United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANT'S NEHRA AND
WAAK'S MOTIONS TO DISMISS (DOCUMENT # 187)
TIMOTHY S. HILLMAN, DISTRICT JUDGE
Gerald P. Nehra and Richard W. Waak, two defendants in the
multiple defendant TelexFree multi-district securities
litigation move to dismiss all counts against them in the
Second Consolidated Amended Complaints (SCAC) (Docket 141)
pursuant Fed.R. Civ. P. 12 (b)(6). TelexFree, Inc.,
(TelexFree) was a pyramid scheme that operated from February
2012 to April 2014, and involved approximately two million
participants worldwide, nearly one million of whom suffered a
net financial loss. Several Plaintiffs filed actions in
federal district courts across the United States seeking to
recover their losses against dozens of defendants, including
attorneys who represented the principals of the pyramid
scheme. Because the actions involve common questions of fact,
the Judicial Panel on Multi-District Litigation joined the
actions into a multi-district litigation and ordered a
transfer of actions to the District of Massachusetts for
coordinated or consolidated pre-trial proceedings.
Plaintiffs' complaint seeks relief against the Defendants
in the following Counts:
• First Claim for Relief: General Laws Chapter 93,
§12 and 69.
• Second Claim for Relief: General Laws Chapter 93A
§2 and 11.
• Third Claim for Relief: Aiding and Abetting General
Laws Chapter 93§12 and 69 and Chapter 93A §2 and
• Fourth Claim for Relief: Unjust enrichment.
• Fifth Claim for Relief: Civil Conspiracy.
• Sixth Claim for Relief: Professional negligence.
• Seventh Claim for Relief: Negligent misrepresentation.
• Eight Claim for Relief: Securities Fraud.
• Ninth Claim for Relief: Fraud.
• Tenth Claim for Relief: Tortious aiding and abetting.
Defendants, are attorneys licensed to practice law in the
State of Michigan and are sued in their individual capacity,
and as partners in the Nehra and Waak Law Firm. The
Defendants and their law firm provided legal services to
TelexFree in connection with TelexFree's multilevel
marketing scheme. The Defendants advertised that they were
experts in representing multilevel marketing and direct sales
clients and that TelexFree used the attorneys to hide their
pyramid scheme activity with “obfuscating
phraseology.” The complaint further alleges that in
July of 2013, the Defendants represented to the Plaintiffs
and the putative class members in July 2013, that they had
“vetted” and “blessed”
TelexFree's business model. (SCAC ¶416). Further,
Attorney Nehra was present at a “Super Weekend”
promotion on behalf of TelexFree and he assured the attendees
of the legitimacy of the TelexFree operation in the United
States, and that “TelexFree's operation had been
‘vetted by the Nehra and Waak Law Firm' and that it
is legally designed . . . you are on very solid legal
ground.” (SCAC ¶423). The complaint alleges that
these statements were made by Attorney Nehra with full
knowledge that the TelexFree Brazilian operations had been
shut down by the Brazilian Government and that all assets had
Claim for Relief: General Laws Chapter ...