TelexFree Victims May Have a Long Wait to Settle Claims
11/28/2014
At least $153 million could potentially be used to settle claims of people who can prove they were defrauded by TelexFree Inc. For most, it will be a long wait before they receive any of their money back.
$3.5 million which resulted from a settlement by Massachusetts Secretary State William F. Galvin may soon be made available to reimburse victims. Galvin secured the funds by suing Fidelity Bank, which is run by the brother of TelexFree principal, James Merrill. The bank neither admitted nor denied Galvin's claims that it failed to fully vet TelexFree as a client, but settled the lawsuit. Claimants who wish to apply for funds must be Massachusetts residents.
An additional $150 million could be held up for some time. Before any claims against the funds seized by the Department of Justice or held in TelexFree's bankruptcy case can be processed, the company's principals must be found guilty of criminal fraud and the court must approve a claims process. Victims who want to apply for funds from the US Attorney's office must fill out an online claim form in English on an FBI website. Many of the victims are undocumented immigrants, which may make them reluctant to file a claim, despite assurances that doing so will not bring them to the attention of immigration authorities.
It will be challenging for authorities to determine how much each claimant is owed. Many alleged victims do not understand that they can only claim the amount they put into TelexFree, not the profits they believe they were owed.