Monthly Archives: May 2017
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).
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In a February article, the Winston-Salem Journal reported the sentencing for Paul Burks, mastermind behind the $939 million dollar Ponzi scam known as Zeek Rewards. Burks is 70 years old and his sentence would amount to life in prison.
A federal judge Monday handed Paul Burks, founder of ZeekRewards.com, three concurrent prison sentences of 14 years and eight months for his lead role in the Lexington Ponzi scheme.
|Register Number: 29723-058|
|Located at: Lexington FMC|
|Release Date: 02/08/2030|