This image of a golden pyramid appeared on the Global-Unity website last month.
UPDATED 6:42 P.M. EDT (U.S.A.) The Autorité des marchés financiers (AMF) has issued an Investor Alert on the WCM777 MLM “program.”
Quebec’s securities regulator now joins at least nine other jurisdictions issuing Investor Alerts or filing actions against WCM777, also known as World Capital Market, Kingdom777 and Global-Unity. Global-Unity recently used a photo of a golden pyramid on its website, a possible taunt at regulators.
“World Capital Market, Inc., WCM777, Inc. and WCM777 Limited and their officers and representatives, Ming Xu, Zhi Liu and Harold Zapata, are not registered with the AMF and did not obtain a receipt for a prospectus from the AMF,” AMF said. “Consequently, any solicitation of Québec investors by these firms and individuals could violate the Québec Securities Act.”
AMF said the “scheme originated in California and is offered mainly as part of hotel presentations and through Internet ads and webinars.”
Quebec’s move brings the unofficial total of jurisdictions or regulatory agencies filing actions or issuing Investor Alerts against WCM777 to 10. The others are the country of Peru, the country of Colombia, the state of Massachusetts, the state of California, the state of Colorado, the state of Louisiana, the state of New Hampshire, the state of Alaska, the province of New Brunswick.
The WCM777 “program,” also known as Kingdom777 and Global-Unity, is now the subject of an Investor Alert in Alaska.
Alaska’s move brings the unofficial total of jurisdictions or regulatory agencies filing actions or issuing Investor Alerts against WCM777 to eight: The country of Peru, the state of Massachusetts, the state of California, the state of Colorado, the state of Louisiana, the state of New Hampshire, the state of Alaska, the province of New Brunswick.
“Investors have been promised returns of up to 140% in a period of less than one year,” said Kevin Anselm, director of Alaska’s Division of Banking and Securities. “This type of promise should raise serious red flags for investors, especially when traditional investments such as bank certificates of deposit are generally providing notably less return in the same period of time.”
Alaskans with information regarding World Capital Market may contact the Division at 907-269-8140 or through email.
Part of the TelexFree LLC “Balance Sheet” as it appears on the website of the Washington state Utilities and Transportation Commission.
A document published on the website of the Washington State Utilities and Transportation Commission claims that TelexFree LLC has provided millions of dollars in loans to other TelexFree enterprises, including a Nevada entity known as TelexElectric LLLP.
The loan sum was more than $2.022 million, according to the document. The business purpose of TelexElectric was not immediately clear. Also unclear is why the document was published on Washington state’s government website and whether members of the TelexFree MLM “program” knew they were funding intracompany loans.
TelexElectric was formed in Nevada on Dec. 2, 2013, according to Nevada records. TelexFree LLC also is a Nevada business. Both firms list TelexFree Inc. executives James Merrill and Carlos Wanzeler as partners or managers. TelexFree Inc., headed by Merrill and Wanzeler, is based in Massachusetts. Brazilian TelexFree executive Carlos Costa, who is or was associated with TelexFree LLC, is listed in Nevada as a “historical” TelexElectric general partner.
From Google search results.
The Washington state document is dubbed “Telexfree LLC Balance Sheet As of December 31, 2013.” The document claims that, in addition to the $2 million-plus loan to TelexElectric, a loan of more than $3.8 million was provided to an entity known as Telexfree Financial Inc.
Telexfree Financial appears to be a Florida entity under the control of Merrill and Wanzeler. The firm, which was formed on Dec. 26, 2013, lists an address in Coconut Creek, Broward County, according to Florida records.
Meanwhile, the Washington state document lists a loan of more than $500,000 to an entity known as TelexMobile. Where TelexMobile is based could not immediately be determined.
In addition to the loans to TelexElectric, Telexfree Financial Inc. and TelexMobile, there is a loan listed of more than $291,800 to an entity described as Ympactus. A TelexFree-related entity known as Ympactus Comercial Ltd. is based in Brazil.
