Faith Sloan, a top promoter for the TelexFree Ponzi scheme, has filed a Motion to Dismiss the SEC's civil case against her, despite her prominent role in the $1 billion fraud. Sloan claims she knew nothing about the deception, even after acknowledging she "operated websites touting TelexFree" and appeared in promotional YouTube videos.

Sloan's motion argues that these activities do not prove she engaged in fraudulent conduct. She asserts the SEC must state the fraud circumstances "with particularity." Apparently, the evidence of her promoting a billion-dollar Ponzi scheme is not particular enough for her defense.

The SEC summarized comments Sloan allegedly made on the TelexFree website concerning the compensation plan. Sloan's motion counters that the SEC does not allege she composed these comments. It also claims the SEC fails to describe any manipulative device she used to sell TelexFree memberships. If Sloan's arguments hold, then misrepresenting a billion-dollar Ponzi scheme is neither manipulative nor deceptive.

Her motion attempts to distance her from TelexFree's owners and management. She states the amended complaint lacks allegations that she was involved in creating or operating the scheme or defining its compensation plan. Sloan maintains the SEC does not even allege she was employed by any defendants or shared in their illicit gains. She characterizes herself as an independent business owner, compensated for services "like all of the other 'promoters' of TelexFree and no more."

This claim of being "no more" than other promoters is a critical distinction. Sloan did not lose money in the scheme. She belongs to an exclusive group of TelexFree net-winners. Forensic investigations are ongoing into the data seized by authorities, so the exact percentage of affiliates who lost money is not yet public. Historically, net-winners in Ponzi schemes represent a small fraction of the total investor base.

Sloan concludes her arguments with a final plea of ignorance. She states she "knew nothing about TelexFree's income, sales or finance." She claims her knowledge came from co-defendants at webinars. Sloan asserts she became "disappointed in their failure to keep their promises early in 2014" and realized she was a victim, "like so many other 'promoters' of TelexFree."

However, comments made by Sloan in February 2013 contradict this defense. She publicly claimed the "issue" of the TelexFree criminal investigation in Brazil was "addressed" and a "non-issue" for TelexFree in the US. This "non-issue" ultimately led to a permanent injunction against TelexFree in June 2013. The scheme's global business model ensured the Brazilian issues became US issues when TelexFree ran out of money in early 2014.

In the same exhibit, Sloan dismissed concerns about TelexFree's compensation plan as "hearsay." She told a reader, "Honey, Julia, if you knew the compensation plan and how the products came in to play, you would know how they are able to pay out the income for 52 weeks." This statement directly undermines her "I knew nothing" defense. It implies intimate knowledge of the compensation plan and business model, suggesting she knew she participated in a Ponzi scheme.

This contradicts her motion's claim that she "knew nothing about TelexFree's income, sales or finance." Her motion also makes no mention of her efforts to sell TelexFree's "products" to non-investors. The SEC estimates TelexFree's retail VOIP activity at 0.25% of its total revenue. By stating "the products" and "how they came in to play" explained 200% annual ROIs, Sloan implicitly claims significant retail activity within her own business.