telexfree-logoTop TelexFree pimp Faith Sloan recently asked a Massachusetts District court to release $15,800 in currently frozen funds. Sloan claims she needs the money to cover living expenses and payment to her lawyer.

The SEC were quick to file an opposition to the motion yesterday. Perhaps caught unaware by just how closely the SEC have been monitoring Sloan’s post TelexFree Ponzi activities, Sloan has now filed a response to the opposition.

Dangling the carrot of possible injunction before the court, Sloan seems to be under the impression that, subject to her own whims of consideration, court orders are little more than polite suggestions.

In their opposition filing, the SEC presented detailed evidence of Sloan’s “flouting” of the preliminary injunction currently in place.

Bank records show that Sloan has at least two undeclared accounts with Chinese banks, and has made numerous payments with assets that are subject to a freeze order. Three payments of note are to the company Changes Worldwide, covering Sloan’s apparent investment buy-in and that of at least one of her downline affiliate investors.

In her original motion, Sloan has asked for $15,800 to be released. As the SEC points out however, when granting the preliminary injunction against Sloan, the court ordered that

there would be no carve-outs from the asset freeze for defendants who fail to identify their assets.

In addition to spending money that is supposed to be frozen, Sloan has to date failed to identify her assets to the SEC as required.

Sloan now argues that not complying with the injunction doesn’t matter, because apparently now she’s “considering” it:

Based on her lawyer’s research and opinion that she may not be incriminating herself by identifying her assets, (Sloan) is now considering compliance.

Forgive me for pointing out the obvious though, but consideration of compliance with an injunction granted a month ago? How on Earth does that invalidate a court order that no funds be “carved out” if assets are not declared?

Until those assets are declared in full, Sloan doesn’t have a leg to stand on.

Another point of contention is when exactly Sloan became aware of the injunction against her. A temporary injunction was granted on April 15th, which Sloan ignored. This was then turned into a preliminary injunction in early May.

Up until today, where now Sloan claims she’s “considering” to acknowledge it and comply, she otherwise ignored the preliminary injunction too.

In her opposition response, Sloan insists though she ‘has not violated the asset freeze‘. She claims that when the SEC called her up to inform her of the case against her, she claims that at no point was she

informed that Judge Casper had entered a temporary restraining order against her on April 16, 2014.

Sloan hereby swears that Scott Stanley did not tell her that a temporary restraining order had been entered against her during his telephone conversation with her on April 17, 2014, nor did he provide or refer her to a copy of the content of that order.

As Sloan stated in her Verified Motion for Leave to File a Response (Document 130), the aforesaid temporary restraining order was never served on her.

Accordingly, none of the transactions cited by the Plaintiff as evidence that Sloan “repeatedly violated the freeze order” prove that Sloan violated that order, because they occurred before Sloan had actual notice of the temporary restraining order and the Preliminary Injunction that the Court had entered against
her.

 

What Sloan fails to mention though, is that when Scott Stanley (an SEC attorney) called her up, here’s how that conversation went down:

On April 17, 2014, I spoke with Faith Sloan, a defendant, on the telephone.

After introducing myself as an attorney for the Securities and Exchange commission, Sloan asked “[A]re you from the state SEC or federal?” I responded that I was representing the United States Securities Division.

I then stated that the SEC had sued TelexFree and that she had been named as a defendant in the complaint.

Sloan responded by stating “Why are you picking on me? There are bigger promoters than me.”

Sloan then asked where she could find the complaint. I walked her through the SEC website and to the location of the press-release and complaint.

Sloan then stated “I need to speak to my lawyers”. I then asked if she was represented by counsel. Sloan did not respond.

I then asked Sloan if she would provide her email address and home address so that we could send her the Complaint and the Court’s Order of April 16th (Ozedit: which includes the preliminary injunction).

Sloan refused by stating “You just sued me. You must know everything about me so you can figure it out.”

Sloan then repeated “I need to speak to my lawyer” and hung up while I was attempting to ask her to have her counsel call us.

Faith Sloan, hoisted entirely by her own petard.

Sloan has since deleted her Facebook posts from November 2013 to March 2014 and her TelexFree website, but I can confirm that one post was a downplay of the litigation against her, boasting that the Massachusetts Securities Division “loved her”.

Perhaps if Sloan wasn’t so pre-occupied with denials on social media and instead took the SEC’s litigation a bit more seriously, she wouldn’t be in the position she is in now.

A decision is yet to be made on Sloan’s request, however given the remarks of the court when the preliminary injunction was granted, and Sloan’s continued “flaunting” of them, it’s expected to be denied.

Perhaps when Sloan has actually declared and remitted her assets (including what she has stashed away in China), she can then resubmit it.

In related news fellow co-defendant Sanderly Rodrigues has applied for an extension to reply to the SEC’s amended complaint, claiming that until the week beginning Monday June 9th, he was “unable to retain counsel”.

The SEC have assented to the motion so it’s likely to be passed sometime next week.

Rodrigues has known about the litigation against him for some time, publicly declaring himself a multi-million dollar earning “victim” of TelexFree the same day the SEC’s litigation was made public.

Why Rodrigues didn’t retain counsel back in April, or any time prior to this last week is a mystery.

 

Footnote: Our thanks to Don@ASDUpdates for providing a copy of Faith Sloan’s reply and Sann Rodrigues Motion For An Extension Of Time.