Listed as an additional asset by TelexFree LLC is a “Propay Reserve” account said to contain more than $4.4 million.
According to the Washington state document, TelexFree LLC has or had accounts at ProPay, TD Bank (three accounts), Citizens Bank, Fidelity Bank, Fidelity Bank Sweep and Middlesex Savings. Most of the accounts were said to have modest balances, but the Middlesex Savings account was said to contain more than $5.4 million.
An entity described as “e-Wallet” was said to have a much larger balance: more than $31.6 million.
TelexFree LLC, according to the document, listed “other assets” totaling more than $27.4 million. These included more than $18 million at Fidelity Investment, nearly $7.3 million at Waddell and Reed, an asset-management firm, and $2 million in a savings account at Middlesex Savings.
The document appears to be dated Feb. 20, 2014.
TelexFree also is using the name “TelexFree International.” Where that entity is based is unclear.
TelexFree is the subject of a securities investigation in Massachusetts. Investigators in Brazil have called TelexFree a pyramid scheme.
Some promoters have claimed that the TelexFree “program” triples or quadruples money in a year. There also have been claims that TelexFree was building 500 hotels in Brazil in the run-up to this year’s World Cup and the 2016 Summer Olympics.
The bottom lines of TelexFree Inc. and the other TelexFree-related entities are not addressed in the TelexFree LLC document. TelexFree LLC is said to have more than $76.1 million in “total liabilities and equity.”
UPDATED 7:03 P.M. ET (U.S.A.) At a TelexFree pitchfest in a Massachusetts hotel this morning, a man promoting a credit-repair “program” linked to TelexFree claimed that TelexFree reps recently took a “private jet” from the Dominican Republic to Haiti.
“I felt like a rockstar,” the man said from the stage.
Once on the ground in Haiti, the man said, “we got in the Prime Minister of Haiti’s motorcade.”
This triggered “high-fiving,” the man said from the stage.
Things settled down when the TelexFree passengers observed throngs of poor people lining the road from the airport into the city, the man suggested.
Whether TelexFree executives were on the private jet and later purportedly traveled in a government motorcade is unclear. TelexFree executive Steve Labriola said last week that he and TelexFree “leaders” recently ventured to Haiti.
It also was not immediately clear whether the asserted TelexFree “high-fiving” and claims of a state motorcade providing shuttle service to TelexFree would prove embarrassing to Haiti’s government. Nor was it clear that the TelexFree reps were guests of the government. The Washington Embassy of the Republic of Haiti did not immediately respond to a request for comment from the PP Blog.
Laurent Lamothe is Haiti’s Prime Minister. He is a former telecom executive.
Similar seeds about government ties from promoters of other MLM schemes have proved embarrassing to other governments, including the government of the United States. In the 2008 AdSurfDaily MLM/HYIP Ponzi scheme, for example, some members of the scheme planted the false seed that ASD had been endorsed by George W. Bush, then the President of the United States.
The false seeds about Bush were one of the things that prompted the U.S. Secret Service to open the ASD probe. Agents went on to discover a massive Ponzi scheme hidden inside ASD. ASD used “ad packs” from which purported “rebates” flowed to disguise its $119 million investment-fraud scheme.
TelexFree offers something called “AdCentrals.” Some promoters have claimed that sums of money from $289 to $15,125 sent to TelexFree triple or quadruple in a year. The $850 million Zeek Rewards Ponzi scheme had a similar component. Like TelexFree members, Zeek members were told they got paid for posting ads about the company online.
“ZeekRewards told Affiliates that in order to supposedly ‘earn’ their points, they were required to place a short, free digital ad each day on one of the many free classified websites available on the internet,” the court-appointed receiver in the Zeek Ponzi- and pyramid-scheme case asserted in a lawsuit last month against alleged insiders.
“In reality,” Zeek receiver Kenneth D. Bell asserted, “the ads were just an attempt to manufacture a cover for what was nothing more than the investment of money by Affiliates with the expectation of receiving daily ‘profit’ distributions.”
