Category Archives: ASD Updates

TelexFree: SEC Gets Final Judgment Against Sanderley Rodrigues

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23846 / May 25, 2017

Securities and Exchange Commission v. TelexFree, Inc. et al., Civil Action No. 1:14-cv-11858-NMG (United States District Court for the District of Massachusetts)

SEC Obtains Final Judgment Ordering Promoter of Pyramid Scheme to Pay Over $1.8 Million

The Securities and Exchange Commission announced today that on May 25, 2017, the federal court in Boston, Massachusetts entered a final judgment by consent against defendant Sanderley Rodrigues de Vasconcelos (“Rodrigues”) of Davenport, Florida, a defendant in SEC v. TelexFree, Inc., et al. Among other things, the Court’s order holds Rodrigues liable for over $1.83 million, including approximately $1.7 million in disgorgement and prejudgment interest and a $150,000 civil penalty. In April 2014, the Commission charged Massachusetts-based TelexFree, Inc. and TelexFree, LLC (collectively, “TelexFree”), plus four company officers and four promoters of TelexFree, including Rodrigues, with perpetrating an international pyramid scheme targeting Latino communities in the U.S.

In settling the SEC’s charges, Rodrigues admitted that he was a promoter of TelexFree, appearing at TelexFree-sponsored public events and other gatherings at hotels and resorts. He further admitted that he appeared in promotional videos that were posted on YouTube and posted at least one video himself.

Rodrigues consented to the entry of the judgment which permanently restrains and enjoins him from violating the securities offering provisions of Section 5 of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The judgment also permanently restrains and enjoins him 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.

To satisfy his financial obligation, the judgment orders Rodrigues to transfer certain assets to settle an adversary action against Rodrigues (among others) filed by Stephen Darr, the Chapter 11 Trustee of TelexFree LLC, TelexFree, Inc., and TelexFree Financial, Inc., entitled Darr v. Carlos Wanzeler et al., Adv. Proc. 16-04032, presently pending in the United States Bankruptcy Court for the District of Massachusetts as part of In re TelexFree, Inc., Case 14-40987 (Bankr. D.Mass.).

The Commission’s litigation in this matter continues against the TelexFree companies, their officers, and the remaining promoters of the alleged TelexFree pyramid scheme.

For further information, see Litigation Release Nos. 22974 (April 17, 2014)(SEC Halts Pyramid Scheme Targeting Dominican and Brazilian Immigrants); 22992 (May 13, 2014) (Criminal Charges Filed Against Two Principals of Massachusetts-Based Telexfree); 23450 (Jan. 20, 2016) (Florida Resident Ordered to Jail Based On Violating Court Orders Obtained by the SEC); 23678 (Oct. 25, 2016) (TelexFree President Pleads Guilty to Operating Pyramid Scheme in Related Criminal Action); 23788 (March 24, 2017) (Massachusetts-Based TelexFree President Sentenced to 6 Years Imprisonment for Operating Pyramid Scheme).

 

https://www.sec.gov/litigation/litreleases/2017/lr23846.htm


Modified: 05/26/2017

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.

Zeek Rewards: “Net Winner Class” Defendants File Reply to Complaint

zeekrewardsIn case 14-cv-91, Bell v Disner ,et al, the “Defendant Class of Net Winners” by and through their Texas attorney, James Kevin Edmundson, have filed a “Defendants’ Answer to Complaint and Affirmative Defenses” in reply to the original complaint filed back on February 28, 2014.

The very first 2 sentences are this:

1. The statement that RVG operated as a Ponzi scheme is a legal conclusion to which no response is required. Defendants lack knowledge or information sufficient to form a belief as to the truth of the remaining allegations of paragraph 1.

2. Defendants deny the allegations of paragraph 2 because, among other reasons, they have no information leading them to believe that RVG was a “scheme” or that they or others were somehow “net winners” as opposed to individuals who worked diligently for the income they earned in connection with Zeek.

I suppose even though a legal decision has been made as to whether Zeek was a Ponzi or a “scheme”, following the conviction on all counts of Paul Burks in the criminal trial, one would surmise that these positions by the Net Winners would be somewhat untenable. But, it gets even better with their Affirmative Defenses: (Pay particular attention to “C”, emphasis added)

