REPORTS: TelexFree Blocks Members’ Access To Back Offices, Claims Hacking Attempts

UPDATED 6:23 P.M. EDT (U.S.A.) There are at least three reports in Brazilian media today that say TelexFree has blocked members’ access to their back offices.

A company attorney said the blockages were necessary because hackers had attempted an intrusion, according to reports in Portuguese translated to English by Google Translate.

Here is a link to one of the reports, with the corresponding Google translation. (Please note that Google translations often are imperfect, may appear stilted and may lack subtleties of language.)

Narratives about hackings often accompany HYIP schemes. The AdSurfDaily Ponzi scheme in the United States once claimed it could not make payments because hackers had stolen $1 million. ASD President Andy Bowdoin never reported the alleged hacking bids to police, federal prosecutors said.

In 2012, reports surfaced that the JSS Tripler/JustBeenPaid scheme that purported to pay 730 percent a year (precompounding) had been targeted by hackers. There also were reports in 2012 that accounts at Zeek Rewards (1.5 percent a day) had been hacked and that at least one individual had presented a bogus financial instrument to Zeek.

TelexFree pitchwoman Faith Sloan reported this (see italicized paragraph below) in a Blog post titled “TelexFREE Update: July 15, 2013 with Steve Labriola” that was referenced July 16 in a reader comment at BehindMLM.com.

“There were an increase in number of cashouts last Tuesday which caused the women in the office to get a huge increase in their workload. They will continue pushing out money to our bank accounts Today and Tomorrow. So be patient. He emphasized that this has absolutely nothing to do with Brazil.”

Even as reports surfaced that a TelexFree had blocked members' access to their back offices as a safeguad against hackers, the "opportunity" says a California  extravaganza is still set for July 26 and 27.

Even as reports surfaced that TelexFree had blocked members’ access to their back offices as a safeguard against hackers, the “opportunity” says a California extravaganza is still set for July 26 and 27.

TelexFree has been under investigation in Brazil for weeks and appears to have been blocked by a court order in the state of Acre from making payments to members in Brazil. Now, some affiliates appear to be questioning whether the denial of access to their back offices means that data is being destroyed or records about money owed to affiliates by TelexFree are being changed.

The circumstance at least suggests that TelexFree continued to make payments to Americans and has been hit with a flood of cashout requests by U.S.-based affiliates concerned about the government actions in Brazil. Put another way, TelexFree could be facing an American run on its bank accounts.

Some HYIP schemes have been known to block redemption requests to fend off a bank run, but the precise circumstance TelexFree is facing is unclear. Hackings can and do occur.

Some TelexFree affiliates have claimed the “program” was using Bank of America and TD Bank in the United States to gather funds. That may have changed in April 2013 at least with respect to Bank of America, when TelexFree affiliate reports quoting Labriola surfaced that TelexFree was “pulling out of Bank of America.”

No reason was given for TelexFree’s purported decision to leave Bank of America. In May 2012, the Zeek Rewards “program” reported mysteriously that it was ending its relationship with two banks. About three months later, the SEC accused Zeek of conducting a $600 million Ponzi and pyramid scheme from North Carolina.

TelexFree lists the states of Nevada and Massachusetts as its bases of operation under the names TelexFree LLC and TelexFree Inc.

Some individuals associated with TelexFree appear also to have set up companies that use the TelexFree name. Records in California show entities with names such as ALL-IN TELEXFREE 247 LLC, LIVING-THE-DREAM TELEXFREE 247 LLC and RAIN-MAKER TELEXFREE 247 LLC. Records in Florida, meanwhile, show an entity known as TELEXFREE MARKETING INC.

Whether the United States has opened a probe into TelexFree’s activities is unknown.

Some TelexFree affiliates have claimed that a payment of $15,125 to TelexFree for the purchase of a “contract” results in an income of at least $1,100 a week for a year. TelexFree is one of several “programs” that have been targeted at victims of Profitable Sunrise, which the SEC described in April 2013 as a pyramid scheme that may have collected tens of millions of dollars.

 

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7 Responses to “REPORTS: TelexFree Blocks Members’ Access To Back Offices, Claims Hacking Attempts”

  1. Looks as though the prosecutor’s office in Acre wanted to make it clear that TelexFree — and not the government — blocked access to the back offices:

    http://translate.google.com/translate?hl=en&ie=UTF8&prev=_t&sl=auto&tl=en&u=http://g1.globo.com/ac/acre/noticia/2013/07/bloqueio-escritorios-da-telexfree-nao-e-decisao-judicial-diz-mp-ac.html#submit

    Patrick

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  2. Just do the math and it’s very obvious what TelexFree is. My God, how can people believe in this crap.

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  3. Quick note: There are reports in Brazilian media today that TelexFree wants the state court in Acre to unlock TelexFree accounts in Brazil in (apparent) exchange for $660 million (U.S.) that would serve as some sort of guarantee of the company’s viability.

    The Google translations from Portuguese to English are a bit hard to follow. Here is one of the reports, via Google Translate:

    http://translate.google.com/translate?hl=en&sl=pt&tl=en&u=http%3A%2F%2Feconomia.ig.com.br%2F2013-07-21%2Ftelexfree-oferece-quase-r-660-milhoes-a-justica-para-voltar-a-funcionar.html

    This seems like a sort of maximum hail Mary (to use a football comparison), but it does raise some interesting questions:

    * If TelexFree has $660 million U.S., where is its current location?

    * Is it now (or was it ever) in the United States — and who has control over those purse strings?

    * How would the turnover of $660 million to the Acre court make TelexFree any less of a Ponzi/pyramid scheme if it is creating liabilities with its built-in investment element?

    * Will we next see the TelexFree equivalent of AdSurfDaily’s “rebates aren’t guaranteed” defense?

    * Is $660 million all the cash TelexFree has available? If so, how would it continue as a going concern? If not, where is the rest of the money and what is TelexFree’s intent with that money?

    * How would this $660 million affect TelexFree’s purported partnership to build 500 hotels in Brazil — and why is a purported VOIP business also purportedly in the land-development business in advance of the World Cup and the Summer Olympics?

    This reminds be a bit of AdSurfDaily’s bid to get the U.S. court to free up money and approve a monitoring plan. The judge said no — more or less for a couple of reasons: any money freed could be dissipated, meaning that it wouldn’t be available to compensate victims; a continuation of ASD’s business under court monitoring meant that more money potentially could flow into a Ponzi scheme.

    If TelexFree truly has $660 million (or more), it is truly alarming. That puts it on a Zeek-like scale and makes it roughly 5.5 times larger than ASD in pure dollar terms. As the PP Blog has reported previously, some promos for TelexFree claimed that a payment of $15,125 could fetch an income of at least $1,100 a week for a year.

    There have been reports in Brazilian media that people basically were liquidating themselves to join TelexFree. The same kind of thing happened with ASD and Zeek.

    Patrick

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  4. Patrick is it ok if I share this article on Facebook?

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  5. ribshaw: Patrick is it ok if I share this article on Facebook?

    Sure, ribshaw. Thanks for asking.

    Patrick

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  6. There are reports in Brazilian media today that TelexFree supporters blocked access the the airport in the capital city of Brasilia:

    http://translate.google.com/translate?hl=en&sl=pt&tl=en&u=http%3A%2F%2Fg1.globo.com%2Fdistrito-federal%2Fnoticia%2F2013%2F07%2Fprotesto-em-apoio-telexfree-fecha-acessos-ao-aeroporto-de-brasilia.html

    Patrick

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