SEC granted TRO against TelexFree, hearing set
Turns out the SEC don’t trust TelexFree management at all. And after the revelation yesterday that Joseph Craft lied about his position in the company while trying to make off with $37.9 million dollars, who can blame them?
The SEC pyramid scheme complaint against TelexFree was originally filed on the 15th of April, meaning it was filed on the same date as the Massachusetts Securities Division Ponzi complaint (double-whammy).
The reason we didn’t hear about it until yesterday, is because it was filed “under seal”.
Why did that happen?
In their complaint, the SEC request a temporary restraining order that would effectively freeze TelexFree’s assets. And, as the agency noted in their complaint:
In at least one prior instance, when the Commission did not seek to file a similar complaint under seal, its availability through the public Pacer filing system resulted in a defendant in a Commission action learning of a temporary restraining order and an order freezing assets that had been obtained ex parte (Ozedit: meaning the defendant was not present), before that order freezing assets was effectively served to prevent the dissipation of those assets.
In filing this motion, the Commissions seeks to to prevent such an occurrence in the future.
The Commission believes there is an ongoing threat that the defendants will dissipate assets. The corporate defendants have already transferred in excess of $23 million to defendants James Merrill and Carlos Wanzeler.
The motion was granted on the 15th, and that’s why we didn’t hear anything until the 18th – after the temporary restraining order against TelexFree had been granted and order freezing its assets had been served.
As to the temporary restraining order (TRO) currently in effect against TelexFree, it was granted after Judge Denise Casper acknowledged
the Commission has shown that
1. It is reasonably likely to establish that TelexFree and the individual defendants James Merrill, Carlos Wanzeler, Steven Labriola, Joseph Craft, Sanderly Rodrigues de Vasconcelos, Santiago De La Rosa, Randy Crosby and Faith Sloan have directly or indirectly engaged in the violations alleged in the complaint
2. There is a reasonable likelihood that these violations will be repeated
3. There is a strong indication that, unless restrained and enjoined by order of this court, TelexFree and the individual defendants may dissipate and conceal assets
4. entry of a temporary restraining order is in the public interest
In a nutshell, based on the SEC’s complaint, the court believed TelexFree was guilty of running a Ponzi scheme (technically a pyramid scheme in the complaint), and that management and their top pimps were probably going to do a runner (along with “their” stolen money) if given the chance.
The temporary order in place prohibits TelexFree, its management and top investors from
- continuing to defraud anyone
- obtain any money or property via the use of untrue statement of a material fact, or any omission to state a material fact in order to make the statements made (appear) not misleading
- engaging in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser, in the sale of offer of securities
- withdrawing, selling, paying, transferring, dissipating, assigning, pledging, alienating, encumbering, disposing of or diminishing the value of any assets held by them
The order extended to cover banking institutions, meaning assets held by the company and defendants are now effectively frozen. The Defendants were also prohibited from violating various Sections of the Securities Act (relating to the sale of securities, unregistered or otherwise).
As part of the order, TelexFree, its management and the named top investors are required within five days of being served to submit to the SEC information identifying
- all transfers or payment of funds to them or any other entity controlled by them from (TelexFree) investors
- the nature and results of any investment in which the funds were used
- any subsequent transfer or payment of the funds and
- any fees or expenses charged
- the name and address of any person(s), entities or accounts holding funds or assets derived via involvement and participation in TelexFree
- assets of every type of description with a value of at least $500 presently owned or held for any direct or indirect benefit or under control or indirect control, whether in the United States or elsewhere
- all accounts held at any bank or other financial instiutition, in the United States or elsewhere, for the direct or indirect benefit or under control or indirect control at any time from January 2012 to the present
I believe the first four points are designed to catch all the investor to investor payments top affiliates within TelexFree had been making and receiving. It was common practice for top TelexFree investors to directly accept payment from those they’d recruit, in exchange for TelexFree AdCentral positions (bypassing TelexFree’s accounting records).
The idea was that this would leave a paperless trail, however both the SEC and courts appear to be well-equipped to handle this type of fraud. No doubt Faith Sloan, Sann Rodrigues, Sandy Crosby and Santiago De La Rosa all figured their Ponzi proceeds wouldn’t show up on TelexFree’s books, and as such that they’d be safe.
