TelexFree: Notice of Deadline for Filing Claims in Bankruptcy Case

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Notice of Deadline for Filing Electronic Proofs of Claim

Participant Proofs of claim (persons or entities who purchased a membership plan in, or a voice over internet package (“VoIP”) from the Debtors) must be submitted electronically through the Portal, www.telexfreeclaims.com

Notice of Deadline for Filing Electronic Proofs of Claim and Claims Procedures (English)

Notificación de Plazo Límite Para La Presentación de Pruebas de Reclamo y Tramitación del Reclamo (Español)

Aviso de Prazo Para Protocolar Habilitações Electrônicas de Creditos e Procedimentos de Crédito (Portuguesa)

WCM777: Claims Portal Open

wcm777-logoPursuant to Court approval, a claims portal has been opened for victims of this scam to file a claim, which is similar to the Zeek Rewards claims process.

https://www.wcm777claimsprocessing.com/en

The deadline to file a claim is November 9, 2015.

For more information on this matter, please contact the Claims Administrator at:

Call: 1-877-301-6918
Write: Krista L. Freitag, Receiver
c/o SEC v WCM777 Claims Administrator
PO Box 3775
Portland, OR 97208-3775
Email: info@WCM777ClaimsProcessing.com

Please ensure that you include your name and your return address on all correspondence.

Zeek Rewards: Belsome, et al. Lose Another Appeal

ZeekOn July 11, 2014, Johnny Belsome and a group of similarly situated co-Plaintiff filed an Appeal relative to the Federal Court’s Order allowing the receiver to withhold claims that were funneled through an attorney representing the group and charging them for it, most likely.  The filing goes something like this:

The District Court was clearly erroneous in obviating valid and enforceable contracts without conducting any hearing or consideration of the reasonableness of the contingency fees contained therein.

The same group asked for a clarification on what the Court really meant when it was stated that the receiver can only distribute claims to the registered members of Zeek, not to their attorney.  The Court clarified things thus:

The Belsome Plaintiffs seek clarification and/or reconsideration of the Court’s Order issued on March 26, 2014 approving the Receiver’s proposed distribution procedures. (Doc. No. 199). Paragraph 33 of that Order includes the following language:

Delivery of Distributions in General. The Receiver shall make distributions solely to the holders of allowed Claims without regard to any Claim or interest asserted by any third party in such distributions. Distributions shall be made to the holders of allowed Claims at the addresses set forth in the Claims asserted by such holders, as amended by such holders on the Claims Portal.
The Belsome Plaintiffs have indicated that it is unclear whether the Court is endorsing the Receiver’s stated intention to not make distributions to attorneys’ addresses. The Court will clarify its Order as follows: The Receiver will not issue a distribution check to a law firm’s address.

And based upon the above, Belsome, et al. filed an Appeal and lost. This seems to be a repeating pattern with this group.  Maybe someday they will figure things out.

Zeek Rewards: Receiver’s Announcement for November 25th

ANNOUNCEMENT FROM THE RECEIVER – November 25, 2014

Today, new features were added to the claim status portal in response to issues that have arisen in the distribution process. The claim status portal can be accessed by following: https://cert.gardencitygroup.com/zrwdet/fs/home. These updates allow for a claimant who is eligible to receive a distribution to be able to check the status of that distribution by logging on to the claim status portal. In addition to claim status, that portal will now provide those affiliates who are eligible to receive a distribution with: the date on which his/her distribution check was issued; the amount of the distribution check; whether the distribution check has been cashed; and whether the distribution check was returned to us as undeliverable. Second, if your check was returned to us, lost, destroyed, or your check was issued in the wrong name (for example, if you inadvertently provided your Zeek username instead of your real name when you provided your payment information), you will now be able to request a new check be issued to you in the proper name. We hope that these updates will address many of the issues you have been asking us about.

With these improvements to the claims status portal we will no longer respond to emails and calls that request the status of a claim that can otherwise be answered by logging into the claim portal and checking on the status of your claim. We have been spending a considerable amount of receivership assets responding to affiliate claimants’ inquiries about the status of their claim, all of which can now be answered through self-help. The savings generated by this automated system will allow us to make larger distributions to all affiliate claimants holding allowed claims.

Among the inquiries to which we will no longer be responding are requests from affiliates who registered on the claims portal but did not complete and finally submit a claim. The claims system was continuously operational and was tested and verified as accurate during the claims period and afterward. If review of your claim status shows that you did not finally submit a claim through the claim portal by the Court ordered deadline of September 5, 2013, I have no authority to accept or permit you to file a claim thereafter, including now. I regret that anyone who could have validly submitted a claim failed to do so.

If you hold a claim eligible for a distribution, but were not mailed a check on September 30, 2014, I encourage you to login to the claims status portal and accept the letter of determination you were issued (or have any objection you raised to the claim determination resolved) and submit the required Release and OFAC certification so that we may distribute money to you. If you take these steps, you will be mailed a first interim partial distribution at the end of January 2015.

By the close of business on December 1, 2014, we will have issued Letters of Determination to all affiliate claimants who timely filed claims.

