UPDATED 6:20 P.M. EDT U.S.A. The Indiana Utility Regulatory Commission rejected TelexFree’s telecom application on June 11, 2014, according to records in the state.
TelexFree filed the application on March 24, requesting “CONFIDENTIAL TREATMENT OF THE FINANCIALS OF TELEXFREE, LLC,” according to records.
On April 13, TelexFree filed for bankruptcy protection in Nevada. On April 29, Indiana informed TelexFree via a docket entry that information it had submitted in March was “Missing [an] affidavit to support the March 24, 2014, request for confidential treatment of certain financial, technical, and/or managerial information.”
The state also noted that TelexFree had provided “Inconsistent descriptions of the services Applicant proposes to offer in Indiana.”
Indiana gave TelexFree until May 15 to correct the deficiencies. No corrections were received, according to the state.
The state formally rejected TelexFree’s application on June 11.
One of the issues with TelexFree is whether it supplied false, misleading or inconsistent information to various state regulators during the process of applying for telecom registrations.
Certain regulatory filings by TelexFree in early 2014 suggest it was financially capable of delivering telecom services and even strong enough to provide intracompany loans to other TelexFree-related businesses. But by April 13, TelexFree was in bankruptcy court seeking to reject its contracts with promoters — this after adopting a new compensation plan on March 9.
On April 17, the U.S. Securities and Exchange Commission publicly accused former TelexFree President James Merrill of making false statements about how long TelexFree had been in the VOIP business.
The SEC also accused Merrill and other TelexFree defendants of not disclosing that “several banks and at least one payment processor stopped doing business with TelexFree, apparently due to concerns about the legality of its multilevel marketing program.”
Certain financial documents prepared by former TelexFree accountant Joe Craft referenced asserted loans TelexFree made to other TelexFree enterprises, according to the SEC.
After assuring state telecom regulators that it was healthy, records show, TelexFree went to bankruptcy court only weeks later.
“. . . defendants TelexFree, Inc. and TelexFree, LLC and relief defendant TelexFree Financial Inc. filed for bankruptcy in Nevada under Chapter 11,” the SEC alleged in April. “The three companies claimed to have liabilities of as much as $600 million but assets of no more than $120 million.”
In a filing on the docket of the TelexFree bankruptcy case, Craft contends that TelexFree plaintiffs who assert they are owed money have “fully recovered their ‘investments’ through benefits received from the TelexFree entities and are not owed anything.”
TelexFree managers or executives James Merrill and Carlos Wanzeler were indicted last month on criminal charges of wire-fraud and wire-fraud conspiracy.
In telecom filings docketed in Alabama on March 20, TelexFree asserted it was “financially qualified” to operate in the state and that its “current financials Show considerable net worth.” A hearing was scheduled for April 10. Prior to that date, however, TelexFree asked for a postponement for a month, listing unspecified “scheduling conflicts” as the reason.
With the April 10 Alabama hearing postponed, TelexFree was in bankruptcy court just three days later.
(UPDATED 11:30 A.M. EDT MAY 21 U.S.A. See Update at bottom of this brief, originally published May 20.)
TelexFree figure James Merrill was unable to persuade a federal magistrate judge to free him, the PP Blog has learned.
Judge David Hennessy declined Merrill’s bail application today, the office of U.S. Attorney Carmen Ortiz said moments ago.
Merrill, 53, was arrested and detained May 9 on wire-fraud conspiracy charges. TelexFree co-owner Carlos Wanzeler, 45, has been labeled a fugitive. Wanzeler’s wife Katia, meanwhile, was arrested last week and detained as a material witness.
May 21 update: The Boston Globe is reporting (see Globe Tweet in Comments thread below) that John F. Merrill, the brother of James Merrill, has been subpoenaed by the Massachusetts Securities Division led by Commonwealth Secretary William Galvin. John Merrill is a banker at Fidelity Bank.
