USFIA: Consent to Enter Final Judgment

You can find the entire document here 194.

(emphasis added)

orders the Entity Defendants to pay disgorgement in the amount of $135,598,118.47, plus prejudgment interest thereon in the amount of $9,811,646.50, the payments of which will be deemed satisfied by the amounts recovered and distributed by the court-appointed receiver as set to be set forth in the receiver’s final report and accounting to the Court.

TelexFree – Brazilian National Hid $20 Million in Box Spring

Department of Justice
U.S. Attorney’s Office
District of Massachusetts

FOR IMMEDIATE RELEASE
Thursday, January 5, 2017

Agents Seize Approximately $20 Million and Arrest Brazilian National in Scheme to Launder TelexFree Funds

BOSTON –Approximately $20 million in cash hidden inside a box spring in a Westborough, Mass. apartment, was seized late yesterday, and a Brazilian man was arrested in connection with conspiring to launder proceeds of the massive TelexFree pyramid scheme.

Cleber Rene Rizerio Rocha, 28, was charged in a criminal complaint with one count of conspiring to commit money laundering. Rocha was detained following an appearance today before U.S. District Court Magistrate Judge Judith G. Dein.

According to the complaint, in April 2014, federal agents searched the headquarters of TelexFree, Inc., in Marlborough, Mass. Later that day, Carlos Wanzeler, one of the founders of the company, allegedly fled to Brazil, his native country, where he has remained. Wanzeler and TelexFree co-founder James Merrill were indicted in July 2014 on charges that they operated TelexFree as a massive pyramid scheme. Merrill pleaded guilty to those charges in October 2016 and is awaiting sentencing.

The complaint alleges that an intermediary working on Wanzeler’s behalf contacted an associate for help transferring millions of dollars of TelexFree money – still hidden in the greater Boston area – from the United States to Brazil. The associate, who subsequently became a cooperating witness for the government, allegedly arranged with Wanzeler’s nephew in Brazil to launder the cash through Hong Kong, convert it to Brazilian reals, and transfer it to Brazilian accounts.

According to court documents, Rocha, acting as a courier for Wanzeler’s nephew, flew from Brazil to JFK Airport in New York City a few days ago. Yesterday, Rocha met the cooperating witness at a restaurant in Hudson, Mass., and allegedly gave him $2.2 million in a suitcase. After the meeting, agents followed Rocha to an apartment complex in Westborough, Mass., and later arrested him. That night, federal agents searched an apartment at the Westborough complex and seized a massive stockpile of cash hidden in a box spring. The cash appears to total approximately $20 million.

The charging statute provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $250,000 or twice the gross gain or loss, whichever is greater. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.

United States Attorney Carmen M. Ortiz and Matthew Etre, Special Agent in Charge of Homeland Security Investigations in Boston, made the announcement today. Assistant U.S. Attorneys Andrew E. Lelling and Neil J. Gallagher, Jr., of Ortiz’s Economic Crimes Unit are prosecuting the case.

The details in the complaint are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

USFIA – Judge Orders Summary Judgment Against Steve Chen

Although this document was entered on December 8th, I was asked to post a link for those interested in its contents. The SEC made a Motion for Summary Judgment and Injunctive Relief was Granted, including the following:

Chen is permanently restrained and enjoined from violating Section 5(a) and (c) of the Securities Act [15 U.S.C. § 77e] directly or indirectly

this Order by personal service or otherwise: (a) Chen’s officers, agents, servants, employees, and attorneys; and (b) other persons in active concert or participation with Chen or with anyone described in (a).

Chen is

permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder  by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security.

 

 

Defendant shall pay disgorgement of ill-gotten gains, prejudgment interest thereon, and a civil penalty pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)]. The Court shall determine the amounts of the disgorgement and civil penalty upon motion of the Commission.

Here’s a link to the full document.


On December 19th, there was a PreTrial Conference held with Judge Klausner presiding. Here’s the Minutes from that Conference:

Case called. Court and counsel confer. Also present are Thomas A. Seamon, Receiver and David R. Zaro, counsel for the Receiver.

The Court will not vacate Order on Motion for Summary Judgment. The Court orders counsel to meet and confer to discuss further settlement and to return at 10:15 a.m.

Case recalled. The Court and counsel confer. Settlement was not reached. Jury Trial shall remain on calendar for January 10, 2017 at 9:00 a.m. Counsel shall file aw witness list pertaining to the issue of damages only.

 

 

Zeek Rewards: Judge Orders “Final Judgments”

Based on Kenneth Bell’s Motion for Final Judgments for a group of “Net Winners”, Judge Mullen has issued an Order as follows:

THIS MATTER comes before the Court on the Receiver’s Motion to Enter Judgment and to Confirm Judgments as Final.

 
For good cause shown, the Motion is hereby GRANTED and the Final Judgments requested shall be entered as filed.

