BREAKING NEWS -TelexFree: Merrill to Plead GUILTY on Monday….

from the Boston Globe 2 hours ago:

Former TelexFree CEO to plead guilty in $3b pyramid scheme


17fraud - ***warning: image lo res, do not use for more than 1.25 columns *** James Merrill (telex media)
James Merrill.

James Merrill, the former chief executive of TelexFree Inc., an alleged $3 billion global pyramid scheme, is pleading guilty to fraud and other charges in a case that has ensnared more victims than any other in history, the US Attorney in Boston said Friday.

TelexFree started in Brazil and was run from Marlborough from 2013 until April 2014, when federal agents raided the offices and the company filed for federal bankrutpcy protection.

Beth Healy can be reached at Follow her on Twitter @HealyBeth.

There is no word yet on which or how many of the 17 counts he will plead to; this comes from the Docket itself:
10/21/2016 313 ELECTRONIC NOTICE OF HEARING as to James Matthew Merrill. Rule 11 Hearing set for 10/24/2016 at 2:30PM in Courtroom 2 – Worcester before District Judge Timothy S Hillman.Counsel is to contact U.S. Probation and Pretrial Services as soon as possible to determine scheduling of the presentence interview. (Castles, Martin) (Entered: 10/21/2016)
 For more info on what a Rule 11 Hearing is, follow this link:
 Our thanks to for the information!

TelexFree: USA Motion to Exclude Civil Settlement with Gerald Nehra

carlos-wanzeler-and-james-merrill-telexfree-management-criminalsIn the federal criminal case against Merrill and Wanzeler, the government has filed a Motion in Limine (a motion filed by a party to a lawsuit which asks the court for an order or ruling limiting or preventing certain evidence from being presented by the other side at the trial of the case).

As most of you may recall, Nehra and Waak entered into a civil settlement agreement with the Zeek Rewards receiver in case 14-cv-351 in the Western District of North Carolina:

On September 21, 2015, the court appointed receiver filed a complaint against Nehra and Waak (both individually and against the firm Nehra & Waak) to recover damages from the harm that Zeek caused. Among other things, the complaint alleged that Nehra and Waak knew or should have known that Zeek was perpetrating an unlawful pyramid scheme.
In December 2016, Nehra, Waak, and their firm Nehra & Waak entered into a settlement agreement with the receiver. As part of the settlement agreement, Nehra and Waak agreed that “[w]hile they contend they acted in good faith as legal counsel, . . . acknowledge and agree that, based on their current knowledge, during the period of time they served as counsel for [Zeek, it ] in fact operated as an unlawful Ponzi and pyramid
scheme involving an unregistered investment contract that caused hundreds of millions of dollars in losses to innocent victims in the scheme.” As part of the agreement, Nehra and Waak agreed to a confession of judgement and paid $100,000 to the receiver. The district court accepted the settlement agreement and it was publicly filed on December 11, 2015.

I guess the public admission that Nehra and Waak knew they participated in one Ponzi scheme and then went on to participate in another might not look good for their veracity in the TelexFree criminal trial.


The United States respectfully moves this Court to exclude any evidence and/or
cross examination of government witness Gerald P. Nehra, a prior attorney for TelexFree,
regarding a December 2015 civil settlement agreement that Nehra and his firm entered
into with a court appointed asset receiver in the Western District of North Carolina. The
settlement agreement is not relevant to Nehra’s credibility and is entirely collateral to the
subject matter and issues of this case.

Almost seeking to minimize Nehra’s involvement, the motion states:

While Nehra had some interactions with Burks, it was Nehra’s partner Waak who
was the primary attorney on the case. Waak was named as possible witness at trial, but did not testify. Nehra was not named or called as a witness.

As if this was not already a “side-show” the USA states:

The defendant should be precluded from questioning Nehra, or introducing any
evidence, about a civil settlement agreement in a case entirely unrelated to TelexFree and the charged defendants in this case. The settlement does not constitute proper
impeachment, and if admitted, would amount to confusing and timely side-show.