One of Bell’s lawsuit targets is Scott Miller of Greenwood, Ind. Miller, an alleged winnner in Zeek’s massive Ponzi scheme, has spoken at at least one TelexFree event and may be one of TelexFree’s key pitchmen.
TelexFree Affiliates Claim Government Approval
It is somewhat common in the HYIP sphere for promoters to suggest a “program” has the backing of a politician, a government or a government agency.
At least one TelexFree-related Blog claimed in a post dated March 7 that the “program” has gained “SEC Approval from USA.”
The U.S. Securities and Exchange Commission (SEC) does not issue such approvals. In 2013, some TelexFree members worded promos to suggest that the U.S. government itself had authorized TelexFree to operate in the United States. During roughly the same time period in the spring of 2013, affiliates made this assertion (italics added):
Steve Labriola, Director of Marketing for Telex FREE, Boston, announced via email earlier today that they are ‘pulling out of Bank of America.’
Earlier, in roughly January of 2013, TelexFree affiliates were urging recruits to make walk-in deposits at a Bank of America branch in Massachusetts. The instructions strongly resembled instructions AdSurfDaily gave its recruits in 2008. TelexFree also used TD Bank, according to affiliates.
It is possible — though not confirmed — that U.S. investigators began looking into TelexFree around the same period in early 2013 in which affiliates were soliciting deposits through Bank of America and TD — while simultaneously claiming that certain TelexFree members could speed the flow of deposits if recruits emailed copies of their deposit slips to a Gmail address.
TelexFree says on its website that tickets to “new comp plan training & overview” event at the Massachusetts hotel today cost $164 and were “Sold Out.”
You’ve probably heard about the debacle at Mt. Gox, a Bitcoin exchange. Reuters, meanwhile, is reporting that a Bitcoin bank known as Flexcoin is shutting down after it lost $600,000 to a hacker attack.
Elsewhere there are stories about the tragic death of 28-year-old Autumn Radtke, CEO of First Meta Pte Ltd, a Bitcoin exchange.
Uncertainly about the future of Bitcoin and exchangers appears to be driving reload scams. These may be positioned as ways to recover Bitcoin losses incurred through Mt. Gox.
Something styled “BitcoinInvestmentFund” at a .net has appeared online. One of the links on the site, which appears have been registered in January 2014, leads to a forum in which this claim is made (italics added/verbatim):
Make millions EgoPay PerfectMoney Bitcoin SolidTrustPay in paying hyips fastest Real Investment
The PP Blog reported yesterday about a scam known as “Mutual Wealth” that allegedly was gathering cash though EgoPay, PerfectMoney and SolidTrustPay, which often are facilitators for fraud schemes.
Nothing is sacred in HYIP Ponzi Land. In a disturbing tale of disconnect, some promoters of TelexFree, an MLM “program” under investigation in North America, South America, Africa and the subject of warnings in Europe, more or less tried to cherry-pick recruits by posting in media accounts in Brazil about the suicide deaths of two TelexFree promoters.
Tacky doesn’t begin to describe it.
At 12:10 a.m. today, the PP Blog received a spam from someone (or something) tying to post in the Comments thread below this story about thousands of people being sued as a result of the Zeek Rewards scam. The would-be poster used the would-be user ID of “Hyip Egopay” and sought to plant a link to the purported Bitcoin recovery venture at the .net.
Within the would-be post was an assertion about “Investment Insurance.” It also issued this appeal: “Cover Your Lost [sic] on MTGOX.”
The would-be post appeared to solicit sums of between $300 and $250,000 — and the purported payouts were in the thousands of percent per hour.
Among the claims on the actual .net site is this: “Bitcoin Investment Fund is short term, high yield private loan program, backed up Our Newest system of Forex trading.”
A website styled MutualWealth.com is fraudulent and is part of an international pyramid scheme, the SEC says.