See March 9, 2014, PP Blog report. The report references a February 2014 document on file at the Washington State Utilities and Transportation Commission that purported to be a TelexFree LLC “Balance Sheet.” The document lists two accounts at Fidelity Bank and outlines purported TelexFree loans to other TelexFree-related enterprises, including TelexElectric LLLP, Telexfree Financial Inc., TelexMobile and Ympactus.
When the Massachusetts Securities Division filed an action against TelexFree last month, the state alleged that TelexFree financial filings with the Washington State Utilities and Transportation Commission were at odds with information TelexFree had provided the investigators in Massachusetts.
Screen shot: Part of a letter from the Minnesota Department of Commerce to the state Public Utilities Commission.
BULLETIN: The Minnesota Department of Commerce has asked the state Public Utilities Commission to deny TelexFree’s authorization to provide long-distance service in the state.
Minnesota regulators now are questioning whether TelexFree financial and background information submitted to the state to gain telecom authority was accurate. The PUC granted the authority on April 18, after the Department of Commerce recommended approval of the application.
But a Department of Commerce letter and attachment to the PUC dated yesterday asks the agency to mothball TelexFree “until it demonstrates that the information provided in its application is accurate.”
The move comes on the heels of TelexFree’s April 13 bankruptcy filing in Nevada and fraud charges filed against the firm on April 15 by the Massachusetts Securities Division and the U.S. Securities and Exchange Commission.
In the letter and attachment from the Department of Commerce, the agency asked the PUC to question whether TelexFree was in any financial position to provide service in Minnesota and whether “any other factors” exisited that could be relevant in determining its suitability to operate in the state.
Among the considerations in granting a telecom license is “the extent to which the applicant has had any civil, criminal, or administrative action taken against it in connection with the applicant’s provision of telecommunications services,” the Department advised the PUC.
“A certificate to provide local facilities-based service must not be granted unless the applicant establishes that it has the financial, technical, and managerial capability to provide the services described in its petition consistent with the public interest,” the Department said.
In asking the PUC to deny TelexFree’s authority, the Department pointed to an April 18 email from “TELEX FREE’s former [telecom-registration] representative, Joseph Isaacs.”
The Isaacs’ email, the Department said, “indicates that TELEXFREE provided false and misleading information to the Department in its application for certification to provide long distance service.”
From the Department’s assertions to the PUC (italics added):
The allegedly misleading information provided in TELEX FREE’s application relate to the basic filing requirements of Minn. Rules pts. 7812.0300, subpt. 2 (E, F, and N): civil and administrative action pending, financial statements, and information relating to the technical, managerial and financial capabilities of TELEX FREE in support of its application for certification. The allegedly misleading information in the TELEX FREE’s application relate to the decision criteria in Minn. Rules pt. 7812.0300, subpt. 2 (C, D, and H).
If the Department had known this information, it would not have recommended approval of the application for certification to provide long distance service, without further investigation.
TelexFree operates as an MLM. Some of its members now are asking a federal bankruptcy judge to “bail out” the “program.”
Beyond that, the U.S. Trustee for the region in which TelexFree filed its bankruptcy petition (Nevada) said in court filings that “[t]here is compelling evidence of fraud, dishonesty and gross mismanagement of the affairs of the TelexFree debtor entities, TelexFree, LLC, TelexFree, Inc. and TelexFree Financial, Inc.”
TelexFree LLC was the entity granted authority to operate in Minnesota on April 18.
Tracy Hope Davis, the trustee, also alleged there are “reasonable grounds” to believe that “criminal conduct” occurred at TelexFree.
Challenges to its authority to provide telecom services could affect TelexFree’s ability to persuade a bankruptcy judge that it could continue as a going concern. Litigation against TelexFree is occurring at both the state and federal levels, and the firm also might face the prospect of class-action lawsuits from its distributors.
