Ponzitracker has confirmed that victims of the alleged $1 billion TelexFree Ponzi/pyramid scheme no longer face an August 13, 2014 deadline to submit any claim for alleged losses, and that a new deadline will likely be set for late 2014. TelexFree LLC, TelexFree, Inc., and TelexFree Financial Inc. (collectively, "TelexFree"), which initially filed bankruptcy in a Nevada Bankruptcy court, currently face allegations from state and federal securities regulators that their voice-over-internet-protocol ("VOIP") business was a massive Ponzi and pyramid scheme that took in hundreds of millions of dollars from U.S. investors alone. The proceedings were subsequently transferred to a Massachusetts Bankruptcy court where civil and criminal proceedings are also pending, and an independent trustee was recently appointed.
An attorney for the independently-appointed trustee, Stephen Darr, has confirmed to Ponzitracker that the August 13, 2014 deadline established by the Nevada Bankruptcy court to file a Proof of Claim is no longer valid as a result of the transfer of the proceedings to Massachusetts. Rule 3002 of the Federal Rules of Bankruptcy Procedure provides that a proof of claim is timely filed when done so within 90 days after the first date of the meeting of creditors known in Bankruptcy parlance as the "341 Meeting." Shortly after TelexFree's April bankruptcy filing, a notice appeared on the court docket setting the 341 Meeting for May 15, 2014 and providing that the Proof of Claim filing deadline was 90 days after that date - resulting in a claim deadline of August 13, 2014.
However, the originally-scheduled 341 Meeting was never held, as a Court ordered the transfer of the proceedings to a Massachusetts Bankruptcy court on May 6, 2014. Recently, Ponzitracker spoke with an attorney for Trustee Stephen Darr, who confirmed that:
You can disregard the bar date set by the Bankruptcy Court in Nevada.
Thus, until the Court reschedules the 341 Meeting, the Proof of Claim deadline will not take effect.
This change was also recently reflected on the official website maintained for TelexFree interested parties, with the Proof of Claim Form section modified to state that:
Please note that a modified Proof of Claim Form specific to the TelexFree cases will be available in the near future. A Bar Date has not been set.
Thus, while the August 13, 2014 claim deadline is no longer valid, victims should still continue to gather appropriate documents that will allow them to submit an accurate claim, including bank documents showing their investment, documents from TelexFree or any promoter confirming their investment, and documents showing any funds received from TelexFree after their investment. With the number of estimated victims likely to be in the tens of even hundreds of thousands, any discrepancy in a submitted Proof of Claim could potentially delay any eventual recovery.
Ponzitracker will report on when a new bar date is made public, and will provide a detailed instruction guide for understanding and completing the Proof of Claim form at an appropriate time.
Previous Ponzitracker coverage of TelexFree is here.