DFRF: Fourth Bill of Particulars Filed Against Daniel Filho
Today, the US filed a Fourth Bill of Particulars in the Criminal case against Daniel Fernandez Rojo Filho. The full document is on the Files website; it is way to lengthy to post here.
A Third Bill of Particulars was filed on November 17, 2105 and added a huge amount of cash and property, including a 2014 Rolls Royce, a smattering of Cadillacs, and an Aston Martin v12.
Zeek Rewards: Receiver Files Motion to Freeze $13 Million
RECEIVER FILES MOTION TO RECOVER AND SECURES INTERIM FREEZE OF $13 MILLION IN OUTSTANDING RECEIVERSHIP ASSETS
On February 11, the Receiver filed a Motion seeking to recover $13,174,015.48 in outstanding Receivership Assets from Payza, Payment World, VictoriaBank (a Moldovan financial institution), and their affiliates or, alternatively, to hold these entities in contempt for violating the Court’s August 17, 2012 Agreed Order Appointing Temporary Receiver and Freezing Assets of Defendant Rex Venture Group, LLC, as amended on August 30, 2012 (“Freeze Order”). On February 12, the Court ordered an immediate interim freeze of $13,174,015.48 at a United States correspondent bank account for VictoriaBank pending resolution of the Receiver’s Motion on the merits.
These funds are outstanding Receivership Assets from the payment processing relationship between Rex Ventures Group LLC, Payza, and PaymentWorld, for which a percentage of the processed funds were held on reserve at VictoriaBank in Moldova. For the past 3.5 years, the Receiver Team has worked diligently and devoted significant time and resources in its investigation, analysis, and various other efforts to reconcile and recover these outstanding funds, including negotiations with Payza, PaymentWorld, and VictoriaBank (collectively, “Respondents”) and coordination with United States and Moldovan government authorities. In direct violation of the Court’s Freeze Order, and despite the Receiver’s repeated requests, the Respondents refused to pay the Receivership Estate the outstanding assets. Each of the Respondents has had some role in failing to freeze and or return the outstanding Receivership Assets from this payment processing relationship.
With the Respondents’ failure to comply with the Court’s Freeze Order and increased risk of dissipation of funds, the Receiver, after exhausting a myriad of other options, filed the above-referenced Motion. Pending resolution of the Motion on the merits, the Court issued an immediate interim freeze of the full $13,174,015.48 at VictoriaBank’s correspondent bank account at a United States bank. The Receiver anticipates the Court will set a briefing schedule and hearing date to facilitate the resolution of this Motion on the merits. The Receiver will work diligently in pursuing a successful resolution of the Motion in hopes of securing the recovery of these funds for the benefit of ZeekRewards’ victims.
The Receiver’s legal filings and the Court’s order freezing the funds pending resolution of the Receiver’s motion are available at the links below:
The Receiver’s Motion for an Order Directing Payza, Payment World, and VictoriaBank to Turn Over Receivership Assets and/or Find Them in Contempt of the Court’s Order Freezing and Preserving Receivership Assets
Memorandum in Support of the Receiver’s Motion for an Order Directing Payza, Payment World, and VictoriaBank to Turn Over Receivership Assets and/or Find Them in Contempt of the Court’s Order Freezing and Preserving Receivership Assets
Order Freezing Funds Pending Resolution of Receiver’s Motion
TelexFree: Judge Gorton Orders Hearing for Rodrigues
I am not sure if this is along the lines of what Rodrigues was planning bu asking for a hearing, the Judge’s Order requires a “sworn financial statement”. Be careful of what you ask, Sann…..
The Court will convene a hearing on the motion of defendant Sanderley Rodrigues de Vasconcelos for release from custody and for approval of a payment plan (Docket No. 376) on Thursday, March 17, 2016 at 11:15 am. At that hearing defendant will be afforded the opportunity to prove that he is unable to purge his civil contempt by the submission of a sworn financial statement providing a complete accounting of defendant’s assets, an affidavit and/or sworn testimony. Regardless of the means chosen by defendant, his presentation of evidence will be subject to the Court’s holding in its Memorandum and Order dated December 18, 2015 (Docket No. 359) with respect to defendant’s waiver of the Fifth Amendment privilege against self-incrimination.
