IPro Sued by SEC as Alleged Pyramid Scheme

Back in July 2017, I had serious reservations about the amount of PR crap put out by IPro supporters, who claimed everything from ex-Shark Tank guy endorsements to the typical "we have a lawyer so it's not a scam" retorts.

Guess what: SEC says IPro is a 26 million dollar scam, and is suing its owner, not even two years later.

I know it's cliche, but...

I TOLD YOU SO!!!!!!!!

Scam Tactics: How Easy It Is To Fool Experts and Review Sites, or allow them to fool you

Recently, there's an article at Vice.com, where the author decided to play a hoax on TripAdvisor... They created a FAKE restaurant, which is a picnic table in the back of the author's house, created some FAKE entrees (you'll laugh at the ingredients), got some FAKE reviews through burner phones and whatnot, and got it to be the top-rated restaurant in London... a restaurant that does NOT exist.

I won't spoil the method, let's just say, it's easier than you think.

This wasn't the first prank the author, Oobah Butler, had done. Previously he bullsh*tted his way onto Paris Fashion Week and it was absolutely brilliant. But he's hardly the first to prank experts and succeded.

But then, expert reviews are fooled all the time.  In 2008, wine critic and author Robin Goldstein created a fake restaurant, allegedly stocked with the worst wines Wine Spectator magazine had ever rated. The submitted it to the said magazine. After a while, the fake restaurant had won "award of excellence" by the same magazine.

Wine Spectator called it "publicity seeking stunt", but it exposes something deeply troubling... What sort of experts at the magazine review the candidate for "award of excellence"?  And if they let a fake restaurant get on, what can DELIBERATE manipulation do?

But the pattern ran much much deeper than that. Experts are fooled ALL THE TIME.

• TV host displayed a $15 IKEA print in an art museum, and none of the art experts spotted the problem. 
• The Wine Spectator gag had a sequel... a French scientist decided to die a white wine red and gave it to 54 wine science students. NONE could detect they are tasting a white wine.  
• Food experts cannot tell McDonalds chicken McNuggets from "organic" chicken nuggets. In fact, people cannot tell organic fruit from non-organic fruit

And the problem doesn't stop there. There are review and authority websites that secretly signs under-the-table deals with crooks to promote or write nice articles without any disclosure. And this had been a long-standing problem in network marketing.

How Paris Hilton and celebrities made SEC, FTC, and FDA see red: possibly illegal endorsements and reviews are exploding; how to spot them and avoid them

What do actor Jamie Foxx, ex-Boxer Floyd Mayweather, rapper DJ Khaled, soccer player Luis Suarez, and hotel heiress Paris Hilton have in common?

They all endorsed an initial coin offering (ICO), either publicly or online. Jamie Foxx tweeted about anticipating Cobinhood, Floyd Mayweather and DJ Khaled endorsed Centra, Luis Suarez endorsed Stox. Paris Hilton tweeted that she supported ICO of Lydian. only to delete the tweet 3 weeks later.

New York Times wrote an expose on how boxer Floyd Mayweather and rapper DJ Khaled endorsed an ICO called Centra, despite many questions about the head of the company and the business model. And that is when Security Exchange Commission (SEC), the regulatory body of investments in the US, started to see red.

SEC had already issued an investor bulletin in July specifically on ICOs, warning that some ICOs may be considered securities in the US, and promotion of such may violate security laws because they are not registered with the SEC.

SEC in September 2017 closed two fraudulent ICOs and alleged Maksim Zaslavskiy of fraudulently promoting two ICOs, REcoin and DRCoin, which were advertised as being backed by real estate and diamonds. SEC alleged that Zaslavskiy raised only 1/10th of the money he actually did, and never hired any experts nor purchased any diamonds or real estate as it claimed it did or will do. SEC obtained a court order to freeze all assets of companies related to these two ICOs.

SEC on November 1st issued a directive to all people, but specifically, celebrities who promote/endorse ICOs.

Any celebrity or other individual who promotes a virtual token or coin that is a security must disclose the nature, scope, and amount of compensation received in exchange for the promotion.  A failure to disclose this information is a violation of the anti-touting provisions of the federal securities laws.  Persons making these endorsements may also be liable for potential violations of the anti-fraud provisions of the federal securities laws, for participating in an unregistered offer and sale of securities, and for acting as unregistered brokers.  

