ASDUpdates.com

My Journal of Internet Schemes/Scams and things that really annoy me

TELEXFREE – Supplemental Declaration of Scott Stanley, Esq.

Posted by ASDUpdates on April 17th, 2014

Wow, someone tried to sneak out of the office with a ton of money??  Who would suspect that from these guys???

I have uploaded the full statement (Doc 10) onto the Files website.

ScottStanley-TelexFree

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Posted in Pyramid Schemes, Scams, TelexFree | No Comments »

Part of the TelexFree SEC Complaint

Posted by ASDUpdates on April 17th, 2014

Case 1:14-cv-11858-DJC Document 2 Filed 04/15/14 Page 1 of 28

SECURITIES AND EXCHANGE COMMISSION, )
Plaintiff,

v.

TELEXFREE, INC.,
TELEXFREE, LLC,
JAMES M. MERRILL,
CARLOS N. W ANZELER,
STEVEN M. LABRIOLA,
JOSEPH H. CRAFT,
SANDERLEY RODRIGUES DE VASCONCELOS,
SANTIAGO DE LA ROSA,
RANDY N. CROSBY and
FAITH R. SLOAN,
Defendants,
and
TELEXFREE FINANCIAL, INC.,
TELEXELECTRIC, LLLP and
TELEX MOBILE HOLDINGS, INC.,

Relief Defendants.

I will be adding this case to the Files website.

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Posted in Pyramid Schemes, TelexFree | 1 Comment »

SEC Halts TelexFree…….

Posted by ASDUpdates on April 17th, 2014

04/17/2014 01:45 PM EDT

The Securities and Exchange Commission today announced that on Tuesday it filed charges against the Massachusetts-based operators of a large pyramid scheme that mainly targeted Dominican and Brazilian immigrants in the U.S.  The charges were filed under seal, in connection with the Commission’s request for an immediate asset freeze.  That asset freeze, which the U.S. District Court in Boston ordered on Wednesday, secured millions of dollars of funds and prevented the potential dissipation of investor assets.  After the SEC staff implemented the asset freeze, at the SEC’s request the court lifted the seal today, permitting public announcement of the SEC’s charges.

The SEC alleges that TelexFree, Inc. and TelexFree, LLC claim to run a multilevel marketing company that sells telephone service based on “voice over Internet” (VoIP) technology but actually are operating an elaborate pyramid scheme.  In addition to charging the company, the SEC charged several TelexFree officers and promoters, and named several entities related to TelexFree as relief defendants based on their receipt of investor funds.

According to the SEC’s complaint, the defendants sold securities in the form of TelexFree “memberships” that promised annual returns of 200 percent or more for those who promoted TelexFree by recruiting new members and placing TelexFree advertisements on free Internet ad sites.  The SEC complaint alleges that TelexFree’s VoIP sales revenues of approximately $1.3 million from August 2012 through March 2014 are barely one percent of the more than $1.1 billion needed to cover its promised payments to its promoters.  As a result, in classic pyramid scheme fashion, TelexFree is paying earlier investors, not with revenue from selling its VoIP product but with money received from newer investors.

“This is one of several pyramid-scheme cases that the SEC has filed recently where parties claim that investors can earn profits by recruiting other members or investors instead of doing any real work,” said Paul G. Levenson, director of the SEC’s Boston Regional Office.  “Even 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.”

According to the SEC’s complaint, the defendants have continued enrolling new investors but recently changed TelexFree’s method of compensating promoters, requiring them to actually sell the VoIP product to qualify for payments that TelexFree had previously promised to pay them.  The complaint also alleges that since December 2013, TelexFree has transferred $30 million or more of investor funds from TelexFree operating accounts to accounts controlled by TelexFree affiliates or the individual defendants.

In addition to the TelexFree firms, the complaint charges TelexFree co-owner James Merrill, of Ashland, Mass., TelexFree co-owner and treasurer Carlos Wanzeler, of Northborough, Mass., TelexFree CFO Joseph H. Craft, of Boonville, Ind., and TelexFree’s international sales director, Steve Labriola, of Northbridge, Mass.  The SEC also charged four individuals who were promoters of TelexFree’s program:  Sanderley Rodrigues de Vasconcelos, formerly of Revere, Mass., now of Davenport, Fla., Santiago De La Rosa, of Lynn, Mass., Randy N. Crosby, of Alpharetta, Ga., and Faith R. Sloan of Chicago.  The SEC’s complaint alleges that TelexFree, Inc., TelexFree, LLC, Merrill, Wanzeler, Craft, Labriola, Rodrigues de Vasconcelos, De La Rosa, Crosby, and Sloan violated the registration and antifraud provisions of U.S. securities laws and the SEC’s antifraud rule. The SEC also charged three entities related to TelexFree as relief defendants based on their receipt of investor funds.

