united states district court district of massachusetts

Case 1:14-cv-11858-NMG Document 220 Filed 07/16/14 Page 1 of 21
UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS
___________________________________________
)
SECURITIES AND EXCHANGE COMMISSION, )
)
Plaintiff,
)
)
v.
)
Case No. 1:14 CV 11858-NMG
)
TELEXFREE, INC.,
)
TELEXFREE LLC,
)
JAMES M. MERRILL,
)
CARLOS N. WANZELER,
)
STEVEN M. LABRIOLA,
)
JOSEPH H. CRAFT,
)
SANDERLEY RODRIGUES DE VASCONCELOS, )
SANTIAGO DE LA ROSA,
)
RANDY N. CROSBY and
)
FAITH R. SLOAN,
)
)
Defendants,
)
)
and
)
)
TELEXFREE FINANCIAL, INC.,
)
TELEXELECTRIC, LLC and
)
TELEX MOBILE HOLDINGS, INC.,
)
)
Relief Defendants.
)
___________________________________________ )
ANSWER BY STEPHEN DARR AS HE IS TRUSTEE OF THE CHAPTER 11 ESTATES
OF TELEXFREE, INC., TELEXFREE, LLC, AND TELEXFREE FINANCIAL, INC.
Stephen B. Darr, as he is the Trustee (“Trustee”) of the Chapter 11 Estates of Telexfree,
Inc., Telexfree, LLC, and TelexFree Financial, Inc. (collectively, “the Debtors”), submits this
Answer to the Amended Complaint of the Securities and Exchange Commission. In preparing
his Answer to this Complaint, the Trustee is relying upon the information which he has gathered
from his preliminary investigation and has no personal knowledge with respect to the facts and
circumstances concerning the nature of the Debtors’ business, the transactions engaged in and
Case 1:14-cv-11858-NMG Document 220 Filed 07/16/14 Page 2 of 21
the relationship and conduct by the various individual Defendants. The Trustee makes this
Answer subject to the Reservation of Rights set forth herein.
1.
On information and belief, the Trustee admits that the various individual debtors
cited in paragraph 1 appear to have been engaged in a multi-level marketing enterprise, which,
while purporting to be in the business of selling telephone service plans using Voice-over
Internet Protocol (“VoIP”) technology, they were in fact engaged in a Ponzi or pyramid scheme
which, in part, involved promising to pay investors for placing ads on the Internet and recruiting
other investors to do same. The Trustee admits so much of the allegations in paragraph 1 that
assert that the Debtors were headquartered in Marlborough, Massachusetts and that at least from
April 2012, the owners of the Debtors were James Merrill and Carlos Wanzeler.
2.
Based on information currently available to the Trustee, the Trustee admits that
the individual defendants operated a Ponzi/pyramid scheme as evidenced by, among other things,
the revenues from the retail sales of the VoIP were less than one (1%) percent of the amounts
needed to satisfy the promises to the investors who had placed the Internet ads. Further, based
upon the information available to the Trustee, it appears that the early investors were paid not
from sales of the VoIP services but rather from the money received from the later investors, thus
evidencing a classic Ponzi/pyramid scheme.
3.
The Trustee admits so much of the allegations of paragraph 3, based upon his
preliminary investigation, which allege that substantial amounts of money collected by the
Debtors were conveyed to the individual Defendants and their affiliates.
4.
Based on the information available to the Trustee, the Trustee admits the
allegations contained in paragraph 4.
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5.
Based on the information currently available to the Trustee, the Trustee admits
that the individual Defendants engaged in the conduct asserted in paragraph 5 of the Amended
Complaint.
6.
The Trustee admits the allegations contained in paragraph 6 with respect to the
relief sought by the Commission.
Jurisdiction
7.
The Trustee admits the allegation of jurisdiction set forth in paragraph 7
8.
The Trustee admits the allegations contained in paragraph 8 with respect to
jurisdiction and venue.
9.
The Trustee admits the allegations contained in paragraph 9.
10.
Based upon the currently information to the Trustee, the Trustee admits that the
individual Defendants’ conduct involved fraud, deceit and resulted in significant risk of
substantial losses to persons, including the Debtors.
Defendants
11.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 11.
12.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 12.
13.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 13.
14.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 14.
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15.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 15.
16.
Based on the information currently available to the Trustee, he admits the
allegations contained in paragraph 16.
17.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 17.
