TELEXFREE: Promoters Tell Brazilian Prospects To Create Registration Address In England — And To Appear At Door Of Brazilian Supreme Court Judge

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UPDATED 12:25 P.M. EDT (U.S.A.) TelexFree, an alleged pyramid scheme operating as an MLM that has U.S. arms in Massachusetts and Nevada and effectively was shut down in June in Brazil (by court order in Brazil) but continues to operate elsewhere, seems on the cusp of cementing itself as a marquee example of cross-border fraud.

Several days ago, the company inexplicably began to publish the address of a purported office in the United Kingdom in Watford — near London. Today an apparent TelexFree promoter writing on a media site in Brazil appears to be instructing Brazilian affiliates to enroll with the firm by using any address in London, thousands of miles away. This coaching appears to originate from a hotmail address. (See story/comments thread in Portuguese; see translation of story/comments thread via Google Translate.)

The center of London is approximately 5,700 miles away from the center of Rio de Janeiro, the Brazilian city that will play host to the 2016 Olympics. London hosted the 2012 Olympics. There are dozens of pyramid-scheme probes under way in Brazil, in the run-up to the 2016 Summer Games.

Even more troubling than the suggestion that Brazilians should fabricate a London address to enroll in TelexFree is a suggestion from another apparent TelexFree affiliate on the same site in Brazil that affiliates should appear at the door of a judge of the Supreme Court of Brazil. It is unclear from the English translation of the post whether any protest aimed at the judge would occur at the Supreme Court or at his personal residence. Plenty of peaceful protests occur in Brazil. But a protest at the residence of a judge potentially would introduce the specter of menacing — something that was present in the AdSurfDaily Ponzi case in the United States.

Purported American “sovereign citizen” Kenneth Wayne Leaming — a figure in the ASD story — was convicted earlier this year of multiple charges, including filing bogus liens against public officials involved in the ASD case. The evidence in the case strongly suggested that Leaming intended to stalk the children of the Chief Justice of the United States at the school they attended — as part of a plot to serve paperwork on the Chief Justice.

TheTelexFree story is similar in certain key ways to the ASD story. For starters, some ASD members refused to believe that a crime had been committed against them and taunted prosecutors and the U.S. Secret Service with threats. There have been reports in Brazil of death threats against a judge and a prosecutor. Both the ASD and TelexFree schemes were targeted at Christians. Meanwhile, members of both “programs” were promised preposterous, unusually consistent returns. In the ASD case, the precoumpounding returns computed to an annual return in excess of 300 percent. Some TelexFree promoters have claimed that sending $15,125 to TelexFree results in a tripling or quadrupling of the money in a year.

Beyond that, it almost certainly is the case that some TelexFree affiliates also were pitchmen for ASD and for Zeek Rewards, an MLM “program” described by the SEC last year as a $600 million Ponzi- and pyramid scheme. This leads to questions about whether criminal MLM combines are driving business to purported “opportunities” despite the legal, financial and social consequences. In April 2013, the SEC said a “program” known as Profitable Sunrise was using a mail drop in England as part of a massive scam that used a series of offshore bank accounts potentially to fleece people of faith of millions and millions of dollars.

Now, TelexFree purports to be operating from England. The mere listing of a business address is not proof that no scam is occurring, despite repeated bids by HYIP schemes to create an air of legitimacy by publishing an address or registering it with a government. Profitable Sunrise, for instance, had a registered address. So did Zeek. So did AdSurfDaily. Both of the TelexFree addresses in the United States appear to be virtual offices or mail drops.

And TelexFree affiliates have been sending confusing messages for months on how to send money to the firm. This sometimes signals that money-laundering, wire fraud or another crime is occurring. Some of the TelexFree affiliate bids strongly resemble events at ASD — events that led to the criminal indictment and subsequent sentencing of ASD President Andy Bowdoin to a 78-month prison term. (Also see Aug. 21 PP Blog story on a TelexFree shift to yet another payment processor.)

BehindMLM.com is reporting that “rampant fraud” may be affecting TelexFree’s operations.