TelexFree Trustee going after Fidelity Bank?
This isn’t shaping up to be a good week for Fidelity bank or its President John F. Merrill.
Not even a day after it was announced that the bank had settled with the Massachusetts Securities Division for $3.5 million, now the Chapter 11 Trustee has indicated he’s looking for a piece of the action too.
John F. Merrill is probably ruing the day he let his brother’s billion dollar Ponzi scheme through his bank’s front door.
In court papers filed on the 22nd of September, TelexFree Chapter 11 Trustee Stephen Darr has asked the Massachusetts bankruptcy court to authorize the issuing
of a subpoena upon and to obtain documents relating to (TelexFree) from Fidelity Co-Operative Bank.
(TelexFree) opened three bank accounts with Fidelity in August and September 2013. Upon information and belief, one or both of the principals maintained personal accounts with Fidelity as well.
Upon information and belief, Fidelity recently entered into a settlement with the Massachusetts Securities Division in the amount of $3,500,000 in connection with (TelexFree’s) maintenance of accounts at Fidelity and Fidelity’s failure to properly vet (TelexFree’s) business.
By this motion, the Trustee requests the Documents from Fidelity and, to the extent deemed necessary, the Trustee reserves the right to later conduct oral examinations.
The information requested by Darr includes
communications between (TelexFree), their principals (Carlos Wanzeler and James Merrill) and Fidelity, bank statements, cancelled checks and other evidence of receipts and disbursements, and communications between Fidelity and federal and state regulatory authorities.
Given that Wanzeler in particular used Fidelity to launder significant sums of money offshore, what Darr does after he’s received the information could be interesting.
The Trustee’s motion is now before the court and awaiting approval. If granted, Fidelity Bank will have 14 days to front the information requested.