AFFIRMATIVE DEFENSES
A. Defendants devoted significant time and money working on behalf of RVG, which was performed pursuant to a contract between Defendants and RVG by which RVG agreed to pay Defendants for the work that they performed. Defendants performed as agreed and were owed the compensation that RVG promised to pay.
B. If RVG was a Ponzi scheme, Defendants had no knowledge of that fact. If RVG was a Ponzi scheme, then all of the other affiliates who participated in RVG have unclean hands as a result of their participation in a fraudulent scheme.
C. On information and belief, the SEC knew or should have known of the RVG Ponzi scheme, but delayed unreasonably in its prosecution of claims against RVG. Alternatively, the SEC knew for some time that RVG was operating as a Ponzi scheme but intentionally delayed disclosing that information to Affiliates and to the public. That unreasonable delay has prejudiced Defendants because t h e y h a v e paid taxes on the money they earned working on behalf of RVG and have incurred business expenses as a part of their work on behalf of RVG. The Receiver in this action stands in the SEC’s shoes and also delayed to Defendants’ detriment and now seeks return of all monies Defendants earned in connection with RVG, with no credit for the taxes or business expenses that Defendants legitimately paid, but that could have been avoided had the SEC or the Receiver timely advised Defendants of RVG’s true nature or acted in a more expeditious manner.
D. The Receiver’s claims in this case against Defendants are barred by the equitable doctrine of laches.
E. Defendants accepted compensation in connection with RVG in good faith, in exchange for reasonably equivalent value and in accordance with the terms of the contract between Defendants and RVG.
F. Defendants are entitled to a setoff for the amounts they paid to RVG for the purchase of bids and to otherwise participate in the Affiliate program, the amount of any and all expenses they incurred in operating their business for the benefit of RVG, for the amount of all taxes they paid and for the value of the funds the Receiver wrongfully misappropriated from Defendants’ e-wallet accounts. Defendants are also entitled to a setoff to the extent of any judgment on their counterclaims.
G. The Receiver has filed suit against two attorneys who provided legal advice to RVG and Affiliates, including Defendants. Defendants relied on that advice in concluding that RVG was a legitimate business and in committing significant personal resources to grow their now defunct business. Because Defendants’ damages were caused in part by the conduct of the two lawyers, Defendants are entitled in equity and at law to a credit for all money the Receiver recovers from the two attorneys as a result of their claims against them.
H. Plaintiff’s claims are time-barred pursuant to the express terms of the agreement between RVG/ZeekRewards and Defendants.

Zeek Rewards: Latest Docket Entries in Burks’ Trial

This is all that was on the docket today:  zeekrewards

Full docket text:  (July 15)
Minute Entry: JURY TRIAL as to Paul Burks held before District Judge Max O. Cogburn, Jr.. Evidence continued. Jury Trial set for 7/18/2016 09:30 AM in Courtroom 2-1, 401 W Trade St, Charlotte, NC 28202 before District Judge Max O. Cogburn Jr.Government attorney: Jenny Sugar, Corey Ellis. Defendant attorney: Noell Tin, Jacob Sussman, Melissa Owen. Court Reporter: Cheryl Nuccio. (chh)

Full docket text: (July 14)
Minute Entry: JURY TRIAL as to Paul Burks held before District Judge Max O. Cogburn, Jr.. Evidence continued. Jury Trial set for 7/15/2016 09:00 AM in Courtroom 2-1, 401 W Trade St, Charlotte, NC 28202 before District Judge Max O. Cogburn Jr.Government attorney: Jenny Sugar, Corey Ellis. Defendant attorney: Noell Tin, Jacob Sussman, Melissa Owen, Isham Reavis. Court Reporter: Cheryl Nuccio/Laura Andersen. (chh)

No new motions have been added to the docket file in the past few days, and Judge Cogburn has not made a ruling on the prosecution’s motion to preclude the testimony of the defendants “expert witnesses”.

Zeek Rewards: USA Files Motion Regarding Defense Experts

The US Attorney has filed a motion to limit the Defendant (Paul Burks) use of the recently produced “Handwritten Notebooks” marked as Defendant’s Exhibit 700.

The Government requests that Exhibit 700 only be admitted through the Defendant.

 

The Procedural History listed in the motion details begins with the August 2012 Grand Jury issued subpoena to Burks as custodian of records calling for the production of documents and testimony related to the production of those documents.

The subpoena called for:

  • all documents related to daily profit
  • all documents related to the calculation of daily profit share wards
  • all documents related to policies/procedures applicable of Daily Profit Pool

The motions also notes that exhibit 700 was never produced in response to the Subpoena. They list a Q and A portion of Burks testimony before the Grand Jury:

During his testimony, Defendant was asked, and testified in response that:
Q. I’m just going to go through these and forgive me if I end up asking the same question but it’s important. I want to get it on the record here. All documents related to the calculation of the daily profit share awards and profit point redemption for the retail profit pool. Do you see that, sir?
A. I see that.
Q. And same question. The production that you’ve talked about here today, is that responsive in terms of everything you’ve got in your possession to that specification?
A. To the best of my knowledge. There –
Q. Again with the caveat that the receiver has a lot of this material?
A. Yes

During his Grand Jury testimony, the Defendant never mentioned the Handwritten Notebooks, Defendant’s Exhibit 700. They go on to say, “There can be no legitimate dispute that the Handwritten Notebooks – if they actually existed on the dates they purport to have been created – were responsive to the Grand Jury Subpoena, and, thus, Defendant’s failure to produce them was in violation of that Subpoena and his testimony that he had produced all documentation responsive to the subpoena was untrue.”

Defendant’s failure to produce these documents in response to the Grand Jury testimony, his testimony that he had produced all responsive documents, and the production of these Handwritten Notebooks on the eve of trial, without explanation, all raise serious concerns about the legitimacy of the Handwritten Notebooks.

Let’s see how Burks tries to explain this “oversight”….. You can find these documents here.