The SEC’s investigation was conducted by Scott R. Stanley, James M. Fay, Mark Albers, John McCann, Frank Huntington, and Kevin Kelcourse, all of the SEC’s Boston Regional Office.

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Posted in Pyramid Schemes, Scams, TelexFree | No Comments »

BehindMLM: Homeland Security raids TelexFree???

Posted by ASDUpdates on April 16th, 2014

 

Dept of Homeland Security raid TelexFree offices

Apr.17, 2014 in TelexFree 16 Comments
department-of-homeland-security-raid-telexfree-officetelexfree-logoOver the past twenty-four hours I’ve been seeing a lot of genuine concerns raised by TelexFree affiliates being answered with the proclamation that tommorow April the 17th, the company will be given permission to restart business operations.

Mostly pushed by Portuguese speaking TelexFree affiliates, social media related to TelexFree has been flooded with claims like this:

Santiago D Apostle: the motion for Chapter 11 bankruptcy is approved… and the company is given the chance to reorganize and restructure inspite of the SECs complaint filed against TelexFREE.

The root of the blatant misrepresentation of what was actually granted is an order granting TelexFree a “shortened time” to hear their “first day motions and applications” in the case. The hearing has been scheduled for April 17th at 1:30pm, with the order signed off on by Judge August B. Landis.

The problem?

All signs point to the Massachusetts Securities Division stopping the application dead in its tracks.

[Continue reading...]

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Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Pyramid Schemes, Scams, TelexFree | No Comments »

BehindMLM: TelexFree Has More Problems…

Posted by ASDUpdates on April 16th, 2014

Massachusetts charge TelexFree as “billion dollar Ponzi”

Apr.15, 2014 in TelexFree 140 Comments

sec-complaint-header-telexfree

telexfree-logoEver since the SEC investigation into TelexFree was officially confirmed, I’ve found myself repeatedly pointing out to disillusioned TelexFree affiliates that the running of a Ponzi scheme for nearly two years cannot be negated by cosmetic product changes.

Nor can it be erased by a “too little too late” compensation plan change.

Hell, not even a shutdown and filing for Chapter 11 bankruptcy can wash the stink of what Carlos Wanzeler, Carlos Costa and Jim Merril have spread over the MLM industry.

And now, having concluded their investigation into TelexFree – the Massachusetts Securities Division has finally played their hand and agreed. TelexFree is a “billion dollar Ponzi scheme”. [Continue reading...]

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Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Scams, TelexFree | 1 Comment »

BehindMLM: TelexFree and Labriola’s latest comments

Posted by ASDUpdates on April 15th, 2014

Labriola: TelexFree bankruptcy “the most awesome thing”

Apr.15, 2014 in TelexFree 29 Comments

telexfree-logoIn the wake of TelexFree’s emergency filing for Chapter 11 bankruptcy over the weekend, Steve Labriola was once again abandoned by TelexFree’s owners and left to face the company’s affiliates alone.

Appearing telephonically on a hastily announced call and sounding more spectator than corporate management, Labriola tried to appease TelexFree affiliates with what little information he had.

There are tons of questions out there I know, and I don’t have all of the documentation back from our lawyers on the things that I can and can’t say.

All I can tell you is that the Chapter 11 we filed was to help us reboot, rebuild and reformat our company, so we can move forward and build.

This is what we want as a team. This is what we want as a corporation and this is what all of you will see will be the best thing going forward.

TelexFree’s CEO in hiding Stuart Macmillan was absent from the call, with Labriola stating this was conveniently due to his being “on a plane, heading down to meet with the new platform company”.

Right.

[Continue reading...]

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Posted in HYIP, MLM, Online Marketing, Other Ponzi Scams, Pyramid Schemes, Scams, TelexFree | No Comments »

BehindMLM: Ming Xu repentant about WCM777??

Posted by ASDUpdates on April 14th, 2014


Ming Xu repentant about WCM777?

Apr.13, 2014 in WCM777 11 Comments

wcm777-logoRoughly two weeks ago we saw the SEC finally move in and shut down Ming Xu’s WCM777 Ponzi scheme. As I understand it, these last few weeks Xu has made himself available to the SEC as they continue to tie up any loose ends pertaining to the case.

In a series of tweets that hint at a finality to Xu’s personal input into the SEC case, a much more sombre sounding Xu shed the briefest of light on his side of the story.

[Continue reading...]