Sucked in fellas.
Perhaps most crushing of all, and sure to be causing stomach ulcers among TelexFree management and named top investors, is the final order that they, within five days, must
take such steps that are necessary to repatriate and deposit into the registry of the Court in an interest bearing account, any and all funds or assets that presently may be located outside of the United States that were obtained directly or indirectly from (TelexFree) investors.
As additional overkill, the final orders also stipulate none of the defendants can open up new bank accounts or accept any further funds from TelexFree investors. Nor are they able to destroy any and all information relating to their involvement in TelexFree (records, documents, books, tape recordings, correspondence, contracts, agreements, assignments, computer media or other property).
The court also granted the SEC permission to begin serving discovery requests on the defendants (including the conducting of depositions), indicating that they’ve already got a fair idea of who and what to ask to aid their case against TelexFree and friends.
Attempting to put on a brave face after surely realising her Ponzi career is all but over, Faith Sloan wrote on her Facebook wall:
Who is on the run? LOL! I spoke with the Massachusetts SEC this morning. And my lawyer is on it. No more comments by me on this legal issue.
She later wrote on her TelexFree Power website:
April 17, 2014 The Massachusetts SEC division is somehow in love with me. No comment.
One can only imagine Sloan was referencing the kind of love that goes on between inmates behind bars.
Looking forward, a hearing for the SEC’s requested permanent injunction has been set for April 24th at 2pm. Nothing is of course certain, but I think one can safely assume it too will be granted.
Update 24th April 2014 – TelexFree have filed an emergency motion and had the permanent injunction hearing, for defendants TelexFree, Carlos Wanzeler, Jim Merrill and Joe Craft, postponed till May 7th.
A hearing on April 25th has been scheduled to decide upon a permanent injunction being put in place against the remaining defendants (Steve Labriola, Faith Sloan, Santiago De La Rosa and Sann Rodrigues).
The current temporary restraining order (which applies to all defendants), is to remain in effect till the April 25th hearing.
Finally, something really “wonderful” as Costa would say :).
Faith Sloan is a grade A narcissist.
Best news ever, this is going 2 hit telexfree top promotors hard and fast, special the assets overseas seize is top material for all the drama and payback thats is going to happen over the next few days.
Better order a truck load of popcorns for all the drama that is going 2 happen in Madeira Island lol.
OZ, you deserve the Pultizer award for your tireless efforts in reporting this scheme. Congrats my Dear SIR.
Can somebody confirm this order can affect the assets of top promoters outside the United States? And if that would mean merely their bank accounts, or estate and other property?
Also, can less important promoters outside the United States be affected, say, someone who gained a few thousand dollars in the scheme?
Jesus…! I don’t think that small players will have problems… They are too many! I don’t think its doable.
Here is the list of the TOP PROMOTER with user name, these people made millions in the scheme:
(Ozedit: See comment #20 for list)
Hi Ozz. Can u plz give us links to all those statements? especially for TRO?
Thx for ur hardwork from Russia.
I don’t know where you got this, but it doesn’t seem to be very accurate. Madeira Island promoters seem to be notoriously absent from that list, while at least three of them appear in the list of the 30 biggest creditors of Telexfree.
Due to the amount of traffic BehindMLM has received this past week, I’m hesitant to host any PDF files on my server. The bullet points were mostly copied verbatim, the green boxes typically verbatim.
I haven’t seen the SEC make the TRO motion public. The April 24th hearing notice appears on the Pacer docket as a note, but there’s no PDF order for it (from memory).
Regarding that long list, is it actually of any value to anyone? I’m tempted to nuke it due to the length, even moreso if it’s inaccurate.
@ Peter McAfee, this is realy the SHOCK AND AWW
they can run but they can not hide
It only goes to show why people are so attracted to these things. Get in early, ride the momentum and grab as much cash as you can while it lasts.