Their reasoning is this:

  1. unless shown otherwise, the agreement is not relevant to the typical proper avenues of impeachment; bias, perception, or recollection of events.
  2. specific rules of evidence prohibit its’ admissibility.
  3. while Nehra’s firm represented Zeek, it was Nerha’s partner Waak who primarily represented Zeek, not Nehra. Waak was called as witness, not Nehra. For this reason, Nehra’s connection to Zeek was more tangential and, for that reason, is less relevant.
  4. it should be noted that the government is not moving to prohibit any reference, Nehra & Waak’s representation of to Zeek or the fact that Zeek and its principal ultimately faced SEC enforcement action and criminal prosecution.

During the charged conspiracy, Nehra received several emails from various TelexFree promoters who raised concerns about possible enforcement action against TelexFree, citing Zeek. Nehra forwarded each of these emails to the defendant.
Instead, the government is seeking a pre-trial ruling to preclude the introduction of
any evidence or any reference to the settlement agreement.

Zeek Rewards: Announcement from Receiver



More than 41,000 claimants have a claim recognized by the ZeekRewards Receivership, but have failed to electronically submit an OFAC certification and release. The ZeekRewards Receivership cannot pay a claimant with a recognized claim unless the claimant submits an OFAC certification and release. Failure to submit an OFAC certification and release may result in these claims being forfeited.

The Receiver anticipates filing a motion to obtain confirmation from the Court that, subject to certain limited exceptions, any claimant that has not electronically submitted its OFAC certification and release by December 31, 2016 will be deemed to forfeit his/her claim in the ZeekRewards Receivership. Once approved by the Court, the funds held in reserve for the forfeited claims will be released from the reserve for payments to claimants with allowed claims in this case.

The Receiver has and will continue to contact all claimants that hold one of these more than 41,000 claims regarding the forfeiture of their claim.

Here’s what Ponzi scams get you, in reality

BowdoinBookingPhotoHere we have the booking photo of Thomas Anderson Bowdoin (right), the founder and convicted felon that operated ASD/Ad Cash Generator. He had several previous stabs at securities scams that garnered him convictions, and the last one landed him in federal prison, albeit a medium security facility with health care available. Bowdoin suffers from ailments that many have when they are 81.

What is mind numbing is that several scams have been patterned virtually identical to the ASD Ponzi model, with hopes the maybe no one would notice. Good luck with that, nimrods.

Bowdoin is scheduled to be released February 7, 2018. Hope it was worth it, Andy.

BREAKING: Sann Rodrigues Makes Plea Deal in Visa Fraud Case

sann-rodrigues-top-telexfree-investorJust posted to the Docket files today in 15-cr-10227, USA v Rodrigues de Vasconcelos, the Defendant has agreed to plead Guilty to Count 1 (Visa Fraud).

Defendant expressly and unequivocally admits that he committed the crime charged in Count One of the Indictment, did so knowingly, and is in fact guilty of that offense.

Count One has a maximum penalty of 10 years incarceration; supervised release for 3 years; a fine of $250,000; and a mandatory special assessment of $100.

Pleading guilty may have consequences with respect to Rodrigues’ immigration status. Under federal law, there’s a wide range of crimes that are removable offenses, including the offense to which the defendant is pleading guilty.

I have posted the Agreement onto the Files website.


Zeek Rewards: Dawn and Daniel Olivares Sentenced

Department of Justice
U.S. Attorney’s Office
Western District of North Carolina

Tuesday, September 13, 2016

ZeekRewards’ Former Chief Operating Officer And Former Senior Technology Officer Sentenced In Federal Court

CHARLOTTE, N.C. – U.S. District Judge Max Cogburn, Jr., sentenced Dawn Wright Olivares, 48, and Daniel C. Olivares, 34, both of Clarksville, Ark., to 90 and 24 months in prison, respectively, for their involvement in an $850 million Internet Ponzi scheme that promised victims a bogus return on investments, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina.

The two Arkansas residents were associated with the Lexington, N.C. based Rex Venture Group, LLC (RVG), which owned and operated Zeekler and ZeekRewards.  In addition to the prison term imposed, Judge Cogburn also ordered each defendant to serve three years under court supervision.  The restitution amount will be set at a later date.

Michael Rolin, Special Agent in Charge of the United States Secret Service, Charlotte Field Division and Thomas J. Holloman III, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) join U.S. Attorney Rose in making today’s announcement.

