BREAKING: Sann Rodrigues Makes Plea Deal in Visa Fraud Case
Just posted to the Docket files today in 15-cr-10227, USA v Rodrigues de Vasconcelos, the Defendant has agreed to plead Guilty to Count 1 (Visa Fraud).
Defendant expressly and unequivocally admits that he committed the crime charged in Count One of the Indictment, did so knowingly, and is in fact guilty of that offense.
Count One has a maximum penalty of 10 years incarceration; supervised release for 3 years; a fine of $250,000; and a mandatory special assessment of $100.
Pleading guilty may have consequences with respect to Rodrigues’ immigration status. Under federal law, there’s a wide range of crimes that are removable offenses, including the offense to which the defendant is pleading guilty.
I have posted the Agreement onto the Files website.
Zeek Rewards: “Net Winner Class” Defendants File Reply to Complaint
In 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)
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
It seems no reporters from the Charlotte area are covering the Burks Criminal trial every day, so we will have to rely on what appears on the PACER docket.
On Sunday, this was filed; the document is on the Files website:
||REPLY TO RESPONSE to Motion by USA as to Paul Burks re 90 MOTION to Exclude Expert testimony of John White and to exclude and/or limit expert testimony of Morris Aaron (Sugar, Jenny) (Entered: 07/10/2016)
Here’s what we have for today:
Full docket text:
Minute Entry: JURY TRIAL as to Paul Burks held before District Judge Max O. Cogburn, Jr.. Evidence continued. Jury Trial set for 7/12/2016 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: Melissa Owen, Noell Tin, Jacob Sussman, Isham Reavis. Court Reporter: Cheryl Nucio/Laura Andersen. (chh)
Full docket text:
TEXT-ONLY ORDER denying  Motion to Continue Docket Call/Trial as to Paul Burks (1) Text of Order: denied for reasons discussed in court So Ordered. Entered by District Judge Max O. Cogburn, Jr on 7/11/2016. (Davis, David)
Zeek Rewards: Paul Burks Files Jury Instructions and Trial Brief
On the 24th, Burks filed his Proposed Jury Instructions which has such topics listed as:
- Jury to consider only this defendant
- Witness credibility
- Bias and hostility
- Interest in outcome
- Government Witness – Not proper to consider guilty plea
- Indifference or lack of concern
- Mismanagement not the issue
- Using motive for intent
- The indictment is not the evidence
- Good faith reliance upon advice of counsel and/or experts
Each of the topics, and others, has a page listing the instructions proposed to give the jury. I have uploaded a copy onto the Files website, (14-cr-208, Doc 84) as it is a bit lengthy to go into here.
And today, Burks filed his Trial Brief, the beginning of which states:
II. STATEMENT OF ANTICIPATED FACTS
A. Paying What He Promised
B. Bid Sales Were Final
C. Mr. Burks Made Changes to the Program in Good Faith Based on the Advice of Experts
D. Dealing with the Challenges of Explosive Growth
E. The Issuance of Forms 1099 Was Based on Sound Legal Advice—and Was Anything But Evidence of “Lulling”
Next, we have a list of the proposed “Experts” expected to be called by Burks:
- Jose L. Valasquez, Jr. – explaining the contents of the RVG SQL database and flow of money in and out, Director of Forensic Accounting at Thatcher and Assoc.
- John White – expert in accounting and fraud investigation
- Morris Aaron – will testify that RVG maintained a sufficient accounting system to calculate daily profits
- Curtis Elliot- expert in tax law and litigating federal tax controversies.
Included in the brief is a paragraph stating that “Evidence Regarding “Follow Me 1×2” Should Be Excluded”, as “Mr. Burks was not in favor of it and thought the concept was a “straight pyramid”. OK, so he knows what a pyramid scam looks like.
Additionally, they want to exclude any evidence related to ASD, and want any reference to be barred. In essence they want virtually anything that shows the Burks knew all along what he was doing barred from the case.
Good luck with that.
I have uploaded this filing onto the Files website, Doc 86.
Profitable Sunrise: Judge Grants Default Judgment
Judge Thomas Thrash issued an Order on February 26th, that is short and sweet:
This is an SEC enforcement action. It is before the Court on the Plaintiff’s Motion for Default Judgment [Doc. 37] which is GRANTED. Counsel for the Plaintiff are directed to present a proposed Order and Final Judgment to the Court in chambers.
This case has dragged on for almost 3 years, and it looks like it might just be winding down. What this means for those victimized by this scam is somewhat nebulous. While monies have been repatriated from the scheme, there is more to be gathered.
Robert Craddock: Criminal Case Sentencing Information
SENTENCE IMPOSED as to Counts One and Two of the Indictment.
INCARCERATION: 6 months. This term consists of terms of six months on each of Counts
One and Two, such terms to run concurrently.