Those are only the top promoters in NEW ENGLAND. As you can see they are some guys you may know, but believe that the list is accurate. Here are some TWO popular guys in MA that you may know:
SANTIAGO DE LA ROSA universal52
SANTIAGO DE LA ROSA ministro
SANTIAGO DE LA ROSA ministro1
SANTIAGO DE LA ROSA ministro2
SANTIAGO DE LA ROSA ministro3
SANTIAGO DE LA ROSA ministro4
SANTIAGO DE LA ROSA ministro5
SANTIAGO DE LA ROSA ministro6
SANTIAGO DE LA ROSA ministro7
SANTIAGO DE LA ROSA ministro8
SANTIAGO DE LA ROSA ministro9
SANTIAGO DE LA ROSA ministro10
SANTIAGO DE LA ROSA visiong
SANDERLEY DEVASCONCELOS fam1
SANDERLEY DEVASCONCELOS sannvic
AHAHAH! Don’t push it =P
@Peter What’s the source for the list?
Antonio Rivas was one of the first latin promoter working with Mr. Santiago De La Rosa, Mr. Geraldo Transportation, Mr. Amilca Lopez and Mr. Villa which targeted the Guatemala and Dominican immigrants to the scheme.
Mr. Sanderley Vasconcelos and Mr. Steve Labiola were in charge for the Brazilian community as well as other for other ethnic group. They split the cake as many pieces as they can in order to get more people inside the scheme. That is why they traveled to Guatemala, Spain, Peru, Haiti, Dominican Republic, etc….
If you want to verify it, go to his blog: mercabusca.com/2013/mi-equipo-de-telexfree/
Someone is getting worried…
GERARDO TRANSPORTATION ACCOUNTS:
GERARDO VALERIO universal
GERARDO VALERIO universal1
GERARDO VALERIO universal2
GERARDO VALERIO universal3
GERARDO VALERIO universal4
GERARDO VALERIO universal5
GERARDO VALERIO universal6
GERARDO VALERIO universal7
GERARDO VALERIO universal8
GERARDO VALERIO universal9
GERARDO VALERIO universal10
GERARDO VALERIO universal11
GERARDO VALERIO universal12
GERARDO VALERIO universal13
GERARDO VALERIO universal14
GERARDO VALERIO elpresidente
GERARDO VALERIO elpresidente1
GERARDO VALERIO elpresidente2
GERARDO VALERIO elpresidente3
GERARDO VALERIO elpresidente4
GERARDO VALERIO elpresidente5
GERARDO VALERIO elpresidente6
GERARDO VALERIO elpresidente7
GERARDO VALERIO elpresidente8
GERARDO VALERIO elpresidente9
GERARDO VALERIO elpresidente10
GERARDO VALERIO elpresidente11
LOURDES VALERIO am1
LOURDES VALERIO am2
LOURDES VALERIO amormio
LOURDES VALERIO amormio1
LOURDES VALERIO amormio2
LOURDES VALERIO amormio3
LOURDES VALERIO amormio4
LOURDES VALERIO amormio5
LOURDES VALERIO amormio6
LOURDES VALERIO amormio7
LOURDES VALERIO amormio8
LOURDES VALERIO amormio9
LOURDES VALERIO amormio10
LOURDES VALERIO amormio11
GERARDO VALERIO mariole
FAITH SLOAN IS ANOTHER SCAMMER AND THEY ALL KNOW ABOUT THE SCHAME. HOWEVER, THEY MUST PLAY THEY ROLES INSIDE AND OUTSIDE IT.
CHECK OUT WHAT NEWS ARE IN ANTONIO RIVAS FACEBOOK PAGE RIGHT NOW:
Yeah, the traffic spike’s insane. I normally get a few hundred views a day. That TelexFree bankruptcy got like 8000 views in a day. It’s one heck of a spike.
Boston Globe said they’re getting queries from all over the world, not just the US, on what’s going on with TelexFree.
This scam is going to not just touch, but RUIN a lot of lives.
This is the same list from Peter McAff in a Excel File. This 2.000 name and login is very small and old.. Anyway, if someone want to see this more organized, see it here: Telexfree Names and Login
Speaking of PDF, Boston Globe has them, click through to get them:
It’s reported by NECN business that Mass SecState Bill Galvin is going to dispute the bankruptcy filing in Nevada. It’s in the video, but not in the written version.
I personally don’t like the idea of the list. I think it leads to vigilante justice.