Paris Hilton seems to be the only celebrity who had walked back on his or her ICO endorsements as of 11/11/2017.

But SEC wasn't the only US Federal agency out looking for misleading and possibly illegal endorsements. Federal Trade Commission (FTC), and Federal Drug Administration (FDA) are also clamping down on such illegal behavior that may be misleading consumers.

This looks familiar: SEC shuts down two ICOs (RECoin and DRC) for bogosity

Two days ago (September 29th, 2017) SEC shut down two companies ran by Maksim Zaslavskiy trying to promote ICOs, or initial coin offerings. Zaslavskiy claimed his cryptocurrencies are backed by Real Estate (REcoin) and Diamonds (DRC - Diamond Reserve Club/Coin). Turns out they are just bogus claims.

For those who track this sort of things, this is a virtually beat-for-beat clone of an earlier scam, Gemcoin, "backed by amber", shut down by SEC back in 2015.

Gemcoin was a fictional cryptocurrency released by USFIA based in Arcadia, California. Its head is Steve Chen (also known as Chen Li 陳力).  Chen ran 13 different entities that dabbled in MLM telecom, real estate, jewelry and gemstones, art imports, and so on, and also encouraged recruitment from inside China. In 2014, his latest scheme, American Mining 美洲礦業 collapsed in China leading to multiple arrests. American Mining also promised massive profits by investments in amber.

Steve Chen's final scheme, Gemcoin, is aimed at overseas Chinese ex-pats. It is supposedly a cryptocurrency like Bitcoin but backed by amber. It also claimed amber is very valuable and USFIA has exclusive mining rights and jewelry factory in the Dominican Republic. It had the backing of several local celebrities, including former mayor of Arcadia John Wuo. Steve Chen and his second, Leonard Johnson, ran investment seminars in multiple Chinatowns across North America, sometimes even dressing up his security guard, John Zhang, as a "jewelry appraiser".

When SEC finally shut down USFIA/Gemcoin in 2015, the scheme had taken in over 30 million dollars. John Wuo, who had endorsed Gemcoin, quickly resigned as city councilman "due to health reasons".  And the truth started coming out... The receiver who took over the company said there are no gem grade amber in storage, just regular 'souvenir' grade stuff. And the alleged contract for the mine doesn't exist either. It was all one huge hoax scam. 

When you go through the history of REcoin and DRC, you will find a familiar albeit accelerated pattern.

Even "Hedge Fund of the Year" Got Tricked By Ticket Ponzi Scheme

A sports talk show radio host claims he has access to an almost unlimited amount of discounted major sports tickets, and he needed a lot of money to buy them in order to share the profits. Do you believe him?

A "hedge fund of the year" with 18 billion assets did, and it appears they have lost $4.3 million they put into two companies controlled by this talk show radio host.

You may think who'd believe this sort of stuff, or how can they be this stupid, but really, think about it...

Hedge funds, esp. fund of the year are NOT stupid.

However, there's no doubt that this is a ponzi scheme... When the Feds arrested the radio talk show host and uncovered a trove of communications between him and his co-conspirators, as well as evidence of his millions in gambling debt.  Robbing Peter to pay Paul is the very definition of Ponzi scheme. This radio talk show host, who co-hosts with a VERY famous former NFL celebrity, had been accused with running this scheme.

Yet you can see this sort of argument proliferate in the "make money fast" market, and promoters use the language of "this can't possibly be a scam because it associated with _____", and this guy has it in spades. A famous hedge fund gave him millions of dollars. He co-hosts a show with a celebrity. He can't possibly be a scammer, right?

WRONG!

Lesson to take away: when someone tries to sell you something on reputation only, think VERY VERY HARD on it. The risk is probably much higher than you think.

Two Ponzi Scammers Got Their Prison Sentences Handed Down...

Two ponzi scammers got their prison sentences handed down recently in early 2017.

Paul Burks, who was the head of the $939 million Zeek Rewards ponzi scheme with over 1 million victims around the world, got 14 years in a Federal prison, in addition to fines of $244 million in restitution (which he can't pay as he already gave up all his possessions) and 3 years probation. Given that Burks is already 70 years old and is believed to be not in the best of health, he may spend his final days in prison.