The Massachusetts Securities Division alleged on April 15 that information provided investigators in that state did not agree with information provided the Washington State Utilities and Transportation Commission.
Records in Nevada show that TelexFree’s pending telecom application in the state potentially could be denied for failure to advertise its application in newspapers as required by the state.
Although ads did appear in two newspapers, they did not appear as required in three others, records show.
Virtually no one was safe from the TelexFree MLM financial menace, documents suggest. Not even the government.
How far and deep did the alleged TelexFree fraud pollution flow? The answer remains unclear a week after Ponzi- and pyramid allegations were filed against the enterprise, but documents suggest pollution at hundreds of thousands of points of contact across a spectrum of vendors, participants and government agencies.
It may be the largest MLM HYIP fraud in world history.
Records in Nevada show that the state Public Utilities Commission ordered TelexFree to pay for newspaper ads publicizing its application to become a telecom provider on April 9, just four days before the firm filed for bankruptcy protection in the state.
Though regulatory requirements vary from state to state, a firm may be asked to pay an application fee and generally must show it can meet the financial demands of being in the telecom business. Hearings may be scheduled to discuss applications and consider objections to them, thus creating the need to pay for public notices on websites and in newspapers.
Given assertions by regulators that TelexFree was a massive Ponzi and pyramid whose purported telecommunications product masked an epic securities-fraud scheme and contributed very little to its overall operation, it is possible that various TelexFree telecom applications in various states were paid for with Ponzi proceeds and that TelexFree vendors and consultants also were being paid with fraud proceeds.
TelexFree caused Nevada, for example, to be paid a $200 application fee. It caused Minnesota to be paid almost three times that sum, according to records. Given the nature of the TelexFree fraud allegations, an untold number of vendors, government agencies or downstream recipients of TelexFree money could have been paid with Ponzi proceeds.
By some accounts, TelexFree had hundreds of thousands of member accounts — people from all over the world who were being paid by the enterprise to recruit even more people.
Polluted money flowing to multiple points is one of the key dangers of HYIP Ponzi schemes. On April 17, TelexFree was the top story in the Department of Homeland Security’s daily infrastructure report.
Earlier, on April 5, a TelexFree promo appeared online in which TelexFree marketing executive Steve Labriola claimed the enterprise had picked up “550,000 new customers in [the] U.S.A. alone” since March 9. Logos of major American media firms rolled on the screen during the Labriola-narrated promo, including the logo of the Las Vegas Review Journal, Nevada’s largest newspaper. The promo implied TelexFree had the backing of the media. Regardless of the suggestion, however, the reality was that a PR news service had caused TelexFree-authored puff pieces to appear on the websites of the prominent media outlets.
Four days later, the Nevada PUC advised TelexFree that the Review-Journal was one of the newspapers in which TelexFree was required to advertise its telecom application. If ever there was a moment of pregnant irony in the MLM sphere, this was it.
The ads, according to the commission, needed to appear in a “minimum one column by three inch ad with black borders on all sides” no later than April 20.
Because TelexFree had asked that its financial reports to Nevada be filed under seal, Nevada Attorney General Catherine Cortez Masto filed a “Notice of Intent to Intervene” in the application process to represent “the public interest,” according to records.
Then-TelexFree President Jim Merrill and TelexFree telecom consultant Joseph Isaacs were copied on the PUC’s April 9 letter that advised TelexFree it was the firm’s responsibility to “contact the newspapers and make timely payment arrangements” for the required telecom-licensing ads, according to Nevada records.
Whether that occurred is unclear.
The PUC warned TelexFree that “your filing may be dismissed for failure to make payments timely.”
TelexFree’s bankruptcy filing occurred four days later, on April 13. Earlier, on April 4, TelexFree — through Florida-based Isaacs — advised the state of Alabama that it needed a hearing scheduled for April 10 to consider its telecom application postponed “for a month” owing to unspecified “scheduling conflicts.”
