REPORT: TelexFree Diverted $88 Million After Brazilian Judge Blocked Payments

cautionflagUPDATED 1:04 P.M. (JULY 5, U.S.A.) Quoting a prosecutor, the website of iG — a Brazilian communications provider — is reporting that the TelexFree MLM “program” allegedly diverted $88 million after a judge in the state of Acre blocked payments as a pyramid-scheme probe got under way last month.

TelexFree also operates in the United States. The “program” has been pitched to victims of the murky Profitable Sunrise “opportunity,” which the U.S. Securities and Exchange Commission described in April as a pyramid scheme that may have collected tens of millions of dollars through offshore bank accounts.

At least one U.S. video pitch for TelexFree described the purported opportunity as a “program” that provided a guaranteed payout of at least $1,100 per week for a year to individuals who sent in $15,125 for the purchase of a “contract.” TelexFree has been under investigation in Brazil for weeks. Behind MLM.com is reporting that seven Brazilian states have opened probes.

Here is a link to a Google translation in English of today’s iG story.

Whether U.S. investigators have opened probes into TelexFree is unknown. The opportunity, however, may have U.S. exposure to charges it is selling unregistered securities as investment contracts. MLM “programs” such as Zeek Rewards and Profitable Sunrise have been shut down under U.S. securities laws.

Like Zeek Rewards and Profitable Sunrise, TelexFree has a presence on well-known Ponzi-scheme forums such as TalkGold and MoneyMakerGroup.

Such MLM “programs” typically have promoters in common, a circumstance that raise questions about whether promoters are engaging in willful blindness and polluting banks both domestic and across national borders with unlawful proceeds from scams that may have ties to organized crime — or worse. TelexFree purports to be in the communications business.

In August 2012, the SEC described Zeek Rewards as a $600 million Ponzi- and pyramid scheme operating from Lexington, N.C. The precise base of operations of Profitable Sunrise remains unclear. The SEC said it used a “mail drop” in England.

HYIP schemes typically generate protests when governments move against them. Such appears to be the case with TelexFree, which appears to have affiliates willing to march in the streets in apparent “defense” of the “program.”

As was the case among certain Zeek Rewards affiliates in the United States, certain affiliates of TelexFree in Brazil appear to be engaged in efforts to demonize law enforcement and to chill courts or enforcement agencies. After the AdSurfDaily Ponzi scheme was exposed in the United States in 2008, bogus liens seeking billions of dollars were filed against public officials.

Because money directed at HYIP schemes typically involves transfers among any number of conduits to keep schemes afloat, law-enforcement agencies often seek asset freezes to prevent the movement of money. In the absence of such freezes or if freeze orders are ignored, less money may be available to compensate victims if an investigation ultimately reveals fraud has occurred.

Large promoters typically gain the lion’s share of HYIP proceeds at the expense of their recruits. The operators of the schemes may siphon millions of dollars along the way even as they make classic Ponzi payouts to promoters to create an air of legitimacy.

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24 Responses to “REPORT: TelexFree Diverted $88 Million After Brazilian Judge Blocked Payments”

  1. tudo vai dar certo empresa seria sempre cumpriu com as obrigações

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  2. marcelo pedro: tudo vai dar certo empresa seria sempre cumpriu com as obrigações

    Quick note: I may approve Portuguese posts from time to time, given the TelexFree ties to Brazil.

    For translation:

    http://translate.google.com/

    The translations may seem stiff and may lack the subtleties.

    Patrick

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  3. admin: Quick note: I may approve Portuguese posts from time to time, given the TelexFree ties to Brazil.

    For translation:

    http://translate.google.com/

    The translations may seem stiff and may lack the subtleties.

    Patrick

    He said “everything will be alright, it’s a honest company and has fulfilled its obligations until now”

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  4. Telexshit is a Ponzi Scheme in Brazil and worldwide. Proof? The business core is just new enrollments (finite – has an end). The expensive and un-usefull product they sell, is just a camouflage (not even Telexshit promoters know about Telexshit voip product). Telexshit scammers receiving money today, will defend the scheme to the death as long as they can… of course, because they will receive tons of money from the victims.
    PLEASE SOMEONE STOP THESE PEOPLE IN BRAZIL AND WORLDWIDE.

