A Massachusetts bankruptcy judge signaled swift action yesterday in the TelexFree LLC case. Judge Melvin Hoffman of the U.S. Bankruptcy Court in Worcester announced his intent to appoint a Chapter 11 trustee, effectively removing the company's current management.

Judge Hoffman stated he would approve the trustee's appointment once additional paperwork is filed. This independent outsider will replace TelexFree's current leadership. The decision effectively ends Stuart MacMillan's brief tenure as CEO, along with Labriola and other management members previously dismissed or terminated.

MacMillan reportedly accepted $180,000 for the CEO role, a sum that now appears to come at the cost of his professional career. TelexFree's official response to the ruling presented a notable shift.

Joseph Davis, representing TelexFree, told the court the company would not object to the trustee's appointment. "We agree that it makes sense to put in place a Chapter 11 trustee," Davis said. "I understand why control of the company should not remain in the hands of management that preceded the bankruptcy."

This stance marked a reversal. Just weeks prior, on April 30th, TelexFree had formally objected to a Chapter 11 Trustee. Their filing claimed the Department of Justice's evidence contained "inadmissible hearsay and blatantly false allegations." They also argued current management, including MacMillan, had no involvement in the Ponzi scheme TelexFree operated from 2012 to 2014. The company stated all past Ponzi fraud was "irrelevant" because "it is not offered today" and was "terminated (bankruptcy) pre-petition."

Davis's agreement implicitly acknowledges the core of the Department of Justice's earlier motion. The DoJ had cited "allegations of securities fraud committed in the course of operating a billion dollar Ponzi scheme," pointing to civil enforcement actions by the Securities and Exchange Commission and the Massachusetts Securities Division. The motion also referenced "very recent diversions of millions of dollars in cash for the personal benefit of the Debtors’ principals and officers" as reasons for a trustee.

Carlos Wanzeler, one of TelexFree's owners, remains a fugitive.