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Tag: Universo FoneClub

  • BULLETIN: ‘The DFRF Fraud Is Much Larger Than It First Appeared,’ SEC Tells Court

    dfrflogoBULLETIN: (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.

    SEC investigators initially tied Rodrigues to DFRF and alleged operator Daniel Fernandes Rojo Filho in a complaint last month. New documents filed by the agency yesterday hint that other DFRF insiders also were involved in 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.

    NOTE: Our thanks to the ASD Updates Blog.

  • URGENT >> BULLETIN >> MOVING: SEC Charges DFRF Enterprises In Ponzi- And Pyramid Scheme Case; Agency Ties TelexFree Figure Sann Rodrigues To Charged DFRF Operator Daniel Fernandes Rojo Filho

    breakingnews72URGENT >> 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.

    The British Columbia Securities Commission issued a fraud warning against DFRF in May.

    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.

    Like Rodrigues, Filho is a Brazilian who has conducted business in the United States. He previously was linked to the noxious Evolution Market Group/Finanzas Forex case in 2010. The PP Blog first wrote about Filho more than five years ago, in May 2010.

    A federal judge has approved an asset freeze in the DFRF case, the SEC said.

    BehindMLM.com reported in May 2015 that DFRF had dropped the names of the SEC and the FBI in a YouTube sales pitch uploaded in December 2014.

    From a statement today by the SEC (italics added):

    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.

    Read the SEC’s DFRF complaint.

  • TelexFree Figure Sann Rodrigues Reportedly Detained Again; MLM Huckster Is World Traveler, Documents Say

    From a TelexFree promo in 2014.
    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.)

    TelexFree, in 2014, advertised Rodrigues as its “TOP PROMOTER IN THE WORLD” and as a headliner at its purported international convention in Spain on March 1 and 2. He later was charged civilly by the SEC with securities fraud.

    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.

    NOTE: Our thanks to the ASD Updates Blog.