RIPPLING NIGHTMARE: Has TelexFree Been Dwarfed By Another MLM Ponzi Scheme? Better Living Global Marketing Reportedly Says It Has Taken In $3.3 BILLION — And Is Experiencing ‘Cash Flow Problem’

ponzinews1EDITOR’S NOTE: In a story dated today, BehindMLM.com has broken down claims made in a recent video in which Better-Living Global Marketing (BLGM) figure Luke Teng appears. The potential criminality at BLGM, purportedly based in Hong Kong, not only is alarming, it is stunning. Even more disconcerting is the level of disconnect surrounding the scheme, which had a Zeek Rewards-like business model and purportedly was in the penny-auction business . . .

Hang on to your hats! There could be an active MLM HYIP Ponzi scheme that is even larger than TelexFree, which allegedly reached across national borders to take in $1.2 billion before collapsing in April 2014.  The alleged TelexFree sum would rival the epic Scott Rothstein Ponzi and racketeering scheme in Florida and potentially would make TelexFree the fifth largest Ponzi scheme of all time, regardless of the Ponzi business model used. (Like the shrimp delicacies memorably recounted by “Bubba Blue” in the movie “Forrest Gump,” Ponzi schemes come in many forms.)

In 2012, prior to the actions against TelexFree by various law-enforcement agencies, PonziTracker.com rated Rothstein’s caper as the 4th largest of all time in terms of investor losses, estimated at $1.4 billion. Only the Bernard Madoff (est. $17.3 billion), Allen Stanford (between $4.5 billion and $6 billion) and Tom Petters schemes (est. $3.7 billion) were larger.

BehindMLM.com is reporting today that BLGM’s Luke Teng claims to have set a “world record” for intake in his particular sphere of MLM.

If the claim attributed to Teng is correct — that BLGM has taken in $3.3 billion — it could blow both Rothstein and TelexFree out of the water and put BLGM in the same Ponzi seas as Tom Petters and his $3.7 billion scheme. Put another way, BLGM could be the fourth-largest Ponzi scheme of all time, regardless of form.)

If an online Ponzi scheme operating across national borders (including the borders of the United States) can put $3.3 billion on the table in two or so years of operation and creep up on Petters, are we on the cusp of the once unthinkable? Could MLM HYIP schemes rival or even eclipse Stanford and Madoff?

At $1.2 billion, TelexFree already has created a litigation quagmire that rivals the quagmires surrounding the Madoff, Stanford, Petters and Rothstein schemes. BLGM could go the same way. Both BLGM and TelexFree even could eclipse the Top 4 in terms of litigation and logistical nightmares, because millions of victims from dozens and dozens of nations are apt to exist. That condition was not present in the Madoff, Stanford, Petters and Rothstein schemes.

Zeek Rewards — the sixth-largest Ponzi scheme in history, according to the 2012 PonziTracker list — created a litigation monster that could be surpassed by both BLGM and TelexFree.

And yet willfully blind MLM hucksters and serial scammers still are pushing cross-border fraud schemes. The numbers alone show that the world never has seen such felonious self-indulgence at the street level of dealers:

  • Zeek. Collapsed in 2012 after less than two years of operation. Victims: 800,000 to 1 million (est.). Dollar volume: $897 million. Source for dollar volume: U.S. court filings.
  • TelexFree. Collapsed in April 2014 after operating for a little better than two years. Victims: 700,000 to 1.5 million (est.). Dollar volume: $1.2 billion. Source: TelexFree figures cited in Massachusetts Securities Division action in April 2014.
  • BLGM: Operational, but reportedly experiencing cash-flow problem and not paying out or making selective payouts. Victims: Unknown number, but may rival Zeek and TelexFree. Dollar volume: $3.3 billion. Source: Luke Teng video cited by BehindMLM.com.

A Rippling Nightmare

The numbers are hardly the sole concern. As Behind MLM.com reported today, citing remarks made by Luke Teng in the BLGM video (italics added):

[8:13] Some leaders are still making good money. Because the leaders are taking cash from the new members and they use it to give them ecash.

So, that’s still a way for you to make money.

Our take: If true, this is beyond horrifying. It is alleged TelexFree created conditions that permitted members to transact business outside of the system, and some members even may have created an exceptionally dangerous black market for TelexFree’s earning units, which were known as “AdCentrals.”

As the PP Blog reported on March 24, 2014, an ad offering TelexFree AdCentrals at a firesale price appeared on an auction site. Viewers were encouraged to buy a bundle of 550 AdCentrals for $16,760. The asking price purportedly reflected a discount of $8,190 (33 percent), and the purchaser purportedly would earn $110,000 from TelexFree in the next year.

The situation in both TelexFree and BLGM is reminiscent of the truly disturbing Evolution Market Group/FinanzasForex scheme described in 2010 by federal prosecutors in the Middle District of Florida.

