Law360 (December 17, 2024, 9:52 PM EST) -- Victims of the multibillion-dollar Te l e x F r e e Po n z ischeme have asked a federal judge to certify their class in their suit against the litigation's remaining defendants, including TelexFree insiders and Wells Fargo, arguing that cases arising from Ponzi schemes are the "very archetypes for class treatment."

In their motion filed Monday, the victims said since TelexFree LLC made virtually identical representations to all potential class members, the pre-dominancy requirement for class certification is met. They said the class also fulfills all other requirements for certification, including numerosity, commonality, typicality and adequacy.

"The elements of plaintiff's aiding and abetting claim present factual and legal questions that are common to the claims of all class members," the victims said. "If there were separate, individual trials, the evidence offered at each trial would be precisely the same."

The plaintiffs also requested Robert J. Bonsignore of Bonsignore Trial Lawyers PLLC lead the litigation, which was launched over a decade ago, since he has already made significant recoveries for the victims.

"[Bonsignore] has already achieved settlements exceeding $120 million for the class, and his interests and those of his assembled team are fully aligned with the interests of the class," theysaid.

The suit alleges TelexFree, based in Marlborough, Massachusetts, disguised its pyramid scheme as a Skype-like internet telecommunications company that charged people to become promoters of the rarely used service in exchange for commissions. The scheme, which involved about 2 million people worldwide, led to $3 billion in total losses for victims, according to federal prosecutors.

Monday's motion states that proof that TelexFree ran a Ponzi scheme is itself "class-wide proof of TelexFree's fraud."

"Thus, the existence or nonexistence of a Ponzi/pyramid scheme is a common question of factthat predominates over individual issues, if any, on the subject," the plaintiffs said.

The proposed class action dates back to 2014, the same year TelexFree declared bankruptcy and drew scrutiny from the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

The scheme's founders, James Merrill and Carlos Wanzeler, were charged with multiple counts of wire fraud in July 2014. Merrill copped to the charges and was sentenced in 2017 to six years in prison and three years of supervised release. Wanzeler remains at large and was previously believed to be hiding in Brazil.1

The suit's remaining defendants include Wells Fargo Advisors LLC and Wells Fargo Bank NA.Last month, a Massachusetts federal court ordered Wells Fargo Advisors to hand over electronic files maintained by a compliance manager who investigated potential misconduct by an employee handling accounts of TelexFree associates.

Counsel for the plaintiffs did not respond to requests for comment on Tuesday.

The plaintiffs are represented by Robert J. Bonsignore and James Lewis of Bonsignore Trial Lawyers PLLC, James Wagstaffe of Adamski Moroski Madden Cumberland & Green LLP, E. Powell Miller and Ann L. Miller of The Miller Law Firm PC, Steven Rhodes of Steven W. Rhodes Consulting LLC, and Peter A. Barile III of Lowey Dannenberg PC.

Wells Fargo Bank NA and Wells Fargo Advisors are represented by John O. Mirick of Mirick O'Connell Attorneys at Law, Kenneth C. Pickering of Pickering Legal LLC, and Robert W. Fuller, Adam K. Doerr, Fitz E. Barringer, Demi Lorant Bostian, Patrick H. Hill, Emma T. Kutteh and Garrett A. Steadman of Robinson Bradshaw & Hinson PA.

The case is In Re: Telexfree Securities Litigation, case number 4:14-md-2566, in the U.S. District Court for the District of Massachusetts.

--Additional reporting by Julie Manganis and Brian Dowling. Editing by Lakshna Mehta.