On November 2, 2018, the Securities and Exchange Commission secured a final judgment against TelexElectric for $2.02 million and Telex Mobile Holdings for $500,870. The judgment, totaling $2.52 million, pertains to funds TelexFree transferred to these entities between 2012 and 2014, according to records from disgraced accountant Joseph Craft.

Telex Mobile and TelexElectric functioned as shell companies, controlled by TelexFree principals Carlos Wanzeler and James Merrill. The SEC's investigation determined that neither company provided any legitimate services to TelexFree in exchange for the substantial transfers. The regulator had filed its initial complaint against TelexFree in 2014, alleging the operation was a vast pyramid scheme that defrauded hundreds of thousands of investors globally through a Voice-over-IP (VoIP) and advertising package scheme.

Both Telex Mobile and TelexElectric were named as relief defendants in the SEC's ongoing lawsuit against TelexFree. A relief defendant is a party named in a civil action solely for the purpose of recovering ill-gotten gains that they received, even if they are not accused of direct participation in the underlying fraud. The SEC sought to reclaim these funds to bolster the pool of assets available for victim compensation.

By August 2018, neither Telex Mobile nor TelexElectric had responded to the SEC's legal action. This prompted the regulator to file for an entry of default on August 9. The court clerk officially entered the default on August 13, acknowledging the companies' failure to defend themselves.

The SEC then filed a Motion for Default Judgment on September 12. This motion requested the court to formally rule in the SEC's favor due to the defendants' non-appearance. The judgment granted on November 2 ensures that the SEC can pursue the recovery of the specified funds from these two entities. Carlos Wanzeler and James Merrill, both co-founders of TelexFree, later pleaded guilty to charges related to the pyramid scheme, facing significant prison sentences and forfeiture orders in separate criminal proceedings.