TelexFree Securities Litigation

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TelexFree Securities Litigation
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NOTICE TO POTENTIAL CLASS MEMBERS

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IfYou Bought a TelexFree AdCentral or AdCentral Family Package, a Class Action Settlement May Affect You and You May Have a Time Sensitive Claim to Recover Monies You Lost.

A class action lawsuit brought on behalf of victims of the TelexFree Pyramid Scheme is currently pending before Judge Timothy S. Hillman of the United States District Court for the District of Massachusetts.

Plaintiffs allege that they were injured as a result of the Defendants’ assistance and participation in the TelexFree Pyramid Scheme. Defendants dispute Plaintiffs’ claims.

Three settlements have been reached in this litigation regarding claims against twelve parties, nine of which are Defendants and three of which are related third parties.

  • The first settlement is with Defendants Base Commerce, LLC (f/k/a Phoenix Payments, LLC), John Hughes, Brian Bonfiglio, John Kirchhefer, and Alex Sidel.

  • The second settlement is with Defendant Synovus Bank.

  • The third settlement is with Defendants Joseph Craft and Craft Financial Solutions, Inc. and related third parties BWFC Processing Center, LLC, ACE LLP, and Audra Craft.

The Court must still decide whether to approve the settlements.

Your legal rights will be affected whether you act or don’t act.

YOUR LEGAL RIGHTS AND OPTIONS

OBJECT BY MAY 22, 2020

Submit your objection explaining why you disagree with the settlements and/or the requested attorneys’ fees, litigation expenses, and incentive awards.

See “Your Rights in The Settlement Classes” below for more information.

EXCLUDE YOURSELF BY MAY 22, 2020

The only option that allows you to individually sue the Settling Defendants/Related Parties about the claims asserted in this case. You will no longer be a member of the settlement classes and you will not receive any funds from these settlements.

See “Your Rights in The Settlement Classes” below for more information.

GO TO THE HEARING ON JULY 22, 2020

Ask to speak in Court about any aspect of the settlements and/or the requested attorneys’ fees, litigation expenses, and incentive awards.

See “Your Rights in The Settlement Classes” below for more information.

DO NOTHING

You will remain a member of the settlement class. You will give up any rights you currently have to separately sue the Settling Defendants/Related Parties for the conduct that is the subject of the lawsuits.


You are a member of the Class if:

You purchased one or more TelexFree AdCentral or AdCentral Family packages and suffered a Net Loss between January 1, 2012, and April 16, 2014.

What is this lawsuit about?

Plaintiffs allege that they were injured as a result of the Defendants’ assistance and participation in the TelexFree Pyramid/Ponzi Scheme.

Plaintiffs allege that TelexFree, Inc., TelexFree, LLC, TelexFree Financial, Inc. and its related entities and individuals operated an illegal scheme whereby it sold memberships and ostensibly paid its promoters for placing advertisements for a voice over internet protocol (“VOIP”) product, but in reality paid them to recruit other investors whose new membership fees kept the scheme afloat. Plaintiffs further allege that TelexFree, Inc., TelexFree, LLC, TelexFree Financial, Inc. and its related entities and individuals carried out other related ongoing operations including money laundering and the transfer of funds and operations offshore and beyond the reach of the United States justice system.

Plaintiffs allege that TelexFree’s business and operations constituted a hybrid illegal Pyramid/Ponzi Scheme. Plaintiffs seek compensation for the economic loss they suffered as a result of the Defendants’ participation in, or aiding or abetting of, TelexFree’s illegal Scheme. Plaintiffs also seek equitable relief.

Defendants dispute Plaintiffs’ claims. The Court has not yet decided who is right.

What do the settlements provide?

Three settlements have been reached. The first settlement is with Base Commerce, LLC (formerly known as Phoenix Payments, LLC), John Hughes, Brian Bonfiglio, John Kirchhefer, and Alex Sidel (the “Base Agreement”), and the second settlement is with Synovus Bank (the “Synovus Agreement”). Defendant Jason Doolittle is not a party to the Base Settlement Agreement but is being released/dismissed as a former officer of Base Commerce.

The Base Agreement provides for payments totaling $1,575,000 in cash. The settlement also provides for continuing cooperation by the Base Commerce Defendants, including providing testimony from witnesses. In return for these payments and benefits, settlement class members are required to give up their claims against the Base Defendants, their parents, subsidiaries, affiliates, divisions, predecessors and successors, their respective past and present officers, directors, and employees.