In Alabama filings, TelexFree contended that it had “total income” of nearly $700 million in 2013 and “net income” of more than $36 million.
Separately, in Minnesota filings in March, TelexFree made the same financial assertions and requested confidential treatment. Minnesota nevertheless published on its website the financial documents TelexFree submitted. Records show that Isaacs’ company sent Minnesota a check for $570 on March 24 to cover filing fees.
The Florida telecom consulting company of Joseph Isaacs made a payment of $570 to the state of Minnesota to cover TelexFree’s filing fees, according to records. Isaacs later would contend he’d been duped by TelexFree, an alleged Ponzi- and pyramid scheme that gathered more than $1.2 billion.
By April 15, the SEC was in federal court accusing Labriola and other TelexFree executives of fraud. In its complaint, the SEC made a specific reference to the Labriola video with the rolling logos of media companies and claims TelexFree had picked up more than 500,000 customers in less than a month. (The SEC notes a separate publication of the Labriola video on April 6, but the video appears to have been published on a different site a day earlier.)
In addition to the rolling media logos and claims TelexFree had scored more than half a million new customers, the video featured Labriola complaining about negative TelexFree coverage on Blogs and compared the firm’s experience with bad press to that of MLM companies such as Amway and Herbalife. Herbalife, an MLM company that promotes nutrition supplements, also is the subject of a government probe. It has denied wrongdoing.
The precise reason why Herbalife is under investigation is not publicly known. What is known is that part of the investigation reportedly reaches into the state of Massachusetts. (See April 11 Reuters report with a dateline of “New York/Boston.”)
TelexFree had an operation in Massachusetts. The SEC accused the firm of targeting Brazilian and Dominican communities. Hedge-fund manager Bill Ackman has contended that Herbalife is a pyramid scheme that targets vulnerable population groups.
“I know,” Labriola said in the April 5 video. “You’ve heard the Blogs. I’ve heard the Blogs. I hear every day, ‘The Blogs say this, the Blogs say that.’ You know what’s good about the Blogs talking about us? It means we’re growing. Have you heard about Amway? Herbalife? The big companies out there that have achieved their levels — Bloggers hit them all the time. So, the positive thing is [that] Bloggers are talking about us ’cause we’re growing, ’cause you’re growing the business. They will continue to hit companies that are growing.”
TelexFree was in bankruptcy court eight days later, on April 13. Promoters have claimed $289 sent to the firm returned $1,040 in a year and that $15,125 returned $57,200. TelexFree says it is a telecom firm, but also allegedly sold something called “AdCentral” packages that provided a return promoters described as “guaranteed.”
By April 18, according to filings elsewhere, Isaacs had contacted the Washington State Utilities and Transportation Commission and told regulators there that he believed he’d been duped on matters pertaining to TelexFree’s financial affairs, operations and ability to meet the demands of a competitive telecom company.
“It has come to my attention this week that my client TelexFree, LLC, whom has applied for or has recently been approved to provide telecommunications services in your state, has misrepresented their intentions, their business model, their customer base and the source of all of their revenue, income and profits declared on their 2013 financial statements that were provided to this commission for the approval of their petitions (applications in some jurisdictions),” Isaacs wrote.
Included with Isaacs letter to Washington state were copies of fraud complaints that had been filed against TelexFree April 15 by the Massachusetts Securities Division and the U.S. Securities and Exchange Commission.
“Please disassociate my firm with these alleged [TelexFree] crooks,” Isaacs asked Washington state regulators.
As the PP Blog reported on April 15, one of the contentions against TelexFree by the Massachusetts Securities Division was that information TelexFree had provided Massachusetts investigators was at odds with information TelexFree had provided the Washington State Utilities and Transportation Commission.
Massachusetts also alleged that TelexFree was a massive Ponzi- and pyramid scheme that had gathered more than $1.2 billion.
