outlets to photograph or record Merrill’s invocation of his right not to incriminate himself and for attendees with cell phones to do the same thing and “widely disseminate the spectacle on the Internet,” Merrill argued.

    Merrill will “appropriately, and necessarily” invoke the Fifth if forced to appear “and will respectfully decline to answer any questions regarding” TelexFree, which filed for Chapter 11 protection on a Sunday evening in April 2014.

    Shortly after the filing, state and federal regulators called TelexFree a massive, cross-border fraud. Darr went on to deem it a Ponzi- and pyramid scheme, and Chief Bankruptcy Judge Melvin S. Hoffman agreed. Merrill and Carlos Wanzeler, another TelexFree executive, were charged criminally in 2014, after an investigation by the U.S. Department of Homeland Security.

    TelexFree, which operated over the Internet and may have produced about $3 billion in illicit transactions in about two years, was the top story in DHS’s Daily Open Source Infrastructure Report on April 17, 2014.

    In the 2008 AdSurfDaily Ponzi scheme, accused operator Andy Bowdoin invoked his Fifth Amendment right at a civil proceeding while a parallel criminal investigation was under way. Some ASD supporters immediately used the Internet to circulate a story that Bowdoin was “too honest” to testify.

    ASD, a $119 million Ponzi scheme that ultimately sent Bowdoin to prison, and TelexFree operated in similar fashion. Prosecutors have described TelexFree as having cult-like qualities.

    Read Merrill’s brief. Hoffman has ordered Darr’s motion to compel Merrill’s attendance “continued generally.” How that would affect tomorrow’s meeting was not immediately clear.