TelexFree Victims Claim Portal Opens !!

Thanks to Oz over at BehindMLM.com for breaking this news. You can file a claim here.

Welcome to the TelexFree Electronic Proof of Claim (“ePOC”) Claims Portal. The purpose of this ePOC is to allow creditors of TelexFree to file a claim in the TelexFree bankruptcies. To file a TelexFree claim, please register as a claimant and follow the instructions to complete your claim.

Wings Network: Final Judgment Against Promoter of Ponzi Scheme, Targeting Latinos

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23548 / May 27, 2016

Securities and Exchange Commission v. Tropikgadget FZE, et al., Civil Action No. 1:15-cv-10543 (D. Mass.)

SEC Obtains Final Judgment Against Massachusetts-Based Promoter of Pyramid Scheme Targeting Latino Communities

The Securities and Exchange Commission today announced that the federal district court in Boston, Massachusetts entered a final judgment by consent against defendant Simonia de Cassia Silva of Gloucester, Massachusetts, a defendant in a previously-filed enforcement action. In February 2015, the SEC charged two Portuguese companies operating under the name Wings Network, plus three company officers and 12 promoters of Wings Network, including Silva, with perpetrating an international pyramid scheme targeting Latino communities in the U.S.

In settling the SEC’s charges, Silva admitted the facts alleged in the Commission’s complaint, namely that she was a promoter of defendants Tropikgadget Unipessoal LDA and Tropikgadget FZE, which operated under the name Wings Network; rented an office space for a Wings Network “training center” in Pompano Beach, Florida, where she and defendant Vinicius Aguiar promoted Wings Network to prospective investors; and earned commissions from the sale of Wings Network membership packs.

Silva consented to the entry of the judgment, which permanently restrains and enjoins her from violating Sections 5(a) and 5(c) of the Securities Act of 1933. The judgment also permanently restrains and enjoins her from offering, operating, or participating in any marketing or sales program in which a participant is compensated or promised compensation solely or primarily (1) for inducing another person to become a participant in the program, or (2) if such induced person induces another to become a participant in the program. Finally, the judgment orders Silva to pay a total of $141,307.86 for disgorgement and prejudgment interest but provides a waiver of payment except for $123.86 based on her financial condition.

The SEC’s litigation in this matter continues against the Tropikgadget officers and the remaining promoters of the Wings network pyramid scheme.

The SEC’s investigation was conducted by Scott R. Stanley, Dawn Edick, John McCann, Deena Bernstein, and Amy Gwiazda of the SEC’s Boston Regional Office. The SEC’s litigation is being led by Ms. Bernstein and David London.

For further information, see Litigation Release Nos. 23209 (Feb. 27, 2015); 23351 (Sept. 17, 2015); and 23407 (Nov. 13, 2015).

 

Zeek Rewards: Defendant Darren Miller Responds to Bell’s Questions

In a response filed  on May 19th, co-defendant Darren Miller answered questions posed to him by the Receiver, Kenneth Bell.  Much like other answers from co-defendants, it was a boiler plate reply with no substance.

For example, here is Question 1 and its response:

Clipboard05

All subsequent questions (2 thru 14) are met with the same reply, with the exception of the question number changing. Other than that, no difference.

Next we have his reply to Requests for the Production of Documents. And, guess what? He uses the same response to each of those 27 questions.

Zeek Rewards: Burks’ Loses Another Motion for “Bill of Particulars”

This is the second time that Paul Burks has asked to see what the government has on him, I guess so he can see how bad things are. The last time, the motion was denied, and it is ‘deja vu all over again’. (Yogi Berra)

THIS MATTER is before the Court on “Paul Burks’ Motion for a Bill of Particulars,” Doc. 39, “Paul Burks’ Motion for Order Directing the Prosecution to Identify and Produce Rule 16 and Brady Material from Receivership and SEC Files,” Doc. 41, filed March 15, 2016 and the “Government’s Consolidated Response in Opposition to Defense Motions (Doc. 39 and Doc. 41),” Doc. 44, filed March 25, 2016, and the parties’ briefs and exhibits. Docs. 40, 48-49.
Having fully considered the arguments, the record, and the applicable authority, the Court finds that the “Paul Burks’ Motion for a Bill of Particulars,” Doc. 39, and “Paul Burks’ Motion for Order Directing the Prosecution to Identify and Produce Rule 16 and Brady Material from Receivership and SEC Files,” Doc. 41, should be DENIED as discussed below.

