While state and federal prosecutors in Massachusetts have secured more than $150 million of the $1 billion raised by alleged investment fraud, known as “TelexFree”, victims’ claims for restitution have yet to be processed. Authorities have said that these funds will not be available until the conclusion of the U.S. Department of Justice’s criminal case against the perpetrators of the fraud, Carlos Wanzeler and James Merrill. The court handling TelexFree’s pending bankruptcy proceedings also has approved a method for disbursing funds.
Also, in September of this year, Massachusetts Secretary of State, William Galvin, negotiated a $3.5 million settlement with Fidelity Bank in Fitchburg for allegedly failing to properly investigate TelexFree’s financial activity. Galvin’s office is in the process of establishing a procedure for filing claims. He has advised victims that they are not entitled to recover the gains promised by TelexFree, only the money they actually invested in the alleged scam.
In addition to the funds obtained by the government, investors could potentially recover damages from any third parties, who may have aided TelexFree’s fraudulent activities. No such claims have been filed to date.
Source: The Boston Globe