News Update 17-JUN-2014: TelexFree James Merrill out on bail; TelexFree trustee subpoena everybody for info; TelexFree victims tell their stories to Boston Globe

Hook, Line, Sinker (How I fell for a phishing scam) (Photo credit: ToastyKen)

Remember folks, read trustworthy sources, not random internet blog posts and Facebook messages. I give you the source of my info, so you can see for yourself.


TelexFree co-owner James Merrill let out on bail

According to Boston Globe, TelexFree co-owner James Merrill was allowed out of jail when the judge decided the criteria for his bail is high enough, which includes:

• THREE houses for collateral, including 2 owned by him and one by his sister ($900000 bond)
• Wear a GPS tracker
• Not leave the state
• Give up his passport
• Must stay at home between 8PM and 8AM

Federal judge Tim Hillman ruled that unlike Merrill's partner Carlos Wanzeler, who had previously fled to Brazil (where he's originally from and still have relatives there), Merrill has deep ties to the Massachusetts community and really has nowhere to run outside of the US. 

http://www.bostonglobe.com/business/2014/06/17/telexfree-owner-james-merrill-set-free-bail/cSMbK8slkVxZNxEISoKdRO/story.html

NOTE: Click through to see actual judge ruling in this bail hearing. 

TelexFree trustee subpoenaed everybody for information

With little to go on how to administer the estate of TelexFree, the new bankruptcy trustee for TelexFree, Stephen Darr went for the fastest way: he subpoenaed all the different firms that advised TelexFree, which includes:

• PriceWaterhouseCoopers (former financial advisors)
• Alvarez and Marshal / William Runge (restructuring advisors)
• Kurtzman Carson Consultants (bankruptcy claims / noticing agent)
• Gordon Silver (TelexFree lawyers in Nevada)
• Greenberg Traurig (TelexFree lawyers in Massachusetts)

The subpoena demands any and all documents, emails, correspondences, phone (cellular or landline) records pertaining to TelexFree, affiliates, or subsidiaries, any and all financial accounts and related documents, any and all disbursement registers for every account, any documents relating to financial information, esp. those involving Global Payroll Gateway, International Payout Systems, Propay, etc. any and all tax documents, state or Federal, any and all internal financial statements, any and all properties and other assets including intellectual properties, any appraisal of such assets, any and all communications and other documents involving TelexFree or affiliates, creditors, and more. 

NEWS UPDATE 03-JUN-2014: Burnlounge is a pyramid scheme (duh); Merrill about to flip on Wanzeler in TelexFree case? Rippln + Mannatech = ?!?!?!

Remember folks, get your news from REPUTABLE news sources (which I link to) so you can decide for yourself, rather than just one-sided narrative by unknown people.


Burnlounge appeal rejected by Federal Appeals Court

Burnlounge appeal of their 2012 judgement as a pyramid scheme was rejected by the Ninth Circuit Court of Appeals, affirming that they are indeed, a pyramid scheme.

My short profile on Burnlounge:
http://amlmskeptic.blogspot.com/2012/09/scam-study-burnlounge.html

In their decision, the court stated that:

The district court found that because purchasing a package was required for participation as a Retailer or Mogul, and because Moguls earned cash for selling packages, “[Moguls] by default received compensation for recruiting others into the program.”

The 9th Court's decision can be read here:
http://cdn.ca9.uscourts.gov/datastore/opinions/2014/06/02/12-55926.pdf

The short of it is, if you claim you sold something and are getting paid for that, but in effect you recruited and the recruits are required to buy something, then  your claim of sales is invalid... You are getting paid for recruiting, not selling.

What is interesting is the court's decision reaffirmed Webster vs. Omnitrition as a precedent, but it's no surprise as it's also the Ninth Court that made the Omnitrition decision.

You can read my summary of Omnitrition case here:
http://amlmskeptic.blogspot.com/2014/01/mlm-dictionary-omnitrition-case_30.html

This would have some profound impact on some very big players in network marketing that relies on recruiting 'self-consumers' who then recruit more self-consumers to make themselves rich. Those who emphasize retail sales by sales teams should not be affected.