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  5. Another ponzi, and people try to sell like it is the best thing in the world, also I find out is related to a church which has been investigated in Brazil for many years known as Igreja Universal do Reino de Deus in english UCKG Universal Church of Kingdom of God, be careful!

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  6. Wow this is very alarming news and i thought it was legit. Well i guess i’ll stick to my [back-door spam bid for different “program” deleted by PP Blog] I know that’s legit and they [deleted by PP Blog].

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  7. The whole Federal Reserve Banking System is the biggest pyramid scheme of all time! Why don’t you write about/ investigate that?! Everything else is but a small shadow compared to that..

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  8. I have a question here, if in Brazil found Telexfree illegal as MLM scheme while in the united state still in judging state. so it differ from one country to another? And how long this scheme last in Brazil till it was found probs?

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  9. Hello Daro,

    A lack of action — perceived or real — against TelexFree in the United States should not be interpreted to mean TelexFree is operating lawfully in the United States.

    I am not sure if TelexFree is under investigation in the United States. But similar “programs” have been shut down in the United States.

    Patrick

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  10. Thank Patrick

    Anyway are you one of the promoter for Telexfree?

    I had another concern over Telexfree profit, if for example i join as promoter which cost me 1450$ and i could break even after 4 months,and the next 8months will be my profit, so where is the money for those 8months come from? if there is no sell at all during that time.

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  11. Daro: Anyway are you one of the promoter for Telexfree?

    No.

    Daro: I had another concern over Telexfree profit, if for example i join as promoter which cost me 1450$ and i could break even after 4 months,and the next 8months will be my profit, so where is the money for those 8months come from? if there is no sell at all during that time.

    I believe TelexFree is a money-circulating scheme and a classic Ponzi scheme where the money for affiliate “earnings” is sourced from other affiliates.

    Daro: Thank Patrick

    You’re welcome, Daro.

    Patrick

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  12. telexfree started back in november 2012 here in US. HOw long do you think it will last?

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  13. Hi Patric,

    I live in Tanzania and these people have come to my country. How legit are they? Is it a ponzi scheme? They say contracts are normally 1 year. Is it true people still got paid after they got their money back?

    Taira

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  14. Taira: I live in Tanzania and these people have come to my country. How legit are they?

    Hello Taira,

    If TelexFree is in Tanzania, I’d say the Tanzanian people are at great risk of being plundered. I believe TelexFree is a Ponzi scheme that is being promoted in part by serial scammers from other Ponzi schemes.

    Patrick

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  15. God bless you! Articles like that may help people to not get into this Ponzi scheme. It’s about basic mathematics, even if they sell their entire stock of VoIP’s accounts, the business still working with negative amount of money. So, it’s not sustentable, and the money they earn is clearly from new admissions.

    Keep the good work, Patrick.

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  16. If you look into the ads promoters post every day – you will see they post ads for large tech companies such as IMB, Apple, Windows, Nexus, Samsung etc. These companies are compensating Telex for the ads or else telex wouldn’t last very long. Also Telex now has sponsors who advertise on the telex site, who also provide income to the company.
    So don’t write it off, its working for thousands upon thousands of legitimate and hardworking people.
    Corporate America and the stock market is more of a ponzi scheme, as is Obamacare, and other gov’t agencies. Only at least with this you will see your money back! Don’t you get tired of paying for other people’s huge bonuses? Did you know over half the members of the senate and house are Millionaires and have better insurance than most of the people they represent? You want to complain about pyramid schemes? We pay for these crooks to live large while we slave at our jobs everyday hoping to get out of debt and retire before we die. It’s total BS how our government is rich while we are poor.

    Take control and sign up for telex. I’ve already made $2000 in first 2 weeks. This is NOT a joke.

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  17. b: If you look into the ads promoters post every day – you will see they post ads for large tech companies such as IMB, Apple, Windows, Nexus, Samsung etc.

    If this is true, what possible sense does it make for TelexFree promoters to post ads for IBM, Apple, Microsoft (Windows), Nexus (Google) and Samsung? Isn’t it the theory that the ad-posting requirement drives traffic to TelexFree?

    Beyond that, Microsoft owns Skype. Why would TelexFree reps be posting ads for a competitor?

    b: These companies are compensating Telex for the ads or else telex wouldn’t last very long.