Two other top heads of the scheme, Daniel Olivarez (computer guru) and Dawn Wright-Olivares (VP of Operations and spokesperson) have been sentenced previously to lesser terms for their contributory roles in the scam that was shut down in 2012 by SEC and Secret Service. It was believed they were fined and have to give up their residence. There was no word on what happened to a restaurant Dawn allegedly operated, or what happened to her job at a different MLM company called iWowwe.

MLM Skeptic had been tracking Zeek Rewards for over a year before it was shut down and published several articles explaining how Zeek Rewards cannot be legitimate. Indeed, in the final days of their scam they tried to gag me with a "takedown request" to my content host by claiming MLMSkeptic had violated their trademark when it was quickly realized that the alleged trademarks was not even owned by them! Must be really desperate over there in their final days, as only a few weeks later when SEC and Secret Service stepped in.

In other news, co-leader of a smaller ponzi known as "The Achieve Community", Kristine Johnson, was sentenced to 21 months in Federal Prison. TAC, which is peanuts compared to Zeek, was shutdown in 2015 by SEC. It was a pretty simple Ponzi scheme that didn't bother to polish itself by hiring celebrity lawyers and experts and pretending to be legitimate. They mainly stuck to Facebook and such, by claiming "triple algorithm" that can multiply money... What utter nonsense.

MLM Skeptic had not been tracking TAC but it was identified early on by Oz of BehindMLM as a simple cycler ponzi scheme.

What do these two scams have in common? It's actually quite simple..

GREED.

Cognitive Bias: Sunk Cost Fallacy

Answer this following question to yourself, truthfully please. Remember, it's for you and you alone. Only you would know the answer.

Q: Do you make rational decisions based on the best-estimate future value of objects, investments, and experience? 

Your answer to yourself is probably going to be: Yes, of course.

You are wrong. In reality, your decisions are based on your EMOTIONAL investment you already made and accumulated, and the more you invest, the less likely you can let it go. 

This is a cognitive bias known as "sunk cost fallacy".  In short, you are basing your decision on what has been invested, rather than what it's worth NOW (or in the future).

And it's very simple to make you feel you've invested time and effort... by making you do trivial tasks that amounts of zero importance. Zookeepers (and pet owners) know this principle well... it's called "contra-freeloading".

Contrafreeloading is a term coined in 1963 by animal psychologist Glen Jensen, who created an experiment where 200 albino rats were given a choice: unlimited food pellets in little bowl, or a mechanism where they have to learn to press a lever to release a food pellet. Logically, rats should simply gorge on the effortless food and never touch the lever. However, the opposite happened... rats actually prefer the food source where they had to press a lever, by a large margin. This was since repeated in gerbils, mice, birds, fish, monkeys, chimps... and more. (The only exception is the domestic cat). In short, animals prefer doing a little work (but not too much) for their food, rather than just take a handout.

A great example of contra-freeloading in a scam is ZeekRewards ponzi scheme (as accused by SEC and USSS), an $850 million scheme will soon go to trial. In ZeekRewards, one supposedly buy bids in the Zeekler penny auction, give away the bids to random strangers as promotion, and gets rewarded with certain amount of daily profit based on the bids purchased for the next 90 days. One also needs to post ads to random places on the Internet, and then post the URL on the ZeekRewards website as "verification" to be rewarded. In reality the vast majority of the bids were never used (i.e. the participants simply put money into the system) and expect daily "profit share" of up to 1.8% of the money they put in. The daily posting of ads were never tracked and verified, and indeed some people started a blog just to post ads... that nobody will ever read or see. It's rather obvious, in hindsight, that the "posting the ad" must be contrafreeloading... to make the participant feel they "worked" for and "earned" their share of "profit" amounting to as high as 1.8% DAILY, when the trivial task can literally be done in a few minutes, and be outsourced to some kids for pennies a day.

Yet when all these facts were pointed out to the ZeekRewards affiliates, their answers often are "you work for a competitor", "you work for the 1% to oppress us", "why don't you want us to succeed", and so on. After Zeek was shut down, several members even outright claimed "there were no victims until the government came along."

Curt Miller, on FB, soon after Zeek was closed by USSS and SEC, claiming that
"there were no victims (in ZeekRewards) until the government came along". 

They are so emotionally (and financially) invested into ZeekRewards, they can longer think rationally and see reason, even when there is NO REASON to continue to behave irrationally.