So far, three (3) Final Judgments have been entered today:

  • Final Judgment is hereby entered against Defendants David Kettner, Mary Kettner, Kettner & Associates, LLC and Desert Oasis International Marketing, LLC (The Kettner Defendants) jointly and severally, in the amount of $1,259,114.65 which is comprised of $937,529.27 in net winnings from the ZeekRewards scheme and $321,585.38 in prejudgment interest
  • Final Judgment is hereby entered against Defendants T. Lemont Silver, Sr., Karen Silver, and Global Internet Formula, Inc., (The Silver Defendants) jointly and severally, in the amount of $3,141,668.09, which is comprised of $2,339,267.35 in net winnings from the ZeekRewards scheme and $802,400.74 in prejudgment interest
  • Final Judgment is hereby entered against Defendant Durant Brockett in the amount of $2,312,129.25, which is comprised of $1,721,597.67 in net winnings from the ZeekRewards scheme and $590,531.58 in prejudgment interest

Zeek Rewards: Judge Enters Final Judgments Against 3 “Net Winners”

Judge Mullen has ordered Final Judgments against 3 of the “net winners”, with more likely to follow.

Kenneth Bell has also filed for Final Judgments against:

  • Defendant Rhonda Gates in the amount of $1,916,479.07
  • Defendants T. Lemont Silver, Sr., Karen Silver, and Global Internet Formula, Inc., jointly and severally, in the amount of $3,141,668.09
  • Defendant Durant Brockett in the amount of $2,312,129.25, and
  • Defendants David Kettner, Mary Kettner, Kettner & Associates, LLC and Desert Oasis International Marketing, LLC jointly and severally, in the amount of $1,259,114.65

As of today, only these Defendants have had Final Judgments ordered, as follows:

Final Judgment is hereby entered against Defendant Jerry Napier in the amount of $2,349,670.59, which is comprised of $1,749,550.73 in net winnings from the ZeekRewards scheme and $600,119.86 in prejudgment interest, calculated at the North Carolina statutory rate of 8% per annum from August 17, 2012, which is on or after the date of the last fraudulent transfer payment to each Defendant, to November 29, 2016, the date of the Summary Judgment Order in this action.

Final Judgment is hereby entered against Defendant Darren Miller in the amount of $2,198,738.44, which is comprised of $1,637,167.55 in net winnings from the ZeekRewards scheme and $561,570.89 in prejudgment interest, calculated at the North Carolina statutory rate of 8% per annum from August 17, 2012, which is on or after the date of the last fraudulent transfer payment to each Defendant, to November 29, 2016, the date of the Summary Judgment Order in this action.

Final Judgment is hereby entered against Defendants Aaron Andrews, Shara Andrews, and Innovation Marketing, LLC, (The Andrews Defendants) jointly and severally, in the amount of $1,359,897.50 which is comprised of $1,012,571.58 in net winnings from the ZeekRewards scheme and $347,325.92 in prejudgment interest, calculated at the North Carolina statutory rate of 8% per annum from August 17, 2012, which is on or after the date of the last fraudulent transfer payment to each Defendant, to November 29, 2016, the date of the Summary Judgment Order in this action.

Zeek Receiver Announcement for December 9th

ANNOUNCEMENT FROM THE RECEIVER – December 9, 2016

On November 10, 2016 the Court granted the Receiver’s motion to disallow and forfeit recognized claims if the claimant does not electronically sign the required Release and OFAC certification by December 31, 2016. All claimants who fall into this category received emails on October 1, November 1 and December 1 asking them to complete the process. They received another email from the Receiver today making a personal appeal for them to sign the forms online. These claimants must follow these steps:

  1. Log into the online claim portal at https://cert.gardencitygroup.com/zrwdet/fs/home. If you have forgotten your Registration ID and/or password, you can retrieve them by clicking on the link directly below the login box labeled “Click here if you have forgotten your Registration ID or Password.”
  2. Once logged in, click the button “Proceed with claim completion process” on the Claimant Summary page under the Claim Status section of that page (it is in the center of the page you reach upon logging in).
  3. Review the Declaration and Release. To complete and submit the Declaration and Release, check the box that states “I certify under penalty of perjury that the foregoing is true and correct” type your first and last name in the electronic signature of claimant box, and then click the “I Agree and Electronically Sign the Declaration and Release” button.
  4. Review the OFAC Certification. To complete and submit the OFAC Certification, check the box that states “I certify under penalty of perjury that the foregoing is true and correct,” type your first and last name in the electronic signature of claimant box, and then click the “Confirm Certification” button.
  5. Confirm or update your contact information for payment.
  6. Click the “Complete Claim Determination Process” button.
  7. You have now completed the submission of your Release and OFAC Certification. You may logout of the online claim portal or return to the Claimant Summary page.

For further assistance completing the OFAC Certification screen, please view the instructional video found here: http://www.zeekrewardsreceivership.com/OFACandRelease.