18.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 18.
19.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 19.
Relief Defendants
20.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 20.
21.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 21.
22.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 22.
STATEMENT OF FACTS
Background
23.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 23; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 23 are true.
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24.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 24; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 24 are true.
25.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 25; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 25 are true.
26.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 26; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 26 are true.
THE TELEXFREE INVESTMENT PROGRAM
Reliance on Promotional Activities by Investors
27.
The Trustee admits the allegations contained in paragraph 27.
28.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 28; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 28 are true.
29.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 29; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 29 are true.
Membership Options
30.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 30; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 30 are true.
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Incentives to Investors
31.
Based on the information currently available to the Trustee, the Trustee admits
that the Debtor TelexFree was structured to operate as a multi-level marketing company, and
based upon the information currently available to the Trustee, the Trustee admits the allegations
contained in paragraph 31(a) through (d).
32.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 32 (a) through (c).
33.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 33; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 33 are true.
34.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 34; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 34 are true.
35.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 35; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 35 are true.
36.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 36; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 36 are true.
37.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 37; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 37 are true.
6
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38.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 38; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 38 are true.
39.
Based on the information currently available to the Trustee, the Trustee admits
that the Brazilian State Court suspended the operation of Ympactus, and the Trustee has
insufficient knowledge as to whether Ympactus is an affiliate of the Debtors. The Trustee is
without knowledge with respect to the balance of the allegations contained in paragraph 39 and
can neither admit nor deny same.
40.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 40; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 40 are true.
41.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 41; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 41 are true.
42.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 42; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 42 are true.
43.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 43 with respect to the conduct of Merrill and Wanzeler.
44.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 44 to be accurate.
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45.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 45; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 45 are true.
46.
The Trustee has no personal knowledge to admit or deny the allegations contained
in paragraph 46; however, based upon the information furnished to the Trustee and the Trustee’s
preliminary investigation, the Trustee believes the allegations in paragraph 46 are true.
47.
The Trustee admits the allegations contained in paragraph 47.
48.
The Trustee admits the allegations contained in paragraph 48.
49.
The Trustee admits the allegations contained in paragraph 49.
50.
The Trustee admits the allegations contained in paragraph 50.
51.
The Trustee admits the allegations contained in paragraph 51, except the Trustee
believes that Merrill may now have been released from custody.
ACTIONS OF TELEXFREE OWNERS
James Merrill
52.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 52 are accurate.
53.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 53 are accurate.
54.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 54 are accurate.
55.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 55 are accurate.
8
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56.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 56 are accurate.
57.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 57 are accurate.
58.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 58 are accurate.
59.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 59 are accurate.
60.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 60 are accurate.
61.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 61 are accurate.
Carlos Wanzeler
62.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 62 are accurate.
63.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 63 are accurate.
64.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 64 are accurate.
65.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 65 are accurate.
66.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 66 are accurate.
9
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67.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 67 are accurate.
68.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 68 are accurate.
ACTIONS OF OTHER TELEXFREE INSIDERS
Steven Labriola
69.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 69 are accurate.
70.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 70 are accurate.
71.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 71 are accurate.
72.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 72 are accurate.
73.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 73 are accurate.
74.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 74 are accurate.
75.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 75 are accurate.
76.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 76 are accurate.
10
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77.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 77 are accurate.
78.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 78 are true.
79.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 79 are accurate.
80.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations in paragraph 80 are accurate.
Actions Of Telexfree Promoters
81.
The Trustee has no personal knowledge with respect to the allegations contained
in paragraph 81, but with respect to the limited information he currently has, he believes the
allegations in paragraph 81 to be accurate.
Sanderley Rodrigues
82.
The Trustee is without sufficient knowledge or information to admit or deny the
allegations in paragraph 82, except the Trustee does believe the allegations with respect to Mr.
Rodrigues’s public appearances and promotion videos are accurate statements.
83.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 83 are accurate.
84.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 84 are accurate.
85.
Based on the information currently available to the Trustee, the Trustee admits the
first sentence in paragraph 85. The Trustee is without sufficient knowledge to admit or deny the
balance of paragraph 85, except the Trustee believes that the allegations with respect to
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Rodrigues’s knowledge and/or reckless conduct are accurate and that he aided and abetted the
Ponzi/pyramid scheme.
Santiago De La Rosa
86.