It is illogical to continue to support an alleged scam AFTER the owner made a plea deal with the government. However, hundreds of people donated money to a organization that promised to put the money toward "defending" ZeekRewards from the SEC. The owner of such organization was later jailed for defrauding the US government in an unrelated matter. The so-called defense ended up being an attorney who attended the receivership meetings, and filed several motions that was denied. He accomplished nothing useful except delay the process for the rest of the victims, and it was widely rumored (but never confirmed) that the rest of the money went to the organizer's private plane's upkeep.

They are the embodiment of sunk cost fallacy.

SEC Halts Traffic Monsoon Ponzi Scheme, Reasserts that "Autosurf Ponzis" are illegal

The internet buzz on July 28th 2016 was the press release that SEC has halted the $207 Million Ponzi scheme called Traffic Monsoon.

Traffic Monsoon was operated by Charles Scoville, as a combination "internet traffic exchange and pay-per-click program" that solicited money from all over the world. It accepted money from at least 162000 investors primarily in US, India, and Russia by claiming to be a "highly successful advertising company", when in reality, more than 99% of the revenue was paid into the system by new investors, making it a classic Ponzi scheme.  Traffic Monsoon LLC is a Utah company. Scoville is believed to be in Dubai. SEC's motion to have an temporary freeze and receiver to take over the company has been granted.

Traffic Monsoon's primary product (which accounted for 99.6% of all revenue) is the "Adpack". At $50 each, purchaser is supposed to get 20 clicks on the banner (either they provide, or they can use one provided by Traffic Monsoon) and 1000 visitors from the traffic exchange, as well as "share in Traffic Monsoon's profit". In reality, TM was never able to fulfill the visitor promise. By its own counter, it can only provide about 1/10th of the visitors. In reality, TM operated as a $50 in, $55 out HYIP.

Those that track scams, such as the MLMSkeptic, would notice that this is structurally IDENTICAL to 12DailyPro (2005-2006) or Ad Surf Daily (2006-2008), both were also prosecuted as autosurf ponzi schemes.

What's more interesting is Charles Scoville himself has been observed operating several predecessors to Traffic Monsoon. There's TVIBUX, and there's AdHitsProfits, both are slight variations on the same ideas. Neither, however, made it big to hundreds of millions of dollars.

But first, let's explain what an autosurf is, and what an investment autosurf.

What is an autosurf? 

Autosurf is a type of Internet website traffic exchagne that automatically rotate advertised websites in the web browser.  Imagine leaving a browser window open to constantly display banners from all the other websites, which changes periodically. Each "view" earns you a "credit" which allows your site's banner some display time in other people's browser window.

Autosurf can operate as a "ponzi scheme" even if no money changes hands, if overall credits earned is in excess of total pageviews delivered, thus ensuring that there will always be credits left over.

Autosurf that involve money are known as Investment autosurfs.

USFIA Raided by SEC, FBI, etc. on 29-SEP-2015, assets frozen, company seized

Multiple news sources, including onsite witnesses, have reported that FBI, SEC, and several other agencies have raided USFIA on 9/29/2015 and froze its assets, and appointed a receiver to take over.

San Gabriel Valley News

SGVT: U.S. Government seizes Arcadia company's assets in GemCoin fraud case (29-SEP-2015)

BREAKING NEWS: SEC halts "Achieve Community" ponzi scheme

English: The U.S. Securities and Exchange Commission headquarters located at 100 F Street, NE in the Near Northeast neighborhood of Washington, D.C. (Photo credit: Wikipedia)

The shoe have dropped, folks. And it's actually a sledgehammer.

Washington D.C., Feb. 18, 2015 — 

The Securities and Exchange Commission today announced fraud charges and an emergency asset freeze against two operators of a Colorado-based pyramid and Ponzi scheme that promises investors extraordinary returns of 700 percent through a purported “triple algorithm” and “3-D matrix.”

In a complaint unsealed yesterday afternoon in federal court in Denver, the SEC alleges that Kristine L. Johnson of Aurora, Colo., and Troy A. Barnes of Riverview, Mich., have raised more than $3.8 million since April 2014 from investors they enticed into buying positions in their company Work With Troy Barnes Inc., which is doing business as “The Achieve Community.”  