SUPERVISED RELEASE: 3 years. Special conditions of supervised release: Mandatory drug
testing requirements are waived. Defendant shall serve 15 days at the Brevard County Work
Farm. Credit conditions imposed. Defendant shall cooperate in the collection of DNA.
FINE and cost of imprisonment are waived.
SPECIAL ASSESSMENT of $200.00 is due immediately.
RESTITUTION ordered in the amount of $117,700 to Gulf Coast Claims Facility.
Defendant shall make payments toward his financial obligations by an immediate payment of
$5,000.00, and thereafter by monthly payments of $500.00.
FORFEITURE ordered per the Money Judgment entered at Doc. 41.
The defendant shall surrender for service of sentence at the institution designated by the
Bureau of Prisons before 2 p.m. on the tenth day following notification of designation.
Sann Rodrigues Indicted by Federal Grand Jury
It seems the problems continue for one Sanderley Rodrigues de Vasconcelos in his Visa fraud case. On August 12th, a federal grand jury in the District of Massachusetts issued an Indictment charging Rodrigues with primarily the same violations as the original case, 15-mj-2086. The case stems from allegations that Rodrigues made false statements on his application for a B-2 non-immigrant Visa.
When asked if he had ever been in the USA before, he answered “no”. That’s a problem, as the government says he lived in the US from 2003 to at least 2006, and was deposed in Boston, Mass. on August 31, 2006. He also lied about being a “tourist”, that he would only be in the US for 8 days and would be residing in Las Vegas. The allegations are that he remained longer than 8 days and began working in the US.
On Form I-485, used to apply for permanent resident status, Rodrigues was asked if he had “EVER”, in or outside of the USA, knowingly committed any crime involving moral turpitude or drug related offenses. He replied “no”, when on 2009 on his B2 visa application he falsely stated he had never been in the United States.
When asked on the forms if he had ever been arrested, cited, charged, convicted, fined or imprisoned for breaking any law or ordinance, he again responded “no”. But, in 2006, Rodrigues was cited by the SEC for violating provisions of the Securities and Exchange Act, and was found liable.
And if all this wasn’t bad enough, when asked if he had ever “by fraud or willful misrepresentation of material fact, ever sought to procure, or procured, a visa or other documentation, entry into the US or any immigration benefit?”. Rodrigues responded “no”, which was false as he obtained his B2 non-immigrant visa by fraud or willful misrepresentation of material fact, and then used the fraudulently obtained B2 to enter the US.
On or about March 2, 2012, in reliance of the I-485 and I-140 forms, the USCIS granted Rodrigues permanent resident status and issued him a Green Card. On May 3, 2015, Rodrigues was travelling from Boston to Israel. During the outbound inspection prior to departure from Logan Airport. Rodrigues encountered Customs and Border Patrol agents and presented them with his Green Card as proof of authorized stay in the US.
Lies always catch up to you, Sanderley.
TelexFree: Government Status Report of DOJ Concerning Parallel Criminal Proceeding
APRIL 15, 2015 STATUS REPORT OF THE DEPARTMENT OF JUSTICE CONCERNING PARALLEL CRIMINAL PROCEEDING
By order of October 8, 2014, the Court granted the Department of Justice’s motion to intervene in these proceedings, and further granted its motion to stay discovery until parallel criminal proceedings are resolved. See Order (Dkt # 275) at 10 (“Discovery in this civil enforcement action brought by the SEC will be STAYED pending resolution of the parallel criminal proceedings against defendants Merrill and Wanzeler in Case No. 14-cr-40028-TSH.”). The Court also ordered the Department of Justice (“DOJ”) to file a status report on the progress of the criminal case on or before January 15, 2015, and every three months thereafter. Id. On January 15, 2015, the Government filed a status report (Dkt # 289).
The criminal case is proceeding smoothly with the government providing discovery on a rolling basis, but discovery is not complete. There is an extremely large volume of discoverable material in this case.1
The volume and scope of discovery combined with the fact that the case involves documents and witnesses outside the United States caused this case to be designated a complex case by the Magistrate pursuant to 18 U.S.C. Section 3161(h)(7)(B)(ii). (U.S. v. Wanzeler et al., 14-cr-40028, Dkt # 118).
Since the last status report, the government has produced a large volume of discovery materials to the defense. In addition to providing materials to the defense, the government has obtained additional materials from foreign governments, TelexFree’s court appointed Chapter 11 trustee, and via the execution of additional search warrants. Despite the volume of discovery produced to date, there are still materials which need to be provided.
Discovery thus far provided to the defendant includes: a database of materials seized from TelexFree’s headquarters in April 2014 (24 GB), a database of materials produced to the government by the Trustee overseeing TelexFree’s affairs (75 GB), the contents of a personal email account belonging to defendant James Merrill, approximately 45 GB of additional information received as a result of a search warrant executed at an internet service provider – consisting largely of TelexFree-related YouTube videos and back-up and subscriber data.
