Now that TelexFree’s bankruptcy proceedings are all but dead, attention has shifted onto pending and ongoing regulatory action in the state of Massachusetts.

Charged with being a Ponzi and pyramid scheme by the SEC and Massachusetts Securities Division, TelexFree are now staring down the barrel of a permanent injunction. But whilst the company and key management blindly put their faith in the now-squashed Nevada bankruptcy, other insiders have been wheeling and dealing with the SEC. [Continue reading…]

In a nail-bitingly suspenseful hearing yesterday, Judge Landis ordered TelexFree’s Chapter 11 bankruptcy application be moved from Nevada to Massachusetts. And in the meantime, the Nevada bankruptcy court will abstain from making any further orders regarding the case.

In short, pending the move to Massachusetts (where it is likely to be heard and subsequently rejected by the same Judge hearing the SEC complaint), TelexFree bankruptcy application is currently dead in the water.

The next big court date for TelexFree is now a hearing for the granting of a preliminary injunction against the company, key insiders and top promoters, to be heard in Massachusetts today.

Filed on May the 2nd, here’s the opening statement of TelexFree’s argument against the injunction:

After intentionally disregarding the preexisting bankruptcy proceedings involving TelexFree and racing into this Court instead on an ex parte basis to obtain a temporary restraining order, the Securities and Exchange Commission (“SEC”) now asks this Court to convert the ex parte temporary restraining order issued on April 16, 2014 (the “TRO”) into a preliminary injunction.

Oh my! [Continue reading…]

The notion that a global Ponzi scheme be able to file bankruptcy in a state it registered a shell company in, solely to evade financial, criminal and civil liabilities for the running of said Ponzi scheme, was always going to be a stretch.

Still, hats off to TelexFree’s lawyers for putting on a good show in fighting for the absurd.

At the conclusion to the mammoth 8 hour hearing conducted last Friday in Nevada’s bankruptcy court, Judge Landis used a series of prongs to determine whether or not TelexFree’s bankruptcy case should be transferred to Massachusetts (where the company is currently being sued by the SEC and Massachusetts Securities Division).

The prongs Judge Landis used to reach his decision were as follows: [Continue reading…]

Last we checked in with the ongoing battle between Zeek Rewards’ top Ponzi pimps and the court-appointed Receiver, they were arguing about the particulars of discovery.

Looking to bog down the Receivership in both time and costs (so they can no doubt bitch about it later), Zeek Ponzi royalty were collectively asking for ‘what amounts to thousands of interrogatories and requests for admission and over 500 depositions‘.

With there obviously being no need for that much discovery on the net-winners’ side, the conclusion the Receivership arrived at in his court-filed response accurately summed things up:

The key difference in the parties’ proposed case management is that the Defendants in this action are seeking to delay and complicate the case at every stage.

That was the situation as of April the 13th, with a hearing scheduled to take place the next day on the 14th ‘to discuss the competing proposal plans and… establish how discovery should take place‘. [Continue reading…]

Despite reports of Better Living Global Marketing failing to pay affiliates for months now, it’s an opportunity that continues to push on.

A relic of the Zeek Rewards penny auction Ponzi scheme craze, Better Living employs the familiar affiliate-funded 99 day ROI model. Under the guise of purchasing penny auction bids, new affiliate money is used to pay out existing investors.

Based out of Hong Kong, despite launching in August 2012 (the month Zeek Rewards was shut down), local authorities have refused to acknowledge the scam. For reasons not entirely clear, Hong Kong regulators appear to be unable or unwilling to tackle the growing tide of online global Ponzi fraud originating out of Hong Kong.

Appearing to make some inroads into the situation, is a report from eKantipur about Hong Kong based Nepalis and the companies KaChing Holdings, RSE Bid and Better Living Global Marketing.
[Continue reading…]

On the eve of Judge Landis’ decision that will decide whether Ponzi schemes are able to claim bankruptcy protection, lawyers acting on behalf of TelexFree affiliates have filed a class-action lawsuit in Nevada.

Filed on the 3rd of May in the Nevada Bankruptcy court, the class-action names TelexFree, its management, top promoters, legal and advisers, payment processors, banks and financial institutions as defendants.

Listed as plaintiffs are Waldemara Martins and Leandro Valentim “and those similarly situated”. Martin and Valentim are identified in the complaint as being TelexFree investor affiliates (participants in the pre-March 9 AdCentral ROI compensation plan).

Valentim and Martins’ complaint is based on the fact that the named defendants knew TelexFree was a Ponzi scheme, and did nothing to stop it. The filing of fraudulent 1099 tax forms is also raised:

In furtherance of their unlawful enterprise, TelexFree mailed fraudulent and inaccurate 1099 (Miscellaneous Income) forms to investors, possibly to create the illusion that they had made payments to investors.

The 1099 forms were provided long after the mandated January 31, 2014 deadline, and some after the April 15, 2014 filing deadline.

TelexFree falsely represented that investors had received income that they had in fact never received.

Here are the allegations laid out against the individual defendants and/or parties: [Continue reading…]

As Jordan Maglich’s cell phone battery began to die, we wound up BehindMLM’s eight-hour coverage of the May 2nd bankruptcy proceedings.

Absolute kudos to PonziTracker and Maglich, who wound up being the primary source of information coming out of the courtroom after repeated warnings against streaming the session shut down any alternatives.

I know I was mentally exhausted by the end of it, and I was only syndicating Maglich’s updates with commentary and additional information I was tracking. I can only imagine how he felt having to maintain concentration over a phone call with only a few short breaks in between!

Anyway, logistics aside, here’s where we’re at currently. [Continue reading…]

Our thanks to PonziTracker for live updates on what’s going on inside the court room as the TelexFree bankruptcy hearing takes place. Note that additional sources/reporting may appear below. [Continue reading…]

As per the court-issued schedule, here is the list of fourteen motions, applications and objections to be heard today in the TelexFree bankruptcy case. [Continue reading…]

Any notion that we’d be in for a quiet few days before the giant May 2nd hearing were dashed when I woke up to see some twenty something new filings had been made.

As the flurry of objections and motions being filed continues against the backdrop of the operators of a $1 billion Ponzi scheme trying to evade all responsibility for their actions, as of May 1st 2014 – here’s where we’re at. [Continue reading…]