TelexFree: Judge Gorton Orders Hearing for Rodrigues

Posted by ASDUpdates on February 19, 2016No Comments

newtelexfreelogoI 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…..

 

ORDER

 
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.

 
So ordered.

TelexFree: SEC Files Opposition to Rodrigues’ Motion for Release from Custody and Payment Plan

Posted by ASDUpdates on February 18, 20163 Comments

sann-rodrigues-top-telexfree-investorThe 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: Rodrigues to Remain Incarcerated in Florida

Posted by ASDUpdates on January 22, 2016No Comments

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We have new info on Sann Rodrigues and his stay in the “cross-bar hotel”.

Judge Nathaniel M. Gorton has issued an ELECTRONIC ORDER granting Motion for Clarification and granting the Motion to Allow Defendant to Remain Incarcerated in Florida:

“It is the intention of this Court that defendant be incarcerated in an appropriate penal facility in Florida until his contempt is purged or further notice of this Court.”

TelexFree: SEC Files Motion for Clarification of Terms of Incarceration

Posted by ASDUpdates on January 21, 2016One Comment

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Plaintiff Securities and Exchange Commission (“the Commission” or “SEC”) files this Status Report and Motion for Clarification of Terms of Incarceration.

Yesterday, on January 20, 2016, Sanderley Rodrigues (“Rodrigues”) was arrested by the U.S. Marshals Service in Florida. After his arrest he appeared before Magistrate Judge Elizabeth Jenkins of the United States District Court for the Middle District of Florida (Tampa) regarding the terms of his incarceration. The court ordered him detained in the Pinellas County Jail in Florida pending a further hearing on Friday, January 22, 2016, at 2pm to determine whether he can travel to Massachusetts on bond or whether the U.S. Marshals Service must escort him to Massachusetts. The Commission seek clarification as to whether he needs to be transported to Massachusetts by the United States Marshals Service or whether he should remain incarcerated in Florida pending further order of this Court. If he needs to be detained in Massachusetts, the Commission seeks clarification as to whether he may travel on bond using a commercial carrier or whether he needs to be escorted by the U.S. Marshal Service.

TelexFree: Judge Denies One Motion, Grants Another, and Rodrigues Remanded into Custody

Posted by ASDUpdates on January 19, 2016No Comments

newtelexfreelogoNot hard to believe, Judge Gorton has denied Sann Rodrigues’ recent Motion to Stay Contempt Proceedings and Approve a Payment Plan. It might have something to do with this motion being filed a day before the Court’s ordered deadline to return a large sum of money he used after the Asset freeze. Rodrigues wanted to enter into a payment plan to repay this money, but without disclosing the length of time or monthly payments he proposed.  It was a waste of paper, actually.

 

And his lack of compliance with the Court’s Order has annoyed the judge greatly; this Order was entered on January 15th:

ORDER
This Court, by order entered December 18, 2015 (Docket No. 359), held the defendant, Sanderley Rodrigues de Vasconcelos, in contempt but deferred the imposition of sanctions to give him an opportunity to purge his contempt. Defendant, having failed to comply with the conditions of that order to restore assets dissipated in violation of the asset freeze imposed upon him by the temporary restraining order (Docket Nos. 13, 42 and 52) and preliminary injunction (Docket No. 89), is hereby remanded to the custody of the United States Marshals Service to be incarcerated until further order of the Court.

But, Judge Gorton did approve a Motion allowing Rodrigues to open a new bank account so he has some where to place all the money he plans on making with his motivational books and videos.  This account is not subject to the Injunction.

 

TelexFree: SEC Opposes “Payment Plan” and Stay of Contempt Proceedings

Posted by ASDUpdates on January 16, 2016No Comments

telexfree-logoThe SEC filed its opposition to a Motion filed by Rodrigues to “Stay the Contempt Proceedings and Approve a Payment Plan”.  The problem is the Court had already Ordered him (December 2015) to return his TelexFree fraud money.

At the eleventh hour Rodrigues attempts to avoid the consequences of this Court’s orders by essentially making two arguments: 1) he should be allowed to avoid incarceration by promising to restore assets dissipated in violation of this Court’s order through a payment plan with no defined amounts over an infinite period of time; and 2) he can avoid incarceration because he has not violated bail in an unrelated visa fraud case. Neither of these arguments is availing. Instead, this Court should, based on its own inherent authority, order Rodrigues incarcerated until such time as he has complied with this Court’s order.