Full press release available here:  http://www.sec.gov/news/pressrelease/2015-35.html#.VOTcBPnF-Sr

BREAKING NEWS: SEC shuts down eAdGear (GoFunPlaces / GoFunRewards)

According to latest article on BehindMLM, eAdGear, the folks behind GoFunPlaces / GoFunRewwards are done... shut by SEC, with help of FBI, and authorities in Hong Kong, China, Canada, and United Kingdom.

This would mark the FOURTH Ponzi shut by SEC in this year alone (WCM, Zhunrize, and TelexFree)

See http://behindmlm.com/companies/sec-shuts-down-eadgear-gofunplaces-gofunrewards/

BREAKING NEWS: Zhunrize closed as $100 million ponzi/pyramid scheme by SEC

Breaking news: Zhunrize, an alleged e-commerce platform that was pitched as "Internet store you can own" for $3000 a pop has been closed by SEC as a pyramid scheme where joiners are encouraged to recruit more joiners and get paid if they do so.

SEC has obtained a full Federal money freeze order from court in Georgia and have frozen all assets belonging to Zhunrize, and cited stats of up to 70000 victims who handed over 105 million dollars.

http://www.courthousenews.com/2014/09/23/71668.htm

Behind MLM had previously done a review of Zhunrize where it concluded this can only be a ponzi scheme. I have provided additional comment that this is just "Skybiz" pyramid scheme reinvented for 21st century... using the same lure: ecommerce.

http://behindmlm.com/companies/zhunrize-review-a-3000-e-commerce-platform

This marks the THIRD major Ponzi scheme shut down in 2014 ... TelexFree, WCM777, AND now Zhunrize.

News update 13-JUN-2014 (Friday!): TelexFree Faith Sloan plays dumb and begs for money; Solavei goes Chapter 11 Bankruptcy;

Remember, folks, get your news from a trusted news source, like I do. I don't relay unconfirmed information, and neither should you.


Faith Sloan Plays Dumb and Begs Court to Release Money; SEC says "No Way"

Faith Sloan, one of the "TelexFree 8", has filed a motion on 10-JUN-2014 asking court to release about 18K to pay expenses such as lawyers, rent, and food.

However, this is specifically against the injunction that froze her money in the first place. SEC and the judge that issued the freeze has specifically stated that no "carveout" ( i.e. taking money from accounts that contains money that may be tainted by the fraud) will be allowed if the account owner does not declare his/her assets. Thus far, Faith Sloan has refused to declare her assets as she claimed doing so may incriminate herself (i.e. "plead the fifth").

SEC has also long documents that detailed her multiple violations of freeze order, including:

1) Paid $14854 to "Changes Worldwide" another suspect scheme on 24-APR-2014
2) Paid $3990 to "Changes Trading LLC", which is a part of Changes WorldWide, on 28-APR-2014
3) Wired $30000 to her attorney on 7-MAY-2014
4) Transferred her house deed to her mother on 12-MAY-2014

And here she comes asking the judge to release more money to pay rent... to her mother, whom she just gave her house to. AND another $18000 to her attorney.

Hahahahahaha.

News Update 07-JUN-2014: TelexFree trustee appointed; TelexFree Faith Sloan know NOTHING about fraud, SEC disagrees; Lyoness not a pyramid scheme in Norway now

Remember folks, when you read news, even ones provided here, you should check the links I provided to make sure I was representing the new properly, and you should do the same for ALL the "news" you come across, unless you encounter news such as those from major newspapers, which has readers to account for and has a reputation of telling the truth, rather than what you want to hear. Stop reading crap meme and spreading them.


Stephen B. Darr selected as US trustee to oversee TelexFree bankruptcy

As directed by the judge Hoffman, US trustees has appointed Stephen B. Darr of Merisow Financial Consulting as trustee to takeover the TelexFree bankruptcy.

Here's the actual court order making the appointment:  (Thanks to Attorney Tim Durken for the lead)

http://www.scribd.com/doc/228343084/TelexFree-Certificate-of-Appointment-of-Chapter-11-Trustee

What exactly does a trustee do? Here's Cornell Law School's link to actual law on that:

http://www.law.cornell.edu/uscode/text/11/1106

You can find a short profile on Mr. Darr on the Merisow website:

http://www.mesirowfinancial.com/mfc/leadership/darr_s.jsp

NEWS UPDATE 13-MAY-2014: TelexFree believers spam judge; WCM777 "counsel" unlicensed?; Botafogo dumps TelexFree

Some news on this Tuesday the 13th (unlucky day to some Hispanics)...