Defendant shall appear at the hearing via video conference and his counsel may also do likewise.
TelexFree: SEC Files Opposition to Rodrigues’ Motion for Release from Custody and Payment Plan
The SEC has filed its Opposition to a February 15th Motion from Sanderley Rodrigues de Vascolcelos for “Release from Custody and to Approve a Payment Plan” or to schedule an Evidentiary Hearing. This opposition begins like this:
Rodrigues now attempts to obtain release from custody for civil contempt by arguing that: 1) he should be released because he has adequately demonstrated his inability to pay back the dissipated funds as required by this Court’s December 21, 2015 order and instead should be allowed to implement a payment plan; and 2) he should be allowed to use other frozen funds to replace the funds that he already dissipated. Neither of these arguments is availing. Instead, at minimum, this Court should require an evidentiary hearing wherein he demonstrates his inability to obtain funds where he would be subject to cross-examination. If this Court does order his release, the Commission respectfully requests that any payment plan ordered as a condition of the release require him to pay more than 20% of money earned from any business development course, book or other endeavor.
The SEC goes on to state that Rodrigues has not proven that he has an inability to comply with the Court’s Order, or to use it as an affirmative defense. Instead, they say, Rodrigues only provided a cursory declaration saying the accounting he provided was adequate, and believes the SEC’s own status report was evidence that this accounting adequately demonstrates his inability to pay. But, the information the SEC has was “unsworn information” regarding Rodrigues’ domestic holdings, but lacked information about his international holdings which are outside the asset freeze. The SEC did not push for a sworn accounting in the hopes that the involved parties could resolve the issue.
The Commission’s decision not to push for a sworn accounting, however, does not relieve Rodrigues’ burden to provide to this Court detailed sworn evidence that he has an inability to pay and thereby excuse his failure to purge his contempt. Rodrigues seeks to avoid this requirement by suggesting that he must not have the ability to comply because he is still in jail, which is evidence enough that he cannot purge his contempt.
Yet, Rodrigues has only been in jail for 27 days. He has cited no case that supports that less than a month in jail is sufficient evidence that he has no ability to comply with a court order without other evidence.
Thus, at minimum the Commission requests an evidentiary hearing at which Rodrigues, under oath provide evidence that he has an inability to comply with this Court’s order and that he be subject to cross-examination to test the veracity of his claim.
And, the SEC is not going along with Rodrigues’ suggestion that he is allowed to use Frozen Assets to pay of the contempt. I have uploaded the full document onto the Files Website.
Adding to their arguments, there is a Declaration filed by Mark Albers, a forensic accountant in the Boston Office of the SEC, part of which states this:
I was asked to review certain documents, including bank statements, bank transaction documents, and bank wire transfer records concerning personal and business accounts under the control of Rodrigues, as well as bank accounts belonging to defendants TelexFree, Inc. and TelexFree, LLC (collectively “TelexFree”). Members of the Commission’s accounting staff working under my supervision assisted with the review of these documents.
The bank records reflect that, from October 2012 through April 2014, business or personal accounts under the control of Rodrigues likely received more than $1.51 million from TelexFree or its investors.
And, it gets even better:
Based on our communications with Mr. Rodrigues, it is our understanding that he had no other source of income during this time period other than TelexFree-related activity.
There was an additional $3.92 million in cash deposits made into Mr. Rodrigues’ personal and business accounts over this time period. Assuming all of those deposits were related to TelexFree, the total amount of Mr. Rodrigues’ earnings from Telexfree could be as high as $5.44 million.
And there you have it. It is a poetic equivalent to “Water, water everywhere and nary a drop to drink”.
TelexFree: Sann Rodrigues Wants Out of Jail……
You just can’t make this stuff up.