……

On December 18, 2015, this Court found Rodrigues in contempt and ordered him to restore $333,973 in dissipated assets as well as reconveyance three wrongfully transferred properties or provide the Court with a detailed plan as to how he would otherwise cure the contempt as to the properties. (ECF 359.) He was ordered to do so on or before January 15, 2016. On January 13, 2016, counsel for Rodrigues contacted the Commission seeking consent to an ill-defined payment plan. (Bernstein Dec. ¶ 4.) The Commission did not agree to the payment plan. (Id.) On the afternoon of January 14, 2016, the day before the court-ordered deadline, Rodrigues filed his motion.

….

His purported plan provides no details as to how much he would pay on a monthly basis, how long the payment plan would be in effect and/or any rationale as to why he should be allowed to retain 80% of the proceeds of any sales from the so-called videos and books that he plans to sell while remitting 20% toward the restoration of assets. The proposed payment plan is one more delaying tactic to avoid taking responsibility for returning money—most of which he obtained through the TelexFree fraud. He should not be able to avoid his responsibility by proposing a sham payment plan.

Rodrigues proposed that he use the proceeds of his “motivational books and videos” to comply with the Court’s Order, but his skewed view of things is that he keeps 80% of proceeds and gives the remaining 20% to pay off the $333,973 that the Court ordered him to return.

Rodrigues also believes that the Court cannot toss his butt in jail for Contempt because he is out on bail in an unrelated criminal Visa Fraud case. Let’s just say the Court disagrees with that illogical and misguided theory. Even more bizarre is his attorney seems to go along with this nonsense.

See you in jail soon, Sanderley!

TelexFree: Civil Case Stayed, but Sann Rodrigues in Civil Contempt of Court Order

Posted by ASDUpdates on December 21, 2015One Comment
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Rodrigues

newtelexfreelogoBack in August of 2015, the SEC filed a Motion to find Sann Rodrigues in Civil Contempt (1:14-cv-11858 Mass.) for repeated violations of the Temporary Restraining Order, Order Freezing Assets, and Order for Other Equitable Relief entered as to all defendants on April 14, 2014. After this filing, we have many documents filed by both the Plaintiff and Sanderley Rodrigues; many of Rodrigues’ filings were seemingly fabricated, like his inability to speak English even after he made several Youtube videos in English and his repeated insistence that he cannot provide the Ordered accounting without incriminating himself.

Judge Nathaniel Gorton has responded to this matter of Civil Contempt and has issued his “Memorandum and Order”:

This lawsuit has been stayed pending the resolution of a parallel criminal proceeding brought by the U.S. Department of Justice against two of Rodrigues’s co-defendants (U.S. v. Wanzeler, 14-cr-40028-TSH). Despite the stay, two orders currently remain in place against Rodrigues freezing his assets and requiring him to provide the SEC with a full accounting of his assets and transactions. On August 12, 2015 the SEC filed a motion to hold Rodrigues in contempt (Docket No. 313), claiming that Rodrigues has yet to comply with either order.

In its motion to hold Rodrigues in contempt, the SEC alleges that Rodrigues has violated the temporary restraining order and preliminary injunction in numerous ways, including: 1) conducting financial transactions through several shell companies, 2) withdrawing money from his personal accounts, 3) using an online payment service provider to conduct transactions with assets from accounts subject to the freeze, 4) opening new accounts at different banks and conducting
transactions through those accounts, 5) selling and purchasing luxury automobiles and 6) transferring real estate to a shell company.

The SEC alleges that Rodrigues was able to conduct those transactions in spite of the freeze because he had also violated the Court order requiring him to provide an accounting of all of his assets. That order required defendant to disclose to the SEC all bank accounts and other assets that were subject to his direct or indirect control as of the date of the original asset freeze. As a result of Rodrigues’s failure to comply with the accounting order, the SEC alleges, it was unaware of many of his assets and was unable to notify the custodial institutions.

On April 16, 2014, a Temporary Restraining Order was issued and required all defendants to submit an accounting identifying all assets or transfers larger than $500. Rodrigues failed to submit such information. The May 8th Preliminary Injunction reiterated this requirement and Rodrigues once again failed to submit the required accounting.