According to filed court documents and today’s sentencing hearings, from January 2010 through August 2012, Dawn Wright Olivares, her step-son, Daniel Olivares, and Paul Burks, the owner of RVG, conspired with each other and engaged in Ponzi scheme that raised more than $850 million through a sham internet-based penny auction company named “Zeekler” and its purported advertising division “ZeekRewards” (collectively “Zeek”).  According to court records, the conspirators induced more than 900,000 victims – including over 1,500 victims in the Charlotte area – to invest in their fraudulent scheme, by falsely representing that Zeekler was generating massive retail profits from its penny auctions, and that the public could share in such profits through investment in ZeekRewards.  Court documents indicate that, at one point, the conspirators claimed that investors would be guaranteed a 125% return on their investment.

Court records show that the co-conspirators represented that victim-investors in ZeekRewards could participate in the Retail Profit Pool (RPP), which supposedly allowed victims collectively to share 50% of Zeek’s daily net profits.  The co-conspirators did not keep books and records needed to calculate such daily figures.  Instead, Burks simply made up the daily “profit” numbers.  Contrary to the conspirators’ claims, the true revenue from the scheme did not come from the penny auction’s “massive profits.”  Instead, approximately 98% of all incoming funds came from victim-investors, which were then used to make Ponzi-style payments to earlier victim investors.

In addition to promising massive returns on investments, the conspirators used a number of ways to promote Zeek to current and potential investors.  For example, the conspirators hosted weekly conference calls and leadership calls, where participants could call in and listen to Burks, Dawn Wright Olivares and others make false representations intended to encourage victim-investors to continue to invest money and to recruit others to invest in Zeek.  Burks and Dawn Wright Olivares also organized and attended “Red Carpet Events,” where victim investors came to hear details of the scheme in person.  During these events, Burks and his conspirators made false representations about the massive retail profits generated by Zeek.  They also used electronic and print media, including websites, emails and journals, to make false and misleading statements about the success of Zeekler to recruit victim investors.

As the Ponzi scheme grew in size and scope it became unsustainable and it eventually began to unravel as the outstanding liability resulting from the bogus 125% return on investment continued to rise beyond control.  By August 2012, the conspirators fraudulently represented to the collective victims that their investments were worth nearly $3 billion, but had no accurate books and records to even determine how much cash on hand was available to pay such liability.  Contrary to representations made to victim investors, at that time, the conspirators had only $340 million available to pay out investors.

According to court records, Dawn Wright Olivares was closely involved in the strategic operations and ultimately served as the Chief Operations Officer of Zeek.  Dawn Wright Olivares also owned 95% of Wandering Phoenix, LLC, a company that she used, among other things, to receive payments from Zeek and RVG.  During the course of the conspiracy, Dawn Wright Olivares and Wandering Phoenix received approximately $7.2 million in victim funds.

Daniel Olivares was RVG’s senior technology officer and was responsible for, among other things, database design, management and operations for Zeek.  During the course of the conspiracy, Daniel Olivares personally enriched himself with victim funds totaling approximately $3.1 million.  Other unnamed co-conspirators also personally enriched themselves with millions of dollars of victim funds.

Dawn Wright Olivares and Dan Olivares previously pleaded guilty to one count of investment fraud conspiracy.  Dawn Wright Olivares also pleaded guilty to one count of tax fraud conspiracy.

In July 2016, a federal jury convicted Paul Burks of wire and mail fraud conspiracy, wire and mail fraud, and tax fraud conspiracy, following a three-week trial.  Burks is currently awaiting sentencing.

In making today’s announcement, U.S. Attorney Rose thanked the U.S. Secret Service and IRS-CI for investigating the case, and the U.S. Securities & Exchange Commission, Division of Enforcement for its assistance with the investigation.

The prosecution is handled by Assistant United States Attorneys Jenny Grus Sugar and Corey Ellis of the U.S. Attorney’s Office in Charlotte.

Additional information and updated court filings about this and related cases filings can be accessed at the district’s website:

Updated September 13, 2016

TelexFree: Merrill and Wanzeler Charged in Superseding Indictment

newtelexfreelogoIn a 27 page document filed yesterday, the Grand Jury has added a few charges to the 2 individuals running TelexFree in the USA.  The co-defendants are now charged with 17 counts each, as indicated below:



The superseding indictment also lists all items up for possible forfeiture and the list is huge. I have added this new Indictment and attachments onto the Files Website.

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