Federal agents from the FBI and Homeland Security have raided the Marlborough headquarters of TelexFree Inc. in the intensifying investigation of an alleged billion-dollar scheme that has the potential to rank among the largest international financial frauds.
Regulators accused the company, which sells Internet telephone services, of luring investors from immigrant communities who sometimes put in their life savings. Some distraught victims have threatened suicide.
Federal agents acting on a search warrant combed the TelexFree office on Tuesday, the Department of Justice said. Authorities in other countries have reportedly been conducting fraud and money laundering investigations involving TelexFree.
The action this week by US authorities was triggered by TelexFree’s decision to file for federal bankruptcy protection in Nevada on Monday. Securities regulators in Massachusetts filed a civil lawsuit against the company the next day, accusing TelexFree of a $90 million fraud in the Commonwealth and $1 billion around the world. Secretary of State William F. Galvin said the company mainly targeted Brazilian immigrant communities in Massachusetts.
Galvin’s office alleged that TelexFree attracted tens of thousands of investors by offering annual returns of up to 250 percent in return for putting money into the company and agreeing to place online ads to promote its Internet telephone service.
Related: Galvin charges phone-service company with $90m fraud
He's a good guy, that Galvin.
Carlos A.F. Da Silva, a community activist on the South Shore for the Brazilian community, said he and others have been aware of TelexFree’s deep infiltration into immigrant circles for some time.
“I have warned people that this type of business was dangerous, that they should not get involved with it,’’ he said.
TelexFree was shut down in Brazil last June, after a judge ruled the operation a fraud, setting off a slow wave of worry across the company’s tens of thousands of investors around the world. The company is under investigation for money laundering in Brazil and the Dominican Republic, according to news reports, and is being investigated in countries as far away as Rwanda and Uganda.
Panicked investors e-mailed The Boston Globe this week from Ecuador, Spain, the Netherlands and South Africa, and from all over Massachusetts and several US states. Radio stations that carry Portuguese broadcasts in the Boston area were flooded with calls from listeners who lost their life savings with TelexFree.
TelexFree drew people in by the thousands with the allure of easy profits based on a business that seemed plausible to many: Internet phone service that provided for inexpensive international calls. The company appears to have preyed on a hard-working immigrant culture of saving money and staying in touch with family from their home countries.
Alleged victims said in interviews and court documents that they have lost vast sums with the company, from a single mother in Revere who invested $9,000, partly using her tax refund, to large creditors listed in the bankruptcy filing, who claim to be owed hundreds of thousands of dollars. The largest creditor, a Boston resident, lists a claim of $1.3 million.
The company has denied the allegations in press releases and online videos distributed in several countries. Mark A. Berthiaume of Greenberg Traurig, a white-collar criminal defense lawyer representing the company, did not respond to requests for comment.
Regulators and victims described a vast fraud.
**************
Some US clients grew alarmed last month when the company began to tighten rules on withdrawing funds from their investment accounts. They were told they had to invest more money to take out earlier deposits. Victims, many of whom are undocumented immigrants, said they feared the risk of deportation if they complained to authorities.
Meanwhile, some large clients got an extra dose of wooing, they said, to assuage their concerns about a new and less attractive “compensation” plan. In Atlanta, large investors were invited to a conference and Millionaires Black & White Ball last month.
Authorities around the world have been investigating TelexFree since at least last summer. Months before US officials acted, the police in the British channel island of Guernsey warned residents about TelexFree on their Facebook page. Police in the nearby island of Jersey also issued a warning in February, asking people to call the Joint Financial Crimes Unit if they were contacted by the company.
The MetroWest Daily News first reported Homeland Security’s investigation Tuesday. A distribution list for filings in TelexFree’s bankruptcy case included US Attorney General Eric Holder, the IRS, and the secretary of the Treasury. Attorneys general in Massachusetts and Nevada also were alerted.
Galvin, the Massachusetts regulator, moved swiftly after the bankruptcy filing, fearful that victims’ assets were at risk. The Securities and Exchange Commission, which has the power to freeze the company’s assets, has been slower to act despite the alleged involvement of a promoter the commission previously sanctioned for preying on Brazilian immigrants in the Framingham area.
You $ee? Nothing has really changed despite what happened five years ago.