If you really think your list is accurate, send it to one of SEC’s lawyers or investigators. They’re in the documents. But you better provide a source though, as no doubt SEC has TelexFree’s computers and would have a better list than you do.
I think it will be mainly inside the US.
Regarding “Due to the amount of traffic BehindMLM has received this past week, I’m hesitant to host any PDF files on my server.”, you can host the file somewhere else and just post a link. There are lots of free internet services for that.
Actually, I’m far more interested in what will this do the Gerry Nehra’s reputation? Too bad in lawfirms, there is no such thing as 3 strikes you’re out, as Nehra certained earned all 3 strikes (ad surf daily, Zeek, and now this).
Can people complain to the bar association (that certifies lawyers)?
Please let us know where did you get the list of promoters.
(I’ll also point out that unlike Zeek, where several lawyers are quick to jump onboard and do a lot of “I told you so”, they are all silent on this one)
By no means a win for Telexfree. The SEC and Mass will be there on the 21st with full documentation.
I think you will one day have to admit you were wrong when unjustly accused Telexfree with their lies and opinions. I’ve never seen the wind to win a battle with the sun …
It’s time to start recognizing their mistakes…
The answer is “we don’t know”. Madeira is nominally EU territory and generally speaking EU cops have no problem with US law enforcement. But what happens locally would depend on what Madeira courts (which will be approving US asset freezes and seizures) will do to local promoters, but THAT would depend on whether Madeira prosecutors sees the top promoters as victims… or co-conspirators.
So… Madeirans who felt cheated should petition for news coverage of the scam and start naming the top promoters, in hopes for forcing local prosecutors to act.
You won’t believe this one: brazilian scammers are blamming USA SEC investigation on Acre’s prosecutor Alessandra Marques.
Apparently she went to the US just to meet Secretary Galvin and “poison” his mind against Telexfraud.
They say: “SEC once said TF was legal, and because of PP Marques twisting the acusations, now they think it is ilegal. She went there just to spend Acre’s money and to forge information against TF”.
Wow… What can you say to those people? They are simply crazy.
Or yours? Due to the bad translation I can’t tell which way your wind is blowing.
Yo f’real? Been doing that for two years son!
As for lies, the only people lying are TelexFree management. You’ve been had.
Merely self-delusional. And they are resolving “cognitive dissoance”, i.e. have two conflicting ideas in their head (A: “TelexFree is legal” and B: “TelexFree is fraud”) they have to resolve it, and generally, the idea that they *want* to be true wins, and the other one is attacked through “post hoc reasoning” (i.e. made up some explanation that makes sense).
It’s something we all do, albeit not to this degree.
K. Chang: Em português eu te digo… Nunca discuta com um ignorante, ele te rebaixará ao máximo e te vencerá pela via da experiência. Fim de papo.
Oh, and I wrote this a year ago after Zeek’s closed:
I haven’t ran that through Google translate, but I think you’re refering to this quote:
“Never argue with stupid people. They will drag you down to their level and then beat you with experience.” –Mark Twain
Here’s the latest bankruptcy order. It just mentions the initial emergency hearing will continue on the 21st. Any objections have to be filed by April 21st at 1:30pm too.
That’s it. No grand victory and all the other BS currently circulating in Portuguese/Spanish speaking circles.
It’s one thing to bullshit people into a Ponzi scheme, but to keep the facade up after the fact? Cmon now.
K. Chang: yes
Very good. I have read it before and with it is easy understand the mind of this people.
Was good see every phase of the Telexfree victim. Now is the end, when they close the hole things.
Translation “K.Chang: In portuguese I say to you…”Never get in an argument/discussion whit someone Ignorant/naive he will win whit is experience/general knowledge and will demote/diminish/humiliate you to the utmost/maximum. End of conversation”.
The translation is harder because he is writing in portuguese from brazil.
Yeah, so it’s the Mark Twain quote. 🙂 I don’t read Portuguese, but I do read Spanish, remarkably similar language.
Not me, certainly, I’ve lost everything I’ve bet on Telexfree… Which was zero, anyways. But I’m interested on what may happen to the people who actually gained with this fraud.
