SEC freezes assets of TelexFree and eight people affiliated with the company alleged fraud
defendants are continuing to enroll new investors every day, but it is clear the pyramid has collapsed, the SEC said in its complaint.
The SEC found that TelexFree produced just $1.3 million in actual revenue for Internet phone services, a sliver of the $1.1 billion it allegedly promised investors, who were told they would reap generous returns if they placed online ads touting the service.
has been a money making machine for the defendants, the SEC said in its complaint. Since mid November, the company financial records show it has transferred $30 million to the principals or their affiliated companies, the SEC alleged. Tens of millions more in customer funds are currently unaccounted for, the SEC said.
TelexFree f nike air max 90 iled for bankruptcy protection in a federal court in Nevada Monday. FBI and Homeland Security agents raided the company offices in Marlborough the next day. During the agents search of the offices, chief financial officer Joseph H. Craft was stopped by a deputy sheriff as he sought to leave. He told the deputy he was merely a consultant, helping TelexFree prepare its bankruptcy case, according to one of the SEC court filings.
The SEC found that executives of the company have been trying to transfer millions of dollars out of TelexFree to themselves or other entities in recent days and weeks. It received a judge approval to freeze the company assets on Wednesday.
The cashier checks seized during the raid were made out to various principals and TelexFree entitie nike air max 90 s, according to the SEC filing. Five of them were made out to TelexFre nike air max 90 e LLC, in Nevada, for $25.5 million, and one, for $2 million, was made out to Katia B. Wanzeler, who is believed to be the wife of co owner Carlos N. Merrill submitted an order with his brokerage firm to sell $1.2 million of his mutual fund holdings, an SEC attorney learned, according to a court document.
TelexFree fortunes have been in peril for months. In June, the company Brazil operation was shut down by a judge who said TelexFree was a fraud; investigations of money laundering and other alleged wrongdoing are underway in several countries.
Still, thousands of people in the United States have continued to participate in the company, many of them from Brazilian immigrant communities.
Participants invested in membership of $289 or $1,375 and were told to go online every day to approve one or five Internet ads, and receive annual returns as high as 250 percent.
In March, TelexFree finances had begun to crumble, regulators alleged, yet the company still kept pressing investors to put in more cash.
after the SEC and other regulators have alleged that such programs are a fraud, the promoters of TelexFree continued selling the false promise of easy money, Paul G. Levenson, director of the SEC Bosto nike air max 90 n regional office, said in a statement Thursday.
The SEC fraud complaint names owners Merrill, 52, of Ashland, and Wanzeler, 45, as well as Sanderley Rodrigues de Vasconcelos, a promoter known better as Sann Rodrigues, who is 42 and used to live in Revere. The SEC said he now lives in Davenport, Fla. He was previously sanctioned by federal securities regulators in 2006 for defrauding Brazilian immigrants in the Framingham area through a prepaid phone card outfit called FoneClub.
Also named in the complaint are four of the company top promoters: Steven M. Labriola, 53 of Northbridge; Santiago De La Rosa, 42, of Lynn; Randy N. Crosby, 51, of Alpharetta, Ga., and Faith R. Sloan, 51, of Chicago. Craft, an accountant who serves as financial chief according to the SEC complaint, is 50 and lives in Boonville, Ind.