United States v. James Merrill and Carlos Wanzeler
Firm was retained by Counsel for the accused Merrill to assess the government’s allegation of a ponzi scheme where it reported”total losses by the victims of about $3,045,000,000″ located around the world.
We must determine if the characteristics associated with an alleged Ponzi scheme are evident in the nature of the revenue and expense recorded by the company. To assemble the full financial picture, a list of missing financial records from the government’s case along with a list of various computer-based analyses that became their basis for the allegations were requested.
The requests were necessary in order to address such findings by the DOJ as “total losses by the victims of about $3,045,000,000″…”multiple User Accounts for the sole purpose of leveraging their fictitious profits”…”multiple User Accounts on their own behalf could generate credits by essentially recruiting themselves”…”net winners”…”net losers” and the”$5,000,000,000 trailing liability.”
The DOJ case against Merrill had concluded “Unsurprisingly, because promoters had to pay to join, but did not have to sell a product, TelexFree had to compensate its promoters with the revenue generated from buy-in fees (the $339 or $1425) paid by newer promoters. That is, it was a Ponzi scheme.”.
The SEC Complaint had concluded “Based on the information available to date…Through the sale of those one-year contracts, TelexFree promised to pay more than $1.1 billion to the promoters who placed the required internet ads – a task which was extremely easy to accomplish. In other words, the receipts from selling the packages covered barely 1% ofTelexFree’s obligations to pay promoters who placed ads…”
The result is evident in the attached PDF.