More than one year later, this Court entered the June 10, 2015 Order (“Order to Provide Accounting”) (Docket No. 304) . That order required Rodrigues to submit the original accounting, provide a list of current assets and describe all transactions over $500 that he had conducted since the TRO was entered. Rodrigues finally submitted an accounting on July 30, 2015.

While Rodrigues did provide “an accounting”, the SEC maintained the information he provided was “deficient in several ways”. The SEC somehow obtained the required information “through other means and therefore no longer seeks an order to have Rodrigues provide this information”.

Judge Gorton then addressed the Contempt Motion:

The Court may hold a party in civil contempt if the movant has shown that (1) the party to be held in contempt had notice of the violated order, (2) the order is clear and unambiguous, (3) the party to be held in contempt had the ability to comply with the order and (4) the party to be held in contempt actually violated the order. The moving party must prove these four points by clear and convincing evidence.

In this case, Rodrigues was notified of each of the orders entered against him. Those orders contained detailed and specific language as to the assets that were frozen and the information that Rodrigues was to provide in his accounting. The orders require defendant to leave untouched accounts under his direct or indirect control and to provide information on accounts under his control. The SEC has also provided numerous exhibits of documentary and testimonial evidence demonstrating specifically how defendant violated the orders.

Rodrigues tried to raise several arguments, disputing that he had actual notice of the orders, the first prong of defense. He also asserted that he was unable to comply with these orders because to do so he would have to waive his Fifth Amendment Rights against self-incrimination.

He further contends that if the Court were to hold him in contempt, he would be unable to purge the contempt without waiving his Fifth Amendment right.

Judge Gorton then eviscerates Rodrigues’ absurd arguments with this:

First, he asserts that the TRO and preliminary injunction are very complex and thus he was unable to understand them. Consequently, he avers, he was left without notice of the orders and therefore unable to comply with them. Second, defendant explains that he was unable to understand the orders due to his limited comprehension of English. Finally, he declares that he did not have assistance of counsel to aid him in understanding the orders until the deadlines for compliance with both the TRO and the preliminary injunction had passed, as evidenced by the fact that his counsel did not enter an appearance until June 13, 2014.

His arguments are unconvincing. Rodrigues was subject to a very similar temporary restraining order and preliminary injunction in a 2006 civil enforcement action also brought by the SEC. Thus, however complex were the requirements of the orders in this case, they were not unfamiliar. Furthermore, the fact that Rodrigues assented to the Order to Provide Accountings and Carve-Out demonstrates that he had sufficient notice. As to the language barrier, the SEC submitted an affidavit of a bank manager who frequently interacted with Rodrigues stating that Rodrigues speaks fluent English. It also submitted videos of Rodrigues speaking English.

While Rodrigues did not retain counsel until after the temporary restraining order and preliminary injunction had been entered/ he was represented at the time he consented to the Order to Provide Accountings. Thereafter, it took him more than 13 months to file his first response and even then he did not restore all of the assets removed in violation of the asset freeze. Thus, lack of  representation does not suffice as an excuse for his lack of compliance.

In a supplemental memorandum submitted to the Court, Rodrigues has also argued that he did not have actual notice of the April 23, 2014 and April 25, 2014 extensions of the TRO. Because the Court, at a hearing held on October 16, 2015, made a finding of fact that Rodrigues had actual notice of those extensions, that argument will be discredited here.

Judge Gorton next addresses the Fifth Amendment Privilege argument (I skipped the case law references and went straight to the decision): {emphasis added}

Finally, by signing the Order to Provide Accountings, defendant waived his Fifth Amendment privilege against production with respect to certain potentially incriminating asset information. Because defendant has already agreed to disclose that information, he may not raise a Fifth Amendment
defense against such disclosure through different means. Thus, defendant has also waived his Fifth Amendment privilege with respect to the restoration of assets dissipated in violation of the TRO and the May 8, 2014 Preliminary Injunction. By restoring such assets, Rodrigues would reveal only the same information that would have been revealed by the accounting
which he agreed to provide.

Although the Order to Provide Accountings did not address Rodrigues’s separate obligation related to the asset freeze, his consent to provide the information in the accounting waived his Fifth Amendment privilege with respect to that information regardless of the means through which it is disclosed. It is therefore iiranaterial that the SEC no longer requests that the
Court hold defendant in contempt for his failure to provide an accounting. Ordering Rodrigues to purge his contempt of the asset freeze by restoring dissipated assets will not force him to divulge protected information because he has already waived his right to protection under the Fifth Amendment with respect to that information.

