Katia Wanzeler has reached a settlement with the TelexFree Trustee.

TelexFree was a $3 billion MLM Ponzi that collapsed in 2014.

In an attempt to get in front of pending US civil and criminal enforcement actions, TelexFree filed for bankruptcy in April 2014.

As part of TelexFree’s bankruptcy proceedings, a Trustee was appointed to take over the business. Since then, the Trustee has been coordinating the return of stolen funds to TelexFree victims.

Part of the Trustee’s duties is clawing back ill-gotten gains from TelexFree insiders. This brings us to Katia Wanzeler.

Katia Wanzeler is the estranged wife of TelexFree co-founder and wanted fugitive, Carlos Wanzeler (right with Katia).

As per the “background” section of the Trustee’s December 19th motion seeking approval of a settlement with Katia Wanzeler;

On June 22, 2022, the Court entered judgment in favor of the Trustee against Carlos Wanzeler in the amount of $3,785,192 plus interest.

In furtherance of collection on that judgment, the Trustee commenced an investigation into transfers made by Carlos Wanzeler to or for the benefit of his estranged spouse, Katia Wanzeler, or assets held by Katia Wanzeler in which Carlos Wanzeler might have an interest.

On March 24, 2024, the Trustee conducted a deposition of Nicholas Wanzeler, the adult child of Carlos and Katia Wanzeler.

On July 2, 2024, the Trustee conducted a deposition of Katia Wanzeler.

As a result of these depositions, a review of documents on file with the registry of deeds, and documents produced by the deponents, the Trustee determined that Carlos Wanzeler was formerly the owner in fee of the following residential real properties.

The filing lists three properties, two in Worcester, Massachusetts and the other in Coconut Creek, Florida. Katia Wanzeler and her son reside in one of the Worcester properties.

The Trustee alleges that in 2018 and 2019, well after TelexFree filed for bankruptcy, Carlos Wanzeler transferred his ownership interest in the properties to FNR Trust and Diamond Realty LLC.

Nicholas Wanzeler is the appointed trustee of FNR Trust. Katia Wanzeler is the sole owner of Diamond Realty LLC.

The Trustee has asserted that the transfers of the Real Properties by Carlos Wanzeler to the FNR Trust and Forever Diamond Realty may constitute fraudulent transfers and/or that the transferees holds the Real Properties in constructive or resulting trust for the benefit of Carlos Wanzeler.

Katia Wanzeler, the FNR Trust, and Forever Diamond Realty dispute these allegations.

The Parties have engaged in negotiations in an effort to resolve the disputes pending in the Bankruptcy Court.

After several months of negotiations, taking into account the claims, defenses thereto, and potential claims by other parties against Ms. Wanzeler and her affiliates, the Parties were able to reach agreement in the form of the attached Stipulation.

As per the settlement stipulation, Forever Diamond LLC will transfer its interest in the Florida property to the TelexFree Trustee.

The Wanzelers will retain ownership of the two Worcester properties.

At time of publication the stipulated settlement awaits court approval.