BULLETIN: (7th Update 8:51 p.m. ET U.S.A.) Entities known as Fleet Mutual Wealth Limited, MWF Financial Limited and Mutual Wealth are frauds that filed invalid forms with the SEC to dupe the masses, the SEC said.
An associated web domain styled MutualWealth.com also is a fraud, the SEC said in a statement and emergency court filing that alleges a pyramid scheme in which promoters become referral agents or purported “accredited advisors” to earn recruitment commissions.
“Mutual Wealth used Facebook and Twitter as well as a team of recruiters to spread a steady stream of lies that tricked investors out of their money,” said Gerald W. Hodgkins, an associate director in the SEC’s Division of Enforcement.
Some recent scams have purported to operate out of Hong Kong, something that appears also to be the case with Mutual Wealth.
“[A]lmost nothing that Mutual Wealth represents to investors is true,” the SEC said. “The company does not purchase or sell securities on behalf of investors, and instead merely diverts investor money to offshore bank accounts held by shell companies. Mutual Wealth’s purported headquarters in Hong Kong does not exist, nor does its purported ‘data-centre’ in New York. Mutual Wealth also lists make-believe ‘executives’ on its website, and falsely claims in e-mails to investors that it is ‘registered’ or ‘duly registered’ with the SEC.
And, the SEC said, Mutual Wealth may operate through entities in Panama and the United Kingdom “and through Russian or Belarussian nationals.”
From the SEC complaint (italics added):
Investors who complete an account application are instructed to transfer money to Mutual Wealth either by wire transfer to banks located in Latvia and Cyprus or through third-party payment processors such as SolidTrust Pay, EgoPay, or Perfect Money.
Like other fraud schemes, Mutual Wealth has a presence on the MoneyMakerGroup and TalkGold Ponzi forums.
U.S. District Judge Dolly M. Gee of the Central District of California has ordered an asset freeze on all accounts “at any bank, financial institution, brokerage firm, or third-payment payment processor (including those commercially known as SolidTrust Pay, EgoPay, and Perfect Money) maintained for the benefit of Mutual Wealth,” the SEC said.
Assisting in the probe are the FBI, the Financial and Capital Market Commission of Latvia, the Ontario Securities Commission and the Cyprus Securities and Exchange Commission, the SEC said.
According to the SEC’s complaint, Mutual Wealth operates through entities in Panama and the United Kingdom and uses offshore bank accounts in Cyprus and Latvia and offshore “payment processors” to divert money from investors. Mutual Wealth’s sole director and shareholder presented forged and stolen passports and a bogus address to foreign government authorities and payment processors.
As in previous scams, the Mutual Wealth fraud spread on social media, the SEC said.
“Mutual Wealth maintains Facebook and Twitter accounts that link to its website and serve as platforms through which it lures new investors,” the SEC said. “Some of Mutual Wealth’s ‘accredited advisors’ then use social media channels ranging from Facebook and Twitter to YouTube and Skype to recruit additional investors and earn referral fees and commissions.
“Mutual Wealth’s Facebook page spreads such misrepresentations as ‘HFT portfolios with ROI of up to 250% per annum. Income yield up to 8% per week,’” the SEC said. “A Facebook post on Aug. 12, 2013, boasted ‘$1000 investment into the Growth and Income Portfolio made on April 8th, 2013 is now worth $2,112.77.’ Mutual Wealth regularly posts status updates for investors on its Facebook page, and the comment sections beneath the posts are often filled with solicitations by the accredited advisors. Mutual Wealth also tweets announcements posted on its Facebook page.”
Scammers recently have been purporting they are conducting IPOs or pre-IPOs or are registered with the SEC.
“Mutual Wealth has filed three Securities Act Forms D with the Commission,” the SEC said. “Each Form D purports to give notice of offerings of securities that are exempt from registration with the Commission under Regulation D of the Securities Act.
