telexfree-logoCan you file an April Fool’s motion with a United States court?

As far back as I can remember, defendants in Ponzi scheme litigation have always had to prove seized and/or frozen funds were not related to financial fraud.

TelexFree investor Daniil Shoyfer provides the latest example of this. In a filing January 2016 filing, Shoyfer argued that recently frozen funds and assets belonging to him were not related to the $3 billion dollar Ponzi scheme.

Specifically, Shoyfer argued that

none of the money (he) ever made from TelexFree was ever used to purchase any of the investment properties (he) own(s).

To support the claim, Shoyfer filed evidence as attached exhibits to his filing.

Now comes Faith Sloan, demanding that $30,800 in frozen funds be released.

faith-sloan-top-promoter-telexfree-ponzi-schemeThe funds Sloan (right) is demanding be released were frozen as part of a preliminary injunction granted against her back in May, 2014.

In her April 1st filing, Sloan claims she needs the $30,800 to retain legal counsel to “defend her in this matter”.

The matter in question is the SEC’s civil lawsuit against TelexFree, in which Sloan is a named defendant.

Rather than provide proof that the funds in question weren’t derived from her involvement in TelexFree, Sloan asserts

the moneys and other assets that the Court has frozen belong to her; and the Government (“SEC”) has offered no evidence that the assets that the Court has frozen are in any way “tainted”, as that term is construed in Luis v. United States.

See also the Sixth Amendment to the Constitution of the United States.

Nor has the SEC offered evidence to prove that probable cause exists to believe that the assets the Court has frozen are traceable to the alleged misconduct that Sloan is charged with.

I’m not a lawyer… but is Sloan suggesting the SEC were granted a preliminary injunction against her without probable cause? Seriously?

For those unfamiliar with the Sixth Amendment cited,

the Sixth Amendment guarantees the rights of criminal defendants, including the right to a public trial without unnecessary delay, the right to a lawyer, the right to an impartial jury, and the right to know who your accusers are and the nature of the charges and evidence against you.

How that fits in I’m note sure. The asset freeze doesn’t deny her access to any of the above – it just stops her from using Ponzi money to fund it.

Of the funds in question, $800 is frozen in a Bank of America account and $30,000 was transferred to her attorney, two days before the preliminary injunction was granted.

How exactly Sloan transferred the money to her lawyer is unclear, as prior to the preliminary injunction Sloan’s assets were subject to a temporary freeze via TRO.

In any event, the lack of proof provided by Sloan as to the origin of the funds, in contrast to pretty much every other applicant I’ve ever seen requesting funds be unfrozen in Ponzi litigation, is telling.

Any lawyers reading want to clarify whether the onus is on the SEC to demonstrate the funds are connected to TelexFree, or whether it’s on Sloan to prove they aren’t?

With Sloan’s Motion filed only yesterday, the SEC have yet to respond.

Earlier this year Sloan began promoting Elite Legacy Creators, a downline builder for various internally launched opportunities, on Facebook.

Elite Legacy Creator’s first opportunity, 100K Race, a cash gifting scheme, was launched last month.

Whether or not the SEC bring up Sloan’s potential breach of the preliminary injunction granted against her (specifically its prohibiting of her engaging in fraud), remains to be seen.

Stay tuned…


Footnote: Our thanks to Don@ASDUpdates for providing a copy of Faith Sloan’s April 1st “Motion To Modify The Preliminary Injunction Freezing Her Assets And Other Equitable Relief”.