When the SEC sued TelexFree on the same day, the agency contended that TelexFree co-owners James Merrill and Carlos Wanzeler and TelexFree CFO Joseph M. Craft had engaged in securities fraud and that the firm’s telecommunications product served as a front to mask an investment-fraud scheme.
On March 4, 2014, the PP Blog noted that Zeek Rewards, an MLM firm the SEC sued in 2012 amid allegations it had gathered hundreds of millions of dollars through a combined Ponzi- and pyramid scheme, appeared to have a high number of immigrants in its membership ranks.
A court-appointed receiver’s listing of alleged Zeek Ponzi winners living in the United States showed about 45 people with the last name of “Johnson” and about 52 with the name of “Smith.” By contrast, the document listed about 67 people with the name of “Wang,” about about 61 with the name “Tran,” and about 146 with the name of “Nguyen.” (See story and Comments thread.)
The document raises questions about whether American MLM firms are targeting immigrants and selling an improbable tale of riches to them. The TelexFree probe has led to similar questions.
There also may be concern across U.S. government agencies that some MLMers simply move from one fraud scheme to another. Multiple TelexFree members, for instance, appear to have been members and winners in the Zeek scheme. And some alleged Zeek winners also were participants in the AdSurfDaily MLM Ponzi scheme that collapsed in 2008.
URGENT >> BULLETIN >> MOVING: (11th update 3:03 p.m. EDT U.S.A.) The state of Massachusetts has alleged that TelexFree is a “massive” Ponzi- and pyramid scheme that gathered more than $1.2 billion and targeted the Brazilian community.
In alleged dollar volume, TelexFree appears to be at approximately the same level of the epic Scott Rothstein Ponzi and racketeering scheme in Florida in 2009. Rothstein is serving a 50-year prison sentence.
TelexFree, the office of Massachusetts Commonwealth Secretary William Galvin alleged in an action, raised $90 million in Massachusetts alone. The scheme, according to the filing, is “untenable without a continuous influx of new capital.”
The 46-page complaint paints a picture of an incredibly elaborate domestic and international fraud scheme featuring interconnected companies and operated by individuals who told tales of incredible riches — at one time supplementing the story by plunking down more than $100,000 at a Mercedes-Benz dealership in Orlando, Fla., to acquire what effectively were stage props to lure the masses.
A check uncovered by Massachusetts investigators, according to the complaint, had a memo line that read, “Cars for Extravaganza . . .”
Despite stage props, “lavish meetings,” sea cruises and suggestions TelexFree somehow was affiliated with jewels of American business, TelexFree was racking up liabilities in the billions of dollars and encountering serious problems from its financial vendors, the complaint alleged.
“The financial activities of TelexFREE have raised red flags in many United States[‘] financial institutions where it maintains accounts,” the complaint alleges.
One of those vendors was a Massachusetts bank that booted TelexFree “after only 2 months,” the state alleged.
Another vendor — a processor of credit cards — dumped TelexFree “after less than 6 months,” the state alleged.
Meanwhile, the state alleged, TelexFree financial filings with the Washington State Utilities and Transportation Commission were at odds with information TelexFree had provided the investigators in Massachusetts.
At the same time, Massachusetts alleged, TelexFree was turning a blind eye to an investigation in Brazil and effectively evading an asset freeze imposed there on an arm known as Ympactus.
“TelexFREE fails to verify investor residency information — information manipulated to circumvent legal issues TelexFREE faces elsewhere,” the state alleged.
In fact, the state further alleged, one witness testified that he’d recruited affiliates in Brazil after Ympactus’ assets were frozen and its recruitment activities were enjoined.
Cash payments to Brazilian affiliates were made despite the action in Brazil, the state alleged, further alleging that affiliates in Brazil appear to have posed as residents of the United States or England.
Moreover, the state alleged, TelexFree members had set up side businesses in which their recruits paid them directly, rather than paying TelexFree. (Editor’s note: This situation exists in many HYIP scams.)