“But Mutual Wealth’s offers and sales of securities do not qualify for the exemptions cited in the Forms D or any exemption under from registration under Regulation D of the Securities Act. Consequently, the Forms D are invalid and of no legal effect,” the SEC said.
About 150 U.S. investors opened Mutual Wealth accounts, plowing “at least” $300,000 into the scheme, the SEC said.
URGENT >> BULLETIN >> MOVING: (8th Update 2:40 p.m. ET March 4, U.S.A.) The court-appointed receiver in the Zeek Rewards Ponzi- and pyramid-scheme case has sued alleged insiders and net winners, including members of the 2008 AdSurfDaily Ponzi scheme.
Parts of the complaint read like a re-living of the ASD scheme, with Zeek Receiver Kenneth D. Bell alleging Zeek’s penny-auction arm (Zeekler) was in trouble early on and that Zeek operator Paul Burks borrowed money from another insider to keep things going. The fraud later expanded massively, Bell alleged.
At one point, according to Bell, former Zeek COO Dawn Wright-Olivares “excitedly” told Burks, “I think we can blow this OUT together — we’ve already attracted a great many big fishes.”
But the insiders “were aware that the payouts to Affiliates would be funded by new participants rather than retail profits from the penny auctions,” Bell alleged.
Named defendant “insiders” were Burks of Lexington, N.C.; Wright-Olivares of Clarksville, Ark.; Daniel Olivares of Clarksville, Ark.; the estate of the late Roger Anthony Plyler of Charlotte; Alexandre “Alex” de Brantes, the husband of Wright-Olivares and a resident of Clarksville, Ark.; and Darryle Douglas of Orange, Calif.
Burks, the receiver alleged, received “in excess” of $10 million from Zeek; Wright-Olivares received more than $7.8 million; Daniel Olivares received more than $3.1 million; Plyler, who once lent money to Burks, received more than $2.3 million; Douglas received more than $1.975 million. An amount was not listed for de Brantes.
Named winners were former AdSurfDaily member Todd Disner of Miami (more than $1.875 million); former ASD member Jerry Napier of Owosso, Mich. (more than $1.745 million); Trudy Gilmond of St. Albans, Vt. (more than $1.75 million); Durant Brockett of Las Vegas (more than $1.72 million); Darren Miller of Coeur d’Alene, Idaho (more than $1.635 million); Rhonda Gates of Nashville (more than $1.425 million); Michael Van Leeuwen, also known as “Coach Van” of Fayetteville, N.C. (more than $1.4 million); David Sorrells of Scottsdale, Az. (more than $1 million); T. Le Mont Silver Sr. of Orlando, Fla. (more than $773,000 under at least two user names, and more than $943,000 through a Florida shell entity known as Global Internet Formula Inc. with one or more Zeek user names).
One of Silver’s usernames was “mentor,” Bell alleged.
Also named winners were Karen Silver, Silver’s wife (more than $600,000); veteran HYIP pitch team Aaron and Shara Andrews of Lake Worth, Fla. (more than $1 million through a Florida shell entity known as Innovation Marketing); David and Mary Kettner of Peoria, Az. (more than $930,000 via one or more user names and shell companies known as Desert Oasis International Marketing LLC and Kettner & Associates LLC); Lori Jean Weber of Land O’Lakes, Fla. (more than $1.94 million through a shell company known as P.A.W.S. Capital Management LLC).
Bell also sued a “Net Winner Class” of as many as 9,000 U.S. residents or entities who allegedly harvested illicit gains of $1,000 or more from Zeek. Lawsuits against international winners will come later, Bell said.
In December 2013, Wright-Olivares and Olivares were charged criminally. They pleaded guilty last month for their roles in the scheme and are liable for more than $11.4 million in restitution and penalties, the SEC said.
As the SEC previously alleged, Zeek relied on a so-called “80/20” program to sustain the Ponzi deception. Bell today built on that theme. From the complaint against insiders (italics added/spacing modified):
Dawn Wright-Olivares explained and promoted the plan in a Skype chat as follows:
Here’s a scenario here where you could be receiving $3,000 per month RESIDUALLY. Let’s use a 1% daily cash-back figure in this example (Please note: This is only an example and the actual amount will vary day to day).