The Court finds that the legal standard for civil contempt has been met and that defendant is not entitled to assert a Fifth Amendment privilege in support of his noncompliance with existing orders.

ORDER
In accordance with the foregoing, plaintiff’s motion to hold defendant Sanderley Rodrigues de Vasconcelos in contempt (Docket No. 313) is ALLOWED. Sanctions will, however, be held in abeyance for the time being.

Defendant shall, on or before January 15, 2016, restore all funds and other assets transferred or disposed of in violation of the asset freeze as follows:

(a) restore the following funds that he dissipated either through removing cash from accounts or selling cars:

(i) $211,473   withdrawn from JP Morgan account XXXX7958,
(ii) $ 21,600 withdrawn from BMO Harris accounts for SMA Logistics and ZVX Investment,
(iii) $ 22,200 received with respect to the sale of the 2007 Mercedes Benz CLS and
(iv) $ 79,700 received with respect to the sale of the Ferrari F340;
$334,973 Total; and

(b) with respect to the wrongfully transferred properties in West Palm Beach, Florida at 1103 18th Street 1, 1014 17th Street and 711 Division Ave., defendant shall either obtain the reconveyance of those properties, remit funds equal to the market value thereof or provide the Court with a detailed plan as to how he will otherwise cure his contempt in relation to the transfer of those properties.

In default of full compliance with the provisions of sub-paragraphs (a) and (b) hereof, defendant’s bail will be revoked and he will be incarcerated for contempt of orders of this Court.

Sann Rodrigues: Meeting Scheduled With SEC in Boston

Posted by ASDUpdates on November 6, 2015No Comments

sann-rodrigues-top-telexfree-investorFiled in both the SEC Civil case (14-cv-11858) and the Criminal Case (15-cr-10227), notices were filed detailing an upcoming trip to Boston on November 20-21, 2015.

The accompanying “ASSENTED/AGREED MOTION FOR ORDER” goes on to say:

Mr. Rodrigues is scheduled to appear at an in person meeting with the United States Attorney’s Office and the Securities and Exchange Commission and their respective counsel, representatives and investigators on November 20, 2015 beginning at approximately 10 A.M. and concluding at an undetermined time that same day. The meeting is to take place at the United States Attorney’s Office located at John Joseph Moakley U.S. Courthouse, One Courthouse Way, Suite 9200 Boston, MA. 02210.

Robert Eckard and associate, Attorney Fauzia Makar, will be attending the meeting with Mr. Rodrigues and will be traveling on the same flight.

(Mr. Rodrigues is restricted from traveling outside of his home without prior court approval.)

Pretrial Services in Tampa is currently in possession of Mr. Rodrigues’ Florida driver’s license. Without proper identification, Mr. Rodrigues cannot board an airplane to attend the meeting in Boston, Massachusetts.

The assigned Assistant United States Attorney, Mr. Cory Flashner does not object, nor does pretrial services officer Ms. Daia Jung (Tampa), to pretrial services releasing Mr. Rodrigues’ driver’s license directly to the undersigned attorney for purposes of Mr. Rodrigues’ travel stated herein.

Eckard agreed to retain possession of Mr. Rodrigues’ driver’s license through the duration of the travel and will return Mr. Rodrigues’ driver’s license to the Tampa Office of Pretrial services as soon as practicable the following Monday, November 23, 2015.

TelexFree: Judge Denies Motion from Rodrigues’ New Attorney

Posted by ASDUpdates on October 20, 2015No Comments
10/20/2015 348 Electronic Clerk’s Notes for proceedings held before Judge Nathaniel M. Gorton: Motion Hearing held on 10/20/2015 re 313 MOTION for Contempt as to Defendant Sanderley Rodrigues de Vasconcelos filed by Securities and Exchange Commission. The Court hears arguments from the parties and takes the matter under advisement regarding the 313 Motion for Contempt. The Court treats the 332 Letter Submitted to the Court by Robert Eckard as a motion to stay and the motion is denied. (Court Reporter: Debra Lajoie at ylajoied@yahoo.com.)(Attorneys present: For the Plaintiff: Deena R. Bernstein; For the Defendant: Robert Eckard and Fauzia Makar by telephone) (Danieli, Chris) (Entered: 10/20/2015)