TelexFree Criminal Case Interim Status Report (Dec 2014)
As per the local rules of the District Court of Massachusetts, the James Merrill’s attorney and the US Attorney’s Office (DOJ) have filed an interim status report.
The report, filed ahead of today’s hearing (December 18th), provides some updates and insight into the status of the Wanzeler/Merrill criminal case.
On the discovery side of things,
The government has provided substantial discovery to date, including additional discovery since the last status date, but discovery is not complete.
Since the last status date, the government has produced records from two consultants employed by TelexFree during the alleged conspiracy; forms and affidavits for two postindictment search warrants for email and YouTube content; returns received as to two of the five email accounts identified in the email search warrant; and Brady disclosures based on various witness statements.
For those unfamiliar with the term, a “Brady disclosure” is
exculpatory or impeaching information and evidence that is material to the guilt or innocence or to the punishment of a defendant.
With these disclosures coming from the government, I’m making an educated guess that the disclosures in question are impeaching in nature.
Unfortunately who made the statements and what they witnessed (fraud in general?) has yet to be disclosed.
Most of the discovery appears to be on track for production, but there was at least one significant delay:
The government was also on track to produce, by December 10, 2014, an electronic version of the 40 boxes of material seized from TelexFree’s headquarters in April 2014, but the outside vendor processing the material made several errors that are now being fixed.
The government should be able to make that production within a few weeks (the holidays will intervene).
Other items of discovery yet to be produced by the government include:
- the materials seized from TelexFree’s offices in Marlborough, Massachusetts, in April 2014
- about 81 gigabytes of data (about 355,000 pages) received in October 2014 from the Trustee supervising TelexFree’s affairs in bankruptcy
- materials from law enforcement authorities in Brazil, who have been aggressively investigating TelexFree’s operations in that country
This production will be large; for example, Brazilian authorities have executed about nine search warrants to date.
By the end of January 2015 the government should have a better idea of what this production will entail.
- the results of three remaining email search warrants served on or about September 25, 2014
- the results of a search warrant served on Google, Inc., on or about October 16, 2014, for a substantial amount of video content held by its subsidiary, YouTube
The government has been in regular contact with Google (as recently as December 16, 2014). Google reports that compliance will take several more weeks.
- various recordings made by undercover HSI agents at TelexFree conferences and in conversations with a TelexFree promoter
Like the Brady disclosures, who the promoter is HSI have recordings of is yet to be disclosed.
Merrill’s lawyer and the US Attorney’s Office have suggested another interim status conference be held in 60 days, which puts us at the end of February.
One would assume the outstanding discovery matters would by then have been settled. Then we get into the interesting stuff.
Looking forward, given both the US Attorney and Merrill’s lawyer’s signature is on the interim report, I imagine tomorrow their scheduling suggestion will be entered in via order.
Footnote: Our thanks to Don@ASDUpdates for providing a copy of the December 2014 Interim Status Report.
i cant wait for discovery to end. and for the dirty laundry to start surfacing.
2015 will be very eventful….
Sorry to bother you Oz, but still no need to fill any claim to ask for the money? Thank you so much for all your work!
Too early. There’s an article in BostonGlobe that the trustee, Stephen Darr, will open claims website in 2015. You don’t need to submit anything before then.
In fact, doing so will cost him more money, so do NOT send him anything until the website opens.
The Boston Globe article can be found in another thread:
I copied the most relevant parts into 2 comments, #19 and #21.
Paper filings will simply slow down the process and add extra costs. He will eventually set up some type of “claims portal” where people can file claims and get some answers automatically.
That was about relevance for me = what I expect people to ask about / what I should be able to answer. So I focused primarily on info related to the claims process.
The Boston Globe article was useful in that it answered some commonly asked questions about claims, e.g. it answered WHY paper filings would be a problem and WHY people should wait for a claims portal.
Minor update – The Acre injunction has been (yet again) extended.
Brazilian regulators continue to work with US regulators on the criminal case and presumably vice-versa in Brazil.
Thank you guys! That was my feeling as well, at least from what i had read, but you know, there are lots of misleading websites where they suggest to fill in the fbi and sec claims, dont know the purpose, but thank you so much.
FBI and SEC claims are probably about investigation purposes? I have read something about it, e.g. the FBI form was set up to allow unregistered immigrants to post information without being reported to immigration authorities.
Other agencies may have a duty to report “immigration issues” to the correct authority, a duty FBI doesn’t have (if I remember correctly, I read about it some weeks ago).
If those websites are about claims at all, it will be about “victims’ claims in a criminal case” rather than “investor claims against TelexFree”.
I can try to FIND some information, but I don’t have any clear information now.
The FBI “questionnaire” is mentioned in the Boston Globe, May 22 2014. It seems to be about a complaint form rather than a claims form.
(short article, use your “5 articles per month” on something else)
More from the same Boston Globe article:
I have looked at the FBI “questionnaire”. It asks for full name and address / date of birth / etc., and the following questions …
FBI’s own information about it can be found here:
The most relevant part, the one directly related to the complaint form:
That’s all I could find in a quick search. I have looked at it, but I haven’t studied any details.
* Massachusetts Securities Division form was anonymous / informal. It didn’t require any personal details, so it could easily be recommended early in the process (if people could offer info). People could add contact info voluntarily, but it wasn’t required (IIRC).
* FBI’s “questionnaire” is a formal complaint from victims. It asks for full name, address, date of birth, last 4 digits of VISA card, and other details.
The purpose of both those 2 forms are “investigation purposes”.
* Massachusetts SEC’s form was about initial investigation, with more easy questions than the FBI form. I spent less than 10 minutes filling in some hypothetical account info (as a test).
* FBI’s form is about a formal criminal investigation, about registering some of the victims. You will receive information in exchange, i.e. you will be added to a list of victims and will automatically receive updates about the case.
Sorry for those 3 lengthy posts, but it will actually save me some time later if other people are asking about the same thing.
I can find one specific motive for people to use the FBI form = if people paid directly to the recruiting promoter rather than directly to TelexFree.
The “questionnaire” asks specifically about payment methods, but some additional info will need to be added under “Additional info”.
Paying directly to the sponsoring promoter was a payment method used both for fraudulent purposes (e.g. tax evasion, avoiding clawbacks) and for legitimate purposes (as a normal, faster payment method).
I would at least have identified the legitimate purpose if I had used the payment method in that way, e.g. if I had paid directly to a distant family member or to a friend.
It will help the investigation and make sure the scammers pay for their crimes. Most of which can be obtained from TelexFree’s own records, but they always like to have third-party / victim’s own testimony (information, as they will pick a few individuals, the dramatic ones, for court later)
Mass. SEC is for civil trial, and FBI is for criminal trial.
But those have nothing to do with getting your money back. That’s Stephen Darr, the bankruptcy trustee’s job. And it is unlikely FBI and SEC will share data with Darr as both agencies need to preserve stuff for trial where as Darr’s job is to fold up the bankruptcy and chase down assets.
And our beloved sweaty talkative Carlos Costa is still MIA.
There was a status conference to be held today jan. 15. Any one has any word on it?
Nothing on my end. If any significant happened probably hear about it just on the weekend or early next week.