United States District Court, D. Massachusetts
In re TELEXFREE SECURITIES LITIGATION This Document relates to: All cases
MEMORANDUM OF DECISION AND ORDER OR DEFENDANT'S
MOTION TO DISMISS
TIMOTHY S. HILLMAN DISTRICT JUDGE
Wanzeler, one of the defendants in the TelexFree
multidistrict securities litigation, moves to dismiss all
counts against her in the Second Consolidated Amended
Complaint (“SCAC”) pursuant to Rule 12(b)(6).
Between February 2012 and April 2014, TelexFree, Inc.
operated a notorious pyramid scheme with approximately two
million participants, nearly half of whom suffered net
financial losses as a result. Plaintiffs have filed actions
in District Courts across the United States seeking to
recover their losses from dozens of defendants, including,
financial service providers, licenses professionals such as
attorneys and accountants as well as individuals employed by
or otherwise associated with TelexFree. Due to the common
questions of fact underlying all these actions, the Judicial
Panel on Multidistrict Litigation joined the suits in a
multidistrict litigation, transferring the consolidated
actions to the District of Massachusetts for pretrial
Wanzeler is identified in the SCAC as the spouse of Carlos
Wanzeler, one of the founders and principles of the TelexFree
scheme. Mr. Wanzeler fled the jurisdiction in advance of
criminal charges being issued against him. Ms. Wanzeler is
further identified “as an agent, servant, or authorized
representative of TelexFree's Executive Office.”
SCAC at 54. It is also clear from the SCAC that the
Plaintiffs intended to include Ms. Wanzlerer in the groups of
defendants designated “Associated Individuals”
and “Other Operational Defendants.” SCAC at 13.
Although the Court is not completely convinced with respect
to the Plaintiffs arguments as to the propriety of their
allegations against broad groups, at the Plaintiffs'
urging, the Court reads all allegations against those groups
generally as allegations made specifically against Ms.
Wanzeler. Docket No. 234 at 12-13.
Complaint alleges that Ms. Wanzeler was the partner and
co-conspirator of her husband, Carlos Wanzeler (SCAC ¶
259), actively assisting him in the theft and laundering of
the proceeds of the TelexFree scheme (SCAC ¶ 260); that
she methodically released false information intended to
mislead the Plaintiffs (SCAC ¶ 113); personally
performed “integral services” and provided
“essential advice” and assistance that knowingly
furthered TelexFree's illegal scheme (SCAC at
¶¶ 280, 301 & 313); that she provided bad
advice that furthered the unlawful scheme (SCAC ¶ 432);
that she siphoned off or otherwise converted funds
accumulated by the TelexFree scheme (SCAC ¶¶
705-706); and finally, that she was apprehended while
attempting to flee to Brazil on a one-way ticket with cash
and luggage (SCAC ¶ 485).
amended complaint seeks recovery against Katia Wanzeler for
violations of Mass. Gen. L. ch. 93 §§ 12, 29 (Count
I), violations of Mass. Gen. L. ch. 93A §§ 2, 11
(Count II), aiding and abetting violations of Chapter 93 and
93A (Count III), unjust enrichment (Count IV), civil
conspiracy (Count V), violations of Mass. Gen. L. ch. 110a
§ 410(b) (Count VIII), fraud (Count IX), and tortious
aiding and abetting (Count X).
withstand a Rule 12(b)(6) motion to dismiss, a complaint must
allege a claim that plausibly entitles the plaintiff to
relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544,
570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Plausibility
does not require probability but “it asks for more than
a sheer possibility the defendant has acted
unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662,
678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing
Twombly, 550 U.S. at 556, 127 S.Ct. 1955).
“Threadbare recital of the elements of a cause of
action, supported by mere conclusory statements, do not
suffice.” Id. at 678. “If the factual
allegations in the complaint are too meager, vague, or
conclusory to remove the possibility of relief from the realm
of mere conjecture, the complaint is open to
dismissal.” Rodriguez-Reyes v.
Molina-Rodriguez, 711 F.3d 49, 53 (1st Cir. 2013)
(quoting SEC v. Tambone, 597 F.3d 436, 442 (1st Cir.
2010) (en banc)).
scant facts specific to Katia Wanzeler alleged in the SCAC
are that she was the partner and co-conspirator of her
husband, Carlos Wanzeler (SCAC ¶ 259). She served as an
agent of TelexFree (SCAC ¶ 54), assisted in the theft
and laundering of monies derived from the illegal scheme,
(SCAC ¶¶ 260, 705, 706), fraudulently promoted the
scheme, (SCAC ¶¶ 113, 432), knowingly and
substantively assisted in the execution of the illegal
project, (SCAC ¶¶ 280, 301, 313), and then
attempted to flee to Brazil (SCAC ¶ 485). While the SCAC
alleges that Wanzeler was an agent or servant of TelexFree,
this is not an allegation of tortious conduct, and the
pleadings contain few factual allegations concerning her
service or agency except for the fact that she was seized
attempting to flee the country with a large amount of cash.
While this factual allegation bolsters the allegations that
Ms. Wanzeler was the partner and co-conspirator to her
husband, it also bolsters that association as a basis for
sustaining the complaint. While the SCAC's implication
that Ms. Wanzeler must have done something wrong because it
might appear that she was fleeing to Brazil is thin, it is
sufficient to sustain the allegations that are relevant to
any of the Counts enumerated in the SCAC for now, and should
be subjected to the discovery process.
reasons set forth above, Defendant Katia Wanzeler's
motion to dismiss all counts against ...