The Trustee is without information to admit or deny the allegations contained in
paragraph 86, except the Trustee believes the allegation that De La Rosa as a prominent
promoter of TelexFree is an accurate allegation and that Mr. De La Rosa appeared at public
events and promotional videos posted on YouTube are also accurate statements.
87.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 87 are accurate.
88.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 88 are accurate.
89.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 89 are accurate.
90.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 90 are accurate.
91.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 91 are accurate.
92.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 92 are accurate.
93.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 93 are accurate.
94.
Based on the information currently available to the Trustee, the Trustee believes
that the allegation in the first sentence of paragraph 94 is accurate. The Trustee does not have
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sufficient information to admit or deny the accuracy of the balance of the allegations contained
in paragraph 94; however the Trustee believes the allegations regarding Mr. De La Rosa’s
knowledge or reckless conduct are accurate and that he aided and abetted the Ponzi/pyramid
scheme.
Randy Crosby
95.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 95 are accurate.
96.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 96 are accurate.
97.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 97 are accurate.
98.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 98 are accurate.
99.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 99 are accurate.
100.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 100 are accurate.
101.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 101 are accurate.
102.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in the first sentence of paragraph 102 are accurate. The Trustee is
without sufficient information or knowledge to admit the accuracy of the remaining allegations
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in paragraph 102, except that the Trustee believes that Crosby knew or acted recklessly with
respect to promoting TelexFree and that he aided and abetted the Ponzi/pyramid scheme.
Faith Sloan
103.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 103 are accurate.
104.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 104 are accurate.
105.
Based on the information currently available to the Trustee, the Trustee believes
the allegations contained in paragraph 105 are accurate.
106.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in the first sentence of paragraph 106 are accurate. The Trustee is
without sufficient knowledge to admit or deny the accuracy of the remaining allegations in
paragraph 106, except the Trustee believes that the allegations that Sloan knew or was reckless
with respect to her promoting of TelexFree and that her promotional activities aided and abetted
the fraudulent and deceptive pyramid scheme are accurate.
Diversion of Investors’ Funds
107.
The Trustee is without sufficient information to admit the accuracy of the
allegations contained in paragraph 107, except the Trustee believes, upon the limited information
currently available to him, that substantial funds were transferred to Merrill and/or Wanzeler
and/or affiliates of them.
James Merrill
108.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 108. Based on the information currently available to the
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Trustee, the Trustee believes that substantial sums were transferred from TelexFree to Merrill,
the amount of which the Trustee cannot confirm.
Carlos Wanzeler
109.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 109. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to Wanzeler,
the amount of which the Trustee cannot confirm.
110.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 110. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to Wanzeler,
the amount of which the Trustee cannot confirm.
111.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 111. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to Wanzeler,
the amount of which the Trustee cannot confirm.
112.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 112. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to Wanzeler,
the amount of which the Trustee cannot confirm.
Steven Labriola
113.
The Trustee is without sufficient information to admit or deny the accuracy of the
accuracy of the allegations contained in paragraph 113.
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Joseph Craft
114.
Based upon the information currently available, the Trustee is unable to admit or
deny the accuracy of the allegations contained in paragraph 114, though based on information
currently available to the Trustee, the Trustee believes that substantial funds were transferred
from TelexFree to entities in which Mr. Craft had an interest.
Sanderley Rodrigues
115.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 115. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to Rodrigues,
the amount of which the Trustee cannot confirm.
Santiago De La Rosa
116.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 116. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to De La
Rosa, the amount of which the Trustee cannot confirm.
117.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 117. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to De La
Rosa, the amount of which the Trustee cannot confirm.
118.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 118. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to De La
Rosa, the amount of which the Trustee cannot confirm.
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Randy Crosby
119.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 119. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to Crosby,
the amount of which the Trustee cannot confirm.
Faith Sloan
120.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 120. Based on the information currently available to the
Trustee, the Trustee believes that substantial sums were transferred from TelexFree to Sloan, the
amount of which the Trustee cannot confirm.
Relief Defendants
121.
The Trustee is without sufficient information to admit or deny the accuracy of the
allegations contained in paragraph 121. The Trustee believes substantial sums were transferred
from TelexFree to the Relief Defendants, but the Trustee cannot confirm the amount.
Missing Investors’ Funds
122.
Based on the information currently available to the Trustee, the Trustee believes
that the allegations contained in paragraph 122 are accurate.
First Claim For Relief
123.
