TelexFree executives withdrew $25 million in cashier's checks just before the company filed for bankruptcy, according to court documents. This came days after CFO Joe Craft allegedly attempted to flee with $37.9 million in checks on April 11th during an FBI raid. These actions contradict claims by some affiliates that the company possessed ample cash reserves to cover its estimated $1 billion in liabilities.

Many TelexFree affiliate investors continued to assert the company was financially sound. They suggested the company could easily pay out all accumulated returns on investment. Court filings, however, reveal a pattern of asset removal by management.

Further details emerged from an exhibit to the Securities and Exchange Commission's request for a jurisdictional change in the bankruptcy proceedings. This exhibit included a transcript from the April 16th hearing where the SEC secured a Temporary Restraining Order against TelexFree. Frank Huntington, an attorney for the SEC, spoke with Judge Casper during this hearing.

Huntington disclosed that on the very day of the ex-parte hearing, TelexFree management tried to withdraw money from one of the bank accounts identified by the SEC. The specific amount, bank, or individual making the request was not immediately revealed.

Between Craft's April 11th incident and the April 16th withdrawal attempt, TelexFree made another move to empty its accounts. Mr. Merrill and the wife of defendant Carlos Wanzeler visited a bank on a Friday, knowing the company would declare bankruptcy that weekend. They left the bank with $25 million in cashier's checks. It remains unclear if this $25 million has been recovered.

"These are not people you can trust. They are moving a lot of money," Frank Huntington told the court. "They have already diverted $30 million in the last four months or five months that we've identified in our papers. There's plenty more money unaccounted for, and we've got to do our best to stop them right now." A hearing is scheduled for April 24th to determine if a permanent injunction will be issued against TelexFree.