The SEC in 2006 won a case against Sann Rodrigues, whose real name is Sanderley R. De Vasconcelos, for operating a fraudulent prepaid phone card venture called FoneClub. His firm was ordered to repay $1.6 million, but the former Revere resident was not personally fined, according to SEC records. The men who Galvin says control TelexFree, Carlos N. Wanzeler of Northborough, and James M. Merrill of Ashland, have not been charged with any wrongdoing.
The company’s US website was taken down Tuesday. A version was still live in Canada, touting the wealth participants could garner if they invest. A banner across the top of the page reads, “It’s not a chance unless you take it.’’
“TelexFree is already creating MILLIONAIRES and now is YOUR turn to take advantage of the timing and explosive growth happening in TelexFREE,’’ the website says. “In a very short time with the debut of the TelexFREE business model in Brasil, there have been a number of individuals who have achieved millionaire status.’’
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At least you are not getting deported:
"Court deportations drop 43% in last five years" by Julia Preston | New York Times April 17, 2014
New deportation cases brought by the Obama administration in the nation’s immigration courts have been declining steadily since 2009, and judges have increasingly ruled against deportations, leading to a 43 percent drop in the number of deportations through the courts in the last five years, according to Justice Department statistics released Wednesday....
The statistics present a different picture of President Obama’s enforcement policies than the one painted by many immigrant advocates, who have assailed the president as the “deporter in chief” and accused him of rushing to reach a record of 2 million deportations. While Obama has deported more foreigners than any other president, the pace of deportations has recently declined.
The steepest drop in deportations filed in the courts came after 2011, when the administration began to apply more aggressively a policy of prosecutorial discretion that officials said would lead to fewer deportations of illegal immigrants who had no criminal record....
In the polarized debate over immigration, the court figures do not suggest that there has been any wholesale retreat from enforcement by the administration, as many Republican lawmakers contend. Rather, more immigrants are seeking lawyers and fighting deportations, leading to longer and more complex cases for immigration judges to weigh.
The number of deportations ordered by immigration courts is only a portion of total deportations in a given year. But the lower numbers from the courts contributed to a drop in overall deportations last year....
Court officials said the apparent paradox of a shrinking new caseload coinciding with a swelling backlog was primarily a result of the severe budget cuts imposed by Congress last year, which prevented the courts from hiring judges and support staff. The reduced corps of judges could not keep up with the new cases, much less dig into the backlog....
See: Quick Immigration Hearing
You may be waiting a while.
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NEXT DAY UPDATE:
Not only are these protesters ungrateful spewers of propaganda, they are controlled opposition or dupes meant to appear in my agenda-pushing paper to manipulate minds and show AmeriKan freedom to dissent; however, regardless of your stance on the immigration issue take a good look at the face of AmeriKan tyranny.
Police arrested 19 activists who blocked the entrance to the Suffolk
County House of Correction to protest the deportation of immigrants
charged with minor offenses (David L Ryan/Globe Staff).
I'm sure the well-meaning kids will be let go with no charges, but you know.... meet the heavy hand of law enforcement and its security services decked out in all it's gloriou$ gear.
Here is the face of censorship!
"19 immigrant-rights activists arrested at Suffolk jail" by Maria Sacchetti | Globe Staff April 17, 2014
Nineteen advocates for immigrants were arrested today after blocking the entrance to the Suffolk County House of Correction in Boston as they demanded a halt to deportations, according to protest organizers.
My printed paper article that has been completely scrubbed from the web says "dramatic call" but that's the least of my problems.
I'm surprised to see them call it house of corrections, too. I was told purpose is to punish.
The advocates were handcuffed before being led to a Suffolk County sheriff’s van.
That sentence was nowhere to be seen in print. Let the hand-typed print begin (along with some anger at making me waste time! Why the cover-up, Globe?)
Advocates have held vigils at the Boston jail for years, but on Thursday, men and women knelt in front of the jail's main entrance, locked arms, and refused to budge despite officers orders to move.
That was my second paragraph, and the paths diverge further from here as the order is juggled around. I will bring you what I have in print order first, and will italicize any portions you will only find here(?).
“We’re saying enough of deportations, “ shouted Gladys Vega,
Did they cut that because this:
"nonprofits provide new ways for corporations and individuals to influence"
And we all know the wealthy and elite like cheap illegals for labor.