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Posted in HYIP, MLM, Online Marketing, Pyramid Schemes, Scams, WCM777, WCM777-Kingdom777-Global Unity | No Comments »

TelexFree Files Voluntary Chapter 11 Petition

Posted by ASDUpdates on April 14th, 2014

 

TelexFREE™ Files Voluntary Chapter 11 Petitions To Facilitate Financial And Operational Restructuring

Worldwide Operations and Telecommunications Services Continue Through Restructuring Process

MARLBOROUGH, Mass., April 14, 2014 /PRNewswire/ – TelexFREE LLC today announced that it and certain of its subsidiaries and affiliates filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code, in an effort to address certain operational challenges. The petitions were filed in the U.S. Bankruptcy Court for the District of Nevada.  TelexFREE intends to use the Chapter 11 process to optimize its selling platform, address its liabilities and position itself to emerge as a stronger and more competitive company.

TelexFREE expects that it has cash on hand to support the business throughout its reorganization and to maintain services to its customers.  In connection with the Chapter 11 filing, the Company announced that it has conducted a thorough review of its operations, including its multi-level marketing and pricing structure, and has determined that adjustments will be necessary to more effectively capitalize on the strong demand for its voice over internet calling product, rationalize its promotional expenses and ensure that its sales programs are compliant with applicable legal requirements.

The Company announced its intention to restructure its debt obligations, unveil and promote new products (including its TelexFREE app and TelexMobile), and return to growing its customer base in an effort to realize the Company’s full potential to generate significant value for its constituents.

Stuart MacMillan, interim Chief Executive Officer of TelexFREE, said, “We anticipate that our global operations will continue to provide our customers with the high-quality products and services they have come to expect.  We are taking this major step because we continue to believe in our business, our products and the enthusiasm of our world-class team.  We believe that this restructuring plan, which will include significant enhancements to our governance practices and internal controls, will help us to build a stronger and more sustainable financial and operational foundation for the future.”

The Company has filed customary “First Day Motions” with the Bankruptcy Court which, if granted, together with the plan, will help ensure that the restructuring process proceeds in an orderly manner.

MacMillan continued, “As a result of the filing of the chapter 11 cases, TelexFREE anticipates that it will have the time to build a solid foundation based on a compensation plan that rewards sales associates and promoters for customer acquisition and the promotion of well-established and new products. Our collective success depends on our united commitment to offer our customers the finest communications products and services available anywhere in the world. I look forward to moving through the process quickly with the support of our independent sales associates during this transition and the ongoing dedication of our customers.”

Additional information is available on the TelexFREE website at www.TelexFREE.com.  Court filings and other documents related to the reorganization proceedings are available on http://www.kccllc.net/TelexFree.

Alvarez & Marsal North America, LLC is serving as restructuring advisor to the Company and Greenberg Traurig, LLP and Gordon Silver are serving as legal advisors to TelexFREE.

About TelexFREE

TelexFREE is a private company headquartered in Marlborough, Mass., with offices in a number of regions around the world. For more information, please visit www.TelexFREE.com.

SOURCE TelexFREE LLC

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Posted in TelexFree | 2 Comments »

BehindMLM: TelexFree’s 2013 P&L doesn’t add up?

Posted by ASDUpdates on April 9th, 2014

 

TelexFree’s 2013 profit-loss doesn’t add up

Apr.10, 2014 in TelexFree Leave a Comment

telexfree-logoA profit & loss statement recently filed in the US state of Alabama provides some insight into the financials of TelexFree.

Marked as an exhibit of an “application for interexchange authority”, the statement reveals that for the year 2013, TelexFree took in $689 million USD from their affiliates.

Affiliate commissions and other expenses ran up a liability of $652 million, leaving TelexFree with a “net income” of $36 million.

On paper that sounds great… until you consider TelexFree’s business model.

[Continue reading...]

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TelexFree Applies for Alabama Licensing?

Posted by ASDUpdates on April 8th, 2014

A “consultant” for TelexFree has filed an “Application for Resale Interexchange Authority” in Alabama. The cover letter is as fi=ollows:

Dear Sir:

Enclosed please find an original and one (1) copy of the TelexFREE’s Application for a Certificate of Public Convenience and Necessity to provide interexchange telecommunications services in Alabama. The entire packet was also filed electronically today. Enclosed also find the filing fee in the amount of $100.
Please acknowledge receipt of this filing by file stamping and returning a copy of this letter to the address below.

Questions concerning this Application may be addressed directly to me.

Sincerely,
/s/ Joseph Isaacs
Joseph Isaacs
Consultant to TelexFREE

I have uploaded the full document for your perusal.   TelexFreeAlabamaApplication

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Posted in HYIP, MLM, Online Marketing, Pyramid Schemes, TelexFree | 3 Comments »