Monthly Archives: July 2017

TelexFree: Final Judgment Against Steven Labriola

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23880 / July 14, 2017

Securities and Exchange Commission v. TelexFree, Inc. et al., No. 14-cv-11858 (D. Mass. filed Apr. 17, 2014)

SEC Obtains Final Judgment Against Officer of Pyramid Scheme Targeting Latino Community

The Securities and Exchange Commission announced today that it has obtained a final judgment in a fraud case against the international sales director of a pyramid scheme targeting Latino communities.

The final judgment, entered on consent by a federal district court in Boston, Massachusetts, permanently enjoins Steven Labriola from violating Section 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, imposes a conduct-based injunction, and orders Labriola to pay approximately $25,000 in disgorgement and prejudgment interest. As part of the settlement, Labriola admitted that he was responsible for TelexFree’s relationships with its promoters, ran numerous training conferences, and that he was one of the main public faces of TelexFree, providing periodic “corporate updates” and appearing in other promotional videos that were posted on YouTube.

The SEC has previously obtained a final judgment by consent against a promoter of TelexFree, who also was ordered to jail for civil contemptarising from his repeated violations of court orders. Two other defendants in the SEC’s action – James M. Merrill, the co-owner and president of TelexFree, and Carlos N. Wanzeler, the co-owner and treasurer of TelexFree – were charged criminally. Merrill pled guilty to the criminal charges and was sentenced to six years’ imprisonment. Wanzeler is a fugitive from justice.

The SEC’s litigation continues against TelexFree, Merrill, Wanzeler, Joseph H. Craft, Telexfree’s CFO, and the remaining promoters of the alleged TelexFree pyramid scheme.

 

https://www.sec.gov/litigation/litreleases/2017/lr23880.htm