Failure to complete this process by December 31, 2016 will result in forfeiture of claim, meaning a distribution check will never be issued.

AFFILIATES WHO HAVE ALREADY RECEIVED A DISTRIBUTION DO NOT NEED TO DO ANYTHING FURTHER IN ORDER TO BE ELIGIBLE TO RECEIVE ANY SUBSEQUENT DISTRIBUTION THAT THE RECEIVER MAY MAKE. Those affiliates have already completed the required process.

This is not a new opportunity to file a claim. The time to make a claim ended on September 5, 2013 by order of the Court. Please do not attempt to file a claim now.

Zeek Rewards: Judge Mullen Grants Default Judgement in ‘Bell v Disner et al’

zeekrewardsIn case filed by the Zeek Receiver, Kenneth Bell, the receivership filed  civil suit against what were called “Net Winners” in the Zeek scam which garnered $1000 or more from the scheme. The list of Defendants included a large number of serial promoters of this type of pyramid/Ponzi scheme such as:

Todd Disner, Trudy Gilmond, Jerry Napier, Daren Miller, Rhonda Gates, David Sorrells, Aaron and Shara Andrews, T. Lemont Silver, Karen Silver, Michael Van Leeuwen, Duran Brockett, David and Mary Kettner and a “Defendant Class of Net Winners”.

Several of the individuals above were involved in ASD and other scams prior to promoting Zeek and bilking thousands of people on the false hopes of becoming rich with little or no effort. The majority of these defendants have already received judgments which resulted in them having to return monies to the receivership to be distributed to the victims.

The problem with scams like Zeek is the money was actually made from recruiting others, not from sales of products of services. Sadly, a new one pops up almost every day.

You can read the 27 page order, wherein the Judge details the reasons for his decision and a background on the scam by clicking the link. There is also a list of the “Net Winners” on the site.

Zeek Rewards: Judge Grants Motion to Disallow Incomplete Claims and Forfeit Distributions

zeekrewardsOn March 26, 2014, the Court approved the Receiver’s Motion for an “Order Approving Distribution Procedures and Certain Other Related Relief” (Doc 199) and issued that order. In it, the Court specified the manner that the Receiver had the authority to settle claims, establish claims procedures and also appointed a “special master”, retired Judge Frank W. Bullock, Jr., to oversee any objections by claimants, and a method to appeal the determination of the Special Master.

On November 3, 2016, the Receiver filed a Motion to Disallow claims that were not filed properly by the deadline of December 31, 2016. Today, Judge Mullen granted that motion:

THIS MATTER is before the Court upon the Receiver’s Motion to Affirm the Disallowance of Claims and Forfeit of Distributions on account of such Claims for the failure by Affiliates to submit an OFAC Certification and Required Release pursuant to the Order Approving Distribution Procedures and Certain Other Related Relief (Doc. No. 199) (the “Motion”). The Court, having considered the Motion, the proceedings that have occurred in this Case, and the relevant case law, and after due deliberation and sufficient cause having been shown, Grants the Motion in all respects.

 
IT IS, THEREFORE, ORDERED that pursuant to Paragraph 37 of the Order, the Receiver may deem any claim of a Subject Affiliate that has failed to submit the Required Information by11:59 p.m., Eastern time, on December 31, 2016, as disallowed and the distribution to be made on account of any such claim as forfeited.

 
IT IS FURTHER ORDERED that the Receiver shall release any amounts held in reserve on account of a disallowed claim to the general pool of assets from which distributions will be made to holders’ of Allowed Claims.

 
IT IS FURTHER ORDERED that the Receiver may make limited exceptions to the disallowance of a claim and the forfeiture of the distributions on account of such claim for cause, in his sole discretion, at any time prior to making a final Distribution, but only in the event that such Subject Affiliate also provides the Required Information.

 
Signed: November 10, 2016

 

TelexFree: SEC Status Report on Civil Case 14-cv-11858

telexfree-logoPerhaps I am confused or maybe it is a misprint, but this is the Status Report in the TelexFree civil case brought by the SEC:

 

Status Report

 
Plaintiff Securities and Exchange Commission hereby informs the Court that, yesterday, October 24, 2016, in United States District Court for the District of Massachusetts, defendant James Merrill entered a guilty plea in the criminal case USA v. Wanzeler, et al. (D. Mass. 4:14-cr- 40028) pending before Judge Hillman. The Court did not accept Merrill’s guilty plea at that time and has scheduled sentencing for February 2, 2017. The other criminal defendant, Carlos Wanzeler, fled to Brazil upon learning of the federal charges filed against him where he remains. There is currently still a federal warrant for his arrest.

 
Respectfully submitted,
/s/ Deena R. Bernstein
Deena R. Bernstein (Mass. Bar No. 558721)
Attorney for Plaintiff
SECURITIES AND EXCHANGE COMMISSION

Yep, it says that the court did not accept Merrill’s guilty plea at that time.  OK, then why did they schedule sentencing?

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