Finally, we continue to receive many inquiries about tax withholdings from distribution checks. We are trying very hard to get reliable guidance from the Internal Revenue Service. I do not want to withhold taxes from distribution checks, but unless and until I receive assurance that the IRS agrees with me, withholdings will be made. We cannot expose the receivership, and the assets which we have and from which we will make distributions to victims, to potential penalties and fines by the IRS.

Zeek Rewards: Receiver Posts Link to Check Claim Status

From the Receiver’s website:

Claimants are able to check the status of their claim by accessing the following Status Check Link https://cert.gardencitygroup.com/zrwdet/fs/home. The Status Check Link allows you to log in to a webpage using the Registration ID and Password you selected when you registered on the Claims Portal.

Zeek Rewards: Judge Mullen Orders Interim Distribution

ORDER APPROVING MOTION TO AUTHORIZE
FIRST INTERIM DISTRIBUTION, ESTABLISH RECORD DATES
AND SET FIRST INTERIM DISTRIBUTION DATE

This matter is before the Court upon the Receiver’s Motion for an Order Approving his motion to (i) authorize an interim distribution on account of allowed class 3 claims, (ii) establish a record date for eligibility to receive the First Interim Distribution on the First Interim Distribution Date, (iii) set the First Interim Distribution Date, and (iv) establish Subsequent Record Dates and Subsequent Distribution Dates for making the First Interim Distribution to Class 3 Claimants whose claims are allowed prior to a Subsequent Record Date (the “Motion”).1 Non-party Plastic Cash International, LLC (“PCI”) filed a response objecting to the Receiver’s motion.

1 Capitalized terms used, but not defined herein, shall have the meanings ascribed them in the Motion.

This Court, having reviewed and considered the Motion, and upon all of the proceedings had before this Court, and after due deliberation and sufficient cause having been shown, the Court hereby GRANTS the Motion in all respects. The Court specifically notes that this Order does not purport to determine the validity or priority of PCI’s claim. The PCI Claim will be addressed through the Claim Determination process and separate litigation.

IT IS HEREBY FOUND, DETERMINED, ORDERED, ADJUDGED, AND DECREED, AS FOLLOWS:
1. The notice of the Motion sent via electronic mail to all entities that fully submitted claims on the Claims Portal via the electronic mail address provided in the Claim submission process by such entity constitutes good and sufficient notice of the Motion and all the relief sought therein.

2. The Receiver is authorized, but not directed, to make the First Interim Distribution directly to the Claimants who hold Allowed Claims in Class 3 pursuant to the Distribution Plan.

3. The First Interim Distribution Record Date shall be August 15, 2014.

4. The First Interim Distribution Date shall be September 30, 2014.

5. The first Subsequent Record Date for the First Interim Distribution shall be December 31, 2014.

6. Additional Subsequent Record Dates for the First Interim Distribution shall occur on each of the last business days of each calendar quarter subsequent to the first Subsequent Record Date.

7. The first Subsequent Distribution Date for the First Interim Distribution shall be January 30, 2015.

8. Additional Subsequent Distribution Dates for the First Interim Distribution shall occur on the last business day of the calendar month that directly follows a Subsequent Record Date.

9. The methodology for determining the amount of reserves to be held by the Receiver for the holders of Class 3 Claims that are not allowed by the First Distribution Record Date, but have not been disallowed, is proper. The amount to be reserved by the Receiver for the holders of Class 3 Claims that are not allowed as of the First Distribution Record Date shall be determined and held in the manner set forth in the Motion.

10. The Receiver shall establish a reserve on account of Class 3 Claims that are not allowed as of the First Distribution Record Date in the aggregate amount of the First Interim Distribution Amount that would be necessary to pay such Class 3 Claimant based on the amount that such Class 3 Claimant asserted in the Claim Process, after applying Rising Tide to the First Interim Distribution Amount in accordance with the Distribution Plan.

Continue reading “Zeek Rewards: Judge Mullen Orders Interim Distribution”

Zeek Rewards: Receiver Lists Settlements in 2nd Quarter Report

The receiver has filed his 2nd Quarter report and in it is this:

Lawsuit Against Insider Defendants  (emphasis added)

The lawsuit against the ZeekRewards Insiders was placed on the same track as the lawsuit against U.S. net winners, and the Receiver’s counsel attended the scheduling conference on April 15, 2014 regarding this matter as well. On the June 30, 2014 deadline for answers and motions to dismiss, defendants Beth C. Plyler and James L. Quick, as Co-Trustees of the Roger A. Plyler Revocable Trust and Co-Administrators of the Estate of Roger Anthony Plyler, filed a motion to dismiss the Receiver’s lawsuit. In addition, Plyler and Quick, as well as defendant Alex de Brantes, filed Answers to the Receiver’s claims. No counterclaims were filed against the Receiver in this case.

The Receiver engaged in multiple settlement discussions with certain Insider defendants during the second quarter. By the filing date of this report, the Receiver had reached settlement agreements with Paul Burks, Dawn Wright-Olivares, and Daniel Olivares, pending Court approval.

Each of these defendants agreed to a consent judgment of $600 million to be satisfied with substantially all of their assets.