The Synovus Agreement provides for payments totaling $425,000 in cash. The settlement also provides for continuing cooperation by Synovus, including providing testimony from witnesses. In return for these payments and benefits, settlement class members are required to give up their claims against Synovus Bank.

The third settlement is with Joseph Craft, Craft Financial Solutions, Inc., BWFC Processing Center, LLC, ACE LLP, and Audra Craft (the “Craft Agreement”).

The Craft Agreement provides for a payment of $100,000 in cash. The settlement also provides for continuing cooperation by the Craft Parties, including providing testimony from witnesses. In return for these payments and benefits, settlement class members are required to give up their claims against the Craft Defendants, BWFC Processing Center, LLC, ACE LLP, their disclosed parents, subsidiaries, affiliates, divisions, predecessors and successors, their respective past and present officers, directors and employees, insurers, reinsurers, and Audra Craft.

These Settlement Agreements are available to view and download on the “Court Documents” page of this website.

When can you get a payment?

No money will be distributed to any Class Member yet. The lawyers will continue to pursue the lawsuit against the other, non-settling Defendants to see if any future settlements or judgments can be obtained in the case and then the funds will be distributed in the best method available in order to reduce administrative expenses.

The plan of distribution for the settlement funds will depend on the total amount recovered from the Defendants, as well as attorney fees and case costs. You will be notified when and how to submit a claim. The plan of distribution for the settlement funds must be approved by the Court before the funds can be distributed.

Your Rights in The Settlement Classes:

You May Remain in the Settlement Classes: If you wish to remain a member of the settlement classes, you do not need to take any action at this time. If you remain in the settlement classes and participate in the settlement, you retain your right to administratively contest the amount you are awarded after you are notified what that amount is.

You May Opt Out of the Settlement Classes: If you wish to keep your rights to sue the Settling Defendants/Related Parties about the conduct alleged in this litigation, any act or omission of the Settling Defendants/Related Parties alleged in the Complaints as it relates to the TelexFree Scheme or any conduct alleged and causes of action asserted or that could have been alleged or asserted, in any class action or other complaints filed in this litigation, you must exclude yourself from the settlement class or classes. You will not get any money from the settlements from which you exclude yourself.

To exclude yourself from the settlement class or classes, you must send a letter that includes the following:

a) Your name, home address at the time of your transactions with TelexFree, your current home address if different, your phone number, your current email, your email address(es) at the time you conducted business with TelexFree, evidence of your transactions with TelexFree, your estimate of the date range of your transactions with TelexFree, and your estimated dollar transactions with TelexFree;

b) the name and contact information for all legal counsel(s) that you have consulted with as it relates to TelexFree or that represent you;

c) A statement saying that you wish to be excluded from the settlement class in In re TelexFree Securities Litigation – Case No. 4:14-md-2566-TSH, as to each Settling Defendant/Related Party (Base Commerce, LLC, Synovus Bank, John Hughes, Brian Bonfiglio, John Kirchhefer, Alexander Sidel, Joseph Craft, Craft Financial Solutions, Inc., BWFC Processing Center, LLC, ACE LLP, and Audra Craft) for which you wish to retain your rights to sue; and

d) Your signature and the date you sign.

You must mail your exclusion request, postmarked no later than May 22, 2020, to:

TelexFree Securities Litigation
Settlement Administrator
c/o A.B. Data, Ltd.
ATTN: EXCLUSIONS
PO Box 173001
Milwaukee, WI 53217

Remain in the Settlement Classes and Object: You can ask the Court to deny approval of one or more of the settlements by filing an objection. You can’t ask the Court to order a larger settlement; the Court can only approve or deny the settlements. If the Court denies approval of a settlement, no payments from that settlement will be sent out and the lawsuit will continue. If that is what you want to happen, you must object.

You may object to the proposed settlements in writing. You may also appear at the Fairness Hearing, either in person or through your own attorney. If you appear through your own attorney, you are responsible for paying that attorney. All written objections and supporting papers must:

a) Include your name, address, telephone number, and email address (if any);

b) Contain documentary proof of your membership in this class action;

c) Clearly identify the case name and number (In re TelexFree Securities Litigation; Case No. 4:14-md-2566-TSH);

d) Be submitted to the Court either by mailing them to the Clerk’s Office, United States District Court for Massachusetts, Donohue Federal Building, 595 Main Street, Worcester, Massachusetts 01608 or by filing them in person at any location of the United States District Court for Massachusetts; and

e) Be filed or postmarked on or before May 22, 2020.

The information contained on this website is only a summary. You may download a full copy of the Notice by clicking here.
Since this website presents only summary information, you should review the Notice for additional details.

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