**[UNCONFIRMED]** Report In Brazil Says Prosecutors Have Asked U.S. Court To Block TelexFree Accounts, New Signups **[UNCONFIRMED]**

telexfreelogo**[UNCONFIRMED]** A report in Brazilian media translated by Google Translate from Portuguese to English says that prosecutors in Brazil have asked a U.S. court to prevent new members from joining TelexFree and to block the accounts of TelexFree figures Carlos Wanzeler, James Merrill, Carlos Costa and Lyvia Wanzeler.

The PP Blog could not immediately confirm the report. If it is true, it could mean that law-enforcement agencies in Brazil have contacted their U.S. counterparts and asked them to begin the process of investigating a potential seizure of TelexFree-related funds that may be in the United States and perhaps to disable or otherwise block the functionality of the TelexFree web domains. The United States has said on various occasions that it is interested in fostering partnerships with law-enforcement agencies across the globe to combat commercial fraud online.

As of 1:03 p.m. EDT today in the United States, the TelexFree websites remained online and appeared still to be capable of enrolling recruits.

TelexFree has said it has U.S. arms in the states of Massachusetts and Nevada. Some U.S. afffiliates of TelexFree also appear to have formed business entities in California and Florida. Some TelexFree affiliates have claimed the “opportunity” did business through Bank of America, TD Bank and ProPay. (See July 8, 2013, PP Blog report on some of the claims.)

Despite allegations in Brazil that TelexFree was conducting a massive pyramid scheme and that a Brazilian judge and prosecutor had been threatened with death, TelexFree nevertheless held a rah-rah session in California late last month in which an MLM pitchman appears to have tried to sustain the scheme by telling a joke about “Carlos Danger,” an online identity purportedly used by U.S. Democratic politician Anthony Weiner. A companion TelexFree promo playing in the United States on YouTube claims that people who send $15,125 to TelexFree can expect to profit to the tune of more than $42,000 in a year.

TelexFree has a presence on well-known Ponzi-scheme forums such as TalkGold, MoneyMakerGroup and DreamTeamMoney. The forums previously were used as staging grounds for the Legisi Ponzi scheme, the AdSurfDaily Ponzi scheme, the PathwayToProsperity scheme, the Zeek Rewards scheme and the Profitable Sunrise scheme, among others. The SEC has described Zeek as a $600 million Ponzi- and pyramid fraud. The agency has described Profitable Sunrise as a fraud that may have gathered tens of millions of dollars through a series of accounts. Federal prosecutors in Illinois have described PathwayToProsperity as a fraud that made its way into at least 120 countries.

In May, the United States indicted the Liberty Reserve payment processor and forced it offline, amid allegations that Liberty Reserve and some of its operators had engaged in a $6 billion money-laundering conspiracy. In June 2011, U.S. Attorney General Eric Holder described the amount of money being stolen online as “staggering.”

“In recent years, we’ve seen clear, and alarming, advances in the sophistication and commercialization of crimes involving electronic networks,” Holder said.  “And the staggering volume of money being stolen online today has the potential to threaten not only the security of our nation — but the integrity of our government, the stability of our economy, and the safety of our people.”

Nearly a year later — in May 2012 — INTERPOL said that “[Eighty] per cent of crime committed online is now connected to organized gangs operating across borders.”

In October 2012, Lisa Monaco, then-Assistant Attorney General for National Security, said that cyber intrusions may have resulted in “the greatest transfer of wealth in history.”

Monaco is now President Obama’s chief counterterrorism adviser.

Some TelexFree members have claimed that the purported “opportunity” has gathered in excess of $300 million. Among other things, TelexFree has purported to be in the hotel-development business in the run-up to the 2014 World Cup and the 2016 Summer Olympics in Brazil. TelexFree, an MLM business, also purports to be in the VOIP telephone business.

Many HYIP “opportunities” that use an MLM sales model have members and promoters in common and promise absurd rates of return. The practice has led to questions about whether groups of MLMers — however loosely associated — may be engaging in willful blindness and causing banks and payment processors to become warehouses for fraud proceeds.