After all of this Sann Rodrigues is promoting an event tomorrow in Orlando FL. He is inviting all top leaders to join him tomorrow to decide what is the next step.
If they will continue supporting telexfree or join another scam. I hope the FBI or HSI join them in this event.
We all know that San Rodrigues is a crook but he was not the only scammer to target the brazilian community in New england.
I am surprised that the feds are not going after Pastor Julio Silva and Marcio Pinheiro. They have been scamming the brasilian community since National lending 2001-2002. Repetitively throwing their friends, family, their church followers in the hole than denying any wrong doing.
Its a damn shame for the brazilian community and this crooks.
Here you can see San Rodrigues praising these crooks.
In a previous post I had inquired about who the scapegoat might be when it all came crashing down and the dust settled.
I think poor Joe Craft will be the chosen one to blame for not moving fast enough with the deleting of the paper trail on the computers, and for getting caught red handed with the goods before making a mad dash out the door.
Next time they need to hire someone who doesn’t like to eat donuts and coffee while working on important tasks such as deleting files and documents which can incriminate the bosses.
I don’t think anyone is a “poor me” in this scam. Everyone who participated in this as top leaders were well aware that TF was just another scam designed to suck money out of people.
These people are all serial scammers and do it without any shame. Look at someone like Faith Sloan as an example, her career as a ponzie pimp and thief has been going on for many years, she used the disguise of being a Godchild when in reality she is a low life criminal like all the others.
Payback can be a real bitch and I am sure these top criminals will see their days in the slammer where they will have lots of time to think about their crimes. I will not be surprised that they will all “rat” on each other for a reduced sentence.
We also know what happens to rats in the penitentiary.
I wasn’t trying to be sympathetic about Joe in my attempt at a bit of sarcastic humor, by the way.
Gerald Nehra protected his own role in the “Legal Blessing” video, by clearly focusing on the need of external customers.
He can be blamed for poor business understanding, but that’s not enough to blame him for his own role. Lawyers don’t have access to ALL information about a client, they are typically hired for specific purposes.
Gerald Nehra already have a reputation for being a pseudo compliance lawyer, so TelexFree will simply add to his existing reputation.
Yo Joaquim Pedrosa, acorda mano. A telexfree so ta ai pra lograr os de cima. Tao obvio quanto o nariz na tua cara.
Telexfree is a “beautyfully” engenired software idea that is more aquin to a virus. Within it (the software) theres tailor made audience targeted material of manipulative psycholagy and just plain old fashion dishonesty.
Add to that the cientific salesmanship tailor made to bypass the loop holes of various peoples mindset and of course basic ignorance and arrogance of pyramid ponzi dynamics…and, the rest is history.
Should there be death penalty for white collar crimes?….er….
There is in China.
That would explain it!!! I guess familly pays thd bullet! Ok ok hardcore but, this kind of virus creates too much havoc on the fabric of sociaty.
I lived in China, Macau for 7 years and i must say i can see the practical reason for the death penalty on this type of crime. Pitty Brazil does not take that aproach…er although i guess if they did Brazilia would be nuked!
There is in China.
Hmmmm didn’t Labriola say he just returned from a trip to China? He better hope we don’t extradite him : )
Has this TRO motion been made public already?
Try ASDupdates.com, files website, then look under “SEC vs. TelexFree”.
Thank you very much for the link, Doc 9 I had never seen. However, there is not a copy of the TRO motion, only an entry at “14-cv-11858-DJC TelexFree.pdf – Case Docket File” pointing to it, but it requires a login tp continue…
Article updated with news of TelexFree’s emergency motion seeking to delay the permanent injunction hearing, being granted.
All I can say is that while the courts are setting up time for this and time for that, do you think that ALL money has been frozen? I highly doubt it.
What’s the worst that can happen if Sann and his top dogs aren’t charged with felonies?
Nothing. They shut down TelexFree, take whatever money they can trace and the scammers either back to Brazil, the Bahamas or somewhere else to live, while counting all the money they were able to put away during and even after the scheme was busted.
Let’s hope this is not one big waste of time of a prosecution. Happy ending here would be some people losing their green cards, going to prison and the authorities also busting the entire illegal immigrant ring involved both in MA and in FL.