Judge Cayer goes on to say in the Order:

A bill of particulars is provided “to enable a defendant to obtain sufficient information on the nature of the charge against him so that he may prepare for trial, minimize the danger of surprise at trial, and enable him to plead his acquittal or conviction in bar of another prosecution for the same offenses.

But…

“A bill of particulars is not to be used to provide detailed disclosure of the government’s evidence in advance of trial.”

And he ends the document with this:

Based upon the foregoing, the Court finds that Defendant has sufficient information regarding the nature of the charges against him. Consequently, Defendant’s Motion for Bill of Particulars is DENIED.

And, after this revelation, Burks filed an Appeal, trying to get the Order vacated. It also did not do well for Burks.  Here is the essence of his argument (mostly):

The Magistrate’s Order is clearly erroneous, contrary to law, and must be reversed. The
Magistrate’s Order fails to engage with the plain language—and deficits—in the Indictment and the arguments raised in Mr. Burks’ pleadings with Rule 7(f) of Federal Rules of Criminal Procedure.

Apparently, Burks thought that filing 2 separate Appeals would fare better that just one (Docs 61 and 62); once again, he was exceedingly incorrect.

Burks decided to request an appendix document to be filed under seal in support of his opposition motions:

Appendix A contains references to matters that are presently non-public and documents
that are controlled by a discovery agreement with the government that directs “no further
disclosure shall be made of these items.” Thus, out of an abundance of caution, undersigned counsel are proceeding in this manner. An earlier version of this Appendix was previously sealed by the Magistrate. [Doc. 50]

The government filed their Opposition to the Appeal, and said:

As stated in Judge Cayer’s order, a bill of particulars is not to be used to provide detailed disclosure of the government’s evidence in advance of trial and the purpose of the bill of particulars is fully satisfied when the United States turns over its entire file to the defendant. As further stated in Judge Cayer’s order, the United States is in compliance with Rule 16 of the Federal Rules of Criminal Procedure and its obligations under Brady with regard to materials held by third parties, specifically, the Securities and Exchange Commission (SEC) and the court-appointed Receiver. Indeed, as reported by the Defendant, the United States has disclosed voluminous materials the United States received from the SEC and the Receiver, including correspondence reflecting the submission of numerous requests made by the United States for information relevant to its investigation. Although such disclosure clearly evidences the United States’ compliance with its discovery obligations, a review of the record simply fails to support the proposition that United States conducted a “joint investigation” with the SEC and the Receiver requiring the relief sought by the Defendant.

The Appellate Court was not impressed with Burks’ argument and said:

The district court has authority to assign non-dispositive pretrial matters pending before the court to a magistrate judge to “hear and determine.”

The court has carefully reviewed the Order as well as the objection, and has determined that the Order of the magistrate judge is fully consistent with and supported by current law, which he cited in his Order. Based on such determination, the court will overrule the Objections and fully affirm the Order.

 

ORDER
IT IS, THEREFORE, ORDERED that the defendants Appeals (#61 & #62) are DEEMED to be Rule 59(a) Objections, they are OVERRULED, and the Order (#60) is AFFIRMED.

BehindMLM: 2 More TelexFree Stories (sucks to be them)

These come from BehindMLM.com:


TelexFree Trustee goes on clawback rampage

telexfree-logoDating back to early March, the TelexFree Trustee has filed no less than thirteen clawback lawsuits against non-investors who profited from TelexFree.

Under counts of fraudulent transfer filed in adversary proceedings, the parties the TelexFree Trustree is suing are as follows: [Continue reading…]


More top US TelexFree investors named & shamed

telexfree-logoIn a court filing that flew under the radar until Patrick Pretty reported on it earlier today, TelexFree’s top US investors have been named and shamed.

Sorted by the amount of money they stole from victims in the $3 billion dollar Ponzi scheme, the one hundred and five TelexFree affiliates cited in the filing are as follows: [Continue reading…]


Thanks Oz for more good articles about this scam.

From BehindMLM: TelexFree Fined for “Crimes Against the Economy”

TelexFree fined $1.5 million for “crimes against the economy”

telexfree-logoIn another blow to TelexFree’s Brazilian based Ympactus, the company has been fined $1.5 million for “crimes against the economy”.

The fine stems from a National Bureau of Consumer Law (Senacon) investigation, which found Ympactus operated as a “Ponzi pyramid scheme”.

Senacon, a department of Brazil’s Ministry of Justice, claimed Ympactus operated

as a Ponzi pyramid scheme, breached the principle of goof faith and transparency, violated the confidence of consumer protection relations and conducted misleading and abusive promotion of the scheme.

