Small Sampling Of TelexFree ‘Net Losers’ Paints Picture Of Massive Cash Losses And Potentially Horrifying Loss Of Future Purchasing Power

TelexFree pitchman Sann Rodrigues, one of four promoters accused by the SEC of fraud. Rodrigues has ties to Massachusetts, Florida and Brazil.

TelexFree pitchman Sann Rodrigues, one of four promoters accused by the SEC of fraud. Rodrigues, a defendant in an earlier SEC case that alleged pyramid-scheming and affinity fraud,  has ties to Massachusetts, Florida and Brazil.

UPDATED 3:33 P.M. EDT SEPT. 22 U.S.A. A small subset of data from 95 self-identified “net losers” in the TelexFree MLM scheme shows that they lost a whopping average of $27,578 each, according to an analysis by the PP Blog of court filings in the TelexFree bankruptcy case.

The average could be higher because investment sums for four of the 95 were not immediately available. Particularly concerning is a claim from the 95 losers that there may be “1,000,000 or more victims” of TelexFree’s fraud.

Viewed in microcosm, the data from the 95 losers paint a picture of an incredible loss of purchasing power across U.S. states and across the Atlantic Ocean into Italy — all from an association with TelexFree. At a minimum, the data suggest that TelexFree could cause certain U.S. investors to lose their nest eggs or even slip deeper into poverty.

When compared to the U.S. poverty guidelines as published by the U.S. Department of Health & Human Services earlier this year, TelexFree eviscerated wealth among the TelexFree group of 95 at better than two times the U.S. poverty wage of $11,600 for one-person households in 2014. With average TelexFree losses among the group of 95 at $27,578, the 2014 poverty-wage of $27,910 for a five-member household nearly was matched. (The poverty guidelines referenced in this story are for the 48 contiguous U.S. states and the District of Columbia.)

What this means, in essence, is that certain TelexFree members who perhaps were living in poverty or had a meager standard of living before they encountered TelexFree have lost capital at a rate that further tightens their economic shackles. Lost purchasing power means a lower standard of living for many Americans already living on tight budgets and may translate into things such as automobile repossessions and mortgage foreclosures.

The bitter irony is that TelexFree — like many HYIP schemes — was positioned as the remedy for economic ills, perhaps particularly the ills of people already at the edge of individual and family disaster. In a bizarre sales strategy, TelexFree appears to have targeted the impoverished people of Haiti to sell a purported credit-repair program to impoverished people in the United States and elsewhere.

Some purported TelexFree “leaders” appear to have had access to a “private jet” that traveled from nation to nation to line up marks.

In many cases, according to the group of 95, the losses eroded or eviscerated the “life savings” of TelexFree members.

Some TelexFree members were lured into the scheme by promises that $289 would return $1,040 in a year, $1,375 would return $5,200 and $15,125 would return $57,200. (Investors at the $1,375 level appear later to have been pitched to buy in at $1,425. Investors at the $289 level appear later to haven been pitched to buy in at $299. See story below for a reference to buy-ins at the $1,375 and  $1,425 levels among the group of 95. Many TelexFree members bought in at much higher levels.)

“Everybody gets paid” was a common theme. The “program” even reached into other nations with severe economic challenges such as Peru and Rwanda.

Of the group of 95, about 38 listed addresses in Massachusetts, TelexFree’s U.S. base. One individual in Everett, Mass., listed a loss of $427,500. Another person in Saugus, Mass., listed a loss of $345,000. Two other individuals with the same address in Revere, Mass., listed combined losses of $350,000 — $175,000 each. A person in Woburn, Mass., listed a loss of $72,800. Another person in Chelmsford, Mass., listed a loss of more than $58,777.

In nearby Connecticut, a person in Stratford listed a loss of $42,000. A person in Monroe listed a loss of $35,625.  At the same time, a person in Trumbull listed a loss of $19,950. Also in the New England region, a person in Nashua, N.H., listed a loss of $16,000.

To the south of Massachusetts, an individual in Waleska, Ga., listed a loss of more than $109,465. A person in Raleigh, N.C. listed a loss of more than $81,889. To the west, two persons with different addresses in Las Vegas listed losses of $50,000 — $25,000 each. Another person with a Las Vegas address listed a loss of $26,800. Yet another person in Las Vegas listed a loss of $17,175.

In April 2014 — after bringing an emergency action against TelexFree and alleging it was conducting a massive Ponzi- and pyramid scheme — the U.S. Securities and Exchange Commission alleged that the “program” mainly was targeted at “Dominican and Brazilian immigrants in the U.S.”

The SEC’s action occurred after authorities in Brazil — a Portuguese-speaking country — alleged that a TelexFree arm known as Ympactus was targeting investors there in a pyramid scheme.

The group of 95 now says that TelexFree also targeted the “Nigerian and Russian” communities, in addition to the Spanish- or Portuguese-speaking communities.

“. . . many Promoters do not speak English fluently,” the group of 95 says, adding that “creditor victims here are also undocumented immigrants residing in the United States, and may be thus extremely reluctant to directly participate in any formal proceedings, and also extremely reluctant to deal with a bankruptcy trustee or other official representative with duties other than solely to creditors. The bulk of the Debtors’ unsecured creditors cannot engage with these Chapter 11 Cases in any meaningful way.”

Court filings by the group of 95 now show that TelexFree also had a presence among people who speak Italian and have addresses in Italy. Several addresses in Italy proper appear in a document filed by the group of 95, including the address of a person said to have lost $21,375, a person said to have lost $11,400 and another person said to have lost more than $8,699.

Many others across the spectrum of the group of 95 suffered smaller losses that may be equally painful. The smallest sum lost by member of the group appears to be $900 — by a person in Deltona, Fla.  Another person in Deltona is said to have lost $1,645.

Other “small” sums lost by members of the group of 95 include $1,375 by a person in Bologna, Italy; $1,425 by a person in Las Vegas; another $1,425 lost by a different person in Las Vegas; $1,425 by a person in New Bedford, Mass; and $1,425 by a person in Weymouth, Mass.

Buy-in dollar sums from the low thousands to the multiple tens of thousands were common among the group of 95, which is seeking to form an official committee of unsecured creditors in the TelexFree bankruptcy case.

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