Victims of the largest pyramid scheme in United States history received justice yesterday when a United States District Court allowed their claims against several of the largest banks in the world and other financial service providers to proceed. Robert Bonsignore, Lead Counsel for the victims, stated “The Court’s ruling allowing the victim’s claims to go forward was a very long, and very hard-fought victory.”
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Bonsignore further stated that “TelexFree fleeced over a million victims of over $4 billion dollars in less than four years.” “This was not accomplished in a vacuum. TelexFree was a 100 percent financial fraud driven criminal enterprise that set off red flags and alerts to its Electronic Banking System sponsors and facilitators. By its own admission, without access to the Electronic Banking System, TelexFree would have collapsed and been forced to close its doors within three months.”
Bonsignore praised the court and the decision stating “Judge Timothy Hillman was required to go through massive amounts of briefing and evidence to dissect this highly complex, international financial fraud. The Court’s opinion was well-reasoned and factually supported.” The order allows the claims against Bank of America, TD Bank, PNC Bank, Wells Fargo Bank, PricewaterhouseCoopers and various payment processing companies to be prosecuted.
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TelexFree held itself out as an internet phone service company. TelexFree has been found by the Court to be a multi-billion-dollar, international Pyramid Scheme. The Marlborough, Massachusetts based Pyramid Scheme raised its first $2 Billion dollars in only two years before being shuttered by Brazilian authorities. TelexFree then focused its marketing efforts on United States based victims, raking in another $2 billion dollars before it was raided and shuttered by the FBI and Homeland Security.
TelexFree’s founders lived a lavish lifestyle before the scheme unraveled, buying a Brazilian soccer team, mansions, and boats. James Merrill, one TelexFree’s founders was sentenced to six years in prison after pleading guilty to one count of wire fraud conspiracy and eight counts of wire fraud. Carlos Wanzeler another TelexFree principal fled the country in possession of tens of millions of dollars, leaving his wife and child behind. The whereabouts of Carlos Costa, the third TelexFree Founder, remains unknown.
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