The ASD, Zeek, Legisi, PathwayToProsperity and Profitable Sunrise HYIP schemes may have gathered on the order of $1 billion, court filings suggest. Alleged PathwayToProsperity operator Nicholas Smirnow is listed as wanted by INTERPOL. So is Robert Hodgins, who reportedly once provided payment services to ASD and is listed as an INTERPOL fugitive in a money-laundering case allegedly involving the offloading of narcotics profits in Colombia.

See Aug. 12 TelexFree report on BehindMLM.com.

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7 Responses to “**[UNCONFIRMED]** Report In Brazil Says Prosecutors Have Asked U.S. Court To Block TelexFree Accounts, New Signups **[UNCONFIRMED]**”

  1. Quick note: As of the time of this comment, the PP Blog is being spam-bombed from IPs in Venezuela, the Republic of Korea and Russia.

    They are targeting this post from Aug. 19, 2012:

    http://patrickpretty.com/2012/08/19/post-zeek-guest-column-who-are-these-experts-anyway/

    Patrick

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  2. Quick note: At about 11:59 a.m. today, the post below was targeted in a spam-bombing. It appeared to be IPs from China:

    http://patrickpretty.com/2013/05/03/purported-sovereign-citizen-leads-utah-troopers-on-freeway-chase-and-is-arrested/

    Patrick

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  3. Quick note: At about 11:51 a.m. today, the post below was targeted in a spam-bombing. It appeared mostly to be IPs from China, although IPs from Hungary and Mexico also appeared:

    http://patrickpretty.com/2013/02/09/new-haven-register-witness-says-alcoholics-anonymous-members-were-recruited-for-cash-gifting-scheme-and-that-largest-conflict-ive-ever-seen-in-aa-ensued/

    Patrick

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  4. Do any groups ever claim credit for attacks on your blog? I wonder who and what specifically leads to someone attempting to bring your site down with bots or comment spam and why it would be more frequent some times and less others.

    The posts above are about some offline scams, some sovereign citizen nonsense and a guest post about Zeek Rewards.Doesn’t seem to be connected and they aren’t your most recent posts either. I wonder if they were chosen at random.

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  5. Shark: Do any groups ever claim credit for attacks on your blog?

    Hello Shark,

    In April 2011, I received a claim of responsibility from a self-described “master of execution” for HYIP schemes. The PP Blog was described as “your little vicious blog.”

    http://patrickpretty.com/2011/10/26/statement-pp-blog-experiencing-unusual-traffic-pattern-during-anniversary-week-of-last-years-crippling-attack-blog-confirms-it-received-a-claim-of-responsibility-in-april-for-springtime-outage/

    Shark: I wonder who and what specifically leads to someone attempting to bring your site down with bots or comment spam and why it would be more frequent some times and less others.

    I have wondered the same thing. And I’ve wondered why RealScam.com was targeted with DDoS attacks earlier this year — after the PP Blog was targeted in 2010.

    Shark: The posts above are about some offline scams, some sovereign citizen nonsense and a guest post about Zeek Rewards.Doesn’t seem to be connected and they aren’t your most recent posts either. I wonder if they were chosen at random.

    For whatever reason, is is not uncommon for bots to arrive at the PP Blog simultaneously in a wave and try to pull up the same “old” story. Today, for instance, it has been wave after wave — and not just the stories referenced above.

    As to the apparent random nature of the stories targeted, well, it doesn’t always feel random to me. It feels calculated.

    In any event, the more time I spend thinking about/monitoring these things, the less time I have for reporting. In one way or another, the botfloods and various bids to chill my reporting affect the Blog’s ability to deliver information while also driving up costs.

    Patrick

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  6. IO think they are targeting other posts to throw off who might be doing it. If they attacked a specific recent post of a Ponzi being exposed, it would readily be known which group was behind it. By picking other unrelated posts, they are hiding what they are truly upset about and don’t want revealed. Just my 2-cents worth.

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