TelexFree Believers Spam Judge with Doodle

According to court documents made public via PACER court system, many TelexFree believers have mailed doodles and letters of support to the judge presiding over TelexFree. As they have really nothing to do with the case (it's not considered evidence), it's basically spam. They are in English a Spanish, handwritten and typewritten, some even includes doodles. Many of the letters basically says "I trust TelexFree, I think this is all some sort of media understanding and a conspiracy to make the company look bad..."  Which is, of course, hilarious.

You can see a sample of such at PatrickPretty.com


WCM777 "General Counsel" may be unlicensed ANYWHERE

Vincent Messina, who was a part of the SEC probe into the WCM777 ponzi scheme as he was listed as "counsel" for the company, has no license to practice anywhere, according to a new SEC complaint filed to the Federal Court. The scam's size has been revised upward to over $80 million dollars, and Vincent Messina, whom was highlighted before as having "lost" a 200K dollar check, has no licensed to practice law in California (WCM777 is based in Southern California). While Mr. Messina claimed that he's licensed in Florida, SEC has checked with Florida Bar association, and Mr. Messina's membership is listed as "inactive".

According to the same complaint, Messina is also running another suspect scheme called IMV which may have received several million from WC777 before SEC closed the scam in April 2014.

See PatrickPretty.com for details.



Botafogo Dumps TelexFree Sponsorship

On the team website, Botafogo announced that they have rescinded TelexFree sponsorship (in Portuguese). They will strip the TelexFree logo from their uniforms immediately. The announcement was barely 2 sentences.

Thanks to PatrickPretty.com for the lead story.

Related articles

• BREAKING NEWS: TelexFree Declares Bankruptcy, then was REJECTED
• TelexFree News Update 5/2/2014: New CEO knows nothing, most procedural things done, no big news
• BREAKING NEWS: TelexFree head James Merrill arrested by Homeland Security, Wanzeler wanted as fugitive
• BREAKING NEWS: TelexFree Bankruptcy Will Be Moved to Massachussetts

TelexFree News Update 4/30/2014: Sann Rodrigues invokes God, Santiago De La Rosa ordered to sell bling cars

Not too many news items, as everyone is waiting for the huge court date of May 2nd...

Sann Rodrigues invokes God, vows "I am never going to stop this [TelexFree?]"

According to the SEC, in court documents recently filed, they found Sann Rodrigues uploaded a video to Youtube on April 16th, the day of the SEC/ FBI / HSI / ICE / who knows what else raid on TelexFree. In the video, Sann Rodrigues announced:

I am never going to stop this. If I say to my network I will never stop this because it is in blood, DNA. And who started multi-level was God. If you want to learn, learn. If you want to frown, frown. God made binary, Adam and Eve, and told them to multiply. For me, it is given by God.

It was pretty obvious that Sann Rodrigues was referring to TelexFree (that he will never stop doing TelexFree).

So being a scammer is in his blood, hmmm? Please keep in mind this is NOT Sann Rodrigues's first time being investigated by SEC. Back in 2007 SEC busted him for operating "Universo FoneClub" that charged over 1000 dollars for an opportunity to sell phone cards, but people actually made money recruiting other people.

Back then, he claimed that God wanted Brazilians to prosper and Universo FoneClub was the way. Now he claimed God invented binary. It's clear that he's recycling his old recruiting talk and he really isn't going to change... Much like Kevin Trudeau (who recently got 10 years jail sentence).

Recall that the only one who really prospered is himself. He's the one showing off fancy Ferraris on TV and a mansion in Florida. And he's not shy showing it off. See for yourself:

Sann Rodrigues on Vimeo, self-proclaimed millionaire through TelexFree, showing off his assets
vows to never stop (what? cheating other people? first through Universo FoneClub, then TelexFree?)

Which brings us to one of his co-conspirators, also charged by the SEC, Santiago de la Rosa.

TelexFree News Update, April 24, 2014: Claim process starts (DO NOT FILE YET!), more investigation in Dominican Republic, and more legal motions

A flurry of news for past 24 hours, but all of them small. Here's the summary:

TelexFree Bankruptcy will Continue in Nevada for Now, Claim Deadline Set

Bankruptcy judge in Nevada has allowed the bankruptcy proceedings to continue for now (on an interim basis), with another court date for May 2nd among the parties such as TelexFree, SEC, and US Trustees. KCC has been appointed interim claims and noticing agent to handle paperwork. 

