Four and a half years after the SEC shut down TelexFree, with one founder rotting in prison for wire fraud, the scheme's biggest winners are still fighting to dodge accountability.

James Merrill sits in a cell. Carlos Wanzeler fled to Brazil. But Faith Sloan and Santiago De La Rosa—the defendants named in the SEC's civil case—refuse to admit they profited from a $3 billion Ponzi scheme that destroyed thousands of investors.

Sloan's filings reveal the desperation of someone caught red-handed. According to the SEC, she stole $160,400 directly from victims and pocketed another $51,000 straight from the company. Her response? Deny everything.

In her Motion to Dismiss filed against the SEC's second amended complaint, Sloan ignores most allegations entirely and offers hollow denials for the rest. She claims she can't be held responsible for statements on her own websites. She says she never personally composed comments attributed to her. She insists her promotional materials about TelexFree were technically accurate.

None of it holds water.

The emails are dated. The YouTube videos are archived. The SEC has her dead to rights coordinating with investors and promoting the scheme through channels she controlled.

When Sloan argues the SEC hasn't identified her fraudulent conduct "with sufficient particularity," she's grasping at technicalities. Courts have long held that website owners maintain ultimate control over what appears under their names. Sloan doesn't dispute she owned these sites. She just wants the rules to not apply to her.

Her "accurate description" defense collapses just as quickly. Yes, Sloan may have technically described how TelexFree worked. But she buried the truth underneath. She never disclosed that the entire enterprise was a Ponzi pyramid designed to enrich early participants at the expense of late arrivals. Securities fraud doesn't require you to tell outright lies. It only requires you to mislead—to omit material facts that would change someone's decision to invest.

That's exactly what Sloan did.

Three weeks after the SEC slapped a preliminary injunction on her, Sloan tried to reverse it. When ordered to disclose her assets, she hid money in Chinese bank accounts. When she needed cash for lawyers and rent, she claimed poverty—despite holdings she never reported.

Then came the retaliation. Sloan filed a bogus DMCA complaint against BehindMLM, a blog that simply reported her schemes and her attempts to cover them up.

This is what Ponzi profiteers do when cornered. They lawyer up. They hide assets. They attack the messengers. They argue that yes, they owned the websites, but somehow they're not responsible for what appeared on them. They claim technical accuracy while hiding the fraud underneath.

The SEC isn't buying it. Neither should anyone else.

🤖 Quick Answer

What was TelexFree and what happened to its operators?
TelexFree was a $3 billion Ponzi scheme shut down by the SEC after four and a half years of operation. Founder James Merrill was imprisoned for wire fraud, while co-founder Carlos Wanzeler fled to Brazil. Civil defendants Faith Sloan and Santiago De La Rosa face ongoing legal proceedings for allegedly profiting from the fraud that affected thousands of investors.

How much money did Faith Sloan allegedly steal from TelexFree victims?
According to SEC filings, Faith Sloan directly stole $160,400 from victims and obtained an additional $51,000 directly from the company. Despite substantial evidence of her involvement in the scheme, Sloan has denied the allegations in her legal filings and motions to dismiss the SEC's claims.

**What legal strategy are the defendants employing in the SEC

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