As a followup to yesterday’s piece on the TelexFree bankruptcy case, Boston Globe reporter Beth Healy writes today that one of the embattled company’s owners may have left the company for Brazil.
Because criminal charges have not been brought in the case, there is nothing to stop that. TelexFree filed for Chapter 11 bankruptcy protection in Las Vegas last month, but the SEC convinced a judge there to move the case to Masachusetts, where the firm’s headquarters are.
Chapter 11 bankruptcy usually means a firm is going to try to maintain operations. TelexFree says they provide phone services for calling South America, but accusations of a pyramid scheme have been swirling recently.
SEC lawyers think TelexFree might have as much as $100 million in assets that could be available to creditors, most of whom are the company’s participants and promoters. That figure includes $38 million in cashier’s checks the company’s acting chief financial officer allegedly carried with him last month as he attempted to leave TelexFree’s offices while federal agents were there seizing computers and records.
A lawyer for the SEC said they would ask a judge to move the case from the bankruptcy court in Worcester to Boston.
Since potentially hundreds of thousands of TelexFree participants stretch from Boston to Tanzania, the SEC’s counsel said it’s, “going to be a massive problem to figure out the accounting.”
by Doug Beaton