    I’d suggest you ask TelexFree to show you receipts that show TelexFree is being compensated by IBM, Apple, Microsoft (Windows), Nexus (Google) and Samsung.

    If an American promoter tells a TelexFree recruit that a payment of $15,125 to TelexFree for a “contract” will return three or four times that in a year, who is paying for the return? You seem to be suggesting that IBM, Apple, Microsoft (Windows), Nexus (Google) and Samsung are.

    b: So don’t write it off, its working for thousands upon thousands of legitimate and hardworking people.

    Zeek Rewards “worked,” too. The court-appointed receiver says it might have created more victims than any Ponzi scheme in U.S. history.

    b: Corporate America and the stock market is more of a ponzi scheme . . .

    Forgive me — but horse****.

    b: Did you know over half the members of the senate and house are Millionaires and have better insurance than most of the people they represent?

    An approach that marries envy and demonization is very common in HYIP Ponzi Land. It is, however, immaterial to the issue of whether TelexFree is a pyramid scheme.

    b: You want to complain about pyramid schemes? We pay for these crooks to live large while we slave at our jobs everyday hoping to get out of debt and retire before we die. It’s total BS how our government is rich while we are poor.

    I’d agree that debt is a problem in America and that millions of people are struggling. Plenty of people would agree with your assessment that how the government is being run is “total BS.”

    However, if America consisted of only 1,000 people — and if all 1,000 people agreed the way the government is being run is “total BS” — it would be immaterial to the issue of whether TelexFree is a pyramid scheme.

    b: Take control and sign up for telex.

    Signing up for TelexFree is hardly “taking control.” In my view, signing up is the equivalent of playing with dynamite. Encouraging others to sign up is encouraging them to play with dynamite.

    b: I’ve already made $2000 in first 2 weeks. This is NOT a joke.

    Plenty of Zeekers could make the same claim. They’re getting lawyered up even as we speak.

    Patrick

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  18. its called economics, most business are set up to get the few richer while the peasant or the bottom feeders never make it. its an illusion set for you. wake the hell up people!!!. Telexfree is awesome and I get paid weekly. 12k/month, financial stable and debt free . Im finally free from this system called life. American dream…. you’ll have to be a sleep to dream while the a wake are living. most CEO’s salary are in the Millions while the workers make a fraction., anyways, enough with the rambling, if you are interest in another opportunity my telex free promotors, check this out

    [Deleted by PP Blog]

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  19. And of course, you are wrong. Scammer school has taught you well.

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  20. Patrick:

    I happen to be in Africa at the moment (Kenya), but was recently in Tanzania. In fact, met with some top law enforcement people and the topic of conversation was TelexFree/TelexFree International and why it’s an illegal pyramid scheme.

    Just recently there was a newspaper article in Tanzania and also a story on a Dar es Salaam radio station warning people about TelexFree being an illegal pyramid scheme.

    I also have an analysis from a legal perspective Patrick that people can read at http://www.telexfreereport.the6parameters.com (Feel free to use it if you’d like. It appears I might have to made some slight modifications to it as TelexFree International is in the process of making some changes to their program, no doubt to try and pre-empt the charges they know are likely coming from U.S. regulators…

    Taira can reach me for more info at kenstewartcalling@hotmail.com

    By the way, Patrick, if there’s anything I need to add to the analysis I mentioned above, email me and I’ll be sure to incorporate it into the overview.

    Ken

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  21. The biggest ponzi scheme ever, but I give it to those who go in early because they’re making huge money.

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  22. every business has risk, even your mom took risk to brought you in the world.
    Iam Tanzanian. no radio station has said something bad about telexfree.
    If telexfree operates in russia, usa, german uk, etc.
    i dont think if you guys are clever than these nations.

    should understand well , what is ponz, and pyramid schemes,
    perhaps you guys you want to use telexfree in bad way to create online traffic in your sites.
    telexfree forever

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  23. you’re not getting your money back.

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  24. Well, I see the comments have dried up. You probably have all heard down that the SEC and DOJ have shut down TeleFree as a pyramid scheme. Total scam. The CFO was caught trying to flee the offices with $13 million in cashiers checks. They filed for bankruptcy earlier this month. I am surprised that their site is still up. They payment system provider dropped them earlier. $300 million scam with $30 mil directly into their pockets.
    Those who got in early made money only because later investors were fleeced.

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