TelexFree News Update 5/2/2014: New CEO knows nothing, most procedural things done, no big news

May 2nd is the big court date for TelexFree and Jordan "Ponzitracker" Maglich was live-tweeting about the trial, and not too much happened. Before giving you a summary, I would like to make some comments.

1) Nothing Important Happened. Really. 

Any one who tell you otherwise, like "court exonerates TelexFree", are LIARS.

There was ONE document, that says something will be decided today, but today's session will be continued Monday. It has NOT concluded. So any one who was talking about "good news" are LIARS. There are NO SIGNIFICANT NEWS. Today is just some testimony, and decisions on what can be admitted as evidence, and what cannot be.

2) Unauthorized and plagiarized "live tweet" of trial

Any one "live tweeting", unless they are actually IN the courtroom, and they are probably lying, are simply copying Jordan "Ponzitracker" Maglich's coverage (and Oz's authorized copy on BehindMLM).

Here's the original: http://www.ponzitracker.com/main/2014/5/2/live-blogging-the-telexfree-bankruptcy-hearing.html

There are many alleged coverage on Youtube, mostly of stupid, unattributed (and unauthorized) translations and copies of the real thing, and often the information are outright WRONG. Some even claimed that the bankruptcy was already approved (it haven't even started).  THOSE ARE LIARS. THEY POST CRAP LIKE THIS:

Actual fake news found online even before the trial coverage ended today, 2-MAY-2014

Accept no substitutes. Ponzitracker will be covering the continuation on Monday. If you wish to donate a few dollars to pay for his special lawyers-only subscription ($30 per hour!) to the trial, please do so at his website.

Now, a quick summary of the trial thus far:


Following are highlights of the trial. For full coverage, please read the original coverage by Jordan "Ponzitracker" Maglich (linked above)

• At least two attorneys representing "victims" showed up in court
• Before the session even started, DOJ attorneys (US Attorney's office) served TelexFree attorneys with asset forfeiture (i.e. DOJ is confiscating all relevant properties and assets of TelexFree)
• SEC told judge this should not be a Chapter 11 Reorganization bankruptcy
• Three witnesses testified today: William Runge (Alvarez & Marshal), Stuart McMillan (TelexFree Interim CEO), and Timothy Meighan (Alvarez & Marshal)  A&M was hired by TelexFree (allegedly) to restructure itself
• Runge was recommended by Greenberg Traurig (TelexFree's east coast lawyers) on April 9th, and hired on 10th. 
• Runge knows that TelexFree has money spread among many different accounts, and one bank, Wells Fargo, has closed TelexFree account and told them to come pick up the cashier's checks
• Runge claimed that Meighan was supposed to go with Craft to deposit the cashier's checks into an escrow account, when the checks, as well as laptops of both Craft and Meighan were seized. PC's have been copied by computer forensics team and returned. 
• Runge believe there is a business to reorganize, VOIP service can be restored once servers are returned
• Runge admits he had never encountered a client who had problems maintaining bank accounts
• Runge did not authorize Craft, who is CFO at the time, to identify himself as "consultant" to the Federal agents
• Runge estimates that there are less than 100 million in TelexFree assets, none of which is located in banks that are in Nevada
• Runge admits he did no work in Nevada. He worked in Marlborough MA until the raid, then did his work in his regular office in Georgia. 
• Runge admits that TelexFree is just a registration and a mailbox in Nevada
• Runge admits none of the principals in TelexFree has any ties to Nevada
• Runge admits he never reviewed the TelexFree marketing material, thus he had no idea what TelexFree was actually selling
• Runge admits that he knew the company already reformed comp plan once, but need to halve the payout yet again. When questioned, he admit he did not know what the differences are. 
• Runge admits he knew the Brazilian government shut down TelexFree over there, but did not remember why
• Runge knows that promoters attempt to withdrawn $174 million in payments after the comp plan change, and majority of withdraw request was NOT processed. 
• Runge does not know how much of the venue was derived from actual VOIP sales, or even how much VOIP was sold, but he was looking at DAILY revenue of $100K to 300K
• Runge stated that before the new comp plan, company was looking at 1 million revenue DAILY. After comp plan change, it dropped 100K (up to 300K)
• Runge did not know how much contract to the promoters will be rejected by the bankruptcy. He had heard $5 BILLION, but he was not sure from where. 
• Runge does NOT know who are direct competitors to TelexFree
• Runge knows that the company was spending MILLIONS of dollars buying back VOIP products from promoters
• MacMillan, after consulting Runge, agreed that people under temporary restraining order should not be officers or directors. Merrill and Craft resigned, but Wanzeler refused, so MacMillan terminated him from the board. 
• MacMillan believes company can be reorganized, cited an "app" that quickly rose to top 5. 
• MacMillan believes VOIP usage is growing 20% a month, 14 million minutes. 
• MacMillian believes that company can do $50 million monthly revenue based on 14 million VOIP minutes. 
• MacMillan admits that the "AdCentral" makes no sense, and had no role in the comp plan, old or new
• MacMillan stated that the 1 billion yearly revenue number came from Craft, did not get breakdown
• MacMillan had never looked at the promoter contract until the FBI/HSI/ICE raid. 
• MacMillan admits the company seem to be paying out too much money
• MacMillan knows that there's furniture for 30 in the "call center", even though TelexFree has total of 14 employees, including both owners. 
• Tim Meighan was present with Craft at TelexFree HQ when computer and cashier's checks are seized, but was not with Craft the whole time
• Tim Meighan's email, as copied from his laptop, was introduced into evidence by TelexFree lawyers, as "proof" that they engaged A&M for reorganization.