When you reach 50,000 points in your account, then you could start doing an 80/20 cash-out plan. Pay close attention? When you hit 50,000 points in your account, if the daily cash-back percentage is 1%, ZeekRewards will be awarding you with $500.00 each day. First of all, did you catch that? … you’re making $500 per day … it’s your money! Ok, the 80/20 plan works like this, take 80% of that $500 (or $400) and purchase more VIP bids to give away to new customers as samples to continue growing your points balance.
Then, keep doing what you’ve been doing every day, which primarily consists of giving free bids away as samples and placing one free ad per day for Zeekler.com’s penny auctions and submitting into your ZeekRewards back office. Then, pull out 20% of the $500 (or $100) and request a check weekly. That’s $700 per week, or about $3,000 per month in residual income! And keep in mind, these amounts can continue to grow day after day and month after month.
HYIP schemes, including ASD and Zeek, often implement deceptions such as 80/20 programs as part of a bid to reduce cashout amounts to let the scheme continue to live. Insiders and veteran Ponzi pushers typically know they’re a crock.
Daniel Olivares, Bell said, has a Zeek user name of “dcolive.”
On June 14, 2012, about two months prior to the collapse of Zeek, RealScam.com moderator and PP Blog poster “Glim Dropper” posted a link on the PP Blog that established a tie between Zeek promoters and ASD promoters. ASD was a $119 million Ponzi scheme operated by now-jailed operator Andy Bowdoin.
RealScam.com is an antiscam forum.
The link “Glim Dropper” posted was at a URL styled “dcolive.com.”
From “Glim Dropper’s” observations at the time (italics added):
I’d draw your attention to about five minutes into the call when Dawn recalls a conversation with Jerry Napier. Jerry was quoted as loving ZR and never wanting to have to build another organization with another program and mentioned a previous program and the litigation it was still facing and he mentioned “similarities” between ZR and that previous program.
It is common in the HYIP sphere for promoters to move from one fraud scheme to another.
Napier’s exposure to ASD is unknown. But the Zeek receiver now says Napier received illicit gains of more than $1.745 million. The alleged illicit Zeek gains of former fellow ASD member Todd Disner are even higher: $1.875 million.
Precisely how many ASD members went on to join Zeek is unclear. What is clear is that both firms used similar business models and sweetened the deal for certain members.
Bell alleged today that Zeek had a “Sweet 16” deal in which participants paid $999 to mine even more “passive” gains.
“The Sweet 16 was another means by which [Rex Venture Group] made payments on a passive investment,” Bell alleged. “It did not involve the sale of a product, nor did it require a member to recruit other participants into the program.”
Disner once filed suit against the United States, alleging its ASD Ponzi case was a “tissue of lies” and a “house of cards.” A federal judge tossed the lawsuit, after Bowdoin pleaded guilty to wire fraud and admitted ASD was a Ponzi scheme.
TelexFree affiliates have a role in easing suffering in Haiti, Steve Labriola suggested in Spain. Source: Video on ConventionTelexFree.com.
UPDATED 12:23 P.M. ET (MARCH 4, U.S.A.) A 10-hour video of the TelexFree confab in Spain Saturday and Sunday has emerged, apparently a recording of a once-live feed.
After being billed as headliners, neither Brazil-based TelexFree executive Carlos Costa nor American MLM lawyer Gerald Nehra appeared on the stage to accept awards.
U.S.-based TelexFree marketing executive Steve Labriola walked onto the stage to accept Nehra’s award.
“This is for Jerry,” he said. “I was asked to come up and receive this for Jerry.”
Labriola did not say who asked him to accept the award on Nehra’s behalf.
Nehra does “most of our corporate law,” Labriola said. “He’s a great man. And he also works long hours, like all of you out there, and I [will] be honored to give this to him.”
