Prior to TelexFree filing their bankruptcy petition, James Merrill, Carlos Wanzeler and other TelexFree insiders collectively sought to make off with almost $40 million in stolen investor funds.

When the FBI, Department of Homeland Security and Immigration and Customs Enforcement
raided TelexFree headquarters
, accountant Joe Craft was 
caught red-handed trying to make off 
$37.9 million dollars in cashiers checks
.

These checks were made out to James Merrill, Carlos Wanzeler, his wife Katia Wanzeler, TelexFree LLC (owned by Wanzeler) and TelexFree Dominicana SRL, a murky entity registered in the Dominican Republic.

Thankfully Craft was made to surrender the checks and the funds were promptly seized.

Tasked with recovering TelexFree assets and putting together an accurate picture of company operations and structure, TelexFree Trustee Stephen Darr is now asking for permission to subpoena the banks and institutions who issued these checks.

To what end? At this stage we’re not entirely sure, with Darr only revealing that

several of the financial institutions maintained banking relationships with (TelexFree0 prior to the bankruptcy filings.

What is clear though is that Darr’s subpoena request will focus on the cashier checks Craft was caught with;

Certain cashier’s checks, made payable to the Debtors (TelexFree and management), were drawn on the financial institutions prior to the filings, and the Trustee requires additional information respecting these checks.

Named in the subpoena request are Bank of America, J.P. Morgan Chase, Citizens Bank, Digital Federation Credit Union, Oriental Bank, Santander, TD Bank and Wells Fargo.

Darr makes his latest request after trying to obtain information “informally”, unfortunately though with only “limited success”.

After his appointment, the Trustee was provided with cashier’s checks payable to the Debtors and drawn on each of the financial institutions.

Certain of the (sic) cashier’s checks were subsequently dishonored by the financial institutions.

Over the past few weeks, the Trustee has attempted to obtain information informally from the financial institutions respecting the dishonored checks, with partial success.

If his request is granted, Darr will be able to subpoena for

communications between TelexFree, their principals and the financial institutions

bank statements

cancelled checks and other evidence of receipts and disbursements

communications between the financial institutions and federal and state regulatory authorities and

information respecting the remitters of the cashier’s checks and the reasons for the dishonor of such checks

Juicy.

The
subpoena request
is yet to be granted but I can’t see any reason it won’t be. Darr has previously already had
two rounds of subpoena requests approved
.

Whether these latest subpoenas will result in the further seizing of funds James Merrill and Carlos Wanzeler might have stashed away remains to be seen.

One would imagine though that w

🤖 Quick Answer

What was the attempted fraud involving TelexFree insiders before bankruptcy?
Prior to filing bankruptcy, TelexFree insiders James Merrill and Carlos Wanzeler attempted to transfer approximately $40 million in investor funds. Accountant Joe Craft was apprehended with $37.9 million in cashier's checks made to Merrill, Wanzeler, his wife Katia, and related entities, including TelexFree Dominicana SRL registered in the Dominican Republic. Federal authorities seized the funds.

Who discovered the attempted embezzlement at TelexFree headquarters?
The FBI, Department of Homeland Security, and Immigration and Customs Enforcement conducted a coordinated raid on TelexFree headquarters, where accountant Joe Craft was caught attempting to remove $37.9 million in cashier's checks. The checks were immediately surrendered, and the

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