Zeek Rewards: USA Gets Ready for Criminal Trial

ZeekYesterday, United States Attorney Jill Westmoreland Rose filed a Motion in Limine regarding the authenticity of certain records.

The parties executed an exhibit exchange agreement, subject to which the Government provided the defense with their draft exhibit list and exhibits four weeks before trial on June 6, 2016; in exchange, the defense agreed to provide “written notice of any objection to the admission of any exhibit, and a detailed statement of any and all bases for any such objection” by June 17, 2016. Further, per the agreement, “Absent such specific written notice by Defendant, the exhibits may be admitted, without objection, at the start of trial.” Defendant subsequently notified the Government of its specific objections to the exhibits on the draft exhibit list.

A large volume of emails were obtained by subpoena issued to Rex Venture Group with Burks as the custodian of records and was prepared with Burks’ current counsel and Burks appeared before the Grand Jury as custodian of records and authenticated the documents.

However, the Defendant strangely makes a Rule 901 objection to numerous other exhibits that were obtained from the exact same source: the Defendant, as custodian of records for Rex Venture Group. Defendant makes this objection despite the fact that all of these exhibits – just like those to which he interposes no authenticity objection – were authenticated by the Defendant and his current counsel who assisted with the subpoena production.

 

 

“In the interest of judicial economy and to save time for all the parties involved, the government will move to admit all of these exhibits at the beginning of the trial”

Sounds like Burks has sour grapes and some of this stuff will come back to bite him.


And filed today, we have a 49 page document entitled Government’s Trail Brief, “to aid the Court in presiding over the upcoming trial of United States v. Paul Burks.”  The first 3 pages contain the Table of Contents, wherein they lay out most of their case against Burks.

The foregoing is a summary of some of the points that the Government anticipates are likely to arise at trial. Should any legal issues arise that are not covered in this trial brief, the Government respectfully requests leave to submit further memoranda as necessary to assist the Court.

You can find all filings in the USA v Burks criminal case on the Files Website, click here.

Andy Bowdoin Now in North Carolina FCI

It seems Andy Bowdoin is now located at the Butner Medium I FCI, with an even more infamous Ponzi scam artist, one Bernard Madoff.

Andy will be out in a little over 2 years, the Feds make you serve the full sentence.  I wonder if his loyal fans still send him brownies?

BowdoinBookingPhoto

Andy’s booking mugshot

 

THOMAS ANDERSON BOWDOIN
Register Number: 31387-016
Age: 81
Race: White
Sex: Male
Located at: Butner Medium I FCI
Release Date: 02/07/2018

Zeek Rewards: Show Cause Hearing Today

ZeekThe newest entry on the over 4 year old Civil Case was this:

Minute Entry: SHOW CAUSE HEARING held before Senior Judge Graham Mullen. Receivers attorneys: Matthew Orso, Irving Brenner, Ken Bell. Court reporter: Laura Andersen. (jde)

That’s all that was mentioned about this Hearing, which was a result of this Order from Judge Mullen:

For good cause shown, it is ORDERED that the Receiver’s Motion is GRANTED and Darryle Douglas is hereby ORDERED to personally appear in court in the Western District of North Carolina on December 3, 2015, at 3:30 PM and show cause as to why Mr. Douglas should not be held in contempt for failure to comply with the Court’s Order of September 14, 2015.

Perhaps there will be a more detailed entry early next week.

No Wonder Things Are So Messed Up……

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Tuesday, September 22, 2015

Owner of Polygraph.com Sentenced to Two Years in Prison for Training Customers to Lie

A former Oklahoma City law enforcement officer and the owner of Polygraph.com has been sentenced to two years in prison for training customers to lie and conceal crimes and other misconduct during polygraph examinations.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Assistant Commissioner Matthew Klein of U.S. Customs and Border Protection’s Office of Internal Affairs and Special Agent in Charge Scott L. Cruse of the FBI’s Oklahoma City Division made the announcement.

Douglas G. Williams, 69, of Norman, Oklahoma, pleaded guilty on May 13, 2015, to two counts of mail fraud and three counts of witness tampering.  Chief U.S. District Judge Vicki Miles-LaGrange of the Western District of Oklahoma imposed the sentence.

According to admissions made in connection with his plea, Williams owned and operated Polygraph.com, an Internet-based business through which he trained people how to conceal misconduct and other disqualifying information when submitting to polygraph examinations in connection with federal employment suitability assessments, background investigations, internal agency investigations and other proceedings.  In particular, Williams admitted that he trained an individual posing as a federal law enforcement officer to lie and conceal involvement in criminal activity from an internal agency investigation.  Williams also admitted to training a second individual, posing as an applicant seeking federal employment, to lie and conceal crimes in a pre-employment polygraph examination.  Williams also admitted to instructing the individuals to deny receiving his polygraph training.

The investigation was conducted by U.S. Customs and Border Protection’s Office of Internal Affairs and the FBI’s Oklahoma City Division.  The case was prosecuted by Trial Attorneys Heidi Boutros Gesch and Brian K. Kidd of the Criminal Division’s Public Integrity Section.

15-1156
Updated September 22, 2015
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