TelexFree Trustee recovers $20,000 from PR firm
A few months ago the TelexFree Trustee filed a heap of lawsuits against insiders and merchants who worked with the $3 billion Ponzi scheme.
One of the merchants who accepted payment from TelexFree was Joele Frank Wilkinson Brimmer Katcher, a New York based PR firm.
On their website, Joele Frank claim to be a ‘strategic communications firm recognized for our intellect, integrity and intensity‘ who ‘help our clients take control‘.
How Joele Frank helped TelexFree “take control” is unclear. The Trustee’s filings suggests it might have been for “corporate and crisis communication services”.
In their defense, the Joele Frank claim
it provided its services under significant time pressure, that it had no knowledge of the existence of TelexFree’s Ponzi scheme, and that it did not participate in the scheme.
The Trustee initially sued Joele Frank for the full $85,000 amount, however a proposed settlement filed earlier today stipulates a clawback of just $20,000.
The reduced amount purportedly came about following “discussions” between the Trustee and Joele Frank. It is also a compromise against ‘the costs, delays and uncertainty of litigation‘.
The Trustee has raised reservations as to the value that TelexFree derived from Joele Frank’s services.
Further litigation would likely entail disputes of fact and law, including issues respecting the nature and value of services rendered by Joele Frank.
The Trustee goes on to claim that Joele Frank was ‘not directly involved in the Ponzi scheme and does not appear to have had knowledge of the scheme‘.
This determination by the Trustee is likely also a significant factor in the reduced clawback amount.
The proposed settlement agreement between the Trustee and Joele Frank is currently before the court awaiting approval.