I have added the new filings to the Files website, Case # 12-cv-519

Ponzitracker: TelexFree Proof of Claim Deadline Date Change?

TelexFree Proof of Claim Deadline No Longer Valid, New Deadline Expected Soon

Ponzitracker has confirmed that victims of the alleged $1 billion TelexFree Ponzi/pyramid scheme no longer face an August 13, 2014 deadline to submit any claim for alleged losses, and that a new deadline will likely be set for late 2014.  TelexFree LLC, TelexFree, Inc., and TelexFree Financial Inc. (collectively, “TelexFree”), which initially filed bankruptcy in a Nevada Bankruptcy court, currently face allegations from state and federal securities regulators that their voice-over-internet-protocol (“VOIP”) business was a massive Ponzi and pyramid scheme that took in hundreds of millions of dollars from U.S. investors alone.  The proceedings were subsequently transferred to a Massachusetts Bankruptcy court where civil and criminal proceedings are also pending, and an independent trustee was recently appointed.

An attorney for the independently-appointed trustee, Stephen Darr, has confirmed to Ponzitracker that the August 13, 2014 deadline established by the Nevada Bankruptcy court to file a Proof of Claim is no longer valid as a result of the transfer of the proceedings to Massachusetts.  Rule 3002 of the Federal Rules of Bankruptcy Procedure provides that a proof of claim is timely filed when done so within 90 days after the first date of the meeting of creditors known in Bankruptcy parlance as the “341 Meeting.”  Shortly after TelexFree’s April bankruptcy filing, a notice appeared on the court docket setting the 341 Meeting for May 15, 2014 and providing that the Proof of Claim filing deadline was 90 days after that date – resulting in a claim deadline of August 13, 2014.

However, the originally-scheduled 341 Meeting was never held, as a Court ordered the transfer of the proceedings to a Massachusetts Bankruptcy court on May 6, 2014.  Recently, Ponzitracker spoke with an attorney for Trustee Stephen Darr, who confirmed that:

You can disregard the bar date set by the Bankruptcy Court in Nevada.

Thus, until the Court reschedules the 341 Meeting, the Proof of Claim deadline will not take effect.

This change was also recently reflected on the official website maintained for TelexFree interested parties, with the Proof of Claim Form section modified to state that:

Claim Form (Modified Version Available Shortly)

Please note that a modified Proof of Claim Form specific to the TelexFree cases will be available in the near future. A Bar Date has not been set.

Thus, while the August 13, 2014 claim deadline is no longer valid, victims should still continue to gather appropriate documents that will allow them to submit an accurate claim, including bank documents showing their investment, documents from TelexFree or any promoter confirming their investment, and documents showing any funds received from TelexFree after their investment.  With the number of estimated victims likely to be in the tens of even hundreds of thousands, any discrepancy in a submitted Proof of Claim could potentially delay any eventual recovery.

Ponzitracker will report on when a new bar date is made public, and will provide a detailed instruction guide for understanding and completing the Proof of Claim form at an appropriate time.

Previous Ponzitracker coverage of TelexFree is here.

TelexFree: James Merrill Release Conditions, Arrest Warrant in Abeyance, and more….

On the docket today were entries regarding Merrill’s Conditions of release, along with a signed “Arrest Warrant in Abeyance”.  I guess that it is good to be prepared for violating Curfew or any other condition. You may read the new documents here.

In addition, there is an entry regarding the $900,000 Bond secured by 3 properties, a Motion for Release of Funds and a record of Mortgage on one of the properties held for Bond.

The Motion to release Funds mentions that the Order to freeze assets on May 9, 2014 included:

  • Middlesex Savings Bank,  $10,643.00
  • Middlesex Savings Bank,  $104,988.64
  • Waddell & Reed,   $3,985,097.33
  • Waddell & Reed,   $79,684.28

Merrill is asking the Court to release funds so he can pay for his legal defense, since the Court found him to be “indigent” based on his money was frozen and inaccessible.  The Motion goes on to say that:

On or about June 18, 2014, with the assent of the Securities and Exchange Commission, Mr. Merrill moved for the release of certain accounts subject to a freeze order issued by Judge Gorton in the SEC litigation. Attorneys for the SEC assented to the release of the accounts, concluding that they did not contain a sufficient nexus to TelexFree. Judge Gorton has since allowed the motion. The following accounts have been ordered released by Judge Gorton, only the last of which is covered by the seizure warrants identified above:

Waddell & Reed,   IRA,  $33,851
Waddell & Reed,   Savings (for benefit of son)  $14,719
Waddell & Reed    Savings (for benefit of daughter),    $29,641

Waddell & Reed,   IRA  $91,692
Waddell & Reed    IRA   $158,289
Waddell & Reed   401K  $80,272

In the first group of numbers above, Merrill has around $4.1 million dollars in frozen assets and only has that little pittance set aside for his children’s education? And his “retirement” savings amount to around $ 375,000?

Maybe it’s just me but Merrill seems to need to reevaluate his priorities, especially since he can lose it all if convicted. Maybe it is not such a good idea to run a Ponzi/Pyramid scheme?

How long will these nimrods take to figure this out??