1 The case involves a substantial amount of discovery even for a large white collar case. For example, the government seized 46 computer servers from TelexFree, along with about 35 boxes of hardcopy materials. Beyond this, the government accumulated, and has produced, about 100,000 pages of information subpoenaed from banks, payment processors, accounting firms, and other entities. The government has also received substantial amounts of discoverable material from the SEC, the court appointed Chapter 11 trustee administering TelexFree’s affairs, email service search warrants, a search warrant to YouTube for hundreds of video clips and supporting business records, and a search warrant to a cloud based information storage company. Additionally, in the course of their own investigation, authorities in Brazil have, so far, executed nine search warrants relevant to this case and have collected substantial amounts of additional evidence, including bank records and correspondence.
In the coming months, the government will produce additional discovery. Magistrate Judge Hennessy continues to keep close tabs on the parties’ progress, scheduling status conferences approximately every six weeks. The government anticipates additional status conferences before discovery is complete. At this stage, assuming the case goes to trial, it would be difficult to predict a trial date.
Per the Court’s order of October 8, 2015, DOJ will submit another status report three months hence, on July 15, 2015.
TelexFree: April 2015 Interim Status Report and Change in Conference Schedule
Interim Status Report
Since the last status date, the government has produced approximately 45 GB of additional information received as a result of a search warrant executed at an internet service provider. This information consists largely of TelexFree-related YouTube videos and back-up and subscriber data. The government has also produced the contents of a personal email account belonging to defendant James Merrill.
The government recently met with Brazilian prosecutors and law enforcement agents, who are conducting a separate investigation of TelexFree and certain individuals. The Brazilian authorities have produced a large amount of data and will be producing additional materials in the coming weeks. This additional data, mostly derived from multiple search warrants executed in Brazil, will likely amount to 100s of gigabytes. Once the government has received all of the materials from the Brazilian authorities it will copy the materials for the defendant.
Overall, at this stage the following discovery remains to be produced:
• Data contained in two Hotmail email accounts and one Apple email account, also received in response to a search warrant. Production of this material has been delayed by errors in the data as produced by the email providers.
• Data (5-10 TB) received from a cloud-based service that stored data for TelexFree.
• Materials received in mid-March 2015 from the Brazilian authorities. Among other things, this includes a forensic report by Ernst & Young, which was commissioned some time ago by the Brazilian government to opine on whether TelexFree’s operations amounted to a pyramid scheme. (The report is in Portuguese – the government will produce the original and a translation that is currently in process). As noted above, the government expects a substantial additional production from Brazil in mid-April 2015.
• Various recordings made by undercover HSI agents at TelexFree conference and in conversations with a TelexFree promoter.
In light of the above, and in keeping with the Court’s designation of this matter as a “complex case” under 18 U.S.C. s 3161(h)(7)(B)(ii), the government suggests an interim status conference in approximately 60 days. Beyond waiting to receive additional productions from Brazil, the substantial additional data sets, e.g., from the cloud-based provider and the Brazilian government, will take time to process and copy.
Motion to Adjourn Scheduled Status Conference and Exclude the Time Under the Speedy Trial Act
The Court has scheduled a status conference for April 13, 2015. Because discovery is proceeding steadily in this unusually large case, and the parties have been communicating as needed about the production, the parties request that the conference be adjourned to June 12, 2015, or some similar date that is convenient for the Court. Both parties also request that the Court exclude the time from April 13, 2015, through June 12, 2015, from the speedy trial clock, pursuant to Local Rule 112.2(b), the Speedy Trial Act, 18 U.S.C. §§ 3161(h)(7)(A) & 3161(h)(7)(B)(iv), and §§ 5(b)(7)(A), 5(b)(7)(B) & 5(b)(7)(C)(iv) of the Plan for Prompt Disposition of Criminal Cases for the United States District Court for the District of Massachusetts (effective December 2008), on the ground that the ends of justice are served by granting the adjournment and excluding this period, and outweigh the best interests of the public and the defendant in a speedy trial.
An Order was subsequently issued allowing the “exclusion of time pursuant to the below-referenced provision of the Speedy Trial Act from Monday, April 13, 2015 (the date on which the fourth Interim Status Conference was scheduled to occur), through and including Friday, June 12, 2015 (the date of
the fifth Interim Status Conference).”
I have uploaded these documents onto the Files website.
ProSun: “Ponzi” Jo Frazer, David Frazer and Albert Rosebrock Entered into Settlement with Ohio Department of Commerce
Nanci Jo Frazer
As part of this December 2014 settlement, Nancy Jo Frazer (right), David Frazer and Albert Rosebrock have agreed to pay a total of $ 108,146.61 to the Ohio Attorney General. After releasing some of the frozen assets ($ 6,864.17) they will owe $ 101,282,44 which will be paid at $ 844.02 per month for 120 months (10 years).
That’s $281.34 per month for each of them.
Wow, really?? I can only hope these thieving jerks get a criminal charge in the near future. They knew what they were doing all along, and quoting the Bible does not sanitize a scam.