As the PP Blog reported at the time (italics added):

. . . there were schemes within schemes in a tangled web of domestic and international deception that featured dozens of bank accounts, shell companies and various fronts for money-laundering enterprises, including companies purportedly in businesses such as real estate and car washes.

The scheme was so corrupt, according to court filings, that some investors were told that, in order to leave the program whole, they had to recruit new investors, have the new investors pay them directly — and use the proceeds from the new investors to “recover” their initial outlays.

In short, if you wanted to recover your EMG/Finanzas money, you had to steal your way out of the “program” by gathering new cash from incoming recruits and keeping it.

Some of the money in the EMG/FinanzasForex case allegedly was tracked to the narcotics trade.

Based on the BehindMLM.com report, it also appears that BLGM may be trying work a second form of Ponzi fraud into its existing scheme. This would appear to involve an adverting rotator of some sort, something consistent with the AdSurfDaily MLM Ponzi scheme in 2008. In 2012, while sharing promoters in common with Zeek, a “program” known as JSSTripler/JustBeenPaid appeared to be trying to transition from a straight-line HYIP fraud into a fraud named “ProfitClicking” that would introduce an “advertising” function. Part or all of the earlier JSS/JBP fraud appears later to have morphed into something called “ClickPaid.”

So, in some ways, BLGM could be modeling ASD, JSS/JBP and other reload schemes to sustain its Ponzi deception.

Teng also may be channeling a notable delusion of now-jailed ASD Ponzi schemer Andy Bowdoin.

Indeed, according to the BehindMLM.com report, Teng is suggesting he may start his own bank.

Before Bowdoin was arrested in 2010, he claimed ASD was looking at acquiring an interest in a bank in South America and creating its own payment processor.

BLGM appears to have gained a head of steam in part from cash-gifting schemers in a “program” called “BlessingGoldClub” and also from former enthusiasts of the Zeek and Profitable Sunrise fraud schemes.

About the Author

4 Responses to “RIPPLING NIGHTMARE: Has TelexFree Been Dwarfed By Another MLM Ponzi Scheme? Better Living Global Marketing Reportedly Says It Has Taken In $3.3 BILLION — And Is Experiencing ‘Cash Flow Problem’”

  1. Patrick, you are comparing apples to oranges.
    Like a Hong Kong ponzi to the ratings amongst purely US ponzis.
    There were plenty massive ponzis in Russia and Asia which never reached US.
    I believe Mavrodi’s $10b MMM ponzi in 1994 would be #2 if you mix it in US ratings.

    for reference: http://en.wikipedia.org/wiki/MMM_(Ponzi_scheme_company)

      (Quote)

  2. NikSam: Patrick, you are comparing apples to oranges.

    Not so sure I agree, NikSam. BLGM was promoted from the United States by U.S. citizens. It may be based in Hong Kong, but Zeekers and Profitable Sunrise people from the U.S. promoted it here. If U.S. promoters followed the often-employed script, they set up U.S. trusts and corporations sole and purported religious entities and LLCs into which to dump their “earnings” and route payments.

    That gives BLGM exposure here: U.S. tentacles to feed the U.S. “leader” machine and the Hong Kong machine. Put another way, U.S. co-conspirators, making BLGM a U.S. Ponzi scheme.

    It could be true that BLGM tried to be stateless (“offshore everywhere”) or as close is it could become to being stateless, but that didn’t work for BCCI because of the U.S. tentacles.

    http://en.wikipedia.org/wiki/Bank_of_Credit_and_Commerce_International

    And it also didn’t work for Profitable Sunrise for the same reason: U.S. tentacles.

    It is possible that BLGM could face the Profitable Sunrise fate: a series of C&Ds at the state level, and a final punctuation mark by the SEC.

    NikSam: There were plenty massive ponzis in Russia and Asia which never reached US.
    I believe Mavrodi’s $10b MMM ponzi in 1994 would be #2 if you mix it in US ratings.

    Thanks for the link.

    Patrick

      (Quote)

  3. BLGM: Operational, but reportedly experiencing cash-flow problem and not paying out or making selective payouts. Victims: Unknown number, but may rival Zeek and TelexFree. Dollar volume: $3.3 billion. Source: Luke Teng video cited by BehindMLM.com.

    ——

    BLGM stopped paying money OUT in October / November 2013. The virtual investments have continued to grow exponentially, so you can probably divide the amount with a factor of 32 = around $100 million total investments, but probably less than that.

      (Quote)

  4. Hi, Patrick. I believe you should take a look on the following video about this subject:

    https://www.youtube.com/watch?v=qxLl1YsMl48

    It was released today, and it exposes clearly Carlos Costa’s lies you wrote about here. It shows a zoom in on the sheets of paper Costa shows, proving almost didactically that nothing he says is actually written on sheets he shows.
    It’s got well written English subtitles. Everyone will understand. I hope you and the readers of this article are insterested in it.

      (Quote)

Leave a Reply