Whether Nehra was in Spain was not immediately clear. He’d been billed by a website styled ConventionTelexFree.com as a “Special Guest” at the Madrid event.
Labriola then accepted an award for himself.
“Somebody said to me once — ‘Network marketing: it’s a get-rich-quick scheme,’” Labriola recalled in accepting the award. “But let me tell you, if you talk to any of the leaders or anybody that is working their business, there is no get-rich-quick. There is long hours.”
The claim was at odds with various claims online that TelexFree produces “passive” income. Labriola hinted that the firm was attempting to address inappropriate marketing. Whether he’ll clash horns with American MLMer Faith Sloan, with whom he’s been pictured, wasn’t immediately known.
Among Sloan’s claims in 2013 was that TelexFree produced “100% Passive Income.”
TelexFree says it’s in the VOIP business and is expanding into cell phones.
Labriola and other TelexFree “leaders” recently ventured to Haiti, Labriola said, suggesting it could be a warm market for TelexFree, which purportedly is changing people’s lives.
“We drove through some areas that could see . . .” he said, his voice trailing off.
“There’s places in this world that need help,” Labriola continued. “It’s up to all of you to keep working your business. Keep your products and services out there. Make sure that you’re helping people where they need help. And every person that you reach out and touch and help save their life and help move them forward will help your life get a little bit better.”
Haiti is perhaps the poorest country in the Western Hemisphere. Its neighbor — the Dominican Republic — may be emerging as a TelexFree stronghold.
“Don’t worry about the Bloggers online and the things that they’re saying, because we will keep doing the right things in moving forward,” Labriola said.
The PP Blog reported Friday — on the eve of the TelexFree confab in Spain — that the firm was under investigation in the United States. It’s also under investigation in Africa and South America. Brazilian investigators say TelexFree is a pyramid scheme.
Carlos Wanzeler, another TelexFree executive at the Madrid event, appears to have accepted awards on behalf of himself and fellow TelexFree executive Carlos Costa, perhaps the firm’s most well-known executive.
Whether Costa was in Spain was not immediately clear. Like Nehra, he’d been billed as a star attraction.
Among the other TelexFree honorees was Sann Rodrigues, a former defendant in a pyramid-scheme and affinity-fraud case filed by the SEC in 2006. Rodrigues was accused of targeting the Brazilian community in an affinity-fraud scheme that involved telephone cards.
TelexFree President James Merrill also appeared at the confab and received an award.
“Carlos Wanzeler was up here talking about Carlos Costa . . . two of the greatest leaders that I’ve met in my life,” Merrill said. “They’re very strong. They’re courageous, and they’re fighting for you. And I want you all to know that they didn’t join my team, I joined their team. OK. They’re great leaders.”
Merrill predicted that the excellent lawyering and marketing-consulting TelexFree has received will make TelexFree one of the great MLM companies of all time. Helping drive growth, he said, would be the former president of Excel Communications.
Excel, according to its Wikipedia entry, once used an MLM compensation structure, but suffered when margins on long-distance phone service dropped precipitously. A bankruptcy filing followed.
Excel sought to be released from its contracts with its independent representatives. This allowed it to continue to receive revenue from its large base of installed customers without paying eternal commissions to the franchisees. Excel continued to operate but ceased to be a multi-level marketing company. Although the change created much cash enabling it to pay creditors, it was seen as shortsighted by the franchisee association because it removed the primary source of sales and customer loyalty.
URGENT >> BULLETIN >> MOVING: The office of Massachusetts Commonwealth Secretary William Galvin has confirmed an investigation into the TelexFree MLM “program” is under way.
“There is an investigation going on, but I can’t comment beyond that,” said Brian McNiff, a spokesman for Galvin.
The brief statement to the PP Blog marks the first confirmation by a U.S. securities regulator that TelexFree is under investigation in the United States. TelexFree is under investigation in Brazil, amid pyramid-scheme allegations.