More than 150 others walked a picket line, holding signs, singing and praying. Earlier, protesters had chanted, “Shut down ICE” and “Shame on Suffolk County,” which jails immigrants for deportation in the same complex as criminals,
That's where the more-or-less verbatim match ends and I'm four paragraphs in.
as they locked arms in front of the entrance, with guards blocking the door.
“We fully respect people’s rights to free speech and peaceful protest, but when that protest infringes upon the safe and secure operation of our facility, we are obliged to take appropriate action,” said Peter Van Delft, a spokesman for the sheriff’s office.
That is all new because he is not mentioned at all in print.
Back to it:
The
The protesters blocking the door sat in front of a banner on the ground that bore Obama’s face said, “Not One More,” in both English and Spanish.
The
Advocates say they also want the state Legislature to pass a bill that would limit the immigrants state officials turn over to ICE for deportations.
Completely left on the the cutting room floor:
One protester held a sign calling Obama the "reporter in chief" for presiding over roughly 2 million deportations since he took office, even as he fights for a path to citizenship for immigrants here illegally.
Forgive me for not trusting those that need lies to get their agenda across.
Besides Vega, among those arrested Thursday were Maria Peniche, a college student from Mexico who grew up in Revere; Andres del Castillo, the American son of Colombian immigrants who was raised in Winthrop; and Peter Knowlton, a labor leader in Massachusetts.
Well, the Globe certainly knows who... is Peniche
www.boston.com/news/nation/2013/08/.../story.html
The Boston Globe Aug 7, 2013 - It's a big surprise,'' said 22-year-old Maria Peniche, one of the nine activists. According to the Executive Office for Immigration Review — the ...
Which is weird because the Globe obviously knows who she whoops(?)!! I'm having flashbacks, folks.
A spokesman four Suffolk County Sheriff Steven Tompkins said police arrested the protesters on charges of disorderly conduct and trespassing.
Immigration and Customs Enforcement sayid the agency is carrying out its duties.
"While we continue to work with Congress to enact commonsense immigration reform, ICE remains committed to sensible, effective immigration enforcement that focuses on its priorities, including convicted criminals and other public safety threats," spokesman Daniel Modricker said.
Globe won an award for series on how they release murderers and rapists, but that's down the memory hole and how dare I question pronouncements from government?
Groups that favor tougher immigration laws say the rising deportations reflect a small percentage of those who are here illegally. Last year's federal records show that most deportees were recent border crossers or criminals, both among ICE's top priorities.
"It's unrealistic to expect that enforcement can be scaled back much more than it already has been," said Jessica Vaughn, director of policy studies for the Center for Immigration Studies, a Washington think tank.
That got me thinking.
Peniche, 23, came to the United States from Mexico when she was 10, brought illegally across the border with her parents. They raised Peniche and her brother in Revere, but despite getting good grades, Peniche was ineligible for college financial aid. In 2012, the family returned to Mexico.
A few days after they left, President Obama granted temporary legal residency to students such as Peniche.
The family later returned to the United States, and they are seeking asylum. Since then, both Peniche and her parents have been detained after separate acts of civil disobedience.
"I know what it is like to be treated like a criminal without doing anything," Peniche told the crowd Thursday before her arrest. "My family deserves to be together."
Not to be a poop, but just wondering what part of illegal isn't a crime again?
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Related: Democrats Dick Around on Immigration
They have become so desperate over the fall elections they are now playing the race card.
Pathetic.
NEXT DAY UPDATE:
Keeps on coming in, tick, tick, tick, tick....
"SEC freezes assets of firm, 8 people in fraud probe" by Beth Healy | Globe Staff April 17, 2014
As federal agents searched the Marlborough headquarters of TelexFree Inc. this week, the company’s chief financial officer tried to flee with a laptop and a bag holding cashier’s checks worth nearly $38 million, according to court records made public Thursday.
The Securities and Exchange Commission said it has frozen the assets of TelexFree and eight principals and associates, alleging the company has been running an “illegal pyramid scheme’’ that recruited victims from around the world.
So? We have an economy based on it.
Regulators said the company and its top promoters had raised $300 million by targeting Brazilian and Dominican communities in Massachusetts and 20 other states.
“The defendants are continuing to enroll new investors every day, but it is clear the pyramid has collapsed,’’ the SEC said in its complaint.
As it soon will be for the AmeriKan economy.
The SEC found that TelexFree produced just $1.3 million in actual revenue for Internet phone services, a sliver of the $1.1 billion it allegedly promised investors, who were told they would reap generous returns if they placed online ads touting the service.