(UPDATE) BREAKING NEWS: Wife of Carlos Wanzeler, TelexFree fugitive, arrested at airport, denied bail

Boston Globe has learned that Katia Wanzeler, wife of Carlos Wanzeler, and alleged recipient of at least one cashier's check found in TelexFree, was detained and arrested at an airport (presumably, Boston Logan Intl John F. Kennedy Intl in New York)

#TelexFree co-owner’s wife arrested as she tried to leave the country http://t.co/wMuzqLIr5P via @BostonGlobe
— Beth Healy (@HealyBeth) May 15, 2014

Carlos Wanzeler has left the country several weeks ago, without informing his attorney. US DOJ considers Carlos Wanzeler a fugitive and apparently a warrant for his arrest had been issued.

James Merrill, co-owner of TelexFree, was already arrested last week.

UPDATE: According to affidavits filed with the court by Homeland Security, Katia Wanzeler's one-way ticket was purchased in cash by "someone in Brazil" (presumably, Carlos?)   Katia was detained as "material witness" by Homeland Security. According to Katia Wanzeler, Carlos Wanzeler and daughter (?) Livia Wanzeler drove to Canada on the day of the raid by HSI/ICE/FBI/whoknowswhatelese on TelexFree office, and from there, flown to Brazil.

UPDATE 2: According to reports cited by BehindMLM, Katia Wanzeler was denied bail (which means she's indeed ARRESTED, not merely detained), as she's found at JFK with $3000 USD in cash, as well as FOUR fully loaded suitcases (70 pounds each?) AND one-way plane ticket to Rio de Jainero, Brazil. Her lawyer tried to argue that she's merely going for a visit with clothes for relatives, and will return in 1 week. The judge did not accept that explanation, and bail was denied as she's a flight risk.

According to affidavit filed earlier by Federal agents, Katia earlier, when questioned by agents who served a search warrant on the Wanzeler residence along with on TelexFree HQ, claimed that her husband is staying at a hotel, when in fact her husband, along with daughter Livia, drove north into Canada and caught a plane there to Brazil when situation turned dire. This raises the possibility of Katia being charged with obstruction of justice / impeding active Federal investigation later by USDOJ.

IN RELATED NEWS: James Merrill, the TelexFree co-owner that's currently in custody, has his bail also denied due to possible flight risk.

http://behindmlm.com/companies/telexfree/wanzelers-wife-arrested-denied-bail-and-in-tears
http://www.nydailynews.com/news/national/wife-accused-billion-dollar-ponzi-schemer-fly-brazil-feds-article-1.1794070
http://wwlp.com/2014/05/15/ny-judge-jails-wife-in-mass-fraud-scheme/
http://www.bostonglobe.com/business/2014/05/15/bmw-ride-quebec-flight-sao-paulo-delivered-telexfree-owner-refuge-from-authorities-his-wife-and-business-partner-are-custody/zxGZI8Lvrlp9DccSVtyaCO/story.html

If your name is among the "TelexFree 8", don't try to leave town.

BREAKING NEWS: TelexFree head James Merrill arrested by Homeland Security, Wanzeler wanted as fugitive

According to updates obtained by ASDUpdates.com through the court PACER system, and spotted by behindmlm.com, criminal charges have been filed against James Merrill and Carlos Wanzeler for "conspiracy to commit wire fraud", the same charges that brought down Andy "Ad Surf Daily" Bowdoin.

It is believed that Wanzeler had left the US earlier for Brazil. According to Boston.com, James Merrill has already been taken into custody. See below the additional links.

UPDATE: Wanzeler is considered a fugitive from US justice. If you have information on where is Carlos Wanzeler, you are encouraged to inform the local authorities, or the American Embassy if you are not in the US.

UPDATE: James Merrill will be arraigned for bail hearing on Monday. He's being detailed for jail at a currently undisclosed location.

http://behindmlm.com/companies/telexfree/telexfree-owner-arrested-criminal-charges-filed/#more-17057

Related articles

• Owner of Marlborough's $1 Billion Pyramid Scheme, TelexFree, Arrested
• One TelexFree Owner Arrested in Worcester
• NEWS UPDATE: TelexFree Insiders Fled or Tried to Cut Deals, WorldVentures files appeal to pyramid scheme decision
• Boston feds charge 2 in alleged pyramid scheme