TelexFree is scheduled to hold its purported “international convention” beginning tomorrow in Spain.
A source outside of law enforcement told the Blog yesterday that Galvin’s office had issued subpoenas for certain people to appear before the Massachusetts Securities Division on March 5 at 10 a.m. and 2 p.m.
A federal agency also has interviewed a person who may have knowledge about TelexFree, the source said.
U.S. Attorney General Eric Holder was hospitalized in Washington this morning after “experiencing symptoms including faintness and shortness of breath,” the Justice Department said.
Holder is 63.
“He is currently resting comfortably and in good condition,” the Justice Department said. “He is alert and conversing with his doctors. Additional information will be provided as it becomes available.”
UPDATE 6:08 p.m. ET (USA): The Attorney General has been released from the hospital, the Justice Department said in a statement this afternoon. Here is the full statement (italics added):
Director of Public Affairs Brian Fallon released the following statement this afternoon:
The Attorney General has been discharged from MedStar Washington Hospital Center. He was taken there earlier today as a precaution, after experiencing lightheadedness and shortness of breath during a senior staff meeting at the Justice Department in Washington. The Attorney General arrived at the hospital at approximately 10:30 am, and was treated for an elevated heart rate. He received medication that quickly restored his heart rate to a normal level, and after successfully completing a full range of tests, doctors were satisfied that the Attorney General could be discharged. He departed the hospital at 1:15 pm. He walked out without any assistance, and has returned home, where he is resting comfortably. Several years ago, the Attorney General experienced similar symptoms, but in milder form that did not require serious medical attention. Throughout today, the Attorney General has remained alert and in good spirits. He appreciates the well wishes from so many friends and colleagues, and is grateful for the excellent care he received from the professionals at MedStar Washington Hospital Center.
A giant human hand puts the top piece on a golden pyramid. Source: Global-Unity website.
Updated 6:24 p.m ET (U.S.A.) Members of the WCM777 scam, which morphed into Kingdom777 after regulatory actions were filed, have been informed by a “program” upline that the venture now is operating as Global-Unity, a source told the PP Blog today.
Parts of the Global-Unity website appear to be under construction. The “News” tab, for instance, includes no releases.
Strangely, though, it does include a photo of a giant human hand placing what appears to be the top piece on a giant golden pyramid. Whether the photo was designed as a taunt to regulators was not immediately clear.
WCM777 is the subject of regulatory actions or Investor Alerts in the United States, Canada and Peru. TelexFree is the subject of a pyramid probe in Brazil.
HYIP scammers have been known to taunt regulators. Frederick Mann, the purported operator of the JSSTripler/JustBeenPaid HYIP scam, once claimed that government workers were “part of a criminal gang of robbers, thieves, murderers, liars, imposters.”
JSSTripler/JustBeenPaid purported to pay 2 percent a day (precompounding). The original scam changed names at least twice after the Zeek Rewards’ Ponzi action by the United States in 2012. Zeek was a scam designed to make investors believe they’d received an average payout of 1.5 percent a day, the SEC said.
JSS/JBP’s Mann was a former AdSurfDaily Ponzi-scheme pitchman and appears to have had sympathies for “sovereign citizen” political extremists in the United States, including convicted “militia” man Francis Schaeffer Cox.
A scam known as “Profitable Sunrise” that became the subject of state and federal regulatory actions in the United States last year once promoted a 2.7-percent-a-day investment “plan” known as the “Long Haul.” The Long Haul payout purportedly was due April 1, 2013 — April Fool’s Day and the day after Easter.
At least one Profitable Sunrise supporter taunted North Carolina regulators after the state filed a Cease and Desist order against the “program.” (See Comments thread below this story.)
Profitable Sunrise, like both WCM777 and TelexFree, was targeted at Christians. Both the “Long Haul” name and the purported payout dates could have been taunts.
In promos, TelexFree, WCM777 and Profitable Sunrise each used an image of the Christ the Redeemer statue in Brazil.