The $1.5 million dollar fine was imposed on April 20th, with Ympactus given 30 days to pay up.

TelexFree’s lawyers in Brazil did not respond to Brazilian media requests for comment.

Late last year the Brazilian state of Acre fined TelexFree $782,512 after ruling it operated a Ponzi scheme. Last month Brazil’s IRS also slugged the scheme with a whopping $130 million dollar tax penalty.

 

Zeek Rewards: Government Opposes Burks’ Motion for Bill of Particulars

zeeklerThe government has filed an Opposition to Paul Burks’ request for a Bill of Particulars and for Brady Materials. The AUSA states in this Opposition:

On October 24, 2014, a federal Grand Jury indicted Defendant Burks on four charges related to his role as leader of ZeekRewards. Defendant is charged with, among other things, conspiracy to commit mail and wire fraud (18 U.S.C. §§ 1341, 1343 and 1349) and conspiracy to commit tax fraud (18 U.S.C.
§371). (Doc. 1). The Indictment sets out the fraud scheme in great deal over six single-spaced pages that include introductory language, a section on relevant entities and individuals, and
numerous pages devoted to the details of the scheme. Despite the detail set forth in the speaking indictment, the Defendant now asserts that he has insufficient notice of the allegations against him in order to prepare his defense.

In May 2015, this Court granted a continuance in this case until May 2016. Two months before the peremptory trial setting and approximately seventeen months after the Indictment, Defendant Paul Burks filed a Motion for a Bill of Particulars, seeking among other things the definition of Ponzi scheme1 and a detailed forecast of the Government’s trial evidence. Additionally, Defendant filed a Motion for Brady materials theoretically held by third parties. These motions are both baseless and untimely and should be denied.

The Assistant US Attorney points out that a motion for a bill of particulars is barred procedurally if not filed within 14 days of arraignment. Burks was arraigned in November of 2014.

Specifically Defendant alleges that he cannot determine: (1) who his alleged co-conspirators are; (2) what a Ponzi scheme is; (3) what conduct was in furtherance of the scheme; (4) what automated programs were used in the scheme; and (5) where Zeekler and Zeek Rewards maintained offices. (Doc. 40,
pgs 5-7).

I have uploaded this filing onto the Files website, USA v Burks

Zeek Rewards: Burks Criminal Trial Continued

THIS MATTER is before the court on the joint oral Motion to Continue. Having considered the joint Zeekmotion and reviewed the pleadings, the court enters the following Order.

ORDER

IT IS, THEREFORE, ORDERED that the joint oral Motion to Continue is GRANTED, this matter is continued from the peremptory setting in May 2016, to a peremptory setting of July 5, 2016, and the court finds the delay caused by such continuance shall be excluded as the ends of justice served by granting such continuance outweigh the best interests of the public and the defendant in a speedy trial. Specifically, defendant, his counsel, and the government have shown that the previous peremptory scheduling would result in a non-contiguous trial due to the intervening Fourth Circuit Judicial Conference, and that a resetting of the trial for a time without a substantial interruption would further the interests of all in a fair trial.

Zeek Rewards: Receiver Announcement for March 28th

ANNOUNCEMENT FROM THE RECEIVER – March 28, 2016

On March 16, 2016 the U.S. District Court approved a settlement between the receivership and NewBridge Bank in the amount of $10,000,000. The settlement arose out of claims the receivership had against NewBridge Bank for its continuing to provide banking services to Rex Venture Group after mid-April 2012, by which time the receivership alleged that the bank and its executives knew or should have known that Paul Burks and RVG were using their accounts to conduct an illegal Ponzi and pyramid scheme.

Details of the receivership’s potential claims and the settlement may be accessed and reviewed by clicking on the highlighted links below:

Motion to Approve Settlement and Settlement Agreement
Court’s Order

On behalf of the victims of RVG and Zeek Rewards the receivership team continues to pursue and collect assets that will be paid to those with recognized claims. We hope to bring to a conclusion in 2016 our class action against more than 9,000 net winners, which will be a significant milestone.

I have written many times encouraging tens of thousands of claimants with recognized claims who have not yet received a distribution check to log into the claims portal and electronically sign the Court required Release and OFAC Certification. At some point, I will be required to distribute the funds that have been reserved for these claimants to other Affiliates who have completed the process and, therefore, hold Allowed Claims. I don’t want any claimant with a recognized claim to lose out on receiving a distribution simply because they did not complete all of the steps required by the Court’s Orders.

Thank you for your support as we continue to work on your behalf.

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