SannRodrigues has filed a Motion for release from custody because of what is referred to as the “impossibility to comply with the Memorandum & Order entered on December 21, 2015”. And, Rodrigues wants the Court to order and approve the payment plan for compliance with the Purge Order originally proposed by Mr. Rodrigues. The Court previously denied this idea, so I suppose he wants to try it again. Or, of that doesn’t work, Rodrigues requests an evidentiary hearing. Good luck with that.
In support of this Motion, Rodrigues states:
- He has spent 26 days in custody of the US Marshall Service on an indefinite sentence for civil contempt
- Rodrigues does not have the ability to comply with the Court’s Order to pay the SEC approximately $ 474,503.00
- While Rodrigues has substantial assets that could easily pay this sum, all assets are frozen and cannot be used to purge the contempt.
- Rodrigues is not able to work outside of the home as he was under house arrest as a result of a Pretrial release order.
- Due to “dire financial circumstances”, Rodrigues has relied on “modest gifts and loans” from friends and family to support himself, his wife and 2 minor children.
- Unless he is permitted to use frozen assets to purge the contempt or permitted to make payments, he will remain incarcerated.
- In an effort to satisfy his obligations, he has received a job offer from a Transportation company in Tampa which would allow him to make payments.
The Motion goes on to further lament how bad of a position Rodrigues is now in after the asset freeze which prevents him from purging the contempt. Here’s a link to the today’s filing and the 2 Exhibits.
Let me call you a Wambulance-
TelexFree: Preliminary Injunction Filed Against Daniil Shoyfer and Scott Miller
First, a bit of background:
In the TelexFree multi-district case, Class representatives Rita Dos Santos and Celio Da Silva (Plaintiffs) , and others, filed a suit against Daniil Shoyfer, Scott Miller and in others in connection with the losses they sustained in TelexFree. TelexFree principals, James Merrill and Carlos Wanzeler are currently the subject of a Criminal prosecution alleging that TelexFree ran a global pyramid scheme that had thousands of victims. Santos and Da Silva alleged that Shoyfer and Miller were “Top Level Promoters” who played a primary role in the TelexFree pyramid scheme. Plaintiffs further allege that the Individual Defendants recruited “members” through internet videos or public meetings.
District Judge Hillman agreed with their arguments that a Preliminary Injunction be granted, based on these points:
In evaluating a motion for a preliminary injunction, the Court examines the likelihood the movant will succeed on the merits, is likely to suffer irreparable harm in the absence preliminary relief, that the balance of equities tips in the movant’s favor, and that an injunction is in the public interest.
I am satisfied that Plaintiffs have established a reasonable likelihood of success on the merits as to their unjust enrichment claim.
Although this is a close call, I find that the nature of Plaintiffs’ unjust enrichment claim is such that they do not have an adequate remedy at law and Grupo would not bar injunctive relief. At the same time, I find that the assets restrained must have a nexus to Plaintiffs’ claim, that is, any assets restrained must be directly or indirectly traceable to money received by Shoyfer in his capacity as a TelexFree promoter.
Little discussion is warranted with respect to the last two factors. Unless restrained and enjoined by the Court, Shoyfer may dissipate and/or conceal assets that would be available to compensate the Plaintiffs. Therefore, I find that the balance of equities tips in Plaintiffs’ favor, and that an injunction is in the public interest. The Plaintiffs have established that all four factors weigh in their favor, and therefore, a preliminary injunction shall enter against the Individual Defendants as set forth below.
If you would like to read the full document, you can click here 405. This Injunction was later amended because the original injunction had Shoyfer’s first name misspelled.
ProSun: SEC Files Motion for Default Judgment
The SEC has filed a “Motion for Default Judgment and Response to Order to Show Cause”. In this Motion they state,
On March 6, 2015, the SEC requested entry of default against Inter Reef and all relief defendants, the Clerk entered such default on March 9, 2015. The Commission now asks that the Court enter default judgment against Inter Reef and the relief defendants, grant a permanent injunction against Inter Reef, and order that both Inter Reef and relief Defendants pay disgorgement and prejudgment interest in the amounts to be determined by a later hearing.
The SEC also filed a 21 page Brief in Support of this motion. I have uploaded these onto the Files website, documents 37 and 38.