“These participants received uncontrolled cash deposits outside of the TelexFree system,” the state alleged.
The state also expressed concerns about a black-market economy popping up around TelexFree.
One Massachusetts entity asserted that it bought “TelexFree packages, and all sorts of real estate within the U.S.A. or foreign countries,” the state alleged, further alleging that the enterprise asserted it was backed by “Dubai investors.”
On Feb. 14 — Valentine’s Day — an ad appeared “seeking to sell an automobile in the Commonwealth in return for [TelexFree] AdCentral Packages and AdCentral Family Packages,” the state alleged.
TelexFree also featured Sann Rodrigues as its top pitchman, the state alleged.
Rodrigues “had operated a similar multi-level marketing phone card fraud shuttered by the SEC in 2006,” the state alleged.
Named respondents in the Massachusetts action were TelexFree Inc. of Massachusetts and TelexFree LLC of Nevada.
“Related Parties” were identified as Carlos Nataniel Wanzeler of Northborough, Mass.; James Matthew Merrill of Ashland Mass.; Steven M. Labriole (also known as Steve Labriola) of Upton, Mass.; Carlos Roberto Costa of Brazil; Fabio N. Wanzeler of Coral Springs, Fla.; Ympactus Comercial LTDA-ME of Brazil; Lyvia Mara Campista Wanzeler (no residency listed); Disk A Vontade Telefonia Ltda (also known as Diskavontade and Disk) of Brazil and Massachusetts; Brazilian Help Inc. of Massachusetts; Sanderley R. De Vasconcelos (also known as Sann Rogrigues) of Orlando, Fla.; and TelexFree Financial Inc. of Florida.
Among the assertions by Galvin’s investigators is that TelexFree is a combined Ponzi- and pyramid scheme that engaged in the sale of fraudulent and unregistered securities and allowed and encouraged “participants to structure deposits in order to avoid heightened bank scrutiny.”
Structuring transactions is a somewhat common element in Ponzi schemes.
The Washington State Utilities and Transportation Commission has rejected a bid by TelexFree LLC to register as a telecommunications company.
TelexFree LLC is not registered as a corporation in Washington state and therefore is ineligible to be registered as a telecommunications firm in the state, the commission said in a finding dated March 13.
How the order will affect TelexFree reps in Washington state was not immediately clear this evening. Also unclear is whether TelexFree LLC will encounter similar problems in other U.S. states. TelexFree LLC is part of an enterprise that already is offering a VOIP product and says it is expanding into cell phones, apps, credit repair and financial advice.
“THE COMMISSION REJECTS the application and petition of Telexfree, LLC, in its entirety,” the order reads in part.
TelexFree LLC’s rejected filing was submitted Feb. 13 by Joseph Isaacs, a “consultant” from Palm Harbor, Fla., according to the state. A “Telexfree LLC Balance Sheet” is listed on the state’s website as part of the submission. The balance-sheet document “properties” lists “JoeCraft” as the author.
As the PP Blog reported on March 9, the balance sheet claims TelexFree LLC has provided millions of dollars in loans to other TelexFree enterprises.
One loan, according to the document, was for more than $3.8 million and went to an entity known as Telexfree Financial Inc. Another loan of more than $2.022 million went to an entity known as TelexElectric LLLP.
In addition, the Washington state document lists a loan of more than $500,000 to an entity known as TelexMobile. Another loan of more than $291,800 went to an entity described as Ympactus. A TelexFree-related entity known as Ympactus Comercial Ltd. is based in Brazil.
TelexFree executive Carlos Costa is associated with Ympactus. Costa said yesterday that TelexFree had been assessed a tax penalty in Brazil of about $30 million.
The government of Rwanda has announced that a TelexFree enterprise has been banned in the African nation after a joint probe with Rwanda’s central bank. Rwanda said it was concerned that the enterprise posed a money-laundering risk. TelexFree, which operates in Massachusetts as TelexFree Inc., is under investigation in its home state. Brazilian prosecutors have called TelexFree a pyramid scheme.
