Bad Boys of Bankruptcy: Episode 2: Explore the Unraveling of a Massive Ponzi Scheme from S. America

TelexFree purported to sell an internet phone servicing allowing free calls to Brazil and Latin America, it was one of the largest pyramid schemes in history, conning 1.8 million victims worldwide. When the whole pyramid came crashing down it resulted in criminal prosecutions, class action lawsuits, and a bankruptcy case. The bankruptcy court, as is often the case where there is a massive number of victims, was deemed the most efficient way to wind down the scheme while providing equal treatment to similarly situated claimants. In addition to the need to adjudicate a massive number of claims, the trustee has sought to recover from the “net winners” in the scheme to pay the claims of the “net losers.” In this episode, Judge Elizabeth Gunn, Steve Darr – the chapter 11 trustee in TelexFree, and former U.S. Attorney Andrew Lelling will discuss the unique challenges and considerations in using the Bankruptcy system to unravel a multi-million-dollar Ponzi scheme.