Zeek Rewards Updates
Here are the latest activities in the Zeek Rewards federal lawsuits:
12-cv-519 (SEC Case) On February 1st, Kenneth Bell filed is Status Report for the Fourth Quarter of 2015. I have uploaded it onto the Files Website, click here for that document.
12-cv-519 (SEC Case) Kenneth Bell continues to go after Zeek receivership assets by getting an Order directing Sooper Credit Union to turn over the sum of $2,200.00 that represents proceeds of Cashier’s Checks within 30 days.
14-cv-91 (Bell v Disner) The attorney representing the “Defendant Class of Net Winners”, Kevin Edmundson, has filed his first application for reimbursement of professional fees and expenses, which are: (a) Berkeley Research Group $ 70,775.78, (b) Edmundson PLLC $ 2,800.00, and (c) Kelly Hart & Hallman LLP $ 6,976.70
14-cv-91 (Bell v Disner) William R. Terpening and Jefferson A. Moors filed a Motion to allow
them to withdraw as counsel for any and all parties in this case, including Rhonda Gates;
Innovation Marketing LLC; Aaron Andrews; Shara Andrews, who are part of the Defendant Class.
ProSun: Deadline to File is Tomorrow
Federal District Judge Thomas W. Thrash issued an Order to Show Cause as to why the Profitable Sunrise case (13-cv-1104) should not be dismissed for lack of filings since July of 2015. The Judge gave the Plaintiffs, the SEC, 21 days to reply to this Order.
The deadline to file is on or before February 10, tomorrow.
eAdGear: SEC Announces Final Judgments Entered
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23457 / February 1, 2016
Securities and Exchange Commission v. eAdGear, Inc., et al., Civil Action No. 14-cv-04294-RS (U.S. District Court for the Northern District of California)
The Securities and Exchange Commission announced that today, the Honorable Richard Seeborg of the United States District Court for the Northern District of California entered final judgments against defendants eAdGear Holdings Limited, eAdGear, Inc., Charles S. Wang, Francis Y. Yuen, Qian Cathy Zhang, and relief defendant Laurata Chan. The final judgments order the defendants and relief defendant to pay a total of $26,539,280 in disgorgement, penalties, and prejudgment interest.
The Commission’s complaint, filed on September 24, 2014, together with a request to the court for emergency relief, charged the defendants with operating an international pyramid scheme to fraudulently raise more than $129 million from investors, in violation of the federal securities laws. The complaint alleged that defendants used money from new eAdGear investors to pay earlier investors, as well as to repay a personal loan and purchase million-dollar homes for the individual defendants. The complaint further alleged that defendants perpetuated the scheme by making it appear as if eAdGear had real, paying customers when it lacked any substantive sources of revenues other than investments, and defendants further manipulated revenue distributions to investors to appear profitable. On September 25, 2014, Judge Seeborg granted the SEC’s request for an asset freeze and issued a temporary restraining order.
The defendants and relief defendant have consented, without admitting or denying the facts in the complaint, to the entry of final judgments against them. The final judgments permanently enjoin all defendants from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. The final judgments also order eAdGear Holdings Limited and eAdGear, Inc. to disgorge $21,000,000 in ill-gotten gains, pay prejudgment interest of $640,000, and pay a civil penalty in the amount of $1,000,000; Wang and Zhang to disgorge $2,019,000 in ill-gotten gains and pay prejudgment interest of $61,280; Zhang to pay a civil penalty in the amount of $200,000; and Yuen and Chan to disgorge $1,571,000 in ill-gotten gains and pay prejudgment interest of $48,000. It also permanently bars Wang, Yuen, and Zhang from acting as officers or directors of any public company, and permanently enjoins them from directly or indirectly participating in the issuance, offer, or sale of any securities of any entity controlled by, or under joint control with any person named a defendant in this case or soliciting any person or entity to purchase or sell any security.
For additional information see Litigation Release No. 23120 (Oct. 28, 2014) and Press Release No. 2014-217 (Sept. 26, 2014).