“TelexFree has been a money-making machine for the defendants,’’ the SEC said in its complaint. Since mid-November, the company’s financial records show it has transferred $30 million to the principals or their affiliated companies, the SEC alleged. Tens of millions more in customer funds are currently unaccounted for, the SEC said.
The SEC’s lawsuit says the group of principals and promoters allegedly behind TelexFree include the former company president who ran a cleaning business out of his Ashland home and a certified public accountant from Indiana.
TelexFree filed for bankruptcy protection in a federal court in Nevada Monday. FBI and Homeland Security agents raided the company’s offices in Marlborough the next day. During the agents’ search of the offices, chief financial officer Joseph H. Craft was stopped by a deputy sheriff as he sought to leave. He told the deputy he was merely a consultant, helping TelexFree prepare its bankruptcy case, according to one of the SEC’s court filings.
The SEC found that executives of the company have been trying to transfer millions of dollars out of TelexFree to themselves or other entities in recent days and weeks. It received a judge’s approval to freeze the company’s assets on Wednesday.
The cashier’s checks seized during the raid were made out to various principals and TelexFree entities, according to the SEC filing. Five of them were made out to TelexFree LLC, in Nevada, for $25.5 million, and one, for $2 million, was made out to Katia B. Wanzeler, who is believed to be the wife of co-owner Carlos N. Wanzeler of Northborough.A $10.4 million check was made out to TelexFree Dominicana, according to the court filing.
On April 16, the day after authorities searched the Marlborough office, co-owner James M. Merrill submitted an order with his brokerage firm to sell $1.2 million of his mutual fund holdings, an SEC attorney learned, according to a court document.
TelexFree’s fortunes have been in peril for months. In June, the company’s Brazil operation was shut down by a judge who said TelexFree was a fraud; investigations of money laundering and other alleged wrongdoing are underway in several countries.
Still, thousands of people in the United States have continued to participate in the company, many of them from Brazilian immigrant communities.
Participants invested in membership “accounts” of $289 or $1,375 and were told to go online every day to approve one or five Internet ads, and receive annual returns as high as 250 percent.
In March, TelexFree’s finances had begun to crumble, regulators alleged, yet the company still kept pressing investors to put in more cash.
“Even after the SEC and other regulators have alleged that such programs are a fraud, the promoters of TelexFree continued selling the false promise of easy money,’’ Paul G. Levenson, director of the SEC’s Boston regional office, said in a statement Thursday.
The SEC’s fraud complaint names owners Merrill, 52, of Ashland, and Wanzeler, 45, as well as Sanderley Rodrigues de Vasconcelos, a promoter known better as Sann Rodrigues, who is 42 and used to live in Revere. The SEC said he now lives in Davenport, Fla. He was previously sanctioned by federal securities regulators in 2006 for defrauding Brazilian immigrants in the Framingham area through a prepaid phone card outfit called FoneClub.
Also named in the complaint are four of the company’s top promoters: Steven M. Labriola, 53 of Northbridge; Santiago De La Rosa, 42, of Lynn; Randy N. Crosby, 51, of Alpharetta, Ga., and Faith R. Sloan, 51, of Chicago. Craft, an accountant who serves as financial chief according to the SEC’s complaint, is 50 and lives in Boonville, Ind.
None of the people were available for comment. A lawyer representing the company has not responded to calls or e-mailed requests for comment.
The SEC lawsuit is a civil complaint. The regulator wants the company to stop soliciting investors, return any ill-gotten gains, and pay penalties.
Secretary of State William F. Galvin sued Tuesday, alleging the firm defrauded Massachusetts residents of $90 million.
The alleged fraud appears to be global, with tens of thousands of people from Brazil to Spain to Africa affected.
Three other entities also are named in the SEC’s complaint: TelexFree Financial Inc., TelexElectric, and Telex Mobile Holdings Inc.
Nothing about SEC slowness, of course.
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And here is another thing to consider. The federal government is going to bat against this fraud against immigrants while allowing the Wall $treet banking $y$tem to operate its far more harmful frauds with tap on the wrist fines.
I'm not excusing this set of looters; I'm just saying they are small fry and maybe some should be to send a message. Enough pu$$y-footing around by my $lavish government. Start executing some and watch the fraud dry up.