The order in Washington state leaves open the door for TelexFree LLC, which is based in Nevada, to reapply for telecommunications registration if it gets properly registered as a corporation in Washington.
TelexFree LLC appears to have 14 days from March 14 to challenge the order. March 14 was the date the order was posted on the state’s website.
Part of the TelexFree LLC “Balance Sheet” as it appears on the website of the Washington state Utilities and Transportation Commission.
A document published on the website of the Washington State Utilities and Transportation Commission claims that TelexFree LLC has provided millions of dollars in loans to other TelexFree enterprises, including a Nevada entity known as TelexElectric LLLP.
The loan sum was more than $2.022 million, according to the document. The business purpose of TelexElectric was not immediately clear. Also unclear is why the document was published on Washington state’s government website and whether members of the TelexFree MLM “program” knew they were funding intracompany loans.
TelexElectric was formed in Nevada on Dec. 2, 2013, according to Nevada records. TelexFree LLC also is a Nevada business. Both firms list TelexFree Inc. executives James Merrill and Carlos Wanzeler as partners or managers. TelexFree Inc., headed by Merrill and Wanzeler, is based in Massachusetts. Brazilian TelexFree executive Carlos Costa, who is or was associated with TelexFree LLC, is listed in Nevada as a “historical” TelexElectric general partner.
From Google search results.
The Washington state document is dubbed “Telexfree LLC Balance Sheet As of December 31, 2013.” The document claims that, in addition to the $2 million-plus loan to TelexElectric, a loan of more than $3.8 million was provided to an entity known as Telexfree Financial Inc.
Telexfree Financial appears to be a Florida entity under the control of Merrill and Wanzeler. The firm, which was formed on Dec. 26, 2013, lists an address in Coconut Creek, Broward County, according to Florida records.
Meanwhile, the Washington state document lists a loan of more than $500,000 to an entity known as TelexMobile. Where TelexMobile is based could not immediately be determined.
In addition to the loans to TelexElectric, Telexfree Financial Inc. and TelexMobile, there is a loan listed of more than $291,800 to an entity described as Ympactus. A TelexFree-related entity known as Ympactus Comercial Ltd. is based in Brazil.
Listed as an additional asset by TelexFree LLC is a “Propay Reserve” account said to contain more than $4.4 million.
According to the Washington state document, TelexFree LLC has or had accounts at ProPay, TD Bank (three accounts), Citizens Bank, Fidelity Bank, Fidelity Bank Sweep and Middlesex Savings. Most of the accounts were said to have modest balances, but the Middlesex Savings account was said to contain more than $5.4 million.
An entity described as “e-Wallet” was said to have a much larger balance: more than $31.6 million.
TelexFree LLC, according to the document, listed “other assets” totaling more than $27.4 million. These included more than $18 million at Fidelity Investment, nearly $7.3 million at Waddell and Reed, an asset-management firm, and $2 million in a savings account at Middlesex Savings.
The document appears to be dated Feb. 20, 2014.
TelexFree also is using the name “TelexFree International.” Where that entity is based is unclear.
TelexFree is the subject of a securities investigation in Massachusetts. Investigators in Brazil have called TelexFree a pyramid scheme.
Some promoters have claimed that the TelexFree “program” triples or quadruples money in a year. There also have been claims that TelexFree was building 500 hotels in Brazil in the run-up to this year’s World Cup and the 2016 Summer Olympics.
The bottom lines of TelexFree Inc. and the other TelexFree-related entities are not addressed in the TelexFree LLC document. TelexFree LLC is said to have more than $76.1 million in “total liabilities and equity.”
UPDATED 6:20 P.M. EDT U.S.A. The Indiana Utility Regulatory Commission rejected TelexFree’s telecom application on June 11, 2014, according to records in the state.