As a result of this appointment, court also has set tentative dates, including a "341 Meeting" (named for the bankruptcy law section) for May 22nd, and claim deadline of August 20.  The debtors will be present and if you are a creditor, there may be an opportunity to question the principles of TelexFree. 

The "341 Meeting" will take place May 22, 2014 at 3:00 P.M. in the Jury Assembly Room of the Lloyd D. George U.S. Courthouse in Las Vegas, Nevada

Any and all claims *must* be filed with the claim agent. Absolutely DO NOT file the claim with the court itself.  Jordan "Ponzitracker" Maglich will have a guide on how to fill out the claim and where to send it and it will be linked from here when it is published. You can wait a few days!

See http://www.ponzitracker.com/main/2014/4/24/claim-deadline-set-for-victims-in-telexfree-bankruptcy.html


ANALYSIS: Do not file any claims yet. Wait until after May 2nd at least. You don't even know if the claims will be staying in Nevada just yet. By then a guide to fill out the claim will be published.


TelexFree and SEC file a flurry of motions and briefs

TelexFree is arguing that bankruptcy would trump some parts of the TRO. This will be decided in Nevada court on May 2nd.   (SEC asked for April 30th, but judge took TelexFree's side and gave both May 2nd).

SEC's arguing that the case belongs in Massachussetts, where the creditors and the principal all reside. This will be heard on May 2nd.

The individual defenders, such as Labriola, Crosby, and so on have entered their own motions to fight the TRO. On Friday, April 25th, court in Massachussetts will decide whether the TRO will be made permanent.

You can read a full list of motions and order on BehindMLM.com

See: http://behindmlm.com/companies/telexfree/telexfree-court-status-24th-april-2014

ANALYSIS: May 2nd seem to be the big day. Wait until then.

Dominican Republic Authorities Expand TelexFree investigation

Dominican authorities, including anti-money laundering unit, National Prosecutor, and Superintendency of Securities, will coordinate efforts to trace the money of victims in Dominican Republic, which is believed to be tens of millions of pesos. They promised to track down the top promoters and find out where the money went, and if it did indeed left the country, will seek US help to retrieve the money. 

See http://www.dominicantoday.com/dr/local/2014/4/22/51221/Dominican-agencies-probe-TelexFree-ponzi-scheme

Breaking TelexFree News: TelexFree wants a 6 week delay, while DOJ wants bankruptcy trustee to take over ASAP

Here's your TelexFree update for 23-APR-2014.

TelexFree wants 6-week delay in bankruptcy

TelexFree, through KCC, has filed a motion for 6 week delay on 22-APR-2014, claiming that the SEC/FBI/ICE/local law/ who knows what else raid took all their documents and they can't fill out the rest of bankruptcy paperwork. Bankruptcy court originally gave them 2 weeks, though normally all such information should have been included. For the bankruptcy to be even considered.

According to Jordan "Ponzitracker" Maglich,

Federal Bankruptcy Rule 1007 sets forth a list of the required documents and schedules to be filed in connection with initiation of a Chapter 7, 9, 11, or 13 bankruptcy.  In addition to a bankruptcy petition, a debtor is also required to file:

• schedules of assets and liabilities;
• a schedule of current income and expenditures;
• a schedule of executory contracts and unexpired leases; and 
• a statement of financial affairs.

In addition, other required schedules include lists of creditors holding secured and unsecured claims, personal and real property holdings, and executory contracts and expired leases.
In the initial filings made by TelexFree, none of these required schedules were included. 

http://www.ponzitracker.com/main/2014/4/22/telexfree-seeks-six-week-extension-to-file-financial-informa.html


US Department of Justice wants company placed under bankruptcy trusteeship IMMEDIATELY

US Trustees, which is the side representing the public, has filed a counter motion also on 22-APR-2014, that seeks to have TelexFree immediately transferred to the control of a bankruptcy trustee (much like Bernie Madoff's trustee Irving H. Picard, but not completely the same).