The Trustee repeats his answers to paragraphs 1 through 122 above and by
reference incorporates them herein.
124.
Based upon the information currently available to the Trustee, the Trustee
believes that certain of the individual Defendants engaged in the wrongful conduct alleged in
paragraph 124.
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125.
Based upon the information currently available to the Trustee, the Trustee
believes that certain of the individual Defendants engaged in the wrongful conduct alleged in
paragraph 125.
Second Claim For Relief
126.
The Trustee repeats his answers to paragraph 1 through 122 above and by
reference incorporates them herein.
127.
Based upon the information currently available to the Trustee, the Trustee
believes that certain of the individual Defendants engaged in the wrongful conduct alleged in
paragraph 127.
128.
Based upon the information currently available to the Trustee, the Trustee
believes that certain of the individual Defendants engaged in the wrongful conduct alleged in
paragraph 128.
Third Claim For Relief
129.
The Trustee repeats his answers to paragraph 1 through 122 above and by
reference incorporates them herein.
130.
Based upon the information currently available to the Trustee, the Trustee
believes that the allegations contained in paragraph 130 are accurate.
131.
Based upon the information currently available to the Trustee, the Trustee
believes that Merrill and Wanzeler, with the assistance of others, engaged in the conduct alleged
in paragraph 131.
132.
As to the Defendants TelexFree, Inc. and TelexFree, LLC, the Trustee denies
those allegations since the Trustee has assumed control over each of those entities’ estates, they
have ceased operation, and the Trustee has no intention of reorganizing or reactivating their
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businesses. The Trustee is without sufficient knowledge to admit or deny the intentions and
actions of Merrill and Wanzeler.
Fourth Claim for Relief
133.
The Trustee repeats his answers to paragraph 1 through 122 above and by
reference incorporates them herein.
134.
Based upon the information currently available to the Trustee, the Trustee
believes that certain of the individual Defendants engaged in the wrongful conduct alleged in
paragraph 134.
135.
The Trustee admits the allegations contained in paragraph 135.
136.
Based on the information currently available to the Trustee, the Trustee admits the
allegations contained in paragraph 136 with respect to the conduct of Merrill and Wanzeler.
137.
Based on the information currently available to the Trustee, the Trustee admits the
accuracy of the statements contained in paragraph 137 with respect to the actions by the
Defendants Merrill and Wanzeler.
Fifth Claim for Relief
138.
The Trustee repeats his answers to paragraph 1 through 122 above and by
reference incorporates them herein.
139.
Based on the information currently available to the Trustee, the Trustee admits the
accuracy of the allegations contained paragraph 139.
140.
Based on the information currently available to the Trustee, the Trustee admits the
accuracy of the allegations contained paragraph 140.
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Prayers For Relief
Since the Trustee has assumed control over the assets and estates of the Debtors, the
Debtors have ceased all operations and all other business activities other than to liquidate assets
and to pay back creditors. Therefore, the injunctive relief sought with respect to the Debtors is
moot.
Reservation of Rights
Since the Trustee has only recently been appointed, he has only begun to gather
information regarding the Debtors’ business operations and currently has a very limited amount
of information available to him in order to assess the various allegations and statements, the
Trustee reserves the right to amend and/or supplement his Answer as more information becomes
available and the Trustee is able to gain access to more of the Debtors’ documents and internal
files.
STEPHEN B. DARR, AS HE IS
TRUSTEE OF THE CHAPTER 11
ESTATES OF TELEXFREE, INC.,
TELEXFREE, LLC, AND TELEXFREE
FINANCIAL, INC.
By his attorneys,
/s/ Charles R. Bennett, Jr.
Harold B. Murphy (BBO #326610
Charles R. Bennett, Jr. (BBO #037380)
MURPHY & KING,
PROFESSIONAL CORPORATION
One Beacon Street
Boston, MA 02108
(617) 423-0400
[email protected]
[email protected]
Dated: July 16, 2014
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Case 1:14-cv-11858-NMG Document 220 Filed 07/16/14 Page 21 of 21
CERTIFICATE OF SERVICE
I, Charles R. Bennett, Jr., certify that on July 16, 2014, the foregoing Answer to the
Amended Complaint was filed electronically with the Court and notice was sent through the
electronic filing system to counsel of record.
/s/ Charles R. Bennett, Jr.
Charles R. Bennett, Jr.
672034
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