Normally bankruptcy can be handled by the people declaring the bankruptcy. US Trustees has plead with the judge to appoint a bankruptcy trustee due to evidence of fraud already documented by Mass Securities Division and the SEC, and the newly hired officers such as acting CEO and CRA cannot be trusted as they have been hired by those who are suspected of fraud.

You can read the document here:

http://www.kccllc.net/telexfree/document/1412524140423000000000001

Please note both are merely INTENT, and has NOT BEEN APPROVE BY THE COURT!

TelexFree Update: SEC will intervene in bankruptcy, telecom licenses in jeopardy, victims may be trolled for reload scams

Every day the scope of TelexFree scam seem to expand, and getting more complex, as different people search for ways to cope with the situation, whether they are victims, or "leaders" who lead victims, or worse. Here are some choice updates.

TelexFree owners paid themselves and more millions with participant money

TelexFree, according to SEC, only sold $1.3 million dollars worth of VOIP over 2 years that it operated. However, its owners passed out checks worth much more in the last six months. Here's some highlights, according to SEC's forensic accountant:

Albers [SEC forensic accountant] said TelexFree transferred a total of $3.1 million to Merrill Dec. 26 [2013] and the following day. Over those same two days, the company moved $7.3 million to Wanzeler, who wired half that amount to a Chinese bank in Singapore a week later, Albers said in court documents. 

There’s lots more: TelexFree sent more than $2 million to companies controlled by chief financial officer Joseph Craft between last November and March of this year. He was in the office when FBI agents raided the company, and he tried to walk out the door with $38 million in cashier’s checks. Among those checks: one made out to Wanzeler’s wife for another $2 million.

Now consider this simple question: if they sold only $1.3 million worth of VOIP over 2 years, where did all that $7.3 mil, $3.1 mil, $2 mil, and $38 mil come from?



Nevada Attorney General will "Intervene" in TelexFree's telecom approval

According to documents spotted by PatrickPretty.com, Nevada Attorney General / Consumer Protection Bureau has filed "intent to intervene" in regard of TelexFree licensing issues with the Nevada Public Utilities Commission.

This appears to be in reaction to the Joe Isaacs / ISG Telecom letter apparently sent to all 50 states (and DC) that he was lied by TelexFree to and the information submitted to various commission to "prove" TelexFree is a viable company, many of which were "submitted under seal" and thus not for public review, may be utter fabrications.

What that really means is Nevada AG wants to throw out the entire application for telecom license to operate in Nevada in light of the new information, such as TelexFree's bankruptcy and charges by SEC and Massachusetts SecState of being a huge Ponzi scheme.

Expect other states to follow in the next few days. TelexFree should have all of its telecom license invalidated within a few weeks. They were likely fraudulently obtained through filing of false information.


Also see BehindMLM: TelexFree communications registrations in jeopardy?

But wait, there's more!

BREAKING NEWS: TelexFree bankruptcy hearing delayed until April 21st

When Zeek Rewards ponzi was shut down there was a TON of crap info online released by people who have absolutely no idea what they are talking about, most of them fantasies like "it's just temporary", "Zeek is moving to Europe", "SEC doesn't have a case", "SEC lawyers admit in private they have no case", "Paul Burks was railroaded and his attorney is weak", and so on and so forth. People are simply in denial about reality.

And now the SAME THING is happening with TelexFree pyramid scheme (or Ponzi, depending on how you count). People in Brazil, who barely reads English, are releasing fake news or misinterpreted news, all of them 'good' news for TelexFree, of course. Items such as "they're just protecting our money", "evil government", "they are just allegations", "3 judges have signed off approving bankruptcy", "FIVE judges liked the bankruptcy plan"... and so on and so forth.

Don't believe crap info passed on by other people. GO TO THE SOURCE (remember "The Matrix"?)

The source says the proceedings have been "continued" (delayed) until April 21st, 2014.

http://www.kccllc.net/telexfree/document/1412524140418000000000004

One judge: August B. Landis.

Everybody else named on the credits are lawyers.

Bankruptcy has NOT been approved. And given the raid conducted by Massachusetts, SEC, FBI, HSI, ICE, and who knows what else, and charges filed, including temporary restraining order filed by SEC, IMHO, chances of bankruptcy being approved will be ZERO. Even if it was approved, it will be IMMEDIATELY appealed by SEC and rescinded by another judge.

So don't pass around bad info, esp. the ones you *want* to be true. You will be embarrassed when it turned out to be fake.